Apata Limited and Group
Apata Limited and Group Apata Limited and Group
Apata Limited and Group Financial Statements for the year ended 31 March 2008 apata (annual report 2007/08) 25
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<strong>Apata</strong> <strong>Limited</strong> <strong>and</strong> <strong>Group</strong><br />
Financial Statements for the year ended 31 March 2008<br />
apata (annual report 2007/08)<br />
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apata (annual report 2007/08)<br />
26<br />
Financial statements index<br />
<strong>Apata</strong> <strong>Limited</strong> <strong>and</strong> <strong>Group</strong> :<br />
2007/08 fi nancial statements<br />
The directors are pleased to present the fi nancial statements of <strong>Apata</strong> <strong>Limited</strong> <strong>and</strong> <strong>Group</strong> for the year ended 31 March 2008.<br />
For <strong>and</strong> on behalf of the Board of Directors:<br />
D J Goodwin - Chairman P R O’Brien - Director<br />
17 July 2008 17 July 2008<br />
Balance sheet 27<br />
Income statement 27<br />
Statement of recognised income <strong>and</strong> expense 28<br />
Statement of cash fl ows 28<br />
Notes to the fi nancial statements 29<br />
Auditors’ report 44<br />
Statutory information 45
Balance sheet<br />
As at 31 March 2008<br />
Income statement<br />
Year ended 31 March 2008<br />
Note 2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Revenue from services provided 30,991,691 30,058,418 22,348,005 21,542,833<br />
Revenue from goods sold 10,315,327 10,315,327 9,340,730 9,339,027<br />
Total revenue 41,307,018 40,373,745 31,688,735 30,881,860<br />
Other income 5 - - 67,666 67,666<br />
Expenses 6 (38,587,444) (37,669,110) (29,428,873) (28,635,462)<br />
Results from operating activities 2,719,574 2,704,635 2,327,528 2,314,064<br />
Finance income 7 231,167 190,878 231,563 193,263<br />
Finance expenses 7 (616,711) (616,711) (309,752) (309,752)<br />
Net finance cost 7 (385,544) (425,833) (78,189) (116,489)<br />
Profit before income tax 2,334,030 2,278,802 2,249,339 2,197,575<br />
Income tax expense 8 (782,818) (764,593) (752,895) (735,813)<br />
Profit for the year 1,551,212 1,514,209 1,496,444 1,461,762<br />
The notes on pages 29 to 43 are an integral part of these financial statements.<br />
Note 2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Assets<br />
Property, plant <strong>and</strong> equipment 9 13,343,692 13,343,692 11,890,810 11,890,810<br />
Deferred tax assets 14 37,359 37,359 – –<br />
Investments 10 130,632 130,732 63,078 63,178<br />
Total non-current assets 13,511,683 13,511,783 11,953,888 11,953,988<br />
Inventories 11 2,289,474 2,289,474 1,836,708 1,836,708<br />
Trade <strong>and</strong> other receivables 12 3,362,433 3,209,270 1,110,120 1,471,929<br />
Cash <strong>and</strong> cash equivalents 13 1,073,290 845,194 1,035,717 434,121<br />
Current tax assets – – 65,721 65,450<br />
Total current assets 6,725,197 6,343,938 4,048,266 3,808,208<br />
Total assets 20,236,880 19,855,721 16,002,154 15,762,196<br />
Equity<br />
Paid in share capital 15 5,466,006 5,466,006 5,390,216 5,390,216<br />
Reserves 15 171,668 171,668 140,204 140,204<br />
Retained earnings 15 3,486,467 3,325,621 2,686,114 2,562,271<br />
Total equity 9,124,141 8,963,295 8,216,534 8,092,691<br />
Liabilities<br />
Loans <strong>and</strong> borrowings 16 5,900,000 5,900,000 3,200,000 3,200,000<br />
Deferred tax liabilities 14 – – 71,122 71,122<br />
Total non-current liabilities 5,900,000 5,900,000 3,271,122 3,271,122<br />
Employee benefits 17 598,325 598,325 279,828 279,828<br />
Trade <strong>and</strong> other payables 18 4,567,853 4,347,180 4,234,670 4,118,555<br />
Current tax liabilities 15,189 15,549 – –<br />
Derivatives 31,372 31,372 – –<br />
Total current liabilities 5,212,739 4,992,426 4,514,498 4,398,383<br />
Total liabilities 11,112,739 10,892,426 7,785,620 7,669,505<br />
Total equity <strong>and</strong> liabilities 20,236,880 19,855,721 16,002,154 15,762,196<br />
The notes on pages 29 to 43 are an integral part of these financial statements.<br />
apata (annual report 2007/08)<br />
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apata (annual report 2007/08)<br />
28<br />
Statement of recognised income <strong>and</strong> expense<br />
Year ended 31 March 2008<br />
Statement of cash flows<br />
Year ended 31 March 2008<br />
Note 2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Cash flows from operating activities<br />
Cash receipts from customers 39,690,319 39,042,933 32,814,831 31,665,130<br />
Cash paid to suppliers <strong>and</strong> employees (36,063,565) (35,020,703) (28,415,502) (27,762,039)<br />
Dividend received 32,175 32,175 20,122 20,122<br />
Interest received 198,938 158,649 210,131 171,831<br />
Interest paid (569,825) (569,825) (320,965) (320,965)<br />
Income tax paid 8 (810,387) (792,074) (898,147) (881,003)<br />
Net cash from operating activities 23 2,477,655 2,851,155 3,410,470 2,893,076<br />
Cash flows from investing activities<br />
Proceeds from sale of property, plant <strong>and</strong> equipment 9,500 9,500 67,666 67,666<br />
Acquisition of property, plant <strong>and</strong> equipment (4,438,477) (4,438,477) (2,080,312) (2,080,312)<br />
Acquisition of investments 10 (67,500) (67,500) – –<br />
Net cash from/(used in) investing activities (4,496,477) (4,496,477) (2,012,646) (2,012,646)<br />
Cash flows from financing activities<br />
Treasury stock purchased 15 (374,405) (374,405) (377,221) (377,221)<br />
Proceeds from sale of treasury stock 15 481,251 481,251 444,059 444,059<br />
Proceeds from issue of share capital 15 408 408 5,309 5,309<br />
Proceeds from borrowing 16 3,700,000 3,700,000 – –<br />
Repayment of borrowings 16 (1,000,000) (1,000,000) (600,000) (600,000)<br />
Dividends paid 15 (750,859) (750,859) (693,615) (693,615)<br />
Net cash from/(used in) financing activities 2,056,395 2,056,395 (1,221,468) (1,221,468)<br />
Net increase / (decrease) in cash <strong>and</strong> cash equivalents 37,573 411,073 176,356 (341,038)<br />
Cash <strong>and</strong> cash equivalents at 1 April 1,035,717 434,121 859,361 775,159<br />
Cash <strong>and</strong> cash equivalents at 31 March 13 1,073,290 845,194 1,035,717 434,121<br />
The notes on pages 29 to 43 are an integral part of these financial statements.<br />
Note 2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Profit for the year 1,551,212 1,514,209 1,496,444 1,461,762<br />
Total recognised income <strong>and</strong> expense for the year 1,551,212 1,514,209 1,496,444 1,461,762<br />
The notes on pages 29 to 43 are an integral part of these financial statements.
Notes to the financial statements (year ended 31 March 2008)<br />
Note 1 : Reporting entity<br />
<strong>Apata</strong> <strong>Limited</strong> (the “<strong>Group</strong>”) is a <strong>Group</strong> domiciled in New<br />
Zeal<strong>and</strong>, registered under the Companies Act 1993. The <strong>Group</strong><br />
is an issuer in terms of the Financial Reporting Act 1993.<br />
Note 2 : Basis of preparation<br />
(a) Statement of compliance<br />
The financial statements have been prepared in accordance<br />
with New Zeal<strong>and</strong> Generally Accepted Accounting Practice<br />
(“NZ GAAP”). The financial statements comply with New<br />
Zeal<strong>and</strong> Equivalents to International Financial Reporting<br />
St<strong>and</strong>ards (“NZ IFRS”), <strong>and</strong> other applicable Financial<br />
Reporting St<strong>and</strong>ards, as appropriate for profit–oriented<br />
entities. Compliance with NZ IFRS ensures that the<br />
financial statements also comply with International Financial<br />
Reporting St<strong>and</strong>ards (“IFRS”). The financial statements<br />
are the <strong>Group</strong>’s first NZ IFRS financial statements <strong>and</strong> NZ<br />
IFRS 1 First Time Adoption of New Zeal<strong>and</strong> Equivalents<br />
to International Reporting St<strong>and</strong>ards has been applied.<br />
The financial statements were approved by the Board of<br />
Directors on 17 July 2008.<br />
(b) Basis of measurement<br />
The financial statements have been prepared on the historical<br />
cost basis except for certain items recognised at fair value<br />
discussed further in note 4.<br />
(c) Functional <strong>and</strong> presentation currency<br />
These financial statements are presented in New Zeal<strong>and</strong><br />
dollars ($) rounded to the nearest dollar, which is the <strong>Group</strong>’s<br />
functional currency.<br />
Note 3 : Significant accounting policies<br />
The financial statements presented are those of <strong>Apata</strong> <strong>Limited</strong> <strong>and</strong><br />
its wholly owned subsidiary (collectively “the <strong>Group</strong>”) as at <strong>and</strong> for<br />
the year ended 31 March 2008. The <strong>Group</strong> is primarily involved in<br />
the packing <strong>and</strong> coolstorage of kiwifruit <strong>and</strong> avocados.<br />
(d) Use of estimates <strong>and</strong> judgements<br />
The preparation of financial statements requires management<br />
to make judgements, estimates <strong>and</strong> assumptions that affect<br />
the application of accounting policies <strong>and</strong> the reported<br />
amounts of assets, liabilities, income <strong>and</strong> expenses. Actual<br />
results may differ from these estimates.<br />
Estimates <strong>and</strong> underlying assumptions are reviewed on<br />
an ongoing basis. Revisions to accounting estimates are<br />
recognised in the period in which the estimate is revised<br />
<strong>and</strong> in any future periods affected. In particular, information<br />
about significant areas of estimation uncertainty in applying<br />
accounting policies that have the most significant effect<br />
on the amount recognised in the financial statements are<br />
described in the following notes:<br />
– Note 4 – valuation of financial instruments<br />
– Note 12 – other trade receivables<br />
Management have made judgements in relation to the<br />
application of NZ IFRS. These are set out in note 26 to the<br />
financial statements.<br />
The accounting policies set out below have been applied consistently to all years presented in these financial statements, including in<br />
the preparation of the opening NZ IFRS balance sheet at 1 April 2006 for the purpose of transition to NZ IFRS.<br />
a) Basis of consolidation<br />
(i) Subsidiaries<br />
Subsidiaries are entities controlled by the <strong>Group</strong>.<br />
Control exists when the <strong>Group</strong> has the power to govern<br />
the financial <strong>and</strong> operating policies of an entity so as to<br />
obtain benefits from its activities. In assessing control,<br />
potential voting rights that presently are exercisable<br />
are taken into account. The financial statements of<br />
subsidiaries are included in the consolidated financial<br />
statements from the date that control commences until<br />
the date that control ceases.<br />
(ii) Transactions eliminated on consolidation<br />
Intra–group balances, transactions <strong>and</strong> any unrealised<br />
income <strong>and</strong> expenses arising from intra–group transactions,<br />
are eliminated in preparing the consolidated financial<br />
statements. Unrealised gains arising from transactions<br />
with equity accounted investees are eliminated to the<br />
extent of the <strong>Group</strong>’s interest in the entity.<br />
(iii) Business combinations<br />
The purchase method of accounting is used to account for<br />
all business combinations, including business combinations<br />
involving entities or businesses under common control,<br />
regardless of whether equity instruments or other assets<br />
are acquired. Cost is measured as the fair value of the<br />
assets given <strong>and</strong> shares issued at the date of exchange<br />
plus costs directly attributable to the acquisition. Where<br />
equity instruments are issued in an acquisition, these are<br />
measured at the fair value.<br />
Identifiable assets acquired <strong>and</strong> liabilities <strong>and</strong> contingent<br />
liabilities assumed in a business combination are<br />
measured initially at their fair values at the acquisition<br />
date. The excess of the cost of acquisition over the fair<br />
value of the identifiable net assets acquired is recorded<br />
as goodwill. If the cost of acquisition is less than the<br />
fair value of the identifiable net assets of the subsidiary<br />
acquired, the difference is recognised directly in the<br />
income statement.<br />
apata (annual report 2007/08)<br />
29
Notes to the financial statements (year ended 31 March 2008)<br />
apata (annual report 2007/08)<br />
30<br />
(b) Financial instruments<br />
The <strong>Group</strong> classifies its financial instruments in the following<br />
categories: fair value through profit <strong>and</strong> loss, available for sale,<br />
loans <strong>and</strong> receivables <strong>and</strong> other. The classification depends<br />
on the purpose for which the instruments were acquired.<br />
Management determines the classification at initial recognition<br />
<strong>and</strong> re–evaluates this designation at each reporting date.<br />
(i) Non-derivative financial instruments<br />
Non–derivative financial instruments comprise<br />
investments in equity securities, trade <strong>and</strong> other<br />
receivables, cash <strong>and</strong> cash equivalents, loans <strong>and</strong><br />
borrowings, <strong>and</strong> trade <strong>and</strong> other payables.<br />
Cash <strong>and</strong> cash equivalents comprise cash balances <strong>and</strong> call<br />
deposits. Bank overdrafts that are repayable on dem<strong>and</strong><br />
<strong>and</strong> form an integral part of the <strong>Group</strong>’s cash management<br />
are included as a component of cash <strong>and</strong> cash equivalents<br />
for the purpose of the statement of cash flows.<br />
Accounting for finance income <strong>and</strong> expense is discussed<br />
in note 3(k).<br />
Non–derivative financial instruments are recognised<br />
initially at fair value. Subsequent to initial recognition<br />
non–derivative financial instruments are measured as<br />
described below.<br />
Available–for–sale financial assets<br />
The <strong>Group</strong>’s investments in equity securities are classified<br />
as available–for–sale financial assets. Subsequent to<br />
initial recognition, they are measured at fair value <strong>and</strong><br />
the changes therein are recognised directly in equity.<br />
When an investment is derecognised, the cumulative<br />
gain or loss in equity is transferred to profit <strong>and</strong> loss.<br />
Where there is no active market for the equity instrument<br />
<strong>and</strong> their fair value cannot be reliably measured, the<br />
instrument is measured at cost.<br />
Other<br />
Other non–derivative financial instruments are measured<br />
at amortised cost using the effective interest method,<br />
less any impairment losses.<br />
Trade <strong>and</strong> other receivables<br />
Trade <strong>and</strong> other receivables are stated at their cost less<br />
impairment losses.<br />
Loans <strong>and</strong> borrowings<br />
Loans <strong>and</strong> borrowings are classified as other non–<br />
derivative financial instruments.<br />
Trade <strong>and</strong> other payables<br />
Trade <strong>and</strong> other payables are stated at cost.<br />
(ii) Derivative financial instruments<br />
The <strong>Group</strong> uses derivative financial instruments to hedge<br />
its exposure to interest rate risks arising from financing<br />
activities. The <strong>Group</strong> does not hold or issue derivative<br />
financial instruments for trading purposes. However,<br />
derivatives are accounted for as trading instruments.<br />
Derivative financial instruments are recognised initially at<br />
fair value <strong>and</strong> transaction costs are expensed immediately.<br />
Subsequent to initial recognition, derivative financial<br />
instruments are stated at fair value. The gain or loss on<br />
remeasurement to fair value is recognised immediately<br />
in the income statement.<br />
(c) Share capital<br />
Share capital is classified as equity as it is redeemable only at the<br />
Company’s option, <strong>and</strong> dividends are discretionary. Dividends<br />
thereon are recognised as distributions within equity.<br />
When share capital recognised as equity is repurchased,<br />
the amount of the consideration paid, including directly<br />
attributable costs, is recognised as a deduction from equity.<br />
Repurchased shares are classified as treasury shares <strong>and</strong> are<br />
presented as a deduction from paid in share capital.<br />
(d) Property, plant <strong>and</strong> equipment<br />
(i) Recognition <strong>and</strong> measurement<br />
Items of property, plant <strong>and</strong> equipment are<br />
measured at cost less accumulated depreciation <strong>and</strong><br />
impairment losses.<br />
Cost includes expenditures that are directly attributable to<br />
the acquisition of the asset. The cost of self–constructed<br />
assets includes the cost of materials <strong>and</strong> direct labour,<br />
any other costs directly attributable to bringing the asset<br />
to a working condition for its intended use, <strong>and</strong> the costs<br />
of dismantling <strong>and</strong> removing the items <strong>and</strong> restoring the<br />
site on which they are located. Purchased software that<br />
is integral to the functionality of the related equipment<br />
is capitalised as part of that equipment.<br />
When parts of an item of property, plant <strong>and</strong> equipment<br />
have different useful lives, they are accounted for as<br />
separate items (major components) of property, plant<br />
<strong>and</strong> equipment.<br />
(ii) Subsequent costs<br />
The cost of replacing part of an item of property, plant<br />
<strong>and</strong> equipment is recognised in the carrying amount<br />
of the item if it is probable that the future economic<br />
benefits embodied within the part will flow to the <strong>Group</strong><br />
<strong>and</strong> its cost can be measured reliably. The costs of the<br />
day–to–day servicing of property, plant <strong>and</strong> equipment<br />
are recognised in the income statement as incurred.<br />
(iii) Depreciation<br />
Depreciation is recognised in the income statement on<br />
a straight–line basis over the estimated useful life for<br />
buildings <strong>and</strong> on diminishing value over the estimated<br />
useful lives for all other items. L<strong>and</strong> is not depreciated.<br />
The estimated useful lives for the current <strong>and</strong> comparative<br />
years are as follows:<br />
– buildings 10 - 50 years<br />
– plant <strong>and</strong> equipment 5 – 15 years<br />
– vehicles 5 – 15 years<br />
– office equipment <strong>and</strong> furniture 3 – 20 years<br />
Depreciation methods, useful lives <strong>and</strong> residual values<br />
are reassessed at each reporting date.
(e) Leased assets<br />
Leases in terms of which the <strong>Group</strong> assumes substantially all<br />
the risks <strong>and</strong> rewards of ownership are classified as finance<br />
leases. Upon initial recognition the leased asset is measured<br />
at an amount equal to the lower of its fair value <strong>and</strong> the<br />
present value of the minimum lease payments. Subsequent<br />
to initial recognition, the asset is accounted for in accordance<br />
with the accounting policy applicable to that asset.<br />
Other leases are operating leases <strong>and</strong> the leased assets are<br />
not recognised on the <strong>Group</strong>’s balance sheet.<br />
(f) Inventories<br />
Inventories are measured at the lower of cost <strong>and</strong> net<br />
realisable value. The cost of inventories is based on the first–<br />
in first–out principle, <strong>and</strong> includes expenditure incurred in<br />
acquiring the inventories <strong>and</strong> bringing them to their existing<br />
location <strong>and</strong> condition. Net realisable value is the estimated<br />
selling price in the ordinary course of business, less the<br />
estimated costs of completion <strong>and</strong> selling expenses.<br />
(g) Employee Benefits<br />
(i) Short-term benefits<br />
Short–term employee benefit obligations are measured<br />
on an undiscounted basis <strong>and</strong> are expensed as the<br />
related service is provided.<br />
(h) Impairment<br />
The carrying amounts of the <strong>Group</strong>’s assets are reviewed<br />
at each reporting date to determine whether there is any<br />
objective evidence of impairment.<br />
An impairment loss is recognised whenever the carrying<br />
amount of an asset exceeds its recoverable amount.<br />
Impairment losses directly reduce the carrying amount of<br />
assets <strong>and</strong> are recognised in the income statement.<br />
(i) Impairment of trade & other receivables<br />
The recoverable amount of the <strong>Group</strong>’s receivables<br />
carried at amortised cost is calculated as the present value<br />
of estimated future cash flows, discounted at the original<br />
effective interest rate (i.e., the effective interest rate<br />
computed at initial recognition of these financial assets).<br />
Receivables with a short duration are not discounted.<br />
Impairment losses on an individual basis are determined<br />
by an evaluation of the exposures on an instrument by<br />
instrument basis. All individual instruments that are<br />
considered significant are subject to this approach.<br />
(ii) Non-financial assets<br />
The carrying amounts of the <strong>Group</strong>’s non–financial<br />
assets, other than inventories <strong>and</strong> deferred tax assets, are<br />
reviewed at each reporting date to determine whether<br />
there is any indication of impairment. If any such indication<br />
exists then the asset’s recoverable amount is estimated.<br />
The recoverable amount of an asset is the greater of<br />
its value in use <strong>and</strong> its fair value less costs to sell. In<br />
assessing value in use, the estimated future cash flows<br />
are discounted to their present value using a discount<br />
rate that reflects current market assessments of the time<br />
value of money <strong>and</strong> the risks specific to the asset.<br />
Impairment losses recognised in prior periods are<br />
assessed at each reporting date for any indications<br />
that the loss has decreased or no longer exists. An<br />
impairment loss is reversed if there has been a change<br />
in the estimates used to determine the recoverable<br />
amount. An impairment loss is reversed only to the<br />
extent that the asset’s carrying amount does not exceed<br />
the carrying amount that would have been determined,<br />
net of depreciation or amortisation, if no impairment<br />
loss had been recognised.<br />
(i) Revenue<br />
(i) Services<br />
Revenue from services rendered is recognised in<br />
the income statement in proportion to the stage of<br />
completion of the transaction at each reporting date.<br />
(ii) Goods sold<br />
Revenue from the sale of goods is measured at the fair<br />
value of the consideration received or receivable, net of<br />
returns <strong>and</strong> allowances. Revenue is recognised when<br />
the significant risks <strong>and</strong> rewards of ownership have been<br />
transferred to the buyer, recovery of the consideration<br />
is probable, the associated costs <strong>and</strong> possible return<br />
of goods can be estimated reliably, <strong>and</strong> there is no<br />
continuing management involvement with the goods.<br />
(iii) Agency relationship<br />
When the <strong>Group</strong> acts in the capacity of an agent rather<br />
than as the principal in a transaction, the revenue<br />
recognised is the net amount receivable from services<br />
provided by the <strong>Group</strong>.<br />
<strong>Apata</strong> Suppliers <strong>Limited</strong> has the ultimate contract to<br />
supply Zespri with kiwifruit. <strong>Apata</strong> Suppliers <strong>Limited</strong> also<br />
arrange the logistics services <strong>and</strong> receive revenue for this<br />
service performed on behalf of growers (via SouthLink<br />
<strong>Limited</strong>). On the basis that <strong>Apata</strong> Suppliers <strong>Limited</strong><br />
is acting only as agent, <strong>and</strong> not owner of the fruit, the<br />
receipts <strong>and</strong> payments are not reflected as revenue <strong>and</strong><br />
expenses, <strong>and</strong> instead treated as ‘pass–through’ money,<br />
having no impact on financial performance. Accordingly<br />
those receipts in respect of payments to growers are<br />
excluded from the income statement <strong>and</strong> the statement<br />
of cash flows.<br />
(j) Lease payments<br />
Payments made under operating leases are recognised in the<br />
income statement on a straight–line basis over the term of the<br />
lease. Lease incentives received are recognised as an integral<br />
part of the total lease expense, over the term of the lease.<br />
(k) Finance income <strong>and</strong> expenses<br />
Finance income comprises interest income on funds invested<br />
<strong>and</strong> dividend income. Interest income is recognised as it<br />
accrues, using the effective interest method. Dividend<br />
income is recognised on the date that the <strong>Group</strong>’s right to<br />
receive payment is established.<br />
Finance expenses comprise interest expense on borrowings<br />
<strong>and</strong> changes in derivatives designated at fair value through<br />
profit <strong>and</strong> loss. All borrowing costs are recognised in the<br />
income statement using the effective interest method.<br />
apata (annual report 2007/08)<br />
31
Notes to the financial statements (year ended 31 March 2008)<br />
apata (annual report 2007/08)<br />
32<br />
(l) Income tax expense<br />
Income tax expense comprises current <strong>and</strong> deferred tax.<br />
Income tax expense is recognised in the income statement<br />
except to the extent that it relates to items recognised<br />
directly in equity, in which case it is recognised in equity.<br />
Current tax is the expected tax payable on the taxable<br />
income for the year, using tax rates enacted or substantively<br />
enacted at the reporting date, <strong>and</strong> any adjustment to tax<br />
payable in respect of previous years.<br />
Deferred tax is recognised using the balance sheet method,<br />
providing for temporary differences between the carrying<br />
amounts of assets <strong>and</strong> liabilities for financial reporting<br />
purposes <strong>and</strong> the amounts used for taxation purposes.<br />
Deferred tax is not recognised for the initial recognition<br />
of assets or liabilities in a transaction that is not a business<br />
combination <strong>and</strong> that affects neither accounting nor taxable<br />
profit. Deferred tax is measured at the tax rates that are<br />
expected to be applied to the temporary differences when<br />
they reverse, based on the laws that have been enacted or<br />
substantively enacted by the reporting date.<br />
A deferred tax asset is recognised to the extent that it is<br />
probable that future taxable profits will be available against<br />
which temporary difference can be utilised. Deferred tax<br />
assets are reviewed at each reporting date <strong>and</strong> are reduced<br />
to the extent that it is no longer probable that the related<br />
tax benefit will be realised.<br />
(m) Segment reporting<br />
A segment is a distinguishable component of the <strong>Group</strong> that<br />
is engaged either in providing related products or services<br />
(business segment), or in providing products or services<br />
within a particular economic environment (geographical<br />
segment), which is subject to risks <strong>and</strong> rewards that are<br />
different from those of other segments. The <strong>Group</strong> operates<br />
in one geographical area, New Zeal<strong>and</strong>, <strong>and</strong> operates in<br />
one significant business segment, post–harvest operations,<br />
engaged in providing packing, storage <strong>and</strong> logistics services<br />
to the kiwifruit <strong>and</strong> avocado industries.<br />
(n) New st<strong>and</strong>ards adopted <strong>and</strong> interpretations not yet<br />
adopted<br />
A number of new st<strong>and</strong>ards <strong>and</strong> interpretations are not<br />
yet effective for the year ended 31 March 2008, <strong>and</strong> have<br />
not been applied in preparing these financial statements.<br />
Those relevant to the <strong>Group</strong> are:<br />
• NZ IAS 1 - Presentation of financial statements (revised).<br />
Approved: November 2007. Effective 1 January 2009.<br />
The revised st<strong>and</strong>ard introduces “total comprehensive<br />
income”, <strong>and</strong> a “Statements of Comprehensive Income”.<br />
All non–owner changes in equity are presented in one<br />
statement (i.e. a Statements of Comprehensive Income)<br />
or two statements (i.e. an Income statements <strong>and</strong> a<br />
Statement of Comprehensive Income). The revised<br />
st<strong>and</strong>ard also prohibits presenting components of<br />
comprehensive income in the Statements of Changes<br />
in Equity. This will result in revised disclosure, but does<br />
not affect recognition or measurement of any balances<br />
within the financial statements.<br />
• NZ IFRS 8 - Operating Segments replaces NZ IAS<br />
14 Segment Reporting <strong>and</strong> changes how operating<br />
segments are defined <strong>and</strong> how their results are disclosed<br />
in the notes to the financial statements. This revised<br />
st<strong>and</strong>ard will be effective for annual reporting periods<br />
beginning on or after 1 January 2009 <strong>and</strong> is not expected<br />
to have any impact on the consolidated financial results.<br />
The <strong>Group</strong> has not yet determined if there are additional<br />
disclosure requirements.<br />
• NZ IAS 27 – Consolidated <strong>and</strong> Separate Financial<br />
Statements (revised). Effective 1 January 2009. The<br />
amendments relate mainly to changes in the accounting<br />
for non–controlled interest <strong>and</strong> loss of control of a<br />
subsidiary. The <strong>Group</strong> has not yet determined the effect<br />
of these changes, if any.<br />
There are a number of other st<strong>and</strong>ards <strong>and</strong> interpretations<br />
which are not yet effective <strong>and</strong> management consider they<br />
will have no impact on the <strong>Group</strong>.<br />
The non relevant st<strong>and</strong>ards <strong>and</strong> interpretations are:<br />
NZ IFRS 2 – Amendments to Share Based Payments<br />
NZ IFRS 3 – Business Combinations<br />
NZ IFRS 4 – Insurance Contracts<br />
NZ IAS 23 – Borrowing Costs<br />
NZ IAS 32 – Amendment to Puttable Instruments<br />
<strong>and</strong> obligations arising on liquidation<br />
NZ IFRIC 12 – Service Concession Arrangements<br />
NZ IFRIC 13 – Customer Loyalty Programmes
Note 4 : Determination of fair values<br />
A number of the <strong>Group</strong>’s accounting policies <strong>and</strong> disclosures<br />
require the determination of fair value, for both financial <strong>and</strong><br />
non–financial assets <strong>and</strong> liabilities. Fair values have been<br />
determined for measurement <strong>and</strong>/or disclosure purposes based<br />
on the following methods.<br />
Where applicable, further information about the assumptions<br />
made in determining fair values is disclosed in the notes specific<br />
to that asset or liability.<br />
(a) Non-derivative financial liabilities<br />
Fair value, which is determined for disclosure purposes, is<br />
calculated based on the present value of future principal<br />
<strong>and</strong> interest cash flows, discounted at the market rate of<br />
interest at the reporting date.<br />
Note 5 : Other income<br />
(b) Available-for-sale financial assets<br />
The fair value of available–for–sale financial assets is<br />
determined by reference to their quoted bid price at the<br />
reporting date, if available, or otherwise by reference to<br />
other market information. Where there is no active market<br />
for the equity instrument <strong>and</strong> their fair value cannot be<br />
reliably measured, the instrument is measured at cost.<br />
(c) Derivative financial instruments<br />
The fair value of interest rate swaps is based on broker<br />
quotes. Those quotes are tested for reasonableness by<br />
discounting estimated future cash flows based on the terms<br />
of maturity for each contract <strong>and</strong> using market interest rates<br />
for a similar instrument at the measurement date.<br />
2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Net gain on sale of property, plant & equipment – – 67,666 67,666<br />
Note 6 : Expenses<br />
The following items are included in expenses:<br />
Note 7 : Finance income <strong>and</strong> expense<br />
2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Operating materials <strong>and</strong> services 22,609,751 21,691,417 18,794,620 18,001,209<br />
Employee benefits expense 12,488,843 12,488,843 7,895,803 7,895,803<br />
Operating lease expenses 1,746,031 1,746,031 1,278,600 1,278,600<br />
Auditor’s remuneration to KPMG 28,503 28,503 24,007 24,007<br />
Other services provided by KPMG for transition to IFRS 4,500 4,500 – –<br />
Directors fees 94,750 94,750 109,250 109,250<br />
Depreciation 1,596,799 1,596,799 1,326,458 1,326,458<br />
Loss on sale of property, plant <strong>and</strong> equipment 18,267 18,267 135 135<br />
38,587,444 37,669,110 29,428,873 28,635,462<br />
Shareholder rebates of $288,499 (2007: $235,053) have been offset against revenue, in accordance with IAS 18.<br />
2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Interest income on bank deposits 198,938 158,649 210,131 171,831<br />
Dividends received 32,229 32,229 21,432 21,432<br />
Finance income 231,167 190,878 231,563 193,263<br />
Net change in the value of derivative 31,372 31,372 – –<br />
financial instruments<br />
Interest expense on financial liabilities 585,339 585,339 309,752 309,752<br />
measured at amortised cost<br />
Finance expense 616,711 616,711 309,752 309,752<br />
Net finance costs (385,544) (425,833) (78,189) (116,489)<br />
apata (annual report 2007/08)<br />
33
Notes to the financial statements (year ended 31 March 2008)<br />
apata (annual report 2007/08)<br />
34<br />
Note 8 : Income tax expense in the income statement<br />
2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Current period tax expense 891,299 873,074 794,553 777,471<br />
Deferred tax expense<br />
Origination <strong>and</strong> reversal of temporary differences (112,217) (112,217) (41,658) (41,658)<br />
Adjustment to deferred tax arising from change in tax rate 3,736 3,736 – –<br />
(108,481) (108,481) (41,658) (41,658)<br />
Total income tax expense 782,818 764,593 752,895 735,813<br />
On 17 May 2007 the Government announced a reduction in the tax rate for Companies, from 33% down to 30%, enacted in the Taxation<br />
(Kiwisaver <strong>and</strong> Company Tax Amendments) Act 2007. The reduced rate will be effective for the <strong>Group</strong> from the financial year beginning<br />
on 1 April 2008, <strong>and</strong> has been applied to deferred tax expense.<br />
Reconciliation of effective tax rate 2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Profit before income tax 2,334,030 2,278,802 2,249,339 2,197,575<br />
Income tax using the <strong>Group</strong>’s domestic tax rate 770,230 752,005 742,282 725,200<br />
Non–deductible expenses<br />
Non–deductable/assessable items 19,488 19,488 17,686 17,686<br />
Adjustment for imputation credits of net dividends received (10,636) (10,636) (7,073) (7,073)<br />
Adjustment to deferred tax arising from change in tax rate 3,736 3,736 – –<br />
782,818 764,593 752,895 735,813<br />
Imputation credits 2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Imputation credits at 1 April 1,941,998 1,880,307 1,374,926 1,330,379<br />
Tax payments, net of refunds 810,387 792,074 898,147 881,003<br />
Imputation credits attached to dividends received 15,874 15,874 10,556 10,556<br />
Imputation credits attached to dividends paid (369,828) (369,828) (341,631) (341,631)<br />
Imputation credits at 31 March 2,398,431 2,318,427 1,941,998 1,880,307<br />
Note 9 : Property, plant <strong>and</strong> equipment (Company <strong>and</strong> <strong>Group</strong>)<br />
Plant & Office eqpmnt Total<br />
Company & <strong>Group</strong> L<strong>and</strong> Building equipment Vehicles & furniture fixed assets<br />
Balance at 1 April 2006 1,462,514 3,426,030 14,281,052 1,028,144 724,928 20,922,668<br />
Additions 7,812 449,781 1,025,514 71,572 127,883 1,682,562<br />
Disposals – – (871,170) (113,447) (45,976) (1,030,593)<br />
Balance at 31 March 2007 1,470,326 3,875,811 14,435,396 986,269 806,835 21,574,637<br />
Balance at 1 April 2007 1,470,326 3,875,811 14,435,396 986,269 806,835 21,574,637<br />
Additions 26,245 600,058 3,544,435 219,597 143,791 4,534,125<br />
Disposals – – (200,192) (100,019) (11,862) (312,073)<br />
Balance at 31 March 2008 1,496,571 4,475,869 17,779,639 1,105,847 938,764 25,796,689<br />
Depreciation<br />
Balance at 1 April 2006 – 539,515 9,471,243 830,795 397,910 11,239,463<br />
Depreciation for the year – 107,692 1,048,562 43,949 126,255 1,326,458<br />
Disposals – – (871,170) (113,447) (45,840) (1,030,457)<br />
Balance at 31 March 2007 – 647,207 9,648,635 761,297 478,325 11,535,464<br />
Balance at 1 April 2007 – 647,207 9,648,635 761,297 478,325 11,535,464<br />
Depreciation for the year – 144,829 1,222,492 74,907 154,571 1,596,799<br />
Disposals – – (172,425) (100,019) (11,862) (284,306)<br />
Balance at 31 March 2008 – 792,036 10,698,702 736,185 621,034 12,847,957<br />
Carrying amounts<br />
At 1 April 2006 1,462,514 2,886,515 4,809,809 197,349 327,018 9,683,205<br />
At 31 March 2007 1,470,326 3,228,604 4,786,761 224,972 328,510 10,039,173<br />
At 31 March 2008 1,496,571 3,683,833 7,080,937 369,662 317,730 12,948,732
Market valuation<br />
The property, plant <strong>and</strong> equipment of the <strong>Group</strong> were<br />
independently valued as at 30 September 2007 at $20,914,730.<br />
The book value at 31 March 2008 of that same group of<br />
assets, excluding additions subsequent to the valuation, was<br />
$11,858,875. The valuations were based on their market value<br />
for a going concern, <strong>and</strong> were undertaken by Property Solutions<br />
(BOP) <strong>Limited</strong> <strong>and</strong> Asset Valuations Ltd.<br />
Deemed cost<br />
As part of its transition to NZ IFRS <strong>Apata</strong> has implemented NZ<br />
IFRS–1 <strong>and</strong> deemed assets recorded at fair value to be cost<br />
on transition. Assets previously revalued in 1991 for which<br />
the valuation has been deemed to be cost on transition are<br />
included in Buildings <strong>and</strong> had a value on transition of $35,839.<br />
This amount had previously been shown in retained earnings.<br />
Fully depreciated<br />
Assets with a cost of $6,777,303 (2007: $6,509,973) are<br />
fully depreciated.<br />
Security<br />
ANZ National Bank <strong>Limited</strong> loans are secured by General<br />
Security Agreement over all present <strong>and</strong> after acquired property<br />
of the <strong>Group</strong> <strong>and</strong> by a first mortgage over <strong>Group</strong> l<strong>and</strong> <strong>and</strong><br />
buildings (see Note 16).<br />
Capital works in progress<br />
Capital works in progress represents costs incurred to balance<br />
date on capital programmes due for completion in future<br />
financial periods. Costs will be recognised as fixed assets,<br />
<strong>and</strong> depreciation will commence, immediately following<br />
commissioning of works.<br />
2008 2007<br />
Coolstore construction 290,800 1,384,367<br />
Site development works – 467,270<br />
Coolstore racking 104,160 –<br />
Total capital works in progress 394,960 1,851,637<br />
Fixed assets 12,948,732 10,039,173<br />
Total property, plant <strong>and</strong> equipment 13,343,692 11,890,810<br />
Note 10 : Investments<br />
2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Available for sale investments<br />
MG Marketing 36,478 36,478 36,424 36,424<br />
Ballance Agri–Nutrients <strong>Limited</strong> 3,321 3,321 3,321 3,321<br />
SouthLink <strong>Limited</strong> 53,333 53,333 23,333 23,333<br />
Total available for sale investments 93,132 93,132 63,078 63,078<br />
Advance to SouthLink <strong>Limited</strong> 37,500 37,500 – –<br />
Investments in subsidiaries<br />
(at cost <strong>and</strong> eliminated on consolidation)<br />
<strong>Apata</strong> Suppliers <strong>Limited</strong> – 100 – 100<br />
Total investments 130,632 130,732 63,078 63,178<br />
MG Marketing <strong>and</strong> SouthLink <strong>Limited</strong> are recorded at cost due to the fact that the fair value of these investments cannot be reliably<br />
measured with reference to an active market. An active market does not exist for these entities. Directors believe cost approximates<br />
fair value. The company does not intend to dispose of these investments in the foreseeable future.<br />
Note 11 : Inventories<br />
Invoices for packaging materials are generally subject to retention of title clauses until paid for.<br />
2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Packaging materials 2,288,758 2,288,758 1,250,011 1,250,011<br />
Orchard work in progress 716 716 258,540 258,540<br />
Work in progress – 2007 harvest – – 328,157 328,157<br />
2,289,474 2,289,474 1,836,708 1,836,708<br />
In 2008 raw materials, consumables <strong>and</strong> changes in packaging materials inventory recognised as cost of sales amounted to $7,841,701<br />
(2007: $5,946,384).<br />
apata (annual report 2007/08)<br />
35
Notes to the financial statements (year ended 31 March 2008)<br />
apata (annual report 2007/08)<br />
36<br />
Note 12 : Trade <strong>and</strong> other receivables<br />
Note 14 : Deferred tax assets <strong>and</strong> liabilities (Company <strong>and</strong> <strong>Group</strong>)<br />
Recognised deferred tax assets <strong>and</strong> liabilities<br />
Deferred tax assets <strong>and</strong> liabilities are attributable to the following:<br />
Movement in temporary differences during the year<br />
Note 2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Trade receivables due from related parties 24 294,933 294,933 208,072 208,072<br />
Other trade receivables 3,067,500 2,914,337 902,048 1,263,857<br />
3,362,433 3,209,270 1,110,120 1,471,929<br />
Other trade receivables include estimates of earnings on kiwifruit packed prior to 31 March 2008, in respect of the 2008 harvest.<br />
Such estimates were based on actual volumes packed <strong>and</strong> the terms of the Company’s st<strong>and</strong>ard contract for 2008 harvest services.<br />
Note 13 : Cash <strong>and</strong> cash equivalents<br />
2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Bank balances 340,400 112,304 1,029,303 427,707<br />
Call deposits 732,890 732,890 6,414 6,414<br />
Cash <strong>and</strong> cash equivalents in the statement of cash flows 1,073,290 845,194 1,035,717 434,121<br />
Assets Assets Liabilities Liabilities Net Net<br />
2008 2007 2008 2007 2008 2007<br />
Property, plant <strong>and</strong> equipment – – 50,510 35,257 (50,510) (35,257)<br />
Inventories – – 215 85,318 (215) (85,318)<br />
Employee Entitlements 87,463 48,971 – – 87,463 48,971<br />
Other items 621 482 – – 621 482<br />
Tax assets / (liabilities) 88,084 49,453 50,725 120,575 37,359 (71,122)<br />
Balance Recognised in Recognised Balance<br />
2008 1 April 2007 profit or loss in equity 31 March 2008<br />
Property, plant <strong>and</strong> equipment (35,257) (15,253) – (50,510)<br />
Inventories (85,318) 85,103 – (215)<br />
Employee Entitlements 48,971 38,492 – 87,463<br />
Other items 482 139 – 621<br />
(71,122) 108,481 – 37,359<br />
Balance Recognised in Recognised Balance<br />
2007 1 April 2006 profit or loss in equity 31 March 2007<br />
Property, plant <strong>and</strong> equipment (5,045) (30,212) – (35,257)<br />
Inventories (143,253) 57,935 – (85,318)<br />
Employee Entitlements 32,776 16,195 – 48,971<br />
Other items 2,742 (2,260) – 482<br />
Tax loss carry–forwards (112,780) 41,658 – (71,122)
Note 15 : Capital <strong>and</strong> reserves<br />
Reconciliation of movement in capital <strong>and</strong> reserves<br />
Share Retained Total<br />
<strong>Group</strong> Capital Reserves earnings equity<br />
Balance at 1 April 2006 5,318,069 140,204 1,883,285 7,341,558<br />
Total recognised income <strong>and</strong> expense – 1,496,444 1,496,444<br />
Shares purchased as treasury stock (377,221) – – (377,221)<br />
Shares sold from treasury stock 444,059 – – 444,059<br />
New shares issued 5,309 – – 5,309<br />
Dividends to equity holders – – (693,615) (693,615)<br />
Balance at 31 March 2007 5,390,216 140,204 2,686,114 8,216,534<br />
Balance at 1 April 2007 5,390,216 140,204 2,686,114 8,216,534<br />
Total recognised income <strong>and</strong> expense – – 1,551,212 1,551,212<br />
Shares purchased as treasury stock (374,405) – – (374,405)<br />
Shares sold from treasury stock 449,787 31,464 – 481,251<br />
Additional paid–up capital 408 – – 408<br />
Dividends to equity holders – – (750,859) (750,859)<br />
Balance at 31 March 2008 5,466,006 171,668 3,486,467 9,124,141<br />
Share Retained Total<br />
Company Capital Reserves earnings equity<br />
Balance at 1 April 2006 5,318,069 140,204 1,794,124 7,252,397<br />
Total recognised income <strong>and</strong> expense – 1,461,762 1,461,762<br />
Shares purchased as treasury stock (377,221) – – (377,221)<br />
Shares sold from treasury stock 444,059 – – 444,059<br />
New shares issued 5,309 – – 5,309<br />
Dividends to equity holders – – (693,615) (693,615)<br />
Balance at 31 March 2007 5,390,216 140,204 2,562,271 8,092,691<br />
Balance at 1 April 2007 5,390,216 140,204 2,562,271 8,092,691<br />
Total recognised income <strong>and</strong> expense – – 1,514,209 1,514,209<br />
Shares purchased as treasury stock (374,405) – – (374,405)<br />
Shares sold from treasury stock 449,787 31,464 – 481,251<br />
Additional paid–up capital 408 – – 408<br />
Dividends to equity holders – – (750,859) (750,859)<br />
Balance at 31 March 2008 5,466,006 171,668 3,325,621 8,963,295<br />
Share Capital<br />
<strong>Group</strong> 2008 Number 2008 Value ($) 2007 Number 2007 Value ($)<br />
On issue at 1 April 4,460,317 5,390,216 4,418,702 5,318,069<br />
Shares purchased as treasury stock (220,238) (374,405) (221,894) (377,221)<br />
Shares sold from treasury stock 265,405 449,787 260,386 444,059<br />
Issued for cash – – 3,123 5,309<br />
Additional paid–up capital – 408 – –<br />
On issue at 31 March 4,505,484 5,466,006 4,460,317 5,390,216<br />
All issued shares are fully paid <strong>and</strong> have no par value. The holders of ordinary shares are entitled to receive dividends as declared from time<br />
to time <strong>and</strong> are entitled to one vote per share at meetings of the <strong>Group</strong>. All shares rank equally with regard to the <strong>Group</strong>’s residual assets.<br />
The 45,167 shares held as treasury stock at 31 March 2007 were all onsold during the period to 31 May 2007. The Company then<br />
brought forward the purchase of the third <strong>and</strong> final tranche of the non pro rata share buy back agreement entered into during 2005,<br />
<strong>and</strong> onsold all of those shares during the period to 31 March 2008.<br />
apata (annual report 2007/08)<br />
37
Notes to the financial statements (year ended 31 March 2008)<br />
apata (annual report 2007/08)<br />
38<br />
Reserves<br />
Reserves comprise the following:<br />
Dividends<br />
The following dividends, all fully imputed, were declared <strong>and</strong> paid by the <strong>Group</strong> for the year ended 31 March:<br />
After 31 March 2008 the following dividends were proposed by the directors for 2008. The dividends have not been provided for <strong>and</strong><br />
there are no income tax consequences.<br />
Dividends were not paid on shares held as treasury stock at the time of payment.<br />
Note 16 : Loans <strong>and</strong> borrowings (Company <strong>and</strong> <strong>Group</strong>)<br />
This note provides information about the contractual terms of the <strong>Group</strong>’s interest–bearing loans <strong>and</strong> borrowings. For more information<br />
about the <strong>Group</strong>’s exposure to interest rate risk, see note 19.<br />
Terms <strong>and</strong> debt repayment schedule<br />
Terms <strong>and</strong> conditions of outst<strong>and</strong>ing loans were as follows:<br />
ANZ National Bank <strong>Limited</strong> loans are secured by General Security<br />
Agreement over all present <strong>and</strong> after acquired property of the<br />
<strong>Group</strong> <strong>and</strong> by a first mortgage over <strong>Group</strong> l<strong>and</strong> <strong>and</strong> buildings.<br />
2008 2007<br />
Share premium reserve 41,182 41,182<br />
Capital reserve 130,486 99,022<br />
171,668 140,204<br />
Share premium reserve comprises premiums paid on the purchase from the Company of shares at a price above that paid by the<br />
Company for those shares. Capital reserve includes gains on sale of property plant <strong>and</strong> equipment <strong>and</strong> other items that are earnings<br />
of a capital rather than revenue nature.<br />
2008 cents 2008 2007 cents 2007<br />
per share $ per share $<br />
Final dividend in respect of the year ended<br />
31 March 2007, paid September 2007 8.70 390,483 7.50 337,912<br />
Interim dividend in respect of the year ended<br />
31 March 2008, paid February 2008 8.00 360,376 8.00 355,703<br />
750,859 693,615<br />
2009 cents 2009 2008 cents 2008<br />
per share $ per share $<br />
Final dividend in respect of the year ended<br />
31 March 2008, payable September 2008 9.86 444,241 8.70 390,483<br />
2008 2007<br />
Non-current liabilities - Secured bank loans 5,900,000 3,200,000<br />
Current liabilities - Current portion of secured bank loans – –<br />
5,900,000 3,200,000<br />
Nominal Date of Available Carrying Available Carrying<br />
interest rate maturity facility 2008 amount 2008 facility 2007 amount 2007<br />
Secured bank loan<br />
ANZ National Bank <strong>Limited</strong> Loans<br />
# 16 9.82% 13/08/09 1,000,000 1,000,000 1,000,000 1,000,000<br />
# 17 9.90% 03/06/10 1,200,000 1,200,000 2,200,000 2,200,000<br />
# 18 9.84% 18/05/12 3,700,000 3,700,000 – –<br />
Unsecured bank facility 11.0% 2,000,000 – 2,000,000 –<br />
Total interest-bearing liabilities 7,900,000 5,900,000 5,200,000 3,200,000<br />
Interest rates are at floating rates, with interest being based on<br />
the Banks 90 day bill rate. Interest rates will reprice within 6<br />
months or less. The <strong>Group</strong> has an undrawn term loan facility of<br />
$2,000,000 (2007:$2,000,000).
Note 17 : Employee benefits (Company <strong>and</strong> <strong>Group</strong>)<br />
2008 2007<br />
Annual leave 327,183 155,742<br />
Wages Accrued 271,142 124,086<br />
Total employee benefits 598,325 279,828<br />
Note 18 : Trade <strong>and</strong> other payables<br />
2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Trade payables 3,310,115 3,170,718 3,690,224 3,574,334<br />
Non-trade payables <strong>and</strong> accrued expenses 1,258,738 1,176,462 544,446 544,221<br />
4,567,853 4,347,180 4,234,670 4,118,555<br />
Note 19 : Financial instruments<br />
Exposure to credit, interest rate <strong>and</strong> liquidity risks arises in the<br />
normal course of the <strong>Group</strong>’s business.<br />
Credit risk<br />
Financial instruments which potentially subject the <strong>Group</strong> to<br />
credit risk principally consist of cash <strong>and</strong> cash equivalents <strong>and</strong><br />
accounts receivable. The <strong>Group</strong> performs credit evaluations on<br />
all customers requiring credit <strong>and</strong> generally does not require<br />
collateral. The majority of revenue is generated from transactions<br />
with growers, however payment for packaging <strong>and</strong> coolstorage<br />
is received directly by the <strong>Group</strong> via Zespri as a deduction of<br />
returns to growers. The <strong>Group</strong> places its cash with high credit<br />
quality financial institutions.<br />
Liquidity risk<br />
Liquidity risk represents the <strong>Group</strong>’s ability to meet its contractual<br />
obligations. The <strong>Group</strong> evaluates its liquidity requirements on an<br />
ongoing basis. In general, the <strong>Group</strong> generates sufficient cash<br />
flows from its operating activities to meet its obligations arising<br />
from its financial liabilities <strong>and</strong> has credit lines in place to cover<br />
potential shortfalls that may occur seasonally during the year.<br />
The <strong>Group</strong> seeks to mitigate liquidity risks by structuring debt<br />
with a spread of maturity dates, keeping sufficient undrawn<br />
credit lines available for short term needs. At balance date, the<br />
<strong>Group</strong> held an overdraft facility of $2m, (2007: $2m) which was<br />
undrawn (2007: undrawn).<br />
Interest rate risk<br />
Interest rate risk is the risk that the value of the <strong>Group</strong>s assets <strong>and</strong><br />
liabilities will fluctuate due to changes in market interest rates.<br />
The <strong>Group</strong> is exposed to interest rate risk primarily through its<br />
cash <strong>and</strong> cash equivalents <strong>and</strong> bank borrowings. Interest rate<br />
swaps have been entered into to achieve an appropriate mix of<br />
fixed <strong>and</strong> floating exposure within the <strong>Group</strong>.<br />
Quantitative disclosures<br />
Credit risk<br />
The carrying amount of financial assets represents the <strong>Group</strong>’s<br />
maximum credit exposure. There is considered to be no<br />
impairment of trade receivables at the reporting date, <strong>and</strong> therefore<br />
no impairment allowance has been recorded (2007: $nil). Within<br />
other trade receivables are $271,004 of past due receivables<br />
between 30 <strong>and</strong> 90 days (2007: $54,934).<br />
Liquidity risk<br />
The <strong>Group</strong>s contractural cashflows for financial assets <strong>and</strong><br />
liabilities fall within six months or less except for secured bank<br />
loans as set out below:<br />
Balance Contractual 6 months 6 – 12 1 – 2 2– 5 More than<br />
<strong>Group</strong> sheet cash flows or less months years years 5 years<br />
2008<br />
Secured bank loans 5,900,000 5,900,000 – – 1,000,000 4,900,000 –<br />
2007<br />
Secured bank loans 3,200,000 3,200,000 – – – 3,200,000 –<br />
Interest rate risk – repricing analysis<br />
The Company <strong>and</strong> <strong>Group</strong> have secured bank loans of $5,900,000<br />
(2007: $3,200,000), which will reprice within 6 months.<br />
The Company has an interest rate swap in place at balance date<br />
for $3,000,000. The swap rate is 8.25% plus a margin of 1% <strong>and</strong><br />
matures on 21 March 2011.<br />
Capital management<br />
The <strong>Group</strong>’s capital includes share capital, reserves <strong>and</strong><br />
retained earnings.<br />
The <strong>Group</strong>’s policy is to maintain a strong capital base so as<br />
to maintain investor <strong>and</strong> creditor confidence <strong>and</strong> to sustain<br />
future development of the business. The impact of the level of<br />
capital on shareholders’ return is also recognised <strong>and</strong> the <strong>Group</strong><br />
recognises the need to maintain a balance between the higher<br />
apata (annual report 2007/08)<br />
39
Notes to the financial statements (year ended 31 March 2008)<br />
apata (annual report 2007/08)<br />
40<br />
returns that might be possible with greater gearing <strong>and</strong> the<br />
advantages <strong>and</strong> security afforded by a sound capital position.<br />
The <strong>Group</strong> is not subject to any externally imposed<br />
capital requirements. The <strong>Group</strong>’s policies in respect of capital<br />
management <strong>and</strong> allocation are reviewed regularly by the Board<br />
of Directors.<br />
There have been no material changes in the <strong>Group</strong>’s management<br />
of capital during the year.<br />
Classification <strong>and</strong> fair values (<strong>Group</strong>)<br />
Sensitivity analysis<br />
In managing interest rate risks the <strong>Group</strong> aims to reduce the<br />
impact of short–term fluctuations on the <strong>Group</strong>’s earnings. Over<br />
the longer–term, however, permanent changes in interest rates<br />
will have an impact on profit.<br />
At 31 March 2008 it is estimated that an increase of one percentage<br />
point in interest rates would decrease the <strong>Group</strong>’s profit before<br />
income tax by approximately $59,000 (2007: $32,000). This excludes<br />
the effect of the interest rate swap.<br />
Other Total<br />
Fair value Available Loans & amortised carrying<br />
Note through P&L for sale receiveables costs amount<br />
2008<br />
Assets<br />
Investments 10 – 130,632 – – 130,632<br />
Total non–current assets – 130,632 – – 130,632<br />
Trade <strong>and</strong> other receivables 12 – – 3,362,433 – 3,362,433<br />
Cash <strong>and</strong> cash equivalents 13 – – 1,073,290 – 1,073,290<br />
Total current assets – – 4,435,723 – 4,435,723<br />
Total assets – 130,632 4,435,723 – 4,566,355<br />
Liabilities<br />
Loans <strong>and</strong> borrowings 16 – – – 5,900,000 5,900,000<br />
Total non–current liabilities – – – 5,900,000 5,900,000<br />
Trade <strong>and</strong> other payables 18 – – – 4,567,853 4,567,853<br />
Employee benefits 17 – – – 598,325 598,325<br />
Current tax liabilities – – – 111,491 111,491<br />
Derivatives 31,372 – – – 31,372<br />
Total current liabilities 31,372 – – 5,277,669 5,309,041<br />
Total liabilities 31,372 – – 11,177,669 11,209,041<br />
Other Total<br />
Fair value Available Loans & amortised carrying<br />
Note through P&L for sale receiveables costs amount<br />
2007<br />
Assets<br />
Investments 10 – 63,078 – – 63,078<br />
Total non–current assets – 63,078 – – 63,078<br />
Trade <strong>and</strong> other receivables 12 – – 1,110,120 – 1,110,120<br />
Cash <strong>and</strong> cash equivalents 13 – – 1,035,717 – 1,035,717<br />
Current tax assets – – 65,721 – 65,721<br />
Total current assets – – 2,211,558 – 2,211,558<br />
Total assets – 63,078 2,211,558 – 2,274,636<br />
Liabilities<br />
Loans <strong>and</strong> borrowings 16 – – – 3,200,000 3,200,000<br />
Total non–current liabilities – – – 3,200,000 3,200,000<br />
Trade <strong>and</strong> other payables 18 – – – 4,234,670 4,234,670<br />
Employee benefits 17 – – – 279,828 279,828<br />
Total current liabilities – – – 4,514,498 4,514,498<br />
Total liabilities – – – 7,714,498 7,714,498<br />
Estimation of fair values<br />
The methods used in determining the fair values of financial instruments are discussed in note 4. The face values of all current assets<br />
<strong>and</strong> liabilities approximate their fair values <strong>and</strong> due to the fact that loans <strong>and</strong> borrowings are on floating interest rates it has been<br />
determined that face value approximates fair value.
Note 20 : Operating leases<br />
Leases as lessee<br />
Non-cancellable operating lease rentals are payable as follows:<br />
2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Less than one year 1,182,467 1,182,467 1,046,449 1,046,449<br />
Between one <strong>and</strong> five years 1,526,696 1,526,696 2,218,364 2,218,364<br />
More than five years – – 59,000 59,000<br />
2,709,163 2,709,163 3,323,813 3,323,813<br />
Note 21 : Capital commitments<br />
The capital commitments at 31 March 2008 represents expenditure to complete an extension to a coolstore <strong>and</strong> install racking in an<br />
existing coolstore. Both projects were underway as at 31 March 2008.<br />
Note 22 : Contingencies<br />
There are no contingent liabilities as at 31 March 2008 (2007: Nil).<br />
2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Estimated capital expenditure contracted for at<br />
balance date but not provide for 307,830 307,830 1,637,919 1,637,919<br />
Note 23 : Reconciliation of the profit for the year with the net cash from operating activities<br />
Note 2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Profit for the year 1,551,212 1,514,209 1,496,444 1,461,762<br />
Adjustments for:<br />
Depreciation 9 1,596,799 1,596,799 1,326,458 1,326,458<br />
(Gain) on sale of property, plant & equipment 5 – – (67,666) (67,666)<br />
Loss on sale of property, plant & equipment 6 18,267 18,267 135 135<br />
Change in investments (capitalised dividends) (54) (54) (1,437) (1,437)<br />
Movement in deferred tax 14 (108,481) (108,481) (41,658) (41,658)<br />
Movement in working capital<br />
Change in current tax liabilities 8 80,910 80,999 (103,594) (103,532)<br />
Change in inventories 11 (452,766) (452,766) (22,871) (22,871)<br />
Change in trade <strong>and</strong> other receivables 12 (2,362,239) (1,737,341) 907,248 494,893<br />
Change in trade <strong>and</strong> other payables 1,835,510 1,621,026 16,158 (54,261)<br />
Change in employee benefits 17 318,497 318,497 (98,747) (98,747)<br />
Net cash from operating activities 2,477,655 2,851,155 3,410,470 2,893,076<br />
apata (annual report 2007/08)<br />
41
Notes to the financial statements (year ended 31 March 2008)<br />
apata (annual report 2007/08)<br />
42<br />
Note 24 : Related parties<br />
Transactions with directors <strong>and</strong> related entities<br />
The directors trade with the <strong>Group</strong> in the normal course of business. All transactions are at arms length <strong>and</strong> on normal trading terms.<br />
Parties associated with the directors contribute to a significant portion of the <strong>Group</strong>’s turnover. No debts owing to or from related<br />
parties have been written off during the year. There are no amounts outst<strong>and</strong>ing at the respective balance dates. Parties associated<br />
with Directors of the <strong>Group</strong> control 39.3 % of the voting shares of the <strong>Group</strong>. The aggregate value of transactions <strong>and</strong> outst<strong>and</strong>ing<br />
balances due to the <strong>Group</strong>, at the respective 31 March year ends, relating to directors <strong>and</strong> entities over which they have control or<br />
significant influence were as follows:<br />
Summary of payments to: Summary of income from: Net balance receivable<br />
2008 <strong>Group</strong> 2007 <strong>Group</strong> 2008 <strong>Group</strong> 2007 <strong>Group</strong> 2008 <strong>Group</strong> 2007 <strong>Group</strong><br />
David Goodwin 128,316 160,191 145,801 35,243 – 354<br />
Max McGreevy 150,855 218,220 595,055 541,948 156,755 88,351<br />
Peter Mayston 183,151 195,428 344,259 243,207 137,728 119,204<br />
Michael Muller 92,949 78,467 26,105 30,970 197 163<br />
Paul O’Brien 270,304 309,092 144,197 117,118 253 –<br />
Peter Rogers 150 2,750 – – – –<br />
825,725 946,148 1,255,417 968,486 294,933 208,072<br />
The table below provides a breakdown by transaction type:<br />
2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
Payments for rebates, kiwistart <strong>and</strong> non st<strong>and</strong>ard<br />
– David Goodwin 76,845 76,845 120,169 120,169<br />
– Max McGreevy 56,324 56,324 76,039 76,039<br />
– Peter Mayston 87,380 87,380 90,293 90,293<br />
– Michael Muller 6,688 6,688 6,815 6,815<br />
– Paul O’Brien 65,471 65,471 84,662 84,662<br />
Payments for dividends (net)<br />
– David Goodwin 51,471 51,471 40,022 40,022<br />
– Max McGreevy 85,074 85,074 78,961 78,961<br />
– Peter Mayston 92,595 92,595 85,942 85,942<br />
– Michael Muller 60,487 60,487 63,807 63,807<br />
– Paul O’Brien 6,346 6,346 4,913 4,913<br />
Payments for executive services/consultancy fees<br />
– Michael Muller 25,774 25,774 7,845 7,845<br />
– Peter Rogers 150 150 2,750 2,750<br />
Payments for harvest <strong>and</strong> picking services<br />
– Max McGreevy – – 16,592 16,592<br />
– Peter Mayston 2,853 2,853 14,980 14,980<br />
– Paul O’Brien 198,487 198,487 219,517 219,517<br />
Payments for other goods <strong>and</strong> services<br />
– Max McGreevy 9,457 – 46,628 32,907<br />
– Peter Mayston 323 323 4,213 –<br />
Sales of packaging to directors<br />
– Max McGreevy 577,169 577,169 455,649 455,649<br />
– Peter Mayston 324,222 324,222 148,821 148,821<br />
Revenue from packing <strong>and</strong> other goods<br />
<strong>and</strong> services to directors<br />
– David Goodwin 145,801 145,801 35,243 35,243<br />
– Max McGreevy 17,886 6,861 86,299 74,398<br />
– Peter Mayston 20,037 10,953 94,386 88,597<br />
– Michael Muller 26,105 26,105 30,970 30,970<br />
– Paul O’Brien 144,197 144,197 117,118 117,118<br />
A direct relative of a director undertook a project for the Company, at arms length, on normal commercial terms. The relative was<br />
professionally qualified to undertake the project, for which fees amounting to $9,788 (2007: Nil) were paid.
SouthLink <strong>Limited</strong> / Southlink Supply <strong>Limited</strong><br />
SouthLink <strong>Limited</strong> provides logistical services for the <strong>Group</strong><br />
<strong>and</strong> other industry parties at commercial rates. Mr Goodwin<br />
is Chairman <strong>and</strong> Mr Low is a Director of SouthLink <strong>Limited</strong>,<br />
representing the <strong>Apata</strong> <strong>Group</strong>. During the year to 31 March 2008,<br />
payments amounting to $926,393 (2007: $774,911) for logistical<br />
services were made by <strong>Apata</strong> Suppliers <strong>Limited</strong> to SouthLink<br />
<strong>Limited</strong>. SouthLink <strong>Limited</strong> paid <strong>Apata</strong> Suppliers <strong>Limited</strong> $18,864<br />
(2007: nil) for damaged pallets. SouthLink <strong>Limited</strong> paid <strong>Apata</strong><br />
<strong>Limited</strong> $8,250 (2007: $9,000) for office space, $5,000 (2007:<br />
$5,000) in directors fees, $239,979 (2007: $236,333) in rebates, <strong>and</strong><br />
$1,897 (2007: nil) for administration services.<br />
Southlink Supply <strong>Limited</strong> is a new company established to take<br />
over the activities of SouthLink <strong>Limited</strong> prior to the 2008 harvest.<br />
Centrepac Packhouse & Coolstore <strong>Limited</strong><br />
<strong>Apata</strong> <strong>Limited</strong> leases the building at Pyes Pa from Centrepac<br />
Packhouse & Coolstore <strong>Limited</strong>. Centrepac Packhouse &<br />
Coolstore <strong>Limited</strong> is a private company of which Mr Goodwin is a<br />
director <strong>and</strong> shareholder. The lease rental has been determined<br />
by negotiation between the parties; Mr Goodwin took no<br />
part in the negotiations or board meetings concerning this<br />
lease. During the year to 31 March 2008, payments amounting<br />
$439,464 (2007: $439,911) for occupancy costs were made by<br />
<strong>Apata</strong> <strong>Limited</strong> to Centrepac Packhouse & Coolstore <strong>Limited</strong>.<br />
Tetley Coolstores <strong>Limited</strong><br />
<strong>Apata</strong> <strong>Limited</strong> leases the building at Katikati from Tetley<br />
Coolstores <strong>Limited</strong>. Tetley Coolstores <strong>Limited</strong> is a private<br />
company of which Mr M McGreevy is a director <strong>and</strong> shareholder.<br />
The lease rental has been determined by negotiation between<br />
Note 25 : Events after balance date<br />
parties; Mr McGreevy took no part in the negotiations or<br />
board meetings concerning this lease. During the year to 31<br />
March 2008, payments amounting to $203,729 (2007: $190,733)<br />
for occupancy costs were made by <strong>Apata</strong> <strong>Limited</strong> to Tetley<br />
Coolstores <strong>Limited</strong>. In addition, as a shareholder in <strong>Apata</strong><br />
<strong>Limited</strong>, Tetley Coolstores <strong>Limited</strong> received net cash dividends<br />
amounting to $61,057 (2007: $56,670).<br />
<strong>Apata</strong> Suppliers Entity <strong>Limited</strong><br />
<strong>Apata</strong> Suppliers Entity <strong>Limited</strong> (ASEL) is a separate legal entity<br />
with directors elected by <strong>Apata</strong> growers <strong>and</strong> appointed by the<br />
<strong>Group</strong> <strong>and</strong> other independent coolstore facilities. This entity<br />
does not form part of the <strong>Group</strong>. During the year to 31 March<br />
2008, the <strong>Group</strong> received $26,566,498 (2007: $14,224,834) from<br />
ASEL in respect of post–harvest services <strong>and</strong> fruit proceeds, <strong>and</strong><br />
made payments to ASEL of $743,763 (2007: $975,491) in respect<br />
of post–harvest services.<br />
Transactions with key management personnel<br />
<strong>Apata</strong>’s Executive team have authority <strong>and</strong> responsibility for<br />
planning, directing <strong>and</strong> controlling the activities of the <strong>Group</strong>. The<br />
team was restructured during the year, with changes in personnel<br />
<strong>and</strong> a reduction of the Executive team to four members.<br />
The total value of short term remuneration paid to key<br />
management personnel during the financial year was $804,363<br />
(2007: $781,306).<br />
At 31 March 2008, key management personnel held 62,000<br />
shares in the Company (2007: 2,000 shares). Dividends paid to<br />
key management personnel in respect of those shares amounted<br />
to $10,354 (2007: $310).<br />
On 26 June 2008 the Directors of the Company declared their intention to pay a final cash dividend of 9.86 cents per share (2007: 8.7<br />
cents per share), to be paid in September 2008. As the intention was declared after balance date, the financial effect has not been<br />
recognised in the financial statements.<br />
Note 26 : Transition to NZ IFRS<br />
The <strong>Group</strong> undertook a project to assess the key differences between NZ IFRS <strong>and</strong> NZ GAAP. The transition to NZ IFRS has not<br />
affected the reported balance sheet, income statement <strong>and</strong> cash flows of the Company <strong>and</strong> <strong>Group</strong>.<br />
apata (annual report 2007/08)<br />
43
apata (annual report 2007/08)<br />
44<br />
Auditors’ report<br />
Audit report<br />
To the shareholders of <strong>Apata</strong> <strong>Limited</strong><br />
We have audited the financial statements on pages 27 to 43. The financial statements provide information<br />
about the past financial performance <strong>and</strong> financial position of the company <strong>and</strong> group as at 31 March<br />
2008. This information is stated in accordance with the accounting policies set out on pages 29 to 32.<br />
Directors’ responsibilities<br />
The Directors are responsible for the preparation of financial statements which give a true <strong>and</strong> fair<br />
view of the financial position of the company <strong>and</strong> group as at 31 March 2008 <strong>and</strong> the results of their<br />
operations for the year ended on that date.<br />
Auditors’ responsibilities<br />
It is our responsibility to express an independent opinion on the financial statements presented by<br />
the Directors <strong>and</strong> report our opinion to you.<br />
Basis of opinion<br />
An audit includes examining, on a test basis, evidence relevant to the amounts <strong>and</strong> disclosures in the<br />
financial statements. It also includes assessing:<br />
• the significant estimates <strong>and</strong> judgements made by the Directors in the preparation of the financial<br />
statements;<br />
• whether the accounting policies are appropriate to the company’s <strong>and</strong> group’s circumstances,<br />
consistently applied <strong>and</strong> adequately disclosed.<br />
We conducted our audit in accordance with New Zeal<strong>and</strong> Auditing St<strong>and</strong>ards. We planned <strong>and</strong> performed<br />
our audit so as to obtain all the information <strong>and</strong> explanations which we considered necessary in order<br />
to provide us with sufficient evidence to obtain reasonable assurance that the financial statements are<br />
free from material misstatements, whether caused by fraud or error. In forming our opinion we also<br />
evaluated the overall adequacy of the presentation of information in the financial statements.<br />
Our firm has also provided other services to the company <strong>and</strong> its subsidiary in relation to taxation <strong>and</strong><br />
general accounting services. These matters have not impaired our independence as auditors of the<br />
company <strong>and</strong> group. The firm has no other relationship with, or interest in, the company or its subsidiary.<br />
Unqualified opinion<br />
We have obtained all the information <strong>and</strong> explanations we have required.<br />
In our opinion:<br />
• proper accounting records have been kept by the company as far as appears from our examination<br />
of those records;<br />
• the financial statements on pages 27 to 43:<br />
– comply with New Zeal<strong>and</strong> generally accepted accounting practice;<br />
– give a true <strong>and</strong> fair view of the financial position of the company <strong>and</strong> group as at 31 March<br />
2008 <strong>and</strong> the results of their operations for the year ended on that date.<br />
Our audit was completed on 17 July 2008 <strong>and</strong> our unqualified opinion is expressed as at that date.<br />
Tauranga
Statutory information - Year ended 31 March 2008<br />
a : Directors <strong>and</strong> remuneration<br />
The broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties <strong>and</strong> responsibilities <strong>and</strong><br />
that remuneration is competitive in attracting, retaining <strong>and</strong> motivating people of the highest quality.<br />
Details of remuneration of each director of the <strong>Group</strong> are:<br />
The <strong>Group</strong> has provided no other benefits to a director for services as a director.<br />
Peter Rogers retired as a director during the course of the year.<br />
Tony Marks was appointed as a director in April 2008.<br />
b : Entries recorded in the interests register<br />
The following entries were recorded in the interest register of the <strong>Group</strong> during the year:<br />
Directors’ interests in transactions<br />
Directors <strong>and</strong> their associated interests enter packaging,<br />
packing <strong>and</strong>/or coolstorage contracts with the <strong>Group</strong> on normal<br />
commercial terms <strong>and</strong> conditions in the ordinary course of<br />
business activities with the <strong>Group</strong>. There were no other material<br />
entries made in the interests register during the year.<br />
Directors in office as at 31 March 2008<br />
David Goodwin<br />
– Director of <strong>Apata</strong> <strong>Limited</strong><br />
– Director of <strong>Apata</strong> Suppliers <strong>Limited</strong><br />
– Director of <strong>Apata</strong> Suppliers Entity <strong>Limited</strong><br />
– Trustee of <strong>Apata</strong> Suppliers Entity <strong>Limited</strong> Grower /Supplier<br />
Trust<br />
– Director of Centrepac Packhouse <strong>and</strong> Coolstore Ltd<br />
– Director <strong>and</strong> shareholder of Harvestpac Packhouse <strong>and</strong><br />
Coolstore <strong>Limited</strong><br />
– Director of Abbey Holdings <strong>Limited</strong><br />
– Director of Chateau Nominees <strong>Limited</strong><br />
– Director of Kiwifruit Supply New Zeal<strong>and</strong> <strong>Limited</strong><br />
– Director of SouthLink <strong>Limited</strong><br />
– Director of SouthLink Supply <strong>Limited</strong><br />
– Trustee of Harvest Ridge Trust Orchard<br />
– Trustee of Charisma Orchard<br />
Max McGreevy<br />
– Director <strong>and</strong> shareholder of <strong>Apata</strong> <strong>Limited</strong><br />
– Director of <strong>Apata</strong> Suppliers <strong>Limited</strong><br />
– Director of <strong>Apata</strong> Suppliers Entity <strong>Limited</strong><br />
– Trustee of <strong>Apata</strong> Suppliers Entity <strong>Limited</strong> Grower /Supplier<br />
Trust<br />
– Partner of MR & CL McGreevy (trading as Claremont Services)<br />
– Partner of Claremont Contractors Partnership<br />
– Director <strong>and</strong> shareholder of Sheoke Orchards Ltd<br />
– Director <strong>and</strong> shareholder of Tetley Coolstores Ltd<br />
– Director <strong>and</strong> shareholder of Claremont Services Ltd<br />
– Director <strong>and</strong> shareholder of Fern Garden <strong>Limited</strong><br />
2008 <strong>Group</strong> 2008 Company 2007 <strong>Group</strong> 2007 Company<br />
David Goodwin 31,750 31,750 32,000 32,000<br />
Peter Mayston 14,500 14,500 14,750 14,750<br />
Michael Muller 15,000 15,000 14,750 14,750<br />
Max McGreevy 16,500 16,500 16,500 16,500<br />
Paul O’Brien 14,750 14,750 15,000 15,000<br />
Peter Rogers 2,250 2,250 16,250 16,250<br />
94,750 94,750 109,250 109,250<br />
Peter Mayston<br />
– Director of <strong>Apata</strong> <strong>Limited</strong><br />
– Director of <strong>Apata</strong> Suppliers <strong>Limited</strong><br />
– Director <strong>and</strong> shareholder of Bruntwood Farms <strong>Limited</strong><br />
– Trustee of Bruntwood Investment Trust<br />
– Trustee of Bruntwood Trust<br />
– Trustee of PM Mayston Family Trust<br />
– Director <strong>and</strong> shareholder of Maniaroa Properties <strong>Limited</strong><br />
– Delegate of NZ Employers Association – Orchard <strong>and</strong><br />
Vineyard<br />
Michael Muller<br />
– Director of <strong>Apata</strong> <strong>Limited</strong><br />
– Director of <strong>Apata</strong> Suppliers <strong>Limited</strong><br />
– Director of Avalon Incorporated<br />
– Director of Birdhurst <strong>Limited</strong><br />
– Director of Golden Bay Fruit 2008 <strong>Limited</strong><br />
– Trustee of Equality Property Trust Incorporated<br />
– Director <strong>and</strong> shareholder of Muller & Associates <strong>Limited</strong><br />
– Trustee of Michael <strong>and</strong> Patricia Muller Family Trust<br />
Paul O’Brien<br />
– Director <strong>and</strong> shareholder of <strong>Apata</strong> <strong>Limited</strong><br />
– Director of <strong>Apata</strong> Suppliers <strong>Limited</strong><br />
– Director of <strong>Apata</strong> Suppliers Entity <strong>Limited</strong><br />
– Trustee of <strong>Apata</strong> Suppliers Entity <strong>Limited</strong> Grower /Supplier<br />
Trust<br />
– Director <strong>and</strong> shareholder of PR & PJ O’Brien <strong>Limited</strong><br />
– Trustee of PR & PJ O’Brien Family Trust<br />
– Partner of PR & PJ O’Brien Partnership<br />
– Partner of PR & CI & BJ O’Brien Partnership<br />
apata (annual report 2007/08)<br />
45
apata (annual report 2007/08)<br />
46<br />
Share dealings of directors in the Company<br />
The Michael <strong>and</strong> Patricia Muller Family Trust, in which Michael<br />
Muller has a beneficial interest, sold 33,333 shares during the<br />
course of the year. The Harvest Ridge Trust, in which David<br />
Goodwin has a beneficial interest, purchased 50,000 shares<br />
during the course of the year. Paul O’Brien also has an interest<br />
in the 13,000 shares held by P, C & B O’Brien.<br />
Loans to directors<br />
The <strong>Group</strong> has made no loans to a director nor has the <strong>Group</strong><br />
guaranteed any debts incurred by a director.<br />
Directors’ indemnity <strong>and</strong> insurance<br />
The <strong>Group</strong> has arranged directors <strong>and</strong> officers liability insurance<br />
cover in respect of <strong>Apata</strong> <strong>Limited</strong> <strong>and</strong> <strong>Apata</strong> Suppliers <strong>Limited</strong><br />
for $2,500,000 with QBE Insurance International <strong>Limited</strong> at a<br />
premium of $4,000 per annum. The directors portion of the<br />
premium is $400.<br />
c : Employee’s remuneration<br />
During the year the following number of employees received<br />
remuneration <strong>and</strong> other benefits of at least $100,000:<br />
Number of<br />
<strong>Apata</strong> <strong>Limited</strong> employees<br />
$250,000 – $259,999 1<br />
$140,000 – $149,999 1<br />
$110,000 – $119,999 1<br />
$100,000 – $109,999 1<br />
d : Auditors’ remuneration<br />
Shares held Shares held<br />
31.3.2008 31.3.2007<br />
David Goodwin (beneficially held) 308,209 258,209<br />
Peter Mayston (beneficially held) 554,464 554,464<br />
Michael Muller (beneficially held) 362,196 395,530<br />
Max McGreevy (beneficially held) 509,425 509,425<br />
Paul O’Brien 25,000 25,000<br />
During the year $28,503 has been paid or accrued to KPMG as<br />
the <strong>Group</strong>’s auditor (2007: $24,007), <strong>and</strong> $4,500 for other services<br />
relating to the transition to IFRS.<br />
e : Use of <strong>Group</strong> information<br />
During the year the Board received no notices from directors<br />
of the <strong>Group</strong> requesting to use <strong>Group</strong> information received in<br />
their capacity as directors that would not otherwise have been<br />
available to them.<br />
f : Donations<br />
The <strong>Group</strong> did not make any donations to charities during<br />
the year.
Securities Act Exemption Notice information<br />
<strong>Apata</strong> <strong>Limited</strong> (“the Company” or “the issuer”) has been<br />
granted a Securities Act (<strong>Apata</strong> <strong>Limited</strong>) Exemption Notice 2006<br />
by the Securities Commission (“the Exemption Notice”). The<br />
Exemption Notice was gazetted on 27 July 2006 <strong>and</strong> expires on<br />
27 July 2011.<br />
The Exemption Notice grants the Company exemptions,<br />
subject to conditions, from sections 37A(1)(c) <strong>and</strong> 54 of the<br />
Securities Act 1978 <strong>and</strong> clauses 4 to 9, 11 to 20, 22 to 38, <strong>and</strong><br />
40 to 42 of Schedule 1 of the Securities Regulations 1983 (“the<br />
Regulations”).<br />
The exemption in clause 5(c) of the Exemption Notice is subject<br />
to the condition that the information required by clauses<br />
4, 5A, 6, 7, 12 to 14, 17, 18, 20, <strong>and</strong> 42 of Schedule 1 of the<br />
Regulations is contained in every annual report of the Company.<br />
The following information is provided in accordance with the<br />
Exemption Notice:<br />
Principal subsidiaries of issuer<br />
No subsidiary of the issuer has total tangible assets that exceed<br />
5 percent of the amount of the total tangible assets of the<br />
issuing group.<br />
Restrictions on directors’ powers<br />
There are no modifications, exceptions or limitations on the<br />
powers of the board of the Company imposed by the constitution<br />
of the Company in force at 17 July 2008, except as provided in the<br />
Companies Act 1993, which requires the approval of shareholders<br />
to various matters including major transactions.<br />
Substantial equity security holders of issuer<br />
The ten largest holdings of equity securities of the issuer as at<br />
30 June 2008 are:<br />
Name of substantial equity security holder Holding<br />
1. Murray Bindon, Peter Martyn Mayston &<br />
Jenny Mayston 554,464<br />
2. Tetley Coolstores <strong>Limited</strong> 365,612<br />
3. Mike Muller, Patricia Muller & John Donald 362,196<br />
4. Harvestpac Packhouse & Coolstore <strong>Limited</strong> 238,209<br />
5. Melvyn Albert Walker, Delwyn Sonya<br />
Walker & Kevin Garty 188,086<br />
6. Melva Ethal Allan & William Beaumont<br />
Holl<strong>and</strong> 153,030<br />
7. Stuart Barry Weston, Rachel Weston<br />
& Fenton McFadden Trustee<br />
Company <strong>Limited</strong> 149,059<br />
8. Max Richard McGreevy & Catherine McGreevy 143,813<br />
9. Kenneth Shaw 125,000<br />
10. Trevor Goodman S<strong>and</strong>es & Gweneth<br />
Anne S<strong>and</strong>es 100,000<br />
None of the substantial equity security holders mentioned<br />
above undertake any liability in respect of any securities that<br />
may be offered by the Company.<br />
Description of activities of issuing group<br />
The Company, one of New Zeal<strong>and</strong>’s leading post harvest<br />
kiwifruit <strong>and</strong> avocado facilities, has been engaged in the following<br />
activities during the 5 years preceding 17 July 2008:<br />
– Coolstore of kiwifruit (conventional, medium term <strong>and</strong><br />
controlled atmosphere)<br />
– Coolstorage of avocados<br />
– Packing of kiwifruit <strong>and</strong> avocados<br />
– Conditioning <strong>and</strong> pre-ripening of kiwifruit <strong>and</strong> avocados<br />
– Laboratory services – pest management, Kiwistart, dry<br />
matter, botrytis prediction<br />
– Sales of local market <strong>and</strong> class II export kiwifruit <strong>and</strong> avocados<br />
– Grower services<br />
– Pre-packing<br />
– Leasing <strong>and</strong> management of kiwifruit orchards<br />
The other member of the issuing group (<strong>Apata</strong> Suppliers<br />
<strong>Limited</strong>) has been engaged in the following activities during the<br />
5 years preceding 17 July 2008:<br />
– Logistical services for export kiwifruit<br />
Details regarding the principal fixed assets held by members<br />
of the issuing group:<br />
Fixed Asset Use of fixed asset Owned/leased<br />
Freehold l<strong>and</strong> at<br />
<strong>Apata</strong> Packing & Coolstore Owned<br />
Buildings<br />
<strong>Apata</strong> Packing & Coolstore Owned<br />
Pyes Pa (Centrepac) Packing & Coolstore Leased<br />
Whangarei Packing & Coolstore Leased<br />
Katikati (Tetley) Packing & Coolstore Leased<br />
Forklifts & vehicles<br />
Truck (<strong>Apata</strong>) Packing & Coolstore Leased<br />
Utility vehicles (6)<br />
& car Packing & Coolstore Leased<br />
All others Packing & Coolstore Owned<br />
At all locations<br />
Plant <strong>and</strong> equipment Packing & Coolstore Owned<br />
Office equipment<br />
<strong>and</strong> furniture Packing & Coolstore Owned<br />
apata (annual report 2007/08)<br />
47
apata (annual report 2007/08)<br />
48<br />
Securities paid up otherwise than in cash<br />
Within the five years preceding 17 July 2008, no securities have<br />
been paid for otherwise than in cash.<br />
Options to subscribe for securities of issuing group<br />
No options have been granted or are proposed to be granted<br />
to any person.<br />
Appointment <strong>and</strong> retirement of directors<br />
A director may be appointed or removed from office by an<br />
ordinary resolution.<br />
At each Annual Meeting of the Company, one third of the<br />
directors for the time being, or if their number is not three<br />
or a multiple of three, then the nearest one third, shall retire<br />
from office. The directors to retire in every year shall be those<br />
who have been longest in office since their last election, but as<br />
between persons who became directors on the same day, those<br />
to retire shall (unless they otherwise agree among themselves)<br />
be determined by lot.<br />
A retiring director shall be eligible for re-election.<br />
The board of directors may by resolution from time to time<br />
appoint <strong>and</strong> remove two additional people as directors of the<br />
Company (each an “additional director”). An additional director<br />
will hold office for such term as is determined by the board at<br />
the time of appointment, up to a maximum term of three years.<br />
If no particular term is determined by the board, an additional<br />
director holds office for a term of one year.<br />
There are no rules relating to retirement age for directors.<br />
Every director may, by notice given in writing to the Company,<br />
appoint any persons (including any other director) to act as an<br />
alternate director in the director’s place, either generally or in<br />
respect of a specified meeting or meetings during the director’s<br />
absence or inability to act as a director. Every director may, at<br />
the director’s discretion by notice in writing to the Company,<br />
remove that director’s alternate director.<br />
An alternate director has the right to vote in the election of<br />
other directors of the issuer.<br />
Material contracts<br />
Material contracts that have been entered into by any member<br />
of the issuing group at any time in the two years preceding<br />
17 July 2008 are:<br />
ANZ National Bank <strong>Limited</strong> Loan Agreement for a principal<br />
amount of $3,700,000 dated 15 May 2007.<br />
In March 2008 this loan was converted from a 90 day bill loan<br />
into an interest rate swap loan.<br />
Pending proceedings<br />
There are no legal proceedings that are pending at 17 July 2008<br />
that may have a material adverse effect on the issuing group.<br />
Restrictions on issuing group<br />
<strong>Apata</strong> <strong>Limited</strong> must not make any distribution, other than a<br />
distribution out of the business profits which is commercially<br />
prudent at the time it is made. Such restriction results from an<br />
ANZ National Bank <strong>Limited</strong> General Security Agreement dated<br />
27 May 2004.<br />
There are no restrictions on the ability of any other member of<br />
the issuing group to make a distribution being restrictions that<br />
result from any undertaking given or contract or deed entered<br />
into, by the issuer or any of its subsidiaries.<br />
There are no restrictions on the ability of any member of the<br />
issuing group to borrow being restrictions that result from any<br />
undertaking given or contract or deed entered into, by the<br />
issuer or any of its subsidiaries.<br />
Auditors’ report<br />
A copy of the auditors’ report on the financial statements for the<br />
year ended 31 March 2008 from KPMG is attached.
Company details<br />
Company name <strong>Apata</strong> <strong>Limited</strong><br />
Company number 205019<br />
Date of incorporation 22 August 1983<br />
Nature of business Packhouse <strong>and</strong> Coolstore operators<br />
Directors David John Goodwin<br />
Max Richard McGreevy<br />
Anthony John Marks<br />
Peter Martyn Mayston<br />
Michael Muller<br />
Paul Rodney O’Brien<br />
Executive Todd Muller, Chief Executive Officer<br />
Colin Reilly, Chief Financial Officer<br />
Bevan Bayne, General Manager Grower Services<br />
Steve Low, Chief Operating Officer<br />
Auditors KPMG<br />
Tauranga<br />
Bankers ANZ National Bank <strong>Limited</strong><br />
Tauranga<br />
Solicitors Sharp Tudhope<br />
Tauranga<br />
Registered office Staples Rodway<br />
132 First Avenue<br />
Tauranga<br />
Number of shares on issue 4,505,484 ordinary shares.<br />
Distribution of Shareholding as at 5 June 2008<br />
No. of Percentage of Percentage Average<br />
shareholders Shares held shareholders of shares holding<br />
Up to 1,999 shares 25 33,905 9.1% 0.8% 1,356<br />
2,000 to 9,999 shares 184 795,790 66.9% 17.6% 4,325<br />
10,000 to 24,999 shares 37 512,763 13.5% 11.4% 13,858<br />
25,000 to 99,999 shares 19 783,557 6.9% 17.4% 41,240<br />
100,000 shares or more 10 2,379,469 3.6% 52.8% 237,947<br />
275 4,505,484 100.0% 100.0% 16,384<br />
apata (annual report 2007/08)<br />
49
apata<br />
partners for growth<br />
Northl<strong>and</strong><br />
37 Southend Avenue<br />
Otaika, Whangarei 0110<br />
p : (09) 430 8003<br />
f : (09) 430 8006<br />
Pyes Pa<br />
83 Pyes Pa Road<br />
Tauranga 3112<br />
p : (07) 543 1211<br />
f : (07) 543 0096<br />
e : reception@apata.co.nz w : www.apata.co.nz<br />
<strong>Apata</strong> head office<br />
Turntable Hill Road, RD 2<br />
Katikati 3178<br />
p : (07) 552 0911<br />
f : (07) 552 0666