J A M E S H A R D I E

I N D U S T R I E S L I M I T E D

2 2 7 4 8 F I N A N C I A L R E P O R T I N G &

A N A L Y S I S S T E P H E N L I M

W E D N E S D A Y 6 P M

S h a u n S t e w a r t J o s h u a C h u o y

L u k e R o w l e s X i n X i a o

R a e d A l B a d e r M d F a i z u l K a b i r

Contents

EXECUTIVE SUMMARY .....................................................................................................................................................................2

1. Summary of JHX ..........................................................................................................................................................................3

1.1 Activities & Strategies ...........................................................................................................................................................3

1.2 Market Segment .......................................................................................................................................................................4

2. JHX Key Relevant Accounting Policies ..................................................................................................................................5

2.1 Key Accounting Policies .......................................................................................................................................................5

2.2 Related Accounting Standards and Rules ....................................................................................................................5

4. JHX Accounting Strategy ..............................................................................................................................................................8

4.2 Management Remuneration Policy ................................................................................................................................9

4.3 Accounting Strategy ............................................................................................................................................................ 10

4.3.1 Balance Sheet Strategy.............................................................................................................................................. 10

4.3.2 Income Statement Strategy .................................................................................................................................... 11

5. Quality of Disclosure .................................................................................................................................................................. 12

6. Potential questionable accounting numbers .................................................................................................................. 13

7. Undoing Distortions in the Numbers Provided ............................................................................................................. 14

8. Summarise any financial press discussion of the company’s performance and accounting numbers.

.................................................................................................................................................................................................................... 15

References ............................................................................................................................................................................................ 16

EXECUTIVE SUMMARY

James Hardie Industries (JHX, James Hardie), a Public Limited Company operates in the construction and

building materials sector holding an estimated 15.5% market share, with $1.5b+ annual revenue and

operating in over 5 major markets worldwide.

The company shot to infamy in 2001 when it became synonymous with the major Asbestos compensation

class action in Australia, which affected the market in general finding manufacturer liability for dust borne

disease linked to its asbestos based product range.

The financial fallout, which is one of the main topics of this paper, was a significant accounting liability

linked to a complex legal, actuarial and accounting estimation and provisioning process – noted to be on

the fringe of triple-bottom line reporting due to it’s uniqueness and pioneering approach. The ‘Asbestos

Liability’ as it is identified is underpinned by a large complex legal agreement (AFFA), a compensation fund

(AICF) and an actuarial estimation paper.

Whilst the underlying business of JHX as a building product manufacturer appears to be surviving well, it is

certainly the intention of the AFFA to allow it to survive the heavy debt burden so that it may survive long

enough to finally see its dues paid, the shadow of the asbestos liability looms large on its balance sheet for

the long term.

Unravelling the true and fair view of JHX involves the following two topics:

1. Understanding the accounting methods used in presenting the underlying operations

2. Understanding the impact or posture of the accounting strategy relating to the Asbestos Liability

Ultimately we see a challenging set of accounts and annexures. With all the subtleties of the fairly standard

treatment of the underlying business, the major issue presents to be a large and material one, the

elephant in the room, the estimate of the asbestos liability.

1. Summary of JHX

1.1 Activities & Strategies James Hardie Industries Public Limited Company (James Hardie) operates in the construction and building

materials sector, generating the majority of its income from Non-Metallic Mineral Product Manufacturing

(IBIS, 2015a). Originally founded in Melbourne, Australia in 1888 the company is now incorporated in

Ireland, as well as having shares on the New York Stock Exchange and the Australian Stock Exchange. Being

domiciled in Ireland is primarily for the tax advantages, due to the majority of its revenue now being

derived from the United States and European markets (Janda,

2009) this is illustrated in figure 1.

Core to the strategy of James Hardie has been to invest in high-

return organic growth with a focusing on capacity expansion across

the US and Australian businesses as well as investing in its

organisational capability (Hardie, 2015). The concrete product

manufacturing segment of the construction and building materials

sector in which James Hardie primarily operates is dominated by

several large building material manufacturing companies with the

concentration in this industry at a medium level (IBIS, 2015a).

Fletcher Building Limited is the major player in this industry with a

market share of close to 22% compared to James Hardie’s 15.5%.

Fletcher Building however has a more diversified portfolio of

products in this segment including insulation and roof tiling.

1.2 Market Segment James Hardie (JHX) has traditionally dominated the fibre cement building board market in this segment

although its market share has been eroded by strong competition from CSR with a market share of 13%

(IBIS, 2015a). This segment is dependent largely on demand from building construction and industry

revenue is expected to grow by the relatively low annualised rate of 1.4% over the next five years (IBIS,

2015b). It can also be seen in figure 2 that the domestic market is not favourable, with a high level of

competition stemming from a high threat of substitute products and high price sensitivity.

James Hardie has therefore

streamlined its core business

to focus primarily on the key

profit driver of manufacturing

and distributing fibre cement

products throughout Australia

and the Asian Pacific region

while also increasing its

international expansion in the

United States and Europe (IBIS,

2015a). This focus has led to a

major restructuring of its core

assets with the sale of its

roofing, window and building

systems business (MarketLine,

2015). This has enabled the

company to establish a

competitive advantage through the development of its research capabilities to develop differentiated,

unique and superior products. Developing these products with superior features is combating the issues of

a high threat of substitute products, and this impact is evident in increasing sales volume while also

increasing the selling price of their products (Hardie, 2015).

A major issue has however hampered James Hardie, in the form of its Asbestos Liability. Since 2001 James

Hardie has provided A$1 billion towards compensation, research and education and KPMG Actuarial

estimate the liability will be approximately a further A$1.8b. This commitment extends to at least 2045,

with the possibility of automatic extensions (Hardie, 2015). In order to provide certainty to shareholders

and lenders a set contribution of 35% of its annual free cash flow is contributed each year.

2. JHX Key Relevant Accounting Policies

2.1 Key Accounting Policies The following accounts are significant due to their materiality impacting the balance sheet, income

statement and cash flow.

Table 2.1 Key accounting policies relevant to James Hardie ($ USD in million)

Number Key Accounting Polices 2014 2013 Changes Change in%

1 Inventory $190.7 $172.1 +$18.6 +10.81%

2 Property, Plant & Equipment

$711.2 $658.9 +$52.3 +7.94%

3 Cash flow hedge $0.9 - +$0.9 -

4 Warranties $31.4 $27.1 +$4.3 +15.87%

5 Revenue Recognition $1,493.8 $1,321.3 +$172.5 +13.06%

Sources: Financial statement of James Hardie 2014 Some considered accounting policies including inventory, PPE, warranty and cash flow hedge are $ 934.2

million, which accounted for nearly 44% of total assets of JHX in the FY2014. To applying these accounting

policies because considered important due to the high level of estimation involved. Revenue recognition

accounting policy is the most important policy because of the percentage of the James Hardie’s income.

2.2 Related Accounting Standards and Rules

Table 2 shows the applicable AASB accounting standards relevant to the each accounting policies of James

Hardie in FY2014, and provides a briefly summery of the standard to James Hardies.

Table 2.2 Key accounting policies relate to the James Hardie’s success Key Accounting policies

AASB accounting standard & rules

Notes in FY2014

Comments related James Hardie

Inventory AASB 102 Inventories Paragraph 23 “FIFO” Paragraph 23-25 “Write-Off, Write-Down”

Notes 2(f)

Inventories are valued at the lower of cost or market and are using the first-in, first-out method (FIFO). Cost includes the costs of materials, labour and applied factory overhead. On a regular basis, the Company evaluates its inventory balances for excess quantities and obsolescence by analysing demand, inventory on hand, sales levels and other information. Based on these evaluations, inventory costs are written down or write off.

Property, Plant & Equipment

AASB 116 PPE Paragraph 43-49 “Depreciation” Paragraph 62

Notes 2(g)

PPE are record as cost. The depreciation of the PPE and equipment is computed using the straight-line method. The estimated useful life of PPE is three to ten years not include the buildings. Buildings have

“Straight-line method” Paragraph 30 “Cost Model”

40 years useful life. Useful life is depending on the how long it will be used for company. The PPE indicate might be impaired because the carry amount may not be recoverable. It record as impairment. The carrying value and the recoverable amount are periodically evaluated for an impairment test. In 2014, there has no impairment charge for PPE, however in 2013, the assets impairment is $16.9million.

Financial Instruments

AASB 139 Financial instruments: Recognition and measurement. Paragraph 95 “Cash flow hedge”

Notes 2(o)

When the fair value is different from the carrying value, company calculates the fair value of financial instruments and includes this additional information in the notes to the consolidated financial statements of financial instruments.

Warranties AASB 137 Provisions, Contingent liabilities, Contingent Assets.

Notes 2(m)

The future warranty costs is recorded based on an analysis by the company, which includes the historical relationship of warranty costs to installed product.

Revenue Recognition

AASB 118 Revenue Notes 2(k)

James Hardie recognizes revenue when the risks and obligations of ownership have been transferred to the customer, it is occurs when delivery to the customer. the company use volume, promotional, cash and other discounts for records estimated reductions in sales for customer discounts and rebates. When products are sold, rebates and discounts are records based on management’s best estimate. The estimates are based on historical experience programs and products. Last but not least, part of company revenue is made under agreement call “Vendor Managed Inventory”. Which mean that revenue recognized upon the transfer of title and risk of loss, after customer acknowledges receipt of the goods.

3. Management Flexibility in Selecting Key Accounting Principles

James Hardy management is compelled to work within the accounting standards and rules outlined in the

previous section; however they still have varying levels of flexibility to allocate transactions.

KEY ACCOUNTING

POLICY

FLEXIBILITY AVAILABLE TO MANAGEMENT

Inventories

MEDIUM – the management value the inventory regularly

and based on sales forecasts can write-down stock for sale

or obsolescence. However they are limited to FIFO.

Property, plant &

Equipment

MEDIUM – the management value the PP&E quarterly and

based on use and condition can write-down equipment or

sell.

Financial

Instruments &

Hedging

LOW - dependent on market valuation

Product Warranties

HIGH - due to the variety of products and the need to

constantly develop new products. Management discretion

is high.

Revenue

Recognition

HIGH - due to Revenue not being dependent on cash

receipt, the management may alter trade terms on

receivables in order to pull more sale forward.

4. JHX Accounting Strategy The main drivers of Accounting Strategy appear to be:

STRATEGIC AREA DRIVER

DISCLOSURE High level of disclosure

Asbestos issue & public image

INCENTIVISATION Management Remuneration Policy

The Amended & Restated Final Funding Agreement (AFFA)

POLICY SELECTION Tax Minimisation

4.1 Disclosure Strategy

The management have opted for a high level of disclosure due to the delicate nature of the Asbestos debt.

The following detailed supplements to the annual report are publicly available:

DOCUMENT DETAIL

Amended & Restated Final Funding Agreement

This agreement is intended to ensure “JHISE Group's

commercial viability and success will provide the

basis for the long term funding of the claims which

are to be subject to those funding arrangements”

Valuation of Asbestos-Related Disease Liabilities of

former James Hardie entities (“the Liable Entities”)

to be met by the AICF Trust Prepared for Asbestos

Injuries Compensation Fund Limited (“AICFL”):

This actuarial estimation of the Asbestos Liability is

the detailed basis for the liability appearing on

balance sheet.

Asbestos Injuries Compensation Fund Limited

(“AICFL”) Statutory Financial Statements

The annual report for the Asbestos compensation

fund, which also forms part of the JHX consolidated

annual report. JHX is required to pay annually 35%

of Free Cash Flow as defined by the agreement as

“net cash provided by operating activities (as

calculated in accordance with US GAAP1, paid to the

AICF.

1 Amended & Restated Final Funding Agreement (AFFA), 20 Dec 2013, Atanaskovic Hartnell Lawyers

4.2 Management Remuneration Policy Management remuneration is focused on measures relating to the performance of the business based on

its core operations and individual performance, being the inclusion of:

Song Term Incentives (STI) and Long Term Incentives (LTI)

Individual Performance Measures based on business stream managed

Peer Comparison

STI 20%

Individual Performance Plan (STI): 1 -3 year performance targets set internally via

matrix dependent upon business stream

80%

Company Performance Plan: 1 -3 year performance targets set internally via matrix

with industry peer comparison.

Revenue Growth

EBIT (indexed to housing starts) excluding asbestos, asset impairments, ASIC

expenses and New Zealand product liability.

Above the 75th percentile (top 25%) of peer group performance in Revenue and

Profitability.

LTI 40%

Return on Capital Employed (ROCE) RSUs – an indicator of growth in the value of the

Company’s capital efficiency over time;

30%

Relative Total Shareholder Return (TSR) RSUs – an indicator of the Company’s performance

relative to its US peers; Above the 75th percentile (top 25%) of peer group performance

in Revenue and Profitability.

30%

Internal Individual Scorecard LTI – an indicator of each senior executive’s contribution

to the Company achieving its long-term strategic goals.

As such, the management have limited incentive for manipulation, however the ROCE calculation below

suggests that an increase in Current Liabilities would improve this measure.

RETURN ON CAPITAL EMPLOYED = EBIT

TOTAL ASSETS – CURRENT LIABILITIES

4.3 Accounting Strategy The Group Accounting Strategy appears fixed around Tax minimisation, in particular positioning itself in

Ireland and United States of America where a double taxation treaty exists. Further explanation of the Tax

strategy is noted below:

4.3.1 Balance Sheet Strategy ASBESTOS LIABILITY ON BALANCE SHEET:

ITEM NOTE STRATEGY OUTCOME

Asbestos Liability & Workers Comp Asbestos Liability

11

Asbestos Liability is a unique type of provision which is noted as a liability held on balance sheet, separated between ‘Asbestos Liability’ and ‘Workers Comp Asbestos’. “The quantification and subsequent disclosure of asbestos liabilities is problematic owing to uncertainty about the timing and incidence of disease and the cost of claims and the time needed to settle them”2. This liability is partly contingent based on the complexity of the estimation process and dependency on future events, however by way of the AFFA the liability becomes legal.

The AFFA allows a framework to partial quantification. The combined liability is forecast annually by external KPMG Actuaries for a central estimate, then NPV adjustments are disclosed for: Inflation (discounted for future inflation) Discounted (return on funds in escrow

and operations owed but not yet paid) Net of anticipated Insurance Recoveries The impact of such adjustments reduces the liability by almost half in 2014 from Gross Amount $3,132m to $1,870m3.

(US $billions) 2012 2013 2014

Central Estimate

$1.58 $1.69 $1.87

Management Adopted Estimate

$1.66 $1.69 $1.71

Management uses discretion and presents the Asbestos Liability as Uninflated, Undiscounted and Pre-Insurance Recovery as they deem these effects to be too difficult to forecast. This implies that: the Asbestos Liability will change

upward with inflation and return rates and that these changes are likely to be yearly.

This allows annual transfer to P&L via Non-Cash Expense Items when the Actuarial Estimate is reassessed EOFY.

Despite this US GAAP requirements are quire aggressive being:

75% or greater probability – which is higher than IFRS of 50%

Amount of loss can be reasonably estimated

Use best estimate, or Lowest Range – where IFRS requires a Mid-Range if no best estimate

2 Moerman, L & Van Der Laan S, (2013), Accounting and long-tail liabilities: the case of asbestos, Certified Accountants

Educational Trust (London),

3 Page 96, Valuation of Asbestos-Related Disease Liabilities of former James Hardie entities (“the Liable Entities”) to be met by

the AICF Trust Prepared for Asbestos Injuries Compensation Fund Limited (“AICFL”), KPMG Actuarial Pty Ltd, 30 March 2014

NON CASH RECEIVABLES:

ITEM NOTE STRATEGY OUTCOME

Income Tax Receivable & Insurance Receivable

nil Offsetting the large Asbestos Liability held on balance sheet

No further detail or explanation of the Tax Receivable estimate was supplied, however this is clearly a theoretical asset dependent upon future income. Under US GAAP are allowed to be recognised in full and revalued over time. Insurance Receivable is Audited under terms of the AFFA as it was seen as a measure which could be manipulated to reduce the cash outflow to ACIF due to a clause in the AFFA in which JHX must maintain capital acceptable to undertake its business.

4.3.2 Income Statement Strategy NON-CASH ADJUSTMENTS: non-cash expense items are recognised offsetting Net Profit decreasing Tax.

The following items are purely for Tax benefit as both reduce calculable Net Profit. Neither the AFFA Nor

the Directors Remuneration Policy as detailed earlier in this segment rely on the Net Profit result, hence

this is purely tax motivated.

ITEM NOTE STRATEGY OUTCOME

Asbestos Adjustments

2

Actuarial estimates of the Asbestos liability are reassessed each year and changes in the liability estimate are expensed each year.

Changes to the Actuarial Estimate of Asbestos Liability are expensed each year. This decreases Net Profit creating a Tax Shield, and often originates unrealised Tax income to offset against Tax Expenses in current and future trading years. The company uses the ‘Asset and Liability method’ to assess deferred Tax Assets and Liabilities.

Asset Impairments 7

Quarterly Impairment testing generally leading to recognition of unserviceable or redundant equipment, and plant closure.

This creates a Tax Shield, and often originates unrealised Tax income to offset against Tax Expenses in current and future trading years. The company uses the ‘Asset and Liability method’ to assess deferred Tax Assets and Liabilities.

5. Quality of Disclosure In general, the 2014 Financial Report of James Hardie provides information that is true, fair and provides a

clear insight of the overall performance. Value-add additional information is abundant.

FINANCIAL

INFORMATION:

The complete set of relevant statements befitting a Public, ‘Large’ Proprietary, ASX

Listed were included as below:

Statement of Financial Position

Statement of Comprehensive Income

Statement of Changes in Equity

Statement of Cash Flows

Notes comprising a summary of significant accounting principles and explanatory

information

Statement of Financial Position of the earliest comparative period when

retrospective restatement applies

Directors Declaration – reasonable grounds to pay debts, and compliance with

accounting standards – received declaration from CEO and CFO

The Financial Statements are prepared and disclosed in accordance with US GAAP as

a result the management is required to make assumptions and estimates that affect

the amounts of the assets and liabilities. (There might be a difference between actual

and estimated results).

Operating review, financial review and financial statements were disclosed with all

the required numbers.

US dollar is the presentation currency:

Assets and Liabilities are converted to US dollars at the current exchange rate.

Revenues and Expenses are converted at average exchange rates.

NON-FINANCIAL

INFORMATION:

The required information such as the Directors report, remuneration report,

Corporate governance report, Sustainability report and auditors report by Ernst &

Young have been disclosed.

OTHER

INFORMATION:

James Hardie provide in their annual statements detailed information on their

operations scope, production, risk management, Asbestos Injuries Compensation

Fund (AICF) funding, board structure and shareholder information.

SUPPLEMENTARY

MATERIAL:

Amended & Restated Final Funding Agreement (AFFA)

Valuation of Asbestos-Related Disease Liabilities of former James Hardie

entities (“the Liable Entities”) to be met by the AICF Trust Prepared for Asbestos

Injuries Compensation Fund Limited (“AICFL”) As at 31 March 2014

AICF Annual Financial Statements

6. Potential questionable accounting numbers In order to identify questionable accounting numbers the following model has been used;

DISTORTION POTENTIAL

1. CHANGES IN ACCOUNTING POLICY

LOW Nil detected

2.

UNUSUAL CHANGES ACCOUNTS RECEIVABLE AND/OR INVENTORY WITH

CORRESPONDING SALES

(accounts receivable increased vs sales)

(accounts payable vs Operating Profit) MEDIUM Accounts Receivable vs sales: sales increase and Acct receivable decrease

Accounts Payable vs Operating Profit: Increased profitability in FY’14 linked to

increase in Accounts payable disproportionate to FY’13.

3.

GAP BETWEEN CASH FLOWS AND LIABILITIES (Cash Flow vs Total Liability Ratio)

LOW Total liabilities appear to move in sync with Final Cash position which is a rational

relationship as liabilities increase less cash leaves the business.

4. GAP BETWEEN INCOME & TAX LIABILITY (Net Profit vs Tax Expense ratio)

HIGH Net Profit swings sharply due to Tax Benefits related to Asbestos Adjustments.

5. OVERSTATEMENT OR UNDERSTATEMENT OF LIABILITIES

HIGH Asbestos Estimate

6. UNEXPECTED WRITE OFF BEHAVIOUR

MEDIUM Lack of PP & E Write-off concurrent with a large Currency Translation Loss

7.

RELATED PARTY TRANSACTION:

LOW AICF is fully disclosed as a separate set of accounts and consolidated into the main

entity.

7. Undoing Distortions in the Numbers Provided The Asbestos Liability is at high risk of being understated, for two reasons:

1. Management uses discretion and presents the Asbestos Liability as Uninflated, Undiscounted and Pre-

Insurance Recovery as they deem these effects to be too difficult to forecast4. The inclusion of such

adjustments reduces the liability by almost half in 2014 from Gross Amount $3,132m to $1,870m5.

(US $billions) 2012 2013 2014 Assumptions

Central Estimate by Actuary $1.58 $1.69 $1.87 Inflated

Discounted Post-Insurance Recovery

Management Adopted Estimate

$1.66 $1.69 $1.71 Uninflated

Undiscounted Pre-Insurance Recovery

2. The Asbestos liability is offset against related assets Insurance Receivable and Unrealized Tax Assets,

that are heavily contingent on the liability itself and other future events such as Net Profit and Claims.

THE CORRECTION: Asbestos Liability should be increased from $1.805b to the pre adjusted amount of

$3.132b being the pre-adjusted amount.

CURRENT ASBESTOS ASSETS 109.1 CURRENT ASBESTOS LIABILITIES 185.8 CORRECTION

Restricted Cash & Equivalents -

Asbestos

60.2 Current Portion of Long Term Debt- Asbestos

47.0

Restricted Short Term Investments

- Asbestos

0.1 Asbestos Liability 134.5

Insurance Receivable - Asbestos 28.0 Workers Compensation - Asbestos 4.3 4.3

Workers Compensation - Asbestos 4.3

Deferred Income Taxes - Asbestos 16.5

NON-CURRENT ASBESTOS ASSETS 700.9 NON - CURRENT ASBESTOS LIABILITIES

1,619.3

Insurance Receivable - Asbestos 198.1 Asbestos Liability 1,571.7 3,132.0

Workers Compensation - Asbestos 47.6 Workers Compensation - Asbestos 47.6 47.6

Deferred Income Taxes 455.2 TOTAL ASBESTOS ASSETS 810.0 TOTAL ASBESTOS LIABILITIES 1,805.1 3,183.9

NET ASBESTOS LIABILITIES 995.1 2,373.9

This would recognize the inflated value upfront, reducing the likelihood of large annual adjustments to the

central estimate leading to smaller Asbestos Liability expense on the P&L.

4 Note 11, James Hardie FY 2014 20-F, Page 141

5 Page 96, Valuation of Asbestos-Related Disease Liabilities of former James Hardie entities (“the Liable Entities”) to be met by

the AICF Trust Prepared for Asbestos Injuries Compensation Fund Limited (“AICFL”), KPMG Actuarial Pty Ltd, 30 March 2014

8. Summarise any financial press discussion of the company’s performance and accounting numbers.

Recent financial press discussion of James Hardie has focused on the company’s increased performance,

while other reports highlight the increasing asbestos liability and the burden this may have on taxpayers,

as well as the tax minimisation practices of the entity.

Binsted (2015a) in the Sydney Morning Herald highlights the 11% rise in third-quarter adjusted profit to

$US48.6m, even in light of an underwhelming United States housing recovery. The article emphasises the

company’s performance has been solid over the last year, with increasing sales volume and higher average

prices in the US, with expectations this will continue on the back of an expected increase in new home

building in James Hardie’s markets.

Binsted (2015b) in a further article in the Sydney Morning Herald illustrates that taxpayers may need to

cover any asbestos related payouts if contributions from James Hardie were insufficient to cover claims.

This issue generated much press with Letts (2014) of ABC News highlighting that actual claims were

exceeding actuarial estimates by up to 19% for the quarter, and this could lead to a $184m shortfall by

2017. The report further highlights James Hardie’s ongoing commitment of 35% of its annual operating

cashflow to the Asbestos Injuries Compensation Fund, and that this may need to be increased.

Towards the end of 2014 there was much discussion around James Hardie’s tax minimisation efforts, with

Aston (2014) highlighting in the Sydney Morning Herald that James Hardie has “paid an average of $0 in

corporate tax over the past decade”. The financial press around this issue investigated the use of low-tax

jurisdictions such as Bermuda, as well as the impact of being domiciled in Ireland.

References Amended & Restated Final Funding Agreement (AFFA), 20 Dec 2013, Atanaskovic Hartnell Lawyers

IFRS and US GAAP: similarities and differences, 2014, Price Waterhouse Coopers

Janda, M. 24 jun 2009. James Hardie to Try its Luck in Ireland. ABC Online Business News.

James Hardie Industries FY 2014 20-F, (2014)

Moerman, L & Van Der Laan S, (2013), Accounting and long-tail liabilities: the case of asbestos,

Certified Accountants Educational Trust (London),

Valuation of Asbestos-Related Disease Liabilities of former James Hardie entities (“the Liable

Entities”) to be met by the AICF Trust Prepared for Asbestos Injuries Compensation Fund Limited

(“AICFL”), KPMG Actuarial Pty Ltd, 30 March 2014