SELECT HARVESTS LIMITED — Interim / Quarterly Report 2014

Feb 27, 2014

Select Harvests Limited

1H14 Half Year Results Announcement

28 February 2014

Select Harvests today announces results for the 6 months ended 31 December 2013 (1H14) with a Net Profit After Tax (NPAT) of A$18.4 million.

Overview of Results

• Reported 1H14 NPAT of A$18.4 million compares favorably to the Reported 1H13 Net Loss After Tax (NLAT) of A$19.5 million

• 1H14 NPAT is up 118% on the 1H13 Underlying NPAT of A$8.4 million (excluding the after tax impact of the write down of the WA Almond Orchard Project from the 1H13 result)

• Earnings Before Interest and Tax (EBIT) is up 87% to A$27.0 million (1H13 Underlying EBIT of A$14.4 million)

• Operating cash flow is up 103% to A$23.5million (1H13 A$11.6 million)

The Directors announce an interim dividend (fully franked) of 11 cents per share (1H13 interim dividend 3cps), payable on 24 April 2014 and with a Record Date of 7 March 2014.

Commenting on the result, Select Harvests’ Managing Director Paul Thompson said: “T he result has been driven by a combination of focus on improving yields, further strengthening in almond prices and continuing performance improvement across the business. This has at its foundation our team’s increasing ability to grow, process, nurture and market our high value products at a globally competitive level. The result demonstrates that the strategy the company has taken to increase exposure to the excellent fundamentals of the global almond industry, through investment in growing our almond orchard portfolio, has been a successful one. With a solid balance sheet backed by the ability to generate significant, sustainable cash flows from its portfolio of long life, high quality assets, Select Harvests is well positioned to further benefit from the positive almond industry fundamentals”

Almond Division

Select Harvests 1H14 Almond Division EBIT is A$25.0 million, up 106% on 1H13 Almond Division EBIT of A$12.1 million (excluding the impact of WA Almond Orchard Project write down).

This result includes the benefit of additional earnings in the first half derived from the 2013 crop, and the impact of the estimated value of the 2014 growing crop.

2013 Crop update

The 2013 crop yield has been finalised at 12,669 tonnes, which compares to the estimate of 12,000 MT included in the result at 30 June 2013 . The selling prices being realised on the 2013 crop have resulted in an average of A$6.60/kg, which compares to an assumed A$6.38/kg at 30 June 2013. The benefit of the increased yield and strengthening of the almond prices on the carry over crop have resulted in an increment to earnings in the first half result, which is expected to continue into the second half result as the residual of the crop is sold through.

2014 Growing Season Crop

The 2014 harvest commenced 18 February, with growing conditions remaining favorable to date. Recent rain events have required careful staging of the harvest to minimize any impact on quality. This is aided by new investment in harvesting equipment, and a focus on risk management. The estimate of the valuation of the 2014 growing crop is based on the assumption of a yield out-turn of 12,600 tonnes. This includes an estimate of 900 tonnes relating to the new acquisition of 680 acres in South Australia, with the underlying reduction against the 2013 crop of 12,669 tonnes partially driven by the acreage being replanted. The almond price estimation within the valuation is A$8.30/kg, which recognizes the extent of forward sales contracted, currency hedging in place, and prevailing spot almond prices, which continue to remain strong. Our estimate recognizes that there is still some way to go to complete the harvest, process and grade the product and sell the crop.

South Australian Orchard Acquisition

On 18 November 2013, the Company announced the acquisition of almond orchards near Loxton in South Australia. The total investment is A$16.3 million. This includes 680 acres (275 ha) of mature planted almond orchards, plus vacant land suitable for new almond plantings, equipment and the rights to the proceeds of the 2014 crop.

Processing for third party growers

The company continues to process almonds for a number of third party growers, through utilization of capacity at the Carina West processing facility in Northern Victoria. The company has recently extended its largest contract and secured additional volumes through a new 5 year contract with an independent grower, with volumes expected to be over 3,000 MT per annum.

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Food Division

The Food Division EBIT is $4.028 million, compared to $3.988 million last year, an increase of +1%. Revenues of $64.5 million are down by 13.6% from $74.7 million last year. The reduction in revenues is primarily driven by the impact of the loss of low margin private label contracts. This revenue loss has been offset by revenues in the almond division through sales to export markets.

Of note within the result, sales to industrial customers continue to grow at over 30%, with strengthening margins. Growth in the grocery channel, through our packaged goods business, remains a challenge in an environment of rising commodity prices and tight margins.

Overall the result for the food division is pleasing in the context of the transition that is underway in this part of the business.

Debt and cash flow development

Operating cash flow of A$ 23.5million was reported in the first half of the financial year with strong sales of the 2013 crop in the period. Consistent with strategy, the company continued to invest in earnings accretive almond orchard acquisitions, utilizing the capacity available within the new $135 million debt facilities announced in September 2013. Debt and gearing levels remain well within planned and targeted ranges.

Contingent Liability

The Company is in dispute with Almas Almonds Limited, a company associated with two former Directors of Select Harvests, relating to the provision of orchard management services commencing in 2006. At this time, without a formal claim against the company, and after preliminary investigation, it is not possible to quantify any potential obligation. The company intends to vigorously defend its position.

Outlook

The outlook for the remainder of the 2014 financial year remains positive. Almond prices are anticipated to remain at relatively high levels, driven by supply constraints in California, continuing strong and diverse global demand for almonds, and a relative weakening of the AUD against the USD.

Assuming normal weather patterns throughout the harvest period, yields should be supportive of a strong second half performance. The operational focus will be on securing the optimum value from the 2014 crop through the harvesting, processing and marketing cycles.

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The Company continues to focus on implementation of its key strategy platforms, including:

• evaluation of additional investments in mature and greenfield almond orchard developments where it makes financial sense to do so;

• continued investment in the regeneration of the older almond orchards as part of the 3 year replant program

• the implementation of the new strategy to improve returns in the Food Division through new product innovation and supply chain integration and efficiencies;

• progression with the “One Select” program aimed at enhancing the integrated business model, and aligning business processes and systems.

Select Harvests is now investing in securing and growing the business, both operationally and financially – through replanting programs, orchard acquisitions, benchmarking and yield improvement, staff training and insightful, research driven marketing programs.

ENDS

FOR FURTHER INFORMATION, PLEASE CONTACT:

Paul Thompson, Managing Director 03 9474 3544 Andrew Angus, Investor Relations 0402 823 757

BACKGROUND:

Select Harvests Ltd (ASX:SHV) is an ASX listed, fully integrated almond business consisting of orchards (company owned, leased, joint venture and managed), primary processing (hulling & shelling), secondary processing (blanching, roasting, slicing, dicing, meal), trading (industrial products) and consumer products (Private Label & Brands - Lucky, Sunsol, Soland, Nuvit, Renshaw & Allinga Farms). Select Harvests also import a full range of nuts (in addition to almonds) for inclusion in their Consumer Products range of nut products. Australia is a significant global almond producer and Select Harvests are one of Australia’s largest almond companies, supplying almonds domestically and internationally, to supermarkets, health food shops, industrial segments and the almond trade. The company is headquartered at Thomastown on the outskirts of Melbourne, Australia while its orchards are located in North West Victoria, Southern New South Wales and South Australia. Its primary processing facility (Carina West) is located at Wemen in North West Victoria and the secondary processing facility is located at Thomastown .

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Half Year Results – Key Financial data

$000’s	H FY 2013	H1 FY 2014	%
Revenues	98,719	100,664	+2.0%
EBIT
Almond Division	12,133	25,005	+106%
Food Division	3,988	4,028	+1%
Corporate	(1,758)	(2,070)
Total EBIT	14,363	26,963	+88%
Interest Expense	(2,314)	(2,142)
Profit Before Tax	12,049	24,821	+106%
Tax expense	(3,615)	(6,437)
NPAT (before WA impairment)	8,434	18,384	+118%
WA Impairment	(27,935)	-
NPAT/ (loss) Reported	(19,501)	18,384
EPS (before WA impairment)	14.8 cents	32.0 cents	+116%
Net Debt	61,222	79,688
Gearing	43.8%	45.3%

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SHV Controlled Orchards	Bearing	Bearing	Planted	Planted
	Acres	Hectares	Acres	Hectares
Owned Leased	3,444 1,481	1,394 600	3,663 1,481	1,483 600
Victoria	4,925	1,994	5,144	2,083
Owned Leased	1,511 3,017	612 1,221	1,511 3,017	612 1,221
NSW	4,528	1,833	4,528	1,833
Owned Leased	680 -	275 -	680 -	275 -
South Australia	680	275	680	275
Total Controlled Orchards Managed Orchards	10,133 1,427	4,102 578	10,352 1,427	4,191 578
Total Portfolio	11,560	4,680	11,779	4,769
Orchard Category Owned Leased Managed Orchards	5,635 4,498 1,427	2,281 1,821 578	5,854 4,498 1,427	2,370 1,821 578
Total Portfolio	11,560	4,680	11,779	4,769
Orchard Geography VIC NSW SA	6,352 4,528 680	2,572 1,833 275	6,571 4,528 680	2,661 1,833 275
Total Portfolio	11,560	4,680	11,779	4,769

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SELECT HARVESTS LIMITED ABN 87 000 721 380 AND CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2013

SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380 FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2013

TABLE OF CONTENTS

	Page
Directors' report	1
Auditor’s independence declaration	3
Financial report for the half-year ended 31 December 2013
Consolidated Income Statement	4
Consolidated Statement of Comprehensive Income	5
Consolidated Balance Sheet	6
Consolidated Statement of Changes in Equity	7
Consolidated Statement of Cash Flows	8
Notes to the financial statements	9
Directors' declaration	14
Independent auditor’s review report	15

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the Annual Financial Report for the year ended 30 June 2013 and any public announcements made by Select Harvests Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001

SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

DIRECTORS’ REPORT

The directors present their report together with the financial report of Select Harvests Limited and controlled entities (referred to hereafter as the “consolidated entity” and “group”) for the half-year ended 31 December 2013 and independent review report thereon.

Directors

The names of the directors in office at any time during or since the end of the half-year are:

M Iwaniw (Chairman) P Thompson (Managing Director) R M Herron M Carroll F S Grimwade P Riordan

The directors have been in office since the start of the financial period to the date of this report.

Review of Operations

The consolidated profit of the group for the half year amounted to $18,384,093 (half-year 31 December 2012, loss of $19,500,485). The prior half year result included before tax write downs of biological assets of $26,147,387 and before tax impairment losses of $13,760,204 in relation to property, plant and equipment at the Western Australian Greenfield sites. Excluding the impact of the write downs and impairment losses the consolidated profit for the group in the prior half-year would have been $8,434,830.

Interim Dividend

On 28 February 2014, the directors declared a fully franked interim dividend of 11 cents per ordinary share to be paid on 24 April 2014 to shareholders registered at 5.00pm on 7 March 2014.

Subsequent Events

No significant events have occurred subsequent to reporting date.

Auditor’s Independence Declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 3.

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

Rounding of amounts to nearest thousand dollars

The amounts contained in the report and in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the company under ASIC Class Order 98/0100. The company is an entity to which the Class Order applies.

Signed in accordance with a resolution of the directors:

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Michael Iwaniw Chairman Dated this 28[th] day of February 2014

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Auditor’s Independence Declaration

As lead auditor for the review of Select Harvests Limited for the half-year ended 31 December 2013, I declare that to the best of my knowledge and belief, there have been:

• a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

b) no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Select Harvests Limited and the entities it controlled during the period.

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John O’Donoghue Partner PricewaterhouseCoopers

Melbourne 28 February 2014

PricewaterhouseCoopers, ABN 52 780 433 757 Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001

T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

CONSOLIDATED INCOME STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2013

Note Sales revenue Cost of sales Other revenues from ordinary activities Change in fair value of biological assets Distribution expenses Marketing expenses Occupancy expenses Administrative expenses Finance costs expensed Other expenses from ordinary activities Write down of biological assets – Western Australian orchards Impairment of property, plant and equipment – Western Australian orchards Profit/(loss) before income tax and discount on acquisition Discount on acquisition of assets Profit/(loss) before income tax Income tax (expense) / benefit 5 Profit/(loss) for the half-year Earnings per share for profit attributable to the ordinary equity holders of the company: Basic earnings (cents) per share Diluted earnings (cents) per share	Half-year 2013 $ ‘000 2012 $ ‘000 100,664 98,719 (72,343) (82,685) 124 147 8,019 6,703 (3,144) (3,613) (149) (396) (645) (668) (2,879) (2,118) (2,188) (2,408) (2,720) (1,632) - (26,147) - (13,760)
	24,739 (27,858) 82 -
	24,821 (27,858)
	(6,437) 8,357
	18,384 (19,501)
	32.0 (34.3) 31.0 (34.3)

The above Consolidated Income Statement should be read in conjunction with the accompanying notes

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2013

Profit/(loss) for the half-year Other Comprehensive Income Changes in fair value of cash flow hedges, net of tax Other Comprehensive Income for the half-year TOTAL COMPREHENSIVE INCOME/(LOSS) ATTRIBUTABLE TO MEMBERS OF SELECT HARVESTS LIMITED	Half-year 2013 $ ‘000 2012 $ ‘000 18,384 (19,501)
	1,479 82
	1,479 82
	19,863 (19,419)

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2013

Note ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Derivative financial instruments Assets held for sale TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment Biological assets – almond trees Intangible assets Other receivables TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Interest bearing liabilities 9 Derivative financial instruments Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Interest bearing liabilities 9 Deferred tax liabilities Provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Reserves Retained profits TOTAL EQUITY	31 December 2013 $ ‘000 30 June 2013 $ ‘000 3,291 8,939 23,991 42,142 84,875 66,879 207 343 5,000 5,000
	117,364 123,303
	81,650 75,032 75,896 68,415 37,163 36,281 702 814
	195,411 180,542
	312,775 303,845
	21,701 29,495 1,202 40,873 1,074 3,321 2,012 3,111
	25,989 76,800
	81,777 47,250 27,537 19,579 1,377 711
	110,691 67,540
	136,680 144,340
	176,095 159,505
	98,471 97,007 11,057 9,144 66,567 53,354
	176,095 159,505

The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2013

Balance at 1 July Profit/(loss) for the half-year Other Comprehensive Income Total comprehensive income/(loss) for the half-year Transactions with equity holders in their capacity as equity holders: - Dividends paid (note 7) - Contributions of equity (note 8) - Employee performance rights reserve Total equity at the end of the half-year	Half-year 2013 $ ‘000 2012 $ ‘000 159,505 160,330
	18,384 (19,501) 1,479 82
	19,863 (19,419)
	(5,172) (1,704) 1,464 388 435 65
	(3,273) (1,251)
	176,095 139,660

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2013

CASH FLOW FROM OPERATING ACTIVITIES Receipts from customers (inclusive of goods & services tax) Payments to suppliers and employees (inclusive of goods & services tax) Interest received Interest paid Income tax refunds received Net cash inflow from operating activities CASH FLOW FROM INVESTING ACTIVITIES (Purchase of) / proceeds from sale of water rights Payment for tree development costs Payment for property, plant and equipment Proceeds from sale of property, plant and equipment Payment for almond orchard Net cash outflow from investing activities CASH FLOW FROM FINANCING ACTIVITIES Proceeds from borrowings Repayment of borrowings Dividends paid to the company’s shareholders Net cash inflow/(outflow) from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the half-year Cash and cash equivalents at the end of the half-year Reconciliation of cash and cash equivalents Cash and cash equivalents as per consolidated balance sheet Bank overdraft included in interest bearing liabilities Cash and cash equivalents as per consolidated statement of cash flows	Half-year 2013 $ ‘000 2012 $ ‘000 122,154 112,279 (96,147) (99,158) 124 95 (2,596) (2,446) - 852
	23,535 11,622
	(882) 2,339 (1,040) (5,086) (2,201) (2,412) 393 566 (16,601) -
	(20,331) (4,593)
	57,000 - (61,473) (750) (3,708) (1,317)
	(8,181) (2,067)
	(4,977) 4,962 7,066 66
	2,089 5,028
	3,291 5,028 (1,202) -
	2,089 5,028

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2013

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation of half-year report

This general purpose interim financial report for the half-year ended 31 December 2013 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 .

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual financial report for the year ended 30 June 2013 and any public announcements made by Select Harvests Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 .

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

The AASB has made small changes to some of the disclosures that are required under AASB 136 Impairment of Assets. These may result in additional disclosures if the group recognises an impairment loss or the reversal of an impairment loss during the period. They will not affect any of the amounts recognised in the financial statements. The group intends to apply the amendment from 1 July 2014.

Adoption of new and revised Standards and interpretations

In December 2013, the IASB approved a number of amendments to International Financial Reporting Standards as a result of the annual improvements project. While the AASB has not yet made equivalent amendments to the Australian Accounting Standards, they are expected to be issued in the first quarter of 2014. The group does not expect that any adjustments will be necessary as the result of applying the revised rules.

AASB 9 Financial Instruments , AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 , AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010), AASB 2012-6 Amendments to Australian Accounting Standards - Mandatory Effective Date of AASB 9 and Transition Disclosures and AASB 2013-9 Amendments to Australian Accounting Standards - Conceptual Framework, Materiality and Financial Instruments (effective for annual reporting periods beginning on or after 1 January 2017)

The new hedging rules align hedge accounting more closely with the entity's risk management. As a general rule, it will be easier to apply hedge accounting going forward. The new standard also introduces expanded disclosure requirements and changes in presentation. The group has not yet assessed how its own hedging arrangements would be affected by the new rules and it has not decided whether to adopt the new rules early. In order to apply the new hedging accounting guidance, the group would have to adopt AASB 9 and the amendments to AASB 9, AASB 7 and AASB 139 in their entirety.

2. COMPARATIVE INFORMATION

The Statement of Comprehensive Income, Statement of Changes in Equity, and Statement of Cash Flows provide comparative information for the half-year ended 31 December 2012. The Balance Sheet provides comparative information as at 30 June 2013.

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2013

Where necessary, the comparatives have been reclassified and repositioned to be consistent with the current year disclosures.

3. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

The consolidated entity makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. In addition to those critical accounting estimates and assumptions disclosed in the Group's previous annual financial report, the estimates and assumptions that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Inventory - Current Year Almond Crop

The current year almond crop is classified as a biological asset and valued in accordance with AASB 141 "Agriculture". In applying this standard, the consolidated entity has made various assumptions at the interim balance date as the current year almond crop is only partially through the growing season. The main assumptions include future almond selling prices of $8.30 per kg and almond yield based on a crop estimate for Company Orchards of 12,600 metric tonnes (includes impact of acquisitions in the period) and costs are broadly consistent with prior periods. The actual outcome of these assumptions will not be known until the almond crop is brought through to harvest and sold.

Almond Trees

Almond trees are classified as a biological asset and valued in accordance with AASB 141 "Agriculture”. As at 31 December 2013, the value of almond trees carried in the financial statements of the Company is $75.9 million (2013:$68.4 million). The valuation of almond trees is very sensitive to the assumptions of the long term almond price and yields and therefore any change to these assumptions may have a material impact on these valuations. These assumptions remain consistent with those disclosed in the 2013 Annual Financial Report, including a long term average almond price of $6 per kilogram.

4. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

On 28 February 2014, the Directors declared a fully franked interim dividend of 11 cents per ordinary share to be paid on 24 April 2014 to shareholders registered at 5.00pm on 7 March 2014.

No significant events have occurred subsequent to reporting date.

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2013

5. NUMERICAL RECONCILIATION OF INCOME TAX EXPENSE TO PRIMA FACIE TAX PAYABLE

Profit from continuing operations before income tax expense Tax at the Australian tax rate of 30% (2012 – 30%) Over provision of previous year Income tax expense / (benefit)	Half-year 2013 $ ‘000 2012 $ ‘000 24,821 (27,858)
	7,446 (8,357) (1,009) -
	6,437 (8,357)

6. BUSINESS COMBINATIONS

(a) Summary of Acquisitions

On 19 December 2013 Select Harvests acquired from Harmon Holdings Pty Ltd, 2,430 acres of land, including 680 acres of mature planted almond orchards, in the Riverland region of South Australia for $16.3 million cash consideration, which included $12.8 million for the orchard assets and $3.5 million for title to the 2014 crop.

The provisional fair values of assets and liabilities recognised as a result of the acquisitions are as follows:

Plantation land and irrigation systems Biological assets – almond trees Inventory Plant and equipment Deferred tax liability Net Identifiable Assets Net cash outflow on acquisition Receivable from sale of land and buildings Total purchase consideration Discount arising on acquisition	Fair Value $’000 5,733 6,311 3,500 851 (35)
	16,360 16,601 323
	16,278
	82

Included in other expenses in the income statement are transaction costs totaling $1.0 million relating to statutory, legal and advisors fees associated with the acquisition.

(b) Revenue and profit contribution

If the acquisitions had occurred on 1 July 2013, no revenue would be recognised and the consolidated profit before tax for the half-year ended 31 December 2013 would have been $2,223,200, through the fair value of the current year crop. These amounts have been calculated using the group’s accounting policies by adjusting the results of the group to reflect the biological asset fair value adjustment that would have been taken up and the additional depreciation that would have been charged had the assets been owned from 1 July 2013.

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2013

7. DIVIDENDS

7. DIVIDENDS
	Half-year
	2013	2012
	$ ‘000	$ ‘000
(a) Dividends paid during the half-year
Total dividends paid during the half-year	5,172	1,704
(b) Dividends not recognised at the end of the half-year:
In addition to the above dividends, since the end of the half-year
the directors have declared the payment of an interim dividend of
11 cents per fully paid ordinary share (2012 – 3.0 cents per fully
paid ordinary share), fully franked based on tax paid at 30%. The
aggregate amount of the declared dividends expected to be paid
on 24 April 2014 out of retained profits at 31 December 2013, but
not recognised as a liability at the end of the half-year, is:	6,360	1,715

8. EQUITY SECURITIES ISSUED

Half-year 2013 Shares 2012 Shares Dividend reinvestment scheme issues 352,869 338,413 Contributions of equity	Half-year 2013 $’000 2012 $’000 1,464 388
	1,464 388

9. INTEREST BEARING LIABILITIES

The interest bearing liabilities relate to commercial bills drawn against the banking facility.

During the half-year to 31 December 2013, the Company secured a refinancing of its bank facilities to provide increased capacity, longer tenure and lower funding costs. The banking facilities now comprise $135 million of capacity as follows:

Debt facilities	Term	Facility Limit
1. Term debt (non amortising) 2. Working capital* 3. Acquisition	5 years 18 months/2 years 2 years	$50,000,000 $60,000,000 $25,000,000
		$135,000,000

*: $30,000,000 of the facility has an 18 month term, the remaining $30,000,000 has a two year term.

At 31 December 2013 this facility plus the US dollar overdraft facility was drawn to $82 million.

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2013

10. CONTINGENT LIABILITY

The Company is in dispute with Almas Almonds Pty Ltd, a company associated with two former Select Harvests Limited directors, relating to the provision of orchard management services commencing in 2006. At this time, without a formal claim against the Company and after preliminary investigation, it is not possible to quantify any potential obligation. The Company intends to vigorously defend its position.

11. SEGMENT INFORMATION

The segment information provided to the Chief Executive Officer is referenced in the following table:

Revenue Total revenue from external customers Intersegment revenue Total segment revenue Other revenue Total revenue	Food Products ($'000)	Almond Division ($'000)	Almond Division ($'000)	Eliminations and Corporate($'000)	Consolidated Entity ($'000)
	2013 2012	2013	2012	2013 2012	2013 2012
	64,534 74,700 - -	36,130 7,291	24,019 5,948	- - (7,291) (5,948)	100,664 98,719 - -
	64,534 74,700	43,421	29,967	(7,291) (5,948)	100,664 98,719
	- -	77	51	47 96	124 147
	64,534 74,700	43,498	30,018	(7,244) (5,852)	100,788 98,866
EBIT	4,028 3,988	25,005	(27,775)	(2,070) (1,758)	26,963 (25,545)
Interest received Finance costs expensed Profit before income tax Segment assets(excluding intercompany debts)	- - - -	- -	- -	46 95 (2,188) (2,408)	46 95 (2,188) (2,408)
	4,028 3,988	25,005	(27,775)	(4,212) (4,071)	24,821 (27,858)
	68,504 68,267	243,758	178,584	513 1,677	312,775 248,528
Segment liabilities(excluding intercompany debts)	11,778 17,622	42,666	30,539	82,236 63,502	136,680 111,663
Acquisition of non-current segment assets	133 198	19,693	7,288	16 13	19,842 7,499
Depreciation and amortisation of segment assets	250 316	1,566	2,524	15 47	1,831 2,887

2012 Almond Division EBIT includes the impact of biological asset fair value write downs and impairment losses on property, plant and equipment in relation to the Western Australian orchards with a combined impact of $39.9 million. Excluding the impact of the write downs and impairment losses the Consolidated Entity EBIT would have been $14.4 million.

Note: The previously reported Managed Orchards Almond Division and the Company Orchards Almond Division are reported as a single “Almond Division” operating segment. Management considers that the Managed Orchards Almond division segment no longer meets the definition of an operating segment following the completion of the Olam contract and other structural changes. Decision making by the Chief Executive Officer and the related organisational structures are no longer aligned to the separate segmentation.

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

DIRECTORS’ DECLARATION

In the directors’ opinion:

• a) the financial statements and notes set out on pages 4 to 13 are in accordance with the Corporations Act 2001 including:

• i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

• ii) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2013 and of its performance for the half-year ended on that date; and

• b) there are reasonable grounds to believe that Select Harvests Limited will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the directors.

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Michael Iwaniw Chairman Dated this 28[th] day of February 2014

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Independent auditor’s review report to the members of Select Harvests Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Select Harvests Limited (the company), which comprises the consolidated balance sheet as at 31 December 2013, the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, selected explanatory notes and the directors' declaration for the Select Harvests Limited group (the consolidated entity). The consolidated entity comprises the company and the entities it controlled during that half-year.

Directors' responsibility for the half-year financial report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Australian Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2013 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Select Harvests Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 .

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Select Harvests Limited is not in accordance with the Corporations Act 2001 including:

• a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2013 and of its performance for the half-year ended on that date;

• b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

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PricewaterhouseCoopers

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John O’Donoghue Partner

Melbourne 28 February 2014

PricewaterhouseCoopers, ABN 52 780 433 757

Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

SELECT HARVESTS LIMITED ABN 87 000 721 380 AND CONTROLLED ENTITIES

HALF-YEAR INFORMATION FOR THE SIX MONTHS ENDED 31 DECEMBER 2013 PROVIDED TO THE ASX UNDER LISTING RULE 4.2A

This half-year financial report is to be read in conjunction with the financial report for the year ended 30 June 2013.

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Rule 4.2A.3

Appendix 4D Half Year Report for the six months to 31 December 2013

Name of entity Select Harvests Limited ABN 87 000 721 380

1. Reporting period

Report for the half year ended 31 December 2013 Previous corresponding period is the financial year ended 30 June 2013 and half year ended 31 December 2012

2. Results for announcement to the market

(All amounts in this report are expressed in $’000 unless otherwise stated)

Revenues from continuing ordinary activities_(item 2.1)_	Up	1.9%	to	100,788
Profit (loss) from continuing ordinary activities after tax	Up	194.3%	to	18,384
attributable to members (item 2.2)*
Profit excluding prior year impact of Western Australian	Up	118.0%	to	18,384
orchard biological asset fair value write downs and
impairment losses on property, plant and equipment*
*Prior year loss from continuing activities after tax
includes the impact of biological asset fair value write
downs and impairment losses on property, plant and
equipment in relation to the Western Australian
Greenfield orchard development with a combined impact
of $27.9m after tax

Dividends(item 2.4)	Amount per security		Franked amount per
			security
Interim dividend	11.0¢		11.0¢
Previous corresponding period
Interim dividend	3.0 ¢		3.0 ¢
Record date for determining entitlements to the interim	7 March		2014
and special dividend
(item 2.5)
Brief explanation of any of the figures reported above necessary to enable the figures			to be understood
(item 2.6):
Pleasereferto the attached announcement.

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3. Net tangible assets per security (item 3)

Net tangible asset backing per ordinary security	Current period	Previous corresponding period
	$2.40	$1.81

4. Details of entities over which control has been gained or lost during the period: (item 4)

Control gained over entities

Name of entities (item 4.1) - Date(s) of gain of control (item - 4.2) Contribution to consolidated profit (loss) from ordinary $ - activities after tax by the controlled entities since the date(s) in the current period on which control was acquired (item 4.3) Profit (loss) from ordinary activities after tax of the $ - controlled entities for the whole of the previous corresponding period (item 4.3)

5. Dividends (item 5)

5. Dividends(item 5)
Interim dividend – year ended 30 June 2014 Interim dividend – year ended 30 June 2013	Date of payment	Total amount of dividend ($’000)
	24 April 2014	6,360
	26 April 2013	1,715

Amount per security

	Amount per security	Franked amount per security at 30 % tax	Amount per security of foreign sourced dividend
Total dividend:Currentyear(interim)	11.0 ¢	11.0 ¢	Nil ¢
Previousyear(interim)	3.0 ¢	3.0 ¢	Nil¢

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Total dividend on all securities

Total dividend on all securities
Ordinary securities_(each class separately) Preference securities(each class separately) Other equity instruments(each class separately)_ Total	Current period $'000	Previous corresponding Period -$'000
	6,360 - -	1,715 - -
	6,360	1,715

6. Details of dividend or distribution reinvestment plans in operation are described below (item 6) :

The interim dividend may be reinvested in ordinary shares under the company’s Dividend Reinvestment Plan at a 2.5% discount to the DRP price.

The last date(s) for receipt of election notices for 7 March 2014 participation in the dividend or distribution reinvestment plan

7. Details of associates and joint venture entities (item 7)

Name of associate or joint venture entity

%Securities held

N/A

Aggregate share of profits (losses) of associates and joint venture entities

Group’s share of associates’ and joint venture entities’: Profit (loss) from ordinary activities before tax Income tax on ordinary activities Net profit (loss) from ordinary activities after tax Adjustments Share of net profit (loss) of associates and joint venture entities	2013 $	2012 $
	- -	- -
	- -	- -
	-	-

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8. The financial information provided in the Appendix 4D is based on the half year condensed financial report (attached), which has been prepared in accordance with Australian accounting standards.

9. Independent review of the financial report (item 9)

The financial report has been independently reviewed. The financial report is not subject to a qualified independent review statement.

10. Matters relating to a qualified independent review statement

A description of the dispute or qualification in respect of the independent review of the half-year financial report is provided below (item 17)

N/A

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