Annual Report 08 Skellerup Holdings Limited Contents • CHAIRMAN’S REPORT 2 • MANAGING DIRECTOR’S REPORT 4 • AGRI BUSINESS OPERATIONS 8 • INDUSTRIAL BUSINESS OPERATIONS 14 • INTERNATIONAL OPERATIONS 18 • OUR PEOPLE 20 • HEALTH, SAFETY AND THE ENVIRONMENT 22 • YOUR BOARD OF DIRECTORS 23 • CORPORATE GOVERNANCE policy 24 • FINANCIAL STATEMENT 25

The Skellerup Group of companies develops, markets, and distributes technical polymer products for a variety of specialist industrial and agricultural applications. Founded 98 years ago, today Skellerup is a global company headquartered in , with operations in Asia, Europe, the United States and Australasia. Highlights

• Revenue up 6.6% to $205.4 million • EBITDA up 29.4% to $33.4 million • NPAT up 60.1% to $14.7 million • Continuing focus on technical polymer products into global niche markets • Successful one-for-four rights issue raised $21.1m • Divestment of four non-core business units completed major restructuring • Dairy industry world-wide positive for Agri Division • Synergies achieved through integration of Tumedei with Gulf Rubber

$205.4 $33.4 $14.7 million million million Up 6.6% Up 29.4% Up 60.1%

OPERATING EBITDA NPAT REVENUE

Financial Year to 30 June 2008 2007 % Results NZ$ $000’s $000’s change Summary Operating Revenue 205,417 192,694 6.6% Trading EBITDA 33,375 25,796 29.4% Trading EBIT 27,870 20,671 34.8% Surplus before tax 19,035 13,556 40.4% Taxation (6,402) (4,375) 46.3% Trading Surplus after tax 12,633 9,181 37.6% Divestment gain 2,064 - Surplus after tax 14,697 9,181* 60.1% Total Assets 194,039 202,896 Total Liabilities 122,241 168,300 Net Assets 71,798 34,596 107.5% Earnings per share 13.09c -2.31c Dividend per share (full year) 6.0c 3.0c * before abnormals

Skellerup Holdings Limited Annual Report 08 1 Chairman’s Message

It is a pleasure to be able to report such an improved result for to lowest-cost manufacturing facilities; cost-effective supply the group, despite the uncertain economic times experienced chains; and constantly updated knowledge and understanding worldwide during the second half of the year. of existing and prospective markets for our products.

Our emphasis in the past year was on deepening our focus In late February this year, we undertook a capital raising exercise on technical polymer products, and leveraging the collective through a one-for-four rights issue, for the purpose of reducing expertise and resources we hold within the group to extend debt. Although uncertainty within both domestic and global our market presence into niche markets globally. This strategy economies made this a potentially difficult time to raise capital, has provided us with a reliable and solid base to withstand the strong support of major shareholders who underwrote the challenging market conditions, which are forecast to be with us issue ensured that the initiative was most successful. for some time yet. Hindsight confirms the wisdom of this initiative for all concerned. Overall Group revenues increased 6.6% to $205.4m this year. The company now has significantly less bank debt, and has Net Profit after Tax increased 60% to $14.7m from $9.2m delivered on its profit projections for the year under review. (before abnormals) for the year to June 2007. This year’s result includes a one-off divestment gain of $2.1m Dividend The Directors have declared a fully imputed dividend of six cents Our performance this year was boosted by the growing strength per share, which will be paid on 24 October 2008 to shareholders of the dairy industry world-wide underpinning our Agri Division; registered at 5 pm on 10 October 2008. along with the achievement of synergies in our Industrial Division through the integration of last year’s acquisition The Company’s Dividend Reinvestment Plan will be operative for Tumedei, with Gulf Rubber. the dividend payment.

The successful divestment of four non-core businesses in line Our A