IWIF - ASX · Fund (“the Wine Fund”) for the year ended 30 June 2008. This year the Wine Fund incurred a Loss of $2.860 million against a Profit of $6.873 million in 2007. Despite

IWIFTHE

INTERNATIONAL WINEINVESTMENT FUND

ANNUAL REPORT

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The International Wine Investment Fund Annual Report 2008

Table of Contents

CHAIRMAN’S REPORT..........................................................................................................................1

CORPORATE GOVERNANCE STATEMENT........................................................................................4

KEY FINANCIAL ASSETS......................................................................................................................9

INVESTOR INFORMATION..................................................................................................................10

DIRECTOR & EXECUTIVE INFORMATION ........................................................................................17

DIRECTORS’ REPORT ........................................................................................................................20

AUDITOR’S INDEPENDENCE DECLARATION ..................................................................................25

INCOME STATEMENT.........................................................................................................................26

BALANCE SHEET ................................................................................................................................27

STATEMENT OF CHANGES IN EQUITY ............................................................................................28

CASH FLOW STATEMENT..................................................................................................................29

NOTES TO THE FINANCIAL STATEMENTS ......................................................................................30

DIRECTOR’S DECLARATION .............................................................................................................53

INDEPENDENT AUDIT REPORT ........................................................................................................54

CORPORATE DIRECTORY ............................................................................................. BACK COVER

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The International Wine Investment Fund ABN 74 775 757 294

and Controlled Entities

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CHAIRMAN’S REPORT 29 September 2008 Dear Unitholder I am pleased to present our report on the performance of The International Wine Investment Fund (“the Wine Fund”) for the year ended 30 June 2008. This year the Wine Fund incurred a Loss of $2.860 million against a Profit of $6.873 million in 2007. Despite the Loss full year distribution was maintained at 20.0 cents per unit, classified as 98.69% franked (last year 20.0 cents per unit, classified as 100% franked), with the final distribution of 10.0 cents to be paid on 30 September 2008. Investments The Wine Fund’s investments are now spread over the following global wine businesses:

Name Principal place(s) of business

Principal business Percentage of

IWIF investment portfolio

Constellation Brands Inc Global

Fully integrated producer and distributor of wines and distributor of beer

>60%

Bibendum Wine Holdings Ltd UK

Distributor of a wide portfolio of wines from old world and new world countries sourced from leading wine companies. Distributor of a growing portfolio of Bibendum owned wines.

15 - 20%

Gabrielle Meffre SAS Europe & USA Producer and distributor of

regional French wines 10 - 15%

National Vineyard Fund of Australia Limited

Australia

Vineyard developer and investor in vineyard managed investment schemes

5 - 10%

• Constellation: This company continues to consolidate its position as the world’s

leading wine company, despite difficult market conditions.

• Bibendum: The owner of the largest independently owned wine distribution company in the UK. Bibendum now develops and acquires wine brands, including a two-third ownership of the very successful Argento brand.

• Meffre: Has continued to have difficult years. The entire business is up for sale.

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• NVFA: Despite the continuing drought, NVFA has managed to hold its own, primarily because it anticipated the drought and took timely risk mitigation steps. NVFA continues to have grape sale contracts with the larger wine companies operating in Australia.

Distribution The directors of Berren declared a final distribution of 10.0 cents per unit payable on 30 September 2008. The distribution totalled $2.45 million. Taxation for Unitholders The 20 cents per unit total distribution to Unitholders has been classified as 98.69% franked for taxation purposes. Unit Price & Discount The market price of the Wine Fund has been affected by the general negative sentiment towards the wine industry, the widely fluctuating price of its biggest investment: Constellation Brands Inc and the general negative sentiment towards all investments. During the 12-month period the unit price ranged from 0.90 to 1.61, and during the six-months ending 30 June 2008, the unit price ranged from 0.90 to 1.46. At close of business on 29 August 2008, the Wine Fund’s units were trading at $0.86. Net Tangible Assets The Net Tangible Asset backing per unit (“NTA”) of the Wine Fund at 30 June 2008 was $1.11 per unit (2007: $2.02), which represents a discount to NTA of 16.67% (2007: 20.79%) based on the closing price at 30 June 2008 of $0.925 (2007: $1.60). Borrowing for Investments The Wine Fund has decreased its total borrowing during the 12-month period from approximately $20 million to $14.875 million. All borrowings are able to be repaid from current investments. At 30 June, the ratio of borrowings to total assets is 32.43%. Capital Management At 30 June 2008 the Wine Fund had 24,489,008 units on issue. The Distribution Reinvestment Plan led to an increased issue of 1,099,647 units. Board and Management There was one change to the board of directors with the appointment of John Hart.

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The Future In April 2008 the Unitholders of the Wine Fund resolved to wind-up the Wine Fund in an orderly manner, with a target completion date set at 30 June 2009. This wind-up process has commenced and Unitholders will be advised of progress through regular communications.

Mike Terlet AO Chairman Berren Asset Management Limited Responsible Entity for The International Wine Investment Fund

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4

CORPORATE GOVERNANCE STATEMENT

Corporate governance statement

Introduction

Berren Asset Management Limited (Berren or the Company) is the responsibility entity of the International Wine Investment Fund (Wine Fund).

The Berren Board regards corporate governance as an important standard which needs to be continuously addressed by the company in the course of its business practice. In formulating its Corporate Governance Policy and Practices, the Board has had regard to the ASX Guidelines on “Corporate Governance Principles and Recommendations” (The Recommendations).

In accordance with Listing Rule 4.10, this statement discloses the extent to which Berren and the Wine Fund followed the Recommendations. The relevant Recommendations are considered under each of the corporate governance principles identified by the ASX Corporate Governance Council. Where a Recommendation has not been followed, Berren and the Wine Fund are obligated to disclose the reasons why the Recommendation has not been followed. This is referred to as “if not, why not” reporting. Unless otherwise stated, Berren and the Wine Fund followed the Recommendation for the full period of this report.

It should be noted that Corporate Governance Principles and Recommendations are largely recommendations. It is recognised that not all of the Recommendations will be suitable for all companies at all times in their corporate development. In this regard, the Board recognises that Berren and the Wine Fund’s corporate governance practices must continue to evolve and develop.

Principle 1 – Lay solid foundations for management and oversight

The Company has established the functions reserved to the Board and those delegated to senior executives, consultants and key service providers. The Board is responsible to the Unitholders for the overall governance and performance of the Wine Fund.

The Board, while not having a formal charter in accordance with the Recommendations, has a Corporate Governance Statement which sets out the role of the Board as well as a framework designed to provide strategic guidance for the company and oversight of management. Active monthly Board involvement is designed to clarify and guide management. The functions of the Board include:

Setting the strategic direction, annual budget and financial goals of the Wine Fund; Overseeing and monitoring organisational performance and achievement of goals

and objectives; Ensuring there are adequate resources to meet goals and objectives; Appointing and reviewing the performance of the Chief Operating Officer, any senior

management, consultants and external service providers; Approving and monitoring financial reporting, including the approval of the annual

and half-year financial; Reporting and liaising with the Wine Fund’s auditors; Approving and monitoring investment performance; Enhancing and protecting the reputation of the Wine Fund; Ensuring proper risk management procedures exist, including the identification,

control, monitoring and reporting of risks; Ensuring the Wine Fund has appropriate corporate governance standards, including

standards of ethical behaviour.

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Introduction – Cont… Approving and monitoring the progress of major capital expenditure, capital

management, and acquisitions and divestitures; Approving an annual budget (including key assumptions) and monitoring financial

performance against budget; Considering and approving proposals in relation to capital and debt structure –

allotment of new capital, unit buybacks, significant capital and debt raisings (including project and other finance arrangements), distribution policy and the payment of distributions; and

Approving and monitoring financial and other reporting.

The roles of Berren’s Chairman and Berren’s Chief Operating Officer are separate. The Chairman is an independent, non-executive director, responsible for leading the Board in its duties. The Chief Operating Officer of Berren is responsible for the operations of the Wine Fund and ensuring directors are provided with accurate and clear information in a timely manner, and ensuring all material matters are brought to the Board’s attention.

The Chairman and the Board (acting as the Remuneration Committee) consider the performance of the Chief Operating Officer.

Principle 2 – Structure the Board to add value

The skills and experience of each of the Directors is detailed in the Directors’ Report.

All Directors are Non- Executive. The Board consists of an Independent non- executive Chairman, one independent non-executive Director and two other non-executive Directors.

The Board has adopted specific principles with respect to assessing the independence of directors. In order to be independent, the Director must be independent of management and free from any business or other relationship that could materially interfere with – or could reasonably be perceived to interfere with – the exercise of their unfettered or independent judgment.

In the context of the independence of directors, immateriality is considered from the perspective of Berren, the Wine Fund and the Director. The determination of independence requires a consideration of both quantitative and qualitative elements. An item is presumed to be immaterial from a quantitative perspective if it is equal to less than 5% of the relevant base amount. Qualitative factors include whether a relationship is strategically important, the competitive landscape and the nature of the relationship (including the contractual or other arrangements governing the relationship.

On the basis of these measures, the following Directors of Berren (being all of the Non-Executive Directors) are

Classified as:

Name Position

M Terlet AO Chairman, independent and non-executive Director J Hart Independent and non-executive Director J Caddy Non-executive Director W.J.Conn Non-executive Director

The Recommendations provide that the Board should establish a Nominations Committee to consider and make recommendations to the Board with respect to a range of matters relating to the selection and performance of directors.

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Principle 2 – Structure the Board to add value – Cont…

Given the size of the Board of Berren and the Wine Fund, a separate committee has not been established to perform this function. The matters which would normally be considered by a Nominations Committee have been reserved to the Board.

With respect to assessing the performance of Directors, the policy of the Board has been that the Chairman annually reviews the performance of all Directors. Matters covered by the performance review include the role of the Board and its committees, their composition, how the Board operates, how Board members interact, the effectiveness of the Chairman in leading the Board and Board performance generally. Any director whose performance has been unsatisfactory is asked to retire. This policy reflected the size of the Board and the Wine Fund.

Subject to normal privacy requirements, directors have unfettered access to Berren and the Wine Fund’s records and information, and to the Company Secretary and other relevant personnel. They receive regular detailed reports on financial and operational aspects of the Wine Fund and may request elaboration or explanation of those reports at any time.

Directors and management are encouraged to broaden their knowledge of Berren and the Wine Fund’s business and to keep abreast of developments in business more generally by attendance at relevant courses, seminars and conferences, both in Australia and where appropriate overseas.

While there is no formal procedure in place for Directors to seek independent professional advice as considered necessary at the Company’s expense, the Board encourages, upon receiving prior written approval of the Chairman, such actions as is required and will not unreasonably withhold such action. The Audit, Risk and Compliance Committee charter provides for the committee to seek independent legal or other professional advice that it considers necessary.

Principle 3 – Promote ethical and responsible decision making

Berren and the Wine Funds business affairs are conducted legally and ethically with strict observance of the highest standards of integrity and propriety. While the Company does not maintain a formal code of conduct charter, the Board’s decision making process assesses the circumstances surrounding matters at all times considering responsible legal and ethical obligations, thereby demonstrating commitment to appropriate corporate practices.

In accordance with the Recommendations, Berren has a policy relating to the trading of securities by Directors, senior executives, consultants and external service providers. The Policies and Procedure Manual states that trading is prohibited one month before and 48 hours after the release of the half year and annual accounts and distribution announcements. It also states that the approval of the Chairman must be obtained prior to the trade.

Unit trading is also precluded if a director is in possession of price sensitive information which is not available to the market and could reasonably be expected to influence the market if it was in possession of the information.

Any transaction conducted by the Directors in units in the Wine Fund is notified to the Australian Stock Exchange immediately.

Principle 4 – Safeguard integrity in financial reporting

In accordance with the Recommendations, Listing Rule 12.7 and Chapter 5C of the Corporations Act as it relates to registered managed investment schemes. Berren and the Wine Fund have an Audit, Risk and Compliance Committee. (“The Audit Committee”)

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Principle 4 – Safeguard integrity in financial reporting – Cont…

The Audit Committee has a charter and its primary objective is to assist the Board of directors in fulfilling its corporate governance and overseeing responsibilities relating to accounting, reporting, compliance and risk management practices. The minutes of each Audit Committee meeting are reviewed at the subsequent meeting of the Board.

The committee is required by its charter to meet at least four times each year. The number of times it met during the financial year ended 30 June 2008, and the committee members’ attendance at those meetings, are set out in the Directors’ Report.

In addition the Company Secretary, representatives from Moore Stephens (Chartered Accountants), the Company’s Auditors are invited to attend meetings of the Audit Committee.

Where conflicts of interest arise, measures are in place through a Conflict of Interest policy to ensure that they are properly managed and that the interests of all Unitholders are protected.

The Wine Fund’s compliance with its compliance plan is subject to annual audit by Moore Stephens. The Compliance Officer reports to the committee at each meeting.

Principle 5 – Make timely and balanced disclosure

Berren and the Wine Fund comply with its continuous disclosure obligations in accordance with the requirements of the ASX Listing Rules and the Corporations Act. The Chief Operating Officer has primary responsibility for ensuring the market is properly informed.

In settling the wording of announcements, drafts are circulated as appropriate to managers, Directors and the Chairman (a non-executive director) who can provide relevant input and raise any issues with respect to the particular wording of announcements. This provides intensive quality control of both the content and expression of announcements.

The Wine Fund and Berren have developed a culture of complying with its continuous disclosure obligations under the leadership of the Chief Operating Officer and Chairman. These obligations are contained in the Wine Fund’s Disclosure Policy.

Berren is regulated by the ASX and the Australian Securities and Investments Commission (ASIC). The net tangible asset position of units in the Wine Fund is disclosed each month to the ASX. The Chief Operating Officer and the Company Secretary are primarily responsible for disclosure to the ASX and the ASIC.

Principle 6 – Respect the rights of shareholders

The Board of Directors aims to ensure that Unitholders are informed of all information necessary to assess the performance of the Wine Fund and the Board. This reflects the core value of the Company to strive for excellence in communications with all stakeholders.

Information on all major developments affecting the Wine Fund is communicated to the Unitholders through the annual report, half–yearly report, quarterly reports and the Annual Unitholder Briefing Meeting. The Wine Fund’s website is a key communication tool. Transcripts of material such as the Chairman’s address and media briefings are available on the website. Unitholders may provide feedback and ask questions through the website.

Whilst it is not a legal requirement to provide Unitholders with an opportunity to ask questions at the Annual Unitholder Briefing Meeting, the Company and the Board encourages a culture where Unitholders ask questions and to provide feedback to Berren and the Wine Fund.

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Principle 6 – Respect the rights of shareholders – Cont…

The Recommendations provide that companies should have a “communications policy”. Berren and the Wine Fund considers that the initiatives referred to above meet the spirit of the Recommendation and that the formation of a definitive policy is not warranted by the size of the Wine Fund.

Principle 7 – Recognise and manage risk

The Board has established a sound system of risk management and oversight. Berren has a formal risk management policy in place. The policy and risk management practices are reviewed on an annual basis. In accordance with the Corporations Act, the Wine Fund has a broad ranging compliance plan addressing risks in most operational areas of the business. The plan is externally audited each year and a compliance plan auditor’s report is lodged with ASIC.

The Wine Fund seeks to diversify its investment portfolio by investing in a range of segments of the wine industry, from viticulture and branded wine production to retailing and distribution. Further diversification arises from investing in several countries around the world, including the United States, France and the United Kingdom. The Board requires that each major investment proposal submitted to the Board for decision is comprehensive and includes an identification of risks and proposed exit strategies.

Further the board has received assurance from the senior management that the declaration provided in accordance with S295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.

Principle 8 – Remunerate fairly and responsibly

Due to the small size of the board, the function of a Remuneration Committee is held by the oard.

The remuneration of directors and external service providers is the responsibility of the Board as a whole. Berren discloses the remuneration information in its annual report.

The Wine Fund is a registered managed investment scheme and Berren is the responsible entity. The remuneration of the responsible entity and its indemnity for costs and expenses are set out in the Wine Fund’s Constitution. The remuneration of Berren’s directors, including termination entitlements, is a cost to Berren, and not recoverable from the Wine Fund.

General Conduct of Business: Recognise the legitimate interests of stakeholders

The Wine Fund has measures in place to recognise the interests of its wide range of legitimate stakeholders.

The Wine Fund’s compliance plan is designed to recognise and protect the interests of stakeholders, and includes provisions to enable staff to alert management and the Board, in good faith, of potential misconduct requiring the recording and investigation of such matters.

In its commitment to adhere to these principles the Wine Fund has established various policies in relation to risk management, conflicts of interest, related party transactions, breach reporting, payment authority limits, and complaints handling.

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KEY FINANCIAL ASSETS

Key Financial Assets

The International Wine Investment Fund

For the year ended 30 June 2008

2008 2007

($'000) ($'000)

AUSTRALIAN WINE ASSETS

Cockatoo Ridge Wines Limited shares - 518

National Vineyard Fund of Australia convertible note - 5,542

National Vineyard Fund of Australia shares 3,061 -

TOTAL AUSTRALIAN WINE ASSETS 3,061 6,060

CONSTELLATION BRANDS

Constellation Brands Inc CHESS depository interests 28,295 41,499

TOTAL CONSTELLATION WINE ASSETS 28,295 41,499

INTERNATIONAL WINE INVESTMENTS

Gabriel Meffre SAS shares 5,851 5,578

Delgat's Group Limited shares - 441

Bibendum Wine Holding Limited shares 8,266 8,793

TOTAL INTERNATIONAL WINE ASSETS 14,117 14,812

OTHER ASSETS

Cash, Other Current Assets 336 8,637

Other Non-wine Assets 63 4

TOTAL OTHER ASSETS 399 8,641

TOTAL ASSETS 45,872 71,012

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INVESTOR INFORMATION As at 29 August 2008

Voting Rights At a General Meeting every Unitholder present in person or by proxy or attorney, or in the case of a corporation, by a representative duly authorised, has one vote on a show of hands and, on a poll, one vote for each unit held by the Unitholder. Unitholders who are unable to attend a General Meeting are encouraged to complete and return a proxy form. Distribution of Unitholdings as at 29 August 2008

Number of Units Held Number

of Holders% of

UnitholdersNumber of

Units

% of Issued Capital

1 – 1,000 356 25.19 134,004 0.551,001 – 5,000 472 33.40 1,315,541 5.375,001 – 10,000 221 15.64 1,613,135 6.5910,001 – 100,000 320 22.65 9,881,121 40.35100,001 and over 44 3.11 11,545,207 47.14 1,413 100.00 24,489,008 100.00 The number of Unitholders holding less than a marketable parcel of 582 units at $0.86 per unit was 261, and they hold 55,353 units. Twenty Largest Unitholders The 20 largest Unitholders in the Wine Fund as at 29 August 2008 were:

Number of Units

% of Issued Capital

1 Rancho Paringa Pty Ltd 1,783,781 7.28 2 UBS Nominees Pty Ltd 1,219,492 4.98 3 Kinsbrook Pty Ltd 655,896 2.68 4 Huoncan Super Pty Ltd 476,470 1.97 5 Mr Alister John Forsyth 405,130 1.65 6 Mr Lewis Welsby Grant and Mrs Phillis Jean Grant 375,032 1.53 7 Mellett Super Pty Ltd 339,772 1.39 8 Dynasty Peak Pty Ltd 304,928 1.25 9 A John Forsyth Pty Ltd 271,339 1.11

10 Barrymore Wiliiam Mudge and Janet Beverly Mudge 264,721 1.08

11 Mr Christopher Charles Indermaur Mrs Rena Elizabeth Indermaur 253,892 1.04

12 Mr Kevin Howard Dunstone and Mrs Margaret Edna Dunstone 250,000 1.02

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13 Mrs Greta Ashton 249,844 1.02

14 Mrs Mavis Ada Hettner 249,464 1.02

15 Mr Dimitris Tzanavaras and Mrs Sofia Tzanavaras 249,076 1.02

16 Mr Dennis Lindley Roberts and Mrs Judith Lesley Roberts

243,673 1.00

17 Berren Asset Management Pty Ltd 242,132 0.99

18 Greig & Harrison Pty Ltd 202,896 0.83

19 Albanese Brothers 200,757 0.82

20 Mr Ronald Hurtle Shueard 200,000 0.82

TOTAL 8,444,216 34.50

Substantial Unitholders The following organisations have disclosed a substantial holder notice to Berren. Rancho Paringa Pty Ltd

Distributions The final distribution of 10.00 cents per unit will be paid on 30 September 2008. The half-year distribution of 10.00 cents per unit was paid on 31 March 2008. Unitholders should retain all remittance advices and statements relating to distribution payments for taxation purposes. History of Distributions Since Listing on The Australian Stock Exchange Distribution Period Year Cents per unit Annual cents per unit

December 2.00

June 1997 3.00 5.00

December 3.00

June 1998 3.50 6.50

December 3.50

June 1999 4.00 7.50

December 3.50

June 2000 4.50 8.00

December 4.00

June 2001 5.50 9.50

December 4.75

June 2002 6.00 10.75

December 4.75

June (final distribution) 2003 6.25

June (special distribution) 100.00 111.00

December 4.00

June 2004 6.00 10.00

December 4.50

June 2005 6.50 11.00

December 6.00

June 2006 10.00 16.00

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December 10.00

June 2007 10.00 20.00

December 10.00

June 2008 10.00 20.00

FINANCIAL CALENDAR

13 July 2007 Monthly Net Tangible Asset Backing June 2007

14 August 2007 Net Tangible Asset Backing July 2007

29 August 2007 Appendix 4E - Full

29 August 2007 Wine Fund Announces $7 Million Profit

12 September 2007 2007 Tax Information for Unitholders

14 September 2007 August 2007 NTA

17 September 2007 Dividend Reinvestment Price

20 September 2007 2007 Annual Report to Shareholders

16 October 2007 September 2007 NTA

16 October 2007 Appendix 3B – October 2007

14 November 2007 Net Tangible Assets October 2007

04 December 2007 Unitholder Briefing

10 December 2007 Interim Distribution – 10 cents

14 November 2007 November 2007 NTA

14 January 2007 NTA December 2007

11 February 2008 NTA January 2008

28 February 2008 Appendix 4D, Half Yearly Report and Accounts

10 March 2008 Notice of General Meeting

14 March 2008 NTA February 2008

18 March 2008 DRP Issue Price

28 March 2008 General Meeting

01 April 2008 Appendix 3B

04 April 2008 Notice of General Meeting / Proxy Form

10 April 2008 Becoming a Substantial Holder

14 April 2008 NTA March 2008

15 April 2008 General Meeting – Additional Information

30 April 2008 Results of Meeting

30 April 2008 Presentation at General Meeting

30 April 2008 General Meeting Script

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06 May 2008 Revised Constitution

14 May 2008 NTA April 2008

30 May 2008 Appointment of Director

05 June 2008 Final Distribution

13 June 2008 NTA May 31 2008

25 June 2008 Appendix 3B

25 June 2008 Appendix 3B

14 July 2008 Unaudited NTA June 2008

14 August 2008 NTA July 2008

29 August 2008 Preliminary Final Report

04 September 2008 2008 Tax Information

15 September 2008 NTA August 31 2008

Unit Trading The Wine Fund’s units are quoted on Australian Stock Exchange Limited (ASX) and are dealt with on the Stock Exchange Automated Trading system (SEATS). The code under which Wine Fund’s units are traded on the ASX is IWI, and details of trading activity are published in the share tables of daily newspapers. Trading in your units can be made through a recognised stockbroker or you may wish to trade privately. If you are unsure of how to proceed, you should consult your financial adviser.

Unitholder Enquiries Unitholders seeking information about their unitholding or distributions or wishing to change their address, should contact the Wine Fund’s unit registry: Computershare Investor Services Pty Limited Level 5, 115 Grenfell Street, Adelaide SA 5000 GPO Box 1903, Adelaide SA 5001 Telephone: 1 300 556 161 (Adelaide) 1 300 850 505 (National) +61 (0)3 9415 4000 (Overseas) Facsimile: +61 (0)8 8236 2305 Website: www.computershare.com

Please quote your Unitholder number in any written communication

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Change of Address To ensure that all Wine Fund communications and distributions are sent to the correct address, Unitholders should immediately advise in writing any change to their registered address to the Wine Fund’s unit registry, or to their sponsoring broker or non-broker participant for any CHESS holding. For added protection Unitholders are required to quote their Unitholder number. Your Unitholder number or security reference number (SRN) is recorded on most of the documentation forwarded to you including your unit holding statement and distribution statement.

Change Of Name Unitholders who change their name should contact the Wine Fund’s unit registry immediately to obtain advice on the supporting documentation required by the Wine Fund to register the name change. Consolidation of Unitholdings Unitholders who have more than one holding and wish to consolidate them into one account should contact the Wine Fund’s unit registry. Distribution Reinvestment Plan The Wine Funds distribution reinvestment plan has been discontinued. Direct Credit of Distributions Distribution may be paid directly to a Unitholder’s nominated Australian bank or building society account. A form for this purpose is available from the Wine Fund’s unit registry. Tax File Numbers The Wine Fund is obliged to record Tax File Number (TFN) or exemption details provided by Unitholders. While it is not compulsory to provide a TFN or exemption, the Wine Fund will be obliged to deduct tax at the top marginal rate plus Medicare levy from unfranked or partially franked distributions paid to Australian registered Unitholders who have not supplied this information. For those Unitholders who have not yet provided this information and would like to do so, forms are available from the Wine Fund’s unit registry.

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Managed Investment Scheme The International Wine Investment Fund is a managed investment scheme, and the Constitution of the International Wine Investment Fund has effect as a constitution within the meaning of the Corporations Act 2001. Its terms are binding on the responsible entity and all Unitholders. On 30 June 2000, Berren Asset Management Limited was appointed the responsible entity. The responsible entity is appointed to manage the Wine Fund for the benefit of Unitholders and perform the duties and obligations contained in the Constitution. The responsible entity is entitled to receive a half-yearly management fee based on 1.5% of the average market capitalisation of the Wine Fund, less the audited ordinary operating expenses. The responsible entity is entitled to be indemnified out of Wine Fund property for any liability or costs it incurs in the proper performance of its duties.

Electronic Communication with the Wine Fund Unitholders can communicate electronically with the Wine Fund. This gives Unitholders immediate access to Wine Fund reports and announcements, media releases and investor briefings as they are released to the market. Unitholders who would like to receive the above reports electronically can e-mail the Wine Fund at [email protected] Unitholding Information Online Unitholders can check their holdings in Wine Fund units online at www-au.computershare.com. For security and privacy reasons, Unitholders will be required to verify their identity before they can view their records. Unitholders are also able to update their holding details through Computershare’s downloadable forms.

Internet Web Site The Wine Fund has a web site at www.iwif.com.au. The site contacts considerable information about the Wine fund, including this report and releases made by the Wine Fund to the ASX.

Wine Fund Publications Unitholders will receive the following publications throughout the year to keep them informed of the Wine Fund’s operations and results. Report on Half-year Results* Annual Report* Notice of General Meetings and Newsletters *The annual and half-year reports will not be sent to Unitholders who have requested the Wine Fund’s unit registry to remove their name from the mailing list.

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Removal From The Annual Report Mailing List Unitholders who do not wish to receive a copy of the annual report or half-year report, or wish to receive more than one copy, should advise the Wine Fund’s unit registry in writing and quote their Unitholder number. Unitholders should be aware that this report is available on our web site and can be downloaded. Accessing reports in this way can save the Wine Fund significant printing and postage costs. Unitholders who elect not to receive an annual report will continue to receive all notices of meetings. Privacy Act The Wine fund has a privacy policy which can be downloaded from the web site. The Wine Fund has adopted the National privacy principles and will only use personal information as permitted by those principles.

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DIRECTOR & EXECUTIVE INFORMATION

The qualifications and experience of other relevant management personnel are as follows:

Name Age Experience Special

Responsibilities Mr M Terlet AO MBA, FAIM, FAID, JP. Chairman

65 Mike has been Chairman and non-executive director since May 2000. Responsible for the formation and growth of the largest private sector defence and aerospace company in Australia from 1978 to 1992. He retired in 1992 as Managing Director and has undertaken a number of directorships in both public and private companies since that time. He was made an officer of the General Order of Australia in 1991 for contributions to industry and export.

Other Directorships held currently or in last 3 years.

Chairman of SDS Corporation Ltd, United Water International Pty Ltd, Tidswell Financial Services Ltd, Land Management Corporation, ACHA Health Group, National Institute of Labour Studies, and of the Water Industry Alliance. Director of Louminco Pty Ltd, and of The University Senior College. Board member of Business SA and Operation Flinders. Member of the Engineering Employers Association Committee of Management

Non-executive Chairman Member of the Audit, Risk & Compliance Committee

Mr J Caddy Non-executive director

51 Non-executive director since May 2000 Jim is the owner/manager of a viticultural business in South Australia and has been a CCW shareholder for 19 years.


Jim is the current Chairman and director of CCW Co-operative Limited, a Board member of the Phylloxera & Grape Industry Board of SA, Grape and Wine Research Corporation and a director of the Co-operative Research Centre for Viticulture (CRCV), CRCV Technologies Pty Ltd, and CRCV Pty.

Member of the Investment Committee

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Mr W J Conn Non-executive director

62 Member of the Board since November 2004. Bill has over 36 years experience in investment banking.


Bill is a director of a number of public and private companies including Becton Property Group Limited, Coneco Limited, Global Wine Partners LLC and International Beverage Investments Limited. He is also a consultant to Merrill Lynch International (Australia) Limited. Over the past three years he has resigned as a director from Village Roadshow Limited, and Grand Hotel Group Limited.

Member of the Audit, Risk & Compliance Committee

Mr J R Hart Non-executive director

48 John was appointed a non executive director to the board on 16 May 2008 and has over 27 years experience in the accounting industry. John is a Fellow of the Institute of Chartered Accountants and a Partner of Ferrier Hodgson (SA) specialising in Corporate Recovery and Corporate Advisory. John is both a Registered and an Official Liquidator and a member of the Insolvency Practitioners Association. He is also a director and advisor to a number of private companies.

Mr G A Wahab COO & Company Secretary

53 Amal has over 26 years experience in the finance industry.

He is a director of several wine companies, including: Bibendum Wine Holdings Limited, and Food And Beverage Australia Limited. He was a director of: Argento Wine Company (3/2007) and Bibendum Wines Limited (6/2007), Gabriel Meffre SAS, International Beverage Investments Limited (8/2007), International Wine Consultants Pty Limited (8/2007) and Global Wine Partners (Australia) Pty Limited (8/2007).

Andra Dundon LLB Compliance Officer

38 Andra was the Group Counsel and Compliance Officer. She resigned 28 August 2007 which was effective November 2007. She was also the Company Secretary from October 2005 to November 2007.

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Mr G MacLaren Compliance Officer and Joint Company Secretary

Graeme is the Compliance Officer and joint Company Secretary since November 2007.

Ms K Grigg FCPA, FAICD Independent Chairperson Audit, Risk and Compliance Committee

58 Chairperson of the Audit, Risk and Compliance Committee, Kathy has over 22 years experience in operational and financial management. Formerly Finance Director Australian Wool Promotion and Research Organisation and the Woolmark Company Pty Limited. She is also a Fellow of the Australian Institute of Company Directors and of CPA Australia.

Member of the Audit, Risk & Compliance Committee


Chairperson of CoINVEST Ltd, Deputy Chairperson of Grape and Wine Research and Development Corporation, Director of Southern Health, Kitaya Holdings Pty Ltd, Navy Health Ltd and a Member of the Human Research and Ethics Committee, Royal Melbourne Hospital,

Mr G J Wilson Investment Manager

50 Geoffrey Wilson has 28 years experience in the Australian and international securities industry. He holds a Bachelor of Science Degree and a Graduate Management Qualification. He is also a Fellow of the Australian Institute of Company Directors.

Member of the Investment Committee


Geoffrey Wilson is the Chairman of WAM Capital Ltd (since March 1999), Wilson Investment Fund Limited (appointed June 2003), Wilson Leaders Limited (appointed October 2003) and the Australian Stockbrokers Foundation Limited. He is a Director of Clime Capital Limited (appointed November 2003), Mariner Wealth Management Limited (appointed September 1999) and Cadence Capital Limited (appointed February 2005). He is also a director of the investment management companies, Wilson Asset Management (International) Pty Ltd, Boutique Asset Management Pty Ltd, MAM Pty Ltd and a Director of the Sporting Chance Cancer Foundation.

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1

Directors’ Report

The Directors of Berren Asset Management Limited ("Berren"), the Responsible Entity of The International Wine Investment Fund ("the Wine Fund"), present their report together with the financial report of the Wine Fund and its controlled entities for the year ended 30 June 2008.

Directors

The following persons were Directors of Berren during the year and up to the date of this report:

M. J. Terlet AO

J. Caddy

W. J. Conn

J. R. Hart (appointed 16 May 2008)

G. A. Wahab, alternate for Mr W. J. Conn Directors have been in office from the start of the financial period to the date of this report unless otherwise stated. The number of units in which Directors of Berren have a relevant interest at the date of this report are disclosed in Note 8 to the financial statements. Principal Activities During the year the principal continuing activity of the economic entity consisted of investing in listed and unlisted equities, unlisted trusts and interest-bearing securities in the global wine industry. On the 29

April 2008 unitholders of the economic entity resolved to wind-up the economic entity in an

orderly manner by 30 June 2009. Operating Result The income statement of the economic entity for the year ended 30 June 2008, as represented by the results of its operations, was as follows:

Economic Entity

2008 2007

$‘000 $’000

Total income 673 12,809

Total expenses (3,588) (4,907)

(Loss)/Profit from before income tax expense (2,915) 7,902

Income tax (expense)/benefit 55 (1,029)

Profit after income tax (expense)/benefit (2,860) 6,873

(Decrease)/Increase in asset revaluation reserve (13,329) (10,393)

Total changes in unitholder funds from non-owner related transactions attributable to unitholders of the parent entity (16,189) (3,520)

Distributions Distributions paid/payable to unitholders during the financial year were as follows: 2008 2007 $’000 $’000 Final Distribution for the year ended 30 June 2008 of 10 cents (2007: 10 cents) per unit payable on 30 September 2008

2,449 2,339

Interim distribution for the year ended 30 June 2008 of 10 cents (2007: 10 cents) per unit paid on 31 March 2008.

2,380 2,301

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2

Indirect Cost Ratio (ICR) 2008 2007 2006 2005 % % % % The ICR for each of the last four years for the economic entity is shown in the following table

1.85

1.54

1.24

1.33 The ICR is calculated in accordance with Corporations Amendment Regulations 2005 (No.1). Earnings per unit Basic and diluted (loss)/earnings per unit (cents per unit) (11,98) 29.81 Weighted average number of units used as the denominator in calculating basic earnings per unit

23,870,900 23,058,556

Significant Changes in State Of Affairs In the opinion of the Directors, there have been no significant changes in the state of affairs during the financial year other than those disclosed in the financial report. On 29 April 2008 unitholders of the economic entity resolved to wind-up the economic entity in an orderly manner by 30 June 2009. Value of Assets The value of the economic entity’s assets as at 30 June 2008 is shown in the following table: Consolidated 2008 2007 $’000 $’000 Carrying value of Assets at 30 June 45,872 71,012 The value of the economic entity’s assets is derived using the bases set out in Note 2 to the financial statements. Committees of the Board of Berren Berren has operated two committees during the year for the operation and compliance with the Corporations Act 2001, ASX listing requirements and the Australian Financial Services Licence. Audit, Risk and Compliance Committee This Committee of the Board consists of the following persons: K. Grigg M. J. Terlet AO W. J. Conn Meetings of the Committee are also attended by: A. Dundon (resigned 28 August 2007 effective November 2007) P. W. Lenton G. A. Wahab G. MacLaren Other Directors and Officers may also attend from time to time as required.

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Investment Committee The Investment Committee of the Board consists of the following persons: J. Caddy G. Wilson Meetings of the Committee are also attended by: G. A. Wahab Other Directors and Officers are invited to attend as required. Meetings of Directors and Board Committees The number of meetings of Berren’s Board of Directors and each of the Board’s Committees held during the year ended 30 June 2008, the number of meetings attended by each Director/Committee member, and in brackets the number of meetings each Director/Committee member was eligible to attend were: Full meetings of Directors Number of meetings held (7) Number of meetings attended by: M. J. Terlet AO 7 (7) W. J. Conn 7 (7) J. Caddy 7 (7) G. A. Wahab 7 (7) J. R. Hart 1 (1) Audit and Risk Compliance Committee meetings Number of meetings held (5) Number of meetings attended by: M. J. Terlet AO 5 (5) W. J. Conn 5 (5) J. Caddy 5 (5) K. Grigg 5 (5) G. A. Wahab 5 (5) G. MacLaren 3 (3) A. Dundon 2 (2) Company Secretary The following persons held the position of company secretary during and at the end of the financial year: G. A. Wahab A. Dundon (resigned 28 August 2007 effective November 2007) G. MacLaren (appointed joint-secretary November 2007) Matters Subsequent to the End of the Financial Year Except as disclosed in the financial report, no matter or circumstance has arisen since 30 June 2008 that has significantly affected, or may significantly affect: i. the operations of the economic entity in this financial year; or ii. the results of those operations in this financial year; or iii. the state of affairs of the economic entity in this financial year. Future developments, prospects and business strategies The Wine Fund has commenced divesting its investments. This divestment program is targeted to be completed by 30 June 2009. It is proposed that the principal use of the funds generated from the sale of investments will be to repay bank debt and make distributions to unitholders.

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Indemnification and Insurance for Officers No insurance premiums are paid out of the assets of the economic entity in regards to insurance cover provided to Berren. So long as the Officers of Berren act in accordance with the Constitution and the Corporations Act 2001, the Officers remain indemnified out of the assets of the economic entity against losses incurred while acting on behalf of the economic entity. During the financial year Berren paid a premium to insure the Directors and Officers for investment management, professional indemnity and directors and officers liability. This premium is not borne by the economic entity. Under the terms of this policy the premium paid is not permitted to be disclosed. The liabilities insured include legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the Officers in their capacity as Officers of entities in the economic entity, Berren, or outside directorships with investee entities, and any other payments arising from liabilities incurred by the Officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the Officers or the improper use by the Officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Wine Fund or Berren. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. No indemnities have been given on insurance premiums paid during or since the end of the financial year for any person who is or has been an auditor of the Wine Fund. Fees paid to and interests held in the economic entity by Berren or its Associates Fees paid to Berren and its associates out of the economic entity’s property during the year are disclosed in Note 8 to the financial statements. No fees were paid to the Directors or Management of Berren during the year out of the economic entity’s property, other than those disclosed in Note 7 to the financial statements. The number of units in the Wine Fund held by Berren as at the end of the financial year are also disclosed in Note 8 to the financial statements. Units in the Trust The movement in units on issue in the Wine Fund during the year is set out below:

Parent Entity 2008 2007 No ‘000 No ‘000 Units on issue at 1 July 23,389 22,704 Units issued during the year 1,100 685 Units on issue at 30 June 24,489 23,389

Environmental Regulations The operations of the Wine Fund are not subject to any particular or significant environmental regulations under a Commonwealth, State or Territory law. Directors’ and Key Management Personnel Remuneration The remuneration of Directors and Key Management Personnel is disclosed in Note 7. Proceedings on behalf of the Wine Fund There are no proceedings which have been brought or intervened in on behalf of the Wine Fund or Berren, nor has any person sought leave to bring proceedings under section 237 of the Corporations Act 2001. Auditor Moore Stephens Sydney was appointed as auditor of the Wine Fund on 9 December 2005.

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5

Non-audit services The Wine Fund may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Wine Fund and/or the economic entity are important. The Board of Directors has considered the position and, in accordance with the advice received from the audit committee is satisfied that the provision of non-audit services 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 and approved by the audit committee to ensure 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 APES 110 Code of Ethics for Professional Accountants, set by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or a decision making capacity for the Wine Fund, acting as an advocate for the company or jointly sharing economic risk and rewards.

Details of amounts paid to the auditors and their related parties are disclosed in Note 9 to the financial statements. Auditor’s independence declaration The lead auditor’s independence declaration for the year ended 30 June 2008 as required by s307C of the Corporations Act 2001 has been received and is set out on page 25 of the financial report. Rounding of amounts to the nearest thousand dollars The Wine Fund is a registered scheme of a kind referred to in Class Order 98/100 issued by ASIC relating to the “rounding off” of amounts in the Directors’ report and financial statements. Amounts in the Directors’ report and financial statements have been rounded to the nearest thousand dollars in accordance with that Class Order, unless otherwise indicated. Signed in accordance with a resolution of the Board of Directors of Berren.

M.J. Terlet AO J. Caddy Chairman Director Dated this 28

day of August 2008

The financial report covers The International Wine Investment Fund as a consolidated entity. The financial report is presented in Australian currency. The financial report was authorised for issue by the Directors of the Responsible Entity on 28 August 2008. The Responsible Entity has the power to amend and re-issue the financial report.

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7

INCOME STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008 Economic Entity Parent Entity 2008 2007 2008 2007 Note $’000 $’000 $’000 $’000

Income

Revenue 6 379 1,373 7,050 6,051

Revaluation of stocks and options 6 - 13 - -

Share of net profits/(losses) of associates 6 194 (98) 194 -

Profit/(Loss) on disposal of investments 6 100 11,521 - -

673 12,809 7,244 6,051

Expenses

Write-down of investments 1,092 1,535 973 -

Finance costs 10 1,558 2,333 1,495 480

Manager’s Fees 254 466 254 466

Custodian’s Fees 13 39 13 37

Special project costs 241 249 224 238

Other expenses 430 285 235 190

3,588 4,907 3,194 1,411

(Loss)/Profit before income tax (2,915) 7,902 4,050 4,640

Income tax benefit/(expense) 11(a) 55 (1,029) - -

(Loss)/Profit for the period (2,860) 6,873 4,050 4,640

Earnings Per Unit:

Basic and Diluted (loss)/earnings per unit (cents per unit) 25 (11.98) 29.81

Distribution (cents per unit) 12 20.00 20.00

The income statements should be read in conjunction with the accompanying notes.

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BALANCE SHEETS

AS AT 30 JUNE 2008 Economic Entity Parent Entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000

ASSETS

Cash and cash equivalents 13 302 7,777 273 6,261

Trade and other receivables 14 33 749 8 628

Investments – Held for trading 15(a) - 518 - -

Other assets 16 1 111 1 -

Investments – Available for sale 15(b) 39,622 56,275 71,201 86,877

Investments accounted for using the equity method

17

5,851

5,578

5,851

-

Deferred tax assets 11(b) 63 4 - -

TOTAL ASSETS 45,872 71,012 77,334 93,766 LIABILITIES

Trade and other payables 18 992 1,445 502 456

Interest bearing liabilities 19 14,875 20,000 14,875 20,000

Current tax liability 11(c) - 62 - -

Provisions 20 2,449 2,339 2,449 2,339

Other liabilities 21 277 3 236 1

Loan from controlled entity 21 - - 51,238 50,249

Deferred tax liabilities 11(d) 7 66 - - TOTAL LIABILITIES 18,600 23,915 69,300 73,045 NET ASSETS 27,272 47,097 8,034 20,721

EQUITY

Issued capital 8,882 7,595 8,882 7,595

Reserves 23 10,097 30,444 (69) 13,126

Retained earnings 8,293 9,058 (779) - TOTAL EQUITY 27,272 47,097 8,034 20,721

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

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CASH FLOW STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008 ECONOMIC ENTITY PARENT ENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000

CASH FLOWS FROM OPERATING

ACTIVITIES

Dividends received 331 58 - -

Interest received 528 169 402 92

Interest and other costs of finance paid (1,567) (2,333) (1,495) (480)

Income tax paid (19) 281 - -

Cash payments to suppliers and employees (892) (593) (412) (293)

Responsible entity’s fees (213) (403) (213) (403)

Custodian’s fees (5) (27) (5) (25)

Net cash used in operating activities 24(b) (1,837) (2,848) (1,723) (1,109)

CASH FLOWS FROM INVESTING

ACTIVITIES

Proceeds from sale of investments 2,750 30,785 2,000 -

Payments for investments (98) (5,662) - -

Net cash provided by investing activities 2,652 25,123 2,000 -

CASH FLOWS FROM FINANCING

ACTIVITIES

Distributions paid (3,431) (3,474) (3,431) (3,474)

Drawdown of borrowings - - - 20,000

Repayment of borrowings (5,125) (14,599) (5,125) -

Repayment from/(to) related entities 266 (103) 2,291 (11,413)

Net cash used in financing activities (8,290) (18,176) (6,265) 5,113

Net (decrease)/increase in cash and cash equivalents (7,475) 4,099 (5,988) 4,004

Cash and cash equivalents at the beginning of the year 7,777 3,678 6,261 2,257

Cash and cash equivalents at the end of the year 24(a) 302 7,777 273 6,261

The cash flow statements should be read in conjunction with the accompanying notes.

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11

NOTES TO THE FINANCIAL STATEMENTS

1. REPORTING ENTITY

The International Wine Investment Fund (“the Wine Fund”) was constituted on 31 October 1989. The Wine Fund does not have a specified termination date unless terminated in accordance with the provisions of the Wine Fund’s Constitution (formerly the Trust Deed). The Wine Fund is a registered managed investment scheme (unit trust) domiciled in Australia. The address of the entity’s registered office is Level 29, Australia Square 264 George Street Sydney NSW 2000. The consolidated financial statements of the Wine Fund as at and for the year ended 30 June 2008 comprise the Wine Fund and its subsidiaries (together referred to as the “economic entity”)

and

the economic entity’s interest in associates. The economic entity primarily is involved in investing in listed and unlisted equities, unlisted trusts, equity derivatives and interest bearing securities in the global wine industry.

2. BASIS OF PREPARATION (a) Statement of compliance

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (‘AASBs’), including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001. The financial statements were approved by the Board of Directors of the Responsible Entity on 28 August 2008.

(b) Basis of measurement The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value. The methods used to measure fair values are discussed further in Note 4.

(c) Functional and presentation currency These consolidated financial statements are presented in Australian dollars, which is the Wine Fund’s functional currency and the functional currency of the economic entity.

(d) Liquidity basis of presentation In accordance with paragraph 51 of AASB 101 liquidity basis presentation has been adopted for the balance sheet whereby most liquid items are presented first and most illiquid last.

3. SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all periods presented in these

consolidated financial statements, and have been applied consistently by economic entity.

(a) Principles of Consolidation The economic entity’s financial statements comprise consolidated accounts of all controlled entities. Controlled entities are defined to include all entities over which the Wine Fund exercises control. Details of the controlled entities are set out in Note 27. Unrealised gains and losses and inter-entity balances resulting from transactions with the controlled entities are eliminated in full on consolidation. The controlled entities have a 30 June financial year end. Investments in associates are accounted for in the consolidated financial statements using the equity method. Under this method, the economic entity’s share of the post-acquisition profits or losses of associates are recognised in the consolidated statements of financial performance, and its share of post-acquisition movements in reserves is recognised in consolidated reserves. The cumulative post-acquisition movements are adjusted against the cost of the investment. Associates are those entities over which the economic entity exercises significant influence, but not control.

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(b) Financial Instruments

Financial instruments, incorporating financial assets and financial liabilities, are recognised

when the entity becomes a party to the contractual provisions of the instrument. Trade date

accounting is adopted for financial assets that are delivered within timeframes established

by marketplace convention.

Financial instruments are initially measured at fair value plus transactions costs where the

instrument is not classified as at fair value through profit or loss. Transaction costs related

to instruments classified as at fair value through profit or loss are expensed to profit or loss

immediately. Financial instruments are classified and measured as set out below.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows

expires or the asset is transferred to another party whereby the entity no longer has any

significant continuing involvement in the risks and benefits associated with the asset.

Financial liabilities are derecognised where the related obligations are either discharged,

cancelled or expire. The difference between the carrying value of the financial liability

extinguished or transferred to another party and the fair value of consideration paid,

including the transfer of non-cash assets or liabilities assumed, is recognised in profit or

loss.

Classification and Subsequent Measurement

i. Financial assets at fair value through profit or loss

Financial assets are classified at fair value through profit or loss when they are held

for trading for the purpose of short term profit taking, where they are derivatives not

held for hedging purposes, or designated as such to avoid an accounting mismatch

or to enable performance evaluation where a economic entity of financial assets is

managed by key management personnel on a fair value basis in accordance with a

documented risk management or investment strategy. Realised and unrealised gains

and losses arising from changes in fair value are included in profit or loss in the

period in which they arise.

ii. Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable

payments that are not quoted in an active market and are subsequently measured at

amortised cost using the effective interest rate method.

iii. Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed

maturities and fixed or determinable payments, and it is the economic entity’s

intention to hold these investments to maturity. They are subsequently measured at

amortised cost using the effective interest rate method.

iv. Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either

designated as such or that are not classified in any of the other categories. They

comprise investments in the equity of other entities where there is neither a fixed

maturity nor fixed or determinable payments.

v. Financial Liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently

measured at amortised cost using the effective interest rate method.

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Fair value

Fair value is determined based on current bid prices for all quoted investments. Valuation

techniques are applied to determine the fair value for all unlisted securities, including recent

arm’s length transactions, reference to similar instruments and option pricing models.

Unlisted investments are determined by an independent valuation from Grant Thornton as follows: • Gabriel Meffre – Equity accounted. • Bibendum Wine Holdings Limited – Share price when purchased. • National Vineyard Fund of Australia – At book value. These valuations are based on taking into consideration the sale of the investments within a 12 months time span.

Impairment

At each reporting date, the economic entity assesses whether there is objective evidence

that a financial instrument has been impaired. In the case of available-for-sale financial

instruments, a prolonged decline in the value of the instrument is considered to determine

whether an impairment has arisen. Impairment losses are recognised in the income

statement.

Financial Guarantees

Where material, financial guarantees issued, which require the issuer to make specified

payments to reimburse the holder for a loss it incurs because a specified debtor fails to

make payment when due, are recognised as a financial liability at fair value on initial

recognition. The guarantee is subsequently measured at the higher of the best estimate of

the obligation and the amount initially recognised less, when appropriate, cumulative

amortisation in accordance with AASB 118: Revenue. Where the entity gives guarantees in

exchange for a fee, revenue is recognised under AASB 118.

The fair value of financial guarantee contracts has been assessed using a probability

weighted discounted cash flow approach. The probability has been based on:

— the likelihood of the guaranteed party defaulting in a year period;

— the proportion of the exposure that is not expected to be recovered due to the

guaranteed party defaulting; and

— the maximum loss exposed if the guaranteed party were to default.

(c) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of 12 months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

(d) Revenue Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. Dividend revenue is recognised when the right to receive a dividend has been established. Dividends received from associates are accounted for in accordance with the equity method of accounting. All revenue is stated net of the amount of goods and services tax (GST).

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(e) Taxation

Under current legislation, the Wine Fund is not subject to income tax provided the distributable income of the Wine Fund is fully distributed either by way of cash or reinvestment (i.e. unitholders are presently entitled to the income of the Wine Fund). However, the controlled entity is subject to tax and the economic entity has adopted the liability method of tax effect accounting whereby the charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

(f) Foreign Currency Transactions and balances Functional and presentation currency The functional currency of the economic entity is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency. Transaction and balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined. Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment hedge.

(g) Distributions In accordance with the Wine Fund’s Constitution, the Wine Fund fully distributes by cash or reinvestment its distributable income to unitholders. Net income is determined by reference to the net taxable income for tax purposes of the Wine Fund. The distributions are payable twice a year and the payment dates are governed by the Wine Fund’s Constitution. Provision is made for the amount of any distribution declared, determined or publicly recommended by the manager on or before the end of the financial year but not distributed at balance date.

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(h) Receivables

Amounts are generally received within 30 days of being recorded as receivables. Collectability of receivables is reviewed on an ongoing basis. Receivables which are known to be uncollectable are written off. A provision for doubtful debts is raised where some doubt as to collection exists. The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date.

(i) Payables Liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation for amounts to be paid in the future for goods and services received. The amounts are unsecured and are normally settled within 45 days.

(j) Provisions Provisions are recognised when the economic entity has a legal or constructive obligation, as a result of past events for which it is probable that an outflow of economic benefits will result in that outflow can be reliably measured.

(k) Finance Costs Financing costs are recognised as expenses in the period in which they are incurred. Financing costs include: • interest on bank overdrafts and short-term and long-term borrowings • amortisation of discounts or premiums relating to borrowings, and • amortisation of ancillary costs incurred in connection with the arrangement of borrowings.

(l) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(m) Investment in Associates An associated entity is one in which the Wine Fund and / or its controlled entities exercises significant influence but not control. In the consolidated financial statements, investments in associates are accounted for using the equity method of accounting. Investment in associates are carried at the lower of the equity accounted amount and the recoverable amount. The economic entity’s share of the associates’ net profit after tax is recognised in the consolidated income statement. Other movements in reserves are recognised directly in reserves.

(n) Interest Bearing Liabilities Loans are carried at their principal amounts which represent the present value of future cash flows associated with servicing the debt. Interest is accrued over the period it becomes due and is recorded as part of liabilities.

(o) Earnings per unit Basic earnings per unit is determined by dividing net profit after income tax attributable to unitholders of the fund, by the weighted average number of units outstanding during the financial year.

(p) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

(q) Rounding of Amounts The parent entity has applied the relief available to it under ASIC Class Order 98/100 and accordingly, amounts in the financial report and Directors’ report have been rounded off to the nearest $1,000.

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(r) Critical Accounting Estimates and Judgments Key Estimates — Impairment

The economic entity assesses impairment at each reporting date by evaluating conditions specific to the economic entity that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates. The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the economic entity.

In particular, information about significant areas of estimation uncertainty and crucial judgments in applying accounting policies that have the most siginificant effect on the amount recognised in the financial statements are described in Note 15 – Financial Assets.

(s) New standards and interpretations not yet adopted Certain new accounting standards and interpretations have been published that are not

mandatory for 30 June 2008 reporting periods. The economic entity’s and the parent entity’s assessment of the impact of these new standards and interpretations is set out below. They have not been adopted in preparation of the financial statements at reporting date and may not have to be applied on application date if the economic entity is wound up by 30 June 2009 as proposed. Revised AASB 101 Presentation of Financial Statements and AASB 2007-8 Amendments to Australian Accounting Standards arising from AASB 101 A revised AASB 101 was issued September 2007 and is applicable for annual reporting periods beginning on or after 1 January 2009. It requires the presentation of a statement of comprehensive income and makes changes in equity, but will not affect any of the amounts recognised in the financial statements. If an entity has made a prior period adjustment or has reclassified items in the financial statements, it will need to disclose a third balance sheet (statement of financial position), this one being as at the beginning of the comparative period. The economic entity intends to apply the revised standard from 1 July 2009.

(t) Restatement due to prior period error In the 2006 and 2007 financial years, the economic entity recognised a deferred tax asset with

respect to unrealised losses on investments in foreign entities. As the economic entity holds greater than 10% in these investments and these entities are deemed to be conducting active foreign businesses, they would qualify for exemption from capital gains tax upon realisation. Accordingly, no deferred tax asset should have been recognised. This error has been corrected retrospectively and comparative information in relation to the 2007 financial year has been restated accordingly. The impact of correcting this error on the 2007 financial year financial information was to: • Reduce opening retained earnings by $995,000 • Increase the income tax expense and resultant reduction in the reported profit to members by $460,000; • Reduce deferred tax asset and net assets by $1,455,000. This change decreased the reported basic and diluted earnings per share by 2 cents for the 2007 financial year.

(u) Retained earnings of the parent entity Retained earnings in the Wine Fund represent differences arising where accounting

profit/losses are different to taxable distributions.

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4. DETERMINATION OF FAIR VALUES A number of the economic entity’s accounting policies and disclosures require the determination

of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

Investments in equity and debt securities The fair value of listed financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets is determined by reference to their quoted bid price at the reporting date. The fair value of held-to-maturity investments is determined for disclosure purposes only.

5. SEGMENT REPORTING

Primary Reporting - Business Segments The economic entity operates predominantly in Australia and in one business, being investing in listed, unlisted equities, unlisted trusts, and interest bearing securities in connection with the global wine industry. Secondary Reporting - Geographical Segments In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of the investment. Segment assets are based on the geographical location of the assets. Liabilities are allocated to segments based on the underlying geographical location of the investment asset that gives rise to the liability. Segment revenues, assets and liabilities are those directly attributable to a segment. Results have not been allocated on the basis that expenses cannot be attributable to individual segments on a reasonable basis.

2008 Revenue

$’000 Assets

$’000 Liabilities

$’000 Geographical Location Europe 319 14,117 - United States - 28,295 - New Zealand 8 - - Australia 52 3,406 18,600 Total 379 45,872 18,600

2007 Revenue

$’000 Assets

$’000 Liabilities

$’000 Geographical Location Europe (391) 14,371 - United States - 41,500 - New Zealand 6 441 - Australia 1,758 14,700 23,915 Total 1,373 71,012 23,915

6. REVENUE ECONOMIC ENTITY PARENT ENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000 From operating activities Dividends 331 58 6,924 5,409 Interest 253 738 126 661 Net realised (loss)/gain on disposal of trading

securities (186) 968 - (19) Other - Net foreign exchange loss (19) (391) - - Revenue from ordinary activities 379 1,373 7,050 6,051 Share of net profit/(losses) from associates 194 (98) 194 - Revaluation of stocks and options - 13 - - Profit from disposal of investments 100 11,521 - - Total Revenue 673 12,809 7,244 6,051

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7. REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL

Responsible Entity The Responsible Entity and Trustee of the Wine Fund is Berren Asset Management Limited (”Berren”). Key Management Personnel Names and positions held of economic and parent entity key management personnel in office at any time during the financial year are:

Key Management Person Position Specified Directors of Responsible Entity M. J. Terlet AO (Chairman) J. Caddy (Non-executive director) W. J. Conn (Non-executive director) J. R. Hart (Non-executive director – appointed 16 May 2008) Management personnel G. A. Wahab (Chief Operating Officer) (Company Secretary) P. W. Lenton (Chief Financial Officer) G. MacLaren (Compliance Officer – appointed November 2007) (Joint Company Secretary – appointed December

2007) A. Dundon (Group Counsel – resigned 28 August 2007 effective

November 2007) (Company Secretary – resigned 28 August 2007

effective November 2007)

Specified Directors’ remuneration

2008 2007

Salary & Fees

$

Super-annuation

$ Other

$ Total

$

Salary & Fees

$

Super-annuation

$ Other

$ Total

$ M. J. Terlet AO 55,046 4,954 - 60,000

54,894 5,106 - 60,000

J. Caddy 25,688 2,312 - 28,000 25,688 2,312 - 28,000

W. J. Conn 28,000 - - 28,000 28,000 - - 28,000

J. R. Hart - - - - - - - -

108,734 7,266 - 116,000 108,582 7,418 - 116,000

Management Personnel remuneration 2008 2007

Salary & Fees

$

Super-annuation

$ Other

$ Total

$

Salary & Fees

$

Super-annuation

$ Other

$ Total

$

G. A. Wahab 90,000 - - 90,000 90,000 - - 90,000

A. Dundon 20,463 - - 20,463 30,000 - - 30,000

G. MacLaren 15,645 - - 15,645 - - - -

126,108 - - 126,108 120,000 - - 120,000

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P. W. Lenton is a partner of Nexia Court & Co Chartered Accountants who were engaged during the financial year to provide accounting services to the Wine Fund. As part of this engagement Mr Lenton performs the duties of the Chief Financial Officer. Services provided by Nexia Court & Co are billed to Berren monthly (unless the service is of a specific nature applicable to the Wine Fund in which case the fees are billed to the Wine Fund) the amount billed for special projects in 2008 is $160,792 (2007: $52,258), and accordingly Mr Lenton does not directly receive compensation for the services he provides as Chief Financial Officer. As per the service agreement with Nexia Court & Co, the firm is currently paid $46,200 per annum for monthly services it provides including Mr Lenton’s duties as Chief Financial Officer. Principles used to determine the nature and amount of remuneration The objective of the remuneration structure is to ensure reward for performance is competitive and appropriate for the results delivered. The Board ensures that remuneration satisfies the following key criteria for good remuneration governance practices:

• Competitiveness and reasonableness; • Acceptability to unitholders and shareholders of Berren; • Performance alignment of executive compensation; • Transparency; and • Capital management.

Fees and payments to Directors reflect the demands which are made on, and the responsibilities of, the Directors. Directors’ fees and payments are reviewed annually by the Board. Service Agreements Remuneration and other terms of employment for the management personnel were formalised in their respective service agreements. These agreements provide for the payment of fees and superannuation and are subject to annual review. The agreements are able to be terminated at the discretion of the Directors. The Wine Fund and Berren did not enter into or continue any share or unit based compensation, share or unit option schemes, or provide any loans to its Directors or management personnel during the financial year.

Fees and payments to key management personnel reflect the demands which are made on, and the responsibilities of, the key management personnel. Key management personnel remuneration is reviewed annually by the Board.

8. RELATED PARTIES Units held by Key Management Personnel and their related entities

UNITS HELD

DIRECTLY UNITS HELD

BENEFICIALLY 2008 2007 2008 2007 J Caddy 314 314 - - Units in the Wine Fund were not received as compensation.

Other transactions of Directors and Director related entities

Mr W. J. Conn is a Director and beneficial shareholder of International Beverage Investments Limited and a Director of Global Wine Partners LLC. These entities provide consultancy and administrative services to Berren on an arms length basis. Mr G. A. Wahab is a beneficial shareholder of International Beverage Investments Limited, and was a Director of International Beverage Investments Limited, International Wine Consultants Pty Limited and Global Wine Partners (Australia) Pty Limited. These entities provide consultancy and administrative services to Berren on an arm’s length basis. Fees paid and payable to International Wine Consultants Pty Ltd, Global Wine Partners (Australia) Pty Limited and related parties by Berren and the economic entity were as follows:

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2008 2007

$ $

Consultancy paid by Berren 90,000 90,000

Consultancy paid or payable by the economic entity1 496,634 1,484,374

Others costs paid by Berren 62,342 32,121

Other costs paid by the economic entity 4,611 30,649

653,587 1,637,144

1 Fees paid and payable to Global Wine Partners (Australia) Pty Limited on work done in

relation to the sale of two unlisted investments. These fees were negotiated on an arms length basis and endorsed by an independent opinion from Grant Thornton Corporate (NSW) Pty Limited. As at 30 June 2008, $465,985 remains payable (2007: $931,968).

Directors, consultancy and other costs borne by Berren are funded out of its Responsible Entity fees.

Other Entities (i) Berren Asset Management Limited

The aggregate amounts of transactions between the Wine Fund and Berren are as follows:

2008 2007 $’000 $’000 Responsible Entity’s fees 254 466 Trustee Fee 42 43 Ordinary operating expenses reimbursed or

invoiced 372 394 Special Projects costs reimbursed 241 176 909 1,079

As at 30 June 2008, Berren held 242,132 (2007: 242,132) units in the Wine Fund and

$276,582 (2007: $2,735) was owing to Berren by the Wine Fund. The determination of the fee for Berren, the single Responsible Entity (SRE), is governed by the Wine Fund’s Constitution. The formula used in the calculation is based on market capitalisation for a specific period twice a year and is also dependent on the level of ordinary operating fund expenses for each half year. The Special Project costs include expenditure related to the sale of unlisted investments, and to the proposed restructure of the Wine Fund and to the redemption offer and are in accordance with the explanatory memorandums distributed to unitholders.

(ii) CCW Co-operative Limited CCW Co-operative holds 131,014 units (2007: 131,014) in the Wine Fund, and Mr J. Caddy is the Chairman of CCW Co-operative Limited (CCW).

(iii) Custodian fees

Australian Executor Trustees (SA) Limited (AET) is the Custodian of the Wine Fund’s assets. Under the Custodian Agreement, the Custodian’s fee is based on the Net Tangible Assets of the Wine Fund. A fee is applied on a tiered basis and is payable quarterly to AET. Fees paid to AET were as follows:

ECONOMIC ENTITY PARENT ENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000 Custodian Fees Paid 5 19 5 19

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9. AUDITORS’ REMUNERATION ECONOMIC ENTITY PARENT ENTITY 2008 2007 2008 2007 $ $ $ $ Moore Stephens

- auditing or reviewing the financial report 42,977 39,329 22,750 24,429

- Other audit related work - - - - - Taxation services 25,834 25,230 7,013 12,118

68,811 64,559 29,763 36,547

ECONOMIC ENTITY PARENT ENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000 10. FINANCE COSTS Bank Loans 1,313 1,919 1,313 479 Bank Facility Fees 245 414 182 1 1,558 2,333 1,495 480

11. INCOME TAX

(a) The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows:

Prima facie tax payable / (refundable) on profit from ordinary activities before income tax at 30% (2007: 30%)

(12) 2,601 - -

Add: tax effect of:

Net capital gain (before recoupment of prior year capital losses)

- 4,489 - -

Trading stock valuation for tax purposes (net increase)

- 13 - -

Write-down of investments 56 - - -

Imputation credits received 1 6 - -

Reversal of deferred tax on unrealised movement in foreign investments

- 460 - -

Unrealised foreign exchange loss (current year)

6 18 - -

Less: tax effect of:

Non assessable foreign dividends

(96) - - -

Borrowing costs (section 25) - (4) - -

Accounting profit on sale of investments

- (3752) - -

Non-assessable capital gains

(10) (3376) - -

Share of net profits of associates

- - - -

Over provision in prior year - 574 - -

Income tax (benefit)/expense attributable to entity

(55) 1,029 - -

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ECONOMIC ENTITY PARENT ENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000 (b) DEFERRED TAX ASSETS

Carried forward tax losses 53 - - - Accruals 6 3 - - Unrealised movement in

investments 4 1 - - Realised capital losses - - - - 63 4 - -

(c) CURRENT TAX

Income tax payable - 62 - -

(d) DEFERRED TAX LIABILITIES

Accrued interest 7 66 - -

12. DISTRIBUTIONS Cents per unit Cents per unit Distributions Paid 10.00 10.00 Distributions Payable 10.00 10.00 20.00 20.00

DISTRIBUTION OF NET INCOME The distribution of net income is in accordance with the Wine Fund’s constitution. (Refer also Note 3

(g)). PARENT ENTITY 2008 2007 $’000 $’000 Profit/(loss) from ordinary activities after income tax expense 4,050 4,640 Add: Distribution equalisation amount transferred from unitholders fund 779 - Net income to be distributed 4,829 4,640 Distribution paid and payable 4,829 4,640

Dividend Franking Account Franking credits available to

shareholders of International Wine Investment Fund Pty Limited for subsequent financial years based on a tax rate of 30% (2007: 30%)

11,985

14,927

-

-

The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends.

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ECONOMIC ENTITY PARENT ENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000 13. CASH AND CASH EQUIVALENTS

Cash at bank and cash in hand 169 6,229 140 5,728 Short term bank deposits 133 1,548 133 533

302 7,777 273 6,261

The short term bank deposit of $133,234 (2007: $1,548,241) is used as security by financial institutions against the controlled entity’s multi option facility and is available for use only in exchange for other security. The effective interest rate on short-term bank deposits was 7.38% (2007: 5.68%); these deposits have an average maturity of 30 days.

14. TRADE AND OTHER RECEIVABLES Accrued Interest 25 594 - 569 Debtors - 147 - 51 Withholding Tax 8 8 8 8 33 749 8 628

15. FINANCIAL ASSETS (a) Investments – Held for Trading

Investments listed on prescribed stock exchange - at fair value

Shares in Australian listed corporations - 518 - -

(b) Investments – Available for Sale Investments listed on prescribed stock exchange – at fair value

Shares in foreign listed corporations

28,295

41,940

28,275

41,470

28,295 41,940 28,275 41,470

Unlisted investments – at valuation

An independent valuation of unlisted investments as at 30 June 2008 has been undertaken by Grant Thornton Services (SA) Pty Limited, and the Directors have adopted the recommendations contained in the valuation report when valuing the Wine Fund’s unlisted investments.

Convertible notes in other corporations

-

5,542

-

5,542

Shares in foreign unlisted corporations

8,266

8,793

-

-

Shares in Australian unlisted investments

3,061

-

3,061

-

11,327 14,335 3,061 5,542

Unlisted investments – at fair value

Shares in controlled entity - - 39,865 39,865

- - 39,865 39,865

39,622 56,275 71,201 86,877

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ECONOMIC ENTITY PARENT ENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000

16. OTHER ASSETS Prepayments - 9 - - GST refundable 1 102 1 - 1 111 1 -

17. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD In the financial statements of the economic entity, investments in associates are accounted for

at fair value. The economic entity accounts for investments in associates using the equity method. Further details regarding investments in associates are included in Note 28.

Shares in foreign associates 5,851 5,578 5,851 -

18. TRADE AND OTHER PAYABLES Trade creditors and accruals 992 1,445 502 456 992 1,445 502 456

19. INTEREST BEARING LIABILITIES Commercial Bills 14,875 20,000 14,875 20,000 14,875 20,000 14,875 20,000

Financing Arrangements The economic entity has access to a multi-option facility with a decreasing limit due to the repayment of the Commerical Bill (2007: $35,000,000). The facility includes commercial bill acceptance, bank guarantee and treasury products.

Facilities utilised at balance date: 14,875 20,000 14,875 20,000 Facilities unutilised at balance

date: - 15,000 - 15,000

The multi-option facility of the economic entity is secured by an interlocking guarantee and indemnity for $35 million given by Australian Executor Trustees (SA) Limited (AET) as the Custodian for the Wine Fund, the Controlled Entity and Berren. The guarantee is supported by registered mortgage debentures over the fixed and floating assets of Berren as Responsible Entity of the Wine Fund, the Controlled Entity and AET as Custodian of the Wine Fund, and a general mortgage/letter of lien over shares held in Constellation Brands Inc. (CDIs). Interest on the multi-option facility is charged at prevailing market rates. The weighted average interest rate for the facilities as at 30 June 2008 is 7.22% (2007 : 6.39%) and applicable fees. Financing facilities are denominated in Australian dollars.

20. PROVISIONS Provision for distribution 2,449 2,339 2,449 2,339 Carrying amount at start of year 2,339 2,270 2339 2,270 Payment of distributions (4,719) (4,571) (4,719) (4,571) Additional provisions recognised 4,829 4,640 4,829 4,640 Carrying amount at end of year 2,449 2,339 2,449 2,339

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ECONOMIC ENTITY PARENT ENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000 21. OTHER LIABILITIES Amount owing to related entity 277 3 236 1

Loan from controlled entity - - 51,238 50,249

22. CAPITAL MANAGEMENT

Management controls the capital of the economic entity in order to maintain a good debt to equity ratio, provide the unitholders with adequate returns and to ensure that the economic entity can fund its operations as a going concern.

The economic entity’s debt and capital includes ordinary unit capital and financial liabilities, supported by financial assets.

There are no externally imposed capital requirements.

Management effectively manages the economic entity’s capital by assessing the economic entity’s financial risk and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distribution to unitholders and unit issues.

There have been no changes in the strategy adopted by Management to control the capital of the economic entity since the prior year.

ECONOMIC ENTITY PARENT ENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000 23. RESERVES Asset revaluations (78) 13,251 (69) 13,126 Foreign Currency Translation (543) (449) - - Capital Profits 10,718 17,642 - - 10,097 30,444 (69) 13,126 Movements during the year (a) Asset Revaluation Balance at beginning of year 13,251 23,643 13,126 21,826 Revaluation decrement on

listed shares (13,205) (8,684) (13,195) (8,700) Amounts realised on sale of

investments (124) (1,708) - - Balance at the end of year (78) 13,251 (69) 13,126 (b) Foreign Currency

Translation Balance at beginning of year (449) (449) - - Net exchange differences on

translation of investment in foreign entities (94) - - -

Balance at end of year (543) (449) - - (c) Capital Profits Balance at beginning of year 17,642 23,052 - - Transferred to Retained

Profits (6,924) (5,409) - - Balance at the end of year 10,718 17,642 - -

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Asset Revaluation Reserve The asset revaluation reserve arises on the revaluation of non-current assets. Where a

revalued asset is sold that portion of the asset revaluation reserve which relates to that asset,

is effectively realised and is transferred to retained profits.

Foreign Currency Translation Reserve The foreign currency translation reserve comprises all foreign currency differences arising

from the translation of the financial statements of foreign investments.

Capital Profits Reserve The capital profits reserve reflects the transfer of realised profits from the sale of available-for-

sale investments and other capital assets.

ECONOMIC ENTITY PARENT ENTITY 2008 2007 2008 2007 $’000 $’000 $’000 $’000 24. NOTES TO THE STATEMENTS OF CASH FLOWS (a) Reconciliation of cash Cash and cash equivalents 302 7,777 273 6,261 (b) Reconciliation of (loss)/profit from

ordinary activities after income tax to net cash provided by operating activities

(Loss)/profit from ordinary activities after income tax (2,860) 6,873 4,829 4,640

Net (profit) / loss from sale of investments (100) (11,521) - -

Net (profit) / loss from sale of trading investments 186 (968) - -

Interest declared but not received in cash - - (293) -

Dividend declared but not received in cash - - (7,703) (5,409)

Revaluation of trading securities - (13) - - Foreign exchange loss / (gain) 19 391 - - Write down in non-listed investment 1,092 1,535 973 - Share of associate’s (profit) / loss after

adjusting for dividend (194) 98 (194) - Changes in net assets and liabilities (Increase)/decrease in debtors 752 (90) 619 (586) Increase/(Decrease) in creditors (453) 1,230 46 246 (Increase)/decrease in other

current assets 9 (4) - - (Decrease)/increase in tax

payable (288) (379) - - (1,837) (2,848) (1,723) (1,109)

25. EARNINGS PER UNIT 2008 2007 $ $ Basic and diluted (loss)/earnings per unit (cents per unit) (11.98) 29.81 Weighted average number of units used as the denominator in

calculating basic earnings per unit 23,870,900 23,058,556 Earnings used in the calculation of earnings per share (2,860,000) 6,873,000

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26. FINANCIAL RISK MANAGEMENT (a) Financial Risk Management Policies

The economic entity’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable, loans to and from subsidiaries and bills.

The main purpose of non-derivative financial instruments is to raise finance for economic entityoperations.

i. Treasury Risk Management

An investment committee consisting of a senior executive, a non-executive Director and an independent advisor meet on a regular basis to analyse financial risk exposure and to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts.

The committee’s overall risk management strategy seeks to assist the consolidated economic entity in meeting its financial targets, whilst minimising potential adverse effects on financial performance.

The investment committee operates under policies approved by the board of Directors. Risk management policies are approved and reviewed by the Board on a regular basis. These include the use of credit risk policies and future cash flow requirements.

ii. Financial Risk Exposures and Management

The main risks the economic entity is exposed to through its financial instruments are interest rate risk, foreign currency risk, liquidity risk, credit risk and price risk.

Interest rate risk

The economic entity accepts its exposures to changes in interest rates because the Directors believe the Wine Fund has sufficient net assets to absorb any foreseeable interest rate increases.

For further details on interest rate risk refer to Note 26(b).

Foreign currency risk

The economic entity is exposed to fluctuations in foreign currencies arising from the sale and purchase of investments in currencies other than the economic entity’s measurement currency. Refer to Note 26(b) for further details.

Liquidity risk

The economic entity manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities are maintained.

Credit risk

Credit risk is the risk of financial loss to the economic entity if a counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the economic entity’s transactions with entities in which the economic entity has investments and from accrued interest.

As income is generated from investments, the economic entity is not dependent on customers for cash flows and income. The economic entity manages credit risk by investing with reputable companies, at the discretion of the investment committee.

Price risk

Price risk is the risk that changes in market prices will affect the economic entity’s net asset position. The economic entity manages price risks by only investing in equities that the investment committee has specific and detailed knowledge of and that are consistent with the stated investment strategy of wine industry specialisation.

b. Financial Instruments

i Financial instrument composition and maturity analysis:

The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as management’s expectations of the settlement period for all other financial instruments. As such, the amounts may not reconcile to the balance sheet.

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Fixed Interest Rate Maturing

Weighted Average Effective Interest Rate

Floating Interest Rate

Economic Entity 2008 %

2007 %

2008 $000

2007 $000

Financial Assets:

Cash and cash equivalents 7.02 5.68 169 6,229

Receivables - - - -

Investments - 5.50 - -

Total Financial Assets 169 6,229

Financial Liabilities:

Bank loans and overdrafts 7.22 6.39 - -

Trade and sundry payables - - - -

Amount payable to related parties - - - -

Total Financial Liabilities - -


Within 1 Year 1 to 5 years

Economic Entity (continued) 2008 $000

2007 $000

2008 $000

2007 $000

Financial Assets:

Cash and cash equivalents 133 1,548 - -

Receivables - - - -

Investments - 518 - -

Total Financial Assets 133 2,066 - -


Bank loans and overdrafts 14,875 20,000 - -



Total Financial Liabilities 14,875 20,000 - -

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Non Interest Bearing Total

Economic Entity (continued) 2008 $000

2007 $000

2008 $000

2007 $000

Financial Assets:

Cash and cash equivalents - - 302 7,777

Receivables 97 864 97 864

Investments 45,473 61,853 45,473 62,371

Total Financial Assets 45,570 62,717 45,872 71,012


Bank loans and overdrafts - - 14,875 20,000

Trade and sundry payables 3,448 3,787 3,448 3,787

Amount payable to related parties 277 - 277 -

Total Financial Liabilities 3,725 3,787 18,600 23,787


Weighted Average Effective Interest Rate

Floating Interest Rate

Parent Entity 2008 %

2007 %

2008 $000

2007 $000

Financial Assets:

Cash and cash equivalents 7.02 5.68 140 5,728

Receivables - - - -

Investments - - - -

Total Financial Assets 140 5,728


Bank loans and overdrafts 7.22 6.39 - -



Total Financial Liabilities - -


Within 1 Year 1 to 5 Years

Parent Entity (continued) 2008 $000

2007 $000

2008 $000

2007 $000

Financial Assets:

Cash and cash equivalents 133 533 - -

Receivables - - - -

Investments - - - -

Total Financial Assets 133 533 - -


Bank loans and overdrafts 14,875 20,000 - -



Total Financial Liabilities 14,875 20,000 - -

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Non Interest Bearing Total

Parent Entity (continued) 2008 $000

2007 $000

2008 $000

2007 $000

Financial Assets:

Cash and cash equivalents - - 273 6,261

Receivables 9 628 9 628

Investments 77,052 86,877 77,052 86,877

Total Financial Assets 77,061 87,505 77,334 93,766


Bank loans and overdrafts - - 14,875 20,000

Trade and sundry payables 2,951 2,795 2,951 2,795

Amount payable to related parties 51,474 50,250 51,474 50,250

Total Financial Liabilities 54,475 53,045 69,300 73,045

Trade and sundry payables are expected to be paid as followed:

Economic Entity Parent Entity

2008 2007 2008 2007

$000 $000 $000 $000

Less than 6 months 2,982 3321 2,951 2,795

6 months to 1 year 466 466 - -

3,448 3,787 2,951 2,795

ii. Net Fair Values

— Term receivables and fixed interest securities are carried at face value.

— Listed investments have been valued at the quoted market bid price at balance date.. For unlisted investments where there is no organised financial market, the net fair value has been based on a reasonable estimation of the underlying net assets or discounted cash flows of the investment.

— Other loans and amounts due are carried at fair value.

— Other assets and other liabilities approximate their carrying value.

No financial assets and financial liabilities are readily traded on organised markets in standardised form other than listed investments.

Financial assets where the carrying amount exceeds net fair values have been written down.

Fair values at balance date are materially in line with carrying values.

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iii. Sensitivity Analysis

Interest Rate Risk, Foreign Currency Risk and Price Risk

The economic entity has performed sensitivity analysis relating to its exposure to interest rate risk, foreign currency risk and price risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.

Interest Rate Sensitivity Analysis

At 30 June 2008, the effect on profit and equity as a result of changes in the interest rate.


2008 $000

2007 $000

2008 $000

2007 $000

Change in profit

— Increase in interest rate by 10%

(114) (131) (114) (131)

— Decrease in interest rate by 10%

114 131 114 131

Change in equity

— Increase in interest rate by 10%

(114) (131) (114) (131)

— Decrease in interest rate by 10%

114 131 114 131

Change in Equity

Foreign Currency Risk Sensitivity Analysis

At 30 June 2008, the effect on profit and equity as a result of changes in the value of the Australian Dollar to the Euro and Pound Sterling, with all other variables remaining constant is as follows:


2008 $000

2007 $000

2008 $000

2007 $000

There will be no change in profit as revaluations do not go to the income statement.

Change in Equity

— Improvement in AUD to EUR by 10%

(532) (507) (532) -

— Decline in AUD to EUR by 10%

650 620 650 -

— Improvement in AUD to GBP by 10%

(751) (799) - -

— Decline in AUD to GBP by 10%

918 977 - -

Price Risk Sensitivity Analysis

At 30 June 2008, the effect on profit and equity as a result of changes in the price risk, with all other variables remaining constant would be as follows for listed investments:


2008 $000

2007 $000

2008 $000

2007 $000

There will be no change in profit as revaluations do not go to the income statement.

Change in Equity

— Increase in market price ofCBR investment by 10%

2,829 4,150 2,828 4,147

— Decrease in market price of CBR investment by 10%

(2,829) (4,150) (2,828) (4,147)

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27. INVESTMENT IN CONTROLLED ENTITIES

Name of entities Country of

Incorporation Class of shares

Investment held at fair

value

Percentage held by

economic entity

International Wine Investment Fund Pty Ltd Australia Ordinary $39,865,087 100%

International Wine Investment Fund (Victoria) Pty Ltd Australia Ordinary $1 100%

The investment in controlled entities has not changed since the 2007 year. 28. INVESTMENTS IN ASSOCIATES

Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting and are carried at fair value by the controlled entity (International Wine Investment Fund Pty Limited), (see Note 17). Information relating to the associates is set out below.

Name of Company

Principal Activity

Country of Residence Ownership Interest

2008 2007 $’000 $’000 Gabriel Meffre SAS (non-

traded) Wine Producer France 37.25% 37.25% Vinoceros Limited (non-

traded) Wine Distributor United Kingdom 30.43% 30.43% CONSOLIDATED 2008 2007 $’000 $’000 Initial investment in associate 5,578 24,205 Investments in associates sold during the year - (17,030) Costs capitalised to existing investments - 36 Cumulative share of profits from ordinary activities after related

income tax 194 (98) Cumulative amount attributable to foreign currency translation

reserve 392 - Revaluation Increments taken to the Asset Revaluation Reserve - - Write-down of investments in associates (313) (1,535) 5,851 5,578 Summary of the performance and financial position of associate The profits, assets and liabilities of the associates are: Profit/(loss) from ordinary activities after related income tax

expense 529 9,493 Assets 61,634 182,854 Liabilities (43,634) (143,879) 29. EVENTS OCCURING AFTER REPORTING DATE

In the opinion of Berren there have been no significant events other than those disclosed elsewhere in this financial report impacting on the financial statements of the Wine Fund up to the date of the signing of the Directors’ Report.

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30. CONTINGENT LIABILITIES There are no proceedings which have been brought or intervened in on behalf of the Wine Fund or

Berren, nor has any person sought leave to bring proceedings under section 237 of the Corporations Act 2001.

31. COMPARATIVE FIGURES

Comparative figures have been reclassified upon adopting the liquidity basis of presentation for balance sheet as per paragraph 38 of AASB 101 Presentation of Financial Statements.

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DIRECTORS’ DECLARATION

(1) In the opinion of the Directors of Berren Asset Management Limited, the Responsible Entity of the International Wine Investment Fund:

(a) the financial statements and notes set out on pages 26 to 52 are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Wine Fund as economic entity and the Wine

Fund as parent entity’s financial position as at 30 June 2008 and of their performance for the year ended on that date;

(ii) complying with Australian Accounting Standards and Corporations Regulations

2001 and International Wine Investment Fund’s Constitution; and

(b) there are reasonable grounds to believe that the Wine Fund will be able to pay its debts as and when they become due and payable.

(2) This declaration has been made after receiving the declarations required to be made to Directors in accordance with section 295A of the Corporations Act 2001 for the financial period ending 30 June 2008. This declaration is made in accordance with a resolution of the Directors.

M. J. Terlet, AO J. Caddy Chairman Director Dated this 28 day of August 2008

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Corporate Directory

Responsible Entity Berren Asset Management Limited ABN 86 008 273 470

Registered Office Level 29, Australia Square 264 George Street Sydney, NSW 2000 PO Box H 195, Australia Square, NSW 1215 T 1800 638 790 F +612 9223 0404 E [email protected] W www.iwif.com.au

Managed Investment Scheme The International Wine Investment Fund ARSN 093 223 253

Controlled Entities International Wine Investment Fund Pty Limited ABN 66 056 436 812

International Wine Investment Fund (Victoria) Pty Limited ABN 80 124 755 504

Board of Directors Mike Terlet AO (Chairman) Jim Caddy William Conn John Hart

Company Secretary Amal Wahab Graeme MacLaren

Investment Manager Geoffrey Wilson, Wilson Asset Management

Accountants Paul Lenton, Nexia Court Sarah Bassford, Nexia Court

Bankers Bank SA (A division of St George Limited) GPO Box 399, Adelaide SA 5001 National Australia Bank Limited 22 King William Street, Adelaide SA 5000

Auditors Moore Stephens Level 7, 20 Hunter Street, Sydney NSW 2000

Custodian Australian Executor Trustees (SA) Limited Level 22, 207 Kent Street, Sydney NSW 2000

Registry Computershare Investor Services Pty Limited Level 5, 115 Grenfell Street, Adelaide SA 5000 GPO Box 1903, Adelaide, SA 5001 T 1300 556 161 (Adelaide) 1300 850 505 (National) +61 (0)3 9415 4999 (International) F +61 (8)8 8236 2305 W www.computershare.com.au

Stock Exchange Listing The International Wine Investment Fund units are listed on the Australian Stock Exchange

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Documents

IWIF - ASX · Fund (“the Wine Fund”) for the year ended 30 June 2008. This year the Wine Fund incurred a Loss of $2.860 million against a Profit of $6.873 million in 2007. Despite