Notice of AGM 2006 - ShareClarity

25 October 2006 ASX Company Announcements Office

Notice of AGM The Company is pleased to notify the market that our Annual General Meeting is to be held on Tuesday 28 November 2006. Attached is the Notice of AGM together with the Explanatory Notes and our 2006 Annual Report as issued to shareholders. Bruce De Lacy Company Secretary

Farm Pride Foods LtdACN 080 590 030 ABN 42 080 590 030 55 Chandler Road Keysborough, Victoria Australia 3173 Telephone: +613 9798 7077 Facsimile: +613 9798 6163 www.farmpride.com.au

1

FARM PRIDE FOODS LIMITED ABN 42 080 590 030

NOTICE OF ANNUAL GENERAL MEETING

AND

EXPLANATORY MEMORANDUM

AND

PROXY FORM

Date of Meeting: Tuesday, 28 November 2006

Time of Meeting: 2.30pm (EST)

Place of Meeting: Rendevouz Hotel, 328 Flinders Street, Melbourne, Victoria

This Notice of Annual General Meeting and accompanying Explanatory Memorandum and Proxy Form should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that an Annual General Meeting of the Shareholders of Farm Pride Foods Limited will be held at the Rendevouz Hotel, 328 Flinders Street, Melbourne, Victoria on Tuesday 28 November 2006 at 2.30pm (EST) for the purpose of transacting the business referred to on the reverse of this Notice of Annual General Meeting.

2

AGENDA

1. Chairman’s Address – Mr James Dudfield

2. Directors’ report and financial statements

To receive the consolidated financial statements of the Company and its subsidiaries for the year ended 30 June 2006 together with the Directors' declaration and report in relation to that financial year and the auditors' report on those financial statements.

3. Resolution 1 – Re-election of Mr Bruce De Lacy as a Director

To consider and, if thought fit, to pass, the following resolution as an ordinary resolution:

“That Mr. Bruce De Lacy, who retires by rotation in accordance with Article 12.4.1 of the Company’s Constitution and, being eligible for re-election, be re-elected as a Director.”

4. Resolution 2 - Directors' Remuneration

To consider and, if thought fit, to pass, the following resolution as an advisory resolution:

"The Directors' Remuneration Report for the year ended 30 June 2006 be approved."

BY ORDER OF THE BOARD FARM PRIDE FOODS LIMITED

Bruce De Lacy Company Secretary 18 October 2006

FRM_WIP_155433/000001/000003/i

*M000001Q03*

FRM_WIP_163123/000001/000001/i

*S000001Q01*

All correspondence to:Computershare Investor Services Pty Limited

GPO Box 242 MelbourneVictoria 3001 Australia

1300 850 50561 3 9415 400061 3 9473 2555

www.computershare.com

Enquiries (within Australia)(outside Australia)

Facsimile

000001000FRM

1301011221012102012221332120133322113MR JOHN SMITH 1FLAT 123123 SAMPLE STREETTHE SAMPLE HILLSAMPLE ESTATESAMPLEVILLE VIC 3030

Securityholder Reference Number (SRN)

*I1234567890*

I 1234567890 I ND

* If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted incomputing the required majority on a poll.

The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business.

In addition to signing the Proxy form in the above box(es) please provide the information below in case we need to contact you.

I/We being a member/s of Farm Pride Foods Limited and entitled to attend and vote hereby appoint

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote inaccordance with the following directions (or if no directions have been given, as the proxy sees fit) at the Annual General Meeting of Farm Pride Foods Limited to be held at the Rendevouz Hotel, 328 FlindersStreet, Melbourne , Victoria on Tuesday, 28 November 2006 at 2.30pm and at any adjournment of that meeting.

For Against Abstain*

Res 1

Res 2

Re-election of Mr Bruce De Lacy as a Director

Directors' Remuneration

1 3 P RF R M

How to complete the Proxy Form

1 Your AddressThis is your address as it appears on the company’s share register. If this information is incorrect, please mark the box and make the correction on theform. Securityholders sponsored by a broker (in which case your reference number overleaf will commence with an ‘x’) should advise your broker of anychanges. Please note, you cannot change ownership of your securities using this form.

2 Appointment of a ProxyIf you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If the individual or body corporate you wish to appoint as your proxy issomeone other than the Chairman of the Meeting please write the full name of that individual or body corporate in the space provided. If you leave thissection blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a securityholder ofthe company. Do not write the name of the issuer company or the registered securityholder in the space.

3 Votes on Items of BusinessYou may direct your proxy how to vote by placing a mark in one of the three boxes opposite each item of business. All your securities will be voted inaccordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number ofsecurities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or shechooses. If you mark more than one box on an item your vote on that item will be invalid.

4 Appointment of a Second ProxyYou are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Formmay be obtained by telephoning the company's share registry or you may copy this form.

To appoint a second proxy you must:(a) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of securities applicable to that

form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half yourvotes. Fractions of votes will be disregarded.

(b) return both forms together in the same envelope.

5 Signing InstructionsYou must sign this form as follows in the spaces provided:

Individual: where the holding is in one name, the holder must sign.

Joint Holding: where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: to sign under Power of Attorney, you must have already lodged this document with the registry. If you have notpreviously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this formwhen you return it.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by thatperson. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, aSole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Directoror a Company Secretary. Please indicate the office held by signing in the appropriate place.

If a representative of a corporate Securityholder or proxy is to attend the meeting the appropriate "Certificate of Appointment of CorporateRepresentative" should be produced prior to admission. A form of the certificate may be obtained from the company's share registry or atwww.computershare.com.

Lodgement of a ProxyThis Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below no later than 48 hours before thecommencement of the meeting at 2.30pm on Tuesday, 28 November 2006. Any Proxy Form received after that time will not be valid for the scheduledmeeting.

Documents may be lodged:IN PERSON

BY MAIL

BY FAX

Registered Office - 551 Chandler Road, Keysborough VIC 3173Share Registry - Computershare Investor Services Pty Limited, Yarra Falls, 452 Johnston Street, Abbotsford VIC 3067Registered Office - PO Box 141, Noble Park VIC 3174Share Registry - Computershare Investor Services Pty Limited, GPO Box 242, Melbourne VIC 3001Registered Office - 61 3 9798 6163Share Registry - 61 3 9473 2555

Farm Pride Foods Ltd Annual Report

2006

Farm Pride Foods Ltd and Controlled Entities (ABN 42 080 590 030)

Annual Financial Report For the year ended 30 June 2006

Corporate InformationABN 42 080 590 030

Directors James Dudfield (Non-Ex ecutive Chairman) Zelko Lendich (Chi ef Executive Officer) Bruce De Lacy (Chief Operating Officer) Mark Moncrieff (Non-Executive) Jason Ters (Non-Executive, Resigned 21 September 2006)

Company Secretary Bruce De Lacy

Registered Office 551 Chandler Road Keysborough, Victoria 3173 (03) 9798 7077

Solicitors Clayton Utz Lawyers QV1, 250 St . Georges Terrace Perth, Western Australia 6000

Bankers Westpac Level 7, 360 Collins Street Melbourne, Victoria 3000

Shared Register Computershare Registry Services Pty. Ltd. Yarra Falls, 452 Johnston Street Abbotsford, Victoria 3067

Auditors Pitcher Partners Level 19, 1 5 W illiam Street Melbourne, Victoria 3000

Internet Address www.farmpride.com.au

page �Farm Pride Foods Ltd Annual Report 2006

TABLE OF CONTENTS

Page

Chairman's and CEO’s Report…………………… 2

Directors' Report………………………………………………………... 4

Auditor's Independence Declaration………………………………..… 12

Financial Report for the year ended 30 June 2006

Consolidated Income Statement…………………………….. 18

Consolidated Balance Sheet…………………………………. 19

Consolidated Statement of Changes in Equity…………….. 20

Consolidated Statement of Cash Flows……………….……. 21

Notes to the Financial Statements………………………...… 22

Directors' Declaration……………………………………..……………. 53

Independent Audit Report…………………………………...…………. 54

Chairman’s and CEO’s Report

page 2 Farm Pride Foods Ltd Annual Report 2006



Chairman’s Report to Shareholders

As the Company flagged in its six monthly report, the 2006 financial year has been dominated by what we believe to have been the largest egg oversupply on the Australian East Coast since market deregulation.

This oversupply situation persisted for the majority of the fiscal year which was contrary to industry expectations. The resultant price and margin pressure was exacerbated by the Company’s exposure to longer term supermarket contracts. The last of these contracts will be re-negotiated at the end of the first quarter of this financial year. This will provide the Company with a more realistic price structure over the next 12 months.

Other factors contributing to the negative result included:

o A major packaging supplier leaving the industry which led to price increases and supply issues;

o Cost increases in freight, labour and other key inputs;

o High costs associated with the movement of large quantities of egg across the country in response to the over supply of egg; and

o The need to manipulate flock programs to ease egg production and its associated costs.

The Company has also taken a write down of the carrying value of goodwill associated with the ACM Eggs acquisition of $4.0 million, driven by the impairment criteria as laid down in the AIFRS accounting standards. This impairment of goodwill is a non-cash adjustment.

Results and Initiatives

The Company’s results reflect a difficult year with an overall pre-tax loss of $7.454m of which $3.454m was from operations and $4.0m from the write down of goodwill associated with the ACM Eggs purchase. This compares with last years positive result of $1.213m.

The Company’s total revenue increased from $48.3 million to $77.7 million largely reflecting the acquisition of both the ACM Eggs and G.O. Drew businesses during the year.

The negative result was reflective of broader industry conditions. However it does mask a number of key initiatives implemented during this period. These initiatives are expected to assist the Company going forward, and include:

o Increased free range egg ranging in branded and private label categories in major supermarket chains;

o Increases in low cost long term cage and free range egg supply;

o Lower cost packaging;

o Launch of a new branded packaging featuring Susie O’Neill and full face cartons;

o Restructuring and efficiency gains in the Company’s product business;



o Rationalization of the Company’s geographic business mix in order to minimize freight movements and associated costs.

o A renegotiation of prices for longer term customer contracts being more reflective of increasing cost and tight supply conditions within the industry.

As previously disclosed the Company has lodged a warranty claim associated with the ACM Eggs acquisition. In the directors opinion the disclosure of any further information at this stage would be prejudicial to the interests of the Company.

Egg Business Market Outlook

The industry over the next twelve months is expected to experience a lower level of volatility than that experienced over the previous twelve months.

The Company has returned to profitability during the first two months of the new financial year. We look forward to providing a further update to shareholders at the Company’s Annual General Meeting in late November.

The anticipated industry rationalization is occurring as expected and the Company has in place a long term strategic plan to continue its investment in a range of egg laying facilities with an increasing emphasis on barn and free range systems.

The Company and the industry will continue to lobby the State and Federal Governments to ensure that a consistent and fair approach is applied to the legislation of the Poultry Welfare Code. This will assist in reducing the level of volatility in the industry and ensure that both the Company and industry generally can maximize the return on investment in new egg supply.

The Company would like to thank its customers, suppliers and employees for supporting the business over the last 12 months.

James Dudfield Zelko Lendich Chairman Chief Executive Officer

page � Farm Pride Foods Ltd Annual Report 2006

Directors’ Report

Information on Directors & Company Secretary

DIRECTORS

The names and details of the Company’s Directors in office during the financial year and until the date of this report are as follows: (Directors were in office for this entire period unless otherwise stated).

Names, qualifications and experience

James Dudfield (Director – Appointed 17 October 2003 and Chairman 1 September 2006)

James has over 20 years business experience and sits on the Farm Pride Foods Ltd. Board as an independent Director. He is currently an Executive in the finance industry and has experience in distribution, sales and marketing, product management and strategy across the financial services, energy and manufacturing industries. James has held senior positions at ING, ANZ Banking Group, Lend Lease, McKinsey & Co. and Esso Australia Ltd. James holds a Bachelor of Economics (Honours) and MBA from the University of Sydney.

Mark Moncrieff (Non-executive Chairman – appointed 19 July 2005 Resigned as Chairman 1 September 2006)

Mark has had over 40 years experience in the egg industry. He has been a Director of the NSW Egg Marketing Board, The NSW Egg Corporation, Chairman of the NSW Egg Producers Co-operative Ltd, and a Director of Novo Foods Ltd.

Mark has been a Director of Farm Pride since 19 July 2005 and was elected as non-Executive Chairman effective April 2006.

Mark along with family has operated a large egg production enterprise along with an egg grading, distribution and selling business over many years. Mark is a Certified Practicing Accountant with the status of Fellow and is a recipient of a Medal of the Order of Australia for services to the egg industry.

Zelko Lendich (Executive Director – appointed 6 May 2003)

Zelko is an independent management consultant. He is currently a Non-executive Director of the West Coast Eggs, NOVO Foods and The Aquaculture Development Council of WA and Chairman of the Western Australian Abalone Industry Ministerial Advisory Committee. He has wide ranging experience in commerce, government and education in Australia and Internationally. Zelko has held senior posts at the University of Western Australia’s Management Development Institute, Australia Leather Holdings, McKinsey & Co and ABB in Sweden, London and Canada. Whilst with the Australian Government, he was the principal advisor to the Minister for Transport and a key economic advisor to the Premier of Western Australia. Zelko has a Bachelor of Economics degree and an MBA from the University of Western Australia.

Director’s Report


Directors’ Report (continued)

Bruce De Lacy (Executive Director / Secretary – Appointed 1 August 2003)

Bruce has almost 30 years experience in the egg industry. He has previously been employed in a number of positions at Farm Pride Foods Ltd. including Company Secretary, Financial Controller, General Manager and more recently Chief Operating Officer. Bruce has a Bachelor of Business, is a CPA and a Fellow of Chartered Secretaries of Australia.

Jason Ters (Director – Appointed 14 September 2005 resigned 21 September 2006)

Jason has over 10 years experience in commerce and investment management. He is currently an Investment Manager with Guinness Peat Group (Australia). Jason holds a Bachelor of Business Degree and a Master of Applied Finance. He is an alternate Director of Australian Wealth Management Ltd and CPI Group Limited.

Director’s Report


Director’s Report


Relevant Interests in the Shares and Options of the Company

As at the date of this report, the interests of the Directors in the shares and options of Farm Pride Foods Ltd. were :

Ordinary SharesOptions over Ordinary Shares

Zelko Lendich 1,224,000 600,000

Bruce De Lacy 195,502 670,000

Mark Moncrieff 6,678,362 -

Earnings per share 2006 Cents 2005 Cents

Basic earnings per share (18.94) 7.01

Diluted earnings per share (18.94) 6.96

Dividends paid, recommended and declared

No dividends were paid, declared or recommended since the start of the financial year.


Director’s ReportD

irec

tors

’ Rep

ort

(co

nti

nu

ed)

Dir

ecto

rs’ R

emu

ner

atio

n R

epo

rt :

2006

To

tal

Sal

ary

&

Fee

sP

erfo

rman

ce

Bas

ed P

aym

ent

No

n-C

ash

B

enef

its

Su

per

Ret

irem

ent

Ben

efit

sO

pti

on

s%

Oth

er

ben

efit

sT

ota

lJa

mes

Dud

field

23,0

00-

-

2,07

0-

-

-

-

25

,070

Zel

ko L

endi

ch *

245,

501

-

-

3,

195

-

62

,766

20%

-

31

1,46

2

Mar

k M

oncr

ieff

21,6

72-

-

1,95

0-

-

-

-

23

,622

Bru

ce D

e La

cy *

*15

4,47

7 7

0,00

012

,931

26,9

36-

62,7

6619

%6,

632

333,

742

Jaso

n T

ers

18,2

08-

-

-

-

-

-

-

18

,208

Tot

al46

2,85

870

,000

12,9

3134

,151

-

12

5,53

26,

632

712,

104

2005

Zel

ko L

endi

ch95

,000

-

-

8,

550

-

61

,743

37%

-

16

5,29

3

Mar

k M

oncr

ieff

-

-

-

-

-

-

-

-

-

Bru

ce D

e La

cy13

7,33

570

,000

22,5

33-

61,7

4320

%10

,132

301,

743

Jam

es D

udfie

ld23

,000

-

-

2,

070

-

25

,070

Jaso

n T

ers

-

-

-

-

-

-

-

-

-

P

eter

Boz

zo

(res

igne

d 13

/05/

05)

20,3

46-

-

1,83

1-

-

-

-

22

,177

Tot

al27

5,68

170

,000

-

34

,984

-

12

3,48

610

,132

514,

283

Sh

are

bas

ed

pay

men

tsP

ost

em

plo

ymen

tS

ho

rt T

erm

* D

urin

g th

e 20

06 fi

nanc

ial y

ear

the

Com

pany

ent

ered

into

a c

onsu

ltanc

y ag

reem

ent w

ith a

com

pany

ass

ocia

ted

with

Mr.

Zel

ko L

end

ich.

Tha

t agr

eem

ent

repl

aced

exi

stin

g em

ploy

men

t arr

ange

men

t s b

etw

een

the

Com

pany

and

Mr.

Len

dich

. The

am

ount

sho

wn

abov

e of

$24

5,50

1 in

clud

es fi

xed

rem

uner

atio

n re

mitt

ed in

acc

orda

nce

with

that

agr

eem

ent t

oget

her

with

rem

uner

atio

n pa

id to

Mr.

Len

dich

as

a di

rect

or o

f the

Com

pany

.

** T

he $

70,0

00 b

onus

pai

d to

Mr.

De

Lacy

in th

e ye

ars

abov

e re

late

to th

e re

spec

tive

prev

ious

yea

rs p

erfo

rman

ce.

Per

form

ance

bas

ed p

aym

ents

are

pai

d so

lely

at t

he d

iscr

etio

n of

the

Boa

r d o

f Dire

ctor

s.

Mr.

De

Lacy

’s e

mpl

oym

ent a

gree

men

t has

no

fixed

dur

atio

n.

Dir

ecto

rs’ R

epo

rt (

con

tin

ued

)

Dir

ecto

rs’ R

emu

ner

atio

n R

epo

rt :

2006

To

tal

Sal

ary

&

Fee

sP

erfo

rman

ce

Bas

ed P

aym

ent

No

n-C

ash

B

enef

its

Su

per

Ret

irem

ent

Ben

efit

sO

pti

on

s%

Oth

er

ben

efit

sT

ota

lJa

mes

Dud

field

23,0

00-

-

2,07

0-

-

-

-

25

,070

Zel

ko L

endi

ch *

245,

501

-

-

3,

195

-

62

,766

20%

-

31

1,46

2

Mar

k M

oncr

ieff

21,6

72-

-

1,95

0-

-

-

-

23

,622

Bru

ce D

e La

cy *

*15

4,47

7 7

0,00

012

,931

26,9

36-

62,7

6619

%6,

632

333,

742

Jaso

n T

ers

18,2

08-

-

-

-

-

-

-

18

,208

Tot

al46

2,85

870

,000

12,9

3134

,151

-

12

5,53

26,

632

712,

104

2005

Zel

ko L

endi

ch95

,000

-

-

8,

550

-

61

,743

37%

-

16

5,29

3

Mar

k M

oncr

ieff

-

-

-

-

-

-

-

-

-

Bru

ce D

e La

cy13

7,33

570

,000

22,5

33-

61,7

4320

%10

,132

301,

743

Jam

es D

udfie

ld23

,000

-

-

2,

070

-

25

,070

Jaso

n T

ers

-

-

-

-

-

-

-

-

-

P

eter

Boz

zo

(res

igne

d 13

/05/

05)

20,3

46-

-

1,83

1-

-

-

-

22

,177

Tot

al27

5,68

170

,000

-

34

,984

-

12

3,48

610

,132

514,

283

Sh

are

bas

ed

pay

men

tsP

ost

em

plo

ymen

tS

ho

rt T

erm

* D

urin

g th

e 20

06 fi

nanc

ial y

ear

the

Com

pany

ent

ered

into

a c

onsu

ltanc

y ag

reem

ent w

ith a

com

pany

ass

ocia

ted

with

Mr.

Zel

ko L

end

ich.

Tha

t agr

eem

ent

repl

aced

exi

stin

g em

ploy

men

t arr

ange

men

t s b

etw

een

the

Com

pany

and

Mr.

Len

dich

. The

am

ount

sho

wn

abov

e of

$24

5,50

1 in

clud

es fi

xed

rem

uner

atio

n re

mitt

ed in

acc

orda

nce

with

that

agr

eem

ent t

oget

her

with

rem

uner

atio

n pa

id to

Mr.

Len

dich

as

a di

rect

or o

f the

Com

pany

.

** T

he $

70,0

00 b

onus

pai

d to

Mr.

De

Lacy

in th

e ye

ars

abov

e re

late

to th

e re

spec

tive

prev

ious

yea

rs p

erfo

rman

ce.

Per

form

ance

bas

ed p

aym

ents

are

pai

d so

lely

at t

he d

iscr

etio

n of

the

Boa

r d o

f Dire

ctor

s.

Mr.

De

Lacy

’s e

mpl

oym

ent a

gree

men

t has

no

fixed

dur

atio

n.

page � Farm Pride Foods Ltd Annual Report 2006


Directors’ Remuneration Report : (continued)

In accordance with the remuneration policy, options granted as remuneration are subject to continuing service with the Company.

The percentage of options is shown in brackets. Options granted as remuneration are valued at grant date in accordance with AASB2 Share-based Payments.

There are no executives, besides executive directors.

Remuneration Policy

The Board policy for determining the nature and amount of remuneration of Directors and Executives is agreed by the Board of Directors as a whole. The Board obtains professional advice where necessary to ensure that the Company attracts and retains talented and motivated Directors and employees who can enhance company performance through their contributions and leadership.

For Executive Directors and specified executives the Company provides a remuneration package that incorporates both cash-based remuneration and option-based remuneration. The contracts for service between the Company and specified Directors and executives are on a continuing basis the terms of which are not expected to change in the immediate future.

The Company determines the maximum amount for remuneration, including thresholds for option-based remuneration, for Directors by resolution. Further details regarding components for Directors’ and Executive remuneration are provided in the notes to the financial statements.

The names of positions of each person who held the position of Director at any time during the financial year is provided above.

Directors meetings

The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of meetings attended by each Director were as follows:

Number of meetings attended :

Eligible to attend Attended

Eligible to attend Attended

Zelko Lendich 17 17 2 2

Mark Moncrieff 14 14 2 2

Bruce De Lacy 17 17 - -

James Dudfield 17 16 2 2

Jason Ters 13 12 - -

Board of Directors Audit Committee

Director’s Report


Director’s Report

Share Options

At the date of this report, the unissued ordinary shares of the economic entity under option are as follows:

Grant DateDate of Expiry Number

Exercise Date

Exercise Price

Expired, forfeited or exercised

Closing balance

Zelko Lendich 20/10/2004 20/10/2008 300,000 $0.45 300,000

20/10/2004 20/10/2009 300,000 $0.45 300,000

Brude De Lacy 20/10/2004 20/10/2008 300,000 $0.45 300,000

20/10/2004 20/10/2009 300,000 $0.45 300,000

19/12/2001 20/06/2006 35,000 20/06/2003

$0.51* or market value 35,000 -

19/12/2001 20/06/2007 35,000 20/06/2004

$0.51** or market value 35,000

John Roumelle 29/05/2002 1/07/2006 75,000 1/07/2003

$0.51*** or market value 75,000

TOTAL 1,345,000 35,000 1,310,000

* $0.51 ** $0.51 *** $0.51

Movement in the number of share options held by employees are as follows:

30 June 2006 30 June 2005

1,345,000 425,000

- 1,200,000

- 200,000

35,000 80,000

1,310,000 1,345,000Closing Balance

Opening Balance

Granted during the year

Exercised during the year

Lapsed during the year

page �0 Farm Pride Foods Ltd Annual Report 2006

Director’s Report

Details of share options outstanding as at end of year:

Grant DateDate of Expiry 30 June 2006 30 June 2005

19/12/2001 20/06/2006 - 35,000

19/12/2001 20/06/2007 35,000 35,000

29/05/2002 1/07/2006 75,000 75,000

20/10/2004 20/10/2008 600,000 600,000

20/10/2004 20/10/2009 600,000 600,000

1,310,000 1,345,000

$0.51

$0.45

$0.45

Exercise Price

$0.51

$0.51

Principal Activities

The principal activities of Farm Pride Foods Ltd. include and are not limited to the processing, manufacturing and sale of egg and egg products and distribution and sale of nutritional snacks.

Environmental Regulation

The consolidated entities operations are not subject to any significant environmental, Commonwealth or State regulations or laws.

Likely Developments

The Company will continue to pursue its operating strategies to create shareholder value. In the opinion of the Directors, disclosure of any further information would be likely to result in unreasonable prejudice to the consolidated entity.

Significant Changes to the State of Affairs

There have been no significant changes in the consolidated entity’s state of affairs during the financial year.

After Balance Date Events

No matters or circumstances have arisen since the end of the financial year that have significantly affected or significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

Indemnification and Insurance of Directors and Officers

The Company has paid premiums to insure each of the Directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director of the Company, other than conduct involving a wilful breach of duty in relation to the Company.

page ��Farm Pride Foods Ltd Annual Report 2006

Director’s Report


Review and Results of Operations

The consolidated loss of the consolidated entity after providing for income tax amounted to ($6,480,000). For further clarification of the review and results of operations of the Company reference should be made to the Chairman’s and Chief Operating Officers’ report.

Proceedings on Behalf of Consolidated Entity

The Company has been served a Statement of Claim for amount of $55,000 in which it intends to vigorously defend.

Rounding of Amounts

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

Auditor’s Independence Declaration

A copy of the auditor’s independence declaration in relation to the audit for the financial year is provided with this report.

Non- Audit Services

Non-audit services are approved by resolution of the audit committee and approval is provided in writing to the Board of Directors. Non-audit services provided by the auditors of the consolidated entity during the year, Pitcher Partners, are detailed below. The Directors are satisfied that the provision of the non-audit services during the year by the auditor is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

Amounts paid or payable to an auditor for non-audit services provided during the year by the auditors to any entity that is part of the consolidated entity for :

2006 2005

Taxation Services 19 14

Signed in accordance with a resolution of the Directors.

Zelko Lendich Chief Executive Officer

27 September 2006 Melbourne



To the Directors of Farm Pride Foods Ltd.

In relation to the independent audit for the year ended 30 June 2006, to the best of my knowledge and belief there have been :

(i) No contraventions of the auditor independence requirements of the Corporations Act 2001(ii) No contraventions of any applicable code of professional conduct.

PITCHER PARTNERS

T J BENFOLD Partner28 September 2006 Melbourne



Corporate Governance Statement


Farm Pride’s corporate governance is the system by which the company is directed and managed. It influences how the objectives of the company are set and achieved, how risk is monitored and assessed, and to ensure optimal performance.

Directors and Management of Farm Pride Foods Ltd. are committed to high standards of corporate governance. The Board of Directors oversee the consolidated entity and performs its functions on behalf of shareholders. The goals of good corporate governance adopted by the Directors and Management of Farm Pride Foods Ltd. are to ensure alignment of Directors and shareholders interests.

The purpose of this statement is to provide details and principles of the main corporate governance practices the consolidated entity had in place during the past financial year.

Board of Directors

The Board is responsible for the overall Corporate Governance of the consolidated entity including its strategic direction and financial objectives, establishing goals for management and monitoring the attainment of these goals.

Role of the Board

The role of the Board is to direct management with the view to optimising company performance and to increase shareholder wealth through:

• the provision of strategic direction and oversight of management • effective corporate governance • the selection and evaluation of succession planning for Directors and executive management • appropriate remuneration of directors and employees; • the approval of, and monitoring of financial performance against corporate budgets • the approval of delegations of authority to management • ensuring the company acts legally and responsibly on all matters and ensure high ethical

standards and codes of conduct; • the integrity of risk management strategies and controls • the approval and monitoring of progress of capital expenditure, capital management and

acquisitions and divestitures.

To assist in the effective execution of its responsibilities, the Board has an established Audit Committee.

Composition of the Board

ASX recommends that the Board of Directors is to be constituted with a majority of individuals who qualify as unrelated or independent directors and so ensure that the board can bring and be perceived to bring, quality, objective and independent judgements to all issues.

To add value to the Company, the Board of Farm Pride Foods Ltd has been formed so that it has effective composition, size and commitment to adequately discharge its responsibilities and duties in the best interest of the company as a whole. The Board currently consists of two executive and two non executive directors. The names and details of the skills, experience, expertise, qualifications, term of office, and attendance of Board and committee meetings of each Director of the Company are tabled within this annual report. The Board continuously reviews its’ members skills, expertise and experience to maximize value for the shareholders. Whilst it is desirable for the Chairman to be an independent director (ASX Corporate Governance

Council – Principles of Good Corporate Governance), due to the relatively small size of the industry and the need for industry expertise the Board considered it appropriate for Mr. Mark Moncrieff to be Chairman of the Board. Whilst Farm Pride and its controlled entities have dealings with Moncrieff related organisations (refer note 27) for the provision of goods and services, the Board believes that Mr. Moncrieff’s interest in these companies does not affect his independence as Chairman and Director of Farm Pride Foods.

Mr. Moncrieff has since resigned as Chairman and Mr. James Dudfield, an independent Director has been appointed Chairman effective 1st September 2006.

page �� Farm Pride Foods Ltd Annual Report 2006


Ultimate responsibility for management and control of the company business and affairs is vested in the Directors. The Board of Directors adopts appropriate structures and procedures to ensure that the board functions objectively and independent of management.

Communication between Directors and Management will essentially be through Executive Directors.

The composition of the Board is set having regard to factors including: • the Constitution provides that until otherwise determined, the number of Directors must not be

less than 3 or greater than 15; • the Board should comprise of Directors with a broad range of expertise and knowledge.

Directors Rights

The Directors of Farm Pride Foods Ltd. have the right in furtherance of their duties to seek independent professional advice at the company’s expense.

This procedure requires prior consultation with and approval by, the Chairman and assurances as to the qualification and reasonableness of the fees of the relevant expert.

If at any time the Chairman does not provide approval, the matter shall be submitted to the full board for consideration.

Conflict of Interest and Related Party Transactions

Directors must disclose to the Board actual or potential conflicts that may or might reasonably be thought to exist between the interests of the Director and the interests of the Company.

Directors are also expected to indicate to the Chairman any actual or potential conflict of interest situation as soon as it arises

The Board can request a Director to take reasonable steps to remove the conflict of interest. If a Director cannot remove a conflict of interest, the Director must absent himself or herself from the room when discussion and voting occur on matters to which the conflict relates. The entry and exit of the Director concerned will be minuted by the Company Secretary.

Related Party Transactions

Related party transactions include any financial transaction between a Director or officer and the Company.

To assist the Board in showing that a financial benefit, such as the awarding of a contract to a company in which a Director is a partner, is given on arm’s length terms, a review is conducted of similar provisions or services from a non-related entity to Farm Pride to ensure value to Farm Pride and its’ shareholders. The Board has also resolved that where applications are made by a related party to a Director or officer of the Company then the Director or officer shall exclude himself/herself from the approval process.

Related party for this process means:

(a) a spouse or de facto spouse of the Director or officer; or

(b) a parent, son or daughter of the Director or officer or their spouse or de facto spouse; or

(c) an entity over which the Director or officer or a related party defined in (a) or (b) has a controlling interest.

Guidelines for dealing in securities by directors and employees

In addition to the provisions of the Corporations Act, which apply to all Farm Pride Foods Ltd. employees, the Company has developed specific written guidelines that prohibit Directors and executives (and their respective associates) from acquiring, selling or otherwise trading in the Company’s shares if they possess material price sensitive information which is not in the public domain.These guidelines are available by request.

Having regard to the legal prohibitions commonly referred to as Insider Trading Laws, Directors and executive officers and all other employees of Farm Pride Foods are aware that by virtue of their respective positions they will qualify as insiders when they are, from time to time, in possession of inside


information. In those circumstances Directors, executive officers and all other employees of Farm Pride Foods Ltd. must observe these insider trading laws.

All Directors, executive officers, and other employees of Farm Pride Foods Ltd are required to notify in writing the Company Secretary in advance of all proposed dealings in securities in Farm Pride Foods Ltd. Any such proposed dealings that are completed are then required to be notified in writing to the Company Secretary within 3 working days of completion.

Directors are only permitted to deal in securities of Farm Pride Foods Ltd. during the following periods of time:

• a period of 30 days following the announcement of Farm Pride Foods Ltd. annual and half yearly financial results to the ASX

• a period of 30 days following the date of Farm Pride Foods Ltd annual general meeting

The board has endorsed a policy statement for all Farm Pride Foods Ltd. Directors relating to the sale and purchase of company securities.

Nomination Committee

When a board vacancy exists or where it is considered that the board would benefit from the services of a new director with particular skills, the Board may appoint a Nomination Committee.

The committee identifies potential candidates with the appropriate expertise and experience and recommends to the board the most suitable candidate. The committee may engage the services of external professional advisors to assist with the selection.

Prior to appointment, each Director is provided with a letter of appointment, which includes: • the company’s constitution • Statement of Corporate Governance • the expectations of the board in respect to a proposed appointee to the board, their contribution

to the performance of the company, attending and preparation of all board meetings • policy on dealing in company securities • their remuneration and the manner in which it is determined • the term of their appointment subject to shareholder approval • ASX Principles of Good Corporate Governance • superannuation arrangements • a list of fellow Directors • requirement to disclose of Directors interests and any matters which affect the Directors

independence.

A Director retiring at an Annual General Meeting who is not disqualified by law from being re-appointed is eligible for re-election.

The Chairman reviews the performance of all Directors each year and an evaluation of Board performance.

Safeguard Integrity in Financial Reporting

Audit: Farm Pride has a structure in place to independently verify and safeguard the integrity of the Company’s financial reporting.

Audit Committee

The role of the Audit Committee is documented in a charter approved by the board and is available upon request.

The Audit committee consists of three members. The members at the date of this report are Mr. James Dudfield (Chairman), Mr. Zelko Lendich and Mr. Mark Moncrieff.



Members of the Audit Committee have unrestricted access to management and the auditor. The committee also retains the right to, by invitation and board approval, engage additional independent advisors.

Responsibilities of the Audit Committee include:

• reporting to the Board on all relevant matters within its charter, and formally tabling minutes of the intervening committee meetings

• liaison with the external auditor to ensure that the annual and half yearly statutory audits are conducted in an effective manner

• reviewing the integrity of the company’s financial statements before submission to the Board and recommends their approval

• monitoring the procedures in place to ensure compliance with the Corporations Law, Stock Exchange Listing Rules and any matters outstanding with auditors, Australian Taxation Office, Australian Securities and Investment Commission and Australian Stock Exchange

• review of internal controls and recommending enhancements

• reviewing significant transactions which are not part of the Company’s business and contracts, arrangements and undertakings that may involve related parties

• monitoring the establishment of appropriate ethical standards.

• ensure the independence of the external auditor

The Audit Committee meets with the external auditor from time to time during the year. The audit plan is formulated and any significant issues and proposed changes in accounting policies are tabled.

Financial Report Accountability

Farm Pride board require in writing from the Chief Executive Officer and Chief Financial Officer (or equivalent) to state in writing to the Board that the Company’s financial reports present a true and fair view in all material respects of the company’s operational results and are in accordance with relevant accounting standards

Remuneration Committee

The ASX Principles of Good Corporate Governance recommend a minimum of three members to form the composition of the remuneration committee. The majority of members being independent and chaired by an independent director.

The board considers that due to the nature and scope of the company’s activities the independent Directors should recommend policy to the whole board who should undertake the responsibility, therefore the company does not operate a separate remuneration committee in name.

The Board of Farm Pride Foods Ltd. is responsible for reviewing the remuneration policies and practices of the company including but not limited to:

• the compensation arrangements for the Chief Operating Officer and senior management and terms of employment

• employee share and option plans • fees of non-executive members of the board • occupational health and safety • anti discrimination policy • sexual harassment policy • award and conditions compliance, including enterprise bargaining agreements • incentive plans • fringe benefit policy

The Board obtains independent professional advice on the appropriateness of remuneration packages where circumstances require it.

Continuous Disclosures

The Company is committed to giving all shareholders timely and equal access to information concerning the company. The Board has designated the Company Secretary as the person responsible for overseeing and coordinating disclosure of information to the ASX.



The Company also has an objective of honest and open disclosure of information to stakeholders, subject to appropriate commercial considerations associated with competitive and sensitive information.

The Company ensures the fulfilment of its obligations to shareholders and the broader market for continuous disclosure. Market announcements are released to ASX; this includes annual reports, notices of Annual General Meetings and media releases.

Disclosure is provided in electronic and written formats or by request.

Business Risk Management

The Board has in place a number of arrangements and internal controls intended to identify and manage areas of significant business risk. These include the maintenance of:

• Board committees • Detailed and regular budgetary and financial management reporting • Established organisational structure • Procedures and policies • Audit (including internal systems and controls and social audits) • Insurance evaluations • The retention of specialised staff and external advisors.

Ethical Standards and Code of Conduct

The Company maintains a policy of ethical standards setting out for employees and Directors what standards of conduct are expected of them. This policy is communicated to all employees. All Farm Pride Food Ltd employees and Directors are expected to act with the highest possible standard of ethics when carrying out their duties. The policy deals with matters including:

• shareholders and the community • dealing with customers and consumers • trade practices • relations with suppliers • employment practices • responsibilities to the community • personal conduct.

Policies are incorporated in the individual letters of engagement, including provisions relating to conflicts of interest, confidentiality and restrictions against use and dissemination of information, use of company assets, prerequisites, tender processes, benefits and contact with suppliers, employment opportunity practices, privacy, oh&s, training and further education support.

Farm Pride Foods Ltd. employees and Directors are expected to act with the highest possible standard of ethics when carrying out their duties.

The Board of Farm Pride believe the above corporate governance practices comply with those as outlined with the ASX Principles of Good Corporate Governance and is regularly reviewed.



Consolidated Income Statement for the year ended 30 June 2006

Notes

2006 2005 2006 2005

$'000 $'000 $'000 $'000

Sales revenue 3 77,656 48,261 44,907 48,261

Changes in inventories and raw materials and consumables used 4 522 1,001 (389) 1,001

Cost of goods sold 4 (68,286) (41,748) (36,547) (41,748)Salaries & employee benefits expense (7,200) (3,235) (4,427) (3,235)Depreciation expense 4 (1,328) (606) (981) (606)Finance costs 4 (1,372) (253) (1,372) (253)Impairment of goodwill 4 (4,000) - - - Provision for non recoverability of intercompany loan 4 - - (4,000) - Other expenses from continuing operations (3,446) (2,207) (2,688) (2,207)

Profit/(loss) from continuing operations before incometax expense (7,454) 1,213 (5,497) 1,213Income tax revenue relating to continuing operations 5 974 283 387 283

Profit/(loss) from continuing operations after income taxrevenue (6,480) 1,496 (5,110) 1,496Profit/(loss) attributed to the members of Farm PrideFoods Ltd (6,480) 1,496 (5,110) 1,496

Basic earnings per share 9 (18.94) 6.69 (14.94) 6.69Diluted earnings per share 9 (18.94) 6.65 (14.94) 6.65

Consolidated Entity Parent Entity

The accompanying notes form part of these financial statements

Consolidated Income Statement for the year ended �0 June 2006


Consolidated Balance SheetAs At 30 June 2006

Notes2006 2005 2006 2005$'000 $'000 $'000 $'000

CURRENT ASSETS

Cash and cash equivalents 10 1,455 809 433 809Trade and Other Receivables 11 10,497 5,754 12,266 6,336Inventories 12 3,859 3,337 2,948 3,337Other Current Assets 13 4,311 1,465 2,261 1,465

TOTAL CURRENT ASSETS 20,122 11,365 17,908 11,947

NON-CURRENT ASSETS

Other Receivables 11 - - 5,371 - Financial assets 14 240 242 720 705Property, plant and equipment 16 26,392 18,809 22,604 17,251Intangible assets 17 5,897 1,622 1,842 1,622Deferred tax assets 18 1,370 350 783 350

TOTAL NON-CURRENT ASSETS 33,899 21,023 31,320 19,928

TOTAL ASSETS 54,021 32,388 49,228 31,875

CURRENT LIABILITIES

Trade and Other Payables 19 12,647 6,381 9,300 6,381Short term Borrowings 20 1,402 510 902 - Current tax liabilities 21 2 32 - 29Short Term Provisions 22 898 728 804 728

TOTAL CURRENT LIABILITIES 14,949 7,651 11,006 7,138

NON-CURRENT LIABILITIESLong term Borrowings 20 20,588 5,927 18,427 5,927Deferred tax liabilities 21 1,123 610 1,123 610Other Long Term Provisions 22 274 221 215 221

TOTAL NON-CURRENT LIABILITIES 21,985 6,758 19,765 6,758

TOTAL LIABILITIES 36,934 14,409 30,771 13,896

NET ASSETS 17,087 17,979 18,457 17,979

EQUITY

Contributed Equity 23 22,304 17,930 22,304 17,930

Share Option Reserve 24 249 123 249 123Asset Revaluation Reserve 24 1,154 66 1,154 66Accumulated losses 24 (6,620) (140) (5,250) (140)

TOTAL EQUITY 17,087 17,979 18,457 17,979



Consolidated Balance Sheet for the year ended �0 June 2006


Consolidated Changes in Equity For the Year Ended 30 June 2006

Notes2006 2005 2006 2005$'000 $'000 $'000 $'000

TOTAL EQUITY AT THE BEGINNING OF 17,979 11,328 17,979 11,328THE YEAR

Gain on revaluation of properties, plant andequipment, net of tax 24 1,088 - 1,088 -

Employee share options 24 126 123 126 123

Net income recognised directly in equity 1,214 123 1,214 123

Profit /(loss) for the year (6,480) 1,496 (5,110) 1,496

Total recognised income and expense for the

period (5,266) 1,619 (3,896) 1,619

Transactions with equity holders in their capacity as equity holders :

Shares Issued during the period 23 4,374 5,032 4,374 5,032

TOTAL EQUITY AT THE END OF THE YEAR 17,087 17,979 18,457 17,979



Consolidated Changes in Equity for year ended �0 June 2006

page 2�Farm Pride Foods Ltd Annual Report 2006

Consolidated Statement of Cash Flows For the Year Ended 30 June 2006

Notes 2006 2005 2006 2005

CASH FLOW FROM OPERATING ACTIVITIES $'000 $'000 $'000 $'000

Receipts from customers 72,891 47,816 38,964 47,816

Payments to suppliers and employees (75,162) (47,549) (41,342) (47,549)

Interest received 22 20 13 20

Borrowing costs (1,372) (253) (1,372) (253)

Income tax paid (29) - (28) -

Net cash provided by operating activities 26(a) (3,650) 34 (3,765) 34

CASH FLOW FROM INVESTING ACTIVITIES

Proceeds from sale of property, plant and equipment - 12 - 12

Purchase of property, plant and equipment (4,558) (10,263) (4,263) (8,708)Purchase of businesses 26(b) (8,448) - (102) (141)

Net cash provided by investing activities (13,006) (10,251) (4,365) (8,837)

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from share issue 1,749 5,032 1,749 5,032

Proceeds from borrowings 17,259 6,437 17,082 5,605

Repayment of borrowings (1,706) (497) (1,706) (497)

Repayment of finance lease principal - (71) - (71)

Net payments to subsidiaries - - (9,371) (582)

Net cash provided by financing activities 17,302 10,901 7,754 9,487

Net increase (decrease) in cash held 646 684 (376) 684

Cash and cash equivalents at beginning of year 809 125 809 125

Cash and cash equivalents at end of year 10 1,455 809 433 809



Consolidated Statement of Cash Flows for year ended �0 June 2006


Notes to and forming part of the Financial Statements


Note 1: Statement of Significant Accounting Policies

Basis of preparation

This financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Urgent Issues Group Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial report covers Farm Pride Foods Ltd as an individual parent entity and Farm Pride Foods Ltd and Controlled Entities as a consolidated entity. Farm Pride Foods Ltd is a company limited by shares, incorporated and domiciled in Australia.

The following is a summary of material accounting policies adopted by the consolidated entity in the preparation and presentation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

(a) Basis of preparation of the financial report

The financial report of Farm Pride Foods Ltd and Controlled entities, and Farm Pride Foods Ltd as an individual parent entity comply with Australian equivalents to International Financial Reporting Standards (AIFRS).

This is the first annual financial report of Farm Pride Foods Ltd prepared in accordance with the Australian Equivalents of International Financial Reporting Standards (AIFRS). The financial reports of Farm Pride Foods Ltd were prepared in accordance with the previous Australian Generally Accepted Accounting Principles (AGAAP) until 30 June 2005. There are certain differences between accounting policies under AIFRS and AGAAP and where applicable the comparative figures have been restated to reflect these adjustments. A summary of the significant accounting policies under AIFRS is provided below. Reconciliations of equity and operating profit/loss between AGAAP and AIFRS are provided under notes 30 and 31.

The financial report has been prepared on an accrual basis under the historical cost convention, as modified by revaluations to fair value for certain classes of assets as described in the accounting policies.

Summary of the significant accounting policies under AIFRS

(b) Principles of Consolidation

The consolidated financial statements are those of the consolidated entity, comprising the financial statements of the parent entity and of all entities, which Farm Pride Foods Ltd controlled from time to time during the year and at balance date.

The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies which may exist. All inter company balances and transactions, including any unrealised profits and losses have been eliminated on consolidation.

(c) Going Concern

The financial report has been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and liabilities in the ordinary course of business. The consolidated entity incurred an after tax loss from ordinary activities of ($6,480,000) during the year ended 30 June 2006.

The going concern basis will remain valid provided the economic entity returns to profitable trading and continues to receive the support of its bankers.



Note 1: Statement of Significant Accounting Policies (continued)

(d) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Sale of goods

Upon delivery of the goods to the customer.

Interest

Control of the right to receive the interest payment.

All revenue is stated net of the amount of goods and services tax (GST).

(e) Cash and Cash Equivalents

For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks, and money market investments readily convertible to cash within 2 working days, net of bank overdrafts.

(f) Inventories

Inventories are valued at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity.

(g) Property, Plant and Equipment

Cost and valuation Freehold land and buildings are measured at fair value. At each balance date the carrying value of each asset is reviewed to ensure that it does not differ materially from the asset’s fair value at reporting date. Where necessary, the asset is revalued to reflect its fair value.

All other classes of property, plant and equipment are measured at cost.

Where assets have been revalued, the potential effect of the capital gains tax on disposal has been taken up as a deferred tax liability in the asset revaluation reserve.

Depreciation The depreciable amount of all fixed assets including buildings are depreciated on a straight line basis over their estimated useful lives to the entity commencing from the time the asset is held ready for use.

The useful lives for each class of assets are :

2006 2005

40 years 40 years

2.5 to 33 years 2.5 to 33 years

Buildings

Plant and equipment

page 2� Farm Pride Foods Ltd Annual Report 2006


(h) Leases

Leases are classified at their inception as either operating of finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

Operating leases Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses in the period in which they are incurred.

Finance Leases Leases which transfer substantially all of the risk and benefits incidental to ownership of the leased item to the group, but not the legal ownership are capitalised at the present value of the minimum lease payments and disclosed as finance leases. A lease liability of equal value is also recognised.

Leased assets are depreciated over the shorter of the estimated useful life of the assets and the lease term. Lease payments are allocated between interest expense and reduction of the lease liability with the interest expense calculated using the interest rate implicit in the lease and charged directly to the Income Statement.

(i) Intangibles

GoodwillGoodwill represents the excess of the purchase consideration plus incidental costs over the fair value of identifiable net assets acquired at the time of the acquisition of a business or shares in a controlled entity.

Goodwill is not amortised but is tested annually for impairment. Goodwill is carried at cost less accumulated impairment losses.

(j) Impairment of assets

Assets with an indefinite useful life are not amortised but are tested annually for impairment in accordance with AASB 136. Assets subject to annual depreciation or amortisation are reviewed for impairment whenever events or circumstances arise that indicate that the carrying amount of the asset may be impaired.

An impairment loss is recognised where the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of an asset is defined as the higher of its fair value less costs to sell and value in use.

(k) Taxes

Current income tax expense or revenue is the tax payable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities.

A balance sheet approach is adopted under which deferred tax assets and liabilities are recognised for temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred tax asset or liability is recognised in relation to temporary differences arising from the initial recognition of an asset or a liability if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for temporary differences and unused tax losses only when it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.




Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST except :

Where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

Trade debtors and creditors are stated with the amount of GST included.

(l) Employee Benefits

Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages and salaries, annual leave and long service leave.

Liabilities arising in respect of wages and salaries, annual leave, sick leave and any other employee benefits expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date.

Contributions are made by the economic entity to an employee superannuation fund and are charged as expenses when incurred.

(m) Financial Instruments

Financial Assets Trade receivables are carried at full amounts due less any provision for doubtful debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Amounts receivable from other debtors are carried at full amounts due. Bad debts are written off as incurred.

Financial Liabilities The bank overdraft is secured by a floating charge over the consolidated entity’s assets. Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the economic entity. Trade liabilities are normally settled on 30 days from month end.

(n) Foreign Currencies

Translation of Foreign Currency Transactions Transactions in foreign currencies of entities within the consolidated entity are converted to local currency at the rate of exchange ruling at the date of the transaction.

Foreign currency monetary items that are outstanding at the reporting date (other than monetary items arising under foreign currency contracts where the exchange rate for that monetary item is fixed in the contract) are translated using the spot rate at the end of the financial year.

(o) Investments

Non-current investments are measured on the cost basis. The carrying amount of non-current investments is reviewed annually by Directors to ensure it is not in excess of the recoverable amount of these investments. The expected net cash flows from investments have not been discounted to their present value in determining the recoverable amounts.

(p) Poultry

The cost of poultry is written off over their expected life, which is approximately 62 weeks.

(q) Borrowings

Bank bills and promissory notes are carried at the principal amount.

Finance lease liability is determined in accordance with the requirements of AASB 117 “Leases”.



Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST except :

Where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

Trade debtors and creditors are stated with the amount of GST included.

(l) Employee Benefits

Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages and salaries, annual leave and long service leave.

Liabilities arising in respect of wages and salaries, annual leave, sick leave and any other employee benefits expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date.

Contributions are made by the economic entity to an employee superannuation fund and are charged as expenses when incurred.

(m) Financial Instruments

Financial Assets Trade receivables are carried at full amounts due less any provision for doubtful debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Amounts receivable from other debtors are carried at full amounts due. Bad debts are written off as incurred.

Financial Liabilities The bank overdraft is secured by a floating charge over the consolidated entity’s assets. Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the economic entity. Trade liabilities are normally settled on 30 days from month end.

(n) Foreign Currencies

Translation of Foreign Currency Transactions Transactions in foreign currencies of entities within the consolidated entity are converted to local currency at the rate of exchange ruling at the date of the transaction.

Foreign currency monetary items that are outstanding at the reporting date (other than monetary items arising under foreign currency contracts where the exchange rate for that monetary item is fixed in the contract) are translated using the spot rate at the end of the financial year.

(o) Investments

Non-current investments are measured on the cost basis. The carrying amount of non-current investments is reviewed annually by Directors to ensure it is not in excess of the recoverable amount of these investments. The expected net cash flows from investments have not been discounted to their present value in determining the recoverable amounts.

(p) Poultry

The cost of poultry is written off over their expected life, which is approximately 62 weeks.

(q) Borrowings

Bank bills and promissory notes are carried at the principal amount.

Finance lease liability is determined in accordance with the requirements of AASB 117 “Leases”.



(r) Contributed Equity

Issued and paid up capital is recognised at the net fair value of the consideration received by the Company after costs of raising capital have been incurred.

(s) Comparatives

In accordance with the first time adoption of AIFRS, comparative information has been reclassified where appropriate through retrospective application of AIFRS to the previous year results so as to achieve consistency with current year disclosures.

(t) Rounding Amounts

The Company is of a kind referred to in ASIC Class Order 98/0100 dated 10 July 1998, and in accordance with that Order, amounts in the financial statements have been rounded off to the nearest thousand dollars, or in certain cases, to the nearest dollar.

Note 2 : Critical Accounting Estimates and Judgements

The group makes certain estimates and assumptions concerning the future, which, by definition will seldom represent actual results. The estimates and assumptions that have a significant inherent risk in respect of estimates based on future events which could have a material impact on the assets and liabilities in the next financial year are disclosed below:

(a) Estimated impairment of goodwill Goodwill is allocated to cash generating units (CGU’s) according to applicable business operations. The recoverable amount of CGU is based on value-in-use calculations. These calculations are based on projected cash flows approved by management covering a period not exceeding 5 years. Management’s determination of cash flow projections and gross margins are based on past performance and its expectation for the future. The present value of future cash flows has been calculated using a discount rate of 12.36% to determine value-in-use. These classifications resulted in the impairment adjustment of $4 million to the ACM Egg business acquired by the Company.

(b) Income taxes Income tax benefits are based on the assumption that no adverse change will occur in the income tax legislation and the anticipation that the Company will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.



Note 3: Revenue

Notes

2006 2005 2006 2005

$'000 $'000 $'000 $'000

77,631 48,224 44,891 48,224

77,631 48,224 44,891 48,224

22 22 13 22

22 22 13 22

3 3 3 3

- 12 - 12

25 37 16 3777,656 48,261 44,907 48,261

Profit on sale of property, plant & equipment

Total revenues from continuing operations

Total interest

Other income

Total revenues from other operations

Revenues from other operations

Interest

Other persons / corporations

Revenues from continuing operations

Revenue from sale of goods

Total revenues from continuing operations

Parent EntityConsolidated Entity


page 2� Farm Pride Foods Ltd Annual Report 2006


Note 4: Profit from Ordinary Activities Notes

2006 2005 2006 2005

$'000 $'000 $'000 $'000

67,764 40,747 36,936 40,747

89 93 89 93

1,239 513 892 513

1,328 606 981 606

4,000 - - -

2 - 2 -

- - 4,000 -

1,372 253 1,372 2531,372 253 1,372 253

14 15 14 15

972 531 550 531

17 441 17 441

4,000 - - -

- - 4,000 -

Parent EntityConsolidated Entity

(a) Expenses

Total cost of goods sold

Depreciation of non-current assets

Buildings

Plant & equipment

Finance costs expensed

Interest ExpenseTotal borrowing cost

Total depreciation of non-current assets

Impairment losses

Goodwill

Provision for non recoverability of intercompany loan

Investments

Royalty Costs

Operating lease rentals

(b) Revenues and Net Gains

Foreign currency translation gains

(c) Significant Expense

Impairment of GoodwillProvision for non recoverability of intercompany loan



Notes

2006 2005 2006 2005

$'000 $'000 $'000 $'000

- 29 - 29

(974) (312) (387) (312)

(974) (283) (387) (283)

(2,236) 364 (1,649) 364

1,262 (160) 1,262 (160)

- (487) - (487)

(974) (283) (387) (283)

408 277 362 277

104 73 97 73

858 - 324 -

1,370 350 783 350

350 - 350 -

54 - 54 -

966 350 379 350

1,370 350 783 350

1,123 610 1,123 610

610 572 610 572

54 - 54 -

(8) 38 (8) 38

467 - 467 - 1,123 610 1,123 610

Balance at beginning of year

Transfer to deferred tax liability

Credited to the income statement

Transfer from deferred tax asset

Balance at the end of the year

Difference in the carrying values of property, plant and equipment between accounting and tax

Losses available for offset against future taxable income

Movement in deferred tax asset:

(d) Deferred tax liability relates to the following

Credited to the income statement

Credited directly to equity


Movement in deferred tax liability

Balance in the beginning of the year

Note 5 : Income Tax

Under (over) provision in prior years

(a) The components of tax expense :

Current tax

Deferred tax

Income tax revenue

(b) The prima facie tax on profit, using tax rates applicable in the country of operation, differs from the income tax privided in the financial statements as follows :At the statutory income tax rate of 30% (2005: 30%)Tax effect of amounts which are not deductible/(assessable) in calculating taxable income:

Income tax revenue

(c) Deferred tax asset relates to the following :

Employee benefits

Movement in provisions

Recoupment of tax losses not previously brought to account



Note 6: Dividends on Ordinary Shares

Notes

2006 2005 2006 2005

$'000 $'000 $'000 $'000

- - - -

117 88 117 88


Balance of franking account at year end adjusted for franking credits arising from payment of provision for income tax and after deducting franking credits to be used in payment of proposed dividends:

(a) Dividends proposed and recognised as a liability

(b) Franking credit balance

Note 7 : Key Management Personnel

(a) The names and positions of Key Management Personnel in office at any time during the financial year are :

Directors – Parent Entity Position

James Dudfield Director – Non-Executive (Appointed as Chairman 1 September 2006) Mark Moncrieff Non-Executive Chairman (Resigned as Chairman 1 September 2006) Zelko Lendich Executive Director / Chief Executive Officer Bruce De Lacy Executive Director / Chief Operating Officer Jason Ters Director – Non-Executive (Resigned 21 September 2006)



No

te 7

: K

ey M

anag

emen

t P

erso

nn

el (

con

tin

ued

)(b

) R

emu

ner

atio

n

2006

To

tal

Sal

ary

&

Fee

sP

erfo

rman

ceB

ased

Pay

men

tN

on

-Cas

hB

enef

its

Su

per

Ret

irem

ent

Ben

efit

sO

pti

on

s%

Oth

erb

enef

its

To

tal

Zel

ko L

endi

ch *

245,

501

--

3,

195

-

62,7

6620

%-

31

1,46

2

Mar

k M

oncr

ieff

21,6

72-

-

1,95

0-

-

-

-

23

,622

Bru

ce D

e La

cy15

4,47

770

,000

12,9

3126

,936

-

62,7

6619

%6,

632

333,

742

Jam

es D

udfie

ld23

,000

--

2,

070

--

-

-

25,0

70

Jaso

n T

ers

18,2

08-

-

-

-

-

-

-

18

,208

Tot

al46

2,85

870

,000

12,9

3134

,151

-

125,

532

6,63

271

2,10

4

2005

Zel

ko L

endi

ch95

,000

--

8,

550

-

61,7

4337

%-

16

5,29

3

Mar

k M

oncr

ieff

--

-

-

-

-

-

-

-

Bru

ce D

e La

cy *

*13

7,33

570

,000

22,5

33-

61

,743

20%

10,1

3230

1,74

3

Jam

es D

udfie

ld23

,000

--

2,

070

-25

,070

Jaso

n T

ers

--

-

-

-

-

-

-

-

Pet

er B

ozzo

(r

esig

ned

13/0

5/05

)20

,346

--

1,

831

--

-

-

22,1

77T

otal

275,

681

70,0

00-

34

,984

-

123,

486

10,1

3251

4,28

3

Po

st e

mp

loym

ent

Sh

are

bas

ed

pay

men

tsS

ho

rt T

erm

* D

urin

g th

e 20

06 fi

nanc

ial y

ear

the

Com

pany

ent

ered

into

a c

onsu

ltanc

y ag

reem

ent w

ith a

com

pany

ass

ocia

ted

with

Mr.

Zel

ko L

end

ich.

Tha

t agr

eem

ent

repl

aced

exi

stin

g em

ploy

men

t arr

ange

men

t s b

etw

een

the

Com

pany

and

Mr.

Len

dich

. The

am

ount

sho

wn

abov

e of

$24

5,50

1 in

clud

es fi

xed

rem

uner

atio

n re

mitt

ed in

acc

orda

nce

with

that

agr

eem

ent t

oget

her

with

rem

une r

atio

n pa

id to

Mr.

Len

dich

as

a di

rect

or o

f the

Com

pany

.

** T

he $

70,0

00 b

onus

pai

d to

Mr.

De

Lacy

in th

e ye

ars

abov

e re

late

to th

e re

spec

tive

prev

ious

yea

rs p

erfo

rman

ce.

Per

form

ance

bas

ed p

aym

ents

are

pai

d so

lely

at t

he d

iscr

etio

n of

the

Boa

rd o

f Dire

ctor

s.

Mr.

De

Lacy

’s e

mpl

oym

ent a

gree

men

t has

no

fixed

dur

atio

n .



No

te 7

: K

ey M

anag

emen

t P

erso

nn

el (

con

tin

ued

)

Gra

nted

as

rem

uner

atio

nG

rant

Dat

e

Val

ue p

er

optio

n at

dat

e of

gra

ntE

xerc

ise

pric

eF

irst e

xerc

ise

date

Last

exe

rcis

e da

te

300,

000

31/1

2/04

$0.5

5$0

.45

31/1

2/05

31/1

2/08

300,

000

31/1

2/04

$0.5

5$0

.45

31/1

2/06

31/1

2/09

300,

000

31/1

2/04

$0.5

5$0

.45

31/1

2/05

31/1

2/08

300,

000

31/1

2/04

$0.5

5$0

.45

31/1

2/06

31/1

2/09

0.45

$

Wei

ghte

d av

erag

e lif

e of

the

optio

n4.

5 ye

ars

Und

erly

ing

shar

e pr

ice

0.55

$

Exp

ecte

d sh

are

pric

e vo

latil

ity46

%

Ris

k fr

ee in

tere

st r

ate

0.05

Bal

ance

1 J

uly

2005

Gra

nted

as

rem

uner

atio

nO

ptio

ns

exer

cise

d

Net

chan

ge

othe

rB

alan

ce

30/0

6/06

Tot

al v

este

d 30

/06/

06

Tot

al

exce

risab

le

30/0

6/06

Tot

al

unex

erci

sabl

e 30

/06/

06

600,

000

-

-

-

60

0,00

030

0,00

030

0,00

030

0,00

0

670,

000

-

-

35,0

0063

5,00

030

0,00

033

5,00

030

0,00

0

Zel

ko L

endi

ch

Bru

ce D

e La

cy

Cal

cula

tions

of

optio

ns a

s re

mun

erat

ion

has

been

det

erm

ined

usi

ng a

Bla

ck S

chol

es o

ptio

n pr

icin

g m

odel

app

lyin

g th

e fo

llow

ing

inpu

ts:

Wei

ghte

d av

erag

e ex

erci

ce p

rice

Zel

ko L

endi

ch

Bru

ce D

e La

cy

(c)

Op

tio

ns

gra

nte

d a

s re

mu

ner

atio

n

All

gran

ts o

f op

tions

ves

t as

to h

alf

afte

r 12

mon

ths

from

the

gra

nt d

ate

and

the

bala

nce

afte

r 24

mon

ths

from

the

gran

t dat

e.

(d)

Nu

mb

er o

f o

pti

on

s h

eld

by

Key

Man

agem

ent

Per

son

nel

:

No

optio

ns w

ere

gran

ted

durin

g th

e ye

ar.

Zel

ko L

endi

ch

Bru

ce D

e La

cy



Note 7 : Key Management Personnel (continued)

(e) Number of shares held by Key Management Personnel:

Balance 1/7/05Received as

remunerationOptions

exercised

Netchange

Other Balance 30/06/06

Zelko Lendich 1,224,000 - - 1,224,000

Bruce De Lacy 210,502 - - (15,000) 195,502

Mark Moncrieff - - - 6,734,575 6,734,575

(f) Remuneration policy

The Board policy for determining the nature and amount of remuneration of Directors and Executives is agreed by the Board of Directors as a whole. The Board obtains professional advice where necessary to ensure that the Company attracts and retains talented and motivated Directors and employees who can enhance Company performance through their contributions and leadership.

For Executive Directors and specified executives, the Company provides a remuneration package that incorporates both cash based remuneration and option based remuneration. The contracts for service between the Company and specified Directors and executives are on a continuing basis the terms of which are not expected to change in the immediate future.

The Company determines the maximum amount for remuneration, including thresholds for option based remuneration for Directors by resolution.

The $70,000 bonus paid to Mr. De Lacy was attributed to the performance of Farm Pride Ltd for the 04/05 financial year.

Note 8 Auditor's Remuneration

Notes

2006 2005 2006 2005

$'000 $'000 $'000 $'000

178 65 141 65

19 14 17 14197 79 158 79


Amounts received or due and receivable by Pitcher Partners for :

An audit or review of the financial report of the entity and any other entity in the consolidated entity

Taxation services



Notes 2006 2005 2006 2005

$'000 $'000 $'000 $'000

(6,480) 1,496 (5,110) 1,496

2006 No. of shares

2005 No. of shares

34,213,836 22,372,088

- 109,091

Note 9 Earnings per share

Weighted average number of options outstanding

Weighted average number of ordinary shares used in calculating basic earnings per share

The following reflects the income and share data used in the calculations of basic and diluted earnings per share:

Net profit / (loss)


CURRENT

Cash at bank 1,455 638 433 638

Deposit at call - 171 - 1711,455 809 433 809

Note 10 Cash and Cash Equivalents

Note 11 Trade and Other Receivables

CURRENT

11(a)(i) 9,853 5,738 11,176 5,738

(135) (45) (135) (45)

9,718 5,693 11,041 5,693

11 (a)(ii) 779 61 1,225 64310,497 5,754 12,266 6,336

- - 9,371 -

- - (4,000) - - - 5,371 -

Other receivables

(a) Terms and conditions

NON CURRENT

Loan - subsidiaries

Trade Debtors

Provision for doubtful debts

(i) Trade debtors are non-interest bearing and generally on 30 day terms.(ii) Sundry debtors and other receivables are non-interest bearing and have repayment terms between 30 and 90 days.

Provision for non recoverability



Notes

2006 2005 2006 2005

$'000 $'000 $'000 $'000

1,992 1,339 1,325 1,339

1,867 1,998 1,623 1,998

3,859 3,337 2,948 3,337


Finished goods at cost

Total inventories at lower of cost and net realisable value

Note 12 Inventories

CURRENT

Raw material and stores at cost

374 311 321 311

3,729 1,093 1,801 1,093

208 61 139 614,311 1,465 2,261 1,465

Other current assets

Note 13 Other Current Assets

CURRENT

Prepayments

Poultry

14 (a) 242 242 722 705(2) - (2) -

240 242 720 705

14(a) Available for Sales Financial Assets Comprise

Unlisted investments, at cost

Shares in unlisted trusts 242 242 722 705

Note 14 Financial Assets

Available for sale financial assetsAccumulated impairment losses



Note 15 Controlled Entities

2006 2005

100% 100%

100% 100%

100% 100%

100% 100%

Percentage owned

Australia

Australia

Australia

Australia

Country of incorporation

Australia

Parent entity :

Farm Pride Foods Ltd.

Subsidiaries of Farm Pride Foods Ltd.

Big Country Pty. Ltd.

Farm Pride Property Trust Pty. Ltd.

Mooroopna Breeding Farm Pty. Ltd.

Farm Pride North Pty. Ltd.



Note 16 Property, Plant and Equipment

Notes

2006 2005 2006 2005

$'000 $'000 $'000 $'000

9,351 7,796 8,623 7,068

1,959 2,314 1,959 2,314

- (266) - (266)

16 (a) (b) 11,310 9,844 10,582 9,116

18,980 8,131 15,781 7,883

(4,258) (2,981) (3,871) (2,981)

16 (a) 14,722 5,150 11,910 4,902

360 3,815 112 3,233360 3,815 112 3,233

11,310 10,110 10,582 9,382

19,340 11,946 15,893 11,116

30,650 22,056 26,475 20,498

(4,258) (3,247) (3,871) (3,247)26,392 18,809 22,604 17,251

(a) The carrying amount of land and buildings under the cost method is $10,145,000

Freehold land

Accumulated depreciation

Total land and buildings

At fair value

Buildings

At fair value

Total property, plant and equipment

Plant and equipment

At cost


Total plant and equipment

The revaluation surplus net of applicable deferred tax is credited to the asset revaluation reserve included in the equity section in the Balance Sheet.

Consolidated Entity

(c) Valuations

The fair values of freehold land, and buildings on freehold land have been determined by reference to Director and Independant Valuations. Such valuations are performed on an open market basis, being the amounts for which the assets could be exchanged between a knowledgeable willing buyer and knowledgable willing seller in an arms length transaction at the valuation date.

Parent Entity

(b) Assets pledged as security

Included in the balances of freehold land and buildings and plant and equipment are assets over which first mortgages have been granted as security over bank loan (see note 20). The terms of the first mortgage preclude the assets from being sold or being used as security for further mortgages without the permission of the first mortgage holder. The mortgage also requires buildings that form part of the security to be fully insured at all times.

Total written down amount

Fair value

Cost


Projects under construction



Note 16 Property, Plant and Equipment (continued)

2006 2005 2006 2005

Notes $'000 $'000 $'000 $'000

7,796 1,686 7,068 1,686

- 6,110 - 5,382

1,555 - 1,555 - 9,351 7,796 8,623 7,068

2,048 2,136 2,048 2,136

(89) (88) (89) (88)1,959 2,048 1,959 2,048

- 658 - 658

- (123) - (123)

- (535) - (535)- - - -

5,150 4,584 4,902 4,584

7,356 428 4,779 180

- 535 - 535

3,455 - 3,121 -

- (2) - (2)

(1,239) (395) (892) (395)14,722 5,150 11,910 4,902

3,815 - 3,233 -

- 3,815 - 3,233

Transfers to plant and equipment (3,455) - (3,121) - 360 3,815 112 3,233

- 249 - 216

Reconciliations of the carrying amounts of property, plant and equipment at the beginning and end of the current financial year.

Freehold Land

Carrying amount at beginning

(d) Reconciliations

Depreciation expense

Plant and equipment under lease

Additions

Buildings on Freehold land


Revaluation increment



Transfer to Plant and equipment

Plant and equipment


Additions

Transfers from Plant and equipment under lease

Disposals


Projects under construction


Additions

(e) Capitalised borrowing costsBorrowing costs capitalised as projects under construction


Transfers from projects under construction



Notes

2006 2005 2006 2005

$'000 $'000 $'000 $'000

9,897 1,622 1,842 1,622

(4,000) - - - 5,897 1,622 1,842 1,622

Note 18 Deferred Tax Assets

5 1,370 350 783 350

1,370 350 783 350

12,647 6,381 9,300 6,38112,647 6,381 9,300 6,381

Note 19 Trade and Other Payables

CURRENT

Trade Creditors

Goodwill at cost

Accumulated Impairment Loss

Deferred tax assets

Note 17 Intangible Assets


1,402 510 902 - 1,402 510 902 -

20(a) 17,728 5,605 17,728 5,605

2,860 322 699 32220,588 5,927 18,427 5,927

(a) Details of assets pledged as security

NON CURRENT

The bank loans are secured by registered first mortgages over the freehold land and buildings of the consolidated entity.

The Company's banking facility is subject to various specific covenants that are related to the Company's performance. These covenants are monitored closely by management and the Board.

Secured

Bank Loans

Amounts under contact

CURRENT

Secured

Amounts due under contract of sale

Note 20 Borrowings


Notes2005$'000

2006$'000

2005$'000

2 32 - 29

5 1,123 610 1,123 6101,125 642 1,123 639

Parent EntityConsolidated EntityNote 21 Tax Liabilities

CURRENT

Income tax

NON CURRENT

Deferred tax liability

22 (a) 898 728 804 728898 728 804 728

22 (a) 274 221 215 221

1,172 949 1,019 949

141 55 85 55(b) Number of emplyees at year end

NON CURRENTEmployee benefits

(a) Aggregate employee benefits liability

Note 22 Provisions

CURRENT

Employee benefits

2006$'000




2006$'000

2005$'000

2006$'000

2005 $'000

22,304 17,930 22,304 17,93022,304 17,930 22,304 17,930

17,930 12,898 17,930 12,898

- 884 - 884

- 2,397 - 2,397

- 1,250 - 1,250

- 593 - 593

- 102 - 102

2,350 - 2,350 -

275 - 275 -

1,149 - 1,149 -

600 - 600 -

- (194) - (194)22,304 17,930 22,304 17,930

No. No. No. No.

28,845,914 16,864,730 28,845,914 16,864,730

- 2,525,209 - 2,525,209

- 5,327,073 - 5,327,073

- 2,612,000 - 2,612,000

- 1,316,902 - 1,316,902

- 200,000 - 200,000

4,272,728 - 4,272,728 -

550,000 - 550,000 -

2,872,500 - 2,872,500 -

1,500,000 - 1,500,000 - 38,041,142 28,845,914 38,041,142 28,845,914

Consolidated Entity Parent EntityNote 23 Contributed Equity

(a) Issued and paid up capital

38,041,142 (2005 : 28,845,914) Ordinary shares fully paid

(b) Movement in shares on issue

Beginning of the financial year

Shares issued during the year

4,272,728 on 19 July 2005

550,000 on 30 November 2005

2,525,914 on 8 October 2004

5,327,073 on 24 January 2005

2,612,000 on 4 February 2005

1,316,902 on 8 February 2005

200,000 on 21 April 2005

2,872,500 on 9 March 2006

1,500,000 on 3 April 2006

End of the financial yearTransaction costs relating to share issues

(c) Movements in shares on issue

Beginning of the financial year

Shares issued during the year

on 19 July 2005

on 8 October 2004

on 24 January 2005

on 4 February 2005

on 8 February 2005

on 21 April 2005

on 30 Novmber 2005

on 9 March 2006

on 3 April 2006End of the financial year

(d) Share issue

The purpose of each of these issues was to generate funds to be used by the Company to provide working capital and to expand its egg and nutritional snack businesses in line with the Company's strategic plan.

(e) Options

At 30 June 2006, there were 1,310,000 (30 June 2005 : 1,345,000) unissued ordinary shares for which options were outstanding.



Notes

2006 2005 2006 2005

$'000 $'000 $'000 $'000

24 (a) 249 123 249 123

24 (b) 1,154 66 1,154 66

24 (c) (6,620) (140) (5,250) (140)

123 - 123 -

126 123 126 123

249 123 249 123

66 66 66 66

1,555 - 1,555 -

(467) - (467) -

1,154 66 1,154 66

(140) (1,636) (140) (1,636)

(6,480) 1,496 (5,110) 1,496(6,620) (140) (5,250) (140)

Nature and purpose of reserve


Asset revaluation

Retained profits

(b) Asset revaluation


Note 24 Reserves and Retained Profits

The asset revaluation reserve is used to record increments and decrements in the value of non-current assets. The reserve can only be used to pay dividends in limited circumstances.

Revaluation increment due to independent valuation

Balance at end of year

Share option reserve

(a) Share option reserve

This reserve is used to record the value of equity benefit provided to directors as part of remuneration.


Net profit / (loss) attributed to members of Farm Pride Foods LtdBalance at end of year

(c) Accumulated losses

Balance at the beginning of year

Share option expense

Balance at end of year

Tax effect of revaluation increment



2006 $'000

2005 $'000

2006 $'000

2005 $'000

954 550 499 550

2,545 1,680 1,519 1,680

3,499 2,230 2,018 2,230

3,284 2,767 3,284 1,753

469 2,767 469 1,753

1,877 - 1,877 - 938 - 933 -


Later than one year and not later than five yearsLater than five years

Not later than one year

Capital expenditure commitments

Capital expenditure commitments contracted forPlant and equipment purchases

Payable

The property lease is a non cancellable lease with a six year term, with rent payable monthly in advance. Contingent rental provisions within the lease agreement require the minimum lease payments shall be increased with reference to the CPI

(i) Operating leases (non-cancellable)

Minimum lease payments

Not later than one yearLater than one year and not later than five years

Aggregate lease expenditure contracted for at reporting date

Note 25

Capital and Leasing Commitments

Lease expenditure commitments



Notes

2006 2005 2006 2005

$'000 $'000 $'000 $'000

(6,480) 1,496 (5,110) 1,496

1,328 606 981 606

4,002 - 4,002 -

126 123 126 123

- (10) - (10)

(4,743) (425) (5,930) (425)

(522) (1,001) 389 (1,001)

(2,846) (781) (796) (781)

6,266 313 2,919 313

(30) 29 (29) 29

(974) (312) (386) (312)

223 (4) 69 (4)(3,650) 34 (3,765) 34

13,120 463 1,077 463

803 - - -

13,923 463 1,077 463

(2,850) (322) (700) (322)

(2,625) - (275) -

8,448 141 102 141

2,798 466 546 -

Inventories and poultry stock 2,656 - 311 -

Goodwill 8,275 - 220 -

Sundry receivable 194 - - -

- (3) - - 13,923 463 1,077 -

Assets and liabilities held at acquisition date:

Parent Entity

Increase in trade and other receivables

(Decrease)/increase in employee entitlements

(b) Acquisiton of entities

During the year 100% of the controlled entity, ACM Egg business and GO Drew business were acquired.

Increase in trade and other creditors

(Decrease)/increase in income tax payable

Share option expense

Consolidated Entity

Cash outflow

Property, plant and equipment

Tax liabilities

Details of these transactions are :

Purchase consideration

Cash consideration

Amount due under contract of sale

Net cash flow from operating activities

Non Cash items

Depreciation of non current assets

Impairment of assets

Profit on sale of non current assets

Changes in assets and liabilities

(Increase)/decrease in inventory

Increase in other assets

(a) Reconciliation of the net profit after tax to the net cash flows from operations:

Net profit

26. Cash Flow Information

Increase in deferred income tax asset/liability

Other costs capitalised

Consideration in the form of shares

Operating results for the ACM Egg business for the period from 19 July 2005 was a loss of $1,370,400 after tax from revenues of $33,224,000 but before impairment.

The entity (Farm Pride North Pty Ltd) did not trade before this period.



26. Cash Flow Information (continued)

2006 2005 2006 2005

$'000 $'000 $'000 $'000

18,422 10,200 18,422 10,200

398 3,000 398 3,000

18,820 13,200 18,820 13,200

17,728 5,605 17,728 5,605

- - - -

17,728 5,605 17,728 5,605

694 4,595 694 4,595

398 3,000 398 3,000

1,092 7,595 1,092 7,595

Commercial bill

Total facilities

Commercial bill

Letters of credit

Facilities unused at reporting date

Letters of credit

Facilities used at reporting date

(c) Credit standby arrangements with banks

Bank overdraft facilities have been arranged with Westpac Banking Corp with the general terms and conditions being set and agreed annually.

Interest rates are variable and subject to adjustment.

The commercial bill facilities have been arranged to purchase property, plant and equipment and are interest only until 31 December 2006. Principal and interest is payable after that over a total term of ten years.


At reporting date, the following financing facilities had been negotiated and were available :

Commercial bill

Letters of credit



Tra

nsa

ctio

n

2006

2005

2006

2005

2006

2005

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

Egg

sup

ply

72-

952

-(7

9)-

Fee

d su

pply

--

1,

706

-(1

90)

-

A &

R M

oncr

ieff

Pty

Ltd

(M

ark

Mon

crie

ff)R

enta

l of

prem

ises

--

9

-

-

-

Ren

tal o

f pr

emis

es-

-15

3-

-

-

Ren

tal o

f pr

emis

es-

-26

0-

-

-

Egg

Sal

es2,

600

--

-

259

-

Gle

nmar

k D

istr

ibut

ors

Pty

Ltd

(M

ark

Mon

crie

ff)

New

port

Cen

tral

Pty

Ltd

(M

ark

Mon

crie

ff)

A C

Mon

crie

ff &

Son

s (M

ark

Mon

crie

ff)

Syd

ney

Mar

ket E

gg S

uppl

ies

(Mar

k M

oncr

ieff)

Act

ive

pro

du

cer,

Dir

ecto

rs a

nd

maj

or

shar

eold

ers

2005

/200

6

Arg

lem

ane

Pty

Ltd

(M

ark

Mon

crie

ff)

No

te 2

7

Rel

ated

Par

ty D

iscl

osu

res

Bal

ance

Rec

eiva

ble

/ (P

ayab

le)

The

val

ue o

f tra

nsac

tions

and

am

ount

s re

ceiv

able

/ (p

ayab

le)

betw

een

Dire

ctor

s an

d th

eir

rela

ted

entit

ies

and

Far

m P

ride

and

its c

ontr

olle

d en

titie

s.

Rev

enu

eE

xpen

dit

ure

Mr.

Mar

k M

oncr

ieff

thro

ugh

his

rela

ted

entit

ies

prov

ides

feed

and

egg

s to

Far

m P

ride

Foo

ds a

nd it

s co

ntro

lled

entit

ies.

Far

m P

ride

Nor

th P

ty L

td r

ent p

rem

ises

of

rela

ted

entit

ies

of M

r. M

ark

Mon

cri e

ff w

here

its

oper

atio

ns a

re b

ased

.



2006

2005

2006

2005

2006

2005

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

71,0

4341

,826

6,58

86,

431

77,6

3148

,257

71,0

4341

,826

6,58

86,

431

77,6

3148

,257

254

77,6

5648

,261

(6,5

38)

760

456

775

(6,0

82)

1,53

5

(1,3

72)

(322

)

(7,4

54)

1,21

3

974

283

(6,4

80)

1,49

6

(6,4

80)

1,49

6

No

te 2

8

Seg

men

t In

form

atio

n

Rev

enu

e

Sal

es to

cus

tom

ers

outs

ide

the

cons

olid

ated

en

tity

Tot

al s

egm

ent r

even

ue

Non

seg

men

t rev

enue

Una

lloca

ted

reve

nue

Tot

al c

onso

lidat

ed r

even

ue

Res

ult

sS

egm

ent r

esul

t

Una

lloca

ted

expe

nses

Con

solid

ated

ent

ity p

rofit

/(lo

ss)

from

ord

inar

y ac

tiviti

es b

efor

e in

com

e ta

x ex

pens

e

Inco

me

tax

reve

nue

Con

solid

ated

ent

ity p

rofit

/ (lo

ss)

from

or

dina

ry a

ctiv

ities

aft

er in

com

e ta

x ex

pens

e

Net

pro

fit /

(loss

)

The

con

solid

ated

ent

ity h

as th

e fo

llow

ing

busi

ness

seg

men

ts a

nd g

eogr

aphi

cal s

egm

ents

:

Eg

gs

Nu

trit

ion

al S

nac

ksC

on

solid

ated

En

tity

(a)

Pri

mar

y S

egm

ent

Info

rmat

ion

Bu

sin

ess

seg

men

ts



Not

e 28

Seg

men

t Inf

orm

atio

n (

cont

inue

d)

2006

2005

2006

2005

2006

2005

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

50,0

4228

,269

3,97

94,

119

54,0

2132

,388

-

-

54

,021

32,3

88

36,6

4014

,226

294

183

36,9

3414

,40

9

-

-

36

,934

14,4

09

15,6

3110

,353

-

-

15,6

3110

,353

1,32

860

6-

-

1,

328

606

4,00

0-

-

-

4,00

0-

Eg

gs

Nu

trit

ion

al S

nac

ksC

on

solid

ated

En

tity

The

egg

and

nut

ritio

nal s

nack

bus

ines

ses

oper

ate

pred

omin

atel

y w

ithin

Aus

tral

ia.

Sec

on

dar

y R

epo

rtin

g

Geo

gra

ph

ical

Seg

men

ts

Tot

al li

abili

ties

Oth

er s

egm

ent

info

rmat

ion

:

Acq

uisi

tion

of p

rope

rty,

pla

nt a

nd e

quip

men

t, in

tang

ible

ass

ets

and

othe

r no

n cu

rren

t as

sets

Dep

reci

atio

n

Goo

dwill

impa

irmen

t los

s

Tot

al a

sset

s

Lia

bili

ties

Seg

men

t lia

bilit

ies

Una

lloca

ted

liabi

litie

s

Ass

ets

Seg

men

t ass

ets

Una

lloca

ted

asse

ts

Bu

sin

ess

seg

men

ts



No

te 2

9 F

inan

cial

Inst

rum

ents

(a)

Inte

rest

rat

e ris

k

2006

2005

2006

2005

2006

2005

2006

2005

2006

2005

2006

2005

2006

2005

$' 0

00$'

000

$' 0

00$'

000

$' 0

00$'

000

$' 0

00$'

000

$' 0

00$'

000

$' 0

00$'

000

%%

1,45

580

9-

-

-

-

-

-

-

-

1,

455

809

2.0

2.0

-

-

-

-

-

-

-

-

10

,497

5,75

410

,497

5,75

4

1,45

580

9-

-

-

-

-

-

-

-

11

,952

6,56

3

Cas

h

Tra

de a

nd o

ther

re

ceiv

able

s

Tot

al fi

nanc

ial a

sset

s

Wei

gh

ted

av

erag

e ef

fect

ive

inte

rest

ra

te

Fin

anci

al In

stru

men

ts

(i) F

inan

cial

Ass

ets

Ove

r 1

to

5 y

ears

Mo

re t

han

5 y

ears

No

n-i

nte

rst

bea

r in

gT

ota

l Car

ryin

g

amo

un

t as

per

th

e B

alan

ce S

hee

t

The

con

solid

ated

ent

ity's

exp

osur

e to

inte

rest

rat

e ris

ks a

nd th

e ef

fect

ive

inte

rest

rat

es o

f fin

anci

al a

sset

s an

d fin

anci

al li

abili

ties,

bot

h r e

cogn

ised

an

d un

reco

gnis

ed a

t the

bal

ance

dat

e, a

re a

s fo

llow

s:

Flo

atin

g In

tere

st1

year

or

less

rat

e

Fix

ed in

tere

st r

ate

mat

uri

ng

in :



Not

e 29

Fin

anci

al In

stru

men

ts (

cont

inue

d)

Wei

gh

ted

ave

rag

e

effe

cti

ve in

tere

st

rate

Fin

anci

al In

stru

men

tsO

ver

1 t

o 5

ye

ars

Mo

re t

han

5 y

ears

No

n-i

nte

rest

bea

rin

gT

ota

l Ca

rryi

ng

am

ou

nt

as p

er t

he

Ba

lan

ce S

hee

t

Flo

atin

g In

tere

st1

yea

r o

r le

ss

rate

200

6 $

'000

2005

$'

000

2006

$'

000

2005

$'

000

2006

$'

000

2005

$'

000

2006

$'

000

2005

$'

000

2006

$'

000

2005

$'00

020

06$

'000

2005

$'0

0020

06

%20

05

% -

-

-

-

-

-

-

-

-

12

,64

76,

381

12,6

476

,381

-

-

-

-

-

-

-

17

,728

5,60

5-

-

17

,728

5,6

058.

08

.4

-

-

1,

402

510

2,8

6032

2-

-

-

-

4

,262

832

7.8

7.8

-

-

1,

402

510

2,8

603

22

17,7

285,

605

12,6

47

6,38

134

,637

12,8

18T

ota

l fin

anc

ial a

sset

s

(ii)

Fin

anci

al li

abi

litie

s

Pa

yabl

es

Bill

s of

exc

hang

e an

d

pro

mis

sory

not

es

Loan

s ot

her

(b)

Cre

dit

ris

k ex

po

sure

s

The

max

imum

exp

osur

e to

cre

dit r

isk,

exc

ludi

ng th

e va

lue

of a

ny c

o lla

tera

l or

othe

r se

curit

y, a

t bal

ance

dat

e to

rec

ogni

sed

finan

cial

ass

ets

is th

e ca

rryi

ng a

mou

nt o

f th

ose

asse

ts, n

et o

f any

pro

visi

ons

for

doub

tful d

ebts

of t

hose

ass

ets,

as

disc

lose

d in

the

Bal

ance

She

et a

nd N

otes

to th

e F

inan

cial

Sta

tem

ents

.

Con

cent

ratio

ns o

f cre

dit r

isk

The

con

solid

ated

ent

ity d

oes

have

a m

ater

ial e

xpos

ure

to a

sm

all n

umbe

r of

deb

tors

with

in th

e re

tail

food

indu

stry

and

ther

efor

e is

at r

isk

to th

e ex

tent

of f

luct

uatio

ns

with

in th

is in

dust

ry.

(c)

Net

fai

r va

lues

The

net

fair

valu

e of

fina

ncia

l ass

ets

and

finan

cial

liab

ilitie

s ap

prox

imat

es th

eir

carr

ying

am

ount

s as

dis

clos

ed in

the

Bal

ance

She

et a

nd N

otes

to th

e F

inan

cial

S

tate

men

ts.



NOTE 30: RECONCILIATION OF REPORTED AMOUNTS UNDER PREVIOUSAUSTRALIAN ACCOUNTING STANDARDS TO AIFRS

(a) Reconciliation of Total Equity at 1 July 2004

Total equity at 1 July 2004: $’000

As reported under Australian Accounting Standards 11,900

Adjustments relating to recalculation of deferred tax using the balance sheet method at 30 June 2004 (572)

Total equity at 1 July 2004 as restated under AIFRSs 11,328

(b) Reconciliation of Operating Profit after Tax for the year ended 30 June 2005

Operating profit after tax for the financial year to 30 June 2005: $’000

As reported under Australian Accounting Standards 1,567

Share-based payments earned during the year (123)

Goodwill on consolidation adjustments

• Reversal of amortisation for the year 90

Deferred tax adjustment for the year (38)

Operating profit after tax as restated under AIFRS for the year ended 30 June 2005 1,496

(c) Reconciliation of Total Equity at 30 June 2005

Total equity at 30 June 2005 $’000

As reported under Australian accounting standards 18,499

Goodwill on consolidation adjustments

• Reversal of amortisation for the year 90

Deferred tax adjustment for the year (38)

Restatement of total equity at 1 July 2004 (572)

Share-based payments earned during the year (123)

Share option reserve 123

Total equity at 30 June 2005 as restated under AIFRS 17,979



Note 31 Impact of Adopting Australian Equivalents of International Financial Reporting Standards (AIFRS)

The adoption of AIFRS has not resulted in any material adjustments to the cash flow statement.

(a) Share based payments

Under AASB 2 shared based payment, the Company will be required to determine the fair value of equity settled transactions and recognise an expense in the Statement of Financial Performance. Share based payments to Directors and other employees (such as the grant of options under an Employee Share Option Plan) will also be expensed under AIFRS.

On first time adoption of AIFRSs, retained earnings at 1 July 2004 and reported results for the financial year to 30 June 2005 have been adjusted for all share based payments granted after 7 November 2002, which do not vest prior to 1 January 2005.

(b) Goodwill

Goodwill on consolidation has been recalculated to derecognise intangible assets acquired that do not meet the indentifiability criteria under AIFRS, and to recognise deferred tax liabilities at the acquisition date under the balance sheet method.

In accordance with AASB 1, amortisation of goodwill ceases on first time adoption of AIFRS at 1 July 2004. The carrying amount of goodwill as previously reported under AGAAP at 30 June 2004 is subject to impairment testing from that date.

(c) Impairment of assets

Under AIFRS the recoverable amount test under the previous AGAPP is replaced by impairment testing whereby the recoverable amount is determined as the higher of fair value less costs to sell and value in use. Value in use incorporates the use of discounted cash flows.

(d) Income taxes

Under AIFRS a balance sheet approach has been adopted under which temporary differences are identified for each asset and liability rather than accounting for the effect of timing and permanent differences between taxable and accounting profit. A future income tax benefit is recognised for tax losses where their realisation is considered probable.

On first time adoption of AIFRS, adjustments to the provision for deferred tax have been recognised for asset revaluations and foreign currency exchange provisions.

Note : 32

Company details

The registered office of the Company is:

Farm Pride Foods Ltd. 551 Chandler Road Keysborough, Victoria 3173 Australia


Director’s Declaration

Directors’ Declaration

The Directors declare that the financial statements and notes set out on pages 20 to 52 in accordance with the Corporations Act 2001:

(a) comply with Accounting Standard and the Corporations Regulations 2001 and (b) give a true and fair view of the financial position of the consolidated entity as at 30 June 2006

and of its performance as represented by the results of its operations and its cash flows, for the year ended on that date.

In the Directors’ opinion there are reasonable grounds to believe that Farm Pride Foods Ltd. will be able to pay its debts as and when they become due and payable.

This declaration has been made after receiving the declarations required to be made by the Chief Executive Officer and Chief Financial Officer to the Directors in accordance with sections 295A of the Corporations Act 2001 for the financial year ending 30 June 2006.

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

Zelko Lendich Executive Director

27 September 2006Melbourne


Independent Audit Report to the Members of Farm Pride Foods Ltd.

Scope

We have audited the financial report of Farm Pride Foods Ltd. and controlled entities for the financial year ended 30 June 2006 comprising the Directors’ Declaration, Income Statements, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows and notes to the financial statements. The financial report includes the consolidated financial statements of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

The Company’s Directors are responsible for the financial report. We have conducted an independent audit of this financial report in order to express an opinion on it to the members of the Company.

Our audit has been conduced in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial report is free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with Accounting Standards and other mandatory professional reporting requirements in Australia and Corporations Act 2001 so as to present a view which is consistent with our understanding of the Company’s financial position and performance as represented by the results of their operations and their cash flows.

The audit opinion expressed in this report has been formed on the above basis.

Audit Opinion

In our opinion, the financial report of Farm Pride Foods Ltd. and its controlled entities is in accordance with :

(a) the Corporations Act 2001, including : i. giving a true and fair view of the Company’s financial position as at 3- June

2006 and of its performance for the financial year ended on that date; and ii. complying with Accounting Standards in Australia and the Corporations

Regulations 2001; and (b) other mandatory professional requirements in Australia.

PITCHER PARTNERS

Terry J Benfold Partner27 September 2006

Melbourne

Independent Audit Report to the Members of Farm Pride Foods Ltd.


ASX Additional Information


Additional information required by the Australian Stock Exchange Ltd. and not shown elsewhere in this report is as follows. The information is current as at 27 September 2006

(a) Distribution of equity security

The number of shareholders, by size of holding, in each class of share are :

No of shareholders No of shares

1 - 1,000 92 43,2471,001 - 5,000 145 448,0865,001 - 10,000 99 783,07210,001 - 100,000 179 6,230,883100,001 and over 41

556

The number of shareholders holding less than a marketable parcel of shares are : 50 8,626

30,589,908

38,095,196

(b) Twenty largest shareholders

The names of the twenty largest holders of quoted shares are :

Listed ordinary shares

No. held1 GPG NOMINEES PTY LTD 7,265,408 19.07%2 WEST COAST EGGS LIMITED 4,384,408 11.51%3 AC MONCRIEFF & SONS PTY LTD 4,272,728 11.22%4 AAA EGG COMPANY PTY LTD 2,690,423 7.06%5 MONCRIEFF PROPERTIES PTY LTD 1,500,000 3.94%6 ARDROY SECURITIES PTY LTD 1,000,000 2.63%7 MR ZELKO LENDICH & MRS SUE LENDICH 667,000 1.75%8 MRS BARBARA HIRSCHOWITZ 572,965 1.50%9 ANZ EXECUTORS & TRUSTEE 568,896 1.49%10 HENSMAN NOMINEES PTY LTD 557,000 1.46%11 GO DREW PTY LTD 550,000 1.44%12 A & R MONCRIEFF PTY LIMITED 420,000 1.10%13 MRS BARBARA HIRSCHOWITZ 358,695 0.94%14 MR THEO VERSTEDEN & 341,051 0.90%15 MR GEORGE SCAUNICH 323,694 0.85%16 MR TOMASSO MONTALTO & 316,861 0.83%17 MR MARIO BOZZO & 308,940 0.81%18 LEMPRIERE (AUSTRALIA) PTY LTD 299,999 0.79%19 UBS WEALTH MANAGEMENT 289,050 0.76%20 MRS GILLIAN HAMILTON YORK 269,999 0.71%

26,957,117 70.76%

Percentage of Ordinary shares


(c) Substantial shareholders

The names of substantial shareholders listed in the holding Company’s register.

No. heldGPG NOMINEES PTY LTD 7,265,408WEST COAST EGGS LIMITED 4,384,408AC MONCRIEFF & SONS PTY LTD 4,272,728AAA EGG COMPANY PTY LTD 2,690,423MONCRIEFF PROPERTIES PTY LTD 1,500,000

(d) Voting rights

The voting rights are set out in Article Number 10 of the Company’s Articles of Association. In summary, voting by or on behalf of members at a meeting shall be by show of hands or upon poll exercised by one vote for each fully paid ordinary share held or proportionate to the amount paid on each partly paid ordinary share held.

(e) Unquoted securities

A total of 1,310,000 share options are on issue.

(f) Stock Exchange listing

Quotation has been granted for all the ordinary shares of the Company on all members Exchanges of the Australian Stock Exchange Limited.
