Minutes of General Meeting of. Specific Vineyard 3 Limited ACN (the Company) on Friday 25 November 2011 at 2.

Transcription

1 Minutes of General Meeting of Specific Vineyard 3 Limited ACN (the Company) at rooms of Dr Daniel Lewis, 73 Chapel St, St Kilda VIC on Friday 25 November 2011 at 2.30 pm MINUTES Present: Greg McMahon (Chairman) Helen and Seng Ng (representing ST Ng Pty Ltd ATF ST Ng Super Fund) Lester Peters (representing Ledak Interests Pty Ltd ATF Perardua Pension Fund) Daniel and Bev Lewis (representing Daniel Lewis Pty Ltd ATF Daniel Lewis Super Fund) By proxy: Apologies: Pam Securities Pty Ltd ATF Mario Pozzebon Family Trust QM Consultants Pty Ltd ATF Holdsworth Boulton Super Fund Brian McGuigan CHAIR AND SECRETARY Greg McMahon took the chair and kept minutes of the meeting. The proxies were submitted and quorum confirmed as defined in the Company s Constitution was present and the Chairman announced that the Meeting was therefore properly constituted and could proceed. Greg McMahon presented the slides prepared for the meeting (attached to these minutes). BUSINESS ITEMS There was no other business. CLOSE OF MEETING There being no further business the Chairman declared the meeting closed at 3.00pm. Signed as a correct record: Chairman 6/12/2011

2 Orchard Funds Management. Growing Futures.

3 Important notice: No personal advice Seven Fields Management Limited ( SFML ) ABN AFSL No has prepared this for general information only. It does not take into account your current or future financial circumstances. It is important for you to consider these matters before you make an investment decision on holding or acquiring financial products. SFML is the administration manager for Specific Vineyard 3 Limited. Whilst due care has been taken in the compilation of this summary, and we believe that the information contained herein is based on reliable current relevant information, we do not guarantee the absolute accuracy of such information or the integrity of source material, nor do we accept responsibility for any errors and omissions which may subsequently be found evident in our presentation. Do not rely on forward-looking statements This presentation contains forward-looking statements. These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, at the date of the presentation, are more likely than not to take place. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors that are beyond the control of SFML and its officers and employees. SFML does not give any assurance that the results, performance or achievements expressed or implied by the material contained in this presentation will actually occur and growers/unitholders are cautioned not to place undue reliance on these forward-looking statements. 2

4 Annual General Meeting for Specific Vineyard 3 Ltd 25 November 2011 at 2.30pm Rooms of Dr Daniel Lewis 73 Chapel St, St Kilda Victoria 3182.

5 Meeting agenda 1. Opening of meeting 2. Confirmation of appointment of Chairman 3. Admission of proxies 4. Confirmation of quorum 5. Presentation of Annual Report 6. Vintage Outlook for Wine industry, AVL and strategy 9. Close

6 Consideration of the Annual Report 1. The annual report for the year ending 30 June 2011 was completed on 29 September 2011 and posted on our website. 2. The Corporation Act requires it to be laid before the AGM. No vote is required. 3. Highlights: Operating profit of $1,111,895 for the year (around three times budgeted profit) Significant capital investment during the year, amounting to $778,341 of which $481,355 was purchased outright Despite the capital investment, still a positive cash generation of $62,077 Dividend paid in August 2011 of $750,000. Normal dividends projected at around $300, Bank debt is currently $2.86 million (LVR of 48%)

7 Financial Summary - Profit and loss account comparison (2011 vs. 2010) Explanation $ $ Revenue and other income Farm income 3,368,683 2,690,588 Higher yield in 2011 Water sales - 42,000 Recharge of temporary water to AVL in 2010 (one-off) Interest 66,992 27,517 Average cash balance higher in 2011 Total revenue and other income 3,435,675 2,760,105 Expenses Direct farm operating expenses (1,495,503) (1,401,508) Slight increase in 2011, change in operating structure in October 2009, 2011 includes 12 months farm management fees Net changes in fair value of investment properties - (2,123,956) Revaluation downwards as a result of professional valuation on 3 Sept 2010 Management fees (392,324) (193,532) Other administration expenses (207,236) (104,829) Finance costs (228,717) (195,631) Profit/(loss) before tax 1,111,895 (1,259,351) Tax provision (333,568) 361,102 Increase in Responsible Entity fees due to incentive fee paid in 2011 of $136,002. Also 2010 only included 9 months of management fees (other 3 months were included int he Project prior to cessation). Significant investment in CAPEX in 2011 meant an additional $98k depreciation charged in the year Higher interest costs in 2011 due to: 1. Finance leases taken out in $19k; and 2. Additionl bank interest of $21k due to lower interest rates late 2009 Profit/(loss) after tax 778,327 (898,249) Earnings before interest, tax, depreciation & amortisation (EBITDA) 1,403,023 1,056,209 Declared distribution 750, ,000

8 Financial Summary - Balance Sheet comparison (2011 vs. 2010) Explanation $ $ ASSETS Cash and cash equivalents 1,170,654 1,108,577 Higher amount due from AVL as a result of high yields - received after 30 Trade and other receivables 1,865,734 1,061,316 June 2011 Property, plant & equipment 2,623,725 2,032,091 Significant capital investment in year Agricultural assets 2,508,265 2,508,265 Intangible assets 1,540,000 1,540,000 Deferred tax assets 17,523 4,519 Total assets 9,725,901 8,254,768 LIABILITIES Trade and other payables 1,804, ,593 Higher payables including: AVL baume penalty of $246,000 in 2011, $750,000 distribution provision in 2011 vs $150,000 in 2010, incentive fee provision in 2011 of $136,000 Finance leases 238,567 - Balance owed on finance leased assets taken out in 2011 Current tax liability 112, ,940 Borrowings 2,860,000 2,860,000 Deferred tax liabilities 235, ,664 Total liabilities 5,251,762 3,825,197 Net assets 4,474,139 4,429,571

9 Vintage 2011 Variety Hectares Budgeted Tonnes Estimated Tonnes (Dec 2010) Actual Tonnes Canada Muscat Chardonnay 108 2,650 3,450 3, Traminer ,220 1, Merlot , Petit Verdot ,050 1, Tempranillo Total ,326 7,020 7,571.36

10 Vintage was very difficult due to weather conditions disease pressure was high More spraying and summer pruning Fruit wouldn't ripen properly Winery could not keep up some grapes over ripe In the end a pleasing result

11 Outlook for 2012 Expect cropping levels to be between 9 11 tonnes per acre, variety dependent Fruit development looks 2 weeks ahead of last season To date weather has been good, and disease pressure is low Weather outlook is for above average rainfall over the next 3 month

12 General Update 1. Wine industry Wine industry and grape prices are showing signs of light. Report from Austwine says some price increases, particularly Shiraz, Cabernet Sauvignon and Merlot; and even Chardonnay is making a modest comeback. The persistently high AUD and little evidence of vine removal means 2012 won t contribute much to reducing the glut. 2. AVL produced a solid result: NP before extraordinary items up 72% (10.2m) EBIT margin increased by 30% to 13% Re-commenced dividend payment at 2.5c/share Achieved International ti White Wine Maker of the year (2 nd time) and won medals in 33 out of 39 categories entered at the International Wine and Spirit competition in the UK

13 General Update 3. Strategy The strategy for the vineyard is unchanged: Continue to operate the vineyard The strategy for the vineyard is unchanged: Continue to operate the vineyard to maintain its production capacity and then consider a sale when conditions improve.

14 Close of Annual General Meeting for Specific Vineyard 3 Limited

15 Orchard Funds Management. Growing Futures.