18 million tonnes storage capacity 7,000 terminals 18 ... · such as fertiliser, seeds, ... marang...
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GoondiwindiGoondiwindi
BoggabillaBoggabilla
CroobleCroobleMilguyMilguy
GravesendGravesend WarialdaWarialda
DelungraDelungra
MoreeMoree
BellataBellata
EdgeroiEdgeroi
NarrabriNarrabri
Baan BaaBaan Baa
BoggabriBoggabri
Emerald HillEmerald Hill
BugaldieBugaldie
BaradineBaradineCoonambleCoonamble
TrajereTrajere
kk
ManildraManildraMolongMolong
LithgowLithgow
Red BendRed Bend
WoodstockWoodstockraranana
KoorawathaKoorawatha
HardenHarden
Marrar
Marrar
MilbMilbrtrt
JuneeJuneeJ
ggagga
epherdsepherds
Yerong CreekYerong Creek
CulcairnCulcairn
CunningarCunningar
BoorowaBoorowa
MaimuruMaimuru
BribbareeBribbareeWeedallionWeedallion
MilvaleMilvale
TemoraTemoraT
IllaboIllabo
MungeribarMungeribarTottenhamTottenham
KiacatKiacat
TrangieTrangie
WarrenWarrenNynganNyngan
NevertireNevertire
CombaraCombara
GularGular
ArmatreeArmatree
CurbanCurban
GilgandraGilgandraBalladoranBalladoran
EumungerieEumungerieMogriguyMogriguy
GwabegarGwabegar
GunnedahGunnedah
CurlewisCurlewis
ris Creekris Creek
GulgongGulgong
BirriwaBirriwa
MendooranMendooran
Elong ElongElong Elong
MuronbungMuronbungg
gg
MerriwaMerriwa
MaitlandMaitland
NewcastleNewcastle
SydneySydney
Port KemblaPort Kembla
TamworthTamworth
WestdaleWestdale
ManillaManilla
BarrabaBarraba
CulgooraCulgoora
Wee WaaWee WaaMerah NorthMerah North
Burren JunctionBurren Junction
CryonCryon
MerrywineboneMerrywinebone
WalgettWalgett
GarahGarah
WeemelahWeemelahNorth StarNorth Star
TallimbTallimb
BurBur
18 million tonnes storage capacity 7,000
kilometres of rail network support 4 seaboard
terminals 18 Service Centres
13 processing facilities and 778 permanent
staff delivering growing solutions
GrainCorp Limited 2002 Annual Report
Contents
2002 Financial Highlights 1
2002 Business Highlights 1
GrainCorp Products and Services 2
Our Storage Network 3
Chairman’s & Managing Director’s Report 7
Investor Information 11
Financial Performance 12
Key Business Areas 14
Review of Operations 16
Supporting Our Communities 22
Executive Management 23
Board of Directors 24
Corporate Governance Statement 26
2002 Concise Report 31
Annual General Meeting
GrainCorp’s 2003 Annual General Meeting will
be held at Albury, New South Wales on Friday,
28 February, 11am.
GrainCorp Limited ABN 60 057 186 035
Bellata has over 100,000 tonnes of permanent storage and over 50,000 tonnes of bunker storage.
• Total revenue $700 million
• EBITDA $119.8 million
• Depreciation and amortisation $41.1 million
• Net profit before tax $67.8 million
• Net profit after tax $48.6 million
• Earnings per share 121.2 cents
• Dividend per share 78.0 cents
• Dividend yield (30/09/02) 8.0%
2002 Financial Highlights• 12 million tonnes of grain received with increased speed
and efficiency
• 6.8 million tonnes of exports
• Purchased the milling assets of Goodman Fielder in
partnership with Cargill Australia
• Created Bulk Terminals Australia (BTA) in partnership with
Grainco Australia
• Moved into rail operation through the lease of two engines
and 40 wagons
• Expanded grain handling operations into South Australia
with the opening of a grain receival facility at Naracoorte
• Extracted $4 million cost saving from Vicgrain merger
synergies
• 1% of profit after tax dedicated to GrainCorp Foundation
2002 Business Highlights
GrainCorp Annual Report 2002 1
GrainCorp Annual Report 2002 2
GrainCorp Products and Services
Storage & Handling
GrainCorp’s core business. Over 300 storage facilities throughout prime
grain growing regions. Four port terminals located in NSW and VIC and
Bulk Terminals Australia allows access to a 5th in QLD.
Merchandising
GrainCorp’s 18 strategically located Service Centres offer farm input needs
such as fertiliser, seeds, agricultural chemicals and seasonal finance.
Trading
Domestic - Grain merchants provide risk management solutions,
marketing and contracting alternatives.
Export - GrainCorp is now a direct exporter of barley and canola.
Research & Development
GrainCorp with SunPrime breeds some of the highest yielding wheat
varieties in production. 80% of SunPrime’s pre-tax profits are
reinvested in Research and Development.
Transport
Rail - GrainCorp’s move into rail is designed to offer seamless
operation and negotiate the supply chain from silo to port.
Road - Extensive road operations through eastern Australia.
Processing
GrainCorp entered the flour milling business through the
purchase of a 60% equity share of Allied Mills.
Technical Services
GrainCorp provides a crop monitoring and analysis service.
The GrainCorp Foundation - GrainCorp contributes 1%
of its annual after tax profits to rural and regional
communities via the GrainCorp Foundation.
Community Development
QLD
NSW
VIC
Goondiwindi
Boggabilla
CroobleMilguy
Biniguy
Gravesend Warialda
Delungra
Moree
Gurley
Bellata
Edgeroi
Narrabri
Baan Baa
Boggabri
Emerald Hill
Ulamambri
Coonabarabran
Bugaldie
Baradineonamble
Dubbo
Narwonah
Wyanga
Tomingley WestPeak HillMickibri
Cumnock
ManildraMolong
Parkes
rromine
mbara
Gular
Armatree
Curban
GilgandraBalladoran
EumungerieMogriguy
Gwabegar
Gunnedah
CurlewisNea
Werris Creek
QuirindiCaroona
Spring Ridge
Tamarang
PremerConnemarra
Weetal
iba
Neilrex
Binnaway
Gulgong
Birriwa
Mendooran
Elong Elong
Muronbungg
Ballimore
GeurieCombo
Wellington
Willow Tree
Merriwa
Maitland
NewcastleKooragang IslandCarrington
PinkenbaFisherman Islands
Warral Tamworth
Duri
Westdale
Manilla
Culgoora
Wee WaaMerah North
Burren Junction
Cryon
Merrywinebone
Walgett
Garah
WeemelahNorth Star
Brisbane
Croppa Creek
QLD
NSWNorthernDivision
Boggabri
Emerald Hill
Ulamambri
Coonabarabran
Bugaldie
BaradineCoonamble
Dubbo
Narwonah
Wyanga
Tomingley WestPeak HillMickibri Yeoval
Canowindra
Trajere
Cumnock
ManildraMolong
Lithgow
Alectown WestGoonumbla
Parkes
Red Bend
WoodstockCowra
Grenfell
Noonbina
Koorawatha
e
Maimuru
Back Creek
Burchrcher
Lake CowallGirral
rrinyaWirrinya
Caragabal
BrBarmedman
WestWyalong
MungeribarTottenhamAlbert
Yethra
Tullamore
Euabalong West
Lake Cargelligo
GobonderyKadungleThe TroffsTrundle
Gunnin
gblan
dOotha
Condobolin
KikoiraYoungareen
Griffith
WejaTullib
igeal
geal
Burgoo
noney
Naradhan
Kiacatoo
Bogan
Gate
Narromine
Trangie
WarrenNyngan
Nevertire
Cobar
Combara
Gular
Armatree
Curban
GilgandraBalladoran
EumungerieMogriguy
Gunnedah
CurlewisNea
Werris CreekCaroona
Spring Ridge
Tamarang
PremerConnemarra
Weetal
iba
Neilrex
Binnaway
Gulgong
Birriwa
Mendooran
Elong Elong
Ballimore
WongarbonGeurie
ComboWellington
Willow Tree
Merriwa
Newca
Sydney
Warral Tamworth
Duri
Westda
Manilla
Buddigower
Tallimba
Buralyang
Weetha
lle
Erigo
liaRankinsSprings
YendaTharbogangTabbita
Goolgowi
Merriwagga
Hillston
NSW
Western Division
QLD
NSW
VICMelbourne
Geelong
Portland
GanGron
g Gron
g
Narran
dera
Lockhart
Boree Creek
UranaPleasant Hills
RandHenty West
ocklesbyBro
Arajoel
Morundah
BerriganTocumwal
Echuca
Deniliquin
MathouraWombootaBarnes Crossing
Wakool
Caldwell
Bunnaloo
Picola
Moulamein
Balranald
Rochester
Raywood Elmore
Boort
Quambatook
Chinkapook
Manangatang
Annuello
Robinvale
LalbertMeatian
Ultima
Waitchie
Gredgwin
Borung
NaracoorteNoradjuha
Glenorchy
NatimukGoroke
Carpolac
NhillKa
niva
Servi
ceton
Miram
Lillim
ur
Gerang
Gerung
MarnooLubeck
Dooen
BurrumMurtoa
Horsham
Charlton
Wycheproof
Berriwillock
Sea Lake
Mittyack
Culgoa
Minyip
Sheep HillsWarracknabeal
LahBrim
Beulah
Patchewollock
Hopetoun
Dimboola
Antwerp
Jeparit
Rainbow
Yaapeet
Pimpinio
St Arnaud
Cope CopeDonald
LitchfieldMassey
Watchem
BirchipKinnabulla
WoomelangLascelles
Speed
Tempy
Ouyen
Carwarp
Werrim
ull
Mering
ur
Merrine
e
Torrit
aUnd
erboo
l
Murray
ville
Panit
ya
YanacNetherby
Yelta
SwanwaterSutherland
Sunshine
Dunolly
BallaratWillaura
Hamilton
Mitiamo
Kerang
Swan Hill
Nyah West
Piangil
Kooloonong
Tandara
Goornong
Marong
Moolort
Berrybank
Westmere
Bridgewater
MurchisonEast
Colbinabbin
Downs
Yanco
Murrami
Coleambally
Yarrawonga
Dookie
St James
OaklandsWangamong
Sanger
Warragoon
Willbriggie
Griffith
Moombo
oldoo
l
Barella
n
Garoolg
an
Skipton
VICSouthern Division
CanowindraCaNyrang CreekTrajere
Cumnock
ManildraMolong
Lithgow
Alectown West
Parkes
Red Bend
WoodstockCowra
Grenfell
Noonbina
Koorawatha
eenethorpe
Harden
Marrar
Brushw
ood
Ganmain
Matong
Grong G
rong
Narran
dera
Coolam
on
Milbrul
ong
Lockhart
Boree Creek
Hills
Junee
Wagga
ShepherdsArajoel
Morundah
gBerriganrrigaBerrigaTTocumwal
Denilniliquin
Mathoura
Picola
Downside
The Rock
HentyYerong Creek
Culcairn
Uranquinty
CunningarWallendbeen
Boorowa
Maimuru
Lake CowalGirral
Wirrinyaya
Weedallion
Milvale
Temora
Cootamundra
Illabo
Barmedm
WestWyalong
Stockinbingal
Yanco
Murrami
Coleambally
Yarrawonga
amWangam
WarragoonW
Willbriggie
Euabalong West
Lake Cargelligo
Gunnin
gblan
driwon
g
Condobolin
Puca
wan
KikoiraYoungareen
Griffith
Wejage
al
Tullib
igealon
ey
Burgoo
ne
Naradhan
Syd
Port Kembla
Ariah P
arkMirr
ool
Buddigower
Tallimba
Buralyang
Weetha
lle
Erigo
liaRankinsSprings
Becko
m
Ardleth
an
Kamara
h
Moombo
oldoo
l
Barella
n
Garoolg
an
YendaTharbogangTabbita
Goolgowi
Merriwagga
Hillston
NSWCentral Division
QLD
NSW
VIC
Northern Division
Western Division
Central Division
Southern Division
Seaboard Terminal
Service Centre
Storage Site
Sub Terminal
Service Centre & Sub Terminal
Broad Gauge
Standard Gauge
Dual Gauge
Narrow Guage
Our Storage Network
Rockhampton
Dalby Tennyson
Summer HillKingsgrove
Tamworth
AlburySydney
MelbourneKensington
BallaratBridgewater
Mile EndAdelaide
North Fremantle
Flour Milling
Maize Milling
Rice Milling
Soya Milling
Industrial Mixing
Industrial & Retail Mixing
Packing
BrisbaneToowoomba
F
F
F
F
F
F
M
F
RF
S
F
F
M
R
S
GrainCorp’s acquisition of Allied Mills has added a truly national character
to the existing unrivalled network of physical grain handling assets.
Allied Mills National Business
Chairman’s & Managing Director’s Report
The past year has been an exciting one for GrainCorpwith significant growth in both core operations andrelated functions along the supply chain.
All of GrainCorp’s activity has been focussed on continuing
to mould the Company into a modern, seamless and
integrated operation. This strategy has involved an
acquisition in milling and activity in rail, partnerships in port
operations, capital investment and geographic expansion
into new grain growing areas. Since the last annual report
GrainCorp has:
• Purchased the milling assets of Goodman Fielder in
partnership with Cargill Australia - now known as
‘Allied Mills’.
• Created Bulk Terminals Australia (BTA) in partnership with
Grainco Australia as a joint venture for the operation of
port facilities in Queensland and New South Wales.
• Leased two engines and 40 rail wagons to transport grain
and bulk goods from country receival centres to our port
facilities in Victoria.
• Continued to make strategic investments in capital to
ensure a modern and efficient delivery of services, bringing
capital investment to nearly $300 million since 1996.
• Expanded our grain handling operations into South
Australia with the opening of a grain receival facility at
Naracoorte.
The 2001/02 receival figure of over 12 million tonnes
underpinned an excellent export performance of 6.8 million
tonnes. This allowed us to confirm an after tax full year profit
of $48.6 million. We were pleased to announce a second half
dividend of 44 cents per share which brought the full year
figure to a fully franked 78 cents per share. All shareholders
have been offered the opportunity to participate in the
Company’s re-activated Dividend Re-investment Plan.
Allied Mills - diversification and strength
GrainCorp entered the milling arena through the purchase of
a 60% equity share of Allied Mills. This purchase is a key
plank in GrainCorp’s strategy of increasing diversification,
and enhancing activity along the supply chain.
It resulted from a rigorous assessment of growth
opportunities aimed at increasing and diversifying our
earnings base. Allied Mills also presents a unique
opportunity for GrainCorp to enter into the flour milling
sector as a major player. The investment in Allied Mills
will be earnings per share positive, and will strengthen
GrainCorp’s performance by helping to even out seasonal
variations in future years.
Allied Mills is a national milling company with the largest
single share of the milling market and an impressive list of
customers. It can also look forward to a long-term supply
arrangement with Goodman Fielder Ltd for its Baking and
Consumer Foods divisions.
GrainCorp Annual Report 2002 7
Tom Keene Managing Director
Ron Greentree Chairman
8 GrainCorp Annual Report 2002
Our partner in the joint venture, Cargill Australia, brings a
wealth of experience in milling operations. Allied Mills builds
on our existing relationship with Cargill Australia in the
operation of grain receival centres at Red Bend and Henty
in New South Wales.
Rail - integration opportunity
The lease of two locomotives and 40 rail wagons heralds
GrainCorp’s entry into another segment of the grain supply
chain.
Transport, particularly by rail, is a critical component of
our operations. This expansion is designed to offer a
competitive, seamless service to customers from grain
accumulation right through to delivery at port.
GrainCorp took delivery of the train on 1 November 2002
which is destined for hauling grain from western Victoria to
our Victorian ports and for the domestic market. This initial
move into rail will provide a solid platform for future
expansion.
Bulk Terminals Australia (BTA) - a bigger footprint inQueensland
GrainCorp’s access to port facilities now extends into
Queensland in the form of Bulk Terminals Australia (BTA).
BTA is a joint venture partnership with Grainco Australia and
commenced operations from 1 November 2002. BTA will
operate Grainco Australia’s existing port facilities in
Brisbane, at Fisherman Islands and Pinkenba, together with
GrainCorp’s facilities at Carrington and Kooragang Island in
Newcastle under a long term licence agreement.
BTA provides both organisations with the ability to cooperate
to build better services at both ports. This will include
sharing of knowledge, skills and intellectual property, as
well as the ability to manage capital more efficiently and
save costs. The partnership represents a ‘common-sense’
utilisation of existing port capacity and capital and will
generate cost savings which improve competitiveness
and can be passed back to customers.
Capital Investment - targeted growth
GrainCorp has invested nearly $300 million over the past six
years to grow and rejuvenate our physical assets in strategic
areas. Investment has been highly selective and targeted
towards ensuring that GrainCorp strengthens its competitive
position by delivering a modern and efficient service.
Capital investment will continue where an appropriate rate of
return can be demonstrated. While competition and capacity
is increasing, so too is the overall market as Australian
growers become more productive in yields per hectare and
the steady increase in hectares planted year on year
continues.
Expansion of Receival Network - extending our reach
This year GrainCorp expanded its receival network into
South Australia with the opening of the facility at Naracoorte.
The receival centre is strategically located to make use of a
least-cost path to haul grain to GrainCorp’s terminal at
Portland in Victoria. Geographic expansion of operations
will assist in managing seasonal variations and increase
receivals overall.
In addition, our Service Centres provide a year round
relationship with customers and reinforce our presence during
harvest. They sell fertiliser, seed, chemicals and provide
information on GrainCorp storage and handling services.
2002/03 - looking forward
Droughts are a regular part of life in the agricultural sector
and have historically been followed by very good harvests.
The current dry conditions have had an undeniable impact
on everyone involved in the grains industry. With receivals
forecast to be well down on last year, this will clearly have
an impact on GrainCorp’s business.
However, the Company enjoys good fundamentals, solid
assets and a strong brand presence in the marketplace.
Variable costs will be adjusted to reflect the needs of the
season.
Financial Summary 2002 2001
$’000 $’000
Storage and handling revenue 275,856 264,564
Marketing revenue 424,150 254,713
Total revenue 700,006 519,277
EBITDA 119,771 115,005
Borrowing costs 10,888 11,884
Depreciation and amortisation 41,091 38,933
Net profit before tax 67,792 64,188
Tax 19,189 19,627
Net profit after tax 48,603 44,561
Earnings per share 121.2 109.4
Dividend per share 78 72
GrainCorp Annual Report 2002 9
GrainCorp’s strategy of supply chain and geographic
diversification provides a solid foundation for ongoing
growth and future profitability.
GrainCorp will focus on long term sustainable averages
and will continue to build on the successful strategy of
expansion and diversification.
At GrainCorp we recognise that our staff are our key asset.
The Company operates with a focus on developing their
skills and providing opportunities for advancement within
the Company where possible. We have maintained our
commitment to retaining the skills in our permanent staff
despite the reduced harvest.
In the past twelve months we have expanded our network of
grain merchants and continued to modernise and streamline
our corporate structure - importantly, we launched a joint
venture with Cargill that sees our grain accumulation teams
working together to buy grain for GrainCorp, Cargill Australia
and Allied Mills.
GrainCorp is well placed to build on these strengths over the
next twelve months.
We would like to thank our staff once again for their
exceptional contribution in an active and exciting year for
GrainCorp.
While the 2002/03 harvest is a lean one for everyone in the
grains industry, GrainCorp can look forward to emerging as
a stronger and more focussed operation.
Our expansion both geographically and along the supply
chain, combined with the dynamic state of our industry,
promises to vault GrainCorp into a new era of growth in the
coming years.
Ron Greentree Tom KeeneChairman Managing Director
Newcastle Terminal handles products such as wheat, barley, sorghum, chickpeas and cottonseed.
GrainCorp Annual Report 2002 11
GrainCorp’s structure is based on public ownership and
grower control. Grower control is maintained through a
Foundation Share that confers defined voting rights and is
held by Grain Growers Association Limited. The status of
the Foundation Share is reviewed every five years when all
shareholders are entitled to vote. The next review is at the
2003 Annual General Meeting of GrainCorp.
In 2002 the company undertook a buy back of shares with
a view to optimising the company’s debt/equity mix and
enhancing shareholder value. In total 291,434 shares were
purchased in the buy-back, leaving around 40.1 million
ordinary shares on issue.
The company also re-activated its Dividend Re-investment
Plan (DRP) and all shareholders were invited to participate.
The DRP represents an opportunity to retain capital in the
company and allows shareholders to acquire more shares
without incurring the usual associated costs.
Investor Information
GrainCorp
1 Foundation Share
40.1 million Ordinary Shares
High share price $13.75
Low share price $9.70
Closing share price at 30.09.02 $9.77
Market capitalisation at 30.09.02 $391.5 million
Interim dividend (fully franked) 34 cents
Interim dividends paid $13.7 million
Final dividend (fully franked) 44 cents
Final dividends paid $17.6 million
Basic earnings per ordinary share $1.21
Return on equity (as at balance sheet date) 17%
Increase in shareholders’ funds 5%
Shareholder equity $287.3m
Assets $569.1m
Debt $187.6m
Share Structure
Share Information
95/96 96/97 97/98 98/99 99/00 00/01 01/02
Earnings per Share
0
50
100
150
200
Cen
ts p
er S
hare
8.3m
Ord
inar
y S
hare
s
31.8m O
rdinary S
hares
PublicShareholders
Grain GrowersAssociation
12 GrainCorp Annual Report 2002
Financial Performance
Five Year Financial History
2002 2001 2000 1999 1998
Tonnages
Receivals (m) 12.0 12.1 8.3 6.7 5.4
Export (m) 6.8 7.2 4.7 3.7 3.7
Revenue
Storage & handling revenue ($m) 265.8 253.9 166.9 121.1 117.4
Marketing revenue ($m) 422.5 253.3 118.1 134.1 53.2
Other revenue ($m) 11.7 12.1 16.3 9.5 10.0
Total operating revenue ($m) 700.0 519.3 301.2 264.6 180.6
Earnings
Profit from ordinary activities before
interest, tax and significant items ($m) 78.7 76.1 71.6 42.2 37.7
Profit from ordinary activities after
tax and before significant items ($m) 48.6 44.6 48.7 29.8 27.9
Significant items after tax ($m) - - - - 7.3
Profit from ordinary activities after
tax and significant items ($m) 48.6 44.6 48.7 29.8 35.2
Earnings per Ordinary Share * (cents) 121.2 109.4 155.6 95.2 112.7
Dividends
Fully franked dividend per Ordinary Share # (cents) 78.0 72.0 79.0 47.6 56.3
Other Information
Number of Ordinary Shares # (m) 40.1 40.2 31.3 31.3 31.2
Ordinary capital ($m) 96.5 99.5 57.7 57.7 57.7
Shareholders’ funds ($m) 287.3 273.3 201.0 177.0 161.7
Return on shareholders’ funds
as at balance date (%) 16.9 16.3 24.2 16.8 21.8
Total assets ($m) 569.1 532.8 335.1 255.1 224.8
Net tangible assets per Ordinary Share ($) 7.0 6.6 6.4 5.7 5.2
Total interest bearing borrowings
less cash on hand/
Total shareholders’ funds (debt to equity) (%) 65.3 66.0 36.3 22.7 4.1
Total liabilities/Total tangible assets (%) 50.2 49.6 40.2 30.6 28.1
Current assets/Current liabilities (%) 106.5 98.5 113.4 83.1 93.5
Notes
*Basic earnings per share
#Adjusted for 3 for 5 bonus issue and 10 for 1 share split
GrainCorp Annual Report 2002 13
1998 1999 2000 2001 2002
Receivals
Export
Receivals & Exports
Mill
ion
Tonn
es
0
3
6
9
12
15
1998 1999 2000 2001 2002
Dividends Paid
Borrowing Costs
Capital Expenditure
Cash from Operations
Operating Cash Flow
$ M
illio
ns
0
30
60
90
120
150
1998 1999 2000 2001 2002
EBITDA
PAT
EBITDA & PAT
$ M
illio
ns
0
20
40
60
80
100
120
1998 1999 2000 2001 2002
Total Assets
Shareholders' Equity
Total Debt
Assets, Equity & Debt
$ M
illio
ns
0
100
200
300
400
500
600
Receival tonnes have increased by 122% over
the past five years. Exports tonnes have
increased by 84% over the same period.
Operating cashflow has increased by 40% from
$65.4 million to $91.3 million over the past five
years. Significant surplus cashflow available for
servicing debt, rewarding shareholders and
continued infrastructure and other investment
activities.
EBITDA has increased 113% from $58.7 million to
$119.8 million over the past five years. Profit margins
per tonne of grain handled have been maintained.
Shareholders’ equity increased from $161.7 million
to $287.3 million over the past five years. Net debt
to equity at a moderate 65%.
14 GrainCorp Annual Report 2002
Key Business Areas
Strategies
Achievements
Outlook
• To operate a competitive storage and handlingnetwork
• Optimise the silo network through targeted capitalinvestment
• Maintain low operating base
• Seek opportunities for further integration ofaccumulation, storage and transport
• Host an open market place at GrainCorp silos to add value for customers
• 12 million tonnes of grain received with increasedefficiency
• 6.8 million tonnes exported through GrainCorpterminals
• Maintained low cost base with 9 million tonnes of permanent storage
• Capital works program lifted efficiency andcapacity
• Over 1 million tonnes of grain moved onGrainCorp operated trains
• Greater efficiencies generated with integration ofsupply chain activities
• Continued targeted capital investment at key sites
• Improved customer service through additionalsegregations, sealing, elevator speed and out-loading efficiency
• Increased handling of non-grain bulk commodities
• To provide a highly efficient supply chain for bothdomestic and export clients
• Develop and implement risk managementstrategies for producer and end clients
• Generate leverage for other services provided by GrainCorp
• Seasonal conditions will result in lower tradingturnover
• Volatility in domestic and export markets resultingfrom drought (in Australia and North America)
• Continued development of the supply chain todomestic and export clients
• Develop further contracting alternatives betterable to accommodate seasonal variability
• To secure grain ownership and capture valuethroughout the supply chain
Goals
Storage & Handling Grain Marketing
• Increased profit
• Improved trading margins
• Trading turnover continues to grow
• New marketing alternatives launched
• Popularity of GrainCorp Pools resulted in record volumes and revenue
• Completed the export of several bulk exportshipments
• Strengthened GrainCorp presence in WesternAustralia
• Managed Marketing Program (MMP) developedand added to range of contracting optionsavailable to grain growers
GrainCorp Annual Report 2002 15
Strategies
Achievements
Outlook
Goals
• Provide a clearly defined range of productioninput solutions to producer customers
• Linkage of core business activities of grainaccumulation and handling
• Service Centres will underpin GrainCorp’s year-round business relationship with producers
• Continue to build product and service base
• Continued expansion of Service Centre network
• To supply a range of products and services tograin producers to enhance mutual benefitthroughout the production cycle
Merchandising
• Promotion of service culture across the Company
• Centres opened in West Wyalong and Coonamble
• Continued to expand whole business - seasonalfinance, seed, fertilisers, agricultural-chemicals
• Promotion of GrainCorp farming inputs throughbranded fertiliser
• Continued growth of core products in seed andfertiliser
• Demonstrate a rail commitment to grain haulageover branch and main line networks
• Provide greater reliability and customer service to growers and end user customers as a fullyaccredited rail operator
• Develop a consistent and reliable approach to railsafety, scheduling, handling and on time deliveryof grain
• Seek freight rate opportunities at GrainCorp sites
• Further develop rail service opportunities togrowers and end users in the deregulated grainmarkets of New South Wales and Victoria
• Encourage increased rail competition to forcefurther efficiencies in the grain supply chain
• Ensure continued strategic investment in rail tosupport branch line operations
• To operate competitive transport, specifically railservice, using State open access arrangementsto add value throughout the grain supply chainto the benefit of growers and shareholders
Transport
• Achieved rail accreditation in New South Wales,Victoria, South Australia and Queensland
• Introduction of a single grain train to facilitategrain supply chain efficiencies in three states
• Demonstrated rail safety performance to theAustralian rail standards
• Provided a total logistics package from farm toexport terminals and local user customers
16 GrainCorp Annual Report 2002
Storage and HandlingStorage and handling remains the core business for
GrainCorp. Our unmatched physical assets and expansive
network continue to provide a strong competitive advantage.
GrainCorp has invested nearly $300 million in strategically
important areas over the past six years to ensure our assets
provide a modern and efficient service.
Highlights
12 million tonne receival and 6.8 million tonne export figure
A 12 million tonne receival figure from last harvest resulted in
exports of 6.8 million tonnes of grain which underpinned
GrainCorp’s performance. GrainCorp’s network of
permanent grain storage facilities which can conduct
outloading in all weather types assisted in ensuring export
schedules were met.
Port terminals
GrainCorp’s four seaboard terminals at Newcastle, Port
Kembla, Geelong and Portland saw 7.9 million tonnes of
throughput (including woodchips) over the past year. This
marks a drop of 0.5 million tonnes from the previous year
however shipments of rice, pulses, oats and maize are
continuing to increase and exports of woodchips remains
over one million tonnes per annum. Commodities shipped
included wheat, barley, canola, sorghum, maize, chickpeas,
lupins, beans, paddy rice, rice, legumes, peas, lentils and
woodchips.
The biggest monthly shipment for all four ports combined
was in January 2002 with a total of 879,094 tonnes
(including 118,000 tonnes of woodchips).
The average country outloading per month to export ports
was 571,000 tonnes (loaded in country onto rail). The largest
was 685,000 tonnes.
Expenditure of over $40 million in upgrading facilities
GrainCorp continues to improve its storage facilities to
provide better service to both grower and end user
customers. Over $40 million has been spent across the
network to ensure site turn around times remain competitive
for the in-loading of grain from growers and the out-loading
of grain to end users via rail.
Naracoorte Grain Receival Facility opened
The facility, which boasts four 20,000 tonne bunkers at an
investment of $3.35 million, opened for operation in the
2002/2003 harvest. Efficiencies will be captured by the site
through the transport of grain, via the least cost path, from
Naracoorte to GrainCorp’s Port of Portland Terminal in Victoria.
This adds to the strategy of geographic expansion designed to
minimise exposure to unfavourable weather patterns.
Kooragang Agri-Food Terminal
GrainCorp invested $10 million jointly with P&O Ports to
develop an integrated agri-food storage and loading facility
at Kooragang Island. The terminal allows agri-food products
to be loaded directly from storage onto berthed vessels
delivering substantial cost savings.
It is designed to load bulk agricultural products such as
cottonseed, cottonseed meal, peas and beans and other bulk
non-wheat grains. It may also be used for non-agricultural
exports such as mineral sands and fertilisers. The multi-
purpose storage facility has a combined capacity of 30,000
tonnes. The facility will also handle imported agri-food
products, for example soya bean meal and palm kernel meal.
Bulk Terminals Australia (BTA)
BTA will operate Grainco Australia’s existing port facilities in
Brisbane, at Fisherman Islands and Pinkenba and
GrainCorp’s facilities in Newcastle at Carrington and
Kooragang Island.
The joint venture will lead to better utilisation of existing
terminal capacity while avoiding duplication of capital
investment. GrainCorp and Grainco Australia will continue
to compete for product with each other and with other
companies along the supply chain.
Review of Operations
Total for year Largest ShipmentGrain Woodchips
‘000 tonnes Tonnes
Newcastle 1,780 N/A 56,020Port Kembla 2,300 N/A 70,744Geelong 1,780 533 52,500Portland 973 469 61,500
GrainCorp Annual Report 2002 17
Warehousing
Tonnes delivered into GrainCorp’s warehousing service have
increased on the last reporting period. 31.9% of total
GrainCorp receivals were warehoused in the 2000/01
harvest compared with 38.8% during the 2001/02 harvest.
Warehousing provides growers with the opportunity to sell
their grain after carefully reviewing what can be complex
pricing structures for grain.
E-commerce
In an industry first, GrainCorp provided e-commerce
solutions to growers for the transfer of warehoused grain to
pool or contract. The service has proven popular with uptake
stronger than predicted at approximately 2,000 registrations.
Junee Sub Terminal services one of Australia’s prime grain growing regions with 150,200 tonnes of permanent storage and 170,000 of bunker storage.
18 GrainCorp Annual Report 2002
Grain MarketingGrainCorp’s trading division has expanded steadily since
its creation in 1995. Marketing of grain complements our
storage and handling business and provides further
competition in the marketplace. It is an important element
in the provision of an integrated suite of services for
GrainCorp’s customers.
Highlights
Large volumes traded
Over the past 12 months GrainCorp Marketing has produced
large trading volumes and further increased sales turnover.
Overseas client relationships have advanced with the
completion of several export shipments.
GrainCorp’s unmatched network provides the flexibility that
allows customers access to grain from a range of locations
and at a variety of grades. This network also offers a
solutions orientated approach to growers combined with
fast and responsive service.
One of the key benefits of GrainCorp Marketing is that
international customers are provided with a gateway to
Australian grain producers, accessing an integrated, efficient
supply chain.
Growers can be certain that they are selling their grain to
someone who will be dealing with the end customer, and
customers know they are buying their grain from someone
who deals directly with the grower. This direct link helps to
ensure premium quality and cost efficiency.
Suite of marketing products expanded
GrainCorp Marketing provides simple, transparent, cost
effective and well managed Pool products.
This year, the first Malt Barley Pool was offered in Victoria
along with the successful completion of GrainCorp’s first
Pre-harvest Pool. The Marketing Division also launched a
new contracting alternative known as a Managed Marketing
Program (MMP). The MMP focuses on price management,
not prediction and uses tools to manage associated risk.
Network extended
Seven fully trained Grain Merchants were added to the
GrainCorp network this year. They bring new skills and
provide customer focused support to our growing client base.
During the first year of full operation, Burren Junction’s Service Centre distributed 9,950 tonnes of fertiliser.
GrainCorp Annual Report 2002 19
MerchandisingService centres provide year round contact with grower
customers, promote a holistic package of GrainCorp services
and attract grain to our storage facilities. They are an
important component in our strategy of diversification and
expansion designed to cement our presence in grain growing
areas. Volumes of products sold have continued to increase.
Highlights
Infrastructure
GrainCorp’s multi-million dollar investment in infrastructure
for the handling of farm inputs through the country storage
network allows quick supply during peak demand periods.
This network offers greater flexibility to customers, allowing
them to get what they demand, when they need it and
where they require it.
‘Real time’ based accounting system
The implementation of a corporate resource system was
undertaken throughout the Service Centre network.
This system is an online ‘real time’ Service Centre based
accounting system that allows all customers immediate
access to account information.
Employee development
A large number of GrainCorp employees started their
careers in the Merchandising Division and have progressed
within the Company throughout various areas. This
demonstrates our commitment to staff and the opportunity
for their career development.
SunPrime Seeds
GrainCorp is continuing its joint investment with the Grains
Research & Development Corporation and The University of
Sydney to promote innovation through new wheat varieties
from SunPrime Seeds Pty Ltd.
TransportGreater participation in grain transport logistics is a key
element in GrainCorp’s competitive positioning. Our strategy of
diversification and expansion will be significantly enhanced
through the realisation of seamless integration from country
storage to port.
Highlights
Geelong balloon loop
A dual gauge rail loop connection to GrainCorp’s terminal at
Port of Geelong has recently been completed. This is the only
port in Victoria where this is available, offering significant
operational savings.
This dual gauge rail loop paves the way for a flow of grain
from the standardised rail networks in the western areas of
Victoria and the southern areas of NSW. GrainCorp’s end user
and grower customers will benefit through a least cost path
from farm to port. Efficiencies will be realised through time
saved in unloading trains that do not require shunting.
Investment in rolling stock
GrainCorp has opened a new chapter in the grain supply
chain. On 1 November 2002, the Company took delivery of
two locomotives and 40 wagons. This dynamic expansion is
designed to offer a competitive, improved service in hauling
grain to port. Train crews have been hired for the operation of
the rolling stock.
The intended primary geographic area of operation for the
train is in western Victoria, comprising two branch lines
managed by Freight Australia and one mainline managed by
the Australian Rail Transport Corporation.
Accredited rail operator
In the past 12 months GrainCorp received rail operator
accreditation in the States of South Australia, Victoria, New
South Wales and Queensland. Gaining this accreditation
removes an important hurdle in commencing intended rail
operations and will open opportunities to haul grain in the
areas where larger parcels can be located. This strategy will
auger well in a harvest where tonnes will be well down on
historical averages.
Road transport
GrainCorp makes substantial use of road transport for hauling
of grain where the use of rail is not appropriate. Services such
as on farm pick-up have proven valuable in providing an
added level of service to grower customers and securing their
business. GrainCorp plans to develop road transport into a
separate focussed operating division of the Company.
20 GrainCorp Annual Report 2002
Technical ServicesQuality of grain is a critical issue for end user customers and for
growers. GrainCorp continues to invest in the latest and most
reliable equipment to ensure we can provide the best service
offered in the market.
Highlights
Operational efficiencies realised
The Technical Services laboratories at Gilgandra and Parkes
have been integrated into the one laboratory at Parkes. This has
allowed greater utilisation of existing capital resources and has
generated considerable operational efficiencies.
Integration of quality standards
Technical Services have played a critical role in the creation of
national barley receival standards which now apply to deliveries
in all the eastern states of Australia. The benefits of these
national standards flow to both customers in export markets
and to growers. Export customers are able to determine the true
quality of barley more accurately and growers can now find it
easier to discern differences in prices from which to base
marketing decisions.
Improvements in grain testing accuracy
A further significant investment was made to purchase 18 Near
Infra Red (NIR) Whole Grain Analysers allowing coverage by this
type of equipment at almost all sites across the GrainCorp
network. On-site testing of oil content and impurities in canola
has expanded to six sites in New South Wales in addition to the
100 per cent coverage already existing in Victoria.
The benefits of more accurate testing are passed onto growers
through the receipt of payments which reflect the true quality of
the grain. This enables growers to make canola marketing
decisions at the site based on immediate knowledge of
moisture, oil and impurities.
A new laboratory at Geelong Terminal
A new quality testing laboratory at Geelong Terminal was
completed and features automatic sample delivery of both rail
and shipping samples directly into the laboratory testing area.
This state-of-the-art facility will ensure compliance with out-turn
specifications for all customers utilising this seaboard terminal.
Information ServicesInformation Services is focussed on providing effective and
valued solutions to improve business practices by delivering
quality products and quantifiable business services.
Highlights
Web functionality
Existing internal applications have been leveraged to
deploy GrainCorp’s stock systems to external customers
over the past twelve months. Through the redeployment
of established technologies, projects undertaken by the
Information Services Department are now being delivered
to market faster.
Further integration of the corporate resource systems
GrainCorp has integrated its Service Centres across the
network into the enterprise resource planning system. This
means online invoicing, real time stock control and visibility
of merchandise across the entire GrainCorp network are
now available.
Upgrade of Port Kembla process control
GrainCorp’s Information Services played an integral role in
the research and development of a process control system
which integrates the stock system with the process controls
at the Port Kembla terminal. A roll-out of this ‘turn-key’
system is planned across all terminals.
Implementation of second phase of Microsoftinfrastructure
The business has entered its second phase in the adoption
of Microsoft technologies. This phase is designed to provide
improved security and ‘fail over’ capabilities for GrainCorp’s
central stock system. GrainCorp will benefit from an
improved ability to provide its customers true online services
around the clock.
Buyer to buyer services
Twelve of the key stock reports/inquiries along with buyer
transfers have been deployed through online services. These
services provide buyers with up to date information and
transaction capabilities. This initiative is in line with the
strategic direction of improving efficiencies and lowering
costs to the core business.
The operators at Temora Sub Terminal, which has 136,100 tonnes of permanent storage, are capable of outloading in excess of 2,000 tonnes per hour.
22 GrainCorp Annual Report 2002
Employee RelationsHuman Resources commenced a comprehensive strategy
that includes a continued focus on building the capabilities
of our people to deliver on GrainCorp’s business strategy,
more rigorous and effective performance management
processes at all levels and more effective communication
and consultation with staff.
Highlights
Training and development
Another 10 trainees graduated from GrainCorp’s traineeship
program this year, all taking up positions within the
Company. Another 11 trainees were recruited this year and
can expect to complete their traineeship in 2004.
The Company has continued to provide training to its
existing Bulk Grain Workers providing nationally recognised
formal qualifications to a number of staff.
GrainCorp also introduced the Frontline Management
Initiative for line supervisors and managers in 2002.
23 supervisors and line managers will participate in the
program over the next 12 months. Participants graduate
from the program with a Certificate IV in Business (Frontline
Management).
Occupational health and safety
GrainCorp maintains a comprehensive Occupational Health
and Safety system. The Company is pleased to report a
marked improvement in injury and illness statistics over the
past 12 months due to enhancements of existing and
development of new innovative systems.
Commitment to OH&S begins with the Board and Executive
OH&S committees extending to many regionally based
committees. This ensures a fair representation of employees,
contractors and management, consult to make decisions
affecting the health and well-being of everyone at or around
GrainCorp sites.
A commitment to training all staff in sound OH&S
procedures has ensured a greater awareness and ability
to recognise and manage risk at the workplace.
The continued adoption of new and innovative OH&S
systems will ensure GrainCorp meets and exceeds
legislative and best practice standards in the future.
Industrial relations
During the year, a review of industrial relations in our
operational areas commenced. The review of our seaboard
terminals has been completed and produced a number
of efficiencies. These included right–sizing of the award
workforce at Geelong and Sunshine and a reduction in
staffing levels on a number of specific functions at
Newcastle.
The GrainCorp Foundation has just completed its second
round of funding for 2002, its fourth round since its
inception, with each round attracting interest from more
community-based projects.
The Foundation was established as an initiative of the
GrainCorp Board, with the mission to represent the
Company’s social responsibility to the communities in which
GrainCorp staff, shareholders and customers live and work.
Due to the provision that the GrainCorp Foundation would
receive 1% of GrainCorp’s after tax profits, the Foundation
was able to contribute over $480,000 to these communities
in 2002, via an assortment of worthwhile ventures. These
have included such projects as the supply of new equipment
to the Warracknabeal Youth Drop-In Centre, the provision of
two new Alpha helmets for Careflight and the purchase of
new play equipment for the children at the Junee Preschool.
The GrainCorp Foundation is continuing its support of the
Loddon Murray Community Leadership Program, the
University of New South Wales and the Country Education
Foundation, which is being implemented across regional and
rural Victoria and New South Wales.
Supporting Our Communities
GrainCorp Annual Report 2002 23
The Executive and Senior Management teams are focussed on
growing business solutions for GrainCorp customers and
shareholders. Over the past year, the Executive reviewed business
performance and developed strategies that provide continued
business growth and position the Company for the future.
Executive Management
The GrainCorp Foundation donated $50,000 to Telstra Childflight which transports critically ill children from rural areas.
Tom Keene Managing Director
24 GrainCorp Annual Report 2002
Ron Greentree Chairman
Allan McCallumDeputy Chairman
Graham Barron Nick Burton Taylor
R.L. (Ron) Greentree (Chairman)
Grower from Merrywinebone, NSW. Principal of an
agricultural machinery business and Director of BRI Australia
Ltd. Chairman of Vicgrain Limited and Victorian Grain
Services Limited. Chairman of the Remuneration and
member of the Capital Works Review and Equity
Committees.
A.D. (Allan) McCallum (Deputy Chairman) Dip Ag.Sc
Grower from Kerang, Victoria. Director of Vicgrain Limited
and Victorian Grain Services Limited. Deputy Chairman of
Pivot Limited, Chairman of Nugrain Pty Limited, Chairman of
Farm Horizons Limited and President of Australian Oilseeds
Federation. Chairman of the Capital Works Review and
Occupational Health, Safety and Environment Committees.
T.B. (Tom) Keene (Managing Director) B.Ec, MAICD
Managing Director of GrainCorp Group and member
of the Risk Management Committee. Chairman of Allied
Mills Australia Pty Limited.
The GrainCorp Board of 11 Directors is made up of six Grain
Growers Association Directors (one of whom must be the
Chairman of GrainCorp), four Directors elected by ordinary
shareholders and the Managing Director.
W.G. (Graham) Barron
Grower from Ungarie, NSW. Chairman of the Risk
Management Committee and member of the Capital Works
Review Committee.
N. (Nick) Burton Taylor AM B.Ec, ASIA, FCA, FAICD
Grower from Boorowa, NSW. Principal Hillgrove Pastoral
Company. Director of Rural Press Limited, Bankstown
Airport Limited, Heggies Bulk Haul Limited and The
Australian Agricultural Company Limited. Member Public
Transport Union (Loco Division). Chairman of the Audit
Committee, the GrainCorp Foundation and member of the
Remuneration Committee.
R.R. (Ross) Flanery
Grower from Harden, NSW. Commercial interests in forestry
and hydro-electric power. Chairman of the Equity Committee
and member of the Capital Works Review Committee.
Board of Directors
GrainCorp Annual Report 2002 25
Ross Flanery Rick Freeman David Groves DonaldMcGauchie
Julian Menegazzo David Trebeck
R.G. (Rick) Freeman
Grower from Edgeroi, NSW. Company principal of Norseman
Machinery Imports Pty Limited. Member of the Capital
Works Review Committee. Director of GrainCorp
Superannuation Pty Limited.
D. (David) Groves B.Com, M.Com, CA
Chartered Accountant and Company Director. Director of
Masling Industries Pty Limited and Equity Trustees Limited.
Active in the management of companies involved in
viticulture and investment. Member of the Equity, Risk
Management and Remuneration Committees.
D.G. (Donald) McGauchie
Grower from Prairie, Victoria. Director of Reserve Bank of
Australia, Director of Telstra Corporation Limited, Ridley
Corporation Limited, National Foods Limited and Deputy
Chairman of Australian Wool Testing Authority Limited.
Member of the Equity and Remuneration Committees.
J.A. (Julian) Menegazzo B.Sc
Grower from Balliang, Victoria. Active in horticulture
marketing business. Member of the Audit Committee and
GrainCorp Foundation.
D.B. (David) Trebeck B.Sc.Agr (Hons), M.Ec.
Consultant, Grower and Company Director from Canberra,
ACT. Executive Chairman of ACII Tasman Pty Limited.
Director of Incitec Limited, National Grazing Services Pty
Limited. Member of Audit Committee and OH&S Committee.
26 GrainCorp Annual Report 2002
Corporate Governance Statement
This statement outlines the principal corporate governance
practices that were followed by the company throughout the
2001/2002 financial year.
Role of ShareholdersThe shareholders of GrainCorp Limited play an important
role in corporate governance by virtue of their responsibility
for voting for the appointment of Directors. The Foundation
shareholder, Grain Growers Association Limited, who
represents 14,000 grain growers is consulted on a regular
basis on the strategic direction and performance of the
Company.
The Board ensures that shareholders are kept fully informed
on developments affecting the company through:
• The annual and interim results which are released through
reports, newsletters and presentations;
• Compliance with Australian Stock Exchange’s continuous
disclosure listing rules;
• The annual general meeting and other meetings called to
obtain approval for board action.
Board of DirectorsThe GrainCorp Board is accountable to shareholders for the
business and affairs of the group and it sets the framework
for the Company’s long term success. It approves the
Company’s goals, direction, long term strategic plans and
provides overall policy guidance. The Board ensures that
appropriate policies and procedures for the management of
business and financial risks and associated internal controls
are in place and monitors environmental and safety
performance. It also monitors compliance with laws and
ethical behaviour.
Size and Composition of the Board
There are currently 11 directors on the Board - 10 non-
executive directors, including the Chairman, and one
executive director, being the Managing Director.
Non-executive directors comprise up to six “group”
directors, whom are all the directors of Grain Growers
Association Limited (“GGA”) and up to four “elected”
directors whom are subject to re-election by rotation at the
Company’s annual general meeting. Group directors must be
members of GGA and there must be two directors appointed
from each of three geographical zones across New South
Wales/Victoria. In subsequent years, Group directors are
subject to re-election by rotation at GGA’s annual general
meetings. The Chairman is elected by the group directors.
Details of experience and qualifications are set out on page
35 of this annual report. The performance of each non-
executive director is reviewed by the Chairman, The
Chairman’s performance is reviewed by the full Board. An
independent external consultant is retained to assist the
Chairman and Directors in this review process.
The Managing Director automatically relinquishes his
position on the Board in the event that his executive position
with the Company ceases.
The Work of Directors
In addition to the preparation for and attendance at Board
and committee meetings, non-executive directors visit
operational sites and are involved in local and national
industry matters. Business planning meetings, attendance
at conferences and other industry occasions also require
involvement of directors.
The Board reviews the objectives and performance of
GrainCorp Group alliances and joint ventures. The Board
considers it appropriate that for good corporate governance
practice non-executive directors will not sit on joint venture
or alliance Boards.
Directors have access to the Company’s solicitors and
auditors at the Company’s expense should they wish to seek
advice on matters relating to their duties as directors of the
Company, after first notifying the Board or Chairman of the
Board.
Each Director is covered by relevant company insurance
policies and enters into a Deed of Indemnity with the Group.
GrainCorp Annual Report 2002 27
Condobolin is one of the biggest receival sites in NSW with a storage capacity of approximately 348,000 tonnes.
28 GrainCorp Annual Report 2002
Emoluments of Board Members
The Board recommends to shareholders, from time to time,
a quantum of total directors fees. Non-executive annual
Directors Fees are established based on independent advice.
With the exception of the Chairman and Deputy Chairman,
additional yearly fees are paid to directors who are members
of committees. The Annual General Meeting of shareholders
in 2001 approved a total non-executive director remuneration
pool of up to $1million annually for a three year period.
In addition to reimbursement of expenses, any allowance
paid to directors is in line with rates prescribed for members
of the Senior Executive Service, Australian Public Service.
Details of current remuneration and meeting attendance can
be found on pages 36 and 38.
Retiring non-executive Directors are entitled to an allowance
up to a maximum of their last three years remuneration after
nine years service (pro-rata for a lesser period with a
minimum of three years).
Board and Committee Agendas
The Chairman and Managing Director establish the agendas
for Board meetings, although directors have the right to add
items for directors’ consideration. Each committee chairman
decides the length and frequency of committee meetings in
consultation with committee members and consults with
management on preparation of agendas. Senior executives
attend Board and committee meetings when relevant
matters are under consideration. Committee chairmen report
the work of their committee to the Board on a regular basis.
Board CommitteesThe Board has established seven committees to increase its
efficiency and effectiveness. Each committee has a formal
charter approved by the Board.
Board Audit Committee (BAC)
The BAC Committee comprises three non-executive
directors. Meetings are held at least four times a year.
The committee ensures that the financial statements are
prepared in accordance with appropriate standards and
statutory requirements and reviews all matters raised by
the internal and external auditors, risks associated with the
business and reports to the Board on any material item.
It develops audit policy and monitors audit functions within
the companies. The BAC has, during the year, reviewed and
approved an Internal Business Audit Plan incorporating a
comprehensive business review process in respect of
internal audit management functions. The committee will
also review any material changes in accounting policy.
The Committee reports to the Board after each meeting.
Management, internal and external auditors are invited to
attend BAC meetings to ensure that adequate controls and
practices are maintained throughout the Group. The BAC
reviews progress in and reports arising from the Internal
Business Audit Plan as well as specific issues or matters
which may arise from the internal and external audit
process. The external auditors will have direct access on a
regular basis to the BAC without management involvement.
In addition it has oversight of financial investments.
GrainCorp seeks to minimise the risk that arises through
the Company’s activities in financial risk management.
External auditors are appointed for a term of three years
and are not automatically reinstated. The committee plays
an active role in reviewing the adequacy of the existing
arrangements, and is responsible for ensuring that the
auditors have the necessary qualifications and skills and
that the scope and quality of their audit is appropriate.
The committee makes recommendations to the Board in
relation to the appointment of external auditors. An Auditor
Independence Policy has been adopted which sets out
the key principles to be followed by the Audit firm in its
relationship with the Company. The BAC will conduct a
formal assessment of external auditor performance each
year and report the outcome to the Board.
The Committee reviews disclosure practices of the Company
to shareholders and relevant external agencies.
Risk Management Committee
The Company’s Risk Management Committee (“RMC”)
specifically develops and oversees policy for all risk
associated with grain marketing, merchandising and other
areas of operations. The policies specify trading limits,
approved risk management tools, credit management and
GrainCorp Annual Report 2002 29
delegations for authorising transactions and segregation of
duties. The committee comprises two non-executive
directors, the Managing Director, the Chief Operating Officer
and one external appointment.
Equity Committee
The Equity Committee comprises four non-executive
directors and is responsible for recommending to the Board
matters pertaining to shareholders’ interest and the capital
structure of the company.
Capital Works Review Committee
The Capital Works Review Committee consists of four non-
executive directors and the Chief Operating Officer. The
purpose of this committee is to review strategic operational
issues, including utilisation of storage, future requirements,
harvest performance, service standards and overview of
capital expenditure. The committee recommends to the
Board policy on disposal, leasing and the Company’s long
term operational needs.
Remuneration and Appointments Committee
The Remuneration and Appointments Committee comprises
four non-executive directors. The principal role of the
committee is to maintain a remuneration policy which
ensures the remuneration package of senior executives
properly reflects their duties and responsibilities. This
includes ensuring that remuneration is competitive in
attracting, retaining and motivating people of the highest
quality and aligns the interests of senior management with
shareholders.
The committee reviews and recommends to the Board, after
reference to performance and published remuneration
surveys and market information, the remuneration of the
Managing Director and other senior executives.
The committee also reviews the non-executive directors’
remuneration arrangements and details are then submitted
to the Board for their review and subsequently to a general
meeting of GrainCorp Limited for approval by shareholders.
In determining the level of fees, survey data on fees paid by
comparable companies is considered together with changes
in the level of responsibilities.
The committee sets, reviews and monitors policy on all staff
remuneration and other conditions of employment. The
committee monitors a management succession plan.
Occupational Health, Safety and EnvironmentCommittee
The OHS and E Committee is comprised of one non-
executive Director, Chief Operating Officer, Company
Secretary and Risk and Safety Manager. The principal role
of the Committee is to review and recommend to the Board
proactive strategies for providing a safe and healthy
workplace for all employees, growers, customers,
contractors and local communities.
A monthly reporting system for compliance and
performance against agreed performance objectives is
reviewed by the Board.
Foundation Committee
The Foundation committee will comprise seven members
two of whom will be non-executive directors, one employee
and four community representatives (selected by the
GrainCorp Board).
The aim of the GrainCorp Foundation is to represent the
Company’s social responsibility to the communities -
particularly rural and regional - in which GrainCorp staff,
shareholders and customers live and work.
The GrainCorp Foundation seeks to create and support
opportunities that build on the initiative and potential of rural
people in developing and growing communities in which
GrainCorp operates. GrainCorp allocate 1% of after tax
profits annually to sponsorship activities. The primary
objective is to provide financial support, in an objective and
programmed fashion, to the rural communities in which
GrainCorp is based.
30 GrainCorp Annual Report 2002
Policies and Procedures
Health and Safety
GrainCorp is committed to ensuring compliance with
relevant health, safety and environmental legislation. The
Board requires a best practice approach in these areas and
has implemented appropriate management objectives and
structures and a regular reporting process to ensure that this
objective is achieved. GrainCorp’s health, safety and
environmental policies are under continuous review and are
updated when required. In general terms, GrainCorp’s
policies are designed to eliminate injury to people and to
minimise loss or damage to product stored and handled
on behalf of customers.
Trading of GrainCorp Shares
The following policy applies for the trading of GrainCorp
shares by directors and employees.
That buying or selling of GrainCorp Limited shares by
directors, officers, all staff agreement employees,
contractors located at any of the company’s offices, users of
the general ledger financial systems and related parties, who
are aware of price sensitive information not available to the
market, be restricted to the following time periods:
(i) Six weeks commencing 48 hours from the date of
lodgement of the half yearly accounts of GrainCorp
Limited with ASIC and the ASX.
(ii) Six weeks commencing 48 hours from the date of
lodgement of the preliminary final report of GrainCorp
Limited with the ASX.
(iii) Four weeks commencing 48 hours from the date of the
Annual General Meeting of the Company.
These trading windows are open subject to an individual not
being in possession of market-sensitive information.
Each Director has entered into an agreement “Director and
disclosure of interests and transactions in Securities” with
GrainCorp Limited in accordance with ASX Listing Rules.
Ethical Standards
All directors and employees are expected to act with the
utmost integrity and objectivity, striving at all times to
enhance the reputation and performance of the Company.
The Company has implemented a Code of Conduct and
Diversity and Equity Policy for all directors and employees.
Membership of appropriate professional bodies is
encouraged.
Continuous Disclosure
As a guiding principal GrainCorp must ensure it does not
communicate material price or value sensitive information
to an external party except where that information has
previously been disclosed to the market generally. The
Company has adopted a continuous disclosure policy
and financial markets communication policy to ensure
compliance with disclosure obligations.
Related Party Transactions
Transactions by directors for storage, handling, testing,
seed, sales and purchases of grain are undertaken on terms
no more favourable than available to other customers and
apart from standard business transactions are reviewed
and approved by the Chairman of the Audit Committee in
accordance with the corporate governance policy of the
Company.
GrainCorp Annual Report 2002 31
Contents
Directors’ Report 32
Consolidated Statement of Financial Performance 40
Discussion & Analysis of
Consolidated Statement of Financial Performance 41
Consolidated Statement of Financial Position 42
Discussion & Analysis of
Consolidated Statement of Financial Position 43
Consolidated Statement of Cash Flows 44
Discussion & Analysis of
Consolidated Statement of Cash Flows 45
Notes to the Consolidated Financial Statements 46
Directors’ Declaration 55
Independent Audit Report 56
Shareholder Information 57
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
2002 Concise Report
32 GrainCorp Annual Report 2002
GrainCorp Limited and Controlled Entities
Directors’ Report
The directors present their report on the consolidated entity
consisting of GrainCorp Limited and the entities it controlled
at the end of, or during, the year ended 30 September 2002.
Directors
The following persons are directors of GrainCorp Limited at
the date of this report:
R.L. Greentree (Chairman)
A.D. McCallum (Deputy Chairman)
T.B. Keene (Managing Director)
W.G. Barron
N. Burton Taylor AM
R.R. Flanery
R.G. Freeman
D. Groves
D.G. McGauchie
J.A. Menegazzo
D.B. Trebeck (Appointed 27 February 2002)
Mr P.B. Wade was a director from the beginning of the
financial year until his retirement on 27 February 2002.
Mr D.B. Trebeck was appointed as a director at the
Annual General Meeting on 27 February 2002.
Principal Activities
The nature and scope of the main activities undertaken by
the consolidated entity during the year were the provision of
services to the grain industry including:
• Receival, handling, storage and transportation of grain and
other bulk commodities as an agent for marketing
organisations, end users and growers;
• Marketing of grain and agricultural supplies and the
operation of grain pools;
• Provision of agronomic services and farm input products.
Review of Operations
The consolidated entity recorded a profit after tax of
$48.6 million (EBITDA $119.8 million) for the financial year
compared with $44.6 million (EBITDA $115.0 million) for the
previous year. Despite lower receivals and exports, profit
after tax increased by $4 million primarily due to operational
efficiencies and synergies from the successful merger with
Victorian Grain Services Limited.
A more detailed review of the operations during the financial
year and the results of those operations appear elsewhere in
the Annual Report.
Significant Changes in State of Affairs
Share Buy Back
GrainCorp Limited (GrainCorp) commenced an on-market
buy back of ordinary shares on 3 October 2000 for the
period to 31 July 2002. The maximum number of shares that
could be acquired was 4.1 million, per annum. The number
of shares purchased in the year to 30 September 2002 was
291,434 shares bringing the overall total purchased to
1,355,452 shares.
Other than the above, there were no significant changes in the
consolidated entity’s state of affairs during the year in review.
Dividends
The following dividends have been paid or declared for payment to members:
Date Rate Amount(Cents) $’000
Paid 21 December 2001 - Final for 2001 29.0 11,655
Paid 28 June 2002 - Interim for 2002 34.0 13,713
Declared for payment on 6 January 2003 - Final for 2002 44.0 17,632
GrainCorp Annual Report 2002 33
GrainCorp Limited and Controlled Entities
Directors’ Report
Matters Subsequent to the End of the Financial Year
Allied Mills
GrainCorp and Cargill Australia Ltd (Cargill), a fully owned
subsidiary of international agribusiness company, Cargill
Incorporated, have bought the milling and mixing business
from Goodman Fielder Ltd. The acquisition is a joint venture
between GrainCorp and Cargill and will trade as Allied Mills.
The business was acquired on 4 October 2002 for
approximately $200 million, and GrainCorp has a 60%
ownership interest. All necessary regulatory approvals have
been obtained by both companies.
Bulk Terminals Australia
On 1 November 2002, GrainCorp joined with Grainco
Australia Ltd (Grainco) to form a new joint venture company
called Bulk Terminals Australia (BTA) which will operate their
respective Newcastle and Brisbane terminals.
BTA, in which GrainCorp and Grainco maintain an equal
shareholding, will operate GrainCorp’s existing port facilities at
Carrington and Kooragang Island in Newcastle and Grainco’s
facilities at Fisherman Islands and Pinkenba in Brisbane.
Tax Consolidation
The first two tranches of the tax consolidation legislation
became substantively enacted on 21 October 2002 when
the New Business Tax System (Consolidation, Value Shifting,
Demergers and Other Measures) Bill 2002 was passed by
the Senate. GrainCorp intends to adopt the legislation in the
next financial year.
The financial effect of the legislation has not been
recognised in this financial report in accordance with UIG
39 Effect of Proposed Tax Consolidation Legislation on
Deferred Tax Balances. It is not possible to disclose the
effect of the legislation in this financial report as it cannot
yet be reliably estimated.
Drought
Due to current drought conditions in most of New South Wales
and Victoria, receivals will be significantly lower in the next
financial year. However, cost management measures have
been implemented to lessen the impact on next years results.
Other
Other than reported elsewhere in the Annual Report, no
other matter or circumstance has arisen since 30 September
2002 which has significantly affected or may significantly
affect:
(a) the consolidated entity’s operations in future financial
years; or
(b) the results of those operations in future financial years; or
(c) the consolidated entity’s state of affairs in future financial
years.
Likely Developments
All information on future likely developments is contained
elsewhere in the Annual Report. The directors believe that
additional information as to likely developments in the
operations of the consolidated entity in future financial years,
including the expected results of those operations, would likely
result in unreasonable prejudice to the consolidated entity.
34 GrainCorp Annual Report 2002
GrainCorp Limited and Controlled Entities
Directors’ Report
Environment
GrainCorp is committed to ensuring business practices are
conducted in an environmentally responsible manner.
Management of operations and assets are such that adverse
environmental impacts are minimised. Notwithstanding
compliance to environmental laws as a minimum standard,
GrainCorp strives to ensure best practice principles are
adopted in managing environmental issues. Strategies
include, but are not limited to:
• Development and implementation of sound environmental
management systems to ensure legislative requirements
are met;
• Engaging independent specialists to assess current
practice and assist in improvement strategies;
• Develop and encourage employee awareness and
responsibility to environmental issues;
• Monitor performance of the consolidated entity in respect
of environmental issues and adjust processes accordingly;
• Introduce procedural guidelines to address task-specific
environmental concerns.
An important part of the GrainCorp Environmental
Management System includes the recording of any incident
that may have a potential environmental impact. During the
financial year, no fines or penalties were imposed on any
member of the consolidated entity under environmental
regulation and all required environmental licenses and
permits are current.
Occupational Health and Safety
GrainCorp is committed to ensuring compliance with
relevant health, safety and environmental legislation. The
Board requires a best practice approach in these areas and
has implemented appropriate management objectives and
structures and a regular reporting process to ensure that this
objective is achieved. GrainCorp’s health, safety and
environmental policies are under continuous review and are
updated when required. In general terms, GrainCorp’s
policies are designed to eliminate injury to people and to
minimise loss or damage to product stored and handled on
behalf of customers.
GrainCorp Annual Report 2002 35
GrainCorp Limited and Controlled Entities
Directors’ Report
Information on Directors
Particulars of Directors’ beneficial interest in ordinary shares.
R.L. (Ron) Greentree (Chairman) 757,152 sharesGrower from Merrywinebone, NSW. Principal of an agricultural machinery business and Director of
BRI Australia Ltd. Chairman of Vicgrain Limited and Victorian Grain Services Limited. Chairman of the
Remuneration and member of the Capital Works Review and Equity Committees.
A.D. (Allan) McCallum (Deputy Chairman) Dip Ag.Sc 126,615 sharesGrower from Kerang, Victoria. Director of Vicgrain Limited and Victorian Grain Services Limited. Deputy
Chairman of Pivot Limited, Chairman of Nugrain Pty Limited, Chairman of Farm Horizons Limited and
President of Australian Oilseeds Federation. Chairman of the Capital Works Review and Occupational
Health, Safety and Environment Committees.
T.B. (Tom) Keene (Managing Director) B.Ec, MAICD 170,026 sharesManaging Director of GrainCorp Group and member of the Risk Management Committee. Chairman
of Allied Mills Australia Pty Limited.
W.G. (Graham) Barron 154,982 sharesGrower from Ungarie, NSW. Chairman of the Risk Management Committee and member of the Capital
Works Review Committee.
N. (Nick) Burton Taylor AM B.Ec, ASIA, FCA, FAICD 1,520,038 sharesGrower from Boorowa, NSW. Principal Hillgrove Pastoral Company. Director of Rural Press Limited,
Bankstown Airport Limited, Heggies Bulk Haul Limited and The Australian Agricultural Company Limited.
Member Public Transport Union (Loco Division). Chairman of the Audit Committee, the GrainCorp
Foundation and member of the Remuneration Committee.
R.R. (Ross) Flanery 223,372 sharesGrower from Harden, NSW. Commercial interests in forestry and hydro-electric power. Chairman of the
Equity Committee and member of the Capital Works Review Committee.
R.G. (Rick) Freeman 136,192 sharesGrower from Edgeroi, NSW. Company principal of Norseman Machinery Imports Pty Limited. Member
of the Capital Works Review Committee. Director of GrainCorp Superannuation Pty Limited.
D. (David) Groves B. Com, M.Com, CA 1,633,099 sharesChartered Accountant and Company Director. Director of Masling Industries Pty Limited and Equity
Trustees Limited. Active in the management of companies involved in viticulture and investment.
Member of the Equity, Risk Management and Remuneration Committees.
D.G. (Donald) McGauchie 93,543 sharesGrower from Prairie, Victoria. Director of Reserve Bank of Australia, Director of Telstra Corporation Limited,
Ridley Corporation Limited, National Foods Limited and Deputy Chairman of Australian Wool Testing
Authority Limited. Member of the Equity and Remuneration Committees
J.A. (Julian) Menegazzo B.Sc. 472,365 sharesGrower from Balliang, Victoria. Active in horticulture marketing business. Member of the Audit Committee
and GrainCorp Foundation.
D.B. (David) Trebeck B.Sc.Agr (Hons), M.Ec. 13,158 sharesConsultant, Grower and Company Director from Canberra, ACT. Executive Chairman of ACII Tasman
Pty Limited. Director of Incitec Limited, National Grazing Services Pty Limited. Member of Audit Committee
and OH&S Committee.
36 GrainCorp Annual Report 2002
GrainCorp Limited and Controlled Entities
Directors’ Report
The particulars of Directors’ beneficial interests in shares are as at the date of this report.
As at the date of this report, Grain Growers Association “GGA” owned 1 Foundation share and 8,253,709 ordinary shares in
GrainCorp Limited. Messrs Greentree, McCallum, Barron, Flanery, Freeman and McGauchie are directors of GGA and members
of GGA. Messrs Burton Taylor, Menegazzo and Trebeck are members of GGA and in that capacity have an interest in the above
shares owned by GGA.
Meetings of Directors
The following table sets out the number of meetings of GrainCorp’s Directors (including meetings of committees of Directors)
held during the twelve months to 30 September 2002, and the number of meetings attended by each director.
Director Board Meetings Committee Meetings
Number held during Number Number held Number
period in office attended during period in office attended
Total Number of Meetings Held
R.L. Greentree 12 12 17 16
A.D. McCallum 12 12 20 20
T.B. Keene 12 12 5 5
W.G. Barron 12 12 11 11
N. Burton Taylor 12 12 11 11
R.R. Flanery 12 11 19 19
R.G. Freeman 12 12 13 13
D. Groves 12 12 13 13
D.G. McGauchie 12 11 9 8
J.A. Menegazzo 12 12 5 5
D.B. Trebeck (Appointed 27/2/02) 7 6 2 2
P.B. Wade (Retired 27/2/02) 5 2 4 2
GrainCorp Annual Report 2002 37
GrainCorp Limited and Controlled Entities
Directors’ Report
Emoluments of Board Members and Senior Executives
The criteria for reviewing the emoluments of the Managing
Director and senior executive include achievement of
individual performance objectives as defined by the internal
Performance Management System, advice from external
consultants on the prevailing market for equivalent positions,
the company’s overall performance and achievement of key
strategic goals, increased and changed work loads,
increased responsibilities and interaction of the incumbent
with the Board and external parties.
The Remuneration Committee is responsible for ensuring the
emoluments of senior executives reflect their responsibilities
and performance. Further details are provided in the
Corporate Governance Statement in the Annual Report.
Non-executive annual Directors Fees from 1 March 2002 are
$44,700 per director, $111,700 for the Chairman and $74,400
for the Deputy Chairman. With the exception of the Chairman
and Deputy Chairman, additional yearly fees of $4,650 are
paid to directors who are members of committees other than
audit. The Chairman of these committees is paid $6,950.
Yearly fees for the Audit Committee are $6,000 for members
and $8,950 for the Chairman. $1,110 per meeting will be
paid to a director who chairs an ad hoc committee and
$800 per meeting to a director who is a member of an ad
hoc committee. In addition to reimbursement of expenses,
any allowance paid to directors is in line with rates
prescribed for members of the Senior Executive Service,
Australian Public Service.
Retiring non-executive Directors are entitled to an allowance
up to a maximum of their last three years remuneration after
nine years service (pro-rata for a lesser period with a
minimum of three years).
Details of emoluments paid or payable to each director of
GrainCorp Limited and each of the five executive officers
of the company and the consolidated entity receiving the
highest emoluments in the financial year are set out in the
following tables.
38 GrainCorp Annual Report 2002
GrainCorp Limited and Controlled Entities
Directors’ Report
Non-Executive Directors of GrainCorp Limited
Directors’ Fees Superannuation Total
& Allowances Contributions
$ $ $
R.L. Greentree 109,441 9,056 118,497
A.D. McCallum 89,375 5,513 94,888
W.G. Barron 56,679 6,737 63,416
N. Burton Taylor 55,999 5,748 61,747
R.R. Flanery 50,554 12,679 63,233
R.G. Freeman 49,058 9,757 58,815
D. Groves 57,414 4,728 62,142
D.G. McGauchie 51,842 5,226 57,068
J.A. Menegazzo 49,860 5,274 55,134
D.B. Trebeck (Appointed 27/2/02) 29,446 2,473 31,919
P.B. Wade (Retired 27/2/02) 140,529* 5,180 145,709
* Includes retirement benefit
Note: Directors’ fees include applicable committee fees.
Executive Director of GrainCorp Limited
Salary Bonus Motor Super- Total
Vehicle annuation
Name $ $ $ $ $
T.B. Keene
Managing Director 377,152 97,200 48,878 40,211 563,441
Other Executives of GrainCorp Limited
Salary Bonus Motor Super- Total
Vehicle annuation
Name and position $ $ $ $ $
M. Watts, Chief Financial Officer 362,658* 23,220 - 4,060 389,938
J. Di Leo, Chief Operating Officer 248,818 43,200 41,010 24,435 357,463
A. Johns, Business Development Manager 140,443 21,000 16,040 20,622 198,105
J. Tansley, Southern Division Manager 136,875 17,273 9,091 28,594 191,833
N. Hart, Corporate Services Manager 142,989 9,844 21,192 14,164 188,189
*Includes retirement payment and leave entitlements.
Note: Emoluments reported are those paid or payable for the 12 months ended 30 September 2002. The amounts shown include
fringe benefits tax where applicable.
GrainCorp Annual Report 2002 39
GrainCorp Limited and Controlled Entities
Directors’ Report
Share Options
Two additional executive options plans were approved by shareholders at the 2002 Annual General Meeting allowing a total of
940,000 shares to be acquired. The number of options granted to the Managing Director and the five most highly remunerated
executives were as follows:
Name and Position Number of Options
Directors
Tom Keene, Managing Director 250,000
Other Executives
M. Watts, Chief Financial Officer * -
J. Di Leo, Chief Operating Officer 100,000
A. Johns, Business Development Manager 50,000
J. Tansley, Southern Division Manager 50,000
N. Hart, Corporate Services Manager 50,000
* Retired.
The options were granted under the executive option plans 2a and 2b.
Unissued ordinary shares of GrainCorp Limited under option at the date of this report are as follows:
Option Plan Number Issue Price Expiry Date
GrainCorp Executive Option Plan 2a 250,000 $8.85 30 September 2005
GrainCorp Executive Option Plan 2b 690,000 $10.93 30 September 2005
A total of 68,000 ordinary shares of GrainCorp Limited were
issued during the year ended 30 September 2002 on the
exercise of options granted under the GrainCorp Executive
Option Plan 1b. The amount paid on each of the shares was
$6.25. No amounts are unpaid on any of the shares.
Since 30 September 2002, 88,000 shares of GrainCorp
Limited were issued on exercise of options granted under
the GrainCorp Executive Option Plan 1c. The amount paid
on each of the shares was $6.25. No amounts are unpaid on
any of the shares.
Insurance of Officers
During the financial year, the consolidated entity has paid, or
agreed to pay, premiums to insure persons who are, or have
been, an officer of the company or a related entity, or any
past, present or future director or officer of the company,
or any of it’s subsidiaries or related entities. The contracts
prohibit disclosure of the amount of the premium paid.
The liabilities insured include costs and expenses that may
be incurred in defending civil or criminal proceedings that
may be brought against the officers in their capacity as
officers of entities in the consolidated entity.
Rounding of Amounts to Nearest Thousand Dollars
The company is of a kind referred to in Class Order 98/0100
issued by the Australian Securities and Investments
Commission, relating to the “rounding off” of amounts in the
directors’ report and financial report. Amounts in the
directors’ report and financial report have been rounded off
to the nearest thousand dollars in accordance with that
Class Order.
Auditor
PricewaterhouseCoopers continues in office in accordance
with Section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of the
directors.
R.L. Greentree
Chairman
Sydney
4 December 2002
40 GrainCorp Annual Report 2002
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Statement of Financial PerformanceConsolidated
Consolidated
2002 2001
$’000 $’000
Revenue from operating activities 688,284 507,203
Other revenue 11,722 12,074
Total revenue from ordinary activities 700,006 519,277
Goods purchased for resale (401,552) (227,566)
Raw materials and consumables used (20,132) (22,704)
Employee benefits expense (86,706) (87,663)
Depreciation and amortisation expenses (41,091) (38,933)
Borrowing costs expense (10,888) (11,884)
Repairs and maintenance (13,459) (15,199)
Other expenses from ordinary activities (58,296) (51,140)
Expenses from ordinary activities (632,124) (455,089)
Shares of net profits of associate accounted for using the equity method (90) -
Profit from ordinary activities before income tax expense 67,792 64,188
Income tax expense (19,189) (19,627)
Profit from ordinary activities after income tax expense 48,603 44,561
Outside equity interests in profit from ordinary activities after income tax 93 19
Net profit attributable to members of GrainCorp Limited 48,696 44,580
Total changes in equity other than those resulting from transactions with owners 48,696 44,580
Cents Cents
Basic earnings per share 121.2 109.4
Diluted earnings per share 118.2 109.0
The above statement of financial performance should be read in conjunction with the attached notes.
GrainCorp Annual Report 2002 41
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Statement of Financial PerformanceDiscussion and analysis of Consolidated
Financial Performance Summary
Profit after tax for the year ended 30 September 2002 was
$48.6 million, compared to $44.6 million for the
corresponding year. Despite lower receivals and exports,
profit after tax increased by $4 million, primarily due to
operational efficiencies and synergies from the successful
merger with Victorian Grain Services Limited. Earnings
before interest, tax, depreciation and amortisation (EBITDA)
also increased from $115.0 million to $119.8 million.
An analysis of revenue and profit after tax by segment is set
out in Note 2. A further review of the operations and results
is contained elsewhere in the Annual Report.
Storage & Handling
GrainCorp received a total of 12 million tonnes of grain,
which was slightly lower than last years 12.1 million tonnes,
and exported 6.8 million tonnes, also lower than the 7.2
million tonnes exported last year. The lower exports
contributed to a higher carryover at 30 September 2002 of
4.7 million tonnes, up from 4.4 million tonnes for the
previous year. The segmented profit for storage & handling
was $102.1 million based on revenue of $280.2 million
(2001: $263.7 million).
Marketing
For the year ended 30 September 2002, Marketing reported
a segmented profit of $7 million which was 32% higher than
the previous year’s profit of $5.3 million. This increase in
profit is a result of a significant increase in revenue from
$254.7 million to $424.2 million. The 67% increase in
revenue is due to increased trading volumes, continued
growth in market share and favourable trading conditions.
Marketing has developed close relationships with end users
of grains and improved throughput of grain through the
storage network. This is now being reflected in better overall
profitability.
Depreciation, Interest and Taxation
Increased depreciation on a higher asset base was offset by
lower borrowing costs due to a reduction in interest rates
and a lower effective tax rate.
42 GrainCorp Annual Report 2002
as at 30 September 2002 GrainCorp Limited and Controlled Entities
Statement of Financial PositionConsolidated
Consolidated
2002 2001
$’000 $’000
Current Assets
Receivables 95,949 63,748
Inventories 8,588 9,416
Other 7,991 8,611
Total Current Assets 112,528 81,775
Non-Current Assets
Receivables 83 94
Other financial assets 25,695 25,269
Property, plant & equipment 416,402 413,115
Deferred tax assets 6,381 3,319
Intangible assets 8,047 9,224
Total Non-Current Assets 456,608 451,021
Total Assets 569,136 532,796
Current Liabilities
Payables 29,469 26,141
Interest bearing liabilities 42,401 34,449
Current tax liabilities 5,274 2,091
Provisions 28,473 20,380
Total Current Liabilities 105,617 83,061
Non-Current Liabilities
Interest bearing liabilities 145,211 145,972
Deferred tax liabilities 15,884 14,926
Provisions 15,137 15,501
Total Non-Current Liabilities 176,232 176,399
Total Liabilities 281,849 259,460
Net Assets 287,287 273,336
Equity
Contributed equity 96,524 99,531
Reserves 18,430 18,430
Retained profits 172,333 154,987
Total GrainCorp Limited Interest 287,287 272,948
Outside equity interest: - 388
Total Equity 287,287 273,336
The above statement of financial position should be read in conjunction with the attached notes.
GrainCorp Annual Report 2002 43
as at 30 September 2002 GrainCorp Limited and Controlled Entities
Statement of Financial PositionDiscussion and analysis of Consolidated
Total assets increased by $36.3 million and total liabilities
increased by $22.4 million during the year ended
30 September 2002. The following key transactions were
the main movements in the balance sheet items:
Assets
• Receivables, prepayments and other current assets
increased by $31.6 million primarily due to higher
marketing activity levels;
• Increase in property, plant and equipment through capital
expenditure of $43.9 million, offset by a depreciation
charge of $40.6 million.
Liabilities
• Interest bearing liabilities required for the funding of capital
expenditure and working capital requirements increased
by $7.2 million;
• Increase in current provisions of $8.1 million is mainly due
to a higher final dividend provision. For September 2002,
final dividend declared is 44 cents per share compared to
29 cents per share at the same time last year;
• Payables and other creditors have increased moderately,
reflecting the increased size of GrainCorp’s business.
Shareholders Equity
Contributed equity reduced by $3 million for the year due to:
• Share buy-back of 0.3 million shares for $3.4 million, offset
by
• 68,000 ordinary shares issued for $0.4 million on exercise
of executive share options.
44 GrainCorp Annual Report 2002
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Statement of Cash FlowsConsolidated
Consolidated
2002 2001
$’000 $’000
Cash Flows from Operating Activities
Receipts from customers (inclusive of goods & services tax) 727,417 505,510
Payments to suppliers and employees (inclusive of goods & services tax) (636,105) (384,204)
91,312 121,306
Interest received 238 690
Borrowing costs (10,924) (11,884)
Income taxes paid (18,299) (23,998)
Net Cash Inflow / (Outflow) from Operating Activities 62,327 86,114
Cash Flows from Investing Activities
Cash acquired on merger - 4,192
Payments for property, plant and equipment (46,925) (52,311)
Purchases of investments / business (50) (25,219)
Dividends received 1,917 571
Proceeds from sale of property, plant and equipment 1,760 1,833
Loans repaid by associates 1,577 -
Cash decrease on deconsolidation of group entity 585 -
Loans from related parties - 157
Net Cash Inflow / (Outflow) from Investing Activities (41,136) (70,777)
Cash Flows from Financing Activities
Proceeds from interest bearing liabilities 97,300 55,655
Repayment of interest bearing liabilities (88,099) (1,250)
Payments for shares bought back (3,421) (10,530)
Proceeds from executive share options exercised 425 425
Purchase of Class B shares from GGA - (37,575)
Share buy-back transaction costs (11) (43)
Dividends paid (25,373) (32,211)
Net Cash Inflow / (Outflow) from Financing Activities (19,179) (25,529)
Net increase / (decrease) in cash held 2,012 (10,192)
Cash at the beginning of the financial year (10,618) (426)
Cash at the End of the Financial Year (8,606) (10,618)
The above statement of cash flows should be read in conjunction with the accompanying notes.
GrainCorp Annual Report 2002 45
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Statement of Cash FlowsDiscussion and analysis of Consolidated
Cash Flows from Operating Activities
For the year ended 30 September 2002, net cash inflow from operating activities was $62.3 million, a decrease of $23.8 million
from 2001’s net inflow of $86.1 million. The decrease is due to the higher working capital commitments of the marketing division,
which is reflected in current receivables on the statement of financial position.
Cash Flows from Investing Activities
The significant items in the net cash outflow from investing activities of $41.1 million (2001: Outflow $70.8 million) were:
$ million
Sale of property, plant and equipment 1.8
Dividends received from investments 1.9
Loans repaid by associate companies 1.6
Purchase of property, plant and equipment (46.9)
Cash Flows from Financing Activities
Net cash outflow from financing activities was $19.2 million (2001: Outflow $25.5 million). The major contributors to this years net
outflow were:
$ million
Dividends paid - 2001 final & 2002 interim (25.4)
On-market buy back of ordinary shares (3.4)
Net receipts from borrowings 9.2
46 GrainCorp Annual Report 2002
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Notes to the Consolidated Financial Statements
1.Summary of Significant Accounting Policies
This general purpose financial report has been prepared in
accordance with Accounting Standards, other authoritative
pronouncements of the Australian Accounting Standards
Board, Urgent Issues Group Consensus Views and the
Corporations Act 2001.
The principal accounting policies adopted by GrainCorp
Limited “GrainCorp” and the consolidated entity
(i.e. GrainCorp and its controlled entities GrainCorp
Services Limited “Services”, GrainCorp Operations Limited
“Operations”, GrainCorp Victoria Pty Limited “Victoria”,
GrainCorp National Pty Limited “National”, GrainCorp
Queensland Pty Limited “Queensland”, Victorian Grain
Services Limited “VGS”, Vicgrain Limited “Vicgrain”,
Vicgrain Assets Pty Limited “Assets”, Vicgrain Finance Pty
Limited “Finance”) are stated to assist the general
understanding of these statements.
Unless otherwise noted, the accounting policies adopted
are consistent with those of the previous year.
Comparative information is reclassified where appropriate
to enhance comparability. The accounts are drawn up on
historical cost principles.
New Accounting Standards
As a result of applying the revised accounting standard
AASB 1005 Segment Reporting, a number of comparative
amounts were represented or reclassified to ensure
comparability with the current accounting period.
Principles of Consolidation
The consolidated financial statements incorporate the
assets and liabilities of all entities controlled by GrainCorp
as at 30 September 2002 and the results of all controlled
entities for the year then ended. The effects of all
transactions between entities in the consolidated entity are
eliminated in full. Outside equity interests in the results
and equity of controlled entities are shown separately in
the consolidated statement of financial performance and
statement of financial position respectively.
Where control of an entity is obtained during a financial
year, its results are included in the consolidated statement
of financial performance from the date on which control
commenced. Where control of an entity ceases during a
financial year its results are included for that part of the
period during which control exists.
Investments in associates are accounted for in the
consolidated financial statements using the equity
method. Under this method, the consolidated entity’s
share of the profits or losses of associates is recognised in
the consolidated statement of financial performance, and
its share of post-acquisition movements in reserves is
recognised in consolidated reserves. The cumulative post-
acquisition movements are adjusted against the cost of
the investment. Associates are those entities over which
the consolidated entity exercises significant influence, but
not control.
GrainCorp Annual Report 2002 47
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Notes to the Consolidated Financial Statements
2.Segment InformationStorage & Marketing Intersegment Consolidation
Handling Eliminations
2002 $’000 $’000 $’000 $’000
Sales to customers outside consolidated entity 265,762 422,522 - 688,284
Intersegment sales 14,397 1,628 (16,025) -
Total sales revenue 280,159 424,150 (16,025) 688,284
Share of net (loss) of associates (90) - - (90)
Other revenue 7,888 3,834 - 11,722
Total segment revenue 287,957 427,984 (16,025) 699,916
Segment result 102,103 6,986 - 109,089
Unallocated expenses (41,297)
Profit from ordinary activities before income tax 67,792
Income tax expense (19,189)
Profit from ordinary activities after income tax 48,603
Segment assets 462,373 67,145 - 529,518
Unallocated assets 39,618
Total assets 569,136
Segment liabilities 241,150 19,541 - 260,691
Unallocated liabilities 21,158
Total liabilities 281,849
Investments in associates - - - -
Unallocated investments in associates 500
Total investments in associates 500
Acquisitions of property, plant and equipment,
intangibles and other non-current segment assets 46,855 70 - 46,925
Depreciation and amortisation expense 40,541 550 - 41,091
Net cash inflow from operating activities 98,368 (7,056) - 91,312
Unallocated cashflows (28,985)
Net cash inflow from operating activities 62,327
48 GrainCorp Annual Report 2002
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Notes to the Consolidated Financial Statements
2.Segment Information (continued)Storage & Marketing Intersegment Consolidation
Handling Eliminations
2001 $’000 $’000 $’000 $’000
Sales to customers outside consolidated entity 253,856 253,347 - 507,203
Intersegment sales 9,834 1,366 (11,200) -
Total sales revenue 263,690 254,713 (11,200) 507,203
Other revenue 10,571 1,503 - 12,074
Total segment revenue 274,261 256,216 (11,200) 519,277
Segment result 106,789 5,252 - 112,041
Unallocated expenses (47,853)
Profit from ordinary activities before income tax 64,188
Income tax expense (19,627)
Profit from ordinary activities after income tax 44,561
Segment assets 447,667 42,317 - 489,984
Unallocated assets 42,812
Total assets 532,796
Segment liabilities 233,046 9,397 - 242,443
Unallocated liabilities 17,017
Total liabilities 259,460
Investments in associates - - - -
Unallocated investments in associates 50
Total investments in associates 50
Acquisitions of property, plant and equipment,
intangibles and other non-current segment assets 51,255 56 - 51,311
Depreciation and amortisation expense 38,818 115 - 38,933
Net cash inflow from operating activities 106,754 14,552 - 121,306
Unallocated cashflows (35,192)
Net cash inflow from operating activities 86,114
GrainCorp Annual Report 2002 49
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Notes to the Consolidated Financial Statements
2.Segment Information (continued)
Notes to and forming part of the segment information:
a) The previous industry segments derive revenue from the following operations and activities:
Storage and Handling: includes fees for receival, storage and testing of wheat, other grains and bulk commodities.
Marketing: Marketing and transportation of grain and agricultural products, and the operation of grain pools.
b) Intersegment pricing is on an “arm’s length” basis.
c) The consolidated entity only operates in one geographical segment - Australia.
3.Dividends
Parent Entity
2002 2001
$’000 $’000
Ordinary shares:
Interim dividend paid of 34 cents (2001 - 43 cents)
Franked at 30% (2001 - 34%) 13,713 17,513
Final dividend proposed of 44 cents (2001 - 29 cents)
Franked at 30% (2001 - 30%) 17,632 11,655
31,345 29,168
The franked dividends proposed as at 30 September 2002 will be paid out of existing franking credits or out of franking credits
arising from the payment of income tax in the year ending 30 September 2003.
Consolidated Parent Entity
2002 2001 2002 2001
$’000 $’000 $’000 $’000
Franking credits available
for the subsequent financial year 29,339 22,901 8,353 9,391
Note: The comparative for franking credits available for the subsequent financial year has been restated to reflect the changes that
took place to the dividend imputation system effective from 1 July 2002, introduced by the New Business Tax System (Imputation)
Bill 2002.
The above amounts represent the balances of the franking accounts as at the end of the financial year, adjusted for:
(a) franking credits that will arise from the payment of income tax payable as at the end of the year;
(b) franking debits that will arise from the payment of dividends proposed as at the end of the financial year; and
(c) franking credits that may be prevented from being distributed in the subsequent financial year.
50 GrainCorp Annual Report 2002
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Notes to the Consolidated Financial Statements
4. Earnings Per Share
Consolidated
2002 2001
Cents Cents
Basic earnings per share 121.2 109.4
Diluted earnings per share 118.2 109.0
Weighted average number of ordinary shares used as the
denominator in the calculation of basic earnings per share. 40,174,806 40,756,968
Weighted average number of ordinary shares and potential ordinary shares
used as the denominator in the calculation of diluted earnings per share. 41,202,806 40,912,968
5. Financial Instruments
GrainCorp and its controlled entities are parties to
derivative financial instruments with associated risk in the
normal course of business in order to hedge exposure to
fluctuations in commodity prices, foreign exchange and
interest rates. Their use is subject to a comprehensive set
of policies, procedures and limits approved by the Board
of Directors.
(a) Commodity Price Risk
The consolidated entity is exposed to grain price
fluctuations through its grain trading activities. To hedge
this commodity price risk, the consolidated entity has
entered into grain commodity futures contracts and grain
commodity options contracts with terms between 2 and
16 months depending on the underlying transactions.
At balance date, net outstanding commodity futures
contracts had a fair value of $189,122,792 (2001 -
$81,038,256) with various maturities up to December
2003. If settled at balance date, these contracts would
have resulted in a net loss of $10,279,000 (2001 - $58,882)
which is offset by an unrecognised net gain on the
underlying transactions being hedged.
Commodity sold and bought options are marked to
market at each balance date. These options with
maturities up to April 2003, if closed out at balance date,
would have resulted in a net gain of $1,088,873 (2001 -
$2,453,113) which may be offset by an unrecognised net
loss on the underlying transactions being hedged.
(b) Foreign Exchange Risk
The consolidated entity hedges against exposures from
grain futures taken in the US, Canada and Europe. When
required to, hedging is undertaken through transactions
entered into in foreign exchange markets. Forward
exchange contracts and currency option contracts have
been used for hedging purposes. The contracts are timed
to mature when the grain futures expire.
GrainCorp Annual Report 2002 51
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Notes to the Consolidated Financial Statements
5. Financial Instruments (continued)
At balance date, the outstanding foreign exchange contracts are (Australian Dollar equivalent).
2002 2002 Average 2001 2001 Average
A$’000 Exchange A$’000 Exchange
Rate Rate
Buy US Dollars / Sell Australian Dollars
0 - 6 months 41,527 0.5419 1,120 0.5594
6-12 months 955 0.5016 15,563 0.5005
12-18 months - - 883 0.4972
Buy Australian Dollars / Sell US Dollars
0 - 6 months 86,038 0.5396 66,839 0.5326
6-12 months 8,008 0.5370 4,316 0.5097
12-18 months 458 0.5459 2,932 0.5115
Buy Canadian Dollars / Sell Australian Dollars
0 - 6 months 349 0.8596 3,730 0.8071
Buy Australian Dollars / Sell Canadian Dollars
0 - 6 months 31,128 0.8327 16,277 0.7861
6-12 months - - 760 0.7899
Buy Euros / Sell Australian Dollars
0 - 6 months 1,805 0.5540 173 0.5781
Buy Australian Dollars / Sell Euros
0 - 6 months - - 244 0.5329
6-12 months - - 3,922 0.5736
12-18 months - - 1,476 0.5625
As these contracts are hedging future settlement of US, European and Canadian grain and oilseed futures, any unrealised gains or
losses on the contracts, together with the cost of the contracts, are deferred and will be recognised when the underlying
transaction occurs.
The following foreign exchange gains and losses have been deferred.
2002 2001
$’000 $’000
Unrealised gains 1,614 1,105
Unrealised losses (936) (6,839)
Net gain (loss) 678 (5,734)
52 GrainCorp Annual Report 2002
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Notes to the Consolidated Financial Statements
5. Financial Instruments (continued)
(c) Interest Rate Swap Contracts
Bank loans of the consolidated entity currently bear an
average variable interest rate of 5.42% (2001: 4.60%). It is
the consolidated entity’s policy to protect part of the loans
from exposure to increasing interest rates. Accordingly, it
has entered into interest rate swap contracts under which
the consolidated entity is entitled to receive interest at
variable rates and is obliged to pay interest at fixed rates.
The contracts require settlement of net interest receivable
or payable each 90 or 180 days. The settlement dates
coincide with the dates on which interest is payable on the
underlying debt.
Swaps currently in place cover 37% (2001: 40%) of the
total borrowings outstanding. The average fixed interest
rate is 6.81% (2001: 7.17%) and the variable rates are
between 0.30% and 0.50% (2001: 0.30% and 0.50%
respectively) above 90 or 180 day bank bill rate.
At 30 September 2002, the notional principal amounts and
periods of expiry of the interest rate swap contracts are as
follows:
2002 2001
$’000 $’000
0-1 years 25,000 5,980
2-3 years 40,000 60,000
The fair values of interest rate swaps are determined as
the difference in present value of the future interest
cashflow, amounting to a financial liability of $1,325,133
(2001: financial liability $3,659,634). GrainCorp also has a
nominal $1.5 million interest rate collar amortising until
March 2003, with an interest cap rate of 5.95% and an
interest floor rate of 4.95%.
GrainCorp Annual Report 2002 53
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Notes to the Consolidated Financial Statements
5. Financial Instruments (continued)
(d) Interest Rate Risk Exposures
The consolidated entity’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial
assets and financial liabilities is set out below:
Average Floating Fixed interest maturing in: Noninterest interest 1 year over 1 year more than interest
rate rate or less to 5 years 5 years bearing Total2002 % $’000 $’000 $’000 $’000 $’000 $’000
Financial assets
Investments 25,695 25,695
Cash and deposits -
Receivables 95,949 95,949
Interest rate collar* 5.95 1,500 1,500
Interest rate swaps* 5.41 65,000 65,000
65,000 1,500 - - 121,644 188,144
Financial liabilities
Bank overdrafts 8.45 8,606 8,606
Trade and other creditors 29,469 29,469
Bills payable 5.42 176,100 176,100
Other loans 800 800
Finance leases 7.13 195 1,911 2,106
Interest rate collar* 4.95 1,500 1,500
Interest rate swaps* 6.81 25,000 40,000 65,000
184,706 26,695 41,911 - 30,269 283,581
Net financial assets (liabilities) (95,437)
*notional principal
Average Floating Fixed interest maturing in: Noninterest interest 1 year over 1 year more than interest
rate rate or less to 5 years 5 years bearing Total2001 % $’000 $’000 $’000 $’000 $’000 $’000
Financial assets
Investment 25,269 25,269
Cash and deposits -
Receivables 63,748 63,748
Interest rate collar* 5.95 1,250 1,500 2,750
Interest rate swaps* 5.20 65,980 65,980
65,980 1,250 1,500 - 89,017 157,747
Financial liabilities
Bank overdrafts 8.45 10,618 10,618
Trade and other creditors 26,141 26,141
Bills payable 5.01 165,500 165,500
Other loans 1,205 1,205
Finance leases 7.13 826 2,272 3,098
Interest rate collar* 4.95 1,250 1,500 2,750
Interest rate swaps* 7.17 5,980 60,000 65,980
176,118 8,056 63,772 - 27,346 275,292
Net financial assets (liabilities) (117,545)
*notional principal
54 GrainCorp Annual Report 2002
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Notes to the Consolidated Financial Statements
5. Financial Instruments (continued)
Reconciliation of Net Financial Assets to Net Assets
2002 2001
$’000 $’000
Net financial assets (liabilities) as above (95,437) (117,545)
Non-financial assets and liabilities
Inventories 8,588 9,416
Property, plant and equipment 416,402 413,115
Intangibles 8,047 9,224
Other assets 14,455 12,024
Provisions (64,768) (52,898)
Other liabilities - -
Net assets per balance sheet 287,287 273,336
(e) Credit Risk
The credit risk on financial assets of the consolidated
entity which have been recognised on the statement of
financial position, other than investments in shares, is
generally the carrying amount, net of any provision for
doubtful debts.
There is potential for the current dry conditions to increase
credit risk through counterparties not being able to meet
their obligations. The consolidated entity considered this
exposure and associated provisions at balance date and
continue to monitor these risks.
6. Full Financial Report
Further financial information can be obtained from the full
financial report which is available free of charge, on
request from the company. A copy may be requested by
calling 1800 809482 (free call). Alternatively, both the full
financial report and the concise report can be accessed
via the internet at www.graincorp.com.au.
GrainCorp Annual Report 2002 55
Directors’ Declaration
The directors declare that in their opinion, the concise
financial report of the consolidated entity for the year ended
30 September 2002 as set out on pages 40 to 54 complies
with Accounting Standard AASB 1039: Concise Financial
Reports.
The financial statements and specific disclosures included in
this concise financial report have been derived from the full
financial report for the year ended 30 September 2002.
The concise financial report cannot be expected to provide
as full an understanding of the financial performance,
financial position and financing and investing activities of the
consolidated entity as the full financial report, which as
indicated in note 6, is available on request.
This declaration is made in accordance with a resolution of
the directors.
R.L. Greentree
Chairman
Sydney
4 December 2002
for the year ended 30 September 2002 GrainCorp Limited and Controlled Entities
Directors’ Declaration
56 GrainCorp Annual Report 2002
Audit Opinion
In our opinion, the concise financial report of GrainCorp
Limited for the year ended 30 September 2002, set out on
pages 40 to 55 complies with Australian Accounting
Standard AASB 1039: Concise Financial Reports.
This opinion must be read in conjunction with the following
explanation of the scope and summary of our role as auditor.
Scope and Summary of our Role
The concise financial report - responsibility and content
The preparation and content of the concise financial report
for the year ended 30 September 2002 are the responsibility
of the directors of GrainCorp Limited (the Company).
The auditor’s role and work
We conducted an independent audit of the concise financial
report in order to express an opinion on it to the members of
the Company. Our role was to conduct the audit in
accordance with Australian Auditing Standards to provide
reasonable assurance as to whether the concise financial
report is free of material misstatement.
We have also performed an independent audit of the full
financial report of the Company for the financial year ended
30 September 2002. Our audit report on the full financial
report was signed on 4 December 2002, and was not
subject to any qualification. Our audit did not involve an
analysis of the prudence of business decisions made by the
directors or management.
In conducting the audit of the concise financial report, we
carried out a number of procedures to assess whether in all
material respects the concise financial report is presented
fairly in accordance with Australian Accounting Standard
AASB 1039: Concise Financial Reports.
The procedures included:
• testing that the information included in the concise
financial report is consistent with the information in the full
financial report;
• selecting and examining evidence, on a test basis, as
required by auditing standards, to support amounts,
discussion and analysis, and other disclosures in the
concise financial report which were not directly derived
from the full financial report. We did not examine every
item of available evidence;
• reviewing the overall presentation of information in the
concise financial report.
Our audit opinion was formed on the basis of these
procedures.
Independence
As auditor, we are required to be independent of the
Company and its controlled entities and free of interests
which could be incompatible with integrity and objectivity. In
respect of this engagement, we followed the independence
requirements set out by The Institute of Chartered
Accountants in Australia, the Corporations Act 2001 and the
Auditing and Assurance Standards Board.
In addition to our statutory audit work, we were engaged to
undertake other services for the Company and its controlled
entities. In our opinion the provision of these services has
not impaired our independence.
PricewaterhouseCoopers
P J Carney
Partner
Sydney
4 December 2002
to the members of GrainCorp Limited and its Controlled Entities
Independent Audit Report
GrainCorp Annual Report 2002 57
The Shareholder information set out below was applicable as at 29 November 2002.
A. Distribution of Ordinary Shares
1 - 1,000 6,313
1,001 - 5,000 2,929
5,001 - 10,000 698
10,001 - 100,000 410
100,001 - and over 27
10,377
B. Twenty Largest Shareholders
The names of the twenty largest holders of each class of shares are listed below:
Ordinary SharesNumber of Percentage ofshares held issued shares
1. Grain Growers Association Limited 8,253,709 20.63
2. NBT Pty Ltd 1,470,823 3.68
3. DB Capital Pty Limited 595,568 1.49
4. Mr R Greentree & Mr B Harris 528,640 1.32
5. Victorian Farmers Federation Property Trust Ltd 499,967 1.25
6. UBS Warburg Private Clients 412,081 1.03
7. Janvin Pty Limited 285,168 0.71
8. Linkshore Pty Limited 278,850 0.70
9. Mr G Watsford 261,763 0.65
10. Janvin Pty Limited 250,000 0.62
11. Menegazzo Enterprises Pty Ltd 241,783 0.60
12. R & D Pastoral Pty Ltd 230,950 0.58
13. Mr P Menegazzo 227,867 0.57
14. Rupert Baroona Pty Ltd 200,000 0.50
15. Ms N Der Sarkissian 174,464 0.44
16. Mr P Cameron 173,401 0.43
17. DB Capital 163,408 0.41
18. Accounter Nominees Pty Ltd 140,000 0.35
19. J P Morgan Nominees Australia Limited 139,334 0.35
20. Mr J Menegazzo 127,583 0.32
14,655,359 37
as at 29 November 2002 GrainCorp Limited and Controlled Entities
Shareholder Information
58 GrainCorp Annual Report 2002
C. Substantial Shareholders
The following shareholder had a substantial shareholding in GrainCorp Limited shares as at 29 November 2002.
Ordinary SharesNumber of Percentage ofshares held issued shares
1 Grain Growers Association Limited 8,253,709 20.63%
D. Voting Rights
The voting rights attached to each class of shares are set out below:
(a) Ordinary shares - on a show of hands every member present in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
(b) Foundation share:
(i) No ordinary resolution can be passed without the affirmative role of the Foundation Share, except for the appointment of
elected Directors;
(ii) For a special resolution, the Foundation Share carried 75% of the total number of votes entitled to be cast.
as at 29 November 2002 GrainCorp Limited and Controlled Entities
Shareholder Information
Australian Stock Exchange
GrainCorp shares are classified under the Miscellaneous
Industrials Index (code GNC) and have been listed on the
Australian Stock Exchange (ASX) since 1998. Share prices
are reported in major daily newspapers and can be
accessed online at www.asx.com.au.
Dividend Policy
GrainCorp has a dividend payout ratio of 65 per cent.
GrainCorp Website
www.graincorp.com.au - GrainCorp’s interactive website
features the current Annual Report and full financials, plus
interim financial reports. News and corporate information is
regularly updated for shareholders. Details of Board
members and executive management team are also
provided.
Shareholder Inquiries
GrainCorp Limited shareholders requiring information
regarding their shareholdings should contact the Company’s
registry at:
Computershare Investor Services Pty Ltd
GPO Box 7045
Sydney NSW 1115
Telephone: 1300 855 080
Fax: (02) 8234 5050
GrainCorp sponsoring broker is:
ABN AMRO Morgans Limited
GPO Box 202
Brisbane QLD 4001
Telephone: 1800 777 946
Removal from Annual Report mailing list
Modernisation of annual reporting processes has meant that
some shareholders would prefer not to receive a hard copy
report. Shareholders can elect not to receive an Annual
Report (but still receive a Notice of Meeting and Proxy Form)
by contacting the share registry.
Design - The Hopkins System Pty Limited
Photography - Ted Sealey
Print Management - Intoprint
Enquiries
Nigel Hart
Company Secretary
GrainCorp Registered Office
Level 10
51 Druitt Street
Sydney NSW 2000
Postal Address:
PO Box A268
Sydney South NSW 1235
Phone: 02 9325 9100
Freecall: 1800 809 482
Fax: 02 9325 9180
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ManangatangManangatang
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RobinvaleRobinvalevava
LalbertLalbertMeatianMeatian
UltimaUltima
WaitchieWaitchie
GredgwinGredgwin
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NhillNhill
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AntwerpAntwerp
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Nyah WestNyah WestNN
PiangilPiangilPP
KooloonongKooloonongoo
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MarMar
MoolortMoolort
BerrybankBerrybank
WestmereWestmere
MurchisonMurchisonEastEast
ColbinabbinColbinabbin
YancoYanco
MurramiMurrami
ColeamballyColeambally
YarrawongaYarrawonga
DookieDookie
St JamesSt James
WarragoonWarragoonWW
WillbriggieWillbriggie
Euabalong WestEuabalong West
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MerriwaggaMerriwagga
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