AWB Limited - 2004 Annual Report

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DIRECTORS' REPORT (continued) DIRECTORS' AND OTHER OFFICERS' EMOLUMENTS (continued) Emoluments of executives of AWB Limited Short-term Amortised value Retention, termination Base fee Superannuation incentive of performance and retirement (2002/03 year) (a) rights issued (b) Other (c) benefits (d) $ $ $ $ $ $ Richard Fuller 259,895 11,148 – 11,446 23,153 – Peter Geary 418,828 35,138 – 20,603 30,273 – Jill Gillingham 413,751 67,000 – 20,603 4,566 – Paul Ingleby 616,520 11,148 – 34,325 26,984 – Marcus Kennedy 412,520 11,148 – 11,910 68,816 – John Maher 334,551 20,436 – – 18,913 125,000 Sarah Scales 435,415 11,437 – 17,503 7,168 – Charles Stott 414,836 11,148 – 16,489 4,566 – Michael Thomas 338,219 35,000 – 4,254 – – Mark Allison 84,023 12,582 – – 26,946 875,326 Total 3,728,558 226,185 – 137,133 211,385 1,000,326 Notes: The terms 'director' and 'officer' have been treated as mutually exclusive for the purposes of this disclosure. (a) The short-term incentive (STI) component of remuneration in 2004 relates to performance incentives that would have been paid in the current financial year. Cash and long-term incentive payments are granted annually, after the end of the year. The grant date is tied to the performance appraisal, which, for the prior year, was completed after 30 September 2003. The specific service and performance criteria are set out earlier in this report. During this reporting period, no incentives were paid to executives. The STI program was suspended in relation to the 2003 financial year in recognition of the very tough operating conditions encountered during that period. An accrual has been made in the financial statements, based on an estimate of the incentives to be paid in respect of the year ended 30 September 2004. The actual incentives to be paid have not been determined at the date of this report, but are estimated to be in the order of $1.8 million. These incentives will be disclosed as remuneration in the 2005 financial report. (b) The fair value of the performance rights is calculated at the date of grant using a Black–Scholes model and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed above is the portion of the fair value of all the performance rights that have been granted. The following factors and assumptions were used in determining the fair value of performance rights on grant date: Fair value per Exercise Price of shares Estimated Risk free Dividend Grant date Expiry date performance right price (i) on grant date volatility interest rate yield 1 October 2001 1 October 2005 $2.61 $1.00 $3.39 14% 5.5% 6.5% 1 October 2002 1 October 2006 $2.59 $1.00 $3.47 14% 5.3% 7.2% 1 October 2003 1 October 2007 $3.01 $1.00 $3.90 13% 5.3% 6.4% (i) The total consideration payable on the exercise of any performance rights on a particular day will be one dollar in total (irrespective of the number of rights exercised on that day). Estimated volatility approximates historic volatility. The estimated life of all performance rights granted is four years. The value of performance rights at grant date are therefore amortised over four years. Based on the formula inputs, the percentages used to determine the number of rights from 2001, 2002 and 2003 to vest were 64%, 54% and 0% respectively. Each performance right entitles the holder to purchase one ordinary B class share in the company. Performance rights do not vest until three years after grant date and thereafter exercise is conditional on the consolidated entity achieving certain performance hurdles. The performance rights are issued at no cost and become exercisable depending on the performance of the company (based on total shareholder return) relative to the performance of the S&P/ASX200. The expiry date disclosed is one year after vesting date, given that while the performance rights expire 10 years after the grant date, the expected expiry of the performance rights is at this time. Directors are not entitled to participate in performance rights plans. Further details of performance rights granted are set out under “Performance rights granted to senior executives” below. (c) “Other” emoluments in the case of executives, includes motor vehicles, housing benefits and other allowances subject to fringe benefits tax. (d) A termination payment was made to the former Managing Director of Landmark, Mark Allison (resigned 27 November 2003). A retention payment was made to Mr Maher following the acquisition of Landmark. 56
DIRECTORS' AND OTHER OFFICERS' EMOLUMENTS (continued) Performance rights granted to senior executives During or since the end of the financial year, AWB Limited granted performance rights for no consideration over unissued ordinary B class shares in AWB Limited to the following executive officers of the company as part of their remuneration: Executive officer Number of rights granted Exercise price (i) Expiry Date Richard Fuller Peter Geary Jill Gillingham Paul Ingleby Marcus Kennedy John Maher Sarah Scales Charles Stott Michael Thomas 21,319 34,886 34,886 63,053 43,930 25,195 32,948 31,010 27,133 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 1 October 2007 1 October 2007 1 October 2007 1 October 2007 1 October 2007 1 October 2007 1 October 2007 1 October 2007 1 October 2007 (i) The total consideration payable on the exercise of any performance rights on a particular day will be one dollar in total (irrespective of the number of rights exercised on that day). Unissued shares under option At the date of this report, unissued ordinary shares of the company under option are: Expiry Date Number of rights granted Exercise price (i) 1 October 2005 169,659 $1.00 1 October 2006 359,864 $1.00 1 October 2007 434,965 $1.00 The performance rights are issued at no cost and become exercisable depending on the performance of the company (based on total shareholder return) relative to the performance of the S&P/ASX200. These options do not entitle the holder to participate in any share issue of the company or any other body corporate. Unissued shares under option by executive The unissued ordinary shares of the company under option, by executive, are: Held at Held at Right holdings 1 October 2003 30 September 2004 Executive officer Richard Fuller Peter Geary Jill Gillingham Paul Ingleby Marcus Kennedy John Maher Sarah Scales Charles Stott Michael Thomas 33,747 60,486 60,486 101,124 38,043 – 51,649 48,717 13,587 55,066 95,372 95,372 164,177 81,973 25,195 84,597 79,727 40,720 Shares issued on exercise of performance rights No performance rights have been exercised during or since the end of the financial year. 57
Page 1 and 2:
Annual Report 2004
Page 3 and 4:
Who We Are AWB Limited (AWB) is Aus
Page 5 and 6:
Finance AWB harvest finance book pe
Page 7 and 8: Five Year Summary 2004 2003 2002 20
Page 9 and 10: Chairman’s and Managing Director
Page 11 and 12: To continue building its capability
Page 13 and 14: Pool Management Services Highlights
Page 15 and 16: AWB National Pool participants. AWB
Page 17 and 18: Landmark Highlights Integrated Land
Page 19 and 20: the integration, Landmark has reloc
Page 21 and 22: Finance and Risk Management Highlig
Page 23 and 24: Finance Limited, a wholly owned, ba
Page 25 and 26: Grain Acquisition and Trading Highl
Page 27 and 28: through the AWB Geneva office, both
Page 29 and 30: Supply Chain & Other Investments Hi
Page 31 and 32: The Five Star Feed Mill, located on
Page 33 and 34: Our People AWB employs over 2,700 p
Page 35 and 36: More than 70% of AWB’s employees
Page 37 and 38: Our Social Commitment Together with
Page 39 and 40: Social service providers While not
Page 41 and 42: 7. Richard Fuller General Manager,
Page 43 and 44: Independence All of the current 11
Page 45 and 46: Services Agreement Committee The Se
Page 47 and 48: its observance provides the foundat
Page 49 and 50: Promotion Committee and Founding Ch
Page 51 and 52: 1. Brendan Stewart Chairman, Non-ex
Page 54 and 55: DIRECTORS' REPORT Your directors su
Page 56 and 57: DIRECTORS' REPORT (continued) REMUN
Page 60 and 61: DIRECTORS' REPORT (continued) DIREC
Page 62 and 63: STATEMENT OF FINANCIAL PERFORMANCE
Page 64 and 65: STATEMENT OF CASH FLOWS FOR THE YEA
Page 66 and 67: NOTES TO AND FORMING PART OF THE FI
Page 106 and 107: INDEPENDENT AUDIT REPORT TO THE MEM
Page 108 and 109:
SHAREHOLDER COMMUNICATION FINANCIAL
Page 110 and 111:
GLOSSARY AWB Basis Pool AWB Basis P
Page 112:
Head Office 380 La Trobe Street Mel
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AWB Limited - 2004 Annual Report

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