‘The Matyorough Sugar Factory Limited The Maryborough Sugar Factory Limited ABN I 009 658 708 Appendix 4D Half Year Report — Period Ended 31 December 2005 Lodged with the ASX under Listing Rule 4.2A. ‘This information should be read in conjunction with the 30 June 2005 Annual Report, CONTENTS Results for Announcement to the Market. Directors’ Report... Tncome Statement Balance Sheet... ‘Statement of Changes in Equit Statement of Cash Flows... Notes to the Financial Statements, Supplementary Appendix 4D Informatio Directors’ Declaration. Auditors’ Independence Declaration Independent Review Report... Paget‘The Matyorough Sugar Factory Limited Results for Announcement to the Market Half year ended 31 December 2005 (Previous corresponding period: Half year ended 31 December 2004) $1000. Revenue from ordinary activities up Te] wo 33,8 Profit/(oss) irom ordinary setviies after ax aterbutabe t9 members up 100% | 5st ‘Net profit/(loss) for he period atvibutable wo members wp 100% | 5.881 Dividendsdistributions “Amvoum per security Franked amount per security Tterioy dividend (eurvent hall year} Nir Na Tnterim divlond (prior year) Nir Ni Record date for determining entitlements to the dividend Not applicable Expl the Directors’ Report. ations of movements in revenue and profits and comments relating fo dividends are contained in Page 2‘The Matyorough Sugar Factory Limited Directors’ Report ‘The Directors ef The Maryborough Sugar Factory Limited present their report on the results far the hal year ‘ended 31 December 2005, Directors “The diseewors of the company during or since the end of the hal? yeur and up 1 the dawe of this report are as follows: LC. Sandiord (Chairman) RR Savage FA. Tackson FE. Burman Review of Operations Business Activities: ‘The company's principal husiness activities are conducted at Maryborough in the Stave of Queensland. Al of Queensland's sugar preduction is sold (hrough the single marketing desk, Queensland Sugar Limited, and 4s, therefore, expose & lucluslions ia world sugar prices and exchange rates. Results: Revenue of $35,448,000 for the half year ended $1 December 2005 as 7% higher than the $33,145,000 recorded in the previous corresponding period, resulting hom 23% increase in expected sugar price, offset o some extent by an 18% decrease in supar production, Profit for the half year alter tax was $5,851,000 compared with $2,921,000 afte tax for the comesponding period ended 31 December 2004, ‘The increase in profi after tax resiis from the factors nffecting revenue above snd receipt of the SIRP Sustainability Grant below. Cogeneration: Work has commenced on the 82.4 million fuetory upgrade and turbo alternator installation announced in November 2005 and is scheduled for completion by mid-Fune 2096, ‘Sugar Industry Reform Program 2004 (SIRP): ‘The second tranche of the Sustainability Grant made available under the Australian Government's SIRP was delivered wo the industry in September 2008. The company roceivedt $706,040 roms this payment Full Year Results Fall yeur results will reflect the seasonal nature of the sugar industry ~ principally, the effects of recognising the majority of revenue in Uke frst half year, offset by significant maintenance costs in the second hall. Based ou the information available directors are expecting thar the company will record a pre-tx operating profit between $1.7 million and $2 million for the full year Dividend Dirgetors have not declared sn interim dividend fur remain conscious of the need to eetum the company to the ‘payment of regular dividends as sova as possible, Page 3‘The Matyorough Sugar Factory Limited Directors’ Report continued Going Concern Since and including the report for the half year ended 31 December 2003, directors have considered it appropriate make reference lo the significant uncertainty surrounding the future of the Australian sugar industry and the potential adverse effect of cominuing low sugar prices on the company's abilily to consinue us a going concem, et strength in and outlook for world sugar prices, divectors ate no longer of the view that there is cant uncertainly whether the company will continue as a going concern or whether it will realise its assets, and extinguish is liabilities in the normal cause of business at the amounts stated in this half year report. Rounding ‘The company is of a kind referred to in Class Order 98/0100 issued by the Australian Securities und Investments relating to the “rounding off” of amounts én the financial report, Amounts in the financial report bbeon rounded 10 the nearest thousand dollars unless specifically stated to be otherwise. ‘Signed in accordance with 4 resolution of the directors. LC. Sandford Chaicman Brishane, 27 Febraary, 2006, Paged‘The Matyorough Sugar Factory Limited Income Statement Half year ended 31 December 2005 Notes Hall Year 2008 2004 $7000 000) Revenue 35,135 33814 Other income 2 1,062 (609) Cost of cane and other materigls used 22,128) 22,237) Employee henefits expense (3.784) (3.299) Depreciation expense sty «in Borrowing costs expense 69 amy Administrative costs expense (1,087) cry Other expenses «9799 (1.992) Profit before income tax expense re Income tax expense «898) (990) Profit 6 Ses OTT Net profit attributable to members 5,881 2921 Cents Cents Basic earnings per share 188.7 90.0 Diluted earnings per share 158.7 ona ‘The above income statement should he read in conjunction with the accompanying notes. Page 5‘The Matyorough Sugar Factory Limited Current Assets Cash assets Receivables Inventories Standing crops Other Total current assers Non-carrent assets Receivables Investnents Avaitable-for-sale financial assets Property, plant and equipment Deferred ax assets ‘Tova non-current assets Total assets (Current liabilities Payables Interest bearing Hiabities ‘Vax liabilities Provisions ‘Fotal cument liabilities Non-current lishitities Interest bearing Fisbilities Provisions ‘Toval non-current liabilities ‘Total liabilities Net assets, Equity Contributed equity Reserves Retained proviis Total equity Balance Sheet as at 31 December 2005 31 December 30 June 31 December 2005 2005 2004 Notes sr000 S000 s'000) M9 16 328 - 1,156 1156 1244 - : 25,772 25,520 25.614 ‘451 - 27.616 6352 TOs 44,801 31307 40579 1,783 1143 1.459 1646 - 991 444 442 3.686 10.222 13,616 6,009 12,506 3,185 25.298 28.073, 4.799 4.199 4,799 5 4,208, 4nd 4,072 22.278 16,427 19.202 31,185 25,208 28,073, ‘The above balance sheet should be read in conjunction with the accompanying notes. Page 6‘The Matyorough Sugar Factory Limited Statement of Changes in Equity Half year ended 31 December 2005 Half Year Notes 2005: 2004 7000 7000) ‘Total equity at the beginning of the half year 25,298 21,190 Adjustment on adoption of AASB 132 and AASB 139, nel of tax any - Avnilable-for-sale finaneiat assets reserve, net oF tax 207 - Net income recognised diveetly in equity 8 6 - Profit for the haif year 5851 2921 ‘Total recognised income and expense for the half year S387 Do ‘Transactions with equity bolders in thoie capacity as equity holders: Conoibutions of equity, net of transaction costs : 3.962 Dividends provided for or paid : . eR ‘Total equity at the end of the half year 38S 28,073, ‘The above statement of changes in equity should be read in conjunction with the accompanying notes. Page?‘The Matyorough Sugar Factory Limited Statement of Cash Flows Half year ended 31 December 2005 Half Year 2005 2008 Inflows Inflows Nos (Outflows} — @uttows} $7000 7000 Cash flows from operating activities Receipts from customers (inclusive of goods & services tax) 25,498 27970 Payments (© suppliers and employees (inclusive of goods & (24544) (26,887) services tax} 954 1,083 Dividends received 196 55 Interest received 4 6 Interest paid (208) (90) ‘Net cash inflow from operating act 956 1074 ‘Cash flows from investing activities Payments for property, plant and equipment (547) (484) Payments for available-for-sale financial assets (38) : Proceeds from sale of property, plant and equipment 45 w Loan repayments (rom olher entities 229 7) Net cash outflow from investing activities ey (405) Cash flows from financing activities Proweeds from issus of shares . 4023 Share issue costs : (os) Repayment of herrowings Gan (aan Net cash inflow (outflow) from financing activities aay a7 Net inerease (decrease) in eash held (596) 1,496 Cash at heginaing of period (ass) (2,068) ‘ash at the end of period 3 oar ery ‘The above statement of ensh flows should be read in conjunction with the accompanying notes, Page ®‘The Matyorough Sugar Factory Limited Notes to the Financial Statements Half year ended 31 December 2005 Note 1. Summary of significant accounting policies “This general purpose Financial report For the interim bal? year reporting period ended 31 December 2605 has been prepare in accordance with Accounting Standasd AASB 134 Interim Firunrial Reporting. the Corporations Aes 2001 ‘This iatrinn Financial report dees Wot ictage all the notes of the Lype normally included in an annual fens report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2005 and any public zonouncements made by The Maryborough Sugar Factory Limited duting the imerim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2007. (a) Basis of preparation of half year financial report Application of AASB 1 First-time Adoption of Austration Equivatenis to International Financial Reporting Standards (ATERSS ‘This interim financial report is the company’s First interim financial report to he prepared in gevordance with AIFRSs. AASB I First Time Adoption of Australian Equivatems to International Financial Reporting ‘Standards bss been applied in preparing these Financial statements Until 30 June 2005 the company's financial starements had heen prepared in accordance with previous Australian Generally Accepted Accounting Principles (AGAAP}. AGAAB differs in certain respet AIFRS, When preparing the interim financial report for the half year ended 31 December 2005, management has amended certain accountiig and valuation methods applied in the previous AGAAP financial statements 10 comply with AIRS. With the exception of financial instruments the comparative figures were restated (0 reflect se adjustments, The company has taken the exemption available under AASB 1 to only apply AASB 132 Financial Inseruments: Disclosure and Presentation and AASB 139 Finumciat Instruments: Recognition anit Measureneens trons 1 July 2008, Reconciliations and descriptions of the effect of ransition from previous AGAAP lo AIFRSS on the company's ‘equity and its nel income are given in nove 7. Historical cost convention ‘These financial statements have been prepared under the historical cost convention, as mostified by the revaluation of available-for-sale financial assets und certain classes of property, plant and equipment (b) Segment reporting ‘The vompany operates predorainanlly in one business segment. The principat wotivity of dhe company is dhe manufacture oF raw sugar, The company operates predominantly in one geopraphic area, being Maryhorough, Queensland, Australia, (©) Revenue recognition (i) Sugar saies Stoger is sequited by Queensland Sugar Limited (QSL) under the provisions of the Sugar Industry Act and is LUcemed 10 have been sold as iis produced. Revenue is recognised based on the estimated fins pool price us advised by QSL adjusted for the mioverient in fair value of standing crops. Page 9‘The Matyorough Sugar Factory Limited Notes to the Financial Statements (continued) (i) Molasses sates Revenue from molasses sules is recognised on delivery bused on an estimate of the Final pool price of molasses, (a) Government grants Grants from the government are recognised at their fair value where there is @ reasonable assurance that the grant ‘will be received and the company will comply wilh all attached conditions. Government grants relating to costs are deferred and recognised ia Ue necessary 10 mateh them with the costs that they are intended fo compensate. ome statement over the period Government grants relating to dhe purchase of property, plant and eqeipment are included in non-curreat Tiabilites as deferred income and are credited to the income Statement ona straight line basis over the expected lives of the related assets. (e) Income tax ‘The income tax expense or revenue for the period isthe tax payable on the current period’s taxable income based ‘on the Ausizalisn income fax rat adjusted hy changes in deferred tax assets and fiubilities attributable to temporary differences between the lux hases oF assets and liabilities and their carrying amounts in the financish Statements, and te unused tax Fosse. Deferred tax assets and Lisbilities are recagnised for temporary differences al the «ax rates expected t© apply ‘when the assets are recover oF liabilities are setted, based on those tas rates which are enacted or substantively enacted. ‘Thu relevant tax rates are applied « the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax assel or Lahility. An exception is made for certain temporary differences arising from the initial recognition of an assel oa ability. No deferred (ex asset or liabilily is recognised in relation (6 these temporary differences if they arose ina wansaction that, atthe time of the transaction, did not alfeet either accounting profit or lxable profit or fos, Deferred tax assets are recognised for deductible tempormry differences and anused tax losses only i it is probable that future taxable amounts will be available 1 utilise those temporary differences and losses. (f) Leases Leases of propery. plant und equipment where she company has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases ae cupitilised at Use lease's inception at the corresponding rental obligations, net of finance charges, are included in other long term payables, Each kease paymvat is allocated between the liability and finance charges s9 as 19 achieve a constant rate on the Finance balance outstanding. The interest vlement of the Finance cost is charged 10 the Income statement over the lease period S6 as produce a constant periodic rate of interest on the remaining balance of die liability for exch period. The property, plawt and equipment acquired ander finance lewses is depreciated over the shorter of the asses useful life and the lease term, Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor ane classified as operating leases. Payments made under operating leases are chagged t6 the income statement on a soraigit-line basis over the petiod of the lease. Income irom operating leases in respect of company-owned eane plantations is calculated as a function of sugar price and is recognised in income on an actual basis. Page 10‘The Matyorough Sugar Factory Limited Notes to the Financial Statements (continued) (g) Acquisition of assets ‘The purchase method of accounting is used forall acquisitions of assets regardless of whether equity instruments ‘or olher assets are avquired. Cost is measured as the fair value of ike assets given up, shares issuxal or ighilities undertaken at the date of acquisition plus incidental costs dirvetly aturiburuble to the acquisition. Transact ‘costs arising on the issue of equity instruments are recognised diroctly in equity, (h) Impairment of assets Assets that have an indefinite useful life are not subject wo amortisation and are vested annually for impalement. Assets that ure subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the esrrying amount may rot be recoverable. An impairment loss is recognised for the amount by which the assel’s carrying amount exeveds its recoveruble smount. ‘The recoverable amount is the higher of an asset's fair value less costs lo sell and value in use. For the purposes of assessing impairment, assets are grouped atthe lowest levels for which here are separately identifiable cash flows (eush generating units). () Cash and cash equivalents Cash and cash equivalents includes cash an hand, deposits held at call with financial institutions, other shoxt- erm, highly liquid investments with original maturities oF three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts, Bank overdrafis are shown wilhin borrowings in current lisbibilies on the balance shet. G) Receivables ‘The sugar and molasses dehiors are based on the final poo! prices as advised by the respective murkeling agents Other trade roveivables sre recognised initially al Tair value and subsequentty measured at amortised cost, less provision for doubtful debts. Collectiility of trade receivables is reviewed on an ongoing hasis. Debris which are known tw he ancollectibfe are wrillen off. A provision for douibtful receivables is established when there is objective evidence that the ‘company will not be able to collect all umounts due secording (o the original terms of mceivables. "The amount ‘of the provision is the difZorence beivreen the asset's carrying amount and the present value of estimated future ‘cash flows, discounted al the effective interest rate. The amount of the provision is recognised in the income stacement, (k) Inventories ‘Stores and mill spares bave een valued at cost less a provision for diminution in value duc to obsolescence. ‘Values sre assigned 0 individual items on ths basis of weighted average costs, @) Standing crops ‘Standing crops of sugar cane have beca valued a fair yulue less point-of-sale eosts al the time of harvesting in accordance with AASB II Agriculture Fair vatue of mature standing crops is based on u munber of factors inctuding estimated erop size, CCS (sugar ‘content and expected market price for sugar less harvesting and distribution costs Fair value of immature standing crops is based on aet prescat value of expected cash flows using a market determined pre-tax discount rate. Page I}‘The Matyorough Sugar Factory Limited Notes to the Financial Statements (continued) (m) Investments and other financial assets ‘From 1 July 2004 to 30 June 2005, “The company has taken the exemption available under AASB 1 (0 apply AASB 132 und AASB 139 only trom 1 Jaly 2005. The company has upplied previous AGAAP to the comparative information on financial instruments ‘within the scope of AASB 132 and AASB 139. For lurther information on previous AGAAP refer to the annusl report for the year ended 30 June 2005. Adjustments on transition date: 1 July 2005 ‘The nature of the main adjustments 10 make this information comply with AASB 132 and AASB 139 are that ‘with the exception of held-to-maturity investments and loans and ceceivables which are measured at amontised ‘cost, fir value is the measorement basis, Pair value is inclusive of transaction casts, Changes in fir value ame either laken 16 the income slatement or an equity reserve, At the date oF transition (1 July 2005) changes te ‘carrying amounts are taken (retained earings oF reserves. From I July 2005 ‘The company classifies its investments in the following categories: loans and receivables, and available-for-sute financial assets. The classifiestion depends on the purpose for which the investmenls were acquired Management determines the classification of ifs investments at initia) eeognition and re-evaluales. thi designation at each reporting date Ui) Loans ase receivables Loans and receivables ure non-derivative financial sssets with fixed or dererminghle payments that are not {quoted ia an active marker. They arise when the company provides money, goods or servieus dérectly ¥ a Ucbtor with ne intention of selling the receivable. Thoy ane included in current assets, except for Unose with maturities greater than 12 monihs after the balance sheet date which arc elassified as non-current asses, ‘Loans and receivables ate included ia receivables in the balance sheet. (ii) Available-for sate financial assets Available-for-sale financial assets, comprising principally atarkelable equity securities, are non-dorivatives: that are either designated in this category or not classified im uny other category. ‘They are included in non- ‘current assets unless manugernent intends fo dispose of the investment within 12 mouths of the bulance sheet date, Porchases and sales of investments are recognised on trade-date ~ the dale on which the company commits te purchase or sell the asses. Investments are initially recognised al fair value plus transaction cost for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financiat wets have expired or have been wansferred und the company has trunsferved substantially all the visks and rewards of ownership. Avaslable-for-sale linancial asscls and financial assets at Fair value through profit and loss are subsequeatly worried al fgir value, Loans and receivables are carried st cosl, Unrealised gains and losses arising from changes in the fair value of non-monetary securities classified as available-for-sale are recognised in equity in the available-for safe investments revaluation reserve. When securities classitied as available-for-sale are sold or impaired, she accumulated fair value adjustments aee included in the income statement ss gains and losses from investment securities ‘The fair values of quoted investments are based on current bid prices, Ifthe market for a financial asset is not active (and for unlisted securities), the company establishes fair value bY using valwation techniques. ‘Those inclide reference t@ the fair values of recent arm's length transactions, involving the samme instruments or oiher instruments that are substantially the sane, discounted cash flow analysis, and eption pricing madels refined to reflect the issuer's specific circumstances, Page 12‘The Matyorough Sugar Factory Limited Notes to the Financial Statements (continued) ‘The company assesses aL each halance date whether there is objective evidence that a nancial asset or group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a Significant or prolonged decline in the fair value of a security befow its 20st is considered in determining ‘whether the security is impaired. Hf any such evidence exists for avatlable-for-sale financial assets, the ‘cumulative loss ~ meusured a8 the difference berween the uceuisition est and the current fair valu, less any impeirment 1oss on thet financial asset previonsly recognised in profit and loss ~ is removed from cquity and recognised in the income statement, Impairment fosses recognised in the income statement on xuity instruments are not reversed theough the income stateriene. (n) Bair value estimation ‘The fair value of financial assets and Financial Jor disclosure purposes. abilities must be estimated for recognition and measurement or ‘The fair value of financial instruments traded in active markels is hased on quoted market prices at the balance sheel date. The quoted market price used for financial assets held by the company is the cunent bid price; the appropriate quoted market price lar financial Hbililies isthe current ask price: ‘The fair value of financial instruments that are nol aded in an active market is determined using valuation techniques, The company uses 4 variety of methods and makes assumptions that are bused on munket conditions existing al each balance date, Quoted market prices or dealer quotes for similar instruments ave used for long- term debe instruments held, Other techniques, such as estimated discounted cash flows, ans used to determine Jair value for the remsining financial instruments. ‘The nominal value of trade receivables and payables are assumed to approximate their fuir values. ‘The fair value of financial liabitiies for disclosure purposes is estimated by discounting the future contractual eash flows al the ‘current market interest rate that is available lo the company for similar financial instruments. (0) Property, plant and equipment Land and buildings are showa at Fair value, based on periodic, bur at Keast triennial, valuations by external independent valuers, less subsequent depreciation for buitdings. Any accumulated depreciation at the date of evaluation is eliminated against the gross camying amount of the asset snd the net amount is restated to the revalued amount of the asset. All olher property, plant and equipment is stated at histories) cost less depreciation. Historical cost includes expenditure thst is direclly attriburabe fo the aequisition oF the items. Subsoquent costs are incloded in the asset's carrying umount or recognised as a separate assel, a8 appropriate, only when itis probable that future economic benetits essocieted with ths item will Now w the company and the cost of the ftem can be measured reliably. AN other repairs snd maintenance are charged #0 the income statement during the financial period in which they are incurted, Increases in the canying amounts arising on revaluation of land und buildings are credited to other reserves oF “land and buildings reserve” in shareholders’ equily. To the extent that increase reverses a decrease previously recognised in profil or Joss, the increase is first recognised in profit and oss. Decreases that reverse previous jnereases of the same asset are fest charged against revaluation reserves dirvetly in equity tw the extent of the ronuaining reserve atlzibutable to the asset; all oher decreases are charged to the income statement, Land is not depreciated, Depreciation is caleulated on a straight line basis over the remaining useful Tives of Individual assets, Average rates of depreciation by asset category we as follows: Buildings 30-40 years Plant & machinery 10-50 years Mobile equipment 10-15 years ‘The assets’ residual values and useful lives are reviewed, and adj appropriate, af each balance sheet date, Page 13‘The Matyorough Sugar Factory Limited Notes to the Financial Statements (continued) An asser’s carrying amount is written down iamediately (9 its recoverable amount if the assel’s carrying amount Js greater than ils estimated recoverable amount, Goins and losses on disposals are determined by comparing proceeds with carrying amount. These are included jn the income statement. When revalued assets are sol, # is company policy to transfer the amounts incloded Jn other reserves in respect of those assets to retained earings. (p) Trade and other payables ‘These amounts sepresent liabilities for goods and services provided to the company prior f the end of Financial year which are unpsid. ‘The mounts are unsecured and are usually paid within 30 days of recognition. (q) Interest bearing liabilities Borrowings are initially recognised at fair value, wet of transaction eosts incurred, Imerest bearing Habiliies are subsequently measured a1 amortised cost. Any difference between the proceeds (net of tmansaction costs} and the redemption amount is recognised in the income statement over the period of the borrowings using the effective interest method. Interest bearing Yiabilities are classified as current liabilities unless the company hus an unconditional right te defer seitiement of the Hability for al Teast 12 months alter the bafance sheet date. (r) Borrowing costs Borrowing costs are recognised as expenses in the period in which they are incured. ‘They include interest on bank overdrafts and long term borrowin, Provisions for logal claims are recognised whem: the company has a present legal or constructive obligation as a result Of past events; iL is more likely than not that an outflow oF resources will be required to sete the obligation: and the amount has been rwliably estimated. Provisions are not reeagnised for fame operating Tosses, (s) Employee benefits (i) Wages and salaries, annual leave and sick leave Wages und salaries, annual Keave and sick Jeave expected to be seltied within twelve months of the reporting ate are recognised in other creditors in respect of employees’ services up to the reporting date and ane rmcasured al the amounts expected to be paid when the liabilities are settled. i) Long Service Leave A liability for long service leave is recognised, and is measured as the presem value of expected future payments 19 he made in respect of 3 provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service, Expected future payments are discounted using interest rates on national goverment guaranteed securities with terms to maturity that match, as viosely as possible, the estimated futare cash outtTows Gil) Share-based payments Share-based compensation benefits are provided to employees via The Maryborough Sugar Factory Limited Employee Share Plan, Under this plan employees are periodically offered shares in the company at & discount to marker price Under AASB 2 Share-based Payment, the company is required 19 recognise an expense for the discount t© market price of shares issued under this share plan Page 14‘The Matyorough Sugar Factory Limited Notes to the Financial Statements (continued) In accordance with AASB] First-time Adoption of Ausinalian Equivalents to International Financial Reporting Standards, no adjustment to the 1 July 2004 or 30 June 2005 balance sheets is required as 2 resull bof this policy change because the fair value of the benefic to employees has mul previously been publicly disclosed, (t) Cont uted equity ‘Ondinary shares are classified as equity. Incremental cosis direcily attributable to the issue of new shares or options are Shown ia equily us deduction, net of x, for the proceeds (u) Dividends. Provision is made for the amount of any dividend declared on or before the end of the half-year but not distributed a1 balance date. (v) Earnings per share @) Basle earnings per share asic earings por share is ealeulted by dividing the profit attributable to equity holders of the company, excluding any costs of servicing equity other Uian ordinary shies, by the weighled average number of onfnury shares oustanding daring dhe half yen: (i) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determinstion of basie warnings per share 10 tke ito account the after invome tax effect of intrest and other financing costs associated with iltive potential ordinary shures und the weighted average number of shares assumed to have been issued for no ‘consideration in relation lo ditutive potential ordinary shares, (w) Rounding of amounts ‘The company is of a kind referred lo in Class ordet 98/0100, issued by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the financial zepert. Amounts in the financial report have becn rounded off in aecordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest della. Note 2. Other income Half Year 2005 2004 $7000 7000, Government Grants ‘Ausalian Goverment - SIRP 07 Other 2 Increasei{decrease) in standing erops (659) ‘Toual other income Page 15‘The Matyorough Sugar Factory Limited Notes to the Financial Statements (continued) ‘The factors used to value standing crops al 31 December 2008 (note 1 8) we: © Crop size 9,000 tonne of esne. + ccs. 13.75 © Expected price S415 per tonne of sugar © Pretax discount rate 16.6% Note 3. Reconciliation of cash Halt Year Reconciliation of eash at she end ofthe period (as shown in the 2005 2004 Satement of eas Flows) to the Felaled items i the avcounts is us $000 Son Fallows: Cash on hand and at bank 1 i Bunk overdraft oR) 573) “Total cash at the end of period a oe Note 4, Equity securities issued Hilf Year Halt Year 2005 2004 2005 2008 stares shares S00 000 Issues of ordinary shares during the half year Employee share plan issue - 900 - 5 Shave placenteat - 466,300 - Share purchase plan - 109,202 : Less transaction costs of share issues - + ‘$78,602 . 3,963 Note 5. Reserves Half Year 2008 2004 S000 sou Asset revaluation reserve 4072 4022 Aailable-for sae financial assets reserve 36 . as Page 16‘The Matyorough Sugar Factory Limited Notes to the Financial Statements (continued) Note 6. Profit Full year results will reflect the seasonal nature of the sugar industry — prineipally, the effets of recognising the snajority of revenue in the first half year, offset hy significant maintenance costs in the second hall. Page 17‘The Matyorough Sugar Factory Limited Note 7. Explanation of transition to Australian equivalents to IFRSs (4) Reconciliation of equity reported under previous Australian Generally Accepted Accounting Principles (AGAAP) to equity under Australian equivalents to IFRSs (AIFRS) (@) At the date of transition to AIFRS: 1 July 2004 Effect of Sub-notes to Previons transition Note 7 AGAAP (AIFRS ——ATFRS. s*000 s"000 $000 Current assets Cash assets 1 1 Receivables 3387 3.387 Inventories 523, 523 Standing crops 1,230 1,230 Other 393 393 ‘Total current sssers 5,534 5,534 ‘Non-current assets Receivables 392 302 Inventories 400) 447 «aay - Investments 1.156 1,156 Property, phint and equipment Ale} 25,086) 4a7 28533 Deferred tax asses - - ‘Total non-current assets 27.081 2,081 Total assets 32,015 32,615 Corrent lishitities Payables 40 2312 104 2416 Interest bearing Yiabilities 5.832 5.832 Provisions, a0 187 313 ‘500 ‘Total curren liabilities 8331 47 8748 Non-current liabilities Interest beating Yiabilitics 2187 2187 Preferred tax sbi : - Provisions 4c) 907 “a7 490 ‘Total non-current liabilities 3.094 ary 2017 Total liabitities 11425 11,425 Net assets 21.190 2190 Equity Conaibuted equity 836 836 Reserves 0b) 4,456 384) 4072 Retained profits 0b) 15,808 384 16,282 ‘Total equity 21,190 21,190 Page 18‘The Matyorough Sugar Factory Limited Notes to the Financial Statements (continued) Note 7. Explanation of transition to Australian equivalents to IFRSs (continued) (b) At the end of last half-year reporting period under previous AGAAP: 31 December 2004 Subenotes to Previous Note7 GAAP $000 Current assets Cash assets 1 Receivables 11,709 Inventors 920 Standing crops S61 other 290 “Tota caren assets 3st Non-current assets Receivables 328 Inventories ate) 491 Investments 1156 Property, plant and equipment ate) 25.123 Deferred tas asses : “Total non-current assets 2.098 otal assets 40,579 Current tiabitities Payatles 4a 2016 Imcies bearing Habiliios ose Tas ibilies 991 Provisions diay 146 Total current bilities 9398 Non-current liabilities Invest beating ih 1332 Deferred ws lisbifies " Provisions 40a) 875 “Total non- current iaitces 2707 “Total liabilities 12,5085 Net assets 28073 Equity Contributed equity 4,799 Reserves 4) 4.456 Retained profits 4b) isis Total equity 28,073 Effect of transition to ATERS sr000 a9) 491 127 298, 423 23) 1423) (384) AIERS sro00 1 11,709 920 S61 290 1481 328 1,156 28614 27,098 4057 7143 1546. 01 442 10,222 1,832 452 2284 12,806 28.073 4,799 4072 19,202 28.073 Page 19‘The Matyorough Sugar Factory Limited Notes to the Financial Statements (continued) Note 7. Explanation of transition to Australian equivalents to IFRSs (continued) (©) At the end of last annual reporting period under previous AGAAP: 30 June 2005, Corrent assets Cash assets Receivables Inventories Standing crops Osher Total current assets Non-current assets Receivables Inventories Investments Property, plant and equipment Deferred tax assets ‘Total non-current assets ‘Total assets Corvent liabitities Payables Iniviest bearing Habitties Provisions Tol cuerem Hahiites Non-current liabilities Inwrest bearing Habittes Deferred tax liabilities Provisions “Total non-current lisiiies “Tota liabilities Net assets Equity Conibuted equity Reserves Retained profits ‘Fotal equity ‘Sub-notes to Note7 see) ale) 400 cay a0 4b) 4) Previous AGAAP sr000 2426 215 1,385 368 4455 176 426 1156 25,094 26.852 31,307 #659 1.439 Il 3.279 194 816 2.730 6,009 25,298 4,799 4456 16,083, 25.298 Effect of transition to ATERS sr000 1426) 426 124 283 407 (407) (407) 84) 384 AIERS sro00 2426 275 1,385 368 4,855 176 1156 26,852 31,307 1,783 1.439) 3.686, 4,799) 4.072. 19427 28.298 Page 20‘The Matyorough Sugar Factory Limited Notes to the Financial Statements (continued) Note 7. Explanation of transition to Australian equivalents to IFRSs (continued) 2) Reconciliation of profit under previous AGAAP to profit under Australian equivalents to IFRSs (ATERS) (a) Reconciliation of profit for the half-year ended 31 December 2004 Sub-notes to Note7 Revenue ate Other income 400 Cosrof eane and other materials used Employee benefits expense Depreciation expense Borrowing vost expense Administrative expense Other expenses ate) Profit before income tax expense Income tax (expense) benefit Profit after income tax expense Net profit attributable to members Previous AGAAP sr000 33.155 22,237) 8.399) in am 012) 2,002) 3911 (990) 2921 2921 Effect of teansition to AIFRS S700 059 (669) 10 AIERS sr000 33,145 (699) (22.237) 3.399) an am 01 4,992) 391 (090) 2021 2921 Page 28‘The Matyorough Sugar Factory Limited Notes to the Financial Statements (continued) Note 7. Explanation of transition to Australian equivalents to IFRSs (continued) (b) Reconciliation of profit for the year ended 30 June 2005 Effect of Sub-notes to Previous transition Note7 AGAAP — WAIFRS ——ATERS. sr000 sr000 sro00 Revenne ales) 35.173 ast 34.851 Other income 460) 372 32 Cost of came and other materiats used 3773) (23.973) Employee benefits expense 6.915) (5.915) Depreciation expense wort) ary Borrowing vosts expense (280) (280) Adoinietrative expense 97) 97 Other expenses 40 a7) fos (2.342) Profit before income tax expense 145 145 Income tax (expense) benefit - - Profit after income tax expense 145 145 Net profit (loss) attributable to members 145 145 8) Recon ‘tion of cash flow statement for the year ended 30 June 2005 ‘The «option of AIFRSs has not sesulted in sy material adjustments to the wash flow statement. (4) Notes to the reconciliations (a) Reclassification of provisions For employee benefits Under previous AGAAP these liabilities were classified as current or non-current according to expectations about oben benefits would be when. AIFRS requires these liabilities to be classified according to the conditional or unvonditional nature of the benest. (b) Deferred tax Liability Under previous AGAAP income tax expense was calculated by reference to the sccounting profit afr allowing for permanent differences. Deferred tax was nol recognised im relation 10 amounts recognised directly in equity. The adoption of AIFRS has resulted in « change in aceounting policy, ‘The application of AASB 112 Income Taxes has resulted in the mscognition of deferred tax liabilities on revaluations of non current assets (land), The effects are as fotlows: Page 22‘The Matyorough Sugar Factory Limited Notes to the Financial Statements (continued) At July 2004, 31 December 2008 nd at 30 Sune 2005 “The effeets on the deferred tax iilty of the adoption of ATERS sre as Follows (lax ate of 30%: 31 December uly 2004 2004 -30.June 2008 Notes. 7000 000 7000) Adjustments arising irom adoption of 384 38 388 AASB 112 These adjustments are recognised in retained profits as a result of the company’s net deferred (ax asset being offset at these halance dates due to the degree of doubt ar the time, around the company’s ability to realise (©) Proceeds from sale of fixed assets Under AUFRS from 1 July 2004 the company is requited 10 offset proceeds Irom sale of fixed assets against bother expenses, ‘The effect of this is: (Por the half year ended 31 December 2004 there hus been 9 decrease in revenue: of $10,000 and a corresponding decrease in olhor expenses. (i) Por the year ended 30 June 2005 there has been a decrease in revenue of $105,000 and a corresponding decrease in other expenses. (@)_ Proceeds from government grants Under AASB 120 from { July 2004 the company is required 10 classify proceeds from government grants that are not related 40 capital expenditure as olher income. The effect of this is for the yeur ended 30 Tune 2005 other income: hus been restated at $217,189 and there is 4 corresponding decrease in eevenue from ordinary activities (©) Spares Spares beld specifically for « particular asset, and which would become redundant if that asset were retired, are considered to form part of the historical cost of that asset, and have been re-classified accordingly. (f) Fair value of standing erops Under AIFRS from { July 2004 movements in the fair vilue of standing crops we classified as olher income sus opposed to revenue, The effect of this is (iii) For the half year ended 31 December 2004 there has been an increase in revenue of $659,000 and & corresponding decrease in other income. (iv) For the year ended 30 June 2005 there has boen a decrease in revenue of $155,000 and a corresponding increase in ather income. (g) Share-based payments As explained in Note Is) (ii) to these accounts under AASBI Firsrsime Adoption of Austratian Equivalents 20 Iniernational Financial Reporting Standards, no adjustvent we the 1 July 2008 or 30 Sune 2008 halance shwets is required in respect of discounts to murket price for shares issued under the ‘company's employee share plan, ‘The accumulated value of discounts on shares issued onder the plan were $11,513 as at f July 2004, $11,807 sas at 30 June 2005 and $11,801 as al 31 December 2008, Page 23‘The Matyorough Sugar Factory Limited (hy Retained earnings ‘The changes set out above have no eflecl on retained eamings prior @ | July 2005, Page 24‘The Matyorough Sugar Factory Limited Supplementary Appendix 4D Information Half year ended 31 December 2005 NTA backing 2005 2008 Net tangible asset hacking per ordinary share 98.46 $7.62 Additional dividend/distribution information Deals of dividendsidistritutions declared or poi during or Subsequent to the half year ended 31 December 2008 are as Fallows: Record date Paymontdaie] ‘Type Amount Toad Frinked | Forvign persocurity | dividend | amount per | soured security | dividend amount per security Ni = = = 7 z “The dividend or distribution plans shown below ars in operation Ni “The las date(s) for receipt of election notices for the dividend oF distribution plans NWA Any other disclosures in relation to dividends (distributions). Ni Controlled entities acquired or disposed of During the hulf year ended 31 December 2005 there were no enlities over which control was gained or disposed of Page 25‘The Matyorough Sugar Factory Limited Directors’ Declaration In the directors’ opinion (@) the financial statements and noes set oul on pages $ te 24 ane in accordance with the Corporations Act 2003, inet (complying with Accounting Standards, the Corporations Regulations 200) and other mandatory professional reporting vequirements; ard Gi) giving a ue and fair view of the company’s Gnancia) position as at 31 December 2005 and of its performance, as represented iy the results ofits operations and eash Mows, for the hall year ended ‘on that date; and (b) then: are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable, ‘This Usclaration is made in accordance with a resolution of the dircetors LC. Sandford Brisbane Chairman 27 Feheusry 2006 Page 26PRICEWATERHOUsE(COPERS @ PrivewsterhouseCoopers ‘ABN 52 780 433 757 iatadeont Place 1 Eagle Steot Auditors’ Independence Declaration | 32585 ,2'° #° BRISBANE OLD 4001 DX 77 Brisbane Aveta wey poe. coma 9 lend auditor for the review of furyhorough Sugar Factory Linnited for the Telapnane 61 7 3257 5000 As lead auditor for the of The Maryborough Sugar Factory Limited for the half Tatephone +61 7 3267 500 year ended 31 December 2005, I declare that to the best of my knowledge and betief, there have been: a) no contraventions of Ue auditor independence requirements of dhe Corporations Act 2001 in relation ¢ the reviews and bb) no coniraventions of any applicable code of protéessionel conduct in relation lo the review, PricewnateshouseConpers Mantin Linz Brisbane Partner 27 February 2006 Page 2?‘The Matyorough Sugar Factory Limited Independent Review Report to the Members of The Maryborough Sugar Factory Limited Statement Based on our review, which is nol an audil, we have not become sware of any matter that makes us helieve that the financial report of The Maryborough Sugar Factory Limited: © does not give a tree and Fair vies, required by the Corporations Act 2007 in Australis, ofthe Financia posilion of The Maryborough Sugar Factory Limited as at 31 December 2005 and of ts performance fer the half-year ended on that date, and © isnot presented in accordance with the Corporations Act 200), Accounting Standard AASB 134: Zatorim Financial Reporting and other mandatory financisl reporting requiremeats in Australia, andthe Corporations Regulations 2001 “This statement nmust be read in conjunction with the yest of our review report, Scope ‘The financial report and directors’ responsibility ‘The financial report comprises th balance sheel, income: statement, statement of changes in equity, cash HOw Safement, accompanying nows to the Financial statements, and the directors’ declaration for she The ‘Maryborough Sagar Factory Limited (the company). for the half-year ended 31 December 2005, ‘The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2007. This includes responsibility for the maimensnee of adequate accounting records und internal controls thal sre designed tw prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the Financial report. Review approach We conducted an independent review in order for the company to lodge the finsneial report with the Astratian Securities and Investments Comatission. Our review was conducted in accordance with Australian Auditing Standards applicable to review engagements. For further explanation of a review, visi€ our website up: w, pe comvaufinanciaséatementauli We performed procedures in order fo state whether, on the hasis of the procedures described, anything has come ( ovr alleation that sould indicate that the Financial report does not present fairly, in accordance wit the Corporations Act 2001, Accounting Standard AASB 134: Interim Financial Reporting and other mandatory financial reponting requirements in Auswalia, a view which is consistent with our understanding of he -consotidated enlity’s Financial position, and its performance as represented by the resells of iis operations snd cash flows, ‘We formed our statement on the basis of the review procedures performed, which included: © inguivies of company personnel, and © analytical procedures applied 1 financial data. ‘Our procedures include reading the other information included with the financial xeport to determine whether it ‘contains any material inconsistencies with the financial report ‘These procedures do not provide all the evidence that would he requited in ap audi, thus the level of assurance provided is less than thst given im an audit, We have not performed an audit, and accordingly, we do nol express an audit opinion, Page 28‘The Matyorough Sugar Factory Limited Independent Review Report {0 the Members of The Maryborough Sugar Factory Limited (continued) White we considered the effectiveness of menagement’s internal controls over Financial reposting when ‘determining the nature and extent of our procedures, eur reviow was not designed to provide assurance on internal controls. ‘Our eeview did not involve an analysis ofthe prulenoe of business dcisions made by diyctors or management Independence In conducting our review, we followed applicable independence requirements of Australian professional ethics) pronouncements and the Corporasions ac? 2001 PricemnateshouseConpers Martin Linz Brisbane Partner 27 February 2006 Page 29