Ridley coRpoRation annual RepoRt 2008

RIDLEY ANNUAL REPORT 2008

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Ridley Corporation manufactures and markets salt, stockfeed and animal feed supplements. Its two Australian businesses are Ridley AgriProducts, the country,s leading supplier of stockfeed, and Cheetham Salt, Australia,s largest producer and refiner of salt.

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2Fiveyearsummary

4 CHairmaN’srevieW

5maNaGiNGDireCTOr’srevieW

8 summaryOFOPeraTiONs

10 FiNaNCiaLrevieW

14 riDLeyaGriPrODuCTs

16 CHeeTHamsaLT

18 riDLeyiNCaNDLaNDDeveLOPmeNT

20 susTaiNaBiLiTyrevieW

24BOarDOFDireCTOrs

26COrPOraTeGOverNaNCerePOrT

29remuNeraTiONrePOrT

39DireCTOrs’rePOrT

42auDiTOr’siNDePeNDeNCeDeCLaraTiON

43FiNaNCiaLrePOrT

89DireCTOrs’DeCLaraTiON

90 iNDePeNDeNTauDiTOr’srePOrT

91 sHareHOLDeriNFOrmaTiON

iBC COrPOraTeDireCTOry

riDLeyCOrPOraTiONLimiTeDaBN33006708765

COrPOraTeDireCTOryriDLeyCOrPOraTiONLimiTeDABN 33 006 708 765

COrPOraTeOFFiCeaNDreGisTereDOFFiCeLevel 10, 12 Castlereagh Street Sydney NSW 2000 Australia Telephone 02 8227 6100 Facsimile 02 8227 6002 Email secretary@ridley.com.au

riDLeyaGriPrODuCTsPTyLTDABN 94 006 544 145

HeaDOFFiCeLevel 4, 565 Bourke Street Melbourne VIC 3000 Australia Telephone 03 8624 6500 Facsimile 03 8624 6505

CHeeTHamsaLTLimiTeDABN 81 006 926 487

HeaDOFFiCeLevel 4, 565 Bourke Street Melbourne VIC 3000 Australia Telephone 03 8624 6500 Facsimile 03 8624 6505

General Manager A L Speed

riDLeyiNCreGisTereDOFFiCe34 Terracon Place Winnipeg Manitoba CANADA R2J4G7 Telephone 1 (204) 956 1717 Facsimile 1 (204) 231 2402

riDLeyiNCOPeraTiONs424 North Riverfront Drive Mankato MN 56002-8500 USA Telephone 1 (507) 388 9400 Facsimile 1 (507) 388 9415

President and Chief Executive OfficerS J VanRoekel

The Ridley 2008 annual report is printed on Mohawk Opaque, an environmentally responsible paper manufactured under strict environmental management systems with Elemental Chlorine Free (ECF) pulps sourced from sustainable, well managed forests combined with 10% Post consumer waste.

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Ridley,s businesses

Ridley AgRiPRoducts produces a range of world-class, high performance animal nutrition products for the beef, dairy, pig, poultry, horse, sheep, pet food and aquaculture industries. Major brands include Barastoc, Rumevite, Cobber and Ridley Aqua-Feed.

cheethAm sAlt supplies a range of food, industrial, chemical and agricultural markets throughout Australia, Asia and the Pacific. Major brands include Mermaid, Kooka, Crown and Saxa (through its 49% owned associate Salpak).

Ridley Inc is shown as discontinued operations and as a business held for sale. As the business was held for the entire year, all results discussed are on a comparative basis to the previous year.

2008 featuRes• Reached an agreement to settle Canadian legal case

• Operating earnings before interest and tax of $60.1 million up 10%

• High/volatile raw material prices

• Strategic review

– Decision to sell Ridley Inc

– Restructure of Ridley AgriProducts

– Identified land development opportunities

– Corporate restructure

$60.1

The resulTs for 2005 To 2008 are reporTed under aIfrs, whIle Those prIor To 2005 are reporTed under prevIous accounTIng sTandards

* Before sIgnIfIcanT ITems

7.00c$26.8

ebit*

$MIllIOnoperating profit*

$MIllIOndividends per share

CentS

08 07 06 05 04

60.1

54.6 59

.7

53.4

47.3

08 07 06 05 04

26.8

25.6 27

.7

30.7

20.5

08 07 06 05 04

7.00

7.00

7.00

6.50

5.75

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5 year summary

$,000 2008 2007 2006 2005 2004

OPeRatinG Results

Sales revenue 1,546,649 1,439,826 1,258,675 1,153,872 1,179,348 Other revenue 1,995 3,960 5,074 4,770 8,714 earnings before interest, tax, depreciation and amortisation (eBItDA)* 80,042 77,327 81,493 72,922 70,776 earnings before interest and tax (eBIt)* 60,126 54,636 59,683 53,361 47,278 net interest expense/finance charge 16,738 14,144 13,867 9,876 10,720 Operating profit before tax* 43,388 40,492 45,816 43,485 36,558 tax expense 11,604 10,738 12,087 7,776 11,828 net profit before significant items 31,784 29,754 33,729 35,709 24,730 Minority interest (MI) 4,952 4,115 6,040 5,012 4,240 net profit before significant items after MI 26,832 25,639 27,689 30,697 20,490 Significant items – net of tax and MI (16,327) (2,966) – 9,272 (2,790)net profit after tax and significant items 10,505 22,673 27,689 39,969 17,700

finanCial POsitiOn

Ridley shareholders’ funds 320,519 335,797 338,197 305,461 319,049 Minority interest 48,925 52,433 55,873 45,968 49,573 total assets 803,502 788,524 776,909 715,992 657,490 total liabilities 434,058 400,294 382,839 364,563 288,868 Funds employed 554,131 551,098 561,351 502,323 467,096

Key RatiOs

net debt/eBItDA (times)* 2.5 2.2 2.1 2.3 1.7 eBItDA/net interest (times)* 5.0 5.8 6.3 8.0 6.6 net debt/shareholders’ equity 53.9% 44.3% 43.5% 46.7% 33.5%Return on shareholders’ funds* 8.2% 7.6% 8.6% 10.5% 6.4%

OtHeR infORMatiOn

Dividends per share (cents) 7.00 7.00 7.00 6.50 5.75 eBItDA per share* (cents) 26.8 26.5 29.4 26.9 26.4 net tangible asset backing per share (cents) 91.0 98.3 100.9 93.5 104.4 earnings per share* (cents) 9.0 8.8 10.0 11.3 7.7 number of ordinary shareholders 7,040 7,859 8,610 9,572 11,075 employees 2,063 2,117 2,115 2,142 2,064

ridley Inc is shown as discontinued operations and as a business held for sale. as the business was held for the entire year, all results discussed are on a comparable basis to previous years.* Before significant items

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Operating ebit

$15.0 million

volume 1.6 million tonnes

operating ebit

$27.9 million

volume1.4 million tonnes

Ridley agriProducts

Ridley inc

operating ebit $MIllIOn

volume MIllIOn tOnneS

05

06

07

08 15.0

18.4

15.9

15.6

04 7.0

05

06

07

08 1.61

1.82

1.69

1.56

04 1.43

volume1.2 million tonnes

Operating ebit

$24.8 million

Cheetham salt

operating ebit $MIllIOn

volume MIllIOn tOnneS

05

06

07

08 24.8

23.3

23.1

19.0

04 19.6

05

06

07

08 1.22

1.16

1.20

0.64

04 0.50

operating ebit $MIllIOn

volume MIllIOn tOnneS

05

06

07

08 27.9

20.8

32.5

28.0

04 27.4

05

06

07

08 1.43

1.46

1.51

1.49

04 1.47

operaTIng eBIT excludes sIgnIfIcanT ITems

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operating results this year were in line with expectations at $26.8 million compared to last year’s $25.7 million. however, after one-off items of $16.3 million, the profit was reduced to $10.5 million compared to last year’s $22.7 million.

significant items included costs associated with the canadian legal settlement, the corporate and operational restructure following the strategic review and closure of plants in australia and canada, and the defence of graincorp’s hostile takeover bid.

cheetham salt’s continued implementation of its three-year strategic plan resulted in further improvements, with earnings up 6%. ridley agriproducts’ earnings declined by 18% as a result of reduced demand, primarily in the beef and sheep sectors, and losses in our northern mills operations and supplements business. ridley Inc – now categorised as a business held for sale – increased earnings by 54% in us dollar terms and 34% in australian dollars.

directors declared a final dividend of 3.50 cents per share which is unfranked, bringing the total dividend for the year to 7.00 cents, the same as last year.

a key event for ridley this year was the agreement reached in february with the plaintiffs in the Bse class action lawsuits filed against ridley Inc and the canadian government in four provinces.

while still subject to finalisation, the prospect of a settlement being reached, coupled with the transformation of our senior management team, left us free to concentrate on a strategic review, more

details of which are included elsewhere in this report.

soon after the results of that review were announced, graincorp made an unwelcome and opportunistic bid for ridley, which was judged by the Board as providing little value for shareholders. we successfully defended the bid, albeit at a cost of $1.7 million to shareholders and an ill-timed and unfortunate diversion for the senior management team.

now that it is behind us, we are more resolutely focused than ever on improving shareholder returns and will continue to implement our strategy to achieve this.

over the next 12 to 24 months, the agricultural sector and agribusiness will need to become actively involved in the emissions trading debate. There are a number of issues yet to be resolved and better information is required on such topics as soil carbon sequestration and the holistic approach that needs to be taken to measuring agricultural emissions.

we note with disappointment the collapse of the doha talks. once again, freeing up world trade in agriculture is proving to be an illusion. until trade tariffs and farming subsidies are cut in the us and europe, australian farmers will continue to face disadvantages in export markets.

clearly this has been a year of considerable change, starting with the departure of matthew Bickford-smith in december and the retirement of sandy murdoch in april. after a comprehensive global search which considered both

internal and external candidates, John murray was appointed managing director and chief executive officer. John has extensive experience in agribusiness and manufacturing, and brings a strong track record in operational leadership and change management.

I would like to take this opportunity to thank matthew Bickford-smith and to recognise Ian wilton’s contribution in steering the company in the interim and the role he played in the company’s strategy development. Ian has been appointed finance director and has joined the Board as an executive director. other Board changes during the year included the appointment of two new directors, John spark, formerly managing partner of ferrier hodgson in melbourne, and patria mann, a former partner at Kpmg. Their extensive experience and skill set bring an additional dimension to the Board. finally, warm thanks to Bob lotze, who has retired after 10 years on the ridley Board. his wise counsel, in particular as chair of the audit committee, has been much appreciated and we wish him well in his future endeavours.

with these appointments and the graincorp bid behind us, the Board and management can now focus on delivering the strategic initiatives to strongly position ridley for the future.

john S keniry chairman

We are more resolutely focused than ever on improving shareholder returns and will continue to implement our strategy to achieve this

chairman,s review

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despite challenging market conditions in some sectors, a corporate and operational restructure, the distraction of a takeover bid and widespread changes at senior management level, ridley’s underlying operating performance in the year was solid, except for some weaker results in ridley agriproducts. as the chairman has indicated, a key milestone for the company, from both a cost and management perspective, was the settlement in february this year of the canadian legal case which has to some extent held us back over the past few years.

under the settlement, ridley Inc agreed to pay c$6 million into a plaintiffs’ settlementtrust fund. while ridley Inc remains a participant in the ongoing litigation as plaintiffs continue their claims against the canadian government, the settlement agreement effectively capped our exposure to the claims made by the plaintiffs to c$6 million.

The terms of settlement have received judicial approval in Quebec and have been provisionally approved by the court in ontario. final settlement of the case is expected in early 2009.

with the case almost behind us, the focus of the company is now clearly on delivering the outcomes of the strategic review we announced in may this year. The review, which involved the Board and the entire senior management team, culminated in three principal outcomes: the decision to sell our shareholding in ridley Inc, a move to aggressively address underperforming businesses in ridley agriproducts and the implementation of a strategy to unlock significant unrealised value in our landholdings.

sAle of Ridley incThe sale of our 69% interest in our canadian listed subsidiary, ridley Inc is, of course, subject to receiving satisfactory offers. as we have indicated in the past to shareholders, we believe there

are attractive industry rationalisation opportunities available for this business that have the potential to create shareholder value. however, it is difficult for ridley corporation to support and facilitate these opportunities in a funding and strategic sense. we have appointed cIBc world markets and gresham to advise on the sale of the business.

AddRessing undeRPeRfoRming Assetsdespite strong performances from some business units, ridley agriproducts’ earnings were negatively impacted by unsatisfactory results from our northern mills operations and our supplements business.

actions are underway to improve these business units’ financial performance to ensure they generate returns appropriate for a public company. as part of this process, we closed the clifton feed mill in Queensland in august 2008 and reduced the overhead costs associated with servicing the mills in this region. we also announced the closure of the rockhampton and wondai mills.

In addition, we have simplified the structure and operations of our supplements business. This led to the closure of the northam manufacturing facility in western australia in may.

further rationalisation and efficiency improvements saw the closure of our underutilised colac plant in victoria.

ReAlisAtion of lAndholdingsThrough cheetham salt, ridley owns significant landholdings located near urban areas. These potentially represent attractive residential and commercial land development opportunities. while we are currently using the landholdings for salt production, this could be relocated to alternative sites without interrupting supply.

over the years we have reviewed opportunities to realise the value of certain cheetham salt sites. so while the thinking behind this option is not new, we have now taken the decision to explore alternatives to unlock their inherent value. These tracts of land are near the coast and could potentially be converted into development sites. we have entered into an agreement with delfin lend lease to undertake a joint study over the next 12 months. This includes investigating the possibility of relocating part of the dry creek salt field near adelaide to create a residential and mixed-use development. This would require the relocation of some of our production to ensure supply to penrice, our major customer.

This is an exciting opportunity that at this early stage has considerable local support. we chose to work with delfin lend lease because of their excellent track record of delivering award winning developments in conjunction with the south australian government.

the focus of the Company is now clearly on delivering the outcomes of the strategic review we announced in May this year, which involved the board and the entire senior management team

managing director,s review

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opportunities to realise the potential of a number of other sites are also being progressed.

we anticipate that entering into arrangements with development partners, obtaining rezoning and development consents and relocating existing salt production will happen progressively over the next several years.

Ridley AgRiPRoductsThe poor performance in our supplements business was exacerbated by unseasonably wet conditions in the north of the country, which further impeded the sales of beef supplement blocks, and the poor operating performance at a newly commissioned supplements facility.

as indicated, we have taken steps to stem losses and return this business and our northern mills operations to profitability. however, plant closures resulted in a one-off asset impairment and restructuring charge of $5.9 million after tax, which has been recognised as a significant item in this year’s accounts.

These factors, plus a decline in feed volumes, particularly in the dairy, beef and sheep sectors as a result of favourable pastoral growth conditions, the scarcity and high prices of raw materials, a smaller herd size and water availability in northern victoria, held back the overall level of earnings.

The costs associated with high raw material prices have had a major impact on the business this year. This not only applied to grain prices but ingredients

across the board. earlier in the year, high prices and a shortage of grain generally made procurement difficult. That eased somewhat with the larger than anticipated sorghum crop in the summer, and since year end prices have eased further with the expectation that there will be a reasonable winter crop this coming season.

These negative impacts were partially offset by increased margins, the excellent performance of our purchasing group and a strong performance from our aqua-feed business.

The high raw material prices put a strain on our balance sheet to the extent that we had to fund significantly increased working capital during the year. The challenge in the coming year will be to increase returns to offset the ongoing costs of increased working capital.

The domestic pork sector is a highly cyclical business moving from highs to lows, with the periods of underperformance generally lasting for relatively short periods. This has been a tough year for pork producers. The sector was impacted by low-cost import competition, high grain prices and input costs, and lower product prices. These conditions resulted in a contraction of the national sow herd, with numbers reducing by approximately 16%, industry consolidation and some pig farmers leaving the sector altogether. although this process is still ongoing, we are seeing signs of recovery. once complete, we expect that the australian market will focus predominantly on fresh meat into the local market and move away from exports and processed products for the domestic market.

despite these tough conditions, ridley’s volumes into the sector remained steady, a testament to the quality of our customer base.

our volumes and margins in the poultry sector were relatively stable, thanks to strong demand, which allowed producers to remain viable and healthy and in a position to pass on increased ingredient costs to their customers.

as mentioned, growth in the dairy sector was constrained by input prices, water availability and a consequent smaller national herd. while the herd is still recovering from the drought of the last few years, high milk prices provide every incentive for producers to keep producing. dairy is a sector that is expected to see significant growth and solid prices over the next three to five years because of strong global demand for dairy products, coupled with a lack of supply. ridley’s mills are well positioned to take advantage of this growth.

cheethAm sAlt cheetham salt has continued to progress its strategic plan which has seen it upgrading facilities and reducing the number of sites from which it operates. overall, progress is on track, with the remaining major projects being the upgrade of the Bajool refinery, the transfer of hide salt production from corio to sea lake in victoria and the new refinery in Indonesia. although it is expected that the majority of this capital expenditure will be completed this year, the benefits will be realised in future years.

overall earnings were up by 6%. sales to the soda ash industry were down due to planned maintenance shutdowns at customer facilities, but this was offset by improved margins and a significant increase in swimming pool salt sales.

managing director,s

review

the coming year will see a continued strong cost focus in both australian businesses

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sales to the Queensland stockfeed sector, like our supplements business in ridley agriproducts, suffered as a result of the challenging market conditions.

The Indonesian operation continued to improve margins, while profits from cheetham’s joint venture operations, principally the salpak salt marketing business in australia and dominion salt in new Zealand, were up on last year.

costswe have undertaken a significant downsizing of the corporate office, ultimately removing some $3 million of costs annually. we are now taking the blow torch to overheads in the rest of the business and have employed external consultants to examine the entire cost structure of ridley agriproducts.

outlooklooking forward, the prospects of a reasonable season in australia should put some downward pressure on grain prices and provide relief from the very high feed costs our customers have been experiencing. notwithstanding improved domestic conditions, the expectation is that grain prices will remain relatively high, particularly while major countries overseas have biofuel incentive programs in place.

The outlook for the pig and dairy sectors is improving, while poultry volumes are expected to remain relatively stable. The benefits of the operational restructure will improve earnings, as will improved seasonal conditions in the beef sector, although cattle numbers remain down. In cheetham salt, sales and marketing initiatives are improving results, and we are confident that the field and refinery upgrades will continue to progress as planned.

In anticipation of the sale of ridley Inc and the need for me to be closer to the australian operations, we have restructured the executive management team and now have a flatter reporting structure. The coming year will see a continued strong cost focus in both australian businesses. The intention of the review of overheads currently underway is to not only cut costs, but also simplify and streamline processes.

The company has to date been strongly focused on production. while this remains important, we are aiming to shift to a more sales and customer focused orientation that will allow us to explore opportunities for improving service, while at the same time delivering better returns on our assets.

from an organisational cultural perspective, we are placing a renewed focus on developing people to their fullest potential, while at the same time emphasising the importance of results and accountability. This has not been an easy year, either from an internal or external perspective, and I would like to take this opportunity to thank staff across our three businesses for their efforts.

we have many excellent people in ridley and believe that with the right development policies in place and a strong focus on the strategic and cost initiatives we have detailed in this report, we can dramatically improve outcomes in our businesses and deliver better returns to shareholders.

john murray managing director and chief executive officer

the intention of the review of overheads currently underway is to not only cut costs, but also simplify and streamline processes

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summary of operations

PeRfORManCe suMMaRyRidley aGRiPROduCts

CHeetHaM salt • earnings up 6% to $24.8 million before significant items

• volume up 6%

• sales up 5% to $95.3 million

• pool salt sales volume up 22%

• earnings down 18% to $15.0 million before significant items

• volume down 12%

• sales up 11% to $742.3 million

• aqua-feed sales volume up 26%

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summary of operations

• Improved margins

• strong performance from aqua-feed

• lower ruminant volumes

• northern mills/supplements losses

• high/volatile raw material prices

featuRes

• continuing growth in Indonesia

• Increased sales of swimming pool salt

• lower Queensland stockfeed sales due to depressed beef sector

PROGRess aGainst taRGets Key ObjeCtives tHis yeaR• safety – lTIfr of 14.34 (29.94 in 2007),

well below target of 20 and sIfr of 59.62 – above target of 50

• aqua-feed’s strong performance driven by growth in salmon and kingfish sectors

• poor operating performance at wacol facility meant expected benefits not realised

• review of underperforming business units resulted in operational restructure, closure of northern region mills and simplified supplements business

• products and brands rationalised and all product and presentation standardised

• all sites now monitoring and tracking water consumption and majority have lodged formal water management plans with local/state authorities

• safety – lTIfr of 21.17 and sIfr of 65.29, above targets of 10 and 44

• Implementation of two-tier incident investigation system to improve root cause analysis and reduce injuries

• certification to as4801 for all cheetham salt sites obtained

• field and refinery upgrades well underway

• harvesting at port alma field to provide capacity to serve growing Queensland market

• approval of new Indonesian refinery at the port of cigading in west Java

• conduct overhead review

• streamline processes to improve agility and reduce costs

• address need for additional capacity for aqua-feed business

• capitilise on expected growth in dairy sector, realise benefits of new liquids facilities

• Implement new erp system

• eliminate losses in supplements and northern mills businesses

• continue strategic plan rollout

• upgrade Bajool refinery

• Transfer hide salt refining operation from corio to sea lake in victoria

• close corio office and consolidate victorian offices into shared facility with ridley agriproducts in melbourne

• complete Indonesian refinery

• Implement new erp system

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financial review

dividends declared totalled 7.00 cents per share, which is unchanged from last year. the final dividend of �.50 cents per share was unfranked

ridley’s net profit for the year ended 30 June 2008 was $10.5 million, compared to $22.7 million last year. net profit before significant items was $26.8 million compared to $25.7 million last year.

as a result of the strategic review announced in may 2008 a number of one-off costs were incurred. most notably these included impairment and restructure costs associated with the closure or sale of a number of mills in ridley agriproducts’ northern region. These, together with the provision for the canadian legal claims settlement and costs associated with the restructuring in canada and the defence of graincorp’s takeover bid, are included in significant items.

operating eBIT was $60.1 million, up 10% on last year’s $54.6 million. cheetham salt’s earnings continued to improve in line with its strategic plan assumptions. The business recorded an increase in eBIT to $24.8 million from $23.3 million last year. cheetham’s joint venture operations (principally the salpak salt marketing business in australia and dominion salt in new Zealand) were up $0.6 million on last year at $6.9 million.

ridley agriproducts’ eBIT at $15.0 million was down 18% compared to $18.4 million last year in response to losses incurred in its supplements business unit and

reduced demand, primarily in the beef sector, which impacted the division’s northern region mills.

eBIT from ridley Inc’s operations in north america (now categorised as a business held for sale), was up 54% in us dollar terms to us$24.9 million compared to us$16.2 million last year. In australian dollars, translated earnings were $27.9 million, 34% higher than last year’s $20.8 million. australian dollar earnings were held back by the weaker us dollar throughout the year, which reduced earnings by $4.1 million on translation compared to last year. dividends were unchanged from last year at 7.00 cents per share.

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eARnings PeRfoRmAncenet operating profit before significant items for the year was $26.8 million. This was 4% higher than the $25.7 million recorded last year.

2008 2007 2008 2007 $’000 $’000 $’000 $’000

Proforma including business held for resale As stated in financial report

Continuing operations

sales revenue 1,546,649 1,439,826 sales revenue 837,608 758,128

operating eBIT 60,126 54,636 net profit from operations 15,916 16,572

less: net finance costs 16,738 14,144 significant items 10,415 1,081

operating profit before tax 43,388 40,492 net profit 5,501 15,491

less: Tax expense 11,604 10,738 Discontinued operations

minority interest 4,952 4,115 sales revenue 709,041 681,698

net profit from operations 26,832 25,639 net profit from operations 10,916 9,067

significant items after tax and minority interest 16,327 2,966 significant items 5,912 1,885

net profit 10,505 22,673 net profit 5,004 7,182

Total net profit 10,505 22,673

significAnt itemsCanadian legal claim settlementridley Inc reached a settlement agreement with the plaintiffs in the Bse class action lawsuits filed against ridley Inc and the government of canada in four provinces of canada, subject to court approval. under the settlement agreement, ridley Inc will pay c$6 million into a plaintiffs’ settlement trust fund and cap its exposure to the claims made by the plaintiffs to this amount. ridley Inc recorded the cost in the first half of the year. In australian dollars, this impacted earnings by $6.8 million or $4.6 million after tax and minority interest. The settlement agreement was approved by the Quebec court in may 2008 and was provisionally approved by the court in ontario in september 2008. finalisation is expected in early 2009.

impairment of assets and restructure costsThe restructuring of operations and the closure of plants in australia and canada resulted in asset impairment charges and restructure costs of $12.5 million (or $8.3 million after tax and minority interest). following a full review of operations, it was decided to sell or close three feed mills in Queensland and restructure the supplements business. This, together with associated overhead cost reductions, is expected to lead to improved results in the coming year. The closure of one salt refinery was also announced as part of the ongoing strategy to consolidate operations to fewer sites. The restructuring in canada is complete and the benefits are flowing through to earnings.

Corporate restructurecosts associated with the severance of the previous chief executive officer, who ceased employment with ridley in december 2007, together with other corporate restructuring and strategic review costs, totalled $3.6 million ($2.2 million net of tax).

Takeover defence costs costs associated with the defence of the hostile takeover bid launched by graincorp in may 2008 totalled $1.7 million ($1.2 million net of tax).

finAnce costsfinance costs for the year increased over 2007 due to higher average interest rates and higher levels of net debt. net interest expense (including borrowing costs) for the year was $16.7 million, an increase of $2.6 million over last year. Borrowing costs for the year averaged 7.6%, 0.8% higher than last year.

dividendsdividends declared totalled 7.00 cents per share, which is unchanged from last year. The final dividend of 3.50 cents per share was unfranked. The interim, also 3.50 cents per share, was 50% franked. Both interim and final dividends last year were 50% franked.

There will be minimal franking capacity in 2009. franking capacity will improve from 2010 onwards depending on the timing and outcome of the ridley Inc sale.

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income tAxIncome tax expense for the year was lower than last year, mainly due to a decrease in earnings. Total income tax of $5.9 million averaged 32% of pre-tax earnings (including significant items), compared to $8.8 million and 25% last year.

cAsh flowBefore working capital movements, the group incurred a net cash outflow of $9.4 million for the year, compared to an inflow of $10.3 million last year. working capital increased by $18.0 million. The lower level of cash generated was due to lower earnings, payments for capital expenditure (including a small acquisition), which increased from $28.7 million last year to $35.8 million, and net finance costs ($0.4 million higher).

net debt levels increased by $27.4 million during the year. new net cash borrowings of $30.6 million were partly offset by favourable currency movements of $3.2 million on the translation of us and canadian denominated debt to australian dollars.

woRking cAPitAlworking capital levels at year end were $130.7 million compared to the previous year’s $112.7 million. The increase reflects the impact of generally higher raw material costs. In australia for example, wheat and barley prices were approximately 42% and 22% higher at year end than they were in June 2007.

BAnking fAcilitiessince year end ridley’s global financing facility, which is provided by a consortium of australian and international banks, was extended until 31 July 2010. facility limits total $311 million (equivalent) and together with covenant requirements are unchanged. The interest margin has increased by approximately 40 basis points.

BAlAnce sheet And key RAtios

2008 2007 $’000 $’000

gross bank and other debt 204,726 186,814

less: cash 5,480 14,976

net debt 199,246 171,847

Total liabilities/total tangible assets 58.5% 55.1%

net debt/shareholders’ equity 53.9% 44.3%

net debt/eBITda (times)* 2.5 2.2

eBITda/net interest (times)* 5.0 5.8

return on shareholders’ funds* 8.2% 7.6%

return on funds employed* 9.6% 8.6%

earnings per share (cents)* 9.0 8.8

* Before significant items

financial review

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exchAnge RAteoverseas earnings are translated into australian dollars at average exchange rates for the year.

The balance sheet is translated at the year end rate. major exchange rates applicable were as follows:

2008 2007

average rates a$ : us$ .8934 .7798 a$ : c$ .8894 .8815Year end rates a$ : us$ .9631 .8483 a$ : c$ .9778 .9038

issued cAPitAl movementsduring the year, 7.2 million shares were issued for a consideration of $7.9 million under the dividend reinvestment plan.

finAnciAl Risk mAnAgementThe Board of directors, through management, seeks to minimise risk to our earnings and assets in the following ways:

• Interest rate risk: at 30 June 2008, approximately $115.2 million of gross debt was subject to fixed rates of interest for periods up to three years. The level of cover is reviewed with the aim of maintaining a spread of interest rate maturity periods.

• currency risk: wherever possible, ridley borrows in the currencies in which it operates. exposure is thereby limited to the net asset investment in any particular country. ridley has borrowings in australian, us and canadian dollars. movements in currency, as they affect the translation of the overseas net assets, are transferred to the foreign currency translation reserve. major transactional exposures are covered at the time a commitment is made or when the liability occurs.

• commodity risk: ridley purchases a range of raw materials on a global and domestic basis. approval levels and the forward purchasing of raw materials are monitored and restrictions placed on the length and amount of forward purchases.

insuRAnceridley maintains a comprehensive insurance program covering a range of risk categories. The major risk classes for which cover is obtained in the insurance market include Industrial special risks (property), general & product liability and directors & officers liability. Insurance premium costs for the coming year are marginally lower than for the year ended 30 June 2008.

ian wilTon finance director

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initiatives have been taken to improve and rationalise underperforming assets and identify growth opportunities. since year end, benefits have become evident and should translate to improved earnings in the coming year

ridley agriproducts earnings of $15.0 million were down 18% compared to $18.4 million last year. a 12% decline in feed volumes, particularly in the dairy, beef and sheep sectors, was partly offset by increased margins. poultry and pig feed volume levels remained largely unchanged despite the pig sector being under significant economic pressure.

The aqua-feed business recorded a strong performance. The impressive increase in earnings over last year was driven largely by the growth in the salmon and kingfish sectors in australia. The expected continued expansion of this market not only provides excellent growth potential for the business, but adds some urgency to our efforts to address the need for additional capacity.

The decline in beef numbers, mainly in Queensland, and another year of unseasonal conditions, resulted in a decrease in volumes in our supplements

business. a poor operating performance at our newly commissioned $6.8 million wacol facility meant the benefits we expected would flow to earnings this year were not realised. This, added to the volume decline, was reflected in a weaker result compared to last year.

as mentioned, initiatives have been taken to improve and rationalise underperforming assets and identify growth opportunities. The benefits of these initiatives have, since year end, already become evident and should translate to improved earnings in the coming year. seasonal conditions are also improving, although cattle numbers in feedlots remain down. This is as a result of high feed costs, making our exports less competitive, and the re-entry of us beef into our two biggest export markets, Japan and south Korea.

The decline in cattle numbers was felt throughout the business, impacting also on our northern mills, and leading to a serious

review of these operations as highlighted earlier in the report. once again, we are already seeing improvements in this business.

our southern mills are well positioned to supply the expected continuing growth in the poultry sector.

champion liquid feeds, the liquid feeds joint venture with westway corporation, recorded a disappointing result due to a delay in the construction of our Braybrook and mackay plants, which prevented new market entry opportunities. also contributing to the weaker result were the depressed beef sector, ongoing drought in some regions and rapidly rising farm costs. In the coming year, our focus will be on capitalising on the expected growth in the dairy sector and realising the benefits of the new Braybrook and mackay plants.

ccd animal health and nutrition, which will be restructured and become part of our purchasing arm in the coming year,

ridley agriproducts

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ns2008 HiGHliGHts• earnings down 18% and feed volumes down 12% • Feed volume decline partly offset by increased margins• Strong performance from aqua-Feed business• initiatives underway to improve and rationalise underperforming assets

1 aTherTon 2 TownsvIlle 3 rocKhampTon 4 dalBY 5 narangBa 6 ToowoomBa 7 wacol 8 TamworTh

9 Taree10 weTherIll parK11 corowa12 mooroopna 13 maffra14 paKenham15 dandenong16 gunBower

17 sT arnaud18 BendIgo19 corIo20 Terang21 murraY BrIdge22 wasleYs

KeymanufacTurIng and dIsTrIBuTIondIsTrIBuTIon onlY

austRalia feeds ,000 tOnneS

2008 2007

1

2

4 56 7

89

10

1112

131415

1617

1820

2122

3

19

achieved a lift in earnings, while packaged products’ results were down over last year as a result of margin pressure. To build our presence in this competitive market, we have rationalised our products and brands and standardised all product presentation and information, from bag, marketing and point of sale materials to delivery to customers.

on the people front during the year, a series of training programs were rolled out throughout ridley agriproducts. These programs, directed at front line managers and focusing particularly on fast tracking leadership and management, were well received. also included in the training was critical incident management, covering scenarios such as serious injury, product recall and environmental incidents.

To further strengthen our management capability, we have established a program to identify emerging leaders and are putting together development plans that will help them realise their potential.

ridley agriproducts

BeeF

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y Pig

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322.

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.6

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36.7

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.9

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8

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the new refinery will allow us to take advantage of the growing indonesian market and enable us to meet the more stringent standards increasingly being required by indonesian food manufacturers

cheetham salt recorded another year of solid performance and steady improvement, with operating earnings up 6% over last year to $24.8 million, largely attributable to continuing earnings growth in Indonesia, the robust sales of swimming pool salt and higher earnings from salpak in australia and dominion salt in new Zealand.

volumes to the Queensland stockfeed market were lower as a result of the decline in beef numbers.

The rollout of the strategic plan initiated a year ago continued apace, with its focus on finding more efficient ways of operating the business. The recruitment of a new sales and marketing manager, a renewal of the sales force and a keener customer focus, are already bearing fruit in improved results. since the appointment of John murray as ceo, andrew speed has been

promoted from his sales and marketing position to the role of general manager of cheetham salt.

To provide us with the capacity to serve the growing Queensland market, we are once again harvesting at the port alma field, located between rockhampton and gladstone.

The salt field and refinery upgrades highlighted in the strategic plan are well underway. work on upgrading the sea lake refinery has commenced. once complete, this will allow for the transfer of all hide salt production from corio to sea lake. at the same time, we have taken the decision to close the corio office and consolidate the victorian offices into a shared facility with ridley agriproducts at Bourke street, melbourne. This will occur gradually over the next 12 months, with the corio site anticipated to close towards the end of the 2009 financial year.

moving the head office to a shared facility in melbourne not only allows us to take advantage of common resources and functions, it also provides us with a wider talent pool from which to recruit in the future.

earnings from our Indonesian operation continued to increase with improved margins and increased sales to the food, hide and textile sectors.

during the coming year, we expect the new refinery under construction at the port of cigading in west Java to be completed. The port is the deepest in Indonesia and handles a wide range of bulk cargoes. The new refinery will allow us to take advantage of the growing Indonesian market. It will also enable us to meet the more stringent standards increasingly being required by Indonesian food manufacturers.

cheetham salt

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ns2008 HiGHliGHts• Solid performance and steady improvement, with operating earnings up 6% • Continued growth in indonesia, mainly through margin improvements• robust sales of swimming pool salt in australia • higher earnings from Salpak in australia and Dominion Salt in new Zealand• Volumes to the queensland stockfeed market lower due to decline in beef numbers

KeyproducTIon and refInerYrefInerYsales offIceproducTIon

salt ,000 tOnneS

2008 2007

FooD

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Pool

SToCkF

eeD

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ChemiC

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740.

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95.8

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1

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910

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1415

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1 Bowen 2 BaJool 3 porT alma 4 BrIsBane 5 sYdneY 6 waKool 7 melBourne 8 lara and moolap

9 sea laKe10 drY creeK11 prIce12 lochIel13 KevIn14 esperance15 fremanTle16 cIlegon, IndonesIa

17 mounT maunganuI,

new Zealand18 laKe grassmere,

new Zealand 19 ToKYo, Japan

1

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8

910

11

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17

18

7

To this end, we further expanded the development of Indonesian produced salt by working with local salt farmers to improve the way they make salt. our aim is to encourage them to run their salt fields in such a way as to produce salt equivalent to our australian product, so we can reduce our reliance on imports into Indonesia. To date our efforts in this area have been very successful.

we have invested heavily in our people during the year to improve the skills set throughout the business. we are also in the process of a major overhaul of our information systems. This saw the implementation of a new enterprise resource planning system in cheetham salt in september 2008. In addition to providing timely and up-to-date information, it will allow significant efficiency gains to be made.

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the decision to sell our shareholding in Ridley inc and the implementation of a strategy to unlock significant unrealised value in our landholdings were two key outcomes of our strategic review

Ridley incas already mentioned in earlier pages of this report, we are currently pursuing the sale of our 69% interest in our canadian listed subsidiary ridley Inc. Therefore, it is now shown on the balance sheet as a business held for sale. however, since it was held for the entire financial year, we have included a brief overview of its performance.

ridley Inc’s earnings were up 54% in us dollar terms, before significant items, due largely to a strong performance from the us feeds operations. In australian dollars this translated to a 34% increase, although the weaker us dollar reduced earnings by $4 million on translation compared to last year.

The us feeds operations performance was largely attributable to improved margins resulting from good positions in generally rising ingredient markets (mainly vitamins

and trace minerals) and a continuation of the trend of changing product mix from high volume, low margin complete feeds towards higher margin products like supplements and premixes. This, together with strict cost controls, offset a small decline in volumes overall.

In canada, a restructuring program implemented at the end of the first half of the year saw the business return to profitability. The canadian operations continue to be impacted, however, by the strength of the canadian dollar and high feed costs which are impeding production economics for beef and pork producers. volumes were 5% lower than last year.

lAnd develoPment ridley owns significant land near urban areas which we are keen to sell or develop. we are currently exploring options and

expect to realise the value of this surplus land over the next several years.

To this end, in may this year, we entered into a strategic alliance with delfin lend lease to investigate the option of creating a residential and mixed-use development on the dry creek site in south australia, possibly housing up to 20,000 people. with delfin’s substantial experience in delivering developments of this scale in that state, we believe this is a positive first step in unlocking the land’s value for shareholders.

while the current book value of the development land is $1.8 million, property valuer savills has provided an indicative value in excess of $80 million, which equates to 27 cents per ridley share.

This valuation includes deductions for risk and remediation and the estimated cost of moving salt production to alternative

ridley inc and land development

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ridley owned land and doing so in a way that would not impact on cheetham salt’s profitability. It is also subject to the land being suitable for residential or commercial use and the necessary approvals being obtained.

a key future decision for ridley is to determine whether, having obtained relevant approvals, we exit the landholdings at the earliest feasible time, or whether we capture additional value by participating further in the property development process.

ridley inc and land development

ridley has entered a strategic alliance to investigate the option of part of the dry creek site, 12 km from adelaide, being developed as a residential and mixed-use area, possibly housing up to 20,000 people.

2008 HiGHliGHtsRidley inc • earnings up 54% in uS dollar terms before significant items• Strong performance from uS Feeds operations• rising ingredient markets, mainly premixes and vitamins• Canada restructured during the year

lAnd develoPment • Surplus land valued in excess of $80 million• options being explored to realise value of land

ADELAIDE

DRY CREEK

ELIZABETH

KeyadelaIde urBan area

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sustainability review

sustainability for ridley means proactively addressing the environmental, social and governance issues that are material to our business.

sAfety as a manufacturing company, it goes without saying that safety is critical to the way we do business. our safety focus, which begins at Board and executive management level, is underpinned by three elements: embedding the right behaviour, developing and implementing a safety management system, and finding engineering solutions for the physical safety hazards that, as in any manufacturing environment, we face.

safety performance is rigorously monitored, reported to management and the Board and is a component of individual performance appraisal and management remuneration. The key measures we use to assess safety performance are lost time injury frequency rate (lTIfr), serious injury frequency rate (sIfr), and duration rate (dr).

The lTIfr is calculated on the number of injuries incurring lost time divided by hours worked multiplied by 1,000,000, the sIfr on the total medical treated injuries and lost time injuries divided by hours worked

multiplied by 1,000,000, while the dr is based on the number of days lost divided by number of lost time injuries.

last year the Board approved a three- year target for both ridley agriproducts and cheetham salt for a lTIfr of less than 5 and a sIfr of less than 20. a range of performance indicators were also introduced for the first time across ridley during the year. The indicators were designed to measure progress against actions in the three broad areas already mentioned: improving our physical infrastructure and safety management systems and driving behaviour change. These indicators were developed in a consultative process throughout the two australian businesses and will be reviewed in the coming year. although they were used for monitoring progress, they were not used for reporting purposes this year. rather, the businesses reported against the safety action plan.

The overall results for 2008 were as follows: the lTIfr was 9.83, down from the June 2007 result of 15.4, representing a welcome 37% decrease in incidents reported. The sIfr for the year at 40.58 over last year’s 40.42 is acknowledged as being too high. The dr was 33.89, compared to last year’s 17.5, due primarily to a fatality in north america.

while the overall lost time injury result for the year is pleasing, there remains significant opportunity to reduce the total injury rate within the company. This will continue to be a focus for ridley in the coming year, with even greater effort and commitment being provided by the management team.

The key focus this year has been to embed the safety programs across the businesses. safety leadership was delivered to a broad group of managers and there was an increased concentration on management accountability and proactive hazard and risk assessment.

ridley agriProductsThe lTIfr for ridley agriproducts for the year was 14.34 compared with last year’s 29.94. This represents a 50% reduction in lost time injuries, which is an encouraging performance and is well below the target of 20. concern remains about the total number of injuries being recorded, with the sIfr ending at 59.62 – above the target of 50.

Our safety focus is underpinned by three elements: embedding the right behaviour, developing and implementing a safety management system, and finding engineering solutions for physical safety hazards

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ridley agriProducts 2008 result target

lTIfr 14.34 20

sIfr 59.62 50

dr 15.95 <6

To engage employees and their families in the building of a safety culture, a competition was run to devise a logo for ridley agriproducts’ “a safe working environment” program. The logo has been used on all written and promotional material to reinforce the safety focus.

The management of dust at our mills remains a high priority for ridley agriproducts due to the potential for dust explosions. In addition to the implementation of a number of engineering solutions, a review of previously identified hazards is being conducted to determine if further engineering work is required.

a revised safety action plan was discussed with key managers in July, subsequent to year end, to ensure the business meets its 2009 target and achieves the overall goal of providing a safe workplace for all our employees and contractors. The revised plan addresses additional key safety risks, with the focus in the coming year being on the premix handling areas and finding solutions in this area.

Cheetham SaltThe lTIfr for cheetham salt for the year was at 21.17 compared with last year’s 19.03, representing a 10% increase in injuries. The sIfr was 65.29, compared to last year’s 58.83, again representing an increase in overall injuries.

cheetham salt 2008 result target

lTIfr 21.17 10

sIfr 65.29 44

dr 22.26 18

due to the operational and management changes at cheetham salt and the renewed emphasis on reporting and treating injuries appropriately, it was expected that the number of injuries would increase. with the implementation of a new two-tier incident investigation system, root cause analysis is expected to improve. This, combined with the focus on overall safety initiatives, should result in a reduction of injuries in the coming year.

last year, cheetham salt adopted the widely recognised and best practice benchmark standard as4801. By year end, we had obtained certification to as4801 for all cheetham salt sites.

a “work well live well” program was introduced during the year at both our sea lake and corio sites. The program appears to have been well accepted by staff, with an 85.7% participation rate.

ridley inca fatality in october last year at our site in Beloit, Kansas resulted in a duration rate of 107 over last year’s 36.0. while investigations by the local safety authority following the incident did not provide any conclusive cause, its report included recommendations for improvements, which have been implemented.

ridley inc 2008 result target

lTIfr 3.42 4.95

sIfr 21.49 19.95

dr 107 no target set

Throughout the year the focus for ridley Inc has been to continue to embed good safety practices in the company and to prevent injuries from occurring in the workplace. a survey of employees was conducted in 2008, with results demonstrating that staff believe that safety is now part of their day to day work practices which is a pleasing result. In 2009, ridley Inc has set itself the target of zero lost time injury’s.

further throughout 2009 ridley Inc will continue to build their safety systems and also their physical environments. The strong culture of management accountability for safety continues to be reinforced throughout the organisation with managers at all levels participating in all aspects of the safety program.

Targets 2009 safety targets for the operating divisions for the coming year are in line with the three-year targets approved by the ridley corporation Board last year and are as follows:

cheetham ridley targets salt agriProducts ridley inc

lTIfr 7 10 0

sIfr <30 <30 <19

dr 10 5 <30

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sustainability review

while the australian targets are approved by ridley’s Board in australia, ridley Inc’s targets are set and approved by the ridley Inc Board.

safety objectives and action plans have also been reviewed to set the priorities for the australian businesses in the coming year. These predominantly relate to progressing actions and programs that were begun during the year in line with continuing to build on the three elements already mentioned.

new incident reporting guidelines have been finalised and were implemented on 1 July 2008. These guidelines will bring ridley agriproducts and cheetham salt into line with the united states occupational safety and health administration guidelines and will allow more accurate benchmarking with other australian companies and with the industry. The reporting guidelines are not aimed at changing ridley’s approach to management of injuries, but rather to provide a more accurate picture of safety performance compared to other companies.

enviRonmentenergy The federal government’s national greenhouse and energy reporting Bill (nger), introduced in august 2007, establishes a national reporting framework for carbon and energy consumption. To comply with this legislation, which has now

been enacted, ridley will be required to report in 2011. during 2009 the focus will be on capturing accurate data to facilitate the reporting requirements. compliance with this legislation will be critical, as it will be the basis for the carbon pollution reduction scheme, which will develop baseline data and ultimately the targets for emissions reduction.

ridley is also required to report its energy usage under the energy efficiency opportunities act, which came into effect in 2007. This federal government legislation applies to all companies who use more than 0.5 petajoules (pJ) of total energy. The legislation requires any company that reaches the 0.5pJ threshold to conduct audits to assess and identify potential opportunities to reduce energy use. energy use across the business includes electricity, lpg, natural gas and diesel.

In australia, total energy use in 2008 for cheetham salt and ridley agriproducts was 0.65pJ.

during the year, we conducted the first energy audit at our pakenham site and are currently evaluating opportunities for improvements that were identified. In december 2008, in accordance with the energy efficiency opportunities legislation, we will be publishing on our website what was evaluated, the number of opportunities for improvements identified, what we are implementing as a result and what reduction this will result in.

These audits not only provide a systematic way of identifying improvements to reduce energy within the company and minimise our environmental impact, they also provide cost saving opportunities in the face of expected energy price rises.

In 2008, cheetham salt and ridley agriproducts maintained the level of electricity consumption per tonne produced, achieving no further reductions over last year. however, in 2009 it is expected that these will be achieved following mill closures, resulting in improved mill efficiency.

Carbon pollution reduction schemeridley has been actively involved in discussions about the implications of a carbon pollution reduction scheme in the agricultural sector. we participated in the australian farm Institute round Table on agriculture and emissions trading and continue to play an active role in the debate surrounding the position the sector will take. we are also studying the potential impacts of the scheme on our business, particularly in terms of identifying opportunities to reduce energy use.

waterwe continue to look for opportunities to reduce our water usage. as detailed in last year’s report, both australian businesses have implemented water management plans at some of the key sites and have identified a number of solutions to reduce water consumption at the mills and refineries.

reducing potable water use was a focus for most sites during the last year. all sites are now monitoring and tracking their water consumption. many have formal water management plans that have been lodged with local/state authorities. some of the initiatives being used or investigated are: the collection, treatment and use/reuse of rainwater, stormwater run-off and boiler blowdown, particularly given the significant amount of water used through our boilers.

We participated in the australian farm institute Round table on agriculture and emissions trading and continue to play an active role in the debate surrounding the position the sector will take

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ridley agriproducts’ Tamworth mill was required to prepare and submit a water management plan in line with level 5 water restrictions, targeting a 30% reduction in water use. The plan was completed and submitted. all but one action has been implemented and a reduction of more than 30% was achieved. we continue to report to the Tamworth regional council on a quarterly basis.

over the coming year we will evaluate whether the solutions identified at the Tamworth mill can be implemented at any of our other sites as part of our plan to further reduce water usage.

wasteridley agriproducts and cheetham salt continue to reduce waste through improved efficiencies at refining and feed mill sites and by diverting as much waste as possible into recycling streams. The two businesses do not generate a significant amount of waste; however, both demonstrate a real commitment to their recycling programs.

Site regenerationon 17 april this year, 120 local indigenous trees were planted at ridley agriproducts’ gunbower mill in victoria as part of a regeneration project of the adjoining billabong. The plantings, which involved office and mill employees, landcare and the gunbower primary school, had the added benefit of greening the entrance to the mill carpark. all trees are growing well.

Sustainability plansubsequent to year end, ridley is evaluating consultants to assist in the development of a business wide program focused on sustainability initiatives, including employee engagement. This had been scheduled to take place during the year but had to be postponed due to competing priorities.

In addition, a business wide sustainability strategy will be implemented. as a part of this strategy, we will evaluate opportunities to reduce waste and paper at the administration sites, reduce general waste in our manufacturing processes, reduce energy consumption and increase efficiencies.

PeoPlewith cheetham salt’s corio site scheduled to close in 2009, work is progressing with the gordon Institute of Tafe in victoria to provide retraining options for corio based production employees to better equip them to find alternative jobs in the region. a $2,500 allowance has been allocated for each employee. following consultation

with the institute, cheetham was also able to secure a government grant for additional training under a “skill up” scheme for employees about to be made redundant. all employees spent time with Tafe facilitators and staff discussing their options and chose courses that were not only of interest but also provided potential employment opportunities in the region. This training has commenced and will continue in the coming year.

workplace english language and literacy support and funding was provided to assist the training of employees where necessary.

awardsduring the year, ridley agriproducts won the victorian Training award in the category of group victorian employer of The Year. This is a significant achievement and recognises the business’ continued commitment to improving the training offered to our employees.

ridley also received a letter of commendation from the equal opportunity for women in the workplace agency (eowa) for our commitment to maintaining and improving equal opportunity for women in the workplace. The letter commended ridley for its “clear commitment to equity for women and for all employees, which will continue to provide a diverse, flexible and engaged workforce”. Key achievements, it said, were the substantial number of women included in our leadership and management program, the formation of

a women’s leadership network and the flexibility of work afforded to both men and women to support them in managing illness or family responsibilities.

ridley agriproducts’ human resources manager, marie Brusco, was also nominated for an eowa award in the category of diversity leader for the advancement of women in leadership. This is an individual award and recognises marie’s contributions.

ridley received further recognition of our commitment to improving the vocational skills in rural communities when we were featured in the 2008 Tafe Innovation showcase.

for detail regarding ridley’s approach to governance, please refer to the corporate governance report on page 26.

Ridley agriProducts, tamworth mill reduced its water usage by more than �0%

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indePendent chAiRmAn, Age 65

a director of the company since 1990 and chairman since march 1994, John formerly held executive positions with csr limited and goodman fielder limited. he is presently chairman of first opportunity fund limited and a director of nsw epa, as well as a number of other corporations and statutory bodies. he is a past president of the australian chamber of commerce and Industry.

other current listed company directorshipsfirst opportunity fund limited from 1998mikoh corporation ltd from 1994Biosignal limited from 2004

Former listed company directorships in the last three yearslatrobe magnesium ltd from 2003 to 2005australian Biodiesel group limited from 2005 to 2008

jOHn s KeniRyam BSc PhD FTSe FraCi FaiCD

RiCHaRd j leeBeng (Chem) (hons) ma (oxon) FaiCD

indePendent dePuty chAiRmAn, Age 58

a director since 2001, rick is chairman of salmat, an independent director of csr, newcrest mining, wesfarmers Insurance (comprising lumley general Insurance and wesfarmers federation Insurance), cash services australia and australian rugby union. he is also president of the nsw council and a national Board member of the australian Institute of company directors. he was formerly chief executive of nm rothschild australia group and prior to that spent 16 years in the csr sugar division.

other current listed company directorshipssalmat limited from 2002csr limited from 2005newcrest mining limited from 2007

Former listed company directorships in the last three yearsnil

PatRia M MannBec Ca maiCD

indePendent non-executive diRectoR, Age 46

appointed in march 2008, patria is currently a non-executive director of first state superannuation Trustee corporation, The doctors’ health fund limited and perpetual superannuation limited. she was formerly a partner at Kpmg. patria brings strong audit, investigation, risk management and compliance experience to the Board. patria is a member of the Institute of chartered accountants and the Institute of company directors.

other current listed company directorshipsnil

Former listed company directorships in the last three yearsnil

board of directors

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assOCiate PROfessOR andReW l vizaRd

BVSc (hons) mPVm

mAnAging diRectoR And chief executive officeR, Age 57

John murray joined ridley as ceo of cheetham salt in december 2005 and was appointed managing director and chief executive officer of ridley corporation limited in may 2008. John was previously group general manager – International operations with elders limited. prior to that he was managing director of the south australian based grain business ausBulk ltd until its merger with aBB grain ltd in september 2004. John has an extensive background of senior management experience in the food, industrial and agribusiness sectors.

other current listed company directorshipsnil

Former listed company directorships in the last three yearsnil

indePendent non-executive diRectoR, Age 59

appointed in January 2008, John is a director of newcrest mining limited. John was the managing partner of ferrier hodgson melbourne and a global partner of arthur andersen melbourne. he was a director and chairman of the audit committee of anl limited and Baxter group limited. he has an extensive background in accounting, auditing and financial analysis.

other current listed company directorshipsnewcrest mining limited from 2007

Former listed company directorships in the last three yearsBaxter group limited 2006 to 2007

ian WiltOnFCCa (uk) FaiCD

finAnce diRectoR, Age 56

Ian wilton joined ridley corporation limited in January 2001 as chief financial officer and was appointed finance director in may 2008.

Ian has extensive experience in international agribusinesses and other commodity based businesses and has worked for a number of companies in senior positions in australia, the united states and europe. he is also a director of ridley Inc, a 69% owned, canadian listed, subsidiary.

other current listed company directorshipsnil

Former listed company directorships in the last three yearsnil

jOHn M sPaRK BComm FCa

indePendent non-executive diRectoR, Age 50

a director since 2001, andrew is a senior consultant and former director of the mackinnon project at the university of melbourne. he is currently chairman of phosphagenics ltd, a board member of animal health australia and a trustee of the australian wool education Trust. he has previously served on the board of several statutory bodies, scientific organisations and companies.

other current listed company directorshipsphosphagenics ltd from 1999

Former listed company directorships in the last three yearsnil

comPAny secRetARy, Age 50

since joining ridley in 1994 paddy has held a number of senior finance positions. he was appointed company secretary in april 2004.

G P (Paddy) WattsBComm

jOHn MuRRay

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Ridley coRPoRAtion And the BoARd ARe committed to Achieving the highest stAndARds of coRPoRAte goveRnAnce

BoARd ResPonsiBilitiesThe Board is responsible for the overall governance of the company, including setting the strategic direction, establishing goals for management and monitoring the achievement of these goals. directors are accountable to shareholders for the company’s performance. The management of the business is delegated to the managing director, as designated by the Board, which has defined the limits of management responsibility. The Board is responsible for appointing and reviewing the performance of the managing director. The Board has established an audit committee, a remuneration and nomination committee and a risk review committee to assist in the execution of its responsibilities. The roles of all Board committees are documented in committee charters which are approved by the Board of directors. The Board has also established a framework for the management of the company including a system of internal control, a business risk management process and the establishment of appropriate ethical standards.

The Board and committee charters are available on the company’s website www.ridley.com.au

comPosition of the BoARdThe names, profiles, qualifications and experience of the directors in office at the date of this report are set out on pages 24 and 25.

The composition of the Board is determined using the following principles:

• The Board should comprise directors with a broad range of expertise both nationally and internationally.

• The Board should comprise a minimum of six directors. This number may be increased where it is felt that additional expertise is required in specific areas.

• The chairman of the Board will be an independent non-executive director.

• The Board will comprise a majority of independent non-executive directors. currently, there are two non-independent directors, the managing director and the finance director.

RemuneRAtion of diRectoRs non-executive directors’ fees are determined by the full Board within the aggregate of $700,000 approved by the shareholders at the annual general meeting in 2003. non-executive directors are not entitled to share options or performance rights, nor do they receive incentive payments. however, they may participate in the employee share acquisition plan by salary sacrifice of their fees. In accordance with current corporate governance guidance, the directors’ retirement scheme was terminated at the october 2003 agm. directors’ accrued entitlements at that date will be paid when they retire.

details of the remuneration of directors during the year are set out in the remuneration report.

BoARd meetingsBoard and committee agendas are structured throughout the year to review company strategy and to give the Board a detailed overview of the performance and significant issues confronting each business unit and to identify major risk elements. The number of meetings held and the attendance details are set out in the directors’ report on page 39.

directors receive detailed financial and operational reports from senior management during the year and management is available to discuss the reports and business issues with the Board. The Board also visits and holds some meetings at the company’s principal operating sites.

indePendent PRofessionAl Adviceeach director has the right to seek independent professional advice relating to their duties and obligations as directors at the company’s expense. however, prior approval of the chairman is required, which is not unreasonably withheld.

RemuneRAtion And nominAtion committeeThe role of the remuneration and nomination committee is to review and make recommendations to the Board on remuneration packages and policies applicable to the managing director, senior executives and directors themselves. This role also includes responsibility for share option schemes, the ridley corporation

long-Term Incentive plan, ridley employee share scheme, employee share acquisition plan and incentive performance packages.

The committee is also responsible for evaluating the Board’s performance; reviewing the size and composition of the Board; assessing the necessary and desirable competencies of directors; reviewing Board succession plans, senior management succession plans and candidates to fill vacancies; and recommending their evaluations to the Board for approval.

The remuneration and nomination committee meets twice a year and as required.

all members of the committee must be independent non-executive directors.

The members of the remuneration and nomination committee during the year were:

J s Keniry Independent chairman

e B Bryan Independent director (resigned 31 october 2007)

r J lee Independent director.

details of the remuneration and nomination committee members’ experience and technical expertise are set out in the directors’ biographies on pages 24 and 25.

tAkeoveR ResPonse committeeIn may 2008 an unsolicited takeover offer was announced by graincorp ltd for ridley. The ridley Board established the Takeover response committee to assist it in responding to the offer.

on 19 may 2008 the Board appointed the following directors to the Takeover response committee:

J s Keniry Independent chairman

r J lee Independent director

J murray managing director

J m spark Independent director

I wilton finance director

Audit committeeBoard policy states that all members of the audit committee must be independent non-executive directors. The role of the committee is to advise on the establishment and maintenance of a framework of internal control and appropriate ethical standards for the

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management of the company and to review the performance and work of the auditors.

The committee makes recommendations to the Board on the appointment of the external auditor. The committee approves the remuneration of the auditor and carries out an annual review of its work and performance. The current auditor of the company is pricewaterhousecoopers. details of the amounts paid for audit and other services are set out in note 26 to the financial report. The committee meets with the external auditor four times a year to discuss matters relevant to its terms of engagement and review any significant disagreements between management and the auditor. In addition, the committee meets with the auditor without the presence of management.

The committee reviews the level of non-audit services provided by the external auditor and ensures that it does not adversely impact on the auditor’s independence. The auditor also provides the committee with written confirmation of its professional independence. The audit partner or senior representative also attends all agms and is available to answer any relevant shareholder questions. The company requires the audit partner be changed at least every five years.

The committee is responsible for the independent whistleblower service that is available to all australian employees.

The committee is responsible for the internal audit program of the company, which is carried out by ernst & Young in australia and is totally independent of the external audit function, though it is designed to complement it. The committee sets and agrees the internal audit program, receives and reviews all internal audit reports and meets with the internal auditor at least twice a year.

The committee also gives the Board additional assurance regarding the quality and reliability of financial information prepared for use by the Board in determining policies or for inclusion in the financial statements.

The members of the audit committee during the year were:

r J lotze Independent director – chairman (resigned 10 June 2008)

p m mann Independent director (appointed chairman 19 June 2008)

e B Bryan Independent director (resigned 31 october 2007)

r J lee Independent director

J m spark Independent director (appointed 19 June 2008).

details of the audit committee members’ experience and technical expertise are set out in the directors’ biographies on pages 24 and 25.

Risk Review committeeThe risk review committee was formed to undertake an ongoing, high level and wide ranging review of the major risk factors facing ridley as a business and to ensure that responsibility for addressing and mitigating the potential impact of such risks was appropriately assigned and actioned.

The committee meets quarterly and as required.

The key responsibilities of the risk review committee are to:

• ensure major business risks are identified and managed appropriately

• review and recommend for approval the annual risk management plan

• review major risk issues (critical events) to ensure they are dealt with appropriately

• review the company’s insurance program and renewal annually

• enhance the understanding and management of risk in ridley.

In addressing its responsibilities the committee:

• reviews the processes employed to identify, control and monitor risks

• reviews progress against the risk management plan and reviews and approves any variations from the risk management plan

• reviews the risk profile of the company

• reviews the work performed by internal and external risk assessment professionals

• discusses with senior executives any potential risk exposures to the business

• reviews the principles and practices undertaken to identify and address risk to ensure that best practices are adopted

• satisfies itself of the effectiveness of the activities undertaken to assess and control risk.

The risk review committee reports to the Board on a regular basis.

The directors who were members of the risk review committee during the year were:

a l vizard Independent director – chairman

m p Bickford-smith managing director (ceased employment 20 december 2007)

J murray managing director (appointed 13 september 2007)

I wilton finance director.

details of the risk review committee members’ experience and technical expertise are set out in the directors’ biographies on pages 24 and 25.

Review senioR mAnAgement PeRfoRmAnceThe Board establishes performance criteria and reviews the performance of the managing director annually. for australian executives the managing director sets performance objectives and reviews performance against those objectives. for north american executives these functions are carried out by the ridley Inc Board and the ridley Inc chief executive officer.

Risk mAnAgementThe company has in place a number of arrangements intended to identify and manage areas of significant business risk. These include: the maintenance of Board committees; detailed and regular budgetary, financial and management reporting; established organisational structures, procedures, manuals and policies; audits (including internal and external, environmental and safety); comprehensive insurance programs and the retention of specialised staff and external advisors. The company also has in place detailed policies and review processes covering commodities hedging, interest rate risk management and foreign exchange.

the enviRonmentThe company aims to ensure that the highest standard of environmental care is achieved and has in place various policies and procedures to ensure that the company is aware of and is in compliance with all relevant environmental legislation.

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corporate governance

report

diRectoRs’ indemnityThe company has entered into a deed of Indemnity Insurance and access (as approved at the 1998 agm) with all directors of ridley corporation limited and with all executives appointed as directors of controlled entities.

The company also has in place a directors and officers liability insurance policy, covering all directors and officers of the company.

The liabilities insured against include costs and expenses that may be incurred in defending civil or criminal proceedings that may be brought against the directors and officers while working in such capacity for the company.

ethicAl stAndARdsIn pursuance of the promotion of high standards of corporate governance, the company has adopted various internal standards and policies, which include additional disclosure of interests by directors and guidelines relating to the dealing in securities by directors and managers. The company also has in place a code of conduct for directors and employees. a copy is available on the ridley website www.ridley.com.au

The code of conduct reflects the standards of behaviour and professionalism required to maintain confidence in the group’s integrity.

The code requires the disclosure of conflicts of interest and, if possible, their elimination. If this is not possible, directors are required to abstain from participation in, and not be present during, any discussion or decision making process in relation to the subject matter of the conflict. each director is personally responsible for the full and proper disclosure to the Board of all related party transactions.

secuRities tRAdingdirectors and officers are only permitted to buy and sell ridley securities when not in possession of price sensitive information and in the one month commencing two days after:

• the annual general meeting

• the announcement of the full year results

• the announcement of the half year results.

a copy of the securities trading policy is available on the ridley website www.ridley.com.au

hedging of Ridley secuRitiesdirectors and senior executives are not permitted to hedge their exposure to ridley securities.

continuous disclosuRe And shAReholdeR communicAtionridley makes timely and balanced disclosures of all material matters regarding the company. all asx releases are posted on the company’s website www.ridley.com.au as soon as they are disclosed to the asx. presentation material used in analysts’ briefings is released to the asx and posted on the company’s website.

continuous disclosure is a standing agenda item for all Board meetings.

coRPoRAte RePoRtingThe chief executive officer and the chief financial officer provide the Board with an Integrity of the financial accounts declaration in accordance with the Best practice recommendations of principles 4 and 7 of the asx corporate governance guidelines as follows:

• that the company’s financial reports are complete and present a true and fair view in all material respects of the financial position and performance of the company and consolidated entity and are in accordance with relevant accounting standards

• that the above statement is founded on a sound system of risk management and internal compliance and controls designed to provide reasonable assurance and which, in all material respects, implements the applicable policies adopted by the Board

• that the risk management and internal compliance and control systems of the company relating to financial reporting objectives are operating efficiently and effectively in all material respects.

The basis for the Integrity of the financial accounts declaration is a comparison of ridley’s risk management framework with the recommendations of the report Internal control – Integrated framework organisations (coso) of the Treadway commission. ernst & Young prepared

this comparison for ridley in august 2004 and re-assessed its compliance in 2008. In 2008 ridley introduced a formal certification policy.

compliance with ridley’s financial risk management and internal control systems is tested on an ongoing basis by a formalised internal audit program, overseen by the audit committee, and supported by reviews of divisional compliance performed by corporate office staff. divisional management also attest to such compliance.

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this RePoRt foRms PARt of the diRectoRs’ RePoRt foR the yeAR ended 30 June 2008. All disclosuRes RequiRed By AAsB 124 RelAted PARties hAve Been Audited.

RemuneRAtion And nominAtion committeeThe remuneration and nomination committee (the “committee”), consisting of up to three independent non-executive directors, advises the Board on remuneration policies and practices generally and makes specific recommendations on remuneration packages and other terms of employment for executive directors, other senior executives and non-executive directors. The committee is also responsible for evaluating the Board’s performance, reviewing Board size and composition, criteria for membership and candidates to fill vacancies.

executive remuneration and other terms of employment are reviewed annually by the committee, having regard to performance against goals set at the start of the year, relevant comparative information and independent expert advice.

RemuneRAtion of diRectoRs And executivesPrinciples used to determine the nature and amount of remunerationremuneration packages are set at levels that are intended to attract and retain directors and executives capable of directing and managing the consolidated entity’s diverse operations and achieving the company’s strategic objectives.

executive remuneration is structured to align reward with the achievement of annual objectives, successful business strategy implementation and shareholder returns.

The overall level of executive reward takes into account the performance of the group over a number of years, with greater emphasis given to the current year. since 2003, the consolidated entity’s profit from ordinary activities after income tax and significant items has fallen by 66%. shareholder wealth has remained unchanged since 2003. shareholder wealth is defined as dividends paid and the increase in share price. since 2002, when the current remuneration structure was fully implemented, incentive payments have fluctuated in line with business performance. In 2008, a number of options issued under the ridley corporation Incentive option plan expired with no benefit to the executives, as the share price performance target was not achieved.

non-executive directorsDirectors’ feesdirectors’ fees were last reviewed with effect from 1 november 2003. The chair of the audit committee and non-executive directors who sit on more than one committee receive additional fees.

The chairman is also provided with an office at the sydney corporate office and secretarial support.

directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically recommended to shareholders for approval. The maximum currently stands at $700,000 as approved at the 2003 annual general meeting.

Retirement allowances for directorsat the 2003 annual general meeting, shareholders approved the termination of the retirement allowance scheme. directors’ accrued entitlements at 31 october 2003 will be paid when they retire.

executivesThe executive pay and reward framework has three components:

• base pay and benefits

• short-term incentives

• long-term incentives.

The combination of these comprises the executive’s total remuneration.

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remuneration report

BAse PAy And Benefitsaustralian executives receive a total employment cost package, which may be delivered as a mix of cash and prescribed non-financial benefits including superannuation at the executive’s discretion. north american executives are paid a base salary plus benefits including motor vehicle, pension and health benefits.

external consultants provide analysis and advice to ensure that base pay and benefits are set to reflect the market for a comparable role. Base pay for senior executives is reviewed periodically to ensure that the executive’s pay is competitive with the market. an executive’s pay may also be reviewed on promotion.

ridley corporation limited and its controlled entities participate in a number of superannuation and pension funds in australia and north america. The funds provide benefits either on a defined benefit or defined contribution basis for employees or their dependants on retirement, resignation, total and permanent disability, death and, in some cases, on temporary disablement.

shoRt-teRm incentivesexecutives are eligible for short-term incentive (sTI) payments based on two components, being the financial performance of the company and individual key performance indicators (KpIs). The sTI is payable in cash after the release of the full year financial results.

each year, appropriate financial targets and KpIs are set to link the sTI plan to the priorities of the company. This includes setting any target and maximum payout under the sTI plan and minimum levels of performance to trigger payment of an sTI.

The financial performance component of the sTI is earned based on the performance against profit targets set at the commencement of the year. profit was selected as the appropriate performance measure for the financial performance component of the sTI, as profit is the key indicator of the success of the company over the short term.

The KpI component of the sTI is earned based on each executive’s performance against their individual KpIs for the year.

for the year ended 30 June 2008, the KpIs were based on group, individual business unit and personal objectives. The KpIs required performance in reducing operating costs and achieving specific targets in relation to return on assets, as well as other key, strategic non-financial measures, including safety.

following the end of the financial year, financial results and each executive’s performance against KpIs are reviewed to determine sTI payments for each executive.

long-teRm incentivesIn the year ended 30 June 2008, executives’ and employees’ long-term incentives were by way of participation in the ridley corporation long-Term Incentive plan, the ridley Inc long Term Incentive program, the ridley employee share scheme and one-off retention plans. These long-term incentive programs align the interests of executives more closely with those of ridley shareholders and reward sustained superior performance.

directors and senior executives are not permitted to enter into any transaction that is designed or intended to hedge their exposure to ridley securities.

cuRRent long-teRm incentive PlAnsridley Corporation long-Term incentive PlanThe purpose of the ridley corporation long-Term Incentive plan is to provide long-term rewards that are linked to shareholder returns. This plan was introduced in october 2006 and replaced the ridley corporation Incentive option plan.

under the ridley corporation long-Term Incentive plan, selected australian-based executives and the managing director and finance director may be offered a number of performance rights (“right”). each right provides the entitlement to acquire one ridley share at nil cost.

rights vest subject to Total shareholder return (Tsr) performance relative to the companies in the asx 100 to 300 (defined at the date of grant). Tsr was selected as the performance measure for the plan due to its alignment with the value created for shareholders. performance is measured over the three-year period from the date of grant. 50% vests if ridley ranks at the 51st percentile, 100% vests if ridley ranks at the 75th percentile or above. There is straight line vesting between the 51st percentile and the 75th percentile. The Tsr of ridley and the comparator companies is measured at the end of the performance period by an independent provider. results are provided to the committee for determination of vesting. To the extent that the performance criteria are met, the rights are automatically exercised to acquire shares. If the performance criteria are not satisfied, the rights lapse.

If ridley is subject to a change of control during the vesting period, the rights may vest to participants at that time, subject to performance testing.

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If a participant ceases employment prior to the end of the vesting period due to retirement, redundancy, permanent disability or death, any unvested rights may vest to participants, subject to performance testing. If a participant ceases employment prior to the end of the vesting period due to resignation, dismissal or any other reason that makes them no longer eligible for the plan under the rules of the plan, any unvested rights will lapse.

The shares to satisfy awards under the plan may be newly issued or purchased on the market.

during the year ended 30 June 2008, 2,119,000 (2007: 450,000) performance rights were issued under the plan.

ridley inc long Term incentive Programeffective 1 July 2003, ridley Inc adopted an incentive plan for certain eligible executives, known as the ridley Inc long Term Incentive program (the “program”). The purpose of the program is to advance the long-term interests of ridley Inc by attracting and retaining key employees and by stimulating the efforts of such employees to contribute to the continued long-term success and growth of the business.

The president and chief executive officer of ridley Inc is responsible, in his sole discretion, for selecting those executives and employees eligible to participate in the program and for administering the program and determining payments.

effective 15 september 2005, the program was amended. performance units are awarded to the executives annually. The performance units are valued at the end of each fiscal year based on the most recent three-year average return on funds employed (other than the 2006 performance units, which were valued on the fiscal year 2006 return on funds employed, and the 2008 performance units, which are valued on the fiscal year 2006 and the fiscal year 2008 average return on funds employed). ridley Inc will redeem performance units three years after their issuance based on such value for cash, subject to certain conditions, such as continuous employment through the program term, provided a threshold return on funds employed is reached. There was no value attributed to the 2008 performance units.

a participant will be entitled to a pro rata incentive payment should their employment be terminated prior to the date payment is made by reason of death, retirement or disability or if their employment is involuntarily terminated by reason of a redundancy.

ridley employee Share Schemeat the 1999 annual general meeting, shareholders approved the introduction of the ridley employee share scheme. under the scheme, shares are offered to all permanent australian employees with a minimum of 12 months’ service, at a discount of up to 50%, financed by an interest-free loan secured against the shares. The maximum discount per employee is limited to $1,000 annually in accordance with relevant australian taxation legislation. dividends on the shares are allocated against the loan. The amount of the discount and number of shares allocated is at the discretion of the directors. The purpose of the scheme is to align employee and shareholder interests. 670,582 (2007: 562,421) shares were issued under this scheme during the year for $374,000 (2007: $320,000). The market value of the shares issued was $671,000 (2007: $647,000). The total loan amount outstanding at 30 June 2008 was $1,254,000 (2007: $1,251,000).

retention paymentsIn light of the canadian legal claims, the Board determined that there is a heightened need for consistency and continuity of senior management. To facilitate his retention, the finance director is entitled to receive two payments equal to 50% of base pay. The first payment was made on 1 June 2007, with the second payment due on 1 June 2009. If the finance director resigns or has his employment terminated for cause prior to 1 June 2009, he will lose his entitlement to the remaining payment. If his employment is terminated by ridley, without cause, the he will be entitled to this payment In full.

ridley Inc has introduced a retention plan for key executives in order to retain their services during the sale process. under the plan, executives will be paid between us$25,000 and us$60,000 at the completion of the sales process whether a transaction proceeds or not.

legAcy PlAnsridley Corporation incentive option Plan The ridley corporation Incentive option plan was approved by shareholders at the 1993 annual general meeting, amended at the 1996 annual general meeting, and subsequently amended by the Board in January 2002. under the Incentive option plan, certain employees and the managing director of the consolidated entity were offered a number of options, each of which represented a right to acquire one fully paid ordinary share in the capital of the company for an exercise price determined at grant.

during the year ended 30 June 2008, no ordinary shares were issued on the exercise of options granted under the plan (2007: 750,000 shares for $703,000, with a market value of $840,000).

The plan was replaced by the ridley corporation long-Term Incentive plan in october 2006.

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ridley inc Stock option Plan under the ridley Inc stock option plan, options to purchase common shares of ridley Inc could be granted to employees, directors and service providers of ridley Inc and its controlled entities and affiliates. The purpose of the ridley Inc stock option plan was to advance the interests of ridley Inc by providing participants with the opportunity of benefiting from increases in shareholder value, thereby more closely aligning their interests with those of the shareholders of ridley Inc.

no ordinary shares were issued on the exercise of options granted under the plan during the year (2007: 35,000 ordinary shares were granted for $208,000, with a market value of $360,000).

The ridley Inc long Term Incentive program has replaced this plan and no further grants will be made under this plan. as at 30 June 2008, there are no options outstanding under the plan.

key mAnAgement PeRsonnelThe following persons were the directors and executives with the greatest authority for the strategic direction and management of the consolidated entity (“key management personnel”) during the financial year and include the five highest paid executives within the group:

name Position

2008

DireCTorS

J s Keniry chairman

r J lee deputy chairman

m p Bickford-smith1 managing director

e B Bryan2 director

r J lotze3 director

p m mann4 director

J murray5 managing director

J m spark6 director

a l vizard director

I wilton5 finance director

exeCuTiVeS

r e frost executive vice president – ridley Inc and president – ridley nutrition solutions

m J hudspith executive vice president – ridley Inc, president – ridley feed operations and president – ridley feed Ingredients

m s mitchell chief financial officer – ridley Inc

a d murdoch7 chief executive officer – ridley agriproducts

a l speed general manager – cheetham salt

s J vanroekel president and chief executive officer – ridley Inc

1 ceased employment 20 december 20072 resigned 31 october 20073 resigned 10 June 20084 appointed 4 march 20085 appointed 7 may 20086 appointed 21 January 20087 ceased employment 7 april 2008

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name Position

2007

DireCTorS

J s Keniry chairman

r J lee deputy chairman

m p Bickford-smith managing director

e B Bryan director

r J lotze director

a l vizard director

exeCuTiVeS

r e frost executive vice president – ridley Inc and president – ridley nutrition solutions

m s mitchell chief financial officer – ridley Inc

a d murdoch chief executive officer – ridley agriproducts

J murray chief executive officer – cheetham salt

s J vanroekel president and chief executive officer – ridley Inc

I wilton chief financial officer – ridley corporation

Service agreementsremuneration and other terms of employment for the managing director, and the chief executive officer of ridley Inc, are formalised in service agreements. each of these agreements provides for the provision of performance related bonuses and other benefits, and participation, when eligible, in the ridley corporation long-Term Incentive plan, the ridley corporation Incentive option plan and the ridley Inc long Term Incentive program. other major provisions of the agreements relating to remuneration are set out below:

J Murray, Managing Director, Ridley Corporation Limited

• term of agreement – three years ending may 2011

• base remuneration, inclusive of superannuation, of $620,000 to be reviewed annually by the remuneration and nomination committee, with base salary increasing by the greater of the percentage increase in cpI and the amount agreed as a result of an independent review

• payment of termination benefit on early termination by the employer, other than for cause, is capped at $620,000

• entitlement to 550,000 performance rights under the ridley corporation long-Term Incentive plan

• incentive bonuses up to 100% of base salary based on the achievement of certain agreed KpIs as approved by the Board

S J VanRoekel, President and Chief Executive Officer, Ridley Inc

• base salary us$307,200 per annum to be reviewed annually by the ridley Inc Board of directors

• agreement ends 30 June 2009

• incentive bonus of up to 75% of salary, based on the achievement of certain agreed KpIs as approved by the ridley Inc Board of directors

• motor vehicle allowance, pension and medical benefits

• payment of termination benefits on early termination by the employer, other than for cause, of two years’ salary.

I Wilton, Finance Director, Ridley Corporation Limitedmr wilton does not have a service agreement, but will be entitled to receive two additional payments, each equal to 50% of base remuneration. The first payment was made on 1 June 2007, with the second payment due on 1 June 2009. If mr wilton resigns or has his employment terminated for cause prior to 1 June 2009, he will lose his entitlements to the remaining payment. If employment is terminated by ridley, without cause, mr wilton will be entitled to the remaining payment in full.

other senior executives are not subject to service agreements and have no fixed term of employment.

Notice periodsThe notice period for terminating employment of key management personnel ranges from six months to two years.

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detAils of RemuneRAtiondetails of the remuneration of each director of ridley corporation limited and each of the other six key management personnel of the consolidated entity, including their personally-related entities, are set out in the following tables.

Directors of ridley Corporation limited

PoST- Share- emPloymenT BaSeD 2008 ShorT-Term BeneFiTS BeneFiTS oTher PaymenTS directors’ movement in Performance fees and retention other leave suPer- rights/ cash salary Bonus Payments Benefits Provisions+ annuation termination oPtions totalname $ $ $ $ $ $ $ $ $

J s Keniry – chairman 139,760 – – 62,080* – 12,579 – – 214,419

r J lee – deputy chairman 106,962 – – – – 9,627 – – 116,589

J murray – managing director1 357,334 302,560 – 999 38,872 98,128 – 47,686 845,579

m p Bickford-smith2 277,217 – 166,193 – – 24,826 1,232,729 (114,535) 1,586,430

e B Bryan3 24,159 – – – – 2,174 – – 26,333

r J lotze4 6,422 – – – – 72,911 – – 79,333

p m mann5 22,496 – – – – 2,025 – – 24,521

J m spark6 30,873 – – – – 2,779 – – 33,652

I wilton1 416,356 133,000 64,491 999 11,355 100,000 – 51,916 778,117

a l vizard 67,890 – – – – 6,110 – – 74,000

* ridley Inc made an ex gratia payment to J s Keniry on his retirement as chairman of ridley Inc1 appointed 7 may 20082 ceased employment 20 december 20073 resigned 31 october 20074 resigned 10 June 20085 appointed 4 march 20086 appointed 21 January 2008

PoST- Share- emPloymenT BaSeD 2007 ShorT-Term BeneFiTS BeneFiTS PaymenTS directors’ movement in Performance fees and retention leave suPer- rights/ cash salary Bonus Payments Provisions+ annuation oPtions totalname $ $ $ $ $ $ $

J s Keniry – chairman 149,540 – – – 13,460 – 163,000

r J lee – deputy chairman 62,011 – – – 51,000 – 113,011

m p Bickford-smith – managing director 623,877 141,700 276,324 49,875 42,385 132,113 1,266,274

e B Bryan 26,333 – – – 52,667 – 79,000

r J lotze 38,532 – – – 45,468 – 84,000

a l vizard 67,890 – – – 6,110 – 74,000

+ movement in annual leave and long service leave provisions

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other key management personnel of the consolidated entity

PoST- Share- emPloymenT BaSeD 2008 ShorT-Term BeneFiTS oTher BeneFiTS PaymenTS movement in Performance salary motor retention leave rights/ Package Bonus vehicle Payments Provisions+ other termination Pension oPtions totalname $ $ $ $ $ $ $ $ $ $

r e frost 256,866 72,564 4,701 33,580 – 23,814 – 42,489 – 434,014

m J hudspith 209,686 122,006 4,833 33,580 – 21,449 – 6,498 – 398,052

m s mitchell 232,309 126,608 6,691 33,580 – 21,629 – 27,586 – 448,403

a d murdoch* 336,208 – – – – 999 538,160 – 3,467 878,834

a l speed 186,730 60,000 – – 18,042 – – – 8,833 273,605

s J vanroekel 343,855 255,003 5,463 33,580 – 21,124 – 10,412 – 669,437

* ceased employment 7 april 2008

PoST- Share- emPloymenT BaSeD 2007 ShorT-Term BeneFiTS oTher BeneFiTS PaymenTS movement in Performance salary motor retention leave rights/ Package Bonus vehicle Payments Provisions+ other termination Pension oPtions totalname $ $ $ $ $ $ $ $ $ $

r e frost 285,714 64,119 6,977 – – 27,319 – 42,530 – 426,659

m s mitchell 258,399 64,119 8,662 – – 26,258 – 38,405 – 395,843

a d murdoch 414,571 173,225 – – 26,833 999 – – 14,651 630,279

J murray 407,800 166,240 – – 18,062 999 – – – 593,101

s J vanroekel 384,712 176,968 8,037 – – 20,026 – 10,864 – 600,607

I wilton 468,970 119,372 – 182,274 2,804 999 – – 17,441 791,860

+ movement in annual leave and long service leave provisions

The salary package may be allocated at the executive’s discretion to cash, superannuation (subject to legislative limits), motor vehicle and certain other benefits.

during the year ended 30 June 2008, 412,000 (2007: nil) performance rights were granted as remuneration to key management personnel.

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remuneration report

executives of ridley Corporation limited

Share- BaSeD 2008 ShorT-Term BeneFiTS PaymenTS movement in Performance salary leave other rights/ Package Bonus Provisions+ Benefits termination oPtions totalname $ $ $ $ $ $ $

m d macKay1 Business development manager 144,797 – – – 159,122 – 303,919

a m mooney corporate risk manager 196,696 49,192 4,968 999 – 8,833 260,688

a d murdoch2 ceo ridley agriproducts 336,208 – – 999 538,160 3,467 878,834

s c myers special counsel 227,230 50,000 16,123 999 – – 294,352

g p watts gm finance & company secretary 274,281 41,529 12,761 999 – 11,288 340,858

1 ceased employment 15 January 2008 2 ceased employment 7 april 2008

Share- BaSeD 2007 ShorT-Term BeneFiTS PaymenTS movement in Performance salary retention leave other rights/ Package Bonus Payment Provisions+ Benefits oPtions totalname $ $ $ $ $ $ $

m d macKay Business development manager 273,023 111,316 – 9,299 999 10,900 405,537

a d murdoch ceo ridley agriproducts 414,571 173,225 – 26,833 999 14,651 630,279

J murray ceo cheetham salt 407,800 166,240 – 18,062 999 – 593,101

g p watts gm finance & company secretary 266,600 47,548 – 22,385 999 10,900 348,432

I wilton chief financial officer 468,970 119,372 182,274 2,804 999 17,441 791,860

+ movement in annual leave and long service leave provisions

The above tables include the five highest paid executives, excluding the executive directors of ridley corporation limited.

for each cash bonus and grant of options and performance rights included in the above tables, the percentage of the available bonus or grant that was paid, or that vested, in the financial year, and the percentage that was forfeited because the person did not meet the service and performance criteria is set out below.

CaSh BonuS Paid forfeited name % %

r e frost 51 49

m J hudspith 99 1

m s mitchell 99 1

a l speed 64 36

s J vanroekel 99 1

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equity instRument disclosuRes RelAting to diRectoRs And executivesShare-based compensation – performance rightsThe terms and conditions of each grant of performance rights during the year to directors and other key management personnel in this reporting period are as follows:

value Per Performance exPiry right at date grant date date numBer grant date exercisaBle

31 oct 2007 31 oct 2010 1,131,000 $0.53 31 oct 2010

7 apr 2008 7 apr 2011 45,000 $0.51 7 apr 2011

5 may 2008 5 may 2011 268,000 $0.48 5 may 2011

Performance rights and options provided as remunerationdetails of performance rights and options over ordinary shares in the company provided as remuneration to each director of ridley corporation limited and each of the other key management personnel of the consolidated entity are set out below. when exercisable, each performance right is convertible into one ordinary share of ridley corporation limited.

a B c d current year value at value at value at remuneration consisting of grant exercise laPse Performance rights/oPtions date date date name % $ $ $

Directors of Ridley Corporation Limited

J murray* 5.6 282,200 – –

I wilton* 6.7 250,460 – –

Other key management personnel of the consolidated entity

a l speed 3.2 39,750 – –

a = the percentage of the value of remuneration consisting of performance rights and options, based on the value of performance rights and options expensed during the current yearB = the value at grant date of performance rights granted during the year as part of remuneration calculated in accordance with aasB 2 share-based paymentc = the value at exercise date of performance rights and options that were granted in prior years as part of remuneration and were exercised during the yeard = the value at lapse date of performance rights and options that were granted in prior years as part of remuneration and that lapsed during the year* appointed 7 may 2008

numBer of Performance rights numBer of oPtions name granted during the year vested during the year

Directors of Ridley Corporation Limited

J murray* 550,000 –

I wilton* 482,000 133,334

Other key management personnel of the consolidated entity

a d murdoch** 337,000 116,667

a l speed 75,000 –

* appointed 7 may 2008** ceased employment 7 april 2008

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remuneration report

option holdingsThe numbers of options over ordinary shares in the company held during the financial year by each director of ridley corporation limited and each of the other key management personnel of the consolidated entity, including their personally-related entities, are set out below:

Balance granted vested and at the during the cancelled exercised Balance at exerciseaBle at start of year as during the during the the end of the end of name the year remuneration year year the year the year

Directors of Ridley Corporation Limited

m p Bickford-smith* 2,000,000 – 2,000,000 – – –

I wilton** 800,000 – 400,000 – 400,000 400,000Other key management personnel of the consolidated entity

a d murdoch*** 600,000 – 600,000 – – –

no options are vested and unexercisable at the end of the year

* ceased employment 20 december 2007** appointed 7 may 2008*** ceased employment 7 april 2008

loAns to diRectoRs And executivesaggregate of loans made to directors of ridley corporation limited and the other key management personnel of the consolidated entity including their personally-related entities, are set out below:

Balance at Balance at numBer in the start the end grouP at the end of the year of the year of the year 2008 $ $

directors of ridley corporation limited – 6,316 2

other key management personnel of the consolidated entity 6,678 – –

Balance at Balance at numBer in the start the end grouP at the end of the year of the year of the year 2007 $ $

directors of ridley corporation limited – – –

other key management personnel of the consolidated entity 5,279 6,678 3

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The directors submit the balance sheets at 30 June 2008, and the income statements, statements of recognised income and expense and statements of cash flows for the year ended 30 June 2008 for the company and the consolidated entity and report as follows:

1. diRectoRsThe directors of ridley corporation limited at any time during or since the financial year are as follows:

J s Keniry p m mann (appointed 4 march 2008)

r J lee J murray (appointed 7 may 2008)

m p Bickford-smith (ceased employment 20 december 2007) J m spark (appointed 21 January 2008)

e B Bryan (resigned 31 october 2007) a l vizard

r J lotze (resigned 10 June 2008) I wilton (appointed 7 may 2008)

2. PRinciPAl ActivitiesThe principal continuing activities of the consolidated entity during the year were the production and marketing of stockfeed and animal feed supplements and the production of crude salt, salt refining and marketing.

on 7 may 2008, ridley announced the intention to sell its interest in its 69% owned canadian subsidiary ridley Inc. ridley Inc is disclosed as a discontinued operation and its assets and liabilities are classified as held for sale in the financial statements.

3. Results

2008 2007 $’000 $’000

profit from continuing operations before income tax 2,703 19,648

Income tax (benefit)/expense (2,798) 4,157

operating profit from continuing operations of the consolidated entity 5,501 15,491

profit from discontinued operations 7,274 10,441

profit attributable to minority interest (2,270) (3,259)

Profit attributable to members of Ridley Corporation Limited 10,505 22,673

4. Review of oPeRAtions/significAnt chAnges in the stAte of AffAiRsa review of:

i) operations and financial matters including significant changes in the state of affairs;

ii) the results of those operations; and

iii) likely developments

are set out on pages 1 to 23 in the annual report.

5. dividendsdividends paid to members during the financial year were as follows:

2008 2007 $’000 $’000

final dividend for the year ended 30 June 2007 of 3.50 cents (2006: 3.50 cents) per share paid on 9 october 2007 10,218 9,862

Interim dividend for the year ended 30 June 2008 of 3.50 cents (2007: 3.50 cents) per share paid on 31 march 2008 10,368 10,049

20,586 19,911

dividend franking amounts are disclosed in note 8 to the financial statements.

In addition to the above, directors have declared a final dividend of 3.50 cents per share (unfranked) totalling $10,471,000 to be paid on 14 october 2008 out of retained profits at 30 June 2008.

diReCtORs, RePORt

fOR tHe yeaR ended �0 june 2008

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directors

, report

6. enviRonmentAl RegulAtionridley has environmental and risk management reporting processes that provide senior management and the directors with monthly reports on environmental matters, including rectification actions for any issues as discovered. The directors are not aware of any environmental matters likely to have a material financial impact.

In accordance with its environmental procedures, ridley monitors environmental compliance of all of its operations on an ongoing basis.

7. diRectoRs’ And executives’ RemuneRAtion refer to remuneration report.

8. shARe oPtions And PeRfoRmAnce Rightsunissued ordinary shares of ridley corporation limited and controlled entities under options and performance rights at the date of this report are as follows:

numBer exPiry date

ridley corporation Incentive option plan 1,600,000 various

ridley corporation long-Term Incentive plan (performance rights) 1,632,000 various

no holder has any right under the plans to participate in any other share issue of the company or of any other entity. The entity will issue shares when the options and performance rights are exercised. further details are provided in note 27 to the financial report and in the remuneration report.

The names of all persons who currently hold options granted under the option plans are entered in the register kept by the company, pursuant to section 215 of the corporations act 2001. The register is available for inspection at the company’s registered office.

9. infoRmAtion on diRectoRs particulars of shares and options held by directors in the company, together with profiles of the directors, are set out on pages 24, 25 and in note 29 to the financial report.

10. meetings of diRectoRs

auDiT remuneraTion anD riSk reView TakeoVer reSPonSe BoarD CommiTTee nominaTion CommiTTee CommiTTee CommiTTee

meetings meetings meetings meetings meetings held held held held held while a meetings while a meetings while a meetings while a meetings while a meetings directors director attended memBer attended memBer attended memBer attended memBer attended

J s Keniry 13 13 – – 7 7 – – 8 7

r J lee 13 12 5 5 7 7 – – 8 6

m p Bickford-smith 5 5 – – – – – – – –

e B Bryan 4 2 1 – 2 2 – – – –

r J lotze 12 11 4 4 – – – – – –

p m mann 5 5 2 2 – – – – – –

J murray 2 2 – – – – 1 1 8 6

J m spark 7 7 1 1 – – – – 8 3

a l vizard 13 13 – – – – 4 4 – –

I wilton 2 2 – – – – 1 1 8 7

11. Post BAlAnce dAte eventsno matters or circumstances have arisen since 30 June 2008 that have significantly affected, or may significantly affect:

(i) the consolidated entity’s operations in future financial years, or

(ii) the results of those operations in future financial years, or

(iii) the consolidated entity’s state of affairs in future financial years.

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12. insuRAnceregulation 113 of the company’s constitution indemnifies officers to the extent now permitted by law.

a deed of Indemnity was approved by shareholders at the 1998 annual general meeting. subsequent to this approval, the company has entered into the deed of Indemnity with all the directors and the secretary of the company and the directors of all the subsidiaries.

The deed requires the company to maintain insurance to cover the directors in relation to liabilities incurred while acting as a director of the company or a subsidiary and costs involved in defending proceedings.

during the year the company paid a premium in respect of such insurance covering the following directors and secretary of ridley corporation limited: J s Keniry, r J lee, m p Bickford-smith, e B Bryan, r J lotze, p m mann, J murray, J m spark, a l vizard, I wilton and g p watts.

13. non-Audit seRvicesThe company may decide to employ the auditor (pricewaterhousecoopers) on assignments additional to its statutory audit duties where the auditor’s expertise and experience with the company and/or the consolidated entity are important.

The Board has considered the non-audit services and, in accordance with the advice received from the audit committee, is satisfied that the provision is compatible with the general standard of independence for auditors imposed by the corporations act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the corporations act 2001 for the following reasons:

• all non-audit services have been reviewed by the audit committee to ensure that they do not impact the impartiality and objectivity of the auditor.

• none of the services undermine the general principles relating to auditor independence as set out in professional statement f1, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risk and rewards.

a copy of the auditor’s independence declaration as required under section 307c of the corporations act 2001 is set out on page 42.

during the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms:

• Tax compliance services $284,082

• Tax advice $49,436

14. Rounding of Amounts to neARest thousAnd dollARsThe company is of a kind referred to in class order 98/0100 issued by the australian securities and Investments commission relating to the “rounding off” of amounts in the directors’ report and financial report. amounts in the directors’ report and the financial report have been rounded off to the nearest thousand dollars in accordance with that class order or in certain cases to the nearest dollar.

15. AuditoRpricewaterhousecoopers continues in office in accordance with section 327 of the corporations act 2001.

signed in sydney 25 august 2008 in accordance with a resolution of the directors.

j S keniry director

P m mann director

sydney 25 august 2008

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AuditoR’s indePendence declARAtionas lead auditor for the audit of ridley corporation limited for the year ended 30 June 2008 I declare that to the best of my knowledge and belief, there have been:

(a) no contraventions of the auditor independence requirements of the corporations act 2001 in relation to the audit; and

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

This declaration is in respect of ridley corporation limited and the entities it controlled during the year.

STeVe Bourke Partner

pricewaterhousecoopers

sydney 25 august 2008

liability limited by a scheme approved under professional standards legislation 42

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‘08 70 Note 24 – Commitments

for expenditure 71Note 25 – Contingent liabilities 71 Note 26 – Remuneration of auditors 72Note 27 – Employee entitlements 78 Note 28 – Related party disclosures 79Note 29 – Directors’ and key

management personnel disclosures 82 Note 30 – Business and

geographical data 83Note 31(i) – Reconciliation of net

cash inflow from operating activities to profit after income tax

83 Note 31(ii) – Reconciliation of cash 83Note 32 – Non-cash financing and

investing activities 84 Note 33 – Finance facilities 84Note 34 – Earnings per share 85 Note 35 – Investment in

controlled entities 86Note 36 – Deed of cross guarantee 87 Note 37 – Investments

in associates 88Note 38 – Interests in joint ventures 88Note 39 – Post balance date events

89Directors’Declaration 90inDepenDentauDitor’sreport 91shareholDerinformationiBccorporateDirectory

financial REPORT

fOR ThE yEaR EndEd 30 JunE 2008

44incomestatements45Balancesheets46statementsofrecoGniseD

incomeanDeXpense47statementsofcashfloWs

48notestothefinancialstatements48 Note 1 – Summary of significant

accounting policies54Note 2 – Revenue54 Note 3 – Other income54Note 4 – Expenses55 Note 5 – Significant items55Note 6 – Discontinued operations

and assets and liabilities held for sale

57 Note 7 – Income tax58Note 8 – Dividends58Note 9 – Receivables59 Note 10 – Inventories59Note 11 – Other59 Note 12 – Property, plant

and equipment61Note 13 – Intangible assets62 Note 14 – Deferred tax assets63Note 15 – Payables63 Note 16 – Borrowings63Note 17 – Tax liabilities64 Note 18 – Provisions65Note 19 – Contributed equity65 Note 20 – Reserves and

retained profits66Note 21 – Minority interest67 Note 22 – Equity67Note 23 – Financial risk

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Sales revenue from continuing operations 2 837,608 758,128 – –Cost of sales 767,586 690,613 – –

Grossprofit 70,022 67,515 – –Other revenues from continuing operations 2 1,348 3,135 51,937 52,651Other income 3 289 43 9 5Other expenses from continuing operations

Selling and distribution (15,535) (15,885) – –General and administrative (27,227) (23,071) (8,966) (10,455)Finance costs 4 (15,207) (12,938) (15,458) (12,774)Impairment of assets and restructure costs 5 (10,576) (1,544) – –Other (7,276) (3,895) (4,673) (580)

Share of net profits from associates 37 6,865 6,288 – –

profitfromcontinuinGoperationsBeforeincometaXeXpense 2,703 19,648 22,849 28,847

Income tax (benefit)/expense 7 (2,798) 4,157 1,245 2,283

profitfromcontinuinGoperationsafterincometaXeXpense 5,501 15,491 21,604 26,564

Profit from discontinued operations 6 7,274 10,441 – –

profitfortheyear 12,775 25,932 21,604 26,564

Profit attributable to minority interest 2,270 3,259 – –

netprofitaftertaXattriButaBletomemBersofriDleycorporationlimiteD 10,505 22,673 21,604 26,564

Basic earnings per share from continuing operations 34 1.9c 5.4cBasic earnings per share 34 3.6c 7.9cDiluted earnings per share from continuing operations 34 1.9c 5.4cDiluted earnings per share 34 3.6c 7.9c

* The 2007 consolidated income statement has been restated for the effect of Ridley Inc being classified as discontinued (refer to note 6)The above income statements should be read in conjunction with the accompanying notes.

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 Note $’000 $’000 $’000 $’000 Restated*

incOME STaTEMEnTS fOR ThE yEaR EndEd 30 JunE 2008

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currentassets Cash and cash equivalents 31(ii) 1,836 14,967 4,891 6,974Receivables 9 115,198 138,169 3,530 1,403Inventories 10 89,208 140,357 – –Other current assets 11 – 279 – –Derivative financial instruments 23 1,041 590 1,041 544Assets of disposal group classified as held for sale 6 273,798 – 83,808 –totalcurrentassets 481,081 294,362 93,270 8,921

non‑currentassets Receivables 9 5 2,266 336,905 295,387Investments accounted for using the equity method 37 44,233 44,073 – –Property, plant and equipment 12 256,725 385,243 342 390Deferred tax assets 14 438 419 764 769Intangible assets 13 20,115 62,028 2,149 163Retirement benefit assets 27 905 72 905 72Other non-current assets 11 – 61 24,645 108,453totalnon‑currentassets 322,421 494,162 365,710 405,234

totalassets 803,502 788,524 458,980 414,155

currentliaBilities Payables 15 104,517 152,859 4,450 2,886Borrowings 16 1,674 13,008 – –Current tax liabilities 17 – 446 – –Provisions 18 14,022 13,379 398 594Liabilities of disposal group classified as held for sale 6 118,730 – – –totalcurrentliaBilities 238,943 179,692 4,848 3,480

non‑currentliaBilities Borrowings 16 183,023 173,806 182,883 149,219Deferred tax liabilities 17 10,357 34,575 – –Provisions 18 1,735 2,188 533 714Retirement benefit obligations 27 – 10,033 – –totalnon‑currentliaBilities 195,115 220,602 183,416 149,933

totalliaBilities 434,058 400,294 188,264 153,413

netassets 369,444 388,230 270,716 260,742

equity Contributed equity 19 228,566 221,236 228,566 221,236Reserves 20 56,279 69,954 17,201 16,226Retained profits 20 35,674 44,607 24,949 23,280

parententityinterest 320,519 335,797 270,716 260,742

Minority interest 21 48,925 52,433 – –

totalequity 369,444 388,230 270,716 260,742

The above balance sheets should be read in conjunction with the accompanying notes.

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 Note $’000 $’000 $’000 $’000

BalancE ShEETS aS aT 30 JunE 2008

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CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 Note $’000 $’000 $’000 $’000

STaTEMEnTS Of REcOgniSEd incOME and ExPEnSEfOR ThE yEaR EndEd 30 JunE 2008

incomeanDeXpensesrecoGniseDDirectlyinequity Loss on impairment of land and buildings, net of tax 20 (928) (1,136) – –Actuarial gain/(loss) on defined benefit superannuation and pension plans, net of tax 20 553 239 489 (147)Changes in the fair value of cash flow hedges, net of tax 20 534 231 534 231Exchange differences on translation of foreign operations 20 (19,068) (22,441) – –

netincome/(eXpense)recoGniseDDirectlyinequity 22 (18,909) (23,107) 1,023 84profitfortheyear 12,775 25,932 21,604 26,564

totalrecoGniseDincomeanDeXpensefortheyear (6,134) 2,825 22,627 26,648

Total recognised income and expense for the year is attributable to: Ridley Corporation Limited (2,626) 6,265 22,627 26,648Minority interest (3,508) (3,440) – – (6,134) 2,825 22,627 26,648

The above statements of recognised income and expense should be read in conjunction with the accompanying notes.

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STaTEMEnTS Of caSh flOwSfOR ThE yEaR EndEd 30 JunE 2008

cashfloWsfromoperatinGactivities Receipts from customers 1,606,010 1,497,146 6,549 6,783Payments to suppliers and employees (1,569,290) (1,440,442) (12,218) (9,332)Dividends received 7,382 5,876 15,945 22,786Interest received 1,340 1,297 28,147 22,177Interest and other costs of finance paid (17,097) (16,606) (15,025) (13,615)Income taxes paid (11,921) (9,887) (2,153) (3,148)netcashinfloWfromoperatinGactivities 31(i) 16,424 37,384 21,245 25,651

cashfloWsfrominvestinGactivities Payments for acquisition of businesses and controlled entities net of cash acquired 35 (1,245) – – –Payments for property, plant and equipment (30,678) (27,922) (108) (128)Payments for intangibles (3,915) (744) (2,001) (171)Proceeds from sale of non-current assets 5,202 981 87 4,087Repayment of customer loans 1,812 2,331 – –Issue of customer loans (204) (1,918) – –Loans to controlled entities – – (41,517) (21,512)netcashoutfloWfrominvestinGactivities (29,028) (27,272) (43,539) (17,724)

cashfloWsfromfinancinGactivitiesProceeds from issue of equity instruments 210 1,076 210 859Shares repurchased (757) (640) (757) (640)Proceeds from borrowings 269,757 217,517 230,900 180,300Repayment of borrowings (240,184) (217,734) (197,600) (175,300)Dividends paid (12,542) (9,382) (12,542) (9,382)netcashinfloW/(outfloW)fromfinancinGactivities 16,484 (9,163) 20,211 (4,163)

netincrease/(Decrease)incashhelD 3,880 949 (2,083) 3,764cashattheBeGinninGofthefinancialyear 2,017 1,522 6,974 3,210effectsofeXchanGeratevariationsoncash (417) (454) – –

cashattheenDofthefinancialyear 31(ii) 5,480 2,017 4,891 6,974

non‑cashfinancinGanDinvestinGactivities 32

The above statements of cash flows should be read in conjunction with the accompanying notes.

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 Note $’000 $’000 $’000 $’000

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note1–summaryofsiGnificantaccountinGpoliciesBasisofpreparationThis general purpose financial report has been prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRS), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

complianceWithinternationalfinancialreportinGstanDarDsAustralian Accounting Standards include AIFRS. Compliance with AIFRS ensures that the financial report of Ridley Corporation Limited complies with International Financial Reporting Standards (IFRS).

historicalcostconventionThese financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and liabilities, including derivative instruments at fair value through profit or loss, and certain classes of property, plant and equipment.

principlesofconsoliDation(i)SubsidiariesThe consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Ridley Corporation Limited, the “parent entity”, as at 30 June 2008 and the results of all subsidiaries for the year then ended. Ridley Corporation Limited and its subsidiaries together are referred to in this financial report as “the Group” or “the consolidated entity”.

Subsidiaries are all those entities, including special purpose entities, over which the consolidated entity has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the consolidated entity controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Minority interest in the results and equity of subsidiaries is shown separately in the consolidated income statement and balance sheet respectively.

Investments in subsidiaries are accounted for at cost in the parent entity.

(ii)AssociatesAssociates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for at cost within the parent entity’s financial statement and in the consolidated financial statements using the equity method of accounting, after initially being recognised at cost. The Group’s investment in associates includes intangibles identified on acquisition.

The Group’s share of its associates’ post-acquisition profits or losses is recognised in the income statement, and its share of post acquisition movements in reserves is recognised in reserves. The cumulative post acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates reduce the carrying amount of the investment.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interests in the associates. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

(iii)JointlycontrolledassetsThe proportionate interests in the assets, liabilities and expenses of joint venture activities have been incorporated within the financial statements under the appropriate headings.

seGmentalreportinGThe Group operates in a number of business and geographic segments. A segment is identified as a group of assets and operations engaged in providing products where the risks and returns are different to those of the other segments.

foreiGncurrencytranslation(i)FunctionalandpresentationcurrencyItems included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in Australian dollars, which is the Group’s functional and presentation currency.

(ii)TransactionsandbalancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as qualifying cash flow hedges.

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note1–summaryofsiGnificantaccountinGpolicies(continueD)foreiGncurrencytranslation(continueD)(iii)GroupcompaniesThe results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:· assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet· income and expenses for each income statement are translated at average exchange rates, and· all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders’ equity. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

The exchange rates used to convert foreign Group entities are as follows:

2008 2007

OneAustraliandollarequivalentBalance Sheet (year end rate)

United States dollar 0.9631 0.8483Canadian dollar 0.9778 0.9038

Income Statement (average rate) United States dollar 0.8934 0.7798Canadian dollar 0.8894 0.8815

property,plantanDequipmentLand and buildings and salt fields are shown at fair value, based on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation for buildings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. All other property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Increases in the carrying amounts arising on revaluation of land and buildings and salt fields are credited, net of tax, to the revaluation reserve in shareholders’ equity. To the extent that the increase reverses a decrease previously recognised in the income statement, the increase is first recognised in income statement. Decreases that reverse previous increases of the same asset are first charged against revaluation reserves directly in equity to the extent of the remaining reserve attributable to the asset; all other decreases are charged to the income statement.

Land and salt fields are not depreciated. Depreciation of other assets is calculated using the straight line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives, as follows:• Buildings 40 years• Plant and equipment 3-30 years

The assets’ residual values and useful lives are reviewed, and adjusted, if appropriate, at each balance sheet date.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement.

non‑currentassets(orDisposalGroups)helDforsaleanDDiscontinueDoperationsNon-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets and financial assets. A disposal group as a whole is measured at the lower of its carrying amount and it’s fair value less cost to sell.

An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition.

Current assets, deferred tax assets and liabilities, employee benefits and financial instruments within a disposal group are measured in accordance with the relevant accounting standards.

Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.

Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the balance sheet.

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note1–summaryofsiGnificantaccountinGpolicies(continueD)non‑currentassets(orDisposalGroups)helDforsaleanDDiscontinueDoperations(continueD)A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately on the face of the income statement.

incometaXThe income tax expense for the period is the tax payable on the current period’s taxable income based on the income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences 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 deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

taXconsoliDationRidley Corporation Limited and its wholly-owned Australian controlled entities implemented the tax consolidation legislation as of 1 July 2003.

The head entity, Ridley Corporation Limited, and the controlled entities in the tax consolidated group continue to account for their own current and deferred tax amounts. These tax amounts are measured using a stand alone taxpayer method of allocation as outlined in the Group’s tax sharing agreement.

In addition to its own current and deferred tax amounts, Ridley Corporation Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group. Assets or liabilities arising under tax funding arrangements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the Group and settled through the intercompany accounts.

Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to, or distribution from, wholly-owned tax consolidated entities.

BusinesscomBinationsThe purchase method of accounting is used to account for all acquisitions of assets, including business combinations, regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the identifiable net assets of the subsidiary acquired, the difference is recognised directly in the income statement, only after a reassessment of the identification and measurement of the net assets acquired.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

financialinstrumentsDerivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in the income statement unless the derivative is designated as a hedging instrument, in an effective cash flow hedge where the gain or loss is deferred within equity until the underlying hedged item is settled.

The Group documents, at the inception of the transaction, the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.

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note1–summaryofsiGnificantaccountinGpolicies(continueD)financialinstruments(continueD)(i)CashflowhedgeThe Group enters into interest rate swaps to mitigate the risk associated with changes in the value of future cash flows in relation to variable rate debt due to fluctuations in the interest rate. The effective portion of changes in the fair value of the interest rate swaps that are designated and qualify as cash flow hedges are recognised in equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the income statement within other income or other expenses.

Amounts accumulated in equity are recycled in the income statement within finance costs in the periods when the hedged item will affect the income statement.

When a hedging instrument expires or is terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the hedged item is ultimately recognised in the income statement.

(ii)DerivativesthatdonotqualifyforhedgeaccountingCertain derivative instruments, including foreign exchange contracts and interest rate swaps, may not qualify for hedge accounting. Changes in the fair value of any derivative instrument that do not qualify for hedge accounting are recognised immediately in the income statement within other income or other expenses.

fairvalueestimationThe fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward exchange contracts is determined using forward exchange market rates at the balance date.

otherfinancialassets–loansanDreceivaBlesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date that are classified as non-current assets.

intanGiBleassets(i)GoodwillGoodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary or associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates is included in investments in associates. Goodwill acquired in business combinations is not amortised. Instead, goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash generating units for the purpose of impairment testing.

(ii)TrademarksandlicencesTrademarks and licences have a finite useful life and are carried at cost less accumulated amortisation and impaired losses. Amortisation is calculated using the straight line method to allocate the cost of trademarks and licences over their estimated useful lives being up to 15 years.

(iii)SoftwareThe cost of system development including purchased software is deferred and amortised over the estimated useful life, being 3 to 8 years.

impairmentofassetsAssets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows, which are largely independent of the cash inflows from other assets or groups of assets (cash generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

employeeBenefits(i)DefinedbenefitsuperannuationfundsandpensionplansA liability or asset in respect of defined benefit superannuation funds and pension plans is recognised in the balance sheet, and is measured as the present value of the defined benefit obligation at the reporting date plus unrecognised actuarial gains (less unrecognised actuarial losses) less the fair value of the fund’s or plan’s assets at that date and any unrecognised past service cost. The present value of the defined benefit obligation is based on expected future payments which arise from membership of the funds or plans to the reporting date, calculated by independent actuaries. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.

Expected future payments are discounted using market yields at the reporting date on national government bonds or corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to retained earnings via the statement of recognised income and expense.

Past service costs are recognised immediately in income, unless the changes are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past service costs are amortised on a straight-line basis over the vesting period.

Future taxes, such as taxes on investment income and employer contributions, are taken into account in the actuarial assumptions used to determine the relevant components of the employer’s defined benefit liability or asset.

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note1–summaryofsiGnificantaccountinGpolicies(continueD)employeeBenefits(continueD)(ii)DefinedcontributionplansContributions to the defined contribution fund are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

(iii)HealthplansA controlled entity provides health care benefits for eligible employees, retired employees and their covered dependants. The cost of providing these benefits is accrued over the period in which employees provide service to the date of their last eligibility for such benefits. The amount of the obligation is based on an independent actuarial valuation.

(iv)Share-basedpaymentsShare-based compensation benefits are provided to employees via incentive plans described in the remuneration report.

The fair value of options granted is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the vesting period during which the employees become unconditionally entitled to the options.

The fair value at grant date is independently determined using a binomial option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

Shares issued to employees under the Ridley Employee Share Scheme vest immediately on grant date. Employees can elect to receive an interest free loan to fund the purchase of the shares. The shares issued are accounted for as “in-substance” options which vest immediately. The fair value of these “in-substance” options is recognised as an employee benefit expense with a corresponding increase in equity. The fair value at grant date is independently determined using a binomial option pricing model.

(v)Wagesandsalaries,bonuses,annualleaveandsickleaveLiabilities for wages and salaries, including non-monetary benefits, bonuses, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in accruals and provisions for employee entitlements in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

(vi)LongserviceleaveThe liability for long service leave expected to be settled within 12 months of the reporting date is recognised in the provision for employee benefits and is measured in accordance with (v) above. The liability for long service leave expected to be settled more than 12 months from the reporting date is recognised in the provision for employee entitlements and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date.

Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(vii)Employeebenefiton-costsEmployee benefit on-costs, including payroll tax, are recognised and included in both employee benefit liabilities and costs.

financialinstrumentstransactioncostsThe transaction costs are reflected in the carrying value of the debt instrument and amortised over the term of the facilities.

researchanDDevelopmenteXpenDitureResearch and development costs are charged to expense as incurred, unless development costs relate to a project whose success is probable considering its commercial and technical feasibility and where such costs can be measured reliably, in which case such costs are recognised as intangible assets.

inventoriesInventories are valued at the lower of cost and net realisable value. Costs are determined on the first in, first out and weighted average cost methods. Where appropriate, the cost of finished goods includes applicable fixed and variable overheads.

DiviDenDsProvision is made for the amount of any dividend declared, determined or publicly recommended by the directors on or before the end of the financial period but not distributed at balance date.

revenuerecoGnitionRevenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and duties and taxes paid. Sales revenue is recognised when the significant risks and rewards of ownership have been transferred to the customer.

cashFor cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits at call and other short term, highly liquid investments with original maturities of less than three months which are readily convertible to cash and are subject to insignificant risk of changes in value, and bank overdrafts, which are included within borrowings in current liabilities in the balance sheet.

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note1–summaryofsiGnificantaccountinGpolicies(continueD)traDereceivaBlesTrade receivables are recognised initially at fair value and subsequently measured at amortised cost, less allowance for impairment loss. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. An impairment allowance for doubtful receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables and where suitable insurance arrangements or collateral do not cover any uncollected amounts. The amount of the impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate, and is recognised in the income statement.

leaseDassetsA distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits to ownership of leased non-current assets, and operating leases, under which the lessor effectively retains substantially all such risks and benefits.

Finance leases are capitalised. A lease asset and liability are established at the lower of the fair value of the leased property and the present value of minimum lease payments. Lease payments are allocated between the principal component of the lease liability and the finance costs. The lease asset is amortised over the shorter of the term of the lease and the life of the asset. Lease assets held at reporting date are being amortised over periods ranging from three to five years.

Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight line basis over the period of the lease.

payaBlesThese amounts represent goods and services provided to the Group prior to the end of the financial year that are unpaid. The amounts are unsecured.

BorroWinGsBorrowings are initially recognised at their fair value which approximates to the present value of future cash flows associated with servicing the debt, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

financialGuaranteecontractsFinancial guarantee contracts are recognised as a financial liability at the time the guarantee is issued.

The liability is initially measured at fair value and subsequently at the higher of the amount determined in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less cumulative amortisation, where appropriate.

The fair value of financial guarantees is determined as the present value of the difference in net cash flows between the contractual payments under the debt instrument and the payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for assuming the obligations.

Where guarantees in relation to loans or other payables of subsidiaries or associates are provided for no compensation, the fair values are accounted for as contributions and recognised as part of the cost of the investment.

contriButeDequityOrdinary shares are classified as contributed equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

earninGspershare(i)BasicearningspershareBasic earnings per share is calculated by dividing the profit attributable to shareholders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year.

(ii)DilutedearningspershareDiluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

neWaccountinGstanDarDsanDinterpretationsCertain new accounting standards and interpretations have been published that are not mandatory for 30 June 2008 reporting periods. The Group has not made an assessment of the impact of these new standards and interpretations as yet. The new accounting standards and interpretations are as follows:AASB 3 Business CombinationsAASB 8 Operating SegmentsRevised AASB 101 Presentation of Financial StatementsRevised AASB 123 Borrowing CostsAASB 127 Consolidated and Separate Financial StatementsAASB Interpretation 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

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note1–summaryofsiGnificantaccountinGpolicies(continueD)criticalaccountinGestimatesanDjuDGementsEstimates and judgements are continuously evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group, that are believed to be reasonable under the circumstances.

(i)Estimatedimpairmentofgoodwillandothernon-currentassetsThe Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy for intangible assets. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash generating units). The recoverable amounts of cash generating units have been determined by value in use calculations.

(ii)DefinedbenefitsuperannuationandhealthplansThe Group has obligations for defined benefit superannuation and pension schemes and health plans. The value of the obligations is based on independent actuarial valuations.

(iii)SaltfieldvaluationsSalt fields are valued on a value in use basis by external independent valuers. These valuations require the use of key assumptions being the future cash flows, discount rates and growth rates.

(iv)DeferredtaxesThe Group has recognised deferred tax assets relating to carried forward losses to the extent that it is probable that they will be utilised in the foreseeable future. Other deferred tax assets relating to losses have not been recognised.

rounDinGofamountsThe Company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000 Restated

note2–revenueRevenue from continuing operations Sale of goods 837,608 758,128 – –

Other revenues from continuing operations Interest 507 337 28,147 22,177 Rent received 258 274 – – Dividends received/receivable from related entities – – 15,945 22,786 Management fees – related entities – – 7,835 7,688 Other 583 2,524 10 – 1,348 3,135 51,937 52,651

note3–otherincomeOther income from continuing operations Profit on sale of property, plant and equipment 162 33 9 5Foreign exchange gains – net 127 10 – – 289 43 9 5

note4–eXpensesProfit from continuing operations before income tax is arrived at after charging the following items: Depreciation and amortisation Land and buildings 1,074 1,042 20 62 Plant and equipment 10,320 9,614 42 65 Software 446 514 15 9 11,840 11,170 77 136

Finance costs Amortisation of borrowing costs 588 477 587 474 Interest expense 14,619 12,461 14,871 12,300 15,207 12,938 15,458 12,774

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note4–eXpenses(continueD)Bad and doubtful debt expense – net 161 470 – –Employee costs 74,368 69,250 7,197 7,003Operating lease expense 6,808 6,495 361 344Research and development 1,281 230 – –Loss on disposal of property, plant and equipment 85 394 16 –Canadian law suit costs (note 25) 438 509 438 509Changes in fair value of interest swaps – 72 – 72

note5–siGnificantitemsContinuing operationsImpairment of assets and business restructuring costs 10,576 1,544 – –Takeover defence costs 1,749 – 1,749 –Corporate restructuring costs 2,470 – 2,470 – 14,795 1,544 4,219 –Discontinued operations Canadian law suit settlement (refer note 25) 6,753 – – –Impairment of assets and restructuring costs 3,137 4,250 – – 9,890 4,250 – –

note6–DiscontinueDoperationsanDassetsanDliaBilitieshelDforsale(a)DescriptionOn 7 May 2008, Ridley announced its intention to sell its interest in its 69% owned Canadian subsidiary Ridley Inc and initiated an active program to identify a buyer.

(B)incomestatementforDiscontinueDoperationsFinancial information relating to the discontinued operations is set out below. Further information is disclosed in note 30, Business and Geographical Data.

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000 Restated

Sales revenue from discontinued operations 709,041 681,698 – –Cost of sales 604,413 575,420 – –

Grossprofit 104,628 106,278 – –

otherrevenuesfromDiscontinueDoperations 1,004 1,671 – –Other income 640 537 – –Other expenses from discontinued operations Selling and distribution (38,648) (41,643) – – General and administrative (35,238) (39,275) – – Finance costs (2,816) (2,503) – – Canadian law suit settlement (note 25) (6,753) – – – Impairment of assets and restructure costs (3,137) (4,250) – – Other (3,680) (5,765) – –

profitfromDiscontinueDoperationsBeforeincometaXeXpense 16,000 15,050 – –Income tax expense 8,726 4,609 – –

profitfromDiscontinueDoperationsafterincometaXeXpense 7,274 10,441 – –

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 $’000 $’000 $’000 $’000 Restated

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note6–DiscontinueDoperationsanDassetsanDliaBilitieshelDforsale(continueD)(c)classificationofeXpensesProfit from discontinued operations before income tax is arrived at after charging the following items:Depreciation and amortisation Land and buildings 1,994 2,591 – – Plant and equipment 5,798 8,488 – – Leased assets 29 74 – – Software 159 258 – – Trademarks, patents and other rights 96 109 – – 8,076 11,520 – –

Finance costs Amortisation of borrowing costs 210 363 – – Interest expense 2,606 2,140 – – 2,816 2,503 – –

Bad and doubtful debt expense – net 1,145 338 – –Employee costs 75,133 87,268 – –Operating lease expense 1,627 1,841 – –Research and development 1,288 1,341 – –Loss on disposal of property, plant and equipment – 686 – –Canadian law suit costs (note 25) 1,174 1,713 – –

(D)cashfloWNet cash inflow from ordinary activities 17,349 7,295 – –Net cash outflow from investing activities (6,323) (9,314) – –Net cash (outflow)/inflow from financing activities (9,373) 1,268 – –Net cash inflow/(outflow) 1,653 (751) – –

(e)assetsanDliaBilitiesclassifieDashelDforsale Assetsheldforsale Cash and cash equivalents 3,644 – – –Receivables 41,352 – – –Inventories 72,580 – – –Property, plant and equipment 114,632 – – –Investment – – 83,808 –Intangible assets 40,979 – – –Other assets 611 – – –Assetsofdisposalgroupclassifiedasheldforsale 273,798 – 83,808 –

Liabilitiesheldforsale Payables 68,660 – – –Derivative financial instruments 162 – – –Borrowings 20,029 – – –Provisions 1,125 – – –Deferred tax liabilities 19,755 – – –Retirement benefit obligations 8,999 – – –Liabilitiesdirectlyassociatedwiththeassetsclassifiedasheldforsale 118,730 – – –Netassets 155,068 – 83,808 –

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 $’000 $’000 $’000 $’000 Restated

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note7–incometaX(a)incometaXeXpense Current tax 10,597 10,168 2,984 1,975Deferred tax (2,796) (1,573) (434) 53Under/(over) provided in prior years (1,873) 171 (1,305) 255 5,928 8,766 1,245 2,283

Income tax (benefit)/expense is attributable to: Profit/(loss) from continuing operations (2,798) 4,157 1,245 2,283Profit from discontinued operations 8,726 4,609 – – 5,928 8,766 1,245 2,283

Deferred income tax (benefit)/expense included in income tax expense comprises: Decrease/(increase) in deferred tax assets (note 14) 32 (710) (313) 158Decrease in deferred tax liabilities (note 17) (2,828) (863) (121) (105) (2,796) (1,573) (434) 53

(B)reconciliationofincometaXeXpensetoprimafacietaXpayaBle Profit from continuing operations before income tax expense 2,703 19,648 22,849 28,847Profit from discontinuing operations before income tax expense 16,000 15,050 – – 18,703 34,698 22,849 28,847

Prima facie tax payable at 30% 5,611 10,409 6,855 8,654Tax effect of amounts which are not deductible/(taxable) in calculating taxable income: Dividends – – (4,495) (6,836)Share of net profit of associates (2,057) (1,886) – –Share-based payments 20 54 20 54Non-deductible expenses 116 161 6 3(Over)/under provision in prior year (1,873) 171 (1,305) 255Losses not tax effected 1,600 529 – –Capital losses applied – (1,715) – –Difference in overseas tax rates 2,516 1,558 – –Other (5) (515) 164 153Incometaxexpense 5,928 8,766 1,245 2,283

(c)amountsrecoGniseDDirectlyinequity Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss but directly debited or (credited) to equity 46 (254) 439 36

Ridley Corporation Limited and its wholly-owned Australian controlled entities implemented tax consolidation legislation as of 1 July 2003. The accounting policy in relation to this legislation is set out in note 1.

On adoption of tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement which, in the opinion of the directors, limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity, Ridley Corporation Limited. The agreement provides for the allocation of income tax liabilities between the entities should Ridley Corporation Limited default on its payment obligations. At balance date the possibility of default is considered to be remote.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Ridley Corporation Limited for any current tax payable assumed and are compensated by Ridley Corporation Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Ridley Corporation Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements. Amounts payable and receivable between Ridley Corporation Limited and the wholly-owned entities are settled through the intercompany accounts.

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 $’000 $’000 $’000 $’000

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note8–DiviDenDsorDinary Final dividend paid on 9 October 2007 (2007: 10 October 2006) 50% franked – 3.50 (2007: 3.50 50% franked) cents per share 10,218 9,862 10,218 9,862

Interim dividend paid on 31 March 2008 (2007: 30 March 2007) 50% franked – 3.50 (2007: 3.50 50% franked) cents per share 10,368 10,049 10,368 10,049Total dividends paid 20,586 19,911 20,586 19,911

DiviDenDsnotrecoGniseDatyearenDIn addition to the above dividends, since year-end the directors have approved payment of a final dividend of 3.50 cents, unfranked (2007: 3.50 cents 50% franked) per fully paid share payable on 14 October 2008 (2007: 9 October 2007) based on tax paid at 30%. The aggregate amount of the proposed dividend expected to be paid out of retained profits at 30 June 2008, but not recognised as a liability at year-end: 10,471 10,218 10,471 10,218

The estimated amount that could be distributed as dividends and be franked at 30% out of existing franking credits and out of franking credits arising from the payment of income tax provided for in the financial statements and from dividends receivable after deducting franking credits applicable to proposed dividends at balance date: Nil Nil Nil Nil

note9–receivaBlescurrent Trade debtors 103,405 125,520 – –Less: Allowance for doubtful debts (a) (1,160) (2,026) – – 102,245 123,494 – –

Customer loans and advances – 2,132 – –Less: Allowance for doubtful debts (a) – (64) – – – 2,068 – –

Prepayments 1,452 3,091 539 553Other debtors 11,501 9,516 2,991 850 115,198 138,169 3,530 1,403

non‑current Customer loans and advances – 2,450 – –Less: Allowance for doubtful debts (a) – (243) – – – 2,207 – –Other debtors 5 59 – –Amounts owing by related entities – – 336,905 295,387 5 2,266 336,905 295,387

(a) Movements in the allowance for doubtful debts of receivables are as follows:At 1 July 2,333 4,097 – –Provision for impairment recognised during the year 1,697 808 – –Receivables written off during the year (391) (2,373) – –Foreign currency exchange differences (777) (199) – –Transfer to assets held for sale (1,702) – – –30 June 1,160 2,333 – –

The allowance for doubtful debts of receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivable. In determining the recoverability of the receivables the Group considers any material changes in the credit quality of the receivable on an ongoing basis. Debts that are known to be uncollectible are written off. The provision for doubtful debts and the receivables written off are included in “other” in the income statement and a doubtful debts provision is created to the extent the uncollected receivables are not covered by collateral and/or credit insurance.

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 $’000 $’000 $’000 $’000

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note9–receivaBles(continueD)(b) As of 30 June 2008, trade debtors and customer loans

of $43,853,000 (2007 : $40,246,000) were past due but not impaired. The ageing analysis of these trade receivables is as follows:

Not past due 96,191 87,523 – –Past due 0-30 days 26,530 24,226 – –Past due 30-60 days 5,718 5,558 – –Past due 60-90 days 4,365 3,112 – –Past due 90 days + 7,240 7,281 – – 140,044 127,700 – –

* Includes trade debtors classified as assets held for sale

(c) As at 30 June 2008, the nominal value of trade debtors and customer loans impaired is $4,000,000 (2007 : $3,453,000).

note10–inventoriescurrent Raw materials and stores – at cost 51,670 73,334 – –Work in progress – at cost 16,286 17,189 – –Finished goods – at cost 21,252 49,834 – – 89,208 140,357 – –

note11–othercurrent Other – 279 – – – 279 – –

non‑current Deferred expenditure – 52 – –Less: Accumulated amortisation – (28) – – – 24 – –

Shares in controlled entities – at cost – – – 7,274Shares in controlled entities – at deemed cost – – 24,645 101,179Shares in other corporations – 37 – – – 37 24,645 108,453 – 61 24,645 108,453

note12–property,plantanDequipmentnon‑current LandandBuildings At fair value 67,145 133,828 270 270Less: Accumulated depreciation (3,862) (3,538) (67) (47)Total land and buildings 63,283 130,290 203 223

SaltFields At fair value 112,509 111,123 – –Total salt fields 112,509 111,123 – –

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 $’000 $’000 $’000 $’000

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note12–property,plantanDequipment(continueD)non‑current(continueD)PlantandEquipment At cost 168,403 277,796 1,752 1,786Less: Accumulated depreciation (100,062) (147,991) (1,613) (1,619)Plant and equipment under construction 12,407 13,735 – –Under finance lease 185 486 – –Less: Accumulated amortisation – (196) – –Total plant and equipment 80,933 143,830 139 167

Summary Property, plant and equipment: At cost 219,879 277,796 1,752 1,786 Under finance lease 185 486 – – At fair value 128,178 244,951 270 270 Under construction 12,407 13,735 – –Less: Accumulated depreciation (103,924) (151,725) (1,680) (1,666) 256,725 385,243 342 390

BasisofvaluationThe basis of valuation of land and buildings and salt fields is fair market value based on existing use. The valuations made by directors are based on the last independent valuation in 2006 carried out by qualified valuers in Australia and North America and other known factors in subsequent periods.

Current year additions made to land and buildings and salt fields are at cost which is deemed an appropriate measure of fair value.

reconciliationsReconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current financial year are set out below:

CONSOLIDATED PARENTENTITY LaNdaNd PLaNtaNd SaLt LaNdaNd PLaNtaNd BuiLdiNgS equiPmeNt FieLdS totaL BuiLdiNgS equiPmeNt totaL $’000 $’000 $’000 $’000 $’000 $’000 $’000

yearenDeD30june2007At1July2006Cost or fair value 143,822 298,598 110,669 553,089 4,370 3,800 8,170Accumulated depreciation (56) (148,359) – (148,415) (30) (3,662) (3,692)Carrying amount at 1 July 2006 143,766 150,239 110,669 404,674 4,340 138 4,478Additions 2,960 24,531 454 27,945 – 126 126Disposals (298) (1,472) – (1,770) (4,055) (32) (4,087)Transfer (59) 59 – – – – –Impairment loss* (3,977) (3,117) – (7,094) – – –Foreign currency exchange differences (8,468) (8,234) – (16,702) – – –Depreciation (notes 4 and 6) (3,634) (18,176) – (21,810) (62) (65) (127)Carrying amount at 30 June 2007 130,290 143,830 111,123 385,243 223 167 390

At30June2007Cost or fair value 133,828 292,017 111,123 536,968 270 1,786 2,056Accumulated depreciation (3,538) (148,187) – (151,725) (47) (1,619) (1,666)Carrying amount at 30 June 2007 130,290 143,830 111,123 385,243 223 167 390

* An impairment charge of $1,664,000 was charged directly to the revaluation reserve to reverse previous revaluations

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 $’000 $’000 $’000 $’000

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note12–property,plantanDequipment(continueD)reconciliations(continueD)yearenDeD30june2008 At1July2007 Cost or fair value 133,828 292,017 111,123 536,968 270 1,786 2,056Accumulated depreciation (3,538) (148,187) – (151,725) (47) (1,619) (1,666)Carrying amount at 1 July 2007 130,290 143,830 111,123 385,243 223 167 390Acquisitions 1,699 1,003 – 2,702 – – –Additions 6,081 23,210 1,386 30,677 – 108 108Disposals (693) (1,550) – (2,243) – (94) (94)Revaluation (926) – – (926) – – –Impairment loss* (5,325) (5,761) – (11,086) – – –Foreign currency exchange differences (6,721) (7,103) – (13,824) – – –Depreciation (notes 4 and 6) (3,068) (16,118) – (19,186) (20) (42) (62)Transfer to assets held for sale (58,054) (56,578) – (114,632) – – –Carrying amount at 30 June 2008 63,283 80,933 112,509 256,725 203 139 342

* An impairment charge of $1,068,000 was charged directly to the revaluation reserve to reverse revaluations

At30June2008Cost or fair value 67,145 180,995 112,509 360,649 270 1,752 2,022Accumulated depreciation (3,862) (100,062) – (103,924) (67) (1,613) (1,680)Carrying amount at 30 June 2008 63,283 80,933 112,509 256,725 203 139 342

CONSOLIDATED PARENTENTITY PateNtS, trademarkSaNd SoFtware goodwiLL otherrightS totaL SoFtware $’000 $’000 $’000 $’000 $’000

note13–intanGiBleassetsyearenDeD30june2007At1July2006 Cost 4,740 90,967 5,540 101,247 386Accumulated amortisation (3,598) (28,890) (422) (32,910) (386)Carrying amount at 1 July 2007 1,142 62,077 5,118 68,337 –Acquisitions/additions 744 – – 744 172Amortisation charge (772) – (109) (881) (9)Foreign currency exchange differences (54) (5,530) (588) (6,172) –Closing balance 1,060 56,547 4,421 62,028 163

At30June2007 Cost 5,172 83,341 4,852 93,365 558Accumulated amortisation (4,112) (26,794) (431) (31,337) (395)Carrying amount at 30 June 2007 1,060 56,547 4,421 62,028 163

yearenDeD30june2008At1July2007 Cost 5,172 83,341 4,852 93,365 558Accumulated amortisation (4,112) (26,794) (431) (31,337) (395)Carrying amount at 1 July 2007 1,060 56,547 4,421 62,028 163Additions 3,915 – – 3,915 2,002Acquisitions – – 922 922 –Amortisation charge (605) – (96) (701) (16)Transfer to assets held for sale (323) (36,010) (4,646) (40,979) –Foreign currency exchange differences 151 (4,622) (599) (5,070) –Closing balance 4,198 15,915 2 20,115 2,149

At30June2008Cost 7,136 25,800 2 32,938 2,560Accumulated amortisation (2,938) (9,885) – (12,823) (411)Carrying amount at 30 June 2008 4,198 15,915 2 20,115 2,149

CONSOLIDATED PARENTENTITY LaNdaNd PLaNtaNd SaLt LaNdaNd PLaNtaNd BuiLdiNgS equiPmeNt FieLdS totaL BuiLdiNgS equiPmeNt totaL $’000 $’000 $’000 $’000 $’000 $’000 $’000

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note13–intanGiBleassets(continueD)impairmenttestinGforGooDWillGoodwill is allocated to the Group’s cash generating units (CGUs) identified according to business segment. A segment level summary is presented below:

auStraLia SaLt FeedS totaL $’000 $’000 $’000

2008 5,017 10,898 15,9152007 5,017 10,898 15,915

The North American business segment is classified as discontinued in 2008 and assets have been classified as assets held for sale (refer note 6). The recoverable amount of assets held for sale is based on fair value less costs to sell.

The recoverable amount of a CGU is based on value-in-use calculations. The following describes each key assumption on which management has based its cash flow projections to undertake impairment testing of goodwill:(i) Cash flow forecasts are based on business plans presented to the Board.(ii) Forecast growth rates are based on management’s expectations of future performances. The growth rates applied to cash flows were

0% - 3% (2007: 0% - 5%). The growth rates of the CGUs are specific to each CGU.(iii) Discount rates used are the weighted average cost of capital (pre-tax) for the Group, risk adjusted where applicable for each business

segment and country. The pre-tax discount rates applied to cash flows were 14.5% - 17.4% (2007: 12.3% - 16.3%).

These assumptions have been used for the analysis in each CGU of goodwill within the business segment of continuing operations.

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000

note14–DeferreDtaXassetsnon‑current Deferred tax asset 438 419 764 769 438 419 764 769

Thebalancecomprisestemporarydifferencesattributableto: Doubtful debts 345 545 – –Employee benefits 4,523 5,519 578 584Retirement benefit obligations – 1,290 – 84Provisions 1,191 198 525 –Finance leases – 34 – –Other 420 324 203 151Property, plant and equipment – – 96 207Tax losses 438 5,549 – – 6,917 13,459 1,402 1,026

Amounts recognised directly in equity: Retirement benefit obligations – 2,652 – 63 6,917 16,111 1,402 1,089

Set-off of deferred tax liabilities pursuant to set-off provisions (note 17) (6,479) (15,692) (638) (320)Net deferred tax asset 438 419 764 769

movements: Opening balance at 1 July 16,111 16,723 1,089 932Foreign currency exchange differences (923) (1,147) – –Credited/(charged) to the income statement (32) 710 313 (158)Credited/(charged) to retained earnings (42) (175) – 63Transfers to assets held for sale (8,197) – – –Transfers from controlled entity – – – 252Closing balance at 30 June 6,917 16,111 1,402 1,089

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note14–DeferreDtaXassets(continueD)The gross value of deferred tax assets in respect to tax losses in controlled entities is $5,337,000 (2007: $9,743,000). The deferred tax assets relating to tax losses brought to account is $3,868,000 (2007: $5,549,000).

This benefit for tax losses will only be obtained if:(i) the consolidated entity derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions

for the losses to be realised; or(ii) the losses are transferred to an eligible entity in the consolidated entity; and(iii) the consolidated entity continues to comply with the conditions for deductibility imposed by tax legislation; and(iv) no changes in tax legislation adversely affect the consolidated entity in realising the benefit from the deductions for the losses.

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000

note15–payaBlescurrent Trade creditors and accruals 104,517 152,859 4,450 2,886 104,517 152,859 4,450 2,886

note16–BorroWinGs current Secured Bank overdraft and loans (note 31(ii)) 794 9,868 – –Lease liabilities 40 58 – –Unsecured Other loans 840 3,082 – – 1,674 13,008 – –

non‑current Secured Bank loans (a)(b) (note 33) 182,883 173,763 182,883 149,219Lease liabilities 140 43 – – 183,023 173,806 182,883 149,219

(a) Cash and bank overdrafts are netted where the bank accounts are with the same financial institution and where right of set-off exists. Bank overdrafts and loans are secured by a fixed and floating charge over certain assets of the consolidated entity.

(b) These loans are subject to bank covenants based on financial ratios of the Group. As at 30 June 2008 the Group was in compliance with these covenants.

note17–taXliaBilitiescurrent Income tax – 446 – – – 446 – –

non‑current Deferred income tax 10,357 34,575 – – 10,357 34,575 – –

theDeferreDincometaXBalancecomprisestemporaryDifferencesattriButaBleto: Inventories – 464 – –Retirement benefit assets 125 – 62 –Intangibles and goodwill – 7,196 – –Cash flow hedges – 163 84 163Other 59 401 53 58Property, plant and equipment 14,323 32,700 – – 14,507 40,924 199 221

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note17–taXliaBilities(continueD)amountsrecoGniseDDirectlyinequity Revaluation of property, plant and equipment 1,854 9,244 – –Cash flow hedges 328 99 229 99Retirement benefit assets 147 – 210 – 16,836 50,267 638 320

Set-off of deferred tax liabilities of the parent entity pursuant to set-off provisions (note 14) (6,479) (15,692) (638) (320)Net deferred tax liabilities 10,357 34,575 – –

movements: Opening balance at 1 July 50,267 56,109 320 566Foreign currency exchange differences (2,655) (4,550) – –Credited to the income statement (2,828) (863) (121) (105)Charged/(credited) to equity 4 (429) 439 99Transfer to liabilities held for sale (27,952) – – –Transfer to controlled entity – – – (240)Closing balance at 30 June 16,836 50,267 638 320

note18–provisionscurrentEmployee entitlements (note 27) 11,862 13,359 398 594Rationalisation 2,140 – – –Remediation 20 20 – – 14,022 13,379 398 594

non‑currentEmployee entitlements (note 27) 1,648 1,716 446 632Remediation 87 472 87 82 1,735 2,188 533 714

Movements in each class of provision, other than employee benefits, during the financial year are as follows:remeDiation Current Balance 1 July 2007 and 30 June 2008 20 20 – –

Non-current Balance 1 July 472 468 82 78Release of provision (390) – – –Additional provision recognised 5 4 5 4Balance 30 June 87 472 87 82

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 $’000 $’000 $’000 $’000

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note19–contriButeDequityFully paid up capital – 299,169,723 (2007: 291,932,266) authorised ordinary shares no par value 228,566 221,236

(a) Movements in issued and paid up ordinary share capital of the Company during the past two years were as follows:

iSSuePrice date detaiLS NumBeroFShareS $/Share $’000

June2006 Balance 281,763,824 210,633Oct 2006 Dividend Reinvestment Plan 4,597,512 1.13375 5,213Mar 2007 Dividend Reinvestment Plan 4,820,930 1.0726 5,171Various Shares purchased (562,421) 1.1372* (640)Apr 2007 Employee Share Scheme** 562,421 – 156Various Exercise of employee options 750,000 0.9367* 703June2007 Balance 291,932,266 221,236

Oct2007 DividendReinvestmentPlan 4,283,533 1.1156 4,776Mar2008 DividendReinvestmentPlan 2,953,924 1.0506 3,101Various Sharespurchased (670,582) 1.1293* (757)April2008 EmployeeShareScheme** 670,582 – 210June2008 Balance 299,169,723 228,566

* Weighted average price** The Group’s accounting policy is to treat these shares as “in-substance options”. Accordingly the Group recognises an increase in contributed equity only when it receives cash consideration

from an employee

At 30 June 2008, 2,675,049 (2007: 2,445,365) shares issued under the Ridley Employee Share Scheme have been accounted for as in-substance options.

The Company has established a Dividend Reinvestment Plan under which holders of ordinary shares may elect to have all or part of their dividend entitlements satisfied by the issue of ordinary shares.

Details of the Company’s option plan and share scheme are disclosed in note 27.

Ordinary shares entitle the holder to receive dividends and the proceeds on winding up the interest in proportion to the number of shares held. On a show of hands every shareholder present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

(b) At 30 June 2008, 1,600,000 (2007: 5,900,000) options and 1,632,000 performance rights (2007: 450,000) were on issue. These are exercisable at various dates up to 5 May 2011. Details are disclosed in note 27.

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000

note20–reservesanDretaineDprofits(a)reservesRevaluation reserve 54,405 55,785 13,283 13,283Share-based payments reserve 3,153 2,712 3,153 2,712Capital reserve 28,487 28,487 – –Cash flow hedge reserve 765 231 765 231Foreign currency translation reserve (30,531) (17,261) – – 56,279 69,954 17,201 16,226

movements: Revaluationreserve Balance at 1 July 55,785 56,814 13,283 14,181Impairment (1,068) (1,301) – –Disposals (655) (191) – (1,025)Transfer to minority interest due to the issue of shares by a controlled entity – (3) – –Deferred tax 343 466 – 127Balance at 30 June 54,405 55,785 13,283 13,283

PARENTENTITY

2008 2007 $’000 $’000

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note20–reservesanDretaineDprofits(continueD)movements(continueD): Share-basedpaymentsreserve Balance at 1 July 2,712 2,214 2,712 2,214Options and performance rights expense 441 498 441 498Balance at 30 June 3,153 2,712 3,153 2,712

Cashflowhedgereserve Balance at 1 July 231 – 231 –Revaluations 762 330 762 330Deferred tax (228) (99) (228) (99)Balance at 30 June 765 231 765 231

Foreigncurrencytranslationreserve Balance at 1 July (17,261) (1,577) – –Currency translation differences arising during the year (13,270) (15,741) – –Transfer to minority interest due to the issue of shares by a controlled entity – 57 – –Balance at 30 June (30,531) (17,261) – –

(B)retaineDprofitsMovements in retained profits were as follows: Balanceat1July 44,607 41,626 23,280 15,729Actuarial gains/(losses) on defined benefit superannuation and pension plans – net of tax 533 118 489 (147)Net profit for the year 10,505 22,673 21,604 26,564Dividends paid (20,585) (19,911) (20,586) (19,911)Less: Non-cash dividends paid on employee in-substance options 162 145 162 145Transfer on disposal of asset – net of tax 452 135 – 900Transfer to minority interest due to the issue of shares by a controlled entity – (179) – –Balanceat30June 35,674 44,607 24,949 23,280

(c)natureanDpurposeofreserves(i)RevaluationreserveRevaluation reserve is used to record increments and decrements on the revaluation of non-current assets. The balance standing to the credit of the reserve may be used to satisfy the distribution of bonus shares to shareholders and is only available for the payment of cash dividends in limited circumstances as permitted by law.

(ii)Share-basedpaymentsreserveThe share-based payments reserve is used to recognise the fair value of options and performance rights issued but not exercised.

(iii)CashflowhedgereserveThe cash flow hedge reserve is used to record gains and losses on hedging instruments that are recognised directly in equity. Amounts are recognised in the income statement when the associated hedge transaction affects the income statement.

(iv)ForeigncurrencytranslationreserveExchange differences arising on translation of the foreign controlled entity are taken to the foreign currency translation reserve. The reserve is recognised in the income statement when the net investment is disposed of.

(v)CapitalreserveThe reserve represents the excess over book value of the parent entity’s interest in the net assets of Ridley Inc after it was floated on the Toronto Stock Exchange in 1997.

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000

note21–minorityinterestInterest in: Share capital 26,410 26,410 – – Reserves (13,068) (7,065) – – Retained profits 35,583 33,088 – – 48,925 52,433 – –

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 $’000 $’000 $’000 $’000

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note22–equityTotal equity at the beginning of the financial year 388,230 394,070 260,742 242,757Total changes in equity recognised in the income statement 12,775 25,932 21,604 26,564Total changes recognised directly in equity (18,909) (23,107) 1,023 84Transactions with owners as owners Contributions of equity 7,331 10,603 7,331 10,603 Dividends paid (20,424) (19,766) (20,425) (19,764) Employee share options 441 498 441 498Total equity at the end of the financial year 369,444 388,230 270,716 260,742

note23–financialriskmanaGementanDcapitalriskmanaGementDerivativefinancialinstrumentsInterest rate swaps – cash flow hedges 1,041 590 1,041 544 1,041 590 1,041 544

capitalriskmanaGementWhen managing capital, the Group’s objective is to ensure it maintains optimal returns to shareholders and benefits for other stakeholders. The Group also aims to maintain a capital structure that ensures the optimal cost of capital available to the entity.

The Group is reviewing and where appropriate adjusting the capital structure to take advantage of favourable costs of capital or high returns on assets. The Group may change the amount of dividends to be paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Group monitors capital through the gearing ratio (net debt/total capital). The gearing ratios as at 30 June 2008 and 2007 are as follows:

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Gross debt 204,726 186,814 182,883 149,219Less: Cash (5,480) (14,967) (4,891) (6,974)Net debt 199,246 171,847 177,992 142,245Total equity 369,444 388,230 270,716 260,742Gearing ratio 53.9% 44.3% 65.7% 54.6%

financialriskmanaGementThe Group’s activities expose it to a variety of financial risks; market risk (including currency, fair value interest rate and price), credit, liquidity and cash flow interest rate risk. The Group’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial instruments such as foreign exchange contracts and interest rate swaps to hedge certain risk exposures.

Risk management is carried out by management under policies approved by the Board of Directors. Management evaluates and hedges financial risks where appropriate. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as mitigating foreign exchange interest rate and credit risks and investing excess liquidity.

(a)Marketrisk(i)ForeignexchangeriskForeign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the relevant entity’s functional currency. The Group operates internationally and is exposed to foreign exchange risk.

Forward contracts are used to manage foreign exchange risk. Management is responsible for managing exposures in each foreign currency by using external forward currency contracts. Where possible borrowings are made in the currencies in which the assets are held to reduce foreign currency translation risk.

Management designates contracts as fair value hedges or cash flow hedges, as appropriate. External foreign exchange contracts are designated as hedges of foreign exchange risk on specific assets, liabilities or future transactions. The Group and parent entity are not exposed to significant foreign exchange risk in respect to financial instruments because the financial instruments are held in the functional currency of the relevant entity.

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 $’000 $’000 $’000 $’000

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note23–financialriskmanaGementanDcapitalriskmanaGement(continueD)financialriskmanaGement(continueD)ForwardexchangecontractsForward foreign exchange contracts have been entered into in order to fix the cost of purchases and sales denominated in foreign currencies. The Group classifies forward foreign exchange contracts as fair value hedges held for trading and measures them at fair value. At 30 June 2008, the Group had contracted to sell JPY34,860,000 for A$401,000 (2007: sell JPY24,706,000 for A$236,000 and NZ$15,000 for A$14,000). There are no foreign exchange contracts with the parent entity. At 30 June 2008, an asset of $58,000 (2007: $8,000) was recognised by the Group (nil for 2008 and 2007 for the parent entity) for the fair value of forward foreign exchange contracts. The terms of the contracts are for less than one year.

The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised directly in equity. When the cash flows occur, the Group adjusts the initial measurement of the component recognised in the balance sheet by the related amount deferred in equity.

ForeigncurrencysensitivityThe sensitivity of the Group’s financial assets and financial liabilities to foreign currency risk exposures in existence at the balance sheet date is insignificant.

(ii)PriceriskThe Group is exposed to commodity price risk. A range of raw materials are purchased on a global and domestic basis. Approval levels and the forward purchasing of raw materials are monitored and restrictions are placed on the length and amount of forward purchases. The Group and parent entity are not exposed to any significant price risk in respect to financial instruments.

(iii)CashflowandfairvalueinterestrateriskAs the Group has no significant interest bearing assets, the Group’s income and operating cash flows are substantially independent of changes in market interest rates. The parent entity has interest bearing assets which are amounts owing from subsidiaries as shown in note 28. These are subject to fluctuations in market interest rates.

The Group’s and parent entity’s main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. Group and parent entity policy is to maintain approximately 50-85% of their borrowings in fixed rate instruments.

The Group and parent entity manage their cash flow interest rate risk by using floating to fixed interest rate swaps. Such interest rate swaps have the economic effect of converting borrowings from floating rates to fixed rates. Generally, the Group and parent entity raise long term borrowings at floating rates and swap them into fixed rates. Under the interest rate swaps, the Group and parent entity agree with other parties to exchange, at specified intervals (mainly quarterly), the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts. The settlement dates coincide with the date on which interest is payable on the underlying debt. The contracts are settled on a net basis.

At balance date, bank borrowings of the Group incur an average variable interest rate of 8.06% (2007: 6.94%).

Swaps currently in place cover approximately 55% (2007: 66%) of the loan principal outstanding and are timed to expire when the interest is payable on the outstanding debt. The average fixed interest rate on the swaps, including margins, is 7.63% (2007: 6.73%).

The fair value of interest rate swaps stated as a net asset at 30 June 2008 for the Group and parent entity was $1,041,000 (2007: $590,000 for the Group and $544,000 for the parent entity). The fair value of interest swaps as a net liability in the discontinued operation is $162,000 (2007: $46,000).

InterestrateriskexposuresThe Group’s and parent entity’s (including discontinued operations) exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and financial liabilities is set out below.

Exposures arise predominantly from assets and liabilities bearing variable interest rates as the consolidated entity intends to hold fixed rate assets and liabilities to maturity.

2008 2007 INTEREST BALANCE iNtereSt BaLaNceCONSOLIDATED RATE $’000 rate $’000

Bank loans 8.06% 201,885 6.94% 173,763 Interest rate swaps (principal notional amounts) 7.63% (115,227) 6.73% (116,064)Net exposure to variable rates 86,658 57,699 Overdraft and other loans 6.20% 2,620 6.86% 12,950 Finance leases 7.00% 221 6.00% 101

2008 2007 INTEREST BALANCE iNtereSt BaLaNcePARENTENTITY RATE $’000 rate $’000

Bank loans 8.50% 182,883 7.16% 149,219 Interest rate swaps (principal notional amounts) 7.86% (105,000) 6.94% (105,000)Net exposure to variable rates 77,883 44,219

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note23–financialriskmanaGementanDcapitalriskmanaGement(continueD)financialriskmanaGement(continueD)InterestratesensitivityThe following sensitivity analysis of the Group’s and Parent Entity’s financial assets and liabilities to interest rate risk exposures in existence at the balance sheet date is:

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007 NETPROFIT EquITY NetProFit equity NETPROFIT EquITY NetProFit equity $’000 $’000 $’000 $’000 $'000 $'000 $'000 $'000

If interest rates were 1% higher (631) (631) (361) (361) (688) (688) (385) (385)If interest rates were 1% lower 493 493 267 267 550 550 291 291

(b)CreditriskThe Group and parent entity have no significant concentrations of credit risk. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. The Group holds collateral and/or credit insurance over certain trade receivables.

Derivative counterparties and cash transactions are limited to high credit quality financial institutions. The Group has policies that limit the amount of credit exposure to any one financial institution.

CreditRiskExposuresCredit risk arises from the potential failure of counterparties to meet their obligations under the respective terms. The principal risk relates to trade and other receivables (refer note 9).

(c)LiquidityriskPrudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close-out market positions. Due to the dynamic nature of the underlying businesses, management aims at maintaining flexibility in funding by keeping committed credit lines available. Details of the finance facilities and maturities of financial liabilities are set out in this note.

TOTAL CONTRACTuAL LESSTHAN1YEAR 1TO2YEARS 2TO3YEARS CASHFLOWSCONSOLIDATED2008 $’000 $’000 $’000 $’000

Non-interestbearing Trade and other payables 173,177 – – 173,177Variablerate Loan and overdrafts – principal 2,621 201,885 – 204,506Loan and overdrafts – interest 16,444 1,353 – 17,797Fixedrate Lease liabilities – principal 81 65 74 220Lease liabilities – interest 7 6 7 20

totaL coNtractuaL LeSSthaN1year 1to2yearS 2to3yearS caShFLowScoNSoLidated2007 $’000 $’000 $’000 $’000

Non-interestbearing Trade and other payables 152,859 – – 152,859Variablerate Loan and overdrafts – principal 12,951 173,763 – 186,713Loan and overdrafts – interest 12,952 1,005 – 13,957Fixedrate Lease liabilities – principal 58 35 8 101Lease liabilities – interest 4 2 1 6

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note23–financialriskmanaGementanDcapitalriskmanaGement(continueD)financialriskmanaGement(continueD)(c)Liquidityrisk(continued)Non-interestbearing Trade and other payables 4,450 – – 4,450Variablerate –Loan and overdrafts – principal – 182,883 – 182,883Loan and overdrafts – interest 15,543 1,295 – 16,838

totaL coNtractuaL LeSSthaN1year 1to2yearS 2to3yearS caShFLowSPareNteNtity2007 $’000 $’000 $’000 $’000

Non-interestbearing Trade and other payables 2,886 – – 2,886Variablerate –Loan and overdrafts – principal – 149,219 – 149,219Loan and overdrafts – interest 10,684 890 – 11,574

(d)FairvalueestimationThe net fair value of cash and non-interest bearing monetary financial assets and liabilities of the Group approximates their carrying amounts.

The fair value of forward exchange contracts are estimated using listed market prices or by discounting the contractual cash flows at their forward price and deducting the current spot rate. For interest rate swaps, discounted cash flow techniques are used.

The net fair value of other monetary financial assets and financial liabilities is based upon market prices where a market exists or by discounting the expected future cash flows by the current interest rates for assets and liabilities with similar risk profiles.

The fair value of financial instruments is equal to their carrying amount for both the Group and the parent.

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000

note24–commitmentsforeXpenDitureCapital expenditure contracted for plant and equipment not later than one year 5,433 24,927 – 31

Commitments for non-cancellable operating leases: Due within 1 year 4,936 7,226 326 488Due within 1-2 years 3,140 5,227 49 325Due within 2-5 years 2,107 4,475 60 102Due after 5 years – 4,691 – – 10,183 21,619 435 915

Finance leases contracted for as follows: Due within 1 year 57 63 – –Due within 1-2 years 73 36 – –Due within 2-5 years 74 9 – –Minimum lease payments 204 108 – –

Deduct: Future finance charges 24 7 – –Lease liabilities 180 101 – –

TOTAL CONTRACTuAL LESSTHAN1YEAR 1TO2YEARS 2TO3YEARS CASHFLOWSPARENTENTITY2008 $’000 $’000 $’000 $’000

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note25–continGentliaBilitiesleGalclaimOn 5 February 2008, Ridley Inc (a 69% owned subsidiary of Ridley Corporation Limited) reached a settlement agreement with the plaintiffs in the Bovine Spongiform Encephalopathy (BSE) class action lawsuits filed against it and the Government of Canada, subject to the approval by the Canadian courts.

The settlement was approved by the Superior Court of Quebec in May 2008. Applications for approval of the settlement and certification of the action in Ontario were heard in June 2008 but the Superior Court of Ontario has not yet handed down its decision.

Under the settlement agreement Ridley Inc will pay C$6,000,000 into a plaintiffs’ settlement trust fund and will effectively cap its exposure to the claims made by the plaintiffs to that C$6,000,000. After approval by the Courts and provided the number of class member opt outs is below an agreed threshold, the settlement agreement will be finalised and Ridley Inc will pay the settlement amount.

Ridley Inc will remain a participant in the ongoing litigation as plaintiffs continue their claim against the Government of Canada and will continue to incur legal expenses, which will be funded from operating cash flow.

The actions were commenced in April 2005 and seek to certify class actions to include all Canadian cattle farmers who allegedly suffered damage as a result of the imposition of international bans on the import of Canadian beef and cattle following the May 2003 diagnosis of BSE in a cow in Alberta, Canada. Claims against Ridley Corporation Limited were struck out or discontinued in 2006.

As a result of the settlement, an amount of $6,136,000 (C$6,000,000) has been recognised within payables in the financial report within assets held for sale (refer note 6).

otherFees are payable by the Group, contingent on the outcome of the takeover bid by GrainCorp and the sale of Ridley Inc.

The Group has guaranteed certain debts and obligations of various customers totalling $1,765,000 (2007: $2,033,000).

Secured guarantees by the parent entity in respect of bank borrowings and other related obligations of controlled entities were $30,392,000 (2007: $36,223,751). The guarantees are secured by a fixed and floating charge over certain assets of the consolidated entity.

A controlled entity guarantees 50% of an associate’s bank debt to a maximum of $310,000 (2007: $310,000).

There were no other material contingent liabilities in existence at balance date.

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007 $ $ $ $

note26–remunerationofauDitorsAmounts received or due and receivable by the auditors for:(a) Auditing and review of financial reports PricewaterhouseCoopers – Australian firm 678,000 664,000 300,000 272,000 PricewaterhouseCoopers – related practices 468,668 439,225 – – Other auditors 6,156 7,053 – –

(b) Taxation compliance PricewaterhouseCoopers – Australian firm 80,590 58,000 80,590 58,000 PricewaterhouseCoopers – related practices 203,492 200,326 – –

(c) Other services PricewaterhouseCoopers – Australian firm AIFRS accounting services – 73,800 – 73,800 Taxation and other advice 49,436 19,000 49,436 19,000

PricewaterhouseCoopers – related practices Taxation and other advice 72,301 – – – 1,558,643 1,461,404 430,026 422,800

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note27–employeeentitlementsAggregate employee entitlements including on-costs Current (note 18) 11,862 13,359 398 594 Non-current (note 18) 1,648 1,716 446 632 13,510 15,075 844 1,226

equityplans(i)RidleyCorporationLong-termIncentivePlanRefer to the remuneration report for details.

The 2008 performance rights model inputs included:

Grant date 31October2007 7April2008 5May2008Expiry date 31October2010 7April2011 5May2011Share price at grant date $1.14 $1.11 $1.06Expected price volatility of the Company’s shares 25% 25% 25%Expected dividend yield 6.40% 6.76% 7.08%Risk-free interest rate 6.66% 6.21% 6.45%

The expected price volatility is based on the historic volatility (based on the remaining life of the performance rights), adjusted for any expected changes to future volatility due to publicly available information.

Details of performance rights outstanding under the plan at balance date are as follows:

BaLaNce graNted caNceLLed BaLaNce exPiry atStartoF duriNg duriNg ateNdoFgraNtdate date theyear theyear theyear theyear

31-Oct-06 31-Oct-09 450,000 – 450,000 –31-Oct-07 31-Oct-10 – 1,806,000 487,000 1,319,0007-Apr-08 7-Apr-11 – 45,000 – 45,0005-May-08 5-May-11 – 268,000 – 268,000 450,000 2,119,000 937,000 1,632,000

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 $’000 $’000 $’000 $’000

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note27–employeeentitlements(continueD)equityplans(continueD)(ii)RidleyCorporationIncentiveOptionPlanRefer to the remuneration report for details.

Details of options outstanding under the plan at balance date are as follows:

Consolidatedgroupandparententity2008

BALANCE GRANTED ExERCISED CANCELLED BALANCE ExERCISABLE ExERCISE ATSTARTOF DuRING DuRING DuRING ATENDOF ATENDOFGRANTDATE ExPIRYDATE PRICE THEYEAR THEYEAR THEYEAR THEYEAR THEYEAR THEYEAR

28Nov2002 28Nov2007 $1.50 166,667 – – 166,667 – –28Nov2002 28Nov2007 $1.57 166,667 – – 166,667 – –28Nov2002 28Nov2007 $1.65 166,666 – – 166,666 – –6Jan2003 6Jan2008 $1.70 83,333 – – 83,333 – –6Jan2003 6Jan2008 $1.79 83,333 – – 83,333 – –6Jan2003 6Jan2008 $1.87 83,334 – – 83,334 – –31Jan2003 31Jan2008 $1.63 516,670 – – 516,670 – –31Jan2003 31Jan2008 $1.71 516,665 – – 516,665 – –31Jan2003 31Jan2008 $1.80 516,665 – – 516,665 – –27Oct2003 27Oct2008 $1.54 166,667 – – 166,667 – –27Oct2003 27Oct2008 $1.61 166,667 – – 166,667 – –27Oct2003 27Oct2008 $1.69 166,666 – – 166,666 – –12Jan2004 12Jan2009 $1.36 699,997 – – 166,666 533,331 533,33112Jan2004 12Jan2009 $1.42 700,000 – – 166,667 533,333 533,33312Jan2004 12Jan2009 $1.50 700,003 – – 166,667 533,336 533,33625Oct2004 25Oct2009 $1.48 166,667 – – 166,667 – –25Oct2004 25Oct2009 $1.56 166,667 – – 166,667 – –25Oct2004 25Oct2009 $1.64 166,666 – – 166,666 – –31Oct2005 31Oct2010 $1.51 166,667 – – 166,667 – –31Oct2005 31Oct2010 $1.58 166,667 – – 166,667 – –31Oct2005 31Oct2010 $1.66 166,666 – – 166,666 – – 5,900,000 – – 4,300,000 1,600,000 1,600,000Weightedaverageexerciseprice $1.57 – – $1.62 $1.43 $1.43

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note27–employeeentitlements(continueD)equityplans(continueD)(ii)RidleyCorporationIncentiveOptionPlan(continued)

Consolidatedgroupandparententity2007

BaLaNce graNted exerciSed caNceLLed BaLaNce exerciSaBLe exerciSe atStartoF duriNg duriNg duriNg ateNdoF ateNdoFgraNtdate exPirydate Price theyear theyear theyear theyear theyear theyear

27 Sep 2001* 26 Sept 2006 $0.89 250,000 – 250,000 – – –29 Oct 2001* 29 Oct 2006 $0.96 500,000 – 500,000 – – –26 Feb 2002* 26 Feb 2007 $1.33 250,000 – – 250,000 – –26 Feb 2002* 26 Feb 2007 $1.40 250,000 – – 250,000 – –26 Feb 2002* 26 Feb 2007 $1.47 250,000 – – 250,000 – –28 Nov 2002 28 Nov 2007 $1.50 166,667 – – – 166,667 166,66728 Nov 2002 28 Nov 2007 $1.57 166,667 – – – 166,667 166,66728 Nov 2002 28 Nov 2007 $1.65 166,666 – – – 166,666 166,6666 Jan 2003 6 Jan 2008 $1.70 83,333 – – – 83,333 83,3336 Jan 2003 6 Jan 2008 $1.79 83,333 – – – 83,333 83,3336 Jan 2003 6 Jan 2008 $1.87 83,334 – – – 83,334 83,33431 Jan 2003 31 Jan 2008 $1.63 658,338 – – 141,668 516,670 516,67031 Jan 2003 31 Jan 2008 $1.71 658,331 – – 141,666 516,665 516,66531 Jan 2003 31 Jan 2008 $1.80 658,331 – – 141,666 516,665 516,66527 Oct 2003 27 Oct 2008 $1.54 166,667 – – – 166,667 166,66727 Oct 2003 27 Oct 2008 $1.61 166,667 – – – 166,667 166,66727 Oct 2003 27 Oct 2008 $1.69 166,666 – – – 166,666 –12 Jan 2004 12 Jan 2009 $1.36 816,663 – – 116,666 699,997 699,99712 Jan 2004 12 Jan 2009 $1.42 816,667 – – 116,667 700,000 700,00012 Jan 2004 12 Jan 2009 $1.50 816,670 – – 116,667 700,003 –25 Oct 2004 25 Oct 2009 $1.48 166,667 – – – 166,667 166,66725 Oct 2004 25 Oct 2009 $1.56 166,667 – – – 166,667 –25 Oct 2004 25 Oct 2009 $1.64 166,666 – – – 166,666 –31 Oct 2005 31 Oct 2010 $1.51 166,667 – – – 166,667 –31 Oct 2005 31 Oct 2010 $1.58 166,667 – – – 166,667 –31 Oct 2005 31 Oct 2010 $1.66 166,666 – – – 166,666 – 8,175,000 – 750,000 1,525,000 5,900,000 4,199,998Weighted average exercise price $1.50 – $0.94 $1.49 $1.57 $1.58

* Options granted before 7 November 2002 and vested before 1 January 2005 are not recognised as an expense

No options were exercised during the year ended 30 June 2008. The share price at the date of exercise of options exercised during the year ended 30 June 2007 was 250,000 at $1.14 and 500,000 at $1.11.

The weighted average contractual life remaining of options outstanding at the end of the year is 0.50 years (2007: 1.35 years).

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note27–employeeentitlements(continueD)equityplans(continueD)(iii)RidleyEmployeeShareSchemeRefer to the remuneration report for details.

(iv)RidleyIncLongTermIncentiveProgramRefer to the remuneration report for details.

Totalexpensesarisingfromshare-basedpaymenttransactionsTotal expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense were as follows:

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Options issued and cancelled under employee option plan (85) 59 (85) 59Shares issued under employee share scheme 362 393 362 393Performance rights issued and cancelled under incentive plan 164 46 164 46 441 498 441 498

superannuationfunDsRidley Corporation Limited and its controlled entities participate in a number of superannuation funds in Australia. The funds provide benefits either on a defined benefit or defined contribution basis for employees or their dependants on retirement, resignation, total and permanent disability, death and, in some cases, on temporary disablement.

The members and the Group make contributions as specified in the rules of the respective plans.

Group contributions in terms of awards and agreements are legally enforceable and, in addition, contributions for all employees have to be made at minimum levels for the Group to comply with its obligations. Other contributions are in the main not legally enforceable, with the right to terminate, reduce or suspend these contributions upon giving written notice to the trustees. The level of contributions to the defined benefit plans in the future will be reviewed on the advice of each fund’s actuary from time to time and at the time of the triennial or annual valuations. The basis of contributions to the various plans is determined as a percentage of members’ salaries or as required by the actuarial valuation.

pensionplansA controlled entity has non-contributory defined benefit pension plans covering substantially all of its US employees. The benefits for salaried employees are based on years of service and the employees’ level of compensation during specified periods of employment. The plan covering hourly employees generally provides benefits of stated amounts for each year of service. The controlled entity’s funding policy is consistent with US statutory regulations and equals the amount deducted for income tax purposes.

A controlled entity has a defined contribution pension plan covering substantially all of its Canadian employees.

postretirementhealthcareBenefitsA controlled entity provides post retirement health care benefits for US employees. These benefits are supplemental to statutory provided health care benefits. Post employment life insurance benefits are provided for a limited period of time. The costs of post employment health care and life insurance benefits are determined under the per capita claims cost method. Under this method, the controlled entity’s obligations are fully accrued by the date the employees attain full eligibility for such benefits. These plans are unfunded.

DefineDBenefitplans(i)BalancesheetamountsThe amounts recognised in the balance sheet are determined as follows:

POSTEMPLOYMENT SuPERANNuATIONPLANS PENSIONPLANS* MEDICALBENEFITS*1 AuSTRALIA uS uS

2008 2007 2008 2007 2008 2007CONSOLIDATED $’000 $’000 $’000 $’000 $’000 $’000

Present value of benefit obligation 4,158 5,591 25,045 28,804 2,643 2,872Fair value of the benefit plan assets (5,063) (5,663) (20,729) (24,328) – – (905) (72) 4,316 4,476 2,643 2,872Unrecognised past service costs – – – – 2,040 2,685Netliability/(asset)inthebalancesheet (905) (72) 4,316 4,476 4,683 5,557

* Discontinued operations1 Post employment medical benefits are unfunded

The Group has no legal obligation to settle these liabilities with immediate or additional one off contributions.

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note27–employeeentitlements(continueD)DefineDBenefitplans(continueD)(ii)CategoriesofplanassetsThe major categories of plan assets are as follows:

SuPERANNuATIONPLANS PENSIONPLANS* AuSTRALIA uS

CONSOLIDATED 2008 2007 2008 2007

Cash 8% 15% 10% 10%Equity instruments 60% 62% 40% 38%Debt instruments 10% 15% 50% 52%Property 12% 8% – –Other 10% – – –

* Discontinued operations

Asset allocation as at 30 June 2008.

(iii)Reconciliations

POSTEMPLOYMENT SuPERANNuATIONPLANS PENSIONPLANS* MEDICALBENEFITS*1 AuSTRALIA uS uS

2008 2007 2008 2007 2008 2007CONSOLIDATED $’000 $’000 $’000 $’000 $’000 $’000

Reconciliation of the present value of the defined benefit obligations: Balance at the beginning of the year 5,591 5,021 28,804 29,149 2,872 3,176Current service cost 115 135 1,598 1,729 226 272Interest cost 265 227 1,637 1,671 131 143Actuarial gains and losses (1,115) 1,025 (2,812) 394 (177) (263)Effects of curtailment – – (90) – 1 –Benefits paid (783) (932) (707) (661) (59) (51)Past service cost – – 23 462 – –Contributions by plan participants 85 115 – – – –Foreign exchange movement – – (3,408) (3,940) (351) (405)Balance at the end of the year 4,158 5,591 25,045 28,804 2,643 2,872

Reconciliation of the fair value of plan assets: Balance at the beginning of the year 5,663 5,156 24,329 23,627 – –Expected return on plan assets 363 317 2,092 2,065 – –Actuarial gains and losses (416) 815 (2,884) 754 – –Employer contributions 151 192 734 1,810 – –Contributions by plan participants 85 115 – – – –Benefits paid (783) (932) (696) (648) – –Foreign exchange movement – – (2,846) (3,280) – –Balance at the end of the year 5,063 5,663 20,729 24,328 – –

* Discontinued operations1 Post employment medical benefits are unfunded

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note27–employeeentitlements(continueD)DefineDBenefitplans(continueD)(iv)AmountsrecognisedinincomestatementThe amounts recognised in the income statement are as follows:

POSTEMPLOYMENT SuPERANNuATIONPLANS PENSIONPLANS* MEDICALBENEFITS*1 AuSTRALIA uS uS

2008 2007 2008 2007 2008 2007CONSOLIDATED $’000 $’000 $’000 $’000 $’000 $’000

Current service cost 115 135 1,598 1,729 226 272Interest cost 265 227 1,637 1,671 131 143Expected return on plan assets (363) (317) (2,092) (2,065) – –Past service cost – – 23 462 (350) (403)Total included in employee benefits expense 17 45 1,166 1,797 7 12Actual return on plan assets (53) 1,132 (793) 2,819 – –

* Discontinued operations1 Post employment medical benefits are unfunded

(v)PrincipalactuarialassumptionsThe principal actuarial assumptions used (expressed as weighted averages) were as follows:

POSTEMPLOYMENT SuPERANNuATIONPLANS PENSIONPLANS* MEDICALBENEFITS*1 AuSTRALIA uS uS

CONSOLIDATED 2008 2007 2008 2007 2008 2007

Discount rate 6.00% 5.80% 6.75% 6.00% 6.75% 6.00%Future salary increases 4.00% 4.00% 3.00% 3.00% – –Expected return on plan assets 6.75% 6.75% 9.00% 9.00% – –Health care trend rate – – – – 4.50% 4.50%

* Discontinued operations1 Post employment medical benefits are unfunded

The expected rate of return on plan assets has been based on historical and future expectations of returns for each of the major categories of asset as well as the expected and actual allocation of plan assets to these major categories.

(vi)Employercontributions(a) Australian superannuation plans – defined benefit planEmployer contributions to the plan are based on recommendations by the plan’s actuaries. Actuarial assessments are made at no more than three yearly intervals, and the last such assessment was made as at 1 July 2006.

The objective of funding is to ensure that the benefit entitlements of members and other beneficiaries are fully funded by the time they become payable. To achieve this objective, the actuaries have adopted a method of funding benefits known as the aggregate funding method. This funding method seeks to have benefits funded by means of a total contribution which is expected to be a constant percentage of members’ salaries over their working lifetimes.

Using the funding method described above and particular actuarial assumptions as to the plan’s future experience, the actuaries recommended in the actuarial review as at 1 July 2006, the payment of employer contributions to the fund of 10% of salaries for employees who are members of the defined benefit section. These contribution rates have been adopted by the Group from 31 December 2005 and represent a decrease of 5% of salaries in the Group’s contributions from that previously used. Total employer contributions expected to be paid by Group companies for the year ending 30 June 2009 are $134,000. Economic assumptions used by the actuary to make the funding recommendations were a long term investment earning rate, salary increases, together with an age related promotional scale and an inflation rate.

(b) US pension plansEmployer contributions to the plans are based on recommendation by the plans’ actuaries. Actuarial assessments are made annually with the last assessment made as at 30 April 2008.

The objective of funding is to ensure that the benefit entitlements of members and other beneficiaries are fully funded by the time they become payable. The required annual funding is calculated by the actuary based on plan assets and accrued actuarial liability. Funding requirements for the year ending 30 June 2009 have not been calculated at present but are expected to be approximately $1,572,000.

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note27–employeeentitlements(continueD)DefineDBenefitplans(continueD)(vii)Historicsummary

POSTEMPLOYMENT SuPERANNuATIONPLANS PENSIONPLANS* MEDICALBENEFITS*1 AuSTRALIA uS uS

2008 2007 2008 2007 2008 2007CONSOLIDATED $’000 $’000 $’000 $’000 $’000 $’000

Present value of defined benefit obligation 4,158 5,591 25,045 28,804 2,643 2,872Fair value of plan assets (5,063) (5,663) (20,729) (24,328) – –(Surplus)/deficit (905) (72) 4,316 4,476 2,643 2,872Experience adjustments (gain)/loss plan liabilities (1,115) 1,025 (2,812) 394 (177) (263)Experience adjustments (gain)/loss plan assets 416 (815) 2,884 (754) – –

* Discontinued operations1 Post employment medical benefits are unfunded

DefineDcontriButionplansActuarial assessments are not applicable to these types of plans as benefits are based on an accumulation of defined contributions. The Group sponsors the following plans:Ridley Superannuation Plan – Australia Staff Pension Plan for all Employees of Ridley Inc and Associated Companies – Canada

The amount of contribution expense recognised in the income statement is $6,800,000 (2007: $5,908,000).

note28–relateDpartyDisclosuresThe ultimate parent entity and controlling party is Ridley Corporation Limited.

DirectorsInformation on directors is disclosed in note 29.

otherrelateDpartiesSalpak Pty Ltd, Western Salt Refinery Pty Ltd, Dominion Salt Limited, Dominion Salt (N.I.) Limited and Cerebos-Skellerup Limited are associated entities due to the shareholding and representation by Ridley Corporation Limited or its subsidiaries on the board of directors. Information relating to material interests in associated entities is set out in note 37.

transactionsWithrelateDpartiesTransactions with each class of other related parties were as follows:

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Interest revenue – subsidiaries – – 28,072 22,095Dividend revenue – subsidiaries – – 15,945 22,786Management and directors’ fees – Management charges – – 7,835 7,688 Associated entities 118 84 – –Sales of products to associated entities 9,071 9,161 – –Purchases of products from associated entities 2,921 2,285 – –Current tax payable assumed from wholly-owned tax consolidated entities – – 2,072 1,264Sale of property, plant and equipment to subsidiaries – – – 4,063

Outstandingbalances Current receivables (tax funding agreement) Wholly-owned tax consolidated entities – – – 1,688Current payables (tax funding agreement) – – – Wholly-owned tax consolidated entities – – 2,072 424Current receivables – associated entities 710 592 – –Non-current receivable – subsidiaries – – 336,905 295,387

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note29–Directors’anDkeymanaGementpersonnelDisclosuresDisclosing entities that are companies no longer need to disclose details about each key management person in their financial report. These disclosures are made in the remuneration report under Corporations Regulations 2001 2M.3.03 Items 1 to 5.

Detailed remuneration disclosures are provided in the remuneration report.

keymanaGementpersonnelcompensation

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007

Short-term employee benefits 5,623,479 5,457,782 3,583,803 4,146,404Post-employment benefits 418,144 302,889 331,159 211,090Termination benefits 1,930,011 – 1,930,011 –Share-based payments 17,488 132,313 8,655 186,205Other 92,012 127,495 3,996 4,995 8,081,134 6,020,479 5,857,624 4,548,694

shareholDinGsThe numbers of shares in the parent entity held during the financial year by each director of Ridley Corporation Limited and each of the six key management personnel of the consolidated entity who hold shares, including their personally-related entities, are set out below:

received BaLaNce duriNgtheyear other BaLaNce attheStart oNtheexerciSe chaNgeS attheeNd oFtheyear oFoPtioNS duriNgtheyear oFtheyear

2008DirectorsofRidleyCorporationLimitedJ S Keniry 589,987 – 43,200 633,187R J Lee 69,366 – – 69,366M P Bickford-Smith1 488,316 – (488,316) –E B Bryan2 32,073 – (32,073) –R J Lotze3 110,365 – (110,365) –P M Mann4 – – 20,000 20,000J Murray5 1,759 – 35,493 37,252J M Spark6 – – 82,000 82,000A L Vizard 19,158 – 9,000 28,158I Wilton5 128,854 – 101,549 230,403OtherkeymanagementpersonneloftheconsolidatedentityA D Murdoch7 8,744 – (8,744) –

1 Ceased employment 20 December 20072 Resigned 31 October 20073 Resigned 10 June 20084 Appointed 4 March 20085 Appointed 7 May 20086 Appointed 21 January 20087 Ceased employment 7 April 2008

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note29–Directors’anDkeymanaGementpersonnelDisclosures(continueD)shareholDinGs(continueD)2007DirectorsofRidleyCorporationLimitedJ S Keniry 577,623 – 12,364 589,987R J Lee 69,366 – – 69,366M P Bickford-Smith 588,316 500,000 (600,000) 488,316E B Bryan 32,073 – – 32,073R J Lotze 110,365 – – 110,365A L Vizard 19,158 – – 19,158OtherkeymanagementpersonneloftheconsolidatedentityA D Murdoch 6,985 – 1,759 8,744J Murray – – 1,759 1,759I Wilton 102,410 – 26,444 128,854

RidleyIncshareholdings

received BaLaNce duriNgtheyear other BaLaNce attheStart oNtheexerciSe chaNgeS attheeNd oFtheyear oFoPtioNS duriNgtheyear oFtheyear

2008DirectorsofRidleyCorporationLimitedJ S Keniry 800 – – 800OtherkeymanagementpersonneloftheconsolidatedentityM S Mitchell 500 – – 500

2007 DirectorsofRidleyCorporationLimitedJ S Keniry 800 – – 800OtherkeymanagementpersonneloftheconsolidatedentityM S Mitchell 500 – – 500

Optionsgrantedandvested

NumBeroFoPtioNSgraNted NumBeroFoPtioNS duriNgtheyear veStedduriNgtheyear

DirectorsofRidleyCorporationLimitedM P Bickford-Smith* – 500,000I Wilton** – 133,334OtherkeymanagementpersonneloftheconsolidatedentityA D Murdoch*** – 116,667

* Ceased employment 20 December 2007** Appointed 7 May 2008*** Ceased employment 7 April 2008

Performancerightsgrantedandvested

NumBeroFPerFormaNcerightS NumBeroFPerFormaNcerightS graNtedduriNgtheyear veStedduriNgtheyear

DirectorsofRidleyCorporationLimitedJ Murray* 550,000 –I Wilton* 482,000 –

* Appointed 7 May 2008

received BaLaNce duriNgtheyear other BaLaNce attheStart oNtheexerciSe chaNgeS attheeNd oFtheyear oFoPtioNS duriNgtheyear oFtheyear

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note29–Directors’anDkeymanaGementpersonnelDisclosures(continueD)shareholDinGs(continueD)OptionholdingsThe numbers of options over ordinary shares in the Company held during the financial year by each director of Ridley Corporation Limited and each of the key management personnel of the consolidated entity, including their personally related entities, are set out below:

BaLaNceat graNtedduriNg veStedaNd theStartoF theyearaS exerciSed BaLaNceatthe exerciSaBLeatthe theyear remuNeratioN duriNgtheyear caNceLLed eNdoFtheyear eNdoFtheyear

DirectorsofRidleyCorporationLimitedM P Bickford-Smith* 2,000,000 – – (2,000,000) – –I Wilton** 800,000 – – (400,000) 400,000 400,000OtherkeymanagementpersonneloftheconsolidatedentityA D Murdoch*** 600,000 – – (600,000) – –

* Ceased employment 20 December 2007** Appointed 7 May 2008*** Ceased employment 7 April 2008

No options are vested and unexercisable at the end of the year.

LoanstodirectorsandexecutivesAggregate of loans made to directors of Ridley Corporation Limited and the key management personnel of the consolidated entity including their personally-related entities, are set below:

BaLaNceat BaLaNceat NumBeriNgrouP theStartoF theeNdoF attheeNdoF theyear theyear theyear2008 $ $

Directors of Ridley Corporation Limited Nil 6,316 2Other key management personnel of the consolidated entity 6,678 – –

2007

Directors of Ridley Corporation Limited Nil Nil NilOther key management personnel of the consolidated entity 5,279 6,678 3

The loans are interest-free and secured against shares issued under the Ridley Employee Share Scheme.

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note30–BusinessanDGeoGraphicalDataBusinessseGmentData–2008Sales – external 95,267 742,341 – – 837,608 709,041 1,546,649Sales – internal 1,991 – – (1,991) – – –Totalsalesrevenue 97,258 742,341 – (1,991) 837,608 709,041 1,546,649Other revenue 447 663 19 – 1,129 866 1,995Totalrevenue 97,705 743,004 19 (1,991) 838,737 709,907 1,548,644Share of profit of associates 6,865 – – – 6,865 – 6,865Result from operations before significant items 24,800 15,010 (7,612) – 32,198 27,928 60,126Significant items (2,225) (8,351) (4,219) – (14,795) (9,890) (24,685)Result from operations 22,575 6,659 (11,831) – 17,403 18,038 35,441Net finance costs (14,700) (2,038) (16,738)Profitfromcontinuingoperationsbeforeincometax 2,703 16,000 18,703Income tax expense 2,798 (8,726) (5,928)Netprofit 5,501 7,274 12,775Segment assets 270,428 251,944 7,332 – 529,704 273,798 803,502Segment liabilities 13,322 101,570 200,436 – 315,328 118,730 434,058Investment in associates 44,233 – – – 44,233 – 44,233Acquisitions of property, plant and equipment, intangibles and other non-current segment assets 9,235 13,539 244 – 23,018 15,197 38,215Depreciation and amortisation expense 4,157 7,607 664 – 12,428 8,286 20,714

BusinessseGmentData–2007*

Sales – external 90,884 667,244 – – 758,128 681,698 1,439,826Sales – internal 2,692 – – (2,692) – – –Totalsalesrevenue 93,576 667,244 – (2,692) 758,128 681,698 1,439,826Other revenue 213 1,138 1,490 – 2,841 1,119 3,960Totalrevenue 93,789 668,382 1,490 (2,692) 760,969 682,817 1,443,786Share of profit of associates 6,288 – – – 6,288 – 6,288Result from operations before significant items 23,334 18,371 (7,912) – 33,793 20,843 54,636Significant items – (1,544) – – (1,544) (4,250) (5,794)Result from operations 23,334 16,827 (7,912) – 32,249 16,593 48,842Net finance costs (12,601) (1,543) (14,144)Profitfromcontinuingoperationsbeforeincometax 19,648 15,050 34,698Income tax expense (4,157) (4,609) (8,766)Netprofit 15,491 10,441 25,932Segment assets 262,242 234,747 12,310 – 509,299 279,225 788,524Segment liabilities 11,226 103,555 174,277 – 289,058 111,236 400,294Investment in associates 44,073 – – – 44,073 – 44,073Acquisitions of property, plant and equipment, intangibles and other non-current segment assets 5,560 12,508 299 – 18,367 10,299 28,666Depreciation and amortisation expense 3,755 7,279 613 – 11,647 11,883 23,530

* Restated for classification of Ridley Inc as held for sale

BusinessseGmentsThe consolidated entity is organised into the following divisions by product type:

Australiafeeds Produces and markets stock and poultry feeds, aquafeeds, vitamins, mineral supplements and rural merchandise.

Salt Produces, refines and markets salt and has investments in associated companies.

Discontinued Produces and markets stock and poultry feeds, vitamins, mineral supplements and rural merchandise in North America operations (refer to note 6).

The basis of intersegmental transfers is market pricing.

Results are calculated on a before net borrowing costs and tax expense basis. Segment assets exclude deferred tax assets and cash, which have been included as unallocated assets.

auStraLia CONTINuING diScoNtiNued SaLt FeedS uNaLLocated eLimiNatioNS OPERATIONS oPeratioNS totaLBuSiNeSSSegmeNtS $’000 $’000 $’000 $’000 $’000 $’000 $’000

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note31(i)–reconciliationofnetcashinfloWfromoperatinGactivitiestoprofitafterincometaXNet cash inflow from operating activities 16,424 37,384 21,245 25,651

Depreciation and amortisation (20,924) (23,530) (664) (610)Net profit/(loss) on sale of non-current assets (83) (739) (8) 5Gain on transfer of non-current assets – – – 900Other 125 247 (170) (14)Significant items (asset impairments) (14,921) (5,430) – –Dividends in excess of equity profits (517) 412 – –Non-cash share-based payments (441) (498) (441) (498)Non-cash retirement benefit expense (17) (1,830) (17) –Contributions to retirement benefits 151 2,002 151 –

Changeinoperatingassetsandliabilities,netofeffectsfrompurchaseandsaleofcontrolledentitiesandbusiness:

Increase in trade debtors and impairment provision 16,530 18,144 – –Increase in inventories 28,589 12,064 – –Increase in deferred tax assets 19 419 434 403Increase/(decrease) in other debtors 5,489 (1,357) 2,141 248Increase/(decrease) in prepayments (193) 827 (14) 506Increase in retirement obligations 134 – 134 –(Increase)/decrease in trade creditors (20,400) (16,009) (1,564) 112(Increase)/decrease in employee provisions 74 (32) 382 (135)(Increase)/decrease in other provisions (1,754) 21 (5) (4)Decrease in provision for income tax payable 2,272 962 – –Increase in provision for income tax – (1,408) – –Decrease in provision for deferred income tax 2,218 4,283 – –Profit for the year 12,775 25,932 21,604 26,564

note31(ii)–reconciliationofcashCash at the end of the financial year as shown in the statements of cash flows is reconciled to the related items in the balance sheets as follows:

Cash 1,441 14,151 4,891 6,974Cash – discontinued operation (note 6) 3,644 – – –Short-term deposits 395 816 – – 5,480 14,967 4,891 6,974

Bank overdraft – (12,950) – –

Total cash 5,480 2,017 4,891 6,974

note32–non‑cashfinancinGanDinvestinGactivitiesDuring the year, dividends of $7,877,000 (2007: $10,383,000) were satisfied by the issue 7,237,457 (2007: 9,418,442) shares under the Dividend Reinvestment Plan.

CONSOLIDATED PARENTENTITY

2008 2007 2008 2007 $’000 $’000 $’000 $’000

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note33–financefacilitiestermloanfacilitiesGlobalfinancefacilityIn October 2001, the consolidated entity entered into a global facility agreement with a consortium of Australian and international banks. The facility has been amended a number of times with the most recent in July 2008 when the terms and limits of the facility were amended with an expiry date of 31 July 2010. A$26,700,000 and US$20,000,000 of the facility limits are subject to annual review with the balance expiring on 31 July 2010. The key covenant ratios under the facility are interest cover, debt cover, gearing and consolidated net worth. The facility is secured by fixed and floating charges over Group assets.

CONSOLIDATED 2008 2007 LIMITS uTILISED LimitS utiLiSed $’000 $’000 $’000 $’000

Australian dollars 215,000 183,300 215,000 150,000United States dollars 67,000 8,000 67,000 8,000Canadian dollars 26,000 10,000 26,000 14,000

shorttermcreDitfacilitiesAustralianDollarFacilityThe consolidated entity has a $6,500,000 (2007: $6,500,000) net overdraft facility, subject to annual review. At 30 June 2008 and 2007, it was unutilised.

unitedStatesDollarFacilitiesThe consolidated entity has US$4,000,000 (2007: US$4,000,000) open lines of credit subject to annual review. At 30 June 2008, US$900,000 (2007: US$2,615,000) was utilised.

CanadianDollarFacilityThe consolidated entity has a C$5,000,000 (2007: C$5,000,000) overdraft facility, subject to annual review. At 30 June 2008, Nil (2007: C$1,166,0000) was utilised.

CONSOLIDATED 2008 2007

note34–earninGspershareBasic earnings per share from continuing operations 1.9c 5.4cBasic earnings per share from discontinued operations 1.7c 2.5cBasic earnings per share 3.6c 7.9c

Diluted earnings per share from continuing operations 1.9c 5.4cDiluted earnings per share from discontinued operations 1.7c 2.5cDiluted earnings per share 3.6c 7.9c

2008 2007 EARNINGSPERSHARE earNiNgSPerShare

BASIC DILuTED BaSic diLuted $’000 $’000 $’000 $’000

Profitfromcontinuingoperationsafterincometax 5,501 5,501 15,491 15,491Profit from discontinued operations 7,274 7,274 10,441 10,441Net profit attributable to minority interest 2,270 2,270 3,259 3,259Profitattributabletomembersandearningsusedincalculatingearningspershare 10,505 10,505 22,673 22,673

BASIC DILuTED BaSic diLuted

WeightedaveragenumberofsharesusedasthedenominatorWeighted average number of shares on issue 295,937,664 295,937,664 288,004,191 288,004,191Plus dilutive options and performance rights below share price – – – –Weighted average number of shares used as the denominator in calculating basic and diluted earnings per share 295,937,664 295,937,664 288,004,191 288,004,191

2,675,049 shares issued under the Ridley Employee Share Scheme have been accounted for as in-substance options.

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note34–earninGspershare(continueD)optionsOptions granted to employees under the Ridley Corporation Limited Incentive Option Plan are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share. 1,600,000 (2007: 5,900,000) options and 1,632,000 (2007: 450,000) performance rights have not been included in the determination of diluted earnings per share. Details relating to the options and performance rights are set out in note 27.

note35–investmentincontrolleDentitiesBusinessesanDcontrolleDentitiesacquireD2008On 10 March 2008, Ridley Inc (a discontinued operation) acquired substantially all the assets and liabilities of 4 Seasons Marketing LLC and its affiliate, Ultralyx Inc, a manufacturer of feed supplements blocks, for a consideration of $1.6 million (US$1.5 million). This business did not form a significant part of the income statement for the year and has been included in discontinued operations in Ridley Inc.

2007There were no acquisitions during the year.

COuNTRYOF CLASS EquITYOFNAMEOFENTITY INCORPORATION OFSHARES PARENTENTITY 2008 2007

Ridley AgriProducts Pty Ltd and its controlled entities Australia Ordinary 100% 100% AgriProducts Pty Ltd Australia Ordinary 100% 100% Farmstock Pty Limited and its controlled entity Australia Ordinary 100% 100% Farmstock Milling Pty Ltd Australia Ordinary 100% 100% Noske Flour Mills Pty Ltd Australia Ordinary 100% 100% Ridley Australia Pty Ltd Australia Ordinary 100% 100% Ridley AgriProducts (Aust.) Pty Ltd. Australia Ordinary 100% 100% Ridley Liquids JV Pty Limited Australia Ordinary 100% 100% Ridley AgriProducts (NZ) Pty Ltd New Zealand Ordinary 100% 100%Barastoc Stockfeeds Pty Ltd and its controlled entities Australia Ordinary 100% 100% Fosforlic Feed Supplements Pty Ltd Australia Ordinary 100% 100% Rumevite Pty Ltd Australia Ordinary 100% 100%Cheetham Salt Limited and its controlled entities Australia Ordinary 100% 100% CSL (No.3) Pty Limited Australia Ordinary 100% 100% Salt Australia Pty Ltd Australia Ordinary 100% 100% Ocsalt Pty Ltd Australia Ordinary 100% 100% Queensland Salt Pty Ltd Australia Ordinary 100% 100% PT Cheetham Garam and its controlled entity Indonesia Ordinary 100% 100% PT Cheetham International Trading Indonesia Ordinary 100% 100% Sea Lake Salt Pty Ltd Australia Ordinary 100% 100% Mastersalt Pty Ltd Australia Ordinary 100% 100% Cheetham (Dry Creek) Pty Ltd Australia Ordinary 100% 100%Diamond Salt Pty Limited Australia Ordinary 100% 100%RCL Investments Pty Limited Australia Ordinary 100% 100%RCL Retirement Pty Limited Australia Ordinary 100% 100%Ridley Research & Development Corporation Pty Limited Australia Ordinary 100% 100%RCL Nominees Pty Ltd Australia Ordinary 100% 100%Ridley M I Pty Limited Australia Ordinary 100% 100%Ridley Inc. and its controlled entities Canada Ordinary 69% 69% Ridley Manitoba Limited Canada Ordinary 69% 69% Ridley Limited Partnership and its controlled entity USA Ordinary 69% 69% Ridley Nova Scotia LLC and its controlled entity Canada Ordinary 69% 69% HFI Finance LLC USA Ordinary 69% 69% Cotswold Holdings ULC and its controlled entity USA Ordinary – 69% Ridley UK Holdings Limited UK Ordinary – 69% Feed-Rite, Inc. USA Ordinary 69% 69% Ridley US Holding Inc. and its controlled entities USA Ordinary 69% 69% Hubbard Feeds Inc. and its controlled entities USA Ordinary 69% 69% Hubbard Feeds Management Company USA Ordinary 69% 69% Ridley Block Operations, Inc. USA Ordinary 69% 69% Sweetlix, Inc. USA Ordinary 69% 69% McCauley Brothers, Inc. USA Ordinary 69% 69%

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note36–DeeDofcrossGuaranteeRidley Corporation Limited, Ridley AgriProducts Pty Ltd, Cheetham Salt Limited and Cheetham (Dry Creek) Pty Ltd are parties to a deed of cross guarantee under which each company guarantees the debts of the others.

(a)consoliDateDincomestatementanDasummaryofmovementsinconsoliDateDretaineDprofitsThe above companies represent a Closed Group for the purposes of the Class Order, and as there are no other parties to the Deed of Cross Guarantee that are controlled by Ridley Corporation Limited, they also represent the Extended Closed Group.

Set out below is a consolidated income statement and a summary of movements in consolidated retained profits for the year ended 30 June 2008 of the Closed Group consisting of Ridley Corporation Limited, Ridley AgriProducts Pty Ltd, Cheetham Salt Limited and Cheetham (Dry Creek) Pty Ltd. During the year, Ridley AgriProducts Pty Ltd was included in the Closed Group.

CONSOLIDATED 2008 2007 $’000 $’000

Sales revenue from continuing operations 822,209 86,639Cost of sales 755,882 60,137Grossprofit 66,327 26,502Other revenues from continuing operations 20,173 29,092Other income 236 103Other expenses from continuing operations Selling and distribution (14,832) (3,208) General and administrative (27,227) (16,346) Finance costs (15,111) (12,774) Impairment of assets and restructure costs (10,576) – Other (6,946) (1,907)Profitfromcontinuingoperationsbeforeincometaxexpense 12,044 21,462Income tax/(benefit) expense (3,107) 2,564

Profitfromcontinuingoperationsafterincometaxexpense 15,151 18,898

SummaryofmovementsinconsolidatedretainedprofitsRetainedprofitsatthebeginningofthefinancialyear 22,381 23,396Accumulated losses of Ridley AgriProducts (15,311) –Actuarial gains/(losses) on defined superannuation benefit, net of tax 489 (147)Profit for the year 15,151 18,898Dividends provided for or paid (20,586) (19,911)Less: Non-cash dividends paid on employee in-substance options 162 145Retainedprofitsattheendofthefinancialyear 2,286 22,381

(B)BalancesheetCurrentassets Cash and cash equivalents 1,169 12,456Receivables 111,602 13,782Inventories 87,359 33,412Assets of disposal group classified as held for sale 83,808 –Totalcurrentassets 283,938 59,650

Non-currentassets Receivables 4,310 109,618Property, plant and equipment 234,097 148,756Intangible assets 15,130 5,303Other non-current assets 81,849 158,132Totalnon-currentassets 335,386 421,809

Totalassets 619,324 481,459

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note36–DeeDofcrossGuarantee(continueD)(B)Balancesheet(continueD)Currentliabilities Payables 102,229 9,979Provisions 14,022 3,603Borrowings 880 –Totalcurrentliabilities 117,131 13,582

Non-currentliabilities Borrowings 183,023 149,219Deferred tax liabilities 10,741 15,078Provisions 1,735 1,407Totalnon-currentliabilities 195,499 165,704

Totalliabilities 312,630 179,286

Netassets 306,694 302,173

Equity Contributed equity 228,566 221,236Reserves 75,842 58,556Retained profits 2,286 22,381

Totalequity 306,694 302,173

OWNERSHIPINTEREST CARRYINGAMOuNT PriNciPaL couNtryoF 2008 2007NameoFcomPaNy activity iNcorPoratioN 2008 2007 $’000 $’000

note37–investmentsinassociatesconsoliDateDSalpak Pty Ltd Salt Marketing Australia 49% 49% 14,066 14,066Western Salt Refinery Pty Ltd Salt Production and Distribution Australia 50% 50% 1,455 1,270Dominion Salt Limited and Dominion Salt (N.I.) Limited Salt Production and Distribution New Zealand 50% 50% 26,408 26,410Cerebos-Skellerup Limited Salt Marketing New Zealand 49% 49% 2,304 2,327Total 44,233 44,073

The above comprise interests in the ordinary share capital of the associates. The balance date of Salpak Pty Ltd and Cerebos-Skellerup Limited is 30 September, and 30 June for Western Salt Refinery Pty Ltd, Dominion Salt Limited and Dominion Salt (N.I.) Limited.

movementsincarryinGamountsofinvestmentsinassociatesSummary of the performance and financial position of the associates is as follows:

2008 2007 $’000 $’000

Carrying amount at the beginning of the financial year 44,073 44,074

Additional capital contribution 185 –Share of operating profits after income tax 6,865 6,288Dividends received/receivable (6,890) (6,289)

Carrying amount at the end of the financial year 44,233 44,073

CONSOLIDATED

2008 2007 $’000 $’000

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note37–investmentsinassociates(continueD)movementsincarryinGamountsofinvestmentsinassociates(continueD)Operating profits before income tax 10,077 8,985Income tax expense 3,225 (2,697)

Operating profits after income tax 6,852 6,288Less: Dividends payable/paid 6,890 6,289 (38) (1)

Accumulated losses attributable to associates at the beginning of the financial year (9,403) (9,402)Accumulated losses attributable to associates at the end of the financial year (9,441) (9,403)

Consolidated entity’s share:

Assets 44,146 48,349Liabilities 6,398 11,047Contingent liabilities 26 30Operating lease commitments 52 536

There are no material reserves of the associated companies.

note38–interestsinjointventuresjointventureoperationsControlled entities have a 50% participating interest in two joint venture operations, Champion Liquid Feeds Joint Venture and Ridley TSS Joint Venture. These joint ventures produce and market stockfeed. The consolidated entity is entitled to 50% of the output of the joint ventures. The consolidated entity’s interests in the assets employed in the joint ventures are included in the consolidated balance sheet.

CONSOLIDATED PARENTENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Current assets Cash 686 1,155 – –Receivables 2,098 1,821 – –Inventories 749 409 – –Other – – – –Total current assets 3,533 3,385 – –Non-current assets Plant and equipment – at cost 3,012 944 – –Less: Accumulated depreciation (149) (104) – –Total non-current assets 2,863 840 – –

Share of assets employed in joint venture 6,396 4,225 – –

The consolidated entity’s share of operating lease commitments is $6,000 (2007: $6,000).

note39–postBalanceDateeventsNo other matters or circumstances have arisen since 30 June 2008 that have significantly affected, or may significantly affect:(i) the consolidated entity’s operations in future financial years; or(ii) the results of those operations in future financial years; or(iii) the consolidated entity’s state of affairs in future financial years.

2008 2007 $’000 $’000

nOTES TO ThE financial STaTEMEnTS 30 JunE 2008

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In the directors’ opinion:

(a) The financial statements and notes set out on pages 43 to 88 and the remuneration report on pages 29 to 38 are in accordance with the Corporations Act 2001, including:

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

(ii) giving a true and fair view of the Company’s and consolidated entity’s financial position as at 30 June 2008 and of their performance, as represented by the results of their operations and their cash flows, for the financial year ended on that date.

(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

(c) In the opinion of the directors, as at the date of this declaration, there are reasonable grounds to believe the members of the Extended Closed Group identified in note 36 will be able to meet any obligations or liabilities to which they are or may be become subject, by virtue of the Deed of Cross Guarantee.

(d) The audited remuneration disclosures set out on pages 29 to 38 of the annual report comply with AASB 124 Related Party Disclosures and the Corporations Regulations 2001.

The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations Act 2001.

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

JSKENIRY director

PMMANN director

Sydney 25 August 2008

diREcTORS, dEclaRaTiOn

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Independent audItor’s report to the members of rIdley CorporatIon lImItedReport on the financial report We have audited the accompanying financial report of Ridley Corporation Limited (the company), which comprises the balance sheet as at 30 June 2008, and the income statement, statement of recognised income and expense and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration for both Ridley Corporation Limited and the Ridley Corporation Group (the consolidated entity). The consolidated entity comprises the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ responsibility for the financial reportThe directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report.

For further explanation of an audit, visit our website http://www.pwc.com/au/financialstatementaudit.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

IndependenceIn conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s opinion In our opinion:(a) the financial report of Ridley Corporation Limited is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2008 and of their performance

for the year ended on that date; and (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations

2001; and(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 1.

Report on the Remuneration ReportWe have audited the Remuneration Report in the directors’ report for the year ended 30 June 2008. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion In our opinion, the Remuneration Report of Ridley Corporation Limited for the year ended 30 June 2008, complies with section 300A of the Corporations Act 2001.

Matters relating to the electronic presentation of the audited financial reportThis auditor’s report relates to the financial report and remuneration report of Ridley Corporation Limited (the company) for the year ended 30 June 2008 included on Ridley Corporation Limited website. The company’s directors are responsible for the integrity of the Ridley Corporation Limited website. We have not been engaged to report on the integrity of this website. The auditor’s report refers only to the financial report and remuneration report named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these statements or the remuneration report. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report and remuneration report to confirm the information included in the audited financial report and remuneration report presented on this website.

PricewaterhouseCoopers

Steve BouRke Partner

Sydney 25 August 2008

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holDinGsofsecurities–orDinaryshares Each fully paid 6,959 299,169,723 79.16

No.oF No.oF ordiNary ordiNaryNumBerheLd hoLderS ShareS

DistriButionofholDinGs–orDinaryshares 1 to 1,000* 1,231 504,281 1,001 to 5,000 2,757 8,138,223 5,001 to 10,000 1,407 10,285,907 10,001 to 100,000 1,488 33,353,390 100,001 and over 76 246,887,922

* There are 449 holders of less than a marketable parcel of shares

%oFFuLLy NumBer PaidordiNary heLd ShareS

tWentylarGestfullypaiDshareholDers National Nominees Ltd 62,668,556 20.95RBC Dexia Investor Services Australia Nominees (BKCUST A/c) 47,146,727 15.76J P Morgan Nominees Aust Ltd 26,841,562 8.97HSBC Custody Nominees (Aust) Limited 26,555,295 8.88RBC Dexia Investor Services Australian Nominees 19,363,937 6.47PW Holmes A Court Pty Ltd 13,639,769 4.56Citicorp Nominees P/L 11,297,398 3.78Cogent Nominees 5,622,828 1.88ANZ Nominees (Cash Income) 4,668,008 1.56Sandhurst Trustees Ltd (SISF A/c) 4,588,301 1.53Citicorp Nominees P/L (CFSIL Cwlth Shs 18 A/c) 3,362,475 1.12Merrill Lynch (Australia) Nominees (BPB A/c) 2,966,046 0.99Citicorp Nominees P/L (CFSIL Cwlth Shs 14 A/c) 2,840,990 0.95HSBC Custody Nominees (Aust) Limited A/c 3 1,000,439 0.33Citicorp Nominees (CFSIL Cwlth Aust Shs 17 A/c) 938,625 0.31Queensland Investment Corporation 818,233 0.27HSBC Custody Nominees (Australia) A/c 2 677,191 0.23Citicorp Nominees (CFSIL Cwlth Sml Cos 3 A/c) 667,994 0.22Forum Investments Pty Ltd 600,000 0.20Gwynvill Trading Pty Ltd 600,000 0.20 236,864,374 79.16

suBstantialshareholDers GrainCorp Limited* 19.31Investors Mutual Limited* 19.43Lazard Asset Management 11.19Perennial Value Management Ltd/IOOF 9.07Maple Brown Abbott 6.48National Australia Bank 7.45Orbis Investment Management 6.08

* Investors Mutual Limited has an interest in 57,077,918 ordinary shares held by GrainCorp Limited under the terms of their pre-bid acceptance agreement. On 27 August 2008, GrainCorp Limited advised that as the conditions of the takeover bid had not been fulfilled, they no longer held a relevant interest in any Ridley Corporation Limited securities

ShaREhOldER infORMaTiOn aS aT 25 auguST 2008

%heLdBy No.oF No.oF 20LargeSt hoLderS SecuritieS hoLderS

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ShaREhOldER infORMaTiOn aS aT 25 auguST 2008

Directors’holDinGs On 25 August 2008, the directors of Ridley Corporation Limited had an interest in the following shares, employee options and performance rights of the Company.

FuLLyPaid ridLey ridLey ordiNary emPLoyee PerFormaNce ridLeyiNc ShareS oPtioNS rightS ShareS

J S Keniry 633,187 – – 800R J Lee 69,366 – – –J Murray 37,252 – 550,000 –P M Mann 20,000 – – –J M Spark 82,000 – – –A L Vizard 28,158 – – –I Wilton 230,403 400,000 482,000 –

votinGriGhts As at 25 August 2008, the number of fully paid ordinary shares with full voting rights was 6,959. On a show of hands, every person who is a member or a representative of a member has one vote. On a poll, each shareholder is entitled to one vote for each fully paid share held. A shareholder may appoint a maximum of two proxies to represent them at general meetings.

australiansecuritieseXchanGeThe ordinary shares of the Company are listed on the Australian Securities Exchange and trade under RIC.

torontostockeXchanGeRidley Inc (69% owned by Ridley Corporation Limited) is listed on the Toronto Stock Exchange and trades under RCL.

riDleyWeBsite–WWW.riDley.com.auThe website provides access to announcements issued to the Australian Securities Exchange, copies of annual reports, corporate governance information and shareholder information.

sharereGistryComputershare Investor Services Pty Limited Level 3 60 Carrington Street Sydney NSW 2000

All correspondence to: GPO Box 2975 Melbourne VIC 3001 Australia

Telephone: (within Australia) 1300 85 5080 Facsimile: (within Australia) 03 9473 2500

Telephone: (outside Australia) +61 3 9415 4000 Facsimile: (outside Australia) +61 3 9473 2500

Website: www.computershare.com web.queries@computershare.com.au

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Ridley Corporation manufactures and markets salt, stockfeed and animal feed supplements. Its two Australian businesses are Ridley AgriProducts, the country,s leading supplier of stockfeed, and Cheetham Salt, Australia,s largest producer and refiner of salt.

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2Fiveyearsummary

4 CHairmaN’srevieW

5maNaGiNGDireCTOr’srevieW

8 summaryOFOPeraTiONs

10 FiNaNCiaLrevieW

14 riDLeyaGriPrODuCTs

16 CHeeTHamsaLT

18 riDLeyiNCaNDLaNDDeveLOPmeNT

20 susTaiNaBiLiTyrevieW

24BOarDOFDireCTOrs

26COrPOraTeGOverNaNCerePOrT

29remuNeraTiONrePOrT

39DireCTOrs’rePOrT

42auDiTOr’siNDePeNDeNCeDeCLaraTiON

43FiNaNCiaLrePOrT

89DireCTOrs’DeCLaraTiON

90 iNDePeNDeNTauDiTOr’srePOrT

91 sHareHOLDeriNFOrmaTiON

iBC COrPOraTeDireCTOry

riDLeyCOrPOraTiONLimiTeDaBN33006708765

COrPOraTeDireCTOryriDLeyCOrPOraTiONLimiTeDABN 33 006 708 765

COrPOraTeOFFiCeaNDreGisTereDOFFiCeLevel 10, 12 Castlereagh Street Sydney NSW 2000 Australia Telephone 02 8227 6100 Facsimile 02 8227 6002 Email secretary@ridley.com.au

riDLeyaGriPrODuCTsPTyLTDABN 94 006 544 145

HeaDOFFiCeLevel 4, 565 Bourke Street Melbourne VIC 3000 Australia Telephone 03 8624 6500 Facsimile 03 8624 6505

CHeeTHamsaLTLimiTeDABN 81 006 926 487

HeaDOFFiCeLevel 4, 565 Bourke Street Melbourne VIC 3000 Australia Telephone 03 8624 6500 Facsimile 03 8624 6505

General Manager A L Speed

riDLeyiNCreGisTereDOFFiCe34 Terracon Place Winnipeg Manitoba CANADA R2J4G7 Telephone 1 (204) 956 1717 Facsimile 1 (204) 231 2402

riDLeyiNCOPeraTiONs424 North Riverfront Drive Mankato MN 56002-8500 USA Telephone 1 (507) 388 9400 Facsimile 1 (507) 388 9415

President and Chief Executive OfficerS J VanRoekel

The Ridley 2008 annual report is printed on Mohawk Opaque, an environmentally responsible paper manufactured under strict environmental management systems with Elemental Chlorine Free (ECF) pulps sourced from sustainable, well managed forests combined with 10% Post consumer waste.

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Ridley coRpoRation annual RepoRt 2008

RIDLEY ANNUAL REPORT 2008

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