ANNUAL REPORT 2020
Y E A R E N D E D 3 0 S E P T E M B E R 2 0 2 0
P L AT F O R M E D F O R
OUR ORCHARDS BLOSSOM LATE JULY TO EARLY SEPTEMBER
2
GEOGRAPHIC DIVERSITY
The strategy to have geographic diversity
between our orchards limits our exposure to the
weather, the spread of disease and insect
infestation.
Geographic diversity also enhances the
availability of labour.
SOUTHERN
REGION
PARINGA
WAIKERIE
LAKE
CULLULLERAINE
HILLSTON
EUSTON
Adelaide
LOXTON
ROBINVALE
NORTHERN
REGION
GRIFFITH
Sydney
CENTRAL
REGION
THOMASTOWN
Melbourne
PROCESSING CENTRES
SELECT HARVESTS ORCHARDS
PIANGIL ALMOND ORCHARD
Sale and Implementation Deed entered in October 2020
1,566 hectares planted almond trees
(NOT INCLUDED IN ACREAGE FIGURES BELOW)
AUSTRALIA
7,696HA
(19,016 ACRES)
TOTAL
PLANTED AREA
2,670HA
(6,597 ACRES)
3,078HA
(7,605 ACRES)
1,948HA
(4,814 ACRES)
SOUTHERN REGION
PLANTED AREA
CENTRAL REGION
PLANTED AREA
NORTHERN REGION
PLANTED AREA
Select Harvests Annual Report 2020 Select Harvests Annual Report November 2019
3
3
Company
Company
Profile
Profile
CONTINUED BRAND INVESTMENT
CONTINUED STRATEGIC INVESTMENT IN OUR BRANDS
TONNAGE TOTALS
WEIGHT OF KERNELS PER ANNUM
TONNAGE TOTALS
WEIGHT OF KERNELS PER ANNUM
7,135
HA
15,700
MT
14,500
MT
14,200
MT
6,687
HA
14,100
MT
5,389
10,500
HA
MT
5,597
HA
TM
TM
22,690
MT
23,250
MT
7,677
HA
METRIC
TONNES
23,000
22,000
METRIC
21,000
TONNES
20,000
19,000
19,000
18,000
18,000
17,000
17,000
16,000
15,000
16,000
14,000
15,000
13,000
12,000
14,000
11,000
10,000
13,000
9,000
12,000
8,000
7,000
11,000
6,000
10.000
2014 2015 2016
2017
2018
2019
2020
2014
2015
2016
2017
2018
our
is one of Australia’s
Select Harvests
largest almond growers and a leading
manufacturer, processor and marketer of
Select Harvests is one of Australia’s
nut products, health snacks and muesli. We
largest almond growers and a leading
supply the Australian retail and industrial
manufacturer, processor and marketer
markets plus export almonds globally.
of nut products, health snacks and
muesli. We supply the Australian retail
largest almond
We are Australia’s second
and industrial markets plus export
producer and marketer with core capabilities
almonds globally.
across: Horticulture, Orchard Management,
Nut Processing, Sales and Marketing. These
We are Australia’s second largest almond
capabilities enable us to add value throughout
producer and marketer with core capabilities
the value chain.
across: Horticulture, Orchard Management,
Nut Processing, Sales and Marketing. These
Our Operations
capabilities enable us to add value throughout
Our geographically diverse almond orchards
in Victoria, South Australia
located
are
Our Operations
and New South Wales with a portfolio that
includes more than 7,696 Ha (19,016 acres)
Our geographically diverse almond orchards
leased almond
of company owned and
are at or near maturity. Located in Victoria,
for planting.
land suitable
orchards and
South Australia and New South Wales our
independent
These orchards, plus other
portfolio includes more than 7,689 Ha
supply
state-of-the-art
orchards,
(19,000 acres) of company owned and
facility at Carina West near
processing
leased almond orchards and land suitable
Robinvale, Victoria and our value-added
for planting. These orchards, plus other
in the
processing facility at Thomastown
independent orchards, supply our state-of-
Northern Suburbs of Melbourne.
the-art processing facility at Carina West
near Robinvale, Victoria and our value-added
Our Carina West processing facility has the
processing facility at Thomastown in the
capacity to process above 30,000Mt of
Northern Suburbs of Melbourne. Our
almonds in the peak season and is capable of
Carina West processing facility has the
meeting the ever increasing demand for in-
capacity to process 25,000 MT of almonds
shell, kernel and value-added product. Our
in the peak season and is capable of meeting
processing plant in Thomastown processes
the ever increasing demand for in-shell,
over 10,000Mt of product per annum.
kernel and value-added product. Our
processing plant in Thomastown processes
Export
over 10,000 MT of product per annum.
Select Harvests is one of Australia’s largest
almond exporters and continues to build
Export
fast growing
strong relationships
Select Harvests is one of Australia’s largest
India and China, as well as
markets of
almond exporters and continues to build
maintaining established routes to markets in
strong relationships in the fast growing
Asia, Europe and the Middle East.
markets of India and China, as well as
Our Brands
maintaining established routes to markets
in Asia, Europe and the Middle East.
The Select Harvests Food Division provides a
capability and route to market domestically
Our Brands
and around the world for processed almonds
The Select Harvests Food Division provides
and other natural products. It supplies both
a capability and route to market domestically
branded and private label products to the key
and around the world for processed almonds
retailers, distributors and industrial users. Our
and other natural products. It supplies both
market leading brands are: Lucky, NuVitality
branded and private label products to the key
and Sunsol in retail; Renshaw and Allinga Farms
retailers, distributors and industrial users. Our
in wholesale and industrial markets.
market leading brands are: Lucky, NuVitality,
In addition to almonds, we market a broad
Sunsol, Allinga Farms and Soland in retail;
range of snacking and cooking nuts, health
Renshaw and Allinga Farms in wholesale and
mixes and muesli.
industrial markets. In addition to almonds,
we market a broad range of snacking and
Our Vision
cooking nuts, health mixes and muesli.
To be a leader in the supply of better for you
plant-based foods.
Our Vision
For Select Harvests to be recognised
as one of Australia’s most respected
agrifood businesses.
in the
Select Harvests Annual Report 2020 4
4
Contents
Contents
3 Company Profile
4 Contents
1 Company Profile
5 Performance Summary
2 Contents
6 Chair & Managing Director’s Report
3 Performance Summary
12 Almond Division
4 Chairman & Managing Director’s Report
13 Food Division
8 Strategy
14 People & Diversity
10 Almond Division
14 Communities
Food Division
11
14 OH&S
12 People & Diversity
14 Sustainability & Environment
12 Communities
16 Executive Team
12 OH&S
17 Board of Directors
12 Sustainability & Environment
18 Historical Summary
14 Executive Team
19 Financial Report
15 Board of Directors
20 Directors' Report
16 Historical Summary
28 Remuneration Report
Financial Report
17
40 Auditor’s Independence Declaration
18 Directors’ Report
41 Annual Financial Report
24 Remuneration Report
43 Statement of Comprehensive Income
37 Auditor’s Independence Declaration
44 Balance Sheet
38 Statement of Comprehensive Income
45 Statement of Changes in Equity
39 Balance Sheet
46 Statement of Cash Flows
40 Statement of Changes in Equity
47 Notes to the Financial Statements
Statement of Cash Flows
41
77 Directors' Declaration
42 Notes to the Financial Statements
Independent Auditor’s Report
78
71 Directors’ Declaration
85 ASX Additional Information
72
Independent Auditor’s Report
87 Corporate Information
79 ASX Additional Information
81 Corporate Information
Using technology to improve
water efficiency
Making the best use of the water
available to our orchards is vital
for productivity and
cost-efficiency. Technology to
help us achieve this has been
evolving rapidly. Several of our
orchards are now using data from
Phytech to deliver the precise
amount of water required, when
it is needed, avoiding run-off.
Amaroo Farm
Amaroo in South Australia has
saved over 600 megalitres of
water a year, amounting to cost
savings of more than $250,000
using this data driven approach.
BELOW: Amaroo farm data transmitter locations
Select Harvests Annual Report 2020 Performance Summary
5
Results - Key Financial Data
$'000 (EXCEPT WHERE INDICATED)
REPORTED RESULT (AIFRS)
VARIANCE
VARIANCE (%)
Revenue
Almond Crop Volume (Mt)
Almond Price (A$/kg)
EBITDA1
Depreciation and Amortisation
EBIT1
Almond Division
Food Division
Corporate Costs
Total EBIT1
Interest Expense
Profit Before Tax
Tax Expense
Net Profit After Tax (NPAT)
Earnings Per Share (EPS) (cents)
Dividend Per Share (DPS) - Interim (cents)
Dividend Per Share (DPS) - Final (cents)
DPS - Total (cents)
Net Debt (inc. lease liabilities)
Gearing (inc. lease liabilities)
Share Price (A$/Share as at 30 September)
Market Capitalisation (A$M)
(50,211)
560
(1.10)
(37,410)
(3,929)
(40,428)
(1,663)
752
(41,339)
1,893
(39,446)
11,425
(28,021)
(16.8%)
2.5%
(12.8%)
(39.3%)
(26.0%)
(49.2%)
(33.2%)
10.5%
(51.6%)
47.8%
(51.8%)
49.5%
(52.8%)
(29.5)
(53.2%)
FY2020
248,262
23,250
7.50
57,783
(19,057)
41,807
3,348
(6,429)
38,726
(2,064)
36,662
(11,661)
25,001
26.0
9
4
13
322,311
79.6%
5.57
538.3
FY2019
298,474
22,690
8.60
95,193
(15,128)
82,235
5,011
(7,181)
80,065
(3,957)
76,108
(23,086)
53,022
55.5
12
20
32
27,426
6.6%
7.69
736.2
Note:
It should be reiterated that, as is always the case at the time the Company develops the crop value estimate, there is the potential for changes to occur both in yield outcomes
(as the crop harvest and processing progress) and the pricing environment (driven by almond market or currency) shift.
Definitions:
1 EBITDA & EBIT are Non-IFRS measures used by the company are relevant because they are consistent with measures used internally by management and by some in the investment
community to assess the operating performance of the business. The non-IFRS measures have not been subject to audit or review.
BELOW: Data collected from the trees delivers the precise amount of water into the root zone
Select Harvests Annual Report 2020
While sales were higher for our Industrial
value-added segment
in FY2020, higher
private label penetration and commodity
costs negatively
the overall
segment result. We expect volumes to
increase in 2021. Our focus will be to expand
our existing customer base.
impacted
The external environment this year has clearly
shown how unpredictable events can and
do occur, emphasising the importance of a
sound business base, flexible thinking and
understanding the things we can control.
Accordingly, Select Harvests is focused on
the key internal value drivers of our business
and remains committed to our long-term
growth strategy.
To this end, on 1 October 2020 Select
Harvests announced it had entered into an
Implementation Deed and Sale Agreements
1,566ha Piangil Almond
to acquire the
Orchard, along with a $120 million capital
raising to assist in funding the acquisition.
Anticipated to be completed in the 3rd week of
December 2020, this exciting development will
add significant scale to our orchard portfolio.
FINANCIAL PERFORMANCE
Select Harvests produced a reported Net Profit
After Tax (NPAT) of $25.0 million and Earnings
per Share (EPS) of 26 cents per share (cps).
FY2020 operating cash flow was $13.2 million.
This was impacted as a result of COVID-19
market access issues and related timing of
customer payments (to flow through in H1
FY2021). The company paid a total dividend
of 13cps (comprising an interim dividend of
9cps on 3 August 2020 and a final dividend
of 4cps to be paid on 5 February 2021). At 30
September 2020, Net Bank Debt (excluding
lease liabilities) was $57.5 million and Net Bank
Debt to Equity was 14.2%.
6
Chair & Managing Director’s Report
FY2020 has been a year of internal
achievements and external challenges for
Select Harvests.
Like businesses the world over we have been
impacted by the COVID-19 global pandemic,
although when COVID arrived we were quickly
declared an essential food producer. At this
point the 2020 crop harvest was well underway
and we were commencing the processing of a
record 23,250Mt 2020 almond crop.
Select Harvests’ almond orchards are in three
Australian states that were quickly subject to
border closures, limiting movement. Our food
processing facilities and head office are at
Thomastown in Melbourne, Victoria, a city that
by November 2020 was just emerging from
two extensive lockdown periods.
While the federal and state governments
moved relatively quickly to ensure that
employees in essential industries could go
about their work with fewer restrictions
than the general public, the pressure on
our employees and their families has been
enormous. It is to their great credit that the
team of people who make up Select Harvests
responded quickly, at every level, to adapt
operations to the new environment. It meant
that harvest was completed, all almond and
food processing facilities were kept going,
sales and shipping of product went ahead.
Timing is important in sales of agricultural
for
products. Select Harvests’
marketing our 2020 crop secured significant
early sales commitments.
strategy
In the beginning stages of the pandemic, short-
term reduction in export demand caused buyers
to delay shipments from Australia, although by
July Select Harvests was able to report that our
customers had commenced taking shipments at
near normal levels.
Forecasts of a record U.S. almond crop and
aggressive selling by some marketers around
mid-year resulted in a significant softening of
prices, however Select Harvests’ early sales
insulated our results from the worst of this
price drop. Our sales campaign is complete,
leaving no carry-out almond stock, which is a
substantial achievement.
The upside from almond prices falling to
historic 10-year lows was a significant uplift
in short-term demand, with early indications
of price recovery. Select Harvests’ ability to
optimise our almond yields, manage costs &
inputs and add value to our growing almond
crop, through our Carina West Value-Adding
Almond Processing Facility, will position the
company well as the market recovers.
While the impact of the ongoing pandemic
remains unpredictable, early market access
interruptions have now
subsided, with
increased momentum evident towards the
end of FY2020.
The Food Division continues to operate in a
challenging domestic market. We are seeing
strong underlying demand, both domestically
food manufacturers,
and overseas,
confectioners and consumers for our value-
added industrial almond products.
from
Select Harvests Annual Report 2020 Business Highlights
7
Earnings Before Interest
Tax Depreciation and
Amortisation (EBITDA)
of $57.8 million
Net Profit After
Tax (NPAT)
of $25.0 million
Total dividend
payment of
13cps fully franked
Almond Crop:
23,250Mt
up 560Mt
Average SHV
Almond price
A$7.50/kg
Net Bank Debt
to Equity: 14.2%
Safety Record: Total
Recordable Incidents
down 23%
Agreement to acquire
Piangil Almond Orchard
(October 2020): 1,566ha planted
(1,177ha mature & 389ha immature)
and 1,877ML of high reliability
water entitlements for A$129m
Capital raising of A$120m
(October 2020): A$38.7m
retail entitlement offer and
A$81.3m institutional placement
and entitlement offer
Select Harvests Annual Report 2020 8
Chair & Managing Director’s Report
Continued
ALMOND DIVISION
FOOD DIVISION
The Almond Division delivered Earnings Before
Interest and Tax (EBIT) of $41.8 million in FY2020.
A record 2020 almond crop volume of 23,250Mt
(2019 crop 22,690Mt) represented the third
consecutive year of increasing harvests, although
the production increase was offset against lower
almond prices and higher water costs.
In general, all orchard age cohorts across
all Select Harvests’ growing regions yielded
at levels higher than industry average. The
third consecutive year of increasing yields
is very pleasing, validating the company’s
targeted horticulture program and on-farm
investments in risk-mitigating frost fans and
productivity-enhancing technology.
Cost management continued to be a focus
during FY2020, with total almond production
costs per kilogram (excluding the impact of
higher water prices) increasing by 6.5%. Our
industry benchmarking activities indicate that
Select Harvests remains in the bottom quartile
of almond farming and processing costs
globally – a most favourable position.
Recent investment in technology at our Carina
West Value-Adding Almond Processing Facility
has resulted in improved efficiency, higher
quality, and lower processing costs per kilogram.
USD almond prices softened on the back
of a record 2020 U.S. almond crop estimate
and challenges relating to COVID-19 market
access. Due to the timing and strategy of Select
Harvests’ FY2020 marketing program we were
able to secure significant sale commitments
prior to prices softening, achieving an average
sale price of A$7.50/kg.
The water market remained challenging for
the 2020 season, with record, or near record,
water prices across the Murray-Darling Basin.
Select Harvests’ water strategy is to meet our
annual surface water requirements through a mix
of 1/3rd ownership/control of water entitlements,
1/3rd long term leases of water entitlements and
1/3rd purchases of annual allocation water on
spot markets. This water strategy enabled us to
limit the financial impact of higher water prices
during the 2019/20 water season.
The start of the 2020/21 water season has
featured higher annual water market allocations
and a movement of water prices back towards
long-term averages. We have been acquiring
lease and temporary water in recent months
given the favourable market conditions.
The Murray-Darling Basin water markets inquiry
interim report was released by the Australian
Competition & Consumer Commission (ACCC)
on 30 July 2020. Select Harvests is pleased
to see that the ACCC has taken on board the
feedback we provided in our initial submission
to the inquiry. The ACCC’s preliminary view is
that the current governance of the Basin and the
regulatory frameworks for water trading do not
meet standards expected in modern markets.
Select Harvests has provided feedback on the
interim report, with a final ACCC report due by
February 2021.
The Food Division produced an EBIT of $3.3
million in FY2020. While sales were higher for
our value-added Industrial segment in FY2020,
higher consumer private label penetration
and commodity costs negatively impacted the
overall result.
In FY2020 there was further investment in the
Sunsol and Lucky brands, with new national
ranging of products achieved. Sunsol domestic
sales growth was strong, with very positive
early responses from major customers to our
new product development.
Consumer demand for healthier food products
is growing in Asian markets. These markets
remain a focus for Select Harvests. However,
our in-country export market development
was held back in FY2020 due to COVID-19
related travel restrictions.
The Thomastown processing facility, warehouse
and corporate office lease expires on 30 June
2022 and as advised previously, Management is
currently undertaking a comprehensive review
of the Food Division. This review covers both
strategic growth options and supply chain
solutions to support the various options under
consideration. The review is expected to be
concluded by the end of 2020.
SAFETY, SUSTAINABILITY & WELLBEING
Select Harvests’ number one objective is to
ensure the safety of our people, by preventing
injuries before they occur. The aim of the Select
Harvests Zero Harm Safety and Wellbeing
strategy is to improve our safety performance
by 15% per annum until we operate in a zero-
harm environment. Overall, total recordable
incidents reduced by 23% in FY2020.
Due to the COVID-19 global pandemic, Select
Harvests was designated by government as
a ‘permitted business’, with no restrictions
other than the requirement to operate under
a ‘COVID-19 Safe Plan’. We have been able to
operate throughout the pandemic period and
during the Stage 4 Victorian lockdown.
Appropriate protocols and procedures have
been put in place to protect our employees
and manage the health and wellbeing risks
associated with COVID-19.
MARKET OUTLOOK
The estimated record 2020 U.S. almond crop
of 3.0 billion pounds (1.4 million tonnes) and
challenges relating to market access due to
COVID-19 resulted in a significant softening of
the almond price in mid-2020.
Amidst this, global demand for healthy plant-
based foods, like almonds, continues to grow.
Recent monthly U.S. almond shipment data
shows that demand responded strongly to
historic 10-year low almond prices, with record
monthly shipments to key world markets, India
in particular. This represents significant growth
in consumptive demand and should avoid any
large, long-term surplus remaining in the market.
Select Harvests’ next crop will begin harvest in
February 2021, with early deliveries reaching
the market in April. By this time, a more
definitive market and pricing environment is
likely to have appeared, supporting our next
marketing campaign.
STRATEGY
The underlying fundamentals of our business
remain
for almonds,
including raw almonds and value-added
almond products, is increasing globally.
strong. Demand
Achieving consistent high yielding performance
from our mature almond orchards and efforts
to increase immature yields underpins the
multi-year growth strategy for Select Harvests.
Our strategic priority to
‘Optimise the
Almond Base’ has been further strengthened
with the October 2020 agreement to acquire
the Piangil Almond Orchard.*
Select Harvests’ average orchard age, with
the inclusion of Piangil, is 12.3 years, with 95%
of current planted hectares cash generative.
Almond orchards remain economically viable
for +25 years, providing Select Harvests with a
solid foundation for long term growth.
Demand for value-added industrial almond
products has been increasing in recent years.
Not only are these products sold at a premium
to other almonds, but demand is more stable
and
less price sensitive, as value-added
almond products are often a key ingredient
in consumer plant-based food and beverages,
like almond milk.
Select Harvests’ strategic investment in our
Carina West Almond Value-Adding Facility is
targeted at meeting these trends. We will look
to make further strategic capital investments
in our Carina West Facility, as the demand for
innovative and value-added almond products
is increasing.
Optimising our almond based business
through increased productivity and achieving
sustainably high yields remains our key
strategic objective. We continue to assess
options to increase our almond production
base through acquisitions if suitable orchards
become available. We also continue to assess
opportunities to diversify into other tree nuts,
where we can utilise our expertise around
multi-site orchard management, processing,
and strategic marketing.
* On 1 October 2020 Select Harvests entered into an
Implementation Deed and Sales Agreement to acquire
the Piangil Almond Orchard. The transaction is subject to
a number of conditions, with the acquisition expected to
be completed in the 3rd week of December 2020
Select Harvests Annual Report 2020
9
THANK YOU
This year has had its challenges, yet the
business has emerged with newfound
strength in adaptability and innovation. We
have achieved another consistent high yielding
performance from our almond orchards in
2020 and water availability is positive leading
into the summer irrigation season.
The core fundamentals of our business and
industry remain strong and have given Select
Harvests the confidence to expand and raise
capital. We remain committed to executing
on our growth strategy, underpinned by
a world class portfolio of almond assets.
As one of the world’s largest vertically
integrated value adding almond producers,
Select Harvests is well positioned to take
advantage of the growing demand for plant-
based foods.
We would like to thank our shareholders,
suppliers and employees for their support and
commitment during the current pandemic.
We are in a period of considerable, sustained
business growth that should make for an
exciting journey over 2021 and beyond.
Michael Iwaniw, Chair
SOURCE: COMPANY DATA
Feb Apr Jun
2020
Aug Oct
Paul Thompson, Managing Director
Commodity Price Trend 2016-2020 - AUD$/KG CFR
$20.00
$18.00
$16.00
$14.00
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$-
Feb
Apr Jun
Aug Oct
Dec
Feb
Apr Jun
Aug Oct
Dec
Feb
Apr Jun
Aug Oct
Dec
Feb
Apr Jun
Aug Oct
Dec
2016
2017
2018
2019
Vietnamese
Cashew WW320
Pistachio
Inshell R&S
California
Walnuts LH&P
Almond
Kernel SSR
SHV Theoretical Harvest Volume 2021 – 2028*
SOURCE: COMPANY DATA
+19%
+33%
)
s
e
n
n
o
t
(
e
m
u
o
V
l
0
0
7
,
5
1
0
9
6
,
2
2
0
5
2
,
3
2
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY25
FY26
FY27
FY28
Yield from
Existing Portfolio†
Yield from Committed
& Immature New Plantings†
Piangil
Orchard‡
* The almond crop is biennial in nature with expected +/- 10% per annum variation in tonnage.
† Assuming a 3.3Mt per ha (1.3Mt per acre) maturity profile for Select Harvests orchards and immature yields
based on the average of the 2019 and 2020 crops.
‡ Assuming a 3.5Mt per ha (1.4Mt per acre) maturity profile for Piangil Orchard.
Select Harvests Annual Report 2020
10
In control of our destiny
In control of our destiny
In control of our destiny
Select Harvests – In control of Our Destiny
VISION
To be a Leader in the Supply of Better for You Plant Based Foods
VALUES
STRATEGIC
PRIORITIES
THE PATHWAY
TO ACHIEVING
OUR VISION
OPERATIONAL
FOCUS
WHAT WE DO
EVERYDAY
TRUST AND
RESPECT
INTEGRITY AND
DIVERSITY
SUSTAINABILITY
PERFORMANCE
INNOVATION
DO THE
RIGHT THING
BE ONE
TEAM
PROTECT AND
GROW
OWN IT
THINK OUTSIDE
THE SQUARE
Optimise the Almond Base
Increase productivity and achieve
sustainably high yields from our growing
almond orchard base
Grow our Brands
Grow our consumer and industrial
brands, aligned to the increasing
consumption of plant based foods
Expand Strategically
Pursue value accretive acquisitions that
align with our core competencies in the
plant based agrifoods sector
Customers
Exceed our current
customer’s expectations and
grow our customer base,
focused on the Asian
marketplace almond
orchard base
Supply Chain
Optimise our end-to-end
supply chain to achieve
maximum value for the
business as a whole
People
Focus on a safe working
environment, well-being,
company culture, leadership
development and staff
training, attraction
and retention
Capital
Target capital discipline,
balance sheet strength,
superior shareholder returns
and long term growth
GOAL
Sustainable Shareholder Value Creation
LEFT: Compost rows at Carina
West
Our work has demonstrated that
LEFT: Compost rows at Carina
carbon-based fertiliser is able to be
West
used at scale in our orchards and has
the potential to recycle most of our
Our work has demonstrated that
hull waste.
carbon-based fertiliser is able to be
used at scale in our orchards and has
the potential to recycle most of our
hull waste.
RIGHT: Upul Gunawardena
TECHNICAL OFFICER,
CARINA WEST
RIGHT: Upul Gunawardena
“We have created a closed loop by
TECHNICAL OFFICER,
using the waste hull ash from the
CARINA WEST
CoGen power plant, which is high in
potassium, as an important
“We have created a closed loop by
ingredient to our fertiliser program.
using the waste hull ash from the
CoGen power plant, which is high in
All natural, recycled and low cost,
potassium, as an important
our fertiliser program is the only
ingredient to our fertiliser program.
project of it's kind in the almond
industry, world wide.”
All natural, recycled and low cost,
our fertiliser program is the only
project of it's kind in the almond
industry, world wide.”
CASE STUDY
Carbon Based Fertiliser
Sustainable Almond
Production
Select Harvests is using a waste product from its almond
production to replace expensive chemical fertilisers in its
orchards, increasing soil nutrient balance and carbon level
and reducing our carbon footprint.
More than 70% of the almond fruit we harvest is hull (the
hard outer shell), which is inedible for humans and when
stored can become a fire risk. While some of this waste has
traditionally been sold as cattle feed, demand for this varies
considerably and we wanted to find a better solution.
Co-Gen Power Plant
In 2018, commissioning was completed on our co-
generation plant to power our operations by burning the
hull waste. We quickly realised that there could be other
benefits as well - a by-product of the co-generation process
is considerable quantities of ash, which contains a high
percentage of potassium as well as other nutrients.
High Grade Ash
We developed a process to convert the ash into a high-
grade carbon based fertiliser that could be used on our
almond orchards. Working with our South Australia
partners, Rash Engineering, our technical team developed a
method to deliver this fertiliser direct to the rootzone of the
almond trees.
Research findings have confirmed that the application of soil
carbon significantly improve the soil health, which in turn
improves the almond quality and yield, reduces the aging
process of the crop and suppresses various soil borne
disease organisms.
Key benefits include:
(a) Replacement of 25-30% of expensive imported chemical
fertilisers with recycled nutrients
(b) Moderates soil structure, through retention of nutrients,
soil moisture & temperature
(c) Is reducing erosion
(d) Increases soil carbon level
(e) Eliminates almond waste into land fill
(f) Significant reduction in the carbon footprint of
almond production
(g) Improved soil health, root biology & crop health
(h) Improved Select Harvests long term asset value
Our work to date has demonstrated that carbon-based
fertiliser is able to be used at scale in our orchards and has
the potential to recycle most of our hull waste. At present it
has enabled us to replace up to 30% of expensive imported
chemical fertiliser in our orchards, and significantly improve
soil health, root biology and crop health. At the same time,
it has been cost-neutral – a real win-win for our business
and the environment!
Select Harvests Annual Report 2020
11
CASE STUDY
Carbon Based Fertiliser
Sustainable Almond
Production
Select Harvests is using a waste product from its almond
production to replace expensive chemical fertilisers in its
orchards, increasing soil nutrient balance and carbon level
and reducing our carbon footprint.
More than 70% of the almond fruit we harvest is hull (the
hard outer shell), which is inedible for humans and when
stored can become a fire risk. While some of this waste has
traditionally been sold as cattle feed, demand for this varies
considerably and we wanted to find a better solution.
Co-Gen Power Plant
In 2018, commissioning was completed on our co-
generation plant to power our operations by burning the
hull waste. We quickly realised that there could be other
benefits as well - a by-product of the co-generation process
is considerable quantities of ash, which contains a high
percentage of potassium as well as other nutrients.
High Grade Ash
We developed a process to convert the ash into a high-
grade carbon based fertiliser that could be used on our
almond orchards. Working with our South Australia
partners, Rash Engineering, our technical team developed a
method to deliver this fertiliser direct to the rootzone of the
almond trees.
Research findings have confirmed that the application of soil
carbon significantly improve the soil health, which in turn
improves the almond quality and yield, reduces the aging
process of the crop and suppresses various soil borne
disease organisms.
Key benefits include:
(a) Replacement of 25-30% of expensive imported chemical
fertilisers with recycled nutrients
(b) Moderates soil structure, through retention of nutrients,
soil moisture & temperature
(c) Is reducing erosion
(d) Increases soil carbon level
(e) Eliminates almond waste into land fill
(f) Significant reduction in the carbon footprint of
almond production
(g) Improved soil health, root biology & crop health
(h) Improved Select Harvests long term asset value
Our work to date has demonstrated that carbon-based
fertiliser is able to be used at scale in our orchards and has
the potential to recycle most of our hull waste. At present it
has enabled us to replace up to 30% of expensive imported
chemical fertiliser in our orchards, and significantly improve
soil health, root biology and crop health. At the same time,
it has been cost-neutral – a real win-win for our business
and the environment!
Select Harvests Annual Report 2020 12
Almond Division
2020 Crop EBIT Movement vs 2019 Crop EBIT ($M)
100
90
80
75
60
50
40
30
20
10
0
2019 Crop
EBIT
Almond
Volume
Almond
Price
Water
Cost
Orchard
Cost
Processing
Costs
Rents/
Depn/Other
2020 Crop
EBIT
2020 Crop - Cost Per KG (A$/KG)
+63.4%
0.93
0.57
Orchard
Water
Harvest
Rental
Processing Depn/Other
SOURCE: COMPANY DATA
2019 Crop
2020 Crop
+13.3%
5.36
4.73
Total
Production
Costs
2020 Yield Performance
MATURE
IMMATURE
e
r
c
a
/
g
k
1600
1400
1200
1000
800
600
400
200
0
1600
1400
1200
1000
800
600
400
200
0
Southern
Central Northern Overall
3rd Leaf
4th Leaf
5th Leaf
6th Leaf
Industry Standard Yield
SOURCE: COMPANY DATA
SOURCE: COMPANY DATA
The Almond Division delivered an EBIT
result of $41.8 million. Strong yields
and a record crop were offset against
lower almond prices and higher water
costs. The 2020 crop's total production
costs per kg increased by 13.3% (6.5%
excluding water costs)
technology
The 2020 crop volume of 23,250Mt was
up 560Mt on FY2019’s crop volume of
22,690Mt. This record result was due to
good growing conditions, the commitment
and dedication of our employees in
executing
targeted
the company’s
horticulture program, further investment
in frost fans mitigating the impact of
frost events on our trees and increased
adoption of on-farm
to
monitor and guide the performance of
our orchards.
The overall higher crop volume had a
positive impact on EBIT of approximately
$4.8 million. The positive impact of a
higher crop was offset by a reduction
in almond prices and higher water costs
which impacted EBIT by $25.0 million
and $8.7 million respectively.
Both our mature and immature orchards
continue to yield at a rate significantly
higher than industry standard yields.
The yield performance of our immature
greenfield orchards is particularly pleasing
and supports the long-term strategy to
grow our almond orchard base through a
combination of greenfield developments
and mature orchard acquisitions. Immature
orchards yielding above industry standard
delivered an additional 2,029Mt in FY2020.
Higher water prices increased water costs
per kilogram by 63.4%, accounting for
approximately 17.4% of total per kilogram
crop production costs in FY2020. Another
year of yield outperformance and Select
Harvests’ balanced water ownership
strategy helped contain the overall impact
of higher water prices on our per kilogram
crop production costs, which increased by
13.3% compared to the 2019 crop.
Hulling and shelling was completed in
mid-October and crop quality was similar
to last year. Sorting and packing continues.
in new sorting
Recent
technology and
factory productivity
improvements will pay dividends as
Select Harvests crop volume increases
in the coming years.
Water is a critical input for the ongoing
health and productivity of our trees.
With our increasing productive acreage,
improving water use efficiency, along with
the use of on-farm technology, remains a
key focus of our experienced water team.
In FY2020 we remained below our water
use budget across our orchard portfolio.
The targeted use of water to consistently
maximise yield potential is a key focus
moving forward.
investment
Select Harvests Annual Report 2020 13
Sunsol sales growth was particularly strong,
with sales increasing by 45% in FY2020. Further
development of our PRO-biotic range was
well received by our major retail customers,
with national ranging achieved. An extensive
Sunsol’s
marketing campaign,
first ever TV advertising, delivered strong
consumer engagement.
including
are
being
International
opportunities
pursued across both our
industrial and
consumer Food segments. In country export
market development was held back in the
second half of FY2020 due to COVID-19 related
travel restrictions.
Select Harvests’ lease on the Thomastown
processing facility is due to expire on 30 June
2022. The facility primarily processes our
Lucky and Sunsol consumer product ranges
and private
label consumer products, as
well as housing Select Harvests Melbourne
based corporate staff and a warehouse. A
comprehensive review of strategic growth
options and supply chain solutions for the Food
Division was commenced in FY2020 and is
expected to be concluded by the end of 2020.
Food Division
The Food Division delivered an EBIT result
of $3.3 million.
Food Division
The
result was below
expectations. Strong demand for Industrial
value-added almond products was not enough
to offset the margin impacts of higher overall
imported non-almond commodity
input
costs and ongoing domestic private label
penetration in branded nuts.
increased
in
The Industrial business sales
FY2020, accounting for over 25% of Select
Harvest’s 2020 almond crop. Value-added
industrial almonds are a key ingredient in an
increasing number of consumer products.
These value-added almonds both sell at a
premium, and are less price elastic, than raw
almonds.
Recent investments in the Carina West Value-
Adding Facility will enhance our capacity to
produce industrial almond products thereby
increasing the value of the lower grade portion
of our crop.
The core Lucky cooking range is performing
well in Woolworths with 6 additional products
being ranged in the last quarter and has
been supported by an
interest
in consumers home baking activity due to
COVID-19 related lockdowns. Lucky snacking
nut product deletions in Coles and ongoing
private label penetration resulted in a reduction
in branded snacking sales in FY2020.
increased
ABOVE: Sunsol Kids PRO-biotic cereals
To develop our Sunsol Kids PRO-biotic Cereals we conducted consumer research to understand
what parents and kids wanted in a cereal. We then formulated our product and developed a set of
clear messages for the packaging which aligned with the research results.
The company has sold or committed for
sale 82% of the FY2020 crop with most of
the balance held to cover internal value-add
processing requirements. An average price of
A$7.50/kg will be achieved, 12.8% lower than
the FY2019 almond price of A$8.60/kg.
82% OF THE
FY2020 CROP SOLD
OR COMMITTED
FOR SALE
The recent change in financial year, to
better align the company’s reporting cycle
with the almond crop cycle, has resulted
in no prior year crop adjustments being
required in FY2020.
No new almond orchard planting, or
replanting, was conducted
in FY2020.
Subject to the completion of the October
2020 acquisition of the Piangil Almond
Orchard, Select Harvests’ almond orchard
portfolio will increase from 7,696ha (19,016
acres) to 9,262ha (22,886 acres).
The tree health and outlook for Select
Harvests’ FY2021 crop remain positive,
following good pollination and growing
conditions to date. There has only been
one significant frost event, which was
mitigated by our frost fans. Good seasonal
rainfall has led to higher allocations and
lower temporary water costs. Given Select
Harvests’ high levels of 2019 carry-over
water and higher lease costs the benefit
of this lower pricing will flow through in
FY2021 and the majority in FY2022.
Market pricing will remain somewhat
uncertain until a clearer picture of Californian
almond shipments emerges at the end of 2020.
A record 2020 U.S. crop of 3 billion pounds,
significant 2019 U.S. crop carryover, a
strengthening AUD and the ongoing market
access impacts of COVID-19 are all factors that
will impact the 2021 global almond price.
Global demand for almonds has responded
well to the lower almond price environment.
Raw almond shipments to key consumer
markets like India and China are significantly
higher than prior periods. The inclusion of
value-added almonds as a key ingredient
in consumer products
is growing as
consumers become more conscious of their
food choices, and demand healthier options.
Select Harvests
is one of the world’s
largest almond producers, with a world
class portfolio of high performing almond
leading value-
industry
orchards and
added processing capabilities. We provide
millions of consumers around the world
with high quality, healthy, nutritious
Australian grown and processed almonds,
both in their raw form and increasingly
as value-added inputs to a wide range of
healthy plant-based food products.
Select Harvests Annual Report 2020 14
A sustainable, growing business
PEOPLE & DIVERSITY
Select Harvests recognises the advantages
of having an inclusive and diverse workforce.
We aim to offer a supportive and engaging
work environment that enables employees
to develop their careers and be rewarded for
their contributions to our success. We always
expect our people to maintain high work
and quality standards, whilst maintaining a
relentless commitment to safety.
We employ 533 employees (full time equivalent,
as at 30 September 2020), including executive,
permanent, contractor and seasonal (casual
and agency labour hire) personnel throughout
regional and metropolitan Australia.
We had no incidents of bullying during the year.
Select Harvests’ Inclusion & Diversity objectives
are to recruit, develop and retain talent, whilst
building and maintaining a flexible workplace.
Our Diversity Policy is available on the company
website, along with Diversity reporting, which
is included in the 2020 Corporate Governance
Statement. See Governance section:
www.selectharvests.com.au/governance
One characteristic of our diversity is the
significantly different ethnicities we employ.
We are proud to partner with indigenous and
islander education and employment programs,
in addition to employing people from Asia Pacific
and European countries in our workforce.
In addition to ethnic diversity, we continue to
maintain a focus to increase female participation,
with this year’s participation level at 31%, against
a target of 33% overall. Whilst the result was on
par to the previous year, there was an increase
in females in managerial roles. The Workplace
Flexible Arrangements Policy was reviewed
and significantly, as a key policy to enabling the
attraction and retention of females.
COMMUNITIES
Select Harvests is a significant employer and
active member in its local communities in
regional Victoria, South Australia, New South
Wales and the Northern Metropolitan area in
Melbourne. This year, it was decided to make
a significant contribution to the bushfire affected
communities in the regional areas where Select
Harvests operates. A contribution of $100,000
will be made by the Company to relevant fire
services. In addition, Select Harvests has matched
all contributions submitted by employees, to
various registered charities, in support of the
rebuilding work following the bushfires.
OH&S
Focus continues towards achieving Zero Harm,
with annual targets to improve year on year
performance by driving a 15% reduction in the
number of incidents, injuries and injury severity
and a 15% increase in hazards identified and
resolved, to prevent harm.
The key focus for the year has predominantly
been to ensure the safety and wellbeing of our
employees, during the COVID-19 pandemic,
whilst not diverting our attention from key risk
areas in the business.
The key strategic priorities for the year were:
1. COVID-19 Management & Response Plan
2. Process improvement and
System Implementation
3. Building on Safety Culture and
Safety Leadership
4. Targeted Employee health and
wellbeing programs
The key activities implemented included:
• Activating and continually updating the
COVID-19 Management and Response Plan
• Implementing
support
technology
compliance management and real time
incident and hazard reporting.
to
• Actioning process improvements in incident
investigation reporting and risk assessment.
the strong safety culture,
• Reinforcing
through
revised Company Values
and Behaviours, visible safety leadership,
including safety walks and frequent toolbox
training sessions and discussions.
the
• Supporting employee wellbeing through a
holistic wellness program (Global Challenge),
mental health first aid training for leaders,
increased counselling support through our
Employee Assistance Program (EAP) and
pulse check surveys for employees working
from home.
+60%
LTIFR
Lost Time Injury
Frequency Rate
-9%
-35%
-20%
MTIFR
Medically
Treated Injury
Frequency Rate
OCT 2018
-SEP 2019
LTISR
Lost Time Injury
Severity Rate
TRIFR
Total Recordable
Injury
Frequency Rate
OCT 2019
-SEP 2020
SOURCE: COMPANY DATA
SUSTAINABILITY & ENVIRONMENT
This year, Select Harvests has reviewed its
sustainability strategy and as part of that process,
aligned reporting with the Global Reporting
Initiative Standards as well as the United Nations
Sustainable Development Goals (SDGs). Both
provide a global framework that helps guide our
goals and objectives as a business.
There is a shortage of healthy food globally
and as a grower and marketer of nutrient
dense food products, we are well positioned
to help meet this growing demand.
To capitalise on this demand, we need to set our
goals and targets with a long-term lens as we
operate in an industry that requires commitment
and up to 25 years of foresight when expanding
almond operations.
Therefore, it is imperative that sustainability
be embedded into everything we do, which is
why we recognise it as a core value supporting
the delivery of our business strategy. This
sustainable approach to running our business
is essential to delivering on our key strategic
objectives;
• Optimise the almond base
• Grow our brands
• Expand strategically.
The Company is committed to minimising
the
its operations have on the
environment, with several projects activated
over the past two years, including reduction
of our carbon footprint. Our key focus areas
in 2020 were:
• Ensuring the safety of our people, by
preventing injuries before they occur. The
aim of Select Harvests’ Zero Harm Safety and
Wellbeing strategy is to improve our safety
performance by 15% per annum until we
operate in a zero-harm environment
impact
• Securing future water supply whilst being
a leader in the market for water efficiency.
We aim to manage our water efficiency
through best practice water delivery
systems, water optimisation technology
such as soil water monitoring, plant based
monitoring and high-resolution imagery
• Reducing our impact on the environment
across all aspects of the business. This is
achievable through the further investment in
sustainable projects (i.e. H2E co-generation
facility), bee stewardship, promoting a ‘recycle
first’ culture and transitioning to greener
inputs used throughout the value chain.
The 2019/20 Sustainability Report is available
on the company website:
www.selectharvests.com.au/sustainability
Our Environment and Sustainability Policy
and
its related procedures and systems
govern our wildlife management plan and
licensing requirements. A copy is available on
the Select Harvests website:
www.selectharvests.com.au/governance
Select Harvests is a signatory of the National
Packaging Industry Covenant, which aims to
deliver more sustainable packaging, increase
recycling rates and reduce waste. The
Company’s office and farm waste is recycled
where possible.
Select Harvests is subject to environmental
regulations under laws of the Commonwealth
and State Governments of Victoria, New South
Wales and South Australia. The Company
holds licences issued by the Environmental
Protection Authority (EPA) which specify
limits for discharges to the environment.
These licences regulate the management of
discharge to the air and stormwater runoff.
For FY2020, there were no environmental
breaches nor breaches of the Company’s
environmental licence conditions.
Select Harvests Annual Report 2020 15
Select Harvests Annual Report 2020 16
Executive Team
BRAD CRUMP
Chief Financial Officer and Company Secretary
Brad joined Select Harvests as Chief Financial Officer on 20 November 2017 and was appointed Company Secretary on 7 August
2018. He is a Certified Practising Accountant and has over 15 years experience in senior financial management. Most recently he has
been the CFO of Redflex Limited and previously gained extensive experience in agribusiness as CFO of Landmark (Australia’s largest
rural services provider) and senior roles within AWB Limited. He brings extensive agribusiness, agri services and related capital
management experience to the role.
BEN BROWN
General Manager Horticulture
Ben joined Select Harvests in 2014. Ben held the position of Project and Technical Manager of the Horticultural Division, before
being appointed General Manager Horticulture in April 2018. Ben is an Applied Science graduate with Honours in Soil Science
and has 20 years experience across perennial irrigated horticulture with expertise in: orchard development; production horticulture;
development of detailed RD&E strategies; and extension and technology transfer of best practice. Prior to joining Select Harvests,
Ben was the Industry Development Manager at the Almond Board of Australia and an irrigation and soil agronomist.
PETER ROSS
General Manager Almond Operations
Peter joined Select Harvests in 1999. He has held the positions of Plant Manager, Project Manager and General Manager for the
Processing area of the Almond Division, General Manager Horticulture and was appointed General Manager Almond Operations in
August 2017. Prior to joining Select Harvests, Peter ran his own maintenance and fabrication business servicing agriculture, mining
and heavy industry.
LAURENCE VAN DRIEL
General Manager Trading and Industrial
Laurence joined Select Harvests in 2000. Laurence has over 30 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.
SUZANNE DOUGLAS
General Manager Consumer
Suzanne joined Select Harvests in April 2019. Suzanne is a highly experienced, successful and senior manager who has extensive
experience in both the Australian and international Fast-Moving Consumer Goods Industry. Before joining Select Harvests, Suzanne
has led HJ Heinz Australia, and held senior management roles at Devondale Murray Goulburn and McPherson’s Consumer Products.
URANIA DI CECCO
General Manager People, Safety & Sustainability
Urania joined Select Harvests in July 2019. Urania is a highly experienced and commercial HR Leader, with a passion for helping
businesses transform to achieve success and sustainable growth through a capable, diverse and engaged workforce. She has
proven her adaptability to different industries, having worked in manufacturing, professional services and service and distribution.
Prior to joining Select Harvests, Urania was the Director of Human Resources for Cummins South Pacific. She also held the position
of Group General Manager, Human Resources at Crowe Horwarth and various senior HR roles at Amcor Australasia.
Select Harvests Annual Report 2020 Board of Directors
17
MICHAEL IWANIW
Chair
Appointed to the board on 27 June 2011 and appointed Chair 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. Michael was instrumental in the successful 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. Michael is the immediate
past Chair of Australian Grain Technologies and has extensive non-executive director experience with several listed and private
companies. He is a member of the Remuneration and Nomination Committee.
PAUL THOMPSON
Managing Director and Chief Executive Officer
Appointed as the Managing Director and Chief Executive Officer (MD) of Select Harvests Limited on 9 July 2012. Paul 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. He is a member of the Australian Institute of Company Directors and has formerly held
positions as a Director of the Food and Grocery Council and councillor in the Australian Industry Group.
MICHAEL CARROLL
Non-Executive Director
Joined the board on 31 March 2009. He brings to the Board diverse experience from executive and non-executive roles in food
and agribusiness. Current non-executive board roles include Rural Funds Management (RE for ASX: RFF; director since April 2010),
Paraway Pastoral Company, Australian Rural Leadership Foundation and Viridis Ag Pty Ltd. Previous board roles include Queensland
Sugar Limited, Elders Limited (ASX: ELD, 2018-2020), Tassal (ASX: TGR, 2014-2018), Warrnambool Cheese & Butter, Rural Finance
Corporation, Sunny Queen Farms and Meat and Livestock Australia. During his executive career Mike established and led the NAB’s
agribusiness division with earlier senior executive roles including marketing and investment and advisory services. He is Chair of the
Remuneration and Nomination Committee.
FRED GRIMWADE
Non-Executive Director
Appointed to the board on 27 July 2010. Fred is a Principal and Director of Fawkner Capital, a specialist corporate advisory and
investment firm. He is Chair of CPT Global Ltd (ASX: CGO; director since October 2002) and XRF Scientific Ltd (ASX: XRF; director
since May 2012) as well as being a director of Australian United Investment Company Ltd (ASX: AUI; director since March 2014)
and AgCap Pty Ltd. He was formerly Chair of Troy Resources Ltd (2013-2017), a non-executive director of AWB Ltd., and has held
general management positions with Colonial Agricultural Company, Colonial Mutual Group, Colonial First State Investments Group,
Western Mining Corporation and Goldman, Sachs and Co. He is a member of the Audit and Risk Committee.
NICKI ANDERSON
Non-Executive Director
Appointed to the board on 21 January 2016. Nicki Anderson is an accomplished leader and director with broad experience in strategy, sales,
marketing, licensing and innovation within branded food, beverage and consumer goods businesses both in Australia and Internationally
(including Coca Cola Amatil, Cadbury Schweppes, McCain, Nestle and Kraft). Nicki has held senior positions in marketing and innovation
within world class FMCG companies and was most recently Managing Director of the Blueprint Group concentrating on sales, marketing
and merchandising within the retail and pharmacy sales channels. Nicki is currently a Director of Mrs Mac’s, Australia Made Campaign
Limited, Prostate Cancer Foundation and ASX listed Funtastic (ASX: FUN; director since October 2018). She is Chair of the Remuneration &
Nomination Committee for both Mrs Mac’s Limited and Funtastic Limited. Nicki is a Member and Former Chair of the Monash University
Advisory Board for the marketing faculty. She is a member of the Remuneration and Nomination Committee.
FIONA BENNETT
Non-Executive Director
Appointed to the board on 6 July 2017. Ms Fiona Bennett is a Chartered Accountant and an experienced non-executive director
with an extensive background in business management, corporate governance, audit and risk. She is currently on the boards of
BWX Limited (ASX: BWX; director since December 2018) and Hills Limited (ASX: HIL; director since May 2010) and is also Chair of the
Victorian Legal Services Board. Ms Bennett has previously served on the board of Beach Energy Limited (2012-2017). She has held
senior executive roles at BHP Limited and Coles Limited and has been Chief Financial Officer at several organisations in the health
sector. She is Chair of the Audit and Risk Committee.
GUY KINGWILL
Non-Executive Director
Appointed to the board on 25 November 2019. Guy joins the Board with an extensive background in horticulture, international soft
commodity marketing and water investment and trading. He is currently on the Boards of Tasmanian Irrigation and ACMII Australia
1 Group and serves as the Chair of the Audit Committee at Tasmanian Irrigation. Guy has previously served as Managing Director of
Tandou Limited, and as a non-executive director of Lower Murray Water Urban and Rural Water Corporation. He is a member of the
Audit and Risk Committee.
Select Harvests Annual Report 2020 18
Historical Summary
Select Harvests consolidated results for years ended 30 September/June
$'000
(EXCEPT WHERE
INDICATED)
2009
2010
2011
2012
2013
2014*
2015
2016
2017
2018
2018†
2019
2020
YEAR/PERIOD ENDED
30 JUNE
30 JUNE
30 JUNE
30 JUNE
30 JUNE
30 JUNE
30 JUNE
30 JUNE
30 JUNE
30 JUNE
30 SEPT†
30 SEPT
30 SEPT
248,581
238,376
248,316
246,766
190,918
188,088
223,474
26,827
26,032
22,612
(2,495)
5,241
31,288
85,845
285,917
49,785
242,142
210,238
67,581
298,474
248,262
16,979
34,869
(1,052)
80,065
38,726
23,047
23,603
18,473
(8,743)
198
26,833
80,514
44,290
11,978
29,464
(2,089)
76,108
36,662
16,712
42.6
17,253
43.3
16.6
15.2
21
100
48.5
17,674
(4,469)
33.7
10.5
13
100
38.6
(7.9)
(2.8)
8
100
(101.3)
1.87
2.17
2.19
10.70
6.70
(0.4)
39.6
1.44
43.3
1.96
41.7
1.42
12
100
28.2
1.56
7.10
51.9
0.79
2,872
5.0
1.8
12
100
239.8
2.14
1.0
49.6
1.61
21,643
56,766
37.5
12.3
20
55
53.5
2.38
6.9
54.0
4.02
82.9
19.8
50
-
62.8
3.35
15.9
38.2
3.36
33,796
46.7
9,249
12.6
20,371
(1,536)
53,022
25,001
23.2
(1.6)
55.5
11.6
3.3
127.5
12.7
46
54
99.1
3.22
9.0
23.1
1.90
10
100
79.4
2.95
3.4
52.5
1.05
12
100
51.7
0
28
N/A
N/A
100
50.0
3.34
0.00
3.60
N/A
20.0
6.4
18.7
15.9
6.6
79.6‡
4.49
3.23
2.74
2.39
26.0
6.2
13
100
50.0
3.46
18.7
Total sales
Earnings before
interest and tax
Operating profit
before tax
Net profit after tax
Earnings per share
(Basic) (cents)
Return on
shareholders' equity
(%)
Dividend per ordinary
share (cents)
Dividend franking (%)
Dividend payout
ratio (%)
Financial ratios
Net tangible assets
per share ($)
Net interest cover
(times)
Net debt/equity
ratio (%)
Current asset ratio
(times)
Balance sheet data as at 30 September/June
Current assets
81,075
83,993
91,228
76,936
123,303
136,639
207,782
155,521
136,610
162,118
159,721
173,667
217,397
Non-current assets
133,884
145,612
214,352
202,371
180,542
194,080
280,130
294,251
343,081
354,435
362,900 379,190
607,497
Total assets
214,959
229,605
305,580
279,307
303,845
330,719
487,912
449,772
479,691
516,553
522,621
552,858
824,894
Current liabilities
102,348
58,469
Non-current liabilities
11,735
57,515
46,454
90,311
54,369
64,608
76,800
67,540
33,988
121,325
61,893
138,632
81,783
77,088
130,371
36,104
49,412
63,457
71,701
101,809
102,570
73,398
Total liabilities
114,083
115,984
136,765
118,977
144,340
155,313
200,525
158,871
202,072
137,913
151,982 136,854
91,062
328,822
419,884
Net assets
100,876
113,621
168,815
160,330
159,505
175,406
287,387
290,901
277,619
378,640
370,639 416,003
405,010
Shareholders' equity
Share capital
Reserves
Retained profits
Total shareholders'
equity
46,433
12,949
41,494
100,576
47,470
11,327
54,824
113,621
95,066
11,201
62,548
95,957
10,472
53,901
97,007
9,144
53,354
99,750
12,190
63,466
170,198
178,553
181,164
268,567
268,567
271,750
279,096
12,818
11,168
11,602
9,601
9,802
10,417
104,371
101,180
84,853
100,472
92,270
133,836
14,280
111,634
168,815
160,330
159,505
175,406
287,387
290,901
277,619
378,640
370,639 416,003
405,010
Other data as at 30 September/June
Fully paid shares
('000)
Number of
shareholders
Select Harvests' share price
39,519
39,779
56,227
56,813
57,463
57,999
71,436
72,919
73,607
95,226
95,226
95,737
96,637
3,296
3,039
3,227
3,359
3,065
3,779
4,328
8,908
11,461
11,943
11,884
10,331
11,258
- close ($)
2.16
3.46
1.84
1.30
3.27
5.14
11.00
6.74
4.90
6.90
5.32
7.69
5.57
Market capitalisation
85,361
137,635
103,458
73,857
187,904
298,115
785,796
491,474
360,674
657,059
506,602
736,218
538,268
* The 2014 result has been restated due to the early adoption of changes to Accounting Standards, AASB 116 Property, Plant and Equipment, and AASB 141 Agriculture, impacting 'bearer plants'.
As a result of implementation of AASB16 Leases on 1 October 2019, the Company recognised Right-of-use assets and lease liabilities in its books
† 3 month transition period
‡
Select Harvests Annual Report 2020
19
Financial Report
20 Directors' Report
28 Remuneration Report
40 Auditor’s Independence Declaration
41 Annual Financial Report
43 Statement of Comprehensive Income
44 Balance Sheet
45 Statement of Changes in Equity
46 Statement of Cash Flows
47 Notes to the Financial Statements
77 Directors' Declaration
78
Independent Auditor’s Report
85 ASX Additional Information
87 Corporate Information
RIGHT: The Murray River at Euston Lock
Select Harvests Annual Report 2020 20
Directors’ Report
The directors present their report together with the financial report of Select Harvests Limited and controlled entities (referred to
hereafter as the “Company”, “the Group” or “the consolidated entity”) for the year ended 30 September 2020.
DIRECTORS
The qualifications, experience and special responsibilities of each person who has been a director of Select Harvests Limited at any time during or
since the end of the financial year is provided below, together with details of the company secretary. Directors were in office for this entire period
unless otherwise stated.
NAMES, QUALIFICATIONS, EXPERIENCE AND SPECIAL RESPONSIBILITIES
M Iwaniw, B Sc, Graduate Diploma in Business Management, MAICD (Chair)
Appointed to the board on 27 June 2011 and appointed Chair 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.
Instrumental in the successful 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. Michael
is the immediate past Chair of Australian Grain Technologies and has extensive non-executive director experience with several listed and private
companies. He is a member of the Remuneration and Nomination Committee.
Interest in shares: 220,545 fully paid shares.
P Thompson, B Bus and MAICD (Managing Director and Chief Executive Officer)
Appointed as the Managing Director and Chief Executive Officer (MD) of Select Harvests Limited on 9 July 2012. Paul 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. He is a member of the Australian Institute of Company Directors and has formerly held positions as a Director of the Food and
Grocery Council and councillor in the Australian Industry Group.
Interest in Shares: 559,451 fully paid shares.
M Carroll, B Ag Sc, MBA and FAICD (Non-Executive Director)
Joined the board on 31 March 2009. He brings to the Board diverse experience from executive and non-executive roles in food and agribusiness.
Current non-executive board roles include Rural Funds Management (RE for ASX: RFF; director since April 2010), Paraway Pastoral Company,
Australian Rural Leadership Foundation and Viridis Ag Pty Ltd. Previous board roles include Queensland Sugar Limited, Elders Limited (ASX: ELD,
2018-2020), Tassal (ASX: TGR, 2014-2018), Warrnambool Cheese & Butter, Rural Finance Corporation, Sunny Queen Farms and Meat and Livestock
Australia. During his executive career Mike established and led the NAB’s agribusiness division with earlier senior executive roles including marketing
and investment and advisory services. He is Chair of the Remuneration and Nomination Committee.
Interest in Shares: 26,023 fully paid shares.
F S Grimwade, B Com, LLB (Hons), MBA, FAICD, SF Fin and FCIS (Non-Executive Director)
Appointed to the board on 27 July 2010. Fred is a Principal and Director of Fawkner Capital, a specialist corporate advisory and investment firm. He is
Chair of CPT Global Ltd (ASX: CGO; director since October 2002) and XRF Scientific Ltd (ASX: XRF; director since May 2012) as well as being a director
of Australian United Investment Company Ltd (ASX: AUI; director since March 2014) and AgCap Pty Ltd. He was formerly Chair of Troy Resources
Ltd (2013-2017), a non-executive director of AWB Ltd., and has held general management positions with Colonial Agricultural Company, Colonial
Mutual Group, Colonial First State Investments Group, Western Mining Corporation and Goldman, Sachs and Co. He is a member of the Audit and
Risk Committee.
Interest in shares: 92,699 fully paid shares.
N Anderson, B Bus, EMBA, GAICD (Non-Executive Director)
Appointed to the board on 21 January 2016. Nicki Anderson is an accomplished leader and director with broad experience in strategy, sales,
marketing, licensing and innovation within branded food, beverage and consumer goods businesses both in Australia and Internationally (including
Coca Cola Amatil, Cadbury Schweppes, McCain, Nestle and Kraft). Nicki has held senior positions in marketing and innovation within world class
FMCG companies and was most recently Managing Director of the Blueprint Group concentrating on sales, marketing and merchandising within the
retail and pharmacy sales channels. Nicki is currently a Director of Mrs Mac’s, Australia Made Campaign Limited, Prostate Cancer Foundation and
ASX listed Funtastic (ASX: FUN; director since October 2018). She is Chair of the Remuneration & Nomination Committee for both Mrs Mac’s Limited
and Funtastic Limited. Nicki is a Member and Former Chair of the Monash University Advisory Board for the marketing faculty. She is a member of
the Remuneration and Nomination Committee.
Interest in shares: 8,653 fully paid shares.
Select Harvests Annual Report 2020 21
NAMES, QUALIFICATIONS, EXPERIENCE AND SPECIAL RESPONSIBILITIES
F Bennett, BA (Hons), FCA, FAICD and FIML (Non-Executive Director)
Appointed to the board on 6 July 2017. Ms Fiona Bennett is a Chartered Accountant and an experienced non-executive director with an extensive
background in business management, corporate governance, audit and risk. She is currently on the boards of BWX Limited (ASX: BWX; director
since December 2018) and Hills Limited (ASX: HIL; director since May 2010) and is also Chair of the Victorian Legal Services Board. Ms Bennett has
previously served on the board of Beach Energy Limited (2012-2017). She has held senior executive roles at BHP Limited and Coles Limited and has
been Chief Financial Officer at several organisations in the health sector. She is Chair of the Audit and Risk Committee.
Interest in shares: 9,175 fully paid shares.
G Kingwill (Non-Executive Director)
Appointed to the board on 25 November 2019. Guy joins the Board with an extensive background in horticulture, international soft commodity
marketing and water investment and trading. He is currently on the Boards of Tasmanian Irrigation and ACMII Australia 1 Group and serves as the
Chair of the Audit Committee at Tasmanian Irrigation. Guy has previously served as Managing Director of Tandou Limited, and as a non-executive
director of Lower Murray Water Urban and Rural Water Corporation. He is a member of the Audit and Risk Committee.
Interest in shares: 6,212 fully paid shares.
B Crump (Chief Financial Officer and Company Secretary)
Joined Select Harvests as Chief Financial Officer on 20 November 2017 and appointed Company Secretary on 7 August 2018. He is a Certified
Practising Accountant and has over 15 years experience in senior financial management. Most recently he has been the CFO of Redflex Limited and
previously gained extensive experience in agribusiness as CFO of Landmark (Australia’s largest rural services provider) and senior roles within AWB
Limited. He brings extensive agribusiness, agri services and related capital management experience to the role.
Interest in shares: 4,000 fully paid shares.
CORPORATE INFORMATION
Nature of operations and principal activities
The principal activities during the year of
entities within the Company were:
• The growing, processing and sale of almonds
to the food industry from company owned and
leased almond orchards; and
• Processing, packaging, marketing and
distribution of edible nuts, dried fruits, seeds,
muesli and a range of natural health foods.
EMPLOYEES
The Company employed 533
time
equivalent employees as at 30 September 2020
(30 September 2019: 570 full time equivalent
employees).
full
time equivalent employees
Full
executive,
seasonal (casual and
employment types.
permanent,
include:
and
labour agency hire)
contractor
OPERATING AND FINANCIAL REVIEW
Highlights and Key developments during
the year
Another strong yielding performance from
Select Harvests almond asset base delivered a
record crop in FY2020.
This performance was offset by a 12.8%
reduction
in the achieved almond price
as a record 2020 U.S. crop and the impact
of COVID-19 on global market access
negatively
for almond
kernel and processed product. Additionally,
increasingly dry conditions led to the cost of
increasing
temporary
substantially leading to an overall increase in
cost of production per kilogram by 13.3%.
impacted prices
licences
water
in
Despite
the
the adverse movement
global almond price and cost of water, Select
Harvests delivered a solid profit result for
FY2020. This performance reflects the prior
years’ investment in greenfield developments
continuing to increase their production as
they mature. Additionally, consistent improved
the ongoing
yields
investment in technology, supported by a
targeted horticultural management approach,
has led to an increase in the forecasted
production volume. This reflects the current
strategic focus on consolidating the almond
asset base to maximise returns.
achieved
through
The water market was challenging in FY2020.
Ongoing drought conditions,
increased
horticultural developments and a greater
presence of large non-irrigator financial traders
in the water markets have all put increased
pressure on water (cost and supply).
Improved recent seasonal conditions have meant
catchment levels have increased, leading to
improved allocations and a significant drop in
the temporary water licence market.
The Food Division continued to be impacted
by increasing private label competition in the
consumer domestic cooking nuts category,
significant growth was again
however
achieved with the Sunsol Brand. The lower
global almond price has a material impact on
margins in the B2B Industrial segment.
COVID-19 and its impact on global market
access has extended the length of Select
Harvests’ shipping schedule. This has led
to delays in the delivery of the 2020 crop
and related cash receipts. As growing and
processing costs for the 2020 crop have
already occurred this shipment delay has led
to lower operational cashflows. As a result,
Select Harvests’ net bank debt position at
the end of FY2020 is $57.5 million (FY2019:
net cash position $7.9 million). There has been
no major project expenditure or greenfield
development during the year.
The options for greenfield expansion, mature
orchard acquisition, and non-almond related
opportunities continue to be assessed for
future growth.
Select Harvests Annual Report 2020 22
Directors’ Report
Continued
FINANCIAL PERFORMANCE REVIEW
Profitability
Reported Net Profit After Tax (NPAT) is $25.0 million. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) is $57.8 million and
Earnings Before Interest and Taxes (EBIT) is $38.7 million.
Results Summary and Reconciliation
($‘000)
Almond Division
Food Division
Corporate Costs
Operating EBIT
Interest Expense
Net Profit Before Tax
Tax (Expense)
Net Profit After Tax
Earnings Per Share (cents)
Almond Division Profitability
Revenue of $102.5 million was generated for
FY2020. This was 33% lower than last year due to
the reduction in the global almond price and a
slower shipping program as a result of COVID-19
impacts on global market access. 88% of the
crop had been processed by the end of the year.
This was less than FY2019 due to a wet finish to
the FY2020 harvest. 82% of the FY2020 crop is
either shipped or committed for sale with the
majority of the remaining tonnage allocated
for internal use in the Food Division and Parboil
value adding facility until product from the 2021
crop becomes available.
An EBIT of $41.8 million was achieved in FY2020
as a result of the valuation of the 2020 crop
based on a yield achieved of 23,250Mt (560Mt
or 2.5% higher than the 2019 crop).
Whilst mature orchard yield percentages were
down slightly following a very large 2019 crop,
2020 still produced a record tonnage result as
immature orchards progressed another year at
above business case performance and mature
industry
orchards delivered yields above
standard. Another good year for growing
conditions, protection from frost fan investments
and a well executed, comprehensive and targeted
horticultural program led to this consistent high
volume production.
The FY2020 result was adversely impacted by
a reduction in the achieved almond price to
$7.50/kg (12.8% lower than the 2019 crop) and
a 13.3% increase in the cost per kilogram due
to the cost per kilogram of temporary water
increasing by 63.4% from FY2019.
Balance Sheet
$’000
Trade and other receivables
Inventories
Biological asset
Trade and other payables
Net working capital
Food Division Profitability
FY2020 revenue generated was stable at $145.4
million delivering an EBIT of $3.3 million (33.2%
lower than FY2019). While volumes processed
and packed were higher than FY2019, the
mix of product sold was more weighted
towards lower margin private label product.
The domestic consumer branded market
remains challenging with both major domestic
retailers aggressively pursuing their private
label strategy in the cooking nuts category.
Demand in the Industrial market continued to
be strong however lower almond prices led
to margins decreasing across domestic and
international sales.
Interest Expense
Interest expense of $2.1 million reflects the lower
interest rates applicable to current finance
facilities and the ongoing close management of
operating cashflows and resultant debt levels.
Balance Sheet
Net assets at 30 September 2020 are $405.0
million, compared
to $416.0 million at
30 September 2019. An increase in trade
receivables and inventory has been offset
by an increase in net borrowings (as a result
of delayed cashflows from a slower shipping
program and lower almond price). Property,
plant and equipment also declined with limited
capital expenditure, no current greenfield
developments and no permanent water rights
acquired during the FY2020 period.
Net working capital has increased by 30.8%. This
increase is due to higher trade receivables and
inventory due to a slower shipping schedule as a
result of COVID-19 related market access delays.
REPORTED RESULT (AIFRS)
FY2020
41,807
3,348
(6,429)
38,726
(2,064)
36,662
(11,661)
25,001
26.0
FY2019
82,235
5,011
(7,181)
80,065
(3,957)
76,108
(23,086)
53,022
55.5
Cash flow and Net Bank Debt
Total net bank debt at 30 September 2020
was $57.5 million (30 September 2019: Net
cash position $7.9 million), with a gearing
ratio (total net bank debt (excluding lease
liabilities)/equity) of 14.2% (30 September
2019: N/A). The increase in borrowings is a
result of a delayed shipping schedule due to
COVID-19 related market access issues and
lower global almond prices.
Operating cash inflow generated for FY2020
amounted to $13.2 million. This reduced
result was due to COVID-19 related delayed
shipments, a lower almond price and resuming
a tax payable position (a refund was received
in FY2019 as a result of the change in financial
periods). Investing cash outflows of $35.3
million was $1.3 million higher than FY2019
due to investments in processing capital
to improve efficiencies and quality levels.
Dividend payments for the year were higher
due to the final dividend payment relating to
the FY2019 result (paid in FY2020). Net cash
outflow for FY2020 was $65.4 million which
was funded through a decrease in cash on
hand and an increase in bank debt.
Dividends
A 4 cents final dividend has been declared,
resulting in a total dividend of 13 cents per
share for the financial year. This compares to
a total dividend of 32 cents per share declared
for the financial year ended 30 September 2019.
FY2020
69,154
100,549
42,432
(42,517)
169,618
FY2019
50,223
77,687
34,144
(32,345)
129,709
Select Harvests Annual Report 2020 23
Overall, total recordable incidents reduced
by 23%. Due to the focus on managing risk
of COVID-19, proactive hazard identification
reduced slightly compared to FY2018/19 by
0.6%. Medical Treatment Injuries improved
by a reduction of 32% and a decrease of 35%
in frequency rate. There were decreases in
both days lost (8%) and the Lost Time severity
rate (20%), due to early intervention and
effective injury management, including early
return to work programs. Whilst the severity
rate has improved, unfortunately there was an
increase in Lost Time Injuries of 50% and the
resulting increase in frequency rate of 60%,
mostly incurred in our high risk agricultural
operations. An in-depth analysis of Lost Time
Injuries has been conducted and a plan to
action further preventative activities.
The key activities implemented included:
• Activating and continually updating the
COVID-19 Management & Response Plan
• Implementing
support
technology
compliance management and real time
incident and hazard reporting
to
• Actioning process improvements in incident
investigation reporting and risk assessment
• Reinforcing the strong safety culture, through
the revised Company Values and Behaviours,
visible safety leadership, including safety walks
and frequent toolbox training sessions and
discussions
• Supporting employee wellbeing through a
holistic wellness program (Global Challenge),
mental health first aid training for leaders
and increased counselling support through
our Employee Assistance Program (EAP) and
pulse check surveys for employees working
from home
FY2019
FY2020
VARIANCE FY2019 VS FY2020
88
58.2
631
19
20.9
404
11.2
7
7.7
68
53
627
13
14
374
9
14
16
-23%
-9%
-0.6%
-32%
-35%
-8%
-20%
+50%
+60%
CORPORATE SOCIAL RESPONSIBILITY
Health, Safety and Wellbeing
Focus continues towards achieving Zero
Harm, with annual targets to improve year on
year performance by driving a 15% reduction
in the number of
injuries and
injury severity and a 15% increase in hazards
identified and resolved, to prevent harm.
incidents,
The key focus for the year has predominantly
been to ensure the safety and wellbeing of our
employees, during the COVID-19 pandemic,
whilst not diverting our attention from key risk
areas in the business.
The key strategic priorities for the year were:
1. COVID-19 Management & Response Plan
2. Process improvement and
System Implementation
3. Building on the Safety Culture
and Safety Leadership
4. Targeted Employee health and
wellbeing activities
Occupational Health and Safety (OH&S)
Total Recordable Incidents
Hazards
Medical Treatment Injuries
Lost Time Injuries Severity
Lost Time Injuries
#
Frequency Rate
#
#
Frequency Rate
Days Lost
Severity Rate
#
Frequency Rate
Community
Fair Employment Practices
Select Harvests
is a significant employer
and proud member of the community with
orchards in regional Victoria, South Australia
and New South Wales and the Company has
significant processing facilities at Thomastown
in the Northern Metropolitan area of Melbourne
and Carina West, in North West Victoria. The
Company is actively involved in all our local
communities. Many employees contribute to
local community organisations on a regular
basis.
Select Harvests supports the local communities
with both financial and non-financial support
and through product donations. This year the
company focussed on supporting regional areas
impacted by bush fires. A significant donation
of $100,000 is being made to fire services in
the communities we support. In addition, the
company matched employee donations to
various agencies supporting bushfire appeals.
Our policies, practices and procedures ensure
that all our employees and contractors are
in a fair and reasonable manner.
treated
We are an Equal Employment Opportunity
employer, who values and respects Inclusion
and Diversity in our workplace.
All third-party labour providers engaged are
subject to meeting our Contractor Engagement
and Recruitment Policies that warrant compliance
with Australian labour laws and legislative
obligations. We undertake regular reviews to
ensure compliance with focus on the payment of
wages and eligibility to work in Australia.
Select Harvests has an Ethical Sourcing Policy
in place, with the objectives of upholding
human rights, protecting the environment
and operating in a sustainable manner, whilst
being a respected leader in the industry and
communicating the same expectations of our
suppliers and their supply chains.
The Company is committed to managing
the economic, environmental and social
challenges across our supply chain and this
will be achieved by committing to:
• Employing
innovative approaches
to
conserve resources and reduce impacts
to help preserve, improve and protect the
environment
• Promoting responsible agricultural and
food manufacturing practices
• Safeguarding the quality and
integrity
of the food we produce, market and
manufacture
• Respecting people and human rights by
treating our employees, suppliers, and
contractors with dignity and respect and
providing safe, secure and healthy work
environments, and expecting the same
from our suppliers
The Ethical Sourcing Policy is available on the
Select Harvests website:
www.selectharvests.com.au/governance
Select Harvests Annual Report 2020 24
Directors’ Report
Continued
Sustainability
This year, Select Harvests has reviewed its
sustainability strategy and as part of that process
aligned reporting with the Global Reporting
Initiative Standards as well as the United Nations
Sustainable Development Goals (SDGs). Both
provide a global framework that helps guide our
goals and objectives as a business.
There is a shortage of healthy food globally
and as a grower and marketer of nutrient
dense food products, we are well positioned to
help meet this growing demand. To capitalise
on this demand, we need to set our goals and
targets with a long-term lens as we operate
in an industry that requires commitment and
up to 25 years of foresight when expanding
almond operations. Therefore, it is imperative
that
into
sustainability be embedded
everything we do, which is why we recognise
it as a core value supporting the delivery of our
business strategy. This sustainable approach to
running our business is essential to delivering
on our key strategic objectives;
• Optimise the almond base
• Grow our brands
• Expand strategically.
We are motivated to meet
increasing
expectations by doing our fair share to address
complex global social and environmental
challenges, such as managing our resources
efficiently, creating a safe working environment
that ensures inclusiveness and diversity and
compliance to laws within our operations and
supply chain, whilst reducing our impact on
the environment. To achieve this, we need to
execute on the business fundamentals, along
with receiving the social and environmental
mandate from the communities within which
we operate.
The Company is committed to minimising the
impact its operations have on the environment,
with several projects activated over the past
two years, including reduction of our carbon
footprint. Our key focus areas in 2020 were:
• Ensuring the safety of our people, by
preventing injuries before they occur. The
aim of Select Harvests’ Zero Harm Safety
and Wellbeing strategy is to improve our
safety performance by 15% per annum until
we operate in a zero-harm environment
• Securing future water supply whilst being a
leader in the market for water efficiency. We
aim to manage our water efficiency through
best practice water delivery systems, water
optimisation technology such as soil water
monitoring, plant based monitoring and
high-resolution imagery
• Reducing our impact on the environment
across all aspects of the business. This is
achievable through the further investment in
sustainable projects (i.e. H2E co-generation
facility), bee stewardship, promoting a ‘recycle
first’ culture and transitioning to greener
inputs used throughout the value chain.
In looking ahead, we will continue to improve
the monitoring and reporting systems we have
in place as a business, to ensure that we are
pinpointing the right sustainability measures
that address the key focus areas of our
stakeholders. We are cognisant of the potential
impact we have on our environment and the
impact that climate change has on our business.
We seek to mitigate the risks and capitalise
on the opportunities that occur across the
business through sensible and responsible
management. To achieve this, we are exploring
the following:
• Further steps to address our climate change
related risks and opportunities
• Participating and supporting the Murray
Darling Basin Plan to bring the Basin back to
a healthier and sustainable level.
• In January 2019, Australia’s Modern Slavery
Act came into effect. We look forward to
releasing our first report in FY2021, which
will outline how we plan to address this
important global issue.
rates and
The 2019/20 Sustainability Report is available
on the company website :
www.selectharvests.com.au/sustainability
Our Environment and Sustainability Policy and
its related procedures and systems govern
our wildlife management plan and licensing
requirements. A copy is available on the Select
Harvests website:
www.selectharvests.com.au/governance
Select Harvests is a signatory of the National
Packaging Industry Covenant, which aims to
deliver more sustainable packaging, increase
recycling
reduce waste. The
Company’s office and farm waste is recycled
where possible.
Environmental Regulation & Performance
Select Harvests is subject to environmental
regulations under laws of the Commonwealth
and State Governments of Victoria, New South
Wales and South Australia. The Company
holds licences issued by the Environmental
Protection Authority (EPA) which specify
limits for discharges to the environment.
These licences regulate the management of
discharge to the air and stormwater runoff.
For FY2020, there were no environmental
breaches nor breaches of the Company’s
environmental licence conditions.
Water
Water is a limited resource and a key input
to Select Harvests’ almond orchards. A
significant amount of capital and management
time is invested in improving the efficiency of
water utilisation. Initiatives include installing
state of the art irrigation technology and
systems to deliver water efficiently, dedicated
resources on each farm to optimise water
use which includes reviewing and agreeing
the irrigation and fertigation application on a
weekly basis. Several innovative technology
solutions have also been deployed to improve
orchard management, including soil moisture
monitoring probes, plant-based water stress
monitoring sensors and vegetative
index
imagery collected by drones that identifies
differing tree health. These sources of real
time information are connected by telemetry
enabling us to build a database that over time
will lead to more informed decisions.
In some orchards we are recycling water
from the drainage system, resulting in cost
savings and minimising the impact on the
water table. In addition, trials are being run
on higher yielding almond varieties that use
less water per tonne of almonds produced.
Almond orchards are a long-term investment
that require a secure supply of water.
To mitigate the risk of inadequate supply of
water at an economic price, Select Harvests
has developed a strategy that addresses our
exposure to immediate and future weather
patterns, market trends and projected prices.
The company operates in several irrigation
regions, has a mix of owned permanent water
entitlements, medium term water leases and
allocation water purchased in the spot market,
and uses a mix of ground and river water. The
strategy is reviewed by the Board annually and
monitored through monthly reports.
Energy
Our H2E co-generation facility was commissioned
in June 2018 and it uses biomass such as hulls, shells
and orchard prunings to generate electricity.
Enough electricity can be generated to power
the Carina West Processing Facility (CWPF) and
nearby orchard pumps and supply renewable
electricity into the local grid. Project H2E is
delivering approximately 27% reduction in the
carbon footprint of the facility or the equivalent
of taking 8,210 cars off the road. Further work to
optimise the facility was completed at the end of
2019, with further increases in energy generation
from the installation of the bag filter.
Increased purchases through the Virtual
Generation Agreements (VGA) have occurred
over the last 12 months, resulting in increase
last year from 39% to 51% of net
from
electricity consumption from renewables
(excluding grid mix renewables) through
self-generation and targeted Wind Power
Purchase Agreements (PPA). A breakdown is
provided in the following table:
Total Power Consumed
Total Grid Power Consumed
Total Power Generated
Total Power Exported
Power Purchased through VGA
(MWH)
55,523.46
40,587.78
20,882.88
5,947.20
3,201.42
This highlights the company’s commitment to
sourcing sustainable energy and Select Harvests
continues to be on track for increasing use of
renewable power. We continue to pursue projects
to reduce our energy footprint and efficiency.
Projects include site energy efficient consumption
reviews and portfolio reviews to understand
potential contracting options moving forward.
Recycling
The composting of the cogeneration facility’s
ash with organic matter, soil ameliorants
and essential plant nutrients resulted
in
approximately 30,000 tonnes of compost
being produced and applied to the orchards
in readiness for the 2020/21 season.
The composting process takes all the waste
skins from the Carina West value adding facility,
which used to be directed to landfill. More
recently the waste almond skins from the
Thomastown facility have also been diverted
to composting, averting them being sent to
landfill. The compost will increase soil carbon
levels, provide a valuable slow release biological
nutrient source, increase water and fertiliser
efficiency, and ultimately improve soil health.
The compost will reach peak production over
the next 12 months with approximately 30,000
tonnes being produced annually, enough to
treat approximately 85% of our orchards.
Office waste, containers and packaging are
recycled or reused wherever possible. All food
waste is sold into the stockfeed industry.
Select Harvests Annual Report 2020 25
On 1 October 2020 Select Harvests announced
it had entered into an Implementation Deed
and Sale Agreements to acquire the 1,566ha
Piangil Almond Orchard, along with a
$120m capital raising to assist in funding the
acquisition. Anticipated to complete by the
3rd week of December 2020, this exciting
development will add significant scale to our
orchard portfolio.
The Food Division is undergoing a detailed
strategic review to determine the best option
for the division to deliver maximum returns.
Options being considered are:
• Development of a new highly efficient
processing facility to build on the current
Thomastown plant’s (lease expires in June
2022) capabilities through a targeted
growth program
• Optimise the use of the capability of the
• Grow
Carina West processing facility
the consumer
retail branded
presence through marketing support and
targeted new product development
• Develop strong strategic partnerships
with key domestic customers delivering a
variety of products and services
• Access new sales channels in the China
and South East Asian markets for both the
Sunsol and Lucky brands
• Further progress value added almond
sales in the business to business Industrial
market, particularly China. As our
production levels naturally grow there will
continue to be a volume uplift in this area.
Improvements in our Parboil value adding
facility will deliver additional opportunities
in domestic and export markets.
• Divest activities that generate below hurdle
rate returns.
Additionally, the company continues to
carefully assess (through internally set hurdle
rates and strategic benefits)
its growth
opportunities. These comprise:
• Continued expansion in almond orchards,
both greenfield and mature
• Diversification into other nuts
• Continue to grow our Food Division
both organically (through new product
development, brand strengthening and
improved operational efficiencies) and
inorganically
The macro for the almond industry and ‘better
for you’ plant-based foods remains very
strong both domestically and internationally.
Select Harvests has high quality assets, a
sustained increasingly efficient and consistent
production profile supported by world class
technology. We remain well placed to deliver
on the opportunities that will arise from
continued demand growth globally for plant
based foods.
almonds.
particularly
This ongoing demand continues
to be
driven by increasing middleclass wealth and
a higher number of consumers adopting
including
and consuming healthier diets,
the increased consumption of plant-based
products,
Select
Harvests continues to successfully deliver
in both the Almond and Food Divisions to
leverage this macro increase in global demand.
The horticultural program for the 2021 crop is
well underway. Conditions to date have been
favourable with the trees receiving sufficient
chill hours through the dormancy period and
the pollination process has completed without
issue. There have been a limited number of
frost events and the previous investment
in frost fans implemented in key areas has
mitigated any negative impact.
Based on industry standard yields and the
age profile of the orchards, and assuming
normal growing conditions for the season,
the Select Harvests 2021 theoretical crop
would be approximately 23,500Mt (excluding
Piangil Orchard).
Increased rainfall to date this season has led
to a significant drop in the price of temporary
water. Select Harvests will not see the full cost
benefit of this flow through into FY2021 due
to the level of acquired FY2020 water carried
over. Our policy of owning water entitlements,
long and medium term leasing entitlements
and acquiring annual allocations on the spot
market means we are not fully exposed to
annual fluctuations in water prices.
USD almond pricing decreased to 10 year lows
in mid-2020 due to the confirmation of an
estimated 3.0 Billion pound 2020 U.S. crop,
the high levels of carry-over stock from the
U.S. 2019 crop and the increasing spread and
impacts of COVID-19. While levels of demand
have increased in response to the price drop,
current pricing levels remain subdued and are
not expected to materially rise for the next
twelve months. After a slow start, 2020 almond
exports (kernel and processed product) have
increased and are expected to remain strong,
particularly into the India and China market.
The Almond Division continues to pursue
opportunities to further maximise returns
from its core almond asset base. This occurs
through
(yields),
increased production
improved quality and greater efficiency. This is
achieved through the following:
• Increasing the use of technology to provide
a more targeted horticultural management
approach delivering improvements to yield,
quality and lower water usage
• Further investment in advanced equipment
in our Carina West processing
facility
to deliver additional scale, quality and
productivity improvements
• Additional
capabilities
and operating
efficiency from our Parboil value adding
facility through targeted investment and
new product manufacturing processes
• Consistent maximum power generation
from our H2E bio-mass facility using hull
and horticultural waste and producing high
quality pot ash to be composted and applied
to current orchard assets
In addition to the above, domestic greenfield
developments and mature orchard acquisitions
continue to be assessed.
Pollination Management
Select Harvests’ almond orchards are dependent
on bee pollination. The key challenges and risks
in bee stewardship centre on optimum bee
health, pollination activity and almond yield. The
Company sources pollination services through
several brokers and direct relationships with
apiarists. This generates productive relationships
and an optimum pollination outcome.
Recognising the importance of bees, Select
Harvests actively engages and supports the
bee and pollination industries. This includes
the sponsorship and support
for apiary
associations, participation and presentation
at conferences, and collaboration in all-of-
horticulture and almond specific R&D projects
and steering committees.
We continue
innovative
solutions to generate improved colony health
include
and pollination outcomes. These
trialling self-pollinating varieties,
improved
bee husbandry practices, colony imagery and
artificial pollen application.
Our on-farm bee stewardship practices
include fostering alternative forage sources
for bees, provision of water at pollination
sites to aid bee hydration, avoiding the use of
products bees are sensitive to when colonies
are present. If a spray is required we work with
the apiarist and conduct it at night outside of
foraging periods. Audited spray diaries are
available and ongoing inspections monitor for
colony strength and health.
Other critical components
maximum yield
pollination through varietal selection.
to ensuring
include successful cross-
investigate
to
Risk Management
Select Harvests has a risk management process
in place to identify, analyse, assess, manage and
monitor risks throughout all parts of the business.
The Company maintains and refreshes its
detailed risk register annually. The register
provides a framework and benchmark against
which risks are reported on at different
levels in the business, with a biannual report
presented to the Board.
Each month major risks are reviewed by Senior
Management and the Board. They include
• Safety Risks (including employee safety, fire
prevention and plant operation);
• Horticultural Risks
(including climatic,
disease, water management, pollination
and quality)
• Food Safety Risks
(including product
quality, utilities supply, major equipment
failure); and
• Financial
Risks
(including
currency,
customer concentration, market pricing)
The Audit and Risk Committee Charter is
available on the Select Harvests website:
www.selectharvests.com.au/governance
Outlook
The global macro for almonds continues
to remain positive moving forward. While
COVID-19 has no doubt logistically impacted
the global supply of almonds the export
shipping data in recent months from the U.S.
has shown record breaking levels of shipments.
Select Harvests Annual Report 2020 26
Directors’ Report
Continued
SIGNIFICANT CHANGES IN THE
STATE OF AFFAIRS
There have been no significant changes in the
state of affairs of the Company.
SIGNIFICANT EVENTS AFTER THE
BALANCE DATE
On 1st October 2020, the Company announced
to the ASX its proposed acquisition of the
Piangil Almond Orchard for a consideration
of $129 million in cash plus a reimbursement
of 2020/2021 growing costs. In addition, the
company undertook an equity raising of $120
million at an offer price of $5.20 per share to
both institutional and retail investors. The
combined share raising was successfully
completed by 27 October with a total of 23.08
million shares issued. The expected date for
completion of the Piangil Orchard acquisition
will be in the 3rd week of December 2020. For
further details, please refer to the relevant
announcements made to the ASX.
On 30 November 2020, the Directors of
the Company declared a final fully franked
dividend of 4 cents per share payable on 5
February 2021 to shareholders on the register
on 11 December 2020.
DIRECTORS’ MEETINGS
NON IFRS FINANCIAL INFORMATION
DIVIDENDS
The non IFRS financial information included
within this Directors’ Report has not been
audited or reviewed
in accordance with
Australian Auditing Standards.
information
IFRS financial
Non
includes
underlying EBIT, underlying result, underlying
NPAT, underlying earnings per share, net
interest expense, net bank debt, net debt, net
working capital and adjustments to reconcile
from reported results to underlying results.
INDEMNIFICATION AND INSURANCE OF
DIRECTORS AND OFFICERS
During the year the Company entered into
an insurance contract to indemnify Directors
and Officers against liabilities that may arise
from their position as directors and officers of
the Company and its controlled entities. The
terms of the contract do not permit disclosure
of the premium paid.
Officers indemnified include the company
secretary, all directors, and executive officers
participating
in the management of the
Company and its controlled entities.
CENTS
4
2020
($’000)
4,794
Final fully franked
dividend declared for
30 September 2020*
* On ordinary shares
COMMITTEE MEMBERSHIP
During or since the end of the financial year, the
Company had an Audit and Risk Committee and
a Remuneration and Nomination Committee
comprising members of the Board of Directors.
Members acting on the Committees of the Board
during or since the end of the financial year were:
Audit and Risk
F Bennett (Chair)
F Grimwade
G Kingwill (appointed 16 December 2019)
N Anderson (resigned 16 December 2019)
Remuneration and Nomination
M Carroll (Chair)
M Iwaniw
N Anderson
The number of meetings of directors (including meetings of committees of directors) held during the financial year and the number of meetings
attended by each director was as follows:
DIRECTORS’ MEETINGS
MEETINGS OF COMMITTEES
Audit and Risk
Remuneration and Nomination
Number Eligible
to Attend
13
13
13
13
13
13
12
Number
Attended
13
13
13
13
13
13
12
Number Eligible
to Attend
-
6
-
6
6
1
5
Number
Attended
-
6
-
6
6
1
5
Number Eligible
to Attend
5
5
5
-
-
5
-
Number
Attended
5
5
4
-
-
5
-
M Iwaniw
P Thompson
M Carroll
F Bennett
F Grimwade
N Anderson
G Kingwill*
* Appointed 25 November 2019
Select Harvests Annual Report 2020 27
DIRECTORS’ INTERESTS IN CONTRACTS
Directors’ interests in contracts are disclosed in Note 27(e) to the financial statements.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 40.
NON-AUDIT SERVICES
Non-audit services provided by the external auditor are approved by resolution of the Audit and Risk Committee and approval is provided in writing
to the board of directors. The directors are satisfied that no non-audit services were provided during the period, as detailed in Note 26.
ROUNDING
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) under
the option available to the Company under ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191. 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 has previously adopted Listing Rule 4.10.3 which allows companies to
publish their corporate governance statement on their website rather than in their annual report. A copy of the statement along with any related
disclosures is available at:
www.selectharvests.com.au/governance
This report is made in accordance with a resolution of the Directors.
M Iwaniw
Chair
Melbourne, 30 November 2020
Select Harvests Annual Report 2020
28
Directors’ Report
Continued
REMUNERATION REPORT
Introduction from the Chair of the
Remuneration and Nomination Committee
Dear Shareholder,
On behalf of the Board, I'm pleased to present
our 30 September 2020 remuneration report.
The objective of Select Harvests remuneration
strategy is to attract, retain and motivate the
people we require to sustainably manage and
grow the business. Executive remuneration
packages include a balance of fixed remuneration,
short term cash incentives and long term
equity incentives. The framework endeavours
reward with market
to align executive
conditions and shareholders’ interests.
Fixed remuneration is aligned to the market mid-
point for similar roles in comparable companies.
The health and well-being of our people
for the
remains the paramount priority
business, with the short term
incentive
payments conditional on the foundations
being in place for a safe work environment,
demonstration of a strong safety culture and
our values. The board assessed the safety
environment to be sound.
The short term incentive program is based
on annual performance and assessed against
key financial and operational performance
indicators (KPIs). The performance targets
are based on the annual business plan and
set at a level that results in a 50% payout on
achievement of a stretching but realistically
achievable level of performance. Maximum
payout only occurs where there is a clearly
outstanding level of performance across all KPIs.
In addition to KPIs for their business unit and
areas of direct responsibility all Key Management
Personnel (KMP) share a company NPAT KPI to
encourage a strong executive team dynamic
and cross business unit collaboration.
Setting KPIs for a business such as ours has
the challenge of a number of factors such as
climatic conditions, commodity prices and
exchange rates having a significant effect
on results. While management can to some
degree mitigate these “agricultural risks” and
should be encouraged to do so, they are largely
out of our control. The Board retains some
discretion in evaluating overall performance
and taking into account operating conditions.
KMP STI vesting levels ranged from 27% to
39% of the maximum opportunity. The higher
vesting levels were primarily driven by strong
orchard yields, innovation, improved culture
in the orchards,
and strong cost control
processing, manufacturing and head office.
The long term incentive plan is based on 3
year compound annual growth in earnings
per share and relative total shareholder return
against ASX listed industry peers and absolute
Earnings Per Share (EPS) growth. The EPS band
is broad with vesting starting at 5% and full
vesting occurring at 20%. The choice of a broad
band reflects our desire for the start point to
have a reasonable probability of occurring and
for full vesting to only occur when there is a
strong outcome for shareholders.
TSR over the three year performance period
was 24.5% which came out at the 61.5th
percentile of the peer group and resulted in
73% vesting. EPS growth was 25%, admittedly
off a low base three years prior and therefore
fully vested. No adjustments were made to
the reported statutory EPS in determining this
outcome. The Company was not a recipient of
the government JobKeeper scheme. Overall
LTI vesting was at 86.5%.
The remuneration outcomes resulting from
the FY2020 performance are set out in this
Remuneration Report.
Mike Carroll
Chair – Remuneration &
Nomination Committee
The report has been prepared and audited
against the disclosure requirements of the
Corporations Act 2001 (Cth).
1. KEY QUESTIONS
What are our remuneration objectives and guiding principles?
OBJECTIVE
To deliver
sustainable returns
as a leader in “better
for you” plant based
foods.
Align management
and shareholder
interests.
PRINCIPLES
Deliver competitive
advantage in
attracting,
motivating and
retaining talent.
Encourage a diverse
workforce.
Simple, easily
understood,
rewarding
performance and
creating a culture
that delivers
shareholder value.
Reflect our values of:
• Trust & Respect
• Integrity &
Diversity
• Sustainability
• Performance
& Innovation
Select Harvests Annual Report 2020 29
How is our remuneration structured?
The table below provides an overview of the different remuneration components within the framework.
PURPOSE
DELIVERY
FY20 APPROACH
OBJECTIVE
Attract and retain the
best talent
REMUNERATION
COMPONENT
Total Fixed Remuneration
(TFR)
Reward current year
performance
Short Term Incentive
(STI)
TFR is set in relation to
the external market and
takes into account:
• Size and complexity
of the role
• Individual
responsibilities
STI ensures appropriate
differentiation of pay
for performance and is
based on business and
individual performance
outcomes
Base salary,
superannuation
and salary sacrifice
components based
on total cost to the
company
Target TFR positioning is Median of
Comparator Group
Comparators: Listed Food and
Agribusiness Companies
Annual cash payment
STI Performance Measures1
Reward long
term sustainable
performance
Long Term Incentive
(LTI)
LTI ensures alignment
to long-term overall
company performance
and is consistent with:
Performance rights
(vesting after three
years, subject to
performance)
• Profitable growth
• Long-term
shareholder return
• NPAT (40%)
• Capital management (20%)
• Culture/ Executive
Development (10%)
• Personal & Operational
performance (10%)
• Board discretion (20%)
With a tollgate for safety and values
LTI Performance Measures
• Relative TSR (50%)
• EPS growth (50%)
With a positive TSR gate
• Holding Lock
The participant’s holding is equal to
their fixed annual remuneration
• Clawback conditions
For fraud or dishonest conduct
breach of obligations to the
Company
1 This summarises the MD’s Performance Measures. Other KMP’s measures are tailored to their responsibilities
When remuneration is earned and received?
The remuneration components are structured to reward executives progressively across different timeframes. The diagram below shows the period
over which FY20 remuneration is delivered and when the awards vest.
TFR
STI
LTI
AGM
Monthly
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
Date Paid
Date Granted
Vesting Date
Performance Period
Select Harvests Annual Report 2020 30
Directors’ Report
Continued
REMUNERATION REPORT (CONTINUED)
1. KEY QUESTIONS (CONTINUED)
What is the remuneration mix for Key Management Personnel?
The remuneration mix for KMP is balanced between fixed and variable remuneration.
• MD: 50% of remuneration is performance-based pay and 25% of remuneration is delivered as performance rights to shares.
• Other KMP: 50% of their remuneration is performance-based pay and 25% of their remuneration is delivered as performance rights to shares.
MD
Other
KMP
50%
50%
7%
(Max 25%)
6.0-9.9%
(Target 20-25%)
22%
(Max 25%)
22%
(Max 25-30%)
Total Fixed
Remuneration
Peformance
Dependent STI
Peformance
Dependent LTI
STI payments are based on 50% of the fixed remuneration, with maximum payment on achievement of a stretching but achievable target, with
regard to past and otherwise expected achievements.
LTI grants are at face value, where face value represents the share pricing at 30 September 2020. Executive KMP have minimum shareholding
requirements.
How much did you pay your executive for the financial year?
The table below presents the remuneration paid to, or vested for, Executive KMP for the financial year ended 30 September 2020.
$
Paul Thompson - MD
Brad Crump – CFO & Company Secretary
Peter Ross – GM Almond Operations
Laurence Van Driel – GM Trading & Industrial Sales
Ben Brown – GM Horticulture
Suzanne Douglas – GM Consumer
Urania Di Cecco – GM People, Safety & Sustainability
TOTAL FIXED
REMUNERATION
641,073
404,616
345,953
355,523
338,781
325,381
281,365
STI ACHIEVED1
87,807
59,660
56,417
47,532
65,560
56,632
42,189
VESTED PERFORMANCE
RIGHTS2
361,354
86,725
72,271
72,271
72,271
-
-
TOTAL
1,090,234
551,001
474,641
475,326
476,612
382,013
323,554
1 Cash STI will be paid after the 30 September 2020 financial statements have been finalized.
2 The vested performance rights value in this table has been determined using the closing share price on the last trading day of FY20. Vesting occurs after the finalisation of the
30 September 2020 financial statements and hurdle testing is completed by an independent expert. Sale of shares emanating from vested performance rights under the current plan
are subject to a holding lock which requires Executive KMP to accumulate and hold a value equivalent to their annual TFR.
Select Harvests Annual Report 2020
31
What equity was granted for year ended 30 September 2020?
Equity was granted to KMP in 2020, as detailed in the table below. The methodology used for the allocation was determined using the face value of
full vesting based on the Volume Weighted Average Price (VWAP) over the 10 days preceding the date of 21 February 2020 Annual General Meeting.
NUMBER OF
PERFORMANCE
RIGHTS GRANTED
FACE VALUE
Based on VWAP price ($9.03)
over 10 days preceding AGM
(21 February 2020)
COMMENCEMENT OF
PERFORMANCE PERIOD
FACE VALUE
Based on share price ($7.69)
on 1 October 2019
Paul Thompson - MD
Brad Crump – CFO & Company Secretary
Peter Ross – GM Almond Operations
Laurence Van Driel – GM Trading & Industrial Sales
Ben Brown – GM Horticulture
Suzanne Douglas – GM Consumer
Urania Di Cecco – GM People, Safety & Sustainability
46,845
11,243
9,369
9,369
9,369
9,369
7,729
$423,010
$101,524
$84,602
$84,602
$84,602
$84,602
$69,793
$360,238
$86,459
$72,048
$72,048
$72,048
$72,048
$59,436
Is there alignment between management and shareholder interests?
The following chart shows the alignment between shareholder’s interests as measured by reported profit and earnings per share and management’s
interests as measured by the proportion of STI that pays out and the number of performance rights vesting. EPS growth was 25% off a low base three
years prior and therefore fully vested. No adjustments were made to the reported statutory EPS in determining this outcome. The Board believes
these outcomes show “at risk” remuneration has varied appropriately.
100
80
60
40
20
0
FY16
FY17
FY18
FY19
FY20
STI Vesting % of
maximum dollars (%)
LTIP vesting % of
maximum rights (%)
Basic Earnings
per Share (cents)
Reported NPAT ($’m)
Note:
This report excludes the FY18 transition period (3 months period ending 30 September 2018) as no STI or LTIP were vested.
Select Harvests Annual Report 2020 32
Directors’ Report
Continued
REMUNERATION REPORT (CONTINUED)
2. EXECUTIVE KMP REMUNERATION
2.1 How STI outcomes are linked to performance
At the commencement of each annual operating cycle the Board sets KPIs for the MD and the MD sets KPIs for the KMP with target levels of
performance based on the Board approved annual operating plan. At the end of the operating cycle the Board assesses performance against these
KPIs and how these rate against the scales set out in the following table. This determines the STI reward.
PERFORMANCE
LEVEL
PERFORMANCE
DESCRIPTION
Unsatisfactory
Threshold
Unacceptable level of
performance
The minimum acceptable level
of performance that needs to
be achieved before any reward
would be available.
Target
Represents the planned level of
performance. Financial and other
quantitative KPIs are set at the
budgeted level assuming plans
are challenging but achievable
Outstanding
A clearly outstanding level of
performance and evident to
all as an exceptional level of
achievement
QUANTITATIVE
KPI TARGETS
(% PLANNED PERFORMANCE)
< 95%
SUBJECTIVE
TARGETS
(BASED ON A 1 TO 5 SCALE)
Score 1 or < 2
STI REWARD
(% MAXIMUM)
STI REWARD
(% TFR)
No payment
No payment
95%
Score 2
1%
0.5%
96% - 99.9%
Score > 2 & < 3
100%
Score of 3
Pro-rata from
1% to 49.9%
50%
Pro-rata from
12.5% to 24%
25%
100.1% - 119.9%
Score > 3 & < 5
120% +
Score of 5
Pro-rata from
50.1% to 99.9%
100% (double on
target reward)
Pro-rata from
26% to 49%
50%
For FY2020 the KMP score cards range from 27% to 39% as a percentage of the potential maximum score and resulted in STI rewards as a percentage
of TFR of 15%. This level of performance is reflective of the delivery of a solid result through a challenging year.
2.2 Overview of FY20 remuneration framework
FIXED REMUNERATION
Base salary
Short Term Incentive (STI)
Opportunity
Purpose
Term
Instrument
Performance measures
Why these were chosen
Consists of cash salary, superannuation and salary sacrifice arrangements based on total cost to the company.
Reviewed annually with reference to the market median for comparable companies, the individual’s performance and
potential and the company’s future plans. There is no guaranteed base pay increase in any executives’ contracts.
% of Fixed Remuneration
MD
Unsatisfactory – 0%
Threshold – up to 12.5%
Target – up to 25%
Maximum - up to 50%
Other KMP
Unsatisfactory – 0%
Threshold – up to 7.5-12.5%
Target – up to 15-25%
Maximum – up to 40-50%
To provide incentive to exceed the annual business objectives.
1 year
Cash
KPI Score Card
Company NPAT
Culture/Executive Development
Capital management
Personal & Operational performance / Project delivery
Board discretion
With a safety and values tollgate
To provide a balance between outperforming the annual operating plan, individual business unit plans, focus on
the efficient use of capital and strengthening the balance sheet, on time and budget delivery of strategic projects
and sustained orchard productivity. The Board retains some discretion to adjust the outcomes based on whether
they were influenced by uncontrollable “headwinds” or “tailwinds” and the degree to which behaviours reflect our
values. The health and well-being of our people remains paramount and no incentive is paid if the foundations for
a safe work environment were not maintained.
Other KMP
30-40%
0-15%
0-20%
20-40%
20%
MD
40%
10%
20%
10%
20%
Select Harvests Annual Report 2020 33
FIXED REMUNERATION
Long Term Incentive (LTI)
Opportunity
Purpose
Term
Instrument
Performance conditions*
Why these were chosen
% of Fixed Remuneration
MD
Face Value – up to 82%
Other KMP
Face Value – up to 35%
Reward achievement of long term business objectives and sustainable value creation for shareholders.
3 years, vesting at the end of the period.
Performance rights
1. Continuing service
2. Positive absolute shareholder return
3. 50% Compound Annual Growth in underlying earnings per share† over three years.
The performance targets and vesting proportions are as follows:
• Below 5% CAGR
• 5% CAGR
• 5.1% - 19.9% CAGR
• 20% or higher CAGR
4. 50% Total Shareholder Return relative to a peer group of ASX listed companies over three years.
The performance targets and vesting proportions are as follows:
Nil
• Below the 50th percentile
25%
• 50th percentile
Pro rata vesting
• 51st – 74th percentile
• At or above 75th percentile
50%
Underlying EPS represents a strong measure of overall business performance.
TSR provides a shareholder perspective of the Company’s relative performance against comparable companies.
Nil
25%
Pro rata vesting
50%
* The Remuneration and Nomination Committee is responsible for assessing whether the targets are met and in doing so obtains the advice of an independent expert.
† EPS adjustments are made consistent with the guidance issued by the Australian Institute of Company Directors and Financial Services Institute of Australasia in March 2009 and
ASIC Regulator Guide RG230 ‘Disclosing Non-IFRS financial information’.
OTHER
Hedging policy
Clawback
Minimum shareholding
requirements
Individuals cannot hedge Select Harvests equity that is unvested or subject to restrictions.
The Board may determine that any unvested share rights will lapse or be forfeited in certain circumstances such as
in the case of fraud, wilful misconduct or dishonesty.
Vested performance rights are to be held until the accumulated value is equal to 100% base salary.
The safety tollgate, which requires maintenance of a safe work environment, was passed.
The individual KMP actual STI payments and potential maximum payments are set out in the following table in section 2.3.
Select Harvests Annual Report 2020 34
Directors’ Report
Continued
REMUNERATION REPORT (CONTINUED)
2. EXECUTIVE KMP REMUNERATION (CONTINUED)
2.3 What we paid executive KMP in FY2020 – Further detail
The following pages compare the maximum potential and actual remuneration for the period ended 30 September 2020 and for the period ended
30 September 2019 for current KMP. The statutory remuneration shows benefits before they are actually received by the KMP. Amounts include:
• Total fixed remuneration
• STI achieved as a result of business and individual performance (versus the maximum potential cash STI)
• Share performance rights that vested during the year at face value (versus the maximum initial award face value) for the performance testing
period concluding in that year.
This information differs from the statutory remuneration disclosures presented in Section 5.1 (which are presented in accordance with the accounting
standards) as the performance rights value is based on the closing share price on the day the tranche of performance rights were approved.
The directors believe that the remuneration received is more relevant to users for the following reasons:
• The statutory remuneration expensed is based on historic costs and does not reflect the value of the equity instruments when they are actually
received by the KMP.
• The statutory remuneration shows benefits before they are actually received by the KMP.
$’000
P Thompson
Managing Director
& CEO
B Crump
Chief Financial Officer
& Company Secretary
P Ross
General Manager
Almond Operations
L Van Driel
General Manager Trading
B Brown
General Manager
Horticulture
S Douglas‡
General Manager Consumer
U Di Cecco�
General Manager People,
Safety & Sustainability
Actual Remuneration
Maximum Potential
Actual Remuneration
Maximum Potential
Actual Remuneration
Maximum Potential
Actual Remuneration
Maximum Potential
Actual Remuneration
Maximum Potential
Actual Remuneration
Maximum Potential
Actual Remuneration
Maximum Potential
Actual Remuneration
Maximum Potential
Actual Remuneration
Maximum Potential
Actual Remuneration
Maximum Potential
Actual Remuneration
Maximum Potential
Actual Remuneration
Maximum Potential
Actual Remuneration
Maximum Potential
Actual Remuneration
Maximum Potential
TOTAL FIXED
REMUNERATION
641
641
629
629
405
405
394
394
346
346
341
341
356
356
349
349
339
339
314
314
325
325
140
140
281
281
59
59
2020
2020
2019
2019
2020
2020
2019
2019
2020
2020
2019
2019
2020
2020
2019
2019
2020
2020
2019
2019
2020
2020
2019
2019
2020
2020
2019
2019
SHORT TERM
INCENTIVE*
88
321
329
393
60
202
222
246
56
173
176
213
48
178
175
218
66
167
186
196
57
163
31
70
42
141
8
24
PERFORMANCE
RIGHTS†
421
487
178
487
101
117
-
-
84
97
36
97
84
97
36
97
84
97
18
49
-
-
-
-
-
-
-
-
* Short term incentives have been calculated based on a 15 month period for 2018/19 financial year, as part of the transition to the new financial year period.
† 2020 Performance Rights valued at $6.49, the closing share price on the day of the 2014 AGM at which they were approved (21/11/2014)
‡ Commenced 15 July 2019
� Commenced 29 April 2019
TOTAL
1,150
1,449
1,136
1,509
566
724
616
640
486
616
553
651
488
631
560
664
489
603
518
559
382
488
171
210
323
422
67
83
Select Harvests Annual Report 2020 35
2.4 FY2021 Outlook
The Committee and Board continue to review and finesse our remuneration strategy:
• Our LTIP performance rights are allocated annually, ensuring closer alignment to current strategic plans.
• The 2021 STIP KPIs continue to evolve, maintaining the focus on financial metrics, whilst continuing the focus on culture and controllable costs.
• We will be evaluating changes to the LTIP measures to align with our strategy, including capital return performance measures.
2.5 Long Term Performance Perspective
The following table provides the performance outcomes over a five year period which align to the STI and LTI outcomes for Executive KMP.
Net profit / (loss) after tax ($'000)
Basic EPS (cents)
Basic EPS Growth
Dividend per share (cents)
Opening share price
1 Oct / 1 July ($)
Change in share price ($)
Closing share price
30 September / 30 June ($)
TSR % p.a.*
2020
YEAR ENDED
30 SEPT
25,001
26.0
(53%)
13.0
7.69
(2.12)
5.57
(26%)
2019
YEAR ENDED
30 SEPT
53,022
55.5
3,552%
32.0
5.32
2018
3 MONTH PERIOD
ENDED 30 SEPT
(1,536)
(1.6)
(107%)
Nil
6.90
2.37
7.69
51%
(1.58)
5.32
(23%)
2018
YEAR ENDED
30 JUNE
20,371
23.2
84%
12.0
4.90
2.00
6.90
(26%)
2017
YEAR ENDED
30 JUNE
9,249
12.6
(73%)
10.0
6.74
(1.84)
4.90
(35%)
2016
YEAR ENDED
30 JUNE
33,796
46.7
(44%)
46.0
11.00
(4.26)
6.74
124%
* TSR is calculated as the change in share price for the year plus dividends announced for the year, divided by opening share price
Vesting of performance rights is based on performance against the hurdles over the three years prior to vesting.
The following illustrates the Company’s performance against the criteria in the LTI plan.
EPS GROWTH
Basic EPS (cents)
Underlying EPS (cents)
3 Year EPS CAGR
3 Year EPS CAGR target 5% - 20%
Percentage vested
RELATIVE TSR PERFORMANCE†
SHV 3 Year TSR %
SHV 3 Year TSR Ranking
Peer group 3 Year Median TSR
SHV Rank against peer group
Percentage vested
2020
YEAR ENDED
30 SEPT
26.0
26.0
24.9%
2019
YEAR ENDED
30 SEPT
55.5
55.5
11.9%
2018
3 MONTH PERIOD
ENDED 30 SEPT
(1.6)
(1.6)
N/A
2018
YEAR ENDED
30 JUNE
23.2
23.2
(36%)
2017
YEAR ENDED
30 JUNE
12.6
12.6
(37%)
100%
73%
N/A
0%
0%
2020
YEAR ENDED
30 SEPT
24.5%
62nd percentile
20%
6th out of 14
73%
2019
YEAR ENDED
30 SEPT
22.8%
29th percentile
50%
11th out of 15
0%
2018
3 MONTH PERIOD
ENDED 30 SEPT
N/A
N/A
N/A
N/A
N/A
2018
YEAR ENDED
30 JUNE
(22.5%)
0th percentile
27%
15th out of 15
0%
2017
YEAR ENDED
30 JUNE
1%
13th percentile
18%
14th out of 16
0%
† TSR ranking relative to ASX Consumer Staples also included in the All Ordinaries index.
Select Harvests Annual Report 2020 36
Directors’ Report
Continued
REMUNERATION REPORT (CONTINUED)
2. EXECUTIVE KMP REMUNERATION (CONTINUED)
2.6 Terms of KMP Service Agreements
Remuneration and other terms of employment for the KMP are formalised in service agreements. These service agreements set out the base salary
arrangements and future review. Each of these agreements provide for participation in a Short Term Incentive Plan and a Long Term Incentive Plan.
Other significant provisions of the agreements are that the term is on-going with a 6 month notice period for the MD and 3 month notice period
for all other KMP.
Other than the notice periods, there are no specific termination benefits applicable to the service agreements.
3. NON-EXECUTIVE DIRECTORS’ ARRANGEMENTS
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 office of Director.
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 reflects the responsibilities and the Group’s demands of directors. Non-Executive Directors’
fees are periodically reviewed by the Board to ensure that they are appropriate and in line with market expectations.
Non-Executive Directors’ professional development is supported and funded through the company’s training budget. There is no equity ownership
requirement for Non-Executive Directors. Directors are encouraged to acquire and hold shares equivalent in value to their annual fees.
The current aggregate fee limit of $950,000 was approved by shareholders at the 21 February 2020 Annual General Meeting. For the reporting year
the total amount paid to Non-Executive Directors was $767,106.
The remuneration is a base fee with the Chair of each of the Committee receiving additional fees commensurate with their responsibilities. The
current directors’ fees are as follows:
Base Fees (including superannuation)
Chair
Other Non-Executive Directors
Additional Fees (including superannuation)
Chair of the Audit and Risk Committee
Chair of the Remuneration and Nominations Committee
4. GOVERNANCE
4.1 Role of the Remuneration and Nomination Committee
$223,788
$106,132
$14,153
$14,153
The Remuneration and Nomination Committee operates under its own Charter and reports to the Board. The Charter, which the Board reviews
annually, was last updated in July 2018. A copy of the Charter is available on the Company’s website:
www.selectharvests.com.au
4.2 Use of Remuneration Advisors
No remuneration advisors were used during the financial year ended 30 September 2020.
4.3 Share Trading Policy
The Share Trading Policy was last reviewed by the Board in April 2019. A copy is available on the Company’s website:
www.selectharvests.com.au
Under the policy senior executives may not hedge Select Harvests equity that is unvested or subject to restrictions.
Select Harvests Annual Report 2020 37
5. KMP STATUTORY DISCLOSURES
5.1 Details of 2020 and 2019 Remuneration
Remuneration of the directors and other key management personnel of Select Harvests Limited and the consolidated entity.
$
ANNUAL REMUNERATION
LONG TERM
Base Fee
Short Term
Incentives�
Non Cash
Benefits
Superannuation
Contributions
Long Service Leave
Accrued & Paid
Performance
Rights Granted
Total
Non Executive Directors
M Iwaniw
2020
2019
M Carroll
F Grimwade
N Anderson
F Bennett
2 2 3,788
218,362
109,849
100,866
96,924
88,998
96,924
88,998
1 1 2 , 4 5 8
100,866
82,634
2020
2019
2020
2019
2020
2019
2020
2019
2020
G Kingwill*
Executive Director
P Thompson
P Ross
L Van Driel
2020
2019
574,553
564,051
Other key management personnel
383,614
B Crump
375,872
321,063
314,938
334,521
326,081
312,782
293,222
304,378
129,204
260,362
55,002
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
U Di Cecco‡
S Douglas†
B Brown
-
-
-
-
-
-
-
-
-
-
-
87,807
328,718
59,660
221,847
56,417
175,590
47,532
175,093
65,560
185,869
56,632
31,041
42,189
7,730
-
-
-
-
-
-
-
-
-
-
-
45,517
44,425
-
-
3,888
4,951
-
-
4,997
-
-
-
-
-
-
-
10,436
9,582
9,208
8,455
9, 2 0 8
8,455
7,827
9,582
7,850
21,003
20,649
21,003
18,522
21,003
20,649
21,003
22,797
21,003
20,813
21,003
10,305
21,003
4,460
-
-
-
-
-
-
-
-
-
-
-
11,993
12,544
-
-
5,986
6,594
6,465
10,730
53,751
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2 2 3,788
218,362
120,285
110,448
106,132
97,453
106,132
97,453
120,285
110,448
90,484
250,893
358,833
991,766
1,329,220
77,354
42,595
51,411
60,446
51,411
60,446
51,411
51,668
4,417
-
3,644
-
541,631
658,836
459,768
583,168
460,932
595,147
509,504
551,572
386,430
170,550
327,198
67,192
* Commenced 25 November 2019
�
† Commenced 29 April 2019
‡ Commenced 15 July 2019
Short term incentives have been calculated based on a 15 month period for 2018/19 financial year, as part of the transition to the new financial year.
Notes:
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 reflective of rights that may or may not vest in future years.
The elements of remuneration have been determined based on the cost to the consolidated entity.
Performance rights granted have been independently valued using the Monte Carlo simulation 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 reflects
the value as determined using this model. The value is expensed over the vesting period of the rights.
Select Harvests Annual Report 2020
38
Directors’ Report
Continued
REMUNERATION REPORT (CONTINUED)
5. KMP STATUTORY DISCLOSURES (CONTINUED)
5.2 Details of LTI Performance Rights Granted, Vested and Exercised
Performance rights granted to the Managing Director and KMP during the year.
Opening balance
1 Oct 2019
Granted during the
year
NUMBER
Vested during the
year
Forfeited during
the year
Closing balance
30 Sept 2020
Executive Director
P Thompson
Other key management personnel
B Crump
P Ross
L Van Driel
B Brown
S Douglas
U Di Cecco
157,815
40,095
31,571
31,571
31,571
-
-
46,845
11,243
9,369
9,369
9,369
9,369
7,729
64,875
15,570
12,975
12,975
12,975
-
-
10,125
2,430
2,025
2,025
2,025
-
-
129,660
33,338
25,940
25,940
25,940
9,369
7,729
All vested rights are exercisable at the end of the year, subject to a holding lock that requires KMP to hold shares with a value equivalent to their base salary.
5.3 Active Plan Performance Rights Granted
Performance rights granted to executives under the LTI Plans that are relevant to FY2020 and beyond.
GRANT
DATE
2017
VESTING CONDITIONS
• EPS Compound Annual
Growth
• Relative TSR performance
to peer group
• Continuous service
• Holding Lock
PERFORMANCE
PERIOD
30 June 2018
30 September 2019
30 September 2020
20 Nov
2017
29 April
2019
27 March
2020
• EPS Compound Annual
30 September 2020
B Crump
Growth
• Relative TSR performance
to peer group
• Continuous service
• Holding Lock
• EPS Compound Annual
Growth
• Relative TSR performance
to peer group
• Continuous service
• Holding Lock
• EPS Compound Annual
Growth
• Relative TSR performance
to peer group
• Continuous service
• Holding Lock
30 September 2021
30 September 2020
P Thompson
B Crump
P Ross
L Van Driel
B Brown
P Thompson
B Crump
P Ross
L Van Driel
B Brown
S Douglas
U Di Cecco
PARTICIPATING
EXECUTIVES
P Thompson‡
P Ross�
L Van Driel�
B Brown¶
PERFORMANCE ACHIEVED
VESTED %
30 June 2018 rights achieved
0% of EPS condition rights and
0% of TSR condition rights
0% of 30 June
2018 rights
30 September 2019 rights achieved
73% of EPS condition rights and
0% of TSR condition rights
37% of 30
September
2019 rights
30 September 2020 rights achieved
100% of EPS condition rights and
73% of TSR condition rights
30 September 2020 rights achieved
100% of EPS condition rights and
73% of TSR condition rights
87% of 30
September
2020 rights
87% of 30
September
2020 rights
2021 period to be determined.
N/A
2022 period to be determined.
N/A
‡ Granted 20 October 2014
�
Granted 29 September 2016
¶ Granted 2 December 2016
The LTI Plan provides for the offer of a parcel of performance rights with a three year performance period to participating employees. The rights vest
at the end of the period 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 2020
5.4 Grants of Performance Rights
The table details the grants of performance rights to the Managing Director and Executive team.
Name
P Thompson
B Crump
P Ross
L Van Driel
B Brown
S Douglas
U Di Cecco
Year
Granted
2017
2019
2020
2018
2019
2020
2017
2019
2020
2017
2019
2020
2017
2019
2020
2020
2020
Number
Granted
75,000
82,815
46,845
18,000
22,095
11,243
15,000
16,571
9,369
15,000
16,571
9,369
15,000
16,571
9,369
9,369
7,729
Value per
right*
$4.07
$5.18
$2.83
$3.65
$5.18
$2.83
$3.38
$5.18
$2.83
$3.38
$5.18
$2.83
$3.38
$5.18
$2.83
$2.83
$2.83
Vested %
RIGHTS TO DEFERRED SHARES
Vested
Number
64,875
-
-
15,570
-
-
12,975
-
-
12,975
-
-
12,975
-
-
-
-
Forfeited
Number
10,125
-
-
2,430
-
-
2,025
-
-
2,025
-
-
2,025
-
-
-
-
87%
-
-
87%
-
-
87%
-
-
87%
-
-
87%
-
-
-
-
39
Financial years in
which rights may vest
30-Sep-20
30-Sep-21
30-Sep-22
30-Sep-20
30-Sep-21
30-Sep-22
30-Sep-20
30-Sep-21
30-Sep-22
30-Sep-20
30-Sep-21
30-Sep-22
30-Sep-20
30-Sep-21
30-Sep-22
30-Sep-22
30-Sep-22
Max. value
yet to vest*
-
$428,982
$132,571
-
$114,452
$31,812
-
$85,838
$26,514
-
$85,838
$26,514
-
$85,838
$26,514
$26,514
$21,873
* This represents the 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.
5.5 Number of shares held by directors and other key management personnel
The movement during the financial year in the number of ordinary shares of the company held, directly or indirectly, by each director and other key
management personnel, including their personally related entities, is as follows:
HELD AT
1 OCTOBER 2019
RECEIVED ON EXERCISE OF
PERFORMANCE RIGHTS
OTHER –DRP, SALES
AND PURCHASES
HELD AT
30 SEPTEMBER 2020
Non-executive directors
M Iwaniw
M Carroll
F Grimwade
N Anderson
F Bennett
G Kingwill
Executive director
P Thompson
Other key management personnel
B Crump
P Ross
L Van Driel
B Brown
S Douglas
U Di Cecco
205,681
21,634
80,000
7,193
7,630
5,361
483,800
-
130,392
-
580
-
-
-
-
-
-
-
-
27,375
-
5,475
5,475
2,738
-
-
175
823
-
274
289
-
250
-
-
-
127
-
-
205,856
22,457
80,000
7,467
7,919
5,361
511,425
-
135,867
5,475
3,445
-
-
Select Harvests Annual Report 2020
40
Auditor’s Independence Declaration
Auditor’s Independence Declaration
As lead auditor for the audit of Select Harvests Limited for the year ended 30 September 2020, I
declare that to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Select Harvests Limited and the entities it controlled during the period.
Andrew Cronin
Partner
PricewaterhouseCoopers
Melbourne
30 November 2020
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Select Harvests Annual Report 2020 Annual Financial Report
41
ABOVE: Daniel Wilson, H2E Operations Manager, overseeing installation of the H2E bag filter
Select Harvests Annual Report 2020 42
Annual Financial Report
This financial report covers the Group consisting of Select Harvests Limited and its subsidiaries.
The financial report is presented in Australian currency.
Select Harvests Limited is a company limited by shares, incorporated and domiciled in Australia.
Its registered office 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 financial report.
The financial report was authorised for issue by the directors on 30 November 2020.
The Company has the power to amend and reissue the financial 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 financial reports and other information are available on our website: www.selectharvests.com.au
Select Harvests Annual Report 2020 Statement of Comprehensive Income
43
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2020
CONSOLIDATED ($'000)
NOTE
2020
2019
Revenue
Sales of goods and services
Other revenue
Total revenue
Other income
Fair value adjustment of biological assets
Gain on sale of assets
Total other income
Expenses
Cost of sales
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Finance costs
Others
PROFIT / (LOSS) BEFORE INCOME TAX
Income tax (expense)
PROFIT / (LOSS) ATTRIBUTABLE TO MEMBERS OF SELECT HARVESTS LIMITED
Other comprehensive income
Items that may be reclassified to profit or loss
Changes in fair value of cash flow hedges, net of tax
Other comprehensive income for the year
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO MEMBERS OF
SELECT HARVESTS LIMITED
5
5
6
6
6
6
7
247,876
386
248,262
13,988
291
14,279
(199,951)
(4,684)
(4,940)
(1,003)
(14,844)
(2,068)
1,611
36,662
(11,661)
25,001
4,383
4,383
29,384
Earnings per share for profit attributable to the ordinary equity holders of the company:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
25
25
26.0
25.9
The above statement should be read in conjunction with the accompanying Notes.
298,204
270
298,474
9,212
519
9,731
(201,636)
(4,344)
(6,652)
(1,232)
(14,827)
(3,957)
551
76,108
(23,086)
53,022
23
23
53,045
55.5
55.3
Select Harvests Annual Report 2020 44
Balance Sheet
AS AT 30 SEPTEMBER 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Biological assets
Derivative financial instruments
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Other receivables
Property, plant and equipment
Right-of-use assets
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Lease liabilities
Derivative financial instruments
Current tax liabilities
Deferred gain on sale
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Other payables
Borrowings
Lease liabilities
Deferred tax liabilities
Deferred gain on sale
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained profits
TOTAL EQUITY
The above balance sheet should be read in conjunction with the accompanying Notes.
CONSOLIDATED ($'000)
NOTE
9
10
11
12
13
14
15
16
17
18
12
19
20
16
17
18
7(c)
19
20
21
2020
1,451
69,154
100,549
42,432
3,811
217,397
1,891
298,715
236,444
70,447
607,497
824,894
42,517
6,235
31,264
-
5,398
175
5,473
91,062
3,525
52,750
233,513
36,312
2,452
270
328,822
419,884
405,010
279,096
14,280
111,634
405,010
2019
11,588
50,223
77,687
34,144
24
173,666
-
307,923
-
71,267
379,190
552,856
32,345
8,111
-
965
16,989
175
4,870
63,455
-
30,903
-
39,629
2,627
239
73,398
136,853
416,003
271,750
10,417
133,836
416,003
Select Harvests Annual Report 2020 Statement of Changes in Equity
FOR THE FINANCIAL YEAR
ENDED 30 SEPTEMBER 2020
Balance at 30 September 2018
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with equity holders in their capacity
as equity holders:
Contributions of equity, net of transaction costs and deferred tax
Dividends paid or provided
Employee performance rights
Balance at 30 September 2019
Adjustment on adoption of AASB 16- net of tax
Balance at 1 October 2019
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with equity holders in their capacity
as equity holders:
Contributions of equity, net of transaction costs and deferred tax
Deferred tax credit on transaction costs
Dividends paid or provided
Employee performance rights
Balance at 30 September 2020
* Nature and purpose of reserves
CONSOLIDATED ($'000)
NOTE
CONTRIBUTED
EQUITY
268,567
RESERVES*
9,802
RETAINED
EARNINGS
92,270
12
21
8
28
1
12
21
21
8
28
-
-
-
-
23
23
53,022
-
53,022
3,183
-
-
271,750
-
271,750
-
-
-
6,289
1,057
-
-
279,096
-
-
592
10,417
-
10,417
-
3,326
3,326
-
-
-
537
14,280
-
(11,456)
-
133,836
(19,391)
114,445
25,001
-
25,001
-
-
(27,812)
-
111,634
45
TOTAL
370,639
53,022
23
53,045
3,183
(11,456)
592
416,003
(19,391)
396,612
25,001
3,326
28,327
6,289
1,057
(27,812)
537
405,010
(i)
Asset revaluation reserve
The asset revaluation reserve was previously 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. A balance of $7.6 million (2019: $7.6 million) remains in the account.
(ii) Options reserve
The options reserve amounting to $4.2 million (2019: $3.7 million) is used to recognise the fair value of performance rights granted and expensed but not exercised.
(iii) Cash flow hedge reserve
The cash flow hedge reserve is used to record gains or losses on the fair value movements in the interest rate swap and foreign currency contracts in a cash flow hedge that are
recognised directly in equity. Balance at 30 September 2020 amounted to $2.4 million (2019: $0.9 million).
The above statement of changes in equity should be read in conjunction with the accompanying Notes.
Select Harvests Annual Report 2020
46
Statement of Cash Flows
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Interest and finance costs paid
Income tax received / (paid)
Net cash inflow from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Government grants related to assets
Proceeds from sale of property, plant and equipment
Payment for water rights
Payment for property, plant and equipment
Tree development costs
Net cash outflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
Repayments of borrowings
Proceeds from leases
Principal elements of lease payments
Dividends on ordinary shares, net of Dividend Reinvestment Plan
Net cash inflow / (outflow) from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Reconciliation to cash at the end of the year:
Cash and cash equivalents
Bank overdrafts
CONSOLIDATED ($'000)
NOTE
2020
2019
22
236,617
(189,755)
46,862
5
(15,440)
(18,274)
13,153
-
1,058
-
(26,103)
(10,216)
(35,261)
246,519
(193,769)
-
(21,848)
(21,523)
9,379
(12,729)
7,945
(4,784)
1,451
(6,235)
(4,784)
310,929
(229,779)
81,150
13
(3,959)
3,133
80,337
2,275
1,307
(1,185)
(20,361)
(15,940)
(33,904)
282,667
(313,067)
5,837
(5,596)
(14,939)
(45,098)
1,335
6,610
7,945
11,588
(3,643)
7,945
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial 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.
The above cash flow statement should be read in conjunction with the accompanying Notes.
Select Harvests Annual Report 2020 Notes to the Financial Statements
47
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated. The financial statements are for the Company consisting of Select Harvests
Limited and its subsidiaries. Where appropriate, comparatives have been reclassified to enhance comparability with current year disclosures.
(a) Basis of preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements
of the Australian Accounting Standards Board and the Corporations Act 2001. Select Harvests Limited is a for profit entity for the purpose of
preparing the financial statements.
Compliance with IFRS
The consolidated financial 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 financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial
assets, financial assets and liabilities (including derivative instruments) at fair value through the income statement and biological assets.
Critical accounting estimates
The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher level of judgement or
complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2.
New standards adopted during the financial year
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board
(‘AASB’) that are mandatory for the current reporting year as follows:
• AASB 16 Leases
• AASB 2018-1 Amendments to Australian Accounting Standards – Annual Improvements 2015 – 2017 (effective 1 January 2019)
• AASB 2018-2 Amendments to Australian Accounting Standards – Plan Amendment, Curtailment or Settlement (effective 1 January 2019)
• IFRIC 23 Uncertainty over Income Tax Treatments (effective 1 January 2019)
The following Accounting Standard, AASB 16 Leases is most relevant to the consolidated entity.
AASB 16 Leases
The Group has adopted AASB 16 from 1 October 2019 using the modified retrospective approach, under which the cumulative effect of initial
application is recognised in retained earnings on that date. Accordingly, the group has not restated comparatives for the 2019 reporting period, as
permitted under the specific transition provisions in the standard. The standard replaces AASB 117 ‘Leases’.
Lessee accounting
AASB 16 determines whether a contract contains a lease on the basis of whether the customer has the right to control the use of an identified asset
for a period of time in exchange for a consideration. This is in contrast to the concept of ‘risks and rewards’ in AASB 117.
On adoption of AASB 16, the group recognised lease liabilities in relation to leases which had previously been classified as ‘operating leases’ under
the principles of AASB 117 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s
incremental borrowing rate as of 1 October 2019. The Group recognised right-of-use assets to represent its right to use the underlying assets which
will be depreciated over the estimated lease term.
Where the Group acts as lessee, judgement has been applied to determine the lease term for some lease contracts that include renewal options.
The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount
of lease liabilities and right of use assets recognised.
Short term leases (lease term of 12 months or less) and leases of low-value items are recognised as lease expense on a straight-line basis as permitted
by the standard.
For leases previously classified as finance leases applying AASB 117, the Group recognised the carrying amount of the lease asset and lease liability
immediately before transition as the carrying amount of the right of use asset and the lease liability at the date of initial application. The measurement
principles of AASB 16 are only applied after that date.
Lessor accounting
The Group did not need to make any adjustments to the accounting for assets held as lessor under operating leases as a result of the adoption of
AASB 16.
Select Harvests Annual Report 2020 48
Notes to the Financial Statements
Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a) Basis of preparation (continued)
New standards adopted during the financial year (continued)
Impact on transition
On transition to AASB 16, the Group recognised right-of-use assets and lease liabilities. The impact upon transition is summarised below.
Recognition of right of use asset
Recognition of lease liabilities
Decrease to retained earnings (pre-tax)
Increase to deferred tax asset
1 OCTOBER 2019 ($'000)
210,081
237,77
19, 391
8,300
When measuring lease liabilities for leases that were classified as operating leases, the Group discounted the present value of the remaining lease
payments using the Group’s incremental borrowing rate at 1 October 2019. The incremental borrowing rate applied depended on the type of lease
and remaining lease term. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on 1 October 2019 was 4.99%.
In applying AASB 16 for the first time, the Group has used the following practical expedients permitted by the standard:
• The use of a single discount rate to a portfolio of leases with reasonably similar characteristics;
• The exclusion of initial direct costs for the measurement of the right-to-use asset at the date of initial application;
• Relying on previous assessments as to whether a lease is onerous;
• The use of hindsight in determining the lease term where the contract contains renewal options;
• Not separating the non-lease components from lease components thereby treating the lease as a single lease component.
Reconciliation of operating lease commitments to lease liability
Operating lease commitments disclosed as at 30 September 2019
Less: Leases of intangible assets out of AASB 16* scope
Discounted using the group’s incremental borrowing rate
Lease liability impact on transition
Add: Finance lease liabilities recognised as at 30 September 2019
Lease liability recognised as at 1 October 2019
Of which are:
Current lease liabilities
Non-current lease liabilities
1 OCTOBER 2019 ($'000)
339,551
(7,989)
(93,790)
237,772
35,371
273,143
31,460
241,683
273,143
* This relates to leases on water rights. Water rights are classified as intangibles and therefore excluded from AASB 16 scope.
Impact for the financial year on segment disclosures and earnings per share
EBITDA, segment assets and segment liabilities for 30 September 2020 all increased as a result of the change in accounting policy. The following
segments were affected by the change in policy:
($'000)
Almond division
Food division
Corporate
ADJUSTED EBITDA
1,223
1,678
23
2,924
SEGMENT ASSETS
234,440
1,985
19
236,444
SEGMENT LIABILITIES
(261,527)
(3,230)
(20)
(264,777)
As a result of the adoption of AASB 16, net profit after tax increased by $0.33 million while earnings per share increased by 0.03 cents per share for
the financial year ended 30 September 2020.
Please refer to note 14 and 18 for further information.
Select Harvests Annual Report 2020 49
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for the 30 September 2020 reporting periods
and have not been early adopted by the Company. The group’s assessment of these new standards and interpretations concluded that it will not
have a material impact on the financial statements of the Group in future periods. The new standards and interpretations are as follows:
• AASB 2018-6 Amendments to Australian Accounting Standards definition of a business- AASB 3 Business Combinations (effective 1 January 2020)
• AASB 2018-7 Amendments to Australian Accounting Standards definition of material- AASB 101and AASB 108 (effective 1 January 2020)
• AASB 2019-1 Revised conceptual framework for financial reporting (effective date 1 January 2020)
• AASB 2019-3 Interest rate benchmark reform on hedge accounting- AASB 7, AASB 9 and AASB 139 (effective 1 January 2020)
• AASB 2019-5 Disclosure of the effect of new IFRS standards not yet issued in Australia (effective 1 January 2020)
(b) Principles of consolidation
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also
eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the group.
(c) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial 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 financial statements are presented in Australian dollars,
which is the functional and presentation currency of Select Harvests Limited.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as
qualifying cash flow hedges.
(d) Comparatives
Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures.
(e) Rounding
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) under
the option available to the Company under ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191. The Company is an
entity to which the Class Order applies.
(f) Parent entity financial information
The financial information for the parent entity, Select Harvests Limited, disclosed in Note 30 has been prepared on the same basis as the consolidated
financial statements, except as set out below.
(i) Investments in subsidiaries and associates
Investments in subsidiaries and associates are accounted for at cost in the financial statements of Select Harvests Limited.
Select Harvests Annual Report 2020 50
Notes to the Financial Statements
Continued
2. 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 may not by definition, equal the related
actual results. The estimates and assumptions that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
Inventory - Current Year Almond Crop
The 2020 almond crop is classified as inventory once the crop is harvested in accordance with AASB 102 Inventories. The Company’s estimated average
almond selling price at the point of harvest was $8.20. This was based on various assumptions including future almond price, long term yield and foreign
exchange rates. Due to movements in almond prices between harvest and balance dates, the estimated average almond selling price at 30 September
2020 was $7.50, determined with reference to the Company’s committed sales contracts and current market values for uncommitted inventory. An
adjustment was made to inventory to reflect the net realisable value of the FY20 almond crop following the reduction in almond prices (see Note 10).
At balance date, the company had completed hulling and shelling of all its almonds with a yield of 23,250MT and 82% of this crop had been sold or
committed to be sold.
Carrying value of intangible assets
The Group tests annually whether intangible assets have suffered any impairment, in accordance with the accounting policy stated in Note 15. The
recoverable amounts of cash generating units have been determined based on value-in-use calculations.
Key assumptions and sensitivities are disclosed in Note 15.
3. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and commodity price risk), credit
risk and liquidity risk. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity
analysis in the case of interest rate risk, foreign exchange and other price risks, and ageing analysis for credit risk.
Risk management is carried out by management pursuant to policies approved by the Board of Directors.
(a) Market risk
(i) Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not
the 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. The Group also acquires capital related items internationally in both United States dollars and European euros.
Management and the Board review the foreign exchange position of the Group and, where appropriate, enter into a variety of derivative financial
instruments, transacted with the Group’s bankers to manage its foreign exchange risk, including forward foreign currency contracts, options and
formulating various strategies.
The exposure to foreign currency risk at the reporting date was as follows:
GROUP
Trade receivables net of payables
Overdraft
Foreign Exchange Contracts (FEC)
•
•
Sell foreign currency option contracts*
buy foreign currency (cash flow hedges)
sell foreign currency (cash flow hedges)
2020
(USD $'000)
13,347
(4,432)
2020
(EUR €'000)
(10)
-
2019
(USD $'000)
6,396
(2,458)
2019
(EUR €'000)
23
-
1,954
41,195
14,500
-
-
-
1,120
27,085
7,000
192
-
-
* Foreign currency option contracts have a number of possible outcomes depending on the spot rate at maturity. These contracts are shown at face value. Depending on spot rate at
maturity, the value of the contract can be USD$14.5 million (2019: USD$7 million) or USD$29 million (2019: USD$14 million).
Group sensitivity analysis
Based on financial instruments held at 30 September 2020, had the Australian dollar strengthened/weakened by 5% against the U.S. dollar and
the EUR, with all other variables held constant, the Group’s results for the period would have been $2,520,000 lower/$2,785,000 higher (2019:
$1,618,000 lower/$1,788,000 higher), mainly as a result of the U.S. dollar denominated financial instruments as detailed in the above table. Equity
would have been $2,938,000 lower/ $3,247,000 higher (2019: $1,812,000 lower/ $2,003,000 higher), arising mainly from forward foreign currency
contracts designated as cash flow hedges.
Select Harvests Annual Report 2020 51
(ii) Cash flow interest rate risk
The Group’s interest rate risk arises from borrowings issued at variable rates, which exposes the Group to cash flow interest rate risk. The Group’s
borrowings at variable interest rate are denominated in AUD.
At the reporting date the Group had the following variable rate borrowings:
Debt facilities (AUD)
Overdraft (USD)
An analysis of maturities is provided in (c) below.
2020
2019
INTEREST RATE (%)
BALANCE ($'000)
INTEREST RATE (%)
BALANCE ($'000)
0.94%
1.68%
52,750
4,432
Nil
1.93%
Nil
2,458
The Group analyses interest rate exposure on an ongoing basis in conjunction with the debt facility, cash flow and capital management. With the
current low interest rate environment and the future expectation that interest rates will be at low levels, management had not entered into any
interest rate swap agreement during the year.
Group sensitivity
At 30 September 2020, if interest rates had changed by +/- 25 basis points from the weighted average interest rate with all other variables held
constant, the result for the period would have been $100,000 lower/higher (30 September 2019: $4,000 lower/higher).
Interest rate risk
The Company’s exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities both recognised and
unrecognised at the balance date, are as follows:
FINANCIAL INSTRUMENTS
Floating Interest Rate
Non-interest bearing
Total carrying amount as per
the balance sheet
$('000)
(i) Financial assets
Cash
Trade and other receivables
Forward foreign currency
contracts
Interest Rate Swap
Total financial assets
(ii) Financial liabilities
Bank overdraft – USD @ AUD
Commercial Bills
Lease liabilities
Trade creditors
Other creditors
Forward foreign currency
contracts
Total financial liabilities
Financial Assets
2020
2019
2020
2019
-
-
-
-
-
6,235
52,750
264,777
-
-
-
-
-
-
-
-
3,643
-
35,371
-
-
-
1,451
69,154
3,811
11,588
30,163
24
-
74,416
-
41,775
-
-
-
23,290
19,227
-
-
-
-
18,621
13,724
965
2020
1,451
69,154
3,811
-
74,416
6,235
52,750
264,777
23,290
19,227
-
2019
11,588
30,163
24
-
41,775
3,643
-
35,371
18,621
13,724
965
323,762
39,014
42,517
33,310
366,279
72,324
Weighted average effective
interest rate
2020 (%)
2019 (%)
-
-
-
-
1.80
1.25
4.99
-
-
-
1.00
-
-
-
1.93
-
-
-
-
-
Collectability of trade receivables is reviewed on an ongoing basis. Trade receivables are carried at full amounts due less expected credit losses
which uses a lifetime expected loss allowance for all trade receivables.
Amounts receivable from other debtors are carried at full amounts due. Other debtors are normally settled on 30 days from month end unless there
is a specific contract which specifies an alternative date. Amounts receivable from related parties are carried at full amounts due.
Financial Liabilities
The bank overdraft disclosed within interest bearing liabilities 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.
Select Harvests Annual Report 2020 52
Notes to the Financial Statements
Continued
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(b) Credit risk
Credit risk arises from cash and cash equivalents, favourable derivative financial instruments and deposits with banks and financial institutions, as
well as credit exposures to wholesale, retail and farm investor customers, including outstanding receivables and committed transactions.
The Group has no significant concentrations of credit risk. The Group has policies in place to ensure that sales of products and services are made to
customers with an appropriate credit history. Derivative counterparties and cash transactions are limited to high credit quality financial institutions.
The credit quality of financial assets that are neither past due or impaired can be assessed by reference to external credit ratings (if available) and to
historical information. The majority of the Group’s sales are derived from large, established customers with no history of default.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the
carrying amount of those assets, net of any provisions for doubtful debts of those assets, as disclosed in the balance sheet and Notes to the financial
statements.
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade
receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days
past due. The expected loss rates are based on the payment profiles of sales over a period of 24 months and the corresponding historical credit
losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic
factors affecting the ability of the customers to settle the receivables.
The Group’s banking partners have long-term credit ratings of AA- and A+ (Standard and Poor’s).
(c) Liquidity risk
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets
and liabilities.
Financing arrangements
The following debt facilities are held with National Australia Bank (NAB) and Rabobank (Rabo).
DEBT FACILITIES
1. Term
2. Seasonal*
HELD WITH
RABO
NAB
RABO
3. Overdraft†
NAB
EXPIRY DATE
30/09/2023
28/02/2023
30/06/2021
28/02/2021
* The facility is reviewed annually and available for the period 1 March to 30 June each year
† Held with NAB only and reviewed annually.
FACILITY LIMIT
$30,000,000
$50,000,000
$20,000,000
$100,000,000
USD $5,000,000
AMOUNT DRAWN 30 SEPT 2020
$4,000,000
$48,750,000
Nil
AUD $52,750,000
USD $4,431,618
The interest rate paid on these facilities is determined by an incremental margin on the BBSY or LIBOR rate.
The Group had access to the following undrawn borrowing facilities at the reporting date:
FLOATING RATE
Term / Seasonal‡
Bank Overdraft Facility USD
‡ Subject to seasonal restrictions as mentioned above
2020 ($'000)
AUD $47,250
USD $568
2019 ($'000)
AUD $100,000
USD $2,542
The bank overdraft facility may be drawn at any time and may be terminated by the bank without notice. The debt facilities (term and seasonal) may
be drawn at any time over the term subject to restrictions noted above on the seasonal facility.
Select Harvests Annual Report 2020 53
Maturities of financial liabilities
The table below analyses the Group’s financial liabilities, net and gross settled derivative instruments into relevant maturity groupings based on the
remaining period at the reporting date of the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
($'000)
LESS THAN
6 MONTHS
6-12
MONTHS
1-5
YEARS
OVER 5
YEARS
TOTAL CONTRACTUAL
CASH FLOWS
CARRYING AMOUNT
(ASSETS) / LIABILITIES
Group at 30 September 2020
Non-derivatives
Variable Rate
Derivatives
Derivatives
Group at 30 September 2019
Non-derivatives
Variable Rate
Debt facilities
Trade and other payables
Lease liabilities
Bank Overdraft
FEC USD buy – outflow
FEC USD sell – (inflow)
USD Sell option
Net USD
Debt facilities
Trade and other payables
Lease liabilities
Bank Overdraft
FEC EUR buy – outflow
FEC USD buy – outflow
FEC USD sell – (inflow)
USD Sell option
Net USD
173,209
25,666
-
42,517
17,633
6,278
1,954
(20,195)
(7,500)
(25,741)
-
32,345
3,795
3,643
192
1,120
(15,626)
-
(14,506)
-
-
17,065
-
-
(21,000)
(7,000)
(28,000)
-
-
3,548
-
-
-
(11,459)
(7,000)
(18,459)
53,609
-
123,217
-
-
-
-
-
-
-
17,334
-
-
-
-
-
-
53,609
42,517
331,124
6,278
1,954
(41,195)
(14,500)
(53,741)
-
32,345
50,343
3,643
192
1,120
(27,085)
(7,000)
(32,965)
52,750
42,517
264,777
6,235
(42)
(3,905)
136
(3,811)
-
32,345
35,371
3,643
(1)
(23)
786
179
941
(d) Fair Value Measurement
The fair value of certain financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.
The fair value of financial instruments, such as interest rate swaps, foreign currency forwards and foreign currency options, are valued using specific
valuation techniques as follows:
• for interest rate swaps - the present value of the estimated future cash flows based on observable yield curves
• for foreign currency forwards - the present value of future cash flows based on the forward exchange rates at the balance sheet date
• for foreign currency options - option pricing models
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value
of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is
available to the Company for similar instruments.
Disclosures are required 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 30 September 2020 the group’s assets and liabilities measured and recognised at fair value comprised the forward foreign currency contracts and
foreign currency options. These are level 2 measurements under the hierarchy.
Select Harvests Annual Report 2020 54
Notes to the Financial Statements
Continued
4. SEGMENT INFORMATION
Segment products and locations
The segment reporting reflects the way information is reported internally to the Chief Executive Officer.
The Company has the following business segments:
•
•
Almond Division - grows, processes and sale of almonds to the food industry from company owned and leased almond orchards; and
Food Division - processes, markets, and distributes edible nuts, dried fruits, seeds, and a range of natural health foods.
The Company operates predominantly within the geographical area of Australia.
The segment information provided to the Chief Executive Officer is referenced in the following table:
($'000)
ALMOND DIVISION
FOOD DIVISION
2020
2019
2020
2019
ELIMINATIONS AND
CORPORATE
2020
2019
CONSOLIDATED
ENTITY
2020
2019
Revenue
Total revenue from external customers
Intersegment revenue
Total segment revenue
Other revenue
Total revenue
EBIT
Interest received
Finance costs expensed
Profit / (Loss) before income tax
Segment assets (excluding
intercompany debts)
Segment liabilities (excluding
intercompany debts)
Acquisition of non-current segment
assets
Depreciation and amortisation of
segment assets
102,483
73,607
176,090
375
176,465
41,807
-
(848)
40,959
744,786
153,866
51,771
205,637
255
205,892
82,235
-
(2,177)
80,058
469,491
145,393
2,957
148,350
6
148,356
3,348
-
(14)
3,334
73,584
144,338
3,775
148,113
15
148,128
5,011
-
-
5,011
73,197
-
(76,564)
(76,564)
5
(76,559)
(6,429)
5
(1,207)
(7,631)
6,524
-
(55,546)
(55,546)
-
(55,546)
(7,181)
55
(1,835)
(8,961)
10,170
247,876
-
247,876
386
248,262
38,726
5
(2,069)
36,662
824,894
298,204
-
298,204
270
298,474
80,065
55
(4,012)
76,108
552,858
(336,772)
(101,992)
(11,638)
(8,190)
(71,474)
(26,671)
(419,884)
(136,853)
57,072
34,375
2,634
16,792
13,939
1,325
675
320
432
940
1,520
60,138
36,570
847
19,057
15,106
Sales to major customers include Coles 19% and Woolworths 17% of total sales of the Food Division.
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief
operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified
as the Chief Executive Officer.
5. REVENUE
CONSOLIDATED ($'000)
Revenue from continuing operations
Sale of goods
Management services
Government grant and other revenue
Total revenue
Revenue Recognition
NOTE
2020
2019
241,899
5,977
386
248,262
293,811
4,393
270
298,474
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 when performance obligations are satisfied and control of the goods or
services have passed or provided to the buyer. The following specific recognition criteria must also be met before revenue is recognised:
Sale of Goods and Services
Control for the goods and services has been transferred to the buyer when the goods have been shipped to the customer or when services have
been provided.
Select Harvests Annual Report 2020 55
Management services
Management services revenue relates to services provided for the management and development of farms as well as acting sales agent for external
growers by selling almonds on their behalf. Sales for external growers are not included in the Group’s revenue. However, the Group receives a
marketing fee for providing this service. Revenue from providing services is recognised in the accounting period in which the services are rendered,
on the basis of quantity of almonds sold by Select Harvest on behalf of the external grower.
The above services are recognised as revenue when services are provided. All revenue is stated net of the amount of Goods and Services Tax (GST).
As at 30 September 2020 the group held almond inventory on behalf of external growers which was not recorded as inventory to the Group.
Government grants
Government grants are assistance by the government in the form of transfers of resources to the Group in return for past or future compliance with
certain conditions relating to the operating activities of the consolidated entity.
Government grants relating to income are recognised as income over the periods necessary to match them with the related costs. Government
grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the
Group with no future related costs are recognised as income of the period in which they become receivable.
Government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are deducted
from the carrying amount of the asset on the Balance sheet. The Grant is recognised in profit or loss over the life of the depreciable asset as a
reduced depreciation expense.
6. OTHER INCOME AND EXPENSES
CONSOLIDATED ($'000)
Profit before tax includes the following specific expenses:
Fair value adjustment at harvest of 2020/2019 almond crop
Release of margin on sales - 2020 and 2019 crop (2019: 2019 and 2018 crop)
Inventory write off
Depreciation of non-current assets:
• Buildings
• Plantation land and irrigation systems
• Plant and equipment
• Bearer plants
Total depreciation of non-current assets
Depreciation charge of right-of-use assets:
• Property
• Plant and equipment
• Orchard
Interest on leases
Amortisation of software
Employee benefits
Short term and low-value lease rental payments
Net (gain) / loss on disposal of property, plant and equipment
NOTE
2020
2019
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(64,611)
50,623
16,275
537
2,185
10,293
-
13,015
803
3,762
657
5,222
1,237
820
48,057
527
(291)
(88,620)
79,408
-
411
2,107
11,155
657
14,330
-
-
-
-
2,177
798
42,483
-
(519)
(a) Fair value adjustment relates to the recognition of 2020 and 2019 crop profits at the time of harvest.
(b) Fair value adjustment relates to the unwinding of 2020 and 2019 crop profits at the point of sale.
(c) Included in Cost of Sales are write down of inventories to net realisable value for 2020 almond crop (due to the market almond price reducing
from $8.20/kg to $7.50/kg) amounting to $16.28 million (2019: Nil).
(d) Depreciation on almond trees relating to Property, Plant and Equipment amounting to $5.98 million (2019: $5.23 million) was capitalised as part
of growing crop which will then unwind as part of cost of sales when the almonds are sold.
(e) Depreciation relating to Right-of-Use assets amounting to $11.89 million and $5.64 million was capitalised as part of growing crop and capital
work in progress respectively. This amount relates to orchard leases.
(f) Lease interest amounting to $7.63 million and $4.50 million was capitalised as part of growing crop and leasehold improvement respectively.
This amount relates to orchard leases.
(g) The expense represents lease rentals that are short-term leases (terms of 12 months or less) and leases of low-value assets charged directly to
the Statement of Comprehensive Income.
Select Harvests Annual Report 2020 56
Notes to the Financial Statements
Continued
7. INCOME TAX
CONSOLIDATED ($'000)
(a) Income tax expense
Current tax
Deferred tax
Over provided in prior years
Income tax expense is attributable to:
(Profit) from continuing operations
Aggregate income tax (expense)
NOTE
2020
2019
(7,222)
(4,162)
(277)
(20,717)
(2,265)
(104)
(11,661)
(23,086)
Deferred income tax benefit included in income tax expense comprises:
Increase / (Decrease) in deferred tax assets
(Increase) / Decrease in deferred tax liabilities
7(c)
7(c)
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit from continuing operations before income tax expense
Tax at the Australian tax rate of 30% (2019 – 30%)
Tax effect of amounts that are not deductible/ (taxable) in calculating taxable income
Other non-deductible items
(Under) / Over provided in prior years
Income tax (expense)
(c) Deferred tax liabilities (Non-current)
The balance comprises temporary differences attributable to:
Amounts recognised in profit and loss
Receivables
Inventory
Biological assets
Property, plant and equipment (includes bearer plants)
Right-of-use assets
Intangibles
Accruals and provisions
Lease liabilities
Amounts recognised directly in other comprehensive income
Cash flow hedges
Amounts recognised directly in equity
Equity raising costs
Net deferred tax liabilities
Movements:
Opening balance 1 Oct
Prior period under provision
Charged / (Credited) to income statement
Debited / (Credited) to other comprehensive income
Debited / (Credited) to equity
Closing balance at 30 September
(11,661)
(11,661)
1,219
(5,381)
(4,162)
36,662
(10,999)
(386)
(276)
(23,086)
(23,086)
1,899
(4,164)
(2,265)
76,108
(22,832)
(150)
(104)
(11,661)
(23,086)
11
5,974
9,194
33,626
67,883
749
(3,704)
(78,141)
35,592
28
5,810
10,243
35,881
-
871
(4,923)
(7,990)
39,920
1,143
(282)
(423)
36,312
39,629
30
4,162
1,425
(8,934)
36,312
(9)
39,629
37,197
203
2,239
(10)
-
39,629
Select Harvests Annual Report 2020 57
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 financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or
liabilities are settled, based on those tax rates which are enacted or substantively enacted. The relevant tax rates are applied to the cumulative
amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary
differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary
differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting
profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will
be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in
controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
(i) Investment allowances and similar tax incentives
Companies within the group may be entitled to claim special tax deductions for investments in qualifying assets or in relation to qualifying
expenditure (e.g. the Research and Development Tax Incentive regime in Australia or other investment allowances). The group accounts for such
allowances as tax credits, which means that the allowance reduces income tax payable and current tax expense. A deferred tax asset is recognised
for unclaimed tax credits that are carried forward.
(ii) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
• Where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised
as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
• Receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
Cash flows are included in the cash flow statement on a gross basis and the GST component of cash flows arising from investing and financing
activities, which is recoverable from, or payable to the taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
8. DIVIDENDS PAID OR PROPOSED FOR ON ORDINARY SHARES
CONSOLIDATED ($'000)
NOTE
2020
2019
(a) Dividends paid during the year
(i) Interim – paid 3 August 2020
Fully franked dividend 9c per share (30 September 2019: 12c paid on 5 July 2019)
(ii) Final – paid 6 January 2020
Fully franked dividend 20c per share (30 June 2018: 7c paid on 5 October 2018)
8,656
11,456
19,156
27,812
6,666
18,122
(b) Dividends proposed and not recognised as a liability.
A final fully franked dividend of 4 cents per share has been declared by the directors ($4,793,810)
(2019: 20 cents).
(c) Franking credit balance
Franking credits available for subsequent reporting periods based on a tax rate of 30% (2019: 30%)
23,901
34,531
The above amounts represent the balance of the franking account (presented as the gross dividend value) as at the end of the period, adjusted for:
(i) Franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date
(ii) Franking debits that will arise from the payment of dividends recognised as a liability at the reporting date.
Select Harvests Annual Report 2020 58
Notes to the Financial Statements
Continued
9. TRADE AND OTHER RECEIVABLES
CONSOLIDATED ($'000)
Trade receivables
Loss allowance
Other receivables
Prepayments
Trade Receivables
NOTE
2020
39,941
-
39,941
5,666
23,547
69,154
2019
29,350
(15)
29,335
828
20,060
50,223
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are recognised
initially at the amount of consideration that is unconditional and subsequently measured at amortised cost using the effective interest method.
Details about the Company’s impairment policies and the calculation of the loss allowance are explained below.
(a) Impairment of trade receivables
The group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.
The expected loss rates are based on the payment profiles of sales over a period of 24 months before 30 September 2020 and the corresponding
historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on
macroeconomic factors affecting the ability of the customers to settle the receivables.
The ageing analysis for the financial year ended 2020 was determined as follows:
GROSS CARRYING AMOUNT ($'000)
Current
Up to 3 months past due
More than 3 months past due
NOTE
30 SEPT 2020
37,908
2,033
-
39,941
30 SEPT 2019
28,037
1,206
107
29,350
Note:
Expected credit loss on aged receivables is immaterial and not disclosed above.
The closing loss allowances for trade receivables as at 30 September 2020 reconcile to the opening loss allowances as follows:
CONSOLIDATED ($'000)
NOTE
Opening loss allowances
Increase in loan loss allowance recognised in profit or loss during the year
Unused amount reversed
Receivables written off during the year
At 30 September
(b) Effective interest rates and credit risk
All receivables are non-interest bearing.
2020
15
-
-
(15)
-
2019
158
11
(154)
-
15
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 3 for more information on the risk management policy
of the Company as well as the effective interest rate and credit risk of current receivables.
(c) 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 2020 10. INVENTORIES
CONSOLIDATED ($'000)
Raw materials
Finished goods and work in progress
Other inventories
59
NOTE
2020
75,001
20,175
5,373
100,549
2019*
35,231
39,943
2,513
77,687
* 2019 Inventory amounting to $34.1million has been reclassed to biological assets in accordance with AASB141 Agriculture.
Inventories are valued at the lower of cost and net realisable value. Write-downs of inventories to net realisable value for 2020 almond crop (due to
the market almond price reducing from $8.20/kg to $7.50/kg) amounted to $16.28 million (2019- Nil). These were recognised as an expense during
the year and included in ‘Cost of Sales’ in the Statement of Comprehensive Income.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
• Raw materials and consumables: purchase cost on a first in first out basis;
• Biological assets reclassified as inventory (included within raw materials in the table above): the initial cost assigned to agricultural produce is the
fair value less costs to sell at the point of harvesting in accordance with AASB 141 Agriculture;
• Finished goods and work in progress: cost of direct material and labour and a proportion of manufacturing overheads based on normal operating
capacity; and
• Other inventories comprise consumable stocks of chemicals, fertilisers and packaging materials recorded at cost on a first in first out basis.
11. BIOLOGICAL ASSETS
CONSOLIDATED ($'000)
Growing almond crop
Reconciliation of changes in carrying amount of biological assets
Opening balance
Increases due to purchases / growing costs
Decreases due to harvest
Gain arising from changes in fair value
Closing balance
NOTE
2020
42,432
34,144
134,327
2019
34,144
31,432
106,957
(i)
(ii)
(190,650)
(192,865)
64,611
42,432
88,620
34,144
(i)
Includes biological assets reclassified as inventory at the point of harvest
(ii) Includes physical changes as a result of biological transformation such as growth. Net increments in the fair value of the growing assets are
recognised as income in the statement of Comprehensive Income.
Recognition and Measurement
Almond trees are bearer plants and are therefore presented and accounted for as property, plant and equipment (see note 13). However, almonds
growing on the trees are accounted for as biological assets until the point of harvest. Almonds are transferred to inventory at fair value less costs
to sell when harvested (see note 10). Biological assets relate to the almond crop and are measured at fair value less costs to sell in accordance with
AASB141 Agriculture. Where fair value cannot be reliably measured or little or no biological transformation has taken place, biological assets are
measured at cost.
At 30 September 2020, the biological asset balance relates to 2021 almond crop, which is recorded at cost and has little or no biological transformation.
The 2020 almond crop has been transferred to inventory when fully harvested.
The change in estimated fair value of the biological assets are recognised in the Statement of Comprehensive Income. Fair value measurements have
been categorised as Level 3 fair values based on the inputs to the valuation techniques used, which are not based on observable market data. It is
measured taking into account the following:
• Estimated future selling prices and estimated cash inflows based on forecasted sales;
• Estimated yields; and
• Estimated remaining growing, harvests, processing and selling costs.
Select Harvests Annual Report 2020 60
Notes to the Financial Statements
Continued
12. DERIVATIVE FINANCIAL INSTRUMENTS
CONSOLIDATED ($'000)
Current Assets
Forward exchange and option contracts – cash flow hedges
Total current derivative financial instrument assets
Current Liabilities
Forward exchange and option contracts – cash flow hedges
Total current derivative financial instrument liabilities
(a) Derivatives
NOTE
2020
3,811
3,811
-
-
2019
24
24
965
965
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value
at the end of each reporting period. 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 firm commitment (fair value hedge); or (2) hedges of highly probable forecast transactions (cash flow hedges).
(i) Hedge ineffectiveness
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to
ensure that an economic relationship exists between the hedged item and hedging instrument. The Company documents the relationship between
hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions.
For hedges of foreign currency purchases and sales, the Company enters into hedge relationships where the critical terms of the hedging
instrument match exactly with the terms of the hedged item. The Company therefore performs a qualitative assessment of effectiveness. If changes
in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging
instrument, the Company uses the hypothetical derivative method to assess effectiveness. Ineffectiveness may arise if the timing of the forecast
transaction changes from what was originally estimated or if there are changes in the credit risk.
In hedges of foreign currency purchases and sales, ineffectiveness may arise if the timing of the forecast transaction changes from what was
originally estimated, or if there are changes in the credit risk of Australia or the derivative counterparty.
(ii) 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.
(iii) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in the cash flow
hedge reserve within equity. The gain or loss relating to the ineffective portion is recognised immediately in Other Expenses in the Statement of
Comprehensive Income.
When option contracts are used to hedge forecast transactions, the Company designates intrinsic value options as the hedging instrument. Gains
and losses relating to the effective portion of the change in value of the options are recognised in the cash flow hedge reserve within equity.
When forward contracts are used to hedge forecast transactions, the Company designates the full change in fair value of the forward contract as the
hedging instrument. The gains or losses relating to the effective portion of the change in fair value of the entire forward contract are recognised in
the cash flow hedge reserve within equity.
Amounts accumulated in equity are reclassified in Cost of Sales in the Statement of Comprehensive Income in the periods when the hedged item will
affect profit or loss (for instance when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results
in the recognition of a non-financial asset (for example, inventory) or a non-financial liability, the gains and losses previously deferred in equity are
transferred from equity and included in the measurement of the initial cost or carrying amount of the asset or liability.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative
deferred 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 Other Expenses in the Statement of Comprehensive Income.
The Company entered into forward foreign currency contracts to buy and sell specified amounts of foreign currency in the future at stipulated
exchange rates. The objective of entering the forward foreign currency contracts is to protect the Company against unfavourable exchange rate
movements for highly probable contracted and forecasted sales and purchases undertaken in foreign currencies.
Select Harvests Annual Report 2020 At balance date, the details of outstanding foreign currency contracts are:
LESS THAN 6 MONTHS
FEC Buy USD Settlement
FEC Buy Euro Settlement
LESS THAN 6 MONTHS
FEC Sell USD Settlement
Option Sell USD Settlement
MORE THAN 6 MONTHS
FEC Sell USD Settlement
Option Sell USD Settlement
(iv) Credit risk exposures
SELL AUSTRALIAN DOLLARS ($'000)
2019
USD1,120
EUR192
2020
USD1,954
-
BUY AUSTRALIAN DOLLARS ($'000)
2019
USD15,626
-
2020
USD20,195
USD7,500
BUY AUSTRALIAN DOLLARS ($'000)
2019
USD11,459
USD7,000
2020
USD21,000
USD7,000
AVERAGE EXCHANGE RATE ($)
2020
0.73
-
AVERAGE EXCHANGE RATE ($)
2020
0.65
0.68
AVERAGE EXCHANGE RATE ($)
2020
0.69
0.65
61
2019
0.69
0.62
2019
0.68
-
2019
0.69
0.67
Credit risk for derivative financial instruments arises from the potential failure by counterparties to the contract to meet their obligations at maturity.
The credit risk exposure to forward exchange contracts and the interest rate swap 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 foreign currency
contracts should the counterparty not pay the currency it is committed to deliver to the Company at balance date was USD $53,740,749 (2019: USD
$32,966,036 and EUR $191,872).
The Company does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by
the Company.
(v) Hedging reserves
The Company’s hedging reserves as presented in Statement of Changes in Equity relate to the following hedging instruments:
CONSOLIDATED ($'000)
Closing balance 30 September 2018
Add: Change in fair value of hedging instrument recognised in OCI
Less: Reclassified from OCI to profit or loss
Less: Deferred tax
Closing balance 30 September 2019
Add: Change in fair value of hedging instrument recognised in OCI
Less: Reclassified from OCI to profit or loss
Less: Deferred tax
Closing balance 30 September 2020
INTRINSIC VALUE
OF OPTIONS
(206)
(178)
206
(8)
(186)
(137)
178
(13)
(158)
SPOT COMPONENT OF
CURRENCY FORWARDS
(721)
(762)
721
44
(718)
3,948
762
(1,413)
2,579
TOTAL HEDGE
RESERVES
(927)
(940)
927
36
(904)
3,811
940
(1,426)
2,421
Select Harvests Annual Report 2020 62
Notes to the Financial Statements
Continued
12. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
(vi) Market risk
The effects of the foreign currency related hedging instruments on the Company’s financial position and performance are as follows:
CONSOLIDATED ($'000)
Foreign currency forwards
Carrying amount asset
Notional amount
Maturity date
Hedge ratio
Change in discounted spot value of outstanding hedging instruments since 1 October
Change in value of hedged item used to determine hedge effectiveness
Weighted average hedged rate for the year (including forward points)
CONSOLIDATED ($'000)
Foreign currency forwards
Carrying amount asset / (liability)
Notional amount
Maturity date
Hedge ratio
Change in discounted spot value of outstanding hedging instruments since 1 October
Change in value of hedged item used to determine hedge effectiveness
Weighted average hedged rate for the year (including forward points)
Foreign currency options
Carrying amount asset / (liability)
Notional amount
Maturity date
Hedge ratio
Change in intrinsic value of outstanding hedging instruments since 1 October
Change in value of hedged item used to determine hedge effectiveness
Weighted average strike rate for the year
2020 BUY USD
2019 BUY USD
2019 BUY EUR
42
1,954
23
1,120
Oct - Nov 2020 Oct - Nov 2019
1:1
23
(23)
0.6874
1:1
42
(42)
0.7269
1
192
Nov 2019
1:1
1
(1)
0.6209
2020 SELL USD
2019 SELL USD
3,905
41,195
Oct 2020 - Sep 2021
1:1
3,905
(3,905)
USD$0.6678: AUD$1
(136)
14,500
Nov 2020-Aug 2021
1:1
(136)
136
USD$0.6627: AUD$1
(786)
27,085
Oct 2019 -July 2020
1:1
(786)
786
USD$0.6876: AUD$1
(179)
7,000
May-Aug 2020
1:1
(179)
179
USD$0.6745: AUD$1
Select Harvests Annual Report 2020 13. PROPERTY, PLANT AND EQUIPMENT
(a) Reconciliations
Reconciliations of the carrying amounts of property, plant and equipment for the current financial year.
BUILDINGS
PLANTATION LAND AND
IRRIGATION SYSTEMS
PLANT AND
EQUIPMENT
BEARER
PLANTS
CAPITAL WORK
IN PROGRESS
63
TOTAL
425,482
(131,798)
293,684
293,684
34,587
(788)
(19,560)
-
307,923
459,281
(151,358)
307,923
307,923
(36,085)
111,971
(35,227)
76,744
105,614
(64,388)
41,226
147,051
(29,030)
118,021
76,744
-
(694)
(2,107)
2,218
76,161
113,495
(37,334)
76,161
41,226
-
-
(11,155)
37,354
67,425
142,968
(75,543)
67,425
118,021
8,925
-
(5,887)
237
121,296
156,213
(34,917)
121,296
76,161
-
67,425
(13,309)
121,296
(22,776)
39,380
-
39,380
39,380
25,662
(94)
-
(39,932)
25,016
25,016
-
25,016
25,016
-
76,161
54,116
98,520
25,016
271,838
-
-
(2,186)
2,075
76,050
115,570
(39,520)
76,050
7,049
(782)
(10,294)
20,968
71,057
146,245
(75,188)
71,057
10,216
-
(5,980)
1,392
104,148
139,146
(34,998)
104,148
29,391
-
-
(24,738)
29,669
29,669
-
29,669
46,656
(782)
(18,997)
-
298,715
452,521
(153,806)
298,715
($'000)
At 30 September 2018
Cost
Accumulated depreciation
Net book amount
Year ended 30 September 2019
Opening net book amount
Additions
Disposals
Depreciation expense
Transfers between classes
Closing net book amount
At 30 September 2019
Cost
Accumulated depreciation
Net book amount
Year ended 30 September 2020
Opening net book amount
Finance lease assets reclassified to
right-of-use assets, see (b) below
and note 14
Restated opening net book
amount
Additions
Disposals
Depreciation expense
Transfers between classes
Closing net book amount
At 30 September 2020
Cost
Accumulated depreciation
Net book amount
Cost and valuation
21,466
(3,153)
18,313
18,313
-
-
(411)
123
18,025
21,589
(3,564)
18,025
18,025
-
18,025
-
-
(537)
303
17,791
21,892
(4,101)
17,791
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 flows which will be received from the assets’ employment
and subsequent disposal. The expected net cash flows have been discounted to present values in determining recoverable amounts.
An independent valuation was performed in September 2019 for specific assets of our Almond Division (owned orchards and Carina West Processing
Facility). The book value of the assets at 30 September 2020 was $169.8 million against the September 2019 market valuation of $249.7 million.
Select Harvests Annual Report 2020 64
Notes to the Financial Statements
Continued
13. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
(a) Reconciliations (continued)
An independent valuation was performed by CBRE in September 2019 for specific assets of our Almond Division (seven owned orchards and the
Carina West Processing Facility). The orchards were valued using a direct comparison summation and a discounted cashflow to determine their
market value. This was performed on the basis of ‘highest and best use’ being the most probable use of a property which is physically possible,
appropriately justified, legally permissible, financially feasible, and results in the highest value of the property being valued. The valuation approach
used for the processing facility was capitalisation of EBITDA and a productive unit basis to determine its market value. The book value of the assets
at 30 September 2020 was $169.8 million against the September 2019 market valuation of $249.7 million. As the inputs to determine the fair value are
unobservable, the valuation is considered Level 3 in the fair value hierarchy.
Depreciation
The depreciable amount of all fixed assets including buildings, but excluding freehold land 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. Bearer plants are assumed ready for use when a
commercial crop is produced from the seventh year post planting. The depreciation on the almond trees amounting to $5.98 million (30 September
2019: $5.23 million) was capitalised into the inventory cost base. Leasehold improvements are depreciated over the shorter of either the unexpired
period of the lease or the estimated useful lives of the improvements.
The useful lives for each class of assets are:
Buildings:
25 to 40 years
Plant and equipment:
5 to 20 years
Bearer plants:
Irrigation systems:
10 to 30 years
10 to 40 years
Capital works in progress
Capital works in progress are valued at cost and relate to costs incurred for owned orchards and other assets under development.
(b) Reclassification of Leased assets - 2019
As at 30 September 2019, plant and equipment and bearer plants included the following amounts where the group was a lessee under finance leases.
CONSOLIDATED ($'000)
Leasehold plant and equipment and bearer plants
At cost
Accumulated depreciation and impairment
Adjustment to 2019 finance lease recorded at 30 September 2019
Net book amount transferred to right-of-use assets on 1 October
NOTE
2019 RESTATED
47,643
(13,652)
33,991
2,094
36,085
14. RIGHT-OF-USE ASSETS
($'000)
At 1 October 2019
Transition from operating lease*
Finance leases reclassified to right-of-use assets†
At 1 October 2019*
Additions to right-of-use assets
Depreciation charge for the year
At 30 September 2020
NOTE
PROPERTY
PLANT AND EQUIPMENT
ORCHARD (a)
TOTAL
2,071
-
2,071
87
(803)
1,355
(b)
1,299
13,309
14,608
1,920
(3,995)
12,533
206,711
22,776
229,487
11,475
(18,406)
222,556
210,081
36,085
246,166
13,482
(23,204)
236,444
* Please refer to note 1 on adoption of new accounting standard.
†
In the previous year, the group only recognised lease assets and lease liabilities in relation to leases that were classified as ‘finance leases’ under AASB 117 Leases. The assets were
presented in property, plant and equipment and the liabilities as part of the group’s borrowings. These have now been transferred to Right-of-use assets and lease liabilities
respectively. For adjustments recognised on adoption of AASB 16 on 1 October 2019, please refer to note 1.
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial
amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives
received, any initial direct costs incurred, and an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever
is shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is expensed
over its estimated useful life. Right-of-use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less
and leases of low-value assets. Lease payments on these assets are expensed to the income statement as incurred.
Select Harvests Annual Report 2020
65
(a) Orchard
The orchards comprise leases with Arrow Funds Management, Rural Funds Management and Aware Super (formerly known as First State Super). A
total of 11,729 acres of land are leased over a 20 year term (with extension options) in which the Company has the right to harvest almonds and citrus
from the trees for the term of the agreement. The Company also has first right of refusal to purchase the properties in the event that the lessor
wishes to sell.
(b) Orchard depreciation
Depreciation relating to the orchards have either been capitalised as part of growing crop and leasehold improvements or expensed directly to the
Statement of Comprehensive Income.
15. INTANGIBLES
CONSOLIDATED ($'000)
At 30 September 2018
Cost
Accumulated amortisation
Net book amount
Year ended 30 September 2019
Opening net book amount
Acquisition
Amortisation of software
Closing net book amount
At 30 September 2019
Cost
Accumulated amortisation
Net book amount
Year ended 30 September 2020
Opening net book amount
Acquisition
Amortisation of software
Closing net book amount
At 30 September 2020
Cost
Accumulated amortisation
Net book amount
GOODWILL
BRAND
NAMES*
PERMANENT
WATER RIGHTS
SOFTWARE
TOTAL
25,995
-
25,995
25,995
-
-
25,995
25,995
-
25,995
25,995
-
-
25,995
25,995
-
25,995
2,905
-
2,905
2,905
-
-
2,905
2,905
-
2,905
2,905
-
-
2,905
2,905
-
2,905
37,540
-
37,540
37,540
319
-
37,859
37,859
-
37,859
37,859
-
-
37,859
37,859
-
37,859
3,922
(280)
3,642
70,362
(280)
70,082
3,642
1,664
(798)
4,508
70,082
1,983
(798)
71,267
5,586
(1,078)
4,508
72,345
(1,078)
71,267
4,508
-
(820)
3,688
71,267
-
(820)
70,447
5,586
(1,898)
3,688
72,345
(1,898)
70,447
* Brand name assets principally relate to the “Lucky” brand, which has been assessed as having an indefinite 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.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’s share of the net identifiable assets of the acquired
subsidiary/business at the date of acquisition. Goodwill is not amortised. Instead, goodwill is tested for impairment annually or more frequently
if events or changes in circumstances indicate that it might be impaired, and is carried at cost less any accumulated impairment losses. Gains and
losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units
for the purpose of impairment testing.
Brand names
Brand names are measured at cost. Directors are of the view that brand names have an indefinite life. Brand names are therefore not amortised.
Instead, brand names are tested for impairment annually or more frequently if events or changes in circumstances indicate that they might be
impaired, and are carried at cost less any accumulated impairment losses.
Permanent water rights
Permanent water rights are recorded at historical cost. Such rights have an indefinite life, and are not amortised. 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.
The Company’s portfolio of water rights is currently recorded at a historical cost value of $37.9 million (2019: $37.9 million). A market value
assessment was performed at the end of the financial year. This was completed by accessing the State Water Registers and determining the
median price for the applicable class of water rights. This value is then applied on a like basis to the company’s water portfolio. As water prices
fluctuate due to seasonal factors current market rates has been valued internally at $97.7 million (2019: $85.8 million). As the inputs to determine
the fair value are observable, the valuation is considered Level 2 in the fair value hierarchy.
Select Harvests Annual Report 2020
66
Notes to the Financial Statements
Continued
15. INTANGIBLES (CONTINUED)
Software
Costs associated with maintaining software programmes are recognised as an expense when incurred. Development costs that are directly
attributable to the design and testing of identifiable software products controlled by the group are recognised as intangible assets when the
following criteria are met:
• It is technically feasible to complete the software so that it will be available for use
• Management intends to complete the software to use it
• There is an ability to use the software
• It can be demonstrated how the software will generate probable future economic benefits
• Adequate technical, financial and other resources to complete the development of the software
• The expenditure attributable to the software during its development can be reliably measured
Directly attributable costs that are capitalised as part of the software include employee costs, consultant costs and an appropriate portion of relevant
overheads. Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use.
Software costs are amortised on a straight line basis over the period of their expected benefit, being 7 years.
Impairment of assets
Goodwill, brand names and permanent water rights that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).
(a) Impairment tests for goodwill and brand names
Goodwill is allocated to the Company’s cash-generating units (CGU) identified according to operating segment. The total value of goodwill and
brand names relates to the Food Division CGU. The recoverable amount of a CGU is determined based on value-in-use calculations which require
the use of assumptions. These calculations use cash flow forecasts based on financial projections by management covering a five-year period based
on growth rates taking into account past performance and its expectations for the future.
Assumptions made include current domestic and export contracts for branded products are maintained at current rates with a 2% volume growth
rate applied from FY22-FY25 (FY21 growth rate used was 27%). Industrial grade sales and crop marketing fees grow in line with the company’s
forecasted almond production growth rate and operating costs remain flat. Working capital movements are considered to fluctuate in line with
sales forecasts. Cash flow projections beyond the five-year period are not extrapolated, but a terminal value with a nil growth rate is included in
the calculations. A real pre-tax weighted average cost of capital of 10.0% (2019: 11.1%) was used to discount the cash flow projections. No material
changes in key assumptions arose during the period.
(b) Impact of possible changes to key assumptions
The recoverable amount of the goodwill and brand names in the Food Division Cash Generating Unit (CGU) exceeds its carrying amount based on impairment
testing performed at 30 September 2020. A decrease of 10% in the projected annual cash flows, or an increase of 1% in the pre-tax discount rate of 10% does
not result in an impairment of the goodwill and brand names. These changes would be considered reasonably possible changes to the key assumptions.
(c) Permanent water rights
The value of permanent water rights relates to the Almond Division 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.
16. TRADE AND OTHER PAYABLES
CONSOLIDATED ($'000)
Current
Trade creditors
Other creditors and accruals
Non-Current
Other creditors and accruals
NOTE
2020
2019
22,997
19,520
42,517
18,621
13,724
32,345
3,525
-
These amounts represent liabilities for goods and services provided to the Group prior to the end of the year which are unpaid. These amounts are
unsecured and are usually paid within 30 days of recognition.
Select Harvests Annual Report 2020 17. BORROWINGS
CONSOLIDATED ($'000)
Current - Secured
Bank overdraft
Finance lease*
Non-current - Secured
Debt facilities
Finance lease*
67
2019
3,643
4,468
8,111
-
30,903
30,903
NOTE
2020
6,235
-
6,235
52,750
-
52,750
* Finance lease liabilities were included in borrowings until 30 September 2019, but were reclassified to lease liabilities on 1 October 2019 in the process of adopting the new leasing
standard. Please refer to note 18 Leases for more information.
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 classified 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.
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.
(a) Interest rate risk exposures
Details of the Company’s exposure to interest rate changes on borrowings are set out in Note 3.
(b) Assets pledged as security
The bank overdraft and debt 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:
CONSOLIDATED ($'000)
Current
Floating charge
Cash and cash equivalents
Receivables
Inventories
Biological assets
Derivative financial instruments
Total current assets pledged as security
Non-current
Floating charge
Other receivables
Property, plant and equipment
Permanent water rights
Total non-current assets pledged as security
Total assets pledged as security
NOTE
2020
2019
1,451
69,154
100,549
42,432
3,811
217,397
1,891
298,715
37,859
338,465
555,862
11,588
50,223
77,687
34,144
24
173,666
-
273,932
37,859
311,791
485,457
Select Harvests Annual Report 2020
68
Notes to the Financial Statements
Continued
17. BORROWINGS (CONTINUED)
Financing arrangements
The Company has a debt facility available to the extent of $100,000,000 as at 30 September 2020 (30 September 2019: $100,000,000). The Company
has bank overdraft facilities available to the extent of USD$5,000,000 (2019: USD$5,000,000). The current interest rates at balance date are 1.44%
(2019: 2.30%) on the debt facility, and 1.675% (2019: 1.925%) on the United States dollar bank overdraft facility.
As part of the planned acquisition announced to the ASX on 1st October 2020, the company had received Commitment Letters from NAB and
Rabobank, subject to certain terms and conditions. This will increase the current facilities from $100 million to $160 million over a 3 year term plus a
short term facility of $53 million for working capital purposes of the new farm.
18. LEASE LIABILITIES
CONSOLIDATED ($'000)
Current
Non-current
NOTE
The following table sets out the maturity analysis of lease payments, showing the undiscounted lease payments after the reporting date.
CONSOLIDATED ($'000)
Within one year
Later than one year but not later than 5 years
Later than 5 years
NOTE
2020
31,264
233,513
264,777
2020
34,698
123,217
173,209
331,124
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments
to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the
consolidated entity’s incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease
payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when
the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend
on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the
following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and
termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of-use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written down.
Leases are secured with the orchards, property and plant and equipment.
19. DEFERRED GAIN ON SALE
CONSOLIDATED ($'000)
Current
Sale and leaseback
Non-Current
Sale and leaseback
NOTE
2020
175
2019
175
2,452
2,627
The deferred gain on sale relates to the sale and leaseback of bearer plants for three orchards that were sold to First State Super on 22 September
2015 and 1 January 2016. The lease is for a 20 year term.
20. PROVISIONS
CONSOLIDATED ($'000)
Current
Employee benefits
Others
Non-Current
Employee benefits
Provisions
NOTE
2020
5,218
255
5,473
2019
4,670
200
4,870
270
239
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow
of resources will be required to settle the obligation, and the amount has been reliably estimated.
Select Harvests Annual Report 2020 69
Employee benefits
This covers the leave obligations for long service leave and annual leave which are classified as either short-term benefits or other long-term benefits
explained below. The current portion of this liability includes all of the accrued annual leave, the unconditional entitlements to long service leave
where employees have completed the required period of service and also for those employees who are entitled to pro-rata payments in certain
circumstances. The entire amount of the provision is presented as current, since the group does not have an unconditional right to defer settlement
for any of these obligations.
Contributions are made by the Company to an employee superannuation fund and are charged as expenses when incurred.
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled wholly 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 benefits. All other short-term employee benefit obligations are presented
as payables.
(ii) Other long-term benefit obligations
The liability for long service leave and annual leave which is not expected to be settled wholly within 12 months after the end of the period in which
the employees render the related service is recognised in the provision for employee benefits 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 outflows.
21. CONTRIBUTED EQUITY
CONSOLIDATED ($'000)
(a) Issued and paid up capital
Ordinary shares fully paid
Contributed equity
Ordinary shares are classified as equity. The value of new shares or options issued is shown in equity.
(b) Movements in shares on issue
NOTE
2020
2019
279,096
271,750
2020
2019
NUMBER OF SHARES
95,736,628
$'000
271,750
NUMBER OF SHARES
95,226,349
856,584
43,801
-
96,637,013
6,289
-
1,057
279,096
510,279
-
-
95,736,628
$'000
268,567
3,183
-
-
271,750
Beginning of the year
Issued during the year
• Dividend reinvestment plan
• Long term incentive plan – tranche vested
•
Deferred tax credit on transaction costs
End of the year
(c) Performance Rights
Long Term Incentive Plan
The Company offers employee participation in long term incentive schemes as part of the remuneration packages for the employees. In determining
the quantum of rights offered the board considers a number of factors including: the corporate strategy; the appropriate mix of fixed and at risk
remuneration; the fair value and face value of the rights; and the 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. The market value of ordinary
Select Harvests Limited shares closed at $5.57 on 30 September 2020 ($7.69 on 30 September 2019).
(d) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of and
amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share
is entitled to one vote.
(e) Capital risk management
The group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns
for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt.
Select Harvests Annual Report 2020 70
Notes to the Financial Statements
Continued
22. RECONCILIATON OF THE NET PROFIT AFTER INCOME TAX TO THE NET CASH FLOWS FROM OPERATING ACTIVITIES
CONSOLIDATED ($'000)
Net profit / (loss) after tax
Non-cash items
Depreciation and amortisation
Depreciation right-of-use assets
Inventory fair value adjustment
Net (gain) / loss on sale of assets
Options expense
Deferred gain on sale
Lease interest
Changes in assets and liabilities
(Increase) / Decrease in trade and other receivables
(Increase) / Decrease in inventory
(Increase) / Decrease in biological assets
Increase / (Decrease) in trade payables
(Decrease) / Increase in income tax payable
(Decrease) / Increase in deferred tax liability
Increase in employee entitlements
Net cash flow from operating activities
Non cash financing activities
NOTE
2020
25,001
19,817
23,026
(13,988)
(291)
537
(175)
4,500
(20,822)
(6,587)
(8,288)
13,697
(11,591)
(3,317)
634
13,153
2019
53,022
20,358
-
(9,212)
(519)
592
(175)
-
(4,067)
4,732
(2,711)
(7,840)
23,393
2,432
332
80,337
During the current financial year ended 30 September 2020, the company issued 856,584 of new equity (30 September 2019: 510,279) as part of the
Dividend Reinvestment Plan.
(a) Net debt reconciliation
Net debt movement during the year/period as follows:
CONSOLIDATED ($'000)
Cash and cash equivalents
Borrowings- repayable after one year
Lease liabilities- repayable within one year
Lease liabilities- repayable after one year
Net debt
NOTE
(b)
2020
(4,784)
(52,750)
(31,264)
(233,513)
(322,311)
2019
7,945
-
(4,468)
(30,903)
(27,426)
($'000)
CASH/ BANK
OVERDRAFT
LIABILITIES FROM FINANCING ACTIVITIES
TOTAL
LEASES DUE
WITHIN 1 YEAR
LEASES DUE
AFTER 1 YEAR
BORROWINGS DUE
WITHIN 1 YEAR
BORROWINGS DUE
AFTER 1 YEAR
Net debt as at 30 September 2018
Cash flows - Principle
Cash flows - Interest
Acquisitions finance leases
Foreign exchange adjustments
Other non-cash movements
Net debt as at 30 September 2019
Adjustment on adoption of AASB16
Cash flows - Principle
Cash flows - Interest
Additions to leases
Foreign exchange adjustments
Other non-cash movements
Net debt as at 30 September 2020
6,610
4,605
-
-
(3,270)
-
7,945
-
(15,820)
-
-
3,091
-
(4,784)
(4,572)
7,845
(2,249)
(5,837)
-
345
(4,468)
(26,992)
35,215
(13,367)
(13,482)
-
(8,170)
(31,264)
(30,558)
-
-
-
-
(345)
(30,903)
(210,780)
-
-
-
-
8,170
(233,513)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(30,400)
30,400
-
-
-
-
-
-
(52,750)
-
-
-
-
(52,750)
(58,920)
42,850
(2,249)
(5,837)
(3,270)
-
(27,426)
(237,772)
(33,355)
(13,367)
(13,482)
3,091
-
(322,311)
Select Harvests Annual Report 2020 71
23. EXPENDITURE COMMITMENTS
Upon adoption of AASB 16 on 1st October 2019, the operating and finance lease commitments have been disclosed as lease liabilities, except for
leases on water rights which are classified as intangibles and therefore excluded from AASB16 scope.
(a) Operating lease commitments
Commitments payable in relation to leases contracted for at the reporting date but not recognised as liabilities:
CONSOLIDATED ($'000)
Minimum lease payments
• Within one year
• Later than one year and not later than five years
• Later than five years
Aggregate lease expenditure contracted for at reporting date
NOTE
2020
2019
11,022
10,831
-
21,853
30,260
112,180
197,111
339,551
Operating leases
The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the
leased item, are recognised as an expense on a straight line basis over the term of the lease.
CONSOLIDATED ($'000)
(i) Property and equipment leases (non-cancellable):
Minimum lease payments
• Within one year
• Later than one year and not later than five years
• Later than five years
Aggregate lease expenditure contracted for at reporting date
Property and equipment lease payments are for rental of premises, farming and factory equipment.
CONSOLIDATED ($'000)
(ii) Almond orchard leases:
Minimum lease payments
• Within one year
• Later than one year and not later than five years
• Later than five years
Aggregate lease expenditure contracted for at reporting date
NOTE
2020
2019
-
-
-
-
5,078
8,683
-
13,761
NOTE
2020
2019
-
-
-
-
25,182
103,497
197,111
325,790
The almond orchard leases comprises:
(i) A 20 year lease of a 512 acre (207 hectares) almond orchard and a 1,002 acre (405 hectares) lease from Arrow Funds Management in which the
Company has the right to harvest the almonds from the trees owned by the lessor for the term of the agreement. The Company also has first
right of refusal to purchase the properties in the event that the lessor wished to sell. Other leases within the consolidated entity have renewal
and first right of refusal clauses.
(ii) A 20 year lease of 3,017 acres (1,221 hectares) at Hillston with Rural Funds Management.
(iii) A 20 year lease of 5,877 acres (2,382 hectares) of almond and 722 acres (292 hectares) citrus orchards and approximately 599 acres (242 hectares)
for future development of almonds with Aware Super (formerly known as First State Super). The Company has the right to harvest the almonds
from the trees owned by the lessor for the term of the agreement. The Company also has first right of refusal to purchase the properties in the
event that the lessor wished to sell.
(b) Finance lease commitments
Commitments payable in relation to leases contracted for at the reporting date and recognised as liabilities:
CONSOLIDATED ($'000)
Within one year
Later than one year but not later than five years
Later than five years
Minimum lease payments
Future finance charges
Total lease liabilities
The present value of finance lease liabilities is as follows:
Within one year
Later than one year but not later than five years
Later than 5 years
Minimum lease payments
NOTE
2020
-
-
-
-
-
-
-
-
-
-
2019
7,240
14,765
28,233
50,238
(14,867)
35,371
5,258
8,717
21,396
35,371
Finance lease payments are for rental of farming equipment and bearer plants with a net carrying amount at 30 September 2019 of $11,338,106 and
$22,652,930 respectively.
Select Harvests Annual Report 2020 72
Notes to the Financial Statements
Continued
23. EXPENDITURE COMMITMENTS (CONTINUED)
(c) Capital commitments
Significant capital expenditure contracted for at the end of the reporting year but not recognised as liabilities is as follows:
CONSOLIDATED ($'000)
Property, plant and equipment
NOTE
2020
4,366
2019
9,667
24. EVENTS OCCURRING AFTER BALANCE DATE
On 1st October 2020, the Company announced to the ASX its proposed acquisition of the Piangil Almond Orchard for a consideration of $129 million
in cash plus a reimbursement of 2020/2021 growing costs. In addition, the company undertook an equity raising of $120 million at an offer price of
$5.20 per share to both institutional and retail investors. The combined share raising was successfully completed by 27 October with a total of 23.08
million shares issued. The expected date for completion of the Piangil Orchard acquisition will be in the 3rd week of December 2020. For further
details, please refer to the relevant announcements made to the ASX.
On 30 November 2020, the Directors declared a final fully franked dividend of 4 cents per share in relation to the financial year ended 30 September
2020 to be paid on 5 February 2021.
25. EARNINGS PER SHARE
CENTS
Basic earnings per share attributable to equity holders of the company
Diluted earnings per share attributable to equity holders of the company
NOTE
2020
26.0
25.9
The following reflects the income and share data used in the calculations of basic and diluted earnings per share:
CONSOLIDATED ($'000)
Basic earnings per share:
Profit attributable to equity holders of the company used in calculating basic earnings per share
Diluted earnings per share:
Profit attributable to equity holders of the company used in calculating diluted earnings per share
NOTE
2020
25,001
25,001
2019
55.5
55.3
2019
53,022
53,022
NUMBER OF SHARES
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
NOTE
2020
96,137,435
2019
95,530,334
96,517,979
95,873,271
Basic Earnings per share
Basic earnings per share are calculated by dividing the profit attributable to equity holders of the company by the weighted average number of
ordinary shares outstanding during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the weighted average
number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive ordinary shares, and after income
tax effect of interest and other financing costs associated with dilutive potential ordinary shares.
26. REMUNERATION OF AUDITORS
CONSOLIDATED ($)
Audit and other assurance services
Audit and review of financial statements
Other services
Total remuneration of PricewaterhouseCoopers
NOTE
2020
2019
337,600
-
337,600
273,000
-
273,000
Select Harvests Annual Report 2020 73
27. RELATED PARTY DISCLOSURES
(a) Parent entity
The parent entity within the consolidated entity is Select Harvests Limited.
(b) Subsidiaries
Parent Entity:
Select Harvests Limited (i)
Subsidiaries of Select Harvests Limited:
Kyndalyn Park Pty Ltd (i)
Select Harvests Food Products Pty Ltd (i)
Meriram Pty Ltd (i)
Kibley Pty Ltd (i)
Select Harvests Nominee Pty Ltd (i)
Select Harvests Orchards Nominee Pty Ltd (i)
Select Harvests Water Rights Unit Trust (i)
Select Harvests Water Rights Trust (i)
Select Harvests Land Unit Trust (i)
Select Harvests South Australian Orchards Trust (i)
Select Harvests Victorian Orchards Trust (i)
Select Harvests NSW Orchards Trust (i)
Jubilee Almonds Irrigation Trust Inc
(i) Members of extended closed group
(c) Key management personnel compensation
CONSOLIDATED ($)
Short term employment benefits
Post-employment benefits
Long service leave
Share based payments
COUNTRY OF INCORPORATION
PERCENTAGE OWNED (%)
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
2020
100
100
100
100
100
100
100
100
100
100
100
100
100
100
2019
100
100
100
100
100
100
100
100
100
100
100
100
100
100
NOTE
2020
3,684,049
191,550
78,195
490,541
4,444,335
2019
4,070,611
174,611
29,868
554,994
4,830,084
Other disclosures relating to key management personnel are set out in the Remuneration Report.
(d) Director related entity transactions
There were no director related entity transactions during the year.
(e) Directors’ interests in contracts
Michael Carroll is a director of Rural Funds Management, the responsible entity for Rural Funds Group, which leases orchards to Select Harvests.
Additionally, he was a director of Elders Limited until 2 July 2020, which supplies crop inputs, other farm related products and water brokering services
to Select Harvests. These transactions are on normal commercial terms and procedures are in place to manage any potential conflicts of interest.
Select Harvests Annual Report 2020 74
28. SHARE BASED PAYMENTS
Long Term Incentive Plan
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 performance period to participating employees on an annual basis. Rights vest each year, with half of the rights vesting upon achievement
of underlying earnings per share (EPS) and the other half vesting upon achievement of total shareholder return (TSR) targets. The underlying EPS
growth targets are based on the Cumulative Annual Growth Rate (CAGR) of the company’s underlying 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
Current Issues
Underlying EPS
Below 5% CAGR
5% CAGR
5.1% - 19.9% CAGR
20% or higher CAGR
TSR
Below the 50th percentile*
50th percentile*
51st – 74th percentile*
At or above 75th percentile*
RIGHTS TO VEST
Nil
25%
Pro rata vesting
50%
Nil
25%
Pro rata vesting
50%
* Of the peer group of ASX listed companies as outlined in the directors’ report.
Summary of performance rights over unissued ordinary shares
Details of performance rights over unissued ordinary shares at the beginning & ending of the reporting date and movements during the year are set out below:
30 September 2020
GRANT DATE VESTING
DATE
EXERCISE
PRICE
BALANCE
AT START OF
THE YEAR
(NUMBER)
GRANTED
DURING
THE YEAR
(NUMBER)
FORFEITED
DURING
THE YEAR
(NUMBER)
VESTED
DURING THE
YEAR
(NUMBER)
BALANCE AT END
OF THE YEAR
ON ISSUE
VESTED
PROCEEDS
RECEIVED
($)
SHARES
ISSUED
(NUMBER)
FAIR VALUE
PER SHARE
($)
FAIR VALUE
AGGREGATE
($)
20/10/2014
29/09/2016
02/12/2016
20/11/2017
29/04/2019
27/03/2020
30/09/2020
30/09/2020
30/09/2020
30/09/2020
30/09/2021
30/09/2022
30 September 2019
-
-
-
-
-
-
75,000
30,000
22,500
18,000
169,557
-
-
-
-
-
-
122,578
(10,125)
(4,050)
(3,037)
(2,430)
-
-
(64,875)
(25,950)
(19,463)
(15,570)
-
-
-
-
-
-
169,557
122,578
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4.21
3.23
3.23
3.65
5.18
2.83
-
-
-
-
878,305
346,896
GRANT DATE VESTING
DATE
EXERCISE
PRICE
BALANCE
AT START OF
THE YEAR
(NUMBER)
GRANTED
DURING
THE YEAR
(NUMBER)
FORFEITED
DURING
THE YEAR
(NUMBER)
VESTED
DURING THE
YEAR
(NUMBER)
BALANCE AT END
OF THE YEAR
ON ISSUE
VESTED
PROCEEDS
RECEIVED
($)
SHARES
ISSUED
(NUMBER)
FAIR VALUE
PER SHARE
($)
FAIR VALUE
AGGREGATE
($)
20/10/2014
29/09/2016
02/12/2016
20/11/2017
30/09/2020
30/09/2020
30/09/2020
30/09/2020
29/04/2019
30/09/2021
-
-
-
-
-
150,000
100,000
30,000
18,000
-
-
-
7,500
-
169,557
(47,625)
(59,050)
(9,524)
-
-
(27,375)
(10,950)
(5,476)
-
-
75,000
30,000
22,500
18,000
169,557
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4.21
3.23
3.23
3.65
5.18
315,750
96,900
72,675
65,700
878,305
Select Harvests Annual Report 2020 75
Fair value of performance rights granted
The assessed fair value at grant date is determined using a Monte Carlo 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 in the tables opposite included:
PERFORMANCE RIGHTS ISSUE
Share price at grant date
Expected volatility*
Expected dividends
Risk free interest rate
27 MARCH
2020
$7.05
40%
4.95%
0.35%
29 APRIL
2019
$6.49
40%
1.83%
1.33%
20 NOVEMBER
2017
$4.64
45%
2.13%
1.85%
2 DECEMBER
2016
$6.23
45%
7.87%
1.58%
29 SEPTEMBER
2016
$5.62
45%
7.87%
1.58%
20 OCTOBER
2014
$5.95
45%
3.31%
2.84%
* Expected share price volatility was calculated with reference to the annualised standard deviation of daily share price returns on the underlying security over a specified period.
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense were as follows:
CONSOLIDATED ($)
Performance rights granted under employee long term incentive plan
NOTE
2020
536,897
2019
592,102
Share-based payments
Share-based compensation benefits are provided to employees via the Select Harvests Limited Long Term Incentive Plan (LTIP).
The fair value of performance rights granted under the Select Harvests Limited LTIP is recognised as an employee benefit expense with a
corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become
unconditionally entitled to the performance rights. The fair value at grant date is independently determined using a Monte Carlo 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 reflect market vesting conditions, but excludes the impact of any non-market vesting conditions
(for example, profitability and sales growth targets). Non market vesting conditions are included in assumptions about the number of 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 benefit
expense recognised each period takes into account the most recent estimate. The impact of the revision to original estimates, if any, is recognised
in the income statement with a corresponding adjustment to equity.
29. CONTINGENT LIABILITIES
(i) Guarantees
Cross guarantees are given by the entities comprising the Group. Group entities are set out in Note 27(b).
(ii) Bank Guarantees
As at 30 September 2020, the company had provided $6.16 million (2019: $6.16 million) of bank guarantees as security for the almond orchard lease.
30. PARENT ENTITY FINANCIAL INFORMATION
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Balance Sheet
($'000)
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Shareholders’ Equity
Issued capital
Reserves
• Cash flow hedge reserve
• Options reserve
Retained profits
Total Shareholders’ Equity
Profit / (loss) for the year
Total comprehensive income / (expense)
2020
7,318
360,704
14,429
72,211
2019
12,407
302,523
2,869
7,283
278,039
271,750
3,479
4,216
2,759
288,493
32,707
37,090
(940)
3,679
20,751
295,240
30,840
30,863
Select Harvests Annual Report 2020 76
30. PARENT ENTITY FINANCIAL INFORMATION (CONTINUED)
(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 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' financial statements.
The amounts receivable/payable under the tax funding agreement is due upon receipt of the funding advice from the head entity, which is issued as
soon as practicable after the end of each financial year.
The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The funding amounts are
recognised as current intercompany receivables or payables.
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
(c) Guarantees entered into by parent entity
Each entity within the consolidated group has entered into a cross deed of financial 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.
Select Harvests Annual Report 2020 Directors' Declaration
77
In the directors’ opinion:
(a)
the financial statements and Notes set out on pages 41 to 76 are in accordance with the Corporations Act 2001, including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
giving a true and fair view of the consolidated entity’s financial position as at 30 September 2020 and of its performance for the
financial year ended on that date; and
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
at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group identified in
Note 27 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 30.
(b)
(c)
Note 1(a) confirms that the financial 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 Officer required under section 295A of the
Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
M Iwaniw
Chair
Melbourne, 30 November 2020
Select Harvests Annual Report 2020
78
Independent Auditor’s Report
Independent auditor’s report
To the members of Select Harvests Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Select Harvests Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 September 2020 and of its
financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
●
●
●
●
●
●
the balance sheet as at 30 September 2020
the statement of comprehensive income for the year then ended
the statement of changes in equity for the year then ended
the statement of cash flows for the year then ended
the notes to the financial statements, which include a summary of significant accounting policies
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Select Harvests Annual Report 2020 79
Select Harvests Annual Report 2020individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates. Materiality ●For the purpose of our audit we used overall Group materiality of $2.30 million. This representsapproximately 5% of the Group’s three year average of profit before tax, excluding the three month transitionperiod ended 30 September 2018.●We applied this threshold, together with qualitative considerations, to determine the scope of our audit andthe nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on thefinancial report as a whole.●We chose Group profit before tax because, in our view, it is the benchmark against which the performance ofthe Group is most commonly measured. We chose a three year average to address volatility in the profitbefore tax calculation caused by fluctuations in the almond price and yield between years.●We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonlyacceptable thresholds.Audit Scope ●Our audit focused on where the Group made subjective judgements; for example, significant accounting estimates involving assumptions and inherently uncertain future events. 80
Independent Auditor’s Report
Continued
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Audit and Risk Committee.
Key audit matter
How our audit addressed the key audit matter
Inventory valuation – current year almond
crop
(Refer to notes 2, 10 and 11)
The FY20 almond crop is classified by the Group as
inventory, given it has been fully harvested at the year
end. Australian Accounting Standards require
agriculture produce (such as almonds) from an entity’s
biological assets to be measured at fair value less costs
to sell at the point of harvest.
To measure the fair value at the point of harvest of this
agriculture produce, the Group applies various
assumptions including estimated yield, estimated
future selling price and estimated remaining growing,
harvest, processing and selling costs.
As outlined in Notes 2 and 11, the assumptions applied
include the estimated average almond selling price at
the point of harvest of $8.20 per kg, the crop estimate
for the Group’s orchards of 23,250MT based on
estimated harvest yield, and the estimated remaining
processing and selling costs.
Australian Accounting Standards require inventory to
be recognised at the lower of cost and net realisable
value. As outlined in Note 10, an adjustment of $16.3m
has been recognised in the period to write down
inventory to net realisable value.
We consider this to be a key audit matter because of the
financial significance of the almond crop to the Group’s
assets and profit for the year ended 30 September
2020 and the judgement involved in the assumptions.
Our audit procedures included, amongst others:
•
•
•
•
•
•
•
Developing an understanding of the Group’s
processes and controls over determining the
field weights of almonds produced and testing
the operating effectiveness of a sample of
related controls.
Comparing the actual yield for each orchard in
the current year to prior year levels, forecast
yields and discussing significant variances
with management.
Attending the Group’s stocktakes in
September 2020, where we observed the
Group’s count procedures and tested a sample
of inventory on hand to verify its existence.
Obtaining external confirmations for a sample
of third party inventory storage locations and
agreeing quantities per the confirmations to
the Group’s inventory listing.
Reconciling opening inventory to closing
inventory and testing a sample of inflows of
almonds from harvest, almonds processed
and sales outflows during the year.
Evaluating the Group’s ability to make
estimates of the fair value of the almond crop
and its net realisable value by comparing prior
estimates to actual selling prices achieved
since harvest, agreeing a sample of committed
sales to contracts and considering external
spot price information and the quality and
ageing of inventory on hand.
Assessing sources of estimation uncertainty in
uncommitted sales relating to global almond
price movements by comparing to external
industry information and market data.
Select Harvests Annual Report 2020 81
Select Harvests Annual Report 2020•Agreeing a sample of costs of harvesting andprocessing the almond crop during the periodto supporting documentation and agreeing theallocation of these costs to inventory at 30September 2020.•Testing the mathematical accuracy of theGroup’s almond crop valuation.•Evaluating the adequacy of the disclosuresmade in note 2, 10 and 11 in light of therequirements of Australian AccountingStandards.Carrying value of goodwill and brand names in the Food Division CGU (Refer to notes 2 and 15) Under Australian Accounting Standards, the Group is required to assess goodwill and indefinite life intangibles for impairment at least annually. An impairment is recognised where the estimated recoverable amount for each division is less than the carrying amount of the division’s intangible assets. The Food Division has goodwill and brand names of $28.9m at 30 September 2020. The Group performed an impairment assessment for the Food Division cash generating unit (CGU), calculating the value-in-use using a discounted cash flow model (the model). The model is based on the FY21 Board approved budget. Assumptions applicable to the model are described in note 15. We consider this to be a key audit matter due to the financial significance of the goodwill and brand names in the Food Division and the significant judgements and assumptions applied in estimating future cash flows and the discount rate. Our audit procedures included, amongst others: •Assessing whether the Group’s determinationof CGUs was consistent with our knowledge ofthe Group’s operations and its internalreporting, as required by AustralianAccounting Standards.•Testing the mathematical accuracy of thecalculations in the model.•Evaluating the Group’s cash flow forecasts forthe Food Division in the model and theprocess by which they were developed withreference to current year results, externalindustry information and market data.•Assessing that the forecast earnings wereconsistent with the Board approved budget,and that forecast growth rates are reasonablewith reference to our understanding of the keydrivers, including forecast harvest volumesand the almond price.•Comparing the previous three years’ forecastto actual results to assess the accuracy andreliability of the Group’s forecasting.•With the assistance of PwC valuation experts,assessing whether the discount rate applied inthe model is reasonable by comparing it tomarket data and comparable companies.•Considering the sensitivity of the model byvarying key assumptions such as volumegrowth rates and discount rates and assessingunder which assumptions an impairment 82
Independent Auditor’s Report
Continued
would occur and whether this was reasonably
possible.
•
Evaluating the adequacy of the disclosures in
notes 2 and 15 in light of the requirements of
Australian Accounting Standards.
Financing arrangements
(Refer to note 17)
Our audit procedures included, amongst others:
At 30 September 2020, the Group has borrowings of
$59.0m outstanding.
During the year, the Group entered into an
Implementation Deed and Sale Agreement to acquire
the Piangil orchard, which will be partially funded by
new debt facilities and for which the lenders have
provided conditional commitments to extend existing
facilities.
We consider this to be a key audit matter given the
financial significance of the Group’s borrowings,
commitments received from its lenders for new
facilities to partly fund the Piangil orchard acquisition,
and the importance of the capital structure for the
Group’s growth.
• Obtaining confirmations from the Group’s
lenders to confirm borrowings outstanding at
the balance date.
•
Reading the signed agreements and other
correspondence between the Group and its
lenders to develop an understanding of the
terms associated with its facilities, the
amounts available for drawdown, and the
terms of the conditional commitments offered
in connection with the Piangil acquisition.
• Where debt was classified as non-current,
evaluating the Group’s assessment that it had
an unconditional right to defer payment such
that there were no repayments required
within 12 months from the balance date.
•
•
Evaluating the debt maturity profile and
funding plan in light of our understanding of
the debt agreements in place.
Evaluating the adequacy of disclosures made
in note 17 in light of the requirements of
Australian Accounting Standards.
Accounting for bearer plants
(Refer to note 13)
Our audit procedures included, amongst others:
The Group accounts for its almond trees as property,
plant and equipment recorded at cost less accumulated
depreciation.
Under Australian Accounting Standards, the Group
capitalises growing and leasing costs proportionate to
maturity up to 7 years, when trees are deemed to reach
a mature commercial state. Depreciation of the tree
begins at this point on a units of production method,
reflecting the commencement of revenue generation by
the trees. Depreciation is charged over 10 to 30 years
depending on the maturity of the bearer plant.
•
•
Testing the amount and nature of a sample of
growing costs capitalised during the period to
supporting documentation for trees with a
maturity of up to 7 years old.
Evaluating the Group’s useful life assessment,
maturity of trees and yield profile
assumptions applied in the units of
production method for depreciation against
historical experience.
Select Harvests Annual Report 2020 83
Select Harvests Annual Report 2020At 30 September 2020 the Group had bearer plants with a carrying value of $104.1m, against which depreciation of $6.0m was charged during the year. This was a key audit matter due to the significance of: •the net book value of bearer plants to theGroup’s balance sheet.•estimates and judgements regardingcapitalisation of growing costs and the usefullife and depreciation profile of trees.•Evaluating the adequacy of disclosures madein note 13 in light of the requirements ofAustralian Accounting Standards.Other information The directors are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 September 2020, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of the financial 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 financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that 84
Independent Auditor’s Report
Continued
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 28 to 39 of the directors’ report for the
year ended 30 September 2020.
In our opinion, the remuneration report of Select Harvests Limited for the year ended 30 September
2020 complies with section 300A of the Corporations Act 2001.
Responsibilities
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.
PricewaterhouseCoopers
Andrew Cronin
Partner
Melbourne
30 November 2020
Select Harvests Annual Report 2020 ASX Additional Information
85
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 30 October 2020. The number of shareholders, by size of holding, in each class of share is:
NUMBER OF ORDINARY SHARES
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
The number of shareholders holding less than a marketable parcel of shares is:
NUMBER OF ORDINARY SHARES
14,024
(b) Twenty largest shareholders
NUMBER OF SHAREHOLDERS
5,150
4,381
1,013
719
41
NUMBER OF SHAREHOLDERS
623
The following information is current as at 30 October 2020. The names of the twenty largest registered holders of quoted shares are:
1. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2. J P MORGAN NOMINEES AUSTRALIA LIMITED
3. CITICORP NOMINEES PTY LIMITED
4. NATIONAL NOMINEES LIMITED
5. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
6. UBS NOMINEES PTY LTD
7. BNP PARIBAS NOMS PTY LTD
8. BNP PARIBAS NOMS PTY LTD
9. SMARTEQUITY EIS PTY LTD
10. MR JOHN PATERSON
11. RATHVALE PTY LIMITED
12. MIRRABOOKA INVESTMENTS LIMITED
13. ETIAM PTY LIMITED
14. INVIA CUSTODIAN PTY LIMITED
15. REZANN PTY LTD
16. COSTA ASSET MANAGEMENT PTY LTD
17. INVIA CUSTODIAN PTY LIMITED
18. PAKA NOMINEES PTY LTD
19. BRAZIL FARMING PTY LTD
20. BRANKA NOMINEES PTY LTD
Total securities of Top 20 holdings
Remaining holders balance
Total
NUMBER OF SHARES
22,097,801
21,222,958
15,267,570
5,803,557
5,194,065
4,527,864
2,195,994
1,042,076
620,342
557,142
400,315
374,531
364,967
350,000
312,777
238,029
215,000
210,165
209,842
202,516
81,407,511
38,311,885
119,719,396
PERCENTAGE OF SHARES
18.46%
17.73%
12.75%
4.85%
4.34%
3.78%
1.83%
0.87%
0.52%
0.47%
0.33%
0.31%
0.30%
0.29%
0.26%
0.20%
0.18%
0.18%
0.18%
0.17%
68.00%
32.00%
100%
(c) Substantial shareholders
The substantial shareholders as disclosed by notices received by the Company as at 30 October 2020 are:
Paradice Investment Management Pty Ltd
Perpetual Limited
Yarra Funds Management Limited
(d) Voting rights
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.
NUMBER OF SHARES
9,041,243
6,648,533
6,460285
% HOLDING
9.40%
6.91%
6.69%
Select Harvests Annual Report 2020
86
NOTES
Select Harvests Annual Report 2020 Corporate Information
ABN 87 000 721 380
DIRECTORS
M Iwaniw (Chair)
P Thompson (Managing Director)
M Carroll (Non-Executive Director)
F S Grimwade (Non-Executive Director)
N Anderson (Non-Executive Director)
F Bennett (Non-Executive Director)
G Kingwill (Non-Executive Director)
COMPANY SECRETARY
B Crump
REGISTERED OFFICE - SELECT HARVESTS LIMITED
360 Settlement Road
Thomastown VIC 3074
Postal address
PO Box 5
Thomastown VIC 3074
Telephone (03) 9474 3544
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
WEBSITE
www.selectharvests.com.au
TM
Supplies bulk product
to major bakeries,
manufacturers and
wholesalers who
depend on quality
and service.
Product range
muesli, cereal and oats
Distribution
major supermarkets
(muesli) and export
markets including
Hong Kong, Singapore,
Malaysia, Indonesia
and the Pacific Rim
Product range
muesli, dried fruit,
wholefoods, nuts
and snacks
Distribution
Health aisle of major
supermarkets and
export markets
including Hong Kong,
Singapore, Malaysia,
Indonesia and
the Pacific Rim
Product range
almonds and other
nuts, dried fruit, seeds,
nut pastes, pralines
and muesli
Bulk and
convenient packs
Products sold to
local and overseas
food manufacturers,
wholesalers,
distributors and
re-packers
Market leader
in the cooking
nut category
Cooking Nut
product range
almonds, walnuts,
cashews, brazil nuts,
pine nuts, pistachios,
macadamias, hazelnuts,
peanuts, sunflower
seeds and pepitas
Snacking
product range
portion control packs
and Lucky Smart Snax
Distribution
major supermarkets
and export markets
including the Middle
East, Indonesia,
Papua New Guinea and
China
Select Harvests Limited
ABN 87 000 721 380
PO Box 5
Thomastown VIC 3074
360 Settlement Road
Thomastown VIC 3074
T (03) 9474 3544
F (03) 9474 3588
E info@selectharvests.com.au
ASX ticker code: SHV
Company Websites
www.luckynuts.com.au
www.sunsol.com.au
www.nuvitality.com.au
Company Instagram Sites
www.instagram.com/select_harvests/
www.instagram.com/lucky.nuts/
www.instagram.com/sunsol_muesli/
www.instagram.com/nuvitalityau/
Select Harvests Limited
www.selectharvests.com.au