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\! S\ !; / \ i/ / / C 3388 CSR Limited Annual Report 1975 CSR Limited Incorporated in New South Wales Annual Report for the year ended March 31 1975 To be presented to the Annual General Meeting of Members to be held at St James' Hall, 171 Phillip Street, Sydney, on July 16 1975, at 11.30 a.m. Content* 1 Results in outline 2 Directors and general management 3 Directors' report 6 Main production units 7 Review of operations 11 Financial and statutory reports 31 Review of operations (continued) 36 The Australian Estates Company Limited 36 People and organisation 40 Looking to the future 5oy "We began in sugar but grew to become a diversified company. We are growing and the mix of the business is changing because our people have energy and enthusiasm and are not afraid of change ... . In a world of rapid change we seek to be responsive to change; to justify our place in society in terms of present values rather than the values of the past... CSR is in good shape to keep in the mainstream of Australia's growth. CSR is essentially Australian; we have a sensitivity to the values of the society of which we are a part; we have momentum as well as direction and purpose ..." R G Jackson. General Manager of CSR Limited, at a meeting of financial institutions in London on January 24 1974, RESULTS IN OUTLINE CSR Limited and subsidiaries Year ended Marcn 31 Gross sales `including sugar sales made as agent and total sales of subsidiaries) Group sales (including sugar sales only to the extern ot group equity and total sales ot suOsidiaries) Protit before tax (before extraordinary items) Profit after tax (before extraordinary items) Oividend* 1971 Sm 432.4 1972 Sm 565.8 1973 Sm 676.2 1974 Sm 692.4 1975 75 on 74 Sm % change 1197.3 73 315.0 33.1 20.1 10.4 349.2 39.5 20.5 10.4 375.6 42.7 23.3 11.5 414.5 63.9 28.8 12.6 559.2 76.5 36.8 15.1 35 20 28 20 Issued capital at end of year ($1.00 par value) CSR shareholders' funds Minority shareholders' funds Total assets Long-term debt (repayable beyond 12 months) 74.3 252.7 29.1 643.2 122.5 74.5 258.0 39.3 736.4 121.6 83.8 271.4 50.3 747.0 135.5 84.1 355.7 62.0 750.7 153.2 100.9 364.8 63.3 906.1 148.6 20 3 2 21 -3 Equity issues to shareholders Return on CSR shareholders' funds Earnings per share (at end ot year) Oividend* per share (at end of year) Oividend cover Hat tangible assets per CSR share (future tax benefits and deterred tax provisions treated as intangibles) Gearing (long-term debt to total shareholders' funds plus long-term debt) -- 8.0% 27.1c 14.0c 1.9x -- 8.0% 27.6c 14.0c 2.Ox 1-for-8 bonus 8.6% 27.9c 14.5c 2.Ox -- 8.1% 34.2c 15.0c 2.3x l-for-S bonus 10.1% 36.5c 15.0c 2.4x S3.46 S3.60 S3.41 S4.61 $4.07 30.3% 29.0% 29.6% 26.8% 25.8% Because ot accounting changes in 1974, attar-tax profits shown above are less than it calculated on present methods by approxi mately S2.Sm in 1971, Jt.Sm in 1972 and Sl.Om in 1973. Assets tor those years are before depreciation. Throughout this report figures for the CSR group do not include anything in respect ot The Australian Estates Company Limited, which will be consolidated with effect from April 1 1975. C 3790 SIGNIFICANT EVENTS Export sugar prices reached a record peak. Iron ore and coal prices improved. Adverse economic conditions within Australia seriously affected many products, particularly build ing and construction materials and chemicals. CSR acquired the overseas-owned The Australian Estates Company Limited. The company's investment in Home Units Australia was written off. 1 DIRECTORS Sir John Ounlop Chairman Sir Gregory Kater Sir James Vernon T J N Foley R G Jackson Sir John Overall D K Voss A J Campbell 0 0 Brown B N Kelman M G King J S Proud GENERAL MANAGEMENT R G Jackson D D Brown A J Campbell B N Kelman M G King General manager Deputy general manager Deputy general manager Deputy general manager Deputy general manager R W Harvey Assistant general manager SENIOR EXECUTIVE OFFICERS J F Blaxland j G Campbell N L Carter C W Davis A W McAuley R N Selman A V Shaw SECRETARY J H Tuckfield REGISTERED OFFICE 1-7 O'Connell Street, Sydney SHARE REGISTERS Sydney (principal register) Adelaide Brisbane Canberra Hobart Melbourne Perth and Auckland f 391 -i $ r Jo.-.r: Dumoo. Chairman DIRECTORS' REPORT Profit Group consolidated net profit (before extraordinary items) for the year ended March 31 1975 was $36.8 million. This is 28% greater than last year. Sugar activities contributed about $18.2 million ($9.3 million last year); building and construction materials about $6.4 million ($8.2 million last year); and minerals about $10.9 million ($9.2 million last year). Contribution from other interests declined from $2.1 million last year to $1.3 mttlion. Dividend An interim dividend of 7Vz cents per share was paid by the parent company on December 18 1974. A bonus dividend of IVi cents was also paid in lieu of an interim dividend on the 1-for-S bonus share issue made in January 1975. The board recommends a final dividend of Vh cents per share. This would make a total distribution equivalent to 15 cents per share on issue at the end of the year. Subject to adoption of this report, the final dividend will be payable on July 23 1975, on shareholdings registered at the close of business on June 18 1975. Operations Sugar milling profits rose strongly, due to record world sugar prices in 1974. Iron ore profits rose, with higher export prices and sales. Our coal export interests made good progress. These gains, and some lesser profit improvements, enable the board to report continued growth in group profits in spite of bad results for many of our activities which make goods for sale in Australia. Like most Australian companies, CSR was severely affected by domestic economic conditions. Sustained inflation caused steep cost increases, in the second half of the year the downturn in Australian building and construction and in the economy generally resulted in falling demand for many of our products. Reduced plant throughput aggravated the problem of production cost increases. In some cases the opera tions of the Prices Justification Tribunal added to the difficulties. Inevitably, these conditions reduced profits for many of our activities. Some traded at a loss. The impact is illustrated by lower profits from building and construc tion materials. These fell despite inclusion for the first time of a full year's contribution from Australian & Kandos Cement Holdings. The Australian market situation continues to be of serious concern. There are no grounds for confidence that the rate of inflation will fall soon. Measures taken by the Government to stimulate the economy have not yet made a significant impact on sales. Business confidence is essential to renewed conomic growth. Return of confidence is impeded by inconsistencies in government policies and actions. These deeply concern the private sector of the mixed economy that has served Australia so well. In markets outside Australia sugar was in short upply. Prices rose spectacularly. They have fallen, but demand for raw sugar continues to be strong. Late in the year the demand for iron ore showed some signs of weakening. Coal export prospects remain good. Ex panded production of bauxite and alumina met existing contracts. More detailed comment on our main activities appears in the review of operations which begins on page 7. Growth CSR continues to explore ways to extend profitably its iterests in resource-based industries with sound long term prospects. The changed economic situation in Australia has led us to defer plans to expand some activities supply ing internal markets. The operations of other activities 're under review. However, additional cement pro duction capacity is being built; and a new Gyprock factory opened in April 1974. Substantial investments are being made where there are export opportunities. The Mt Newman iron ore pro ject is expanding from 35 to 40 million tonnes a year. Our coal mines in the Hunter Valley are increasing capacity. The Mt Gunson mine began last August pro ducing copper concentrates. Our Queensland sugar mills are being enlarged to crush bigger crops. The Australian Estates Company Limited became a subsidiary of CSR on April 1 1975. It should contribute significantly to group profits this year. Its acquisition at a cost of $48.5 million adds substantially to our sugar milling interests, and it also has extensive pastoral and agency operations. A summary of the activities of Australian Estates appears on page 36. Home Units Australia L^ At the fast annual general meeting we expressed con- CONTRIBUTION TO GROUP NET PROFIT $4m0il-li-o-n----------------------------------------- Other Minerals Building and construction materials Sugar 30 --....... ................................................. 28.8 - Contribution to group net profit not published before 1973 7% 36.8 4% 30% CSR GROUP CAPITALISATION $ million 200------------------------------------------------------------------------------------------------------------------------------- 63% 82% 59% 62% 63% 100---------------------------------------------------------------------------------- 1971 as at March 31 1972 1973 1974 1975 3 cern about our investment in the Home Units Australia group: negotiations were then going on. It was necessary shortly after that to restructure this opera tion. As stated in the half-yearly report, the board wrote off our investment of $6.1 million. It is too early to say if any of the investment will be eventually recovered. Employees The company's continued growth in difficult economic conditions is due to the effective work of people. The board is deeply grateful to all who have contributed. As explained on page 39. we are continuing to apply more resources to matters affecting those employed in the group. A change concerning tax effect accounting has been made this year to conform with standards recommended by the professional bodies. The change has only a slight effect on reported net profits. It is explained on page 34. Historical cost accounting in times of sustained inflation is of limited usefulness as a measure of performance. Adoption of an accepted method of accounting for inflation would provide a more realistic picture of the results of a company's operations. Regrettably, no such accepted method exists. The board considers it would be confusing, and achieve little purpose, for CSR to attempt to make adjustments to its accounts to allow for inflation, in advance of general acceptance and understanding of a standard method. Finance Monetary conditions remain unsettled, world-wide. In Australia high inflation continues, and future mone tary policy is uncertain. We have sought and achieved a strong liquid position and intend to preserve that position. Loans arranged by the parent company during the year and since for the ongoing needs of the group are reported on page 34. They include overseas borrowings now made prac ticable by the suspension of the variable deposit requirement on foreign loans. These borrowings are in US dollars, in which currency the group has substantial income. Unsecured notes totalling $40 million mature on December 31 1975. It is expected that holders will be offered the opportunity to convert to new GSR ecurities. Accounting Extraordinary items' in the consolidated profit and loss account amount to a net deduction of $3.1 million from profits before extraordinary items. This net amount is mainly the writing-off of the $6.1 million investment in the Home Units Australia group offset by adjustment of about $3.3 million to taxation provisions, following the reduction from 47%% to 45% in the rate of company tax. Asset replacement The inadequacy of historical cost accounting under inflation is particularly striking where operations em ploy expensive plant that must be replaced progress ively. The cost of replacement is invariably far more than the original cost of the item replaced: but for tax purposes depreciation is allowed only on the historical cost. Directors last year created a special reserve for increased cost of asset replacement. Consideration was given to adding to this reserve this year. It was decided to await the government action which we hope will follow the recommendations of the Committee of Inquiry into Inflation and Taxation (the 'Mathews Committee'). Form of report This year the accounts, statistical information and continuation of the directors' report are printed on coloured paper in the middle of the document. These pages divide the review of operations which begins on page 7 and is continued on page 31. The report now submitted by the directors for the year ended March 31 1975 includes the review of operations and the financial statements for the period, both for the parent company and as consolidated to include subsidiaries. 3394 R G Jackson General manager Sydney June 23 1975 J W Dunlop Director G B Kater Director gang** l K-:fa*-' /Darwin Gove -.-I' TRONIC OF CAfitCOHN Hambfeaon, Goonoi v'CfOfia^Wackna0e ,^Ownsviite ..'^cta-.Ka/amia !^ . i^Wfoww. | < --ia*Sanna rt6a*>e* take MacOooneH * Mt Gunson ( Bourire | .. ;Cor,aOr,n -'Henoo<f* BroeoWafe ` Kangaroo l, / Adelaide* ^O'wngi \ ) Baccrus Singleton**"** *|^ymona 7, Oberon* Ne^cas,,e errac? *Sydney Aenut. Canberra ^n9* K ;/Trarafgon '^osedaie 8ur Launceston lAuc*' l . Hobart MAIN PRODUCTION UNITS PARENT AND SUBSIDIARY COMPANIES SUGAR--MlUe: CSR--Harwood, Broadwater, Condong, Vic* torta, Macknade, Goondi, Hambledon. Australian Estate*-- Pleystowe, Kalaml*, Invicta. Refineries: Sydney, Melbourne, Brisbane, Adelaide, Perth. Auckland. BUILOING AND CONSTRUCTION MATERIALS -- Gyprocfc plaster board factories and plaster mills: Sydney, Melbourne. Brisbane. Adelaide, Perth. Gypsum mining--flourke, Nowingi, Kangaroo Island. Lake MacOonnell, Lake Seabrook. Vinyl floor* ing: Sydney. Asbestos cement: Sydney, Melbourne, Brisbane. Insulation products: Sydney, Melbourne, Brisbane. Perth. Aluminium windows: Sydney, Melbourne, Brisbane, Adelaide, Hobart. Plastics: Sydney. Root tiles: Sydney, Melbourne. Brisbane, Adelaide. Launceston. Concrete: Sydney. MINERALS--iron ore: Mt Newman (CSR subsidiary Pilbara Iron Ltd is a joint venturer). Bauxite and alumina: Gove (CSR subsidiary Gove Alumina Lid Is a joint venturer). Coal: Singleton, Newcastle. Copper: Mt Gunson. CHEMICALS--Sydney, Newcastle. DISTILLERIES--Sydney, Melbourne, Sarina. CARBON DIOXIDE AND FREEZING SERVICES--Sydney, Melbourne. Brisbane, Townsville, Adelaide, Mt Gambier. Perth. Launceston. Darwin. C 3395 ASSOCIATED COMPANIES BUILOING ANO CONSTRUCTION MATERIALS -- Hardboard produets: Sydney, Raymond Terrace. Melbourne, Bacchus Marsh. Ipswich, Bumie. Particle board: Sydney, Oberon. Tumut, Rosedale. Cement: Kandos, Geelong, Traralgon. Roil* formed metal: Sydney. MINERALS--Tin: Bangka Island (Indonesia). CARBON DIOXIDE AND FREEZING SERVICES--Auckland. OTHERS (not shown on map) Pastoral activities: Australian Estates has 20 grazing properties in the Northern Territory, Queensland and New South Wales: conducts woolbroking snd stock and station agency business in Victoria. New South Wales and Queensland, including 70 country branches, 3 city branches, and 3 wool stores in Mel bourne. Portland and Brisbane. CSR operates macadamia nut orchards in Queensland. Concrete and quarrying: Ready Mixed Concrete has US con crete plants, 63 quarries and 5 asphalt plants througnout Australia. fl G Jackson. general manager REVIEW OF OPERATIONS As CSR grows and the business environment in which we operate changes, constant attention has to be given to management structure and organisation. Our last annual report referred to changes designed to strengthen the corporate functions of forward strategic planning, finance, relations with government regulatory authorities and the search for new business opportunities. Last year all sugar activities were re grouped into a single division. Those changes were timely. World-wide economic difficulties gave added point to the worth of strategic forward planning. The additional resources applied to finance manage ment were needed to cope with rapidly changing financial conditions. Prices justification and other regulatory requirements now impose a large burden on management resources. The major new investment in Australian Estates was possible because we were organised to seize new opportunities. The regrouped Sugar Division was in good shape to implement CSR's part in important sugar industry developments dealt with in this report. We recognise that some things could have been better done, but lessons have been learned from them for the future. We have made further important management changes which are reported on page 39. Our main operations other than sugar are now grouped in two major divisions, effective April 1 1975. Resources for planning and control in all divisions have been strengthened. Greater corporate resources will be applied to matters concerned with peopie in the group. These changes, like those of last year, are designed to enhance the group's ability to maintain steady growth, in spite of the real difficulties presently con fronting Australian industry. The prospects for the current year will be referred to at the annual general meeting. C 5596 SUGAR DIVISION ACTIVITIES f\ Raw sugar: CSR ba$ seven mm$ Australian Estates ana its subsidiaries nave tnree mms C$R markets an Australian raw sugar exoorts on oenait of me Queens land Government a^o oroviaes tecnmcai ana ome' services for me Australian sugar industry. Refined sugar: Oseraung under contract to me Queensland Government. CSR manufactures and dis tributes about 95% of refined sugar products used m Australia, from five casual city refineries. New Zealand Sugar Co Ltd (100% CSR) suoolies ail refined sugar products usee 'n New Zealand from its Auckland refinery. Other: CSR is developing a macaaamia nut proiect. n operates shipping services. Australian Estates raises beef cattle ana Merino sheep: it operates woolbroking and stock and station agencies. - SUGAR INDUSTRY DEVELOPMENTS All Australian raw sugar is pooled for marketing. CSR's sugar operations need to be considered in the context of developments in the industry. Australian raw sugar production in the 1974 season was a record 2,777,000 tonnes, which was 311,000 tonnes higher than in 1973. Throughout 1974 world sugar stocks were low and supplies were short. High prices prevailed. The London Daily Price averaged stg305 for 1974, about three times the 1973 average, it reached a record stg650 in November, it has fallen since then, and by early June 1975 was about stg160 per tonne. About three-quarters of the Australian crop is ex ported. so pool prices for 1974 season raw sugar will reflect the buoyant export market. The average price for all sugar produced is expected to be about $260 per tonne (basis 94 net titre), compared with $130.36 for 1973 season sugar. World market conditions enabled us to negotiate long-term contracts at remunerative prices with some overseas buyers of Australian sugar. Such contracts now cover about 1.2 million tonnes from each crop for the next five years. They cushion the industry against the effects of a possible return to low world sugar prices. The Australian and Queensland governments ex tended for five years their agreement covering domestic sugar sates and agreed upon a smalt increase--the first since 1967--in wholesale sugar prices. Sugar industry capacity Against the above background government authorities and industry organisations agreed that the annual productive capacity should increase by about 300.000 tonnes. Growers will plant more cane, some of which should be ready for crushing in the 1976 season. Ceoutv genera: manager A j CamDOeH 'seegnc >'o~ '-g~:< w r' Sugar a.MSion general management itrom leiti A M nemoerg J G Camooe'i. J w Laurie ana G A Gemmeti-Sm<rn From then on the average Australian production of sugar is likely to be about 3 million tonnes, of which about 2 million tonnes will be covered by the domestic market and the long-term contracts that have been negotiated. The industry organisations have agreed on a major programme to expand bulk sugar storage and to develop two of the sugar ports. To provide finance the industry has agreed that $50 million will be withheld from 1974 export proceeds. RAW SUGAR PRICES Monthly awragt ot London daily prico 1970 1971 caiandaryaara 1972 1973 1974 1975 CSR OPERATIONS C 5597 Raw sugar mills CSR's seven sugar mills in 1974 made 498,000 tonnes, 33,000 tonnes more than in 1973. Mill efficiencies were satisfactory. Although manu facturing costs increased, higher prices of raw sugar led to much higher milling profits. Farmers supplying cane to CSR's four Queensland mills have shared in the industry expansion of cane lands. To process bigger crops within shorter periods, the mills are substantially increasing their capacities. The two wholly owned, and one partly owned, mills of the Australian Estates Company produced 340.000 tonnes in 1974, and are being expanded. In New South Wales mechanisation of harvesting 8 developed further in 1974, and will be almost com pleted for the 1975 season. Discussions are taking place with representatives of cane growers supplying CSR's three NSW mills, con cerning the long-term future of the mills and their ownership. Refined sugar in Australia CSR sold 711,000 tonnes of refined sugar products, 22,000 tonnes more than last year. Refined sugar, as a basic material in many foods and beverage industries, is holding its position in Australia against other sweeteners and fermentable products. Promotion of specialty sugars, such as brown, coffee, caster and cube sugar, has led to good in creases in sates. Retail demand for unrefined sugar continues to grow, met by specially selected and packed raw sugar. Refined sugar in New Zealand New Zealand Sugar Co Ltd (100% CSR) sold 183,000 tonnes, 18.000 tonnes more than the previous year. The gain reflected customer stockpiling, influenced by industrial problems and by news of sugar shortages and large price increases in other sugar-importing countries. The price stabilisation agreement between the New Zealand Government and the company, now extended until March 31 1976, moderated increases in sugar prices flowing from high world prices of raw sugar. Part of the higher costs of imported raw sugar has been borne by the Government, but retail prices in creased in June 1974 (by about 3 cents a lb) and in March 1975 (by about 9 cents a lb) to the present price of 21 cents a ib. Sales may be lower this year in reaction to the higher prices and to last year's stockpiling. Marketing and other services As marketing agents for the Queensland Government. CSR conducted the negotiations for the long-term contracts referred to earlier. We are also substantially involved in investigation and planning of the port and storage developments now in progress. CSR has helped to develop bulk sugar handling facilities in a number of sugar-importing countries, in the interests of widening market outlets for Australian exports. Pastoral interests The acquisition of Australian Estates now makes pastoral operations an important activity of the group. Market conditions for beef are very poor. Harmful restrictions still apply in important export markets. Cattle prices are very low. Wool prices have also been depressed but there has been some recovery recently. Seasonal conditions have been generally good on the Australian Estates properties. BUILDING AND CONSTRUCTION MATERIALS DIVISION ACTIVITIES -.... .............. < Maior orooucts a'rd oDeranng comoanies (inducing associates)--Gypsum, plaster, plasterboard: CSR gyosum oroducts group. Vinyl sheet and tiles: CSR vinyl flooring grouo. Asbestos cement products, terra* cotta roofing tiles, plastic pipe, aluminium windows: Wunderucn Ud (100% CSR). Aluminium extrusions: Wunderlich Aluminium Company Pty Lid (50% CSR). Insulation products: Bradford insulation industries Pty Ltd (85% CSR). Bradford insulation iWA) Ltd (70% CSR). Hardboard products: Hardboarcs Australia Ltd (50% CSR). Particle board products: Pyneboaro Pty Ltd (50% CSR). Ceiling accessories: Rondo 8uitdmg Services Pty Ltd (50% CSR). Ready mixed concrete, hard rock, gravel, sand, asphalt: Ready Mixed Concrete Ltd (50% CSR). Aus tralian Quarries Pty Ltd (100% CSR). Gravel and Sand Suppliers Pty Lto (51% CSR), Parley & Lewers Ltd (43% CSR). Resource industries Asia Pty Ltd (40% CSR). Hymix Australia Pty Ltd (25% CSR). Cement: Australian & Kandos Cement Holdings Ltd (50% CSR). Industry conditions Activity in the Australian building industry turned sharply downwards during the year. Tight monetary policies, with a severe credit squeeze, caused a sub* stantia) decline in work on new dwellings after the middle of 1974. Government expansionary action late in the year failed to have a significant effect on dwelling commencements by the end of the first quarter of 1975. The decline in work on non*dwelling constructions was less severe; the value of work done (at constant prices) was 3% lower than in the previous year. These general conditions affected CSR substantially by reducing sales opportunities. The group's profits from building and construction materials were also eroded by steep cost increases. Although price increases were accepted by the Prices Justification Tribunal, the deiays inherent in its pro* cedures reduced the division's ability to protect itself against the high rate of inflation. Building materials C 339S Sales of CSR building materials were generally sub* stantiaily lower than in the previous year because of the decline in new dwelling construction. In particular, some Wunderlich group products were severely affected. Vinyl flooring, particularly sheet, suffered badly from import competition. Imports now supply almost half of the Australian market. During the year the operations of the Bradford Insulation companies in New South Wales, Victoria and Queensland were combined, under the name of Deputy general manager B N Kalman (right), with building and construction materials division ganaral management. A V Shaw (left) and A J Oliver Bradford Insulation Industries Pty Ltd. CSR has an 85% shareholding in those companies. Bradford insulation (WA) Ltd operated as a subsidiary company for the first full year; CSR's shareholding increased from 45% to 70% in November 1973. The company's second Gyprock factory in Sydney, at Wetherill Park, started in April 1974. Pyneboard Pty Ltd (50% CSR) is producing a special grade of particle board for flooring, which has now been widely approved for use in dwellings in Australia. Another new product, Fineline Pyneboard, is gaining market acceptance. Concrete and quarrying Profits from CSR interests in concrete and quarrying were reduced by a combination of the downturn in the building industry, industrial disputes, wet weather and the operations of the Prices Justification Tribunal. CSR's main interest is its 50% ownership of Ready Mixed Concrete Ltd (RMC). Dividends from RMC were 36% lower in the year ended March 1975 than in the previous year. Since RMC's financial year ends on INDEX OF AUSTRALIAN BUILDING APPROVALS (baood on total vakw of building approvals at constant prlcos) 150--------------------------------------------------------------------------------------- June 30, its results will be reviewed in the next halfyearly report. Our subsidiary Gravel and Sand Suppliers Pty Ud had a reasonably good year, although not as good as 1974. Satisfactory progress was made by Resource Industries Asia Pty Ud, which is now operating profitably with concrete plants and a quarry in Djakarta and a con crete plant recently opened in Kuala Lumpur. Cement The tonnage of cement sold by Australian & Kandos Cement Holdings Ltd (A&K) in the year ended March 1975 was 8% lower than in the previous year. A&K is 50% owned by CSR. Profits were substantially lower I because of the downturn in sales volume, a three weeks' strike in July and a four months' delay in obtaining a price increase approval from the Prices Justification Tribunal. The upgrading of cement plant capacities at Geelong and Kandos is proceeding on schedule. In the Qyprock plasterboard factory at Yarraviiia, Melbourne C 99 The review of operations continues on page 31 in t i l CSR Limited and subsidiaries PROFIT AND LOSS ACCOUNT Year ended March 31 197` Operating profit before income tax Add: Dividends from --subsidiaries --otner corporations See Note 3 CONSOLIDATED 1975 1974 $000 $000 PARENT 1975 :97- sooo $oo 70.653 58.055 30.903 17,77 -- 5.880 -- 5.874 9.154 5.718 5.36 5.68 Less: Income tax expense tnereon 5 Less: Proportion applicable to minority interests Net profit for year (before extraordinary items) Extraordinary items after adjusting for proportion applicable to minority interests (net of income tax expense) 6 Net profit and extraordinary items Add: Unappropriated profits brought forward Adjustments thereto 7 Profits available for appropriation Less: Interim dividend paid Final dividend proposed Transfers to reserves: Revenue Increased cost of asset replacement Capital profits 8 8 8 Unappropriated profits carried forward 76.533 32.872 63.929 28,256 45.775 14.592 23.62 8.28 43.661 6.652 35.673 6.357 31.183 -- 20.54 - 36.809 28.616 31.183 20.54- (3.086) 519 (5,287) 10,24' 33.723 21.056 (6.682) 29,335 28,055 (1.568) 25.896 7.224 (6,860) 30.799.07: 3: 48.097 7.571 7.571 55.822 6.099 6.519 26.260 7.571 7.571 39.89i 6.09$ 6,51$ 3.000 -- -- 6.000 16.000 148 3,000 -- -- 6.0OC 13.95C 102 29,955 21,056 8,118 7,224 C 3401 Notes on and forming part of the accounts are annexed 12 BALANCE SHEET Authorised capital 200.000.000 shares of $1 each (1974 125.000.000) Paid capital 100.942.380 fully paid shares of Si eacn (1974 84.118.650) Reserves jnappropnated profits CSR shareholders' funds Equity of minority shareholders TOTAL FUNDS Represented by: ASSETS Fixed assets interests in joint ventures and partnerships Investments Term debtors and deferred costs Current assets Future income tax benefits TOTAL ASSETS Less: LIABILITIES ANO PROVISIONS Non-current liabilities Deferred income tax and other non-current provisions Current liabilities Current provisions TOTAL LIABILITIES AND PROVISIONS NET ASSETS Mineral exploration Contracted capital expenditure and contingent liabilities Notes on and forming part of the accounts are annexed as at March 31 1975 Note CONSOLIDATED 197S 1974 $000 5000 PARENT 1975 1974 $000 $000 200.000 125.000 200.000 125.000 100.942 84.119 100,942 84.119 8 233.979 250.484 195.558 209.391 29.955 21.056 8.118 7.224 364.776 355.659 63.313 62.019 304.618 300.734 ---- 428.089 417.678 304.616 300.734 9 257.797 239.960 150.318 145.691 10 219.510 205.326 7.273 462 11 120.457 98.022 203.241 178.134 12 33.091 20.656 36,109 9.750 13 250.025 186.756 173.061 123.240 14 25.215 -- 7.608 -- 908.095 750.722 579.610 457.277 15 148.838 153.212 40,844 50.264 17 100,448 63.151 29,490 14.543 18 179.149 91.836 178,082 77.416 19 49,775 24.845 28,776 14.320 478.006 333.044 274,992 156.543 428,089 417.678 304,618 300.734 20 21 NOTES ON AND FORMING PART OF THE ACCOUNTS 1 STATEMENT OF ACCOUNTING METHODS Significant accounting meinoas used m the accounts are summarised in this note. Principles of consolidation The grouo consolidation includes suDSidianes of all-companies m which tne grouo holds ana/or controls more than half the issued ordinary share caoital. All intercompany accounts and transactions have oeen eliminated. Stock on hand transferred within the group has Oeen valued in accordance with the method stated for stock on hand and work m progress valuations. thereDy eliminating unrealised profit. A list of subsidianes is shown m Note 22. The group's interests in listed and unlisted companies in which the shareholding is not more than naif of me issued share capital are shown m the accounts as investments. Dividend income only is taken into protit. Interests in joint ventures comprise investment at cost fess depreciation m plant and equipment, leasehold imorovements. construction m progress (including exploration, development and administration costs) and the net investment m joint venture working capital. Interests in partnerships comprise the investment in net fixed assets ano working capital. :oss ana the aggregated cost is capitalised. Provision is made for writing off me capitalised cost over me economic life of the ore reserves once ooerations commence. Income tax Tax effect accounting is used by the company whereby income iax expense tor me year is matched with me accounting profit after allowing for permanent differences. A retroactive consolidation adjustment was made in 1974 in respect of Section 77D and 77AA declarations of certain mining suDSidianes in favour of the parent. A retroactive adjustment for cumulative timing differences arising up to ano including year ended Marcn 31 1973 has now oeen made m tnese accounts for year ended March 31 1975. to provision for deferred income tax account and to future income tax benefit account as an adjustment directly to retained profits, m accordance with the new accounting standard DS4 (tax effect adjustments for year ended Marcn 31 1974 were made in that year's accounts). Adjustments to provision for deferred income tax or future income tax benefits accounts resulting from changes to com pany tax rates are treated as extraordinary items. Valuation of fixed ataata Certain fixed assets have been revalued at various times and are shown at valuation. All others are shown at cost. Depredation (including amortisation and depletion) of plant equipment property and buildings Assets at cost or valuation are depreciated at rates based upon their expected economic lives, using the straight line method. Revaluation of non-current aaaots Unrealised surpluses and also unrealised deficiencies arising from revaluation of non-current assets are transferred direct to capital reserves. Stock and work In progress valuations Trading stocks and work in progress are valued at the lower of cost (including factory overheads where applicable) and net realisable value. Other stocks and stores are valued at actual or average mto-store cost (as appropriate) less any provision for diminution in value. Mineral exploration Expenditures on mineral exploration and development, includ ing related overheads, are accumulated for each separate area of interest For areas of interest in which the existence of economically recoverable ore reserves has not been established, or in which investigations are still proceeding, provision has been set aside out of profits to provide for the possible writing off of all these expenditures. Expenditure on areas which have been abandoned or are considered to be of no value is written off in the year in which such decision is made. Where exploration proves economic reserves to exist, any related provision previously made is written back to profit and Foreign currency transactions Unrealised gams or losses on overseas borrowings resulting from exchange rate realignments are recorded in the exchange realignment reserve. Gains or losses ultimately realised will be brought to account in the profit and loss account at such time as the borrowings or investments are redeemed or realised. Unrealised gains or losses in investments in overseas sub sidiaries and in the non-current assets and liabilities of over seas branches are also recorded in the exchange realignment reserve. Current assets and current liabilities in overseas currencies have been adjusted on the basis of exchange rates ruling at the end of the financial year and the resultant gains and/or losses arising therefrom are taken to account in determining the net profit for the year. Investments in and loans to non-retated overseas companies have been shown in Australian dollars converted at the rate applicable at the date of acquisition or valuation. Profit and loss items and assets and liabilities recorded in overseas currencies by certain branches and subsidiaries are brought to account at the currency conversion rates ruling al the end of the financial year. Apart from the above, the basis of conversion of trans actions in other currencies affecting the profit and loss account is the rate oiling at the date of the transaction. C 3403 ------------- ------------------------------------------------- 2 ROUNDING AMOUNTS TO THE NEAREST $000 The parent company is a company of the kind specified in the order dated August 23 1974 made by the Commissioner for Corporate Affairs, permitting the rounding off to the nearest $000 of amounts in the accounts and directors' reports. 14 3 OPERATING PROFIT BEFORE INCOME TAX Includes-- interest received from suosidianes Surplus on sale of non-current assets and Is arrived at after charging-- Provisions for depreciation of fixed assets Other provisions: Mineral exploration Losses m subsidiaries Long service leave Accrued annual and Sick leave Doubtful debts: Trade Other Pensions Sundry costs Directors' emoluments' received or due and receivable by-- Non-executive directors: Parent --fees --payment for extra services: Article 93(2) --retiring allowance Subsidiaries--fees interest paid--to subsidiaries --to others `No such emoluments were oat<3 to executive directors 4 AUDITORS' REMUNERATION Amounts received or due and receivable by auditors for: Auditing the accounts Other services The auditors received no benefits other than the amounts shown 5 INCOME TAX EXPENSE income tax expense attributable to: Profit before extraordinary items Extraordinary items Income tax expense is comprised of the amounts: Added to provision for current income tax Added to provision for deferred income tax Taken from future income tax benefits C 54G4 CONSOLIDATED 1975 1974 $000 $000 PARENT 1975 1974 $000 $000 397 484 465 310 256 250 26.3S4 24.282 1.325 -- 3.893 2.387 881 252 -- 442 (968) _ 2.1 SS 473 426 OS) 1.300 400 8.071 1,327 250 2.822 527 239 225 -- 67 7.657 (970) 1.789 1.546 447 136 (122) 1.300 243 67 3 -- 34 -- 24.324 58 _ 20 _32 14.781 67 3 -- -- 845 13.080 58 20 _ 591 5.842 213 135 181 36 79 38 89 11 32472 28.256 12 (364) 312*4 27.892 14492 -- 14492 8.260 (364) 7.916 254*7 5455 2,242 15.424 12.468 -- 32,8*4 27,892 13,808 1,754 (770) 14492 4,675 3.241 -- 7.916 Continued on page 16 Note S continued Reconciliation ot pnma lacie tax with income tax exoense: Pnma facie income tax calculated at 45 cents (1974--47 5 cents) m trie collar on [profits oefore extraordinary items of: Consolidated--1975 $76,533,000 --1974 $63,929,000 Parent --1975 $45,775,000 --1974 $28,824,000 Add: The tax effect of non allowable items-- Depreciation provided m accounts (principally buildings) Provision for diminution m value of investments Dividend withholding tax in respect of dividends received or receivable from overseas suosidiary Overseas tax rates differential Additional tax expense associated wnn Section 770- 77AA declarations made by mining companies m favour of their shareholders Other items Deduct: The tax effect of: Rebates on dividends received and included in profits investment allowance for expenditure on plant Deduction allowed for share moneys subscribed to mining company Export market development rebate Income tax expense of previous years over-provided income tax expense on-- Profit before extraordinary items Extraordinary items (Note 6) CONSOLIDATED 197S 1974 $000 $000 PARENT 1975 '.974 $000 SCOC 34.440 30,366 20.599 13.691 732 529 101 -- 80 113 56 19 481 779 9 363 35.899 32.169 449 423 101 _ 80 * * 3 56 35 ---- 313 127 21.598 14.389 2.646 102 -- 48 231 3.027 2.791 310 333 159 320 3,913 6.693 67 -- 30 216 7.006 5.249 203 333 70 254 6,109 32.872 28.256 12 (364) 32.8M 27,892 14.592 -- 14.592 8.280 (364 7,916 6 EXTRAORDINARY ITEMS Extraordinary items net of income tax where applicable Surplus on the sale of non-current assets (net of income tax consolidated $12,000; 1974 nil) 448 90 427 103 Home Units Australia Grouploss on sale of shares (2.000) -- (2,000) -- Provision for diminution in value of-- shares loans (2.000) (2,100) _. (2.000) -- (2,100) _ -- Adjustment to income tax expense in respect of prior years _ _t! consequent on reduction in tax rate 3,280 386 Surplus transferred from provision for replacement account, being the excess over accumulated depreciation requirements at April 1 1973 _ 12.663 _ 10.555 Amount of a retroactive adjustment as at April 1 1973 arising from a credit to de ferred income tax. to r^ognise and correct for the timing effect ot past Section 77D and 77AA declarations made by subsidiaries carrying on mining operations Tax benefits realised in respect of prior year lossas by subsidiaries (12.315) -- 1.117 ---- income taxes payable in excess of income tax expense charged against profit -- (167) ---- I t 16 Continued on peg* 17 Note 6 continued Non-current assets written ott (net of income tax $364,000) Miscellaneous Less: Proportion applicable to mmonry interests Proportion applicable to CSR Ltd CONSOLIDATED 1975 1974 SOOC sooo PARENT 1975 1974 SOOO SOOO _ 46 (2.326) 750 (3.08$) (522) 56 922 403 519 _ (402) -- (9) (5.28T) 10.247 ---- (5.287) 10.247 7 ADJUSTMENTS TO UNAPPROPRIATED PROFIT (after allowing for the amount applicable to minority intaraats) Tax effect accounting adjustments not previously recognised m prior years: Transfers to: Provision for deferred income tax Future income tax benefits increase m balance of unappropriated profits brought forward due to currency changes Unappropriated profits (accumulated losses) of subsidiaries acauired during period Sundry Unappropriated profits of a former subsidiary Adjustments to unappropriated profits (15.161) 6.630 ___ _ 4 21 (155) -- -- 36 -- (1.625) (6.682) (1.568) (13.699) 6.839 -- -- -- -- (6.860) _ ___ ___ 30 -- 30 8 RESERVES Reserves: Increased cost of asset replacement Share premium Capital Revenue Exchange realignment Movements in reserves: increased cost of asset replacement --transfer from profit and loss Share premium --bonus issue of shares --premium on shares issued--1974 16.000 23.937 94.047 98.396 1.529 16.000 40.731 96.030 95.395 2.328 233.879 250.484 13.950 23.907 59.331 98.140 230 13.950 40.731 59.331 95.140 239 195.558 209.391 -- 16.000 -- 13,950 (16.824) -- (16.824) -- 1.045 1.045 (16.824) -- (16.824) -- 1.045 1.045 Capital--surplus on revaluation of non-current assets --deficiency on revaluation of non-current assets --surplus on sale of non-current assets transferred from profit and loss --surplus arising from investment in certain subsidiaries (being premium on consolidation) --transfer from revenue reserves- 109 (2.406) " 314 68.321 -- 148 284 558 (1.983) 69.311 ___ 32.365 ---- 102 -- 66 -- -- 32.533 Continued on page 18 17 CONSOLIDATED 1975 -974 5000 ;000 PARENT 1975 -?7i sooo s::-c Not* I continue Revenue--transfer from profit a^c ;css --surplus ansing *rcm ejects o' cu"encv fluctuations on reserves of a sues c a-.:ess: --transfer to capria; reserves --reserves ot former suosic.aries 3.000 1 5 000 -- -- 3.001 ;558) {1.5291 3.924 Exchange realignment --unrealised-surplus (deficiency) on currency realignments (799) 533 (16.605) 90.913 3.000 -- -- -- 3.000 5 00C -- -- -- 6 00C (9) 235 (13.833) 53.767 9 FIXED ASSETS Freehold ana leasehold tana: At officers valuation 1965 1973 1974 1975 At indeoenaent valuation 1971 1974 *1975 At cost 1.051 -- 18 2.473 3 84.382 2.410 3.476 1 051 283 18 -- 72 89.262 -- 1.340 -- -- -- -- -- 40.770 -- 876 _ -- -- -- -- 40.922 ___ 67C Less provision lor depreciation 93.813 92.026 186 185 41,546 41.592 ---- 93.627 91.841 41.646 41.592 Names of valuers: G G Jones ACIV J T Wngnt Sworn Valuer H J Elliot Sworn Valuer J C V.rtge ACIV Buildings, machinery, plant and equipment (including mine development) At officers'valuation 1955 1956 1959 1961 1962 1963 1964 1965 t 1971 1973 1974 1975 At independent valuation 1967 1970 t 1975 At cost 869 1,633 950 -- 67.472 870 4 25 3,200 -- 232 1.399 576 9.019 271 219.185 869 1.633 950 606 67,876 870 4 25 2.396 264 239 -- 573 9,002 -- 191.363 -- -- -- -- 62.550 -- -- -- -- -- 232 -- 4 9.019 -- 123.522 -- ___ -- -- 62.627 -- -- -- -- -- 237 -- 5 9.002 -- 112.869 Less provision for depreciation J Freehold and leasehold land as above 305.705 276.670 141.535 128.551 164.170 146,119 93,627 91.841 195,327 164,740 86.655 80.641 108.672 104,099 41.646 41.592 257.797 239,960 150.318 145.691 r increased valuation due to subsidiaries acouned during me year : Name ol valuer: G M Lawrence fCtV IS CONSOLIDATED 1975 1974 PARENT 1975 1974 $000 SCOO_______ $000 SOOO 10 INTERESTS IN JOINT VENTURES AND PARTNERSHIPS interests in |omt ventures: investment Dy Pilbara iron Ltd in Mt Newman iron ore oroiect investment oy Gove Alumina Ltd m Gove Oauxite-aiumma oroiect investment oy parent comoany m a |Oint venture with a subsidiary-- Mount Gunson cooper oroiect The aoove investments comprise. Cost of olant and equipment, leasenoid improvements ana construction m progress (including exploration, development ana administration costs) Less provision for depreciation Plus excess of current assets over current liabilities: Current assets Current liabilities 248.414 226.966 (39,115) (27,531) 20.041 11.682 (9.925) (6.271) Interest in partnerships: Australian Chemsnip Line (also Hardie Bl, Shipven m 1974} 219.415 204.866 95 462 219,510 205.326 5.297 (613) 1.841 (347) 7.178 95 7.273 _. _ _ -- -- 462 462 11 INVESTMENTS Shares in-- Coroorations quoted on prescribed stock exchanges: At officers'valuation 1969 1972 1975 At cost Quoted market value Corporations not quoted on prescribed stock exchanges: At officers'valuation 1965 1972 1973 At cost Less provision for diminution in value Government, municipal and other public debentures not quoted on prescnbed stock exchanges--at cost Fiji Govemmsnt stock maturing 1976-1986 (average term approx. S years. average interest rate 9.5%)--at cost Shares in subsidiaries: At officers' valuation 1987 1970 1971 1972 1973 1974 At cost Less provision for--mineral exploration in subsidiaries --losses in subsidiaries Debentures of a subsidiary at cost C 34G8 -- 21.291 921 14,231 1.071 21.506 -- 6.784 36.443 29.361 35.592 35.363 -- 21.291 -- 12,143 -- 21.506 ___ 6.623 33.434 28.129 32.041 33,912 23,983 5 14 56.583 23.983 5 14 38.884 80.565 62,886 2,006 -- 76469 62,886 23,963 5 14 54.757 23,963 5 14 37.467 78.739 61.449 2,000 -- 76.739 61.449 45 5,410 5,455 45 5.730 5.775 -- 5,410 5.410 -- 5.730 5.730 ---- -- -- -- -- ---- -- -- -- -- ---- -- -- ____ I -- -- -- -- ---- 120.457 98.022 23,048 11,335 3,093 652 1,842 1.254 56,025 24.420 11.335 3.093 652 1.842 1,254 49.476 97449 6475 3,456 92.072 6,180 3,206 87419 82.686 140 140 203441 178.134 19 j 5 C 3409 CONSOLIDATED 1975 1974 SOOO SOOO PARENT 1975 '974 scoo sooc TERM DEBTORS AND OEFERREO COSTS Amounts owing Dy subsidiaries Loans to directors of the comoany and ot ns suosidiaries (all such loans are to directors in the full-time emotoyment of the comoany or of a suosidiary ano are pursuant to me staff housing loans scneme) Other term deotors N2 sugar price stabilisation account (see contra--Note 15) 353 32.735 3 373 20.264 19 *16.278 192 21.639 -- 215 9.535 -- * Previously included m cuireni assets 33.091 20.656 38.109 9.750 The consolidated amount of otner term deotors consists onnctoaliy of an amount repayable by the Port Hedland Port Authority over a oenoo of years to Pubara iron Lid. The oaren: amount consists of loans made to emoioyees otner man directors oursuant to me star housing loan scneme oius loans to outside comoanies. some of which were included m current assets last year. The items New Zealand sugar once stabilisation account and contra (consolidated) relate to an agreement between the New Zealanc Sugar Company Ltd ana the New Zealand Government, made under the provisions of the Finance Act 1972. The agreement orovioes tor me difference between me actual ourcnase once of raw sugar ano me notional price tor domestic pricing purposes to be met from a sugar once stabilisation account guaranteed by the Government. Following me latest amendment to me agreement (Marcn 1975) the term o! the agreement has been extended to Marcn 3t 1976. The cost arising because of me difference oetween me two prices is me figure appearing m the New Zealand sugar pnce stabilisation account ana it represents a deterred cost. The recovery o' '.his cost is met from a soeoat ban* overoraft. me repayment ot which is orotected by the agreement. The profit of New Zealand Sugar Company Ltd for me year nas been arrived at m accordance with the terms ot the agreement with the New Zeaianc Government. 13 CURRENT ASSETS Stock on hand: Finished goods at lower of cost or net realisable value Raw and process materials at cost Spares, maintenance stores and supplies at cost less provision for diminution in value (see below) 'Pew sugar stocks in Mew Zea/end tt.936.000 11974 $4,996,000) have been valued in accordance wnn the conditions at the New Zealand sugar once stabilisation agreement (see Note 12) 23.398 13.960 '30.936 15.048 7,157 4.339 6.472 6.447 4.086 4.415 4.405 3.362 61.491 33.347 17.005 12.182 Work in progress at lower of cost or net realisable value Debtors: Trade debtors less provision for doubtful debts Other debtors and prepayments Less provision for doubtful debts Amounts owing by subsidiaries Short term deposits Less provision for doubtful debts (includes Home Units Australia Group --42.100.000) Cash at banks and on hand The amount for stock on hand has been arrived at after making provisions for possible diminution in value 8ad debts written off to provisions 2,273 2.706 313 622 61.329 (2.019) 9,710 (249) 49.164 (1.585) 14.070 (88) 31.316 (993) 6.477 (249) 21.172 (868) 11.114 (81) 66,771 61.561 36.551 31.337 -- -- 22.834 12.739 113,033 85.150 (2,157) -- 94.271 63,022 (2.157) -- 111,778 85,150 92,114 63.022 5,714 3.992 4,244 3.338 250,025 186.756 173,061 123.240 293 212 447 316 264 186 113 80 20 14 FUTURE INCOME TAX BENEFITS This asset represents the tax effects of some trading losses and of charges against profit ano loss wmcn are not avaiiaoie as deductions against taxaoie income until some future date The value of future income tax Benefits will only Be obtained if: (a) Assessable income is derived of a nature and of amount sufficient to enable the benefit of the deductions to be realised: (b) conditions for deductibility imposed by the law are comotied with: and (c) no changes in tax legislation aoverseiy affect the realisation of me benefit of the deductions. CONSOLIDATED 197S ',974 SOOC 9000 PARENT 1975 1974 SOOC $COO 25.215 -- 7.608 15 NON-CURRENT LIABILITIES Debenture stock (Note IS) Other secured loans reoayaDie later than twelve months (see Below) Unsecured loans reoayaoie later man twelve months (see oeiow) Unsecured notes issued By CSR Ltd (1975. included in current uaBiiitiesi Bank overdraft--NZ sugar price staoilisation account (Note 12) Other secured loans repayable later man twelve montns: Banks--secured by creditors' oebenture stock issued by CSR Ltd --secured over assets of a subsidiary Other Unsecured loans repayable later man twelve months: Sank Subsidiaries Other 127.008 18.48S 3.140 3 102.217 3.792 7.184 40.000 19 148.636 153.212 24.858 5.414 15.786 4.350 40.000 40.644 50.264 14,798 800 15.598 2.887 18.485 808 808 2.984 3.792 _ -- -- ---- 699 2.441 3.140 659 6.525 7,184 14.820 966 15.786 4,850 4.850 16 DEBENTURE STOCK Debenture stock issued and outstanding held by other persons--due within 12 months issued by-- CSR ad Carba Australia Ltd Gove Alumina Ltd Pilbara Iron Ltd Note 18 due later than 12 months issued by-- CSR Ltd (1977-1980) Gove Alumina Ltd (1976-1986) ' Pilbara Iron Ltd (1976-1983) Note 15 C 3410 -- -- 4,808 7,600 11.903 70 1.427 7,600 12,406 21.000 24,858 49,200 52,950 5,414 51.744 45.059 127,001 102.217 139.414 123.217 ___ 11.903 ---- ---- ---- -- 11.903 24,558 -- -- 5.414 -- -- 24,558 5.414 24.858 17,317 21 DEFERRED INCOME TAX AND OTHER NON-CURRENT PROVISIONS Provisions: Deferred income tax' Non-current tong service leave Non-current accrued annual leave Non-current pensions and retiring allowances Sundry Provision tor deferred income tax includes me liability 'or dividend withholding tax on unaooroonated oroins ot an overseas suosidiary 18 CURRENT LIABILITIES Debenture stock (see Note 16) Unsecured notes Sank overdrafts (see below) Loans repayable witnm twelve monms (see below) Trade creditors Other creditors Amounts owing to suosidianes Sank overdrafts: Secured Unsecured Loans repayable within twelve months: Bank loans--secured --unsecured Other loans--secured --unsecured 19 CURRENT PROVISIONS Provisions: Current income tax Dividend Uninsured losses and future claims Overhauls, renewals and repairs Current long service leave Current annual and sick leave Current pensions Sundry * 20 MINERAL EXPLORATION Cumulative balance to date on current projects Less: Provision by parent company 0 341 1 22 CONSOLIDATED 1975 1974 $000 $000 PARENT 1975 1974 $000 $:cc 86.4S6 11.586 842 1.383 179 49.283 10.119 i .645 1,936 168 100.446 63.151 18.622 8.598 804 1.383 83 3.24C 7.754 1.813 1.936 -- 29.490 14.542 12.406 40.000 8.305 22.162 92.404 3.872 -- 21.000 -- 9.858 16,378 39.816 4.784 -- 179.149 91.836 -- 40.000 381 20.112 76.290 1.912 37,387 11,902 -- -- 15.326 25.956 2.846 21,385 176.082 77.416 2.781 5.524 8.305 4.045 5.813 9.858 381 -- 381 -- 256 100 201 21.605 308 5.115 143 10,812 22.162 16.378 -- -- 20.112 5.00C -- 10,326 20.112 15.326 36.467 7,571 626 94 1.702 2,458 500 354 15.753 6.519 629 45 602 508 600 169 49.77$ 24,845 16,991 7,571 629 50 1.478 1,557 500 5.65C 6,519 629 41 435 446 600 28,776 14.32C 8.170 8.170 -- 6.899 6.899 -- 1.89$ 1,895 -- 687 687 -- CONSOLIDATED 1975 1974 SOOO S000 PARENT 1975 1974 $000 $000 CONTRACTED CAPITAL EXPENDITURE ANO CONTINGENT LIABILITIES Contracts for caoitat exoenditure: Liability under contract for ourenase of snares m The Australian Estates Company Limited Sundry contracts m respect of buildings, plant anc eouipment for wnten no provision has been made in the accounts fer tne year Liability for caoitai uncalled on snares held m subsidiary ana otner companies Contingent liabilities: Secured--m respect of loans to a subsidiary ana an associated company (secured by creditors' debenture stock issued by CSR Ud) Unsecured--miscellaneous Labilities 46.562 27.392 1.122 14.294 2.915 46.562 6.566 7,090 2.487 6.885 900 1.525 3.565 15.501 2.075 4.028 L.aOiiity as seif-insurer--me oarent comoany <s authorised to act as a self-insurer m New South Wales ana South Australia in resoect of Workers Compensation insurance against wnicn it is considered aoeouate provision nas been mace. Legal proceedings have oeen taken ay another comoany against Piioara iron Ltd claiming unspecified damages for alleged contamina tion ay iron ore dust alleged to nave been earned from me Mount Newman jomt venture stock sites. 22 PARTICULARS RELATING TO SUBSIDIARY COMPANIES Ptm tf Itetr- Class if start psratM SUGAR 0IVISI0N New Zealand Sugar Co Ltd Pacminex (NZ) Ltd Cheista Investments Ltd McCaftery Servlets Pty Ltd Macadamia Nuts Pty Ud J NZ NZ J NZ NSW NSW Ord SNZ1 Ord $NZ1 Ord $NZ1 Ord SI 0rdS2 Owatd by CSR % CSR lamt* Nt S CatMtitJn tt 1975 Brtte* irtftt (Itts) Aftw Stftra extra* extra- trtitary trdleary Itma Ittat S5 tr rtctmlli It CSR 1975 1974 SS 100 1.964.000 387.944 387.944 40.276 98.620 -- 40.276 40,276 100 595.045 162.885 157.417 157,000 91 .on 100 63.083 1,049 1.049 2.642.139 591.954 586.686 197,275 189.620 MINERALS 01V1SI09I Pilbara Iron Ltd Govt Alumina Ud Buchanan Sortholt Collftrias Ply ltd Paemintx (Optrations) Pty ltd Pacminex (NSW) Pty Ltd Paemintx (NT) Pty Ltd Paemintx (Old) Pty Ltd Paemintx (SA) Pty Ltd Paemintx (Tas) Pty Ltd Pacminex (Vie) Pty Ud Paemintx (WA) Pty Ud Paemintx Pty Ltd Tons Exploration Pty Ud Mount Gunson Mints Pty Ltd 4 WA 4 WA NSW NSW NSW NSW NT Old SA Tas Vie WA NSW Qfd SA > A Ord SI Ord SI Ord SI Non-nd Ord SI Ord 51 Ord SI Ord SI Ord 51 Ord 51 Ord 51 Ord 51 Ord 51 Ord 51 Ord 51 Ord 51 1.7 74 51 PrtfSi 92.55 100 100 100 100 100 100 100 in in in in 45,214} 22.901.786 10.953,972 f15.664.596) 1.512.974 5.155.538 1.141.640 10,000,on 157.009 75.000 s.on 140.000 oiaon 4.000 sn 1,025,000 (230.070) sn 2 1,550,000 (212.247) 9.774.695 4.l19,5n 2.065.500 1.321226 1.879.751 1.114.204 122.052 54.164 430.168 (230.070) (212.247) 57.150.435 13.353.275 11.883.590 6.754.115 2.495.665 Continued on page 24 23 Piece ef liter* Cftu if then peratiee Not 22 eontiftuM BU1LDIN6 ANO CONSTRUCTION MATERIALS DIVISION Owied ly CSfl % CSfl itrot* s Ceetrilitiei le 1975i fireee* (refit (leu) After Beftre urn- litre* ireieary gieieary itiat Ittme Si Olvifeedt rtceivtd er recenille ly CSfl 1975 1974 S Masonite Corporation (Aust) Pty Ltd Mitcham Properties Pty Ltd Australian Quarries Pty Ltd Gravel & Sand Suppliers Pty ltd Gravel A Sand Suppliers No 1 Pty Ltd (formerly independent Concrete Pty Ltd) Gravel A Sand Suppliers No 2 Pty ltd (formerly independent Concrete (Pendie Hill) Pty ltd) Oia Plastics Pty ltd Midalco Pty Ltd CSfl flooring Sales Pty ltd Asbestos Products (Sales) Pty ltd 01 Holdings Pty ltd Bl (Australia) Pty Ltd Bradford insulation industries Pty ltd Bradford insulation (Old) Pty ltd Bradford fnsutatron (Vic) Pty ltd Bradford Insulation (WA) ltd Dallas Pty Ud Wunderlich Ltd Wundertich Staff Nominees Pty ltd NSW Vic NSW NSW NSW NSW NSW WA Vic NSW NSW NSW I NSW Qld Vie WA WA NSW NSW Ord stock units S2 0rdS2 A A 8 Ord St Ord SI too 100 Ord St 5.351.327 1.119.300 402.081 6.557 44.956 72.393 24.668 388.395 6,067 44.730 70.444 408.000 137.500 22.929 763.500 216.000 Ord S2 ---- Ord $2 Ord S2 too 120.000 10.522 10.278 10.000 10.000 100 4.800.000 9.007 -- 189.000 Ord S2 too 106.305 3.959 3.938 3.509 A A 8 Ord $2 100 1.969 -- -- 0rdS2 100 1,228.359 10.169 10.162 85.000 338.000 A A B Ord $2 (2.365) (2.569) Ord S2 (315.759) (319.556) A Ord A Ord S2 27.373 26.275 OrdS2 108.654 106.634 Ord St 151.877 145.323 0rdS2 ---- Ord SI too 11.335.072 (294.858) (306.140) 388.500 0rdS2 -- 24.062.3S2 259,214 206.906 644.000 1.905.000 OTHER Carta Industries Ltd Carta Australia Ud Waldown Pty Ud Australian National Power Alcohol Co Pty Ltd Commonwealth Distilleries Pty Ltd CSfi Chemicals Ltd Robert Cortett Pty Ltd The Newcastle Chemical Co Pty Ltd CSfl Research Pty Ltd Dry tee (OuMofaW) Pty Ltd Dry lee (NO) Pty ltd Distil Pty ltd Promt CO, Pty Ltd Bentscltd Building Finance Ltd CSfl Provident Fund Nominees Pty Ud Harwood Nominees Pty ltd PatsonPtyLtt Vic Vic vie aid Old NSW NSW NSW NSW Old Qld V* NSW ACT 2 Fiji NSW NSW NSW Srtemertee 4ito*toO of Sovtti Poeino Svgtf urn Ltd TOTAL C 3413 Ord SI Ord SI Ord St Ord 12 Ord SI Ord SI 0rdS2 0fdS2 Ord SI A A B Ord St A A 6 Ord 11 0rdS2 6% Cum Pref S2 Ord SI Ord SI OrdSR OrdS2 Ord SI Ord SI 100 too 100 50.3 too IDO 100 too 100 100 100 100 100 3.407.775 1.842200 20.000 6.779260 2 1,253,554 24,0311 IS.OOOf 12.000 10.000 4 .196 100 2 -- 590.410 66.094 197.082 14.794 141,429 (3.933) (24241) 40.557 84,405 24,017 61 20.724 _ 578,175 64,902 197.082 14.665 141.429 (4.034) (24,253) 38,638 83.92S 24.017 81 566.000 147.000 14.500 747.108 20.000 52,500 20,724 13,364.126 1,151,419 1,115,351 1.559.108 511.500 67,500 9.000 _ 42.000 45,500 676,413 97249.053 1S.3S.865 13.802.835 9.154.497 5,266,701 97.249.053 15,355.865 13.802.835 9.154.497 5.369.055 24 1 Cvrfrt on Ou*in*t* in Stngoeoro t Com*i on Minos* in fiil STATEMENT BY DIRECTORS ;n me opinion of the directors of CSR limited, the profit and loss account is drawn uo so as to give a true and fair view of the profit of the comoany for tne financial year ended March 31 1975: and the Balance sneet is drawn up so as to give a true and fair view of the state of affairs of the company as at March 31 1975: and tne accompanying group accounts are drawn uo so as to give a true and fair view of the profit of the company and its subsidiaries for the financial year ended March 31 1975 and the state of affairs of the company and its subsidiaries as at Marcn 31 1975 so far as they concern members of the company. Signed m accordance with a resolution of the directors R G JACKSON General Manager J W OUNLOP Director Sydney June 23 1975 G 8 KATER Director STATEMENT BY PRINCIPAL ACCOUNTING OFFICER To the best of my knowledge and belief the group accounts with the notes thereto set out on pages 12 to 24 give a true and fair view of the matters required to be dealt with therein by section 162 of the Companies Act 1961. Sydney June 23 1975 S J DRODER Principal Accounting Officer AUDITORS' REPORT TO THE MEMBERS OF CSR LIMITED In our opinion: 'a) the attached accounts, on pages 12 to 24 inclusive, being the balance sheet and profit and loss account of CSR limited, and group accounts, being the consolidated bal ance sheet and consolidated profit and loss account of the company and its subsidiaries, are properly drawn up in accordance with the provisions of the Companies Act 1961. and so as to give a true and fair view of: (0 the state of affairs of the company and of the group as at March 31 1975. and of the results of the company and of the group for the year ended on that date so far as they concern members of the holding company: anc (n| the other matters required by section 162 of that Act to be dealt with in the accounts and in the group accounts: (b) the accounting records and other records, and the registers required by that Act to be kept by the company and by those subsidiaries of which we are the auditors have been properly kept in accordance with the provisions of that Act or in the case of the subsidiaries incorporated in another State or Territory of the Commonwealth and of which we are the auditors in accordance with the provisions of the corres ponding taw of that State or Territory. The names of the subsidiaries of which we have not acted as auditors are: Buchanan Borehole Collieries Pty Ltd McCaffrey Services Pty Ltd New Zealand Sugar Co ltd Chelsea Investments Ltd Pacminex (NZ) Ltd and we have examined their accounts and the auditors' reports thereon. We are satisfied that the accounts of the subsidiaries that have been consolidated with other accounts are in form and content appropriate and proper for the purposes of the prepara tion of the consolidated accounts and we have received satis factory information and explanations required by us for that purpose. No auditors* report on the accounts of any of the subsidiaries was made subject to any qualifications, or included any com ment made under subsection (3) of section 167 of that Act Sydney June 231975 YARWOOD VANE & CO F N Summerhayes Partner CHARTERED ACCOUNTANTS Registered under the Public Accountants Registration Act 1945. as amended C 3414 DIRECTORS' REPORT CONTINUED--STATUTORY REQUIREMENTS in compliance with the provisions of Section 162A of the Companies Act. the oirectors of CSR Limited report as follows: Directors The directors m office at the date of this report are Sir John Ounloo. Sir Gregory Kater. Sir James Vernon. Mr T J N Foley. Mr R G Jackson. Sir John Overall. Mr 0 K Voss. Mr A J CampoeH. Dr D D Brown. Mr 0 N Kelman, Mr M G King and Mr J S Proud. Principal activities The principal activities of the corporations in the group in the course of the year were the production and sale of raw and refined sugar together with the provision of services to the Queensland Government for the Australian sugar industry: tne production and sale of materials for building and construction; mining and mineral exploration: tne production ang sale of industrial chemicals, alcohols and carbon dioxide. During the year there was no significant change m the nature of the activities of the group. Profit The net amount of the consolidated profit of the group for the year, after provision for income tax and after deducting amounts which should properly be attributed to persons other than corporations m the group, was S36.809.000 before deducting extraordinary items of $3,086,000. The extent to which each corporation in me group contributed to the above consolidated profit is: CSR Limited (alter adding back provision tor S losses in subsidiaries $250,000 and after deducting income from dividends on shares in related corporations) before extraordinary items 22.279.000 Subsidiaries before extraordinary items---see Note 22 13.803.000 Plus consolidation adjustment principally relat ing to a credit to deferred income tax 36.082.000 727.000 36.609.000 Subsidiaries acquired Particulars of subsidiaries acquired during the year are: Consideration Net tangible assets at C 3415 Bentoc Ltd date of acquisition SA SA 22 Chelsea Investments Ltd Harwood Nominees Pty Ltd 974 2 974 2 in addition, during May 1974 the parent company increased its 50% shareholding in 8uchanan Borehole Collieries Pty Ltd to 92.65%. the total outlay being $5,155,838 in cash (net tangible assets at date of acquisition $5,469,926). / Transfer to and from reserves or provisions Details of material transfers to and from reserves and provisions of any corporation in the group are shown on page 28 of this report. Share Issues The parent company made a bonus distribution to shareholders on January 15 1975. in the form of fully paid-up shares, of part of the amount standing to the credit of the share premium reserve. The distribution, on the basts of one new fully-paid share for each five shares held, resulted m the issue of 16.823.730 shares of $1.00 each. Following this issue, the issued capital of the company was $100,942,380. Details of snares issued by subsidiaries during tne year are: Company Bentoc Ltd Chelsea Investments Limited Harwood Nominees Pty Ltd DaMteof teaiM Purpose of issue 10,000 Ordinary Initial working capital shares fully paid of new company $1.00 3,000.000 Ordinary shares paid as to SNZ 0.5921 ($A 0.5873) 100 Ordinary shares fully paid $1.00 Debenture stock issue* Creditors debenture stock with a face value of $34 million was issued as security for certain fluctuating overdraft facilities of the parent and an associated company. Creditors debenture siock with a face value of US$48 million was issued m connec tion with the Eurocurrency facility referred to on page 34 of the report. During the year Pilbara Iron Ltd issued debentures as under: Class Reserved stock Tarm 10 years Rats Amount Purpose 10.25% pa $15,000,000 To finance capital expenditure Details of other debenture stock issues are provided on page 34. Dividends The amounts paid or declared by way of dividend by the company to its shareholders since the end of the previous financial year are: As proposed in last year's report, final dividend of 7V cents per share in respect of year ended March 31 1974 was paid July 24 1974. totalling $6,519,195. Interim dividend of 7V cents per share and a bonus divi dend of 1 Yt cents per share in respect of year ended March 31 1975 were paid December 18 1974. totalling $7,570,679. The proposed final dividend of 7% cents per share in respect of year ended March 31 1975 amounts to $7,570,679. Dividends paid to or declared in favour of CSR Limited by subsidiaries in the penod since the end of the financial year are: Company Date Amount Gove Alumina Ltd May 29 1975 $939,875 Dividends paid to or declared in favour of CSR Limited during the financial year are shown in Note 22 of the notes to the accounts. Additional statements Before the preparation of the parent company's accounts for the year, the directors took reasonable steps to ascertain wnat action had been taken in relation to the writing off of bad debts and the making of provisions for doubtful debts, and to cause all known bad debts to be written oft and adequate provision to be made for doubtful debts. At tne date of this report the directors of the parent company are not aware of any circumstances wnicn would render tne amount written off for pad deDts or tne amount of tne provision tor douotfu! debts m tne group inadequate to any suostantiai extent. The directors, before tne profit ana loss account ana oaiance sheet were made out. took reasonable steos to ascertain wnetner any current assets of the holding company other than debts were unlikely to realise in the ordinary course of business tneir value as shown tn the accounting records of tne company ana ascertained that none of such current assets was unlikely to do so. otner than certain items in resoecf of wnicn aoeauate provi sion was made. At tne date of this report the directors are not aware of any circumstances which would render the values attributed to current assets in the group accounts misleading. At the date of this report there does not exist-- (i) any charge on the assets of any corporation in the group wnich has arisen since the end of the financial year and secures the liabilities of any other person: or (ii) any contingent liability of any corporation m the group which has arisen since the end of the financial year, other than for uncalled capital of $693,000 on shares held in an associated company and for a US$3.0 million (SA2.2 million) Eurodollar loan arranged for a subsidiary and guaranteed by the parent. No contingent or other liability of any corporation in the group has become enforceable or is likely to become enforce able within the period of twelve months after the end of the financial year which, m the opinion of the directors, will or may substantially affect the ability of the corporation to meet its obligations as and when they fall due. At the date of this report the directors are not aware of any circumstances, not otherwise dealt with in this report or group accounts, which would render any amount stated in the group accounts misleading. The results of the operations of the group or of any corpora tion in the group during the financial year were not. in the opinion of the directors, substantiate affected by any item, mansaction or event of a material and unusual nature other wise than as referred to in the accounts or this report. There has not ansen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, m the opinion of the directors, to affect substantially the results of the operations ot any corporation in me group for the next succeeding financial year exceot as referred to iajhe accounts or this report. Since me end of the previous financial year no director of CSR Limited has received or become emitted to receive a benefit (other than a benefit included .in the aggregate amount of emoluments received or due and receivable by directors shown m the group accounts, in accordance with the Ninth Schedule, or the fixed salary of a full-time employee of tne company) by reason of a contract mada by the company or 8 related corporation with the director or with a firm of which he is a member, or with a company in which he has a substantial financial interest. Signed in accordance with a resolution of the directors of CSR Limited. R G JACKSON General Manager Sydney June 231975 J W DUNLOP Director G B KATER Director AMOUNTS ANO PARTICULARS OF MATERIAL TRANSFERS TO AND FROM RESERVES OR PROVISIONS Corporation Pertlculars $000 Parent Australian National Power Aiconoi Co Ply Ltd Gravel & Sana Suooiiers Ply Ltd Bradford insulation lndustr.es Ply Ud Bradford insulation (WA) Ltd Carba Australia Ltd CSR Chemicals Ltd Oia Plastics Pjy Ltd Gove Alumina Ltd _ .^ McCaffery Services Pty Ltd S; Masonite Corporation (Austraiia)..^.Ud - Mount Gunson Mines Pty Ltd New Zealand Sugar Co Ltd Pilbara Iron Ltd _ Buchanan Borehole Collieries Pty Ltd Wunderlich Ltd C 3417 _ - Revenue reserve Share premium Final dividend Deferred income tax Current income iax Long service leave Annual leave Douotfui debts--trade Doubtful deois--otner Mineral exoioration Losses m suosidianes Oimmution m value of investments Depreciation Current income tax Current income tax Oeferreo income tax Ooubtful debts--trade Long service leave Depreciation Current income tax Current income tax Deferred income tax Depreciation Current income tax Deferred income tax Long service leave Catalyst reoiacement Depreciation Capital reserve Exchange rethgnreent Deferred income tax Depreciation Current income tax Current income tax Deferred income tax Depreciation Depreciation Current income tax Exchange realignment Current income tax Deferred income tax Depreciation Deferred income tax Annual leave Depreciation Capital reserves Long service leave Annual leave Doubtful debts--trade Sick leave Depreciation >. T From profit and less 3.000 From sucn reserve 16.824 To sucn provision 7.571 To sucn provision 15.552 13,608 2.845 553 239 2.325 1.577 From such provision 250 To sucn provision 250 2.000 3.071 194 103 161 110 118 512 180 422 218 509 344 1.346 322 179 2.531 From such reserve (revaiuatio%ef land) 2.229 ^ From such reserve* To such provision 429 17.418* 4,493> . 135 379. 128. 117 257 338 From such reserve To such provision 362 9.273 From such provision 380 To such provision 3.078 From such provision 1.398 To such provision 7.599 IS 2.076 .S 267 365 From such reserve 150 To such provision 473 ,, 1.471 292 457 ,, 1.347 `Partly ottset Oy transfer of V3.827.000 to future income lax benefits account 28 CSfl L ~i!ec STATEMENT OF SECURITY HOLDERS AS AT MAY 211975 Share capital CSR Limned nas 58.390 shareholders ano 100.942.380 fully said Si ordinary snares. 51% of the shares are held in Australia: 98% are held in Aus tralia ano New Zealand. The coition of me snare capital held by or on benaif of the 20 largest snarenoiders is 28%, Voting rights (Article 73) On a show of hands every person present Qualified to vote wnetner as member or proxy or attorney or representative shall have one vote. Upon a poll every member shall have one vote for every share held by him. Out no member snail have more man 40.000 votes. A memoer entitled to more than one vote need not if he votes use all his votes or cast an the votes he uses in the same way. distribution of shareholders ano shareholdings Registered address Australia New Zealand . United Kingdom Other Number of shareholders 49.490 6.953 1 246 701 58.390 % 84 8 '1 9 2.1 1.2 100.0 Class of holder Male Female Joint male and female Companies .. 23.752 25,637 2.803 6.198 56.390 40.7 43.9 48 10.6 100.0 Slat of holding 1-1.000 .................................. 1.001-5.000 .................... 5.001-10.000 10.001 and over ... 44.629 11,612 1.164 935 58.390 76.4 19.9 2.0 1.7 100.0 Number of shares 91.950.200 7 171.705 1 220.906 599.569 100.942.380 20.515.311 21.2S8.907 2.120.033 57.048.129 100.942.380 14.738.034 23.602,735 7.940.080 54.661,531 100,942,380 % 91.1 7.1 1.2 0.6 100.0 20.3 21.1 2.1 56.5 100.0 14.6 23.4 7.9 54.1 100.0 DEBENTURES AND NOTES Interest rate pa Amounts outstanding Number of holders % of total holding by 20 largest holders Number ot holders by size of holding-- $100-81.000 $1,001-85.000 8S.001-S10.000 . $10,001 and over C 3413 Debentures maturing 1977 1978 12%% $7,775,400 3,753 18% No % . 2329 62.1 1,229 32.7 135 3.6 60 1.6 13% $12,011,600 3.023 36% No % 1.533 50.7 1,175 38.9 197 6.5 118 3.9 3,753 100.0 3,023 100.0 1910 7% $5,407,200 780 55% NO % 386 49.5 284 36.4 39 5.0 71 9.1 780 100.0 Unsecured notes maturing 1975 10% $40,000,000 6.564 50% No % 3.306 50.4 2.591 39.5 426 6.5 241 3.6 6.564 100.0 29 CSR Umitea ana SLDSiCianes SOURCE AND APPLICATION OP FUNDS j Years ended March 31 1975 1974 SOOO's SOOO's SOURCE OP FUNDS During tha year the following funds baeama availabta: Profit after tax (before extraoroma/y items) 36.609 28.8H Depreciation of fixed assets Amount proviaea for income tax 26.3S4 32.884 24.282 28.25f Other non-casn items (558) 4 884 Total funds derived from operations . Minority interests (net) Long-term borrowings Proceeds from sale of assets Share issues .... 95.489 1.294 49.364 6.946 " 153.093 86.23 2.56' 45.08C . 17.535 1.386 152.801 APPLICATION OP FUNDS Theee funds were applied a* follow*: Acquisition of fixed assets Expenditure on toint ventures and partnerships Long-term lending .... ................ 37.663 56.547 6.436 20.133 54.716 4.166 Total outlay on non-current assets . Increase in working capital . . Long-term borrowing repayments ... . Dividends paid ......................................... ............................ Income taxes paid ................................................................................ .............. 100.648 9.055 24.934 14.090 4.388 79.017 50.556 7.386 12.382 3.45S 153,093 152.802 30 The review ot operations continued minerals division activities Major activities 1 t Iron ore: Pilbara iron l:<3 (63% CSR) has a 30% Iinterest in the Mt Newman iron ore venture. Semite end alumina: Gove Alumina ua (51% CSR) nas tne riqn: to a 30% share of aiumma orocucuon at Gove, ana tne so.'e right to exoon bauxite from Gove. > Coal: Buchanan Borehole Collieries Pty Ltd (92.65% f CSR) D'oouces soft coking coal for exoon. Copper: Mi Gunson Mines Pty Ltd (100% CSR) proouces coooer concentrates for exoon. Tin: Kaiuara Mining Coro Pty Ltd (35% CSR) is associated with Indonesian interests m the operation of ailuviai tin mines on Bangka island. Indonesia. Iron ore Total shipments of iron ore by the Mt Newman venture (in which CSR's subsidiary Pilbara Iron Ltd has a 30% interest) were: Thousand dry tonnes Year ended March 1974 1975 % change Destination Japan 20,643 21,455 +4 Europe 3,564 4,653 + 31 Australia 3,230 4,130 +28 Other 210 245 + 17 Total 27,647 30,483 + 10 Industrial unrest in the earlier part of the year caused serious loss of production, in a series of stoppages. Demand for iron ore was strong for most of the year, but towards the end there were signs of weakening because of the economic downturn in Europe and Japan. Price rises from September 1 1974, of US$2.25 a ton (about 24%), were obtained under ail our Japanese high-grade ore contracts, with proportionate increases in Japanese low-grade ore contracts. These recognised the extraordinary cost increases and the changes in exchange rates since the contracts were made. Prices under some Japanese contracts were raised by a further 71/2 % from April 1 1975. Higher prices were also obtained for contracts with other buyers during the year, and for a substantial proportion of shipments to Europe in 1975. However, the further rapid rises in costs over the past year have seriously eroded the benefits of these increases in revenue. Construction to give an annual capacity of about 40 million tonnes is well advanced, and should be com pleted by mid-1976. Project capital expenditure during the year totalled $83.6 million, of which Pilbara Iron's share was $25.1 million. The total authorised to date by the joint venturers for construction, exploration, replacements U 3420 Deputy general manager D D Brown (second from left), with minerals division general managament (from lelt): R N Salman. E F Heroert and N L Carter and working capital (including the expansion to 40 million tonnes) is $676 million. Bauxite and alumina Shipments by Gove Alumina Ltd for the year were: Thousand dry tonnes Year ended March 1974 1975 % change Bauxite 1,437 1,723 + 20 Alumina 162 245 +51 Japanese buyers have agreed to take 6 million additional tonnes of bauxite during the ten years beginning July 1 1974, above the previously contracted total of 32.5 million tonnes. Despite cutbacks of aluminium output in Japan, total bauxite shipments during the current year are expected to be about the same as last year. Alumina production, in which Gove Alumina has a 30% share, was 876,400 tonnes, compared with 594,300 tonnes for the previous year. During the last quarter of 1974 the alumina plant operated at slightly more than its design capacity of 1 million tonnes a year, but scheduled downtime for maintenance reduced pro duction for the first quarter of 1975. TOTAL MT NEWMAN IRON ORE SHIPMENTS C000 try toniwe) 27 $47 20000 19138 22 960 10 000---1-2--9-1-7 1971 1972 for year ended March 31 1973 1974 1975 31 TOTAL GOVE SHIPMENTS cooo tonnt 2 000- 3au*ne 1 723 Atgmina I 1 437 1 500 1 000500' 1 075 693 815 541 266 0 00 1971 1972 year ended Marcfi 31 1973 1974 1975 Mitsui Alumina of Japan, in which Gove Alumina has a 10% shareholding, has begun to expand its alumina plant, to be finished in 1976. Gove Alumina subscribed approximately $A225,000 in August 1974 and expects to make similar payments in 1975 and 1976. Gove Alumina's profit was below that of the previous year. As explained in last year's report, the reduction i was largely due to special alumina pricing arrange ments in the early years of the project. i Coal In the year ended March 31 1975 Buchanan Borehole Collieries Pty Ltd (92.65% CSR) mined 789,000 tonnes of soft coking coal. 475.000 tonnes more than last year. Expansion to increase production to 1 million tonnes a year is nearly finished. With demand exceeding iron on train batwaan Nawman and Port Had!and, a present capacity, further expansion is being con joumay ot 430 km sidered* Loading bauxita lor axport at Gov* Copper The new copper mine andsconcentrating plant in the Cattle Grid'ared-new MJ.GttfWBhbegan on schedule in AuquM$^AfttfceaityjJatayd' due to unseasonai rains and- plant commissioning, mining and ore treat ment operations settled down to the expected rate of 1,500 tonnes of ore a day. The mine produced 4,000 tonnes of copper in concentrates for export to Japan under contract. At currently depressed world copper prices, the operation is recovering operating costs but not yet yielding a return on its investment. In the long run the venture is expected to be satisfactory. C 34. Tin Alluvial tin mines on Bangka island, in which CSR is associated with Blue Metal Industries, Ready Mixed Concrete and Indonesian interests, operated profitably. Two dredges to supplement the existing gravel method of mining are being built. Exploration on and off shore continues. The International Tin Council has recently put restrictions on tin output. The Bangka Island venture can only remain profitable if it gets adequate quotas. 32 CHEMICALS AND CARBON DIOXIDE industrial chemicals CSR Chemicals Ltd (50.3% CSR) experienced strong demand tor its products m the first half of the year, but not after September and sales volume for the year was 7.9% down on last year. Because of severe problems in the textile industry, cellulose acetate sales in particular were drastically lower. During the earlier part of the year we were short of some feedstocks and could not satisfy all orders from Australian customers. These shortages were due to industrial unrest in the oil and shipping industries. Customers turned to imports and ordered heavily. These imports overhung the market in the last part of the year, when demand was slack. In these circumstances, with surplus capacity for most products available after September, additional attention was directed to exports. Overseas sales were 8.7% higher than in the previous year. Distillery products Sales of industrial alcohol in Australia and New Zealand rose in the first half of the year, but in the second half eased notably as user industries were affected by recession. Exports of unrefined beverage alcohol to Japanese customers declined slightly. In the longer term we expect exports to grow, and our distillery at Sarina. north Queensland, is increasing its production capacity. Rum sales were affected by another steep rise in excise duty and did not increase on the previous year. Carbon dioxide and freezing services Sales of COz by Carba Australia Ltd continued to grow. Development continues of specialised eouipment using COz for food freezing and chilling, and several new installations have begun operating. Dry Ice (Queensland) Pty Ltd became part of the Carba group at the beginning of the year. In December, cyclone Tracy caused significant damage to Carba's cold stores in Darwin. Thanks to extraordinary efforts by the staff and employees, Carba kept going throughout the emergency and supplied essential community service, producing ice and main* taming freezing services for food. Shipping services Australian Chemship Line (50% CSR and managed by CSR) operates two chartered chemical tankers. This activity has continued to produce a modest profit, but results this year were affected by industrial stoppages and by mechanical problems with both vessels. Assistant general manager R W Harvey (centre), with finance committee (from leftl: J G Willis, treasurer; s J DroOer. controller; J H TuckhelO. secretary: ana P H T Lovell, assistant treasurer FINANCE Long-term borrowings A new debenture trust deed was adopted during the year, and no further debentures will be issued under the 1962 deed. In September 1974 we made a cash and conversion offer of debentures to the holders of shares, deben tures and notes. Terms offered were for three years at 12V2% pa. and for four years at 13% pa. The issue, for $10 million with the right to oversubscriptions totalling $5 million, was fully subscribed up to $15 million. Debentures totalling $7.2 million matured on March 31 1975, and holders were offered conversion to a new issue for 2Vi years at 12% % pa, the maturity date being the same as for one of the September 1974 issues mentioned above. A total of $4.8 million was converted. Our half-yearly report noted the arrangement of a US$40 million Eurocurrency loan facility. This was later increased to US$50 million. The facility extends for seven years with interest rates fixed at three or six-monthly intervals. By the end of the financial year a total of US$20 million had been drawn down. Since then a further US$15 million has been drawn, making total drawings equivalent to about $A26 million. Another facility for US$13 million, also on a floatingrate basis, was arranged with the Australian industry Development Corporation (AIDC). There have been no drawings yet. Accounting standards C 3 4^. 3 The only change in accounting standards issued during the year by the accounting bodies to have a significant effect on CSR was in respect of tax effect accounting, in essence, the standard encourages the setting up of two accounts. One, styled 'Future Income Tax Benefits,' rep resents the income tax effect of trading fosses and various charges against profit and loss which are not available as deductions against taxable income of the group until some future date. The other, styled `Deferred Income Tax Expense,' reflects the income tax effect of transactions which have the opposite effect; that is, 34 where deductions available against taxable income are not charged against current profits. The initial amounts to establish these two accounts in respect of prior year transactions are obtained by a direct adjustment of unappropriated profits carried forward. In 1974 CSR adopted tax effect accounting in respect of timing differences which occurred that year, and made a retroactive adjustment in respect of timing differences on consolidation resulting from deductions allowed to the parent over a period of years through Section 77AA and Section 77D declarations made in its favour by certain mining subsidiaries. For 1975 we fully adopted the new current accounting standard on tax effect accounting, and this is reflected in the accounts for the year including the Statement of Accounting Methods on page 14. During the year the rate of company tax was reduced from 47%% to 45%, with the reduced rate applying to both 1974 and 1975 profits. In 1975 our income tax expense for the full year was reduced by $1.5 million. As explained in our half-yearly report, the reduction in accumulated provision for current and deferred tax. amounting to some $3.3 million after minority interests, has been included in the year's accounts as an extra* ordinary item. PROTECTION OF THE ENVIRONMENT For ongoing operations and for all new activities. CSR has adopted environmc ital protection standards for use in internal planning. These standards often go beyond what is needed to comply with present legal requirements. They take into account anticipated changes in community values. Some of our factories were built when the need for proper protection of the environment was not widely acknowledged. Substantial expenditures continue to be incurred in bringing them up to our established stand ards. Major works completed during the year included an effluent treatment plant at Goondi sugar mill and the installation of equipment at Macknade mill to meet the chimney emission standard. Many smaller jobs were completed in other factories. Laft: Effluent treatment ponds at Victorn sugar mill nttr Ingham, north Queensland Atom: Wtati gas in cinerator at CSft Chemicals' Mayfield plant, mar Newcastle Right: CSR branch oftica, Adalaida Balow toft: School children at Nhuiunbuy, tha town of $.000 people built to support tha bauxite-alumina pro/act at Gove Balow right: A drilling rig operating near tha Mr Gunson opan cut copper mine in central South Australia 35 THE AUSTRALIAN ESTATES COMPANY LIMITED History Australian Estates was incorporated in London in 1894 as The Australian Estates and Mortgage Company Ltd. Its nucleus was the wool selling, stock, agency and. pastoral interests operated by The Union Mortgage and Agency Company of Australia Ltd. -That company had developed from a stock and station agents' partnership started in Australia some 40 years earlier. Australian Estates later diversified into other fields, adopting its present name in 1936. Structure Australian Estates itself owns substantial assets and is the parent company of 39 subsidiaries (some of which are dormant) and four associated companies in which its shareholding exceeds 20%. The parent and three major subsidiaries were incorporated in the United Kingdom: all others were incorporated in Australia. All subsidiaries are fully owned, with the exceptions of The Haughton Sugar Company Ltd (65% Australian Esfaites), E M Oenny (Holdings) Ltd (56%), and Calcium Products Pty Ltd (55%). As at December S1 1973, about 86% of the company's assets were located in Australia. Operations Sugar: Australian Estates owns large sugar mills at PWystowe, near Mackay, and Kaiamia. near Townsville. The Haughton Sugar Company Ltd owns invicta Mill, near Townsville. Sugarcane is grown on Kaiamia estate. The company supplies about .11% 'Of total Australian raw sugar production. Over recent years about half of Australian Estates' group profit was eamedTfbm sugar. Pastoral? `jfeg The company.-operates 20 grazidjproperties in flS*- NortheimTerrHory,-Queensland and New South Wales. Of total holdings of 4 million hectares, 3% is freehold and the remainder leasehold. - Twelve of the properties run onty cattle, and there are eight sheep properties--five in Queensland and three in New South Wales. These include three well-known Merino studs--Terrick in Queensland, and Raby and Oolambeyan in New South Wales; all have achieved notable show successes. Research has been carried out into crossing tra ditional Shorthorn cattle stock with Santa Gertrudis and Brahman types for heat and tick resistance, and for high carcase weights. Agency: Woolbroking, and stock and station agency business is conducted in Victoria. New South Wales and Queens land. through 70 country branches, three city offices, and three wool stores in Melbourne. Portland and Brisbane, income is earned from commission and hand- 36 G H Caiman, ganaral managar Tha Australian Bstatat Co Ud ling charges on the sale of wool, livestock, supplies, real estate and insurance. Over the past three years, average annual turnover through woolbroking and agencies was $179 million, and included: 147.000 bales of wool, 3,000.000 sheep, and 608.000 cattle The company provides a range of livestock services and professional advice on pasture improvement, animal husbandry and related matters. City buildings: Australian Estates initiatect- a' 22-storey office block development in William Street, Melbourne, and a 24storey block in Creek Street. Brisbane. Both are on sites owned Py the company. The Melbourne project will be completed about mid-1975, Brisbane 12 months later. jii. Through EK1slr Denny (Holdings) Ltd, in which it owns 56% of issued ordinary shares, the company produces and markets a wide range of food products, principally based on pig meat. Factories are in Northern Ireland and the Republic of Ireland, and it acts as agents in other countries for the importation of bacon, beef and allied products. Australian Estateajhas investments with a book value of about $2.4 million-in public companies, and some associated companies. These include a substantial interest in three prime properties in central London through a subsidiary, Estates House Ltd. Some statistics Provisional at December 31 1974 Capital Issued and fully paid (con verted from Sterling) $5,660,000 Profit after tax (before extraordinary items) $9,040,000 Livestock numbers at December 31 --Cattle 217,000 --Sheep 223,700 Investments (at book value) $2,440,000 Net tangible assets (book value) $49,000,000 OPERATING DIVISIONS SUGAR Divisional general management J G CAMPBELL GAGEMM6LL-SMITH A M HBRTZBERG J W LAURIE Group* and associated companies G H COLMAN General manager Australian Estates Lid RW CORBEN Chief manager retmed products grouD G V KELLS National manager consumer products grouo G LORO Cruel manager m>tis grouo WS OLIVER Ch-el manager export marketing grouo W P RALPH Managing director New Zealand Sugar Co Limned Divisional aanric** J A BARRINGTON Chief manager marketing administration A C CLARSON Chief manager shtpomg services A J CANS Controller A S HONEY Chiel manager capital works RJ SOMERVILLE Chief manager commercial services OS WOODMAN Chief manager administration and staff Branch manager* JR BRENNAN Brisbane G M R DAY Adelaide C R LEITH Perth L M SUMMERBELL Melbourne London representative B OOWLING CORPORATE FUNCTIONS BUILDING AND CONSTRUCTION MATERIALS Divisional general management a j Oliver a V SHAW Groups and associated companies A L CHAVE General manager Ready Mixed Concrete Lid (50% CSR) D J GOODALL General manager Bradford Insulation Industries Ply Ltd C SHOVES General manager Wunoemcn asoestos cement grouo RH HUNTER General manager Rondo Building Services Piy Limited (50% CSR) AC LOCKE Grouo manager Wunceruch Ltd C LUOOWlCI General manager Wunderlich aluminium window grouo P J MATHLIN General manager vmyt flooring J H MATTHEWS General manager building oroducts group EVMEAO Managing director Pyneboard Ply Ltd (50% CSR) JC MILTON General manager Hardboaras Aust Ltd (50% CSR) SS PARKER General manager Australian & Kandos Cement Holdings Ltd (50% CSR) fi J PlCKRELL General manager gypsum products DW SULLIVAN Oeouty general manager Reedy Mixed Concrete Ltd (50% CSR) Divisional services 0 C EBERT Planning officer G 0 GRANT General commercial manager DMUROEN Controller RJTHOMPSON General marketing manager P R WHITELEY Chief engineer MINERALS Divisional general management NLCARTER P N SELMAN E F HERBERT CeDury gene/a' manager Groups and associated companies W A BENNETT General manager Pitbara iron Ltd j JOHNSTONE Managing director Buchanan Borenoie Collieries Ptv Ltd G C 0`FARRELL General manager Gove Alumina Lid K H STACEY General manager Mt Gunson Mines Pty Ltd Divisional service* M W H HOWE Controller R L MULLER Development manager j H RATTIGAN Chief geologist G TANGIE Manager petroleum group P C THOMAS Manager Pacmmex Pty Ltd CHEMICALS AND CARBON DIOXIDE JWARNOLO General manager Caroa grouo J EG ESSERY General manager CSR Chemicals Ltd P A HANKS General manager distillery division PERSONNEL, J FBLAXLANO Director of staff administration BL BRENNAN Chief industrial counsel I G R BURGESS Chief manager personnel P RAPHAEL Chief staff officer C 3427 38 FINANCE RW HARVEY Assistant general manager JG CAREY Manager corporate affairs _ SJDROOER Controller F N LEWIS Chief legal officer ; JF NEWELL Chief accountant J H TUCKP1ELD Secretary JG WILLIS Treasurer OTHER B I ALDRICH Planning officer A C BROWNE Chief Duplicity officer C W OAVIS Chief chemist A W McAULEY Heed new business division KL SUTHERLAND Oirector of research As at May f !975 people and organisation The chart opposite shows a number of senior officers mo their positions, arranged to indicate broadly the organisation of the CSR group. Because it is an outline only, and the group is diverse and complex, there are many senior officers whose names do not appear. Their omission does not reflect the level of their responsibilities. The general management of the CSR group is exer cised by five men who share many of the duties of the chief executive. Working with the general manager, each deputy general manager contributes to the general management of the whole group and each also takes specific responsibility for part of the group. As from April 1 1975, the organisation of some activi- ies and general management responsibilities for them have been re-arranged to meet changing needs. The mam changes are reported below. Corporate functions ffective management of matters which bear directly upon the people employed within the group continues to be seen as a major challenge. With changing community values and expectations, substantial resources need to be applied to improving working relationships and the way work is organised and done. Occupational health, safety and proper regard to good environmental practice demand continuous attention. The staff, industrial, employee relations, training and associated functions have therefore been strengthened. Together with the principal technical functions, they now represent the major specific responsibility of deputy general manager, Mr M G King. Operating divisions C 3423 Continuing the established direction of organising CSR on the basis of major product groups, two new divisions have been set up. ----------- A building and construction materials division brings together all activities and investments of the CSR group in building materials, cement, concrete and quarrying. Division general management reports to deputy general manager. Mr B N Kelman. All present operations, development projects, invest ments and exploration in minerals and petroleum have been grouped in a minerals division. Division general management reports to deputy general manager, Dr D D Brown. The scope of the sugar division, which was formed in April 1974. includes all of the group's rural and related activities. The integration of Australian Estates within the division is now proceeding. Division general man agement reports to deputy general manager, Mr A J Campbell. Each of the three major divisions is being equipped with its own functional services and with resources to plan and to seek growth in its established product area. Mr King has general management responsibility for the distillery and Carba groups and for CSR Chemicals. The new business division reports to Mr Kelman. SAFETY The provision of safe working conditions and proper training to avoid workplace accidents is a prime respon sibility of management at all levels. CSR's safety record compares well with results achieved by other companies in Australia and over seas. However, safety performance in the past year was not as good as in the previous year. Other com panies have reported the same trend. New initiatives are being taken to regain CSR's previous record of progressive improvement. Many establishments in the group nevertheless reported excellent safety performance, with 29 out of 94 working the full year without a serious injury. CSR Chemicals' Rhodes factory became the third in the CSR group to achieve two million consecutive manhours without lost-time injury. There are only 17 such 'double safety millionaires' in Australia. IQ Lemmgton underground colliery, neer Singleton in New South Welea. opereted Dy Buchanan Borehole Collieries which is currently mcreesing ns production capacity LOOKING TO THE FUTURE Sustained and profitable growth of the company in resource-based industries is a key objective of CSR's forward planning. To this end. each operating division seeks to enlarge its activities in its broad product area. Substantial effort is applied to developing new products and new markets, and to improving existing products and processes. Part of the work of the central research laboratories is in support of division growth strategies. However, emphasis in corporate research is directed towards the development of knowledge and understanding that will assist decision-making about entry to business fields not presently engaged in by the divisions. Similarly, the new business division assists divisions but is primarily concerned with opportunities for growth in new fields. Some current activities C 3429 Acquisition of Australian Estates provides the sugar division with new opportunities for growth in rural industries. Planning of ways to develop these is in hand. The sugar division is developing the macadamia orchard project. Increasing quantities of nuts are avail able for test marketing. Mills and refineries are adopting improved production processes based on their technical research and development work. One such is an ion exchange pro cess for decolourising sugar in refineries. This method has advantages over the traditional use of char. The building and construction materials division, in its research laboratories, is examining possible new 40 products and improvements to existing ones. Investiga tion continues of alternative raw materials for insulation, including glass fibre products of the Bradford group. The minerals division carries on an active exploration programme and evaluates prospects either initiated by the division or brought to it by holders of mining tene ments. We are doing further work on the feasibility of developing the Muchea bauxite deposits in Western Australia. An alumina plant with an initial capacity of 800,000 tonnes a year is being studied and an Iranian organisation is considering construction of a related aluminium smelter in Iran. Ways of extending our interests in energy resources are being examined. A W UcAuley. heed ot new business division > Pleystowe raw sugar mill on the Pioneer River near Maekay. Queensland. The mill is operated