TERRAVITAE Terra Vitae Vineyards Ltd

Chairman's report

Financial

On behalf of your Board I am pleased to report a strong result for Seddon Vineyards for the year ended June 30. On Operating Revenue of $1,330,111 the company achieved an operating surplus of $435,722 and a net pre-tax profit of $2,461,915, which includes the increase in the value of the vines of $2,026,193 as per the valuation conducted as at 31 December 2005. An interim dividend of 4.154 cents per share was paid in June 2006 based on the shareholding at that date. A final dividend of 1.6 cents per share was declared on 18 August 2006 and will be paid on 11th December 2006 based on the share register as at 5:00pm on Tuesday 5th December 2006.

Whilst Terra Vitae Vineyards Limited’s result does not form part of this Annual Report, I felt it appropriate to summarise that company’s result here and have also included details of the performance and position of that company at the back of the report. On Operating Revenue of $2,637,129 the company achieved an operating surplus of $718,039 and a net pre-tax profit of $515,769 after including the decrease in the value of the vines of $202,270 as per the valuation conducted as at 31 December 2005.

The Merger

Following two years of research and consultation by the two respective boards, Seddon Vineyards and Terra Vitae Vineyards amalgamated on 30 June this year. There was huge shareholder support for the merger and an overwhelming vote in favour of it at the special meeting held on 30 June 2006. I am pleased to report that your new Board has met twice and is already looking at strategic options to grow the value of your company. At this point I would like to thank the immediate past board members for the huge contribution they made to Terra Vitae Vineyards and Seddon Vineyards. Thank you Ian Montgomerie, Graham Beattie, Avon Carpenter and David Jenkin, your valuable governance has been a large part of the success of the two companies.

The Vineyards

A summary of the performance of the four vineyards is below:

Yield Crop Value

Seddon 558 $1,325,986

Taylors Pass 767 $1,781,389

Keltern 287 $ 520,127

Twyford Gravels 120 $ 284,438

Totals 1732 $3,911,940

The four vineyards have an ongoing programme of continual maintenance and a top grafting programme to introduce better paying and yielding varieties has commenced. Seddon has completed its replanting programme and can fully crop from 2009.

Share Trading

The company continues to have its shares listed and traded through “Unlisted” which is a very accessible and economical unregistered securities trading facility. We continue to get favourable comments from shareholders about the trading site.

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Page 5

Independent Advice

The board continues to use Mark Allen as our indepedent consultant for the four vineyards. His contribution is of high value to your board and company, and we thank Mark for this input.

Villa Maria Staff

Our thanks to our dedicated Vineyard Managers and also to Alastair Mailing and Emma Taylor and all the Villa staff who advise our team and managers. Thank you also George Fistonich for your contribution and congratulations to you for another year of accolades both personally and with the Villa label.

The New Zealand and International Wine Market

The demand for Sauvignon Blanc is still growing and is by far the mainstay of New Zealand wine exports. Pinot Noir is the next most popular variety, followed by Pinot Gris. The international demand for Pinot Gris is outstripping the available supply, reinforcing our recent decision to to graft the Keltern Merlot with Pinot Gris late last year. We are looking forward to a small initial crop of the Pinot Gris in 2007.

Conclusion

Finally, thank you to our shareholders for your support, especially as we worked through the merger process. We look forward to seeing you at our Annual Meeting on 21 November and/or at the field days planned for the Hawkes Bay on 3 March 2007.

A special thank you to my fellow directors for your support and diligence during the last twelve months and as we worked through the merger process. Thank you also Alan O’Sullivan, our Secretary/Manager for all the extra effort your have put in, in the last 12 months in co-coordinating the merger process and working through the huge process in putting together the two companies. The smooth transition is a result of your expertise.

Joe Ferraby

Chairman,

Seddon Vineyards of Marlborough Limited

v2 Report - Additional Information Supplement TERRAVITAE Terra Vitae Vineyards Ltd	IPOs and Investment Opportunities
Press releases Terra Vitae Shareholders vote in favour of Marlborough Property purchase At a well attended special meeting of shareholders on 24 July 2007, the following resolution was passed by 90.3% of voting shareholders. “That the proposal by the Company to purchase and develop the property at Higgins Road, Seddon, comprising 184.7400 hectares being Lot 2 on Deposited Plan 12125, for a total estimated cost of $25,200,000 (including development costs, capitalised interest and working capital requirement), be and is hereby approved.” 368 shareholders representing 22.5 million shares (of the 40 million shares on issue) voted on the proposal. Details of the proposal are available to be viewed on the company’s web site www.terravitae.co.nz Purchase of property in Marlborough On 9 July 2007 the company advised shareholders of a proposal to purchase a 185ha property adjacent to its Seddon vineyard. Details of this proposal are available on the company’s web site www.terravitae.co.nz The Company advises that one of its directors, Andrew Couch, does not support the proposed purchase and development of the Hammond property on which shareholders are being asked to vote at the Special Meeting on 24 July 2007. Mr Couch’s views on this issue are based on further financial analysis done by him. This analysis was made available to the Board, but the other four members of the Board remain strongly in support of the proposed purchase and development and continue to recommend it to shareholders."
Chairman's report Financial On behalf of your Board I am pleased to report a strong result for Seddon Vineyards for the year ended June 30. On Operating Revenue of $1,330,111 the company achieved an operating surplus of $435,722 and a net pre-tax profit of $2,461,915, which includes the increase in the value of the vines of $2,026,193 as per the valuation conducted as at 31 December 2005. An interim dividend of 4.154 cents per share was paid in June 2006 based on the shareholding at that date. A final dividend of 1.6 cents per share was declared on 18 August 2006 and will be paid on 11th December 2006 based on the share register as at 5:00pm on Tuesday 5th December 2006. Whilst Terra Vitae Vineyards Limited’s result does not form part of this Annual Report, I felt it appropriate to summarise that company’s result here and have also included details of the performance and position of that company at the back of the report. On Operating Revenue of $2,637,129 the company achieved an operating surplus of $718,039 and a net pre-tax profit of $515,769 after including the decrease in the value of the vines of $202,270 as per the valuation conducted as at 31 December 2005. The Merger Following two years of research and consultation by the two respective boards, Seddon Vineyards and Terra Vitae Vineyards amalgamated on 30 June this year. There was huge shareholder support for the merger and an overwhelming vote in favour of it at the special meeting held on 30 June 2006. I am pleased to report that your new Board has met twice and is already looking at strategic options to grow the value of your company. At this point I would like to thank the immediate past board members for the huge contribution they made to Terra Vitae Vineyards and Seddon Vineyards. Thank you Ian Montgomerie, Graham Beattie, Avon Carpenter and David Jenkin, your valuable governance has been a large part of the success of the two companies. The Vineyards A summary of the performance of the four vineyards is below: Yield Crop Value Seddon 558 $1,325,986 Taylors Pass 767 $1,781,389 Keltern 287 $ 520,127 Twyford Gravels 120 $ 284,438 Totals 1732 $3,911,940 The four vineyards have an ongoing programme of continual maintenance and a top grafting programme to introduce better paying and yielding varieties has commenced. Seddon has completed its replanting programme and can fully crop from 2009. Share Trading The company continues to have its shares listed and traded through “Unlisted” which is a very accessible and economical unregistered securities trading facility. We continue to get favourable comments from shareholders about the trading site. __________________________________________________________________________________ Page 5 Independent Advice The board continues to use Mark Allen as our indepedent consultant for the four vineyards. His contribution is of high value to your board and company, and we thank Mark for this input. Villa Maria Staff Our thanks to our dedicated Vineyard Managers and also to Alastair Mailing and Emma Taylor and all the Villa staff who advise our team and managers. Thank you also George Fistonich for your contribution and congratulations to you for another year of accolades both personally and with the Villa label. The New Zealand and International Wine Market The demand for Sauvignon Blanc is still growing and is by far the mainstay of New Zealand wine exports. Pinot Noir is the next most popular variety, followed by Pinot Gris. The international demand for Pinot Gris is outstripping the available supply, reinforcing our recent decision to to graft the Keltern Merlot with Pinot Gris late last year. We are looking forward to a small initial crop of the Pinot Gris in 2007. Conclusion Finally, thank you to our shareholders for your support, especially as we worked through the merger process. We look forward to seeing you at our Annual Meeting on 21 November and/or at the field days planned for the Hawkes Bay on 3 March 2007. A special thank you to my fellow directors for your support and diligence during the last twelve months and as we worked through the merger process. Thank you also Alan O’Sullivan, our Secretary/Manager for all the extra effort your have put in, in the last 12 months in co-coordinating the merger process and working through the huge process in putting together the two companies. The smooth transition is a result of your expertise. Joe Ferraby Chairman, Seddon Vineyards of Marlborough Limited
Director's Report	Investment Centre
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