Contents
Our mission, strategy, activities and outlook
Our business model
Key financial results
From the Chairman and Managing Director
Our board of directors
Our executive team
Orchard development
Orchard management
Processing - Almond division
Processing - Sales division
Sales and marketing
Environment, community and people
Statistical summary
Financial report contents
Directors’ report
Auditors’ independence declaration
Corporate governance statement
Directors’ declaration
Independent auditor’s report
ASX additional information
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2 Select Harvests Annual Report 2008
Our mission
is to continue to develop and expand our business, generating sustainable earnings
growth and delivering increased shareholder value.
Our strategy
is to develop a fully-integrated agri-food company via ongoing diversification and
expansion of our income streams, leveraging our core strengths – almond growing
and knowledge of edible nuts and their markets – to develop sustained earnings
growth and reduced volatility from agricultural risk.
Our activities
include operating our own orchards, managing orchards for investors, marketing
almonds in domestic and export markets, and processing and marketing an extensive
range of nuts and associated health food products to all market sectors. We have
developed over 36,000 acres of new almond orchards over the last 10 years positioning
us as a major global player.
Our outlook
Shareholder
Information
World demand for almonds continues to match production increases. Revenues will
increase in coming years as orchards mature and we recommence new development
activity. The recent consolidation of the operations of our food division will reduce
overheads and provide a focus on sales growth and cost control as we work to rebuild
the profit contribution from the division.
Annual General Meeting
2008/2009 Calendar
The annual general meeting will be held
on Wednesday, 5 November 2008, at the
RACV Club, 501 Bourke Street, Melbourne,
commencing at 2:00 pm. A separate
notice of meeting has been posted
to all shareholders.
Feb
Announcement of interim results
Apr
Payment of interim dividend
Aug
Announcement of preliminary
full year results
Sept Annual report to shareholders
Oct
Payment of final dividend
Oct
Annual general meeting
Select Harvests Annual Report 2008
1
Our business model
OPERATING EBIT
SELECT HARVESTS
2007: $44.2M
2008: $32.3M
ORCHARD DEVELOPMENT
NURSERY
ORCHARD ESTABLISHMENT
EBIT
2007: $5.1M
2008: $2.7M
INVESTOR ORCHARDS EBIT
2007: $16.1M
2008: $18.7M
ACRES: 35,296
ORCHARD MANAGEMENT
ALMOND GROWING
HARVESTING
COMPANY OWNED
ORCHIDS EBIT
2007: $11.6M
2008: $2.8M
ACRES: 3,368
EBIT
2007: $4.0M
2008: $5.3M
2008 CROP:
15,000 tonnes
EBIT
2007: $1.7M
2008: $2.1M
PROCESSING
ALMOND
PROCESSING
VALUE-ADDED
PROCESSING
SALES AND MARKETING
ALMOND POOL
SALES
VALUE-ADDED
PRODUCT SALES
EBIT
2007:$5.7M
2008: $0.7M
2008 revenue: $123M
2 Select Harvests Annual Report 2008
Key fi nancial results
“Revenues will increase
in the coming years as
orchards mature and
we recommence new
almond developments”.
John Bird,
Managing Director
Key fi nancial results
A $’000’s
YEAR ENDED 30 JUNE
2008
YEAR ENDED 30 JUNE
2007
% INCREASE
(DECREASE)
Sales revenue (A$’000’s)
224,655
229,498
(2.1)%
EBIT
- Management services
- Almond orchards
- Temporary water costs
Almond division
Food division
Operating EBIT
Corporate costs
EBIT - before restructuring
Food division restructuring costs
EBIT
Net profit after tax
26,661
5,860
(3,007)
29,514
2,770
32,284
(3,320)
28,964
(1,845)
27,119
18,130
25,260
11,567
-
36,827
7,422
44,249
(3,700)
40,549
-
40,549
28,098
5.5%
(49.3)%
-
(19.9)%
(62.7)%
(27.0)%
(10.3)%
(28.6)%
-
(33.1)%
(35.5)%
ORDINARY DIVIDEND PER SHARE
EARNINGS PER SHARE
+8%
+26%
+62%
-21%
CENTS
60
50
40
30
+41%
20
+37%
10
0
+6%
+18%
+42%
-34%
+28%
+23%
CENTS
70
60
50
40
30
20
10
0
2003
2004
2005
2006
2007
2008
2003
2004
2005
2006
2007
2008
Select Harvests Annual Report 2008 3
From the Chairman and
Managing Director
Our outlook: Key growth areas
INCREASE IN MANAGEMENT SERVICES REVENUE
AS ORCHARDS MATURE AND CROPS INCREASE
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
2008
2009
2010
2011
2012
2013
2014
2015
(Estimated fee revenue based on current plantings)
INCREASE IN COMPANY TONNAGES AS NEW
ORCHARDS MATURE
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
4 Select Harvests Annual Report 2008
“We have progressed
a number of initiatives
during the year aimed
at improved performance
and future growth”.
Curt Leonard,
Chairman
The year in review
The company faced a number of challenges during the year which
have impacted performance. We have put strategies in place
to address these challenges and have progressed a number of
initiatives aimed at improved performance and future growth.
Key issues and outcomes for the year
• Water restrictions, higher farming costs and a strong
Australian dollar impacted results
• 2008 almond crop up 25% using 20% less water and
reduced farm inputs
• Tree health and productive capacity maintained
• New almond processing facility established to cater
for future crop increases
• Approval received to establish a new almond
development in Western Australia in 2009
• Completion of decommissioning of Brisbane plant and
consolidation of Food Division operations at a single site.
Water management
Water is one of our most important resources and we have
taken a number of actions to address increased costs and supply
constraints from the River Murray system.
Supply management
Water restrictions look set to continue for 2008/2009 and our
orchards are again operating on a reduced water plan. The
purchase of additional permanent water licenses and carrying
over water entitlements from last year will allow company
orchards to operate at 50% allocations in 2008/09. Investor
Orchards have put similar arrangements in place.
Water usage
Last year we commenced a program to reduce annual water
applications by 20% over a three year period while maintaining
crop yields. To this end we adopted a number of new technologies
and commenced a range of irrigation trials aimed at more
efficient and lower water use. The successful implementation
of a reduced water strategy for the 2008 crop has verified and
enhanced our research and we continue to invest in and focus on
improving irrigation efficiency.
Alternative water source
In recent years as part of a diversification
strategy we have investigated the
suitability of alternative water sources for
almond growing. As a result of this work
we have recently received approval for an
almond project in Western Australia which
will commence in 2009.
New Almond Developments
New almond developments have been the
key plank of the company’s growth strategy.
Over the last ten years we have developed
36,600 acres of new almond orchards.
This has consolidated our position as a
major global player and has allowed us
to develop a substantial management
services business. Australia remains a world
competitive almond grower and increasing
world consumption continues to provide
growth opportunities. We are committed
to the development and management of
new almond orchards in the future.
We will establish our first orchards in
Western Australia in 2009 and are planning
additional developments over the next few
years. In our view water supply from the
Murray Darling Basin will stabilise over
the next few years delivering more
certainty of supply which in turn will
provide new development opportunities.
We are confident that almonds are an
attractive long term investment for
both corporate and private investors.
The availability of MIS structure for future
projects is subject to an upcoming court
ruling, the result of which may require
a restructure of investment products.
We will continue to support our existing
partners to develop and manage new
projects and at the same time develop
alternative investment structures.
Food Division
Our Food Division remains an important
component of our almond sales and
distribution business. The recent
consolidation of operations will reduce
overheads and provide a focus on
cost control.
Range rationalisation is continuing with
a focus on almond sales. This will position
the division to effectively market increased
volumes in the future.
Debt Levels
Debt levels increased during the year as
a result of investments in the new almond
processing facility, permanent water
licenses and share buyback. Following
completion of the processing plant on-
going capital requirements for existing
operations will be modest. Our plan
is to develop Western Australian projects
on behalf of outside investors but we
may require short term finance during
the development stage and are currently
looking at options to achieve this.
Outlook
World demand for almonds continues to
match production increases. USA growers
are facing similar water and cost pressures
as Australian growers and new orchard
development has stalled. As a result we
expect a plateauing of supply in coming
years which, together with increased
costs in both USA and Australia, has the
potential to apply upward price pressure.
Almond returns have been impacted by
an Australian dollar trading at 20 year
highs however a recent correction has the
Australian dollar trading at lower levels.
Our orchards have retained health and
productive capacity through the drought
conditions and have entered the blossom
period with large bud populations setting
the base for a good 2009 crop. Water
supply remains tight and we have put
short and long term strategies in place to
manage this. Revenues will increase in the
coming years as orchards mature and we
recommence new almond developments.
The recent consolidation of our food
division will reduce overheads and provide
a focus on sales growth and cost control
as we work to rebuild the profit
contribution from the division.
As always we thank our directors and
staff for their efforts in a challenging
environment and the communities in
which we operate for their support.
Chairman 1996 to 2008
On behalf of our Board, shareholders and
staff, we thank Max Fremder for his vision,
drive and commitment in guiding Select
Harvests through a period of sustained
business development. During his tenure
as Chairman the company has led the
expansion of the Australian almond
industry becoming a major global player
and annual revenues have grown from
$12 million to over $220 million.
J C Leonard, Chairman
John Bird, Managing Director
Select Harvests Annual Report 2008 5
Our board of directors
J C LEONARD
B.Mktng & Bus. Admin, MBA
Chairman
J BIRD
Managing Director
G F DAN O’BRIEN
B.Sc, B.VMS, MBA
Non-Executive Director
Became the CEO of Select Harvests
Limited in January 1998. Has had many
years’ experience in the food industry and
international trade. Formerly Managing
Director of Jorgenson Waring Foods.
Appointed Managing Director and joined
the Board in September 2001. Member of
the Nomination Committee.
Joined the Board on 21 July 2004. Has
held senior management positions with
the Mars group of companies in Australia
including General Manager of Mars
Confectionery, Managing Director of Uncle
Ben’s, and Managing Director of Mars
Australia and New Zealand. In addition,
he has served as President, Asia Pacific of
all Mars businesses, and a Director of the
Managing Board of Mars Incorporated
global business. Is a Director of Patties
Foods Limited. Member of the Audit
and Risk Committee, and Nomination
Committee. Since the end of the financial
year, was elected Chairman of the Board,
effective 15 August 2008, and became a
member of the Remuneration Committee.
R M HERRON
FCA & FAICD
Non-Executive Director
Joined the Board on 27 January
2005. A Chartered Accountant, Mr
Herron retired as a Senior Partner of
PriceWaterhouseCoopers in December
2002. He was a member of the Coopers
& Lybrand (now PricewaterhouseCoopers)
Board of Partners where he was National
Deputy Chairman and was the
Melbourne office Managing Partner
for six years. He also served on several
international committees within Coopers
& Lybrand. He is a Non-Executive
Director of GUD Holdings Ltd, Heemskirk
Consolidated Ltd, Royal Automobile Club
Of Victoria (RACV) Ltd and a major industry
superannuation fund. Chairman of the
Audit and Risk Committee, and member of
the Nomination Committee.
Joined the Board on 29 March 2004.
Dan is the principal of Dromoland Capital,
a private equity group, non-executive
director of Thomas & Coffey Limited, and
is also the Chairman of Hexima Limited.
Mr O’Brien has significant commercial
experience having held CEO positions for
BIL Australia Limited, Mattel Asia Pacific,
and The King Island Company. He holds
an MBA, having graduated with distinction
from Harvard Business School and is a
qualified veterinary surgeon. Member of
the Audit and Risk Committee, Chairman
of the Remuneration Committee, and
member of the Nomination Committee.
Mr O’Brien was a director of SPC Ardmona
Limited between 9 January 2002 and 4
March 2005, and a director of Coates Hire
Limited between 15 September 2003 and
9 January 2008.
M A FREMDER
Non Executive Director
Joined the board in March 1996 and from
that time was Chairman of The Board
until retiring from this position on 15
August, 2008. Formerly a director of IAMA
Limited, and founder of Nufarm, one of
Australia’s largest chemical manufacturers
for the rural industry. Mr Fremder also
was a Non-Executive Director of Tassal
Limited between 3 October 2003 and 18
March 2005. Member of the Remuneration
Committee and Chairman of the
Nomination Committee.
6 Select Harvests Annual Report 2008
Our executive team
TIM MILLEN
Dip Hort (Distinction)
Horticultural Manager
PETER ROSS
Operations Manager Almond Division
KIM MARTIN
B. Bus ( Accounting)
Operations Manager Food Division
Joined Select Harvests in 1996. Tim has
over 18 years’ experience in horticulture.
He has held senior horticultural positions
in operations management, as well as
holding the roles of Technical Officer and
Horticulturist. Prior to commencing with
Select Harvests, Tim was Orchard Manager
for an Australian and New Zealand Nashi,
Stonefruit and Pipfruit operation.
Joined Select Harvests in 1999. Peter
held the position of Plant and then Project
Manager for the processing area of the
Almond Division before being appointed
to his current role in July of this year. Prior
to commencing with Select Harvests, Peter
ran his own maintenance and fabrication
business servicing agriculture, mining and
heavy industry.
Joined Select Harvests in 2007. Kim has
spent the majority of her career with Mars
Confectionery and Masterfoods, part of Mars
Inc. She started her career as an accountant
before moving to manufacturing. In
the last 10 years, Kim has held various
senior manufacturing and supply chain
management roles. Prior to joining Mars,
Kim worked with PriceWaterhouseCoopers
in the Audit division.
LAURENCE VAN DRIEL
Trading Manager
Joined Select Harvests in 2000. Laurence
has over 20 years’ experience in trading
edible nuts and dried fruits. He has a
comprehensive knowledge of international
trade and deep insights into the trading
cultures of the various countries in which
these commodities are sold. He has held
senior purchasing and sales management
positions with internationally recognised
companies.
MICHAEL BARTHOLOMEW
B.Bus & Comm (Marketing)
Sales & Marketing Manager
Joined Select Harvests in 2008. Michael
has 30 years’ experience in the FMCG
industry, having held senior sales and
management roles with Patties Foods,
Herbert Adams Bakeries, Cottees Foods,
Coca-Cola Amatil and Coles Myer.
CEO JOHN BIRD
PAUL CHAMBERS
Bsc Hons, ACA
Chief Financial Officer & Company Secretary
Joined Select Harvests in 2007. Paul is a
Chartered Accountant and has over 20
years’ experience in senior financial
management roles in Australian and
European organisations. Most recently,
he was CFO, Henkel ANZ and prior to that
he held corporate positions with the Fosters
Group. He has managed complex change,
acquisition and business integration projects.
HORTICULTURAL
MANAGER
TIM MILLEN
OPERATIONS MANAGER
ALMOND DIVISION
PETER ROSS
OPERATIONS MANAGER
FOOD DIVISION
KIM MARTIN
TRADING MANAGER
LAURENCE VAN DRIEL
SALES &
MARKETING MANAGER
MICHAEL BARTHOLOMEW
CFO & COMPANY
SECRETARY
PAUL CHAMBERS
Select Harvests Annual Report 2008 7
Orchard development
SELECT HARVESTS HAS
DEVELOPED 36,600 ACRES
OF NEW ALMOND ORCHARDS
OVER THE LAST 10 YEARS
CONSOLIDATING OUR POSITION
AS A MAJOR GLOBAL PLAYER
AND ONE OF THE LARGEST
GROWERS IN THE WORLD
Developments stalled in 2008 due
to uncertainty around water supply
for the Murray Darling Basin. A new
development in Western Australia in
2009 will recommence this program
and we expect to participate in further
expansion in WA in future years.
CUMULATIVE DEVELOPMENT
ANNUAL DEVELOPMENT
Water supply from the Murray Darling
Basin will stabilise over the next few
years delivering more certainty which
in turn will provide new development
opportunities.
Australia remains a world competitive
almond grower and increasing world
consumption continue to provide growth
opportunities.
Almond farming is highly mechanised
requiring scale and capital to maximize
efficiencies. The development of corporate
farming in recent years has provided this
investment and currently accounts for
over 70% of Australian orchards.
Almonds remain an attractive long
term investment and we are aiming to
undertake new orchard developments
on an annual basis.
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Our key activities
Tree supply
Orchard feasibility studies
Land acquisition
Orchard design
Irrigation installation
Land preparation
Tree planting
ORCHARD DEVELOPMENT (ACRES)
40000
30000
20000
10000
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
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OUR PROPOSED WESTERN AUSTRALIAN
ALMOND PROJECTS IN THE TWIN HILLS
AND DANDARGAN IRRIGATION DISTRICTS.
8 Select Harvests Annual Report 2008
Orchard management
Our key activities
Irrigation and nutrition
Pest and disease management
Tree care and pruning
Bee supply
Harvesting
Environmental management
Maintaining competitive
position
We are a competitive almond grower
with significant advantage in crop yield
and product quality, allowing us to
compete effectively in global markets.
Increased water costs are impacting
our competitive position.
We have set an objective to reduce
annual water applications by 20% over
a three year period while maintaining
yields. The trial work we have
undertaken in recent years on more
efficient and reduced water usage
has been invaluable for managing
current water restrictions. We have
increased our investment and focus
in this area and are currently running
a range of trials and collaborations
with partners including the Australian
almond industry, government, irrigation
suppliers and horticultural specialists.
THE MAJOR ACHIEVEMENT
FOR 2008 WAS TO DELIVER A
NORMAL CROP AND MAINTAIN
TREE HEALTH AND PRODUCTIVE
CAPACITY ON REDUCED WATER
AND FARM INPUTS
Select Harvests manages 38,300
acres of almond trees representing
60% of Australia’s acreage and is one
of the largest growers worldwide.
Approximately 90% of these orchards
are managed on behalf of external
investors and 10% are company
orchards. The majority of trees were
planted over the last seven years and
are in various stages of maturity. In
full production annual crops should
increase to around 50,000 tonnes.
Managing reduced water
allocations
Farm operations were confronted
with substantial water restrictions
and increased farm costs. A drought
management plan was adopted
reducing water applications by around
20%, and some farm inputs to partially
offset increased costs. The program
proved successful producing a crop of
15,000 tonnes which was within normal
yield expectations and as a result of
maturing trees was up 25% on the
previous year.
Our trees have maintained health
and productive capacity through the
reduced water program and carried
large bud populations into the recent
blossom period setting the base for a
good 2009 crop. In the short term water
supply remains a challenge and we are
again operating our orchards under
a drought management plan.
Select Harvests Annual Report 2008 9
Processing - Almond division
Activities
Select Harvests processes almonds
harvested from both company and
investor-owned orchards. Activities
include receipt and storage of field
product after harvest; removal of outer
hull and shell; sizing and grading; and
packing ready for shipment to domestic
or export customers or for further value
added processing by our food division.
New facility
To meet increased tonnages we
have recently completed a $32 million
investment in a new almond processing
facility. The facility has a high level of
automation which will significantly
improve efficiency, flexibility, product
quality and food safety management.
The facility incorporates all almond
processing activities on one site with
potential capacity of around 40,000
tonnes per annum. The site offers
the flexibility of further expansion to
accommodate future processing needs.
ALMOND TONNAGE
55,000
50,000
45,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
TOTAL TONNAGE
10 Select Harvests Annual Report 2008
Processing - Food division
Quality
The new almond facility will help drive
our continuous quality improvement
program. We have invested in
electronic sorting equipment to
improve the accuracy of our grading
process. In addition a pasteurization
process will eliminate microbiological
contamination and climate controlled
warehousing will ensure product
freshness and improved shelf life.
We have recently installed a chemical
testing laboratory to undertake quality
analysis prior to shipment.
Value added processing
Select Harvests undertakes a range
of value added processes to meet the
needs of our customers from food
manufacturers, distributors, retailers
and consumers.
Activities include blanching, roasting,
flavouring, cutting, blending, and
packaging to satisfy a number of retail
and industrial formats.
The food division operates in a
competitive market and made the
decision in early 2008 to decommission
our Brisbane facility and consolidate
operations on one site in Melbourne.
The project was completed within
expected costs and is forecasted to
deliver annual cost savings of around
$3.0 million per year. The focus of
the team is to continue to extract
operational efficiencies while delivering
an improved level of customer service.
Select Harvests Annual Report 2008 11
Sales and marketing
Almond Pool Management
ALMOND PRICE AUD/KG NPSSR 23/25
$14.00
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
3
9
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4
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5
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6
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6
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7
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EXCHANGE RATE AUD/USD
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
3
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0
-
B
E
F
8
0
-
G
U
A
ALMOND PRICE NPSSR 23/25 USD/lb
$4.50
$4.00
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$.50
$0.00
3
9
-
G
U
A
4
9
-
B
E
F
4
9
-
G
U
A
5
9
-
B
E
F
5
9
-
G
U
A
6
9
-
B
E
F
6
9
-
G
U
A
7
9
-
B
E
F
7
9
-
G
U
A
8
9
-
B
E
F
8
9
-
G
U
A
9
9
-
B
E
F
9
9
-
G
U
A
0
0
-
B
E
F
0
0
-
G
U
A
1
0
-
B
E
F
1
0
-
G
U
A
2
0
-
B
E
F
2
0
-
G
U
A
3
0
-
B
E
F
3
0
-
G
U
A
4
0
-
B
E
F
4
0
-
G
U
A
5
0
-
B
E
F
5
0
-
G
U
A
6
0
-
B
E
F
6
0
-
G
U
A
7
0
-
B
E
F
7
0
-
G
U
A
8
0
-
B
E
F
8
0
-
G
U
A
Increasing tonnages
Select Harvests’ 2008 crop of 15,000
tonnes reinforces our emergence as one
of the world’s leading almond growers
and marketers.
Our crop represents 57% of the
estimated Australian 2008 harvest
of 26,800 tonnes.
Our growing almond pool is driving
our export focus, with 60% of our crop
designated for international markets.
The fundamentals of the global almond
market remain strong, with international
almond pricing trading at the high end
of historic levels.
We absorbed the negative impact of
the Australian dollar, trading at 25 year
highs. There is a current correction in this
pricing which is providing some relief
and signals the potential for lower levels
in the longer term.
Expanding our markets
Consumption of almonds continues
to grow in both domestic and export
markets.
We continue to develop our
customer base and market spread to
accommodate future crops. Sales of
value added almond products remains
a key component of our domestic sales
program and we will look to expand this
activity to export markets in the future.
12 Select Harvests Annual Report 2008
Sales and marketing
USA ANNUAL PRODUCTION
2
8
9
1
3
8
9
1
4
8
9
1
5
8
9
1
6
8
9
1
7
8
9
1
8
8
9
1
9
8
9
1
0
9
9
1
1
9
9
1
2
9
9
1
3
9
9
1
4
9
9
1
5
9
9
1
6
9
9
1
7
9
9
1
8
9
9
1
9
9
9
1
0
0
0
2
1
0
0
2
2
0
0
2
3
0
0
2
4
0
0
2
5
0
0
2
6
0
0
2
7
0
0
2
8
0
0
2
CROP (MILLION lbs)
BEARING ACRES
KG/ACRE
USA PRODUCTION VS SHIPMENTS
Driving growth in almond
consumption
Communicating the health benefits
of eating almonds is a core component
of our marketing program. We leverage
two industry initiatives to achieve
this objective.
The Nuts for life program is primarily
focused on educating health
professionals, particularly General
Practitioners, in the key role nuts play
in a healthy daily diet.
The Almond Board of Australia Guilds
on this message by promoting our call
to action of eating a handful of almonds
everyday. Our consumer communications
highlight the taste, health and versatility
benefits of Australian almonds.
1,600.0
1,400.0
1,200.0
1,000.0
800.0
600.0
400.0
200.0
0.0
2,000.0
1,500.0
1,000.0
)
s
b
l
N
O
I
L
L
I
M
(
500.0
0.0
2
8
9
1
3
8
9
1
4
8
9
1
5
8
9
1
6
8
9
1
7
8
9
1
8
8
9
1
9
8
9
1
0
9
9
1
1
9
9
1
2
9
9
1
3
9
9
1
4
9
9
1
5
9
9
1
6
9
9
1
7
9
9
1
8
9
9
1
9
9
9
1
0
0
0
2
1
0
0
2
2
0
0
2
3
0
0
2
4
0
0
2
5
0
0
2
6
0
0
2
7
0
0
2
8
0
0
2
PRODUCTION
BEARING ACRES
SHIPMENTS
CARRY–IN
Outlook
The demand side of the global almond
market continues to grow, with the
increased USA crop in 2007 offset by
a commensurate increase in shipments.
The USA is forecasting an 8% increase in
supply for 2008. However a continuation
of current consumption growth will see
supply and demand remain in balance.
Sales and Marketing:
Value added product sales
The core focus of our sales and marketing
strategy is to further develop our
almond sales, both within Australia and
nd
internationally. Domestically, we will
leverage our existing retail position in our
n our
branded products as well as in our private
ivate
label supply relationships.
Select Harvests remains globally
competitive in our cost of production.
We compete against an industry in
California that is also experiencing
water and farm cost issues, to the
extent to which new developments
have stalled. It is expected that these
issues will cause supply growth to slow
or plateau in the future.
This will offer the potential for upward
pricing pressure.
One of the initiatives taken over the
past 12 months has been to undertake a
e a
rationalisation of our total range in order
rder
to focus on key products and brands.
The Lucky brand was successfully
repackaged, utilising stand-up edgeseal
eal
packaging that is both retailer and
consumer friendly. During 2008, the Lucky
Lucky
brand will be further enhanced through
gh
the use of resealable tabs, which will
provide greater consumer convenience.
ce
Select Harvests Annual Report 2008 13
Environment, community
and people
Our community
Select Harvests is strongly committed
to the Robinvale community. We
continue to support the Robinvale
Secondary College Chaplaincy service
that offers both staff and students with
a comprehensive counselling program.
We are also proud to support many
different Robinvale community and
sporting clubs and programs.
Our people
We have provided over 50 staff with the
opportunity to undertake a traineeship
in either irrigation or horticulture.
Courses are being delivered by the
Sunraysia Institute of TAFE and have
been designed to meet our training
needs. This year Rural Ambulance
Victoria trained over 70 staff
in Level III First Aid. This gives us the
highest concentration of Level III First
Aiders in any business in Victoria.
Our environment
Caring for our environment is an
integral part of orchard management
processes. Two key components of
this commitment to the environment
are water management and wildlife
management.
In terms of water management, Select
Harvests ensures that water is used
in the most efficient manner possible.
This involves maximizing the amount of
water used by the trees and minimizing
any wastage and any negative
environmental impacts. Our water
management processes also extends
to supporting efficient river flows. In
order to continue to improve our water
efficiency, we are continuing to invest in
significant research trials.
Our Wildlife Management Plan is also
very important, as we recognize the
imperative of ecological sustainability.
In this regard, we are active in developing
methods that preserve habitat for
native wildlife by incorporating wildlife
corridors linking feeding with breeding
grounds alongside our orchards, and
taking other measures to protect wildlife
and the environment. We are committed
to minimising harm and optimising
benefits to wildlife, within the goal of
producing sustainable commercial crops.
To this end, we are undertaking a
major research project with the Charles
Sturt University. This project is also
being supported by the Victorian, New
South Wales and South Australian
governments. The purpose of the
research is to understand how we can
maximise production and conservation
outcomes. This project will involve a
case study around the Regent Parrot.
The key objectives of the
project are to:
• Identify sustainable orchard
management practices that balance
the needs of commercial horticulture
and wildlife
• Assess and monitor current and future
populations of Regent Parrots
• Study the Regent Parrot’s behaviour
and food sources, evaluating methods
to minimise damage to the
almond crop
• Examine orchard layout to identify
if it is possible to change orchard
development in the future to reduce
crop damage by birds.
14 Select Harvests Annual Report 2008
Statistical summary
SELECT HARVESTS CONSOLIDATED RESULTS
FOR YEARS ENDED 30 JUNE
2008
2007
2006
2005
2004
2003
Total sales
224,655
229,498
217,866
173,864
127,381
80,994
Earnings before interest and tax
27,119
40,549
38,369
33,069
23,836
Operating profit before tax
Net profit after tax
Earnings per share (Basic)
Return on shareholders’ equity
Dividend per ordinary share
Special dividend per ordinary share
Dividend franking
Dividend payout ratio
Financial ratios
Net tangible assets per share
Net interest cover
Debt/equity ratio
Current asset ratio
Balance sheet data as at 30 June
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Reserves
Retained profits
Total shareholders’ equity
Other data as at 30 June
Fully paid shares
Number of shareholders
Select Harvests’ share price
- close
Market capitalization
$ ‘000 (except where indicated)
17,421
16,110
25,384
40,014
37,903
31,802
22,587
18,130
28,098
26,492
22,104
15,225
10,962
(cents)
(%)
(cents)
(cents)
(%)
(%)
(%)
(times)
(%)
(times)
46.7
19.3
45.0
-
100
96.4
1.41
15.6
54.0
0.87
71.0
29.4
57.0
-
100
80.0
1.57
75.8
1.7
1.32
67.1
26.1
53.0
10.0
100
80.0
1.83
82.3
1.3
1.82
56.9
25.1
42.0
-
100
75.4
1.52
26.2
1.0
1.52
40.0
19.2
26.0
-
100
65.7
1.35
19.1
10.2
1.70
31.3
18.3
18.5
-
100
62.8
1.08
13.3
15.4
1.61
77,014
70,983
72,455
58,832
32,486
25,077
118,934
89,170
79,421
78,676
74,469
60,672
195,948
160,153
151,876
137,508
106,955
85,749
88,162
53,680
39,905
38,757
19,077
15,581
13,715
10,969
10,490
10,656
8,610
10,162
101,877
64,649
50,395
49,413
27,687
25,743
94,071
95,504
101,481
88,095
79,268
60,006
44,375
41,953
52,665
46,925
43,940
36,206
11,235
11,273
12,691
13,766
38,461
42,278
36,125
27,404
14,191
21,137
9,458
14,342
94,071
95,504
101,481
88,095
79,268
60,006
(000)
39,009
38,739
39,708
39,069
38,525
35,455
3,319
2,953
3,369
2,999
2,413
2,054
($)
6.00
11.60
13.02
9.70
6.67
4.80
234,054
449,372
516,998
378,970
256,965
170,184
Select Harvests Annual Report 2008 15
Financial report contents
Directors’ report
Auditors independence declairation
Corporate governance statement
Income statements
Balance sheets
Statements of changes in equity
Cash fl ow statements
Notes to the fi nancial statements
1. Summary of significant accounting policies
2. Financial risk management
3. Critical accounting estimates and judgements
4. Revenue
5. Expenses
6.
7. Discontinued operations
8. Dividends paid or provided for on ordinary shares
9. Cash and cash equivalents
Income tax
10. Receivables (current)
11. Inventories (current)
12. Derivative financial instruments (current)
13. Receivables (non current)
14. Other financial assets (non current)
15. Property, plant and equipment
16. Deferred tax assets
17. Biological assets – almond trees
18. Intangibles
19. Trade and other payables (current)
20. Interest bearing liabilities (current)
21. Provisions (current)
22. Trade and other payables (non current)
23. Interest bearing liabilities (non current)
24. Deferred tax liabilities (non current)
25. Provisions (non current)
26. Contributed equity
27. Reserved and retained profits
28. Reconciliaton of the net profit after income tax to the
net cash flows from operating activities
29. Expenditure commitments
30. Events occuring after balance date
31. Earnings per share
32. Remuneration of directors and key management personnel
33. Remuneration of auditors
34. Related party disclosures
35. Segment information
36. Interest rate risk
37. Controlled entities
38. Employee benefits
39. Contingent liabilities
Directors’ declaration
Independent auditor’s report
ASX additional information
Corporate information
17
29
30
36
37
38
39
40
40
49
52
53
53
54
55
56
56
57
58
58
59
60
60
62
62
63
64
64
65
65
65
67
67
67
68
70
71
72
72
73
77
77
79
81
82
82
84
85
86
88
90
16 Select Harvests Annual Report 2008
Directors’ report
The directors present their report together with the financial report of Select Harvests Limited and
controlled entities (referred to hereafter as the “consolidated entity”) for the year ended 30 June 2008.
Directors
The qualifications, experience and special responsibilities of each person who has been a director of Select
Harvests Limited at any time during or since the end of the financial year is provided below, together with
details of the company secretary as at the year end. Directors were in office for this entire period unless
otherwise stated.
Names, qualifi cations, experience and special responsibilities
J C Leonard, B.Mktng & Bus. Admin, MBA (Chairman)
Joined the Board on 21 July 2004. Has held senior management positions with the Mars group of
companies in Australia including General Manager of Mars Confectionery, Managing Director of Uncle Ben’s,
and Managing Director of Mars Australia and New Zealand. In addition, he has served as President, Asia
Pacific of all Mars businesses, and a Director of the Managing Board of Mars Incorporated global business. Is
a Director of Patties Foods Limited. Member of the Audit and Risk Committee, and Nomination Committee.
Since the end of the financial year, was elected Chairman of the Board, effective 15 August 2008, and
became a member of the Remuneration Committee.
Interest in Shares and Options: 581,779 fully paid shares
M A Fremder (Non-Executive Director)
Joined the board in March 1996 and from that time was Chairman of The Board until retiring from this
position on 15 August, 2008. Formerly a director of IAMA Limited, and founder of Nufarm, one of Australia’s
largest chemical manufacturers for the rural industry. Mr Fremder also was a Non-Executive Director of
Tassal Limited between 3 October 2003 and 18 March 2005. Member of the Remuneration Committee and
Chairman of the Nomination Committee.
Interest in Shares and Options: 5,777,234 fully paid shares.
J Bird (Managing Director)
Became the CEO of Select Harvests Limited in January 1998. Has had many years’ experience in the food
industry and international trade. Formerly Managing Director of Jorgenson Waring Foods. Appointed
Managing Director and joined the Board in September 2001. Member of the Nomination Committee.
Interest in Shares and Options: 619,522 fully paid shares, 46,134 options expiring 31 October 2008 exercisable
at $11.05 each.
G F Dan O’Brien, BSc, B VMS, MBA (Non-Executive Director)
Joined the Board on 29 March 2004. Dan is the principal of Dromoland Capital, a private equity group, non-
executive director of Thomas & Coffey Limited, and is also the Chairman of Hexima Limited. Mr O’Brien has
significant commercial experience having held CEO positions for BIL Australia Limited, Mattel Asia Pacific,
and The King Island Company. He holds an MBA, having graduated with distinction from Harvard Business
School and is a qualified veterinary surgeon. Member of the Audit and Risk Committee, Chairman of the
Remuneration Committee, and member of the Nomination Committee. Mr O’Brien was a director of SPC
Ardmona Limited between 9 January 2002 and 4 March 2005, and a director of Coates Hire Limited between
15 September 2003 and 9 January 2008.
Interest in Shares and Options: 54,769 fully paid shares.
R M Herron, FCA & FAICD (Non-Executive Director)
Joined the Board on 27 January 2005. A Chartered Accountant, Mr Herron retired as a Senior Partner
of PricewaterhouseCoopers in December 2002. He was a member of the Coopers & Lybrand (now
PricewaterhouseCoopers) Board of Partners where he was National Deputy Chairman and was the
Select Harvests Annual Report 2008 17
Directors’ report
Melbourne office Managing Partner for six years. He also served on several international committees within
Coopers & Lybrand. He is a Non-Executive Director of GUD Holdings Ltd, Heemskirk Consolidated Ltd, Royal
Automobile Club Of Victoria (RACV) Ltd and a major industry superannuation fund. Chairman of the Audit and
Risk Committee, and member of the Nomination Committee.
Interest in Shares and Options: 8,772 fully paid shares.
C G (Sandy) Clark, B.Comm, Dip.Ag.Econ, FAICD (Non Executive Director)
Joined the board in January 1998. Is currently Chairman, Aviva Australia Holdings Limited; Chairman, The Myer
Family Office Limited; Director, Southern Cross Broadcasting Australia Ltd; Director, The Myer Foundation;
Trustee, The William Buckland Foundation; Chairman of Council, Melbourne Grammar School; and a director
of a number of private companies. Appointed Chairman of Brown Brothers Holdings from 14 June 2007.
Former Deputy Chairman of Legal Practice Board of Victoria and former Director of CGNU Australia Holdings
Limited. Member of the Audit and Risk Committee and the Nomination Committee, and Chairman of the
Remuneration Committee.
Interest in Shares and Options: 23,892 fully paid shares.
Resigned as a Director on 31 January, 2008.
P Chambers, BSc Hons, ACA (Chief Financial Officer and Company Secretary)
Joined Select Harvests as Chief Financial Officer and Company Secretary in September 2007. He is a Chartered
Accountant and has over 20 years’ experience in senior financial management roles in Australian and
European organisations, including corporate positions with the Fosters Group. Most recently, was CFO of
Henkel Australia and New Zealand.
Interest in shares and options: 0 fully paid shares.
Corporate information
Nature of operations and principal activities
The principal activities during the year of entities within the consolidated entity were:
• Processing, packaging, marketing and distribution of edible nuts, dried fruits, seeds, and a range of natural
health foods, and
• The growing, processing and sale of almonds to the food industry from company owned almond
orchards, the provision of management services to external owners of almond orchards, including orchard
development, tree supply, farm management, land rental and irrigation infrastructure, and the marketing
and selling of almonds on behalf of external investors.
There were no other significant changes in the nature of the activities of the consolidated entity in the
financial year. There were no other significant changes in the nature of the activities of the consolidated entity
in the previous financial year.
Employees
The consolidated entity employed 337 full time employees as at 30 June 2008 (2007: 340 employees).
Review and results of operations
Profit attributable to the members of Select Harvests Limited for the year ended 30 June 2008 was $18.1
million compared to $28.1 million in 2007. 2008 includes before tax costs of $3.0 million for temporary water
purchases and $1.8 million for restructuring costs.
For additional information refer to the announcement lodged with the ASX and the report before Appendix 4E.
18
Select Harvests Annual Report 2008
Directors’ report
Signifi cant changes in the state of affairs
No significant changes in the state of affairs of the consolidated entity occurred during the financial year.
Signifi cant events after the balance date
On 20 August 2008, the Directors declared a fully franked final dividend of 23 cents per ordinary share to be
paid on 1 October 2008 to shareholders registered at 5.00 pm on 10 September 2008. On 15 August, 2008,
Mr Max Fremder retired as Chairman of The Board of Directors, succeeded by Mr Curt Leonard, formerly the
Deputy Chairman. No other matters or circumstances have arisen since the end of the financial year which
significantly affected or may significantly affect the operations of the consolidated entity, the results of
those operations, or the state of affairs of the consolidated entity in future financial years.
Likely developments and expected results
For comments on the outlook period refer to the announcement lodged with the ASX and the report before
Appendix 4E.
Environmental regulation and performance
The consolidated entity’s operations are subject to environmental regulations under laws of the
Commonwealth or of a State or Territory. Details of the consolidated entity’s performance in relation to such
environmental regulations follows:
The consolidated entity holds licences issued by the Environmental Protection Authority which specify
limits for discharges to the environment which are the result of the consolidated entity’s operations. These
licences regulate the management of discharge to the air and stormwater run off associated with the
operations. There have been no significant known breaches of the consolidated entity’s licence conditions.
The company takes its environmental responsibilities seriously, has a good record in environmental
management to date, and adheres to environmental plans that preserve the habitat of native species.
Almond developments have had a positive environmental impact. The change in land use and the increase
in food source have seen a rejuvenation of remnant native vegetation and an increase in the wildlife
population, in particular bird species. The company has committed funding to the monitoring of Regent
parrot populations around our orchards and the effectiveness of protecting native vegetation corridors in
preserving wildlife.
Remuneration report
A. Principles used to determine the nature and amount of remuneration
Remuneration levels are set to attract and retain appropriately qualified and experienced directors and
senior executives. The Remuneration Committee may obtain independent advice on the appropriateness
of remuneration packages, given trends in the marketplace. Remuneration packages include a mix of fixed
remuneration, performance based remuneration and equity based remuneration. Non-executive directors
receive fees and do not receive options or bonus payments. Further details regarding components of
directors’ and executive remuneration are provided in Note 32 to the financial statements.
(i) Short-term incentives
Executive directors and senior executives may receive short term incentives based on achievement of
specific business plans and performance indicators, which include financial and operational targets relevant
to performance at the consolidated entity level, divisional level, or functional level, as applicable, for the
financial year. The Remuneration Committee is responsible for assessing whether the KPIs are met based on
detailed reports on performance prepared by management.
Select Harvests Annual Report 2008 19
Directors’ report
(ii) Long-term incentives
In addition, the company offers executive directors and senior executives the opportunity to participate
in the long-term incentive scheme involving the issue of options to the employee under the executive
share option scheme. The executive share option scheme provides for the offer of a parcel of options
to participating employees on an annual basis, with a three-year expiry period, exercisable at the
market price set at the time the offer was made. The options are granted annually in three tranches
upon achievement of a 10% increase in EPS. The Remuneration Committee is responsible for assessing
whether the targets are met based on reports prepared by management.
B. Details of remuneration
Details of the remuneration of the directors and the key management personnel as defined in AASB
124 Related Party Disclosures of Select Harvests Limited and the consolidated entity are set out in the
following tables.
The key management personnel of the consolidated entity includes the directors as listed above and the
following executive officers, which also includes the 5 highest paid executives of the consolidated entity:
NAME
K Bush
POSITION
EMPLOYER
Group Manager Sales & Marketing (resigned 20 May 2008)
Select Harvests Food Products Pty Ltd
M Bartholomew Group Manager Sales & Marketing (commenced 20 May 2008)
Select Harvests Food Products Pty Ltd
K Martin
Group Operations Manager
Select Harvests Limited
T Millen
Group Horticultural & Farm Operations Manager
Kyndalyn Park Pty Ltd
R Palmaricciotti
Chief Financial Officer & Company Secretary
(resigned 9 September 2007 )
Select Harvests Limited
L Van Driel
Group Trading Manager
Select Harvests Food Products Pty Ltd
P Chambers
Chief Financial Officer & Company Secretary
(commenced 9 September 2007 )
Select Harvests Limited
The nature and amount of each major element of the remuneration of each director of the Company
and each of the key management personnel of the company and the consolidated entity for the
financial year is detailed below.
REMUNERATION OF DIRECTORS OF SELECT HARVESTS LIMITED
2008
ANNUAL REMUNERATION
LONG TERM REMUNERATION
BASE FEE
$
SHORT TERM
INCENTIVES
$
NON CASH
BENEFITS
$
SUPER
CONTRIBUTIONS
$
LONG
SERVICE
LEAVE
ACCRUED
$
OPTIONS GRANTED
NUMBER
VALUE
$
TOTAL
$
109,000
29,167
50,000
50,000
50,000
-
-
-
-
-
-
-
-
-
-
-
2,625
4,500
4,500
4,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
109,000
31,792
54,500
54,500
54,500
532,457
98,000
36,737
56,538
23,334
56,867
72,799
819,865
Non Executive
M A Fremder
C G Clark*
G F Dan O’Brien
J C Leonard
R M Herron
Executive
J Bird
20
Select Harvests Annual Report 2008
Directors’ report
2007
ANNUAL REMUNERATION
LONG TERM REMUNERATION
BASE FEE
$
SHORT TERM
INCENTIVES
$
NON CASH
BENEFITS
$
SUPER
CONTRIBUTIONS
$
LONG
SERVICE
LEAVE
ACCRUED
$
OPTIONS GRANTED
NUMBER
VALUE
$
TOTAL
$
Non Executive
M A Fremder
C G Clark*
G F Dan O’Brien
J C Leonard
R M Herron
Executive
J Bird
103,000
50,000
50,000
50,000
50,000
-
-
-
-
-
-
-
-
-
-
6,000
4,500
4,500
4,500
4,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
109,000
54,500
54,500
54,500
54,500
474,319
267,462
36,737
42,792
18,000
86,067
101,999
941,309
* Resigned from the role of Director 31 January 2008.
REMUNERATION OF THE KEY MANAGEMENT PERSONNEL OF THE COMPANY AND THE CONSOLIDATED ENTITY
2008
ANNUAL REMUNERATION
LONG TERM REMUNERATION
BASE FEE
$
SHORT TERM
INCENTIVES
$
NON CASH
BENEFITS
$
SUPER
CONTRIBUTIONS
$
K Bush
(Resigned 20.5.08)
M Bartholomew
(Commenced 20.5.08)
K Martin
L Van Driel
T Millen
243,431
20,000
26,833
-
233,945
12,250
-
-
-
181,696
30,000
5,172
142,468
20,000
45,694
R Palmaricciotti
(Resigned 9.9.07)
P Chambers
(Commenced 9.9.07)
57,949
198,777
-
-
6,053
33,670
2,415
22,158
18,745
14,541
4,337
-
17,890
LONG
SERVICE
LEAVE
ACCRUED
$
OPTIONS GRANTED
NUMBER
VALUE
$
-
-
-
-
-
-
-
-
-
TOTAL
$
297,101
29,248
268,353
5,322
4,491
8,767
5,533
12,045
252,980
8,037
235,231
-
-
-
-
-
-
68,339
216,667
Select Harvests Annual Report 2008 21
Directors’ report
2007
ANNUAL REMUNERATION
LONG TERM REMUNERATION
SHORT TERM
INCENTIVES
$
NON CASH
BENEFITS
$
SUPER
CONTRIBUTIONS
$
BASE FEE
$
173,538
104,893
-
-
-
-
148,095
50,000
20,689
130,117
20,000
44,712
107,986
-
2,806
134,908
55,337
18,830
8,563
LONG
SERVICE
LEAVE
ACCRUED
$
-
-
5,000
5,000
-
-
OPTIONS GRANTED
NUMBER
VALUE
$
-
-
-
-
TOTAL
$
200,538
114,333
12,667
7,333
-
15,945
252,883
9,837
221,562
-
120,511
26,200
30,810
248,448
27,000
9,440
13,154
11,896
9,719
K Bush
(Commenced 25.9.06)
K Martin
(Commenced 16.1.07)
L Van Driel
T Millen
R Palmaricciotti
(Commenced 14.12.06)
M Mattia
(Resigned 21.12.06)
Notes
The terms ‘director’ and ‘officer’ have been treated as mutually exclusive for the purposes of this disclosure.
The elements of remuneration have been determined on the basis of the cost to the company and the
consolidated entity.
Options granted as part of remuneration have been valued using the Black-Scholes option pricing model,
which takes account of factors such as the option exercise price, the current level and volatility of the
underlying share price and the time to maturity of the option.
Key management personnel are those directly accountable and responsible for the operational management
and strategic direction of the Company and the consolidated entity.
C. Service arrangements
Service arrangements between the consolidated entity and executive directors and key management
personnel are on a continuing basis and include, in certain cases, relevant notice periods. There are no specific
termination benefits applicable to the service arrangements.
J Bird, Managing Director
• Term of Agreement – on-going agreement
• Base salary, inclusive of superannuation for the year ended 30 June 2008 of $610,500.
M Bartholomew, Group Manager Sales and Marketing
• Term of Agreement – on-going agreement, with 3 month notice period
• Base salary, inclusive of superannuation for the year ended 30 June 2008 of $250,000.
K Martin, Group Operations Manager
• Term of Agreement – on-going agreement, with 3 month notice
• Base salary, inclusive of superannuation for the year ended 30 June 2008 of $255,000.
T Millen, Group Horticultural and Farm Operations Manager
• Term of Agreement – on-going agreement
• Base salary, inclusive of superannuation for the year ended 30 June 2008 of $200,000.
22
Select Harvests Annual Report 2008
Directors’ report
P Chambers, Chief Financial Officer & Company Secretary
• Term of Agreement – on-going agreement, with 3 month notice period
• Base salary, inclusive of superannuation for the year ended 30 June 2008 of $260,000.
L Van Driel, Group Trading Manager
• Term of Agreement – on-going agreement
• Base salary, inclusive of superannuation for the year ended 30 June 2008 of $200,000.
D. Share-based compensation
(i) Executive share option scheme
The current executive share option scheme provides for the offer of a parcel of options to participating
employees on an annual basis, with a three year expiry period, exercisable at the market price at the time
the offer was made.
Individual parcels of options offered to participating employees are based on a percentage of fixed
remuneration. The options are granted annually in three tranches on achievement of a 10% increase in EPS.
Options granted as remuneration are subject to continuing service with the consolidated entity. Options
granted as remuneration are valued at grant date in accordance with AASB 2 Share-based Payments. No
options previously granted as remuneration have lapsed during the year.
The assessed fair value at offer date is determined using a Black-Scholes option pricing model that takes
into account the exercise price, the term of the option, the impact of dilution, the share price at offer date
and expected price volatility of the underlying share, the expected dividend yield and the risk free interest
rate for the term of the option.
The model inputs for options offered during the year ended 30 June 2008 included:
a) options are granted for no consideration, have a three year life, and one third of the options offered vest
in each year and are exercisable from the date of vesting to the expiry date
b) exercise price: $9.74 (2007 – $13.13)
c) offer date: 21 September 2007 (2007 – 22 September 2006)
d) expiry date: 28 October 2010 (2007 – 31 October 2009)
e) Volume weighted average share price at offer date: $9.43 (2007 – $13.09)
f) expected price volatility of the company’s shares: 28% (2007 – 49.4%)
g) expected dividend yield: 5.8% (2007 – 4.05%)
h) risk free interest rate: 6.19% (2007 – 5.89%)
THE FOLLOWING TABLE IS A SUMMARY OF THE EXECUTIVE SHARE OPTION SCHEMES CURRENTLY IN PLACE
2005 Offer
2006 Offer
2007 Offer
Total
I
G
N
T
A
P
C
T
R
A
P
I
I
S
E
E
Y
O
L
P
M
E
4
4
7
I
N
O
T
A
U
L
A
V
I
N
O
T
P
O
$1.72
$3.57
$1.48
I
E
C
R
P
E
S
I
C
R
E
X
E
I
S
N
O
T
P
O
F
O
.
O
N
D
E
R
E
F
F
O
I
S
N
O
T
P
O
F
O
O
N
.
I
G
N
T
A
P
I
I
C
T
R
A
P
O
T
D
E
R
E
F
F
O
S
E
E
Y
O
L
P
M
E
E
T
A
D
Y
R
I
P
X
E
6
0
T
S
U
G
U
A
D
E
T
N
A
R
G
7
0
T
S
U
G
U
A
D
E
T
N
A
R
G
$11.05
153,300
101,200
31/10/08
33,732
33,734
$13.13
68,095
57,798
31/10/09
$9.74
238,429
238,429
28/10/10
-
-
-
-
R
A
E
Y
G
N
R
U
D
I
D
E
T
I
E
F
R
O
F
-
-
E
C
N
A
L
A
B
33,734
57,798
27,872
210,557
459,824
397,427
33,732
33,734
27,872
302,089
Select Harvests Annual Report 2008 23
Directors’ report
(ii) Options granted
During or since the end of the financial year, the Company granted options over unissued ordinary shares to the executive director
and the following key management personnel of the Company as part of their remuneration.
NUMBER OF OPTIONS
GRANTED 2008
NUMBER OF OPTIONS
GRANTED 2007
Director
J Bird
Key management personnel
M Mattia (departed 21 December 2006)
W Turner (departed 13 July 2006)
L Van Driel
T Millen
R Tanti (departed 21 July 2006)
(iii) Shares issued on exercise of options
56,867
-
-
8,767
5,533
-
86,067
26,200
18,600
12,667
7,333
13,867
Details of ordinary shares in the company provided as a result of the exercise of remuneration options to each director of the
consolidated entity and other key management personnel are set out below.
NUMBER OF SHARES ISSUED ON
EXERCISE OF OPTIONS 2008
NUMBER OF SHARES ISSUED ON
EXERCISE OF OPTIONS 2007
Director
J Bird
Key management personnel
M Mattia (departed 21 December 2006)
W Turner (departed 13 July 2006)
L Van Driel
T Millen
R Tanti (departed 21 July 2006)
101,400
-
-
12,300
6,000
-
87,600
26,200
18,600
3,900
5,400
21,267
The amounts paid per ordinary share by each director and other key management personnel on the exercise of options at the date
of exercise were as follows.
NUMBER OF SHARES
AMOUNT PAID ON EACH SHARE
119,700
$7.78
There were no amounts unpaid on the shares issued.
E. Additional information
(i) Principles used to determine the nature and amount of remuneration: relationship between remuneration and company
performance
The overall level of executive reward takes into account the performance of the consolidated entity over a number of years, with
greater emphasis given to the current year. Over the past 5 years, the consolidated entity’s profit from ordinary activities after
income tax has grown at an average rate of 15% per annum and shareholder return has grown at an average rate of 12%. The EPS
has grown at an average rate of 12% over the last 5 years.
24
Select Harvests Annual Report 2008
Directors’ report
(ii) Details of remuneration: cash bonuses and options
For each cash bonus and grant of options included above, the percentage of the available bonus or grant that was paid, or that
vested, in the financial year, and the percentage that was forfeited because the person did not meet the service and performance
criteria is set out below. No part of the bonuses is payable in future years. No options will vest if the conditions are not satisfied
hence the minimum value of the option yet to vest is nil. The maximum value of the options yet to vest has been calculated based
on the option price.
CASH BONUS
OPTIONS
FINANCIAL
YEARS IN
WHICH
OPTIONS MAY
VEST
MINIMUM
TOTAL VALUE
OF GRANT YET
TO VEST ($)
MAXIMUM
TOTAL VALUE
OF GRANT YET
TO VEST ($)
VESTED %
FORFEITED %
PAID %
FORFEITED %
J Bird
100
L Van Driel
100
T Millen
100
K Martin
100
P Chambers
-
K Bush
100
-
-
-
-
-
-
YEAR
GRANTED
2005
2006
2007
66
-
-
2005
66
2006
2007
-
-
2005
66
2006
2007
2007
2007
2007
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100%
2008
2009
2008
2009
2008
2009
2010
2008
2009
2008
2009
2008
2009
2010
2008
2009
2008
2009
2008
2009
2010
2008
2009
2010
2008
2009
2010
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
39,674
131,251
152,625
8,027
27,000
30,000
6,077
27,838
30,000
38,251
39,000
-
Select Harvests Annual Report 2008 25
Directors’ report
(iii) Share based compensation: options
NAME
REMUNERATION
CONSISTING OF
OPTIONS
A
Directors
VALUE GRANTED
VALUE EXERCISED
VALUE LAPSED
TOTAL VALUE
B
C
J Bird
25%
$72,799
$99,372
Key Management Personnel
T Millen
L Van Driel
15%
15%
$8,037
$12,045
$5,880
$12,054
D
-
-
-
$79,350
$12,154
$16,054
A - The percentage of the value of remuneration consisting of options, based on the value at grant date set out in column B
B – The value at grant date calculated in accordance with AASB2 Share-based payments of options granted during the year as part
of remuneration.
C – The value at exercise date of options that were granted as part of remuneration and were exercised during the year.
D – The value at lapsed date of options that were granted as part of remuneration and that lapsed during the year.
(iv) Loans to directors and executives
Information on loans to directors and executives (if any), are set out in Note 34.
(v) Share options granted to directors and the most highly remunerated officers
Options over unissued ordinary shares of Select Harvests Limited granted and not exercised during or since the end of the
financial year to the five most highly remunerated officers of the company as part of their remuneration were as follows:
NAME
J Bird
T Millen
L Van Driel
OPTIONS GRANTED & NOT EXERCISED
46,134
7,066
9,334
The options were granted under the consolidated entity’s executive share option scheme on 24 August 2005. Details of options
granted to the directors and the five most highly remunerated officers of the consolidated entity can be found above. No options
have been granted since the end of the financial year.
(vi) Unissued ordinary shares under option
At the date of this report unissued ordinary shares of the company under option are:
OFFER
2005
NUMBER OF SHARES
EXERCISE PRICE
EXPIRY DATE
67,468
$11.05
31 October 2008
All options expire on the earlier of their expiry date or termination of the employee’s employment.
Current option holders do not have any right, by virtue of the option, to participate in any share issue of the company or any
related body corporate.
26
Select Harvests Annual Report 2008
Directors’ report
Dividends – Select Harvests Limited
DIVIDENDS
Final dividends proposed and not recognised as a liability
(payable on 1 October, 2008):
CENTS
2008
$
• on ordinary shares
23.0
8,972,053
Fully Franked Dividends paid in the year (paid on 3 April, 2007):
Interim for the year
• on ordinary shares
Final for 2007 shown as recommended in the 2007 report
(payable on 1 October, 2007):
• on ordinary shares
22.0
8,555,751
17,527,804
35.0
13,558,666
Indemnifi cation and insurance of directors and offi cers
During the year the Company has paid a premium of $20,647 in respect to an insurance contract to indemnify directors and
officers against liabilities that may arise from their position as directors and officers of the Company and its controlled entities.
Officers indemnified include the Company Secretary, all directors, and executive officers participating in the management of the
Company and its controlled entities.
Directors’ meetings
The number of meetings of directors (including meetings of committees of directors) held during the financial year and the
number of meetings attended by each director were as follows:
DIRECTORS’ MEETINGS
AUDIT AND RISK
REMUNERATION
NOMINATION
NUMBER
ELIGIBLE TO
ATTEND
NUMBER
ATTENDED
NUMBER
ELIGIBLE TO
ATTEND
NUMBER
ATTENDED
NUMBER
ELIGIBLE TO
ATTEND
NUMBER
ATTENDED
NUMBER
ELIGIBLE TO
ATTEND
NUMBER
ATTENDED
MEETINGS OF COMMITTEES
M A Fremder
J Bird
C G Clark
G F Dan O’Brien
J C Leonard
R M Herron
12
12
7
12
12
12
12
12
6
9
11
12
-
-
2
4
4
4
-
-
1
4
4
4
1
-
1
1
-
-
1
-
1
1
-
-
1
1
-
1
1
1
1
1
-
1
1
1
Select Harvests Annual Report 2008 27
Directors’ report
Committee membership
During or since the end of the financial year, the company had an Audit and Risk Committee, a Remuneration Committee, and a
Nomination Committee comprising members of the Board of Directors.
Members acting on the committees of the Board during or since the end of the financial year were:
Remuneration
Audit and Risk
R M Herron (Chairman)
GF Dan O’Brien (Chairman)
GF Dan O’ Brien MA Fremder
J C Leonard
C G Clark *
CG Clark*
JC Leonard
*CG Clark resigned as a Director on 31 January 2008
Nomination
MA Fremder (Chairman)
J Bird
GF Dan O’Brien
RM Herron
JC Leonard
Directors’ interests in contracts
Directors’ interest in contracts are disclosed in Note 34 to the financial statements
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 14.
Non-audit services
Non-Audit services are approved by resolution of the Audit and Risk Committee and approval is provided in writing to the board
of directors. Non-audit services provided by the auditors of the consolidated entity during the year are detailed in Note 33. The
directors are satisfied that the provision of the non-audit services during the year by the auditor is compatible with the general
standard of independence for auditors imposed by Corporations Act 2001 as non-audit services are reviewed by the Audit & Risk
Committee to ensure they do not impact the impartiality and objectivity of the auditor.
Rounding
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where rounding is
applicable) under the option available to the company under ASIC Class Order 98/100. The Company is an entity to which the Class
Order applies.
Proceedings on behalf of the company
There are no material legal proceedings in place on behalf of the company as at the date of this report.
Corporate governance
In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Select Harvests
Limited support and have adhered to the ASX principles of corporate governance. The Company’s corporate governance statement
is contained in detail in the corporate governance section of this annual report.
This report is made in accordance with a resolution of the directors.
J C Leonard
Chairman
Melbourne, 20 August 2008
28
Select Harvests Annual Report 2008
Select Harvests Annual Report 2008 29
Corporate governance statement
This statement outlines the key corporate governance practices of the consolidated entity which considers
the ASX Principles of Good Corporate Governance and Best Practice Recommendations issued by the ASX
Corporate Governance Council. During the reporting period, the company has been compliant with the ASX
Guidelines.
These principles are:
Principle 1– Lay solid foundations for management and oversight
Principle 2 – Structure the Board to add value
Principle 3 – Promote ethical and responsible decision making
Principle 4 – Safeguard integrity in financial reporting
Principle 5 – Make timely and balanced disclosure
Principle 6 – Respect the right of shareholders
Principle 7 – Recognise and manage risk
Principle 8 – Encourage enhanced performance
Principle 9 – Remunerate fairly and responsibly
Principle 10 – Recognise the legitimate interests of shareholders
The statements set out below are referred to the above Principles as applicable.
Board of Directors and its Committees
The role of the Board and Board Processes set out below are with reference to Principle 1, lay solid foundations
for management and oversight.
Role of the Board
The Board of Directors of Select Harvests Limited is responsible for the overall corporate governance of the
consolidated entity. The Board guides and monitors the business and affairs of Select Harvests Limited on
behalf of the shareholders by whom they are elected and to whom they are accountable. Details of the
Board’s charter are located on the company’s website.
The Board seeks to identify the expectations of the shareholders, as well as other regulatory and ethical
expectations and obligations. In addition, the Board is responsible for ensuring that management’s objectives
and activities are aligned with the expectations and risks identified by the Board and ensuring arrangements
are in place to adequately manage those risks.
To ensure that the Board is well equipped to carry out its responsibilities it has established guidelines for the
nomination and selection of Directors and for the operation of the Board.
The Board has delegated responsibility for the operation and administration of the company to the Managing
Director and the executive management team. The Board ensures that this team is appropriately qualified
and experienced to carry out its responsibilities and has in place procedures to assess the performance of the
Managing Director and the executive management team.
Board processes
To assist in the execution of its responsibilities, the Board has established a Remuneration Committee,
and an Audit and Risk Committee. The Board also performs, as part of its function, the role of Nomination
Committee. These Committees have written charters, which are reviewed on a regular basis and are
located on the company’s website. The Board has also established a framework for the management of the
consolidated entity.
30
Select Harvests Annual Report 2008
Corporate governance statement
The full Board holds twelve scheduled meetings each year, plus any additional meetings at such other
times as may be necessary to address any specific matters that may arise.
The agenda for meetings is prepared and includes the Managing Director’s report, financial reports,
business segment reports, strategic matters, governance and compliance. Submissions are circulated
in advance. Executives are involved in Board discussions where appropriate, and Directors have other
opportunities, including visits to operations, for contact with a wider group of employees.
Set out below, Director Education, Independent Advice and Access to Company Information,
Composition of The Board and the Nomination Committee, make reference to Principle 2 – Structure the
Board to add value.
Director Education
The consolidated entity has a process to educate new Directors about the nature of the business,
current issues, the corporate strategy, and the expectations of the consolidated entity concerning
performance of Directors. Directors also have the opportunity to visit the facilities of the consolidated
entity and to meet with management to gain a better understanding of business operations.
Directors are able to access continuing education opportunities to update and enhance their skills and
knowledge.
Independent professional advice and access to company information
Each Director has the right of access to all relevant company information and to the Company’s
executives and, subject to prior consultation with the Chairman, may seek independent professional
advice at the consolidated entity’s expense.
Composition of the Board
The names of the Directors of the company in office at the date of this report are set out in the
Directors’ report.
The composition of the Board is determined in accordance with the following ASX principles:
• The Board should comprise at least four Directors;
• The Board should maintain a majority of independent non-executive Directors;
• The Chairperson must be a non-executive Director; and
• The Board should comprise Directors with an appropriate range of qualifications, skills and
experience.
The Board assesses the independence of each Director in light of interests known to the Board, as
well as those disclosed by each Director. In accordance with the ASX Corporate Governance Council’s
recommendations, the Board wishes to outline the following:
• A non – executive Director of the Company, Mr M A Fremder, is a substantial shareholder, having a
14.8% shareholding at 30 June 2008.
• A non – executive Director of the Company, Mr M A Fremder, owns (directly or indirectly) almond
orchards totalling 2,053 acres in respect to which the consolidated entity provides orchard
management services under contract at market rates.
• The Chairman of the Company, Mr J C Leonard, owns (directly or indirectly) almond orchards
totalling 1,753 acres in respect to which the consolidated entity provides orchard management
services under contract at market rates
• A non-executive Director of the Company, Mr Dan O’Brien, acquired from Select Harvests, via an
associated entity, $89,344 worth of Almond Hull suitable for livestock feed. This was purchased at
market prices.
Select Harvests Annual Report 2008 31
Corporate governance statement
Nomination Committee
The Board of Directors, as one of its important functions, performs the role of Nomination Committee.
The Board’s role as Nomination Committee is to ensure that the composition of the Board of Directors is
appropriate for the purpose of fulfilling its responsibilities to shareholders.
The duties and responsibilities of the Board in its role as Nomination Committee are as follows:
• To access and develop the necessary and desirable competencies of Board members;
• To develop and review Board succession plans;
• To evaluate the performance of the Board;
• To recommend to the Board, the appointment and removal of Directors; and
• Where a vacancy exists, to determine the selection criteria based on the skills deemed necessary and to
identify potential candidates with advice from external consultants.
The Chairman of the Board evaluates the performance of each Board member annually in the last quarter of
each financial year. The Chairman of the Audit Committee reviews the performance of the Chairman of the
Board in the same period. The performance of each Board member is reviewed against the Board charter and
any specific objectives agreed and set by the Board for the consolidated entity.
The Nomination Committee meets annually unless otherwise required. The Committee met once during the
financial year and the Committee members’ attendance record is disclosed in the table of Directors’ meetings.
The members of the Nomination Committee are disclosed in the Directors’ Report.
Further details of the Nomination Committee’s charter are available on the Company’s website.
The statements set out below in relation to Remuneration, the Remuneration Committee and Remuneration
Policies are with reference to Principle 8, Encourage enhanced performance, and Principle 9, Remunerate fairly
and responsibly.
Remuneration
Remuneration Committee
The Remuneration Committee reviews and makes recommendations to the Board on remuneration packages
and policies applicable to the Managing Director, senior executives and the Directors themselves. It evaluates
the performance of the Managing Director and is also responsible for share option schemes, incentive
performance packages, superannuation entitlements and fringe benefits policies. Remuneration levels are
reviewed annually and the Remuneration Committee may obtain independent advice on the appropriateness
of remuneration packages, given trends in the marketplace.
The members of the Remuneration Committee are disclosed in the Directors’ Report.
The Managing Director is invited to Remuneration Committee meetings as required to discuss senior
executives’ performance and remuneration packages.
The Remuneration Committee meets once a year or as required. The Committee met once during the financial
year and the Committee members’ attendance record is disclosed in the table of Directors’ meetings.
Further details of the Remuneration Committee’s charter are available on the company’s website.
Remuneration Policies
Remuneration levels are set to attract and retain appropriately qualified and experienced Directors and
senior executives. The Remuneration Committee may obtain independent advice on the appropriateness
of remuneration packages, given trends in the marketplace. Remuneration packages include a mix of fixed
remuneration, performance based remuneration, and equity based remuneration.
32
Select Harvests Annual Report 2008
Corporate governance statement
Executive Directors and senior executives may receive short term incentives based on achievement
of specific business plans and performance indicators, which include financial and operational
targets relevant to performance at the consolidated entity level, divisional level, or functional level, as
applicable, for the financial year. In addition, the consolidated entity offers executive Directors and
senior executives participation in the long-term incentive scheme involving the issue of options to the
employee under the executive share option scheme. The executive share option scheme provides for
the offer of a parcel of options to participating employees on an annual basis, with a three-year expiry
period, exercisable at the market price set at the time the offer was made. The options are granted
annually in three tranches on achievement of the performance hurdles.
Non-executive Directors do not receive any performance related remuneration.
Set out below are statements in relation to the Audit and Risk Committee and Risk Management, with
reference to Principle 7, Recognise and Manage Risk, and Principle 4, Safeguard integrity in Financial
Reporting.
Audit and Risk Committee
The Audit and Risk Committee has a documented charter, approved by the Board. All members of the
Committee are non executive Directors with a majority being independent, and the Chairman of the
Audit and Risk Committee is not the Chairman of the Board of Directors.
The members of the Audit and Risk Committee during the financial year are disclosed in the Directors’
Report.
The external auditors, the Managing Director and Chief Financial Officer are invited to Audit and Risk
Committee meetings at the discretion of the Committee, and the external auditor also meets with the
Audit Committee during the year without management being present. The Committee met four times
during the year and the Committee members’ attendance record is disclosed in the table of Directors’
meetings.
The Managing Director and the Chief Financial Officer have provided a statement in writing to the
Board that the consolidated entity’s financial reports for the year ended 30 June 2008 present a true
and fair view, in all material respects, of the consolidated entity’s financial condition and operational
results and are in accordance with the relevant accounting standards. This statement is required
annually.
Further details of the Audit and Risk Committee’s charter are available on the Company’s website.
The duties and responsibilities of the Audit and Risk Committee include:
• Recommending to the Board the appointment of the external auditors;
• Recommending to the Board the fee payable to the external auditors;
• Reviewing the audit plan and performance of the external auditors;
• Determining that no management restrictions are being placed upon the external auditors;
• Evaluating the adequacy and effectiveness of the reporting and accounting controls of the company
through active communication with operating management and the external auditors;
• Reviewing all financial reports to shareholders and/or the public prior to their release;
• Evaluating systems of internal control;
• Monitoring the standard of corporate conduct in areas such as arms-length dealings and likely
conflicts of interest;
• Requiring reports from management and the external auditors on any significant regulatory,
accounting or reporting development to assess potential financial reporting interest;
Select Harvests Annual Report 2008 33
Corporate governance statement
• Reviewing and approving all significant company accounting policy changes;
• Reviewing the company’s taxation position;
• Reviewing the annual financial statements with the Chief Financial Officer and the external
auditors, and recommending acceptance to the Board;
• Evaluating the adequacy and effectiveness of the company’s risk management policies and
procedures including insurance; and
• Directing any special projects or investigations deemed necessary by the Board or by the Committee.
The Audit and Risk Committee is committed to ensuring that it carries out its functions in an effective
manner. Accordingly, it reviews its charter at least once in each financial year.
Risk management
The Board oversees the establishment, implementation, and review of a system of risk management
within the consolidated entity. The consolidated entity’s areas of focus in respect of risk management
practices include, but are not limited to, environment, occupational health and safety, property, financial
reporting and internal control.
The Board is responsible for the overall risk management and internal control framework, but
recognises that no cost-effective risk management and internal control system will preclude all errors
and irregularities. The Board has the following procedures in place to monitor performance and to
identify areas of concern:
• Strategic Planning – The Board reviews and approves the strategic plan that encompasses the
consolidated entity’s strategy, designed to meet the stakeholders’ needs and manage business
risk. The strategic plan is dynamic and the Board is actively involved in developing and approving
initiatives and strategies designed to ensure the continued growth and success of the consolidated
entity;
• Financial reporting – Monthly actual results are reported against budgets approved by the Directors
and revised forecasts prepared during the year;
• Functional Reporting – Key areas subject to regular or periodical reporting to the Board include, but
are not limited to, operational, treasury (including foreign exchange), environmental, occupational
health & safety, insurance, and legal matters;
• Continuous disclosure – A process is in place to identify matters that may have a material effect on
the price of the Company’s securities and to notify them to the ASX; and
•
Investment appraisal – Guidelines for capital expenditure include annual budgets, appraisal and
review procedures, due diligence requirements where businesses are being acquired or divested.
The Managing Director and Chief Financial Officer have provided a statement in writing to the Board
that the declaration made in respect of the consolidated entity’s financial reports is founded on a
system of risk management and internal compliance and control which reflects the policies adopted
to date by the Board, and that the consolidated entity’s risk management and internal control and
compliance system is operating effectively in all material respects based on the criteria for effective
internal control established by the Board.
The statements set out below on Ethical standards, Conflict of Interest and Dealings in Company Shares
are with reference to Principle 3, Promote ethical and responsible decision making, and Principle 10,
Recognise the legitimate interests of stakeholders.
34
Select Harvests Annual Report 2008
Corporate governance statement
Ethical Standards
All Directors, managers and employees are expected to act with the utmost integrity and objectivity, striving
at all times to enhance the reputation and performance of the consolidated entity. The consolidated entity’s
code of conduct includes the following:
Conflict of interest
Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict
with those of the Company. Should a situation arise where the Board believes that a material conflict
exists, the Director concerned shall not receive the relevant Board papers and will not be present at the
meeting when the item is considered. Details of Director related entity transactions with the Company and
consolidated entity are set out in the Notes to the financial statements.
Dealings in company shares
Directors and senior management are prohibited from dealing in Company shares except within a four
week trading window that commences 48 hours after the release of the consolidated entity’s results at year
end and half year on the basis that they are not in possession of any price sensitive information. Directors
must advise the ASX of any transactions conducted by them in shares in the Company.
The statement below in relation to Communication with Shareholders, is with reference to Principle 5 –
Make timely and balanced disclosures, and Principle 6 – Respect the rights of shareholders.
Communication with shareholders
The Board of Directors aims to ensure that shareholders are informed of all major developments affecting
the consolidated entity’s state of affairs. Information is communicated to shareholders as follows:
• The annual report is distributed to all shareholders (unless a shareholder has specifically requested not
to receive the document), including relevant information about the operations of the consolidated entity
during the year, changes in the state of affairs and details of future developments;
• The half yearly report contains summarised financial information and a review of the operations of the
consolidated entity during the period. The half year audited financial report is lodged with the Australian
Securities and Investments Commission and the ASX, and sent to any shareholder who requests it;
• The consolidated entity has nominated the Company Secretary to ensure compliance with the
consolidated entity’s continuous disclosure requirements, and overseeing and co-ordinating disclosure of
information to the ASX;
•
Information is posted on the consolidated entity’s website immediately after ASX confirms an
announcement has been made to ensure that the information is made available to the widest audience.
The consolidated entity’s website is www.selectharvests.com.au;
• The Board encourages full participation of shareholders at the Annual General Meeting to ensure a
high level of accountability and identification with the consolidated entity’s strategy and goals. It is the
policy of the consolidated entity and the policy of the auditor for the lead engagement partner to be
present at the Annual General Meeting to answer any questions about the conduct of the audit and the
preparation and content of the auditor’s report; and
• Occasional letters from the Chairman and Managing Director may be utilised to provide shareholders
with key matters of interest.
Select Harvests Annual Report 2008 35
Income statements
FOR THE YEAR ENDED 30 JUNE 2008
NOTES
CONSOLIDATED
PARENT ENTITY
Revenue
Sales of goods and services
Other revenue
Total revenue
Other income (expenses)
Almond stock fair value adjustment
Almond tree fair value adjustment
Total other income (expenses)
Expenses
Cost of sales
Temporary water costs
Total cost of sales
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Finance costs
Restructure costs
Other expenses
PROFIT BEFORE INCOME TAX
Income Tax Expense
PROFIT FROM CONTINUING OPERATIONS
PROFIT FOR THE YEAR
PROFIT ATTRIBUTABLE TO MEMBERS OF SELECT
HARVESTS LIMITED
Earnings per share for profit from continuing
operations attributable to the ordinary equity holders
of the company:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Earnings per share for profit attributable to the
ordinary equity holders of the company:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
2008
$’000
2007
$’000
2008
$’000
2007
$’000
4
4
224,655
229,498
155
265
224,810
229,763
-
27,344
27,344
-
27,801
27,801
92
500
592
1,071
92
1,163
5
(174,866)
(173,549)
(3,007)
-
(177,873)
(173,549)
(6,593)
(1,414)
(2,060)
(3,439)
(1,891)
(1,845)
(6,049)
(706)
(2,048)
(3,300)
(800)
-
(4,903)
(4,460)
25,384
(7,254)
18,130
18,130
40,014
(11,916)
28,098
28,098
5
6
-
-
-
-
-
-
-
-
-
(2,453)
(1,806)
-
(1,067)
22,018
(404)
21,614
21,614
-
-
-
-
-
-
-
-
-
(2,742)
(2,043)
-
(968)
22,048
34
22,082
22,082
27(c)
18,130
28,098
21,614
22,082
31
31
31
31
46.7
46.7
46.7
46.7
71.0
70.8
71.0
70.8
The above income statements should be read in conjunction with the accompanying Notes.
36
Select Harvests Annual Report 2008
Balance sheets
AS AT 30 JUNE 2008
NOTES
CONSOLIDATED
PARENT ENTITY
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
Current tax receivables
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Receivables
Other financial assets
Property, plant and equipment
Deferred tax assets
Biological assets – Almond Trees
Intangible assets
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Interest bearing liabilities
Derivative financial instruments
Current tax liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON CURRENT LIABILITIES
Trade and other payables
Interest bearing liabilities
Deferred tax liabilities
Provisions
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained profits
TOTAL EQUITY
2008
$’000
2007
$’000
4,054
43,101
29,229
69
561
6,924
33,459
30,169
431
-
2008
$’000
3,946
1,127
-
69
561
2007
$’000
6,529
705
-
431
-
77,014
70,983
5,703
7,665
-
-
73,135
624
6,039
39,136
118,934
195,948
34,847
50,787
82
-
2,446
88,162
-
-
13,020
695
13,715
101,877
94,071
44,375
11,235
38,461
94,071
-
-
47,754
692
5,998
34,726
89,170
160,153
46,406
1,399
627
2,766
2,482
126,352
9,607
287
577
-
-
136,823
142,526
1,405
50,609
82
-
319
53,680
52,415
51,063
9,607
276
555
-
-
61,501
69,166
437
1,302
627
2,766
306
5,438
-
237
10,178
554
10,969
64,649
95,504
41,953
11,273
42,278
95,504
41,261
16,904
-
-
126
41,387
93,802
48,724
44,375
3,590
759
48,724
58
-
93
17,055
22,493
46,673
41,953
3,628
1,092
46,673
9
10
11
12
13
14
15
16
17
18
19
20
12
21
22
23
24
25
26
27
27
The above balance sheets should be read in conjunction with the accompanying Notes.
Select Harvests Annual Report 2008 37
Statements of changes in equity
FOR THE YEAR ENDED 30 JUNE 2008
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
Total equity at the beginning of financial year
95,504
101,481
46,673
57,920
Changes in fair value of cash flow hedges net of tax
27(a)
Net income (expense) recognised directly in equity
128
128
(1,395)
(1,395)
128
128
(649)
(649)
Profit for the year
27(c)
18,130
28,098
21,614
22,082
Total recognised income and expense for the year
18,258
26,703
21,742
21,433
Transactions with equity holders in their capacity as
equity holders:
- Contributions of equity, net of transaction costs
- Employee share options
- Dividends provided for or paid
- Dividends refunded
- Share buy back
Total equity at the end of financial year
26(b)
26(b),27
8 (a)
27 ( c)
26 (b)
3,695
931
3,531
1,265
3,695
931
3,531
1,265
(22,156)
(21,945)
(22,156)
(21,945)
209
-
209
-
(2,370)
(15,531)
(2,370)
(15,531)
(19,691)
(32,680)
(19,691)
(32,680)
94,071
95,504
48,724
46,673
The above statements of changes in equity should be read in conjunction with the accompanying Notes.
38
Select Harvests Annual Report 2008
Cash fl ow statements
FOR THE YEAR ENDED 30 JUNE 2008
NOTES
CONSOLIDATED
PARENT ENTITY
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of goods and
services tax)
Payments to suppliers and employees (inclusive of
goods and services tax)
Interest received
Interest paid
Income tax paid
Net Cash Inflow/(Outflow) From Operating Activities
28
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Payments for property, plant and equipment
Payments for other non-current assets
Net Cash Inflow/(Outflow) From Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issues of ordinary shares
Share Buy Back
Repayments of borrowings
2008
$’000
2007
$’000
2008
$’000
2007
$’000
252,731
251,512
-
-
(241,360)
(210,519)
(22,625)
11,371
155
(1,806)
(7,725)
1,995
37
(29,953)
(4,409)
(34,325)
40,993
(22,625)
265
(800)
155
(1,806)
28,196
28,196
218
(682)
(10,667)
(7,725)
(10,667)
29,791
(32,001)
17,065
135
(10,787)
(2,460)
(13,112)
-
(140)
-
(140)
-
(121)
-
(121)
931
1,100
931
1,100
(2,370)
(15,531)
(2,370)
(15,531)
(114)
(117)
(16)
5
Dividend payment on ordinary shares, net of DRP
(18,253)
(18,213)
(18,253)
(18,213)
Net Cash Inflow/(outflow) from financing activities
(19,806)
(32,761)
(19,708)
(32,639)
Net increase/(decrease) in cash and cash equivalents
(52,136)
(16,082)
(51,849)
(15,695)
Cash and cash equivalents at the beginning of the
financial year
Cash and cash equivalents at the end of the financial
year
5,639
21,721
5,244
20,939
28(a)
(46,497)
5,639
(46,605)
5,244
The above cash flow statements should be read in conjunction with the accompanying Notes.
Select Harvests Annual Report 2008 39
Notes to the fi nancial statements
1. Summary of signifi cant accounting policies
The principal accounting policies adopted in the preparation of the financial report are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated. The financial
report includes separate financial statements for Select Harvests Limited as an individual entity and the
consolidated entity consisting of Select Harvests Limited and its subsidiaries.
(a) Basis of preparation
This general purpose financial report has been prepared in accordance with Australian equivalents to
International Financial Reporting Standards (AIFRS), other authoritative pronouncements of the Australian
Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.
Compliance with IFRS
Australian Accounting Standards include AIFRS. Compliance with AIFRS ensures that the consolidated
financial statements and Notes of Select Harvests Limited comply with International Financial Reporting
Standards (IFRS).
Historical cost convention
These financial statements have been prepared under historical cost convention, as modified by the
revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative
instruments) at fair value through profit and loss, and certain classes of property, plant and equipment.
Critical accounting estimates
The preparation of financial statements in conformity with AIFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the
consolidated entity’s accounting policies. The areas involving a higher level of judgement or complexity, or
areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3.
(b) Principles of consolidation
The consolidated financial statements are those of the consolidated entity, comprising Select Harvests
Limited (the parent entity) and all entities which Select Harvests Limited controlled at any point during the
year and at balance date.
Subsidiaries are all those entities (including special purpose entities) over which the consolidated entity has
power to govern the financial and operating policies, generally accompanying of more than one-half of the
voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible
are considered when assessing whether the consolidated entity controls another entity.
Subsidiaries are fully consolidated from the date at which control is transferred to the consolidated entity.
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
consolidated entity.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity,
using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting
policies which may exist.
All intercompany balances and transactions, including unrealised profits arising from intra-group
transactions, have been eliminated in full.
Investments in subsidiaries are accounted for at cost in the individual financial statements of Select
Harvests Limited.
40
Select Harvests Annual Report 2008
Notes to the fi nancial statements
(c) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each entity comprising the consolidated entity are measured
using the currency of the primary economic environment in which the entity operates (“the functional
currency”). The consolidated financial statements are presented in Australian dollars, which is the functional
and presentation currency of Select Harvests Limited.
(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 income statement, except when deferred in equity as
qualifying cash flow hedges.
(d) Cash and cash equivalents
Cash on hand and in banks and short term deposits are stated at nominal value.
For the purposes of the cash flow statement, cash includes cash on hand and in banks, and money market
investments readily convertible to cash within two working days, net of outstanding bank overdrafts.
Bank overdrafts are carried at the principal amount. Interest is charged as an expense as it accrues.
(e) Inventories
Inventories are valued at the lower of cost and net realisable value except for almond stocks which are
measured at fair value less estimated point of sale costs in accordance with AASB 141: “Agriculture” refer to (f)
below.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
• Raw materials and consumables purchase cost on a first in first out basis;
• Finished goods and work in progress cost of direct material and labour and a proportion of manufacturing
overheads based on normal operating capacity; and
• Almond stocks are valued in accordance with AASB 141 “Agriculture” whereby the cost of the non living
(harvested) produce is deemed to be its net market value immediately after it becomes non living. This
valuation takes into account current almond selling prices and current processing and selling costs.
(f) Biological Assets
Almond trees
Almond trees are classified as a biological asset and valued in accordance with AASB 141 “Agriculture.”
Developing almond trees are valued at their growing cost until the year they bear their first commercial crop.
The value of crop bearing almond trees is measured at fair value using a discounted cash flow methodology.
The discounted cash flow incorporates the following factors:
• Almond trees have an estimated 30 year economic life, with crop yields consistent with long term yield
rates;
• Selling prices are based on long term average trend prices;
• Growing, processing and selling costs are based on long term average levels;
• Cash flows are discounted at a rate that takes into account the cost of capital plus a suitable risk factor;
and
Select Harvests Annual Report 2008 41
Notes to the fi nancial statements
• Asset values (eg: land, buildings, water licenses, etc) to be deducted from the cumulative cash flow, to
determine the tree value, are based on current valuation and then adjusted annually to account for
capital expenditure, depreciation and utilised acreage.
Nursery trees are grown by the consolidated entity for sale to external almond orchard owners and for use
in almond orchards owned by the consolidated entity. Nursery trees are carried at fair value.
Growing almond crop
The growing almond crop is valued in accordance with AASB 141 “Agriculture”. This valuation takes into
account current almond selling prices and current growing, processing and selling costs. The calculated crop
value is then discounted to take into account that it is only partly developed, and then further discounted by
a suitable factor to take into account the agricultural risk until crop maturity.
New orchards growing costs
All costs associated with the establishment, planting and growing of almond trees for a new orchard are
accumulated for the first three years of that orchard. Once immature trees commence bearing a commercial
crop a proportion of the annual growing costs are expensed on the basis of yield achieved as a proportion
of anticipated yield of a mature tree. At the end of the eighth year full maturation is deemed to occur, after
which the tree is considered to be mature in terms of revenue generation and the annual growing costs
are then expensed in full. Almond trees are valued as described above once they commence bearing a
commercial crop.
(g) Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value. The method of recognising the resulting gain or loss depends
on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being
hedged. The consolidated entity designates derivatives as either; (1) hedges of the fair value of recognised
assets or liabilities or a firm commitment (fair value hedge); or (2) hedges of highly probable forecast
transactions (cash flow hedges).
The consolidated entity documents at the inception of the transaction the relationship between hedging
instruments and hedged items, as well as its risk management objective and strategy for undertaking
various hedge transactions. The consolidated entity also documents its assessment, both at hedge inception
and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and
will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.
(i) Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in
the income statement, together with any changes in the fair value of the hedged asset or liability that are
attributable to the hedged risk.
(ii) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges is recognised in equity in the hedging reserve. The gain or loss relating to the ineffective portion is
recognised immediately in the income statement.
Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item
will affect profit or loss (for instance when the forecast sale that is hedged takes place). However, when
the forecast transaction that is hedged results in the recognition of a non financial asset (for example,
inventory) or a non financial liability, the gains and losses previously deferred in equity are transferred from
equity and included in the measurement of the initial cost or carrying amount of the asset or liability.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria
for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and
42
Select Harvests Annual Report 2008
Notes to the fi nancial statements
is recognised when the forecast transaction is ultimately recognised in the income statement. When a
forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is
immediately transferred to the income statement.
(h) Property, plant and equipment
Cost and valuation
All classes of property, plant and equipment are measured at cost less accumulated depreciation.
The carrying amount of property, plant and equipment is reviewed annually by directors to ensure it is not in
excess of the recoverable amount from those assets. The recoverable amount is assessed on the basis of the
expected net cash flows which will be received from the assets’ employment and subsequent disposal. The
expected net cash flows have been discounted to present values in determining recoverable amounts.
Where assets have been revalued, the potential effect of the capital gains tax on disposal has not been taken
into account in the determination of the revalued carrying amount. Where it is expected that a liability for
capital gains tax will arise, this expected amount is disclosed by way of Note.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding
freehold land water rights, and almond trees, are depreciated on a straight line basis over their estimated
useful lives to the entity commencing from the time the asset is held ready for use. Leasehold improvements
are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of
the improvements.
The useful lives for each class of assets are:
Buildings:
Leasehold improvements:
Plant and equipment:
25 to 40 years
5 to 40 years
5 to 20 years
Leased plant and equipment:
5 to 10 years
Plantation land, irrigation systems:
10 to 40 years
Capital works in progress
Capital works in progress are valued at cost and relate to costs incurred for owned orchards and other assets
under development.
(i) Leases
Leases are classified at their inception as either operating or finance leases based on the economic substance
of the agreement so as to reflect the risks and benefits incidental to ownership.
Operating leases
The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the
risks and benefits of ownership of the leased item, are recognised as an expense on a straight line basis over
the term of the lease.
Finance leases
Leases which effectively transfer substantially all the risks and benefits incidental to ownership of the leased
item to the consolidated entity are capitalised at the present value of the minimum lease payments and
disclosed as plant and equipment under lease. A lease liability of equal value is also recognised.
Select Harvests Annual Report 2008 43
Notes to the fi nancial statements
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the assets and the
lease term. Minimum lease payments are allocated between interest expense and reduction of the lease
liability with the interest expense calculated using the interest rate implicit in the lease and charged directly
to the income statement.
The cost of improvements to or on leasehold property is capitalised, disclosed as leasehold improvements, and
amortised over the unexpired period of the lease or the estimated useful lives of the improvements, whichever is
the shorter.
( j) Intangibles
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the consolidated entity’s
share of the net identifiable assets of the acquired subsidiary/business at the date of acquisition. Goodwill
is not amortised. Instead, goodwill is tested for impairment annually or more frequently if events or
changes in circumstances indicate that it might be impaired, and is carried at cost less any accumulated
impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill
relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment
testing.
Brand names
Brand names are measured at cost. Directors are of the view that brand names have an indefinite life.
Brand names are therefore not depreciated. Instead, brand names are tested for impairment annually or
more frequently if events or changes in circumstances indicate that they might be impaired, and are carried
at cost less any accumulated impairment losses.
Permanent water rights
Permanent water rights are recorded at historical cost. Such rights have an indefinite life, and are not
depreciated. As an integral component of the land and irrigation infrastructure required to grow almonds,
the carrying value is tested annually for impairment. If events or changes in circumstances indicate
impairment, the carrying value is adjusted to take account of any impairment losses.
(k) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as
revenue are net of returns, trade allowances, and amounts collected on behalf of third parties. Revenue is
recognised to the extent that it is probable that the economic benefits will flow to the entity, the revenue
can be reliably measured, and the risks and rewards have passed to the buyer. The following specific
recognition criteria must also be met before revenue is recognised:
Sale of goods
Control of the goods has passed to the buyer.
Rendering of services
Revenue from the rendering of services is recognised upon the delivery of the service to the customer.
Certain clients may be invoiced in advance of provision of services.
Interest
Interest revenue is recognised when it becomes receivable on a proportional basis taking into account the
interest rates applicable to the financial assets.
Dividends
Dividends are recognised as revenue when the right to receive payment is established.
44
Select Harvests Annual Report 2008
Notes to the fi nancial statements
Almond pool revenue
Under the contractual arrangements with external growers the Company simultaneously acquires and sells
the almonds and does not make a margin on those sales. These transactions are disclosed in Note 4 and are
not recognised as revenue.
As at 30 June 2008 the Company held almond inventory on behalf of external growers which was not
recorded as inventory of the Company.
All revenue is stated net of the amount of Goods and Services Tax (GST).
(l) Other income
Almond stocks
Increments or decrements in the net market value of almond stocks are recognised as income or expenses
in the income statement in the financial year in which they occur. The net increment or decrement in the
total market value of the almond stocks is determined as the difference between the net market value and
quantities at the beginning of the year and at year end, less any further costs required to get the almonds
stocks to a saleable state.
(m) Income Tax
The income tax expense or revenue for the period 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.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised
directly in equity.
Tax consolidation
The parent entity of Select Harvests Limited and its subsidiaries have implemented the tax consolidation
legislation and formed a tax-consolidated group from 1 July 2003.
The parent entity and its wholly owned Australian subsidiaries in the tax-consolidated group continue to
account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in
the tax consolidated group continues to be a stand alone taxpayer in its own right.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised
as amounts receivable from or payable to other entities in the group. Details of tax funding agreements
are outlined in Note 6. Any difference between the amounts assumed and amounts receivable or payable
under the tax funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax
consolidated entities.
Select Harvests Annual Report 2008 45
Notes to the fi nancial statements
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
• Where the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of
the expense item as applicable; and
• Receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the balance sheet.
Cash flows are included in the cash flow statement on a gross basis and the GST component of cash
flows arising from investing and financing activities, which is recoverable from, or payable to the taxation
authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(n) Impairment of assets
Assets that have an indefinite useful life 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).
(o) Employee benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up
to the reporting date.
These benefits include wages and salaries, annual leave and long service leave.
Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits expected
to be settled within twelve months of the reporting date are measured at their nominal amounts based on
remuneration rates which are expected to be paid when the liability is settled. All other employee benefit
liabilities are measured at the present value of the estimated future cash outflow to be made in respect of
services provided by employees up to the reporting date. In determining the present value of future cash
outflows, the market yield as at the reporting date on national government bonds, which have terms to
maturity approximating the terms of the related liability, are used.
Employee benefit expenses and revenues arising in respect of the following categories are charged against
profit on a net basis in their respective categories:
• wages and salaries, non monetary benefits, annual leave, long service leave, sick leave and other leave
benefits.
• Other types of employee benefits.
Contributions are made by the consolidated entity to an employee superannuation fund and are charged as
expenses when incurred.
Share based payments
Share based compensation benefits are provided to employees via the Select Harvests Limited Executive
Share Option Scheme. Information relating to this scheme is set out in Note 32.
46
Select Harvests Annual Report 2008
Notes to the fi nancial statements
The fair value of options granted under the Select Harvests Limited Executive Share Option Scheme is
recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured
at grant date and recognised over the period during which the employees become unconditionally entitled to
the options.
The fair value at grant date is independently determined using a Black Scholes option pricing model that
takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact
of dilution, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option.
The fair value of the options granted is adjusted to reflect market vesting conditions, but excludes the impact
of any non market vesting conditions (for example, profitability and sales growth targets). Non market vesting
conditions are included in assumptions about the number of options that are expected to become exercisable.
At each balance sheet date, the entity revises its estimate of the number of options that are expected to
become exercisable. The employee benefit expense recognised each period takes into account the most recent
estimate. The impact of the revision to original estimates, if any, is recognised in the income statement with a
corresponding adjustment to equity.
(p) Financial instruments
Financial assets
Collectibility of trade receivables is reviewed on an ongoing basis. Trade receivables are carried at full amounts
due less any provision for doubtful debts. A provision for doubtful debts is recognised when collection of the
full amount is no longer probable. Debts which are known to be collectible are written off immediately.
Amounts receivable from other debtors are carried at full amounts due. Other debtors are normally settled on 30
days from month end unless there is a specific contract which specifies an alternative date.
Amounts receivable from related parties are carried at full amounts due. Details of the terms and conditions
are set out in Note 34.
Financial liabilities
The bank overdraft is carried at the principal amount. Interest is charged as an expense as it accrues.
Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not
billed to the consolidated entity.
Finance lease liability is accounted for in accordance with AASB 117 “Leases”.
(q) Fair value estimation
The fair value of certain financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes.
The fair value of financial instruments traded in active markets (such as foreign exchange hedge contracts) is
based on quoted market prices at the balance sheet date. The quoted market price used for financial assets
held by the consolidated entity is the current bid price; the appropriate quoted market price for financial
liabilities is the current ask price.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed
to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by
discounting the future contractual cash flows at the current market interest rate that is available
to the consolidated entity for similar instruments.
(r) Borrowing costs
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time
that is required to complete and prepare the asset for its intended use. All other borrowing costs, inclusive of
all facility fees, bank charges, and interest, are expensed as incurred.
Select Harvests Annual Report 2008 47
Notes to the fi nancial statements
(s) Earnings per share
(i) Basic Earnings per share
Basic earnings per share are calculated by dividing the profit attributable to equity holders of the company
by the weighted average number of ordinary shares outstanding during the financial year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares.
(t) Segment reporting
A business segment is identified for a group of assets and operations engaged in providing products
or services that are subject to risks and returns that are different to those of other business segments.
(u) New accounting standards and UIG interpretations
Certain new accounting standards and UIG interpretations have been published that are not mandatory for
30 June 2008 reporting periods. The Group’s and the parent entity’s assessment of the impact of these new
standards and interpretations is set out below:
a) AASB 101 (Revised) Presentation of Financial Statements is applicable to annual reporting periods
beginning on or after 1 January 2009. The group has not adopted the standards early. Application of the
standard will not affect any of the amounts recognised in the financial statements.
b) AASB 2008-1 Amendments to Australian Accounting Standard – Share-based Payments: Vesting
Conditions and Cancellations (AASB 2) is applicable to annual reporting periods beginning on or after
1 January 2009. The group has not adopted the standards early. Application of the standard will not
affect any of the amounts recognised in the financial statements.
c) AASB 8 Operating Segments and AASB 2007-3 Amendments to Australian Accounting Standards arising
from AASB 8
AASB 8 and AASB 2007-3 are effective for annual reporting periods commencing on or after
1 January 2009. AASB 8 will not result in a significant change in the approach to segment reporting for
Select Harvests. It requires adoption of a ‘management approach’ to reporting on financial performance.
The information being reported will be based on what the key decision maker’s use internally for
evaluating segment performance and deciding how to allocate resources to operating segments.
d) Revised AASB 123 Borrowing Costs and AASB 2007-6 Amendments to Australian Accounting Standards
arising from AASB 123 [AASB 1, AASB101, AASB 107, AASB 111, AASB 116 & AASB 138 and Interpretations 1
& 12]. The revised AASB 123 is applicable to annual reporting periods commencing on or after 1 January
2009. It has removed the option to expense all borrowing costs and – when adopted – will require the
capitalisation of all borrowing costs directly attributable to the acquisition, construction or production of
a qualifying asset.
e) Revised AASB 101 Presentation of Financial Statements and AASB 2007-8 Amendments to Australian
Accounting Standards arising from AASB 101. A revised AASB 101 was issued in September 2007
and is applicable for annual reporting periods beginning on or after 1 January 2009. It requires the
presentation of a statement of comprehensive income and makes changes to the statement of changes
in equity, but will not affect any of the amounts recognised in the financial statements. If an entity has
made a prior period adjustment or has reclassified items in the financial statements, it will need to
disclose a third balance sheet (statement of financial position), this one being as at the beginning of the
comparative period.
The introduction of the above standards will not have a material impact on Select Harvests and the impact
is limited to disclosure requirements only in future years.
48
Select Harvests Annual Report 2008
Notes to the fi nancial statements
(v) Provisions
Provisions are recognised when the consolidated entity has a present legal or constructive obligation as a
result of past events, it is probable that an outflow of resources will be required to settle the obligation, and
the amount has been reliably estimated.
(w) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year which are unpaid. These amounts are unsecured and are usually paid within 30 days of
recognition.
(x) Contributed equity
Ordinary shares are classified as equity. The value of new shares or options issued is shown in equity.
(y) Comparatives
Where necessary, comparatives have been reclassified and repositioned for consistency with current year
disclosures.
(z) Rounding amounts
The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities & Investments
Commission, relation to the “rounding off” of amounts in the financial report. Amounts in the financial report
have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases,
to the nearest dollar.
2. Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate
risk and commodity price risk), credit risk and liquidity risk. The Group uses different methods to measure
different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest
rate risk, foreign exchange and other price risks, and ageing analysis for credit risk.
Risk management is carried out by management pursuant to policies approved by the Board of Directors.
(a) Market risk
(i) Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are
denominated in a currency that is not the consolidated entity’s functional currency.
The Group sells both almonds harvested from owned orchards through the almond pool and processed
products internationally in United States dollars, and purchases raw materials and other inputs to the
manufacturing and almond growing process from overseas suppliers predominantly in United States dollars.
Overseas purchases are paid on delivery, so no foreign currency payable exists at balance date.
Management and the Board review the foreign exchange position of the Group and, where appropriate, take out
forward exchange contracts, transacted with the Groups’s banker, to manage foreign exchange risk.
Select Harvests Annual Report 2008 49
Notes to the fi nancial statements
The exposure to foreign currency risk at the reporting date was as follows:
GROUP
Trade receivables
Cash at bank
Foreign exchange contracts
- buy foreign currency (cash flow hedges)
- sell foreign currency (cash flow hedges)
PARENT
Cash at bank
Foreign exchange contracts
- buy foreign currency (cash flow hedges)
- sell foreign currency (cash flow hedges)
30 JUNE 2008
USD $000’S
30 JUNE 2007
USD $000’S
7,245
283
2,793
1,657
30 JUNE 2008
USD $000’S
283
2,793
1,657
7,565
(865)
4,979
19,982
30 JUNE 2007
USD $000’S
(865)
4,979
19,982
Group sensitivity analysis
Based on financial instruments held at the 30 June 2008, had the Australian dollar strengthened/weakened
by 5 % against the US dollar, with all other variable’s held constant, the Group’s post tax profit for the year
would have been $262,000 lower/$290,000 higher (2007: $265,000 lower/$293,000 higher), mainly as a
result of the US dollar denominated financial instruments as detailed in the above table. Equity would have
been $306,000 lower/$329,000 higher (2007:$301,000 lower/$391,000 higher), arising mainly from foreign
forward exchange contracts designated as cash flow hedges.
Parent sensitivity analysis
Based on financial instruments held at the 30 June 2008, had the Australian dollar strengthened/weakened
by 5 % against the US dollar, with all other variable’s held constant, the parent entity post tax profit for the
year would have been $10,000 lower/$11,000 higher (2007: $34,000 higher/ $38,000 lower), mainly as a
result of the US dollar denominated financial instruments as detailed in the above table. Equity would have
been $54,000 lower/$50,000 higher (2007:$632,000 lower/$691,000 higher), arising mainly from foreign
forward exchange contracts designated as cash flow hedges.
(ii) Price risk
The Group is exposed to commodity price risk. The Group sells almonds harvested from owned orchards
domestically and overseas throughout the year based on an almond price which will fluctuate from time
to time due to changes in international market conditions. The Group has an active and ongoing almond
marketing and selling program in place which is continually monitored and adapted for changes in almond
prices.
The Group also purchases raw materials and other inputs to the manufacturing and almond growing
process domestically and overseas. The price of such inputs will also fluctuate from time to time based on
market forces. Where practical, the consolidated entity, through its procurement programs, contracts from
time to time to acquire such quantity of inputs as is projected to be required at fixed prices.
(iii) Cash flow and fair value interest rate risk
The Group’s interest rate risk arises from borrowings issued at variable rates, which exposes the Group to
cash flow interest rate risk. The Group’s borrowings at variable interest rate are denominated in Australian
dollars.
50
Select Harvests Annual Report 2008
Notes to the fi nancial statements
At the reporting date the Group and the parent had the following variable rate borrowings:
30 JUNE 2008
WEIGHTED AVERAGE INTEREST RATE
%
7.30%
11.75%
BALANCE
$000
50,500
51
30 JUNE 2007
WEIGHTED AVERAGE INTEREST RATE
%
-
10.4%
BALANCE
$000
-
1,285
Commercial bills
Overdraft
An analysis of maturities is provided in (c) below
The Group analyses interest rate exposure on an ongoing basis in conjunction with debt facility, cash flow and
capital management.
Group and Parent sensitivity
At 30 June 2008, if interest rates had changed by +/- 25 basis points from the year end rates with all other
variables held constant, post tax profit for the year would have been $88,000 lower/higher (2007: $nil lower/
higher).
All Group borrowings are held by the parent entity.
(b) Credit risk
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks
and financial institutions, as well as exposure to wholesale, retail and farm investor customers, including
outstanding receivables and committed transactions.
The Group has no significant concentrations of credit risk. The Group has policies in place to ensure that sales
of products and services are made to customers with an appropriate credit history. Derivative counterparties
and cash transactions are limited to high credit quality financial institutions.
The credit quality of financial assets that are neither past due or impaired can be assessed by reference to
external credit ratings (if available) or to historical information about default rates.
(c) Liquidity risk
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching
the maturity profiles of financial assets and liabilities.
Financing arrangements
The Group and parent entity had access to the following undrawn borrowing facilities at the reporting date:
Floating rate (expiring within 1 year)
- Commercial bill facility
- Bank overdraft facility AUD
- Bank overdraft facility USD
2008
$’000
$A 9,500
$A 949
$US 3,000
2007
$’000
$A 28,000
$A 1,000
$US 2,415
The bank overdraft facility may be drawn at any time and may be terminated by the bank without notice. The
commercial bill acceptance facility may be drawn at any time and is subject to annual review.
Select Harvests Annual Report 2008 51
Notes to the fi nancial statements
Maturities of financial liabilities
The table below analyses the Group’s and parent entity’s financial liabilities, net and gross settled derivative
instruments into relevant maturity groupings based on the remaining period at the reporting date on the
contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
GROUP AND PARENT
AT 30 JUNE 2008
LESS THAN 6 MONTHS
6 MONTHS TO 12
MONTHS
TOTAL CONTRACTUAL
CASH FLOWS
CARRYING AMOUNT
(ASSETS)/ LIABILITIES
$’000
$’000
$’000
$’000
Non derivatives
Variable Rate
Bills payable
Derivatives
Bank Overdraft
USD buy
USD sell
USD net
50,500
50
2,397
1,546
851
-
-
396
111
285
50,500
50,500
50
2,793
1,657
1,136
50
82
(69)
13
GROUP AND PARENT
AT 30 JUNE 2007
LESS THAN 6 MONTHS
6 MONTHS TO 12
MONTHS
TOTAL CONTRACTUAL
CASH FLOWS
CARRYING AMOUNT
(ASSETS)/ LIABILITIES
$’000
$’000
$’000
$’000
Non derivatives
Variable Rate
Bills payable
Derivatives
Bank Overdraft
USD buy
USD sell
USD net
-
1,285
4,960
15,302
(10,342)
-
-
19
4,680
(4,661)
-
1,285
4,979
19,982
(15,003)
-
1,285
627
(431)
196
3. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other
factors.
Critical accounting estimates and assumptions
The consolidated entity 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 risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are discussed below.
Almond trees
Almond trees are classified as a biological asset and valued in accordance with AASB 141 “Agriculture”. The
consolidated entity’s accounting policies in relation to almond trees are detailed in Note 1(f).
In applying this policy, the consolidated entity has made various assumptions. These are detailed in Note
17 of the financial statements. As at 30 June 2008, the value of almond trees carried in the financial
statements of the consolidated entity is $6.0 million (2007:$5.8 million)
Estimated impairment of intangible assets
The Group tests annually whether intangible assets, has suffered any impairment, in accordance with
the accounting policy stated in note 1(j). The recoverable amounts of cash generating units have been
determined based on value- in- use calculations. These calculations require the use of assumptions. Refer
to note 18 for details of these assumptions and the potential impact of changes to these assumptions.
52
Select Harvests Annual Report 2008
Notes to the fi nancial statements
4. Revenue
Revenue from continuing operations
Sales of goods and services *
Other revenue
Management fees
Dividends and distributions
- Controlled entities
Interest
Wholly owned entities
- Other persons/corporations
Total interest
Total other revenue
Total revenue
Revenue/Cost of goods sold from Almond Pool
Revenue from almond pool sales
Cost of goods sold from almond pool sales
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
224,655
229,498
-
-
3,915
4,554
20,500
22,000
-
-
-
155
155
155
-
-
-
265
265
265
224,810
229,763
43,210
45,767
(43,210)
(45,767)
-
-
2,774
155
2,929
27,344
27,344
-
-
-
* Revenue from almond pool sales includes sales of almonds for externally owned almond orchards, which are sold by the consolidated entity on a pooled
basis, the proceeds from which are distributed to the pool participants. This revenue is not included in the revenue as stated above within revenue from
continuing operations.
5. Expenses
Profit before tax includes the following specific expenses:
Cost of goods & services sold
Temporary water costs
Depreciation of non current assets
Freehold land and buildings
Buildings
Plantation Land and irrigation systems
Leased plant and equipment
Plant and equipment
Total depreciation of non current assets
174,866
173,549
3,007
-
55
468
116
3,163
3,802
-
-
82
411
115
3,194
3,802
-
-
-
-
-
16
117
133
1,029
218
1,247
27,801
27,801
-
-
-
-
-
-
-
-
17
276
293
Select Harvests Annual Report 2008 53
Notes to the fi nancial statements
5. Expenses cont.
Finance costs
wholly owned entities
other persons
capitalised
Total finance costs
Impairment losses: trade receivables
Movement in provision for employee entitlements
Movement in provision for stock diminution
Foreign exchange losses
Operating lease rental minimum lease payments
Net loss on disposal of property, plant and equipment
(a) Capitalised borrowing costs
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
-
3,373
(1,482)
1,891
38
675
55
72
9,514
837
-
852
(52)
800
13
721
9
-
7,695
6
1,857
3,288
(1,482)
3,663
-
(36)
-
-
-
-
1,361
734
(52)
2,043
-
130
-
-
-
6
The capitalised rate used to determine the amount of borrowing costs to be capitalised is the weighted average interest rate
applicable to the entity’s outstanding borrowings during the year, 7.3 % (2007 – 7.0 %)
6. Income tax
(a) Income tax expense
Current Tax
Deferred tax
Under (over) provided in prior years
Income tax expense is attributable to:
Profit from continuing operations
Aggregate income tax expense
Deferred income tax (revenue) expense included in
income tax expense comprises:
Decrease (increase) in deferred tax assets
(Decrease) increase in deferred tax liabilities
16
24
4,912
2,715
(373)
7,254
7,254
7,254
(127)
2,842
2,715
11,540
493
(117)
11,916
11,916
11,916
(288)
781
493
501
(37)
(60)
404
404
404
(37)
-
(37)
357
(274)
(117)
(34)
(34)
(34)
(274)
-
(274)
54
Select Harvests Annual Report 2008
Notes to the fi nancial statements
(b) Numerical reconciliation of income tax expense
to prima facie tax payable
Profit from continuing operations before income tax
expense
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
25,384
25,384
40,014
40,014
22,018
22,018
22,048
22,048
Tax at the Australian tax rate of 30% (2007 – 30%)
7,615
12,004
6,605
6,614
Tax effect of amounts that are not deductible
(taxable) in calculating taxable income
Rebateable dividends
Other non allowable items
Other non assessable items
Under/(over) provision of previous year
Income tax expense
-
12
-
(373)
7,254
-
65
(36)
(117)
11,916
(6,150)
(6,600)
9
-
(60)
404
69
-
(117)
(34)
(c) Tax consolidation legislation
Select Harvests Limited and its wholly-owned Australian controlled entities have implemented the tax
consolidation legislation as of 1 July 2003. The accounting policy in relation to this legislation is set out
in Note 1(m).
On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into
a tax sharing agreement which limits the joint and several liability of the wholly-owned entities in the
case of a default by the head entity, Select Harvests Limited.
The entities have also entered into a tax funding agreement under which the wholly-owned entities
fully compensate Select Harvests Limited for any current tax payable assumed and are compensated
by Select Harvests Limited for any current tax receivable and deferred tax assets relating to unused tax
losses or unused tax credits that are transferred to Select Harvests Limited under the tax consolidation
legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-
owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding
advice from the head entity, which is issued as soon as practicable after the end of each financial year.
The head entity may also require payment of interim funding amounts to assist with its obligations
to pay tax instalments. The funding amounts are recognised as current intercompany receivables or
payables.
7. Discontinued operations
There are no discontinued operations impacting the reported results in the current financial year or the
prior financial year.
Select Harvests Annual Report 2008 55
Notes to the fi nancial statements
8. Dividends paid or provided for on ordinary shares
(a) Dividends paid during the year
(i) Interim - paid 3 April 2008 (2007: 2 April 2007)
Fully franked dividend (22c per share)
(2007: 22c per share)
(ii) Final - paid 1 October 2007 (2007: 2 October 2006)
Fully franked dividend (35c per share)
(2007: 33c per share)
(b) Dividends proposed and not recognised as a liability
Fully franked dividend payable on 1 October 2008 (23c per share,
$8,972,053)
(c) Franking credit balance
Franking credits available for the subsequent financial year arising from:
Franking account balance as at the beginning of the financial year
Current year tax payment instalments and adjustments
Interim Dividends paid
Franking account balance at end of financial year
Current year income tax payable/(receivable)
Dividend declared
Franking account balance after payment of current year tax and
dividends
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
8,556
8,556
8,802
8,802
8,556
8,556
8,802
8,802
13,600
22,156
13,143
21,945
13,600
22,156
13,143
21,945
29,629
18,025
(8,556)
39,098
(1,309)
(8,972)
26,639
22,585
(8,802)
40,422
2,766
(13,559)
28,817
29,629
The impact on the franking account of the dividend recommended by the directors since year end, but
not recognised as a liability at year end, will be a reduction in the franking account of $3,845,165 (2007
- $5,810,856)
9. Cash and cash equivalents
Cash at bank and in hand
Deposits at call
4,054
-
4,054
924
6,000
6,924
3,946
-
3,946
(a) Reconciliation to cash at the end of the year
The above figures are reconciled to cash at the end of the financial year as shown in the statement of
cash flow as follows:
Balances as above
Bank overdrafts and Commercial bills (Note 20)
Balances per statement of cash flows
4,054
(50,551)
(46,497)
6,924
(1,285)
5,639
3,946
(50,551)
(46,605)
529
6,000
6,529
6,529
(1,285)
5,244
56
Select Harvests Annual Report 2008
Notes to the fi nancial statements
(b) Cash at bank and on hand
Details of the interest rates applicable to cash at bank and on hand are detailed in Note 36.
(c) Deposits at call
The deposits are bearing a floating interest rate at 30 June 2008. Details of the interest rates
applicable to deposits at call are detailed in Note 36.
10. Receivables (current)
Trade receivables
Provision for impairment of trade receivables
Prepayments
(a) Impaired trade receivables
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
40,664
(15)
40,649
2,452
43,101
32,674
(18)
32,656
803
33,459
-
-
-
1,127
1,127
-
-
-
705
705
As at 30 June 2008 current trade receivables of the Group with a value of $15,000 (2007: $18,000) were
impaired. The amount of the provision was $15,000 (2207:$18,000). There were no impaired receivables
for the parent in 2008 or 2007.
The aging of these receivables is as follows:
Over 6 months
Movements in the provision for impairment of receivables are as follows:
At 1 July
Provision for impairment recognised during the year
Receivables written off during the year
CONSOLIDATED
2008
$’000
15
15
18
38
(41)
15
2007
$’000
18
18
10
13
(5)
18
(b) Trade receivables past due but not impaired
As at 30 June 2008, trade receivables of $4,804,382 (2007: $6,060,729) were past due but not impaired.
These relate to a number of customers for whom there is no recent history of default. The ageing analysis
of these receivables is as follows:
Up to 3 months
3 to 6 months
> 6 months
CONSOLIDATED
2008
$’000
3,277
660
867
4,804
2007
$’000
4,870
222
969
6,061
Select Harvests Annual Report 2008 57
Notes to the fi nancial statements
(c) Effective interest rates and credit risk
All receivables are non-interest bearing.
The Company minimises concentrations of credit risk in relation to trade receivables by undertaking
transactions with a large number of customers from across the range of business segments in which the
consolidated entity operates. Refer to Note 2 for more information on the risk management policy of the
consolidated entity.
Information concerning the effective interest rate and credit risk of both current and non-current
receivables is set out in Note 36.
(d) Fair value and credit risk
Due to the short - term nature of these receivables, their carrying amount is assumed to approximate
their fair value.
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
11. Inventories (current)
Raw materials
Raw materials at cost
Finished goods
Finished goods at cost
Provision for diminution in value
11(a)
Other inventory
Other inventory at cost
Almond stocks
Almond stocks at cost (refer to Note 1 (f))
Total inventories
(a) Movements in provision for diminution in value
9,887
9,887
5,814
(64)
5,750
4,759
4,759
8,833
8,833
29,229
8,026
8,026
5,803
(9)
5,794
7,309
7,309
9,040
9,040
30,169
Write-downs of inventory to net realisable value recognised as an expense during the year ended
30 June 2008 amounted to $133,000 (2007 / $nil). The expense has been included in other expenses.
12. Derivative fi nancial instruments (current)
Current assets
Forward exchange contracts – cash flow hedges
Total current derivative financial instrument assets
Current liabilities
Forward exchange contracts – cash flow hedges
Total current derivative financial instrument liabilities
58
Select Harvests Annual Report 2008
69
69
82
82
431
431
627
627
-
-
-
-
-
-
-
-
-
-
69
69
82
82
-
-
-
-
-
-
-
-
-
-
431
431
627
627
Notes to the fi nancial statements
(i) Forward exchange contracts – cash flow hedges
The consolidated entity enters into forward exchange contracts to buy and sell specified amounts
of foreign currency in the future at stipulated exchange rates. The objective in entering the forward
exchange contracts is to protect the consolidated entity against unfavourable exchange rate movements
for highly probable contracted and forecasted sales and purchases undertaken in foreign currencies.
The net amount of the foreign currency the consolidated entity will be required to pay or purchase when
settling the brought forward exchange contracts should the counterparty not pay the currency it is
committed to deliver to the Company at balance date was $1,136,000 (2007: $15,003,000).
The accounting policy in regard to forward exchange contracts is detailed in Note 1(c).
At balance date, the details of outstanding forward exchange contracts are:
BUY UNITED STATES DOLLARS
SETTLEMENT
Less than 6 months
6 months to 1 year
SELL UNITED STATES DOLLARS
SETTLEMENT
Less than 6 months
6 months to 1 year
(ii) Credit risk exposures
SELL AUSTRALIAN DOLLARS
AVERAGE EXCHANGE RATE
2008
$’000
2,397
396
2,793
2007
$’000
4,960
19
4,979
2008
$
0.92
0.92
BUY AUSTRALIAN DOLLARS
AVERAGE EXCHANGE RATE
2008
$’000
1,546
111
1,657
2007
$’000
15,302
4,680
19,982
2008
$
0.92
0.86
2007
$
0.77
0.77
2007
$
0.81
0.84
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance
date to recognised financial assets is the carrying amount of those assets, net of any provisions for
doubtful debts of those assets, as disclosed in the balance sheet and Notes to the financial statements.
Credit risk for derivative financial instruments arises from the potential failure by counterparties to the
contract to meet their obligations at maturity. The credit risk exposure to forward exchange contracts is
the net fair value of these contracts.
The consolidated entity does not have any material credit risk exposure to any single debtor or group of
debtors under financial instruments entered into by the consolidated entity.
(iii) Interest rate risk exposures
Refer to Note 36 for the consolidated entity’s exposure to interest rate risk on derivative financial instruments.
13. Receivables (non current)
Related party receivables
Wholly owned group
• controlled entities
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
34 (f)
-
-
-
-
126,352
126,352
51,063
51,063
Select Harvests Annual Report 2008 59
Notes to the fi nancial statements
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
-
-
-
-
9,607
9,607
9,607
9,607
2,809
(466)
2,343
21,589
-
(2,363)
19,226
21,569
608
(410)
198
2,809
(411)
2,398
25,328
(5,826)
(1,908)
17,594
19,992
609
(295)
314
15(a)
15(b)
15(a)
15(a)
36,466
37,645
(22,210)
(20,170)
15(a)
14,256
17,475
15(a)
37,112
37,112
51,368
98,584
-
9,973
9,973
27,762
76,364
(5,826)
(25,449)
(22,784)
73,135
47,754
-
-
-
-
-
-
-
-
103
(45)
58
1,104
(875)
229
-
-
-
1,207
-
(920)
287
-
-
-
-
-
-
-
-
103
(29)
74
931
(772)
159
43
43
276
1,077
-
(801)
276
14. Other fi nancial assets (non current)
Investments at cost comprise:
Shares
Controlled entities – unlisted
15. Property, plant and equipment
Buildings
At cost
Accumulated depreciation
Plantation land and irrigation systems
At cost
Transfer to intangible assets
Accumulated depreciation
Total land and buildings
Plant and equipment under lease
At cost
Accumulated amortisation
Plant & equipment
At cost
Accumulated depreciation
Capital works in progress
At cost
Total plant and equipment
Total property, plant and equipment
Cost
Transfer to intangible assets
Accumulated depreciation and amortisation
Total written down amount
60
Select Harvests Annual Report 2008
Notes to the fi nancial statements
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
(a) Reconciliations
Reconciliations of the carrying amounts of property, plant and equipment at the beginning and end of
the current financial year.
Buildings
Carrying amount at beginning
Additions
Depreciation expense
Disposals
Plantation Land and irrigation systems
Carrying amount at beginning
Additions
Transfer to intangible assets
Transfers between classes
Depreciation expense
Plant and equipment under lease
Carrying amount at beginning
Transfers between classes
Depreciation expense
Plant and Equipment
Carrying amount at beginning
Additions
Disposals
Transfers between classes
Depreciation expense
Capital works in progress
Carrying amount at beginning
Additions
Transfers between classes
Total written down value
15 (b)
2,398
-
(55)
-
2,511
-
(82)
(31)
2,343
2,398
17,594
-
-
2,100
(468)
19,226
314
-
(116)
198
17,475
1,252
(674)
(633)
(3,164)
14,256
9,973
28,848
(1,709)
37,112
73,135
23,437
468
(5,826)
(74)
(411)
17,594
701
(272)
(115)
314
16,265
3,787
(108)
725
(3,194)
17,475
1,468
8,884
(379)
9,973
47,754
-
-
-
-
-
-
-
-
74
-
(16)
58
159
115
-
71
(116)
229
43
(43)
-
-
287
-
-
-
-
-
-
-
-
-
91
-
(17)
74
373
62
-
-
(276)
159
-
43
-
43
276
(b) The historical cost of permanent water rights has been reclassified as an intangible asset, with the prior year comparative
restated accordingly
Select Harvests Annual Report 2008 61
Notes to the fi nancial statements
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
16. Deferred tax assets
The balance comprises temporary differences attributable to:
Amounts recognised in profit and loss
Assets at cost
Employee benefits
Accruals
Provisions
Doubtful debts
Amounts recognised directly in equity
Cash flow hedges
Movements:
Opening balance 1 July
Credited / (charged) to income statement
Credited / (charged) to equity
Closing balance at 30 June
Deferred tax assets to be recovered after more than
12 months
Deferred tax assets to be recovered within 12 months
-
163
46
411
-
620
4
624
692
(127)
59
624
71
553
624
(180)
438
41
329
5
633
59
692
345
288
59
692
(61)
753
692
-
140
46
387
-
573
4
577
555
(37)
59
577
40
537
577
-
126
41
329
-
496
59
555
223
274
59
555
119
436
555
17. Biological assets – almond trees
The consolidated entity, as part of its operations, grows, harvests, and sells almonds. Harvesting of
almonds occurs from February through to April each year. The almond orchards are located in the
Robinvale area of North West Victoria.
As at 30 June 2008 the consolidated entity owned and managed a total of 1,863 acres of almond orchards
(2007: 1,863 acres) and leased and managed a total of 1,505 acres of almond orchards (2007: 1,505 acres).
During the year ended 30 June 2008, 2,400 metric tonnes of almonds were harvested from these
orchards (2007: 2,400 metric tonnes). These almonds had a fair value less estimated point of sale costs
of $12.8 million (2007: $15.5 million).
Carrying amount at 1 July
Additions
Almond Tree fair value adjustment
Carrying amount at 30 June
62
Select Harvests Annual Report 2008
CONSOLIDATED
2008
$’000
5,998
41
-
2007
$’000
5,799
107
92
6,039
5,998
Notes to the fi nancial statements
Developing almond trees are valued at their growing cost until the year they bear their first commercial
crop. The value of crop bearing almond trees is calculated using a discounted cash flow methodology. The
discounted cash flow incorporates the following factors:
• Almond trees have an estimated 30 year economic life, with crop yields consistent with long term yield rates;
• Selling prices are based on long term average trend prices;
• Growing, processing and selling costs are based on long term average levels;
• Cash flows are discounted at a rate that takes into account the cost of capital plus a suitable risk factor; and
• An appropriate rental charge is included to represent the use of the developed land on which the trees are planted.
(a) Financial risk management strategies
The consolidated entity is exposed to financial risks arising from changes in the price of almonds. The
consolidated entity reviews its outlook for almond prices regularly in considering the need for active
financial risk management.
(b) Non-current assets pledged as security
Refer to Note 23 for information on biological assets whose title is restricted and the carrying amounts of
any biological assets pledged as security by the parent entity or its subsidiaries.
18. Intangibles
Year ended 30 June 2007
Opening net book amount
Additions
Transfer from property, plant and equipment
Closing net book amount
Year ended 30 June 2008
Opening net book amount
Additions
Closing net book amount
CONSOLIDATED
GOODWILL
$’000
BRAND NAMES*
$’000
PERMANENT
WATER RIGHTS
$’000
TOTAL
$’000
25,995
2,900
-
-
5
-
25,995
2,905
25,995
-
25,995
2,905
-
2,905
-
-
5,826
5,826
5,826
4,410
10,236
28,895
5
5,826
34,726
34,726
4,410
39,136
* Brand name assets relate to the “Lucky” brand, which has been assessed as having an indefinite useful life. This assessment was based on the Lucky brand
having been sold in the market place for over 50 years, is a market leader in the cooking nuts category and remains a heritage brand.
(a) Impairment tests for goodwill
Goodwill is allocated to the consolidated entity’s cash-generating units (CGU) identified according
to business segment. The total value of goodwill relates to the Food Products CGU. The recoverable
amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow
projections based on financial projections by management covering a five-year period assuming a 10%
growth rate based on projected crop increases and other growth rates based on past performance and
its expectations for the future. These do not exceed the long-term growth rate for the business in which
the Food Products Division operates in. A weighted average cost of capital of 10.8% has been used to
discount the cash flow projections.
Select Harvests Annual Report 2008 63
Notes to the fi nancial statements
(b) Impact of possible changes to key assumptions
The recoverable amount of the goodwill in the Food Products Division exceeds the carrying amount of
goodwill at 30 June 2008. If a post-tax discount rate of 11.8% was used instead of 10.8% the recoverable
amount of the goodwill in the Food Products Division would still exceed the carrying amount of goodwill
at 30 June 2008.
(c ) Permanent water rights
The value of permanent water rights relates to the almond division Cash Generating Unit (CGU). As an
integral part of Land and irrigation infrastructures required to grow almond orchards, the recoverable
amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow
projections based on projections by management covering a five-year period assuming a growth of
10% based on projected crop increases and other growth rates based on past performance and its
expectations for the future. A weighted average cost of capital of 10.8% has been used to discount cash
flows indicating a recoverable amount exceeding the carrying value of permanent water rights at 30 June
2008.
19. Trade and other payables (current)
Trade creditors
Other creditors and accruals
20. Interest bearing liabilities (current)
Secured
Bank overdraft
Bills payable
Lease liability
Total secured current borrowings
(a) Security
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
8,112
26,735
34,847
7,899
38,507
46,406
2008
$’000
96
1,309
1,405
2007
$’000
140
297
437
23 (a)
23 (a)
29
50
1,285
50
1,285
50,500
237
50,787
-
114
50,500
59
-
17
1,399
50,609
1,302
Details of the security relating to each of the secured liabilities and further information on the bank overdrafts and bank loans
are set out in Note 23.
(b) Interest rate risk exposures
Details of the consolidated entity’s exposure to interest rate changes on borrowings are set out in Note 36.
(c) Fair value disclosures
Details of the fair value of borrowings for the consolidated entity are set out in Note 23.
64
Select Harvests Annual Report 2008
Notes to the fi nancial statements
21. Provisions (current)
Employee benefits
22. Trade and other payables (non current)
Aggregate amounts payable to related parties
- wholly owned companies
23. Interest bearing liabilities (non current)
Secured
Lease liability
Total secured non-current borrowings
(a) Total secured liabilities
29
The total secured liabilities (current and non current) are as follows:
Bank overdraft
Bills payable
Lease liability
Total secured liabilities
(b) Assets pledged as security:
29
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2,446
2,446
2007
$’000
2,482
2,482
2008
$’000
319
319
2007
$’000
306
306
-
-
-
-
50
50,500
237
50,787
-
-
41,261
41,261
16,904
16,904
237
237
1,285
-
351
-
-
58
58
50
1,285
50,500
59
-
75
1,636
50,609
1,360
The bank overdraft and commercial bills of the parent entity and subsidiaries are secured by the following:
(i) A registered mortgage debenture is held as security over all the assets and undertakings of Select Harvests
Limited and the entities of the wholly owned group.
(ii) A deed of cross guarantee exists between the entities of the wholly owned group.
Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements
revert to the lessor in the event of a default.
Select Harvests Annual Report 2008 65
Notes to the fi nancial statements
The carrying amounts of assets pledged as security for current and non-current borrowings are:
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
Current
Floating charge
Cash and cash equivalents
Receivables
Inventories
Derivative financial instruments
4,054
43,101
29,229
69
6,924
33,459
30,169
431
3,946
1,127
-
69
6,529
705
-
431
Total current assets pledged as security
76,453
70,983
5,142
7,665
126,352
9,607
287
-
136,246
141,388
51,063
9,607
276
-
60,946
68,611
Non-current
Floating charge
Receivables
Other financial assets
Property, plant and equipment
Biological assets – almond trees
Total non-current assets pledged as security
-
-
73,135
6,039
79,174
-
-
47,754
5,998
53,752
Total assets pledged as security
155,627
124,735
(c) Financing arrangements
The consolidated entity and the Company have bank overdraft facilities available to the extent
of 1,000,000 Australian dollars and 3,000,000 United States dollars (2007: AUD1,000,000 &
USD3,000,000).
As at 30 June 2008 the consolidated entity and Company have used AUD 51,018 and USD Nil (2007: AUD
Nil & USD 703,128) of the facility.
The consolidated entity and the Company have a commercial bill facility available to the extent of
$60,000,000 (2007: $28,000,000). As at 30 June 2008 the consolidated entity and Company have used
$ 50,500,000 (2007: $Nil). This facility is treated as a current liability because it is due for renewal on 3
October 2008.
The current interest rates are 7.80% on the commercial bill facility, 11.75% on the Australian dollar bank
overdraft facility, and 3.41 % on the United States dollar bank overdraft facility.
(d) Interest rate risk exposures
Details of the consolidated entity’s exposure to interest rate risk are set out in Note 36.
(e) Fair value
The fair value of borrowings at balance date is equal to the carrying amounts set out in part (a) above.
66
Select Harvests Annual Report 2008
Notes to the fi nancial statements
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
24. Deferred tax liabilities (non current)
The balance comprises temporary differences attributable to:
Amounts recognised in profit and loss
Inventory
Assets at cost
Employee benefits
Accruals
Intangibles
Operating leases
Amounts recognised directly in equity
Cash flow hedges
Movements:
Opening balance 1 July
Credited / (charged) to income statement
Credited / (charged) to equity
Closing balance at 30 June
Deferred tax liabilities to be settled after more than
12 months
Deferred tax liabilities to be settled within 12 months
25. Provisions (non current)
Employee entitlements
(a) Aggregate employee entitlements liability
(b) Number of full time employees at year end
26. Contributed equity
(a) Issued and paid up capital
Ordinary shares fully paid
2,169
9,777
(893)
1,468
870
(371)
13,020
1,816
8,538
(648)
(64)
870
(334)
10,178
-
-
13,020
10,178
10,178
2,842
-
9,718
781
(321)
13,020
10,178
10,249
2,771
13,020
695
3,141
337
9,142
1,036
10,178
554
3,036
340
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
126
445
18
93
399
16
44,375
44,375
41,953
41,953
44,375
44,375
41,953
41,953
Select Harvests Annual Report 2008 67
Notes to the fi nancial statements
(b) Movements in shares on issue
Beginning of the financial year
Issued during the year
• Dividend reinvestment scheme
• Employee share scheme
• Share buy back
End of Financial year
(c) Share options
Employee share scheme
2008
2007
NUMBER OF
SHARES
$’000
NUMBER OF
SHARES
$’000
38,739,047
41,953
39,707,757
52,665
451,074
119,700
3,695
1,097
299,128
164,867
(300,893)
(2,370)
(1,432,705)
39,008,928
44,375
38,739,047
3,531
1,288
(15,531)
41,953
The company continued to offer employee participation in short term and long term incentive schemes
as part of the remuneration packages for the employees of the companies. Both the short term and
long term schemes involve payments up to an agreed proportion of the total fixed remuneration of
the employee, with relevant proportions based on market relativity of employees with equivalent
responsibilities.
The employee is able to receive payments under the short term incentive scheme based on the
achievement of agreed business plans by the individual. This performance is measured and reported
by a balanced scorecard approach.
The long term scheme involves the issue of options to the employee, under the executive share option
scheme. During or since the end of the financial year, 71,167 options (2007: 171,101 options) have been
granted under this scheme (refer Note 38 and Directors’ Report for further details). The market value of
ordinary Select Harvests Limited shares closed at $ 6.00 on 30 June 2008 ($11.60 on 30 June 2007).
(d) Ordinary shares
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 the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is
entitled to one vote, and upon a poll each share is entitled to one vote.
27. Reserves and retained profi ts
Capital reserve
Cash flow hedge reserve
Asset revaluation reserve
Options reserve
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
27(a)
27(a)
27(a)
27(a)
3,270
(9)
7,645
329
11,235
3,270
(137)
7,645
495
11,273
3,270
(9)
-
329
3,270
(137)
-
495
3,590
3,628
Retained profits
27(c)
38,461
42,278
759
1,092
68
Select Harvests Annual Report 2008
Notes to the fi nancial statements
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
3,270
3,270
(137)
128
(9)
7,645
7,645
495
-
(166)
329
3,270
3,270
1,258
(1,395)
(137)
7,645
7,645
518
174
(197)
495
3,270
3,270
(137)
128
(9)
-
-
495
-
(166)
329
3,270
3,270
512
(649)
(137)
-
-
518
174
(197)
495
(a) Movements
Capital reserve
Balance at beginning of year
Balance at end of year
Cash flow hedge reserve
Balance at beginning of year
Currency translation differences arising during the year
Balance at end of year
Asset revaluation reserve
Balance at beginning of year
Balance at end of year
Options reserve
Balance at beginning of year
Option expense
Transfer to share capital (options exercised)
Balance at end of year
(b) Nature and purpose of reserves
(i) Capital reserve
The capital reserve is used to isolate realised capital profits from disposal of non-current assets.
(ii) Asset revaluation reserve
The asset revaluation reserve is used to record increments and decrements in the value of non current
assets. The reserve can only be used to pay dividends in limited circumstances.
(iii} Options reserve
The options reserve is used to recognise the fair value of options issued but not exercised.
(iv) Cash flow hedge reserve
The cash flow hedge reserve is used to record gains or losses on foreign exchange contracts in a cash
flow hedge that are recognised directly in equity.
c) Retained profits
Balance at the beginning of year
Profit attributable to members of Select Harvests Limited
Total available for appropriation
Dividends paid
Dividends refunded
Balance at end of year
42,278
18,130
60,408
(22,156)
209
38,461
36,125
28,098
64,223
1,092
21,614
22,706
955
22,082
23,037
(21,945)
(22,156)
(21,945)
-
42,278
209
759
-
1,092
Select Harvests Annual Report 2008 69
Notes to the fi nancial statements
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
28. Reconciliaton of the net profi t after income tax to the net cash fl ows
from operating activities
Net profit
Non Cash Items
Depreciation and amortisation
Almond stock fair value adjustment
Almond trees fair value adjustment
Net loss on disposal of property, plant and equipment
Dividends received from controlled entities
Interest received
Management fees received
Changes in assets and liabilities
(Increase) in trade receivables
(Increase) / decrease in inventory
18,130
28,098
21,614
22,082
3,802
3,802
133
291
92
500
837
-
-
-
1,071
92
6
-
-
-
-
-
-
-
-
-
(20,500)
(22,000)
(2,929)
(1,247)
(3,915)
(4,554)
(7,561)
(9,064)
348
(5,487)
-
-
-
-
(Increase) / decrease in receivables and other assets
(1,865)
(1,712)
(26,335)
22,195
(Decrease) / increase in trade and other payables
(11,977)
11,993
968
29
(Decrease) / increase in income tax payable
(3,327)
472
(1,028)
472
Increase in deferred income tax liability
2,842
460
-
-
(Increase) / decrease in deferred tax assets
Increase in employee entitlements
69
105
(347)
407
(22)
(332)
13
129
Net cash flow from operating activities
1,995
29,791
(32,001)
17,065
Reconciliation of cash
Cash balance comprises:
Cash at bank
Bank overdraft
Closing cash balance
4,054
(50,551)
(46,497)
6,924
(1,285)
5,639
3,946
(50,551)
(46,605)
6,529
(1,285)
5,244
70
Select Harvests Annual Report 2008
Notes to the fi nancial statements
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
29. Expenditure commitments
Lease commitments – Group company as lessee
Commitments in relation to leases contracted for at the reporting date but not recognised as liabilities, payable:
Within one year
Later than one year but not later than five years
Later than five years
(i) Operating leases (non cancellable):
Minimum lease payments
• Not later than one year
• Later than one year and not later than five years
• Later than five years
• Aggregate lease expenditure contracted for at reporting date
Aggregate expenditure commitments comprise:
11,550
42,496
52,623
9,891
38,322
56,554
106,669
104,767
9,101
32,120
9,705
50,926
8,076
29,544
10,935
48,555
Aggregate lease expenditure contracted for at reporting date
50,926
48,555
Operating lease payments are for rental of premises, farming
and factory equipment.
(ii) Finance leases:
• Not later than one year
•
Later than one year and not later than five years
• Total minimum lease payments
• Future finance charges
•
Lease liability
- Current liability
- Non current liability
20
23
Finance leases are for various items of plant & equipment
(iii) Almond orchard leases:
Minimum lease payments
• Not later than one year
•
•
Later than one year and not later than five years
Later than five years
Aggregate expenditure commitments comprise:
257
-
257
(20)
237
237
-
237
133
260
393
(42)
351
114
237
351
2,213
10,376
42,919
1,701
8,541
45,619
Aggregate lease expenditure contracted for at reporting date
55,508
55,861
-
-
-
-
-
-
-
-
-
60
-
60
(1)
59
59
-
59
-
-
-
-
-
-
-
-
-
-
-
-
24
60
84
(9)
75
17
58
75
-
-
-
Select Harvests Annual Report 2008 71
Notes to the fi nancial statements
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
The almond orchard leases comprises the lease of a 512 acre almond orchard and a 1,002 acre lease from Sandhurst Trustees
Limited in which the consolidated entity has the right to harvest the almonds from the trees owned by the lessor for the term of
the agreement. The company also has first right of refusal to purchase the properties in the event that the lessor wished to sell.
Other leases within Select have renewal and first right of refusal clauses.
30. Events occuring after balance date
On 20 August 2008, the Directors declared a fully franked final dividend of 23 cents per ordinary share to
be paid on 1 October 2008 to shareholders registered at 5.00 pm on 10 September 2008.
Effective 15 August Mr Max Fremder retired as Chairman of The Board of Directors, succeeded by Mr Curt
Leonard.
There has been no other matter or circumstance, which has arisen since 30 June 2008 that has
significantly affected or may significantly affect:
a) the operations, in financial years subsequent to 30 June 2008, of the consolidated entity, or
b) the results of those operations, or
c) the state of affairs, in financial years subsequent to 30 June 2008, of the consolidated entity.
31. Earnings per share
The following reflects the income and share data used in the calculations of basic and diluted earnings
per share:
Profit from continuing operations
Profit attributable to equity holders of the company used in
calculating basic earnings per share
Diluted earnings per share:
Profit from continuing operations
Profit attributable to equity holders of the company used in
calculating diluted earnings per share
Weighted average number of ordinary shares used in calculating
basic earnings per share
Effect of dilutive securities:
Diluted earnings per share:
Share options
CONSOLIDATED
2008
$’000
2007
$’000
18,130
28,098
18,130
28,098
18,130
28,098
18,130
28,098
NUMBER OF SHARES
2008
2007
38,851,551
39,556,731
-
121,994
Adjusted weighted average number of ordinary shares used in
calculating diluted earnings per share
38,851,551
39,678,725
72
Select Harvests Annual Report 2008
Notes to the fi nancial statements
32. Remuneration of directors and key management personnel
Principles used to determine the nature and amount of remuneration
Remuneration levels are set to attract and retain appropriately qualified and experienced directors and
key management personnel. The Remuneration Committee may obtain independent advice on the
appropriateness of remuneration packages, given trends in the marketplace. Remuneration packages
include a mix of fixed remuneration, performance based remuneration, and equity based remuneration.
Executive directors and key management personnel may receive short term incentives based on
achievement of specific business plans and performance indicators, which include financial and
operational targets relevant to performance at the consolidated entity level, divisional level, or functional
level, as applicable, for the financial year. In addition, the consolidated entity offers executive directors
and key management personnel participation in the long-term incentive scheme involving the issue of
options to the employee under the executive share option scheme. The executive share option scheme
provides for the offer of a parcel of options to participating employees on an annual basis, with a three-
year expiry period, exercisable at the market price set at the time the offer was made. The options are
granted annually in three tranches on achievement of the performance hurdles.
Non-executive directors each receive a base fee of $50,000 per annum. The Chairman receives up to
twice the base fee. Non-executive directors do not receive any performance related remuneration nor are
they issued options on securities.
a) Directors
The following persons were directors of Select Harvests Limited during the financial year:
(i) Chairman – non-executive
M A Fremder
(ii) Executive director
J Bird, Managing Director
(iii) Non-executive directors
G F Dan O’Brien
J C Leonard
R M Herron
C G Clark (resigned 31 January 2008)
(b) Other key management personnel
The following persons also had authority and responsibility for planning, directing, and controlling the
continuing activities of the consolidated entity, directly or indirectly, during the financial year:
NAME
POSITION
EMPLOYER
M Bartholemew
Group Manager Sales & Marketing
Select Harvests Food Products Pty Ltd
K Martin
T Millen
Group Operations Manager
Select Harvests Limited
Group Horticultural & Farm Operations Manager
Kyndalyn Park Pty Ltd
L Van Driel
Group Trading Manager
Select Harvests Food Products Pty Ltd
P Chambers
Chief Financial Officer & Company Secretary
Select Harvests Limited
Select Harvests Annual Report 2008 73
Notes to the fi nancial statements
All of the above persons were also key management persons during the year ended 30 June 2008, except
for M Bartholomew who commenced employment with the consolidated entity on 20 May 2008;
P Chambers who commenced employment with the consolidated entity on 9 September 2007.
K Bush was a key management person in the year ended 30 June 2008 and ceased employment with the
consolidated entity on 20 May 2008; R Palmaricciotti was a key management person in the year ended 30
June 2008 and ceased employment with the consolidated entity on 9 September 2007.
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
(c) Key management personnel compensation
Short term employment benefits
2,061,756
1,826,293
1,277,091
1,255,792
Long service leave
Share based payments
33,147
92,881
28,000
158,591
23,334
72,799
18,000
132,809
2,187,784
2,012,884
1,373,224
1,406,601
The company has taken advantage of the relief provided by Corporations Regulations 2M.6.04 and has
transferred the detailed remuneration disclosures to the Directors’ report. The relevant information can
be found in Sections A to C of the remuneration report on pages 5 to 8.
(d) Equity instrument disclosures relating to key management personnel
Number of options held by directors and key management personnel
The movement during the financial year in the number of options over ordinary shares in the company
held, directly or indirectly, by each director and key management personnel is as follows:
2008
Directors
J Bird
Key Management Personnel
K Bush (Group Manager Sales & Marketing)
M Bartholomew (Group Manager Sales &
Marketing)
K Martin (Group Operations Manager)
T Millen (Group Horticultural & Farm
Operations Manager)
L Van Driel (Group Trading Manager)
R Palmaricciotti (Chief Financial Office and
Company Secretary)
P Chambers (Chief Financial officer &
Company secretary)
HELD AT
1 JULY 2007
GRANTED AS
REMUNERATION
EXERCISED
HELD AT
30 JUNE 2008
VESTED AND
EXERCISABLE AT
30 JUNE 2008
90,667
56,867
(101,400)
46,134
46,134
-
-
-
-
-
-
-
-
-
7,533
12,867
5,533
8,767
(6,000)
(12,300)
-
-
-
-
-
-
-
-
-
7,066
9,334
-
-
-
-
-
7,066
9,334
-
-
74
Select Harvests Annual Report 2008
Notes to the fi nancial statements
2007
Directors
J Bird
Key Management Personnel
K Bush (Group Manager Sales & Marketing)
K Martin (Group Operations Manager)
T Millen (Group Horticultural & Farm
Operations Manager)
HELD AT
1 JULY 2006
GRANTED AS
REMUNERATION
EXERCISED
HELD AT
30 JUNE 2007
VESTED AND
EXERCISABLE AT
30 JUNE 2007
92,200
86,067
87,600
90,667
90,667
-
-
-
-
-
-
-
-
-
-
5,600
7,333
5,400
7,533
7,533
L Van Driel (Group Trading Manager
4,100
12,667
3,900
12,867
12,867
R Palmaricciotti (Chief Financial Office and
Company Secretary)
M Mattia (Chief financial officer & Company
secretary)
R. Tanti (Sales Manager – Food Products)
W Turner (General Manager – Almond
Division)
-
-
-
-
26,200
26,200
7,400
-
13,867
18,600
21,267
18,600
-
-
-
-
-
-
-
-
No options held by directors or key management personnel are vested but not exercisable.
Number of shares held by directors and key management personnel
The movement during the financial year in the number of ordinary shares of the company held, directly
or indirectly, by each director and key management personnel, including their personally related entities,
is as follows:
2008
Directors - Non Executive
M A Fremder
J C Leonard
C G Clark
R M Herron
G F Dan O’Brien
Directors – Executive
J Bird
HELD AT
1 JULY 2007
RECEIVED AS
REMUNERATION
RECEIVED ON
EXERCISE OF
OPTIONS
OTHER – DRP,
SALES &
PURCHASES
TOTAL
5,777,234
484,797
23,892
5,000
51,090
518,122
-
-
-
-
-
-
-
-
-
-
-
-
5,777,234
96,982
-
3,772
3,679
581,779
23,892
8,772
54,769
101,400
-
619,522
Select Harvests Annual Report 2008 75
Notes to the fi nancial statements
2008
HELD AT
1 JULY 2007
RECEIVED AS
REMUNERATION
RECEIVED ON
EXERCISE OF
OPTIONS
OTHER – DRP,
SALES &
PURCHASES
Key Management Personnel
K Bush (Group Manager Sales & Marketing)
K Martin (Group Operations Manager)
T Millen (Group Horticultural & Farm
Operations Manager)
P Chambers (Chief Financial Officer and
Company Secretary)
L Van Driel (Group Trading Manager)
M Bartholemew (Group Sales & Marketing
Manager)
2007
Directors - Non Executive
M A Fremder
J C Leonard
C G Clark
R M Herron
G F Dan O’Brien
Directors – Executive
J Bird
Key Management Personnel
K Bush (Group Manager Sales & Marketing)
K Martin (Group Operations Manager)
T Millen (Group Horticultural & Farm
Operations Manager)
L Van Driel (Group Trading Manager)
TOTAL
-
-
45,444
-
-
-
TOTAL
5,777,234
484,797
23,892
5,000
51,090
-
-
39,444
-
-
-
-
-
-
-
-
-
-
-
6,000
-
-
-
-
-
12,300
(12,300)
-
-
HELD AT
1 JULY 2006
RECEIVED AS
REMUNERATION
RECEIVED ON
EXERCISE OF
OPTIONS
OTHER – DRP,
SALES &
PURCHASES
5,662,365
455,932
23,892
5,000
50,000
426,522
-
-
34,044
38,700
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
114,869
28,865
-
-
1,090
87,600
4,000
518,122
-
-
5,400
3,900
-
-
-
-
-
39,444
42,600
-
(e) Other transactions with directors and key management personnel
Transactions with directors and key management personnel that require disclosure in accordance with
AASB 124 for the year ended 30 June 2008 are detailed in Note 34.
76
Select Harvests Annual Report 2008
Notes to the fi nancial statements
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
33. Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor
of the parent entity, its related practices and non-related audit firms:
Amounts received or due and receivable by PricewaterhouseCoopers for:
• An audit or review of the financial report of the
entity and any other entity in the consolidated
entity
• Other financial services
(a)
177,800
154,632
177,800
154,632
137,307
315,107
30,140
184,772
137,307
315,107
30,140
184,772
(a) Amounts paid or payable to an auditor for non-audit services provided during the year
by the auditor to any entity that is part of the consolidated entity for:
PricewaterhouseCoopers:
Taxation compliance and advice
IT consulting
Other
34. Related party disclosures
(a) Parent entity
33,910
18,170
33,910
18,170
80,897
-
80,897
22,500
137,307
11,970
30,140
22,500
137,307
-
11,970
30,140
The parent entity within the consolidated entity is Select Harvests Limited.
(b) Subsidiaries
Interests in subsidiaries are set out in Note 37.
(c) Key management personnel
Disclosures relating to key management personnel are set out in Note 32.
(d) Wholly owned group transactions
Dividend revenue
Subsidiaries
Interest income
Subsidiaries
Tax consolidation legislation
Current tax payable assumed from wholly-owned tax
consolidated entities
Other transactions
Management fees
-
-
-
-
-
-
-
-
20,500
22,000
2,774
1,029
-
-
3,915
4,554
Management fees are received by Select Harvests Limited from controlled entities under normal terms
and conditions.
Select Harvests Annual Report 2008 77
Notes to the fi nancial statements
(e) Director related entity transactions
Services
Select Harvests Limited has an Almond Orchard Management Agreement and a Land Lease agreement
with Maxdy Nominees Pty Ltd, a company in which Mr M A Fremder is a director. Under the terms of
the agreements, Select Harvests Limited has developed and continues to manage 300 acres of almond
orchard on a fee basis for Maxdy Nominees Pty Ltd.
In addition, Select Harvests Limited will process and sell the entire production of the orchard for a 25 year
period. The consolidated entity received an amount of $1,514,000 (2007: $1,444,439) during the financial
year in relation to the above contract. The agreements are under normal terms and conditions no more
favourable than those which it is reasonable to expect the entity would have adopted if dealing with the
director or director related entity at arms length in the same circumstances.
Select Harvests Limited also has an Almond Orchard Management Agreement with Almas Almonds
Pty Ltd, a company which manages the Almas Almonds Partnership in which both Mr M A Fremder and
Mr J C Leonard have an indirect interest. Under the terms of the agreement, Select Harvests Limited is
developing and shall manage 1,753 acres of almond orchard on a fee basis for Almas Almonds Pty Ltd.
In addition, Select Harvests Limited will process and sell the entire production of the orchard for the
entire 30 year life of the orchard. The consolidated entity received an amount of $3,242,000 (2007:
$4,119,581) during the financial year in relation to the above contract. The agreements are under normal
terms and conditions no more favourable than those which it is reasonable to expect the entity
would have adopted if dealing with the director or director related entity at arms length in the same
circumstances.
A non-executive Director of the Company, Mr Dan O’Brien, acquired from Select Harvests, via an associated
entity. $89,344 worth of Almond Hull suitable for livestock feed. This was purchased at market prices.
NOTES
CONSOLIDATED
PARENT ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
(f) Outstanding balances
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Non current receivables
Subsidiaries
Non current payables
Subsidiaries
Loans to/from subsidiaries
Beginning of the year
Loans advanced
Loan repayments received
Interest charged
End of year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
126,352
51,063
41,261
16,904
34,159
28,292
329,830
276,538
(281,672)
(271,700)
2,774
85,091
1,029
34,159
Loans are made by Select Harvests Limited to controlled entities under normal terms and conditions.
Loans are made to Select Harvests Limited by controlled entities under normal terms and conditions.
78
Select Harvests Annual Report 2008
Notes to the fi nancial statements
35. Segment information
Segment products and locations
The consolidated entity has the following business segments:
• The food products division processes, markets, and distributes edible nuts, dried fruits, seeds, and a range
of natural health foods.
• The almond operation comprises the growing, processing and sale of almonds to the food industry
from company owned almond orchards; the sale of a range of management services to external owners
of almond orchards, including orchard development, tree supply, farm management, land rental and,
irrigation infrastructure; and the sale of almonds on behalf of external investors.
The consolidated entity operates predominantly within the geographical area of Australia.
Select Harvests Annual Report 2008 79
Notes to the fi nancial statements
35. Segment information continued
FOOD PRODUCTS
ALMOND
OPERATIONS
TOTAL OPERATIONS
ELIMINATIONS AND
CORPORATE
CONSOLIDATED
ENTITY
2008
$’000
2007
$’000
2008
$’000
2007
$’000
2008
$’000
2007
$’000
2008
$’000
2007
$’000
2008
$’000
2007
$’000
Operating Revenue
Sales of goods & services
to customers outside the
consolidated entiry
Intersegment revenue
Sale of Almonds to customers
outside the consolidated entity
on behalf of managed orchard
owners (Note (a))
Less Cost of Almonds sold by the
consolidated entity on behalf of
managed orchard owners (Note
(a))
Other revenue
Unallocated revenue
124,251
138,298
100,404
91,200
224,655
229,498
-
-
224,655
229,498
-
-
-
-
-
83
21,150
25,661
21,150
25,744
(21,150)
(25,744)
-
-
-
26,096
27,659
26,096
27,659
-
-
26,096
27,659
-
(43,210)
(45,767)
(43,210)
(45,767)
17,113
18,108
(26,097)
(27,659)
47
-
592
1,164
-
-
592
-
1,211
-
-
-
-
-
592
-
1,211
-
Total revenue
124,251
138,428
105,032
99,917
229,283
238,345
(4,037)
(7,636)
225,246
230,709
Operating profit before interest,
tax, and internal charges tax, and
internal charges
925
7,422
29,514
36,827
30,439
44,249
(3,320)
(3,700)
27,119
40,549
Segment assets (excluding inter-
company debts)
70,051
70,638
125,391
85,771
195,442
156,409
506
3,744
195,948
160,153
Segment liabilities (excluding
inter-company debts)
9,922
9,022
65,071
48,555
74,993
57,577
26,884
7,072
101,877
64,649
Acquisition of non-current
segment assets
Depreciation and amortisation of
1,221
1,025
28,739
12,009
29,960
13,034
140
105
30,100
13,139
segment assets
1,597
1,434
2,072
2,093
3,669
3,527
133
275
3,802
3,802
Note (a) - The consolidated entity provides a range of management and other services to externally owned or third party orchards. In
addition to these services, the consolidated entity sells the crop of almonds harvested from the orchards of the external owners. These
almonds are sold by the consolidated entity on a pooled basis, the proceeds from which are distributed to the pool participants. The
consolidated entity earns a marketing fee for providing this service. Segment revenues, expenses and results include transfers between
segments. Such transfers are priced on an “arms-length” basis and are eliminated on consolidation.
80
Select Harvests Annual Report 2008
Notes to the fi nancial statements
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Select Harvests Annual Report 2008 81
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Notes to the fi nancial statements
37. Controlled entities
Parent Entity:
Select Harvests Limited
Subsidiaries of Select Harvests Limited:
Kyndalyn Park Pty Ltd
Select Harvests Food Products Pty Ltd*
Subsidiaries of Select Harvests Food Products Pty Ltd*:
Meriram Pty Ltd
Kibley Pty Ltd
38. Employee benefi ts
Executive share option scheme
COUNTRY OF INCORPORATION
PERCENTAGE OWNED (%)
2008
2007
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
100
100
100
The consolidated entity has in place an executive share option scheme. The scheme provides for the
board to offer to eligible employees a parcel of options, which will be granted for no consideration
in three equal tranches over a period of approximately three years from the date of each result
announcement to the ASX in each financial year.
Each option is convertible into one ordinary share. The exercise price of the options, determined in
accordance with the rules of the scheme, is based on the weighted average price of the company’s
shares over the first 50 sales of shares in the ordinary course of trading on the stock market of the ASX
immediately following the result announcement.
All options expire on the earlier of their expiry date or termination of the employee’s employment. The
granting of options is conditional upon the consolidated entity achieving growth of at least 10% in EPS
in each financial year over the preceding financial year. Accordingly, the scheme does not represent
remuneration for past services.
There are no voting or dividend rights attached to the options.
The assessed fair value at offer date is determined using a Black-Scholes option pricing model that takes
into account the exercise price, the term of the option, the impact of dilution, the share price at offer date
and expected price volatility of the underlying share, the expected dividend yield and the risk free interest
rate for the term of the option.
82
Select Harvests Annual Report 2008
Notes to the fi nancial statements
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Notes to the fi nancial statements
38. Employee benefi ts (continued)
The amounts recognised in the financial statements of the consolidated entity in relation to executive share options exercised
during the financial year were:
Issued and Paid up Capital
2008
$’000
1,097
2007
$’000
1,380
(b) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense
were as follows:
Options issued under employee option plan
CONSOLIDATED
PARENT ENTITY
2008
$’000
-
-
2007
$’000
174
174
2008
$’000
-
-
2007
$’000
187
187
39. Contingent liabilities
Cross guarantees given by the entities comprising the consolidated entity are detailed in Note 23.
84
Select Harvests Annual Report 2008
Directors’ declaration
In the directors’ opinion:
(a) the financial statements and Notes set out on pages 36 to 84 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
(ii) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2008 and of their
performance for the financial year ended on that date; and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and
payable; and
The directors have been given the declarations by the Managing Director and Chief Financial Officer required under section 295A
of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
J C Leonard
Chairman
Melbourne, 20 August 2008
Select Harvests Annual Report 2008 85
Directors’ Declaration
86
Select Harvests Annual Report 2008
Select Harvests Annual Report 2008 87
ASX additional information
Additional information required by the Australian Stock Exchange Limited and not shown
elsewhere in this report is as follows. The information is current as at 31 July 2008.
(a) Distribution of equity securities
The number of shareholders, by size of holding, in each class of share are:
NUMBER OF ORDINARY SHARES
NUMBER OF SHAREHOLDERS
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
1,387
1,333
311
253
35
The number of shareholders holding less than a marketable parcel of shares are:
NUMBER OF ORDINARY SHARES
4,888
NUMBER OF SHAREHOLDERS
141
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
1
2
3
Maxdy Nominees Pty Ltd
Almonds Australia Pty Ltd
HSBC Custody Nominees (Australia) Limited
4 MF Custodians Limited
5
6
7
8
9
Invia Custodian Pty Ltd (Black A/C)
Le Grand Pty Ltd
John Bird
UBS Nominees Pty Ltd
Longo Pty Ltd
10 Mr Petrus Cornelius Nicolaas Middencorp
11 Mid Manhattan Pty Ltd
12 UBS Wealth Management Australia Nominees Pty Ltd
13 National Nominees Limited
14 Mirrabooka Investments Limited
15
AMP Life Limited
88
Select Harvests Annual Report 2008
LISTED ORDINARY SHARES
NUMBER OF SHARES
PERCENTAGE OF ORDINARY
5,777,234
4,500,000
4,429,362
2,294,944
658,838
648,700
619,522
493,136
460,871
460,767
452,878
381,902
368,857
366,777
343,564
14.8
11.5
11.4
5.9
1.7
1.7
1.6
1.3
1.2
1.2
1.2
1.0
1.0
0.9
0.9
ASX additional information
16
17
Invia Custodian Pty Ltd (Wilson INVMT Fund Ltd A/C)
ANZ Nominees Ltd
18 Mutual Trust Pty Ltd (Charles Baillieu A/C)
19
Thurston Investments Pty Ltd
20 Dr John Carey
(c) Substantial shareholders
The names of substantial shareholders are:
Maxdy Nominees Pty Ltd
Almonds Australia Pty Ltd
HSBC Custody Nominees (Australia) Limited
LISTED ORDINARY SHARES
NUMBER OF SHARES
PERCENTAGE OF ORDINARY
343,241
310,373
300,000
280,697
217,215
0.9
0.8
0.8
0.7
0.6
NUMBER OF SHARES
5,777,234
4,500,000
4,429,362
(d) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
(e) The Company is listed on the Australian Stock Exchange. The home exchange is Melbourne.
Select Harvests Annual Report 2008 89
Corporate information
ABN 87 000 721 380
Directors
J C Leonard (Chairman)
J Bird (Managing Director)
G F Dan O’Brien (Non-Executive Director)
M Fremder (Non-Executive Director)
R M Herron (Non-Executive Director)
Company Secretary
P Chambers
Registered Office – Select Harvests Limited
360 Settlement Road
THOMASTOWN VIC 3074
Postal address
PO Box 5
THOMASTOWN VIC 3074
Telephone
(03) 9474 3544
Facsimile
(03) 9474 3588
Email
info@selectharvests.com.au
Solicitors
Gadens Lawyers
Bankers
Australia and New Zealand Banking Group Limited
Auditor
PricewaterhouseCoopers
Share Register
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Telephone (03) 9415 5040
Facsimile (03) 9473 2562
Internet Address
www.selectharvests.com.au
90
Select Harvests Annual Report 2008
Select Harvests Limited
ABN 87 000 721 380
Directors
J C Leonard (Chairman)
J Bird (Managing Director)
G F Dan O’Brien (Non-Executive Director)
M Fremder (Non-Executive Director)
R M Herron (Non-Executive Director)
Company Secretary
P Chambers
Registered Office – Select Harvests Limited
360 Settlement Road
THOMASTOWN VIC 3074
Postal address
PO Box 5
THOMASTOWN VIC 3074
Telephone (03) 9474 3544
Facsimile (03) 9474 3588
Email info@selectharvests.com.au
Solicitors
Gadens Lawyers
Bankers
Australia and New Zealand Banking Group Limited
Auditor
PricewaterhouseCoopers
Share Register
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Telephone (03) 9415 5040
Facsimile (03) 9473 2562
www.selectharvests.com.au
Select Harvests Limited
ABN 87 000 721 380
PO Box 5
THOMASTOWN VIC 3074
360 Settlement Road
THOMASTOWN VIC 3074
Telephone (03) 9474 3544
Facsimile (03) 9474 3588
Email info@selectharvests.com.au
www.selectharvests.com.au