SELECT HARVESTS LIMITED — Interim / Quarterly Report 2019

May 30, 2019

SELECT HARVESTS LIMITED ABN 87 000 721 380 AND CONTROLLED ENTITIES

HALF-YEAR INFORMATION FOR THE SIX MONTHS ENDED 31 MARCH 2019 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 three months ended 30 September 2018.

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Rule 4.2A.3

Appendix 4D Half Year Report for the six months to 31 March 2019

Name of entity

Select Harvests Limited

ABN 87 000 721 380

1. Reporting period

Report for the half year ended 31 March 2019

Previous corresponding period is for the three month financial year ended 30 September 2018

2. Results for announcement to the market

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

2. Results for announcement to the market (Allamounts inthis report are expressed in$’000 unless otherwise stated)	2. Results for announcement to the market (Allamounts inthis report are expressed in$’000 unless otherwise stated)	2. Results for announcement to the market (Allamounts inthis report are expressed in$’000 unless otherwise stated)
Revenues from continuing ordinary activities_(item 2.1) Up 47.9% to 99,974 Profit from continuing ordinary activities after tax attributable to members (_item 2.2) Net profit after tax attributable to members_(item 2.3)_ Up Up 1,404.6% 1,404.6% to to 20,038 20,038
Dividends(item 2.4)	Amount per security	Franked amount per security
Interim dividend	12.0 ¢	12.0¢
Previous corresponding period* Final dividend	Nil¢	Nil¢
Record date for determining entitlements to the interim and special dividend (item 2.5)	14 June 2019
Brief explanation of any of the figures reported above necessary to enable the figures to be understood (item 2.6): Pleasereferto the attached announcement.

*- Three months ended 30 September 2018

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3. Net tangible assets per security (item 3)

. Net tangible assets per security	(item 3)
Net tangible asset backing per ordinary security	Current period	Previous corresponding period*
	$3.42	$3.21

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 $ -

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 September 2019 Final dividend – year ended 30 September 2018	Date of payment	Total amount of dividend ($’000)
	5 July 2019	11,456
	N/A	N/A

Amount per security

	Amount per security	Franked amount per security at 30 % tax	Amount per security of foreign sourced dividend
Total dividend:Currentyear(interim)	12.0 ¢	12.0 ¢	Nil ¢
Previousyear(final)	Nil ¢	Nil ¢	Nil ¢

*- Three months ended 30 September 2018

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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
	11,456 - -	- - -
	11,456	-

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.

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

17 June 2019

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	2019 $	2018 $
	- -	- -
	- -	- -
	-	-

• *- Three months ended 30 September 2018

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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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SELECT HARVESTS LIMITED ABN 87 000 721 380 AND CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 MARCH 2019

SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380 FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 MARCH 2019

TABLE OF CONTENTS

	Page
Directors' report	1
Auditor’s independence declaration	4
Financial report for the half-year ended 31 March 2019
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 September 2018 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 “Company”, “the Group” or “the consolidated entity”) for the half-year ended 31 March 2019.

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) M Carroll F S Grimwade N Anderson F Bennett

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 after tax of the group for the half year amounted to $20.04 million (three months ended 30 September 2018 recorded a loss of $1.54 million).

1H19 is Select Harvests first reporting period following the transition to a September financial year end. As previously communicated this transition was undertaken to align the company more closely with its cropping and sales cycle. As a result, the 1H19 and future reported financial results will rely less on key estimates (volumes, price, USD etc.) and provide a more accurate view of the company’s operations and financial position.

Consistent with the requirements of Accounting Standard AASB 141 Agriculture, the crop has been valued at the estimated fair value less costs to sell. Based on approximately 50% of the crop being harvested at balance date, 50% of the fair value of the 2019 crop has been recognised at 1H19. Based on data from the harvested crop and contracted sales the fair value has been calculated assuming a 20,750MT crop at a sell price of AUD$8.50.

The 2019 crop has had ideal growing conditions and to date harvest conditions have also been very favourable. This, in addition to the impact of the horticultural program, new tree health technology, greenfield developments coming on stream and investments in frost fan infrastructure in frost prone orchards, has led to both higher volumes, improved quality and a more efficient cost profile (excluding water). Due to increasingly dry conditions and higher water demand (from irrigator and non-irrigator markets) water costs have increased significantly year on year. This cost increase has been minimised through the Company’s water ownership policy and decisions to acquire 2019 crop temporary water requirements earlier in the year (when prices were lower).

The favorable dry conditions, investment in on-farm crop conditioners and new sorting technology has led to increased processing rates and lower cost per kg currently being achieved.

The macro demand fundamentals for almonds remains strong with continued year on year consumption growth. This, in conjunction with a smaller than expected 2018 USA crop (leading to lower carry over balances), the current USA/China trade dispute and the lower AUD has led to an improved AUD price per kg. Given the amount of 2019 crop under contract and current demand levels in China pricing levels are not expected to decline for the remainder of the uncontracted crop.

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

Overall the Food Division is performing in line with expectations. Industrial Food’s sales are strong with a full future pipeline from new customers in Asian markets. Margins in this area are positive with the Company able to offer a number of value-add options. Domestic Consumer Foods sales are on track however margins remain challenging as a result of increased raw material costs and competition from house brands. Consumer export sales channels are starting to settle down with consistent increases in sales order volumes. New product development opportunities continue to be explored.

The balance sheet is in a strong position. The inventory balance is high as a result of capitalising a majority of the growing costs of the 2019 crop. This will be unwound as the crop is sold in 2H19. This factor also impacts the 1H19 cashflow with operational cash outflows being incurred during the cropping cycle. This will more than offset with receipts for crop sales to flow in the 2H19 – this leads to a negative cashflow in 1H19 and a favourable cashflow in 2H19 (with a positive net operating cashflow forecasted for FY19).

31 March 2019 debt levels are at their seasonal peak and will reduce substantially over the next six months.

We have had zero environmental incidents. The Lost Time Injury Frequency Rate (LTIFR) has reduced by 35% and our Medically Treated Injury Frequency Rate (MTIFR) remains steady. Overall, we have achieved a 22% reduction on our Total Recordable Incident Frequency Rate (TRIFR). These results reflect our ongoing efforts to achieve zero harm and wellbeing.

Business Outlook

Following a positive first half Select Harvests expects 2H19 to deliver a similarly favourable result due to the following:

• Harvest activities are predominantly complete with volumes and quality in line with expectations

• Close to 60% of the 2019 crop has been processed with no major issues identified

• 2019 growing costs are finalised with improved cost per kg (excluding water) and 2019 crop water commitments completed

• Contracted higher hull prices confirmed for the remainder of 2H19

• 80% of the 2019 crop has been contracted for sale at or above rates assumed in the 1H19 results

• The 2019 crop is 75% hedged to the USD (almond sales are transacted in USD)

• Tree health for the 2020 crop is currently in good health

• Industrial food sales are expected to increase at favourable margins particularly into Asian markets

• Continued focus on consumer brand markets for domestic and export growth with increased investment in new product development

• 2H19 debt levels will be significantly reduced due to higher sales receipts (from the increased 2019 crop)

Interim Dividend

On 31 May 2019, the directors declared a fully franked interim dividend of 12 cents per ordinary share to be paid on 5 July 2019 to shareholders registered at 5.00pm on 14 June 2019.

Related party transactions/ Directors’ interest in contracts

Michael Carroll is a director of Rural Funds Management, the responsible entity for Rural Funds Group, which leases orchards to Select Harvests. Additionally, he is a director of Elders Limited which supplies crop inputs, other farm related products and water brokering services to Select Harvests. These transactions are on normal commercial terms and Mr. Carroll is not involved in meetings where these items are discussed.

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

Subsequent Events

No other significant events have occurred subsequent to the 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 4.

Rounding

The amounts contained in this 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 Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191. 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 31[st] day of May 2019

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Auditor’s Independence Declaration

As lead auditor for the review of Select Harvests Limited for the half-year ended 31 March 2019, 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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Andrew Cronin Partner PricewaterhouseCoopers

Melbourne 31 May 2019

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PricewaterhouseCoopers, ABN 52 780 433 757

2 Riverside Quay, 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 STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 MARCH 2019

Note Revenue Sales of goods and services Other revenue Total revenue Other income Inventory fair value adjustment Gain/ (Loss) on sale of assets Total other income Expenses Cost of sales Distribution expenses Marketing expenses Occupancy expenses Administrative expenses Finance costs Other income/ (expenses) PROFIT/ (LOSS) BEFORE INCOME TAX Income tax expense 7 PROFIT/ (LOSS) ATTRIBUTABLE TO MEMBERS OF SELECT HARVESTS LIMITED Other Comprehensive (Expense)/ Income Items that may be reclassified to profit or loss Changes in fair value of cash flow hedges, net of tax Other Comprehensive (Expense)/ Income for the period TOTAL COMPREHENSIVE INCOME/ (EXPENSE) ATTRIBUTABLE TO MEMBERS OF SELECT HARVESTS LIMITED Earnings/ (Loss) per share for profit/ (loss) attributable to the ordinary equity holders of the company: Basic earnings/ (loss) per share (cents per share) Diluted earnings/ (loss) (cents per share)

6 months ended 31 March 2019 $’000 3 months ended 30 September 2018 $’000 99,969 67,500 5 81 99,974 67,581 20,804 (12,675) 516 (3) 21,320 (12,678) (78,742) (51,050) (1,966) (950) (2,653) (566) (683) (478) (6,420) (1,990) (2,082) (1,044) 163 (914) 28,911 (2,089) (8,873) 553 20,038 (1,536) (67) 192 (67) 192 19,971 (1,344) 21.0 (1.6) 21.0 (1.6)

The above 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 BALANCE SHEET AS AT 31 MARCH 2019

Note CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Current tax assets Derivative financial instruments TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment Intangible assets 8 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Interest bearing liabilities Derivative financial instruments Deferred gain on sale Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Interest bearing liabilities Deferred tax liabilities Deferred gain on sale Employee entitlements TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity 9 Reserves Retained profits TOTAL EQUITY	31 March 2019 $’000 30 September 2018 $’000 1,349 6,860 38,630 47,023 148,182 99,410 879 6,404 6 24
	189,046 159,721
	304,319 298,221 65,897 64,679
	370,216 362,900
	559,262 522,621
	26,469 40,319 25,059 4,822 987 929 175 175 4,543 3,167
	57,233 49,412
	69,657 60,958 37,400 37,197 2,715 2,802 185 1,613
	109,957 102,570
	167,190 151,982
	392,072 370,639
	269,909 268,567 9,855 9,802 112,308 92,270
	392,072 370,639

The above 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 CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 MARCH 2019

Balance at 1 October/ 1 July Profit/ (Loss) for the period Other Comprehensive Income Total comprehensive income for the period Transactions with equity holders in their capacity as equity holders: - Contributions of equity, net of transaction costs and deferred tax - Dividend paid (note 5) - Employee performance rights reserve Total equity at the end of the period	6 months ended 31 March 2019 $’000 3 months ended 30 September 2018 $’000 370,639 378,640
	20,038 (1,536) (67) 192
	19,971 (1,344)
	1,342 - - (6,666) 120 9
	1,462 (6,657)
	392,072 370,639

The above 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 CASH FLOWS FOR THE HALF-YEAR ENDED 31 MARCH 2019

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Interest paid Income tax paid Net cash (outflow)/ inflow from operating activities CASH FLOW FROM INVESTING ACTIVITIES Proceeds from Government grants Proceeds from sale of property, plant and equipment Payment for water rights Payment for property, plant and equipment Payment for tree development costs Net cash (outflow) from investing activities CASH FLOW FROM FINANCING ACTIVITIES Proceeds from borrowings Repayments of borrowings Repayment of finance lease Dividends payment on ordinary shares, net of Dividend Reinvestment Plan Net cash inflow/ (outflow) from financing activities Net (decrease)/ increase 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 to cash at the end of the year: Cash and cash equivalents Bank overdraft	6 months ended 31 March 2019 $ ‘000 3 months ended 30 September 2018 $ ‘000 106,317 77,289 (115,874) (49,206)
	(9,557) 28,083 14 7 (2,082) (1,035) (2,787) (2,195)
	(14,412) 24,860
	2,225 55 1,306 - (318) (4,074) (9,076) (5,503) (8,847) (3,504)
	(14,710) (13,027)
	157,333 39,100 (131,033) (40,200) 2,797 (1,356) (5,324) -
	23,773 (2,456)
	(5,349) 9,377 6,610 (2,767)
	1,261 6,610
	1,349 6,860 (88) (250)
	1,261 6,610

The above statement should be read in conjunction with the accompanying notes. - 8 -

SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

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 March 2019 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 three months ended 30 September 2018 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 annual financial report.

New standards and interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for the 31 March 2019 reporting periods and have not been early adopted by the Company. The Company's assessment of the impact of these new standards and interpretations is set out below.

(i) AASB 16 Leases (effective from 1 October 2019)

The standard removes the current distinction between operating and financing leases and requires recognition of an asset (the right to use the leased item) and a financial liability which represents the present value of future lease payments. This is expected to have a significant/ material impact on the amounts recognised in the Group’s consolidated financial statements.

Further to the disclosures made at 30 September 2018, the Company continues to progress its assessment of the standard together with the potential impact on its material leases. As the assessment is ongoing, the company is unable to provide a reliable estimate of its quantitative impact.

There are no other standards that are not yet effective and that are expected to have a material impact on the company in the current or future reporting periods and on foreseeable future transactions.

2. COMPARATIVE INFORMATION

The Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows provide comparative information for the three months ended 30 September 2018. The Balance Sheet provides comparative information as at 30 September 2018.

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

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

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 current and next financial year are discussed below.

Inventory - Prior Years Almond Crops

As at 31 March 2019 the Company held stock related to the 2017 and 2018 almond crop. These almond stocks have been subject to both price and volume variations from estimates previously reflected in the Company’s accounts. The prior year stock values as at 31 March 2019 are: 2017 crop year $ 350,074 2018 crop year $3,903,019

An adjustment of ($1.8M) is included for the six months ended 31 March 2019 to recognize:

• Write-off of remaining 2016 crop year stock due to poor quality

• Adjustments to the value of the 2018 crop due to reduction in sell prices (quality and mix) and increased processing costs related to power prices and plant repairs

At the date of this report all 2017 crop year stock has been sold and the 2018 crop year stock will be completely sold by 30 June 2019.

The recent change to the Company’s financial year will ensure future crop adjustments from prior years is minimal.

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 approximately 50% of the current year’s almond crop has been harvested and 25% processed. The actual crop yield will not be known until it is completely harvested, processed and sold. The assumptions are the estimated average almond selling price at the point of harvest of $8.50 per kg and almond yield based on a crop estimate for Company Orchards of 20,750 metric tonnes giving a half year fair value estimate (50%) of $35.1M.

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

4. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

On 31 May 2019, the Directors declared a fully franked interim dividend of 12 cents per ordinary share to be paid on 5 July 2019 to shareholders registered at 5.00pm on 14 June 2019.

No other significant events have occurred subsequent to reporting date.

5. DIVIDENDS

5. DIVIDENDS
	6 months ended	3 months ended
	31 March	30 September
	2019	2018
	$’000	$’000
(a) Dividends paid during the half-year
Total dividends paid during the half-year	6,666	-
(b) Dividends not recognised at the end of the half-year/
3 months period:
In addition to the above dividends, since the end of the half-year
the directors have declared the payment of a fully franked interim
dividend of 12 cents per fully paid ordinary share (Sep 2018 – Nil
cents fully franked per fully paid ordinary share). The aggregate
amount of the declared dividends expected to be paid on 5 July
2019 out of retained profits at 31 March 2019, but not recognised
as a liability at the end of the half-year, is:	11,456	-

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

6. SEGMENT INFORMATION

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

	31 Mar 2019	30 Sep 2018	31 Mar 2019	30 Sep 2018	31 Mar 2019	30 Sep 2018	31 Mar 2019	30 Sep 2018
	Almond Division ($’000)		Food Division ($’000)		Eliminations and Corporate ($’000)		Consolidated Entity ($’000)
Revenue
Total revenue from external customers	29,148	32,544	70,821	34,956	-	-	99,969	67,500
Intersegment revenue	20,377	10,994	-	-	(20,377)	(10,994)	-	-
Total segment revenue	49,525	43,538	70,821	34,956	(20,377)	(10,994)	99,969	67,500
Other revenue	-	74	-	-	5	7	5	81
Total revenue	49,525	43,612	70,821	34,956	(20,372)	(10,987)	99,974	67,581
EBIT	31,468	(1,013)	2,321	1,216	(2,801)	(1,255)	30,988	(1,052)
Interest received	-	-	-	-	5	7	5	7
Finance costs expensed	(1,136)	(569)	-	-	(945)	(475)	(2,082)	(1,044)
Profit before income tax	30,332	(1,582)	2,321	1,216	(3,742)	(1,723)	28,911	(2,089)
Segment assets (excluding intercompany debts)	486,334	436,356	70,383	72,560	2,545	13,705	559,262	522,621
Segment liabilities (excluding intercompany debts)	(95,656)	(98,689)	(12,440)	(12,983)	(59,094)	(40,310)	(167,190)	(151,982)
Acquisition of non- current segment assets	18,147	12,706	357	152	631	173	19,136	13,030
Depreciation and amortisation of segment assets	7,052	2,989	160	74	308	153	7,520	3,216

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

TAX PAYABLE
	6 months ended	3 months ended
	31 March	30 September
	2019	2018
	$’000	$’000
Profit/ (Loss) from continuing operations before income tax
expense	28,911	(2,089)
Tax at the Australian tax rate of 30% (2018 – 30%)	(8,673)	627
Other assessable items	-	(74)
(Under)/ Over provision of previous year	(200)	-
Income tax (expense)/ benefit	(8,873)	553

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SELECT HARVESTS LIMITED AND CONTROLLED ENTITIES ABN 87 000 721 380

8. INTANGIBLES

(a) Impairment tests for goodwill and brand names

Goodwill is allocated to the Company’s cash-generating units (CGU) identified according to operating segment. The total value of goodwill and brand names relates to the Food Products CGU. The recoverable amount of a CGU is determined based on value-in-use calculations which require the use of assumptions. These calculations use cash flow forecasts based on financial projections by management covering a five year period based on growth rates taking into account past performance and its expectations for the future.

As impairment test is conducted annually and after assessing indicators for any impairment, management is satisfied that impairment testing was not required at 31 March 2019. The latest impairment test was performed for 30 June 2018 with the assumptions made including new product development, enhanced marketing and market penetration and the exiting of lower margin business will improve EBIT over the forecast period. Cash flow projections beyond the five year period are not extrapolated, but a terminal value with a nil growth rate is included in the calculations. A real pre-tax weighted average cost of capital of 11.1% was used to discount the cash flow projections. No material changes in key assumptions arose during the period.

(b) Impact of possible changes to key assumptions

The recoverable amount of the goodwill and brand names in the Food Division exceeds the carrying amount of goodwill at 31 March 2019. Based on impairment testing performed at 30 June 2018, a decrease of 10% in the projected annual cash flows, or an increase of 1% in the pre-tax discount rate of 11.1% does not result in an impairment of the goodwill and brand names. These changes would be considered reasonably possible changes to the key assumptions.

9. EQUITY SECURITIES ISSUED

31 March 2019 Shares No. 30 September 2018 Shares No. Issues of ordinary shares during the half-year Dividend reinvestment scheme issues 243,811 - Contributions to equity	31 March 2019 $’000 30 September 2018 $’000 1,342 -
	1,342 -

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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 5 to 13 are in accordance with the Corporations Act 2001 including:

• i) complying with Australian 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 March 2019 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 31[st] day of May 2019

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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 March 2019, the 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 other explanatory notes and the directors' declaration for Select Harvests Limited. The Group 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 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 half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31 March 2019 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:

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PricewaterhouseCoopers, ABN 52 780 433 757

2 Riverside Quay, 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.

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1. giving a true and fair view of the Group’s financial position as at 31 March 2019 and of its performance for the half-year ended on that date;

2. complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

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PricewaterhouseCoopers

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Andrew Cronin Partner

Melbourne 31 May 2019