~~FinAnciAl inFoRmAtion for the year ended 30 June 2007 provided to the AsX under listing rule 4.3A~~

Reece AustRAliA limited (ABN 49 004 313 133) ANd coNtrolled eNtities

~~Appendix 4e Preliminary Final report~~

1. Reporting period

Report for the financial year ended 30 June 2007 Previous corresponding period is the financial year ended 30 June 2006

2. Results for announcement to the market

2. Results for announcement to the market
		$A’000
Revenues from ordinary activities	up 17.4% to	1,310,062
Proft from ordinary activities after tax attributable to members	up 19.2% to	103,493
Net proft for the period attributable to members	up 19.2% to	103,493
	Amount	Franked amount
Dividends	per security	per security
Interim dividend	17 cents	17 cents
Final dividend	35 cents	35 cents
Record date for determining entitlements to the dividend		11 October 2007

3. income statement

Refer Annual Report which accompanies this announcement.

4. Balance sheet

Refer Annual Report which accompanies this announcement.

5. statement of cash Flows

Refer Annual Report which accompanies this announcement.

6. dividends

			Total amount
		Date of payment	of dividend $
Interim dividend – year ended 30 June 2007		23 March 2007	16,932,000
Final dividend – year ended 30 June 2007		25 October 2007	34,860,000
		Amount	Franked amount
Amount per ordinary security		per security	per security
Final dividend:	Current year	35 cents	35 cents (at 30% tax rate)
	Previous year	30 cents	30 cents (at 30% tax rate)
Interim dividend:	Current year	17 cents	17 cents (at 30% tax rate)
	Previous year	14 cents	14 cents (at 30% tax rate)
Total dividend per	security	Current period	Previous period
Ordinary securities		52 cents	44 cents

7. statement of retained earnings

7. statement of retained earnings
	Consolidated	Entity	Parent	Entity
	2007	2006	2007	2006
	($000’s)	($000’s)	($000’s)	($000’s)
Balance at beginning of year	363,156	316,137	1,526	1,526
Net proft attributable to members of the parent entity	103,493	86,859	46,812	39,840
Dividends paid	(46,812)	(39,840)	(46,812)	(39,840)
Balance at end of year	419,837	363,156	1,526	1,526

Reece AustRAliA limited A.B.N. 49 004 313 133 registered oFFice: 118 Burwood HigHwAy, Burwood, VictoriA, 3125

Appendix 4e Preliminary Final report

8. net tangible assets per security

8. net tangible assets per security
	Current period	Previous corresponding period
Net tangible asset backing per ordinary security	416 cents	360 cents

9. The financial information provided in the Appendix 4E is based on the Annual Report accompanying this announcement which has been prepared in accordance with Australian Accounting Standards.

10. commentary on the results for the period

Reece Australia Limited, Australia’s leading distributor of plumbing and bathroom products, today announced a net profit after tax of $103.4m for the year ended 30 June 2007 which is a 19.2% increase over the previous year. Sales revenue for the year ended 30 June 2007 increased by 17.5% to $1,308,703,282.

During the year ended 30 June 2007 the Company commenced trading from 34 new locations throughout Australia, further building on a strong national network and bringing the total trading locations to 305. This translates to a network of 350 outlets throughout Australia and New Zealand with a number of locations having multiple businesses operating from the same site. The Company’s policy of greenfielding additions to the Reece network will continue in 2008 and the Board expects new store openings to continue at a pace similar to that achieved over the past few years. The funding for this growth is from internally generated cash and borrowings as required. Business acquisitions will be considered if and when opportunities arise.

The Board is satisfied with the first full year trading results from its 2 New Zealand outlets. These stores will form the foundation for a much larger network which the Company plans to build over the longer term. The Board anticipates a further 3 store openings in New Zealand during 2008.

Like many Australian and New Zealand business’s, a tight labour market is putting pressure on the Company’s personnel recruitment efforts. With such a bold store opening programme, Reece offers wonderful career opportunities throughout Australia and New Zealand. The Company is participating in a range of recruiting initiatives which to date is securing quality candidates for the positions available, although there is a continuing upward pressure on wage costs in such a competitive labour market.

Throughout the year the Company maintained its strong focus on Occupational Health and Safety. In conjunction with the Company’s continuing focus on manual handling which accounts for around 70% of compensable injuries, we have introduced further materials handling initiatives. For example new initiatives have been introduced in relation to the direct delivery by suppliers of heavy or awkward product such as roofing materials and rainwater tanks. As a consequence, we are seeing less serious materials handling injuries and lower WorkCover premiums.

The Company has continued to grow its property portfolio with selective acquisitions and developments during the year. This practice will continue as opportunities present. This approach to property ownership has in no way impeded the rapid store expansion programme.

During 2007 the Company has regularly used funding available to it via facilities provided by its bankers. These borrowings have been for working capital purposes and will continue to be utilised as required.

The Company has commenced a major refresh of its Information Technology and Supply Chain systems. This is being done in a considered and measured manner utilising internal and specialist external consulting resources. This refresh is being carried out at the Board’s direction to ensure the Company’s systems scale with the demands of the business. The Board is providing the necessary oversight to ensure related costs are appropriate for the business and will deliver real business benefit.

The Board is pleased to advise it has declared a final dividend of 35 cents per share fully franked, an increase of 5 cents per share. The final dividend will be paid on 25 October 2007 with the record date for entitlement being 11 October 2007. Total dividends paid and to be paid relating to the year ended 30 June 2007 will be 52 cents per share compared to 44 cents per share in 2006, which is a 18.2% increase.

Looking ahead the Board anticipates continued growth however is reluctant to forecast growth rates at a time of tight labour conditions and the related upward pressure on wage costs, rising interest rates and unfavourable housing affordability data. Notwithstanding these factors, the Company is looking forward to the new challenges of its Information Technology and Supply Chain refresh programmes and the continuing challenge of attracting the right people with whom it can expand its Australian and New Zealand network.

11. the audit has been completed

The financial report is not subject to audit dispute or qualification.

The annual general meeting will be held as follows:

Place 118 Burwood Hwy Burwood, Victoria Time 3.00 pm Date 25 October 2007

Approximate date the annual report will be distributed: 17 September 2007

The Board is satisfied with the quality and quantum of the Company’s receivables which have risen in line with the increased level of trading year on year.

The Board is generally satisfied with inventory levels across the group and monitors inventory turns and days inventory held on a regular basis. The Board believes its continued maintenance of an inventory obsolescence provision is a prudent approach to the management of ranges of inventory which are impacted by changing consumer demand patterns.

N g cathie company secretary 28 August 2007

Reece AustRAliA limited A.B.N. 49 004 313 133 registered oFFice: 118 Burwood HigHwAy, Burwood, VictoriA, 3125

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o7
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Reece Australia Limited

A.B.N. 49 004 313 133

Controlled Entities	Reece Pty Ltd
	A.B.N. 84 004 097 090
	Plumbing World Pty Ltd
	A.B.N. 99 004 910 829
	Reece Project Supply Pty Ltd
	A.B.N. 54 100 065 307
	Reece International Pty Ltd
	A.B.N. 11 100 278 171
	Reece New Zealand Limited
	Company No. 1530569
Directors	L.A. Wilson (Chairman and C.E.O.)
	P.J. Wilson
	B.W.C. Wilson
	J.G. Wilson
	R.G. Pitcher

Company Secretary	N.G. Cathie
Bankers	National Australia Bank Limited
	Commonwealth Bank of Australia Limited
	Bank of New Zealand Limited
Solicitors	Russell Kennedy
	Lander & Rogers
	Simpson Grierson
Auditors	Pitcher Partners
Registered Offce	118 Burwood Highway
	Burwood, Victoria, 3125
	Telephone (03) 9274 0000
	Facsimile (03) 9274 0197
Share Registry	Computershare Investor
	Services Pty Limited
	Yarra Falls
	452 Johnston Street
	Abbotsford, Victoria, 3067
	Telephone (03) 9415 5000
	Facsimile (03) 9473 2500
Stock Exchange Listing	Reece Australia Limited shares are listed
	on the Australian Stock Exchange
	ASX Code: REH

NOTICE OF MEETING

Notice is hereby given that the Annual General Meeting of Reece Australia Limited will be held at 3pm on Thursday, 25 October, 2007 at 118 Burwood Highway, Burwood, Victoria.

Reece Australia Limited and its controlled entities Annual Report for the financial year ended 30 June 2007

~~Corporate Governance Statement~~ 4 ~~Directors’ Report~~ 6 ~~Auditor’s Independence Declaration~~ 12 ~~Consolidated Income Statement~~ 14 ~~Consolidated Balance Sheet~~ 15 ~~Consolidated Statement of Changes in Equity~~ 16 ~~Consolidated Statement of Cash Flows~~ 17 ~~Notes to the Financial Statements~~ 18 ~~Directors’ Declaration~~ 33 ~~Independent Audit Report~~ 34 ~~ASX Shareholders Information~~ 35

2007 Highlights

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Sales Revenue (000’s) fy’01
fy’02
fy’03 reece annual report 06
fy’04
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EBIt (000’s) fy’01
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npat (000’s) fy’01
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Dividends fy’01
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Return on Equity fy’01
fy’02
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fy’05
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fy’07
financial year
sales revenue (000’s) $40 0,000 $500,000 $600,000 $700,000 $800,000 $900,000 $1,000,000 $1,100,000 $1,200,000 $1,300,000 $1,400,000
financial year
EBIt (000’s) $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000 $130,000 $140,000 $150,000
financial year
npat (000’s) $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000
financial year
(000’s) $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000
financial year
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
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number of Outlets
400
375
350
325
300
275
250
225
200
175
150
125
100
75
50
0
180 198 222 245 271 310 350
FY01 FY02 FY03 FY04 FY05 FY06 FY07
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Corporate Governance statement

The Board of Directors of Reece Australia Limited is responsible for the corporate governance of the Company.

It has implemented the guidelines of the ASX Corporate Governance Council to the extent appropriate for the size and nature of the Company’s business as described below.

Where a guideline has not been followed, this is clearly stated along with an explanation for the departure.

Principle 1

Lay soLid foundations for management and oversight

The Board operates in accordance with the principles outlined in the Board Charter. The Charter describes the Board’s composition, functions and responsibilities and designates authority reserved to the Board and that delegated to management.

The Board is generally responsible for the business strategies of the Company, overseeing the management of the Company, setting the values and standards of the Company to uphold in dealings with all stakeholders and acting as custodian of the Company’s shareholders’ interests.

The Board, as currently composed, does not comply with these recommendations.

Mr L.A. Wilson is a substantial shareholder of the Company. He has been Chief Executive Officer since 1970 and was appointed Chairman in 2001. Much of the success of Reece over the past 38 years is attributable to the expertise, experience, leadership and vision of Mr Wilson. Given the performance and financial standing of the Company under the leadership of Mr Wilson, the Board believes it is inappropriate and unnecessary to separate the roles of Chairman and Chief Executive Officer at this time.

Mr B.W.C. Wilson and Mr J.G. Wilson are substantial shareholders of the Company. They, along with Mr R.G. Pitcher, represent a majority of nonexecutive directors in the current Board structure and are segregated from operational management. The commercial knowledge, experience and expertise of the non-executive directors enables them to effectively review and challenge the performance of management.

Mr P.J. Wilson is an executive of the Company being Chief Operating Officer.

Principle 3

Promote ethicaL and resPonsiBLe decision making

More particularly, the Board’s responsibilities encompass:

Review and development of its control, risk management, compliance and accountability systems
Development of corporate strategy
Monitoring the operational and financial aspects of the Company’s activities
Monitoring performance of senior management
Ratifying the appointment or removal of the Chief Executive Officer and the Chief financial Officer

Non-executive directors Mr R.G. Pitcher, Mr B.W.C. Wilson and Mr J.G. Wilson represent a majority on the current Board of five directors. With the Chief financial Officer not being a director, there is separation between management and the Board.

Principle 2

structure the Board to add vaLue

The growth of the Company, its outstanding results and returns to shareholders, reflects the Board’s wide management and professional experience and its commitment to growing returns for shareholders and protecting shareholders’ investment.

The experience and expertise relevant to the position of director held by each director in office at the date of the annual report is included in the Directors’ Report.

The term in office held by each director in office at the date of this report is as follows:

The term in offce held by as follows:	each director in off
name	term in offce
Mr L.A. Wilson	38 years
Mr B.W.C. Wilson	37 years
Mr J.G. Wilson	23 years
Mr P.J. Wilson Mr R.G. Pitcher, AM	10 years 4 years

The ASX guidelines recommend that a listed company should have a majority of directors who are independent. They also recommend the roles of Chairperson and Chief Executive Officer should not be exercised by the same individual.

The Board places great emphasis on ethics and integrity in all its business dealings.

In order to clarify the standards of ethical behaviour required of its directors and key executives, the Board has established a Code of Conduct which summarises the expectations of these key personnel.

The Company has in place a policy concerning trading in Company securities by directors, officers and employees.

Principle 4

safeguard integrity in financiaL rePorting

The ASX guidelines recommend that a listed company should have an Audit Committee comprising a majority of independent directors.

The Audit Committee, as currently composed, does not comply with this recommendation.

The Audit Committee of the Company comprises Mr R.G. Pitcher (Chairman), Mr B.W.C. Wilson and Mr J.G. Wilson. All members of the committee are non-executive directors of the Company and have extensive experience in, and knowledge of, the industry in which the Company operates. Mr R.G. Pitcher and Mr B.W.C. Wilson have accounting qualifications.

Mr. B.W.C. Wilson and Mr J.G. Wilson are substantial shareholders of the Company but as non-executive directors are segregated from management in the exercise of their committee duties.

The Audit Committee operates under its own charter.

The Chief Executive Officer and Chief financial Officer have made a statement in writing to the Board that:

the Company’s financial reports present a true and fair view, in all material aspects, of the financial condition and operational financial results of the Company;
the Company’s financial reports have been prepared in accordance with relevant accounting standards; and
the financial records of the Company for the financial year have been properly maintained.

ReeCe AustRAliA limited ANNuAl REpoRt 07 4

Corporate Governance statement

Principle 5

make timeLy and BaLanced discLosure

The Company has in place policies and procedures to ensure that Reece manages the disclosure of price sensitive information effectively and in accordance with the requirements as set out by regulatory bodies. All market disclosures are approved by the Board.

The Chairman and the Company Secretary are authorised to communicate with shareholders and the market in relation to Board approved ASX disclosures. Other directors and management must adhere to this policy at all times.

All announcements made to the ASX are placed on the Company’s website directly after public release.

Principle 6

resPect the rights of sharehoLders

The Company provides a hard copy of its annual and half-year report to all shareholders and makes these reports available on its corporate website. Copies of the Company charters and codes of conduct approved by the Board can be obtained from the Company upon request.

The format of general meetings aims to encourage shareholders to actively participate in the meeting through being invited to comment or raise questions of directors on any matter relevant to the performance and operation of the Company.

The external auditor of the Company attends each annual general meeting and is available to answer shareholder questions about the audit.

Principle 7

recognise and manage risk

The Board is committed to protecting the Company’s employees, assets and earnings with risk management being a key review responsibility of the Audit Committee. Managing risk is absolutely fundamental to a Board that has directors owning more than three quarters of the Company.

At the Audit Committee’s direction, and independent of the external audit, comprehensive internal review programmes and processes have been developed to measure internal compliance with the Company’s policies, systems and procedures. The Board fosters a strong culture of continual improvement throughout the Company and the internal review function complements the strategy that a single set of policies, systems and procedures be the operational foundation for the Company’s geographically diverse network.

The Chief Executive Officer and Chief financial Officer have made statements in writing to the Board on the integrity of the Company’s financial statements and that they are founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board and which operates efficiently and effectively in all material aspects.

The Company also has in place classes of insurance at levels which, in the reasonable opinion of the directors, are appropriate for its size and type of operations.

Principle 8

encourage enhanced Performance

A process of evaluation was undertaken during the year of the performance of the Board and its committees.

To enable the performance of their duties, all directors:

have access to management
are provided with appropriate management information in a timely manner
are able to seek independent professional advice at the Company’s expense
are entitled to request additional management information at any time

Principle 9

remunerate fairLy and resPonsiBLy

The Board has established a Remuneration Committee which consists of at least two members, all of whom must be non-executive directors. The Committee currently comprises Mr R.G. Pitcher (Chairman) and Mr B.W.C. Wilson. Executive directors are not entitled to be a member of the Committee but may be required to attend meetings to provide information and advice.

The Remuneration Committee operates under its own charter.

The Board has been able to retain a high calibre management team through a policy of fair and appropriate remuneration which takes into consideration prevailing employment market conditions and which is linked to the Company’s financial and operational performance.

The Board has ensured there is a high level of transparency in remuneration paid to directors and management. There are no share based payments and non-cash benefits are minimal. There is no scheme to provide any director or member of management with retirement benefits other than accrued long service leave, accrued annual leave and superannuation benefits. In relation to the Company’s incentive scheme, discretion is exercised by the Board, having regard to the overall performance of the Company and of the individual.

Non-executive directors are remunerated by way of cash fees plus statutory superannuation and do not participate in the Company’s incentive scheme. There is no scheme to provide non-executive directors with retirement benefits other than statutory superannuation.

Director and executive disclosure requirements are dealt with in the Directors’ Report and notes to the accounts.

Principle 10

recognise the Legitimate interests of stakehoLders

The Board recognises that the interests of all stakeholders will be best served when the Company, its directors and staff adhere to high standards of business ethics and comply with the law.

The Board expects a high standard of ethical corporate behaviour from all directors and staff. As a result, a Code of Business Ethics has been developed outlining the policies and procedures which operate within the Company to ensure its exemplary reputation is maintained.

Copies of the Company charters and codes approved by the Board can be obtained from the Company upon request.

ReeCe AustRAliA limited ANNuAl REpoRt 07 5

~~directors’ Report~~

The Directors present their report together with the financial report of the consolidated entity consisting of Reece Australia Limited and the entities it controlled, for the financial year ended 30 June 2007 and independent auditors report thereon. This financial report has been prepared in accordance with Australian Equivalents of International financial Reporting Standards (AIfRS). Compliance with AIfRS ensures compliance with International financial Reporting Standards (IfRS).

Principal Activities

The principal activities of the consolidated entity during the financial year were plumbing, building and hardware merchants.

There has been no significant change in the nature of these activities during the financial year.

Results

The consolidated profit for the year attributable to the members of Reece Australia Limited was:

Australia Limited was:
	2007	2006
	($000’s)	($000’s)
Operating Proft before income tax	149,130	124,583
Income tax expense	45,637	37,724
Operating proft after income tax attributable to the members of Reece Australia Limited	103,493	86,859

Review of Operations

Reece Australia Limited, Australia’s leading distributor of plumbing and bathroom products, earned a net profit after tax of $103.4m for the year ended 30 June 2007 which is a 19.2% increase over the previous year. Sales revenue for the year ended 30 June 2007 increased by 17.5% to $1,308,703,282.

Throughout the year the Company maintained its strong focus on Occupational Health and Safety. In conjunction with the Company’s continuing focus on manual handling which accounts for around 70% of compensable injuries, we have introduced further materials handling initiatives. for example new initiatives have been introduced in relation to the direct delivery by suppliers of heavy or awkward product such as roofing materials and rainwater tanks. As a consequence, we are seeing less serious materials handling injuries and lower WorkCover premiums.

The Board is satisfied with the quality and quantum of the Company’s receivables which have risen in line with the increased level of trading year on year.

significant Changes in the state of Affairs

There have been no significant changes in the consolidated entity’s state of affairs during the financial year.

After Balance date events

No matters or circumstances have arisen since the end of the financial year that have significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

ReeCe AustRAliA limited ANNuAl REpoRt 07

directors’ Report

likely developments

The consolidated entity will continue to pursue its operating strategy to create shareholder value. In the opinion of the directors, disclosure of any further information would be likely to result in unreasonable prejudice to the consolidated entity.

environmental Regulations

The consolidated entity’s operations are not subject to any significant environmental Commonwealth or State regulations or laws.

dividends

Dividends paid or declared by Reece Australia Limited since the end of the previous financial year were:

In respect of the previous fnancial year:	($000’s)
A fnal fully franked ordinary dividend of 30 cents
per share in respect of the year ended 30 June
2006, was paid on 26 October 2006.	29,880
In respect of the current fnancial year:
An interim ordinary dividend of 17 cents per share
was paid on 23 March 2007.	16,932
The fnal dividend declared to be paid on 25 October 2007 is an ordinary fully franked
dividend of 35 cents per share.	34,860
	51,792

Philanthropic initiatives

During the financial year, the Board approved payments totalling $385,000 (2006 - $300,000) to various charitable organisations. This is a continuing initiative and recipients may vary from year to year at the discretion of the Board. The recipients this year were:

	initiative and recipients may vary from year to year at the Board. The recipients this year were:	discretion of the
	The Asthma foundation	20,000
	Multiple Sclerosis Australia	20,000
	Salvation Army	20,000
	The Smith family	20,000
	Royal flyingDoctor Service	20,000
	Doctors without Borders	20,000
	Barnados	20,000
	National Stroke foundation	20,000
	Peter MacCallum Cancer Centre	40,000
	Prostate Cancer foundation of Australia	20,000
	Centre for Eye Research Australia	20,000
	Alzheimers Australia	20,000
	Beyond Blue	20,000
	Legacy	20,000
	Mental Health Research Institute	20,000
	Motor Neurone Disease Association of Victoria	20,000
	St Vincent De Paul Society	20,000
	Typo Station	20,000
	Teen Challenge	5,000

share Options

No options over unissued shares or interests in the consolidated entity were granted during or since the end of the financial year and there were no options outstanding at the end of the financial year.

indemnification and insurance of directors and Officers

A deed of indemnity, insurance and access has been entered into with each director, and with the company secretary, of the consolidated entity.

The Company has not, during or since the financial year, indemnified or agreed to indemnify the auditor of the Company against a liability incurred as auditor.

During the financial year the consolidated entity paid a premium of $47,000 for Directors’ and Officers’ Liability Insurance. further disclosure is prohibited under the terms of the contract.

Proceedings on Behalf of the Consolidated entity

No person has applied for leave of Court to bring proceedings on behalf of the consolidated entity.

ReeCe AustRAliA limited ANNuAl REpoRt 07 7

directors’ Report

information on directors and Company secretary

name: Mr L. Alan Wilson Age: 66 position: Chairman & Chief Executive Officer Experience: Appointed to the Board 1969. General Manager 1970 – 1974. Deputy Chairman 1973 – 2001. Managing Director since 1974. Appointed Chairman 2001.

No other directorships of listed companies were held at any time during the three years prior to 30 June 2007.

name: Mr peter J. Wilson Age: 39 position: Executive Director & Chief Operating Officer Experience: B.Comm (Melb). Appointed to the Board 1997.

No other directorships of listed companies were held at any time during the three years prior to 30 June 2007.

name: Mr Bruce W.C. Wilson Age: 61 position: Non-Executive Director Experience: B.Comm (Melb). Appointed to the Board 1970. Secretary 1974 – 1999.

Mr Ronald G. pitcher, AM

name: Mr Ronald G. pitcher, AM Age: 68 position: Non-Executive Director Experience: fCA, fCPA, ACAA.

A chartered accountant and business consultant with over 46 years experience in the accounting profession and in the provision of business advisory services. Appointed to the Board 2003.

Mr Pitcher was a previous partner of the Company’s audit firm until his retirement from the audit firm in 1999.

Committee Membership:

Chairman of Audit Committee Chairman of Remuneration Committee

Directorships of other Listed Companies:

Cellestis Limited 6 years McMillan Shakespeare Limited 3 years National Can Industries Limited 13 years

name: Mr neil G. Cathie Age: 51 position: Company Secretary & Chief financial Officer Experience: fCPA, MAICD, Dip. Bus. Appointed Company Secretary 1999. Joined the consolidated entity in 1981.

Committee Membership: Member of Audit Committee Member of Remuneration Committee

No other directorships of listed companies were held at any time during the three years prior to 30 June 2007.

name: Mr John G. Wilson Age: 69 position: Non-Executive Director Experience: Appointed to the Board 1984. Committee Membership: Member of Audit Committee

No other directorships of listed companies were held at any time during the three years prior to 30 June 2007.

ReeCe AustRAliA limited ANNuAl REpoRt 07 8

directors’ Report

directors’ meetings

The number of meetings of the board of directors and of each board committee held during the financial year and the number of meetings attended by each director were:

	number of Directors	number of Directors
Director	Meetings Attended	Meetings Held Whilst in Offce
L.A. Wilson	10	10
P.J. Wilson	10	10
B.W.C. Wilson	10	10
J.G. Wilson	9	10
R.G. Pitcher, AM	10	10
	number of Audit Committee	number of Audit Committee
Director	Meetings Attended	Meetings Held Whilst In Offce
R.G. Pitcher, AM	3	3
J.G. Wilson	2	3
B.W.C. Wilson	3	3
	number of Remuneration	number of Remuneration Committee
Director	Committee Meetings Attended	Meetings Held Whilst In Offce
R.G. Pitcher, AM	2	2
B.W.C. Wilson	2	2

directors’ interests in shares

Directors’ relevant interests in shares of Reece Australia Limited are detailed below.

	Ordinary Shares of
Director	Reece Australia Limited
J.G. Wilson	67,438,320
L.A. Wilson	66,625,820
B.W.C. Wilson	66,508,320
P.J. Wilson	106,500
R.G. Pitcher, AM	25,000

directors’ interests in Contracts

Directors’ interests in contracts are disclosed in note 26 to the financial statements.

Auditor’s independence declaration

A copy of the auditor’s independence declaration in relation to the audit for the financial year is provided with this report.

ReeCe AustRAliA limited ANNuAl REpoRt 07 9

~~directors’ Report~~

Non-Audit services

Non-audit services are approved by resolution of the Audit Committee and approval is provided in writing to the board of directors. Non-audit services provided by the auditors of the consolidated entity during the year, Pitcher Partners, are detailed below. The directors are satisfied that the provision of the non-audit services during the year by the auditor is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

Amounts paid or payable to an auditor for non-audit services provided during the year by the auditor to any entity that is part of the consolidated entity are detailed below.

are detailed below.
	2007	2006
	$	$
Audit/Review fees	408,979	358,865
Non-audit fees:
Taxation services	21,350	18,820
Review of accounting policies	4,500	3,405
Other assurance services	21,039	24,500
	46,889	46,725

Remuneration Report

remuneration PoLicies

Remuneration of the directors and executives is the responsibility of the Remuneration Committee. The Committee obtains advice where necessary to ensure that the Company attracts and retains talented and motivated directors and employees who can enhance Company performance through their contributions and leadership. In addition, the Committee makes reference to the current employment market in which the consolidated entity operates when setting remuneration arrangements.

The components of remuneration for each executive director and executive are largely cash based and comprise fixed remuneration (including superannuation and benefits) and performance based short-term incentives. There is no share-based remuneration. Performance based cash payments are the responsibility of the Remuneration Committee and are largely related to the Company performance. In determining performance based payments the Committee exercises its discretion having regard to the overall performance of the Company and of the individual. The CEO’s performance based cash payment is 1% of the consolidated entity’s operating profit before tax provided return on equity is 20% or greater. Nonexecutive directors receive fees and do not receive performance based payments. There are no contracts in place. There are no arrangements in place to provide any executive director or executive with retirement benefits other than statutory superannuation and accrued leave entitlements.

Details of the nature and amount of each major element of the remuneration of each director of the Company, and the executives who are directly accountable and responsible for the operational management and strategic direction of the Company and the consolidated entity, are detailed on page 11.

ReeCe AustRAliA limited ANNuAl REpoRt 07 10

directors’ Report

Key management Personnel

		Short term	Other	post Employment
	Salary	performance	non-cash	Super
	& Fees	Based payment	benefts	Contributions	total
	$	$	$	$	$
Directors
L.A. Wilson
(Chairman and Chief Executive Offcer)
2007	1,227,717	1,491,000	62,342	105,113	2,886,172
2006	1,125,000	1,246,000	17,169	87,141	2,475,310
p.J. Wilson
(Chief Operating Offcer)
2007	745,835	380,000	27,902	42,385	1,196,122
2006	535,000	300,000	11,780	28,600	875,380
B.W.C. Wilson
(Non-Executive)
2007	50,000	-	-	4,500	54,500
2006	50,000	-	-	4,500	54,500
J.G. Wilson
(Non-Executive)
2007	50,000	-	-	4,500	54,500
2006	50,000	-	-	4,500	54,500
R.G. pitcher
(Non-Executive)
2007	-	-	-	81,750	81,750
2006	75,000	-	-	6,750	81,750
total Remuneration: Directors
2007	2,073,552	1,871,000	90,244	238,248	4,273,044
2006	1,835,000	1,546,000	28,949	131,491	3,541,440
Executives
n.G. Cathie
(Company Secretary, Chief financial Offcer)
2007	512,817	345,000	49,225	105,000	1,012,042
2006	458,000	290,000	27,182	81,000	856,182
total Remuneration: Executives
2007	512,817	345,000	49,225	105,000	1,012,042
2006	458,000	290,000	27,182	81,000	856,182

“Executives” are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. Being a working Board, decisions and direction are exercised through the Board and accordingly, there is only one employee in addition to the directors who is in this category.

Rounding of Amounts

The amounts contained in the report and in the financial report, other than remuneration, have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies. Dated at Melbourne on 28 August 2007.

Signed in accordance with a resolution of Directors.

L.A. WILSOn Chairman

ReeCe AustRAliA limited ANNuAl REpoRt 07

Auditor’s independence declaration

To the Directors of Reece Australia Limited

In relation to the independent audit for the financial year ended 30 June 2007, to the best of my knowledge and belief there have been:

No contraventions of the auditor independence requirements of the Corporations Act 2001.
No contraventions of any applicable code of professional conduct.

A.R. FItZpAtRICK partner 28 August 2007

pItCHER pARtnERS Melbourne

ReeCe AustRAliA limited ANNuAl REpoRt 07

Our goal

to be the best b y continuall y im rovin p g the service we rovide our p customers.

ReeCe AustRAliA limited ANNuAl REpoRt 07

~~Consolidated income statement for the year ended 30 June 2007~~

		COnSOLIDAtED EntIty	COnSOLIDAtED EntIty	pAREnt	EntIty
	Notes	2007	2006	2007	2006
		($000’s)	($000’s)	($000’s)	($000’s)
Revenue
Sales revenue	4	1,308,703	1,113,427	-	-
Other income		1,359	2,210	46,812	39,840
		1,310,062	1,115,637	46,812	39,840
Cost of goods sold		926,915	794,409	-	-
Employee benefts expense		118,744	100,667	-	-
Depreciation		16,244	13,348	-	-
finance costs		1,500	80	-	-
Other expenses		97,529	82,550	-	-
proft before income tax	4	149,130	124,583	46,812	39,840
Income tax expense	5	45,637	37,724	-	-
proft for the year		103,493	86,859	46,812	39,840
Proft attributable to the members of the parent		103,493	86,859	46,812	39,840
Basic earnings per share	23	104 cents	87 cents	-	-
Diluted earnings per share	23	104 cents	87 cents	-	-

The Consolidated Income Statement is to be read in conjunction with the notes to the financial statements set out on pages 18 to 32.

ReeCe AustRAliA limited ANNuAl REpoRt 07

Consolidated Balance sheet as at 30 June 2007

		COnSOLIDAtED	EntIty	pAREnt	EntIty
	Notes	2007	2006	2007	2006
		($000’s)	($000’s)	($000’s)	($000’s)
Current Assets
Cash and cash equivalents	7	23,648	53,665	-	-
Receivables	8	215,908	191,323	-	-
Inventories	9	197,856	166,210	-	-
Total Current Assets		437,412	411,198	-	-
non-Current Assets
Receivables	8	-	-	1,812	1,812
Other fnancial assets	10	-	-	9,711	9,711
Property, plant and equipment	11	211,312	176,734	-	-
Intangible assets	13	3,177	2,879	-	-
Deferred tax assets	5	15,716	14,319	-	-
Total Non-Current Assets		230,205	193,932	11,523	11,523
total Assets		667,617	605,130	11,523	11,523
Current Liabilities
Payables	14	185,646	184,264	-	-
Current tax payable		13,381	12,410	-	-
Provisions	15	13,686	11,312	-	-
Other	17	7,152	8,539	-	-
Total Current Liabilities		219,865	216,525	-	-
non-Current Liabilities
Long term borrowings	16	5,215	3,208	-	-
Provisions	15	9,668	9,394	-	-
Total Non-Current Liabilities		14,883	12,602	-	-
total Liabilities		234,748	229,127	-	-
net Assets		432,869	376,003	11,523	11,523
Equity
Contributed equity	18	9,960	9,960	9,960	9,960
Reserves	19	3,072	2,887	37	37
Retained earnings	20	419,837	363,156	1,526	1,526
total Equity		432,869	376,003	11,523	11,523

The Consolidated Balance Sheet is to be read in conjunction with the notes to the financial statements set out on pages 18 to 32.

ReeCe AustRAliA limited ANNuAl REpoRt 07

~~Consolidated statement Of Changes in equity as at 30 June 2007~~

	COnSOLIDAtED EntIty	COnSOLIDAtED EntIty	pAREnt	EntIty
	2007	2006	2007	2006
	($000’s)	($000’s)	($000’s)	($000’s)
total equity at the beginning of the year	376,003	329,100	11,523	11,523

Exchange differences on translation of foreign operations	185	(116)	-	-
net income recognised directly in equity	185	(116)	-	-
proft for the year	103,493	86,859	46,812	39,840
total recognised income and expense for the period	103,678	86,743	46,812	39,840
transactions with equity holders in their capacity as
equity holders:
Dividends paid	(46,812)	(39,840)	(46,812)	(39,840)

total equity at the end of the year	432,869	376,003	11,523	11,523

The Consolidated Statement of Changes in Equity is to be read in conjunction with the notes to the financial statements set out on pages 18 to 32.

ReeCe AustRAliA limited ANNuAl REpoRt 07 16

~~Consolidated statement Of Cash Flows for the year ended 30 June 2007~~

		COnSOLIDAtED EntIty	COnSOLIDAtED EntIty	pAREnt	EntIty
	Notes	2007	2006	2007	2006
		($000’s)	($000’s)	($000’s)	($000’s)
Cash fow from operating activities
Receipts from customers		1,413,531	1,205,194	-	-
Payments to suppliers and employees		(1,299,408)	(1,077,734)	-	-
Dividends received		-	-	46,812	39,840
Interest received		741	1,542	-	-
Borrowing costs		(1,500)	(80)	-	-
Income tax paid		(46,053)	(38,298)	-	-
net cash provided by operating activities	21(a)	67,311	90,624	46,812	39,840
Cash fow from investing activities
Payment for property, plant and equipment		(53,323)	(44,330)	-	-
Proceeds from sale of property, plant and equipment		1,188	906	-	-
Purchase of intangibles		-	(2,879)	-	-
net cash used in investing activities		(52,135)	(46,303)	-	-
Cash fow from fnancing activities
Dividends paid		(46,812)	(39,840)	(46,812)	(39,840)
Repayment of borrowings		(333,000)	-	-	-
Proceeds from borrowings		334,619	3,208	-	-
net cash used in fnancing activities		(45,193)	(36,632)	(46,812)	(39,840)
net (decrease) increase in cash and cash equivalents		(30,017)	7,689	-	-
Cash and cash equivalents		53,665	45,976	-	-
at the beginning of the year
Cash and cash equivalents at the end of the year		23,648	53,665	-	-

The Consolidated Statement of Cash flows is to be read in conjunction with the notes to the financial statements set out on pages 18 to 32.

ReeCe AustRAliA limited ANNuAl REpoRt 07 17

~~Notes~~

~~to the fnancial statements for the year ended 30 June 2007~~

1. Basis of Preparation

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Urgent Issues Group Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 .

The financial report covers Reece Australia Limited as an individual parent entity and Reece Australia Limited and controlled entities as a consolidated entity. Reece Australia Limited is a company limited by shares, incorporated and domiciled in Australia.

The following is a summary of material accounting policies adopted by the consolidated entity in the preparation and presentation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

(a) Basis of preparation of the financial report

Compliance with IFRS

Australian Accounting Standards include Australian Equivalents to International financial Reporting Standards (AIfRSs). Compliance with AIfRS ensures compliance with International financial Reporting Standards (IfRSs).

Historical Cost Convention

The financial report has been prepared under the historical cost convention, as modified by revaluations to fair value for certain classes of assets as described in the accounting policies.

(b) principles of Consolidation

The consolidated financial statements are those of the consolidated entity, comprising the financial statements of the parent entity and of all entities which Reece Australia Limited controlled from time to time during the year and at balance date. Details of the controlled entities are contained in Note 30.

The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies which may exist.

All inter-company balances and transactions, including any unrealised profits or losses have been eliminated on consolidation.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Risks and rewards of ownership are considered passed to the buyer at the time of delivery of the goods to the customer.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Dividend revenue is recognised when the right to receive a dividend has been established.

All revenue is stated net of the amounts of goods and services tax (GST).

(d) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and at banks, shortterm deposits with an original maturity of three months or less held at call with financial institutions, net of bank overdrafts.

(e) Inventories

Inventories are measured at the lower of cost and net realisable value. Cost is based on the first-in first-out principle.

(f) property, plant and equipment

All classes of property, plant and equipment are stated at cost less depreciation and any accumulated impairment losses.

Depreciation

Land is not depreciated. The depreciable amounts of all other fixed assets are depreciated on a straight-line basis over their estimated useful lives commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The useful lives for each class of assets are:

	Buildings fixtures, fttings and equipment	2007 25 years 2.7 to 20 years	2006 25 years 2.7 to 20 years
	Motor vehicles	5 to 8 years	5 to 8 years

ReeCe AustRAliA limited ANNuAl REpoRt 07 18

~~Notes~~

~~to the fnancial statements for the year ended 30 June 2007~~

g) Leases

Leases of buildings, plant and equipment under which the parent entity or its controlled entities do not assume substantially all the risks and benefits of ownership are classified as operating leases.

Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses in the period in which they are incurred.

(h) Intangibles

Goodwill

Goodwill is not amortised but is tested annually for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired. Goodwill is carried at cost less accumulated impairment losses, if any.

(i) Impairment of assets

Assets with an indefinite useful life are not amortised but are tested annually for impairment in accordance with AASB 136. Assets subject to annual depreciation or amortisation are reviewed for impairment whenever events or circumstances arise that indicate that the carrying amount of the asset may be impaired.

An impairment loss is recognised where the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of an asset is defined as the higher of its fair value less costs to sell and value in use.

(j) taxes

Current income tax expense or revenue is the tax payable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities.

A balance sheet approach is adopted under which deferred tax assets and liabilities are recognised for temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred tax asset or liability is recognised in relation to temporary differences arising from the initial recognition of an asset or a liability if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for temporary differences and unused tax losses only when it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

(k) Employee Benefits

Liabilities arising in respect of wages and salaries, annual leave, and any other employee benefits expected to settle within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled.

All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date.

Contributions are made by the economic entity to employee superannuation funds and are charged as expenses when incurred.

(l) Financial Instruments

Financial Assets

Trade receivables are carried at full amounts due less provision for doubtful debts. Amounts receivable from other debtors are carried at full amounts due. Amounts receivable from related parties are carried at full amounts due.

Financial Liabilities

Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the economic entity.

(m) Foreign Currencies

Functional and presentation currency

The financial statements of each group entity are measured using its functional currency, which is the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars, as this is the parent entity’s functional and presentation currency.

Transactions and Balances

Transactions in foreign currencies of entities within the consolidated entity are translated into functional currency at the rate of exchange ruling at the date of the transaction.

foreign currency monetary items that are outstanding at the reporting date (other than monetary items arising under foreign currency contracts where the exchange rate for that monetary item is fixed in the contract) are translated using the spot rate at the end of the financial year.

Resulting exchange differences arising on settlement or re-statement are recognised as revenues and expenses for the financial year.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

Tax Consolidation

The parent entity and its Australian controlled entities have formed an income tax consolidated group under the tax consolidation legislation. The parent entity is responsible for recognising the current tax liabilities and deferred tax assets arising in respect of tax losses for the tax consolidated group. The tax consolidated group has also entered into a tax funding agreement whereby each company in the group contributes to the income tax payable in proportion to their contribution to the net profit before tax of the tax consolidated group.

ReeCe AustRAliA limited ANNuAl REpoRt 07

~~Notes to the fnancial statements for the year ended 30 June 2007~~

Group Companies

The financial statements of foreign operations whose functional currency is different from the group’s presentation currency are translated as follows:

Assets and liabilities are translated at year-end exchange rates prevailing at the reporting date;
Income and expenses are translated at average exchange rates for the period; and
All resulting exchange differences are recognised as a separate component of equity.

Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign currency translation reserve as a separate component of equity in the balance sheet.

2. Critical Accounting estimates and Judgements.

The group makes certain estimates and assumptions concerning the future, which, by definition, will seldom represent actual results. The estimates and assumptions that have a significant inherent risk in respect of estimates based on future events, which could have a material impact on the assets and liabilities in the next financial year, are discussed below:

Income taxes

Income tax benefits are based on the assumption that no adverse change will occur in the income tax legislation and the anticipation that the company will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

(n) Hedge Accounting

Certain derivatives are designated as hedging instruments and are further classified as fair value hedges.

At the inception of each hedging transaction the group documents the relationship between the hedging instruments and hedged items, its risk management objective and its strategy for undertaking the hedge transaction. The group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.

3. Financial Risk management

Forward exchange contracts

The group enters into forward exchange contracts to buy specified amounts of foreign currencies in the future at stipulated exchange rates. The objective in entering the forward exchange contracts is to protect the economic entity against unfavourable exchange rate movements for both the contracted and anticipated future purchases undertaken in foreign currencies.

Fair value hedge

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

(o) Comparatives

Where necessary, comparative information has been reclassified and repositioned for consistency with current year disclosures.

(p) Rounding Amounts

The Company is of a kind referred to in ASIC Class Order 98/100, and in accordance with that Class Order, amounts in the financial statements have been rounded off to the nearest thousand dollars, or in certain cases, to the nearest dollar.

ReeCe AustRAliA limited ANNuAl REpoRt 07 20

~~Notes~~

~~to the fnancial statements for the year ended 30 June 2007~~

	COnSOLIDAtED EntIty	COnSOLIDAtED EntIty	pAREnt	EntIty
	2007	2006	2007	2006
	($000’s)	($000’s)	($000’s)	($000’s)
4. Proft from Continuing Operations
Proft from continuing operations before income tax has been
determined after:
Revenues
Sales	1,308,703	1,113,427	-	-
Other Income
Dividends received or due and receivable	-	-	46,812	39,840
from related entities
Interest received or due and receivable	741	1,542	-	-
from other persons
Net gain on sale or disposal of property,	241	291	-	-
plant and equipment
foreign currency gain	-	112	-	-
Bad debts recovered	377	265	-	-
	1,359	2,210	46,812	39,840
total revenues from continuing operations	1,310,062	1,115,637	46,812	39,840
Expenses
Cost of goods sold	926,915	794,409	-	-
Bad debts written off:
Trade Debtors	1,373	1,196	-	-
Depreciation:
Buildings	3,072	2,654	-	-
Motor vehicles	5,081	4,276	-	-
fixtures, fttings and equipment	8,091	6,418	-	-
Employee benefts expense:
Wages and salaries	109,997	93,232	-	-
Superannuation costs	8,747	7,435	-	-
Interest	1,500	80	-	-
Other expense items:
Provision for inventory obsolescence	400	1,040	-	-
Provision for warranty	537	-	-	-
foreign currency loss	1,084	-	-	-
Operating lease rentals	13,282	10,597	-	-

ReeCe AustRAliA limited ANNuAl REpoRt 07

~~Notes to the fnancial statements for the year ended 30 June 2007~~

	COnSOLIDAtED	EntIty	pAREnt	EntIty
	2007	2006	2007	2006
	$000’s)	($000’s)	($000’s)	($000’s)
5. income tax
(a) The components of tax expense:
Current tax	46,683	39,516	-	-
Deferred tax	(1,397)	(1,699)	-	-
Under(over)provision in prior years	351	(93)	-	-
Income tax expense	45,637	37,724	-	-
(b) The prima facie tax on proft, using tax rates applicable in the
country of operation, differs from the income tax provided in the
fnancial statements as follows:
At the statutory income tax rate of 30%	44,739	37,375	14,044	11,952
(2006: 30%)
Tax effect of amounts which are not deductible in calculating
taxable income:
Non-deductible expenditure	547	442	-	-
Underprovision in prior year	351	(93)	-	-
Rebateable dividends	-	-	(14,044)	(11,952)
Income tax expense	45,637	37,724	-	-
(c) Deferred tax asset relates to the following:
Employee benefts	6,517	5,884	-	-
Other provisions	4,544	4,263	-	-
Losses available for offset against future taxable income	-	66	-	-
Depreciation of buildings	4,655	4,106	-	-
	15,716	14,319	-	-
Movement in deferred tax asset:
Balance at beginning of year	14,319	12,620	-	-
Credited to the income statement	1,397	1,699	-	-
Balance at the end of the year	15,716	14,319	-	-
Deferred tax asset not brought to account
Deferred tax asset relating to unused capital tax losses at 30%	495	495	-	-
(2006: 30%)

The deferred tax asset which has not been recognised as an asset will only be obtained if:

(i) the tax consolidated group derives future assessable income of a nature and an amount sufficient to enable the benefit to be realised; and
(ii) the tax consolidated group continues to comply with the conditions for deductibility imposed by the law; and
(iii) no changes in tax legislation adversely affect the group in realising the benefit.

ReeCe AustRAliA limited ANNuAl REpoRt 07 22

~~Notes to the fnancial statements for the year ended 30 June 2007~~

	COnSOLIDAtED	EntIty	pAREnt EntIty
	2007	2006	2007	2006
	($000’s)	($000’s)	($000’s)	($000’s)
6. dividends Paid and Proposed
The following are the dividends paid and/or proposed
for the fnancial year:
In respect of the previous fnancial year:
final dividend of 30 cents per share paid	29,880	25,896	29,880	25,896
26 October 2006 (fully franked to 30%)
In respect of the current fnancial year:
Interim dividend of 17 cents per share paid	16,932	13,944	16,932	13,944
23 March 2007 (fully franked to 30%)
Dividend Declared to be paid 25 October 2007	34,860	29,880	34,860	29,880
(35 cents per share fully franked)
	51,792	43,824	51,792	43,824
Dividend franking account
Balance of franking account at year end adjusted	207,688	193,884	207,688	193,884
for franking credits arising from payment of income
tax and franking debits arising from dividends paid.
Impact on the franking account of dividends	(14,940)	(12,805)	(14,940)	(12,805)
recommended by the directors since the year
end but not recognised as a liability at year end.
	192,748	181,079	192,748	181,079
7. Cash and Cash equivalents
Cash on hand	242	220	-	-
Cash on deposit	23,406	53,445	-	-
	23,648	53,665	-	-

ReeCe AustRAliA limited ANNuAl REpoRt 07 23

~~Notes to the fnancial statements for the year ended 30 June 2007~~

	COnSOLIDAtED EntIty	COnSOLIDAtED EntIty	pAREnt	EntIty
	2007	2006	2007	2006
	($000’s)	($000’s)	($000’s)	($000’s)
8. Receivables
Current
Trade debtors	201,448	178,406	-	-
Less: Provision for doubtful debts	(5,379)	(5,379)	-	-
	196,069	173,027	-	-
Other debtors and prepayments	19,839	18,296	-	-
	215,908	191,323	-	-
Non-current
Loans, controlled entities	-	-	1,812	1,812
9. inventories
Current
finished goods, at cost	206,026	173,980	-	-
Less: Provision for obsolescence	(8,170)	(7,770)	-	-
	197,856	166,210	-	-
10. Other Financial Assets
Non-current
Shares in related corporations at cost	-	-	9,711	9,711
11. Property, Plant and equipment
freehold land at cost	60,992	49,286	-	-
freehold buildings at cost	81,414	74,203	-	-
Less: Accumulated depreciation	(26,377)	(23,415)	-	-
	116,029	100,074	-	-
Total land and buildings	142,406	123,489	-	-
Less: Accumulated depreciation	(26,377)	(23,415)	-	-
	116,029	100,074	-	-
fixtures, fttings and equipment at cost	127,634	104,494	-	-
Less: Accumulated depreciation	(58,366)	(50,280)	-	-
	69,268	54,214	-	-
Motor vehicles at cost	46,830	41,743	-	-
Less: Accumulated depreciation	(20,815)	(19,297)	-	-
	26,015	22,446	-	-
Total property, plant and equipment	211,312	176,734	-	-

ReeCe AustRAliA limited ANNuAl REpoRt 07 24

~~Notes to the fnancial statements for the year ended 30 June 2007~~

11. Property, Plant and equipment (continued)

Reconciliations

Reconciliations of the carrying amounts of property, plant and equipment at the beginning and end of the current financial year.

	COnSOLIDAtED	EntIty
	2007	2006
	($000’s)	($000’s)
freehold land
Carrying amount at beginning of year	49,286	43,939
Additions	11,731	5,754
Disposals	(25)	(407)
Carrying amount at end of year	60,992	49,286
Buildings
Carrying amount at beginning of year	50,788	43,577
Additions	7,360	9,865
Disposals	(39)	-
Depreciation	(3,072)	(2,654)
Carrying amount at end of year	55,037	50,788
fixtures, fttings & equipment
Carrying amount at beginning of year	54,214	37,328
Additions	23,147	23,391
Disposals	(2)	(87)
Depreciation	(8,091)	(6,418)
Carrying amount at end of year	69,268	54,214
Motor vehicles
Carrying amount at beginning of year	22,446	18,052
Additions	9,530	9,198
Disposals	(880)	(528)
Depreciation	(5,081)	(4,276)
Carrying amount at end of year	26,015	22,446

12. Current Value of land and Buildings

A directors’ valuation of land and buildings was undertaken on 30 June 2007. In their valuation, the directors took account of independent valuations previously obtained. As at 30 June 2007, the directors’ assessment of the current market value of land and buildings is $186,301,468.

	COnSOLIDAtED	EntIty	pAREnt	EntIty
	2007	2006	2007	2006
	($000’s)	($000’s)	($000’s)	($000’s)
13. intangibles
Goodwill at cost	3,177	2,879	-	-
Accumulated impairment loss	-	-	-	-
	3,177	2,879	-	-

ReeCe AustRAliA limited ANNuAl REpoRt 07 25

~~Notes to the fnancial statements for the year ended 30 June 2007~~

	COnSOLIDAtED EntIty	COnSOLIDAtED EntIty	pAREnt	EntIty
	2007	2006	2007	2006
	($000’s)	($000’s)	($000’s)	($000’s)
14. Payables
Current
Trade creditors and accruals	185,646	184,264	-	-
15. Provisions
Current
Employee benefts	12,087	10,250	-	-
Warranty	1,599	1,062	-	-
	13,686	11,312	-	-
Non-current
Employee benefts	9,668	9,394	-	-
Aggregate employee benefts liability	21,755	19,644	-	-
Number of employees at year end	2,950	2,677	-	-
16. long term Borrowings
Non-current
Secured
fixed rate term loan	5,215	3,208	-	-
Under a facility for NZ$8M established by
Reece New Zealand Limited with the Bank of New Zealand
which is guaranteed by Reece Australia Limited
and Reece Pty Ltd.
17. Other Current liabilities
Amounts owing under contract	7,152	8,539	-	-
18. Contributed equity
Issued and paid up capital
Ordinary shares fully paid	9,960	9,960	9,960	9,960
(99,600,000 ordinary shares)
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.
At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a
show of hands.
19. Reserves
Asset revaluation reserve	461	461	-	-
General reserve	51	51	-	-
Capital profts reserve	2,491	2,491	37	37
foreign currency translation reserve	69	(116)	-	-
	3,072	2,887	37	37

ReeCe AustRAliA limited ANNuAl REpoRt 07

~~Notes~~

~~to the fnancial statements for the year ended 30 June 2007~~

	COnSOLIDAtED EntIty	COnSOLIDAtED EntIty	pAREnt	EntIty
	2007	2006	2007	2006
	($000’s)	($000’s)	($000’s)	($000’s)
20. Retained earnings
Balance at the beginning of year	363,156	316,137	1,526	1,526
Net proft attributable to members of parent entity	103,493	86,859	46,812	39,840
Dividends paid	(46,812)	(39,840)	(46,812)	(39,840)
Balance at end of year	419,837	363,156	1,526	1,526
21. Cash Flow information
(a) Reconciliation of the net proft after tax to the net cash fows
from operations:
Net proft	103,493	86,859	46,812	39,840
Add/(less) non cash items:
Proft on sale or disposal of non-current assets	(241)	(291)	-	-
Depreciation	16,244	13,348	-	-
Exchange translation	144	(116)	-	-
Amounts set aside to provisions	2,648	2,220	-	-
net cash fows from operations before	122,288	102,020	46,812	39,840
change in assets and liabilities
Change in assets and liabilities
(Increase)/decrease in trade debtors	(23,042)	(17,368)	-	-
(Increase)/decrease in other debtors	(1,543)	769	-	-
(Increase)/decrease in inventory	(31,646)	(23,120)	-	-
Increase/(decrease) in trade creditors and accruals	1,680	28,897	-	-
(Decrease)/increase in income taxes payable	971	1,125	-	-
(Increase)/decrease in deferred tax assets	(1,397)	(1,699)	-	-
net cash fow from operating activities	67,311	90,624	46,812	39,840

ReeCe AustRAliA limited ANNuAl REpoRt 07

~~Notes to the fnancial statements for the year ended 30 June 2007~~

		COnSOLIDAtED	EntIty	pAREnt	EntIty
		2007	2006	2007	2006
		($000’s)	($000’s)	($000’s)	($000’s)
21. Cash Flow information (continued)
(b) financing facilities
Bank Loans and Overdraft
Bank facilities are secured byDeeds of Negative Pledge
The consolidated entity has access	to the following lines of credit:
Total facilities available and unused at 30 June 2007
Bank Overdraft	- facility	5,000	25,000	-	-
	- unused	5,000	25,000	-	-
Committed Cash Advance	- facility	67,256	6,579	-	-
	- unused	62,041	3,371	-	-
Uncommitted Cash Advance	- facility	50,000	-	-	-
	- unused	50,000	-	-	-
Uncommitted Placement Line	- facility	25,000	-	-	-
	- unused	25,000	-	-	-
Bank Guarantees	- facility	1,500	300	-	-
	- unused	961	181	-	-
Trade Refnance & documentary
letters of credit/surrenders	- facility	5,000	5,000	-	-
	- unused	2,614	1,663	-	-
Credit cards	- facility	3,427	3,220	-	-
	- unused	2,957	3,171	-	-
Total	- facility	157,183	40,099	-	-
	- unused	148,573	33,386	-	-
22. Commitments
future operating lease rentals not provided for and payable
in respect of:
Buildings		66,325	41,215	-	-
Equipment		3,440	4,301	-	-
		69,765	45,516	-	-
Due not later than one year		16,263	11,750	-	-
Due later than one year but not later	than fve years	37,201	27,685	-	-
Due later than fve years		16,301	6,081	-	-
		69,765	45,516	-	-

	COnSOLIDAtED EntIty	COnSOLIDAtED EntIty
	2007	2006
23. earnings per share
Earnings used in calculating basic and diluted earnings per share.	103,493,022	86,858,741
Weighted average number of ordinary shares outstanding during the year used in the calculation of basic	99,600,000	99,600,000
and diluted earnings per share.
The earnings per share has been calculated on the weighted average of share capital during the year.	104 cents	87 cents

ReeCe AustRAliA limited ANNuAl REpoRt 07 28

~~Notes~~

~~to the fnancial statements for the year ended 30 June 2007~~

24. Key Management Personnel Compensations

	Short	Term	Other	Post
				Employment
	Salary & Fees	Performance	Non-cash	Super	Total	Relevant interest
		Based Payment	benefts	Contributions		in ordinary shares
						of parent entity
	$	$	$	$	$
Directors
L.A. Wilson
(Chairman and Chief Executive Offcer)
2007	1,227,717	1,491,000	62,342	105,113	2,886,172	66,625,820
2006	1,125,000	1,246,000	17,169	87,141	2,475,310	66,625,820
P.J. Wilson (Chief Operating Offcer)
2007	745,835	380,000	27,902	42,385	1,196,122	106,500
2006	535,000	300,000	11,780	28,600	875,380	106,500
B.W.C. Wilson (Non-Executive)
2007	50,000	-	-	4,500	54,500	66,508,320
2006	50,000	-	-	4,500	54,500	66,508,320
J.G. Wilson (Non-Executive)
2007	50,000	-	-	4,500	54,500	67,438,320
2006	50,000	-	-	4,500	54,500	67,438,320
R.G. Pitcher (Non-Executive)
2007	-	-	-	81,750	81,750	25,000
2006	75,000	-	-	6,750	81,750	25,000
Total Remuneration: Directors
2007	2,073,552	1,871,000	90,244	238,248	4,273,044
2006	1,835,000	1,546,000	28,949	131,491	3,541,440
Executives
N.G. Cathie
(Company Secretary, Chief Financial Offcer)
2007	512,817	345,000	49,225	105,000	1,012,042	30,480
2006	458,000	290,000	27,182	81,000	856,182	30,480
Total Remuneration: Executives
2007	512,817	345,000	49,225	105,000	1,012,042
2006	458,000	290,000	27,182	81,000	856,182

payments the Committee exercises its discretion having regard to the overall performance of the Company and of the individual. The CEO’s performance based cash payment is 1% of the consolidated entity’s operating profit before tax provided return on equity is 20% or greater. Non-executive directors receive fees and do not receive performance based payments. There are no contracts in place. There are no arrangements in place to provide any executive director or executive with retirement benefits other than statutory superannuation and accrued leave entitlements.

ReeCe AustRAliA liMited AnnuAl RepoRt 07 29

~~Notes to the fnancial statements for the year ended 30 June 2007~~

	COnSOLIDAtED	EntIty	pAREnt	EntIty
	2007	2006	2007	2006
	($000’s)	($000’s)	($000’s)	($000’s)
25. Auditor’s Remuneration
Amounts received or due and receivable by Pitcher Partners for:
An audit or review of the fnancial report of the entity	409	359	-	-
and any other entity in the consolidated entity
Other fnancial services	47	47	-	-
	456	406	-	-

26. Related Party disclosures

(a) Directors

The names of each person holding the position of Director of Reece Australia Limited during the financial year were L.A. Wilson, B.W.C. Wilson, J.G. Wilson, P.J. Wilson and R.G. Pitcher.

Details of directors’ remuneration, superannuation and retirement payments are set out in Note 24.

Apart from the details disclosed in this note, no director has entered into a material contract with the Company or the consolidated entity since the end of the previous financial year and there were no material contracts involving directors’ interests existing at year end.

Directors of the Company, Messrs L.A. Wilson, B.W.C. Wilson and J. G. Wilson have a beneficial interest in an entity that sold plumbing and building supplies to the consolidated entity. All dealings are in the ordinary course of business and on normal terms and conditions no more favourable than those which it is reasonable to expect would have been accepted if dealing at arms length in the same circumstances. Goods purchased from this entity during the year total $2,979,350 (2006 $3,540,500) of which $211,962 (2006 $307,192) was owing at year end.

Directors of the Company Messrs L.A. Wilson, B.W.C. Wilson and J.G. Wilson have a beneficial interest in entities that lease premises to the consolidated entity. All dealings with these entities are in the ordinary course of business and on normal terms and conditions no more favourable than those which would have been expected if dealing at arms length in the same circumstances. Lease rentals paid to these entities during the year were $949,225 (2006 $901,215).

from time to time, directors of the Company or its controlled entities, may purchase goods from the consolidated entity. These transactions are on the same terms and conditions as those entered into by other consolidated entity employees.

(b) Ownership Interests in Related parties

Details of interests in controlled entities are set out in Note 30.

27. segment information

The sole activity of the consolidated entity is that of plumbing, building and hardware merchants in Australia and New Zealand.

ReeCe AustRAliA limited ANNuAl REpoRt 07

~~Notes~~

~~to the fnancial statements for the year ended 30 June 2007~~

28. Amounts Payable in Foreign Currencies

The Australian dollar equivalents of amounts payable in foreign currencies, calculated at the year-end exchange rates, are as follows:

US DOLLAR EURO OtHER	US DOLLAR EURO OtHER	US DOLLAR EURO OtHER	US DOLLAR EURO OtHER
2007 ($000’s) 2006 ($000’s) 2007 ($000’s) 2006 ($000’s) 2007 ($000’s) 2006 ($000’s)
Current 2,577 2,635 2,782 2,374 369 384 Non-current - - - - - -
2,577 2,635 2,782 2,374 369 384
29. Financial instruments (a) terms, conditions and accounting policies
RECOGnISED FInAnCIAL InStRUMEnt	nOtE	ACCOUntInG pOLICy	tERMS & COnDItIOnS
i) Financial assets Cash Receivables – trade Receivables – other	7 8 8	Cash is carried at face value. Trade receivables are carried at nominal amounts less any provision for doubtful debts. Other receivables are carried at nominal amounts due.	Cash balances in bank accounts receive the bank benchmark interest rates. Cash is at call. Trade receivables are on 30 day terms.
ii) Financial liabilities Trade creditors and accruals Amounts owing under contract	14 17	Recognised for amounts to be settled in the future, whether or not billed to the consolidated entity. Amounts owing under contract are carried at the principal amount.	Trade payables are ordinarily settled within 30 day terms.
iii) Equity Ordinary Shares	18	Ordinary share capital is recognised at the paid up amount of each share.	The Company is authorised to issue up to 200,000,000 ordinary shares. (2006: 200,000,000)

ReeCe AustRAliA limited ANNuAl REpoRt 07

~~Notes to the fnancial statements for the year ended 30 June 2007~~

29. Financial instruments (cont’d)

(b) Credit risk exposures
At balance date, the maximum exposure to credit risk, excluding the value of any collateral or other security, to recognised financial assets is the carrying amount of those assets, net of any provisions for doubtful debts as disclosed in the Balance Sheet and Notes to the financial Statements.

Credit risk for derivative financial instruments arises from the potential failure by counterparties to the contract to meet their obligations. The credit risk exposure to forward exchange contracts is the net fair value of these contracts.

The consolidated entity does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the consolidated entity.

Concentrations of credit risk

The consolidated entity minimises concentrations of credit risk in relation to trade receivables by undertaking transactions with a large number of customers.

(c) Fair values
The net fair value of financial assets and financial liabilities approximates their carrying amounts as disclosed in the Balance Sheet and Notes to the financial Statements.
(d) Forward exchange contracts
The consolidated entity enters into forward exchange contracts to buy and sell specified amounts of foreign currency in the future at stipulated exchange rates. The objective in entering the forward exchange contracts is to protect the consolidated entity against unfavourable exchange rate movements for both the contracted and anticipated future purchases undertaken in foreign currencies.
The accounting policy in regard to forward exchange contracts is detailed in Note 1 (n).

At balance date, the details of outstanding forward exchange contracts, all of which will be settled within twelve months, are:

	2007	2006
US dollar	15,800,000	4,100,000
EURO	2,050,000	650,000

30. Particulars in Relation to Corporations in the Group

	OWnERSHIp pERCEntAGE 2007	OWNERSHIP PERCENTAGE 2006
name of entity	%	%
Parent entity
Reece Australia Limited
Controlled entities of Reece
Australia Limited
1. Reece Pty Ltd 2. Plumbing World Pty Ltd	100% 100%	100% 100%
3. Reece Project Supply Pty Ltd	100%	100%
4. Reece International Pty Ltd	100%	100%
5. Reece New Zealand Limited	100%	100%

Notes

(i) Controlled entities 1 to 4 are incorporated in Australia

(ii) Controlled entity 5 is incorporated in New Zealand

(iii) All shareholdings are of ordinary shares

(iv) Controlled entities 1 to 4 carry on business in Australia only

(v) Controlled entity 5 carries on business in New Zealand only

(vi) All corporations financial years end on 30 June

31. subsequent events

There has been no matter or circumstance, which has arisen since 30 June 2007, that has significantly affected or may significantly affect:

(a) the operations, in financial years subsequent to 30 June 2007, of the consolidated entity, or
(b) the results of those operations, or
(c) the state of affairs, in financial years subsequent to 30 June 2007, of the consolidated entity.

ReeCe AustRAliA limited ANNuAl REpoRt 07

directors declaration

The directors declare that the financial statements and notes set out on pages 14 to 32 in accordance with the Corporations Act 2001:

(a) Comply with Accounting Standards and the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(b) Give a true and fair view of the financial position of the company and the consolidated entity as at 30 June 2007 and of their performance as represented by the results of their operations, changes in equity and their cash flows, for the year ended on that date.

In the directors’ opinion there are reasonable grounds to believe that Reece Australia Limited will be able to pay its debts as and when they become due and payable.

This declaration has been made after receiving the declarations required to be made by the Chief Executive Officer and Chief financial Officer to the directors in accordance with section 295A of the Corporations Act 2001 for the financial period ending 30 June 2007.

This declaration is made in accordance with a resolution of the directors. Dated at Melbourne on 28 August 2007.

L.A. Wilson Chairman

ReeCe AustRAliA limited ANNuAl REpoRt 07

independent Audit Report

We have audited the accompanying financial report of Reece Australia Limited and controlled entities. The financial report comprises the Balance Sheet as at 30 June 2007, and the Income Statement, Statement of Changes in Equity and Cash flow Statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the director’s declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial 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 financial 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 Accounting Standard AASB 101 Presentation of financial Statements, that compliance with the Australian equivalents to International financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial 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 financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement in the financial 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 financial 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 financial report.

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

independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s Opinion

In our opinion,

(a) the financial report of Reece Australia Limited is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2007 and of their 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; and
(b) the consolidated financial report also complies with International financial Reporting Standards as disclosed in Note 1.

A.R. FItZpAtRICK partner 28 August 2007

pItCHER pARtnERS Melbourne

ReeCe AustRAliA limited ANNuAl REpoRt 07 34

~~shareholders information~~

In accordance with Section 4.10 of the Australian Stock Exchange Limited Listing Rules, the directors provide the following information.

shareholding Analysis

(a) Distribution of shareholders

At 20 August 2007, the distribution of shareholdings was as follows:

SIZE OF SHAREHOLDInG	nUMBER OF SHAREHOLDERS
1 – 1,000	485
1,001 – 5,000	315
5,001 – 10,000	73
10,001 – 100,000	132
Over 100,000	38
Holdings of less than a marketable parcel	0

(b) Substantial shareholdings

The number of shares held by the substantial shareholders listed in the Company’s register of substantial shareholders as at 20 August 2007 were:

	SHAREHOLDER	nUMBER OF SHARES
	Waln Pty Ltd	42,465,320
	W.A.L. Investments Pty Ltd	41,931,320
	Leslie Alan Wilson	66,625,820
	Wilgay Pty Ltd	42,465,320
	J.G.W. Investments Pty Ltd	42,465,320
	John Gay Wilson	67,438,320
	Lezirol Pty Ltd	42,465,320
	florizel Investments Pty Ltd	41,931,320
	Bruce Walter Campbell Wilson	66,508,320
	Adawarra Nominees Pty Ltd	55,479,000
	Warramunda Investments Pty Ltd	55,479,000
	L.T.W. Holdings Pty Ltd	53,169,000
	L.T. Wilson Pty Ltd	38,571,000
	Wilaust Holdings Pty Ltd	38,571,000
	Austral Hardware Pty Ltd	38,571,000
	Austral Hardware (Healesville) Pty Ltd	38,571,000
	Tyara Pty Ltd	42,465,320
	Wal Assets Pty Ltd	42,465,320
	Abtourk Vic No. 11 Pty Ltd	42,465,320
	Perpetual Trustees Australia Limited	13,817,545

Note: Many of these substantial shareholdings relate to the same shares.

ReeCe AustRAliA limited ANNuAl REpoRt 07

~~shareholders information~~

(c) Class of shares and voting rights

At 20 August 2007, there were 1,043 holders of ordinary shares of the Company. All of the issued shares in the capital of the parent entity are ordinary shares and each shareholder is entitled to one vote per share.

(d) twenty largest shareholders, as at 20 August 2007:

SHAREHOLDER	nUMBER OF	% HELD
	SHARES
L.T. Wilson Pty Ltd	31,440,000	31.6%
L.T.W. Holdings Pty Ltd	12,000,000	12.0%
Warramunda Investments Pty Ltd	9,729,000	9.8%
RBC Dexia Investor Services Australia Nominees Pty Ltd (PI Pooled A/C)	8,263,132	8.3%
florizel Investments Pty Ltd	3,360,320	3.4%
W.A.L. Investments Pty Ltd	3,360,320	3.4%
J.G.W. Investments Pty Ltd	3,360,320	3.4%
Austral Hardware Pty Ltd	2,985,000	3.0%
Austral Hardware (Healesville) Pty Ltd	2,400,000	2.4%
Adawarra Nominees Pty Ltd	2,310,000	2.3%
RBC Dexia Investor Services Australia Nominees Pty Ltd (PIIC A/C)	1,983,378	2.0%
Wilaust Holdings Pty Ltd	1,746,000	1.8%
J P Morgan Nominees Australia Limited	1,151,161	1.2%
National Nominees Limited	1,023,121	1.0%
John G. Wilson	934,000	0.9%
UBS Nominees Pty Ltd	914,315	0.9%
Cogent Nominees Pty Limited	910,708	0.9%
Citicorp Nominees Pty Ltd (CfSIL CWLTH AUST SHS 4 A/C)	863,621	0.9%
Abtourk (Vic No. 11) Pty Ltd	534,000	0.5%
WAL Assets Pty Ltd	534,000	0.5%

The twenty members holding the largest number of shares together held a total of 90.16% of the issued capital.

ReeCe AustRAliA limited ANNuAl REpoRt 07 36

~~Reece Australia Limited~~ A.B.N. 49 004 313 133

AI assistant

REECE LIMITED — Annual Report 2007

65683_rns_2007-08-27_347a1629-6ea4-4d4e-8e36-90b758f99522.pdf

1. Reporting period

2. Results for announcement to the market

3. income statement

4. Balance sheet

5. statement of cash Flows

6. dividends

7. statement of retained earnings

~~Appendix 4e Preliminary Final report~~

8. net tangible assets per security

10. commentary on the results for the period

11. the audit has been completed

~~Reece Australia Limited~~

NOTICE OF MEETING

Contents

~~2007 Highlights~~

~~Corporate Governance statement~~

Principle 1

Lay soLid foundations for management and oversight

Principle 3

Promote ethicaL and resPonsiBLe decision making

Principle 2

structure the Board to add vaLue

Principle 4

safeguard integrity in financiaL rePorting

~~Corporate Governance statement~~

Principle 5

make timeLy and BaLanced discLosure

Principle 6

resPect the rights of sharehoLders

Principle 7

recognise and manage risk

Principle 8

encourage enhanced Performance

Principle 9

remunerate fairLy and resPonsiBLy

Principle 10

recognise the Legitimate interests of stakehoLders

Principal Activities

Results

Review of Operations

significant Changes in the state of Affairs

After Balance date events

~~directors’ Report~~

likely developments

environmental Regulations

dividends

Philanthropic initiatives

share Options

indemnification and insurance of directors and Officers

Proceedings on Behalf of the Consolidated entity

~~directors’ Report~~

information on directors and Company secretary

~~directors’ Report~~

directors’ meetings

directors’ interests in shares

directors’ interests in Contracts

Auditor’s independence declaration

Non-Audit services

Remuneration Report

remuneration PoLicies

~~directors’ Report~~

Key management Personnel

Rounding of Amounts

~~Auditor’s independence declaration~~

To the Directors of Reece Australia Limited

~~Our goal~~

~~to be the best b y continuall y im rovin p g the service we rovide our p customers.~~

~~Consolidated Balance sheet as at 30 June 2007~~

1. Basis of Preparation

(a) Basis of preparation of the financial report

Compliance with IFRS

Historical Cost Convention

(b) principles of Consolidation

(e) Inventories

Depreciation

g) Leases

(h) Intangibles

REECE LIMITED Annual Report 2007

Appendix 4e Preliminary Final report

Reece Australia Limited

2007 Highlights

Corporate Governance statement

Corporate Governance statement

directors’ Report

directors’ Report

directors’ Report

directors’ Report

Auditor’s independence declaration

Our goal

to be the best b y continuall y im rovin p g the service we rovide our p customers.

Consolidated Balance sheet as at 30 June 2007

directors declaration

independent Audit Report