Key Concepts:

• Australian Agricultural Company Limited is a company limited by shares, incorporated and domiciled in Australia The Company’s shares are publicly traded on the Australian Securities Exchange (ASX)

Employee share plan (ESP)

• On 12 September 2005 they introduced an employee share plan (ESP) This plan allows shares in Australian Agricultural Company Limited to be provided to all employees (excluding those participating in the EOP and Directors) with greater than one year of service up to the value of $1,000 No shares were issued to employees under the ESP during the three months to 31 March 2013 (twelve months to 31 December 2012: nil; three months to 31 March 2012: nil)

 Nature and purpose of reserves

Asset revaluation reserve

- The asset revaluation reserve is used to record increments and decrements in the fair value of land and buildings to the extent that they offset one another The reserve can only be used to pay dividends in limited circumstances

Capital profits reserve

- The capital profits reserve is used to accumulate realised capital profits The reserve can be used to pay dividends

Cash flow hedge reserve


- The cash flow hedge reserve is used to record the portion of movements in fair value of a hedging instrument in a cash flow hedge that is recognised in other comprehensive income

Employee equity benefits reserve

- The employee equity benefits reserve is used to record the value of equity benefits provided to employees and Directors as part of their remuneration Refer to note 27 for further details of these plans

They use various methods in estimating the fair value of a financial instrument.

 The methods comprise:

Level 1 – The fair value is calculated using quoted prices in active markets

Level 2 – The fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices)

Level 3 – The fair value is estimated using inputs for the asset or liability that are not based on observable market data

 Non-financial assets

Their tangible and intangible assets (excluding inventories, biological assets, current and deferred tax assets, and financial assets) are measured using the cost basis and are written down to their recoverable amount where their carrying value exceeds recoverable amount

The outstanding balance as at 31 March 2013 is represented by:

„ 250,000 options over ordinary shares with an exercise price of $100 each;
„ 350,000 options over ordinary shares with an exercise price of $139 each;
„ 290,625 options over ordinary shares with an exercise price of $209 each; and „ 1,306,656 options over ordinary shares with an exercise price of $327 each