Seeka announces its 31 December 2023 result

FULL YEAR RESULTS ANNOUNCEMENT FY23 | SEEKA LIMITED1
SEEKA 2023 FULL YEAR RESULT
Audited results for year ended 31 December 2023 (FY23)
Listed New Zealand produce handler Seeka Limited, with operations in New Zealand and Australia, has today reported
its audited results for the year ended 31 December 2023. Loss before tax of $21.0 million is in line with the previously
announced guidance of $20 million to $25 million loss before tax.
$48.7 million gross profit — down 29% on FY22's $68.3m
$26.0 million EBITDA — down 44% on FY22's $46.1m
( $14.5) million net loss after tax — down from $6.5m net profit FY22
"The 2023 harvest was difficult right across the horticultural sector, as a warm wet winter, cyclones and hail significantly
impacted orchards in New Zealand and Australia", says Seeka chief executive Michael Franks.
"Yields were down across the industry, with Seeka only handling 30 million trays of class 1 New Zealand kiwifruit in 2023,
compared with 42 million in 2022.
"While 2023 volumes were materially down, Seeka’s operational performance between the orchard and point of sale was
excellent. More than 99% of the kiwifruit we packed for our growers was delivered on time and in spec to the marketer
Zespri, and the quality of our fruit supplied to the international consumer was the best in the industry.
"The large drop in kiwifruit volumes, however, reduced Seeka's revenue for the year to $301 million, down from $348 million
in 2022. This contributed to a full year loss of $14.5 million after tax in 2023, compared to a $6.5 million net profit in 2022.
"Seeka responded to the seasonal downturn by suspending dividends and reducing overheads. This included establishing
a captive insurance structure to slow the impact of rising insurance costs. Having completed a number of post-harvest
automation projects, Seeka also reduced its capital expenditure.
"In June our bankers provided a new $201 million Sustainability-linked Loan facility that included covenant waivers that allow
Seeka to focus on restoring profitability.
"Total assets remained stable at $549 million, with $388 million invested in property, plant and equipment. Following a
sustained period of investments, Seeka has a post-harvest infrastructure capable of handling more than 50 million trays of
kiwifruit, which is forecast to efficiently handle short-term growth from our supplying growers.
"Seeka is focused on restoring profitability in 2024 and reducing debt, while maintaining the excellent operational
performance achieved in 2023 for its growers and customers. Having invested in capacity and automation, Seeka is
containing capital spend to maintenance, risk reduction, and automation.
"The La Niña weather system which impacted the last two seasons has now ended, and orchards are benefiting from far
better growing conditions. Kiwifruit vines are holding high levels of fruit, and the industry's forecast of record volumes will
allow Seeka to realise the full efficiencies of our highly-automated post-harvest facilities.
"The 2024 Kiwiberry harvest and sales programme is nearing completion and the first RubyRed kiwifruit crops are being
packed. We have the capacity, systems and personnel to handle much higher volumes, and are looking forward to delivering
an excellent and profitable service to our growers and the markets", says Franks.
28 February 2024
Company announcement

FULL YEAR RESULTS ANNOUNCEMENT FY23 | SEEKA LIMITED2
Financial performance
The following table outlines Seeka’s performance FY23.
New Zealand dollarsFY23FY22Change
Total revenue ($m)
$ 300.9 $ 348.4 ( 14%)
EBITDA before impairments and revaluations ($m)
$ 26.0 $ 46.1 ( 44%)
EBIT ($m)
($ 4.1)$ 19.1 ( 122%)
NPBT ($m)
($ 21.0)$ 7.6 ( 376%)
NPAT ($m)
($ 14.5)$ 6.5 ( 322%)
Net bank debt ($m)
$ 172.4 $ 147.4 17%
Basic earnings per share
( $0.34)$ 0.16 ( 319%)
Diluted earnings per share
( $0.34)$ 0.16 ( 319%)
Net tangible assets per share
$ 5.71 $ 5.97 ( 4%)
This announcement should be read in conjunction with Seeka Limited's 2023 annual report (audited). A copy of the 2023
annual report can be found on Seeka's website www.seeka.co.nz/reports.
EBITDA
EBITDA before revaluations and impairments is considered by Seeka's Board to be a key measure of performance.
New Zealand dollars ($000s)FY23FY22
Net profit before tax
( 20,988)7,593
Interest expense
12,0287,204
Lease interest expense
4,8424,289
EBIT
( 4,118)19,086
Impairment charges and revaluations
Impairments
3,4651,016
Loss on revaluation of property, plant and equipment
294 -
Depreciation expense
15,52016,055
Lease depreciation expense
10,4629,516
Amortisation of intangible assets
365406
EBITDA before impairments and revaluations
25,98846,079
ENDS
For more information, visit www.seeka.co.nz or please call:
Michael FranksNicola Neilson
Chief executive
+ 64 21 356 516
Chief financial officer
+ 64 21 841 606

---

ANNUAL REPORT 2023

ANNUAL REPORT 2023 | SEEKA LIMITED
Main contents

SEEKA LIMITED | ANNUAL REPORT 2023
Contents
Welcome to our 2023 Annual Report.
In this report, we detail our strategy to grow our business by connecting sustainable
produce to the market, and report on our operational and financial performance as we
work with our communities to deliver excellence.
This integrated report links to videos and
other information stored on the internet.
Scan the QR codes with your smartphone
camera to view extra material.
2 Introducing Seeka
2 Our produce business
4 Seeka's strategy
5 Our brand
6 Performance dashboard
8 From the Chair and Chief Executive
10 Financial review
13 Group financial performance
14 Orcharding
15 Post-harvest
16 SeekaFresh retail services
17 Australia
18 Focus on sustainability
23 Financial statements
24 Statement of profit or loss
25 Statement of comprehensive income
26 Statement of financial position
27 Statement of changes in equity
28 Statement of cash flows
29 Notes to the financial statements
70 Independent auditor's report
75 Governance
95 Directory
Main contents
This report links to other information
stored on the internet. Click on the QR
codes or scan with your smartphone
camera to view extra material.
The best way to view this online version of Seeka's annual report is with
Adobe Acrobat Reader. To navigate, click the section headers listed
above. You can also click any light blue text for direct links to additional
information. To return to a contents page, click the navigation header at
the top of each page.

ANNUAL REPORT 2023 | SEEKA LIMITED2
Introducing Seeka
Our produce business
Seeka grows, processes and supplies premium, healthy fruit to domestic and international consumers.
We work along the supply chain, helping growers develop and operate their orchards, provide harvest
and post-harvest services, supply Zespri's export programme, and market produce in New Zealand,
Australia, and to other high-value markets.
Growers benefit from an integrated supply service that cares for their produce from the orchard to point of sale. We pride
ourselves on careful handling and inventory management that optimises total crop value and grower returns. Our supply chain
partners benefit from a quality-driven service that connects consumers to the sustainable production and supply of quality fruit.
Operating throughout New Zealand and Australia, and recruiting from the Pacific and Asia, we enhance regional economic
development, and are a responsible employer that cares for the welfare of our workforce and communities.
By operating an integrated service, we are working to return value to Seeka shareholders by growing our revenue streams and
operating margins. This includes adding new services and expanding the reach of our core supply chain service.
Our core business
We are founded on kiwifruit and have expanded to be New Zealand's and one of Australia’s largest
kiwifruit growers. We grow and supply New Zealand kiwiberry, avocado, persimmon and citrus and
Australian nashi, pears, jujube and other fruits.
We are a large regional employer, operating packing and coolstore facilities in all major kiwifruit and avocado growing regions
in New Zealand’s North Island. Seeka also operates orchard and post-harvest facilities in Victoria, Australia, with the Australian
market supplied with Seeka fruit all year round.
We focus on supply chain management and have extended our services to include maturity testing to the wider kiwifruit
industry, the importation and conditioning of tropical fruits for New Zealand retailers, and the production and selling of avocado
oil and the digestive aid, Kiwi Crush™.
At Seeka, we strive to deliver excellence from orchard to market.
Our operations calendar
JANFEBMARAPRM AYJUNJULAUGSEPOCTNOVDEC
KIWIBERRY
CITRUS
PERSIMMON
KIWIFRUIT
AVOCADO
AVOCADO
JUJUBE
NASHI AND PEAR
FRESH FRUIT AND VEGETABLES WHOLESALE MARKET
BANANA AND TROPICAL FRUITS IMPORT AND SUPPLY
KIWI CRUSH™ PRODUCTION AND SALE
AVOCADO OIL PRODUCTION AND SALE
PLUMPLUM
AUSTRALIAN KIWIFRUIT
NEW ZEALAND
SEEKAFRESH
AUSTRALIA
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3SEEKA LIMITED | ANNUAL REPORT 2023
Seeka operates
12 packing and
coolstorage
facilities in NZ
Plus 2 SeekaFresh sites
and 2 Australian packhouses
Kerikeri
Orangewood
Peninsula
Katikati
Aongatete
Work Road
Huka Pak
SeekaFresh
Retail services centre
SeekaFresh
DNFC production centre
Oakside
KKP
Transpack
O PAC
Gisborne
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ANNUAL REPORT 2023 | SEEKA LIMITED4
Seeka's strategy
Connecting
sustainable produce
to the world
Deliver operational and
financial excellence to our
growers and shareholders
Excellent planning, disciplined execution
and quality fruit to the market.
Lift financial performance
Low cost structure, targeted capital
expenditure and less bank debt.
Optimise post-harvest
capacity
Automation where it delivers efficiency
and returns value.
Build revenue streams
Lift kiwifruit returns and add
complementary services and products to
our core business.
Select Excellence
Our aspiration to deliver excellent service,
produce and value to our stakeholders.
Main contents

Our brand
Select Excellence
Select Excellence encapsulates the essence
of Seeka's business.
We Select Excellence to guide our decision
making, our actions, and the company
we strive to be. And our stakeholders can
expect excellence when they select Seeka.
Select Excellence is backed by our six core
brand values, highlighted by the six ticks of
the Seeka motif.
Safety always
We care for the health and long-term
welfare of our people, land and
communities.
Founded on relationships
Connecting sustainable fruit production
with world markets.
Inspirational people
Passionate about the produce we
handle and the service we deliver.
Independently ingenious
Delivering innovative solutions that
return real value.
Quality obsession
Our uncompromising pride in our
efforts to deliver the very best.
Growing sustainable futures
Connecting growers to the world with
our sustainable and profitable service.
5SEEKA LIMITED | ANNUAL REPORT 2023
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ANNUAL REPORT 2023 | SEEKA LIMITED6
Performance dashboard
1929
Full time equivalents employed per year
in NZ and Australia to pick, pack and
supply premium fruit.
3.2
Total recordable injury frequency,
per 200,000 hours worked. Seeka's
investments in safety technology and
systems is creating safer work places.
6
Regions serviced in New Zealand and
Australia. By connecting producers to
high-returning markets, we grow
regional economies.
SOCIAL
$(14)m
Loss after tax.
Down from $7m profit FY22.
$3m
Operating cash flow.
Down from $12m FY22.
$549m
Total assets.

Maintained total assets
$548m FY22.
FINANCIAL
1500
Hectares of NZ kiwifruit, avocado and
kiwiberry grown by the Seeka team.
30m
Trays of NZ Class 1 kiwifruit packed and
coolstored at Seeka facilities and shipped
to the international markets.
99%
Of export-packed SunGold and Hayward
kiwifruit delivered on time and in spec to
Zespri, with industry-leading in-market fruit
quality.
ENVIRONMENTAL
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7SEEKA LIMITED | ANNUAL REPORT 2023
7
Pacific and Asian nations engaged
with Seeka's recognised seasonal
employer programme, with
I-Kiribati, ni-Vanuatu, Solomon
Islander, Samoan, Tongan and
Malaysian people hosted in NZ and
employed at Seeka orchards and
post-harvest facilities.
$201k
Donated to community health
programmes, youth development,
cultural and sports groups.
140
Bed purpose-built accommodation
facility completed at Aongatete is
providing comprehensive pastoral care
to Seeka RSEs.
$240m
Net tangible assets, with capital
expenditure within depreciation
following ten years investing in
automation and capacity.
Down from $251m FY22.
$5.71
Net tangible assets per share.
Down from $5.97 FY22.
$(0.34)
Loss per share.
Down from $0.16 earnings FY22.
5
Years of CO2e data is guiding Seeka's
sustainability initiatives as we track our
journey to be net zero carbon by 2050.
791kW
Solar installed, with 345kW system
commissioned at Seeka Katikati
December 2023.
60
tCO2e per $1 million of revenue as
Seeka works to reduce the intensity
of our carbon footprint.
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ANNUAL REPORT 2023 | SEEKA LIMITED8
The 2023 harvest was a difficult season right across the horticultural sector. Seeka was impacted by an industry
wide drop in kiwifruit yields which led to an operating loss. A warm wet winter, cyclones and hail significantly
impacted kiwifruit yields across New Zealand and Australia.
Seeka handled 29.8 million trays of class 1 New Zealand kiwifruit in 2023, compared with 42.0 million in 2022.
Revenue for the 12 months ended 31 December 2023 was $300.9 million, down from $348.4 million in 2022.
The $47.5 million reduction in revenue produced a $14.5 million loss after tax in 2023.
In response to the challenging financial year, Seeka:
–Suspended dividends
–Reviewed operations to lower the base overhead structure
–Established a captive insurance structure to slow the impact of rising insurance costs
–Reduced capital expenditure, while prioritising renewal of fire risk equipment, and
–Sought and obtained the support of Seeka’s banking syndicate to renew facilities and obtained covenant
waivers.
The weather plays a vital role in a successful crop and over the course of the last 18 months, Seeka has
experienced it all. Winter 2022 was unseasonably warm and regions missed their normal winter chill contributing
to an indifferent budbreak, particularly in Northland and Te Kaha. A heavy frost in October 2022 impacted many
orchards right across the growing regions, with a number devastated.
In November 2022, record-breaking flooding and hail occurred in Shepparton, which impacted Seeka’s Australian
orchards, while New Zealand experienced continual rain through the Christmas period, followed by Cyclones Hale
and Gabrielle, which caused severe damage in the Hawke’s Bay and Tairāwhiti Gisborne regions. In May 2023,
there was a significant hail event in the Bay of Plenty and while some orchards only experienced light damage,
others suffered total loss.
These events lowered crop volumes and yields and decreased packhouse efficiency, slowing the machines and
reducing margins as additional grading staff were employed to remove damaged fruit. Seeka worked to provide
the best possible outcome for impacted growers and delivered them exceptional results.
With warm, moist growing conditions, 2023 harvest produced SunGold kiwifruit with below-normal dry matter.
This occurred in a year when Zespri had increased dry matter maturity thresholds as a mechanism to improve
the consumer taste experience. This convergence resulted in a significant volume of quality SunGold kiwifruit not
being packed for export and sold on the domestic market.
Despite the challenging growing conditions, Seeka’s operational performance for growers and Zespri was
excellent. Seeka delivered extremely low onshore and offshore fruit loss, and the best offshore fruit quality in the
industry. Last season's issue of fruit quality had been resolved through a focus on operational excellence, including
innovative picking technology, a tailored packing service that matched the needs of each crop, and precision
inventory management that ensured fruit was loaded out at the optimal time.
From the Chair and Chief Executive
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9SEEKA LIMITED | ANNUAL REPORT 2023
The new automated packing machine at KKP performed
well and delivered the anticipated throughput and capacity
gains. Automation upgrades at both Oakside and Seeka
Gisborne enhanced site capacity and throughput.
Seeka’s mix of automated and manual packing plant
provides the flexibility to efficiently process weather
damaged fruit. Quality lines can be quickly and efficiently
processed on Seeka’s highly-automated packing machines,
while crop from damaged orchards can be cared for with
intensive manual grading. This mix of packing technology
allows Seeka to provide a timely harvest to all supplying
growers.
To drive efficiencies, Seeka has invested in reporting
systems, utilising Power BI that tracks fruit maturity on the
orchard, prioritises the harvest programme, and monitors
fruit inventory quality from the grader to the markets. The
next wave of Seeka innovation will incorporate artificial
intelligence into Seeka’s decision making systems.
Outlook
Seeka is focused on restoring the profitability of the
Company in 2024 and reducing debt, while maintaining
the excellent operational performance achieved in 2023
for its growers and customers. Having invested in capacity
and automation, Seeka is containing capital spend to
maintenance, risk reduction, and automation with proven
financial return.
All indications point to volumes rebounding in 2024, with
orchards benefitting from far better growing conditions
during the key summer period, and kiwifruit vines holding
high levels of fruit. Having built our capacity to handle more
than 50 million trays, Seeka has the infrastructure, systems
and personnel to manage the near-term growth in kiwifruit
volumes from our supplying growers.
The Board and management would like to thank Seeka’s
people, shareholders and growers for their resilience, their
loyalty and their continued support.
Fred Hutchings Michael Franks
Chair Chief executive
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ANNUAL REPORT 2023 | SEEKA LIMITED10
Seeka Limited achieved a gross profit of $48.7 million for the year ended 31 December 2023. This was
a 29% decrease on 2022 as industry-wide low kiwifruit yields impacted revenue and the profitability of
the Group’s core business. EBITDA
1
was $26.0 million, down $20.1 million year on year.
Financial review
Orcharding regions recorded their wettest summer, which along
with Cyclones Hale and Gabrielle, regional flooding, frosts and hail,
delivered a material reduction of New Zealand kiwifruit production.
Poor growing conditions in the two seasons since 2021 have
delivered a 25% fall in total volumes. This is despite an 8% increase
in orcharding area.
Net loss after tax
Seeka’s investments in post-harvest infrastructure and automation
have been matched to the growth in kiwifruit plantings. The large
downturn in yields, however, meant facilities were underutilised, and
the core kiwifruit business unprofitable.
Seeka recorded a $14.5 million net loss after tax, down from a $6.5
million profit in 2022. This came from a $19.6 million drop in gross
profit, $3.8 million of non-cash impairments and revaluations,
and a $5.4 million increase in finance expenses reflecting higher
borrowings and interest rates.
Revenue
Total Group revenue of $300.9 million was down 14% on 2022.
New Zealand post-harvest revenue was 22% down to $182.4
million as packing and coolstorage revenues were hit by a 29% fall
in kiwifruit volumes.
While lower yields also impacted orcharding operations, revenue
increased 7% to $86.5 million, aided by a substantial lift in
tray payments for SunGold and Hayward kiwifruit from leased
orchards. SeekaFresh also reported higher revenues, with a strong
performance of the imported fruits and fresh market programmes
contributing to a 9% lift in revenues to $20.7 million. Seeka
Australia revenue of $10.4 million was down 26% on 2022,
reflecting a 41% drop in kiwifruit, nashi and pear volumes as
flooding impacted Australian orchard production.
Operating expenses and operating cash flow
Total Group expenses of $325.5 million was down 5% on 2022. This
reflects lower volumes reducing costs, offset by a steady increase in
the cost of seasonal labour and packaging materials, along with the
fixed overhead costs across 14 post-harvest facilities.
Gross profit of $48.7 million was down 29% on 2022.
236.9
251.5
309.6
348.4
300.9
Group revenue
NZD Millions
FY19FY20FY21FY22FY23
34.5
42.9
56.8
46.1
26.0
Group EBITDA

NZD Millions
FY19FY20FY21FY22FY23
6.9
15.2
14.9
6.5
(14.5)
Group net profit after tax
NZD Millions
FY19FY20FY21FY22FY23
1. EBITDA is earnings before interest, tax, depreciation, amortisation, impairments and revaluations.
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11SEEKA LIMITED | ANNUAL REPORT 2023
155
176
246
271
260
Net assets
NZD Millions
FY19FY20FY21FY22FY23
368
375
482
548549
Total assets
NZD Millions
FY19FY20FY21FY22FY23
Cost savings from captive insurance structure
New measures implemented in 2023 are forecast to deliver $3
million in annual cost savings from 2024 onwards. This includes
savings from Seeka’s new captive insurance structure. Seeka Risk
Management Limited provides the Group with direct access to the
London and Asian reinsurance markets. As a fully-owned Seeka
subsidiary, Seeka Risk Management provides the same level of
cover, however by reducing Seeka's reliance on domestic providers,
it delivers significant cost savings.
Balance sheet
Total assets remained stable at $548.8 million, with $387.7 million
invested in property, plant and equipment. Following a sustained
period of investments, Seeka has a post-harvest infrastructure
capable of handling more than 50 million trays of kiwifruit, which is
forecast to efficiently handle short-term growth from our supplying
growers.
Capital expenses were reduced to focus on plant maintenance
and risk reduction, including worker safety and the upgrading of
coolstore leak detection and fire-protection systems.
Total assets include $50.5 million of right-of-use assets, reflecting
$29.8 million of land and building, and $16.1 million of orchard
leases.
In February 2023, Seeka realised $3.3 million from the sale of excess
water shares associated with the Group’s Australian business.
Total liabilities increased $11.9 million to $288.9 million with
interest-bearing liabilities increasing to $177.6 million (up $26.6
million). At 31 December 2023, Seeka had $23.2 million of available
headroom from the syndicated banking facility. Seeka’s banking
partners waived two covenants in 2023, and have set two step-
down covenants for June 2024 and December 2024 to help re-
establish a profitable operation on higher volumes.
Net assets were down $11.0 million to $259.9 million.

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ANNUAL REPORT 2023 | SEEKA LIMITED12
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13SEEKA LIMITED | ANNUAL REPORT 2023
Group financial performance
Key indicators
New Zealand dollars ( millions )FY23FY22Change
Total revenue
$ 300.92$ 348.39
( 14%)
EBITDA before impairments and revaluations
$ 25.99$ 46.08
( 44%)
Depreciation expense
$ 15.52$ 16.06
( 3%)
Lease depreciation expense
$ 10.46$ 9.52
10%
Impairments, revaluations and amortisation of intangibles
$ 4.12$ 1.42
190%
EBIT
( $4.12)$ 19.09
( 122%)
Interest expense
$ 12.03$ 7.20
67%
Lease interest expense
$ 4.84$ 4.29
13%
Net profit before tax
( $20.99)$ 7.59
( 376%)
Income tax charge
( $8.26)$ 1.62
( 609%)
Deferred tax expense
$ 1.74( $0.54)
426%
Net profit attributable to equity holders
( $14.47)$ 6.50
( 322%)
Basic earnings per share ( cents )
( $0.34)$0.16
( 313%)
Dividends per share paid in the financial year ( cents )
-$0.13
-
Cash flow from operating activities
$ 2.67$ 12.13
( 78%)
Total assets
$ 548.81$ 547.87
-
Property plant and equipment
$ 387.71$ 375.79
3%
Net assets
$ 259.95$ 270.94
( 4%)
Net bank debt
$ 172.38$ 147.39
17%
Values may not always sum due to rounding.
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ANNUAL REPORT 2023 | SEEKA LIMITED14
Orcharding grew 11.4 million Class 1 trays of kiwifruit compared to
17.0 million trays in 2022. The main growing regions were hit by a
record wet summer, which was compounded by regional flooding,
hail and frost.
Yields were much lower than expected. The average Hayward yield from Seeka’s
orcharding operations was a record low 6,730 trays per hectare, down 30% on
2022, and down 45% on 2021. SunGold average yield of 9,295 trays per hectare
was down 23% on 2022, and down 35% on 2021. The La Niña weather system
which has impacted the last two seasons has now ended, and Seeka is expecting
increased kiwifruit volumes in 2024.
Seeka also grew 1,900 tonnes of avocado (2022: 1,700 tonnes) and 163 tonnes of
Kiwiberry (2022: 116 tonnes), on orchards which it either owned or managed.
With the normalisation of border control, labour supply has improved and
orcharding is benefiting from the return of skilled RSE employees.
2023 orchard operations revenue of $86.5 million was up $6.0 million on 2022,
reflecting a strong increase in kiwifruit tray returns which helped offset the large
drop in yields. EBITDA of $1.0 million was down on 2022's $4.6 million, reflecting
low kiwifruit yields. EBITDA was also impacted by the large drop in avocado yields
and market returns, which impacted the profitability of Seeka's avocado operations.
Seeka continues to co-invest alongside landowners and funding agencies to
develop high-value orchards, with 97 hectares currently under development with
long-term supply commitments. Seeka has also directly invested $16 million to
develop 55 hectares of kiwifruit and 13 hectares of avocado on long-term leased
land. Fruit volumes and the profitability of Seeka's orcharding operations are
expected to increase as these orchards reach full production.
Orcharding
Led by GM Orchards, Barry Penellum
Revenue
–Leased and long term leased
orchards: costs plus profit share
–Managed orchards: costs plus
management fees
29%
of Group revenue
$
86.5m
Up 7% on
FY22 $80.5m
Assets
–Leased orchards: growing crops
–Long-term leased orchards:
developing orchards and growing
crops
15%
of Group assets
$
84.8m
In line with
FY22 $84.9m
Orchard operations span from Northland through the Coromandel, Bay of Plenty, Ōpōtiki and Te Kaha. Orchard operations
include all aspects of growing and harvesting kiwifruit, avocado and Kiwiberry on leased, long term leased, and Seeka-owned
orchards. The orcharding business provides comprehensive orchard and vine management services to owners together with
contract work on an as-required basis. The business develops orchards for landowners on contract or under long term leases
and in partnership with iwi.
FY19FY20FY21FY22FY23FY19FY20FY21FY22FY23
11.4
5.0
13.0
5.4
14.4
1 7. 0
11.4
5.2
4.6
1.0
Kiwifruit grown
Millions of Class 1 kiwifruit trays
Orchard EBITDA
NZD Millions
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15SEEKA LIMITED | ANNUAL REPORT 2023
Post-harvest
Led by GM Post-harvest, Paul Crone
Revenue
–Grading and packing service fee
per unit handled
–Coolstorage and loadout fees
Assets
–12 packing facilities with
16 graders
–Coolstores
Post-harvest operates twelve packhouse facilities along with a network of coolstores. These packhouse facilities pack, cool
and dispatch all produce from our orcharding operations and from our independent growers along with packing citrus and
persimmons on contract for external marketers.
Post-harvest packed 29.8 million Class 1 trays of kiwifruit, down
from 42.0 million trays in 2022. Hayward volumes were down 37%
and SunGold volumes down 24%, both significantly impacted by
yield reductions.
Kiwifruit inventory performance was excellent across all Seeka sites, with a focus
on "pack to load" delivering record-low coolstore losses, and high-quality, in-spec
fruit to the marketer Zespri. The New Zealand kiwifruit industry is built on providing
the markets with high-quality fruit. Seeka's supply-chain performance is essential
to grow markets and secure premium pricing for New Zealand growers.
Avocado volumes and fruit quality were impacted by the poor growing season,
and revenue from avocado export packing was significantly down. Seeka has been
working with industry partners to rationalise supply chain services and re-establish
a profitable business model for avocado growers.
Seeka also packed 11.0 million kilograms of citrus and 0.8 million kilograms of
persimmon on contract for third party marketers, both impacted by low yields.
Post-harvest revenue of $182.4 million was down 22% from last season
(2022: $233.8m) reflecting the large drop in volumes across all fruit categories.
EBITDA was $43.8 million compared to $59.0 million in 2022, with Seeka unable
to realise the efficiency gains from the highly-automated facilities due to the low
volumes.
The completion of the capacity build, including the 2022 commissioning of the
KKP and Transcool upgrades, along with automation upgrades at Seeka Gisborne
and Oakside, has Seeka well positioned to handle 2024 kiwifruit volumes, with the
network and capacity to pack more fruit using significantly less labour.
FY19FY20FY21FY22FY23FY19FY20FY21FY22FY23
32.8
41.0
31.8
41.9
39.2
42.0
29.8
61.6
59.0
43.8
Kiwifruit packed
Millions of Class 1 kiwifruit trays
Post-harvest EBITDA
NZD Millions
61%
of Group revenue
$
182.4m
Down 22% on
FY22 $233.8m
66%
of Group assets
$
360.2m
In line with
FY22 $360.4m
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ANNUAL REPORT 2023 | SEEKA LIMITED16
Turnover was up 15% to $62.8 million. This was reflected in a 9% lift in
revenue to $20.7 million, supported by higher returns from imported
produce and SeekaFresh's wholesale market. This flowed through to a
226% lift in EBITDA to $2.6 million (2022: $0.8m) with the extension
of Seeka's operations into retailing adding a valuable revenue stream.
Low volumes and high quality supported strong pricing for SeekaFresh's retailing of
kiwifruit in New Zealand and Australia. Good returns were also generated for Kiwiberry
growers.
SeekaFresh includes the production and sale of Kiwi Crush™ and avocado oil from
otherwise unmarketable fruit. Both initiatives contributed to Group earnings, returned
value to supplying growers, and further lifted the sustainability of supply chain operations.
Low avocado yields, poor fruit quality, and very weak Australian pricing impacted
the avocado programme, with a high percentage of the crop sold in an over-supplied
domestic market. While SeekaFresh executed a successful sales programme into Asia,
volumes are restricted by Asia's preference for smaller fruit and a short marketing
window. Seeka is working with industry partners to rationalise the supply chain and
marketing functions, and generate better returns for the industry.
SeekaFresh retail services
Led by GM Grower Relations, Kate Bryant
SeekaFresh retail services includes the supply, export and sale of avocado, Kiwiberry and Class 2 New Zealand kiwifruit, sale
of New Zealand kiwifruit through collaborative programmes, operation of the New Zealand wholesale marketing business
including imported tropical fruits, and the manufacture and sale of Kiwi Crush™ and avocado oil.
Revenue
–Sales commission
–Service fee for imported fruit
–Processing fees
Assets
–Auckland service facility
–Te Puke processing facility
49.2
1.7
63.9
3.068.0
54.4
62.8
2.3
0.8
2.6
SeekaFresh retail services turnover
NZD Millions
SeekaFresh retail services EBITDA
NZD Millions
7%
of Group revenue
$
20.7m
Up 9% on
FY22 $19.1m
2%
of Group assets
$
13.2m
Up 15% on
FY22 $11.5m
FY19FY20FY21FY22FY23FY19FY20FY21FY22FY23
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17SEEKA LIMITED | ANNUAL REPORT 2023
9%
of Group assets
$
51.5m
Down 6% on
FY22 $54.5m
3%
of Group revenue
$
10.4m
Down 26% on
FY22 $14.0m
Australia
Led by GM Australian Operations, Jonathan van Popering
Seeka Australia Pty Limited, a 100% Seeka-owned company, leases and operates kiwifruit orchards, and owns and operates
nashi and pear orchards along with associated post-harvest facilities in Victoria, directly marketing Seeka’s Australian produce
domestically and to export customers.
Revenue
–Fruit sales
Assets
–160 hectares of owned orchards
and crop
–114 hectares of kiwifruit on long-
term leased orchards
–Packhouse and coolstores
Seeka Australia grew and sold 3,309 tonnes of fresh fruit in 2023,
down 32% on 2022 as severe flooding and hail impacted plant
health and yields. Kiwifruit volumes fell 51%, pears were down
29%, and nashi down 2%.
While most fruit was marketed in Australia, including direct to large supermarket
retailers, Seeka also exported a limited supply of its Australian-grown fruit to Asia
at excellent prices. The demand for Australian-grown Hayward Green kiwifruit
exceeded the volume Seeka could supply.
The reduced volumes flowed through to a 26% drop in revenue to $10.4 million,
and an EBITDA of $0.7 million.
Seeka is forecasting strong growth in its Australian business, with $13 million
invested in new orchard developments, including 63 hectares of kiwifruit, new pear
varieties, and an expansion of jujube plantings.
Seeka has established strong market demand for Seeka-branded produce
in Australia, and is selectively exporting to Asia where it returns value. A
normalisation of growing conditions, along with the new plantings, are poised to
deliver significant growth.
4.2
(0.6)
4.4
7. 4
1
5.0
4.9
3.3
1.6
1.0
0.7
Seeka Australia volumes handled
Thousands of tonnes handled
Seeka Australia EBITDA
NZD Millions
FY19FY20FY21FY22FY23FY19FY20FY21FY22FY23
1. FY20 included a $6.2m gain on the sale and leaseback of 199 hectares of orchards.
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ANNUAL REPORT 2023 | SEEKA LIMITED18
Focus on sustainability
Seeka plans to become a sustainable company
by reducing our environmental footprint,
supporting the wellbeing of our communities,
and to generate value for our stakeholders.
Over the past 12 months, we have:
–Reduced our carbon footprint by 21%
2023's 21% reduction on 2022 was aided by lower
crop volumes. See our CO2e journey on page 20.
–Entered a $201m Sustainability-linked Loan
Setting targets to reduce our carbon footprint,
increase renewable energy, and improve safety.
–Trialled the retrofitting of coolstores with
environmentally-friendly refrigerants
Action plan to progressively replace coolants that
have high greenhouse gas potential.
–Installed 345 kW of solar panels at Katikati
post-harvest facility
Increasing our production of renewable energy.
–Promoted four cadets to orchard
management positions
Developing rewarding career pathways in the
horticultural industry.
–Reduced the gender pay gap
Down from 22.3% in 2022 to 21.0% in 2023, in
Seeka's first disclosure on gender pay.
–Opened the 140-bed Turanga Whetu
accommodation facility for RSE employees
Providing comprehensive pastoral care, including
free dental services for our Pacific and Asian RSEs.
By working with our communities and our
environment, Seeka is committed to making
meaningful change and achieving sustainable
outcomes.
You can read about our sustainability journey at
seeka.co.nz/sustainability, and we will publish a full
update on our ESG initiatives in June 2024.
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19SEEKA LIMITED | ANNUAL REPORT 2023

E
N
V
I
R
O
N
M
E
N
T
A
L

S
O
C
I
A
L

F
I
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C
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LIFE ON LAND
AND IN WATER
CARBON FOOTPRINT
CLIMATE ACTION
RECYCLABLE
MATERIALS
WASTE
REDUCTION
PROSPERITY
BUILDING
INTERGENERATIONAL
ASSETS
HEALTH,
SAFETY AND
WELLBEING
GROW
CAREERS
REGIONAL
GROWTH
GROW DIVIDENDS
AND SHARE PRICE
GROWER
RETURNS
RESPONSIBLE
PRODUCTION
CLIMATE
CHANGE
RESPONSIBLE
CONSUMPTION
SUPPORT OUR
COMMUNITIES
EMPLOYER
OF CHOICE
VALUE FOR
COMMUNITIES
VALUE FOR
SHAREHOLDERS
VALUE FOR
GROWERS
ENERGY
MANAGEMENT
WATER
MANAGEMENT
Sustainability strategy
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ANNUAL REPORT 2023 | SEEKA LIMITED20
19,504
19,220
19,864
22,839
17,987
Seeka's main
category 2 emissions
Electricity
Powering Seeka's
packhouses and
coolstores
Seeka's carbon footprint
Seeka measures its greenhouse gas (GHG) emissions in accordance with ISO 14064-1:
2018 - Greenhouse gases. Toitū Envirocare has verified Seeka’s GHG emissions inventory,
providing assurance across the four emission categories since 2019.
Seeka's approach to its carbon footprint is to prevent carbon emissions, then to reduce,
and offset as a last resort. No carbon offsets were purchased between 2019 and 2023.
2023 performance
Category 1 direct emissions controlled by Seeka
Seeka experienced a number of refrigerant leaks in 2023. Seeka's programme to
upgrade the more recently acquired sites with Seeka standard leak detection systems
is nearly complete.
Category 2 indirect emissions from purchased electricity
The electricity carbon footprint was 49% down on the prior year reflecting 2023's low
fruit volumes and short packing season.
Category 3 and 4 indirect emissions from Seeka's supply chain
Indirect transport and distribution emissions were down 3% on 2022 and other indirect
emissions associated with packaging, transmission and distribution losses were down
39%, reflecting the drop in fruit yields and volumes.
Annual CO2e footprint, 2019 to 2023
Absolute carbon footprint in tonnes CO2e
Category20192020202120222023Emissions
1
4,0513,8033,9004,4655,685
Direct emissions controlled by Seeka
2
3,9733,6964,4875,7082,892
Indirect emissions from purchased electricity
3
4,0694,4523,9874,6184,487
Indirect transport emissions from Seeka's supply chain
4
7,4117,2697,4908,0484,923
Other indirect emissions from Seeka's supply chain
Total
19,50419,22019,86422,83917,987
Seeka's main
category 1 emissions
Refrigerants
Leaks from coolstore
equipment
Fossil fuels
Burnt to power
Seeka's transport
fleet
Fertilisers
Applied to Seeka
long-term leased and
owned orchards
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21SEEKA LIMITED | ANNUAL REPORT 2023
Intensity-based performance measures
Seeka is in a fast-growing industry. While it is important to report our absolute carbon
result, as an expanding business it is equally important to report our efficiency gains.
Our total emissions are benchmarked against three intensity-based measures:
–Tonnes CO2e per $1,000,000 revenue
–Tonnes CO2e per 100,000 Class 1 trays packed
–Tonnes CO2e per permanent employee
The 2022 drop in yields and a second drop in 2023 impacted the intensity measures.
Climate-related risks and opportunities
Climate change is both an opportunity and a threat to the business. A changing climate impacts the land and our people, and the
quantity and quality of the fruit Seeka handles. Seeka is working to assess climate-related risks and impacts and is formulating
strategies to ensure the business remains resilient in a changing environment.
Over the past ten years, Seeka has expanded operations to encompass all major kiwifruit growing regions in New Zealand and
to the Goulburn Valley in Australia. Seeka is growing and packing a bigger range of fruit, including kiwifruit, avocado, Kiwiberry,
nashi, pear, plum, jujube, persimmon and citrus. By growing diverse crops in different regions, Seeka is building a knowledge
base on how different soil types and climates impact plant health and fruit yields. These learnings are guiding Seeka's orchard
practices and orchard developments.
Seeka is committed to growing sustainable futures for our employees, growers, communities, and shareholders. Addressing
climate change and creating appropriate mitigation and adaption strategies are core to enabling a sustainable future.
Seeka is making its first disclosures of its climate-related
risks and opportunities, as at 31 December 2023. Seeka's
climate disclosures provide insights into potential risks and
opportunities, and how Seeka is building resilience in a changing
environment. The disclosures comply with the External
Reporting Board’s (XRB’s) Climate-related Disclosures (NZ
CS 1). Seeka’s climate-related risks are regularly reviewed and
incorporated into Seeka’s risk management register.
See Seeka's public climate disclosures at www.seeka.co.nz/climate-change
82.3
76.5
64.2
65.6
59.8
46.1
41.5
29.9
28.4
29.9
58.2
5 7. 6
50.7
54.4
60.4
Per 100,000 Class 1 trays packed
Tonnes CO2e
Per permanent employee
Tonnes CO2e
Per $1,000,000 revenue
Tonnes CO2e
201920202021202220232019202020212022202320192020202120222023
$
1m
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ANNUAL REPORT 2023 | SEEKA LIMITED22
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23SEEKA LIMITED | ANNUAL REPORT 2023
24 Statement of profit or loss
25 Statement of comprehensive income
26 Statement of financial position
27 Statement of changes in equity
28 Statement of cash flows
29 Notes to the financial statements
Financial statements
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ANNUAL REPORT 2023 | SEEKA LIMITED24
Statement of profit or loss
For the year ended 31 December 2023
The accompanying notes form an integral part of these financial statements
New Zealand dollarsNotes
2023
$000s
2022
$000s
Revenue
3
300,920 348,387
Cost of sales
4
252,194 280,078
Gross profit
48,726 68,309
Other income
3
3,270 755
Share of profit of associates
24
282 1,154
Other costs
4
26,290 24,139
Earnings (EBITDA)
1
25,988 46,079
Depreciation expense
10
15,520 16,055
Lease depreciation expense
13
10,462 9,516
Impairments
4
3,465 1,016
Loss on revaluation of property, plant and equipment
10
294 -
Amortisation of intangible assets
11
365 406
(Loss) / earnings (EBIT)
2
( 4,118) 19,086
Interest expense
12,028 7,204
Lease interest expense
13
4,842 4,289
Net (loss) / profit before tax
( 20,988) 7,593
Income tax (benefit) / charge
( 8,264) 1,624
Deferred tax charge / (benefit)
1,742 ( 535)
Total tax (benefit) / charge
6
( 6,522) 1,089
Net (loss) / profit attributable to equity holders
( 14,466) 6,504
Earnings per share for profit attributable to the ordinary
equity holders of the company during the year
Basic (loss) / earnings per share
20
( $ 0.34)$ 0.16
Diluted (loss) / earnings per share
20
( $ 0.34)$ 0.16
1. EBITDA, a non-GAAP measure, is earnings before interest, tax, depreciation, amortisation, impairments and revaluations, see note 1.
2. EBIT, a non-GAAP measure, is earnings before interest and tax, see note 1.
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25SEEKA LIMITED | ANNUAL REPORT 2023
Statement of comprehensive income
For the year ended 31 December 2023
New Zealand dollarsNotes
2023
$000s
2022
$000s
Net (loss) / profit for the year
( 14,466) 6,504
Items that will not be reclassified to profit or loss, net of tax
Gain on revaluation of land and buildings
10
7,466 9,736
(Loss) / gain on revaluation of water shares
11
( 2,756) 162
Total items that will not be reclassified to profit or loss
4,710 9,898
Items that may be reclassified subsequently to profit or loss, net of tax
Movement in cash flow hedge reserve
21
( 1,576) 2,864
Movement in foreign currency translation reserve
21
3 47
Movement in foreign currency revaluation reserve
21
216 ( 92)
Total items that may be reclassified subsequently to profit or loss
( 1,357) 2,819
Total net (loss) / profit for the year attributable to equity holders
( 11,113) 19,221
The accompanying notes form an integral part of these financial statements
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ANNUAL REPORT 2023 | SEEKA LIMITED26
Statement of financial position
As at 31 December 2023
New Zealand dollarsNotes
2023
$000s
2022
$000s
Equity
Share capital
18
162,865 162,746
Reserves
21
58,790 55,437
Retained earnings
21
38,294 52,760
Total equity
259,949 270,943
Current assets
Cash and cash equivalents
5,207 3,554
Trade and other receivables
14
32,604 33,147
Biological assets - crop
12
21,766 18,408
Inventories
15
10,640 11,900
Irrigation water rights
231 127
Assets classified as held for sale
9
3,205 6,293
Tax assets
6
369-
Total current assets
74,022 73,429
Non current assets
Trade and other receivables
14
3,367 5,099
Property, plant and equipment
10
387,710 375,788
Intangible assets
11
24,239 26,934
Right-of-use lease assets
13
50,507 55,805
Investment in associates and joint arrangements
24
4,639 5,952
Derivative financial instruments
30
1,249 3,438
Investment in financial assets
23
1,261 1,424
Deferred tax assets
7
1,817-
Total non current assets
474,789 474,440
Total assets
548,811 547,869
Current liabilities
Tax liabilities
6
- 337
Trade and other payables
16
25,278 32,778
Lease liabilities
13
9,941 9,631
Interest bearing liabilities
17
49,291 22,870
Total current liabilities
84,510 65,616
Non current liabilities
Interest bearing liabilities
17
128,292 128,072
Lease liabilities
13
54,821 60,434
Deferred tax liabilities
7
21,239 22,804
Total non current liabilities
204,352 211,310
Total liabilities
288,862 276,926
Net assets
259,949 270,943
The accompanying notes form an integral part of these financial statements
On behalf of the Board.
F Hutchings A Waugh
Chairman Director Dated: 28 February 2024
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27SEEKA LIMITED | ANNUAL REPORT 2023
Statement of changes in equity
For the year ended 31 December 2023
New Zealand dollarsNotes
Share
capital
$000s
Cash
flow hedge
reserve
$000s
Foreign
currency
revaluation
reserve
$000s
Foreign
currency
translation
reserve
$000s
Share
reserve
$000s
Water
share
revaluation
reserve
$000s
Land and
buildings
revaluation
reserve
$000s
Retained
earnings
$000s
Total
$000s
2023
Equity at 1 January 2023
162,746 2,476 ( 2) ( 161) - 2,756 50,368 52,760 270,943
Net (loss)
- - - - - - - ( 14,466) ( 14,466)
Foreign exchange movement
- - 216 3 - - - - 219
Other comprehensive (loss) / income
- ( 1,576) - - - ( 2,756) 7,466 - 3,134
Total comprehensive (loss) / income
- ( 1,576) 216 3 - ( 2,756) 7,466 ( 14,466) ( 11,113)
Transactions with owners
Employee share scheme receipts
18
119 - - - - - - - 119
Total transactions with owners
119 - - - - - - - 119
Equity at 31 December 2023
162,865 900 214 ( 158) - - 57,834 38,294 259,949
2022
Equity at 1 January 2022
151,681 ( 388) 90 ( 208) 526 2,594 40,632 51,564 246,491
Net profit
- - - - - - - 6,504 6,504
Foreign exchange movement
- - ( 92) 47 - - - - ( 45)
Other comprehensive income
- 2,864 - - - 162 9,736 - 12,762
Total comprehensive income / (loss)
- 2,864 ( 92) 47 - 162 9,736 6,504 19,221
Transactions with owners
Shares issued
18
9,297 - - - - - - - 9,297
Employee share scheme receipts
18
794 - - - - - - - 794
Grower share scheme receipts
18
401 - - - - - - - 401
Movement in employee share
entitlement reserve
21
461 - - - ( 423) - - - 38
Movement in grower share
entitlement reserve
21
112 - - - ( 103) - - - 9
Dividends declared and paid
22
- - - - - - - ( 5,308) ( 5,308)
Total transactions with owners
11,065 - - - ( 526) - - ( 5,308) 5,231
Equity at 31 December 2022
162,746 2,476 ( 2) ( 161) - 2,756 50,368 52,760 270,943
The accompanying notes form an integral part of these financial statements
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ANNUAL REPORT 2023 | SEEKA LIMITED28
Statement of cash flows
For the year ended 31 December 2023
New Zealand dollarsNotes
2023
$000s
2022
$000s
Operating activities
Cash was provided from:
Receipts from customers
304,715 346,084
Interest and dividends received
44 95
Insurance proceeds
1,002 -
Cash was disbursed to:
Payments to suppliers and employees
( 287,264) ( 313,426)
Interest paid
( 12,847) ( 7,204)
Lease interest paid
( 4,842) ( 4,289)
Income taxes refunded / (paid)
1,863 ( 9,132)
Net cash inflows from operating activities
5
2,671 12,128
Investing activities
Cash was provided from:
Sale of property, plant and equipment
10
460 596
Cash acquired in acquisition of business
19
- 33
Distributions and share buy backs from investments
475 518
Sale of investment in financial assets
23
- 253
Proceeds from sale of assets classified as held for sale
9
5,266 527
Repayment of grower or grower entity advances
22,462 34,272
Cash was applied to:
Purchase of property, plant, equipment and intangibles
( 16,574) ( 29,681)
Development of bearer plants
( 6,162) ( 4,183)
Acquisition of business
19
- ( 8,853)
Acquisition of associate
24
( 100) ( 1,358)
Advances to growers or grower entities
( 22,462) ( 34,022)
Net cash outflows from investing activities
( 16,635) ( 41,898)
Financing activities
Cash was provided from:
Proceeds of non-current bank borrowings
17
38,000 50,000
Proceeds of current bank borrowings
17
119,919 64,753
Proceeds from employee and grower loyalty share schemes
18
119 1,195
Cash was applied to:
Principal lease payments
13
( 10,814) ( 9,231)
Repayment of non-current bank borrowings
17
( 38,000) ( 34,175)
Repayment of current bank borrowings
17
( 93,445) ( 47,216)
Payment of dividend to and behalf of shareholders
22
- ( 4,374)
Net cash inflows from financing activities
15,779 20,952
Net increase / (decrease) in cash and cash equivalents
1,815 ( 8,818)
Effect of foreign exchange rates
( 162) 11
Opening cash and cash equivalents
3,554 12,361
Closing cash and cash equivalents
5,207 3,554
The accompanying notes form an integral part of these financial statements
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29SEEKA LIMITED | ANNUAL REPORT 2023
Notes to the financial statements
For the year ended 31 December 2023
This section contains the notes to the consolidated financial statements (financial statements) for Seeka Limited, its
subsidiaries and associates. To give stakeholders a clear insight into how Seeka organises its business, the note disclosures are
grouped into seven sections.
NoteDetailsPage
Basis of preparation 30
Accounting policies that apply to Seeka's full set of financial statements
Performance 32
Where Seeka generates its revenues and their associated operating costs
1. Segment information 32
2. Turnover 34
3. Revenue and other income 34
4. Cost of sales and operating expenses 36
5. Reconciliation of net operating surplus after taxation with cash flows from operating activities 37
6. Income tax expense 38
7. Deferred tax 39
8. Events occurring after balance date 39
Assets 40
How Seeka allocates resources across its operations
9. Assets classified as held for sale 40
10. Property, plant and equipment 41
11. Intangible assets 43
12. Biological assets - crop 46
13. Right-of-use lease assets and lease liabilities 47
Working capital 49
How Seeka manages its operating cash flow
14. Trade and other receivables 49
15. Inventories 49
16. Trade and other payables 50
Funding 51
How Seeka organises its capital structure
17. Interest bearing liabilities 51
18. Share capital 52
19. Business combination 53
20. Earnings and net tangible assets per share 54
21. Retained earnings and reserves 54
22. Dividends 56
Investments 57
How Seeka manages its investments in shares, subsidiaries, associates and joint arrangements
23. Investment in financial assets 57
24. Investment in associates and joint arrangements 57
Other notes 60
All other note disclosures
25. Contingencies 60
26. Commitments 60
27. Related party transactions 60
28. Risk management 62
29. Determination of fair values of financial and non-financial assets and liabilities 65
30. Derivative financial instruments 67
31. Financial instruments summary 68
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ANNUAL REPORT 2023 | SEEKA LIMITED30
Reporting entity and statutory base
The financial statements presented are those of the consolidated
Seeka group. Seeka Limited is referred to as Seeka Limited or the
Company. The group, which is the Company and all subsidiaries
controlled by Seeka Limited, is referred to as the Group, Seeka, or
Seeka Group.
Seeka Limited is a profit-orientated company registered in New
Zealand under the Companies Act 1993 and a Financial Markets
Conduct Reporting Entity for the purposes of the Financial Markets
Conduct Act 2013. Seeka Limited is listed and its ordinary shares are
quoted on the NZX main board equity security market (NZX Main
Board).
Nature of operations
Seeka is a produce business operating in New Zealand and Australia.
In New Zealand the Group provides orchard management, orchard
leasing, post-harvest and retail services to New Zealand’s kiwifruit,
avocado, citrus, persimmon, and Kiwiberry industries. Seeka
manufactures and sells the Kiwi Crush™ and Kiwi Crushies product
range along with avocado oil. The Group also provides retail and
ripening services for imported tropical produce, and operates a
wholesale market.
In Australia, Seeka owns, leases and operates orchards and associated
post-harvest assets, making the Group one of the largest producers
and suppliers of Australian kiwifruit and nashi pears, a major supplier
of European pears, plus other fruits, including plums and jujube dates.
Summary of material accounting policies
The accounting policies have been applied consistently throughout the
periods presented in the financial statements.
Statement of compliance and basis of preparation
The financial statements for the Group have been prepared in
accordance with the requirements of Part 7 of the Financial Markets
Conduct Act 2013. The financial statements have been prepared
in accordance with New Zealand Generally Accepted Accounting
Principles (GAAP), incorporating New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS) and other
applicable financial reporting standards as appropriate for profit-
oriented entities. The Group financial statements also comply with
International Financial Reporting Standards (IFRS).
The financial statements are prepared on a historical cost basis, with
the exception of:
–Assets classified as held for sale at fair value (note 9)
–Land and buildings at fair value (note 10)
–Biological assets - crop at fair value (note 12)
–Right-of-use lease assets and lease liabilities at present value of
expected cash payments (note 13)
–Investment in financial assets held at fair value (note 23)
–Financial assets and liabilities (including derivative instruments) at
fair value through comprehensive income (note 30 and note 31)
The material accounting policies applied in the preparation of the
financial statements are set out below and those that are considered
material to an understanding of the financial statements are provided
throughout the notes in grey shading.
The financial statements were approved by the Board of Directors (the
Board) on 28 February 2024.
Basis of consolidation
Subsidiaries
Subsidiaries are fully consolidated from the date of acquisition, being
the date on which the Group obtains control, and continue to be
consolidated until the date when such control ceases. The financial
statements of the subsidiaries are prepared for the same reporting
period as the Company, using consistent accounting policies.
The acquisition method of accounting is used to account for the
acquisition of subsidiaries by the Group. The cost of an acquisition is
measured as the fair value of the assets exchanged, equity instruments
issued and liabilities incurred or assumed at the date the acquisition is
settled. Direct acquisition costs are expensed as incurred.
Intercompany transactions, balances and unrealised gains on
transactions between companies are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence
of the impairment of the asset transferred. Accounting policies
of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Foreign currency transactions
Foreign currency transactions are translated into the functional
currency (NZD) using the exchange rates prevailing during the month
of that transaction. Foreign exchange gains and losses resulting from
the settlement of such transactions are recognised in the statement of
profit or loss. The presentational currency is the New Zealand dollar
(NZD).
Foreign operations
The results and financial position of all the Group entities (none of
which has the currency of a hyper-inflationary economy) that have
a functional currency different from the presentation currency are
translated into the presentation currency as follows:
–Assets and liabilities for each entity's balance sheet within the
Group are translated at the closing rate at the date of that balance
sheet;
–Income and expenses for each entity's income statement
and statement of comprehensive income, are translated at
average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions); and
–All resulting exchange differences are recognised in other
comprehensive income.
Basis of preparation
This section sets out the Group’s accounting policies that apply to the full set of financial statements. Accounting policies
which are limited to a specific note are described in that note.
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31SEEKA LIMITED | ANNUAL REPORT 2023
Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning future
operational and financial performance. By definition, these
assumptions may not always equal actual results. The estimates
and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities are
identified in the notes below. Estimates and judgements are
continually evaluated and are based on historical experience as
adjusted for current market conditions and other factors, including
expectations of future events that are believed to be reasonable under
the circumstances. Assumptions underlying management’s estimates
can be found in the following notes to the financial statements.
NoteArea of estimation or judgement
10.Property, plant and
equipment
Valuation and impairment
assessment
11.Intangible assetsImpairment assessment and CGU
allocation
Going concern assumption
The financial statements have been prepared on a going concern basis.
The Directors have carefully considered the ability of the Group to
operate as a going concern for at least the next 12 months from the
date of signing these financial statements.
The Directors have considered the economic environment, the
forward outlook for the kiwifruit industry, the forecast covenant
compliance, and have made due enquiry into the appropriateness of
the assumptions underlying the budgeting forecasts. The Directors
have considered the working capital position of the Group and noted
that the cash and cash equivalent balance of $5.2m and undrawn term
facilities of $20.0m provide sufficient headroom, alongside expected
future cash flows and an additional $20.0m credit line available
between February 2024 and July 2024, to support the business for
at least the next 12 months past the signing date of these financial
statements.
The Directors have concluded that the Group will continue to operate
as a going concern and the financial statements are prepared on that
basis.
Climate impact
The longer-term impacts of climate change are being analysed
and Seeka is mitigating these risks through regional diversification,
innovative growing techniques, and research and development. Climate
change brings both opportunities and risks for the business, which are
detailed in the sustainability section of this report.
Goods and services tax (GST)
The statement of profit or loss and statement of comprehensive
income have been prepared so that all components are stated
exclusive of GST. All items in the statement of financial position are
stated net of GST, with the exception of receivables and payables,
which include GST invoiced.
Impact of standards issued but not yet applied by the
entity
There are no new standards, amendments or interpretations that have
been issued and are effective that are expected to have a significant
impact on the Group.
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ANNUAL REPORT 2023 | SEEKA LIMITED32
Performance
1. Segment information
The Group’s operating segments engage in business activities that
earn revenues, incur expenses and are reported in a manner consistent
with the internal reports provided to the chief decision makers, being
the Directors, who regularly evaluate the allocation of resources
alongside operational outcomes, such as EBITDA and EBIT, and are
responsible for setting strategic direction.
The Group has five operating segments:
–Four New Zealand segments express the range of complementary
services delivered to New Zealand’s produce industries and the
retail sector.
–A single Australian operating segment covers the integrated supply
chain service for the Group’s Australian-grown fruit.
Direct segment revenues and operating costs are allocated to each
segment. Administration costs, overheads, grower service costs
and other income from the sale of assets recorded in the statement
of profit or loss are allocated to all other segments. Transactions
between segments are conducted at arm’s length and are eliminated
on consolidation.
New Zealand segments
Orchard operations
The Group provides on-orchard management services to orchard
owners who produce kiwifruit, avocado, citrus and Kiwiberry crops.
The Group produces kiwifruit, avocado, citrus and Kiwiberry from:
–Short term leased orchards (typically three-year rolling contracts)
whereby the Group recovers costs and shares any profits with the
orchard owners.
–Long term leased land which the Group has developed into
productive orchards, pays all development and production costs,
owns all crops for the term of the lease, and shares profit with the
landowner after all costs are recovered from crop proceeds.
–Owned orchards whereby the Group incurs growing and harvest
costs and receives all orchard income from crop sales.
Post-harvest operations
The Group provides post-harvest services to the kiwifruit, avocado,
citrus, persimmon and Kiwiberry industries. This includes all crops
from the Group’s orchard management and lease operations, plus
crops from independent orchard owners.
Retail service operations
The Group provides fruit marketing services in New Zealand and
internationally, particularly in the Australian and Asian markets. This
includes fruit from the Group’s New Zealand based orchard and post-
harvest operations. In New Zealand the Group also provides retail and
ripening services for imported fruit, and operates a wholesale market.
Retail service operations include the production and selling of Kiwi
Crush™, Kiwi Crushies and avocado oil to the retail sector and
hospitals, along with post-harvest services for Kiwiberry.
All other segments - New Zealand
This represents the Group’s aggregated administration, grower
services and overhead sections recorded in the statement of profit or
loss, and impairment and revaluations of other assets not attributed
directly to any other segment. It also includes the gain on sale from
assets that had been classified as held for sale, and are not attributed
directly to any other segment.
Australian operations
The Group grows, provides post-harvest services, and retails all
produce from orchards the Group owns or leases in Australia. The
main products are kiwifruit, nashi pears, European pears, jujubes and
plums which are primarily sold in Australia.
This section focuses on the Group’s financial performance and details the contributions made from the individual operating segments.
EBITDA and EBIT
EBITDA is earnings before interest, tax, depreciation, amortisation, impairments and revaluations. EBITDA is an indicator of profitability and
reflects operating cash flow generation.
EBIT is earnings before interest and tax; an indicator of profitability that excludes interest and income tax expenses.
Non-GAAP financial information does not have a standard meaning prescribed by GAAP and therefore may not be comparable to similar financial
information presented by other entities. The Board considers EBITDA and EBIT as useful measures of financial performance for both investors
and management as they are indicators of the Group's operating profitability that remove the impact of tax and the interest expenses associated
with debt and leases (EBIT), along with depreciation, amortisation, impairment and revaluation expenses associated with the Group's large
investments in fixed and leased assets (EBITDA).
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33SEEKA LIMITED | ANNUAL REPORT 2023
The following table details the operating segments at balance date.
New ZealandAustraliaGroup
New Zealand dollars
Orchard
operations

$000s
Post-harvest
operations
$000s
Retail service
operations
$000s
All other
segments
$000s
Australian
operations
$000s
Total
$000s
2023
Income statement
Turnover
1
86,504 182,386 62,841 931 10,356 343,018
Gross segment revenue
86,798 185,018 20,743 931 10,356 303,846
Eliminations
( 293) ( 2,633) - - - ( 2,926)
Total segment revenue
86,505 182,385 20,743931 10,356 300,920
EBITDA
2
954 43,758 2,585 ( 21,980) 671 25,988
Depreciation expense
4
( 962) ( 11,635) ( 304) ( 1,531) ( 1,088) ( 15,520)
Lease depreciation expense
5
( 1,599) ( 6,647) ( 667) ( 686) ( 863) ( 10,462)
Impairments
- ( 118) ( 90) ( 1,413) ( 1,844) ( 3,465)
Loss on revaluation of property, plant & equipment
- ( 294) - - - ( 294)
Amortisation of intangible assets
- - - ( 365) - ( 365)
EBIT
3
( 1,607) 25,064 1,524( 25,975) ( 3,124) ( 4,118)
Lease interest expense
5
( 696) ( 2,126) ( 303) ( 858) ( 859) ( 4,842)
EBIT
3
(after lease interest expense)
( 2,303) 22,938 1,221 ( 26,833) ( 3,983) ( 8,960)
Interest expense
6
( 10,642) ( 1,386) ( 12,028)
Tax charge on profit
4,575 1,947 6,522
Profit / (loss) after tax
( 2,303) 22,938 1,221 ( 32,900) ( 3,422) ( 14,466)
Balance sheet
Segment assets
84,799 360,184 13,189 39,121 51,518 548,811
Total assets
84,799 360,18413,189 39,121 51,518 548,811
Segment liabilities
42,746 160,769 12,735 31,281 41,331 288,862
Total liabilities
42,746 160,769 12,735 31,281 41,331 288,862
2022
Income statement
Turnover
1
80,526 233,755 54,418 1,054 13,979 383,732
Gross segment revenue
80,589 237,297 19,072 1,054 13,979 351,991
Eliminations
( 63) ( 3,541) - - - ( 3,604)
Total segment revenue
80,526 233,756 19,072 1,054 13,979 348,387
EBITDA
2
4,556 58,979 794 ( 19,231) 981 46,079
Depreciation expense
4
( 1,001) ( 12,020) ( 337) ( 1,622) ( 1,075) ( 16,055)
Lease depreciation expense
5
( 1,311) ( 5,636) ( 616) ( 1,118) ( 835) ( 9,516)
Impairments
- ( 144) ( 681) - ( 191) ( 1,016)
Amortisation of intangible assets
- - - ( 406) - ( 406)
EBIT
3
2,244 41,179 ( 840) ( 22,377) ( 1,120) 19,086
Lease interest expense
5
( 422) ( 2,217) ( 307) ( 412) ( 931) ( 4,289)
EBIT
3
(after lease interest expense)
1,822 38,962 ( 1,147) ( 22,789) ( 2,051) 14,797
Interest expense
6
( 6,000) ( 1,204) ( 7,204)
Tax charge on profit
( 2,067) 978 ( 1,089)
Profit / (loss) after tax
1,822 38,962 ( 1,147) ( 30,856) ( 2,277) 6,504
Balance sheet
Segment assets
84,881 360,366 11,482 36,613 54,527 547,869
Total assets
84,881 360,366 11,482 36,613 54,527 547,869
Segment liabilities
44,642 145,053 12,394 40,066 34,771 276,926
Total liabilities
44,642 145,053 12,394 40,066 34,771 276,926
1. Turnover is a non-GAAP measure, see calculations in note 2.
2. EBITDA, a non-GAAP measure, is earnings before interest, tax,
depreciation, amortisation, impairments and revaluations.
3. EBIT, a non-GAAP measure, is earnings before interest and tax.
4. Depreciation includes the depreciation of fixed assets.
5. Lease interest and lease depreciation are as a result of NZ IFRS 16
Leases, see note 13.
6. Interest includes finance costs for borrowings.
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ANNUAL REPORT 2023 | SEEKA LIMITED34
The following table reconciles segment EBITDA before and after applying NZ IFRS 16.
New ZealandAustraliaGroup
New Zealand dollars
Orchard
operations

$000s
Post-harvest
operations
$000s
Retail service
operations
$000s
All other
segments
$000s
Australian
operations
$000s
Total
$000s
2023 - EBITDA
EBITDA pre NZ IFRS 16
( 1,365) 35,279 1,562 ( 23,721) ( 1,423) 10,332
NZ IFRS 16 lease costs
2,319 8,479 1,023 1,741 2,094 15,656
EBITDA after applying NZ IFRS 16
954 43,758 2,585 ( 21,980) 671 25,988
2022 - EBITDA
EBITDA pre NZ IFRS 16
1,376 52,836 ( 51) ( 20,535) ( 1,067) 32,559
NZ IFRS 16 lease costs
3,180 6,143 845 1,304 2,048 13,520
EBITDA after applying NZ IFRS 16
4,556 58,979 794 ( 19,231) 981 46,079
2. Turnover
The following table reconciles turnover to revenue.
New Zealand dollars
2023
$000s
2022
$000s
Turnover
343,018 383,732
Value of sales made as agent
( 42,098) ( 35,345)
Revenue
300,920 348,387
Turnover
The Board considers turnover a useful measure of the Group's operating activity as it represents the total transactional value of goods and
services provided to external customers during the year. As such turnover includes the value of fruit sales made on behalf of growers and suppliers
where the Group acts as the agent, and is considered the supplier by the purchasing party. This includes all produce sales both local and export.
3. Revenue and other income
New Zealand dollarsNotes
2023
$000s
2022
$000s
Total revenue
300,920 348,387
Other income
Interest
24 16
Gain on sale of assets classified as held for sale
9
1,833 364
Dividends received
1 79
Increase in fair value of irrigation water rights
144 -
Insurance Income
1,090 -
Other income
178 296
Total other income
3,270 755
Total revenue and other income
304,190 349,142
During the year the Group recognised no costs relating to the measurement of the grower share scheme issued based on the Black Scholes Model
(Dec 2022 - $0.01m).
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35SEEKA LIMITED | ANNUAL REPORT 2023
Accounting policies
The Group’s major revenue streams are post-harvest operations,
orchard management, retail services and Australian operations in
accordance with NZ IFRS 15: Revenue from contracts with customers (NZ
IFRS 15).
Post-harvest
The Group enters into two standardised post-harvest contracts:
–The first has two performance obligations; to collect the supply
of fruit via picking and transportation, and maturity testing. The
charges are separated in the contract. All revenue is recognised
when the service is performed.
–The second has three performance obligations; to pack fruit, to cool
and dispatch fruit, and to sell Class 2 fruit to authorised markets.
These are stand-alone services provided by the Group. Each
performance obligation has a separate transaction price detailed in
the contract and the obligations are recognised when services are
performed; packing revenue as fruit is packed, cooling revenue as
fruit is loaded out from cool storage, and Class 2 as fruit is sold and
delivered.
Orchard management
The Group enters into two orchard management contracts that are
largely standardised:
–The first has one performance obligation; to manage fruit growing.
Revenue is recognised as the service is performed and calculated at
cost plus a margin per the contract or at a fixed per-hectare charge.
The management fee included in the contract is recognised evenly
over the contract's 12 month period.
–The second has one performance obligation; to collect the supply
of fruit on short term or long term leased orchards. The transaction
price is determined using a forecasted OGR. Revenue is recognised
when crops are picked (in the June interim accounts for kiwifruit).
Retail services
The Group enters into three retail service contracts which are
customised to the service being offered:
–The first has one performance obligation; to sell fruit on the owner’s
behalf. As the sales agent, the Group only collects a marketer’s
commission which is recognised when the fruit is sold and delivered.
–The second has one performance obligation; to either store or ripen
fruit. Revenue is recognised as the fruit is stored or ripened.
–The third has one performance obligation; to provide ordered
product. The transaction price is based on the agreed price with
revenue recognised when the fruit is sold and delivered.
Australia
The Group has one type of contract that is entered by the Australian
business; for the sale and supply of fruit.
–The fruit sale and supply contracts are entered on a one-to-one
basis with the fruit purchaser and are largely standardised. They
have one performance obligation; to provide the fruit to the
customer. The transaction price is based on the agreed price and
recognised when the fruit is sold and delivered.

Principal versus agent relationship
A principal relationship is one where the Group has the performance
obligation to provide the good or service directly and has control of the
asset or has a right to direct the asset. An agency relationship is one
where the performance obligation is to arrange for the good or service
on behalf of the supplier. The Group currently has agent relationships
for the sale of some fruit and vegetables in the retail services segment.
Impact of seasonality
Group revenues are generated from seasonal horticultural operations,
with post-harvest revenues recognised as services are provided and
orcharding revenues recognised once the fruit is harvested. Retail
revenues are generated at the point of sale. In New Zealand kiwifruit
are harvested from March to June, avocados from July to February, and
Kiwiberry from February to March. In Australia nashi and European
pears are harvested January to March, and kiwifruit from March to
May. As a result of these harvest timings around 45~70% of orchard
revenues are recognised in the first six months of the financial year.
Due to seasonal fluctuations, the timing of the provision of post-
harvest services can vary from year to year, however normally 70~85%
is recognised in the first six months of the financial year, but can be
impacted by seasonal fluctuations.
Irrigation water rights
Water allocation rights are carried at fair value supported by the
value of the traded rights on a recognised exchange or market at
measurement date. Annual water allocation rights are recognised as
a current asset when they are allocated to the Group's permanent
water shares from the first of July each year by the Victorian Water
Register, and are subsequently expensed when the entitlement is
used to irrigate orchards. Any gain on revaluation is recognised in the
statement of profit or loss.
Interest income
Interest income is recognised on a time-proportion basis using the
effective interest method.
Dividend income
Dividend income is recognised when the right to receive payment is
established.
Gain on sale of assets classified as held for sale
The gain on sale of assets classified as held for sale is recognised when
a sale and purchase agreement is unconditional and the consideration
is paid or payable at that date.
Insurance income
Insurance income is recognised when the right to receive payment is
established.
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ANNUAL REPORT 2023 | SEEKA LIMITED36
4. Cost of sales and operating expenses
New Zealand dollarsNotes
2023
$000s
2022
$000s
Operating materials and services
183,168 192,855
Direct employee benefits
72,384 87,188
Decrease in fair value of biological assets - crop
12
( 3,358) 35
Total cost of sales
252,194 280,078
Total other employee benefits
13,514 12,476
General administrative expenses
10,007 8,587
Audit fees paid to principal auditors - paid on a Group basis
421 529
Audit fees paid to previous auditor - paid on a Group basis
96-
Tax compliance and consulting fees paid to principal auditors
- 12
Tax pooling services paid to principal auditors
- 12
Debt covenant compliance agreed upon procedures paid to principal auditors
5 7
Acquisition and restructuring costs
534 419
Directors' fees and expenses
605 624
Short term lease expenses
1,108 1,376
Decrease in fair value of irrigation water rights
- 97
Total other costs
26,290 24,139
Depreciation expense
10
15,520 16,055
Lease depreciation expense
13
10,462 9,516
Amortisation of intangible assets
11
365 406
Impairments and revaluations
Loss on revaluation of property, plant and equipment
10
294-
Impairment of property, plant and equipment
10
1,476 144
Impairment of biological assets
12
486 191
Impairment of associates
24
1,413 -
Impairment of intangible assets
11
- 681
Impairment of onerous right of use lease asset
13
90 -
Total impairment and revaluation
3,759 1,016
Interest expense
12,028 7,204
Lease interest expense
13
4,842 4,289
Total expenses
325,460 342,703
During the year the Group recognised no costs relating to the measurement of the employee share schemes issued based on the Black Scholes
Model (Dec 2022 - $0.04m).
Accounting policies
Operating expenses are recognised in the statement of profit or loss as incurred, except where future economic benefits arise and they are
recorded as a prepayment.
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date, are
recognised in other payables. The employee liabilities are measured at the amounts expected to be paid when settled. Liabilities for non-accumulating
sick leave are recognised when the leave is taken and measured at the rates paid or payable.
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37SEEKA LIMITED | ANNUAL REPORT 2023
5. Reconciliation of net operating surplus after taxation with cash flows from operating activities
New Zealand dollars
2023
$000s
2022
$000s
Net operating (loss) / surplus after taxation
( 14,466) 6,504
Add / (less) non cash items:
Depreciation
15,520 16,055
Lease depreciation
10,462 9,516
Impairments
3,4651,016
Loss on revaluation of property, plant and equipment
294 -
Revaluation of employee share scheme
- 38
Revaluation of grower share scheme
- 9
Movement in deferred tax
( 3,382) 4,431
Movement in fair value of biological assets - crop
( 3,358) 35
Amortisation of intangible assets
365 406
23,366 31,506
Add / (less) items not classified as an operating activity:
Gain on sale of property, plant and equipment
( 16) ( 138)
Gain on sale of assets classified as held for sale
( 1,833) ( 364)
(Decrease) / increase in current water allocation account
( 170) 133
( 2,019) ( 369)
(Increase) / decrease in working capital:
(Decrease) in accounts payable
( 3,261) ( 3,730)
(Increase) in accounts receivable/prepayments
( 887) ( 6,725)
Decrease / (increase) in inventory
1,260 ( 2,593)
(Decrease) in taxes due
( 1,322 )( 12,465)
( 4,210) ( 25,513)
Net cash flow from operating activities
2,671 12,128
Accounting policies
The statement of cash flows is prepared using the direct approach. Cash and cash equivalents are shown exclusive of GST.
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ANNUAL REPORT 2023 | SEEKA LIMITED38
6. Income tax expense
New Zealand dollarsNotes
2023
$000s
2022
$000s
a. Current tax expense
Current year
( 5,204) 1,410
Prior period adjustment
( 3,060) 214
Total current tax (benefit) / charge
( 8,264) 1,624
Deferred tax expense
Origination and reversal of temporary differences
( 199) 598
Prior period adjustment
1,941( 1,133)
Total deferred tax charge / (benefit)
1,742( 535)
Total income tax (benefit) / charge
( 6,522) 1,089
b. Numerical reconciliation of income tax expense to prima facie tax payable
(Loss) / profit before income tax expense
( 20,988) 7,593
Tax at the New Zealand tax rate of 28%
( 5,876) 2,126
Tax at the Australian tax rate of 30%
( 132)( 60)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income
365 63
(Over) provision in prior years - temporary differences
( 1,119)( 919)
Benefit of tax credits
( 181)( 121)
Tax paid in respect of acquisitions pre-Group liabilities
647-
Other
( 226)-
Income tax (benefit) / charge
( 6,522) 1,089
c. Imputation credit account
Imputation credits available for use in subsequent reporting periods
30,240 27,742
The above amounts represent the balance of the imputation account as at the end of the reporting
period, adjusted for:
a. Imputation credits that will arise from the payment of the amount of the provision for income tax
b. Imputation debits that will arise from the payment of dividends recognised as a liability at the
reporting date; and
c. Imputation credits that will arise from the receipts of dividends recognised as receivables at the
reporting date.
d. Current tax asset / (liability)
Opening balance of current tax (liability) / asset
( 337)( 7,463)
Current tax liability acquired via acquisition
19
-( 653)
Adjustments for prior periods
3,060( 214)
Current year tax
5,204( 1,410)
Less tax (refund) / paid
( 1,751) 9,362
Transfer tax losses to deferred tax
( 5,763)-
Exchange differences
( 44) 41
Current tax asset / (liability)
369( 337)
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39SEEKA LIMITED | ANNUAL REPORT 2023
Accounting policies
Income tax expense comprises both current and deferred tax and is recognised in the statement of profit or loss.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date,
and any adjustment to the tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the tax losses of assets and liabilities
and their carrying amounts in the financial statements. Deferred tax is not accounted for if it arises from initial recognition of an asset or liability
in a transaction other than a business combination and that affects neither accounting or taxable profit. Differences relating to investments in
subsidiaries and jointly controlled entities are not recognised to the extent that they probably will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted at balance date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary
differences can be utilised.
7. Deferred tax
Deferred tax assets and liabilities are offset when there is a legally-enforceable right to offset current tax assets against current tax liabilities and
when the deferred income taxes relate to the same fiscal authority.
The following table details the offset amounts.
New Zealand dollarsNotes
2023
$000s
2022
$000s
Net deferred tax liabilities:
Opening balance
22,804 18,373
Deferred tax liability acquired via acquisition
19
- 226
Adjustments for prior periods
1,941( 1,133)
Exchange differences
22( 26)
(Received) / charged to the statement of profit or loss
( 199) 598
Charged to revaluation reserve
2,416 3,653
(Credited) / debited to hedge reserve
( 613) 1,113
(Benefit) of tax losses recognised
( 5,763)-
Remeasurement of water shares
( 1,186)-
Closing balance at end of year
19,422 22,804
The balance comprises temporary differences attributable to:
Temporary differences on non-current assets
24,515 22,712
Current liabilities
( 898)( 2,094)
Prepayments and accrued income
1,568 2,186
Losses reclassified as deferred tax
( 5,763) -
Net deferred tax liability
19,422 22,804
Deferred tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related tax benefit through the future taxable
profits is probable and these losses will be utilised in the near future. $5.76m was recognised at balance date and there were no unrecognised tax
losses (Dec 2022 - Nil).
The deferred tax liability recognised in the financial statements does not represent the tax that would be payable on the disposal of the buildings;
actual tax payable is limited to the reversal of tax depreciation claimed on that asset in prior period tax returns.

8. Events occurring after balance date
There are no material events occurring subsequent to balance date requiring adjustment to or disclosure in the financial statements.
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ANNUAL REPORT 2023 | SEEKA LIMITED40
Assets
This section focuses on the physical and intangible assets used by the Group to operate the business, deliver benefits to
stakeholders, add new income streams and generate revenues. Assets include post-harvest facilities, retail service facilities,
and software. Assets also include Group-owned land, vines, trees and crop on Group-owned and leased orchards. The Group
also has interests in water shares, leases and goodwill arising from Group acquisitions.
Disclosures are made on additions, disposals, revaluations, depreciation, impairments and amortisation.
9. Assets classified as held for sale
New Zealand dollarsNotes
2023
$000s
2022
$000s
Opening balance at 1 January
6,293 1,898
SunGold licence transferred from intangible assets
11
- 491
Water shares transferred from intangible assets
11
- 3,283
Transfers from property, plant and equipment
10
- 1,915
Development costs incurred
264 313
Sales settled by third parties at carrying value
( 3,352) ( 1,607)
Total assets classified as held for sale
3,205 6,293
The following table details the assets classified as held for sale by asset class.
New Zealand dollars
2023
$000s
2022
$000s
Asset class
Land and buildings
874 943
Property, plant and equipment
380 380
Intangible assets
500 3,783
Bearer plants
1,451 1,187
Total assets classified as held for sale
3,205 6,293
At 31 December 2023, 13.5 hectares of Northland orchards (Dec 2022 - 16.6 hectares) were classified as held for sale. No growing costs have
been attributed to the remaining orchards at 31 December 2023 as they are valued on a crop-off basis.
At 31 December 2022, 750ML of permanent water entitlement in Victoria, Australia, was classified as held for sale. The sale of the water
entitlement settled on 22 February 2023 for a consideration of $3.08m AUD.
All assets classified as held for sale in 2023 are included in the orchard operations segment. In 2022, $3.3m related to the water entitlement held
at December 2022, which was included in the Australian operations segment until its sale in February 2023.
Assets are classified as held for sale when their carrying amount will be recovered principally through a sale transaction rather than through
continuing use. This condition is met when the sale is highly probable and the assets are available for immediate sale in their present condition,
and the Group is committed to the sale and expects it to be completed within one year from the date of classification. The accounting standards
allow for the period to extend past 12 months if the circumstances causing the delay are out of Seeka's control. As at 31 December 2023, one
orchard of 13.5 hectares (Dec 2022 - one orchard at 13.5 hectares) has taken longer than 12 months to find a willing buyer, however Seeka remains
committed to selling the property, is actively marketing it and sale is anticipated within the next 12 months. Assets held for sale are recorded at
the lower of the carrying value or fair value less costs to sell.
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41SEEKA LIMITED | ANNUAL REPORT 2023
10. Property, plant and equipment
New Zealand dollars
Land and
buildings
$000s
Plant and
equipment
$000s
Motor
vehicles
$000s
Bearer
plants
$000s
Assets under
construction
$000s
Total
$000s
At 1 January 2023
Cost or valuation
280,850 150,667 3,131 37,187 21,311 493,146
Accumulated depreciation and impairment
( 29,912) ( 82,056) ( 1,249) ( 3,746) ( 395) ( 117,358)
Net book amount
250,938 68,611 1,882 33,441 20,916 375,788
Year ended 31 December 2023
Opening net book amount
250,938 68,611 1,882 33,441 20,916 375,788
Additions and transfers - net
16,211 10,505 74 4,831 ( 12,226) 19,395
Depreciation
( 5,928) ( 8,937) ( 255) ( 400) - ( 15,520)
Disposals
- ( 133) ( 280) - - ( 413)
Impairment of property, plant and equipment
( 120) ( 409) - ( 947) - ( 1,476)
Revaluation
9,614 - - - - 9,614
Foreign exchange
129 48 3 142 - 322
Closing net book amount
270,844 69,685 1,424 37,067 8,690 387,710
At 31 December 2023
Cost or valuation
306,804 161,087 2,928 42,160 9,085 522,064
Accumulated depreciation and impairment
( 35,960) ( 91,402) ( 1,504) ( 5,093) ( 395) ( 134,354)
Net book amount
270,844 69,685 1,424 37,067 8,690 387,710
At 1 January 2022
Cost or valuation
251,297 131,630 2,247 33,278 10,537 428,989
Accumulated depreciation and impairment
( 22,780) ( 73,740) ( 955) ( 3,289) ( 395) ( 101,159)
Net book amount
228,517 57,890 1,292 29,989 10,142 327,830
Year ended 31 December 2022
Opening net book amount
228,517 57,890 1,292 29,989 10,142 327,830
Additions from business combination
12,900 5,955 64 - - 18,919
Additions and transfers - net
4,126 13,195 1,040 5,228 10,774 34,363
Depreciation
( 7,132) ( 8,316) ( 294) ( 313) - ( 16,055)
Disposals
( 4) ( 139) ( 221) ( 114) - ( 478)
Impairment
- - - ( 144) - ( 144)
Revaluation
13,118 - - - - 13,118
Reclassification to assets classified as held for sale
( 644) - - ( 1,271) - ( 1,915)
Foreign exchange
57 26 1 66 - 150
Closing net book amount
250,938 68,611 1,882 33,441 20,916 375,788
Assets under construction are assets that are yet to be used and are not depreciated. When the asset is ready for use it is transferred to the
appropriate asset class. At 31 December 2023, assets under construction relate to the Sharp Road Accommodation development, and further
investment relating to building upgrades and packhouse automation.
Land and buildings
Land and buildings are revalued to their estimated market value on at least a three-year rolling cycle (excluding assets under construction), plus
any subsequent additions at cost, less subsequent depreciation for buildings. In New Zealand valuations are undertaken by CBRE Group Inc.,
independent registered valuer. At 31 December 2023, 52% (Dec 2022 - 42%) of Seeka's New Zealand land and building portfolio was externally
revalued in line with policy. Additionally, 25% were adjusted based on a desktop fair value calculation. Sensitivity analysis suggests the remaining
properties that were not revalued this year could cause a movement in land and buildings of between 0.82% and 3.79%. This is not considered a
material movement in land and building values.
In Australia valuations were last completed at 31 December 2022 by Opteon (Goulburn North East Vic) Pty Ltd, independent valuers based in
Victoria, Australia.
The valuers consider three different approaches in concert to arrive at a fair value;
1. Sales comparison - considers sales of other comparable properties.
2. Capitalisation of rentals - assumes a hypothetical lease of the property with a current market rental being established and capitalising this at an
appropriate rate of return that would be expected by a prudent investor. The 2023 year saw capitalisation rates move between (0.25%) - 0.50%
since the previous valuations of the same properties, some of which may have been up to three years prior.
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ANNUAL REPORT 2023 | SEEKA LIMITED42
Accounting policies
Bearer plants
Bearer plants are the Group's investment in kiwifruit vines, pear, jujube, avocado and other fruiting vines and trees on Group-owned and leased land. Bearer
plants are stated at historical cost less depreciation. Historical cost includes all costs incurred to purchase or establish the asset.
Land and buildings
Land and buildings are shown at fair value, based on periodic, but at least triennial valuations by independent valuers, plus any subsequent
improvements at cost, less depreciation. At each annual balance date, no less than one third of assets classified as land and buildings are revalued
and those valuations are used to assess the appropriateness of the carrying values of all land and building assets held by the Group, which effectively
revalue all land and buildings annually. Revaluations are performed more frequently if changing industry conditions may cause their carrying value
to differ significantly from fair value. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the
asset and the net amount is restated to the revalued amount of the asset.
Changes in the carrying amounts arising on revaluation of land and buildings are accounted for through comprehensive income and other reserves,
except where an asset's assessed fair value is less than the original cost, in which case the change is recognised in the statement of profit or loss.
Property, plant and equipment
All other property, plant and equipment are stated at historical cost less depreciation. Historical cost includes all costs incurred to purchase the
asset.
Subsequent additions at cost are included in the asset’s carrying value or recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs
and maintenance are charged to the statement of profit or loss during the financial period in which they are incurred.
Asset impairments are recognised in the statement of profit or loss.
3. Discounted cash flow - a variation of the investment method whereby it takes the current market rental calculated under the investment method
and forecasts net cash flows over a ten-year period. Cash flows are adjusted for expected growth in market rentals and estimated costs incurred
to maintain land and buildings in operational use. This method assumes land and buildings are sold in the terminal year (year 11).
Significant unobservable inputs inherent in the land and building valuation process include potential market comparative rentals, and the market
rental capitalisation rates. The higher the rental rate, the higher the fair value, and the higher the capitalisation rate, the lower the fair value.
Significant changes in either of these inputs would result in significant changes to the fair value measurement. See below;
1. Market rental rates - Packhouse rental rates as described in the valuation reports obtained in 2023 between $55/m2 - $130/m2 (Dec 2022 - $60/
m2 - $130/m2). Coolstore rental rates were between $0.40/tray - $0.63/tray (Dec 2022 - $0.40/tray - $0.65/tray)
2. Rental capitalisation rates - Capitalisation rates as described in the valuation reports obtained in 2023 were between 8.25% – 9.50% (Dec 2022
- 6.00% - 8.75%).
3. Discount rates – Discount rates as described in the valuation rates obtained in 2023 were between 9.23% - 10.37% (Dec 2022 – 6.50% - 9.00%).
The net book value of land is $47.24m (Dec 2022 - $47.41m) and buildings is $223.61m (Dec 2022 - $203.53m), see note 29.
The following table details the gain on revaluation of land and buildings recognised in the revaluation reserve, net of tax, of $7.47m (Dec 2022 - $9.74m).
New Zealand dollars
Land
$000s
Buildings
$000s
Total
$000s
Land and buildings revaluation reserve
1,252 6,214 7,466
As a consequence of the building revaluations conducted December 2023, $9.08m (Dec 2022 - $6.38m) of accumulated depreciation was offset
directly against the assets' cost or valuation, prior to revaluation.
In the year ended 31 December 2023, the Group assessed the useful lives of property, plant and equipment, and did not identify any material
situations where the useful life of an asset or group of assets was not appropriate or within the existing accounting policy. In the year ended 31
December 2022, the useful lives of buildings was reviewed and re-estimated to be 50 years from the date of the estimate.
The following table details the depreciated value of land and buildings if they were to be stated on a historical cost basis.
New Zealand dollars
2023
$000s
2022
$000s
Cost
268,168 251,959
Accumulated depreciation
( 62,884) ( 56,783)
Depreciated historical cost
205,284 195,176
Net book amount
270,844 250,938
Impairment of bearer plants
For the year ended 31 December 2023, $0.95m (Dec 2022 - $0.14m) of assets were impaired, which relate to bearer plant assets in Australia that
were removed.
Impairment of land, buildings, plant and equipment
For the year ended 31 December 2023, $0.53m (Dec 2022 - nil) of assets were impaired. This related to hail netting damaged in a hail event in
Australia and electrical infrastructure damaged in an electrical surge in one of our packhouses in New Zealand. Both events were covered by
insurance and in both instances assets were either replaced or in the process of being replaced as at 31 December 2023.
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43SEEKA LIMITED | ANNUAL REPORT 2023
11. Intangible assets
New Zealand dollarsNotes
Software
$000s
Goodwill
$000s
Water shares
$000s
Other
intangibles
$000s
Total
$000s
At 1 January 2023
Cost
4,380 22,212 5,399 377 32,368
Accumulated amortisation and impairment
( 3,403) ( 2,031) - - ( 5,434)
Net book amount
977 20,181 5,399 377 26,934
Year ended 31 December 2023
Opening net book amount
977 20,181 5,399 377 26,934
Additions
78 - - - 78
Remeasurement
- - ( 2,460) - ( 2,460)
Foreign exchange
- - 52 - 52
Amortisation
( 350) - - ( 15) ( 365)
Closing net book amount
705 20,181 2,991 362 24,239
At 31 December 2023
Cost
4,458 20,181 2,991 377 28,007
Accumulated amortisation and impairment
( 3,753) - - ( 15) ( 3,768)
Net book amount
705 20,181 2,991 362 24,239
At 1 January 2022
Cost
3,983 19,212 8,421 555 32,171
Accumulated amortisation and impairment
( 3,028) ( 2,031) - ( 33) ( 5,092)
Net book amount
955 17,181 8,421 522 27,079
Year ended 31 December 2022
Opening net book amount
955 17,181 8,421 522 27,079
Additions
395 - - - 395
Additions from business combination
19
- 3,681 - - 3,681
Transfers from investments in financial assets
- - - 377 377
Revaluation
- - 212 - 212
Impairment
- ( 681) - - ( 681)
Foreign exchange
2 - 49 - 51
Reclassification to assets classified as held for sale
- - ( 3,283) ( 491) ( 3,774)
Amortisation
( 375) - - ( 31) ( 406)
Closing net book amount
977 20,181 5,399 377 26,934
Critical accounting estimates and judgements
At 31 December 2023, 52% (Dec 2022 - 42%) of Seeka's New Zealand land and building portfolio was externally revalued in line with policy.
Additionally, 25% were adjusted based on a desktop fair value calculation.
Sensitivity analysis suggests the remaining properties that were not revalued this year could cause a movement in land and buildings of between 0.82%
and 3.79%. This is not considered a material movement in land and building values.
Depreciation
Land is not depreciated. Depreciation on other assets is calculated
using the straight line or diminishing value method to allocate their
cost or revalued amounts, net of their residual values, over their
estimated useful lives. The depreciation of bearer plants on leased
land orchards is aligned to the term of the lease.
The estimated useful lives of assets from revaluation date are:
– Buildings and fit outs 7 - 50 years
– Machinery 5 - 30 years
– Vehicles 4 - 15 years
–Furniture, fittings and equipment 5 - 15 years
– Bearer plants 4 - 25 years
Asset residual values and useful lives are reviewed, and adjusted
if appropriate, at balance date and an asset’s carrying amount is
immediately written down to its recoverable amount.
Gains and losses on disposals are determined by comparing proceeds
with the carrying amount, and any gain or loss is included in the
statement of profit or loss. When revalued assets are sold, the
amounts included in the revaluation reserve in respect of those assets
are transferred to retained earnings.
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The amortisation period of software is four to five years.
Remeasurement
NZ IAS 38: Intangible assets (NZ IAS 38) states that fair value shall be measured by reference to an active market. Although there is an active
register for water share trading, being the Victorian Water Register, it has been determined by the Australian Securities and Investments
Commission (ASIC), with reference to AASB 138 (the Australian equivalent standard to NZ IAS 38), that because the shares are not sufficiently
homogenous in nature, the majority of sales are negotiated off-market, and the quantity of sales transactions are relatively infrequent therefore an
active market does not exist for water shares. The Group have recognised this determination and in response have remeasured the value of water
shares to historical cost as at 1 January 2023.
The impact of this change is to reduce the water share revaluation reserve to nil as at 1 January 2023. A gain on sale of $1.5m relating to the water
share sale settled in February 2023, was reclassified to the statement of profit and loss.
This change is not considered material for prior period restatement in financial statements.
Water shares are an integral part of land and irrigation infrastructure required to grow pears, kiwifruit and other annual crops in Australia and are
carried at historical cost. Such rights have an indefinite life and are not amortised but are tested annually for impairment. If events or changes in
circumstances indicate impairment, the carrying value is adjusted to take account of any impairment losses.
The Group’s portfolio of water rights is currently recorded at a historical cost value of $3.0m (Dec 2022 - $3.0m). A market value assessment was
performed at the end of the financial year. This was completed by accessing the Victorian Water Register and determining the weighted average
sales price for the applicable class of water rights. This value is then applied on a like for like basis to the Group’s water portfolio. As water prices
fluctuate due to seasonal factors, current market rates have been valued internally for impairment testing purposes at $5.9m (Dec 2022 - $5.4m).
Impairment tests for goodwill
At 31 December 2023, the Group's market capitalisation was $107.07m compared to net assets of $259.95m. As a result, an impairment test
was performed on all cash generating units (CGUs), in addition to CGUs with goodwill balances to ensure that future cash flows of the CGUs and
Group support the fair value of the assets.
Goodwill represents the 2022 acquisition of NZ Fruits, the 2021 acquisitions of Ōpōtiki Packing and Cool Storage Limited (OPAC) and
Orangewood Limited, the 2019 acquisition of Aongatete Coolstores Limited, and the 2018 acquisition of the Northland business.
The recoverable amount is based on the net present value of the five-year after-tax cash flow projection (value-in-use), with a terminal value
beyond five years. Cash flows beyond the five-year period are extrapolated using estimated growth rates and discount rates stated in this note.
The assumptions used for the analysis of the net present value of forecast gross margin for the cash generating unit is determined based on past
performance and the Board's expectations of future market dynamics, plus the Group's five-year financial plans.
The impact of a frost event in spring 2022, cyclones in January and February 2023, and a hail event in May 2023, along with a lower yield as a
result of variable bud break have reduced the volume harvested in 2023. Leading in to harvest 2024, there have been favourable weather patterns
across key growing periods with no significant adverse weather events impacting the harvest to date. This, and a favourable outlook for the Group
and the industry, have been incorporated into the impairment tests. The Group is operating in an inflationary environment, with rising interest rate
impacting discount rates across all CGUs and being incorporated in the impairment tests.
Any financial impact of climate change is expected to fall outside of the planning period given the long-term nature of climate change. However,
scenario planning is being carried out across the Company to prepare for the impact of climate change on future yields, varieties, and growing
methods. Seeka has a long history of adapting to the environment, such as when Psa arrived in New Zealand and the business pivoted to
the SunGold variety, alongside past climatic events such as droughts, hail, and floods. The business will continue to adapt to the changing
environment.
No impairment was noted in a CGU as a result of the impairments tests, either on the CGUs with or without goodwill allocated to them.
The annual impairment tests of goodwill were performed at 30 November 2023. Impairment indicators were considered at 31 December 2023,
however no indicators were identified that required any further impairment tests.
Additions to goodwill
There were no additions to goodwill in 2023.
In the year ended December 2022, $3.54m of goodwill was recognised as a result of the NZ Fruits acquisition and a further $0.15m from updates
to the goodwill acquired in the 2021 Orangewood acquisition. See note 19 for details of the business combination.
Post-harvest CGU
All goodwill at 31 December 2023 is included in the post-harvest CGU. The single post-harvest CGU reflects the operationally coordinated and
financially interdependent nature of post-harvest operations across the regions serviced by Seeka. To best handle fruit at optimum maturity, and
maximise post-harvest efficiency and flexibility, the regions are managed as one unit with mature fruit allocated to the next available facility. This
means fruit flows and the associated cash flows are intrinsically linked across all regions. Due to this, a single CGU best reflects the nature of the
post-harvest business.
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45SEEKA LIMITED | ANNUAL REPORT 2023
The following table details the key assumptions used for value-in-use calculations and the recoverable amount.
Group cash generating unitsOperating segment
Goodwill
carrying
amount
pre impairment
$000s
Goodwill
carrying
amount
post impairment
$000s
Pre tax
discount rate
1
EBITDA
4

growth rate
1-5 years
Terminal
growth rate
2
2023
Post-harvest Post-harvest operations
20,181 20,181 9.6%0% - 10%
3
2.0%
2022
Post-harvest Post-harvest operations
20,181 20,181 12.5%2% - 36%2.0%
SeekaFresh Retail services operations
437 - 14.4%40% - 203%2.0%
Kiwi Crush™ Retail services operations
244 - 14.4%
0% - 9% 2.0%
Accounting policies
Intangible assets
Assets with a finite useful life are subject to depreciation and
amortisation and reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
Intangible assets that have an indefinite life are not subject to amortisation
and are tested at least annually for impairment, with impairment losses
recognised when the carrying amount exceeds the recoverable amount.
When assessing impairment, assets are grouped at the lowest identifiable
unit able to generate cash flow.
Software
Acquired computer software licences are capitalised on the basis of
the costs incurred to acquire and bring to use the specific software.
Internally developed computer software is capitalised when it enters
the development phase and includes costs incurred to develop and
test the software for use. Intangible assets are amortised over their
estimated useful life (typically four to five years).
Goodwill
Goodwill represents the excess of the cost of an acquisition over the
fair value of the Group’s share of the net identifiable assets at the
date of acquisition. Goodwill on a business acquisition is included
in intangible assets, and on acquisition of an associate is included in
investments in associates. When acquired in business combinations,
the goodwill is annually tested for impairment (or more frequently if
there are impairment indicators) and carried at cost less accumulated
impairment losses. Gains and losses on the disposal of a business
include the carrying amount of goodwill relating to that business.
Water shares
The Group records permanent water shares at historical cost. Such
rights have an indefinite life and are not amortised but are tested
annually for impairment. If events or changes in circumstances
indicate impairment, the carrying value is adjusted to take account of
any impairment losses.
Other intangibles
Other intangibles subject to amortisation are amortised over the life
of the asset on a straight line basis. The expense is charged to the
statement of profit or loss.
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are
not subject to amortisation and are tested annually for impairment,
or more frequently if events or changes in circumstances indicate
that they might be impaired. Other assets are tested for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher
of an asset’s fair value less costs of disposal and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash inflows which are
largely independent of the cash inflows from other assets or groups
of assets (cash-generating units (CGUs)). Non-financial assets other
than goodwill that suffered an impairment are reviewed for possible
reversal of the impairment at the end of each reporting period.
Critical accounting estimates and judgements
The intangible assets impairment tests require judgement to determine the appropriate forecast cash flows and inputs into the calculations. The primary
estimates relate to the forecast EBITDA growth rates, discount rates and terminal growth rates.
1. The discount rate is calculated based on the specific circumstances of the cash generating unit and its operations, and is derived from its
weighted average cost of capital.
2. The long term growth rate is based on the long term expected inflation rate, being within the RBNZ inflationary target of 1%-3%. The Group has
set its terminal growth rates at 2% to ensure a long term conservative growth estimate has been applied in the impairment tests.
3. The EBITDA growth rate for the 2024 year assumes a return to average yields. The EBITDA growth rates in the long-term forecast sit between
0-10%, which is considered conservative for the kiwifruit industry.
4. EBITDA, a non-GAAP measure, is earnings before interest, tax, depreciation, amortisation, impairments and revaluations.
Goodwill balances are assessed annually for impairment.
Post-harvest CGU
The goodwill relating to the post-harvest CGU is supported by historical profitability, with a positive outlook and significant growth path ahead.
Despite challenging weather conditions in the 2023 harvest season, the post-harvest segment operated profitably throughout the year. The
forecast cash flows assume a return to average yields and a return to normal growing conditions.
The impairment and recoverable amount of the CGU were calculated using the value-in-use method.
No other reasonable changes to key assumptions would require an impairment of goodwill.
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Accounting policies
The Group's biological assets are the crops growing on bearer plants in the Group's leased and owned orchards. All crops have a maturity period of
less than one year and will be harvested within 12 months from the Group's balance date.
Biological assets are measured at fair value less costs to sell provided this can be measured reliably, otherwise they are measured at cost.
When insufficient biological transformation has occurred fair value is not able to be measured reliably. Biological assets at cost are not depreciated as
they are in the process of maturing.
Fair value is determined as the estimated net market return.
12. Biological assets - crop
Crops growing on bearer plants are classified as biological assets and measured at fair value.
Crop assets are kiwifruit, nashi pears, Packham pears, Corella pears, other crops growing on leased and owned orchards and yet to be harvested
at balance date.
The following table reconciles beginning balances to end balances for biological assets crop measured at fair value defined as level 3 in note 29.
New Zealand dollars
2023
$000s
2022
$000s
Carrying amount at beginning of period
18,408 18,443
Crop harvested during the period
Fair value movement from the beginning of the period to point of harvest
12,427 12,075
Fair value when harvested
( 30,835) ( 30,518)
Crop growing on bearer plants at end of period
Crop at cost
21,531 18,345
Crop at fair value
235 63
Carrying value at end of period
21,766 18,408
The following table reconciles fair value movement of biological assets - crop.
New Zealand dollars
2023
$000s
2022
$000s
Movement in carrying amount
3,310 ( 59)
Exchange differences
48 24
Net fair value movement in crop
3,358 ( 35)
The following table details the classification of biological assets - crop.
New Zealand dollars
2023
$000s
2022
$000s
Australia - all varieties
5,179 4,007
New Zealand - kiwifruit crop
16,134 13,597
New Zealand - avocado crop
453 804
Carrying value at end of period
21,766 18,408
Crop where fair value cannot be measured reliably
Kiwifruit, nashi, Packham and Corella pear crops are not considered to have achieved sufficient biological transformation at balance date therefore
fair value is not able to be measured reliably and, as such, these crops are measured initially at cost less impairment.
Crop valued at fair value
Where a crop has achieved sufficient biological transformation, it is measured at fair value less costs to sell using unobservable inputs in the fair
value assessment. These unobservable inputs include forecasted sales prices achieved once the crop is harvested and marketed for sale, if the
forecast price was to increase so would the fair value of the crop.
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47SEEKA LIMITED | ANNUAL REPORT 2023
13. Right-of-use lease assets and lease liabilities
The Group reports all leases on the balance sheet where it has the right to obtain substantially all of the economic benefits from the use of the asset
throughout the period of the lease, with the exception of low value leases or leases less than 12 months.
The following table details leases where the Group is a lessee.
New Zealand dollars
2023
$000s
2022
$000s
Right-of-use lease assets
Land and buildings
29,824 32,884
Orchard leases
16,117 17,310
Equipment
1,907 2,812
Motor vehicles
2,659 2,799
Total right-of-use lease assets
50,507 55,805
The movements for the year are as follows:
Right-of-use lease asset movements
Opening balance
55,805 49,885
Additions and renewals
6,220 16,269
Disposals, reclassifications and early terminations
( 984) ( 944)
Impairment of onerous lease
( 90)-
Exchange rate differences
18 111
Depreciation
( 10,462) ( 9,516)
Closing balance
50,507 55,805
The classification for depreciation of right-of-use lease assets is as follows:
Land and buildings
4,467 3,793
Orchard leases
1,771 1,386
Equipment
1,914 2,254
Motor vehicles
2,310 2,083
Total depreciation of right-of-use lease assets
10,462 9,516
New Zealand dollars
2023
$000s
2022
$000s
Lease liabilities
Current
9,941 9,631
Non-current
54,821 60,434
Total lease liabilities
64,762 70,065
The liabilities are classified as follows:
Lease liabilities
Land and buildings
35,045 37,614
Orchard leases
24,731 26,148
Equipment
2,139 3,274
Motor vehicles
2,847 3,029
Total lease liabilities
64,762 70,065
The movements for the year are as follows:
Lease liability movements
Opening Balance
70,065 63,367
Additions and renewals
6,289 16,796
Disposals, reclassifications and early terminations
( 829) ( 873)
Exchange rate differences
51 6
Principal lease payments
( 10,814) ( 9,231)
Closing balance
64,762 70,065
Additions
During the period ended 31 December 2023, the Group renewed $1.77m of leases relating to post-harvest coolstorage facilities, $0.55m of leases
relating to retail service facilities, and $2.31m of leases relating to vehicles and equipment leases.
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ANNUAL REPORT 2023 | SEEKA LIMITED48
Accounting policies
Lease liabilities are measured as the present value of the remaining lease payments, including any renewal periods that are likely to be exercised,
discounted using the Group’s incremental borrowing rate which ranges between 7.57% and 16.50%. The discount rate is based on the Group's
incremental borrowing rate, being the rate the Group would borrow the funds required to purchase the asset. When determining the discount rate,
Seeka considers that the value of the right-of-use lease asset should not be greater than the fair value of the underlying asset being leased.
The Group’s right-of-use lease asset is equal to the lease liability on the day of lease inception, with the exception of sale and leaseback
transactions where the asset is measured as the proportion of the carrying value of the asset sold of which the benefit is retained by the Group.
The right-of-use lease asset is depreciated on a straight line basis over the period of the lease. Costs incurred with a lease that are not part of the
cost of the right-of-use lease asset are expensed.
All leases have been classified into one of the following asset classes:
–Land and building - leases for rental of all properties, including packhouses and coolstores
–Orchard - leases held for the development of productive orchards
–Equipment - leases for equipment, including plant equipment and forklifts
–Motor vehicles - leases for motor vehicles
The Group leases various properties for the packing and cooling of kiwifruit, leases orchards to grow kiwifruit and avocados, and leases equipment
and vehicles. The terms of the leases vary, with land and building leases ranging from 10 - 15 years, with one 99 year lease. Orchard leases range
from 3 - 25 years, and equipment and vehicle leases range from 1 - 5 years.
Contracts may contain both lease and non-lease components. In the case of orchard leases, only the fixed rental is recognised as a lease liability.
Any variable consideration relating to profit share on the orchard leases is not accounted for as the profit share is only determined after a crop has
been harvested and is not identifiable at the commencement of the lease. Lease terms are negotiated on an individual basis and contain a range
of different terms and conditions. The lease agreements do not impose any covenants other than the security interest in the leased assets that are
held by the lessor. Leased assets may not be used as security for borrowing purposes.
The Group is exposed to potential future increases in land and building lease payments based on contractual market rent reviews that are not
included in the lease liability until the rent review takes place.
Lease payments are allocated between principal and lease interest. The lease interest is charged to the statement of profit and loss over the term
of the lease.
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Working capital
Accounting policies
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts.
Collectability of trade receivables is reviewed on an ongoing basis including debts past due, but not considered impaired. Debts which are known
to be uncollectible are written off. A provision for doubtful receivables is established based on the expected default rates over the balance of trade
receivables. See note 28 for calculation details.
15. Inventories
New Zealand dollars
2023
$000s
2022
$000s
Total packaging at cost
7,062 8,618
Other inventories at cost
3,578 3,282
Total inventories
10,640 11,900
In the current year, $28.95m (Dec 2022 - $37.52m) of packaging inventory costs were expensed to cost of sales in the statement of profit or loss.
This section focuses on how the Group manages inventories, accounts receivable and accounts payable to ensure an
appropriate level of working capital is available to operate the business, deliver benefits to stakeholders and generate revenues.
14. Trade and other receivables
New Zealand dollars
2023
$000s
2022
$000s
Current trade receivables (net of provision for doubtful debts)
22,298 20,109
Prepayments
5,593 3,203
Prepaid deposits
255 619
GST refund due
405-
Accrued income and other sundry receivables
4,053 9,216
Current trade and other receivables
32,604 33,147
Non current trade and other receivables
3,367 5,099
Total trade and other receivables
35,971 38,246
Within current trade receivables, $6.66m are past due (Dec 2022 - $4.79m), of which 10.36% are more than 90 days (Dec 2022 - 4.02%).
Prepaid deposits includes $0.25m for avocado trees and kiwifruit vines not yet received (Dec 2022 - $0.62m).
Accrued income and other sundry receivables includes income to be received from orcharding operations on 382 hectares of leased and owned
orchards (Dec 2022 - 419 hectares).
A $0.26m provision for doubtful debts is recognised in the accounts (Dec 2022 - $0.24m).
Non-current trade receivables includes $1.81m losses carried forward on Hayward short term leased orchards to be recovered in a future period
(Dec 2022 - $2.20m). Non current receivables also include $1.56m (Dec 2022 - $3.06m) of long term receivable balances with agreed long-
term payment terms. The remaining balance of non-current trade receivables relates to debtors secured against crop supply commitments with
repayment terms of up to five years and is considered recoverable.
Accounting policies
Raw materials, work in progress, finished goods and produce are stated at the lower of cost or net realisable value. Cost comprises direct
materials and direct labour, and are assigned to individual items of inventory on the basis of weighted average cost. Net realisable value is the
estimated selling price less estimated costs of completion and sales costs.
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ANNUAL REPORT 2023 | SEEKA LIMITED50
16. Trade and other payables
New Zealand dollars
2023
$000s
2022
$000s
Trade payables
6,050 6,329
Accrued expenses
11,948 17,940
Employee expenses
7,140 6,619
GST payable
- 1,853
Other payables
140 37
Total trade and other payables
25,278 32,778
Trade payables include $0.47m for capital works in progress (Dec 2022 - $0.18m) and accrued expenses includes $0.72m for capital purchases
(Dec 2022 - $2.00m).
Accrued expenses include costs to be incurred from orcharding operations on 382 hectares (Dec 2022 - 419 hectares) of leased and owned
orchards. Accrued expenses also include costs relating to the retail service segment and the export and domestic sales of avocado.
Accounting policies
Trade payables are recognised initially at fair value (the invoiced amount). If the Group has been provided with extended terms of trade, they are
then recognised at amortised cost using the effective interest method.
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Funding
This section focuses on how the Group manages its capital structure to protect shareholder value while funding operations that
deliver benefits to stakeholders and grow shareholder returns.
Disclosures are made on the Group’s bank facilities, retained earnings, dividends paid to shareholders, and earnings per share. Details on the
Company’s share capital include shares issued during acquisition through amalgamation, and under the dividend reinvestment plan, grower
incentive and employee share schemes.
17. Interest bearing liabilities
New Zealand dollars
2023
$000s
2022
$000s
Current secured
Interest bearing liabilities
49,597 23,110
Capitalised loan fees to be amortised in the next 12 months
( 306) ( 240)
Total current interest bearing liabilities
49,291 22,870
Non current secured
Interest bearing liabilities
128,322 128,151
Remaining capitalised loan fees to be amortised
( 30) ( 79)
Total non-current interest bearing liabilities
128,292 128,072
Total interest bearing liabilities
177,583 150,942
Analysis of movements in borrowings:
At 1 January
150,942 113,003
Cash flow - additional borrowings
157,919 114,753
Cash flow - repayment of borrowings
( 131,445) ( 81,391)
Loans acquired via acquisition
19
- 4,175
Capitalised loan fees - amortised over the life of the loan
( 17) 188
Exchange differences
184 214
At 31 December
177,583 150,942
Analysis of total facilities:
Drawn
177,583 151,261
Available
23,205 59,296
Total facilities at 31 December
200,788 210,557
The Board has assessed the fair value of the term loans as the outstanding balance at balance date.
On 30 June 2023, Seeka refinanced with a Sustainability-Linked Loan with its banking syndicate, which included extension of the facility maturity
dates and amendments to the banking covenants. Westpac NZ acted as the Sole Sustainability Coordinator, Agent and Mandated Lead Arranger,
and Bookrunner throughout the refinancing.
Seeka extended 66% of the facilities to 31 January 2025, and 34% to 31 January 2026, and obtained a waiver for the net leverage ratio and
interest cover ratio banking covenants for the 30 June 2023 and 31 December 2023 test periods. The 30 June 2024 and 31 December 2024
banking covenants are set on a “step down” basis to enable Seeka to reach its long-term covenants of 3.25x for the net leverage ratio and 2.00x
for the interest cover ratio. Seeka remains committed to reducing debt and building headroom into its banking covenants.
Seeka’s $201 million banking facility is provided as a Sustainability-Linked Loan that incentivises Seeka to reduce greenhouse gas emissions,
increase solar energy generation capacity, and improve health and safety across its workforce. Seeka will pay a lower interest rate for achieving
yearly sustainability targets, and a higher interest rate if it misses agreed yearly benchmarks.
After the balance date, an additional $20m credit line has been secured from 5 February 2024 through to 16 July 2024.
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Accounting policies
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost.
When it is probable that part or the entire loan will be drawn down, any loan facility establishment fee paid is recognised as a loan transaction cost.
When the loan will probably remain undrawn, any loan fee paid is capitalised as a pre-payment for liquidity services and amortised over the period of
the facility.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after
balance date.
18. Share capital
Shares20232022
Authorised and issued share capital
Ordinary shares - fully paid and no par value:
Opening balance
41,988,282 40,176,160
Shares issued under:
NZ Fruits Limited amalgamation
19
- 1,687,860
Dividend reinvestment programme
- 124,262
Total shares issued
41,988,282 41,988,282
Ordinary shares - classified as follows:
Held by ordinary shareholders
41,694,782 41,567,947
Held by Seeka Share Trustee Limited
293,500 420,335
Total shares issued
41,988,282 41,988,282
The following table details the amounts of the term loans drawn down at balance date and their maturities.
Balance due
$000sInterest rateMaturity
Term loans as at 31 December 2023
AUD $17m
18,322 7.43%31 January 2026
NZD $40m
40,000 8.40%31 January 2025
NZD $50m
50,000 8.64%31 January 2026
NZD $20m
20,000 8.42%31 January 2025
Term loans as at 31 December 2022
AUD $17m
18,151 5.04%31 January 2024
NZD $40m
40,000 5.50%31 January 2024
NZD $50m
50,000 5.70%31 January 2025
NZD $20m
20,000 6.96%31 January 2024
The Group’s policy is to protect the term portion of the loans from exposure to changing interest rates via the use of derivatives, see note 30.
Assets pledged as security
Bank loans and overdrafts are secured by first mortgages over the
freehold land and buildings, and a General Security Agreement over all
the assets of the following trading entities within the Group, as either
borrowers or guarantors. These entities make up the bank Charging
Group.
The value of the Group’s assets that are not part of the Charging
Group is $7.24m, being less than 1.32% of the total Group Assets.
The Charging Group comprises the following entities:
Borrowers and guarantors:
–Seeka Limited
–Seeka Australia (Pty) Limited
Guarantors:
–Aongatete Coolstores Limited
–Delicious Nutritious Food Company Limited
–Kiwi Coast Growers (Te Puke) Limited
–Northland Horticulture Limited
–OPAC Properties Limited
–Seeka East Limited
–Seeka OPAC Limited
–Seeka Te Puke Limited
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53SEEKA LIMITED | ANNUAL REPORT 2023
19. Business combination
Acquisition through amalgamation of New Zealand Fruits Limited (NZ Fruits)
In February 2022, the Group amalgamated NZ Fruits, a kiwifruit, citrus and persimmon post-harvest business based in Gisborne, East Coast, New
Zealand, into a newly-formed 100%-owned subsidiary of Seeka Limited, being Seeka East Limited. NZ Fruits shares were cancelled with each share
being exchanged for 7.5016 shares in Seeka and $39.3495 cash. Seeka shares were issued based on a price of $5.2455 per Seeka share (equal to
the VWAP of shares traded over 10 business days, finishing on 9 December 2021, with all fractions of Seeka shares rounded up to the next whole
number).
The purchase was settled on 2 February 2022 for a consideration of $17.53m by the issue of 1,687,860 ordinary shares in Seeka at a market price of
$5.14 on the settlement date of 2 February 2022, being the market price on the acquisition date as per NZ IFRS 3 (Business Combinations), and a
cash consideration of $8.85m. The change in the share price on acquisition date had the impact of decreasing goodwill by $0.18m.
There are no acquisition or integration related costs included in overhead expenses in the year ended 31 December 2023 (Dec 2022 - $0.46m).
Seeka has 12 months from the acquisition date to reassess the fair values of the assets and liabilities disclosed above if more information comes
to light that suggests the values differ. In particular, any liabilities are expected to be crystallised and quantified within the 12 months from the
acquisition date.
There have been no updates to the initial fair values as disclosed in December 2022.
Accounting policies
Ordinary shares are classified as equity.
Where any Group company purchases the Company's equity share capital (treasury shares), the consideration paid, including any directly
attributable incremental costs (net of income taxes), is deducted from equity attributable to the Company's equity holders until the shares are
cancelled or reissued. Where such shares are subsequently reissued, any consideration received, net of any directly attributable incremental
transaction costs and the related income tax effects, is included in equity attributable to the Company's equity holders.
New Zealand dollars
2023
$000s
2022
$000s
Movements in ordinary paid up share capital:
Opening balance of ordinary shares
164,512 154,642
Transfer from grower share entitlement reserve
- 112
Transfer from employee share entitlement reserve
- 461
Issues of ordinary shares during the year
- 9,297
Closing balance of ordinary share capital
164,512 164,512
Movements in treasury share capital:
Opening balance of ordinary shares
1,766 2,961
Employee share scheme receipts - 2016 issue
- ( 7)
Grower loyalty share scheme receipts - 2019 issue
- ( 401)
Employee share scheme receipts - 2019 issue
( 119) ( 787)
Closing balance of shares held as treasury capital
1,647 1,766
Net share capital
162,865 162,746
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of fully
paid shares held.
Grower loyalty share scheme
On 15 March 2019, the Group invited eligible growers of kiwifruit, avocado and Kiwiberry to participate in a three-year grower loyalty share scheme,
whereby each participant would be allocated a parcel of shares based on their orchard's current or forecast production. This issue of up to 2.6m
shares was approved by shareholders on 14 February 2019.
In April 2019, 2,061,803 shares were issued to the scheme's trustees on behalf of 405 participating growers. The issue price of $4.76 per share was
funded by the Group making a $9.8m non-interest-bearing loan to the trustees. Upon meeting the terms of the scheme by supplying all product from
the participating orchards for three consecutive seasons the shares vest and participating growers can elect to pay the outstanding balance of their
loans, less any dividend payments made on the shares, and have the shares transferred to them.
In 2021, 1,917,165 shares issued to kiwifruit growers vested. In 2022, the remaining 144,638 shares issued to avocado growers vested, see note 21.
Employee share scheme
On 15 March 2019, the Group invited eligible employees to participate in a three-year employee share scheme, whereby each participant would be
allocated a parcel of shares based on their role in the business. In April 2019, 568,000 shares were issued to the scheme's trustees on behalf of 319
participating employees. The issue price of $4.76 per share was funded by the Group making a $2.7m non-interest-bearing loan to the trustees. Upon
meeting the terms of the scheme by continuing employment for three consecutive years, participating employees can elect to pay the outstanding
balance of their loans, less any dividend payments made on the shares, and have the shares transferred to them. Shares issued under this scheme
vested in 2022, see note 21.
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20. Earnings and net tangible assets per share
20232022
Basic earnings per share
(Loss) / profit attributable to equity holders of the Company ($000s)
(14,466) 6,504
Weighted average number of ordinary shares in issue (000s)
41,988 41,292
Basic earnings per share
($0.34)$0.16
Diluted earnings per share
(Loss) / profit attributable to equity holders of the Company ($000s)
(14,466) 6,504
Weighted average number of ordinary shares in issue plus dilutive employee share scheme (000s)
41,988 41,301
Diluted earnings per share
($0.34)$0.16
Net tangible assets per share
Net tangible assets ($000s)
239,768 250,762
Total ordinary shares issued at the end of the period (000s)
41,988 41,988
Net tangible assets per share
$5.71 $5.97
Basic earnings per share
Basic earnings per share is calculated by dividing the (loss) / profit attributable to equity holders of the Company by the weighted average number
of ordinary shares outstanding during the period, adjusted for bonus elements in ordinary shares issued and outstanding during the period.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax
effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed
to have been issued for no consideration in relation to dilutive potential ordinary shares.
Net tangible asset per share
Net tangible asset per share is calculated by dividing the Group’s net assets less goodwill by the total shares on issue at the end of the period.
21. Retained earnings and reserves
Retained earnings
The following table details movements in retained earnings.
New Zealand dollars
2023
$000s
2022
$000s
At 1 January
52,760 51,564
Net (loss) / profit for the year
( 14,466) 6,504
Dividends paid or declared
- ( 5,308)
At 31 December
38,294 52,760
Reserves
The following table details the closing balances of reserve accounts.
New Zealand dollars
2023
$000s
2022
$000s
Reserves
Cash flow hedge reserve
900 2,476
Water share revaluation reserve
- 2,756
Land and buildings revaluation reserve
57,834 50,368
Foreign currency translation reserve
( 158) ( 161)
Foreign currency revaluation reserve
214 ( 2)
Total reserves
58,790 55,437
The cash flow hedge reserve records increases and decreases on the revaluation of derivative financial instruments.
The water share revaluation reserve records increases and decreases on the revaluation of Seeka's owned permanent water shares in Victoria
Australia. In the year ended 31 December 2023, the water shares were remeasured to be held at historical cost and therefore the revaluation
reserve was set to nil. See note 11 for details.
The land and buildings revaluation reserve records increments and decrements on the revaluation of land and buildings.
The foreign currency translation reserve records foreign currency translation differences of Group entity results and financial position. The amounts
are accumulated in other comprehensive income and recognised in profit or loss when the foreign operation is partially disposed of or sold.
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The foreign currency revaluation reserve records unrealised gains and losses on Group assets and liabilities held in foreign currencies.
The share entitlement reserve records the value of option benefits recognised on the Group's grower loyalty and employee share schemes as
detailed in this note.
The Group operates two equity-settled, share-based incentive plans:
–An equity-settled, share-based compensation plan for employees. Shares are periodically issued under this plan.
–An equity-settled, grower loyalty share scheme approved by shareholders on 14 February 2019.
The employee share scheme is managed by a trust deed established September 2014. The grower loyalty share scheme is managed by a trust
deed established 15 March 2019. The trustee for both trusts is 'Seeka Share Trustee Limited', whose directors are also directors of Seeka.
Employee share scheme
Under the employee share scheme, shares are issued to an employee share trust in return for a debt back to the Company. Qualifying employees
are eligible to subscribe to shares held by the trust under the terms of the scheme with the shares to vest at the end of three years. The option
benefit is recognised as a share-based payment expense and recorded as an expense over the vesting period. At the end of the vesting period the
employee has an option to settle any outstanding debt on their shares and have the shares transferred to them.
At the date the shares vest the employee can elect to extend the repayment period by two years with interest charged and the shares held by the
trust as security and only transferred when the debt is fully repaid. Alternatively at the date the shares vest the employee can elect that the shares
do not vest to them and any outstanding debt will be forgiven and the shares sold by the trustees. The proceeds from the sale of shares are used
to repay the debt owed to the Company.
The following table details movement in the share entitlement reserve relating to the employee share scheme.
New Zealand dollars
2023
$000s
2022
$000s
At 1 January
- 423
Transfer to share capital
-( 461)
Movement in employee share entitlement reserve
- 38
At 31 December
- -
At balance date the number of shares in respect of which options have been granted to employees and remain outstanding under the scheme was
42,000 (Dec 2022 - 369,998), representing 0.10% (Dec 2022 - 0.89%) of the shares of the Company on issue at that date.
Grower loyalty share scheme
Under the grower loyalty share schemes, shares were issued to a share trust in return for a debt owed back to the Company. Qualifying supplying
growers were eligible to subscribe to shares held by the trust under the terms of the offer agreements dated 15 March 2019 and 22 March 2019.
Shares vest after the grower supplies the Company their kiwifruit and avocado crops for the three harvest seasons, with the final harvest season
being the avocado harvest season ending 31 March 2022. The option benefit is recognised as a discount against revenue over the vesting period.
At the end of the vesting period the grower had an option to either settle any outstanding debt on the shares and have the shares transferred to
them, or to not have the shares transferred to them, whereby any outstanding debt was forgiven and the shares sold by the trustee. The proceeds
from the shares that vest or from the sale of shares was used to repay the debt owed to the Company.
In September 2021, the three-season supply commitment period for kiwifruit and Kiwiberry growers ended, and 1,917,165 shares vested.
In April 2022, the three-season supply commitment period for avocado growers ended, and 144,638 shares vested.
From the September 2021 vesting, 333,897 shares that were either ineligible for entitlement, or not accepted by growers, were sold on market for
a total net consideration of $1.41m.
The following table details the movement in the grower loyalty share scheme.
New Zealand dollars
2023
$000s
2022
$000s
At 1 January
- 103
Transfer to share capital
-( 112)
Movement in grower share entitlement reserve
- 9
At 31 December
- -
The scheme terminated April 2022 upon the end of the avocado grower commitment period, and at 31 December 2022 no options that were
granted to growers remain outstanding.
For both schemes the shares are issued fully paid in exchange for a loan to the share scheme trust on behalf of scheme members.
The shares held by the trustee on behalf of employees and growers carry the same voting rights as other issued ordinary shares with votes only
able to be made via the trustees. The trustees are not able to vote, other than at the direction of the individual member employees and growers.
While monies are owed on the shares they remain with the trustee.
The options element of the schemes are valued using the Black Scholes pricing model on the grant date, which is the date the shares are first
issued to the trust. Volatility is forecasted into the model.
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Accounting policies
The fair value of the employee services received in exchange for the grant of options is recognised as an expense in the statement of profit or loss with
a corresponding increase in the share entitlement reserve. For the Grower Loyalty Share Scheme (GLSS), the fair value of the grower loyalty received
in exchange for the grant of the option is recognised as a discount against other income in the statement of profit or loss with a corresponding
increase in share entitlement reserve. The fair value is determined by reference to the fair value of the options granted, calculated using the Black
Scholes pricing model, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets).
When the shares vest, the amount of the reserve relating to those shares is transferred to retained earnings.
Employee share scheme shares may be issued at the Board’s discretion at a price set by the Board based on the Volume Weighted Average Price
(VWAP) calculation of the Company's shares during the period prior to issue. The Employee Share Scheme (ESS) cannot be issued with further
shares if that issue would result in the ESS having an interest of more than 5% of the Company’s issued capital.
Shares are issued fully paid in exchange for a loan to the share scheme trust. Dividends paid on the shares are applied towards repaying the debt
between ESS and GLSS and the Group on behalf of the employee of the grower.
Proceeds received along with any employee contributions are credited to share capital when payment for the shares is received.
The ESS and GLSS have a non-beneficial interest in all the shares allocated to employees and growers. Annually the Group reviews the ESS
scheme and decides upon the allocation of further shares and the price at which those shares will be issued to the ESS. Trustees of ESS and GLSS
are appointed for an unspecified term and may be removed by the Company at any time.
Accounting policies
Provision is made for the amount of any dividend declared on or before the end of the period but not distributed at balance date.
22. Dividends
Dividends paid Per share$000s
2023
Total dividend 2023
--
2022
February 2022
$0.135,308
Total dividend 2022
$0.135,308
Dividends are imputed to the fullest extent allowable in the tax year. The total dividend paid includes the non-cash amounts for the dividend
reinvestment plan. No cash dividend payments were made during the year (Dec 2022 - $4.37m).
On 20 January 2022, the directors declared a fully-imputed dividend of $0.13 per share. The dividend was paid 23 February 2022 to those
shareholders on the register at 5pm on 28 January 2022. The dividend reinvestment plan applied with no discount to the strike price.
Seeka dividend policy
Seeka’s dividend policy is to declare and distribute dividends between 65% and 75% of Net Profit After Tax (NPAT) annually in conjunction with
the release of the half year and full year results subject to due consideration of the Board and approval of the banking syndicate.
In addition to this, following agreement by Seeka's Banking Syndicate to amend certain covenants, it is a requirement that dividends will only be paid
if the net leverage ratio banking covenant in the most recent Compliance Certificate does not exceed 3.75:1.00 and they shall be less than or equal to
75% of NPAT for the financial year.
The net leverage ratio is calculated as total net debt less the $46m working capital facility, to adjusted EBITDA.
Adjusted EBITDA is defined as pre IFRS 16 EBITDA, less non-cash gain and losses, extraordinaries, and equity accounted profit or loss.
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Accounting policies
The fair values of the listed securities are based on the securities' closing share price at balance date. Where pricing information is available,
unlisted securities are revalued at balance date. All other unlisted securities are currently held at cost less impairment as it reasonably represents
current fair value. Other financial assets designated at fair value through profit or loss are held at their discounted present value of expected
cash flows as it reasonably represents current fair value. The carrying amount of all financial assets has been reviewed at balance date and any
impairment is recognised through the statement of profit or loss.
Investments
This section focuses on how the Group invests in businesses to support Seeka’s core kiwifruit operations, realise synergies
along the produce supply chain and grow Seeka’s product base and geographical reach. The Board manages business
investments to strengthen the benefits delivered to stakeholders and grow shareholder returns.
Disclosures are made on the Group’s holdings in associates and subsidiaries, along with details on the Group’s holding of listed and unlisted
financial assets.
23. Investment in financial assets
New Zealand dollars
2023
$000s
2022
$000s
At 1 January
1,424 2,054
Sale of investment
- ( 253)
Transfer to intangible assets
11
- ( 377)
Movement in fair value of other financial assets

30 -
Share repurchase
( 193) -
At 31 December
1,261 1,424
Unlisted securities designated at fair value through profit or loss
Blackburn General Partner Limited
91 91
Ravensdown Fertiliser Co-operative Limited
261 261
Ballance Agri Nutrients Limited
82 82
OTK Orchards Limited
133 326
Other share holdings
41 41
Other financial assets designated at fair value through profit or loss
Ngati Pukenga
653 623
Total financial assets at fair value through profit or loss
1,261 1,424
Total investment in financial assets
1,261 1,424
All other financial assets measured at fair value are defined as level 3, see note 29.
24. Investment in associates and joint arrangements
a. Investment in associates
Name of entity
Country of
incorporationBusiness activity
Equity holding 31
December 2023
Equity holding 31
December 2022
Kiwifruit Supply Research LimitedNew ZealandNot trading
20%20%
TKL Logistics LimitedNew ZealandPort service
33%33%
Wai O Kaha Gold Landowners Limited PartnershipNew ZealandOrcharding
11%11%
Te Kaha Gold Investment PartnershipNew ZealandOrcharding
33%33%
Fruitometry LimitedNew ZealandAgritech
26%26%
Ngutupiri General Partner LimitedNew ZealandOrcharding
64%64%
TKG Orchard Services LimitedNew ZealandOrcharding
50%50%
Waihau Bay JV Limited PartnershipNew ZealandOrcharding
50%-
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ANNUAL REPORT 2023 | SEEKA LIMITED58
The following table details transactions relating to investments in associates.
New Zealand dollars
2023
$000s
2022
$000s
At 1 January
5,952 3,958
Purchase of investments
100 1,358
Share of profit or loss
282 654
Prior period adjustment
- 500
Impairment of associate
( 1,413) -
Capital distributions received
( 282) ( 518)
Balance at end of year
4,639 5,952
Investments are made in the following associates:
Fruitometry Limited
1,065 2,600
Wai O Kaha Gold Landowners Limited Partnership
1,000 1,000
Ngutupiri General Partner Limited
938 938
TKL Logistics Limited
874 764
TKG Orchard Services Limited
618 506
Te Kaha Gold Investment Partnership
44 144
Waihau Bay JV Limited Partnership
100 -
Total investment in associates
4,639 5,952
In September 2023, the Group invested $0.1m of a total committed investment of $1.1m towards a 50% shareholding in Waihau Bay JV Limited
Partnership, which is a Limited Partnership for a kiwifruit orchard joint investment venture between the Group and several Māori investment
trusts in Waihau Bay.
In December 2022, the Group invested $0.94m of a total committed investment of $1.4m towards a 64% shareholding in Ngutupiri General
Partner Limited, which is a management company for a kiwifruit orchard joint investment venture between the Group and several Māori
investment trusts in Te Kaha, Ōpōtiki. Seeka has influence over the entity but not control, as Seeka's rights are contractually limited, a 75% voting
threshold is required for special resolutions, and Seeka cannot directly impact its returns.
The Group owns a 33% share in TKL Logistics Limited, which is a logistics company that provides services for kiwifruit including transportation,
vessel planning, and ECPI. Historically this company did not build any equity value. However, from 2022 the Group has recognised the value of its
investment equivalent to its share of the TKL Logistics Limited's profits.
Impairment of associates
For the year ended 31 December 2023, an impairment of $1.41m (Dec 2022 – nil) was recognised in relation to Fruitometry Limited, which is
recorded as an investment in associate. Fruitometry is an agri-tech start-up business that was impacted by lower demand than forecast due to
two difficult growing seasons. A discounted cash flow model was used to value the investment and as a result an impairment was recognised. No
further impairment in investments in associates was identified.
The following table summarises the financial information of associates.
New Zealand dollars
Fruitometry
Limited
($000s)
Wai O
Kaha Gold
Landowners
Limited
Partnership
($000s)
Ngutupiri
General
Partner
Limited
($000s)
TKL Logistics
Limited
($000s)
TKG Orchard
Services
Limited
($000s)
Te Kaha Gold
Investment
Partnership
($000s)
Waihau Bay
JV Limited
Partnership
($000s)
Total
($000s)
Summarised statement of
financial position
Current assets
1,052 - - 2,758 825 62 - 4,697
Non current assets
200 11,508 3,118 183 670 253 840 16,772
Total assets
1,252 11,508 3,118 2,941 1,495 315 840 21,469
Current liabilities
88 - - 294 136 38 - 556
Non current Liabilities
386 - - - 26 - - 412
Total liabilities
474 - - 294 162 38 - 968
Net assets
778 11,508 3,118 2,647 1,333 277 840 20,501
Group share of ownership
26%11%64%33%50%33%50%
Summarised statement of
profit or loss
Revenue
612 - - 26,735 1,104 800 - 29,251
Profit
( 472) - - 331 224 546 - 629
Group reported share
of profit or loss
( 122) - - 110 112 182 - 282
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59SEEKA LIMITED | ANNUAL REPORT 2023
Accounting policies
Investment in joint arrangements are classified as either joint operations or joint ventures. The classification depends on the contractual rights and
obligations of each investor, rather than the legal structure of the joint arrangement.
Joint operations
The Group recognises its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of any jointly held or incurred
assets, liabilities, revenues and expenses. These have been incorporated in the financial statements under the appropriate headings.
Joint ventures
Interests in joint ventures are accounted for using the equity method, after initially being recognised at cost in the statement of financial position.
b. Investment in joint arrangements
Name of entity
Country of
incorporationBusiness activity
Equity holding 31
December 2023
Equity holding 31
December 2022
Apanui Road Orchards Joint VentureNew ZealandOrcharding
42.9%42.9%
The Apanui Road Joint Venture is considered a joint operation based on the following:
–There is equal voting rights and influence;
–There is no investment vehicle that separates the entities from the parties to the arrangement; and,
–The legal form and contractual arrangements through which the investee operates give the parties rights to the individual assets and liabilities
of the investee (rather than the net assets as a whole).
The orchards of Apanui Road Orchards Joint Venture have a finite life, are carried at their fair value and are included in the consolidated financial
statements.
Accounting policies
Associates are entities over which the Group has significant influence, but not control, typically by holding between 20% to 50% of the voting rights in
the entity or exercising significant influence via directors on the Board.
Investments in associates are accounted for using the equity method after initially being recognised at cost and tested annually for impairment.
The Group's share of associates profits or losses are recognised in the statement of profit or loss and the carrying amount of the investment in the
statement of financial position.
Dividends or distributions received from associates are applied to reduce the carrying amount of the investment in the statement of financial position.
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ANNUAL REPORT 2023 | SEEKA LIMITED60
Other notes
This section contains all other note disclosures about the Group.
25. Contingencies
Seeka Limited has an active insurance claim under its Bailees Policy for the associated losses in kiwifruit orchard returns from fruit packed at the
OPAC site in 2022. The claim is being processed by the insurance company.
Any potential settlement will be paid to growers through Seeka Growers Limited. The amount and timing of the settlement at this stage is unknown.
26. Commitments
Capital commitment
At 31 December 2023, the Group was committed to incur capital expenditure of $4.06m (Dec 2022 - $8.00m) and a further $1.41m (Dec 2022 -
$0.46m) for investments in associates. The capital expenditure includes planned expenditure on builds, machinery and automation projects.
Operating lease commitments
The Group recognises right-of-use lease assets for all operating leases, except for short-term and low value leases, in accordance with NZ IFRS 16,
see note 13.
27. Related party transactions
Investment in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries.
Name of entity
Country of
incorporationClass of shares
Equity holding 31
December 2023
Equity holding 31
December 2022
Trading subsidiaries
Aongatete Coolstores LimitedNew ZealandOrdinary
100%100%
AvoFresh LimitedNew ZealandOrdinary
100%100%
Delicious Nutritious Food Company LimitedNew ZealandOrdinary
100%100%
Integrated Fruit Supply & Logistics LimitedNew ZealandOrdinary
100%100%
Kiwi Coast Growers (Te Puke) LimitedNew ZealandOrdinary
100%100%
Northland Horticulture LimitedNew ZealandOrdinary
100%100%
OPAC Growers Supply Limited
1
New ZealandOrdinary
100%100%
OPAC Properties LimitedNew ZealandOrdinary
100%100%
Seeka East LimitedNew ZealandOrdinary
100%100%
Seeka OPAC LimitedNew ZealandOrdinary
100%100%
Seeka Share Trustee LimitedNew ZealandOrdinary
100%100%
Seeka Te Puke LimitedNew ZealandOrdinary
100%100%
Little Haven Holdings Pty LimitedAustraliaOrdinary
100%100%
Seeka Australia (Pty) LimitedAustraliaOrdinary
100%100%
Seeka Risk Management LimitedCook IslandsOrdinary
100%0%
Not-trading subsidiaries
CMS Logistics Limited
2
New ZealandOrdinary
69%69%
Eleos LimitedNew ZealandOrdinary
100%100%
Enviro Gro LimitedNew ZealandOrdinary
100%100%
Glassfields (NZ) LimitedNew ZealandOrdinary
100%100%
Guaranteed Sweet New Zealand LimitedNew ZealandOrdinary
100%100%
Kiwifruit Vine Protection Company LimitedNew ZealandOrdinary
100%100%
Nutritious Delicious Food Company LimitedNew ZealandOrdinary
100%100%
Seeka Fresh LimitedNew ZealandOrdinary
100%100%
Seeka Kiwifruit Industries LimitedNew ZealandOrdinary
100%100%
Verified Lab Services LimitedNew ZealandOrdinary
100%100%
Seeka Pollen Australia (Pty) LimitedAustraliaOrdinary
100%100%
1. Liquidated and removed from the Companies Register on 12 January 2024.
2. In liquidation (solvent) as at 31 January 2024, and under notice to be removed from the Companies Register.
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61SEEKA LIMITED | ANNUAL REPORT 2023
Directors
Directors during the period were: F Hutchings, M Brick (retired 20 April 2023), H Cartwright (appointed 1 February 2023), S Cresswell (appointed
1 October 2023), P R Cross, R Farron (resigned 4 August 2023), S Moss, C Tarrant and A Waugh.
Key management and compensation
Key management personnel are all Company directors or executives with the greatest authority for the Group’s strategic direction and management.
The following table details key management personnel compensation.
New Zealand dollars
2023
$000s
2022
$000s
Director fees
605 624
Executive salaries
2,384 2,906
Short term benefits
197 21
Total
3,186 3,551
During the year the Group provided compensation totalling $0.10m (Dec 2022 - $0.21m) to close family members of key management personnel.
All transactions were related to employee remuneration and made on normal employment contract terms and conditions.
Transactions
The following table details the transactions entered with related parties for post-harvest and orchard management services (excluding
transactions outlined and disclosed above).
New Zealand dollars
2023
$000s
2022
$000s
Purchase of services
Directors, key management and other personnel
6 31
Seeka Growers Limited and OPAC Growers Limited
The Group undertakes transactions with Seeka Growers Limited (SGL), a related party which administers all kiwifruit revenues received for the
New Zealand business on behalf of supplying growers, and Avofresh Limited, a related party which administers all avocado revenues for the New
Zealand business on behalf of supplying growers.
In the current period the Group received $148.01m (Dec 2022 - $189.58m) for the provision of services to SGL and $2.05m (Dec 2022 - $2.51m)
for the provision of services to Avofresh Limited.
In 2023, the Group did not receive anything for the provision of services to OGL relating to kiwifruit harvested in 2022 (Dec 2022 - $0.88m).
Investments in associates
The Group undertakes transactions with its associates as described in note 24, in the regular course of business and with normal commercial
terms and conditions. In the current period the Group received $6.80m (Dec 2022 - $6.76m) from these transactions with associates, for the sale
of goods and services, with $2.69m (Dec 2022 - $0.68m) outstanding and owed to the Group at balance date.
In the current period the Group paid $1.38m (Dec 2022 - $0.10m) to associates for the purchase or provision of goods and services, with $0.21m
(Dec 2022 - $0.03m) outstanding and due to them at balance date.
Entities controlled or jointly controlled by key management personnel
The Group undertakes transactions with entities where its key management personnel are deemed to either control or have joint control over
their operations. In the current period the Group paid $2.04m (Dec 2022 - $4.93m) to these entities, for the purchase or provision of goods and
services, with no outstanding balance due to them at balance date (Dec 2022 - Nil). In the current period the Group received $1.48m (Dec 2022
- Nil) from these entities, for the sale or provision of goods and services, with $0.41m (Dec 2022 - $0.13m) outstanding and due to Seeka Limited
at balance date.
Terms and conditions
All related party transactions were made on normal commercial terms and conditions and at market rates. Outstanding balances are unsecured
and are repayable in cash.
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ANNUAL REPORT 2023 | SEEKA LIMITED62
28. Risk management
The Group’s activities expose it to a variety of risks specific to producing
and selling horticultural crops, along with corporate financial risks related
to credit, liquidity and capital risk. The Group operates a comprehensive
risk assessment and mitigation programme through its Audit and Risk
Committee.
The Group's policy is to ensure that the Group creates value and
maximises returns to its shareholders and benefits for other stakeholders,
as well as ensuring that adequate financial resources are available for the
development of the Group’s business whilst managing its financial risks.
a. Risk management strategies related to orcharding,
post-harvest and retail operations
Horticultural operations expose the Group to risks to production and
market returns. The main short-term production risks are weather
events, diseases, and pests. These impact on volume and quality of
produce from the Group's orchards, volumes to post-harvest (both
from Group orchard operations and independent growers) and
volumes available to the retail business.
Market risks include price and exchange rate impact on orchard
operations (the amount the Group is paid for crops grown by the
Group) and impact on retail revenues where the Group imports and
sells produce, mainly bananas. The exchange rate risk on imports is
managed through the use of foreign exchange contracts to match
known and planned purchases. Market risks do not directly impact on
post-harvest operations, as charges are normally set prior to harvest
and deducted before sales revenues are paid to supplying growers.
The Group operates in five regions spread over two countries; New
Zealand's Northland, Coromandel, Gisborne and the Bay of Plenty
regions, and in Australia's Mundoona region of Victoria. Main produce
lines are kiwifruit, nashi pears, European pears, avocado and Kiwiberry,
with small production of other temperate-climate fruits. Group retail
activities are in New Zealand (including imported tropical produce),
Australia, Asia, Europe and the USA. The Group's geographical,
product and market spread limits the impact on Group operations from
an adverse event occurring in a specific region, produce or market. To
further mitigate risks, the Board uses the following strategies.
Production risks - weather events, disease and pests
The Group follows industry best practice to mitigate production risks.
This includes orchard management practices to optimise production from
Group orchards, and extensive planning to ensure post-harvest and retail
services are suitably resourced to manage each season's crop volumes.
In New Zealand the major climatic risks are hail, frost, storm damage and
drought.
–Hail events are typically highly localised, and for kiwifruit the Group has
access to industry hail insurance for its orchard operations, plus top-up
payments from a Seeka Growers Limited hail insurance programme.
–Frost events are typically regional, and the Group advocates best-
practice crop protection, including active frost management on kiwifruit
orchards operated by the Group and other growers supplying the
Group's post-harvest operations.
–Storm events are typically regional, and the Group advocates
best-practice crop protection, including shelter belts on all orchards
operated by the Group and other growers supplying the Group's post-
harvest operations.
–Drought events are typically regional, and the Group has invested
in irrigation in many of its orchards. The Group is also investing in
localised weather measurement on its orchards.
In Australia, the major climatic risks are drought, hail and fire. As the
owner or manager of all orchards supplying its Australian operations,
the Group actively manages climatic risks of its total production base.
The orchards are located on three sites in the Mundoona region.
–Drought events are typically regional, and to secure adequate
irrigation, the Group has purchased long-term water shares from a
reliable irrigation programme.
–Hail events are typically localised, and the Australian orchards are
geographically spread to reduce risk of total loss.
–Fire risk is typically from serious grass wild-fire occurring during
periods of extreme weather, with the Country Fire Authority
responsible for risk assessment and management of fire events.
The Group takes all practical steps to internally manage fire risk
including removing excess vegetation from Group properties.
All horticultural undertakings are susceptible to disease and pest
incursions. The kiwifruit vine disease Pseudomonas syringae
pv. actinidiae (Psa) is widespread throughout New Zealand and
Australia, and is being actively managed. Seeka has moved to contain
the outbreak and works to proactively monitor the orchards. The
Queensland fruit fly and brown marmorated stink bug are potential
threats to the horticulture industry. To minimise the risk of crop loss
the Group monitors its orchards and undertakes recognised spray
programmes to protect crops to the fullest extent possible. Seeka also
relies on the Ministry for Primary Industries to protect New Zealand's
borders from introduced diseases.
Climate change
As a horticultural based business, Seeka is exposed to the long-term
impact of climate change through potential reduced production crop
yields. In addition to responding to weather events, future regulatory
change may impact Seeka through revised policies that limit the use
of chemical inputs on orchards, require soil monitoring and reporting,
introduce carbon taxes, and implement water restrictions.
To respond to this Seeka;
–Has a Board Sustainability Committee to assist in governance;
–Is measuring its carbon footprint, has set reduction targets, and
implemented carbon-reduction initiatives;
–Is actively engaged in developing orchard management practices to
measure the environmental impact on orchards; and
–Ensures new developments undertaken by Seeka include water
accessibility as part of the development design, whether via stream
access, onsite storage, or developing wetlands.
Market returns
New Zealand kiwifruit
The Group has no direct market risk from the sale of kiwifruit
harvested from lease operations, as all export marketing activities
beyond Australia are undertaken by Zespri Group Limited (Zespri)
under statutory regulations. The Group, however, is impacted by the
level of Zespri's market returns which impact on the Group's orchard
profitability. The Group monitors Zespri returns and uses modelling
techniques to analyse current and projected orchard income. This
information is used when setting Group budgets and orchard lease
terms.
New Zealand avocado and Kiwiberry
The Group has a direct market risk from the sale of avocado and
Kiwiberry, with half of Kiwiberry sales and all avocado sales managed
by the Group's retail operations. The Group forecasts seasonal supply,
monitors market conditions, develops a sales programme around
the needs of key retailers and controls product quality and supply to
optimise market access and returns. This information is used when
setting Group budgets and orchard lease terms.
The Group has no direct currency risk from export sales as it does not
own the products but acts as the growers’ agent.
Imported tropical produce
The Group has direct market, price and currency risk from imported
fruit produce (banana, pineapple and papaya) where the Group
imports fruit produce for sale as the principal through its supply
and sale contracts. The Group may hedge up to the total known and
projected cash flows to manage exchange risk. The Group has no
material direct price and currency risk from imported fruit produce
where the supply agreement enables the Group to amend its purchase
price according to trading conditions.
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