Chairman’s & Managing Director’s Report Tom Keene Managing Director Ron Greentree Chairman 2001 was a challenging year for GrainCorp. It is inclusive of all integration and restructuring costs following the merger. GrainCorp is now in a position to realise annual after-tax cost savings projected under the merger proposal in the order of $4 million. GrainCorp’s dividend payout ratio was increased to  65 per cent to more effectively balance capital investment and shareholder reward following a 93 per cent increase  in depreciation and amortisation to $38.9 million. Against the backdrop of a rapidly changing agricultural sector, GrainCorp has accomplished the mighty task of integrating GrainCorp and Vicgrain into one cohesive  unit. Representing the single biggest growth phase in  the Company’s history, this marks only the beginning  of GrainCorp’s continuing commitment to expansion. As outlined in last year’s Annual Report, the task of integrating the two grain handling companies was to be achieved in this period. Now, 12 months later, GrainCorp is delighted to report this has been successfully accomplished. The merged entity is now poised to take  on the challenges of the years ahead with a sense of preparedness and optimism. As such, shareholders received a final fully franked dividend of 29 cents per share. This results in a full year total dividend of 72 cents per share, representing a strong yield of 7.9 per cent for the reporting period. Factors that contributed to the profit result included a substantial growth in earnings following record grain receivals, increased depreciation costs and high carryover of stocks by GrainCorp’s customers.  Already, the geographic expansion has paid dividends to shareholders. The effects of the disastrous flood and rain damage to the northern NSW harvest were offset by a near record harvest in Victoria. The stability of size is a great asset the new company will enjoy from now on.  In total, a grain crop in excess of 12.1 million tonnes was received throughout south-eastern Australia last harvest.  GrainCorp’s strategy of related diversification, which has driven investment in grain trading, logistics, merchandising, as well as woodchip and cotton seed handling, also boosted cash flow. GrainCorp’s 2001 profit result saw a 26 per cent increase  in earnings before tax, depreciation, amortisation and interest (EBITDA) to $115 million and an after tax profit  of $44.6 million. This follows last year’s $48.7 million result and  is GrainCorp’s first profit as a consolidated entity.  GrainCorp 2001 Annual Report 15