Wellington Drive Technologies 2016 Annual Report

Get Connected
Annual Report 2016

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ANNUAL REPORT 2016
Contents
Overview
1. Our Business
6. 2016 Business Highlights
7. Report of the Chairman and Chief Executive Officer
Our Company
16. Directors
17. Senior Management
Financial Statements
19. Statement of Comprehensive Income
20. Statement of Movements in Equity
21. Statement of Financial Position
22. Cash Flow Statement
24. Basis of Preparation
27. Results for the Year
32. Operating Assets and Liabilities
38. Capital and Financing Costs
41. Risk
44. Other Information
49. Independent Auditor's Report
Other Disclosures
54. Statutory Information
56. Shareholder Information
58. Corporate Governance
61. Directory
® is a registered Trade Mark of Wellington Drive Technologies Ltd
There are statements in this document that are “forward-looking statements”. As these forward-looking statements are predictive in nature, they
are subject to a number of risks and uncertainties relating to Wellington, its operations, the markets in which it competes and other factors (some of
which are beyond the control of Wellington). As a result of the foregoing, actual results and conditions may differ materially from those expressed or
implied by such statements. In particular, Wellington's operations and results are significantly influenced by the extent to which energy efficient motor
technology is promoted in Wellington's key markets, competitor product development and demand and pricing, fluctuations in key commodity prices
or costs in the countries of Wellington's suppliers, availability of key components, relative exchange rates and profitability of customers, all of which can
have a substantial impact on Wellington's results of operations and financial condition. Other risks include customer concentration risk and misuse of
Wellington's intellectual property.

Our Business
Our Mission
Wellington’s purpose is to deliver solutions to solve our customers’
refrigeration energy consumption and system control problems through
the development of Advanced Motors, Intelligent Control Solutions, and
‘Internet of Things’ Data services. Our Personal service, Reliable products,
Smart Solutions and Relentless pursuit of excellence will ensure we lead
the competition and build a world class company.
Our Strategic Pillars
Wellington’s strategy focuses on the commercial refrigeration market and two product lines supporting that market;
EC motors and Cloud Connected Refrigeration controllers. The launch of its ECR2 motor ensures that Wellington
continues to lead with its EC motor offering, and the introduction of its cloud connected SCS Connect platform
ensures that it is delivering advanced Internet of Things (IoT) equipment, software and services to its customers.
Wellington’s strategy is to deliver revenue growth and positive earnings by providing customers with innovative new
products supported by a low cost supply chain.
*SCS Connect models only
Develop & Grow
EC Motor
Business
Leverage Strategic
Partners to grow sales
and lower costs
Launch 'Cloud
Connected' Solutions
business
• 2013 - Continuous Cost Reduction - new supply chain
• 2015 - Diversified revenue streams
• 2016 - Continuous Product Innovation - ECR2
• 2017 and beyond - ECR2 Platform expansion
• 2014 - Open Vietnam supply chain with East West
• 2016 - Co-develop motors in new markets
• 2017 - Technology & channel partners
• 2018 - expand regional sales capability
• 2013 - SCS Connect development
• 2015 - Focus on brands & bottlers
• 2016 - Internet of Things 'solutions'
• 2017 - SCS Click retrofit device
• 2018 - Digital services expansion
The three pillars of the Company’s strategy are:
P Develop and grow the EC Motor business by focusing on customer driven product development, ‘bottle
cooler’ market growth plans, extending the sale of the ECR2 motor to supermarket and food service equipment
manufacturers, diversifying motor revenue streams from new geographical markets, improving and simplifying
business processes, and through continual cost reduction in the supply chain.
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ANNUAL REPORT 2016

P Leverage strategic partners to grow sales and lower costs by focusing on accessing IoT and digital
technologies through strategic partnerships. Continue to improve margins through lower cost product design and
supply chain solutions and expand geographical reach with complimentary sales partnerships.
P Develop and grow a ‘Cloud Connected’ IoT solutions business by developing and delivering low cost
wireless refrigeration control hardware for retail brands, supermarkets and manufacturers. Taking the new SCS
Connect software platform to market and building on that platform with an expanded range of digital services,
delivering sales success by reducing total cost of ownership of the refrigeration system and improving the
operational and sales performance of the refrigerator.
Our Products
Wellington serves customers with its motor, airflow and ‘connected’ controller
solutions for use in beverage coolers, ice cream and food freezers and
supermarket display cases. The product portfolio offers a range of refrigeration
solutions designed to improve refrigeration efficiency, optimise airflow and reduce
the total cost of ownership by enabling customers to improve the management of
their refrigeration fleet.
Alongside its advanced Energy Efficient Motor products, Wellington also sells
a shaded pole motor range, branded AMV. Both motor product lines take
advantage of specially designed fan blades with motor and fan combinations
working together to improve energy consumption and optimise airflow.
In 2016 the sale of the Company’s new ECR2 Motor and SCS Connect Smart
Controller commenced and product adoption by customers accelerated rapidly.
‘Quiet and efficient’ - The ECR2 motor offers a step improvement in EC Motor
performance with lower noise, the ability to operate on any global mains voltage
and increased efficiency for supermarket and bottle cooler customers. ECR2’s
smart control features allow power consumption to be further reduced by tuning
airflow to the exact needs of the refrigeration system.
‘Get Connected’ - SCS Connect platform improves customers’ total
refrigeration system cost by simplifying maintenance and
predicting system faults, improving energy consumption and
providing connectivity capability. With Bluetooth Smart®
capability, SCS Connect controllers can connect
to Wellington’s SCS Connect System suite of
refrigeration fleet management software that
enables customers to more effectively monitor
and manage their coolers in the field. The
SCS Connect also features iBeacon®
capability for in-store marketing. Unlike
off-the-shelf iBeacons, SCS Connect
controllers have no batteries to run
down, will not go missing, and can
interact with the consumer via the
cooler itself.
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ANNUAL REPORT 2016

Product Roadmap - The market response to both SCS Connect and ECR2 has been positive,
with meaningful sales in 2016, the first year in the life of both products. The feedback from
customers on both products informs us of the improvements and enhancements necessary to
improve reliability and provide additional functionality to solve customer problems.
Some examples of upgrades made to ECR2 within 2016 are improving the power cable
manufacturing process to ensure the product is even more robust and upgrading the plastics
to meet NSF food quality standards. Some examples of upgrades made to the SCS Connect
are additional firmware features to ensure the devices match specific customer cooler design
conditions and enhancing the cloud data-reporting offering. We rely on customer and field
feedback to ensure our products always meet market needs.
We continue to work on three core business development and product development areas:
1) An expanded portfolio of IoT devices, such as the SCS Connect, with software, data services
and digital marketing solutions that help customers connect with consumers and better
manage their cooler fleet and research into new wireless communications technologies and
techniques for measuring and monitoring merchandise sales performance.
2) Higher performance and higher-powered EC motors and airflow accessories to further improve
refrigeration performance and gain broader access to higher value commercial refrigeration
markets.
3) Joint product development initiatives with our American and Chinese strategic suppliers to
bring a new range of low cost and highly efficient motors to market. This is in line with our
market diversification strategy.
In all areas, but more specifically in IoT software and digital services, we will search for industry
partners to gain access to technologies and create the offerings that markets and customers
require.
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ANNUAL REPORT 2016

Our People
Wellington’s improvement progress is built around the strength of its team and the depth of its customer relationships.
Our people work hard to develop compelling products, solve customers’ problems and reduce supply chain costs. The
team is dedicated to ensuring the business continually improves its performance and ultimately delivers a positive return
for shareholders. We feature below three key staff members who work every day to deliver value to our customers.
Sue Sieben – North America Customer Technical
Leader
“As the customer facing technical representative for Wellington in
North America, based in Chicago USA, I make sure our solutions
meet the customer’s needs from initial evaluation to end supply
for their cooling applications. Our customers demand high
quality products and often require me to come on site and train
them in the use of our motors and controllers. I also interface with
purchasing and material planning to ensure we deliver products on
time. We are told by our customers that our service sets us apart
– so we take pride in rapidly responding to customer’s requests
for support. One of the important aspects of our field technical
teams is to feedback improvement opportunities to the Auckland
based design team so we can ensure we are always updating our
products based on direct customer feedback.”
Michael Qiu – Software Architect, New Zealand
“I am part of the SCS Connect platform team working in the
Internet of Things area based in Auckland, New Zealand.
Wellington’s SCS Connect refrigeration controller collects a large
amount of telemetry from bottle coolers around the world. From
there, the data is retrieved wirelessly by mobile apps that our
team wrote, sent to highly available cloud infrastructure that our
team setup and processed by an ever expanding set of software
tools that our team has developed. From this process, we derive
valuable information for our customers, like purchasing patterns
and potential refrigeration hardware failures. This is all presented
in a highly interactive reporting application. It has been an exciting
time for me being part of the team that’s showing the industry
what's possible and seeing Wellington Drive progress beyond just
a hardware company.”
Lana Illingworth – Supply Chain Planner, New Zealand
“My office is in Auckland New Zealand and I am part of the team
that ensures we understand customer product demand and
manage our suppliers to ensure we deliver ‘on time every time’
performance. Our team must ensure that suppliers understand
what components they need to buy and also how purchase orders
are fulfilled. Sometimes we get very short notice orders from
customers, so that is where our supply chain team really shines,
chasing down urgent delivery needs and reacting well to service
our customers. Our rapid growth in 2016 meant we had a few
situations where we had to work with the supplier base to find
supply solutions that were not expected. This was a great problem
to solve and I am proud to be part of a team that can manage
through those growth challenges.”
Product flows
Americas Business Office
and Depots:
Queretaro, Mexico
Strategic Partner
East West
Manufacturing
Atlanta, USA
Customers:
Leading Food and Beverage Brands
Supermarket Retailers
Refrigeration Original Equipment Manufacturers
Regional Refrigeration Parts Distributors
EMEA Business Office:
Istanbul, Turkey
Strategic Suppliers:
Changzhou, China
Asia Pacific Business Office
Shanghai, China
Head Office,
Customer
Innovation
Centre and
Supply Chain
Management
Auckland,
New Zealand
Strategic Suppliers:
HCMC Vietnam and Penang,
Malaysia
Distributors and
sales agents
Wellington Drive Technologies
Global Customer Solutions Network
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ANNUAL REPORT 2016

Our Supply Chain Network
Since 2004 Wellington has delivered over 7 million
motors to customers across 26 countries and has now
commenced shipment of its new Cloud Connected
Controller product platform.
Wellington’s global network supports its customers in
the development of their product needs, supply chain
delivery requirements and new technology roadmaps.
Customer-focused teams are located in New Zealand,
Mexico, Brazil, China, Singapore, Turkey, Italy, Canada
and the USA, working around the clock to ensure that
Wellington ‘delivers’ for customers.
With its supply chain partner factories in Vietnam,
China, and Malaysia specialising in motor mechanical
assembly, plastics design and injection moulding and
electronics manufacture, and regional distribution partners in the UK and USA, Wellington has the global reach to
ensure that customers receive personal attention with a high quality product range that is manufactured and delivered
on time.
Product flows
Americas Business Office
and Depots:
Queretaro, Mexico
Strategic Partner
East West
Manufacturing
Atlanta, USA
Customers:
Leading Food and Beverage Brands
Supermarket Retailers
Refrigeration Original Equipment Manufacturers
Regional Refrigeration Parts Distributors
EMEA Business Office:
Istanbul, Turkey
Strategic Suppliers:
Changzhou, China
Asia Pacific Business Office
Shanghai, China
Head Office,
Customer
Innovation
Centre and
Supply Chain
Management
Auckland,
New Zealand
Strategic Suppliers:
HCMC Vietnam and Penang,
Malaysia
Distributors and
sales agents
Wellington Drive Technologies
Global Customer Solutions Network
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ANNUAL REPORT 2016

2016 Business Highlights
Revenue growth of 44%, increasing to $NZ35m,
with solid growth in all regions
Gross margin increased to 24% from 21.4% due
to product volume benefits and continued supply
chain productivity
SCS Connect and ECR2 contributed $6m in new
product sales
Positive EBITDA of $325,000
(adjusted for preference share revaluation)
SCS Connect and
ECR2 contributed
$6m in sales
Gross margin
increased to 24%
Revenue
increased 44%
$325,000
positive EBITDA
(adjusted)
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ANNUAL REPORT 2016

2016 in Review
2016 was the year Wellington achieved its maiden EBITDA profit, a sure sign that the vigorous turnaround activity of
the past five years has completed and that we are now well into the next phase of the Company’s development and
growth journey.
The strategy we have embarked upon is delivering clear results as we develop a range of ‘Internet of Things’ products
and services for large food and retail brands, underpinned by our expertise in refrigeration motors, delivered through
a team of customer facing and development engineering experts, and
supported by a well executed low cost supply chain.
The Company sold a record 1.4 million motors in 2016, a year on year volume
increase of 33% which included 1.2 million EC motors. This growth was
achieved by ensuring that relationships with existing bottle cooler customers
were expanded and new customers were added in the supermarket and food
service sectors. Revenue grew in all of our sales regions, with Latin America
and the USA a particular highlight due to the enthusiastic adoption of our new
ECR2 and SCS Connect products. New motor customers were also added in
Europe and Asia.
As our field teams began to sell the ECR2 motor and SCS Connect products,
our development teams started to focus on the next iterations of the ECR2 and
SCS platforms, using field feedback from customers to help determine how to
best enhance those platforms.
The level of change and transformation in our supply chain settled down last year, allowing us to intensify our focus
on product delivery and execution. The supply chain structural improvements worked on in previous years helped
us achieve a Gross Margin of 24%, up from 21.4% in 2015. Cost
reduction is a core skill of the business and the team continue
to work on cost reduction programmes with all major
suppliers.
We continue to experience competitive price pressure
in some markets, mainly Europe and Latin America, so
Gross Margin gains were offset somewhat by selected
customer price reductions needed to grow share within
the bottle cooler market in those regions.
Growth performance in 2016 exceeded our expectations
with revenue growing to $35 million, a 44% increase over
2015 and doubling the 2014 revenue. The new SCS Connect and
ECR2 products contributed $6 million to reported revenue.
Wellington achieved its maiden full year EBITDA profit, with an EBITDA
profit adjusted (see note 1. on page 15) of $325,000, which was a $2.3 million
improvement on 2015. EBIT improved by $0.5 million to a $1.3 million loss. The
net loss for the year was $2.5 million impacted by the commencement of amortisation
of capitalised development costs for the ECR2 and SCS Connect products (an increase
in amortisation of $1.1 million), the revaluation of preference shares caused by exchange rate
movements ($121,000 loss) and interest costs on the preference shares of $1.0 million.
The board was especially pleased with the first year of sales for our two new products, the SCS Connect and ECR2.
Report of the Chairman and
Chief Executive Officer
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ANNUAL REPORT 2016

Adjusted EBITDA Profit - NZD

Revenue Performance
In US Dollar terms, revenue in 2016 was $US25 million compared to $US17.4 million in 2015. Of the record 1.4 million
motors shipped in 2016, well over 100,000 were the new ECR2.
Revenue - Refrigeration USD
The revenue trend since we discontinued the ventilation business in 2013 and experienced the end-market related
weakness in 2014 has been one of steady growth. The team has added customers and added products, both of
which have contributed to this growth.
Fifteen new customers were added globally in 2016 with two of these customers being attracted by our SCS Connect
products. Importantly most of these new customers are focused in the supermarket display case and food service
market, as we expand beyond our traditional beverage market core.
Latin America: Our Latin American business grew by 44% versus 2015, from US$11.5 million to US$16.6 million.
We added two new motor customers in the region as well as experiencing stronger demand from existing bottle
cooler customers, with motor volumes growing by 30%. Mexico continues to be our largest market and further growth
is expected from this market in 2017 as several major customers begin to adopt the SCS Connect product. Brazil
demand was weak in 2016 as a result of difficult economic conditions in that country, however we are seeing demand
increase for SCS Connect training and trials, which could translate to an increase in 2017 sales. The rollout of SCS
Connect to a large food and beverage brand in Mexico commenced in 2016 and we started working with other new
SCS customers in Central America.
USA/Canada: The USA and Canada regions saw 130% growth versus 2015, with US$2.2 million of revenue
compared to $1.0 million in 2015. Two new customers for the ECR2 motor product contributed the majority of this
growth. In addition several smaller but strategically important customers starting buying ECR2 motors through
our USA distribution partner, East West. We are continuing with several SCS field trials in the USA, although it is
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ANNUAL REPORT 2016

becoming evident that the adoption rate for SCS may take longer in this region. We were encouraged to be invited to
participate in a research project by a customer interested in new SCS digital services.
APAC: Asia Pacific revenues of $2.3 million held relatively steady versus 2015, with a 9% increase on the US$2.1m
recorded in 2015. Eight new customers were won in this region; two of those for SCS and the balance for EC motors,
including several smaller Chinese display case manufacturers. Our business development effort in this region was
focused on developing and training new customers for the SCS Connect product in preparation for 2017 growth.
EMEA: EMEA revenues grew by 17% to US$3.2 million, versus US$2.8 million in 2015. This growth resulted from
three new customer wins in Europe and increased volumes from a new Italian customer won at the end of 2015. Of
particular note was the expansion of our business with UK distribution partner Axair, who had success in developing
new display case relationships, which drove demand for our motors. Turkish demand was weak in the latter half of
the year as a result of continuing political and economic issues in that country and we expect these difficult trading
conditions to continue in 2017.
2016 Regional Sales2015 Regional Sales
Gross Profit Performance
With a stable supply chain and steadily improving supply chain management processes the business was able to
deliver further improvements in product manufacturing costs. While the opportunity to remove further significant
cost from the EC motors products is becoming harder to realise, the company is benefiting from component cost
reductions as a result of volume growth. Gross Margin for the year was 24.0%, increasing from 21.4% in 2015. This
was a result of continuing cost reduction programmes with all major suppliers and component pricing benefits
being realised from the increased volumes. The Gross Margin improvement was also assisted by revenue from new
products.
Gross Profit %
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ANNUAL REPORT 2016

Productivity
Operating costs increased by 15%, from $7.4 million to $8.5 million. As noted in previous disclosures, 2016 was
the year that Wellington started to hire new skills to support SCS Connect software development and customer field
support. 10 new people were added to the business between fourth quarter 2015 and the end of 2016. The increase
in operating expenses included usual market-related salary adjustments, predominantly for non-management staff to
ensure retention of key skills, as well as a notable rise in travel spend to support market development and expansion,
particularly in relation to SCS Connect.
Operating cost as a percentage of revenue improved to 24% from 30% in 2015 reflecting an overall increase in
productivity, as measured by revenue per employee, which increased from $450,000 to $588,000.
Operating Costs (excluding depreciation, amortisation &
impairment) - NZD 000's
Cash and working capital performance
The Company was pleased to be able to gain debt support from its major shareholder SuperLife in September 2016,
with a $2 million one year debt facility secured.
Inventory performance was an operational highlight of the business with inventory turns improving to 7.8 times from
7.0 times in 2015. A new inventory management programme was introduced with one of the Company’s main
suppliers, which contributed to this improved performance.
Operating cash flow was -$0.048 million compared to the positive $0.834 million in 2015, a result of timing issues
and pressure on working capital from the strong 44% sales growth. Wellington invested $1.9 million in capitalised
new product development, most of which related to the completion of our new SCS Connect product and the related
development of new SCS software and data solutions.
Wellington invested $0.3 million in plant & equipment, mainly focused on increasing manufacturing and test
equipment capacity (to support our volume growth and new products), as well as improving critical development
equipment in our New Zealand Innovation Centre.
The cash balance at the end of 2016 was $2.1 million with $1.5 million drawn down under the SuperLife debt facility
for a net cash position of $0.6 million.
Continuous process improvement
The board and management team continued its focus on
health and safety practices and process in 2016. The health
and safety committee reports to the board on a monthly
basis, managing health and safety processes and system
improvements. This committee met regularly throughout the
year, and continued to identify areas of improvement. The top
improvement areas for 2016 were:
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ANNUAL REPORT 2016

1. Improvements to hazardous goods handling and storage procedures in the New Zealand office.
2. The removal of high bay storage racking in the New Zealand workshop to remove potential earthquake hazard.
Materials now stored in outside containers.
3. The creation of fenced off areas in the New Zealand Innovation Centre to separate long term product testing
facilities from other workflow.
4. The review and improvement of fire safety equipment and evacuation procedures in the Company’s Mexico offices.
5. The expansion of employee travel support insurance to widen the coverage for emergency events.
The team treats its health and safety practices as an important part of its operating system and improvement
planning. It thinks of Health and Safety holistically as something that governs how it manages its premises, treats it’s
employees and all visitors to its premises, deals with all stakeholders who use its products, and manages suppliers
and partners to ensure they all establish global best practice quality and safety standards.
Risk Management approach
The board and management team take a proactive approach to identifying and managing business risk. We look at
several external factors impacting or potentially impacting the business, such as competitive and geo-political risk,
as well as internal structural risk such as Information technology systems, data back-up protection and key employee
skill retention. This risk assessment forms part of our annual strategic planning process.
A specific example in September 2016 was the board approving a new data security policy for the business, intended
to strengthen our approach to managing both Wellington data and customer data, in line with the new entry into the
IoT business segment.
The board and management team considers a numbers of risks as part of its governance process – examples of
these risks are
• Regulatory or legislative changes in export markets – potential changes in tariffs, taxes (such as sugar taxes),
market access changes, and the encouragement of energy efficient products. We build any intelligence gained
into our strategic plans and long range sales forecasts.
• Channel or customer risks – customers do not normally give purchase commitments beyond a 30 day window.
This means that projected sales can change materially as customers alter their forecast needs outside 30 days.
The Company has a robust demand/supply process and adjusts internal forecasts and product supply accordingly
to meet those changes.
• Pricing - Many customers request annual pricing and terms reviews, which is a competitive process that can result
in price fluctuation and volumes changes. In 2016 two major customers accounted for $20 million or 57% of the
total revenue for the year and both these customers require annual price and terms negotiations. The Company
provided some price concessions in 2016 and utilised its strong supply chain to ensure it remained competitive.
• Competition risks – there are a number of large and capable global competitors operating in the EC Motor and
IoT product markets. Our recent winning of large global EC Motor and SCS Connect contracts shows how our
products are managing to counter this risk. However, competitors could develop superior products or they could
price at a level we are unable or unwilling to match.
• Product risks – the nature of complex design and manufacturing processes means that it is difficult to achieve
100% defect free product performance. We have product quality management and reliability testing processes
to assure the quality of products is at the highest standard however customer warranty claims will arise from time
of time. The Company did not have any material product warranty claims in 2016, however the costs of meeting
any future warranty claim could be material depending on the nature of the claim, the volume of product affected
and its location. It is worthy of note that in 2016 customers started demanding extended warranty periods as a
condition of supply.
• Intellectual property risks – some of the Company’s products and technologies are covered by patents, patent
applications, confidentiality agreements and trade secrets. Competitors, customers, suppliers and other parties
such as ‘IP trolls’ could circumvent our intellectual property protection (legally or illegally) requiring us to take steps
to protect our interests. In 2016 there were no known breaches of Wellington's IP or technology know-how.
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ANNUAL REPORT 2016

• People risks – the loss of key management skills, customer facing technical and sales skills and product
development staff could have a negative impact on the Group’s operations. The board employs a range of
compensation and HR management practices to ensure the team is appropriately rewarded and that key skill
retention is a priority. In 2016 staff turnover was extremely low as the business continued to hire new skills in the IoT
and customer management areas.
2016 priorities – performance report
The Company’s sales strategy is to develop deep relationships with food and beverage retail brands, bottlers and
original refrigeration equipment manufactures to ensure we get accepted on approved vendor lists and to develop
technologies to solve their business problems. The sales and marketing focus for 2016 was consistent with the
previous year as we believed the growth seen in 2015 would continue with the same focus areas. In particular the
sales plan was to:
• sell existing products to bottle cooler customers in current and new geographies;
• sell existing products to display case customers in the supermarket segment;
• sell existing products to new non-bottle cooler and non-supermarket segments;
• sell new ECR2 and SCS products to bottle cooler and supermarket segments; and
• develop retail brand and bottle cooler customers for the SCS Connect solution.
The 44% growth in 2016 demonstrates the success of this sales approach and can be broken down as follows:
2016 New Product Share
Of the 44% growth, 12 percentage points was from the ECR2 motor, 19 percentage points was the legacy ECR01,
ECR82 and ECR92 motors and 13 percentage points was delivered by SCS Connect. The legacy EC motors products
are still selling strongly into the bottle cooler market because they are a good trade-off between cost and efficiency.
Wellington’s USA distributor East West commenced sales of the ECR2 motor to three new USA customers towards
the end of 2016 and these customers are expected to continue purchasing ECR2 through 2017. Our UK distributor
Axair continued to develop supermarket display case channels for our products in the UK.
Wellington continued its success in China with the ECR01 motor, selling to smaller supermarket display case
manufacturers. We saw demand increase for the Shaded Pole (Non-EC motor) as customers in China continue
to prioritise low component cost over energy efficiency gains and consequent total ‘life time’ cost. Our largest
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ANNUAL REPORT 2016

geographical market for the Shaded Pole motor is Thailand. Significant efforts were made in several South East Asian
countries to expand customer trialling of SCS Connect.
With SCS Connect, in February 2016 the Company announced that it had received its first sizable purchase order
from one beverage customer for both the connected controller hardware and data reporting services. This was the
start of volume shipments to a large global beverage customer in Mexico, under a multi-year supply agreement,
and we also continued to expand that relationship to several other countries in the Latin America region. Those new
countries did not contribute sales within 2016 but we expect they will support further growth of the business in 2017.
Many of our other regions started to move from field trail stage to early customer adoption with several other new
customers. The main exception to that was in the USA and Canadian markets where customers decided to take more
time to understand how they would operate and maximise value from the new way of managing coolers fleets. Some
customers also explored different approaches to connectivity, in some cases using stand-alone connectivity solutions
like a bluetooth button, that would not include refrigeration control functionality. This development is something we are
monitoring closely as other IoT communications technologies, such as bluetooth buttons, become available.
2016 – Five Main Priorities
For 2016, the focus of our priorities was heavily weighted to new revenue generation, continuing to develop a more
diversified customer base and becoming less reliant on one or two large customers. We made significant progress in
all five main priority areas, highlighted below;
1. Further improve customer diversification by
expanding the geographical customer base;
Revenue from the USA / Canada grew 130%,
mainly from sales of the new ECR2 motor and
from East West winning new customers in the
USA. Focusing on the USA and Canada as a
growth market was the primary geographical
expansion action in 2017 and this will continue
to be an area of focus.
2. Develop new customer relationships and grow
revenues in the supermarket segment;
Shipments of ECR2 commenced to a large new supermarket display case manufacturer and increasingly that
motor has been specified into that customer’s equipment. A specific enhancement was made to the ECR2 motor
to qualify the plastic housing under the National Sanitation Foundation (NSF) food safety and quality accreditation.
This allows the ECR2 to be sold into a wider range of food refrigerators. Two additional supermarket equipment
manufacturers were won, in the UK and South Africa. Revenues in the supermarket display case and food service
segment grew around 40% year over year.
3. Sell the new ECR2 motor targeting supermarket customers and bottle cooler customers;
Late in 2016 work was completed on a new ECR2 Fanpack solution to provide customers with a drop-in solution
for a complete air-flow assembly. We started seeing initial indications of demand for this new product and expect
sales to commence in the second half of 2017 after customer testing is complete. This is an ECR2 product
enhancement specifically designed to increase penetration of the supermarket refrigeration customer base. Our
largest bottle cooler customer for ECR2 started purchasing in first quarter 2016, and has steadily moved their
cooler products from shaded pole to ECR2 through 2016.
4. Sell the SCS Connect refrigeration fleet management solution to large global beverage brands and expand the
marketing process outside the beverage market;
In August 2016 we announced that the Company had signed a large global consumer brand’s Master Terms
and Conditions for the supply of Wellington’s ‘Cloud Connected’ SCS Connect solution. This agreement allowed
Wellington to be considered as an approved supplier to this customer and formed the basis for future supply
agreements within their network. In December 2016 we announced the Company had been selected as an
approved supplier of connectivity hardware for use in the brand’s coolers. This approval allowed Wellington to
supply its SCS Connect solution to the brand’s network of cooler manufacturers and beverage bottling partners.
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ANNUAL REPORT 2016

While this announcement did not indicate preferred status or determine a minimum level of business it did show
that our SCS Connect solution had essentially passed the trial phase with a large end customer and was moving
towards production.
5. Further optimise the electronics supply chain to further lower costs and reduce electronic component lead-times;
The majority of the focus in 2016 was setting up a dual supply strategy for the SCS Connect, so we could be
ready with two suppliers to support the expected volume increases in 2017. This dual supply set-up involved
ordering and stocking long lead time parts, acquiring additional tooling and test equipment and training the
second suppliers in assembly and test. The second supplier will be ready to produce SCS in March 2017. We
did start to see some market allocation stress on certain electronic commodities in late 2016, with lead times
extending in some silicon parts, capacitors and plastic resin. These allocation issues are being managing through
stocking models, advance orders of long lead time parts and in some cases payment of priority fees at component
suppliers.
2017 – Five Main Priorities
For 2017, the focus of our priorities will be on sales and support of our new products, further improving our operating
systems to deal with high growth rates, as well as commencing the next stage of our product innovation programme
so that we can maintain revenue growth beyond 2017. Our focus is firmly on achieving net profitability.
1. Successfully deliver the SCS Connect production programme for new customers
2. Start developing market opportunities for SCS Connect beyond carbonated soft drink
3. Seek technology & channel partnerships to broaden SCS Connect digital services offering
4. Commence development projects for the next phase of EC Motor product roadmap
5. Commence upgrade of our company-wide management information system to support year on year growth.
2017 Outlook
The Company is experiencing a strong start to the 2017 financial year. The ECR2 motor and SCS Connect continues
to ship to an expanding customer base and demand for our legacy products, in particular the ECR92 motor, is also
strong. We expect revenue in the first quarter to be around $NZ14m with an EBITDA profit recorded.
Our strategy to expand the motor product range, further develop the SCS Connect solution and develop new
customers for those products in new markets, will continue at pace. To support that plan we will continue to add
new skills in the software development, sales leadership and customer support areas. We will also be seeking
partnerships to help us further develop the SCS digital and cloud services component of our SCS Connect offering.
Gross margins for the year are expected to be higher than 2016 as we continue to see the benefits of increased
volumes on component pricing. Some key commodities utilised in our motors, such as copper and silicon steel are
seeing market driven price increases, but we will work to mitigate any adverse changes in those commodities by
improving efficiencies and volume discounts.
Our early estimates for the 2017 year indicate that the Company should achieve revenue growth in the 30% to 40%
range and we continue to expect an EBITDA profit in the low millions of dollars.
Planning for 2017 assumes an average NZD / USD rate of 0.70 for the year.
As highlighted in our financial release on the 2nd March, at current projected cost structure an EBITDA of around
$2 million would deliver an approximate breakeven net profit. We remain cautious about these estimates given the
ongoing economic uncertainty in parts of our EMEA region and developing uncertainties around trade agreements
between the USA and several countries where we have customers and suppliers.
14
ANNUAL REPORT 2016

The SuperLife loan facility expires in September 2017: current forecasts show that cash generated from operations
should be sufficient to repay SuperLife on the expiry date. To provide additional surety, and to ensure the Company
continues to have sufficient working capital to support its significant growth, which could put further pressure on
working capital, Wellington is seeking a bank line of credit and is in discussions with New Zealand trading banks. The
Company is also considering other options to support its growth capital needs.
The board and management team are proud to have delivered the Company’s first ever EBITDA profit. The
turnaround is clearly over but the job is not done. The next phase of the Company’s journey is to become a leader in
providing IoT solutions for commercial refrigeration customers, to further expand its ECR motor range and to focus
on solving customers airflow needs and in turn to deliver the revenue growth and net profit momentum that has now
begun.
We look forward to significantly higher EBITDA profits in 2017 and your continued support.

..................................... .....................................
Tony Nowell,
CNZM Greg Allen
Chairman Chief Executive Officer
Note 1: EBITDA (i.e. Earnings before Interest, Taxation, Depreciation, Amortisation and Impairment) is a non-GAAP earnings figure that equity analysts
tend to focus on for comparable company performance analysis. The Company considers that it is a useful financial indicator because it avoids
the distortions caused by the differences in amortisation and impairment policies. Adjusted EBITDA has been calclulated by removing from EBITDA
the currency revaluation impact of the preference shares (2016 - loss $121,000, 2015 - gain $565,000) which is not relevant when assessing trading
performance.
15
ANNUAL REPORT 2016

16
ANNUAL REPORT 2016
Tony Nowell, CNZM
Chairman
Mr Nowell was appointed
a director of Wellington in
March 2010 and Chairman
in December 2010. He is an
experienced company leader
in major New Zealand and
international businesses and
also Chairs Scion (the New
Zealand Forest Research Institute) and the Omega
Lamb Primary Growth Partnership between the
New Zealand Government and Primary Industry
participants. He is a board member of New Zealand
Food Innovation (Auckland) and Food Standards
Australia New Zealand. He represented New Zealand
on the APEC Business Advisory Council from 2006 to
2016 and also in 2016 completed a six year term as
a member of the Export Advisory Board of Business
New Zealand. Mr Nowell was formerly Chief Executive
of Zespri International, and Griffin’s Foods Limited, and
the Deputy Chair of Leadership New Zealand. Prior to
returning to New Zealand business in 2000 from an
extended period of international business experience,
Mr Nowell was Regional Vice President of Sara Lee
Asia, President Director of Sara Lee Indonesia and
President Director of L'Oreal Indonesia.
Dr Lisbeth Jacobs
Dr Jacobs, a native of Belgium,
holds a PhD in Materials
Engineering from the University
of Auckland and a Master of
Science in Materials Engineering
from the Katholieke Universiteit
Leuven, Belgium, where she
also completed a post graduate
degree in Business Studies. Dr
Jacobs has also completed the Executive General
Management programme at CEDEP- INSEAD, France.
Dr Jacobs is currently General Manager International
at UniServices, a wholly owned subsidiary of The
University of Auckland. In this role Dr Jacobs is
responsible for all commercial activities that the
University of Auckland undertakes outside of New
Zealand and Australia. She is a member of the board
of Energia Potior, a Joint Venture between UniServices
and Yunca which delivers technology solutions to the
global aluminium industry. Dr Jacobs is Chairwoman
and Legal Representative of “The University of
Auckland Innovation Institute China” in Hangzhou
China, a Wholly Foreign-Owned Entity operating as the
newly established commercialisation and innovation
branch of UniServices. Before taking up her current
role Dr Jacobs was Director Strategy & Development
at The Icehouse, following a 13 year career with global
corporate Bekaert, a world market and technology
leader in steel wire and steel cord products and
applications. Dr Jacobs held a range of positions at
Bekaert including in Business Development, Strategy,
Mergers & Acquisitions and R&D Management both in
Belgium and China. Dr Jacobs is Honorary Consul of
Belgium since August 2013.
Mr Gottfried Pausch
Pausch currently serves as
an independent director of
McKay Ltd in Whangarei,
Blackhawk Tracking Systems
Ltd in Auckland and as
Executive Chairman of Aucom
Electronics Ltd in Christchurch
and is a Director on one of the
National Science Challenges
an Initiative of the Ministry of Business, Innovation &
Employment (MBIE). The Science for Technological
Innovation National Science Challenge aims to tackle
New Zealand’s big high-tech challenges to grow
the economy. The research areas of focus cover
materials, manufacturing and design; sensors, robotics
and automation; and IT data analytics and modelling.
Mr Pausch was the former CEO at Actronic
Technologies and an Executive in Residence at
The Icehouse, following a 22 year career with
German engineering and electronics conglomerate
Siemens, one of the world’s leading suppliers of a
wide range of products, solutions and services in
the field of technology, which included the roles of
CEO Siemens Energy Services Ltd and Managing
Director of Siemens New Zealand. Mr. Pausch holds
an electrical engineering degree from Austria and a
master’s degree in Business Administration from Duke
University in the U.S.A.
Mr John McMahon
Mr McMahon has over twenty
years’ experience in the
Australasian equity markets,
predominantly as an equity
analyst covering a range
of industries including tele-
communications, media, gaming
transport and industrials. He
was a former Head of Research
and Head of Equities for ABN AMRO NZ and was
Managing Director of ASB Securities for three years.
John now manages his own investment portfolio
through Sydney-based Auro Investment Management
and is Chairman of NZAX-listed Solution Dynamics Ltd
(SDL). He has a Bachelor of Commerce (Honours),
an MBA and is a CFA (Chartered Financial Analyst)
charterholder.
Directors

17
ANNUAL REPORT 2016
Greg Allen – Chief Executive Officer
Mr Allen was appointed CEO of Wellington Drive in November 2011. Prior to joining
Wellington Mr Allen spent 23 years working internationally leading business development,
supply chain and manufacturing organisations in Europe, North America and Asia. He is
an experienced operational and business leader, having most recently been responsible
for the Industrial and Green Technology business unit for Celestica, a highly regarded
multinational supply chain services provider. Prior to Celestica Mr Allen led a Canadian
public company focused on VOIP products and also held senior roles with global contract
manufacturing and engineering services companies. Originally from New Zealand, and
with a technical background gained from six years in the New Zealand armed forces, Mr
Allen brings to Wellington a broad market experience covering many industrial segments
such as telecommunications, aerospace, capital equipment, consumer products and
enterprise computing.
Senior Management
David Howell – Chief Technical Officer
Mr Howell joined Wellington as Engineering Manager in 1999 and is currently responsible
for all aspects of Wellington’s future technology roadmap and the company’s product
development processes in his role as Chief Technology Officer. He has previously worked
in new product development roles for Rover Group (UK), Fisher and Paykel Healthcare
Corporation Ltd, and Tru-Test Ltd. David is a chartered (CPEng & IntPE) mechanical
engineer, holds a BE (Hons) and DipBus from The University of Auckland and an MSc
from Cranfield (UK), and is currently working towards a PhD in product development
management. Mr Howell is listed as inventor on 12 families of international patent
applications, including several of Wellington’s core patents.
Steve Hodgson – Senior Vice President Commercial
Mr Hodgson joined Wellington in August 2008 with initial responsibility for investor
relations, capital market activities, and all aspects of corporate strategy. On 2 April 2009,
Mr Hodgson was appointed Vice President Corporate Services (this title was changed
to Chief Financial Officer in 2010), with responsibility for supporting the Chief Executive
Officer and the Board in developing and executing strategic plans, leading the corporate
services team (finance, IT, legal, and human resource functions), and managing investor
relations and funding programmes. In July 2013 Mr Hodgson was appointed Senior Vice
President Commercial, to lead the Company’s sales and business activities. Prior to joining
Wellington, Mr Hodgson worked in equities research for 20 years and most recently was
the Head of Research for Macquarie Securities in New Zealand from 2003 to 2008. He
holds a BMS (Hons) from Waikato University with majors in accounting and economics.
Howard Milliner – Chief Financial Officer
Howard Milliner joined Wellington in November 2012. He holds a BCom from Auckland
University and is a Chartered Accountant. He was previously CFO of a N.Z. listed
engineering business for 14 years and was the CEO and CFO of that company for 7 of
those years.

18
ANNUAL REPORT 2016
Erick Layseca – Business Development Director, Americas
Mr Layseca graduated as an Industrial and Systems Engineer. He was a shareholder
in a Dairy Consulting Company, in which he actively participated and gained extensive
experience in business development. He then moved on to the world's fifth largest bottle
cooler manufacturers, where he was in charge of the areas of Supplier Development and
International Commerce. He has been working at Wellington, as a Business Development
Director of Latin America since 2006.
Clayton Thomas – Sales and Marketing Director, Asia Pacific
Mr Thomas was appointed to direct our key initiatives, in collaboration with customers, to
drive Wellington’s long term growth and sustainability in APAC. Prior to joining Wellington,
he worked with beverage dispensing technologies and sustainable energy solutions for the
Food and Beverage and Marine industries. Mr Thomas has lived in China since 2007.
Gerardo Gonzalez – Vice President and General Manager, Intelligent
Systems Business Unit
Mr. Gonzalez joined Wellington in February 2013 as Vice President and General Manager
of Intelligent Solutions Business. He will be responsible for the business development
and general management of the new Electronic Controls Business Unit. In addition, he
has been appointed as the executive accountable for the company’s relationship with
The Coca-Cola Company. Mr. Gonzalez has global business development and strategic
planning experience in the Carbonated Soft Drink and Beer Industry. Mr. Gonzalez resides
in Atlanta, Georgia, and holds a BS in Economics from Monterrey Institute of Technology,
and an MBA from Emory University.
Ali Karahasanoglu – Sales Director, Europe, Middle East and Africa
Mr Karahasanoglu has received his BS degree in Electrical Engineering on power
electronics division and studied Pre-MBA at Temple University, USA. He had worked
several industries; IT, heating, refrigeration, home appliances as Project Development
Engineer, Service Engineer, Regional Sales Manager and Sales & Marketing Manager.
Since joining Wellington in 2002 he has served in different functions within the organisation
– distribution, business development, Turkey/Eurasia subsidiary company setup and
management (since 2006), refrigeration business unit management and recently he has
been Sales director of Europe, Middle East and Africa region since 2008.

19
ANNUAL REPORT 2016
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2016
Note
2016
$000s
2015
$000s
Revenue2.235,27424,572
Cost of sales(26,821)(19,311)
Gross profit8,4535,261
Other income2.3206691
Operating expenses(8,455)(7,355)
Earnings before interest, taxation, depreciation & amortisation204(1,403)
Depreciation3.2(274)(251)
Amortisation3.3(1,234)(148)
Loss before interest & taxation(1,304)(1,802)
Finance income4.2849
Finance expenses4.2(1,131)(970)
Loss before income tax(2,427)(2,723)
Income tax expense2.5(51)(57)
Loss for the year(2,478)(2,780)
Other comprehensive income:
Items that may be reclassified subsequently to the profit or loss:
Exchange differences on translating operations4.5b(485)419
Cash flow hedge, net of tax4.5c(21)28
Other comprehensive (loss) / income for the year(506)447
Total comprehensive loss for the year($2,984)($2,333)
Loss for the year attributable to the Owners of the Company($2,478)($2,780)
Total comprehensive loss attributable to the Owners of the Company($2,984)($2,333)
Basic earnings per share – cents2.6(0.96)(1.29)
Diluted earnings per share – cents2.6(0.96)(1.29)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying
notes.

20
ANNUAL REPORT 2016
Consolidated Statement of Movements in Equity
for the year ended 31 December 2016

2016
NoteShare
capital
$000s
Accumulated
losses
$000s
Other
reserves
$000s
Total
equity
$000s
Balance at 1 January 2016117,184(109,648)
(1,938)5,598
Comprehensive Income
Loss for year-(2,478)-(2,478)
Other comprehensive income
Exchange differences on translating operations4.5b--(485)(485)
Cash flow hedge4.5c--(21)(21)
Income tax relating to other comprehensive
income
----
Total comprehensive income-(2,478)(506)(2,984)
Share option compensation expensed4.5a--127127
Contributions of equity, net of costs4.38--8
Lapsed part paid shares4.3,4.5a----
Balance at 31 December 2016$117,192($112,126)($2,317)$2,749

2015
NoteShare
capital
$000s
Accumulated
losses
$000s
Other
reserves
$000s
Total
equity
$000s
Balance at 1 January 2015114,308(106,994)
(2,336)4,978
Comprehensive Income
Loss for year-(2,780)-(2,780)
Other comprehensive income
Exchange differences on translating operations4.5b--419419
Cash flow hedge4.5c--2828
Income tax relating to other comprehensive
income
----
Total comprehensive income-(2,780)447(2,333)
Share option compensation expensed4.5a--7777
Contributions of equity, net of costs4.32,887--2,887
Lapsed part paid shares4.3,4.5a(11)126(126)(11)
Balance at 31 December 2015$117,184($109,648)($1,938)$5,598
The above Consolidated Statement of Movements in Equity should be read in conjunction with the accompanying notes.

21
ANNUAL REPORT 2016
Consolidated Statement of Financial Position
as at 31 December 2016
Note
2016
$000s
2015
$000s
Current Assets
Cash and cash equivalents3.1a
2,0992,880
Trade and other receivables3.1b9,0155,918
Derivative financial instruments6.7-24
Inventories3.1c3,4613,700
Total current assets14,57512,522
Non-Current Assets
Plant and equipment3.29991,009
Intangible assets3.35,9145,300
Total non-current assets6,9136,309
Total assets21,48818,831
Current Liabilities
Trade and other payables3.1d10,9397,830
Provisions3.1e253215
Derivative financial instruments6.714-
Borrowings4.17,499-
Total current liabilities18,7058,045
Non-Current Liabilities
Borrowings4.1345,188
Total non-current liabilities
345,188
Total liabilities
18,73913,233
Net assets$2,749$5,598
Equity
Contributed equity4.3117,192117,184
Accumulated losses4.4(112,126)(109,648)
Other reserves4.5(2,317)(1,938)
Total equity$2,749$5,598
For and on behalf of the Board

..................................... .....................................
Director Director
1 March 2017 1 March 2017
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

22
ANNUAL REPORT 2016
Consolidated Cash Flow Statement
for the year ended 31 December 2016
Note
2016
$000s
2015
$000s
Cash flows from operating activities
Receipts from customers exclusive of GST/VAT32,80525,479
Payments to suppliers and employees exclusive of GST/VAT(32,789)(24,662)
Interest paid(345)(289)
Interest received839
Taxation paid(69)(68)
Net GST/VAT received342335
Net cash (outflow) / inflow from operating activities(48)834
Cash flows from investing activities
Payments for plant and equipment3.2(287)(233)
Payments for intangible assets3.3(1,930)(1,973)
Proceeds from sale of plant and equipment22
Net cash outflow from investing activities(2,215)(2,204)
Cash flows from financing activities
Cash proceeds from ordinary and preference share issues, net of refunds
and issue costs
4.382,876
SuperLife loan facility borrowing4.11,500-
Finance lease borrowing4.176-
Finance lease repayments4.1(17)-
Net cash inflow from financing activities1,5672,876
Net (decrease) / increase in cash and cash equivalents(696)1,506
Cash and cash equivalents at the beginning of the financial period2,8801,196
Effect of exchange rate movements on cash(85)178
Cash and cash equivalents at end of year
3.1$2,099$2,880
The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.

23
ANNUAL REPORT 2016
2016
$000s
2015
$000s
Reconciliation of loss for the year to net cash (outflow) / inflow
from operating activities
Loss for the year(2,478)(2,780)
Adjustments for:
Depreciation and amortisation1,508399
Gain on disposal of plant & equipment(2)(2)
Share based payments12777
Amortisation of borrowing786681
Change in fair value of embedded option-(10)
Inventory provision movement(251)(2)
Doubtful debts provision movement(4)11
Provision for warranty movement38(44)
Net foreign exchange differences(278)(350)
Increase in trade and other receivables(3,093)(619)
Decrease in inventories490976
Increase in trade and other payables3,1092,497
Net cash (outflow) / inflow from operating activities
($48)$834
The above reconciliation should be read in conjunction with the accompanying notes.

24
ANNUAL REPORT 2016
1. Basis of preparation
This section sets out the Group’s accounting policies that relate to the financial statements as a whole. Where
an accounting policy is specific to a note, that policy is stated in the note to which it relates.
1.1 General Information
Wellington Drive Technologies Limited (the “Company”) and its subsidiaries (together the “Group”) develop,
manufacture, market and sell energy saving, electronically commutated (EC) motors, controllers and fans for
worldwide use.
The Company is a limited liability company incorporated and domiciled in New Zealand. The Parent is
registered under the Companies Act 1993 and is an issuer in terms of the Securities Act 1978. The address of
its registered office is 21 Arrenway Drive, Rosedale, Auckland 0632, New Zealand.
The consolidated financial statements of the Group have been prepared in accordance with Generally Accepted
Accounting Practice in New Zealand (NZ GAAP) and the requirements of the Financial Markets Conducts Act
2013. The Group is a for-profit entity for the purposes of complying with NZ GAAP. The consolidated financial
statements comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS),
other New Zealand accounting standards and authoritative notices that are applicable to entities that apply
NZ IFRS. The consolidated financial statements also comply with International Financial Reporting Standards
(IFRS). Separate financial statements for the Parent are no longer required to be presented in accordance with
the Financial Markets Conduct Act 2013.
These consolidated financial statements have been approved for issue by the Board of Directors on 1 March
2017. The entity’s owners do not have the power to amend these financial statements after issue.
1.2 Summary of Significant Accounting Policies
These consolidated financial statements of the Group have been prepared in accordance with Generally
Accepted Accounting Practice in New Zealand (NZ GAAP). The Group is a for-profit entity for the purposes
of complying with NZ GAAP. The consolidated financial statements comply with New Zealand Equivalents
to International Financial Reporting Standards (NZ IFRS), other New Zealand accounting standards and
authoritative notices that are applicable to entities that apply NZ IFRS. The consolidated financial statements
also comply with International Financial Reporting Standards (IFRS).
(a) Basis of preparation
The principal accounting policies adopted in the preparation of the financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
Entities reporting
The financial statements are for the consolidated Group which is the economic entity comprising of Wellington
Drive Technologies Limited and its subsidiaries.
Historical cost convention
These financial statements have been prepared under the historical cost convention.
Going concern assumption
The Group reported a loss after tax of $2,478,000 (2015: $2,780,000) and cash flows outflows from operating
activities of $48,000 (2015: inflow of $834,000) for the year ended 31 December 2016. As at 31 December
2016, the Group has net assets of $2,749,000 (2015: $5,598,000) and net current liabilities of $4,130,000 (2015:
net current assets of $4,477,000). Included in current liabilities is a balance of $5,974,000 which relates to
convertible preference shares that have a conversion date in May 2017 (refer Note 4.1) and $1,500,000 which

25
ANNUAL REPORT 2016
relates to amounts owing to SuperLife Limited under a $2,000,000 facility that is scheduled to be repaid in
September 2017 (refer Note 4.1).
The Group is experiencing significant revenue growth, in the range of 30% to 40%, following the launch of
its new ECR2 motor and SCS Connect products. Management is exploring a number of financing options
including obtaining bank funding to replace the SuperLife facility.
In the unlikely event that sufficient external funding cannot be obtained, it is managements’ intention to defer
discretionary operating and capital expenditure and further improve supplier working capital processes.
The Group’s forecasts indicate that following deferral of this expenditure, it will be in a position to repay the
SuperLife facility when it falls due. However these cash flow forecasts include revenue growth projections and
other significant assumptions, including anticipated customer demand for new products, expected margins,
anticipated development costs, expected foreign currency exchange rate fluctuations and working capital
requirements. Actual results and cash flows may vary materially from forecast.
The ability of the Group to obtain sufficient external funding, if needed, and the judgements and assumptions
associated with forecasting future results and cash flows gives rise to the existence of material uncertainties
over the ability of the Group to repay its debt and continue to operate as a going concern, realise its assets and
meet its obligations in the normal course of business.
It is the considered view of the Directors that the Group will have access to adequate resources to meet its
ongoing obligations for at least a period of 12 months from the date of signing these financial statements.
On this basis, the Directors have assessed it is appropriate to adopt the going concern basis in preparing its
financial statements. The financial statements do not include any adjustments that would result if the Group
was unable to continue as a going concern.
(b) Principles of consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect
these returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group.
The cost of an acquisition is measured as the fair value of the assets given and equity instruments issued
and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at the
acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over
the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of
acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised
directly in the Statement of Comprehensive Income.
Intercompany transactions, balances and unrealised gains on transactions between Group companies
are eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies of the Group.
(c) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency
of the primary economic environment in which the entity operates (‘the functional currency’). The Company’s
functional currency is US Dollars because its purchase and sale of product is mainly denominated in US
Dollars. Subsidiaries in Turkey, Mexico and Singapore use their local currency as the functional currency.
The consolidated financial statements are presented in New Zealand dollars, rounded to the nearest thousand,
which is the Group’s presentation currency. The presentation currency remains New Zealand dollars due to the
Company’s shareholder base being concentrated in New Zealand.

26
ANNUAL REPORT 2016
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the Statement of Comprehensive Income.
(iii) Foreign operations
The results and balance sheets of all foreign operations that have a functional currency different from New
Zealand dollars are translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the
Statement of Financial Position;
• income and expenses for each Statement of Comprehensive Income are translated at average exchange
rates, unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the dates of the transactions; and
• all resulting exchange differences are recognised in other comprehensive income as a separate component
of equity.
(d) Critical accounting estimates
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will,
by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
detailed in the following notes to the financial statements:
Area of estimation Note
• Development costs – capitalisation of expenses and impairment testing 3.3
• Inventory – determining net realisable value 3.1c
• Warranty provisions – determining the provision amount 3.1e
• Doubtful debt provisions – determining net recoverable value 3.1b

27
ANNUAL REPORT 2016
2. Results for the year
This section focuses on the results and performance for the Group and how those numbers are calculated.
2.1 Segment information
An operating segment is a component of an entity that engages in business activities from which it earns
revenues and incurs expenses, whose operating results are regularly reviewed by the chief operating decision
maker and for which discrete financial information is available.
The chief operating decision maker, who is responsible for allocating resources and assessing performance of
the operating segments, has been identified as the Chief Executive Officer supported by the Management Team
who report directly to the CEO.
(a) Reportable segments
The Group is organised on a global basis into one operating segment - marketing, sale, manufacture and
development of electric motors and associated electronics and software. The financial statements therefore
reflect the results and financial position of the segment.
(b) Geographical segments
The Group operates in three main geographical areas, although it is managed on a global basis.
Revenue from external customers by geographic areas
2016
$000s
2015
$000s
Americas27,25717,619
Asia / Pacific (APAC)3,3003,004
Europe / Middle East / Africa (EMEA)4,7173,949
Total$35,274$24,572
Revenue is allocated above based on the country in which the customer is located.
Total non-current assets
2016
$000s
2015
$000s
Americas114
Europe / Middle East / Africa810
New Zealand6,8946,295
Total$6,913$6,309
Total non-current assets are allocated based on where the owners of the assets are located.
Major Customers
Two major customers (defined as customers representing 10% or more of revenues), each account for revenues
of $10,656,000 and $9,388,000 of total revenues (2015: two customers each with revenues of $7,325,000 and
$6,534,000).

28
ANNUAL REPORT 2016
2.2 Revenue
2016
$000s
2015
$000s
Product revenue35,21124,543
Services revenue
6329
$35,274$24,572
Revenue is measured at the fair value of the consideration received or receivable for the sale of goods and
services, excluding GST / VAT, rebates and discounts and after eliminating sales within the Group.
Sale of Goods – sales are recognised when legal title or possession is transferred to the buyer which is usually
when delivery of the goods to the customer takes place.
Sale of services – revenue from the provision of services is recognised when services are rendered to the buyer.
2.3 Other Income
2016
$000s
2015
$000s
Net foreign exchange gains88568
Licence fees received55113
Grants received-8
Other income632
$206$691
Net foreign exchange gains includes a $121,000 loss in 2016 (2015 - $565,000 gain) arising from the revaluation of
the Mandatory Convertible Preference Shares (note 4.1).
2.4 Operating expenses
(a) Employee benefits
2016
$000s
2015
$000s
Wages and salaries and other short term benefits6,1815,076
Employee share options expense12777
Employee benefits$6,308$5,153
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
expected to be settled within 12 months of the reporting date are recognised in other payables in respect of
employees’ services up to the reporting date and are measured at the amounts expected to be paid when the
liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and
measured at the rates paid or payable.
The Group recognises a liability and an expense for bonuses and creates a provision where contractually
obliged or where there is a past practice that has created a constructive obligation.
(b) Rental and operating leases
2016
$000s
2015
$000s
Rental and operating lease expenses$287$283
The Group is the lessee. Leases in which a significant portion of the risks and rewards of ownership are
retained by the lessor are classified as operating leases. Payments made under operating leases (net of any

29
ANNUAL REPORT 2016
incentives received from the lessor) are charged to the Statement of Comprehensive Income on a straight line
basis over the period of the lease.
The Group leases various offices, facilities and equipment. The leases have varying terms, escalation clauses
and renewal rights. On renewal, the terms of the leases are renegotiated.
Operating leases
2016
$000s
2015
$000s
Within one year272275
Later than one year but not later than five years520781
Later than five years--
$792$1,056
2.5 Income tax expense
Current and deferred income tax
The income tax expense or revenue for the year is the tax payable on the current period’s taxable income
(based on the national income tax rate for each jurisdiction) adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying
amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to
apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or
substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of
deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is
made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred
tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other
than a business combination, that at the time of the transaction did not affect either accounting profit or taxable
profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount
and tax bases of investments in controlled entities where the parent entity is able to control the timing of the
reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable
future.
Goods and Services Tax (GST) and Value Added Tax (VAT)
The Statement of Comprehensive Income has been prepared so that all components are stated exclusive of
GST and VAT. All items in the Statement of Financial Position are stated net of GST and VAT, with the exception
of receivables and payables, which include GST and VAT invoiced.
(a) Income tax expense
The Company and Group have unrecognised tax losses available to carry forward and offset against current
year taxable income. Taxation of $51,000 (2015: $57,000) is payable in respect of some overseas subsidiaries.

30
ANNUAL REPORT 2016
(b) Unrecognised tax losses
2016
$000s
2015
$000s
Reported loss for period before tax
(2,427)(2,780)
Non-deductible / non assessable items1,091712
Less unrecognised timing differences863(794)
Net loss for tax purposes(473)(2,862)
Losses carried forward from prior years(98,681)(93,388)
Adjustment of prior periods(1,810)(1,318)
Expired losses--
Overseas taxable income(110)
Exchange adjustments600(1,113)
Losses available to carry forward to future years($100,474)($98,681)
Of the total consolidated losses available to carry forward to future years, $2,504,000 (2015 - $2,947,000) arises
in the USA and is subject to their continuity requirements. USA Federal tax losses expire after 15 to 20 years,
depending on when those losses were incurred. During the 2016 year no USA Federal tax losses expired (2015
- None).
(c) Unrecognised deferred tax balances
The Group has not recognised income tax losses and temporary differences as a future income tax benefit
due to the uncertainty of their recoverability in the immediate future. Losses available to be carried forward are
subject to the shareholder continuity requirements of the New Zealand Income Tax Act 1994 and the countries
in which the losses have arisen. Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset and they relate to the same tax authority. The New Zealand corporate tax rate of 28%
has been used to determine the below unrecognised deferred tax assets:
2016
$000s
2015
$000s
Doubtful debts
3842
Inventory provisions and eliminations 5690
Employee benefits9454
Other timing differences72194
Tax losses to carry forward28,13327,559
Unrecognised net deferred tax asset$28,393$27,939
(d) Imputation credits
The Group has no imputation credits available (2015 – $nil) and no movements occurred in the Imputation
Credit Account (2015 – $nil).

31
ANNUAL REPORT 2016
2.6 Earnings per share
Earnings per share (‘EPS’) is the amount of post-tax profit attributable to each share.
Basic EPS of a loss of 0.96 cents (2015 – loss of 1.29 cents) is calculated by dividing the loss attributable to
equity holders of the Company of $2,478,000 (2015 - ($2,780,000)) by the weighted average number of ordinary
shares in issue during the year of 256,895,787 (2015 – 216,049,250).
Diluted EPS of a loss of 0.96 cents (2015 - loss of 1.29 cents) reflects any commitments the Group has to issue
shares in future that would decrease EPS. The weighted average number of ordinary shares is compared with
the number of shares that would have been issued assuming the exercise of share options. As at 31 December,
the following instruments existed that are, or were, potentially dilutive of future earnings per share, but were not
included in the calculation of diluted EPS for that year because the effect in that year would have been anti-
dilutive:
Number of shares
20162015
Part paid shares
12,904,6358,993,524
US employee share options1,914,6001,058,372
The weighted average number of ordinary shares on issue for the purpose of the basic and diluted EPS
calculation includes 25,211,740 preference shares (2015 - 25,211,740), being the minimum number of ordinary
shares that will be issued upon their conversion (note 4.1).

32
ANNUAL REPORT 2016
3. Operating assets and liabilities
This section focuses on the assets used to generate the Group’s trading performance and the liabilities incurred
as a result.
3.1 Working capital
Working capital represents the assets and liabilities the Group generate through its trading activities. The Group
therefore defines working capital as cash, trade and other receivables, inventory and trade and other payables.
(a) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions and other
short term and highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
2016
$000s
2015
$000s
Cash on hand and at bank8201,092
Call deposits1,2031,712
Short term bank deposit7676
$2,099$2,880
The carrying amount of the Group’s cash and cash equivalents is denominated in the following currencies:
NZD399805
USD1,6341,970
Other66105
$2,099$2,880
(b) Trade and other receivables
Trade receivables are recognised initially at the value of the invoice sent to the customer and subsequently
measured at the amounts considered recoverable. Trade receivables are generally due for settlement no more
than 120 days from the date of recognition.
A provision for impairment of trade receivables is established when there is objective evidence that the Group
will not be able to collect all amounts due according to the original terms of the receivable. This determination
requires significant judgement. In making this judgement, the Group evaluates amongst other factors whether
there is objective evidence of significant financial difficulty of the customer, whether there has been breach
of contract, whether it has become probable that the customer will enter into bankruptcy or other financial
reorganisation, whether there is an active market for that customer and the national or local economic
conditions that could impact on the customer.
2016
$000s
2015
$000s
Trade receivables8,5045,436
Provision for doubtful debts(148)(152)
Net trade receivables8,3565,284
Prepayments269361
VAT/GST refunds due274178
Income tax refund due3214
Other receivables8481
$9,015$5,918

33
ANNUAL REPORT 2016
The carrying amount of the Group’s trade and other receivables is denominated in the following currencies:
2016
$000s
2015
$000s
NZD5246
USD8,5135,495
EUR96100
Other354277
$9,015$5,918
Provision for doubtful debts
Carrying amount at start of year152141
Increase / (decrease) in provision2(12)
Exchange adjustment(6)23
Carrying amount at end of year$148$152
The decrease in provision is recognised within ‘Operating expenses’ in the Statement of Comprehensive
Income.
(c) Inventories
Inventories are stated at the lower of cost and net realisable value. Costs are assigned to individual items of
inventory on the basis of first in first out. Net realisable value is the estimated selling price in the ordinary course
of business less the estimated costs necessary to make the sale.
Management reviews inventory on a line by line basis. Judgements are made about expected selling prices
and obsolescence based on forecast sales. A provision is recognised for stock which is expected to sell for less
than cost.
2016
$000s
2015
$000s
Finished goods – at cost2,4323,029
Work in progress – at cost731526
Raw materials – at cost369467
Less inventory provisions(71)(322)
Total inventories$3,461$3,700
Certain inventories are subject to retention of title clauses.
Cost of inventories recognised as an expense and included in cost of sales $25,527,000 (2015: $18,284,000)
(d) Trade and other payables
Trade payables are recognised at the value of the invoice received from a supplier. These amounts represent
liabilities for goods and services provided to the Group prior to balance sheet date. The amounts are unsecured
and are usually paid within 90 days of recognition.
2016
$000s
2015
$000s
Trade payables9,5476,927
Employee entitlements 410330
Accrued expenses and deferred income982573
$10,939$7,830

34
ANNUAL REPORT 2016
The carrying amount of the Group’s trade and other payables is denominated in the following currencies:
2016
$000s
2015
$000s
NZD1,0581,035
USD9,7416,651
Other140144
$10,939$7,830
(e) Provisions
Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past
events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the
amount has been reliably estimated. Provisions are not recognised for future operating losses.
The Group sells electric motors with warranty periods of up to five years. The terms of the warranty provide that
the Group will repair or replace items that fail to perform satisfactorily. A provision has been recognised based
on historical data and average levels of repairs and warranty claims experienced by the Group. It is expected
that the provision will be utilised within one year as any product failures are typically exhibited within one year of
sale.
Warranty provision
2016
$000s
2015
$000s
Carrying amount at start of year215259
Additional provisions recognised9387
Amounts used(51)(184)
Exchange adjustment(4)53
Carrying amount at end of year$253$215
3.2 Plant & equipment
All plant and equipment is stated at historical cost less depreciation and impairments. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of
Comprehensive Income during the financial year in which they are incurred.
Depreciation on plant and equipment is calculated using the straight line method to allocate their cost net of
their residual values, over their estimated useful lives, as follows:
Useful Life
Plant and equipment 3 - 15 years
Office equipment, furniture and fittings 3 - 15 years
The assets’ residual values and useful lives are reviewed and adjusted as appropriate at each balance sheet
date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.

35
ANNUAL REPORT 2016
Plant and equipment can be analysed as follows:
Plant &
equipment
$000s
Office
equipment,
furniture &
fittings
$000s
Total
$000s
At 31 December 2014
Cost4,8121,6606,472
Accumulated depreciation and impairment(3,970)(1,345)(5,315)
Exchange adjustment(141)(136)(277)
Net book amount$701$179$880
Year ended 31 December 2015
Opening net book amount
701179880
Additions
21518233
Depreciation
(198)(53)(251)
Exchange adjustment
12324147
Closing net book amount
$841$168$1,009
At 31 December 2015
Cost5,0271,6786,705
Accumulated depreciation and impairment(4,168)(1,398)(5,566)
Exchange adjustment(18)(112)(130)
Net book amount
$841$168$1,009
Year ended 31 December 2016
Opening net book amount
8411681,009
Additions
169118287
Depreciation
(212)(62)(274)
Exchange adjustment
(17)(6)(23)
Closing net book amount
$781$218$999
At 31 December 2016
Cost
5,1961,7966,992
Accumulated depreciation and impairment
(4,380)(1,460)(5,840)
Exchange adjustment
(35)(118)(153)
Net book amount
$781$218$999
Depreciation
2016
$000s
2015
$000s
Plant and equipment212198
Office equipment, furniture & fittings6253
$274$251
Sale of plant and equipment
Gain on disposal $2$2
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in the Statement of Comprehensive Income.

36
ANNUAL REPORT 2016
Capital commitments
Capital commitments contracted for at 31 December 2016 amounted to $125,000 (2015 - $130,000).
3.3 Intangible assets
Research, development and patent costs
Expenditure on research activities, undertaken with the prospect of obtaining new scientific or technical
knowledge and understanding, is recognised in the Statement of Comprehensive Income as an expense when
it is incurred.
Expenditure on development activities, being the application of research findings or other knowledge to a
plan or design for the production of new or substantially improved products or services before the start of
commercial production or use, is capitalised if the product or service is technically and commercially feasible
and adequate resources are available to complete development. Development costs are capitalised once
it can be demonstrated that the asset is supported by future economic benefits. Management is required
to consider the following criteria when making its judgement as to when it is appropriate to commence
capitalisation of development costs:
• technical feasibility of completing the development so that it will be available for use or sale;
• intention to complete the development;
• ability to use the developed asset or sell it;
• existence of a market;
• availability of adequate technical, financial and other resources to complete and commercialise the
development; and
• ability to measure reliably the expenditure attributable to the development.
The expenditure capitalised comprises all directly attributable costs, including costs of materials, services, direct
labour and an appropriate proportion of overheads.
Development expenditure which does not meet the criteria for capitalisation is recognised in the Statement of
Comprehensive Income as an expense as incurred. Capitalised development expenditure is stated at cost less
accumulated amortisation and any impairment losses.
Amortisation is calculated using the straight line method to allocate the cost over the period of the expected
benefit, up to a maximum of 5 years.
Capitalised patent costs are amortised on a straight line basis over the period of expected benefit no longer
than the life of the patent, up to a maximum of 20 years.
Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to
use the specific software. These costs are amortised over their estimated useful lives (3 to 5 years).
Costs associated with developing or maintaining computer software programmes are recognised as an
expense as incurred.
Impairment of non-financial assets
Intangible assets that have an indefinite useful life or intangible assets not ready for use are not subject to
amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed
for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For
the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash generating units).

37
ANNUAL REPORT 2016
Intangible assets can be analysed as follows:
Internally
Generated
Development
costs
$000s
Patents
$000s
Software
$000s
Other
$000s
Total
$000s
At 31 December 2014
Cost6,5261,4424061758,549
Accumulated amortisation (3,999)(893)(383)(77)(5,352)
Exchange adjustment(85)(52)(11)(18)(166)
Net book amount$2,442$497$12$80$3,031
Year ended 31 December 2015
Opening net book amount2,44249712803,031
Additions1,8515138331,973
Amortisation(79)(57)(10)(2)(148)
Exchange adjustment36271-11444
Closing net book amount$4,576$562$40$122$5,300
At 31 December 2015
Cost8,3771,32044420810,349
Accumulated amortisation (4,078)(777)(393)(79)(5,327)
Exchange adjustment27719(11)(7)278
Net book amount$4,576$562$40$122$5,300
Year ended 31 December 2016
Opening net book amount4,576562401225,300
Additions1,86641-231,930
Amortisation(1,074)(145)(13)(2)(1,234)
Exchange adjustment(71)(6)(1)(4)(82)
Closing net book amount$5,297$452$26$139$5,914
At 31 December 2016
Cost10,2431,36144423112,279
Accumulated amortisation(5,152)(922)(406)(81)(6,561)
Exchange adjustment20613(12)(11)196
Net book amount$5,297$452$26$139$5,914
Included within internally generated development costs is $1,102,000 (2015: $4,448,000) under development.
This cost is not yet being amortised. An impairment assessment has been performed at 31 December 2016
taking into account costs to complete the developments, costs to set up the manufacturing capability, estimates
of market volume and price and estimated manufacturing unit costs.
Amortisation and impairment
2016
$000s
2015
$000s
Amortisation of intangible assets1,234148
Impairment of intangible assets--
Research and development
Research & development costs expensed648414
Development time capitalised(1,262)(1,342)

38
ANNUAL REPORT 2016
4. Capital and financing costs
This section sets out the Group’s capital structure and shows how it finances its operations and growth.
In order to finance the Group’s activities (now and in the future) the Board monitors and determines the
appropriate capital structure for Wellington to execute strategy and to deliver its business plan.
4.1 Borrowings
2016
$000s
2015
$000s
Current portion
Mandatory Convertible Preference Shares5,974-
Loan facility - SuperLife1,500-
Finance lease25-
Liability at end of year$7,499$-
Non-Current portion
Mandatory Convertible Preference Shares-5,188
Finance lease34-
$34$5,188
Mandatory Convertible Preference Shares
On 19 May 2015 the Company issued $5,042,346 mandatory convertible preference shares at an issue price of
$0.20 per share, bearing a fixed coupon rate of 5% per annum, payable six monthly in arrears. In May 2017 the
convertible preference shares convert to ordinary shares in accordance with a conversion ratio. If the ordinary
share price (at that time) is greater than $0.24, then each convertible preference share will convert to ordinary
shares on a 1:1 basis. If the ordinary share price is less than or equal to $0.24, then preference shares convert
at $0.20 divided by 80% of the then share price for each preference share held.
The preference shares were recognised initially as a liability at fair value, net of issue costs incurred, and are
subsequently carried at amortised cost; any difference between the proceeds (net of issue costs and the value
attributed to the embedded option) and the redemption value (being 25,211,740 shares at $0.25) is recognised
in the income statement over the period to conversion using the effective interest method. The coupon on these
shares will be recognised in the statement of comprehensive income as interest expense.
2016
$000s
2015
$000s
Liability at start of year5,1884,507
Amortisation786681
Liability at end of year$5,974$5,188
The proceeds from the 2014 issue were $5,042,000. Issue costs were $346,000 and the value attributed to the
embedded option was $565,000 so the liability at date of issue was $4,131,000.
The effective interest rate on the liability is 19.15% taking into account costs of issue. The liability has been
classified as current because the preference shares convert in 2017. The carrying amount of the Group’s
mandatory convertible preference shares is denominated in NZD.
Loan facility – SuperLife Limited
In September 2016 the Company secured a $2 million unsecured loan facility from SuperLife Limited, a
shareholder. The loan facility has a one year term. Interest is payable quarterly at 14.75% pa and a $20,000
annual revolver fee is payable.

39
ANNUAL REPORT 2016
Finance lease
In March 2016 the Company entered into a 36 month equipment lease. The amount financed was $76,000 and
repayments in the year ended 31 December 2016 amounted to $17,000.
4.2 Finance
2016
$000s
2015
$000s
Finance income
Change in fair value of embedded option (note 6.7)-10
Other interest income839
$8$49
Finance expenses
Amortisation of borrowing (note 4.1)786681
Preference shares coupon252252
Other interest expense9337
$1,131$970
4.3 Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
2016
Shares
2015
Shares
2016
$000s
2015
$000s
Ordinary shares – fully paid231,684,047231,684,047117,155117,155
Ordinary shares – partly paid12,904,6358,993,5243729
US employee share options1,914,6001,058,372--
Preference shares (note 4.1)25,211,74025,211,740--
Total shares and options on issue271,715,022266,947,683$117,192$117,184
(a) Ordinary shares – fully paid
Opening balance of ordinary shares on issue231,684,047126,373,117117,155114,273
Issues of ordinary shares during the year:
• May / June 2015 issues at 3 cents for cash-105,310,930-3,159
• Share issue costs---(277)
Ordinary fully paid shares on issue at year end231,684,047231,684,047$117,155$117,155
All ordinary shares are authorised and have no par value. Ordinary shares entitle the holder to participate in
dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid
on shares held.
(b) Ordinary shares – partly paid
Partly paid shares outstanding at start of year8,993,5246,941,4622935
Issues of partly paid shares during the year:3,911,1114,207,05685
Lapsed-(2,154,994)-(11)
Surrendered----
Ordinary part paid shares on issue at year end12,904,6358,993,524$37$29
For further details of part paid shares see 6.2c

40
ANNUAL REPORT 2016
(c) US employees share options (numbers)
2016
Share Options
2015
Share Options
Options outstanding at start of year1,058,372673,510
Issues of U.S. employee options during the year:856,228384,862
Lapsed--
Outstanding at end of year1,914,6001,058,372
4.4 Accumulated losses
2016
$000s
2015
$000s
Opening balance(109,648)(106,994)
Loss for the year(2,478)(2,780)
Surrendered & lapsed employee share option scheme benefits-126
Accumulated losses at end of year$112,126($109,648)
4.5 Other reserves
2016
$000s
2015
$000s
Share option compensation reserve248121
Currency translation reserve(2,568)(2,083)
Hedging reserve324
($2,317)($1,938)
(a) Share Option Compensation Reserve
2016
$000s
2015
$000s
Share based compensation recognised at start of year121170
Net compensation expensed12777
Surrendered & lapsed share option scheme transferred to accumulated losses-(126)
$248$121
(b) Currency Translation Reserve
2016
$000s
2015
$000s
Opening balance(2,083)(2,502)
Movements for the year(485)419
($2,568)($2,083)
(c) Hedging reserve
2016
$000s
2015
$000s
Opening balance24(4)
Cash flow hedge fair value gains / (losses) for the year(21)28
Tax on fair value gains / (losses)--
$3$24

41
ANNUAL REPORT 2016
5. Risk
This section presents information about the Group’s exposure to financial and commercial risks; the Group’s
objectives, policies and processes for managing those risks.
5.1 Key financial risks
The Group’s principal financial instruments comprise receivables, payables, cash and cash equivalents,
borrowings and derivatives.
The Group manages its exposure to the key financial risks – market risk (including foreign currency risk and
interest rate risk), credit risk, liquidity risk and capital risk. The Group enters into derivative transactions
(principally forward currency contracts) to manage currency risks.
(a) Financial market risk
Foreign currency risk
The Group operates internationally and is exposed to foreign currency risk arising from various currency
exposures. Presently the Group's revenue is based on USD pricing and invoicing is almost entirely USD
denominated. The majority of the Group's product, manufacturing and logistics cost is invoiced and settled in
USD. This provides a strong natural hedge position between revenues and costs. USD funds are converted to
NZD to meet New Zealand operational costs as required.
The Company’s functional currency is USD. Changes in exchange rates then will result in monetary assets
and liabilities denominated in currencies other than USD (the functional currency) being revalued at balance
date and the resulting unrealised revaluation gain / loss recognised in the statement of comprehensive income.
Any realised gain / loss arising from the settlement in cash of these non USD transactions recorded during the
period will also be recognised in the statement of comprehensive income.
A sensitivity analysis of foreign exchange rate risk on the Group’s monetary assets and liabilities at 31
December 2016 is provided in the table below. This shows the impact of a 10% strengthening in the USD
exchange rate relative to other currencies – a positive impact on the results because NZD denominated debt will
be less in USD terms.
Carrying
amount
$000s
Currencies
other than
USD
$000s
Profit
impact
$000s
Equity
impact
$000s
Monetary assets:
Cash2,099465(33)(33)
Trade and other receivables9,015502(36)(36)
Monetary liabilities:
Trade and other payables(10,939)(1,198)8686
Borrowings(7,533)(7,533)542542
Net impact$559$559
A weakening of the USD exchange rate relative to other currencies will have an adverse impact. 10% was
chosen as a reasonable sensitivity given the historically volatile markets for foreign exchange. Amounts are
shown net of income tax. All variables other than applicable exchange rates are held constant. The profit and
equity impact on the same basis at 31 December 2015 was $354,000.

42
ANNUAL REPORT 2016
The Company’s reporting currency is NZD. Changes in NZD exchange rates will therefore impact the reported
results. For example, a decrease in the NZD / USD exchange rate will mean higher reported revenues, gross
profits and operating expenses and also higher operating assets and liabilities (including cash) as a result of the
translation from functional currency to reporting currency.
The impact of a change in NZD exchange rates on the reported NZD result (excluding any gains / losses arising
on financial assets and liabilities summarised above) is demonstrated in the table below.
Reported
in NZD
$000s
If NZD /
USD rate
had been
0.60
$000s
If NZD /
USD rate
had been
0.80
$000s
Revenue35,27441,74831,577
Gross profit8,45310,0047,567
Operating income206216200
Operating expenses (excluding depreciation & amortisation)(8,455)(8,953)(8,169)
EBITDA$204$1,267($402)
Interest Rate Risk
The coupon attaching to the Mandatory Convertible Preference Shares is 5% pa. In 2016, the Group borrowed
$1,500,000 from SuperLife and entered into a finance lease. The interest rate on this debt is fixed. There is no
other interest bearing debt.
The Group has cash deposits in various currencies to facilitate trading in the countries in which it has a
presence. Most of the cash deposits are held in either NZD or USD.
The impact of a 1% increase / decrease in interest rates over a one year period on the closing cash balance is
not significant.
(b) Credit risk
The Group generally trades with customers and banking counterparties who are well established. While there
are individually significant customers, the Group takes out trade credit insurance in order to provide better
security. Receivables balances are managed by and reported regularly to senior management according to
credit management policies and procedures. The amount outstanding at balance sheet date represents the
maximum exposure to credit risk.
Individual receivables are assessed as impaired where customers have defaulted on payment terms and
management has assessed the likelihood of recovery as remote. A full provision has been made against those
individually impaired assets. For receivables that are neither past due nor impaired, management does not
foresee any likelihood of default as the receivables are due from long-standing customers.
At balance sheet date, trade receivables of $275,000 were past due but not considered impaired (2015 -
$1,146,000). Of this amount $44,000 (2015 - $113,000) was 3 months or more overdue.
The Group enters into forward foreign exchange contracts within specified policy limits and only with counter-
parties approved by directors.
Cash and cash equivalents are deposited with a number of trading banks in New Zealand and overseas.
$1,387,000 is deposited with a major NZ trading bank with a Standard and Poors rating of AA- (2015:
$1,417,000 AA-) and $345,000 (2015: $553,000) with Western Union. The remaining balance of $367,000
(2015: $910,000) is held across a number of territories and non-performance of obligations by the relevant
banks is not expected due to the credit rating of the counter parties considered.

43
ANNUAL REPORT 2016
(c) Liquidity risk
The Group maintain regular forecasts of liquidity based on expected cash flows. The table below analyses the
Group’s financial liabilities into relevant groups based on the remaining period at the reporting date to the end
of the contractual date. The amounts disclosed are the contractual undiscounted cash flows.
20162015

$000's
Less than
6 months
7 to 12
months
More than
12 months
Less than
6 months
7 to 12
months
More than
12 months
Trade and other payables10,236--7,589--
Borrowings1,5121334---
Coupon on preference shares126--126126126
$11,874$13$34$7,715$126$126
Trade and other payables above exclude any liabilities for tax (including payroll taxes), statutory liabilities and
deferred income. 2015 comparative figures have been restated.
(d) Capital risk management
The Company monitors capital on the basis of cash requirements and, in order to maintain or adjust the capital
structure, generally issues new shares to investors through rights issues or institutional placements.
The Company has not been subject to any externally imposed capital requirements during the period.

44
ANNUAL REPORT 2016
6. Other information
This section includes other information that must be disclosed to comply with accounting standards and other
pronouncements, but that is not immediately related to individual line items in the financial statements.
6.1 Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries
in accordance with the accounting policy described in Note 2b.
Country of
incorporation
Class of
Shares
20162015
Wellington Drive Sales LtdNew ZealandOrdinary100%100%
Wellington Drive Technologies US, Inc
USAOrdinary100%100%
Wellington Motor Teknolojileri San Tic Ltd Sti
TurkeyOrdinary100%100%
Wellington Italia Srl
ItalyOrdinary100%100%
Wellington Drive Technologies Pte Ltd
SingaporeOrdinary100%100%
Wellington Manufacturing Group Singapore Pte Ltd
SingaporeOrdinary100%100%
Wellington Latin America Services SA de CV
MexicoOrdinary100%100%
Wellington Mexico Tecnologia SA de CV
MexicoOrdinary100%100%
All subsidiaries have a common balance date of 31 December.
6.2 Related party transactions
(a) Directors
The names of persons who are directors of the Company are on page 61.
(b) Key management personnel and compensation
Key management personnel compensation is set out below. Key management personnel comprise the
Directors including the Chief Executive Officer (CEO) and all the senior executives who report directly to the
CEO.
2016
$000s
2015
$000s
Salaries, fees and other short term benefits1,6331,525
Share based remuneration9769
Directors’ remuneration158174
Total$1,888$1,768
(c) Employee share based remuneration
Equity settled, share based compensation is provided to employees via the Wellington Partly Paid Share
Scheme and Wellington Employees Share Option Plan. The fair value of the employee services received in
exchange for the grant of part paid shares or options are recognised as an expense over the vesting period.
The proceeds received net of any directly attributable transaction costs are credited to share capital when the
partly paid share proceeds are received or options are exercised.

45
ANNUAL REPORT 2016
Ordinary shares – partly paid
Issue DateEarliest date
to exercise
Expiry
exercise date
Share hurdle
price (cents)
Partly paid
share price
(cents)
Balance
payable on
exercise
(cents)
Outstanding
at 2016
(numbers)
Outstanding
at 2015
(numbers)
24 Jun 201324 Jun 201724 Jun 201816.2916.2915.791,635,6651,635,665
18 Jun 201418 Jun 201718 Jun 201814.2214.2213.721,260,5871,260,587
23 Jul 201423 Jul 201723 Jul 201914.7314.7314.231,890,2161,890,216
1 Jul 20151 Jul 20171 Jul 20195.215.215.112,316,8402,316,840
1 Jul 20151 Jul 20181 Jul 20205.655.655.531,890,2161,890,216
20 Apr 201631 Mar 201731 Mar 20199.439.439.233,489,131-
30 Sep 201630 Sep 201930 Sep 202118.1718.1717.81421,980-
12,904,6358,993,524
A Partly Paid Share Scheme was established in June 2008, to enable certain employees to acquire shares in
the Company. After the earliest date to exercise, provided the market price for the Company’s shares is, at that
date, equal to or greater than the hurdle price stated above (and on or before 2 years after the earliest exercise
date), employees can settle the unpaid balance of their part-paid shares and transfer the shares to their name
or the name of their nominated trustee.
The April 2016 issue of part paid shares is subject to the company achieving specific financial performance
targets in the 2016 financial year or at the discretion of the directors pursuant to the rules of the Scheme.
Wellington Drive Technologies Share Scheme Trustee Limited (WSST) acts as trustee holding the part-paid
shares on behalf of employees. These partly paid shares are not quoted on the NZX and are not tradable.
Mr Greg Allen, the Company’s Chief Executive, was issued 1,260,587 part paid shares in June 2014, 2,316,840
shares in 2015 that have a two year vesting period and a further 1,218,073 in April 2016 subject to terms
outlined above.
Fair value is assessed at the date that the partly paid shares or share options are granted using a binomial
option pricing model that takes into account the exercise price, the three year term of the partly paid shares or
options, the exercise criteria, the likelihood of staff turnover, the non-tradable nature of the partly paid share or
option, the share price at the issue or grant date, the volatility of the returns on the underlying share and the risk-
free interest rate for the term of the partly paid share or option.
The model inputs for partly paid shares issued were as follows:
2016 issues2015 issues2014 issues2013 issues
• Market price or “hurdle price” required
to enable the partly paid shares to be
exercised:
9.43 – 18.17
cents
5.21 – 5.65
cents
14.22 – 14.73
cents
16.29 – 17.25
cents
• Expected volatility of the Company’s shares:58.1 – 59.4%43.4%46.57%52.7%
• Risk-free interest rate:1.92 – 2.34%2.97 – 3.04%3.63 – 3.87%2.87%
• Expected term:1 – 3 years2 – 3 years2 – 3 years2 – 3 years
U.S. employee share options
The Annual Meeting held in June 2010 approved the establishment of the United States Share Option Plan
and authorised the Board to issue up to 3,000,000 options. All options must be exercised within 12 months
after a period of three years from the date on which the options are issued. The price at which options can be
exercised under the United States Share Option Plan is the closing sales price on the date of the grant plus a
30% premium. Further details of share options granted are summarised below:

46
ANNUAL REPORT 2016
Grant DateExpiry dateExercise price (cents)
Outstanding at 2016
(numbers)
Outstanding at 2015
(numbers)
24 Jun 201324 Jun 201716.9
288,647 288,647
23 Jul 201423 Jul 201814.3
288,647288,647
21 Aug 201421 Aug 201812.2
96,21696,216
1 Jul 20151 Jul 20195.59
384,862384,862
20 Apr 201631 Mar 201911.7
760,013-
30 Sep 201630 Sep 202018.2
96,215-
1,914,6001,058,372
The model inputs for partly paid shares issued were as follows:
2016 issue2015 issue2014 issues2013 issue
• Market price or “hurdle price” required (being
the issue price plus 30%) to enable the
options to be exercised:
18.2 cents5.59 cents12.2 – 14.3
cents
16.9 cents
• Expected volatility of the Company’s shares:58.1-59.4%43.4%46.57%52.7%
• Risk-free interest rate:1.92-2.34%3.04%3.87%2.87%
• Expected term:3 years3 years3 years3 years
6.3 Contingencies
There are no material contingent liabilities or assets (2015 - $nil).
6.4 Financial instruments by category
2016
$000s
2015
$000s
Assets per Statements of Financial Position
Loans and Receivables
Trade and other receivables8,1335,173
Cash and cash equivalents2,0992,880
Derivatives used for hedging (at fair value)
Derivative financial instruments-24
$10,232$8,077
Liabilities per Statements of Financial Position at amortised cost
Trade and other payables10,2797,631
Borrowings7,5335,188
Derivatives used for hedging (at fair value)
Derivative financial instruments--
At fair value14
Embedded option--
$17,826$12,819
Fair value estimation
The only financial instruments carried at fair value are derivatives comprising forward foreign exchange
contracts and the embedded option in the preference shares.
The forward exchange contract has been classified as Level 2 and the embedded option as Level 3.

47
ANNUAL REPORT 2016
The different levels have been defined as follows:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
• Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (ie as prices) or indirectly (ie derived from prices) (Level 2)
• Inputs for the asset or liability that are not based on observable market data (ie unobservable inputs) (Level 3)
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance
sheet date, with the resulting value discounted back to present value.
The fair value of the embedded option is described in more detail in note 6.7a.
6.5 Other disclosures
Auditors remuneration
2016
$000s
2015
$000s
PricewaterhouseCoopers:
- Audit of financial statements of the Group9085
- Procedures over interim financial statements of the Group76
Audit of subsidiaries by other auditors77
Total remuneration for audit services$104$98
6.6 New accounting standards
New standards, amendments and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are effective for annual periods
beginning after 1 January 2016 and have not been applied in preparing these financial statements
NZ IFRS 9, ‘Financial instruments’, addresses the classification, measurement and de-recognition of financial
assets, financial liabilities, impairment of financial assets and hedge accounting addresses the classification,
measurement and recognition of financial assets and financial liabilities. The standard is mandatory for
accounting periods beginning on or after 1 January 2018.
NZ IFRS 15, ‘Revenue from contracts with customers’ establishes the framework for revenue recognition. The
standard is mandatory for accounting periods beginning on or after 1 January 2018.
IFRS 16, ‘Leases’, requires a lessee to recognise a lease liability reflecting future lease payments and a 'right-
of-use asset' for virtually all lease contracts. The standard is mandatory for accounting periods beginning on or
after 1 January 2019.
Whilst the Group has not yet formally assessed the impact of these standards, IFRS15 is not expected to have
a significant impact on the Group’s revenue recognition policies and for IFRS16, the Group’s operating lease
commitments are disclosed in note 2.4(b) which would be subject to the requirements of IFRS16.
6.7 Derivative financial instruments
2016
$000s
2015
$000s
Option embedded in the preference shares-
-
Forward foreign exchange contracts(14)24
(Liability) / asset at end of year($14)$24

48
ANNUAL REPORT 2016
(a) Option embedded in the preference shares
The mandatory convertible preference shares have the characteristics of both a bond-like security and an
embedded option:
• The bond like component promises the preference shareholders the payment of a coupon of 5%, payable
on a 6 monthly basis, in arrears;
• The embedded option component provides the preference shareholders with the ability to benefit if the
share price of the Company’s ordinary shares is above $0.25 at the conversion date.
The embedded option derivative is initially recognised at fair value as determined by an independent valuer
using the Black-Scholes valuation model. It is subsequently remeasured by the Company at 31 December.
2016
$000s
2015
$000s
Liability at start of year-
(10)
New issue (note 4.1)--
Gains recognised in finance income (note 4.2)10
Exchange adjustments--
Liability at end of year$-$-
The embedded option is highly sensitive to the market share price at the date of valuation. All other key
variables do not have a significant impact on the fair value measurement.
(b) Forward foreign exchange contracts
The majority of the Group’s revenue is invoiced in USD and the majority of the Group’s product and logistics
costs are settled in USD. Head office and Engineering costs are largely NZD denominated. The Parent
may hedge highly probable forecast NZD costs that are expected to occur at various dates over the next 6
months. These contracts are timed to mature when the costs will be incurred. The forward currency contracts
are considered to be highly effective as they are matched against forecast cash outflows with any gain/
loss on contracts attributable to the hedged risk taken directly to equity and recycled to the Statement of
Comprehensive Income in the following year when the contract is settled.

49
ANNUAL REPORT 2016


PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Independent auditor’s report
To the shareholders of Wellington Drive Technologies Limited
Wellington Drive Technologies Limited’s consolidated financial statements as at and for the year
ended 31 December 2016 comprise:

 the consolidated statement of comprehensive income;
 the consolidated statement of movements in equity;
 the consolidated statement of financial position;
 the consolidated cash flow statement; and
 the notes to the consolidated financial statements, which include the significant accounting
policies.

Our opinion
In our opinion, the consolidated financial statements of Wellington Drive Technologies Limited (the
Company), including its subsidiaries (the Group), present fairly, in all material respects, the financial
position of the Group as at 31 December 2016, its financial performance and its cash flows for the year
then ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) and International Financial Reporting Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
NZ) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the consolidated financial
statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised)
Code of Ethics for Assurance Practitioners (PES 1) issued by the New Zealand Auditing and Assurance
Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our firm carries out procedures over the interim financial statements of the Group. The provision of
this service has not impaired our independence as auditors of the Group.


49

50
ANNUAL REPORT 2016
Our audit approach
Overview
An audit is designed to obtain reasonable assurance whether the financial
statements are free from material misstatement.
Overall group materiality: $353,000 which represents 1% of revenue.
We chose revenue as the benchmark because, in our view, it is a relatively
stable measure of performance relative to the size of the Group, and it is one of
the benchmarks against which the performance of the Group is most
commonly measured by users of the financial statements. It is also a key
business driver, the focus of management and the board.
Our key audit matters are:
Carrying amount of development costs; and
Inventory existence and valuation.
Materiality
The scope of our audit was influenced by our application of materiality.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit,
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate on the consolidated financial statements as a whole.
Audit scope
We designed our audit by assessing the risks of material misstatement in the consolidated financial
statements and our application of materiality. As in all of our audits, we also addressed the risk of
management override of internal controls including among other matters, consideration of whether
there was evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the consolidated financial statements as a whole, taking into account the structure of the
Group, the accounting processes and controls, and the industry in which the Group operates.
Material uncertainty related to going concern
We draw attention to Note 1.2 (a) to the financial statements, which discloses that amounts owing to
SuperLife Limited are scheduled to be repaid in September 2017. Management is currently exploring a
number of financing options including obtaining bank funding to replace the SuperLife facility.
In the event that sufficient alternative external funding cannot be obtained, it is management’s
intention to defer discretionary operating and capital expenditure and further improve supplier
working capital processes in order to repay this facility when it falls due. However the Group’s cash
flow forecasts include a number of significant judgements and assumptions and as a result, actual
results and cash flows may vary materially from forecast.
These conditions, along with other matters as set forth in Note 1.2 (a), indicate the existence of a
material uncertainty which, in the event of management not being successful in executing its plans,
50

51
ANNUAL REPORT 2016
may give rise to significant doubt over the ability of the Group to continue to operate as a going
concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current year. These matters were addressed in
the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matters described in the material uncertainty related to going concern section, we
have determined the matters below to be the key audit matters to be communicated in our report.
Key audit matter How our audit addressed the key audit matter
Carrying amount of development costs
At 31 December 2016, the Group has
capitalised product development costs
amounting to $5.3 million, net of
accumulated amortisation relating to SCS
Connect and ECR2, the Group’s new
products.
At the end of 2015, the ECR2 motor and
SCS Connect were complete. Further
development of SCS Connect was
incurred in 2016 to meet additional
customer needs.
The total development costs capitalised
amounting to $1.9 million comprised
internal labour time and other directly
attributable external costs.
The accounting standard on capitalising
such costs sets out a prescribed criteria
that needs to be met before the costs can
be capitalised. The requirements are that
the related products are technically and
commercially feasible, the project is
adequately resourced to completion and
future sales are expected to be sufficient
to recover the capitalised costs. Assessing
whether these criteria are met involves
significant judgement and estimation.
Refer to note 3.3 of the financial
statements - Intangible assets.
The carrying amount of development costs was a key
audit matter because it involves a significant amount
of audit effort and the determination on whether the
development costs capitalised meet the accounting
standard criteria for recognition involves judgement
and estimation.
We performed the following procedures:
We obtained an understanding of how co
sts
are identified relating to development
products and how management determines
which costs can be capitalised.
Through our testing of revenue, we were able
to determine that both the ECR2 motor and
SCS Connect have generated revenue since
January 2016 supporting the view that they
are both technically and commercially
feasible.
We tested, on a sample basis, capitalised costs
to either external invoices or payroll records.
From the procedures performed we have no
matters to report.
We were able to confirm management’s ability
to accurately forecast sales by comparing
the
sales achieved in 2016 relative to the 2016
forecasts. Based on this assessment, purchase
orders received and our review of the 2017
forecasts sales and gross profit on these
products appear sufficient to recover the
capitalised costs.
51

52
ANNUAL REPORT 2016
Key audit matter How our audit addressed the key audit matter
Inventory existence and valuation
As at 31 December 2016, the Group had
inventory of $3.5 million. Given the size
of the inventory balance as compared to
the total assets of the Group and that the
inventory is held at third party locations,
the existence and valuation of inventory
is a key audit matter.
Refer to note 3.1c of the financial
statements - Inventory.
We performed the following audit procedures over
inventory existence and valuation:
We gained an understanding of manage
ment’s
processes and controls for obtaining and
confirming the quantity and condition of
inventories held by third parties.
We obtained third party confirmations an
d
assessed the reliability of these confirmations,
by checking that the third party warehouses
are genuine companies and confirmations
were received directly from third party
warehouse personnel. We also reviewed the
Group’s contracts with these third party
warehouses.
We
tested the cost of inventory, on a sa
mple
basis, to supplier invoices.
We gained an understanding of the Group’s
inventory provisioning process, which
involves a monthly line by line review of
inventory. Judgement is involved in
determining the amount of provision assigned
to specific stock lines based on condition and
relative recovery value.
We considered the impact on older products
and the potential risk of obsolescence given
the introduction of newer models, such as the
ECR2 motor.
We tested the reliability of management’s
provisions by assessing the actual inventory
write off in 2016 against the provision.
From the procedures perfo
rmed, we have no
matters to report.
Information other than the financial statements and auditor’s report
The Directors are responsible for the annual report. The annual report is expected to be made available
to us after the date of this auditor’s report.
Our opinion on the consolidated financial statements does not cover the other information included in
the annual report and we do not express any form of assurance conclusion on the other information. In
connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
52

53
ANNUAL REPORT 2016
appears to be materially misstated. If, when we read the annual report, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS, and 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.
In preparing the consolidated financial statements, the Directors are responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements, as a whole, are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs NZ and ISAs will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the
External Reporting Board’s website at:
https://xrb.govt.nz/Site/Auditing_Assurance_Standards/Current_Standards/Page1.aspx
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Julian Prior.
For and on behalf of:
Chartered Accountants
Auckland
1 March 2017
53

54
ANNUAL REPORT 2016
Statutory Information
Introduction
Directors have resolved that no dividend be declared payable.
The Company does not have a credit rating.
Remuneration of Directors
During the year the following remuneration was paid or payable to directors:
20162015
Mr T. Nowell$50,000$50,000
Dr L. Jacobs$30,000$30,000
Mr G. Pausch
1.
$30,000$30,000
Mr J. McMahon
2.
$30,000$30,000
Mr S. R. Beck
3.
$22,500$30,000
Note
1. Fees for Mr G. Pausch are paid to Board Advisory Services Ltd.
2. Fees for Mr J. McMahon are paid to Meta Capital Ltd.
3. Mr Beck resigned as a director on 30 September 2016.
Interested Transactions
The Directors have disclosed the following transactions with the Company:
• Interested Transactions – There have been no transactions during the year with interested or related parties.
• Directors’ Remuneration – Remuneration details of Directors are provided above.
• Indemnification and insurance of officers and directors – The Company indemnifies directors and executive
officers of the Group against all liabilities which arise out of the performance of their normal duties as director or
executive officer, unless the liability relates to conduct involving lack of good faith. To manage this risk, the Group
has indemnity insurance. The total cost of this insurance expensed during the year ended 31 December 2016 was
$50,769 (2015 - $51,975).
• Directors’ Share Transactions – Shawn Beck resigned from the board during the year and has retained his
shareholding interests in Wellington at year-end. Other than this, no changes in directors shareholding have
occurred during the year. Details of numbers of shares held by directors are shown below.
• Directors’ Loans - There were no loans by the Company to Directors.
• Key Management Share Transactions - In April 2016 key management were issued 2,798,139 part paid ordinary
shares and 414,650 US Share Options; In September 2016 key management were issued 192,431 part paid
ordinary shares; During 2016 changes in the organisation chart resulted in 50,000 part paid shares being deemed
to be held by key management.
Note Key management personal include the Directors, the Chief Executive Officer (CEO) and all the senior executives who report directly to the
CEO. For the purposes of these disclosures directors interests are disclosed separately to other key management.
• The Board received no notices during the year from directors requesting to use Company information received in
their capacity as directors which would not otherwise have been available to them.

55
ANNUAL REPORT 2016
Directors’ Shareholding
31 December 201631 December 2015
Ordinary sharesTotal Relevant InterestDirectTotal Relevant InterestDirect
Mr T. Nowell262,708-262,708-
Mr J. McMahon9,055,285-9,055,285-
Mr G. Pausch-1,000,000-1,000,000
Mr S. R. Beckn/an/a842,074-
Convertible preference shares
Mr T. Nowell17,750-17,750-
Mr J. McMahon911,057-911,057-
Notes: Mr Beck resigned as a director during the year – his 2016 balances are shown as n/a for this reason. Further details of the movements in the
shareholdings of directors are provided above under Interested Transactions.
Employees
The number of employees, other than Directors, within the Group receiving remuneration and benefits above
$100,000, as is required to be disclosed in accordance with section 211(1) (g) of the Companies Act 1993, is
indicated in the following table.
GROUP
20162015
$100,000 - $109,99931
$110,000 - $119,99935
$120,000 - $129,99952
$130,000 - $139,999-2
$160,000 - $169,999-1
$170,000 - $179,9992-
$180,000 - $189,9991-
$190,000 - $199,99912
$200,000 - $209,9991-
$210,000 - $219,99911
$220,000 - $229,999-1
$230,000 - $239,99911
$290,000 - $299,99911
$390,000 - $399,9991-
$450,000 - $459,999-1
NZX Waivers
In accordance with NZ Stock Exchange Listing Rule 10.5.3(f), there were no waivers granted by the NZ Exchange
during the year ended 31 December 2016.
Auditors
In accordance with Section 200 of the Companies’ Act 1993, the auditor, PricewaterhouseCoopers, continue in office.
For and on behalf of the Board

.....................................
T. Nowell,
CNZM
Chairman
14 March 2017

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ANNUAL REPORT 2016
Shareholder Information
Shareholders
As at 31 December 2016 there were 2,440 shareholders holding 231,684,047 fully paid ordinary shares and 225
shareholders holding 25,211,740 convertible preference shares.
Share Issues
Issues to staff pursuant to the Company’s long term incentive scheme are outlined in notes 4.3 and 6.2 to the
Financial Statements.
There were no other issues of ordinary or preference shares in 2016.
Shareholder Details
The ordinary shares of Wellington Drive Technologies Limited are listed on the New Zealand Stock Exchange. The
information in the disclosures below has been taken from the Company’s registers at 3 March 2017:
20 largest shareholders
Ordinary Shares
Convertible
Preference
Shares
2.
1.N.Z. Central Securities Depository Ltd
1.
93,372,90321,663,593
2.East West Manufacturing LLC19,433,333-
3.Wairahi Trust10,100,000-
4.Investment Custodial Services Ltd9,846,0051,781
5.ASB Nominees Ltd (Account 574233)9,055,285911,057
6.Graham Trustees Ltd8,126,686372,000
7.Flynn No 2 Trustees Ltd4,874,291-
8.R.D. Armstrong4,487,030-
9.FNZ Custodians Ltd3,326,20414,033
10.Forsyth Barr Custodians Ltd2,195,29811,719
11.ASB Nominees (Account 317485)2,000,00030,000
12.G. Allen1,980,89719,231
13.Leveraged Equities Finance Ltd1,950,000-
14.Tane Nui Family Trust1,650,000-
15.H. D. Milliner1,589,27738,462
16Rivendale Trust1,486,846-
17.B.D Lobb1,310,38462,077
18.R.& S. Jackson Family Trust1,000,00050,000
19.G. Pausch1,000,000-
20.Shawn Beck Trust842,074-
Note 1. N.Z. Central Deposit Securities Depository Limited hold shares on trust for 11 different shareholders. The largest of these are: BNP Paribas
Nominees (N.Z.) Ltd – 67,848,862; N.Z. Permanent Trustees Ltd – 8,750,000 shares; TEA Custodians Ltd – 5,034,958 shares; Accident Compensation
Corporation – 3,597,804 shares; JPMorgan Chase Bank NA – 3,020,851 shares; Guardian Nominees No 2 Account – 2,077,078; and National
Nominees N.Z. Ltd – 1,558,437 shares.
Note 2. Holdings of convertible preference shares are not ranked largest to smallest.

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ANNUAL REPORT 2016
Distribution of Equity Securities
ShareholdersFully Paid Ordinary Shares
Size of Holdings (at 3 March 2017)
Number %Number %
1-99999940.77337,8830.15
1,000-1,9992339.51312,5110.13
2,000-4,99933813.801,054,3860.45
5,000-9,9992299.351,591,8180.69
10,000-49,99940816.659,215,8913.98
50,000-99,999913.715,693,6342.46
100,000-499,9991134.6122,264,1639.61
500,000-999,999200.8213,013,9555.62
over1,000,000190.78178,199,80676.91
2,450100.00231,684,047100.00
2,326 (or 94.9%) shareholders, holding 203,552,640 shares (or 87.9%) reside in New Zealand.
Substantial Security Holders
Pursuant to section 26 of the Securities Markets Act 1988, details of substantial security holders and their total
relevant interests as per their most recent notices are:
NameNumber of shares
#
Date of Notice
Smartshares Limited (Custodian – BNP Paribas Nominees (NZ) Ltd)64,409,535
2 Nov 2016
East West Manufacturing LLC10,600,00017 Sep 2013
#
Number of shares is taken from notices received. No adjustments have been made for changes that may have subsequently occurred from the
dates of notices stated. The definition of “relevant interest” in the Securities Markets Act 1988 provides that more than one relevant interest can exist in
respect of the same securities.
During the year SuperLife Trustee Nominees Ltd and Harbour Asset Management Ltd ceased to be a Substantial Security Holder.
Shareholder Enquires
Shareholders should send changes of address to Computershare Investor Services Limited at the address noted
in the Directory on page 61. Notification must be in writing. Questions relating to shareholdings should also be
addressed to Computershare Investor Services Limited. For information about the group please contact the company
at the registered office by sending an email to info@wdtl.com or visit our website http:/www.wdtl.com.
Announcements to Shareholders
The company has established an email list of shareholders that want to receive announcements made by Wellington
Drive to the New Zealand Stock Exchange. Announcements are emailed to shareholders who wish to receive them
shortly after they are released. This will include the Annual Meeting addresses. If you want to be added to this listing,
please email info@wdtl.com and advise us of your email address. Your email details will be kept confidential.
Announcements are also posted on our website www.wdtl.com normally the day after they are released.

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ANNUAL REPORT 2016
Corporate Governance
The Board of Wellington Drive Technologies Limited is committed to acting with integrity and expects high standards
of behaviour and accountability from all its officers and staff.
Role of the Board
The Board’s primary objective is the enhancement of shareholder value by following appropriate ethical strategies,
and ensuring effective and innovative use of available Company resources. The Board is responsible for the
management, supervision, and direction of the Group. Day-to-day management of the Group is delegated to the
Chief Executive.
Compliance
The governance principles adopted by the Board are designed to meet best practice recommendations for listed
companies to the extent that it is appropriate to the size and nature of Wellington’s operations. The Board endorses
the overall principles embodied in the N.Z. Stock Exchange Corporate Governance Best Practice Code and believes
the company’s corporate governance principles, policies and practices do not materially differ from best practice
principles.
Board Meetings
The Board normally meets nine to eleven times each year for scheduled meetings. Additional meetings are held
where specific matters require attention between scheduled meetings. Board meetings are used to monitor,
challenge, develop, and fully understand business and operational issues.
Composition of the Board
The Constitution provides that there will be not less than three and not more than eight directors. N.Z. Stock
Exchange requirements are that at least two directors or one-third, are independent directors. The Board has four
directors, all of whom are independent. Profiles of Directors are given on Page 16.
Criteria for Board Membership
When a vacancy arises, the Board identifies candidates with a mix of capabilities and perspectives considered
necessary for the Board to carry out its responsibilities effectively. A director appointed by the Board must stand for
election at the next Annual Meeting. At each Annual Meeting one-third of directors must retire by rotation. Retiring
directors are eligible for re-election.
Non-executive Directors’ Remuneration
The fees payable to non-executive directors are determined by the Board within the aggregate amount approved by
shareholders. The Board considers the advice of independent remuneration consultants when setting remuneration
levels. The current directors’ fee pool limit is $200,000 which was approved by the shareholders at the 14 November
2006 annual meeting of shareholders.
Details of the remuneration paid to directors are disclosed on Page 54 in the Annual Report.
Board Committees
The Board has established four committees to guide and assist the Board with overseeing certain aspects of
corporate governance. These committees are the Audit Committee, the Technology and Innovation Committee, the
Executive Appointment and Remuneration Committee and the Risk Committee. Each sub-committee is empowered
to seek any information it requires from employees in pursuing its duties and to obtain independent legal or other
professional advice. The Company has not established a nomination committee, believing these matters are best
dealt with by the full Board.
Audit Committee
The Audit Committee operates under a charter approved by the Board and is accountable to the Board for:
overseeing the quality and integrity of external financial reporting including the accuracy, completeness and timeliness

59
ANNUAL REPORT 2016
of financial statements; the appropriateness of accounting policies, areas of judgement, compliance with accounting
standards, stock exchange and legal requirements; and the business’s relationship with, and the independence of,
the external auditor.
The committee also approves any non-audit work carried out by the Company’s auditor and ensures that the lead
partner in the audit firm is rotated every five years.
The committee is composed of three non-executive directors, all of whom are independent.
The current members are Tony Nowell (Chairman), Lisbeth Jacobs and John McMahon.
Risk Committee
The Risk Committee operates under a charter approved by the Board and is accountable to the Board for the
maintenance of an effective business risk management framework including credit, liquidity, market, insurance,
operational, regulatory and reputational risks.
The current members are Tony Nowell (Interim Chairman) and Gottfried Pausch.
Executive Appointment and Remuneration Committee
The Executive Appointment and Remuneration Committee operates under a charter approved by the Board and
is accountable to the Board for: the remuneration and appointment of the senior executive team; management
succession planning; reviewing and approving compensation arrangements; establishing employee incentive
schemes; and the remuneration of the Board. The committee also advises on proposals for significant company-
wide remuneration policies and programmes. In carrying out this role, the sub-committee operates independently of
senior management of the Company, and obtains independent advice on the appropriateness of the remuneration
packages.
The current members are Gottfried Pausch (Chairman), Tony Nowell and John McMahon.
Technology & Innovation Committee
The Technology & Innovation Committee operates under a charter approved by the Board and is accountable to
the Board for overseeing and providing counsel on overall strategy, direction and effectiveness of technology and
innovation activities.
The current members are Lisbeth Jacobs (Chairwoman) and Gottfried Pausch.
Health and Safety
Wellington is committed to maintaining a safe and healthy workplace and believes all accidents are preventable.
To achieve this company has a Health and Safety Committee that meets monthly and reports to the Board. The
Committee is made up of a mix of senior management and staff from key operational areas. The Committee strives
to: maintain and continually improve our Health and Safety systems; proactively identify hazards and take all steps
to eliminate or mitigate these; consult and actively promote participation in Health and Safety matters throughout the
Company.
Trading in shares
Wellington is committed to transparency and fairness in dealing with all of its stakeholders and to ensuring adherence
to all applicable laws and regulations.
Wellington has a detailed insider trading policy applying to all directors and employees. No director or employee
may use confidential unpublished price sensitive information in his or her position to engage in securities trading for
personal benefit or to provide benefit to any third party. Short term trading in Wellington shares and buying or selling
(while in possession of unpublished price-sensitive information) is strictly prohibited.
All directors and employees must obtain consent to trade in securities prior to trading. All members of the Board
need to consent to the application. Once these consents have been received the Chairman of the Wellington Board
or (where the Chairman is unavailable) the Chairman of the Board’s Audit Committee, will approve or decline the
application. The Company monitors trading and reports any share movements to the Board at every meeting.

60
ANNUAL REPORT 2016
Relationship with the Independent Auditor
The Company has adopted a policy to ensure that audit independence is maintained, both in fact and appearance,
such that Wellington’s external financial reporting is viewed as being reliable and credible. The policy covers the
following areas:
• The external auditor must remain independent of the Company at all times and comply with the New Zealand
Institute of Chartered Accountants’ (NZICA) Code of Ethics;
• The external auditor must monitor its independence and report to the Board that it has remained independent;
• Guidelines in relation to the provision of non-audit services by the external auditor in order that the provision of
such services does not impair the external auditor’s independence or objectivity; and
• The audit firm may be permitted to provide non-audit services that are not considered to be in conflict with the
preservation of the independence of the auditor subject to the approval of the Audit Committee.
The Audit Committee must approve significant permissible non-audit work assignments that are awarded to an
external auditor.
Diversity Disclosure
In accordance with Listing Rule 10.5.5(j) the Company makes the following diversity disclosures:
31 December 2016MaleFemaleTotal
All directors314
75%25%100%
Officers8-8
100%-100%
31 December 2015
All directors415
80%20%100%
Officers10-10
100%-100%
Officers (or key management personnel) comprise the directors, the Chief Executive Officer (CEO) and all the senior
executives who report directly to the CEO. For the purposes of the above table, directors are disclosed separately to
officers. The Company does not currently have a formal diversity policy.

61
ANNUAL REPORT 2016
Directors
Tony Nowell, Chairman
Dr Lisbeth Jacobs
John McMahon
Gottfried Pausch
Senior Staff
Greg Allen, Chief Executive Officer
Steven Hodgson, Senior Vice President Commercial
David Howell, Chief Technical Officer
Howard Milliner, Chief Financial Officer
Marc Tinsel, Head of Manufacturing
Peter Barnes, Global Quality Leader
Ali Karahasanoğlu, Sales Director, Europe / Eurasia
Erick Layseca-Flores, Business Development
Manager, Americas
Clayton Thomas, Sales & Marketing Director, Asia /
Pacific
Gerardo Gonzalez, VP Intelligent Systems
Business Unit
Ron Jackson, Secretary
Phone/Fax
Ph: 64-9-477 4500
Fax: 64-9-479 5540
Internet
Website: www.wdtl.com
Email: info@wdtl.com
Address
21 Arrenway Drive
Rosedale, Auckland 0632, New Zealand
PO Box 302-533, North Harbour
Auckland 0751, New Zealand
Registered Office
21 Arrenway Drive
Rosedale, Auckland 0632, New Zealand
Auditor
PricewaterhouseCoopers
188 Quay Street, Auckland 1142, New Zealand
Banker
Bank of New Zealand
Share Registry
Computershare Investor Services Ltd,
Private Bag 92119, Auckland 1142
New Zealand
Directory

www.sussexdesign.co.nz
Annual Report 2016
www.wdtl.com
WT8856