NZSX Listing Profile - Turners and Growers

a fresh 

opportunity 

Turners & Growers Group 

Organising Participant 

Goldman Sachs JBWere (NZ) Limited 

NZSX Listing Profile

a fresh 

listing. 

Table of 

Contents 

Chairman’s Letter 4 

Managing Director’s Letter 6 

An Introduction To Turners & Growers 8 

Business Overview 12 

Investment Overview 18 

Financial Information 20 

Directors and Senior Management 27 

Corporate Governance 32 

Profile Of The Business 33 

Trading Prospects And Risks 46 

Additional Information 50 

Financial Statements 58 

Auditors’ Report 86 

Glossary 87 

Directory 88

Largest network of domestic fresh produce markets 

Daily markets operated in Auckland, 

Wellington, Christchurch and 

regionally, facilitating the sale of 

more than 200 million kg of fresh 

fruit and vegetables annually 

Largest Australasian marketer and exporter of apples 

Exports and markets between 30% 

and 40% of New Zealand’s annual 

apple crop (more than 125 million 

kg of apples) 

New Zealand’s largest tomato producer 

Forecast to produce more than 

7 million kg of tomatoes in 2004 

Turners & Growers 

Imports and sells 35 million kg 

of Bonita bananas annually 

Turners & Growers Group Listing Document 1

2 

Largest domestic producer of apple, 

carrot and berry juices 

14 million litres of juice 

concentrate produced annually 

New Zealand’s largest hirer of 

recyclable produce containers 

Owner and supplier of more than 

1.4 million pallets, crates and bins 

Employs in excess of 1,500 seasonal and full time staff 

Statistics per share 

NZ$ per share Group 

12 months to 

31 December 2003 

Actual 

Earnings Per Share 0.17 

Dividends Per Share (1) 0.12 

Total Assets Per Share 3.88 

Net Asset Backing Per Share 2.55 

Turners & Growers Group Listing Document 

(1) Dividends in respect of 2003 earnings were 

paid out in April 2004. Any dividend determined 

by the Directors in respect of 2004 earnings will 

be paid to shareholders in 2005. 

Share Price ($) 

4.00 

3.50 

3.00 

2.50 

2.00 

1.50 

Operator of New Zealand’s largest flower auctions 

Approximately 65 million stems 

handled annually 

Owner and operator of specialised fresh 

produce transportation 

Trucking fleet travels in excess 

of 4 million kms annually 

One of the largest operators of fruit cool stores 

throughout New Zealand 

Turners & Growers Share Price Chart 

Announce possible 

spin-out of 

Turners Auctions 

Shareholder approval 

for spin-out of 

Turners Auctions 

Enters merger 

discussions 

with ENZA 

Completion of 

acquisition of 

Status Produce 

T&G and ENZA 

Board approve 

merger 

Shareholders 

approve merger 

with ENZA 

Successful 

IPO of Turners 

Auctions 

(Note 1) 

Announce $11.7m NPAT 

and potential spin-off of 

juice company Enzafoods 

Jan 01 Apr 01 Jul 01 Oct 01 Jan 02 Apr 02 Jul 02 Oct 02 Jan 03 Apr 03 Jul 03 Oct 03 Jan 04 Apr 04 

SOURCE: IRESS 

Note 1: 

The divestment of Turners Auctions Limited occurred 

on 26 April 2002 under a court approved scheme 

of arrangement. Turners & Growers bought back 

20% of its existing share capital in consideration 

for transferring one Turners Auctions Limited share 

for every ten Turners & Growers shares repurchased. 

The effect of the scheme of arrangement was to reduce 

the number of Turners & Growers shares on issue by 

5,626,574 to 22,506,271 and to reduce the Group’s net 

assets by an amount in excess of $7.2 million at book 

value, with the removal of Turners Auctions Limited 

and its subsidiary Turners Fleet Limited. 


4 

Chairman’s Letter 

Although the present company was established in 

1921, the business reaches back to 1897 when Edward 

Turner became active in fruit and produce wholesaling, 

auctioneering and fruit importing, supported over time 

by his nine sons. 

In the succeeding century the business prospered and 

grew into the nation’s largest and best known fruit and 

produce wholesale company. For many years the 

shares were held by three main groups; producer/ 

suppliers, members of the Turner family, many of 

whom were active in the business, and staff. Our share 

register currently has in excess of 900 shareholders. 

In 2002 the Group separated out the motor vehicle and 

plant auction business of Turners Auctions Limited into 

a separate company which is now listed and trading on 

the NZSX. 


Dear Shareholder, the Directors of Turners & 

Growers Limited welcome the opportunity to 

present this profile of the Group. We are a long 

established New Zealand company with a 

proud history in the fresh produce and 

horticultural industries. We have a proven track 

record and are committed to growing our 

business both domestically and internationally. 

Approximately eighteen months ago Turners & Growers 

acquired ENZA Limited (successor to the New Zealand 

Apple and Pear Marketing Board) and the Group has 

since successfully realised a number of the benefits and 

cost savings identified at the time of the acquisition. 

One of our core strategic objectives is to continually 

review our existing operations as the market place 

evolves. As the market continues to change the Board 

believes there are likely to be opportunities for investment 

in projects directly related to our business that will have 

the effect of achieving a greater degree of vertical 

integration in certain key areas. The Board is determined 

to “stick to its knitting” and not become distracted by 

opportunities which lie beyond our core business 

franchise, unless for very compelling reasons. We are 

first and foremost a fresh fruit and produce company. 

One part of the Group is ENZAFOODS, which is 

essentially a manufacturing company producing a 

number of food ingredients, related products and pure 

juice concentrates – most notably apple and carrot 

juices. The Board considers this business lies 

somewhat outside its core fresh fruit and produce 

operations and is therefore moving in due course to 

separate ENZAFOODS in a similar way to Turners 

Auctions. This separation is likely to occur at some 

point after the NZSX listing of Turners & Growers. 

Among other things, the listing of Turners & Growers: 

• will provide access to a more sophisticated market 

for our shares; 

• will provide increased awareness of the Company in 

the New Zealand capital markets; 

• should allow shareholders to more easily trade their 

shares; 

• will open the door to new investors; and 

• will enable the Company to more efficiently access 

the capital markets in the future should it wish. 

I hope that the material we have put together for this 

Profile will be informative and of interest. 

Yours sincerely, 

A I (Tony) Gibbs, Chairman 


5

6 

Managing Director’s Letter 

Dear Shareholder, Turners & Growers Limited is a mature company in the New 

Zealand commercial landscape with a proud history and family origins dating back 

to the 1890’s. Over the years it has become the pre-eminent fruit and produce 

wholesale company, its name being inextricably linked to the industry it serves. 

This hasn’t happened accidentally. It has earned this profile through the 

consistent and reliable service it has provided to the two key customer 

groups: growers and buyers. These two groups are major 

components in a supply chain stretching from the producer’s 

field to the consumer’s evening meal. Turners & Growers 

is a central fulcrum around which the daily supply of 

produce revolves. On the one hand it receives orders based 

on retailers’ needs to restock shelves with fresh produce 

daily, and on the other it is an outlet for producers who 

have product available, ripe today and ready to harvest. 

These two complementary, yet opposing requirements 

create the market place in which the Company operates. 

Essentially, its core function is to consolidate orders to 

producers and to deconsolidate the physical supply to 

individual buyers in accordance with their requirements, 

all within a few hours of harvest. 

In serving the needs of local buyers and producers the 

Company has long been involved in the business of 

importing and exporting fresh produce. This adds variety 

and extends the range of produce available to New 

Zealand consumers and the markets available to New 

Zealand growers. 

On the import side our largest single commodity is 

bananas, and we have had a proud association with the 

Noboa Organisation (Bonita) for many decades. In 

export, the recent acquisition by Turners & Growers of 

ENZA, with all its offshore distribution infrastructure, has 


significantly strengthened the Group across a wide 

range of New Zealand grown produce as well as 

remaining, under deregulation, the largest exporter of 

apples and pears. 

The Company continues to invest in expanding the 

Status tomato production facility and associated packing 

line which provides a direct investment in the second 

most important domestic commodity handled by the 

Group behind bananas. This, coupled with all of the 

associated ancillary activities in transport, prepacking, 

flower auctions, fruit packing, hire containers, 

coolstorage, ripening facilities and property investments, 

makes the Group a dynamic and multi-faced enterprise. 

The Company’s fortunes are linked to factors affecting 

production, supply and demand. Crop cycles, pests and 

diseases, weather, world market production, exchange 

rates, interest rates and perishability factors all 

contribute to revenue volatility. By virtue of its scale 

and diversity the Group is less subject to such 

volatility. 

Turners & Growers has a vision of being a major 

participant in world horticulture through direct 

investment and strategic alliances. The Company has 

a strong brand identity in ENZA and Bonita in 

particular, and is poised to act on new opportunities 

as these arise. One of these opportunities is world 

distribution rights for the new apple variety JAZZ, 

which is just coming on stream and is expected to be 

a mainstream apple variety of the future. 

From its family beginnings in the 19th century, 

Turners & Growers has expanded and is now listing 

on the NZSX which will “open up” the Company to 

the world. The Board hopes there will continue to be 

a representative number of grower shareholders who 

have formed the historical investor base, and that this 

number will grow over time. 

Our industry is full of change and Turners & Growers 

is prepared to tackle this head on. The 21st century 

should indeed be an exciting one. 

Yours sincerely, 

Michael R. Dossor, Managing Director 


7

An Introduction to Turners & Growers

Turners & 

Growers ENZA 

1897 Edward Turner, an orchardist 

who had emigrated from England, 

expanded his retail fruit business 

to include fruit importing and 

wholesale auctioneering, operating 

from premises just off Queen Street. 

1899 Moved 

to the original 

city markets 

site near the 

Auckland 

Town Hall. 

1906 With all nine 

sons becoming 

involved in the 

business, Edward 

renames his firm 

E. Turner & Sons. 

1913 Began 

selling 

strawberries 

In 1918 the business moved to the Viaduct Basin area 

in Auckland where it remained until the early 1990’s. 

Turners & Growers Limited was incorporated on 

20 January 1921 as the result of a merger between 

E Turner and Sons and the Auckland Provincial 

Fruitgrowers’ Cooperative Society. 

From its establishment the Company acted as an 

auctioneer and commission selling agent for local 

growers whilst also operating an imported fruit 

business. Today, fruit and produce sales are conducted 

by negotiation, either on a consignment or purchase 

basis, with only the flower auctions now remaining. For 

1918 Moved into 

the new city 

markets in the 

Viaduct Basin, 

Auckland, where it 

remained until 1993. 

1918 E. Turner 

and Sons 

Limited 

registered. 

1920 Turner family 

negotiates with members 

of the Auckland Provincial 

Fruitgrowers Coop 

to form a joint 

venture company. 

1921 Turners 

& Growers 

Limited is 

incorporated 

as a public 

company. 

History The present fruit and vegetable wholesale business had its origins 

in 1897 when Edward Turner (an orchardist who had emigrated from 

Cambridgeshire, England in 1883) expanded his retail fruit business to include 

fruit importing and wholesale auctioneering. The business took up premises 

off Queen Street, Auckland (near where His Majesty’s Theatre later stood) and 

then moved into the original city markets near the Auckland Town Hall. Over 

time all nine of Edward’s sons became involved in various aspects of the 

business and the family company of E Turner and Sons evolved. 

1937 Turners & Growers had become the 

biggest fruit importer in New Zealand, but 

in 1937 the Government nationalised the 

fruit importing industry by setting up the 

Internal Marketing Division. This was not 

successful and disbanded 14 years later. 

approximately the first sixty years Turners & Growers 

had a number of associated lines of business. Most 

notable were live poultry, grains, a farmers’ retail 

supplies business, horticultural supplies, fertilizers and 

chemicals, and fresh eggs, egg grading equipment and 

egg pulp. Much of the egg pulp was exported. Over 

time the business was rationalised and these other 

revenue streams were let go or sold. 

Other business activities included ownership of 

Daihatsu New Zealand Limited, Cawthray Motors 

Limited and Motorcycle Distributors Limited, all of 

which were eventually sold to bring the group closer to 

its core activities. 

Initially Turners & Growers’ business was conducted 

only from the Auckland market but it soon started to 

expand regionally, often by forging alliances through 

acquisition of partial shareholding interests in existing 

family controlled fruit and produce wholesale 

companies. 

By 1993 Turners & Growers had purchased all of the 

shareholdings in the subsidiary companies held by 

outside interests and was able to consolidate the 

fresh business into a single entity, Turners & Growers 

Fresh Limited, with the benefit of centralised 

administrative, finance and IT functions. This resulted 

in a number of efficiencies and a more appropriate 

governance structure. 

During the past two decades the Company’s major 

regional markets have been relocated into more modern 

premises. The most significant relocation was that of the 

Auckland markets in 1993 from the Viaduct Basin in 

downtown Auckland to the current site at Mt Wellington. 

In 1992 the Noboa Organisation (which has exported 

Bonita bananas from Ecuador to New Zealand for more 

than 40 years) acquired a 25% stake in the Company. 

Today Turners & Growers sells more than 35 million 

kilograms of Bonita bananas and the Noboa 

Organisation remains the Company’s largest grower 

shareholder, with a 10.1% shareholding interest. 

In 2000 the Company entered a joint venture with the 

Tregidga family to set up new glasshouses for growing 

tomatoes in Mangere, Auckland. The success of the 

tomato operations resulted in the joint venture 

acquiring another glasshouse tomato grower, Status 

Produce Limited. The tomato growing business was 

then further enhanced by obtaining the exclusive 

licence to use the “Beekist” trademark in New Zealand 

in respect of fresh tomatoes. The “Beekist” trademark 

is widely regarded as a premier brand in New Zealand 

hothouse tomato production. As at September 2004 

Turners & Growers owns more than 50 acres of 

hothouses capable of producing between 7 and 8 

million kilograms of tomatoes per annum. 

In May 2002 the Company split out Turners Auctions 

Limited, the motor vehicle and plant and general 

auction division, as a stand-alone company. Following 

its separation Turners Auctions was owned directly by 

Turners & Growers’ shareholders and managed by its 

own board of directors. Turners Auctions was listed on 

the NZSX in October 2002. 

10 Turners & Growers Group Listing Document 


1940s 

Commenced 

car auctions 

1946 New Zealand Apple and Pear 

Marketing Board becomes the sole 

agency responsible for the exporting 

of apples and pears from New Zealand 

1940 New era of 

expansion that would 

eventually see 16 

produce markets owned 

or controlled throughout 

New Zealand 

1954 Established 

Fiji Export Agency 

to source and ship 

bananas and other 

produce to 


1956 Commenced 

selling apples and 

pears as 

commission 

agent for the 


Apple and Pear 

Marketing Board 

1956 Proposed 

(but did not patent) 

the name Kiwifruit 

for the Chinese 

gooseberry 

1959 Sent one 

of the first 

consignments 

of fresh fruit ever 

carried by ship-board 

refrigerated container 

1961 First 

kiwifruit 

exporter 

to reach 

250,000 trays 

sent overseas 

1962 Commencement 

of juice processing 

operations 

1962 Egg 

Distributors 

set up and 

becomes 

the largest 

wholesale egg 

distributing 

firm in 

New Zealand. 

1966 Opening 

of the New 

Auckland City 

Markets in 

the Viaduct 

Basin, Auckland 


Car Auctions 

established as a 

separate business 

and grows to control 

80% of all cars 

auctioned in 


1969 

“King Kiwi” 

brand 

registered 

as a trademark 

1973 First 

refrigerated reefer 

container load of 

kiwifruit shipped to 

the U.K. First chartered 

shipload fully loaded 

with onions for Europe. 

First refefer containers 

of onions to Canada 

11

12 

1974 First exporter to 

charter an aircraft solely 

to carry kiwifruit to Europe. 

Pioneered and developed the 

system used for pre-cooling 

kiwifruit and was the first 

to use pallets to speed up 

fruit handling. 

1975 Introduction 

of Royal Gala 

and Braeburn 

apple varieties. 



presented 

with the Trade 

Promotion 

Council’s 

Export Award 

In December 2002, the Company acquired ENZA 

Limited from Guinness Peat Group plc. This provided 

the Company with opportunities to: 

• combine the export operations of Turners & Growers 

and ENZA into a single marketing structure; 

• rationalise property holdings; and 

• realise synergies through combining returnable 

container, transport and warehousing operations as 

well as support services in administration, finance, 

accounting and information systems. 

The above timeline sets out some of the Group’s more 

important milestones and highlights the spirit of 

adaptability that has enabled it to survive and thrive 

through the years. It is these same qualities which have 

pervaded the recent successful merger with ENZA and 

which now make this listing on the New Zealand Stock 

Exchange the next major milestone in its history. 




export over 

one million 

trays of kiwifruit 

within a 

12 month 

period. 

1982 Receive 

the Governor- 

General’s 

export 

award for 

exceptional 

export 

performance. 

1984 A record 

530 containers 

of squash 

exported 

1987 Introduction 

of the Omniport 

spiral conveyor fruit 

loading system 

1987 Turners & 

Growers export 

11.7 million trays 

of kiwifruit, 25% of 

New Zealand’s total 

kiwifruit exports 

1987 Government 

establishes the 

Kiwifruit Marketing 

Board and prohibits 


from exporting 

kiwifruit 

1988 Export crop 

amounted to 

9 million tray carton 

equivalents (“tce”) 

1988 Purchase of 

domestic markets 

businesses owned 

by Wrightson 

Horticulture. 

Business 

Overview 

Fresh Domestic Produce 

1991 “ENZA” brand 

introduced by New Zealand 

Apple and Pear Marketing 

Board for its export pipfruit 

1992 Noboa 

Organisation, 

owner of the 

Bonita banana 

brand, buys 25% 

of the shares in 

Turners & 

Growers 

Turners & Growers’ business can 

be broadly categorised into six 

inter-related but separate activities. 

The Fresh Domestic business focuses on the wholesale 

distribution of fresh fruit, produce and flowers to the 

retail trade throughout New Zealand, and various 

supporting activities (including provision of returnable 

crates, bins and pallets, transport and prepacking 

services). The business is primarily conducted through 

the subsidiary Turners & Growers Fresh Limited. During 

2003 the Company facilitated the distribution of 

approximately $330 million of produce from growers 

to retailers. 

1993 Pacific 

Series reaches 

commercial 

export quantities 

1993 Auckland 

markets moved 

from Viaduct Basin 

to new premises 

at Monahan Road, 

Mt. Wellington 

1994 Export 

crop reached 

12 million tce 

1994 Listed 

public company, 

Guinness Peat Group 

plc (“GPG”) buy 

a 42% interest in 


1995 Decommission 

of Omniport spiral 

conveyor fruit 

loading system 

1995 Tony Gibbs 

of GPG elected 

chairman. As a 

mandarin grower 

he is the first grower 

to assume the role 

2000 Joint venture 

established with the 

Tregidga family to 

set up a new tomato 

glasshouse growing 

venture in Mangere 

Fresh Export Business 

2000 As a result of the Apple and 

Pear Restructuring Act 1999, the 

New Zealand Apple and Pear Board is 

taken over by the newly formed ENZA 

Limited, a grower owned company 

2001 Newly established Apple and Pear 

Export Committee issues permits to exporters 

who were not in direct competition to ENZA 

2001 Government deregulates the 

pipfruit industry 

This business focuses on the export of fruit and other 

produce from New Zealand. The largest single 

commodity exported is apples supplemented by 

various other fruits and produce according to availability 

and seasonal demand. The business is primarily 

conducted through ENZA Limited. In 2003 ENZA 

exported more than 133 million kilograms of produce 

throughout the world. The international operation also 

holds the proprietary rights to sell all JAZZ apple 

production for the next 20 years. To date there has 

been more than 2,000 acres of JAZZ planted in North 

America, Europe, Australia and New Zealand. 

In addition to pipfruit, the Group exports and markets a 

number of other New Zealand grown fruit and produce. 

These exports are seasonal and service markets which 

have sufficiently strong demand so as to sustain the 

transportation costs. Our King Kiwi brand is recognised 

as a premium quality New Zealand label. 

2002 ENZA changes constitution to 

permit any investor to purchase shares 

ENZA head office moved from Wellington to 

Hawkes Bay. JAZZ plantings established. 

2002 Split out and list Turners Auctions Limited, as a 

stand alone company owned directly by the shareholders. 

Acquire glasshouse business of Status 

Produce Limited, in Tuakau securing year 

around production of tomatoes. 

Primary Production and Packing 

2002 Acquisition 

of ENZA from 

GPG for shares. 

GPG’s interest in 


increases to 78.3% 

The Company has a major investment in glasshouses 

engaged principally in the production of tomatoes for 

the local market with some produce also being 

exported. The business is primarily 

conducted through the subsidiary Status Produce 

Limited. During 2003 Status produced approximately 

5.5 million kilograms of tomatoes and in 2004 

expects to produce more than 7 million 

kilograms. During the past twelve months 

Turners & Growers has increased glasshouse 

capacity by 40%, from about 35 acres as at 

June 2003 to 50 acres as at September 2004. 

This business is supported by an integrated 

packhouse operation which packs tomatoes 

and other produce, most notably mandarins, 

on behalf of Status and external growers. 

In response to increasing food hygiene 

protocols for export fruit and a reduction in the 

number of grower pack-houses able to costeffectively 

meet the required standards, the 

2002 GPG is successful in its 

offer to acquire all ENZA shares 

Export crop reaches 20 million 

tce, industry wide 


13

14 

Company entered a joint venture in Nelson for the 

creation of a new state-of-the-art apple and pear 

packing complex. This new business, Latitude 41 

Limited, has just completed its 2004 season having 

packed in excess of 550,000 tce against an original 

first season target of 350,000 tce. The venture, 

in which Turners & Growers holds a half-share, 

has been profitable from start-up and is expected 

to handle increasing quantities of product from 

the Nelson region over future seasons. 


Group Property Holdings 

Turners & Growers hold significant investments in realty 

to facilitate its operations. As at December 2003 

Turners & Growers owned property assets valued at 

more than $117 million. The business is primarily 

conducted through Turners & Growers Limited and two 

subsidiary companies specialising in property 

ownership. 

Property is held almost entirely for the purposes of 

Group operations. Any surplus facilities are offered for 

external rental, or put up for sale where segregation is 

practicable. The Group has a policy of divesting noncore 

property assets. 

All Turners & Growers business units pay rentals 

calculated on a commercial rental basis on any Group 

property occupied. Tenancies are drawn up in 

accordance with normal landlord/lessee practice. 

Horticultural Cycle 

Apples and Pears 

Domestic Produce 

Imported Produce 

Logistics Services 

Funding 

Financing Growers 

INPUTS 

Transport Transport Transport 

Containers Containers Containers 

The Group has traditionally provided funds to growers to 

assist them to grow produce usually for export but 

occasionally for the local market. While most advances are 

relatively modest and funded from internal sources, export 

pipfruit is funded by a banking consortium for up to $150 

million annually depending upon the fruit volume 

contracted each season. ENZA Finance and ENZA Pipfruit, 

as the borrowers, are obliged under their banking 

arrangements to acquire legal title to all fruit subject to the 

advances. Other members of the Group do not guarantee 

the funding advanced. As a result the Group consolidates 

the entire pipfruit advance activity into the financial 

statements. Bank drawings for grower advances are fully 

repaid by the end of each export season. 

The activities of ENZA Finance provide a platform for 

possible future development into retail financing for 

Turners & Growers’ large customer base. Turners & 

Growers believes that there is potential for expansion of 

this subsidiary into a wide range of allied horticultural 

funding activities. 

Logistics Logistics Logistics 

Coolstore Coolstore Coolstore 

Packing 

Marketing 

Growing Growing Growing 

Landlord Landlord Landlord 

Sourcing Sourcing Sourcing 

Funding Funding Funding 

OUTPUTS 

ENZAFOODS New Zealand Limited 

Exports (ENZA Brand Pipfruit) 

Exports of Other Produce 

Domestic Markets 

Flower Auctions 

Logistics Services 

Shareholder Returns 

The juice processing business comprises the 

manufacture of juice concentrates, (mainly from apples, 

carrots and berries) and a range of related 

manufactured products (including apple slices, aromas 

and apple sauce) which service the food industry in 

New Zealand and overseas. The business is primarily 

conducted through the subsidiary ENZAFOODS 

New Zealand Limited. 

The business is relatively stand alone from the 

operations of the rest of the Group although it does 

provide an outlet for produce (predominantly apples) 

which are not of the requisite standard to sell as 

whole fresh product. 


15

16 

Core Values 

Turners & Growers is proud to participate in an industry 

which purveys goodness and fresh healthy products 

to the end consumer and whose operations are 

non-damaging to the environment. 

Turners & Growers endeavours at all times to promote a 

culture of integrity in all of its dealings. The Group recognises 

the competitive market place and the need to provide good 

service and honesty, and to live up to the expectations 

of stakeholders who rely on it for their livelihood. 

The Company is proud that in over a century of 

business it has never missed its payment cycles 

to suppliers or creditors. It recognises that certainty 

of on-time payment, a strong credit rating, and robust 

core operations, are the basis of attraction to our 

grower suppliers. 

The Company actively encourages collaborative staff 

values and strives to be a good employer and to 

contribute to the wider community through various 

charitable endeavours. 


Turners & Growers Turnover* by Major 

Division for the year to 31 December 2003 

Reasons For Listing 

Domestic 

Other 

ENZAFOODS 

Status 

International 

* Note: Turnover in 2003 was $970 million. 

Turnover does not equate to operating 

revenue as turnover includes the value of 

consignment sales. Projected turnover 

composition for the year to 31 December 

2004 is expected to be similar. 

Turners & Growers’ shares traded on the unlisted 

securities market prior to its closure on 30 June 2004. 

As a consequence of this closure, the Company 

decided to pursue a full NZSX listing. 

The main drivers for moving to list on the NZSX 

include: 

• allowing our shareholders to more easily trade 

their shares; 

43.6% 

• to encourage greater liquidity in the Company’s 

shares through increased market awareness; 

6.7% 

8.1% 

2.5% 

39.1% 

• to enable the shares to be priced more efficiently 

and accurately; and 

• enabling the Company to more efficiently access 

the capital markets in the future should it wish. 

Turners & Growers Core Values 

Turners & Growers is proud to 

participate in an industry which 

purveys goodness and fresh 

healthy products to the end 

consumer and whose 

operations are non-damaging 

to the environment. 


18 

The investment in 

ENZA the leading 

exporter of pipfruit 

from New Zealand to 

world markets has 

ensured a balance 

between the seasonal 

exports of pipfruit and 

the other horticultural 

products making 

the Group a year 

round produce 

exporter. 


Investment Overview 

Unique and Innovative 

Turners & Growers today is the amalgamation of a wide 

range of investments and businesses that collectively 

offer investors the opportunity to become part of an 

integrated horticultural and produce group that is 

unique in the New Zealand business environment. 

It represents the accumulated knowledge of 100 plus 

years of representing growers to their markets in New 

Zealand and throughout the world. Turners & Growers 

created the name “Kiwifruit” and promoted it to world 

markets long before the advent of industry regulation. 

The Group continues to be the innovators and leaders 

in the fresh produce market in New Zealand. In 

particular the Company has a vision that the appropriate 

response to threats to New Zealand’s international 

markets caused by impending worldwide free trade 

initiatives is to constantly lift the quality and food safety 

rating of our produce on offer. We need to differentiate 

ourselves in the market place through produce and 

process quality. 

The Company is also supporting initiatives to increase 

access to a range of product from areas not currently 

available for phytosanitary and biosecurity reasons. 

Increasingly, the Group is considering international 

opportunities as a response to the more limited 

growth opportunities inherent in the more stable 

domestic industry. 

International Opportunities 

The investment in ENZA, the leading exporter of pipfruit 

from New Zealand to world markets, has ensured a 

balance between the seasonal exports of pipfruit and 

the other horticultural products making the Group a 

year round produce exporter. 

ENZA complements Turners & Growers’ export 

programme for other produce, achieving significant 

efficiencies through the use of a single infrastructure, 

both onshore and offshore. The Company now has the 

facilities and ability to consistently access markets all 

year round. 

The Global Variety Development Programme (“GVDP”) 

has ensured that new apple and pear varieties are 

available to ENZA growers worldwide. The latest 

commercial apple product JAZZ is already a success on 

the international apple stage. 

A cross between the popular Royal Gala and Braeburn 

varieties, JAZZ has proved to be extremely popular with 

consumers in Europe and North America. ENZA has the 

exclusive rights to sell and market JAZZ apples. In 

2006, the JAZZ apple will reach significant commercial 

production. Once full production is finally achieved 

(assumed to be in 2012), it is expected that JAZZ will 

provide around 6 million tce of additional volume for 

ENZA to exclusively pack, market and distribute 

throughout the world. Turners & Growers expects that 

the Northern and Southern hemisphere will each 

produce approximately 50% of the JAZZ volume, 

ensuring a year round production capacity for the world 

apple market. 

In addition to JAZZ there are a number of other 

varieties of apples and products that are in various 

stages of pre-commercial and commercial evaluation 

by the Group. 

International Reputation and Recognition 

ENZA (through its predecessor, the New Zealand 

Apple and Pear Marketing Board) also has a long history 

of involvement in the world produce market having 

exported apples and pears since 1946. The global sales 

and marketing infrastructure and relationships with 

offshore wholesalers and retailers has created a selling 

operation that is envied by many competitors and a 

brand name that is recognised worldwide. 

Our offices in Belgium, the United Kingdom and the 

United States of America, and our fifty worldwide sales 

outlets and agents have ensured that the name ENZA is 

synonymous with quality apples and pears. Due to its 

reputation for quality ENZA products have historically 

commanded a premium price in international markets. 

New Domestic Growth Initiatives 

As we move to the future of the deregulated apple 

and pear market the Group has invested in a joint 

venture with a group of Nelson apple growers and has 

established a major pack house operation based at 

the Group’s Nayland Road complex. In its first year of 

operation the venture packed more than 550,000 tce 

of apples and pears for export and is expected to 

increase the throughput in 2005. This investment 

has created a significant new business for the Group. 

Turners & Growers expect the joint venture to expand 

its current range of trading activities and continue 

to grow. 

ENZA Finance Limited, a wholly owned subsidiary, 

arranges seasonal funding for apple and pear growers. 

ENZA Finance has also been instrumental in funding 

growers for ancillary activities including hail insurance 

and investment and foreign exchange advice. 

The key to our continued growth and development 

is to take an integrated strategic approach to our 

customers, our markets and our products. Where 

possible we seek to leverage off our size and existing 

infrastructure to ensure that all stakeholders are 

delivered superior service, products and returns 

in a timely and efficient manner. 


19

20 

Financial Information 

The financial summary set out below has been prepared to enable 

investors to compare projected financial information with the actual 

audited financial performance of the Group after the merger with 

ENZA in 2002. Due to the significant changes that have occurred in 

both the Turners & Growers business and the ENZA business it is not 

meaningful to compare the pre merger operations. 

The prospective financial information consists of 

projections for the year ending 31 December 2004. 

The prospective financial information has been the 

subject of due diligence by the Directors. Although 

due care and attention has been taken in preparing the 

prospective financial information, the Directors cannot 

provide assurance that the prospective financial 

information will be achieved. Actual results may vary 

from the prospective financial information due to the 

non-occurrence of anticipated events or alternatively, 

events occurring that were not anticipated, and 

variations may be material. 


The projection to 31 December 2004 was adopted by 

the Audit Committee of the Board on 27 August 2004 

and is based on unaudited actual results to 30 June 

2004 and a projection for the remaining six months. 

The Group’s projections for the six month period have 

been calculated using certain hypothetical 

assumptions, which are likely outcomes, but not 

necessarily the actual outcome. 

Turners & Growers Limited 

Statements of Group Consolidated Financal Performance 

Statements of Consolidated Financial Performance 

12 months 12 months 

to Dec 2003 to Dec 2004 

$000 $000 

(Actual) (Projected) 

Operating revenue 599,213 564,740 

EBITDA 40,316 33,540 

Depreciation 19,898 15,453 

Amortisation 866 768 

EBIT 19,552 17,319 

Interest expense 5,245 3,849 

Operating surplus before income tax 14,307 13,470 

Income tax 2,471** 4,779 

Operating surplus after income tax 11,836 8,691 

Minority interests in surpluses of subsidiaries 109 92 

Net surplus 11,727 8,599 

Statements of Group Consolidated Movements in Equity 

Equity at beginning of year 164,613 181,074 

Net surplus 11,727 8,599 

Foreign currency translation reserve movement (1,209) 265 

Revaluation of assets 4,524 – 

Total recognised revenues and expenses 15,042 8,864 

Movement in minority interest (956) 92 

Contributions from owners 2,375 1,128 

Distributions to owners – (9,741) 

1,419 (8,521) 

Equity at end of year 181,074 181,417 

Note: 

* 

Projected Operating revenue, EBITDA and Net surplus are assumed to be adversely impacted by foreign exchange trends, 

a small pipfruit volume reduction and weaker in-market selling prices in comparison to 2003. 

** Income Tax is stated after crediting an over provision from prior periods of $1,958,000. 

Turners & Growers Group Listing Document 21 

*

22 

Statements of Consolidated Financial Position 


Statements of Group Consolidated Financal Position 

As at As at 

31 Dec 2003 31 Dec 2004 

$000 $000 


Equity 

Share capital 131,368 132,496 

Reserves 9,796 10,061 

Retained earnings 39,751 38,609 

Shareholders’ equity 180,915 181,166 

Minority interest 159 251 

Total equity 181,074 181,417 

Liabilities 

Non-current liabilities 

Payables and accruals 2,121 190 

Borrowings 42,305 45,000 

Total non-current liabilities 44,426 45,190 

Current liabilities 

Payables and accruals 49,573 46,532 

Total current liabilities 49,573 46,532 

Total liabilities 93,999 91,722 

Total Equity and Liabilities 275,073 273,139 

Assets 

Non-current assets 

Investments in associates 3,490 3,960 

Other investments 1,609 2,248 

Property, plant and equipment 176,429 190,119 

Deferred taxation 3,382 2,836 

Intangible assets 5,892 5,183 

Total non-current assets 190,802 204,346 

Current assets 

Cash and bank balances 11,290 4,398 

Accounts receivable 46,808 44,115 

Inventories 26,173 20,280 

Total current assets 84,271 68,793 

Total Assets 275,073 273,139 



Statements of Group Consolidated Cash Flows 

Statements of Consolidated Cash Flows 

12 months 12 months 

to Dec 2003 to Dec 2004 

$000 $000 


Net cash flow from operating activities 17,971 28,932 

Net cash flow from investing activities (18,589) (29,946) 

Net cash flow from financing activities (4,704) (5,918) 

Net (decrease)/increase in cash held (5,322) (6,932) 

Foreign currency translation adjustment (320) 40 

Cash at beginning of period 16,932 11,290 

Cash at end of period 11,290 4,398 


24 

Principal Assumptions Underlying The Prospective Financial Information 

Principal Assumptions Underlying The 

Prospective Financial Information 

The principal assumptions upon which the prospective 

financial information is based are summarised below 

and should be read in conjunction with the section 

entitled “Trading Prospects and Risks” on pages 46 to 49. 

In preparing the prospective financial information, 

the accounting policies set out on pages 63 to 65 as 

part of the historical financial information have been 

applied without change. 

International Financial Reporting Standards (“IFRS”) are 

to be implemented by 31 December 2005. Turners & 

Growers will be adopting IFRS early to allow 

incorporation into the UK parent audited financial 

statements. Any potential impact has not been effected 

in the Prospective Financial Information as IFRS will not 

be in place for the 31 December 2004 financial year 

end. The Group is in the preliminary stages of 

assessing the possible impact of IFRS. 

The prospective financial information is a projection 

and is based on one or more hypothetical assumptions 

which reflect possible courses of action (i.e. “What if” 

scenarios). A projection is not a forecast. A forecast 

would be prospective financial information prepared 

based on a series of assumptions as to the future 

events which the Directors reasonably expect to 

occur as a result of actions they reasonably expect 

to take (i.e. best estimate assumptions). 

General Assumptions 

• There will be no material change in the existing 

general economic or fiscal conditions in New 

Zealand. 

• There will be no material change to the political, 

legislative and regulatory environment in which the 

Group operates. 

• The Group’s present senior executives will continue 

in their current roles. 

• There will be no industrial disputes, unusual 

competitive activity or unforeseen events occurring 

that will significantly affect the operations of the 

Group. 


• There will be no significant changes to applicable 

financial reporting standards. 

• There will be no changes to the income tax regime 

in New Zealand, Australia, North America, Belgium 

and the United Kingdom. The projected Group tax 

rate has been assumed at 33%. 

• There will be no material disruptions to the Group’s 

operations or brands arising due to adverse weather 

conditions, information technology or power 

failures, pests or foreign diseases and/or natural 

disasters. 

Basis of Preparation of Prospective Financial 

Information 

As part of operating management reporting 

requirements all business units are required to produce 

a detailed projection on a monthly basis. The 

information produced for this Profile is based upon 

these monthly projections. 

Specific Assumptions 

(a) Revenue 

Pipfruit Export 

It is projected that Turners & Growers will export 

7 million tce to the offshore markets (mainly 

Continental Europe, North America and the 

United Kingdom). As at 30 June 2004 all of the 

likely volume has been substantially received. It is 

projected that the market allocation volume will be: 

North America 

21% 

19% 

United Kingdom 

Market Allocation 

Continental Europe 

48% 

12% 

Other Countries 

In-market sales prices are projected at rates slightly 

below the current June year to date actual. 

Traditionally the last 20% of fruit sells for less than 

average prices and this is reflected in the projection. 

Global Pools will continue and average returns 

will continue to be in line with the June projection. 

Domestic 

It is projected that the domestic division maintains 

its current level of market share. Prices and 

commission rates are projected to remain static 

from 30 June 2004. 

Some reconfiguration of the Auckland domestic 

business is likely following the decision of a major 

customer to establish their own distribution facility 

in the last quarter of the financial year. Whilst this 

could reduce the businesses total turnover the net 

financial impact is not considered to be material 

in this projection period due to cost reductions. 

Cool Store utilisation is projected to be similar 

to prior years. 

Status Tomatoes 

Main profit and volume producing months are 

geared towards the spring and summer season. 

The projection anticipates meeting expected 

production targets which are reliant on good 

climatic conditions, and stable pricing in a 

competitive supply market. 

The projection reflects an increased capacity of 

approximately 20% that will come on line at the 

end of the year. 

Pricing has been assumed to follow seasonal trends 

experienced in the prior year. 

Fruit Case Company 

Prices are projected to remain static and similar to 

the end of June 2004. 

Volumes have increased to meet additional demand 

resulting from increased tomato supply from Status 

and other new business. 


ENZAFOODS 

The projection reflects an increase in production 

volumes of reject apples for apple juice concentrate 

and assumes increases in selling prices and cost 

reduction initiatives over the actual performance to 

31 December 2003. 

The projection assumes that ENZAFOODS remains 

part of the Group for the 2004 financial year. 

(b) Cost of Sales 

Cost of sales, excluding the impact of foreign 

exchange movements, are assumed at similar levels 

to those experienced in prior years. 

(c) Group Overheads 

Actual costs to June 2004 have been included in the 

projection to December 2004 with the remaining 

period projected at similar levels and adjusted for 

any known variances. 

No material change to the overhead and fixed cost 

structure of the Group for the remainder of the 2004 

financial year is anticipated. 

No adjustment has been projected resulting from 

the arbitration proceedings over the South Island 

fruit storage unit rental dispute. 

(d) Other 

Foreign Exchange 

The actual rates as at 30 June 2004 shown below 

have been used as a basis for the December 

projection: 

Currency Rate Currency Rate 

USD 0.6359 HKD 4.9599 

CLP 405 AUD 0.9101 

EUR 0.5212 SGD 1.0925 

GBP 0.3494 JPY 69.16 


26 


Turners & Growers’ foreign exchange policies are 

designed to minimise the impact of foreign 

currency volatility by hedging its contracted cash 

flows. For pipfruit exports it is Company policy to 

leave the grower pipfruit pool unhedged and, 

consequently, the risk is passed on to growers. On 

its own behalf Turners & Growers only takes cover 

on contracted sales except for cover on a small 

portion of uncontracted juice concentrate exports. 

However, such cover is not taken out for cash flows 

more than 12 months in the future. 

Capital Expenditure 

The following capital expenditure has been 

assumed for the December 2004 financial year to 

meet business and expansion plans. 


12 months Ending 31 Dec 2004 

$000 

June 2004 year to date actual 20,619 

Capital expenditure projected 9,422 

Total projected capital expenditure 30,041 

Major developments and expansion plans included 

in the above comprise: 

• development of a Nelson packhouse and expansion 

of the storage facility. 

• development and replacement of the Christchurch 

domestic facility. 

• expansion of the Port of Otago storage facility. 

• development and expansion of the Status tomato 

operation. 

Term Debt and Interest rates 

The projection assumes that all seasonal funding 

and $5 million of term debt will be repaid before the 

end of the projection period. 

Average projected funding rates have been based 

on commercial rates as at 30 June 2004. 

Finance Facilities 

There are adequate finance facilities in place to 

cover projected funding requirements. 

Grower seasonal facilities will expire in December 

2004. This facility is renegotiated each year. Working 

capital facilities expire in 2005 and term debt in 2007. 

Dividends 

It is projected that no dividends will be paid prior 

to December 2004 (other than the dividends 

declared for December 2003) and accordingly no 

provision is made in the projection. Any dividend 

that may be approved for the December 2004 

financial year will be declared and paid in 2005. 

Investigations 

No impact has been assumed arising from any 

investigation into the Group. 

Balance Sheet Assumptions 

Inventories are projected to reduce by 

approximately $6 million from the 2003 year end. 

This is primarily due to ENZAFOODS projecting 

to hold less inventory over the year end period. 

All other divisions are expected to hold similar 

levels. It is assumed that the year end inventory 

holdings for pipfruit export will be nil. Accounts 

receivable and payables and accruals are at similar 

levels to the prior year and based on a percentage 

of sales and costs and are projected to be similar 

to the percentages experienced in 2003. 

Directors and 

Senior Management 

Turners and Growers Group Listing Document 27

Director since 1994, executive 

director of Guinness Peat Group 

plc and Guinness Peat Group 

New Zealand Limited; chairman 

of Tenon Limited and Staveley 

Incorporated, director of GPG 

Forests Limited, Turners & 

Growers Fresh Limited, Ithaca 

Custodians Limited, Staveley 

Industries plc, Rubicon Limited, 

Coats Limited, TOWER Limited, 

TOWER Australia Limited, 

Ezypeel Mandarins Limited and 

Aeneid Seventeen Limited and 

citrus grower. 

28 

Board of Directors 

Anthony I. Gibbs 

Chairman 


Michael R. Dossor 

Managing Director 

Dip AG 

Director since 1991, Managing 

Director of Turners & Growers 

since January 2003; director of 

Fruit Distributors Limited, 

chairman of Turners Auctions 

Limited, McKay Shipping Limited 

and Allan Blair Properties 

Limited; director of Turners & 

Growers Limited subsidiary 

companies. 

John A. Hambling 

Group Secretary 

CA, FCIS 

Group Secretary since 1988 and 

Director since 1996, Trustee of 


Retirement and Welfare Plan; 

director of Turners & Growers 

Limited subsidiary companies, 

retiring chairman, Auckland 

Branch, Chartered Secretaries 

New Zealand. 

Ross A. Burney 

B Econ 

Appointed 30th July 2004, 

Investment Manager with 

Guinness Peat Group plc; 

director of Dawson 

International plc. 

Brian M. D’ath William J. E. Lynch 

ANZIIF (Snr Assoc) 

Appointed 1st January 2003, 

former director of ENZA Limited; 

director of Tollemache Orchards 

Limited; Trustee of East Coast 

Rural Support and orchardist. 

Appointed 1st January 2003, 

former director of ENZA Limited; 

director of Latitude 41 Limited, 

Positive Software Limited, 

Fashion Foods Limited and 

Redwood Valley Irrigators and 

orchardist. 

Luis A. Noboa III 

MBA Int Bus, BS Fin 

Director since 1994, grandson of 

Luis Noboa Naranjo the founder 

of the Pacific Fruit Group of 

companies. Currently working 

as a senior executive with the 

Noboa Organisation. 

Board of Directors 

Mark G. Tregidga 

Director since 1985, director of 

PTO Growers Limited, Status 

Produce Limited; past district 

governor of Rotary International 

and commercial produce grower. 


29

30 


Clive Durand 

General Manager, 

International Business 

Clive has been involved 

in the horticulture business 

for 22 years. He has worked 

for the New Zealand Apple 

and Pear Marketing Board, 

the New Zealand Kiwifruit 

Marketing Board and ENZA 

Limited. In 2002 he was 

appointed General Manager, 

International for 

Turners & Growers. 


Jack (L.J.) Sowerby 

Chief Financial Officer & General Manager, 

Support Services 

CA 

After many years experience in electricity supply, heavy industrial construction, wholesale and retail building, 

financial consulting and the health sector, Jack joined ENZA as Chief Financial Officer in 2001. He has since been 

involved in the deregulation of the pipfruit export industry, the privatisation of ENZA and the merger with Turners 

& Growers. Jack is a director of various group subsidiaries and is owner of an apple orchard in the Hawkes Bay. 

Michael König 

Chief Executive, 

ENZAFOODS New Zealand Limited 

BSc, BPharm, MBA 

Michael joined ENZAFOODS as 

General Manager in 1993 upon 

its establishment as a separate 

company. He was appointed 

Chief Executive of ENZAFOODS 

New Zealand Limited in 2003. 

Michael has previously held a 

number of operational and 

general management positions 

in pharmaceutical and food 

manufacturing companies in 

South Africa and New Zealand, 

including Hoechst 

Pharmaceuticals and Pepsi Cola 

International. 

Alistair Petrie 


NZ Markets (Domestic) Division 

BSc (Hons) 

Alistair holds an honours degree 

in Agriculture and Food 

Marketing from the University of 

Newcastle-upon-Tyne, and has 

over 14 years experience in the 

produce industry. He recently 

held the position of Manager 

Imports/Exports in the 

International Division of Turners 

& Growers for 18 months and 

took up his current appointment 

on 1st September 2004. 

John Pine 


Human Resources 

BA 

John has had nearly 20 years 

experience in Human Resource 

practice in a range of industries 

including heading up Human 

Resource and Change project 

teams in the Health and 

Financial Services sectors. He 

joined ENZA in 2001 and has 

been heavily involved with the 

changes in that company and in 

the subsequent merger with 

Turners & Growers. 

Piers Gascoine 


Status Produce 

Piers was previously Regional 

Sales Manager with AHI 

Hygrade (Carter Holt Harvey). 

Piers gained a solid grounding in 

administration, customer 

service, account management 

and sales and marketing. He 

joined Status Produce Limited in 

2001 and was appointed 

enterprise General Manager in 

February 2004. Piers is 

responsible for managing the 

production of approximately 

seven to eight million kilograms 

of tomatoes per annum and the 

associated packhouse operation. 

Hans Wouters 



BE mech; Post grad dip Bus Admin 

Hans worked in production and 

project engineering for 6 years 

with GEC Traction and Fisher & 

Paykel after graduating. 

This was followed by 5 years as 

South Pacific Equipment Manager 

for KFC, based in Auckland 

and Sydney. 

Hans joined the Fruit Case 

Company as General Manager 

in 1997 and has been responsible 

for significantly promoting 

and growing the business. 

Nigel Sun 


Transport 

Nigel joined the group in 1984 

after four years service with 

the New Zealand Army in 

logistics. He served initially as 

a driver with two group 

subsidiaries and has since 

held various posts in the 

Group transport operations. 

Nigel was appointed General 

Manager, Turners & Growers 

Transport in 2003. 


Andre Van der Kwaak 


Floramax 

Andre joined the Group in 1985 

as a flower auctioneer in Turners 

& Fows Limited, Hamilton, and 

assumed management of the 

Hamilton flower division two 

years later. In 1996 he was 

appointed General Manager of 

the National Flower group (later 

to become “Floramax”), 

operating from Auckland. He has 

since consolidated Floramax’s 

operations to three main sites 

and promoted the installation of 

an electronic clock auction 

system in 2000. 


Corporate Governance 

Role of the Board 

The Board is responsible to shareholders for the 

performance of the Company, including the setting of 

objectives and the strategies for achieving those 

objectives, identifying significant areas of business risk 

and implementing policies to deal with those risks, 

setting the overall policy framework and monitoring the 

continuing performance of the Company and its 

management. The Board also ensures that procedures 

are in place to provide effective internal financial 

control. Responsibility for the day-to-day management 

of Turners & Growers is delegated by the Board to the 

Managing Director. 

Board membership 

The Board comprises eight Directors being a nonexecutive 

Chairman, the Managing Director, Company 

Secretary and five non-executive Directors. The Board 

meets approximately seven times during the year for 

scheduled meetings, with additional meetings held as 

required to consider urgent issues. Within the Board of 

Directors is a broad mix of skills and experience 

relevant to the guidance of the Company’s businesses. 

The Board has identified Brian D’Ath, William Lynch and 

Mark Tregidga as Independent Directors for the 

purposes of the NZSX listing rules. 

32 Turners & Growers Group Listing Document 

Board committees 

The Board has two constituted committees – an Audit 

Committee and a Remuneration Committee. 

The Audit Committee is responsible for overseeing 

compliance with statutory financial and related 

responsibilities, ensuring that effective systems of 

accounting and internal control are established and 

maintained, overseeing internal and external audit, 

liaison with the Company’s independent auditors and 

making recommendations to the Board as to the their 

appointment and remuneration. This committee is 

chaired by Mark Tregidga and also comprises Messrs 

Gibbs (ex-officio), Burney, D’Ath, Lynch and Hambling. 

The Remuneration Committee is responsible for 

recommending to the Board the remuneration of 

the Managing Director, the Company Secretary and 

the Chief Financial Officer, and recommending the 

remuneration of Directors. This committee is chaired 

by Tony Gibbs and also comprises Messrs D’Ath, 

Burney and Tregidga. 

Profile of 

the business 


33

34 

Profile of the business 

Integrated business operations 

Turners & Growers operates as a set of integrated 

business units with complementary operations. 

The key areas of synergies and integration within 

the Group include: 

• various operations within the fresh domestic division; 

• other divisions leveraging off the operations 

of the fresh domestic division; 

• leveraging off the international trading operations; and 

• centralised administrative functionality. 

Within the domestic division the core operations 

have significant interaction and integration such as: 

• fresh produce sales, Fruit Case Company, product 

imports, Floramax and Turners Transport all utilising 

a common billing, payment, accounting and stock 

management system; 

• the utilisation of the full value chain of services by 

customers (e.g. growers produce is packed in Fruit 

Case Company crates, transported in Turners Transport 

trucks then sold by the fresh domestic division to a 


retailer who then uses Fruit Case Company crates and 

Turners & Growers’ transport to move produce from the 

sales floor to their shops); 

• imported product utilises the domestic sales and 

marketing infrastructure and billing and administration 

functionality; and 

• transportation services are utilised extensively 

by all divisions. 

The domestic division forms an integral part of the 

Turners & Growers’ infrastructure and is utilised 

extensively by other divisions including: 

• Status Produce for sales support, invoicing and billing, 

market intelligence and trend analysis to assist with 

production planning; 

• when product originally intended for export is unable 

to be shipped (e.g. shipping or phytosanitary issues) 

it can be sold via the domestic division, thereby 

minimising the loss of value for all stakeholders. 

Such sales would normally involve multiple facets 

of the domestic operations (e.g. transport, sales and 

Fruit Case Company crates); and 

...the Company distributes 

approximately 50% of all fresh 

produce to the New Zealand market 

at the wholesale market level. 

• for onshore transportation services and coolstores for 

imported goods. 

The international operations have strategic infrastructure 

in key international markets including North America, 

Asia, United Kingdom and Continental Europe. 

This infrastructure provides opportunities to expand 

historical export sales beyond predominantly apples and 

pears to take advantage of short-term supply conditions 

experienced in the domestic sector (for example, surplus 

supply of some produce lines because of favourable 

growing conditions or insufficient domestic demand). 

At the Group administration level a single human 

resource and payroll function facilitates uniformity 

of policy and cost effectiveness, as does centralised 

financial accounting for the whole Group using the 

latest SAP 4.7 platform. 

Fresh domestic produce business 

The Fresh Domestic business focuses on the wholesale 

distribution of fresh fruit, produce and flowers throughout 

New Zealand. Although no industry figures are available, 

the Directors believe that the Company distributes at 

least 50% of all fresh produce to the New Zealand market 

at the wholesale market level. 

The core business involves sourcing supplies of the full 

range of fruits and other fresh produce grown in 

New Zealand from growers and/or their agents such 

as packhouses. Produce is either purchased outright 

by the Company for on-sale or, more usually, sold on 

consignment on behalf of producers. In the latter case 

the Company is remunerated by way of a commission 

for its services. 

Turners & Growers supplements the distribution into the 

New Zealand market by importing fruit and vegetables. 

Produce imported is primarily product or varieties not 

grown in New Zealand, such as bananas, pineapples, 

mangos, grapes, oranges and taro. Importation is also 

used by Turners & Growers to smooth producer 

fluctuations in New Zealand that could potentially cause 

supply disruptions or shortages. 

The fruit and produce operations operate from a number 

of regional markets, with sales mainly conducted on a 

negotiated price basis. Auctioning is no longer used as a 

method of sale, except in respect of the fresh flower 


35

36 

operation, which makes extensive use of an electronic 

auction system. 

The Fresh Domestic division includes: 

• Pre-Pack; 

• Fruit Case Company; 

• Fruit and Produce imports; 

• Banana ripening and marketing; 

• Floramax; and 

• a nationwide transport and freight operation. 

Pre-Pack 

Pre-Pack is a “value add” activity offered 

by the Fresh Domestic division that 

packages produce into 

customer/shopper sized bags for 

supermarkets. 

The most common packaging is one to five 

kilogram take-home packs of potatoes, onions and 

carrots. Pre-Pack mostly charges under a cost-plus 

structure. Turners & Growers expects the range of 

produce packaged by Pre-Pack to increase and as such 


has invested in technology to accommodate potential 

developments in this business. 


Turners & Growers acts as an integrated fresh fruit and 

produce company. As part of its service offering to 

customers it provides containers, boxes and crates for 

produce to be transported in, both from the farm/orchard 

to Turners & Growers and then from Turners & Growers to 

the store. This operation is called the Fruit Case 

Company and it specialises in hiring containers and 

certain other equipment such as bins and wooden pallets 

to Turners & Growers’ producer and retailer clients. Hire 

equipment is subject to a hire charge and a bond that is 

paid by the hirer and repaid by the Fruit Case Company 

upon the return of the hired item. As at 30 June 2004 the 

Fruit Case Company owned approximately 1 million 

plastic crates, 6,000 bins and 58,000 wooden pallets. 

Fruit and Produce Imports 

This activity primarily focuses on the supply to the New 

Zealand consumer of fruit and produce varieties not 

customarily grown in this country. Produce is also 

imported to supplement supply to retailers at times when 

domestic supply is out of season or in low supply. 

The Company has been involved in the importation of 

produce since the early 20th century. For example, an 

invoice for imported citrus dated October 1920 shows 

“importation of 214 cartons American lemons, 429 Sydney 

oranges, 285 Valencia oranges, and 662 Island oranges”. 

Bananas are Turners & Growers major import line 

however the importation of seasonal produce 

includes grapes (Australia, California, Chile), mangoes 

(Asia, Central and South America), Pacific Island produce 

(taro, yams etc), United States stonefruit and Californian 

and Australian citrus. These items are also supplemented 

by a winter vegetable programme and a melon programme 

from Australia. The Company utilises its extensive network 

of temperature controlled storage facilities throughout 

New Zealand to facilitate the importing of produce. 

Banana Operations 

Bananas are imported by ship 

from Ecuador on a two 

weekly cycle. On arrival they are in an unripened, “green” 

condition suitable for short-term storage over a further 

fortnight. These cartons of unripened fruit are held in bulk 

“holding” rooms at specific temperatures. This supply is 

then broken down and transferred, as required, into the 

Company’s ripening rooms where the temperature is 

increased and ethylene is circulated; (a gas which occurs 

naturally in the fruit and is responsible for its traditional 

“yellow” complexion). After optimal ripening the fruit is 

available for distribution to the retail trade. The Group has 

banana holding and/or ripening facilities in 11 locations 

throughout New Zealand and handles about 35 million 

kilograms of bananas each year. 

Floramax 

Turners & Growers has successfully conducted domestic 

flower auctions for many decades, although originally 

somewhat as an adjunct to fruit and produce operations. 

As with fruit and produce, main flower auctions used to 

be held at least twice per week throughout the country. 

Traditionally each auction handled flowers supplied by 

smaller regional growers to florists and retailers within the 

each local region. 


37

38 

In 2000 the company set up Floramax 

as an independent operating division 

within the Group domestic arm to 

give a specialist nation-wide focus to 

the business. This action was augmented 

by the simultaneous introduction in the 

Auckland flower market of New 

Zealand’s first fully computerised Dutch 

clock auction system in which buyers 

place bids electronically through individual 

key-pads. Floramax has gradually 

consolidated its regional business units 

and now conducts auctions in Auckland, 

Wellington and Christchurch. 

Nationwide Transport and Freight Operation 

The transport operations of the Group support the 

demanding requirements of the domestic fresh 

operations. Experience has shown that the transport of 

perishable products requires careful management (that is, 

different produce may react differently depending on 

temperature and distance transported). A key focus is to 

get fresh produce through the supply chain as quickly and 


as carefully as possible. 

A core requirement and 

strategic advantage of 

Turners & Growers’ 

transport operations is its 

flexibility in routing and equipment and its commitment 

to operating day and night, twelve months of the year. 

The business is categorised into two main groups, longhaul 

and short-haul. The Company owns a number of 

substantial long-haul units for servicing the main trunk 

routes and to service the key supply bases such as 

Pukekohe, Ohakune, Southland and Hawkes Bay. 

This business is supplemented where expedient 

by the use of external contractors. 

The short haul business includes: 

• clearance of imported produce from wharves and 

airports; 

• deliveries between business units and from local 

growers to packhouses or markets; 

• deliveries from Status packhouses to markets; and 

• customers and retailer deliveries. 

Turners & Growers upgrades its transport fleet on a rolling 

basis, reflecting age and usage. Many of the units 

incorporate cooling systems for temperature controlled 

cartage. Collectively the Turners & Growers Fleet averages 

about 4 million kilometres per annum and currently 

comprises 49 trucks and 44 trailer units. 

Fresh Export Business 

The Fresh Export operations of Turners & Growers 

contributed $269 million of revenue to the Group in 2003 

(45% of total revenue) and were responsible for exporting 

more than 133 million kilograms of apples in addition to 

other fruit from New Zealand. The key divisions within the 

Fresh Export operations are: 

• ENZA Pipfruit; and 

• ENZA Global Variety Development Programme. 

ENZA Pipfruit 

The largest part of the Fresh Export 

operations is the ENZA business. 

ENZA was acquired by Turners & 

Growers as part of the Company’s acquisition of 

ENZA on 31 December 2002. ENZA was originally 

established from the deregulation of the former New 

Zealand Apple and Pear Marketing Board in 2001, 

and comprises the storage, inventory management 

and systematic export of New Zealand pipfruit across 

a selling season of seven to eight months. 

Fruit is sold in a series of “grower pools”, sorted by a 

number of factors including variety, size and colour, in 

order to spread the benefit and risks, which vary 

throughout the season, across similar growers. 

In 2004, ENZA expects to export approximately 

7 million tce of apples and pears to world markets 

including the United Kingdom, Continental Europe, 

North America and Asia. ENZA is responsible for 

the export of between 30% to 40% of the expected 

annual New Zealand apple and pear harvest. 

ENZA takes title to the apples and pears at submission 

into inventory or when a grower delivers the fruit along 

side the ship ready for export. ENZA obtains finance 

to part pay growers for their produce prior to ENZA 

actually selling the produce. The produce is 


39

40 

shipped to the relevant international market, stored, 

marketed and ultimately sold. ENZA deducts its costs 

(including a financing charge for any part payments 

made by ENZA to the growers for produce) from the 

sales proceeds as well as a margin for undertaking its 

activities. The balance of the sales proceeds is paid to 

growers as the balance of the purchase price for their 

produce. 

To facilitate international sales ENZA has interests in 

supporting sales infrastructure in the United Kingdom, 

Belgium and North America. 

Allied to ENZA’s operations are significant coolstore 

assets in New Zealand (previously owned or operated 

by the New Zealand Apple and Pear Marketing Board). 

The coolstores are extensively utilised during the 

early part of the pipfruit harvest before decreasing 

throughout the season as fruit is exported to 

international markets. ENZA seeks to manage the 

extent of any under-utilisation post the yearly pipfruit 

harvest by using the coolstores for alternative uses 

such as dry storage. 


ENZA has recently entered a 50/50 joint venture with 

a group of Nelson growers in a fruit packing venture 

called Latitude 41 Limited. The joint venture operates 

from the ENZA complex in Nayland Road, Nelson. In its 

first season Latitude 41 packed more than 550,000 tce, 

significantly exceeding its budget. 

ENZA also operates a general export business unit to 

service both contractual and spot market opportunities 

for a variety of domestically grown non-pipfruit 

produce. Currently the key types of produce exported 

are squash, onions and some sub-tropical fruits. The 

international offices and skills within ENZA provide 

significant opportunities to develop additional produce 

exports beyond the traditional types already exported 

from New Zealand. 

ENZA Global Variety Development Programme 

Prior to de-regulation the New Zealand Apple and Pear 

Marketing Board, in conjunction with specialist 

scientific bodies, undertook research into new apple 

and pear varieties and rootstock that would produce 

more consumer oriented products. Research also 

focussed on mitigating or eliminating growing 

problems such as tree diseases including fireblight on 

behalf of all New Zealand pipfruit producers. 

Following de-regulation ENZA elected not to continue 

funding the "industry good" element of the research but 

instead focus on the licensing arrangements for 

selected new varieties of mainly apples and pears. 

The first commercially viable new variety that has been 

licensed is "JAZZ" a rich coloured firm sweet apple that 

is an amalgam of the royal gala and braeburn varieties. 

This exciting new offering is exclusively licensed to 

ENZA and is being selectively introduced worldwide. 

It is envisaged that plantings of the JAZZ variety will 

produce annually, around 6 million tce once full 

production is achieved around 2012. ENZA has the 

exclusive worldwide marketing and distribution rights in 

respect of JAZZ which entitle ENZA to control not only 

the distribution of JAZZ plantings but also the sole rights 

to sell all produce from those plantings. 

The Global Variety Development Programme is the ENZA 

operation by which new varieties are researched and 

released, firstly in trials and secondly to world markets 

as exclusive varieties sold and 

marketed solely by the ENZA Group. 

Several new apple varieties are at 

various stages of evaluation and trialing. 

The Group has also recently acquired 

exclusive rights to a variety of Gold Kiwifruit 

that will be evaluated for commercial release. 

Primary Production and Packaging 

Turners & Growers has made a significant investment 

in its glasshouse production business, Status Produce. 

Status is principally engaged in the production of 

tomatoes for the local market along with some exports to 

Australia. In 2003 Status produced approximately 5.5 

million kilograms of tomatoes and expects to produce 

more than 7 million kilograms in 2004. 

Glasshouse production is spread over three sites in 

Mangere and Tuakau in South Auckland. Currently Status 

has 20.4 hectares (50.4 acres) of glasshouses that grow 

tomatoes on a year round basis. The key production 

season for tomatoes is early spring, with increasing 

light levels and higher consumer demand. 


41

42 

Glasshouse production offers key growth opportunities 

for the Company. There has been a substantial 

investment in Status in 2003/2004 to increase acreage 

from 35 to 50 acres. The glasshouse market will continue 

to be monitored to identify future opportunities to grow 

new varieties and increase acreage. 

A major packing line with temperature-controlled storage 

is located at the Status Mangere site. This packing line is 

predominantly for servicing tomato production from 

Status’ glasshouses however it also provides contract 

packing services for other tomato growers and for 

seasonal commodities such as mandarins. 

Group Property Holdings 

To facilitate its operations Turners & Growers has made a 

significant investment in land and buildings. The 

Company currently owns 14 commercial sites throughout 

New Zealand and leases a further 16 sites. 

The most significant property assets are four ENZA 

coolstore complexes located at Nelson, Hastings (two 

sites) and Dunedin, along with the two principal produce 

markets at Monahan Road, Auckland and Dakota 

Crescent, Christchurch. These assets have a combined 

valuation as at 30 June 2004 of $117 million. 

The Company’s remaining sites are spread geographically 

throughout the country. 

To ensure the most efficient use of capital all internal 

business units are charged market rental for any space 

occupied. Turners & Growers also has a small number of 

external tenants that rent property not fully utilised by the 

Group. All such tenants are charged market rentals. Total 

external rental revenue in 2003 was approximately $1 million. 

Turners & Growers regularly reviews its property holdings 

to ensure that the Company is efficiently utilising the 

capital available to it. These reviews have resulted in the 

Company divesting a number of facilities in smaller 

centres that were no longer required for operational 

purposes within the Group. Post 2004 the Group plans to 

divest more sites and relinquish the leases on a further 


three legacy sites following the ongoing consolidation 

of its operations. 

Financing Growers 

ENZA Finance Limited, a wholly owned subsidiary, arranges 

seasonal funding for apple and pear growers. ENZA 

Finance provides up to approximately $150 million of 

seasonal funding per annum. Growers that are provided 

funding are charged interest at commercial rates with 

repayments deducted from the proceeds of fruit sales. 

ENZA Finance has also been instrumental in funding 

growers for ancillary activities including hail insurance 

and orchard investment and also facilitates provision 

of foreign exchange services. ENZA Finance takes no 

foreign exchange cover on behalf of growers, nor does 

it hold itself out as a provider of foreign exchange advice. 

ENZAFOODS Group 

The ENZAFOODS Group comprises ENZAFOODS New 

Zealand Limited and ENZACOR Pty Limited. ENZAFOODS 

New Zealand Limited is the largest apple juice concentrate 

manufacturer in New Zealand. The company has two 

main processing sites located in Hastings and Nelson. 

The principal focus of ENZAFOODS is the processing of 

“reject” apples into apple juice concentrate for the juice 

manufacturing industry. This business offers apple 

growers a way of receiving some benefit from apples that 

are not of sufficient quality to export or to sell into the 

domestic market. ENZAFOODS also buys apples from 

growers that have been damaged due to adverse weather 

conditions such as hailstorms or severe wind. 

ENZAFOODS is complementary to ENZA’s export 

business as it helps provide apple growers with a full 

service offering to deal with all of their produce. 

In recent years ENZAFOODS has expanded the range of 

activities to encompass other types of juice processing, 

such as carrots and berries, and alternative food ingredient 

products such as syrups and aromas. In 2003 

ENZAFOODS produced approximately 9.6 million litres of 

apple juice, 1.5 million litres of carrot juice and 939,000 

litres of berry juice. It also produced 6.7 million kilograms 

of fruit ingredients. ENZAFOODS has an extensive 

investment in plant and facilities. 

ENZCOR (which trades as Fruitmark) is based in Australia 

and distributes processed fruit and vegetable products. 

In 2003 financial year, revenue from the ENZAFOODS 

Group was approximately $61 million. This comprised 

revenue of $40 million from ENZAFOODS and the balance 

from ENZACOR. 

The Board recently announced that it intends to separate 

the ENZAFOODS Group out from the rest of the Group. 

It is currently proposed that this will be achieved by 

transferring the shares in the parent company of 

ENZAFOODS directly to the shareholders of Turners 

& Growers (similar to the approach that was undertaken 

with the separation of Turners Auctions). 

Company Ownership 

Up until 1992 the Company was largely owned and 

managed by the descendants of the original Edward 

Turner family, together with staff members, suppliers and 

their families. 

In 1992 a major overseas supplier of some 40 years 

standing, the Noboa Organisation (which exports Bonita 

bananas to New Zealand from Ecuador and distributes 

through the Turners & Growers network), acquired a 25% 

stake in the Company. The Noboa Organisation remains 

the Company’s largest supplier shareholder with a current 

shareholding of 10.1%. 

In 1994 a branch of the Turners family withdrew from the 

daily management of the Company and, together with 

some supplier shareholders, sold their shareholdings to 

Guinness Peat Group plc. 

In 2002 shareholders adopted a recommendation of the 

Board to acquire ENZA from Guinness Peat Group plc. 

Guinness Peat Group plc was issued shares in Turners & 

Growers as consideration. As a result of this transaction 

Guinness Peat Group plc currently controls 78.3% of the 

shares in Turners & Growers. 


43

44 

Strategy 

Turners & Growers Fresh Limited (the domestic operation) 

has under-gone a transition over the last ten years from 

a company of markets to a marketing company. 

In particular there has been a fundamental move away 

from the auction process to direct negotiation with buyers 

and sellers, except for cut flowers which continue to be 

sold by auction. This has largely been in response to the 

demands of the major supermarket chains that are seeking 

predictability and stability in supply and pricing rather than 

a spot market facility. These changes have resulted in 

Turners & Growers investing in sophisticated information 

technology systems to facilitate the daily produce sales. 

Turners & Growers believes that in the future there will be 

a gradual move away from physical markets, except as 

warehousing facilities, and into virtual marketplaces 

where goods will trade electronically. This change will 

have its foundations in information systems with 

increased levels of electronic data exchange between 

Turners & Growers and other market participants. 

Turners & Growers has invested a significant amount of 

time, capital and resource into developing its exporting 

expertise. The Company is proud of its offshore 

distribution network and the generally high relative level 

of returns that it has been able to provide to growers. 

Deregulation has increased the number of pipfruit 

exporter competitors to approximately 100. The 

Company must continue to strive to provide high levels of 

service to its growers to ensure that it is able to retain its 

market share. The Board is confident that current 

operating policies continue to be in the best interests of 

both the producers and the Company, but nevertheless 

keeps these policies under constant review. 


The export of seasonal crops such as avocados, squash 

and onions, is dependent on world supply and demand 

factors. New Zealand is relatively isolated from the major 

international markets and therefore any exports of these 

smaller volume products are currently opportunistic and 

based upon specific opportunities to supply target 

markets. Due to these types of exports not being at 

consistent regular volumes the Company must constantly 

monitor the markets for specific opportunities to export. 

Such a strategy, whilst profitable, involves inherent risks 

such as credit and foreign exchange risk. The Company 

has formal guidelines and strategies to reduce these 

risks, including not supplying when market outcomes are 

not sufficiently certain. 

Dividend Policy 

Consistent with its objectives, and subject to the 

Company’s financial position and performance, the 

Directors aim to distribute surplus funds. This policy will 

allow for the continued growth of the Company. Should 

opportunities to increase shareholder value be identified, 

or the capital requirements of subsidiaries change, 

Directors may re-visit the level of dividend pay out. 

The Directors intend to attach imputation credits to 

dividends to the extent that they are available. The 

Company expects that it will be able to fully impute 

dividends for the foreseeable future. The Company 

currently offers shareholders a dividend reinvestment 

plan for all or part of any dividend declared. 

The Directors give no assurances that the historical 

dividend policy and indicated level of imputation credits 

will be maintained. 


employs in excess of 

1,500 seasonal and fulltime staff 


46 

Trading Prospects and Risks 

Special trade factors and risks that could materially affect the prospects of the Group include: 

Economic Conditions 

The trading and financial performance of the Group is 

influenced by a variety of economic and business 

conditions affecting the New Zealand economy 

including interest rates, exchange rates, commodity 

prices, inflation, government fiscal, monetary and 

regulatory policies, consumer spending and changes in 

consumer and business confidence. 

Competition 

The industry is also very competitive with many players 

in the market. The main competition comes from other 

merchant and wholesale companies, from producers 

supplying the retail trade direct and from low cost 

brokers supplying niche markets. The imported fruit 

business has few restrictions as to commodities and 

sourcing opportunities. The Company has significant 

expertise in this area but faces daily competition from 

many other importers. The most significant year-round 

product, bananas, is susceptible to competition from 

existing competitors and other major world banana 

companies who could at any time commence imports 

into New Zealand. This would create a very unstable 

market with significant downside for all parties. 

The deregulation of the pipfruit business has spawned 

in excess of 100 competitors, all of whom are seeking 

to grow their business at the expense of ENZA. This 

constitutes a significant risk to ENZA maintaining its 

market share. This risk may be mitigated by ENZA’s 

exclusive new varieties becoming accepted and 

material in the export market. 

The ancillary businesses of the Group also operate in 

highly contestable environments. The transport 

operation has many competitors in the general cartage 

industry, and the hire container operation faces 

competition from at least two other major players. 


Climatic Conditions 

Although not unique to the Group’s operations, adverse 

weather conditions may, depending on the produce 

sector affected, have a material adverse impact on the 

Group’s profitability. The Company operates in a very 

dynamic environment closely allied to the production 

sector. Stable periods of benign weather patterns mean 

optimal growing conditions with a result that market 

oversupply of core products frequently occurs. 

Unstable weather conditions often result in shortages 

of crops which usually result in higher prices as 

demand is left unsatisfied. The Company’s core 

revenue streams are tied to these market price factors. 

Higher prices mean better revenues, lower prices yield 

lower revenues to both the producer and Company and 

usually result in additional costs for the Company as 

more physical product has to be handled to generate 

equivalent turnover. The Company has no control over 

the production sector and, having high overhead 

commitments, is therefore vulnerable to these market 

forces. 

Exchange Rates 

Adverse foreign exchange rate movements may have a 

significant impact on the returns of the Group, 

particularly for low margin export products. Similarly, a 

weaker New Zealand dollar may have a positive impact 

on returns. 

Interest Rate Risk 

Actual interest rates may change. Changes in interest 

rates may reduce or increase the demand for finance, 

impact on margins and Group profitability which may in 

turn impact on the projected distributions to 

shareholders. 

Pipfruit Volumes and Prices 

A significant proportion of the Group’s earnings is 

derived from commission received from the sale of 

pipfruit. A decline in pipfruit volumes and/or pipfruit 

prices may have an impact on commission earnings 

for the Group. Volumes could be at risk because 

of major international supermarkets demanding 

independent verification of growers, packhouses 

and exporters adherence to their specific product 

and environmental requirements. 

Shipping Costs 

As there is a large distance between Turners & Growers 

and its major markets, any significant increase in 

shipping costs may impact on the Company’s ability to 

trade effectively, particularly with the advent of 

treatment processes that allow competitors closer to 

the European markets to trade more effectively and for 

longer periods of time. If shipping costs increase then 

Turners & Growers may become less competitive than 

competitors who are closer to those markets. 

Concentration of tomato profits within certain 

months 

The Group’s tomato operations contribute significantly to 

the Group’s earnings. However, as most of the profits 

from tomato operations are made in the Spring, there is 

a risk that if the projected prices are not achieved this 

will have a material affect on the Group’s earnings. 

While the Group is increasing production facilities to 

even out production, the risk for the 2004 and 2005 

financial years is that a significant portion of profits will 

be realised, and are therefore at risk, in the Spring. 

Increase in supply of apples and apple juice 

concentrate 

ENZAFOODS is subject to world apple juice concentrate 

(“AJC”) prices. While AJC prices have been strong over 

recent years there have been various studies which 

suggest that in the long term, prices of $US3.50 to 

$US4.00 per US gallon of AJC is more sustainable than 

the current prices of $US5.00 to $US5.50 per US gallon. 

Further, changes in the world supply of apples and AJC 

may occur as result of the following: 

(a) apple production in the Northern hemisphere has 

increased following supply constraints over the past 

three years; 

(b) increased planting of key apple varieties by the 

Group’s Southern hemisphere competitors, for 

example, Chile; 

(c) the potential growth in the supply to the world 

market by China of apples and AJC; and 

(d) barriers being created by major supermarket 

chains worldwide. 

An increase in the world supply of apples and AJC may 

depress the prices for apples and AJC if there is not a 

corresponding increase in consumption. 

Supermarket buying pressures 

There is a trend that New Zealand’s two major 

supermarket operators are consolidating purchasing 

power by approaching growers directly and cutting out 

distributors such as Turners & Growers. If Turners & 

Growers lost key growers to its key domestic 

customers such as supermarkets this could affect 

turnover and profitability and in some instances, may 

result in the closure or downsizing of branches. 

However, such an effect could be minimised by the 

decrease in costs after restructuring related to those 

branches particularly if Turners & Growers were able to 

retain or redirect to other branches, the produce 

distributed by those branches. 

In Auckland a major supermarket customer has recently 

established its own distribution facility which has the 

potential to reduce turnover, but this should enable 

significant savings in facilities and staff previously 

required for this customer. 


48 

Banana price competition 

The current banana price volatility may affect 

commissions earned from the Group’s banana 

operations. 

IT infrastructure 

In the event that the Group’s information system 

experiences a catastrophic failure, it is likely to have an 

adverse impact on the Group’s business. There is also 

the risk that the Group’s current domestic system, 

being a legacy application, may be increasingly difficult 

to support in the future. The Company is, however, 

currently evaluating options to replace that system. 

Loss of key staff 

Turners & Growers’ business, like many, depends on 

key relationships between staff, growers and suppliers. 

Notwithstanding the contractual arrangements which 

the Company has with senior management and other 

key employees, a loss of these individuals could disrupt 

such relationships and affect the Company’s business. 

Imported food ingredients 

ENZAFOODS food ingredients business faces 

competition from Chinese imports that are sold at 

prices below ENZAFOODS’ current sales prices. 

There is currently market resistance to such products 

due to its quality, however should the quality improve 

it may affect returns from sales of food ingredients 

in the future. 

Erosion of ENZA brand 

There is potential erosion to the value of the ENZA brand 

by New Zealand exporters who export inferior quality 

apples if ENZA, as a New Zealand brand, is “tarred with 

the same brush”. Such an erosion may affect returns 

from products sold by ENZA. On the other hand, such a 

factor may strengthen the ENZA brand if it serves to 


further highlight the distinction in quality between ENZA 

products and others in the market. 

Litigation 

The Company leases a fruit storage facility in the South 

Island which is presently the subject of arbitration 

proceedings brought by the Company over a rental 

dispute. The outcome of this dispute could affect 

profitability by approximately +/-$650,000 per annum 

for three years. 

Market Risk 

The liquidity of the NZSX at any point in time may have 

an impact on the ability to, and the price at which 

shares in the Company may be transferred. Further, the 

trading price of the Company’s shares is likely to be 

subject to fluctuations in response to factors such as 

actual or anticipated variations in the Group’s operating 

results, announcement of technical innovations or new 

services by the Company or its competitors, changes in 

financial estimates by securities analysts, conditions or 

trends in the fresh produce sector, changes in the 

market valuations of other fresh produce companies, 

announcements by the Company or its competitors of 

significant acquisitions, strategic partnerships, joint 

ventures or capital commitments, additions or 

departures of key personnel and other events or 

factors, many of which are beyond the Company’s 

control. Market fluctuations, as well as general political 

and economic conditions such as recession or interest 

rate or currency rate fluctuations, may also adversely 

affect the market price of the Company’s shares. 

Investors should recognise that the price of shares may 

fall as well as rise. 

In the event that one or more of the factors outlined 

above or any other unforeseen factors have a 

detrimental effect on the value of the ordinary shares of 

the Company, it is reasonably foreseeable that, if an 

investor sells their ordinary shares, the investor may 

receive less than the amount paid. Such factors may 

impact on the ability of the Company 

to make distributions. 

Other Factors 

Other factors that may affect the Group are adverse 

changes in: 

• world economic conditions; 

• world political events; 

• Government legislation, intervention or level of 

taxation; 

• accounting and taxation policies or treatments 

arising generally; 

• natural disasters, social upheaval, terrorism or war 

in New Zealand or overseas; 

• alternative land use opportunities for existing 

horticultural properties; 

• loss of traditional family grower relationships with 

the Company; 

• transportation constraints; and 

• outbreaks of disease, pestilence and phytosanitary 

constraints. 


50 


Additional 

Information 

Notice 

This Profile is not a registered prospectus under the 

Securities Act 1978 and no offer of shares is being 

made to the public. It has been prepared in connection 

with the proposed listing of the Company and the 

quotation of its shares on the NZSX and is being 

distributed by the Company in accordance with the 

requirements of the NZX. In this regard, an application 

has been made to the NZX for permission to list 

the ordinary shares of the Company and all of the 

requirements of the NZX relating to that listing that 

can be complied with on or before the date of this 

Profile have been duly complied with. However, 

the NZX accepts no responsibility for any statement 

in this Profile. 

The NZX has granted the Company waivers from: 

• The spread requirements of listing rule 5.3.2(a) of 

the NZSX listing rules which requires the securities 

of a listed issuer to be held by at least 500 

members of the public holding at least 25% of the 

number of the securities on issue with each 

member of the public holding at least a minimum 

holding. The waiver is conditional upon Turners & 

Growers meeting the spread requirements of listing 

rule 5.3.2(a) within 9 months from the date the 

Company’s securities are quoted on the NZSX. 

• The requirement of listing rule 7.1.3(a) of the NZSX 

listing rules for the Profile to contain the statements 

required by clauses 8, 10(1)(c), 10(2) and 11(2)(c) of 

the Securities Regulations 1983 on the condition 

that the Profile contain: 

(a) audited accounts to 31 December 2003 for the 

Group including comparatives for the 6 month 

period to 31 December 2002; 

(b) projected statements of financial performance and 

financial position for the Group for the year to 31 

December 2004; 

(c) projected statement of cash flows for the Group for 

the year to 31 December 2004; and 

(d) the requirements of clause 10(2) of the First 

Schedule to the Securities Regulations 1983 which 

are applicable to subparagraph (c). 

No person or entity undertakes any liability in respect 

of, or guarantees, the shares of the Company described 

in this Profile. 

Main terms of quotation 

The Company is seeking quotation on the NZSX of its 

71,425,094 fully paid ordinary shares currently on issue. 

No new securities are being offered by the Company. If 

the Company’s application for quotation of the shares 

and listing of the Company on the NZSX is accepted, 

shareholders will be bound by the minimum holding 

requirements set out in the NZSX listing rules. 

Every issued and fully paid up share in the Company is 

entitled to one vote and the right to an equal share in 

dividends authorised by the Board and any distribution 

of the surplus assets of the Company. 

Name and address of company seeking 

quotation 

The Company seeking quotation is: 


Head Office Building, Mt Wellington Markets Complex, 

2 Monahan Road, Mt Wellington, Auckland 

Details of incorporation of issuer 

Turners & Growers Limited was incorporated as a 

public company under Part II of the Companies Act 

1908 on 20 January 1921 and re-registered under 

the Companies Act 1993 on 20 February 1996. 

The Company number is 41406. The Company’s public 

file can be accessed from the Companies Office 

website at www.companies.govt.nz. Documents 

not viewable on that website can be obtained from 

Searchlink Limited by calling 0800 767778. 

A fee may apply. 


52 

Principal subsidiaries of the Company 

The principal subsidiaries of the Company whose 

assets exceed 5 percent of the amount of the total 

tangible assets of the Group are as follows: 

• Aeneid Thirteen Limited; 

• ENZA Limited; 

• ENZA Finance Limited; 

• ENZAFOODS New Zealand Limited; 

• ENZA Group Services Limited; 

• Status Produce Limited; and 

• Turners & Growers Fresh Limited. 

All of the shares of each of the above subsidiaries are 

held by members of the Group. 

Directorate and advisers 

The names, addresses and technical or professional 

qualifications of the Directors of the Company are set 

out in the Board of Directors section on page 27 

and the Directory section of this Profile. 

The name of the Company’s Secretary is set out 

in the Board of Directors section. 

Details of the Company’s securities registrar and of its 

advisers involved in preparing this Profile are set out in 

the Directory section. 

Restrictions on Directors’ powers 

The Companies Act and the Company’s constitution do 

not impose any modifications, exceptions or limitations 

on the powers of the Board to manage, or supervise or 

direct the management of the business and affairs of 

the Company other than the modifications, exceptions 

or limitations which are required to be imposed on all 

companies generally by the Companies Act or under 

the listing rules of the NZSX. 


Substantial equity security holders of the 

Company 

The persons who are the registered holders of the ten 

largest holdings of shares in the Company at 26 August 

2004 are: 

Shareholder Number of Equity Securities 

Ithaca (Custodians) Limited (GPG) 56,042,874 

Bartel Holdings Limited (Noboa Organisation) 7,215,475 

M A Goldsmith & Others 844,536 

D A Currey & F B Jorgensen 339,393 

N K Peter & Others 298,891 

RECT Funds Management Limited 250,000 

M L Tregidga & Others 218,015 

M G Tregidga & Others 218,014 

G W Tregidga & Others 187,567 

G W Tregidga & Others 183,644 

None of the persons set out above guarantee or 

undertake any liability in respect of the Company’s 

shares. 

Description of activities of the Company and its 

subsidiaries 

A description of the activities of the Company and its 

subsidiaries during the last five years preceding the 

date of this Profile is set out on pages 8 to 16 and 33 

to 45. The principal fixed assets held by the Company 

and its subsidiaries are land and buildings (including 

glasshouses), plant and equipment, motor vehicles and 

computer and office equipment. These assets are 

either owned by the Company and its subsidiaries or 

held under lease. The assets are all used to conduct 

the business activities described in this Profile. 

Summary of financial statements 

Summary financial information relating to the Group is 

set out on pages 20 to 26. The NZX has granted the 

Company a waiver from the NZSX listing rules 

regarding the provision of financial information. Details 

of the waiver are set out on page 51 of this Profile. 

Prospects and forecasts 

Information on the business outlook and trading 

prospects of the Company and its subsidiaries, 

together with material information that may be relevant 

to those prospects, is set out in pages 18 to 26 and 

33 to 45, and in the section entitled Trading Prospects 

and Risks on pages 46 to 49 of this Profile. 

Acquisition of business or subsidiary 

On 31 December 2002, the Company acquired all of 

the shares in ENZA Limited from Ithaca (Custodians) 

Limited (as trustee for Guinness Peat Group plc) for 

a purchase price of $101,900,000. The purchase 

price was satisfied by the issue of 44,177,854 fully 

paid ordinary shares in the capital of the Company 

to Ithaca (Custodians) Limited. 

In the period that commenced five years before the 

date of this Profile and ending on 31 December 2002, 

ENZA Limited (the successor to the New Zealand 

Apple and Pear Marketing Board) carried on the 

following business activities: 

• On 1 April 2000 as a result of the Apple and Pear 

Industry Restructuring Act 1999 the New Zealand 

Apple and Pear Marketing Board became ENZA 

Limited, a company with shareholders who had to 

be apple and/or pear growers. 

• There are approximately 14,000 hectares of apples 

and pears planted in New Zealand involving 

approximately 1,400 growers who produce apples 

and pears in Hawkes Bay (53%) and Nelson (40%) 

with the remainder in fringe areas outside the main 

growing centres. ENZA Limited either directly or 

indirectly acquired title to fruit sourced from these 

growers, stored the fruit in its own storage facilities, 

packed and/or received packed fruit from contracted 

suppliers, exported such fruit to world markets and 

sold both apples and pears to world markets. 

• ENZA Limited deducted agreed costs from gross 

returns and paid to growers the net proceeds of its 

selling activities. Costs deducted included freight 

and distribution costs marketing and selling costs, 

storage costs, marine insurance and other costs 

directly incurred in getting the fruit to world markets. 

• ENZA Limited also operated three apple juicing 

plants (two based in Nelson and one based in 

Hastings). This operation was conducted by the 

wholly owned subsidiary ENZAFOODS New Zealand 

Limited and principally produced high quality AJC 

which was then sold internationally. 

• ENZA Limited also had a number of associated 

activities the most significant of which is property 

landlord for its land and building portfolio. 

Other than the acquisition of ENZA, the Company and 

its subsidiaries have not acquired any business, 

subsidiary or body corporate from any person at any 

time in the period of two years immediately preceding 

the date of this Profile, where the consideration paid or 

payable for that business, subsidiary or body corporate 

was more than one-fifth of the amount of the total 

tangible assets of the Company and its subsidiaries as 

at 31 December 2003. 

Securities paid up otherwise than in cash 

Other than: 

• the issue of fully paid ordinary shares in lieu of 

dividends to shareholders who have elected to 

participate in the Company’s dividend re-investment 

plan pursuant to the terms and conditions set out in 

an offer document dated 16 February 

2001(amended 30 July 2004); 


54 

• the issue of 44,177,854 fully paid ordinary shares to 

Ithaca (Custodians) Limited for the purchase of all of 

the shares in ENZA Limited held by Ithaca 

(Custodians) Limited on 31 December 2002; 

• the issue of 587,045 fully paid ordinary shares to 

PTO Properties Limited in part settlement of the 

$1.8 million purchase price for a property sold by 

PTO Properties Limited to Sholto Investments 

Limited (renamed Status Produce Limited). The 

balance of the purchase price, being $350,000, was 

settled in cash; 

• the issue of 341,592 fully paid ordinary shares to 

PTO Properties Limited for the purchase of the 10% 

minority interest (800,000 shares) held by PTO 

Properties Limited in Status Produce Limited, 

no other equity or participatory securities have been 

allotted as fully or partly paid up otherwise than in cash 

by the Company in the five years preceding the date of 

this Profile. 

Options to subscribe for securities of the 

Company or its subsidiaries 

No options to subscribe for securities of any member 

of the Group have been granted or are currently 

proposed. The Directors have the right to grant options 

in accordance with the Company’s Constitution and 

in compliance with the listing rules of the NZSX. 

Except with the approval of the NZX or the 

shareholders of the Company, options cannot 

be granted to any of the Directors. 

Appointment and retirement of Directors 

No Director has been appointed or is intended to be 

appointed to the Board of the Company in a manner 

that is materially different from that specified in 

sections 153 and 155 of the Companies Act. The 

Company’s constitution contains no provision 

concerning the retirement age of Directors. No person 

(other than the members of the Company in general 


meeting or the Directors of the Company acting as a 

board to fill a casual vacancy) has the right to appoint a 

Director or Directors of the Company. Each Director 

has the power to appoint a person to act as an 

alternate Director in his or her place with the consent of 

a majority of the other Directors. 

Director’s interests 

Except for the payment of renumeration to the 

Executive Directors, Michael Dossor and John 

Hambling, pursuant to contracts of service terminable, 

without paying compensation, on less than 2 years’ 

notice, none of the Directors are entitled to any other 

remuneration from the Company or any of its 

subsidiaries other than by way of Directors’ fees and 

reasonable travelling, accommodation and other 

expenses incurred by a Director in connection with the 

Director’s attendance at meetings or otherwise in 

connection with the Company’s business. 

The Company’s constitution allows the Board to 

authorise special remuneration to any Director who is 

or has been engaged by the Company to carry out any 

work or perform any service which is not in the 

capacity of a Director. 

The constitution also provides for the Company to 

make a payment of a lump sum or pension upon or in 

connection with the retirement or cessation of office of 

that Director, only if: 

• the amount of the payment or the method of 

calculation of the amount of that payment is 

authorised by an ordinary resolution of the 

Company’s shareholders; or 

• the total amount of the payment (or the base of the 

pension) does not exceed the total remuneration of 

the Director in his or her capacity as a Director in 

any three years chosen by the Company provided 

that such a Director was in office on or before 1 

May 2004 and has continued to hold office since 

that date. 

Any amounts payable by the Company in this regard 

will not affect any amount paid to an executive Director 

in connection with the termination of his or her 

employment with the Company or the payment of any 

amount attributable to the contribution (or any normal 

subsidy related thereto) made by a Director to a 

superannuation scheme. 

All Directors have provided a general notice that they 

may from time to time transact personal business 

affairs with the Company or its subsidiaries. Several 

directors of the Company and its subsidiaries supply 

produce to the Company. All such transactions are 

carried out in accordance with the normal business 

criteria of the Company and its subsidiaries for those 

types of transactions. 

Other than as disclosed below, no material transactions 

have been entered into in the five years preceding the 

date of this Profile or are to be entered on or after the 

date of this Profile between any member of the Group 

and any Director, immediate relative of a Director or any 

company more than half of whose share capital is held 

directly, or indirectly by any Director or immediate 

relative of a Director: 

(a) Purchase of PTO land for joint venture business: 

The Company entered into a shareholders 

agreement with PTO Properties Limited (of which 

more than 50% of its share capital is held by M G 

Tregidga (together with other trustees), dated 17 

May 2000 for the development of a glasshouse 

business for the purpose of the commercial 

growing of tomatoes on bare land sold by PTO 

Properties Limited to the new joint company, Sholto 

Investments Limited (renamed Status Produce 

Limited). 90% of the shares in Sholto Investments 

Limited were held by the Company and the 

remaining 10% by PTO Properties Limited. 

Pursuant to an agreement for sale and purchase 

dated 17 May 2000 between Sholto Investments 

Limited and PTO Properties Limited, Sholto 

Investments Limited acquired land from PTO 

Properties Limited for $806,877. PTO Properties 

Limited acquired the land in 1978 for approximately 

$108,000. The transaction was undertaken at arms 

length in accordance with independent advice and 

valuations. 

Pursuant to an agreement for sale and purchase 

dated 24 May 2000 between Sholto Investments 

Limited (renamed Status Produce Limited) and Ann 

Louisa Macfarlane, Philip Owen Tregidga, and Barrie 

Frederick Connell (as trustees of the Louisa Emily 

Tregidga Trust) (“Trust”), Sholto Investments 

acquired land from the Trust for $807,455. 

The Trust acquired the land in 1943 for £1,800. 

The transaction was undertaken at arms length in 

accordance with independent advice and valuations. 

(b) Purchase of minority interest: Subsequent to the 

above transactions the Company entered a share 

sale agreement on 16 May 2003 with PTO 

Properties Limited for the purchase of the 10% 

minority interest held by that company in Sholto 


Limited). The consideration for the acquisition was 

an allotment of 341,592 new shares in the capital of 

Turners & Growers Limited at a price of $2.47 per 

share. The cost of the 10% minority interest to PTO 

Properties Limited was $800,000. 

Material contracts 

The following material contracts (not being contracts 

entered into in the ordinary course of business) have 

been entered into by the Company or its subsidiaries 

during the period two years preceding the date of this 

Profile: 

(a) Director’s Deeds of Indemnity: On 31 July 2004 the 

Board resolved to enter into deeds of indemnity 

in favour of each of the Directors and the Chief 

Financial Officer whereby the Company agreed 

to indemnify each such person to the maximum 

extent permitted by the Companies Act and the 

Company’s constitution. 


56 

(b) Purchase of ENZA Limited: The Company entered 

into an agreement for sale and purchase with 

Guinness Peat Group plc dated 18 December 2002 

to acquire all of the shares in ENZA Limited for a 

purchase price of $101,900,000. The purchase 

price was satisfied by the issue of 44,177,854 new 

shares in the Company. The acquisition was 

completed on 31 December 2002. 

(c) Purchase of Tomato Packhouse operation: In 

relation to the above joint venture, pursuant to an 

agreement for sale and purchase dated 25 March 

2002 between Sholto Investments Limited, Status 

Produce Limited, Lateral Marketing Limited, MGH 

Trustees Limited, James Nicholas Guthrie, Laurel 

Gillian Guthrie, B G Nicklin Limited, The Cumbria 

Company Limited, Polder Holdings Limited, The 

Jaybee Trading Trust Limited and Leslie Garry 

Hemmingson, Sholto Investments Limited acquired 

a tomato and mandarin packing plant business and 

associated building and business assets as a going 

concern. 

(d) Purchase of minority interest: Subsequent to the 

above transactions the Company entered a share 

sale agreement on 16 May 2003 with PTO 

Properties Limited for the purchase of the 10% 

minority interest held by that company in Sholto 


Limited). The consideration for the acquisition was 

an allotment of 341,592 shares in the capital of 

Turners & Growers Limited at a price of $2.47 per 

share. 

Other than the above the Company and its subsidiaries 

have not entered into any material contracts (not being 

contracts entered into in the ordinary course of 

business) in the two years preceding the date 

of this Profile. 


Pending proceedings 

There is a pending arbitration in relation to the quantum 

of rent payable by the Company over the next five years 

concerning the lease of a South Island property. While 

the Company expects a satisfactory conclusion to be 

reached on the matter, an adverse ruling may have a 

material adverse effect on the Company. Specifically, 

the outcome of this dispute could affect profitability by 

approximately +/-$650,000 per annum. Other than this, 

there are no legal proceedings or arbitrations pending 

at the date of this Profile that may have a material 

adverse effect on the Company or any of its 

subsidiaries. 

Restriction on the Company or its subsidiaries 

Under a composite debenture with ANZ Banking 

Corporation and Westpac Banking Corporation 

(“Lenders”), the Company and its subsidiaries are 

restricted from distributing profits (other than dividends 

paid out of profits in accordance with generally 

accepted accounting practice) except in compliance 

with certain requirements imposed by the Lenders 

under the composite debenture dated 20 February 

2004. The Company and its subsidiaries are restricted 

from borrowing to the extent that such borrowing will 

result in the Company breaching certain covenants 

given to the Lenders regarding the maintaining of 

specified financial ratios. The facility currently in place 

with the Lenders restricts the ability of the Company 

and its subsidiaries, in certain circumstances, to 

distribute profits or to borrow further. 

Financial Statements 

Audited financial statements for the Group for the year 

to 31 December 2003 are set out on pages 58 to 84 

of this Profile. The NZX has granted the Company 

a waiver from the NZSX listing rules regarding the 

provision of financial information. Details of the 

waiver are set out on page 51 of this Profile. 

Places of inspection of documents 

A copy of the Company’s constitution and its most 

recent annual report and financial statements may be 

inspected at no charge during normal business hours at 

the registered office of the Company at the Head Office 

Building, Mt Wellington Markets Complex, 2 Monahan 

Road, Mt Wellington, Auckland. These documents may 

also be viewed in the “Investor Centre” section on the 

Company’s website: www.turnersandgrowers.com. 

Shareholders are also entitled to copies of such 

documents upon written request. 

Other material matters 

There are no material matters relating to the Company 

or its subsidiaries other than the matters elsewhere set 

out in this Profile and contracts entered into in the 

ordinary course of business of the Company or its 

subsidiaries. 

Directors’ Statement 

The Directors of the Company, after due enquiry by 

them in relation to the period between 31 December 

2003 and the date of this Profile, are of the opinion that 

no circumstances have arisen that materially adversely 

affect the trading or profitability of the Company or its 

subsidiaries, the value of the assets of the Company 

or its subsidiaries or the ability of the Company or 

its subsidiaries to pay its debts due within the next 

12 months. 

Auditors’ Report 

The auditor’s report is set out on page 86 of this Profile. 

SIGNED for and on behalf of 

TURNERS & GROWERS LIMITED 

by: 

A.I. (Tony) Gibbs 

M.R. (Michael) Dossor 

J.A. (John) Hambling 

R.A. (Ross) Burney 

B.M. (Brian) D’ath 

W.J.E. (Bill) Lynch 

L.A. (Luis) Noboa III 

M.G. (Mark) Tregidga 


58 

Turners and Growers Group Listing Document 

Financial Statements 

For the year ended 31 December 2003 


(with ENZA Consolidated) 

Statement of Financial Performance 

Turners & Growers Limited (with ENZA Consolidated) 

Statement of Group Financial Performance 


12 Months 6 Months 

Notes Dec 03 Dec 02 

$000 $000 

Operating revenue 1 599,213 106,035 

Operating expenses 2 (584,906) (106,457) 

Operating surplus / (deficit) before income tax 14,307 (422) 

Income tax 11 (2,471) (436) 

Operating surplus / (deficit) after income tax 11,836 (858) 

Minority interests in surpluses of subsidiaries 8 (109) (41) 

Net surplus / (deficit) 11,727 (899) 

Comprising: 

Net surplus / (deficit) from continuing activities 11,727 (899) 

11,727 (899) 

Earnings per share 

Basic earnings (in cents) 25 17 (4) 

Statement of Movements in Equity 


Statement of Group Movements in Equity 


The accompanying notes form an integral part of these financial statements. 



$000 $000 

Equity at beginning of period 164,613 62,116 

Net surplus / (deficit) from Parent and subsidiaries 5 11,727 (899) 

Foreign currency translation reserve movement 4 (1,209) – 

Revaluation of assets 4 4,524 1,849 

Total recognised revenues and expenses 15,042 950 

Movement in minority interest 8 (956) 43 

Contributions from owners 3 2,375 104,655 

Distributions to owners 5,6 – (3,151) 

1,419 101,547 

Equity at end of period 181,074 164,613 


60 


Statement of Group Financial Position 

As at 31 December 2003 


Statement of Financial Position 

31 Dec 31 Dec 

Notes 2003 2002 

$000 $000 

EQUITY 

Share capital 3 131,368 128,993 

Reserves 4 9,796 6,481 

Retained earnings 5 39,751 28,024 

Shareholders’ equity 180,915 163,498 

Minority interest 8 159 1,115 

Total equity 181,074 164,613 

LIABILITIES 


Payables and accruals 12 2,121 759 

Borrowings 9 42,305 42,083 

Total non-current liabilities 44,426 42,842 

Current liabilities 

Bank overdraft and current facilities 9 – 1,399 

Payables and accruals 12 49,573 58,239 

Borrowings 9 – 6,330 

Total current liabilities 49,573 65,968 

Total liabilities 93,999 108,810 

TOTAL EQUITY AND LIABILITIES 275,073 273,423 

ASSETS 

Non-current assets 

Investments in subsidiaries 15 – – 

Investments in associates 16 3,490 3,760 

Other investments 17 1,609 1,798 

Property, plant & equipment 13 174,433 170,311 

Property held for sale 14 515 2,157 

Deferred taxation 10 3,382 3,055 

Intangible assets 18 5,892 6,710 

Total non-current assets 189,321 187,791 

Current assets 

Cash and bank balances 11,290 18,331 

Accounts receivable 20 46,808 47,364 

Property held for sale 14 1,481 – 

Inventories 19 26,173 19,937 

Total current assets 85,752 85,632 

TOTAL ASSETS 275,073 273,423 


Statement of Cash Flows 


Statement of Group Cash Flows 




$000 $000 

Operating activities 

Cash was provided from: 

Receipts from customers 969,680 303,353 

Dividends received 1 202 22 

Interest received 1 853 109 

Cash was disbursed to: 

970,735 303,484 

Payments to suppliers and employees (961,920) (290,643) 

Interest paid 2 (6,098) (702) 

Net GST refunded / (paid) 19,913 (2,511) 

Income tax (paid) / received (4,659) (599) 

(952,764) (294,455) 

Net cash inflows / (outflows) from operating activities 17,971 9,029 

Investment activities 


Proceeds from sale of property, plant and equipment 2,107 2,092 

Proceeds from sale of investments 1 13 

Cash acquired on purchase of subsidiary 15 – 18,314 


2,108 20,419 

Purchase of property, plant and equipment (20,558) (7,293) 

Purchase of investments (7) (254) 

Capital injection in subsidiary (132) – 

(20,697) (7,547) 

Net cash (outflows) / inflows from investing activities (18,589) 12,872 

Financing activities 


Issue of ordinary shares 1,531 – 

External loan repayments 90 55 


1,621 55 

Dividends paid to Parent shareholders 6 – (396) 

Dividends paid to minority shareholders 8 (217) – 

Bank commercial bill facility and term loan repayments (6,108) (665) 

(6,325) (1,061) 

Net cash (outflows) from financing activities (4,704) (1,006) 

Net (decrease) / increase in cash held (5,322) 20,895 

Foreign currency translation adjustment (320) – 

Cash at beginning of period 16,932 (3,963) 

Cash at end of period 11,290 16,932 

Comprises: 

Bank deposits and cash 11,290 18,331 

Bank facilities – (1,399) 

11,290 16,932 



62 


Statement of Group Cash Flows (continued) 


Reconciliation with operating surplus 


Statement of Cash Flows (continued) 


Dec 03 Dec 02 

$000 $000 

Reported surplus / (deficit) after tax 11,727 (899) 

Share of Associated entity (profit) / loss (293) 2 

Minority interest share of surpluses 109 41 

11,543 (856) 

Items not involving cash flows 

Depreciation expense 19,898 5,293 

Amortisation of leasehold property 50 25 

Investment devaluation / (revaluations) 153 325 

(Decrease) in provision for doubtful debts (1,486) (76) 

Amortisation of goodwill & brands 816 160 

Deferred taxation (327) 207 

19,104 5,934 

Impact of changes in working capital items 

(Increase) in income tax receivable (1,703) (372) 

Decrease in debtors and prepayments 3,612 753 

(Decrease) / increase in creditors and provisions (7,491) 4,276 

(Increase) in inventories (6,236) (550) 

(11,818) 4,107 

Items classified as investing activities 

Net loss / (gain) on sale of properties 1 (29) 

Net (gain) on sale of plant and equipment (858) (120) 

Net (gain) on sale of investments (1) (7) 

(858) (156) 

Net cash inflows / (outflows) from operating activities 17,971 9,029 


Statement of Accounting Policies 


Statement of Group Accounting Policies 

Entities reporting 

The consolidated financial statements for the Group are 

for the economic entity comprising Turners & Growers 

Limited, its subsidiaries and associates. 

Statutory base 

Turners & Growers Limited is a company registered under 

the Companies Act 1993. 

The financial statements have been prepared in accordance 

with the requirements of the Financial Reporting Act 1993 

and the Companies Act 1993. 

Measurement base 

The accounting principles recognised as appropriate for 

the measurement and reporting of financial performance 

and financial position on an historical cost basis have been 

applied, with the exception of the revaluation of certain 

assets as detailed in the specific policies below. 

Accounting policies 

The financial statements are prepared in accordance 

with New Zealand Generally Accepted Accounting Practice. 

The accounting policies that materially affect the measurement 

of financial performance, financial position and cash flows 

are set out below. 

Group financial statements 

The Group financial statements consolidate the financial 

statements of subsidiaries, using the purchase method, 

and include the results of associates using the equity 

method. 

Subsidiaries are entities that are controlled, either directly 

or indirectly, by the Parent Company. 

Associates are entities in which the Parent Company, either 

directly or indirectly, has a significant but not controlling 

interest. 

All material transactions between subsidiaries or between 

the Parent Company and subsidiaries are eliminated on 

consolidation. 

The results of any subsidiaries or associates acquired or 

disposed of during the period are included in the consolidated 

statement of financial performance from the date of 

acquisition or up to the date of disposal. 

Revenue 

Gross operating revenue 

Revenues from the trading operations of ENZA Limited and 

its subsidiaries are included for the year ended 2003 but 

are not included in the comparatives for 2002. 

Gross operating revenue comprises commission earnings 

and amounts received and receivable by the Group for 

other goods and services supplied in the ordinary course 

of business. Gross operating revenue is stated net of 

Goods and Services Tax collected from customers. 

Operating revenue also included the proceeds of the sale 

of one (2002: one) property asset sold during the period. 

Investment income 

Dividend income is recognised in the period the dividend 

is received. 

Interest and rental income are accounted for as earned. 

Impairment 

Annually, the directors assess the carrying value of each 

asset. Where the estimated recoverable amount of the 

asset is less than its carrying amount, the asset is written 

down. The impairment loss is recognised in the statement 

of financial performance. 

Income Tax 

The tax expense recognised for the period is based on the 

accounting surplus, adjusted for permanent differences 

between accounting and tax rules. 

The impact of all timing differences between accounting 

and taxable income is recognised as a deferred tax liability 

or asset. This is the comprehensive basis for the calculation 

of deferred tax under the liability method. 

A deferred tax asset, or the effect of losses carried forward 

that exceed the deferred tax liability, is recognised in the 

financial statements only where there is virtual certainty 

that the benefit of the timing differences, or losses, will 

be utilised. 

Goods and Services Tax (GST) 

The statement of financial performance and statement 

of cash flows have been prepared so that all components 

are stated exclusive of GST. All items in the statement of 

financial position are stated net of GST, with the exception 

of receivables and payables, which include GST invoiced. 



Statement of Group Accounting Policies (continued) 

Foreign currencies 

Transactions 

Foreign currency transactions are recorded at the exchange 

rates in effect at the date of the transaction except where 

forward currency contracts have been taken out to cover 

forward currency commitments. Where short term forward 

contracts have been taken out the transaction is translated 

at the rate contained in the contract. 

Monetary assets and liabilities arising from trading 

transactions or overseas borrowings are translated at closing 

rates. Gains and losses due to currency fluctuations on these 

items are included in the statement of financial performance 

except where monetary liabilities are identified as a hedge 

against an independent foreign operation. 

Foreign operations 

Revenues and expenses of any independent foreign 

operations are translated to New Zealand dollars at the 

exchange rate in effect at the date of the transaction, 

or at rates approximating them. Assets and liabilities are 

converted to New Zealand dollars at the rates of exchange 

ruling at balance date. 

Exchange differences arising from the translation of 

independent foreign operations are recognised in the 

foreign currency translation reserve. 

Property, plant and equipment 

Initial recording 

The cost of purchased property, plant and equipment is 

the value of the consideration given to acquire the assets 

and the value of other directly attributable costs which 

have been incurred in bringing assets to the location and 

condition necessary for their intended service. 

Revaluations 

Land and buildings are valued by independent registered 

valuers on the basis of open market value for the highest 

and best use, with a willing but not anxious buyer and a 

willing but not anxious seller. The revaluations are conducted 

on a systematic basis across the Group so that each asset 

is revalued at least every three years. 

Property intended for sale 

Properties intended for sale are carried at the lower of 

their net book value, at the time they are determined to 

be surplus, or their estimated market price as determined 

by the directors or by independent valuation. 

Depreciation 

Depreciation of property, plant and equipment, other than 

freehold land, is calculated on a straight line basis so as to 

expense the cost of the assets, or the revalued amounts, 

to their expected residual values over their useful lives as 

follows: 

Statement of Accounting Policies (continued) 

Buildings & land improvements 20 – 50 years 

Plant, Furniture and Fittings 3 – 12 years 

Transport Vehicles 5 – 7 years 

Motor Vehicles 5 years 

Office Equipment 3 – 10 years 

Hire Containers 3 – 6 years 

Leased assets 

Operating leases 

Leases that are not finance leases are classified as operating 

leases. Operating lease payments are recognised as an 

expense in the periods the amounts are payable. 

Investments 

Investments in shares in subsidiary companies are stated 

at director’s valuation but not exceeding shareholders’ 

equity. 

Investments in associate entities and partnerships are 

stated at the fair value of the net tangible assets at 

acquisition, plus the share of post acquisition increases 

in reserves. While the Group no longer holds properties 

for investment purposes, it has remaining property in the 

balance sheet, “Property held for sale”, upon which some 

rental income is being received. 

Other investments are stated at director’s valuation but not 

exceeding shareholders’ equity. 

Discount on acquisition of ENZA. 

The acquisition by Turners & Growers Limited of ENZA 

Limited and its subsidiaries as at 31 December 2002 

gave rise to a discount on acquisition. At the time of the 

acquisition the discount was applied to software assets 

within ENZA. The effect of this treatment is to reduce the 

Group’s depreciation charge for the year. The discount on 

acquisition will be realised over a period of two years. 

Intangible assets 

Patents, trademarks, brands and licenses. 

Patents, trademarks, brands and licenses are amortised 

over the shorter of their anticipated useful lives or ten years. 

Research and development 

All research and development costs are recognised as an 

expense when incurred. 

Goodwill 

The excess of cost over the fair value of the net assets of 

subsidiaries and associate entities is recognised as goodwill 

and is amortised to the statement of financial performance 

over the shorter of its estimated useful life or ten years. 

Inventories 

Inventories are stated at the lower of cost (first in, first out 

basis) or net realisable value. 

Statement of Accounting Policies (continued) 


Statement of Group Accounting Policies (continued) 

Accounts receivable 

Accounts receivable are carried at estimated realisable 

value after providing against debts where collection is 

doubtful. Export produce advances are included within 

accounts receivable. 

Employee entitlements 

Employee entitlements to salaries and wages, annual 

leave, long service leave and other benefits are recognised 

when they accrue to employees. 

The liability for employee entitlements is carried forward 

at the current value of the estimated future entitlement. 

Financial Instruments 

Recognised 

Financial instruments carried on the statement of financial 

position include cash and bank balances, investments, 

receivables, trade creditors and borrowings. The particular 

recognition methods adopted are disclosed in the individual 

policy statements associated with each item. 

Financial instruments that are designated as hedges of 

specific items are recognised on the same basis as the 

underlying hedged items. 

Financial instruments that do not constitute hedges are 

stated at market value and any resultant gain or loss is 

recognised in the statement of financial performance. 

Unrecognised 

The net differential paid or received on any interest swaps 

is recognised as a component of interest expense or revenue 

over the period of the agreement. 

Premiums paid on any interest rate options, and net 

settlements on maturity of forward rate agreements are 

amortised to the statement of financial performance over 

the period of the underlying asset or liability. 

Statement of Cash Flows 

The following are the definitions of the terms used in the 

statement of cash flows: 

(a) Receipts from customers include sales on behalf of 

third parties. Payments to suppliers and employees 

include payments made on behalf of purchasers. 

(b) Operating activities include all transactions and other 

events that are not investing or financing activities. 

(c) Investing activities are those activities relating to the 

acquisition, holding and disposal of property, plant and 

equipment and of investments. Investments can include 

securities not falling within the definition of cash. 

(d) Financing activities are those activities that result in 

changes in the size and composition of the capital 

structure. This includes both equity and debt not falling 

within the definition of cash. Dividends paid in relation 

to the capital structure are included in financing activities. 

(e) Cash is considered to be cash on hand and current 

accounts in banks, net of bank overdrafts. 

Changes in Accounting Policies 

Investments in associates 

Under the new policy the Group’s share of the net surpluses / 

(deficits) of associates is recognised as part of operating 

surplus before income tax. 

Previously, the Group recognised dividends received from 

associates in operating surplus before tax and recognised 

the Group’s share of retained surpluses / (deficits) of 

associates in net surplus. 

The Board of Directors has adopted this change to conform 

to the requirements of Financial Reporting Standard No.38 

Accounting for Investments in Associates. 

This change in accounting policy has resulted in an increase 

in operating surplus before tax of $293,000 (2002: decrease 

of $2,000). 

The abovementioned change has had no effect on net 

surplus. Comparative figures have been adjusted to comply 

with the new policy. 

There have been no other changes in accounting policies. 

64 Turners and Growers Group Listing Document 


66 


Notes to the Group Financial Statements 

1 REVENUE 

CONTINUING ACTIVITIES 


Notes to the Financial Statements 


Dec 03 Dec 02 

$000 $000 

Trading revenue 

Sales and commissions 595,227 105,556 

Investment revenue 

Other dividends received 202 22 

Interest received 853 109 

Rental from properties held for sale 355 172 

Other revenue 

Gain on disposal of property – 29 

Gain on disposal of plant & equipment 858 142 

Net gain on disposal of investments 1 7 

Share of surpluses / (deficits) from associates 293 (2) 

Loan recovery (Chile) 1,424 – 

Total revenue from continuing activities 599,213 106,035 

Notes to the Financial Statements (continued) 


Notes to the Group Financial Statements (continued) 

2 OPERATING EXPENSES 

Operating expenses include: 

CONTINUING ACTIVITIES 


Dec 03 Dec 02 

$000 $000 

Operating expenses 

Net loss on sale of property plant & equipment 1 22 

Amortisation of goodwill & brands 816 160 

Amortisation of leasehold property 50 25 

Exchange losses 718 49 

Research & development 3,272 – 

Rental expense on operating leases 10,687 1,992 

Depreciation 

Buildings & improvements 4,717 1,330 

Motor vehicles 1,379 829 

Hire containers 1,748 1,161 

Plant & equipment 12,054 1,973 

Total depreciation 19,898 5,293 

Costs of offering credit 

Bad debts written off 1,258 241 

Decrease in provision for doubtful debts (1,486) (76) 

Cost of borrowings 

Interest paid – Bank borrowings 6,098 702 

Investment expenses 

Devaluation of investment 153 325 

Governance expenses 

Directors’ fees 350 113 

Auditors’ fees 

Audit fees paid to principal auditors 350 81 

Audit fees paid to other auditors 68 – 

Fees paid for other services provided by principal auditors 117 115 

Sundry expenses 

Donations 31 22 




3 SHARE CAPITAL 

Issued and paid in capital: 


31 Dec 31 Dec 

2003 2002 

$000 $000 

Ordinary shares 

Balance at beginning of period 128,993 24,338 

Share issue made during the period 2,375 101,900 

Shares issued in lieu of dividends – 2,755 

Balance at end of period 131,368 128,993 

As at 31st December 2003 there were 70,978,336 shares issued and fully paid. (2002: 70,016,899). All ordinary shares 

rank equally with one vote attached to each fully paid ordinary share. There is no other class of shares issued. 

During the period, there were no shares repurchased and cancelled in Turners & Growers Limited. 

Shares issued 

On the 31st March 2003, 587,045 shares in Turners & Growers Limited were issued to PTO Properties Limited, at a 

price of $2.47 per share, to purchase the tomato packhouse land and buildings at Favona Road, Mangere. 

On the 23 May 2003, 341,592 shares in Turners & Growers Limited were issued to PTO Properties Limited, at a price 

of $2.47 per share, to acquire the remaining shares in Status Produce Limited. 

A further 32,800 shares were issued on the 19th May 2003 at $2.47 per share, pursuant to an agreement allowing 

the vendors of Beekist Services Limited the option of acquiring a shareholding interest in Turners & Growers Limited 

for cash. 

There are no share ownership plans in operation. 

4 ASSET REVALUATION RESERVE 

31 Dec 31 Dec 

2003 2002 

$000 $000 

Land and buildings revaluation reserve 


Valuation increases 4,524 1,849 


Foreign currency translation reserve 

Net exchange difference on translation of overseas subsidiaries (1,209) – 

Balance at end of period (1,209) – 

Share of associated entity’s asset revaluation reserve 

Balance at beginning of period 64 64 

Balance at end of period 64 64 

Total reserves 9,796 6,481 




5 RETAINED EARNINGS 

31 Dec 31 Dec 

2003 2002 

$000 $000 

Parent and subsidiaries 


Surplus / (deficit) for period before share of associate surpluses 11,434 (897) 

Dividends – (3,151) 


Share of associated entities’ retained earnings 

Balance at beginning of period 335 337 

Share of retained surpluses / (deficits) of associates 293 (2) 

Balance at end of period 628 335 

Total retained earnings 39,751 28,024 


Dec 03 Dec 02 

$000 $000 

68 Turners and Growers Group Listing Document 

Turners and Growers Group Listing Document 69 

6 DIVIDENDS 

Declared final 

Cash, on ordinary shares – 396 

Shares in lieu, on ordinary shares – 2,755 

Total dividends – 3,151 

Dividend paid for the period was $Nil (2002: $3,151,000). Supplementary dividends of $Nil (2002: $480) were paid / 

provided to shareholders not tax-resident in New Zealand. Dividends were fully imputed in 2002. 

Declaration of dividend 

On the 23 March 2004, the board resolved to provide a final dividend to be paid in respect of the year ended 

31 December 2003. The dividend was paid in April 2004 at a value of 12 cents per share on issue as at 26 March 2004 

with full imputation credits attached.

70 



7 IMPUTATION BALANCES 



31 Dec 31 Dec 

2003 2002 

$000 $000 

Balances 

Imputation credit account 3,600 1,162 

Movements 

Imputation credit account 


Prior period adjustment (133) (280) 

Change in ownership (330) (512) 

Tax payments, net of refunds 2,838 591 

Credits attached to dividends received 95 124 

Impact of acquisition of subsidiaries – 535 

Distributed (32) (4,643) 


8 MINORITY INTERESTS 


Share of surplus in subsidiaries 109 41 

Impact of disposal, amalgamation and acquisition of subsidiaries (2) 2 

Purchase of minority interest in subsidiary (846) – 

Dividends paid and provided to minority interests (217) – 

Balance at end of period 159 1,115 




9 BORROWINGS 

31 Dec 31 Dec 

2003 2002 

$000 $000 

Borrowings due within 12 months 

Bank overdraft – 1,399 

Current portion of term bank loan – 6,330 

– 7,729 

Non-current borrowings 

Secured bank loans and debentures 42,305 42,083 

42,305 42,083 

Principal repayment schedule 

Non-current borrowings 

Later than one, not later than two years 42,305 7,330 

Later than two, not later than five years – 28,990 

Later than five years – 5,763 

42,305 42,083 

December 2003 

Maturing in 2005 42,305 

Aggregate interest rate 5.90% 

December 2002 

Current 7,729 









Maturing in 2012 443 

Aggregate interest rate 8.04% 

Security 

At balance date the Parent Company had a term debt facility from Westpac Banking Corporation amounting to $6M 

committed for a minimum period of two years. This amount is fully drawn at balance date. Overdraft and working 

capital facilities of up to $17M are undrawn at balance date. 

These facilities are secured by a composite debenture from Turners & Growers Limited and all wholly owned operating 

subsidiaries in favour of Westpac Banking Corporation. 

As at balance date, a subsidiary company has a term debt facility from Westpac Banking Corporation amounting to 

$11.3M. The facility is secured by a mortgage over the property of the subsidiary company and a debenture in favour 

of Westpac Banking Corporation. 

A subsidiary has a term funding facility of $25M that is fully drawn. It also has a seasonal funding facility of $165M 

that is unutilised at balance date. This subsidiary also has $5M overdraft facilities that were unutilised at balance date. 

The subsidiaries loans are secured by First Registered Mortgage Debentures over its assets and undertakings. 

After adjustment for unpresented cheques, the total bank borrowings as disclosed in the statement of financial 

position are within the Group’s total banking facility. 

All facilities expire on 15 January 2005. Subsequent to year end these have been renegotiated as shown under 

Borrowings 2004. 


72 



9 BORROWINGS (continued) 



Interest rates 

The interest rate on the $6M term facility is currently 5.71% (2002: 6.74%) on a floating basis. 

The interest rate on the $11.3M term facility is currently 6.10% (2002 7.41%) on a floating basis. 

The interest rate on the $25M term facility is currently 5.78% (2002: 6.51%) on a floating basis. 

Borrowings 2004 

The banking facilities for 2004 have been renegotiated as follows: 

Facility Type Amount Expiry Date 

Term debt facility $50M 15 January 2007 

Working capital facility $10M 15 January 2005 

Seasonal facility $125M 31 December 2004 

Money market facility $10M Uncommitted 

Overdraft facility $5M Uncommitted 

10 DEFERRED TAXATION 

31 Dec 31 Dec 

2003 2002 

$000 $000 

Balance at beginning of period – asset 3,055 1,327 

Tax credit / (charge) for the period (Note 11) 327 (207) 

Impact of disposal, amalgamation and acquisition of subsidiaries – 1,935 

Balance at end of period – asset 3,382 3,055 

The Group has recognised a deferred tax asset on timing differences of $10,248,000 (2002: $9,257,000) which are 

expected, with virtual certainty, to reverse in future periods. The tax effect of these differences is $3,382,000 (2002: 

$3,055,000). 

11 INCOME TAX 


Dec 03 Dec 02 

$000 $000 

The income tax provision has been calculated as follows: 

Surplus / (deficit) for the period before taxation: 14,307 (420) 

Income tax on surplus / (deficit) for the period at 33% 

Plus / (less): 

4,721 (139) 

Dividends from other than wholly owned companies – 3 

Benefit of imputation credits received (382) (10) 

Non-deductible items 1,007 475 

Non-taxable income (917) (96) 

4,429 233 

Plus (over) / under provision in prior periods (1,958) 203 

Income tax recognised in statement of financial performance 2,471 436 

Attributable to continuing activities 2,471 436 

The income tax expense / (credit) is represented by: 

2,471 436 

Tax payable in respect of the current period 2,798 229 

Deferred taxation (327) 207 

2,471 436 




12 PAYABLES AND ACCRUALS 

31 Dec 31 Dec 

2003 2002 

$000 $000 

Current 

Trade creditors 41,812 49,647 

Other provisions 1,909 4,719 

Employee entitlements 5,852 3,873 

Income tax – – 

49,573 58,239 

Non-current 

Employee entitlements 505 367 

Term payables 823 253 

Other provisions 793 139 

2,121 759 

Other provisions 

Current 

Restructuring – 1,922 

Onerous leases 1,134 2,797 

Other 775 – 

Non-current 

1,909 4,719 

Onerous leases 793 139 

(a) Restructuring 

2,702 4,858 

During November 2002 Turners & Growers Limited and Enza Limited announced detailed plans to merge operations 

and situate the Group Head Office in Auckland. The restructuring provision in 2003 is Nil (2002:$1,922,000). 

Balance at beginning of period 1,922 – 

Provided during the period – 808 

Expenditure during period (1,922) – 

Balance from acquired subsidiary – 1,114 

Balance at end of period – 1,922 

(b) Onerous leases 

The Group has provided for onerous leases in the financial statements. Provisions relate to lease rentals that are 

considered to be above market or that are no longer used in the operations but have a remaining lease commitment. 

The onerous lease provision is $1,927,000 (2002: $2,936,000). 

Balance at beginning of period 2,936 415 

Provided during period 720 – 

Expenditure during period (1,729) (221) 



(c) Other 

The Group has provided for disputed lease amounts in the financial statements. The disputed lease provision is 

$775,000 (2002: Nil). 

Provided during period 775 – 

Balance at end of period 775 – 


74 



13 PROPERTY, PLANT AND EQUIPMENT 



31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 

2003 2003 2003 2002 2002 2002 

Cost or Accumulated Net Book Cost or Accumulated Net Book 

Valuation Depreciation Value Valuation Depreciation Value 

$000 $000 $000 $000 $000 $000 

Freehold land 

At cost 11,253 – 11,253 6,781 – 6,781 

At valuation 18,443 – 18,443 14,230 – 14,230 

Total freehold land 29,696 – 29,696 21,011 – 21,011 

Buildings 

On freehold land at cost 75,735 12,040 63,695 74,545 8,163 66,382 

On freehold land at valuation 21,719 466 21,253 22,300 427 21,873 

On leasehold land at cost 1,295 367 928 422 230 192 

Total buildings 98,749 12,873 85,876 97,267 8,820 88,447 

Motor vehicles 

At cost 

Hire containers 

15,680 11,049 4,631 16,228 10,398 5,830 

At cost 

Plant & equipment 

12,960 9,731 3,229 14,247 10,807 3,440 

At cost 181,662 138,106 43,556 176,919 128,946 47,973 

Total vehicles & equipment 210,302 158,886 51,416 207,394 150,151 57,243 

Capital work in progress 7,445 – 7,445 3,610 – 3,610 

TOTAL 346,192 171,759 174,433 329,282 158,971 170,311 

Valuation information 

The Monahan Road Mt Wellington properties, because of materiality, are revalued annually. Each other property is 

revalued at least once every three years on a rolling cycle, other than properties acquired within three years which 

are shown at cost. Properties stated at valuation were revalued in accordance with valuation reports of independent 

registered valuers. The principal valuers are DTZ Darroch Limited, C B Richard Ellis Limited, Rawcliffe & Co Limited 

and Mahoney Gardner Churton Limited. All valuers used are Registered and are Associates of the New Zealand 

Institute of Valuers. 

Dec 03 Dec 02 

$000 $000 

The dates of the valuation reports are as follows: 

Dated between 1 January 2003 and 31 December 2003 29,747 – 

Dated between 1 July 2002 and 31 December 2002 5,500 5,500 

Dated prior to 1 July 2002 4,915 31,030 

40,162 36,530 

The total government valuation of land and buildings is $94,953,000. 




14 PROPERTY HELD FOR SALE 

Certain properties which are surplus to Group requirements have been designated for sale as soon as market conditions 

permit. Where the properties are expected to be sold within twelve months they have been classified as current assets. 

Those expected to be realised beyond twelve months are classified as non-current. The sole remaining Viaduct Basin 

property is carried at a value determined by the directors to be appropriate in the light of current negotiations. 

15 INVESTMENTS IN SUBSIDIARIES 

The following subsidiaries have been included in the Group consolidated financial statements: 

Interest held by Group 

Name of Entity Principal Activity Dec-03 Dec-02 Location 

ENZA Limited Pipfruit exporter and juice 

wholesaler 100% 100% New Zealand 

ENZA Pipfruit Limited Pipfruit export 100% 100% New Zealand 

ENZA Group Services Limited 

Horticultural Corporation of 

Investment company 100% 100% New Zealand 

New Zealand Limited Non trading 100% 100% New Zealand 

ENZAFOODS New Zealand Limited Apple juice concentrate production 100% 100% New Zealand 

ENZATree Limited Fruit variety development and 

propagation 100% 100% New Zealand 

ENZA Finance Limited 

ENZAFRUIT New Zealand 

Investment company 100% 100% New Zealand 

International Limited Investment company 100% 100% New Zealand 

ENZACOMMERCIAL Holdings Limited Non trading 100% 100% New Zealand 

ENZAFRUIT Marketing Limited Pipfruit marketing 100% 100% New Zealand 

International Fruit Services Limited Fruit export shipping services 67% 67% New Zealand 

ENZACOR Pty Limited Fruit by-product broking 100% 100% Australia 

ENZAFRUIT New Zealand (Belgie) NV Investment company 100% 100% Belgium 

Fibe Holding NV 

ENZAFRUIT New Zealand 

Investment company 100% 100% Belgium 

(Continent) NV Pipfruit marketing 100% 100% Belgium 

Frutesa Investment company 100% 100% Cayman Islands 

Frutesa Chile Limitada 

ENZA New Zealand Deutschland 

Investment company 100% 100% Chile 

GmbH 

ENZAFRUIT New Zealand (Asia) 

Non trading 100% 100% Germany 

Pte Limited Pipfruit promotion and marketing 100% 100% Singapore 

ENZAFRUIT New Zealand (UK) Limited Pipfruit marketing 100% 100% United Kingdom 

ENZA Investments USA, Inc. Investment company 100% 100% United States of America 

ENZA Fresh, Inc. Pipfruit promotion 100% 100% United States of America 

ENZAFRUIT Products Inc. Pipfruit production 100% 100% United States of America 

Turners & Growers Fresh Limited Fruit and produce wholesale 

distributors 100% 100% New Zealand 

Turners Flower Exports Limited Flower exporters 51% 51% New Zealand 

Fruit Distributors Limited Commercial investments 88% 88% New Zealand 

Status Produce Limited Horticulture investments 100% 90% New Zealand 

Aeneid Thirteen Limited Property holdings 100% 100% New Zealand 

Safer Food Technologies Limited Investment company 100% 100% New Zealand 

The balance date of all subsidiaries is 31 December. 


76 



15 INVESTMENTS IN SUBSIDIARIES (continued) 



Acquisition of subsidiary 

On 31 December 2002 the Group acquired 100% of the shares of ENZA Limited for a consideration of $101,900,000. 

From 1 January 2003 the operating results of ENZA Limited and its subsidiaries have been included in the Group 

statement of financial performance. The effect of the acquisition and significant internal restructuring has contributed 

to the Group net surplus increase of $12,626,000. 

The Group did not acquire any subsidiaries in 2003. 

Summary of effect of acquisition of subsidiary: 

Dec 03 Dec 02 

$000 $000 

Net assets acquired: 

Bank balances – 18,314 

Net current assets – 16,328 

Property, plant and equipment – 86,960 

Deferred tax benefits – 1,935 

Intangible assets – 5,272 

Investments – 3,346 

Term payables – (253) 

Borrowings – (30,000) 

– 101,902 

Minority interest – (2) 

Consideration paid – 101,900 

Cash acquired with subsidiary – 18,314 

Shares issued – (101,900) 

Net cash impact of acquisition – 18,314 

Disposal of subsidiaries 

The Group did not dispose of any subsidiaries during the period to 31 December 2003. 

16 INVESTMENTS IN ASSOCIATES 

Associate entities are those in which the Group has a substantial shareholding and in whose commercial and financial 

policy decisions it participates. 

At 31 December 2003 associate entities comprise: 

Carrying Carrying 

Amount Amount 

Balance Principal Dec 03 Dec 02 

Name of Entity Ownership Date Activities Location $000 $000 

Fresh Vegetable Packers Limited 41% 30 June Prepackers New Zealand 447 491 

Exportadora Hortofruticola Zeus (SA) 37% 31 December Non trading Chile – – 

Marlborough Fruit Company Limited 50% 30 September Pipfruit services New Zealand – 124 

David Oppenheimer & Company Pipfruit United States 

I, L.L.C.* 15% 31 December marketing of America 936 776 

Chiquita-ENZA Chile Limitada 40% 30 September Fruit marketing Chile – – 

ENZAFRUIT Worldwide Limited** 

Pipfruit to USA Exporter 

50% 31 December Fruit marketing United Kingdom 2,107 2,369 

Group Limited 8% 31 December Pipfruit services New Zealand – – 

Carrying value 3,490 3,760 

Equity earnings of Associated Companies have been included to 31 December 2003. 

*ENZA Limited is a material supplier to this company and has one board member of a total board of four. 

**An option over 10 percent of the shares exists for ENZAFRUIT Worldwide Limited. 




16 INVESTMENTS IN ASSOCIATES (continued) 


Dec 03 Dec 02 

$000 $000 

Results of associate 

Share of surpluses / (deficits) of associate entities before income tax expense 461 (3) 

Income tax expense (168) 1 

Share of recognised revenues and expenses 293 (2) 

Interests in associate 

Shares at cost 3,360 91 


Currency translation difference (563) – 

Plus: share of post-acquisition retained earnings and reserves 693 400 

Total interest in associates 3,490 3,760 

17 OTHER INVESTMENTS 

31 Dec 31 Dec 

2003 2002 

$000 $000 

At cost or directors’ valuation 

Investments in companies: 

Quoted – – 

Unquoted 1,429 1,444 

Loans and advances 180 354 

1,609 1,798 

The market value of Group and Parent Company quoted investments is $7,391 (2002: $8,653). 

Other investments are stated at director’s valuation but not exceeding shareholders’ equity. 

The directors believe that the net asset backing is the best estimate of the fair value of the Group’s unquoted 

investments. 


78 



18 INTANGIBLE ASSETS 



31 Dec 31 Dec 

2003 2002 

$000 $000 

a) Trademarks and brandnames 

Brandnames (gross) at beginning of period 5,700 – 

Accumulated amortisation at beginning of period (428) – 

Unamortised balance at beginning of period 5,272 – 

Acquired (Note 15) – 5,272 

Current year amortisation (570) – 


This represents the value of the ENZA brand. This value was arrived at by valuation by the independent expert valuer 

DeloitteTouche Tomatsu dated 17 April 2002. This asset is amortised within the Group by the straight line method over 

the period during which benefits are expected to be received. This is a maximum of ten years. 

b) Goodwill 

Goodwill (gross) at beginning of period 1,763 1,763 

Accumulated amortisation at beginning of period (325) (165) 

Unamortised balance at beginning of period 1,438 1,598 

Goodwill arising on acquisition of subsidiary (3) – 

Current year amortisation (245) (160) 


Comprising: 

Goodwill (gross) 1,761 1,763 

Accumulated amortisation (571) (325) 

1,190 1,438 

Total intangible assets 5,892 6,710 

19 INVENTORIES 

Produce 1,859 1,781 

Raw materials 5,226 3,958 

Consumables 1,292 785 

Processed food 17,403 11,899 

Other 393 1,514 

26,173 19,937 




20 ACCOUNTS RECEIVABLE 

31 Dec 31 Dec 

2003 2002 

$000 $000 

Trade receivables 36,372 35,614 

Other debtors and prepayments 7,972 10,989 

Future income tax benefit 2,464 761 

46,808 47,364 

Tax losses carried forward by the Group amounting to $7,466,000 (2002: $12,489,000) have been recognised in these 

accounts. The tax effect of these losses is $2,464,000 (2002: $4,121,000). The utilisation of the tax losses are subject 

to the requirements of the Income Tax Act 1994 being met. 

The main items of prepayments and other debtors are tree deposits, pre-season grower advances, GST, domestic 

banana prepayments and, in 2003, a recovery of a Chile loan that had been written off in a prior year. 

Doubtful debt provision 1,448 3,173 

21 COMMITMENTS 

The following amounts have been committed to by the Group or Parent Company, but are not recognised in the 

financial statements. 

Operating leases 

Non-cancellable operating lease commitments: 

Within one year 7,662 12,559 

One to two years 5,344 7,975 

Two to five years 8,531 15,784 

Over five years 4,574 8,053 

26,111 44,371 

The Group leases premises and plant and equipment. Operating leases held over properties give the Group the right, 

in most cases, to renew the lease subject to a redetermination of the lease rental by the lessor. There are no renewal 

options or options to purchase in respect of operating plant and equipment. Transactions undertaken with subsidiary 

companies were completed on an arms length basis. 

In addition to the amount shown above in respect of operating lease obligations over five years, the Parent Company 

has obligations after five years in respect of perpetually renewable leases estimated to be $347,000 per annum (2002: 

$347,000). 

Capital expenditure 

Amount committed to capital expenditure 10,896 4,663 

December 2003 breakdown 

Warehouse & packhouse development 9,721 

Other 1,175 

10,896 

December 2002 breakdown 

Glasshouse development 2,128 

Other 768 

Plant & Equipment 1,767 

4,663 

All capital commitments are less than one year. 


80 



22 CONTINGENT GAINS AND LOSSES 



The following matters have not been recognised in the financial statements because of the uncertainty associated with 

their outcomes. 

31 Dec 31 Dec 

2003 2002 

$000 $000 

Contingent losses 

Bonds and sundry facilities 331 207 

Conduit tax relief regime 539 – 

Guarantees of bank facilities for associated company 7,286 4,261 

Guarantees of letters of credit for subsidiary company – 943 

Guarantees in respect of VAT liabilities for subsidiary companies 1,471 1,530 

9,627 6,941 

The Parent Company continues to guarantee certain lease agreements on premises occupied by Turners Auctions Limited. 

The Parent Company also holds an indemnity from Turners Auctions Limited in respect of these exposures. 

23 FINANCIAL INSTRUMENTS 

(a) Nature of activities and management policies with respect to financial instruments. 

(i) Foreign exchange 

The Group undertakes transactions denominated in foreign currencies from time to time and resulting from these 

activities, exposures in foreign currency arise. It is the Group’s policy to hedge foreign currency risks as they arise. 

The Group uses forward exchange contracts to manage these exposures. 

The notional principal or contract amounts of foreign exchange instruments outstanding at balance date are as follows: 

Foreign currency forward exchange contracts 

– Sales commitments 13,930 13,536 

– Purchase commitments 

Foreign currency options 

1,617 1,414 

– Sales commitments – 5,705 

Notional principal 15,547 20,655 

The estimated fair values at 31 December 2003 of the Group’s financial instruments, along with their carrying value, 

are as follows: 

2003 2002 

31 Dec 31 Dec 31 Dec 31 Dec 

Carrying Fair Carrying Fair 

Value Value Value Value 

Assets and liabilities $000 $000 $000 $000 

Foreign currency forward exchange contracts – 308 536 680 

Options – – 552 552 

This table measures the difference between the forward exchange contract rates and the spot rates at 31 December 2003, 

where as the options were valued at market using the Black-Scholes model for option pricing on 31 December 2003. 

Subsequent movements in the exchange rate will change the overall value. 




23 FINANCIAL INSTRUMENTS (continued) 

General exposure to currency risk 

At balance date the Group has no unhedged receivables. (2002: AUD4,739,991, USD264,936 and EUR258,720). 

The Group has exposure to foreign currency risk as a result of transactions denominated in foreign currencies from 

normal trading activities. Major trading currencies are: 

US dollar, Australian dollar, Japanese yen, Euro and Great Britain pound. 

Where exposures are certain and/or contracted, the Group hedges up to 100% of the net exposures. 

The Group uses foreign currency forward exchange contracts and foreign currency options to manage foreign currency 

exposures. All existing contracts expire in 2004. 

(ii) Interest rate 

The Group has term floating rate borrowings used to fund ongoing activities which are repriced at the option of the 

borrower on roll-over dates. Management monitor the interest rate exposure and, if appropriate, hedges interest rate 

exposures in financial markets. 

There were no interest rate contracts outstanding at balance date. 

The Parent Company lends to and borrows from its subsidiary companies. Interest is calculated daily based on the 

Interbank Lending Rate. 

General exposure to interest rate risk 

The Group has exposure to interest rate risk to the extent that it borrows for fixed periods at fixed rates. 

The following table identifies the periods in which financial instruments that are subject to interest rate risk re-price. 

Effective 12 months 

Interest Total or greater 

Repricing Analysis Rate $000 $000 

Liabilities 

Loan 1 5.78% 25,000 25,000 

Loan 2 6.10% 11,305 11,305 

Loan 3 5.71% 6,000 6,000 

All loans expire on the 15th January 2005. 

31 Dec 31 Dec 

2003 2002 

(iii) Credit / settlement risk $000 $000 

Bank balances 11,290 18,331 

Receivables 46,808 47,364 

Foreign currency forward exchange contracts and foreign currency options 15,547 16,038 

The above maximum exposures are net of any recognised provision for losses on these financial instruments. 

No collateral is held on the above amounts. 

The Group incurs credit risk from transactions with trade receivables and financial institutions in the normal course 

of its business. 

The Group manages its exposure to credit risk and performs credit evaluations on all customers requiring credit. 

Where possible interests are registered on the Personal Properties and Securities Register. 


82 






The settlement risk from foreign currency forward exchange contracts is the contract value in NZD to be received from 

the counterparties. The settlement risk from foreign currency options is the fair value of the contracts because in-themoney 

options are settled with cash payments rather than actual foreign currency exchanges. 

All financial instruments not recognised in the statement of financial position are with registered banks and within 

credit disciplines established by the Board of Directors. The Group does not expect to incur any losses on any financial 

instruments as a result of non-performance by counterparties. 

The Group does not have any significant concentration of credit risk. 

Based on a credit risk assessment, the Group can require letters of credit, if deemed appropriate, for trade transactions. 

Any loans or advances are secured by collateral through the Personal Property Register. 

(b) Fair values 

The estimated fair values of the Group’s financial assets and liabilities are noted below: 

Dec 03 Dec 02 

Carrying Fair Carrying Fair 

Value Value Value Value 

$000 $000 $000 $000 

Assets 

Investments 5,099 5,106 5,558 5,566 

Foreign exchange contracts – 308 536 680 

Currency options – – 552 552 

Liabilities 

Term liabilities 42,305 42,305 42,083 42,083 

See note 9 for details on interest rates on term liabilities. 

The following methods and assumptions were used to estimate the fair values for each class of financial instrument: 

Debtors and prepayments, creditors and accruals, and bank overdraft. 

The carrying value of these items is equivalent to their fair value and therefore they are excluded from the table shown 

above. 

Investments 

The fair value of listed investments is estimated based on quoted market prices at balance date. The fair value of 

unlisted investments is estimated to be the net asset backing as there are no quoted market prices available. 


The fair value of the Group’s term liabilities is estimated based on current market rates available to the Group for debt 

of similar maturity. 

Foreign exchange contracts 

The fair value of these instruments is estimated based on the quoted market price of these instruments. 

Foreign currency monetary assets and liabilities were converted into New Zealand dollars at the following rates. 

Dec 03 Rate Applied Dec 02 Rate Applied 

USD/NZD 0.6550 USD/NZD 0.5259 

GBP/NZD 0.3685 GBP/NZD 0.3281 

EUR/NZD 0.5220 EUR/NZD 0.5019 

AUD/NZD 0.8740 AUD/NZD 0.9289 

SGD/NZD 1.1180 SGD/NZD 0.9291 

Monetary assets and liabilities include cash, accounts receivable, prepayments and accounts payable. 





31 Dec 31 Dec 

2003 2002 

$000 $000 

Foreign exchange gains/(losses) 

Realised foreign exchange gains/(losses) (800) (49) 

Unrealised foreign exchange gains/(losses) 82 – 

Total foreign exchange gains/(losses) (718) (49) 

24 RELATED PARTY TRANSACTIONS 

The Group handles imported bananas supplied by the Pacific Fruit Group of Ecuador of which Mr L.A. Noboa is an 

associated person. The fruit is handled on a consignment arrangement under which the supplier retains ownership 

and the Group receives a selling commission. All transactions are conducted at arms length and at normal commercial 

rates. The sales value of the produce sold on behalf of Pacific Fruit Group during the period was $43.3M (2002: $24.0M). 

A balance of $108,995 is owing by the Group to the Pacific Fruit Group of Ecuador as at 31 December 2003 (2002: 

owing by the Group $1,090,000). 

Interests associated with three other directors, Mr A.I. Gibbs, Mr B.M. D’Ath and Mr W.J.E. Lynch and one executive 

staff member Mr L.J. Sowerby sold produce through the Group during the period. Revenue generated on these sales 

was approximately $1,158,000 (2002: $211,000). Transactions involving packaging, coolstorage and containers 

amounted to $397,000 (2002: $52,000). All transactions were conducted at arms length and on the company’s normal 

commercial terms. $23,000 is owing to the Group as at 31 December 2003. (2002: owing to the Group $1,000). 

During the period the Group purchased land & buildings from PTO Properties Limited in which a director, Mr M.G. 

Tregidga, held an interest. All negotiations were performed at arms length and with full disclosure, and the acquisition 

price was supported by independent professional valuation of all material assets.The consideration was settled by 

Turners & Growers Limited issuing 587,045 shares in Turners & Growers Limited, at a price of approximately $2.47 each. 

Turners & Growers Limited purchased the remaining 10% shareholding in Status Produce Limited from PTO Properties 

Limited on 23 May 2003 for $844,000. The consideration was settled by Turners & Growers Limited issuing 341,592 

shares in Turners & Growers Limited, at a price of approximately $2.47 each. 

There were no loans to directors by the company or associated parties at balance date. 

Guinness Peat Group plc (GPG plc), the major shareholder in Turners & Growers Limited, indirectly owns approximately 

79% (June 2002: 80%) of the ordinary shares of the Parent. The balance is owned by the public. 

The Parent Company has entered into certain transactions with its subsidiaries, see note 1, Revenue. Details of the 

identity of significant subsidiaries are disclosed in note 15. 


84 



25 BASIS OF EARNINGS PER SHARE 




Dec 03 Dec 02 

$000 $000 

Basic EPS numerator comprises: 

Surplus / (Deficit) attributable to the shareholders of the Parent Company 11,727 (899) 

Basic EPS denominator is: Number of shares 

Issued ordinary shares 31/12/02 (70,016,899 x 3/12) 17,504,225 15,004,181 

Issued ordinary shares 31/3/03 (70,603,944 x 2/12) 11,767,324 7,792,735 

Issued ordinary shares 31/5/03 (70,978,336 x 7/12) 41,404,029 – 

Weighted average number of ordinary shares 70,675,578 22,796,916 

26 SEGMENT INFORMATION 

Segment information is in respect of the Turners & Growers Group of Companies including ENZA (2002: excludes ENZA). 

The Group operates in the fresh horticultural marketing industry. The Parent Company is included in the Domestic Sector 

as its predominant activities lie with that segment. The Group’s business is predominantly conducted in New Zealand. 

Production Domestic International Consolidated 

Sector Sector Sector 

December 2003 12 Months 12 Months 12 Months 12 Months 

$000 $000 $000 $000 

Segment revenues 84,061 143,575 371,577 599,213 

Segment result 4,756 3,445 11,351 19,552 

Segment interest (expense) / revenue (696) 231 (4,780) (5,245) 

Net segment result pre-tax 4,060 3,676 6,571 14,307 

Core segment assets 87,064 95,008 91,005 273,077 

Properties intended for sale – 1,996 – 1,996 

Total assets 87,064 97,004 91,005 275,073 

Production Domestic International Consolidated 

Sector Sector Sector 

December 2002 6 Months 6 Months 6 Months 6 Months 

$000 $000 $000 $000 

Segment revenues 20,695 73,830 11,510 106,035 

Segment result 1,884 (1,132) (581) 171 

Segment interest (expense) / revenue (572) 168 (189) (593) 

Segment result pre-tax 1,312 (964) (770) (422) 

Core segment assets 27,977 90,858 5,058 123,893 

Properties intended for sale – 2,157 – 2,157 

Total assets 27,977 93,015 5,058 126,050 

Inter-segment sales are negligible. Where they occur prices are negotiated on an arms length basis. 

27 COMPARATIVE NUMBERS 

Certain comparative numbers relating to the December 2002 financial year have been adjusted to conform to the 

December 2003 presentation. 

Five Year Financial Review 


Five Year Financial Review 

Dec 03 Dec 02 Jun 02 Jun 01 Jun 00 

12 Months 6 Months 12 Months 12 Months 12 Months 

$000 $000 $000 $000 $000 

REVENUE 

Continuing activities 599,213 106,035 185,325 181,258 167,233 

Discontinued activities* – – 16,898 23,501 23,909 

Total revenue 599,213 106,035 202,223 204,759 191,142 

EARNINGS 

Before net interest, tax, 

depreciation & amortisation 40,266 5,624 20,928 21,135 20,821 

Before net interest & tax 19,552 171 9,727 11,148 11,432 

PROFIT 

Pretax operating surplus / (deficit) 14,307 (422) 9,008 10,283 11,286 

Net surplus / (deficit) 11,727 (899) 5,896 6,814 7,835 

FUNDS EMPLOYED 

Paid in capital 131,368 128,993 24,338 26,683 24,842 

Retained earnings & reserves 49,547 34,505 36,706 35,718 30,659 

Total shareholders’ equity 180,915 163,498 61,044 62,401 55,501 

Minority interests 159 1,115 1,072 1,033 462 

Non-current liabilities 44,426 42,842 18,280 6,673 6,877 

Current liabilities 49,573 65,968 43,996 53,380 47,374 

Total funds employed 275,073 273,423 124,392 123,487 110,214 

ASSETS 

Property, plant & equipment 174,433 170,311 80,753 77,766 69,125 

Other non-current assets 14,888 17,480 7,456 6,336 6,481 

Current assets 85,752 85,632 36,183 39,385 34,608 

Total assets 275,073 273,423 124,392 123,487 110,214 

STATISTICS 

Number of ordinary shares on issue 70,978 70,017 22,506 25,718 24,842 

Earnings per share – cents 17 (4) 23 27 32 

Asset backing per share 

Percentage of shareholders’ 

$2.55 $2.34 $2.71 $2.43 $2.23 

funds to total assets 66% 60% 49% 51% 50% 

Ratio of current assets to current liabilities 1.73 1.30 0.82 0.74 0.73 

Ratio of debt to equity ** 0.52 0.67 1.02 0.96 0.98 

DIVIDENDS (PAID & PROPOSED) 

Cents per share on paid up capital – 8 24 24 24 

Total amount – 3,151 6,327 6,085 5,962 

Dividend cover (times) – – 1 1 1 

*Discontinued activities in Revenue above represents the trading results of Turners Auctions Ltd. and Turners Fleet Ltd. 

**Debt includes trade creditors. 


86 

Auditors’ report 

The Directors, Turners & Growers Limited, PO Box 56, Auckland. 

17 September 2004 

Dear Directors 

As auditors of Turners & Growers Limited (“the Company”) we have prepared this 

report pursuant to the Listing Rules for inclusion in a Listing Profile to be dated 17 

September 2004. Listing Rule 7.1.3 (a) requires a Listing Profile to comply with, and 

contain all information required by the Securities Act 1978 and regulations made under 

that Act, including the First Schedule of the Securities Regulations 1983, with such 

modifications as may be necessary in the circumstances. 

Directors’ responsibilities 

The Company’s Directors are responsible for the preparation and presentation of: 

(a) the financial statements which give a true and fair view of the state of affairs of 

Turners & Growers Limited and its subsidiaries (“the Group”) as at 31 December 

2003 and its financial performance and cash flows for the year ended on that date, 

consistent with clauses 23 to 38 of the First Schedule of the Securities Regulations 

1983, as required by Listing Rule 7.1.3 (a) but with such modifications as may be 

necessary in the circumstances; and 

(b) the prospective financial information of the Group for the 12 months ending 

31 December 2004, including the assumptions on which it is based. 

Auditors’ responsibilities 

We are responsible for expressing an independent opinion on the financial statements 

of the Group for the year ended 31 December 2003 presented by the Directors and 

reporting our opinion consistent with in accordance with clause 42(1) of the First 

Schedule of the Securities Regulations 1983. 

We are also responsible for reporting, consistent with clause 42(2) of the First 

Schedule of the Securities Regulations 1983, in accordance with clauses 42(1)(g) 

and 42(2) of the First Schedule of the Securities Regulations 1983, on the prospective 

financial information of the Group for the 12 months ending 31 December 2004, 

including the assumptions on which they are based, which have been prepared 

and presented by the Directors. 

We have no relationship with or interests in the Company or any of its subsidiaries 

other than in our capacities as providers of assurance (including audit) and taxation 

services. 

Basis of opinion on the financial statements 

An audit of the financial statements includes examining, on a test basis, evidence 

relevant to the amounts and disclosures in the financial statements. It also includes 

assessing: 

(a) the significant estimates and judgements made by the Directors in the preparation 

of the financial statements; and 

(b) whether the accounting policies used and described on pages 63 to 65 are 

appropriate to the circumstances of the Group, consistently applied and adequately 

disclosed. 

We have conducted our audit in accordance with generally accepted auditing standards 

in New Zealand. We planned and performed our audit so as to obtain all the 

information and explanations which we considered necessary in order to provide us 

with sufficient evidence to give reasonable assurance that the financial statements are 

free from material misstatements, whether caused by fraud or error. In forming our 

opinion we also evaluated the overall adequacy of the presentation of the information in 

the financial statements. 


Basis of opinion on the prospective financial information 

To meet our reporting responsibilities we have examined the prospective financial 

information for the 12 months ending 31 December 2004 to confirm that, so far 

as the accounting policies and calculations are concerned, the prospective financial 

information has been properly compiled on the footing of the assumptions made 

or adopted by the Directors as set out on pages 24 to 26 of this Listing Profile 

and are presented on a basis consistent with the accounting policies normally 

adopted by the Group. 

Unqualified opinion on the financial statements 

We have obtained all the information and explanations we have required. 

In our opinion: 

(a) proper accounting records have been kept by the Group as far as appears from our 

examination of those records; 

(b) the financial statements of the Group, on pages 59 to 84 of this Listing Profile, 

consistent with as required by clauses 23 to 38 of the First Schedule of the 

Securities Regulations 1983, and that are required to be audited, have been drawn 

up to: 

(i) comply with the Regulations; 

(ii) subject to those Regulations, comply with generally accepted accounting practice 

in New Zealand; and 

(iii) give a true and fair view of the state of affairs of the Group as at 31 December 

2003 and its financial performance and cash flows for the year ended on that date; 

Unqualified opinion on the prospective financial information 

In our opinion, the prospective financial information for the 12 months ending 

31 December 2004 on pages 21 to 23, so far as the accounting policies and 

calculations are concerned, have been properly compiled on the footing of the 

assumptions made or adopted by the Directors of the Company as set out on pages 

24 to 26 of this Listing Profile and are presented on a basis consistent with the 

accounting policies normally adopted by the Group. 

Actual results are likely to be different from the prospective financial information since 

anticipated events frequently do not occur as expected and the variation could be 

material. Accordingly, we express no opinion as to whether the prospective financial 

information will be achieved. 

Yours faithfully 

Chartered Accountants, Auckland 

Glossary 

Term Description 

AJC Apple Juice Concentrate 

Board The board of directors of Turners & Growers 

Companies Act The Companies Act 1993 

Company, Group or Turners & Growers Turners & Growers Limited including its subsidiaries 

Director A director of Turners & Growers 

EBIT Earnings before interest and taxation 

EBITDA Earnings before interest, taxation, depreciation and amortisation 

ENZA ENZA Limited, a subsidiary of Turners & Growers 

ENZA Finance ENZA Finance Limited, a subsidiary of Turners & Growers 

ENZAFOODS ENZAFOODS New Zealand Limited, a subsidiary of Turners & Growers 

Global Pools Exported pipfruit is categorised by a number of factors including, 

variety, size, colour and market. Sales and costs of sales are applied 

to categories to calculate grower returns. There are approximately 

800 global pools for pipfruit. 

GPG Guinness Peat Group plc 

GVDP Global Variety Development Programme 

IFRS International Financial Reporting Standards 

JAZZ Registered trademark of Turners & Growers 

Noboa Organisation This describes the interests of the Noboa family 

NZFF New Zealand Fruitgrowers Federation 

NZX New Zealand Exchange Limited 

NZSX The main board equity security market operated by NZX 

Parent Company Turners & Growers Limited 

Profile or Listing Profile This listing profile dated 17 September 2004 prepared 

pursuant to the NZSX listing rules 

Status Produce Status Produce Limited, a subsidiary of Turners & Growers 

subsidiary Has the meaning given that term by the Companies Act 

tce tray carton equivalent 


88 

Directory 

Directors 

A.I. Gibbs 

M.R. Dossor 

J.A. Hambling 

R.A. Burney 

B.M. D’Ath 

W.J.E. Lynch 

L.A. Noboa III 

M.G. Tregidga 

The Directors of Turners & Growers can be contacted: 

c/- Turners & Growers Limited 

PO Box 56 

AUCKLAND 

Registered Office 


Head Office Building 

Mt Wellington Markets Complex 

2 Monahan Road 

Mt Wellington 


Share Registrar 

Computershare Investor Services Limited 

Level 2, 

159 Hurstmere Road 

Private Bag 92119 

Takapuna 


Postal Address 

PO Box 56 


Telephone: (09) 915 8000 

Facsimile: (09) 914 5701 

E-mail: info@turnersandgrowers.com 

Website: www.turnersandgrowers.com 


Auditors 

PricewaterhouseCoopers 

PricewaterhouseCoopers Tower 

188 Quay Street 


Organising Participant 

Goldman Sachs JBWere (NZ) Limited 

Level 38 

Vero Centre 

48 Shortland Street 


Free Phone 0800 555 555 

Solicitors 

Minter Ellison Rudd Watts 

BNZ Tower 

125 Queen Street 

Auckland

NZSX Listing Profile - Turners and Growers

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