AWB Limited - 2003 Annual Report

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During 2003, AWB "ring fenced" its wheat operations from the other commercial activities of the Group. AWB now retains the highest short term credit rating possible given our business mix and overall capitalisation. In 2003, it provided services to international customers of AWB National Pool, the Trading division’s domestic and international customers, and AWB Geneva’s international customer base, by embedding price risk components into the physical grain contracts. AWB RiskAssist expects to expand this aspect of its business in the year ahead. Group Funding Activities The size and duration of AWB Group’s borrowing program is largely determined by the crop size, timing of both grain delivery and sales, and the financing options chosen by growers. Group funding for the year was sourced from global and domestic markets, specifically a $US1.5 billion US commercial paper program, a $US1.5 billion global Euro commercial paper program and a $A2.0 billion domestic commercial paper program. Liquidity support for AWB is provided through committed commercial paper standby facilities with a panel of banks, in accordance with AWB’s relationship banking strategy. AWB also uses various financial hedging instruments to protect its funding costs against the effects of interest rate fluctuations. These include interest rate swaps, forward rate agreements, exchange traded futures contracts and options on futures contracts. Credit Rating On 1 October 2003, AWB “ring fenced” its wheat export related operations from the other commercial activities of the Group. In doing so, AWB improved and protected the credit rating for AWB Harvest Finance Limited in providing finance to growers who deliver to the AWB National Pool. Growers who deliver to the AWB National Pool, and use AWB National Pool Payment Options, benefit through the competitive finance products that are afforded with the improved credit rating. To achieve this outcome, AWB created three new wholly owned subsidiary companies: AWB Harvest Finance Limited – provides growers delivering to the AWB National Pool with a suite of financing alternatives (replacing AWB Finance Limited); AWB Services Limited – provides, on a fee for service basis, the management and business infrastructure required to support AWB Group operations, including asset management (building, IT software and hardware etc) and staff; and AWB Commercial Funding Limited – provides treasury and funding operations for the commercial subsidiaries of AWB. XXXXX XXXXXX, Pasta Technichan 16 XXXXX XXXXXX, Pasta Technichan XXXXX XXXXXX, Pasta Technichan XXXXX XXXXXX, Pasta Technichan
Through “ring fencing”, AWB was able to achieve the highest possible short term rating available for AWB Harvest Finance Limited. The credit ratings achieved were: AWB Harvest Finance Limited: Standard & Poor’s: A1+ (short term) AA- (long term) stable outlook Moody’s: P-1 Outlook With a considerably larger harvest for 2003/04, AWB is anticipating strong uptake of its National Pool Payment Options, and retention of its leading position within the market. The larger crop should also provide an improved environment for the uptake of the expanded range of risk management products and services provided by AWB. AWB Commercial Funding Limited: Standard & Poor’s: BBB stable outlook (supported by an AWB Limited guarantee). AWB Harvest Finance Limited replaced AWB Finance Limited as at 1 October 2003, in providing harvest finance products to growers who deliver to the AWB National Pool. Domestic and offshore commercial paper programs have been created for AWB Harvest Finance Limited to finance the 2003/04 operations. In addition, a committed $950 million syndicated multi option facility from five relationship banks has been created to fund AWB Commercial Funding Limited. This facility provides both cash advances and bank guarantees for the commercial activities of the Group and was utilised to finance the acquisition of Landmark. INNOVATION FOCUS TO DELIVER NEW OPPORTUNITIES 17
Page 1 and 2: Annual Report 2003 imagine the futu
Page 3 and 4: During the past year, Australia has
Page 5 and 6: FINANCIAL PERFORMANCE SUMMARY Droug
Page 7 and 8: There are six key business streams
Page 9 and 10: chairman’s and managing director
Page 11 and 12: As a gesture of AWB's appreciation
Page 13 and 14: pool management services AWB Nation
Page 15 and 16: For the 2001/02 Pool, AWB managed a
Page 17: finance and risk management Harvest
Page 21 and 22: grain acquisition and trading Grain
Page 23 and 24: supply chain and other investments
Page 25 and 26: Children of AWB employees enjoying
Page 27 and 28: grain technology AWB Grain Technolo
Page 29 and 30: landmark Overview Landmark is Austr
Page 31 and 32: our people and systems People AWB e
Page 33 and 34: AWB has committed itself to a thoro
Page 35 and 36: Charles Stott Group General Manager
Page 37 and 38: the chairman, Mr Robert Barry and M
Page 39 and 40: Identification and Management of Si
Page 41 and 42: Birchip in Victoria and a former Vi
Page 43 and 44: Brendan Stewart Chairman, Non-execu
Page 45 and 46: international presence 43
Page 47 and 48: INNOVATION FOCUS TO DELIVER NEW OPP
Page 49 and 50: LIKELY DEVELOPMENTS AND EXPECTED RE
Page 51 and 52: DIRECTORS' MEETINGS (continued) Dir
Page 53 and 54: STATEMENT OF FINANCIAL POSITION AS
Page 55 and 56: NOTES TO AND FORMING PART OF THE FI
Page 57 and 58: (h) Derivatives (continued) transac
Page 59 and 60: 2. REVENUE FROM ORDINARY ACTIVITIES
Page 61 and 62: 4. TAXATION Consolidated AWB Limite
Page 63 and 64: 8. OTHER ASSETS Consolidated AWB Li
Page 65 and 66: 11. OTHER FINANCIAL ASSETS Consolid
Page 67 and 68: 13. PROPERTY, PLANT AND EQUIPMENT (
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16. PROVISIONS Consolidated AWB Lim
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20. OUTSIDE EQUITY INTERESTS Consol
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24. REMUNERATION OF DIRECTORS Conso
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27. RELATED PARTY DISCLOSURES (cont
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28. SEGMENT INFORMATION (continued)
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31. EMPLOYEE BENEFITS AND SUPERANNU
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32. FINANCIAL INSTRUMENTS (continue
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32. FINANCIAL INSTRUMENTS (continue
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33. DEED OF CROSS GUARANTEE Pursuan
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34. CONTROLLED ENTITIES (continued)
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35. EARNINGS PER SHARE Consolidated
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INDEPENDENT AUDIT REPORT TO MEMBERS
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FINANCIAL CALENDAR - 2004 Annual Ge
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AWB GROUP LOCATIONS ROYCE DESIGN AW
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AWB Limited - 2003 Annual Report

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