AWB Limited - 2003 Annual Report

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Andrew Lindberg, Managing Director and Brendan Stewart, Chairman 6 XXXXX XXXXXX, Pasta Technichan XXXXX XXXXXX, Pasta Technichan XXXXX XXXXXX, Pasta Technichan
chairman’s and managing director’s report For AWB, 2003 was an eventful year, marked by unique operational challenges and a strategically important acquisition. The challenges we confronted included drought, war, and extraordinary wheat market volatility. However, we were well positioned to meet the challenges and have weathered one of the toughest seasons by capitalising on our strengths, with innovative and flexible management and retaining a commitment to our company strategy. We have laid down a tangible platform for growth with the acquisition of Landmark from Wesfarmers. It is a transaction that precisely meets our strategy to diversify revenue streams and strengthen our core wheat business. Drought impacts our Financial Result AWB’s profit this year reflects the impact of what was in some parts of Australia, the worst drought in more than 100 years. It was a drought that reduced Australian wheat production from a record 24.9 million tonnes to 9.7 million tonnes, and reduced Pool deliveries from 19.6 million tonnes to about 4.7 million tonnes. The severity of the drought impacted AWB, as well as Australia’s wheat growers. In response, AWB adopted a proactive management approach for the AWB National Pool, and implemented a significant cost minimisation program to reduce the operational cost base for the company. In this environment AWB announced a full year financial result of $43.9 million – a result we believe is a creditable one in the circumstances. Consistent with its commitment to a stable dividend policy, AWB declared a total dividend of 25 cents per share for 2002/03. A Landmark Acquisition 29 August 2003 was an exciting day for the company. It was the day we positioned AWB as Australia’s leading agribusiness with the acquisition of Landmark. The acquisition strengthens AWB’s core wheat business and achieves substantial diversification in rural and financial services. AWB now provides a unique, one stop shop for the Australian farmer, with a suite of products and services that extend across their inputs and outputs, from inside the farm gate into the hands of our international customers. AWB has a comprehensive integration plan in place to achieve revenue and cost synergies, and as part of the plan has commenced consolidating the head office functions. The Landmark head office in Sydney will close on 31 March 2004. Highest ever Gross Pool Value We have not lost sight of our core business. In fact, during the year we delivered the highest ever Gross Pool Value - $5.3 billion - with the finalisation of the 2001/02 AWB National Pool. It was a result that required innovative pool management in the face of some difficult market circumstances, and involved two “Pool extensions” which protected an estimated $300 million in value for its participants. Success in Iraq The biggest marketing challenge during 2002/03 was Iraq. When hostilities erupted in the region in March, we were confronted with uncertainty – both about the future of our existing 1.2 million tonne contracts with Iraq, and the long term future of what is one of Australia’s most important wheat markets. 7
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: There are six key business streams
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 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
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4. TAXATION Consolidated AWB Limite
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8. OTHER ASSETS Consolidated AWB Li
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11. OTHER FINANCIAL ASSETS Consolid
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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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