332017 AR 3/30/05 9:40 AM Page 01
Metlifecare Limited Annual Report 2004 332017 AR 3/30/05 9:40 AM Page 02
Table of Contents
REPORT TO SHAREHOLDERS 03 Business Highlights 04 Chairman’s Report 07 Chief Executive Officer’s Report 12 Executive Profiles 14 Directors’ Profiles 16 Corporate Governance 18 Villages and Care Facilities 20 Trend Statement FINANCIAL STATEMENTS 22 Statements of Financial Performance 23 Statements of Movements in Equity 24 Statements of Financial Position 26 Statements of Cash Flows 29 Accounting Policies and Notes to the Financial Statements 48 Auditors’ Report STATUTORY INFORMATION 50 Interests Register 54 Other Director Information 54 Other Statutory Information 56 Shareholder Information 58 Directory
The Annual Meeting of Shareholders of Metlifecare Limited will be held at the Goldstar Room, 3rd Floor, Ellerslie Convention Centre, 80 - 100 Ascot Avenue, Ellerslie, Auckland on Thursday, 28 April 2005, commencing at 3.00pm. 332017 AR 3/30/05 9:40 AM Page 03
Business Highlights
■ Increase in net surplus from $14.2 million to $17.5 million
■ Operating surplus (before interest, tax, unusual items and minority interest) increased from $14.3 million to $19.4 million
■ Operating cashflow of $27.8 million ($35.8 million in 2003)
■ An improved year for resales revenue and margins on villas and apartments
■ Total dividend for the year of five and half cents per share without imputation credits (five cents per share without imputation credits in 2003)
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .03 332017 AR 3/30/05 9:40 AM Page 04
Chairman’s Report FINANCIAL RESULTS
Metlifecare continued to make good gains on the previous year, with an operating surplus (before interest, tax, unusual items and minority interest) of $19.4 million ($14.3 million in 2003).
The net surplus (after minority interest) was $17.5 million, a 23% improvement on the $14.2m of 2003.
$ million 2001 2002 2003 2004
Total revenue 82.2 100.7 110.1 108.9 Operating surplus (EBIT)1 10.7 13.1 14.3 19.4 Net surplus (after minority interest) 7.2 10.4 14.2 17.5
(1) Operating Surplus before interest, tax, unusual items and minority interest.
Total revenue of $108.9 million was down on the previous year’s revenues of $110.1 million, due to the lower volume of sales of new villas and apartments during the year. In 2004 the sales volume was 74 (106 in 2003).
At year-end, total assets stood at $277.4 million ($200.6 million in 2003). As at 31 December 2004, the total value of all properties, including chattels, was $585.1 million ($481.2 million in 2003).
Total liabilities increased from $49.0 million to $79.4 million.
The Company’s bank debt increased during the year by $26.8 million to $59.5 million, compared to $32.7 million in 2003. This was largely due to commencement of development at 7 Saint Vincent, Remuera, Auckland and the purchase of land for future development at Takapuna on Auckland’s North Shore and an increase in inventory at year end, due to the timing of the completion of construction programmes.
The Company’s Operating cashflow for the year was down $8.0 million (22%) to $27.8 million, compared with $35.8 million for 2003. This result reflected the higher level of unconditional contracts which will settle in early 2005 and the decrease in the number of resales year on year, which results in a lower level of amenities fee crystalised as cash.
DIVIDEND
The Company remains in a strong financial position, with a significant increase in net surplus over the previous year. The strong performance ensures the Company can continue to fund growth activities.
The Directors have declared a final dividend of 3.5 cents per share, without imputation credits, bringing the total dividend paid for the year to 5.5 cents per share (5 cents per share, without imputation credits, for 2003).
The record date for the final dividend entitlement is Friday 11th March 2005 and the date of payment is Friday 18th March 2005.
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STAFF
The financial performance of the Company reflects the on-going commitment, hard work and dedication of Metlifecare’s employees. The Directors would like to acknowledge the contribution the Company’s staff has made to the success of the business during 2004.
RESIDENTS
The interests of Metlifecare’s residents remain a key focus for the Company’s Board and Management. Our objective of not only meeting but improving actual and expected service levels remains a priority. The Directors would like to extend their thanks and appreciation to Metlifecare’s residents and families for their continued support during 2004.
INDUSTRY INVOLVEMENT
The Company continues to remain actively involved in industry affairs, through its membership of Residential Care NZ Inc. and The Retirement Villages Association of New Zealand Inc. (RVA). Gavin Aleksich, Metlifecare Chief Executive Officer, acted as Deputy President of the RVA.
BOARD OF DIRECTORS
During 2004, the Board continued to work closely with Metlifecare’s Senior Executive reviewing and developing the Company’s strategic direction and providing corporate governance.
Pursuant to the Constitution of the Company, Dr Hylton LeGrice and Mr Michael P. Stiassny retire by rotation and, being eligible, offer themselves for re-election at the annual meeting.
EXECUTIVE TEAM
Chief Executive Officer On 11 October 2004 Metlifecare announced the resignation of Gavin Aleksich effective from 1 April 2005. The Board would like to thank Gavin for his hard work and commitment during the previous four years. The Board respects Gavin’s personal decision and deeply appreciates the contribution he has made to the Company during his tenure as Chief Executive Officer. Under his leadership the Company has grown significantly and has firmly established itself as one of New Zealand’s premier retirement lifestyle village operators.
The Board has commenced the recruitment process for the new Chief Executive Officer with considerable interest in the position being registered by a range of strong candidates.
During the year two new appointments were made to the Executive team:
Chief Financial Officer Neil MacCulloch was appointed to the role of Chief Financial Officer in August 2004.
General Manager Operations Richard de Haast was appointed to the position of General Manager Operations in May 2004.
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INTERNATIONAL FINANCIAL REPORTING STANDARDS
The Accounting Standards Review Board announced in December 2002 that the International Financial Reporting Standards (IFRS) will apply to New Zealand reporting entities for periods commencing on or after 1 January 2007. Entities also have the option of adopting the New Zealand IFRS (NZIFRS) earlier (from 1 January 2005) in line with Australian and European requirements.
The Company has been reviewing and monitoring the likely impact of NZIFRS since 2004, and has established a project team to prepare the group for transition to NZIFRS. Further work is required in changing systems, training staff and managing the business impacts of adopting NZIFRS.
To comply with NZIFRS for the first time the Company will need to restate the comparative balances applying the new standards. This will affect the earnings and cash flow statements and the statement of financial position.
The Company is in the process of identifying the likely impact of the new NZIFRS reporting regime and is currently working on quantifying this impact on its financial statements.
As we progress towards adoption of the NZIFRS the Company intends to update users of the financial statements with the likely impacts of adopting NZIFRS.
OUTLOOK
The purchase of the Takapuna, North Shore land has added to Metlifecare’s land bank and when developed will significantly strengthen an existing well located, comprehensive portfolio of retirement villages and allow the Company to further grow its business activities. The land bank allows the Company to maintain development growth at current levels for the next five to six years.
Metlifecare’s focus in 2005 will be on completing its high value village, 7 Saint Vincent, in Remuera, where the last stage of luxury apartments are currently under construction, and marketing recently completed developments at Tauranga and Auckland. Metlifecare Pinesong in Auckland also continues as a key site where plans are being finalised for the staged completion of the village.
Metlifecare’s strategy is to continue to develop a well-structured business operation that strives to meet the expectations of both its residents and shareholders.
Demand for properties within our villages remains strong, reflecting the quality of the accommodation, facilities and services offered. We expect this trend to continue into 2005.
Peter W. Fitzsimmons OBE Chairman 21 February 2005
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Chief Executive Officer’s Report INTRODUCTION
2004 was a year of continued growth for Metlifecare, improving on the previous year’s operational and financial performance delivering a net surplus of $17.5 million.
BUSINESS OVERVIEW
During 2004, revenue was generated from Metlifecare’s two core business activities - Operations (Resales, Amenities Contribution, Nursing Homes and REVENUE COMPOSITION (%) Hospitals, and Ancillary and Support Services) and Development (Sales). 100 10 10 11
80 12 16 17 11
OPERATIONS 8 24 12
60 4 Metlifecare’s core competency continues to be the day-to-day operational
40 29 management of its retirement villages. During 2004, focus on core 27 32 8 20 12 competencies and improving quality has again led to improved operational 20 and financial outcomes. 23 3829 37 9 1824 12 8 42 33 36 28 26 42 9 13 10 0 1998 1999 2000 20012002 2003 2004 Resales Sales Resales Amenities Contribution The average resales price was $242,000, an increase of 17% from 2003. Nursing Homes & Hospitals Other
While the resale volumes reduced from 222 licences in 2003 to 190 licences
in 2004, the 190 represented 10.7% of the December 2004 total villa and RESALES NUMBER AND REVENUE ($000) apartment licences with the 222 representing 13.3% of the December 2003 250 50000 total villa and apartment licences. These levels are consistent with the 200 40000 Company’s expected range of 10-15% per annum turnover of total licences. 150 30000 Amenities Contribution
NUMBER 100 20000
The Amenities Contribution is calculated as a percentage of purchase price REVENUE ($000) paid by a new resident (both sales and resales). Metlifecare accrues the 50 10000 110 17,364 138 19,343 149 24,993 177 31,128 193 36,867 222 45,999 190 45,918 Amenities Contribution monthly and it is taken to income at the rate of 0 0 1998 1999 2000 2001 2002 2003 2004 5.50% pa or 5.75% pa over four years to a maximum of 22% or 23% of the Number Revenue original purchase price of a villa or apartment. The rate for serviced apartments is 8.33% over 3 years to a maximum of 25% of the original
purchase price. AMENITIES CONTRIBUTION REVENUE ($000)
12000 The revenue from Amenities Contributions increased 16% on the previous 10000 year to $11.3 million ($9.7 million in 2003). This growth is attributable to the 8000 increasing scale and value of Metlifecare’s assets.
6000
4000
2000 4,177 5,543 7,131 8,059 8,141 9,684 11,295 0 1998 1999 2000 2001 2002 2003 2004
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Nursing Homes and Hospitals (Care Facilities) CARE FACILITY BEDS (NUMBER) During 2004, occupancy levels for care facilities decreased slightly averaging 600 91.2% (94.5% for 2003) with nursing homes at 90.7% and hospitals at 500 92.1% (95.7% and 92.4% for 2003). 400
300 Metlifecare’s nursing home and hospital bed numbers changed due to the 137 144 200 reconfiguration of Care Facility beds at Metlifecare Coastal Villas in Paraparaumu with seven hospital beds converted to seven rest home beds. 100 Also, there were additional nursing home beds at Wairarapa. 248 0 382383356 111 350 120 333 134 235 134 188 1998 1999 2000 20012002 2003 2004
Nursing Homes Hospitals Ancillary and Support Services Metlifecare provides a number of ancillary and support services. Metlifecare views this business activity as an important component of supporting the REVENUE FROM OTHER SERVICES ($000) needs and continued independence of its residents. 4000
3500 These services range from domestic services, such as household cleaning 3000 and meals preparation, through to the provision of specialist home nursing 2500 care. Revenue generated from this source continued to climb during 2004. 2000
1500
1000 DEVELOPMENT 500 Expansion to Meet Demand 1,527 1,666 2,046 2,603 2,926 3,428 3,769 0 1998 1999 2000 2001 2002 2003 2004 During 2004, Metlifecare enjoyed continued public demand for its retirement lifestyle options. To effectively meet this demand, the Company completed construction of 105 villas and apartments during the year. VILLAS AND APARTMENTS (NUMBER)
2000 Metlifecare’s portfolio of villas and apartments totalled 1,768 as at 31
1750 December 2004.
1500 543
1250 472 Metlifecare’s strategic focus is on being a retirement village operator that 442 398 398 1000 376 enters into development as a response to our market’s demand. 261 750
500 Metlifecare uses the resource consent process to maximise the value of its 250 village developments. The Resource Management Act supports 822 1,000 1,027 1,089 1,154 1,191 1,225 0 1998 1999 2000 2001 2002 2003 2004 developments that may not comply with local planning restrictions, but are of Apartments Villas quality and mitigate the impact for affected parties.
SALES NUMBER & REVENUE ($000) Sales
175 35,000 Metlifecare’s development programme of building new villas and apartments 150 30,000 is flexible to meet market demand. Average selling prices went from 125 25,000 $274,000 in 2003 to $353,000 in 2004 an increase of 29%.
100 20,000
75 15,000 The decrease in sales volume from 106 to 74 licences in 2004 was
50 10,000 substantially due to the timing of completions of various development
25 5,000 programmes. Factors, such as weather, led to buildings being completed 72 0 133 20,620 88 19,564 119 30,842 18,679 111 28,931 106 28,996 74 26,094 0 later in the year than planned. 1998 1999 2000 20012002 2003 2004
Number Revenue This outcome also resulted in inventory and debt increasing at year end 2004.
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Business Development and Growth Existing Land for Development At the end of 2004 Metlifecare owned land available for further development of 535 villas and apartments within its existing villages. This land will be developed to meet demand during the next four years (subject to obtaining the appropriate Resource and Building Consents).
North Shore Land Purchase On 5 November 2004 Metlifecare purchased a 1.8 hectare site located in Takapuna, North Shore City for $12.825 million plus GST.
Metlifecare plans to build one of New Zealand’s largest lifestyle retirement villages at the Takapuna location. It will comprise 260 luxury apartments and a care facility.
The Takapuna area is known to be prime real estate and highly sought after by those seeking a retirement lifestyle that combines resort-style living with the modern conveniences of a big city. The market demographics for the North Shore are very attractive, yet the availability of high quality lifestyle retirement villages is limited. Our market analysis gives us confidence this will be a very successful project for Metlifecare.
Metlifecare expects to commence site and civil works on site during 2006, including the basement car park. Construction of the apartments and community facilities is expected to commence in 2007, with apartments completed and available for sale on a staged basis.
The demographic outlook remains positive, with New Zealand’s population over 65 years of age forecast to almost treble by the year 2051.
The New Zealand retirement village industry is relatively young, when compared to international markets. The market penetration in New Zealand is approximately 4.3% and highlights the growth potential when compared to the USA market at 6.2%.
As the market increasingly matures our customers are becoming more informed and discerning. These factors we believe are leading to an increased demand for higher quality lifestyle retirement villages provided by Metlifecare.
The retirement village industry is still somewhat fragmented, with a large number of retirement providers. Metlifecare remains the largest private sector lifestyle retirement village operator, with approximately 11% market share.
OUR PEOPLE Thank you The team at Metlifecare continues to focus on ensuring our residents benefit from the delivery of excellent products and services. To all the team members - many thanks for your dedication and efforts over the past year.
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REGULATORY ENVIRONMENT The Retirement Villages Act 2003 The compliance provisions of the Act have yet to come into operation. The industry awaits the release of the Government’s proposed regulations, which are expected later this year. On 8 December 2004 the Retirement Commissioner released for discussion a draft Code of Practice for retirement villages. Metlifecare has made submissions on the Code. When the Code comes into force, it will set out minimum requirements for all retirement villages and will cover such matters as staffing, resident safety and personal security, resident involvement, complaints processes, accounts, maintenance and residents’ rights when they vacate the village.
Metlifecare looks forward to the full implementation of the Act and the new Code of Practice and is well positioned to meet and in some cases exceed, the requirements under both the Code of Practice and the Act.
Health and Disability Services (Safety) Act Metlifecare has achieved three year certification to provide aged residential care services under the Health and Disability Sector Standards for each of our nine Care Facilities.
ORGANISATIONAL DEVELOPMENT
Metlifecare’s vision is ‘to be the market leader in the provision of quality lifestyle retirement villages’.
Metlifecare’s strategy is to achieve differentiation by offering quality lifestyle retirement villages with a seamless continuum of care. Metlifecare will deliver high quality villages and employ exemplary staff delivering superior services for our residents.
This is further enhanced with the Company’s mission ‘making retirement the best time of your life’ which is important for all our employees.
Creating a foundation for sustainable business growth requires development of our people, systems and processes. Metlifecare has developed a set of core organisational values for employees; quality, teamwork and professionalism. During 2005 significant work will be undertaken to bring these values into the workplace.
THE BRAND
Metlifecare is focused on developing a strong New Zealand brand within the retirement village industry. In February 2005 Metlifecare launched a new advertising campaign and new marketing collateral which reinforces our market leadership position and brand values based on “Experience Metlifecare”.
THE FUTURE
Our focus continues on being an operator of lifestyle retirement villages that enters into development in response to demand to deliver high quality villages for long term management by the Company. Hand in hand with our business strategy is a continued focus on providing a superior level of service
for our residents.
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2005 will see focus on the sale of the remaining ‘Point’ apartments at Metlifecare Pinesong, depending on timing of practical completion, as well as Metlifecare Bayswater, with the final stage of the ‘Palms’ apartments completed in February this year.
Construction commenced on the final stage of luxury retirement apartments at 7 Saint Vincent, our high value village in Remuera. Late 2005 will see the practical completion of the last stage of 42 luxury apartments at 7 Saint Vincent, with 12 serviced apartments and two private care suites to be completed during 2006.
During the year Metlifecare achieved Resource Consent for development at the Takapuna site. The next two years will see an intensive period of planning to enable site and development works to commence.
The demographics, market dynamics and continued achievements of Metlifecare positions the Company favourably to continue the trend of improved performance in 2005.
FAREWELL
This annual report marks the fourth year of my tenure as Chief Executive Officer of Metlifecare. As previously announced I have made a decision to seek new challenges overseas.
The role of Metlifecare Chief Executive Officer has been an enormously fulfilling one. It has been a pleasure to have been a part of the team that has transformed Metlifecare into the organisation it is today. I take particular pride in the knowledge that this transformation has benefited both the Company’s shareholders and the Company’s residents.
It is with confidence that I leave Metlifecare. The Company has a clearly defined purpose, a market leading strategy and the resources, both human and physical to achieve further success. I am confident that these, and its commitment to quality outcomes for shareholders and residents, will continue to deliver future improvements in the performance of Metlifecare.
The role of Chief Executive Officer is often credited with a disproportionate share of the outcomes a business achieves, whether they are good or bad. In reality all organisations succeed through an amalgam of large and small contributions from its entire staff.
To all the representatives of Metlifecare I wish to thank you for the trust you have shown in my leadership, your commitment to achieving the goals we set for ourselves and for enjoying the success that we have achieved together and I wish you all every success for the future.
Gavin Aleksich Chief Executive Officer
21 February 2005
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Executive Profiles
GAVIN ALEKSICH Dip Com Nursing, BCom, DipBus (Marketing)
Chief Executive Officer
Gavin Aleksich heads a senior management team of highly experienced individuals. He is responsible for setting the Company’s strategy and providing leadership to the senior management team and the Company for it to achieve its business objectives.
Gavin has a diverse tertiary academic background including nursing, commerce and marketing.
Gavin brings to this role a wealth of knowledge and experience gained in the health and finance areas. He has worked in senior management roles in both the public and private sectors. As a result, he has a strong understanding of market requirements, coupled with a well-developed understanding of the practicalities of day-to-day healthcare and the needs of the aged.
NEIL MACCULLOCH BCom, BSC, CA
Chief Financial Officer
Neil MacCulloch was appointed to the role of Chief Financial Officer in August 2004. Neil is responsible for the Company’s financial, secretarial, treasury and information technology functions. Neil is focused on creating shareholder value through implementing strategic initiatives and improving the general operating and commercial systems at Metlifecare and providing support to the Chief Executive Officer for the implementation of the Company’s Strategic Plan.
He brings to the position over 20 years of experience as a senior finance executive within New Zealand and internationally. Neil has worked in a variety of industries and commercial environments, in both the corporate and professional sectors.
RICHARD DE HAAST BA (Law), MSc
General Manager Operations
Richard de Haast was appointed to the position of General Manager Operations in May 2004. Richard manages the Company’s day-to-day operations, as well as the development of village and care services.
Richard is responsible for maximising benefits for stakeholders, by ensuring that the Company achieves the right balance of operational activities.
With a background in Hospitality Operations and Corporate Human Resources and Training and Development, Richard has always worked within service related companies. He has a keen understanding and extensive experience of maximising service delivery balanced with optimising operational efficiencies.
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RICHARD DAVIS DipBus (Marketing)
General Manager Sales & Marketing
Richard manages Metlifecare’s marketing and sales function. Richard’s main responsibility is managing the growth of the business by realising the value from Metlifecare’s land bank, increasing resident numbers and maximising the value of Metlifecare’s brand. In this role Richard is also involved in researching current and potential markets and the development of Metlifecare’s strategy.
BILL ROSS B.ARCH
General Manager Property Services
Bill is responsible for the development and maintenance of Metlifecare’s property assets. In his current role, Bill manages practical issues relating to the procurement, development, effective running and refurbishment of all of Metlifecare’s properties. With a background in hospitality, retail, design and development, he brings to his role over 20 years of property development and systems management experience gained in both the United Kingdom and New Zealand.
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Directors’ Profiles
PETER WILLIAM FITZSIMMONS OBE
Chairman
Peter Fitzsimmons is a company director and business advisor who has been involved with the retirement village industry for 22 years. He is the Chairman of ING Life Limited. Until late 1998, Mr Fitzsimmons was Managing Director of Metropolitan Life Assurance Company of N.Z. Limited where he worked in various executive and directorate roles. He is a Director and Trustee of several private companies and national organisations. He chairs Metlifecare’s Remuneration Committee and is a member of the Audit Committee.
ROBERT WILLIAM BRYDEN BCA
Director
Robert Bryden is Managing Director of Todd Capital Limited. He has extensive investment experience in the telecommunications, energy and pay television industries. He is currently Deputy Chairman of SKY Network Television Limited. He is a Director of Crown Castle Holdings Pty Limited, Crown Castle Australia Pty Limited, Independent Newspapers Limited and Woosh Wireless Limited. He chairs Metlifecare’s Audit Committee and is a member of the Remuneration Committee.
CLIFFORD JAMES COOK
Director
Cliff Cook has over 27 years experience in the private healthcare industry and is the founder of Metlifecare Limited. As such, he has special responsibility for acquisitions and development within the Company. He is a founding and former executive member and Chairman of The Retirement Villages Association of New Zealand Inc. He was a founding member of Residential Care NZ Inc. (formerly New Zealand Licenced Rest Home Association (Inc.)) and has served on the Association’s national executive. He has also worked in a number of industry advisory roles. He chairs Metlifecare’s Acquisition and Development Committee and is a member of the Remuneration Committee and Audit Committee.
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DR HYLTON LEGRICE OBE MBChB, FRCS (Eng), FRACS, FRANZCO, FRCOphth, DO (Lond)
Director
Dr Hylton LeGrice is a prominent Auckland Surgeon and Company Director, with wide experience in both commercial and health-related fields. A Fellow of the Institute of Directors and past Chairman of the Auckland Medico-Legal Society, he has served as Chairman of Southern Cross Medical Care Society, Southern Cross Hospitals Trust, Southern Cross Benefits Limited, Aetna Health (NZ) Limited, The New Zealand Symphony Orchestra Ltd, and as a Director of Montana Group (NZ) Limited and Montana Wines Limited. He is a Director of several private companies. Dr LeGrice is a member of Metlifecare’s Audit Committee, Acquisition and Development Committee and Remuneration Committee.
MICHAEL PETER STIASSNY CA, BCom, LLB
Director
Michael Stiassny is a Chartered Accountant and Senior Partner of Ferrier Hodgson & Co in Auckland - a chartered accountancy firm specialising in financial consulting work. Michael has significant experience in insolvency, investigating accountant work, company restructuring and due diligence. He currently holds, and has held, a number of public company directorships and is a member of the Institute of Directors. He is a member of Metlifecare’s Acquisition and Development Committee and Audit Committee.
BRETT CHRISTOPHER SUTTON BCA, ACA
Director
Brett Sutton is an Investment Manager with Todd Capital Limited. His experience includes involvement in the telecommunications, pay television, media and aged care sectors. He is currently a Director of Woosh Wireless Limited. He is a member of Metlifecare’s Acquisition and Development Committee and Audit Committee.
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .15 332017 AR 3/30/05 9:42 AM Page 16
Corporate Governance
On 29 October 2003, New Zealand Exchange Limited (“NZX”) amended its NZSX Listing Rules (“Listing Rules”) to require certain mandatory corporate governance provisions in the constitutions of listed issuers, including Metlifecare, and to introduce a corporate governance best practice code.
Under the Listing Rules, the corporate governance provisions will apply to the Company with effect from 29 April 2005, being the date 12 months from the conclusion of last year’s annual meeting. Accordingly, among the resolutions the shareholders are to consider at the forthcoming annual meeting of shareholders is a resolution to adopt a new constitution incorporating changes to the existing constitution to comply with the Listing Rules.
If passed, the new constitution will take effect from the conclusion of the annual meeting.
The Company is therefore not required to disclose in this annual report its compliance or otherwise with the NZX corporate governance best practice code. However, as at the date of this annual report, the Board is pleased to confirm that excellent progress is being made towards implementation by 28 April 2005 of appropriate corporate governance policies and procedures prompted by the NZX best practice code. The Company will disclose those policies and procedures on the Company’s website: www.metlifecare.co.nz.
Accordingly, the following corporate governance disclosure is given as at the date of this annual report.
The following policies, practices and processes have been adopted or followed by the Company as at the date of this annual report.
The Board of Directors, elected by the shareholders, is responsible for supervising and directing the management of the business and affairs of the Company. This includes identifying and controlling the Company’s business risks, monitoring management systems and reporting to shareholders.
The Board is responsible for appointing management and sets the objectives, strategic direction, business plans and budgets of the Company and manages performance against those benchmarks.
The Board has delegated certain of its powers to committees of the Board and the day to day management of the Company to the Chief Executive Officer.
The Board reserves responsibility for significant matters such as the approval of business plans and budgets, agreeing to significant expenditure, incurring significant indebtedness, the entry into guarantees or indemnities and certain significant statutory matters.
Metlifecare is also required to seek the approval of its shareholders prior to entering into certain types of transactions.
The current members of the Board are:
• Peter William Fitzsimmons OBE, Chairman • Robert William Bryden • Clifford James Cook • Dr Hylton LeGrice OBE • Michael Peter Stiassny • Brett Christopher Sutton
The Directors’ profiles appear on pages 14 and 15.
The Company’s constitution requires that the minimum number of Directors is three and the maximum number is twelve. The constitution also requires that at least two Directors must be ordinarily resident in New Zealand. The current Board members are all ordinarily resident in New Zealand. During the year there were no changes to the Board.
The Company’s constitution contains procedures for the appointment and removal of Directors. These provisions include a requirement that at least one third of the Directors shall retire at an annual meeting but shall be eligible for re-election at that meeting. Both Dr H.LeGrice and M.P.Stiassny will retire at the annual meeting and will be eligible for re-election at that meeting.
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The Company has Directors’ and Officers’ liability insurance in place and has indemnified the Directors of the Company and its subsidiaries.
The Annual and Half Year Reports are sent to shareholders unless they elect otherwise. Committees
The Board has three formally constituted Committees - the Audit Committee, the Acquisition and Development Committee and the Remuneration Committee. These Committees meet as required. The members of the Committees are set out in the Directory on page 58. The Board also establishes other committees as required from time to time.
The Audit Committee, comprising all Directors, is chaired by R.W. Bryden. The Audit Committee’s purpose is to oversee and review the financial statements and information provided to shareholders and other external parties. The Audit Committee monitors and reviews the external audit process and internal control systems. M.P. Stiassny and B.C. Sutton are members of the Institute of Chartered Accountants of New Zealand.
The Acquisition & Development Committee is chaired by C.J. Cook. This Committee considers and reports to the Board on proposals for major acquisitions and property developments.
The Remuneration Committee is chaired by P.W. Fitzsimmons. The Remuneration Committee reviews and recommends to the Board the level and type of remuneration for the Chief Executive Officer and members of the Executive Management Team, and the level and type of remuneration for the Board.
Board and Committee Meetings The Board meets as required.
Attendance at Board and Committee meetings in 2004 was as follows: BOARD ATTENDANCE COMMITTEE ATTENDANCE Director Board Strategic Audit Acquisition & Remuneration Planning Development
P.W. Fitzsimmons 10 1 4 – 1 R.W. Bryden 10 1 4 – 1 C.J. Cook 10 1 4 3 1 Dr H. LeGrice 10 1 4 3 1 M.P. Stiassny 9 – 3 2 – B.C. Sutton 10 1 4 3 –
P.W. Fitzsimmons & R.W. Bryden attended 3 Acquisition & Development Committee Meetings by invitation. M.P. Stiassny & B.C. Sutton attended 1 Remuneration Committee Meeting by invitation. Directors also convened a number of special purpose meetings during the year.
Auditors’ Independence The Board has a policy that the Company’s auditors are to be independent. The current auditors are PricewaterhouseCoopers. The Board is committed to ensuring that the external auditors are independent.
Insider Trading Policy The Company has an insider trading policy that applies to all Directors and employees of the Company. Directors and employees may not trade in the Company’s shares when they have price sensitive information that is not publicly available. In addition, except where the Directors and specified employees have the permission of the Board, the Directors and specified employees may trade in the Company shares only during each period commencing the day after the announcement of the full year and half year results and ending on the day falling five months immediately after the full year and four months immediately after the half year to which the results relate.
Treasury Policy Metlifecare has a treasury policy to manage interest rate risks. The policy approves the use of certain instruments for risk management purposes and prohibits any activity that is purely speculative in nature. It also sets out exposure limits, delegated authorities and internal controls.
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .17 332017 AR 3/30/05 9:42 AM Page 18
Other Corporate Policies Metlifecare has in place, in addition to the policies detailed above, a number of other specific policies which cover areas such as legal compliance and contractual authorities. The legal compliance obligations are monitored on an ongoing basis through a system of six monthly compliance exception reports completed by senior managers. All corporate policies must be approved by the Board.
Ongoing Review of Corporate Governance The Board is committed to ensuring that emerging best practice principles of corporate governance are adopted by the Company. It is the Board’s belief that such measures will protect and enhance the assets of the Company for the benefit of all shareholders.
Disclosure The Company is subject to the continuous disclosure regime under the NZSX Listing Rules. The Board reviews continuous disclosure compliance at each Board meeting. All announcements to the market are posted on the Company’s website: www.metlifecare.co.nz
Executive Management Team The Executive Management Team comprises the managers responsible for the major business areas within Metlifecare who report directly to the Chief Executive Officer. The profiles of the Executive Management Team are set out on pages 12 and 13. Villages and Care Facilities
VILLAS BY REGION APARTMENTS BY REGION
1400 600
1200 500
1000 400
800 438 458 300 600 322 287
200 228 272
400 66 29 14 14 449 465 386 100 200 107 107 107 106 219 202 442 197 49 49 49 49 92 204 437 92 92 0 87 419 0 20012002 2003 2004 20012002 2003 2004
Upper South Island** Lower North Island* Upper South Island** Lower North Island* Bay of Plenty Auckland Bay of Plenty Auckland
NURSING HOME BEDS BY REGION HOSPITAL BEDS BY REGION
350 200
300
150 250 71 27
200 27
100 21 21 21 150 71
100 160 258 160 50 21 19 19 66 66 59 19 50 12 38 38 51 30 30 30 30 0 18 55 258 18 19 18 18 0 20012002 2003 2004 20012002 2003 2004
Upper South Island** Lower North Island* Upper South Island** Lower North Island* Bay of Plenty Auckland Bay of Plenty Auckland
* Palmerston North, Masterton and Paraparaumu ** Richmond, Nelson
PAGE .18 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 19
Villages and Care Facilities
31 December 2004
Metlifecare Crestwood Metlifecare Pinesong Metlifecare Bayswater 38 Golf Road, 66 Avonleigh Road, 60 Maranui Street, Mt Maunganui Titirangi, Auckland Titirangi, Auckland • 159 villas • 121 villas • 100 villas • 40 apartments • 14 serviced apartments • 147 apartments • 41 bed nursing home Metlifecare Greenwood Park Metlifecare Powley 10 Welcome Bay Road, Welcome Bay, Tauranga Metlifecare Highlands 135 Connell Street, • 207 villas 49 Aberfeldy Avenue, Blockhouse Bay, Auckland • 15 serviced apartments Highland Park, Auckland • 46 villas • 129 villas • 34 serviced apartments Metlifecare Somervale • 70 serviced apartments • 18 bed nursing home 33 Gloucester Road, Mt Maunganui • 41 bed nursing home • 27 bed hospital • 83 villas • 11 serviced apartments Metlifecare Pakuranga Metlifecare Remuera • 19 bed nursing home 12-30 Edgewater Drive, 7 Saint Vincent • 21 bed hospital Pakuranga, Auckland 7 St Vincent Avenue, • 69 villas Remuera, Auckland • 18 serviced apartments • 39 apartments • 60 bed nursing home
Metlifecare Palmerston North (50% owned) Grey and Carroll Streets, Palmerston North • 49 villas • 50 serviced apartments • 18 bed nursing home • 20 bed hospital
Metlifecare Wairarapa 140 Chapel Street, Masterton • 48 villas • 25 serviced apartments • 26 bed nursing home • 16 bed hospital
Metlifecare Coastal Villas Spencer Russell Drive off Rimu Road, Paraparaumu • 122 villas • 31 serviced apartments • 7 bed nursing home • 23 bed hospital
Metlifecare Oakwoods 357 Lower Queen Street, Richmond, Nelson • 92 villas • 49 serviced apartments • 18 bed nursing home Care facility bed numbers above include licensed nursing home and hospital beds available. • 30 bed hospital
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .19 332017 AR 3/30/05 9:42 AM Page 20
Trend Statement Years ended 31 December
FINANCIAL HIGHLIGHTS ($M)
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Gross revenues 25.9 34.7 46.8 63.3 69.2 86.0 82.2 100.7 110.1 108.9 Operating surplus1 (EBIT) 2.6 5.0 8.1 9.9 6.4 8.1 10.7 13.1 14.3 19.4 Net surplus for the year 0.5 3.3 6.4 8.5 1.5 0.5 7.2 10.4 14.2 17.5 Cash flow from operations 3.9 6.6 9.5 15.2 12.5 25.3 22.5 27.6 35.8 27.8 Shareholders’ equity (excluding minority interest) 32.3 42.4 59.4 73.2 73.6 69.5 94.3 112.0 148.8 192.6 Net debt2 13.6 24.3 29.8 57.1 81.7 72.4 50.7 50.3 32.8 63.2 Property revaluations (taken to reserves) 5.0 8.3 17.0 8.4 7.7 6.0 5.9 13.6 40.0 51.9 Total assets 69.5 82.6 105.8 152.2 179.8 161.2 166.2 184.6 200.6 277.4
FINANCIAL STATISTICS
Return on average shareholders’ equity 1.8% 8.9% 12.5% 12.8% 2.1% 0.7% 8.8% 10.1% 10.9% 10.2% Dividends per share 1.0c 3.0c 5.0c 6.0c 1.5c – – – 5.0c 5.5c Gearing (debt to debt + equity) 29.6% 36.5% 33.4% 43.8% 52.2% 50.6% 34.4% 30.6% 17.8% 24.2%
SALES AND RESALES3
Number of sales 60 57 83 133 88 119 72 111 106 74 Number of resales 63 103 112 110 138 149 177 193 222 190 Total 123 160 195 243 226 268 249 304 328 264
Notes: 1 Operating surplus before interest, tax, unusual items and minority interest. 2 Interest bearing. 3 Including Metlifecare Palmerston North (50% owned). 4 Comparative numbers have been restated to conform to the current year disclosure.
PAGE .20 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 21
Financial Statements 22 Statements of Financial Performance For the year ended 31 December 2004 23 Statements of Movements in Equity
24 Statements of Financial Position
26 Statements of Cash Flows
29 Accounting Policies and Notes to the Financial Statements
48 Auditors’ Report
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .21 332017 AR 3/30/05 9:42 AM Page 22
Statements of Financial Performance For the year ended 31 December 2004
GROUP COMPANY 2004 2003 2004 2003 NOTE $000 $000 $000 $000
OPERATING REVENUES 2 108,943 110,147 8,939 9,063
OPERATING SURPLUS/(DEFICIT) BEFORE TAXATION 3 17,964 14,590 (530) 462 Taxation Expense 4 – – – –
SURPLUS/(DEFICIT) AFTER TAXATION 17,964 14,590 (530) 462 Minority Interest in Surplus 6 (493) (426) – –
NET SURPLUS/(DEFICIT) ATTRIBUTABLE TO THE SHAREHOLDERS’ OF THE PARENT COMPANY 17,471 14,164 (530) 462
Operating Revenues comprises: Operating Revenues from Continuing Activities 108,943 109,566 8,939 9,063 Operating Revenues from Discontinued Activities – 581 – –
Operating Revenues 108,943 110,147 8,939 9,063
Operating Surplus/(Deficit) after taxation comprises: Operating Surplus/(Deficit) from Continuing Activities 17,964 14,759 (530) 462 Operating Surplus/(Deficit) from Discontinued Activities – (169) – –
Surplus/(Deficit) after Taxation 17,964 14,590 (530) 462
The accompanying notes form an integral part of these financial statements.
PAGE .22 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 23
Statements of Movement in Equity For the year ended 31 December 2004
GROUP COMPANY 2004 2003 2004 2003 NOTE $000 $000 $000 $000
EQUITY AT BEGINNING OF THE YEAR 151,596 113,932 66,393 65,827
Net Surplus/(Deficit) 17,471 14,164 (530) 462 Revaluation of Investment Properties 6 51,858 39,972 – – Realised Surplus transferred to Statement of Financial Performance 6 (17,462) (14,519) – – Revaluation of Amounts Payable to Residents under terms of Occupation Licences 6 (1,063) (2,379) – – Sale of Net Assets of Subsidiary Companies – (537) Write down of previous revaluation of care facilities 6 (885) – – –
Total Recognised Revenues and Expenses 49,919 36,701 (530) 462
Dividend Paid 6 (6,058) – (6,058) – Increase in Minority Interest 6 2,548 859 – – Increase in Share Capital – 104 – 104
EQUITY AT END OF THE YEAR 198,005 151,596 59,805 66,393
The accompanying notes form an integral part of these financial statements.
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .23 332017 AR 3/30/05 9:42 AM Page 24
Statements of Financial Position As at 31 December 2004
GROUP COMPANY 2004 2003 2004 2003 NOTE $000 $000 $000 $000 EQUITY Share Capital 5 43,514 43,514 43,514 43,514 Reserves 6 86,808 55,195 – – Accumulated Surplus 6 62,302 50,054 16,291 22,879
Parent Shareholders’ Equity 192,624 148,763 59,805 66,393 Minority Interest 6 5,381 2,833 – –
Total Equity 198,005 151,596 59,805 66,393
NON CURRENT LIABILITIES Bank Loans (Secured) 7 59,500 32,400 59,000 32,000 Other Loans 11 4,325 665 – – Refundable Occupation Licences 12 2,022 2,469 – – Amortising Liabilities to Residents 10 306 784 – – Finance Leases (Secured) 8 127 151 – –
Total Non Current Liabilities 66,280 36,469 59,000 32,000
CURRENT LIABILITIES Creditors and Accruals 9 8,031 7,257 3,053 2,619 Bank Overdraft – 111 – 835 Bank Loans (Secured) 7 – 300 – – Other Loans 11 465 – – – Finance Leases (Secured) 8 21 20 – – Refundable Occupation Licences 12 4,276 4,707 – – Amortising Liabilities to Residents 10 328 158 – –
Total Current Liabilities 13,121 12,553 3,053 3,454
Total Equity and Liabilities 277,406 200,618 121,858 101,847
The accompanying notes form an integral part of these financial statements.
PAGE .24 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 25
GROUP COMPANY 2004 2003 2004 2003 NOTE $000 $000 $000 $000 NON CURRENT ASSETS Investment Properties 13 149,361 98,400 – – Property, Plant and Equipment 14 32,442 33,507 633 848 Investment in Subsidiaries 15 – – 26,579 24,579 Amounts Due from Subsidiary Companies 16 – – 93,793 75,134 Other Non Current Assets 17 38,396 30,868 432 741
Total Non Current Assets 220,199 162,775 121,437 101,302
CURRENT ASSETS Cash at Bank 646 – 210 – Inventory 18 38,365 24,634 – – Debtors and Prepayments 19 18,196 13,209 211 545
Total Current Assets 57,207 37,843 421 545
Total Assets 277,406 200,618 121,858 101,847
Peter W Fitzsimmons OBE Robert W Bryden Chairman Director 21 February 2005 21 February 2005
The accompanying notes form an integral part of these financial statements.
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .25 332017 AR 3/30/05 9:42 AM Page 26
Statements of Cash Flows For the year ended 31 December 2004
GROUP COMPANY 2004 2003 2004 2003 NOTE $000 $000 $000 $000
CASH FLOWS FROM OPERATING ACTIVITIES Cash was provided from: Receipts from Residents 96,157 108,193 – – Interest Received 42 47 5,697 5,312 Management Fees Received – – 3,241 3,748
96,199 108,240 8,938 9,060
Cash was applied to: Payments to Residents (33,739) (37,546) – – Payments to Suppliers (17,401) (17,883) (3,030) (2,296) Payments to Employees (15,975) (15,583) (2,940) (3,052) Taxation Paid – – – – Interest Paid (1,263) (1,478) (2,485) (2,606)
(68,378) (72,490) (8,455) (7,954)
Net cash flow from operating activities 27,821 35,750 483 1,106
CASH FLOWS FROM INVESTING ACTIVITIES Cash was provided from: Sale of Property, Plant and Equipment 21 270 19 62 Sale of Investment Properties – 693 – – Sale of Net Assets of Subsidiaries 15 – 10,508 – – Repayment of Advances made to Subsidiaries – – – 17,324
21 11,471 19 17,386
Cash was applied to: Purchase and Development of Property, Plant and Equipment (1,108) (1,180) (132) (642) Capitalised Interest (1,698) (1,215) – – Purchase and Development of Investment Properties (49,210) (27,111) – – Increase in Subsidiaries Equity – – (2,000) (1,500) Advances to Subsidiaries – – (18,331) –
(52,016) (29,506) (20,463) (2,142)
Net cash flow from investing activities (51,995) (18,035) (20,444) 15,244
The accompanying notes form an integral part of these financial statements.
PAGE .26 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 27
Statement of Cash Flows (continued) For the year ended 31 December 2004
GROUP COMPANY 2004 2003 2004 2003 NOTE $000 $000 $000 $000
CASH FLOWS FROM FINANCING ACTIVITIES Cash was provided from: Bank Loans 26,800 – 27,000 – Other Loans 4,325 – – – Repayment of Advances to Shareholder 64 – 64 –
31,189 – 27,064 –
Cash was applied to: Repayment of Bank Loans – (17,900) – (17,000) Repayment of Advances from Shareholder 11 (200) (250) – – Dividend (6,058) – (6,058) –
(6,258) (18,150) (6,058) (17,000)
Net cash flow from financing activities 24,931 (18,150) 21,006 (17,000)
Net increase/(decrease) in cash held 757 (435) 1,045 (650) Add cash at the beginning of the year (111) 324 (835) (185)
Cash at the end of the year 646 (111) 210 (835)
Cash comprises cash balances held with banks in New Zealand: Cash at Bank 809 836 210 – Bank Overdraft (163) (947) – (835)
646 (111) 210 (835)
The accompanying notes form an integral part of these financial statements.
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .27 332017 AR 3/30/05 9:42 AM Page 28
Statements of Cash Flows (continued) For the year ended 31 December 2004
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000 RECONCILIATION OF NET SURPLUS/(DEFICIT) WITH NET CASH FLOW FROM OPERATING ACTIVITIES
Net Surplus/(Deficit) 17,471 14,164 (530) 462 Add back development cost of sales (Investing Activity) 21,283 24,567 – – Repurchases (669) (744) – –
38,085 37,987 (530) 462 Non–cash items Depreciation 1,816 2,023 321 304 Writeback of Intercompany Receivable – – – (630) Goodwill Amortisation 89 89 – – Minority Interest 493 426 – – Net (Surplus)/Deficit on Sale of Property, Plant and Equipment 9 (23) 8 (3) Net Deficit on Sale of Net Assets of Subsidiaries – 193 – –
2,407 2,708 329 (329)
Movement in Balance Sheet Items relating to Operating Activities Debtors and Prepayments (4,943) 1,334 401 (212) Creditors and Accruals 774 (2,976) 434 1,355 Amortising Liabilities to Residents (308) (281) – – Other Non Current Assets (7,725) (4,190) – – Creditors and Accruals Movement Relating to Investing Activities (469) 1,168 (151) (170)
(12,671) (4,945) 684 973
Net cash flow from operating activities 27,821 35,750 483 1,106
The accompanying notes form an integral part of these financial statements.
PAGE .28 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 29
Accounting Policies and Notes to the Financial Statements For the year ended 31 December 2004
1. STATEMENT OF ACCOUNTING POLICIES Reporting Entity The financial statements for the “Company” are for Metlifecare Limited as a separate legal entity.
The consolidated statements for the “Group” are for the economic entity comprising Metlifecare Limited and its subsidiaries.
Statutory Base Metlifecare Limited is a Company registered under the Companies Act 1993 and is listed on the New Zealand Stock Exchange. Metlifecare Limited is an issuer in terms of the Securities Act 1978. These financial statements have been prepared under the requirements of the Companies Act 1993 and the Financial Reporting Act 1993.
Measurement Base The measurement base adopted is that of historical cost adjusted by the revaluation of Investment Properties and Care Facilities. During the year ended 31 December 2002 the Group ceased revaluing the care facilities and adopted historic cost principles.
Accounting Policies The financial statements are prepared in accordance with New Zealand generally accepted accounting practice. The accounting policies that materially affect the measurement of financial performance, financial position and cash flow are set out below.
a) Basis of Consolidation The consolidated financial statements are prepared from the financial statements of Metlifecare Limited and its subsidiaries, being companies that Metlifecare Limited controls directly, indirectly or beneficially.
The purchase method of consolidation has been used in respect of all subsidiaries. All material transactions between Group companies are eliminated on consolidation.
b) Revenue Recognition i) Nursing Home, Hospital and Service Fees and Village Outgoings Nursing Home, Hospital and Service Fees and Village Outgoings are recognised on an accruals basis.
ii) Occupation Licences - Sale of New Units and Serviced Apartments Revenues from initial sales of Occupation Licences for new units and serviced apartments are recognised when the Group has an unconditional sale contract and practical completion has been achieved. Surpluses and deficits from the sale of Occupation Licences are recognised as the difference between the Occupation Licence revenue and those costs directly related to developing the new units (including the cost of construction, land cost allocation and capitalised interest).
iii) Occupation Licences - Resale of Units and Serviced Apartments Revenues from resales of Occupation Licences for existing units and serviced apartments are recognised when the Group has an unconditional resale contract. Surpluses and deficits from the resale of Occupation Licences are recognised as the difference between the Occupation Licence revenue and the cost of repurchasing occupancy rights (including the cost of the Group’s obligation for refurbishment costs, where applicable).
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .29 332017 AR 3/30/05 9:42 AM Page 30
Accounting Policies and Notes to the Financial Statements (continued) For the year ended 31 December 2004
iv) Lifecare Contributions Lifecare Contributions are amortised to the Statement of Financial Performance over the period set out in the Lifecare Agreement (generally 48 months) while the resident is in occupation, such that the recorded liability at balance date reflects the refundable or unamortised portion of the contribution. New documentation for sales and resales of Occupation Licences was introduced in the first half of 1996 which replaced Lifecare with Amenities Contribution.
The non-current and current portions of the liability are stated as determined by an independent actuary.
v) Amenities Contribution An Amenities Contribution is payable by the residents of the Group’s units and serviced apartments for the right to share in the use and enjoyment of the Common Facilities. The Amenities Contribution accrues monthly and is taken to income at the rate for units of 5.50% p.a. or 5.75% p.a. over four years to a maximum of 22% or 23% of the value of the Occupation Licence, and for serviced apartments at the rate of 8.33% p.a. over three years to a maximum of 25% of the value of the Occupation Licence.
The Amenities Contribution is payable by the resident at the time of repayment by the Group to the resident of the Occupation Licence.
The non current and current portions of the asset are stated as determined by an independent actuary.
vi) Other Revenues At Metlifecare Bayswater acquired in 1998, 20% of the amount paid by the resident on entering the village is amortised to the Statement of Financial Performance monthly over 10 years. Should the resident leave during this period, the unamortised portion is refundable.
Standard Metlifecare documentation was introduced post acquisition for new sales and resales and the Amenities Contribution principles are applied. c) Investment Properties Investment Properties include freehold land and buildings intended to be held for the long term relating to units, serviced apartments, the common facilities (Community Assets) and future developments (Development Properties). This freehold land and buildings is provided for use by residents of units and serviced apartments which are occupied by residents under various Occupation Licences. Group owned equipment and furnishings for the use of residents under the terms of their Occupation Licences are also included under this heading.
Investment Properties are initially recorded at cost whilst being constructed or developed and are included in Inventory. On completion of a construction or development project, individual units and serviced apartments are sold, at which point they are included in Investment Properties.
Sold Units and Serviced Apartments are subsequently revalued on an annual basis and restated to market values as determined by an independent registered valuer. Development Properties represents land held for development and is recorded at cost including holding costs and costs associated in bringing the land to its current condition. Development Properties expected to be developed during the next 12 months are included in Inventory. Comparative balances have been restated to conform to the current year disclosure outlined above.
PAGE .30 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 31
Interest incurred during the period that is required to complete and prepare the freehold land and buildings for its intended use is capitalised as part of the total cost.
Investment Properties are not depreciated. Any surplus or deficit determined by the annual revaluation is taken directly to Reserves. Investment Properties are stated in the Statement of Financial Position net of the refundable Occupation Licences which are not firm monetary obligations to repurchase and repay. d) Inventory The costs of units and apartments under construction or completed units and apartments awaiting sale
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .31 332017 AR 3/30/05 9:42 AM Page 32
Accounting Policies and Notes to the Financial Statements (continued) For the year ended 31 December 2004
i) Trade Debtors Trade Debtors are valued at expected realisable value after writing off any debts considered uncollectable and providing for any debts considered doubtful.
j) Investments Investments in Subsidiaries are stated at cost in the parent Company financial statements.
k) Impairment Annually, the Company’s directors assess the carrying value of each asset. Where the estimated recoverable amount of the asset is less than its carrying amount, the asset is written down. The impairment loss is recognised against any previous revaluation surplus with the excess recognised in the Statement of Financial Performance.
l) Taxation The taxation expense shown in the Statement of Financial Performance includes both current and deferred taxation, and is calculated after deducting all available allowances. Deferred taxation, calculated using the liability method on a partial basis, is provided to cover future taxation benefits and liabilities arising from the reversal of timing differences between deductions under the Group’s accounting policies and those allowed under income tax legislation. Debit balances in the deferred taxation account are recognised only to the extent that there is virtual certainty of their recovery in future periods.
m) Long Term Maintenance Provision The terms of the Occupation Licences provide that the Company will maintain the land and buildings of each village. Residents pay for the long term maintenance through the weekly occupation charge at a rate determined from the long term maintenance plan.
n) Lease Commitments Finance Leases
Assets under finance leases are recognised as non-current assets in the Statement of Financial Position. Leased assets are recognised initially at the lower of the present value of minimum lease payments or their fair value. A corresponding liability is established and each lease payment is allocated between the liability and interest expense. Leased assets are depreciated on the same basis as equivalent plant, furniture and equipment.
Operating Leases
Leases that are not finance leases are classified as operating leases. Operating leases are recognised as an expense in the periods the amounts are payable.
o) Goodwill Goodwill represents the excess of the purchase consideration over the fair value of net tangible and identifiable intangible assets at the time of acquisition of a business.
Goodwill is amortised by the straight line method over the period of 8 years during which the expected benefits will be received.
p) Goods and Services Tax (GST) The Statement of Financial Performance and Statement of Cash Flows have been prepared so that all components are stated exclusive of GST. All items in the Statement of Financial Position are stated net of GST, with the exception of receivables and payables, which include GST invoiced.
PAGE .32 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 33
q) Share Issue Costs Costs associated with the issue of shares are recognised as a reduction of the amount collected per share.
r) Financial Instruments Financial Instruments carried in the Statement of Financial Position include cash and bank balances, investments, receivables, trade creditors and borrowings. The particular recognition methods are disclosed in individual policy statements associated with each item.
The Group uses derivative financial instruments within predetermined policies and limits in order to reduce its exposure to fluctuations in interest rates. Derivative financial instruments that are designated as hedges of specific items are recognised on the same basis as the underlying hedge items. The net differential paid or received on interest swaps and options is recognised as a component of interest expense.
The Group does not engage in speculative transactions or hold derivative financial instruments for trading purposes.
s) Statement of Cash Flows The following are the definitions of the terms used in the Statement of Cash Flows:
i) Operating activities include all transactions and other events that are not investing or financing activities. Included within cash flows from operating activities is monies received from residents in relation to the sale and resale of Occupation Licences, Amenities Revenue and Village Operating and Other Revenue.
ii) Investing activities are those activities relating to the acquisition, holding and disposal of property, plant and equipment and of investments. Investments can include securities not falling within the definition of cash.
iii) Financing activities are those activities that result in changes in the size and composition of the capital structure. This includes both equity and debt not falling within the definition of cash.
Dividends paid in relation to the capital structure are included in financing activities.
iv) Cash is considered to be cash on hand and current accounts in banks, net of bank overdrafts.
t) Changes in Accounting Policies There have been no changes in accounting policies during the year.
2. OPERATING REVENUES
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
Sales Revenue 26,094 28,996 – – Resales Revenue 45,918 45,999 – – Amenities Revenue 11,295 9,684 – – Village Operating and Other Revenue 25,636 25,468 8,939 9,063
108,943 110,147 8,939 9,063
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .33 332017 AR 3/30/05 9:42 AM Page 34
Accounting Policies and Notes to the Financial Statements (continued) For the year ended 31 December 2004
3. OPERATING SURPLUS/(DEFICIT) BEFORE TAXATION
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
Operating Surplus/(Deficit) before Taxation is stated: After Charging/(Crediting): Continuing Activities Depreciation – Buildings 486 502 – – – Plant, Furniture & Equipment 1,257 1,428 321 304 – Motor Vehicles 73 93 – – Total depreciation 1,816 2,023 321 304
Audit fees 146 86 43 16 Other fees paid to the auditors – Taxation Services 110 5 110 5 – Prospectus Reissue Opinions 29 – – – Change in doubtful debts provision – provided 26 6 – – Directors’ fees – parent 312 170 292 170 – 50% subsidiary 15 18 – – Goodwill amortisation 89 89 – – Rent and operating lease costs 324 344 255 293 Realised Surplus transferred to Statement of Financial Performance (17,462) (14,519) – – Interest – bank loans 2,727 2,476 2,693 2,408 – bank and other short term borrowings 67 70 50 55 – finance leases 14 1 – – – advances to subsidiaries – – (5,688) (5,304) – capitalised (1,698) (1,215) – – – received (78) (87) (10) (11) – facility fees 423 377 414 366 Restructuring costs – – – 4 Management fees – – (3,218) (3,218) Loss/(Gain) on sale of property, plant and equipment 9 (23) 8 (3) Life insurance proceeds – Key Man – (500) – (500) Indirect taxation refunds – (1,579) – – Write–back of intercompany receivable – – – (630)
After Charging/(Crediting): Discontinued Activities Change in doubtful debts provision – provided – 17 – – Rent and operating lease costs – 1 – – Interest received – (3) – – Loss on disposal of discontinued operations – 193 – –
PAGE .34 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 35
4. TAXATION
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
a) Taxation Expense is calculated as follows: Operating Surplus/(Deficit) before Taxation 17,964 14,590 (530) 462
Taxation at 33% 5,928 4,814 (175) 152
Adjusted by the taxation effect of: Revenue not liable for taxation – (133) – – Timing differences not previously brought to account (1,673) (1,587) 106 31 Expenditure not deductible for taxation 29 29 – – Construction costs not deductible for taxation 7,079 7,223 – – Repurchase costs not deductible for taxation 8,677 9,134 – – Repurchase obligations deductible (23,764) (24,748) – – Taxation losses carried forward not recognised 3,724 5,268 69 (183)
Taxation Expense – – – –
The Taxation Expense is represented by: – Current taxation – – – – – Deferred taxation – – – –
– – – –
b) Available Taxation Losses Unrecognised taxation losses carried forward and available to be set off against future assessable income 92,700 125,586 5,241 5,031
Taxation Effect at 33% 30,591 41,443 1,729 1,660
The future benefit of taxation losses not recognised is subject to the requirements of Income Tax Legislation being met. With changes in the minority shareholding, gross unrecognised taxation losses carried forward and available to be offset against future accessible income of $44.7 million were forfeited in the year as a result of the loss of shareholder continuity through the period in which the losses arose and remained unutilised.
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .35 332017 AR 3/30/05 9:42 AM Page 36
Accounting Policies and Notes to the Financial Statements (continued) For the year ended 31 December 2004
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
c) Unrecognised Deferred Taxation Liability: Timing Differences arising from normal operations 34.2 30.6 1.7 1.5 Freehold land and buildings 47.7 37.3 – – Occupation Licences 174.6 150.3 – –
Gross Unrecognised Taxation Liability 256.5 218.2 1.7 1.5
Taxation at 33% 84.6 72.0 0.6 0.5
Under the partial basis the deferred taxation liability, in respect of timing differences arising from normal operations, has not been recognised in the Statement of Financial Position as it is able to be offset against the available tax losses disclosed above.
The deferred taxation liability in respect of Freehold Land and Buildings may only arise if these assets were sold at or higher than their original cost. This liability has not been recognised on the basis that the company has no intention of disposing of these assets in the foreseeable future.
The deferred taxation liability in relation to Occupation Licences has not been recognised on the basis that it is not expected to reverse and crystallise a tax liability in the foreseeable future to the extent that the current tax treatment and Group activities remain unchanged.
5. SHARE CAPITAL
GROUP & COMPANY 2004 2003 $000 $000
Issued and Fully Paid Capital Balance at beginning of year 43,514 43,410 Shares issued on exercise of options – 104
Balance at end of year 43,514 43,514
There were 86,548,541 shares on issue at balance date (2003: 86,548,541). On 9 May 2003, 100,000 shares were issued at $1.04 per share under the Executive Share Option Plan.
Under the Executive Share Option Plan the following options to subscribe to the Company’s ordinary shares are outstanding.
Number of Options Number of Options Exercise Expiry Date December 2004 December 2003 Price 300,000 400,000 $1.24 23 May 2006 200,000 200,000 $1.20 1 January 2006 200,000 200,000 $1.20 1 January 2007 100,000 100,000 $1.26 23 May 2007 100,000 100,000 $1.04 1 January 2007
PAGE .36 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 37
6. RESERVES
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
Investment Property Revaluation Reserve Balance at 1 January 51,403 28,866 – – Revaluations during the year 51,858 39,972 – – Realised Surplus transferred to Statement of Financial Performance (17,462) (14,519) – – Revaluation of Amounts Payable to Residents under terms of Licences to Occupy (1,063) (2,379) – – Sale of Net Assets of Subsidiaries – (537) – –
Balance at 31 December 84,736 51,403 – –
Property, Plant and Equipment Revaluation Reserve Balance at 1 January 2,957 5,539 – – Write down of previous revaluation of care facilities (885) – – – Transfer to Accumulated Surplus on Sale of Net Assets of Subsidiaries – (2,582) – –
Balance at 31 December 2,072 2,957 – –
Other Reserves Balance at beginning and end of year 835 835 – – Transfer to Accumulated Surplus (835) – – –
Total Reserves 86,808 55,195 – –
Accumulated Surplus Balance at 1 January 50,054 33,308 22,879 22,417 Net surplus/(deficit) 17,471 14,164 (530) 462 Dividend Paid (6,058) – (6,058) – Transfer from Other Reserves 835 – – – Transfer from Property, Plant and Equipment Reserve on Sale of Net Assets of Subsidiaries – 2,582 – –
Balance at 31 December 62,302 50,054 16,291 22,879
Minority Interests Balance at 1 January 2,833 1,974 Share of surplus in subsidiary 493 426 Share of movement in Investment Property during the year 2,055 433
Balance at 31 December 5,381 2,833
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .37 332017 AR 3/30/05 9:42 AM Page 38
Accounting Policies and Notes to the Financial Statements (continued) For the year ended 31 December 2004
7. BANK LOANS
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
Total Bank Loans – Floating Rate 59,500 32,700 59,000 32,000 Less: Current Portion – (300) – –
Non Current Portion 59,500 32,400 59,000 32,000
The Non Current Portion falls due for repayment as follows: – One to Two Years – – – – – Two to Five Years 59,500 32,400 59,000 32,000
Total Non Current Portion 59,500 32,400 59,000 32,000
The loans, subject to a first priority by the Scheme Supervisors as described in Note 13, are secured by a first and only registered mortgage over certain of the Group’s freehold properties and a first and only registered debenture over the assets and business undertakings of certain Group companies.
In addition, certain operating subsidiaries have given unlimited guarantees to the Group’s bankers in respect of the borrowings of Metlifecare Limited. Metlifecare Limited has issued a letter of support for the bank borrowings of the 50% owned subsidiary Metlifecare Palmerston North Limited. Actual borrowings at balance date were $500,000 (2003: $700,000).
A Negative Pledge Deed has been entered into by certain subsidiaries in favour of the Banks in which the subsidiaries have undertaken not to create or permit to exist any mortgage or other charge over their assets or revenues without obtaining the prior written consent of the Group’s bankers.
Interest on loans and advances is charged using the Prime Committed Cash Advance Facility rate plus a margin.
Interest rates applicable in the year ranged from 5.82% to 7.57% per annum (2003: 5.65% to 6.48% per annum).
The bank overdraft is secured in the same manner as the bank loans. Interest is charged at the wholesale prime overdraft rate for any overdraft facilities utilised.
At 31 December 2004, the Company had $82m of committed bank facilities of which $23m was undrawn. (2003 : $62m; $29.2m). The bank facilities mature 30 July 2007.
PAGE .38 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 39
8. LEASE COMMITMENTS
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
a) Finance Leases Finance Lease commitments are payable as follows: - Within One Year 21 20 – – - One to Two Years 23 24 – – – Two to Five Years 104 127 – –
148 171 – –
Finance leases are secured over the assets to which they relate (refer Note 14). The finance rate is 8.03% to 8.08%.
b) Non Cancellable Operating Leases Non cancellable operating lease commitments are payable as follows: – Within One Year 248 102 248 102 – One to Two Years 247 208 247 208 – Two to Five Years 594 738 594 738
1,089 1,048 1,089 1,048
9. CREDITORS AND ACCRUALS
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
Trade Creditors 2,271 2,420 1,798 1,917 Sundry Creditors and Accruals 4,284 3,443 986 368 Employee Entitlements 1,476 1,394 269 334
8,031 7,257 3,053 2,619
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .39 332017 AR 3/30/05 9:42 AM Page 40
Accounting Policies and Notes to the Financial Statements (continued) For the year ended 31 December 2004
10. AMORTISING LIABILITIES TO RESIDENTS
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
The liabilities amortise as follows: (refer Notes 1 (b) (iv) and (vi)) Current 328 158 – – Non Current 306 784 – –
634 942 – –
The non current and current portions of the significant Amortising Liabilities to Residents balances are stated as determined by an independent actuary, Mr P. Davies, of Davies Financial & Actuarial Limited.
11. OTHER LOANS a) Current
Other Loans represent a shareholder advance from The New Zealand Guardian Trust Company Limited in its capacity as trustee for The Palmerston North Maori Reserves to the 50% owned subsidiary Metlifecare Palmerston North Limited. This loan is unsecured, interest free and repayable on demand and has been classified as a Current Liability as it is expected to be repaid within the next 12 months. In the prior year, this was classified as a Non Current Liability.
During the year $200,000 (2003: $250,000) was repaid.
b) Non Current
The loan is secured by way of mortgage over the property at 142 Shakespeare Road, Takapuna. Interest is payable 6 monthly in arrears at 6.5% p.a. The loan is repayable at the earlier date of November 2008 or pro rata on sale of the units of the development.
12. REFUNDABLE OCCUPATION LICENCES
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
Amounts payable to residents where there is no firm monetary obligation on the Group to repurchase until resale have been deducted from Investment Properties (Refer Note 13) and may be analysed as follows: Repayable on resale only 354,962 312,848 – – Repayable under options to repurchase 9,962 11,776 – – 364,924 324,624 – –
PAGE .40 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 41
Amounts repayable to residents under firm monetary obligation repurchase arrangements within 12 months of the resident leaving the village are shown separately as a liability in the Statement of Financial Position. The non current and current portions of the liability are stated as determined by an independent actuary, Mr P. Davies, of Davies Financial & Actuarial Limited as follows:
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
Current 4,276 4,707 – – Non Current 2,022 2,469 – –
6,298 7,176 – –
At balance date the Group had 1,710 allotted securities (2003: 1,642) with a carrying value of $371,222,213 (2003: $331,800,657).
13. INVESTMENT PROPERTIES
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
Completed Facilities at net current values 497,514 421,719 – –
Development Properties 16,771 1,305 – –
Less: Refundable Occupation Licences (Refer Note 12) (364,924) (324,624) – –
149,361 98,400 – -
Completed facilities at net current values (including community facilities at replacement cost) are based on an independent valuation report by CB Richard Ellis as at 31 December 2004. Development Properties represents land held for development and is recorded at cost including holding costs and costs associated in bringing the land to its current condition. Development Properties expected to be developed during the next 12 months are included in Inventory (refer Note 18) External finance costs capitalised during the year amounted to $1,226,938 (2003: $982,307). Memoranda of Encumbrance in favour of the Scheme Supervisors of the village owning subsidiary companies are registered as a first charge over the freehold land of those companies to protect the interests of the residents in the event of failure by the subsidiary companies as Managers of the village schemes to observe obligations under the Deeds of Participation, Occupation Licences and Lifecare Agreements. In relation to Metlifecare Greenwood Park Limited freehold land is subject to a first registered mortgage charge to the Scheme Supervisor, Covenant Trustee Company Limited to secure the Amounts Payable to Residents under Repurchase Arrangements. In relation to Metlifecare Powley Limited a first mortgage in favour of the Scheme Supervisor is registered over the freehold land of the Company to protect the interests of residents in the event of failure by Metlifecare Powley Limited as Managers of the Village Scheme to observe obligations under the Deed of Participation and Occupation Licence Agreements.
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .41 332017 AR 3/30/05 9:42 AM Page 42
Accounting Policies and Notes to the Financial Statements (continued) For the year ended 31 December 2004
14. PROPERTY, PLANT AND EQUIPMENT
AT AT ACCUMULATED NET BOOK COST VALUATION DEPRECIATION VALUE $000 $000 $000 $000 2004 Group Freehold Land 8,405 3,570 – 11,975 Freehold Buildings 3,352 15,313 1,431 17,234 Plant, Furniture and Equipment 14,592 – 11,526 3,066 Motor Vehicles 959 – 792 167
27,308 18,883 13,749 32,442
Company Plant, Furniture and Equipment 1,818 – 1,185 633
1,818 – 1,185 633 2003 Group Freehold Land 7,461 3,570 – 11,031 Freehold Buildings 3,315 16,168 940 18,543 Plant, Furniture and Equipment 14,614 – 10,911 3,703 Motor Vehicles 1,015 – 785 230
26,405 19,738 12,636 33,507
Company Plant, Furniture and Equipment 2,332 – 1,484 848
2,332 – 1,484 848
The majority of land and buildings are carried on the basis off a valuation determined by an independent registered valuer on 31 December 2001. During the year ended December 2002 the Group ceased revaluing the care facilities and adopted historic cost principles.
Property, Plant and Equipment subject to finance leases included in Group Property, Plant and Equipment above:
2004 Plant, Furniture and equipment –– –– Motor Vehicles 176 – 47 129
176 – 47 129 2003 Plant, Furniture and Equipment 11 – 7 4 Motor Vehicles 176 – 13 163
187 – 20 167
External finance costs of $470,787 (2003: $232,623) were capitalised into Property, Plant and Equipment during the year.
PAGE .42 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 43
15. INVESTMENT IN SUBSIDIARIES
The Company’s investment in subsidiaries comprises shares at cost.
Operating subsidiaries are: Metlifecare Bayswater Limited Metlifecare Coastal Villas Limited Metlifecare Crestwood Limited Metlifecare Greenwood Park Limited Metlifecare Highlands Limited Metlifecare Oakwoods Limited Metlifecare Pakuranga Limited Metlifecare Pinesong Limited Metlifecare Powley Limited Metlifecare Remuera Limited Metlifecare Somervale Limited Metlifecare Wairarapa Limited All these subsidiaries are 100% owned and have balance dates of 31 December.
Metlifecare Palmerston North Limited This subsidiary is 50% owned and has a balance date of 31 December.
Due to high level involvement in the management and funding of operations, the Directors consider it appropriate to account for the 50% owned Metlifecare Palmerston North Limited as a consolidated in-substance subsidiary using the purchase method of consolidation.
The principal activity of each subsidiary is the provision of accommodation and care of the aged through the ownership and management of a retirement village.
On 31 January 2003 the Group disposed of the assets of Metlifecare Epsom Limited. On 28 February 2003 the Group disposed of the assets of Metlifecare Browns Bay Limited. These disposals gave rise to a net gain of $21k to the Group. This included a gain on the disposal of adjoining land at Metlifecare Epsom Limited of $214k which was settled in October 2002.
Summary of the effect of disposal GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
Assets and liabilities disposed of: Property, plant and equipment – 9,118 – – Investment property – 6,215 – – Refundable occupation licences – (5,352) – – Amenities contribution receivable – 793 – – Net current liabilities – (73) – – – 10,701 – – Loss on disposal – 193 – – Cash impact of disposal – 10,508 – –
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .43 332017 AR 3/30/05 9:42 AM Page 44
Accounting Policies and Notes to the Financial Statements (continued) For the year ended 31 December 2004
16. AMOUNTS DUE TO AND FROM SUBSIDIARY COMPANIES
These Loans are unsecured and repayable with a minimum of 12 months notice.
Interest charges are calculated monthly based on the average Prime Committed Cash Advance Facility rates. Interest rates applicable in the year ranged from 5.93% to 6.90% per annum (2003: 5.71% to 6.63% per annum).
Amounts due to subsidiary companies have been classified as Non Current Assets as notice has not been given in relation to these accounts.
17. OTHER NON CURRENTS
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
Loans to Residents 1,818 1,986 - - Amenities Contribution Receivable (Refer Note 1(b)(v)) 36,438 28,545 - - Amount due from 50% owned Subsidiary - - 432 633 Executive Share Purchase Loan - 108 - 108 Goodwill 140 229 - -
38,396 30,868 432 741
Loans to Residents:
This represents Loans to residents which are made at effective interest rates that range from nil per cent to the current bank rate for residential first mortgage loans. At balance date 50% (2003: 55%) of the total Loans had an effective interest rate of nil. These Loans are secured by a right of set off in respect of amounts payable to residents pursuant to the terms of Occupation Licences. Based on occupancy trends, these loans are likely to be repaid on average in 5 years.
Executive Share Purchase Loan:
On 9 May 2003, $104,000 was advanced to the Group’s Chief Executive Officer for the purchase of 100,000 shares at $1.04 per share under the Executive Share Option Plan. The loan is due for repayment on 9 May 2008. Early repayment is permitted. Interest is calculated on a daily basis at an interest rate set at the average of the 90 day bank bill quoted by the Group’s bankers quarterly. The loan is secured by a charge over the shares issued. During the year an amount of $68,622 has been repaid.
PAGE .44 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 45
18. INVENTORY
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
Repurchased Occupation Licences held for resale 3,096 2,509 – – Occupation Licences for completed Units and Serviced Apartments available for sale 15,244 2,143 – –
Total Unallotted Securities 18,340 4,652 – –
Construction Work in progress – Unit and Serviced Apartment 17,690 10,695 – – Development Properties 2,335 9,287 – –
38,365 24,634 – –
At balance date the Group had 58 unallotted securities (2003: 21).
19. DEBTORS AND PREPAYMENTS
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
Trade Debtors 990 981 – – Less: Provision for Doubtful Debts (51) (79) – – Sundry Debtors and Prepayments 1,813 1,576 163 541 Unconditional Sale and Resale Receivables 10,868 6,876 Amenities Contribution Receivable (Refer Note 1(b)(v)) 4,512 3,835 – – Taxation Receivable 20 20 4 4 Executive Share Purchase Loan (Refer Note 17) 44 – 44 –
18,196 13,209 211 545
20. CAPITAL COMMITMENTS
GROUP COMPANY 2004 2003 2004 2003 $000 $000 $000 $000
Estimated capital commitments contracted for at balance date but not provided for 17,586 8,108 – –
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .45 332017 AR 3/30/05 9:42 AM Page 46
Accounting Policies and Notes to the Financial Statements (continued) For the year ended 31 December 2004
21. RELATED PARTY TRANSACTIONS
Metlifecare Limited paid Nil (2003: 21%) of its rental expense for its Support Office premises to IAF Properties NZ Limited of which Mr C.J. Cook is a Director.
Metlifecare Limited paid $56,017 (2003: $7,624) for arranging the new banking facility to Ferrier Hodgson & Co. of which Mr M.P. Stiassny is a Partner.
Further related party transactions are set out in the Interests Register on pages 50 to 53.
22. CONTINGENT GAIN
A claim has been lodged against the principal consultant in respect of a development site for failure to properly administer the remediation requirements relating to the site. Legal advisers to the Group consider it is probable that the claim will be successful however this is subject to completion of legal proceedings. Any gain will be determined by these proceedings.
23. SEGMENT INFORMATION
The Group operates in one industry, the accommodation and care of the aged through the ownership and management of retirement villages. All operations are carried out in New Zealand.
24. FINANCIAL INSTRUMENTS
Exposure to interest rate risk arises in the normal course of the Group’s business. To manage and limit the effects of these financial risks the group operates within the following polices and utilises the following financial instruments.
At balance date the Group and the Company had the following financial assets; cash and bank balances, debtors (trade and sundry), amenities contribution receivable, related party receivables, loans to residents and the following financial liabilities; creditors (trade and sundry), occupation licences, bank loans, other loans, finance leases, related party payables and amortising liabilities to residents.
Management Policy The Group does not enter into derivative financial instruments for trading or speculative purposes.
Credit Risk To the extent that the Group has a receivable from another party there is a credit risk in the event of non-performance by that counterparty. At balance date there are no significant concentrations of credit risk in respect of Debtors. The values attached to each financial asset in the Statement of Financial Position represent the maximum credit risk. Except as disclosed in the Financial Statements, no collateral is held with respect to any financial assets. The group enters into financial instruments with various counterparties in accordance with established limits as to credit rating and dollar limits and does not require collateral or other security to support the financial instruments. In accordance with the established counterparty restrictions, there are no significant concentrations of credit risk in respect of financial instruments.
Fair Value The fair value of all financial instruments recognised in the Statement of Financial Position is their carrying value with the exception of the amenities contribution receivable (note 17), amortising liabilities to residents (note 10) and refundable occupation licences (note 12). These assets and liabilities are settled when residents depart and as such are interrelated. The costs and complexity in establishing the assumptions associated in calculating the fair value for these assets is considered to outweigh the benefits to the readers of the financial statements.
PAGE .46 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:42 AM Page 47
The estimated fair value of the Group’s and Company’s financial instrument compared to their carrying value are as follows:
Group and Company 2004 2003 Fair Carrying Fair Carrying Value Value Value Value
Interest Rate Swaps $118,769 – ($36,054) –
Interest Rate Risk It is the Group’s policy to manage the fixed interest rate component of its debt obligations within the range of 0 to 90 percent of total funding costs. The position in this range is managed depending on the timeframe, underlying interest rate exposure and economic conditions.
The interest rate applicable to the bank overdraft is variable. The interest rates applicable to the bank Loans are variable and are reviewed at each rollover. The Company seeks to obtain the most competitive market rate of interest at all times.
Metlifecare Limited has entered into interest rate swap agreements to reduce the impact of changes in interest rates on its floating rate long term debt. At balance date the Company had the following interest rate swap and option agreements outstanding:
2004 GROUP AND COMPANY Notional Effective Principle Amount Bank Interest Rate Maturity Type $3 million BNZ 6.30% January 2005 Swap $16 million BNZ 6.60% February 2006 Swap $4 million BNZ 6.46% July 2006 Swap $5 million BNZ 6.43% September 2007 Swap $10 million BNZ 6.37% April 2009 Swap $5 million BNZ 6.29% July 2009 Swap $10 million ANZ National 6.64% October 2007 Swap
2003 GROUP AND COMPANY Notional Effective Principle Amount Bank Interest Rate Maturity Type $3 million BNZ 6.27% February 2004 Swap $3 million BNZ 6.30% February 2005 Swap $4 million BNZ 6.23% July 2005 Swap $5 million BNZ 6.24% February 2006 Swap $5 million BNZ 5.79% August 2006 Swap
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .47 332017 AR 3/30/05 9:43 AM Page 48
PricewaterhouseCoopers 188 Quay Street Private Bag 92162 Auckland, New Zealand DX CP24073 Telephone +64 9 355 8000 Facsimile +64 9 355 8001 AUDITORS’ REPORT TO THE SHAREHOLDERS OF METLIFECARE LIMITED
We have audited the financial statements on pages 22 to 47. The financial statements provide information about the past financial performance and cash flows of the Company and Group for the year ended 31 December 2004 and their financial position as at that date. This information is stated in accordance with the accounting policies set out on pages 29 to 33.
Directors’ Responsibilities The Company’s Directors are responsible for the preparation and presentation of the financial statements which give a true and fair view of the financial position of the Company and Group as at 31 December 2004 and their financial performance and cash flows for the year ended on that date.
Auditors’ Responsibilities We are responsible for expressing an independent opinion on the financial statements presented by the Directors and reporting our opinion to you.
Basis of Opinion An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. It also includes assessing:
(a) the significant estimates and judgements made by the Directors in the preparation of the financial statements; and
(b) whether the accounting policies are appropriate to the circumstances of the Company and Group, consistently applied and adequately disclosed.
We conducted our audit in accordance with generally accepted auditing standards in New Zealand. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatements, whether caused by fraud or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
We have no relationship with or interests in the Company or any of its subsidiaries other than in our capacities as auditors, tax advisors and other assurance related services.
Unqualified Opinion We have obtained all the information and explanations we have required.
In our opinion:
(a) proper accounting records have been kept by the Company as far as appears from our examination of those records; and
(b) the financial statements on pages 22 to 47:
(i) comply with generally accepted accounting practice in New Zealand; and
(ii) give a true and fair view of the financial position of the Company and Group as at 31 December 2004 and their financial performance and cash flows for the year ended on that date.
Our audit was completed on 21 February 2005 and our unqualified opinion is expressed as at that date.
Chartered Accountants Auckland 332017 AR 3/30/05 9:43 AM Page 49
Statutory Information 50 Interests Register 54 Other Director Information
54 Other Statutory Information
56 Shareholder Information
58 Directory
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .49 332017 AR 3/30/05 9:43 AM Page 50
Interests Register
a) GENERAL DISCLOSURES
The following Directors of Metlifecare Limited gave general notice of their interests, or cessation of interests, in the following entities, pursuant to section 140(2) of the Companies Act 1993:
Director Entity Nature of Interest R.W. Bryden Todd Capital Limited Director/Officer Todd Communications Limited and various other Director subsidiaries of The Todd Corporation Limited SKY Network Television Limited Independent Newspapers Limited Woosh Wireless Limited Crown Castle Holdings Pty Limited Crown Castle Australia Pty Limited +INL Publishing Limited +eVentures New Zealand Limited (in liquidation) *IndeServe Limited Chairman
C.J. Cook NSI Management Limited through Shareholder Clifford Cook Family Trust and Susanna Cook Family Trust Metlifecare Limited through Private Health Care (NZ) Limited +Renaissance Lifecare PLC +WRV Holdings Limited (owns Waiheke Retirement Village Limited) Metlifecare Palmerston North Limited Director All wholly owned subsidiary companies of Metlifecare Limited +A2 Corporation Limited NSI Management Limited *IAF Properties NZ Limited Private Health Care (NZ) Limited +Renaissance Lifecare PLC +Waiheke Retirement Village Limited +Takrouna Nursing Home Limited Clifford Cook Family Trust Trustee Susanna Cook Family Trust +Clifford James Cook Family Trust
P.W. Fitzsimmons Metlifecare Limited Shareholder (Chairman) ING Life Limited Chairman Metlifecare Palmerston North Limited Director All wholly owned subsidiary companies of Metlifecare Limited The New Zealand Flower and Garden Show Limited Myriad Limited
PAGE .50 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:43 AM Page 51
Director Entity Nature of Interest P.W. Fitzsimmons Lowery Supa Cutters Limited Director Instant Finance Limited *North Shore Domain and North Harbour Chairman/Trustee Stadium Trust +North Shore Hospice Trust Trustee
Dr H. LeGrice Metlifecare Limited Shareholder Resolution Investments Limited Director +Thode Knife and Saw Limited +Bankside Investments Limited *Northern Club Immediate Past President Moorfields Trust Trustee
M.P. Stiassny Metlifecare Limited Shareholder Metrowater Limited Chairman Vector Limited Ferrier Hodgson & Co Partner
B.C. Sutton Todd Communications Limited and Director various other subsidiaries of The Todd Corporation Limited *IndeServe Limited Woosh Wireless Limited SKY Network Television Limited Alternate Director The Todd Corporation Limited Officer
* Interest ceased during the year + New
b) SPECIFIC DISCLOSURES
During the year there were no specific disclosures by the Directors of the Company or any subsidiary of any interests in transactions entered into by the Company or any subsidiary.
c) INDEMNITY AND INSURANCE
In accordance with the Companies Act 1993, Metlifecare Limited has effected insurance and given indemnities to its Directors including Directors of subsidiary companies.
d) USE OF COMPANY INFORMATION
During the year the Board received no notices from Directors of the Company requesting the use of Company information.
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .51 332017 AR 3/30/05 9:43 AM Page 52
Interests Register (continued)
e) DIRECTORS’ SHARE DEALINGS
During the year the Directors named below disclosed to the Board, under section 148 of the Companies Act 1993 and section 19T of the Securities Markets Act 1988, particulars of the following acquisitions or dispositions of relevant interests in ordinary shares in the Company:
Director Nature of Number of Shares Consideration Paid (or Date of Acquisition Relevant Interest Acquired (or Disposed) Received) $ Per Share or Disposal
R.W. Bryden Non-Beneficial (1,600,000) (2.46) 1 September 2004 C.J. Cook Beneficial (1,600,000) (2.46) 1 September 2004 M.P. Stiassny Non-Beneficial (250,000) (2.20) 21 May 2004 B.C. Sutton Non-Beneficial (1,600,000) (2.46) 1 September 2004
f) DIRECTORS’ RELEVANT INTERESTS IN THE COMPANY AS AT 31 DECEMBER 2004
Director Beneficial Non-Beneficial Held By Interest Interest Associated Persons
R.W. Bryden – 21,713,3451 30,215,0262 C.J. Cook 21,713,345 30,215,0261 – P.W. Fitzsimmons 22,748 – – Dr H. LeGrice 186,800 – 1,819,660 M.P. Stiassny – 250,000 – B.C. Sutton – 21,713,3451 30,215,0262
Notes: The same shares may be included in more than one category.
1. Under the terms of a Pre-emptive Agreement, dated 9 November 1999, entered into between each of C.J. Cook, Private Health Care (NZ) Limited and Todd Capital Limited, interests associated with C.J. Cook and Todd Capital Limited granted rights of pre-emption, drag along and carry along provisions in respect of the shares held by each party in the Company. Under the terms of a Joint Venture Agreement, dated 24 September 1999, entered into between each of C.J. Cook, Private Health Care (NZ) Limited and Todd Capital Limited, interests associated with C.J. Cook and Todd Capital Limited agreed to a stand-still arrangement of five years. The Joint Venture Agreement ceased on 24 September 2004.
2. Held by Todd Lifecare Limited. R.W. Bryden is a Director of Todd Capital Limited and other subsidiaries of The Todd Corporation Limited. B.C. Sutton is a Director of subsidiaries of The Todd Corporation Limited.
PAGE .52 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:43 AM Page 53
g) REMUNERATION OF DIRECTORS
Remuneration and other benefits paid to Directors during the year.
Director Directors’ Management Fees Fees and Allowances $$ R.W. Bryden 48,000 C.J. Cook 7,419 300,930 P.W. Fitzsimmons 80,000 Dr H. LeGrice 48,000 M.P. Stiassny 48,000 B.C. Sutton 48,000 279,419 300,930
Remuneration and other benefits paid to Directors of Metlifecare Palmerston North Limited (50% owned subsidiary) during the year.
Director Directors’ Fees $ G.N. Aleksich 5,0001 C.J. Cook 5,0001 P.W. Fitzsimmons 5,000 Dr C.M.A. Love 5,000 Dr R.H.N. Love 5,000 B.F. Mahoney 5,0002 30,000
1. Director’s fees paid to Metlifecare Limited.
2. Director’s fees paid to The New Zealand Guardian Trust Company Limited.
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .53 332017 AR 3/30/05 9:43 AM Page 54
Other Director Information
SUBSIDIARY COMPANY DIRECTORS
The following persons held the office of Director of the Company’s wholly owned subsidiaries during the year. No Director of any wholly owned subsidiary company received any Director’s fees or other benefits as a Director of a subsidiary:
P.W. Fitzsimmons, C.J. Cook, G.N. Aleksich and N.S. MacCulloch
SUBSIDIARIES (WHOLLY OWNED)
Bay of Plenty Retirement Village Limited Metlifecare Papatoetoe Limited Castleburgh Investments Limited Metlifecare Pinesong Limited Metcare Limited Metlifecare Powley Limited Metlifecare Bayswater Limited Metlifecare Remuera Limited Metlifecare Beechworth Limited Metlifecare Somervale Limited Metlifecare Browns Bay Limited Metlifecare Takapuna Limited Metlifecare Coastal Villas Limited (formerly Hazlewood Holdings Limited) Metlifecare Crestwood Limited Metlifecare Wairarapa Limited Metlifecare Epsom Limited Paraparaumu Retirement Village Limited Metlifecare Greenwood Park Limited Provider Care NZ Limited Metlifecare Highlands Limited The Wellington Retirement Village Limited Metlifecare Oakwoods Limited Third Age Care Limited Metlifecare Pakuranga Limited
SUBSIDIARY (50% OWNED)
The following persons held the office of Director of Metlifecare Palmerston North Limited, the Company’s 50% owned subsidiary during the year.
P.W. Fitzsimmons, C.J. Cook, G.N. Aleksich, Dr R.H.N. Love, Dr C.M.A. Love, B.F. Mahoney and N.S. MacCulloch (Alternate Director)
Other Statutory Information
EMPLOYEES’ REMUNERATION OVER $100,000
The number of employees or former employees of the Company or any subsidiary, not being Directors, who received remuneration and other benefits valued at or exceeding $100,000 during the year, are stated below.
Remuneration Number of Employees $100,000 - $110,000 2 $130,000 - $140,000 1 $140,000 - $150,000 1 $180,000 - $190,000 1 $220,000 - $230,000 1 $400,000 - $410,000 1
PAGE .54 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:43 AM Page 55
OFFICERS’ SHARE DEALINGS
During the year the officers named below disclosed to the Board under section 19T of the Securities Markets Act 1988 particulars of the following acquisitions or dispositions of relevant interests in ordinary shares in the Company:
Officer Nature of Number of Shares Consideration Paid (or Date of Acquisition Relevant Interest Acquired (or Disposed) Received) $ Per Share or Disposal
M.M. Gibson* Beneficial (950) (2.25) 20 June 2004 Beneficial (716) (2.24) 20 June 2004 * Resigned 16 June 2004
OFFICERS’ RELEVANT INTERESTS IN THE COMPANY AS AT 31 DECEMBER 2004
Officer Beneficial Held by Interest Associated Persons
G.N. Aleksich 100,000 11,510 R.H.J. Davis 7,000 2,000 K.B. De Suza 15,500 - A. Love 52,082 - J.L. Marchbanks 4,132 - C.T. Moss 1,212 -
OFFICERS’ OPTION HOLDINGS IN THE COMPANY AS AT 31 DECEMBER 2004
Officer Beneficial Interest
G.N. Aleksich 500,000 R.H.J. Davis 100,000 W. Ross 100,000
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .55 332017 AR 3/30/05 9:43 AM Page 56
Shareholder Information as at 18 February 2005
TWENTY LARGEST SHAREHOLDERS
Shareholders Number of Percentage of Issued Fully Paid and Paid Up Ordinary Shares Share Capital
Todd Lifecare Limited 30,215,026 34.91 Private Health Care (NZ) Limited 21,713,345 25.09 The Trustees Executors and Agency Company of New Zealand Limited 9,795,316* 11.32 Citibank Nominees (New Zealand) Limited 3,566,200* 4.12 NZ Superannuation Fund Nominees Limited 2,868,767* 3.31 Resolution Investments Limited 1,680,000 1.94 Premier Nominees Limited Armstrong Jones Property Securities Fund 1,360,000* 1.57 MFL Mutual Fund Limited 1,205,377* 1.39 National Nominees New Zealand Limited 830,329* 0.96 Westpac Nominees (NZ) Limited 761,246* 0.88 Christopher William Flood 485,000 0.56 Hubbard Churcher Trust Management Limited 350,000 0.40 Forsyth Barr Custodians Limited (Resident - 19.5%) 347,116 0.40 Asteron Life Limited 334,399* 0.39 Equity Nominees Limited 300,000 0.35 NZ Guardian Trust Investment Nominees Limited 286,200* 0.33 Mary Louise Stiassny & Michael Peter Stiassny & Brendon James Gibson 250,000 0.29 Macquarie Equities Custodians Limited (A/C 400255) 250,000 0.29 Forbar Custodians Limited (PPM Medium A/C) 225,500 0.26 Hylton LeGrice & Angela Lindsay 186,800 0.22
TOTAL 77,010,621 88.98
* Shareholdings held in New Zealand Central Securities Depository Limited. Total holdings in New Zealand Central Securities Depository Limited were 21,253,505 (24.56%).
PAGE .56 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:43 AM Page 57
SPREAD OF HOLDINGS
Size of Holdings Number of Number of Shareholders % Shares held %
1 - 999 181 11.72 97,915 0.11 1,000 - 4,999 844 54.66 1,855,006 2.14 5,000 - 9,999 256 16.58 1,620,042 1.87 10,000 - 99,999 229 14.83 4,259,140 4.92 100,000 - 999,999 26 1.69 6,312,407 7.30 1,000,000 + 8 0.52 72,404,031 83.66 TOTAL 1,544 100.00 86,548,541 100.00
SUBSTANTIAL SECURITY HOLDERS
The following information is given pursuant to section 26 of the Securities Markets Act 1988.
The persons who, according to the file kept by the Company pursuant to section 25 of the Securities Markets Act 1988, are substantial security holders in the Company as at 18 February 2005 are as follows:
Substantial Security Holders Number of Percentage of Shares Shares
Todd Capital Limited 51,928,3711 60.00 Todd Lifecare Limited 51,928,3711 60.00 C.J. Cook 51,928,3712 60.00 Private Health Care (NZ) Limited 51,928,3712 60.00 C.J. Cook, S.C. Cook and B.P. Keene (Clifford Cook Family Trust) 51,928,3712 60.00 C.J. Cook, S.C. Cook and B.P. Keene (Susanna Cook Family Trust) 51,928,3712 60.00 Fisher Funds Management Limited 12,047,083 13.92
Notes: Pursuant to the provisions of the Securities Markets Act 1988, more than one relevant interest can exist in the same voting securities. 1. Including 21,713,345 shares in which a relevant interest is held by virtue of the Pre-emptive Agreement, referred to on page 52. 2. Including 30,215,026 shares in which a relevant interest is held by virtue of the Pre-emptive Agreement, referred to on page 52.
The total number of voting securities of the Company on issue at 18 February 2005 was 86,548,541 ordinary fully paid shares.
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .57 332017 AR 3/30/05 9:43 AM Page 58
Directory
DIRECTORS AUDITORS REGISTERED OFFICE
As at 31 December 2004 PricewaterhouseCoopers Level 2
Peter William Fitzsimmons OBE PricewaterhouseCoopers Tower Metlifecare House Chairman 188 Quay Street 302 Great South Road Robert William Bryden Auckland Greenlane Clifford James Cook Auckland Dr Hylton LeGrice OBE SOLICITORS Postal Address Michael Peter Stiassny Hesketh Henry P O Box 37463 Brett Christopher Sutton 41 Shortland Street Parnell Auckland Auckland AUDIT COMMITTEE Telephone: 09 379 8070 Simpson Grierson Robert William Bryden Facsimile: 09 377 2471 Simpson Grierson Building Chairman www.metlifecare.co.nz 92-96 Albert Street Clifford James Cook Auckland Peter William Fitzsimmons OBE SHARE REGISTRAR Dr Hylton LeGrice OBE Computershare Investor Services Limited Michael Peter Stiassny BANKERS Level 2 Brett Christopher Sutton Bank of New Zealand 159 Hurstmere Road Wholesale Financial Services Takapuna Level 13 ACQUISITION & North Shore City BNZ Tower DEVELOPMENT COMMITTEE 125 Queen Street Private Bag 92119 Clifford James Cook Auckland Auckland Chairman Telephone: 09 488 8700 Dr Hylton LeGrice OBE ANZ National Bank Limited Facsimile: 09 488 8787 Michael Peter Stiassny Level 15 Investor Enquiries: 09 488 8777 Brett Christopher Sutton The National Bank Tower 209 Queen Street REMUNERATION COMMITTEE Auckland Peter William Fitzsimmons OBE Chairman This Annual Report is signed for and on behalf of the Board of the Company by: Robert William Bryden Clifford James Cook Dr Hylton LeGrice OBE
CHIEF EXECUTIVE OFFICER Gavin Noel Aleksich Peter W. Fitzsimmons OBE Robert W. Bryden (Resigned effective 1 April 2005) Chairman Director 21 February 2005 21 February 2005
PAGE .58 METLIFECARE LIMITED ANNUAL REPORT 2004 332017 AR 3/30/05 9:44 AM Page 59
METLIFECARE LIMITED ANNUAL REPORT 2004 PAGE .59 332017 AR 3/30/05 9:44 AM Page 60
www.metlifecare.co.nz