NZSX Listing Profile - Turners and Growers

26
Principal Assumptions Underlying The Prospective Financial Information
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.
Turners & Growers Group Listing Document
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