AWB Limited - 2003 Annual Report

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DIRECTORS' REPORT Your directors submit their report for the year ended 30 September 2003. DIRECTORS The directors of the company in office at the date of this report are: Brendan Stewart (Chairman) Robert Barry (Deputy Chairman) Andrew Lindberg (Managing Director) Brendan Fitzgerald (elected at 2003 Annual General Meeting) Laurie Marshall Xavier Martin (elected at 2003 Annual General Meeting) Warrick McClelland Christopher Moffet Peter Polson (appointed 31 March 2003) Kerry Sanderson John Simpson John Thame. Except where noted, the directors held their position as director for the financial year and up to the date of this report. A summary of the experience, qualifications and special responsibilities of each director is provided on page 38 and 39. PRINCIPAL ACTIVITIES The AWB Group is Australia's leading rural services provider and one of the world's largest wheat managers and marketers. Refer to Note 34(a) to the Financial Statements for details of entities within the Group. AWB Group's operations can be categorised into six key business areas: Pool Management Services – managing the aggregation and global marketing of Australian wheat to maximise net pool returns; and providing commodity price and currency risk management; Rural Services (Landmark) – Landmark is Australia's largest supplier of agribusiness products and services. It provides clients with rural merchandise, fertiliser, livestock, wool marketing, agronomy, insurance, real estate and rural financial services; Finance and Risk Management Products – the provision of finance and risk management products to grain growers; Grain Acquisition and Trading – the trading, as principal, of grains and the provision of marketing products to Australian grain growers; Grain Technology – the development and Australian application of leading edge grain related technologies; and Supply Chain and Other Investments – the development of, and direct investment in, supply chain infrastructure and end user grain businesses, along with the management and trading of shipping capacity. RESULTS AND REVIEW OF OPERATIONS 2003 2002 $'000 $'000 Consolidated entity profit after tax and outside equity interests for the financial year 43,891 107,192 A review of the operations and results of the consolidated entity and its principal businesses during the financial year is contained in pages 12 to 31 of this annual report. DIVIDENDS Subsequent to year end, a fully franked final dividend of 11 cents per share was approved by the board on 26 November 2003 and is payable on 19 December 2003. All dividends paid or provided for will be fully franked at the company tax rate of 30%. The 2002 final dividend of $30.1 million and the 2003 interim dividend of $38.4 million were paid to shareholders during the period. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS Significant changes in the state of affairs of the consolidated entity during the financial year were as follows: on 29 August 2003, the AWB Group acquired its rural services business (Landmark) for cash consideration of approximately $718 million. Completion accounts, to be finalised, will determine the final price; and AWB Limited completed a new issue of B class shares during the financial year to fund part of the purchase price of its rural services business (Landmark). A total of 41,100,000 shares were issued through the institutional placement at $3.70 per share raising approximately $152 million. SIGNIFICANT EVENTS AFTER BALANCE DATE The following significant events have arisen since the end of the financial year: AWB Limited completed a new issue of B class shares on 20 October 2003 in connection with the purchase of its rural services business (Landmark). A total of 11,840,908 shares was issued through the share purchase plan at $3.70 per share raising approximately $43.8 million; and a dividend of 11 cents per share resulting in a dividend payable of $35.97 million was declared on 26 November 2003. REGISTERED OFFICE 380 La Trobe Street, Melbourne, Victoria, 3000 Financial Statements cover: Philip Mills, Grower 46
LIKELY DEVELOPMENTS AND EXPECTED RESULTS The consolidated entity will continue to pursue its policy of increasing the profitability and market share of its major business areas during the next financial year. Further information about likely developments in the operations of the consolidated entity and the expected results of those operations in future financial years has not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the consolidated entity. ENVIRONMENTAL REGULATION AND PERFORMANCE The consolidated entity's operations are subject to various Commonwealth, State and Territory environmental legislation and regulation. There is no environmental regulation specific to the consolidated entity. The board is not aware of any significant environmental breaches during the financial year. INDEMNIFICATION AND INSURANCE The constitution of AWB Limited provides an indemnity for all current and previous company directors, secretaries and executive officers. The company indemnifies these people to the maximum extent permitted by law for any liabilities or expenses incurred in defending any proceedings where judgement is given in the person's favour. The indemnity does not however, cover conduct involving a lack of good faith. A Deed of Access, Indemnity and Insurance was entered into between the company and each director during the period which provides that the company will maintain a directors' and officers' insurance policy. The Deed also provides an indemnity to the maximum extent permissible by law to the director for any liabilities incurred as a director, other than liabilities to the company or a related body corporate, or liabilities arising out of conduct involving lack of good faith. A directors' and officers' insurance policy is maintained; however, the terms of the contract prohibit disclosure of the amount of the premium. During or since the end of the financial year, no director, officer or auditor had recourse to the indemnity or insurance. DIRECTORS' AND OTHER OFFICERS' EMOLUMENTS Remuneration policy The Remuneration Committee of the board of directors is responsible for reviewing and recommending remuneration and performance of the Managing Director, the Performance Appraisal Policy and any Employee Share Plans and superannuation policies. The remuneration and performance of the executive team is assessed by the Managing Director on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum shareholder benefit from the retention of a high quality executive team. Details of the nature and amount of each element of the emolument of each director and each of the five executive officers of AWB Limited and the consolidated entity receiving the highest emolument for the financial year are as follows: Emoluments of directors of AWB Limited Base fee $ Superannuation $ 2002 bonus paid in current year $ Brendan Stewart 147,425 14,688 – 5,850 167,963 Robert Barry 55,500 5,400 – – 60,900 Andrew Lindberg 630,265 33,087 150,000 3,470 816,822 Ian Cush 1 28,500 2,700 – – 31,200 Brendan Fitzgerald 2 32,857 2,957 – – 35,814 Laurie Marshall 55,500 5,400 – – 60,900 Xavier Martin 2 32,857 2,957 – – 35,814 Warrick McClelland 21,660 39,240 – – 60,900 Christopher Moffet 55,500 5,400 – – 60,900 Peter Polson 3 30,238 2,721 – – 32,959 Kerry Sanderson 55,500 5,400 – – 60,900 Brenda Shanahan 4 28,500 2,700 – – 31,200 Michael Shanahan 1 28,500 2,700 – – 31,200 John Simpson 55,500 5,400 – – 60,900 John Thame 55,500 5,400 – – 60,900 Total 1,313,802 136,150 150,000 9,320 1,609,272 Other $ Total $ 1 Not re–elected at the 2003 Annual General Meeting 2 Elected at the 2003 Annual General Meeting 3 Appointed 31 March 2003 4 Resigned 31 March 2003 47
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 and 18: finance and risk management Harvest
Page 19 and 20: Through “ring fencing”, AWB was
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: INNOVATION FOCUS TO DELIVER NEW OPP
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 (
Page 69 and 70: 16. PROVISIONS Consolidated AWB Lim
Page 71 and 72: 20. OUTSIDE EQUITY INTERESTS Consol
Page 73 and 74: 24. REMUNERATION OF DIRECTORS Conso
Page 75 and 76: 27. RELATED PARTY DISCLOSURES (cont
Page 77 and 78: 28. SEGMENT INFORMATION (continued)
Page 79 and 80: 31. EMPLOYEE BENEFITS AND SUPERANNU
Page 81 and 82: 32. FINANCIAL INSTRUMENTS (continue
Page 83 and 84: 32. FINANCIAL INSTRUMENTS (continue
Page 85 and 86: 33. DEED OF CROSS GUARANTEE Pursuan
Page 87 and 88: 34. CONTROLLED ENTITIES (continued)
Page 89 and 90: 35. EARNINGS PER SHARE Consolidated
Page 91 and 92: INDEPENDENT AUDIT REPORT TO MEMBERS
Page 93 and 94: FINANCIAL CALENDAR - 2004 Annual Ge
Page 95 and 96: AWB GROUP LOCATIONS ROYCE DESIGN AW

AWB Limited - 2003 Annual Report

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