Transitioning to capture
new opportunities.
Annual Report 2013.
Company
profi le
Select Harvests is Australia’s largest
vertically integrated nut and health food
company with core capabilities across:
Horticulture, Orchard Management,
Processing, Sales and Marketing.
These capabilities enable us to benefi t
throughout the value chain.
We are one of Australia’s largest almond growers and the
country’s leading manufacturer, processor and marketer of nut
products, health snacks and muesli to the Australian retail and
industrial markets, in addition to exporting almonds globally.
Our geographically diverse almond orchards are at or near
maturity. Located in Victoria and New South Wales our
portfolio includes include more than 4,000 hectares
(10,000 acres) of company owned and leased almond orchards.
These orchards, plus other independent orchards, supply our
state-of-the-art primary processing facility at Carina West in
north-west Victoria and our value added processing facility
at Thomastown in the Northern Suburbs of Melbourne. Our
primary processing facility has the capacity to process 22,000
metric tonnes of almonds in the peak season. The plant is
capable of meeting the ever increasing demand for both in-
shell and kernel product. Our processing plant in Thomastown
processes over 10,000 metric tonnes of product per annum.
Select Harvests is one of Australia’s largest almond exporters
and continues to build strong relationships in the fast growing
markets of India and China, as well as maintaining established
routes to market in Asia, Europe and the Middle East.
The Select Harvests Food Division provides a capability
and route to market domestically and around the world for
processed almonds. It supplies both branded and private label
products to the key retailers, distributors and industrial users.
Our market leading brands are: Lucky, Sunsol and Soland in
retail markets and Renshaw and Allinga Farms in wholesale
and industrial markets. In addition to almonds, we market
a broad range of snacking and cooking nuts, health mixes
and muesli.
Select Harvests’ mission
To deliver sustainable shareholder value by being
a global leader in integrated growing, processing
and marketing of almonds.
Contents
02
Letter from the Chairman
04 Managing Director’s Report
07 Performance summary
08 Our new strategy for growth
10 The almond opportunity
11
Heritage and health help
boost almond eating
12 Marketing our products
13 Our people
14 Our Executive Team
15 Our Board of Directors
17
Financial Report Contents
18
Financial Report
Select Harvests Annual Report 2013
1
Letter from
the Chairman
I am pleased to present my second report
as Chairman of Select Harvests. During my
time in the role, the business has managed
a number of diffi cult challenges and is now
well positioned for a period of sustainable
cash fl ow generation and positive returns. The
quick turn-around in business performance
is testament to the solid structure and highly
capable team the Company now has in place.
During 2013, Select Harvests reinforced its
position as a leading player across the diverse
areas of the almond and tree nut industry in
both developed and developing economies
around the world.
I am very pleased that everyone in the
Company has embraced these changes. It has
been great to see the Company come through
a period of structural change in the Australian
almond industry and now have a strong base
from which to grow.
Opportunities for selling and marketing of our
products are particularly compelling. Globally,
there is increased demand for health foods
and health snacks. Tree nuts in particular
continue to experience increased demand.
The demand for almonds is increasing 8%
per annum whilst supply is increasing at
around 4%.
We continued to evolve the business from
being a manager of almond orchards for third
party growers to an owner and operator
of almond orchards integrated to a food
business. The transition of our business model
is now largely complete, with approximately
4,000 hectares (10,000 acres) of almond
orchards owned or leased by the Company,
providing an increased exposure to the almond
value chain.
Select Harvests is well placed to take
advantage of these emerging opportunities.
We are the only publically listed Australian
company exposed to the global almond
industry. We are also one of the few
publically listed agri- businesses with
exposure to these developing markets.
Today, up to approximately 80 per cent of
our crop is exported to international markets
including Asia.
To put this in perspective, 90 per cent of
our Almond Division income stream was
previously derived from managed orchards.
Moving forward, approximately 90 per cent
of this income stream will be derived from
company owned and leased orchards.
We have been on this transition path for the
last few years, restructuring the balance
sheet so we can become what we are today –
a strong business that is positively exposed
to the fundamentals of the almond and
tree nut market.
80 per cent of the world’s almonds are grown
in California where the pipeline for new
investment in almond orchards is challenged
by pressures such as constraints around land
and water availability.
This factor, combined with the tightness
between global supply and demand for
almonds, means Select Harvests is entering its
own sweet spot. We must create a situation
where we are at least growing in parity with
the rest of the world’s suppliers. We need to
develop new sources of supply over the short,
medium and long term. This can occur by
a combination of acquiring new assets and
MICHAEL IWANIW,
CHAIRMAN
2
Select Harvests Annual Report 2013
investing in both brownfi eld and greenfi eld
developments in locations proximate to our
Victorian and NSW growing heartlands.
We are fortunate to own and control our high
quality processing facility in Northern Victoria
which has the capacity to support this ongoing
growth potential.
As part of this growth strategy, during the
year we acquired 520 hectares (1,284 acres)
of orchards at values accretive to Select
Harvests shareholders in order to maintain the
growth rates in our almond orchard portfolio.
Select Harvests will continue to look for
opportunities to expand its orchard portfolio
through acquisition.
Western Australia
As reported at the time of the half year results,
the board took the diffi cult decision to exit
the Western Australian greenfi eld almond
development. This led us to write down the
assets by a further $39.9 million ($27.9 million
after tax) at that time.
The exit decision was taken after a vigorous
and exhaustive review process by our
Horticultural Committee. This process
included an extensive horticultural and
fi nancial review using internal resources and
the external resources of industry experts
in irrigation, horticulture and orchard
management.
Our Management team is now committed
to maximising the value of the Western
Australian assets and the investment made to
date, which comprises 5,546 hectares (13,700
acres) across three properties, high quality
irrigation infrastructure, and 22 giga-litres of
water rights.
A sale process is in progress to obtain initial
expressions of interest, with a number of
opportunities currently being evaluated.
The assets are reported as held for sale in
the accounts at a written down value of
$5 million. We will maintain a patient
approach to realising the maximum potential
for our Western Australian assets.
Funding and capital management
At the beginning of the 2014 fi nancial year we
negotiated new bank funding arrangements
which, at current market rates, will generate
savings for the organisation as well as
increased capacity and longer tenure. The
new facility provides us with the fl exibility
to manage the larger growing crop cycle, and
support additional growth projects which
include the further development of our
almond orchards.
Our banking facilities now comprise
$135 million of capacity, including a
$50 million non - amortising fi ve year term
facility, a $25 million acquisition line, and a
working capital facility to support investment
in the crop growing cycle and other Company
wide investment initiatives. The new facility
is with the NAB and Rabobank, which
diversifi es the funding partners from a
one to two bank structure.
We remain targeted on the effective
deployment of capital in the business. There
has been a lot of effort around managing our
working capital which has been a focus of the
organisation through the year. For example,
working capital of our Food Division is down
by about 20 per cent.
Our net debt position at 30 June 2013 is
$79.2 million, with a gearing ratio (net
debt/equity) of 49.7 per cent. The capital
management and the funding plan going
forward will be closely aligned to our new
strategy to maintain a prudent balance sheet
and support growth plans for the Company.
The capacity of our business to generate
strong operating cash fl ows in the future will
enable us to achieve our target gearing levels.
Financial Performance & Dividend
Select Harvests reported a Net Profi t after
Tax of $2.9m. Post adjustments for the WA
write down and the gain on acquisition, the
underlying NPAT was $22.9m, up 141%. This
underlying result is extremely pleasing and
sustainable in the current market conditions.
At the time of the full year results the board
declared a fi nal fully franked dividend of
9 cents per share, resulting in a total dividend
for the year of 12 cents per share. This refl ects
an increased confi dence in the capacity of
the business to generate sustainable and
improved cash fl ows into the future.
Outlook
In addition to our strong fi nancial
performance, the Board and I believe the
Company made signifi cant progress on
many fronts during the year. The Board
and Executive team completed a formal
strategy review which determined the seven
strategy platforms. As part of this process,
the Company undertook a formal risk
management review focused on identifying
and managing key risks.
We also greatly improved our communication
with shareholders, employees, customers
and suppliers – an important initiative that
is described in more detail in the Managing
Director’s report.
I am pleased that Select Harvests has
transitioned through a challenging period
to deliver such a strong result this year. We
plan to capitalise on this result and continue
our strategic management practises so the
Company achieves even greater outcomes for
our shareholders in future years.
Michael Iwaniw,
Chairman
Select Harvests Annual Report 2013
3
Managing
Director’s Report
During my fi rst year at the helm of this
exciting business I am delighted that the
Company has moved down a pathway of
improvement on so many fronts.
This is especially pleasing in light of the focus
required to resolve issues associated with
our project established to grow almonds
in Western Australia. This process required
signifi cant attention during the year and whilst
the outcome was to exit the project, it does
demonstrate the capacity of the Company to
make tough decisions and adapt to change. We
have a more robust balance sheet and great
prospects for growth into the future.
Select Harvests delivered a positive
performance in 2012-13 as demonstrated by
the underlying fi nancial result. Our strong
underlying earnings benefi ted from a return
to normal growing conditions for almonds,
strong almond prices and a weaker Australian
Dollar in the last four months of 2013.
The global almond market has remained
strong characterised by global consumption
growth of 8% per annum whilst supply grew
at around 4% creating upward price pressure.
Select Harvests has been able to capitalise on
this dynamic.
Our positive performance was a
consequence of our Management team
and staff’s commitment to delivering
operational improvements in all parts of
the business. As stated by our Chairman,
in 2012-13 we successfully transitioned
from being primarily a manager for third
party almond growers/investors, to a fully
integrated almond business.
Select Harvests continues to identify and
evaluate opportunities to grow our almond
orchard portfolio through acquisitions, leasing,
and developing new plantings. We made
two shareholder value accretive acquisitions
this year and have benefi ted from our prior
acquisition in New South Wales. It is critical
we maintain our market share in a growing
global market. The recent debt refi nancing and
our overall capital management plan provides
us with the fi nancial fl exibility to support our
growth plans.
Before joining the Company I was aware of
the positive macro environment in which the
Company operated. Since joining in July 2012,
I have an even greater appreciation of the
healthy benefi ts of our range and can only
see that improving, with recent European
research showing that a ‘Mediterranean’ diet
and a few handful of nuts has a dramatic
infl uence on reducing cardiovascular disease
and mortality rates.
The macro consumption and supply trends
of tree nuts, particularly almonds, are very
positive. Healthy eating and snacking is
growing above fi ve per cent in all categories
(whether grocery or industrial), both globally
and in Australia, driven by a middle class trend
towards healthy eating across the developed
world, and the maturation of markets in
developing countries as people move from
subsistence carbohydrate-based diets to
protein based diets.
The industry forecasts signifi cant growth in
global markets; we see many positive signs for
the future growth of our brands.
PAUL THOMPSON,
MANAGING DIRECTOR
4
Select Harvests Annual Report 2013
Almond Division
The performance of our Almond Division
was strong, particularly given that this is the
fi rst fi nancial year after the transition from
almond manager of 11,943 hectares (29,500
acres) of almond orchards owned by Olam,
to now being the owner manager of a
Company Orchard portfolio of 4,057 hectares
(10,000 acres).
Managed Orchards
Earnings before tax and interest (EBIT) from
our managed orchards were $4.7 million. This
reduction on our $14.2 million EBIT earned
in 2012 was caused by the impact of Olam
in-sourcing the management of its almond
orchards that were previously managed by
Select Harvests on a fee for service basis.
Whilst this change on 1 July 2012 did have a
signifi cant affect, completing the processing
of the Olam 2012 crop did benefi t our 2013
EBIT. The managed orchards component of
Select Harvests’ earnings will be relatively
small in future.
The global almond market has
remained strong characterised
by global consumption growth
of 8% per annum whilst supply
grew at around 4%...
Company Orchards
Our Company orchards delivered signifi cant
growth during the year, increasing to
an underlying EBIT of $31.7 million from
$3.1 million the previous year. This increase
was driven by the stronger almond price,
improved almond quality and a more
substantial crop.
The yield was consistent with our earlier 2013
season projections of 12,000 tonnes. Taking
into account the benefi t of acquiring 520
hectares (1,284 acres) in northern Victoria in
February 2013, this yield represents an increase
of 106 per cent on the 5,830 tonnes harvested
in 2012.
Average almond prices achieved for this crop
compared favourably to the previous year.
The projected $6.38 per kg price represents
an increase of more than 25 per cent on
$5.08 per kg in 2012.
The improved crop quality and quantity was
the result of a good pollination, dry conditions
throughout most of the harvest period and
Select Harvests’ investment in improved
horticultural practises, plus the commitment
of our employees.
Risk mitigation
Reducing our exposure to agricultural risk has
been a high priority for management. It goes
beyond just being integrated. To this end, we
undertook a range of risk mitigation measures
during the year. These included changes to
business practices and capital investment
such as: installing frost fans in our orchards,
making additional water purchases in NSW,
entering into a new three year bee supply
agreement, and installing a new pasteuriser at
our almond processing facility at Carina West.
Other risk-related measures included making
a commitment to purchasing additional
harvesting equipment for the next season
and the introduction of stricter harvesting
Key Performance Indicators (KPIs).
Food Division
Our Food Division provides us with access to
growing domestic and international markets
for both almonds and other health products.
In 2013 we have seen a 9.6 per cent dip in
performance from $6 million EBIT in 2012 to
$5.5 million this year – a reduction signifi cantly
affected by the loss of private label almond
contracts with major domestic retailers.
The positive news is that this loss was
more than offset by the higher exports
sales of that tonnage at higher prices in the
Almond Division.
The Food Division recorded a 40 per cent year
on year increase in sales by the industrial sales
team to food manufacturers and distributors.
Our Lucky brand improved its market share
in cooking nuts. This was all achieved with
20% less working capital, increased customer
service, less customer complaints and the
conversion cost per kilo remaining fl at.
New strategy for growth
During the year the Board and Management
undertook a formal strategy review across
the business which to set out the Company’s
growth objectives, platforms, priorities
and aspirations for the next fi ve years. This
strategy is outlined later in this report.
The strategy is based on seven platforms
which are underpinned by 39 specifi c projects
which have specifi c delivery targets aligned to
the planning horizon.
Effective engagement
Communicating these seven platforms to
everyone in the Company is essential in
ensuring ownership of the strategy. This is why
the Executive team undertook a Company-
wide road show outlining each platform
to every employee in the organisation. The
executive team have individual KPIs, designed
to align with the delivery of the strategy in a
timely manner to deliver our future growth.
In the last 12 months our transparency and
reporting within the business has continued
to improve. The alignment of the team,
how Management works together and the
integration of our supply chain have all
changed for the better. This in turn has opened
up our capacity for knowledge sharing and
value-adding right across the Company. This is
the process we need to improve each year to
ensure maximum returns.
Such improvements are as much due to
conversations that happen around the
coffee machine as those that take place
in the boardroom.
Our overall improvements are an amalgam of
many small changes, like moving a separate
horticultural offi ce and processing centre into
one building at Carina West or signifi cant
changes such as exiting WA.
Select Harvests engagement with the capital
markets has been a priority this year, to create
an increased understanding of the business
and our market. Feedback on our product
quality and service improved signifi cantly.
Select Harvests Annual Report 2013
5
and healthy eating remain so compelling. Domestic and international
demand for almonds continues to grow at a rate that is greater
than supply. The drought in California impacts on yields, quality and
operating costs for that region, with California suppling over 80% of the
world’s almonds. This environment is supportive of a continuation of
the trend of constrained supply and fi rm pricing over the outlook period.
The Select Harvests Almond Division continues to benefi t from the
evolving maturity profi le of our NSW orchards, which comprise nearly
50% of our portfolio. The impact of this benefi t is partially offset by the
replanting program on some of our older Victorian orchards. The replant
This was partly due to better processing
program is an important investment for our future to protect and
quality, a better season and partly as a
enhance the value of our almond orchards.
result of introducing tighter processes. Our
Our horticulture and processing teams will continue to focus on yield
overwhelming objective is to get the best
and productivity benchmarking as we strive to identify and deliver best
cost and most productive outcome.
practise and higher economic returns.
Safety
The horticultural program for the 2014 crop is well underway, with
trees having fl owered and been pollinated by bees and our water
At Select Harvests, we appreciate our
management plan in place for the season.
business isn’t just about fi nancial outcomes.
Our outcomes must recognise that one
We will continue to focus on maximising value for our shareholders
person being injured is one too many. This
from the sale of the Western Australian assets, drive effi ciency across
approach has helped ensure that our injury
the Food Division and further align all business units across the value
rate has dropped by more than 60 per cent
chain.
year on year.
The challenge now is to execute our new strategy for growth to take
Sustainability
advantage of almond industry and healthy eating fundamentals and
continue on our path towards delivering best practice outcomes in all
When growing trees and producing annual
that we do.
crops year on year, sustainability must be front
of mind all the time. We maintain practices to
ensure this is the case. Sustainability will be
a continued focus area for us and we will be
putting additional effort in this arena going
forward. We are continuing to evaluate best
practice ways to recycle our waste and reduce
our energy and water consumption.
Positive outlook
The Company outlook going forward is very
positive, primarily because the fundamentals
underpinning the global almond industry
and healthy eating remain so compelling.
Domestic and international demand for
almonds continues to grow at a rate that is
greater than supply. The drought in California
impacts on yields, quality and operating costs
for that region, with California supplying over
80% of the world’s almonds. This environment
is supportive of a continuation of the trend of
constrained supply and fi rm pricing over the
outlook period.
The Select Harvests Almond Division
continues to benefi t from the evolving
maturity profi le of our NSW orchards, which
comprise nearly 50% of our portfolio. The
impact of this benefi t is partially offset by
the replanting program on some of our older
Victorian orchards. The replant program is an
important investment for our future to protect
and enhance the value of our almond orchards.
Our horticulture and processing teams will
continue to focus on yield and productivity
benchmarking as we strive to identify and deliver
best practise and higher economic returns.
The horticultural program for the 2014 crop
is well underway, with trees having fl owered
and been pollinated by bees and our water
management plan in place for the season.
We will continue to focus on maximising
value for our shareholders from the sale of the
Western Australian assets, drive effi ciency across
the Food Division and further align all business
units across the value chain.
The challenge now is to execute our new
strategy for growth to take advantage of almond
industry and healthy eating fundamentals and
continue on our path towards delivering best
practice outcomes in all that we do.
Paul Thompson,
Managing Director
6
Select Harvests Annual Report 2013
Performance
summary
The 2013 fi nancial year was defi ned by strong
performance for our business, the almond
industry and the healthy products category
as a whole. It was a year of consolidation
for Select Harvests that enabled us to take
advantage of constrained global supply of
almonds and a return to normal growing
conditions in Australia, to target emerging new
markets (particularly in India and China), and
strengthen our relationships in established
domestic and international markets.
Our Almond Division performed very strongly,
with a return to normal yields, maturing
orchards, improved crop quality and higher
almond prices. This performance was assisted
by a weakening of the Australian Dollar
against the US Dollar and two shareholder
value accretive orchard acquisitions. During
the year we commenced our replanting
program to replace older orchards, improved
on orchard productivity and continued to
focus on cost control.
While competitive domestic trading conditions
impacted on the performance of our Food
Division, our key brands and industrial division
performed well and are now positioned to
drive future growth and improved profi tability.
The focus of the business has been on: quality,
productivity and cost control.
In the medium term, global almond supply and
demand fundamentals remain attractive. The
Company has established a comprehensive
strategy to ensure we are well positioned to
take advantage of the favourable macro trend
of increasing demand for healthy snacking and
eating in a supply constrained environment.
The new strategy for growth described in
this report was a key initiative developed in
2013 to create a strong platform to increase
shareholder value. The objective is to improve
performance across the business by focusing
on consumer and customer insights, orchard
effi ciency and productivity, capital effi ciency,
supply chain effi ciency, cost control and
improved quality by leveraging Select
Harvests’ scale, unique asset based and
employee expertise.
Reported Results
Underlying Results*
EBIT ($000’s)
Managed Orchards
Company Orchards
Food Division
Corporate Costs
Operating EBIT
Interest Expense
Net Profi t Before Tax
Tax (Expense)/Benefi t
Net Profi t After Tax
Earnings Per Share
Operating cash fl ow
Net Debt
FY12
9,332
(12,883)
6,027
(4,971)
(2,495)
(6,248)
(8,743)
4,274
(4,469)
(7.9)
22,031
66,934
FY13
4,723
(835)
5,450
(4,097)
5,241
(5,043)
198
2,674
2,872
5.0
4,051
79,184
FY12
14,240
3,076
6,027
(3,721)
19,622
(6,248)
13,374
(3,860)
9,514
16.8
-
-
FY13
4,723
31,670
5,450
(4,097)
37,746
(5,043)
32,703
(9,813)
22,890
40.1
-
-
* Adjustments between reported and underlying results
are explained as follows ($000’s):
1. In FY12, a non cash impairment write down of $4,908
was made against plant, property and equipment.
2. In FY12, a non cash impairment write down of $20,000
was made against the Western Australian almond
project. A gain of $4,041 was realised on the sales of
permanent water rights in Victoria.
In FY13, a non cash impairment write down of $39,908
was made against the Western Australian almond
project. A discount (gain) of $8,013 was made on
the acquisition of almond orchard assets during the
fi nancial year.
3. In FY12, one off costs of $1,250 for restructure and
corporate costs were accounted for.
4. The tax impact of items 1 - 3, along with research
and development tax credits impacted year on year
tax expense.
Select Harvests Annual Report 2013
7
Our new strategy
for growth
Strategy Map towards 2013
CONTROL CRITICAL
MASS OF ALMONDS
Secure the critical mass of nuts needed
to maximize profi tability and leverage
the global almond opportunity.
IMPROVE YIELD
& CROP VALUE
BE BEST IN CLASS
SUPPLY CHAIN
Improve yield and overall crop value
by perfecting on-farm and farm to
factory practices.
Continuously improve our supply chain,
achieving high quality, low cost and
optimum capital utilisation.
INVEST IN THE INDUSTRIAL
& TRADING DIVISION
Allocate resources to leverage our
trading skills and grow sales in the
industrial channel.
TURN AROUND THE
PACKAGED FOOD DIVISION
Develop a new model for the packaged
food category that will deliver sustainable
returns above the cost of capital.
IMPROVE OUR SYSTEMS
& PROCESSES
Develop the business systems and
processes required to be a global
industry leader.
ENGAGE WITH OUR PEOPLE
& OUR STAKEHOLDERS
Engage with investors and our industry
while developing the team required to
be a global industry leader.
During the year, Select Harvests
established a formal strategy which
sets out our growth plans for the
company as well as key approaches
and priorities for the next fi ve
years. This strategy for growth is
underpinned by seven key platforms:
1. Control a critical mass of almonds to
ensure supply increases to meet growing
global demand
2. Improve yield and crop value by perfecting
on-farm and farm to factory practices
3. Implement best in class supply chain that
optimises location, effi ciency, cost, quality
and customer service in an economical and
sustainable manner
4. Invest in the industrial and trading division
to better supply almonds and other nut
ingredients to export and domestic markets
5. Turn around the Packaged Food Division by
investing in brand development, and new
channels and markets
6 Improve systems and processes to deliver
more integrated business focus, more
effective sales and operations planning,
IT systems, policies and procedures
7 Engage with our people and stakeholders
to maintain a safe working culture and
environment that emphasises transparency,
cooperation and accountability across
the business.
8
Select Harvests Annual Report 2013
Mission
To deliver sustainable shareholder
value by being a global leader in
integrated growing, processing &
marketing of almonds.
Critical enabler
An appropriate capital structure
to deliver these strategies.
The strategic development process
The development of this strategy was
infl uenced by the following assumptions
and trends in the operating environment,
including:
1. World almond prices will increase in
response to demand and supply dynamic
2. Global demand of almonds will grow
steadily (8 per cent) and out-strip forecast
supply growth (4 per cent)
3. The price of land suitable for almonds will
increase in value globally
4. Healthy eating and snacking increasing
demand for our products and other
solutions – Super foods will be sought after
by an ageing and affl uent population as it
emerges in Asia
5. Climate will impact our industry and
government policy
6. Water will remain a scarce resource
impacting availability and price
7. Australia’s agri-food sector relative
competitive disadvantage will
remain (labour, energy, compliance
& logistics costs)
8. Australian dollar will remain volatile
9. Structure of the local retail industry will
remain dominated by large retailers
10. Corporatisation and foreign investment
in agri-food will grow in Australia
11. The ability to attract and retain skilled
labour in remote agricultural businesses
12. Social accountability is a growing infl uence
on food production systems.
Select Harvests Annual Report 2013
9
The almond
opportunity
Australian Industry Growth
The Australian almond industry is highly
effi cient, competing in international markets
and operating without production or export
subsidies. According to the Almond Board of
Australia, the outlook for almonds in Australia
is positive, as global demand is expected to
grow strongly for the foreseeable future.
Increasing demand
Strong growth in consumer demand for
almonds has been experienced over the past
decade, and this trend is expected to continue
due to the positive health benefi ts, versatility
as a savoury or sweet snack and use as an
ingredient in many forms in manufactured
food products.
The large increase in almond orchards during
the past decade has resulted in a rapid
expansion of the Australian almond
industry. As these orchards reach maturity
the almond industry has become one of
the fastest growing segments in Australia’s
horticulture sector.
Improving incomes in India and China are
driving a dramatic increase in demand for
almonds in these important export markets.
Domestic market growth in the USA and
Australia has been strong, and is supported by
promotional programs that feature the taste,
versatility and health benefi ts of almonds.
In 2012, Australia produced about 4.4 per cent
of world almonds, behind Spain (4.8 per cent)
and California (81 per cent). In 2013, Australia
will surpass Spain to become the world’s
second largest almond producer producing
over 70,000 metric tonnes.
Australian domestic almond consumption
grew 20 per cent in the past marketing year,
and has grown steadily over the past fi ve years
from 0.492kg per person in 2007/08 to 0.853kg
in 2012/13.
World Almond supply vs demand – fi g. 1
s
e
n
n
o
t
d
n
a
s
u
o
h
t
1,600
1,400
1,200
1,000
800
600
400
200
0
TOTAL SUPPLY
CONSUMPTION
GLOBAL PRODUCTION
CARRY OUT
10 Select Harvests Annual Report 2013
WORLD ALMOND SUPPLY VS DEMAND – FIG. 1
Domestic demand
Australians are eating more almonds each year.
In 2013, almond sales in Australia increased
20 per cent in volume to 20,197 tonnes in
response to domestic per capita consumption
which has almost doubled since 2007.
These increased sales include whole almond
kernel as well as slivers, pieces, meal and
blanched product eaten as snacks, used in
cooking and as an ingredient in manufactured
food items.
Global demand
Despite the rapidly growing domestic market,
export tonnages outweigh domestic sales,
with over 60% of local production being
exported.
Global demand for almonds has doubled
during the past decade, and has matched
the large increase in supply. With demand
increasing at an assumed rate of 8 per cent a
year, there will be insuffi cient supply to meet
demand in future, and upward price pressure
should exist.
In 2014, the Almond Board of Australia
forecasts that for every tonne consumed in
Australia, 2.5 tonnes will be exported. The
Australian almond industry is successfully
marketing its increasing almond tonnages into
both existing and newly established markets,
with national export sales forecast at over
$350 million.
Heritage and health help
boost almond eating
Over 40 countries now buy Australian
almonds, with India being Australia’s
largest overseas market, four times
the size of the next largest market,
the United Arab Emirates.
The Middle East has an ancient tradition of
almond consumption, with almonds playing
a key role in breaking of the Ramadan fast.
Europeans are increasingly health conscious,
with nuts and healthy snacking an important
part of their diet.
Almonds have long been an integral
part of India’s cultural heritage,
especially during festive periods and
weddings. The Indian market has a
preference for in-shell product, which
is then hand cracked. Our Australian
product provides an excellent crack-
out ratio (kernel to in-shell weight)
and some Indian buyers have
expressed a liking for the Australian
kernel shape and colour.
The health benefi ts of eating almonds
regularly include a reduced risk of heart
disease, stroke, diabetes prevention
and satiety of appetite assisting weight
management.
Clinical studies* show that eating nuts for
only a short period can reduce the incidence
of heart attack and stroke by over 30 per cent.
Research also indicates that almonds are an
excellent recovery food after physical exercise.
It is well known that in Australia our
saturated fat intake is too high. The known
consequences of too much saturated fat are
elevated blood cholesterol – particularly
LDL (low density lipoprotein) cholesterol
which is associated with health problems
like heart disease.
Various health studies highlight the
relationship between the amount of almonds
consumed and the resulting reduction in
LDL cholesterol.
Including 30 grams of almonds into a balanced
diet has been shown to lower LDL cholesterol.
This amount of almonds can also displace
other snack foods, improve nutritional intake
and make you feel fuller for longer.
Clinical trials which included larger serves
of almonds (68 to 84g per day) showed LDL
cholesterol was reduced by up to 10 per cent.
Cholesterol reduction associated with
almond consumption is primarily attributed
to replacing saturated fat with mono-
unsaturated fat which is recognised as
‘good fat’ and of benefi t to our health.
* studies cited in European Journal of Clinical Nutrition
(2003, 2008)
Select Harvests Annual Report 2013
11
Marketing
our products
In response to a detailed review of
our Food Division, during the year
we renewed our focus on core retail
and ingredient almond products.
This was refl ected in our promotional
program which focused on increasing
the success of our market leading
brands in core and growth categories,
including snacks, baking and
ingredients.
Investments made during the year provided
Select Harvests with a better understanding
of our consumers’ current and future needs to
ensure our product offerings remain relevant
and successful into the future.
Brands snapshot
The value-added brands within our Food
Division are Australian leaders. They include
the popular retail brands Lucky, Sunsol, Soland
and Nu-vit which are described here.
Lucky brand performance
Lucky has driven growth in the nut and dried
fruit category for more than half a century.
The iconic brand incorporates a range of
quality products including Select Harvests
almonds plus walnuts, cashews, hazelnuts,
brazil nuts, pine nuts, pistachios, macadamias,
sunfl ower seeds and pepitas. Lucky also offers
Lucky 6 packs, Lucky snack tubs and Lucky
Smart Snax. Through effective marketing, our
Lucky brand has helped encourage awareness
of the benefi ts of snacking on nuts.
During 2013, the Lucky brand continued to
be Australian consumers’ preferred brand of
baking and cooking nuts. As Select Harvests’
market leading brand, Lucky’s ongoing success
throughout the year was bolstered by a pre-
Christmas advertising campaign that tempted
consumers with suggestions for a delicious
range of Christmas food recipes.
Lucky’s market share also continued to grow
in the area of healthy snacking as consumers
become more aware of the benefi ts of
including more nuts in their diet. In line with
this trend, our Lucky Smart Snax range grew
strongly during the year. Over summer, Lucky
Smart Snax were promoted on beaches
around Australia as part of the Australian Surf
Rowers’ League national competition carnival.
Sunsol brand performance
Popular in the muesli category for over
20 years, Sunsol continued as a leading
Australian brand specialising in muesli and
quality whole food products. Sunsol’s range
of over 100 products includes nuts, cereals
and muesli, dried fruit, grains and seeds, mixes
and snacks. Sunsol is sold in independent
supermarkets and is produced to the highest
quality standards.
Soland brand performance
Soland specialises in natural health food and
quality whole food products. During 2013, it
continued as a leading brand in health food
stores and pharmacies throughout Australia.
Soland offers a broad range of nutritious
products including nuts, dried fruit, legumes
and pulses, cereals, grains, seeds, fl ours, muesli
and organic foods.
Nu-vit brand performance
During 2013, our Nu-vit brand continued to
perform well in supermarkets throughout
Australia and southeast Asia. It also enjoyed
success in markets like Singapore and Hong
Kong as consumers in those countries sought
healthier eating options.
12
Select Harvests Annual Report 2013
Our people
In line with Select Harvests’ new
strategic direction, we renewed our
focus on accountability with more
open and thorough communication
throughout the company, with
our stakeholders and the local
communities within which we
operate. Open communication and
clear individual Key Performance
Indicators (KPIs) are at the core of
Select Harvests’ company culture,
alongside our ongoing commitment
to improve work practices and foster
attitudes which sustain healthy and
safe work environments.
development and exposure to overseas
horticultural and management techniques.
Our present enterprise agreement associated
with our horticultural operations and Carina
West processing facility was successfully
renegotiated in September 2013 and has been
submitted to the Fair Work Commission for
approval. Included within the agreement is
a series of skill progression options for our
horticultural staff.
Environment and Sustainability
Select Harvests 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. The emphasis has been on
responsible and proactive water management,
waste reduction and the management of
wildlife in our almond orchards.
During 2013, we began developing a suite
of Company policies and procedures and
communicating them to all staff. These
documents include an Environmental Policy,
a Sustainability Policy and an Environmental
and Sustainability Plan which will set out
our legislative compliance requirements and
incorporate wildlife plans for Select Harvests’
operations in each state.
During the year, the senior Management
team was restructured to help facilitate
the Company’s affi rmative new direction.
Bruce van Twest was announced as our
new General Manager of Operations and
Mark Eva became the new General Manager
of Sales and Marketing. Tom Kite took up
a new role as General Manager of Human
Resources and Peter Ross moved from his
role of General Manager of Processing at
Carina West to become our new General
Manager of Horticulture. Paul Chambers and
Laurence Van Driel continued to add value
to the Company in their respective roles as
Chief Financial Offi cer and General Manager
Trading and Industrial.
One of the key communications initiatives
in the fi nancial year was a series of half-day
‘road trips’ undertaken by the Executive
Management team to introduce staff to the
new strategy and how it will benefi t them and
the Company. In addition all staff established
agreed annual KPIs.
Select Harvests’ communications and
accountability emphasis is on-going. The
Executive Management team now meet on a
weekly basis to discuss ongoing management
issues, we conduct regular staff briefi ngs
and are about to introduce a new company-
wide staff newsletter. To further facilitate
communication throughout the company, a
new communication plan will be developed in
the second half of 2013.
The skills of our staff are integral to their
individual wellbeing and the growth of the
Company. For this reason, we are currently
reviewing our horticultural skills base. The
outcome of this assessment will determine
potential development options, including
up-skilling through formal training, in-house
Select Harvests Annual Report 2013
13
Our Executive Team
BRUCE VAN TWEST
General Manager Operations
LAURENCE VAN DRIEL
General Manager Trading and Industrial
Bruce joined Select Harvests in 2012.
Bruce’s last position was at Kraft Foods
where he was the Group Manufacturing
Manager, Australia & New Zealand.
Bruce oversaw the integration of Kraft
and Cadbury’s trans-Tasman operations
following the merger of the two
businesses across six manufacturing sites.
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.
MARK EVA
General Manager Sales & Marketing -
Consumer Products
Mark joined Select Harvests in 2012. Mark
has strong FMCG experience across branded,
private label and commodity products
with track record of driving profi table sales
growth. He joins Select Harvests from SCA
Hygiene where he was the Director of Sales
and Marketing, Consumer. He was previously
General Manager – Marketing, Sales and
Innovation at Bulla Dairy Foods.
PETER ROSS
General Manager Horticulture
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
the role of General Manager Processing in July
2012. Prior to joining Select Harvests, Peter ran
his own maintenance and fabrication business
servicing agriculture, mining and heavy
industry.
PAUL CHAMBERS
Chief Financial Offi cer &
Company Secretary
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.
Prior to joining Select Harvests 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.
14 Select Harvests Annual Report 2013
Our Board of Directors
MICHAEL IWANIW
Chairman
PAUL THOMPSON
Managing Director
FRED GRIMWADE
Non-Executive Director
Michael Iwaniw was appointed as
Chairman of Select Harvests in November
2011 following a career spanning 40 years
in Australian agribusiness. He became
Managing Director of the Australian
Barley Board (ABB) in 1989, retiring
from the role some 20 years later. As
Managing Director he led the transition
from a statutory authority to a publicly
listed company, growing the business
into an ASX 100 company with a market
capitalisation of A$1.6 billion. Michael has
acted as a Non Executive Director of a
number of Companies. He is currently a
Non Executive Director of Australian Grain
Growers Cooperative.
Paul Thompson joined Select Harvests as
Managing Director in July 2012. He is an
experienced executive with over 30 years
in management. Before joining Select
Harvests Paul was President of SCA Hygiene
Australasia responsible for a $600 million
turnover business across all of its divisions
(FMCG, Pharmacy, Industrial/Foodservice
& Healthcare) and overseeing leading
brands including Sorbent and Handee. Paul
is a member of the Australian Institute of
Company Directors and has formerly held
positions as a Director of the Australian
Food & Grocery Council and on other
industry bodies.
Fred Grimwade 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 Chairman of CPT Global Limited, and is
a Principal and Executive Director of Fawkner
Capital and is also a director of Troy Resources
Ltd, XRF Scientifi c Limited and Fusion
Retail Brands Pty Ltd. 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 Audit and Risk Committee
and the Nomination Committee.
ROSS HERRON
Non-Executive Director
MICHAEL CARROLL
Non-Executive Director
PAUL RIORDAN
Non-Executive Director
Ross Herron joined the Board on 27 January
2005. A Chartered Accountant, he 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 Melbourne offi ce Managing Partner and
served on several international committees
within Coopers & Lybrand. He is Chairman
of GUD Holdings Ltd, and Royal Automobile
Club of Victoria (RACV) Ltd and a non-
executive director of a major industry
superannuation fund. Ross is Chairman of
the Audit and Risk Committee, and member
of the Nomination Committees.
Michael Carroll 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
Queensland Sugar Limited, Sunny Queen
Farms, 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 Nomination Committee.
Paul Riordan was appointed to the Board in
October 2012. He has worked in various rural
enterprises during his career, in Australia
and the United States, including small seed
production, large-scale sheep and grain
organisations, and beef cattle. Paul is a co-
founder and Executive Director (Operations)
of Boundary Bend Olives, Australia’s largest
vertically integrated olive company. Paul has
a Diploma of Farm Management from Marcus
Oldham Agricultural College, Geelong and
has extensive operational and business
experience in vertically integrated
agribusinesses, including in horticultural
operations and risk management.
Select Harvests Annual Report 2013
15
Contents
Directors’ Report
Auditor’s Independence
Declaration
Corporate Governance
Statement
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 to the Members
ASX Additional
Information
18
37
38
44
45
46
47
48
49
89
90
92
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 “Company”) for the year ended 30 June 2013.
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
M Iwaniw (Chairman)
Appointed to the board on 27 June 2011 and appointed Chairman 3 November 2011. He began his career as a chemist with the Australian Barley
Board (ABB), became managing director in 1989 and retired 20 years later. During these years he accumulated extensive experience in all facets
of the company’s operations, including leading the transition from a statutory authority and growing the business from a small base to an ASX
100 listed company. Helped orchestrate the merger of ABB Grain, AusBulk Ltd and United Grower Holdings Limited to form one of Australia’s
largest agri-businesses. He has a Bachelor of Science, a graduate diploma in business administration and is a member of the Australian
Institute of Company Directors. He has acted as a Non-executive director for a number of companies including Toepfer International, New
World Grain, Australian Bulk Alliance and 5-star fl our mill, and is currently a non-executive director of Australian Grain Growers Cooperative.
He is a member of the Remuneration Committee.
Interest in shares and options: 162,262 fully paid shares.
P Thompson (Managing Director & Chief Executive Offi cer)
Appointed the Managing Director and Chief Executive Offi cer (CEO) of Select Harvests Limited on 9 July 2012. Has over 30 years of
management experience. Formerly President of SCA Australasia, part of the SCA Group, one of the world’s largest personal care and tissue
products manufacturers. Member of the Australian Institute of Company Directors and has formerly held positions as a Director of the Food &
Grocery Council and councillor in the Australian Industry Group.
Interest in Shares and Options: 20,000 fully paid shares.
M Carroll, BAgSc, MBA & FAICD (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 Queensland Sugar Limited, Sunny Queen Farms, Rural Finance Corporation, Rural Funds Management and Warrnambool Cheese
and Butter. He has 18 years experience in banking and fi nance, having established and led the Agribusiness division at 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.
Interest in Shares and Options: NIL.
F S Grimwade, B.Com, LLB (Hons), 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 Chairman of CPT
Global Limited, a Principal and Executive Director of Fawkner Capital, a specialist corporate advisory fi rm, and is also a director of Troy
Resources Ltd, XRF Scientifi c Limited and Fusion Retail Brands Pty Ltd. 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 is a
member of the Audit and Risk Committee.
Interest in shares and options: 100,000 fully paid shares.
18 Select Harvests Annual Report 2013
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 Chairman of Royal Automobile Club Of Victoria (RACV) Ltd, Chairman of GUD Holdings Ltd, and a non-executive director of a
major industry superannuation fund. He is Chairman of the Audit and Risk Committee.
Interest in Shares and Options: 43,673 fully paid shares.
P Riordan, (Non-Executive Director)
Appointed to the board on 2 October 2012. He has worked in various rural enterprises during his career, in Australia and the United States,
including small seed production, large-scale sheep and grain organisations and beef cattle. He is co-founder and Executive Director
(Operations) of Boundary Bend Olives, Australia’s largest vertically integrated olive company. Paul has a Diploma of Farm Management from
Marcus Oldham Agriculture College, Geelong and has extensive operational and business experience in vertically integrated agri-businesses.
He is a member of the Audit and Risk Committee.
Interest in shares and options: NIL.
P Chambers, BSc Hons, CA (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
25 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: 22,000 fully paid shares.
Corporate Information
Nature of operations and principal activities
The principal activities during the year of entities within the Company 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.
Employees
The Company employed 325 full time equivalent employees as at 30 June 2013 (2012: 571 employees).
Select Harvests Annual Report 2013
19
Directors’ Report
Operating and Financial Review
Highlights & key developments during the year
In the fi nancial year ended 30 June 2013, Select Harvests has delivered a positive performance, following a number of challenging years. This is
demonstrated by the strong underlying fi nancial result.
There has been a focus by the Board, Executive Management and employees, on strategy formulation, risk management and the
implementation of operational improvement programs across the business.
The Company has continued to transition its business model from one of largely managing almond orchards for third party growers, to being
an owner and controller of almond orchards, integrated fully across the supply chain from farm paddock to consumer. This transition is now
largely complete, with over 10,000 acres (4,000 hectares) of almond orchards owned/leased by the Company, providing an increased exposure
to the almond value chain. This exposure is to a global almond market which has compelling fundamentals, characterised by consumption
which has grown by 8% p.a., with production supply remaining constrained with growth at around 4%. This market dynamic accompanied by
a relatively lower current year crop in the Californian almond growing districts, has maintained upwards pressure on almond prices (which are
traded internationally in US Dollars) throughout the year. As Select Harvests realises almond sales in Australian Dollars, a devaluation of the
Australian Dollar against the US Dollar of over 10% during the last 4 months of the fi nancial year has had a positive impact on the Company.
The Almond Division, through which almonds are cultivated, harvested, processed and sold to domestic and international markets, has
benefi tted in a year in which the Australian almond industry has returned yields at or well above average compared to the recent challenging
years. Growing and harvesting conditions were ideal, operating costs were well contained, aided by supply of water at economical prices,
enabling the Company to secure a large and high quality almond crop. This, along with the strong almond prices, and a weaker Australian
Dollar, has driven the fi nancial performance of this division and the Company as a whole.
A signifi cant development in the year was the decision to exit the greenfi eld almond project in Western Australia, which comprised
developments of 4,000 acres (1,600 hectares). Following an extensive horticultural and economic review of the project, it was determined
by the Board that growing almonds in the Mid -West region of Western Australia is not economically viable, particularly given the increased
future investment that would be required to develop almond orchards to maturity. As a consequence of this decision, an impairment provision
was taken against the value of the assets, writing them down by $39.9 million ($27.9 million post tax), and a project team has been established
to sell or maximise the value of the assets.
During the second half of the fi nancial year the Company acquired 1,286 acres (520 hectares) of mature almond orchards in Northern Victoria,
investing $5.7 million to acquire the assets, at purchase prices accretive to our shareholders.
The Food Division, through which the Company produces and distributes a range of almond, nut and health products, mainly to the domestic
market, has had a challenging year. Whilst the branded business which includes the supply of a range of ingredients (including almonds) to
manufacturers, and the Lucky brand (cooking and snacking nuts range) has performed well, the business has been impacted by the loss of its
supply for natural fresh and roasted almonds private label contracts to the two major domestic retailers. The domestic pricing environment
remains very competitive, and these contracts will be up for renewal during the next fi nancial year. Whilst the loss of these contracts impacts
the fi nancial performance of the Food Division, this is offset by earnings generated in the Almond division through export sales which have
prevailed at strong prices.
The Company has again concentrated its efforts on strengthening the balance sheet, through a combination of working capital management,
prudent deployment of investments, and a refi nancing of banking facilities to support future growth and operational initiatives.
A formal strategy review and formulation process has been undertaken which identifi es 7 platforms which are aligned towards achieving
sustainable earnings growth and fi nancial returns over the next 5 year planning horizon. This is accompanied by an update to the Company risk
management framework and associated policies and procedures.
20 Select Harvests Annual Report 2013
Financial Performance Review
Profi tability
Reported Net Profi t After Tax (NPAT) is $2.9 million, which compares to a reported Net Loss After Tax of $4.5 million in 2012. Earnings Before
Interest and Taxes (EBIT) is $5.2 million, which compares to a Loss Before Interest and Taxes of $2.5 Million in 2012.
To better understand the underlying performance of the business in comparison to last year, the impact of a number of items is set out in the
table below:
Results Summary
$ 000’s
EBIT ($000’s)
Managed Orchards (1)
Company Orchards (2)
Food Division
Corporate Costs (3)
Operating EBIT
Net Interest Expense
Net Profi t/(Loss)
Before Tax
Tax (Expense)/Benefi t (4)
Net Profi t/(Loss)
After Tax
Earnings Per Share
REPORTED RESULT (AIFRS)
UNDERLYING RESULT
FY12
9,332
(12,883)
6,027
(4,971)
(2,495)
(6,248)
(8,743)
4,274
(4,469)
(7.9)
FY13
4,723
(835)
5,450
(4,097)
5,241
(5,043)
198
2,674
2,872
5.0
FY12
14,240
3,076
6,027
(3,721)
19,622
(6,248)
13,374
(3,860)
9,514
16.8
FY13
4,723
31,670
5,450
(4,097)
37,746
(5,043)
32,703
(9,813)
22,890
40.1
Adjustments between reported and underlying results are explained as follows ($000’s):
1.
In FY12, a non cash impairment write down of $4,908 was made against plant, property and equipment;
2.
In FY12, a non cash impairment write down of $20,000 was made against the Western Australian almond project. A gain of $4,041 was realised on the sales
of permanent water rights in Victoria. In FY13, a non cash impairment write down of $39,908 was made against the Western Australian almond project. A
discount (gain) of $8,013 was made on the acquisition of almond orchard assets during the fi nancial year.
3.
In FY12, one off costs of $1,250 for restructure and corporate costs were accounted for.
4. The tax impact of items 1–3, along with research and development tax credits impacted year on year tax expense.
Underlying NPAT is $22.9 million, which compares to $9.5 million in 2012, an increase of 141%. Underlying EBIT is $37.7 million, compared to
$19.6 million in 2012, an increase of 92%.
Earnings per share is 5.0 cents compared to (7.9) cents last year. Underlying earnings per share is 40.1 cents compared to 16.8 cents last year.
Select Harvests Annual Report 2013
21
Directors’ Report
Almond Division Profi tability
Revenues of $71.1 million, compared to $123.9 million in 2012. The reduction in revenues is driven by reduced revenues from Managed Orchards
offset by increased revenue from Company Orchards. Almond division underlying EBIT is $36.4 million which compares to $17.3 million last
year. EBIT includes biological assets fair value adjustments of $20.2 million, compared to $2.5 million last year, with the signifi cant increase
due to the valuation applied to the 2013 crop. The key driver of the relative EBIT to revenue comparison year on year is the shift from Managed
Orchards business (services provided to third party growers) to a Company Owned orchards business.
The reduction of underlying EBIT derived from Managed Orchards is primarily caused by the impact of lost revenues and margins from the
provision of services to Olam, who elected to manage their own almond orchards (nearly 30,000 acres, (12,100 hectares)) effective from 1 July
2012.
The signifi cant increase in the underlying EBIT from Company Orchards is driven by the combination of almond crop yield increases and
almond price increases. 2013 crop yields from Company orchards have been projected at 12,000 metric tonnes (compared to 5,830 metric
tonnes in 2012). The increase of 106% includes the impact of almond orchards acquired during the year. Yield per acre is 1.20 metric tonnes
which is a positive outcome relative to the maturity profi le of the Select Harvests orchard portfolio, with lower yields in the younger near
maturing orchards offset by very strong yields in the mature orchards. Almond prices are valued based on sales contracts committed and a
valuation of uncommitted sales contracts at the reporting date, inclusive of the impact of any foreign currency hedges. The average price
projected for the 2013 crop is $6.38/kg, which compares to $5.08 per kg in 2012, an increase of 26 %.
Food Division Profi tability
Revenues of $133.2 million compare to $137.1 million in 2012, down by 2.8 %. EBIT of $5.5 million, compares to $6.0 million in 2012. The reduction
in revenues and corresponding impact on EBIT is driven primarily by the loss of private label contracts to major retailers. This is partially offset
by increased sales of branded products and sales to industrial food manufacturers.
Net Interest Expense
Net interest expense has reduced from $6.2 million in FY12 to $5.0million in FY13, down by 19%. The net interest expense is impacted primarily
by the reduction in interest rate relative to average net debt compared to the previous fi nancial year.
Balance Sheet
Net assets at 30 June 2013 are $159.5 million, compared to $160.3 million last year. Net assets have been impacted by the after tax write down
of the Western Australia project in the year of $27.9 million.
Net working capital has increased by 63%. As summarised below, the main increase relates to the value of inventory, which comprises the fair
value of the unsold 2013 almond crop, which is signifi cantly higher than at the corresponding period last year.
$000’s
Trade and other receivables
Inventories
Trade and other payables
Net working capital
Cash fl ow and Net Debt
2012
37,398
36,644
(25,365)
48,677
2013
42,142
66,879
(29,495)
79,526
Net debt at the 30 June 2013 is $79.2 million, with a gearing ratio (net debt/net assets) of 49.7%. Operating cash fl ow in the fi nancial year
is $4.1 million, compared to $22.0 million last year. The lower conversion of EBIT to cash in the period arises from the nature and timing of
cash fl ows. In 2012 cash fl ows included the monthly receipts from provision of managed services to Olam, which has largely ceased this year.
Further, operating cash fl ow is materially impacted by the timing of receipts from the 2013 crop sales program, with signifi cant receipts having
been received in the period since the year end close date.
22 Select Harvests Annual Report 2013
Dividends
A fully franked fi nal dividend of 9 cents per share has been declared, resulting in a total dividend per share of 12 cents. This compares to a total
dividend of 8 cents per share in FY12.
Funding
The Company is pleased to have secured a refi nancing of its bank facilities after balance date to provide increased capacity, longer tenure and
lower funding costs. The banking facilities now comprise $135 million of capacity, including a $50 million 5 year non – amortising term facility,
a $25 million acquisition line and a working capital facility to support investment in the growing cycle and other company wide investment
initiatives. The new facility is with the NAB and Rabobank, which diversifi es the funding partners from a one to two bank structure.
The capital management and the funding plan from hereon will be closely aligned to the strategy ensuring a prudent balance sheet is
maintained, whilst ensuring growth plans can be supported.
Strategy
A formal strategy formulation process has been completed to set out the plans for growth and key plans and priorities over the next 5 year
planning horizon. This is based on 7 key platforms:
1.
To control a critical mass of almonds: this is aligned to ensuring year on year growth in supply to meet the growing global demand for
almonds, with a focus on growth through acquisition, brownfi eld and greenfi eld development projects and identifying and securing longer
term contracts with third party growers;
2. To improve yield and crop value: the actions are focussed on perfecting on farm and farm to factory practices, including benchmarking
and implementing best practice horticulture and water management activities, investing in orchard replant programs, research and
development into new varieties, and training and development of employees;
3. Implement best in class supply chain: Develop a manufacturing and supply chain footprint which optimises geographical location,
effi ciency and cost, maximises quality and customer service, whilst ensuring an economically and environmentally sustainable use of by
products;
4. Invest in the industrial and trading division: Leverage the competencies and capacity to supply almonds and other nut ingredients to
export and domestic markets, including food manufacturing channels, through investment in capability and marketing;
5. Turnaround Packaged Food Division: Focus on growing brand values by investing in insights, innovation and product development, brand
image and awareness, and improve position and scope in new channels and markets, such as food service, health and export markets, with
an absolute focus on margin management and return on investment;
6. Improve our systems and processes: Develop internal business systems and structures to enable a more integrated business focus, aligning
all activities and functions around effective sales and operations planning, IT systems, policies and procedures, including risk management
and environmental sustainability;
7. Engage with our people and stakeholders: Ensure maintenance of a safe working culture and environment; drive a culture of transparency,
cooperation and accountability across the business; improve engagement with investors, shareholders, government and industry bodies;
and develop our human capital plan for high performance and orderly succession.
Select Harvests Annual Report 2013
23
Directors’ Report
Corporate Social Responsibility
Occupational Health & Safety
At 30 June 2013, the Company employed 325 people compared to 571 at the end of the previous year. Employment levels during the year
peak at higher levels due to the requirement for seasonal labour. The reduction in employees relates to the cessation of the Olam orchard
management contract which had the impact of a number of employees leaving the company, many of whom were able to secure employment
with Olam.
The emphasis on Occupational Health and Safety in the workplace continues through the Occupational Health and Safety Committee which
operates across all Select Harvests sites. Representatives of the Committee meet monthly to review policies, procedures and projects, and to
discuss key matters relating to Occupational Health and Safety.
The focus this year has been on the identifi cation and reporting of near miss accidents, from which key learnings and preventative actions can
be developed to mitigate against potential similar incidents in the future.
During the fi nancial year the Company achieved a period of 178 consecutive days without a lost time injury event, at the Carina West
processing facility.
Each month the Board receives a comprehensive set of reports on Occupational Health and Safety, including details of all incidents which have
resulted in lost time and medically treated injuries.
Sustainability
Select Harvests is committed to being a responsive, ethical company, which contributes favourably to the environment in which it operates,
ensuring its practices are communicated openly and transparently to all stakeholders, including shareholders, customers, suppliers, employees
and regulatory bodies.
The sustainability policy and related procedures is currently undergoing a review throughout all parts of the business, leveraging existing
practices and identifying new opportunities.
Specifi c focus areas are:
1. Effi ciency in water usage;
2. Energy effi ciency and greenhouse gas emissions;
3. Recycling of production by product, including maximising the environmental and economic use of almond hull through investigation of
renewal energy, animal feed stock and fertilizer applications;
4. Benchmarking of farm practices to ensure yield outputs are maximised against effi cient application of inputs.
The business recognises that sustainability is an area for renewed focus, and the emphasis over the coming year will be to identify, measure
and quantify the benefi ts.
Risk Management
It is a policy of Select Harvests to ensure that a formal risk management process is in place to identify, analyse, assess, manage and monitor
risks throughout all parts of the business.
During the year the practical application of the policy was further enhanced by an in-depth project to update Risk Management processes
and procedures of the Company. This involved workshops incorporating all parts of the business, resulting in a detailed risk register being
presented to the Board.
The register provides a framework and benchmark against which risks are reported on at different levels in the business, with a bi-annual
report presented to the Board.
24 Select Harvests Annual Report 2013
The key categories of risks included in the Risk Register which could impact the achievement of the Company’s strategy as outlined on the
previous page are:
• Financial Risks (including funding capacity, interest rates, foreign exchange, asset guardianship, investment commitments);
• Horticultural Risks (including climatic , disease, water management, pollination, and quality);
• Processing and manufacturing Risks(including product quality, fi re, utilities supply, major equipment failure);
• Market Risks (including quality, ability to meet supply, customer concentration, pricing);
• Trading Risks (including import and export product quality, commodity price risk);
• Regulatory and Compliance Risk (including compliance to quality standards, Corporate Governance);
• Human Resources Risk (including Occupational Health and Safety, retention of key management and personnel).
Each risk is categorised as high, medium and low, relative to probability of the risk occurring, and business impact, with clear accountability for
risk mitigation action plans and responsibility across the business. Risk Policies provide for an appropriate level of escalation and reporting of
material risks both on a routine and ad hoc basis, depending on the nature of the risks involved.
Outlook
The outlook for Select Harvests remains positive as the fundamentals underpinning the global almond industry remain very compelling.
Demand for almonds continues to grow domestically and internationally and remains on track to outstrip supply. Developments in California,
with pressure on yields and operating costs indicate that supply will remain constrained and pricing fi rm in the outlook period.
The Almond Division continues to benefi t from the improved maturity profi le of its NSW orchards, with short term yield potential of some
older Victorian orchards to be constrained as the investment in our tree replant program progresses. Benchmarking on yield and productivity
will remain an absolute focus for our horticulture team as we strive to identify and deliver best practice and high economic returns, which
mitigate the risks noted above.
The horticultural program for the 2014 crop is well underway, with the water management plan fully funded.
The focus on maximising the sale of the Western Australian assets will continue into the new fi nancial year, with a patient approach being
adopted to realise the best value for our shareholders.
There is further upside potential from driving effi ciency across the Food Division and further aligning all business units across the value chain.
Signifi cant changes in the state of affairs
There have been no signifi cant changes in the state of affairs of the Company.
Signifi cant events after the balance date
On 22 August 2013, the Directors declared a fi nal dividend of 9 cents per share payable on 15 October 2013 to shareholders on the register on
3 September 2013.
On 12 August 2013 the Company announced that it had completed negotiations on the refi nancing of its banking facilities. New facilities
totalling $135 million have been approved in a joint banking arrangement with the National Australia Bank and Rabobank.
Select Harvests Annual Report 2013
25
Directors’ Report
Environmental regulation and performance
The Company’s operations are subject to environmental regulations under laws of the Commonwealth or of a State or Territory. Details of the
Company’s performance in relation to such environmental regulations follow:
The Company holds licences issued by the Environmental Protection Authority which specify limits for discharges to the environment which
are the result of the Company’s operations. These licences regulate the management of discharge to the air and stormwater runoff associated
with the operations. There have been no signifi cant known breaches of the Company’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.
Non IFRS Financial Information
The non IFRS fi nancial information included within this Directors’ Report has not been audited or reviewed in accordance with Australian
Auditing Standards.
Non IFRS fi nancial information includes underlying EBIT, underlying result, underlying NPAT, underlying earnings per share, net interest
expense, net debt, net working capital and adjustments to reconcile from reported results to underlying results.
26 Select Harvests Annual Report 2013
Remuneration Report
The directors present the 2013 Remuneration Report which sets out remuneration information for the Company’s non-executive directors,
executive directors and other key management personnel.
For the purposes of this report, key management personnel are members of the executive management team who have the authority
and responsibility for planning, directing and controlling the activities of the Company. They include all Directors of the Board, executive
and non-executive.
1. Overview of Remuneration Arrangements
Remuneration strategy
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 Remuneration Committee 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’ remuneration
Non-executive directors receive fees (including statutory superannuation) but do not receive any performance related remuneration nor are
they issued options or performance rights on securities. This refl ects the responsibilities and the Group’s demands of directors. Non-executive
directors’ fees are periodically reviewed by the Board to ensure that they are continually appropriate and in line with market expectations.
The current aggregate fee limit of $580,000 was approved by shareholders at the 27 October 2010 Annual General Meeting. For the reporting
period the total amount paid to non-executive directors was $434,569.
The remuneration is a base fee with the Chair of the Board and each of the Committees receiving additional amounts commensurate with
their responsibilities. The current directors’ fees are as follows:
Base Fees (including superannuation)
Chairman
Other non-executive directors
Additional Fees (including superannuation)
Chair of the Audit and Risk Committee
Chair of the Remuneration Committee
Executive remuneration
Executive remuneration has three components:
1. Base salary and benefi ts;
2. Short term performance incentives; and
3. Long term incentives.
$145,000
$72,267
$10,000
$8,000
An overview of these remuneration arrangements is included in the table on the next page.
Select Harvests Annual Report 2013
27
Remuneration Report
Table 1: Overview of Executive Remuneration Arrangements
FIXED REMUNERATION
Base salary and benefi ts
VARIABLE REMUNERATION
Short term incentives (STI)
Purpose
Term
Instrument
Consists of cash salary, superannuation and non cash benefi ts, in the form of salary sacrifi ce arrangements
such as motor vehicles and certain private expense reimbursements.
Reviewed annually with reference to salary market requirements and Company objectives. There are no
guaranteed base pay increases in any executives’ contracts.
% of Fixed Remuneration
CEO
40%
Executives
40%
Reward achievement of annual business objectives
1 year
Cash
Performance conditions*
• It is a condition of any STI payment that certain requirements are met that ensure a safe working
environment
• 50% Financial (achievement of NPAT targets)
• 30% Project goals (achievement of individual project goals as established in annual performance plan)
• 20% Values and Challenges (Safety objectives achieved, Company values displayed and response to challenge)
Why these were chosen
To incentivise successful and sustainable fi nancial outcomes, annual business objectives that drive the
achievement of long term business objectives, continuous safety improvement and behaviour consistent
with Company values and objectives.
Long term incentives (LTI)
Purpose
Term
Instrument
% of Fixed Remuneration
CEO
133%
Executives
30%
Reward achievement of long term sustainable business objectives and value creation for shareholders
3 years, vesting proportionately
Performance rights
Performance conditions*
• Continuing service
• 50% Earnings per share (EPS) growth targets (average growth of the Company’s EPS over the three years
prior to vesting)
• 50% Total shareholder return (TSR) targets (Company’s average TSR compared to the TSR of a peer group
of ASX listed companies over the three years prior to vesting)
The performance targets and vesting proportions are as follows:
Measure
EPS
Below 5% growth
5% growth
5.1% - 6.9% growth
7% or higher growth
TSR
Below the 60th percentile**
60th percentile**
61st – 74th percentile**
At or above 75th percentile**
Proportion of Rights to Vest
Nil
25%
Pro rata vesting
50%
Nil
25%
Pro rata vesting
50%
Why these were chosen
EPS represents a strong measure of overall business performance.
TSR provides a shareholder perspective of the Company’s relative performance against comparable
companies.
* The Remuneration Committee is responsible for assessing whether the targets are met. Financial performance conditions are determined on an underlying
results basis
** Of the peer group of ASX listed companies
28 Select Harvests Annual Report 2013
2. Company Performance
The following section provides an overview of the Company’s performance and its link to remuneration outcomes.
Table 2: 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.
Net profi t after tax ($ million)
Basic EPS (cents)
Basic EPS Growth
Dividend per share (cents)
Opening share price 1 July ($)
Change in share price ($)
Closing share price 30 June ($)
TSR % p.a.***
2009
16,712
42.6
(9%)
12.0
6.00
(3.84)
2.16
(62%)
2010
17,253
43.3
2%
21.0
2.16
(0.66)
1.50
(21%)
2011
17,674
33.7
(22%)
13.0
1.50
0.34
1.84
31%
2012*
(4,469)
(7.9)
(123%)
8.0
1.84
(0.54)
1.30
(25%)
2013**
2,872
5.0
163%
12.0
1.30
1.97
3.27
161%
* Includes $17.4 million of post tax net asset write downs
** Includes $27.9 million of post tax net asset write downs and $9.1 million discount on acquisition
*** TSR is calculated as the change in share price for the year plus dividends announced for the year, divided by opening share price
Short Term Incentive (STI)
Details of the range of potential STI cash payments, actual payments made and the amounts forfeited by the CEO and executive team in
relation to the 2013 fi nancial year are shown in Table 3 below. The actual outcomes are based on performance against the conditions outlined
in Table 1.
Table 3: STI
Executive Director
P Thompson
Executives
P Chambers
M Eva*
P Ross
L Van Driel
B Van Twest*
STI RANGE
STI PAYMENT ($)
% ACHIEVED
% FORFEITED
0%-40% of TFR
149,400
0%-40% of TFR
0%-40% of TFR
0%-40% of TFR
0%-40% of TFR
0%-40% of TFR
99,287
60,579
91,520
87,040
86,474
83
79
74
80
80
75
17
21
26
20
20
25
* STI has been pro-rated to take into account commencement date.
The STI is usually paid in September following determination of the STI entitlement, so the above amounts are those in relation to the 2013
fi nancial year performance year, which will be paid in the 2014 fi nancial year.
The STI program is also available to a select group of other key senior managers within the business.
Select Harvests Annual Report 2013
29
Remuneration Report
Long Term Incentive (LTI)
The 2014 fi nancial year is the fi rst time performance rights may vest for some of the current issues of performance rights. Vesting will be based
on performance against the hurdles over the three years prior to vesting.
The following illustrates the Company’s performance against the metrics in the LTI plan.
Table 4: LTI Performance Conditions and Current Indicative Outcomes
EPS Growth
Basic EPS (cents)
Basic EPS Growth
Underlying EPS* (cents)
Underlying EPS* Growth
2012
(7.9)
(123%)
16.8
(50%)
2013
5.0
163%
40.1
139%
3 Year Average EPS Growth target 5% - 7%
* Underlying EPS is basic EPS adjusted for the impact of the following:
1.
In FY12, a non cash impairment write down of $4.9 million was made against plant, property and equipment;
2.
In FY12, an impairment write down of $20.0 million was made against the Western Australian almond project. A gain of $4.0 million was realised on the sales
of permanent water rights.
In FY13, an impairment write down of $39.9 million was made against the Western Australian almond project. A discount (gain) of $8.0 million was made on
the acquisition of almond orchard assets during the fi nancial year.
3.
In FY12, one off costs of $1.3 million for restructure and corporate costs were accounted for.
4. The tax impact of items 1 - 3, along with research and development tax credits impacted year on year tax expense.
Relative TSR Performance
In the coming fi nancial year the Company will engage an independent specialist to complete the detailed calculations to determine the
Company’s TSR percentile ranking, as the 2014 fi nancial year will be the fi rst time performance rights may vest for some of the current issues
of rights.
30 Select Harvests Annual Report 2013
3. Details of Remuneration
Details of the remuneration of the directors and the key management personnel of Select Harvests Limited and the consolidated entity are set
out in the following tables.
It should be noted that performance rights granted referred to in the remuneration details set out in this report comprise a proportion of
rights which have not yet vested and are refl ective of rights that may or may not vest in future years.
Table 5: 2012 and 2013 Remuneration
ANNUAL REMUNERATION
LONG TERM
Base
Fee
$
Short Term
Incentives
$
Non Cash
Benefi ts
$
Super-annuation
Contri-butions
$
Long
Service Leave
Accrued
$
Performance
Rights
Granted
$
Termination
Benefi ts
$
M Carroll
F Grimwade
Non Executive Directors
2013
M Iwaniw*
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
J C Leonard***
R M Herron
P Riordan**
Executive Director
P Thompson****
J Bird*****
2013
2012
2013
2012
145,568
223,307
73,639
73,639
66,300
66,300
75,474
75,474
49,725
-
-
83,017
401,010
-
-
467,204
Other key management personnel
P Chambers
M Eva+
P Ross
L Van Driel
B Van Twest++
M Graham+++
T Millen++++
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
289,339
252,574
180,902
-
262,385
255,046
259,541
231,900
229,638
-
79,428
229,222
66,740
223,980
-
-
-
-
-
-
-
-
-
-
-
-
149,400
-
-
-
99,287
-
60,579
-
91,520
-
87,040
-
86,474
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24,739
-
-
20,949
21,585
46,171
8,936
-
-
-
-
18,211
-
-
12,476
38,462
5,049
16,497
-
-
6,628
6,628
5,967
5,967
6,793
6,793
4,475
-
-
7,472
16,470
-
-
41,619
26,041
23,001
17,085
-
23,615
22,954
23,359
20,081
13,951
-
7,149
20,716
6,007
18,382
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,024
-
-
-
-
-
6,575
6,377
-
-
-
-
-
7,352
Total
$
145,568
223,307
80,267
80,267
72,267
72,267
82,267
82,267
54,200
-
-
90,489
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
210,362
-
-
-
-
-
-
247,318
801,981
-
-
777,090
32,150
-
12,569
-
29,987
-
15,600
-
13,351
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
123,666
-
501,426
321,746
280,071
-
407,507
278,000
392,115
276,569
343,414
-
99,053
288,400
201,462
266,211
* Includes fees of $108,412 received for fulfi lling the Executive Chairman role
+++ Resigned 31 October 2012
for the period 5 March 2012 to 30 June 2012
** Commenced 2 October 2012
*** Retired 1 June 2012
**** Commenced 9 July 2012
***** Retired 1 March 2012. Termination benefi ts amount has been adjusted
from that disclosed in the 2012 Remuneration Report to remove leave
entitlements paid out on termination
+ Commenced 24 October 2012
++ Commenced 24 September 2012
++++ Resigned 26 October 2012
Notes
The elements of remuneration have been determined on the basis of the cost
to the consolidated entity.
Performance rights granted have been valued using the Black-Scholes option
pricing model, which takes account of factors such as the exercise price of
the rights, the current level and volatility of the underlying share price and
the time to maturity of the rights. The amount shown here is an accounting
expense and refl ects the value as determined using this model. The value is
expensed over the vesting period of the rights.
Select Harvests Annual Report 2013
31
Remuneration Report
Fixed and Variable Remuneration
Table 6 details the proportion of fi xed and variable remuneration earned by directors and key management personnel during the 2012 and 2013
fi nancial years.
Table 6: Fixed and Variable Remuneration
FIXED REMUNERATION
Non Executive Directors
M Iwaniw
M Carroll
F Grimwade
R M Herron
P Riordan
Executive Director
P Thompson
J Bird
2013
%
100.0
100.0
100.0
100.0
100.0
55.1
-
Other key management personnel
P Chambers
M Eva
P Ross
L Van Driel
B Van Twest
M Graham
T Millen
73.8
73.9
70.2
73.8
70.9
100.0
100.0
2012
%
100.0
100.0
100.0
100.0
100.0
-
100.0
100.0
-
100.0
100.0
-
100.0
100.0
AT RISK – STI
2013
%
2012
%
AT RISK – LTI
2013
%
2012
%
-
-
-
-
-
18.6
-
19.8
21.6
22.5
22.2
25.2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
26.2
-
6.4
4.5
7.4
4.0
3.9
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
32 Select Harvests Annual Report 2013
Performance Rights Granted
Table 7 details awards of performance rights granted to executives under the LTI Plan that are still in progress.
Table 7: Grants of Performance Rights affecting Remuneration
GRANT YEAR
VESTING CONDITIONS
PERFORMANCE/
VESTING PERIOD
2012
2013
• EPS growth
• Relative TSR performance to peer group
• Continuous service
• EPS growth
• Relative TSR performance to peer group
• Continuous service
• EPS growth
• Relative TSR performance to peer group
• Continuous service
30 June 2014
30 June 2015
30 June 2016
30 June 2014
30 June 2015
30 June 2016
30 June 2015
30 June 2016
30 June 2017
PARTICIPATING
EXECUTIVES
P Chambers*
P Ross*
STATUS
In progress
L Van Driel**
In progress
P Thompson***
M Eva**
B Van Twest**
In progress
* Granted 29 June 2012
** Granted 30 April 2013
*** Approved by shareholders at the November 2012 Annual General Meeting. Granted 30 April 2013
The current LTI Plan provides for the offer of a parcel of performance rights with a three year expiry period to participating employees. The
rights vest annually in three tranches on achievement of the performance hurdles.
Performance rights 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.
Select Harvests Annual Report 2013
33
Remuneration Report
Table 8: Details of Performance Rights Granted, Vested and Exercised
The following table illustrates the movements in performance rights granted to the Managing Director and CEO and executive team during
the period.
2013
NUMBER
OPENING
BALANCE
GRANTED
DURING THE
YEAR
EXERCISED
DURING THE
YEAR
LAPSED
DURING THE
THE YEAR
CLOSING
BALANCE
VESTED
DURING THE
YEAR
FAIR VALUE OF
GRANT YET TO
VEST ($)*
Executive Director
P Thompson
-
900,000
Other key management personnel
173,880
P Chambers
-
M Eva
P Ross
L Van Driel
B Van Twest
M Graham
T Millen
-
172,687
162,180
-
-
167,940
151,740
-
151,800
180,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
167,940
151,740
900,000
173,880
172,687
162,180
151,800
180,000
-
-
-
-
-
-
-
-
-
-
2,032,811
198,708
390,064
185,337
342,484
406,562
-
-
* This represents the maximum value of the performance rights as at their grant date as valued using the option pricing model. The minimum possible total
value of the rights is nil if the applicable vesting conditions are not met.
4. 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, chief fi nancial offi cer and other key management personnel are also
formalised in service agreements. Each of these agreements provide for performance related cash bonuses.
The major provisions of the agreements are set out below.
NAME
TITLE
TERM
NOTICE PERIOD
P Thompson
P Chambers
M Eva
P Ross
L Van Driel
B Van Twest
Managing Director & CEO
Chief Financial Offi cer
On-going
6 months
On-going
3 months
General Manager Sales & Marketing Consumer
On-going
3 months
General Manager Horticulture
Group Trading Manager
General Manager Operations
On-going
3 months
On-going
3 months
On-going
3 months
BASE SALARY INCL.
SUPERANNUATION
450,000
314,200
300,000
286,000
272,000
315,000
Base salaries quoted are for the year ended 30 June 2013. They are reviewed annually by the Remuneration Committee, however the review for
the 30 June 2014 year is yet to be completed.
Other than the notice periods noted above there are no specifi c termination benefi ts applicable to the service agreements.
5. Use of Remuneration Consultants
No remuneration consultants were used during the year.
34 Select Harvests Annual Report 2013
Directors’ Report
Dividends
Interim for the year
• on ordinary shares
Final for 2013 shown as recommended
in the 2013 report
• on ordinary shares
CENTS
3.0
9.0
2013
$’000
1,715
5.172
Indemnifi cation and insurance of directors and offi cers
During the year the Company entered into 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. The terms of the contract do not permit disclosure of the
premium paid.
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.
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)
F Grimwade
P Riordan
Remuneration
M Carroll (Chairman)
M Iwaniw
P Thompson joined the Board 9 July 2012
P Riordan joined the Board 2 October 2012
Directors’ meetings
Nomination
M Iwaniw (Chairman)
P Thompson
M Carroll
F Grimwade
R M Herron
P Riordan
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
3
Number
Attended
3
Number
Eligible to
Attend
3
Number
Attended
3
Number
Eligible to
Attend
1
Number
Attended
1
12
12
12
12
10
12
11
12
12
10
-
5
3
5
2
-
5
3
4
2
3
-
3
-
-
3
-
3
-
-
1
1
1
1
1
1
1
1
1
1
M Iwaniw
P Thompson
R M Herron
M Carroll
F Grimwade
P Riordan
Select Harvests Annual Report 2013
35
Directors’ Report
Director’s interests in contracts
Directors’ interests in contracts are disclosed in Note 32 to the fi nancial statements.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 37.
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 Company 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 and 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.
M Iwaniw
Chairman
Melbourne, 22 August 2013
36 Select Harvests Annual Report 2013
Auditor’s Independence Declaration
As lead auditor for the audit of Select Harvests Limited for the year ended 30 June 2013, 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.
John O’Donoghue
Partner
PricewaterhouseCoopers
Melbourne
22 August 2013
PricewaterhouseCoopers, ABN 52 780 433 757
Freshwater Place 2Southbank Boulevard,SOUTHBANK VIC 3006, GPO BOX 1331, Melbourne VIC 3001
T: +61 3 8603 0000, F: +61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Select Harvests Annual Report 2013
37
Corporate Governance Statement
This statement outlines the key corporate governance practices of the Company 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 Company. 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. A number of channels are used to source candidates to ensure the company benefi ts from a
diverse range of individuals during the selection process.
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 established a Remuneration Committee, and an Audit and Risk 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 Company.
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 and Composition of the Board make reference to
Principle 2, Structure the board to add value.
38 Select Harvests Annual Report 2013
Director Education
The Company has a process to educate new Directors about the nature of the business, current issues, the corporate strategy, and the
expectations of the Company concerning performance of Directors. Directors also have the opportunity to visit the facilities of the Company
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 Company’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.
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 Company.
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.
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.
Select Harvests Annual Report 2013
39
Corporate Governance Statement
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 performance rights to the employee under the executive long term
incentive plan. The plan provides for the offer of a parcel of performance rights 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 performance rights are granted each year and vest
over three years 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 fi ve 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 Company’s fi nancial reports
for the year ended 30 June 2013 present a true and fair view, in all material respects, of the Company’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.
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;
40 Select Harvests Annual Report 2013
• 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 Company. The Company’s
areas of focus in respect of risk management practices include, but are not limited to, product safety, occupational health and safety,
environment, 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 Company’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 Company;
• Risk management framework: The Company’s risk management framework provides a mandate and commitment to risk management,
includes the Company’s policy that sets out the Company’s risk objectives and intentions, embeds risk management within business
processes, defi nes accountabilities and responsibilities, outlines a risk reporting schedule and provides mechanisms for monitoring and
continuous improvement;
• Financial reporting: The Board reviews actual results 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 Company’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 Company’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.
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 Company. The Company’s code of conduct includes the following:
Diversity
Selects Harvests is an equal opportunity employer and recruits people from a diverse range of backgrounds.
Workplace diversity encompasses the full variety of differences between people in the organisation. It includes differences in gender, race,
ethnicity, age, disability and cultural background. Select Harvests recognises that embracing such diversity in its workforce contributes to the
achievement of the Group’s objectives and enhances its reputation as an employer.
Select Harvests is committed to achieving the goals of providing access to equal opportunities at work based on merit and fostering a culture
that embraces the value of diversity.
To support this goal, the Board has developed a Diversity Policy which is available on the Group’s website.
While Select Harvest has a rich diversity of ethnicities and cultural backgrounds amongst its employees, we recognise the need to improve
diversity at senior executive and board level and to make stronger progress on our commitment to building a gender diverse workforce.
At 30 June 2013 there were 93 female employees within the Group (25% of total employees). There were no female senior executives or
Board members.
Select Harvests Annual Report 2013
41
Corporate Governance Statement
In order to enhance the commitment to gender and broader diversity principles, we are working to achieve objectives which include:
OBJECTIVE:
MEASURABLE ACTION:
Review and communicate the company’s core values
New Company Values Statement to be developed and rolled out
Increased focus on gender participation and distribution across
the Group
Review the means by which the Group recruits,
develops and retains females across the Group
Continue to build on our current workplace fl exibility options
Regular reporting to the Board on gender diversity
Survey management and employee attitudes to diversity
Review, refresh and re communicate the Diversity Policy
Review Recruitment Policy & Procedures
Review and enhance position fl exibility and Employment
Terms and Conditions
Enhance Board Reports to provide greater insight
on diversity
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 Company’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 Company’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 Company 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 Company 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 Company has nominated the Company Secretary to ensure compliance with the Company’s continuous disclosure requirements, and
overseeing and co-ordinating disclosure of information to the ASX;
• Information is posted on the Company’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 Company’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 Company’s strategy and goals. It is the policy of the Company 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.
42 Select Harvests Annual Report 2013
SELECT HARVESTS Limited ABN 87 000 721 380
Annual fi nancial report
Contents
Financial report
Income statement
Statement of comprehensive income
Balance sheet
Statement of changes in equity
Statement of cash fl ows
Notes to the fi nancial statements
Directors’ declaration
Independent auditor’s report to the members
ASX additional information
Page
44
45
46
47
48
49
89
91
92
This fi nancial report covers the Company 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 Company’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 22 August 2013. 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 2013
43
Income Statement
For the year ended 30 June 2013
Notes
CONSOLIDATED
Revenue
Sales of goods and services
Gain on sale of permanent water rights
Other revenue
Total revenue
Other income
Biological asset fair value adjustment
Total other income
Expenses
Cost of sales
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Finance costs
Write down of biological assets – Western Australian orchards
Impairment of property, plant and equipment
Other expenses
(Loss) before income tax and discount on acquisition
Discount on acquisition of assets
Discount on acquisition of crop
Total discount on acquisition
PROFIT/(LOSS) BEFORE INCOME TAX
Income tax benefi t/(expense)
PROFIT/(LOSS) 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.
4
4
4
16
5
5
5
5
7
6
25(c)
29
29
2013
$’000
190,918
-
210
191,128
20,190
20,190
(156,664)
(6,688)
(795)
(1,296)
(4,413)
(5,141)
(26,147)
(13,760)
(5,335)
(8,921)
8,013
1,106
9,119
198
2,674
2,872
2012
$’000
246,766
4,041
515
251,322
2,508
2,508
(215,212)
(6,936)
(614)
(1,308)
(4,383)
(6,489)
-
(24,908)
(2,723)
(8,743)
-
-
-
(8,743)
4,274
(4,469)
5.0
5.0
(7.9)
(7.9)
44 Select Harvests Annual Report 2013
Statement of Comprehensive Income
For the year ended 30 June 2013
Profi t/(Loss) for the year
Other comprehensive income
Items that may be reclassifi ed to profi t or loss
Changes in fair value of cash fl ow hedges, net of tax
Other comprehensive (expenses) for the year
TOTAL COMPREHENSIVE INCOME/(EXPENSE) ATTRIBUTABLE
TO MEMBERS OF SELECT HARVESTS LIMITED
The above income statement should be read in conjunction with the accompanying Notes.
CONSOLIDATED
2013
$’000
2012
$’000
2,872
(4,469)
(1,642)
(1,642)
1,230
(401)
(401)
(4,870)
Select Harvests Annual Report 2013
45
Balance Sheet
As at 30 June 2013
Notes
CONSOLIDATED
2013
$’000
8,939
42,142
66,879
343
-
118,303
5,000
123,303
814
75,032
68,415
36,281
180,542
303,845
29,495
40,873
3,321
3,111
76,800
47,250
19,579
711
67,540
144,340
159,505
97,007
9,144
53,354
159,505
2012
$’000
1,061
37,398
36,644
375
1,458
76,936
-
76,936
1,047
90,970
74,171
36,183
202,371
279,307
25,365
25,495
818
2,691
54,369
42,500
21,171
937
64,608
118,977
160,330
95,957
10,472
53,901
160,330
9
10
11
12
13
14
15
16
17
18
19
12
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
Assets held for sale
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Other assets
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
Provisions
TOTAL CURRENT LIABILITIES
NON CURRENT LIABILITIES
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.
46 Select Harvests Annual Report 2013
Statement of Changes in Equity
CONSOLIDATED
Balance at 30 June 2011
Profi t for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with equity holders in their
capacity as equity holders:
Contributions of equity, net of transaction
costs and deferred tax
Dividends paid or provided
Transfer to retained earnings
Balance at 30 June 2012
Profi t for the year
Other comprehensive expense
Total comprehensive profi t/(expense)
for the year
Transactions with equity holders in their capacity
as equity holders:
Contributions of equity, net of transaction costs
and deferred tax
Dividends paid or provided
Employee performance rights
Balance at 30 June 2013
Notes
Contributed
Equity
Reserves
Retained
Earnings
Total
95,066
11,201
62,548
168,815
-
-
-
891
-
-
95,957
-
-
-
1,050
-
-
97,007
-
(401)
(401)
-
-
(328)
10,472
-
(1,642)
(1,642)
-
-
314
9,144
(4,469)
-
(4,469)
-
(4,506)
328
53,901
2,872
-
2,872
-
(3,419)
-
53,354
(4,469)
(401)
(4,870)
891
(4,506)
-
160,330
2,872
(1,642)
1,230
1,050
(3,419)
314
159,505
24
8
24
8
25
The above statement of changes in equity should be read in conjunction with the accompanying Notes.
Select Harvests Annual Report 2013
47
Statement of Cash Flows
For the year ended 30 June 2013
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 received
Net Cash Infl ow From Operating Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of water rights
Proceeds from sale of property, plant and equipment
Payment for water rights
Payment for property, plant and equipment
Acquisition of almond orchards
Tree development costs
Net Cash Outfl ow From Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from/(repayments) of borrowings
Dividends payment on ordinary shares, net of DRP
Net Cash Infl ow (Outfl ow) from fi nancing activities
26
7
Net increase/(decrease) 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
9(a)
The above cash fl ow statement should be read in conjunction with the accompanying Notes.
2013
$’000
191,781
(183,520)
8,261
98
(5,160)
852
4,051
2,339
592
(98)
(3,995)
(6,313)
(6,457)
(13,932)
19,250
(2,369)
16,881
7,000
66
7,066
2012
$’000
260,748
(239,533)
21,215
241
(4,415)
4,990
22,031
15,689
357
-
(9,641)
-
(18,694)
(12,289)
(12,000)
(3,616)
(15,616)
(5,874)
5,940
66
48 Select Harvests Annual Report 2013
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 Company 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. Select
Harvests Limited is a for profi t entity for the purpose of preparing the fi nancial statements.
Compliance with IFRS
The consolidated fi nancial statements of the Select Harvests Limited group 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 the income statement, biological assets,
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 Company’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.
(b) Principles of consolidation
The consolidated fi nancial statements are those of the Company, comprising Select Harvests Limited (the parent entity) and all entities which
Select Harvests Limited controlled at any point during the year and at balance date.
Subsidiaries are all those entities (including special purpose entities) over which the Company has power to govern the 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
currently exercisable or convertible are considered when assessing whether the Company controls another entity.
Subsidiaries are fully consolidated from the date at which control is transferred to the Company. They are deconsolidated from the date that
control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Company.
The fi nancial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies.
Adjustments are made to bring into line any dissimilar accounting policies which may exist.
All intercompany balances and transactions, including unrealised profi ts arising from intra-group transactions, have been eliminated in full.
Investments in subsidiaries are accounted for at cost in the individual fi nancial statements of Select Harvests Limited.
(c) Foreign currency translation
(i) Functional and presentation currency
Items included in the fi nancial statements of each entity comprising the Company are measured using the currency of the primary economic
environment in which the entity operates (“the functional currency”). The consolidated fi nancial statements are presented in Australian
dollars, which is the functional and presentation currency of Select Harvests Limited.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as
qualifying cash 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.
Select Harvests Annual Report 2013
49
Notes to the Financial Statements
(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 at 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;
• 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; and
• 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.
A fair value review is completed at each period end to ensure compliance with AASB 141. The value of almond trees is measured at fair value
using a discounted cash fl ow methodology.
The discounted cash fl ows incorporate the following factors:
• Almond trees have an estimated 30 year economic life, with crop yields consistent with long term almond industry yield rates;
• Selling prices are based on long term average trend prices being $6 per Kg;
• Growing, processing and selling costs are based on long term average levels;
• Temporary water costs are based on long term average market prices where assets have no permanent water rights attached;
• Cash fl ows are discounted at a post tax rate of 13%, 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 Company for sale to external almond orchard owners and for use in almond orchards owned by the Company.
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 an orchard in a new area where there is no previous
experience of commercial almond production are accumulated for the fi rst three years of that orchard. Once the fair value of this orchard
becomes reliably measurable, the orchard is measured in accordance with the almond trees policy noted above.
(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 Company 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 Company 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 Company 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.
50 Select Harvests Annual Report 2013
(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 cash fl ow hedge 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 historical 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.
Depreciation
The depreciable amount of all fi xed assets including buildings and capitalised leased assets, but excluding freehold land water rights are
depreciated on a straight line basis over their estimated useful lives to the entity commencing from the time the asset is held ready for use.
Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the
improvements.
The useful lives for each class of assets are:
Buildings:
25 to 40 years
Leasehold improvements:
5 to 40 years
Plant and equipment:
5 to 20 years
Leased plant and equipment:
5 to 10 years
Irrigation systems:
10 to 40 years
Capital works in progress
Capital works in progress are valued at cost and relate to costs incurred for owned orchards and other assets under development.
(i) Leases
Leases are 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 Company 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.
Select Harvests Annual Report 2013
51
Notes to the Financial Statements
( j) Business Combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other
assets are acquired. The consideration transferred for the acquisition of a subsidiary is comprised of the fair values of the assets transferred,
the liabilities incurred and the equity interests issued by the group. The consideration transferred also includes the fair value of any asset
or liability resulting from a contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.
Acquisition-related costs are expensed as incurred. Identifi able assets acquired and liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis,
the group recognises any non-controlling interest in the acquire either at fair value or at the non-controlling interest’s proportionate share of
the acquiree’s net identifi able assets.
The excess of the consideration transferred the amount of any non-controlling interest in the acquire and the acquisition-date fair value of any
previous equity interest in the acquiree over the fair value of the group’s share of the net identifi able assets acquired is recorded as goodwill.
If those amounts are less than the fair value of the net identifi able assets of the subsidiary acquired and the measurement of all amounts has
been reviewed, the difference is recognised directly in the income statement as a discount on acquisition.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at
the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be
obtained from an independent fi nancier under comparable terms and conditions.
Contingent consideration is classifi ed either as equity or a fi nancial liability. Amounts classifi ed as a fi nancial liability are subsequently
remeasured to fair value with changes in fair value recognised in profi t or loss.
(k) Intangibles
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’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.
(l) 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:
Sale of Goods
Control of the goods has passed to the buyer.
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.
52 Select Harvests Annual Report 2013
Almond Pool Revenue
Under contractual arrangements, the group acts as an agent for external growers by simultaneously acquiring and selling the almonds and
therefore, does not make a margin on those sales. These amounts are not included in the group’s revenue.
As at 30 June 2013 the group 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).
(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 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. 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.
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
(i) Short-term obligations:
Liabilities for wages and salaries, including non-monetary benefi ts and annual leave expected to be settled within 12 months after the end of
the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting
period and are measured at the amounts expected to be paid when the liabilities are settled.
The liability for annual leave is recognised in the provision for employee benefi ts. All other short-term employee benefi t obligations are
presented as payables.
Select Harvests Annual Report 2013
53
Notes to the Financial Statements
(ii) Other long-term benefi t obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end of the period in which
the employees render the related service is recognised in the provision for employee benefi ts and measured as the present value of expected
future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit
method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity
and currency that match, as closely as possible, the estimated future cash outfl ows.
Contributions are made by the Company to an employee superannuation fund and are charged as expenses when incurred.
Share-based payments
Share-based compensation benefi ts are provided to employee’s via the Select Harvests Limited Long Term Incentive Plan (LTIP). Information
relating to this scheme is set out in Note 35.
The fair value of performance rights granted under the Select Harvests Limited LTIP 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 performance rights. The fair value at grant date is independently determined using a Black Scholes option
pricing model that takes into account the term of the right, 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
right. The fair value of the performance rights 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 rights that are expected to vest. At each balance sheet date, the entity revises its estimate of the number of rights that
are expected to vest. 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.
Financial Liabilities
The bank overdraft is carried at the principal amount and is part of the Net Cash balance in the Statement of Cash Flows. 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 Company.
Finance lease liabilities are 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 Company 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 Company for similar instruments.
54 Select Harvests Annual Report 2013
(r) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost.
Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the
period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction
costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until
the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is
capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are classifi ed as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least
12 months after the reporting period.
(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
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The
chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been
identifi ed as the Chief Executive Offi cer
(v) New and amended accounting standards
None of the new standards and amendments to standards that are mandatory for the fi rst time for the fi nancial year beginning 1 July
2012 affected any of the amounts recognised in the current period or any prior period and are not likely to affect future periods. However,
amendments made to AASB 101 Presentation of Financial Statements effective 1 July 2012 now require the statement of comprehensive income
to show the items of comprehensive income grouped into those that are not permitted to be reclassifi ed to profi t or loss in a future period and
those that may have to be reclassifi ed if certain conditions are met.
Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2013 reporting period.
The Company’s assessment of the impact of these new standards and interpretations is set out below.
(i) AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 and AASB 2010-7
Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) (effective from 1 January 2015)
AASB 9 Financial Instruments addresses the classifi cation and measurement of fi nancial assets and is likely to affect the company’s accounting
for its fi nancial assets. The standard is not applicable until 1 January 2015 but is available for early adoption. The company is yet to assess its full
impact and has not yet decided when to adopt AASB 9.
(ii) AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in Other Entities, AASB127 Separate
Financial Statements, AASB 128 Investments in Associates and Joint Ventures, AASB 2011-7 Amendments to Australian Accounting Standards
arising from the Consolidation and Joint Arrangement Standards and AASB 2012-10 Amendments to Australian Accounting Standards
Transition Guidance and Other amendments together represent a suite of related standards covering the accounting and disclosure
requirements for consolidated fi nancial statements, associates, joint arrangements and off balance sheet vehicles.
The new standards and amendments are not expected to have a signifi cant impact on the current accounting treatment of the Company’s
investments in subsidiaries, associates and jointly controlled entities. The Company will adopt the new standards and amendments from their
operative date, being for the fi nancial year ending 30 June 2014.
Select Harvests Annual Report 2013
55
Notes to the Financial Statements
(iii) AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13
(effective 1 January 2013)
This standard and amendments combines guidance for all fair value measurements required in other standards. These standards do not
require fair value measurements additional to those already required or permitted by other Australian accounting standards, and therefore
this standard is not expected to have an impact on the fi nancial results of the Company on adoption. The new accounting standard and
amendments are to be fi rst applied by the Company for the fi nancial year ending 30 June 2014.
(iv) AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements
(effective 1 July 2013)
In July 2011 the AASB decided to remove the individual key management personnel (KMP) disclosure requirements from AASB 124 Related
Party Disclosures, to achieve consistency with the international equivalent standard and remove a duplication of the requirements with the
Corporations Act 2001. While this will reduce the disclosures that are currently required in the notes to the fi nancial statements, it will not
affect any of the amounts recognised in the fi nancial statements. The amendments apply from 1 July 2013 and cannot be adopted early.
(v) Revised AASB 119 Employee Benefi ts, AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) -
(effective 1 January 2013)
In September 2011, the AASB released a revised standard on accounting for employee benefi ts. It requires the recognition of all
remeasurements of defi ned benefi t liabilities/assets immediately in other comprehensive income (removal of the so-called ‘corridor’ method)
and the calculation of a net interest expense or income by applying the discount rate to the net defi ned benefi t liability or asset. The standard
also introduces a number of additional disclosures for defi ned benefi t liabilities/assets and could affect the timing of the recognition of
termination benefi ts. The amendments will have to be implemented retrospectively. It is therefore unlikely that the new rules will have a
signifi cant impact on any of the amounts recognised in the fi nancial statements.
(w) Provisions
Provisions are recognised when the Company 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.
(aa) Joint ventures
Jointly controlled assets
The proportionate interests in the assets, liabilities and expenses of a joint venture activity have been incorporated in the fi nancial statements
under the appropriate headings.
(ab) 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.
(ac) 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 and associates
Investments in subsidiaries and associates are accounted for at cost in the fi nancial statements of Select Harvests Limited.
(ii) Tax consolidation legislation
Select Harvests Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.
56 Select Harvests Annual Report 2013
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 Company’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.
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
Overdraft
Foreign exchange contracts
- buy foreign currency (cash fl ow hedges)
- sell foreign currency (cash fl ow hedges)
30 June 2013
USD $000’s
17,615
(1,712)
5,227
31,271
30 June 2012
USD $000’s
7,131
(1,019)
4,813
9,547
Select Harvests Annual Report 2013
57
Notes to the Financial Statements
Group sensitivity analysis
Based on fi nancial instruments held at the 30 June 2013, had the Australian dollar strengthened/weakened by 5% against the US dollar, with
all other variables held constant, the Group’s post tax profi t for the year would have been $580,000 lower/$641,000 higher (2012: $200,000
lower/$221,000 higher), mainly as a result of the US dollar denominated fi nancial instruments as detailed in the above table. Equity would
have been $1,530,000 lower/$1,691,000 higher (2012:$354,000 lower/$391,000 higher), 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 2013
Weighted Average
Interest Rate
%
6.57%
1.35%
30 June 2012
Weighted Average
Interest Rate
%
7.14%
1.18%
Balance
$’000
86,250
1,873
Balance
$’000
67,000
995
Debt facilities
Overdraft (USD)
An analysis of maturities is provided in 2(c)below
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 swap $30,000,000 of debt at a rate of
3.97% to reduce the risk that higher interest rates pose to the Company’s cash fl ows. The weighted average interest rate of 6.57% in the table
above is inclusive of the interest rate swap.
Group sensitivity
At 30 June 2013, if interest rates had changed by +/- 25 basis points from the weighted average interest rate with all other variables held
constant, post tax profi t for the year would have been $95,000 lower/higher (2012: $116,000 lower/higher).
58 Select Harvests Annual Report 2013
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Select Harvests Annual Report 2013
59
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 of 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 AA (Standard & Poor’s).
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
On 12 August 2013 the Company announced that it had completed negotiations on the refi nancing of its banking facilities. New facilities have
been approved in a joint banking arrangement with the National Australia Bank (NAB) and Rabobank. The following table contains the NAB
facility limits at 30 June 2013 and the recently approved joint facility with NAB and Rabobank:
Debt Facilities
Review Date
1. Core debt
21/06/2016
2. Working capital
Annual Review
3. Acquisition
Annual Review
4. USD Overdraft
Annual Review
30 June 2013
Facility Limit
$47,250,000
$32,000,000
$9,000,000
$3,000,000
Post Balance
Date Adjusted
Facility Limit
$50,000,000
*$60,000,000
$25,000,000
-
$91,250,000
$135,000,000
* Includes USD overdraft
The debt margin above is based on a margin above BBSY or LIBOR.
The Group had access to the following undrawn borrowing facilities at the reporting date:
Floating rate
- Working capital/Acquisition facility
- Bank overdraft facility USD
2013
$’000
$A 2,000
$US 1,288
2012
$’000
$A 45,000
$US 1,981
The bank overdraft facility may be drawn at any time and may be terminated by the bank without notice. The debt facility may be drawn at
any time over a three year term.
60 Select Harvests Annual Report 2013
(d) 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 other 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).
At both 30 June 2013 and 30 June 2012, the group’s assets and liabilities measured and recognised at fair value comprised the interest rate
swap derivative, interest rate cap derivative and foreign exchange forward contracts. Both are measured with reference to level 2.
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.
Group at 30 June 2013
Non derivatives
Variable Rate
Debt facilities
Bank Overdraft
Derivatives
Interest Rate Swap
USD buy – outfl ow
USD sell – (infl ow)
USD net
Group at 30 June 2012
Non derivatives
Variable Rate
Debt facilities
Bank Overdraft
Derivatives
Interest Rate Swap
USD buy – outfl ow
USD sell – (infl ow)
USD net
Less than
6 months
$’000
6 – 12
months
$’000
More than
12 months
$’000
Total
contractual
cash fl ows
$’000
Carrying Amount
(assets)/liabilities
$’000
39,659
1,873
107
5,227
(31,271)
(26,044)
4,642
-
107
-
-
-
49,247
-
355
-
-
-
93,548
1,873
569
5,227
(31,271)
(26,044)
86,250
1,873
569
(343)
2,752
2,409
Less than
6 months
$’000
6 – 12
months
$’000
More than
12 months
$’000
Total
contractual
cash fl ows
$’000
Carrying Amount
(assets)/liabilities
$’000
20,750
995
285
4,490
(9,547)
(5,057)
3,750
42,500
-
285
323
-
323
-
94
-
-
-
67,000
995
664
4,813
(9,547)
(4,734)
67,000
995
664
154
(375)
(221)
Select Harvests Annual Report 2013
61
Notes to the Financial Statements
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 Company 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.
Inventory – current year almond crop
The current year almond crop is classifi ed as a biological asset and valued in accordance with AASB 141 “Agriculture”. In applying this standard,
the consolidated entity has made various assumptions at the balance date as the selling price of the crop can only be estimated and the actual
crop yield will not be known until it is completely processed and sold. The assumptions are the estimated almond selling price at the point of
harvest of $6.38 per kg and almond yield based on a crop estimate for Company Orchards of 12,000mt.
Almond trees
Almond trees are classifi ed as a biological asset and valued in accordance with AASB 141 “Agriculture”. The Company’s accounting policies in
relation to almond trees are detailed in Note 1(f).In applying this policy, the Company has made various assumptions. These are detailed in
Note 16 of the fi nancial statements. As at 30 June 2013, the value of almond trees carried in the fi nancial statements of the Company is
$68.4 million (2012:$74.2million). The valuation of almond trees is very sensitive to the assumption of the long term almond price and yields.
Any change to the long term almond price or yields may have a material impact on these valuations.
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(k).
The recoverable amounts of cash generating units have been determined based on value-in-use calculations.
Key assumptions and sensitivities are disclosed in note 17.
Income taxes
The income tax provision is developed at Balance Sheet date based on a preliminary estimate of the tax payable or receivable. This includes an
estimate of allowable Research & Development (R&D) tax concession credits. The tax return in relation to the fi nancial year ended 30 June 2013
will be prepared and submitted during the fi nancial year ended 30 June 2014. Due to uncertainties associated with changes to the R&D tax
concession rules, no accrual has been made for possible R&D credits in 2013.
WA Project expenditure
Following a formal independent expert review of all horticultural and economic aspects of the Western Australia Greenfi eld orchard
development, the decision was made to exit this project. The review found that the growing conditions have been more challenging than
anticipated and water requirements and power costs have proved to be signifi cantly higher than expected. The assessment was that
commercial crop yields can only be achieved in this geographical area, with signifi cant future investment and this would not be without a
high level of horticultural risk. As a result of the review a decision was made to impair the carrying value of the assets, with write downs of
biological assets of $26,147,387 and impairment losses on property, plant and equipment of $13,760,204 recognised. The remaining amount
capitalised on the balance sheet of $5,000,000, consisting of land and irrigation infrastructure, plant and equipment represents the estimated
recoverable amount of the assets, less cost to sell. A number of judgements have been made in determining the estimated recoverable
amount of the assets, including considerations in relation to the nature of the assets, the location of the assets and the alternate uses of the
assets. It is reasonably possible, on the basis of existing knowledge, that outcomes in the future that are different from the assumptions could
require an adjustment to the carrying amount, either positive or negative. A sale process is currently in progress as the Company seeks to
maximise the value from these assets.
62 Select Harvests Annual Report 2013
4. REVENUE
Revenue from continuing operations
- Management services
- Sale of goods
Other revenue
- Gain on sale of permanent water rights
- Bank interest
- Other revenue
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
Plant and equipment
Total depreciation of non current assets
Finance costs
other persons
Total fi nance costs
Impairment losses: trade receivables
Foreign exchange loss/(gain)
Operating lease rental minimum lease payments
Net loss on disposal of property, plant and equipment
Acquisition transaction costs
Costs associated with assets held for sale
Impairment of property, plant and equipment (a)
Land and irrigation systems
Plant and equipment
Write down of biological assets – Western Australian orchards (b)
(a) Impairment of property, plant and equipment
Notes
Consolidated
2013
$’000
2012
$’000
23,829
167,089
190,918
-
98
112
210
95,445
151,321
246,766
4,041
241
274
4,556
191,128
251,322
156,664
215,212
69
626
3,967
4,662
5,141
5,141
17
11
5,703
270
612
1,930
-
13,760
13,760
26,147
51
338
5,724
6,113
6,489
6,489
34
(111)
13,013
254
-
-
20,000
4,908
24,908
-
Impairment of land and irrigation systems in 2012 and plant and equipment in 2013 relates to impairment losses recognised in relation to the
Company’s orchards in Western Australia. The WA impairment arose as a result of the decision to exit the project as discussed at note 3. The
2012 plant and equipment impairment relates to Victorian assets.
(b) Write down of biological assets – Western Australian orchards
The write down of biological assets relates to revaluation of trees at the Company’s orchards in Western Australia. The write down arose as a
result of the decision to exit the project as discussed at note 3.
Select Harvests Annual Report 2013
63
Notes to the Financial Statements
Notes
Consolidated
2013
$’000
2012
$’000
6. INCOME TAX
(a) Income tax expense/(benefi t)
Current Tax
Deferred tax
Under/(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
22
22
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profi t (loss) from continuing operations before income tax expense
Tax at the Australian tax rate of 30% (2012 – 30%)
Tax effect of amounts that are not deductible (taxable) in calculating
taxable income
Discount on acquisition
Other non assessable items
Under/(Over) provided in prior years
Income tax benefi t
(620)
(2,057)
3
(2,674)
(2,674)
(2,674)
(22,904)
21,312
(1,592)
198
59
(2,736)
-
3
(2,674)
(3,006)
387
(1,655)
(4,274)
(4,274)
(4,274)
(7,977)
6,709
(1,268)
(8,743)
(2,623)
-
4
(1,655)
(4,274)
64 Select Harvests Annual Report 2013
7. BUSINESS COMBINATIONS
(a) Summary of Acquisitions
On 17 January 2013, Select Harvests acquired 690 acres of established almond orchards in northern Victoria for $4.3 million cash consideration,
which included $3.0 million for the orchard assets and $1.3 million for title to the 2013 crop.
On 4 February 2013 Select Harvests purchased 596 acres of almond orchards in northern Victoria for $3.3 million, which included $2.7 million for
the orchard assets and $0.6 million for title to the 2013 crop.
Details of the 4 February 2013 acquisition purchase consideration are as follows:
Purchase consideration
Cash paid
Deferred consideration
$2.0 million
$1.3 million
The provisional and fi nal fair values of assets and liabilities recognised as a result of the acquisitions are as follows:
Plantation land and irrigation systems
Biological assets – almond trees
Inventory
Deferred tax liability
Net Identifi able Assets
Net cash outfl ow on acquisition
Deferred consideration
Total purchase consideration
Discount arising on acquisition
Fair Value
$’000
4,351
12,752
3,569
(3,908)
16,764
6,313
1,332
7,645
9,119
Included in other expenses in the income statement are transaction costs totaling $0.6 million relating to statutory, legal and advisors fees
associated with the acquisitions.
(b) Revenue and profi t contribution
The acquired businesses contributed other income of $2,988,000 and net profi t of $2,092,000 to the group for the period from the acquisition
dates to 30 June 2013.
If the acquisitions had occurred on 1 July 2012, consolidated other income and profi t for the year ended 30 June 2013 would have been
$23,759,000 and $2,602,000 respectively. These amounts have been calculated using the group’s accounting policies and by adjusting the
results of the group to refl ect the biological asset fair value adjustment that would have been taken up and the additional depreciation that
would have been charged had the assets been owned from 1 July 2012, together with the consequential tax effect.
Select Harvests Annual Report 2013
65
Notes to the Financial Statements
Notes
Consolidated
2013
$’000
2012
$’000
8. DIVIDENDS PAID OR PROPOSED ON ORDINARY SHARES
(a) Dividends paid during the year
(i) Interim – paid 26 April 2013 (2012: 16 April 2012)
Fully franked dividend (3c per share)
(2012: 5c per share)
(ii) Final – paid 22 October 2012 (2012: 13 October 2011)
Fully franked dividend (3c per share)
(2012: 3c per share)
(b) Dividends proposed and not recognised as a liability.
A fi nal dividend of 9 cents per share has been declared by the directors ($5,171,657).
(c) Franking credit balance
Franking credits available for the subsequent fi nancial year arising from:
Franking credits available for subsequent reporting periods
1,715
1,715
1,704
3,419
2,820
2,820
1,686
4,506
11,862
11,862
13,865
13,865
The above amounts represent the balance of the franking account (presented as the gross dividend value) as at the end of the reporting
period, adjusted for franking debits that will arise from the receipt of the amount of the tax receivable.
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 a reduction of $5,171,657 (2012 $1,704,381).
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
19
8,939
8,939
8,939
(1,873)
7,066
1,061
1,061
1,061
(995)
66
66 Select Harvests Annual Report 2013
10. TRADE AND OTHER RECEIVABLES (CURRENT)
Trade receivables
Provision for impairment of trade receivables
Prepayments
Notes
Consolidated
2013
$’000
41,558
(38)
41,520
622
42,142
2012
$’000
37,001
(24)
36,977
421
37,398
As at 30 June 2013 current trade receivables of the Group with a value of $38,256 (2012: $24,446) were impaired. The amount of the provision
was $38,256 (2012:$24,446).
The ageing of these receivables is as follows:
Up to 3 months
3 to 6 months
Over 6 months
Movements in the provision for impairment of receivables are as follows:
At 1 July
Provision for impairment recognised during the year
Receivables written off during the year
At 30 June
(b) Trade receivables past due but not impaired
13
25
-
38
24
17
(3)
38
-
-
24
24
3
34
(13)
24
As at 30 June 2013, trade receivables of $3,529,068 (2012: $3,970,002) 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.
3,219
310
-
3,529
3,600
370
-
3,970
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 Company operates. Refer to Note 2 for more information on the risk
management policy of the Company.
Information concerning the effective interest rate and credit risk of both current and non-current receivables is set out in Note 2.
(d) Fair value
Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fair value.
Select Harvests Annual Report 2013
67
Notes to the Financial Statements
Notes
Consolidated
2013
$’000
11. INVENTORIES (CURRENT)
Raw materials at cost
Finished goods at cost
Other inventory at cost
Almond stock at net realisable value
1(e)
12. DERIVATIVE FINANCIAL INSTRUMENTS (CURRENT)
Current Assets
Forward exchange contracts – cash fl ow hedges
Total current derivative fi nancial instrument assets
Current Liabilities
Interest rate swap – cash fl ow hedges
Forward exchange contracts – cash fl ow hedges
Total current derivative fi nancial instrument liabilities
(i) Cash fl ow hedges
5,527
7,714
5,335
48,303
66,879
343
343
569
2,752
3,321
2012
$’000
6,296
7,450
5,707
17,191
36,644
375
375
664
154
818
On 25 February 2013, the Company entered into an agreement to swap the variable interest rate applicable to $30m of debt to fi xed interest at
a rate of 3.97% until 29 February 2016. The market value of the swap is recognised as a current liability in the balance sheet. Movements in the
fair value of the cap are treated similarly 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 Company 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 of entering the forward exchange contracts is to protect the Company against unfavourable exchange rate
movements for highly probable contracted and forecasted sales and purchases undertaken in foreign currencies.
The accounting policy in regard to forward exchange contracts is detailed in Note 1(c).
68 Select Harvests Annual Report 2013
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
6 months to 1 year
2013
$’000
5,227
-
5,227
2012
$’000
4,490
323
4,813
2013
$
0.99
-
Sell United States Dollars Settlement
Buy Australian Dollars
Average Exchange Rate
Less than 6 months
(ii) Credit risk exposures
2013
$’000
31,271
31,271
2012
$’000
9,547
9,547
2013
$
0.97
2012
$
0.99
0.97
2012
$
0.97
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 net amount of the foreign currency the Company 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 $26,043,890
(2012: $4,733,901).
The Company does not have any material credit risk exposure to any single debtor or group of debtors under fi nancial instruments entered
into by the Company.
Select Harvests Annual Report 2013
69
Notes to the Financial Statements
13. ASSETS HELD FOR SALE
Property, plant and equipment
Notes
Consolidated
2013
$’000
2012
$’000
5,000
5,000
-
-
This amount represents the estimated recoverable amount of assets at the Company’s Western Australian orchards, less cost to sell. As outlined
in note 3, the decision has been made to exit this project. An independent review found that the growing conditions have been more challenging
than anticipated and water requirements and power costs have proved to be signifi cantly higher than expected. The assessment was that
commercial crop yields can only be achieved in this geographical area, with signifi cant future investment and this would not be without a high
level of horticultural risk. As a result of the review a decision was made to impair the carrying value of the assets, with write downs of biological
assets of $26,147,387 and impairment losses on property, plant and equipment of $13,760,204 recognised. A sale process is currently in progress as
the Company seeks to maximise the value from these assets. These assets are included within the Almond Division segment.
14. OTHER ASSETS (NON-CURRENT)
Prepayments
15. PROPERTY, PLANT AND EQUIPMENT
Buildings
At cost
Accumulated depreciation
Plantation land and irrigation systems
At cost
Accumulated depreciation and impairment
Total land and buildings
Plant and equipment
At cost
Accumulated depreciation and impairment
Capital works in progress
At cost
Total plant and equipment
Total property, plant and equipment
Cost
Accumulated depreciation
Total written down amount
70 Select Harvests Annual Report 2013
15(a)
15(a)
15(a)
15(a)
814
814
1,047
1,047
12,531
(773)
11,758
81,463
(26,391)
55,072
66,830
51,097
(43,620)
7,477
725
8,202
145,816
(70,784)
75,032
11,910
(851)
11,059
75,230
(23,714)
51,516
62,575
70,257
(42,902)
27,355
1,040
28,395
158,437
(67,467)
90,970
(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
2013
$’000
Buildings
Carrying amount at beginning
Acquired through business combinations
Disposals
Depreciation expense
Transfers between classes
Plantation land and irrigation systems
Carrying amount at beginning
Acquired through business combinations
Impairment of land and irrigation systems
Disposals
Assets transferred to held for sale
Depreciation expense
Transfers between classes
Plant and equipment
Carrying amount at beginning
Additions
Impairment of plant and equipment
Disposals
Transfers between classes
Depreciation expense
Capital works in progress
Carrying amount at beginning
Additions
Transfers between classes
Total written down value
11,059
4
(506)
(69)
1,270
11,758
51,516
4,351
-
(152)
(5,000)
(626)
4,983
55,072
27,355
3,166
(13,760)
(203)
(5,114)
(3,967)
7,477
1,040
825
(1,140)
725
75,032
2012
$’000
11,110
-
-
(51)
-
11,059
54,578
-
(20,000)
(3,211)
-
(338)
20,487
51,516
35,696
349
(4,908)
(1,399)
3,341
(5,724)
27,355
15,139
9,729
(23,828)
1,040
90,970
Select Harvests Annual Report 2013
71
Notes to the Financial Statements
16. BIOLOGICAL ASSETS – ALMOND TREES (NON-CURRENT)
The Company, as part of its operations, grows, harvests, and sells almonds. Harvesting of almonds occurs from February through to May each
year. The almond orchards are located in Victoria and NSW.
As at 30 June 2013 the Company owned a total of 5,524 acres of almond orchards (2012: 8,232 acres) and leased a total of 4,498 acres of almond
orchards (2012: 4,521 acres).
For almond trees on orchards leased on a long term basis by the company, the future economic risks and rewards associated with these trees
remain with Select Harvests. Accordingly, the trees are deemed to be an asset of the company.
During the year ended 30 June 2013, 12,000 metric tonnes of almonds were harvested from these orchards (2012: 5,830 metric tonnes).
Carrying amount at 1 July
Transferred to inventory
Change in fair value
Acquired through business combinations
Additions
Impairment of trees
Carrying amount at 30 June
Consolidated
2013
$’000
74,171
(27,498)
20,190
12,752
14,947
(26,147)
68,415
2012
$’000
49,585
(1,066)
2,508
-
23,144
-
74,171
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, which are in line with almond
industry sourced data;
• Selling prices are based on long term average trend prices being $6 per kg;
• Growing, processing and selling costs are based on expected future costs;
• Temporary water costs are based on long term average market prices where assets have no permanent water rights attached;
• Cash fl ows are discounted at a rate of 13%(2012: 13%) which takes into account the cost of capital plus an appropriate 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 and leased orchards. The Group sells almonds harvested from owned
and leased 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 Company, 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 Company is exposed to fi nancial risks arising from changes in the Australian dollar price of almonds because export sales are denominated
in US dollars. The Company 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.
72 Select Harvests Annual Report 2013
17. INTANGIBLES (NON-CURRENT)
Year ended 30 June 2012
Opening net book amount
Disposal of permanent water rights
Closing net book amount
Year ended 30 June 2013
Opening net book amount
Acquisition of permanent water rights
Closing net book amount
Consolidated
Brand
Names*
$’000
Permanent
Water Rights
$’000
Goodwill
$’000
25,995
-
25,995
25,995
-
25,995
2,905
-
2,905
2,905
-
2,905
18,061
(10,778)
7,283
7,283
98
7,381
Total
$’000
46,961
(10,778)
36,183
36,183
98
36,281
* Brand name assets relate to the “Lucky” brand, which has been assessed as having an indefi nite useful life. This assessment is based on the Lucky brand having
been sold in the market place for over 50 years, being a market leader in the cooking nuts category and remaining a heritage brand.
a) Impairment tests for goodwill and brand names
Goodwill is allocated to the Company’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 forecasts based on fi nancial projections by management covering a fi ve year period based on growth rates taking into account 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. A pre-tax weighted average cost of capital of 13% (2012:13%) 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 2013. If the
projected annual cash fl ows were decreased by 5%, or if a pre-tax discount rate of 13.7% was used instead of 13.0% the recoverable amount of
the goodwill in the Food Products Division would be equal to the carrying amount of goodwill at 30 June 2013.
(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.
18. TRADE AND OTHER PAYABLES (CURRENT)
Trade creditors
Other creditors and accruals
19. INTEREST BEARING LIABILITIES (CURRENT)
Secured
Bank overdraft
Debt facilities
Total secured current borrowings
Notes
Consolidated
2013
$’000
10,441
19,054
29,495
1,873
39,000
40,873
2012
$’000
13,075
12,290
25,365
995
24,500
25,495
Select Harvests Annual Report 2013
73
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 facilities are set out in
Note 21.
(b) Interest rate risk exposures
Details of the Company’s exposure to interest rate changes on borrowings are set out in Note 2.
20. PROVISIONS (CURRENT)
Employee benefi ts
21. INTEREST BEARING LIABILITIES (NON-CURRENT)
Term debt facility
Assets pledged as security
Consolidated
2013
$’000
3,111
3,111
47,250
47,250
2012
$’000
2,691
2,691
42,500
42,500
The bank overdraft and facilities 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:
Current
Floating charge
Cash and cash equivalents
Receivables
Inventories
Current tax receivables
Derivative fi nancial instruments
Assets held for sale
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
74 Select Harvests Annual Report 2013
Consolidated
2013
$’000
8,939
42,142
66,879
-
343
5,000
123,303
814
75,032
68,415
7,381
151,642
274,945
2012
$’000
1,061
37,398
36,644
1,458
375
-
76,936
1,047
90,970
74,171
7,283
173,471
250,407
Financing arrangements
The Company has bank overdraft facilities available to the extent of US$3,000,000 (2012: US$3,000,000).
The Company has a debt facility available to the extent of $91,250,000 as at 30 June 2013 (2012: $115,000,000). On 12 August 2013 the Company
announced that it had completed negotiations on the refi nancing of its banking facilities. New facilities totalling $135,000,000 have been
approved in a joint banking arrangement with the National Australia Bank and Rabobank. The split between current and non-current liabilities
has been based on the repayment requirements under the terms of the existing debt facility.
The current interest rates at balance date are 5.07% on the debt facility, and 0.78% 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 2013.
Consolidated
2013
$’000
2012
$’000
22. DEFERRED TAX LIABILITIES (NON CURRENT)
The balance comprises temporary differences attributable to:
Amounts recognised in profi t and loss
Accruals and provisions
Inventory
Biological assets – almond trees
Property, plant and equipment
Intangibles
Amounts recognised directly in OCI
Cash fl ow hedges
Amounts recognised directly in equity
Equity raising costs
Total deferred tax liabilities
Carry forward tax losses
Net deferred tax liabilities
Movements:
Opening balance 1 July
Prior period over provision
(Credited) to income statement
Charged/(credited) to equity
Discount on acquisition
Carry forward tax losses
Closing balance at 30 June
23. PROVISIONS (NON CURRENT)
Employee entitlements
Aggregate employee entitlements liability
(Including current liabilities in Note 20)
(2,403)
1,608
16,991
15,622
677
32,495
(893)
-
31,602
(12,023)
19,579
21,171
3
(1,765)
(893)
3,908
(2,845)
19,579
711
3,822
10
1,679
19,443
8,825
871
30,828
153
(632)
30,349
(9,178)
21,171
25,123
1,655
(387)
244
-
(5,464)
21,171
937
3,628
Select Harvests Annual Report 2013
75
Notes to the Financial Statements
Consolidated
2013
$’000
97,007
97,007
2013
2012
Number of Shares
56,812,699
650,152
57,462,851
$’000
95,957
1,050
97,007
Number of Shares
56,226,960
585,739
56,812,699
2012
$’000
95,957
95,957
$’000
95,066
891
95,957
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 plan
End of Financial year
(c) Performance Rights
Long Term Incentive Plan
The company offered employee participation in short term and long term incentive schemes as part of the remuneration packages for the
employees. 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 long term scheme involves the issue of performance rights to the employee, under the Long Term Incentive Plan. During or since the end
of the fi nancial year, no performance rights (2012: no performance rights) have vested under this plan (refer Note 35 and Directors’ Report for
further details). The market value of ordinary Select Harvests Limited shares closed at $3.27 on 30 June 2013 ($1.30 on 30 June 2012).
(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.
(e) Capital risk management
The group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to
provide returns for shareholders and benefi ts for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt.
76 Select Harvests Annual Report 2013
Notes
25(a)
25(a)
25(a)
25(a)
25(c)
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
Fair value movement in interest rate swap
Fair value movement in interest rate cap
Fair value movement in foreign currency dealings arising during the year
Balance at end of year
Asset revaluation reserve
Balance at beginning of year
Balance at end of year
Options reserve
Balance at beginning of year
Option expense
Transfer to retained earnings
Balance at end of year
b) Nature and purpose of reserves
(i) Capital reserve
Consolidated
2013
$’000
3,270
(2,085)
7,645
314
9,144
53,354
3,270
3,270
(443)
266
-
(1908)
(2,085)
7,645
7,645
-
314
-
314
2012
$’000
3,270
(443)
7,645
-
10,472
53,901
3,270
3,270
(42)
(664)
7
256
(443)
7,645
7,645
328
-
(328)
-
The capital reserve was previously used to isolate realised capital profi ts from disposal of non-current assets.
(ii) Asset revaluation reserve
The asset revaluation reserve was used to record increments and decrements in the value of non-current assets. 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 performance rights granted and expensed but not exercised.
(iv) Cash fl ow hedge reserve
The cash fl ow hedge reserve is used to record gains or losses on the fair value movements in the interest rate cap and foreign currency
contracts in a cash fl ow hedge that are recognised directly in equity.
Select Harvests Annual Report 2013
77
Notes to the Financial Statements
(c) Retained profi ts
Balance at the beginning of year (i)
Profi t/(loss) attributable to members of Select Harvests Limited
Total available for appropriation
Dividends paid
Transfer from reserves
Balance at end of year
(i) Refer to Note 1 (a)
26. RECONCILIATON OF THE NET PROFIT AFTER INCOME TAX TO THE
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net profi t/(loss)
Non-cash items
Depreciation and amortisation
Biological asset fair value adjustment
Impairment of property, plant and equipment
Write down of biological assets
Discount on acquisition
Net (gain) / loss on sale of assets
Options expense
Changes in assets and liabilities
(Increase) / decrease in receivables
(Increase) in inventory
(Increase) / decrease in other assets
Increase / (decrease) in trade and other payables
Decrease in income tax receivable
Increase in deferred tax liability
Increase / (decrease) in employee entitlements
Net cash fl ow from operating activities
Non cash fi nancing activities
During the current year the company issued $650,152 of new equity as part of the Dividend Reinvestment Plan.
Consolidated
2013
$’000
53,901
2,872
56,773
(3,419)
-
53,354
2012
$’000
62,548
(4,469)
58,079
(4,506)
328
53,901
2,872
(4,469)
4,662
(20,190)
13,760
26,147
(9,119)
270
314
(7,124)
(7,618)
233
2,798
1,458
(4,606)
194
4,051
6,113
(2,508)
24,908
-
-
(3,787)
-
3,118
(2,819)
2,575
(1,352)
4,841
(3,970)
(619)
22,031
78 Select Harvests Annual Report 2013
27. EXPENDITURE COMMITMENTS
(a) Lease commitments
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 lease expenditure contracted for at reporting date
Consolidated
2013
$’000
2012
$’000
10,779
38,509
87,023
136,311
4,613
12,102
2,981
19,696
6,166
26,407
84,042
116,615
9,412
33,173
98,484
141,069
3,411
7,473
7,569
18,453
6,001
25,700
90,915
122,616
The almond orchard leases comprises the lease of a 512 acre almond orchard and a 1,002 acre lease from Arrow Funds Management in which
the Company 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 the consolidated entity 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.
(b) Capital commitments
Capital expenditure contracted for at reporting date but not recognised as liabilities is as follows:
Permanent water rights
882
882
-
-
28. EVENTS OCCURING AFTER BALANCE DATE
On 22 August 2013, the Directors declared a fi nal dividend of 9 cents per share in relation to the fi nancial year ended 30 June 2013 to be paid on
15 October 2013.
On 12 August 2013 the Company announced that it had completed negotiations on the refi nancing of its banking facilities. New facilities
totalling $135 million have been approved in a joint banking arrangement with the National Australia Bank and Rabobank.
There has been no other matter or circumstance, which has arisen since 30 June 2013 that has signifi cantly affected or may signifi cantly affect:
a) the operations, in fi nancial years subsequent to 30 June 2013, of the Company, or
b) the results of those operations, or
c) the state of affairs, in fi nancial years subsequent to 30 June 2013, of the Company.
Select Harvests Annual Report 2013
79
Notes to the Financial Statements
29. EARNINGS PER SHARE
Basic earnings per share attributable to equity holders of the Company
Diluted earnings per share attributable to equity holders of the Company
2013
Cents
5.0
5.0
The following refl ects the income and share data used in the calculations of basic and diluted earnings per share:
Consolidated
2013
$’000
2012
Cents
(7.9)
(7.9)
2012
$’000
Basic earnings per share:
Profi t/(loss) attributable to equity holders of the Company used in
calculating basic earnings per share
Diluted earnings per share:
Profi t/(loss) 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
30. REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
a) Directors
The following persons were directors of Select Harvests Limited during the fi nancial year:
2,872
(4,469)
2,872
(4,469)
Number of shares
2013
2012
57,100,931
56,429,488
57,777,363
56,429,488
(i) Chairman – non-executive
M Iwaniw
(ii) Executive director
P Thompson, Managing Director*
(iii) Non-executive directors
F Grimwade
R M Herron
M Carroll
P Riordan**
* Appointed
9 July 2012
** Appointed
2 October 2012
b) Other key management personnel
The following persons also had authority and responsibility for planning, directing, and controlling the continuing activities of the Company,
directly or indirectly, during the fi nancial year:
Name
P v
M Eva
P Ross
Position
Chief Financial Offi cer & Company Secretary
Group Manager Sales & Marketing
Employer
Select Harvests Limited
Select Harvests Limited
Group Horticultural & Farm Operations Manager
Select Harvests Limited
L Van Driel
B Van Twest
Group Trading Manager
Group Manager Operations
Select Harvests Limited
Select Harvests Limited
80 Select Harvests Annual Report 2013
(c) Key management personnel compensation
Short term employment benefi ts
Termination benefi ts
Long service leave
Share based payments
Notes
Consolidated
2013
$’000
2,984,314
123,666
39,599
314,019
3,461,598
2012
$’000
2,495,566
247,318
13,729
-
2,756,613
(d) Equity instrument disclosures relating to key management personnel
Number of options/performance rights held by directors and key management personnel
The movement during the fi nancial year in the number of performance rights over ordinary shares in the Company held, directly or indirectly,
by each director and member of key management personnel is as follows:
2013
Directors
P Thompson*
Key Management Personnel
P Chambers
M Eva**
P Ross
L Van Driel
B Van Twest***
M Graham****
T Millen*****
* Appointed 9 July 2012
** Appointed 24 October 2012
*** Appointed 24 September 2012
**** Resigned 31October 2012
***** Resigned 26 October 2012
2012
Directors
J Bird***
Key Management Personnel
P Chambers
M Graham
L Van Driel
T Millen
P Ross
*** Retired 1 March 2012
Held at
1 July 2012
Granted as
Compensation
Lapsed
Held at
30 June 2013
Unvested at
30 June 2013
-
900,000
-
172,678
-
151,800
180,000
173,880
-
162,180
-
-
167,940
151,740
-
-
-
-
-
-
900,000
900,00
173,880
172,678
162,180
151,800
180,000
-
-
173,880
172,678
162,180
151,800
180,000
-
-
-
-
167,940
151,740
Held at
1 July 2011
Granted as
Compensation
Lapsed
Held at
30 June 2012
Unvested at
30 June 2012
539,784
136,426
41,320
116,214
117,685
126,757
-
(539,784)
-
-
173,880
167,940
-
151,740
162,180
(136,426)
(41,320)
(116,214)
(117,685)
(126,757)
173,880
167,940
-
151,740
162,180
173,880
167,940
-
151,740
162,180
No performance rights held by directors or key management personnel are vested but not exercisable.
Select Harvests Annual Report 2013
81
Notes to the Financial Statements
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:
2013
Directors – Non executive
M Iwaniw
R M Herron
M Carroll
F Grimwade
Directors – Executive
P Thompson*
Key Management Personnel
P Chambers
P Ross
M Eva**
L Van Driel
B Van Twest***
M Graham****
T Millen*****
* Appointed 9 July 2012
** Appointed 24 October 2012
*** Appointed 24 September 2012
**** Resigned 31 October 2012
***** Resigned 26 October 2012
2012
Directors – Non executive
J C Leonard*
R M Herron
M Carroll
F Grimwade
M Iwaniw
Directors – Executive
J Bird**
Key Management Personnel
M Graham
T Millen
L Van Driel
P Chambers
P Ross
Held at
1 July 2012
Received
on exercise
Other – DRP,
sales & purchases
Held at
30 June 2013
100,000
41,965
-
100,000
-
22,000
-
-
-
-
-
45,444
-
-
-
-
-
-
-
-
-
-
-
-
62,262
1,708
-
-
162,262
43,673
-
100,000
20,000
20,000
-
-
-
-
-
-
-
22,000
-
-
-
-
-
45,444
Held at
1 July 2011
Received
on exercise
Other – DRP,
sales & purchases
Held at
30 June 2012
947,099
40,672
-
30,000
3,000
645,005
-
45,444
-
8,000
-
-
-
-
-
-
-
-
-
-
-
-
-
1,293
-
70,000
97,000
-
-
-
-
14,000
-
947,099
41,965
-
100,000
100,000
645,005
-
45,444
-
22,000
-
* Retired 1 June 2012
** Retired 1 March 2012. Closing balance of shares shown is as at retirement.
(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
2013 are detailed in Note 32.
82 Select Harvests Annual Report 2013
2013
$
276,900
-
276,900
47,396
137,049
184,445
461,345
2012
$
236,750
60,000
296,750
41,500
548,247
589,747
886,497
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
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
There were no director related entity transactions during the year.
33. SEGMENT INFORMATION
Segment products and locations
The segment reporting refl ects the way information is reported internally to the Chief Executive Offi cer.
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 is split into two segments:
» Company Orchards - the growing, processing and sale of almonds to the food industry from company owned almond orchards; and
» Managed 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 Company operates predominantly within the geographical area of Australia.
Select Harvests Annual Report 2013
83
Notes to the Financial Statements
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34. CONTROLLED ENTITIES
Parent Entity:
Select Harvests Limited (i)
Subsidiaries of Select Harvests Limited:
Kyndalyn Park Pty Ltd (i)
Select Harvests Food Products Pty Ltd (i)
Meriram Pty Ltd (i)
Kibley Pty Ltd (i)
(i) Members of extended closed group
35. EMPLOYEE BENEFITS
Long Term Incentive Plan
Country of Incorporation
Percentage Owned (%)
2013
2012
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
100
100
100
The Group offers executive directors and senior executives the opportunity to participate in the long term incentive plan (LTI Plan) involving
the issue of performance rights to the employee under the LTI Plan. The LTI Plan provides for the offer of a parcel of performance rights
with a three year life to participating employees on an annual basis. One third of the rights vesting each year, with half of the rights vesting
upon achievement of earnings per share (EPS) growth targets and the other half vesting upon achievement of total shareholder return (TSR)
targets. The EPS growth targets are based on the average growth of the company’s EPS over the three years prior to vesting. The TSR targets
are measured based on the company’s average TSR compared to the TSR of a peer group of ASX listed companies over the three years prior to
vesting. The performance targets and vesting proportions are as follows:
MEASURE
EPS
Below 5% growth
5% growth
5.1% – 6.9% growth
7% or higher growth
TSR
Below the 60th percentile*
60th percentile*
61st – 74th percentile*
At or above 75th percentile*
* Of the peer group of ASX listed companies
PROPORTION OF
RIGHTS TO VEST
Nil
25%
Pro rata vesting
50%
Nil
25%
Pro rata vesting
50%
Select Harvests Annual Report 2013
85
Notes to the Financial Statements
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86 Select Harvests Annual Report 2013
35. EMPLOYEE BENEFITS (continued)
Fair value of performance rights granted
The assessed fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the term of the rights,
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 right.
The model inputs for rights granted during the year ended 30 June 2013 included:
Share price at grant date
Expected volatility*
Expected dividends
Risk free interest rate
29 JUNE 2012 RIGHTS ISSUE
$1.62
30%
30 APRIL 2013 RIGHTS ISSUE
$2.90
30%
Nil
5%
Nil
5%
* Expected share price volatility was calculated with reference to the annualised standard deviation of daily share price returns on the underlying security over
a specifi ed period.
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:
Performance rights granted under employee long term incentive plan
36. CONTINGENT LIABILITIES
Cross guarantees given by the entities comprising the Company 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/loss
Consolidated
2013
$
314,019
314,019
2012
$
-
-
2013
$’000
7,617
387,861
38,151
287,224
97,006
3,270
(2,085)
314
2,132
100,637
819
(823)
2012
$’000
1,726
329,885
19,768
226,249
95,957
3,270
(444)
121
4,732
103,636
2,015
1,614
Select Harvests Annual Report 2013
87
Notes to the Financial Statements
(b) Tax consolidation legislation
Select Harvests Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 1 July
2003. The accounting policy in relation to this legislation is set out in Note 1(m). On adoption of the tax consolidation legislation, the entities in
the tax consolidated group entered into a tax sharing agreement which limits the joint and several liability of the wholly-owned entities in the
case of a default by the head entity, Select Harvests Limited.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Select Harvests Limited
for any current tax payable assumed and are compensated by Select Harvests Limited for any current tax receivable and deferred tax assets
relating to unused tax losses or unused tax credits that are transferred to Select Harvests Limited under the tax consolidation legislation.
The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ 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.
88 Select Harvests Annual Report 2013
Director’s Declaration
In the directors’ opinion:
(a) the fi nancial statements and Notes set out on pages 18 to 88 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 2013 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.
M Iwaniw
Chairman
Melbourne, 22 August 2013
Select Harvests Annual Report 2013
89
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 2013, 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 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 of the fi nancial report that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as
the directors determine is necessary to enable the preparation of the fi nancial report that is free from material
misstatement, whether due to fraud or error. 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.
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinions.
PricewaterhouseCoopers, ABN 52 780 433 757
Freshwater Place 2Southbank Boulevard,SOUTHBANK VIC 3006, GPO BOX 1331, Melbourne VIC 3001
T: +61 3 8603 0000, F: +61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
90 Select Harvests Annual Report 2013
Independent auditor’s report to the members of
Select Harvests Limited (continued)
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 consolidated entity’s fi nancial position as at 30 June 2013 and of its
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 fi nancial report 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 the directors’ report for the year ended 30 June 2013. 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 2013 complies with section
300A of the Corporations Act 2001.
PricewaterhouseCoopers
John O’Donoghue
Partner
Melbourne
22 August 2013
Select Harvests Annual Report 2013
91
ASX additional information
Additional information required by the Australian Stock Exchange Limited and not shown elsewhere in this report is as follows.
(a) Distribution of equity securities
The following information is current as at 31 July 2013.
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
953
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
1,143
421
495
53
The number of shareholders holding less than a marketable parcel of shares is:
Number of Ordinary Shares
9,869
Number of Shareholders
230
(b) Twenty largest shareholders
The following information is current as at 24 June 2013.
The names of the twenty largest holders of quoted shares are:
1
2
FMR LLC
Thorney Investment Group
3 Global Thematic Partners LLC
4 Credit Suisse Group
5 Dimensional Fund Advisors
6 AMP Capital Investors Limited
7 Mr Curt Leonard
8 Mr Thomas Hadley
9 Rockets Worldwide Limited
10 Fairview Equity Partners
11 DBTS (G) Ltd
12 Middendorp Family Holdings (Retail Group)
13 Mr & Mrs Franklyn R Brazil
14 Mr Paul Taylor
15 Sigma Funds Management Pty Ltd
16 Mr J Shuster & Ms J Lush
17 Mr William Matthes
18 Mr Rodney Fitzroy
19 Mr John Lawless
20 Berkholts Investments Pty Ltd
(c) Substantial shareholders
The names of substantial shareholders are:
FMR LLC
Thorney Investment Group
(d) Voting rights
Listed Ordinary Shares
Number of Shares
7,085,081
Percentage of Shares
12.33%
6,865,928
2,364,025
2,031,584
1,786,757
1,714,225
947,099
881,844
871,990
820,523
760,401
706,483
600,000
530,000
400,622
400,000
387,455
350,000
325,500
319,640
11.95%
4.11%
3.54%
3.11%
2.98%
1.65%
1.53%
1.52%
1.43%
1.32%
1.23%
1.04%
0.92%
0.70%
0.70%
0.67%
0.61%
0.57%
0.56%
Number of Shares
7,085,081
6,865,928
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
The Company is listed on the Australian Stock Exchange. The home exchange is Melbourne.
92 Select Harvests Annual Report 2013
Corporate
information
Select Harvests Limited
ABN 87 000 721 380
Directors
M Iwaniw (Chairman)
P Thompson (Managing Director)
M Carroll (Non-Executive Director)
F Grimwade (Non-Executive Director)
R M Herron (Non-Executive Director)
P Riordan (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
National Australia Bank Limited
Rabobank Australia
Auditor
PricewaterhouseCoopers
Share Register
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Telephone (03) 9415 4000
Facsimile (03) 9473 2555
www.investorcentre.com
Internet Address
www.selectharvests.com.au
Select Harvests Annual Report 2013
3
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