BEST YARN STRANDScompanyresearch.nzx.com/reports/nz/2006/CAV2006.pdf · latter culminating in the recent launch of the new Cavalier Bremworth television commercial. The objectives

has manytheSTRANDS

ANNUAL REPORTFOR THE YEAR ENDED 30 JUNE 2006

c a v a l i e r c o r p o r a t i o n l i m i t e d

BEST YARN

BRAND vAluES

SupERioR quAliTY

CuSTomER SERviCE

CoST EffiCiENCY

A M JAMes — Chairman W K Chung — Managing Director

So muCh of ThE SECRET To quAliTY CARpET iS iN ThE YARN AND ThE iNDiviDuAl STRANDS ThAT mAkE iT up.

So also it is with Cavalier Corporation, where

brand values, superior quality, customer service, and cost efficiency are the core strands

that form the very basis of our success today.

market share and price premiums are only possible

through compelling brand values and brand recognition,

backed up by the uncompromising attention to detail,

product quality and innovation, and underpinned by

the unrelenting quest for outstanding customer service.

however, the cohesion of these core strands would not

be possible without the dedication and commitment of

our people. it is they, and their focus on continuous improvements, that will allow us to strive for success

in all facets of our business.

As required by section 211(1)(k) of the Companies Act 1993, the 2006 Annual Report of Cavalier Corporation Limited is signed on behalf of the Board on 15 September 2006 by:

cavalier corporation limited & SUBSidiarY companieS

cavalier corporation l imited & SUBSidiarY companieS

�

Managing Director’s Review 2

Financial Overview 7

Directors’ Report 10

Board of Directors 17

Corporate governance 18

shareholder Information 21

TABlE of CoNTENTSAnnuAl RevIeW

Trend statement 48

glossary of Financial Terms 50

Other Disclosures 51

Corporate Directory 59

Audit Report 24

Directors’ Responsibility

statement 25

Financial statements 26

FInAnCIAl sTATeMenTs AnD OTheR DIsClOsuRes

vAluES

— to maximise returns to shareholders in a sustainable and consistent manner, whilst having regard to the interests of our other stakeholders

— to be a good corporate citizen in terms of social and environmental responsibilities, and to conduct business with consistency and absolute integrity at all times

viSioN

— to be Australasia’s best carpet manufacturer and wool processor, with each business unit outperforming its competitors in earnings, service, product innovation, and quality

— to achieve growth by leveraging off our experience and knowledge in core and allied businesses where we have distinct and proven competitive advantages

miSSioN

— to be the market leader, and the most preferred supplier, by focusing on brand values, superior product quality and innovation, and outstanding customer service

— to foster an organisational culture dedicated to best practice and continuous improvement in product quality, customer service, and operational efficiencies

— to attract and retain the very best people and to provide them with the environment to develop and grow

— to develop long-term alliances, with key business partners, that are strategic to our business units

— to ensure that returns from current and new investments in our existing business units exceed the group’s cost of capital

— to actively seek and evaluate growth opportunities that best fit our investment criteria and risk profile


�

pRoDuCT quAliTY,

STYlE lEADERShip AND

CuSTomER foCuS ARE

ouR CoRE vAluES.

mANAGiNG DiRECToR’S REviEWFOR The YeAR enDeD 30 June 2006

“Our focus on product quality, style leadership, and outstanding customer service remains at the very core of our brand proposition, and Cavalier Bremworth continues to gain widespread acceptance as a flooring solution for a comprehensive range of installations.”

Wayne Chung

Managing Director

DEAR ShAREholDERS

The Directors of Cavalier Corporation announce an audited net operating surplus

after tax and minority interests of $�4.0 million for the year to 30 June �006. This

represents an increase of �% on the $�3.7 million last year.

however, the operating surplus from normal trading activities, which excludes the

development costs associated with our microbial bio-remedy project, would provide

a more meaningful indicator of our results. This is especially so as we wrote-off

$5.8 million tax-paid of development costs associated with that project in last year’s

results.

on this basis, the operating surplus after tax and minority interests from our

normal trading activities (bio-remedy project excluded) is $�4.7 million, which

represents a decrease of �5% on the $�9.5 million equivalent last year. This is in line

with the forecast that we issued at our Annual meeting.

The results reflect reduced earnings from our broadloom carpet business because

of the slowdown in housing activities across our main markets and the continuation

of the softer market conditions that started towards the latter part of our 04/05

financial year.

manaGinG director’S revieW


3

Group operating revenues for the year were $�0� million, a decrease of 3% on the

previous year.

operating surplus before interest, tax, and minority interests for operating activities

(excluding the bio-remedy project) was $�7.4 million, a decrease of $5.5 million, or

�7%, on the 04/05 year.

fiNANCiAl poSiTioN

As at 30 June �006, shareholders’ funds (net of minority interests) were $63.� million, an increase of $0.3 million on the $6�.8 million last year.

Net borrowings were unchanged, after substantial increases in the two preceding years. Debt to equity ratio stood at 49:5�, and net interest cover for the year was 5.9 times.

fiNANCiAl pERfoRmANCE

Consolidated Financial Performance 2006 2005 % change

Year ended 30 June 2006 $000s $000s

Audited

Operating revenue 201,747 207,840 -3%

EBIT (before Microbial costs) 27,419 32,952 -17%

net interest expense -4,498 -2,854 -58%

Pre-tax surplus (before Microbial costs) 22,921 30,098 -24%

Tax -7,881 -10,162 22%

Tax paid surplus (before Microbial costs) 15,040 19,936 -25%

Minority Interests (MI) -385 -411 6%

Surplus after tax and MI (before Microbial costs) 14,655 19,525 -25%

Microbial costs after tax -650 -5,826 89%

Net operating surplus after tax and MI 14,005 13,699 2%

Earnings per share ($) 0.214 0.209 2%


“Cavalier Bremworth – it’s not just carpet...”


4

CASh floWS

Net cash flow from operating activities improved from $�3.4 million last year, when there were substantial increases in trade debtors and stock, to $�4.7 million for the year.

in the year, we purchased $7 million of new assets and invested a further $3.6 million into our South island wool scouring business.

opERATioNS

Carpet Operations

our carpet businesses produced revenues of $�58 million which was virtually the same as the previous year’s $�59 million. included in these revenues was $38 million from our tile operation, which was up �3% on the previous year. This helped to offset the 4% decrease in broadloom carpet revenues.

operating surplus (before corporate costs, interest, and tax) for the carpet businesses was $�7.3 million, a decrease of �6% on the previous year.

Broadloom Carpets

The main markets for our broadloom carpets are in Australia and New Zealand and they can be broadly segmented into retail and contract.

Retail carpet is that sold to individual consumers through carpet retail stores and is mainly, but not exclusively, residential business. Contract carpet is sold in bulk, often by tender, for commercial installations. The two segments tend to follow different economic cycles, with retail associated more with consumer confidence and home building activites, and contract closely linked with business activities.

it is the retail segment that has slowed markedly over the past �8 months, initially in Australia and more recently in New Zealand. in contrast, the demand for contract carpet has remained strong on both sides of the Tasman. however, contract carpet is by its nature more price-driven and less profitable than retail business. Thus, we have endured margin as well as volume erosion in this business, and these are reflected in the financial results.

As of now, there are signs that Australian retail may have bottomed out, but New Zealand may still have some way to go. it is likely to be another �� months before we again see earnings growth in the broadloom carpet business.

We continue to invest heavily in both product development and brand advertising, with the latter culminating in the recent launch of the new Cavalier Bremworth television commercial. The objectives of the new campaign were to refresh and update the previous highly successful “Cavalier Bremworth – it’s not just carpet ….. it’s what you live your life on.” advertisement, whilst retaining that same core proposition to target both the rational and emotive parts of the mind. The end result was a new brand advertisement featuring the same leading lady, Jo – who had moved on in life – enjoying a day out with her two young children to visit their grandparents.

i am pleased to advise shareholders that market research feedback has been very positive with comments like “good continuity from the current campaign”, “warm and natural and suitable for all occasions and for all generations”, “grown in New Zealand and captures New Zealand’s natural and timeless beauty”, “focus on the family and on caring parents” and “strong connection with wool as a natural and luxurious fibre”.

our focus on product quality, style leadership, and outstanding customer service remains at the very core of our brand proposition, and Cavalier Bremworth continues to gain widespread acceptance as a flooring solution for a comprehensive range of installations. i am proud to present, on pages �4 and �5, some of these to you.

Carpet Tiles

our carpet tile business, ontera, operates entirely in the contract segment. With the good trading conditions encountered during the year, it increased both its sales revenue and operating surplus by �3% on the previous year.



5manaGinG director’S revieW

The ability of ontera to provide designed-based solutions in complex and demanding installations can be seen in its supply of the 64,000 square metres of modular carpet required for the new Sydney-based headquarters of the Westpac Banking Corporation.

i am pleased to be able to share with you, on pages 8 and 9, a feature on the scope and complexity of the project and the capabilities of ontera.

Wool Operations

Sales revenues for the wool operations were $44 million, down ��% on last year. most of the decrease in sales revenue was attributed to lower wool prices which, on average, was down ��% on last year.

operating surplus (before corporate costs, interest, and tax) for the wool businesses was $�.7 million, which was a decrease of �8% on last year.

in the wool procurement business, better trading conditions returned after a very difficult period last year. This was helped by a number of sizeable movements in the New Zealand dollar that prompted wool exporters to buy wool.

The other part of our wool operations is the scouring business. here, profitability was eroded by cost increases during the year that were not recoverable in pricing.

Microbial Technologies

last year, we decided to write off the accumulated development expenditure incurred on this project, having concluded that the prospects for successful commercialisation were uncertain.

however, we are continuing to underwrite the project whilst certain avenues for enhancement are explored. We have set benchmarks and timelines as conditions for our continued involvement, and we remain cautiously optimistic of a positive outcome.

The company’s accounting policy is to write-off all expenditures associated with the project as they are incurred. in the accounts this year, after-tax costs of $0.65 million associated with this project were recognised.

ouTlook

our outlook is more positive than it was at this time last year. At that time, the tighter economic conditions were starting to impact adversely on our retail carpet business and, consequently, on our earnings. it also came on the back of a record earnings performance in the preceding 03/04 year which became the benchmark for the 04/05 year.

Wool $1.7 Million

(6%)

CARpET $27.3 Million

(94%)

CONTRIBUTION TO GROUP OPERATING SURPLUS BEFORE

CORPORATE COSTS, ABNORMAL COSTS, INTEREST

AND INCOME TAX

Wool $43.9 Million

(22%)

CARpET $157.8 Million

(78%)

CONTRIBUTION TOGROUP OPERATING REVENUE

“...it’s what you live your life on.”


6 manaGinG director’S revieW

EARNiNGS BEfoRE iNTEREST AND TAx, NET iNTEREST ExpENSE, AND NET iNTEREST CovER

neT InTeResT COveR (times)neT InTeResT expense ($ millions)

eARnIngs BeFORe InTeResT AnD TAx ($ millions)

� Excludes write-down relating to the Microbial developmental project

33.0

2.9

11.5

200512005

24.3

2.9

8.5

2003

30.3

2.0

15.3

200222

.4

1.9

11.9

2004

34.3

2.1

16.5

2006

26.4

4.5 5.9

however, some of this is now behind us. The economic conditions for our main business in carpets will still be tight, but we believe the retail business in Australia has neared its bottom, and there are some signs there that conditions could slowly improve. But, against that would be the recent interest rate rise which could be a dampener for refurbishment spending.

in the retail business in NZ, we believe there will still be some more downside to come.

on the other hand, we have confidence that the contract business in both markets will remain busy, which is in line with most of the market commentaries that we have seen.

overall, we are optimistic that the carpet operations will hold their June 05/06 year’s results.

As for our wool businesses, they should perform better than the June 05/06 year. But there are still the unknowns of the extent of the New Zealand dollar fluctuations and how much that will drive our clients, the wool exporters, into action.

We have budgeted for a 5% increase in Group earnings in the June 06/07 year, but there are of course many uncertainties. We will keep shareholders informed as the year progresses.

ACkNoWlEDGEmENTS

The foundations of our success as a Group rest with our people and their immense contributions. The June 05/06 year has been particularly challenging, but despite this, our people remained focused on the tasks at hand and the need for continuous improvement. on behalf of the Board and shareholders, i would like to take this opportunity to acknowledge their contributions and to thank them for their support and loyalty over the past year.

i would also like to pay a special tribute to mr David Cotton, General manager of the Cavalier Bremworth broadloom carpet operation in Australia, who retires after more than 40 years service with the company. David left New Zealand in �974 to start the Cavalier Bremworth operation in Australia, and under David’s stewardship, the Australian operation has grown to become a significant contributor to the Group’s operations. on behalf of the Board and staff, i thank David for his contributions and wish him all the best in his well-earned retirement.

W K Chung

managing Director 15 September 2006


7financial overvieW

fiNANCiAl ovERviEW

fiNANCiAl RESulTS (NET of miNoRiTY iNTEREST) ($ millions)

2002 2003 2004 2005 20051

20.8

13.7

7.1

27.4

18.3

9.1

19.9

13.2

6.7

31.6

21.0

10.6

29.5

19.5

10.0

InCOMe TAx expenseOpeRATIng suRplus AFTeR TAx

OpeRATIng suRplus BeFORe TAx

2006

21.4

14.0

7.4

RETuRN oN AvERAGE ShAREholDERS’ EquiTYAND NopAT : ToTAl fuNDS EmploYED (%)

2005

21.5

12.9

2003

31.2

21.6

2002

24.0

16.4

2004

32.8

21.4

20051

29.1

16.8

nOpAT : TOTAl FunDs eMplOYeDReTuRn On AveRAge shARehOlDeRs’ equITY

2006

22.4

13.8

EARNiNGS AND DiviDENDS pAiD pER oRDiNARY ShARE (Cents)

2005

21.0

27.0

2003

29.0

20.7

5

2002

20.9

17.2

5

2004

32.7

25.5

20051

29.9

27.0

eARnIngs peR ORDInARY shARe

DIvIDenDs pAID peR ORDInARY shARe

2006

21.4

22.5

NET TANGiBlE ASSET BACkiNG pER oRDiNARY ShARE ($)

2005

0.92

2003

0.88

2002

0.80

2004

0.89

2006

0.93

ToTAl ASSETS EmploYED AND ShAREholDERS’ EquiTY ($ millions)

shARehOlDeRs’ equITYTOTAl AsseTs eMplOYeD

147.

8

63.9

2005

129.

7

67.4

2004

115.

5

63.2

2003

105.

9

57.7

2002

153.

0

64.5

2006

pRopRiEToRShip RATio (%)

2006

42.1

2003

54.7

2002

54.5

2004

51.9

2005

43.2

� Excludes write-down relating to the Microbial developmental project

8 featUre

Ontera recently completed the manufacture and supply of over 64,000 square

metres of modular carpet for the Westpac Place building in Sydney, where

the new headquarters for Westpac Banking Corporation is located. Following

the successful design submission, Geyer as principal consultant, together with

Hassell and DEGW architects, and project management staff from Westpac

developed a concept design brief for the floorcovering.

According to Geyer/hassell, “The main design concept for the Westpac experience

was centred on the dynamics of the city (Sydney), with its diversity of neighbourhoods,

destinations and focal points. All furniture, finishes and materials corresponded to the

four themes of organic, Grid, Radial and Sinuous – creating a holistic approach to

each area from its architecture to its detail.”

integral to the successful implementation of the flooring brief was the use of ontera’s

unique “millitron” dye injection technology. unlike most other manufacturing

methods, which rely on graphic tufting of pre-coloured yarns to provide the final

design and colour, millitron technology uses a computer controlled patterning and

colouring process, which has a significantly higher level of design flexibility. hence,

the need to produce modifications to colour and design is typically much simpler

to achieve. This technology also ensured that ontera can guarantee the long-term

availability of all of the designs because all the colour components are digitised and

stored safely in computer files ready for re-supply.

The main elements of the design brief were the provision of a field tile, an additional

version providing a “stipple” effect and �5 different bright colours in both a solid

and striped format. All the resulting individual modular components were laid in

alternating designs depending on the location.

flooring was used as a key design feature to highlight major circulation paths and

utilised changing colour and pattern to signify various destinations within the

building. The floor finish was also used to provide a way of identifying spaces – a key

design feature was the provision of open areas that can be booked online for team

events, meetings etc, and each space’s number (like a room number) is graphically

represented in the carpet.

Access flooring was installed throughout the building, which enabled all the workspaces

to be free of power poles. This will significantly ease and minimise the disruption caused

by ongoing changes to the furniture layout.

Sustainability is also important to Westpac who “take a leadership position

internationally within the financial services sector by working with all suppliers to

positively influence our mutual social, ethical and environmental performance.”

(Source: Westpac website). Accordingly, environmental impact and supplier

sustainability policies and practice were considered in all major design elements

including the choice of modular carpet.

oNTERA moDulARDesIgn-DRIven ResulTs.

fEATuRE


9featUre

2

According to Geyer/Hassell, “The main design concept for the Westpac experience was centred on the dynamics of the city (Sydney), with its diversity of neighbourhoods, destinations and focal points. All furniture, finishes and materials corresponded to the four themes of Organic, Grid, Radial and Sinuous – creating a holistic approach to each area from its architecture to its detail.”


�0 directorS’ report

ouR BRAND vAluES foRm

ThE plATfoRm foR

DElivERiNG REAl

AND SuSTAiNABlE

ShAREholDER WEAlTh.

DiRECToRS’ REpoRTFOR The YeAR enDeD 30 June 2006

“The core values of Cavalier are quality without compromise, leadership in style, consistency and integrity, and outstanding customer service. Each of our brands holds true to these values, and it is they that enable us to rise above price-based competition and create real shareholder wealth.”

Alan James Chairman

DEAR ShAREholDERS

on behalf of your Directors, i have pleasure in presenting our �006 Annual

Report, which incorporates the audited financial statements of the Company and its

subsidiaries for the year ended 30 June �006.

GRoup ACTiviTiES

The Group’s principal activities comprise the Cavalier Bremworth broadloom carpet

business, the ontera modular carpet tile operation, commission wool scouring, and

a wool procurement business.

The Cavalier Bremworth broadloom carpet business – which markets carpet under

the Bremworth, Cavalier Bremworth, knightsbridge, kimberley, and Tramore

brands – operates two woollen yarn spinning plants and a carpet plant in New

Zealand and has major distribution centres in Auckland and Sydney and sales offices

throughout New Zealand and Australia. it is represented in the uSA, Canada, the

uk, the middle East, and throughout Asia by agents or distributors.

The ontera modular carpet tile operation is based in Sydney and is one of

Australasia’s leading carpet tile manufacturers.

hawkes Bay Woolscourers, the commission wool scouring business, provides

commission wool scouring services for the wool exporting industry and scours

all of the Group’s carpet wool requirements. The Group, through 9�.5%-owned

hawkes Bay Woolscourers, also has a 50% interest in Canterbury Woolscourers, a

commission wool scour based in the South island of New Zealand.


��directorS’ report

Elco Direct, the wool procurement business, is also a service provider to

both the wool industry and the Group’s carpet business.

The Group is also engaged in a developmental venture through its subsidiary,

microbial Technologies limited. The venture involves the utilisation of a natural

biological agent for the control of flystrike and lice infestations in sheep.

ACCouNTiNG poliCiES

Your Directors confirm that there have been no changes in accounting policies

during the year.

fiNANCiAl pERfoRmANCE

The Group achieved an operating surplus after tax and minority interest for the

year of $�4,005,000 – �% up on the $�3,699,000 achieved in the previous year.

however, because of the impact of the write-downs relating to the microbial

developmental project in the previous year, a comparison of the results before

microbial costs would be a more valid one. on this basis, the operating surplus after

tax and minority interest works out at $�4,655,000 – �5% down on the previous

year’s $�9,5�5,000.

“Cavalier Bremworth – capturing the hues, colours, and textures of nature...”


��

2006 2005

$000 $000

Operating revenue $201,747 $207,840

Operating surplus before tax 22,921 30,098

Income tax expense (7,881) (10,162)

Operating surplus after tax 15,040 19,936

Minority interest (385) (411)

Operating surplus after tax and minority interest 14,655 19,525

Microbial project costs after tax (650) (5,826)

Operating surplus after tax, minority interest,

and Microbial project costs $14,005 $13,699

Return on average shareholders’ equity for the year was ��.4%, compared with

��.5% the previous year, and earnings per ordinary share was ��.4 cents, compared

with ��.0 cents the previous year. had it not been for the write-downs relating to

the microbial developmental project, the return on average shareholders’ equity for

the previous year would have been �9.�% and earnings per ordinary share would

have been �9.9 cents.

An in-depth analysis of the year’s performance can be found in the managing

Director’s Review on pages � to 6.

directorS’ report

“...and bringing these into your home.”


�3

fiNANCiAl poSiTioN

The equity attributable to shareholders of the Company increased by $�6�,000

during the year to $63,069,000 as follows:

$000

shareholders’ equity at 30 June 2005 was 62,807

to which was added:

Operating surplus after tax and minority interest 14,005

Movement in the foreign currency translation reserve 841

Movement in the share rights reserve 153

from which was deducted:

Ordinary dividends paid (14,737)

leaving shareholders’ equity at 30 June 2006 of $63,069

The Group’s shareholders’ equity accounted for 4�.�% of the total assets employed

at balance date, compared with 43.�% a year ago.

Net interest-bearing debt : equity ratio stood at 49 : 5�, unchanged on that a year ago.

DiviDENDS

Your Directors have authorised a final dividend (fully imputed) of �0 cents per

ordinary share for the year ended 30 June �006. This, together with the first

interim of 3 cents per share paid in December �005 and the second interim of 5

cents per share paid in march this year, gives a total dividend (fully imputed) for the

year of �8 cents per ordinary share.

The total dividend authorised for the year of �8 cents per share is down 9 cents per

share or 33% on the total of �7 cents per share for the previous year.

The share register will close at 5 p.m. on friday, �9 September �006 for the purpose

of determining entitlement to the final dividend and will re-open at 9 a.m. on

monday, � october �006. The final dividend will be paid on friday, 6 october �006.

our non-resident shareholders will also be receiving, together with their �006 final

dividend, a supplementary dividend of �.7647 cents per ordinary share. The dates

for the determination of entitlement to and the payment of this supplementary

dividend are the same as those for the �006 final dividend.

DiRECToRS

pursuant to the Constitution of the Company, mr Alan James, mr victor Tan, and

mr keith Thorpe retire by rotation at the next Annual meeting scheduled for 9

November �006 and, being eligible, offer themselves for re-election.

messrs James, Tan, and Thorpe were last elected to the Board in November �004.

There have been no other nominations.

directorS’ report


�4 project ShoWcaSe

pRoJECT ShoWCASEpeRFeCT FlOORIng FOR AnY pROJeCT.

NEW homE BuilDER GRoupS

David Reid homes – fletcher Residential – masonry Design solutions –

Signature homes – Stonewood homes – universal homes – Jennian homes

RETiREmENT villAGES

Constitutional hill, Sydney – RSl village, Sydney – metlifecare villages,

New Zealand – hammondville Retirement village, Sydney –

private lifecare villages, Auckland – vision Senior living, New Zealand

– pakuranga Retirement villages, Auckland

EDuCATioN

Tsinghua university, Beijing – Wattle Downs School, Auckland

– Australian National university Student Accommodation, Canberra

– Waiheke primary School, Auckland – moriah memorial College, Sydney

– queensland university – Botany Downs secondary College, Auckland –

Auckland university

ApARTmENTS

martin Towers Apartments, Adelaide – Eiffel place, melbourne

– Acculon Apartments, Newcastle – oceans Apartments, mooloolaba

– Seachange Apartments, manly, Sydney – museum Apartments, Wellington

– m� Apartments, maroochydore – Towns place Apartments, Walsh Bay, Sydney

– 138 st stephen’s Avenue, Auckland – The Scene Apartments, Auckland

CommERCiAl offiCES/puBliC fACiliTiES

Servcorp Business Centres throughout Asia – millennium Centre,

Auckland – fergusson Centre, parramatta – microsoft House, Auckland

– Christchurch international Airport – Gambaro’s italian Restaurant, Brisbane

– Australia post – St vincent’s hospital, Sydney – Wellington Railway Station

– Jaqui E, Australia – Wild Dolphin Resort, Tangalooma

hoTElS

Novotel Century hotel, hong kong – hyatt hotel, Coolum – mercure hotel,

Sydney – interContinental Wellington – millennium hotel, Rotorua

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There is widespread acceptance of Cavalier Bremworth as a flooring solution

for a broad range of installations, and the following is a selection of some of

these projects.

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A special thanks to:

InterContinental Wellington and Masonry Design Solutions Ltd for allowing Cavalier to publish their images.

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�5project ShoWcaSe


�6 directorS’ report

AuDiToRS

kpmG have indicated their willingness to continue in office in accordance with

section �00 of the Companies Act �993 (“the Act”). A resolution authorising your

Directors to fix the remuneration of the auditors will be put to shareholders at the

Annual meeting.

NoN-AuDiT SERviCES AND AuDiToR iNDEpENDENCE

Your Directors confirm that kpmG also provided the Group with taxation

compliance and NZ ifRS advisory services during the year. The fees charged for

these services were $4�,000.

Your Directors note that the provision of taxation compliance and NZ ifRS advisory

services by the external auditors are permitted by the international federation

of Accountants guidelines and are satisfied that the independence of the external

auditors has not been compromised.

kpmG did not provide the Group with any other non-audit services during the year.

DiRECToRS’ DiSCloSuRES

The various disclosures required of your Directors under the Act are set out on

pages 5� to 54 of the Annual Report.

oThER STATuToRY DiSCloSuRES

The other statutory disclosures required of the Company under the Act are set out

on pages 54 and 55 of the Annual Report.

mANAGEmENT AND STAff

on behalf of your Directors, i take this opportunity to acknowledge the contributions

of mr Chung, his management team, and all our staff over the past year.

A m JamesChairman15 September 2006

NET iNTEREST-BEARiNG DEBT : EquiTY RATio

neT InTeResT-BeARIng DeBT equITY

2005

49 51

2004

37

63

32

68

200336

642002 2006

49 51


�7

�. A m (AlAN) JAmES B.Tech. (hons), Dip.Bus.Admin.

- non-independent Director

- non-executive Director since April 2004

- Chairman of the Board of Directors

- Chairman of the Board’s Remuneration Committee and member of the Board’s Audit Committee

- Managing Director from August 1993 to April 2004

�. G C W (GRANT) BiEl B.e. (Mech.)

- non-independent Director

- non-executive Director since October 1995

- Deputy Chairman of the Board of Directors

- Member of the Board’s Audit Committee and Remuneration Committee

- executive Director from July 1984 to september 1995

- Co-founder of Cavalier’s broadloom carpet operation

- Other directorships – Auckland Air Charter limited, heli harvest limited, and Rural Aviation (1963) limited

3. W k (WAYNE) ChuNG B.Com., CA, CMA

- Managing Director since April 2004

- Finance Director from July 1984 to April 2004

4. R G (RiChARD) EBBETT B.Com., ACA, FinstD

- Independent Director

- non-executive Director since July 1984

- Chairman of the Board’s Audit Committee and member of the Board’s Remuneration Committee

- Other directorships – Acma Capital (n.Z.) limited, Anglesea properties limited, ebbett Waikato group limited, horticom limited, and Renaissance Corporation limited

- Trustee of the Auckland philharmonia and the Auckland philharmonia Foundation

5. G S (GRAEmE) hAWkiNS B.sc., B.Com., ACA


- non-executive Director since October 1998


- Other directorships – Ballance Agri-nutrients limited, Biomed limited, Fonterra Co-operative group limited, hawkins Consulting services limited, horizon energy Distribution limited, liggins Institute, link International group limited, stableburn Farms limited, and Watercare services limited

6. v T S (viCToR) TAN CA, ACIs

- Finance Director since April 2004 and Company secretary since november 1984

7. k l (kEiTh) ThoRpE M.A.


- non-executive Director since February 2004


- Other directorships – Aragorn limited, Custom Consulting limited, swift and Moore pty limited, and Zespri group limited

8. A C (ANThoNY) TimpSoN - non-independent Director

- non-executive Director since August 1993

- Member of the Board’s Remuneration Committee

- Chairman of the Board of Directors from August 1993 to April 2004

- Managing Director from July 1984 to August 1993

- Co-founder of Cavalier’s broadloom carpet operation

- Other directorships – Chippendale holdings limited, Marama Trading limited, and pauanui publishing limited

BoARD of DiRECToRS

Board of directorS

2 3 4 5 6 7 81


�8

RolE of ThE BoARD

The Board of Directors is

responsible for the management

and supervision of the business and

affairs of the Company.

The Board discharges this

responsibility by ensuring that

adequate systems – built around

sound and proven procedures,

policies, and guidelines – are in

place to ensure that:

- business strategies, plans,

and budgets are reviewed

and approved

- performances against

business objectives are

monitored

- significant business risks are

identified, monitored,

and mitigated

- the multitude of laws that

affect the Company and its

business activities are

complied with

- such matters as significant

acquisitions and disposals,

delegated authority limits,

and executive remuneration

are reviewed and approved

- all matters of importance are

brought to its attention

through a system of prompt

and comprehensive

reporting.

in discharging its responsibility,

the Board exercises, on behalf of

the shareholders who appointed

it, all the powers of the Company

not otherwise required by law or

the Constitution to be exercised by

shareholders.

Responsibility for the day-to-day

operation and administration of

the Company is delegated to the

managing Director, who is

accountable to the Board.

CompoSiTioN of ThE BoARD

The Board currently comprises six

non-executive Directors (including

the Chairman and the Deputy

Chairman) and two executive

Directors (the managing Director

and the finance Director).

pursuant to NZSx listing Rule

3.3.�, at least one third, or the

number nearest to one third, of the

total number of Directors (three

in the case of the Company) shall

be independent Directors. The

Board has determined, pursuant to

NZSx listing Rule 3.3.�B, that mr

R G Ebbett, mr G S hawkins, and

mr k l Thorpe are independent

Directors of the Company.

The Board comprises Directors

with a broad range of experience

and expertise and whose core

competencies include accounting

and finance, business judgement,

management, industry knowledge,

strategic vision, and information

technology.

The profile of the Directors can be

found on page �7.


3.3.8, at least one third, or the

number nearest to one third, of

the total number of Directors

(excluding any Director appointed

by the Board in between Annual

meetings) retire by rotation at each

Annual meeting. The Directors

to retire are those who have

been longest in office since their

last election. Directors retiring

by rotation are eligible for re-

election at that meeting. A Director

appointed by the Board in between

Annual meetings holds office only

until the next meeting, but is

eligible for election at that meeting.

Shareholders may nominate

persons for election to the Board at

an Annual meeting by giving notice

in writing to the Company within

the time notified by the Company

each year accompanied by the

consent in writing of that person to

the nomination.

BoARD mEETiNGS

The Board has nine scheduled

meetings a year, but will also meet

as and when required to deal with

any specific matters that may arise

between scheduled meetings.

Details of attendances at the nine

Board meetings held during the

year ended 30 June �006 were:

G C W Biel 9/9

W k Chung 9/9

R G Ebbett 9/9

G S hawkins 9/9

A m James 9/9

v T S Tan 9/9

k l Thorpe 9/9

A C Timpson 9/9

CoRpoRATE GovERNANCE STATEmENT

corporate Governance Statement


�9

REmuNERATioN of DiRECToRS

unless specifically provided for in

the Constitution, the Board may

not exercise the power conferred

by section �6� of the Companies

Act �993 to authorise any payment

of remuneration to the Directors

in their capacity as such without

the prior approval of shareholders

having first been obtained.

Shareholders have previously

resolved that the total

remuneration to be paid to the

non-executive Directors be fixed

at a sum not exceeding $�50,000

per annum, such sum to be divided

amongst them in such proportions

and in such manner as they may

determine. The Directors advise

that the total remuneration paid

to the non-executive Directors for

the year ended 30 June �006 was

$��3,500.

The remuneration packages of

the executive Directors, who are

not entitled to any remuneration

in their capacity as Directors, are

fixed by the Board’s Remuneration

Committee, which is composed

entirely of the non-executive

Directors. The executive Directors

do not participate in decisions

affecting their own remuneration

packages.

The remuneration of the Directors

can be found on page 54.

CommiTTEES of ThE BoARD

The Board has two standing

committees – one for audit and the

other for executive remuneration.

AuDiT CommiTTEE

The Board’s Audit Committee

is charged with, amongst other

things, the responsibility of

reviewing the financial statements

to ensure that these comply

with the appropriate laws and

regulations. it is also responsible

for ensuring that adequate internal

control systems are in place to

provide the Board with reasonable

assurance that the Company’s

assets are safeguarded, transactions

are recorded and reported

appropriately, and policies are

followed.

This Committee meets as and

when required, but at least twice

a year, with management, the

independent auditors, and other

internal auditors appointed from

time to time. These meetings are

to enable the Committee to review

the work of each of these groups

and to satisfy itself that they

are discharging their respective

responsibilities adequately. The

Committee is also required to

review the nature and extent of

the other services provided by

the independent auditors and

to confirm that the auditors’

independence has not been

impaired.

it is a policy of the Board that

the independent auditors have

unrestricted access to the Audit

Committee, and it is standard

practice for the Committee

to meet twice a year with the

independent auditors in the

absence of executives.

The members of the Audit

Committee as at 30 June

�006 were messrs R G Ebbett

(Chairman), G C W Biel, G S

hawkins, A m James, and k l

Thorpe. messrs R G Ebbett and

G S hawkins have accounting

backgrounds and are members

of the institute of Chartered

Accountants of New Zealand.

Details of attendances at the two

Audit Committee meetings held

during the year ended 30 June

�006 were:

G C W Biel �/�

(non-independent Director)

R G Ebbett �/�

(independent Director)

G S hawkins �/�


A m James �/�

(non-independent Director)

k l Thorpe �/�


Executive Directors are not

members of the Audit Committee,

and their attendances at Audit

Committee meetings are by

invitation and then only in their

capacity as executives.

corporate Governance Statement


�0 corporate Governance Statement

REmuNERATioN CommiTTEE

The Remuneration Committee

meets as and when required, but

at least once a year, to consider

and recommend to the Board the

remuneration packages of the

executive Directors and to approve

those of other senior executives

of the Company. in considering

or approving the remuneration

packages of the executive Directors

and other senior executives, the

Committee relies on advice from

appropriately qualified professionals

where required and has regard to

best practice in the area of senior

executive remuneration. in these

ways, the Company is not only

able to attract or retain suitably

qualified executives, but also to

align their interests with those of

shareholders in a way that enables

the attainment of shorter-term goals

without compromising longer-term

objectives.

The members of the Remuneration

Committee as at 30 June �006 were

messrs A m James (Chairman), G C

W Biel, R G Ebbett, G S hawkins,

k l Thorpe, and A C Timpson.

All the members of the

Remuneration Committee were

present at the one Remuneration

Committee meeting held during

the year ended 30 June �006.

Executive Directors are not

members of the Remuneration

Committee, and their attendances

at the Remuneration Committee

meetings are by invitation and then

only in their capacity as executives.

NomiNATioNS CommiTTEE

The Board does not have

a standing committee for

nominations because vacancies on

the Board arise infrequently.

however, it has been the past

practice of the Board to charge

the non-executive Directors with

the responsibility of director

appointments and of ensuring that

the Board continues to comprise

Directors with the appropriate mix

of experience, qualifications, and

skills.

Should the need to appoint a

nominations committee arise

in the future, the Board will

adopt best practice prevailing

at the time.

iNSiDER TRADiNG poliCY

The Company adopts the

procedure approved under the

Securities markets Act �988 and

the insider Trading (Approved

procedure for Company officers)

Notice �996 for regulating share

trading by Directors, officers, and

employees who possess inside

information.

under the procedure, Directors,

officers, and employees who

possess inside information are

not allowed to buy or sell shares

at any time other than during

the periods commencing with the

announcements of the half year

and full year results and ending

on the following 30 April and 30

November respectively.

Within these “windows”, prior

consents of share transactions must

be granted by a sub-committee

of the Board, comprising the

Chairman and the Company

Secretary and all such consents

must also be notified to the Board.

Similar restrictions are also in place

to regulate the issue of share rights

to the executive Directors and

selected senior executives of the

Group and the subsequent exercise

of share rights by the executive

Directors and selected senior

executives.

CoRpoRATE GovERNANCE BEST pRACTiCE

The Company has formulated

a Code of Conduct for the

Directors, executive officers and

employees of the Company and its

subsidiaries. This Code of Conduct

addresses such matters as insider

trading, continuous disclosures,

confidentiality of information,

conflicts of interest, donations and

internal reporting of concerns.


�0.5.3(i), the Company believes

that its corporate governance

processes do not materially differ

from the principles set out in the

NZx Corporate Governanace Best

practice Code.


��

ANNuAl mEETiNG

time and date �� a.m., Thursday, 9 November �006

Venue Ellerslie Event Centre, 80 – �00 Ascot Avenue, Ellerslie, Auckland

CoRpoRATE CAlENDAR

6 october 2006 payment of �006 final dividend9 november 2006 �006 Annual meeting Announcement of �007 first interim dividendearly December 2006 payment of �007 first interim dividend31 December 2006 End of �007 half yearmid-February 2007 Announcement of �007 half year result Announcement of �007 second interim dividendend of February 2007 Release of �007 half year reportearly march 2007 payment of �007 second interim dividend30 June 2007 End of �007 financial yearlate August 2007 Announcement of �007 annual result Announcement of �007 final dividendearly september 2007 � period for nomination of directors to the Board closesend of september 2007 Release of �007 Annual Report

early october 2007 payment of �007 final dividend

1 Actual date to be confirmed. nZsx listing Rule 3.3.2 requires the Company to make an announcement to the market of the closing date for director nominations no less than 10

business days prior to the closing date. The closing date for director nominations shall not be more than two months before the date of the Annual Meeting at which the election of

directors is to take place.

DiviDENDSThe Company pays three dividends every financial year. These are as follows:

- the previous financial year’s final dividend, announced together with the annual result in late August

and payable in early october

- that financial year’s first interim dividend, announced at the Annual meeting in early November and

payable in early December

- that financial year’s second interim dividend, announced together with the half year result in

mid-february and payable in early march

The Directors do not expect the Company’s ability to pay fully imputed dividends to change in the foreseeable future.

The Directors are permitted by the Constitution of the Company to exercise the right conferred by the Companies Act

�993 to issue shares to shareholders who have agreed to accept shares, either wholly or in part, in lieu of proposed

dividends or proposed future dividends. The Directors have decided not to exercise this right at the present time, and

shareholders will be advised should this change.

Shareholders can elect to have their dividends paid by cheque or by direct credit to their nominated bank accounts in

New Zealand, and the Directors strongly encourage shareholders to avail themselves of the latter option.

ShAREholDER ENquiRiES

Enquiries regarding such matters as dividend payments, shareholdings, fASTER transaction statements and

identification Numbers, and changes of addresses should be directed to the Company’s share registrar, Computershare

investor Services limited, details of which can be found in the Corporate Directory (refer to page 59 of the Annual Report).

ShAREholDER iNfoRmATioN

Shareholder information


�� Shareholder information

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ANNUAL REPORTFOR THE YEAR ENDED 30 JUNE 2006

TA B l E o f C o N T E N T S

FInAnCIAl sTATeMenTs

Audit Report �4

Directors’ Responsibility statement �5

statement of Accounting policies �6

statements of Financial performance �8

statements of Movements in equity �9

statements of Financial position 30

statements of Cash Flows 3�

notes to the Financial statements 3�

TRenD sTATeMenT 48

glOssARY OF FInAnCIAl TeRMs 50

OTheR DIsClOsuRes

Disclosures under the Companies Act 1993 5�

Disclosures under the new Zealand exchange listing Rules 56

Disclosures under the securities Markets Act 1988 58

CORpORATe DIReCTORY 59

fiNANCiAl STATEmENTS AND oThER DiSCloSuRES


�4 aUdit report

TO THE SHAREHOLDERS OF CAVALIER CORPORATION LIMITED

We have audited the financial statements on pages 26 to 47. The financial statements provide information about the past

financial performance and financial position of the Company and group as at 30 June 2006. This information is stated in

accordance with the accounting policies set out on pages 26 and 27.

DIRECTORS’ RESPONSIBILITIES

The Directors are responsible for the preparation of financial statements which give a true and fair view of the financial

position of the Company and group as at 30 June 2006 and the results of their operations and cash flows for the year

ended on that date.

AUDITORS’ RESPONSIBILITIES

It is our responsibility to express an independent opinion on the financial statements presented by the Directors and

report 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:

- the significant estimates and judgements made by the Directors in the preparation of the financial statements;

- whether the accounting policies are appropriate to the Company’s and group’s circumstances, consistently applied

and adequately disclosed.

We conducted our audit in accordance with new Zealand Auditing standards. We planned and performed our audit so

as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient

evidence to obtain 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.

Our firm has also provided other services to the Company and certain of its subsidiaries in relation to taxation and other

advisory services. These matters have not impaired our independence as auditors of the Company and group. The firm has

no other relationship with, or interest in, the Company or any of its subsidiaries.

UNQUALIFIED OPINION

We have obtained all the information and explanations we have required.

In our opinion:

- proper accounting records have been kept by the Company as far as appears from our examination of those records;

- the financial statements on pages 26 to 47:

- comply with new Zealand generally accepted accounting practice;

- give a true and fair view of the financial position of the Company and group as at 30 June 2006 and the results of

their operations and cash flows for the year ended on that date.

Our audit was completed on 18 August 2006 and our unqualified opinion is expressed as at that date.

Auckland

AuDiT REpoRT


�5

DiRECToRS’ RESpoNSiBiliTY STATEmENT

DIRECTORS’ RESPONSIBILITIES

The Directors are responsible for the preparation of the financial statements. The Directors discharge this responsibility by

ensuring that the financial statements comply with generally accepted accounting practice and give a true and fair view of

the financial position of the Company and group as at balance date and of their financial performance and cash flows for

the year ended on that date.

ACCOUNTING POLICIES

The Directors consider that the accounting policies used in the preparation of the financial statements of the Company

and group are appropriate, consistently applied, and supported by reasonable judgements and estimates. All relevant

financial reporting and accounting standards have also been followed.

ACCOUNTING RECORDS

The Directors believe that proper accounting records, which enable, with reasonable accuracy, the determination of the

financial position of the Company and group and facilitate the compliance of the financial statements with the Financial

Reporting Act 1993, have been kept.

SAFEGUARDING OF ASSETS AND INTERNAL CONTROLS

The Directors consider that they have taken adequate steps to safeguard the assets of the Company and group and

to prevent and detect fraud and other irregularities. Internal control procedures are also considered to be sufficient to

provide a reasonable assurance as to the integrity and reliability of the financial statements.

FINANCIAL STATEMENTS

The Directors are pleased to present, on pages 26 to 47, the financial statements of the Company and group for the year

ended 30 June 2006.

These financial statements were authorised for issue by the Directors on 18 August 2006 and, as required by section

211(1)(b) of the Companies Act 1993 and sections 10 and 13 of the Financial Reporting Act 1993, are signed and dated as

at that date.

For and on behalf of the Directors:

A M JAMES W K CHUNG

Chairman Managing Director

directorS’ reSponSiBil itY Statement


�6

STATEmENT of ACCouNTiNG poliCiES

REPORTING ENTITY Cavalier Corporation limited is a company registered under the new Zealand Companies Act 1993 and is listed on the new Zealand exchange. The group consists of Cavalier Corporation limited and its subsidiaries. Cavalier Corporation limited is an issuer for the purposes of the new Zealand Financial Reporting Act 1993 and is, accordingly, a reporting entity that is required to comply with the provisions of that Act and with generally accepted accounting practice.

MEASUREMENT BASE The accounting principles recognised as appropriate for the measurement and reporting of financial performance and financial position under the historical cost method have been adopted in the preparation of these financial statements, except where modified by the revaluation of certain assets. Reliance is placed on the fact that the group is a going concern.

ACCOUNTING POLICIES The following specific accounting policies which significantly affect the measurement of financial performance and financial position have been applied:

1 Principles of Consolidation. The consolidated financial statements are prepared from the audited financial statements of the Company and its subsidiary companies.

The results of any subsidiaries acquired or disposed of during the year are included in the consolidated statement of Financial performance from the date of acquisition or up to the date of disposal. All significant transactions between group companies are eliminated on consolidation.

2 Associates. Associates are entities in which the group has significant influence, but not control, over the operating and financial policies. The group’s share of the net surplus or deficit of associates is recognised as a component of operating revenue or operating expense in the statement of Financial performance, after adjusting for the amortisation of goodwill arising on acquisition and differences between the accounting policies of the group and associates. The group’s share of other gains and losses is recognised as a component of total recognised revenues and expenses in the statement of Movements in equity. Dividends received from associates are credited to the carrying amount of the investment in associates. The unamortised balance of goodwill arising on acquisition is included in the carrying amount of the associate.

3 Operating Revenue. Operating revenue shown in the statement of Financial performance includes the amounts received and receivable by the group for goods and services supplied to customers in the ordinary course of business. Operating revenue is stated exclusive of goods and services Tax charged to customers.

4 Fixed Assets. All owned assets of property, plant and equipment are initially recorded at cost and, except for land, depreciated. Initial cost includes the purchase consideration and those costs directly attributable in bringing the asset to the location and condition necessary for its intended use. These costs include site preparation costs, installation costs, borrowing costs, unrecovered operating costs incurred during planned commissioning and the cost of obtaining consents. Costs cease to be capitalised when substantially all the activities necessary to bring an asset to the location and condition for its intended use are complete.

subsequent expenditure relating to an item of property, plant and equipment is added to its gross carrying amount when such expenditure either increases the future economic benefits beyond its existing service potential, or is necessarily incurred to enable future economic benefits to be obtained, and that expenditure would have been included in the initial cost of the item had the expenditure been incurred at that time.

Fixed assets are stated in the financial statements at their gross carrying amount less depreciation. gross carrying amount of a fixed asset is the initial cost, adjusted for additions, improvements, and disposals and is the recoverable amount where this is lower than the initial cost.

5 Depreciation. Depreciation is charged so as to write off the initial cost or revalued amount of fixed assets to their estimated residual value over their expected economic lives.

The principal rates used are as follows:

land nil

Buildings 1.0-2.5% straight line

plant and equipment 6.7-10.0% straight line

Other assets

- computer equipment 20.0-25.0% straight line

- motor vehicles and office equipment 20.0% diminishing value

- fixtures and fittings 10.0% straight line

6 Goodwill Arising on Acquisition. The excess of the cost of acquisition over the fair value of the identifiable net assets acquired is capitalised as goodwill and is amortised to the statement of Financial performance over 10 years, the period over which the benefits associated with the acquisition are expected to be derived.

7 Discount on Acquisition. A discount arising on the acquisition of a subsidiary represents the excess of the fair value of the identifiable net assets acquired over the purchase consideration. The discount is first applied in reducing the fair values of the non-monetary assets acquired, and any amount remaining is recognised in the statement of Financial performance.

8 Debtors. Trade debtors are stated at estimated realisable value after providing against debts where collection is doubtful. hire purchase debtors are stated at net of provisions for unearned finance income and doubtful debts.

Statement of accoUntinG policieS


�7

9 Unearned Finance Income. unearned finance income in respect of hire purchase debtors is recognised in the statement of Financial performance using the “rule of 78” on the net hire purchase debtors outstanding.

10 Research and Development Expenditure. Research and development expenditure is charged to the statement of Financial performance as it is incurred, except that development costs, for clearly defined products, are capitalised where it can be demonstrated that the commercial production of the product will commence and to the extent that related future economic benefits, net of further costs to final commercialisation, are expected, with reasonable certainty, to exceed these costs. Capitalised development costs will, upon the commencement of commercial production, be progressively amortised to the statement of Financial performance over the period of expected benefit.

11 Stocks. stocks of the carpet business are stated at the lower of cost and net realisable value. Cost is determined on a first-in first-out basis, and in the case of carpet stocks, includes direct materials, labour, and production overheads. Carpet work-in- progress includes direct materials and a portion of direct labour and production overheads appropriate to the stage of completion attained.

stocks of the wool business are stated at the lower of cost and net realisable value. Cost of wool stocks is determined using the weighted average cost formula, and in the case of scoured wool stocks, includes direct materials, labour, and production overheads. Wool work-in-progress includes direct materials and a portion of direct labour and production overheads appropriate to the stage of completion attained. Cost of all other stocks is determined on a first-in first-out basis.

12 Shareholders’ Equity. When shares recognised within shareholders’ equity are repurchased or cancelled, the amount of consideration paid, including directly attributable costs, is recognised as a distribution in the statement of Movements in equity.

13 Share Rights. The estimated fair value of rights issued to senior executives under the Cavalier Corporation limited 2000 executive share Rights plan is recognised as an expense over the minimum three-year period between the issue date of the rights and the earliest exercise date of the rights. At the same time, a corresponding amount is recognised as a credit to equity in the statement of Movements in equity. The estimated fair value of the rights issued is determined using the Black-scholes option pricing model.

Where rights lapse before they can be exercised, the amounts previously recognised as expenses are reversed and a corresponding debit against equity is recognised in the statement of Movements in equity.

The market value of shares issued to the senior executives upon the exercise of the rights will be accounted for within shareholders’ equity.

14 Income Tax. The income tax expense for the year comprises income tax payable, calculated at current rates, on assessable income for the year, adjusted for income taxes deferred or prepaid in respect of all timing differences reversing or originating in the year.

The liability method of tax effect accounting is applied on a comprehensive basis to all timing differences. under this method, the income tax effects of all currently outstanding timing differences are determined and reported, either as liabilities for income tax payable in the future or as assets representing future income tax benefits. The income tax effect of cumulative timing differences is adjusted for any changes in income tax rates.

Future income tax benefits are not recognised unless realisation of the asset is virtually certain.

15 Foreign Currencies. Foreign currency transactions are recorded at the exchange rates in effect at the dates of the transactions, except where foreign currency forward exchange contracts have been taken out to cover forward currency commitments. Where foreign currency forward exchange contracts have been taken out, the transactions are translated at the rates contained in the contracts.

unhedged foreign currency monetary assets and liabilities are translated to new Zealand dollars at the rates of exchange ruling at balance date. profits and losses due to currency fluctuations on these items are recognised by way of a credit or charge in the statement of Financial performance.

Foreign currency non-monetary assets are translated to new Zealand dollars at the rates of exchange in effect when the amounts of these assets were determined.

Where foreign currency monetary liabilities are designated as hedges against foreign currency non-monetary assets, the assets are translated at the rates of exchange ruling at balance date, and the gains or losses due to currency fluctuations on both the foreign currency liabilities and assets are transferred to the foreign currency translation reserve.

16 Translation of the Financial Statements of Independent Foreign Operations. The assets and liabilities of the group’s overseas operations, being independent foreign operations, are translated at the exchange rates ruling at balance date. The revenue and expenses of these entities are translated at rates approximating the exchange rates ruling at the dates of the transactions. exchange differences arising on the translation of independent foreign operations are recognised directly in the foreign currency translation reserve.

17 Financial Instruments. Off balance sheet financial instruments, entered into as hedges of an underlying position, are accounted for on the same basis as the underlying position with all profits and losses dealt with in the same manner as the corresponding profits and losses on the related underlying position.

Off balance sheet financial instruments, entered into with no corresponding underlying position, are accounted for on a mark-to- market basis and the profits or losses recognised by way of a credit or charge in the statement of Financial performance.

CHANGES IN ACCOUNTING POLICIES There have been no changes in accounting policies.

Statement of accoUntinG policieS


�8

STATEmENTS of fiNANCiAl pERfoRmANCEFOR THE YEAR ENDED 30 JUNE 2006

GRoup pARENT

2006 2005 2006 2005 nOTes $000 $000 $000 $000

OPERATING REVENUE 2 $201,747 $207,840 $21,904 $20,375

OPERATING SURPLUS BEFORE INTEREST AND INCOME TAx 3 26,449 24,256 18,361 16,433

net Interest expense (4,498) (2,854) - -

OPERATING SURPLUS BEFORE INCOME TAx 21,951 21,402 18,361 16,433

Income Tax expense 4 (7,561) (7,292) (325) (188)

OPERATING SURPLUS AFTER INCOME TAx $14,390 $14,110 $18,036 $16,245

OPERATING SURPLUS AFTER INCOME TAx:

Attributable to shareholders of the Company 14,005 13,699 18,036 16,245

Attributable to minority shareholders of subsidiaries 385 411 - -

$14,390 $14,110 $18,036 $16,245

These statements are to be read in conjunction with the statement of Accounting policies on pages 26 and 27, the notes on pages

32 to 47, and the Audit Report on page 24.

StatementS of f inancial performance


�9

STATEmENTS of movEmENTS iN EquiTYFOR THE YEAR ENDED 30 JUNE 2006

GRoup pARENT

2006 2005 2006 2005 nOTes $000 $000 $000 $000

RECOGNISED REVENUES AND ExPENSES FOR THE YEAR

Operating surplus after income tax –

of shareholders of the Company 14,005 13,699 18,036 16,245

of minority shareholders of subsidiaries 385 411 - -

Foreign currency translation reserve 6 841 (26) - -

15,231 14,084 18,036 16,245

CONTRIBUTIONS FROM OWNERS DURING THE YEAR

Minority shareholders of subsidiary - 225 - -

share rights issued 6 153 138 153 138

153 363 153 138

DISTRIBUTIONS TO OWNERS DURING THE YEAR

Minority shareholders of subsidiary -

dividends paid by subsidiary (67) (340) - -

shareholders of the Company -

previous year’s final dividend (9,497) (9,413) (9,497) (9,413)

current year’s 1st interim dividend (1,965) (2,947) (1,965) (2,947)

current year’s 2nd interim dividend (3,275) (5,240) (3,275) (5,240)

(14,804) (17,940) (14,737) (17,600)

MOVEMENTS IN EQUITY FOR THE YEAR $580 $(3,493) $3,452 $(1,217)

EQUITY AT BEGINNING OF THE YEAR:


Attributable to minority shareholders of subsidiaries 1,097 801 - -

$63,904 $67,397 $22,360 $23,577

EQUITY AT END OF THE YEAR:


Attributable to minority shareholders of subsidiaries 1,415 1,097 - -

$64,484 $63,904 $25,812 $22,360



StatementS of movementS in eqUitY


30

STATEmENTS of fiNANCiAl poSiTioNAS AT 30 JUNE 2006

GRoup pARENT

2006 2005 2006 2005 noteS $000 $000 $000 $000

shareholders’ equity 5, 6, 7


Attributable to minority shareholders of subsidiaries 1,415 1,097 - -

SHAREHOLDERS’ EQUITY 64,484 63,904 25,812 22,360

Term liabilities 8 59,976 59,802 - -

Current liabilities 9 28,563 24,121 34,420 26,872

SHAREHOLDERS’ EQUITY AND TOTAL LIABILITIES $153,023 $147,827 $60,232 $49,232

Fixed assets 10 60,404 58,182 - -

Investments 11 3,736 4,231 24,590 24,590

goodwill 12 1,936 2,371 - -

Deferred tax asset 15 2,232 3,363 - 23

NON-CURRENT ASSETS 68,308 68,147 24,590 24,613

Current assets 16 84,715 79,680 35,642 24,619

TOTAL ASSETS $153,023 $147,827 $60,232 $49,232



StatementS of f inancial poSit ion


3�

STATEmENTS of CASh floWSFOR THE YEAR ENDED 30 JUNE 2006

GRoup pARENT

2006 2005 2006 2005 nOTes $000 $000 $000 $000

CASH FLOWS FROM OPERATING ACTIVITIES

CASH WAS PROVIDED FROM:

Receipts from sales of goods and services 203,982 204,152 - -

Other receipts 124 86 4,375 4,375

Dividends received - - 17,529 16,000

Interest received 53 83 - -

gsT refunded 280 - - -

CASH WAS APPLIED TO:

payments to suppliers and employees

and rebates and discounts to customers (168,399) (175,970) (3,474) (3,805)

Income tax paid/refunded (7,032) (11,664) (80) (76)

Interest paid (4,267) (2,888) - -

gsT paid - (414) - -

NET CASH INFLOW FROM OPERATING ACTIVITIES 17 24,741 13,385 18,350 16,494

CASH FLOWS FROM INVESTING ACTIVITIES


Fixed assets sold 131 111 - -


Fixed assets purchased (6,891) (11,224) - -

Borrowing costs capitalised to fixed assets 10 (150) (569) - -

Acquisition of shares in associate 11 - (4,550) - -

NET CASH OUTFLOW FROM INVESTING ACTIVITIES (6,910) (16,232) - -

CASH FLOWS FROM FINANCING ACTIVITIES


Minority shareholders of subsidiary - 225 - -

Term loans raised - 22,557 - -

Advances from subsidiaries - - 7,413 7,160


Advances to subsidiaries - - (11,024) (6,049)

Term loans settled (679) - - -

Dividends paid –

to shareholders of the Company (14,737) (17,600) (14,737) (17,600)

to minority shareholders of subsidiary (67) (340) - -

short-term advance to associated company (3,603) (670) - -

NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES (19,086) 4,172 (18,348) (16,489)

NET INCREASE/(DECREASE) IN CASH HELD (1,255) 1,325 2 5

Cash at beginning of the year (845) (2,078) 7 2

effect of exchange rate changes on cash 158 (92) - -

CASH AT END OF THE YEAR 17 $(1,942) $(845) $9 $7



StatementS of caSh floWS


3�

1 PRINCIPAL SUBSIDIARIES AND ACTIVITIES

The principal subsidiaries of the Company and their activities are:

Cavalier Bremworth limited – broadloom carpet manufacturing and distribution

Cavalier Bremworth proprietary limited – broadloom carpet distribution

Knightsbridge Carpets limited – broadloom carpet distribution

Kimberley Carpets proprietary limited – broadloom carpet distribution

Cavalier spinners limited – carpet yarn manufacturing

Ontera Modular Carpets proprietary limited – carpet tile manufacturing and distribution

hawkes Bay Woolscourers limited – commission wool scouring

elco Direct limited – wool procurement

Microbial Technologies limited – bio-pesticides development

All subsidiaries have 30 June balance dates. Apart from Ontera Modular Carpets proprietary limited, which is 89.5%

owned, and hawkes Bay Woolscourers limited, which is 92.5% owned, all other subsidiaries are wholly owned. voting

interests in the two non-wholly owned subsidiaries are the same as the ownership interests.

The group’s principal activities comprise a broadloom carpet business, a carpet tile business, a commission wool

scouring business, and a wool procurement business.

Cavalier Bremworth, the broadloom carpet business, operates two woollen yarn spinning plants and a carpet plant

– all new Zealand-based – and has major distribution centres in Auckland and sydney and sales offices throughout

new Zealand and Australia and in hong Kong. It has agents or distributors in the usA, Canada, the uK, the Middle east,

and throughout Asia. The business markets carpet under the Bremworth, Cavalier Bremworth, Knightsbridge,

Kimberley, and Tramore brands. sydney-based Ontera Modular Carpets is one of Australasia’s leading manufacturers

and marketers of carpet tiles. It has sales operations in both new Zealand and Australia.

hawkes Bay Woolscourers, the commission wool scouring business, provides a commission wool scouring service

for the wool exporting industry and scours all of the group’s carpet wool requirements. likewise, elco Direct, the wool

procurement business, is a service provider to both the wool industry and the group’s carpet business.

The group is also engaged in a developmental venture through its subsidiary, Microbial Technologies limited. The

venture involves the utilisation of a natural biological agent for the control of flystrike and lice infestations in sheep.

NoTES To ThE fiNANCiAl STATEmENTS

GRoup pARENT

2006 2005 2006 2005 $000 $000 $000 $000

2 OPERATING REVENUE

Operating revenue as per the statement

of Financial performance comprises:

sales of goods and services 201,570 207,671 - -

Rentals received 124 86 - -


Interest received 53 83 - -

Management fee received - - 4,375 4,375

$201,747 $207,840 $21,904 $20,375

noteS to the f inancial StatementS


33

GRoup pARENT

2006 2005 2006 2005 $000 $000 $000 $000

3 OPERATING SURPLUS BEFORE INTEREST AND INCOME TAx

The operating surplus before interest and income tax as

per the statement of Financial performance is stated:

AFTER CHARGING -

NORMAL OPERATING COSTS

Amortisation of goodwill 590 624 - -

Bad debts written off 133 - - -

Depreciation

Buildings 338 322

plant and equipment 3,532 2,616

Other fixed assets 1,574 1,405

Total depreciation charge 5,444 4,343 - -

Directors’ fees 214 203 214 203

Donations 13 - - -

Fair value of share rights expensed 153 138 153 138

Fees paid to the auditors:

for audit of financial statements 119 88 10 8

for nZ IFRs advisory services 23 - - -

for tax compliance services 19 18 - -

Fees paid to auditors of subsidiaries 55 50 - -

Foreign currency losses - 87 - -

loss on sale of fixed assets 75 3 - -

Operating lease and rental costs 2,794 2,535 - -

Research costs relating to the Microbial project 970 - - -

share of associated company tax–paid deficit 340 190 - -

ABNORMAL OPERATING COSTS

Write-downs relating to the Microbial

developmental project:

Write-off of development expenditure - 7,118

Impairment losses in respect of fixed assets - 1,578

Total write-down - 8,696 - -

AFTER CREDITING -

Bad debts recovered - 2 - -

Changes in doubtful debt provision 2 13 - -

Foreign currency gains 123 - - -

gain on sale of fixed assets 52 90 - -



34

GRoup pARENT

2006 2005 2006 2005 $000 $000 $000 $000

4 INCOME TAx ExPENSE

Operating surplus before income tax as

per the statement of Financial performance $21,951 $21,402 $18,361 $16,433

THE INCOME TAx ExPENSE HAS BEEN

CALCULATED AS FOLLOWS:

Income tax on the operating

surplus for the year at 33% (7,244) (7,063) (6,059) (5,423)

plus/(less) taxation effect of:

Amortisation of goodwill (195) (206) - -

Depreciation on revaluations (17) (17) - -

Difference in tax rate in overseas jurisdictions 143 127 - -


non-deductible items (136) (68) (51) (45)

non-assessable items - 10 - -

share of associated company tax–paid deficit (112) (63) - -

prior year adjustments - (12) - -

(317) (229) 5,734 5,235

Income tax expense $(7,561) $(7,292) $(325) $(188)

THE INCOME TAx ExPENSE IS REPRESENTED BY:

Current tax (6,370) (9,069) (302) (188)

Deferred tax (1,191) 1,777 (23) -

$(7,561) $(7,292) $(325) $(188)

5 SHAREHOLDERS’ EQUITY

There is only one class of share in the Company. The number of shares on issue at 30 June 2006 was 65,495,595, fully

paid up (2005 65,495,595, fully paid up). All shares within this class rank pari passu in all respects.

NoTES To ThE fiNANCiAl STATEmENTS (CoNTiNuED)



35

GRoup pARENT

2006 2005 2006 2005 $000 $000 $000 $000

6 RESERVES

Included within shareholders’ equity are the following reserves:

FOREIGN CURRENCY TRANSLATION RESERVE

Balance at beginning of the year (237) (211) - -

Difference arising on translation of independent

foreign operations 841 (26) - -

Balance at end of the year $604 $(237) - -

SHARE RIGHTS RESERVE

Balance at beginning of the year 191 141 191 141

Amount transferred to capital consequent upon

the exercise of rights relating thereto - (88) - (88)

Corresponding amount of fair value of rights

expensed in the statement of Financial performance 153 138 153 138

Balance at end of the year $344 $191 $344 $191

7 ExECUTIVE SHARE RIGHTS PLAN

The details of share rights issued under the Cavalier Corporation limited 2000 executive share Rights plan (“the plan”)

to the executive Directors of the Company and to selected senior executives of the group were as follows:

pARENT

2006 2005 000 000

share rights issued at beginning of the year 3,880 4,120

share rights issued during the year - 1,360

share rights exercised during the year - (1,600)

share rights issued at end of the year 3,880 3,880

The earliest dates on which these share rights fall due

for exercise and their respective expiry dates are as follows:

EARLIEST ExERCISE DATE ExPIRY DATE

14 november 2005 4 December 2008 1,770 1,770

21 March 2006 20 March 2009 250 250

14 november 2006 13 november 2009 500 500

12 november 2007 11 november 2010 1,360 1,360

3,880 3,880

share rights approved but not issued 5 5

The plan seeks to align the interests of senior executives with those of shareholders by having an element of the

senior executives’ total remuneration linked to the returns enjoyed by shareholders, thereby providing them with

the incentive to increase value for shareholders. At the same time, because the rewards under the plan would

not crystallise for at least three years, it also enables the group to retain these senior executives for their loyalty,

experience, and continuing performance.



36

7 ExECUTIVE SHARE RIGHTS PLAN (continued)

The rights holders’ rewards under the plan will be determined on the exercise date by multiplying the difference

between the market price of the Company’s shares and the adjusted base price at exercise date by the number of

rights exercised at that date. These rewards are then divided by the market price of the Company’s shares at exercise

date to give the number of shares to be issued to the holders, subject to a maximum of one share for every 1.8 rights

exercised. The adjusted base price is the market price of the Company’s shares at issue date plus an escalation

factor, being the Company’s tax paid cost of equity capital between issue date and exercise date, and then adjusted

downwards for dividends paid between these two dates.

using the tranche of 1,770,000 share rights that were issued on 4 December 2002, the rights holders’ theoretical

rewards under various market price scenarios on 31 August 2006, when these rights next come due for exercise, can

be best illustrated thus:

sCenARIO 1 sCenARIO 2 sCenARIO 31

Market price (A) at exercise date $3.38 or less $4.00 $7.60

estimated adjusted base price (B)

at exercise date $3.38 $3.38 $3.38

Rights holders’ rewards (being (A-B) x 1,770,000

rights issued on 4 December 2002,

when market price was $3.11) nil $1,097,400 $7,469,400

number of shares to be issued (being rights

holders’ rewards divided by market price),

subject to maximum of one share for every

1.8 rights or 983,333 shares nil 274,350 983,333

Dilution effect (maximum 1.5%, when market

price reaches $7.60 at exercise date) nil 0.4% 1.5%

1 Market price at which the maximum number of shares are issued and maximum dilution is reached.

The rights can only be exercised in the period commencing on the third anniversary of the issue date, unless the Board

of Directors determines otherwise, and terminating on the earlier of the rights holder ceasing full time employment

or the date six years from issue date and then only if the market price of the Company’s shares exceeds the adjusted

base price at that time.

The rights holders are restricted from dealing with some of the shares issued under the plan in the first two years after

their issue.

The rights do not confer the same rights as shares and merely holding rights does not entitle the rights holders to:

- receive any dividends paid,

- attend or vote at any meeting of the shareholders, or

- exercise any other rights which shareholders are entitled to exercise.




37

2006 2005

AVERAGE AveRAge GRoup pARENT INTEREST InTeResT 2006 2005 2006 2005 RATE % RATe % $000 $000 $000 $000

8 TERM LIABILITIES

loans secured by registered

mortgages over specific properties

and by debentures over assets and

undertakings of group companies 7.1 7.0 59,976 59,802 - -

less current portion repayable

within one year 1 - - - -

$59,976 $ 59,802 - -

Term liabilities fall due for repayment

in the following periods:

After one year but within two years $59,976 $59,802 - -

1 excludes $24.2 million (2005 $22.6 million), which is subject to annual review, as it is anticipated that if required,

the group will be able to have this renewed for a further term at the next review date in november 2006.

GRoup pARENT

2006 2005 2006 2005

$000 $000 $000 $000

9 CURRENT LIABILITIES

Bank overdraft (secured) 168 135 - -

short-term borrowings (unsecured) 4,934 2,065 - -

employee entitlements 6,119 6,248 - -

Trade creditors and accruals 17,342 15,673 51 135

provision for tax - - 219 -

Advances from subsidiaries - - 34,150 26,737

$28,563 $24,121 $34,420 $26,872

The bank overdraft is secured by registered mortgages over specific properties and by debentures over assets and

undertakings of group companies.



38

GRoup GRoup �006 �005 COST OR ACCUM. BOOK COsT OR ACCuM. BOOK VALUATION DEPN. VALUE vAluATIOn Depn. vAlue $000 $000 $000 $000 $000 $000

10 FIxED ASSETS

Freehold land

Cost 4,331 - 4,331 4,028 - 4,028

valuation 75 - 75 75 - 75

4,406 - 4,406 4,103 - 4,103

Buildings

Cost 19,598 3,050 16,548 19,129 2,633 16,496

valuation 2,961 550 2,411 2,961 520 2,441

22,559 3,600 18,959 22,090 3,153 18,937

plant and equipment

Cost 55,392 25,719 29,673 42,748 22,443 20,305

valuation 4,707 4,707 - 4,707 4,707 -

60,099 30,426 29,673 47,455 27,150 20,305

Other fixed assets

Cost 14,542 8,481 6,061 13,747 8,599 5,148

valuation 324 324 - 324 324 -

14,866 8,805 6,061 14,071 8,923 5,148

plant and equipment work in progress

Cost 1,043 - 1,043 9,439 - 9,439

plant and equipment – Microbial

developmental project

Cost 1,840 1,578 262 1,828 1,578 250

$104,813 $44,409 $60,404 $98,986 $40,804 $58,182

The aggregate fair value of land and buildings, based on valuations conducted by independent registered valuers

during the current financial year, was $34,796,000 (2005 $23,746,000). The details of the independent registered

valuers were:

- Beca valuations limited – land and buildings of the Cavalier Bremworth carpet operation in new Zealand

- Oracle property – land and buildings of the Cavalier Bremworth carpet operation in Australia

- TelferYoung (hawkes Bay) limited – land and buildings of hawkes Bay Woolscourers

- Adrian Doyle, Registered valuer – land and buildings of elco Direct

These assets are charged by registered mortgages and debentures as security for the group’s secured borrowings.

Other fixed assets consist of motor vehicles, office equipment, computer equipment, fixtures and fittings, and tools.

no impairment losses were recognised during the year (2005 $1,578,000).

The amount of borrowing costs capitalised during the year in respect of buildings and plant and equipment were

$150,000 (2005 $569,000).




39

pARENT

2006 2005 $000 $000

11 INVESTMENTS

shares in subsidiary companies $24,590 $24,590

shares in associated company

The group took up, through 92.5% subsidiary, hawkes Bay Woolscourers limited, an ownership and voting interest

of 50% in Canterbury Woolscourers limited with effect from 31 August 2004. Canterbury Woolscourers was formed to

acquire two south Island scours – one based in Winchester and the other in Washdyke – and to consolidate the two

operations on to the Washdyke site. Canterbury Woolscourers has a 30 June balance date and its principal activity is

commission wool scouring.

GRoup

2006 2005 $000 $000

CARRYING AMOUNT OF ASSOCIATE (INCLUDING GOODWILL)

Carrying amount at beginning of the year 4,231 -

Amount paid on acquisition of shares in associate - 4,550

share of associated company tax-paid deficit (340) (190)

Amortisation of goodwill (155) (129)

Carrying amount at end of the year $3,736 $4,231

GOODWILL RELATING TO INVESTMENT IN ASSOCIATE

goodwill on acquisition of shares in associate 1,550 1,550

Accumulated amortisation (284) (129)

net carrying amount of goodwill $1,266 $1,421

SHARE OF ASSOCIATED COMPANY TAx-PAID DEFICIT

share of operating deficit of associate (487) (275)

share of provision for tax of associate 147 85

net recognised revenues and expenses $(340) $(190)

Canterbury Woolscourers limited had no commitments for capital expenditure at 30 June 2006 (2005 $2,060,000).

GRoup pARENT

2006 2005 2006 2005 $000 $000 $000 $000

12 GOODWILL

Balance at beginning of the year 2,371 2,866 - -

goodwill amortised (435) (495) - -

Balance at end of the year $1,936 $2,371 - -

gross carrying amount 4,290 4,290 - -

Accumulated amortisation (2,354) (1,919) - -

Balance at end of the year $1,936 $2,371 - -



40

GRoup pARENT

2006 2005 2006 2005 $000 $000 $000 $000

13 DEVELOPMENT ExPENDITURE

Balance at beginning of the year - 5,825 - -

Development expenditure capitalised - 1,293 - -

Development expenditure written off - (7,118) - -

Balance at end of the year - - - -

Capitalised development expenditure related to the expenditure associated with the Microbial developmental project.

This capitalised expenditure was written off at the end of June 2005, following an assessment by the Board of Directors

that the technology may not be sufficiently robust to assure commercial success and that commercial production of the

product may therefore not commence.

14 TERM RECEIVABLES

hire purchase debtors 493 719 - -

provision for unearned finance income (20) (37) - -

provision for doubtful debts (9) (14) - -

net hire purchase debtors 464 668 - -

less current portion repayable within one year (464) (668) - -

Term hire purchase debtors - - - -

Term hire purchase debtors fall due for

repayment in the following periods:

After one year but within two years - - - -

These assets are charged by debentures as security for the group’s secured borrowings.

15 DEFERRED TAx ASSET

Balance at beginning of the year 3,363 1,588 23 23

Deferred tax portion of income tax expense (1,191) 1,777 (23) -

effect of translation of foreign subsidiary 60 (2) - -

Balance at end of the year $2,232 $3,363 - $23

16 CURRENT ASSETS

Cash at bank 3,160 1,355 9 7

Trade debtors 28,104 30,609 - -

Other debtors and prepayments 2,888 1,932 - -

short-term advance to associated company 4,273 670 - -

stocks - Raw materials 15,037 16,098

- Work-in-progress 1,966 1,710

- Finished goods 27,262 25,913

- Total 44,265 43,721 - -

Income tax refund 2,025 1,393 - 3

Advances to subsidiaries - - 35,633 24,609

$84,715 $79,680 $35,642 $24,619

These assets are charged by debentures as security for the group’s secured borrowings.

Amounts advanced on a short-term basis to associated company, Canterbury Woolscourers limited, during the year

were at commercial interest rates. The interest rate at balance date in respect of these advances was 8.3%.




4�

GRoup pARENT

2006 2005 2006 2005 $000 $000 $000 $000

17 CASH FLOWS

Cash comprises cash at bank, bank overdraft,

and short-term borrowings as follows:

Cash at bank 3,160 1,355 9 7

Bank overdraft (168) (135) - -

short-term borrowings (4,934) (2,065) - -

Cash at end of the year $(1,942) $(845) $9 $7

Investing activities comprise the purchase and sale of non-current assets used in the operations of the group. All

investing activities during the year were for cash.

Financing activities comprise the change in the equity and debt capital structure and the cost of servicing that equity

capital. All financing activities during the year were for cash.

THE OPERATING SURPLUS AFTER TAx CAN BE RECONCILED WITH THE

NET CASH INFLOW FROM OPERATING ACTIVITIES AS FOLLOWS:

Operating surplus after tax as per the

statement of Financial performance 14,390 14,110 18,036 16,245

Adjust for non-cash items:

Amortisation of goodwill 590 624 - -

Depreciation 5,444 4,343 - -

Fair value of share rights expensed 153 138 153 138

Movements in deferred tax 1,191 (1,775) 23 -

net (gain)/loss on foreign currency balance (123) 87 - -

share of associated company tax-paid deficit 340 190 - -

Write-downs relating to the Microbial

development project - 8,696 - -

7,595 12,303 176 138

Adjust for movements in non-current assets:

Development expenditure - (1,293) - -

Term receivables - 126 - -

- (1,167) - -

Adjust for movements in working capital items:

Trade debtors 3,075 (4,051) - -

Other debtors and prepayments (889) (761) - -

stocks 232 (5,963) - -

Income tax refund/provision for tax (662) (2,598) 222 112

employee entitlements (276) (346) - -

Trade creditors and accruals 1,253 1,945 (84) (1)

2,733 (11,774) 138 111

Adjust for items classified as investing activities:

net (gain)/loss on sale of fixed assets 23 (87) - -

net cash inflow from operating activities $24,741 $13,385 $18,350 $16,494



4�


18 FINANCIAL REPORTING FOR SEGMENTS

The group operates in two industry segments – carpet and wool. The carpet operation is involved with the manufacturing

and sales of the Bremworth, Cavalier Bremworth, Knightsbridge, Kimberley, Tramore, and Ontera brands of carpet. The

wool operation is involved with the procurement and processing of raw wool.

For financial reporting purposes, statement of standard accounting practice ssAp-23 treats the group as having its

operations in two geographical segments – new Zealand and Australia. The new Zealand geographical segment

comprises the activities of the Cavalier Bremworth carpet operation, which covers the manufacturing and sales of the

Bremworth, Cavalier Bremworth, Knightsbridge, Kimberley, and Tramore brands of carpet, and the wool operations. The

Australian geographical segment comprises the activities of sydney-based Ontera Modular Carpets, which the group

acquired on 1 July 2002. The Australian activities of the Cavalier Bremworth carpet operation do not extend beyond

facilitating export sales from new Zealand and are therefore classified as activities of the new Zealand geographical

segment in accordance with ssAp-23.

All inter-segmental sales are at market prices. Inter-segmental sales during the period and intercompany profits on

stocks at balance date are eliminated on consolidation.

The industry and geographical segmental information is set out on the following pages.

INDUSTRY SEGMENTAL INFORMATION COnsOlIDATIOn CARpeT WOOl ADJusTMenTs COnsOlIDATeD 2006 2005 2006 2005 2006 2005 2006 2005 $000 $000 $000 $000 $000 $000 $000 $000

SEGMENT REVENUE

Revenue derived

outside the group 157,795 158,690 43,899 49,067 - - 201,694 207,757

Inter-segment revenue - - 5,443 7,161 (5,443) (7,161) - -

Interest received 53 83 - - - - 53 83

Total revenue $201,747 $207,840

SEGMENT RESULTS

Operating surplus

before corporate

costs, interest, and

income tax 27,256 32,599 1,722 2,098 - - 28,978 34,697

Corporate costs (1,559) (1,745)

unallocated costs (970) -

Abnormal costs - (8,696)

net interest expense (4,498) (2,854)

Operating surplus

before income tax $21,951 $21,402

SEGMENT ASSETS

segment assets 128,343 123,484 24,105 23,532 - - 152,448 147,016

unallocated assets 575 811

Total assets $153,023 $147,827

OTHER SEGMENT INFORMATION

Depreciation 4,460 3,393 984 950 - - $5,444 $4,343

EMPLOYEE NUMBERS

Operations 728 765 86 80 - - 814 845

unallocated 4 3

Total 818 848



43

18 FINANCIAL REPORTING FOR SEGMENTS (continued)

GEOGRAPHICAL SEGMENTAL INFORMATION COnsOlIDATIOn neW ZeAlAnD AusTRAlIA ADJusTMenTs COnsOlIDATeD 2006 2005 2006 2005 2006 2005 2006 2005 $000 $000 $000 $000 $000 $000 $000 $000

SEGMENT REVENUE

Revenue derived

outside the group 163,471 174,068 38,223 33,689 - - 201,694 207,757

Inter-segment revenue - - - - - - - -

Interest received 53 83 - - - - 53 83

Total revenue $201,747 $207,840

SEGMENT RESULTS

Operating surplus

before corporate

costs, interest and

income tax 23,990 30,297 4,988 4,400 - - 28,978 34,697

Corporate costs (1,559) (1,745)

unallocated costs (970) -

Abnormal costs - (8,696)

net interest expense (4,498) (2,854)

Operating surplus

before income tax $21,951 $21,402

SEGMENT ASSETS

segment assets 132,519 130,430 19,929 16,586 - - 152,448 147,016

unallocated assets 575 811

Total assets $153,023 $147,827

OTHER SEGMENT INFORMATION

Depreciation 4,576 3,650 868 693 - - $5,444 $4,343

EMPLOYEE NUMBERS

Operations 727 764 87 81 - - 814 845

unallocated 4 3

Total 818 848

GRoup pARENT

2006 2005 2006 2005 $000 $000 $000 $000

19 RELATED PARTY TRANSACTIONS

The unsecured short-term borrowings as detailed in note 9 is

made up of borrowings from the following related parties:

Chippendale holdings limited 3,274 1,050 - -

Rural Aviation (1963) limited 1,660 1,015 - -

$4,934 $2,065 - -

These borrowings are repayable on demand. At balance date, the interest rate on these borrowings was 7.3% (2005

6.8%). This compares with commercial interest rate, at balance date, of 7.35% (2005 6.85%) for borrowings of a

similar tenure from AnZ national Bank limited.

Chippendale holdings limited and Rural Aviation (1963) limited are substantial security holders in the Company.



44

GRoup

2006 2005 $000 $000

20 IMPUTATION CREDIT ACCOUNT

Balance at beginning of the year 19,641 19,049

Income tax paid/(refunded) 3,879 9,250

Imputation credits attached to dividends paid (7,178) (8,658)

Balance at end of the year $16,342 $19,641

The parent Company is a member of the Cavalier Corporation consolidated group for tax purposes and its imputation

credit account entries are accounted for within the group.

GRoup

2006 2005

$000 $000

21 LEASE COMMITMENTS

The group’s commitments in respect of operating lease agreements were:

Within one year 3,191 2,453

After one year but within two years 2,926 1,384

After two years but within five years 7,435 1,893

After five years 3,139 3,478

The parent had no operating lease commitments at 30 June 2006 (2005 nil).

neither the group nor the parent had any finance lease commitments at 30 June 2006 (2005 nil).

22 CAPITAL COMMITMENTS

The group had commitments for capital expenditure at 30 June 2006 of $2,203,000 (2005 $2,995,000).

The parent had no capital commitments at 30 June 2006 (2005 nil).

GRoup pARENT

2006 2005 2006 2005 $000 $000 $000 $000

23 CONTINGENT LIABILITIES

Bank guarantee in respect of operating lease 292 262 - -

Bank guarantees in relation to subsidiary

company obligations - - 49,820 50,677

$292 $262 $49,820 $50,677

some of the companies in the group are parties to a cross guarantee in favour of the AnZ Banking group (new

Zealand) limited securing each other’s obligations.




45

24 FINANCIAL INSTRUMENTS

MANAGEMENT POLICIES

It is the group’s policy to hedge foreign currency risks on trade-related transactions as they arise. however, this

general policy may be varied from time to time, when circumstances dictate, so that existing currency risks are left

unhedged or anticipated future currency risks are hedged.

The group does not engage in speculative transactions or hold derivative financial instruments for trading purposes.

The group’s policy also requires that exposures to foreign currency risks are reported to and reviewed by the Board of

Directors, monthly.

Interest rate risks are continually monitored having regard to the circumstances at any given time. When circumstances

dictate, interest rate swaps, interest rate options, and forward rate agreements are entered into to hedge against

fluctuations in interest rates.

FAIR VALUE

The carrying amounts and estimated fair values of the group’s financial assets and liabilities at 30 June 2006 were as

follows:

GRoup

2006 2005 CARRYING FAIR CARRYIng FAIR AMOUNT VALUE AMOunT vAlue $000 $000 $000 $000

Cash at bank 3,160 3,160 1,355 1,355

Trade debtors 28,104 28,104 30,609 30,609

Other debtors 2,888 2,888 1,932 1,932

short-term advance to associated company 4,273 4,273 670 670

Foreign currency forward exchange contracts - (1,893) - 26

Foreign currency option agreements - (132) - (16)

Interest rate swaps - 32 - 35

Term liabilities (59,976) (59,976) (59,802) (59,802)

Bank overdraft (168) (168) (135) (135)

short-term borrowings (4,934) (4,934) (2,065) (2,065)

Trade creditors and accruals (17,342) (17,342) (15,673) (15,673)

The following methods and assumptions were used to estimate the fair value of each class of financial assets and

liabilities:

CASH AT BANK, TRADE DEBTORS, OTHER DEBTORS, BANK OVERDRAFT, SHORT-TERM BORROWINGS,

AND TRADE CREDITORS AND ACCRUALS

The carrying amounts of these items are equivalent to their fair values.

FOREIGN CURRENCY FORWARD ExCHANGE CONTRACTS AND OPTION AGREEMENTS

The fair values of these instruments are estimated based on their quoted market prices at balance date.

TERM LIABILITIES

The carrying amounts of the group’s term liabilities are equivalent to their fair values because these liabilities are at

interest rates which approximate the interest rates currently available to the group for debts of similar maturities.

OFF BALANCE SHEET RISK

The group has entered into foreign currency forward exchange contracts and foreign currency option agreements to

manage its exposure to fluctuations in foreign currency exchange rates.

Whilst these financial instruments are subject to the risk that exchange rates may change subsequent to implementation,

such changes would generally be offset by the equal and opposite effects on the balances being hedged.



46

24 FINANCIAL INSTRUMENTS (continued)

The notional principal or contract amounts outstanding at 30 June 2006 were as follows:

GRoup

2006 2005 $000 $000

Foreign currency forward exchange contracts

- nZD purchase commitments 40,685 4,360

- nZD sell commitments 4,370 6,719

Foreign currency options

- nZD call options purchased 4,434 3,270

- nZD put options sold 5,543 6,540

Interest rate swaps 34,921 19,323

CREDIT RISK

Foreign currency forward exchange contracts and foreign currency option agreements have been entered into with

parties approved by the Board of Directors as having the required credit ratings. The group’s exposure to credit

risk from these financial instruments is limited because it does not expect the non-performances of the obligations

contained therein due to the high credit ratings of the financial institutions concerned. The group does not require any

collateral or security to support these financial instruments.

The group places its surplus funds with trading banks approved by the Board of Directors as having the required credit

rating and further minimises its credit exposure by limiting the amount placed with any one bank at any one time.

Credit risk exposure with respect to debtors is limited by stringent credit controls, by the utilisation of irrevocable

letters of credit and trade insurances wherever required, and by the large number of customers within the group’s

customer base.

The parent had no financial instruments at 30 June 2006 (2005 nil), and all financial assets and liabilities at balance

date were stated at fair value.

25 FOREIGN CURRENCY DENOMINATED ASSETS AND LIABILITIES

At 30 June 2006, the group had the following foreign currency denominated monetary assets and monetary liabilities

which were not hedged:

GRoup

2006 2005

Assets Liabilities Assets liabilities

$000 $000 $000 $000

united states Dollars - - usD 33 -

great British pounds GBP 81 - gBp 81 -

euro - EUR 251 - -

The conversion rate at balance date for the gBp was .3322 and euR .4790.

26 EVENTS AFTER BALANCE DATE

The following are the non-adjustable events after balance date affecting the parent and the group:

DIVIDENDS

The Directors declared, on 18 August 2006, a fully imputed final dividend of 10 cents per ordinary share on the

65,495,595 shares on issue to give a total final dividend of $6,549,560.




47

27 INTERNATIONAL FINANCIAL REPORTING STANDARDS

In December 2002, the new Zealand Accounting standards Review Board announced that new Zealand standards

which comply with International Financial Reporting standards (“nZ IFRs”) will apply to new Zealand entities for

periods commencing 1 January 2007. entities also have the option of early adoption from 1 January 2005, in line with

Australian and european requirements.

The group has commenced a project to identify the key impacts from adoption of nZ IFRs.

On transition to nZ IFRs, the group will be required to restate comparative financial statements using nZ IFRs. All

adjustments required on transition to nZ IFRs will be made retrospectively against opening retained earnings in an

opening balance sheet.

The differences between existing nZ gAAp and nZ IFRs identified as potentially having a significant effect on Cavalier’s

parent and consolidated financial performance and financial position have not yet been quantified by Cavalier.

no attempt has been made to identify all disclosure, presentation or classification differences that would affect

the manner in which transactions or events are presented. Only a complete set of financial statements and notes

together with comparative balances can provide a true and fair presentation of Cavalier’s financial position, results of

operations and cash flows in accordance with nZ IFRs.

The purpose of this disclosure is, therefore, to provide a summary of the potential impact that Cavalier expects as a

result of transitioning to nZ IFRs from current nZ gAAp based on the standards as they are today. The summary should

not be taken as an exhaustive list of all the differences between existing nZ gAAp and nZ IFRs. It is possible that

future developments to nZ IFRs will change the nature of the adjustments required by the time Cavalier reports its first

financial statements prepared under nZ IFRs.

Cavalier’s first IFRs-compliant set of financial statements will be for the financial year ending 30 June 2008. This means

that the financial position as at 30 June 2006 would have to be restated to nZ IFRs to provide a starting position for

the comparative 2007 financial year. Cavalier intends to continue to provide users of the financial statements with

updated information about the likely impacts of nZ IFRs on Cavalier’s earnings, cash flows and financial position.

GOODWILL

goodwill relating to the acquisition of hawkes Bay Woolscourers limited and Canterbury Woolscourers limited is

currently amortised over 10 years. nZ IFRs does not permit goodwill to be amortised. As a result, goodwill amortisation

will cease, but goodwill will be subject to impairment tests at balance dates.

FINANCIAL INSTRUMENTS

Accounting for financial instruments under nZ IFRs involves some major changes from nZ gAAp. If Cavalier qualifies

for hedge accounting, all derivative contracts will be carried at fair value on Cavalier’s balance sheet. Changes in the

fair value of derivative contracts held as effective hedges of future cash flows will be reflected in a reserve until the

hedged transaction occurs. If Cavalier does not qualify for hedge accounting, then all derivative contracts will have to

be marked to market and all resulting profits or losses will have to be recognised in the income statement.

LONG-TERM EMPLOYEE BENEFITS

Currently, under Cavalier’s nZ gAAp accounting policies, long service leave and retirement benefits are recognised

when they vest. under nZ IFRs, these employee benefits will be accrued from the date an employee is first employed,

to the extent that it is probable that the benefit will eventually vest. Accordingly, Cavalier will record long service

leave and retirement benefit at the present value of the current obligation calculated on this basis. This will increase

liabilities and reduce retained earnings on transition date.

DEFERRED TAx

nZ IFRs requires the use of the “balance sheet” approach rather than the “income statement” approach applied

under nZ gAAp. This will be calculated as a difference between accounting and tax base at each reporting date. Initial

analysis indicates that Cavalier is likely to recognise additional deferred tax assets and liabilities as a result of this

change in approach.



48

2006 2005 2004 2003 2002 2001 2000 1999

$000 $000 $000 $000 $000 $000 $000 $000

FINANCIAL PERFORMANCE

Operating revenue $201,747 $207,840 $198,633 $193,222 $164,787 $188,780 $218,391 $201,329

eBITDA and abnormal items 32,483 37,919 38,213 34,163 25,810 23,447 24,924 21,966

Abnormal items - (8,696) 1 - - - (3,052) 2 - -

eBITDA 32,483 29,223 38,213 34,163 25,810 20,395 24,924 21,966

Depreciation (5,444) (4,343) (3,510) (3,560) (3,094) (2,965) (2,990) (2,960)

Amortisation (590) (624) (430) (308) (308) (164) (139) (63)

eBIT 26,449 24,256 34,273 30,295 22,408 17,266 21,795 18,943

net interest expense (4,498) (2,854) (2,079) (1,979) (1,888) (974) (2,394) (3,082)

Operating surplus before tax 21,951 21,402 32,194 28,316 20,520 16,292 19,401 15,861

Income tax expense (7,561) (7,292) (10,761) (9,460) (6,986) (5,297) (6,304) (5,269)

Operating surplus after tax 14,390 14,110 21,433 18,856 13,534 10,995 13,097 10,592

Minority interest (385) (411) (422) (593) (383) (746) - -

net operating surplus

attributable to shareholders

of the Company 14,005 13,699 21,011 18,263 13,151 10,249 13,097 10,592

Ordinary dividends declared (14,737) (17,600) (16,302) (13,069) (10,864) (10,797) (10,077) (9,357)

surplus after dividends $(732) $(3,901) $4,709 $5,194 $2,287 $(548) $3,020 $1,235

FINANCIAL POSITION

shareholders’ equity 64,484 63,904 67,397 63,226 57,699 55,198 80,095 77,075

Term liabilities 59,976 59,802 37,288 28,566 26,467 13,595 28,409 55,484

Current liabilities 28,563 24,121 25,054 23,718 21,776 41,508 18,412 16,333

shareholders’ equity

and total liabilities $153,023 $147,827 $129,739 $115,510 $105,942 $110,301 $126,916 $148,892

Fixed assets 60,404 58,182 52,373 41,259 40,395 39,250 36,788 35,234

Investment in associate 3,736 4,231 - - - - - -

goodwill 1,936 2,371 2,866 2,080 2,388 2,696 350 413

Development expenditure - - 5,825 4,716 3,725 2,809 2,030 1,397

Term receivables - - 126 139 113 1,272 212 987

Deferred tax asset 2,232 3,363 1,588 1,332 1,686 2,448 1,708 1,243

non-current assets 68,308 68,147 62,778 49,526 48,307 48,475 41,088 39,274

Current assets 84,715 79,680 66,961 65,984 57,635 61,826 85,828 109,618

Total assets $153,023 $147,827 $129,739 $115,510 $105,942 $110,301 $126,916 $148,892

1 Write-down of assets relating to the Microbial developmental project2 Closure of the lichtenstein merchant wool scouring operation

TREND STATEmENT

trend Statement


49

2006 2005 1 2004 2003 2002 2001 2 2000 1999

FINANCIAL RATIOS AND SUMMARY

USE OF FUNDS AND

RETURN ON INVESTMENT

Return on average

shareholders’ equity 22.4% 21.5% 32.8% 31.2% 24.0% 13.7% 16.7% 13.9%

nOpAT : Total funds

employed 13.8% 12.9% 21.4% 21.6% 16.4% 12.4% 13.3% 9.4%

Basic earnings per

ordinary share 21.4c 21.0c 32.7c 29.0c 20.9c 14.2c 18.2c 14.7c

FINANCIAL STRUCTURE

net tangible asset backing

per ordinary share $0.93 $0.92 $0.89 $0.88 $0.80 $0.78 $1.08 $1.05

proprietorship ratio 42.1% 43.2% 51.9% 54.7% 54.5% 50.0% 63.1% 51.8%

net interest-bearing debt :

equity ratio 49:51 49:51 37:63 32:68 36:64 20:80 28:72 42:58

net interest cover (times) 5.9 8.5 16.5 15.3 11.9 17.7 9.1 6.1

RETURNS TO SHAREHOLDERS

Dividends paid per ordinary

share (excluding

supplementary) 22.50c 27.00c 25.50c 20.75c 17.25c 15.00c 14.00c 13.00c

Dividend imputation 100% 100% 100% 100% 100% 100% 100% 100%

Ordinary dividend cover

(times) 1.0 0.8 1.3 1.4 1.2 0.9 1.3 1.1

supplementary dividends

paid per ordinary share 3.97c 4.76c 4.50c 3.66c 3.04c 2.65c 2.47c 2.29c

SHARE PRICE

June $3.15 $4.05 $4.84 $4.80 $3.10 $2.73 $1.69 $1.75

52 week high $4.10 $5.10 $5.70 $4.95 $3.20 $2.82 $1.88 $1.88

52 week low $2.40 $3.30 $4.40 $2.85 $2.44 $1.60 $1.54 $1.08

MARKET CAPITALISATION ($000)

June $206,311 $265,257 $314,186 $302,310 $195,242 $171,939 $121,644 $125,962

CAPITAL ExPENDITURE AND

DEPRECIATION ($000)

Capital expenditure $7,041 $11,793 $15,160 $3,515 $4,674 $10,655 $4,808 $2,909

Depreciation $5,444 $4,343 $3,510 $3,560 $3,094 $2,965 $2,990 $2,960

1 Write-down of assets relating to the Microbial developmental project2 Closure of the lichtenstein merchant wool scouring operation

trend Statement


50

earnings before interest, tax, depreciation, Operating surplus before tax plus net interest expense, depreciation,

and amortisation (eBITDA) and amortisation

earnings before interest and tax (eBIT) Operating surplus before tax plus net interest expense

net operating profit after tax (nOpAT) eBIT less theoretical tax on eBIT

net assets Total assets less total liabilities

Total funds employed shareholders’ equity plus net interest-bearing liabilities, or

Total assets less cash at bank less non interest-bearing liabilities

USE OF FUNDS AND RETURN ON INVESTMENT

Return on average shareholders’ equity Operating surplus after tax

Average shareholders’ equity

nOpAT : Total funds employed nOpAT

Total funds employed

Basic earnings per ordinary share net operating surplus attributable to shareholders of the Company

Weighted average number of ordinary shares on issue during the year

FINANCIAL STRUCTURE

net tangible asset backing per

ordinary share net assets less goodwill, development expenditure, and minority interest

number of ordinary shares on issue at balance date

proprietorship ratio shareholders’ equity

shareholders’ equity and total liabilities

net interest-bearing debt : equity ratio Interest-bearing debt less cash at bank

shareholders’ equity

net interest cover eBIT

net interest expense

RETURNS TO SHAREHOLDERS

Ordinary dividend cover net operating surplus attributable to shareholders of the Company

Ordinary dividends declared

GloSSARY of fiNANCiAl TERmS

GloSSarY of f inancial termS


5�

DIRECTORS (S211(1)(i))

The Directors of the Company as at 30 June 2006 were:

g C W Biel

W K Chung

R g ebbett

g s hawkins

A M James

v T s Tan

K l Thorpe

A C Timpson

INTERESTS REGISTER (S189(1)(c)) (S211(1)(e))

The Companies Act 1993 requires the Company to maintain an interests register in which are recorded the particulars

of certain transactions and matters (eg. use of company information, share dealing, remuneration, and indemnity and

insurance) involving the Directors. It further requires particulars of the entries in this interests register for the year to be

disclosed in the Annual Report.

USE OF COMPANY INFORMATION (S145)

During the year, no notices were received from the Directors regarding the use of company information that would not

otherwise have been available to them, except in their capacity as directors.

SHARE DEALING (S148)

notices in relation to share dealings were received from the following during the year:

R G Ebbett – Acquired, on

29 november 2005, a relevant interest in 10,000 ordinary shares at $2.63 per share

A M James – Transferred, on

12 september 2005, a relevant interest in 373,045 ordinary shares at $3.90 per

share and 380,000 share rights from A M James, A White-James and W K Chung

(as trustees of the JWJ Family Trust) to A M James and A White-James

(as trustees of the JWJ super Fund)

K L Thorpe – Acquired, on


A C Timpson – Acquired, on


19 December 2005, a relevant interest in 15,000 ordinary shares at $2.40 per share

REMUNERATION (S161)

The Board authorised during the year:

• an increase in the base remunerations of W K Chung by $25,000 per annum with effect from 1 July 2005

• an increase in the base remuneration of v T s Tan by $25,000 per annum with effect from 1 July 2005

• increases in the directors’ fees paid to g C W Biel, R g ebbett, g s hawkins, K l Thorpe, and A C Timpson by $5,000

per annum with effect from 1 April 2006 and those paid to A M James by $17,000 per annum with effect from 1 April

2006. The last time directors’ fees paid to the non-executive Directors were changed was on 1 July 2002.

DiSCloSuRES uNDER ThE CompANiES ACT �993FOR THE YEAR ENDED 30 JUNE 2006

diScloSUreS Under the companieS act 1993


5�

Directors’ relevant interests in shares in the Company at 30 June 2006 were:

g C W Biel

Beneficial -

Other 8,467,642

W K Chung

Beneficial 220,107 2

Other -

R g ebbett

Beneficial 34,146

Other -

g s hawkins

Beneficial 10,250 2

Other -

A M James


Other -

v T s Tan


Other -

K l Thorpe

Beneficial 21,000

Other -

A C Timpson

Beneficial 389,016

Other -

Directors’ relevant interests in rights under the Cavalier Corporation limited 2000 executive share Rights plan1 at 30 June

2006 were:

W K Chung


Other -

A M James


Other -

v T s Tan


Other -

1 A summary of the terms of the plan is set out on pages 35 and 36 of this document (note 7 of the notes to the Financial

statements).2 Includes those held by trusts of which the Director is a beneficiary

INDEMNITY AND INSURANCE (S162)

During the year, the Company effected directors’ and officers’ liability insurance to cover, to the extent normally covered

by such policies, the risks arising out of the acts or omissions of the Directors and employees of the Company and its

subsidiaries in their capacity as such. The cost of this cover is $19,500.

SPECIFIC DISCLOSURES OF INTEREST (S140(1))

no specific disclosures of interest were received during the year.

DiSCloSuRES uNDER ThE CompANiES ACT �993 (CoNTiNuED)FOR THE YEAR ENDED 30 JUNE 2006



53

GENERAL DISCLOSURES OF INTEREST (S140(2))

general disclosures of interest that have been received and are still current are:

G C W Biel – Director and shareholder of:

Auckland Air Charter limited

heli harvest limited

Rural Aviation (1963) limited

W K Chung – Trustee of JWJ Family Trust and JvT Family Trust

Director of:

Canterbury Woolscourers limited

R G Ebbett – Director of:

Acma Capital (n.Z.) limited

Anglesea properties limited

horticom limited

Renaissance Corporation limited

Director and shareholder of:

ebbett Waikato group limited

G S Hawkins – Director of:

Ballance Agri-nutrients limited

Fonterra Co-operative group limited

horizon energy Distribution limited

liggins Institute

Watercare services limited

Director and shareholder of:

Biomed limited

hawkins Consulting services limited

link International group limited

stableburn Farms limited

Trustee of hawkins Family Trust and McDowell Family Trust

A M James – none

V T S Tan – Trustee of CWC Family Trust

Alternate Director of:

Mr David Ferrier in Canterbury Woolscourers limited

K L Thorpe – Director of:

Aragorn limited

Custom Consulting limited

swift and Moore pty limited

Zespri group limited

A C Timpson – Director of:

Chippendale holdings limited

Marama Trading limited

pauanui publishing limited

shareholder of:

Radford Yarn Technology limited



54

DiSCloSuRES uNDER ThE CompANiES ACT �993 (CoNTiNuED)FOR THE YEAR ENDED 30 JUNE 2006

DIRECTORS’ REMUNERATION (S211(1)(f))

The total remuneration and value of other benefits earned (received, and due and receivable) by each of the Directors of

the Company for the year ended 30 June 2006 were:

2006 2005

g C W Biel $31,250 $30,000

W K Chung $464,994 $490,184

R g ebbett $31,250 $30,000

g s hawkins $31,250 $30,000

A M James $60,211 $53,000

v T s Tan $346,567 $381,937

K l Thorpe $31,250 $30,000

A C Timpson $31,250 $30,000

EMPLOYEES’ REMUNERATION (S211(1)(g))

The number of employees of the Company and its subsidiaries (excluding employees holding office as directors of the

Company, but including other employees holding office as directors of subsidiaries) whose remuneration and value of

other benefits for the year ended 30 June 2006 fall into the various brackets specified by the Companies Act 1993 is as

follows:

ReMuneRATIOn AnD vAlue nuMBeR OF eMplOYees

OF OTheR BeneFITs ($) 2006 2005

100,000 – 109,999 11 6

110,000 – 119,999 5 8

120,000 – 129,999 4 6

130,000 – 139,999 1 -

140,000 – 149,999 1 1

150,000 – 159,999 5 2

160,000 – 169,999 2 2

170,000 – 179,999 2 -

180,000 – 189,999 - -

190,000 – 199,999 - 4

200,000 – 209,999 - 4

210,000 – 219,999 - 1

220,000 – 229,999 1 -

230,000 – 239,999 1 -

240,000 – 249,999 - 1

250,000 – 259,999 - -

260,000 – 269,999 2 -

270,000 – 279,999 - -

280,000 – 289,999 - 1

300,000 – 309,999 - 1

330,000 – 339,999 1 1

340,000 – 349,999 1 -

400,000 – 409,999 - 1

TOTAL NUMBER OF EMPLOYEES 37 39

DONATIONS (S211(1)(h), S211(2))

Refer to page 33 of this document (note 3 of the notes to the Financial statements).

AUDIT FEES (S211(1)(j), S211(2))

Refer to page 33 of this document (note 3 of the notes to the Financial statements).



55

SUBSIDIARY COMPANY DIRECTORS (S211(2))

The following persons respectively held office as directors of subsidiary companies at the end of the year:

suBsIDIARIes DIReCTORs

Cavalier Bremworth limited g C W Biel

and Cavalier spinners limited W K Chung

A M James

A C Timpson

Cavalier Bremworth (Australia) limited g C W Biel

and Kimberley Carpets pty. limited W K Chung

D M Cotton

A M James

A C Timpson

Cavalier holdings (Australia) limited g C W Biel

and Cavalier Bremworth pty. limited W K Chung

D M Cotton

A M James

Cavalier Bremworth (north America) limited g C W Biel

and northern prospecting limited W K Chung

A C Timpson

e lichtenstein and Company limited, W K Chung

elco Direct limited, A M James

elcopac limited, A C Timpson

elcotex limited,

elcowool limited,

e-Wool limited,

heron Distributors limited

and Knightsbridge Carpets limited

hawkes Bay Woolscourers limited g C W Biel

W K Chung (alternate of g C W Biel)

D M Ferrier

A M James

Microbial Technologies limited W K Chung

D J Cooper

A M James

D e pinnock

v T s Tan

A C Timpson

Ontera Modular Carpets pty. limited e Allemano

W K Chung

A M James

There were no retirements or resignations of subsidiary company directors during the year.

no subsidiary company directors received, in their capacity as such, directors’ fees or other benefits from the subsidiaries.

The details of entries in the interests register and the remuneration and value of other benefits of subsidiary company

directors who are also the Directors of the Company are set out on pages 51 to 54.

There were no entries in the interests register in respect of any of the subsidiary company directors who are not also the

Directors of the Company. The remuneration and value of other benefits of these directors is disclosed under employee

remuneration on page 54.



56

DiSCloSuRES uNDER ThE NEW ZEAlAND ExChANGE liSTiNG RulESAS AT 25 AUgUST 2006

ANALYSIS OF SHAREHOLDINGS (LISTING RULE 10.5.1) nuMBeR OF shARes shARehOlDeRs % helD %

SIzE OF SHAREHOLDINGS

up to 199 91 1.5 7,156 0.0

200 - 499 171 2.9 58,823 0.1

500 - 999 374 6.4 270,473 0.4

1,000 – 1,999 1,143 19.4 1,628,904 2.5

2,000 - 4,999 1,834 31.1 5,790,968 8.8

5,000 - 9,999 1,154 19.6 7,819,670 12.0

10,000 - 49,999 1,019 17.3 18,278,392 27.9

50,000 - 99,999 70 1.2 4,647,982 7.1

Over 99,999 35 0.6 26,993,227 41.2

5,891 100.0 65,495,595 100.0

LOCATION OF SHAREHOLDERS

new Zealand 5,765 97.9 64,433,849 98.4

Overseas – Australia 74 1.2 730,314 1.1

– Others 52 0.9 331,432 0.5

5,891 100.0 65,495,595 100.0

TOP 20 SHAREHOLDERS

Chippendale holdings limited 8,886,490 13.6

Rural Aviation (1963) limited 8,467,642 12.9

new Zealand Central securities Depository limited 2,640,569 4.0

First new Zealand Capital Custodians limited 908,584 1.4

peter hanbury Masfen and Joanna Alison Masfen 787,500 1.2

Anthony Charles Timpson 389,016 0.6

Alan Michael James and Ann White-James 373,045 0.6

Forbar Custodians limited 279,947 0.4

Custodial services limited 268,471 0.4

J & D sands limited 250,000 0.4


Mary Dorcas spackman 240,000 0.4

Wayne Keung Chung, Colleen linda Chung and victor Thien soo Tan 214,603 0.3

private nominees limited 213,522 0.3

herbert Charles Wilson 204,000 0.3

nicolaas Johannes Kaptein 200,000 0.3

Chi-ping lui 175,000 0.3

Forbar Custodians limited 167,519 0.3


Wiedemann Trustee limited 155,234 0.2

25,230,489 38.5

diScloSUreS Under the neW zealand exchanGe l iStinG rUleS


57

NEW zEALAND CENTRAL SECURITIES DEPOSITORY LIMITED

new Zealand Central securities Depository limited provides a custodial depository service to offshore and institutional

shareholders and does not have a beneficial interest in the shares registered in its name. The beneficial owners of the

shares registered in its name as at 25 August 2006 were:

shARes helD %

Accident Compensation Corporation 913,636 1.39

guardian Trust Investment nominees (RWT) limited 695,625 1.06

Citibank nominees (new Zealand) limited 355,146 0.54

new Zealand guardian Trust Investment nominees limited 153,451 0.24

AnZ nominees limited 124,021 0.19

AMp superannuation Tracker Fund 115,400 0.18

nZ superannuation Fund nominees limited 100,161 0.15

TeA Custodians limited 90,000 0.14

Tracker nominees – AMp Investments 38,171 0.06

Courtenay nominees limited 21,000 0.03

public Trust – Account gIF no. 41 15,575 0.02

national nominees new Zealand limited 12,200 0.02

Westpac Banking Corporation – Client Assets number 2 6,183 0.01

2,640,569 4.03

DIRECTORS’ AND ASSOCIATED PERSONS’ SHAREHOLDINGS

30 June 2006

BeneFICIAl nOn-BeneFICIAl

SHARES

g C W Biel - 8,526,262 1

W K Chung 220,107 4 -

R g ebbett 34,146 -

g s hawkins 10,250 4 -

A M James 373,045 4 -

v T s Tan 149,350 4 1,322 2

K l Thorpe 21,000 -

A C Timpson 389,016 8,902,164 2

RIGHTS UNDER THE CAVALIER CORPORATION

LIMITED 2000 ExECUTIVE SHARE RIGHTS PLAN 3

W K Chung 560,000 4 -

A M James 380,000 4 -

v T s Tan 350,000 4 -

1 Includes 58,620 held by associated persons.

2 All held by associated persons.

3 A summary of the terms of the plan is set out on pages 35 and 36 of this document (note 7 of the notes to the Financial

statements).

4 Includes those held by trusts of which the Director is a beneficiary.

diScloSUreS Under the neW zealand exchanGe l iStinG rUleS


58

APPENDIx 1

30 June

2006 2005

Return on Assets (eBIT divided by Total Assets) 17.3% 16.4%

Return on equity (net Income divided by shareholders’ equity) 22.3% 22.1%

Debt to equity Ratio (Total liabilities divided by shareholders’ equity) 137.3% 131.3%

Dividend Yield (based on Dividend paid) 10.66% 9.95%

Tax Adjusted Dividend Yield (based on Dividend paid) 7.14% 6.67%

SUBSTANTIAL SECURITY HOLDERS (S26)

The substantial security holders of the Company in respect of whom notices have been received were:

nuMBeR OF vOTIng seCuRITIes

WheRe RelevAnT InTeResT exIsTs

g C W Biel 8,467,642

Chippendale holdings limited 8,886,490

Rural Aviation (1963) limited 8,467,642

Tony Timpson Family Trust 8,902,164

The total number of issued voting securities for the purposes of the securities Amendment Act 1988 was 65,495,595.

The definition of the term “relevant interest” in the Act is extremely wide, and more than one relevant interest can exist in

the same voting securities.

DiSCloSuRES uNDER ThE NEW ZEAlAND ExChANGE liSTiNG RulESFOR THE YEAR ENDED 30 JUNE 2006

DiSCloSuRES uNDER ThE SECuRiTiES mARkETS ACT �988AS AT 25 AUgUST 2006

diScloSUreS Under the SecUrit ieS marketS act 1988

59

BOARD OF DIRECTORS:

g C W Biel B.e. (Mech.) Deputy Chairman of the Board

Non-executive, Non-independent Member of Audit Committee

Member of Remuneration Committee

W K Chung B.Com., CA, CMA Managing Director

R g ebbett B.Com., ACA, FinstD Chairman of Audit Committee

Non-executive, Independent Member of Remuneration Committee

g s hawkins B.sc., B.Com., ACA Member of Audit Committee


A M James B.Tech. (hons.), Dip.Bus.Admin. Chairman of the Board

Non-executive, Non-independent Member of Audit Committee

Chairman of Remuneration Committee

v T s Tan CA, ACIs Finance Director

K l Thorpe M.A. Member of Audit Committee


A C Timpson Member of Remuneration Committee

Non-executive, Non-independent

COMPANY SECRETARY:

v T s Tan CA, ACIs

REGISTERED OFFICE:

7 grayson Avenue, papatoetoe,

p O Box 97-040, Auckland 1730.

Telephone: 64-9-277 6000, Facsimile: 64-9-279 4756.

SHARE REGISTRAR:

Computershare Investor services limited

level 2, 159 hurstmere Road, Takapuna, north shore City,

private Bag 92119, Auckland 1020.

Telephone: 64-9-488 8700, Facsimile: 64-9-488 8787, Investor enquiries: 64-9-488 8777.

AUDITORS:

KpMg

LEGAL ADVISORS:

hornabrook Macdonald

Minter ellison Rudd Watts

Russell Mcveagh

BANKERS:

AnZ Banking group (new Zealand) limited

WEB SITES:

Corporate – www.cavcorp.co.nz

Carpet Operations – www.cavbrem.co.nz, www.cavbrem.com.au, www.ontera.com.au

CoRpoRATE DiRECToRY

cavalier corporation l imited

corporate directorY

60

CORPORATE:

Managing Director W K Chung

Finance Director and Company secretary v T s Tan

general Manager group Operations C A McKenzie

Information services Manager M n Mcelroy

CARPET OPERATIONS:

CAVALIER BREMWORTH:

group Financial Controller D l Abeynaike

Australian general Manager s J eggleton

Australian Finance and Administration Manager M O hintze

new Zealand general Manager sales s J Duncan

Market planning Manager C Anderson

group Marketing Manager D W philippe

product Development Manager p A leyland

Tufting plant Manager C R Woolford

Wanganui spinning plant Manager D J Blakemore

napier spinning plant Manager p n shuker

KNIGHTSBRIDGE CARPETS:

Manager B R smith

KIMBERLEY CARPETS:

Manager M A Bryant

ONTERA MODULAR CARPETS:

general Manager e Allemano

Commercial Manager g A McFadzean

WOOL OPERATIONS:

HAWKES BAY WOOLSCOURERS:

general Manager, group scouring n R hales

CANTERBURY WOOLSCOURERS:

general Manager M p Crooks

ELCO DIRECT:

general Manager R p Cooper

CoRpoRATE DiRECToRY (CoNTiNuED)

corporate directorY


Jerome Abelardo – Rochelle Abernethy – lucky Abeynaike – Jarmila Ablett – Bevan Abraham – Jared Adam – faimata Afakasi – Agaimalo Afoa – pelenato Afoa – fa’asegi Ah Ching – Derek Ainge – Dean Aitken – Ajang Ajang – Shamina Ali – Thwahir Ali – Bobby Ali-khan – Ezio Allemano – murray Allen – Elaine Allsop – michael Alogi – victoria Alogi – malama Amituanai – Colin Anderson – makalio Antonio – manu Apiata – Sarah Apuwai – harry Aquino – Jason Araia – Tangata Arioka – Shaun Armstrong – Trevor Arnold – Terry Arnott – Dale Arrowsmith – melanie Ashe – Anthony Ashton – fiona Aston – kava Atitoa – John Attwood – Gerard Baillache – Debbie Baker – Dorethy Band – Tony Barclay – luke Barker – kevin Barritt – Seneuefa Barry – Jennifer Bartle – James Bartlett – Thomas Bartlett – Anthony Bates – Neil Bates – Jeffrey Bee – Janet Belcher – David Bell – Cham Ben – Wayne Bennett – Damon Bennett – Anne-maria Bergman – valarie Beuvink – Biar Biar – Sally Biddle – Glen Bidlake – Grant Biel – Jason Binnie – Basil Birch – Jennifer Bird – virginia Blake – Dave Blakemore – moonie Blane – Robin Blithe – Roy Blood – Darrin Bognuda – Craig Boland – Gabriella Bombaci – Brian Borg – Douglas Bowen – vera Bowey – Gerald Boyle – Grant Bradley – Donald Breckenridge – michael Bristol – Boy Bristol – kerry Bromell – Rachael Brooker – Andrew Brooks – Jordan Brooks – Alan Brough – mary Brougham – Grace Brown – David Brown – Arthur Brown – Barry Bruce – mark Bryant – mark Bryant – David Bryson – Rossana Bueno – Johannes Buiter – Rochelle Bullmore – Bronwyn Bullock – lucy Bundy – Simon Burgess – Allan Burgess – Bryan Burgess – michael Burn – kevin Burney – Darren Burns – mathew Burton – kym Butcher – micheal Butcher – fione Campbell – Dean Cannell – Nicholas Carboon – Joanne Carr – Grant Carson – Ashley Carson – Graeme Catt – kevin Chambers – paul Chaplow – helen Charles – Tangikore Charlie – Carl Charlie – John Cheyne – que Chieng – Greg Chinnery – Stephen Christensen – Glen Christensen – Claeton Christie – michelle Christison – Wayne Chung – mark Clark – Jodie Clark – Dorothy-Ann Clark – David Clark – kingsley Clark – Garth Clarke – Simon Cliffe – Cindy Cliffe – Jake Cochrane – Eugene Coker – Raymond Coker – lance Collelo – Stephen Collie – Nigel Collinson – Jim Columb – Clive Commerer – Daniel Comp – James Comp – Edward Connell – ian Cook – Ron Cooper – Renee Cooper – Sheryl Cooper – licia Cooze – Bridget Copeland – maria Corby – mark Corrigan – Godfrey Corry – Roland Cotter – David Cotton – kirsty Courtney – Cowie Crapp – Steven Crawford – Steven Croawell – michael Crooks – Bruce Culver – Shona Cumming – ian Cunningham – Tony Cunningham – Glen D’Cruze – kevin Dalby – Thomas Daniel – Benjamin Davey – Jack Davis – Jaunita Davis – pamela Dawson – Willy De har – Gregory De Silva – Robert Del Rosario – John Delautour – Richard Delmarter – David Derrett – paratene Dewes – Romaine Dewson – Stefano Di Giovanni – Elmer Diuco – Joshua Dixon – mark Dockary – Russell Donaldson – William Doody – maxwell Downey – Nicola Downey – Jim Drake – Brian Drinkwater – Robert Drinkwater – victor Drollet – Graeme Drummond – Steve Duncan – Rex Duncan – Darren Dunkerton – lionel Dunkerton – peter Duxfield – Shane Eades – Sue Ebben – Richard Ebbett – kirstin Eccles – Darryn Eddington – Shane Eddington – Clyde Edwards – frances Edwards – Stephen Eggleton – Shane Eketone – pauline Elliott – leonard Ernst – Senio faasau – Gary fairweather – David falanaki – Naofetalaiga faleapuna – Akenese faleilua – manuia faleilua – Eapesi faofua – Akuhata farmer – kevin farquhar – Ross fata – michael fawssett – Tusi feagaimalii – Avis ferguson – Anthony ferguson – kenneth ferguson – Stephen field – fine finlay – vivien firmin – Cyril fletcher – Te Aroha fletcher – Greg floyd – ian ford – Brian foster – hiki fotofili – Nigel foubister – Aron fraser – David fraser – Bruce fright – Stuart Gair – Jeanette Gardiner – Wayne Garnett – Ben Garnham – Joseph George – Stephen Georgiou – Adam German – John German – myshell Gibbs – Daniel Gilbertson – Stuart Gill – Gail Gill – Ryan Gill – kim Gilmore – Benjamin Glover – Elizabeth Godfrey – louis Godfrey – kane Goldsack – David Goodgame – Warren Goodman – Darren Gore – Brian Gosper – muni Goundar – Satya Gounder – kaliamma Gounder – Alan Graham – Rikki Graham – Darryl Grant – Richard Grant – Alwyn Grantham – Jeremy Gray – Samuel Green – Gary Griffiths – Rogelio Gultiano – Deborah Guthrie – margaret haami – Deborah haddon – Tony halas – Amokura halbert – Jay hales – Nigel hales – Rodney hall – hayden hall – Roger hall – Temaangi hamlin – David hancock – Gerald hannan – kristian hansen – Tamsyn hansen-hill – Rangi harbidge – Sally hardie – Robert haren – Rose haretuku – mervyn harrington – David harris – Brent harrison – Stephen hart – malcolm hartley – Douglas E. hastings – pauline hatch – karena hawea – Courtney hawker – murray hawkes – Graeme hawkins – Jonathan hawkins – Jill heal – Danny healey – Darron heke – Craig hemara – Julia hennessey – Toni henwood – leonard henwood – Sharon henwood – peri hetaraka – James hetaraka – vaughn higgs – Denise hiku – Shiree hina – marcus hinsley – michael hintze – Teufolau hockenhull – kate hodges – Dianne hofmann – Roger hofmann – Trevor hofmann – paul hogenesch – Robert holland – Robert holland – lindsay holland – mark holleron – melissa hong – malcolm hooker – Christopher horsnell – Carl hoskin – Sharon howe – Jason howearth – Geoffrey hucker – Ake hunter – michelle hutchinson – Ruta iakopo – faatali ifopo – Geoffrey ingram – Donna innocenzi – peter ioakimi – Sesilia iosefo – Sarai isara – Glen iwachiw – Rodney Jack – David Jack – Alan James – lisa Jamieson – Andrew Jellyman – Neil Jenkinson – Clive Jensen – philip Jermy – luke Jessop-Smith – malcolm Johnson – Brian Johnston – lee Jones – kevin Jones – Aaron Jury – Siuaki kaafi – William kabakaba – Ghanbar kahoor – Anton karauria – Andrew karl – Teina karo – Baljit kaur – Jasbir kaur – kathy keegan – Nadine keeling – kurt kelsey – Anne kendal – John kerekere – Daniel kersten – lucia king – verna kingi – Jan kingi – Nathan kingston – Rio kovacs – panha kree – Jonathan kroeger – Janine krs – Ashwin kumar – mirek kuncl – Alwyn ladd – motusaga laga’aia – paepae lalogafau – fagaofiti lalogafau – laurence lambert – John lane – lana langley – Anthony larosa – Brendon latimer – Evo lave – Tim lawrence – hazel lawrence – Sothy lay – Tanginoa leaaemanu – petiola lea’aemanu – mele lea’aemanu – Cameron leask – Armando lecaros – paul lefoe – loleta leiataua – Tilia leilua – Stephen lenden – Ngok leon – lealofi leota – keke lesa – uini lesa – Susan leslie – petr lesniak – Taunese letalu – Rita leungwai – phil leyland – Brendan lingard – Blair little – Stuart little – Gary lockwood – keith lodge – Tua lomano – Brian lorge – Stephen loudoun – Brian luty – Alison macDonald – Allan macErlich – louis macfarlane – ian mackenzie – David mackie – Winton mackintosh – peter mael – Alfredo maiquilla – Denis maniapoto – felauai mariota – James markham – Robin marshall – Reuben marsters – Emily martin – Charles martin – Gary martin – Suafa masaga – marlene mason – mataio mataio – Gavin matthews – Telesia matulino – poasa mauga – Tony maurice – Trevor mcBrearty – Dianne mcCarthy – Regan mcCarthy – Barbara mcCulloch – kathleen mcDowell – kevin mcEldowney – mark mcElroy – Geoffrey mcfadzean – Wayne mcGillen – James mcilroy – Belinda mcinerney – David mcintosh – Chris mcivor – Colin mckenzie – Doreen mckeown – Stephen mckeown – John mckillop – Sam mckillop – Ross mckimmon – Samantha mclean – michael mcNab – linda mcNatty – David mcNaughton – Adam mcpherson – margaret mead – Terence meenehan – Eleni meimaris – Jane meleisea – vicki menzies – Craig mercer – Andrea mercer – Adrian merrall – michael merrick – James metekingi – James mfula – Jodie mickleson – kevan miles – Rochell miller – Shirley minassian – owen minchington – pip mirrielees – Arthur mitchell – Rima mitchell – michael mitchell – Sherry moevao – John monroe – Graham moore – Alan morris – Cameron morris – Natalie morris – kathryn morton – Salujean mu’a – lole muliava – luisa mulipola – Chrysanthe munro – Sharon murdoch – Stewart murphy – Alex murray – William murray – Narayan murthi – Sitina Nansen – Tau Nansen – Stewart Nash – pania Neels – Tasesa Ng Shiu – John Ngchok – Toalima Ngchok – moeroa Nia – karen Nielson – Sally Nilsen – Graham Nimmo – Christine Noga – Adam Northcroft – michael o’leary – Trina ormsby – Carl osborne – lonsean ouk – Rim ourng – Gay owen – Terrence owen – William owen – louise page – Neil palmer – mark palmer – Arnulfo palmon – letitia paparoa – Ashok parbhu – michelle parker – murray parker – Steve parker – perry parnham – Allen parsons – Emily parsons – Craig partridge – Tony patmore – Chris pattison – Radim paule – mary paulo – Efi peapea – Richard pearce – Coran pemberton – Nathan penny – fiona pentecost – John pepper – matai pere – Richard pereniko – Albert perfect – Dion perry – Douglas perston – John pervan – Raymond peters – mark petersen – Grant petersen – David philippe – Reginald phillips – linda phillips – George pineaha – Talosaga pio – Davina ponga – Gordon pope – Gordon porter – John potaka – Ruisa potoru – mata potoru – michael powell – Nicole prampromis – vinay prasad – Sharmila prasad – matthew preece – Caryn preston – Stephen prichard – foalele pritchard-Apulu – fa’alanina puleanga – hera puohotaua – morrie puohotaua – Raymond puohotaua – Gregory pye – Gary Raison – Ross Rapson – Tamati Rarere – Doug Rawson – peter Raymond – lynette Reeve – Alex Reid – Sheryn Rerekura – Dean Reti – mohi Reti – haimona Reweti – Samuel Rewi – Donna Reyes – Andrew Richardson – kula Ridd – mataiapo Rima – Barry Ritchie – Janice Ritchie – Riki Ritchie – Doreen Roache – Garry Robertson – Tony Robinson – Alan Rodda – michael Rodda – John Rodgers – Rosa Roebeck – David Roebeck – Joy Rollinson – Damian Rollinson – Carol Rosewarne – Duncan Ross – Jan Ross – Charles Ross – John Ross – Gregory Routh – Shannon Routh – David Rowlinson – Tuapikepike Ruatoe – Jarrod Ruhi – Gordon Rumpler – Susan Rusbridge – Stuart Rush – Graham Rutledge – Edward Ryan – James Ryan – Bobby Sadaraka – Graeme Sage – meafou Saleupolu – Samisoni Samani – Elisapeta Sanele – Abundio Sarsonas – Selwyn Savage – Rajesh Sawant – Cathy Schofield – Alan Schwass – Stuart Scott – Nadine Scott – Brian Scott – fa’au’u Seau – Judith Sellar – mark Shakiba – irene Shaw – Nicholas Shaw – peter Shaw – Rehana Shekhumia – Janeen Shepherd – Dean Sherwood – Aaron Sherwood – peter Shuker – Josefito Sigua – Clint Sim – Sarah Simon – Janice Simpson – Sukhvinder Singh – kalwant Singh – manase Sititi – Tim Smallridge – Brent Smith – Robert Smith – ian Smith – Gordon Smith – mary-Jane Smith – Corey Smith – Donald Smith – Stephen Smithard – Christina Soga – melinda Soo – Sinoeun Soth – Somchanh Souksavong – Somphone Souksavong – mark Spence – Nigel Spenceley – mary Spillane – Aaron Spooner – paul Spooner – Raey Stairmand – Shane Stampa – philip Stent – Abraham Stephens – hayden Stevenson – Antoinette Stewart – Susan Stewart – Blair Stitson – karolyn Stok – Cindy Stuart – maletina Su’a – Sam Suksavong – leo Summerfield – huo Sun – karen Sundman – karl Sundman – poima Taelega-faalelea – David Tahana – Sydney Taiaroa – faamao Taiivao – James Tait – Dorothy Takerei – David Takiaho –Siokapesi Taliauli – Sesilia Taliva’a – victor Tan – Ngawai Tapa – Desmond Tata – Te Ara Tauhara – Atahere– Taurima – Edward Taurua – Tiaga Tautaiolefua – leonie Taylor – kieron Te Awhe – Raenard Te huia – maria Temu – lukin Tengu – Nooroa Terei – van Thai – kane Thomas – kenneth Thomas – lavinia Thompson – John Thompson – Alan Thompson – keith Thorpe – Tina Tia – inano Tikinau – Tony Timpson – Eddie Timu – luke Tither – matalena Toafa – Elisala Toai – Aranui Toatoa – Anarosa Tofaeono – Sonny Togiatau – Dorothy Togiatau – Atilua Too – Thoung Tran – keriann Trask – louise Trautvetter – karen Travers – Andrew Tristram – hamish Tristram – Toe Tua – lee Tuai – misitopa Tuala – Jeremy Tuck – Sina Turner – kenneth Turner – Terry Tusani – fiapito Tusani – mereana Tutira – mii Tutira – harry Tyler – Anne ualiu – Raera umaki – John van Elswijk – peter vear – David vernall – morgan Waihaki – Simon Wakefield – kiren Walia – Nicola Walker – Bernadette Wallace – Selwyn Wallace – lindsay Ward – michael Ward – patrick Warren – Geoffrey Wason – Anthony Waters – Bruce Watson – Douglas Watson – peter Watterson – Warren Welch – malcolm Wells – Donna Whatu – lynette Wheeler – Alan Whittaker – louella Wiari – Noel Wilkins – mervin Wilkinson – Gareth Williams – mikayla Williams – John Williams – Atapana Williams – patrick Williams – ian Williamson – Bruce Wilson – John Wilson – kevin Wilson – Robert Wilson – vanessa Wilson – Trish Wilson – melody Winiata – Nicolas Winter – Craig Woolford – Nigel Worthington – fraser Wright – Grant Wrightson – Steven Wymer – Sharon xie – peter Yandall – Stanley Yee – Tony Yee – michael York – Chris Young – Douglas Young – phillip Young – Steven Zietsman

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BEST YARN STRANDScompanyresearch.nzx.com/reports/nz/2006/CAV2006.pdf · latter culminating in the recent launch of the new Cavalier Bremworth television commercial. The objectives