AMOTIV LIMITED - AGM Information 2007

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24 September, 2007

Manager, Company Announcements, Australian Stock Exchange Limited, Level 4, 20 Bridge Street, Sydney NSW 2000

Dear Sir,

In accordance with the Listing Rules, please find attached:

Chairman’s letter to Shareholders
Notice of Annual General Meeting and Explanatory Statement
Proxy Form
Annual Report to Shareholders – including Directors’ Report, Financial Statements, Directors’ Declaration, Audit Report and other information required under the Listing Rules.

The package including the Annual Report will be forwarded to shareholders on 24 September 2007.

Yours faithfully,

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Malcolm G Tyler

Company Secretary

Att:

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000001 000 GUD MR JOHN SMITH 1 FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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All correspondence to: Computershare Investor Services Pty Limited GPO Box 2975 Melbourne Victoria 3001 Australia Enquiries (within Australia) 1300 850 505 (outside Australia) 61 3 9415 4000 Facsimile 61 3 9473 2500 web. q ueries@com p utershare.com.au www.computershare.com

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24 September, 2007

Dear Shareholder,

On behalf of the Board of Directors, it is my pleasure to invite you to attend the Annual General Meeting of Shareholders of GUD Holdings Limited to be held on Friday 2 November 2007.

The meeting will be held at 11.00am at the RACV Club, Level 17, 501 Bourke Street Melbourne.

If you are able to attend the meeting it will facilitate your registration if you bring this letter with you. Should you be unable to attend, you are encouraged to exercise your vote by proxy on the accompanying form. Proxies may be sent by facsimile or post as set out in the details attached to the Notice of Meeting.

At the conclusion of the Meeting, you will be able to join with the Directors and staff in light refreshments and view some of the product displays.

I look forward to welcoming you at GUD’s Annual General Meeting.

Yours sincerely,

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Clive Hall Chairman

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GUD Holdings Limited ACN 004 400 891

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NOTICE OF ANNUAL GENERAL MEETING

The 2007 Annual General Meeting of GUD Holdings Limited (the Company) will be held at the RACV Club, Level 17, 501 Bourke Street, Melbourne on Friday, 2 November 2007 at 11.00 a.m. Registration will commence at 10.00am

Ordinary Business

1. Financial statements and reports

To receive and consider the Financial Report of the Company and the Reports of the Directors and Auditor for the year ended 30 June 2007.

Information for Shareholders

Attendance at the meeting

If you are planning to attend the meeting, please bring the Chairman’s letter and proxy form with you to facilitate registration.

Voting

2. Re-election of Directors

To re-elect Directors in accordance with Rule 35(c) of the Company’s Constitution.

2.1 Mr Ross Herron retires and, being eligible, offers himself for re-election.
2.2 Mr Peter Thomas retires and, being eligible, offers himself for re-election.

Details of the persons seeking re-election are set out in the Explanatory Notes to this Notice of Meeting .

3. Remuneration Report

To consider, and if thought fit, pass the following resolution as an ordinary resolution:

‘That the Remuneration Report for the year ended 30 June 2007 (as set out in the Directors’ Report on pages 25 to 33 of the 2007 Annual Report) be adopted.’

(The vote on this resolution is advisory only)

For the purposes of voting at the meeting, the Directors have determined that persons holding shares in GUD Holdings Limited registered as at 7.00pm in Melbourne on 31 October 2007 will be treated as shareholders of the Company.

Appointment of proxies

A proxy form accompanies this Notice of Annual General Meeting.

A shareholder entitled to attend and vote is entitled to appoint not more than two proxies. A proxy need not be a shareholder. Where the Chairman is appointed proxy, he will vote in accordance with the shareholder’s directions as specified on the proxy form or, in the absence of a direction, in favour of the resolutions contained in the Notice of Meeting.

Where a shareholder wishes to appoint two proxies, an additional proxy form may be obtained by contacting the Company’s Share Registry. A shareholder appointing two proxies may specify the proportion or number of votes each proxy is appointed to exercise. If a shareholder appoints two proxies but fails to specify the proportion or number of votes that each may exercise, each person appointed may exercise half the member’s votes. Fractions of votes are to be disregarded.

To be valid, the proxy form, and any authority under which the form is signed, must be received by the Company or the Company’s Share Registry prior to 11.00am Wednesday 31 October 2007. Proxies may be returned by mail in the reply paid envelope provided, by hand to 452 Johnston Street, Abbotsford, Victoria 3067 or by facsimile +61 (0) 3 9473 2555.

By order of the Board

Share Registry

Computershare Investor Services Pty Limited GPO Box 242,

Malcolm G. Tyler Company Secretary

Melbourne 24 September 2007

Melbourne Victoria 3001 Australia Yarra Falls, 452 Johnston Street, Abbotsford Victoria 3067 Australia Enquiries within Australia – 1300 750 505 Enquiries outside Australia - +61 3 9615 5970 Website – www.computershare.com Email: [email protected]

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EXPLANATORY NOTES

Item 1 – Financial statements and reports

The financial statements of the Company and its controlled entities for the year ended 30 June 2007 and the Directors’ Report and Auditor’s Report are set out in the GUD Holdings Limited Annual Report 2007.

Neither the Corporations Act nor the Constitution of the Company requires a vote of shareholders to approve these Reports.

This item is intended to provide an opportunity for shareholders to raise questions on the Reports and on the performance of the Company generally. In addition, a reasonable opportunity will be given to members of the meeting to ask the Company’s Auditor questions relevant to the conduct of the audit, the preparation and content of the auditor’s report, the accounting policies adopted by the Company in relation to the preparation of the financial statements and the independence of the auditor in relation to the conduct of the audit.

P G Thomas AM, B.Com Age 65

Non-executive Director since 24 June 2002 and a member of the Audit & Compliance Committee, Remuneration Committee and Nominations Committee.

Mr Thomas is an experienced company director with a background in automotive manufacturing. He is currently a director of Australian Super, an Australian Industry Group Emeritus National Councillor and Chairman of the Victorian Skills Commission. He was a Non-Executive Director of Pacifica Group Limited from June 2004 until March 2007.

Mr Thomas is former Chairman of Victorian Manufacturing Industry Consultative Council (retired November 2002), Melbourne Port Corporation (retired April 2003) and a Councillor of RMIT University (retired December 2004). Mr Thomas was formerly Managing Director of Holden’s Engine Company and Executive Director of Planning and External Affairs with Holden Limited.

Further details regarding Mr P G Thomas are set out on page 36 of the Annual Report.

Item 2 – Re-election of directors

Rule 35(c) of the Company’s Constitution requires one-third of the Non-executive Directors of the Company to retire by rotation every year; however, they are eligible for re-election.

This year two Directors, Mr R M Herron and Mr P G Thomas are due to retire. Being eligible, they each offer themselves for re-election.

Profiles of both directors follow:

R M (Ross) Herron FCA, FAICD Age 57

Non-executive Director since 17 June 2004. Appointed Chairman of the Audit & Compliance Committee on 17 June 2004. He is also a member of the Remuneration Committee and the Nominations Committee.

Mr Herron is an experienced company director with a background in Chartered Accounting. He is a director of Royal Automobile Club of Victoria (RACV) Limited, Heemskirk Consolidated Limited, Select Harvests Limited, and a major industry superannuation fund. He is the former National Deputy Chairman of Coopers & Lybrand and a former partner of PricewaterhouseCoopers (retired 2002).

Further details regarding Mr R M Herron are set out on page 36 of the Annual Report.

Board Recommendation

As part of its ongoing performance review process, the Board considered the contributions of each of Mr R M Herron and Mr P G Thomas to the Board and its Committees.

The Board considers both Mr R M Herron and Mr P G Thomas to be independent directors.

The Board (other than Mr R M Herron) unanimously recommends that shareholders vote in favour of the resolution to re-elect Mr R M Herron.

The Board (other than Mr P G Thomas) unanimously recommends that shareholders vote in favour of the resolution to re-elect Mr P G Thomas.

Item 3 – Remuneration Report

The Corporations Act requires a non-binding resolution to be put to shareholders for the adoption of the Remuneration Report. The Remuneration Report is set out on pages 25 to 33 of the GUD Holdings Limited Annual Report for the year ended 30 June 2007 and is also available from the Company’s website (www.gud.com.au).

The shareholder vote on this resolution is advisory only and does not bind the Directors of the Company. However, the Board will take the discussion on this resolution and the outcome of the vote into consideration when reviewing the remuneration practices and policies of the Company.

Board Recommendation

The Board unanimously recommends that shareholders vote in favour of the resolution.

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Mark this box with an ‘X’ if you have made any changes to your address details (see reverse)

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000001 000 SAM MR JOHN SMITH 1 FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Appointment of Proxy

I/We being a member/s of GUD Holdings Limited and entitled to attend and vote hereby appoint

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the Chairman of the Meeting OR (mark with an ‘X’)

Proxy Form

All correspondence to: Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia Enquiries (within Australia) 1300 850 505 (outside Australia) 61 3 9415 4000 Facsimile 61 3 9415 2555 www.computershare.com

Securityholder Reference Number (SRN)

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I 1234567890 I N D

If you are not appointing the Chairman of the Meeting as your proxy please write here the full name of the individual or body corporate (excluding the registered securityholder) you are appointing as your proxy.

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the Annual General Meeting of GUD Holdings Limited to be held at RACV Club, Level 17, 501 Bourke Street, Melbourne on Friday 2 November 2007 at 11.00am and at any adjournment of that meeting.

Voting directions to your proxy - please mark

X to indicate your directions

Item 1. Financial Statements and Reports

Item 2.1. Re-election of Mr Ross Herron as a Director
Item 2.2. Re-election of Mr Peter Thomas as a Director
Item 3. Remuneration Report

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No resolution required
For Against Abstain
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The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business.

If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

Appointing a second Proxy

I/We wish to appoint a second proxy

Mark with an ‘X’ if you wish to appoint a AND % OR second proxy.

State the percentage of your voting rights or the number of securities for this Proxy Form.

If you are appointing a second proxy, both forms must be returned together in the same envelope.

Lodge by: 11.00am Wednesday 31 October 2007

PLEASE SIGN HERE This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Individual/Sole Director and Director Director/Company Secretary
Sole Company Secretary
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In addition to signing the Proxy form in the above box(es) please provide the information below in case we need to contact you.

/ /

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Contact Name

Contact Daytime Telephone

Date

1 3 P R

G U D

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How to complete this Proxy Form

1 Your Address

This is your address as it appears on the Company’s share register. If this information is incorrect, please mark the box and make the correction on the form. Securityholders sponsored by a broker (in which case your reference number overleaf will commence with an ‘x’) should advise your broker of any changes. Please note, you cannot change ownership of your securities using this form.

2 Appointment of a Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If the individual or body corporate you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the full name of that individual or body corporate in the space provided. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a securityholder of the Company. Do not write the name of the issuer company or the registered securityholder in the space.

3 Votes on Items of Business

You may direct your proxy how to vote by placing a mark in one of the three boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

4 Appointment of a Second Proxy

You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the Company's share registry or you may copy this form.

To appoint a second proxy you must:

(a) indicate that you wish to appoint a second proxy by marking the box.
(b) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.
(c) return both forms together in the same envelope.

5 Signing Instructions

You must sign this form as follows in the spaces provided:

Individual: where the holding is in one name, the holder must sign.

Joint Holding: where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: to sign under Power of Attorney, you must have already lodged this document with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

If a representative of a corporate Securityholder or proxy is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be produced prior to admission. A form of the certificate may be obtained from the company's share registry or at www.computershare.com .

Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below by 11.00am Wednesday 31 October 2007 being not later than 48 hours before the commencement of the meeting at 11.00am on Friday, 2 November 2007. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Documents may be lodged using the reply paid envelope or:

IN PERSON Registered Office - 245 Sunshine Road Tottenham VIC 3012 Share Registry - Computershare Investor Services Pty Limited, Yarra Falls, 452 Johnston Street, Abbotsford VIC 3067 Australia BY MAIL Registered Office - 245 Sunshine Road Tottenham VIC 3012

Share Registry - Computershare Investor Services Pty Limited, GPO Box 242, Melbourne VIC 3001 Australia BY FAX 61 3 9473 2555

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GUD HOLDINGS ANNUAL REPORT 2007

4 The Chairman’s and Managing Director’s Review
8 Summary of Operations
10 Review of Business: Consumer Products; Automotive Products; Security Products; Water Products
18 Finance Report
20 Corporate Governance
25 Remuneration Report
34 Directors’ Report
36 Board of Directors
37 Financial Statements
77 Additional Shareholder Information
78 Shareholder Services and Information
79 Financial Summary and Ratios
80 Corporate Directory
81 Financial Calendar 2006/07

GUD HOLDINGS LIMITED ABN 99 004 400 891

Registered Offi ce 245 Sunshine Road, Tottenham Victoria 3012 Telephone: (03) 9243 3333 Facsimile: (03) 9243 3300 Email: [email protected] Internet: www.gud.com.au

Share Registry

Computershare Investor Services Pty Limited Enquiries within Australia: 1300 850 505 Enquiries outside Australia: +61 3 9415 4000 Investor enquiries facsimile number: +61 3 9473 2500 Yarra Falls, 452 Johnston Street Abbotsford Victoria 3067 Postal Address: GPO Box 2975 Melbourne Victoria 3001

Website: www.computershare.com Email: [email protected]

Annual General Meeting

The Annual General Meeting of GUD Holdings Limited will be held at the RACV Club, Level 17, 501 Bourke Street, Melbourne on Friday, 2 November 2007 at 11.00 a.m. The Notice of Meeting containing all resolutions and a proxy form is enclosed with this Report.

Strategic Direction

GUD Holdings is an active, operational manager of a number of Australia’s leading consumer and industrial products companies. The Group’s principal skills are in product design and development, manufacturing and sourcing, supply chain optimisation and brand management.

GUD’s business profi le includes a combination of own-manufacturing and product sourcing, which is regularly reviewed as economic and industry conditions vary. Operations are actively restructured to ensure that they continue to meet increasingly competitive business conditions.

The Group’s primary strength is its portfolio of highly regarded, market leading brands. The Group greatly values new product development and innovation, believing that this is fundamental to generating long-term shareholder returns.

Growth in the businesses is being pursued through a blend of internally-generated innovation projects, new lines of business and complementary acquisitions.

GUD’s primary objectives are to produce long-term shareholder returns above the cost of capital and to maximise the value of its brand portfolio for the benefi t of shareholders.

Signifi cant Results and Activities for 2006/07

Sales increased 12% to $518.7 million, driven by Water Products’ sales growth of 54% to $148.8 million.

Sunbeam market share grew appreciably in Australia and New Zealand, refl ecting the appeal of its product range to both retailers and consumers in both markets.
Water Products’ Earnings Before Interest and Tax (EBIT) contribution increased 29% to $19.1 million, refl ecting acquisitions, positive seasonal conditions and new market growth.
Acquired Monarch Pool Systems, a leading supplier of equipment to the swimming pool industry, and commenced reconfi guring the Water Products business into three market-focused businesses.

Drought conditions severely affected the performance of Victa, despite recent reconfi guring to a lower cost, product sourcing business.

New Zealand automotive business restructured to outsourcing model.

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2 GUD Holdings Annual Report 2007
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Rural or metropolitan. Depend on Davey to move water to where you need it.

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The Chairman’s and Managing Director’s Review

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12
10
8
6
Share Price Performance 4
GUD Holdings (A$)
July 2002 – June 2007
2
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Following the pattern of the 2005/06 fi nancial year, in 2006/07 the GUD group of businesses confronted many, similar, challenges.

All product markets the Group is active in were especially competitive and this manifested in pressure on gross profi t margins. Cost increases on raw materials and imported products, coupled with the damaging impact of the worst drought for some time in our home market, added to margin pressure.

However, similar to the prior year all businesses either retained or grew market share. This is a strong endorsement of the strength of the brands GUD owns and manages; one of the premium brand portfolios in consumer and industrial markets in the Asia-Pacifi c region.

Leading the way is Sunbeam, the Group’s largest business. Sunbeam has been steadily increasing its market share in Australia, despite being the long standing, unambiguous leader by a substantial margin in small electrical appliances.

Sunbeam’s dedication to product design and innovation coupled with its strong emphasis on product quality and appeal across a broad consumer base resulted in a solid performance in the market and a strong reaffi rmation of its market leadership.

In New Zealand, where Sunbeam has not held the market leadership position, those same qualities of innovation, contemporary design and product quality have underpinned market share gains across a number of important product categories and in the market overall.

The theme of new products and innovation in technology and design is common across the GUD portfolio and it is a vital ingredient of Sunbeam’s successes. Each year Sunbeam introduces over 70 new or updated appliances, some of which receive the ultimate in industry accolades by being recognised in international standard design competitions.

The Sunbeam business was the fi rst in the GUD Group to transition to being a design-develop-source-market-sell business model, following the cessation of its manufacturing three years ago. The success of this structure for Sunbeam has enabled the Group to tackle similar challenges in its other businesses with the confi dence that improvement in returns will follow.

This has certainly been the case with the Automotive Products business, which has experienced growth in profi t margins from single digit returns in the late 1990s to a 25% EBIT to sales margin in 2006/07. Over this period the Ryco businesses in Australia and New Zealand have been restructured to parallel the Sunbeam model. The culmination of this process was the closure of the New Zealand fi lter products factory in December 2006, resulting in Ryco being completely reliant on sourced product, manufactured to Ryco’s demanding quality specifi cations.

GUD Holdings Annual Report 2007

The Chairman’s and Managing Director’s Review

Clive Hall Chairman and Ian Campbell Managing Director

During the time that this business has been restructured, the automotive aftermarket has undergone substantial consolidation at the distributor level, with the inevitable pressure on pricing and margins and there has been an upsurge in the number of brands on the market.

Ryco continues to hold its leadership position in the face of these pressures, due principally to potency of the Ryco

This same array of initiatives is now being applied to the Oates cleaning products business. Oates was acquired by GUD in July 2005 and the business has not performed to expectations in the ensuing two years. With all major competitors sourcing products offshore and with the continued strengthening of the Australia dollar, Oates was rapidly becoming uncompetitive by operating two local factories.

As recently announced, Oates is now transitioning to the same business model as that instilled at Sunbeam; a model that retains an essential product design and development capability and sources product from qualifi ed, competent and cost-competitive offshore suppliers.This process at Oates is well underway and will be completed in the 2007/08 fi nancial year. There will be a $5.9 million after tax one-off, restructuring charge in 2007/08 and, as with prior similar activities in the GUD Group, a rapid payback is expected.

Any commentary on 2006/07 cannot ignore the substantial impact of the drought on the performance of Victa. Demand for mowers in Australia declined 13% over the prior fi nancial year and Victa maintained market share, despite an environment late in the year when competitors were quitting excess inventories at very competitive prices.

2006/07 was the fi rst year that Victa imported fully assembled mowers; in the previous year Victa had commenced its outsourcing program by importing lower cost components used in local assembly. 2007/08 will see this business increase its level of imports threefold, with the objective of improving profi t margins in a very competitive industry.

Like Sunbeam, Victa is a truly distinctive Australian brand that leads its market. In the face of the various challenges that have confronted the business in recent years, including the introduction of cheaper, imported mowers by non-traditional industry entrants and the impacts of climate, the Victa brand retains clear market leadership.

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Trading profit after tax Total earnings per share
(before significant items) $ millions (before significant items) cents
68.6
41.7 65.5 67.1
40.2
39.2 60.2
36.1
45.3
27.4
03† 04† 05 06 07 03† 04† 05 06 07
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Finally, any review of 2006/07 could not pass without comment on the performance of the Water Products business. This is a business that GUD has invested in considerably over the last four years and it is pleasing to see improved sales and profi ts due to both the acquisition investments and also those made in new products and new markets.

Water Products’ revenue increased 54% over the year to $148.8 million and EBIT for this business was up 29% to $19.1 million, representing 13% of sales.

These impressive growth numbers were driven by a number of factors, including:

Strong demand in new market segments, especially water conservation, as a result of increasing consumer awareness and government regulation. This has driven sales of RainBank and the new Silver Series pump range, both of which were specifi cally introduced to meet market needs in this segment.
The fi rst contribution from the Monarch Pool Systems business, acquired at the start of the 2006/07 fi nancial year, although water restrictions impeded sales growth.
Increasing sales of water treatment products in the Australian market, a benefi t coming from the 2005 acquisition of the New Zealand business, Contamination Control.
Strong demand for traditional Davey products, particularly fi refi ghter and borehole pumps, as a result of the Australian drought.

Following the Monarch acquisition the reconfi guring of the Water Products into three customer focused sales arms commenced. A business centring on the needs of spa pool and spa bath original equipment manufacturers was created by merging Davey’s spa business with that of Spa-Quip. In 2007/08 Davey’s swimming pool business will be integrated with Monarch, and Contamination Control will merge with Davey to form a household water supply and treatment business.

While the business will be structured along three distinct customer segments, the benefi ts of sharing technology and know how across all three are being actively sought. The purchase of Monarch, following those of Spa-Quip and Contamination Control, has given this business a collection of technological capabilities covering pumping, electronic controls and water treatment that span applications across all three market areas.

GUD Holdings Annual Report 2007

The Chairman’s and Managing Director’s Review

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Dividends declared
per share cents
60 61
50
40
26
03† 04† 05 06 07
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People, Health and Safety

At 30 June 2007, the GUD group employed 1,256 people (last year 1,231). This fi gure included 121 at Monarch Pool Systems, acquired during the year. The total New Zealand workforce was 138.

A number of businesses have exceeded 1,000 lost time injury (LTI) free days during the year. However, overall the safety performance of the Company slipped during the year, primarily due to performance at recently acquired businesses. Management has committed to a strategy designed to lift overall awareness and performance.

The Directors acknowledge the efforts of all employees in focusing on an improved level of safety performance.

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CVA return %
21.2
18.1
16.5
15.7
14.8
03† 04† 05 06 07
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† Prepared under superseded Accounting Standards

Future Direction

The direction of the GUD Group has not fundamentally altered in recent times. Focus continues to be on the following essential elements:

Ensuring each business remains cost-competitive in its industry. This requires active management of make versus buy economics and the skills to enact restructuring programs if they are necessary for a business’s long-term survival.
An innovation culture, concentrating on new products, processes and technologies. New products will drive revenue growth and, when coupled with the strength of GUD’s brands, should ensure margin protection.
Growth in performance underpinned by further acquisitions. The Group’s balance sheet strength allows further new lines of business or complementary acquisitions to be effected.
Applying the disciplines of continued tight cost controls, consistent application of Cash Value Added (CVA) principles and strong balance sheet management.

The Board and Management believe that it is through a combination of applying these elements that long-term shareholder returns will be generated.

Clive Hall Chairman

Ian Campbell Managing Director

Summary of Operations

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Products

Small electric appliances:

Café Series range
Electric blankets
Toasters, kettles, irons
Food preparation
Coffee makers
Snackmakers

Signifi cant Events

Maintained strong market leadership position in Australia. Increased market share in New Zealand. Launched Innovo gas barbeques. Won numerous design awards at Australian Design Awards, red dot awards and iF awards. Continued intense focus on new product design and development.

Juicers

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Portable heating
Personal care
Innovo gas barbeques

Products

Powered garden products:

Victa Razor™ alloy range
Victa Tornado™ steel range
Victa Lawnkeeper range
Masters Series professional range
Electric mowers

Future Direction

Develop and enter new categories where appropriate. Invest heavily in new products and technologies to grow sales and margins. Actively seek product cost reduction opportunities without sacrifi cing Sunbeam brand quality.

Signifi cant Events

Acquired brand and distribution rights to Enviromower range of battery powered mowers. Strong market share growth in New Zealand; static market leadership position in Australia in trying climatic conditions. Launched electric Vac & Blow. Launched electric mower range.

IsoVibe™ export range
Victa Vac & Blow

Future Direction

Consolidate gains to come from cost reduction initiative. Grow sales and market share in both Australia and New Zealand through more effective retail ranging. Grow sales through launching complementary products.

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Products

Full range of cleaning hardware:

Mops and buckets
Brooms
Brushware
Cleaning cloths and wipes
Scourers and sponges
Commercial cleaning gear

Signifi cant Events

Re-located to purpose built warehouse and head offi ce facility at Broadmeadows, Victoria. Supplier problems led to further underperformance on Bissell product range. Extremely competitive local market conditions. Commenced major redesign project of core cleaning product range.

Future Direction

Transition from manufacturing to sourcing business. Concentrate on core Oates Clean products range. Relinquish Bissell distribution. Refocus business on innovative product design and development activities.

GUD Holdings Annual Report 2007

Summary of Operations

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Products

Automotive aftermarket products:

Ryco oil, air, fuel, cabin air
Wesfi l and Cooper fi lters
Goss fuel pumps
Recarb carburettor kits

Signifi cant Events

Reconfi gured New Zealand Ryco business from manufacturing to sourcing profi le. Launched Ryco branded in-tank fuel fi lter range. Automotive aftermarket industry remained in a state of instability. Goss acquired Recarb business in May 2007.

Future Direction

Seek to grow Ryco brand with further complementary product line extensions. Consolidate Recarb acquisition in Goss. Consolidate new business structure in New Zealand. Evaluate further geographic expansion opportunities

Broaden Ryco Australia’s distribution base to cover regional resellers.

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Products

Locking systems and other security products:

Lock Focus garage door locks
Lock Focus metal furniture locks
Lock Focus caravan locking systems
Locktech safes and electronic locks
Kiroo and Emka electrical cabinet hardware
Codelocks electronic access control locks

Products

Pumps and water products:

Davey water pressure systems and FireFighter[®] pumps
ISOspec[®] irrigation pumps
RainBank[®] water controllers
Spa-Quip spa pool products

Signifi cant Events

Reported record revenue of $13.8 million – a 6% growth on the prior year.

Signifi cant impact on margins from increasing raw material costs. Solid growth in products added to the range in recent years – especially Codelocks and Emka.

Future Direction

Invest further in factory automation to lower costs and improve quality.
Investment in new product development activities to drive sales growth.

Signifi cant Events

Acquired Monarch Pool Systems on 3 July 2006. Merged Davey spa business into Spa-Quip. Launched Silensor silent pool pump, 2 stage Firefi ghter pump and new spa bath controller.

Commenced operational merger of Davey and Monarch’s interstate branches.

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Filterpure cartridge fi ltration
Microlene water purifi ers and coolers
Monarch Pool Systems equipment

Future Direction

Finalise business structure into three customer focused arms.
Launch second generation RainBank.

Seek further product opportunities in water conservation and treatment markets. Continue the integration of Monarch. Integrate Davey and Contamination Control in New Zealand.

Review of Business

Sunbeam Ceramic Collection™ Kettle and Toaster

Sunbeam Café Series[® ] Espresso Machine

Consumer Products

The Consumer Products segment comprises Sunbeam appliances, Victa lawncare and the Oates cleaning products businesses.

The 2006/07 fi nancial performance of Consumer Products was negatively impacted by the effect of the drought on Victa and underperformance in Oates.

Sunbeam’s performance during the year was solid, despite impacts from rising raw material costs and foreign exchange hedging costs.

Sunbeam

The highlight of Sunbeam’s trading performance over 2006/07 was its sustained brand leadership position amid testing market conditions. Not only are small appliance product categories becoming more competitive, but additionally distributing customers have undergone signifi cant structural change.

Despite these external pressures, Sunbeam remains focused on designing and selling quality, contemporary appliances to consumers in Australia and New Zealand.

Sunbeam also remains intensely focused on new product development. After substantial research on the cooking performance of gas barbeques, Sunbeam successfully launched two models during spring 2006. This step of moving into categories outside of traditional electrical appliances, but into areas where the Sunbeam brand has both relevance and validity, was a recent

Continuing the new product theme, other innovative products added during the year included a beer chiller – a developing market both here and internationally – and electric over-blankets.

Sunbeam achieved further recognition for its industry-leading design and development capabilities by being awarded two international ‘red dot’ design awards for Café Series products. In the annual Australia Design Awards, Sunbeam collected two Design Marks, for an iron and coffee grinder and a Design Award for a new ceramic kettle. Additionally, the business picked up four iF awards for products in the Café Series range.

The outlook for this market-leading business is positive. New product introductions in the current year will drive further growth in market share. Additionally, benefi ts are expected to come from improving Sunbeam’s supply chain and from the recent establishment of a Hong Kong offi ce.

GUD Holdings Annual Report 2007

Review of Business

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Victa
Vac & Blow Electric
Enviromower ECO 500
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Enviromower ECO 500
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Victa

Despite recent management actions to position Victa more competitively, the severity of the 2006/07 drought had a major impact on Victa’s fi nancial performance. Demand for mowers in Australia reduced 13% on the prior year.

Notwithstanding this impact, there were a number of positives in Victa’s trading performance and these position the business well for when normal conditions return.

The recent move to offshore sourcing resulted in improved gross profi t margins. Through importing both cost-competitive components and fully-built products, and retaining a local capability to assemble product to enable the business to respond to changing market conditions, Victa is positioned to be the most responsive supplier in its industry.

The development of related non-mowing products to broaden the offering to customers and consumers will reduce the business’s reliance on climatic conditions.

In addition to adding new products Victa has been strengthening its core product offering in mowers. A limited range of electric mowers was introduced in the current year and this was supplemented, in early 2007, by Victa’s acquisition of brand and distribution rights for the battery powered Enviromower.

Additionally, following technical work on Victa’s legendary 2 stroke engine, this power plant was relaunched under the EcoTorque tag. The new engine delivers more power with lower fuel consumption and emissions, refl ecting Victa’s response to emerging environmental concerns with small petrol engines.

The drought that affected Australia was not a factor in the New Zealand market, which grew nearly 3% in the year. With broader ranging and a more tailored product offering for that market, Victa’s market share increased considerably to position it as a strong number two brand.

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Oates Janitors Cart Mark II

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Oates

For the second consecutive year the performance of the Oates cleaning products business did not reach expectations.

Oates experienced extremely competitive market conditions as its cost position, as a local manufacturer, worsened against imported products.

In addition to this, the Bissell product range of carpet and hard fl oor cleaning machines again underperformed. Bissell has been distributed in Australia by Oates for some years.

In keeping with GUD’s philosophy of owning its own brands and recognising that Bissell was consuming a disproportionate amount of management time, the distributorship was terminated, effective August 2007.

To address the increasing non-competitiveness of locally manufactured cleaning products, Oates has recently announced a major transition to a design-develop-source-market-sell business model, similar to that in place at Sunbeam. This transition entails the closure of manufacturing facilities in Melbourne and Perth, to be completed by February 2008.

These initiatives, when coupled with Oates’s recent relocation of its distribution centre and head offi ce to a new purpose-built facility at Broadmeadows, Victoria and an extensive product range re-design, position this business for improvements in future profi tability and shareholder returns.

Consumer Products Division

2007 Performance Summary

2007 Performance	Summary
Sales	2007 $’000 287,516	2006 $’000 282,296
Segment Prof t	25,648	32,811
Segment Assets	176,428	166,415

2007 Management

2007 Management
Jonathan Lord	Andrew King
Chief Executive	Chief Executive
Sunbeam Corporation Ltd	Victa Lawncare Pty Ltd
Christine Johnston	Jim Oates
General Manager	Chief Executive
Sunbeam Corporation Limited (NZ)	E D Oates Proprietary Limited

GUD Holdings Annual Report 2007

Review of Business

Ryco Fuel Filter

Automotive Products

GUD’s Automotive Products segment comprises the Australian and New Zealand Ryco automotive fi ltration businesses, Wesfi l, an importer and wholesaler of a range of aftermarket parts centred on fi ltration, and Goss, a specialist in the niche fuel systems aftermarket.

This collection of businesses suffered a 3% decline in sales in 2006/07, principally as a result of competitive conditions in Goss’s market and the loss of the motor company business in New Zealand, as the Ryco operation there moved to a product sourcing model, similar to its Australian counterpart.

Profi tability (EBIT) was down 10%, principally due to the sales decline. The profi t margin is still a respectable 25% EBIT to sales, an indication of the successful conversion of Ryco from a manufacturing business and the strength of the brands within this segment, specifi cally Ryco, Wesfi l, Cooper and Goss.

As noted earlier, Ryco New Zealand’s manufacturing was closed and the business has subsequently relocated to a facility more appropriate for an importing, warehousing and distribution operation.

As reported in prior years, conditions in automotive aftermarkets in both Australia and New Zealand remain both challenging and in a constant state of fl ux. Demand for parts is essentially static, as growth in the car population is being offset by longer service intervals and new technologies.

There has been continual cost pressure from suppliers as steel, tinplate and plastics are substantial contributors to the end cost of automotive fi lters, although the appreciation of the Australian and New Zealand currencies against the US dollar has softened the impact of these pressures.

Air Filter

Ryco has been active seeking new product categories to enter, and in the 2006 fi nancial year launched a range into the cabin air fi ltration market and has seen solid sales growth in this developing segment.

In the year under review Ryco introduced in-tank fuel fi lters, after identifying growing market demand for this newer technology. The span of the product range covers over one million vehicles in the Australian car population.

The Wesfi l parts business performed solidly during the year. The Townsville branch, which was opened in the prior year, grew sales and contributed satisfactorily to Wesfi l’s profi tability.

Wesfi l’s strength, apart from its competitively priced, sourced, product range, is its geographic coverage and its level of service. The branch network covers all mainland capital cities, in addition to Newcastle and Townsville. Its product offering spans automotive fi lters, brake pads, timing and fan belts and wiper blades.

Goss reported a disappointing year with stiff competition emerging in its primary, niche markets. These markets are in long-term decline as vehicles with carburettors slowly disappear from the car population, and price based competition has had a signifi cant impact on the ability to generate the historical levels of return.

Towards the end of the fi nancial year Goss acquired the business of Replacement Carburettors, a Sydney-based supplier of carburettors and carburettor repair kits. This acquisition, of inventory and a small amount of plant, complements Goss’s activities in these niche markets and adds scale to Goss. The Recarb business has been fully integrated at Goss’s operation at Preston, Victoria.

Automotive Products Division

2007 Performance Summary

2007 Performance	Summary
Sales	2007 $’000 68,553	2006 $’000 70,414
Segment Prof t	13,338	18,780
Segment Assets	31,522	34,969

2007 Management

2007 Management
Bob Pattison	Rick Nutter
Chief Executive	Sales & Marketing Manager
GUD Automotive Pty Ltd	GUD (NZ) Limited
Terry Cooper	Arthur Williams
Managing Director	General Manager
Wesf l Australia Pty Ltd	Goss Products Pty Ltd

GUD Holdings Annual Report 2007

Review of Business

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Lock Focus ‘Rhino’ Safe
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Lock Focus Cabinet Lock
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Security Products

The Lock Focus security products business has been a steady contributor to the GUD’s results since its acquisition in 1993.

The business is the principal local manufacturer of a range of locking systems for the metal and wooden furniture, garage door, caravan and associated industries.

Over recent years Lock Focus has supplemented the traditional products it manufactures at Keysborough, Victoria, with a number of high growth, imported product ranges for specialised security industry niche markets. It is these newer lines that have enabled Lock Focus to continue to deliver consistent sales and profi t returns, as demand for traditional products declines as local manufacturers move offshore and as imports become more competitive with the strengthening of the Australian dollar.

Sales revenue in 2006/07 was a record $13.8 million and the 6% growth from the prior year was underpinned by rapid growth in Codelocks electronic locking systems, Locktech electronic safes and Emka electrical cabinet hardware.

Profi t margins on manufactured products were negatively affected by signifi cantly higher zinc and brass costs, but these were partially offset by the superior margins available on the newer product lines.

This change in mix has enabled Lock Focus to deliver a quality profi t result – a steady 16% EBIT/sales ratio – and to produce a CVA return in excess of the corporate cost of capital. These outcomes refl ect the business’s strength in its market segments, as a consequence of its attention to product quality and customer service.

To sustain its profi tability and to provide the platform for future growth Lock Focus has implemented the following programs:

Further investment in factory automation for FY08 to lower costs and improve product quality.
Investment in product development programs aimed at securing local business and growing revenue based on new products with innovative features and lower costs.
Commissioning a new, integrated business system encompassing features that are unique to Lock Focus’s industry sector, which will enable further cost reduction strategies to be implemented.

Security Products Division

Security Products Division
2007 Performance Summary 2007 $’000 2006 $’000 Sales 13,806 12,966 Segment Prof t 2,255 2,126 Segment Assets 15,536 14,780	2007 Management
2007 $’000 2006 $’000	David Cox Managing Director Lock Focus Pty Ltd
Sales 13,806 12,966
Segment Prof t 2,255 2,126
Segment Assets 15,536 14,780

Davey Sump Pump

‘Silver Series’ Pump

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Water Products

The Water Products segment, comprising Davey, Spa-Quip, Contamination Control and Monarch Pool Systems, was the GUD Group’s standout performer in the 2006/07 fi nancial year.

Sales increased 54% due to a combination of the Monarch acquisition, organic growth generated by new products, and seasonal growth in fi refi ghter and borehole pumps due to Australia’s drought conditions.

Profi t (EBIT) in this segment increased 29% on the prior year to reach $19.1 million. Water Products represented 30% of the Group’s EBIT, before unallocated costs.

Monarch’s performance for the year was not in line with expectations at the time of the acquisition and was affected by reduced demand in the swimming pool industry due to drought conditions in Australia. Swimming pool starts in calendar 2006 declined 6% on the prior year and were at their lowest level since 1996.

Following this fi rst year of owning Monarch, the Water Products business has a much clearer picture of the business’s direction, in terms of product development, operational profi le and management structure. Improvements to all these in the current year should result in increasing profi tability.

The acquisition of Monarch at the commencement of the 2006/07 fi nancial year cemented the Water Products business as one of Australia’s pre-eminent participants in the domestic and rural water products markets. The range of products now offered by this business is unmatched in the local market. Additionally, its ability to reach that market through dealer networks, original equipment manufacturers, rural merchandisers, pool builders and pool retailers is unparalleled.

The acquisition of Monarch has enabled operational effi ciencies to be generated. The interstate branch offi ce and warehouse network of Monarch and Davey has been merged in Perth, Melbourne and Brisbane with Sydney and Adelaide to be consolidated in the current fi nancial year.

This business segment, like all GUD’s businesses, is extremely active in the development of new products. Indeed, the recognition of emerging water conservation markets some years ago, led to the development of the market leading RainBank rainwater tank controller. RainBank’s sales accelerated in the 2006/07 year as consumers became active in installing water saving products, as a result of the prolonged drought and the introduction of more stringent water restrictions.

Other new products introduced during the year included a new 2 stage fi refi ghter pump, a spa bath controller developed by Spa-Quip and a water pressure boosting product range for the US market.

GUD Holdings Annual Report 2007

Review of Business

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Davey
Torrium Controller
Davey Silensor Swimming Pool Pump
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Refl ecting innovation in product design and development, Davey was awarded an Australian Design Mark award for the Silensor silent pool pump, which was introduced to the market during the fi rst quarter of the fi nancial year.

The Water Products segment, following its three acquisitions of recent years is now positioned with a broad span of technological capabilities, covering water pumping, electronics and water treatment. This collection of technologies is unique in the Australian industry and the business has introduced processes to maximise the value of these capabilities through disciplined coordination of product development activities.

The outlook for this business – now renamed Davey Water Products – is exceptionally positive. Further new products have been introduced to the market at recent dealer conferences, including the second generation RainBank and a packaged household water treatment system, incorporating fi ltration, UV disinfection and potentially water conditioning, branded Aquashield.

The integration of Davey’s swimming pool business with that of Monarch is scheduled to occur in the current fi nancial year. Coupled with Contamination Control’s merger with Davey in New Zealand, this completes the reconfi guration of this business segment to three market-focused business units. Integration

The opportunity for further growth by acquisition, following the success of acquiring bolt-on businesses over the last three years is still being pursued. Water products markets are in a growth phase internationally and Davey Water Products, with its spread of capabilities, products and customer base, is well positioned to integrate and grow through further complementary acquisitions.

Water Products Division

2007 Performance Summary

2007 Performance	Summary
Sales	2007 $’000 148,776	2006 $’000 96,716
Segment Prof t	19,142	14,864
Segment Assets	105,622	63,441

2007 Management

2007 Management
David Cleland	Bryce Wilson
Managing Director	General Manager
Davey Water Products Pty Ltd	Contamination Control
Simon Fletcher	Phillip Paul
Sales Manager	General Manager
Davey Water Products Limited (NZ)	Monarch Pool Systems Pty Ltd

Peter Ranyard General Manager Spa-Quip

Finance Report

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Working capital Gearing %
% of sales
20
18 19 40.5
17
15
27.7
21.9
14.1
11.0
03† 04† 05 06 07 03† 04† 05 06 07
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Borrowing levels were impacted from the commencement of the year by the acquisition of Monarch Pool Systems from existing facilities. 2007 opening net borrowings of $54 million increased to $94 million due to the Monarch purchase and cash costs of restructuring the Ryco Auckland business to the Sunbeam fully outsourced business model.

Group working capital (debtors, inventories and trade creditors) continued to be tightly controlled and increased by $12.8 million overall. This was predominantly due to the Monarch acquisition and planned increases in some inventory categories to ensure supply continuity of critical core products.

Receivables continued under tight control with the increase again due to the Monarch acquisition. No major bad debts were incurred despite realignment and business failures in the retail electrical and hardware sectors.

The GUD buyback program was refreshed but no shares were acquired in the year to 30 June, 2007. The cumulative total of shares acquired and cancelled since inception is 8.2 million ordinary shares at an average price of $3.11 per share. Dividends totalling $19.6 million have been saved as a result of the buybacks. The GUD Dividend Reinvestment Plan remained suspended and the Executive Share Option Plan was terminated in May, 2007.

For the full FY2007, an interim dividend of 27 cents per share and a fi nal dividend of 34 cents per share were declared, resulting in total dividends of 61 cents per share. FY2007 is the sixth consecutive year in which dividends have increased over prior year. Both dividends for the year were fully franked.

GUD’s gearing ratio (net debt to total equity plus net debt) increased from 27.7% to 40.5%, largely as the result of the Monarch acquisition. Net operating cash fl ow was strong at $39.9 million and the Group’s balance sheet is a healthy platform for future growth.

At all times, the Group has comfortably complied with its borrowing covenants.

During the year, the Australian and New Zealand currencies rose strongly. GUD maintained its strict fi nancial risk management policies, which have also protected it from adverse effects which could have had a material impact during the volatility in world markets in July and August.

Net tangible assets per share have been decreasing in recent years as the result of the Group’s focus on growth. By exchanging cash consideration for intangible assets such as goodwill, brand names, patents and distribution rights, intangible assets increase and tangible assets decrease.

GUD Holdings Annual Report 2007

Finance Report

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Net Borrowings $m
94.7
54.1
37.6
20.9
17.6
03† 04† 05 06 07
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NTA (net tangible assets) Return on equity %
per share $ (before significant items)
† Prepared under superseded Accounting Standards
29.3 29.2
28.4
1.39
25.9
1.26
1.06 21.6
0.96
0.55
03† 04† 05 06 07 03† 04† 05 06 07
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The same effect has occurred due to the Group’s increased Product Development activities where tangible cash assets are invested in capitalised Product Development projects (which are classifi ed as intangible assets). This investment has been accelerated, underpinning the strength of the Group’s collection of market-leading brands.

The GUD Group has consistently measured the performance of its businesses through its CVA metric, ensuring that its operating businesses drive working capital assets down whilst maximising profi ts. CVA remains the basis for short-term incentives to Management and is outlined further on page 29.

Since GUD commenced its current acquisition program, its Total Capital Employed (TCE) base has increased by $82.5 million through the acquisition of new businesses, impacting the rate of CVA return. This is a short-term trade-off to achieve growth in the Group by acquisition.

When an acquisition is completed the Group invests heavily in cultural change, operational performance activities and integration of the new business and the fi nancial benefi ts are not usually optimised in the fi rst year of ownership.

As GUD invests more heavily in product development intangible assets, its TCE also increases. This is also a short-term effect for long-term growth.

CVA rates of return continue to comfortably exceed the GUD Weighted Average Cost of Capital.

CVA Return Summary FY2003 to FY2007

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FY03 FY04 FY05 FY06 FY07
Consumer 14.7% 22.6% 17.8% 13.7% 13.2%
Automotive 20.8% 23.6% 26.9% 30.8% 31.6%
Water 17.8% 17.3% 15.2% 14.7% 14.5%
Security 10.0% 10.6% 9.9% 10.9% 11.9%
GUD Group 16.5% 21.2% 18.1% 15.7% 14.8%
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Note: Excluding individually signifi cant items.

Corporate Governance

GUD is committed to a high standard of corporate governance and the Directors are responsible for the corporate governance practices of the Company.

This statement sets out the main corporate governance practices that operated throughout the year, unless otherwise indicated.

ASX Corporate Governance Principles

The Company considers that the corporate governance practices comply with the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations.

The Company’s corporate governance framework is kept under review and changes are made in response to changes in the Company’s business or applicable legislation and standards.

Part 1 – Composition of the Board

The Board is currently comprised of four Non-Executive Directors (including the Chairman) and two Executive Directors (the Managing Director and Chief Executive, and the Finance Director). Details of the skills, experience and expertise of the Directors and the Company Secretary, as well as the period for which the Director has held offi ce are set out on page 36. There were no changes in Directors during the year.

Independence

The Chairman and all Non-Executive Directors are independent in accordance with the defi nition recommended in the ASX Corporate Governance Council Guidelines, having no business or other relationship that could compromise their independence. The Board has developed guidelines to determine materiality thresholds for the purposes of that defi nition. Broadly speaking these guidelines seek to determine whether the Director is generally free of any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company. Such relationships could include where the Director:

is a substantial shareholder of the Company or an offi cer of, or otherwise associated directly with, a substantial shareholder of the Company;
within the last three years has been employed in an executive capacity by the Company or another group entity, or has been a Director after ceasing to hold any such employment;
within the last three years was a principal of a material professional advisor or a material consultant to the Company or another group entity or an employee materially associated with the service provided;
is a material supplier or customer of the Company or a controlled entity, or an offi cer of or otherwise associated directly or indirectly with a material supplier or customer; or
has a material contractual relationship with the Company or a controlled entity other than as a Director of the Company.

The Board believes the separation of the roles of Chairman and Chief Executive and the predominance of independent Non-Executive Directors is appropriate.

Directors have agreed to advise the Board, on an ongoing basis, of any interest which could potentially confl ict with those of the Company.

GUD Holdings Annual Report 2007

Corporate Governance

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Directors are not required to hold any share qualifi cation. All current Non-Executive Directors have shares in the Company, acquired through the Australian Stock Exchange. The current shareholdings are shown below:

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Shares
Total Total
Directors Held Benefi cially
30/6/2007 30/6/2006
30/6/2007
Private
Own
Company/
Name
Trust
C K Hall – 70,000 70,000 70,000
G D W Curlewis – 10,000 10,000 10,000
R M Herron – 10,000 10,000 10,000
P G Thomas – 10,000 10,000 10,000
I A Campbell 130,000 120,000 250,000 250,000
R J Wodson 35,000 – 35,000 35,000
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Appointment and Re-appointment of Directors

In the appointment of Directors, the Board has sought advice from independent sources and undertaken independent professional searches for suitable candidates.

New Directors receive a comprehensive information pack and special briefi ngs from management and visit key operating sites to assist them to quickly understand GUD’s businesses and issues.

All Directors (except the Managing Director) are elected by shareholders at the Annual General Meeting following their appointment and thereafter are subject to re-election at least once every three years.

The Board has adopted a retirement age policy for Directors, being the conclusion of the Annual General Meeting following the Directors’ 68th birthday. This may be varied by the Board on an annual basis until the age of 72 years. In recent years, Non-Executive Directors have been appointed on the basis that they would not seek to serve more than 10 years. Executive Directors cease to be Directors when they cease to be Executives.

Part 2 – Role of the Board

Division of Responsibilities between Board and Management

The Board has delegated responsibility for the operation and administration of the Company to the Managing Director who, along with the senior management team, is accountable to the Board.

The various business operations within the Group are delegated to the Divisional Chief Executives who, together with their management teams, manage the businesses within an agreed framework of strategic plans, budgets, targets, standards and policies.

To assist the Board to maintain its understanding of the businesses and to assess the management team, Directors regularly receive detailed briefi ngs from each member of the executive general management team during the year and visit operating locations.

Directors receive a comprehensive monthly performance report from the Managing Director whether or not a Board meeting is scheduled and have unrestricted access to company records and information.

The Board strives to create shareholder value and ensure that shareholder funds are safeguarded.

Approving the strategic direction for the Company.
Overseeing the long-term performance against targets and objectives.
Monitoring environmental and safety performance.
Monitoring the fi nancial performance, legal compliance and ethical standards.
Establishing and maintaining the quality of the executive team and in particular monitoring and assessing the performance of the Managing Director.
Assessing business risk, the adequacy of internal controls and organisation structures.
Reporting to shareholders on the direction, governance and performance of the Company.

The Board reviews its composition and processes annually (as detailed below).

Directors are, at their own expense, expected to maintain a level of knowledge appropriate to their appointment.

Corporate Governance

Board Committees

The Board generally operates as a whole across the range of its responsibilities but to increase its effectiveness uses committees where closer attention to particular matters is required. The role of the Board Committees is to make recommendations to the Board on matters set out in each Committee’s Charter. The Charters for the Audit & Compliance Committee, the Remuneration Committee and the Nominations Committee are available on the corporate governance section of the Company’s website (www.gud.com.au).

Board Committees comprise of Non-Executive Directors. Details regarding the role of each Committee and their composition as at 30 June 2007 are set out below:

Audit & Compliance Committee: R M Herron

(Chairman), C K Hall, P G Thomas and G D W Curlewis.

The Committee, by its charter, primarily assists the Board in fulfi lling its responsibilities relating to accounting and compliance obligations of the Company and to advise the Board on matters of fi nancial signifi cance or compliance with legal and contractual obligations. The Committee also:

reviews the scope, performance and fees of the statutory auditor;
oversees and appraises the quality of audit and reviews the conduct by the Board’s external auditors;
maintains communications between the Board, external auditors and management;
reviews fi nancial information prepared by management for external parties;
reviews accounting policies and practices; and
monitors compliance with applicable policies and controls.

By invitation, the Managing Director, Finance Director, Company Secretary, Group Finance Manager and representatives of GUD’s statutory auditor are present for most of the proceedings.

The Company has a formal policy on auditor independence, which is kept under review, including processes adopted by the auditor and the Company to ensure independence is maintained.

Non-audit fi nancial services which may be required by the Company have been reviewed. These services have been categorised into those which the statutory auditor:

is permitted to provide,
is not permitted to provide, or
is permitted to provide subject to Committee approval.

The Committee sought and received representations from the statutory auditor as to various matters related to their independence, compliance with applicable professional standards, restrictions on their audit process and reporting to the Committee.

The statutory auditor attends the Annual General Meeting and is available to answer shareholders’ questions about the conduct of the audit and the preparation and content of the auditor’s report.

Remuneration Committee: C K Hall (Chairman), P G Thomas, G D W Curlewis and R M Herron.

The Committee, by its charter, advises the Board on remuneration policies and practices and recommendations regarding the level and form of executive remuneration and in particular that of the Managing Director and senior management reporting to the Managing Director.

By invitation, the Managing Director and Company Secretary are present for most of the proceedings.

The Remuneration Report on pages 25–33 includes further details on the Company’s remuneration policy and its relationship to performance.

Details of the remuneration of Directors and Senior Executives for the year ended 30 June 2007 are set out in the Remuneration Report and in Note 22 on pages 65–66.

Nominations Committee: C K Hall (Chairman), P G Thomas, G D W Curlewis and R M Herron.

The Committee has adopted a Charter whereby its primary objective is to assist the Board in fulfi lling the Board’s responsibilities relating to the future tenure, size and composition of the Board including succession planning.

The Managing Director has the right to receive notices of all Committee meetings and to attend and speak at such meetings.

GUD Holdings Annual Report 2007

Corporate Governance

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Directors’ Attendances at Meetings

The Board had 11 meetings during the year.

Meetings are generally held monthly with ad hoc meetings called to consider specifi c or urgent matters.

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Audit & Compliance
Directors Board Remuneration Committee Nominations Committee
Committee
Held (a) Attended (b) Held (a) Attended (b) Held (a) Attended (b) Held (a) Attended (b)
C K Hall 11 11 4 4 3 3 1 1
G D W Curlewis 11 11 4 4 3 3 1 1
R M Herron 11 11 4 4 3 3 1 1
P G Thomas 11 11 4 4 3 3 1 1
I A Campbell 11 11
R J Wodson 11 11
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(a) Meetings held whilst a member.

(b) Meetings attended.

It is the Board’s practice that the Non-Executive Directors meet regularly without the presence of management.

Performance Evaluation

The Nominations Committee includes in its charter the role of evaluating the Board’s performance. This is conducted through an annual internal assessment, the fi ndings of which are reported by the Chairman of the Nominations Committee to the Board following the assessment.

Part 3 – Risk Management and Internal Controls

During the year the Board reviewed the Company’s risk management policies and procedures.

A formal review of risks is semi-annually carried out by each division and the corporate offi ce. The Company has adopted a policy of reviewing risks through a half yearly reporting process.

Decisions on fi nancial risk management are made by the Group Financial Risk Management Committee chaired by the Finance Director that operates within established policies, procedures and limits that are regularly reviewed by the Board and external advisers. These policies prohibit speculative transactions, restrict hedging to preset limits and require senior management approval of hedging instruments.

In accordance with ASX Corporate Governance Council Guidelines, the Board has received from the Managing Director and the Finance Director a written statement confi rming that the integrity of the fi nancial statements is founded on a sound system of risk management and internal compliance and control which implements policies adopted by the Board, and the Company’s risk management and internal compliance and control system is operating effi ciently and effectively in all material respects.

The Managing Director and Finance Director certify in writing that the Company’s fi nancial reports present a true and fair view, in all material respects of the Company’s fi nancial condition and operating results and that they are in accordance with relevant accounting standards and the Corporations Act 2001.

Corporate Governance

Part 4 – GUD Governance Policies

Dealing in Shares

Under the Company’s Dealing in Shares Policy, a Director, Executive or employee or their associates may:

Deal in GUD securities (provided a person is not in possession of inside information relating to that security) during the period commencing two (2) days after release and ending thirty (30) days after release of information of a fi nancial nature to the ASX. Such releases include annual, half yearly, and, if required, quarterly ASX releases;
Acquire GUD securities by conversion of existing securities;
Acquire securities under a bonus issue or dividend reinvestment, rights issue or top-up plan that is available to all security holders of the same class; and
Acquire or agree to acquire securities under a company’s sponsored share or option plan;

provided that any such trade would not constitute insider trading or otherwise be prohibited under the Corporations Act.

Each Non-Executive Director has entered into a contract with the Company to advise the Company when any interest in any securities in the Company held by that Director changes and to advise the Company of the Director’s interest in securities at the date of retirement.

Health and Safety

The Company has continued its emphasis on health and safety in the workplace through the Group Occupational Health and Safety Steering Committee with representatives from each Division meeting monthly to review common policies and procedures and general matters relating to health and safety.

The Board receives monthly reports on Occupational Health and Safety (OH&S) and reviews all incidents resulting in lost time injuries and medically treated injuries. Each operating unit is subject to regular health and safety inspections.

Ethical Standards and Compliance

The Board has a Code of Conduct, which includes a procedure for dealing in Company shares, confl icts of interest, obtaining independent professional advice at the Company’s expense, and full and timely access to such information necessary for Directors to discharge their responsibilities.

In addition, the Company has a general Code of Conduct, which includes policies and standards on issues of business ethics that apply to all employees.

Full details of the Codes may be found on the Company’s website at www.gud.com.au.

The Board receives regular reports on legal and environmental compliance to ensure the Company complies with its legal and environmental obligations.

Political Contributions

The Company maintains a position of impartiality with respect to party politics and does not contribute funds to any political party or candidate for public offi ce.

Communication

Directors endeavour to ensure that shareholders are regularly and fully informed of all major developments affecting the Company. The Annual Report, Interim Report and Chairman’s Address at the Annual General Meeting are sent to all shareholders unless requested not to.

In addition, shareholders are advised of major announcements regarding the Company.

Individual shareholders are given an opportunity to raise questions at the Annual General Meeting and there is regular dialogue with institutional investors.

The Company and each of its Divisions have websites – see details on inside back cover.

Documents that are released publicly are made available on the Company’s internet website at www.gud.com.au.

GUD Holdings Annual Report 2007

Corporate Governance

Remuneration Report

The Directors of the Company present the Remuneration Report prepared in accordance with section 300A of the Corporations Act 2001 for the Company and the consolidated entity for the year ended 30 June 2007.

This Remuneration Report discloses the remuneration for key management personnel of the consolidated entity, including the Directors and the fi ve most highly remunerated executives of the Company and the consolidated entity.

The Company’s remuneration strategy is designed to attract, retain and motivate appropriately qualifi ed and experienced Directors and Senior Executives. Detail of the Company’s remuneration strategy for the 2007 fi nancial year is set out in this Remuneration Report. This Remuneration Report forms part of the Directors’ Report for the year ended 30 June 2007 and includes the transferable disclosure requirements of Accounting Standard AASB 124.

Non-Executive Directors (Audited)

Fees and payments to Non-Executive Directors refl ect the demands made on and responsibilities of Non-Executive Directors in discharging their duties.

The fees paid to the Chairman and other Non-Executive Directors are reviewed annually by the Board. The Board seeks the advice of independent consultants to ensure fees and payments are appropriate and in line with market conditions.

Executive Directors and Senior Executives (Audited)

The objective of the Company’s executive reward program is to ensure reward for performance is competitive and appropriate for the results delivered.

The compensation framework provides a mix of fi xed and variable remuneration, and short-term and long-term incentives. Most Senior Executives have a signifi cant proportion of their rewards ‘at risk’.

The Remuneration Committee, as part of an annual review that considers performance-related elements, comparative remuneration and independent advice, reviews all executive remuneration.

The aim is that remuneration levels are set to attract and retain appropriately qualifi ed and experienced executives, and to provide signifi cant potential for short-term and long-term incentive rewards based on Company, business unit and individual performance. The Company’s short-term and long-term incentive programs are cash-based plans and do not involve the grant of shares or other equity instruments to Senior Executives.

An overview of the elements of remuneration is set out in the table below. More detailed discussion of each element is contained in this Remuneration Report.

	Elements of	Directors	Directors	Senior
	Remuneration	Non-Executive	Executive	Executives
Fixed Remuneration	Fees	•
	Salary		•	•
	Superannuation	•	•	•
	Other Benef ts		•	•
At-risk Remuneration	Short-Term Incentive		•	•
	Long-Term Incentive		•	•
Post Employment	Notice periods and termination payments		•	•
	Retiring Benef ts	•

Remuneration Report

Section 1 – Non-Executive Directors’ Remuneration (Audited)

Remuneration Policy

Fees payable to Non-Executive Directors are determined within the maximum aggregate amount that is approved by shareholders. The current maximum aggregate amount is $600,000, last approved by shareholders at the 2004 Annual General Meeting.

The level of fees is reviewed annually by the Remuneration Committee based on a recommendation from the Managing Director. In determining the level of fees, external professional advice and available data on fees payable to Non-Executive Directors of similar sized companies are taken into account. The Board will continue to review its approach to Non-Executive Director remuneration to ensure it remains in line with general industry practice and best practice principles of corporate governance.

The remuneration of the Non-Executive Directors is not linked to the performance of the Company, in order to maintain their independence and impartiality.

Fees

The current base fee was last increased with effect from 1 July 2006. For the year ended 30 June 2007, Non-Executive Directors’ fees were $54,500 per annum. The Chairman, taking into account the greater time commitment required, received $136,250 per annum. Mr Herron, who was appointed on 17 June 2004, and does not participate in the Non-Executive Directors’ Retirement Allowance, received a fee of $71,000 per annum. The Company has not in the past paid additional fees for membership of the Board’s committees or attendance at committee meetings. However, on 21 June 2007, the Board resolved that the Chairman of the Audit & Compliance Committee should receive an additional fee of $10,000 per annum in recognition of the greater time commitment that role requires.

In accordance with rule 37 of the Constitution, Directors are permitted additional fees for special services or exertions. No such fees were paid during the year. Directors are also entitled to be reimbursed for all business related expenses, including travel on Company business, as may be incurred in the discharge of their duties. Such reimbursements are not included in the aggregate fee cap approved by shareholders.

Equity Participation

Non-Executive Directors do not receive shares or options, and there is no provision for Non-Executive Directors to convert a percentage of their prospective fees into GUD shares.

None of the Directors acquired or sold shares in GUD during the year.

Retiring Allowance for Directors

In the past, the Company paid retiring allowances to Non-Executive Directors. On 23 June 2003, the Board resolved to cease offering retiring allowances for Non-Executive Directors appointed after that date.

At that time, annual base fees for Directors appointed after 23 June 2003 were increased to refl ect the Board’s decision that retiring allowances were no longer payable for new Directors, beyond the statutorily prescribed superannuation contributions paid by the Company.

The three Non-Executive Directors who were appointed prior to June 2003 (Messrs Hall, Thomas and Curlewis) continued to be eligible to receive retiring allowances under an agreement entered into at the date of their appointment. However, on 22 May 2007, the Board resolved to freeze the retiring allowances to be paid to those Directors at the amount accrued to 30 June 2007. This amount will be paid out to those Directors on their eventual retirement. The Directors’ remuneration for future fi nancial years commencing 1 July 2007 will refl ect the fact that the retiring allowance will no longer accrue.

GUD Holdings Annual Report 2007

Remuneration Report

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The retiring allowance for those participating Non-Executive Directors is based on the following:

retiring Non-Executive Directors are entitled to a retiring allowance according to a formula approved by shareholders in 1993 calculated by length of service of the retiring Director;
the maximum retiring allowance benefi t is paid for more than four years service, being an amount equal to:
a) the emoluments paid to the Directors in the three years immediately preceding his or her retirement, termination or death; plus
b) for each year or part of a year of service exceeding fi ve years, 5% of the amount referred to in (a).

The accrued and frozen retiring allowance benefi t for each Non-Executive Director entitled to receive one is set out in the table below.

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Non-Executive Directors Date of Accrued
Entitled to Retiring First Retiring
Allowance benefi ts Appointment Allowance
C K Hall 13 September 1999 $451,375
P G Thomas 24 June 2002 $164,850
G D W Curlewis 1 March 2003 $157,000
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Superannuation Guarantee

The Company pays the superannuation guarantee charge in relation to its eligible Non-Executive Directors.

Details of the nature and amount of each element of the remuneration of Non-Executive Directors for the year ended 30 June 2007 are set out in the table below.

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(Audited) Short-term Employee Post-employment
Non-Executive Directors Benefi ts Benefi ts
Year Directors’ Fees Superannuation Retirement Total
$ $ $ $
C K Hall (Chairman) 2007 136,250 12,263 114,500 263,013
2006 131,250 11,813 107,975 251,038
P G Thomas 2007 54,500 4,905 12,350 71,755
2006 52,500 4,725 38,100 95,325
G D W Curlewis 2007 54,500 4,905 35,000 94,405
2006 52,500 4,725 36,200 93,425
R M Herron 2007 71,000 6,390 – 77,390
2006 68,250 6,143 – 74,393
Total Remuneration of 2007 316,250 28,463 161,850 506,563
Non-Executive Directors 2006 304,500 27,406 182,275 514,181
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Superannuation contributions on behalf of Non-Executive Directors to satisfy the Company’s obligations under applicable Superannuation Guarantee legislation.

Remuneration Report

Section 2 – Executive Directors’ and Senior Executives’ Remuneration (Audited)

The disclosures in this section relate to the executives listed below, being the Executive Directors and the Senior Executives with authority and responsibility for planning, directing and controlling the activities of the Company and the consolidated entity during the fi nancial year. This group of executives includes the fi ve most highly remunerated Company and consolidated entity executives during the fi nancial year.

Executive Director/
Senior Executive/
Company Secretary	Position
I Campbell	Managing Director
R Wodson	Finance Director
J Lord	Chief Executive of Sunbeam
	Corporation Ltd
J Oates	Chief Executive of E D Oates
	Proprietary Limited
R Pattison	Chief Executive of GUD
	Automotive Pty Ltd
D Cleland	Managing Director of Davey Water
	Products Pty Ltd
A King	Chief Executive of Victa Lawncare Pty Ltd
D Cox	Managing Director of Lock Focus Pty Ltd
T Cooper	Managing Director of Wesf l
	Australia Pty Ltd
M Tyler	Company Secretary

Remuneration Policy (Audited)

The Remuneration Committee of the Board is responsible for establishing the remuneration strategy and structure for the Company’s Executive Directors and Senior Executives.

The objective of the Company’s executive reward program is to ensure reward for performance is competitive and appropriate for the results delivered. Most Senior Executives have a signifi cant proportion of their rewards ‘at risk’.

In reviewing executive remuneration, the Remuneration Committee considers performance-related elements, comparative remuneration and independent advice.

The short-term and long-term incentive programs are cash-based reward schemes. They do not involve the grant of shares or other equity instruments to executives. The short-term incentive program delivers annual cash bonuses based on satisfaction of an internal performance target that measures absolute performance of the Company. The Company’s long-term incentive program delivers a cash bonus based on satisfaction of a comparative performance target measured over a 3-year performance period. Further details regarding both programs are outlined below.

No Executive Director or other Senior Executive participates in any decision relating to his or her own remuneration.

Company Performance and Shareholder Wealth (Unaudited)

On the following page is a table summarising key Company performance and shareholder wealth statistics for the Company over the last fi ve years.

As can be seen from the table, the Company has improved operating performance over the years, enabling increased cash dividends to be paid to shareholders. Whilst the prevailing economic conditions were a key driver in the performance of the Company’s businesses, including tougher consumer conditions in FY2005 and FY2006, the results are also a refl ection of the performance of the Company’s executive team in achieving sustained growth in profi tability and distributions to shareholders.

The remuneration and incentive framework, which has been put in place by the Board, has ensured that executives are focused on both maximising short-term operating performance and long-term strategic growth. This has contributed to the Company generating increased shareholder returns, as set out in the table.

GUD Holdings Annual Report 2007

Remuneration Report

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The Board will continue to review and monitor the remuneration and incentive framework to ensure that performance is fairly rewarded and encouraged, and to attract, motivate and retain a high quality executive team.

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Total Share
Financial NPAT EPS DPS Price
Year $m Cents Cents $
30 June 2003 21.8 35.7 26.0 4.71
30 June 2004 35.5 58.5 40.0 8.88
30 June 2005 30.4 50.2 50.0 6.25
30 June 2006 40.2 67.1 60.0 7.90
30 June 2007 33.6 56.2 61.0 9.18
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*Includes individually signifi cant items.

Components of Remuneration (Audited)

The executive remuneration framework has three components:

short-term performance incentives; and
long-term shareholder return linked performance incentives.

These, together with certain minor non-cash benefi ts, comprise the total remuneration paid to key management personnel.

The relative proportion of Executive Directors’ and Senior Executives’ total remuneration packages that is performance-based is set out in the table below.

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% of Total Target Compensation
(annualised)
Performance-
based
Fixed Remuneration
Remuneration (at target)
STI LTI
Executive Directors
I Campbell 68.1% 11.5% 20.4%
R Wodson 65.8% 18.4% 15.8%
Senior Executives
J Lord 76.1% 14.9% 9.0%
R Pattison 76.3% 14.8% 8.9%
D Cleland 76.2% 14.9% 8.9%
A King 75.4% 15.4% 9.2%
D Cox 76.6% 14.6% 8.8%
J Oates 76.3% 14.8% 8.9%
T Cooper 76.7% 14.6% 8.7%
Company Secretary
M Tyler 73.1% 16.8% 10.1%
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Fixed Remuneration

The remuneration packages for all Executive Directors and Senior Executives contain a fi xed amount that is not performance linked. It generally consists of salary and vehicle entitlement, as well as employer contributions to superannuation funds.

Fixed remuneration for Senior Executives is determined by the scope of their respective positions, knowledge, experience and skills required to perform their roles. Independent consultants provide analysis and advice to ensure the package is competitive in the market for comparable roles. The Remuneration Committee, through a process that considers individual, business unit and overall performance of the Company, reviews package levels annually. Fixed remuneration levels are generally not adjusted during the year unless the individual is promoted or there is a substantial change in market rates.

Variable Performance-linked Remuneration

Performance-linked remuneration includes both short-term and long-term incentives, and is designed to reward Executive Directors and Senior Executives for their business unit or the Company meeting or exceeding fi nancial targets. Both the short-term and long-term incentives are provided in the form of cash (not shares or other equity instruments) and are ‘at risk’ bonuses.

The Board does not exercise any discretion on the payment of short-term and long-term incentives. The amount of performance-linked remuneration paid to an Executive is determined based on the Executive’s performance against set targets and is governed by set plan rules.

Short-Term Incentive (STI)

The Company’s CVA scheme provides an annual cash bonus for meeting or exceeding an agreed CVA target and is paid following the announcement of the Company’s year end results. The CVA target for each business unit and the Company overall is established each year by the Board. The Company’s Executives receive an STI payment where the Company meets its CVA target and, in the case of divisional Executives, their STI potential is linked to the CVA target for their business unit.

Remuneration Report

CVA measures the return on unamortised net assets invested. CVA has been effective because it is the measurement that most closely aligns profi t performance with unamortised net assets invested. The Board has selected CVA as an appropriate annual performance measure as it considers that it measures a true level of performance of the business, without the distorting effect of fi nancing decisions or accounting charges such as depreciation and amortisation.

The CVA STI is calculated with reference to salary and increases upon exceeding the agreed CVA target, up to a ceiling of 150% of the base CVA incentive rate upon achieving 120% of CVA target. No STI is paid where CVA falls below the CVA target.

The CVA STI for target performance varies from 21% of salary for the Managing Director, 35% of salary for the Finance Director, to 25% of salary for divisional Executives.

The CVA STI for target performance varies from 21% of salary for the Managing Director, 35% of salary for the Finance Director, to 25% of salary for divisional Executives.	The CVA STI for target performance varies from 21% of salary for the Managing Director, 35% of salary for the Finance Director, to 25% of salary for divisional Executives.

% of Salary* Threshold and Target Performance Stretch Performance
Executive Directors
I Campbell 20.8%	31.3%
R Wodson 35.0%	52.5%
Senior Executives
J Lord 25.0%	37.5%
R Pattison 25.0%	37.5%
D Cleland 25.0%	37.5%
A King 25.0%	37.5%
D Cox 25.0%	37.5%
J Oates 25.0%	37.5%
T Cooper 25.0%	37.5%
Company Secretary
M Tyler 25.0%	37.5%

Refer to Salary and Fees column in the table at the end of this Remuneration Report.

The Remuneration Committee recommends the cash incentives, determined in accordance with the plan rules.

Details of the CVA STI payable to the Executive Directors and Senior Executives for the year ended 30 June 2007 are set out in the table at the end of this Remuneration Report.

Long-Term Incentive (LTI)

The LTI is designed to align executive fi nancial rewards with those of shareholders by making the executive’s reward dependent upon the Company’s total shareholder returns (TSR) relative to a comparator group.

TSR measures the return a shareholder obtains from ownership of shares in a company in a defi ned period, and takes into account various matters such as changes in the market value of the shares, as well as dividends on those shares.

The LTI is provided as a cash reward, consisting of tranches covering rolling 3-year measurement periods. There is a phasing-in of one and two year measurement period tranches for executives as they are introduced to the incentive scheme.

An incentive is paid where the Company’s TSR over the measurement period is equal to or exceeds the median (50th percentile) of the comparator group ranked by TSR. The incentive increases up to a maximum of 150% of the target incentive rate upon the Company TSR equalling or exceeding the 75th percentile of the comparator group. In assessing whether the LTI performance hurdle for the Company has been met, the Remuneration Committee receives independent data.

The comparator group is the Standard and Poor’s ASX Small Ordinaries index, of which the Company forms part. It was chosen on the basis that it is the most effective way to measure and reward the extent to which shareholder returns are generated relative to the performance of companies that compete with the Company for capital and employees.

GUD Holdings Annual Report 2007

Remuneration Report

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The LTI vests in accordance with the following table:

TSR Target	% of LTI that Vests in a Given Period
TSR below 50th percentile	Nil
TSR at 50th percentile	100%
TSR between 50 and 75th percentile	Progressive vesting from 100% to 150%
TSR at 75th percentile and above	150%

The LTI that Executives receive for target performance varies from 37% of salary for the Managing Director, 30% of salary for the Finance Director, to 15% of salary for corporate and divisional Executives.

Upon cessation of an Executive’s employment due to resignation, only the vested amount is due as an LTI, whereas in cases of retirement, total disablement and death the Board will, and in other circumstances the Board may, pay a pro rata LTI in accordance with TSR performance at the date the Executive’s employment ceases. For instance, the Board may also award a pro rata amount of the LTI having regard to performance against the TSR hurdle should the Company be the subject of a successful takeover bid or other change of control.

The Remuneration Committee considers that the Company’s LTI structure is appropriate, as Executives only receive a benefi t where there is a corresponding direct benefi t to shareholders.

Current Year Performance

Short-Term Incentive (Unaudited)

In the current year, the consolidated entity reached its CVA target. As a result, corporate Executives, including the Managing Director, Finance Director and Company Secretary, whose STIs were based on the performance of the consolidated entity, received a bonus. In addition, some Executives of the Consumer Products, Automotive Products, Water Products and Security Products business units received an STI reward based on achieving or exceeding the business unit CVA performance.

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STI payable for the Actual STI payment Actual STI payment %
Year Ended 30 June 2007 $ as a % of maximum STI Forfeited
Executive Directors
I Campbell 152,513 67.8% 32.2%
R Wodson 119,214 67.8% 32.2%
Senior Executives
J Lord 77,891 78.4% 21.6%
R Pattison 13,111 15.5% 84.5%
D Cleland 85,313 91.0% 9.0%
A King Nil Nil 100.0%
D Cox 43,013 69.5% 30.5%
J Oates Nil Nil 100.0%
T Cooper 46,804 70.9% 29.1%
Company Secretary
M Tyler 55,540 67.8% 32.2%
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A minimum level of performance must be achieved before any STI is payable. The payment relates to STI earned in the year ended 30 June 2007 and paid in July 2007.

Remuneration Report

Long-Term Incentives (Unaudited)

LTIs were achieved for the two year TSR performance, but not for the one and three year performance.

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The relative TSR of the Company in relation to the comparator group for the relevant periods were:
1 July 2006 to 30 June 2007 43.58th percentile
1 July 2005 to 30 June 2007 56.29th percentile
1 July 2004 to 30 June 2007 38.89th percentile
LTI paid for the Maximum LTI payment % %
Year Ended 30 June 2007 $ Payable Forfeited
Executive Directors
I Campbell 397,500 Nil 100.0%
R Wodson 150,750 Nil 100.0%
Senior Executives
J Lord 59,625 Nil 100.0%
R Pattison 51,075 Nil 100.0%
D Cleland 56,250 Nil 100.0%
A King 51,300 Nil 100.0%
D Cox 37,125 Nil 100.0%
J Oates 49,500 75.1% 24.9%
T Cooper 39,600 Nil 100.0%
Company Secretary
M Tyler 49,163 75.1% 24.9%
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*The payment relates to LTI earned in the year ended 30 June 2007 and paid in July 2007.

Employment Contracts (Audited)

Executive Directors

The Managing Director (Ian A Campbell) and Finance Director (Roger J Wodson) have entered into service contracts with the Company.

In the case of the Managing Director, the contract was renewed on 17 May 2006 for a period of 42 months from 1 July 2006. In the case of the Finance Director, the contract was renewed on 4 October 2006 for a period of 54 months from 1 July 2006. These contracts may be terminated by the Company giving 3 months notice in writing or, in the case of termination by the executive, 6 months notice in writing.

Should the Company terminate the employment of the Managing Director (other than for cause) prior to 31 December 2007, a maximum termination payment of the equivalent of two years total annual package is payable. After 1 January 2008, this decreases to a maximum termination payment equivalent to 18 months total annual package, and further decreases to a maximum termination payment equivalent to 12 months total annual package from 1 January 2009.

Should the Company terminate the employment of the Finance Director (other than for cause) prior to 31 December 2007, a maximum termination payment of the equivalent of two years total annual package is payable. After 1 January 2008, this decreases to a maximum termination payment equivalent to 18 months

total annual package, and further decreases to a maximum termination payment equivalent to 12 months total annual package from 1 January 2009.

In the event that the Company determines not to renew the appointment of the Managing Director or the Finance Director at the end of the contract period, an amount equal to the total annual package applicable at the date of the notice is payable to the relevant executive.

Senior Executives

It is the Company’s policy that service contracts for Senior Executives are unlimited in term, but capable of termination on one month’s notice. There is one exception, Mr T Cooper’s service contract requires twelve months notice of termination. The Company retains the right to terminate the contract immediately by making a payment equal to the required payment in lieu of notice.

Mr J Oates’ contract with the Company provides for a payment of up to one year’s annual package if terminated within its initial term of three years.

In addition, Executive Directors and Senior Executives are entitled to receive on termination of employment their statutory entitlements of accrued annual and long service leave, together with superannuation benefi ts.

Remuneration levels are reviewed each year, effective 1 July, and take into account cost of living adjustments, changes in the scope of the role and changes to meet competitive market forces.

GUD Holdings Annual Report 2007

Remuneration Report

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Remuneration Paid

Details of the remuneration and benefi ts paid or provided to Executive Directors and Senior Executives (and the Company Secretary) during the year are included in the table below.

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Post-employment
(Audited) Short-term Employee Benefi ts Benefi ts Total
Proportion
of total
Income which is
Salary STI Cash LTI Cash Protection Car performance
Year & Fees [(1)] Bonus Bonus Premium Benefi ts Superannuation Retirement related
$ $ $ $ $ $ $ $ %
Executive Directors
I A Campbell 2007 728,912 152,513 – 1,964 59,978 108,000 – 1,051,367 14.5%
2006 561,484 – 380,028 3,984 49,798 110,049 – 1,105,343 34.4%
R J Wodson 2007 290,177 119,214 – 2,019 23,887 105,113 540,410 22.1%
2006 292,578 – 110,269 4,634 24,205 92,759 – 524,445 21.0%
Senior Executives
J Lord 2007 290,000 77,891 – 306 – 47,700 – 415,897 18.7%
2006 251,160 62,953 43,375 595 26,568 44,299 – 428,950 24.8%
J Oates 2007 220,000 – 37,175 1,719 20,921 39,600 – 319,415 11.6%
2006 213,944 – 38,251 4,371 23,348 38,510 – 318,424 12.0%
R Pattison 2007 227,000 13,111 – 1,041 26,637 40,860 – 308,649 4.2%
2006 216,300 128,987 – 2,274 25,948 38,934 – 412,443 31.3%
D Cleland 2007 226,296 85,313 1,312 45,995 45,000 – 403,916 21.1%
2006 196,796 – 37,735 3,172 41,643 39,330 – 318,676 11.8%
A King 2007 184,071 – – 1,264 31,349 65,640 – 282,324 0.0%
2006 164,728 – 34,200 2,683 25,762 58,388 – 285,761 12.0%
D Cox 2007 154,397 43,013 – 883 25,785 37,260 – 261,338 16.5%
2006 149,940 – 27,200 1,961 34,685 35,910 – 249,696 10.9%
T Cooper 2007 176,000 46,804 – 842 – 55,380 – 279,026 16.8%
2006 167,700 10,930 28,962 1,600 – 49,386 – 258,578 15.4%
Total Remuneration of Executive Directors and
Senior Executives of the Group including the Company
2007 2,496,853 537,859 37,175 11,350 234,552 544,553 – 3,862,342
2006 2,214,630 202,870 700,020 25,274 251,957 507,565 – 3,902,316
Total Remuneration of Non-Executive Directors
2007 316,250 – – – – 28,463 161,850 506,563
2006 304,500 – – – – 27,406 182,275 514,181
Total Remuneration (Compensation of Key
Management Personnel of the Company and Group)
2007 2,813,103 537,859 37,175 11,350 234,552 573,016 161,850 4,368,905
2006 2,519,130 202,870 700,020 25,274 251,957 534,971 182,275 4,416,497
Remuneration of Company Secretary
M Tyler 2007 214,160 55,540 36,898 325 – 24,000 – 330,923 27.9%
2006 203,422 – 37,955 84 – 18,578 – 260,039 14.6%
Total Company Secretarial Compensation
2007 214,160 55,540 36,898 325 – 24,000 – 330,923
2006 203,422 – 37,955 84 – 18,578 – 260,039
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(1) All executives and senior management are entitled to four weeks annual leave and long service leave based on statutory entitlements.

Directors’ Report

The Directors of GUD Holdings Limited (the Company) present their report on the consolidated entity, being the Company and its controlled entities, for the year ended 30 June 2007.

Review of Operations and Results

A review of the operations of the consolidated entity during the fi nancial year and the results of those operations are set out on pages 4–17 of this Annual Report.

Environmental Regulation

Some of the consolidated entity’s activities are subject to various environmental regulations under both Commonwealth and State legislation. The Directors are not aware of any breaches of those environmental regulations during the fi nancial year. The consolidated entity endorses an Environmental Policy of compliance and open communication on environmental issues.

Dividends

Signifi cant Changes

In the opinion of the Directors, other than referred herein, there were no signifi cant changes in the state of affairs of the consolidated entity during the year.

Principal Activities

The principal activities of the consolidated entity during the course of the fi nancial year were the manufacture, distribution and sale of cleaning products, household appliances and lawnmowers, automotive fi lters and automotive products, locking devices, pumps, pool and spa systems, and water pressure systems, with operations in Australia and New Zealand.

Apart from the acquisition of the business of Monarch Pool Systems Pty Ltd, there were no signifi cant changes in the nature of the activities of the consolidated entity during the year.

Events after Balance Date

Dividend Announcement

On 26 July 2007, the Directors declared a fully franked dividend of 34 cents per ordinary share. Shares will trade ex dividend on 20 August 2007, with the record date of 24 August 2007. The dividend will be paid on 7 September 2007.

Restructuring of Business

On 26 July 2007, the Directors approved the restructuring of the cleaning products business of E D Oates Pty Ltd, a subsidiary of GUD Holdings Limited. This restructure is expected to cost approximately $8.5 million ($5.9 million after tax). For additional information,

Likely Developments

Likely developments in, and expected results of, the operations of the consolidated entity in subsequent years are referred to on page 7 in this Report.

The consolidated entity will continue to pursue its policy of increasing the profi tability and market share of its major business sectors in the next fi nancial year.

Further information as to likely developments in the operations of the consolidated entity would be likely to result in unreasonable prejudice to the consolidated entity and has not, therefore, been included in this Report.

During and since the end of the fi nancial year, the following dividends have been paid or declared.

A fi nal ordinary dividend of 33 cents per share in respect of the year ended 30 June 2006 was declared on 27 July 2006 and paid on 8 September 2006, amounting to $19,772,334.12. This fi nal dividend was fully franked.
An interim ordinary dividend of 27 cents per share in relation to the year ended 30 June 2007 was declared on 29 January 2007 and paid on 9 March 2007, amounting to $16,177,364.28. This dividend was fully franked.
A fi nal ordinary dividend of 34 cents per share in respect of the year ended 30 June 2007 was declared on 26 July 2007 payable on 7 September 2007 to shareholders registered on 24 August 2007. This dividend will be fully franked.

Buy-Back of Shares

As at 30 June 2007, under the terms of the Company’s current on-market Buy-Back, since inception in 2001, the Company had purchased and cancelled 7,591,681 ordinary shares to date at an average price of $3.22 per share. During the year ended 30 June 2007, no ordinary shares were purchased under the Buy-Back.

Share Capital

At 30 June 2007, there were 59,916,164 ordinary shares on issue.

Directors, Company Secretary, Directors’ Meetings and Directors’ Shareholdings

The names of the Directors who held offi ce during the fi nancial year and details of current Directors’ qualifi cations, age, experience and special responsibilities are set out on page 36. The qualifi cations and experience of the Company Secretary is also set out on page 36.

Details of Directors’ meetings and Board Committees, including attendances are on page 23 and Directors’ interests in the Company on page 21.

Appointment of Auditor

At the Annual General Meeting held on 26 October 2006, the Company appointed KPMG as the Company’s auditor, with effect from the fi nancial year commencing 1 July 2006.

GUD Holdings Annual Report 2007

Directors’ Report

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Auditor Independence

There is no former partner or director of KPMG, the Company’s auditors, who is or was at any time during the fi nancial year an offi cer of the consolidated entity.

The auditor’s independence declaration made under section 307C of the Corporations Act 2001 is set out on page 76 and forms part of this Report.

Non-Audit Services

Details of the amounts paid or payable to the Company’s auditors, KPMG, for non-audit services provided during the year are shown in Note 25 to the

The Directors are satisfi ed that the provision of such non-audit services complies with the general standard of independence for auditors imposed by, and did not compromise the auditor independence requirements of, the Corporations Act 2001 in view of both the amount and the nature of the services provided.

Options

No options were granted during the year and no options have been granted since the end of the fi nancial year. No options were exercised during the fi nancial year.

Derivatives and Other Financial Instruments

It is the consolidated entity’s policy to use derivative fi nancial instruments to hedge cash fl ows subject to interest rate, foreign exchange and commodity price risk according to a policy approved by the Board.

Derivative fi nancial instruments are not held for speculative purposes. Exposures, including related derivative hedges, are reported to the Board on a monthly basis.

Financial facilities and operating cash fl ows are managed to ensure that the consolidated entity is not exposed to any adverse liquidity risks. Adequate standby facilities are maintained to provide strategic liquidity to meet cash fl ows in the ordinary course of business.

Proceedings on behalf of the Company

There were no proceedings brought on behalf of the Company nor any persons applying for leave under section 237 of the Corporations Act 2001 to bring proceedings on behalf of the Company.

The Company has also agreed to indemnify the current Directors of its controlled entities, the Company Secretary and certain Senior Executives for all liabilities to another person (other than the Company or a related body corporate) that may arise from their position, except where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any such liabilities, including costs and expenses.

Pursuant to this indemnifi cation, the Company has paid a premium for an insurance policy for the benefi t of Directors, Secretaries and Executives of the Company and related bodies corporate of the Company. In accordance with common practice, the insurance policy prohibits disclosure of the nature of the liability covered and the amount of the premium.

The Company has not otherwise, during or since the end of the fi nancial year, indemnifi ed or agreed to indemnify an offi cer or auditor of the Company or of any related body corporate against a liability incurred as

Remuneration Policy for Directors and Executives

The policy for determining the nature and amount of remuneration for Directors and Executives is described in the Remuneration Report on pages 25–33, which forms part of this Directors’ Report.

Details of the benefi ts paid or provided to Directors and specifi ed Executives are included in the Remuneration Report on pages 25–33, which forms part of this Directors’ Report, and in summary in Note 22 to

Rounding Off

The Company is a company of the kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and, in accordance with that Class Order, amounts in this Report and the accompanying fi nancial statements have been rounded off to the nearest one thousand dollars unless otherwise stated.

This Directors’ Statutory Report is signed on behalf of the Directors in accordance with a resolution of Directors made pursuant to section 298(2) of the Corporations Act 2001.

Indemnity and Insurance

The Company has, pursuant to contractual arrangements, agreed to indemnify the current and a number of former Directors of the Company against all liabilities to another person (other than the Company or a related body corporate) that may arise from their position as a Director of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any such liabilities, including costs and expenses.

C K Hall I A Campbell Chairman of Directors Managing Director

Dated at Melbourne, 26 July 2007

Board of Directors

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C K Hall*

BSc (Metallurgy), B.Com, MBA, FCPA, FAICD (Age 65) Non-Executive Director since 13 September 1999. Appointed Chairman on 27 April 2004.

Chairman of Nominations Committee and Remuneration Committee. President and Chairman of the Royal Automobile Club of Victoria (RACV) Ltd, Chairman of Victorian Energy Networks Corporation. Retired as Chairman of State Trustees Limited on 1 July 2004 and retired as Chairman of Sanford Ltd in May 2003.

Mr Hall has held senior executive positions in investment and merchant banking, including Managing Director of National Australia Ltd between 1985 and 1993, and was Chairman of the International Banks and Securities Association between 1990 and 1992.

G D W Curlewis*

BA MBA (Age 66)

Appointed Non-Executive Director on 1 March 2003.

Mr Curlewis is Deputy Chairman of Nufarm Limited (a director since January 2000). He is also a Director of Sigma Pharmaceuticals Limited (since June 2007), GrainCorp Limited (since February 2005) and The Alfred Foundation. He is also a Member of Indec Consulting Advisory Board. Former Chairman of Remunerator Australia Pty Limited (retired August 2006). Former Managing Director of National Consolidated Limited, former Director of Pacifi ca Group Limited (retired March

2007), National Foods Limited (retired June 2005) and Hamilton Island Limited (retired December 2003).

R M Herron*

FCA FAICD (Age 57) Appointed Non-Executive Director on 17 June 2004.

Appointed Chairman of Audit & Compliance Committee on 17 June 2004. Mr Herron has been a Chartered Accountant since 1973. Former Deputy Chairman of Coopers & Lybrand (now PricewaterhouseCoopers). Mr Herron retired as a partner of PricewaterhouseCoopers in December 2002.

Mr Herron is also a Non-Executive Director of the Royal Automobile Club of Victoria (RACV) Ltd (since July 2007), Select Harvest Limited (since 2005), Heemskirk Consolidated Limited (since 2004), Professional Association Superannuation Ltd, E O Group Limited, Variety Club of Victoria Inc, and is Non-Executive Chairman of Investment Backed Mortgages Limited.

Mr Herron was a Director of National Telecoms Group Ltd from 2001 to June 2003.

P G Thomas*

AM BCom (Age 65) Appointed Non-Executive Director on 24 June 2002.

Mr Thomas is a Director of Australian Super and Australian Industry Group Nominees. Mr Thomas is Chairman of the Victorian Learning Employment and Skills Commission.

He is former Chairman of Victorian Manufacturing Industry Consultative Council (retired November 2002), Melbourne Port Corporation (retired April 2003), a former Non-Executive Director of Pacifi ca Group Limited (retired March 2007) and a Councillor of RMIT University (retired December 2004).

Mr Thomas was formerly Managing Director of Holdens Engine Company and Executive Director of Planning and External Affairs with Holden Limited.

I A Campbell

FAICD (Age 57) Appointed Managing Director on 5 October 1998. Vice-President of A.I.G. (Vic). Former Managing Director of Pacifi c Dunlop Cable Group.

R J Wodson

FCPA FAICD (Age 61) Appointed Finance Director on 25 June 2001.

Mr Wodson was appointed Chief Financial Offi cer of GUD on 1 February 2000. Former Chief Financial Offi cer of Bunge Defi ance Group.

Company Secretary: M G Tyler

LLB BCom (Hons), MBA, ACIS Appointed Company Secretary on 18 November 2005.

Mr Tyler is an associate of Chartered Secretaries Australia, a former partner with Freehills and general counsel with Southcorp Limited. He has held a legal practising certifi cate in Victoria for 21 years.

All Non-Executive Directors are independent.

GUD Holdings Annual Report 2007

Board of Directors

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FINANCIAL STATEMENTS

38 Income Statements

39 Balance Sheets

40 Statements of Changes in Equity

41 Cash Flow Statements

42 Notes to the Financial Statements

74 Directors’ Declaration

75 Independent Audit Report

76 Auditor’s Independence Declaration

GUD Holdings Limited and subsidiaries

Income Statements

For the year ended 30 June 2007

		Consolidated	Consolidated	GUD Holdings Limited	GUD Holdings Limited
	Note	2007	2006	2007	2006
		$’000	$’000	$’000	$’000
Revenue	2(a)	518,919	462,693	21,084	39,893
Cost of goods sold		(327,538)	(290,466)	–	–
Gross Prof t		191,381	172,227	21,084	39,893
Other income	2(b)	1,184	5,303	460	717
Marketing and selling		(58,373)	(53,436)	–	–
Product development and sourcing		(5,701)	(4,401)	–	–
Logistics expenses and outward freight		(35,218)	(29,056)	–	–
Administration		(32,210)	(26,295)	(4,634)	(5,985)
Finance costs	2(c)	(9,219)	(6,994)	(6,950)	(4,069)
Restructuring expenses – individually signif cant items
Restructure of GUD New Zealand Automotive operation		(3,587)	–	–	–
Other		(556)	(416)	–	–
Prof t before income tax expense		47,701	56,932	9,960	30,556
Income tax expense	3(a)	(14,057)	(16,736)	3,147	1,143
Prof t attributable to members of GUD Holdings Limited		33,644	40,196	13,107	31,699
Earnings per share:
Basic earnings per share (cents per share)	30	56.15	67.09
Diluted earnings per share (cents per share)	30	56.15	67.09

GUD Holdings Annual Report 2007

Financial Statements

GUD Holdings Limited and subsidiaries

Balance Sheets

As at 30 June 2007

		Consolidated	Consolidated	GUD Holdings Limited	GUD Holdings Limited
	Note	2007	2006	2007	2006
		$’000	$’000	$’000	$’000
Current assets
Cash and cash equivalents	6	17,733	17,029	–	–
Trade and other receivables	7	67,650	57,204	57,504	39,854
Other assets	8	4,628	3,268	686	291
Current tax assets		246	–	117	–
Inventories	9	95,719	82,880	–	–
Total current assets		185,976	160,381	58,307	40,145
Non-current assets
Other f nancial assets	10	795	197	136,840	136,380
Property, plant and equipment	11	30,395	29,902	70	74
Deferred tax assets	3(b)	571	667	243	351
Goodwill	12	42,555	25,428	–	–
Other intangible assets	13	63,933	58,514	–	–
Total non-current assets		138,249	114,708	137,153	136,805
Total assets		324,225	275,089	195,460	176,950
Current liabilities
Trade and other payables	14	55,358	44,940	1,093	599
Borrowings and loans	15(a)	35,765	35,279	18,145	19,645
Current tax payables		–	1,818	–	1,847
Provisions	16(a)	14,827	13,149	1,145	776
Total current liabilities		105,950	95,186	20,383	22,867
Non-current liabilities
Borrowings and loans	15(b)	76,650	35,813	70,000	26,000
Deferred tax liabilities	3(b)	951	986	–	–
Provisions	16(b)	1,399	1,665	19	183
Total non-current liabilities		79,000	38,464	70,019	26,183
Total liabilities		184,950	133,650	90,402	49,050
Net assets		139,275	141,439	105,058	127,900
Equity
Share Capital	17	98,437	98,437	98,437	98,437
Reserves	18	(386)	(527)	–	–
Retained earnings		41,224	43,529	6,621	29,463
Total equity		139,275	141,439	105,058	127,900

GUD Holdings Limited and subsidiaries

Statements of Changes in Equity

For the year ended 30 June 2007

	Consolidated	Consolidated	GUD Holdings Limited	GUD Holdings Limited
	2007	2006	2007	2006
	$’000	$’000	$’000	$’000
Retained Earnings
Retained earnings at the beginning of the year	43,529	35,838	29,463	30,118
Impact of adoption of AASB139 Financial Instruments:
Recognition and Measurement	–	(151)	–	–
Restated opening retained earnings	43,529	35,687	29,463	30,118
Prof t attributable to members of GUD Holdings Limited	33,644	40,196	13,107	31,699
Dividends paid	(35,949)	(32,354)	(35,949)	(32,354)
Retained earnings at the end of the year	41,224	43,529	6,621	29,463
Reserves
Foreign Currency Translation Reserve:
Balance at the beginning of the year	(527)	2	–	–
Exchange differences on translating foreign operations	475	(529)	–	–
Balance at the end of the year	(52)	(527)	–	–
Cash Flow Hedge Reserve:
Balance at the beginning of the year	–	–	–	–
Fair value adjustments transferred to equity	(565)	–	–	–
Amounts transferred to inventory	231	–	–	–
Balance at the end of the year	(334)	–	–	–
Reserves at the end of the year	(386)	(527)	–	–
Share Capital
Share capital at the beginning of the year – 59,916,164
(1 July 2005 – 59,916,164) fully paid shares	98,437	98,437	98,437	98,437
Share capital at the end of the year – 59,916,164
(30 June 2006 – 59,916,164) fully paid shares	98,437	98,437	98,437	98,437
Total equity	139,275	141,439	105,058	127,900
Prof t for the year	33,644	40,196	13,107	31,699
Fair value adjustments transferred to cash f ow hedge reserve	(565)	–	–	–
Net change in fair value of cash f ow hedges transferred to inventory	231	–	–	–
Exchange differences on translating foreign operations	475	(529)	–	–
Total Income And Expense For The Year	33,785	39,667	13,107	31,699

The amounts recognised directly in equity are net of tax.

GUD Holdings Annual Report 2007

Financial Statements

GUD Holdings Limited and subsidiaries

Cash Flow Statements

For the year ended 30 June 2007

		Consolidated	Consolidated	GUD Holdings Limited	GUD Holdings Limited
	Note	2007	2006	2007	2006
		$’000	$’000	$’000	$’000
Cash f ows from operating activities
Receipts from customers		554,395	512,164	443	5,017
Payments to suppliers and employees		(489,707)	(431,190)	(4,352)	(5,496)
Dividends received		–	–	20,450	35,222
Interest received		268	301	191	201
Interest and other costs of f nance paid		(9,159)	(6,994)	(6,890)	(3,816)
Income taxes paid		(15,910)	(17,270)	(15,528)	(16,358)
Net cash provided by/(used in) operating activities	26(a)	39,887	57,011	(5,686)	14,770
Cash f ows from investing activities
Payments for property, plant and equipment		(8,709)	(5,498)	(34)	(68)
Payments for businesses net of cash acquired	26(b)	(29,425)	(35,517)	–	(35,520)
Proceeds from sale of property, plant and equipment		1,553	6,297	–	–
(Repayment)/Proceeds from subsidiary entity loans		–	–	(831)	27,054
Payments for intangible assets and product development costs		(7,825)	(5,871)	–	–
Net cash used in investing activities		(44,406)	(40,589)	(865)	(8,534)
Cash f ows from f nancing activities
Proceeds of borrowings		41,072	13,596	43,026	23,945
Dividends paid		(35,949)	(32,354)	(35,949)	(32,354)
Net cash provided by/(used in) f nancing activities		5,123	(18,758)	7,077	(8,409)
Net increase/(decrease) in cash held		604	(2,336)	526	(2,173)
Cash at the beginning of the year		17,029	19,910	(1,700)	473
Effects of exchange rate changes on the balance of
cash held in foreign currencies		100	(545)	–	–
Cash at the end of the year		17,733	17,029	(1,174)	(1,700)
Reconciliation of net cash at the end of the year
Cash at bank and on hand	6	17,733	17,029	–	–
Unsecured bank overdraft	15(a)	–	–	(1,174)	(1,700)
		17,733	17,029	(1,174)	(1,700)

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

1. Summary of accounting policies

Reporting entity

GUD Holdings Limited (the ‘Company’) is a company domiciled in Australia. The consolidated fi nancial statements of the Company as at and for the year ended 30 June 2007 comprise the Company and its subsidiaries (together referred to as the ‘Consolidated Entity’).

Basis of preparation

Statement of compliance

The fi nancial report is a general purpose fi nancial report that has been prepared in accordance with the Australian Accounting Standards (AASB’s) (including Australian interpretations) and the Corporations Act 2001. The fi nancial report of the Consolidated Entity also complies with IFRS and interpretations adopted by the International Accounting Standards Board. The Company fi nancial report also complies with IFRS, except for the disclosure requirements in IAS 32 ‘Financial Instruments: Disclosure and Presentation’, as the Australian equivalent Accounting Standard, AASB 132 ‘Financial Instruments: Disclosure and Presentation’ does not require such disclosures to be presented by the Company where its separate fi nancial statements are presented together with the consolidated fi nancial statements of the Consolidated Entity.

The fi nancial statements were authorised for issue by the Directors on 26 July 2007.

Basis of measurement

The fi nancial report has been prepared on the basis of historical cost, except for derivative fi nancial instruments, which are measured at fair value.

Functional and presentation currency

These consolidated fi nancial statements are presented in Australian dollars, which is the Company’s functional currency and the functional currency of the majority of the Consolidated Entity.

Use of estimates and judgements

In the preparation of the fi nancial statements, the Directors are required to make judgements, estimates and assumptions that affect the application of accounting policies and the reported carrying values of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgements. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In particular, information about signifi cant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most signifi cant effect on the amount recognised in the fi nancial statements are described in the following notes:

Note 12 – Goodwill
Note 13 – Other intangible assets
Note 23 – Acquisitions of businesses
Note 29 – Financial instruments

Certain comparative amounts have been reclassifi ed to conform with the current year’s presentation.

Signifi cant accounting policies

The following signifi cant accounting policies have been applied consistently to all periods presented in these consolidated fi nancial statements, and have been applied consistently by entities within the Consolidated Entity.

(a) Principles of consolidation

The consolidated fi nancial statements are the fi nancial statements of all the entities that comprise the Consolidated Entity, being the Company and its subsidiaries as defi ned in Accounting Standard AASB 127 Consolidated and Separate Financial Statements. A list of subsidiaries appears in Note 21 to the fi nancial statements. On acquisition, the identifi able assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifi able net assets acquired is recognised as goodwill. If the fair values of the identifi able net assets acquired exceed the cost of acquisition, such excess is credited to the income statement in the period of acquisition.

The consolidated fi nancial statements include the information and results of each subsidiary from the date on which the Company obtains control and until such time as the Company ceases to control such entity. In preparing the consolidated fi nancial statements, all intercompany balances and transactions and unrealised profi ts arising within the Consolidated Entity are eliminated in full. In the Company’s fi nancial statements, investments in subsidiaries are carried at cost.

(b) Foreign currency

Foreign currency transactions

All foreign currency transactions during the year are brought to account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date.

Exchange differences are recognised in the income statement in the period in which they arise except that:

exchange differences on transactions entered into in order to hedge certain foreign currency risks (refer ‘Derivative fi nancial instruments’); and
exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned or likely to occur, which form part of the net investment in a foreign operation, are recognised in the foreign currency translation reserve and recognised in the income statement on disposal of the net investments.

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

Foreign operations

On consolidation, the assets and liabilities of the Consolidated Entity’s foreign operations are translated at exchange rates prevailing at the reporting date. Income and expense items are translated at weighted average rates of exchange for the year which approximate actual exchange rates. Exchange differences arising, if any, are recognised in the foreign currency translation reserve and recognised in the income statement on disposal of the foreign operation.

Goodwill, fair value adjustments, assets and liabilities arising on the acquisition of a foreign operation are translated at exchange rates prevailing at the reporting date. Goodwill arising on acquisitions before the date of transition to Australian equivalents of IFRS is treated as an Australian dollar denominated asset.

(c) Segment reporting

Segment reporting is presented in respect of the Consolidated Entity’s business and geographical segments. The primary format, business segments, is based on the Consolidated Entity’s management and internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment, as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate expenses, interest and tax, corporate borrowings and deferred tax balances.

(f) Derivative fi nancial instruments

The Consolidated Entity enters into a variety of derivative fi nancial instruments to manage its exposure to interest rate and foreign exchange rate risk, including forward foreign exchange contracts, options, collars, and interest rate swaps, options and collars. Further details of derivative fi nancial instruments are disclosed in Note 29 to the fi nancial statements. A derivative fi nancial instrument is recognised if the Consolidated Entity becomes a party to the contractual provisions of the instrument. Regular purchases and sales of fi nancial assets are accounted for at trade date, ie when the Consolidated Entity commits itself to the purchase or sale of the asset.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in the income statement immediately, unless the derivative is designated and considered an effective hedging instrument, in which case it is initially recognised in equity. The subsequent timing of the recognition of the hedging instrument in the income statement depends on the nature of the hedge relationship. The Consolidated Entity designates certain derivatives as either hedges of the fair value of recognised assets or liabilities or fi rm commitments (fair value hedges), and hedges of highly probable forecast transactions (cash fl ow hedges).

Fair value hedge

(d) Revenue recognition

Sale of goods

Revenue is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised when the Consolidated Entity has transferred to the buyer the signifi cant risks and rewards of ownership of the goods.

Dividend and interest revenue

Dividend revenue is recognised when the right to receive payment is established. Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the fi nancial asset.

(e) Financial instruments issued by the Consolidated Entity

Debt and equity instruments

Debt and equity instruments are classifi ed as either liabilities or as equity in accordance with the substance of the contractual arrangement.

Interest and dividends

Interest and dividends are classifi ed as expenses or as distributions of profi t consistent with the balance sheet classifi cation of the related debt or equity instruments.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in the income statement immediately, together with any changes in their fair value of the hedged asset or liability that is attributable to the hedged risk.

Hedge accounting is discontinued when the hedge instrument expires or is sold, terminated, exercised or no longer qualifi es for hedge accounting.

Cash fl ow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash fl ow hedges are deferred and recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.

Amounts deferred and recognised in equity are subsequently transferred to the income statement in the periods when the impact of the hedged item is recognised in the income statement. When the forecast transaction that is hedged (purchases of inventory) results in the recognition of a non-fi nancial asset or a non-fi nancial liability, gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset (inventory).

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

1. Summary of accounting policies (continued)

Hedge accounting is discontinued on a prospective basis when the hedging instrument expires or is sold, terminated, or exercised or no longer qualifi es for hedge accounting. Any cumulative gain or loss deferred and recognised in equity at that time is retained in equity and is transferred to the income statement when the result of the forecast transaction is ultimately recognised in the income statement. However, when a forecast transaction is no longer expected to occur, or hedge ineffectiveness is identifi ed, the cumulative gain or loss deferred and recognised in equity is recognised immediately in the income statement.

Derivatives that do not qualify for hedge accounting

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognised immediately in the income statement.

Embedded derivatives

Derivatives embedded in other fi nancial instruments or other host contracts are recognised as separate derivatives when their risks and characteristics are not closely related to those of host contracts, and the host contracts are not measured at fair value with changes in fair value recognised in the income statement.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Consolidated Entity is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be suffi cient taxable profi ts against which to utilise the benefi ts of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets refl ects the tax consequences that would follow from the manner in which the Company/subsidiary expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company/subsidiary intends to settle its current tax assets and liabilities on a net basis.

Tax consolidation

(g) Income tax

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the income statement, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill.

Current tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profi t or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred tax

Deferred tax is recognised using the balance sheet method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the fi nancial statements and the corresponding tax base of those items.

Deferred tax assets and liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that suffi cient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination), which affect neither taxable income nor accounting profi t. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated group under Australian taxation law. GUD Holdings Limited is the head entity in the tax-consolidated group.

Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised in the separate fi nancial statements of the members of the tax-consolidated group using the ‘separate taxpayer within group’ approach. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members of the tax-consolidated group are recognised by the Company (as head entity in the tax-consolidated group).

Due to the existence of a tax funding arrangement between the entities in the tax-consolidated group, amounts are recognised as payable to or receivable by the Company and each member of the tax-consolidated group in relation to the tax contribution amounts paid or payable between the parent entity and the other members of the tax-consolidated group in accordance with the arrangement. Further information about the tax funding arrangement is detailed in Note 3 to the

(h) Impairment of property, plant, equipment and intangible assets

At each reporting date, the Consolidated Entity reviews the carrying amounts of its property, plant, equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset (or cash-generating unit) is estimated in order to determine the extent of the impairment loss (if any). Where the asset (or cash-generating unit) does not generate cash infl ows that are independent from other assets, the Consolidated Entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

Goodwill, intangible assets with indefi nite useful lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired. An impairment of goodwill is not subsequently reversed. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset for which the estimates of future cash fl ows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in the income statement immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cashgenerating unit) in prior years. A reversal of an impairment loss is recognised in the income statement immediately.

(i) Goods and services tax

Revenues, expenses and non-fi nancial assets are recognised net of the amount of goods and services tax (GST), except:

where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

Cash fl ows are included in the cash fl ow statement on a gross basis. The GST component of cash fl ows arising from investing and fi nancing activities that is recoverable from, or payable to, the taxation authority is classifi ed as operating cash fl ows.

(j) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments, net of outstanding bank overdrafts. Bank overdrafts are shown within borrowings and loans in current liabilities in the balance sheet. Bank overdrafts are included as a component of cash and cash equivalents for the purpose of the statement of cash fl ows.

(k) Non-derivative fi nancial assets

Non-derivative fi nancial assets are initially recognised at fair value. Subsequent to initial recognition, non-derivative fi nancial assets are measured as described below. Financial assets are derecognised if the Consolidated Entity’s rights to the cash fl ows from the fi nancial assets expire or are discharged or cancelled.

Investments

Investments in subsidiaries are recorded at cost less impairment, where identifi ed.

Loans and receivables

Trade receivables, loans and other receivables are recorded at amortised cost less identifi ed impairment.

(l) Inventories

Inventories are valued at the lower of cost and net realisable value. Costs, including an appropriate portion of fi xed and variable overhead expenses, are assigned to inventory by the method most appropriate to each particular class of inventory, with the majority being valued on a fi rst in fi rst out basis. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

(m) Property, plant and equipment

Property, plant and equipment and leasehold improvements are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

Depreciation is provided on property, plant and equipment, including freehold buildings, but excluding land. Depreciation is calculated on a straight line basis so as to depreciate the cost of each asset over its estimated useful life to its estimated residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight line method. The estimated useful lives, residual values and depreciation method is reviewed at the end of each annual reporting period.

The following estimated useful lives are used in the calculation of depreciation:

of depreciation:
• Buildings	25 to 40 years
• Plant and equipment	3 to 12 years
• Equipment under f nance lease	3 to 12 years

(n) Leased assets

Leases are classifi ed as fi nance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classifi ed as operating leases.

Assets held under fi nance leases are initially recognised at their fair value or, if lower, at amounts equal to the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a fi nance lease obligation.

Lease payments are apportioned between fi nance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to the income statement.

Subsequent to their initial recognition, fi nance leased assets are amortised over their estimated useful life as described in (m) above.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

1. Summary of accounting policies (continued)

(o) Intangible assets

Patents, licences and distribution rights

Patents, licences and distribution rights, which have a fi nite useful life, are measured at cost less accumulated amortisation and impairment, where identifi ed. Amortisation is charged on a straight line basis over the shorter of the relevant agreement or useful life. The estimated useful life and amortisation method is reviewed at the end of each annual reporting period.

The carrying value is tested for impairment as part of the annual testing of cash-generating units.

Brand names and trademarks

Brand names and trademarks are recorded at cost. The carrying value is tested annually for impairment as part of the annual testing of cash-generating units.

(p) Financial liabilities

Financial liabilities are initially recognised at fair value. Subsequent to initial recognition, fi nancial liabilities are measured as described below. Financial liabilities are derecognised when the Consolidated Entity’s obligations specifi ed in the contract expire or are discharged or cancelled.

Payables

Trade payables and other accounts payable are measured at cost.

Borrowings

Borrowings are recorded initially at fair value, net of transaction costs. Subsequent to initial recognition, borrowings are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in the income statement over the period of the borrowing using the effective interest rate method.

Borrowing costs are expensed as incurred.

Goodwill

Goodwill, representing the excess of the cost of acquisition over the fair value of the identifi able assets, liabilities and contingent liabilities acquired, is recognised as an asset and not amortised, but tested for impairment annually and whenever there is an indication that the goodwill may be impaired. Any impairment is recognised immediately in the income statement and is not subsequently reversed.

Research and development costs

Expenditure on research activities is recognised as an expense in the income statement in the period in which it is incurred. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the income statement in the period as incurred. An intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following are demonstrated:

the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefi ts;
the availability of adequate technical, fi nancial and other resources to complete the development, and to use or sell the intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its development.

Internally-generated intangible assets are stated at cost less accumulated amortisation and impairment, and are amortised on a straight-line basis over their useful lives as follows:

Product development costs over a maximum of 3 years.

Intangible assets acquired in a business combination

All identifi ed intangible assets acquired in a business combination are recognised separately from goodwill where they satisfy the defi nition of an intangible asset and their fair value can be measured reliably.

(q) Employee benefi ts

Provision is made for benefi ts accruing to employees in respect of wages and salaries, annual leave, long service leave and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.

Provisions made in respect of employee benefi ts expected to be settled within 12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Provisions made in respect of employee benefi ts that are not expected to be settled within 12 months are measured as the present value of the estimated future cash outfl ows to be made by the Consolidated Entity in respect of services provided by employees up to reporting date.

Defi ned contribution plans

Contributions to defi ned contribution superannuation plans are expensed when incurred.

(r) Provisions

Provisions are recognised when the Consolidated Entity has a present obligation, the future sacrifi ce of economic benefi ts is probable and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash fl ows estimated to settle the present obligation, its carrying amount is the present value of those cash fl ows.

When some or all of the economic benefi ts required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

Onerous contracts

An onerous contract is considered to exist where the Consolidated Entity has a contract under which the unavoidable cost of meeting the contractual obligations exceeds the economic benefi ts estimated to be received. Present obligations arising under onerous contracts are recognised as a provision to the extent that the present obligations exceed the economic benefi ts estimated to be received.

Restructuring

Provision for restructurings are recognised when the Consolidated Entity has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by:

starting to implement the plan; or
announcing its main features to those affected by it.

Warranties

(s) New standards and interpretations not yet adopted

The following standards have been identifi ed as those which may impact the Consolidated Entity in the period of initial application. They are available for early adoption at 30 June 2007, but have not been applied in preparing this fi nancial report:

AASB7 Financial Instruments: Disclosures

This standard is applicable to annual reporting periods beginning on or after 1 January 2007. It will not impact the results of the Consolidated Entity, but will require extensive additional disclosures with respect to the Consolidated Entity and the Company’s fi nancial instruments.

AASB8 Operating Segments

This standard is applicable for annual reporting periods beginning on or after 1 January 2009. It will not impact the results of the Consolidated Entity, but may impact the disclosure of results of the Consolidated Entity.

Provisions for warranty costs are recognised at the date of sale of the relevant products, at the Directors’ best estimate of the expenditure required to settle the Consolidated Entity’s liability.

		Consolidated	Consolidated	GUD Holdings Limited	GUD Holdings Limited
	Note	2007	2006	2007	2006
		$’000	$’000	$’000	$’000
2. Prof t from operations
(a) Revenue
Sale of goods		518,651	462,392	–	–
Rendering of services		–	–	443	4,470
		518,651	462,392	443	4,470
Dividends:
Subsidiaries	28	–	–	20,450	35,222
Interest:
Other parties		268	301	191	201
Total revenue		518,919	462,693	21,084	39,893
(b) Other income
Gain on sale of property, plant and equipment		–	1,324	–	–
Net foreign exchange gain		–	1,037	–	–
Changes in fair value of f nancial assets classif ed as
fair value through the income statement		548	1,763	460	170
Other		636	1,179	–	547
		1,184	5,303	460	717

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

	Consolidated	Consolidated	GUD Holdings	Limited
	2007	2006	2007	2006
	$’000	$’000	$’000	$’000
2. Prof t from operations(continued)
(c) Expense disclosures
Prof t before income tax has been arrived at after charging
the following expenses:
Write-down in value of inventories to net realisable value	41	108	–	–
Depreciation and amortisation
Depreciation on buildings	–	(237)	–	–
Depreciation on plant and equipment	6,702	6,228	38	8
Amortisation of leased plant and equipment	1,151	1,040	–	–
Amortisation of product development costs	4,483	3,935	–	–
Amortisation of other intangibles	478	643	–	–
Total depreciation and amortisation	12,814	11,609	38	8
Finance costs
Interest expense – other parties	9,219	6,994	6,950	4,069
Product development costs
Expensed directly to income statement	5,701	4,401	–	–
Amortisation of product development costs	4,483	3,935	–	–
Total product development sourcing and amortisation	10,184	8,336	–	–
Employee benef t expense:
Post employment benef ts:
Def ned contribution plans	5,650	5,060	226	238
Impairment of trade receivables:
Other entities	303	(48)	–	–
Operating lease rental expenses:
Minimum lease payments	11,253	10,094	5	26
Loss on sale of plant and equipment:
Loss on sale of plant and equipment	1,226	–	–	–
Loss on sale of plant and equipment GUD NZ included in signif cant item	1,136	–	–	–
Loss on sale of plant and equipment excluding signif cant item	90	–	–	–
Net foreign exchange loss	1,223	–	–	–

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

	Consolidated	Consolidated	GUD Holdings Limited	GUD Holdings Limited
	2007	2006	2007	2006
	$’000	$’000	$’000	$’000
3. Taxation
(a) Income tax expense recognised in prof t
Prima facie income tax expense calculated at 30%
(2006: 30%) on prof t	14,310	17,080	2,988	9,167
Increase/(decrease) in income tax expense due to:
Non-deductible expenditure	433	210	3	257
Non-deductible depreciation and amortisation	16	161	2	–
Under (over) provision of income tax in prior year	31	5	3	–
Research and development incentives	(728)	(415)	–	–
Effect of higher tax rates on overseas income	3	123	–	–
Non-assessable income	(8)	(428)	(6,143)	(10,567)
Income tax expense	14,057	16,736	(3,147)	(1,143)

The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profi ts under Australian tax law.

There has been no change in the corporate tax rate when compared to the previous reporting period.

Income tax expense recognised in profi t

Income tax expense recognised in prof t
Tax expense comprises:
Current tax expense	13,672	14,839	(3,258)	(1,021)
Adjustments recognised in the current year in relation to
the current tax of prior years	31	5	3	–
Deferred tax expense relating to the origination and reversal
of temporary differences	354	1,892	108	(122)
Total tax expense	14,057	16,736	(3,147)	(1,143)

Tax consolidation

Relevance of tax consolidation to the Consolidated Entity

The Company and its wholly-owned Australian resident subsidiaries have formed a tax-consolidated group with effect from 1 July 2003 and are therefore taxed as a single entity from that date. The head entity within the tax-consolidated group is GUD Holdings Limited. Spa Quip (Australia) Pty Ltd, ED Oates Pty Ltd and ED Oates Holdings Pty Ltd joined the tax-consolidated group from 1 July 2005. The members of the tax consolidated group are identifi ed in Note 21.

Nature of tax funding arrangements and tax sharing agreements

Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax-sharing agreement with the head entity. Under the terms of the tax funding arrangement, GUD Holdings Limited and each of the entities in the tax consolidated group has agreed to pay a tax equivalent payment to or from the head entity, based on the current liability or current asset of the entity. Such amounts are refl ected in amounts receivable from or payable to other entities in the tax-consolidated group.

The tax sharing agreement entered into between members of the tax-consolidated group provides for the determination of the allocation of income tax liabilities between the entities should the head entity default on its payment obligations. No amounts have been recognised in the fi nancial statements in respect of this agreement as payment of any amounts under the tax sharing agreement is considered remote.

(b) Deferred tax balances

(b) Deferred tax balances
Deferred tax liabilities
Temporary differences	951	986	–	–
Provision for deferred income tax comprises the estimated
liability at the applicable rate of 30%
Deferred tax assets
Temporary differences	571	667	243	351

Deferred tax assets comprises the estimated future benefi t at the applicable rate of 30%.

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

3. Taxation (continued)

Taxable and deductible temporary differences arise from the following:

2007			Consolidated
	Opening	Charged	Charged		Closing
	balance	to income	to equity Acquisitions		balance
	$’000	$’000	$’000	$’000	$’000
Deferred tax liabilities:
Property, plant and equipment	365	6	–	–	371
Capitalised product development	2,288	1,118	–	–	3,406
Intangible assets	3,419	(257)	–	–	3,162
Other	926	(709)	–	–	217
	6,998	158	–	–	7,156
Deferred tax assets:
Employee benef t provisions	3,592	134	–	131	3,857
Warranty provisions	793	161	–	19	973
Inventory	1,303	(214)	–	–	1,089
Provision for restructure	29	2	–	–	31
Other provisions	437	35	–	–	472
Accrued expenses	134	(24)	–	–	110
Tax losses	179	(101)	–	–	78
Deferred expenditure	99	(20)	–	–	79
Cash f ow hedge reserve	–	–	143	–	143
Other	113	(169)	–	–	(56)
	6,679	(196)	143	150	6,776
Net deferred tax liabilities					(380)

2006			Consolidated	Consolidated
	Opening	Charged	Charged		Closing
	balance	to income	to equity	Acquisitions	balance
	$’000	$’000	$’000	$’000	$’000
Deferred tax liabilities:
Property, plant and equipment	2,672	(2,340)	–	33	365
Capitalised product development	2,405	(117)	–	–	2,288
Intangible assets	3,184	191	–	44	3,419
Other	–	925	–	1	926
	8,261	(1,341)	–	78	6,998
Deferred tax assets:
Employee benef t provisions	2,558	209	–	825	3,592
Warranty provisions	782	11	–	–	793
Inventory	1,526	(345)	–	122	1,303
Provision for restructure	2,614	(2,585)	–	–	29
Other provisions	187	220	–	30	437
Accrued expenses	293	(336)	–	177	134
Tax losses	753	(574)	–	–	179
Deferred expenditure	134	(35)	–	–	99
Other	73	34	–	6	113
	8,920	(3,401)	–	1,160	6,679
Net deferred tax liabilities					(319)

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

3. Taxation (continued)

2007	GUD Holdings Limited
	Opening Charged Closing balance to income Acquisitions balance $’000 $’000 $’000 $’000
Deferred tax liabilities: Property, plant and equipment Unearned income	(1) – – (1) 51 138 – 189
	50 138 – 188
Deferred tax assets: Deferred expenditure Employee benef t provisions Accrued expenses	97 (18) – 79 288 61 – 349 16 (13) – 3
	401 30 – 431
Net deferred tax assets	243
2006	GUD Holdings Limited
	Opening Charged Closing balance to income Acquisitions balance $’000 $’000 $’000 $’000
Deferred tax liabilities: Property, plant and equipment Unearned income	2 (3) – (1) – 51 – 51
	2 48 – 50
Deferred tax assets: Deferred expenditure Employee benef t provisions Accrued expenses	– 97 – 97 215 73 – 288 – 16 – 16
	215 186 – 401
Net deferred tax assets	351
	Consolidated GUD Holdings Limited 2007 2006 2007 2006 $’000 $’000 $’000 $’000
Unrecognised deferred tax balances The following deferred tax assets have not been brought to account as assets: Tax losses – capital	1,702 1,702 1,702 1,702
	1,702 1,702 1,702 1,702

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

4. Segment information

For the year ended 30 June 2007

Primary reporting	Consumer	Automotive	Water	Security
	Products	Products	Products	Products	Unallocated	Total
1. Business segments	$’000	$’000	$’000	$’000	$’000	$’000
Total segment revenue (external)	287,516	68,553	148,776	13,806	–	518,651
Segment result before depreciation
and amortisation	34,116	13,810	22,082	3,151	(3,693)	69,466
Less: Depreciation	(4,087)	(472)	(2,360)	(896)	(38)	(7,853)
Less: Amortisation of intangibles	(4,381)	–	(580)	–	–	(4,961)
Segment result after depreciation
and amortisation	25,648	13,338	19,142	2,255	(3,731)	56,652
Less: Finance costs						(9,219)
Add: Interest revenue						268
Prof t before income tax expense						47,701
Income tax expense						(14,057)
Prof t for the period						33,644
Loss from individually signif cant items	before
tax included in segment result	–	(3,587)	–	–	–	(3,587)
Segment assets	176,428	31,522	105,622	15,536	(4,883)	324,225
Segment liabilities	62,307	8,100	23,628	3,148	87,767	184,950
Segment acquisition of assets	12,569	907	23,633	441	34	37,584

Secondary reporting
		New
	Australia	Zealand	Other	Eliminations	Total
2. Geographical segments	$’000	$’000	$’000	$’000	$’000
External segment revenue	464,549	53,041	1,061	–	518,651
Inter-segment revenue	10,868	8,772	–	(19,640)	–
Total segment revenue	475,417	61,813	1,061	(19,640)	518,651
Segment assets	281,397	41,738	1,090	–	324,225
Segment acquisition of assets	37,339	242	3	–	37,584

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

4. Segment information (continued)

For the year ended 30 June 2006

Primary reporting	Consumer	Automotive	Water	Security
	Products	Products	Products	Products	Unallocated	Total
1. Business segments	$’000	$’000	$’000	$’000	$’000	$’000
Total segment revenue (external)	282,296	70,414	96,716	12,966	–	462,392
Segment result before depreciation
and amortisation	41,049	19,098	17,188	2,847	(4,948)	75,234
Less: Depreciation	(4,131)	(318)	(1,853)	(721)	(8)	(7,031)
Less: Amortisation of intangibles	(4,107)	–	(471)	–	–	(4,578)
Segment result after depreciation
and amortisation	32,811	18,780	14,864	2,126	(4,956)	63,625
Less: Finance costs						(6,994)
Add: Interest revenue						301
Prof t before income tax expense						56,932
Income tax expense						(16,736)
Prof t for the period						40,196
Segment assets	166,415	34,969	63,441	14,780	(4,516)	275,089
Segment liabilities	64,247	8,312	17,580	3,088	40,423	133,650
Segment acquisition of assets	31,771	404	2,090	983	68	35,316
Secondary reporting
			New
		Australia	Zealand	Other	Eliminations	Total
2. Geographical segments		$’000	$’000	$’000	$’000	$’000
External segment revenue		411,479	47,089	3,824	–	462,392
Inter-segment revenue		11,602	5,660	–	(17,262)	–
Total segment revenue		423,081	52,749	3,824	(17,262)	462,392
Segment assets		231,302	42,497	1,290	–	275,089
Segment acquisition of assets		35,049	258	9	–	35,316

(a) It is the Consolidated Entity’s policy that inter-segment pricing is on a commercial basis.

(b) Segment result excludes fi nance costs, interest revenue and income tax expense.

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

4. Segment information (continued)

Business segments

Consumer Products (Sunbeam, Victa, Oates)

Small electrical appliances, lawn-mowers and cleaning products.

Automotive Products (Ryco, Wesfi l, Goss)

Automotive and heavy duty fi lters for cars, trucks, agricultural and mining equipment, fuel pumps and associated products for the automotive after market.

Water Products (Davey, Spa-Quip, Contamination Control, Monarch)

Pumps and pressure systems for household and farm water, water transfer pumps, swimming pool pumps and fi lters, spa bath controllers and pumps, and water purifi cation equipment.

Security Products (Lock Focus)

Disc tumbler locks for metal and wooden furniture, security doors, roller shutter doors, and hotel and domestic safe locking systems.

5. Dividends

Recognised amounts

Recognised amounts
	Cents	Total amount	Date of		Percentage
Fully Paid Ordinary Shares	per share	$’000	payment	Tax rate	franked
2007
Final dividend in respect of the 2006 f nancial year	33.0	19,772	8 September 2006	30%	100%
Interim dividend in respect of the 2007 f nancial year	27.0	16,177	9 March 2007	30%	100%
Total dividends		35,949
2006
Final dividend in respect of the 2005 f nancial year	27.0	16,177	9 September 2005	30%	100%
Interim dividend in respect of the 2006 f nancial year	27.0	16,177	10 March 2006	30%	100%
Total dividends		32,354
Unrecognised amounts
Fully Paid Ordinary Shares
2007
Final dividend in respect of the 2007 f nancial year	34.0	20,371	7 September 2007	30%	100%

	GUD Holdings Limited	GUD Holdings Limited
	2007	2006
	$’000	$’000
Dividend franking account
30% (2006:30%) franking credits available to shareholders of
GUD Holdings Limited for subsequent f nancial years	24,989	26,740

The above available amounts are based on the balance of the dividend franking account at year-end adjusted for franking credits that will arise from the payment of the current tax liability.

	Consolidated	Consolidated	GUD Holdings	Limited
	2007	2006	2007	2006
	$’000	$’000	$’000	$’000
6. Cash and cash equivalents
Current
Cash and cash equivalents	17,733	17,029	–	–

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

		Consolidated	Consolidated	GUD Holdings Limited	GUD Holdings Limited
	Note	2007	2006	2007	2006
		$’000	$’000	$’000	$’000
7. Trade and other receivables
Current
Trade receivables(1)		67,901	56,293	–	–
Less: Allowance for doubtful debts		(251)	(379)	–	–
Net trade receivables		67,650	55,914	–	–
Derivatives – Foreign currency forward contracts and collars	29	–	1,248	–	–
Derivatives – Interest rate swaps	29	–	42	–	–
Loans to subsidiaries(2)		–	–	57,504	39,854
Other f nancial assets		–	1,290	57,504	39,854
		67,650	57,204	57,504	39,854

(1) The average credit period on sales of goods is 46 days (2006: 43 days). No interest is charged on trade receivables. An allowance has been made for estimated irrecoverable amounts from the sale of goods, determined by a specifi c review of debtors, and the movement in the allowance for doubtful debts was recognised in the income statement in the current fi nancial year.

(2) Includes amounts due under tax sharing and funding agreement.

8. Other assets
Current
Prepayments		2,397	1,895	592	192
Other		2,231	1,373	94	99
		4,628	3,268	686	291
9. Inventories
Current
Raw materials and stores at cost		10,234	11,075	–	–
Raw materials and stores at net realisable value		2,437	3,161	–	–
Raw materials		12,671	14,236	–	–
Work in progress at cost		5,283	7,456	–	–
Work in progress at net realisable value		3,017	2,589	–	–
Work in progress		8,300	10,045	–	–
Finished goods and spare parts at cost		64,863	52,502	–	–
Finished goods and spare parts at net realisable value		9,885	6,097	–	–
Finished goods		74,748	58,599	–	–
Total inventories		95,719	82,880	–	–
10. Other f nancial assets
Non-current
Shares in subsidiaries at cost	21	–	–	136,210	136,210
Derivatives – Interest rate swaps	29	795	197	630	170
		795	197	136,840	136,380

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

11. Property, plant and equipment

11. Property, plant and equipment
		Consolidated
	Freehold	Equipment	Plant and
	Land and	under f nance	Equipment
	Buildings	lease at cost	at cost	Total
	$’000	$’000	$’000	$’000
Gross carrying amount
Balance at 1 July 2005	4,208	5,215	55,201	64,624
Additions	–	1,152	4,346	5,498
Disposals	(4,208)	(33)	(2,594)	(6,835)
Acquisitions through business combinations	–	1,651	7,770	9,421
Net foreign currency difference arising on translation of
f nancial statements of foreign operations	–	–	(1,244)	(1,244)
Balance at 30 June 2006	–	7,985	63,479	71,464
Additions	–	1,254	7,455	8,709
Disposals	–	(515)	(9,278)	(9,793)
Acquisitions through business combinations	–	–	2,468	2,468
Net foreign currency difference arising on translation of
f nancial statements of foreign operations	–	–	892	892
Balance at 30 June 2007	–	8,724	65,016	73,740

		Consolidated	Consolidated
	Freehold	Equipment	Plant and
	Land and	under f nance	Equipment
	Buildings	lease at cost	at cost	Total
	$’000	$’000	$’000	$’000
Accumulated depreciation and amortisation
Balance at 1 July 2005	(263)	(1,487)	(35,672)	(37,422)
Depreciation expense	237	(1,040)	(6,228)	(7,031)
Disposals	26	35	1,871	1,932
Net foreign currency difference arising on translation of
f nancial statements of foreign operations	–	–	959	959
Balance at 30 June 2006	–	(2,492)	(39,070)	(41,562)
Depreciation expense	–	(1,151)	(6,702)	(7,853)
Disposals	–	273	6,506	6,779
Net foreign currency difference arising on translation of
f nancial statements of foreign operations	–	–	(709)	(709)
Balance at 30 June 2007	–	(3,370)	(39,975)	(43,345)
Carrying amount
As at 30 June 2006	–	5,493	24,409	29,902
As at 30 June 2007	–	5,354	25,041	30,395

Aggregate depreciation and amortisation recognised as an expense is disclosed in Note 2(c).

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

	Consolidated	Consolidated	GUD Holdings	Limited
	2007	2006	2007	2006
	$’000	$’000	$’000	$’000
12. Goodwill
Gross carrying amount
Balance at the beginning of the year	25,428	22,718	–	–
Additional amounts recognised from business
acquisitions occurring during the year	16,705	3,195	–	–
Net foreign currency difference arising on translation of
f nancial statements of foreign operations	422	(485)	–	–
Balance at the end of the year	42,555	25,428	–	–

All intangible assets with indefi nite lives (goodwill and brand names) have been allocated for impairment testing purposes to cash-generating units. Refer below for the allocation of goodwill and brand names to cash-generating units. The Directors have assessed that no impairment charge is required for the year ended 30 June 2007. Additional information relating to brand names is included in Note 13.

During the fi nancial year, the cash-generating unit defi nition was reassessed, and the Directors concluded that the automotive businesses should be combined (GUD Automotive Pty Ltd, Wesfi l Australia Pty Ltd, Goss Products Pty Ltd and GUD (NZ) Limited) to form the Automotive Products cash-generating unit. This conclusion was formed after considering the nature, risks and structure of the businesses in the Automotive Products group, which also has commonality in management, customers, products and product sourcing.

Allocation of goodwill and brand names to cash-generating units		Consolidated –	2007
			Total Assets with
	Goodwill	Brand Names	Indef nite Lives
	$’000	$’000	$’000
Automotive Products	1,497	1,000	2,497
Lock Focus Pty Ltd	5,300	–	5,300
Sunbeam Australia and New Zealand	463	25,170	25,633
Victa Lawncare Pty Ltd	–	12,414	12,414
Oates Clean	3,195	8,900	12,095
Water Products group	32,100	3,215	35,315
	42,555	50,699	93,254

Allocation of goodwill and brand names to cash-generating units		Consolidated –	2006
			Total Assets with
	Goodwill	Brand Names		Indef nite Lives
	$’000	$’000		$’000
Automotive Products	1,497	1,000		2,497
Lock Focus Pty Ltd	5,300	–		5,300
Sunbeam Australia and New Zealand	463	24,730		25,193
Victa Lawncare Pty Ltd	–	11,914		11,914
Oates Clean	3,195	8,900		12,095
Water Products group	14,973	1,100		16,073
	25,428	47,644		73,072

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

12. Goodwill (continued)

Each cash-generating unit’s recoverable amount has been tested on the basis of its value in use.

Summary of general information and assumptions relevant in determining ‘value in use’

Value in use refers to the valuation methodology whereby the recoverable amount of a cash-generating unit is calculated based on the present value of its expected cash fl ows. The underlying assumptions pertaining to future cash fl ows are specifi c to each cash-generating unit.

The key assumptions used in the value in use calculation for the various cash-generating units with signifi cant indefi nite life assets, in comparison with the Consolidated Entity’s indefi nite life assets, are as follows:

Cash-generating units:

Sunbeam Australia and New Zealand (Sunbeam)

Sunbeam operates in the Consumer Products business segment. The pre-tax discount rate applied to cash fl ows was 15.06% (2006: 15.53%). Additional details relating to key assumptions are detailed below.

Victa Lawncare (Victa)

Victa operates in the Consumer Products business segment. The pre-tax discount rate applied to cash fl ows was 16.11% (2006: 16.68%). Additional details relating to key assumptions are detailed below.

Lock Focus Pty Ltd

Lock Focus operates in the Security Products business segment. The pre-tax discount rate applied to cash fl ows was 14.01% (2006: 14.39%). Additional details relating to key assumptions are detailed below.

Water Products group

The Water Products group, as disclosed in Note 4, is both a cash-generating unit and a business segment. The pre-tax discount rate applied to cash fl ows was 15.41% (2006: 15.92%). Additional details relating to key assumptions are detailed below.

Oates Clean

Oates Clean operates in the Consumer Products business segment. The pre-tax discount rate applied to cash fl ows was 15.41% (2006: 15.92%). Additional details relating to key assumptions are detailed below.

Assumptions:

Year one cash fl ows based on 2008 budget (2006 analysis was based on the 2007 budget).
Revenue increase of 3% (2006: 3%).
Cost of sales increase of 3% (2006: 3%).
Expense increase of 3% (2006: 3%).
No material changes to working capital (2006: no material changes to working capital).
Growth rate used to project cash fl ows beyond fi ve years of 3% (2006: 3%).

All of the assumptions have been determined based on Directors’ understanding of each cash-generating unit. The assumptions are generally consistent with past performance. In the case of Victa Lawncare Pty Ltd, gross margins in 2007 were adversely affected by drought factors, and the 2008 budget has been developed based on management’s view of a ‘normal’ season.

The fi ve year cash fl ow projections are based on the 2008 year budget (2006: based on 2007 budget), and an ongoing growth rate of 3% is considered reasonable in light of past performance, and is consistent with the sectors in which the cash-generating units operate.

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

13. Other intangible assets

13. Other intangible assets
Non-current	Consolidated
	Brand Names Patents Product Business Licences and Development Names, and Distribution Costs Trademarks Rights Total $’000 $’000 $’000 $’000
Gross carrying amount
Balance at 1 July 2005	14,363 39,238 3,111 56,712
Additions from internal developments Additions Reclassif cation from other debtors Disposals Acquisitions through business combinations Net foreign currency difference arising on translation of f nancial statements of foreign operations	5,871 – – 5,871 – 14 10 24 – – 756 756 (1,424) – – (1,424) – 8,900 – 8,900 – (508) – (508)
Balance at 30 June 2006	18,810 47,644 3,877 70,331
Additions from internal developments Additions Acquisitions through business combinations Net foreign currency difference arising on translation of f nancial statements of foreign operations	6,421 – – 6,421 – – 904 904 – 2,615 – 2,615 – 440 – 440
Balance at 30 June 2007	25,231 50,699 4,781 80,711
Accumulated amortisation
Balance at 1 July 2005	(6,417) – (2,021) (8,438)
Amortisation expense Reclassif cation from other debtors Disposals	(3,935) – (643) (4,578) – – (216) (216) 1,420 – (5) 1,415
Balance at 30 June 2006	(8,932) – (2,885) (11,817)
Amortisation expense	(4,483) – (478) (4,961)
Balance at 30 June 2007	(13,415) – (3,363) (16,778)
Carrying amount As at 30 June 2006 As at 30 June 2007	9,878 47,644 992 58,514 11,816 50,699 1,418 63,933

Aggregate amortisation allocated during the year is recognised as an expense and disclosed in Note 2(c).

The Consolidated Entity holds a number of brand names that are considered to have an indefi nite useful life. The indefi nite useful life refl ects Directors’ view that these brands are assets that provide ongoing market access advantages for both new and existing product sales in the markets that the businesses operate. The current understanding of the industries and markets that the businesses operate in indicates that demand for products will continue in a sustainable manner, that the brands could be managed by another management team, that changes in technology are not seen as a major factor impacting the brands future value and the brands have proven long lives in their respective markets.

Refer to Note 12 for details relating to the allocation of brand names to cash-generating units and impairment testing of assets with

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

		Consolidated	Consolidated	GUD Holdings Limited	GUD Holdings Limited
	Note	2007	2006	2007	2006
		$’000	$’000	$’000	$’000
14. Trade and other payables
Current
Accrued expenses		14,376	11,256	1,093	599
Trade payables(1)		39,921	33,684	–	–
Trade payables and accrued expenses		54,297	44,940	1,093	599
Derivatives – Foreign currency forward contracts and collars	29	1,061	–	–	–
Trade and other payables		55,358	44,940	1,093	599
(1)No interest is incurred on trade payables.
15. Borrowings
(a) Current
Unsecured bank overdraft		–	–	1,174	1,700
Unsecured bank loan		34,205	33,510	16,971	17,945
Secured f nance lease liabilities(1)	27	1,560	1,769	–	–
		35,765	35,279	18,145	19,645
(b) Non-Current
Unsecured bank loan		73,628	32,554	70,000	26,000
Secured f nance lease liabilities(1)	27	3,022	3,259	–	–
		76,650	35,813	70,000	26,000
(c) Financing facilities
Total facilities available:
Unsecured bank overdraft		5,000	5,000	4,000	4,000
Unsecured bill facility		150,000	150,000	114,091	109,449
Unsecured money market facility		18,000	18,000	15,000	15,000
		173,000	173,000	133,091	128,449
Facilities used at balance date:
Unsecured bank overdraft		–	–	1,174	1,700
Unsecured bill facility		105,833	66,064	84,971	43,945
Unsecured money market facility		2,000	–	2,000	–
		107,833	66,064	88,145	45,645
Facilities not utilised at balance date:
Unsecured bank overdraft(2)		5,000	5,000	2,826	2,300
Unsecured bill facility		44,167	83,936	29,120	65,504
Unsecured money market facility		16,000	18,000	13,000	15,000
		65,167	106,936	44,946	82,804

(1) Secured by the assets leased.

(2) The unsecured bank overdraft for GUD Holdings Limited of $4 million applies to the Australian operations, as part of the bank account set-off arrangement for the GUD Consolidated Entity and not exclusively to GUD Holdings Limited.

Notes to the Financial Statements

GUD Holdings Annual Report 2007

GUD Holdings Limited and subsidiaries

15. Borrowings (continued)

Bank overdrafts

The unsecured bank overdraft facility of $5 million is subject to annual review. As part of these facilities, GUD Holdings Limited and all of its controlled entities have entered into a deed of cross guarantee. GUD Holdings Limited has a contingent liability to the extent of the bank debt incurred by its controlled entities. Interest on bank overdrafts is charged at prevailing market rates. The weighted average interest rate for all overdrafts as at 30 June 2007 is 9.60% (2006: 9.03%).

Bill facility

The unsecured bill facilities are provided by way of a club facility arrangement.

The facilities are for a total $150 million, which are subject to review prior to expiry, as follows:

Bill facility The unsecured bill facilities are provided by way of a club facility arrangement. The facilities are for a total $150 million, which are subject to review prior to expiry, as follows:
	Amount	Year ended
	$ million	30 June
Seasonal Facility	50	2008
Core Facility	100	2009
Money market facilities
The unsecured money market facilities are payable on demand and may be withdrawn unconditionally.
Interest on drawdowns is charged at prevailing market rates.

Interest on drawdowns is charged at prevailing market rates.
		Consolidated		GUD Holdings	Limited
	Note	2007	2006	2007	2006
		$’000	$’000	$’000	$’000
16. Provisions
(a) Current
Employee benef ts	19	11,537	10,409	1,145	776
Relocation and restructuring		95	95	–	–
Warranty		3,195	2,645	–	–
		14,827	13,149	1,145	776
(b) Non-current
Employee benef ts	19	1,399	1,665	19	183
Reconciliations
Reconciliations of the carrying amounts of each class of provision,
except for employee benef ts, are set out below:
Relocation and restructuring – current
Carrying amount at beginning of year		95	693	–	–
Provisions recognised		3,603	44	–	–
Payments made during the year		(3,607)	(642)	–	–
Net foreign currency difference arising on translation of
f nancial statements of foreign operations		4	–	–	–
Carrying amount at end of year		95	95	–	–
The provision for relocation and restructuring represents the present
value of the Director’s best estimate of the costs required
to relocate and restructure the various entities within the group.
Warranty – current
Carrying amount at beginning of year		2,645	2,607	–	–
Provisions recognised		12,547	10,522	–	–
Payments made during the year		(12,039)	(10,438)	–	–
Net foreign currency difference arising on translation of
f nancial statements of foreign operations		42	(46)	–	–
Carrying amount at end of year		3,195	2,645	–	–

The provision for warranty claims represents the present value of the Directors’ best estimate of the future sacrifi ce of economic benefi ts that will be required under the Consolidated Entity’s warranty program. The estimate has been made on the basis of historical warranty trends and may vary as a result of new materials, altered manufacturing processes or other events affecting product quality.

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

	Consolidated and	Consolidated and	GUD Holdings	Limited
	2007	2007	2006	2006
	$’000	No.’000	$’000	No.’000
17. Issued capital
Fully paid ordinary shares
59,916,164 fully paid ordinary shares (2006: 59,916,164)	98,437	59,916	98,437	59,916
Fully paid ordinary shares carry one vote per share and carry the right	to dividends.
There were no movements in issued capital during the 2007 and 2006 f nancial years.

18. Reserves

Foreign currency translation reserve

Exchange differences relating to the translation from New Zealand dollars and US dollars, being the functional currency of the Consolidated Entity’s foreign subsidiaries in New Zealand and North America, into Australian dollars, are brought to account by entries made directly to the foreign currency translation reserve.

Cash fl ow hedge reserve

The cash fl ow hedge reserve comprises the effective portion of the cumulative net change in the fair value of cash fl ow hedging instruments related to underlying hedged transactions that have not yet been recognised.

		Consolidated	Consolidated	GUD Holdings	Limited
	Note	2007	2006	2007	2006
		$’000	$’000	$’000	$’000
19. Aggregate employee benef ts
Aggregate liability for employee benef ts, including on-costs,	recognised
and included in the f nancial statements, is as follows:
Provision for employee benef ts
Current	16a	11,537	10,409	1,145	776
Non-current	16b	1,399	1,665	19	183
		12,936	12,074	1,164	959
Accrued wages and salaries*		3,236	2,524	474	493
		16,172	14,598	1,638	1,452

*Accrued wages and salaries are included in accrued expenses in Note 14.

20. Superannuation commitments

The Consolidated Entity contributes to a number of defi ned contribution superannuation funds (the accumulating benefi t type) for which no actuarial assessments are required to be made and were established to provide benefi ts for employees or their dependants on retirement, resignation, disablement or death. The funds include company sponsored funds and multi-employer industry funds. Benefi ts are provided in the form of lump sum payments subject to applicable preservation rules. The Consolidated Entity contributes a percentage of individual employees’ gross income and employees may make additional contributions on a voluntary basis. The Consolidated Entity has no further obligations beyond the payment of the contributions.

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

21. Investment in subsidiaries

21. Investment in subsidiaries
	Country of		Percentage
	incorporation	ownership interest
		2007	2006
Parent entity
GUD Holdings Limited(2) (3)	Australia
Subsidiaries
GUD Automotive Pty Ltd(1) (3)	Australia	100	100
Goss Products Pty Ltd(1) (3)	Australia	100	100
GUD Investments Pty Ltd(1) (3)	Australia	100	100
GUD Europe Limited	United Kingdom	100	100
GUD (NZ) Limited	New Zealand	100	100
Davey Water Products Limited (formerly Davey Products NZ Limited)(5)	New Zealand	100	100
Monarch Pool Systems Pty Ltd (formerly Davey Administration Pty Ltd)(1) (3)	Australia	100	100
Davey Water Products Pty Ltd (formerly Davey Products Pty Ltd)(1) (3)	Australia	100	100
Wesf l Australia Pty Ltd(1) (3)	Australia	100	100
Heavy Duty Filters Pty Ltd(1) (3) (4)	Australia	100	100
Lock Focus Pty Ltd(1) (3)	Australia	100	100
Sunbeam Victa Holdings Limited(1) (3) (4)	Australia	100	100
Sunbeam Victa Corporation Limited(1) (3) (4)	Australia	100	100
Sunbeam Corporation Limited(1) (3)	Australia	100	100
Sunbeam Administration Services Pty Ltd(1) (3) (4)	Australia	100	100
Victa Lawncare Pty Ltd(1) (3)	Australia	100	100
Victa Limited(1) (3)	Australia	100	100
Sunbeam Overseas Holdings Australia Pty Ltd(1) (3) (4)	Australia	100	100
Sunbeam Corporation Limited	New Zealand	100	100
Spa-Quip Ltd(5)	New Zealand	–	100
Spa-Quip (Australia) Pty Ltd(1)	Australia	100	100
Contamination Control Ltd(5)	New Zealand	–	100
Davey Pumps Inc	USA	100	100
ED Oates Holdings Pty Ltd(1) (3) (4)	Australia	100	100
ED Oates Pty Ltd(1) (3)	Australia	100	100

All overseas subsidiaries are audited by an associate fi rm of KPMG Australia. All entities carry on business only in the country of incorporation.

(1) Member of the Australian Tax Consolidated Group.
(2) GUD Holdings Limited is the head entity within the Tax Consolidated Group.
(3) On 23 May 2006, these Group entities entered into a Deed of Cross Guarantee, which took effect upon lodgement with Australian Securities and Investments Commission (ASIC) on 25 May 2006. In accordance with ASIC Class Order 98/1418, all Group entities under the Deed:
guarantee the payment in full of the debts of any Group entity under the deed that is wound up; and
with the exception of GUD Holdings Limited are relieved from the requirement to prepare and lodge audited fi nancial reports.
(4) On 23 May 2007, all parties to the Deed of Cross Guarantee dated 23 May 2006, executed a deed that revoked the Deed of Cross Guarantee in respect of these identifi ed entities (the ‘Released Group Entities’). The revocation releases each Released Group Entity from all liability under the Deed of Cross Guarantee, and releases each of the continuing group entities from all liability under the Deed of Cross Guarantee in respect of any debt of each Released Group Entity. The revocation does not take effect until 29 November 2007. All of the Released Group Entities are non-trading and have no assets. GUD Holdings Limited intends to complete the winding up of Released Group Entities after the Revocation Deed takes effect.
(5) On 31 May 2007, Contamination Control Limited, Spa-Quip Limited and Davey Water Products Limited amalgamated to become Davey Water Products Limited under Part XIII of the Companies Act 1993 (New Zealand).

The only other wholly-owned Australian entity that is not a party to the Deed of Cross Guarantee is Spa-Quip (Australia) Pty Ltd, which is not required to prepare audited reports under the Corporations Act because it is a small proprietary company, is non-trading and has no assets, and is to be wound up.

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

21. Investment in subsidiaries (continued)

Set out below are the fi nancial statements for the Group entities which form the ‘closed group’ under the Deed of Cross Guarantee:

	2007	2006
	$’000	$’000
Income Statement
Revenue	470,978	424,592
Finance costs	(7,303)	(4,597)
Other expenses	(415,137)	(363,169)
Prof t before income tax expense	48,538	56,826
Income tax expense	(13,960)	(15,552)
Prof t after income tax expense	34,578	41,274
Retained earnings at the beginning of the year	50,517	41,748
Impact of adoption of AASB139 Financial Instruments: Recognition and Measurement	–	(151)
Dividends paid	(35,949)	(32,354)
Retained earnings at the end of the year	49,146	50,517
Balance Sheet
Current assets
Cash and cash equivalents	15,492	15,398
Trade and other receivables	61,138	51,219
Other assets	3,006	2,549
Current tax assets	117	–
Inventories	87,085	72,405
Total current assets	166,838	141,571
Non-current assets
Other f nancial assets	19,327	18,867
Property, plant and equipment	29,444	27,800
Goodwill	29,691	12,986
Other intangible assets	59,388	54,409
Total non-current assets	137,850	114,062
Total assets	304,688	255,633
Current liabilities
Trade and other payables	49,477	40,669
Borrowings and loans	18,531	19,714
Current tax payables	–	1,845
Provisions	13,845	12,371
Total current liabilities	81,853	74,599
Non-current liabilities
Borrowings and loans	73,022	29,259
Deferred tax liabilities	1,245	1,156
Provisions	1,399	1,665
Total non-current liabilities	75,666	32,080
Total liabilities	157,519	106,679
Net assets	147,169	148,954
Share Capital	98,437	98,437
Reserves	(414)	–
Retained earnings	49,146	50,517
Total equity	147,169	148,954

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

22. Key management personnel (including Non-executive Directors) compensation and equity holdings

The key management personnel of GUD Holdings Ltd, and its subsidiaries, during the year have been identifi ed as the following persons:

C K Hall (Chairman, Non-executive)

P G Thomas (Non-executive) G D W Curlewis (Non-executive) R M Herron (Non-executive) I A Campbell (Managing Director) R J Wodson (Finance Director)

J Lord (Chief Executive – Sunbeam Corporation Ltd – Australia) J Oates (Chief Executive – E D Oates Pty Ltd) (appointed 18 July 2005)

R Pattison (Chief Executive – GUD Automotive Pty Ltd) D Cleland (Managing Director – Davey Water Products Pty Ltd) A King (Chief Executive – Victa Lawncare Pty Ltd) D Cox (Managing Director – Lock Focus Pty Ltd)

T Cooper (Managing Director – Wesfi l Australia Pty Ltd

Key management personnel compensation policy

The compensation policy and disclosure of compensation relating to key management personnel is detailed within the Remuneration Report contained in the Directors’ Report.

Key management personnel compensation

The aggregate compensation of the key management personnel of the Consolidated Entity and the Company is set out below:

	Consolidated	Consolidated	GUD Holdings Limited	GUD Holdings Limited
	2007	2006	2007	2006
	$	$	$	$
Short-term employment benef ts	3,634,039	3,699,251	1,694,914	1,731,480
Post-employment benef ts	734,866	717,246	403,426	412,489
	4,368,905	4,416,497	2,098,340	2,143,969

Transactions with key management personnel and their related parties

It is the Consolidated Entity’s policy that the sale and purchase of goods and services with key management personnel are made under normal customer and supplier relationships and on normal commercial terms and conditions. The sale of goods made to Directors are no more favourable than made available to other employees.

At 30 June 2007, key management personnel held directly, indirectly or benefi cially 419,250 ordinary shares (2006: 400,650) in the Company.

Details of transactions involving property leases with related parties are included in Note 28.

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

22. Key management personnel (including Non-executive Directors) compensation and equity holdings (continued)

Fully paid ordinary shares issued by GUD Holdings Ltd

Fully paid ordinary	shares issued by GUD Holdings Ltd
		Balance	Net other	Balance
		at 1/7/06	change	at 30/6/07
For the year ended 30 June 2007		Number	Number	Number
Directors
Non-Executive
C K Hall	(Chairman)	70,000	–	70,000
P G Thomas		10,000	–	10,000
G D W Curlewis		10,000	–	10,000
R M Herron		10,000	–	10,000
Executive
I A Campbell	(Managing Director)	250,000	–	250,000
R J Wodson	(Finance Director)	35,000	–	35,000
Other key management personnel
J Lord	(Chief Executive – Sunbeam Corporation Ltd)	–	–	–
J Oates	(Chief Executive – E D Oates Pty Ltd)	–	18,600	18,600
R Pattison	(Chief Executive – GUD Automotive Pty Ltd)	–	–	–
D Cleland	(Managing Director – Davey Water Products Pty Ltd)	5,250	–	5,250
A King	(Chief Executive – Victa Lawncare Pty Ltd)	10,400	–	10,400
D Cox	(Managing Director – Lock Focus Pty Ltd)	–	–	–
T Cooper	(Managing Director – Wesf l Australia Pty Ltd)	–	–	–
		400,650	18,600	419,250

		Balance	Net other	Balance
		at 1/7/05	change	at 30/6/06
For the year ended 30 June 2006		Number	Number	Number
Directors
Non-Executive
C K Hall	(Chairman)	70,000	–	70,000
P G Thomas		10,000	–	10,000
G D W Curlewis		10,000	–	10,000
R M Herron		10,000	–	10,000
Executive
I A Campbell	(Managing Director)	250,000	–	250,000
R J Wodson	(Finance Director)	60,000	(25,000)	35,000
Other key management personnel
J Lord	(Chief Executive – Sunbeam Corporation Ltd)	–	–	–
J Oates	(Chief Executive – E D Oates Pty Ltd)	–	–	–
R Pattison	(Chief Executive – GUD Automotive Pty Ltd)	–	–	–
D Cleland	(Managing Director – Davey Water Products Pty Ltd)	5,250	–	5,250
A King	(Chief Executive – Victa Lawncare Pty Ltd)	10,400	–	10,400
D Cox	(Managing Director – Lock Focus Pty Ltd)	–	–	–
T Cooper	(Managing Director – Wesf l Australia Pty Ltd)	–	–	–
		425,650	(25,000)	400,650

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

23. Acquisitions of businesses

Since 30 June 2006, the Consolidated Entity acquired the business of Monarch Pool Systems, a business that operates in the Water Products segment, and sells a range of pool products to swimming pool builders and pool shops. The acquisition was for cash consideration of $29.43 million, and GUD took control on 3 July 2006.

The Monarch Pool Systems business contributed $31.81 million to revenues and $1.58 million to profi t after tax since acquisition date.

The fair value of the assets, liabilities and contingent liabilities acquired and the intangibles arising on acquisition are detailed below. Goodwill on acquisition represents the value inherent within the business that is additional to the identifi ed intangible assets. The acquisition was accounted for provisionally in the December 2006 half-year fi nancial statements.

		Monarch Pool	Systems
		Fair value	Fair value
	Book value	adjustments	on acquisition
	$’000	$’000	$’000
Net assets acquired
Current assets:
Inventories	8,687	–	8,687
Other assets	81	–	81
Non-current assets:
Property, plant and equipment	2,442	26	2,468
Deferred tax assets	–	150	150
Brand names and trademarks	–	2,115	2,115
Current liabilities:
Trade and other payables	(56)	–	(56)
Borrowings and loans	(90)	–	(90)
Provisions	(437)	(63)	(500)
Non-current liabilities:
Borrowings and loans	(135)	–	(135)
Net identif able assets acquired	10,492	2,228	12,720
Goodwill on acquisition			16,705
Cash consideration paid			29,425

Further details relating to the acquisition related cash fl ows of the businesses are disclosed in Note 26.

24. Executive Share Option Plan

On 22 May 2007, the Board resolved to terminate the Executive Share Option Plan. As at 30 June 2006 and 30 June 2007 and at any time during the fi nancial years concluding on those dates, there were no options on issue or outstanding under the Executive Share Option Plan.

Executive Share Option Plan.
	Consolidated		GUD Holdings Limited
	2007	2006	2007	2006
	$	$	$	$
25. Auditors’ remuneration
Audit services:
The auditor of GUD Holdings Limited (2007: KPMG, 2006: Deloitte)
– audit and review of f nancial reports	265,000	307,400	44,500	62,600
Overseas audit f rms:
– audit and review of f nancial reports	61,591	66,774	–	–
	326,591	374,174	44,500	62,600
Non-audit services:
The auditor of GUD Holdings Limited (2007: KPMG, 2006: Deloitte)
– income tax review	220,141	–	58,850	–
– general tax advice	55,627	70,187	50,293	870
	275,768	70,187	109,143	870

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

	Consolidated	Consolidated	GUD Holdings Limited	GUD Holdings Limited
	2007	2006	2007	2006
	$’000	$’000	$’000	$’000
26. Notes to the statement of cash f ows
(a) Reconciliation of prof t after income tax
to net cash provided by operating activities
Prof t after income tax	33,644	40,196	13,107	31,699
Depreciation and amortisation	12,814	11,609	38	8
Loss (gain) on sale of property, plant and equipment	1,226	(1,324)	–	–
Changes in working capital assets and liabilities:
Increase in net tax asset	(1,853)	(3,325)	(1,856)	(2,007)
Increase in inventories	(4,152)	(750)	–	–
(Increase) decrease in receivables	(10,446)	4,459	(17,279)	–
Increase in other assets	(2,621)	(994)	(395)	(15,079)
Increase (decrease) in provisions	912	(81)	205	256
Increase (decrease) in payables	10,363	7,221	494	(107)
Net cash provided by/(used in) operating activities	39,887	57,011	(5,686)	14,770
(b) Businesses acquired
Details of businesses acquired are contained in Note 23.
Consideration
Cash and cash equivalents	29,425	35,520	–	–
Fair value of net assets acquired
Current assets:
Cash and cash equivalents	–	3	–	–
Trade and other receivables	–	10,339	–	–
Inventories	8,687	14,861
Other assets	81	120	–	–
Non-current assets:
Property, plant and equipment	2,468	9,421	–	–
Brand names and trademarks	2,115	8,900	–	–
Goodwill	–	158	–	–
Deferred tax assets	150	1,160	–	–
Current liabilities:
Trade and other payables	(56)	(4,965)	–	–
Borrowings and loans	(90)	(3,647)	–	–
Provisions	(500)	(3,035)	–	–
Non-current liabilities:
Borrowings and loans	(135)	(754)	–	–
Deferred tax liabilities	–	(78)	–	–
Net assets acquired	12,720	32,483	–	–
Goodwill on acquisition	16,705	3,037	–	–
	29,425	35,520	–	–
Net cash outf ow on acquisition
Cash and cash equivalents	29,425	35,520	–	35,520
Less cash and cash equivalent balances acquired	–	(3)	–	–
	29,425	35,517	–	35,520

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

	Consolidated	Consolidated	GUD Holdings	Limited
	2007	2006	2007	2006
	$’000	$’000	$’000	$’000
27. Commitments for expenditure
Capital expenditure commitments
Plant and equipment
Contracted but not provided for and payable:
Within 1 year	438	42	–	–
Between 1 and 5 years	–	–	–	–
Later than 5 years	–	–	–	–
	438	42	–	–
Non-cancellable operating lease expense commitments
Future operating lease commitments not provided for in
the f nancial statements and payable:
Within 1 year	10,224	9,667	5	12
Between 1 and 5 years	25,392	26,217	–	6
Later than 5 years	7,465	6,226	–	–
	43,081	42,110	5	18

The Company and Consolidated Entity leases a number of premises throughout Australia and New Zealand. The rental period of each individual lease agreement varies between one and ten years, with renewal options ranging from one to fi ve years. The majority of lease agreements are subject to rental adjustments in line with movements in the Consumer Price Index or market rentals.

The leases do not include an option to purchase the leased assets at the expiry of the lease period.

The Company and Consolidated Entity leases the majority of its motor vehicles from external suppliers over a lease period of up to four years, with payments being monthly. At the end of the lease period, there are a number of options available with respect to the motor vehicles, none of which include penalty charges.

Finance lease payment commitments
Plant and equipment
Minimum future lease payments:
Within 1 year		1,885	2,082	–	–
Between 1 and 5 years		3,393	3,663	–	–
Later than 5 years		–	–	–	–
		5,278	5,745	–	–
Less: Future f nance lease charges		(696)	(717)	–	–
		4,582	5,028	–	–
Present value of minimum future lease payments:
Within 1 year		1,560	1,769	–	–
Between 1 and 5 years		3,022	3,259	–	–
Later than 5 years		–	–	–	–
		4,582	5,028	–	–
Lease liabilities provided for in the f nancial statements:
Current	15(a)	1,560	1,769	–	–
Non-current	15(b)	3,022	3,259	–	–
Total lease liability		4,582	5,028	–	–

The Consolidated Entity leases production plant and equipment under fi nance leases expiring from 3 to 5 years.

At the end of the lease term, the Consolidated Entity has the option to purchase the equipment at the agreed residual amount or renegotiate an extension to the fi nance lease.

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

28. Related parties

Directors

Details of Directors’ compensation is disclosed in Note 22.

Transactions with entities in the wholly-owned Group

GUD Holdings Limited is the ultimate parent entity in the wholly-owned Group comprising the Company and its wholly-owned subsidiaries, as disclosed in Note 21.

The Company advanced loans, rented premises, received dividends, and provided accounting and administrative assistance to other entities in the wholly-owned Group during the current and previous fi nancial years. Entities in the wholly-owned Group advanced and repaid loans, paid and received dividends, provided marketing, product sourcing and accounting assistance, and sold and purchased goods during the current and previous fi nancial years.

It is the Consolidated Entity’s policy that these transactions are on commercial terms and conditions, with the exception of loans between Australian entities, which are not interest bearing. Loans between entities in the wholly-owned Group are repayable at call. Amounts receivable by GUD Holdings Limited from entities in the wholly-owned Group are disclosed in Note 7. Dividend revenue and services revenue derived by the Company and the Consolidated Entity is disclosed in Note 2.

Other related party transactions with entities in the wholly-owned Group

In 2006, E D Oates Pty Ltd leased premises from an entity related to a person included in Key Management Personnel in Note 22. Net rental expense was $850,000 in 2006. As a result of a change in ownership of the premises, no rental was paid to the entity in 2007. Wesfi l Australia Pty Ltd leases its Sydney premises from an entity related to a Director of Wesfi l Australia Pty Ltd. Net rental expense was $237,000 (2006: $224,458). It is the Consolidated Entity’s policy that these lease arrangements are of a commercial nature.

29. Financial instruments

(a) Financial risk management objectives

The Consolidated Entity’s Corporate Treasury function provides services to the business, coordinates access to domestic and international markets, and manages the fi nancial risks relating to the operations of the Consolidated Entity. The Consolidated Entity does not enter into or trade fi nancial instruments, including derivative fi nancial instruments, for speculative purposes. The use of fi nancial derivatives is governed by the Consolidated Entity’s policies, approved by the Board of Directors, which provide written principles on the use of fi nancial derivatives. Compliance with policies and exposure limits is reviewed by the Financial Risk Management Committee chaired by the Finance Director.

The Consolidated Entity’s activities expose it primarily to the fi nancial risks of changes in foreign currency exchange rates and interest rates.

The Consolidated Entity enters into a variety of derivative fi nancial instruments to manage its exposure to interest rates and foreign currency risk, including:

forward foreign exchange contracts, options and collars to hedge the exchange risk arising from the importation and sale of goods purchased in foreign currency (principally US dollars); and
interest rate swaps, options and collars to partially mitigate the risk of rising interest rates.

(b) Signifi cant accounting policies

Details of signifi cant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of fi nancial asset, fi nancial liability and equity instrument, are disclosed in Note 1 to the fi nancial statements.

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

29. Financial instruments (continued)

(c) Foreign currency risk management

The Consolidated Entity undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fl uctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts, options and collars.

Forward foreign exchange contracts provide certainty as specifi c rates are agreed at the time the contract is agreed. Foreign currency options purchased require a premium to be paid and provide a minimum rate at which the entity transacting will purchase (or sell) foreign currency. Foreign currency collars, being a combination of bought call and sold put options, provide the transacting entity with a minimum rate of exchange (call) and a maximum rate of exchange (put).

It is the policy of the Consolidated Entity to enter into forward foreign exchange contracts, options and collars to cover specifi c and anticipated purchases, capital expenditure and sales that are principally in US dollars. The policy sets minimum and maximum positions and applies to transactions out to nine months. The policy requires a decreasing proportion of cover over the nine-month period and prohibits cover to be taken beyond that period without specifi c approval. The terms of the Consolidated Entity’s commitments are rarely more than one year.

Forward foreign exchange contracts

The following table details the forward foreign currency contracts outstanding as at the reporting date:

				Consolidated	Consolidated
	Average Exchange Rate		Foreign	Currency	Contract Value		Fair	Value
	2007	2006	2007	2006	2007	2006	2007	2006
			FC’000	FC’000	$’000	$’000	$’000	$’000
Buy United States dollars	0.8099	0.7474	11,212	47,540	13,844	63,608	(594)	1,031
Buy Japanese Yen	96.5006	82.4175	24,154	29,000	250	352	(18)	(4)
Buy European Euro	0.6137	0.5895	1,260	475	2,053	806	(48)	17
Buy Australian dollars (NZ entities)	0.8716	0.9409	570	3,153	570	3,153	(22)	204
					16,717	67,919	(682)	1,248

Foreign currency options and collars

The following table details the foreign currency dollars (combined call and put options) and call options outstanding as at the reporting date:

reporting date:
				Consolidated
	Average	Call and
	Put	Options	Foreign	Currency	Contract	Value	Fair	Value
	2007	2006	2007	2006	2007	2006	2007	2006
	Call-Put	Call-Put	FC’000	FC’000	$’000	$’000	$’000	$’000
Buy United States dollars	0.7956–0.8579	–	40,269	–	47,448	–	(394)	–
Buy Australian dollars (NZ entities)	0.8588–0.8993	–	299	–	299	–	(5)	–
Buy Australian dollars (NZ entities)	0.8909	–	2,090	–	2,090	–	20	–
					49,837	–	(379)	–

(d) Interest rate management

The Consolidated Entity is exposed to interest rate risk as it borrows funds at variable interest rates. The risk is managed by maintaining an appropriate mix between fi xed and fl oating interest rates through the use of interest rate derivatives products, swap contracts, options and forward interest rate swap contracts. The Consolidated Entity, from time to time, enters into interest rate swaps and options, with expiration terms ranging out to fi ve years, to protect part of the loans from exposure to increasing interest rates. Interest rate swaps allow the Consolidated Entity to swap fl oating rate borrowings into fi xed rates. Maturities of swap contracts are principally between two and fi ve years.

Interest rate swaps and options

Under interest rate swap contracts, the Consolidated Entity agrees to exchange the difference between fi xed and fl oating rates interest amounts calculated on agreed notional principal amounts. These contracts enable the Consolidated Entity to partially mitigate the risk of changing interest rates on debt held. The fair value of interest rate swaps are based on market values of equivalent instruments at the reporting date and are disclosed below. The average interest rate is based on the outstanding balances at the start of the fi nancial year. The following tables detail the notional principal amounts and remaining terms of interest rate swap and option contracts outstanding at the reporting date:

GUD Holdings Limited and subsidiaries

Notes to the Financial Statements

29. Financial instruments (continued)

(d) Interest rate management (continued)

(d) Interest rate management (continued)
	Average contracted		Notional	principal		Fair value
Outstanding f oating for f xed contracts	f xed interest rate 2007 2006		2007	amount 2006	2007	2006
			$’000	$’000	$’000	$’000
Less than 1 year	5.90%	6.45%	5,000	22,288	–	42
1 to 2 years	6.04%	5.90%	29,070	5,000	266	13
2 to 5 years	6.40%	5.89%	65,000	38,192	529	184
5 years plus	–	–			–	–
			99,070	65,480	795	239

Maturity prof le of f nancial instruments Effective Floating average interest interest rate rate 2007 Note $’000	Fixed interest maturing in: Non- Less than 1 to 2 to interest 1 year 2 years 5 years bearing Total $’000 $’000 $’000 $’000 $’000
Financial assets Cash and cash equivalents 6 5.88% 17,733 Trade and other receivables 7 - – Interest rate swaps 10 –	– – – – 17,733 – – – 67,650 67,650 – – – 795 795
17,733	– – – 68,445 86,178
Financial liabilities Bank overdrafts and loans 15 6.70% 107,833 Trade and other payables 14 - – Finance lease liabilities 15 7.27% – Foreign currency options/collars – Foreign currency forward contracts –	– – – – 107,833 – – – 54,297 54,297 1,560 3,022 – – 4,582 – – – 379 379 – – – 682 682
107,833	1,560 3,022 – 55,358 167,773

Maturity prof le of f nancial instruments Effective Floating average interest interest rate rate 2006 Note $’000	Fixed interest maturing in: Non- Less than 1 to 2 to interest 1 year 2 years 5 years bearing Total $’000 $’000 $’000 $’000 $’000
Financial assets Cash and cash equivalents 6 5.38% 17,029 Trade and other receivables 7 – – Interest rate swaps 7, 10 – Foreign currency forward contracts 7 –	– – – – 17,029 – – – 55,914 55,914 – – – 239 239 – – – 1,248 1,248
17,029	– – – 57,401 74,430
Financial liabilities Bank overdrafts and loans 15 6.47% 66,064 Trade and other payables 14 – – Finance lease liabilities 15 7.47% –	– – – – 66,064 – – – 44,940 44,940 1,769 3,259 – – 5,028
66,064	1,769 3,259 – 44,940 116,032

(e) Credit risk exposures

The carrying amounts of fi nancial assets included in the consolidated balance sheet represent the Consolidated Entity’s maximum exposure to credit risk in relation to these assets. The Consolidated Entity does not have any signifi cant exposure to any individual customer or counterparty; however, approximately 90% of credit risk on trade debtors is to retail sector customers.

A material exposure arises from forward exchange contracts and collars that are subject to credit risk in relation to the relevant counterparties. A counterparty must have either Standard and Poor’s or Moody’s long-term rating of at least ‘A’ or ‘A1’, respectively. The maximum credit risk exposure on foreign currency contracts and collars is the full amount of the foreign currency the Consolidated Entity pays when settlement occurs should the counterparty fail to pay the amount that it is committed to pay the Consolidated Entity. The full amount of the exposure is disclosed above.

GUD Holdings Annual Report 2007

Notes to the Financial Statements

GUD Holdings Limited and subsidiaries

			2007	2006
			Number	Number
30. Earnings per share
Weighted average number of shares used as the denominator
Number for basic earnings per share – ordinary shares			59,916,164	59,916,164
Number for diluted earnings per share			59,916,164	59,916,164
			2007	2006
			$’000	$’000
Basic earnings per share
Earnings used as the numerator in the calculation of basic EPS			33,644	40,196
Diluted earnings per share
Earnings used as the numerator in the calculation of diluted EPS			33,644	40,196
	Consolidated		GUD Holdings Limited
	2007	2006	2007	2006
	$’000	$’000	$’000	$’000
31. Contingent liabilities
The total contingent liabilities of wholly-owned controlled entities
(excluding amounts owed to the Company) are:
	–	–	67,234	57,629

The Company is party to two guarantees relating to subsidiaries. The bank borrowing facility described in Note 15 requires the Company to guarantee the bank borrowings of Sunbeam Corporation Limited NZ, which in turn guarantees the obligations of the Company, ie a cross guarantee. No liability is recognised by the Company as Sunbeam Corporation Limited NZ is expected to continue to generate positive cash fl ows.

The Company is also party to a deed of cross guarantee as described in Note 21. There is no expectation of a liability to the Company as a result of this guarantee. As a result of the above assessments, no liability has been recorded in the Company, and the fair value has been deemed to be nil.

32. Events subsequent to balance date

Dividend declared

On 26 July 2007, the Board of Directors declared a fully franked dividend of 34 cents per ordinary share. Record date is 24 August 2007, and the dividend will be paid on 7 September 2007.

Restructuring of business

On 26 July 2007, the Board of Directors approved the restructuring of the cleaning products business of E D Oates Pty Ltd, a subsidiary of GUD Holdings Limited. Affected areas are Naval Base (WA) and Reservoir (Victoria) manufacturing and discontinuation of Bissell distribution. As at the date of this report, the Directors estimate the cost of the restructuring to approximate $8.5 million ($5.9 million after tax). The restructuring will improve the future competitiveness and profi tability of the Oates Clean business.

GUD Holdings Limited and subsidiaries

Directors’ Declaration

In the opinion of the Directors of GUD Holdings Limited (the ‘Company’):

(a) the attached fi nancial statements and notes and the remuneration disclosures that are contained in the Remuneration Report included in the Directors’ Report are in accordance with the Corporations Act 2001, including:
giving a true and fair view of the fi nancial position of the Company and the Consolidated Entity as at 30 June 2007 and of their performance for the fi nancial year ended on that date;
complying with Australian Accounting Standards (including Australian Accounting Interpretations) and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

At the date of this declaration, the Company is within the class of companies affected by ASIC Class Order 98/1418. The nature of the Deed of Cross Guarantee is such that each company which is a party to the deed guarantees to each creditor payment in full of any debt in accordance with the Deed of Cross Guarantee.

In the Directors’ opinion, there are reasonable grounds to believe that the Company and the subsidiary companies identifi ed in Note 21 to the fi nancial statements will, as a group, be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the Deed of Cross Guarantee.

The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Chief Executive Offi cer and the Chief Financial Offi cer for the fi nancial year ended 30 June 2007.

Signed in accordance with a resolution of the Directors pursuant to section 295(5) of the Corporations Act 2001.

On behalf of the Directors

C K Hall Director

I A Campbell Director

Melbourne, 26 July 2007

GUD Holdings Annual Report 2007

Directors’ Declaration

==> picture [97 x 58] intentionally omitted <==

Independent auditor’s report to the members of GUD Holdings Limited

Report on the fi nancial report

We have audited the accompanying fi nancial report of GUD Holdings Limited (the Company), which comprises the balance sheets as at 30 June 2007, and the income statements, statements of changes in equity and cash fl ow statements for the year ended on that date, a summary of signifi cant accounting policies and other explanatory notes 1 to 32 and the directors’ declaration of the Group comprising the Company and the entities it controlled at the year’s end or from time to time during the fi nancial year.

As permitted by the Corporations Regulations 2001, the Company has disclosed information about the remuneration of directors and executives (“remuneration disclosures”), required by Australian Accounting Standard AASB 124 Related Party Disclosures , under the heading Remuneration report within the Directors’ report and not in the fi nancial report. We have audited the remuneration disclosures which have been identifi ed as audited within this report.

Directors’ responsibility for the fi nancial report and the AASB 124 remuneration disclosures contained in the Directors’ report

The directors of the Company are responsible for the preparation and fair presentation of the fi nancial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the fi nancial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In note 1, the directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements , that the fi nancial report of the Group, comprising the fi nancial statements and notes, complies with International Financial Reporting Standards, but the fi nancial report of the Company does not comply.

The directors of the Company are responsible for the remuneration disclosures contained in the Directors’ report.

Auditor’s responsibility

Our responsibility is to express an opinion on the fi nancial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the fi nancial report is free from material misstatement. Our responsibility is also to express an opinion on the remuneration disclosures contained in the Directors’ report based on our audit.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the fi nancial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the fi nancial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the fi nancial report and the remuneration disclosures contained in the Directors’ report.

We performed the procedures to assess whether in all material respects the fi nancial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards (including the Australian Accounting Interpretations), a view which is consistent with our understanding of the Company’s fi nancial position, and of its performance and whether the remuneration disclosures are in accordance with Australian Accounting Standard AASB 124.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Auditor’s opinion

In our opinion:

(a) the fi nancial report of GUD Holdings Limited is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Company’s and Group’s fi nancial position as at 30 June 2007 and of its performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.

(b) the fi nancial report also complies with International Financial Reporting Standards as disclosed in note 1.

Auditor’s opinion on AASB 124 remuneration disclosures contained in the directors’ report

In our opinion, the remuneration disclosures that are identifi ed as audited within the Remuneration report contained within the Directors’ report comply with Australian Accounting Standard AASB 124 Related Party Disclosures .

KPMG

Paul Shannon Partner Melbourne, 26 July 2007

KPMG, an Australian partnership and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International, a Swiss cooperative.

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Lead auditor’s independence declaration under Section 307C of the Corporations Act 2001

To the directors of GUD Holdings Limited

I declare that, to the best of my knowledge and belief, in relation to the audit for the fi nancial year ended 30 June 2007 there have been:

No contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
No contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

Paul Shannon Partner Melbourne 26 July 2007

GUD Holdings Annual Report 2007

GUD Holdings Limited and subsidiariesGUD Holdings Limited and subsidiaries Additional Shareholder Information

The issued shares of the Company are of the one class with equal voting rights and are all quoted on the Australian Stock Exchange.

Distribution of Shareholdings as at 21 August 2007

Shares held	No. of shareholders	%	Shares	%
1 – 1,000	3,651	34.23	2,373,280	3.96
1,001 – 5,000	5,449	51.08	13,683,356	22.84
5,001 – 10,000	1,022	9.58	7,652,426	12.77
10,001 – 100,000	510	4.78	10,355,039	17.28
100,001 and over	35	0.33	25,852,063	43.15
Total	10,667	100.00	59,916,164	100.00

There are 65 shareholders holding less than a marketable parcel of shares. A marketable parcel is $500.00.

The Twenty Largest Shareholders as at 21 August 2007

The Twenty Largest Shareholders as at 21 August 2007
	Number of Shares	%
J P Morgan Nominees Australia Limited	5,297,602	8.84
HSBC Custody Nominees (Australia) Limited – GSI ECSA	3,802,681	6.35
National Nominees Limited	3,373,326	5.63
Australian Foundation Investment Company Limited	2,000,000	3.34
Citicorp Nominees Pty Limited	1,581,938	2.64
ARGO Investments Limited	1,320,000	2.20
RBC Dexia Investor Services Australia Nominees Pty Limited (PIPOOLED a/c)	1,243,382	2.08
Cogent Nominees Pty Limited	798,595	1.33
HSBC Custody Nominees (Australia) Limited	789,285	1.32
ANZ Nominees Limited (Cash Income a/c)	540,063	0.90
RBC Dexia Investor Services Australia Nominees Pty Limited (PIIC a/c)	528,010	0.88
AMP Life Limited	499,832	0.83
Cogent Nominees Pty Limited	408,033	0.68
Morgan Stanley Australia Securities (Nominee) Pty Limited (No 1 a/c)	327,644	0.55
Citicorp Nominees Pty Ltd (Cwlth Bank Off Super a/c)	278,101	0.46
HSBC Custody Nominees (Australia) Limited – a/c 2	228,886	0.38
RBC Dexia Investor Services Australia Nominees Pty Limited (BKCUST a/c)	210,936	0.35
Mrs Jillian Anita Cobcroft	209,100	0.35
Queensland Investment Corporation	205,989	0.34
HSBC Custody Nominees (Australia) Limited – GSI EDA	172,101	0.29

Substantial Shareholders of GUD Holdings Limited

As at 21 August 2007, the current notices of substantial shareholders were:

As at 21 August 2007, the current notices of substantial shareholders were:
Number	of Shares	%
Perpetual Limited	4,781,480	7.98
Harbinger Capital Partners Master Fund 1, Ltd and Harbinger Capital Partners Special Situations Fund, L.P.	3,677,942	6.14

GUD Holdings Limited and subsidiaries

Shareholder Services and Information

Dividends/Dividend Reinvestment Plan

The Dividend Reinvestment Plan (‘DRP’) remains suspended.

Direct Payments to a Bank, Building Society or Credit Union

Shareholders are encouraged to have cash dividends paid directly into any bank, building society or credit union account in Australia.

Uncertifi cated Issuer Sponsored Holdings

In August 1997, the Company moved to uncertifi cated holdings under the Australian Stock Exchange CHESS system. Share certifi cates are no longer issued and shareholders receive regular statements of their holdings under the Company-sponsored scheme.

Stock Exchange Listing

GUD is listed on the Australian Stock Exchange under the name GUD and under the code GUD.

Change of Address or Name

It is important that shareholders notify the Company or the share registry in writing immediately there is a change in their address or name. For the protection of shareholders, instructions to the Company need to be in writing and indicate the shareholder’s reference number (‘SRN’).

Share Holding Consolidation

Shareholders are encouraged to consolidate shareholding into one name and identifi cation number. Applications should be made to the share registry – Computershare Investor Services Pty Limited (see address below).

Annual Report Mailing List

Shareholders who do not wish to receive reports to shareholders should advise the share registry in writing. Shareholders will continue to receive all other shareholder information, including Notice of Annual General Meeting and Proxy.

The Annual Report may be viewed on the Company’s website at www.gud.com.au

Tax File Number (‘TFN’)

While it is not compulsory for shareholders to provide a TFN, the Company is obliged to deduct tax from non-fully franked dividends paid to residents in Australia who have not supplied such information.

Enquiries

Shareholders with questions about their shareholding should contact Computershare Investor Services Pty Limited who maintain the share register on behalf of the Company.

Enquiries should be addressed to:

Computershare Investor Services Pty Limited

Enquiries Within Australia: 1300 850 505

Enquiries Outside Australia: +61 3 9415 4000

Investor Enquiries Facsimile Number: +61 3 9473 2500

Yarra Falls, 452 Johnston Street, Abbotsford, Vic 3067

Postal Address: GPO Box 2975 Melbourne Vic 3001

Website: www.computershare.com

Email: [email protected]

Shareholders are able to obtain updated information and recent announcements concerning the Company by visiting the website at Corporatefi le at www.corporatefi le.com.au – open briefi ngs GUD Holdings or the Company’s website at www.gud.com.au.

GUD Holdings Annual Report 2007

GUD Holdings Limited and subsidiaries

Financial Summary and Ratios

		2003†	2004†	2005	2006	2007
		$ millions	$ millions	$ millions	$ millions	$ millions
Sales and Prof tability
Sales Revenue		372.4	393.8	394.4	462.4	518.7
Trading EBITA*	Consumer Products	22.8	37.2	30.9	36.9	30.0
	Automotive Products	15.4	18.8	17.7	18.8	16.9
	Water Products	7.7	8.6	11.3	15.3	19.7
	Security Products	1.8	2.8	2.7	2.1	2.3
	Unallocated	(0.2)	(0.2)	0.2	(5.0)	(3.7)
Total Trading EBITA*		47.5	67.1	62.8	68.2	65.2
Net Trading Prof t Before Tax*		40.6	60.2	56.4	56.9	51.3
Net Trading Prof t After Tax*		27.4	41.7	39.2	40.2	36.1
Individually Signif cant Items before tax		(7.0)	(8.9)	(12.6)	0.0	(3.6)
Net Prof t Before Tax		33.6	51.3	43.7	56.9	47.7
Net Prof t After Tax		21.8	35.5	30.4	40.2	33.6
Cash Flow
Gross Operating Cash Flow		41.5	49.4	34.7	57.0	39.9
Free Cash Flow#		42.6	38.6	25.8	26.7	6.3
Financial Position
Current Assets		137.3	152.0	144.9	160.4	186.0
Current Liabilities		79.2	90.2	75.8	95.2	106.0
Net Debt		20.9	17.6	37.6	54.1	94.7
Net Tangible Assets		76.0	84.7	63.3	57.5	32.8
Total Equity		126.8	142.6	134.3	141.4	139.3
		2003†	2004†	2005	2006	2007
Per Share Performance
Earnings Per Share* (cents)		45.3	68.6	65.5	67.1	60.2
Earnings Per Share (cents)		35.7	58.5	50.2	67.1	56.2
Dividend declared per Share (cents)		26.0	40.0	50.0	60.0	61.0
% Franked		100%	100%	100%	100%	100%
Payout Ratio*		57.4%	58.3%	76.3%	89.4%	101.3%
NTA per Share ($)		1.26	1.39	1.06	0.96	0.55
Share Statistics (at 30 June each year)
Total Shares on Issue (millions)		60.4	60.9	59.9	59.9	59.9
Closing Share Price ($)		4.71	8.88	6.25	7.90	9.18
Market Capitalisation		284.6	540.5	374.5	473.3	550.0
Key Ratios
Trading EBITA/Sales*		12.8%	17.0%	15.9%	14.8%	12.6%
Return on Capital Employed*		18.5%	26.0%	22.8%	20.5%	15.4%
Return on Equity*		21.6%	29.3%	29.2%	28.4%	25.9%
Return on Assets*		13.0%	18.5%	17.8%	15.6%	11.8%
Net Debt/Total Capital		14.1%	11.0%	21.9%	27.7%	40.5%
Net Debt/Market Capitalisation		7.3%	3.3%	10.0%	11.4%	17.2%
CVA Return*		16.5%	21.2%	18.1%	17.1%	14.8%
Working Capital^/Sales		15%	17%	20%	18%	19%
Capital Expenditure/Depreciation and Amortisation		100%	98%	151%	98%	129%
Interest Cover (times)*		12.7	27.7	16.3	10.2	7.3

Trading results exclude Individually Signifi cant Items.
Free Cash Flow is EBIT, depreciation and amortisation, less tax paid and effective tax on net interest, changes in working capital, capital expenditures and net investments.
^Working capital is receivables, inventories, other assets, payables and provisions.
Prepared under superseded Accounting Standards.

GUD Holdings Limited and subsidiaries

Corporate Directory

Directors

C K Hall, Chairman I A Campbell, Managing Director G D W Curlewis R M Herron P G Thomas R J Wodson

Company Secretary M G Tyler

Auditors KPMG Chartered Accountants

Share Register

Computershare Investor Services Pty Limited Enquiries within Australia: 1300 850 505 Enquiries outside Australia: +61 3 9415 4000 Investor enquiries facsimile number: +61 3 9473 2500 Yarra Falls, 452 Johnston Street Abbotsford Vic 3067 Postal Address: GPO Box 2975 Melbourne Vic 3001 Website: www.computershare.com Email: web.queries[@] computershare.com.au

Corporate Directory

GUD Holdings Limited 245 Sunshine Road Tottenham Victoria 3012 Australia Telephone: (03) 9243 3333 Facsimile: (03) 9243 3300 Email: [email protected] Internet: www.gud.com.au

Sunbeam Corporation Ltd

Jonathan Lord, Chief Executive Units 5-6, 13 Lord Street Botany NSW 2019 Telephone: (02) 9695 9999 Facsimile: (02) 9695 9900 Email: [email protected] Internet: www.sunbeam.com.au

Sunbeam Corporation Limited (NZ) Christine Johnston, General Manager 30D Vestey Drive Mt Wellington Auckland New Zealand Telephone: (64 9) 912 0747 Facsimile: (64 9) 912 3577 Email: [email protected]

Victa Lawncare Pty Ltd

Andrew King, Chief Executive 1 Moorebank Avenue Moorebank NSW 2170 Telephone: (02) 8778 5555 Facsimile: (02) 8778 5500 Email: [email protected] Internet: www.victa.com.au

Victa Lawncare – NZ

Steve Melhuish, National Sales Manager Unit 3, 26 Vestey Drive Mt Wellington Auckland New Zealand Telephone: (64 9) 912 0747 Facsimile: (64 9) 912 3575 Email: [email protected]

E D Oates Proprietary Limited

Jim Oates, Chief Executive Lot 1, 160 Camp Road Broadmeadows Victoria 3047 Telephone: (03) 9355 6900 Facsimile: (03) 9359 9509 Email: [email protected] Internet: www.oatesclean.com

GUD Automotive Pty Ltd

Bob Pattison, Chief Executive 245 Sunshine Road Tottenham Victoria 3012 Telephone: (03) 9243 3333 Facsimile: (03) 9243 3344 Email: [email protected] Internet: www.rycofi lters.com.au

GUD (NZ) Limited

Rick Nutter, Sales & Marketing Manager 626a Rosebank Road Avondale Auckland New Zealand Telephone: (64 9) 828 7089 Facsimile: (64 9) 828 2244 Email: [email protected] Internet: www.ryco.co.nz

Goss Products Pty Ltd

Arthur Williams, General Manager 30-36 Gilbert Road Preston Victoria 3072 Telephone: (03) 9480 4711 Facsimile: (03) 9480 0975 Email: [email protected]

Wesfi l Australia Pty Ltd Terry Cooper, Managing Director 1/16 Ada Avenue Brookvale NSW 2100 Telephone: (02) 9939 2544 Facsimile: (02) 9938 6547 Email: sales@wesfi l.com.au

Lock Focus Pty Ltd

David Cox, Managing Director 15-17 Futura Road Keysborough Victoria 3173 Telephone: (03) 9798 1322 Facsimile: (03) 9706 3201 Email: [email protected] Internet: www.lockfocus.com.au

Davey Water Products Pty Ltd

David Cleland, Managing Director 6 Lakeview Drive Scoresby Victoria 3179 Telephone: (03) 9730 9222 Facsimile: (03) 9753 4100 Email: [email protected] Internet: www.davey.com.au

Davey Water Products Limited (NZ) Simon Fletcher, Sales Manager 2 Rothwell Avenue North Harbour Auckland New Zealand Telephone: (64 9) 914 3680 Facsimile: (64 9) 914 3685 Email: [email protected] Internet: www.daveynz.co.nz

Spa-Quip

Peter Ranyard, General Manager 2 Rothwell Avenue North Harbour Auckland, New Zealand Telephone: (64 9) 415 8622 Facsimile: (64 9) 415 8621 Email: [email protected] Internet: www.spa-quip.co.nz

Contamination Control

Bryce Wilson, General Manager 46 Lunn Avenue Mt Wellington Auckland New Zealand Telephone: (64 9) 570 9135 Facsimile: (64 9) 527 7654 Email: [email protected] Internet: www.contam.co.nz

Davey Pumps Inc Stephen Wilson, Manager Davey USA C/- Import Logistics 1005 N. Commons Drive Aurora IL 60504 USA Telephone: (1 630) 898 6976 Facsimile: (1 630) 851 7744 Email: [email protected]

Monarch Pool Systems Pty Ltd Phillip Paul, General Manager 10-12 Kembla Way Willetton WA 6155 Telephone: (08) 9354 2600 Facsimile: (08) 9457 9229 Email: [email protected] Internet: www.monarchpoolsystems.com

GUD Holdings Annual Report 2007

Financial Calender

	August
2007	Record date for September dividend – 24 August 2007
	September
	Annual Report mailed to shareholders
	Payment of dividend – 7 September 2007
	November
	Annual General Meeting – 2 November 2007
	Mailing of Chairman’s Address to shareholders
	January/February
2008	Announcement of results for the half-year ending 31 December 2007
	Announcement of dividend
	March
	Mailing of half year prof t report to shareholders
	Record date for dividend
	Payment of dividend
	June
	End of Company’s 2007/08 f nancial year
	July
	Preliminary announcement of results for 2007/08 f nancial year
	Timing of events can be subject to change

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Cert no. SCS-COC-00858
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Registered Offi ce 245 Sunshine Road, Tottenham Victoria 3012 Telephone: (03) 9243 3333 Facsimile: (03) 9243 3300 Email: [email protected] Website: www.gud.com.au

AI assistant

AMOTIV LIMITED — AGM Information 2007

64396_rns_2007-09-23_819d4aab-b201-4973-9d72-2ab530135416.pdf

Malcolm G Tyler

I1234567890

NOTICE OF ANNUAL GENERAL MEETING

Ordinary Business

1. Financial statements and reports

Information for Shareholders

Attendance at the meeting

Voting

2. Re-election of Directors

3. Remuneration Report

(The vote on this resolution is advisory only)

Appointment of proxies

Share Registry

EXPLANATORY NOTES

Item 1 – Financial statements and reports

P G Thomas AM, B.Com Age 65

Item 2 – Re-election of directors

R M (Ross) Herron FCA, FAICD Age 57

Board Recommendation

Item 3 – Remuneration Report

Board Recommendation

1301011221012102012221332120133322113

Appointment of Proxy

Proxy Form

I 1234567890 I N D

Voting directions to your proxy - please mark

X to indicate your directions

The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business.

Appointing a second Proxy

Lodge by: 11.00am Wednesday 31 October 2007

How to complete this Proxy Form

1 Your Address

2 Appointment of a Proxy

3 Votes on Items of Business

4 Appointment of a Second Proxy

5 Signing Instructions

Lodgement of a Proxy

Documents may be lodged using the reply paid envelope or:

GUD HOLDINGS LIMITED ABN 99 004 400 891

Share Registry

Annual General Meeting

Signifi cant Results and Activities for 2006/07

Rural or metropolitan. Depend on Davey to move water to where you need it.

The Chairman’s and Managing Director’s Review

People, Health and Safety

Future Direction

Summary of Operations

Products

Signifi cant Events

Products

Future Direction

Signifi cant Events

Future Direction

Products

Signifi cant Events

Future Direction

Products

Signifi cant Events

Future Direction

Products

Products

Signifi cant Events

Future Direction

Signifi cant Events

Future Direction

Review of Business

Consumer Products

Sunbeam

Victa

Oates

Consumer Products Division

2007 Performance Summary

2007 Management

Automotive Products

Automotive Products Division

2007 Performance Summary

2007 Management

AMOTIV LIMITED AGM Information 2007