Positioned
for growth
Annual
Report
2010
Select Harvests Annual Report 2010
1
Contents
INTRODUCTION
BUSINESS MODEL
KEY FINANCIAL RESULTS
FROM THE CHAIRMAN
OUR BOARD OF DIRECTORS
FROM THE CEO
THE GLOBAL ALMOND MARKET
AUSTRALIAN ALMONDS
GROWING OUR ORCHARDS
OUR EXECUTIVE TEAM
MARKETING OUR PRODUCTS
ENVIRONMENT AND COMMUNITY
STATISTICAL SUMMARY
FINANCIAL REPORT CONTENTS
DIRECTORS’ REPORT
AUDITORS’ INDEPENDENCE DECLARATION
CORPORATE GOVERNANCE STATEMENT
FINANCIAL REPORT
INCOME STATEMENT
STATEMENT OF COMPREHENSIVE INCOME
BALANCE SHEET
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
ASX ADDITIONAL INFORMATION
2
Select Harvests Annual Report 2010
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3
4
5
6
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27
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33
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78
79
81
Select Harvests
“Select Harvests is one of the world’s largest almond orchard
managers. We are committed to driving long-term sustained
earnings growth for our shareholders by leveraging our
expertise in establishing and managing almond orchards
and processing, marketing and selling almonds.”
“The fundamentals of the global almond industry remain
very attractive with demand expected to outstrip supply
within fi ve years. Select Harvests is well positioned to grow
and diversify its portfolio of owned, leased and managed
orchards, and to increase its exposure to the whole almond
value chain.”
JOHN BIRD, CEO, SELECT HARVESTS
Shareholder Information
Annual General Meeting
The annual general meeting will be held
on 27th October 2010, at the RACV Club,
501 Bourke Street, Melbourne, Victoria at
11.00 am. A separate notice of meeting
has been posted to all shareholders.
2011 Calendar
•
•
•
Feb Announcement of interim results
Apr Payment of interim dividend
Aug
Announcement of preliminary
full year results
•
•
•
Sep Annual report to shareholders
Oct Payment of fi nal dividend
Oct Annual general meeting
Select Harvests Annual Report 2010
1
Business model
Select Harvests is a diverse almond growing, processing and
marketing company. We are the leading orchard manager
and marketer in Australia with best-in-class infrastructure,
production and processing facilities.
Select Harvests has leading capabilities across the whole
almond value chain. We are well positioned to capture
value from orchard development and management, primary
and value added processing, and sales and marketing into
growing domestic and export markets.
We create value for our share holders through a combination
of managing these activities for third party orchard owners
on a fee for service basis in our Managed Orchards and
through owning and leasing Company Orchards.
OPERATING EBIT
2009: $30.0m
2010: $29.6m
ORCHARD DEVELOPMENT
— NURSERY
— ORCHARD ESTABLISHMENT
MANAGED ORCHARDS EBIT
ORCHARD MANAGEMENT
2009: $13.7m
2010: $11.2m
ACRES : 34,691
— ALMOND GROWING
— HARVESTING
ALMOND PROCESSING EBIT
PROCESSING
2009: $9.2m
2010: $6.5m
2009 CROP: 19,400 mt
2010 CROP: 17,200 mt (est)
— ALMOND PROCESSING
— VALUE-ADDED PROCESSING
SALES & MARKETING EBIT
SALES & MARKETING
2009: $3.3m
2010: $1.9m
— ALMOND POOL SALES
— VALUE-ADDED PRODUCT SALES
2
Select Harvests Annual Report 2010
COMPANY ORCHARDS EBIT
2009: $2.7m
2010: $6.8m
ACRES: 3,600
2009 CROP: 2,600 mt
2010 CROP: 2,800 mt (est)
VALUE-ADDED
PROCESSING EBIT
2009: $1.1m
2010: $3.2m
Key fi nancial results
A $’000’s
Sales revenue
EBIT
– Management services
– Almond orchards
Almond division
Food division
Operating EBIT
Corporate costs
EBIT
Net profi t after tax
Year ended 30 June 2010
Year ended 30 June 2009
% increase (decrease)
238,376
248,581
17,717
6,791
24,508
5,104
29,612
(3,580)
26,032
17,253
22,902
2,706
25,608
4,459
30,067
(3,240)
26,827
16,712
EARNINGS PER SHARE
-4.1%
-22.6%
151.0%
-4.3%
14.5%
-1.5%
10.5%
-3.0%
3.2%
+6%
+18%
+42%
-34%
-9%
2%
CENTS
70
60
50
40
30
20
10
0
2005
2006
2007
2008
2009
2010
ORDINARY DIVIDEND PER SHARE
CENTS
60
50
40
30
20
10
0
+8%
+26%
+62%
-21%
75%
-73%
2005
2006
2007
2008
2009
2010
Select Harvests Annual Report 2010
3
I am also pleased to report that we
have strengthened the Board of the
Company with the appointment of Fred
Grimwade as a Non-Executive Director.
Mr Grimwade is a highly experienced
director and corporate adviser and is a Non
Executive Director of AWB and Chairman
of CPT Global. His depth of experience
in agribusiness and banking are highly
complimentary to our existing board and
will be invaluable in supporting Select
Harvests through its next stage of growth
and development.
As the world’s second largest manager
of almond orchards, the outlook for
Select Harvests is positive. The demand
for almonds globally remains strong
and Australia continues to be highly
competitive, particularly in premium
export markets. The global demand and
supply dynamics continue to support a
stable almond market and strong almond
price fundamentals.
We have the business model, expertise
and fi nancial fl exibility to continue to
grow, diversify and broaden our income
stream. Select Harvests is a world-class
grower, processor and marketer and we
are well positioned to leverage all of the
expertise that comes with that.
I would like to take this opportunity to
thank all of our team for their hard work
and commitment, and to extend the
Board’s gratitude to our shareholders for
their support during a challenging period.
From the Chairman
“We have a strong balance
sheet, a clear strategy
for growth, and are well
positioned to take advantage
of an attractive global
almond market”
CURT LEONARD, CHAIRMAN
stream, increase control over future
earnings and broaden access to the whole
almond value chain. The fallout of the
MIS sector is now presenting us with new
opportunities as established orchards are
becoming available for acquisition or long-
lease at a discount to replacement value.
Our strategy requires a capital structure
which provides fl exibility to take
advantage of growth opportunities in
Company Orchards. We have successfully
concluded a review of our capital structure
and we now have a strengthened
balance sheet with the capacity to fund
growth. In February, we refi nanced our
banking facilities with a $78 million debt
facility comprising $40m of term debt.
In September, we raised $48m from
the capital markets through an equity
raising. The proceeds of the equity raising
and the new debt facilities will fund
investment and development of existing
projects as well as future opportunities.
We will balance our investment between
short term cash generating assets which
include established orchards and longer
term growth initiatives like our Western
Australian greenfi eld development. We
maintain disciplined return on investment
criteria when considering new investments.
During the year we have certainly not let
the grass grow under our feet. We are
already making very good progress with
our strategy to expand our Company
Orchards business. In March we entered
into a long term lease for 3,000 acres
of established orchards at Hillston in
NSW and planted the fi rst 2,000 acres of
greenfi eld orchards in the Dandaragan
Plateau region of Western Australia. As a
result we more than doubled our Company
Orchards from 3,600 acres to 8,600 acres
and Company Orchards now comprise
some 20% of the business. In addition we
have recently acquired a further 530 acres
at Lake Powell. This acquisition is due to
complete in October 2010.
This has been a year of signifi cant
transition for Select Harvests. I am pleased
to report that we have successfully
navigated the challenges presented to
our business following the collapse of
Timbercorp and we are now in good shape
to put a period of uncertainty behind us
and move forward with certainty and
confi dence. Following the transition of the
29,500 acres of Timbercorp orchards into
new ownership in January of this year we
secured a management agreement with
the new owners, Olam, for an initial three
year period, refl ecting the strength of our
credentials as professional farm managers.
We delivered another year of solid
earnings, with net profi t after tax up
3.2% to $17.3 million and cashfl ow from
operating activities of $25.5 million, an
increase of almost 13% on last year. Our
robust earnings performance, strong cash
generation and the certainty provided
by the Olam contract has enabled us to
reinstate our full year dividend. We are
pleased to be declaring a fi nal fully franked
dividend of 11c per share which will be
payable on 4th October 2010.
The Australian almond industry has
undergone signifi cant change following
the demise of several large Managed
Investment Schemes (MIS) and our
strategy has evolved to refl ect these
changes and ensure that we leverage our
strong capabilities in establishing and
managing almond orchards as well as
processing and selling almonds. When
the MIS sector was strong it made sense
for us to focus on managing orchards on
behalf of third parties, a strategy which
required minimal capital and delivered
an annuity-like income stream.
While we will continue to leverage
our world-class orchard management,
processing and marketing capabilities to
grow our managed services business, we
believe that growing Company Orchards
will enable us to diversify our earnings
4
Select Harvests Annual Report 2010
Our Board of Directors
CURT LEONARD—Chairman
Curt joined the Board on 21 July 2004.
He 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 Pacifi c of all Mars businesses, and
a Director of the Managing Board of
Mars Incorporated global business. Curt
is a Director of Patties Foods Limited.
He is Chairman of the Board, a member
of the Audit and Risk committee and
Remuneration Committee.
JOHN BIRD— CEO
John became the CEO of Select Harvests
Limited in January 1998. He 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. Through his
deep industry experience the company has
developed over 30,000 acres of almond
orchards during the last ten years. John is
a member of the Nomination Committee.
FRED GRIMWADE—
Non- Executive Director
Fred was appointed to the Board on
27 July, 2010. He works with a wide range
of companies in a board or advisory capacity.
He is a Non-Executive Director of AWB
Limited and Chairman of CPT Global
Limited, and is a Principal and Executive
Director of Fawkner Capital. He has held
General Management positions in Colonial
Agricultural Company, Colonial Mutual
Group, Colonial First State Investments
Group, Western Mining Corporation and
Goldman Sachs & Co. Fred is a member of
the Remuneration Committee, Audit and Risk
Committee and the Nomination Committee.
MAX FREMDER —
Non-Executive Director
Max joined the Board in March 1996
Max joined the Board in March 1996
and from that time was Chairman of the
and from that time was Chairman of the
Board until retiring from this position
Board until retiring from this position
on 15 August, 2008. He is formerly a
on 15 August, 2008. He is formerly a
director of IAMA Limited, and founder of
director of IAMA Limited, and founder of
Nufarm, one of Australia’s largest chemical
Nufarm, one of Australia’s largest chemical
manufacturers for the rural industry.
manufacturers for the rural industry.
Mr Fremder also was a Non-Executive
Mr Fremder also was a Non-Executive
Director of Tassal Limited between 3
Director of Tassal Limited between 3
October 2003 and 18 March 2005. Member
October 2003 and 18 March 2005. Member
of the Remuneration Committee, Audit
of the Remuneration Committee, Audit
and Risk Committee and Chairman of the
and Risk Committee and Chairman of the
Nomination Committee.
Nomination Committee.
ROSS HERRON—
Non-Executive Director
Ross joined the Board on 27 January
Ross joined
2005. A Chartered Accountant, Mr
2005. A Ch
Herron retired as a Senior Partner
Herron reti
of PriceWa
of PriceWaterhouseCoopers in
December 2002. He was a member
December
of the Coopers & Lybrand (now
of the Coop
PriceWaterhouseCoopers) Board of
PriceWater
Partners where he was National Deputy
Partners w
Chairman and was the Melbourne
Chairman a
offi ce Managing Partner for six years.
offi ce Man
He also served on several international
He also ser
committees within Coopers & Lybrand.
committee
He is a Non-Executive Director of GUD
He is a Non
Holdings Ltd, Heemskirk Consolidated
Holdings Lt
Ltd, Royal A
Ltd, Royal Automobile Club of Victoria
(RACV) Ltd
(RACV) Ltd and a major industry
superannua
superannuation fund. Ross is Chairman
of the Audit and Risk Committee, and
of the Audi
member of the Remuneration and
member of
Nomination
Nomination Committees.
MICHAEL CARROLL—
Non-Executive Director
Michael joined the Board on 31 March,
2009. He works with a range of
agribusiness companies in a board and
advisory capacity, and has directorships
with Meat and Livestock Australia, the
Rural Finance Corporation, Rural Funds
Management, and Warrnambool Cheese
and Butter. He has 18 years’ experience
in banking and fi nance, having lead and
established the Agribusiness division
within the National Australia Bank. He has
worked for a number of companies in the
agricultural sector. He is Chairman of the
Remuneration Committee, and a member
of the Audit and Risk Committee and
Nomination Committee.
Select Harvests Annual Report 2010
5
From the CEO
JOHN BIRD, CEO
Over the last 12 months Select Harvests
has laid fi rm foundations for future growth.
We have adapted our strategy to refl ect
the signifi cant changes in our operating
environment and hit the ground running,
delivering on a number of important
milestones during the year.
We secured a three year contract
with Olam to manage 29,500 acres
of former Timbercorp orchards in
Northern Victoria and have made good
progress in expanding our Company
Orchards business adding 3,000 acres at
Hillston, NSW and planting 2,000 acres
for our Western Australian orchard
development. We have also agreed to
acquire 530 acres of almond orchards
at Lake Powell which become Company
Orchards in October 2010.
We have delivered a solid fi nancial
performance this year with net profi t
after tax improving by 3% to $17.3 million.
The result was impacted by the revised
fees from the new Olam contract, a
lower crop tonnage, and the delay in the
harvest causing a deferral of processing
and marketing fee income into the next
fi nancial year. Our Company Orchards
business performed strongly and the
realignment of our Food Division continues
to deliver improved returns.
Importantly we now have the right capital
structure to enable us to take advantage
of growth opportunities where it makes
fi nancial sense for us to do so.
2010 Almond Crop
The 2010 crop is estimated to be 20,000
metric tons, slightly down on the 2009
record crop of 22,000 metric tons. While
crop estimates early in the growing cycle
indicated another record yield for 2010, a
number of factors impacted crop volumes.
These included the exceptionally high
levels and frequency of rainfall during
harvest, lower than optimal investment in
6
Select Harvests Annual Report 2010
the younger orchards in the aftermath of
Timbercorp going into administration, and
the cumulative effect of three years of
reduced water application.
Managed Orchards
The performance of the Managed
Orchards division refl ects a number of key
events and developments. Following the
demise of Timbercorp and other Managed
Investment Schemes, we played a
signifi cant role in maintaining 29,500 acres
of Timbercorp orchards as they were sold
to Olam International. In January of this
year we reached agreement to manage
these assets for an initial period of three
years. The agreement includes baseline
fees for our services and incentives based
on performance hurdles being achieved.
EBIT from our Managed Orchards declined
from $22.9 million in 2009 to $17.7
million in 2010. Managed Orchards EBIT
was impacted by a number of factors
including a lower crop than last year and
the rebasing of terms for base fee income
in the new Olam contract. Processing
and marketing fee income was impacted
by the volume and timing of the harvest
which resulted in a lower proportion of
income being recognized this year than
last year.
The total 2010 crop for Managed Orchards
is estimated to be 17,200 metric tons
compared to 19,400 metric tons last year.
This is below earlier estimates primarily
due to the exceptional high levels and
frequency of rainfall during harvest,
lower than optimal investment in the
younger orchards in the aftermath of
Timbercorp going into administration,
and reduced water applications over the
last three years.
All orchards have returned to a full
horticultural program including normal
water applications following three years
of drought management. It is expected
yields will return to normal levels and
that this, combined with an increase in
the maturity profi le of the trees will drive
a further uplift in volumes which will
increase our processing and marketing
fee income.
Company Orchards
Company Orchards EBIT grew from $2.7m
to $6.8m driven by the crop increasing to
2,800 metric tons, an improvement in the
almond price, improved maturity profi le of
the orchards and a return to more normal
water allocations, lowering the requirement
for temporary water. 300 acres of orchards
transitioned from Managed Orchards to
Company Orchards during the year. This is a
particularly encouraging performance given
the company’s strategic focus to expand
our Company Orchards in the future, and
further demonstrates the opportunity to
leverage our expertise across the almond
value chain.
During the year we increased Company
Orchards from 3,600 acres to 8,600 acres.
In March we signed a long term lease
with Rural Funds Management covering
3,000 acres of almond orchards near
Hillston in New South Wales. These
orchards were planted in 2007 and 2008
and will start reaching maturity from
2014 with a fi rst crop expected as soon as
next year. They are in good condition and
are serviced by bore water from a reliable
groundwater source.
In Western Australia we have begun
Stage 1 of our greenfi elds development at
the Dandaragan Plateau with the planting
of 2,000 acres due to yield a fi rst crop in
2013 and reach full maturity in 2017.
Water
I am pleased to report that there has
been a signifi cant improvement in water
allocations in the Murray Darling as the
impact of several years of drought has
begun to abate. Following a number of
years of drought, we implemented a
drought management program which
resulted in a 20% reduction in water
applications over the last three years.
We have made good progress on driving
irrigation effi ciencies in our business and
will continue to do so.
There have been unseasonably high levels
of rainfall in Victoria during the course of
this calendar year resulting in signifi cant
infl ows into the Victorian Murray River
system. Water allocations are at 94%
compared to 13% last year while the Hume
Dam is running at 77% capacity set against
just 29 % in 2009.
The improved water outlook has enabled
us to return to full water applications in the
2011 crop which will support the orchards
returning to normal yields in the future.
More widely we have diversifi ed water
sources for almond production with our
investment in greenfi eld developments in
Western Australia, and our expansion of
Company Orchards into New South Wales.
Food Division
The performance of our Food Division was
particularly encouraging and demonstrated
that we have begun to reap the rewards
of realigning the business. The realisation
of cost savings following consolidation of
our manufacturing facilities in Melbourne
has delivered an improved and more
sustainable cost base. Almond sales
increased by 10% over the year driven by
strong selling initiatives in conjunction with
the marketing program rolled out by the
Almond Board of Australia.
Market share in the cooking category
reached its highest level for four
years, through the continued strong
performance of the “Lucky” brand. It is
pleasing that overall our EBIT from value
added processing rose from $1.1m to $3.1m.
Investing for Growth
Select Harvests is in great shape to take
advantage of further growth opportunities
to increase total acreage in Company
Orchards and Managed Orchards. Our
improved capital structure gives us the
fl exibility to pursue opportunities both as
an acquirer and developer of orchards as
well as a manager, marketer and processor
of almonds.
With this in mind we anticipate our
future growth will come from:
Outlook
In our next fi nancial year Select Harvests
will benefi t from an increase in Company
Orchards acreage as well as an improved
maturity profi le and higher water
applications across our Company Orchards
and Managed Orchards businesses.
The Olam orchards will benefi t from a
full horticultural program which has
resumed following the transition of
ownership from Timbercorp.
Our growth strategy is supported in the
medium term by volume growth as our
existing orchards reach maturity. Based
on standard industry yields our current
43,300 acres under management would be
expected to produce 52,000 metric tons
per annum at full maturity. This improving
maturity profi le puts us in a strong
position to capitalise on increasing global
demand for almonds.
•
•
Leveraging our core competencies,
capabilities and processing capacity
to grow our share of managed services
(farm management, processing and
marketing) in relation to orchards
not currently managed by Select
Harvests. We will look to leverage the
presence of Company Orchards in new
regions to grow the management
services business.
Acquisition or long term lease of
established orchards that are nearly
or fully mature and therefore are,
or soon will be, cash generative.
Recent examples include the long
lease agreement with Rural Funds
Management for 3,000 acres at
Hillston, NSW, and the agreed proposed
acquisition of 530 acres at Lake Powell.
• Leveraging our industry leading
orchard establishment experience
through greenfi eld developments.
Select Harvests has now planted 2,000
acres of greenfi eld orchard development
at our site in the Dandaragan Plateau
region of Western Australia. Long-term
there is the potential to develop up to
10,000 acres of almond orchards in
this location, further diversifying our
orchard portfolio.
Select Harvests Annual Report 2010
7
The Global Almond Market
WORLD ALMOND SUPPLY VS DEMAND
)
S
B
L
N
O
I
L
L
I
M
(
3,000
2,500
2,000
1,500
1,000
500
0
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
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4
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2
5
0
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6
0
0
2
7
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2
8
0
0
2
9
0
0
2
0
1
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2
1
1
0
2
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
WORLD PRODUCTION
ANNUAL SUPPLY
DEMAND
CARRY-OUT
Global demand for almonds is expected to outstrip supply within the next fi ve years
USA ANNUAL PRODUCTION
)
S
B
L
N
O
I
L
L
I
M
(
1,800
1,500
1,200
900
600
300
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
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1
0
9
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1
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1
2
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3
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9
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1
6
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1
7
9
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1
8
9
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1
9
9
9
1
0
0
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2
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3
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2
6
0
0
2
7
0
0
2
8
0
0
2
9
0
0
2
0
1
0
2
CROP (MILLION LBS)
BEARING ACRES
KG/ACRE
USA ALMOND CROP ANNUAL SHIPMENTS
180
150
120
90
)
S
B
L
N
O
I
L
L
I
M
(
60
30
0
398 482
483
304
525
520
534 556 536 499 609
533 612 573
468
1,389
1,471
1,261
983 1024 984
1,066
914
822
713 740
4
8
9
1
5
8
9
1
6
8
9
1
7
8
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1
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6
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3
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6
0
0
2
7
0
0
2
8
0
0
2
9
0
0
2
The global almond market is currently
worth an estimated US$4.5bn and has
experienced consumption growth
averaging 9% per annum since 2000.
The underlying dynamics are attractive.
In developed markets demand for almonds
is driven by increasingly health conscious
consumers, while rising affl uence
underpins demand from emerging markets
including India, China and the Middle East.
Almond supply is restricted by a
slow-down in plantings by some major
producers in recent years, a lack of suitable
growing conditions globally and the
relatively long-lead times from planting
to full production.
As a result demand is expected to
exceed supply by 2013/14.
USA Almond Supply
and Demand
The 2010 USA almond crop estimate projects
a large crop, up 17% on the 2009 crop , and
in line with the record crop of 1.6 billion
lbs in 2008. After 4 years of falling supply
(2002 – 2005) USA production increased
from 2006 to 2008, as new acreage came
into production. That growth will begin
to plateau and with limited plantings
in recent years the rate of growth will
continue to slow and not match underlying
consumption growth.
Taking this estimate, consumption
levels would need to grow approximately
5% to maintain a manageable carry over
stock to 2011. This does not look particularly
challenging based on annual growth rates
achieved over the last 4 years. World almond
consumption continues to grow with USA
2009 crop shipments tracking +10% above
last year. USA shipments have increased 65%
over the last 4 years comfortably matching
supply increases over the same period. In
the longer term lower planting activity in
the USA and Australia will constrain future
ure
supply increases below the consumption
mption
growth achieved over the last 10 years.
st 10 years.
crop has
The harvest of the USA 2010 crop has
ceipts there is
commenced. Based on early receipts there is
rop estimate
some expectation the original crop estimate
will not be achieved.
Accompanied by increased demand
from emerging economies, with China the
a the
number 1 importer from the USA in 2009,
09,
the fundamentals of supply and demand
d
remain intact, supportive of underlying
pricing of almonds.
8
Select Harvests Annual Report 2010
Australian Almonds
AUSTRALIAN ALMOND PRODUCTION FORECAST
S
E
N
N
O
T
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2011
2012
2013 2014 2015
SELECT HARVESTS
ALMOND INDUSTRY
Australia is projected to produce 82,000 metric tonnes of almonds by 2015,
becoming the second largest producing country.
Australia is already a signifi cant global
manager, processor and seller of almonds
with a growing market share. Over 70%
of Australia’s almond orchards have been
planted since 2004, giving us an enviable
maturity profi le. Production in Australia is
projected to grow 17.5% annually, and on
that basis it is likely to exceed Spain as the
number two producing country by 2015.
What also sets Australia apart is the
quality of our crop. 50% of Australian
almonds are the premium nonpareil
variety, which is highly sought after in
many markets.
We are particularly well positioned to serve
fast growing emerging economies such as
China and India. India is already Australia’s
largest almond export market. We also
continue to see growth in demand from
the Middle East which in 2009 exceeded
Europe as a market for Australian almonds.
Select Harvests is a major driver of growth
in the Australian almond industry. We
have over 30 years’ experience at orchard
development, management, processing
and marketing. Globally we are the second
largest manager of almond orchards,
giving us unrivalled scale and expertise.
At full maturity and based on our existing
portfolio we expect to produce 52,000
metric tons per annum based on standard
industry yields, equating to 62% of
Australia’s almond crop.
Our $35m almond processing plant at
Robinvale is the most advanced facility in
Australia enabling us to undertake shelling
and packing of harvested almonds. This
plant has suffi cient capacity and room for
future expansion to accommodate the
growing crop.
We believe these unique capabilities
position the Company well for
future growth.
Select H
Select Harvests’ $32 million processing facility near Robinvale, Victoria
Select Harvests Annual Report 2010
9
Growing our orchards
A core part of our strategy going forward is to increase our Company Orchards to enable us
to diversify our earnings stream and broaden access to the whole of the almond value chain.
Of 43,300 acres under management we now have 8,600 acres which are Company Orchards,
representing 20% of our orchards. This compares to less than 10% a year ago.
As we continue to grow our Company Orchards, our strategy will be to strike a balance between
immediate or soon-to-be cash-generative investments and longer-term developments.
Expanded footprint in Victoria and NSW
WA Development
The most signifi cant addition to our orchard portfolio has been
the 20 year lease agreement with Rural Funds Management (RFM)
covering 3,000 acres near Hillston in NSW. These orchards were
established in 2006/07 and were previously leased to a Managed
Investment Scheme. The orchards are in good condition and
serviced by bore water from the Lower Lachlan Groundwater
Source, which has been a reliable source of water
in recent drought conditions.
The lease agreement with RFM represents a partnership with
an investment fund with a history in almond ownership. It
enables us to grow our Company Orchards without a large capital
commitment and gives us the opportunity to benefi t from the full
almond value chain. The Hillston orchards are expected to deliver
its fi rst crop in 2011, reaching maturity by 2017.
We continue to evaluate other opportunities to lease or buy
established orchards in Victoria and New South Wales, and
recently agreed to acquire 530 acres at Lake Powell, near Robinvale.
These orchards were planted in 2006 and have been managed by
Select Harvests since then.
In the winter of 2010, and following a number of years of feasibility
assessments, we completed Stage 1 of the establishment of
Greenfi eld orchards in the Dandaragan Plateau.
Dandaragan is attractive for a number of reasons, the climate and
soil type indicate excellent growing potential, there is a reliable and
cost effective long-term water source, and as a result development
is below replacement cost in Victoria and New South Wales.
We have secured 22,000 ML of water rights, suffi cient to support
the Stage 1 planting of 2,000 acres, and Stage 2 development of
2,300 acres. The fi rst crop from Stage 1 plantings is expected in
2013, with full maturity by 2017.
Over time we have the opportunity to grow the Western
Australian almond footprint to 10,000 acres.
10
Select Harvests Annual Report 2010
Our executive team
TIM MILLEN—
Horticultural Manager
PETER ROSS—Operations
Manager Almond Division
KIM MARTIN—Operations
Manager Food Division
Tim 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 Offi cer and
Horticulturist. Prior to commencing with
Select Harvests, Tim was Orchard Manager
for an Australian and New Zealand Nashi,
Stonefruit and Pipfruit operation.
Peter 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.
Kim 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
Laurence 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.
MATTHEW GRAHAM—
Sales & Marketing Manager
Food Division
PAUL CHAMBERS—
Chief Financial Offi cer &
Company Secretary
Matthew joined Select Harvests in August
2007 as Grocery Channel Manager,
and moved into the Group Manager
Sales & Marketing role in March 2009.
Previously to this he has developed his
multi channel FMCG experience through
senior management roles at both Mars
Food, and Nestle Confectionery. His
experience includes Channel and Customer
Management roles across our major
Grocery customers.
Paul joined Select Harvests in 2007.
Paul is a Chartered Accountant and has
over 20 years’ experience in senior
fi nancial 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.
CEO: JOHN BIRD
Horticultural
Manager:
TIM MILLEN
Operations Manager
Almond Division:
PETER ROSS
Operations Manager
Food Division:
KIM MARTIN
Trading Manager:
LAURENCE VAN DRIEL
Sales & Marketing
Manager Food
Division: MATTHEW
GRAHAM
CFO & Company
Secretary:
PAUL CHAMBERS
Select Harvests Annual Report 2010
11
Marketing our products
The improved performance of Select
Harvests Food Division has also been
driven by the an improved sales mix across
the total business and the realisation
of cost savings which have fl owed from
the rationalisation of production and
warehouse facilities which commenced
in 2008.
Market share in the cooking category has
reached its highest level for four years
through strong performance of the Lucky
brand. New product launches this year
include the “Lucky Smart Snax” range and
new Lucky Six pack snacking products into
the major retailers. These new additions
to the Lucky range aim to increase market
share of the healthy snacking segment of
the Dried Fruit & Nut category.
Marketing our almonds directly into the
major domestic consumer markets is key
to Select Harvests’ coverage of the entire
almond value chain. As a result, driving
almond consumption is the central focus
of Select Harvests’ Food Division. Sales of
almonds into the Australian marketplace
has increased by over 10% during the past
year. This growth in almond consumption
has been assisted by leveraging the
promotional calendar of the Almond Board
of Australia. Every quarter, the Australian
almond industry promotes a key reason to
purchase almonds:
•
•
•
•
Improved heart health in
January through the ‘New Year,
New Heart’ promotion;
Great taste of fresh almonds in the
New Season promotion in April – May;
The natural goodness of almonds
via the August almond blossom
season promotion; and
Celebrating with almonds in
our Christmas promotion.
One of the most effective forms of
promoting almonds has been the
distribution of 30gm almond snack
tins. These snack tins have featured in
major almond promotions in Coles and
Woolworths supermarkets nationally.
12
Select Harvests Annual Report 2010
Environment and community
Contributing to the
community
As the largest employer in the Robinvale
area, Select Harvests continues to
play an important role in supporting a
number of community activities and
programs, including the Robinvale and
Euston Football Clubs, and the Robinvale
Secondary College Chaplaincy program.
The company hosted the second Mallee
Almond Blossom festival at the Kyndalyn
Park Orchards attracting a large number
of people from the local community and
beyond to celebrate the beauty of the
annual blossom, and sample a variety of
local foods and wines. With over 50 stalls,
this event is now becoming a highlight
in the local community calendar as it
showcases produce from the local area.
Our Approach
Select Harvests has continued to commit
resources towards sustainability, ensuring
our business remains a valuable partner
in the communities in which we operate,
and that we are contributing positively
towards the environment.
Our emphasis has been on responsible
and proactive water management,
and the management of wildlife in our
almond orchards.
Environmental commitment
In conjunction with Charles Sturt
University, the Victorian, New South
Wales and South Australian Governments,
Select Harvests has sponsored a number
of projects aimed at ensuring native
wildlife is not only protected in the orchard
environment, but is able to be nurtured
wherever possible.
Current research projects are focusing
specifi cally on the Regent Parrot
population. One project entitled, “The
role of food resources in driving habitat
occupancy and movement by Regent
Parrots” involves the tracking of Regent
Parrots in almonds and other foraging
areas, and at breeding sites to determine
home ranges and movement pathways.
Dietary data has been collected along with
surveying and mapping of available food
sources. The projects involve the hiring of
people from Select Harvests and the local
Sunraysia community to work with PhD
students to assist in the research.
Regent Parrots
Almond plantation, Robinvale
Select Harvests Annual Report 2010
13
2010
2009
2008
2007
2006
2005
238,376
248,581
224,655
229,498
217,866
173,864
26,032
23,603
17,253
26,827
23,047
16,712
27,120
25,384
18,130
40,549
40,014
28,098
38,369
37,903
26,492
33,069
31,802
22,104
(cents)
(%)
(cents)
(cents)
(%)
(%)
(%)
(times)
(%)
(times)
43.3
15.2
21
-
100
48.5
1.87
10.7
39.6
1.44
42.6
16.6
12
-
100
28.2
1.56
7.1
51.9
0.79
46.7
19.3
45
-
100
96.7
1.41
15.6
49.7
0.87
83,993
145,612
81,075
77,014
133,884
118,934
229,605
214,959
195,948
58,469
102,348
57,515
11,735
115,984
114,083
113,621
100,876
46,433
12,949
41,494
100,876
47,470
11,327
54,824
113,621
39,779
3,039
(000)
88,162
13,715
101,877
94,071
44,375
11,235
38,461
94,071
71.0
29.4
57
-
100
80.0
1.57
75.8
1.7
1.32
70,983
89,170
160,153
53,680
10,969
64,649
95,504
41,953
11,273
42,278
95,504
67.1
26.1
53
10
100
80.0
1.83
82.3
1.3
1.82
72,455
79,421
151,876
39,905
10,490
50,395
101,481
52,665
12,691
36,125
101,481
56.9
25.1
42
-
100
75.4
1.52
26.2
1.0
1.52
58,832
78,676
137,508
38,757
10,656
49,413
88,095
46,925
13,766
27,404
88,095
39,519
3,296
39,009
3,319
38,739
2,953
39,708
39,069
3,369
2,999
($)
3.46
2.16
6.00
11.60
13.02
9.70
137,635
85,361
234,054
449,372
516,998
378,970
Satistical summary
SELECT HARVESTS CONSOLIDATED RESULTS
FOR YEARS ENDED 30 JUNE
Total sales
Earnings before interest and tax
Operating profi t before tax
Net profi t 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
Net 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 profi ts
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)
14
Select Harvests Annual Report 2010
Contents
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
CORPORATE GOVERNANCE STATEMENT
INCOME STATEMENT
STATEMENTS OF COMPREHENSIVE INCOME
BALANCE SHEET
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
ASX ADDITIONAL INFORMATION
16
27
28
34
35
36
37
38
39
78
79
81
Select Harvests Annual Report 2010
15
Directors’ Report
The directors present their report together with the fi nancial report of Select Harvests Limited and controlled entities (referred to
hereafter as the “consolidated entity”) for the year ended 30 June 2010.
Directors
The qualifi cations, 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 fi nancial year is provided below, together with details of the company secretary as at the year
end. Directors were in offi ce 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 Bens, and Managing Director of Mars Australia and New
Zealand. In addition, he has served as President, Asia Pacifi c of all Mars businesses, and a Director of the Managing Board of Mars
Incorporated global business. Is a Director of Patties Foods Limited. He is Chairman of the Board, a member of the Audit and Risk
Committee, Remuneration Committee and Nomination Committee.
Interest in Shares and Options: 663,668 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, Audit and Risk Committee, and Chairman of the Nomination Committee.
Interest in Shares and Options: 5,835,234 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.
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 offi ce 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
a member of the Remuneration Committee and Nomination Committee.
Interest in Shares and Options: 18,772 fully paid shares.
M Carroll, BSC, MBA (Non- Executive Director)
Joined the board on 31 March, 2009. He works with a range of agribusiness companies in a board and advisory capacity, and has
directorships with Meat and Livestock Australia, the Rural Finance Corporation, Rural Funds Management and Warnambool Cheese
and Butter. He has 18 years’ experience in banking and fi nance, having lead and established the Agribusiness division within the
National Australia Bank. He has worked for a number of companies in the agricultural sector including Monsanto Agricultural
Products and a venture capital biotechnology company. He is Chairman of the Remuneration Committee, and a member of the
Audit and Risk Committee and Nominations Committee.
Interest in Shares and Options: 0 fully paid shares.
16
Select Harvests Annual Report 2010
Directors’ Report
F Grimwade, MBA, (Non- Executive Director)
Appointed to the board on 27 July, 2010. He works with a wide range of companies in a board or advisory capacity. He is a Non-
Executive Director of AWB Limited and Chairman of CPT Global Limited, and is a Principal and Executive Director of Fawkner Capital,
a specialist corporate advisory fi rm. He has held General Management positions in Colonial Agricultural Company, Colonial Mutual
Group, Colonial First State Investments Group, Western Mining Corporation and Goldman Sachs & Co. He also has experience with a
major management consulting fi rm.
Interest in shares and options: 2,000 fully paid shares.
P Chambers, BSc Hons, ACA (Chief Financial Offi cer and Company Secretary)
Joined Select Harvests as Chief Financial Offi cer and Company Secretary in September 2007. He is a Chartered Accountant and
has over 20 years’ experience in senior fi nancial management roles in Australian and European organisations, including corporate
positions with the Fosters Group, and 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 signifi cant changes in the nature of the activities of the consolidated entity in the fi nancial year.
Employees
The consolidated entity employed 387 full time employees as at 30 June 2010 (2009: 366 employees).
Review and results of operations
Profi t attributable to the members of Select Harvests Limited for the year ended 30 June 2010 was $17.3 million
compared to $16.7 million in 2009.
For additional information refer to the announcement lodged with the ASX and the report before the Appendix 4E.
Signifi cant changes in the state of affairs
No signifi cant changes in the state of affairs of the consolidated entity occurred during the fi nancial year.
Signifi cant events after the balance date
On 23 August 2010, the Directors declared a fi nal dividend of 11 cents per share payable on 4 October 2010 to shareholders
on the register on 26 August 2010.
On 27 July 2010, the board announced the appointment of Mr Fred Grimwade to the position of Non-Executive Director.
On 23 August 2010, the company announced a $48 million fully underwritten equity raising to existing shareholders.
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.
Select Harvests Annual Report 2010
17
Directors’ Report
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 follow:
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 signifi cant 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
The information provided in this Remuneration Report has been audited as required by section 308(3C) of the
Corporations Act 2001.
Principles used to determine the nature and amount of remuneration
The objective of the Group’s executive reward framework is to set remuneration levels to attract and retain appropriately qualifi ed
and experienced directors and senior executives. The framework aligns executive reward with achievement of specifi c business
plans and performance indicators, which include fi nancial and operational targets relevant to performance at the consolidated
entity level, divisional level, or functional level, as applicable, for the fi nancial year.
Remuneration packages include a mix of fi xed remuneration, performance based remuneration and equity based remuneration.
Executive directors and key management personnel may receive short and long term incentives.
The Board has established a Remuneration Committee which makes recommendations to the Board on remuneration packages
and other terms of employment for executive and non-executive directors. The Remuneration Committee may obtain independent
advice on the appropriateness of remuneration packages, given trends in the marketplace. The Group has structured an executive
reward framework that is market competitive, performance driven and compliant with the Group’s reward strategy.
Non-executive directors
Non-executive directors receive fees but do not receive any performance related remuneration nor are they issued options on
securities. This refl ects the Group’s demands which are made on, and the responsibilities of, the directors. Non executive directors’
fees are reviewed by the Board annually to ensure that they are continually appropriate and in line with market expectations. The
review also includes the remuneration of the Chairman, who typically receives up to twice the base fee of a Non Executive Director.
Directors’ fees
The current base fees were last reviewed with effect from July 1st, 2008. Non-executive directors each receive a base fee of $65,000
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.
The following fees have applied:
Base Fees
Chair
Other non-executive directors
From 1 July
2008
From 1 July 2007
To 30 June 2008
$130,000
$ 65,000
$100,000
$ 50,000
18
Select Harvests Annual Report 2010
Directors’ Report
Executive Pay
The executive pay and reward framework has three components:
1. base pay and benefi ts (including superannuation);
2. short term performance incentives; and
3.
long term incentives involving the issue of options in the Select Harvests Limited executive Share Option Scheme.
The combination of these three components forms the executive’s total remuneration. The group will review the remuneration
packages as part of its annual review during the year ended 30 June 2011.
Base pay and benefi ts
A total employment cost package which can be structured as a combination of cash and non cash benefi ts at the
discretion of the company.
Executives receive a base pay that is reviewed annually to ensure market competitiveness in line with the objectives of the
remuneration framework. There are no guaranteed base pay increases in any executives’ contracts.
Executives receive benefi ts including motor vehicle and certain private expense reimbursements.
Superannuation
Retirement benefi ts are delivered under the Select Harvests Limited Employees’ Superannuation Fund.
Short-term incentives
Executive directors and senior executives may receive short term incentives based on achievement of specifi c business plans and
performance indicators, which include fi nancial and operational targets relevant to performance at the consolidated entity level,
divisional level, or functional level, as applicable, for the fi nancial year. The Remuneration Committee is responsible for assessing
whether the KPIs are met based on detailed reports on performance prepared by management. Financial targets ensure that
variable reward is only available when value has been created for Shareholders. Operational targets allow for the recognition of
effi ciencies that will provide for future shareholder value.
Long-term incentives
The Group 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 and have a three year life, with
one third vesting in each year, 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.
Performance of Select Harvests Limited
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 profi t from ordinary activities after
income tax has fallen at an average rate of 8% per annum and the EPS has fallen at an average rate of 9% over the last 5 years.
These fi gures were substantially impacted by events not in the ordinary course of business in 2008 and 2009.
In determining the level of short term incentives for the 2008 – 2009 years, a lower weighting had been placed on fi nancial targets
given events arising during that period. Prior to 2008 EPS growth had signifi cantly increased as shown in the below table:
Earnings Per Share
Cents
Growth
2003
31.3
23%
2004
40.0
28%
2005
56.9
42%
2006
67.1
18%
2007
71.0
6%
Negative growth in 2008 refl ects the impact of three events:
1. almond price development;
2. restructuring costs for the close down of the Brisbane site; and
3.
increasing water costs associated with the impact of drought.
Select Harvests Annual Report 2010
19
Directors’ Report
Further, 2009 includes before tax provisions of $4.7 million for the impact of lost revenues pertaining to the administration of
Almond Management Pty Ltd, a subsidiary of Timbercorp Limited.
EPS fi gures for 2008 and 2009 have not been included as management believes there was no correlation between the payment
of incentives and EPS growth during this period due to the events outlined above. Management instead opted to reward staff on
strategic targets.
Options, vesting proportionally one-third per year over a three year period, were issued in each of the last fi ve years. All were based
on the achievement of 10% growth in EPS. They were only exercised or vested in the years the growth target was achieved.
Details of remuneration
Details of the remuneration of the directors and the key management personnel as defi ned 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
offi cers, which also includes the 5 highest paid executives of the consolidated entity:
NAME
P Ross
K Martin
T Millen
L Van Driel
P Chambers
M Graham
POSITION
Operations Manager Almond Division
EMPLOYER
Kyndalyn Park Pty Ltd
Operations Manager Food Products Division
Select Harvests Limited
Group Horticultural & Farm Operations Manager
Kyndalyn Park Pty Ltd
Group Trading Manager
Select Harvests Food Products Pty Ltd
Chief Financial Offi cer & Company Secretary
Select Harvests Limited
Sales & Marketing Manager
Select Harvests Food Products Pty Ltd
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 fi nancial year is detailed below. It should be noted that
“share based payments” referred to in the remuneration details set out in this report comprise a proportion of share options which
have not yet vested and are refl ective of options that may be vested in the fi nancial year.
2010
ANNUAL REMUNERATION
LONG TERM REMUNERATION
BASE FEE
$
SHORT TERM
INCENTIVES
$
NON CASH
BENEFITS
$
SUPER
CONTRI-
BUTIONS
$
LONG SERVICE
LEAVE
ACCRUED
$
OPTIONS
GRANTED
$
70,850
130,000
65,000
65,000
-
-
-
-
-
-
-
-
-
11,700
5,850
5,850
-
-
-
-
-
-
-
-
TOTAL
$
70,850
141,700
70,850
70,850
583,003
128,200
27,932
63,830
13,502
53,408
869,875
197,395
240,963
190,727
180,782
215,531
267,368
22,500
25,500
23,000
40,000
27,000
-
21,579
-
31,219
39,848
43,171
-
19,951
23,982
19,053
16,270
21,828
-
5,027
5,831
5,298
5,546
6,174
-
-
12,750
11,500
11,500
13,500
12,500
266,452
309,026
280,797
293,946
327,204
279,868
Non Executive
M A Fremder
J C Leonard
M Carroll
R M Herron
Executive
J Bird
Other key
management
personnel
M Graham
K Martin
L Van Driel
T Millen
P Chambers
P Ross
20
Select Harvests Annual Report 2010
Directors’ Report
2009
ANNUAL REMUNERATION
LONG TERM REMUNERATION
BASE FEE
$
SHORT TERM
INCENTIVES
$
NON CASH
BENEFITS
$
SUPER
CONTRI-
BUTIONS
$
LONG SERVICE
LEAVE
ACCRUED
$
OPTIONS
GRANTED
$
82,658
55,000
119,167
17,001
65,000
-
-
-
-
-
-
-
-
-
-
-
4,950
10,725
1,530
5,850
-
-
-
-
-
-
-
-
-
-
TOTAL
$
82,658
59,950
129,892
18,531
70,850
560,806
80,000
30,133
57,673
17,047
22,258
767,917
177,353
214,450
203,784
174,451
237,804
182,659
250,000
-
-
30,000
40,000
20,000
-
-
19,797
-
10,406
39,848
10,793
-
-
15,962
19,300
20,832
15,701
23,202
15,829
-
5,135
5,350
7,426
10,108
5,987
-
-
-
5,313
4,792
5,000
5,625
-
5,208
218,247
244,413
277,240
285,108
303,411
198,488
255,208
Non Executive
M A Fremder
G F Dan O’Brien*
J C Leonard
M Carroll**
R M Herron
Executive
J Bird
Other key
management
personnel
M Graham
K Martin
L Van Driel
T Millen
P Chambers
K Bartholemew***
P Ross
* Resigned from the role of Director 23 June 2009
** Appointed as a Director on 31 March 2009
*** Resigned 9 April 2009
Notes
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.
Select Harvests Annual Report 2010
21
Directors’ Report
2010
FIXED REMUNERATION
2010
%
100.0
100.0
100.0
100.0
2009
%
100.0
100.0
100.0
100.0
AT RISK - STI
2010
%
2009
%
AT RISK - LTI
2010
%
2009
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
86.7
87.0
10.4
10.0
2.9
3.0
91.4
87.4
87.5
82.1
87.4
95.5
100.0
97.8
87.5
84.2
91.6
98.0
8.6
8.4
8.3
13.9
8.4
-
-
-
10.8
14.0
6.6
-
-
4.2
4.2
4.0
4.2
4.5
-
2.2
1.7
1.8
1.9
2.0
Non Executive
M A Fremder
J C Leonard
M Carroll
R M Herron
Executive
J Bird
Other key
management
personnel
M Graham
K Martin
L Van Driel
T Millen
P Chambers
P Ross
Service Agreements
On appointment to the Board, all non executive directors enter into a service agreement with the company in the form of a letter of
appointment. The letter summarises the Board policies and terms, including compensation, relevant to the offi ce of director.
Remuneration and other terms of employment for the managing director and the other key management personnel are also
formalized in service agreements. Each of these agreements provide for the provision of performance related cash bonuses, other
benefi ts and participation, when eligible, in the Select Harvests Limited Employee Option Plan. Other major provisions of the
agreements are set out below.
NAME
J Bird
M Graham
K Martin
T Millen
P Chambers
L Van Driel
P Ross
TERM OF AGREEMENT
On-going
On-going – 3 Month Notice
On-going – 3 Month Notice
On-going
On-going – 3 Month Notice
On-going
On-going
BASE SALARY INCL SUPER*
674,765
238,925
264,945
236,900
280,530
240,999
267,368
* Base salaries quoted are for year ended 30 June 2010; they are reviewed annually by the remuneration committee.
** There are no specifi c termination benefi ts applicable to the service agreements.
Share-based compensation
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. The options are granted
annually in three tranches on achievement of the performance hurdles.
Individual parcels of options offered to participating employees are based on a percentage of fi xed 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. Options previously granted as remuneration, 57,798 shares, valued at $206,339 have lapsed during the year.
22
Select Harvests Annual Report 2010
Directors’ Report
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.
Options are granted under the plan for no consideration. The plan rules contain a restriction on removing the ‘at risk’ aspect of the
instruments granted to executives. Plan participants may not enter into any transaction designed to remove the ‘at risk’ aspect of
an instrument before it vests.
The model inputs for options offered during the year ended 30 June 2010 included:
1. options are granted for no consideration, have a three year life, and one third of the options offered vest in each year, subject to
meeting EPS hurdles
2. exercise price: $2.83 (2008 - $5.15)
3. offer date: 28 September 2009 (2009 – 20 September 2008)
4. expiry date: 29 October 2012 (2009 – 28 October 2011)
5. volume weighted average share price at offer date: $2.83 (2009 – $5.44)
6. expected price volatility of the company’s shares: 49% (2009 – 34%)
7. expected dividend yield: 6% (2009 – 7.5%)
8.
risk free interest rate: 4.89% (2009 – 5.76%)
During or since the end of the fi nancial 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.
2010
Executive
J Bird
Other key
management
personnel
M Graham
K Martin
L Van Driel
T Millen
P Chambers
P Ross
NUMBER OF
OPTIONS GRANTED
DURING THE YEAR
$ VALUE OF OPTIONS
AT GRANT DATE
NUMBER OF
OPTIONS VESTED
DURING THE YEAR
NUMBER OF
OPTIONS LAPSED
DURING THE YEAR
$ VALUE AT LAPSE
DATE
190,744
160,225
nil
(36,765)
(131,251)
-
45,536
41,071
41,071
48,214
44,643
-
38,250
34,500
34,500
40,500
37,500
-
nil
nil
nil
nil
nil
-
-
(7,563)
(7,798)
-
-
-
-
(27,000)
(27,839)
-
-
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.
No options were exercised in the fi nancial year ended 30 June 2010 (and in 2009).
Select Harvests Annual Report 2010
23
Directors’ Report
Details of remuneration: Bonuses and share based compensation benefi ts
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 fi nancial 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 satisfi ed
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.
NAME
CASH BONUS
OPTIONS
PAID
%
100
FORFEITED
%
-
YEAR
GRANTED
2007
VESTED
%
-
FORFEITED
%
-
FINANCIAL
YEARS IN
WHICH
OPTIONS
MAY VEST
2010
MINIMUM
TOTAL
VALUE OF
GRANT YET
TO VEST
($)
Nil
MAXIMUM
TOTAL
VALUE OF
GRANT YET
TO VEST
($)
50,875
100
100
100
-
100
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2008
2009
2007
2008
2009
2007
2008
2009
2007
2008
2009
2008
2009
2007
2008
2009
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2011
2012
2010
2011
2012
2010
2011
2012
2010
2011
2012
2010
2011
2010
2011
2012
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
53,419
53,408
3,731
11,500
11,500
10,000
12,000
11,500
12,750
12,750
15,482
12,500
12,500
13,000
13,500
13,500
J Bird
L Van Driel
T Millen
K Martin
P Ross
P Chambers
Loans to directors and executives
Information on loans to directors and executives (if any), are set out in Note 32.
Share options granted to directors and the most highly remunerated offi cers
For options over unissued ordinary shares of Select Harvests Limited granted and not exercised during or since the end of the
fi nancial year to the fi ve most highly remunerated offi cers of the company as part of their remuneration, see Page 23.
No options have been granted since the end of the fi nancial year.
Unissued Ordinary shares Under Option
At the date of this report there are 1,039,016 unissued ordinary shares of the company under option.
Dividends – Select Harvests Limited
DIVIDENDS
Interim for the year
• on ordinary shares
Final for 2010 shown as recommended in the 2010 report
• on ordinary shares
Cents
2010
$
10.0
3,922,387
11.0
4,375,642
24
Select Harvests Annual Report 2010
Directors’ Report
Indemnifi cation and insurance of directors and offi cers
During the year the Company entered into an agreement at a premium of $39,231 (incl GST) in respect to an insurance contract to
indemnify directors and offi cers against liabilities that may arise from their position as directors and offi cers of the Company and
its controlled entities.
Offi cers indemnifi ed include the Company Secretary, all directors, and executive offi cers 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 fi nancial year and the number
of meetings attended by each director was as follows:
MEETINGS OF COMMITTEES
DIRECTORS’ MEETINGS
AUDIT AND RISK
REMUNERATION
NOMINATION
NUMBER
ELIGIBLE TO
ATTEND
12
NUMBER
ATTENDED
12
NUMBER
ELIGIBLE TO
ATTEND
4
NUMBER
ATTENDED
3
NUMBER
ELIGIBLE TO
ATTEND
1
NUMBER
ATTENDED
1
NUMBER
ELIGIBLE TO
ATTEND
1
NUMBER
ATTENDED
1
12
12
12
12
12
11
12
12
-
4
4
4
-
4
4
4
-
1
1
1
-
1
1
1
1
1
1
1
1
1
1
1
M A Fremder
J Bird
J C Leonard
R M Herron
M Carroll
Committee membership
During or since the end of the fi nancial 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 fi nancial year were:
AUDIT AND RISK
R M Herron (Chairman)
REMUNERATION
M Carroll (Chairman)
NOMINATION
M A Fremder (Chairman)
J C Leonard
MA Fremder
M Carroll
F Grimwade
M A Fremder
J C Leonard
R M Herron
F Grimwade
J Bird
R M Herron
J C Leonard
M Carroll
F Grimwade
Directors’ interests in contracts
Directors’ interest in contracts are disclosed in Note 32 to the fi nancial statements.
Select Harvests Annual Report 2010
25
Directors’ Report
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 27.
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 31.
The directors are satisfi ed 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 fi nancial 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, 23 August 2010
26
Select Harvests Annual Report 2010
PricewaterhouseCoopers
ABN 52 780 433 757
Freshwater Place
2 Southbank Boulevard
SOUTHBANK VIC 3006
GPO Box 1331L
MELBOURNE VIC 3001
DX 77
Telephone 61 3 8603 1000
Facsimile 61 3 8603 1999
Website:www.pwc.com/au
Auditor’s Independence Declaration
As lead auditor for the audit of Select Harvests Limited for the year ended 30 June 2010, I declare that to the best of my knowledge
and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Select Harvests Limited and the entities it controlled during the period.
Andrew Mill
Partner
PricewaterhouseCoopers
Melbourne
23 August 2010
Liability limited by a scheme approved under Professional Standards Legislation
Select Harvests Annual Report 2010
27
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 fi nancial reporting
Principle 5 – Make timely and balanced disclosure
Principle 6 – Respect the right of shareholders
Principle 7 – Recognise and manage risk
Principle 8 – Remunerate fairly and responsibly
The statements set out below refer 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 identifi ed 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 qualifi ed 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.
The full Board holds twelve scheduled meetings each year, plus any additional meetings at such other times as may be necessary to
address any specifi c matters that may arise.
The agenda for meetings is prepared and includes the Managing Director’s report, fi nancial 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.
28
Select Harvests Annual Report 2010
Corporate governance statement
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 offi ce 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 qualifi cations, 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 14.43% shareholding
at 30 June 2010.
• A non–executive Director of the Company, Mr M A Fremder, owns (directly or indirectly) almond orchards totalling 2,082 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 1,782 acres in respect to
which the consolidated entity provides orchard management services under contract at market rates.
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 fulfi lling
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 fi nancial 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 specifi c 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 fi nancial 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, Remunerate fairly and responsibly.
Select Harvests Annual Report 2010
29
Corporate governance statement
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
benefi ts 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 fi nancial 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 qualifi ed 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 fi xed remuneration, performance based remuneration, and equity
based remuneration.
Executive Directors and senior executives may receive short term incentives based on achievement of specifi c business plans and
performance indicators, which include fi nancial and operational targets relevant to performance at the consolidated entity level,
divisional level, or functional level, as applicable, for the fi nancial 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 fi nancial year are disclosed in the Directors’ Report.
The external auditors, the Managing Director and Chief Financial Offi cer 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 Offi cer have provided a statement in writing to the Board that the consolidated
entity’s fi nancial reports for the year ended 30 June 2010 present a true and fair view, in all material respects, of the consolidated
entity’s fi nancial 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.
30
Select Harvests Annual Report 2010
Corporate governance statement
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 fi nancial 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 confl icts of interest;
• Requiring reports from management and the external auditors on any signifi cant regulatory, accounting or reporting
development to assess potential fi nancial reporting interest;
• Reviewing and approving all signifi cant company accounting policy changes;
• Reviewing the company’s taxation position;
• Reviewing the annual fi nancial statements with the Chief Financial Offi cer 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 fi nancial 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, fi nancial 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 Offi cer have provided a statement in writing to the Board that the declaration made
in respect of the consolidated entity’s fi nancial reports is founded on a system of risk management and internal compliance and
control which refl ects 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, Confl ict of Interest and Dealings in Company Shares are with reference to
Principle 3, Promote ethical and responsible decision making.
Select Harvests Annual Report 2010
31
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:
Confl ict of Interest
Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially confl ict with those of the Company.
Should a situation arise where the Board believes that a material confl ict 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 fi nancial 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 right 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 specifi cally 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 fi nancial information and a review of the operations of the consolidated
entity during the period. The half year audited fi nancial 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 confi rms 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 identifi cation 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.
32
Select Harvests Annual Report 2010
Financial Report
This fi nancial report covers the consolidated entity consisting of Select Harvests Limited
and its subsidiaries. The fi nancial report is presented in the Australian currency.
Select Harvests Limited is a company limited by shares, incorporated and domiciled
in Australia. Its registered offi ce and principal place of business is:
Select Harvests Limited
360 Settlement Road
Thomastown Vic 3074
A description of the nature of the consolidated entity’s operations and its principal
activities is included in the review of operations and activities and in the directors’
report, both of which are not part of this fi nancial report.
The fi nancial report was authorised for issue by the directors on 23 August 2010.
The company has the power to amend and reissue the fi nancial report.
Through the use of the internet, we have ensured that our corporate reporting is timely,
complete, and available globally at minimum cost to the company. All fi nancial reports
and other information are available on our website: www.selectharvests.com.au.
Select Harvests Annual Report 2010
33
Income Statement
FOR THE YEAR ENDED 30 JUNE 2010
NOTES
CONSOLIDATED
Revenue
Sales of goods and services
Other revenue
Total revenue
Other income (expenses)
Almond stock fair value adjustment
Total other income (expenses)
Expenses
Cost of sales
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Finance costs
Other expenses
PROFIT BEFORE INCOME TAX
Income Tax Expense
PROFIT ATTRIBUTABLE TO MEMBERS OF
SELECT HARVESTS LIMITED
Earnings per share for profi t attributable to the ordinary
equity holders of the company:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
The above income statement should be read in conjunction with the accompanying Notes.
2010
$’ 000
2009
$’ 000
238,376
735
239,111
2,405
2,405
248,581
93
248,674
(1,951)
(1,951)
(200,651)
(199,429)
(6,890)
(631)
(1,331)
(3,783)
(2,946)
(1,681)
23,603
(6,350)
17,253
(8,220)
(901)
(1,441)
(3,718)
(3,873)
(6,094)
23,047
(6,335)
16,712
43.3
43.3
42.6
42.6
4
4
5
5
6
25(c)
29
29
34
Select Harvests Annual Report 2010
Statement of Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2010
NOTES
CONSOLIDATED
Profi t for the year
Other comprehensive income
Cash fl ow hedges
Intrinsic value movement – I/R cap
Income Tax relating to components of other
comprehensive income
Other comprehensive income for the year
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO
MEMBERS OF SELECT HARVESTS LIMITED
The above statement of changes in equity should be read in conjunction with the accompanying Notes.
2010
$’ 000
17,253
(2,032)
(213)
502
(1,743)
15,510
2009
$’ 000
16,712
2,181
-
(652)
1,529
18,241
Select Harvests Annual Report 2010
35
Balance Sheet
AS AT 30 JUNE 2010
NOTES
CONSOLIDATED
2010
$’ 000
13,184
33,495
34,152
541
2,621
83,993
1,553
87,560
17,363
39,136
145,612
229,605
37,504
18,153
42
-
2,770
58,469
329
40,000
16,302
884
57,515
115,984
113,621
47,470
11,327
54,824
113,621
2009
$’ 000
6,945
43,128
28,680
2,322
-
81,075
-
80,487
14,261
39,136
133,884
214,959
36,764
59,293
149
3,566
2,576
102,348
-
-
10,871
864
11,735
114,083
100,876
46,433
12,949
41,494
100,876
9
10
11
12
13
14
15
16
17
18
12
19
20
21
22
23
24
25
25
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative fi nancial instruments
Current tax receivables
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Other Receivables
Property, plant and equipment
Biological assets – Almond Trees
Intangible assets
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Interest bearing liabilities
Derivative fi nancial 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 profi ts
TOTAL EQUITY
The above balance sheet should be read in conjunction with the accompanying Notes.
36
Select Harvests Annual Report 2010
Statement of changes in equity
CONSOLIDATED
Balance at 1 July 2008
NOTES
CONTRIBUTED
EQUITY
RESERVES
RETAINED
EARNINGS
TOTAL
44,375
11,235
38,461
94,071
Total comprehensive income for the year
-
1,529
16,712
18,241
Transactions with equity holders in their
capacity as equity holders:
Contributions of equity, net of transaction costs
Employee share options
Dividends paid or provided
Balance at 30 June 2009
Total comprehensive income for the year
Transactions with equity holders in their
capacity as equity holders:
Contributions of equity, net of transaction costs:
Employee share options
Dividends paid or provided
Balance at 30 June 2010
24
25
8
24
25
8
2,058
-
-
-
185
-
-
-
2,058
185
(13,679)
(13,679)
46,433
12,949
41,494
100,876
-
(1,743)
17,253
15,510
1,037
-
-
-
120
-
-
-
(3,922)
1,037
120
(3,922)
47,470
11,327
54,824
113,621
The above statement of changes in equity should be read in conjunction with the accompanying Notes.
Select Harvests Annual Report 2010
37
Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2010
NOTES
CONSOLIDATED
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 Infl ow From Operating Activities
26
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Payment for property, plant and equipment
Tree development costs
Net Cash Outfl ow From Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Commercial bill draw downs
Repayments of borrowings
Dividends payment on ordinary shares, net of DRP
Net Cash Outfl ow from fi nancing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the fi nancial year
Cash and cash equivalents at the end of the fi nancial year
fi nancial year
9(a)
9(a)
onjunction with the accompanying Notes.
The above cash fl ow statement should be read in conjunction with the accompanying Notes.
2010
$’ 000
2009
$’ 000
298,694
330,408
(263,455)
35,239
(300,296)
30,112
517
(3,719)
(6,542)
25,495
15
(12,143)
(3,102)
(15,230)
-
(1,500)
(2,886)
(4,386)
5,879
4,152
10,031
10,031
93
(3,873)
(3,759)
22,573
161
(12,208)
(4,510)
(16,557)
6,000
(246)
(11,622)
(5,868)
148
4,004
4,152
4,152
38
Select Harvests Annual Report 2010
Notes to the Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these consolidated fi nancial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated. The fi nancial statements are
for the consolidated entity consisting of Select Harvests Limited and its subsidiaries.
(a) Basis of preparation
This general purpose fi nancial report has been prepared in accordance with Australian Accounting Standards, other authoritative
pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.
Compliance with IFRS
The consolidated fi nancial statements of the Select Harvests Limited group and the separate fi nancial statements of Select
Harvests Limited also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB).
Historical cost convention
These fi nancial statements have been prepared under the historical cost convention, as modifi ed by the revaluation of available-
for-sale fi nancial assets, fi nancial assets and liabilities (including derivative instruments) at fair value through profi t and loss, and
certain classes of property, plant and equipment.
Critical Accounting Estimates
The preparation of fi nancial 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 signifi cant to the fi nancial
statements are disclosed in Note 3.
Going Concern Basis
The fi nancial report has been prepared on the basis that Select Harvests Limited (“the Group”), comprising the parent company and
its subsidiaries, is a going concern.
(b) Principles of consolidation
The consolidated fi nancial 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 (i
Subsidiaries are all those entities (including special purpose entities) over which the consolidated entity has power to govern the
fi nancial and operating policies, ge
fi nancial and operating policies, generally accompanying of more than one-half of the voting rights. The existence and effect of
potential voting rights that are cur
potential voting rights that are currently exercisable or convertible are considered when assessing whether the consolidated entity
controls another entity.
controls another entity.
Subsidiaries are fully consolidated f
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.
from the date that control ceases.
The purchase method of accountin
The purchase method of accounting is used to account for the acquisition of subsidiaries by the consolidated entity.
The fi nancial statements of subsidi
The fi nancial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent
accounting policies. Adjustments a
accounting policies. Adjustments are made to bring into line any dissimilar accounting policies which may exist.
All intercompany balances and tran
All intercompany balances and transactions, including unrealised profi ts arising from intra-group transactions, have been
eliminated in full.
eliminated in full.
Investments in subsidiaries are acco
Investments in subsidiaries are accounted for at cost in the individual fi nancial statements of Select Harvests Limited.
(c) Foreign currency translation
(c) Foreign currency translation
(i) Functional and presentation curre
(i) Functional and presentation currency
Items included in the fi nancial state
Items included in the fi nancial statements of each entity comprising the consolidated entity are measured using the currency of the
primary economic environment in w
primary economic environment in which the entity operates (“the functional currency”). The consolidated fi nancial statements are
presented in Australian dollars, whi
presented in Australian dollars, which is the functional and presentation currency of Select Harvests Limited.
Select Harvests Annual Report 2010
39
Notes to the Financial Statements
(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 fl ow hedges.
(d) Cash and cash equivalents
For the purpose of presentation in the statement of cash fl ows, cash and cash equivalents includes cash on hand, deposits held at
call with fi nancial institutions, money market investments readily convertible to cash within two working days, and bank overdrafts.
Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
(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 cost to sell at the point of harvest, and subsequently Net Realisable Value under AASB 102 Inventories.
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 fi rst in fi rst 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.
• Other inventories comprise consumable stocks of chemicals, fertilisers and packaging materials.
(f) Biological Assets
Almond Trees
Almond trees are classifi ed 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 fi rst commercial crop. The value of crop
bearing almond trees is measured at fair value using a discounted cash fl ow methodology.
The discounted cash fl ow 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 fl ows 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.
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 fi rst
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.
40
Select Harvests Annual Report 2010
Notes to the Financial Statements
(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 fi rm commitment (fair value hedge); or (2) hedges of highly probable forecast
transactions (cash fl ow 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 fl ows 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 fl ow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash fl ow 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 profi t 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 fi nancial asset (for example, inventory) or a non fi nancial 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 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 fl ows which will
be received from the assets’ employment and subsequent disposal. The expected net cash fl ows 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 fi xed 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.
Select Harvests Annual Report 2010
41
Notes to the Financial Statements
The useful lives for each class of assets are:
Buildings:
Leasehold improvements:
Plant and equipment:
Leased plant and equipment:
Plantation land, irrigation systems:
Capital works in progress
25 to 40 years
5 to 40 years
5 to 20 years
5 to 10 years
10 to 40 years
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 classifi ed at their inception as either operating or fi nance leases based on the economic substance of the agreement
so as to refl ect the risks and benefi ts incidental to ownership.
Operating leases
The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and benefi ts
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 benefi ts 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.
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
identifi able 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 indefi nite 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 indefi nite 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 benefi ts will fl ow to the entity, the revenue can be reliably measured, and the risks and rewards have passed to the buyer.
The following specifi c recognition criteria must also be met before revenue is recognised:
42
Select Harvests Annual Report 2010
Notes to the Financial Statements
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 income is recognised using the effective interest method. When a receivable is impaired, the group reduces the carrying
amount to its recoverable amount, being the estimated future cash fl ow discounted at the original effective interest rate of the
instrument, and continues unwinding the discount as interest income. Interest income on impaired loans is recognised using the
original effective interest rate.
Dividends
Dividends are recognised as revenue when the right to receive payment is established.
Almond Pool Revenue
Under contractual arrangements, the company acts as an agent for external growers by simultaneously acquiring and selling the
almonds and therefore, does not make a margin on those sales.
As at 30 June 2010 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 fi nancial year in which they occur.
(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 fi nancial 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 profi t or taxable profi t 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.
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.
Select Harvests Annual Report 2010
43
Notes to the Financial Statements
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 fl ows are included in the cash fl ow statement on a gross basis and the GST component of cash fl ows arising from investing
and fi nancing activities, which is recoverable from, or payable to the taxation authority are classifi ed as operating cash fl ows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
(n) Impairment of assets
Goodwill and other Intangible assets that have an indefi nite 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
identifi able cash fl ows (cash generating units).
(o) Employee benefi ts
Provision is made for employee benefi ts accumulated as a result of employees rendering services up to the reporting date.
These benefi ts include wages and salaries, annual leave and long service leave.
Liabilities arising in respect of wages and salaries, annual leave and any other employee benefi ts 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 benefi t liabilities are measured at the present value of the estimated future
cash outfl ow to be made in respect of services provided by employees up to the reporting date. In determining the present value
of future cash outfl ows, 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.
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 benefi ts are provided to employees via the Select Harvests Limited Executive Share Option Scheme.
Information relating to this scheme is set out in Note 35.
The fair value of options granted under the Select Harvests Limited Executive Share Option Scheme is recognised as an employee
benefi t 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 refl ect market vesting conditions, but excludes the impact of any non market
vesting conditions (for example, profi tability 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 benefi t 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
Collectability 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,
and where there is objective evidence of impairment, debts which are known to be non 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 specifi c contract which specifi es an alternative date.
Amounts receivable from related parties are carried at full amounts due.
44
Select Harvests Annual Report 2010
Notes to the Financial Statements
Financial Liabilities
The bank overdraft is carried at the principal amount and is part of the Net Cash balance in the Balance Sheet. 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 fi nancial assets and fi nancial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
The fair value of fi nancial instruments traded in active markets, such as foreign exchange hedge contracts and the Interest Rate
Cap, are based on quoted market prices at the balance sheet date. The quoted market price used for fi nancial assets held by the
consolidated entity is the current bid price; the appropriate quoted market price for fi nancial 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 fi nancial liabilities for disclosure purposes is estimated by discounting the future contractual cash fl ows at
the current market interest rate that is available to the consolidated entity for similar instruments.
(r) Borrowings
Borrowings are recognised at their nominal value as at 30 June 2010. They are split between Current and Non-Current based
on remaining settlement period. The short term portion of the debt facility, along with the AUD value of the Bank overdraft are
recognised as Current Liabilities. The remaining balance of the debt facility is recognised as a Non-Current Liability.
(s) 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.
(t) Earnings per share
(i) Basic Earnings per share
Basic earnings per share are calculated by dividing the profi t attributable to equity holders of the company by the weighted average
number of ordinary shares outstanding during the fi nancial year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the fi gures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other fi nancing costs associated with dilutive potential ordinary shares.
(u) Segment Reporting
The Group has applied AASB 8 Operating Segments from 1 July 2009. AASB 8 requires a ‘management approach’ under which
segment information is presented on the same basis as that used for internal reporting purposes. Operating segments are now
reported in a manner that is consistent with the internal reporting provided to the chief operating decision-maker. The chief
operating decision-maker has been identifi ed as the Chief Executive Offi cer.
The adoption of AASB 8 did not result in any change to the previously identifi ed segments.
(v) New accounting standards and UIG interpretations
Certain new accounting standards and UIG interpretations have been published that are not mandatory for 30 June 2010 reporting
periods. The Group’s and the parent entity’s assessment of the impact of these new standards and interpretations is set out below:
Select Harvests Annual Report 2010
45
Notes to the Financial Statements
AASB 2009-10 Amendments to Australian Accounting Standards – Classifi cation of Rights Issues
[AASB 132] (effective from 1 February 2010)
In October 2009 the AASB issued an amendment to AASB 132 Financial Instruments: Presentation which addresses the accounting
for rights issues that are denominated in a currency other than the functional currency of the issuer. Provided certain conditions are
met, such rights issues are now classifi ed as equity regardless of the currency in which the exercise price is denominated. Previously,
these issues had to be accounted for as derivative liabilities. The amendment must be applied retrospectively in accordance with
AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors. The group will apply the amended standard from
1 July 2010. As the group has not made any such rights issues, the amendment will not have any effect on the group’s or the parent
entity’s fi nancial statements.
This amendment has been reviewed and deemed not applicable by Select Harvests Limited.
AASB 9 Financial Instruments and AASB 2009-11 Amendments to Australian Accounting
Standards arising from AASB 9 (effective from 1 January 2013)
AASB 9 Financial Instruments addresses the classifi cation and measurement of fi nancial assets and is likely to affect the group’s
accounting for its fi nancial assets. The standard is not applicable until 1 January 2013 but is available for early adoption. The group
is yet to assess its full impact. However, initial indications are that it may affect the group’s accounting for its available-for-sale
fi nancial assets, since AASB 9 only permits the recognition of fair value gains and losses in other comprehensive income if they
relate to equity investments that are not held for trading. Fair value gains and losses on available-for-sale debt investments, for
example, will therefore have to be recognised directly in profi t or loss. In the current reporting period, the group recognised $15,000
of such gains in other comprehensive income. The group has not yet decided when to adopt AASB 9.
Revised AASB 124 Related Party Disclosures and AASB 2009-12 Amendments to Australian
Accounting Standards (effective from 1 January 2011)
In December 2009 the AASB issued a revised AASB 124 Related Party Disclosures. It is effective for accounting periods beginning
on or after 1 January 2011 and must be applied retrospectively. The amendment removes the requirement for government-related
entities to disclose details of all transactions with the government and other government-related entities and clarifi es and
simplifi es the defi nition of a related party. The group will apply the amended standard from 1 July 2011. When the amendments are
applied, the group and the parent will need to disclose any transactions between its subsidiaries and its associates. However, it has
yet to put systems into place to capture the necessary information. It is therefore not possible to disclose the fi nancial impact, if
any, of the amendment on the related party disclosures.
AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project (effective from
1 July 2010) and AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements
Project (effective from 1 January 2011).
In June 2010, the AASB made a number of amendments to Australian Accounting Standards as a result of the IASB’s annual
improvements project. The amendments of particular relevance to Select Harvests Limited are those affecting IFRS 7 Financial
Instruments: Disclosures; IAS 1 Presentation of Financial Statements; and IAS 27 Consolidated and Separate Financial Statements.
(w) 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 outfl ow of resources will be required to settle the obligation, and the amount has been reliably estimated.
(x) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the fi nancial year which are
unpaid. These amounts are unsecured and are usually paid within 30 days of recognition.
(y) Contributed equity
Ordinary shares are classifi ed as equity. The value of new shares or options issued is shown in equity.
(z) Comparatives
Where necessary, comparatives have been reclassifi ed and repositioned for consistency with current year disclosures.
46
Select Harvests Annual Report 2010
Notes to the Financial Statements
(aa) 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 fi nancial report. Amounts in the fi nancial report have been rounded off in accordance with
that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
(ab) Parent entity fi nancial information
The fi nancial information for the parent entity, Select Harvests Limited, disclosed in note 37 has been prepared on the same basis as
the consolidated fi nancial statements, except as set out below.
(i) Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the fi nancial statements of Select
Harvests Limited. Dividends received from associates are recognised in the parent entity’s profi t or loss, rather than being deducted
from the carrying amount of these investments.
(ii) Tax consolidation legislation
Select Harvests Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.
The head entity, Select Harvests Limited, and the controlled entities in the tax consolidated group 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 standalone
taxpayer in its own right.
In addition to its own current and deferred tax amounts, Select Harvests Limited also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax
consolidated group.
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’ fi nancial 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 fi nancial year.
The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts
receivable from or payable to other entities in the group.
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.
2. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of fi nancial 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.
Select Harvests Annual Report 2010
47
Notes to the Financial Statements
Management and the Board review the foreign exchange position of the Group and, where appropriate, take out forward exchange
contracts, transacted with the Group’s banker, to manage foreign exchange risk.
The exposure to foreign currency risk at the reporting date was as follows:
GROUP
Trade receivables net of payables
Cash at bank/(overdraft)
Foreign exchange contracts
- buy foreign currency (cash fl ow hedges)
- sell foreign currency (cash fl ow hedges)
Group sensitivity analysis
30 JUNE 2010
USD $000’s
5,798
(2,377)
30 JUNE 2009
USD $000’s
9,186
(2,253)
5,367
6,874
3,740
14,464
Based on fi nancial instruments held at the 30 June 2010, had the Australian dollar strengthened/weakened by 5% against the US
dollar, with all other variable’s held constant, the Group’s post tax profi t for the year would have been $136,000 lower/$150,000
higher (2009: $287,000 lower/$317,000 higher), mainly as a result of the US dollar denominated fi nancial instruments as detailed in
the above table. Other components of equity would have been $195,000 higher/$216,000 lower (2009:$730,000 higher/$806,000
lower), arising mainly from foreign forward exchange contracts designated as cash fl ow hedges.
(ii) Cash fl ow interest rate risk
The Group’s interest rate risk arises from borrowings issued at variable rates, which exposes the Group to cash fl ow interest rate
risk. The Group’s borrowings at variable interest rate are denominated in Australian dollars.
At the reporting date the Group had the following variable rate borrowings:
30 JUNE 2010
WEIGHTED AVERAGE
INTEREST RATE
%
Commercial bill facility
Overdraft
8.00%
3.80%
An analysis of maturities is provided in 2(c) below
30 JUNE 2009
WEIGHTED AVERAGE
INTEREST RATE
%
7.87%
3.80%
BALANCE
$000
55,000
3,153
BALANCE
$000
56,500
2,793
The Group analyses interest rate exposure on an ongoing basis in conjunction with debt facility, cash fl ow and capital management.
As part of the Risk Management policy of Select Harvests Limited, the company has entered into an agreement to cap $30,000,000
of debt at a rate of 5.75% to reduce the risk that higher interest rates pose to the company’s cash fl ows.
Group sensitivity
At 30 June 2010, if interest rates had changed by +/- 25 basis points from the year end rates with all other variables held constant,
post tax profi t for the year would have been $94,000 lower/higher (2009: $94,000 lower/higher).
48
Select Harvests Annual Report 2010
Notes to the Financial Statements
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l
a
i
c
n
a
n
fi
l
a
t
o
T
Select Harvests Annual Report 2010
49
Notes to the Financial Statements
(b) Credit risk
Credit risk arises from cash and cash equivalents, derivative fi nancial instruments and deposits with banks and fi nancial
institutions, as well as exposure to wholesale, retail and farm investor customers, including outstanding receivables and committed
transactions.
The Group has no signifi cant 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 fi nancial institutions.
The credit quality of fi nancial 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. Given that the majority if income is derived from large, blue chip
customers with no history of default, the provision raised against receivables is deemed to be satisfactory.
The Group’s banking partner has a long-term credit rating of AAA (Standard & Poors).
Refer to note 10 for a summary of aged receivables impaired, and past due but not impaired.
(c) Liquidity risk
The Group manages liquidity risk by continuously monitoring forecast and actual cash fl ows and matching the maturity profi les of
fi nancial assets and liabilities.
Financing arrangements
The Group had access to the following undrawn borrowing facilities at the reporting date:
Floating rate
- Commercial bill facility
- Bank overdraft facility USD
2010
$’000
$A 25,000
$US 623
2009
$’000
$A 8,500
$US 747
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 over a three year term.
Fair Value Measurement
The fair value of fi nancial assets and fi nancial liabilities must be estimated for recognition and measurement or for disclosure
purposes. As of 1 July 2009, Select Harvests Limited has adopted the amendment to AASB 7 Financial Instruments: Disclosures
which requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:
(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level one);
(b) Inputs over than quoted prices included within level one that are observable for the asset or liability, either directly (as prices) or
indirectly (derived from prices) (Level two); and
(c) Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level three).
50
Select Harvests Annual Report 2010
Notes to the Financial Statements
Maturities of fi nancial liabilities
The table below analyses the Group’s fi nancial 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 fl ows and are all Level 2 inputs.
LESS THAN
6 MONTHS
$’000
6 – 12
MONTHS
$’000
MORE THAN 12
MONTHS
$’000
TOTAL
CONTRACTUAL
CASH FLOWS
$’000
CARRYING
AMOUNT
(ASSETS)/
LIABILITIES
$’000
-
3,153
(107)
(5,367)
6,807
1,440
20,000
-
(100)
-
67
67
55,000
-
(329)
-
-
-
75,000
3,153
(536)
(5,367)
6,874
1,507
LESS THAN 12
MONTHS
$’000
MORE THAN 12
MONTHS
$’000
TOTAL
CONTRACTUAL
CASH FLOWS
$’000
56,500
2,793
(3,740)
7,884
4,144
-
-
-
-
-
-
-
-
6,580
6,580
56,500
2,793
(3,740)
14,464
10,724
55,000
3,153
(536)
(183)
42
(141)
CARRYING
AMOUNT
(ASSETS)/
LIABILITIES
$’000
56,500
2,793
149
2,322
2,173
Group at 30 June 2010
Non derivatives
Variable Rate
Bills payable
Bank Overdraft
Derivatives
Interest Rate Cap
USD buy -
outfl ow
USD sell - infl ow
USD net
Group at 30 June 2009
Non derivatives
Variable Rate
Bills payable
Derivatives
Bank Overdraft
USD buy -
outfl ow
USD sell - infl ow
USD net
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 defi nition, 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 fi nancial year are discussed below.
Almond Trees
Almond trees are classifi ed 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 15 of the fi nancial statements. As at 30 June 2010, the value of almond trees carried
in the fi nancial statements of the consolidated entity is $17.4 million (2009:$14.3 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.
Key assumptions are disclosed in note 16.
Select Harvests Annual Report 2010
51
Notes to the Financial Statements
4. REVENUE
Revenue from continuing operations
- Management services
- Sale of goods
Other revenue
Interest
- Other persons/corporations
Total interest
Total other revenue
Total revenue
5. EXPENSES
Profi t before tax includes the following specifi c expenses:
Cost of goods & services sold
Depreciation of non current assets
Buildings
Plantation land and irrigation systems
Leased plant and equipment
Plant and equipment
Total depreciation of non current assets
Finance costs
other persons
capitalised
Total fi nance costs
Impairment losses: trade receivables
Foreign exchange (gain)
Operating lease rental minimum lease payments
Net loss (gain) on disposal of property, plant and equipment
(a) Capitalised Borrowing Costs
NOTES
CONSOLIDATED
2010
$’000
2009
$’000
102,321
136,055
238,376
735
735
735
108,259
140,322
248,581
93
93
93
239,111
248,674
NOTES
CONSOLIDATED
2010
$’000
2009
$’000
200,651
199,429
51
355
-
4,546
4,952
3,718
(772)
2,946
170
98
10,692
(15)
236
356
34
4,170
4,796
4,585
(712)
3,873
4,695
(279)
10,681
53
5a
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, 8% (2009 – 7.87%)
52
Select Harvests Annual Report 2010
Notes to the Financial Statements
6. INCOME TAX
(a) Income tax expense
Current Tax
Deferred tax
(Over) provided in prior years
Income tax expense is attributable to:
Profi t 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
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profi t from continuing operations before income tax expense
Tax at the Australian tax rate of 30% (2009 – 30%)
Tax effect of amounts that are not deductible
(taxable) in calculating taxable income
Other non allowable items
Other non assessable items
Under/(over) provision of previous year
Income tax expense
NOTES
CONSOLIDATED
2010
$’000
2009
$’000
22
2,196
4,929
(775)
6,350
6,350
6,350
-
4,929
4,929
8,213
(1,439)
(439)
6,335
6,335
6,335
55
(1,494)
(1,439)
23,603
23,047
7,081
6,914
44
-
(775)
6,350
10
(150)
(439)
6,335
7. DISCONTINUED OPERATIONS
There are no discontinued operations impacting the reported results in the current fi nancial year or the prior fi nancial year.
Select Harvests Annual Report 2010
53
Notes to the Financial Statements
8. DIVIDENDS PAID OR PROPOSED FOR ON ORDINARY SHARES
NOTES
CONSOLIDATED
2010
$’000
2009
$’000
(a) Dividends paid during the year
(i) Interim - paid 9 April 2010 (2009: 16 April 2009)
Fully franked dividend (10c per share)
(2009: 12c per share)
(ii) Final – nil (2009: 1 October 2008)
Fully franked dividend (nil c per share)
(2008: 23c per share)
(b) Dividends proposed and not recognised as a liability
A fi nal dividend of 11c per share has been declared by the directors ($4,375,642)
(c) Franking credit balance
Franking credits available for the subsequent fi nancial year arising from:
Franking account balance as at the
beginning of the fi nancial year
Current year tax payment instalments and
adjustments
Interim dividends paid
Franking account balance at end of fi nancial
year
Current year income tax payable/(receivable)
Dividend declared
Franking account balance after payment of
current year tax and dividends
3,922
3,922
-
3,922
42,730
17,009
(3,922)
55,817
(6,113)
(4,376)
45,328
4,707
4,707
8,972
13,679
28,817
10,299
(4,707)
34,409
8,321
-
42,730
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, is $4,375,642 (2009 - $nil).
9. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
(a) Reconciliation to cash at the end of the year
The above fi gures are reconciled to cash at the end of the fi nancial
year as shown in the statement of cash fl ow as follows:
Balances as above
Bank overdrafts
20
13,184
13,184
13,184
(3,153)
10,031
6,945
6,945
6,945
(2,793)
4,152
54
Select Harvests Annual Report 2010
Notes to the Financial Statements
10. RECEIVABLES (CURRENT)
Trade receivables
Provision for impairment of trade receivables
Prepayments
(a) Impaired trade receivables
NOTES
CONSOLIDATED
2010
$’000
33,000
(170)
32,830
665
33,495
As at 30 June 2010 current trade receivables of the Group with a value of $170,000 (2009: $4,668,000) were impaired.
The amount of the provision was $170,000 (2009:$4,668,000).
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 2009
Provision for impairment recognised during the year
Receivables written off during the year
At 30 June 2010
CONSOLIDATED
2010
$’000
170
170
4,688
170
(4,688)
170
2009
$’000
46,126
(4,688)
41,438
1,690
43,128
2009
$’000
17
17
15
4,695
(22)
4,688
Provision for impairment recognised during the 2009 year includes $4,667 relating to revenues earned but not yet collected from
Almond Management Pty Ltd, a subsidiary of Timbercorp Limited
(b) Trade receivables past due but not impaired
As at 30 June 2010, trade receivables of $4,094,787 (2009: $5,566,108) 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
(c) Effective interest rates and credit risk
All receivables are non-interest bearing.
CONSOLIDATED
2010
$’000
3,607
277
211
4,095
2009
$’000
5,165
183
218
5,566
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 2.
Select Harvests Annual Report 2010
55
Notes to the Financial Statements
(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
2010
$’000
2009
$’000
11. INVENTORIES (CURRENT)
Raw Materials
Raw materials at cost
Finished goods
Finished goods at cost
Other inventory
Other inventory at cost
Almond stocks
Almond stock at cost
Almond stock fair value adjustment
1(f)
12. DERIVATIVE FINANCIAL INSTRUMENTS (CURRENT)
Current Assets
Forward exchange contracts – cash fl ow hedges
Interest rate cap – cash fl ow hedges
Total current derivative fi nancial instrument assets
Current Liabilities
Forward exchange contracts – cash fl ow hedges
Total current derivative fi nancial instrument liabilities
9,250
9,250
8,200
8,200
6,468
6,468
6,019
4,215
10,234
34,152
183
358
541
42
42
8,911
8,911
9,911
9,911
5,564
5,564
1,768
2,526
4,294
28,680
2,322
-
2,322
149
149
(i) Cash fl ow hedges
On 1 April 2010, the consolidated entity entered into an agreement to fi x the interest rate applicable to $30m of debt at 5.75% for a
term of 3 years. The market value of the cap is recognised as a current asset in the Balance Sheet. Movements in the fair value of the
cap are treated similar to those of forward exchange contracts. Movements caused by changes in the intrinsic value of the cap are
recognised in Other Comprehensive Income to the extent that the hedge is effective; those relating to a change in the time value of
money are recognised in the income statement.
The consolidated entity also enters into forward exchange contracts to buy and sell specifi ed 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.
56
Select Harvests Annual Report 2010
Notes to the Financial Statements
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 $1,506,736 (2009: $10,724,000).
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
SELL AUSTRALIAN DOLLARS
AVERAGE EXCHANGE RATE
Less than 6 months
2010
$’000
5,367
5,367
2009
$’000
3,740
3,740
2010
$
0.87
SELL UNITED STATES DOLLARS SETTLEMENT
BUY AUSTRALIAN DOLLARS
AVERAGE EXCHANGE RATE
Less than 6 months
6 months to 1 year
More than 1 year
(ii) Credit risk exposures
2010
$’000
6,807
67
-
6,874
2009
$’000
7,884
-
6,580
14,464
2010
$
0.85
0.89
-
2009
$
0.78
2009
$
0.73
-
0.67
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised fi nancial
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 fi nancial statements.
Credit risk for derivative fi nancial 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 and the interest rate cap are the net fair values of
these instruments.
The consolidated entity does not have any material credit risk exposure to any single debtor or group of debtors under fi nancial
instruments entered into by the consolidated entity.
Select Harvests Annual Report 2010
57
NOTES
CONSOLIDATED
2010
$’000
2009
$’000
1,553
1,553
-
-
14(a)
14(a)
14(a)
14(a)
10,609
(753)
9,856
30,091
(3,084)
27,007
36,863
69,583
(30,841)
38,742
11,955
50,697
122,238
(34,678)
87,560
10,511
(702)
9,809
30,091
(2,729)
27,362
37,171
66,173
(26,295)
39,878
3,438
43,316
110,213
(29,726)
80,487
Notes to the Financial Statements
13. OTHER RECEIVABLES (NON-CURRENT)
Prepayments
14. PROPERTY, PLANT AND EQUIPMENT
Buildings
At cost
Accumulated depreciation
Plantation Land and irrigation systems
At cost
Accumulated depreciation
Total land and buildings
Plant and equipment
At cost
Accumulated amortisation
Capital works in progress
At cost
Total plant and equipment
Total property, plant and equipment
Cost
Accumulated depreciation and amortisation
Total written down amount
58
Select Harvests Annual Report 2010
Notes to the Financial Statements
(a) Reconciliations
Reconciliations of the carrying amounts of property, plant and equipment at the beginning and end of the current fi nancial year.
NOTES
CONSOLIDATED
Buildings
Carrying amount at beginning
Transfers between classes
Depreciation expense
Plantation land and irrigation systems
Carrying amount at beginning
Additions
Transfers between classes
Depreciation expense
Plant and equipment under lease
Carrying amount at beginning
Disposals
Transfer 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
Reclassifi cation from Trade & Other Receivables
Expensed to profi t & loss
Transfers between classes
Reclass to Biological Assets
Total written down value
2010
$’000
9,809
98
(51)
9,856
27,362
-
-
(355)
27,007
-
-
-
-
-
39,878
-
(94)
3,504
(4,546)
38,742
3,438
12,143
-
(24)
(3,602)
-
11,955
87,560
2009
$’000
2,343
7,702
(236)
9,809
19,226
3
8,489
(356)
27,362
198
(164)
-
(34)
-
14,256
2
(50)
29,840
(4,170)
39,878
37,112
12,208
3,867
(6)
(46,031)
(3,712)
3,438
80,487
Select Harvests Annual Report 2010
59
Notes to the Financial Statements
15. 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 2010 the consolidated entity owned a total of 4,142 acres of almond orchards (2009: 1,863 acres) and leased a total
of 4,521 acres of almond orchards (2009: 1,505 acres).
During the year ended 30 June 2010, 2,800 metric tonnes of almonds were harvested from these orchards (2009: 2,600 metric
tonnes). These almonds had a fair value less estimated point of sale costs of $15.3 million (2009: $13.0 million).
Carrying amount at 1 July
Reclass to Biological Assets*
Tree development costs
Carrying amount at 30 June
CONSOLIDATED
2010
$’000
14,261
-
3,102
17,363
2009
$’000
6,039
3,712
4,510
14,261
* Due to the reporting of leased orchard tree valuations in a consistent manner with owned orchards, a reclassifi cation of Property, Plant &
Equipment to Biological Assets has been retrospectively applied to the 2009 accounts. There is no impact on Net Assets as it is simply a reclass
between two Non-Current Assets.
Developing almond trees are valued at their growing cost until the year they bear their fi rst commercial crop. The value of crop
bearing almond trees is calculated using a discounted cash fl ow methodology. The discounted cash fl ow 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 fl ows are discounted at a rate of 14% (2009: 17%) which 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.
Price risk
The Group is exposed to commodity price risk in relation to its owned orchards. The Group sells almonds harvested from owned
orchards domestically and overseas throughout the year based on an almond price which will fl uctuate 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 fl uctuate 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 fi xed prices.
(a) Financial risk management strategies
The consolidated entity is exposed to fi nancial 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 fi nancial risk management.
(b) Non-current assets pledged as security
Refer to Note 21 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.
60
Select Harvests Annual Report 2010
Notes to the Financial Statements
16. INTANGIBLES
Year ended 30 June 2009
Opening net book amount
Closing net book amount
Year ended 30 June 2010
Opening net book amount
Closing net book amount
CONSOLIDATED
GOODWILL
$’000
BRAND NAMES*
$’000
PERMANENT
WATER RIGHTS
$’000
25,995
25,995
25,995
25,995
2,905
2,905
2,905
2,905
10,236
10,236
10,236
10,236
TOTAL
$’000
39,136
39,136
39,136
39,136
* Brand name assets relate to the “Lucky” brand, which has been assessed as having an indefi nite 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 and brand names
Goodwill is allocated to the consolidated entity’s cash-generating units (CGU) identifi ed according to operating 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 fl ow projections based on fi nancial projections by management covering a fi ve-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 12.8% has been used to discount the cash fl ow projections.
(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 2010.
If a pre-tax discount rate of 13.8% was used instead of 12.8% the recoverable amount of the goodwill in the Food Products Division
would still exceed the carrying amount of goodwill at 30 June 2010.
(c) Permanent water rights
The value of permanent water rights relates to the almond division Cash Generating Unit (CGU) and is an integral part of land and
irrigation infrastructures required to grow almond orchards. The fair value of permanent water rights is supported by the tradeable
market value, which at current market prices is in excess of book value.
NOTES
CONSOLIDATED
17. TRADE AND OTHER PAYABLES (CURRENT)
Trade creditors
Other creditors and accruals
18. INTEREST BEARING LIABILITIES (CURRENT)
Secured
Bank overdraft
Commercial Bills payable
Total secured current borrowings
2010
$’000
17,168
20,336
37,504
3,153
15,000
18,153
2009
$’000
7,047
29,717
36,764
2,793
56,500
59,293
Select Harvests Annual Report 2010
61
Notes to the Financial Statements
(a) Security
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 21.
Bills Payable is the current portion of the interchangeable Debt.
(b) Interest rate risk exposures
Details of the consolidated entity’s exposure to interest rate changes on borrowings are set out in Note 2.
NOTES
CONSOLIDATED
19. PROVISIONS (CURRENT)
Employee benefi ts
20. TRADE AND OTHER PAYABLES (NON-CURRENT)
Interest rate cap payable
21. INTEREST BEARING LIABILITIES (NON-CURRENT)
Commercial Bills payable
2010
$’000
2,770
2,770
329
329
40,000
40,000
2009
$’000
2,576
2,576
-
-
-
-
62
Select Harvests Annual Report 2010
Notes to the Financial Statements
Assets pledged as security
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.
The carrying amounts of assets pledged as security for current and non-current borrowings are:
NOTES
CONSOLIDATED
2010
$’000
2009
$’000
Current
Floating charge
Cash and cash equivalents
Receivables
Inventories
Current tax receivables
Derivative fi nancial instruments
Total current assets pledged as security
Non-current
Floating charge
Prepayments
Property, plant and equipment
Biological assets – almond trees
Permanent water rights
Total non-current assets pledged as security
Total assets pledged as security
Financing arrangements
13,184
33,495
34,152
2,621
541
83,993
1,553
87,560
17,363
10,236
116,712
200,705
6,945
43,128
28,680
-
2,322
81,075
-
80,487
14,261
10,236
104,960
186,035
The consolidated entity and the Company have bank overdraft facilities available to the extent of USD 3,000,000
(2009: USD 3,000,000).
The consolidated entity and the Company have a commercial bill facility available to the extent of $75,000,000 (2009:
$65,000,000). As at 30 June 2010 the consolidated entity and Company have used $55,000,000 (2009: $56,500,000). The split
between current and no current liabilities has been based on the repayment requirements under the terms of the debt facility.
The current interest rates are 5.76% on the commercial bill facility, and 2.41% on the United States dollar bank overdraft facility.
A number of covenants and fi nancial undertakings are associated with the company banking facilities, all of which have been met
during the period and as at 30 June 2010.
Select Harvests Annual Report 2010
63
Notes to the Financial Statements
22. DEFERRED TAX LIABILITIES (NON CURRENT)
The balance comprises temporary differences attributable to:
Amounts recognised in profi t and loss
Inventory
Assets at cost
Employee benefi ts
Accruals
Provisions
Intangibles
Operating leases
Amounts recognised directly in OCI
Cash fl ow hedges
Movements:
Opening balance 1 July
Credited / (charged) to income statement
Credited / (charged) to OCI
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
23. PROVISIONS (NON CURRENT)
Employee entitlements
(a) Aggregate employee entitlements liability
(b) Number of full time employees at year end
24. CONTRIBUTED EQUITY
(a) Issued and paid up capital
Ordinary shares fully paid
(b) Movements in shares on issue
Beginning of the fi nancial year
Issued during the year
• Dividend reinvestment scheme
End of Financial year
64
Select Harvests Annual Report 2010
NOTES
CONSOLIDATED
2010
$’000
2009
$’000
2,416
14,574
(1,208)
(746)
245
871
-
16,152
150
16,302
10,871
4,929
502
16,302
13,523
2,779
16,302
884
3,654
387
1,338
10,709
(1,093)
898
(1,995)
870
(396)
10,331
540
10,871
13,020
(1,494)
(655)
10,871
11,222
(351)
10,871
864
3,440
366
47,470
47,470
46,433
46,433
2010
NUMBER OF
SHARES
39,518,915
259,652
39,778,567
2009
NUMBER OF
SHARES
39,008,928
509,987
39,518,915
$’000
46,433
1,037
47,470
$’000
44,375
2,058
46,433
Notes to the Financial Statements
(c) Share options
Employee share scheme
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 fi xed 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 fi nancial year, no options (2009: no options) have vested under this scheme (refer Note 35 and Directors’ Report for
further details). The market value of ordinary Select Harvests Limited shares closed at $3.46 on 30 June 2010 ($2.16 on 30 June 2009).
(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.
NOTES
CONSOLIDATED
25. RESERVES AND RETAINED PROFITS
Capital reserve
Cash fl ow hedge reserve
Asset revaluation reserve
Options reserve
Retained profi ts
(a) Movements
Capital reserve
Balance at beginning of year
Balance at end of year
Cash fl ow hedge reserve
Balance at beginning of year
Interest rate cap intrinsic
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
Balance at end of year
25(a)
25(a)
25(a)
25(a)
25(c)
2010
$’000
3,270
(222)
7,645
634
11,327
54,824
3,270
3,270
1,520
320
(2,062)
(222)
7,645
7,645
514
120
634
2009
$’000
3,270
1,520
7,645
514
12,949
41,494
3,270
3,270
(9)
-
1,529
1,520
7,645
7,645
329
185
514
Select Harvests Annual Report 2010
65
Notes to the Financial Statements
(b) Nature and purpose of reserves
(i) Capital reserve
The capital reserve is used to isolate realised capital profi ts 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. This revaluation reserve is no longer in use given assets are now recorded at cost.
This is in line with accounting policies within note 1.
(iii) Options reserve
The options reserve is used to recognise the fair value of options granted but not exercised.
(iv) Cash fl ow hedge reserve
The cash fl ow hedge reserve is used to record gains or losses on foreign exchange contracts in a cash fl ow hedge that are recognised
directly in equity.
NOTES
CONSOLIDATED
(c) Retained profi ts
Balance at the beginning of year
Profi t attributable to members of Select Harvests Limited
Total available for appropriation
Dividends paid
Balance at end of year
26.RECONCILIATON OF THE NET PROFIT AFTER INCOME TAX TO THE NET
CASH FLOWS FROM OPERATING ACTIVITIES
Net profi t
Non-cash items
Depreciation and amortisation
Almond stock fair value adjustment
Net loss on disposal of property, plant and equipment
Changes in assets and liabilities
(Increase) / decrease in trade receivables
(Increase) in inventory
(Increase) in receivables and other assets
Increase in trade and other payables
(Decrease) / increase in income tax payable
Increase/ (decrease) in deferred income tax liability
(Increase) / decrease in deferred tax assets
Increase in employee entitlements
Net cash fl ow from operating activities
2010
$’000
41,494
17,252
58,746
(3,922)
54,824
17,253
4,952
(1,629)
-
8,249
(5,472)
(528)
3,188
(6,187)
7,598
(2,143)
214
25,495
2009
$’000
38,461
16,712
55,173
(13,679)
41,494
16,712
4,796
1,951
53
(4,440)
(1,401)
(1,491)
3,516
4,127
(2,149)
600
299
22,573
Non cash fi nancing activities
During the current year the company issued $1,036,719 of new equity as part of the Dividend Reinvestment Plan (refer to note 24).
66
Select Harvests Annual Report 2010
Notes to the Financial Statements
NOTES
CONSOLIDATED
2010
$’000
2009
$’000
27. 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 fi ve years
Later than fi ve years
(i) Operating leases (non cancellable):
Minimum lease payments
• Not later than one year
• Later than one year and not later than fi ve years
• Later than fi ve years
• Aggregate lease expenditure contracted for at reporting date
Operating lease payments are for rental of premises, farming and factory equipment.
(ii) Almond orchard leases:
Minimum lease payments
• Not later than one year
• Later than one year and not later than fi ve years
• Later than fi ve years
Aggregate expenditure commitments comprise:
Aggregate lease expenditure contracted for at reporting date
15,690
40,730
105,786
162,206
10,006
16,387
8,692
35,085
11,532
27,071
50,357
88,960
9,026
16,338
9,997
35,361
5,684
24,343
97,094
2,506
10,733
40,360
127,121
53,599
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 fi rst right of refusal to purchase the properties in the event that the lessor wished to sell. Other
leases within Select have renewal and fi rst right of refusal clauses. There is also a 20 year lease of 3,100 acres at Hillston with Rural
Funds Management.
28. EVENTS OCCURING AFTER BALANCE DATE
On 23 August 2010, the Directors declared a fi nal dividend of 11 cents per share in relation to the fi nancial year ended 30 June 2010
to be paid on 4 October 2010.
On 27 July 2010, Mr F Grimwade was appointed to the board as a Non-Executive Director.
On 23 August 2010, the company announced a $48 million fully underwritten equity raising to existing shareholders.
There has been no other matter or circumstance, which has arisen since 30 June 2010 that has signifi cantly affected or may
signifi cantly affect:
a) the operations, in fi nancial years subsequent to 30 June 2010, of the consolidated entity, or
b) the results of those operations, or
c) the state of affairs, in fi nancial years subsequent to 30 June 2010, of the consolidated entity.
Select Harvests Annual Report 2010
67
Notes to the Financial Statements
29. EARNINGS PER SHARE
The following refl ects the income and share data used in the calculations of basic and diluted earnings per share:
Profi t attributable to equity holders of the company
used in calculating basic earnings per share
Diluted earnings per share:
Profi t 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:
Adjusted weighted average number of ordinary shares
used in calculating diluted earnings per share
CONSOLIDATED
2010
$’000
17,253
2009
$’000
16,712
17,253
16,712
NUMBER OF SHARES
2010
2009
39,778,567
39,518,915
39,778,567
39,518,915
30. 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 qualifi ed 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 fi xed remuneration, performance based remuneration, and equity based
remuneration.
Executive directors and key management personnel may receive short term incentives based on achievement of specifi c business
plans and performance indicators, which include fi nancial and operational targets relevant to performance at the consolidated
entity level, divisional level, or functional level, as applicable, for the fi nancial 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 $65,000 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 fi nancial year:
(i) Chairman – non-executive
J C Leonard
(ii) Executive director
J Bird, Managing Director
(iii) Non-executive directors
M A Fremder
R M Herron
M Carroll
68
Select Harvests Annual Report 2010
Notes to the Financial Statements
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 fi nancial year:
NAME
K Martin
T Millen
L Van Driel
P Chambers
P Ross
M Graham
POSITION
EMPLOYER
Operations Manager, Food Products Division
Select Harvests Limited
Group Horticultural & Farm Operations Manager
Kyndalyn Park Pty Ltd
Group Trading Manager
Select Harvests Food Products Pty Ltd
Chief Financial Offi cer & Company Secretary
Select Harvests Limited
Operations Manager, Almond Division
Kyndalyn Park Pty Ltd
Manager Sales & Marketing
Select Harvests Food Product Pty Ltd
(c) Key management personnel compensation
Short term employment benefi ts
Long service leave
Share based payments
NOTES
CONSOLIDATED
2010
$
2009
$
2,824,882
2,755,075
41,378
115,158
51,053
48,196
2,981,418
2,854,324
(d) Equity instrument disclosures relating to key management personnel
Number of options held by directors and key management personnel
The movement during the fi nancial 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:
2010
Directors
J Bird
Key Management Personnel
K Martin (Group Operations Manager)
T Millen (Group Horticultural & Farm
Operations Manager)
L Van Driel (Group Trading Manager)
P Chambers (Chief Financial Offi cer &
Company Secretary)
P Ross (Operations Manager Almond Division)
HELD AT
1 JULY 2009
GRANTED AS
COMPENSATION
LAPSED
HELD AT
30 JUNE 2010
UNVESTED AT
30 JUNE 2010
297,003
190,744
(36,765)
450,982
450,982
63,345
45,536
-
108,881
108,881
63,363
61,656
66,057
36,765
41,071
(7,798)
41,071
(7,563)
48,214
44,643
-
-
96,635
95,164
114,271
81,408
96,635
95,164
114,271
81,408
Select Harvests Annual Report 2010
69
Notes to the Financial Statements
2009
Directors
J Bird
Key Management Personnel
K Martin (Group Operations Manager)
T Millen (Group Horticultural &
Farm Operations Manager)
L Van Driel (Group Trading Manager)
P Chambers (Chief Financial Offi cer &
Company Secretary)
P Ross (Operations Manager Almond Division)
HELD AT
1 JULY 2008
GRANTED AS
COMPENSATION
LAPSED
HELD AT
30 JUNE 2009
UNVESTED AT
30 JUNE 2009
186,023
157,114
(46,134)
297,003
297,003
25,845
35,135
37,166
26,351
-
37,500
-
35,294
(7,066)
33,824
(9,334)
39,706
36,765
-
-
63,345
63,363
61,656
66,057
36,765
63,345
63,363
61,656
66,057
36,765
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 fi nancial 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:
2010
Directors – Non Executive
M A Fremder
J C Leonard
R M Herron
M Carroll
Directors – Executive
J Bird
Key Management Personnel
K Martin (Group Operations Manager)
T Millen (Group Horticultural &
Farm Operations Manager)
L Van Driel (Group Trading Manager)
P Chambers (Chief Financial Offi cer &
Company Secretary)
P Ross (Operations Manager, Almond Division)
HELD AT
1 JULY 2009
RECEIVED ON
EXERCISE OF
OPTIONS
OTHER – DRP,
SALES &
PURCHASES
5,777,234
615,628
18,772
-
619,522
-
45,444
-
-
-
-
-
-
-
-
-
-
-
-
-
58,000
48,040
-
-
-
-
-
-
-
-
TOTAL
5,835,234
663,668
18,772
-
619,522
-
45,444
-
-
-
70
Select Harvests Annual Report 2010
Notes to the Financial Statements
2009
Directors – Non Executive
M A Fremder
J C Leonard
G F O’Brien
R M Herron
M Carroll
Directors – Executive
J Bird
Key Management Personnel
K Martin (Group Operations Manager)
T Millen (Group Horticultural &
Farm Operations Manager)
L Van Driel (Group Trading Manager)
P Chambers (Chief Financial Offi cer &
Company Secretary)
HELD AT
1 JULY 2008
RECEIVED ON
EXERCISE OF
OPTIONS
OTHER – DRP,
SALES &
PURCHASES
5,777,234
581,779
54,769
8,772
-
619,522
-
45,444
-
-
-
-
-
-
-
-
-
-
-
-
-
33,849
4,580
10,000
-
-
-
-
-
-
TOTAL
5,777,234
615,628
59,349
18,772
-
619,522
-
45,444
-
-
(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 2010 are detailed in Note 32.
31. REMUNERATION OF AUDITORS
Audit and other assurance services
Audit and review of fi nancial statements
Other assurance services
Total remuneration for audit and other assurance services
Taxation services
Tax compliance services
Tax consulting
Total remuneration for taxation services
Total remuneration of PricewaterhouseCoopers
2010
$
192,450
45,000
237,450
64,355
23,145
87,500
324,950
2009
$
185,950
23,210
209,160
28,300
24,350
52,650
261,810
Select Harvests Annual Report 2010
71
Notes to the Financial Statements
32. RELATED PARTY DISCLOSURES
(a) Parent entity
The parent entity within the consolidated entity is Select Harvests Limited.
(b) Subsidiaries
Interests in subsidiaries are set out in Note 34.
(c) Key management personnel
Disclosures relating to key management personnel are set out in Note 30.
(d) 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 $1,555,112 (2009: $1,805,723) during the fi nancial 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 $4,851,165 (2009: $3,546,136) during the fi nancial 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.
At 30 June 2010, the total amount receivable from director related entities in respect to the above transaction is $1,626,772.
During the fi nancial year the company entered into foreign exchange contracts on behalf of Almas Pty Limited and Maxdy Pty Ltd,
under conditions which pass costs and benefi ts to the related parties under normal commercial terms.
A former non-executive director of the Company, Mr Dan O’Brien, acquired from Select Harvests, via an associated entity.
$nil (2009: $146,974) worth of almond hull suitable for livestock feed. This was purchased at market prices.
33. SEGMENT INFORMATION
Segment products and locations
The consolidated group has adopted the new segment accounting standard AASB 8 Operating Segments from 1 July 2009.
The segment reporting refl ects the way information is reported internally to the Board of directors.
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.
72
Select Harvests Annual Report 2010
Notes to the Financial Statements
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2
Select Harvests Annual Report 2010
73
Notes to the Financial Statements
34. CONTROLLED ENTITIES
Parent Entity:
Select Harvests Limited
Subsidiaries of Select Harvests Limited:
Kyndalyn Park Pty Ltd
Select Harvests Food Products Pty Ltd
Meriram Pty Ltd
Kibley Pty Ltd
35. EMPLOYEE BENEFITS
Executive share option scheme
COUNTRY OF INCORPORATION
PERCENTAGE OWNED (%)
2010
2009
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 fi nancial 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 fi rst 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 vesting of options is
conditional upon the consolidated entity achieving growth of at least 10% in EPS in each fi nancial year over the preceding fi nancial
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.
74
Select Harvests Annual Report 2010
Notes to the Financial Statements
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75
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3
Notes to the Financial Statements
35. EMPLOYEE BENEFITS (cont.)
The amounts recognised in the fi nancial statements of the consolidated entity in relation to executive share options exercised
during the fi nancial year were:
Issued and Paid up Capital
CONSOLIDATED
2010
$
-
2009
$
-
(b) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefi t expense
were as follows:
Options granted under employee option plan
36. CONTINGENT LIABILITIES
Cross guarantees given by the entities comprising the consolidated entity are detailed in Note 37.
37. PARENT ENTITY FINANCIAL INFORMATION
(a) Summary fi nancial information
The individual fi nancial statements for the parent entity show the following aggregate amounts:
BALANCE SHEET
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Shareholders’ Equity
Issued Capital
Reserves
Capital Reserve
Cash fl ow hedge reserve
Options Reserve
Retained profi ts
Profi t or Loss for the year
Total comprehensive income
(b) Tax consolidation legislation
CONSOLIDATED
2010
$
120,000
120,000
2009
$
48,196
48,196
2010
$’ 000
13,641
206,891
16,532
155,042
47,470
3,270
(222)
633
696
51,847
4,121
2,378
2009
$’ 000
10,397
181,377
64,672
129,141
46,433
3,270
1,520
514
499
52,236
13,419
14,948
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.
76
Select Harvests Annual Report 2010
Notes to the Financial Statements
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’ fi nancial 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 fi nancial 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.
(c) Guarantees entered into by parent entity
Each entity within the consolidated group has entered into a cross deed of fi nancial guarantee in respect of bank overdrafts and
loans of the group.
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.
Select Harvests Annual Report 2010
77
Directors’ Declaration
In the directors’ opinion:
(a) the fi nancial statements and Notes set out on pages 16 to 77 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 consolidated entity’s fi nancial position as at 30 June 2010 and
of its performance for the fi nancial 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
(c) at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group
identifi ed in note 34 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue
of the deed of cross guarantee described in note 37.
Note 1(a) confi rms that the fi nancial statements also comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board.
The directors have been given the declarations by the Managing Director and Chief Financial Offi cer 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, 23 August 2010
78
Select Harvests Annual Report 2010
PricewaterhouseCoopers
ABN 52 780 433 757
Freshwater Place
2 Southbank Boulevard
SOUTHBANK VIC 3006
GPO Box 1331L
MELBOURNE VIC 3001
DX 77
Telephone 61 3 8603 1000
Facsimile 61 3 8603 1999
Website:www.pwc.com/au
Independent auditor’s report to the members of
Select Harvests Limited
Report on the fi nancial report
We have audited the accompanying fi nancial report of Select Harvests Limited (the company), which comprises the balance sheet
as at 30 June 2010, and the income statement, the statement of comprehensive income, statement of changes in equity and
statement of cash fl ows for the year ended on that date, a summary of signifi cant accounting policies, other explanatory notes and
the directors’ declaration for the Select Harvests Limited Group (the consolidated entity). The consolidated entity comprises the
company and the entities it controlled at the year’s end or from time to time during the fi nancial year.
Directors’ responsibility for the fi nancial report
The directors of the company are responsible for the preparation and fair presentation of the fi nancial report in accordance
with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001.
This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of
the fi nancial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state,
in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the fi nancial statements comply with
International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the fi nancial report based on our audit. We conducted our audit in accordance with
Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to
audit engagements and plan and perform the audit to obtain reasonable assurance whether the fi nancial report is free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial report.
The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of
the fi nancial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant
to the entity’s preparation and fair presentation of the fi nancial report in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by the directors, as well as evaluating the overall presentation of the fi nancial report.
Our procedures include reading the other information in the Annual Report to determine whether it contains any material
inconsistencies with the fi nancial report.
Our audit did not involve an analysis of the prudence of business decisions made by directors or management.
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinions.
Liability limited by a scheme approved under Professional Standards Legislation
Select Harvests Annual Report 2010
79
Independent auditor’s report to the members of Select Harvests Limited (cont.)
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Auditor’s opinion
In our opinion:
(a) the fi nancial report of Select Harvests Limited is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the company’s and consolidated entity’s fi nancial position as at 30 June 2010
and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Regulations 2001; and
(b) the consolidated fi nancial statements and notes also comply with International Financial Reporting Standards as
disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 24 of the directors’ report for the year ended 30 June 2010.
The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with
section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our
audit conducted in accordance with Australian Auditing Standards.
Auditor’s opinion
In our opinion, the Remuneration Report of Select Harvests Limited for the year ended 30 June 2010, complies with section 300A of
the Corporations Act 2001.
PricewaterhouseCoopers
Andrew Mill
Partner
PricewaterhouseCoopers
Melbourne
23 August 2010
80
Select Harvests Annual Report 2010
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 2010.
(a) Distribution of equity securities
The number of shareholders, by size of holding, in each class of share is:
NUMBER OF ORDINARY SHARES
1 to 1,000
NUMBER OF SHAREHOLDERS
1,197
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
1,184
334
316
33
The number of shareholders holding less than a marketable parcel of shares is:
NUMBER OF ORDINARY SHARES
-
NUMBER OF SHAREHOLDERS
-
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
1 HSBC Custody Nominees (Australia) Limited
2 Maxdy Nominees Pty Ltd
3 ANZ Nominees Limited
4 Citicorp Nominees Pty Ltd
5 MF Custodians Ltd
6 National Nominees Limited
7 Mirrabooka Investments Limited
8 MF Custodians (account 10051001)
9 Le Grand Pty Ltd
10 Mid Manhattan Pty Ltd
11 Mr John Bird
12 National Australia Trustees Limited
13 Spectrok Pty Ltd
14 Mr Petrus Cornelius Nicolaas Middencorp
15 Longo Pty Ltd
16 RBC Dexia Investor Services Nominees Pty Limited
17 Mr Max Fremder
18 JP Morgan Nominees Australia Limited
19 Dr John Carey
20 RBC Dexia Investor Services Nominees Pty Limited
LISTED ORDINARY SHARES
NUMBER OF SHARES
6,781,633
PERCENTAGE OF ORDINARY
17.06
5,406,671
1,666,275
1,190,793
995,746
760,790
751,064
663,105
629,888
579,244
555,815
534,891
487,789
464,128
460,871
343,241
330,563
313,615
217,215
213,675
13.60
4.19
2.99
2.50
1.91
1.89
1.67
1.58
1.46
1.40
1.35
1.23
1.17
1.16
0.86
0.83
0.79
0.55
0.54
Select Harvests Annual Report 2010
81
ASX additional information
(c) Substantial shareholders
The names of substantial shareholders are:
HSBC Custody Nominees (Australia) Limited
Maxdy Nominees Pty Ltd
ANZ Nominees Limited
(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.
NUMBER OF SHARES
6,781,633
5,406,671
1,666,275
82
Select Harvests Annual Report 2010
Corporate Information
Select Harvests Limited
ABN 87 000 721 380
Directors
J C Leonard (Chairman)
J Bird (Managing Director)
M Carroll (Non-Executive Director)
M Fremder (Non-Executive Director)
R M Herron (Non-Executive Director)
F Grimwade (Non-Executive Director)
Company Secretary
P Chambers
Registered Offi ce – 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
Minter Ellison 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
Select Harvests Annual Report 2010
15
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
14
Select Harvests Annual Report 2010