8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 28, 2013

USG Corporation

(Exact name of registrant as specified in its charter)

Delaware	1-8864	36-3329400
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

550 West Adams Street, Chicago, Illinois	60661-3676
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (312) 436-4000

(former name and address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 7 – Regulation FD

Item 7.01 Regulation FD Disclosure.

In connection with the offering of the notes described below under Item 8.01, USG Corporation (the “Corporation”) expects to disclose certain supplemental information concerning the Corporation and the previously announced USG Boral joint venture transaction to potential purchasers of the notes in a preliminary offering circular dated October 28, 2013. Supplemental information included in the preliminary offering circular is set forth in Exhibits 99.1, 99.2, 99.3 and 99.4.

The information contained in this Item 7.01, including the Exhibits hereto, shall not be deemed to be filed for purposes of the Securities Exchange Act of 1934 and it shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933 except as expressly set forth by specific reference in such filing.

Section 8 – Other Events

Item 8.01 Other Events.

On October 28, 2013, the Corporation issued a press release announcing that it has launched a private offering of $350 million aggregate principal amount of senior notes. A copy of the press release, which was issued pursuant to and in accordance with Rule 135c under the Securities Act of 1933, is attached hereto as Exhibit 99.5 and incorporated herein by reference.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1	–	Excerpt from preliminary offering circular.
99.2	–	Audited financial statements of Boral Gypsum Asia Sdn Bhd as of June 30, 2013 and 2012, and for the year ended June 30, 2013 and six months ended June 30, 2012.
99.3	–	Audited financial statements of Boral Australian Gypsum Ltd and its subsidiaries as of June 30, 2013 and 2012, and for each of the years in the two-year period ended June 30, 2013.
99.4	–	Unaudited pro forma condensed consolidated financial information.
99.5	–	USG Corporation press release, dated October 28, 2013.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

USG CORPORATION
Registrant
By:	/s/ Matthew F. Hilzinger
	Name: Matthew F. Hilzinger
	Title: Executive Vice President and Chief Financial Officer

Date: October 28, 2013

EXHIBIT INDEX

Exhibit Number	Description
99.1	Excerpt from preliminary offering circular.
99.2	Audited financial statements of Boral Gypsum Asia Sdn Bhd as of June 30, 2013 and 2012, and for the year ended June 30, 2013 and six months ended June 30, 2012.
99.3	Audited financial statements of Boral Australian Gypsum Ltd and its subsidiaries as of June 30, 2013 and 2012, and for each of the years in the two-year period ended June 30, 2013.
99.4	Unaudited pro forma condensed consolidated financial information.
99.5	USG Corporation press release dated October 28, 2013.

EX-99.1

Exhibit 99.1

CERTAIN INFORMATION EXCERPTED FROM USG CORPORATION’S

PRELIMINARY OFFERING CIRCULAR DATED OCTOBER 28, 2013

	Historical
	Year Ended December 31,						Twelve Months Ended September 30,
	2012		2011(a)		2010(a)		2013
	(audited)						(unaudited)
	(dollars in millions, except per-share data)
Other Information:
Adjusted EBITDA(b)	$	263	$	54	$	41	$	377
Capital expenditures	$	70	$	54	$	38
Closing stock price per common share as of end of the period	$	28.07	$	10.16	$	16.83
Average number of employees(c)		8,758		8,880		9,450

1

(a) Amounts reflected above have been adjusted to reflect our European businesses, which were sold on December 27, 2012, as discontinued operations. See Note 3 to our consolidated financial statements included in our annual report on Form 10-K for the fiscal year ended December 31, 2012 and Note 2 to the notes to our consolidated financial statements included in our quarterly report on Form 10-Q for the quarterly period ended September 30, 2013.

(b) We present Adjusted EBITDA (which we define as earnings before interest, taxes, depreciation, amortization, extinguishment of debt, other income, restructuring and long-lived asset impairment charges, discontinued operations, gain on sale of discontinued operations and share-based compensation expense) because we believe this non-GAAP measure assists potential purchasers of the notes in assessing and understanding our operating performance. We believe this measure is frequently used by debt investors and other interested parties in the evaluation of companies similar to ours. In addition, we believe that potential purchasers of the notes and rating agencies will consider this measure useful in measuring our ability to meet our debt service obligations. However, this measure is not a recognized measure under U.S. GAAP, and when analyzing our financial results, investors should use this measure in addition, and not as an alternative, to net income (loss), as defined under U.S. GAAP. Since other companies may calculate this measure differently, this measure may not be comparable to similarly titled measures reported by other companies.

The following table reconciles reported net income (loss) to Adjusted EBITDA.

	Year ended December 31,									Twelve months ended September 30, 2013
	2012			2011			2010
	(dollars in millions)
Net income (loss) attributable to USG - GAAP measure	$	(126	)	$	(390	)	$	(405	)	$	38
Interest expense, net		202			205			178			199
Income tax expense (benefit)		12			(14	)		(37	)		4
Depreciation, depletion and amortization		156			164			176			155
EBITDA - Non-GAAP measure		244			(35	)		(88	)		396
Loss on extinguishment of debt		41			—			—			—
Other (income) expense, net		—			(1	)		1			—
Restructuring and long-lived asset impairment charges		18			75			110			16
Discontinued operations, net of tax		(2	)		(6	)		(5	)		4
Gain on sale of discontinued operations, net of tax		(55	)		—			—			(55	)
Share-based compensation expense		17			21			23			16
Adjusted EBITDA - Non-GAAP measure	$	263		$	54		$	41		$	377

(c) As of September 30, 2013, we had approximately 8,800 employees worldwide. For 2011 and 2010, the average number of employees includes our discontinued operations.

2

CAPITALIZATION

The following table shows our cash, cash equivalents and marketable securities and our capitalization as of September 30, 2013:

Ÿ on an actual basis;

Ÿ as adjusted to give effect to this offering; and

Ÿ as further adjusted to give effect to the USG Boral Joint Venture transaction as if it had occurred on September 30, 2013 and the application of the net proceeds from this offering, together with cash on hand, to fund a portion of our initial $500 million cash investment in the USG Boral Joint Venture.

You should read this table together with the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited annual consolidated financial statements and the related notes and other financial information in our annual report on Form 10-K for the fiscal year ended December 31, 2012 and our quarterly report on Form 10-Q for the quarterly period ended September 30, 2013, and the information under “Unaudited Pro Forma Condensed Consolidated Financial Information” attached as Exhibit 99.4 to our current report on Form 8-K dated October 28, 2013.

	As of September 30, 2013
	Actual			As Adjusted(a)			As  Further Adjusted(b)
(in millions)
Cash, cash equivalents and marketable securities	$	590		$	935	(c)	$	375
Senior secured credit facility(d)		—			—			—
CGC secured credit facility(e)		—			—			—
Notes offered hereby		—			350			350
6.3% Senior notes due 2016		500			500			500
7.75% Senior notes due 2018		500			500			500
7.875% Senior notes due 2020(f)		249			249			249
8.375% Senior notes due 2018		350			350			350
9.75% Senior notes due 2014		59			59			59
10% Convertible senior notes due 2018(g)		386			386			386
Ship mortgage facility(h)		25			25			25
Credit facilities of Oman joint ventures		7			7			—	(i)
Industrial revenue bonds (due 2028 through 2034)		239			239			239
Total debt		2,315			2,665			2,658
Preferred stock		—			—			—
Common stock		11			11			11
Treasury stock		—			—			—
Additional paid-in capital		2,604			2,604			2,604
Accumulated other comprehensive loss		(252	)		(252	)		(252	)
Retained earnings (accumulated deficit)		(2,317	)		(2,317	)		(2,333	)
Stockholders’ equity of parent		46			46			30
Noncontrolling interest		26			26			1
Total stockholders’ equity including noncontrolling interest		72			72			31
Total capitalization	$	2,387		$	2,737		$	2,689

3

(a) Reflects receipt of the net proceeds from this offering prior to the application thereof. In the event we do not complete our investment in the USG Boral Joint Venture, we will instead use the net proceeds from this offering for general corporate purposes, which may include the repayment of indebtedness, the funding of pension obligations, working capital, capital expenditures and potential acquisitions.

(b) Reflects the USG Boral Joint Venture transaction as if it had occurred on September 30, 2013 and the application of the net proceeds from this offering, together with cash on hand, to fund a portion of our initial $500 million cash investment in the USG Boral Joint Venture. See “Unaudited Pro Forma Condensed Consolidated Financial Information,” attached as Exhibit 99.4 to our current report on Form 8-K dated October 28, 2013, for a detailed explanation.

(c) Gives effect to this offering, net of fees incurred in connection with the offering. See footnote (e) under the heading “Unaudited Pro Forma Condensed Consolidated Financial Information,” attached as Exhibit 99.4 to our current report on Form 8-K dated October 28, 2013, for an explanation of anticipated fees incurred in connection with this offering.

(d) As of September 30, 2013, we had approximately $216 million of availability under the senior secured credit facility, and we had no borrowings and $78 million of outstanding letters of credit under this facility.

(e) As of September 30, 2013, there were no borrowings under the CGC secured credit facility. The U.S. dollar equivalent of borrowings available under this facility as of September 30, 2013 was $38 million.

(f) Amounts presented are net of $1 million of debt discount.

(g) Amounts presented are net of $14 million of debt discount. Our 10% convertible senior notes due 2018 are callable beginning December 1, 2013, subject to notice of redemption to the holders thereof of no less than 30 days and no more than 60 days. Accordingly, we currently may elect to redeem all or part of the convertible notes at stated redemption prices, plus accrued and unpaid interest. In lieu of redemption, holders may convert each $1,000 principal amount of 10% convertible senior notes due 2018 into shares of our common stock. The 10% convertible senior notes due 2018 are initially convertible into 87.7193 shares of our common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of $11.40 per share, or a total of approximately 35.1 million shares. If we issue a notice of redemption of some or all of the 10% convertible senior notes due 2018, we believe based on recent trading prices of our common stock that the holders of such convertible notes currently would elect to convert their convertible notes called for redemption rather than receive the applicable redemption price.

(h) Includes approximately $4 million of current portion of such indebtedness.

(i) Our interests in the Oman joint ventures, and the corresponding credit facilities, will be contributed to the USG Boral Joint Venture, at which point the results of these joint ventures (and the associated borrowings under the credit facilities) will no longer be consolidated for purposes of our financial statements.

4

EX-99.2

Exhibit 99.2

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Consolidated financial statements

for the year ended 30 June 2013

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Consolidated statement of financial position

as at 30 June 2013

	Note	2013 RM’000		2012 RM’000
Assets
Property, plant and equipment	3		1,298,605		1,273,127
Intangible assets	4		4,604		4,609
Goodwill	5		323,379		315,932
Deferred tax assets	7		3,049		5,427
Other receivables	8		19,093		14,981
Total non-current assets			1,648,730		1,614,076
Inventories	9		137,279		134,890
Trade and other receivables	8		271,715		261,089
Prepayments			6,534		7,767
Derivative financial assets	10		989		647
Cash and cash equivalents	11		412,604		311,631
			829,121		716,024
Non-current assets classified as held for sale	12		13,024		—
Total current assets			842,145		716,024
Total assets			2,490,875		2,330,100
Equity
Share capital			791,578		699,739
Reserves			823,134		678,016
Total equity attributable to owners of the Company			1,614,712		1,377,755
Non-controlling interests			85,452		86,000
Total equity	13		1,700,164		1,463,755
Liabilities
Loans and borrowings	14		152,680		266,783
Employee benefits	15		37,013		28,457
Provisions			165		143
Deferred tax liabilities	7		26,271		32,016
Derivative financial liabilities	10		631		2,955
Total non-current liabilities			216,760		330,354
Loans and borrowings	14		218,097		194,188
Employee benefits	15		—		483
Provisions			206		76
Current tax liabilities			14,349		18,790
Trade and other payables	16		339,122		321,213
Derivative financial liabilities	10		2,177		1,241
Total current liabilities			573,951		535,991
Total liabilities			790,711		866,345
Total equity and liabilities			2,490,875		2,330,100

The notes are an integral part of these financial statements.

1

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Consolidated statement of profit or loss and other comprehensive income

for the year ended 30 June 2013

	Note	Year ended 30.6.2013 RM’000			1.1.2012  to 30.6.2012 RM’000
Revenue	17		1,846,400			867,826
Cost of sales			(1,415,404	)		(662,110	)
Gross profit			430,996			205,716
Distribution expenses			(109,515	)		(51,612	)
Administrative expenses			(125,127	)		(59,019	)
Other expenses			(14,762	)		(9,074	)
Results from operating activities			181,592			86,011
Finance income	18		14,802			9,062
Finance costs	19		(27,592	)		(17,371	)
Profit before tax			168,802			77,702
Tax expense	20		(40,045	)		(23,429	)
Profit for the year/period			128,757			54,273
Other comprehensive income/(expense), net of tax
Foreign currency translation differences for foreign operations			44,621			(3,493	)
Actuarial losses on pension			(2,730	)		(1,228	)
Cash flow hedge			1,421			(2,741	)
Total other comprehensive income/(expense) for the year/period			43,312			(7,462	)
Total comprehensive income for the year/period			172,069			46,811
Profit attributable to:
Owners of the Company			102,476			45,094
Non-controlling interests			26,281			9,179
Profit for the year/period			128,757			54,273
Total comprehensive income attributable to:
Owners of the Company			145,118			37,580
Non-controlling interests			26,951			9,231
Total comprehensive income for the year/period			172,069			46,811

The notes are an integral part of these financial statements.

2

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Consolidated statement of changes in equity for the year ended 30 June 2013

	Attributable to owners of the Company													Total RM’000			Non-controlling interests RM’000			Total equity RM’000
	Non-distributable										Distributable
	Share capital RM’000		Translation reserve RM’000		Hedging reserve RM’000			Pension reserve RM’000			Retained earnings RM’000
At 1 January 2012		699,739		101,621		(942	)		(5,987	)		545,744			1,340,175			82,269			1,422,444
Foreign currency translation differences for foreign operations		—		1,764		—			—			(5,309	)		(3,545	)		52			(3,493	)
Actuarial losses on pension		—		—		—			(1,228	)		—			(1,228	)		—			(1,228	)
Cash flow hedge		—		—		(2,741	)		—			—			(2,741	)		—			(2,741	)
Total other comprehensive income/(expense) for the period		—		1,764		(2,741	)		(1,228	)		(5,309	)		(7,514	)		52			(7,462	)
Profit for the period		—		—		—			—			45,094			45,094			9,179			54,273
Comprehensive income/(expense) for the period		—		1,764		(2,741	)		(1,228	)		39,785			37,580			9,231			46,811
Dividends to non-controlling interests		—		—		—			—			—			—			(5,500	)		(5,500	)
At 30 June 2012		699,739		103,385		(3,683	)		(7,215	)		585,529			1,377,755			86,000			1,463,755
At 1 July 2012		699,739		103,385		(3,683	)		(7,215	)		585,529			1,377,755			86,000			1,463,755
Foreign currency translation differences for foreign operations		—		43,951		—			—			—			43,951			670			44,621
Actuarial losses on pension		—		—		—			(2,730	)		—			(2,730	)		—			(2,730	)
Cash flow hedge		—		—		1,421			—			—			1,421			—			1,421
Total other comprehensive income/(expense) for the year		—		43,951		1,421			(2,730	)		—			42,642			670			43,312
Profit for the year		—		—		—			—			102,476			102,476			26,281			128,757
Comprehensive income/(expense) for the year		—		43,951		1,421			(2,730	)		102,476			145,118			26,951			172,069
Issue of ordinary shares		91,839		—		—			—			—			91,839			—			91,839
Dividends to non-controlling interests		—		—		—			—			—			—			(27,499	)		(27,499	)
At 30 June 2013		791,578		147,336		(2,262	)		(9,945	)		688,005			1,614,712			85,452			1,700,164

The notes are an integral part of these financial statements.

3

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Consolidated statement of cash flows for the year ended 30 June 2013

		Year ended 30.6.2013 RM’000			1.1.2012 to 30.6.2012 RM’000
Cash flows from operating activities
Profit before tax			168,802			77,702
Adjustments for:
Amortisation of intangible assets			1,754			778
Depreciation of property, plant and equipment			67,398			32,275
Finance costs			27,592			17,371
Finance income			(14,802	)		(9,062	)
Impairment loss on property, plant and equipment			6,056			—
Loss/(Gain) on disposal of property, plant and equipment			6,211			(40	)
Reversal of impairment loss on trade receivables			(2,542	)		(3,679	)
Unrealised foreign exchange loss			117			142
			260,586			115,487
Changes in working capital:
Inventories			(2,389	)		1,766
Employee benefits and provisions			7,505			6,401
Trade and other receivables and prepayments			(10,963	)		(8,494	)
Trade and other payables			17,909			(25,233	)
Cash generated from operations			272,648			89,927
Income tax paid			(48,136	)		(33,634	)
Net cash from operating activities			224,512			56,293
Cash flows from investing activities
Additions of property, plant and equipment			(101,443	)		(63,285	)
Additions of intangible assets			(988	)		—
Interest income from bank deposits			13,625			9,062
Proceeds from disposal of property, plant and equipment			6,485			3,016
Net cash used in investing activities			(82,321	)		(51,207	)
Cash flows from financing activities
Dividends paid to non-controlling interests			(27,499	)		(5,500	)
Interest paid			(27,592	)		(17,371	)
(Repayment)/Drawdown of loans and borrowings			(54,206	)		33,449
Proceeds from issuance of shares			91,839			—
Net cash (used in)/from financing activities			(17,458	)		10,578
Net increase in cash and cash equivalents			124,733			15,664
Effect of exchange rate changes between functional and presentation currencies			12,228			(5,741	)
Cash and cash equivalents at beginning of the year/period			234,095			224,172
Cash and cash equivalents at end of the year/period	(i)		371,056			234,095

4

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Consolidated statement of cash flows for the year ended 30 June 2013 (continued)

(i) Cash and cash equivalents

Cash and cash equivalents included in the consolidated statement of cash flows comprise the following consolidated statement of financial position amounts:

	Note		2013 RM’000			2012 RM’000
Deposits placed with licensed banks		11		292,608			246,721
Cash and bank balances		11		119,996			64,910
				412,604			311,631
Bank overdraft		14		(41,548	)		(77,536	)
				371,056			234,095

The notes are an integral part of these financial statements.

5

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Notes to the financial statements

Boral Gypsum Asia Sdn. Bhd. is a private limited liability company, incorporated and domiciled in Malaysia. The address of the principal place of business and registered office of the Company is as follows:

Principal place of business/Registered office

Lot 606, Off Jalan SS13/1K

47500 Subang Jaya

Selangor Darul Ehsan

The consolidated financial statements of the Company as at and for the financial year ended 30 June 2013 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”).

The Company is principally engaged in investment holding activities whilst the principal activities of the subsidiaries are as stated in Note 6.

The immediate and ultimate holding companies during the financial year are Boral International Pty Limited and Boral Limited respectively. Both companies were incorporated in Australia.

The consolidated financial statements were authorised for issue by the Board of Directors on 25 October 2013.

1. Basis of preparation

(a) Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The following are accounting standards, amendments and interpretations that have been issued by the International Accounting Standards Board (“IASB”) but have not been adopted by the Group:

IFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2013

Ÿ IFRS 10, Consolidated Financial Statements

Ÿ IFRS 11, Joint Arrangements

Ÿ IFRS 12, Disclosure of Interests in Other Entities

Ÿ IFRS 13, Fair Value Measurement

Ÿ IAS 19, Employee Benefits (2011)

Ÿ IAS 27, Separate Financial Statements (2011)

Ÿ IAS 28, Investments in Associates and Joint Ventures (2011)

Ÿ IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine

6

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Ÿ Amendments to IFRS 7, Financial Instruments: Disclosures—Offsetting Financial Assets and Financial Liabilities

Ÿ Amendments to IFRS 1, First-time Adoption of International Financial Reporting Standards—Government Loans

Ÿ Amendments to IFRS 1, First-time Adoption of International Financial Reporting Standards (Annual Improvements 2009-2011 Cycle)

Ÿ Amendments to IAS 1, Presentation of Financial Statements (Annual Improvements 2009-2011 Cycle)

Ÿ Amendments to IAS 16, Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle)

Ÿ Amendments to IAS 32, Financial Instruments: Presentation (Annual Improvements 2009-2011 Cycle)

Ÿ Amendments to IAS 34, Interim Financial Reporting (Annual Improvements 2009-2011 Cycle)

Ÿ Amendments to IFRS 10, Consolidated Financial Statements: Transition Guidance

Ÿ Amendments to IFRS 11, Joint Arrangements: Transition Guidance

Ÿ Amendments to IFRS 12, Disclosure of Interests in Other Entities: Transition Guidance

IFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2014

Ÿ Amendments to IFRS 10, Consolidated Financial Statements: Investment Entities

Ÿ Amendments to IFRS 12, Disclosure of Interests in Other Entities: Investment Entities

Ÿ Amendments to IAS 27, Separate Financial Statements (2011): Investment Entities

Ÿ Amendments to IAS 32, Financial Instruments: Presentation—Offsetting Financial Assets and Financial Liabilities

IFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2015

Ÿ IFRS 9, Financial Instruments (2009)

Ÿ IFRS 9, Financial Instruments (2010)

Ÿ Amendments to IFRS 7, Financial Instruments: Disclosures—Mandatory Effective Date of IFRS 9 and Transition Disclosures

The Group plans to apply the abovementioned standards, amendments and interpretations:

Ÿ from the annual period beginning on 1 July 2013 for those standards, amendments or interpretations that are effective for annual periods beginning or after 1 January 2013, except for IFRIC 20 and Amendments to IAS 34 which are not applicable to the Group.

Ÿ from the annual period beginning on 1 July 2014 for those standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2014.

7

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Ÿ from the annual period beginning on 1 July 2015 for those standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2015.

The initial application of the above standards, amendments and interpretations is not expected to have any material financial impact to the current and prior periods consolidated financial statements upon their first adoption.

(b) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.

(c) Functional and presentation currency

(i) Functional currency

The consolidated financial statements are measured using the currency of the primary economic environment in which it operates (“the functional currency”).

(ii) Presentation currency

The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is the Group’s presentation currency.

All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated.

(d) Use of estimates and judgements

The preparation of the consolidated financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimates are revised and in any future years affected.

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the consolidated financial statements other than those disclosed in the following notes:

Ÿ Note 5—Impairment of goodwill

Ÿ Note 7—Utilisation of tax loss carry-forwards

Ÿ Note 15—Provision for employee benefits

8

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

2. Significant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these consolidated financial statements, and have been applied consistently by the Group entities.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities, including unincorporated entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Control exists when the Company has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account.

(ii) Business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.

Acquisitions on or after 1 January 2011

For acquisitions on or after 1 January 2011, the Group measures the cost of goodwill at the acquisition date as:

Ÿ the fair value of the consideration transferred; plus

Ÿ the recognised amount of any non-controlling interests in the acquiree; plus

Ÿ if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less

Ÿ the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

(iii) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains

9

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(iv) Non-controlling interests

Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and consolidated statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

(v) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investees. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(b) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date.

Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of a financial instrument designated as a hedge of currency risk, which are recognised in other comprehensive income.

(ii) Operations denominated in functional currencies other than Ringgit Malaysia

The assets and liabilities of operations denominated in functional currencies other than RM, including goodwill and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the end of the reporting period. The income and expenses of foreign operations are translated to RM at exchange rates at the dates of the transactions.

10

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Foreign currency differences are recognised in other comprehensive income and accumulated in the foreign currency translation reserve (FCTR) in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the FCTR related to that foreign operation is reclassified to profit or loss as part of the profit or loss on disposal.

When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

In the consolidated financial statements, when settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented in the FCTR in equity.

(c) Financial instruments

(i) Initial recognition and measurement

A financial asset or a financial liability is recognised in the consolidated statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instrument.

A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.

An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract.

(ii) Financial instrument categories and subsequent measurement

The Group categorises financial instruments as follows:

Financial assets

(a)    Loans and receivables

Loans and receivables category comprises debt instruments that are not quoted in an active market.

11

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method.

All financial assets are subject to review for impairment (see note 2(j)(i)).

Financial liabilities

All financial liabilities are subsequently measured at amortised cost.

(iii) Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

Financial guarantee contracts are classified as deferred income and are amortised to profit or loss using a straight-line method over the contractual period or, when there is no specified contractual period, recognised in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable, an estimate of the obligation is made. If the carrying value of the financial guarantee contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision.

(iv) Hedge accounting

Cash flow hedge

A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction and could affect the profit or loss. In a cash flow hedge, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised in other comprehensive income and the ineffective portion is recognised in profit or loss.

Subsequently, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss in the same period or periods during which the hedged forecast cash flows affect profit or loss. If the hedge item is a non-financial asset or liability, the associated gain or loss recognised in other comprehensive income is removed from equity and included in the initial amount of the asset or liability. However, loss recognised in other comprehensive income that will not be recovered in one or more future periods is reclassified from equity into profit or loss.

Cash flow hedge accounting is discontinued prospectively when the hedging instrument expires or is sold, terminated or exercised, the hedge is no longer highly effective, the forecast transaction is no longer expected to occur or the hedge designation is revoked. If the hedge is for a forecast transaction, the cumulative gain or loss on the hedging instrument remains in equity until the forecast transaction occurs. When the forecast transaction is no longer expected to occur, any related cumulative gain or loss recognised in other comprehensive income on the hedging instrument is reclassified from equity into profit or loss.

12

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

(v) Derecognition

A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

(d) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less any accumulated depreciation and any accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour.

Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and is recognised net within “other income” and “other expenses” respectively in profit or loss.

(ii) Subsequent costs

The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.

13

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.

The estimated useful lives for the current and comparative periods are as follows:

Mineral reserves and land	99 years
Buildings	20-50 years
Machinery	5-25 years
Office equipment, fixtures and fittings	5-7 years
Office renovation	10 years
Vehicles	3-10 years

Depreciation methods, useful lives and residual values are reviewed at the end of the reporting period and adjusted as appropriate.

(e) Leased assets

(i) Finance lease

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

Leasehold land which in substance is a finance lease is classified as property, plant and equipment.

(ii) Operating lease

Leases, where the Group does not assume substantially all the risks and rewards of ownership are classified as operating leases and, the leased assets are not recognised in the consolidated statement of financial position.

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.

14

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

(f) Intangible assets

(i) Goodwill

Goodwill arises on business combinations is measured at cost less any accumulated impairment losses.

(ii) Other intangible assets

Intangible assets, other than goodwill, that are acquired by the Group, which have finite useful lives, are measured at cost less any accumulated amortisation and any accumulated impairment losses.

(iii) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

(iv) Amortisation

Amortisation is based on the cost of an asset less its residual value.

Goodwill with indefinite useful lives are not amortised but are tested for impairment annually and whenever there is an indication that they may be impaired.

Other intangible assets are amortised from the date that they are available for use.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use.

The estimated useful life of software and other intangible assets for the current and comparative periods is 5 years.

Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted, if appropriate.

(g) Inventories

Inventories are measured at the lower of cost and net realisable value.

The cost of inventories is measured based on the first-in first-out and the weighted average cost principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of work-in-progress and finished goods, cost includes an appropriate share of production overheads based on normal operating capacity.

15

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

(h) Non-current assets held for sale

Non-current assets that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale.

Immediately before classification as held for sale, the assets are remeasured in accordance with the Group’s accounting policies. Thereafter generally the assets are measured at the lower of their carrying amount and fair value less costs to sell.

Property, plant and equipment once classified as held for sale are not amortised or depreciated.

(i) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks. For the purpose of the consolidated statement of cash flows, cash and cash equivalents are presented net of bank overdrafts.

(j) Impairment

(i) Financial assets

All financial assets are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence exists, then the financial asset’s recoverable amount is estimated.

An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.

(ii) Other assets

The carrying amounts of other assets (except for inventories, deferred tax asset and non-current assets classified as held for sale) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill, the recoverable amount is estimated each period at the same time.

16

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units. Subject to an operating segment ceiling test, for the purpose of goodwill impairment testing, cash-generating units to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to group of cash-generating units that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit.

An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimated recoverable amount.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (group of cash-generating units) and then to reduce the carrying amounts of the other assets in the cash-generating unit (groups of cash-generating units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the financial year in which the reversals are recognised.

(k) Equity instruments

Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently. Ordinary shares are classified as equity.

(l) Employee benefits

(i) Short-term employee benefits

Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

17

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

(ii) State plans

The Group’s contributions to statutory pension funds are charged to profit or loss in the financial year to which they relate. Once the contributions have been paid, the Group has no further payment obligations.

(iii) Defined benefit plans

The Group’s net obligation in respect of defined benefit retirement plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognised past service costs and the fair value of any plan assets are deducted. The discount rate is the yield at the end of the reporting period on high quality corporate bonds that have maturity dates approximating the terms of the Group’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognised asset is limited to the total of any unrecognised past service costs and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is realisable during the life of the plan, or any settlement of the plan liabilities.

When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in profit or loss.

The Group recognises all actuarial gains and losses arising from defined benefit plans in other comprehensive income and all expenses related to defined benefit plans in personnel expenses in profit or loss.

The Group recognises gains and losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs. The gain or loss on curtailment comprises any resulting change in the fair value of plan assets, change in the present value of defined benefit obligation and any related actuarial gains and losses and past service cost that had not previously been recognised.

(m) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

18

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

(n) Revenue and other income

(i) Goods sold

Revenue from the sale of goods in the course of ordinary activities is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discount and volume rebates. Revenue is recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.

(ii) Interest income

Interest income is recognised as it accrues using the effective interest method in profit or loss.

(o) Borrowing costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

(p) Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the consolidated statement of financial position and their tax bases. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are not discounted.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

19

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(q) Contingencies

Contingent liabilities

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is not recognised in the statements of financial position and is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

20

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

3. Property, plant and equipment

	Note		Mineral reserves and land RM’000			Buildings RM’000			Machinery, office  vehicles, fixtures and fittings RM’000			Properties under construction RM’000			Total RM’000
Cost
At 1 January 2012				238,525			415,034			1,188,660			78,876			1,921,095
Additions				—			787			2,096			60,809			63,692
Disposals				—			(225	)		(10,809	)		(43	)		(11,077	)
Transferred from properties under construction				—			6,781			29,084			(35,865	)		—
Transferred to intangible assets		4		—			—			—			(1,147	)		(1,147	)
Effect of movements in exchange rates				255			(139	)		(936	)		(958	)		(1,778	)
At 30 June 2012/1 July 2012				238,780			422,238			1,208,095			101,672			1,970,785
Additions				—			5,720			25,418			70,305			101,443
Disposals				—			(7,346	)		(20,947	)		(2,266	)		(30,559	)
Transferred from properties under construction				—			29,360			63,183			(92,543	)		—
Transferred to intangible assets		4		—			—			—			(688	)		(688	)
Transfer to assets held for sale		12		(13,024	)		—			—			—			(13,024	)
Effect of movements in exchange rates				18,532			8,879			24,703			(12,371	)		39,743
At 30 June 2013				244,288			458,851			1,300,452			64,109			2,067,700
Depreciation and impairment loss
At 1 January 2012
Accumulated depreciation				15,314			161,646			496,179			—			673,139
Accumulated impairment loss				—			—			—			—			—
				15,314			161,646			496,179			—			673,139
Depreciation for the period				1,083			7,969			23,223			—			32,275
Disposals				—			(198	)		(7,903	)		—			(8,101	)
Effect of movements in exchange rates				159			370			(184	)		—			345
At 30 June 2012/1 July 2012
Accumulated depreciation				16,556			169,787			511,315			—			697,658
Accumulated impairment loss				—			—			—			—			—
				16,556			169,787			511,315			—			697,658
Depreciation for the year				2,387			16,976			48,035			—			67,398
Impairment loss				—			—			6,056			—			6,056
Disposals				—			(3,465	)		(14,398	)		—			(17,863	)
Effect of movements in exchange rates				506			4,602			10,738			—			15,846
At 30 June 2013
Accumulated depreciation				19,449			187,900			555,690			—			763,039
Accumulated impairment loss				—			—			6,056			—			6,056
				19,449			187,900			561,746			—			769,095
Carrying amounts
At 1 January 2012				223,211			253,388			692,481			78,876			1,247,956
At 30 June 2012/1 July 2012				222,224			252,451			696,780			101,672			1,273,127
At 30 June 2013				224,839			270,951			738,706			64,109			1,298,605

21

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

During the financial year, the Group assessed certain assets for impairment and recognised an impairment loss of RM6,056,000 (2012:Nil) in profit or loss as these assets no longer generate future economic benefits to the Group.

The costs and carrying amounts of mineral reserves and land were not segregated into their respective categories of mineral reserves, leasehold and freehold land as the required details are not available.

4. Intangible assets

	Software RM’000			Other intangible assets RM’000			Total RM’000
Cost
At 1 January 2012		16,351			16,280			32,631
Disposals		—			(71	)		(71	)
Transferred from properties under construction		1,147			—			1,147
Effect of movements in exchange rates		(45	)		11			(34	)
At 30 June 2012/1 July 2012		17,453			16,220			33,673
Additions		950			38			988
Transferred from properties under construction		368			320			688
Effect of movements in exchange rates		357			255			612
At 30 June 2013		19,128			16,833			35,961
Amortisation
At 1 January 2012		14,139			14,269			28,408
Amortisation for the period		497			281			778
Disposals		—			(71	)		(71	)
Effect of movements in exchange rates		(71	)		20			(51	)
At 30 June 2012/1 July 2012		14,565			14,499			29,064
Amortisation for the year		1,257			497			1,754
Effect of movements in exchange rates		305			234			539
At 30 June 2013		16,127			15,230			31,357
Carrying amounts
At 1 January 2012		2,212			2,011			4,223
At 30 June 2012/1 July 2012		2,888			1,721			4,609
At 30 June 2013		3,001			1,603			4,604

22

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

5. Goodwill

	2013 RM’000		2012 RM’000
At 1 July/1 January		315,932		316,192
Effect of movements in exchange rates		7,447		(260	)
At 30 June		323,379		315,932

The Group tests goodwill for impairment annually or more frequently if there are indications that goodwill might be impaired. The Group prepares cash flow projections derived from the most recent financial budgets approved by management for the next five years. No impairment loss has been recognised for the Group.

Goodwill has been allocated for impairment testing purposes to the following cash-generating units: Korea, Indonesia, China, and Thailand:

Country	Growth rate 2013			Discount  rate applied 2013			Goodwill  value 2013 RM’000		Discount  rate applied 2012			Goodwill  value 2012 RM’000
Korea		5	%		9.7	%		91.3		9.7	%		87.6
Indonesia		15	%		12.5	%		25.5		12.5	%		27.1
China		11	%		14.5	%		13.6		14.5	%		12.7
Thailand		6	%		9.7	%		193.0		9.7	%		188.5
Total								323.4					315.9

The recoverable amounts of the above cash-generating units are determined based on the value in use calculation and the appropriate discount rate which use cash flow projections based on financial budgets approved by the directors covering a five year period. Cash flow projections are based on the same expected gross margins and raw materials price inflation throughout the budget period.

23

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

6. Subsidiaries

Details of the subsidiaries are as follows:

Name of subsidiary	Country of incorporation	Principal activities	Effective ownership interest
			2013   %		2012   %
BGA Holdings Limited	Labuan, Malaysia	Holding		100		100
South Korean Plasterboard Corporation	Labuan, Malaysia	Holding		100		100
Siamsum Corporation	Labuan, Malaysia	Holding		100		100
Boral Plasterboard System Co. Ltd.	South Korea	Trading		100		100
Boral Gypsum Korea Co. Ltd.	South Korea	Trading		100		100
China Plasterboard Corporation	British Virgin Island	Holding		100		100
Boral Gypsum (Shanghai) Co. Ltd.	China	Trading		100		100
Boral Gypsum (Chongqing) Co. Ltd.	China	Trading		100		100
Boral Gypsum (Chengdu) Co. Ltd.	China	Trading		100		100
Boral Plasterboard (Shanghai) Co. Ltd.	China	Trading		96.80		96.80
Boral Gypsum (Shandong) Co. Ltd.	China	Trading		100		100
Boral Management Services Shanghai Co. Ltd.	China	Management		100		100
Boral Gypsum India Private Ltd.	India	Trading		100		100
PT Petrojaya Boral Plasterboard	Indonesia	Trading		100		100
Boral Plasterboard (Malaysia) Sdn. Bhd.	Malaysia	Trading		100		100
Boral Plasterboard (Marketing) Sdn. Bhd.	Malaysia	Trading		100		100
Boral Building Materials (Malaysia) Sdn. Bhd.	Malaysia	Dissolved		100		100
Boral Plasterboard Philippines Inc.	Philippines	Trading		100		100
Boonyavajara Mining Co., Ltd.	Thailand	Mining		100		100
Boral Prestia Co. Ltd.	Thailand	Trading		100		100
The Siam Gypsum Industry Co. Ltd.	Thailand	Holding		71		71
The Siam Gypsum Industry (Saraburi) Co. Ltd	Thailand	Trading		71		71
The Siam Gypsum Industry (Songkla) Co. Ltd.	Thailand	Trading		71		71
SGI Development Co. Ltd.	Thailand	Trading		71		71
Gypsum Business Limited	Thailand	Trading		100		100
Boral Middle East FZE	UAE	Trading		100		100
Boral Middle East (Dubai) L.L.C.	UAE	Trading		49		49
Boral Gypsum Vietnam Co. Ltd.	Vietnam	Trading		100		100

24

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

7. Deferred tax assets/(liabilities)

Recognised deferred tax assets/(liabilities)

Deferred tax balances are presented in the consolidated statement of financial position as follows:

	2013 RM’000			2012 RM’000
Deferred tax assets		3,049			5,427
Deferred tax liabilities		(26,271	)		(32,016	)
		(23,222	)		(26,589	)

Movement in temporary differences during the period/year

	At 1.1.2012 RM’000			Recognised in profit or loss (Note 20) RM’000			Recognised in other comprehensive income RM’000			At 30.6.2012/ 1.7.2012 RM’000			Recognised in profit or loss (Note 20) RM’000			Recognised in other comprehensive income RM’000		At 30.6.2013 RM’000
Property, plant and equipment		(37,542	)		(491	)		—			(38,033	)		5,139			—		(32,894	)
Provisions and employee benefits		11,500			1,901			—			13,401			(414	)		—		12,987
Other items		(1,011	)		790			(1,736	)		(1,957	)		(1,683	)		325		(3,315	)
Net tax (liabilities)/assets		(27,053	)		2,200			(1,736	)		(26,589	)		3,042			325		(23,222	)

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items (stated at gross):

	2013 RM’000	2012 RM’000
Tax losses	49,389		35,497

During the financial year, the Group’s unrecognised tax losses of RM5,222,000 has expired under the relevant tax legislation.

The Group’s unrecognised tax losses will expire approximately in 2018.

Deferred tax asset has not been recognised in respect of this item because it is not probable that future taxable profit will be available against which the Group can utilise the benefits there from.

25

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

8. Trade and other receivables

	2013 RM’000			2012 RM’000
Non-current
Non-trade
Loans to staff		17,597			13,334
Others		1,496			1,647
		19,093			14,981
Current
Trade
Trade receivables		234,341			205,361
Less: Allowance for impairment loss		(5,600	)		(7,535	)
		228,741			197,826
Non-trade
Other receivables and deposits		42,974			63,263
		42,974			63,263
		271,715			261,089

9. Inventories

	2013 RM’000			2012 RM’000
Raw materials		46,473			48,869
Low cost and short lived consumable items		24,173			21,824
Work-in-progress		719			654
Finished goods		71,650			70,747
		143,015			142,094
Less: Allowance for decline in value		(5,736	)		(7,204	)
		137,279			134,890
Recognised in profit or loss:
Inventories recognised as cost of sales		1,023,480			473,120

26

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

10. Derivative financial assets/(liabilities)

	2013 RM’000			2012 RM’000
Derivative financial assets
Current
Foreign currency forward contracts		989			647
Derivative financial liabilities
Non-current
Interest rate swap		(631	)		(2,955	)
Current
Foreign currency forward contracts		(1,413	)		(762	)
Interest rate swap		(764	)		(479	)
		(2,177	)		(1,241	)
		(2,808	)		(4,196	)

11. Cash and cash equivalents

	2013 RM’000		2012 RM’000
Cash and bank balances		119,996		64,910
Deposits placed with licensed banks		292,608		246,721
		412,604		311,631

12. Non-current assets classified as held for sale

During the financial year, the Group received a potential customer’s bid on an industrial property in Thailand which is highly probable for future sale. Consequently, the property is presented as an asset held for sale.

13. Capital and reserves

Share capital

	Amount 2013 RM’000		Number of shares 2013 ’000		Amount 2012 RM’000		Number of shares 2012 ’000
Authorised:
Ordinary shares of RM1 each		1,400,000		1,400,000		1,400,000		1,400,000
Issued and fully paid:
Ordinary shares of RM1 each
At 1 July/1 January		699,739		699,739		699,739		699,739
Increase during the year		91,839		91,839		—		—
At 30 June		791,578		791,578		699,739		699,739

27

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Ordinary shares

The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company and rank equally with regard to the Company’s residual assets.

Translation reserve

The translation reserve comprises foreign currency differences arising from the translation of the financial statements of the Group entities to RM.

Hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedges related to hedged transactions that have not yet occurred.

Pension reserve

The pension reserve comprises the actuarial gains and losses on pension provision.

14. Loans and borrowings

	2013 RM’000		2012 RM’000
Non-current
Bank loans—unsecured		150,037		264,850
Finance lease liabilities		2,643		1,933
		152,680		266,783
Current
Bank loans—unsecured		139,329		80,828
Finance lease liabilities		1,144		911
Revolving credits—unsecured		36,076		34,913
Bank overdraft—unsecured		41,548		77,536
		218,097		194,188
		370,777		460,971

14.1 Security

The bank loans, revolving credits and bank overdraft are backed by the corporate guarantees given by the Company and the ultimate holding company.

28

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

14.2 Finance lease liabilities

Finance lease liabilities are payable as follows:

	Future minimum lease payments 2013 RM’000		Interest 2013 RM’000		Present value of minimum lease payments 2013 RM’000		Future minimum lease payments 2012 RM’000		Interest 2012 RM’000		Present value of minimum lease payments 2012 RM’000
Less than one year		1,411		267		1,144		1,041		130		911
Between one and five years		2,997		354		2,643		2,089		156		1,933
		4,408		621		3,787		3,130		286		2,844

15. Employee Benefits

15.1 Retirement benefits

	2013 RM’000		2012 RM’000
Recognised liability for employee benefits
Non-current		37,013		28,457
Current		—		483
		37,013		28,940

Under the terms of employment with its employees, the Group has to pay employee benefits to eligible employees who have completed a qualifying period of service upon their retirement.

Movement in the liability recognised in the consolidated statement of financial position

	2013 RM’000			2012 RM’000
Liability at 1 July/1 January		28,940			22,388
Expense recognised in profit or loss		10,243			6,401
Benefits paid		(2,335	)		—
Effect of movements in exchange rates		165			151
Liability at 30 June		37,013			28,940

The expense is recognised in the administrative expenses in the consolidated statement of profit or loss and other comprehensive income.

29

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Actuarial assumptions

Principal actuarial assumptions at the end of the reporting period:

	2013 %		2012 %
Discount rate		1.84 - 5.75		1.84 - 5.75
Future salary increases		4.50 - 10.00		4.50 - 10.00
Employee provident funds rate		2.00 - 12.00		2.00 - 12.00

16. Trade and other payables

	2013 RM’000		2012 RM’000
Trade
Trade payables		239,357		205,427
Non-trade
Other payables		75,434		96,351
Accrued expenses		24,331		19,435
		99,765		115,786
		339,122		321,213

17. Revenue

	Year ended 30.6.2013 RM’000		1.1.2012  to 30.6.2012 RM’000
Sale of gypsum board and related products		1,846,400		867,826

18. Finance income

	Year ended 30.6.2013 RM’000		1.1.2012  to 30.6.2012 RM’000
Interest income of financial assets that are not at fair value through profit or loss:
Interest income from bank deposits		13,625		9,062
Gains arising on hedge derivatives		1,177		—
Recognised in profit or loss		14,802		9,062

30

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

19. Finance costs

	Year ended 30.6.2013 RM’000			1.1.2012  to 30.6.2012 RM’000
Interest expense of financial liabilities that are not at fair value through profit or loss:
Interest on bank overdraft and loans		(26,925	)		(16,716	)
Losses arising on hedge derivatives		—			(266	)
Other finance costs		(667	)		(389	)
Recognised in profit or loss		(27,592	)		(17,371	)

20. Tax expense

Recognised in profit or loss

	Year ended 30.6.2013 RM’000			1.1.2012  to 30.6.2012 RM’000
Current tax expense
Malaysian—current year/period		1,799			879
Overseas—current year/period		26,702			19,182
Withholding tax		14,586			5,865
		43,087			25,926
Deferred tax expense
Origination and reversal of temporary differences		(3,042	)		(2,497	)
		40,045			23,429
Reconciliation of tax expense
Profit for the year/period		128,757			54,273
Total tax expense		40,045			23,429
Profit excluding tax		168,802			77,702
Income tax calculated using Malaysian tax rate of 25%		42,201			19,426
Effect of tax rates in foreign jurisdictions		(6,315	)		(336	)
Effect of tax holidays and incentives		(21,155	)		(4,846	)
Non-deductible expenses		5,915			3,320
Current year losses for which no deferred tax asset was recognised		4,813			—
Withholding tax		14,586			5,865
		40,045			23,429

As the Group operates across several tax jurisdictions, the tax rates differ in each subsidiary and they range from 0% to 31%.

31

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

21. Financial instruments

21.1 Categories of financial instruments

The table below provides an analysis of financial instruments categorised as follows:

(a) Loans and receivables (“L&R”); and

(b) Financial liabilities measured at amortised cost (“FL”).

	Carrying amount RM’000			L&R/ (FL) RM’000			Derivatives used for  hedging RM’000
2013
Financial assets
Trade and other receivables		290,808			290,808			—
Cash and cash equivalents		412,604			412,604			—
Derivative financial assets		989			—			989
		704,401			703,412			989
Financial liabilities
Loans and borrowings		(370,777	)		(370,777	)		—
Trade and other payables		(339,122	)		(339,122	)		—
Derivative financial liabilities		(2,808	)		—			(2,808	)
		(712,707	)		(709,899	)		(2,808	)
2012
Financial assets
Trade and other receivables		276,070			276,070			—
Cash and cash equivalents		311,631			311,631			—
Derivative financial assets		647			—			647
		588,348			587,701			647
Financial liabilities
Loans and borrowings		(460,971	)		(460,971	)		—
Trade and other payables		(321,213	)		(321,213	)		—
Derivative financial liabilities		(4,196	)		—			(4,196	)
		(786,380	)		(782,184	)		(4,196	)

21.2 Net gains and losses arising from financial instruments

	Year ended 30.6.2013 RM’000			1.1.2012  to 30.6.2012 RM’000
Net gains/(losses) on:
Loans and receivables		16,167			9,062
Financial liabilities measured at amortised cost		(25,933	)		(16,864	)
		(9,766	)		(7,802	)

32

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

21.3 Financial risk management

The Group has exposure to the following risks from its use of financial instruments:

Ÿ Credit risk

Ÿ Liquidity risk

Ÿ Market risk

21.4 Credit risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its receivables from customers.

Receivables

Risk management objectives, policies and processes for managing the risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the consolidated statement of financial position.

Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. A significant portion of these receivables are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than 90 days, which are deemed to have higher credit risk, are monitored individually.

The exposure of credit risk for trade receivables as at the end of the reporting period by geographic region was:

	2013 RM’000		2012 RM’000
Domestic		9,916		10,290
Asia		208,507		178,360
Middle East		15,918		16,711
		234,341		205,361

33

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Impairment losses

The Group maintains an ageing analysis in respect of trade receivables only. The ageing of trade receivables as at the end of the reporting period was:

2013	Gross RM’000		Individual impairment RM’000		Net RM’000
Not past due		173,792		—		173,792
Past due 1 - 30 days		22,696		—		22,696
Past due 31 - 90 days		34,827		2,574		32,253
Past due more than 90 days		3,026		3,026		—
		234,341		5,600		228,741
2012
Not past due		184,594		42		184,552
Past due 1 - 30 days		7,027		—		7,027
Past due 31 - 90 days		3,698		390		3,308
Past due more than 90 days		10,042		7,103		2,939
		205,361		7,535		197,826

The movements in the allowance for impairment losses of trade receivables during the financial year were:

	2013 RM’000			2012 RM’000
At 1 July/1 January		7,535			11,223
Impairment loss reversed		(2,542	)		(3,679	)
Effect of movements in exchange rates		607			(9	)
At 30 June		5,600			7,535

The remaining past due balances not impaired mainly due to these trade receivables are recoverable based on their past payment trend and history of debt. Hence, the management is confident that no impairment is required.

The allowance account in respect of trade receivables is used to record impairment losses. Unless the Group is satisfied that recovery of the amount is possible, the amount considered irrecoverable is written off against the receivable directly.

Deposits placed with licensed banks

Risk management objectives, policies and processes for managing the risk

Investments are only allowed in deposits with licensed banks.

34

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the Group has only placed deposits domestically. The maximum exposure to credit risk is represented by the carrying amounts in the consolidated statement of financial position.

In view that the deposits are only placed with licensed banks, management does not expect the banks to fail to meet their obligation.

The deposits with licensed banks of the Group are unsecured.

Impairment losses

As at the end of the reporting period, there is no indication that the deposits with licensed banks are not recoverable.

21.5 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings.

The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

35

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Maturity analysis

The table below summarises the maturity profile of the Group’s financial liabilities as at the end of the reporting period based on undiscounted contractual payments:

2013	Carrying amount RM’000	Contractual interest rate %	Contractual cash flows RM’000		Under 1 year RM’000		1 - 2 years RM’000		2 - 5 years RM’000
Non-derivative financial liabilities
Bank loans—unsecured	289,366	4.07 to 8.65		312,583		158,217		97,562		56,804
Finance lease liabilities	3,787	9.20		4,408		1,411		1,212		1,785
Revolving credits—unsecured	36,076	1.38 to 1.60		36,409		36,409		—		—
Bank overdraft—unsecured	41,548	1.77 to 11.00		41,548		41,548		—		—
Trade and other payables	339,122	—		339,122		339,122		—		—
	709,899			734,070		576,707		98,774		58,589
2012
Non-derivative financial liabilities
Bank loans—unsecured	345,678	3.00 to 12.70		373,510		191,741		62,143		119,626
Finance lease liabilities	2,844	11.36		3,130		1,041		882		1,207
Revolving credits—unsecured	34,913	1.59 to 1.69		35,288		35,288		—		—
Bank overdraft—unsecured	77,536	1.76 to 10.50		77,536		77,536		—		—
Trade and other payables	321,213	—		321,213		321,213		—		—
	782,184			810,677		626,819		63,025		120,833

21.6 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices that will affect the Group’s financial position or cash flows.

21.6.1 Currency risk

The Group is exposed to foreign currency risk on certain transactions that are denominated in a currency other than the respective functional currencies of Group entities. The currencies giving rise to this risk are primarily the U.S. Dollars, Korean Won, Thai Baht and Indonesian Rupiah.

Risk management objectives, policies and processes for managing the risk

Exposure to foreign currency risk is monitored on an ongoing basis and is managed within approved policy parameters utilising foreign currency forward contracts.

Exposure to foreign currency risk

The Group’s exposure to foreign currency (a currency which is other than the functional currency of the Group entities) risk as at the end of the reporting period is not material and therefore no currency risk sensitivity analysis is prepared.

36

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

21.6.2 Interest rate risk

The Group’s fixed rate borrowings are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Short term receivables and payables are not significantly exposed to interest rate risk.

Risk management objectives, policies and processes for managing the risk

The Group adopts a practice to continuously seek alternative banking facilities which provide competitive interest rates to finance and/or refinance its working capital requirement.

Exposure to interest rate risk

The interest rate profile of the Group’s significant interest-bearing financial instruments, based on carrying amounts as at the end of the reporting period was:

	2013 RM’000			2012 RM’000
Fixed rate instruments
Financial assets		292,608			246,721
Financial liabilities		(67,166	)		(88,982	)
		225,442			157,739
Floating rate instruments
Financial liabilities		(303,611	)		(371,989	)

Interest rate risk sensitivity analysis

(a) Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.

(b) Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points (“bp”) in interest rates at the end of the reporting period would have increased (decreased) post-tax profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remained constant.

	Profit or loss
	100 bp increase 2013 RM’000			100 bp decrease 2013 RM’000		100 bp increase 2012 RM’000			100 bp decrease 2012 RM’000
Floating rate instruments		(2,277	)		2,277		(2,790	)		2,790

37

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

21.6.3 Other price risk

Other price risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk). Other price risk comprises equity price risk and commodity price risk.

The Group is subject to commodity price risk with respect to price changes mainly in the gypsum, paper, energy and freight markets. The Group considers that its risk with respect to these markets is not significant and does not use financial instruments to manage its exposures to these risks.

21.7 Hedging activities

21.7.1 Cash flow hedge

The Group has entered into an interest rate swap to hedge the cash flow risk in relation to the floating interest rate of a term loan of USD 20 million (30 June 2012: USD 20 million). The interest rate swap has the same nominal value of USD 20 million (30 June 2012: USD 20 million) and is settled on a quarterly basis, consistent with the interest repayment schedule of the term loan.

21.8 Fair value of financial instruments

The carrying amounts of cash and cash equivalents, short term receivables and payables and short term borrowings approximate fair values due to the relatively short term nature of these financial instruments.

The fair values of other financial assets and liabilities, together with the carrying amounts shown in the consolidated statement of financial position, are as follows:

	2013						2012
	Carrying amount RM’000			Fair value RM’000			Carrying amount RM’000			Fair value RM’000
Derivative financial liabilities		(631	)		(631	)		(2,955	)		(2,955	)
Loans and borrowings		(152,680	)		(152,856	)		(266,783	)		(267,325	)

Derivatives

The fair value of interest rate swaps is based on broker quotes. Those quotes are tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date.

Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period. For finance leases the market rate of interest is determined by reference to similar lease agreements.

38

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Interest rates used to determine fair value

The interest rates used to discount estimated cash flows, when applicable, are as follows:

	2013			2012
Loans and borrowings		4.11	%		4.14	%
Finance lease liabilities		7.00	%		8.18	%

22. Capital management

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as going concern, so as to maintain investor and creditor confidence and to sustain future development of the business. The Directors monitor and are determined to maintain an optimal debt-to-equity ratio that complies with debt covenants.

The debt-to-equity ratios at 30 June 2013 and at 30 June 2012 were as follows:

	2013 RM’000			2012 RM’000
Total loans and borrowings (Note 14)		370,777			460,971
Less: Cash and cash equivalents (Note 11)		(412,604	)		(311,631	)
Net (cash)/debt		(41,827	)		149,340
Total equity		1,700,164			1,463,755
Debt-to-equity ratio		(2.5	%)		10.2	%

There were no changes in the Group’s approach to capital management during the financial year.

23. Operating leases

Leases as lessee

Non-cancellable operating lease rentals are payable as follows:

	2013 RM’000		2012 RM’000
Less than one year		5,485		4,221
Between one and five years		8,198		4,044
More than five years		2,012		1,879
		15,695		10,144

Operating lease payments represent rentals payable by the Group for its office properties, warehouse, and property, plant and equipment with lease terms of between 1 and 10 years. They also include guaranteed dividend payments to the owner of certain property used by the Company. The Group does not have an option to purchase the lease assets at the expiry of the lease periods.

39

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

24. Commitments

	2013 RM’000		2012 RM’000
Commitments that have been entered into but have not been recognised in the consolidated financial statements:
- Capital expenditure commitments		1,486		11,667
- Raw material purchase commitments		356,494		265,796
		357,980		277,463

The Group has long term contracts to buy some raw materials, primarily for gypsum and papers, from major suppliers.

25. Related parties

Identity of related parties

For the purposes of the consolidated financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control. Related parties may be individuals or other entities.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. Key management personnel include all the Directors of the Group, and certain members of senior management of the Group.

The Group has related party relationship with its related companies and key management personnel.

Significant related party transactions

Related party transactions have been entered into in the normal course of business under normal trade terms. The significant related party transactions of the Group are shown below.

	Year ended 30.6.2013 RM’000			1.1.2012 to 30.6.2012 RM’000
A. Related companies
Sales of goods		—			1,827
Purchases		(3,895	)		(5,483	)
B. Key management personnel
Directors
- Remuneration		10,472			5,198
- Other short-term employee benefits		4,082			2,020
		14,554			7,218
Other key management personnel
- Short-term employee benefits		93,933			45,117
		108,487			52,335

40

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Other key management personnel comprise persons other than the Directors of Group entities, having authority and responsibility for planning, directing and controlling the activities of the Group entities either directly or indirectly.

26. Comparative figures

On 9 December 2011, the Company decided to, effective from 1 January 2012, change its financial year end from 31 December to 30 June to be coterminous with the financial year end of its immediate holding company. Accordingly, the consolidated financial statements for the last financial period were drawn up for the period from 1 January 2012 to 30 June 2012. As a result, the comparative information in the consolidated statement of financial position is 30 June 2012, whereas the comparative information for the consolidated statements of profit or loss and cash flows is that for the 6 months period from 1 January 2012 to 30 June 2012.

41

KPMG (Firm No. AF 0758) Chartered Accountants Level 10, KPMG Tower 8, First Avenue, Bandar Utama 47800 Petaling Jaya Selangor Darul Ehsan, Malaysia Telephone Fax Internet     +60 (3) 7721 3388     +60 (3) 7721 3399     www.kpmg.com.my

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

Independent Auditors’ Report on the Consolidated Financial Statements

We have audited the consolidated financial statements of Boral Gypsum Asia Sdn. Bhd., which comprise the consolidated statement of financial position as at 30 June 2013, and the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Directors’ Responsibility for the Consolidated Financial Statements

The Directors of the Company are responsible for the preparation of these consolidated financial statements so as to give a true and fair view in accordance with International Financial Reporting Standards. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in United States of America. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

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

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

KPMG, a partnership established under Malaysian law and a

member firm of the KPMG network of independent member firms

affiliated with KPMG International Cooperative (“KPMG

International”) a Swiss entity.

42

Company No. 880595-D

Opinion

In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position as of 30 June 2013 and of the consolidated financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards.

Other Matters

i) The consolidated financial statements as at and for the period ended 30 June 2012 were audited in accordance with approved standards on auditing in Malaysia by another auditor who expressed an unmodified opinion on those statements on 14 November 2012.

ii) On 9 December 2011, the Company decided to, effective from 1 January 2012, change its financial year end from 31 December to 30 June to be coterminous with the financial year end of its immediate holding company. Accordingly, the consolidated financial statements for the last financial period were drawn up for the period from 1 January 2012 to 30 June 2012. As a result, the comparative information in the consolidated statement of financial position is 30 June 2012, whereas the comparative information for the consolidated statements of profit or loss and cash flows is that for the 6 months period from 1 January 2012 to 30 June 2012

KPMG

Firm Number: AF 0758

Chartered Accountants

Petaling Jaya,

Date: 25 October 2013

43

BORAL GYPSUM ASIA SDN. BHD.

(Company No. 880595-D)

(Incorporated in Malaysia)

AND ITS SUBSIDIARIES

Statement by Directors

In the opinion of the Directors, the consolidated financial statements are drawn up in accordance with International Financial Reporting Standards so as to give a true and fair view of the financial position as at 30 June 2013 and of its financial performance and cash flows for the financial year then ended.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

Richard Charles Ogden

Frederic De Rougemont

Petaling Jaya,

Date: 25 October 2013

44

EX-99.3

Exhibit 99.3

Boral Australian Gypsum Limited

Full Year Financial Report

30 June 2013

ABN 84 004 231 976

US GAAS - 25 October 2013

Boral Australian Gypsum Limited and Controlled Entities

Directors’ Declaration

In the opinion of the Directors of Boral Australian Gypsum Limited;

1 The consolidated financial statements and notes set out on pages 1 to 30:

(a) are not prepared for statutory reporting purposes;

(b) are prepared in accordance with International Financial Reporting Standards;

(c) present fairly the Group’s financial position as at 30 June 2013 and of its performance for the financial year ended on that date; and

2 There are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors

T Charnock

Director

Sydney, 25 October 2013

Boral Australian Gypsum Limited and Controlled Entities

TABLE OF CONTENTS

Income Statement	1
Statement of Comprehensive Income	2
Balance Sheet	3
Statement of Changes in Equity	4
Statement of Cash Flows	5
Notes to the Financial Statements	6
1   Significant accounting policies	6
2   Profit for the period	13
3   Significant items	14
4   Income tax expense	15
5   Dividends	15
6   Cash and cash equivalents	16
7   Receivables	16
8   Inventories	17
9   Investments accounted for using the equity method	17
10 Property, plant and equipment	19
11 Intangibles	20
12 Joint ventures	20
13 Payables	21
14 Loans and borrowings	21
15 Income tax receivables	22
16 Deferred tax assets and liabilities	22
17 Provisions	23
18 Issued capital	24
19 Reserves	24
20 Contingent liabilities	25
21 Commitments	25
22 Financial risk management	26
23 Controlled entities	28
24 Related party disclosures	28
25 Notes to statement of cash flows	30
Independent Auditor’s Report	31

US GAAS - 25 October 2013

INCOME STATEMENT

Boral Australian Gypsum Limited and Controlled Entities

			CONSOLIDATED
For the year ended 30 June	Note		2013 A$’000			2012 A$’000
Revenue		2		359,062			378,959
Cost of sales				(240,520	)		(258,991	)
Selling and distribution expenses				(81,906	)		(84,571	)
Administrative expenses				(20,117	)		(19,575	)
				(342,543	)		(363,137	)
Other expenses		2		(3,648	)		(3,891	)
Share of net profit of associates		9		9,963			8,671
Profit before net financing costs and income tax expense				22,834			20,602
Financial income		2		500			649
Financial expenses		2		(9,036	)		(8,320	)
Net financing costs				(8,536	)		(7,671	)
Profit before income tax expense				14,298			12,931
Income tax expense		4		(311	)		(1,842	)
Net profit				13,987			11,089

The income statement should be read in conjunction with the accompanying notes which form an integral part of the financial statements.

US GAAS - 25 October 2013 1

STATEMENT OF COMPREHENSIVE INCOME

Boral Australian Gypsum Limited and Controlled Entities

	CONSOLIDATED
For the year ended 30 June	2013 A$’000		2012 A$’000
Net profit		13,987		11,089
Other comprehensive income
Items that may be reclassified subsequently to Income Statement:
Share of net exchange differences from translation of foreign operations of an associate taken directly to equity		278		—
Total comprehensive income		14,265		11,089

The statement of comprehensive income should be read in conjunction with the accompanying notes which form an integral part of the financial statements.

US GAAS - 25 October 2013 2

BALANCE SHEET

Boral Australian Gypsum Limited and Controlled Entities

			CONSOLIDATED
As at 30 June	Note		2013 A$’000		2012 A$’000
CURRENT ASSETS
Cash and cash equivalents		6		11,546		31,200
Receivables		7		58,620		58,627
Inventories		8		38,221		41,553
Income tax receivable		15		1,392		589
Deposits and prepayments				933		1,597
TOTAL CURRENT ASSETS				110,712		133,566
NON-CURRENT ASSETS
Receivables		7		7,750		8,250
Investments accounted for using the equity method		9		13,918		12,677
Property, plant and equipment		10		309,838		313,041
Intangibles		11		12,791		12,791
TOTAL NON-CURRENT ASSETS				344,297		346,759
TOTAL ASSETS				455,009		480,325
CURRENT LIABILITIES
Payables		13		36,766		40,690
Loans and borrowings		14		234,084		262,255
Provisions		17		14,320		14,877
TOTAL CURRENT LIABILITIES				285,170		317,822
NON-CURRENT LIABILITIES
Deferred tax liabilities		16		1,361		220
Provisions		17		1,178		1,248
TOTAL NON-CURRENT LIABILITIES				2,539		1,468
TOTAL LIABILITIES				287,709		319,290
NET ASSETS				167,300		161,035
EQUITY
Issued capital		18		13,500		13,500
Reserves		19		225		(53	)
Retained earnings				153,575		147,588
TOTAL EQUITY				167,300		161,035

The balance sheet should be read in conjunction with the accompanying notes which form an integral part of the financial statements.

US GAAS - 25 October 2013 3

STATEMENT OF CHANGES IN EQUITY

Boral Australian Gypsum Limited and Controlled Entities

	CONSOLIDATED
For the year ended 30 June 2013	Issued capital A$’000		Reserves A$’000			Retained earnings A$’000			Total A$’000
Balance at 1 July 2012		13,500		(53	)		147,588			161,035
Net profit		—		—			13,987			13,987
Other comprehensive income
Share of net exchange differences from translation of foreign operations of an associate taken directly to equity		—		278			—			278
Total comprehensive income		—		278			13,987			14,265
Transactions with owners in their capacity as owners
Dividends paid		—		—			(8,000	)		(8,000	)
Total transactions with owners in their capacity as owners		—		—			(8,000	)		(8,000	)
Balance at 30 June 2013		13,500		225			153,575			167,300

	CONSOLIDATED
For the year ended 30 June 2012	Issued capital A$’000		Reserves A$’000			Retained earnings A$’000			Total A$’000
Balance at 1 July 2011		13,500		(53	)		144,499			157,946
Net profit		—		—			11,089			11,089
Other comprehensive income		—		—			—			—
Total comprehensive income		—		—			11,089			11,089
Transactions with owners in their capacity as owners Dividends paid		—		—			(8,000	)		(8,000	)
Total transactions with owners in their capacity as owners		—		—			(8,000	)		(8,000	)
Balance at 30 June 2012		13,500		(53	)		147,588			161,035

The statement of changes in equity should be read in conjunction with the accompanying notes which from an integral part of the financial statements.

US GAAS - 25 October 2013 4

STATEMENT OF CASH FLOWS

Boral Australian Gypsum Limited and Controlled Entities

			CONSOLIDATED
For the year ended 30 June	Note		2013 A$’000			2012 A$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers				398,232			429,104
Payments to suppliers and employees				(366,179	)		(380,830	)
				32,053			48,274
Dividends received				9,000			9,000
Interest received				500			649
Borrowing costs paid				(9,036	)		(8,320	)
Income taxes (paid)/received				27			(9,131	)
Restructure costs		25		(2,377	)		(3,511	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		25		30,167			36,961
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment				(14,858	)		(75,405	)
Proceeds on disposal of non-current assets				708			111
Loans to associates				500			(750	)
NET CASH USED IN INVESTING ACTIVITIES				(13,650	)		(76,044	)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid				(8,000	)		(8,000	)
Repayment of borrowings				(28,171	)		56,873
NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES				(36,171	)		48,873
NET CHANGE IN CASH AND CASH EQUIVALENTS				(19,654	)		9,790
Cash and cash equivalents at the beginning of the year				31,200			21,410
Cash and cash equivalents at the end of the year		25		11,546			31,200

The cash flow statement should be read in conjunction with the accompanying notes which form an integral part of the financial statements.

US GAAS - 25 October 2013 5

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

1. Significant accounting policies

Boral Australian Gypsum Limited (the “Company”) is a company limited by shares incorporated and domiciled in Australia.

The consolidated financial statements for the year ended 30 June 2013 comprise Boral Australian Gypsum Limited and its controlled entities and interests in associates (the “Group”).

The address of the company’s registered office is 50 Bridge Street, Sydney, NSW 2000.

The financial statements were authorised for issue by the Directors on 25 October 2013.

The Group is a for-profit entity and is primarily involved in the manufacture and supply of gypsum wall linings in Australia. The major end use markets for the Group include residential and non-residential construction.

A. Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

The financial statements are presented in Australian dollars, which is the Company’s functional currency. The functional currency is the principal currency in which subsidiaries and associates operate.

The financial statements have been prepared on the basis of historical cost.

The amounts in the financial statements have been rounded off to the nearest one thousand dollars unless otherwise stated.

Going concern basis of preparation

The financial statements have been prepared on a going concern basis that assumes continuity of normal trading activities and the realisation of assets and settlement of liabilities in the normal course of business. The Group has a deficiency in net current assets of $174,458,000 as at 30 June 2013 due to the inclusion of $234,084,000 of loans owing to the ultimate holding company, Boral Limited, as a current liability. The Directors nevertheless believe that it is appropriate to prepare the financial statements on a going concern basis given a formal commitment from Boral Limited that they will not call for repayment of the loan within twelve months and will convert the loan to equity within twelve months.

Significant accounting judgements, estimates and assumptions:    The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

US GAAS - 25 October 2013 6

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

Information about the principal areas in which judgement is applied is included in:

Ÿ Note 1 (K) and Note 11—Intangibles

Changes in accounting policies:    The Group has adopted all new and amended IFRS Standards and International Financial Reporting Interpretations Committee (IFRIC) interpretations that are mandatory for the current reporting period and relevant to the Group. Adoption of these standards and interpretations has not resulted in any material changes to the Group’s financial statements.

New accounting standards:    Several new accounting standards have been published that are not mandatory for this reporting period and have not yet been adopted by the Group.

IFRS 10 Consolidated Financial Statements,

IFRS 11 Joint Arrangements,

IFRS 12 Disclosure of Interests in Other Entities,

IFRS 13 Fair Value Measurement,

IAS 19 Employee Benefits (revised),

IAS 28 Investments in Associates and Joint Ventures,

IFRIC 20 Stripping Costs in the production phase of a surface mine

The impact of these changes are still being fully assessed, however, initial assessments indicate that there will be no significant impact on the Group’s financial statements.

B. Principles of consolidation

Subsidiaries:    Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the Group’s financial statements from the date that control commences until the date that control ceases.

Associates:    Associates are those entities for which the Group has significant influence, but not control, over the financial and operating policies. The financial statements include the Group’s share of the total recognised gains and losses of associates on an equity accounted basis, from the date that significant influence commences until the date that significant influence ceases. When the Group’s share of losses exceeds its interest in an associate, the Group’s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of an associate.

Jointly controlled operations and assets:    The interests of the Group in unincorporated joint ventures and jointly controlled assets are brought to account by recognising in its financial statements the assets it controls and the liabilities that it incurs, and the expenses it incurs and its share of income that it earns from the sale of goods or services by the joint venture.

US GAAS - 25 October 2013 7

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

Transactions eliminated on consolidation:    Intragroup balances and transactions, and any unrealised gains and losses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates and jointly controlled entities are eliminated to the extent of the Group’s interest in the entity. Unrealised losses arising from transactions with associates are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

C. Revenue recognition

Revenue is recognised at fair value of the consideration received net of the amount of goods and services tax (GST).

Sale of goods revenue is recognised (net of returns, discounts and allowances) when the significant risks and rewards of ownership have been transferred to the buyer, which is the date goods are delivered to the customer.

D. Income tax

Income tax disclosed in the Income Statement comprises current and deferred tax. Income tax is recognised in the Income Statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustments to tax payable in respect to previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable profits and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Tax consolidation:    Boral Australian Gypsum Limited and its wholly owned Australian controlled entities elected to enter into tax consolidation effective 1 July 2002. As a consequence all members of the tax consolidated group are taxed as a single entity. The head entity is the ultimate parent entity, Boral Limited.

E. Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

US GAAS - 25 October 2013 8

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet.

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

F. Net financing costs

Financing costs include interest payable on borrowings calculated using the effective interest rate method, and finance charges in respect of finance leases.

Financing costs are recognised as an expense in the period in which they are incurred, unless they relate to a qualifying asset. Financing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale.

Financial income is recognised as it accrues taking into account the effective yield on the financial asset.

G. Foreign currencies

Transactions:    Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Australian dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the Income Statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Translation:    The financial statements of foreign operations are translated to Australian dollars as follows:

Ÿ assets (including goodwill) and liabilities for each balance sheet are translated at the closing rate at the date of that balance sheet;

Ÿ all resulting exchange differences are recognised as a separate component of equity (foreign currency translation reserve); and

Ÿ income and expenses for each Income Statement are translated at average exchange rates approximating the rates prevailing on the transaction dates.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to the foreign currency translation reserve. When a foreign operation is sold, a proportionate share of such exchange differences are recognised in the Income Statement as part of the gain or loss on sale.

H. Receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less allowance for impairment. An allowance for impairment is established when there is objective

US GAAS - 25 October 2013 9

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows. The amount of the allowance is recognised in the Income Statement.

I. Inventories

Inventories and work in progress are valued at the lower of cost (including materials, labour and appropriate overheads) and net realisable value. Cost is determined predominantly on the first-in-first-out basis of valuation. Net realisable value is determined on the basis of each entity’s normal selling pattern. Expenses of marketing, selling and distribution to customers are estimated and are deducted to establish net realisable value.

J. Impairment

The carrying value of the Group’s assets, other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For goodwill, the recoverable amount is assessed at each balance date.

An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in the Income Statement, unless the asset has previously been revalued, in which case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess recognised through the Income Statement. Impairment losses recognised in respect of cash generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash generating units (group of units) and then, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

The recoverable amount of other assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value of money using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

Reversals of impairment:    An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount.

An impairment loss is reversed only to the extent of the asset’s carrying amount net of depreciation or amortisation, as if no impairment loss has been recognised.

K. Goodwill

Goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units and is not amortised but is tested annually for impairment. In respect of associates, the carrying amount of goodwill is included in the carrying amount of the investment in the associate.

US GAAS - 25 October 2013 10

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

Negative goodwill arising on an acquisition is recognised directly in the Income Statement.

L. Property, plant and equipment

Owned assets:    Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses. The cost of self-constructed assets includes the cost of materials, direct labour and an appropriate proportion of production overheads. Assessment of impairment loss is made in accordance with the impairment policy.

The cost of property, plant and equipment includes the cost of decommissioning and restoration costs at the end of their economic lives if a present legal or constructive obligation exists.

When an item of property, plant and equipment comprises major components having different useful lives, they are accounted for as separate items of property, plant and equipment.

Leased plant and equipment:    Leases under which the Group assumes substantially all the risk and rewards of ownership are classified as finance leases. Other leases are classified as operating leases. Finance leases are capitalised. A lease asset and a lease liability equal to the present value of the minimum lease payments are recorded at the inception of the lease. Lease liabilities are reduced by repayments of principal. The interest components of the lease payments are expensed. Contingent rentals are expensed as incurred.

Operating leases are not capitalised and lease costs are expensed.

Depreciation:    Items of property, plant and equipment, including buildings and leasehold property but excluding freehold land, are depreciated using the straight-line method over their expected useful lives. Assets are depreciated from the date of acquisition or, in respect of internally constructed assets, from the time an asset is completed and held ready for use.

The depreciation and amortisation rates used for each class of asset are as follows:

	2013			2012
Buildings		1 – 10	%		1 – 10	%
Plant and equipment		5 – 33.3	%		5 – 33.3	%

M. Payables

Trade payables and other accounts payable are recognised when the Group becomes obliged to make future payments resulting from the purchase of goods and services. Payables are stated at their amortised cost.

N. Employee benefits

Wages and salaries:    The provision for employee entitlement to wages and salaries represents the amount which the Group has a present obligation to pay resulting from employee’s services provided up to the balance date.

Annual leave, long service leave and retirement benefits:    The provision for employee entitlements in respect of long service leave and retirement benefits represents the present value of the estimated future cash outflows to be made by the employer resulting from employees’ services provided up to the balance date.

US GAAS - 25 October 2013 11

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

Provisions for employee entitlements which are not expected to be settled within 12 months are calculated using expected future increases in wage and salary rates, including related on-costs and expected settlement dates based on turnover history and are discounted using the rates attached to national government securities at balance date, which most closely match the terms of maturity of the related liabilities.

Superannuation:    The Group contributes to several defined benefit and defined contribution superannuation plans. Obligations are recognised as an expense in the Income Statement as incurred.

The Group is a participant in the Boral Super sub-plan of the Plum Superannuation Fund. It has a defined benefit plan and an accumulation plan. In April 2013, Boral Limited formally advised the Trustee of the Boral Super sub-plan of the Plum Superannuation Fund that under Rule 4.5(d)(1) it intended to terminate contributions in respect of defined benefit members and under Rule 4.2(c) to reclassify these defined benefit members as accumulation members with effect as at 30 June 2013.

O. Provisions

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is applied, increases in the balance of provisions attributable to the passage of time are recognised as an interest expense.

US GAAS - 25 October 2013 12

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

P. Share capital

Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Transaction costs directly attributable to the issue of ordinary shares are recognised directly to equity, as a reduction of the share proceeds received, net of any tax effects.

		CONSOLIDATED
For the year ended 30 June	Note	2013 A$’000			2012 A$’000
2. Profit for the period
REVENUE
Sale of goods			359,062			378,959
Total			359,062			378,959
OTHER EXPENSES
Significant items	3		2,377			3,863
Net loss on sale of assets			1,271			28
Other expenses			3,648			3,891
DEPRECIATION AND AMORTISATION EXPENSES
Buildings			1,962			3,399
Plant and equipment			14,061			10,000
Leased assets capitalised			59			71
Other intangibles			—			64
			16,082			13,534
NET FINANCING INCOME/(COSTS)
Interest income received or receivable from:
Associated entities			496			640
Other parties (cash at bank and bank short-term deposits)			4			9
			500			649
Interest expense paid or payable to:
Related parties*			9,033			8,317
Finance charges on capitalised leases			3			3
			9,036			8,320
Net financing income/(costs)			(8,536	)		(7,671	)

* In addition, interest of $Nil (2012: $2,731,000) was paid to related parties and capitalised in respect of qualifying assets. The capitalisation rate used was 6.0%.

OTHER CHARGES
Employee benefits expense*	97,543	103,757
Operating lease rental charges	16,282	17,887
Bad and doubtful debts expense	488	1,911

* Employee benefits expense includes salaries and wages, defined benefit, defined contribution expenses termination and other entitlements.

US GAAS - 25 October 2013 13

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

				CONSOLIDATED
For the year ended 30 June	Note			2013 A$’000			2012 A$’000
3. Significant items
Net profit includes the following items whose disclosure is relevant in explaining the financial performance of the Group:
Organisational restructure costs		(i	)		(2,377	)		(349	)
Demolition and other costs		(ii	)		—			(3,514	)
Summary of significant items
Profit/(loss) before tax					(2,377	)		(3,863	)
Income tax benefit					713			1,159
Net significant items					(1,664	)		(2,704	)

2013 Significant items

(i) Organisational restructure costs

During the year, Boral Australian Gypsum Limited incurred costs and redundancies associated with a coordinated Boral Limited group-wide organisation restructure program to simplify business structures and improve operational efficiency. This resulted in costs of $2,377,000.

2012 Significant items

(ii) Demolition and other costs

Demolition and other costs associated with the construction of new facilities at Port Melbourne including the impairment of property, plant and equipment of $352,000.

US GAAS - 25 October 2013 14

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

		CONSOLIDATED
For the year ended 30 June		2013 A$’000			2012 A$’000
4. Income tax expense
(i) Income tax expense
Current income tax expense/(benefit)			(318	)		982
Deferred income tax expense/(benefit)			1,141			340
Under/(over) provision for tax in previous years			(512	)		520
Income tax expense/(benefit) attributable to profit			311			1,842
(ii) Reconciliation of income tax expense to prima facie tax
Income tax expense on profit:
—at Australian tax rate 30% (2012: 30%)			4,289			3,879
Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:
Share of associates’ net profit			(2,989	)		(2,601	)
Other items			(477	)		44
Income tax expense on profit			823			1,322
Under/(over) provision for tax in previous years			(512	)		520
Income tax expense attributable to profit			311			1,842
Income tax expense/(benefit)
Income tax expense/(benefit) excluding significant items			1,024			3,001
Income tax expense/(benefit) relating to significant items	3		(713	)		(1,159	)
			311			1,842

(iii) Tax amounts recognised directly in equity

There were no deferred tax amounts charged/(credited) directly to equity during the year.

5. Dividends

Dividends recognised by the Group are:

	Amount per share		Total amount A$’000s		Franked amount per share		Date of payment
2013
2013 final—ordinary		118.5		8,000		n/a		28 June 2013
Total				8,000
2012
2012 final—ordinary		118.5		8,000		n/a		29 June 2012
Total				8,000

US GAAS - 25 October 2013 15

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

Dividend franking account

Boral Australian Gypsum Limited is a member of the Boral Limited tax group and accordingly all franking credits belong to Boral Limited being the head entity of the tax group.

	CONSOLIDATED
	2013 A$’000			2012 A$’000
6. Cash and cash equivalents
Cash at bank and on hand		11,546			31,200
Cash and cash equivalents		11,546			31,200
7. Receivables
Current
Trade receivables		56,819			56,235
Associated entities		573			361
		57,392			56,596
Less: Allowance for impairment		(669	)		(743	)
		56,723			55,853
Other receivables		1,897			2,774
Less: Allowance for impairment		—			—
		1,897			2,774
		58,620			58,627

The Group requires all customers to pay in accordance with agreed payment terms. Included in the Group’s trade receivables are debtors with a carrying value of $18,531,000 (2012: $19,780,000), which are past due but not impaired. These relate to a number of debtors with no significant change in credit quality or history of default. The ageing analysis is as follows:

Trade receivables—past due 0-60 days	17,546	18,552
Trade receivables—past due > 60 days	985	1,228

Allowance for impairment

An allowance for impairment of trade receivables is raised when there is objective evidence that an individual receivable is impaired. Indicators of impairment would include significant financial difficulties of the debtor, the probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in payments.

US GAAS - 25 October 2013 16

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

The movement in the allowance for impairment in respect to trade receivables during the year was as follows:

	CONSOLIDATED
	2013 A$’000			2012 A$’000
Balance at the beginning of the year		(743	)		(927	)
Amounts written off during the year		562			2,095
Increase recognised in income statement		(488	)		(1,911	)
Balance at the end of the year		(669	)		(743	)
Non-current
Loans to associated entities		7,750			8,250
		7,750			8,250

No amounts owing by associates or included in other receivables were past due as at 30 June 2013.

	CONSOLIDATED
	2013 A$’000		2012 A$’000
8. Inventories
Current
Raw materials and consumable stores		17,489		14,677
Work in progress		3,050		2,394
Finished goods		17,682		24,482
		38,221		41,553

9. Investments accounted for using the equity method

CONSOLIDATED

OWNERSHIP INTEREST

INVESTMENT CARRYING AMOUNT

Name

Principal activity

Country of Incorporation

Balance date

2013 %

2012 %

2013      A$’000

2012      A$’000

Details of investments in associates

Gypsum Resources Australia Pty Ltd

Trustee Company

Australia

30-Jun

50

50

—

—

Rondo Building Services Pty Ltd

Rollform systems

Australia

30-Jun

50

50

13,918

12,677

TOTAL

13,918

12,677

US GAAS - 25 October 2013 17

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

	CONSOLIDATED
	2013 A$’000			2012 A$’000
Movements in carrying value of associates
Balance at the beginning of the year		12,677			13,006
Share of associates’ net profit		9,963			8,671
Dividends from associates		(9,000	)		(9,000	)
Share of associates’ movement in currency reserve		278			—
Balance at the end of the year		13,918			12,677
	CONSOLIDATED
	2013 A$’000			2012 A$’000
Summary of performance and financial position of associates
The Group’s share of aggregate revenue, profits, assets and liabilities of associates is as follows:
Share of associates’ revenue		77,320			77,045
Share of associates’ profit before income tax expense		14,221			12,333
Share of associates’ income tax expense		(4,258	)		(3,662	)
Share of associates’ net profit		9,963			8,671
Share of associates’ net assets
Current assets		28,560			25,412
Non-current assets		5,315			5,598
Total assets		33,875			31,010
Current liabilities		17,457			7,813
Non-current liabilities		2,500			10,520
Total liabilities		19,957			18,333
Net assets		13,918			12,677
Share of associates’ commitments
Share of associates’ capital expenditure commitments contracted but not provided for:
Not later than one year		753			101
Share of associates’ operating lease commitments payable:
Not later than one year		3,844			3,366
Later than one year but not later than five years		11,245			8,822
Later than five years		2,371			3,976
		17,460			16,164

US GAAS - 25 October 2013 18

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

	CONSOLIDATED
	2013 A$’000			2012 A$’000
10. Property, plant and equipment
Land and buildings
At cost		147,104			126,637
Less: Accumulated depreciation, amortisation and impairment		(15,333	)		(13,527	)
		131,771			113,110
Plant and equipment
At cost		279,508			296,087
Less: Accumulated depreciation and impairment		(101,541	)		(96,315	)
		177,967			199,772
Leased plant and equipment capitalised		230			230
Less: Accumulated amortisation		(130	)		(71	)
		100			159
		178,067			199,931
Total		309,838			313,041
Reconciliations
Land and buildings
Balance at the beginning of the year		113,110			115,641
Additions		148			858
Disposals		(623	)		—
Transferred from plant and equipment		21,098			10
Depreciation expense		(1,962	)		(3,399	)
Balance at the end of the year		131,771			113,110
Plant and equipment
Balance at the beginning of the year		199,931			135,958
Additions		14,710			74,545
Disposals		(1,356	)		(139	)
Transferred to land and buildings		(21,098	)		(10	)
Impairment included in significant items		—			(352	)
Depreciation expense		(14,120	)		(10,071	)
Balance at the end of the year		178,067			199,931

US GAAS - 25 October 2013 19

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

	CONSOLIDATED
	2013 A$’000		2012 A$’000
11. Intangibles
Goodwill		12,791		12,791

Impairment testing for cash generating units containing goodwill

Boral Australia Gypsum Limited is responsible for the manufacture and distribution of plasterboard and associated products throughout Australia. Sales are made direct to major builders or via a network of retail outlets consisting of wholly owned and independent distributors. For impairment purposes plasterboard Australia is treated as a single cash generating unit (CGU).

Key assumptions

The recoverable amount of the CGU has been determined based on its value in use. Value in use calculations use pre-tax cash flow projections based on financial budgets and plans approved by management. Cash flows are projected over a ten year period to recognise the cyclical nature of the Australian building industry. Cash flows beyond the projection period are extrapolated using a growth rate of 2.5%. This growth rate does not exceed the long-term average growth rate for the industry in which the CGU operates.

The Company’s weighted cost of capital is used as a starting point for determining the discount rate. The discount rate applied to pre-tax cash flows is 12.5%.

The key assumptions relate to:

Ÿ housing starts and market share, plasterboard demand, plasterboard intensity and economic activity in Australia.

These assumptions have been determined with reference to current performance and taking into account external forecasts. Housing starts and plasterboard demand forecasts utilised in the cash flow projections are based on historical experiences.

The recoverable amount of the CGU based on value in use exceeds its carrying value as at 30 June 2013. Management believes no reasonable changes in the key assumptions on which the estimates are based would cause the carrying amount to exceed the recoverable amount.

12. Joint Ventures

The Group has a fifty per cent interest in Gypsum Resources Trust, a unit trust domiciled in Australia and primarily involved in the manufacture and distribution of gypsum products.

There has been no change in the Group’s ownership or voting interest in the joint venture in the reported years.

US GAAS - 25 October 2013 20

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

The following amounts are included in the Group’s financial statements as a result of the proportionate consolidation of Gypsum Resources Trust.

	CONSOLIDATED
	2013 A$’000			2012 A$’000
Current Assets		14,745			15,183
Non-Current Assets		4,985			5,866
Current Liabilities		(3,531	)		(5,439	)
Non-Current Liabilities		—			—
Net Assets		16,199			15,610
Income		23,661			26,479
Expenses		(23,661	)		(26,479	)
Operating leases
Lease commitments in respect of operating leases are payable as follows:
Not later than one year		255			308
Later than one year but not later than five years		912			631
Later than five years		1,311			522
		2,478			1,461

	CONSOLIDATED
	2013 A$’000		2012 A$’000
13. Payables
Current
Trade creditors		33,338		36,913
Due to other related parties		993		1,284
Due to associated entities		2,435		2,493
		36,766		40,690
14. Loans and borrowings
Current
Loans from ultimate parent entity		234,084		262,247
Finance lease liabilities		—		8
		234,084		262,255

US GAAS - 25 October 2013 21

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

Loans from the ultimate parent entity are at call and incur an interest at a rate of Libor + 0.5%, charged monthly in arrears. The weighted average interest rate of these loans at 30 June 2013 is 3.32% (2012: 4.075%). Subsequent to year end the company has received confirmation from the ultimate parent entity that the loans will not be called and will be converted to equity within 12 months from the date these financial statements are signed.

	CONSOLIDATED
	2013 A$’000		2012 A$’000
15. Income tax receivable
Current
Current tax receivable		1,392		589

The Group is a member of the Boral Limited tax consolidation group and under the terms of a tax sharing agreement the current tax receivable will be settled against the parent entity loan account in the subsequent year.

16. Deferred tax assets and liabilities

Recognised deferred tax balances
Deferred tax asset	4,467		5,093
Deferred tax liability	(5,828	)	(5,313	)
	(1,361	)	(220	)

MOVEMENT IN TEMPORARY DIFFERENCES DURING THE YEAR

	CONSOLIDATED
As at 30 June 2013	Balance at beginning of year A$’000			Recognised in income A$’000			Balance at end of year A$’000
Receivables		223			(23	)		200
Inventories		(994	)		(111	)		(1,105	)
Deposits and prepayments		(99	)		106			7
Property, plant and equipment		(4,220	)		(503	)		(4,723	)
Provisions		4,809			(722	)		4,087
Other		61			112			173
		(220	)		(1,141	)		(1,361	)

US GAAS - 25 October 2013 22

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

	CONSOLIDATED
As at 30 June 2012	Balance at beginning of year A$’000			Recognised in income A$’000			Balance at end of year A$’000
Receivables		278			(55	)		223
Inventories		(1,168	)		174			(994	)
Deposits and prepayments		—			(99	)		(99	)
Property, plant and equipment		(3,990	)		(230	)		(4,220	)
Provisions		4,905			(96	)		4,809
Other		95			(34	)		61
		120			(340	)		(220	)

	CONSOLIDATED
	2013 A$’000		2012 A$’000
17. Provisions
Current
Employee benefits		12,535		14,025
Rationalisation and restructuring		478		400
Claims		1,307		452
		14,320		14,877
Non-current
Employee benefits		1,063		1,135
Other		115		113
		1,178		1,248

Rationalisation and restructuring

Provisions for rationalisation and restructuring are recognised when a detailed plan has been approved and the restructuring has either commenced or been publicly announced, or firm contracts related to the restructuring have been entered into. Costs related to ongoing activities are not provided for.

Claims

Provisions are raised for liabilities arising from the ordinary of course business, in relation to claims against the Group, including insurance, legal and other claims. Where recoveries are expected in respect of such claims, these are included in other receivables.

US GAAS - 25 October 2013 23

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

Other

Other includes provision for workers compensation liabilities in South Australia which are self insured in conjunction with Boral Limited.

Reconciliations

	CONSOLIDATED
	2013 A$’000		2012 A$’000
Rationalisation and restructuring
Balance at the beginning of the year		400		637
Provision made/(released) during the year		78		(237	)
Balance at the end of the year		478		400
Claims
Balance at the beginning of the year		452		975
Provisions made/(released) during the year		855		(523	)
Balance at the end of the year		1,307		452
Other
Balance at the beginning of the year		113		76
Provisions made during the year		2		37
Balance at the end of the year		115		113

	CONSOLIDATED
	2013 A$’000		2012 A$’000
18. Issued capital
Issued and paid up capital
6,750,003 (2012:6,750,003) ordinary shares of $2 each, fully paid		13,500		13,500

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’ meetings.

In the event of a winding up of Boral Australian Gypsum Limited ordinary shareholders rank after creditors and are fully entitled to any proceeds of liquidation.

	CONSOLIDATED
	2013 A$’000			2012 A$’000
19. Reserves
Foreign currency translation reserve		225			(53	)
		225			(53	)
Reconciliations
Foreign currency translation reserve
Balance at the beginning of the year		(53	)		(53	)
Net loss on translation of assets and liabilities of foreign operations of an associate		278			—
Balance at the end of the year		225			(53	)

US GAAS - 25 October 2013 24

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

Nature and purpose of reserves

Foreign currency translation reserve

The translation reserve comprises the Group’s share of the translation reserve recognised in the financial statements of associated entities.

20. Contingent liabilities

Details of contingent liabilities and contingent assets where probability of future payments/receipts is not considered remote are set out below.

The company has given to its bankers letters of responsibility in respect of accommodation provided from time to time by the banks to related entities.

A number of sites within the Group have been identified as contaminated, generally as a result of prior activities conducted at the sites, and review and appropriate implementation of clean-up requirements for these is ongoing. For sites where the requirements can be assessed, estimated clean-up costs have been expensed or provided for. For some sites, the requirements cannot be reliably assessed at this stage.

The Company is subject to various lawsuits and claims in the ordinary course of business.

The Company is the subject of periodic information requests, investigations and audit activity by the Australian Taxation Office (ATO).

The Company has considered all of the above claims and, where appropriate, sought independent advice and believes it holds appropriate provisions.

Deed of Cross Guarantee

The Company and its controlled entities are parties to the Boral Limited Deed of Cross Guarantee, with the effect that the Company and its controlled entities guarantees debts in respect of Boral Limited Group Companies that are also parties to the Deed of Cross Guarantee.

	CONSOLIDATED
	2013 A$’000		2012 A$’000
21. Commitments
Capital expenditure commitments
Contracted but not provided for are payable as follows:
Not later than one year		1,104		3,851
Later than one year but not later than five years		—		—
		1,104		3,851

US GAAS - 25 October 2013 25

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

The capital expenditure commitments are in respect of the purchase of plant and equipment.

	CONSOLIDATED
	2013 A$’000		2012 A$’000
Operating leases
Lease commitments in respect of operating leases are payable as follows:
Not later than one year		10,230		10,375
Later than one year but not later than five years		11,087		13,556
Later than five years		2,209		2,619
		23,526		26,550

The Group leases property, equipment and vehicles under operating leases expiring from one to 21 years. Leases generally provide the consolidated entity with a right of renewal at which time all terms are renegotiated. Some leases involve lease payments comprising a base amount plus an incremental contingent rental. Contingent rentals are based on the Consumer Price Index or operating criteria.

22. Financial risk management

The Group’s business activities are exposed to a variety of financial risks, including credit, liquidity, foreign currency and interest rate risks. The Group does not use any derivative financial instruments to hedge these risks, although the parent entity, Boral Limited may take out forward foreign exchange contracts on behalf of the Group. The Group does not use derivative or financial instruments for trading or speculative purposes.

The use of financial derivatives is controlled by policies approved by Boral’s Board of Directors.

CREDIT RISK

Exposure to credit risk

The Group has a large number of customers to which it provides products, with no single customer responsible for more than 10% of the Group’s revenue.

Management has a counterparty credit risk policy in place and the exposure to credit risk is monitored on an ongoing basis.

The carrying amount of non-derivative financial assets represents the maximum credit exposure and at the reporting date the maximum exposure was:

	CONSOLIDATED
	Carrying amount 2013 A$’000		Fair value 2013 A$’000		Carrying amount 2012 A$’000		Fair value 2012 A$’000
Loans to and receivables from associates		8,323		8,323		8,611		8,611
Trade and other receivables		58,047		58,047		58,266		58,266
Cash and cash equivalents		11,546		11,546		31,200		31,200
		77,916		77,916		98,077		98,077

The Group has no derivative financial assets.

US GAAS - 25 October 2013 26

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

LIQUIDITY RISK

Liquidity risk is the risk that the Group has insufficient funds to meet its financial obligations when they fall due. It is also associated with planning for unforeseen events or business disruptions that may cause pressure on liquidity. The Group is a member of the Boral Limited group and liquidity risk is managed on a Boral Limited group wide basis. The Boral Limited group manages liquidity risk by ensuring it has a well spread debt maturity profile and has sufficient committed undrawn facilities and cash to meet any unforeseen events and business disruptions. The Group maintains a loan account with Boral Limited which enables it to access funds drawn down on these facilities.

The following are the contractual maturities of financial liabilities:

	CONSOLIDATED
30 June 2013	Carrying amount A$’000		Contractual cash flows A$’000		6 months  or less A$’000		6-12 months A$’000		1-2  years A$’000		2-5  years A$’000		More than 5 years A$’000
Non-derivative financial liabilities
Payable to ultimate parent entity		234,084		241,856		—		241,856		—		—		—
Trade and other payables		36,766		36,766		36,766		—		—		—		—
		270,850		278,622		36,766		241,856		—		—		—

The Group has no derivative financial liabilities:

	CONSOLIDATED
30 June 2012	Carrying amount A$’000		Contractual cash flows A$’000		6 months  or less A$’000		6-12 months A$’000		1-2 years A$’000		2-5 years A$’000		More than 5 years A$’000
Non-derivative financial liabilities
Finance lease liabilities		8		11		11		—		—		—		—
Payable to ultimate parent entity		262,247		272,934		—		272,934		—		—		—
Trade and other payables		40,690		40,690		40,690		—		—		—		—
		302,945		313,635		40,701		272,934		—		—		—

Capital risk management

The capital management objectives of the Group are directed towards preservation of a strong capital base to maintain creditor and market confidence and sustain future development of the business.

Neither the Company nor any of its subsidiaries are subject to any externally imposed capital requirements.

US GAAS - 25 October 2013 27

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

Currency risk

The Group purchases the majority of its materials in Australian dollars. No material receivables or payables are held in a currency other than Australian dollars.

Interest rate risk

The Group is exposed to interest rate risk since it has interest bearing financial assets (cash and cash equivalents) and interest bearing loans payable to the ultimate parent entity.

At 30 June 2013, if interest rates had changed by +/-1% p.a. from the year end rates with all other variables held constant, the Group’s pre-tax profit for the year would have been A$2,225,000 higher/lower (2012: A$2,310,000).

Fair value hierarchy

The Group has no financial assets or liabilities valued at fair value.

23. Controlled entities

There were no acquisitions or disposals during the years ended 30 June 2013 or 30 June 2012.

The financial statements of the following entities have been consolidated to determine the results of the Group.

			Beneficial ownership by
	Country of incorporation		Consolidated entity 2013 %		Consolidated entity 2012 %
Boral Australian Gypsum Limited		Australia		100		100
Waratah Gypsum Pty Ltd (in liquidation)		Australia		100		100
Boral Plaster Fixing Pty Ltd		Australia		100		100
Lympike Pty Ltd		Australia		100		100

All the shares held by Boral Australian Gypsum Limited in controlled entities are ordinary shares.

24. Related party disclosures

PARENT AND ULTIMATE CONTROLLING PARTY

The Company is a wholly owned subsidiary of Boral Building Materials Pty Ltd and the ultimate controlling entity of the Group is Boral Limited.

Transactions with the parent and ultimate parent entity include the payment of dividends to the immediate parent, and the payment of management fees and interest to the ultimate parent. Transactions with other members of the Boral group include purchase and sale of goods and services. All such transactions are conducted on the basis of normal commercial terms and conditions.

CONTROLLED ENTITIES

Interests held in controlled entities are set out in note 23.

US GAAS - 25 October 2013 28

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

ASSOCIATED ENTITIES

Interests held in associated entities are set out in note 9. Associated entities conduct business transactions with various controlled entities. Such transactions include purchases and sales of certain products, dividends and interest. All such transactions are conducted on the basis of normal commercial terms and conditions.

JOINT VENTURE

Interests in joint ventures are set out in note 12. joint ventures conduct business transactions with various controlled entities. Such transactions include purchases and sales of certain products and services. The joint venture mines gypsum and sells it to the venturers at cost. The venturers provide shipping services to the joint venture at cost. All other transactions are conducted on the basis of normal commercial terms and conditions.

TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL

Key management personnel compensation

Key management personnel compensation comprises the following:

	2013 A$’000		2012 A$’000
Short-term employee benefits		565		470
Post employment benefits		25		50
Share-based payments		148		127
Other long term benefits		9		9
		747		656

Key management personnel disclosures relate to those personnel that are in control of the strategic direction of the entity.

Key Management personnel and Director transactions

Transactions entered into during the year with Directors of Boral Australian Gypsum Limited are within normal employee, customer or supplier relationships on terms and conditions no more favorable than dealings in the same circumstances on an arm’s length basis and include:

Ÿ the receipt of dividends from Boral Limited;

Ÿ participation in the Boral Long Term Incentive Plan;

Ÿ reimbursement of expenses;

Ÿ purchases of goods and services.

A number of Directors of the Company hold directorships in other entities. Several of these entities transacted with the Group on terms and conditions no more favourable than those available on an arm’s length basis.

US GAAS - 25 October 2013 29

NOTES TO THE FINANCIAL STATEMENTS

Boral Australian Gypsum Limited and Controlled Entities

			CONSOLIDATED
	Note		2013 A$’000			2012 A$’000
25. Notes to statement of cash flows
(i) Reconciliation of cash and cash equivalents:
Cash includes cash on hand, at bank and short-term deposits, net of outstanding bank overdrafts. Cash as at the end of the year as shown in the statement of cash flows is reconciled to the related items in the balance sheet as follows:
Cash and cash equivalents		6		11,546			31,200
Bank overdrafts				—			—
				11,546			31,200
(ii) Reconciliation of net profit to net cash provided by operating activities:
Net profit				13,987			11,089
Adjustments for non-cash items:
Depreciation and amortisation				16,082			13,534
(Gain)/loss on sale of assets				1,271			28
Impairment of assets				—			352
Non-cash equity income				(963	)		329
Net cash provided by operating activities before change in assets and liabilities				30,377			25,332
Changes in assets and liabilities
—Receivables				7			7,239
—Inventories				3,332			5,709
—Payables				(3,924	)		7,096
—Provisions				(627	)		(415	)
—Current and deferred taxes				338			(7,289	)
—Other				664			(711	)
Net cash provided by operating activities				30,167			36,961
(iii) There are no non-cash financing and investing activities.
(iv) Restructure costs
During the year, the Group incurred costs associated with:
Organisational restructure costs				(2,377	)		—
Demolition and other costs				—			(3,511	)
				(2,377	)		(3,511	)

26. Subsequent Event

On 17 October 2013 the ultimate parent entity Boral Limited announced the formation of a plasterboard joint venture with USG Corporation (USG) in respect of both its Australian and Asian operations. As a result USG will acquire a 50% interest in Boral Australian Gypsum Limited.

US GAAS - 25 October 2013 30

Independent Auditors’ Report

The Board of Directors

Boral Australian Gypsum Limited

We have audited the accompanying consolidated financial statements of Boral Australian Gypsum Ltd and its subsidiaries, which comprise the consolidated balance sheets as of 30 June 2013 and 2012, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Boral Australian Gypsum Ltd and its subsidiaries as of 30 June 2013 and 2012, and the results of their operations and their cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Sydney, NSW Australia

25 October 2013

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Liability limited by a scheme approved under Professional Standards Legislation.

31

EX-99.4

Exhibit 99.4

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial information as of and for the twelve months ended September 30, 2013 has been derived through the application of pro forma adjustments related to our previously announced USG Boral Joint Venture transaction and our private offering of $350 million aggregate principal amount of senior notes announced on October 28, 2013 to our consolidated balance sheet as of September 30, 2013 and our consolidated results of operations for the twelve-month period ended September 30, 2013. The unaudited pro forma condensed consolidated balance sheet data as of September 30, 2013 gives effect to the proposed USG Boral Joint Venture transaction as if it had occurred on that date. The unaudited pro forma condensed consolidated statement of operations for the twelve-month period ended September 30, 2013 gives effect to the proposed USG Boral Joint Venture transaction as if it had occurred on October 1, 2012.

Boral Gypsum Asia Sdn Bhd (the “Boral Asia Business”) and Boral Australian Gypsum Limited (the “Boral Australia Business” and together with the Boral Asia Business, the “Boral Business”) are only required to prepare audited annual and unaudited semi-annual financial statements. Therefore, financial information concerning the Boral Business was not available to us for the purpose of presenting pro forma financial data other than as of and for the twelve-month period ended June 30, 2013, its fiscal year end. Therefore, all pro forma condensed balance sheet information is based on September 30, 2013 balances for USG entities and June 30, 2013 balances for the Boral Business, and the pro forma condensed consolidated statement of operations is based on the operations of USG entities for the twelve-month period ended September 30, 2013 and the Boral Business’ operations for the year ended June 30, 2013.

The unaudited pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable under the circumstances. The unaudited pro forma condensed consolidated financial statements are presented for information purposes only and do not purport to represent what our actual consolidated results of operations or consolidated financial condition would have been had the USG Boral Joint Venture transaction actually occurred on the dates indicated, nor do they purport to project our future consolidated results of operations or consolidated financial condition for any future period or as of any future date. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical consolidated financial statements, including the related notes, in each case, in our annual report on Form 10-K for the fiscal year ended December 31, 2012, and our quarterly report on Form 10-Q for the quarterly period ended September 30, 2013 and the audited financial statements of Boral Gypsum Asia Sdn Bhd and Boral Australian Gypsum Limited attached as Exhibit 99.2 and Exhibit 99.3, respectively, to our current report on Form 8-K dated October 28, 2013. All pro forma adjustments and their underlying assumptions are described more fully in the notes to our unaudited pro forma condensed consolidated financial statements.

Our investment in the USG Boral Joint Venture (the “Investment”), will be accounted for as an equity method investment in accordance with FASB Accounting Standard Codification Topic 810-10, Investments – Equity Method and Joint Ventures. As a result, the contributed entities will be deconsolidated and our investment in the USG Boral Joint Venture will be recorded at cost in a single line on our balance sheet. Cost will be measured by the cash paid plus the fair value of the contributed entities. However, we have not performed the valuation studies necessary to estimate the fair values of our retained investment in our existing subsidiaries and joint ventures. We have presumed that the fair value of assets and liabilities contributed to the joint ventures by both USG and Boral are equal to their carrying values as of the dates indicated. As such, the unaudited pro forma condensed consolidated financial statements do not reflect a gain or loss upon deconsolidation of our wholly owned subsidiaries or consolidated variable interest entities or any amortization resulting from adjusting the carrying value of the assets and liabilities contributed to the

1

USG Boral Joint Venture to fair value at the date the Investment is consummated (the “Investment Date”). A final determination of fair values will reflect appraisals prepared by independent third-parties and will be based on the actual tangible and identifiable intangible assets and liabilities that exist as of the Investment Date. These fair values could be materially different than our estimates.

We also have not adjusted the net income of the Boral Business for differences between U.S. GAAP and International Financial Reporting Standards (“IFRS”) for the Boral Australia Business and Malaysian Financial Reporting Standards (“MFRS”) for the Boral Asia Business. We do not believe any of these differences would result in a material difference to our unaudited pro forma condensed consolidated financial statements.

2

Unaudited Pro Forma Condensed Consolidated Statement of Operations

Twelve months ended September 30, 2013

	Actual Twelve  Months Ended September 30, 2013			Contributed Entities(j)			Add: Pro Forma Adjustments			Pro Forma Twelve Months Ended September 30, 2013
(unaudited; in millions, except for per share amounts)
Net sales	$	3,470		$	37		$	—		$	3,433
Cost of products sold		2,955			31			—			2,924
Gross profit		515			6			—			509
Selling and administrative expenses		309			8			—			301
Restructuring charges		16			—			—			16
Operating profit (loss)		190			(2	)		—			192
Interest expense		203			—			23	(e)		226
Interest income		(4	)		—			—			(4	)
Earnings from equity method investment (USG Boral Joint Venture)		—			—			(25	)(a)(b)		(25	)
Other expense (income), net		—			4			—			(4	)
(Loss) income from continuing operations before income taxes		(9	)		(6	)		2			(1	)
Income tax expense		4			1			—	(g)		3
(Loss) income from continuing operations	$	(13	)	$	(7	)	$	2		$	(4	)
(Loss) income from continuing operations per diluted share(h)	$	(0.12	)	$	(0.06	)	$	0.02		$	(0.04	)

3

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of September 30, 2013

	Actual September 30, 2013		Contributed Entities(j)			Add: Pro Forma Adjustments			Pro Forma September 30, 2013
(unaudited; in millions)
Assets
Cash and cash equivalents	$	452	$	(22	)	$	(193	)(c)	$	237
Short-term marketable securities		100		—			—			100
Receivables, net		386		(6	)		—			380
Inventories		327		(8	)		—			319
Other current assets		60		(2	)		(3	)(c)		55
Total current assets		1,325		(38	)		(196	)		1,091
Long-term marketable securities		38		—			—			38
Property, plant and equipment, net		2,085		(77	)		—			2,008
Equity method investment in USG Boral Joint Venture		—		98	(c)		556	(a)(c)		654
Other assets		266		(30	)		5	(e)		241
Total assets	$	3,714	$	(47	)	$	365		$	4,032
Liabilities and Stockholders’ Equity
Accounts payable	$	271	$	(5	)	$	—		$	266
Accrued expenses		234		(4	)		—			230
Current portion of long-term debt		63		—			—			63
Other current liabilities		25		(2	)		—			23
Total current liabilities		593		(11	)		—			582
Long-term debt		2,252		(7	)		350	(e)		2,595
Pension and other postretirement benefits		531		—			—			531
Other liabilities		266		(4	)		31	(d)(f)		293
Total liabilities		3,642		(22	)		381			4,001
Stockholders’ Equity of Parent		46		—	(i)		(16	)(a)(d)		30
Noncontrolling interest		26		(25	)		—			1
Total liabilities and stockholders’ equity	$	3,714	$	(47	)	$	365		$	4,032

Footnotes to the unaudited pro forma condensed consolidated financial statements:

(a) The determination of our investment in the USG Boral Joint Venture assumes that the fair value of the net assets contributed by both parties is equal to the carrying value of those net assets as of the Investment Date; therefore, the pro forma adjustments assume no gain or loss upon the deconsolidation of our wholly owned subsidiaries or consolidated variable interest entities or any adjustment necessary to reflect our investment in our contributed joint ventures at the lesser of their fair value or carrying value.

(b) In determining the amount of equity method income reflected in the unaudited pro forma condensed consolidated statement of operations, we did not include any adjustments for the differences in accounting under IFRS, or MFRS, versus U.S. GAAP, for our share of the earnings of the Boral Business. Our share of earnings from our wholly owned subsidiaries and joint ventures contributed to the USG Boral Joint Venture transaction was calculated from the most recently available information for those entities, which is for the twelve-month period ended September 30, 2013. Additionally, our share of the earnings of the Boral Business was derived

4

from the most recently available information for the Boral Business, which is for the twelve-month period ended June 30, 2013 as follows (in millions of U.S. dollars):

Boral Business net profit as reported	$	55
Earnings attributable to non-controlling interest, net of tax		(7	)
Boral Business intercompany financing expenses, net(1)		9
Adjusted net profit(2)	$	57
Boral Business earnings attributable to USG	$	28.5
Our share of earnings (loss) from our wholly owned subsidiaries and joint ventures contributed to the USG Boral Joint Venture	$	(3.5	)
Pro forma adjustment of earnings from equity method investment in USG Boral Joint Venture	$	25.0

(1) As provided for in the two share sale and subscription agreements (the “Subscription Agreements”) that we entered into with Boral Limited in connection with the USG Boral Joint Venture, intercompany loans will be settled or capitalized prior to the Investment Date. As such, financing expenses associated with the intercompany loans will not impact earnings of the USG Boral Joint Venture.

(2) Net profits of the Boral Asia Business and the Boral Australia Business have been translated at exchange rates of 0.3124 Malaysian Ringgit to U.S. Dollars and 1.0221 Australian Dollars to U.S. Dollars, respectively.

(c) The adjustment for our investment in the USG Boral Joint Venture includes the following amounts (in millions of U.S. dollars):

Portion of purchase price paid from the notes proceeds	$	350
Portion of purchase price paid from cash on hand		150
Earn-out to be paid upon achievement of goals(f)		25
Estimated transaction costs to be incurred upon consummation of the Investment		31
Subtotal		556
Estimated fair value of the Company’s net assets contributed as of the Investment Date(a)		98
Equity method investment—total pro forma adjustment	$	654

The measurement of our investment in the USG Boral Joint Venture is at cost, which includes the direct costs associated with the transaction currently estimated to be approximately $31 million.

The pro forma adjustment to cash and cash equivalents consists of the following amounts (in millions of U.S. dollars):

Portion of purchase price paid from cash on hand	$	150
Estimated transaction costs to be incurred upon consummation of the Investment		31
Certain taxes and bridge loan commitment fee(d)		10
Fees in connection with the notes issuance(e)		5
Less: Portion of transaction costs paid prior to September 30, 2013(1)		(3	)
Cash and cash equivalents—total pro forma adjustment	$	193

(1) As of September 30, 2013, approximately $3 million of the transaction costs had already been paid; therefore, a portion of the pro forma adjustment is a reduction in other current assets and a corresponding increase in our investment in the USG Boral Joint Venture.

(d) We will incur certain withholding taxes upon consummation of the Investment of approximately $13 million and a bridge loan commitment fee in advance of that date of approximately $3 million. Each of these would be considered one-time costs of the USG Boral Joint Venture transaction

5

that would not be included in the determination of our investment basis in the USG Boral Joint Venture. Due to their non-recurring nature, we have not included these costs in our unaudited pro forma condensed consolidated statement of operations. However, these costs are included as adjustments on our unaudited pro forma condensed consolidated balance sheet to reduce cash by $10 million, increase other liabilities by $6 million and reduce retained earnings by $16 million.

(e) The pro forma adjustments include an estimate of interest expense using an assumed coupon rate. In addition, we expect to incur approximately $5 million of fees in connection with the issuance of the notes. These fees will be deferred and amortized on a straight-line basis over the term of the notes and, as such, are included as an adjustment to other assets on our unaudited pro forma condensed consolidated balance sheet with the related financing fee amortization included in the pro forma interest expense adjustment on our unaudited pro forma condensed consolidated statement of operations.

(f) The purchase price stipulated in the Subscription Agreements includes $75 million of additional consideration to be paid that is contingent on the results of the USG Boral Joint Venture. This contingent consideration would be paid by us to Boral, if specified targets are achieved by the joint venture, at two future dates.

U.S. GAAP requires the recognition of a liability associated with contingent consideration for an equity method investment if certain criteria are met. For purposes of the unaudited pro forma condensed consolidated balance sheet we have assumed that a payment of $25 million would be eligible for recognition under that guidance while the remaining $50 million would not. There is no impact of the contingent consideration on the unaudited pro forma condensed consolidated statement of operations.

(g) Earnings from our equity method investee are presented after local corporate tax. We did not provide additional U.S. income taxes on the earnings because we would assert that the earnings are permanently reinvested outside of the United States.

(h) Diluted earnings per share for continuing operations was calculated using average diluted common shares outstanding for the four quarters ended September 30, 2013 of 110.3 million.

(i) The adjustment of $25 million to reduce stockholders’ equity reflects the removal of the non-controlling interest of our consolidated Oman joint ventures, which are being contributed as part of the USG Boral Joint Venture transaction.

(j) Amounts represent the historical balances as of September 30, 2013 and results for the twelve months then ended and establishing our equity interests in the entities being contributed by USG to the USG Boral Joint Venture.

6

EX-99.5

Exhibit 99.5

	For Immediate Release
	Contact Media Robert Williams (312) 436-4356 rewilliams@usg.com Investors Matthew Ackley (312) 436-6263 mackley@usg.com

USG CORPORATION ANNOUNCES LAUNCH OF SENIOR NOTES OFFERING

CHICAGO, October 28, 2013—USG Corporation (NYSE: USG), a leading building products company, today announced that it launched a private offering of $350 million aggregate principal amount of senior notes. The notes will be the unsecured obligations of USG. USG’s obligations under the notes will be guaranteed on a senior unsecured basis by certain of its domestic subsidiaries.

USG intends to use the net proceeds from the sale of the notes to fund a portion of USG’s initial $500 million cash investment (consisting of the net proceeds of sale of the notes and cash on hand) in its previously announced proposed joint venture with Boral Limited. If USG does not complete the joint venture, USG intends to use the net proceeds from the sale of the notes for general corporate purposes, which may include the repayment of indebtedness, the funding of pension obligations, working capital, capital expenditures and potential acquisitions.

The notes will be offered and sold only to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933 (the “Securities Act”), and to non-U.S. persons in accordance with Regulation S under the Securities Act. When issued, the notes will not have been registered under the Securities Act or state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy the notes or any other securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any person to whom, such an offer, solicitation or sale is unlawful. Any offers of the notes will be made only by means of a private offering circular.

About USG

USG Corporation is a manufacturer and distributor of innovative, high-performance building systems through its United States Gypsum Company, USG Interiors, LLC, L&W Supply Corporation and other subsidiaries. Headquartered in Chicago, USG Worldwide operations serve the commercial, residential, and repair and remodel construction

markets, enabling our customers to build the outstanding spaces where people live, work and play. USG wall, ceiling, exterior sheathing, flooring underlayment and roofing systems provide leading-edge building solutions, while L&W Supply branch locations efficiently stock and deliver building materials throughout the United States. USG and its subsidiaries are proud sponsors of the U.S Olympic and Paralympic teams and the Canadian Olympic team.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 related to management’s expectations about future conditions. Actual business, market or other conditions may differ materially from management’s expectations and, accordingly, may affect USG’s sales and profitability or other results and liquidity. Actual results may differ materially due to various other factors, including: economic conditions, such as the levels of new home and other construction activity, employment levels, the availability of mortgage, construction and other financing, mortgage and other interest rates, housing affordability and supply, the levels of foreclosures and home resales, currency exchange rates and consumer confidence; capital markets conditions and the availability of borrowings under our credit agreement or other financings; our substantial indebtedness and our ability to incur substantial additional indebtedness; competitive conditions, such as price, service and product competition; shortages in raw materials; changes in raw material and energy costs; volatility in the assumptions used to determine the funded status of our pension plans; the loss of one or more major customers and our customers’ ability to meet their financial obligations to us; capacity utilization rates for us and the industry; our ability to expand into new geographic markets and the stability of such markets; our ability to successfully enter into and operate the joint venture with Boral Limited, including risks that our joint venture partner, Boral Limited, may not fulfill its obligations as an investor or may take actions that are inconsistent with our objectives; our ability to protect our intellectual property and other proprietary rights; changes in laws or regulations, including environmental and safety regulations; the satisfactory performance of certain business functions by third party service providers; our ability to achieve anticipated savings from cost reduction programs; the outcome in contested litigation matters; the effects of acts of terrorism or war upon domestic and international economies and financial markets; and acts of God. USG assumes no obligation to update any forward-looking information contained in this press release. Additional information concerning these and other factors may be found in USG’s filings with the Securities and Exchange Commission, including the “Risk Factors” in USG’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

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