ANNUAL REPORT
2 0 1 5
ANNUAL REPORT 2015 > 1
This annual report is printed on Maine recycled silk paper which comprises 60%
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Accreditation standards. Waterco Limited is pursuing reduction of its carbon footprint
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2 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
ANNUAL REPORT 2015 > 3
4 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
ANNUAL REPORT 2015 > 5
Group
Consolidated
Financial Highlights
Financial Year Ended
2015
$
2014
$
2013
$
2012
$
2011
$
Operating revenue ($ million)
88.17
77.97
68.80
66.56
68.20
Sales revenue ($ million)
80.89
77.12
68.21
66.14
67.74
Earnings Before Interest and
Tax (EBIT) ($ million)
4.56
3.43
4.62
4.54
6.07
EBIT / Sales Revenue
5.6%
4.4%
6.7%
6.9%
9.0%
Profit before income tax
($ million)
3.05
1.93
3.19
2.90
4.48
Net profit after tax ($ million)
1.55
0.97
1.72
2.09
3.18
Total assets ($ million)
97.28
92.98
85.75
74.15
72.50
Equity ($ million)
56.05
50.60
46.05
41.82
40.11
Basic Earnings per share
4.1 cents
2.6 cents
4.9 cents
6.1 cents
9.8 cents
Dividend per share paid
3.0 cents
7.0 cents
7.0 cents
8.0 cents
9.0 cents
Net Tangible Assets per share
$1.54
$1.41
$1.33
$1.23
$1.21
6< WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
6 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Chief Executive
Officer’s Review Of
Operations
some degree by a favourable
that the operations of this division
adjustment
in
the Malaysian
are fundamentally sound, despite
entity,
for deferred
taxation
the fire in our Head Office in
accumulated from prior years.
Sydney that affected operations
In addition, the Canadian entity,
in January 2015.
in accordance with accounting
principles, wrote off a deferred tax
asset taken up in previous years.
These adjustments are one-off
and not related to the current
year’s operations and resulted in a
higher than normal tax incidence.
Earnings Before Interest and Tax
(EBIT) for the year increased by
33% to $4.56 million from $3.43
million, through Sales Revenue
growth of 5% to $80.89 million
SOON SINN GOH
Chairman/CEO
REVENUE AND PROFITABILITY
from $77.12 million.
The North America and Europe
Division has reduced the level of
its EBIT losses by 51%. Although
this performance is a marked
improvement over PCP, it was still
below expectation. This is mainly
because Canada registered a loss
of $0.67 million against a small
projected profit, as a result of
pricing commitments made the
previous year to the Canadian
market when the Canadian Dollar
was approximately 93 cents to
The Group reported a Net Profit
Activities in the Australian and
the US Dollar. The subsequent
After Tax (NPAT) of $1.55 million,
New Zealand Division account
increase
in cost
to Waterco
registering an increase of 60% on
for a major portion of the Group’s
Canada, as a result of the weaker
the previous corresponding period
profitability and sales. The EBIT of
Canadian dollar against the US
(PCP) but coming in below the
this Division came in above that
dollar, is estimated to be $0.56
profit guidance provided at the last
of the PCP, and we are confident
million.
Annual General Meeting. Losses
in North America and Europe
DIVISIONAL EBIT PERFORMANCE
entities were not tax-effected,
accentuating their impact on the
Group’s profitability. The Australian
and Malaysian entities carried
out a review of the deferred
tax assets and
liabilities. This
resulted in an adverse adjustment
in the Australian entity, off-set to
The breakdown of EBIT contributions by division is as follows:
FY15
($000)
FY14
($000)
Australia and New Zealand
3,830
3,231
North America and Europe
(988)
(2,007)
Asia
Consolidated Reported EBIT
1,714
4,556
2,209
3,433
% Change
+ 19%
+ 51%
– 22%
+ 33%
ANNUAL REPORT 2015 > 7
AUSTRALIA AND NEW ZEALAND (ANZ)
The Australia and New Zealand Division derives its revenue
predominantly from the domestic swimming pool industry. Apart
from selling a wide range of products, including chemicals for
swimming pool water treatment, Waterco is also the franchisor
of the Swimart chain of pool stores. Through more than three
decades of experience, Waterco has acquired an extremely good
understanding of the factors that drive consumer demand in the
after-market. The franchise programme has been developed and
improved on in-house since 1984, with the opening of a company-
owned pool shop in Sydney. This shop was subsequently franchised
and developed into the Swimart Pool and Spa franchising retail
system. This solid foundation has enabled this Division to maintain an
acceptable level of profitability through the challenging times in the
last few years, during which the industry underwent consolidation
and transformation.
Steady market share in the domestic pool sector has underpinned
the Division’s performance. The Division’s introduction of a range of
energy and water saving swimming pool products generated sales
growth, affirming Waterco’s expectation of the market’s appetite for
environmentally friendly products, such as Waterco’s Hydrostorm
ECO pump and Glass Pearls for improved filtration performance
and reduced water usage from shorter backwash cycle. This was
instrumental in enabling the company to retain market share.
Another product, using hydrogen peroxide and ozone as sanitisers,
has been launched in recent years and is expected to gain further
traction as implementation of marketing strategies progress. The
product enables swimming pools to be totally chlorine-free and
enriched with oxygen and benefits swimmers who suffer from
eczema or allergies.
Unfortunately, a fire in Head Office in Sydney disrupted sales
operations throughout Australia and New Zealand (ANZ), just as we
were experiencing a pleasing sales trend going into the summer.
Our main computer server was out of service for the most part of
January, traditionally one of the peak months in our season. We
estimate that the loss in Sales Revenue clearly exceeded $1 million.
Fortunately, the Group is well-insured and the loss in gross profit
is now in the process of being assessed, in conjunction with our
Insurer. Expenses that are recoverable from insurance are taken up
as an asset in the balance sheet, while those that are not subject to
insurance claims have been written off during the year.
8 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Swimart’s successful business model continues
to provide the company and its franchisees with
consistent and sustainable growth. This has resulted
in a first class business and long-term franchisee
relationships; indeed, many franchisees have been with
Swimart in excess of 20 years.
One of the attractions of the Swimart franchise is its low
fees. As Waterco makes its profit from sales of product
directly to the franchisee, this allows it to keep franchise
fees low and franchisee profits robust.
Another factor attracting new franchisees to the
Waterco group is the variety of work opportunities and
income streams. These range from retail sales through
stores, in-home pool servicing, to light commercial pool
servicing.
Swimming pool energy efficiency is now being factored
into installations – both new build and retrospective –
with a key focus on variable speed pumps. Waterco
has long been addressing this through our R&D
activities and continuous development of energy
efficient pumps.
Waterco’s Hydrostorm ECO-V variable-speed pool
pump is a case in point. It allows the pool owner to
achieve the ideal filtration flow rate with the least
amount of energy consumption. This product is
noticeably quieter, requires less maintenance, lasts
longer and, through slower water filtration rates, allows
for better and more effective purification of pool water.
Hydrostorm ECO-V is equipped with a variable speed
motor that also allows pool owners to set the pump at
a low, energy saving flow rate for every day filtration.
The pump uses over 80% less electricity than a regular
pool pump.
Glass Pearls offer considerably finer filtration than other
filter media on the market and are therefore capable
of providing outstanding water purity and clarity. They
also require 20% less water for backwashing when
compared to sand.
Whereas other filter media may contain different
contaminants, Waterco's Glass Pearls are chemically
inert for the ultimate water purity.
Glass Pearls have become the filter media of choice
in commercial installations around the world, including
Leicester General Hospital’s Hydrotherapy Pool in the
United Kingdom.
Waterco's EnviroPro Eco range consists of a select
number of Waterco’s high quality, energy efficient and
award-winning water saving products. This popular
range includes: Hydrostorm ECO pump, BriteStream
Multicoloured LED lights, Admiral robotic pool cleaners,
MultiCyclone pre-filter, MultiCyclone Ultra, Opal XL
cartridge filter, Micron ECO granular filter, Glass beads,
Zane Solar Gulfpanel and Electroheat heat pumps.
NORTH AMERICA AND EUROPE
Waterco North America and Europe comprises the Group’s
operations in the USA, Canada, UK and France.
Waterco USA (WUSA) The US market is the largest in the world
and Waterco USA had enhanced its presence there through a
substantial investment in its acquisition of Baker Hydro in March
2005. Our operations in Augusta, Georgia manufacture larger filters
and assemble commercial pumps.
In the United States, the closure of the heat pump manufacturing
operations, now relocated to Waterco Far East in Malaysia, resulted
in write-down in inventory and production wastage, totalling $0.46
million, which accounted for a majority of the losses during the
year. Following this change, a smaller production team will focus
on manufacturing of larger filters, whilst the management of WUSA
will channel its efforts into marketing our products more effectively.
Sales of commercial and industrial filters underpinned Sales revenue
in WUSA, and better results are expected for future years.
Waterco Canada (WCI) This Entity was the Group’s original centre
for the manufacture of heat pumps. Its expertise, developed over
more than two decades, with assistance from our Research and
Development division in Sydney, has improved performance of
our products in both quality and cost. This continues to benefit the
Group and enables other manufacturing entities in the Group to
produce heat pumps of quality. WCI is now a trading entity with heat
pumps as their key product, having transferred the manufacturing
operations to Malaysia.
WCI registered an EBIT loss of $0.67 million, a major factor for
this being the weakening of the Canadian Dollar. With most of the
imports of heat pumps into Canada sourced in US Dollar, margins
were significantly adversely affected, as selling prices could not be
increased in the middle of the season.
ANNUAL REPORT 2015 > 9
Waterco Europe (WEL), combining an entity set up in 2003 and the
acquisition of Lacron in 2004, enjoys a continuous and successful
history of almost 40 years in the manufacture of fibreglass filters.
The renowned “Lacron” name is synonymous with quality filters
and coupled with progressive manufacturing techniques – which
were introduced after the acquisition – it has enabled WEL to bring
to the market filters of quality at acceptable prices. As a result, both
the Lacron and the Waterco brands are now well-recognised as
quality products in Europe. This recognition continues, even after
the manufacturing operations were transferred to Malaysia and
China, because the same high standards have been maintained.
Economic conditions in the UK improved considerably with sales
revenue improving strongly. Margins recovered as a result of
a stronger British Pound although negated to some degree by a
weaker Euro. For this financial year, WEL returned record sales
revenue and profit.
Waterco France (WFR) was set up as the thrust into Europe, with
UK as the base. France is one of the largest markets in Europe.
However, with the business environment in Europe remaining
unchanged during the financial year, this Entity continued to
consolidate its operations, in preparation for a higher level of activity,
when the business environment improves.
ASIA
Waterco Far East in Malaysia (WFE) was borne out of Waterco’s
familiarity with the Southeast Asian market. WFE was initially a sales
operation designed to service Waterco Australia’s Southeast Asian
customer base. In 1991 WFE added manufacturing operations to
our undertakings in Kuala Lumpur, Malaysia. As well as bringing the
Group closer to our markets in Southeast Asia, this also gave cost-
efficiency in our manufacturing operations. Since then, WFE has
become the principal manufacturing facility for pumps and filters for
the Waterco Group. WFE continues to deliver new products to give
the Group an edge in our marketing activities.
10 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Setting new global benchmarks in durability, versatility,
reliability and longevity, Waterco’s Micron fibreglass
filters are the preferred choice for commercial and
industrial operations.
Manufactured from the highest grade of non-corrosive
materials, Micron fibreglass filters are ideal for harsh
environments including seawater applications. Available
in top mount, side mount and horizontal configurations,
Waterco has the capability of adapting its fibreglass
filters to meet customer specifications.
Purpose-built for aquatic facilities, water parks and
large commercial swimming pools. Hydrostar Plus
pumps are high performance corrosion resistant
thermoplastic pumps.
The unique construction of the Hydrostar Plus offers
several advantages in comparison with traditional steel
or cast iron commercial pumps. Its glass reinforced
thermoplastic body possesses superior mechanical
and chemical resistance compared to steel and is
able to withstand damage from many types of water
treatment chemicals.
Currently there are 7.5Hp and 10Hp sized thermoplastic
commercial pumps, with Waterco working to increase
this range.
Established in 1971, Lacron Ltd. is Britain’s largest
and most progressive manufacturer of pressure sand
filters. Approximately 80% of Lacron’s entire production
is exported to established companies in over 40
countries. Renowned for its superior British engineering
excellence, Lacron’s reputation for quality and durability
is unequalled throughout Europe and across the world.
Internationally, Lacron Commercial Fibreglass Filters are
the preferred choice for more intense commercial
installations such as large-scale spas and heavy-use
pools.
WFE has achieved ISO9001:2008 certification, the internationally
recognised standard for the quality management of businesses,
and demonstrates the existence of an effective and well-designed
quality management system, which stands up to the rigours of
an independent external audit. A key criterion of this standard is
that the management system can provide confidence in creating
products that meet expectations and requirements.
Local sales in Malaysia improved significantly, in spite of weaker
economic conditions. Increased production volume with the addition
of heat pumps production line has improved overall efficiency.
Waterco China This entity commenced operations in 2000, delivering
advantages of low operational costs and a foothold into the huge
China market. Today, these operations manufacture filters primarily
for the European and the Australian markets. High manufacturing
standards have been maintained, enabling the acceptance of filters
made by Waterco China, with the Waterco brand, in these markets.
Waterco China has also achieved an internationally recognised
quality assurance certificate.
This Entity performed below expectation during the year, as a result
of a slow-down in the housing market in China.
Waterco International in Singapore (WI) focuses on sales in
Asian countries, other than Malaysia and China, where we have our
own trading entities. WI also provides technical assistance to our
Indonesian entity and has been able to contribute to the growth of
the latter. WI has improved on its performance over PCP.
Reliable, highly efficient and economical to run,
Waterco’s Electroheat heat pumps extract heat from
the air (similar to a reverse cycle air conditioner), and
use that heat to produce hot water.
Compared to gas and electric, heat pumps use just a
fraction of the energy to generate the same amount
of heat. Although initially heat pumps take longer than
gas heaters to warm up the pool or spa water, they
are much more economical and will then maintain the
heating as well as gas heaters.
As a guide, you can save up to 80% over LPG and 50%
over natural gas fuelled heaters.
Waterco’s Far East manufacturing plant spans more
than 22,500 square metres, employs 300 people, and
provides for global manufacturing, design and product
development, and R&D operations conveniently and
cost-effectively under one roof.
Current ISO 9001:2008 Quality Management Systems
certification ensures that Waterco’s manufacturing
facilities meet
and
consistently provides products that “meet customer
and applicable statutory and regulatory requirements”.
The plant also includes a chemical blending and
packing facility, and laboratory.
international benchmarks,
Waterco’s heat pump assembly line not only conforms
to ISO 9001:2008 requirements and global regulatory
standards but is now equipped with heat pump lab
testing capability.
ANNUAL REPORT 2015 > 11
PRODUCT DEVELOPMENT AND WATER TREATMENT
The Group continues to invest in Research and Development in
order to be at the forefront of the industry. The number of patents
that the Group has secured or are in the process of applying for
continues to increase.
Product innovation and research and development in the water-
treatment subsector are considered to be critical in Waterco staying
at the forefront of the industry. Waterco considers water-treatment
products and systems to be a key revenue driver for the Group.
As such, ensuring that our products and systems are appropriately
protected is of value and importance.
The array of patents will improve Waterco’s position in the servicing
of swimming pool markets globally and are expected to improve the
appeal of the Swimart franchise, as well as that of other pool shops
which market the products.
Waterco’s key products for the future continue to be the Hydroxypure
range of products. The system uses two disinfectants (ozone and
hydrogen peroxide) that actively work in harmony to increase
active oxygen in the water. The synergy of the two disinfectants
ensures the water environment is safe, without the creation of
harmful chemical by-products. The end result is a swimming pool
that is totally chlorine-free and enriched with oxygen. Hydroxypure
is good news for those with eczema and allergies. It is the only
such sanitisation system to receive a tick of approval from the
National Asthma Council Australia. Waterco sees a bright future for
this range of products, as this chlorine-free range of products will
be increasingly popular, as users become more conscious of the
ecology.
Waterco’s Micron Commercial Fibreglass Filters are
made from continuous strands of high quality fibreglass
filament wound under controlled tension to create a
seamless, impervious vessel. This produces a filter that
is free from welds or seams, or special tank linings that
typically corrode or electrolyse.
Waterco’s revolutionary winding technology further
strengthens the fibreglass structure so it can withstand
a working pressure of up to 1,000 kPa (150psi).
Waterco has well and truly transcended its role as an
Australian pool product manufacturer into one of the
world's true pioneers of healthy water systems.
By simplifying advanced drinking water treatment
technology, it has successfully applied it to treating
swimming pool and spa water with its successful
Hydroxypure system, a chlorine-free sanitisation
system. Considered the most significant breakthrough
in pool treatment in 20 years, this naturally formulated
system is catering to the widespread movement away
from chlorinated water.
Hydroxypure is being used to purify water in some really
interesting and unique applications, including water
features, council pools and a private pool in Dubai that
is exclusively used by a herd of reindeer.
12 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
DIVIDEND AND OUTLOOK
The results, from the NPAT headline figure, is significantly below
expectation. However, the underlying profitability is better than that,
as tax adjustments stated earlier in this report has impacted the
tax charge for the year. If we set aside the tax adjustments and
look at the Profit Before Tax, the results are less than 10% below
expectations and forecast. Further improvements in North American
entities in the new Financial Year are expected with manufacturing
activities now reduced to a minimal level.
The Board will provide a profit guidance at a later stage for the
financial year ending 30 June 2016, as more information becomes
available during the year.
Waterco declares a final dividend payment of 5 cents per share,
payable to shareholders on 14 December 2015. With no dividend
declared at the Half Yearly Report, this dividend of 5 cents is the
total dividend for the year, a satisfactory outcome in an environment
of poor global economic conditions.
A unique program in New Zealand is literally taking
pools to schools – and Waterco is playing a vital role
with the provision of the Hydroxypure sanitisation
system.
The Pools iN SchoolZ program aims to ensure lower-
decile school children aren’t prevented from learning
water safety and swimming skills by the lack of access
to private or public pools.
Each pool in the Pools iN SchoolZ program is used
by up to 200 students a day, so it was crucial to
create an inviting aquatic environment to maximise
the opportunity for these kids to become proficient
swimmers.
Hydroxypure sanitisation system is ideal for anyone
with respiratory problems or skin allergies like asthma
or eczema. This was especially important with the
increasing number of children who have a reaction to
chlorine.
Hydroxypure is endorsed by the National Asthma
its Sensitive
Council Australia and approved by
Choice® program.
More than 7 million Australians suffer from allergies and
more than 2 million suffer from asthma. The Sensitive
Choice® blue butterfly symbol is a way of recognising
products and services from companies that support
asthma and allergy care.
The Sensitive Choice program is a partnership between
the Asthma and Respiratory Foundation of New
Zealand and the National Asthma Council Australia and
includes over 200 products and services certified as
being better choices for asthma and allergy sufferers.
ANNUAL REPORT 2015 > 13
Board of Directors
SOON SINN GOH - B COM FCPA
Chairman/CEO
Mr. Goh is the founder of Waterco Limited. He has been a member of the Board
since the Company’s incorporation in February 1981. Prior to the inception of
Waterco, he was the Managing Director of a company specialising in the
construction of water and sewage treatment facilities. His extensive experience
in the water treatment industry is instrumental to the success of Waterco.
He held no other listed company directorships during the past three financial
years.
BRYAN GOH - B ECON
Group Marketing Director
Mr. Goh was appointed to the Board in June 2010.
As the Group Marketing Director, Mr. Goh has overall responsibility for business
and product development in Australia and oversees the marketing activities of
Waterco’s overseas subsidiaries.
Mr. Goh was on the board of directors of The Swimming Pool & Spa Association
of New South Wales Ltd (from February 2005 to February 2009), a non-profit
organisation dedicated to maintaining and improving standards within the industry
for the betterment of consumers, pool builders and suppliers.
He held no other listed company directorships during the past three financial
years.
GARRY NORMAN - B COM CA
Non-Executive Director
Mr. Norman was appointed to the Board as a Non-Executive Director in October
1993.
He has been in public practice as an accountant since 1990, having been previously
employed by Duesburys Chartered Accountants (now Deloitte) for fourteen years
before leaving to establish his own Chartered Accounting firm - G R Norman & Co.
He has an extensive background in accounting and taxation matters, having
been involved with a wide range of clients in both city and suburban practices –
previously in his role as a manager of the Business Services Division of Duesburys
and currently in his role as principal of a suburban practice.
Mr. Norman is the Chairman of the Audit Committee and a member of the
Remuneration Committee.
He held no other listed company directorships during the past three financial
years.
14 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
BEN HUNT - PHD (ANU)
Non-Executive Director
Dr. Hunt was appointed to the Board as a Non-Executive Director in June 1998.
He has held academic appointments as the Head of the Graduate School of
Business, Associate Dean of the Faculty of Business and Associate Professor of
Finance at the University of Technology, Sydney (UTS).
He has a doctorate from the Australian National University. Although Dr Hunt has
written extensively on Australian financial markets (he is the co-author of the text
Australian Institutions and Markets, 7th Ed.), his knowledge extends to the South
East Asian region. He is a regular presenter of financial seminars in Hong Kong
and Singapore for the UK publishing and training company Euromoney.
Dr Hunt is the Chairman of the Remuneration Committee and a member of the
Audit Committee.
He held no other listed company directorships during the past three financial
years.
RICHARD CHENG FAH LING - B COM CA
Non-Executive Director
Mr. Ling was appointed to the Board as a Non-Executive Director in May 2009.
He holds a Bachelor of Commerce degree from the University of Newcastle,
Australia. He is a member of the Institute of Chartered Accountants in Australia
and the Malaysian Institute of Accountants. He has worked in companies based
in Australia as Financial Controller, Company Secretary and Senior Manager from
1980 to 1989. In 1992, Mr. Ling was appointed Group General Manager of Tiong
Nam Logistics Holdings Berhad, a public company listed on the Main Board of
Bursa Malaysia (Malaysian Stock Exchange). The company has operations in
Malaysia, Singapore and Thailand. In 2001, Mr. Ling joined the Board of Tiong Nam
Logistics Holdings Berhad as Executive Director. Since 2009 he has been a Non-
Executive Director. Mr. Ling is a member of the Remuneration and Nomination
Committee and the Chairman of the Audit Committee of Tiong Nam Logistics
Holdings Berhad. Mr. Ling has a good understanding of corporate finance, with
experience in raising funds for companies in Australia and Malaysia, via the capital
markets in Asia.
Mr. Ling is a member of the Audit Committee and the Remuneration Committee
of Waterco Limited.
He held no other listed company directorships during the past three financial
years.
ANNUAL REPORT 2015 > 15
Statement of
Corporate Governance
Practices
This statement explains how Waterco Limited ACN 002 070 733 (Waterco or Company) has complied with the
ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations – 3rd Edition,
published 27 March 2014 (ASX Recommendations), during the financial year ended 30 June 2015 (Reporting
Period).
All Waterco charter, codes and policy documents referred to in this statement are available in the Corporate
Governance section of the Company’s website, www.waterco.com.
This statement has been adopted by the Board as current as of 26 August 2015.
Principle 1: Lay solid foundations for management and oversight
RECOMMENDATION
WATERCO’S COMPLIANCE WITH ASX RECOMMENDATIONS
1.1 Role of Board and
management
The Board has established the functions and responsibilities reserved for the
Board. The Board Charter was updated during the Reporting Period to update
the matters delegated to management and those matters reserved for the
Board. Before the Board resolved to update the Board Charter at its meeting on
23 June 2015, the matters reserved to the Board were not explicitly stated in
the Board Charter.
1.2
Information
regarding election
and re-election of
director candidates
The Company has in place a policy for nomination and appointment of directors
and this policy was updated during the Reporting Period. Before appointing
a director, the Company will undertake appropriate checks on a candidate for
directorship and will provide all material information in its possession to its
shareholders to make a decision on whether or not to elect or re-elect a director.
When considering the re-election of an incumbent director or election of a new
director, the Board takes into account the following:
• business experience, particularly in respect of the industries in which the
company operates;
• standing in the community;
• educational qualifications;
• checks against the person’s character, criminal record and bankruptcy
history;
• availability and other directorships;
• the possession of particular skills such as finance, marketing or risk
management; and
• whether the appointment or re-appointment will contribute positively to the
skill set and diversity of the Board as a whole.
16 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
1.3 Written appointment
1.4
Company Secretary
Diversity
In addition to being set out in the Board Charter, it is intended that letters of
appointment will be executed with all directors to describe the key duties
and responsibilities of each member of Board, and that the letters will further
include the terms of appointment, remuneration, time commitment envisaged,
expectations regarding committee work, the requirement to disclose directors’
interests and confidentiality obligations. While the Board currently predominantly
relies on the Board Charter and formal letters have not been yet put in place for
all directors, each director is aware of their role and responsibilities and formal
letters have been issued to two Non-Executive directors on 26 August 2015.
Key management personnel will generally have written employment
agreements setting out a description of key duties and responsibilities, reporting
lines, remuneration and termination rights. These have been updated to reflect
current responsibilities in the period between the reporting period and the date
of this statement.
The Company Secretary is appointed by and accountable to the Board and has
particular responsibility for:
• advising the board and its committees on governance matters;
• monitoring whether board and committee policy and procedure are being
followed;
• coordinating timely completion of board and committee papers;
• ensuring that business conducted at board and committee meetings are
accurately recorded in the minutes; and
• helping to organise the induction and professional development of directors.
The Board Charter was updated by resolution of the Board on 23 June 2015 to
explicitly reflect this delegation by the Board to the company secretary.
The Board recognises diversity and equity as strengths and as a result of
identifying non compliance with ASX Recommendation 1.5(a), resolved to
adopt an updated Diversity & Equity Policy for the Company which includes an
express requirement for the Board to set measurable objectives for achieving
gender diversity (whereas the previous policy simply required a review of
objectives by the Remuneration Committee of the Board on the assumption
that they would be set in the first place).
The updated Diversity & Equity Policy is available in the Corporate Governance
section of the Company’s website, www.waterco.com. In accordance with the
Diversity & Equity Policy, the Board set objectives for achieving gender diversity
across its organisation. The objectives for the Reporting Period were:
Women on the Board
Women in senior executive positions
Women employees in the company
2015
%
0%
15%
25%
2016
%
0%
15%
25%
The Board assessed the progress towards these objectives during the
Reporting Period by reviewing the relative proportion or women and men in the
Company’s workforce at all levels. At the end of the Reporting Period women
represented 29% of the overall workforce. Women made up 20% of senior
executives (defined by the company as the Key Management Personnel). At the
Board level, there were no female directors. However gender diversity will be
considered at any time of Board renewal or additions.
ANNUAL REPORT 2015 > 17
1.6
Board reviews
The Board is committed to an ongoing internal process of performance evaluation
of the Board, its committees and individual directors to ensure the diligent and
effective discharge of responsibilities and a consistent mindset in improving
corporate governance practices. The Board has undertaken an evaluation on
the performance of the Board, its committees and individual directors for the
Reporting Period.
1.7 Management
reviews
The Company is committed to an ongoing internal process of performance
evaluation of key management personnel to ensure the diligent and effective
discharge of their responsibilities The CEO has undertaken a performance
evaluation review of key management personnel for the Reporting Period.
Principle 2: Structure the Board to add value
RECOMMENDATION
WATERCO’S COMPLIANCE WITH ASX RECOMMENDATIONS
2.1
Nominations
committee
2.2 Board skills matrix
The Company has not established a nomination committee. The ASX
Recommendations acknowledge that such committees may not be required for
smaller boards. The Board is of the opinion that it is appropriate for a company
the size of Waterco for matters that come under the purview of a nomination
committee to be undertaken by the Board through the Remuneration Committee.
Furthermore, the Board has established processes in place to raise and address
issues that would otherwise be considered by a nomination committee.
The Board comprises an executive Chairman who is also the Chief Executive
Officer (CEO), an executive director and three Non-Executive directors. The
Board views each of the three Non-Executive directors as being independent.
The Board’s membership is reviewed periodically to ensure that it maintains an
appropriate mix of skills, qualifications and experience. In particular the Board
has identified skills and experience in corporate finance, international trade and
international business environment, marketing and accounting and technical and
industry knowledge in the water treatment and pool industries to be important.
Although currently all male, the Board composition represents diversity in age,
ethnicity and background.
At each Annual General Meeting (AGM), one third of the directors (excluding
the CEO) and any director appointed to fill a casual vacancy since the previous
AGM must retire but may stand for re-election.
The Company achieved its preferred Board composition of at least five directors
during the Reporting Period, with a majority of Non-Executive (and, where
possible, independent) directors.
Below is the matrix of skills and attributes that Waterco is aiming to achieve
across its Board membership. This matrix was adopted by the Board on 23 June
2015. The Board had therefore not finalised or adopted the matrix during the
reporting period prior to 23 June 2015. The Board is conscious of the need to
improve in some areas, such as legal and engineering experience and female
representation, and is considering addressing these shortcomings by attracting
new candidates.
General
Executive and non-executive experience Governance committee experience
Leadership
Strategic thinking
Industry experience
Risk management
Ethical and fiduciary duties
Environment and sustainability
Governance
18 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
2.3 Disclose
independence and
length of service
Technical
Legal
Financial
Engineering
Human resources
Diversity
Female
Male
Different ethnicities and cultures
Languages other than English
The names of the independent directors in office during the Reporting Period
are:
• Garry Norman;
• Ben Hunt; and
• Richard Ling.
The Company’s assessment of the materiality of a director’s interest is
considered on a case by case basis by the Board. Where an entity associated
with a Director provides services to the Company, the Board uses a threshold
of $100,000 in fees in a financial year as a guideline. However the Board does
not follow an inflexible set of criteria but considers whether the relationship
in question is reasonably likely to interfere with that Director’s independent
judgement. Further details of the directors’ skills, experience, expertise and
lengths of service are set out in the Board of Directors' section of the Company’s
Annual Report.
2.4 Majority of directors
independent
A majority of the Board - Garry Norman, Ben Hunt and Richard Ling are
independent directors, taking into account the factors relevant to "independence"
under the ASX guidelines.
2.5
Independent chair
2.6
Induction and
professional
development
The roles of Chairperson and CEO are both held by Mr Soon Sinn Goh. The Board
believes that Mr Goh brings a vital level of industry experience to the operations
of the Company. Also, as the major shareholder of the Company, Mr Goh’s
commitment to the success of the Company is unquestionable. Therefore, it
is the Board’s opinion that it is appropriate in the Company’s circumstances
that the two roles be combined. With the majority of the Board’s Directors
being independent, and with Independent Directors chairing the Audit and
the Remuneration Committees, the Board is also of the opinion that it is not
necessary that the office of Chairperson be held by an Independent Director.
All new directors undergo an induction to familiarise them with the business of
the Company, the Company’s internal control and risk management practices
and policies and procedures. The Company also seeks to provide appropriate
professional development opportunities for directors to develop and maintain
the skills and knowledge needed to perform their role as directors effectively.
Principle 3: Act ethically and responsibly
RECOMMENDATION
WATERCO’S COMPLIANCE WITH ASX RECOMMENDATIONS
3.1 Code of conduct
The board has established a Code of Conduct for directors, key management
personnel and employees.
ANNUAL REPORT 2015 > 19
Principle 4: Safeguard integrity in corporate reporting
RECOMMENDATION
WATERCO’S COMPLIANCE WITH ASX RECOMMENDATIONS
4.1 Audit committee
The Audit Committee operates under the Audit Committee Charter.
The role of the Audit Committee is to assist the Board with its oversight of the
integrity of the financial statements, including overseeing the existence and
maintenance of internal controls, accounting systems, and the financial reporting
process. The Committee also nominates external auditors, reviews existing
audit arrangements and co-ordinates external and internal auditing functions.
In addition, the Audit Committee examines any other matters referred to it by
the Board.
Throughout the Reporting Period the Audit Committee consisted of 3
Independent Non-Executive directors and was headed by an Independent
Chairperson not holding the position of Chairperson of the Board.
The members of the Audit Committee during the Reporting Period were:
• Garry Norman - Chairman;
• Ben Hunt; and
• Richard Ling.
The number of Audit Committee meetings and details of Committee members’
attendance are included in the Directors’ Report section of the Company’s
Annual Report.
The Board has received a written statement from its CEO and Chief Financial
Officer (CFO) which includes a declaration under section 295A of the
Corporations Act 2001 (Cth) advising that:
• in their opinion the Company’s financial reports have been properly maintained
and have complied with the appropriate accounting standards and give a true
and fair view of the Company’s financial position and performance; and
• their opinion were founded on a system of risk management and internal
compliance and control which implements the policies adopted by the
Board, and that this system is operating efficiently and effectively in all
material respects.
4.2 CEO and CFO
certification of
financial statements
4.3
External auditor at
AGM
The external auditor attends the AGM for the purpose of answering shareholder
questions regarding the conduct of the audit and the preparation and content
of the audit report.
Principle 5: Make timely and balanced disclosure
RECOMMENDATION
WATERCO’S COMPLIANCE WITH ASX RECOMMENDATIONS
5.1 Disclosure and
Communications
Policy
The Company’s Continuous Disclosure Policy sets out the rules and
responsibilities for Waterco’s officers and employees to ensure compliance
with the ASX Listing Rules and promote factual and timely disclosure of all
material matters concerning the Company.
20 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Principle 6: Respect the rights of security holders
RECOMMENDATION
WATERCO’S COMPLIANCE WITH ASX RECOMMENDATIONS
6.1
Information on
website
Waterco keeps investors informed by publishing information in the Company’s
website.
All disclosures made to the ASX and all information provided to analysts or the
media during briefings are promptly posted on the Company’s website after
they have been released to the ASX.
6.2
Investor relations
programs
The Company’s Shareholder Communication Policy details the mechanisms put
in place to ensure that the rights of shareholders are respected and to facilitate
the effective exercise of those rights.
The Shareholder Communication Policy contains information on persons whom
shareholders can contact in relation to procedures at shareholders meetings,
matters being considered at shareholders meetings and other issues. It also
indicates that the predominant sources for investors to engage with the
Company are at general meetings of the Company.
6.3
Facilitate
participation at
meetings of security
holders
Shareholders who are unable to attend any of the Company’s meetings are
encouraged to vote on the proposed motions by appointing a proxy. Proxy
forms are included with meeting notices that also provides details on how proxy
forms should be completed and submitted.
6.4
Facilitate electronic
communications
The Company recognises the benefits of the use of electronic communications
and is working towards allowing shareholders the option of selecting to receive
the following information electronically from the share registry: dividend
statements; annual reports; notices of meetings and proxy forms and the ability
to vote online; and other general company communications.
With this in place, shareholders can log into their account to make changes to
their communication preference. The share registry can also be contacted via
email or telephone. Contact details can be found on the Company’s website.
Principle 7: Recognise and manage risk
RECOMMENDATION
WATERCO’S COMPLIANCE WITH ASX RECOMMENDATIONS
7.1 Risk committee
7.2
Annual risk review
The Audit Committee reports to the Board on the effectiveness of the risk
management and internal control processes of the Company regularly by way
of Minutes of Meetings to the directors and through other means of formal and
informal reporting.
Further details regarding the Audit Committee, its membership and the number
of meetings held during the Reporting Period are set out in response to
Recommendation 4.1.
The Board reviews the risk management framework of the Company periodically
as and when necessary to meet the operational requirements of the Company
and changes in the law through the Audit Committee. The Board has performed
the review for the Reporting Period.
ANNUAL REPORT 2015 > 21
Principle 7: Recognise and manage risk
RECOMMENDATION
WATERCO’S COMPLIANCE WITH ASX RECOMMENDATIONS
7.3
Internal audit
The Company reviews and continually improves the effectiveness of its risk
management and internal control processes.
Further details regarding audit functions are set out
Recommendation 4.1.
in response to
7.4
Sustainability risks
The Board considers that the Company is not materially exposed to economic,
environmental and social sustainability risks.
Principle 8: Remunerate fairly and responsibly
RECOMMENDATION
WATERCO’S COMPLIANCE WITH ASX RECOMMENDATIONS
8.1
Remuneration
committee
The Remuneration Committee is responsible for making recommendations to
the Board on remuneration packages and policies for the executive directors
and the key management personnel. The Remuneration Committee Charter is
published on the Company’s website.
During the Reporting Period, the Remuneration Committee consisted of three
independent Non-Executive directors and was headed by an independent
Chairperson not holding the position of Chairperson of the Board.
The members of the Remuneration Committee during the year were:
• Ben Hunt – Chairman;
• Garry Norman; and
• Richard Ling.
The number of Remuneration Committee meetings and details of Committee
members’ attendance during the Reporting Period are set out in the Directors’
Report section of the Company's Annual Report.
8.2 Disclosure of
Executive and Non-
Executive Director
remuneration policy
Remuneration of the Company’s non-executive directors operates on different
principles to the remuneration of executive directors. Non-executive directors
receive fixed fees, and are not entitled to any retirement benefits other than
statutory superannuation.
The Remuneration Report at the Directors’ Report section of the Annual Report
sets out:
• information about the Remuneration Policy developed by the Remuneration
Committee and adopted by the Board; and
• details of remuneration of the directors (executive and non-executive) and key
management personnel.
The Company did not offer an equity-based remuneration scheme during the
Reporting Period.
8.3
Policy on hedging
equity incentive
schemes
22 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Directors'
Report
Your directors present their report on the Company and its controlled entities for the financial year ended 30 June
2015.
Directors
The names of directors in office during and since the end of the financial year are:
• Soon Sinn Goh
• Bryan Goh
• Garry Norman
• Ben Hunt
• Richard Ling
All directors have been in office since the start of the financial year.
For details of the directors’ qualifications and experience, refer to the section titled “Board of Directors” which
is to be read as part of this report.
Company Secretaries
The following persons held the position of joint company secretary throughout the financial year:
• Bee Hong Leo
Mrs Leo was appointed Company Secretary on 3 March 1983. She has been employed by Waterco since
March 1981 performing management roles in the administration and legal divisions.
• Gerard Doumit FCPA
Mr Doumit was appointed Joint Company Secretary on 22 July 1991. He has been employed by Waterco since
January 1987 as an Accountant and is currently Chief Accountant and Joint Company Secretary.
Principal Activities
The principal activities of the consolidated Group during the financial year were:
• wholesale, export and manufacture of equipment and accessories in the swimming pool, spa pool, spa bath,
rural pump and water treatment industries;
• manufacture and sale of solar heating systems for swimming pools and pre-heat industrial solar systems;
• franchise of retail outlets for swimming pool equipment and accessories; and
• formulating, packing and distribution of swimming pool chemicals to independent pool stores and stores in its
Swimart franchise network.
There were no significant changes in the nature of the consolidated Group’s principal activities during the financial
year.
ANNUAL REPORT 2015 > 23
Consolidated Results
The consolidated profit of the Group after providing for income tax and eliminating non controlling interests
amounted to $1.485 million.
Dividends
Dividends paid or declared for payment are as follows:
• Final ordinary dividend of 3 cents per share paid on 15 December 2014 as recommended in last year’s report
- $1.069 million
• Final ordinary dividend of 5 cents per share declared by the directors to be paid on 14 December 2015 -
$1.813 million. All dividends paid or declared since the end of the previous financial year were fully franked.
Review of Operations
A review of operations of the consolidated Group during the financial year and of the results of those operations
together with likely developments in the operations of the consolidated Group and the expected results of those
operations are set out in the Chief Executive Officer’s Review of Operations.
Financial Position
The net assets of the consolidated Group have increased by $5.45 million from $50.60 million in June 2014 to
$56.05 million in June 2015.
The change has largely resulted from:
• Increase in the share capital from the Waterco Dividend Reinvestment Plan of $0.71 million;
• Upward movement in foreign currency translation of $5.28 million;
• Upward movement in profits less dividends paid of $0.42 million;
• Net decrease in the asset revaluation reserve of group companies of $1.00 million; and
• Net increase in non-controlling Interests of $0.07 million.
The Group’s working capital being current assets less current liabilities decreased from $30.64 million in 2014 to
$25.83 million in 2015.
The directors believe that the Group is in a strong and stable financial position.
Significant Changes in State of Affairs
The directors are not aware of any significant changes in the state of affairs of the consolidated Group that
occurred during the financial year which have not been covered elsewhere in this report.
After Balance Date Events
Since the end of the reporting period, the Board resolved to pay a final dividend of 5 cents per share fully franked.
No other matters or circumstances have arisen since the end of the financial year which significantly affected or
may significantly affect the operations of the consolidated Group, the results of those operations, or the state of
affairs of the consolidated Group in future financial years.
Future Developments, Prospects and Business Strategies
Information as to future developments, prospects and business strategies in the operations of the consolidated
Group are included in the Chief Executive Officer’s Review of Operations. Other possible developments have
not been included in this report as such inclusions would, in the opinion of the directors, prejudice the interests
of the consolidated Group.
24 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Environmental Issues
The consolidated Group’s operations are subject to some environmental regulations, particularly with regard
to the storage of chemicals and waste management. The consolidated Group has adequate systems in place
for the management of its environmental requirements. The directors are not aware of any breaches of the
environmental regulations during the financial year.
Directors’ Shareholdings
Details of the directors’ shareholdings are contained in Note 7 to the Financial Statements.
Meetings of Directors
During the financial year, 12 meetings of directors (including Audit and Remuneration Committees) were held.
Attendances are set out below:
Director
Directors’ Meeting
Audit Committee Meeting
Remuneration
Committee Meeting
Number
Eligible
To Attend
Number
Attended
Number
Eligible
To Attend
Number
Attended
Number
Eligible
To Attend
Number
Attended
Soon Sinn Goh
Bryan Goh
Garry Norman
Ben Hunt
Richard Ling
6
6
6
6
6
6
6
6
6
6
-
-
4
4
4
-
-
4
4
4
-
-
2
2
2
-
-
2
2
2
Indemnifying Officers or Auditor
During and since the financial year, the Company has paid premiums to insure all directors and officers against
liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct
while acting in the capacity as director or officer of the Company, other than conduct involving a wilful breach of
duty in relation to the Company. In accordance with common commercial practice, the insurance policy prohibits
disclosure of the nature of the liability insured against and the amount of the premium.
The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer
or auditor of the Company or any related body corporate against a liability incurred by such an officer or auditor.
Directors’ Benefits
No director has received or become entitled to receive, during or since the financial year, a benefit arising from
a contract made by the parent entity, or a related body corporate with a director, a firm of which a director is a
member or a director or an entity in which a director has a substantial financial interest other than:
i. Sales made by a controlled entity to Asiapools (M) Sdn Bhd of which Mr Soon Sinn Goh is a director and
shareholder.
ii. Payments made for rental of warehouses and offices to Mint Holdings Pty Ltd of which Mr Soon Sinn Goh is
a director and shareholder.
This statement excludes a benefit included in the aggregate amount of emoluments received or due and
receivable by directors and shown in the Company’s accounts or the fixed salary of a full time employee of the
parent entity, controlled entity or related body corporate.
ANNUAL REPORT 2015 > 25
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
Non-Audit Services
The Board of Directors, in accordance with advice from the Audit Committee, is satisfied that the provision of
non-audit services during the year is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise
the external auditor’s independence for the following reasons:
• all non-audit services are reviewed and approved by the Audit Committee prior to commencement to ensure
they do not adversely affect the integrity and objectivity of the auditor; and
• the nature of the services provided do not compromise the general principles relating to auditor independence
in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional
and Ethical Standards Board.
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2015 has been received and is included
in the directors’ report.
ASIC Class Order 98/100 Rounding of Amounts
The Company is an entity to which ASIC Class Order 98/100 applies and, accordingly, amounts in the financial
statement and directors’ report have been rounded to the nearest thousand dollars.
Your directors present their report on the Company and its controlled entities for the financial year ended 30 June
2015.
Remuneration Report
Introduction
This report provides remuneration policy and payment details applying in the financial year for persons who were
members of Key Management Personnel of the Company.
2015 Remuneration Policy
The Remuneration Committee governs the Company’s Remuneration Policy. The Committee comprises
Independent Non-Executive Directors.
It has the following objectives:
• attract, retain and motivate management of the appropriate calibre to further the success of the business;
• align management reward with shareholder value;
• ensure that total remuneration is reasonable and comparable with market standards;
• ensure that remuneration should realistically reflect the responsibilities of the executives;
• ensure that incentive schemes reward superior company performance and be clearly linked to appropriate
performance benchmarks based on improved company performance; and
• ensure that the remuneration costs are disclosed in accordance with the requirements of law and relevant
accounting standards.
26 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
The remuneration structure for Key Management Personnel of the Waterco Group comprises:
• Fixed remuneration. This consists of base salary and the full costs of other benefits; and
• Incentives. The level varies with performance. It consists of an annual incentive plan.
The Remuneration Committee reviews market data and the performance of the CEO. The Committee then
recommends the fixed remuneration and annual incentive payment of the CEO for approval by the Board.
The CEO recommends Key Management Personnel’s fixed remuneration to the Remuneration Committee. Fixed
remuneration for Key Management Personnel is reviewed annually and determined by reference to appropriate
benchmark information of comparable companies, taking into account their responsibility, performance,
qualifications, experience and potential. Adjustments are made only if there is the prospect of fixed remuneration
levels falling behind market levels.
The remuneration of Non-Executive Directors is fixed and does not change according to the performance of the
company. They do not participate in any incentive plans available to managers. Non-Executive Directors are paid
fees based on the nature of their work and their responsibilities. The Company makes superannuation guarantee
(SG) payments, in addition to those fees. The level and structure of fees is based upon the need for the Company
to be able to attract and retain Non-Executive Directors of an appropriate calibre, the demands of the role and
prevailing market conditions.
The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by
shareholders at the Annual General Meeting.
There has been an increase of 3% in the Non-Executive Director fees for the 2015/2016 financial year. The total
fees are now at an aggregate of $164,338 plus superannuation guarantee.
The Remuneration Committee seeks independent external advice when required.
Performance–based Remuneration policy, and its relationship with Company performance
There is an annual incentive plan in place for all Key Management Personnel. This is a payment that varies with
performance measured over a twelve-month period.
There have been no changes in performance based remuneration policy compared with the prior reporting period.
Maximum payments are capped.
In the case of the CEO, the Remuneration Committee sets the performance requirements; in the case of
other Key Management Personnel, the CEO recommends performance requirements for consideration by the
Remuneration Committee.
The annual incentive performance criteria relate to the employee’s responsibilities. If requirements are achieved,
there will be an improvement in shareholder value.
The key performance requirements for an incentive payment are Net Profit After Tax (NPAT).
This provides a clear alignment between the interests of shareholders and the level of reward for eligible
employees.
ANNUAL REPORT 2015 > 27
Performance criteria are tabulated below:
Key Management Personnel
with annual incentives
Summary of Performance
Condition FY 15
Why Chosen
Soon Sinn Goh
– CEO
Budgeted NPAT for the
Waterco Group.
Key Management Personnel
Budgeted NPAT for the
Waterco Group.
Encourage CEO to improve the
performance levels of the Group
as a whole and thereby increase
shareholder wealth.
The performance of other key
management personnel can have a
Group impact, so targets are based
on Group performance.
The satisfaction of the performance conditions of the annual incentive is based on a review of the audited
financial statements of the Group.
If the Group’s performance, as a whole does not reach the relevant target levels, then no annual incentive
payments are made.
None of the Company’s Key Management Personnel achieved their performance targets in the year-ended 30
June 2015. Therefore, they will not receive an annual incentive payment for the financial year just ended.
The following table shows the Sales Revenue, Net Profit Before Tax (NPBT), Net Profit After Tax (NPAT),
Earnings Per Share (EPS), dividends and year-end share price in the financial year just ended and the previous
four financial years for the consolidated Group.
Year ended
June 15
June 14
June 13
June 12
June 11
Sales Revenue ($million)
NPBT ($million)
EPS (cents)
Dividends per share paid (cents)
Year end share price ($)
NPAT ($million)
80.89
3.05
4.1
3.0
1.00
1.55
77.12
1.93
2.6
7.0
1.15
0.97
68.21
3.19
4.9
7.0
1.00
1.72
66.14
2.9
6.1
8.0
0.88
2.09
67.74
4.48
9.8
9.0
1.06
3.18
28 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Employment Details of Key Management Personnel
The following table provides employment details for the financial year for Key Management Personnel. The table
also illustrates the proportion of remuneration that was performance and non-performance based.
Proportions of elements of
remuneration related to
performance
Proportions of
elements of
remuneration not
related to
performance
Position held as at
30 June 2015 and
any change during
the year
Contract details
(duration & termination)
Non-
salary
cash-based
incentives
%
Shares/
Units
%
Options/
Rights
%
Fixed
Salary/
Fees
%
Total
%
Key
Management
Personnel
S S Goh
Chairman & CEO
No fixed term; may be
terminated on 6 months’
notice by either party
B Goh
Group Marketing
Director -
Executive
No fixed term; may be
terminated on 1 months'
notice by either party
G Norman
Director -
Non-Executive
B Hunt
Director -
Non-Executive
R Ling
Director -
Non-Executive
Chief Financial
Officer
Joint Company
Secretary
S T Lim
B H Leo
G Doumit
No formal contract,
but subject to member
confirmation every
3 years after AGM when
first appointed
No formal contract,
but subject to member
confirmation every 3
years after AGM when
first appointed
No fixed term, but
subject to member
confirmation every 3
years after AGM when
first appointed
No fixed term, may be
terminated on 1 months’
notice by either party
No fixed term, may be
terminated on 1 months’
notice by either party
Chief Accountant/
Joint Company
Secretary
No written contract
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Changes in Directors and Key Management Personnel Subsequent to Year-end
There have been no changes in Directors and Key Management Personnel subsequent to year-end.
ANNUAL REPORT 2015 > 29
The following table provides remuneration details for the 2015 and 2014 financial years for Key Management
Personnel.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Equity-settled
share-based
payments
Salary,
fees
and
leave
$
Profit
share
and
bonus
$
Non-
monetary
(3)
$
Pension
and super-
annuation
$
Incentive
plans (2)
$
Share /
Units
$
Option /
Rights
$
Total
$
LSL
$
Key
Management Personnel
Soon Sinn Goh(1)
Bryan Goh
Garry Norman
Ben Hunt
Richard Ling
Sze Tin Lim
Ben Hong Leo
Gerard Doumit
2015 369,984
2014 359,465
2015 204,781
2014 186,800
2015
53,184
2014
51,635
2015
53,184
2014
51,635
2015
53,184
2014
51,635
2015 206,769
2014 192,260
2015 183,969
2014 163,963
2015 174,848
2014 153,583
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,018
10,440
18,783
18,470
5,052
4,776
5,052
4,776
5,052
4,776
-
-
-
-
-
-
-
-
-
-
-
-
1,587
13,557
-
-
-
-
-
-
18,783
718
9,076
18,470
1,649
16,022
17,793
616
5,514
16,095
1,413
10,038
20,473
16,256
616
20,578
14,206
1,413
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
381,002
369,905
225,151
218,827
58,236
56,411
58,236
56,411
58,236
56,411
235,346
228,401
207,892
191,509
212,193
189,780
(1) S S Goh’s Base Salary of $369,984 is made up of $115,983 paid by Waterco Ltd, $86,895 paid by
Waterco (Far East) Sdn Bhd (a subsidiary) and $167,106 paid by Waterco International Pte Ltd
(a subsidiary).
(2) These represent the benefits from the Legacy Non-recourse Loan Employee Share Plan.
(3) Non monetary benefits are made up of Company vehicle benefits.
30 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Securities Received that are not Performance Related
No Key Management Personnel are entitled to receive securities which are not performance based as part of
their remuneration package.
Cash incentives, Performance-related Bonus and Share-based Payments
No options or other share based payments were granted in the 2015 financial year.
Maximum cash incentives expressed as a percentage of fixed remuneration and the maximum value that could
have been earned in 2014/2015 if stretch performance targets were achieved are tabulated below:
Position
Maximum possible incentive
as a percentage of fixed pay
Maximum possible
incentive $
Key Management Personnel
CEO, Waterco Limited
Group Marketing Director, Waterco Limited
CFO, Waterco Limited
Company Secretary, Waterco Limited
Chief Accountant/Joint Company Secretary,
Waterco Limited
26%
18%
17%
12%
12%
$100,000
$40,000
$40,000
$25,000
$25,000
The percentage of cash incentives paid and forfeited during the year to key management personnel.
Key Management Personnel
Short term incentive in respect of 2015 financial year
Paid %
Forfeited %
S S Goh
B Goh
S T Lim
B H Leo
G Doumit
0
0
0
0
0
100
100
100
100
100
This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution
of the Board of Directors:
Soon Sinn Goh
Chairman
Dated at Sydney this 21 September 2015
ANNUAL REPORT 2015 > 31
Auditor’s Independence Declaration
32 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Consolidated
Financial Report
for the year ended 30 June 2015
Consolidated Statement
of Profit or Loss and Other
Comprehensive Income
Consolidated Statement of
Financial Position
Statement of Changes
in Equity
Statement of Cash Flows
Notes to the Financial
Statements
Directors’ Declaration
> 34
> 35
> 36
> 37
> 38
> 78
Independent Auditor's Report
> 79
Shareholder Information
Corporate Directory
> 81
> 82
ANNUAL REPORT 2015 > 33
Consolidated Statement of Profit or Loss and other Comprehensive Income
For The Year Ended 30 June 2015
Consolidated Group
2015
$000
88,171
(874)
(44,833)
(15,730)
(1,155)
(1,541)
(1,579)
(97)
(1,806)
(2,545)
(278)
(361)
(397)
(3,753)
(1,224)
(8,951)
3,047
(1,495)
1,552
(1,002)
5,261
4,259
5,811
1,485
67
1,552
5,744
67
5,811
4.1
4.1
Note
No.
3
4
4
4
4
6
Revenues
Changes in inventories of finished goods and
work in progress
Raw materials and consumables used
Employee benefits expense
Depreciation and amortisation expense
Finance costs
Advertising expense
Discounts allowed
Outward freight expense
Rent expense
Contracted staff expense
Warranty expense
Commission expense
Impairment loss of building and plant and equipment
Increased cost of working – Rydalmere fire
Other expenses
Profit before income tax expense
Income tax expense
Profit for the year
Other comprehensive income
Items that will not be classified subsequently to
profit or loss
Property revaluation (decrement)/ increment (net of tax)
Items that maybe reclassified to profit or loss
Exchange translation differences
Other comprehensive income for the year
Total comprehensive income for the year
Profit attributable to :
Members of the parent entity
Non-controlling interest
Total comprehensive income for the year attributable to:
Members of the parent entity
Non-controlling interest
Total comprehensive income for the year
Earnings per share
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
29
29
The accompanying notes form part of these financial statements.
34 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
2014
$000
77,971
(1,309)
(40,771)
(15,153)
(1,310)
(1,529)
(1,797)
(9)
(1,801)
(2,480)
(375)
(457)
(416)
-
-
(8,636)
1,928
(954)
974
5,251
(283)
4,968
5,942
907
67
974
5,875
67
5,942
2.6
2.6
Consolidated Statement of Financial Position
As At 30 June 2015
Consolidated Group
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax assets
Other current assets
Total Current Assets
Non-Current Assets
Property, plant & equipment
Intangible assets
Deferred tax assets
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Borrowings
Current tax liabilities
Short term provisions
Total Current Liabilities
Non-Current Liabilities
Borrowings
Deferred tax liabilities
Long-term provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
EQUITY
Issued capital
Reserves
Retained earnings
Parent interest
Non-controlling interest
Total Equity
Note
No.
8
9
10
17
11
13
14
17
15
16
17
18
19
17
20
21
22
23
2015
$000
3,771
16,735
33,970
-
843
55,319
41,325
322
311
41,958
97,277
12,139
15,418
279
1,658
29,494
10,211
1,341
178
11,730
41,224
56,053
38,142
7,505
9,949
55,596
457
56,053
2014
$000
1,588
11,816
33,827
65
724
48,020
43,987
355
614
44,956
92,976
11,512
4,380
-
1,492
17,384
23,280
1,524
189
24,993
42,377
50,599
37,430
3,246
9,533
50,209
390
50,599
The accompanying notes form part of these financial statements.
ANNUAL REPORT 2015 > 35
Statement of Changes in Equity
For the year ended 30 June 2015
Ordinary
Shares
Retained
Earnings
Capital
Profits
Reserve
Asset
Revaluation
Reserve
Foreign
Currency
Translation
Reserve
Share
Options
Reserve
Non-
Controling
Interests
Total
Consolidated Group
Note
No.
$000
$000
$000
$000
$000
$000
$000
$000
Balance at 30/6/13
Comprehensive income
Profit for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
Transactions with
owners, in their
capacity as owners
and other transfers
Issue of shares under
Waterco DRP
Employee share loans
Dividends paid
Total transactions with
owners and other
transfers
Balance at 30/6/14
Comprehensive income
Profit for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
Transactions with
owners, in their
capacity as owners
and other transfers
Issue of shares under
Waterco DRP
Employee share loans
Dividends paid
Total transactions with
owners and other
transfers
36,380
11,067
211
6,834
(8,787)
20
323
46,048
-
-
-
907
-
907
1,042
8
-
-
-
(2,441)
28
1,050
(2,441)
-
-
-
-
-
-
-
-
-
5,251
(283)
5,251
(283)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
67
974
-
4,968
67
5,942
-
-
-
-
1,042
8
(2,441)
(1,391)
37,430
9,533
211
12,085
(9,070)
20
390
50,599
-
-
-
1,485
-
1,485
659
53
-
-
-
(1,069)
28
712
(1,069)
-
-
-
-
-
-
-
-
-
(1,002)
5,261
(1,002)
5,261
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
67
1,552
-
4,259
67
5,811
-
-
-
-
659
53
(1,069)
(357)
Balance at 30/6/15
38,142
9,949
211
11,083
(3,809)
20
457
56,053
The accompanying notes form part of these financial statements.
36 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Statement Of Cash Flows
For The Year Ended 30 June 2015
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Interest received
Other Income
Finance costs
Income tax paid
Net cash provided by operating activities (note 33)
Cash Flows from Investing Activities
Payment for property, plant & equipment
Proceeds from sale of property, plant & equipment
Net cash (used in) investing activities
Cash Flows from Financing Activities
Proceeds from borrowings
Proceeds from issue of shares
Payment of hire purchase creditors
Payment of lease liabilities
Dividends paid
Employee share plan repayments
Net cash (used in) financing activities
Net increase/(decrease) in cash held
Cash at beginning of the year
Effects of exchange rate changes on balance of
cash held in foreign currencies
Cash and cash equivalents the end of the year (Note 8)
Consolidated Group
2015
$000
84,638
(78,812)
33
3,788
(1,541)
(602)
7,504
(3,007)
168
(2,839)
(1,210)
659
(49)
(176)
(1,069)
53
(1,792)
2,873
(68)
459
3,264
2014
$000
81,845
(79,204)
24
828
(1,529)
(1,238)
726
(1,603)
155
(1,448)
(382)
1,042
-
(238)
(2,441)
8
(2,011)
(2,733)
1,939
726
(68)
The accompanying notes form part of these financial statements.
ANNUAL REPORT 2015 > 37
Notes To The Financial Statements
For the year ended 30 June 2015
Note 1: Statement of Significant Accounting
Policies
These consolidated financial statements and notes
represent those of Waterco Limited and controlled
entities, (“Group”).
Waterco Limited
incorporated and domiciled in Australia.
is a
listed public company,
The separate financial statements of the parent entity,
Waterco Limited have not been presented within this
financial report as permitted by the Corporations Act
2001.
The financial statements were authorised for issue on
21 September 2015.
Basis of Preparation
The financial statements are general purpose financial
statements that have been prepared in accordance
with Australian Accounting Standards, Australian
Accounting
authoritative
Interpretations, other
pronouncements of
the Australian Accounting
Standards Board (AASB) and the Corporations Act
2001.
Australian Accounting Standards set out accounting
policies that the AASB has concluded would result in
financial statements containing relevant and reliable
information about transactions, events and conditions.
Compliance with Australian Accounting Standards
ensures that the financial statements and notes
also comply with International Financial Reporting
Standards as issued by the IASB. Material accounting
policies adopted in the preparation of these financial
statements are presented below and have been
consistently applied unless otherwise stated.
Except for cash flow information, the financial
statements have been prepared on an accruals
basis and are based on historical costs, modified,
where applicable, by the measurement at fair value
of selected non-current assets, financial assets and
financial liabilities.
a. Principles of Consolidation
The consolidated financial statements incorporate
all of the assets, liabilities and results of the parent
(Waterco Limited) and all of the subsidiaries
(including any structured entities). Subsidiaries are
entities the parent controls. The parent controls
an entity when it is exposed to, or has rights to,
variable returns from its involvement with the
entity and has the ability to affect those returns
through its power over the entity. A list of the
subsidiaries is provided in Note 12. All subsidiaries
have a June financial year end except for Waterco
Guangzhou Ltd, Waterco (C) Ltd, and PT Waterco
Indonesia all of which have a December financial
year end.
38 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
The assets, liabilities and results of all subsidiaries
are fully consolidated into the financial statements
of the Group from the date on which control is
obtained by the Group. The consolidation of a
subsidiary is discontinued from the date that control
ceases.
transactions, balances
and unrealised gains or losses on transactions
between group entities are fully eliminated on
consolidation. Accounting policies of subsidiaries
have been changed and adjustments made where
necessary to ensure uniformity of the accounting
policies adopted by the Group.
Intercompany
interests
Equity interests in a subsidiary not attributable,
directly or indirectly, to the Group are presented
as “non-controlling interests”. The Group initially
recognises non-controlling
that are
present ownership interests in subsidiaries and are
entitled to a proportionate share of the subsidiary’s
net assets on liquidation at either fair value or at
the non-controlling interests’ proportionate share
of the subsidiary’s net assets. Subsequent to initial
recognition, non-controlling interests are attributed
their share of profit or loss and each component
of other comprehensive income. Non-controlling
interests are shown separately within the equity
section of the statement of financial position and
statement of comprehensive income.
Business combinations
Business combinations occur where an acquirer
obtains control over one or more businesses.
A business combination is accounted for by applying
the acquisition method, unless it is a combination
involving entities or businesses under common
control. The business combination will be accounted
for from the date that control is attained, whereby
the fair value of the identifiable assets acquired and
liabilities (including contingent liabilities) assumed is
recognised (subject to certain limited exemptions).
When measuring the consideration transferred in the
business combination, any asset or liability resulting
from a contingent consideration arrangement is also
included. Subsequent to initial recognition, contingent
consideration classified as equity is not remeasured
and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset
or liability is remeasured each reporting period to fair
value, recognising any change to fair value in profit or
loss, unless the change in value can be identified as
existing at acquisition date.
All transaction costs incurred in relation to the
business combination are expensed to the statement
of comprehensive income.
The acquisition of a business may result in the
recognition of goodwill or a gain from a bargain
purchase.
Notes To The Financial Statements
For the year ended 30 June 2015
Note 1: Statement of Significant Accounting
Policies (continued)
b. Fair Value of Assets and Liabilities
The Group measures some of its assets and
liabilities at fair value on either a recurring or non-
recurring basis, depending on the requirements of
the applicable Accounting Standard.
Fair value is the price the Group would receive
to sell an asset or would have to pay to transfer
a liability in an orderly (ie unforced) transaction
between independent, knowledgeable and willing
market participants at the measurement date.
As fair value is a market-based measure, the closest
equivalent observable market pricing information
is used to determine fair value. Adjustments to
market values may be made having regard to the
characteristics of the specific asset or liability.
The fair values of assets and liabilities that are not
traded in an active market are determined using
one or more valuation techniques. These valuation
techniques maximise, to the extent possible, the
use of observable market data.
To the extent possible, market information is
extracted from either the principal market for the
asset or liability (ie the market with the greatest
volume and level of activity for the asset or liability)
or, in the absence of such a market, the most
advantageous market available to the entity at
the end of the reporting period (ie the market that
maximises the receipts from the sale of the asset
or minimises the payments made to transfer the
liability, after taking into account transaction costs
and transport costs).
For non-financial assets, the fair value measurement
also takes into account a market participant’s ability
to use the asset in its highest and best use or to
sell it to another market participant that would use
the asset in its highest and best use.
The fair value of liabilities and the entity’s own
equity instruments (excluding those related to
share-based payment arrangements) may be
valued, where there is no observable market
price in relation to the transfer of such financial
instrument, by reference to observable market
information where such instruments are held as
assets. Where this information is not available,
other valuation techniques are adopted and, where
significant, are detailed in the respective note to
the financial statements.
c. Leases
Leases of fixed assets where substantially all the
risks and benefits incidental to the ownership
of the asset, but not the legal ownership that is
transferred to entities in the consolidated group,
are classified as finance leases.
Finance leases are capitalised by recognising an
asset and a liability at the lower of the amounts
equal to the fair value of the leased property or the
present value of the minimum lease payments,
including any guaranteed residual values. Lease
payments are allocated between the reduction of
the lease liability and the lease interest expense
for the period.
Leased assets are depreciated on a straight-line
basis over the shorter of their estimated useful
lives or the lease term.
Lease payments for operating leases, where
substantially all the risks and benefits remain with
the lessor, are recognised as expenses in the
periods in which they are incurred.
Lease incentives under operating leases are
recognised as a liability and amortised on a straight-
line basis over the lease term.
d. Inventories
Inventories are measured at the lower of cost
and net realisable value. Cost is determined on
a standard cost basis. The cost of manufactured
products includes direct materials, direct labour
and an appropriate portion of variable and fixed
overheads. Overheads are applied on the basis
of normal operating capacity. Net realisable value
is determined as the estimated selling price less
costs to sell.
ANNUAL REPORT 2015 > 39
Notes To The Financial Statements
For the year ended 30 June 2015
Note 1: Statement of Significant Accounting
Policies (continued)
e. Income Tax
The income tax expense (revenue) for the year
comprises current income tax expense (income)
and deferred tax expense (income).
Current income tax expense charged to profit or
loss is the tax payable on taxable income. Current
tax liabilities (assets) are measured at the amounts
expected to be paid to (recovered from) the
relevant taxation authority.
Deferred income tax expense reflects movements
in deferred tax asset and deferred tax liability
balances during the year as well unused tax losses.
Current and deferred income tax expense (income)
is charged or credited outside profit or loss when
the tax relates to items that are recognised outside
profit or loss.
Except for business combinations, no deferred
income tax is recognised from the initial recognition
of an asset or liability, where there is no effect on
accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated
at the tax rates that are expected to apply to the
period when the asset is realised or the liability is
settled and their measurement also reflects the
manner in which management expects to recover
or settle the carrying amount of the related asset
or liability.
Deferred
relating
tax assets
temporary
differences and unused tax losses are recognised
only to the extent that it is probable that future
taxable profit will be available against which the
benefits of the deferred tax asset can be utilised.
to
Where temporary differences exist in relation to
investments in subsidiaries, branches, associates,
and joint ventures, deferred tax assets and
liabilities are not recognised where the timing of
the reversal of the temporary difference can be
controlled and it is not probable that the reversal
will occur in the foreseeable future.
Current tax assets and liabilities are offset where
a legally enforceable right of set-off exists and it
is intended that net settlement or simultaneous
realisation and settlement of the respective asset
and liability will occur. Deferred tax assets and
liabilities are offset where: (a) a legally enforceable
right of set-off exists; and (b) the deferred tax
assets and liabilities relate to income taxes levied
by the same taxation authority on either the same
taxable entity or different taxable entities where
it is intended that net settlement or simultaneous
40 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
realisation and settlement of the respective asset
and liability will occur in future periods in which
significant amounts of deferred tax assets or
liabilities are expected to be recovered or settled.
Waterco Limited and its wholly-owned Australian
Subsidiaries have formed a consolidated group for
the purposes of the tax consolidation provisions
of the Income Tax Assessment Act 1997. Each
entity in the group recognises its own current
and deferred tax assets and liabilities. Such taxes
are measured using the “stand-alone taxpayer”
approach to allocation. All of the deferred tax
assets and liabilities of the subsidiary members
have become part of the deferred assets and
liabilities of Waterco Ltd. Each company in the
group contributes to the income tax payable in
proportion to their contribution to the net profit
before tax of the consolidated group. The group
notified the ATO on 20 January 2005 that it had
formed an income tax consolidated group to apply
from 1 July 2003.
f. Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the group’s
entities is measured using the currency of the
primary economic environment in which that entity
operates. The consolidated financial statements
are presented in Australian dollars which is
the parent entity’s functional and presentation
currency.
Transaction and balances
Foreign currency transactions are translated into
functional currency using the exchange rates
prevailing at the date of the transaction. Foreign
currency monetary items are translated at the
year-end exchange rate. Non-monetary items
measured at historical cost continue to be carried
at the exchange rate at the date of the transaction.
Non-monetary items measured at fair value are
reported at the exchange rate at the date when
fair values were determined.
Exchange differences arising on the translation of
monetary items are recognised in the statement of
comprehensive income, except where deferred in
equity as a qualifying cash flow or net investment
hedge.
Exchange differences arising on the translation
of non-monetary items are recognised directly in
equity to the extent that the gain or loss is directly
recognised in equity, otherwise the exchange
difference is recognised in the statement of
comprehensive income.
Notes To The Financial Statements
For the year ended 30 June 2015
Note 1: Statement of Significant Accounting
Policies (continued)
f. Foreign Currency Transactions and Balances
(continued)
Group companies
The financial results and position of foreign
operations whose functional currency is different
from the group’s presentation currency are
translated as follows:
• assets and liabilities are translated at year-end
exchange rates prevailing at that reporting date;
• income and expenses are translated at average
exchange rates for the period; and
• retained earnings are translated at the exchange
rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign
operations are transferred directly to the Group’s
foreign currency translation reserve in the statement
of comprehensive income. These differences are
in the statement of comprehensive
recognised
income in the period in which the operation is
disposed.
g. Employee Benefits
Provision for employee benefits, which include
long service leave, and annual leave are computed
to cover expected benefits at balance date.
Employee benefits expected to be settled within
one year together with benefits arising from wages
and salaries, annual leave and sick leave which will
be settled after one year, have been measured at
the amounts expected to be paid when the liability
is settled plus related on-costs. (see note 19)
Employee benefits (long service leave) payable
later than one year have been measured at the
present value of the estimated future cash outflows
to be made for those benefits. In determining the
liability , consideration is given to employee wage
increases and the probability that the employee
may satisfy any vesting requirements. Those
cash flows are discounted using market yields on
national government bonds with terms to maturity
that match the expected timing of cash flows
attributable to employee benefits.
Contributions are made by the consolidated
group to an employee superannuation fund and
are charged as expenses when incurred. The
consolidated group has no legal obligation to cover
any shortfall in the funds obligations to provide
benefits to employees on retirement.
Equity-settled compensation
The group operates equity-settled share-based
payment employee share and option schemes.
The fair value of the equity to which employees
become entitled is measured at grant date and
recognised as an expense over the vesting
period, with a corresponding increase to an equity
account. The fair value of shares is ascertained as
the market bid price. The fair value of options is
ascertained using a Black–Scholes pricing model
which incorporates all market vesting conditions.
The number of shares and options expected to
vest is reviewed and adjusted at each reporting
date such that the amount recognised for
services received as consideration for the equity
instruments granted shall be based on the number
of equity instruments that eventually vest.
h. Deferred Expenditure
Expenditure during the research phase of a project
is recognised as an expense when incurred.
Development costs are capitalised only when
technical feasibility studies identify that the project
will deliver future economic benefits and these
benefits can be measured reliably.
Development costs have a finite life and are
amortised on a systematic basis matched to the
future economic benefits over the useful life of the
project.
i. Acquisition of Assets
The cost method of accounting has been used for
acquisition of all assets (including shares). Cost is
defined as the fair value of the assets given up
at the date of acquisition plus costs incidental to
acquisition. Where goodwill arises it is brought to
account.
ANNUAL REPORT 2015 > 41
Notes To The Financial Statements
For the year ended 30 June 2015
Note 1: Statement of Significant Accounting
Policies (continued)
j. Property, Plant and Equipment
Each class of property, plant and equipment is
carried at cost or fair value less, where applicable,
any accumulated depreciation.
Property
Land and buildings are measured on a fair value
basis being the amount for which an asset could
be exchanged between knowledgeable willing
parties in an arms length transaction.
The value of the land and building owned by the
consolidated group is based on the following
independent valuations:
Land &
Buildings
Date of
Valuation
Amount
Rydalmere
NSW
15 June 2012 AUD 9,750,000
Malaysia
30 April 2014
China
18 June 2012
USA
17 June 2013
AUD 18,935,482
(MYR 55,000,000)
AUD 8,847,905
(CNY 42,170,000)
AUD 2,606,651
(USD 1,995,000)
Valuations were made on the basis of open value.
The revaluation surplus net of applicable deferred
capital gains taxes was credited to an asset
revaluation reserve in shareholders’ equity.
Increases in the carrying amount arising on
revaluation of land and buildings are credited to
a revaluation surplus in equity. Decreases that
offset previous increases of the same asset are
charged against fair value reserves directly in
equity; all other decreases are charged to the
statement of comprehensive income. Each year
the difference between depreciation based on the
revalued carrying amount of the asset charged
to the statement of comprehensive income and
depreciation based on the asset’s original cost is
transferred from the revaluation surplus to retained
earnings.
Due to the fire at the Rydalmere NSW Premises
on 7 January 2015, our valuation shows the value
as if completed basis of $11,300,000 and on an
“as is” or Uncompleted” basis of $7,000,000.
No adjustment has been done to revalue the
Rydalmere Building since it has not been reinstated
as at 30th June 2015. The value of the property has
been written down to reflect the damage caused
by the fire.
42 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Any accumulated depreciation at the date of
revaluation is eliminated against the gross carrying
amount of the asset and the net amount is restated
to the revalued amount of the asset.
Plant and equipment
Plant and equipment are measured on the
cost basis and therefore carried at cost less
accumulated depreciation and any accumulated
impairment. In the event the carrying amount of
plant and equipment is greater than the estimated
recoverable amount, the carrying amount is written
down immediately to the estimated recoverable
amount and impairment losses are recognised
either in profit or loss or as a revaluation decrease
if the impairment losses relate to a revalued asset.
A formal assessment of recoverable amount is
made when impairment indicators are present
(refer to Note 1(n) for details of impairment).
The carrying amount of plant and equipment is
reviewed annually by directors to ensure it is not
in excess of the recoverable amount from these
assets. The recoverable amount is assessed on
the basis of the expected net cash flows that will
be received from the asset’s employment and
subsequent disposal. The expected net cash flows
have been discounted to their present values in
determining recoverable amounts.
The cost of fixed assets constructed within the
consolidated group includes the cost of materials,
direct labour, borrowing costs and an appropriate
proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s
carrying amount or recognised as a separate
asset, as appropriate, only when it is probable
that future economic benefits associated with the
item will flow to the Group and the cost of the
item can be measured reliably. All other repairs
and maintenance are charged to the statement of
comprehensive income during the financial period
in which they are incurred.
Depreciation
The depreciable amount of all fixed assets
including building and capitalised leased assets,
but excluding freehold land, is depreciated over
their useful lives commencing from the time the
asset is ready for use. Leasehold improvements
are depreciated over the shorter of either the
unexpired period of the lease or the estimated
useful lives of the improvements.
The gain or loss on disposal of all fixed assets is
determined as the difference between the carrying
amount of the asset at the time of disposal and the
proceeds of disposal, and is included in operating
profit before income tax of the consolidated group
in the year of disposal.
Notes To The Financial Statements
For the year ended 30 June 2015
Note 1: Statement of Significant Accounting
Policies (continued)
Interest revenue is recognised using the effective
interest rate method.
j. Property, Plant and Equipment (continued)
Depreciation (continued)
Depreciation where applicable has been charged in
the accounts so as to write off each asset over the
estimated useful life of the asset concerned. Either
the diminishing value or straight line method, as
considered appropriate, is used. The depreciation
rates used for each class of depreciable assets
are:
Class of Fixed Assets
Depreciation Rate
Buildings
1.50% - 2.50%
Plant and equipment
6.00% -
33.33%
Leased plant and
equipment
13.00% -
20.00%
The assets’ residual values and useful lives are
reviewed, and adjusted if appropriate, at each
balance date.
An asset’s carrying amount is written down
immediately to its recoverable amount if the
asset’s carrying amount
its
estimated recoverable amount.
is greater than
Gains and losses on disposals are determined
by comparing the proceeds with the carrying
amount. These gains and losses are included in
the statement of comprehensive income. When
revalued assets are sold, amounts included in
the revaluation reserve relating to that asset are
transferred to retained earnings.
k. Revenue and Other Income
Revenue is measured at the fair value of the
consideration received or receivable after taking
into account any trade discounts and volume
rebates allowed. When the inflow of consideration
is deferred, it is treated as the provision of
financing and is discounted at a rate of interest
that is generally accepted in the market for
similar arrangements. The difference between
the amount initially recognised and the amount
ultimately received is interest revenue.
Revenue from the sale of goods is recognised
at the point of delivery as this corresponds to
the transfer of significant risks and rewards of
ownership of the goods and the cessation of all
involvement in those goods.
Dividend revenue is recognised when the right to
receive a dividend has been established.
Franchise fee income is invoiced and recognised
as revenue on a monthly basis.
All revenue is stated net of the amount of goods
and services tax (GST).
l. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised
net of the amount of GST, except where the
amount of GST
is not recoverable
from the Australian Taxation Office. In these
circumstances the GST is recognised as part of the
cost acquisition of the asset or as part of an item
of the expense. Receivables and payables in the
statement of financial position are shown inclusive
of GST.
incurred
Cashflows are presented
in the cash flow
statement on a gross basis, except for the GST
component of investing and financing activities,
which are disclosed as operating cash flows.
m. Impairment of Assets
At the end of each reporting period, the Group
assesses whether there is any indication that
an asset may be impaired. The assessment will
include the consideration of external and internal
sources of information including dividends received
from subsidiaries, associates or jointly controlled
entities deemed to be out of pre-acquisition
profits. If such an indication exists, an impairment
test is carried out on the asset by comparing the
recoverable amount of the asset, being the higher
of the asset’s fair value less costs to sell and value
in use, to the asset’s carrying amount. Any excess
of the asset’s carrying amount over its recoverable
amount is recognised immediately in profit or
loss, unless the asset is carried at a revalued
amount in accordance with another Standard (eg
in accordance with the revaluation model in AASB
116). Any impairment loss of a revalued asset is
treated as a revaluation decrease in accordance
with that other Standard.
Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates
the recoverable amount of the cash-generating
unit to which the asset belongs.
Impairment testing is performed annually for
goodwill and intangible assets with indefinite lives.
ANNUAL REPORT 2015 > 43
Notes To The Financial Statements
For the year ended 30 June 2015
Note 1: Statement of Significant Accounting
Policies (continued)
n. Trade and Other Receivables
Trade and other receivables include amounts
due from customers for goods sold and services
performed in the ordinary course of business.
Receivables expected to be collected within twelve
months at the end of the reporting period are
classified as current assets. All other receivables
are classified as non-current assets.
Trade and other receivables are initially recognised
at fair value and subsequently measured at
amortised cost using the effective interest method
less any provision for impairment (see 1 n.)
o. Trade and Other Payables
Trade and other payables represent the liability
outstanding at the end of the reporting period for
goods and services received by the Group during
the reporting period which remains unpaid. The
balance is recognised as a current liability with
the amount being normally paid within 30 days of
recognition of the liability.
p. Provisions
Provisions are recognised when the group has a
legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of
economic benefits will result and that outflow can
be reliably measured.
q. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand,
deposits held at call with banks, other short-term
highly liquid investments with original maturities
of three months or less, and bank overdrafts.
Bank overdrafts are shown within short-term
borrowings in current liabilities in the statement of
financial position.
r. Borrowing Costs
Borrowing costs directly attributable to the
acquisition, construction or production of assets
that necessarily take a substantial period of time
to prepare for their intended use or sale, are added
to the cost of those assets, until such time as the
assets are substantially ready for their intended
use or sale.
All other borrowing costs are recognised in income
in the period in which they are incurred.
s. Financial Instruments
Recognition and Initial Measurement
instruments,
Financial
incorporating financial
assets and financial liabilities, are recognised
when the entity becomes a party to the contractual
44 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
provisions of the instrument. Trade date accounting
is adopted for financial assets that are delivered
within timeframes established by marketplace
convention.
Financial instruments are initially measured at fair
value plus transactions costs where the instrument
is not classified as at fair value through profit or
loss. Transaction costs related to instruments
classified as at fair value through profit or loss are
expensed to profit or loss immediately. Financial
instruments are classified and measured as set
out below.
Derecognition
Financial assets are derecognised where the
contractual rights to receipt of cash flows expires
or the asset is transferred to another party
whereby the entity is no longer has any significant
continuing involvement in the risks and benefits
associated with the asset. Financial liabilities
are derecognised where the related obligations
are either discharged, cancelled or expire. The
difference between the carrying value of the
financial liability extinguished or transferred to
another party and the fair value of consideration
paid, including the transfer of non-cash assets or
liabilities assumed, is recognised in profit or loss.
Classification and Subsequent Measurement
Finance instruments are subsequently measured
at fair value, amortised cost using the effective
interest rate method, or cost.
Amortised cost is the amount at which the
financial asset or financial liability is measured at
initial recognition less principal repayments and
any reduction for impairment, and adjusted for any
cumulative amortisation of the difference between
that initial amount and the maturity amount
calculated using the effective interest method.
Fair value is determined based on current bid prices
for all quoted investments. Valuation techniques
are applied to determine the fair value for all
unlisted securities, including recent arm’s length
transactions, reference to similar instruments and
option pricing models.
The effective interest method is used to allocate
interest income or interest expense over the
relevant period and is equivalent to the rate that
discounts estimated future cash payments or
receipts (including fees, transaction costs and other
premiums or discounts) through the expected life
(or when this cannot be reliably predicted, the
contractual term) of the financial instrument to
the net carrying amount of the financial asset or
financial liability. Revisions to expected future net
cash flows will necessitate an adjustment to the
carrying value with a consequential recognition of
an income or expense item in profit or loss.
Notes To The Financial Statements
For the year ended 30 June 2015
Note 1: Statement of Significant Accounting
Policies (continued)
s. Financial Instruments (continued)
Classification and Subsequent Measurement
(continued)
The Group does not designate any interests in
subsidiaries, associates or joint venture entities as
being subject to the requirements of Accounting
Standards specifically applicable
to financial
instruments.
(i) Financial assets at fair value through profit or
loss
Financial assets are classified at “fair value
through profit or loss” when they are held
for trading for the purpose of short-term
profit taking, derivatives not held for hedging
purposes, or when they are designated as
such to avoid an accounting mismatch or
to enable performance evaluation where
a Group of financial assets is managed by
key management personnel on a fair value
basis in accordance with a documented risk
management or investment strategy. Such
assets are subsequently measured at fair value
with changes in carrying value being included
in profit or loss.
(ii) Loans and receivables
Loans and receivables are non-derivative
financial assets with fixed or determinable
payments that are not quoted in an active
market and are subsequently measured at
amortised cost.
Loans and receivables are included in current
assets, where they are expected to mature
within 12 months after the end of the reporting
period.
(iii) Financial liabilities
Non-derivative financial liabilities (excluding
subsequently
are
financial
measured at amortised cost.
guarantees)
Impairment
At the end of each reporting period, the Group
assesses whether there is objective evidence that a
financial instrument has been impaired. In the case
of available-for-sale financial instruments, a prolonged
decline in the value of the instrument is considered
to determine whether an impairment has arisen.
Impairment losses are recognised in profit or loss.
Also, any cumulative decline in fair value previously
recognised
is
in other comprehensive
reclassified to profit or loss at this point.
income
t. Rounding of Amounts
The parent entity has applied the relief available
to it under ASIC Class Order 98/100. Accordingly,
amounts in the financial statements and directors’
report have been rounded off to the nearest
$1,000, unless specified otherwise.
u. Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgements
incorporated into the financial report based on
historical knowledge and best available current
information. Estimates assume a reasonable
expectation of future events and are based on
current trends and economic data, obtained both
externally and within the group.
Key Estimates
(i) Inventory Classification
Included in inventory are certain inventory items
held to service existing products and various
components used in the manufacturing process.
The nature of these items may require them to
be included in inventory for more than one year.
Management have evaluated these inventory
items and do not consider the carrying value of
these items as material. All inventory items have
therefore been classified as current.
(ii) Inventory Obsolescence
Management review inventory reports on a regular
basis to determine slow-moving or obsolescence.
Appropriate provisions are carried for impairment
items are
items. Obsolete
of slow-moving
disposed of as and when identified.
(iii) Impairment-General
The Group assesses impairment at the end of
each reporting period by evaluating conditions and
events specific to the Group that may be indicative
of impairment triggers. Recoverable amounts of
relevant assets are reassessed using value-in-
use calculations which incorporate various key
assumptions.
ANNUAL REPORT 2015 > 45
Notes To The Financial Statements
For the year ended 30 June 2015
Note 1: Statement of Significant Accounting Policies (continued)
v. New and Amended Accounting Policies Adopted by the Group
The below table shows the new and revised accounting standards (including amending standards) and
interpretations that are mandatory for the year ended 30 June 2015.
AASB 10
Consolidated Financial Statements
1 January 2014
Mandatory
AASB 11
Joint Arrangements
1 January 2014
Mandatory
AASB 12
Disclosure of Interests in Other Entities
1 January 2014
Mandatory
AASB 127
Separate Financial
1 January 2014
Mandatory
AASB 128
Investments in Associates and Joint Ventures
1 January 2014
Mandatory
w. New Accounting Standards for Application in Future Periods
New standards and interpretations issued but not yet effective
At the date of this financial report the following standards and interpretations, which may impact the entity in
the period of initial application, have been issued but are not yet effective:
Reference
Title
Summary
AASB 2015-3
Amendments to
Australian Accounting
Standards arising from
the Withdrawal of AASB
1031 Materiality
The Standard completes the
AASB’s project to remove Australian
guidance on materiality from
Australian Accounting Standards.
AASB 2014-4
Amendments to
Australian Accounting
Standards – Clarification
of Acceptable Methods
of Depreciation and
Amortisation
AASB 2014-6
Amendments to
Australian Accounting
Standards – Agriculture:
Bearer Plants
This Standard amends AASB
116 and AASB 138 to establish
the principle for the basis of
depreciation and amortisation as
being the expected pattern of
consumption of the future economic
benefits of an asset, and to clarify
that revenue is generally presumed
to be an inappropriate basis for that
purpose.
This amending standard defines
bearer plants, and requires bearer
plants to be accounted for as
property, plant and equipment
within the scope of AASB 116
Property, Plant and Equipment.
Application date
(financial years
beginning)
Expected
Impact
1 July 2015
No expected
impact
1 January 2016
No material
impact
1 January 2016
No material
impact
46 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
Note 1: Statement of Significant Accounting Policies (continued)
w. New Accounting Standards for Application in Future Periods (continued)
New standards and interpretations issued but not yet effective (continued)
Reference
Title
Summary
AASB 2015-1
Amendments to
Australian Accounting
Standards – Annual
Improvements to
Australian Accounting
Standards 2012-2014
Cycle
The Standard makes amendments
to various Australian Accounting
Standards arising from the IASB’s
Annual Improvements process, and
editorial corrections.
Application date
(financial years
beginning)
Expected
Impact
1 January 2016
No material
impact
AASB 2015-2
Amendments to
Australian Accounting
Standards –Disclosure
Initiative: Amendments
to AASB 101
The Standard makes amendments
to AASB 101 Presentation of
Financial Statements arising from
the IASB’s Disclosure Initiative
project.
1 January 2016
Disclosures
Only
AASB 9
Financial Instruments
AASB 2014-7
Amendments to
Australian Accounting
Standards arising from
AASB 9 (December
2014)
This Standard supersedes both
AASB 9 (December 2010) and AASB
9 (December 2009) when applied.
It introduces a “fair value through
other comprehensive income”
category for debt instruments,
contains requirements for
impairment of financial assets, etc.
1 January 2018
No material
impact
Consequential amendments arising
from the issuance of AASB 9
1 January 2018
No material
impact
x. Comparative Figures
Where required by Accounting Standards comparative figures have been adjusted to conform with changes
in presentation for the current financial year.
ANNUAL REPORT 2015 > 47
Notes To The Financial Statements
For the year ended 30 June 2015
Note 2: Parent Information
The following information has been extracted from the books and records of the parent and has been prepared
in accordance with accounting standards.
STATEMENT OF FINANCIAL POSITION
ASSETS
Current Assets
TOTAL ASSETS (i)
LIABILITIES
Current Liabilities
TOTAL LIABILITIES
EQUITY
Issued capital
Capital profits reserve
Asset revaluation reserve
Share options reserve
Retained earnings
TOTAL EQUITY
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Total profit after tax
Total comprehensive income
2015
$000
22,614
67,640
22,290
24,033
38,142
180
1,227
-
4,058
43,607
2015
$000
2,791
1,789
2014
$000
18,836
67,349
5,214
25,155
37,430
180
2,229
20
2,336
42,195
2014
$000
1,243
1,243
Guarantees
At 30th June 2015, Waterco Ltd has provided a guarantees of RM11,150,000 and $US1,000,000 (A$5,145,330
(2014: RM11,150,000 and $US1,000,000 (A$4,752,164)) to AM Bank Sdn Bhd for loans provided to a subsidiary,
Waterco (Far East) Sdn Bhd.
Contingent Liabilities
At 30th June 2015, Waterco Ltd has provided guarantees of $5,344,509 (2014: $5,428,897) to landlords for
leases of premises subleased to its Swimart Franchisees.
Cotractual Commitments
At 30th June 2015, Waterco Ltd has not entered any contractual commitments for the acquisition of any property,
plant and equipment. (2014: nil).
48 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
Note 3: Revenue and Other Income
Revenue from Continuing Operations
Sales revenue
• Sale of goods
Other revenue
• Interest received 3(a)
• Rent
• Insurance income
• Other
Total Revenue
(a) Interest received or receivable from
• Other persons
Total interest revenue
Other Income
Net gain/(loss) on disposal off of non-current assets
• Property, plant and equipment
Insurance Income
Consolidated Group
2015
$000
2014
$000
80,886
33
194
6,414
644
88,171
33
33
34
77,118
24
210
-
619
77,971
24
24
(85)
As a result of the fire at its Rydalmere Head Office on 7 January 2015, Waterco Ltd has lodged a claim with its insurance
company for compensation for losses resulting from the fire.
As at 30 June 2015, the amount of income arising from the claim
comprises:
Building
Plant & Equipment
Inventory destroyed
Increased cost of working
Loss of Profits
Insurance Income
Less:
Insurance receipts
Insurance receivable (see note 9)
3,254
499
1,016
1,114
531
6,414
2,516
3,898
ANNUAL REPORT 2015 > 49
Notes To The Financial Statements
For the year ended 30 June 2015
Note 4: Profit for the Year
Profit for the year has been determined after:
(a) Expenses:
Cost of Sales
Finance costs:
• Borrowings
• Hire purchase expense
• Finance charges on finance leases
Depreciation of non-current assets :
• Buildings
• Plant & equipment
• Hire purchase assets
• Capitalised leased assets
Amortisation of non-current assets:
• Land use rights
• Leasehold land
• Goodwill on acquisition
• Expenditure carried forward
Total depreciation and amortisation
Bad and doubtful debts
• Trade debtors
Rental expense on Operating leases
• Minimum lease payments
Research & development
Impairment loss on non-current assets
at Rydalmere destroyed in the fire
• Building
• Plant and equipment
50 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Consolidated Group
2015
$000
2014
$000
46,509
42,249
1,519
5
17
1,541
342
634
26
118
1,120
16
-
6
13
35
1,155
9
2,545
1,100
3,254
499
3,753
1,503
-
26
1,529
222
868
-
179
1,269
15
13
6
7
41
1,310
4
2,480
1,063
-
-
Notes To The Financial Statements
For the year ended 30 June 2015
Note 4: Profit for the Year (continued)
Profit for the year has been determined after:
(a) Expenses:
Rydalmere Fire
Consolidated Group
2015
$000
2014
$000
On 7 January 2015, a fire broke out at the head office of Waterco Ltd located in Rydalmere NSW.
The front of the complex which houses the offices,warehouse No 1 along and the adjacent covered breezeway
was destroyed in the fire.
The written down value of the property and plant and equipment destroyed in the fire amounted to $5,185,000
The net movement of ($1,002,000) in the asset revaluation reserve (note 22) is made up of the reversal of prior
year revaluation upward of the Rydalmere Building of ($1,432,000) less the tax effect of $430,000.
Property
Asset revaluation reserve
Loss on write off of property
Plant & equipment
Net loss on write off of plant and equipment
Total property, plant & equipment
Note 5: Auditors’ Remuneration
Remuneration of the auditor of the parent entity for:
• Audit or reviewing the financial report
• Non audit fees for agreed upon procedures
Remuneration of other auditors of subsidiaries for:
• Auditing or reviewing the financial report of subsidiaries
1,432
3,254
4,686
499
5,185
197
-
127
-
-
-
-
-
169
-
107
ANNUAL REPORT 2015 > 51
Notes To The Financial Statements
For the year ended 30 June 2015
Consolidated Group
Note 6: Income Tax Expense
(a) The components of tax expense comprise:
• Current tax
• Deferred tax
• Recoupment of prior year tax losses
(b) The prima facie tax on profit before income tax is reconciled to
the income tax as follows:
Profit before income tax
Prima facie tax payable on profit before income tax at 30%
(2014 30%)
Add
Tax effect of:
• Depreciation of buildings
• Entertainment
• Amortisation – Goodwill
• Amortisation – Land use rights
• Prior period deferred tax adjustment
• Foreign controlled entities tax losses not tax effected
Less
Tax effect of:
• Research and development
• Special building write off
• Effects of lower rates in overseas countries
• Unrealised foreign exchange losses/(gains)
• Overprovision/(under) for tax in prior years
• Reinvestment allowance
• Other
Income tax expense attributable to entity
The applicable weighted average effective tax rates are as follows:
2015
$000
1,411
(347)
431
1,495
3,047
914
8
2
2
5
377
765
88
-
156
48
107
82
97
1,495
49%
2014
$000
800
54
100
954
1,928
578
12
2
2
4
-
565
67
6
127
(57)
57
-
9
954
49%
52 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
Note 7: Key Management Personnel Compensation
(a) Key Management Personnel (“KMP”) Compensation
The totals of remuneration paid to KMP of the company and the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Other long term benefits
Share-based payments
Consolidated Group
2015
$000
1,320
98
16
2
1,436
2014
$000
1,232
92
40
4
1,368
Refer to the remuneration report contained in the directors’ report for remuneration paid or payable to each member of
the groups KMP for the year ended 30 June 2015.
(b) Shareholdings
Number of Shares held by key Management Personnel
2015
Key Management Personnel
Balance
1.7.2014
Received as
Remuneration
Net Change
Other
Mr S S Goh
Mr B Goh
Mr G Norman
Mr B Hunt
Mr R Ling
Mr S T Lim
Mrs B H Leo
Mr G Doumit
2014
19,307,203
539,837
149,284
330,117
-
120,317
81,361
86,300
-
-
-
-
-
-
-
-
739,407
67
1,429
9,432
-
(17,500)
(15,000)
(15,000)
Key Management Personnel
Balance
1.7.13
Received as
Remuneration
Net Change
Other
Mr S S Goh
Mr B Goh
Mr G Norman
Mr B Hunt
Mr R Ling
Mr S T Lim
Mrs B H Leo
Mr G Doumit
18,716,514
539,703
146,287
311,191
-
120,317
81,361
86,300
-
-
-
-
-
-
-
-
590,689
134
2,997
18,926
-
-
-
-
Balance
30.6.2015
20,046,610
539,904
150,713
339,549
-
102,817
66,361
71,300
Balance
30.6.14
19,307,203
539,837
149,284
330,117
-
120,317
81,361
86,300
ANNUAL REPORT 2015 > 53
Notes To The Financial Statements
For the year ended 30 June 2015
Note 7: Key Management Personnel Compensation (continued)
(c) Compensation Practices
In constructing, reviewing and determining the remuneration policy for Executive Directors and the
senior executive team, the Board and Remuneration Committee have considered a number of factors
including:
• the importance of attracting, retaining and motivating management of the appropriate calibre to further the
•
success of the business; and
linking pay to performance by rewarding effective individual achievement as well as business performance;
and
• the mix within the package which is designed to align personal reward with enhanced shareholder value
over both the short and long-term.
The Executive Directors’ and the senior executive team’s package consists of two general components:
• fixed remuneration component consisting of base salary which executives may “salary sacrifice” and other
benefits; and
• variable or “at risk” component consisting of an annual short term incentive plan for executives and a long
term incentive plan for the CEO.
Remuneration of the company’s Non-Executive Directors is determined by the Board, based on the nature of
their work, responsibilities and market comparisons. The maximum aggregate amount of fees that can be paid
to Non-Executive Directors is subject to approval shareholders.
CURRENT ASSETS
Note 8: Cash and cash equivalents
Cash at bank and in hand
Reconciliation of cash
Cash at the end of the year as shown in the statement of cash flows
is reconciled to the related items in the balance sheet as follows:
Cash and cash equivalents
Bank overdraft (note 16)
Note 9: Trade and other receivables
Trade receivables
Less: provision for impairment of receivables
Other receivables
Insurance receivable
Sundry receivables
Consolidated Group
2014
$000
1,588
1,588
(1,656)
(68)
Consolidated Group
2014
$000
10,603
(186)
10,417
-
1,399
1,399
11,816
2015
$000
3,771
3,771
(507)
3,264
2015
$000
11,843
(211)
11,632
3,898
1,205
5,103
16,735
Provision For Impairment of Receivables
Current trade and term receivables are non-interest bearing loans and generally on 30-day terms. Non-current
trade and term receivables are assessed for recoverability based on the underlying terms of the contract. A
provision for impairment is recognised when there is objective evidence that an individual trade or term receivable
is impaired. These amounts have been included in the other expenses item.
54 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
Note 9: Trade and other receivables (continued)
Movement in the provision for impairment of receivables is as follows:
Opening
Balance
1.7.2013
$000
Charge for
the Year
$000
Amounts
Written Off
$000
Closing
Balance
30.6.2014
$000
Consolidated Group
Current trade receivables
242
(52)
(4)
186
Opening
Balance
1.7.2014
$000
Charge for
the Year
$000
Amounts
Written Off
$000
Closing
Balance
30.6.2015
$000
Consolidated Group
Current trade receivables
186
34
(9)
211
There are $3,482,000 (2014: $2,713,000) within trade and other receivables that are not impaired and are past
due. It is expected these balances will be received in full. Impaired receivables are provided for in full.
The following table details the Group’s trade and other receivables exposed to credit risk (prior to collateral and
other credit enhancements) with ageing analysis and impairment provided for thereon. Amounts are considered
as ‘past due’ when the debt has not been settled, with the terms and conditions agreed between the Group and
the customer or counter party to the transaction. Receivables that are past due are assessed for impairment by
ascertaining solvency of the debtors and are provided for where there are specific circumstances indicating that
the debt may not be fully repaid to the Group.
The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be
of high credit quality.
Gross
amount
Past
due and
impaired
$000
$000
Past due but not impaired (days overdue)
< 30
$000
31–60
$000
61–90
$000
> 90
$000
Within initial
trade terms
$000
Consolidated Group
2015
Trade and term receivables
Other receivables
Total
2014
Trade and term receivables
Other receivables
Total
11,843
5,103
16,946
10,603
1,399
12,002
211
-
211
186
-
186
1,310
-
1,310
1,425
-
1,425
766
-
766
455
-
455
1,406
-
1,406
833
-
833
-
-
-
-
-
-
8,150
5,103
13,253
7,704
1,399
9,103
The Group does not hold any financial assets with terms that have been renegotiated, but which would otherwise be past
due or impaired.
ANNUAL REPORT 2015 > 55
Notes To The Financial Statements
For the year ended 30 June 2015
Note 10: Inventories
Raw materials and stores at cost
Work in progress at cost
Finished goods at cost
Goods in transit at cost
Provision for inventory write-down
Note 11: Other current assets
Prepayments
NON CURRENT ASSETS
Note 12: Interests in Subsidiaries
Parent Entity
Waterco Limited
Controlled Entities of Waterco Limited:
Swimart Pty Ltd
Zane Solar Systems Australia Pty Ltd
Swimart Network Pty Ltd
Waterco USA Inc
Waterco Engineering Sdn Bhd
Waterco (Far East) Sdn Bhd
Watershoppe (M) Sdn Bhd
Baker Hydro (Far East) Sdn Bhd
Waterco Engineering Services Sdn Bhd
Waterco (NZ) Ltd
Swimart (NZ) Ltd
Waterco (Guangzhou) Ltd
Waterco (C) Ltd
Waterco (Europe) Ltd
Waterco Canada Inc
PT Waterco Indonesia
Waterco International Pte Ltd
Waterco France
Consolidated Group
2015
$000
9,841
850
21,493
2,774
(988)
33,970
843
843
2014
$000
10,572
1,144
20,910
2,230
(1,029)
33,827
724
724
Country of
incorporation
Carries on
business in
2015
% owned
2014
Australia
Australia
Australia
Australia
Australia
USA
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
New Zealand
New Zealand
China
China
United Kingdom
Canada
Indonesia
Singapore
France
Australia
Australia
Australia
USA
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
New Zealand
New Zealand
China
China
United Kingdom
Canada
Indonesia
Singapore
France
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
100
100
56 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
Note 13: Property, plant & equipment
Freehold land at independent valuation
Land use rights
Less: accumulated amortisation
Freehold buildings at independent valuation
Less: accumulated depreciation
Plant & equipment at cost
Less: accumulated depreciation
Hire purchase assets
Less: accumulated depreciation
Leased plant & equipment at cost
Less: accumulated depreciation
Total written down value
Movements in Carrying Amounts
Consolidated Group
2015
$000
13,834
3,981
(30)
3,951
17,700
(1,373)
16,327
26,794
(20,433)
6,361
432
(26)
406
688
(242)
446
41,325
2014
$000
13,327
3,246
(15)
3,231
21,015
(976)
20,039
26,076
(19,189)
6,887
-
-
-
668
(165)
503
43,987
2015
Freehold
Land
$000
Buildings
$000
Land use
rights
$000
Leasehold
Land
$000
Plant &
Equipment
$000
Leased
Plant &
Equipment
$000
Hire Purchase
Plant &
Equipment
$000
Total
$000
Consolidated Group:
Balance at the
beginning of year
Foreign exchange translation
Additions
Revaluation
Impairment
Disposals
Depreciation expense*
Carrying amount at
the end of year
13,327
507
-
-
-
-
-
20,039
1,506
14
-
(4,686)
-
(546)
3,231
750
-
-
-
-
(30)
13,834
16,327
3,951
-
-
6,887
-
1,830
-
(499)
(134)
(1,723)
6,361
503
-
78
-
(17)
(118)
446
-
-
432
-
-
(26)
43,987
2,763
2,354
-
(5,185)
(151)
(2,443)
406
41,325
*Depreciation expense that is absorbed into the cost of manufactured inventory is $1,294,000 (2014: $1,131,000).
Movements in Carrying Amounts
2014
Freehold
Land
$000
Buildings
$000
Land use
rights
$000
Leasehold
Land
$000
Plant &
Equipment
$000
Leased
Plant &
Equipment
$000
Hire Purchase
Plant &
Equipment
$000
Total
$000
Consolidated Group:
Balance at the
beginning of year
Foreign exchange translation
Additions
Revaluation
Disposals
Depreciation expense*
Carrying amount at
the end of year
8,278
(5)
-
5,054
20,461
(257)
-
367
3,330
(84)
-
13
-
-
(532)
(15)
(13)
7,471
-
1,413
(308)
(1,689)
13,327
20,039
3,231
-
6,887
562
-
190
(100)
(149)
503
-
-
-
-
-
40,115
(346)
1,603
5,421
(408)
(2,398)
43,987
*Depreciation expense that is absorbed into the cost of manufactured inventory is $1,131,000 (2013: $938,000).
ANNUAL REPORT 2015 > 57
Notes To The Financial Statements
For the year ended 30 June 2015
Note 13: Property, Plant & Equipment (continued)
If Land & Buildings were stated at historic cost,
amounts would be as follows:
Cost
Less: Accumulated depreciation
Net book value
Consolidated Group
2015
$000
2014
$000
24,835
(4,006)
20,829
28,106
(4,077)
24,029
The groups land and buildings were revalued as per the disclosures in note 1(j). The directors consider the carrying value
of the land and buildings to be a fair reflection of the market value.
Note 14: Intangible assets
Goodwill
Less: accumulated amortisation
Preliminary expenses
Product development costs
less: accumulated amortisation
280
(274)
6
1
501
(186)
315
322
Movements in Carrying Amounts
Consolidated Group:
Balance at the beginning of year
Additions
Disposals
Amortisation expense
Carrying amount at the end of year
Preliminary
Expense
$000
Goodwill
$000
Deferred
expenditure
$000
1
-
-
-
1
18
-
-
6
12
342
-
13
14
315
280
(268)
12
1
414
(72)
342
355
Total
$000
355
-
13
20
322
58 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
CURRENT LIABILITIES
Note 15: Trade and other payables - unsecured
Trade creditors
Sundry creditors and accrued expenses
Note 16: Borrowings
Bank loans
Bank overdraft
Hire purchase creditors
Unexpired interest
Lease liability
Consolidated Group
2015
$000
2014
$000
8,301
3,838
12,139
14,538
507
169
(17)
221
15,418
8,219
3,293
11,512
2,556
1,656
-
-
168
4,380
Bank facilities of the group are secured by a first ranking and registered fixed and floating debenture charge
over the assets of the parent entity, and registered mortgages over freehold land and buildings and guarantees
and indemnities from subsidiaries. That part of the facilities that are payable within 12 months are classified as
current.
Bank loans of $14,537,500 have a maturity date for the parent entity is 31 July 2016 and bears variable interest at
5.12% payable monthly .This loan has been classified as current due to a breach of the interest cover covenant
(calculated quarterly on a rolling 12 months basis) due to non-recurring factors at 31st December 2014. The
interest cover covenant has been met at 31st March 2015 and 30th June 2015. Management expects an
agreement will be reached with the bank for the interest cover breach to be remedied and the loan facility to be
extended prior to maturity.
Note 17: Taxes
a) Liabilities
Current
Income Tax
Non Current Deferred tax liability comprises:
Tax allowances relating to property, plant & equipment
Revaluation adjustments taken direct to equity
Other
Parent entity DTA netted off against DTL
Consolidated DTL
b) Assets
Current
Income Tax
Deferred tax assets comprises:
Provisions
Attributable to tax losses
Tax allowances relating to property, plant & equipment
Other
Parent entity DTA netted off against DTL
Consolidated DTA
279
1,852
924
(147)
2,629
(1,288)
1,341
-
747
77
705
70
1,599
(1,288)
311
-
1,466
674
2
2,142
(618)
1,524
65
722
418
8
84
1,232
(618)
614
ANNUAL REPORT 2015 > 59
Notes To The Financial Statements
For the year ended 30 June 2015
Note 17: Taxes (continued)
c) Reconciliations
i. Gross Movements
The overall movement in the deferred tax account is
as follows:
Opening balance
Credit/(Charge) to statement of comprehensive income
Credit/(Charge) to equity
Closing Balance
ii. Deferred Tax Liability
The movement in deferred tax liability for each
temporary difference during the year is as follows:
Tax allowances relating to property, plant & equipment
Opening balance
Transfer to deferred tax asset
Credit/(Charge) to statement of comprehensive income
Closing balance
Property revaluation adjustments taken direct to equity
Opening balance
Net revaluations during current period taken direct equity
Net revaluation during current period charged to statement of
comprehensive income
Closing balance
Other
Opening balance
Credit/(charge) to statement of comprehensive income
Closing balance
iii. Deferred Tax Assets
The movement in deferred tax liability for each
temporary difference during the year is as follows:
Provisions
Opening balance
Credit/(Charge) to statement of comprehensive income
Closing balance
Income tax losses
Opening balance
Credit/(Charge) to statement of comprehensive income
Credit/(Charge) to equity
Closing balance
Capital tax losses
Opening balance
Credit/(charge) to statement of comprehensive income
Closing balance
Tax allowances relating to
Property plant & equipment
Opening balance
Transfer from deferred tax liability
Credit/(Charge) to statement of comprehensive income
Closing balance
Other
Opening balance
Credit/(charge) to statement of comprehensive income
Closing balance
60 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Consolidated Group
2015
$000
2014
$000
(910)
(560)
440
(1,030)
1,466
(38)
424
1,852
674
250
-
924
2
(149)
(147)
722
25
747
400
(351)
10
59
18
-
18
8
38
659
705
84
(14)
70
(361)
(443)
(106)
(910)
1,071
-
395
1,466
578
96
-
674
2
-
2
723
(1)
722
454
(43)
(11)
400
18
-
18
13
-
(5)
8
81
3
84
Notes To The Financial Statements
For the year ended 30 June 2015
Note 17: Taxes (continued)
d) Deferred tax assets not brought to account the benefits of
which can only be realised in if the conditions for
deductibility set out in note 1e occur - tax losses
- Operating losses
Note 18: Short-term provisions
Employee Benefits (see note 1g)
Opening Balance
Additional provisions
Amounts used
Closing Balance
NON-CURRENT LIABILITIES
Note 19: Borrowings
Bank loans
Hire purchase creditors
Unexpired interest
Lease liability
Consolidated Group
2015
$000
2014
$000
6,400
6,400
1,492
880
(714)
1,658
9,816
285
(12)
122
10,211
5,930
5,930
1,510
778
(796)
1,492
23,008
-
-
272
23,280
Bank loans of the group are secured by a first ranking and registered fixed and floating debenture charge over the assets
of the parent entity, and registered mortgages over freehold land and buildings and guarantees and indemnities from
subsidiaries. Bank loan amount of $9,816,000 relates to a subsidiary and bears interest at 4.80%-5.10% repayable by
monthly instalments with maturity dates of December 2021 and June 2031.
Note 20: Long-term provisions
Employee Benefits (see note 1g)
Opening balance
Additional provisions
Amounts used
Closing balance
a) Aggregate employee entitlement liability
b) Number of employees at year end
189
(11)
-
178
1,836
566
165
24
-
189
1,681
532
ANNUAL REPORT 2015 > 61
Notes To The Financial Statements
For the year ended 30 June 2015
Note 21: Issued capital
35,631,113 ordinary shares fully paid at
beginning of the year (2014: 34,731,886)
On 15 December 2014, 627,977 shares were issued
at $1.05 each under the Waterco Ltd DRP
On 16 December 2013, 337,412 shares were issued
at $1.19 each under the Waterco Ltd DRP
On 16 June 2014, 561,815 shares were issued
at $1.14 each under the Waterco Ltd DRP
Employee Share Plans loan repayments [see note 36(1)]
36,259,090 ordinary shares fully paid at the end of
the year (2014: 35,631,113)
Consolidated Group
2015
$000
2014
$000
37,430
36,380
659
-
-
53
-
402
640
8
38,142
37,430
The company has authorised share capital amounting to 200,000,000 ordinary shares of 50 cents each. Ordinary
shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number
of shares held. At the shareholders meetings, each ordinary share is entitled to one vote when a poll is called,
otherwise each shareholder has one vote on a show of hands.
Capital Management
Management controls the capital of the group in order to maintain a good debt to equity ratio, provide the
shareholders with adequate returns and ensure that the group can fund its operations and continue as a going
concern.
The group’s debt and capital includes ordinary share capital and financial liabilities supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the group’s capital by assessing the group’s financial risks and adjusting
its capital structure in response to changes in these risks and in the market. These responses include the
management of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the group since the
prior year. This strategy is to ensure that the group’s gearing ratio remains between 30% and 70%. The gearing
ratio’s for the year ended 30 June 2015 and 30 June 2014 are as follows:
Consolidated Group
2015
$000
25,629
(3,771)
21,858
56,053
77,911
39%
2014
$000
27,661
(1,588)
26,073
50,599
76,672
52%
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio
62 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
Note 22: Reserves
a) Capital profits
The capital profits reserve relates to non taxable
profits on sale of property.
b) Foreign currency translation
The foreign currency translation reserve records
exchange differences on translation of foreign
controlled subsidiaries
c) Asset revaluation reserve
Balance at the beginning of the year
Net revaluation (decrement)/ increment on revaluation of
land and buildings
Balance at the end of the year
The asset revaluation reserve records the revaluation of
non-current assets
d) Share options reserve
Balance at the beginning of the year
Share option increment
Balance at the end of the year
The share options reserve records the
cost of the share option plan
Note 23: Retained earnings
Opening retained earnings
Net profit attributable to the members of the parent entity
Dividends paid
Closing retained earnings
Note 24: Lease and hire purchase commitments
Finance leases
Lease expenditure contracted and provided for:
not later than one year
later than one year but not later than five years
Total minimum lease commitments
Less: future finance charges
Lease liability
Current portion
Non-current portion
Hire Purchase commitments
HP Expenditure contracted and provided for:
not later than one year
later than one year but not later than five years
Total minimum hp commitments
Future interest charges
Hire purchase creditors
Current portion
Non-current portion
Note
No
28
16
19
16
19
Consolidated Group
2015
$000
211
2014
$000
211
(3,809)
(9,070)
12,085
(1,002)
11,083
20
-
20
7,505
9,533
1,485
(1,069)
9,949
231
125
356
(13)
343
221
122
343
169
285
454
(29)
425
152
273
425
6,834
5,251
12,085
20
-
20
3,246
11,067
907
(2,441)
9,533
182
281
463
(23)
440
168
272
440
-
-
-
-
-
-
-
Finance leases and hire purchase agreements of 3 or 4 years are taken out on motor vehicles, forklifts and IT equipment
with an option to purchase the asset at the end of the lease term at a residual of 30% to 45% depending on the asset.
ANNUAL REPORT 2015 > 63
Notes To The Financial Statements
For the year ended 30 June 2015
Consolidated Group
Note 24: Lease commitments (continued)
Operating lease payable:
Non-cancellable operating leases contracted but not capitalised in the
financial statements
not later than one year
later than one year but not later than five years
Note 25: Contingent Liabilities
Estimate of the maximum amount of contingent
liabilities that may become payable
Guarantee provided to a bank on behalf of a subsidiary
Guarantees of leases of premises subleased to franchisees
Note 26: Related Parties
(A) Transactions with director related parties
(i) Sales made to Asiapools (M) Sdn Bhd. Mr S S Goh, a shareholder
has significant influence over Asiapools(M)Sdn Bhd.
(ii) Payments made to Mint Holdings Pty Ltd for rental of
warehouses and offices.
Mr S S Goh is a director and shareholder of Mint Holdings Pty Ltd.
2015
$000
2,110
1,292
3,402
3,220
5,187
8,407
197
712
2014
$000
2,052
3,103
5,155
3,195
5,514
8,709
174
688
64 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
Note 27: Operating Segments
Segment assets
Where an asset is used across multiple segments,
the asset is allocated to the segment that receives
the majority of the economic value from the asset. In
the majority of instances, segment assets are clearly
identifiable on the basis of their nature and physical
location.
Segment liabilities
Liabilities are allocated to segments where is a direct
nexus between the incurrence of the liability and the
operations of the segment.
Unallocated items
The following items of revenue, expenses, assets
and liabilities are not allocated to operating segments
as they are not considered part of the core operations
of any segment:
– other revenues
Segment Information
Identification of reportable segments
The group has identified its operating segments based
on the internal reports that are reviewed and used
by the board of directors (chief operating decision
makers) in assessing performance and determining
the allocation of resources.
The group is managed primarily on the basis of location
since the group’s operations have similar risk profiles
and performance criteria. Operating segments are
therefore determined on the same basis.
The group operates predominantly in one industry
being the manufacture and wholesale of swimming
pool chemicals, accessories and equipment,
manufacture and sale of solar pool heating systems
and as a franchisor of swimming pool outlets retailing
swimming pool accessories and equipment.
Basis of accounting for the purposes of reporting
by operating segments
Accounting Policies Adopted
Unless stated otherwise, all amounts reported to
the Board of Directors as the chief decision maker
with respect to operating segments are determined
in accordance with accounting policies that are
consistent to those adopted in the annual financial
statements of the Group.
Inter-segment transactions
An internally determined transfer price is set for all
inter-entity sales. The price is reviewed annually
(unless special circumstances arise) and is based
on what would be realised in the event the sale was
made to an external party at arm’s length under the
same terms and conditions. All such transactions are
eliminated on consolidation for the Group’s financial
statements.
Corporate charges are allocated
reporting
segments based on the services provided to those
reporting segments.
to
Inter-segment loans payable and receivable are
initially recognised at the consideration received net
of transaction costs. If inter-segment loans receivable
and payable are not on commercial terms, these are
not adjusted to fair valued based on market interest
rates.
ANNUAL REPORT 2015 > 65
Notes To The Financial Statements
For the year ended 30 June 2015
Note 27: Operating Segments (continued)
Geographical Segments
AUSTRALIA &
NEW ZEALAND
$000
52,565
1,213
53,778
2015
ASIA
$000
10,773
25,948
36,721
NORTH
AMERICA &
EUROPE
CONSOLIDATED
GROUP
$000
$000
17,548
4,269
21,817
80,886
31,430
112,316
7,285
(31,430)
88,171
10,212
1,112
(992)
10,332
(7,285)
3,047
72,473
50,495
(10,313)
112,655
806
26,501
1,224
24,410
325
6,552
(15,378)
97,277
2,355
57,463
(16,239)
41,224
REVENUE
Sales to customers outside the
consolidated group
Intersegment sales
Total segment revenue
Reconciliation of segment
revenue to group revenue
Other revenue
Intersegment elimination
Total group revenue
Segment net profit/(loss) from
continuing operations before tax
Reconciliation of segment result to
group net profit/loss before tax
Unallocated items
- other
Net profit before tax from
continuing operations
Segment assets
Segment asset increases for
the period
Reconciliation of segment
assets to group assets
Intersegment eliminations
Total group assets
Capital expenditure
Segment liabilities
Reconciliation of segment liabilities
to group liabilities
Intersegment eliminations
Total group liabilities
66 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
Note 27: Operating Segments (continued)
Geographical Segments
AUSTRALIA &
NEW ZEALAND
$000
51,528
1,229
52,757
2014
ASIA
$000
9,708
21,954
31,662
NORTH
AMERICA &
EUROPE
CONSOLIDATED
GROUP
$000
$000
15,882
8,049
23,931
77,118
31,232
108,350
853
(31,232)
77,971
2,942
1,747
(1,908)
2,781
(853)
1,928
72,106
43,494
(11,317)
104,283
441
27,645
662
22,308
155
2,032
(11,307)
92,976
1,258
51,985
(9,608)
42,377
REVENUE
Sales to customers outside the
consolidated group
Intersegment sales
Total segment revenue
Reconciliation of segment
revenue to group revenue
Other revenue
Intersegment elimination
Total group revenue
Segment net profit/(loss) from
continuing operations before tax
Reconciliation of segment result to
group net profit/loss before tax
Unallocated items
- other
Net profit before tax from
continuing operations
Segment assets
Segment asset increases for
the period
Reconciliation of segment assets
to group assets
Intersegment eliminations
Total group assets
Capital expenditure
Segment liabilities
Reconciliation of segment liabilities
to group liabilities
Intersegment eliminations
Total group liabilities
ANNUAL REPORT 2015 > 67
Notes To The Financial Statements
For the year ended 30 June 2015
Note 28: Dividends Paid or Proposed
Final fully franked ordinary dividend of 3c per share (2014:4c)
franked at the tax rate of 30% paid
Interim fully franked ordinary dividend of nil per share (2014:3c)
franked at the tax rate of 30% paid
Proposed final fully franked ordinary dividend of 5c per share
(2014 3c) franked at the tax rate of 30%
Consolidated Group
2015
$000
1,069
-
1,069
1,813
2014
$000
1,389
1,052
2,441
1,069
Balance of franking account at year end adjusted for franking credits
arising from payment of income tax payable, payment of proposed
dividends and franking credits not available for distribution.
3,241
1,878
Note 29: Earnings Per Share
Reconciliation of Earnings to Net Profit
Net Profit
Net Profit attributable to outside equity interest
Earnings used in the calculation of basic EPS
Earnings used in the calculation of diluted EPS
a) Weighted average number of ordinary shares outstanding during
the year used in calculation of basic EPS
b) Weighted average number of ordinary shares outstanding during
the year used in calculation of diluted EPS
Note 30: Events Subsequent to Reporting Date
There were no reportable events subsequent to balance date.
1,552
67
1,485
1,485
35,972
35,972
974
67
907
907
34,937
34,937
68 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
Note 31: Financial Risk Management
The Audit Committee (AC) has been delegated
responsibility by the Board of Directors for, amongst
other issues, monitoring and managing financial risk
exposures of the Group. The AC monitors the Group’s
financial risk management policies and exposures and
approves financial transactions within the scope of its
authority. It also reviews the effectiveness of internal
controls relating to commodity price risk, counter
party credit risk, currency risk, financing risk and
interest rate risk. The AC meets on a bi-monthly basis
and minutes of the AC are reviewed by the Board.
The AC’s overall risk management strategy seeks to
assist the consolidated group in meeting its financial
targets, while minimising potential adverse effects
on financial performance. Its functions include the
review of the use of hedging derivative instruments,
credit risk policies and future cash flow requirements.
The main risks the group is exposed to through its
financial instruments are interest rate risk, credit risk,
foreign currency risk, liquidity risk and price risk.
(a) Interest Rate Risk
The consolidated group’s exposure to interest rate
risk, which is the risk that a financial instrument’s
value will fluctuate as a result of changes in market
interest rates and the effective weighted average
interest rates on classes of financial assets and
liabilities.
(b) Credit Risk
The maximum exposure to credit risk, excluding
the value of any collateral or other security, at
balance date to recognised financial assets is the
carrying amount, net of any provisions for doubtful
debts, as disclosed in the statement of financial
position and notes to the financial statements.
Credit risk is managed through maintenance of
procedures in relation to approval, granting and
renewal of credit limits, regular monitoring of
exposures against such limits and the monitoring
of the financial stability of significant customers.
Such monitoring is used in assessing receivables
for impairment. Depending on the subsidiary,
credit terms are generally 30 days from invoice
month.
Credit risk for derivative financial instruments
arises from the potential failure by counter parties
to the contract to meet their obligations. The credit
risk exposure to forward exchange contracts and
interest rate swaps is the net fair value of these
contracts as disclosed in (c).
The Group has no single concentration of credit
risk with any single debtor or group of debtors.
However, on a geographical basis, the group
has significant credit exposure to Australia/
New Zealand and Canada given the substantial
operations in those regions.
Trade and other receivables that are neither past
due or impaired are considered to be of high
credit quality. Aggregates of such amounts are as
detailed in Note 9.
(c) Foreign Currency Risk
The parent entity is exposed to fluctuations
in foreign currencies arising from the sale and
purchase of goods in currencies other than the
group’s measurement currency.
The parent entity has forward contracts in place
at balance date relating to highly probable forecast
transactions. There are no forward contracts
taken out by any other member in the group
These contracts commit the group to buy and sell
specified amounts of foreign currencies in the
future at specified exchange rates.
Contracts are taken out with terms that reflect the
underlying settlement terms of the commitment
to the maximum extent possible so that hedge
ineffectiveness is minimised.
The following table summarises the notional
(and parent entity)
amounts of
commitments in relation to forward exchange
contracts.
the Group
Notional Amounts
2015
$000
2014
$000
Average Exchange Rate
2014
2015
$000
$000
Consolidated Group (and Parent Entity)
Buy USD/Sell AUD
- Less than 6 months
1,800
1,000
0.79414
0.92215
ANNUAL REPORT 2015 > 69
Notes To The Financial Statements
For the year ended 30 June 2015
Note 31: Financial Risk Management (continued)
d) Liquidity Risk
The group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised
borrowing facilities are maintained.
Financial liability and financial asset maturity analysis
Consolidated Group
Within 1 Year
1 to 5 Years
Over 5 years
Total
2015
$000
2014
$000
2015
$000
2014
$000
2015
$000
2014
$000
2015
$000
2014
$000
Financial Assets
Cash
Receivables
Total anticipated
inflows
Financial Liabilities
Bank overdraft
Bank loans
Trade and other
payable
Hire purchase
creditors
Lease Liabilities
Total contractual
outflows
Less bank overdrafts
Total expected
outflows
Net (outflow) on
financial
instruments
3,771
16,735
1,588
11,816
20,506
13,404
-
-
-
-
-
-
-
14,538
-
2,556
507
9,816
1,656
23,008
12,139
11,347
152
221
-
168
-
273
122
-
-
272
27,050
-
14,071
-
10,718
(507)
24,936
(1,656)
27,050
14,071
10,211
23,280
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,771
16,735
1,588
11,816
20,506
13,404
507
24,354
1,656
25,564
12,139
11,347
425
343
-
440
37,768
(507)
39,007
(1,656)
37,261
37,351
(6,544)
(667)
(10,211)
(23,280)
-
-
(16,755)
(23,947)
70 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
Note 31: Financial Risk Management (continued)
e) Price Risk
Price risk relates to the risk that the fair value or future cashflows of a financial instrument will fluctuate
because of changes in market prices largely due to demand and supply factors for commodities.
Net Fair Values
The net fair value of bank overdrafts, bank loans and lease liabilities is determined by discounting the cash flows,
at market interest rates of similar borrowings, to their present value. Their net fair value is adjusted for any costs
involved in settling the instrument.
Financial Liabilities
Bank overdraft
Bank loans
Hire purchase creditors
Lease liabilities
2015
2014
Carrying
Amount
$000
Net Fair
Value
$000
Carrying
Amount
$000
Net Fair
Value
$000
507
24,354
425
343
25,629
512
24,598
447
360
25,917
1,656
25,564
-
440
27,660
1,672
25,820
-
463
27,955
For financial assets and other liabilities, the net fair value approximates their carrying value. Financial assets
where the carrying amount exceeds the net fair values have not been written down as the consolidated group
intends to hold these assets to maturity.
Sensitivity Analysis
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates and exchange
rates. The table indicates the impact on how profit and equity values reported at balance date would have been
affected by changes in the relevant risk variable that management considers to be reasonably possible. The
sensitivity assumes the movement in a particular variable is independent to other variables.
Year ended 30 June 2015
+/- 2% in interest rates
+/- 5% in $A/$US
Year ended 30 June 2014
+/- 2% in interest rates
+/- 5% in $A/$US
Consolidated Group
Profit
$000
+/-614
+/-1,037
Equity
$000
+/-614
+/-1,037
+/-520
+/-751
+/-520
+/-751
ANNUAL REPORT 2015 > 71
Any ordinary shares issued during the year under
this plan are shown in the statement of financial
position as issued capital. Any residual loan
amounts written off are expensed during the year.
During the year no shares were issued under this
plan while debts of $52,685 (2014: $7,848) were
repaid. At reporting date, the balance of the debt
receivable is nil (2014:$52,685).
The closing share market price of an ordinary
share of Waterco Limited on the Australian Stock
Exchange at 30 June 2015 was $1.00 (30 June
2014 $1.15).
Notes To The Financial Statements
For the year ended 30 June 2015
Note 32: Employee Benefits
Employee Share Plans
The following is a summary of the existing employee
share plans.
1) Waterco Employee Share Plan
The plan was approved by shareholders at the
1996 Annual General Meeting.
Its objective is to encourage full-time and part-
time employees of the Waterco Group to acquire
ordinary shares in the company in order to promote
the long term success of the company as a goal
shared by the employees.
All full-time and part-time employees are invited
by the Board to subscribe for ordinary shares in
the company at the market price at the time of
invitation (being the weighted average price over
the 3 preceding trading days on ASX subject to
adjustment by the board if it believes the price
is distorted) but not less than twenty cents The
company may extend an interest free loan to
acquire the shares which is repayable within ten
years or immediately if the employee leaves the
company. The security given for the loan is the
pledge of the shares and a charge over any benefits
generated by those shares including dividends and
bonus shares etc. The proceeds of these benefits
are used to reduce the borrower’s indebtedness to
the company.
The loans are limited recourse loans meaning that
if the shares are sold and the proceeds are not
sufficient to meet the loan balance outstanding,
the company cannot recover the difference from
the borrower. During the year, $nil (2014: $nil) in
loan balances were written off.
72 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
Note 33: Cash Flow Information
a) Reconciliation of cash flows from operations with profit
after income tax.
Profit after income tax
Non-cash flows in profit
Depreciation
Impairment/Amortisation
(Profit)/Loss on sale of non current assets
Impairment loss
Changes in Assets and Liabilities:-
Trade debtors
Provision for doubtful debts
Other debtors
Inventories
Prepayments
Deferred tax assets
Expenditure carried forward
Trade creditors
Other creditors
Provision for employee benefits
Provision for tax
Provision for deferred tax
Cashflow – Non Operating Activities:
Dividends Received
Cash Flows provided by operations
b) Non Cash Financial and investment activities
Consolidated Group
2015
$000
2014
$000
1,552
2,414
22
(34)
3,753
(1,240)
24
(470)
(143)
(119)
(367)
27
82
588
155
344
916
0
7,504
974
2,399
19
2
-
(1,326)
(56)
(584)
(2,456)
135
58
61
1,363
472
6
(427)
86
0
726
1) Property, Plant and Equipment
During the year, the consolidated group acquired plant and equipment with an aggregate fair value of $78,213
(2014:$190,752) by means of finance leases and $431,430 by means of hire purchase agreements. These acquisitions
are not reflected in the statement of cash flows.
c) Financing Facilities
The following lines of credit were available at balance date:
Fully Drawn Advance Facilities
Master lease facilities
Amount utilised
Amount unutilised
34,233
582
34,815
24,963
9,852
32,863
826
33,689
(27,665)
6,024
The Fully Drawn Advance Facilities of the parent entity are due to expire on 31 July 2016 (refer to note 16). The parent
entity expects to renew these facilities on expiry date.
The Fully Drawn Advance Facilities of the controlled entity are due to expire on 31 December 2021 and
30 June 2031.The controlled entity expects to renew these facilities on expiry date.
ANNUAL REPORT 2015 > 73
Valuation techniques
The Group selects a valuation technique that is
appropriate in the circumstances and for which
sufficient data is available to measure fair value. The
availability of sufficient and relevant data primarily
depends on the specific characteristics of the asset
or liability being measured.The evaluation techniques
selected by the Group are consistent with one or
more of the following valuation approaches:
– Market approach: valuation techniques that use
prices and other relevant information generated by
market transactions for identical or similar assets
or liabilities.
–
Income approach: valuation
that
convert estimated future cash flows or income
and expenses into a single discounted present
value.
techniques
– Cost approach: valuation techniques that reflect
the current replacement cost of an asset at its
current service capacity.
Each valuation technique requires inputs that
reflect the assumptions that buyers and sellers
would use when pricing the asset or liability,
risks. When
including assumptions about
selecting a valuation technique, the Group gives
priority to those techniques that maximise the
use of observable inputs and minimise the use of
unobservable inputs. Inputs that are developed
using market data (such as publicly available
information on actual transactions) and reflect
the assumptions that buyers and sellers would
generally use when pricing the asset or liability
are considered observable, whereas inputs for
which market data is not available and therefore
are developed using
information
available about such assumptions are considered
unobservable.
the best
Notes To The Financial Statements
For the year ended 30 June 2015
Note 34: Fair Value Measurements
The Group measures and recognises the following
assets and liabilities at fair value on a recurring basis
after initial recognition:
– derivative financial instruments;
– freehold land and buildings;
The Group subsequently measures some items of
freehold land and buildings at fair value on a non
recurring basis.
The Group does not subsequently measure any
liabilities at fair value on a non-recurring basis.
a) Fair Value Hierarchy
AASB 13: Fair Value Measurement requires the
disclosure of fair value information by level of the
fair value hierarchy, which categorises fair value
measurements into one of three possible levels
based on the lowest level that an input that is
significant to the measurement can be categorised
into as follows:
Level 1
Level 2
Level 3
Measurements
based on
unobservable
inputs for
the asset or
liability.
Measurements
based on
quoted prices
(unadjusted) in
active markets
for identical
assets or
liabilities that
the entity can
access at the
measurement
date.
Measurements
based on
inputs other
than quoted
prices included
in Level 1 that
are observable
for the asset or
liability, either
directly or
indirectly.
The fair values of assets and liabilities that are not
traded in an active market are determined using
one or more valuation techniques. These valuation
techniques maximise, to the extent possible, the
use of observable market data. If all significant inputs
required to measure fair value are observable, the
asset or liability is included in Level 2. If one or more
significant inputs are not based on observable market
data, the asset or liability is included in Level 3.
74 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
Note 34: Fair Value Measurements (continued)
The following tables provide the fair values of the Group’s assets and liabilities measured and recognised on a
recurring basis after initial recognition and their categorisation within the fair value hierarchy:
Note
No
Level 1
$000
30 June 2015
Level 2
$000
Level 3
$000
Total
$000
Recurring fair value measurements
Financial assets
Derivatives held for hedging:
– forward exchange contracts
Total financial assets recognised at
fair value on a recurring basis
Non-financial assets
Freehold land
Freehold buildings
Total non-financial assets recognised
at fair value on a recurring basis
Total non-financial assets recognised
at fair value
31
13
13
-
-
-
-
-
-
2,267
2,267
13,834
16,327
30,161
30,161
-
-
-
-
-
-
2,267
2,267
13,834
16,327
30,161
30,161
Note
Level 1
$000
30 June 2014
Level 2
$000
Level 3
$000
Total
$000
Recurring fair value measurements
Financial assets
Derivatives held for hedging:
– forward exchange contracts
Financial assets at fair value through
profit or loss:
Total financial assets recognised at
fair value
Non-financial assets
Freehold land
Freehold buildings
Total non-financial assets recognised
at fair value
31
13
13
-
-
-
-
-
1,084
1,084
13,327
20,039
33,366
-
-
-
-
-
1,084
1,084
13,327
20,039
33,366
ANNUAL REPORT 2015 > 75
Notes To The Financial Statements
For the year ended 30 June 2015
Note 34: Fair Value Measurements (continued)
b. Valuation Techniques and Inputs Used to Measure Level 2 Fair Values
Description
Fair Value at 30 June
2015
Valuation Technique(s)
Inputs Used
Financial assets
Forward exchange contracts
Non-financial assets
Freehold land(i)
$000
2,267
2,267
13,834
Freehold buildings(i)
16,327
30,161
Income approach using
discounted cash flow
methodology
Current forward exchange
rates applicable to
remaining life of contract
Price per hectare; market
borrowing rate
Price per square metre;
market borrowing rate
Market approach using
recent observable market
data for similar properties;
income approach using
discounted cash flow
methodology
Market approach using
recent observable market
data for similar properties;
income approach using
discounted cash flow
methodology
(i) The fair value of freehold land and buildings is determined at least every three years based on valuations
by an independent valuer. At the end of each intervening period, the directors review the independent
valuation and, when appropriate, update the fair value measurement to reflect current market conditions
using a range of valuation techniques, including recent observable market data and discounted cash flow
methodologies.
There were no changes during the period in the valuation techniques used by the Group to determine Level
2 fair values.
c. Disclosed Fair Value Measurements
The following assets and liabilities are not measured at fair value in the statement of financial position, but
their fair values are disclosed in the notes:
– lease liability;
– bank debt;
76 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Notes To The Financial Statements
For the year ended 30 June 2015
Note 34: Fair Value Measurements (continued)
The following table provides the level of the fair value hierarchy within which the disclosed fair value measurements
are categorised in their entirety and a description of the valuation technique(s) and inputs used:
Description
Assets
Liabilities
Lease liability
Bank debt
Note
Fair Value
Hierarchy Level
Valuation Technique(s)
Inputs Used
31
31
2
2
Income approach using
discounted cash flow
methodology
Current commercial
borrowing rates for similar
instruments
Income approach using
discounted cash flow
methodology
Current commercial
borrowing rates for similar
instruments
There has been no change in the valuation technique(s) used to calculate the fair values disclosed in the notes
to the financial statements.
Note 35: Company Details
The registered office of the company is:
Waterco Limited
36 South Street
Rydalmere NSW 2116
ANNUAL REPORT 2015 > 77
Directors' Declaration
In accordance with a resolution of the directors
of Waterco Limited, the directors of the company
declare that:
1. the financial statements and notes, as set out
on pages 34 to 77 are in accordance with the
Corporations Act 2001 and:
Australian
Accounting
a. comply with
Standards, which, as stated in accounting
policy Note 1 to the financial statements,
constitutes compliance with
International
Financial Reporting Standards (IFRS); and
b. give a true and fair view of the financial
position as at 30 June 2015 and of the
performance for the year ended on that date of
the consolidated group;
2. in the directors’ opinion there are reasonable
grounds to believe that the company will be able
to pay its debts as and when they become due and
payable; and
3. the directors have been given the declarations
required by s295A of the Corporations Act 2001
from the Chief Executive Officer and Chief
Financial Officer.
Soon Sinn Goh
Chief Executive Officer
Dated at Sydney this 21 September 2015
78 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Independent Auditor's Report to the members of Waterco Ltd
ANNUAL REPORT 2015 > 79
Independent Auditor's Report to the members of Waterco Ltd
80 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
Shareholder Information
For the year ended 30 June 2015
(a) Distribution of Shareholders as at 14 September 2015
Range
-
-
-
-
-
1,000
5,000
10,000
100,000
and over
1
1,001
5,001
10,001
100,001
Total Holders
263
267
88
110
32
760
Options
-
-
-
-
-
(b) Marketable Parcel
49 shareholders hold less than a marketable parcel.
(c) Substantial Shareholders
The following information is extracted from the company’s register as at 21 September 2015:
Name
S S Goh Group
Redbrook Nominees Pty Ltd
Acres Holdings Pty Ltd
(d) Voting Rights
Number of shares
20,046,612
2,763,631
2,114,136
For all shares, voting rights are one vote per member on a show of hands and one vote
per share on a poll.
(e) Twenty Largest Shareholders
The twenty largest shareholders hold 85.24% of the total shares issued.
Name
Leitch Pty Ltd (Leitch Super Fund A/C)
Redbrook Nominees Pty Ltd
Acres Holdings Pty Ltd
Goh Lai Huat & Sons Sdn Bhd
1 Mr Soon Sinn Goh
2
3
4
5 Mr Soon Leong Goh
6 Mr Swee Kheong Goon
7 Mrs Christine Goh
8
9 Mrs Janet Swee Nyet Goh
10 Mr Chu Shien Chang
11 Mr Benjamin Francis Hunt (B F Hunt Super Fund A/C)
12
13
14
15
16
17 Mr Tiow Lip Lee
18 Ms May-Yin Goh
19 Mr Bryan Weng Keong Goh
20 Mr Shane Goh
TOTAL
GWK Corporation Pty Ltd
Deuteronomy Pty Ltd (Dennis Hambleton SF A/C)
GSS Holdings Sdn Bhd
Brazil Enterprises Pty Ltd
S G Corporation Pty Limited
Number of shares
17,357,008
2,772,349
2,646,983
2,500,000
577,022
562,717
500,000
483,001
447,112
340,281
339,549
334,170
310,070
300,000
295,173
281,739
245,386
225,267
200,734
188,607
30,907,168
%
47.87
7.65
7.30
6.89
1.59
1.55
1.38
1.33
1.23
0.94
0.94
0.92
0.86
0.83
0.81
0.78
0.68
0.62
0.55
0.52
85.24
(f) Stock Exchange Listing
The shares of Waterco Limited are listed on the Australian Stock Exchange under the trade symbol WAT.
ANNUAL REPORT 2015 > 81
Corporate Directory
Directors
Soon Sinn Goh
Bryan Goh
Garry Norman
Ben Hunt
Richard Ling
Secretaries
Bee Hong Leo
Gerard Doumit
Registered office
36 South Street, Rydalmere NSW 2116
Tel: + 61 2 9898 8600
Fax: + 61 2 9898 1877
Website: www.waterco.com
E-mail: administration@waterco.com
Share Registry
Computershare Investor Services Pty Ltd
GPO Box 2975, Melbourne VIC 3000
Tel: 1300 85 05 05
Offices – Australia
NSW
36 South Street, Rydalmere NSW 2116
Unit 7, 2-8 South Street, Rydalmere NSW 2116
Tel: + 61 2 9898 8600
QLD
77 Nealdon Drive, Meadowbrook QLD 4131
Postal Address: PO Box 606
Springwood QLD 4127
Tel: + 61 7 3299 9999
VIC
Unit 1, 6 Samantha Court, Knoxfield Vic 3180
Tel: + 61 3 9764 1211
WA
2 Stretton Place, Balcatta WA 6021
Tel: + 61 8 9273 1900
SA
580 Torrens Road, Woodville North SA 5012
Tel: + 61 8 8244 6000
Auditors
RSM Bird Cameron Partners Level 12,
60 Castlereagh St Sydney, NSW 2000
Banker
HSBC Bank Australia Limited
HSBC Centre
580 George St
Sydney, NSW 2000
Offices – International
Canada
2645 East, Jacques-Cartier Blvd., Longueuil,
Qc, Canada, J4N 1L7
Tel: +1 450 748 1421
China
No.132 Buling Road, Yonghe District, GETDD
Guangzhou 511356, PR China
Tel: + 86 20 3222 2180
France
Parc d’Activite Entrimmo
3 Rue Paul Rieupeyroux
69800 Saint Priest, France
Tel: + 33 4 72 79 33 31
Indonesia
Inkopal Plaza Kelapa Gading
Blok B No. 31-32
Jl. Raya Boulevard Barat Jakarta 14240,
Indonesia Tel: + 62 21 45851481
Malaysia
Lot 832, Jalan Kusta
Kawasan Perindustrian SB Jaya
47000 Sungai Buloh, Selangor Darul Ehsan
Tel: + 60 3 6145 6000
New Zealand
7 Industry Road, Penrose,
1061 Auckland, New Zealand
Tel: + 64 9 525 7570
Singapore
24 Peck Seah Street
#05-02/04 Nehsons Building
Singapore 079314
Tel: + 65 6344 2378
United Kingdom
Radfield, London Road, Teynham Sittingbourne,
Kent, ME9 9PS, UK Tel: + 44 1795 521733
United States Of America
1864 Tobacco Rd Augusta, GA 30906, USA
Tel: + 1 706 793 7291
82 < WATERCO LIMITED ABN 62 002 070 733 And Controlled Entities
ANNUAL REPORT 2015 > 83
WATERCO LIMITED
ABN 62 002 070 733
Registered Office:
36 South Street, Rydalmere NSW 2116.
Tel
Fax
Website : www.waterco.com
Email
: +61 2 9898 8600
: +61 2 9898 1877
: administration@waterco.com
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