2020 Elders
Annual Report
Elders Limited ABN 34 004 336 636
Contents
1
Contents
From the Chair
CEO’s Report
Year in Brief
Elders and our community
Operating and Financial Review
Material Business Risks
Review of Operations
TEI and the environment
Sustainability Report
Elders, in your corner
Board of Directors
Executive Management
Directors’ Report
Directors’ Report – Remuneration Report
AuctionsPlus success in FY20
Annual Financial Report
Shareholder Information
Company Directory
2
4
6
8
10
20
22
31
32
74
76
78
82
88
108
110
170
171
2
From the Chair
Sustainability
In FY19’s report, I committed Elders to matching
the best governance and sustainability standards
practised by the top Australian listed businesses.
Our ambition is to have in place “governance
practices, tailored to Elders’ specific needs and
circumstances, equal to those demonstrated
by Australia’s very best companies”.
I’m pleased we have taken initial steps to
achieving this objective. Within this document we
have published Elders’ first Sustainability Report,
a transparent and accountable measure of Elders’
actions and performance on material topics during
the year. The report addresses a range of important
topics from community impact and investment to
climate change, health and safety, animal welfare
and corporate governance.
The results show our commitment to farmers
and communities, keeping people safe and
investing in the industry’s future. It also shows
how we work with farmers to enhance soil health,
water use efficiency, and increasingly, help farmers
manage their business through changes in the
climate. It also details our policy on how we treat
animals, both directly as a business and along
our supply chain.
This is just the start and we need and intend
to do more.
Financial results
In FY20 Elders achieved its strongest result
in a decade, delivering underlying after-tax
profit of $107.7 million. Underlying Earnings
Before Interest and Tax (EBIT) was $120.6 million,
which significantly exceeded the results of FY19.
We are particularly proud of these results given
they were achieved despite ongoing drought
and bushfires in the first half of the year and
without any government assistance in the form
of JobKeeper or other COVID-19 support measures.
The Board has declared a final dividend of 13 cents
per ordinary share, taking dividends for the year to
22 cents fully franked. This represents an increase
of 4 cents (22%) on the 18 cents total dividend
paid in FY19.
People and safety
Our number one priority at Elders is safety.
This has been even more vital in a year filled
with health and safety challenges.
Managing Director Mark Allison addresses this
in more detail, but as Chair I must reiterate the
Board’s strong support of organisational safety
initiatives such as the Elders’ Safety 7 Plan, our
new safety and risk reporting tools, and the way
we have committed to ensuring our operations
and workplaces remain COVID-safe.
More broadly, Elders has supported staff and
customers’ health through an array of national
programs and sponsorships across the country.
Agriculture faces unique environmental, climatic,
economic and social challenges and it’s important
that Elders leads the way with both grassroots
activities and formalised national partnerships
with charities, community groups, industry
bodies and non-governmental organisations.
Agriculture is essential.
The indispensable
importance of Australia’s
farmers, the food and
fibre they produce and
the broader Agribusiness
sector to Australia
has been profoundly
reinforced in FY20.
The sector has withstood remarkable
obstacles in a year full of volatility,
from extreme weather and natural
disasters to the COVID-19 pandemic.
Yet throughout, agriculture has
emerged more resilient and continued
to perform strongly. As has Elders.
Elders2020 Annual Report From the Chair
3
Governance and culture
Sustainability, along with all our actions, is
underpinned by our values, and commitment
to good governance and accountability.
The One Elders Values set expectations for
everyone at Elders. Behaviour guided by these
values permeates Elders’ culture, which in turn
contributes to our sustainable success and growth.
Our corporate governance framework seeks to
inform and guide adherence to our values and
our Board maintains regular engagement with
senior management, to ensure our values are
aligned with what we do.
Our governance commitment is documented
in our Corporate Governance Statement. We
are committed to compliance, transparency,
disclosure, and acting lawfully, ethically and
responsibly, and living our values every day.
Looking forward
The next period for Elders will be guided
by our third Eight Point Plan which takes us
through to 2023.
Acknowledgements
First and foremost, on behalf of the Board, thank
you to our 2,100 plus people who continue to go
above and beyond for our clients and our company.
You have adapted admirably to COVID-19, finding
new ways of working and keeping each other safe.
And in times of crisis you have been there for your
clients and your communities. This was evident
during the summer of 2019/20 bushfires where
Elders people fought fires, mended fences, fed
livestock and provided a shoulder to lean on for
so many.
I would also like to thank my fellow Directors
for their support and input. Welcome also to
Matthew Quinn who joined in February 2020.
Matthew brings a wealth of experience from
other Non-Executive Director positions as well
as his time as CEO of Stockland and is already
adding tremendous value to the Board on a
number of fronts.
And of course, thank you to our shareholders
for your continued support.
As with previous iterations, the Eight Point
Plan outlines how we will achieve our ambition
of delivering consistent and compelling
shareholder returns through the agricultural
cycles. In this third plan we have also introduced
two new stated ambitions – to be the most trusted
agribusiness brand in rural and regional Australia,
and to deliver authentic and industry leading
sustainability outcomes. The strategy will position
us to achieve our goals, and I have no doubt that
the Elders team will again deliver admirably.
Your Chair,
Ian Wilton
Chair
4
CEO’s Report
Elders is built on trust.
We are central to the
success of agricultural
communities across
Australia and have
been so since 1839.
We are proud of this heritage, and our role in
developing Australian agriculture. The sector is a
resilient, consistent and under-recognised driver
of Australian jobs and growth – and we are proud
to contribute to its success.
FY20 has been successful for our businesses –
despite its challenges. We have faced drought,
flooding, catastrophic bushfires and the
impact of the COVID-19 pandemic.
Elders continues to prosper because of our solid
business foundations, strict financial discipline,
and a commitment to keeping the safety and
prosperity of clients, communities and staff across
Australia always at the forefront, and importantly
we are favourably positioned for future growth.
Financial performance
Elders has again achieved strong financial
performance despite the unprecedented
challenges we have faced. We’ve continued
our commitment to making good money in
bad seasons and great money in good.
In FY20 we achieved an underlying after-tax
profit of $107.7 million, an increase of 69% on
FY19. Underlying Earnings Before Interest and
Tax (EBIT) was $120.6 million, a 64% increase on
last year. The result highlights the resilience of our
business model and represents outperformance
against the Eight Point Plan goal of 5-10% EBIT
growth through the agricultural cycles.
At 18.7% Underlying Return On Capital (ROC) we
fell just shy of the 20% target we set ourselves.
The result was driven by gross margin growth
across all state geographies and products,
combined with continued cost control and
capital allocation discipline. The performance
of our Rural Products division was a highlight.
The acquisition and integration of leading rural
supplies wholesaler Australian Independent
Rural Retailers (AIRR) added $44.0 million
in wholesale gross margin, well in excess of
acquisition business case projections. We
also made excellent progress on our backward
integration strategy, selling more of our own
branded products at higher margins.
Safety and our response
to bushfires and COVID-19
Safety is embedded in everything we do. It remains
central to our operations and a priority for our staff,
from the boardroom to the saleyard.
Our Safety 7 plan outlines this commitment to care
for our people and the those who we interact with,
each day. This year we reintroduced our successful
Stand Up Speak Up safety video series to the
business, a new hazard and incident reporting tool
for more accurate and efficient reporting, and new
capital equipment to ensure the safety of our team
at Killara Feedlot.
In FY20 we reported two Lost Time Injuries (LTIs)
which represents a significant improvement on the
nine LTIs recorded in FY19. Nonetheless, we strive
for zero workplace injuries.
Elders was fortunate that none of its branches
were affected in the 2019/20 bushfires. Our
people remained safe but were nonetheless
impacted through losses to personal properties
and the huge task of supporting the communities
around them to rebuild. Elders donated $100,000
to the Foundation for Rural and Regional Renewal
and offered financial support and mental health
resources to clients. To this day, our people in
fire-affected areas are involved in supporting the
rebuild and managing the ongoing implications
of these events.
The COVID-19 pandemic heightened our focus
on safety even further. Elders acted early and
decisively, forming a dedicated COVID-19
Response Committee that oversaw a number
of measures including establishing new ways
of working as well as contactless service
arrangements in our branches and on farm.
From an operational perspective, COVID-19
created supply chain disruption and border
crossing challenges for us to navigate. I commend
our people for the resilience and adaptability they
have demonstrated in maintaining our commitment
to our clients through COVID-19 and delivering an
essential service to Australia’s agriculture sector.
Elders2020 Annual Report CEO's Report
5
Eight Point Plan
Elders’ Eight Point Plans have underpinned our
strategy since 2014. These map our competitive
advantages as a pure play agribusiness and
anchor our future growth and development
on these advantages.
Sustainability
An ambition and key strategic priority in our new
Eight Point Plan is developing and delivering an
authentic and industry leading sustainability
program across health and safety, community,
environment and governance.
In FY20, we developed our third Eight Point Plan
to take us to 2023, outlining our ambitions for
growth and success for the next three years. As in
previous years, we are focused on achieving 5-10%
growth in EBIT and Earnings Per Share through the
agricultural cycles at a compelling ROC of 15%.
We believe that an authentic and industry
leading approach to sustainability will drive
profitability and build a better business for
our customers, our people, regional and rural
Australia and other stakeholders to associate
with, invest in and work in.
In closing
It has been a tumultuous year, but we
have remained focused on what is
important – the heath and prosperity
of our people, the communities we
serve and our shareholders. We are
proud of where we stand as a business
– all underpinned by strong ambition
to drive us to 2023, and beyond.
Elders continues to prosper because
of solid business foundations, strict
financial discipline, and a commitment
to keeping the safety and prosperity of
clients, communities and staff across
Australia always at the forefront.
To achieve these ambitions, Elders will pursue
a range of organic and inorganic growth
initiatives across our various business units
and geographies. A key driver of growth will be
capturing more gross margin in Rural Products
through our continued backward integration
strategy which sees us sell more of our own
brand products obtained through our Titan AG
and AIRR acquisitions.
A key enabler that is new to our Eight Point Plan
is the Systems Modernisation Program. We have
commenced on a multi-year program to upgrade
Elders’ core operating systems and applications.
We will be moving to best of breed new solutions
that will help us improve customer experience,
drive process and administrative efficiency
and more easily accommodate new business
acquisitions.
This program is underpinned by the following key
sustainability principles, which are integrated into
our way of doing business:
⋅ we provide our customers and clients with
the goods and services they need
⋅ we support our people and the industries
and communities in which we operate
⋅ we do our part to look after the environment
and the animals in our care
Mark C Allison
Managing Director and CEO
⋅ we operate ethically and to the highest standard
This annual report includes our first Sustainability
Report. It demonstrates our commitments to
ensure our customers, people, communities,
environment, animals, and Elders itself, are
sustainable for decades to come.
I look forward to delivering on this in the
years ahead.
6
Year in Brief
Year ended 30 September
Continuing sales revenue
Underlying EBITDA
Underlying EBIT
Underlying finance costs
Reported profit after tax
Underlying profit after tax
Net debt
Shareholders’ equity
Operating cash flow
Reported earnings per share (basic)
Reported earnings per share (diluted)
Underlying earnings per share (basic)
Underlying earnings per share (diluted)
Interim dividend (fully franked)
Final dividend declared (fully franked)
Key Ratios
EBIT margin (EBIT to sales)
Return on capital1
Leverage (average net debt to underlying EBITDA)
Interest cover (EBITDA to net interest)
Gearing (average net debt to closing equity)
Key Share Data
ELD share price (30 September)
Market capitalisation
Number of ordinary shareholders
Ordinary shares on issue
1 Capital employed includes right of use assets
and lease liabilities
$m
$m
$m
$m
$m
$m
$m
$m
$m
cents
cents
cents
cents
cents
cents
%
%
times
times
%
$
$m
FY20
Post-AASB 16
FY20
Pre-AASB 16
FY19
Reported
2,092.6
2,092.6
1,626.0
162.4
120.6
9.3
122.9
107.7
237.5
672.3
127.9
119.4
6.8
124.2
109.0
134.1
673.6
78.8
73.7
7.7
68.9
63.6
94.3
492.9
142.3
110.5
11.2
79.8
79.3
69.9
69.4
9.0
13.0
5.8
18.9
2.0
17.8
48.2
80.6
80.1
70.7
70.3
9.0
13.0
5.7
18.7
1.6
19.5
30.4
57.0
56.1
52.6
51.8
9.0
9.0
4.5
18.2
2.4
11.6
38.9
10.85
1,689.9
12,826
10.85
1,689.9
12,826
6.32
895.2
12,325
155,753,725
155,753,725
141,650,621
Elders2020 Annual Report Year in Brief
7
Safety Performance
Two lost time injuries (LTI), compared to nine last year, with target of zero
LTI frequency rate at 0.5, compared to 2.2 last year
Continued emphasis on employee and community safety, health and wellbeing in COVID-19 environment
A COVID-19 Response Committee was formed in March with executive and specialist management
representation to guide the business in effectively and safely responding to the impacts caused by
the global pandemic
Operational Performance
62% underlying EBIT growth in the past 12 months
20.2% ROC Elders Rural Services, 18.7% ROC Elders post-AIRR acquisition
Underlying EPS of 70.7 cents, up 35% from 52.6 cents
Fully franked interim dividend of 9.0¢ per share
Fully franked final dividend of 13.0¢ per share declared
Key Relationships
Implemented hardship relief to clients impacted by bushfires
Worked closely with industry and clients to ensure continuity of operations and agricultural supply chains
during COVID-19
Identified as Australia’s most trusted Agribusiness brand
Positive progress of diversity plans
Established a Sustainability function to monitor, report and improve our impact within our community
Continued engagement with Rural RDCs, government and tertiary institutions to enhance our agricultural
research, development and extension initiatives through the Thomas Elder Institute
Provided clients with greater access to market intelligence through the establishment of Thomas Elder Markets
Efficiency and Growth
Acquired 16 new AIRR sites as well as six other stand-alone acquisitions
Continued integration of AIRR to deliver EBIT growth and acquisition synergies
Maintained growth of Titan AG business in key geographical areas to deliver on backward integration strategy
Livestock in Transit delivered well ahead of acquisition business case due to higher opt-ins and continued
claims management
Established new <$100,000 livestock funding offering to fill a gap in the market and complement the existing
StockCo offering
Continued to grow our footprint through acquisition of Rural Products and Agency Services businesses
and personnel which, in part, has benefited from industry consolidation
8
Elders and our
community
In FY20, Elders
contributed over
$1.51 million to
sponsorships, charities
and community
organisations. While
we are proud of this
figure, it doesn’t touch
on, or compare to, the
countless hours in which
our branch staff provided
in-kind support to local
community causes.
The clearest example of this followed the
devastating bushfires of summer 2019/2020,
which burnt almost 19 million hectares, ravaging
the communities we serve.
Elders immediately donated $100,000 to the
Foundation for Rural and Regional Renewal, offered
staff paid volunteer leave, and matched donations
dollar-for-dollar.
But the real work – the dirty and heartbreaking
work – was on the ground in the immediate
response and the ongoing rebuild.
Elders Area Manager Colin Lane is responsible
for Gippsland, Victoria, and witnessed the
devastation of the fires, and also the incredible
resilience of his community.
“You have an emotional connection with these
people. You see them hurting and struggling and
you want to help,” Colin says.
“It’s a very emotional and overwhelming time,
but I’ve never seen so much generosity.”
Once the fires had eased throughout Gippsland,
the team at Elders Bairnsdale moved to provide
immediate fodder relief and started working with
BlazeAid to supply, deliver, build and provide
advice on fencing.
They arranged the free loan and running of two
new tractors and set up fencing training for helpers
and volunteers. They also began raising over
$25,000 of relief funds for distressed clients.
The Elders Bairnsdale team spent countless days
writing grant applications to minimise the burden
of paperwork on clients already dealing with the
trauma of fighting fires or caring for properties
and stock.
Over the NSW border, the Tumut, Gundagai and
Adelong branches were tending to their own
communities. “All the local Elders staff were out
there, helping one way or another, delivering
fodder, urgent supplies and opening the branch
no matter when it was needed,” says Hannah
Speers, an Operations Specialist from Elders’
Adelong branch.
“We had support from Elders people who turned
out from Wagga Wagga, Cootamundra, St Arnaud
and even as far away as Hamilton and Ballarat.”
Hannah was instrumental in the setup of a
BlazeAid camp, which trained and fed up to
100 volunteers a night.
Hannah also helped instigate a donation
scheme with the Tumut Community Foundation
in conjunction with Bendigo Bank to benefit
the Dunns Road bushfire victims. Donations
presented to Elders were redirected to this fund
and gift vouchers handed out to members of the
community affected by the bushfire to be used
in local businesses.
Used in the town, the vouchers stimulated local
business while helping those affected. The Tumut
community raised over $200,000 for the cause
and staff from nearby branches pitched in to help.
Although hard, Hannah says, these times prove
the strength of rural communities.
“The bushfires have shown us the true meaning
and power of the rural network as a whole,”
she says.
“Everyone is in it together with no ulterior motives
other than to help one another get through a
difficult time and to fight together.”
One of Hannah’s Adelong colleagues, David
Crooks, embodies this ethos, fighting fires for four
weeks during the initial crisis, and then continuing
to help, seven days a week for months, to assist
clients rebuild.
David describes the trauma of seeing his
community in so much pain and watching friends
and clients experience extensive losses.
“We’ve been holding the hands of grown men
crying after having to shoot their livestock,”
David says.
“We would have 130 farmers who have lost
pretty much everything, needing to talk and
needing some support. It became our job to
show compassion at the most traumatic time.”
But such pain forges strength.
“There are still scars but it has really created an
incredible bond with clients because other people
can’t understand what you’ve been through
together,” David says.
Elders2020 Annual Report Elders and our community
9
“Our clients are our friends. Their emotional
and mental wellbeing is our priority.”
“This year has really cemented our shop, and
the people in our shop, as being integral to the
community.”
This sentiment is echoed in north-east
Victoria, where nearly half-a-million hectares
of forestry, farmland and private estates were
destroyed. Elders Albury Branch Manager
Tony Killalea says the sheer magnitude of the
fires required a comprehensive community
effort to get people back on their feet, but that
everyone banded together.
“In the end, this tragedy has enhanced
friendships and relationships,” Tony says.
“They (Elders staff) are doing it for their
friends, not just their clients.”
In the country’s south, Kangaroo Island has
been affected in a similar way, with more than
a third of the island destroyed.
Branch manager Marty Kay says it has been
all-hands-on-deck to rebuild, welcoming
Elders’ livestock agents from across South
Australia to the island to assist with the
ongoing job of fencing.
“Our biggest focus has been to help people
affected get back into production, mainly for
their mental health, so they’ve got a job to
focus on each day and a structure that can
begin to restore some sense of normality to
their lives,” Marty says.
For Elders as a business, and our people on
the ground, the focus now is dealing with the
aftermath of such trauma with mental health
support and counselling for post-traumatic
stress. But the feeling is one of optimism –
as it often is in rural communities – and a
keenness to get on with the job of supporting
one another to dust off and get back up.
It’s a very emotional and
overwhelming time, but
I’ve never seen so much
generosity.
Colin Lane
Area Manager Gippsland, Victoria
Operating and Financial Review
2020 12
Operating
and Financial
Review1
Elders is focused on
creating value for all its
stakeholders in Australia
and internationally. We
achieve this through
approximately 2,100
employees across
Australia and in China.
1 The Operating and Financial Review is presented
in Australian dollars and is rounded in millions,
unless otherwise stated. Rounding differences
may be present due to individual amounts
rounded to the nearest thousand dollars in the
Financial Report.
⋅ Real Estate Services sales have been slightly
impacted in parts of the country where
COVID-19 has impinged on the ability to
conduct inspections and auctions
⋅ none of these interruptions has had a material
impact on Elders’ financial performance for the
year ended 30 September 2020
⋅ Elders has recognised pandemic risk on
its risk register and has implemented controls
in the business to mitigate COVID-19 impacts.
Elders proactively formed a COVID-19 Response
Committee and held regular meetings to
monitor, track and report business and financial
reporting matters related to COVID-19
⋅ with Elders’ critical role in agriculture and rural
and regional Australia, the decision was made
not to stand down or reduce employment due
to COVID-19
⋅ Elders did not access any government support
such as JobKeeper during the year ended 30
September 2020
During the year we acquired wholesale business,
Australian Independent Rural Retailers (AIRR)
based in Shepparton, Victoria. AIRR is supported
by a network of eight warehouses to supply
independent retail stores throughout Australia.
In Australia, Elders works closely with primary
producers to provide products, marketing options
and specialist technical advice across rural, agency
and financial product and service categories.
Elders is a leading Australian rural and residential
property agency and management network.
This network includes both company owned and
franchise offices operating throughout Australia in
both major population centres and regional areas.
Our feed and processing business operates a top-
tier beef cattle feedlot in New South Wales and a
premium meat distribution model in China.
On 11 March 2020, the World Health Organisation
officially declared COVID-19 a global pandemic.
Elders has considered the impact of COVID-19
when preparing the consolidated financial
statements and related note disclosures and
continues to monitor the impact of the COVID-19
outbreak on demand for Elders’ products and
services, customers and supply chains:
⋅ all farm inputs supply chains in which Elders
participates are, at present, operating normally
⋅ livestock supply chains experienced a
short-term disruption of live export to
Vietnam and Indonesia
⋅ wool markets remain soft due to limited
Chinese buyer activity and although not
material, Elders Fine Foods was significantly
impacted by COVID-19 because of shutdown
to restaurants and hotels in China
Elders2020 Annual Report Operating and Financial Review
13
Profit and Loss
This section has been prepared to demonstrate the adoption of AASB 16 Leases pre and post-implementation to enable a more meaningful
comparison to the prior year. Unless otherwise stated, numbers will be presented pre-AASB 16.
Profit: Reported and Underlying
$ million
Sales
Branch Network
Wholesale Products
Feed and Processing Services
Corporate Services and Other Costs
Underlying EBIT
Finance Costs
Fair Value Adjustments on Interest Rate Swaps
Underlying profit before tax
Tax
Non-Controlling Interests
Underlying profit to shareholders
Items excluded from underlying profit
Reported profit after tax to shareholders
Underlying EBITDA
Underlying earning per share (cents)
FY20
Post-AASB 16
FY20
Adjustments
FY20
Pre-AASB 16
FY19
Change
Pre-AASB 16
2,092.6
149.1
22.0
7.7
(58.2)
120.6
(9.1)
(0.2)
111.3
(1.3)
(2.3)
107.7
15.3
122.9
162.4
69.9
-
(0.1)
0.1
-
1.3
1.2
(2.5)
-
(1.3)
-
-
(1.3)
-
(1.3)
34.5
(0.8)
2,092.6
149.2
1,626.0
109.8
21.9
7.7
(59.5)
119.4
(6.6)
(0.2)
112.6
(1.3)
(2.3)
109.0
15.3
124.2
127.9
70.7
-
7.6
(43.7)
73.7
(6.8)
(0.9)
65.9
(0.5)
(1.8)
63.6
5.3
68.9
78.8
52.6
466.6
39.4
21.9
0.1
(15.8)
45.7
0.2
0.7
46.7
(0.8)
(0.5)
45.4
10.0
55.3
49.1
18.2
The statutory result included several items that are unrelated to operating financial results. Measurement and analysis of financial results excluding
these items is considered to give a meaningful representation of like-for-like performance from ongoing operations (“underlying profit”). Underlying
profit is a non-IFRS measure and is not audited or reviewed.
Items excluded from underlying profit are:
$ million
FY20 Commentary
Acquisition/divestment costs
(3.3) Primarily relates to costs associated with the acquisition of AIRR
Fair value adjustments on foreign exchange hedges
(2.1) Non-cash losses recognised on the revaluation of FX hedges
One-off asset costs
(1.1) Costs associated with the Killara Feedlot silo collapse for which proceeds
were recognised in the prior year
Other adjustments to equity accounted investments
(0.8) Adjustment of equity accounted investment in relation to prior year adoption of AASB 15
Tax asset adjustments
22.5 Recognition of tax losses
15.3
14
Underlying Profit by Product
Change in product margin ($million)
P R O D U C T M A R G I N
15.0
3.9
3.7
0.5
(8.8)
(39.8)
44.0
(0.4)
109.0
27.3
63.6
FY19
Underlying
Profit
Retail
Products
Wholesale
Products
Agency
Services
Real Estate
Services
Financial
Services
Feed and
Processing
Services
Branch
Incentive
Costs
Interest,
tax and
NCI
FY20
Underlying
Profit
Product margin by year ($million)
FY20
FY19
179.9
152.6
131.1
116.1
44.0
0.0
34.3 38.2
33.4
37.1
15.0 15.5
0.6 (8.2)
Retail
Products
Wholesale
Products
Agency
Services
Real Estate
Services
Financial
Services
Feed and
Processing
Services
Branch
Incentive
Key movements in profit by product are:
⋅ Retail Products benefitted from a strong winter cropping season and continued backward integration,
which offset poor summer crop and dry conditions in the first half
⋅ Addition of Wholesale Products through acquisition of AIRR contributing $44.0 million in gross margin
⋅ Agency Services upside mostly in Livestock, primarily driven by high prices for both cattle and sheep
⋅ Real Estate Services favourable predominantly due to increased broadacre and residential turnover
⋅ Financial Services increase is due to the acquisition and growth of Livestock in Transit delivery
warranty products
⋅ Branch Incentive includes the accrual of the new program, which commenced this financial year
⋅ Costs up on last year due to acquisitions, geographical footprint growth and additional corporate
initiatives, offset by savings from new Rural Bank distribution agreement
Elders2020 Annual Report Operating and Financial Review
15
Underlying Profit by Geography
Change in underlying profit by geography ($million)
U N D E R LY I N G E B I T
14.4
7.6
10.4
(0.1)
(14.8)
(0.4)
109.0
21.9
6.4
63.6
FY19
Underlying
Profit
Wholesale
Products
Northern
Australia2
Southern
Australia
Central
Australia
Western
Australia
International
Corporate
and other
costs
Interest,
tax and
NCI
FY20
Underlying
Profit
Underlying profit by geography by year ($million)
FY20
FY19
32.6
26.2
21.9
54.3
39.9
39.2
31.2
28.8
23.6
0.0
(1.1)
(1.2)
Wholesale
Products
Northern
Australia2
Southern
Australia
Central
Australia
Western
Australia
International
Key movements in profit by geography are:
⋅ Addition of Wholesale Products through acquisition of AIRR contributing $21.9 million of EBIT,
outperforming expectations and delivering synergies
⋅ Northern Australian increase driven by higher cattle prices, with improved winter cropping conditions
leading to higher Retail Products sales
⋅ Southern Australia benefited from a strong Livestock business (high prices and cattle turnover), plus
increased Retail Products sales, and margin improvement from continued growth in our backward
integration initiative
⋅ Central Australia was favourable across most products and services, with higher Real Estate Services
turnover, Livestock profiting from higher prices and volumes, and improved Retail Products sales
⋅ Western Australia positive due to increased Retail Products sales, benefits of backward integration
through Titan AG and continued higher Livestock prices and volumes
⋅ Corporate and other costs increased due to investment in strategic areas and performance
incentive accruals
2 Northern Australia includes Killara Feedlot
16
Balance Sheet
This section has been prepared to demonstrate the adoption of AASB 16 Leases pre and post-implementation to enable a more meaningful
comparison to the prior year. Unless otherwise stated, numbers will be presented pre-AASB 16.
FY20
Post-AASB 16
FY20
Adjustments
FY20
Pre-AASB 16
$ million as at end
Inventory
Livestock
Trade and other receivables
Trade and other payables
Working capital
Property, plant and equipment
Right of use asset
Investments, including assets held for sale
Intangibles
Provisions
Capital (net operating assets)
Borrowings: working capital and other facilities
Lease liabilities
Cash and cash equivalents
Net debt
Tax assets
Shareholders' equity
Underlying return on capital3
Average capital (excluding brand name)
255.9
44.7
601.8
(524.3)
378.1
32.3
100.8
57.7
306.2
(68.2)
806.9
(183.7)
(104.5)
50.7
(237.5)
102.7
672.3
18.9%
637.0
-
-
-
2.4
2.4
(1.1)
100.8
-
-
-
102.1
1.1
(104.5)
-
(103.4)
-
(1.3)
(0.2)%
(1.2)
FY19
146.1
35.3
481.2
Change
Pre-AASB 16
109.8
9.4
120.6
255.9
44.7
601.8
(526.7)
(375.5)
(151.2)
375.7
33.4
-
57.7
306.2
(68.2)
704.8
(184.8)
-
50.7
(134.1)
102.7
673.6
18.7%
638.2
287.1
27.4
-
55.0
166.9
(46.8)
489.6
(101.6)
-
7.3
(94.3)
97.6
492.9
18.2%
405.7
88.6
6.0
-
2.7
139.3
(21.4)
215.2
(83.2)
-
43.4
(39.8)
5.1
180.7
0.5%
232.5
Total net operating assets have increased by $215.2 million, largely relating to the AIRR acquisition, which contributed $191.6 million of the uplift.
3 Capital employed includes right of use assets
and lease liabilities
Elders2020 Annual Report Operating and Financial Review
17
Working capital
$ million as at end
Retail Products
Wholesale Products
Agency Services
Real Estate Services
Financial Services
Feed and Processing Services
Other
Working capital (balance date)
Working capital (average)
FY20
243.5
64.1
28.5
1.0
21.0
51.3
(33.6)
375.7
402.4
FY19
191.4
-
48.3
0.9
30.5
48.8
(32.8)
287.1
288.6
Change
52.1
64.1
(19.8)
0.1
(9.5)
2.5
(0.8)
88.6
113.8
Working capital as at September 2020 is $375.7 million, $88.6 million higher than last year. Similarly, average working capital increased
by $113.8 million to $402.4 million for the year. This largely relates to:
⋅ increases in Retail Products working capital at balance date and average, predominantly due to debtors in line with higher sales activity
⋅ Wholesale Products working capital of $64.1 million (at balance date) and $60.6 million (on average), due to AIRR acquisition
⋅ despite higher Livestock turnover increasing Agency Services average working capital over the year, balance date is lower than last year
resulting from collection of Livestock debtors and favourable timing of year end creditors
Return on capital
Underlying return on capital
24.2%
18.2%
20.2%
18.7%
14.0%
3 Year Average
20.3%
FY18
FY19
FY20 ERS
FY20 AIRR
FY20
Elders Rural Services’ underlying ROC was 20.2% (up 2.0%). This was achieved by:
⋅ higher Retail Products return in part due to expansion of our backward integration initiative and improving stock turns
⋅ improved earnings in Agency Services and Real Estate Services on similar capital; while Feed and Processing Services has consistent earnings
on increased inventory
The Wholesale Products acquisition delivered a ROC of 14.0% (15.9% excluding amortisation of intangibles).
We achieved a 3-year average ROC of 20.3%, which is above our 20% target for the completion of the second Eight Point Plan period.
18
Net debt
Net debt
FY20
FY19
191.7
204.9
134.1
94.3
At balance date
YTD average
Key ratios
Leverage (average net debt to EBITDA)
Interest cover (EBITDA to net interest)
Gearing (average net debt to closing equity)
FY20
1.6
19.5
30.4%
FY19
2.4
11.6
38.9%
Change
(0.8)
7.9
(8.5%)
Net debt is up $39.8 million to $134.1 million at September 2020, mainly due to the acquisition of AIRR for which capital raising proceeds
were held at balance date last year.
Average net debt of $204.9 million was up slightly on last year, with increased working capital supporting growth in the business.
All our key ratios have improved on last year.
Undrawn facilities at balance date were $258.0 million with significant headroom in our banking covenants:
⋅ leverage is 0.1 times (covenant < 3.5 times4)
⋅ interest cover is 27.9 (covenant > 3.5 times)
⋅ net worth is $672.3 million (covenant > $250 million)
Intangibles
Intangibles is up on last year by $139.3 million to $306.2 million, mainly attributable to the AIRR acquisition of $129.7 million.
Provisions
Provisions increased by $21.4 million on last year due to higher employee entitlements, namely the new branch incentive program
and short-term performance incentives.
Shareholders’ equity
Shareholders’ equity increased by $180.7 million to $673.6 million at September, mostly representing FY20 net profit of $124.2 million
and $80.4 million for shares issued in relation to the scheme of arrangement to AIRR shareholders. This is offset by $25.2 million of dividend
distributions to shareholders.
4 Leverage financial covenant was 3.5 times at
September 2020 only. This will revert to 2.5
times in March 2021
Elders2020 Annual Report Operating and Financial Review
19
Cash Flow
This section has been prepared to demonstrate the adoption of AASB 16 Leases pre and post-implementation to enable a more meaningful
comparison to the prior year. Unless otherwise stated, numbers will be presented pre-AASB 16.
$ million as at end
Operating cash flow
Investing cash flow
Financing cash flow
Total cash flow
Cash conversion ($million)
FY20
Post-AASB 16
FY20
Adjustments
FY20
Pre-AASB 16
142.3
(123.1)
24.2
43.4
31.8
-
(31.8)
-
110.5
(123.1)
56.0
43.4
FY19
11.2
(42.5)
26.9
(4.4)
Change
Pre-AASB 16
99.3
(80.6)
29.1
47.8
Retail Products
(48.8)
Wholesale Products
(1.4)
Real Estate Services
EBITDA
121.4
Operating Cash Flow
Net Provisions/Accruals
0.5
110.5
18.4
Interest, Tax, NCI
0.5
Financial Services
Underlying Profit after Tax
(0.7)
109.0
Agency Services
31.0
Cash Conversion
101%
Movements in Assets
and Liabilities
Feed and Processing
Services
(28.6)
(6.7)
Corporate and Other
(3.7)
(Inc)/Dec in
Receivables
(62.7)
(Inc)/Dec in
Net Paid Stock
13.9
(Inc)/Dec in
Receivables
0.4
(Inc)/Dec
in Payables
30.6
Operating cashflow of $110.5 million is comprised of EBITDA of $121.4 million offset by an increase in assets and liabilities $28.6 million.
Key drivers include:
⋅ growth related increase of $45.0 million in Retail Products with:
– debtors up on higher 4th quarter sales
– increase in Titan AG inventory, offset by higher creditors
⋅ lower Agency Services working capital of $31.0 million from lower receivables from improved year end debtor collection
and increased payables, in part due to timing
⋅ higher cattle inventory in Feed and Processing Services due to increase in cattle prices and year end impact of supply chain disruption in China
20
Material
Business
Risks
Achievement of our
business objectives
could be affected by
a number of risks that
might, individually or
collectively, have an
impact.
Following is an overview of key risks
Elders faces in seeking to achieve its
objectives. The risks noted are not
exhaustive and are in no particular
order. Elders seeks to identify, analyse,
evaluate, treat and monitor all risks, to
maximize opportunities and prevent or
reduce losses.
Elders’ risk appetite is set by the Board
and recorded in the Elders Resilience
Policy and Framework. The Executive
Committee maintains a keen focus
on those risks that have a higher
rating than the desired appetite and
continually assesses our operational
and strategic environment for new
and emerging risks.
Risks are comprehensively reviewed
and reported four times a year (or
escalated immediately if certain
triggers are met) to the Board Audit,
Risk and Compliance Committee
to ensure the Board is adequately
informed of the evolving risk
environment.
Additionally, during 2020, Elders
introduced a new safety and risk
management platform for the
organization. This system facilitates
a live and integrated approach to risk
monitoring, updates and reporting. It
also enhances the linkages between
safety incidents and risk management.
More detail on Elders’ approach to
managing risk is contained in our
Sustainability Report on page 63 and
our Corporate Governance Statement
on Elders’ website at elders.com.au/
corporategovernance.
Material Business Risk
Our strategy
Health and safety
Safety risk is inherent in Elders’ business activities.
The safety of our people, clients and the general
community with whom we interact is our number
one priority. Key safety risks include livestock
handling, remote driving, manual handling and
chemical handling.
The safety of our people and an effective safety
culture within Elders is a critical and non-negotiable
corporate objective. Through the implementation of
a safety management system based on continuous
improvement, we reduce risks which might impact our
operations. We recognise and reward safety initiatives
and safe behaviours via our monthly One Elders Awards
program. This initiative values and promotes safety
and ensures our positive safety culture is embedded
throughout our operations.
Animal welfare
The safety and welfare of livestock is of
paramount importance to Elders and the company
has controls in place to ensure the wellbeing and
proper treatment of all animals within our control.
Failure to protect the welfare of livestock in our
control might result in stakeholder activity,
business disruption and reputational damage.
Elders has “zero tolerance” for poor treatment of
livestock. Our people are trained in safe livestock
handling protocols and methods and we comply with
and strive to exceed all government requirements.
In addition, we actively engage with the industry and
stakeholders to improve animal welfare practices
where possible.
Pandemic
As is the case for many businesses, pandemic
conditions have the potential to impact Elders’
ability to conduct its business.
The safety of our people, clients, the general
community and business continuity are at risk
during such events.
Commodity pricing
Elders has exposure to commodity price
fluctuations in its Agency, Retail and Feed and
Processing operations where movements in
commodity prices, exchange rates and/or a change
in the volume of Australian rural production could
affect margins in the future.
Severe weather events
Severe weather events and other natural events
may reduce the output of relevant agricultural
products and affect the operation of Elders’
business. Natural events, caused or affected by
weather, such as frost, drought, flood and fire can
have an impact. Such conditions can influence
the supply of and demand for rural products and
services provided by Elders, resulting in varied
revenue levels.
Throughout COVID-19, Elders has enacted and operated
its business continuity processes, establishing a
COVID-19 Response Committee which meets weekly
and is comprised of business unit representatives
and functional experts and is chaired by the Company
Secretary and General Counsel. To date, the pandemic
has not triggered the activation of the crisis management
team for Elders.
Exposures are managed through diversification of income
streams by product and geography, controlled inventory
levels and flexible remuneration models for the Agency
business which allow for cost base adjustments in
response to fluctuations.
To limit the impact of natural weather events,
Elders maintains both a geographical spread of
operations and a diverse product and service range.
Maintain robust incident response and business
continuity systems.
Elders2020 Annual Report Material Business Risks
21
Material Business Risk
Our strategy
Climate change
Climate change presents both physical and
transitional risks to Elders’ business. It has the
potential to increase the magnitude and frequency
of physical risks to Elders’ operations, assets and
people, and the scope of other risks, like those
relating to the legal and regulatory environment
in which Elders operates, and technological,
market and reputational risks.
Biosecurity threats
Biosecurity threats to agricultural products
and livestock may affect Elders’ business. An
outbreak of a systemic animal or plant disease can
lead to quarantine conditions in rural Australia and
reduce producers’ need for goods and services or
affect their ability to operate.
Food safety
Elders handles livestock and red meat in its
Feed and Processing operations which are
destined for human consumption. The risk of
contamination to these food products exists.
Fraud and corruption
Elders is exposed to fraud, bribery and
corruption risks, including in foreign markets
in which it operates.
Counterparty Risk
Elders deals with numerous counterparties
of different types. We provide credit to
approved counterparties, both domestically
and internationally, and may be exposed to
losses associated with a client’s inability to
repay debt as well as exposure to supplier
and partner counterparty risks.
Operational and strategic risks presented by climate
change are captured within Elders’ existing governance,
risk management and resilience frameworks. This year,
Elders established a dedicated sustainability team to
lead the management and disclosure of climate change-
related risks and opportunities. Further information on
how climate change is managed by Elders (including
specific climate change-related risks and opportunities
relating to severe weather events, energy and emissions,
water availability and soil health) and Elders’ action plan
for further development can be found throughout our
Sustainability Report on page 32.
To manage the impact, Elders has in place employee
training and disease management protocols. In addition,
Elders also has a business continuity framework in place
to respond to and recover from the risk of disruption.
This risk is managed through HACCP accreditation
in meat processing plants and strict animal health
controls in the feedlot.
Elders has several controls to counter these risks,
including appropriate segregation of duties, the terms
of its Code of Conduct, compliance policies, fraud policy,
anti-bribery and corruption policy, training throughout
the business, financial reconciliation processes,
whistleblower policy and reporting hot-line, leave
management protocols and an Internal Audit program
which is complemented by periodic reviews conducted
by the external auditor.
This risk is managed by individual counterparty
credit risk assessments, maintaining credit policies
and procedures, oversight by the Credit Committee,
debtor monitoring and reporting, trade credit insurance
(major livestock processors debtors) and high level
reviews of significant credit issues by the CEO and
CFO, and if sufficiently material, the Board. To address
counterparty risk through its foreign operations, Elders
performs counterparty risk assessments, undertakes due
diligence processes and seeks to establish long-term
strategic relationships with key customers.
Political Risk
Elders operates in domestic and foreign
jurisdictions where the business may be affected
by changes implemented by governments.
In addition, subsidies given to foreign rural
producers may adversely affect the competitive
position of Australian rural outputs.
Elders controls consequential exposure to this risk
through contractual means wherever practicable and
seeks to cultivate a diverse range of international
markets to reduce concentration risk. The Board
maintains control and oversight over ventures in
new jurisdictions.
Cyber threats
Elders’ operations rely on information technology
solutions which expose us to the threat of cyber
disruption and loss of data.
Logistics
Due to the nature of our operations, we operate
with complex supply chain challenges and work
with numerous logistics suppliers in a dynamic
operational and regulatory environment.
Elders maintains a strong focus on our information
technology capabilities and we continue to implement
and embed stronger security for our IT infrastructure
on a continuous improvement basis.
This operational risk continues to be a strong focus in
2021 and work with government regulators and other
parties will continue to improve our processes across
our supply chain as well as educate and inform the
logistics providers we operate with.
Elders has categorised
our material business risks
as follows:
Economic
The ability to continue
operating at a particular level
of economic production over
the long-term.
Environmental
The ability to continue
operating in a manner that does
not compromise the health
of the ecosystems in which it
operates over the long-term.
Social
The ability to continue
operating in a manner that
meets accepted social norms
and needs over the long-term.
Review of Operations
2020 24
Review of
Operations
Key Statistics
Rural Products
Retail Products
Fertiliser
Wholesale Products
Agency Services
Livestock
Wool
Real Estate Services
Farmland
Residential
Property Management
Franchise
Financial Services
Agri Finance
Elders Insurance (20%)
Digital and Technical Services
Fee for service
AuctionsPlus (50%)
Elders Weather
Clear Grain Exchange (30%)
Feed and Processing Services
Killara Feedlot
Elders Fine Foods
$1.4 billion sales
809,000 tonnes fertiliser through Retail Products
$0.2 billion sales
9.6 million head sheep
1.8 million head cattle
145,000 wool bales
$1.3 billion farmland sales
$0.9 billion residential sales
9,370 properties under management
111 franchisees
$3.0 billion loan book
$1.7 billion deposit book
$76.2 million StockCo book
$727.6 million gross written premium
170+ agronomists
975,000 head sheep
119,000 head cattle
1.2 million active users
51,000 grain tonnes
65,000 head cattle
$14.4 million sales
Elders2020 Annual Report Review of Operations
25
Rural Products
Elders is one of Australia’s leading suppliers of rural farm inputs including seeds, fertilisers, agricultural chemicals, animal health products and general
rural merchandise. We provide these rural products via retail channels to corporate farms and primary producers through Elders owned stores.
With the acquisition of Australian Independent Rural Retailers (AIRR) in November 2019, we now operate a Wholesale Products business supplying
independently owned member stores, utilising the AIRR branding. AIRR also provides retail services through corporate owned stores and through the
Tucker Pet and Produce brand to independently owned member stores.
Formulation of own brand products, and our backward integration strategy, is facilitated through various brands including Titan AG, Apparent,
Pastoral AG, IO, and Hunter River.
We also provide professional production and cropping advice with over 170 agronomists nationwide, including 12 specialists operating through
Thomas Elder Consulting.
Performance
Rural Products margin is up $71.3 million (47%), mainly due to the AIRR acquisition, which has contributed $44.0 million since 13 November 2019.
Despite below average rainfall and summer crop down 66% in the first half, improved conditions in the second boosted winter crop demand namely
for crop protection and fertiliser products. We continue to see the growth and benefits of our backwards integration strategy through Titan AG, which
contributed a margin uplift of $9.3 million this year.
Strategy
To deliver capital light and profitable growth by executing our backward integration strategy, capturing more gross margin from optimised pricing
and supply chain efficiency, and winning market share through customer centricity, sales force effectiveness and strategic acquisitions.
Strategy
Achievement
Plan
Capital light, return
on capital driven
business model
⋅ Successfully integrated and delivered Year 1 synergies
from the AIRR acquisition
⋅ Titan AG growth continued, leveraging the benefits of
backward integration and exposure to higher value segments
⋅ Delivered margin growth and improved inventory management
through the execution of business improvement initiatives
⋅ Deliver Year 2 synergies associated with the AIRR acquisition
⋅ Through business improvement initiatives, generate additional
margin via optimised pricing, backward integration and supply
chain efficiency
⋅ Continued focus on maintaining financial discipline
with capital management
Customer and
product focus
⋅ Established a Wholesale Products business via AIRR
⋅ Expanded into geographical gap areas through acquisition
⋅ Successful implementation of rebate management and trading
⋅ Win market share through customer centricity
and strategic acquisitions
⋅ Continue to grow our Wholesale Products business
agreement platform
through AIRR
⋅ Implemented performance dashboards across the Network
⋅ Launch of Thomas Elder Markets, an independent, data-driven
market analysis service that provides premium agricultural
market insights and reports
Rural Products
margin ($ million)
223.9
126.2
134.0
148.5
152.6
FY16
FY17
FY18
FY19
FY20
Margin by product
Margin split by geography
58%
Farm Supplies
29%
South
20%
AIRR
13%
Fertiliser
9%
Titan AG
18%
Central
28%
North
25%
West
26
Agency Services
Elders provides a range of marketing options for livestock, wool, and grain. The Elders livestock network comprises livestock agents and
employees operating across Australia conducting on-farm sales to third parties, regular physical and online public livestock auctions and
direct sales into Elders-owned and third-party feedlots and livestock exporters.
Elders is one of the largest wool agents for the sale of Australian greasy wool and operates a brokering service for wool growers. Our team
of dedicated wool specialists assists clients with wool marketing, in-shed wool preparation, ram selection and sheep classing.
Elders also has a 50% interest in AuctionsPlus, an online livestock auction platform, and a 30% interest in Clear Grain Exchange (CGX),
which is an online grain trading platform.
Performance
Agency Services margin improved $15.0 million (13%), which is mostly attributable to Livestock (up $18.9 million). This is mainly due to strong
livestock prices for both cattle and sheep driven by limited domestic supply.
Wool margin declined by $4.8 million (30%) on last year due to lower bales sold. There are significant wool bales held in store, due to lower
prices deterring growers from trading. Prolonged dry conditions across most wool-growing regions has impacted production with a reduced
number of sheep shorn nationally. Additionally, subdued global demand, particularly in China, has resulted in a decline in the Eastern Market
Indicator (EMI) price for wool.
Strategy
To deliver profitable growth of the Agency Services portfolio through business improvement, recruitment and acquisition for our Livestock and Wool
businesses and through focused growth of our investments in AuctionsPlus and CGX.
Strategy
Achievement
Plan
Operating model
⋅ Livestock agency footprint expansion through
⋅ Invest in Livestock, Wool and Grain product development
acquisition of Eastern Rural in Dalby
to improve and expand offering
⋅ Implementation of business improvement initiatives
to drive business efficiency and growth
⋅ Significant growth in online auction listings through
AuctionsPlus platform (50% Elders ownership), which
provided continuity when traditional sale methods (e.g.
saleyards) were impacted by COVID-19 restrictions
⋅ Strengthened our CGX value proposition with customers
People
⋅ High retention of trainees in Livestock program
⋅ Continue footprint expansion through targeted acquisitions
⋅ Continue to grow listings through AuctionsPlus
⋅ Leverage 30% shareholding in CGX to improve grain value
proposition and grow revenue
⋅ Selective recruitment of Livestock and Wool personnel
⋅ Geographical expansion through recruitment of high
performing people
Agency Services
margin ($ million)1
122.6
119.3
116.1
111.4
131.1
FY16
FY17
FY18
FY19
FY20
1 Includes equity earnings from investments
Margin by product
Margin split by geography
92%
Livestock
8%
Wool
38%
South
23%
Central
22%
North
17%
West
Elders2020 Annual Report Review of Operations
27
Real Estate Services
Elders’ Real Estate Services include company owned rural agency services primarily involved in the marketing of farms, stations and lifestyle
estates. It also includes a network of residential real estate agencies providing agency and property management services in major population
centres and regional areas through company owned and franchise offices. Other services include water and home loan broking.
Performance
Real Estate Services margin improved by $3.9 million (11%). Margin from farmland agency has contributed most of the uplift (up 15%) and is
favourable across most geographies. Despite COVID-19 disruptions, residential agency and property management has also outperformed last
year, offset by lower earnings from water broking activities.
Strategy
To deliver profitable growth of the Real Estate Services portfolio through driving business improvement, recruitment and acquisition for all
real estate services.
Strategy
Achievement
Plan
Operating model
⋅ Implementation of numerous business improvement initiatives,
⋅ Continue to grow company owned farmland agency,
primarily focused at brand enhancement, digital strategy
and people development
residential agency and property management presence
in major regional centres
⋅ Grown a significant rent roll asset through organic
and acquisitive growth
⋅ Continue to grow market share in water broking
⋅ Enhance productivity and efficiency initiatives
⋅ Facilitated numerous on and off-market investment
in our property management business
scale transactions
People
⋅ Maintained a strong attraction and retention proposition
⋅ Retained all high performing sales agents
⋅ Significant increase in participation levels in
a modern learning and development program
⋅ Continued enhancement of digital marketing
and lead generation activity
⋅ Ongoing recruitment of high performing real estate
sales representatives and water brokers
⋅ Recruitment of real estate franchisees
⋅ Increased productivity through technology
initiatives and training
⋅ Ongoing investment in capability in the farmland
investment space to provide a whole of investment
lifecycle service offering
Real Estate Services
margin ($ million)
38.2
33.6
34.3
31.9
29.2
FY16
FY17
FY18
FY19
FY20
Margin by product
Margin split by geography
88%
Agency
12%
Property Management
22%
South
22%
Central
33%
North
23%
West
28
Financial Services
Elders distributes a wide range of banking and insurance products and services through its Australian network. We work together with a number of
partners to deliver these offerings; Rural Bank and StockCo for banking and livestock funding products and Elders Insurance (a QBE subsidiary) for
general insurance. Collectively, these relationships enable us to offer a broad spectrum of products designed that help our customers grow their
business and manage cash flow and risk.
Performance
Financial Services margin is up $3.7 million (11%). This is due to additional earnings from Livestock in Transit (LIT) delivery warranty products,
offset by lower Agri Finance margin due to new Rural Bank distribution agreement (down $4.4 million). This margin decline is mitigated by lower
costs, which is $5.3 million favourable to last year.
Insurance benefitted from increased gross written premiums and favourable equity earnings from Elders Insurance.
Strategy
To deliver profitable growth of the Financial Services portfolio through business improvement, product development and upstream investment
in our services business.
Strategy
Achievement
Plan
Deeper, more productive
partnerships
⋅ Embedded Rural Bank distribution agreement
⋅ Work with Rural Bank to support growth in loan and
and operating model
⋅ Worked with StockCo to expand and improve
product offering
deposit facilities through cross promotion and referral
⋅ Engage in joint marketing and referral campaigns with
Elders Insurance to grow gross written premiums
Expand Elders issued
product offerings
⋅ Grown Livestock and Wool in Transit delivery
warranty associated with Elders’ Agency Services
⋅ Launched new livestock funding product for
< $100,000 facilities
⋅ Develop and enhance new and existing on balance
sheet finance products to help growers fund inputs
and manage cashflow
⋅ Grow Livestock and Wool in Transit revenue
through increased uptake
⋅ Expand Elders finance footprint and capability
through recruitment and training
Financial Services
margin ($ million)1
38.3
35.1
37.1
33.4
26.2
FY16
FY17
FY18
FY19
FY20
1 Includes equity earnings from investments
Margin by product
Margin split by geography
45%
Agri Finance
36%
Insurance
19%
LIT Delivery
Warranty
34%
South
22%
Central
23%
North
21%
West
Elders2020 Annual Report Review of Operations
29
Feed and Processing Services
In Australia, Elders operates Killara Feedlot, a beef cattle feedlot near Tamworth in New South Wales. Elders imports, processes and distributes
premium Australian meat in China.
Performance
Killara gross margin was up by $0.9 million (6%), which resulted mainly from higher utilisation and throughput.
The China business was down $0.4 million (60%) on last year, mainly due to COVID-19 shutdown. This is partially offset by cost savings.
Strategy
To deliver continuous improvement in EBIT and ROC for all businesses with active portfolio composition management.
Strategy
Achievement
Plan
Grow Killara Feedlot
⋅ Increased utilisation and operational efficiency
⋅ Continued focus on procurement strategies
at Killara through a capital improvement program
⋅ Improved supply chain efficiency at Killara through
use of backgrounding and external facilities
and expansion opportunities at Killara
Grow Elders
Fine Foods
⋅ Grown sales channel for online and supermarkets
⋅ Drive further growth and margin improvement
in China to increase customer portfolio
through execution of business improvement initiatives
⋅ Recruitment of high performing management team
Feed and Processing Services
margin ($ million)
15.0
15.5
14.2
12.9
11.5
FY16
FY17
FY18
FY19
FY20
Margin by product
Margin split by geography
99%
Killara
1%
China
99%
Killara
1%
China
30
Outlook
The agricultural sector
remains on track for a
recovery after successive
years of drought-affected
seasons in eastern
Australia. Production
is forecast to grow but
the value of production
is expected to remain
steady due to reduced
prices. COVID-19
continues to disrupt
the agricultural sector,
however the business
and broader industry
has remained adaptable.
Continuing uncertainty
also remains in export
markets.
Rural Products
⋅ Area planted for summer crop is expected to rebound from historically low levels last year, resulting
in recoveries in demand for crop protection and fertiliser
⋅ COVID-19 has had minimal impact overall on key inputs across the industry; Elders continues to adapt
to these challenges
⋅ Contribution margin improvement to be achieved through optimised pricing and continued delivery
of synergies and backward integration from AIRR and Titan AG
⋅ Continued investment in Rural Product acquisitions and working capital to support business growth
and performance
Agency Services
⋅ Cattle prices to ease from record prices, but are expected to remain within a historically high range
⋅ Sheep prices are forecast to fall due to reduced international and domestic demand for sheep meat,
and a shift to more affordable cuts
⋅ Reduced consumer demand for apparel and disrupted clothing supply chains has raised the levels
of unsold textiles and raw fibres, which will likely constrain demand and keep wool prices under
pressure in the near-term
Real Estate Services
⋅ High levels of demand for farmland is expected to continue while potential farmland sellers are
deferring selling decisions due to uncertainty created by COVID-19; this is expected to deliver ongoing
strong farmland values
⋅ Regional residential property markets continue to outperform city markets and are expected to continue
into FY21 as buyers seek better returns
Financial Services
⋅ Livestock financing expected to grow with the launch of new <$100,000 livestock funding product
to complement the existing StockCo offer
⋅ Significant room for continued growth in Livestock in Transit product with less than half of livestock
clients opted in to the add-on product
⋅ Continued growth in Insurance and Agri Finance offerings through marketing and promotion with
partners QBE and Rural Bank
Feed and Processing Services
⋅ A challenging year for Killara Feedlot may see difficulty sourcing animals at reasonable prices and
volumes to service major export markets; this however will be partially offset by easing feed costs
⋅ Elders Fine Foods trading profitably under renewed multichannel strategy
Costs and Capital
⋅ Costs are expected to increase in line with footprint growth, continued investment in our Eight Point
Plan and the first phases of our System Modernisation program
Elders2020 Annual Report TEI and the environment
31
TEI and the
environment
Australia’s farmers
understand that
long-term profitability
depends on how
they optimise the
performance of their
land. That means
conserving and
investing in that
asset for the future.
Elders shares this commitment with
Australian producers. Our goal across
the network is to benefit the whole
farming system – from soil health and
water conservation to biodiversity
and animal welfare.
Head of the Thomas Elder Institute
(TEI) and Thomas Elder Consulting
(TEC) consultant Dr Michael Wilkes
has built a career on the principles of
increasing profitability and efficiency
on-farm without compromising scarce
primary resources – delivering value
to clients.
“For me, working with clients starts
with managing pastures for year-on-
year performance, which leads to high
volume and quality output leaving
the farmgate – and that is something
Elders advisors pride ourselves on,”
Michael says.
As part of his role with TEI, Michael
oversees the implementation of the
Struan Best Practice Demonstration
farm, part of a strategic partnership
between Elders and Primary Industries
and Regions South Australia. This
project will demonstrate how new
technologies can improve production
efficiency in a commercial livestock
enterprise. A primary focus is on soil
health and how it can maximise feed
growth and pasture production and
manage grazing.
“Healthy soil is key to a more environmentally-
conscious farming operation as it improves water-
holding capacity, increases organic matter and
carbon sequestration, promotes plant health and
growth performance,” Michael says.
“At Struan, we are working with a range of
different soil types to optimise our outputs.”
Elders’ network of agronomists and Thomas
Elder consultants supports more than 6,000
clients across Australia in managing the
productivity of their farms, facilitating up
to 9,000 soil tests every year.
Understanding the cyclical nature of the
environment, and how to optimise pasture
growth through the seasons, has played a
crucial role throughout south-east South
Australia and southwest Victoria, where
Michael has been advising for some time.
With winter-dominant rainfall patterns,
Michael works with producers to optimise
pasture utilisation when feed is at its highest
quality and manage stock throughout periods
of feed deficit to preserve soil and pasture
health for the following growing season.
“Many clients are now confinement-feeding
ewes over the summer and early autumn,
utilising a centreless auger feeder system to
deliver grain and mineral supplements,” he says.
“This process gives the greatest control over the
animal’s body condition, allowing reproductive
performance to be optimised whilst conserving
the natural environment.
“Over grazing has a lasting negative effect on
the land. This program focuses on maintaining
a healthy level of ground cover, while not over-
compacting the soil – protecting it from the sun,
increasing organic matter levels and promoting
water infiltration.”
While this process has a positive environmental
impact, it ultimately increases business success,
too. Confinement feeding, and the control it allows,
helps livestock’s weight and condition to be
managed for optimum health, and allows pasture
to recover more effectively after the season break,
ready for lambing.
Our goal across the
network is to benefit
the whole farming
system – from soil
health and water
conservation to
biodiversity and
animal welfare.
Sustainability Report
2020 In this Report
Sustainability at Elders
Community Impact and Investment
Health and Safety
Our Workforce
Environmental Performance and Regulation
Climate Change
Energy and Emissions
Severe Weather
Sustainable Farming
Animal Welfare
Innovation and Technology
Governance
Performance Tables
GRI Content Index
Definitions and Topic Boundaries
34
38
41
45
48
50
52
53
54
56
58
61
66
68
72
FY20 Highlights
Over $1.51m in donations and sponsorships
350+ local community sports teams
and events sponsored
78% decrease in Lost Time Injuries
New Safety 7 work health and safety
system launched
417 new hires
Zero employees stood down due to COVID-19
42,600+ agricultural chemical
containers diverted from landfill
TCFD recommendations adoption commenced
34
Sustainability
at Elders
Our key sustainability principles
We provide our customers and clients
with the goods and services they need
We support our people and the industries
and communities in which we operate
We do our part to look after the environment
and the animals in our care
We operate ethically and to the highest standard
Our ambition is to develop and then deliver an authentic and industry leading sustainability program
which acknowledges and builds on the initiatives in which Elders participates and leads throughout
rural and regional Australia, for and on behalf of the entire agriculture industry.
This is highlighted in our latest Eight Point Plan, which sets out Elders’ key strategic priorities for the
next three years up to 30 September 2023. Our Eight Point Plan was developed by our Board and
Executive through a series of workshops and strategy sessions over the course of 2020.
Elders2020 Annual Report Sustainability Report
35
Voluntary Alignment
United Nations Sustainable
Development Goals
Our approach to sustainability is informed by the
following United Nations Sustainable Development
Goals, which we believe we can contribute to most
as part of our business:
GRI Standards
This report has been prepared in accordance
with the Global Reporting Initiative (GRI)
Standards “Core” option. We have elected to
report on additional governance disclosures
which are not required for the Core option to
disclose the significant progress we have
made in this reporting year to further our
sustainability governance mechanisms.
TCFD Recommendations
We have chosen to align our climate-related
disclosures with the TCFD Recommendations.
Details on the actions we have undertaken this
year and our plan for full alignment are on page
51 of this report.
Reporting on Sustainability
This is our first Sustainability Report and it has
been developed to inform our stakeholders of our
actions and performance on material topics from
1 October 2019 to 30 September 2020 (referred
to herein as ‘the reporting period’). To provide
some additional context to our business, this
report includes some information on programs
and initiatives which commenced before the
reporting period and which have been integrated
into our way of doing business.
The content of this report was determined using
the GRI reporting principles for defining report
content; namely:
⋅ Stakeholder Inclusiveness
⋅ Sustainability Context
⋅ Materiality
⋅ Completeness
The report reflects the most important topics
(Materiality) raised by a wide range of stakeholders
(Stakeholder Inclusiveness) in the context of
current and emerging domestic and international
trends in the agriculture industry and the ASX100
(Sustainability Context). It is based on information
available and reported throughout the reporting
period (Completeness).
36
Our Material Topics
The following topics were identified as material to Elders’ stakeholders through a Materiality Assessment undertaken with support from Ernst
and Young in 2020.
Topic
Description
Stakeholders who raised this topic
Community impact
and investment
Supporting local communities and managing community expectations
and relations
Staff, customers, investors, industry groups,
regulators and financiers
Health and safety
Maintaining our commitment to providing a safe work environment
Staff, customers, investors and financiers
Employee attraction
and retention
Climate change
Water availability
Investing in the present and the next generation of our workforce and
ensuring that our people are enabled to support service delivery and
create meaningful work outcomes
Staff, customers, investors, industry groups
and regulators
Addressing the risks and opportunities presented by climate
change mitigation and adaptation
Staff, customers, NGOs, investors, industry
groups, regulators and financiers
Addressing the issue of water availability to the communities in which Elders
operates and its impact on the operation and performance of Elders’ business
Staff, customers, investors, industry groups,
regulators and financiers
Animal welfare
Ensuring the wellbeing and proper treatment of livestock
Severe weather events
Addressing the issue of severe weather events and their impact
on the operation and performance of Elders’ business
Energy
Managing our energy consumption and greenhouse gas emissions
through the responsible use and reliable sourcing of energy
Waste management
Responsibly managing waste in our own operations and our role
in managing agricultural waste from our customers’ operations
Corporate governance
Delivering on our commitment to high quality governance,
transparency and ethical business practices
Staff, customers, NGOs, investors, industry
groups, regulators and financiers
Staff, customers, investors, industry groups
and regulators
Staff, customers, investors and financiers
Staff, customers, investors and industry
groups
Staff, NGOs, investors and industry groups
Innovation and technology
Demonstrating our investment in innovation and technology
in the agriculture industry
Staff, investors, industry groups, regulators
and financiers
Our Materiality Assessment involved:
1. Extensive research
2. Stakeholder engagement
3. Prioritisation
4. Validation and reporting
⋅ Media analysis
⋅ Peer analysis and benchmarking
⋅ Internal document assessment
⋅ Customer surveys
⋅ Staff surveys
Interviews with a range of
stakeholders including:
⋅ Investors
⋅ Superannuation funds
⋅ Analysts
⋅ Federal and State Governments
⋅ Agricultural industry bodies
⋅ Financiers
⋅ NGOs
⋅ Proxy advisors
⋅ Our Executive and other senior
management
⋅ Consolidating data from steps
one and two for qualitative and
quantitative analysis
⋅ Scoring identified topics in order
of importance to stakeholders and
impact on our business
⋅ Validating prioritised topics with
our Sustainability team, Executive
and Board
⋅ Validating prioritised topics
through Ernst and Young’s
proprietary assessment framework
Elders2020 Annual Report Sustainability Report
37
Stakeholder Engagement
Stakeholder engagement is vital to understanding the impact of our operations and is used to inform and
support our Board and broader business in identifying, managing and reporting on material sustainability
topics and their associated risks and opportunities.
Elders’ approach to engaging with stakeholders is set out below.
Stakeholder
Engagement approach
Investment community
Elders’ website, AGM, public reporting and announcements, briefings,
conferences, regular meetings and discussions
Regulators
Customers
Communities
Employees
NGOs
Financiers
Meetings, site visits, through industry associations and responses to enquiries
Surveys, meetings, industry events, information sessions, Elders’ website
and media communications
Participation in community programs and events, industry events, our website
and media communications
Surveys, performance reviews, presentations, training, meetings, social events,
email and intranet
Meetings and through industry associations
Regular meetings and discussions
Industry bodies
Industry conferences, meetings and presentations
Contractors and suppliers Meetings and supplier conferences
We aim to engage with all members of our investment community, customer, communities and employee
stakeholder groups in developing our identification and management of economic, environmental and
social topics. In selecting which regulators, NGOs, financiers, contractors and suppliers to engage with,
we consider their relationship with Elders, and their knowledge and experience of the markets important
to our business.
WHAT OUR STAKEHOLDERS SAID:
“Think ahead and not live in the moment – environment and sustainability is far beyond our monthly P&L’s”
– Elders employee
“Some of the leaders in sustainability tend to greenwash what they do about sustainability – we don’t
want companies to do that. We just want to understand: what are your material ESG risks and what are
you doing about them? No more, no less” – Investor
“We see ESG management through a “Planet, People then Profit” lens. If you take care of the environment,
your people and the community, then profits will follow” – Customer
“There are two critical things for Elders to consider for ESG: one thing is about disclosure; what they
report, how they report, how it compares to others, and how accountable they are through reporting.
The other is the underlying ESG issues that are relevant to their business” – Financier
“A separate standalone messaging about sustainability goals and initiatives is needed. There is no
doubt about how Mark Allison runs the business; they would have best practice. Good governance
is there. The need is in the corporate communication area.” – Industry body
38
Community
Impact and
Investment
Through assisting
generations of
Australian farmers
over the course of
more than 180 years in
business, we recognise
that our long-term
sustainability is
dependent on us
maintaining strong
relationships with
the communities in
which we operate,
and connected to their
economic prosperity
and resilience.
Our rural communities are facing
a number of challenges presented
by changing agribusiness
models, increasing automation
and corporatisation of farms, the
environmental impacts of drought
and more broadly, climate change.
As a key member of the agriculture
industry and our rural communities,
we recognise that we have a role to
play in providing support. We
primarily do this through:
⋅ investments in local events and
organisations, and by participating
in local community programs
⋅ supporting local businesses
and employing local workers
⋅ maintaining a physical presence
in the communities we serve,
through good times and bad
⋅ adapting and providing the goods
and services our local customers
and clients need at any given time
Over $1.51 million
IN SPONSORSHIPS AND DONATIONS
This year, we gave more than $1.51 million in sponsorships and donations.
The majority of our spend was directed to the following areas:
$259,000+
TO LOCAL COMMUNITIES
Supporting the Foundation for
Rural and Regional Renewal
in their mission to strengthen
rural, regional and remote
communities and directly
supporting a variety of local
community organisations and
events, including rural schools
and clubs.
$624,000+
TO INDUSTRY AND INNOVATION
Sponsoring national organisations and initiatives such
as Agrifutures Australia, AdvanceAg and national grower
associations, as well as providing funds and in-kind support
to several universities and organisations in support of
agricultural research and development.
We also supported the agriculture industry at a grass roots
level, with approximately $58,000 directed to supporting
town agriculture shows and field days in rural and regional
communities across Australia.
$124,000+
TO HEALTH AND WELLBEING
Donating funds to major charitable organisations
like the Royal Flying Doctor Service (RFDS) and
Beyond Blue, as well as supporting local emergency
services and events raising awareness and funding
for a variety of health issues.
$455,000+
TO SPORTING TEAMS AND EVENTS
Sponsoring the North Queensland
Cowboys, the New South Wales Country
Eagles and the North Melbourne
Football club, as well as more than
350 sporting teams and events in
our local communities.
Elders2020 Annual Report Sustainability Report
39
VH-FXW ‘WHISKEY’ PREPARING FOR COVID-19 SAFE PATIENT TRANSFER
Elders continued to be a major partner of the RFDS in FY20. The RFDS is a key player in the delivery
of 24/7 emergency aeromedical and essential primary health care services to people living, working
and travelling in rural and remote Australia.
The Elders branded RFDS Pilatus PC-12 aircraft (VH-FXW), ‘Whiskey’, in 2019/20 (July to June) flew
424,000km throughout South Australia and beyond.
Whiskey airlifted 877 patients from 56 different country hospitals and outback locations for specialist
care or life-saving treatment, including:
⋅ 17 patients by primary (remote) evacuations
⋅ 855 patients by inter-hospital transfers from country SA hospitals to Adelaide’s major hospitals
⋅ four interstate transfers of critically-ill patients, including three infants between Royal Children’s
Hospitals in Adelaide and Melbourne for life-saving (cardiac) surgery
In addition, Whiskey was used to transport RFDS primary health care teams from the RFDS Port Augusta
Base to deliver a ‘fly-in’ GP primary health clinic to remote communities and stations in outback SA and
seven COVID-19 related transfers.
Our investments and participation in
local community events, organisations
and programs are run independently
by our branches and are tailored to
local community needs as informed by
the people that live and work in them.
Our Board has approved delegations
of authority (set out in our internal
Delegation of Authority Policy) for
making budgeted and unbudgeted
sponsorships and donations. Budgets
for community investments are
reviewed and established in line
with our annual budgeting process.
Major sponsorships and donations
are evaluated and agreed to by our
Marketing and Strategy team to
drive support to organisations and
programs that have a connection and
synergy which resonates with our
business and employees, and have
a positive impact on the communities
we operate in.
This year, our staff directed over
$22,100 to the Foundation for Rural
and Regional Renewal, the Royal
Flying Doctor Service, Beyond Blue
and BlazeAid through our matched
employee payroll giving program.
40
Supporting local
people and business
INDUSTRY AND EDUCATION
A significant portion of our community
investment is directed to supporting
local industry groups and field days,
facilitating the sharing of information
on region-specific best practice
farming and overall, helping our
communities to build productivity
and resilience.
Educational workshops are provided
to growers across the country through
the Thomas Elder Institute, however,
our ability to deliver workshops
in person this year was impacted
due to COVID-19 social distancing
restrictions. This provided Elders with
an opportunity to explore the delivery
of information sessions through
webinars, which given their success,
are an initiative Elders will continue
as social distancing and travel
restrictions ease.
Five webinars on technology and
innovation in agriculture delivered
450+ webinar attendees
and 700+ post-webinar views
ECONOMIC DEVELOPMENT
Given the wide geographic spread of
our operations, Elders employs many
local people in rural communities,
with around 85% of our staff working
in rural or regional areas. We also
support other local businesses within
our communities, with our branches
maintaining unique relationships with
local suppliers. Through our business,
AIRR, we support smaller, independent
rural product retailers with marketing,
networking and accessing stock at a
competitive price.
370 AIRR member stores
Elders staff at a pre-emergent technology site in Roseworthy, South Australia
Responsible supply chains
Our businesses are supported by a large
and diverse supply chain comprising global
manufacturers and wholesalers as well as
local small businesses.
We source products for resale and for our own
internal use, as well as services. The products
which we source and sell for resale include
agricultural chemicals and veterinary medicines,
fertiliser, seeds, agricultural machinery and
equipment, livestock and general merchandise.
The products which we use internally include IT
equipment used in our operations, office supplies,
uniforms, personal protective equipment, materials
used to fit out our stores and warehouses, forklifts
and vehicles in our fleet. The services we procure
include cleaning, IT services, general maintenance
services and transport for goods and livestock.
We also procure the professional services of
contractor livestock agents, real estate agents,
agronomists and consultants.
Our businesses source from a range of locations,
with our largest spend on direct and indirect
procurement being on multi-national suppliers.
We are committed to ensuring decent working
conditions within our supply chain and have a
zero tolerance for worker exploitation. We manage
this commitment internally through our centralised
people and culture, payroll and accounts payable
teams, and externally through:
⋅ close relationships with our key suppliers (some
of which we have worked with for decades)
⋅ contractual obligations, with our standard
supplier contracts requiring strict compliance
with anti-bribery and corruption and modern
slavery laws
This year we began upgrading our risk
management controls by:
⋅ developing our Ethical Procurement Framework
⋅ commencing risk assessments of our suppliers
operating within our IT, Indirect Procurement
and Rural Products supply chains
⋅ hosting workshops with supplier relationship
managers on addressing modern slavery
⋅ developing tools to support supplier due
diligence
Further details will be provided in our upcoming
Modern Slavery Statement (due for publication
by 31 March 2021).
Over the coming years, we will continue to work
with our suppliers to monitor and manage modern
slavery risks. We will also aim to develop our
management of other important sustainability
topics within our supply chains, including those
relating to environmental impacts.
COVID-19 SUPPLY CHAIN IMPACTS
While global and domestic markets experienced
volatility through the first half of 2020, at Elders
this instability was limited to wool and livestock
export markets, real estate sales and chemical
supply chains. This did not have a material
impact on the demand for Elders’ products
and services, its customer base or supply chain.
Product shortages were mitigated through close
inventory management.
Elders2020 Annual Report Sustainability Report
41
Health
and Safety
Safety continues to
be a critical and non-
negotiable objective of
Elders as we continue
to improve our work
health and safety
systems to achieve
our goal of zero harm
in our business.
SAFETY PERFORMANCE
Two LTIs (down from nine last year)
Our employees say:
⋅ My work area is safe: 92%
⋅ I always prioritise safety when
undertaking an activity: 93%
⋅ We practice what we preach –
Nothing is so important that it
cannot be done safely: 90%
In August 2019, we held our inaugural
Safety Summit, attended by key
leaders and representatives from
across our business. The Summit
group discussed safety risks,
opportunities and challenges from
within the company and heard from
external presenters, who contributed
valuable insights from different
perspectives.
The outcome of the Summit was
the launch of our new Elders ‘Safety
7’ plan in 2020, which focuses on
the seven most important themes
identified at the Summit to achieve
a safe and healthy workplace.
Our Safety 7 Plan and FY20 achievements
Objectives
FY20 Achievements
GENUINE LEADERSHIP
To lead by example. Leadership is key
to realise our vision and uphold our
genuine effort to keep our people, and
those we interact with, safe always.
Executive members, including our CEO, visited several
branches to engage with employees about health and safety.
During some of these visits, hazards were identified and
logged, with subsequent capital expenditure approved to
ensure workplace safety. These dedicated safety visits will
resume once COVID-19 travel restrictions ease.
PERSONAL DEVELOPMENT PLANS AND KEY PERFORMANCE INDICATORS
Safety is everyone’s responsibility.
To link tangible actions and
measurable targets to work objectives,
to set a clear expectation and inform
eligibility for incentives.
New safety related key performance indicators were
developed and recommended to ensure that our employees
are working towards tangible and relevant goals. These will
be communicated to managers through annual performance
development plans.
WHS CAPITAL EXPENDITURE AND RESOURCING
Capital investment is essential to
eliminate workplace hazards – from
physical infrastructure maintenance
to ensuring our Safety Teams are
adequately skilled, qualified and
resourced to support all locations.
INCIDENT AND HAZARD REPORTING
To continuously improve our
administration systems, to enable
simple and prompt reporting of
incidents and hazards.
RISK ASSESSMENT AND AUDIT
To streamline the assessment
and review of risks, through the
consolidation of various work health
and safety audit checklists, to save
time and enable staff to focus on
core business.
COMMUNICATION AND CONSULTATION
We reinforced the priority of safety-related capital
expenditure through management, including by approving
the recruitment of an additional Safety, Risk & Environment
Business Partner (SREBP).
We launched a new safety reporting platform, which allows
easier incident and hazard reporting through a mobile app.
We launched our new risk management platform,
enabling more efficient risk identification, management
and reporting, as well as the ability to link incidents with
risks for improved analysis.
Safety Action Teams (SATs) to
frequently consult with staff to
encourage collaborative problem-
solving, to identify and resolve
work health and safety concerns.
To ensure SAT performance adds
value to the business.
We developed a new SAT Charter to help SATs facilitate the
important work they do. We also introduced an Annual SAT
Conference (not held this year due to COVID-19 travel and
social distancing restrictions) to enable all SAT members from
around the country to get together and share their learnings
and ideas about health and safety for the benefit of the
branches they represent.
TRAINING
To develop accessible education
and training programs for our
high-risk activities.
We introduced a new safe livestock handling training
workshop facilitated by expert external handlers and aimed
at providing practical on-the-job training for safe handling of
livestock. Future workshops will be held in New South Wales
and Queensland and will move to other parts of the country
thereafter (when safe, subject to COVID-19 restrictions).
SAFETY DURING COVID-19
As a participant in Australia’s food supply chain, Elders is considered an essential service provider
to the agricultural sector and not subject to any Government mandated shutdowns. Appropriate
authorisation documents and permits are in place for Elders’ essential service Workers that are
required to move across borders.
To support our workforce through the impacts of COVID-19 during this reporting period, we issued directions
and resources to all staff in relation to social distancing and proper hygiene. We also introduced contactless
point of sale and collection at our branches. Hand sanitiser and masks were distributed throughout our
network, and staff in our administrative support offices in Brisbane, Melbourne, Perth and our Head Office
in Adelaide were directed to work from home. Staff were equipped with laptops and remote access which
ensured continued productivity and engagement, and staff survey results indicated that the majority of our
employees felt that our organisation responded to the challenges of COVID-19 swiftly and appropriately.
Assessing performance on safety
One of the objectives of our third Eight Point Plan is to ‘provide a safe working environment’.
The key indicators of our performance against our safety objectives at an organisation level are:
⋅ LTIs
⋅ improved safety culture measured through our annual Employee Effectiveness Survey
⋅ dedicated safety visits to branches by our Executive
Further indicators have been developed at both an Executive and local level to align safety-related
behavioural expectations with the achievement of our Eight Point Plan. Those additional indicators
for Executives include participation in a set number of SAT meetings and 100% completion of online
safety training by staff within each Executive’s business unit. ‘Driving significant progress in achieving
a “zero harm” workplace’ is one of the conditions of our Executive level Short-Term Incentives, while
employees who have not completed safety training are typically precluded from receiving any
work-related financial bonuses.
Safety training
Our SREBPs are engaged to deliver induction presentations and safety training to our employees.
Elders also provides online training, guidelines and Safe Work Instructions, and partners with AgSafe and
other third parties for practical training on driver safety, livestock and dangerous goods handling. Elders
ensures nominated First Aid Officers (required at every worksite) are provided with first aid training.
Managers are required to ensure that all employees have completed their required training and are
competent to perform their role safely. Training requirements are determined based on the employee’s
background and experience, the requirements of their role and the level of risk that the employee may
be exposed to. Management incentives are dependent on employees completing mandatory training.
Safety Governance
Our commitment to establishing and maintaining a safe and healthy work environment is set out in
our Work Health and Safety Policy1 and implemented through our Work Health and Safety Management
System (WHSMS), which responds to our evolving business requirements. The policies and procedures
which underpin our WHSMS apply to all our employees and our contractors (Workers), in all our workplaces
– whether they are worksites we control (like our branches, warehouses or offices), or sites our Workers
work in which we do not control (like customer properties or saleyards).
Our WHSMS reflects the requirements of various State-based work, health and safety legislation and our
Safety Manual (currently being updated) draws on the principles of the AS/NZS 4804-2001 occupational
health and safety management system. Our WHSMS is monitored periodically and evaluated to ensure its
suitability and effectiveness.
Our Safety Steering Committee, which includes our full Executive team, meets quarterly to consider
matters relevant to Elders’ safety strategy and to review and consider reports from other management
regarding safety matters. Our Board Work Health and Safety Committee (BWHSC) meets twice a year
to monitor our WHSMS and performance against the Safety 7 Plan.
42
1 Available online at investors.elderslimited.
com/investor-centre/?page=corporate-
governance
Elders2020 Annual Report Sustainability Report
43
Workers are regularly engaged on the development, implementation and evaluation of our WHSMS.
To support meaningful and effective consultation, Elders has developed 10 SATs, comprising a total
of approximately 85 members representing our branches across Australia. Our SATs are responsible
for identifying and attending to safety issues for the locations they represent. In FY20, a total of 103
of the scheduled 120 monthly SAT meetings were held.
Workers are encouraged to raise safety-related matters with their relevant SAT member. They are also
engaged on local safety-related matters at branch meetings (required to be held monthly, with safety
as the first agenda item), by their Branch Safety Administrator and their relevant SREBP. Our SREBPs are
members of SATs and report significant safety issues to the Safety Steering Committee for consideration.
Elders’ safety governance structure
N
Remote
OVER
G
The Board
Board Work Health
and Safety Committee
Safety Steering Committee
Safety Business Partners/
Safety Action Teams
Branch Safety Administrators/
Branch meetings/toolbox talks
Proximity to Operational Risks
Close
AGE
N
A
M
Safety risk management
Work-related risks and hazards are primarily identified through:
⋅ observations from Workers
⋅ industry research
⋅ incident or hazard reports
⋅ branch safety audits conducted by our SREBPs, AgSafe and regulators
We aim to control work-related risks and hazards (including high-consequence injury risks) in
accordance with the following hierarchy of controls set out in our Safety Manual: Eliminate, Substitute,
Isolate, Engineering, Administrate and Personal Protective Equipment.
All incidents and near-hits are required to be reported to management immediately and on our reporting
platform within 24 hours. The incident escalation and investigation process outlined on page 64 of
this report applies to the investigation and escalation of serious safety risks. Information regarding
safety incidents (as well as the results of branch audits and work, health and safety related statistics)
are reported to the Safety Steering Committee and Board to continuously monitor. Our SREBPs perform
risk assessments on identified and reported risks and make recommendations to the business on any
corrective actions and improvements required.
Lost time injuries and serious incidents that are notifiable to a regulator are subject to a more formal
investigation process, which involves the preparation of an incident report reviewed by the Head of
Safety, Risk and Environment, our General Counsel and CEO. These reports are circulated to internal
parties involved in the incident. Corrective actions and learnings are implemented to prevent future
harm. The report is also provided to the Safety Steering Committee and the Board for discussion.
All Workers have an absolute right to stand down or refuse to carry out work if they reasonably believe that
to continue would put their safety or health at risk. Our Whistleblower Policy protects reporters who wish
to remain anonymous from being identified and from any victimisation or liability for making a report.
44
2 Available online at investors.elderslimited.com/
investor-centre/?page=corporate-governance
3 This is an internal document.
4 Surrounding an area with a retaining wall to
contain any unintended escape of material.
5 International Agency for Research on Cancer.
6 Australian Pesticides and Veterinary Medicines
Authority, 2019, ‘Glyphosate’, viewed 1
September 2019, .
7 This includes the United States Environmental
Protection Agency, the European Chemicals
Agency, Health Canada and the New Zealand
Environmental Protection Authority.
Material safety risks
Our risk register specifically addresses work-related hazards which pose a risk of high-consequence
injury – namely handling livestock and driving. These risks are managed in accordance with our Resilience
Policy2 and Framework3 (described in more detail on page 63).
High-consequence injury risks
Risk
Driving
Controls
⋅ Bi-annual vehicle servicing
⋅ Bi-annual vehicle inspections
⋅ Driver safety training
⋅ Vehicle selection procedure
(safety rating approach)
⋅ Personal locator beacons for vehicles
Livestock handling
⋅ Livestock handling inductions
⋅ Livestock handling procedures
⋅ Safe work method statements
⋅ Livestock handling booklet
⋅ Face-to-face training delivered
by expert external providers
Another risk associated with our business is the storage, handling and transport of chemicals and
dangerous goods. Several chemicals and fertilisers used in agricultural production pose environmental
and safety risks if not handled correctly. Elders has a number of measures in place to manage these risks,
including site reviews by our SREBPs and AgSafe, annual site self-assessment processes, the maintenance
and monitoring of store manifests, facility designs to ensure appropriate site bunding4, sumps and product
segregation, and the provision of guidance materials and training to our workers.
Storing, handling and transporting chemicals and dangerous goods can also pose health and safety
risks to our customers and freight providers. We seek to prevent and mitigate those risks by:
⋅ providing customers with Safety Data Sheets containing instructions on the safe use of dangerous goods
⋅ offering customers tailored agronomic advice on the application of agricultural chemicals
⋅ training our employees on the safe transportation of goods, including their responsibilities to prevent
or reduce potential harm or loss to others as required under the Chain of Responsibility Laws
GLYPHOSATE
Following a classification made by the IARC5 in 2015 that glyphosate is “probably carcinogenic to humans”,
glyphosate has been the subject of litigation in several countries, with a number of users alleging that
glyphosate-based products cause cancer.
Glyphosate is registered for use in Australia by its national regulator, the Australian Pesticides and
Veterinary Medicines Authority (APVMA). The APVMA undertakes rigorous scientific assessments before
approving agricultural chemicals for sale and has maintained that APVMA-approved products containing
glyphosate can continue to be used safely according to label instructions.6
The APVMA reviewed glyphosate in 2016 and found that “glyphosate does not pose a carcinogenic risk
to humans and that there are no grounds to place it under formal reconsideration”. Many international,
independent, science-based regulatory agencies like the APVMA have made similar statements.7
Elders relies on the research and opinions of the scientific community in stocking and selling agricultural
chemicals.
Accordingly, we intend to continue to stock and sell products containing glyphosate, noting that the sale
of glyphosate-related products represent an immaterial proportion of Elders’ revenue and earnings. As a
percentage of Elders’ total Rural Products business (which includes our retail and wholesale businesses),
glyphosate-related products represent approximately 6.4% of revenue and 4.1% of gross margin.
Promoting good health
We promote health and wellbeing through the following initiatives which we voluntarily provide
to all employees:
⋅ free access to counselling (available in person and remotely, and also extended to our
employees’ immediate family members)
⋅ free flu and Q Fever vaccinations
⋅ company funded sun-safe and wet weather-resistant uniforms
⋅ discounts and rewards for shopping at various chemists, gyms, sporting goods stores,
health product retailers and private health insurance
Elders2020 Annual Report Sustainability Report
45
Our Workforce
The success of Elders’
business is reliant
on us attracting,
retaining and
developing the best
people in agriculture.
Accordingly, we have
made this a priority of
our new Eight Point Plan.
This year we continued to develop
our people and culture, focusing on:
⋅ enabling community engagement
through paid volunteering leave
⋅ attracting and developing young
people in our workforce
⋅ engaging with our female staff to
further develop our strategy for
redressing gender inequality
⋅ developing the skills of our
Branch Managers through our
Branch Manager Academy
⋅ refreshing and re-launching
our One Elders Values
⋅ building greater alignment between
performance and reward through
revised incentive plans
Workforce snapshot
Our operations are mainly conducted through
our employees. We also engage people on fee-for-
service contracts to provide consulting, livestock
and real estate agency services.
2,117 employees (41% females and 59% males)
190 livestock and real estate agent contractors
417 new hires (197 females and 220 males)
Zero employees stood down as a result of COVID-19
76% of our employees completed our Employee
Effectiveness Survey
$839,000 spent on staff professional development
Our workforce profile is reported to our Board
monthly, where any issues are discussed and
changes to our management approach are agreed
for implementation. Attracting and retaining quality
people is managed as a business risk, using the
procedure outlined on page 63 of this report. Our
progress is measured through regular performance
reviews, training, assessments and surveys.
Investing in our future
We demonstrate our commitment to the
development of our workforce through our
investment in learning and development
programs, remuneration and reward frameworks
and succession and retention models. Career
development is a standing item of every
employee’s personal development plan
and performance review.
We support our future workforce through work
experience, school based trainee placements and
professional development programs, including:
⋅ our Graduate Agronomy Program
⋅ our Livestock Trainee Program
⋅ real estate agent introductory training
⋅ monthly property management training
We also periodically take on candidates for work
experience in other roles throughout our business,
including corporate roles at our Head Office.
AGRIBUSINESS LEADERSHIP PROGRAM
Each year, Elders supports two employees
in completing the Agribusiness Leadership
Program; a bespoke leadership development
program provided by the Australian Rural
Leadership Foundation, designed to challenge
and support participants in responding to
complex, real-life situations faced in the
agribusiness sector and facilitate the creation
of new and diverse professional networks.
“The linking of the program to the outward-
bound experience provided me with clarity,
confidence and areas to focus upon to increase
my effectiveness as a leader.”
Jamie Brogan — Role on entering the Program:
State Farm Supplies Manager — Current role:
State General Manager (Queensland and
Northern Territory)
“The program expanded my understanding
of the Ag sector complexities and opportunities
while challenging my thinking and
strengthening my ability to adapt to changing
situations.”
Belinda Kilner — Role on entering the Program:
HR Business Partner (Western Australia) —
Current role: Senior HR Business Partner
(National)
Roger Fris, Territory Sales Manager, and Tahir
Rashid, Farm Supplies Sales Representative,
attending a client property in Western Australia.
46
8 Available online at investors.elderslimited.com/
investor-centre/?page=corporate-governance
Diversity strategy
We recognise that a diverse and inclusive workforce is critical to achieving our objective of attracting,
retaining and leveraging talent, and we are committed to providing a workplace that promotes equal
opportunity and an environment that is free from all forms of discrimination, including race, colour,
national extraction, social origin, age, marital status, family or carer responsibilities, sex or chosen
gender, sexual preference, religion and physical ability. Our Diversity and Inclusion Policy8 sets out the
key elements of a diverse organisation and the value derived from embedding diversity and inclusion
throughout our business.
Redressing gender imbalance continues to be the focus for our diversity program given the significant
gap of female representation in leadership positions across the agricultural industry.
This year, we surveyed our female employees to understand what we could implement to better support
gender equality and female career progression. We learnt that our female employees felt that while
progress had been made, further work is required. There is a strong interest from women in our workforce
to undertake higher level roles and being equally encouraged and supported to apply for roles was
highlighted as important.
WOMEN WORKING IN ELDERS SURVEY
337 responses (37% of our female workforce)
1,000 comments
Women Working in Elders survey results
Everyone at Elders is treated equally
regardless of gender
Males or females are both encouraged
to apply for higher positions
I would recommend Elders to other
females as a good place to work
Males and females work well together
at Elders
0%
10%
20%
30%
40%
50%
60%
70%
80%
90% 100%
Strongly favourable
Favourable
Neutral
Unfavourable
Strongly unfavourable
Following the results of our survey, we identified the following programs which will be implemented
over the next 12 months:
⋅ delivering a Future Leadership Program, which will comprise 50% women
⋅ unconscious bias training for regional management
⋅ the implementation of a gender de-coder for job advertisements
⋅ an internal pay equity review
⋅ the internal promotion of women in senior leadership roles to inspire other females in our workforce
to pursue leadership opportunities
Achievement against our Board approved measurable diversity objectives as at 30 September
is detailed in the table below.
Performance against our Board-approved measurable diversity objectives
Increase the representation of women in management positions
across the organisation to 25% by 30 September 2021
Maintain the pipeline of female team leaders above 25%
Increase the representation of women in Non-Executive
Director roles to 40% or more by 30 September 2021
Actual
Sept-18
Actual
Sept-19
Actual
Sept-20
12%
30%
40%
13%
31%
50%
15%
36%
50%
We report annually to the Workplace Gender Equality Agency outlining our workplace profile in accordance
with the Workplace Gender Equality Act 2012.
Elders2020 Annual Report Sustainability Report
47
Employee benefits and support
We offer the following benefits to our employees:
ACCESS TO THE EMPLOYEE SHARE PLAN
Employees can salary sacrifice to acquire
shares in Elders.
SERVICE RECOGNITION
Employees are recognised for reaching service
milestones and provided monetary rewards,
gift cards and acknowledgements.
EMPLOYEE REFERRAL PROGRAM
Employees referring a candidate who
successfully gains employment with Elders
are entitled to an incentive payment.
SHORT-TERM INCENTIVES
Eligible employees can share in Elders’
success when financial targets are met.
Short-Term Incentives are awarded to
high-performing employees.
ACCESS TO A RANGE OF CORPORATE DISCOUNTS
Employees can access discounts on clothing
retailers, health, motor and home insurance,
vehicle rentals and purchases, travel and IT.
FLEXIBLE WORKING POLICY
Eligible employees can negotiate changes to
their work hours, patterns and locations to
support a healthy balance between personal
and professional commitments.
PURCHASED LEAVE
Employees can “purchase” additional periods of
paid leave through a salary sacrifice arrangement
over 12 months to reduce cost impacts.
STAFF FOUNDATION
Employees can contribute $2.50 per month to the
Staff Foundation with Elders matching every dollar.
The Foundation uses this money to gift financial
assistance to employees during times of hardship.
The Foundation has 1042 employee members and
paid $31,000 to employees this reporting period.
PAID PARENTAL LEAVE
Both male and female, primary and secondary
carers who have worked for Elders for at least
12 continuous months and are permanent
employees are entitled to paid parental leave.
Elders Deniliquin Branch Manager Clyde
McKenzie, receiving a certificate of recognition
for 40 years of service from Lachlan Boyd,
Area Manager Albury – NSW
Supporting our leavers
Our focus on culture fosters long-lasting
friendships with employees, current and retired.
The average length of service for our employees
is eight years, and as at 30 September 2020,
188 of our employees have served us for more
than 20 years.
The Elders Past Employees Association (EPEA) is
a group of 286 past employees whose objectives
are to create and promote a spirit of friendship
and goodwill amongst members. Elders provides
monetary and in-kind support to the EPEA to
support their gatherings.
Elders also funds confidential external
career support to employees who experience
retrenchment, including confidential career
coaching and assistance in securing another role.
48
Environmental
Performance
and Regulation
RETAIL AND WHOLESALE OPERATIONS
Elders’ retail and wholesale operations are subject
to state environmental regulations relating to the
storage, handling, transport and sale of dangerous
goods, which include some of the agricultural
chemicals, fertilisers and poisons we supply.
Although these regulations are based on nationally
recognised standards, the regulatory environment
for the transporting, handling, storage, sale and
use of such dangerous goods, chemicals and
scheduled poisons is complex and subject to
regulations imposed by each state and territory.
Elders monitors compliance with these regulations
through its internal branch audit program. In
addition, many of Elders’ branches and personnel
participate in an accreditation, training and audit
program operated by AgSafe. These assurance
activities are being progressively rolled out to our
wholesale operations as COVID-19 related social
distancing and travel restrictions ease.
In August 2020, an Elders vehicle towing a trailer
carrying a Class 9 dangerous good was involved
in an accident causing the loss of contents of
the product to the road and roadside in Innisfail,
Queensland. The Department of Environment and
Science (Queensland) issued a Clean Up Notice
to Elders Rural Services Australia Limited and the
third party engaged by Elders to assist with the
incident management and clean up. Elders and that
third party are working closely together to meet the
requirements of the Clean Up Notice, including the
development and implementation of a Monitoring
Program and an Environmental Management Plan.
Elders is not aware of any other breaches of
environmental regulations affecting Elders’ retail
or wholesale operations that were reported during
the year ended 30 September 2020 or to the date
of this report.
Recognising the
support that nature
provides for our
operations and the
operations of our
agribusiness clients,
we are committed to
looking after our land
and managing our
environmental impacts.
This requires us to stay up to date
with the environmental legislation
and regulations which apply to our
businesses (as they vary between
states, territories, local authorities
and various regulators), and to take
responsibility for the waste produced
in our operations and supply chains.
Environmental Regulation
Compliance with relevant legislation
is managed on the ground by our
branches, and is overseen and
guided by our SREBPs. Environmental
risks and hazards are managed
in accordance with our Resilience
Framework (outlined in greater detail
on page 63 and in our Corporate
Governance Statement)9, with key
risks and incidents communicated
between key operational personnel,
Senior Management, the Executive
and the Board.
Our performance in relation to
environmental management and the
various applicable environmental
regulations across our various
businesses over the reporting period
is as follows.
9 Available online at investors.elderslimited.com/
investorcentre/?page=annual-reports
KILLARA FEEDLOT
Elders operates its beef cattle feedlot, Killara
Feedlot in Quirindi, New South Wales. Killara
is subject to both state and local government
environmental legislation, and its operation is
conditional on it maintaining its environment
protection and water licences.
In accordance with its environment protection
licence (EP Licence), Killara is required to
undertake a significant number of environmental
management activities to ensure that it is
managing its waste, dust and odour emissions to
minimise pollution of the surrounding community
and to avoid groundwater and soil contamination.
Failure to manage these emissions can affect the
amenity of the local community and contaminate
private and public property.
Emissions are monitored internally by Killara, and
externally by the New South Wales Environment
Protection Authority (NSW EPA) and the National
Pollutant Inventory (NPI). Killara submits NPI
reports to the NPI detailing emissions of NPI
substances (including ammonia, carbon monoxide
and oxides of nitrogen) and activities Killara
has participated in to reduce these emissions.
Killara also submits annual reports to the New
South Wales EPA describing (amongst other
things) any pollution complaints received in the
reporting year. These reports are prepared by an
external consultant. No breaches of environmental
regulations or pollution complaints affecting Killara
were reported during the reporting period.
Killara’s performance on the management of its
water consumption and discharge is detailed on
page 55 of this report, while its performance on
waste management is detailed on page 49.
SALEYARDS
Saleyards are subject to various state, territory
and local government environmental legislation
and regulations, particularly relating to effluent
management, dust and noise. These obligations
vary from state to state and generally only apply to
saleyards above a prescribed size. Elders expects
its saleyard operations, irrespective of their size,
to abide by the applicable laws and regulations.
No breaches of environmental regulations
affecting Elders’ saleyards were reported during
the year ended 30 September 2020 or to the date
of this report.
Elders2020 Annual Report Sustainability Report
49
Waste Management
Waste is mainly produced in our operations
and supply chain from:
⋅ the packaging of the goods we supply
in our stores
⋅ livestock, including organic waste produced
by cattle at our Killara Feedlot
Elders pays voluntary levies to drumMUSTER
to ensure that chemical containers for its own
branded products are eligible for recycling. Several
Ace Ohlsson sites also facilitate the collection of
used chemical drums.
25,000 drums collected for drumMUSTER
by Ace Ohlsson11
⋅ paper printing
Over $330,000 paid to drumMUSTER
The majority of the pallets used throughout the
Elders network for transporting the goods we sell
to our customers are reused.
CATTLE AT KILLARA FEEDLOT
Killara maintains records of all manure harvested
from pens and applied to nominated utilisation
areas, which are selected based on advice from
agronomists who conduct regular soil testing
before any nutrients are applied.
Organic waste generated is otherwise composted
on-site at the feedlot for use in the paddocks,
and excess manure is sold to a third party for
processing and retail distribution. Up to 24,400
tonnes of manure are sold each year, generating
an additional income stream for the business.
PAPER
This year Elders began work on improving its
systems and processes to reduce paper waste
within its branches, with an aim to eliminate
unnecessary printing throughout our operations.
A progressive reduction of waste is expected over
the next five years as Elders undergoes a major
modernisation of its IT and data platforms.
Over the next reporting period, we will be engaging
with our network and suppliers to develop a
strategy for measuring the weight and composition
of the waste we generate. This will enable us to
better monitor waste generation and accurately
report on our performance. Given the large
geographic spread of our operations, with many
of our locations operating in rural and remote
areas and engaging with several local waste
disposal suppliers, obtaining comprehensive data
to enable us and our stakeholders to monitor and
track our performance will take some time. In the
meantime, we will continue developing initiatives
to reduce waste generation.
The initiatives which we currently have in place
to manage waste produced from the above
streams are as follows.
PACKAGING
Most of the agricultural chemicals produced under
our own brands (Titan AG, Apparent, Independents
Own, Pastoral AG and Benchmark) are produced in
recyclable containers.
Elders’ branches also sell recyclable and reusable
intermediate bulk containers (IBCs) and chemical
drums for packaging and transporting agricultural
chemicals manufactured by other suppliers.
Many of our branches collect empty IBCs and
chemical drums from customers for cleaning and
re-distribution. Eligible chemical drums can also
be provided directly to drumMUSTER10 for recycling
or safe disposal.
42,600 IBCs and chemical drums collected
by branches and diverted from landfill
10 drumMUSTER collects and recycles farming
chemical containers across rural Australia.
11 Since becoming a drumMUSTER collection site.
Yearly collections will be tracked for future
reports.
50
Climate Change
Australia’s changing
climate presents
systemic challenges to
the agricultural sector
and our clients and
farming activities.
Hotter and drier conditions, prolonged
droughts and more extreme weather
events have profound effects on
farmers, associated businesses, the
communities in which we operate
and Australia’s economy more
broadly. Our role as a provider of
products and services to Australian
primary producers places us at risk
to both direct and indirect effects of
climate change. As a valued partner
of the agriculture sector, we have an
important role to play in contributing
to the sector’s resilience and helping
develop technologies to assist with
emissions mitigation and climate
change adaptation.
All Australian states and territories
have committed to achieving net
zero carbon emissions by 2050.
Additionally, Meat and Livestock
Australia (MLA) are driving the
low carbon transition with their
aspirational target of achieving
net zero by 2030. As a trusted
voice within the agriculture
community, we consider it vital
to demonstrate leadership by
maximising the sustainability of
our operations and minimising
adverse environmental impacts.
12 The risks noted are not exhaustive and are in no
particular order. Elders is presently undertaking
further work to identify climate related risks
and opportunities (see page 51 of this report).
13 See page 53 of this report.
14 See page 55 of this report.
15 See page 42 of this report.
16 Available through our Investor Centre at
investors.elderslimited.com/investor-centre/.
During the reporting period, we took steps to enhance our management of our direct and indirect
climate-related risks, including expanding our in-house expertise with the appointment of a dedicated
Sustainability Manager and Sustainability Co-ordinator.
To increase transparency with our stakeholders and investors, and to bring a spotlight on what Elders
is contributing in this space, the Board has set a target of fully aligning our disclosure of climate-related
risks with the TCFD Recommendations by 30 September 2023, in alignment with the completion of our
third Eight Point Plan. The TCFD Recommendations form the preferred climate disclosure framework of the
Australian Securities and Investments Commission (ASIC) and the Australian Securities Exchange (ASX).
They are structured around four core elements (governance, strategy, risk management and metrics and
targets) and ultimately demonstrate our Board’s consideration and oversight of climate issues and Elders’
progress in managing climate-related risks and opportunities.
Climate change risk management
During the reporting period our focus has been on aligning our corporate governance and risk
management procedures to fully capture climate-related risks and lay the foundations for undertaking
a robust risk assessment process.
Elders considers climate change to be a material business risk with potential impacts on our economic,
environmental, and social sustainability. Both the operational and strategic risks posed by climate change
are captured under our current governance, risk management and resilience frameworks.
CLIMATE CHANGE RISKS12
Some of the material risks impacted by climate change and presently captured within our enterprise
risk register are detailed in the table below.
Climate related risks and impacts
Risk
TCFD risk
category
Severe weather
events
Physical
– Acute
Climate related impact
Present strategy
The magnitude and frequency of severe
weather events may be increased by
climate change. Severe weather events
such as frost, drought, flood and fire can
influence the supply of and demand for
rural products and services provided by
Elders in affected areas
Diversification of our geographical
operation, product and service
range and maintenance of robust
incident response and business
continuity systems13
Water
availability for
Killara Feedlot
Physical
– Chronic
The increased likelihood and length of
drought or dry conditions may affect
Elders’ ability to access enough water
to sustain operations at Killara Feedlot
Water consumption monitoring,
appropriate water licence
maintenance and efficient irrigation
practices14
Health and
safety
Physical
– Chronic
Increased frequency and severity of
extreme heat days caused by climate
change may increase the likelihood of
health and safety risks, including those
relating to sun exposure and mental health
Maintenance and ongoing
review of our Work Health Safety
Management System15
Full details on how Elders manages risks (including climate related risks) can be found on page 63
of this report, and within our Corporate Governance Statement and Audit, Risk and Compliance
Committee Charter.16
Elders2020 Annual Report Sustainability Report
51
Next steps
We are currently undertaking stakeholder consultations, an independent review, and internal workshops to identify further specific climate-related
risks and opportunities for our business, determine their materiality and conduct qualitative impact assessments, which will be used to inform and
evaluate our approach to managing climate change, severe weather and water related risks. We will continue to build upon this work with a view to
disclose the outcomes in FY21.
To achieve full alignment with the TCFD Recommendations will require a staged approach. Our current achievements and short to medium-term
objectives are detailed in the table below. Our staged action plan is intended to provide a clear structure enabling Elders to attain the highest
standard of disclosure for decision-useful climate-related information in as short a timeframe as possible.
Elders’ staged action plan for full alignment with the TCFD Recommendations by 30 September 2023
Governance
Risk Management
Strategy
Metrics & Targets
Achievements
in FY20
Comprehensive disclosure of our
climate-risk management process,
roles and responsibilities.
Initiated internal and independent
review of climate-related risks and
opportunities.
Detailed the role risk plays
in our decision making.
Reported our Scope 1 and 2
emissions from energy use and
feedlot cattle.
Ambitions
for FY21
Ambitions
for FY22
Ambitions
for FY23
Identify climate-related
opportunities and associated
time horizons.
Report our Scope 1 emissions
from feedlot waste and fertiliser
management.
Detail our climate-risk assessment
methodology.
Disclose additional climate-
related risks and current
mitigation actions. Develop
further mitigation strategies
if needed.
Qualitatively assess future
climate-related risks and
impacts using appropriate
climate scenarios.
Disclose impacts of, and
business resilience to, climate-
related risks and opportunities
including commentary on financial
implications under each scenario.
Develop our Scope 3 emissions
profile and set climate related
targets and metrics.
Report on performance
against targets.
52
Energy and
Emissions
Energy is essential
to our business
and understanding
how it is used and
the associated
greenhouse gas
emissions produced
is key to reducing our
organisation’s impact
on the environment
and ensuring our ability
to transition to a low
carbon economy.
Energy and greenhouse
gas emissions
We emit greenhouse gas emissions
both directly and indirectly through the
consumption of energy in the form of:
⋅ electricity, which is used to
power our worksites
⋅ fuel (primarily petrol and diesel)
which is used to power our fleet
vehicles and machinery
Our energy consumption is managed
locally by our employees, while
contracts with our energy retailers
are managed centrally by our Indirect
Procurement and Fleet teams. These
teams monitor overall consumption
and costs, and together with our
Sustainability team, engage with
independent third parties to
assist with:
⋅ determining our energy usage
⋅ calculating our carbon footprint
This data is reviewed periodically
to identify opportunities for energy
and cost savings.
During the reporting period, we consumed 268,103GJ of energy, comprising 42,711GJ of electricity and
225,392GJ of fuel. This resulted in the production of 25,102 tonnes of Scope 1 and 2 carbon dioxide
equivalent. Further information on our energy and emissions is contained in the performance tables
on page 67.
EMISSIONS FROM LIVESTOCK
Calculating the entire carbon footprint of an agricultural operation is not a simple process. Enteric
fermentation by livestock, the practice of applying fertiliser and waste to soil, manure and effluent
management all produce greenhouse gas emissions. Conversely, minimum till farming practices (which
many Australian operations, including Killara Feedlot, use to better manage available moisture in soil)
are understood to increase soil carbon sequestration, reduce N2O emissions (as a result of a reduction
in nutrient run-off) and reduce scope 3 emissions from the manufacture of fertiliser.
Cattle at Killara Feedlot produced approximately 35,951 tonnes of carbon dioxide equivalent through
enteric fermentation during the reporting period. Emissions were calculated using the Greenhouse Gas
Accounting Framework for Feedlots, produced by the University of Melbourne and based on the Australian
National Greenhouse Gas Inventory methodology. They do not account for effluent and fertiliser management
practices, or sequestered carbon from minimum till farming practices at the feedlot. We will aim to account
for those practices in future reports. In the meantime, we are actively involved in industry research focused
on increased productivity with lower emissions through genetic evaluation and feed supplements.
Reducing energy use and emissions
As we continue to develop our sustainability program, we are exploring initiatives to improve on
energy efficiency and the calculation and reduction of emissions across our organisation and the
agriculture industry.
Within our own operations, we are investigating new technology and opportunities to improve the
energy efficiency of our branches and to increase the share of renewable energy into our energy mix.
This includes the introduction of sustainable driving tips into our monthly communication to our fleet
drivers, the trialling of hybrid vehicles in our fleet, our program to upgrade lighting in our facilities to
LED lighting and the installation of solar panel systems at several sites.
Within the agriculture industry, we have been working with Agrimix Pastures in developing more
sustainable livestock production systems through supporting research and the commercial extension
of the benefits of Desmanthus, a summer growing legume which, when incorporated into beef cattle
feed, has been shown to reduce methane emissions from enteric fermentation.
We have also conducted trials on large commercial plots and microplots of Lantern Forage Sorghum –
a plant variety with a unique sugar matrix which is capable of being used in bioethanol production. Our
latest data shows that Lantern improves the efficiency and productivity of livestock feed systems by 30%
due to the higher metaboliseable energy levels, whilst also providing improved carbon capture and store
opportunities for producers.
Elders2020 Annual Report Sustainability Report
53
Severe Weather
Severe weather events
such as frost, drought,
flood and fire can affect
the productivity of our
agribusiness customers
and in turn, increase
the variability of Elders’
financial performance.
As a result, we manage severe weather
events as a material business risk in
accordance with our risk management
and resilience frameworks.17
Given Australia’s vast and diverse
landscape, variability due to severe
weather events rarely occurs across
multiple regions at the same time. By
maintaining a geographical spread of
operations across the country and a
diverse product and service range, the
negative impacts of severe weather
events on our organisation are limited
and mitigated.
On some occasions, they can generate an impact on Elders’ financial performance, as demonstrated
over the early months of this reporting period. Drought conditions which continued to impact regions in
Queensland and New South Wales in the beginning of 2020 (resulting in a lower demand for agricultural
inputs such as fertiliser and seed in those areas) did not materially impact Elders’ full year performance
given its presence and ability to serve customers in other unaffected agricultural regions in Australia
across the financial year.
The impacts of severe weather events on Elders’ financial performance are further mitigated due to
Elders being a supplier of the inputs, equipment and services our farmers require to operate through,
and recover from, severe weather events. To assist our customers with managing their agribusiness
through events like drought, excessive rain, flooding, fire and heatwaves, Elders:
⋅ supports clients in managing their productivity through our network of agronomists
and livestock agents
⋅ provides access to technology which supports the efficient distribution of water,
nutrients and chemicals (see page 58 of this report)
⋅ supplies crop protection products and herbicides to manage weeds and pest infestation
⋅ supplies general merchandise and equipment required on farm, such as fence posts, personal
protective equipment, shade cloths, irrigation equipment, tanks, troughs and fire pumps
⋅ facilitates the sale and purchase of water through Elders Water Trading
Our approach to managing severe weather risks will be evaluated and further developed as we
continue to investigate and develop our response to climate-related risks and opportunities.
AUSTRALIAN BUSHFIRES: SUMMER 19/20
Australia’s last summer was a record year for bushfires in Australia, which saw the devastation of
communities and destruction of wildlife as millions of hectares of land across Australia burned.
While none of Elders’ branches were directly impacted, several agribusiness customers were.
Elders’ network supported those impacted by offering assessments of injured livestock and sourcing feed,
transport and agistment options. Elders also introduced its Bushfire Assistance Facility, offering deferred
payment and interest free finance terms to existing and eligible customers affected by the fires.
Other actions Elders took included:
⋅ donating $100,000 to the Foundation for Rural and Regional Renewal, supporting its mission of ensuring
that fire affected communities can access the support they need in the medium and long-term
⋅ local fundraising efforts, with branches in Victoria and Tasmania collectively raising over $33,000
⋅ launching our Employee Volunteering Program, ensuring employees are eligible for paid volunteering leave
to assist where they feel it is needed. Volunteering time this year was unfortunately impacted by social
distancing restrictions associated with COVID-19, but several staff were able to volunteer for BlazeAid
and contribute to rebuild efforts in the Adelaide Hills and on Kangaroo Island
⋅ working with Beyond the Bricks, raising funds for charities working to assist in bushfire affected regions
17 See page 63 of this report
54
Sustainable
Farming
With our global
population expected
to grow to 9.7 billion
people by 205018 and
increasing pressure
to minimise the
environmental impacts
of agriculture and
improve the climate-
related resilience
of Australian food
production, Elders
has an opportunity
to tailor its product
and service offering
to better support
farmer productivity
and efficiency.
Three major environmental issues
the agriculture industry in Australia
faces are:
⋅ climate change (discussed
on page 50 of this report)
⋅ water availability
⋅ soil health
Water availability
The Australian climate has always involved
an element of volatility and hot, dry summers,
but climate change is projected to increase the
frequency and intensity of extreme heat and
periods of drought. With water availability already
an issue that many farmers address, finding
opportunities to improve water use efficiency
and ensuring the sustainability of shared water
sources is directly linked to the sustainability
of the agriculture industry.
Elders recognises that the availability of water
can have a significant impact on its operations
and performance in the following ways:
⋅ directly: Killara Feedlot requires water
for its paddocks, animals and facilities
⋅ indirectly: Water availability impacts the
productivity of Elders’ grower customers,
which in turn increases the variability of
Elders’ sales of agricultural inputs
Elders supports research and development into
water efficient plant varieties and technology which
enables efficient crop irrigation. More information
on these initiatives is on page 58 of this report.
Through Elders Water Trading, our water brokers
assist clients in buying, selling and leasing water
entitlements and allocations, supporting them
in the development of strategies to ensure the
security of their irrigation practices. Our water
brokers have expertise in a number of different
Australian water trading schemes and regions
and assist customers in sourcing and selling water
as permitted by the rules of their relevant water
authority and water licence. Different authorities
in each State regulate the trade and usage of
water through State-based legislation.
Soil health
Healthy soil influences environmental health
by improving water quality and protecting
biodiversity. Healthy soil is also imperative to
supporting agricultural production, the efficient
use of agricultural inputs and the sequestration
of carbon from the Earth’s atmosphere. No-till
farming is understood to optimise soil health,
and the proportion of Australian grain growers
using no-till farming is high,19 however, further
development, innovation and soil monitoring will
be vital to sustain production and take action
against climate change.
Elders’ network of agronomists and Thomas
Elder Consultants support more than 6,000 clients
across Australia in managing the productivity of
their farms, providing advice to clients on crop
rotation, pest and disease management and soil
health, facilitating up to 9,000 soil tests every year.
We also provide technical advisory services to
clients who are aiming to reduce their carbon
footprint and sequester carbon in their soil. Carbon
Farming Advisory Services are being piloted to
facilitate on farm practice change and registration
of carbon farming projects with the Federal
Government’s Clean Energy Regulator. As always,
we are working closely with our clients to ensure
this service offering meets their needs and truly
benefits their farming enterprise.
18 United Nations Department of Economic and
Social Affairs, 2019, Growing at a slower pace,
world population is expected to reach 9.7
billion in 2050 and could peak at nearly 11
billion around 2100, United Nations, viewed
23 July 2020,
19 Llewellyn R, D’Emden F, 2010, ‘Adoption of
No-tillage Cropping Practices in Australian
Grain Growing Regions’, Grains Research and
Development Corporation, viewed 3 November
2020 .
Elders2020 Annual Report Sustainability Report
55
WATER AND KILLARA FEEDLOT
Killara Feedlot water usage
345ML
Withdrawn from
groundwater20
259ML
Consumed at the
feedlot21
86ML
Consumed through
irrigation22
40ML
Discharged to effluent
utilisation areas (EUAs)23
Overflow events: Zero
While Elders itself is not an intensive consumer of water across its operations, we recognise the importance
of understanding our own water consumption and managing use and discharge, particularly at our Killara
Feedlot. Killara obtains water for use at the feedlot and surrounding paddocks from rainfall and groundwater.
Groundwater consumption
Killara’s consumption of groundwater is limited by its water licence (issued by Water NSW), which
authorised a withdrawal of 564.2ML from July 2019 to June 2020, and 806ML from July 2020 to June
2021. Killara is prohibited from drawing water in excess of its allocated amount.
This year, north-west New South Wales (where Killara is located) continued to experience drought
conditions, requiring Killara to continue to manage its water use efficiently. A review of Killara’s approach
to managing water use resulted in the investment in the installation of a centre pivot irrigation system,
completed in October 2020. This new infrastructure will enable Killara to reduce its water use by up to
40% in future summer cropping seasons through the automation and control of even water dispersal.
Killara has historically used flood irrigation techniques to water the crops grown to feed cattle.
Rainwater run-off
Killara’s practices and infrastructure have been developed to capture rainwater and prevent it from escaping
into the surrounding environment. Given the operations of the feedlot, rainwater falling onto the facilities
can be contaminated by the waste produced by cattle, and an overflow of contaminated water into the
surrounding environment could adversely impact other water resources and soil quality.
The entire feedlot is bunded and all rainwater run-off is diverted to effluent holding ponds. The ponds are
regularly maintained, with effluent mixed with water before being redistributed to Killara’s nominated EUAs,
providing fertiliser and moisture to support the growth of food fed to the cattle on site. Strip cropping on the
farmland surrounding the feedlot is an additional initiative to prevent effluent from reaching nearby water
sources in the event of an overflow. Groundwater and soil quality are regularly tested at several monitoring
points for nutrient contamination, and effluent quality is monitored at EUAs, discharge points and holding
ponds. Elements such as calcium, nitrogen, potassium and sodium are all monitored to ensure nutrient
levels are maintained in accordance with the requirements of the NSW EPA.
Elders Killara Feedlot
20 Usage in last water year, being 1 July 2019
to 30 June 2020.
21 Usage in last water year, being 1 July 2019
to 30 June 2020.
22 Usage in last water year, being 1 July 2019
to 30 June 2020.
23 Discharge in NSW EPA reporting period,
being 1 June 2019 to 31 May 2020. EUAs
are designated areas in Killara’s paddocks
identified by agronomists through soil testing
where appropriate nutrient levels allow for
effluent dispersal. Nutrient levels are monitored
by the NSW EPA.
56
Animal Welfare
ZERO TOLERANCE PRACTICES
The following ‘zero tolerance’ practices (as they
relate to animal welfare) are prohibited for all
Workers that handle animals as part of their duties:
⋅ castrating livestock
⋅ dehorning cattle
⋅ mouthing or tagging cattle without
a fully operational crush
⋅ removing spare teats
⋅ using electric prodders
Our Workers are also prohibited from carrying
out the following animal health activities alone;
dipping, drenching, vaccinating, fire and freeze
branding, shearing, crutching, mulesing, pregnancy
testing and implanting. Elders employees are only
permitted to assist a qualified person with these
activities.
We recognise that animals which are suffering
from distress, disease or injury and cannot be
reasonably treated must be put down promptly,
safely and humanely – the primary consideration
being to prevent the animal from suffering further
pain or distress. Humane destruction of livestock
is the responsibility of the owner of the livestock,
or at saleyards, the relevant State Government
Inspectors of Stock (for example, PIRSA) or an
external authorised contractor.
With 278 staff
and contractors
directly working
with livestock,24
we recognise our
responsibility to ensure
we look after the
animals in our care.
This is one of our key sustainability
principles. The way we treat animals
can impact our reputation and the
relationships we have with our
suppliers and customers.
Our commitment to the humane and
considerate treatment of livestock is
set out in our Livestock Handling and
Animal Welfare Policy.25 Our staff are
also guided by our Livestock Handling
Guide and industry standards, and are
required to comply with all local laws
and regulations relating to handling
animals. Employees dealing with
livestock as part of their roles receive
regular livestock handling training.
Elders is not aware of any incidents
of non-compliance with laws or
regulations relating to animal welfare
during the reporting period.
Interaction with animals
Elders mainly interacts with livestock
in the following ways:
⋅ at Killara Feedlot, where cattle are
unloaded, grown and transported to
customers for processing
⋅ through our livestock agency business,
where our agents assist clients in buying and
selling livestock privately and at saleyards
We also assist clients in managing animal
health and production through our livestock
production advisors.
The standards set out in our Livestock Handling
and Animal Welfare Policy and Livestock Handling
Guide apply to all of our interactions with livestock.
Workers are required to report any instances where
these standards have not been followed or any
incidents have occurred.
TRANSPORTING LIVESTOCK
Following the divestment of our Live Export
business in 2016, Elders is no longer involved in
live export logistics and does not export cattle
internationally live from its Killara Feedlot. We do,
however, assist our clients to ensure the safe live
transport of their own livestock, domestically and
internationally.
Our Workers are required to ensure that
animals are loaded for transport and unloaded
with minimal stress at all times. As part of Elders’
effort to minimise stress to livestock, our Workers
are directed to:
⋅ use accredited TruckSafe carriers
where possible
⋅ inspect livestock prior to transport
to ensure their fitness to travel
⋅ supervise the loading and unloading of livestock
⋅ monitor the condition of the livestock and
respond as required to any distressed
or unfit animals
24 Elders generally only interacts with sheep and
cattle as part of its agency, feed and processing
businesses.
25 This is currently being updated and will made
available on our website in due course.
Elders2020 Annual Report Sustainability Report
57
Killara only provides veterinary medicines
(including antibiotics and anti-inflammatory
treatments) to cattle when required to maintain
their health and welfare. Only medicines which
have been approved for use by the APVMA are
used. Hormone growth promoters are selectively
used on approval by Killara’s customers, with a
downward trend in use observed over the last
five years. Anaesthetics can only be provided by
an accredited veterinarian. All cattle processed
through Killara Feedlot are tracked through the
NLIS system to ensure integrity to the value chain,
and animals treated with veterinary medicines are
isolated until the medicine withholding period has
elapsed to ensure the safety of meat produced
from the cattle.
Killara maintains the following accreditations
which are conditional on it maintaining strict
animal welfare standards:
⋅ The National Feedlot Accreditation Scheme,
which undertakes independent audits
and quality assurance on animal welfare.
Requirements of accreditation include having
approved Risk Assessment Programs for
livestock, Excessive Heat Load Action Plans
and Quality Assurance Officers on site
⋅ Livestock Production Assurance, which
provides assurance of on-farm practices and
maintains records of livestock history, location,
disease and injuries sustained for each animal
on a central database
⋅ Meat Standards Australia, which requires
feedlots to follow strict feeding and animal
welfare practices to enable livestock to achieve
a higher MSA grading after processing
⋅ The European Union Cattle Accreditation
Scheme – High Quality Beef, which requires
full traceability and identification of animals
BOVINE RESPIRATORY DISEASE
DIAGNOSTICS PROJECT
Bovine Respiratory Disease (BRD)
is the most significant animal
health issue for feedlot cattle
globally and is the most common
cause of cattle illness and death.
Killara Feedlot is the host for
a world-first research project
initiated by Meat and Livestock
Australia in conjunction with
Quirindi Feedlot Services and
supported by Apiam Animal
Health, the Australian Lot
Feeders Association Research
and Development Committee and
other national and international
researchers and stakeholders. This
project has received international
recognition as it analyses different
methods of early detection for BRD
and the commercial application of
these methods into feed yards.
The anticipated outcome of this
project is the early detection
of BRD, which will result in
the prompt and cost-effective
treatment of cattle, decreased
animal mortality and improved
animal health and welfare.
Animal welfare at Killara Feedlot
During the reporting period, Killara processed
65,148 head of beef cattle comprising
approximately 85% Angus/Angus cross, 10%
Bos Taurus non Angus and 5% Bos Indicus cross
Bos Taurus. Cattle are housed on the feedlot in
pens which are constructed with a gravel base
and soft topsoil for animal comfort. All pens
are cleaned regularly and have shaded areas
to mitigate the risk of heat-stress.
Cattle that are destined for the feedlot are
screened before transportation to prevent the
movement of unwell or pregnant animals. Staff
also perform health checks on cattle on arrival.
Only reputable and accredited carriers are
engaged for transporting livestock.
Veterinarians inspect cattle at the feedlot every
month and additional animal health audits are
conducted by qualified staff every six months.
These audits review Killara’s infrastructure and
approach to animal treatment, handling and
training. Killara also engages with external animal
welfare trainers at least four times a year for
training on low stress handling techniques.
Any animals found to be sick or injured on the
feedlot are treated with the objective of full
recovery and a return to the animal’s home
pen as soon as possible.
Killara Feedlot Animal Welfare Protocol
Sick/injured animal is identified
by trained staff and veterinarian
Animal is taken to on-site hospital
Illness/injury and veterinarian-approved
treatment plan is implemented
Animal is monitored during recovery
Recovered animal returns home to pen
58
Innovation and
Technology
Our ability to provide
our customers with the
goods and services
they need is critical
to our economic
sustainability. In a
constantly changing
and challenging
environment, this
requires investment
in and the delivery of
innovative technology,
and a continual
assessment of the
platforms we provide
to ensure that they are
delivering value for our
customers.
Supporting AgTech
We believe that investing in and supporting
AgTech is key to helping our customers unlock
sustainable farming practices. A major component
of our third Eight Point Plan is the modernisation
of our IT and data platforms to drive efficiency,
improve customer experience and better
accommodate change. This will support us in
implementing new ways to support our clients
and customers to ensure their continued and
long-term productivity and profitability.
Elders was a platinum partner of evokeAg this year,
the largest agri-food tech event in the Asia Pacific,
which sees national and international speakers
highlighting new technologies and markets. Elders
was also the platinum sponsor of the inaugural
AdvanceAg conference in Adelaide, which gave
producers and innovators in South Australia
the opportunity to share and highlight AgTech
advancements in Australia.
This reporting period we partnered with
the following AgTech providers which assist
farmers with:
⋅ farm management: AgriWebb, AgWorld,
Proagrica and Tie Up Farming
⋅ irrigation and nutrient management:
Swan Systems
⋅ remote sensing and monitoring: AgIntel,
Hummingbird Technologies
⋅ on-farm connectivity, sensors and monitoring:
Farmbot, Goanna Ag and Sentek
⋅ remote livestock weighing: Opti-Weigh
We will continue to support the development and
commercialisation of emerging technologies within
the agricultural industry through partnerships
with AgTech providers, research and development
through the Thomas Elder Institute, product
development through Titan AG and Hunter River
Company and the delivery of agricultural advisory
services through our network of agronomists and
Thomas Elder Consulting.
INTRODUCING GENOMICS
This year we partnered with Neogen
to commercialise a genomics test for
commercial cattle and sheep. This testing
involves measuring the actual expression of
genes known to be associated with certain
production traits. Previously, genomics testing
has only ever been able to be performed by
stud breeding.
The testing is aimed at identifying optimal
production traits in commercial cattle and
sheep to enable informed livestock production
and maximise overall grower productivity.
MACHINE LEARNING
AND CROP MANAGEMENT
Thomas Elder Institute has partnered with
several stakeholders on a research project
which aims to discover the underlying
relationships between climate, crop and soil
factors that cause variability in crop growth
and yield using machine-learning methods
and simulations. Ambitions for this project
are the development of a web-based tool that
will enable growers to utilise their crop and
soil variability mapping to investigate the
underlying causes of spatial and temporal
variation to better inform in-crop management.
This technology will be able to be used to
assist clients with more accurate predictions
of crop performance and drive cost effective
management solutions.
Elders2020 Annual Report Sustainability Report
59
Research and Development
We proudly support agricultural industry research and development, recognising that the long-term
sustainability of the agriculture industry in Australia depends on innovation backed by science, trials
and the effective extension of findings to farmers.
Darren Pech, Senior Agronomist, with a client in Jamestown, South Australia
Research and development is managed by our Thomas Elder Institute and Elders Plant Genetics, while
Titan AG and Hunter River Company invest in research and trial work to support the manufacture and
commercialisation of their own agricultural chemicals and animal health products, of which 419 have been
registered with the APVMA. We also work with suppliers in researching and evaluating current products
and developing new products.
One of the biggest challenges which innovation of the agricultural industry faces is the extension of
findings from research and development activities to farmers. With Elders’ geographical spread and
customer reach, along with its reputation and standing in the industry and local community, we are in
a unique position to reach farmers with new practices and technology aimed at improving their
productivity and resilience.
Five Elders technology discovery sites demonstrating new crop genetics, chemistry and nutritional products
Some of our current research and development projects are highlighted throughout this report.
MEAT AND LIVESTOCK AUSTRALIA CO-INNOVATION PROJECT
The aim of this project is to increase the adoption of research and development in the livestock industry
and improve the information flow from MLA to producers (while at the same time increasing the depth
and breadth of Elders’ service offering) by surveying producers and regions in need of research and
development and running workshops on nutrition and genetics.
This three-year pilot project, which began in May 2018, involves 75 Elders agents and senior managers
based in Northern Australia.
60
STRUAN BEST PRACTICE FARM
In partnership with Primary Industries and Regions South Australia (PIRSA), Elders is using a research
farm based in Struan, South Australia as a “Best Practice Demonstration Farm” to demonstrate the use
of new technologies which aim to maximise production efficiency.
The farm is being run as a commercial wool, lamb, beef and cropping enterprise. Productivity and
profitability will be closely monitored and measured to demonstrate how investment in innovation
and upgrades can sustainably drive business improvement.
Currently, the farm is demonstrating the use of:
⋅ remote water monitoring of water tanks and troughs: This technology is proven to contribute to
animal welfare by supporting timely trough and tank refills, and savings in time and cost checking
on troughs and tanks on farm
⋅ soil moisture probes: These probes capture soil moisture levels on farm to support efficient
irrigation practices
⋅ irrigation scheduling: Timed irrigation has been demonstrated to maximise water use efficiency
by crops
⋅ remote livestock weighing: Remotely weighing livestock saves time and costs weighing animals
and improves animal welfare by minimising the instances of livestock handling
⋅ farm management software (AgriWebb): New software can be used to map entire farm enterprises
and allow the following to be recorded at an individual paddock level:
– farm infrastructure (fencing, gates, tanks and troughs)
– broadacre inputs (machinery work, fertiliser, seed and sprays)
– livestock inputs (the source of livestock, animal health procedures, supplementary feeding
and pasture availability)
This information can be used to trace animals, monitor agricultural inputs and generate reports
on production costs and productivity, which can in turn be used to refine production systems.
Ambitions for the Best Practice Demonstration Farm include the development of an interactive on-site
centre where members of the public can overview the farm, and the exploration of opportunities relating
to carbon farming.
Mark Allison, Chief Executive
Officer and Managing Director
of Elders Limited, and Tim
Whetstone, Former Minister for
Primary Industries and Regional
Development of South Australia,
at the Struan Farm launch.
Elders2020 Annual Report Sustainability Report
61
Governance
Our One Elders Values
set the tone of Elders’
culture from the top,
establishing the
behaviours we expect
from all our employees
and Directors, including
our Board.
Director skills, experience
and knowledge
The sustainability-related attributes we
specifically look for in our Board and executive
directors include experience in:
⋅ developing, implementing and monitoring
corporate governance
⋅ implementing and monitoring systems that
lead to improved organisational safety
outcomes and culture
⋅ financial accounting, reporting and budgeting
⋅ building workforce capability
⋅ overseeing risk mitigation strategies
⋅ managing fiduciary, environmental, health,
safety and social obligations
⋅ communicating with stakeholders and
connections with local communities within
which Elders operates
⋅ markets for one or more of our key business
units
Full details are available in our director skills
matrix, contained in our Corporate Governance
Statement.26
One Elders Values
Our One Elders Values are integral to the
way we do business.
The One Elders Values
INTEGRITY
Doing the right thing
ACCOUNTABILITY
Owning the outcome
TEAMWORK
Using the power of the pink shirt team
INNOVATION
Embracing new ideas
CUSTOMER
Partnering and adding value
These values, together with our Eight Point Plan,
our corporate governance and risk management
frameworks, underpin our key sustainability
principle of operating ethically and to the highest
standard. We recognise high-achieving employees
and teams whose performance demonstrate our
values through monthly awards and our annual
One Elders Awards, held each year in December.
This year we worked on completing our alignment
of our governance practices with the fourth edition
of the ASX Corporate Governance Principles.
Matthew Quinn joined Ian Wilton, Robyn Clubb
and Diana Eilert as a Non-Executive Director of
Elders, who together with our CEO, comprise
Elders’ Board. Our Board is structured to achieve
an appropriate balance of skills, experience and
knowledge to support the execution of Elders’
strategies and for the last three financial years,
we have met and maintained our Board approved
measurable diversity objective of increasing the
representation of women Non-Executive Director
roles to 40% or more.
26 Available online at investors.elderslimited.com/investor-
centre/?page=annual-reports
62
Sustainability management
This year we established our strategy, management and communication framework for sustainability,
which sees our Board overseeing all matters relating to Elders’ economic, environmental and social
sustainability. This framework is represented in the figure below.
Management and communication of sustainability topics
Elders Limited Board
⋅ Directs, reviews and approves sustainability strategy and Sustainability Report
⋅ Reviews and approves other sustainability-related disclosures
⋅ Engages with stakeholders on sustainability topics
Managing Director
and CEO
⋅ Directs, reviews and
approves sustainability
strategy and Sustainability
Report
⋅ Reviews and approves
other sustainability-related
disclosures
⋅ Engages with stakeholders
on sustainability topics
Board Work Health
and Safety
Committee
Board Audit, Risk
and Compliance
Committee
⋅ Oversees management
of work health and
safety
⋅ Ensures appropriate
work health and safety
policies, procedures and
systems are in place
⋅ Reviews and approves
sustainability strategy
and Sustainability
Report
⋅ Reviews operational
and strategic risks and
controls
Business
Improvement
Committee
⋅ Identifies and oversees
the implementation of
strategies and business
improvement initiatives
relating to sustainability
topics
Executive
Committee
Safety Steering
Committee
⋅ Monitors and reviews
the implementation of
our WHSMS
⋅ Reviews safety incidents
and ensures appropriate
processes and resources
are implemented
⋅ Identifies and considers
the implications of
material sustainability
topics
⋅ Reviews safety,
reputational, legal
and regulatory,
environmental, climate
change and financial
risks in business
development
opportunities
⋅ Communicates relevant
information to business
teams
Management Audit,
Risk and Compliance
Committee
⋅ Oversees Elders’
Resilience Policy
and Framework
⋅ Reviews, monitors
and approves Elders’
risk profile, including
controls and treatment
plans
Sustainability Team
Corporate Governance
⋅ Develops sustainability strategy and disclosures
⋅ Supports the business and management in sustainable
business improvement
⋅ Engages with stakeholders on sustainability topics
⋅ Maintains risk register (including climate change, specific
safety risks, market and employee risks, social licence
risks, severe weather risks and animal welfare risks)
⋅ Updates register based on quarterly risk reviews
Elders2020 Annual Report Sustainability Report
63
Sustainability is a standing item on the Business Improvement Committee agenda and material topics
are discussed at other internal Committee meetings periodically. Action items on material topics are
identified and agreed in Committee meetings and responsibility is delegated to relevant senior managers
and employees. Members of Elders’ Executive are ultimately responsible for the management of material
sustainability topics as they relate to their business unit. The Executive report directly to Elders’ Managing
Director and CEO and are supported by Elders’ Sustainability Team.
Our Board is primarily informed and engaged through meetings with the Managing Director and CEO,
the Company Secretary and its membership on the Audit, Risk & Compliance Committee and Work,
Health and Safety Committee. They are briefed regularly on Elders’ operations and on the industry,
technical and legislative issues which may impact our business, including those relating to economic,
environmental and social topics. They provide insights and direction to the business as required. Our
Directors also undertake training and development on an “as needs” basis.
Policies relating to our material sustainability topics are developed, reviewed and updated by senior
managers and are approved by the Management Audit Risk and Compliance Committee. Significant
policies (including our internal Delegation of Authority Policy) are also reviewed and approved by the
Board. The Board reviews and approves this Sustainability Report to ensure all material topics have
been addressed.
Further information about how Elders is governed, including the structure and operation of our Board
and governing committees, is available in our Corporate Governance Statement.27 Our most important
governance policies, including our Work Health and Safety Policy and Diversity and Inclusion Policy,
are available online.28
Risk management
We recognise that all elements of our business involve a degree of risk and believe that a robust risk
management system, integrated into our work culture, is key to ensuring those risks are managed
appropriately. Our internal Resilience Framework details the metrics and assessment criteria used to
evaluate risk. Our risk appetite is set by the Board and is based upon feedback from our Executive via
the Management Audit, Risk and Compliance Committee. We take a conservative view to risk accepting
minimal levels of uncertainty and exposure across five key areas: safety, reputation, legal and regulatory,
environmental, and financial.
The figure below illustrates the broad oversight of strategic and operational risks and the effective lines
of communication between the Board, Executive and Senior Management, and key operational personnel.
Elders’ operational and strategic risk oversight, management, communication and action process
Board Audit, Risk
and Compliance
Committee
Management Audit,
Risk and Compliance
Committee
Elders Limited Board
Elders Limited
Board oversight
Executive Committee
Strategic risk management
Management
oversight
Operational risk
management
Risk Owner
Control Owner
Risk Champion
The Executive Committee is management’s paramount decision-making forum with responsibility
for the development, review, implementation, and assessment of all critical business decisions. It
considers risk in making all decisions. Our Executive also monitor and review the operational and
strategic risk registers regularly in the Management Audit, Risk and Compliance Committee for
completeness, continued relevance and effectiveness of risk treatment actions, taking into
consideration current business conditions.
27 See investors.elderslimited.com/investor-
centre/?page=annual-reports
28 See investors.elderslimited.com/investor-
centre/?page=corporate-governance
64
29 Available at investors.elderslimited.com/
investor-centre/?page=annual-reports
Operational climate-related risks (such as extreme weather events and heat-related illnesses) and other
sustainability-related risks (such as animal welfare, health and safety and attracting and retaining staff)
are managed by the identified Risk Owner. Risk Owners are responsible for completing risk assessments,
determining the risk treatment strategy including the identification and delegation of controls, and the
setting and monitoring of key milestones, risk indicators and review dates.
Fundamentally, our risk management and resilience processes seek to ensure we are prepared and
capable of ensuring business continuity. Significant potential disruptions we assess include the loss
of key employees or a counterparty, a breakdown in supply-chains, a large-scale bio-security threat,
an extreme weather event such as a bushfire, long-term drought, major flood or severe storm, a
cyber-attack or loss of access to operational locations.
INCIDENT AND RISK ESCALATION
Where a Serious Risk or Incident is identified or occurs, workers are required to follow our incident escalation
process, displayed at all our branches. This involves the following steps:
⋅ a verbal report to a manager within one hour
⋅ a verbal report to a Safety, Risk and Environment Business Partner
⋅ reporting the risk or incident online
⋅ managers escalate the report through to our CEO within one hour
Moderate, major and severe risks must also be reported to the responsible General Manager, our Company
Secretary and the Board in accordance with our Resilience Framework.
For a summary of our material economic, environmental and social sustainability-related risks,
please see pages 20 to 21 of our Annual Report. Further information about how Elders manages business
risks is also available in our Corporate Governance Statement.29
COVID-19 RISK RESPONSE
Our response to COVID-19 has been guided by the following key principles:
⋅ keep our people and their families safe
⋅ keep our customers, contractors and other stakeholders safe
⋅ contribute to the national effort to contain the spread of COVID-19 and its impact
on the communities we operate in
⋅ maintain the continuity of our business operations
During COVID-19 our COVID-19 Response Committee, comprising Executives and Senior Management across
several business units, has met weekly (originally daily) to discuss work health and safety, confirmed or
suspected cases in our workforce, IT updates and issues regarding working from home, policy decisions
around travel, events and gatherings, human resourcing matters, internal and external communications,
financial impacts and modelling and business continuity planning.
Updates and guides have been regularly sent to our staff, who we also continue to engage with directly
through Microsoft Teams Live Events. We have also been issuing communications to our clients through
email, social media and through posters in our branches outlining our COVID-19 safety measures.
Elders2020 Annual Report Sustainability Report
65
Ethical dealing
Our Board is committed to promoting conduct and
behaviour that is honest, fair, legal and ethical
and respects the rights of Elders’ shareholders
and other stakeholders, including clients and
customers, suppliers, creditors and employees.
Cybersecurity
We take cybersecurity very seriously in an effort
to ensure all personal information is kept secure.
Our security policies are developed in line with
industry standards, prioritising the maintenance
of confidentiality and data integrity.
We have implemented a rigorous independent
security auditing regime to identify and address
any weaknesses in our systems and processes.
During the reporting period, Elders has reported
zero security breaches involving customer data. We
reported no outages to our internal systems from
security incidents, and over 98% of our security
incidents have been of medium to low priority.
Our Workers and managers are held accountable
by our One Elders Values and our Code of Conduct,
which are reviewed periodically to ensure they
remain relevant. Our culture of ethical conduct is
further enforced through our key ethical dealing
policies, including our Anti-Fraud and Anti-Bribery
and Corruption Policies.30 This year, in line with
our commitment to managing conflicts of interest
in our Code of Conduct, we plan to strengthen our
policy response to gifts from suppliers, prohibiting
staff from accepting gifts worth $250 or more.
We encourage all our stakeholders to report
any actual or suspected unacceptable conduct,
including fraud or illegal activity. Our Board has
adopted a Whistleblower Policy31 to encourage
and facilitate disclosure. The policy ensures the
protection of the anonymity of anyone who wishes
to make a report (regardless of their relationship
with Elders). Our Whistleblower telephone hotline
number, maintained to facilitate the reporting of
unacceptable conduct, is advertised on posters
in all of our locations.
30 Both available online at investors.elderslimited.
com/investor-centre/?page=corporate-
governance
31 Available online at investors.elderslimited.com/
investor-centre/?page=corporate-governance
66
Performance
Tables
Questions relating to this
Sustainability Report can be
directed to our Sustainability
Manager, Karena Milios, at
sustainability@elders.com.au.
32 Elders also employs one manager based in
Indonesia
PEOPLE (AS AT 30 SEPTEMBER 2020)
Workforce
Full time employees
Part time employees
Casual employees
female
male32
female
male
female
male
Permanent employees
female
Fixed Term Contract
employees
male
female
male
Employees covered by enterprise agreements
Total (excludes employees based in China)
Australia
China
664
1,204
177
24
197
283
809
1,205
32
23
29
18
-
-
8
15
5
9
19
14
95%
Gender diversity
Non-Executive Directors
CEO
Key Management Personnel
Other executives/General Managers
Senior Managers
Other Managers
New hire – Gender and age ranges
Australia
China
Total number
Turnover – Gender and age ranges
Australia
China
Total number
Female
Male
Total
2
0
0
3
14
30
2
1
3
8
60
189
4
1
3
11
74
219
Under 30
30-50
Over 50
Total
Female Male
Female Male
Female Male
16.8% 14.1%
20.1% 24.0%
8.9% 13.7%
0.2%
0.2%
1.2%
0.5%
0.0%
0.2%
71
60
89
102
37
58
23.1% 11.7%
18.2% 19.8%
7.1% 18.5%
0%
75
0%
38
1.3%
0.8%
62
66
0%
23
0%
60
407
10
417
319
5
324
Elders2020 Annual Report Sustainability Report
67
HEALTH AND SAFETY
LTI employees
LTIFR employees
Fatalities
TRI employees
TRIFR
FY18
4
1.0
-
78
19.5
FY19
FY20
9
2.2
-
63
17.8
2
0.5
-
77
19.7
Total hours worked (employees)
3,991,730
4,047,367
4,012,627
ENVIRONMENT
Emissions
Fuel consumption (GJ)
Scope 1 GHG emissions from fuel consumption (tCO2e)
Electricity consumption (GJ)
Scope 2 GHG emissions from electricity consumption
(tCO2e)
196,551
216,440
225,392
13,794
37,585
8,464
15,205
37,286
8,282
15,824
42,711
9,278
Total energy consumption (GJ)
234,136
253,726
268,103
ECONOMIC PERFORMANCE
Net Debt ($000)
Total Equity ($000)
Total Capitalisation ($000)
237,451
672,326
909,777
OTHER
Industry
memberships,
accreditations
and standards
Rural Services: Australian Seed Federation, drumMUSTER, Fertiliser Australia, AgSafe,
CropLife, Potatoes SA, Australian Crop Breeders, AuSPICA; Feed and Processing: Angus
Australia, Aus-Meat, Dairy Beef Alliance, Australian Lot Feeders’ Association, National Feedlot
Accreditation Scheme, Livestock Production Assurance, European Union Cattle Accreditation
Scheme – High Quality Beef, Meat Standards Australia; Real estate: State and Territory
based Real Estate Institute membership, Australian Livestock & Property Agents Association;
Home loans: Mortgage and Finance Association of Australia, Australian Financial Complaints
Authority (External Dispute Resolution Scheme), Connective (our aggregator), Bank Australia
mortgage broking accreditation (Bank Australia is certified by the Responsible Investment
Association of Australasia).
68
GRI Content
Index
GRI
Standard
GRI Disclosure title
Notes
General standards
Page number / URL
24-30, see also 2020 presentations33
171
See 2020 presentations33
139, 150-151
12
24, 66-67,
see also 2020 presentations33
Name of the organisation
Elders Limited.
Activities, brands, products and services
Location of headquarters
Location of operations
Ownership and legal form
Markets served
Scale of the organisation
Same as registered office.
Elders serves customers through six core business areas
described throughout our Annual Report; namely: Rural
Products, Agency Services, Real Estate Services, Financial
Services, Digital and Technical Services and Feed and
Processing Services.
102-1
102-2
102-3
102-4
102-5
102-6
102-7
102-8
102-9
Information on employees and other workers
Supply chain
45, 66
40
102-10
Significant changes to the organisation and its supply chain
24-30, see also 2020 presentations33
102-11
Precautionary Principle or approach
102-12
External initiatives
102-13
Membership of associations
102-14
Statement from senior decision-maker
102-15*
Key impacts, risks and opportunities
The principles of the precautionary approach are reflected
in Elders’ Resilience Framework, which guides our workers
on the management of risks, specifically including risks to
the environment.
Key impacts, risks and opportunities related to Elders’
material sustainability topics are detailed throughout
the Sustainability Report.
102-16
Values, principles, standards and norms of behaviour
102-18
Governance structure
102-19*
Delegating authority
102-20*
Executive-level responsibility for economic, environmental, and social topics
102-26*
Role of highest governance body in setting purpose, values and strategy
102-27*
Collective knowledge of highest governance body
102-29*
Identifying and managing economic, environmental and social impacts
102-30*
Effectiveness of risk management processes
102-32*
Highest governance body’s role in sustainability reporting
102-40
List of stakeholder groups
102-41
Collective bargaining agreements
102-42
Identifying and selecting stakeholders
102-43
Approach to stakeholder engagement
102-44
Key topics and concerns raised
102-45
Entities included in consolidated financial statements
102-46
Defining report content and topic Boundaries
57, 67
67
2-5
20-21, 38-65
61
62-63
39, 62-63
62-63
34, 61
61-63
37
63
63
37
66
37
37
36-37
139, 150-151
35
Elders2020 Annual Report Sustainability Report
69
GRI
Standard
GRI Disclosure title
Notes
102-47
List of material topics
102-48
Restatements of information
Not applicable as this is Elders’ first Sustainability Report.
102-50
Reporting period
102-51
Date of most recent report
Not applicable as this is Elders’ first Sustainability Report.
102-52
Reporting cycle
Annual.
102-53
Contact point for questions regarding the report
102-54
Claims of reporting in accordance with the GRI Standards
102-55
GRI Content Index
Economic
GRI 201: Economic Performance 2016
103-1
103-2
103-3
201-2
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Financial Implications and other risks and
opportunities due to climate change
Elders intends on progressively aligning its disclosures
with the TCFD Recommendations. Its staged action plan
for full alignment is described on page 51 of this report.
Environmental
GRI 302: Energy 2016
103-1
103-2
103-3
302-1
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Energy consumption within the organisation
Energy consumption in the form of fuel and electricity
has been calculated using the methodology set out in the
National Greenhouse and Energy Reporting (Measurement)
Determination 2008 (as updated from time to time). Fuel
types included in calculation: Diesel, electricity, ethanol,
LPG, natural gas and petrol. No reported heating, cooling or
steam consumed and no reported heating, cooling, steam
or electricity sold. Not reported: Fuel consumption from
renewable sources due to unavailability of data.
GRI 303: Water and Effluents 2018
103-1
Explanation of the material topic and its Boundary
103-2
103-3
303-1
303-2
303-3
The management approach and its components
Evaluation of the management approach
Interactions with water as a shared resource
Management of water related discharge impacts
Water withdrawal
Water withdrawal is determined having regard to
water meters available at Killara Feedlot. Acidity and
nutrient levels of water withdrawn from bores are
consistent with freshwater.
Page number / URL
36
35
72
35
68
50, 72
50-51, 62-64
50-51, 62-64
50-51
52, 72
52
52
52, 67
54-55, 72
54-55
54-55
54-55
54-55
55
33 2020 Presentations: investors.elderslimited.
com/investor-centre/?page=result-centre
70
GRI
Standard
GRI Disclosure title
Notes
Page number / URL
303-4
Water discharge
303-5
Water consumption
GRI 305: Emissions 2016
Water discharged to EUAs and paddocks at Killara
Feedlot originates from bore water. Amounts discharged
have been estimated based on paddock requirements
for water and nutrients.
Water consumption is monitored through water
meter readings.
103-1
Explanation of the material topic and its Boundary
103-2
103-3
305-1
305-2
The management approach and its components
Evaluation of the management approach
Direct (Scope 1) GHG emissions
Energy indirect (Scope 2) GHG emissions
Emissions relating to fuel and electricity use have been
calculated using the methodology set out in the National
Greenhouse and Energy Reporting (Measurement)
Determination 2008 (as updated from time to time). Gases
included in the calculation: CO2, N20 and CH4. Elders has
accounted for emissions using an “operational control”
consolidation approach. Not reported: Base year for
calculation. This is not applicable for this reporting period.
GRI 306: Waste 2020
103-1
Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach
Waste generation and significant waste-related impacts
Management of significant waste-related impacts
Waste generated
Information is not presently available. Elders is aiming
to disclose its strategy for reporting against this standard
in its next Sustainability Report.
103-2
103-3
306-1
306-2
306-3
Social
GRI 401: Employment 2016
103-1
Explanation of the material topic and its Boundary
103-2
103-3
401-1
The management approach and its components
Evaluation of the management approach
New employee hires and employee turnover
GRI 403: Occupational Health and Safety 2018
103-1
Explanation of the material topic and its Boundary
103-2
103-3
403-1
403-2
403-3
403-4
403-5
The management approach and its components
Evaluation of the management approach
Occupational health and safety system
Hazard identification, risk assessment, and incident investigation
Occupational health services
Worker participation, consultation, and communication on occupational health and safety
Worker training on occupational health and safety
403-6
Promotion of worker health
403-7
403-8
Prevention and mitigation of occupational health and safety impacts directly linked by business
relationships
Workers covered by an occupational
health and safety management system
Elders maintains a single WHSMS, which has been
internally audited with the assistance of external
consultants. It covers all 2,134 of Elders’ employees and all
contractors (100%), including 190 contractor real estate and
livestock agents. No workers have been excluded from this
disclosure. This information has been compiled using data
maintained within our internal human resources systems,
and by our People & Culture, Real Estate and Agency teams.
55
55
52, 72
52
52
52, 67
49, 72
49
49
49
49
45, 72
45
45
66
41, 72
41-44, 63-64
41-44, 63-64
42
41-44, 63-64
42-44
42-44
42-44
44
44
Elders2020 Annual Report Sustainability Report
71
GRI
Standard
GRI Disclosure title
Notes
403-9
Work-related injuries
Information in relation to this disclosure has been compiled
having regard to Elders’ internal incident and hazard reports,
maintained by our Safety, Risk and Environment team. For
the purposes of this disclosure, Elders has assumed all
incidents and risks have been reported in accordance with
our policies and procedures (detailed on pages 43 and 64
of this report).
Injury frequency rates for contractors are not available.
Elders’ new reporting software captures comprehensive
information on third party incidents and injuries to support
effective response, but does not presently track contractor
work hours to enable frequency rate calculation. Data
relating to “high-consequence” injuries is also not presently
separately available, but is captured within data relating to
fatalities and total recordable injuries.
GRI 413: Local Communities 2016
103-1
Explanation of the material topic and its Boundary
103-2
103-3
413-2
The management approach and its components
Evaluation of the management approach
Operations with significant actual and potential negative impacts on local communities
Animal Welfare
103-1
Explanation of the material topic and its Boundary
103-2
103-3
G4-DMA
The management approach and its components
Evaluation of the management approach
Animal welfare disclosures are sourced from
the GRI G4 Food Processing Sector Disclosure.
G4-FP9
Percentage and total of animals raised and/or processed, by species and breed type
G4-FP10
Policies and procedures by species and breed type, related to physical alterations
and the use of anaesthetic
G4-FP11
Percentage and total of animals raised and/or processed, by species and breed type, per housing type
G4-FP12
Policies and practices on antibiotic, anti-inflammatory, hormone, and/or growth promotion treatments,
by species and breed type
G4-FP13
Total number of incidents of significant non-
compliance with laws and regulations, and
adherence with voluntary standards related
to transportation, handling, and slaughter
practices for live terrestrial animals
Referred to as “incidents of non-compliance with laws or
regulations relating to animal welfare” within this report.
For the purposes of this disclosure, Elders has assumed all
incidents have been reported in accordance with our policies
and procedures (detailed on pages 56 and 64 of this report).
Page number / URL
41, 43-44, 67, 73
38-40, 48, 72
38-40, 48
38-40, 48
48
56-57, 72
56-57
56-57
57
57
57
57
56
72
Definitions
and topic
boundaries
This report covers the assets and
operations of Elders Limited and
companies over which Elders Limited
or its subsidiaries have control.34
Activities or entities over which
Elders (or a subsidiary) does not
have a control, including some
saleyard operations, are excluded
from the scope of this report unless
specifically stated otherwise.
34 As defined by section 50AA of the Corporations
Act 2001.
TOPIC BOUNDARIES
An outline of where the impacts for each material topic occur, and Elders’ involvement
with these impacts, appears below:
Key topic
Impact within
the Elders group
Impact outside the Elders group
Community impact and investment
Health & Safety
Employee attraction and retention
Climate change
Water availability
Animal welfare
Adverse weather events
Energy
Waste management
Corporate governance
Innovation and Technology
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes – communities
Yes – contractors, customers, joint
venture participants and regulators
No
Yes – customers, communities, joint
venture participants and contractors
Yes – customers, communities, joint
venture participants and contractors
Yes – customers, contractors and regulators
Yes – customers, communities, joint
venture participants and contractors
Yes – landlords and regulators
Yes – customers
Yes – contractors, suppliers, joint venture
participants, regulators and investors
Yes – contractors, suppliers and customers
Elders2020 Annual Report Sustainability Report
73
DEFINITIONS
Capitalised terms in this report have the
following meaning, unless the context of
this Report indicates otherwise.
AgTech: digital technology for use in
agriculture and horticulture which aims to
improve yield, efficiency and profitability.
APVMA: the Australian Pesticides
and Veterinary Medicines Authority.
Chain of Responsibility Laws: the Road
Traffic (Vehicles) Act 2012 (WA), the “Heavy
Vehicle National Law” set out in the schedule
to the Heavy Vehicle National Law Act 2012 (Qld),
and laws that are substantively modelled on the
“Heavy Vehicle National Law”.
Executive: our Executive Management described
on pages 76 to 81 of our Annual Report.
LTI or lost time injury: something that results
in a fatality, permanent disability or time lost
from work.
LTIFR or lost time injury frequency rate:
the number of LTIs relative to 1,000,000
hours worked.
MLA: Meat and Livestock Australia.
NLIS: National Livestock Identification System.
PIRSA: The Government of South Australia
Department of Primary Industries and Regions
Senior Management: managers which report
directly, or through one person, to the CEO.
Serious Risk or Incident: any event that has the
potential to significantly impact our employees,
clients, business or brand, which includes:
⋅ safety-fatality or serious injury
⋅ animal – significant threat to health/safety/
welfare or livestock
⋅ environmental – chemical spill, natural
disaster, biosecurity threat
⋅ business – significant business disruption,
delay, likely to cause serious financial impact
⋅ media – incident likely to result in significant
media attention
⋅ criminal – suspected criminal activity or fraud
⋅ regulatory – incident that must be reported to
authorities (EPA, WorkCover, WorkSafe etc)
⋅ other serious incidents – terrorism, significant
property damage, fire
TCFD Recommendations: the recommendations
of the Taskforce on Climate-related Financial
Disclosures.
TRI or total recordable injuries: the total
number of work-related fatalities, LTIs and
other injuries requiring medical treatment beyond
first aid. TRIFR or total recordable injury frequency
rate: the number of TRIs relative to 1,000,000
hours worked.
Worker: employees and contractors.
74
Elders, in
your corner
Elders has been central
to communities that
depend on sustained
agricultural success
since 1839. In this time,
the core purpose of our
business has always
remained the same
– to work alongside
our clients to drive
profitability and growth.
The value of this commitment, the strength of
our people’s expertise and their willingness to go
above and beyond for their clients is never more
apparent than in times of crisis.
North east New South Wales has endured one of
these crises with a long and arduous drought that
has crippled producers and led to widespread feed
shortages and destocking throughout the region.
Kevin Mathews, who owns and runs Jiskardale
outside of Walcha in the New England region,
describes drought as “a most horrible time to
be a grazier,” saying that “the responsibility of
feeding animals through an exceptional time
of scarcity is a heavy burden to carry alone.”
Kevin tells the story of how a chance meeting at a
field day led to a long-term relationship with Elders
Livestock Production Advisor, Adam Turnbull and
Elders Walcha. He says he recognised immediately
the value of the knowledge Adam had to help him
get through trying seasons to come.
“After a couple of difficult seasons already the
drought was biting hard and it was obvious
that feeding my sheep was going to be a huge
challenge over the coming months,” says Mathew.
“I knew feeding substantial amounts of grain was
likely to be the best strategy. Despite forty odd
years of experience farming in the New England,
I had never had to do this before on such a large
scale and it was a steep learning curve on how
to do it most effectively.
“Adam was a great source of information
and advice. He helped by initially assessing
my struggling pastures and determining the
nutritional requirements of the ewes that I
had to lamb down in the coming spring.
“He provided the information and knowledge
and together we formulated a plan with an
increasing grain ration suitably buffered with
the necessary supplements and minerals to
provide them with a safe and effective ration.
“Adam and the Elders merchandise team at
Walcha were immensely helpful at assisting me
to source all the required grain and supplements.
It was a terribly busy and expensive time teaching
my sheep how to eat grain, a process not normally
required at Walcha. The sheep that learnt to
eat, did quite well and produced good lambs
considering the season. The shy feeders
really struggled.”
The severe drought continued through spring
and summer and contributed to the savage
bushfires in November which were burning all
around Jiskardale. Weaning lambs early became
a necessary step in negotiating this exceptional
season. The next challenge was to set up feed
yards to more efficiently feed the lambs directly.
“Adam again was an incredible resource with
advice on the correct high protein ration and
supplements for the lambs as well as basics
like the type of troughing required, and drafting
animals by size to prevent bullying,” says Mathew.
“Again, he assisted in sourcing this feed and gave
practical advice that made all the difference.”
Fortunately, rain came at Christmas time and
continued through the autumn. The feeding regime
implemented meant that Mathews lambs were
at an ideal store lamb weight of 35kg in Autumn;
not a bad result all things considered.
“The store market was extreme, so I took the
money at that time, $190/head, which helped
offset my feeding costs,” says Mathew.
“Between rain events I managed to sow some
country to a rye grass crop in March to help keep
the good green feed going into the winter for my
remaining stock - a luxury at Walcha.
“You might think that’s where the advice stopped
too, but no. I was sceptical after spending so much
money to get through the dry that Adam wanted
me to keep putting a dry lick in front of my ewe
lambs now on the good feed.
“His advice to this point had been good so I
trusted him and bought the product. We changed
to a starch and mineral balancing dry lick to
supplement the green feed they were now getting
from the grass. I have never seen growth rates
like it in my lambs! They were easily growing at
300grams per day through the winter, gaining
an average of 27kgs over this time.
“After such an extremely poor start to the
season I have managed to get most of my ewe
lambs up to joining weight by eight months of
age and they have continued to grow rapidly
right through joining.”
Mathew says that he believes his ewes are some
of the best lambs he has ever grown and the
property fully restocked. He credits much of this
success to the quality advice and commitment
from Adam and the team at Walcha.
Elders2020 Annual Report Elders, in your corner
75
“Farming these days is becoming an
increasingly technical business with many
different areas where you need to have
good knowledge and a wide set of skills.
“I am looking forward to the future with new
confidence that with the help of the Elders
team I can achieve the full potential of my
livestock and my land in good seasons or bad.
The addition of good people providing such
good advice on livestock nutrition as well
as agronomy is why I continue to use Elders
exclusively for my livestock marketing as well
as for most of my rural merchandise needs.
Elders provides the whole package.”
Our thanks for this testimonial to Kevin
Mathews, Lamb Producer, “Jiskardale”,
Walcha. August 2020.
I am looking forward to the
future with new confidence
that with the help of the
Elders team I can achieve the
full potential of my livestock
and my land in good seasons
or bad.
Kevin Mathews
Lamb Producer, “Jiskardale”
76
Board of
Directors
Mr Ian Wilton
MSc, FCCA, FCPA, FAICD, CA
Appointed Chair on 11 September 2019 and Non-
Executive Director since April 2014, Mr Wilton is also
Chair (appointed 11 September 2019) of the Work
Health and Safety Committee and the Nomination
and Prudential Committee and a member of the Audit,
Risk and Compliance Committee (former Chair) and
the Remuneration and Human Resources Committee.
Mr Wilton is an experienced Non-Executive Director
and former senior executive with extensive knowledge
of the agricultural sector. He has held Chief Financial
Officer positions with Ridley Corporation Limited, CSR
Sugar and GrainCorp Limited and was President and
Chief Executive Officer of GrainCorp Malt.
Mr Mark Charles Allison
BAgrSc, BEcon, GDM, FAICD, AMP (HBS)
Mr Allison joined Elders Limited as a Non-Executive
Director in December 2009, served as Chairman
and Executive Chairman, before being appointed
Managing Director and Chief Executive Officer in
May 2014.
Mark’s 40-year agribusiness career spans technical,
manufacturing, supply and distribution roles and
businesses. Previous roles include Managing Director/
CEO of GrainGrowers Limited, Jeminex Limited, Farmoz
Pty Ltd, Wesfarmers Landmark Limited, Wesfarmers
CSBP Limited, CropCare Australasia Pty Ltd and
General Manager of Incitec Fertilisers.
Ms Robyn Clubb
BEc, CA, F Fin, MAICD
Mr Wilton is a Non-Executive Director of Namoi
Cotton Limited (since 17 June 2020) and Chair of
the advisory board of MacKay’s Banana Marketing.
Mr Wilton was previously a Non-Executive Director
and Chair of the Sheep CRC Ltd (18 November 2015
– 3 September 2020) and a Non-Executive Director
of Tivoli Investments Pty Ltd (1 February 2016 –
17 July 2020).
Mr Wilton is a resident of New South Wales.
Mark is currently Chair of Agribusiness Australia,
AuctionsPlus, the Agriculture and Natural Resources
End-User Advisory Board of the SmartSat CRC,
the Agrifood and Wine Advisory Board of Adelaide
University, a Non-Executive Director of GrainGrowers
Limited and a member of the Rabobank Food and
Agriculture Advisory Board.
Mark oversaw the development and implementation
of Elders’ Eight Point Plan in 2014, which returned the
company to pure play agribusiness and resulted in the
first shareholder distribution in nearly a decade. Since
2014 Elders has grown from a market capitalisation
of $50 million to $1.7 billion.
Non-Executive Director since September 2015,
Ms Clubb is Chair of the Audit, Risk and Compliance
Committee (appointed on 11 September 2019)
and a member of the Remuneration and Human
Resources Committee (former Chair), the Work
Health and Safety Committee and the Nomination
and Prudential Committee.
Ms Clubb is a Chartered Accountant and Fellow of the
Finance & Securities Institute of Australia, with senior
executive experience of over twenty years in the
financial services industry, working for organisations
including AMP Limited and Citibank Limited.
Ms Clubb is currently a Director of Craig Mostyn
Holdings Pty Limited (since 1 February 2017),
Essential Energy (since 15 March 2018), Chair of
the Australian Wool Exchange Limited (a director
since 24 August 2016), and Chair of ProTen Limited
(a director since 30 April 2019.
Ms Clubb is a former Chair of V&V Walsh Limited,
Chair and Member of the Rice Marketing Board for
the State of NSW, Non-Executive Director of Rural
Bank Ltd (19 September 2007 – 3 February 2011),
Beef CRC Limited (23 November 2007 – 11 June
2014), UrbanGrowth (a NSW state-owned corporation
responsible for urban land development) and
Murray Irrigation Limited (20 October 2011 –
19 November 2015).
Ms Clubb is a resident of New South Wales.
Elders2020 Annual Report Board of Directors
77
Ms Diana Eilert
BSc (Syd), MCom (UNSW), GAICD, member of Chief Executive Women
Non-Executive Director since November 2017,
Ms Eilert was appointed Chair of the Remuneration
and Human Resources Committee on 11 September
2019. She is also a member of the Audit, Risk and
Compliance Committee, the Work Health and Safety
Committee and the Nomination and Prudential
Committee.
With an executive career of more than 25 years,
Ms Eilert brings four main skills to the Elders
board – CEO level operational leadership,
strategy, technology and digital disruption
and customer experience/marketing.
Ms Eilert’s career includes roles as Group Executive
for Suncorp’s entire insurance business and
subsequently Group Executive for Technology,
People and Marketing. In her 10 years with Citibank,
Diana’s roles included Head of Credit Risk Policy,
running the Mortgage business, and Lending
Operations for Australia and New Zealand.
Mr Matthew Quinn
BSc, ACA
The Board appointed Mr Quinn as Non-Executive
Director in February 2020. He is a member of the
Audit, Risk and Compliance Committee, Remuneration
and Human Resources Committee, Work Health
and Safety Committee and Nomination and
Prudential Committee.
Mr Quinn holds a BSc in Chemistry and Management
Science and is a Chartered Accountant. He also
has senior executive experience having been the
Managing Director of Stockland for thirteen years.
She was also a Partner with IBM. In her final
executive role as Head of Strategy and Corporate
Development for News Limited, Diana developed a
deep understanding of digital trends, disruption and
alternate strategies for a large traditional business.
Ms Eilert is currently a Non-Executive Director of
ASX listed companies Domain Holdings Australia
Limited (since 16 November 2017) and Super Retail
Group Limited (since 21 October 2015). She is also
a member of the Australian Competition Tribunal.
Ms Eilert was previously a director of Navitas Limited
(28 July 2014 – 5 July 2019), realestate.com.au
(REA Group) (30 June 2010 – 17 February 2012)
and Veda (data and analytics) (4 October 2013
– 25 February 2016).
Ms Eilert is a resident of New South Wales, sharing
her time between Sydney and the family cattle farm
on the NSW South Coast.
Mr Quinn has extensive Non-Executive Director
experience in the Australian listed company
environment. His current Non-Executive Director
positions are at CSR Limited (since 20 August 2013),
Class Limited (Chairman, director since 1 July 2015)
and Regis Healthcare Limited (since 1 March 2018).
He is also Chairman of unlisted TSA Management
Holdings Limited (since 11 June 2018).
Mr Quinn is a resident of New South Wales.
Company Secretaries
Mr Peter Gordon Hastings
BA, LLB, GDLP, FGIA, Grad Dip Applied
Corporate Governance, GAICD
Mr Hastings was appointed Company Secretary
in February 2010.
He held the position of Group Solicitor with the
Elders Group between 1995 and 1999 and again
between 2003 and 2010. He has also held the
position of General Counsel since February 2010.
Ms Shannon Hope Doecke
BAcc, Grad Dip Applied Corporate Governance,
MAICD, AGIA
Ms Doecke was appointed as a Company Secretary
in July 2020. Ms Doecke has served as the Assistant
Company Secretary since April 2019.
Ms Doecke previously worked for AustCham Shanghai,
between 2014 and 2019, as Governance Manager,
then Company Secretary.
78
Executive
Management
Mr Mark Charles Allison
Managing Director & Chief Executive Officer
BAgrSc, BEcon, GDM, FAICD, AMP (HBS)
Mr Allison joined Elders Limited as a Non-Executive
Director in December 2009, served as Chairman
and Executive Chairman, before being appointed
Managing Director and Chief Executive Officer in
May 2014.
Mark’s 40-year agribusiness career spans technical,
manufacturing, supply and distribution roles and
businesses. Previous roles include Managing Director/
CEO of GrainGrowers Limited, Jeminex Limited, Farmoz
Pty Ltd, Wesfarmers Landmark Limited, Wesfarmers
CSBP Limited, CropCare Australasia Pty Ltd and
General Manager of Incitec Fertilisers.
Richard Davey
Chief Financial Officer
B.Ec Acc, FCA, AMP (HBS)
Richard was appointed Chief Financial Officer in 2013.
He has been an integral part of the Elders’ executive
management, driving growth through Eight Point
Plans over the past eight years. Richard has
overall responsibility for the finance, tax, treasury,
information technology, indirect procurement,
accounts payable, credit and property portfolios.
Richard is a Director of AuctionsPlus, StockCo and
all Elders’ subsidiary boards. Richard also attends
quarterly board meetings for all operational units,
including China.
Mark is currently Chair of Agribusiness Australia,
AuctionsPlus, the Agriculture and Natural Resources
End-User Advisory Board of the SmartSat CRC,
the Agrifood and Wine Advisory Board of Adelaide
University, a Non-Executive Director of GrainGrowers
Limited and a member of the Rabobank Food and
Agriculture Advisory Board.
Mark oversaw the development and implementation
of Elders’ Eight Point Plan in 2014, which returned the
company to pure play agribusiness and resulted in
the first shareholder distribution in nearly a decade.
Since 2014 Elders has grown from a market
capitalisation of $50 million to $1.7 billion.
Over the past 18 years at Elders, Richard
has succeeded in several finance roles whilst
becoming acquainted with the intricacies and
seasonality of Elders.
Prior to joining Elders in 2002, Richard spent seven
years with PwC in both Australia and Canada.
Peter Hastings
Company Secretary & General Counsel
BA, LLB, GDLP, FGIA, Grad Dip Applied Corporate Governance, GAICD
Peter was appointed Elders’ Company Secretary
and General Counsel in 2010.
He has responsibility for the Company’s legal and
compliance, company secretarial and risk functions.
Peter was an integral member of the Elders’ team
that worked hard to protect shareholder interests
through many years of financial distress and which,
subsequently, has successfully implemented
stabilisation, and now growth strategies.
Peter has nearly three decades of experience
gained in legal and governance roles with Elders,
other in-house legal positions and in private and
government legal practice.
Elders2020 Annual Report Executive Committee
79
Olivia Richardson
General Manager People, Culture & Safety
BMgmt (Hons), GAICD
Olivia was appointed General Manager People and
Culture in 2018, with the Safety function included
in her portfolio from 1 October 2020.
Olivia’s priorities include maintaining an engaged
and enabled workforce, investment in learning and
development programs, creating a diverse and
inclusive workforce, building on the pride in the
pink shirt and driving a zero harm workplace.
Having been with Elders for 13 years, she is well
acquainted with Elders people, appreciating that
they are loyal and committed to doing the best for
their communities.
James Cornish
General Manager Network
DipBusM, AMP (HBS)
Notable achievements include refreshing the learning
and development framework to ensure people are
equipped with the relevant skills and technical
expertise to do their job; and the refresh of our
Employee Value Proposition aimed at promoting
Elders as a great place to work to drive retention
and attraction of high calibre staff.
Prior to Elders, Olivia has worked across
Human Resources in FMCG, Financial Services
and Telecommunications throughout Australia,
the UK and Europe.
James was appointed General Manager Network
in 2020.
In his current role, James leads the national branch
network. In 2020, James implemented a shift from
zones to a state network structure to continue to focus
on and drive the success of our business by enabling
a critical focus on smaller territories and a better
understanding of our customers.
With more than 24 years experience in agribusiness,
James has worked across a range of locations and
products throughout Elders, most recently as Zone
General Manager West and General Manager Network
and Northern.
James has successfully integrated numerous
acquisitions, achieved significant growth and
excellent EBIT performance in the West.
Tom Russo
General Manager Real Estate
LLB (Hons), BA, Grad Dip LP, Dip Prop Serv (Agency Mgt)
Tom was appointed General Manager Real Estate
in 2016.
Since assuming responsibility for the real estate
product, Tom has focused on building the capability
of the product team to deliver outstanding support to
the real estate business and establish a foundation
upon which to grow it.
The team has created a compelling attraction
and retention proposition by vastly improving the
marketing, digital strategy, training capability and
transaction support. Tom has also established
himself as a leading transaction adviser in the
farmland investment space.
Tom previously played a pivotal role in devising
and implementing the turnaround strategy for
Elders, including executing a number of large
and complex divestment initiatives.
Prior to Elders, Tom was the Chief Executive of
a specialist international law firm and practiced
as a corporate lawyer with a focus on mergers
and acquisitions, corporate finance, complex
contractual projects, corporate governance
and intellectual property.
80
David Adamson
General Manager Agency & Financial Services
MBus (Acct), BAgBus, GAICD, Cert Pastoral Production – Longreach Pastoral College
David was appointed General Manager Agency
in 2014, with Financial Services included in his
portfolio from 2019.
He is responsible for product strategy and
implementation across the livestock, wool,
grain and financial services product suite.
David sits on the boards of our joint venture
partners Elders Insurance and Clear Grain Exchange.
With a background in agricultural production,
agri finance and operations, David is well positioned
to lead product development across all parts of the
agency and financial services businesses.
Liz Ryan
General Manager Strategy, Customer & Digital
BCom/DipArts, MBA (Cambridge), GAICD
Liz was appointed General Manager Strategy,
Customer & Digital in 2019.
She is responsible for providing a clear focus
on Elders strategy and dedicated attention to the
customer experience across all channels integrated
with digital solutions, marketing and strategy.
Liz joined Elders in 2016, as General Manager
Financial Services, and during her tenure in this role
she led the Rural Bank contract renegotiation, StockCo
and Elders Insurance equity acquisitions and the
Livestock in Transit delivery warranty launch. Financial
Services contribution to Elders earnings has grown
significantly during this period.
Nick Clark
General Manager Business Improvement
BCom, CA, GAICD
Nick was appointed General Manager Business
Improvement in 2019.
He is responsible for supporting the organic growth
portion of Elders stated 5-10% EBIT growth through
the cycles at 15% return on capital.
Nick’s current priorities are capturing more gross
margin in Rural Products through optimised pricing,
backward integration and supply chain efficiency.
Prior to Elders, Liz worked in the management
consulting sector and across strategy and business
development roles at General Electric.
He also has responsibility for the Company’s
sustainability function, both building on the wide
range of activities we already do, and developing an
industry leading authentic sustainability program
and outcomes.
Having been with Elders since 2010 in a variety of
Finance roles, Nick’s experience ensures that the
business maintains unflinching financial discipline
and a commitment to cost and capital efficiency.
Kiim Lim
General Manager Business Development
BCom, CPA , GAICD
Kiim was appointed General Manager Business
Development in 2018.
Kiim commenced with Elders in March 2006,
and has held various roles with the finance team.
She has successfully led the completion and
integration of many acquisitions underpinning
the growth of Elders, including Australian
Independent Rural Retailers (AIRR), Titan AG,
Livestock and Wool in Transit delivery warranty
and various retail, agency and real estate bolt-ons.
Elders2020 Annual Report Executive Committee
81
Malcolm Hunt
State General Manager Victoria, Riverina
GCM, SMDP (AGSM), Wool Classer, Licensed RE Agent VIC, NSW, TAS, ACT
Malcolm was appointed State General Manager
Victoria, Riverina on 1 October 2020.
Prior to his recent appointment, Malcolm was Zone
General Manager South, where he led a key business
unit that has played a significant role in Elders’
resurgence and has continued to expand the Elders
footprint, whilst assisting producers increase the
productivity and profitability of their businesses.
Malcom has close to 40 years of agricultural
experience under his belt as a wool broker,
stock & station agent and network manager.
Nick Fazekas
State General Manager Western Australia
BAppSc – Ag
Nick was appointed State General Manager
Western Australia on 1 October 2020.
Prior to his recent appointment, Nick was Zone
General Manager West. In the past 12 months
Nick has embraced all of the product groups within
the WA business. He has overseen double digit
growth over most products this season, and our
numerous acquisitions over the last two years are
performing strongly.
Nick aspires to continue our market share growth
within WA and has his eye on a number of geographic
areas, including expanding into new areas.
Bernard Seal
State General Manager South Australia
BBus, Registered Land Agent (SA)
Bernard was appointed State General Manager South
Australia on 1 October 2020.
Prior to his recent appointment, Bernard was Zone
General Manager Central. With experience across
multiple products and geographies, he is well
positioned to lead the continued growth of Elders
in South Australia.
Nick will also continue to focus on spending time
in the field, with staff and clients, to gain valuable
feedback about increasing our service offering and
building on our existing client base.
Nick has almost 30 years of experience in the
agricultural services field. Since joining Elders in early
2009, he has held numerous roles including General
Manager Key Accounts and General Manager of Retail.
Nick’s previous roles have mainly been retail focused,
including overseeing the procurement functions for
the wider Elders business.
Bernard’s career with Elders spans 15 years, having
worked at branch, regional, and now Executive levels
during his tenure. Prior to that he spent seven years as
Operations Manager for the South Zone.
Hailing from a wheat and sheep farm on the Eyre
Peninsula, Bernard’s career began in the wool
industry, before working as an Agribusiness Manager
with the NAB in regional Victoria and Regional
Manager for the Eastern Zone with Viterra.
Directors' Report
2020 84
Directors’
Report
Directors and Secretaries
The Elders’ Directors in office during
the financial year and until the date
of this report were:
Non-Executive Directors
⋅ Ian Wilton, Chair
⋅ Robyn Clubb
⋅ Diana Eilert
⋅ Matthew Quinn
(appointed 20 February 2020)
Executive Director
⋅ Mark Charles Allison, Managing
Director and Chief Executive Officer
Ceased Director
Michael Carroll was a Non-Executive
Director of Elders from the beginning
of the financial year until his
resignation on 2 July 2020.
Company Secretaries
⋅ Peter Gordon Hastings
⋅ Shannon Hope Doecke
A summary of the experience,
qualifications and special
responsibilities of each Director
and Company Secretary is provided
on pages 76 and 77 of this
Annual Report.
Principal Activities
The principal activities of Elders during
the year were:
⋅ the provision of retail products (farm
supplies and fertilisers) and associated
services to the rural sector
⋅ the provision of wholesale products
to independent rural and regional farm
supplies retailers
⋅ the provision of livestock and wool
agency services
⋅ the provision of real estate sales agency
services (both company-owned and franchised)
and property management services
⋅ arrangements for the provision of financial
services to rural and regional customers,
including a 20% investment in Elders
Insurance (Underwriting Agency) Pty Ltd
⋅ the provision of digital and technical
services, agricultural market information
and investments in the AuctionsPlus and
Clear Grain online trading platforms
⋅ feedlotting of cattle
Results and Review
of Operations
The consolidated entity recorded a profit for
the year, after tax and non-controlling interests,
of $122.9 million (2019: profit of $68.9 million).
A review of the operations and results of the
consolidated entity and its principal businesses
during the year is contained in pages 22 to 30
of this Annual Report.
Significant Changes
in the State of Affairs
On 13 November 2019 Elders acquired AIRR
Holdings Limited (AIRR) and its subsidiaries,
pursuant to which 13,050,001 shares were
issued to the vendors of shares in AIRR.
Impacts of COVID-19
Elders response to COVID-19 has been a “safety
first” programme aimed at keeping our employees,
customers, contractors and other stakeholders
as protected from COVID-19 infection in the
workplace as possible.
While COVID-19 has introduced significant
uncertainty, both globally and domestically,
its impacts on Elders in FY20 were limited to
short term impacts on chemical supply chains,
interruptions to wool supply chains, disruption
to livestock supply chains caused by lack of live
export to Vietnam and Indonesia and impacts on
real estate transactions and cross border activities
caused by regulation directed at limiting social
mobility. In aggregate, these impacts were not
material to Elders’ financial performance and
have meant, amongst other things, that Elders
and its controlled entities did not need to apply
for JobKeeper assistance.
Given the uncertainty caused by COVID-19,
Elders chose in May of this year to secure from
its financiers an additional 2 year $50 million
working capital facility and a 12 month extension,
and an increased committed limit of its debtor
securitisation programme. Elders has since chosen
to terminate the COVID-19 facility on the date
of this report.
Further disclosures relating to the impacts
of COVID-19 are included in the notes to the
financial statements in this Annual Report.
Events Subsequent
to Balance Date
There was no matter or circumstance that
has arisen since 30 September 2020 which
is not otherwise dealt with in this report or in
the consolidated financial statements, that
has significantly affected or may affect the
operations of Elders, the results of those
operations or the state of affairs of Elders
and its controlled entities in subsequent
financial periods.
Likely Developments
and Future Results
Discussion of other likely developments in
the operations of the consolidated entity and
the expected results for those operations in
future financial years is included on page 30
of this report.
Elders2020 Annual Report Directors' Report
85
Share and Other Equity Issues During the Year
Relevant Date
No. of ordinary
shares issued
Reason for issue
12 November 2019
668,192
Shares issued upon vesting of performance rights in accordance with Elders Long-Term Incentive Plan
13 November 2019
13,050,001
Shares issued to the vendors of shares in AIRR
13 December 2019
304,213
Shares issued in accordance with Elders’ Dividend Reinvestment Plan for the dividend paid
on 13 December 2019
19 June 2020
80,698
Shares issued in accordance with the Elders’ Dividend Reinvestment Plan for dividend paid 19 June 2020
The total number of ordinary shares on issue at the date of this report is 155,753,725.
Dividends and Other Equity Distributions
On 13 November 2020, the Directors determined to pay a final dividend of $0.13 per ordinary share, fully franked, bringing dividends for 2020
to $0.22 per share. In accordance with a determination made by the Directors, Elders’ Dividend Reinvestment Plan remains in operation.
Dividends paid during the year were:
Dividend
Date Determined
Date Paid
Final Dividend for Year Ended 30 September 2019
8 November 2019
13 December 2019
Interim Dividend for Half Year Ended 31 March 2020
15 May 2020
19 June 2020
Dividend
per Share
Franking
Rate
Total Dividend
$0.09
$0.09
100%
100%
$13,983,193
$14,010,572
Restricted Securities and Voluntary Escrow
As at the date of this report, Elders has no restricted securities on offer. 3,163,430 securities are held in voluntary escrow by certain vendors of shares
in AIRR Holdings Limited pursuant to the scheme implementation deed between Elders and AIRR Holdings Limited released to ASX on 15 July 2019.
The voluntary escrow period ends on 13 November 2021, unless Elders consents to early release.
Directors’ Interests
The relevant interests of the Directors in shares and other equity securities of Elders, as at the date of this report, are detailed on page 107 of the
Remuneration Report.
86
Share Options and Performance Rights
Share options and rights may be granted to company executives under the Long-Term Incentive Plan that is part of Elders’ remuneration structure.
Information about the Long-Term Incentive Plan can be found in the Remuneration Report on pages 96 to 102 of this Annual Report.
The number of performance rights on issue at 30 September 2020, which were held by 15 Long-Term Incentive Plan participants, is disclosed
in note 28 to the Financial Statements. If each of these rights vested, this would represent 0.92% of the Company’s current issued ordinary shares.
These performance rights are Elders’ only unquoted equity securities and represent the number of performance rights outstanding at the date of this
report. This representation differs from note 28 in the financial statements which does not take into account performance rights that vested after the
reporting date. The closing performance rights per note 28 of the financial statements includes the 465,000 rights that vested on 16 November 2020.
The opening number of rights below includes 208,750 rights that lapsed in November 2019, excluded from the opening balance in note 28 of the
financial statements.
1,917,000
626,250
587,000
465,000
444,750
968,000
No. of rights as at
30 Sept 2019
No. of rights vested
on 12 Nov 2019
No. of rights granted
since the AGM
on 12 Dec 2019
No. of rights vested
on 16 Nov 2020
No. of rights lapsed
from 30 Sept 2019
to date of report
No. of rights
outstanding at the
date of report
The performance rights granted to the five most highly remunerated officers as part of their remuneration, between 30 September 2019
and the date of this report, are shown below.
Name of Officer
Mark Charles Allison
Richard Ian Davey
Malcolm Leonard Hunt
James Harold Cornish
Richard Lawrence Norton*
Number of Rights Granted between 30 September 2019 and 16 November 2020
166,000
41,000
30,000
41,000
41,000
* Mr Norton ceased to be employed by Elders, and his performance rights lapsed, effective 31 October 2020.
Attendance at Meetings by Directors
Director attendance at scheduled meetings in the 12 months to 30 September 2020 is set out below.
Committee attendance is only recorded where a director is a member of the relevant committee. Although Mr Allison is recorded
as a non-member for some committees, he attended all meetings held for each of those committees.
Board of Directors
Work Health and
Safety Committee
Audit, Risk
and Compliance
Committee
Remuneration and
Human Resources
Committee
Nomination
and Prudential
Committee
Ian Wilton
Mark Allison
Robyn Clubb
Diana Eilert
Michael Carroll
Matthew Quinn
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
16
16
16
16
13
10
16
16
16
16
13
10
2
-
1*
2
2
2
2
-
2
2
2
2
5
-
5
5
4
4
5
-
5
5
4
4
5
-
5
5
4
3
5
-
5
5
4
3
6
6
5*
6
4
3
6
6
6
6
4
3
* For personal reasons and with the permission of the Chair, Ms Clubb submitted in an apology for these committee meetings. Ms Clubb provided the Chair with commentary on the business being
considered at the meeting, which was raised at the meeting by the Chair.
In addition to the meetings above, the Board held three informal Board briefings to discuss issues related to COVID-19 and its impact
or potential impact on Elders’ employees and business operations. All directors attended the informal briefings.
Elders2020 Annual Report
Directors' Report
87
Indemnification of
Officers and Auditors
The consolidated entity paid an insurance
premium in respect of a contract insuring each of
the Directors of Elders named earlier in this report
and each full time Executive Officer, Director and
Secretary of Australian group entities against
liabilities and expenses arising as a result of work
performed in their respective capacities, to the
extent permitted by law. The terms of the policy
prohibit disclosure of the premiums paid.
Each Director and Officer has entered into
a Deed of Access, Insurance and Indemnity
which provides:
⋅ that Elders will maintain an insurance
policy insuring the Officer against any liability
incurred by the Officer in the Officer’s capacity
as an Officer of Elders or another group entity
to the maximum extent allowed by law
⋅ for indemnity against liability as an officer,
except to the extent of indemnity under the
insurance policy or where prohibited by law
⋅ for access to company documents and records,
subject to undertakings as to confidentiality
Remuneration of Directors
and Senior Executives
Details of the remuneration arrangements in place
for Elders’ Key Management Personnel are set
out in the Remuneration Report commencing on
page 88. In compiling this report Elders has met
the disclosure requirements prescribed in the
Accounting Standards and Corporations Act 2001.
Environmental
Performance Regulation
A number of Elders’ operations are subject to
environmental legislation. Such legislation is
diverse and varies between state, territory and
local authorities and various regulators. Detail
of Elders’ performance in relation to various
regulations is outlined on page 48 of the
Sustainability Report
Rounding of Amounts
The parent entity is a Group of the kind
specified in ASIC Corporations (Rounding
in Financial/Directors Report) Instrument
2016/191 issued by the Australian Securities
and Investments Commission. In accordance with
that class order, amounts in the Financial Report
and Directors’ Report have been rounded to the
nearest thousand dollars unless otherwise stated.
Non-Audit Services
Based on advice received from the Audit, Risk and
Compliance Committee, the Directors are satisfied
that the provision of non-audit and audit-related
services is compatible with the general standard
of independence for auditors imposed under the
Corporations Act 2001 for the following reasons:
⋅ all non-audit and audit-related services
have been reviewed by the Audit, Risk and
Compliance Committee to ensure they do
not impact on the impartiality or objectivity
of the auditor
⋅ the nature and scope of the non-audit services
provided means that auditor independence was
not compromised
The amount received or due to be received for the
provision of non-audit services is disclosed in note
29 of the financial report, Auditors’ Remuneration.
A copy of the auditor’s independence declaration
as required under section 307C of the Corporations
Act 2001 is set out on page 160.
This report, including the Remuneration Report
commencing on page 88, is made in accordance
with a resolution of Directors.
Ian Wilton
Chair
Mark Allison
Managing Director
Adelaide
16 November 2020
Directors’ Report
— Remuneration Report
2020 90
Directors’
Report —
Remuneration
Report
Following is the
Remuneration Report
for the consolidated
entity for the year
ended 30 September
2020. The remuneration
report provides
shareholders with an
understanding of Elders’
remuneration policies
and the link between our
remuneration approach
and our performance,
in particular regarding
Elders’ Key Management
Personnel (KMP).
This year’s remuneration outcomes
reflect the results of the Financial
Year 2020, not only the business
performance, but also strong
alignment with the outcomes for
our shareholders and customers.
The information provided in this report has been
audited, unless otherwise indicated, as required
by the Corporations Act 2001 (Cth) and forms
part of the Directors’ Report.
KMP Changes
The following changes were made to the Executive
team during FY20:
⋅ James Cornish was appointed General Manager
Network from 1 October 2019
⋅ Richard Norton was appointed General Manager
Rural Supplies from 1 October 2019, however
has left Elders effective 31 October 2020
⋅ our previous three zone network structure of
North, South and West was split into four zones
from 1 October 2019 with the inclusion of
Central to enable a greater focus on our growth
and delivery targets. Malcolm Hunt, formerly
General Manager Southern Zone, now focuses
on Victoria/Riverina and was not a KMP in this
reporting period given the change effective
1 October 2019 as per Table 1 on page 92
With regard to Non-Executive Director changes
during FY20, Michael Carroll resigned as
Non-Executive Director effective 2 July 2020 and
Matthew Quinn joined Elders as Non-Executive
Director effective 20 February 2020.
Remuneration at a Glance
Our year
Our FY20 underlying EBIT of $119.4 million,
is an increase of 62% on FY19 and represents
outperformance against the Eight Point Plan goal
of 5-10% EBIT growth through the agricultural
cycles.
This result highlights the resilience of our business
model and people in the face of a challenging year
which presented issues related to bushfires in
Australia and the global COVID-19 pandemic.
As the COVID-19 pandemic emerged we acted
quickly to ensure the health and safety of our
employees, contractors, customers and our
suppliers. We worked closely with key stakeholders
to enable our branches to remain open, so we
could continue to service our customers, delivering
an essential service to Australia’s agriculture
sector. With Elders’ critical role in agriculture,
we had no need to stand down or reduce
employment due to COVID-19. We did not access
any government support such as JobKeeper
during FY20.
First strike in 2019
Elders received a first strike against the
Remuneration Report at the 2019 AGM. The
feedback received from proxy advisors and major
shareholders indicated this was largely due to
our calculation and payment of one element of
the FY17 Long-Term Incentive grant that vested
in FY19, being the Earnings per Share (EPS)
measure. Your Board spent significant time in
2020 reflecting on improvements to remuneration
arrangements and outcomes so that shareholder
concerns could be thoroughly addressed.
The Board completed a comprehensive review
of executive remuneration practices with a focus
on the remuneration strategy, frameworks,
governance and decision-making processes.
As part of the review the Board also consulted
with shareholder advisory groups and major
shareholders.
As a result, the Board has made several
changes to our Executive remuneration framework
for FY21. These changes are summarised under
the Remuneration Changes for FY21 heading and
more detail provided in Section 1 and throughout
the report.
Elders2020 Annual Report Directors' Report – Remuneration Report
91
Contents
Key Management
Personnel
Section 1
Response to FY19 strike
Section 2
Overview of FY20
Executive Remuneration
Section 3
Link Between Elders’
Financial Performance and
Remuneration
Section 4
Details of the Executive
Remuneration Framework
Section 5
Remuneration Governance
Section 6
Non-Executive Director
Remuneration and
Statutory Remuneration
Section 7
Key Terms of Executive KMP
Employment Contracts and
Statutory Remuneration
Section 8
Additional Required
Disclosures
92
93
94
95
100
103
104
105
106
Overview of FY20
Remuneration outcomes
Total Fixed Remuneration (TFR)
During FY20 the TFR of the MD & CEO and Senior
Executive was reviewed as part of our annual
remuneration review process. As a result, effective
from 1 January 2020, the MD & CEO received a
2.5% fixed remuneration increase and the Chief
Financial Officer received a 1.0% increase. Both
of these increases where made in consideration
of market movements, individual performance
outcomes and benchmarking to relevant peers.
There was no increase provided to General
Manager Rural Supplies.
Mr Cornish’s fixed remuneration was adjusted by
25% effective from 1 October 2019 to take into
account an increased responsibility in his broader
role as General Manager Network in addition to
acting as General Manager Northern Zone for
majority of FY20.
Post the FY20 year, the Board reviewed Mr Allison’s
fixed remuneration against relevant external
benchmarking. With the AIRR acquisition came a
material increase in the MD & CEO role complexity
and scope and the Board approved a 5.1% fixed
remuneration increase to Mr Allison effective from
1 January 2021.
Variable Remuneration
Short-Term Incentives
Elders Short-Term Incentive (STI) pool is aligned
with company performance and requires
achievement against budgeted underlying EBIT,
targeted Return on Capital and consideration to
safety and compliance measures.
The MD & CEO’s FY20 STI outcome as a percentage
of maximum opportunity was 94%. This outcome
reflects Elders’ strongest underlying EBIT result
in a decade and significantly exceeds the FY19
financial results where due to the financial gateway
not being met no STI was paid.
In FY20 the average STI outcome for Senior
Executive KMP as a percentage of maximum
opportunity was 92%. Each Senior Executive’s
STI outcome was similarly determined by the
MD & CEO and Board taking into account Elders’
and individual performance against the key
performance indicators. Further detail on the STI
outcomes are outlined in section 3.1 on page 95.
Long-Term Incentives vesting in the year
The performance rights granted in the 2018
financial year were tested following the end of the
three-year performance period which concluded
30 September 2020. Testing against the three
elements – Total Shareholder Return, Earnings per
Share growth and Return on Capital, resulted in
75% of the total grant vesting.
Elders delivered:
⋅ a Total Shareholder Return outcome of more
than double the stretch target of 15%, resulting
in the full 50% of this tranche vesting
⋅ an EPS CAGR outcome of 11.7% exceeded
the target of 10% resulting in the full 25%
of this tranche vesting
⋅ a Return on Capital outcome of 18.7% was
below the target of 20%, thus the 25% of
grant applicable to this tranche lapsed
Further details on the vesting outcomes are
outlined in table 6 on page 96.
Remuneration Changes
for FY21
⋅ Relative TSR replaces the current absolute TSR
performance measure for the FY21 Long-Term
Incentive grant, with an additional requirement
for an absolute TSR greater than or equal to zero
in order for this tranche of rights to vest
⋅ A one year “holding lock” will be applied to
shares that vest under the FY21 Long-Term
Incentive grant
⋅ For FY21 the STI measures and weightings for
the MD & CEO have been refined with a higher
weighting of financial performance measures
increasing to 60% (previously 40%) with the
remaining 40% covering people and safety,
customer and key strategic performance
measures. These weightings will be similarly
cascaded to Senior Executives
⋅ From FY21 40% of STI payments will be deferred
into equity, with half vesting after one year and
half vesting after two years
⋅ The scope of the Minimum Shareholding Policy
was reviewed and now extends to NEDs, MD &
CEO and Executives from FY21
92
Key Management Personnel
In this report, Key Management Personnel (KMP) are determined in accordance with the definition under the Accounting Standard AASB124
Related Party Disclosures as those persons with authority and responsibility for planning, directing, and controlling the activities of Elders during
the financial year.
Members of KMP comprise:
⋅ Non-Executive Directors (NED)
⋅ Managing Director and Chief Executive Officer (MD & CEO)
⋅ Chief Financial Officer (CFO)
⋅ General Manager Network
⋅ General Manager Rural Supplies
The MD & CEO and Senior Executives considered KMP are referred to collectively as “Executive KMP” in this report.
Since the last reporting period Malcolm Hunt, Zone General Manager South, is no longer a KMP due to the restructure of our national network from
1 October 2019, which resulted in the split of Zone South into Victoria/Riverina (for which Mr Hunt is responsible) and Zone Central, to enable a greater
focus on our growth and delivery of targets. Post the FY20 reporting period, Mr Norton departed Elders effective 31 October 2020, however will
remain a KMP for FY21 for the period employed.
Table 1 — Key Management Personnel
Name
Position
Status
Date as KMP (if not a full year)
Non-Executive Directors (NED)
I Wilton
R Clubb
D Eilert
M Quinn
M Carroll
Chair
Director
Director
Director
Director
Full year
Full year
Full year
Part year
Part year
MD & CEO and Senior Executives (Executive KMP)
M C Allison
R I Davey
R L Norton1
J H Cornish
Managing Director and CEO
Chief Financial Officer
General Manager Rural Supplies
General Manager Network
1 Effective 31 October 2020 Mr Norton departed Elders.
Commenced 20 February 2020
Ceased 2 July 2020
Elders2020 Annual Report Directors' Report – Remuneration Report
93
Section 1 — Response to FY19 strike
At our 2019 AGM, 36.4% of votes cast were against the adoption of the FY19 Remuneration Report, constituting a ‘first strike’ under the Corporations
Act 2001 (Cth). Eligible shareholder participation in the resolution was 55%, resulting in 20% of eligible shareholders against the resolution. The
following table summarises the issues raised by our shareholders and proxy advisors in connection with the FY19 Remuneration Report resolution
and as part of our review process. Our response to these concerns are outlined below.
Table 2 — Issues raised in FY19 Remuneration Report strike
Issue raised
What it looked like in FY19
What has changed or will change?
Why has it changed?
Where non-statutory or underlying
measures are used, Elders will provide
additional disclosures showing the
reconciliation with statutory measures
and provide greater transparency for any
adjustments made.
We acknowledge shareholder concerns
that the link between performance and
the vesting outcome was not clear.
Additional disclosures will strengthen
the link between performance and pay
outcomes to shareholders.
Clarity and
communication around
the calculation of the
EPS hurdle
Use of cliff vesting for
rights subject to EPS and
ROC hurdles for the LTI
For the LTI vesting in FY19, the tranche
subject to the EPS measure vested in full
upon achievement of target. Shareholders
raised concern regarding the adjustments
and inconsistency applied for the AIRR
acquisition to the calculation on the
vesting outcome of the EPS tranche.
For the LTI award vesting in FY19, the
rights subject to the EPS and ROC hurdles
vested in full upon achievement of target
(i.e. cliff vesting).
Use of absolute Total
Shareholder Return
(aTSR) for the LTI
50% of the FY19 LTI grant was subject
to an aTSR performance measure.
Future LTI grants incorporate a sliding
scale vesting for either EPS and/or ROC.
The FY20 LTI grant, EPS and ROC hurdles
vest on a sliding scale, with 50% of rights
vest at target, on a sliding scale up to
100% at stretch performance.
For the FY21 LTI grant, 50% of the
rights will be subject to a relative Total
Shareholder Return (rTSR) performance
condition with the remaining 50% subject
to an EPS measure. The rTSR tranche will
also be subject to an aTSR gateway greater
than or equal to zero, which means that
even if rTSR performance is above median
of the peer group, the tranche will not vest
if aTSR is negative.
Dividend adjustments
for performance rights
Executive KMPs received additional
ordinary shares equivalent to the value
of dividends not received over the
performance period for their vested rights.
For the FY21 LTI grant participants will
no longer receive additional shares
equivalent to the value of dividends not
received during the performance period
for any vested rights.
STI performance
measures should have
a heavier weighting
towards financial
measures
Executive KMPs were eligible for the
STI if threshold financial performance
hurdles were met, being 90% of approved
budgeted underlying EBIT and targeted
Return on Capital.
Performance was assessed against four
KPIs being: 1) Financial and Operational
Performance (40%); 2) Efficiency and
Growth (35%); 3) People and Key
Relationships (15%); and 4) Safety (10%).
Following Elders’ review of the executive
remuneration framework, the following
changes have been implemented for the
FY21 STI:
⋅ greater weighting on financial measures
⋅ introduction of partial deferral into
equity
Additional disclosure of the link between
the performance measure and the
Company’s business strategy has been
provided.
Actual STI targets
are not disclosed
Individual STI performance targets were
not disclosed. However details of each
Executive KMP’s performance outcome,
maximum STI opportunity and actual
STI is provided.
To increase transparency of STI
performance targets greater disclosure
will be provided retrospectively and
how performance is calculated for
each measure will be provided.
This increase in transparency will provide
further clarity for shareholders.
We acknowledge concerns with the ‘all
or nothing’ outcome of cliff vesting. We
have adopted ‘sliding scale’ vesting to
strengthen linkages between performance
and reward.
Although the aTSR measure was an
appropriate measure during Elders’
turnaround phase the Board recognises
that a move to a rTSR is now more
aligned to our strategy and will compare
our performance to a broader group of
companies. It also provides a shareholder
perspective of Elders’ performance in the
market.
Elders’ rTSR will be measured against the
companies in the S&P/ASX 200 index
excluding the companies in the S&P/ASX
100 as at the start of the performance
period.
The Board acknowledges shareholder
feedback on this issue and this change
aligns to market practice which is moving
away from compensating for dividends not
received during the performance period
for any vested rights.
The changes to the FY21 STI have been
made to ensure the STI structure is fit
for purpose, and aligned with Elders’
business strategy and shareholder
expectations.
94
Section 2 — Overview of FY20 Executive Remuneration
2.1 Remuneration Principles
Elders’ remuneration framework is designed to attract, retain and motivate those people who can drive Elders’ culture and deliver our business
strategy and supports alignment to long-term overall company performance and creation of shareholder value.
To drive and support
delivery of Elders’
strategy and create
long-term shareholder
value.
Drive outcomes and
provide a balance
between motivation,
risk and reward.
Market competitive
to attract and retain
key talent.
Reward is
commensurate
with performance.
Decisions are objective
and consistent.
Simple and flexible –
allowing for business
growth.
Reinforces Elders’
culture, vision and
values.
2.2 Remuneration Structure and Mix
Remuneration packages are structured so a portion of an Executive KMP’s reward depends on meeting individual, business unit and Elders’ targets
and objectives, including maximising returns for shareholders.
Chart 1 sets out the remuneration structure and timing delivery for Executive KMP.
Chart 1 — Executive KMP FY20 remuneration elements and structure
Fixed Remuneration
Attracts and retains executives
with the capability and
experience to deliver our
strategy.
100% paid
in cash
Base salary,
superannuation
and other
benefits
Short-Term Incentive
Motivates and rewards for
achievement of annual
performance against Elders’
overall results and individual key
performance indicators (KPIs).
Paid in cash or
deferred into
shares at the
Executive KMP’s
election
Subject to
performance
targets across
the performance
year*
Long-Term Incentive
Supports alignment to long-term
overall company performance
rewarding for delivery of longer
term strategy and creating
shareholder value.
50% subject to absolute TSR performance
100% delivered
in performance
rights
25% subject to EPS growth
25% subject to ROC performance
Additional minimum share price vesting
condition is gateway to any rights vesting.
Year 1
Year 2
Year 3
Individual remuneration is reviewed annually
and set with regard to:
⋅ market position compared to similar roles
in comparable companies
⋅ Executive’s role and responsibilities and
individual experience and performance
The Board monitors the CEO’s performance on
an ongoing basis throughout the year through
regular management reporting and reporting
of the various Board Committees.
Assessment of Executive KMP performance
against the relevant KPIs is determined by
the MD & CEO (except for himself which is
determined by the Remuneration and Human
Resources Committee) with recommendations
referred by the Committee to the Board for
approval.
Table 3 summaries the key components
of the STI Plan.
LTI grants are made to the MD & CEO and
selected senior management. These offers
are made under the Elders Executive Incentive
Plan (Plan), adopted in December 2014.
Participation is at the Board’s discretion.
Table 10 summaries the current LTI grants.
* Any Short-Term Incentive (STI) payable to Senior Executives who become eligible to participate in the STI Plan during the course of the year, either through joining Elders or being promoted,
will be pro-rated accordingly.
Remuneration mix
Chart 2 assumes the at-risk remuneration components are at their maximum, and represents Elders’ intended policy in respect of remuneration
structure.
Chart 2 — Executive KMP FY20 Remuneration mix at maximum
CEO
Senior Executives
36%
32%
27%
TFR
STI
LTI
32%
24%
49%
Elders2020 Annual Report Directors' Report – Remuneration Report
95
Section 3 — Link Between Elders’ Financial Performance and Remuneration
Table 8 (on page 98) shows Elders’ performance in relation to a number of financial and operational performance measures over a five-year period. STI
payments are awarded to our Executive KMP on achievement of a range of financial and non-financial performance targets (see Tables 3 & 4 below).
3.1 Overview of FY20 STI Outcomes
Table 3 — Executive KMP FY20 STI performance measures
Category
Performance measure
Weighting Why was it chosen?
How is it measured?
Gateway
Financial
measures
Strategic
measures
-
Achievement of
threshold performance
for underlying EBIT
and ROC
Ensures Executive KMP will only be awarded
where threshold financial performance has
been achieved.
Financial and
operational
performance
40%
Key indicators of Elders’ financial performance
and aligns to Elders’ Eight Point Plan objectives.
Efficiency and growth
35%
People and key
relationships
15%
The Board believes efficiency and growth
strategic measures directly demonstrate the
delivery of critical components of Elders’ Eight
Point Plan and are fundamental key drivers of
long-term value creation.
Focusing on our people through diversity
and employee engagement is critical to
continue to attract and retain the talent needed
to deliver our strategy. Key relationships
is about driving business success through
our ability to differentiate in an increasingly
competitive market.
Safety
10%
Driving significant progress in achieving a
“zero harm” workplace.
Threshold is based on achievement of 90%
of the Board approved underlying EBIT budget
and targeted ROC. Below this gateway no STI
is payable to Executive KMP.
Achievement of Board approved budget financial
outcomes, including underlying EBIT and ROC
targets and EBITDA, Underlying NPAT, Operating
Cash Flow and Leverage targets.
The MD & CEO is measured by the overall key
milestones of the Eight Point Plan which is
translated into an Annual Operating Plan.
For Senior Executive KMP it is measured on
achievement of their Business Unit’s key
milestones in this Plan.
People and key relationships is measured through
achievement of Employee Effectiveness Survey
results, positive movement in the representation
of women in management positions across
the organisation and improvement in our net
promoter score. In addition the MD & CEO is
also measured on outcomes in strengthening
leadership capability.
Measured through reduction in total lost time
injuries and maintenance or improvement in
Employee Effectiveness Survey safety questions.
The FY20 STI awards reflect Elders’ strongest financial results in a decade and which significantly exceeded the FY19 financial results where due
to the financial gateway not being met no STI was paid. The following tables provide a summary of the Executive KMP performance targets and
outcomes for FY20:
Table 4 — MD & CEO FY20 STI outcomes
Key Priority
Measures
Safety (10%)
Lost time injuries
Employee Effectiveness outcomes for safety:
My work area is safe
Nothing so important as safety
Financial (40%)1 Underlying EBIT
Underlying EBITDA
Underlying NPAT
Return on capital
Operating Cash Flow
Leverage for FY20
People and Key
Relationships
(15%)
Employee Effectiveness outcomes for:
Engagement
Enablement
Net promoter score
Senior Executive succession planning
Positive trend from previous year for the Board
endorsed measurable diversity objective 1;
25% of women in management positions across
the organisation by 30 September 2021
Outcome
FY20 Performance Commentary
2
92%
90%
119.4m
127.9m
109.0m
18.7%
110.5m
1.6
76%
76%
46
15%
Reduction from nine lost time injuries in FY19 to two in FY20
and consistent positive Employee Effectiveness Survey results,
therefore 100% of this KPI was awarded.
FY20 EBIT was 62% higher than FY19 and substantially
exceeded budget and prevailing market expectations at the
start of the year, due to higher revenue and improved margin,
and therefore 100% of this KPI was awarded.
Consistently strong Employee Effectiveness Survey results with
FY20 remaining above global high performing benchmark and
net promoter score exceeded stretch target. Progress towards
development of the Executive team and female representation
in management positions has occurred. Therefore 60% of this
KPI was awarded.
Efficiency and
Growth (35%)
Deliver all FY20 key milestones
in the Eight Point Plan (including AIRR)
Deliver AIRR synergies
Delivered on all
aspects of Eight
Point Plan
Exceeded Target
AIRR, acquired in November 2019, was successfully integrated
into Elders and outperformed the financial metrics assumed
at the time of acquisition. Substantial synergies have been
achieved through backward integration into the new wholesale
business. Therefore 100% of this KPI was awarded.
Maximum performance achieved
Threshold/Minimum performance achieved
Threshold/Minimum performance not met
1 Based on Pre-AASB 16 Leases
96
Table 5 — Executive KMP FY20 STI outcomes and performance against targets
KMP
Safety (10%)
Financial and
Operational
Performance (40%)
People and Key
Relationships (15%)
Efficiency
and Growth
(35%)
Maximum STI
Opportunity
Awarded
STI as % of
Maximum
Forfeited
STI as % of
Maximum
Company
Business
Unit
Company
Business
Unit
Company
Business
Unit
-
-
-
Name
Position Title
M C Allison
MD & CEO
R I Davey
CFO
R L Norton
GM Rural Supplies
J H Cornish
GM Network
$
951,349
%
94
269,205
100
260,265
237,500
96
85
%
6
0
4
15
Maximum performance achieved
Threshold/Minimum performance achieved
Threshold/Minimum performance not met
3.2 Overview of FY20 LTI Outcomes
The FY18 Long-Term Incentive grant, with a performance period of 3 years, concluded 30 September 2020.
This grant was provided to help drive Elders’ Eight Point Plan and was underpinned by three performance measures of aTSR, EPS and ROC with
challenging performance targets. The testing resulted in 75% vesting of total rights with the outcomes as follows:
Table 6 — Finalised Long-Term Incentive – 2018 grant
% of total grant Performance measures
Outcome of testing
Elders’ TSR Compound Average Growth Rate over the performance period
was 34.6% being higher than the stretch hurdle of 15%.
Resulting in 100% vesting of this tranche.
Notes regarding calculation:
The starting price to calculate the Compound Average Growth Rate was Elders
5 trading day VWAP up to and including 30 September 2017 of $4.8286 and
the closing share price of Elders 5 trading day VWAP as at 30 September 2020
of $10.8412.
Dividends paid over the performance period were $0.60 per share.
An external consultant was engaged to calculate the TSR outcome.
Tranche 1 – Total Shareholder Return (TSR)
50%
Based on Elders’ average annual compound TSR
over the three year performance period 1 October
2017 ending on 30 September 2020.
TSR rights were subject to a target goal
and a stretch goal.
The % of TSR performance rights that vest
were determined as follows:
Absolute TSR over the
performance period
% of Rights that vest
Less than 12%
Equals 12%
Greater than 12%
but less than 15%
Equal to or greater
than 15%
Nil
50%
50-100%, on a
straight-line sliding scale
100%
Absolute TSR was measured using opening and
closing share prices determined as follows:
⋅ the opening share price value of $4.8286
⋅ the closing share price value based on the
5 trading day Volume Weighted Average Price
(VWAP) up to and including the last day
of the performance period
⋅ dividends paid
Elders2020 Annual Report Directors' Report – Remuneration Report
97
% of total grant Performance measures
Outcome of testing
Tranche 2 – Earnings per Share Growth (EPS)
25%
EPS rights vest in full if the EPS Compound Annual
Growth Rate (CAGR) over the performance period
was greater than or equal to 10%.
Based on feedback received from Shareholders in connection with the 2019
Remuneration Report the Board has reviewed the calculation methodology for EPS.
For this 2018 LTI grant and those other grants on foot, EPS will be calculated using
the weighted average shares as the denominator and underlying NPAT as numerator
to determine the EPS measure.
Underlying NPAT is consistent with the LTI grant terms and conditions however, the
grant was silent on the methodology for the share denominator calculation for EPS.
The use of weighted average shares is a change to prior year calculations for EPS.
This revised calculation methodology aligns to market practice.
The EPS outcome for FY20 was determined as follows:
Weighted avg. no. of shares1
113,859
115,523
121,006
154,094
FY17
FY18
FY19
FY20
Underlying NPAT ($ million)
EPS (cents)
CAGR
57.72
50.7
63.7
55.1
63.6
52.6
1 shares exclude dilutive performance rights which haven’t yet vested
2 As per FY17 Annual Report
* Pre-AASB 16 Leases
Reconciliation of statutory profit to underlying profit used to
calculate EPS for this LTI grant
Statutory Profit ($ million)
Adjustment for non-underlying profit ($ million)
Underlying profit ($ million)
Adjustment for impact of AASB 16 Leases ($ million)
Underlying profit pre-AASB 16 Leases ($ million)
Weighted average shares (millions of shares)
EPS used for LTIP (cents) – Underlying Profit pre-AASB 16 Leases
Basic EPS (cents) – Statutory Profit
109.0*
70.7
11.7%
FY20
122.9
(15.2)
107.7
1.3
109.0
154.1
70.7
79.8
Note: The FY20 EPS outcome applying AASB 16 Leases is 69.9¢, with a CAGR over the performance
period of 11.3%, which is above the vesting target of 10%.
For a reconciliation between underlying and reported NPAT please see the Operating
and Financial Review section of the Annual Report on page 13.
The weighted average shares are displayed in note 5 of the Financial Statements.
This EPS outcome of 11.7% exceeded the Target of 10%.
Resulting in 100% vesting of this tranche.
Tranche 3 – Return on Capital (ROC)
25%
ROC rights vest in full if ROC was greater than
or equal to 20% for the financial year ending
30 September 2020.
Elders’ return on capital as at 30 September 2020 was 18.7% being less
than the 20% target.
ROC = Underlying EBIT/Average Net Operating Assets
Additional Vesting Condition
In addition to the performance conditions above, the performance
rights will only vest if the share price on the vesting date is greater than
or equal to the 5 trading day VWAP up to and including 30 September
2017, being a day prior to the start of the performance period.
Average Net Operating Assets = Working Capital, PP&E, Investments, Intangibles, Tax
Balances Recognised on Acquisitions and Provisions (Excludes Elders Brand Name)
Resulting in 0% vesting of this tranche.
The Share Price as at 30 September 2017 was $4.8286 therefore it is
expected based on the share price as at the date of this Report, the vesting
condition will be met.
One fully paid share in Elders will be allocated for each vested performance right. The total number of vested performance rights under the 2018 grant is 465,000. In addition, 25,732 additional
shares will be allocated at time of vesting for the value of dividends not received on the vested rights during the performance period. Individual vesting outcomes are outlined in Table 15.
98
3.3 Summary of FY20 Executive KMP Outcomes
Table 7 below presents the remuneration paid or payable, or vested for, the MD & CEO and Senior Executive KMP in respect of the 2020 financial year.
The information in Table 7 is unaudited and is different from and additional to that required by Accounting Standards and statutory requirements which
is provided in Table 14 on page 105.
Table 7 — Executive KMP Remuneration outcomes for FY20 (unaudited and non-IFRS)
$
Base salary
STI1
LTI2
Super-
annuation
Other
(monetary)3
Other (non-
monetary)4
M C Allison MD & CEO
R I Davey
CFO
R L Norton
GM Rural Supplies
J H Cornish GM Network
924,373
515,901
499,356
453,825
894,268
1,404,266
269,205
249,419
201,875
300,913
-
300,913
21,176
21,176
21,176
21,176
20,738
6,306
1,212
Total
3,244,083
1,107,195
776,257
999,739
1 STI that will be paid for performance in FY20.
2 Value of any performance rights that vested in the 2020 financial year based on the 5 day VWAP as at the date of vesting (performance period ended 30 September 2019 and vested 12 November
2019). This figure does not represent the value of rights granted during the 2020 financial year.
3 Living Away from home allowance paid to GM Network for the period 1 October 2019 – 31 March 2020 to cover the actual cost of accommodation incurred while residing in Brisbane to undertake
his role as General Manager Network and Northern Zone.
4 Provision of leased car parking.
3.4 Historical Five Year Performance
Table 8 below provides a summary of Elders’ key financial results over the past five financial years and a summary of how those results have been
reflected in the STI and LTI remuneration outcomes. In addition, Chart 3 shows Elders’ TSR performance over the last five years against the ASX/S&P
200 Accumulation Index.
Table 8 — Elders’ Performance and Remuneration Outcomes
Performance measure ($ millions)
2016
2017
2018
2019
20201
Earnings
Sales revenue
Underlying EBIT
Reported NPAT
Underlying NPAT
Return on Capital based on underlying earnings
Cashflow from operating activities
Shareholder value
Share Price ($)2
Total Dividend Paid Per Share (cents)3
Remuneration outcomes
STI – average % received of maximum opportunity
LTI – vesting %
1,519.3
1,582.5
1,599.4
1,626.0
2,092.6
56.1
51.6
41.2
28.1%
48.7
3.77
-
54%
n/a4
71.0
116.0
58.4
28.6%
81.6
4.73
-
88%
100%
74.5
71.6
63.6
24.2%
(12.1)
7.00
24.0
81%
100%
73.7
68.9
63.6
18.2%
11.2
6.32
18.0
-
75%
119.4
124.2
109.0
18.7%
110.5
10.85
18.0
94%
75%
1 Figures for 2020 are pre-AASB 16 Leases except reported EPS basic which is post-AASB 16.
2 Share prices are as at 30 September for the respective year.
3 Dividends are currently paid twice a year, an interim and final dividend. The amounts included in the table relates to dividends paid during the financial year. Therefore, for each respective year,
the amount includes the dividend paid for the previous year final dividend, the current year interim dividend and any special dividends paid in that year.
4 No Long-Term Incentive grants were due to vest in the 2016 financial year hence the reason of nil vesting in 2016.
Note: The 2019 Sales revenue figure in the table above is restated to reflect current year comparative Financial Statements.
Elders2020 Annual Report Directors' Report – Remuneration Report
99
Chart 3 — Absolute TSR %
The following chart shows Elders’ annual TSR performance over the last five years against the ASX/S&P 200 Accumulation Index. Elders’ LTI Plans on
foot include an absolute TSR performance condition.
In the FY21 LTI grant a relative TSR replaces absolute TSR performance.
Full vesting of the TSR tranche (50% of total grant) was achieved for grants vesting 2017-20.
77.1%
80%
Elders
ASX200
40%
26.8%
48.1%
13.2%
9.2%
14.0%
12.5%
0%
0.6%
(7.0%)
(10.2%)
%
R
S
T
e
t
u
o
s
b
A
l
(20%)
2016
2017
2018
2019
2020
Source: Thomson Reuters
Note: TSR in the graph has been calculated using the 5 day trading VWAP.
Chart 4 — LTI Plan performance outcomes relative to Elders’ share price
The following chart compares Elders’ total LTI vesting results (as a percentage of grant maximum opportunity) for grants in FY15-18 with a 3-year
performance period to Elders’ share price during the same period:
12
11
10
9
8
7
6
5
4
3
2
1
0
)
$
(
e
c
i
r
p
e
r
a
h
s
s
r
e
d
E
l
Elders share price
LTI award (% vested)
100%
100%
75%
75%
1/10/2014
30/09/2017
LTI Grant: FY15
30/09/2018
LTI Grant: FY16
30/09/2019
LTI Grant: FY17
30/09/2020
LTI Grant: FY18
)
d
e
t
s
e
v
%
(
d
r
a
w
a
I
T
L
120
100
80
60
40
20
0
100
Section 4 — Details of the Executive Remuneration Framework
4.1 Current Short-Term and Long-Term Incentive Plan Structures
The key features of the Short-Term and Long-Term Incentive Plan structures applying to Executive KMP during the year are set out in the tables below:
Table 9 — Short-Term Incentive Plan
MD & CEO
Senior Executives
Performance period
Annual aligned with financial year – 1 October 2019 to 30 September 2020
Maximum STI opportunity as % of TFR
100% of TFR
50% of TFR
Performance measure(s)
Gateway: Underlying EBIT and ROC hurdles (90% of Target) are achieved.
Exercise of discretion
Once the gateway has been achieved, individual STI for the MD & CEO and Senior Executives is awarded based
on achievement of individual KPIs which contain a balance of challenging financial and operational targets and
are aligned to business strategy. Refer to Table 3 in Section 3.1 for further details on Executive KMP FY20 STI
performance measures.
The MD & CEO may recommend discretionary incentive payments to Senior Executives for approval by the
Committee. The Board has overriding discretion in determining an Executive KMP’s individual STI outcome and
may take into account factors such as any material risk events identified and the impact and accountability
of the Executive in those events, any other special circumstances (e.g. acquisitions and divestments) and any
breach of Elders’ Code of Conduct or One Elders values.
Service condition
Any STI payable to Executive KMP who become eligible to participate in the STI Plan during the course
of the year, either through joining Elders or being promoted within Elders, will be pro-rated accordingly.
Clawback
Elders may recover amounts made, where the STI was calculated on financial results due to:
⋅ a material non-compliance with any financial reporting requirement; or
⋅ misconduct of any employees, contractors or advisers; and
as a result of which the actual metrics and outcomes used to determine the STI were incorrect, and as such
a lower payment would have been made based on the restated results.
Table 10 — Long-Term Incentive Plan
Performance period (3 years)
1 October 2018 to 30 September 2021
1 October 2019 to 30 September 2022
Maximum LTI Opportunity % of TFR
MD & CEO – 110% Senior Executives – 55%
FY19
FY20
Grant date
As at 30 September 2020
No. of rights outstanding
and no. of participants
Grant methodology
Performance conditions
13-Dec-18
15-Feb-19
MD & CEO
other participants
12-Dec-19
21-Feb-20
MD & CEO
other participants
146,000 Rights
MD & CEO
166,000 Rights
MD & CEO
276,000 Rights
10 other participants
380,000 Rights
13 other participants
Performance rights allocated under this plan are determined using “face value methodology” being the
5 trading day VWAP at the day prior to the start of the performance period (i.e. 30 September).
The performance rights will be split into three tranches, each carrying a different performance condition
and weighting.
Tranche 1
Tranche 2
Tranche 3
Absolute Total Shareholder Return (TSR)
Earnings per Share (EPS) growth
Return on Capital (ROC)
50% weighting
25% weighting
25% weighting
Elders2020 Annual Report Directors' Report – Remuneration Report
101
Performance measures and vesting
Tranche 1 – Absolute TSR Performance Rights
50% of rights vest subject to an absolute TSR performance condition. The absolute TSR performance condition
is tested based on Elders’ average annual compound TSR over the three-year performance period. The % of TSR
rights that will vest is determined as follows:
Target
Stretch
Absolute TSR over performance period
% of rights in
tranche that vest
10%
14%
50%
100%
⋅ less than Target no rights vest
⋅ if greater than Target but less than Stretch is achieved, 50-100% of rights vest on a straight line sliding scale
Absolute TSR will be measured using opening and closing share prices (including dividends paid in the
performance period) determined as follows:
⋅ the opening share price value, being the 5 trading day VWAP up to and including 30 September the day prior
to the first day of the performance period
⋅ the closing share price value will be based on the 5 trading day VWAP up to and including the last day of the
performance period
Tranche 2 – EPS Growth Performance Rights
25% of rights vest in full if Earnings Per Share Compound Annual Growth Rate (EPS CAGR) is greater than
or equal to Target for the performance period. The starting EPS value is EPS as at 30 September prior to the
commencement of the performance period. The % of EPS rights that will vest is determined as follows:
Target
Stretch
EPS CAGR over performance period
% of rights in
tranche that vest
7%
10%
50%
100%
⋅ less than Target no rights vest
⋅ if greater than Target but less than Stretch is achieved, 50-100% of rights vest on a straight line sliding scale
Tranche 3 – ROC Performance Rights
25% of rights vest in full if ROC is greater than or equal to Target as follows:
FY19
n/a
ROC
FY20
15% average ROC over the
performance period
20% ROC for the financial year ending
on the last day of performance period.
18% average ROC over the
performance period
% of rights in
tranche that vest
50%
100%
Target
Stretch
⋅ less than Target no rights vest
⋅ if greater than Target but less than Stretch is achieved, 50-100% of rights vest on a straight line sliding scale
In addition to the performance conditions above, performance rights will only vest if the share price on the
vesting date is greater than or equal to the 5 trading day VWAP up to and including 30 September in the
financial year prior to the start of the performance period.
Upon vesting of performance rights one fully paid share in Elders will be allocated for each performance right.
Testing of the performance conditions will occur once the results for the relevant performance period have
been audited and approved by the Board. There will be no re-testing of performance.
The Board may determine that any unvested rights will lapse or be forfeited, and/or the participant must pay
or repay as a debt, proceeds from shares allocated in certain circumstances such as, but not limited to, fraud,
gross misconduct, breach of duties or obligations.
For each fully paid ordinary share allocated on vesting, participants will receive additional ordinary shares
equivalent to the value of the dividends paid (but not received) over the performance period. No dividend
equivalent shares are provided on rights which do not vest.
The Board has overriding discretion over the treatment of unvested performance rights when an Executive KMP
ceases employment. On cessation of employment, the Board may at its discretion allow the Executive KMP to
retain a pro-rated number of rights based on the portion of the performance period the participant has worked
and the rights to remain “on foot” until the end of the performance period. All other performance rights will
lapse on cessation.
KMP are not permitted to deal in Elders’ securities without prior permission from Elders and are only permitted
to trade during open periods and are required to disclose all dealings. The measures are designed principally to
manage insider trading risk and align the interests of KMP with Elders’ security holders.
Additional vesting condition
Performance testing
Other
Clawback
Dividends
Treatment of unvested rights
on cessation of employment
Dealing in Securities
102
Corporate actions/reconstructions
Board discretion
Prior to the allocation of shares to a participant upon vesting of performance rights or exercise of options (as the
case may be), the Board may make any adjustments it considers appropriate to the terms of a performance right
and/ or option granted to a participant in order to minimise or eliminate any material advantage or disadvantage
to a participant resulting from a corporate action or capital reconstruction.
The Board may exercise its discretion to make adjustments it considers appropriate in light of the purpose and
intent of the Plan and the performance conditions. This may include making adjustments to ensure that the
interests of the relevant Participant are not, in the opinion of the Board, materially prejudiced or advantaged
relative to the position reasonably anticipated at the time of the grant. The Board uses a number of principles
to assess whether to make an adjustment, including:
⋅ maintaining the desired level of stretch for targets
⋅ maintaining the integrity and intention of the reward
⋅ aligning outcomes with general market and shareholder expectations
⋅ consistent treatment across remuneration elements and performance period
⋅ preserving the success and intent of transactions or other actions that have materially benefited the company
If discretion is to be exercised, it may be a result of events such as:
⋅ acquisitions
⋅ divestments
⋅ legislative or accounting standard changes
⋅ capital reconstructions or corporate actions
⋅ internal reorganisation of the business and/or group assets
⋅ events affecting comparator companies including, but not limited to, takeovers, mergers or de-mergers that
might occur during the Performance Period
⋅ events, circumstances or significant items outside of the control of management or which are not reflective
of management performance
4.2 Changes for FY21
A review of Elders’ Reward framework was conducted during FY20 and the review identified several opportunities to strengthen the alignment
of Executives’ remuneration outcomes and shareholders experience and further drive a performance culture which will be implemented for FY21
including the following:
⋅ a Minimum Shareholding requirement has been introduced which will require the MD & CEO and Senior Executive to build, over a five-year period
and then maintain, a minimum shareholding of Elders’ shares. The minimum shareholding is set as a percentage of Total Fixed Remuneration (TFR)
which for the MD & CEO is 100% and for Executive is 50%. A policy already existed for NEDs, being 50% of their annual aggregate fee, however from
FY21 the minimum shareholding requirement will increase to 100% of NED base fees. These levels of minimum shareholdings are in accordance
with market practice
⋅ for FY21 the STI measures and weightings for the MD & CEO and Senior Executives have been refined with a higher weighting of financial
performance measures increasing to 60% (previously 40%) with the remaining 40% covering people and safety, customer and key strategic
performance measures
⋅ from FY21 STI awards are delivered 60% as cash and 40% deferred into equity for two years (50% vesting after year one and 50% after year two).
This 40% deferred component supports increased share ownership and is a risk management lever to facilitate any clawback during the deferral
period
⋅ for FY21 the LTI performance measures will be reduced to two measures being relative TSR and EPS, with Return on Capital (ROC) remaining as a
STI measure only. The move to a relative TSR performance condition instead of the current absolute TSR aligns to Elders’ strategy and will compare
our performance to a broader group of companies and provides a shareholder perspective of Elders’ performance in the market
⋅ the comparator peer group used to calculate relative TSR comprises companies in the S&P/ASX 200 index excluding companies in the S&P/ASX 100
as at the start of the performance period. Any companies that are delisted from the ASX during the performance period or suspended from trading
at the end of the performance period will be removed from the vesting assessment
⋅ a gateway of an absolute TSR over the Performance Period, is greater than or equal to zero will apply for the FY21 LTI grant. If absolute TSR is
negative over the performance period no rights will vest in this tranche, meaning even if rTSR performance is above median of the peer group, the
tranche will not vest if an aTSR is negative
⋅ any rights that vest under the FY21 LTI grant will be subject to a 12 month holding lock to support share ownership and act as a risk management
lever. Participants will also no longer be compensated for the value of dividends not received over the performance period
Elders2020 Annual Report Directors' Report – Remuneration Report
103
Section 5 — Remuneration Governance
The Board Remuneration and Human Resources Committee operates in accordance with the guidance set out in the 4th Edition ASX Corporate
Governance Council Principles and Recommendations.
Further information on the role and responsibilities of the Committee are set out in the Corporate Governance Statement, which along with the
Committee’s Charter is published on Elders’ website at elders.com.au.
The Committee is comprised entirely of independent Non-Executive Directors.
Board
Reviews the performance of individual directors and the executive
team, and approves the CEO’s remuneration.
Audit, Risk and Compliance
Committee
Advises the RHRC of material risk
management issues or compliance
breaches.
Remuneration
and Human Resources
Committee (RHRC)
Makes recommendations to the
Board on people management and
remuneration strategies and policies.
Ensures KMP remuneration outcomes
are appropriate and aligned to
company performance and
shareholder expectations.
Management
Provides briefs or recommendations to
the RHRC on the remuneration strategy
and framework.
Independent external advisors
Provide independent advice to the
RHRC on remuneration and market
practice.
5.1 Independent remuneration advice
The Committee is briefed by management, however, the Committee makes all decisions free of the influence of management.
Further to the management briefings, to assist in its decision-making, the Committee may, from time to time, seek independent advice from
remuneration advisors, and in so doing will directly engage with the consultant without management involvement.
In the year ending 30 September 2020, the Committee engaged remuneration advisors EY to assist with the remuneration framework review.
However, no remuneration recommendations, as defined by the Corporations Act 2001 (Cth), were made by remuneration advisors.
104
Section 6 — Non-Executive Director Remuneration and Statutory Remuneration
6.1 Remuneration Framework and Policy
Non-Executive Directors are remunerated by way of fees in the form of cash and superannuation. Elders’ Non-Executive Director remuneration
practices are in accordance with Recommendation 8.2 of the ASX Corporate Governance Council Principles and Recommendations.
Non-Executive Directors do not participate in Elders’ cash or equity incentive plans and do not receive retirement benefits other than superannuation
contributions disclosed in this report.
Non-Executive Directors have formal letters of appointment with Elders. Length of tenure is governed by Elders’ Constitution and the ASX Limited
Listing Rules, which provides that all Non-Executive Directors are subject to re-election by shareholders in the manner set out in the Corporate
Governance Statement published at elders.com.au.
Non-Executive Director fees are reviewed by the Board on an annual basis, taking into consideration the accountability and time commitment of each
director, supported, where appropriate and necessary, by advice from external remuneration advisors.
The Board believes Elders’ Non-Executive Directors should own securities in Elders to further align their interests with the interests of other
shareholders. Elders’ Minimum Shareholding Policy was reviewed and updated effective 1 October 2020 and now requires NEDs to hold at least 100%
of NED Base fees (including superannuation), within three years from appointment. Details of Non-Executive Directors’ shareholdings in Elders can be
found in Table 17 on page 107 of this Report.
6.2 Non-Executive Director Fees in FY20
Total fees for the financial year ended 30 September 2020 remain well within the aggregate fee limit of $1,200,000 per annum, approved by the Board
following Elders’ 2013 Annual General Meeting. From FY20 statutory superannuation guarantee contributions are included in the aggregate fee limit.
The following changes occurred to NED fees during FY20:
⋅ effective 1 October 2019 the base Board fee increased to $112,000, which had remained unchanged since 2014. This increase reflected a 2%
market adjustment as well as rolling the Work Health and Safety Committee fee of $10,000 into the base Board fee
⋅ effective 1 October 2019 the Chair of the Remuneration and Human Resources Committee received an increase in fees of $5,000, from $15,000
to $20,000, in recognition of responsibilities
Table 11 — Non-Executive Director fee details
Board
Audit, Risk and Compliance Committee
Work Health and Safety Committee
Remuneration and Human Resources Committee
Nomination and Prudential Committee
1 The Chair of the Board does not receive additional committee fees.
FY20 fee excluding superannuation
Chair
$240,0001
$30,000
Nil
$20,000
Nil
Member
$112,000
$16,000
Nil
$10,000
Nil
Actual Committee fees paid are provided as “Board Committee Fees” in Table 12 below.
The table below sets out the remuneration for the Non-Executive Directors for the financial years 2019 and 2020.
Table 12 — Non-Executive Director remuneration details
I Wilton
R Clubb
D Eilert
M Quinn1
M Carroll2
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
J H Ranck3
2020
Total
2019
2020
2019
1 M Quinn commenced as Non-Executive Director on 20 February 2020.
2 M Carroll ceased as Non-Executive Director on 2 July 2020.
3 J H Ranck ceased as Non-Executive Director on 13 December 2018.
Short-term payments
Post-employment
Total
Base Board fee Board Committee Fees
Superannuation
240,000
107,222
112,000
100,000
112,000
100,000
68,600
n/a
84,907
205,000
n/a
48,571
617,507
560,793
-
47,421
40,000
41,464
36,000
36,258
15,925
n/a
19,688
9,000
n/a
-
111,613
134,143
21,176
14,691
14,440
13,439
14,060
12,945
8,030
n/a
9,991
18,686
n/a
4,614
67,697
64,375
261,176
169,334
166,440
154,903
162,060
149,203
92,555
n/a
114,586
232,686
n/a
53,185
796,817
759,311
Elders2020 Annual Report Directors' Report – Remuneration Report
105
Section 7 — Key Terms of Executive KMP Employment Contracts and Statutory
Remuneration
7.1 Contractual Arrangements of Executive KMP
In FY20 Elders had employment contracts with Executive KMP. Details of the employment contracts are set out in Table 13.
Table 13 — Contractual arrangements
Component
Contract Duration
Notice (without cause) initiated by:
MD & CEO
Senior Executives
Ongoing until terminated by either party
Elders
Individual
12 months
6 months
6 months
3 months
Notice for Serious Misconduct
Payment in lieu of notice may be made equivalent to the remuneration the MD & CEO and Senior Executive
would have received over the notice period.
Payment may be awarded under a Short-Term or Long-Term Incentive Plan in accordance with plan rules.
Elders may terminate immediately. No payment in lieu of notice or other termination payments are payable
under the employment agreement.
Redundancy
Not applicable
Due to genuine redundancy, as defined by the Fair Work Act 2010, the Senior
Executive is entitled to a retrenchment payment in accordance with Elders’
policy. This payment is also subject to the rules and limitations specified
in the Corporations Act 2001 (Cth) and Corporations Regulations.
Change of Control
Not specifically referenced in
contract
In the event of a Change of Control or Disposal of Business resulting in a
material diminution in the roles and responsibility of the Senior Executive,
the Senior Executive may terminate their contact on three months’ notice.
7.2 Executive KMP Statutory Remuneration
Table 14 — Details of MD & CEO and Senior Executive remuneration for the 2019 and 2020 financial years
Short-term payments
Post-
employment
Share-based
payments
Long-term
payments
Termination
benefits2
Base salary
STI
Other1
Super-
annuation
Options Share rights Long service
leave
Total % perfor-
mance-
related3
M C Allison
2020
924,373
894,268
R I Davey
2019
2020
2019
896,447
-
515,901
269,205
511,109
-
R L Norton4
2020
499,356
249,419
2019
367,636
-
J H Cornish
2020
453,825
201,875
M L Hunt5
2019
2020
2019
357,387
n/a
387,912
-
n/a
-
Total
2020
2,393,455
1,614,767
2019
2,520,491
-
-
-
-
-
6,306
54,730
21,950
1,200
n/a
33,474
28,256
89,404
21,176
20,649
21,176
20,649
21,176
15,516
21,176
20,649
n/a
20,649
84,704
98,112
-
-
-
-
-
-
-
-
-
-
-
-
630,829
708,037
171,568
169,553
(37,800)
37,800
152,568
126,715
n/a
47,188
41,896
26,371
40,919
-
-
67,350
26,952
n/a
126,715
28,250
917,165
140,909
1,168,820
138,017
-
-
-
-
-
-
-
-
2,517,834
1,667,029
1,004,221
742,230
738,457
475,682
918,744
532,903
n/a
n/a
-
-
-
597,000
5,179,256
4,014,844
61%
42%
44%
23%
29%
8%
39%
24%
n/a
21%
1 Comprising the provision of leased car parking (Cornish, Hunt, Norton), living Away from home allowance paid to Mr Cornish for the period 1 October 19 – 31 March 2020 to cover the actual cost
of accommodation incurred while residing in Brisbane to undertake his role as General Manager Network and Northern Zone, company leased vehicle (Hunt) and once-off sign on bonus of
$50,000 (2019 - Norton).
2 These benefits, which comprise redundancy payments under Elders’ redundancy policy and payments in lieu of notice, comply with Part 2D.2 of the Corporations Act 2001 (Cth).
3 Performance related remuneration consists of STI and share rights and options as a percentage of total remuneration. Share rights includes performance rights disclosed in Table 15.
4 Mr Norton’s final day was 31 October 2020 and he received $249,419 as his termination payment, paid November 2020.
5 M L Hunt ceased as KMP effective 30 September 2019.
106
Section 8 — Additional Required Disclosures
Table 15 — Details of MD & CEO and Senior Executive current Long-Term Incentive grants
Grant Date
Balance
at Start of
Period
Granted
Vesting
date
Vested
Lapsed
Balance1
Expensed
at End of
Period1
Fair Value
at grant
date2
Rights
maximum
value yet to
vest3
M C Allison
14-Dec-17
13-Dec-18
12-Dec-19
R I Davey
16-Feb-18
15-Feb-19
21-Feb-20
R L Norton
15-Feb-19
21-Feb-20
J H Cornish
16-Feb-18
15-Feb-19
21-Feb-20
G J Dunne4
16-Feb-18
No.
No.
No.
%
No.
200,000
146,000
-
166,000
Nov-20
150,000
75
50,000
Nov-21
Nov-22
-
-
-
-
-
-
346,000
166,000
150,000
50,000
60,000
39,000
-
99,000
30,000
-
30,000
45,000
29,000
-
74,000
15,000
15,000
41,000
41,000
41,000
41,000
41,000
41,000
-
-
Nov-20
45,000
75
15,000
Nov-21
Nov-22
Nov-21
Nov-22
-
-
45,000
-
-
-
-
-
-
-
-
-
30,000
41,000
71,000
Nov-20
33,750
75
11,250
Nov-21
Nov-22
-
-
-
-
-
-
33,750
11,250
Nov-20
11,250
75
11,250
3,750
3,750
%
25
-
-
25
-
-
No.
$
$
-
101,833
1,381,000
$
-
146,000
264,503
793,510
264,503
166,000
264,493
793,480
528,987
312,000
630,829
2,967,990
793,490
-
25,600
369,300
-
39,000
41,000
49,140
147,420
49,140
96,828
290,485
193,657
100
100
25
-
-
25
-
-
-
-
29,000
41,000
70,000
(37,800)
113,400
-
290,485
(37,800)
403,885
-
-
-
-
276,975
36,540
109,620
19,200
36,540
96,828
290,485
193,657
133,368
677,080
249,397
-
-
(24,375)
276,975
(24,375)
276,975
-
-
15,000
80,000
171,568
807,205
242,797
1 Balance is as at the date of this report and includes November 2020 vesting.
2 Fair value is used to calculate the value of performance rights when granted. The fair value at Grant Date is independently determined using Monte Carlo simulation techniques which take into
account the exercise price, the term of the rights, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the
term of the options.
3 The maximum value of the performance rights yet to vest has been determined as the fair value amount at grant date that is yet to be expensed. The minimum value of deferred shares yet to vest
is nil, as the shares will be forfeited if the vesting conditions are not met.
4 G J Dunne ceased employment on 30 September 2018 however as per the LTI Plan Rules a portion of G J Dunne’s rights has continued on foot, based on the percentage of performance period
completed for each grant as at termination date.
Note: The grant dates are aligned to the requirements under the Accounting Standards. For the LTI grant expected to vest Nov-20, additional shares of 13,282 will be allocated to the Executive KMP
in this table at the time of vesting for the value of dividends not received during the performance period on the vested rights.
Note: The fair value per performance right at grant date is as follows, with the grant date under the Accounting Standards differing for the MD & CEO and Senior Executive grants, resulting in a
different fair value.
MD & CEO Grant
Senior Executive Grant
Performance Rights
14 December 2017
Performance Rights
13 December 2018
Performance Rights
12 December 2019
Tranche 1
Tranche 2 & 3
Tranche 1
Tranche 2 & 3
Tranche 1
Tranche 2 & 3
$ 6.64
$ 7.17
$ 4.92
$ 5.95
$ 4.47
$ 5.09
Tranche 1
Tranche 2 & 3
Tranche 1
Tranche 2 & 3
Tranche 1
Tranche 2 & 3
$ 5.81
$ 6.50
$ 3.23
$ 4.33
$ 6.76
$ 7.41
Elders2020 Annual Report Directors' Report – Remuneration Report
107
Table 16 — Executive KMP shareholding
Shares held at
start of year
Shares acquired
during the year as
part of remuneration
Shares acquired
during the year through
the vesting of LTI
Other shares
acquired (disposed
of) during the year
Balance of shares
held at end of
financial period
M C Allison
2020
1,050,814
R I Davey
R L Norton
2019
2020
2019
2020
2019
654,344
109,768
51,750
-
-
J H Cornish
2020
63,209
M L Hunt1
Total
2019
2020
2019
2020
2019
-
n/a
-
1,223,791
706,094
-
-
-
-
-
-
-
n/a
-
-
-
224,066
260,000
60,017
75,000
-
-
48,014
55,000
n/a
60,000
332,097
450,000
-
136,470
(79,785)
(16,982)
-
-
(111,223)
8,209
n/a
8,956
(191,008)
136,653
1,274,880
1,050,814
90,000
109,768
-
-
-
63,209
n/a
68,956
1,364,880
1,292,747
1 M L Hunt ceased as KMP on 30 September 2019, therefore no balances provided for FY20.
Table 17 — Non-Executive Directors shareholding
I Wilton
R Clubb
D Eilert
M Quinn1
M Carroll2
J H Ranck3
Total
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
Shares held at
start of year
Shares acquired
during the year as
part of remuneration
Other shares
acquired (disposed
of) during the year
Balance of shares
held at end of
financial period
128,254
108,486
10,400
3,400
9,769
-
15,000
n/a
25,027
-
n/a
134,317
188,450
246,203
-
-
-
-
-
-
-
n/a
-
-
n/a
-
-
-
2,939
19,768
-
7,000
4,000
9,769
135
n/a
573
25,027
n/a
-
7,647
61,564
131,193
128,254
10,400
10,400
13,769
9,769
15,135
n/a
25,600
25,027
n/a
134,317
196,097
307,767
1 M Quinn commenced as Non-Executive Director on 20 February 2020 balance at start of year is date of commencement.
2 M Carroll ceased as Non-Executive Director 2 July 2020, 2020 balance at end of financial period is at date of cessation.
3 J H Ranck ceased as a Non-Executive Director on 13 December 2018, 2019 balance at end of financial period is at date of cessation.
Note: No other changes occurred during the year. None of the shares in tables 16 and 17 are held nominally by the Non-Executive Directors or MD & CEO and Senior Executives. Elders takes its
obligations to prevent insider trading very seriously. In conformity with that approach, Directors take a conservative view of when they can deal in Elders shares (even when trading windows are
open), seeking to avoid both real and perceived trading on inside information. This approach has, in recent times, limited the opportunities for Non-Executive Directors to acquire Elders’ shares.
8.1 Other transactions with KMP
There are no loans to KMP outstanding in the current or prior year.
From time to time, sales and purchases occur during the year between subsidiaries of the Group and entities that certain directors of Elders have
direct or indirect control over. These transactions are conducted on the same terms and conditions as those entered into by other Elders’ employees
or customers on an arm’s length basis and are trivial or domestic in nature.
108
AuctionsPlus
success in
FY20
The AuctionsPlus online
livestock marketing
platform (Elders has a
50% ownership interest)
played a vital role in
helping maintain the
livestock supply chain
through COVID-19
disruptions in FY20.
Border closures and social distancing restricted
many traditional on-property sales and affected
the ability of buyers and vendors to attend
regional saleyards, driving many new users
to the AuctionsPlus online platform.
Elders’ livestock agents supported clients through
the year to run innovative forms of hybrid online
and on-property auctions whilst helping prepare
registrations, extended inspection periods,
photography and videos.
The result was a significant rise in Elders’ sales
through AuctionsPlus, including 98% growth in
the number of stud sales.
The COVID-19 boost to AuctionsPlus has come
off the back of strong year-on-year growth in
online sales.
Elders Longreach Livestock Agent Tim Salter, who
was the top AuctionsPlus sheep assessor nation-
wide, points out that for agents and clients in more
remote parts of the country, the platform was
already integral to business-as-usual operations.
“It’s always been a big part of our business
because of our location and the distances
involved,” Tim says.
“Years ago, you would have had people driving
long distances to look at the stock but now you
don’t, you can do it all remotely.”
AuctionsPlus Chief Executive Angus Street says
the boom recorded calendar year to date is yet
to be fully realised.
“We expect to run well over 400 stud sales before
the end of the Spring selling season. We are seeing
some wonderful results for both first time vendors
along with returning vendors,” he says.
Elders’ commercial livestock sales via AuctionsPlus
# head sold
Commercial Sales
Cattle
Sheep
Elders’ stud livestock sales via AuctionsPlus
# sales
Stud Sales
Cattle
Sheep
The nature of the bidding at ram sales has
changed, too.
“It is now very rare that we do not have multiple
bidders who end up purchasing a few lots in each
sale,” Angus says.
“In many cases, primarily for returning vendors,
we will end up bidding on at least 40 per cent of
the lots and we have even had some sales as high
as 85 per cent of the lots bid on. We have also
seen an increase in the number of lots purchased
online. We see the improvement in pre-sale videos
as being one of the factors driving this.”
The growing use of the platform meant there was
a greater pool of genetics available this year to a
much wider range of buyers.
“Looking deeper at the numbers we can also see
the dramatic impact of drought, with NSW selling
a huge volume in 2019, of which a vast majority
went to Victoria, South Australia and Queensland,
as they had a slightly better season in some
regions,” Angus says.
“With the increase from Victoria, SA and
Queensland it is now likely those sheep are
being resold back into areas that have had rain.
“Finally, whilst seasonality does play a role, the
national flock has been depleted and there is
simply a lower number of sheep on the market
to be sold. We have heard that Victoria and SA
have had a great lambing season and so will be
expecting to see numbers increase to the level
of 2019, just later in the season.”
FY19
69,087
650,610
FY19
64
36
FY20
118,914
974,455
FY20
90
108
% change
72%
50%
% change
41%
200%
Elders2020 Annual Report AuctionsPlus success in FY20
109
We expect to run well over
400 stud sales before the
end of the Spring selling
season. We are seeing some
wonderful results for both
first time vendors along
with returning vendors.
Angus Street,
AuctionsPlus Chief Executive
Elders Ltd Annual Financial Report
2020 112
Elders Ltd
Annual
Financial
Report
30 September 2020
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements
About this Report
Group Performance
1
2
3
4
5
Segment Information
Discontinued Operations
Revenue and Expenses
Income Tax
Earnings Per Share
Working Capital
6
7
8
9
Receivables
Biological Assets
Inventory
Trade and Other Payables
Capital Employed
10 Property, Plant and Equipment
11 Leases
12 Intangibles
13 Equity Accounted Investments
14 Provisions
Net Debt
15 Cash Flow Statement Reconciliation
16 Interest Bearing Loans and Borrowings
Risk Management
17 Financial Instruments
Equity
18 Contributed Equity
19 Reserves
20 Retained Earnings
21 Dividends
Group Structure
22 Investments in Controlled Entities
23 Parent Entity
24 Business Combinations – Changes in the Composition of the Entity
Other Information
25 Expenditure Commitments
26 Contingent Liabilities
27 Related Party Disclosures
28 Share Based Payment Plans
29 Auditors’ Remuneration
30 Key Management Personnel
31 Subsequent Events
Directors’ Declaration
113
114
115
116
117
120
123
124
126
128
129
130
131
132
133
135
137
139
140
142
143
144
148
148
149
149
150
153
154
156
156
157
157
158
158
158
159
Elders2020 Annual Report 113
Note
2020
$000
2019
$000
3
13
3
3
4
2
20
5
5
5
5
5
5
2,092,618
1,626,032
(1,662,371)
(1,280,242)
430,247
345,790
7,281
6,313
(258,241)
(234,105)
(58,658)
(9,325)
(7,239)
104,065
21,221
125,286
-
125,286
(44,344)
(10,771)
(2,468)
60,415
17,336
77,751
(7,024)
70,727
(742)
(742)
1,151
1,151
124,544
71,878
2,339
122,947
125,286
2,339
122,205
124,544
79.8¢
79.3¢
79.8¢
79.3¢
1,792
68,935
70,727
1,792
70,086
71,878
57.0¢
56.1¢
62.8¢
61.9¢
-
-
(5.8)¢
(5.8)¢
Continuing operations
Sales revenue
Cost of sales
Gross profit from continuing operations
Equity accounted profits
Distribution expenses
Administrative expenses
Finance costs
Other items of income/(expense)
Profit from continuing operations before income tax benefit
Income tax benefit
Profit from continuing operations after income tax benefit
Net loss of discontinued operations, net of tax
Net profit for the period
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign operations
Other comprehensive profit/(loss) for the period, net of tax
Total comprehensive income for the period
Profit for the period is attributable to:
Non-controlling interest
Owners of the parent
Total comprehensive income for the period is attributable to:
Non-controlling interest
Owners of the parent
Reported operations
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Continuing operations
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Discontinued operations
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
The accompanying notes form an integral part of this consolidated statement of comprehensive income.
Elders Ltd Annual Financial ReportCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 30 September 2020
114
Current assets
Cash and cash equivalents
Trade and other receivables
Livestock
Inventory
Current tax receivable
Total current assets
Non current assets
Other financial assets
Equity accounted investments
Property, plant and equipment
Right-of-use assets
Intangibles
Deferred tax assets
Total non current assets
Total assets
Current liabilities
Trade and other payables
Interest bearing loans and borrowings
Lease liabilities
Current tax payable
Provisions
Total current liabilities
Non current liabilities
Other payables
Interest bearing loans and borrowings
Lease liabilities
Provisions
Total non current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total parent entity equity interest
Non-controlling interests
Total equity
The accompanying notes form an integral part of this consolidated statement of financial position.
Note
15(b)
6
7
8
4
13
10
11
12
4
9
16
11
4
14
9
16
11
14
18
19
20
2020
$000
50,741
601,834
44,734
255,930
-
2019
$000
7,313
481,131
35,309
146,121
398
953,239
670,272
1,269
56,473
32,268
100,802
306,247
103,767
600,826
1,269
53,746
27,405
-
166,854
97,184
346,458
1,554,065
1,016,730
517,120
158,691
28,500
1,034
65,485
770,830
7,177
25,000
76,001
2,731
110,909
359,224
100,695
-
-
44,228
504,147
16,287
870
-
2,543
19,700
881,739
523,847
672,326
492,883
1,645,561
1,562,377
(27,670)
(27,230)
(946,890)
(1,043,490)
671,001
491,657
1,325
1,226
672,326
492,883
Elders2020 Annual ReportCONSOLIDATED STATEMENT OF FINANCIAL POSITIONAs at 30 September 2020
115
Note
2020
$000
2019
$000
8,566,990
7,284,277
(8,424,483)
(7,269,545)
7,097
(7,820)
557
15(a)
142,341
(7,378)
(3,300)
(1,511)
924
-
-
6,725
(6,791)
(3,430)
11,236
(3,718)
(400)
(26,667)
(13,727)
275
(951)
2,700
(123,148)
(42,488)
-
83,504
(31,835)
(25,194)
(2,240)
24,235
43,428
7,313
50,741
132,476
(83,944)
-
(19,267)
(2,341)
26,924
(4,328)
11,641
7,313
15(b)
Payments for acquisitions through business combinations, net of cash acquired
24
(111,883)
Cash flow from operating activities
Receipts from customers
Payments to suppliers and employees
Dividends received
Interest and other costs of finance paid
Income taxes refunded/(paid)
Net operating cash flows
Cash flow from investing activities
Payments for property, plant and equipment
Payments for equity accounted investments
Payments for intangibles
Proceeds from sale of property, plant and equipment
Payments associated with sale of controlled entity
Proceeds from sale of feedlot assets
Net investing cash flows
Cash flow from financing activities
Proceeds from issue of shares, net of costs
Proceeds/(repayment) of borrowings
Payments of lease liabilities
Dividends paid
Partnership profit distributions/dividends paid
Net financing cash flows
Net increase/(decrease) in cash held
Cash at the beginning of the financial year
Cash at the end of the financial year
The accompanying notes form an integral part of this consolidated statement of cash flows.
Elders Ltd Annual Financial ReportCONSOLIDATED STATEMENT OF CASH FLOWSFor the year ended 30 September 2020 116
As at 1 October 2019
Profit for the period
Other comprehensive income/(loss):
Exchange differences on translation of foreign operations
Total comprehensive income/(loss) for the period
Transactions with owners in their capacity as owners:
Issued capital
Dividends paid
Dividend reinvestment plan
Partnership profit distributions/dividends paid
Cost of share based payments
Reallocation of equity
As at 30 September 2020
As at 1 October 2018
Profit for the period
Other comprehensive income/(loss):
Exchange differences on translation of foreign operations
Total comprehensive income/(loss) for the period
Transactions with owners in their capacity as owners:
Issued capital
Transaction costs incurred on share issue, net of tax
Dividends paid
Dividend reinvestment plan
Partnership profit distributions/dividends paid
Cost of share based payments
Recognition of put options
Reallocation of equity
As at 30 September 2019
Issued capital
Reserves
Retained
earnings
Non-
controlling
interest
Total equity
$000
$000
$000
1,562,377
(27,230)
(1,043,490)
-
122,947
$000
1,226
2,339
$000
492,883
125,286
-
-
-
80,388
-
2,796
-
-
-
(742)
(742)
-
-
(742)
122,947
2,339
124,544
-
-
-
-
1,945
(1,643)
-
(25,194)
(2,796)
-
-
1,643
-
-
-
(2,240)
-
-
80,388
(25,194)
-
(2,240)
1,945
-
1,645,561
(27,670)
(946,890)
1,325
672,326
1,426,835
(26,034)
(1,094,027)
-
-
-
-
68,935
1,151
1,151
-
68,935
137,000
(3,198)
-
1,740
-
-
-
-
-
-
-
-
-
1,812
(1,550)
(2,609)
-
-
(19,267)
(1,740)
-
-
-
2,609
1,775
1,792
-
1,792
-
-
-
-
(2,341)
-
-
-
308,549
70,727
1,151
71,878
137,000
(3,198)
(19,267)
-
(2,341)
1,812
(1,550)
-
1,562,377
(27,230)
(1,043,490)
1,226
492,883
The accompanying notes form an integral part of this consolidated statement of changes in equity.
Elders2020 Annual ReportCONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the year ended 30 September 2020 117
ABOUT THIS REPORT
Corporate information
The consolidated financial report of Elders Limited for the year ended 30 September 2020 was authorised for issue in accordance with a resolution
of the Directors on 16 November 2020. Elders Limited (the Parent) is a for profit company limited by shares incorporated and domiciled in Australia
whose shares are publicly traded on the Australian Securities Exchange.
The nature of the operations and principal activities of the Company are described in the Directors’ Report and note 1. References in this consolidated
financial report to ‘Elders’ are to Elders Limited and each of its controlled entities unless the context requires otherwise.
Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001,
Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The financial report has also been prepared
on a historical cost basis, except for derivative financial instruments which have been measured at fair value, and biological assets that are measured
at fair value less costs to sell.
The financial report is presented in Australian dollars and under the ASIC Corporations (Rounding in Financial/Director’s Reports) Instrument
2016/191, issued by the Australian Securities and Investments Commission, all values are rounded to the nearest thousand dollars ($000) unless
otherwise stated.
Both the functional and presentation currency of Elders and its Australian subsidiaries is Australian Dollars (AUD). Subsidiaries incorporated in
countries other than Australia (see note 22), which have a functional currency other than Australian Dollars, are translated to the presentation
currency.
Transactions in foreign currencies are initially recorded by subsidiaries at their respective functional currency rates at the date the transaction first
qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the
reporting date.
Differences arising on settlement or translation of monetary items are recognised in the statement of comprehensive income. Non-monetary items
that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.
The financial report has been prepared on a going concern basis.
Comparative information which relates to prior periods is restated to be comparable with current year disclosures.
Basis of consolidation
The consolidated financial statements comprise the financial statements of Elders Limited and its subsidiaries as at 30 September 2020. Control is
achieved when Elders is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. When Elders has less than a majority of the voting or similar rights of an investee, it considers all relevant facts
and circumstances in assessing whether it has power over an investee.
Elders re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three
elements of control. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement
of comprehensive income from the date Elders gains control until the date Elders ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of Elders and to the non-
controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the
financial statements of subsidiaries to bring their accounting policies into line with Elders’ accounting policies. All intra-group assets and liabilities,
equity, income, expenses and cash flows relating to transactions between members of Elders are eliminated in full on consolidation.
Significant accounting judgements, estimates and assumptions
The preparation of Elders’ consolidated financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities,
contingent liabilities, revenue and expenses.
Actual results may differ from these estimates under different assumptions and conditions and may materially affect the financial result or the financial
position reported in future periods. Judgements, estimates and assumptions which are material to the financial report are found in the following notes:
Note 4
Note 8
Note 10
Note 11
Note 12
Recovery of deferred tax assets
Accounting for rebates
Impairment of non-financial assets other than brand names and goodwill
Accounting for leases
Impairment of brand names and goodwill
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 118
ABOUT THIS REPORT
Impact of COVID-19
On 11 March 2020, the World Health Organisation officially declared COVID-19 a global pandemic. Elders has considered the impact of COVID-19
when preparing the consolidated financial statements and related note disclosures and continues to monitor the impact of the COVID-19 outbreak
on demand for Elders’ products and services, customers and supply chains. All farm inputs supply chains in which Elders participates are, at present,
operating normally. Livestock supply chains experienced a short-term disruption of live export to Vietnam and Indonesia. Wool markets remain soft
due to limited Chinese buyer activity and although not material, Elders Fine Foods, was significantly impacted by COVID-19 because of shutdown
to restaurants and hotels in China. Real Estate Services sales have been slightly impacted in parts of the country where COVID-19 has impinged
on the ability to conduct inspections and auctions. None of these interruptions has had a material impact on Elders’ financial performance for the
year ended 30 September 2020. Elders has recognised pandemic risk on its risk register and has implemented controls in the business to mitigate
COVID-19 impacts. Elders proactively formed a COVID-19 Response Committee and held regular meetings to monitor, track and report business
and financial reporting matters relating to COVID-19. With Elders’ critical role in agriculture and rural and regional Australia, the decision was made
to not stand down or reduce employment due to COVID-19. Elders did not access any government support such as JobKeeper during the year ended
30 September 2020.
While the effects of COVID-19 do not change the significant estimates, judgments and assumptions in the preparation of consolidated financial
statements, it has increased the uncertainty of accounting estimations and resulted in application of further judgment within those identified areas.
Elders has used accounting estimates based on forecasts developed on market information available at balance date. Given the uncertainty of the
impact of COVID-19 on local and global trade markets, Elders exercised considerable judgement when developing assumptions for assessing the
carrying values of assets and liabilities.
Elders has reviewed the following material accounting judgements, estimates and assumptions within the accounting policies that have potential
to be impacted by the COVID-19 outbreak:
⋅ Impairment of financial assets, specifically trade receivables: Elders assessed its trade receivables expected credit losses, given COVID-19
uncertainties. This assessment did not indicate a material change to trade receivables and loss allowances.
⋅ Impairment of non-financial assets, including brand names and goodwill: Elders has evaluated the conditions specific to the company and the
assets subject to impairment to assess whether any impairment triggers that may lead to impairment have been identified. Refer to note 12 for
further detail.
⋅ Valuation of inventory: Elders has performed an assessment of inventory on hand at balance date to assess whether inventories are valued at the
lower of cost and net realisable value. Refer to note 8 for further detail.
Elders will continue to monitor and manage the impact of COVID-19 on its financial position and performance as new information becomes available.
New Accounting Standards and Interpretations
(i) New and Revised Accounting Standards
The new accounting standard AASB 16 Leases, became operative for the financial year ended 30 September 2020 and has been applied in preparing
these consolidated financial statements. The impact of the new Leases standard is summarised below.
AASB 16 Leases
From 1 October 2019, Elders has adopted, for the first time, the accounting standard AASB 16 Leases, in preparing its consolidated financial
statements. AASB 16 which replaced all existing lease requirements under AASB 117, removed the distinction between operating and finance leases
for lessees and as a result leases will now be accounted for under a single, on-balance sheet model. Leases that were classified as finance leases
under AASB 117 will continue to be recognised in the statement of financial position under AASB 16. For leases previously classified as finance leases
the entity recognised the carrying amount of the lease asset and lease liability immediately before transition as the carrying amount of the right of use
asset and the lease liability at the date of initial application.
Elders has applied AASB 16 using the modified retrospective approach where the right-of-use asset is measured as equal to the lease liability on
the date of adoption, and as such prior year balances have not been restated – i.e. it is presented as previously reported under AASB 117. Elders
has applied the following transition practical expedients as permitted by the standard:
⋅ exclusion of initial direct costs in measurement of the right of use asset
⋅ a single discount rate applied to a portfolio of leases with similar characteristics
⋅ the use of hindsight with regards to determination of the lease term where the contract contains options to extend or terminate the lease
Additionally, Elders applied a general practical expedient for leases for which the underlying asset is of low value (less than USD 5,000) are
exempt and recognised on a straight-line basis through profit or loss.
Elders has also elected not to reassess whether a contract is or contains a lease at the date of initial application. Instead, for contracts entered
into before the transition date, Elders relied on its assessment made applying AASB 117 and Interpretation 4 Determining whether an Arrangement
contains a Lease.
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 119
ABOUT THIS REPORT
Impact on transition
Prior to 1 October 2019, leases of property, plant and equipment were classified as either finance or operating leases. Payments made under operating
leases (net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over the period of the lease. On transition
to AASB 16, Elders as a lessee, has recognised a lease liability representing its obligation to make future lease payments and a right-of-use asset
representing its right to use the underlying asset for the lease term. The interest expense on the lease liability and depreciation expense on the asset
are separately recognised in profit or loss. The impact on transition is summarised below.
Consolidated statement of financial position
Right-of-use assets
Lease liabilities
Net impact on retained earnings, after tax
1 October
2019
$000
117,892
(117,892)
-
In addition, existing lease incentives of $2.4 million were reclassified to right-of-use assets.
When measuring lease liabilities for leases that were previously classified as operating leases, Elders discount lease payments using the incremental
borrowing rate at 1 October 2019. The weighted-average rate applied is 2.1%.
The recognised right-of-use assets relates to the following asset classes:
Right-of-use assets – Properties
Right-of-use assets – Motor vehicles
Right-of-use assets – Other
Total right-of-use assets
There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application.
Lease liabilities reconciliation on transition
Operating lease commitments disclosure as at 30 September 2019
Less: Low-value leases recognised on a straight-line basis as expense
Less: Discounting effect using incremental borrowing rate
Add: Extension options which are reasonably certain to be exercised
Add: Finance leases recognised at 30 September 2019
Lease liabilities recognised on transition as at 1 October 2019
Lease liabilities of which are:
⋅ Current lease liabilities
⋅ Non current lease liabilities
1 October
2019
$000
96,655
20,172
1,065
117,892
65,621
(2,094)
(2,304)
55,264
1,405
117,892
33,038
84,854
117,892
Impact on segment disclosures and earnings per share
Segment assets and segment liabilities increased as a result of the change in accounting policy. On transition to AASB 16, the following segments
were impacted by the change in policy:
Branch Network
Feed and Processing Services
Corporate Services and Other Costs
Segment
Assets
Segment
Liabilities
$000
93,647
2,674
21,571
$000
93,647
2,674
21,571
117,892
117,892
There was no material impact on earnings per share for the year ended 30 September 2020, as a result of the adoption of AASB 16.
(ii) Accounting Standards and Interpretations issued but not yet effective
Elders has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Elders has assessed the
upcoming standards, interpretations or amendments and concluded there is no material impact expected from the adoption of these new standards,
interpretations or amendments.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 120
ABOUT THIS REPORT
The notes to the financial statements
The notes include information which is required to understand the financial statements and is material and relevant to the operations, financial
position and performance of Elders. They include the applicable accounting policies applied and significant estimates and judgements made.
Specific accounting policies are disclosed in their respective notes to the financial statements.
The notes are organised into the following sections:
Group performance
Provides additional information regarding financial statement lines that are most relevant to explaining Elders’
performance during the period.
Working capital
Capital employed
Net debt
Risk management
Equity
Provides additional information regarding financial statement lines that are most relevant to explaining the assets used
to generate Elders’ trading performance during the period and liabilities incurred as a result.
Provides additional information regarding financial statement lines that are most relevant to explaining the capital
investment made that allows Elders to generate its operating result during the period and liabilities incurred as a result.
Provides additional information regarding financial statement lines that are most relevant to explaining Elders’ net debt
position and borrowings for the period.
Provides information relating to Elders’ exposure to various financial risks, its impact on the financial position and
performance of Elders and how these risks are managed.
Provides additional information regarding financial statement lines that are most relevant to explaining the equity position
of Elders at the end of the period, including the dividends declared and/or paid during the period.
Group structure
Summarises how the group structure affects the financial position and performance of Elders as a whole.
Other information
Includes other information that must be disclosed to comply with the accounting standards and other pronouncements,
but that is not immediately related to individual line items in the financial statements.
GROUP PERFORMANCE — NOTE 1: SEGMENT INFORMATION
Identification of reportable segments
Elders has identified its operating segments to be Branch Network, Wholesale Products, Feed and Processing Services and Corporate Services and
Other Costs. These segments were disclosed as Network, Feed and Processing and Other respectively in the 30 September 2019 financial statements.
In the current period, a new segment has been identified, Wholesale Products, which represents the AIRR business acquired in November 2019. These
operating segments are the basis on which internal reports are reviewed and used by the Chief Executive Officer (the chief operating decision maker) in
assessing performance and in determining allocation of resources. Discrete financial information about each of these operating businesses is reported
to the Chief Executive Officer on at least a monthly basis. Elders operates predominantly within Australia. All other geographical operations are not
material to the financial statements.
Type of product and service
⋅ Branch Network includes the provision of a range of products and services through a common distribution channel, including agricultural retail
products, agency services and financial services.
⋅ Wholesale Products includes the AIRR business based in Shepparton, Victoria, supported by a network of eight warehouses to supply independent
retail stores throughout Australia.
⋅ Feed and Processing Services includes Killara feedlot, a beef cattle feedlot near Tamworth in New South Wales. In China, Elders imports, processes
and distributes premium Australian meat. Elders has sold the Indonesian Feedlot and Abattoir assets and decided to close the remaining Retail
business in the prior period.
⋅ Corporate Services and Other Costs segment includes the general investment activities not associated with the other business segments and the
administrative corporate office activities, including centrally held costs not allocated to the other segments.
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 121
GROUP PERFORMANCE — NOTE 1: SEGMENT INFORMATION
Accounting policies and intersegment transactions
The accounting policies used by Elders in reporting segments internally are the same as those contained in the financial statements. Segment results
have been determined on a consolidated basis and represent the earnings before corporate net financing costs and income tax expense.
2020
Sale of goods and biological assets
Debtor interest associated with sales
Interest revenue from related party advances
Commission revenue
Sales revenue
Equity accounted profits
Earnings before interest, tax, depreciation and amortisation
Depreciation and amortisation
Depreciation on right-of-use assets
Segment result
Interest expense
Unwinding discount expense in regards to liabilities
Fair value adjustments of financial instruments
Interest on lease liability
Finance costs
Profit from ordinary activities before tax
Interest expense
Unwinding discount expense in regards to liabilities
Fair value adjustments of financial instruments
Interest on lease liability
Finance costs
Continuing profit before tax expense
Segment assets
Segment liabilities
Net assets
Carrying value of equity accounted investments
Acquisition of non current assets (cash outflow)
Non cash income/(expense) other than depreciation and amortisation
Profit/(loss) on sale of non current assets
Branch
Network
Wholesale
Products
Feed and
Processing
Services
Corporate
Services and
Other Costs
Total
$000
$000
$000
$000
$000
1,383,560
245,619
149,645
478
1,779,302
7,412
4,226
301,678
-
-
-
-
-
-
1,696,876
245,619
149,645
7,281
-
-
-
-
-
478
-
7,412
4,226
301,678
2,092,618
7,281
179,499
(2,903)
(28,254)
148,342
28,392
(3,729)
(2,660)
22,003
8,150
(1,127)
(416)
6,607
(60,859)
155,182
(855)
(8,614)
(1,848)
(33,178)
(63,562)
113,390
(5,197)
(1,289)
(216)
(2,623)
(9,325)
104,065
113,390
113,390
(5,197)
(1,289)
(216)
(2,623)
(9,325)
104,065
969,071
485,566
483,505
56,473
120,147
(7,270)
524
265,616
74,297
191,319
-
-
-
-
79,805
13,511
66,294
-
2,197
(440)
-
239,573
1,554,065
308,365
(68,792)
881,739
672,326
-
1,728
56,473
124,072
(13,472)
(21,182)
-
524
Segment result
Continuing profit/(loss) before net borrowing costs and tax expense
148,342
148,342
22,003
22,003
6,607
6,607
(63,562)
(63,562)
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 122
GROUP PERFORMANCE — NOTE 1: SEGMENT INFORMATION
Branch
Network
Wholesale
Products
Feed and
Processing
Services
Corporate
Services and
Other Costs
Total
$000
$000
$000
$000
$000
2019
Sale of goods and biological assets
Debtor interest associated with sales
Interest revenue from related party advances
Commission revenue
Sales revenue
Equity accounted profits
Earnings before interest, tax, depreciation and amortisation
Depreciation and amortisation
Segment result
Interest expense
Fair value adjustments of financial instruments
Unwinding discount expense in regards to liabilities
Finance costs
Profit from ordinary activities before tax
Segment result
Discontinued operations results
Continuing profit/(loss) before net borrowing costs and tax expense
Interest expense
Fair value adjustments of financial instruments
Unwinding discount expense in regards to liabilities
Finance costs
Continuing profit before tax expense
Segment assets
Segment liabilities
Net assets
Carrying value of equity accounted investments
Acquisition of non current assets (cash outflow)
Non cash income/(expense) other than depreciation and amortisation
Profit on sale of non current assets
1,189,514
6,343
2,763
276,892
1,475,512
6,313
109,124
(3,098)
106,026
106,026
1,479
107,505
772,423
327,379
445,044
53,746
40,587
(4,862)
166
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
158,300
591
1,348,405
-
-
-
158,300
-
7,707
(1,024)
6,683
-
-
-
591
-
6,343
2,763
276,892
1,634,403
6,313
(46,412)
(1,008)
(47,420)
70,419
(5,130)
65,289
(6,791)
(934)
(3,046)
(10,771)
54,518
65,289
5,897
71,186
(6,791)
(934)
(3,046)
(10,771)
60,415
6,683
4,418
11,101
(47,420)
-
(47,420)
69,646
9,214
60,432
-
2,197
(80)
-
174,661
187,254
(12,593)
1,016,730
523,847
492,883
-
1,728
5,421
-
53,746
44,512
479
166
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 123
GROUP PERFORMANCE — NOTE 2: DISCONTINUED OPERATIONS
There were no discontinued operations in the current period. In the prior period, Elders sold the Indonesian Feedlot and Abattoir assets and closed
the remaining Retail business. Additionally, Elders impaired its investment in Elders Financial Planning Pty Ltd (49% share) as a consequence of Elders
Financial Planning exiting its business. As required by AASB 5 Non-current Assets Held for Sale and Discontinued Operations, the 2019 comparative
discontinued operations disclosed below has been represented to show the effects of this classification.
Sales revenue
Cost of sales
Gross profit
Equity accounted profits
Distribution expenses
Administration expenses
Other items of income/(expense)
Profit/(loss) before finance costs and tax expense
Finance costs
Profit/(loss) before tax expense
Income tax benefit/(expense)
Net profit/(loss) for year
Net profit attributable to non-controlling interest
Net profit/(loss) attributable to members of the
parent entity
Revenue and expenses
Sales revenue:
Sale of goods and biological assets
Debtor interest associated with sales
Interest revenue from related party advances
Commission revenue
Other income/(expense):
Acquisition/divestment costs
Insurance related proceeds/(expenditure)
Fair value adjustments on foreign exchange contracts
Other adjustments to equity accounted investments
IT infrastructure transition
Restructure and redundancy costs
Additional costs associated with previously acquired
businesses
Exit of Elders Financial Planning network
Sale and closure of Indonesian business
Cont
2020
$000
2,092,618
(1,662,371)
430,247
7,281
(258,241)
(58,658)
(7,239)
113,390
(9,325)
104,065
21,221
125,286
(2,339)
122,947
1,779,302
7,412
4,226
301,678
2,092,618
(3,283)
(1,114)
(2,085)
(757)
-
-
-
-
-
(7,239)
The net cash flow of the discontinued operations is as follows:
Operating activities
Investing activities
Financing activities
Net cash inflow/(outflow)
Disc
2020
$000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
2020
$000
Cont
2019
$000
2,092,618
1,626,032
Disc
2019
$000
8,371
Total
2019
$000
1,634,403
(1,662,371)
(1,280,242)
(8,756)
(1,288,998)
430,247
345,790
(385)
345,405
7,281
6,313
(258,241)
(234,105)
(58,658)
(44,344)
(7,239)
113,390
(2,468)
71,186
(9,325)
(10,771)
104,065
21,221
125,286
(2,339)
122,947
60,415
17,336
77,751
(1,792)
75,959
-
-
6,313
(234,105)
(1,136)
(4,376)
(5,897)
-
(5,897)
(1,127)
(7,024)
-
(7,024)
(45,480)
(6,844)
65,289
(10,771)
54,518
16,209
70,727
(1,792)
68,935
1,779,302
1,340,034
8,371
1,348,405
7,412
4,226
6,343
2,763
301,678
276,892
-
-
-
6,343
2,763
276,892
2,092,618
1,626,032
8,371
1,634,403
(3,283)
(1,114)
(2,085)
(757)
-
-
-
-
-
(983)
3,486
-
-
(1,064)
(2,265)
(1,642)
-
-
(7,239)
(2,468)
-
-
-
-
-
-
-
(1,479)
(2,897)
(4,376)
2020
$000
-
-
-
-
(983)
3,486
-
-
(1,064)
(2,265)
(1,642)
(1,479)
(2,897)
(6,844)
2019
$000
(1,983)
2,700
(1,133)
(416)
Accounting Policy
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale, that represents a separate major
line of business or geographical area of operations, is part of a single coordinated plan to dispose of such a line of business or area of operations,
or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately on the face of the
statement of comprehensive income.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 124
GROUP PERFORMANCE — NOTE 3: REVENUE AND EXPENSES
Sales revenue
Sale of goods and biological assets
Debtor interest associated with sales
Interest revenue from related party advances
Commission revenue
Discontinued operations
Other items of income/(expense)
Acquisition/divestment costs
Insurance related proceeds/(expenditure)
Fair value adjustments on foreign exchange contracts
Other adjustments to equity accounted investments
IT infrastructure transition
Restructure and redundancy costs
Additional costs associated with previously acquired businesses
Discontinued operations
2
Finance costs
Interest expense
Unwinding discount expense in regards to liabilities
Fair value adjustments of financial instruments
Interest on lease liability
Specific expenses: depreciation and amortisation
Depreciation and amortisation
Depreciation on right-of-use assets
Specific expenses: employee benefit expense
Salaries, wages and incentives
Superannuation and other employee costs
Share based payments
Discontinued operations
Operating lease expenditure
Note
27
2
2020
$000
2019
$000
1,779,302
1,340,034
7,412
4,226
6,343
2,763
301,678
276,892
2,092,618
1,626,032
-
8,371
2,092,618
1,634,403
(3,283)
(1,114)
(2,085)
(757)
-
-
-
(7,239)
-
(7,239)
5,197
1,289
216
2,623
9,325
8,614
33,178
41,792
(983)
3,486
-
-
(1,064)
(2,265)
(1,642)
(2,468)
(4,376)
(6,844)
6,791
3,046
934
-
10,771
5,130
-
5,130
166,309
146,454
32,188
1,945
28,897
1,812
200,442
177,163
-
986
200,442
178,149
1,569
34,856
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 125
GROUP PERFORMANCE — NOTE 3: REVENUE AND EXPENSES
Accounting Policy
Elders recognises revenue as or when each performance obligation from contracts with customers are satisfied and considers whether there
are separate elements of each transaction to which a portion of the transaction price needs to be allocated. The majority of Elders’ revenue is
recognised at a point in time and attributable to the sale of retail products, wholesale products, provision of agency services and real estate
services, with the exception being certain financial services revenue which is recognised over a period of time. There were no significant
judgements in revenue recognition. The following specific recognition criteria must also be met before revenue is recognised:
(i) Sale of goods and biological assets
Revenue from the sale of goods predominantly relates to sale of agricultural retail products and wholesale products, and is recognised at the
point in time when control has been transferred to the customer, generally through the execution of a sales agreement at point of sale or when
the delivery of goods has occurred.
(ii) Commission revenue
Commission revenue is derived from the rendering of agency services, real estate services and financial services and is generally recognised at
the point in time when the service is provided. In some cases, Elders will enter into contracts with customers that contain multiple performance
obligations and revenue will be recognised as each of these is satisfied. The transaction price is allocated to each performance obligation
accordingly.
(iii) Interest revenue
Interest income predominantly relates to revenue derived from trade receivables related to the sale of agricultural retail products and is
recognised as it accrues using the effective interest rate method.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 126
GROUP PERFORMANCE — NOTE 4: INCOME TAX
Significant Accounting Judgements, Estimates and Assumptions
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences as management considers that it is probable the future taxable profit will
be available to utilise those temporary differences. Deferred tax assets are recognised for all unused tax losses to the extent that it is probable
that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the
amount of deferred tax assets that can be recognised, based on the likely timing and the level of future taxable profits together with future tax
planning strategies.
(a) Major components of income tax expense are:
Income statement
Current income tax expense
Adjustments in respect of current income tax of previous years
Deferred income tax benefit
Income tax benefit reported in the statement of comprehensive income
2020
$000
(1,337)
(103)
22,661
21,221
2019
$000
(1,895)
(181)
18,285
16,209
(b) Reconciliation of income tax expense applicable to accounting profit/(loss) before income tax at the statutory income tax
rate to income tax expense at Elders’ effective income tax rate is as follows:
Accounting profit/(loss) before tax from:
⋅ Continuing operations
⋅ Discontinued operations
Total accounting profit before tax
Income tax expense at 30% (2019: 30%)
Adjustments in respect of current income tax of previous years
Share of equity accounted profits
Non-assessable losses
Recognition of previously unrecognised losses
Other
Income tax benefit as reported in the statement of comprehensive income
Aggregate income tax benefit/(expense) is attributable to:
⋅ Continuing operations
⋅ Discontinued operations
Current tax payable/(receivable)
104,065
-
104,065
60,415
(5,897)
54,518
(31,220)
(16,355)
(103)
1,957
(944)
53,324
(1,793)
21,221
21,221
-
21,221
1,034
(181)
1,894
(955)
35,705
(3,899)
16,209
17,336
(1,127)
16,209
(398)
Tax losses not recognised as an asset
Elders has tax losses for which no deferred tax asset is recognised in the statement of financial position of $42.7 million (2019: $95.8 million)
which are available indefinitely for offset against future taxable profits subject to continuing to meet relevant statutory tests.
Tax Consolidation
Elders and its 100% owned Australian resident subsidiaries are in a tax consolidated group. Elders Limited is the head entity of the tax consolidated
group. Members of the Group have entered into a tax sharing agreement that provides for the allocation of income tax liabilities between the entities
should the head entity default on its tax payment obligations. No amounts have been recognised in the financial statements in respect of this
agreement on the basis that the possibility of default is remote.
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 GROUP PERFORMANCE — NOTE 4: INCOME TAX
(c) Major components of deferred income tax:
Deferred income tax assets
Losses available to offset against future taxable income
Provision for employee entitlements
Other provisions
Capitalised expenses
Lease liabilities
Other
127
Statement of Financial
Position
Movement
2020
$000
116,113
19,189
3,498
3,563
31,334
636
2019
$000
100,613
13,066
2,947
3,830
-
1,233
2020
$000
15,500
6,123
551
(267)
31,334
(597)
52,644
2019
$000
18,576
(1,809)
1,290
1,314
-
81
19,452
Gross deferred income tax assets
174,333
121,689
Deferred income tax liabilities
Inventory
Intangibles
Right-of-use assets
Other
Gross deferred income tax liabilities
Movement in net deferred tax asset
Deferred income tax benefit recognised in the statement of comprehensive income
Deferred income tax assets/(liabilities) recognised for acquisitions of businesses
(principally related to acquired intangibles)
Deferred income tax benefit recognised in equity
(1,695)
(1,471)
(224)
(599)
(38,080)
(22,513)
(15,567)
(30,254)
(537)
-
(30,254)
(521)
(16)
(70,566)
(24,505)
(46,061)
6,583
22,661
(16,078)
-
6,583
83
-
234
(282)
19,170
18,285
(486)
1,371
19,170
Net deferred tax asset
103,767
97,184
Accounting Policy
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid
to the taxation authorities based on the current period’s taxable income.
Deferred income tax is recognised on temporary differences. Deferred income tax assets are recognised for taxable temporary differences
and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income
tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will
allow the deferred tax asset to be recovered.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST. Receivables and payables are stated inclusive of the amount of
GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and
financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 128
GROUP PERFORMANCE — NOTE 5: EARNINGS PER SHARE
Weighted average number of ordinary shares (‘000) used in calculating basic EPS
Dilutive performance rights (‘000)
Adjusted weighted average number of ordinary shares used in calculating dilutive EPS (‘000)
The following reflects the net profit/(loss) and share data used in the calculations of earnings per share (EPS):
2020
2019
154,094
121,006
975
1,785
155,069
122,791
2020
$000
2019
$000
Reported operations
Basic and dilutive
Net profit attributable to members (after tax)
122,947
68,935
Reported operations:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Continuing operations
Basic
Net profit attributable to members (after tax)
Less: Net loss/(profit) of discontinued operations (net of tax)
Net profit of continuing operations (net of tax)
Continuing operations earnings per share:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Discontinued operations
Net (loss)/profit of discontinued operations (net of tax)
Discontinued operations earnings per share:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
79.8 ¢
79.3 ¢
57.0 ¢
56.1 ¢
122,947
-
122,947
68,935
7,024
75,959
79.8 ¢
79.3 ¢
62.8 ¢
61.9 ¢
-
(7,024)
- ¢
- ¢
(5.8)¢
(5.8)¢
Accounting Policy
Basic earnings per share amounts are calculated by dividing net profit or loss for the year attributable to ordinary equity holders of the parent
by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share are calculated by dividing the net
profit attributable to ordinary equity holders of the parent by the weighted average of ordinary shares outstanding during the period plus the
weighted average number of ordinary shares that would be issued on conversion of all dilutive potential ordinary shares into ordinary shares.
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 WORKING CAPITAL — NOTE 6: RECEIVABLES
Current
Trade debtors
Loss allowance
Amounts receivable from equity accounted investments
Livestock deferred receivables
Prepayments
Other receivables
Total current receivables
129
2020
$000
2019
$000
571,620
439,480
(8,245)
563,375
21,185
6,523
2,375
8,376
(4,641)
434,839
34,341
-
2,419
9,532
601,834
481,131
Included in trade debtors is $74.1 million (2019: $85.5 million) which is subject to credit insurance with various terms and conditions.
Trade debtors are generally on 30 to 90 day terms with the exception of Livestock debtors which are on 10 day terms. In some instances, deferred
terms in excess of 90 days are offered, where Elders also receives extended creditor terms.
In line with AASB 9, trade debtors are reviewed in accordance with the simplified approach to measuring expected credit losses based on the payment
profile of sales over a period of five years and the corresponding historical credit losses experienced within this period, which is reassessed annually.
The historical loss rates are adjusted to reflect current and forward-looking information (including agricultural specific macroeconomic factors)
affecting the ability of the customers to settle the debtors. An additional loss allowance of $1.6 million has been recognised to reflect forward-looking
macroeconomic factors. On that basis, the loss allowance for trade debtors was determined as follows:
2020
Expected loss rate
Gross carrying amount
Loss allowance
2019
Expected loss rate
Gross carrying amount
Loss allowance
Current
1-30 days
past due
31-60 days
past due
61-90 days
past due
+91 days
past due
$000
$000
$000
$000
$000
< 1%
472,309
309
< 1%
327,005
109
< 1%
65,611
156
< 1%
83,887
235
< 1%
8,052
78
< 1%
7,937
79
< 1%
8,732
76
< 1%
4,028
56
45%
16,916
7,626
25%
16,623
4,162
Reconciliation of loss allowances for trade debtors at beginning and end of period:
Opening loss allowance
Increase in loss allowance recognised in profit or loss
Trade debtors written off
Increase in loss allowance through acquisitions
Closing loss allowance
Total
$000
571,620
8,245
439,480
4,641
2020
$000
4,641
3,741
(727)
590
8,245
Related party receivables
For terms and conditions of related party receivables, including from equity accounted investments, refer to note 27.
Fair value and credit risk
Due to the short term nature of trade and other current receivables, their carrying value is assumed to approximate their fair value. For other
receivables the carrying amount is not materially different to their fair values. The maximum exposure to credit risk is the fair value of each class
of receivables. Details regarding credit risk exposure are disclosed in note 17.
Foreign exchange and interest rate risk
Details regarding the foreign exchange and interest rate risk exposure are disclosed in note 17, including those relating to derivative related balances.
Accounting Policy
Trade receivables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest
rate method, less expected credit losses. To measure the expected credit losses, trade receivables have been grouped on days past due.
The expected credit loss rates are based on payment profile over a historical period and the credit losses experienced within this period. The
historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of
the customers to settle the receivables.
Livestock deferred receivables are recognised initially at transaction price and subsequently measured at amortised cost using the effective
interest rate method. All balances hold a maturity of less than 12 months. Interest on livestock deferred receivables is recognised as it accrues
using the effective interest rate method.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 130
WORKING CAPITAL — NOTE 7: BIOLOGICAL ASSETS
Livestock
Current
Fair value at the end of the period
2020
$000
2019
$000
44,734
35,309
At balance date 20,178 head of cattle (2019: 21,273) are included in livestock. This represents cattle held in Australia for feedlotting purposes.
Elders is exposed to a number of risks related to its livestock:
Regulatory and environmental risks
Elders is subject to laws and regulations and has established environmental policies and procedures aimed at compliance with local environmental
and other laws. Management performs regular reviews to identify environmental risks and ensure systems in place are adequate to manage those
risks.
Supply and demand risk
Elders is exposed to financial risk in respect of livestock activity. The primary financial risk associated with this activity occurs due to the length
of time between expending cash on the purchase and ultimately receiving cash from the sale to third parties. Elders is exposed to risks arising from
fluctuations in price and sales volumes, and product substitution. Where possible, Elders manages these risks by aligning volumes with market
supply and demand, and through the sale of livestock on forward contracts.
Other risks
Elders’ livestock are exposed to the risk of damage from disease and other natural forces. Elders has extensive processes in place aimed at monitoring
and mitigating those risks, including regular health inspections and industry pest and disease surveys.
Accounting Policy
Elders holds biological assets in the form of livestock. Livestock is measured at fair value internally as there is no observable market for them.
Where there are unobservable inputs for an asset or liability, these are classified as Level 3 Price Inputs. The value is based on the estimated exit
price per kilogram and the value changes for the weight of each animal as it progresses through the feedlot program. The key factors affecting the
value of each animal are price/kg, days on feed and the feed conversion ratio. The market value increments or decrements are recorded in profit
and loss.
Significant changes in any of the significant unobservable valuation inputs for feedlot cattle in isolation would result in significantly higher or
lower fair value measurement.
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 131
WORKING CAPITAL — NOTE 8: INVENTORY
Significant Accounting Judgements, Estimates and Assumptions
Accounting for rebates
Elders receives rebates associated with the purchase of retail goods from suppliers. These vary in nature and include price and volume rebates.
Rebates received, in line with the relevant contractual arrangements, are recognised as a reduction to cost of sales when the sale of the particular
product occurs. Inventory on hand is recognised net of rebates.
Elders pays rebates associated with the sales of wholesale goods to suppliers. These vary in nature and include price and volume rebates.
Rebates paid, in line with the relevant contractual arrangements, are recognised as a reduction to sales revenue when the sale of the particular
product occurs.
Current
Retail and Wholesale
Other
Total inventory
2020
$000
2019
$000
244,322
138,323
11,608
7,798
255,930
146,121
Inventory write-downs recognised as an expense totalled $3.0 million (2019: $1.1 million). There were no additional write-downs recognised to the
carrying values of inventories from the impact of COVID-19 at 30 September 2020.
Accounting Policy
Inventories are valued at the lower of cost and net realisable value. Costs are assigned to individual items of inventory predominately on the basis
of weighted average cost. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary
to make the sale.
Supplier rebates received are recognised as a reduction in the cost of inventory and are recorded as a reduction in cost of sales when the
inventory is sold.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 132
WORKING CAPITAL — NOTE 9: TRADE AND OTHER PAYABLES
Current
Trade creditors
Payables associated with supplier financing arrangements
Other creditors and accruals
Payables to associated companies
Non current
Other creditors and accruals
Total trade and other payables
2020
$000
2019
$000
452,775
314,605
8,257
54,539
1,549
-
42,974
1,645
517,120
359,224
7,177
16,287
524,297
375,511
Interest rate, foreign exchange and liquidity risk
Information regarding interest rate, foreign exchange and liquidity risk exposure is set out in note 17, including those relating to derivative forward
contracts.
Accounting Policy
Trade and other payables are carried at amortised cost and due to their short term nature they are not discounted. The carrying amount of trade
and other payables are assumed to be the same as their fair values. They represent liabilities for goods and services provided to Elders prior to
the end of the financial year that remain unpaid and arise when Elders becomes obliged to make future payments in respect of the purchase of
these goods and services. The amounts are unsecured and are usually paid within supplier terms.
Financial guarantees
Financial guarantee contracts issued by Elders are those contracts that require a payment to be made to reimburse the holder for a loss it incurs
because the specific debtor fails to make a payment when due in accordance with the terms of the debt instrument. Financial guarantee contracts
are recognised initially at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently,
the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and
the amount recognised less cumulative amortisation. Information regarding financial guarantees is set out in note 16.
Payables associated with supplier financing arrangements
To manage the cash flow conversion cycle on some products procured and to ensure that suppliers receive payment in a time period that suits
their business model, Elders offers some suppliers the opportunity to use supplier financing arrangements. Elders evaluates supplier financing
arrangements against a number of indicators to assess if the balance continues to hold the characteristics of a payable or is required to be
reclassified as borrowings. These indicators include whether the payment terms exceed customary payment terms within the industry of typically
less than 90 days. During the course of the year and as at 30 September 2020, none of the balances subject to supplier financing arrangements
met the characteristics to be reclassified as borrowings and the balances remained in other payables. Balances associated with supplier
financing arrangements are unsecured. In the statement of cash flows supplier financing is classified within cash flows from operating activities.
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 133
CAPITAL EMPLOYED — NOTE 10: PROPERTY, PLANT AND EQUIPMENT
Significant Accounting Judgements, Estimates and Assumptions
Impairment of non-financial assets other than brand names and goodwill
Elders assesses impairment of all assets at each reporting date by evaluating conditions specific to the company and to the particular asset
that may lead to impairment. These include product performance, technology, climate, economic and political environments and future product
expectations. If an impairment trigger exists, the recoverable amount of the asset is determined. It is Elders’ policy to conduct bi-annual internal
reviews of asset values, which are used as sources of information to assess for indicators of impairment. Assets have been tested for impairment
in accordance with the accounting policies, including the determination of recoverable amounts of assets using the higher of value in use and fair
value less cost to sell.
Reconciliation of carrying amounts at beginning and end of period:
Freehold land
Buildings
Leasehold
improvements
Plant and
equipment
(owned)
Plant and
equipment
(leased)
Assets under
construction
Total
$000
$000
$000
$000
$000
$000
$000
2020
Carrying amount at beginning of period
3,418
Transfers to right-of-use assets
Additions
Additions through business
combinations
Disposals
Depreciation expense
Exchange fluctuations
Transfers from assets under
construction
Other
-
-
102
(4)
-
-
-
-
7,860
-
3,623
-
(105)
(605)
-
646
-
5,207
-
161
-
(15)
(853)
-
-
2
8,780
-
3,352
2,876
(276)
(2,338)
81
-
(2)
Carrying amount at end of period
3,516
11,419
4,502
12,473
Cost
Accumulated depreciation
and impairment
3,516
-
19,222
(7,803)
12,817
30,541
(8,315)
(18,068)
3,516
11,419
4,502
12,473
1,378
(1,378)
-
-
-
-
-
-
-
-
-
-
-
2019
Carrying amount at beginning of period
3,418
Additions
Additions through business
combinations
Disposals
Depreciation expense
Impairment
Exchange fluctuations
Transfers from assets under
construction
-
-
-
-
-
-
-
6,842
1,396
-
(24)
(578)
-
-
224
5,671
408
-
(40)
(832)
-
-
-
9,475
1,163
196
(45)
(1,802)
(214)
7
-
1,641
434
-
-
(697)
-
-
-
762
-
242
-
-
-
-
(646)
-
358
358
-
358
271
751
-
-
-
-
-
(260)
27,405
(1,378)
7,378
2,978
(400)
(3,796)
81
-
-
32,268
66,454
(34,186)
32,268
27,318
4,152
196
(109)
(3,909)
(214)
7
(36)
Carrying amount at end of period
3,418
7,860
5,207
8,780
1,378
762
27,405
Cost
Accumulated depreciation and
impairment
3,418
-
3,418
15,849
(7,989)
12,958
26,448
(7,751)
(17,668)
2,825
(1,447)
7,860
5,207
8,780
1,378
762
-
762
62,260
(34,855)
27,405
All property, plant and equipment is pledged as security, refer to note 16 for interest bearing loans and borrowings.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 134
CAPITAL EMPLOYED — NOTE 10: PROPERTY, PLANT AND EQUIPMENT
Accounting Policy
Property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Such costs
include the cost of replacing part of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition
criteria are met. When significant parts of property, plant and equipment are required to be replaced at intervals, Elders recognises such parts as
individual assets with specific useful lives and depreciates them accordingly. All other repairs and maintenance are recognised in profit or loss as
incurred.
Property, plant and equipment, excluding freehold land and assets under construction, are depreciated over the estimated useful economic life
of specific assets as follows:
Buildings
Leasehold improvements
Plant and equipment – owned
Network infrastructure
Life
50 years
Lease term
3 to 10 years
5 to 25 years
Method
Straight line
Straight line
Straight line
Straight line
The useful lives are consistent with those of the prior period. The assets’ residual values, useful lives and depreciation methods are reviewed,
and adjusted if appropriate at each financial year end.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or
disposal. Gains and losses on disposal are determined by comparing the proceeds with the carrying amount. These are included in the statement
of comprehensive income.
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 135
CAPITAL EMPLOYED — NOTE 11: LEASES
Significant Accounting Judgements, Estimates and Assumptions
Accounting for leases
In determining the lease term, Elders considers all facts and circumstances that create an economic incentive to exercise an extension option,
or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is
reasonably certain to be extended (or not terminated). Elders holds leases of operational importance (e.g. rural cornerstone property leases)
which are expected to be extended for the maximum available lease term. Leases of this nature have been assessed using the extended
lease term. For all other leases, the lease term excluding extension and termination options has been applied. The assessment is reviewed
if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of Elders.
Where Elders is a lessee:
(a) Amounts recognised in the balance sheet
Reconciliation of carrying amounts of right-of-use assets at beginning and end of period:
2020
Right-of-use assets recognised on transition at 1 October 2019
Reclassification of lease incentives on transition
Additions
Additions through entities acquired
Depreciation expense
Lease modifications
Carrying amount at end of period
Reconciliation of carrying amounts of lease liabilities at beginning and end of period:
Lease liabilities recognised on transition at 1 October 2019
Additions
Additions through entities acquired
Interest expense
Lease modifications
Repayments of principal
Carrying amount at end of period
Lease liabilities of which are:
⋅ Current lease liabilities
⋅ Non current lease liabilities
(b) Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
Depreciation expense of right-of-use assets which relates to:
⋅ Properties
⋅ Motor vehicles
⋅ Other
Low value leases
Interest expense on lease liabilities
Total amount recognised in profit or loss
Motor
vehicles
$000
Other
$000
Total
$000
20,172
1,065
117,892
Properties
$000
96,655
(2,356)
-
14,761
-
4,819
-
(21,262)
(11,648)
(1,076)
86,722
-
13,343
-
-
-
(268)
(60)
737
(2,356)
4,819
14,761
(33,178)
(1,136)
100,802
2020
$000
117,892
4,819
14,761
2,623
(1,136)
(34,458)
104,501
28,500
76,001
104,501
(21,262)
(11,648)
(268)
(1,569)
(2,623)
(37,370)
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020
136
CAPITAL EMPLOYED — NOTE 11: LEASES
(c) Amounts recognised in segment disclosures
Segment Information in note 1 includes the following amounts related to leases:
2020
Branch Network
Wholesale Products
Feed and Processing Services
Corporate Services and Other Costs
Segment
Result
Segment
Assets
Segment
Liabilities
$000
$000
$000
1,234
97
35
(31)
70,254
11,637
1,544
17,367
70,874
11,873
1,561
20,193
1,335
100,802
104,501
Accounting Policy
Elders leases various offices, warehouses, retail stores and motor vehicles. Rental contracts are typically made for an average period of three
years but may have extension options as described below. Lease terms are negotiated on an individual basis and contain a wide range of
different terms and conditions. The lease agreements do not impose any covenants, however leased assets may not be used as security for
borrowing purposes.
From 1 October 2020, leases are recognised as a right-of-use asset with a corresponding liability at the date at which the leased asset is
available for use. Each lease payment is allocated between the liability and interest expense. The interest expense is charged to profit or loss
over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use
asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the
following lease payments:
⋅ fixed payments (including in-substance fixed payments), less any lease incentives receivable
⋅ variable lease payment that are based on an index or a rate
⋅ the exercise price of a purchase option if the lessee is reasonably certain to exercise that option
Lease payments are discounted using Elders incremental borrowing rate, being the rate Elders would have to pay to borrow the funds necessary
to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
Elders is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability
until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted
against the right-of-use asset.
Right-of-use assets are measured at cost comprising the following:
⋅ the amount of the initial measurement of lease liability
⋅ any lease payments made at or before the commencement date less any lease incentives received
Payments associated with leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Low-value assets
comprise of IT equipment and office equipment. Elders does not have any short term leases with a lease term of 12 months or less.
Extension and termination options
Extension and termination options are included in Elders’ property leases. These terms are used to maximise operational flexibility in terms of
managing contracts. The majority of the extension and termination options held are exercisable only by Elders and not by the respective lessor.
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020
137
CAPITAL EMPLOYED — NOTE 12: INTANGIBLES
Significant Accounting Judgements, Estimates and Assumptions
Impairment of brand names and goodwill
Elders assesses impairment of assets at each reporting date by evaluating conditions specific to the company and to the particular asset that
may lead to impairment. These include product performance, technology, climate, economic and political environments and future product
expectations. If an impairment trigger exists the recoverable amount of the asset is determined. It is Elders’ policy to conduct bi-annual internal
reviews for indicators of impairment. If indicators exist, assets are tested for impairment through determination of recoverable amounts of assets
using the higher of value in use and fair value less cost to sell.
Elders determines whether the brand names and goodwill are impaired or whether it is appropriate to reverse any previous impairments on an
annual basis. This requires an estimation of the recoverable amount of the associated cash-generating units, using a value in use discounted
cash flow methodology, to which the brand names or goodwill is allocated.
Reconciliation of carrying amounts at beginning and end of period:
Goodwill
Rent rolls &
loan books
Brand names
Distribution
rights
Customer
Intangibles
Other
$000
$000
$000
$000
$000
$000
Non current
2020
Carrying amount at beginning of period
59,977
8,576
71,360
23,000
Additions
Additions through business
combinations
Amortisation
Impairment
-
86,975
-
-
Carrying amount at end of period
146,952
Cost
Accumulated amortisation
and impairment
146,952
-
491
278
(1,131)
-
8,214
11,693
(3,479)
-
7,802
-
-
-
-
-
-
-
-
47,621
(3,145)
-
3,941
1,220
142
(542)
(318)
79,162
23,000
44,476
4,443
306,247
79,162
23,000
-
-
47,621
(3,145)
5,574
(1,131)
314,002
(7,755)
Total
$000
166,854
1,711
142,818
(4,818)
(318)
146,952
8,214
79,162
23,000
44,476
4,443
306,247
2019
Carrying amount at beginning of period
Additions
Additions through business
combinations
Transfers from assets under
construction
Amortisation
47,918
-
12,059
-
-
Carrying amount at end of period
59,977
7,563
-
1,980
-
(967)
8,576
71,148
-
212
-
-
-
23,000
-
-
-
71,360
23,000
Cost
Accumulated amortisation
and impairment
59,977
-
10,924
(2,348)
71,360
23,000
-
-
59,977
8,576
71,360
23,000
-
-
-
-
-
-
-
-
-
2,362
1,797
-
36
(254)
3,941
4,212
(271)
128,991
24,797
14,251
36
(1,221)
166,854
169,473
(2,619)
3,941
166,854
For impairment testing purposes, all intangibles except for the Elders’ Brand Name have been allocated to the Branch Network and Wholesale
Products cash generating units as applicable. For Branch Network, $72.6 million of goodwill, $11.2 million of brand names and $23.0 million of
distribution rights were allocated for impairment testing. For Wholesale Products, $74.3 million of goodwill and $7.6 million of brand names were
allocated for impairment testing. The Elders Brand Name has not been allocated to individual cash generating units but rather assessed against all
cash generating units expected to benefit from it.
The recoverable amount of cash generating units has been determined based on a value in use calculation using cash flow projections approved by
management that covers a period of 5 years. Future cash flows are based on budgets and forecasts taking into account current market conditions and
known future business events that will impact cash flows. The discount rate applied to the cash flow projections is 10.0% pre-tax (2019: 9.7% pre-
tax) which has been determined based on a weighted average cost of capital calculation which incorporates the specific risks relating to the cash
generating units identified.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 138
CAPITAL EMPLOYED — NOTE 12: INTANGIBLES
The calculation of value in use for cash generating units was based on the following key assumptions:
Gross margin
Gross margin is expected to increase in financial year 2021 due to:
⋅ increased earnings from geographical expansion through acquisitions and footprint growth
⋅ higher earnings from continued organic growth focus across our product and service portfolio
⋅ full year impact of AIRR and other acquisition earnings
⋅ additional growth through the continued expansion of the backward integration strategy
Selling, general and administrative expenses
Ongoing emphasis on cost control will be offset by investment directly linked to margin improvement and control enhancement, including
implementation of remuneration models which drive performance and growth.
Growth rate estimates
Cash flows are based on the 2021 budget. No growth rate for years 2 to 5 or perpetuity has been incorporated in the discounted cash flow.
Discount rates
Discount rates reflect management’s estimate of the time value of money and the specific risk not already reflected in the cash flows.
Elders has reviewed the key assumptions in its impairment assessment to assess whether any changes to the assumptions, including in relation
to the COVID-19 outbreak, would result in an impairment loss at 30 September 2020. Elders concluded that there were no reasonably possible
changes to assumptions which would result in an impairment loss at 30 September 2020.
Accounting Policy
(i) Brand names
The brand name intangibles are deemed to have an indefinite useful life and are not amortised. The brand name value represents the value
attributed to brands when acquired through business combinations and is carried at cost less accumulated impairment losses. The brand names
have been determined to have an indefinite useful life due to there being no foreseeable limit to the period over which they are expected to
generate net cash inflows, given the strength and durability of the brands and the level of marketing support. The brands have been in the rural
and regional Australian market for many years, and the nature of the industry Elders operates in is such that brand obsolescence is not common,
if appropriately supported by advertising and marketing spend.
Expenditure incurred in developing, maintaining or enhancing the brand names is expensed in the year that it occurred.
(ii) Goodwill
After initial recognition, goodwill acquired in a business combination is measured at cost less any accumulated impairment losses.
Goodwill is not amortised but is subject to impairment testing on an annual basis or whenever there is an indicator of impairment.
(iii) Rent rolls and loan books
Rent rolls and loan books have been acquired and are carried at cost less accumulated amortisation and impairment losses. These intangible
assets have been determined to have finite useful lives and are amortised over their useful lives of 10 years and tested for impairment whenever
there is an indicator of impairment.
(iv) Distribution rights
Amount relates to a livestock and wool delivery guarantee distribution right. After initial recognition, distribution rights are measured at cost less
any accumulated impairment losses. These intangible assets have been assigned an indefinite life and are subject to impairment testing on an
annual basis or whenever there is an indicator of impairment.
(v) Customer intangibles
Customer intangibles relates to wholesale and member relationships recognised as part of the AIRR acquisition and are carried at cost less
accumulated amortisation and impairment losses. These intangible assets have been determined to have finite useful lives and are amortised
over their useful lives of 10 to 15 years and tested for impairment whenever there is an indicator present.
(vi) Other
Other intangibles mainly relate to software and development of IT infrastructure and are carried at cost less accumulated amortisation and
impairment losses. Software and IT intangible assets have been determined to have finite useful lives and are amortised over their useful lives
of 5 years and tested for impairment whenever there is an indicator of impairment. Other intangibles also include indefinite life assets.
The useful life of an intangible asset with an indefinite life is reviewed each reporting period to determine whether the indefinite life assessment
continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for as a change in accounting
estimate and is thus accounted for on a prospective basis.
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 139
Balance
date
30-Jun
30-Sep
31-Dec
30-Jun
30-Jun
Ownership interest
2020
%
50
49
20
30
30
2019
%
50
49
20
30
30
CAPITAL EMPLOYED — NOTE 13: EQUITY ACCOUNTED INVESTMENTS
Auctions Plus Pty Ltd
Elders Financial Planning Pty Ltd
Elders Insurance (Underwriting Agency) Pty Ltd
StockCo Holdings Pty Ltd
Clear Grain Pty Ltd
Auctions Plus Pty Ltd
Elders Insurance (Underwriting Agency) Pty Ltd
StockCo Holdings Pty Ltd
Clear Grain Pty Ltd
Equity accounted investments
Consolidated entity
investment
Contribution
to net profit
Dividends received
2020
$000
2,176
42,116
10,826
1,355
56,473
2019
$000
1,297
42,361
8,866
1,222
53,746
2020
$000
1,699
6,012
(1,339)
152
6,524
2019
$000
849
6,038
(614)
40
6,313
2020
$000
821
6,258
-
18
2019
$000
913
5,812
-
-
7,097
6,725
All equity accounted investments are Australian resident companies. On 30 June 2020, Elders made a further capital injection of $3.3 million in
StockCo Holdings Pty Ltd. In the prior period, Elders impaired its investment in Elders Financial Planning Pty Ltd (49% share) as a consequence of
Elders Financial Planning exiting its business.
Elders Insurance (Underwriting Agency) Pty Ltd contribution to net profit for period ending 30 September 2020 includes an adjustment to the prior
period related to the adoption of AASB 15. Excluding this item, which is included in other items of income and expense in note 3, the contribution to
net profit from equity accounted investments is $7.3 million.
In addition to the contribution to Elders’ net profit from its investment in StockCo Holdings Pty Ltd, Elders also receives income from other revenue
streams. Further details are provided in note 27.
Summary financial information for equity accounted investees is as follows:
2020
Auctions Plus Pty Ltd
Elders Insurance (Underwriting Agency) Pty Ltd
StockCo Holdings Pty Ltd
Clear Grain Pty Ltd
Total
2019
Auctions Plus Pty Ltd
Elders Financial Planning Pty Ltd
Elders Insurance (Underwriting Agency) Pty Ltd
StockCo Holdings Pty Ltd
Clear Grain Pty Ltd
Total
Profit/(loss)
after income
tax
Assets
Liabilities
$000
$000
$000
3,399
30,058
(4,465)
506
6,835
75,753
2,484
66,425
224,855
223,357
1,614
1,118
29,498
309,057
293,384
1,698
(186)
30,190
4,992
1,991
72,762
(2,050)
222,858
133
2,179
2,397
960
62,208
226,809
2,061
29,785
304,782
294,435
Accounting Policy
Elders’ equity accounted investments are accounted for using the equity method of accounting in the consolidated financial statements and
at cost in the parent. Equity accounted investments are entities over which Elders has significant influence and that are neither subsidiaries nor
joint ventures.
Under the equity method, equity accounted investments are carried in the consolidated financial statements at cost plus post acquisition
changes in Elders’ share of net assets of the investment. Goodwill relating to the investment is included in the carrying amount of the investment
and is neither amortised nor individually tested for impairment.
The statement of comprehensive income reflects Elders’ share of the results of operations of the equity accounted investments.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 140
CAPITAL EMPLOYED — NOTE 14: PROVISIONS
Reconciliation of carrying amounts at beginning and end of period:
2020
As at beginning of period
Arising during year
Utilised
Unused amounts reversed
Discount rate adjustment
Provisions arising from entities acquired
Disclosed as:
Current
Non current
Total
2019
As at beginning of period
Arising during year
Utilised
Unused amounts reversed
Discount rate adjustment
Provisions arising from entities acquired
Disposals of controlled entities
Disclosed as:
Current
Non current
Total
Employee
benefits
Restructuring
provisions
Make good
Onerous
contracts
Other
$000
$000
$000
$000
$000
43,774
25,638
2,535
380
(7,858)
(1,722)
-
405
2,189
64,148
61,417
2,731
64,148
49,866
5,064
(11,958)
-
2,083
67
(1,348)
43,774
41,231
2,543
43,774
-
-
-
1,193
1,193
-
1,193
100
2,535
(100)
-
-
-
-
2,535
2,535
-
2,535
271
570
(47)
(100)
-
-
694
694
-
694
196
121
(46)
-
-
-
-
271
271
-
271
59
-
(59)
-
-
-
-
-
-
-
227
-
(168)
-
-
-
-
59
59
-
59
132
2,181
(122)
(10)
-
-
2,181
2,181
-
2,181
465
117
(120)
(330)
-
-
-
132
132
-
132
Total
$000
46,771
28,769
(9,808)
(110)
405
2,189
68,216
65,485
2,731
68,216
50,854
7,837
(12,392)
(330)
2,083
67
(1,348)
46,771
44,228
2,543
46,771
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 141
CAPITAL EMPLOYED — NOTE 14: PROVISIONS
Accounting Policy
Provisions are recognised when Elders has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow
of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. When Elders expects some or all of the provision to be reimbursed, for example under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the
statement of comprehensive income net of any reimbursement.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the
reporting date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the
risks specific to the liability. The increase in the provision resulting from the passage of time is recognised in finance costs.
Employee benefits
(i) Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting
date are recognised in respect of employees’ service up to the reporting date. They are measured at the amounts expected to be paid when the
liabilities are settled. Expenses for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or
payable.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected
future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future
payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currencies that
match, as closely as possible, the estimated future cash outflows.
(iii) Incentives
Includes corporate, network and other incentives. These are accrued throughout the reporting period, according to performance based
measures.
Restructuring provisions
Provisions are only recognised when general recognition criteria provisions are fulfilled. Additionally, Elders needs to follow a detailed formal
plan about the business or part of the business concerned, the location and the number of employees affected, a detailed estimate of the
associated costs, and appropriate time line. The people affected have a valid expectation that the restructuring is being carried out or the
implementation has been initiated already.
Make Good (Restoration)
Where Elders has entered into leasing arrangements that require the leased asset to be returned at the end of the lease term in its original
condition, an estimate is made of the costs of restoration or dismantling of any improvements and a provision is raised.
Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be derived from a contract are lower than the unavoidable cost
of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the
contract and the expected net cost of complying with the contract. Before a provision is established, Elders recognises any impairment loss on
the assets associated with that contract.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 142
NET DEBT — NOTE 15: CASH FLOW STATEMENT RECONCILIATION
(a) Reconciliation of net profit after tax to net cash flows from operations
Profit after income tax expense
Adjustments for non cash items:
Depreciation and amortisation
Unwinding of discount in regards to payables
Equity accounted profits
Dividends from equity accounted investments
Fair value adjustments to equity accounted investments
Other fair value adjustments
Impairments
Doubtful debts
Employee entitlements
Other provisions
Other write downs
Net profit on sale of non current assets
Net tax movements
Other non cash items
⋅ (Increase)/decrease in receivables and other assets
⋅ (Increase)/decrease in inventories
⋅ Increase/(decrease) in payables and provisions
Net cash flows from operating activities
(b) Cash and cash equivalents
Cash at bank and in hand
(c) Net debt reconciliation
Cash and cash equivalents
Borrowings – repayment within one year
Borrowings – repayment after one year
Lease liabilities
Net debt
Cash and liquid investments
Gross debt – fixed interest rates
Gross debt – variable interest rates
Net debt
2020
$000
125,286
41,792
1,289
(6,524)
7,097
-
2,525
318
3,741
26,043
3,021
2,956
(524)
2019
$000
70,727
5,130
3,046
(6,313)
6,725
(150)
(134)
943
2,245
7,147
2,443
1,626
(166)
(21,229)
(21,195)
1,945
187,736
(73,654)
(61,905)
90,164
142,341
3,138
75,212
(39,208)
1,946
(26,714)
11,236
50,741
7,313
50,741
7,313
(158,691)
(100,695)
(25,000)
(104,501)
(870)
-
(237,451)
(94,252)
50,741
(164,501)
(123,691)
7,313
(61,416)
(40,149)
(237,451)
(94,252)
Non-cash investing and financing activities disclosed in other notes are:
⋅ acquisition of right-of-use assets – note 11(b)
⋅ shares issued a part of purchase consideration of a business combination – note 24
⋅ dividend distributions through the issue of shares under the dividend reinvestment plan – note 21
⋅ shares issued to eligible executives under Elders Long-Term Incentive Plan – note 28
At balance date, Elders held $29.8 million (2019: $23.5 million) of client monies in trust which are off balance sheet. The funds are held on behalf of
clients in the Real Estate business and Elders is bound by the relevant legislation in each state in relation to controls and governance over the funds.
Accounting Policy
Cash and cash equivalents in the statement of financial position comprise cash at banks and on hand and short-term deposits with a maturity of
three months or less. For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of cash and cash deposits
as defined above, net of outstanding bank overdrafts.
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020
NET DEBT — NOTE 16: INTEREST BEARING LOANS AND BORROWINGS
Current
Unsecured loans
Trade receivables and other working capital funding
Finance lease liabilities
Non current
Secured loans
Finance lease liabilities
Total current and non current
143
2020
$000
2019
$000
3,467
-
155,224
100,149
-
546
158,691
100,695
25,000
-
25,000
183,691
-
870
870
101,565
Elders has complied with all applicable bank covenants throughout the reporting period.
Elders also has an ancillary facility in relation to contingent funding, such as bank guarantees. As at 30 September 2020, $6.5 million had been
issued (2019: $6.6 million).
Assets pledged as security
Secured loans are secured by various fixed and floating charges over all the assets of Elders Limited (either directly or indirectly).
Trade receivables and other working capital funding is secured over the underlying debtors. This facility expires in December 2021.
Fair value
The carrying value of interest bearing liabilities approximates fair value.
As at 30 September 2019, Elders leased various properties and motor vehicles with a carrying amount of $1.4 million under finance leases expiring
within 1 to 3 years. Finance lease liabilities were included in borrowings until 30 September 2019 and reclassified to lease liabilities on 1 October
2019 as a result of Elders adopting AASB 16 leases. Further details are provided in the note ‘about this report’.
Accounting Policy
All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After
initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method.
Borrowings are classified as current liabilities unless Elders has an unconditional right to defer settlement of the liability for at least 12 months
after the reporting date.
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (i.e. an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale) are capitalised as part of the cost of that asset. All other borrowing costs are
expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of
funds.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 144
RISK MANAGEMENT — NOTE 17: FINANCIAL INSTRUMENTS
Elders’ principal financial instruments comprise cash, receivables, payables, interest bearing loans and borrowings, and derivatives.
Risk exposures and responses
Elders manages its exposure to key financial risks, including interest rate and currency risk in accordance with its financial risk management policy.
The objective of the policy is to support the delivery of financial targets while protecting future financial security. The main risks arising from Elders’
financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk. Elders uses different methods to measure and manage
different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments
of market forecasts for interest rate and foreign exchange prices. Ageing analysis and monitoring of specific credit allowances are undertaken to
manage credit risk. Liquidity risk is monitored through the development of future rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised below.
(a) Interest rate risk
Elders’ exposure to market interest rates relates primarily to short-term debt obligations. The level of debt is disclosed in note 16. At 30 September
2020 interest on $60.0 million (2019: $60.0 million) of secured loans was hedged under a floating to fixed arrangement, meaning at balance date,
Elders had the following mix of financial assets and liabilities exposed to Australian variable interest rate risk:
Financial assets
Cash and cash equivalents
Financial liabilities
Interest bearing loans and liabilities
Net exposure
2020
$000
50,741
50,741
2019
$000
7,313
7,313
(123,691)
(40,149)
(72,950)
(32,836)
Elders constantly analyses its interest rate exposure so as to manage its cash flow volatility arising from interest rate changes. Within this analysis
consideration is given to potential renewals of existing positions, alternative financing, alternative hedging positions and the mix of fixed and variable
interest rates.
The following sensitivity analysis is based on the interest rate risk exposures in existence at the balance sheet date. At balance dates, if interest rates
had moved as illustrated in the table below, with all other variables held constant, post tax profit and equity would have been affected as follows:
+ 100 basis points
– 100 basis points
Post tax profit/equity
Higher/(lower)
(730)
730
(328)
328
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 145
RISK MANAGEMENT — NOTE 17: FINANCIAL INSTRUMENTS
(b) Liquidity risk
Liquidity risk arises from Elders’ financial liabilities and the subsequent ability to meet our obligations to repay their financial liabilities as and
when they fall due. Elders’ objective is to maintain a balance between continuity of funding and flexibility through the use of committed available
lines of credit. Elders manages its liquidity risk by monitoring the total cash inflows and outflows expected on a daily basis. Elders has established
comprehensive risk reporting covering its business units that reflect expectations of management of the expected settlement of financial assets
and liabilities. Elders has not identified or experienced additional liquidity risk as a result of COVID-19. As at 30 September 2020, Elders has
$258.0 million of undrawn facilities.
(i) Non derivative financial liabilities
The following liquidity risk disclosures reflect all contractually fixed pay-offs, repayments and interest resulting from the recognised financial liabilities
and financial guarantees as of 30 September 2020. For the other obligations the respective undiscounted cash flows for the respective upcoming
fiscal years are presented. The timing of cash flows for liabilities is based on the contractual terms of the underlying contract.
However, where the counterparty has a choice of when the amount is paid, the liability is allocated to the earliest period in which Elders can be
required to pay. When Elders is committed to make amounts available in instalments, each instalment is allocated to the earliest period in which we
are required to pay. For financial guarantee contracts, the maximum amount of the guarantee is allocated to the earliest period in which the guarantee
can be called. The risk implied from the values shown in the table below, reflects a balanced view of cash inflows and outflows of non-derivative
financial instruments.
2020
Non derivative financial assets:
Cash and cash equivalents
Trade and other receivables
Non derivative financial liabilities:
Interest bearing loans and borrowings
Lease liabilities
Trade and other payables
Financial guarantees
Net inflow/(outflow)
2019
Non derivative financial assets:
Cash and cash equivalents
Trade and other receivables
Non derivative financial liabilities:
Interest bearing loans and borrowings
Trade and other payables
Financial guarantees
Net inflow/(outflow)
Carrying
amount
Contractual
cash flows
6 months
or less
6-12 months
> 1 year
$000
$000
$000
$000
$000
50,741
610,079
660,820
50,741
610,079
660,820
50,741
610,079
660,820
(183,691)
(183,691)
(158,691)
-
-
-
-
(104,501)
(110,330)
(14,442)
(14,442)
(524,297)
(524,297)
(513,473)
(3,647)
-
(6,526)
(6,526)
-
-
-
-
(25,000)
(81,446)
(7,177)
-
(812,489)
(824,844)
(693,132)
(18,089)
(113,623)
(151,669)
(164,024)
(32,313)
(18,089)
(113,623)
7,313
485,772
493,085
7,313
485,772
493,085
7,313
485,772
493,085
(101,717)
(101,717)
(100,149)
(375,511)
(375,511)
(359,201)
-
(6,572)
(6,572)
(477,228)
(483,800)
(465,922)
15,857
9,285
27,163
-
-
-
(616)
(849)
-
(1,465)
(1,465)
-
-
-
(952)
(16,287)
-
(17,239)
(17,239)
(ii) Derivative financial instruments
Due to the unique characteristics and inherent risks to derivative instruments, Elders separately monitors liquidity risk arising from transacting in
derivative instruments. The following table details the liquidity risk arising from derivative financial assets and liabilities held by Elders at balance
date. Net settled derivatives comprise interest rate hedges, which are recognised within receivables on the statement of financial position.
2020
Derivative liabilities – net settled
Total outflow
2019
Derivative liabilities – net settled
Total outflow
(262)
(262)
(803)
(803)
(262)
(262)
(803)
(803)
(262)
(262)
(803)
(803)
-
-
-
-
-
-
-
-
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 146
RISK MANAGEMENT — NOTE 17: FINANCIAL INSTRUMENTS
(c) Credit risk
Credit risk arises from Elders’ financial assets, which comprise cash and cash equivalents, trade and other receivables, and derivative instruments.
Elders’ exposures to credit risk arise from potential default of the counterparty, with the maximum exposure equal to the carrying amount of the
financial assets. The ageing of trade and other receivables at balance date is reported at note 6. The credit risk associated with cash and derivatives is
located primarily in Australia.
Trade receivables are reviewed in accordance with the simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance. To measure expected losses, trade receivables have been grouped on days past due. Expected credit losses are based on the payment
profile of sales over a period of 5 years and the historical default experience within this period. The historical loss rates are adjusted to reflect current
and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. Elders assessment of
additional credit risk, given COVID-19 uncertainties, indicated an immaterial change, therefore no changes were made to loss allowances.
Elders minimises concentrations of credit risk by undertaking transactions with a large number of debtors in various locations. The credit risk amounts
do not take into account the value of any collateral or security. The creditworthiness of counterparties is regularly monitored and subject to defined
credit policies, procedures, limits and insurance positions. The amounts disclosed do not reflect expected losses and are shown gross of provisions.
The maximum exposure to credit risk at the reporting date was:
Cash and cash equivalents
Trade and other receivables
Location of credit risk
Australia
Asia
Other
Total
2020
$000
50,741
610,079
660,820
2019
$000
7,313
485,772
493,085
653,672
486,424
6,956
192
6,661
-
660,820
493,085
(d) Foreign currency risk
Elders is exposed to movements in the exchange rates of a number of currencies. These are primarily generated from the following activities:
⋅ purchase and sale contracts written in foreign currency
⋅ receivables and payables denominated in foreign currencies
⋅ commodity cash prices that are partially determined by movements in exchange rates
Foreign exchange risk is managed within Board approved limits using forward foreign exchange and foreign currency contracts. Where possible,
exposures are netted off against each other to minimise the cost of hedging. Hedge accounting was not applied for the year ended 30 September
2020, with foreign currency contracts fair valued at balance date with gains and losses recognised immediately through the statement of
comprehensive income. As at 30 September 2020, the amount outstanding on foreign currency contracts was a liability of $1.2 million
(2019: $0.6 million asset).
As at 30 September 2020, Elders had the following AUD exposures to foreign currencies that were not designated in cash flow hedges:
Financial assets
Cash and cash equivalents – CNY
Cash and cash equivalents – IDR
Cash and cash equivalents – other
Receivables – CNY
Receivables – IDR
Financial liabilities
Payables – CNY
Payables – IDR
Interest bearing loans and borrowings – CNY
Net exposure
1,949
815
192
3,300
893
7,149
(1,187)
(240)
(3,467)
(4,894)
2,255
515
885
151
3,017
2,092
6,660
(1,083)
(1,098)
-
(2,181)
4,479
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 147
RISK MANAGEMENT — NOTE 17: FINANCIAL INSTRUMENTS
Given the foreign currency balances included in the statement of financial position at balance date, if the Australian dollar at that date strengthened
by 10% with all other variables held constant, then the impact on post tax profit/(loss) arising on the balance sheet exposure would be as follows:
CNY
IDR
Other
Post tax profit
Higher/(lower)
(60)
(147)
(19)
(245)
(188)
(15)
A 10% weakening of the Australian dollar against the above currencies would have had the equal but opposite effect on the above currencies to the
amounts shown above, on the basis that all other variables are held constant.
Accounting Policy
Elders uses forward currency contracts to hedge risks associated with foreign currency rate fluctuations. Such derivative financial instruments
are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured to fair value.
Derivatives are carried as financial assets when their fair value is positive and as financial liabilities when their fair value is negative. Derivative
assets and liabilities are classified as non current in the statement of financial position when the remaining maturity is more than 12 months,
or current when the remaining maturity is less than 12 months.
The fair values of forward currency contracts are calculated by reference to current forward exchange rates for contracts with similar maturity
profiles. Any gains or losses arising from changes in fair value of derivatives are taken directly to profit and loss.
From 1 October 2020, Elders will adopt the hedge accounting principles contained within AASB 9 Financial Instruments. As a result, the way
Elders accounts for the movements in fair values for derivative financial instruments will change. To the extent hedges are effective, Elders will
no longer recognise the movements in fair value of derivative financial instruments in profit and loss. For all hedges entered into from 1 October
2020, Elders will recognise the movements in fair value of the derivative financial instruments in reserves and only recognise the cumulative
difference in the statement of comprehensive income when the hedged item is recognised.
(e) Fair value of financial assets and liabilities
Elders use various methods in estimating the fair value of a financial instrument. The methods comprise:
⋅ Level 1 – the fair value is calculated using quoted prices in active markets
⋅ Level 2 – the fair value is estimated using inputs other than quoted prices included in level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices)
⋅ Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable market data
All forward exchange derivative contracts were measured at fair value using the level 2 method. Fair value of derivative instruments approximates
the carrying value. The fair values of forward currency contracts are calculated by reference to current forward exchange rates for contracts with
similar maturity profiles. Any gains or losses arising from changes in fair value of derivatives are taken directly to profit and loss.
The fair value of financial instruments as well as the method used to estimate the fair values are summarised in the table below:
Quoted
market price
(Level 1)
$000
-
-
-
2020
Valuation
technique
– market
observable
inputs
(Level 2)
$000
Valuation
technique –
non market
observable
inputs
(Level 3)
$000
(262)
(1,201)
(1,463)
-
-
-
Quoted
market price
(Level 1)
$000
-
-
-
2019
Valuation
technique
– market
observable
inputs
(Level 2)
$000
Valuation
technique –
non market
observable
inputs
(Level 3)
$000
(803)
594
(209)
-
-
-
Financial assets and liabilities
Interest rate derivatives
Foreign currency derivatives
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 148
EQUITY — NOTE 18: CONTRIBUTED EQUITY
2020
$000
2019
$000
Issued and paid up capital
155,753,725 ordinary shares (September 2019: 141,650,621)
1,645,561
1,562,377
The movement in the dollar balance of share capital is a result of:
⋅ $2.8 million of dividends where the shareholders have participated in the dividend reinvestment plan
⋅ $80.4 million increase due to shares issued in relation to the scheme of arrangement to AIRR shareholders
The following ordinary shares were issued during the year:
⋅ 668,192 shares issued upon vesting of performance rights in accordance with Elders’ Long-Term Incentive Plan, including additional shares
of 41,492 representing the value of dividends forgone during the performance period
⋅ 384,911 shares issued in accordance with Elders’ dividend reinvestment plan
⋅ 13,050,001 shares issued in relation to the scheme of arrangement to AIRR shareholders
Elders considers both capital and net debt as relevant components of funding, hence, part of its capital management. When managing capital and net
debt, management’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits
for other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the entity.
Accounting Policy
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are included in equity as a
deduction, net of tax, from the proceeds.
EQUITY — NOTE 19: RESERVES
Reconciliation of carrying amounts at beginning and end of period:
2020
Carrying amount at beginning of period
Exchange differences on translation of foreign operations
Cost of share based payments
Transfer to retained earnings
Carrying amount at end of period
2019
Carrying amount at beginning of period
Exchange differences on translation of foreign operations
Transfer to statement of comprehensive income from sale or closure of controlled entity
Cost of share based payments
Transfer to retained earnings
Recognition of put options
Carrying amount at end of period
Business
combination
reserve
Employee
equity
benefits
reserve
Foreign
currency
translation
reserve
Total
$000
$000
$000
$000
(27,495)
-
-
-
(27,495)
5,009
-
1,945
(1,643)
5,311
(4,744)
(742)
-
-
(5,486)
(27,230)
(742)
1,945
(1,643)
(27,670)
(25,945)
5,806
(5,895)
(26,034)
-
-
-
-
(1,550)
(27,495)
-
-
1,812
(2,609)
-
5,009
(108)
1,259
-
-
-
(108)
1,259
1,812
(2,609)
(1,550)
(4,744)
(27,230)
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 149
EQUITY — NOTE 19: RESERVES
Nature and purpose of reserves
(i) Business combination reserve
The reserve is used to record the differences between the carrying value of non-controlling interests and the consideration paid/received,
where there has been a transaction involving non-controlling interests that do not result in a loss of control.
Under agreements entered into with a number of non-controlling interests, the non-controlling shareholders have put options over their interests.
These options are exercisable in accordance with the terms of each agreement. The potential liability for Elders under the put options is based on
expectations of the exercise price and timing, discounted to present value using Elders’ incremental borrowing rate. The recognition of the put options
is reflected in the business combination reserve and as a financial liability within current liabilities.
(ii) Employee equity benefits reserve
This reserve is used to record the value of equity benefits provided to employees, including key management personnel as part of their remuneration.
(iii) Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign
subsidiaries, including exchange differences arising from loans which are deemed to be net investments in a foreign operation.
Accounting Policy
The results of subsidiaries incorporated in countries other than Australia, are translated into Australian Dollars (presentation currency) as at the
date of each transaction. Assets and liabilities are translated at exchange rates prevailing at reporting date. Exchange variations resulting from
the translation are recognised in the foreign currency translation reserve in equity.
On consolidation, exchange differences arising from the translation of net investments in overseas subsidiaries are taken to the foreign currency
translation reserve. If such a subsidiary was disposed of, the proportionate share of exchange differences would be transferred out of equity and
recognised in profit or loss.
EQUITY — NOTE 20: RETAINED EARNINGS
Retained earnings at the beginning of the financial year
Net profit attributable to owners of the parent
Dividends paid
Transfer from employee equity benefits reserve
Reallocation of equity
Retained earnings at the end of the financial year
2020
$000
2019
$000
(1,043,490)
(1,094,027)
122,947
68,935
(25,194)
(19,267)
1,643
(2,796)
2,609
(1,740)
(946,890)
(1,043,490)
EQUITY — NOTE 21: DIVIDENDS
On 13 December 2019, Elders paid a fully franked final dividend of 9 cents per share. This distribution totalled $14.0 million (2018: $10.5 million).
The cash outflow was $12.0 million, with the difference reinvested by shareholders.
On 19 June 2020, Elders paid a fully franked interim dividend of 9 cents per share. This distribution totalled $14.0 million (2019: $10.5 million).
The cash outflow was $13.2 million, with the difference reinvested by shareholders.
Subsidiary equity dividends on ordinary shares:
Dividends paid to non-controlling interests during the year
2,240
2,341
Franking credits available to the parent for subsequent financial years based on tax rate of 30% (2019: 30%)
12,800
15,500
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 150
GROUP STRUCTURE — NOTE 22: INVESTMENTS IN CONTROLLED ENTITIES
(a) Schedule of controlled entities
Ace Ohlsson Pty Limited
Agsure Pty Ltd
AI Asia Pacific Operations Holding Limited
Air International Asia Pacific Operations Pty Ltd
AIRR Apparent Pty Ltd
AIRR Belmark Pty Ltd
AIRR Holdings Limited
AIRR iO Pty Ltd
APO Administration Limited
APT Projects Pty Ltd
Aqa Oysters Pty Ltd
Argo Trust No. 2
Ashwick (Vic) No 102 Pty Ltd
Australian Independent Rural Retailers Pty Ltd
B & W Rural Pty Ltd
BWK Holdings Pty Ltd
Chemseed Australia Pty Ltd
Eastern Rural Pty Ltd
Elders Automotive Group Pty Ltd
Elders Burnett Moore WA Pty Ltd
Elders China Trading Company
Elders Communications Pty Ltd
Elders Finance Pty Ltd
Elders Fine Foods (Shanghai) Company
Elders Fine Foods Vietnam Company Limited
Elders Forestry Finance Pty Ltd
Elders Forestry Management Pty Ltd
Elders Forestry Pty Ltd
Elders Global Wool Holdings Pty Ltd
Elders Home Loans Pty Ltd
Elders Management Services Pty Ltd
Elders PT Indonesia
Elders Real Estate (Tasmania) Pty Ltd
Elders Real Estate (WA) Pty Ltd
Elders Rural Services Australia Limited
Elders Rural Services Limited
Elders Telecommunications Infrastructure Pty Ltd
Family Hospitals Pty Ltd
Fares Exports Pty Ltd
ITC Timberlands Pty Ltd
JS Brooksbank & Co Australasia Ltd
JSB New Zealand Limited
Keratin Holdings Pty Ltd
Killara Feedlot Pty Ltd
Manor Hill Pty Ltd
New Ashwick Pty Ltd
Northern Rural Supplies Pty Ltd
Prels Pty Ltd
Prestige Property Holdings Pty Ltd
Primac Exports Pty Ltd
Primac Pty Ltd
Country of
Incorporation
Australia
Australia
Hong Kong SAR
Australia
Australia
Australia
Australia
Australia
Hong Kong SAR
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
China
Australia
Australia
China
Vietnam
Australia
Australia
Australia
Australia
Australia
Australia
Indonesia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
(a)
(a)
(e)
(a) (b) (c)
(a) (b) (c)
(a) (b) (c)
(a) (b) (c)
(d)
(e)
(e)
(f)
(e)
(a) (b) (c)
(e)
(e)
(c) (e)
(e)
(e)
(e)
(a)
(e)
(e)
(e)
(e)
(e)
(e)
(e)
(e)
(a)
(e)
(e)
(g)
(e)
(e)
(a)
(e)
(e)
(c) (e)
(c) (e)
(e)
(e)
(e)
% Held by Group
2020
2019
100
100
100
100
100
100
100
100
100
100
77
100
100
100
75.5
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
-
-
100
100
77
100
100
-
75.5
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
100
100
100
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 151
GROUP STRUCTURE — NOTE 22: INVESTMENTS IN CONTROLLED ENTITIES
PT Agri Integrasi Mandiri
Redray Enterprises Pty Ltd
SDEA Nominees Pty Ltd
The Hunter River Company Pty Ltd
Titan Ag Pty Ltd
Ultrasound Australia Pty Ltd
Victorian Producers Co-operative Company Pty Ltd
YP Agricultural Services Pty Ltd (Formerly Elders Victorian Feedlot Pty Ltd)
Country of
Incorporation
Indonesia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
(e)
(a)
(a) (b) (c)
(a)
(a)
(e)
(e)
% Held by Group
2020
2019
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
⋅ The parties that comprise the Closed Group are denoted by (a). Parties added to the closed group by assumption deed dated 28 July 2020
are denoted by (b)
⋅ Entities acquired or registered during the period are denoted by (c)
⋅ Entities exempted from audit requirements due to overseas legislation or non-corporate status are denoted by (d)
⋅ Entities classified by the Corporations Act as small proprietary companies relieved from audit requirements are denoted by (e)
⋅ The entity denoted by (f) is a controlled special purpose entity related to trade receivable financing program
⋅ Entities denoted by (g) were disposed of, deregistered or liquidated during the year
Accounting Policy
The results of subsidiaries incorporated in countries other than Australia, are translated into Australian Dollars (presentation currency) as at the
date of each transaction. Assets and liabilities are translated at exchange rates prevailing at reporting date. Exchange variations resulting from
the translation are recognised in the foreign currency translation reserve in equity.
(b) Deed of Cross Guarantee
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 dated 29 September 2016, relief has been granted to these
controlled entities of Elders Limited from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports, and
Directors’ reports. As a condition of the Class Order, Elders Limited, and the controlled entities subject to the Class Order, entered into a Deed of
Cross Guarantee. The effect of the deed is that Elders Limited has guaranteed to pay any deficiency in the event of the winding up of any member
of the Closed Group, and each member of the Closed Group has given a guarantee to pay any deficiency, in the event that Elders Limited or any other
member of the Closed Group is wound up.
AIRR Holdings Limited has become party to the deed of cross guarantee, has joined the closed group and has been granted relief similar to that
afforded by ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 after obtaining ASIC approval under s340 of the Corporations
Act 2001. Prior to acquisition AIRR Holdings Limited was an unlisted public company with more than 100 shareholders, meaning it was otherwise
ineligible to rely on ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 because it was a disclosing entity for part of the financial
year.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 152
GROUP STRUCTURE — NOTE 22: INVESTMENTS IN CONTROLLED ENTITIES
Certain members of the Closed Group, in addition to certain controlled entities, are guarantors in connection with the consolidated entity’s borrowings
facilities disclosed at note 16. A consolidated statement of comprehensive income and consolidated statement of financial position, comprising Elders
Limited and the controlled entities which are a party to the deed, after elimination of all transactions between parties to the Deed of Cross Guarantee,
for the year ended 30 September 2020 is set out as follows:
Consolidated statement of comprehensive income of the Closed Group
Sales revenue
Cost of sales
Gross profit
Other revenue
Distribution expenses
Administrative expenses
Other items of income/(expense)
Finance costs
Profit/(loss) before income tax benefit/(expense)
Income tax benefit/(expense)
Profit/(loss) after income tax benefit/(expense)
Consolidated statement of financial position of the Closed Group
Current assets
Cash and cash equivalents
Trade and other receivables
Livestock
Inventory
Total current assets
Non current assets
Other financial assets
Property, plant and equipment
Right-of-use assets
Intangibles
Deferred tax assets
Total non current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Current tax payable
Provisions
Total current liabilities
Non current liabilities
Interest bearing loans and borrowings
Lease liabilities
Total non current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
2020
$000
2019
$000
837,803
247,374
(745,167)
(211,463)
92,636
15,000
35,911
25,000
(19,498)
(17,670)
(100,484)
(38,778)
114,036
(2,445)
99,245
15,068
114,313
10,786
102,520
44,929
78,230
236,465
293,111
18,098
13,181
132,936
113,500
570,826
807,291
78,383
(2,275)
80,571
16,028
96,599
6,399
17,719
36,320
11,215
71,653
318,784
11,360
-
1,301
97,621
429,066
500,719
89,133
6,354
3,349
790
6,608
99,880
25,000
10,085
35,085
134,965
672,326
-
-
1,482
7,836
-
-
-
7,836
492,883
1,645,561
1,562,377
5,312
5,009
(978,547)
(1,074,503)
672,326
492,883
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 GROUP STRUCTURE — NOTE 23: PARENT EQUITY
Information relating to the parent entity of the Group, Elders Limited:
Results:
Net profit for the period after income tax expense
Total comprehensive income
Financial position:
Current assets
Non current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Retained earnings
Profit reserve
Employee equity reserve
Total equity
153
2019
$000
67,986
67,986
546
493,403
493,949
1,066
1,066
2020
$000
122,305
122,305
221
674,742
674,963
2,637
2,637
672,326
492,883
1,645,561
1,562,377
(1,006,801)
(1,115,749)
28,254
5,312
41,246
5,009
672,326
492,883
Guarantees
As disclosed in note 22, the parent entity has entered into a Deed of Cross Guarantee with certain controlled entities. The effect of this Deed is that
Elders Limited and each of these controlled entities has guaranteed to pay any deficiency of any of the companies party to the Deed in the event of
any of those companies being wound up.
The parent entity is a party to various guarantees and indemnities pursuant to bank facilities and operating lease facilities extended to the Group
as disclosed in notes 25 and 26.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 154
GROUP STRUCTURE — NOTE 24: BUSINESS COMBINATIONS – CHANGES IN THE COMPOSITION OF THE ENTITY
(a) Acquisitions
(i) Current period acquisitions
Acquisition of AIRR Holdings Limited
On 13 November 2019, Elders acquired AIRR Holdings Limited, a wholesale business based in Shepparton, Victoria, supported by a network of eight
warehouses to supply independent retail stores throughout Australia.
Other acquisitions during the period
During the current period, Elders acquired a number of small retail and agency businesses for a total consideration of $18.3 million, including
$6.5 million of deferred consideration. These transactions resulted in the recognition of $12.6 million of goodwill.
Details of the purchase consideration, net assets acquired and goodwill are:
Purchase consideration
Cash paid
Deferred consideration
Shares issued (13,050,001 shares at $6.16)
Cash advance for repayment of debt facility
Total purchase consideration
The assets and liabilities recognised as a result of acquisitions are:
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Rent roll
Brand name
Customer intangibles
Other intangibles
Trade and other payables
Provisions
Deferred tax asset/(liability)
Net identifiable assets acquired
Goodwill on acquisition
AIRR Holdings
Limited
Other
acquisitions
$000
$000
75,037
-
80,388
155,425
21,689
177,114
25
59,631
47,726
2,195
-
7,631
47,621
142
(44,441)
(1,646)
(16,111)
102,773
11,807
6,446
-
18,253
-
18,253
2,076
4,597
2,834
783
278
171
-
-
(4,610)
(543)
33
5,619
Total
$000
86,844
6,446
80,388
173,678
21,689
195,367
2,101
64,228
50,560
2,978
278
7,802
47,621
142
(49,051)
(2,189)
(16,078)
108,392
74,341
177,114
12,634
18,253
86,975
195,367
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 155
GROUP STRUCTURE — NOTE 24: BUSINESS COMBINATIONS – CHANGES IN THE COMPOSITION OF THE ENTITY
AIRR Holdings Limited
The goodwill is attributable to the value inherent in AIRR Holdings Limited’s geographical footprint and national distribution channel, the workforce of
the business and synergies arising from the acquisition which are specific to Elders. Goodwill has been allocated to the Wholesale Products segment.
None of the goodwill is expected to be deductible for tax purposes.
The fair value of trade and other receivables is $59.6 million and includes trade receivables with a fair value of $58.4 million. The gross contractual
amount for trade receivables due is $59.0 million, of which $0.6 million is expected to be uncollectible.
The results of the acquired business, referred to as Wholesale Products, for the period from date of acquisition to 30 September 2020 are detailed
in note 1.
Payments for acquisitions through business combinations, net of cash acquired
The cash outflow for payments for acquisitions through business combinations, net of cash acquired of $111.9 million represents cash paid in respect
of AIRR Holdings Limited and other businesses acquired during the period of $108.5 million and repayment of deferred consideration relating to
acquisitions from prior periods of $3.4 million.
At 30 September 2020, Elders has $20.5 million of deferred consideration amounts related to acquisitions which are included in current and non
current other creditors and accruals in note 9.
(ii) Prior period acquisitions
In the prior period, Elders acquired a number of small retail and agency businesses for a total consideration of $14.3 million, including $6.9 million
of deferred consideration. These transactions resulted in the recognition of $12.3 million of goodwill and associated brand names.
(b) Disposals
(i) Current period disposals
There were no disposals during the period.
(ii) Prior period disposals
In the prior period, Elders disposed of the Indonesian Feedlot and Abattoir assets and the Elders Services Company. Proceeds from disposals were
equal to the carrying amounts of assets held.
Accounting Policy
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the
consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each
business combination, Elders elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate
share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and included in administrative expenses.
When Elders acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation
in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value
and any resulting gain or loss is recognised in profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to
the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with AASB 9 either
in profit or loss or as a charge to other comprehensive income. If the contingent consideration is classified as equity, it shall not be remeasured
until it is finally settled within equity. In instances where the contingent consideration does not fall within the scope of AASB 9, it is measured
in accordance with the appropriate AASB standard.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 156
OTHER INFORMATION — NOTE 25: EXPENDITURE COMMITMENTS
Operating lease commitments – Elders as a lessee
As a result of the application of AASB 16 on 1 October 2019, Elders expenditure commitments relating to leases have been recognised as lease
liabilities, with an associated right-of-use asset and are presented in note 11 for the year ended 30 September 2020, except for low value leases.
Elders operating lease commitments for low value leases are presented below.
Operating lease commitments:
⋅ Within one year
⋅ After one year but not later than five years
⋅ After more than five years
Total minimum lease payments
2020
$000
948
865
-
1,813
2019
$000
27,042
36,136
2,443
65,621
OTHER INFORMATION — NOTE 26: CONTINGENT LIABILITIES
There are potential legal matters that occur in the ordinary course of business that are being considered by Elders’ legal advisors.
Based on the current information available, the following applies:
Unquantifiable contingent liabilities
⋅ Elders has contingent obligations in respect of real property let or sub-let by subsidiaries of Elders.
⋅ Elders has contingent obligations in respect of real property sub-let to the purchaser of Elders’ former Sandalwood estate.
⋅ Elders has contingent obligations in respect of an agency agreement which carries a minimum fulfillment clause.
This agreement expires December 2022.
⋅ Benefits are payable under service agreements with employees of Elders under certain circumstances such as achievement of prescribed
performance hurdles, occurrence of certain events or termination of employment for reasons other than serious misconduct.
⋅ Subsidiaries of Elders have, from time to time in the ordinary course, provided parent company guarantees in respect of certain contractual
obligations of their subsidiaries. The contingent exposure under those guarantees on a consolidated basis is no greater than the exposure of the
subsidiary having the principal contractual obligation.
⋅ Subsidiaries of Elders have from time to time provided warranties and indemnities in connection with the disposal of assets. The Directors are not
aware at the present time of any material exposures under the warranties of indemnities.
⋅ Various legal claims for damages resulting from the use of products or services of Elders, and from the contracts entered into or alleged to have
been entered into by Elders, are in existence for which no provision has been raised as it is not currently probable that these claims will succeed or it
is not practical to estimate the potential effect of these claims. The Directors are of the view that none of these claims based on the net exposure is
likely to be material.
⋅ As announced to the Australian Securities Exchange on 14 May 2018, Elders has been informed by its subsidiary, PT Elders Indonesia (PTEI), that
the regional police in Bengkulu were investigating allegations of corruption in respect of the licensing body in Indonesia which was responsible for
issuing licences to a small palm oil planation previously operated by PTEI. Elders does not know if that investigation is proceeding. This matter has
been reported by Elders to both the Komisi Pemberantasan Korupsi in Indonesia (which appears to have advised the matter does not fall within
its terms of reference) and the Australian Federal Police in Australia (which is evaluating the matter). Elders currently considers that this matter is
unlikely to have a material impact on Elders.
Other guarantees
As disclosed in note 22, the parent entity has entered into a Deed of Cross Guarantee with certain controlled entities. The effect of this Deed is that
Elders Limited and each of these controlled entities has guaranteed to pay any deficiency of any of the companies party to the Deed in the event of any
of those companies being wound up.
The parent entity and certain subsidiaries of Elders are parties to various guarantees and indemnities pursuant to bank facilities and operating lease
facilities extended to Elders.
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 157
OTHER INFORMATION — NOTE 27: RELATED PARTY DISCLOSURES
The ultimate controlling entity of the Group is Elders Limited.
From time to time, Directors of Elders, or third parties of which a Director of Elders is also a Director, engage in transactions with Elders or entities in
which Elders has an investment. These transactions are immaterial and generally in the nature of the acquisition of goods or services from Elders or
an entity in which Elders has an investment or the supply of services to Elders or an entity in which Elders has an investment. Such transactions are on
arm’s length commercial terms and procedures are in place to manage any actual or potential conflicts of interest.
As part of sharing office space with branches within the Branch Network segment, Elders incurred costs on behalf of Elders Insurance (Underwriting
Agency) Pty Ltd and recharged these at arm’s length.
During the year, Elders received a net repayment of $9.0 million on its advance to StockCo Holdings Pty Ltd (2019: loan of $15.0 million). Elders
advances to StockCo Holdings Pty Ltd are made out on a 12 month term rolling basis with an effective interest rate of 15% per annum. As at balance
date, Elders has a total receivable from StockCo Holdings Pty Ltd of $20.2 million (2019: $31.9 million) and recognised interest revenue of $4.2
million (2019: $2.8 million) during the period. Elders also received trail and exclusivity fees of $2.3 million (2019: $2.5 million).
As part of the acquisition of AIRR Holdings Limited, Elders assumed property lease contracts and made lease payments (comprising principal and
interest) totalling $2.1 million to related entities of the Managing Director of AIRR Holdings Limited during the period from 13 November 2019 to 30
September 2020. As at balance date, there is a right-of-use asset of $9.6 million and lease liability of $9.6 million associated with these property lease
contracts. Such transactions are on arm’s length commercial terms and procedures are in place to manage any actual or potential conflicts of interest.
OTHER INFORMATION — NOTE 28: SHARE BASED PAYMENT PLANS
Long-Term Incentive Performance Rights
Performance rights were granted to eligible executives with a three year performance period and split into three tranches. Each tranche carries a
different performance condition being Absolute TSR, EPS Growth and Return on Capital. Upon vesting of performance rights one fully paid share in
Elders will be allocated for each performance right.
Set out below are a summary of rights granted under the plans:
CEO Plan
Executive Plan
CEO Plan
Executive Plan
CEO Plan
Executive Plan
CEO Plan
Executive Plan
Grant date
Vesting date
Balance at
start of period
Granted
Vested
Lapsed
Balance at
end of period
16-Dec-16
17-Feb-17
14-Dec-17
16-Feb-18
13-Dec-18
15-Feb-19
12-Dec-19
21-Feb-20
Nov-19
Nov-19
Nov-20
Nov-20
Nov-21
Nov-21
Nov-22
Nov-22
210,000
416,250
200,000
430,000
146,000
306,000
-
-
1,708,250
-
-
-
-
-
-
166,000
421,000
587,000
210,000
416,250
-
-
-
-
-
-
-
-
50,000
115,000
-
30,000
-
41,000
-
-
150,000
315,000
146,000
276,000
166,000
380,000
626,250
236,000
1,433,000
Current year vested rights and future years’ Absolute TSR tranche one rights are considered dilutive.
During the period, long-term incentive performance rights expense of $1,945,615 (2019: $1,811,676) was recognised.
For long-term incentive performance rights vesting in November 2020, additional shares of 25,732 (November 2019: 41,942) will be allocated under
the CEO and Executive plans at the time of vesting for the value of dividends forgone on the vested rights during the performance period.
The fair value at grant date of the long-term incentive performance rights issued during the year was:
Absolute TSR
EPS Growth
Return on Capital
CEO Plan
Executive Plan
2020
$4.47
$5.09
$5.09
2019
$4.92
$5.95
$5.95
2020
$6.76
$7.41
$7.41
2019
$3.23
$4.33
$4.33
In calculating the fair value of the long-term incentive performance rights issued the share price at valuation date was $6.34 for the CEO plan
and $8.14 for the Executive plan (2019: $6.99 for the CEO plan and $5.79 for the Executive plan).
The weighted average remaining life of the long-term incentive performance rights outstanding at the end of the financial year was 1.2 years.
(2019: 1.0 year).
Performance rights associated with the 2017 Long-Term Incentive Plan vested during the period. As a result, a total of 626,250 shares were
issued to relevant participants.
Elders Ltd Annual Financial ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 158
OTHER INFORMATION — NOTE 29: AUDITORS REMUNERATION
Amounts received or due and receivable by the auditor PricewaterhouseCoopers for:
⋅ auditing or review of financial statements
⋅ other compliance and assurance services
⋅ other non-audit services
2020
$
2019
$
774,000
540,000
32,000
19,500
8,000
29,566
825,500
577,566
OTHER INFORMATION — NOTE 30: KEY MANAGEMENT PERSONNEL
Remuneration of Directors and other Key Management Personnel
For information on the Remuneration Policy, Structure and the relationship between remuneration payment and performance please refer to the
Remuneration Report.
Short-Term
Long-Term
Post employment
Termination benefits
Share based payments
4,765,598
3,304,831
140,909
152,401
249,419
138,017
162,487
-
917,165
1,168,820
6,225,492
4,774,155
OTHER INFORMATION — NOTE 31: SUBSEQUENT EVENTS
There are no matters or circumstances that have arisen since 30 September 2020 which are not otherwise dealt with in this report or in the
consolidated financial statements, that have significantly affected or may significantly affect the operations of Elders, the results of those operations
or the state of affairs of Elders in subsequent financial periods.
Elders2020 Annual ReportNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September 2020 Directors' Declaration
159
Directors’
Declaration
In accordance with a resolution of the Directors of Elders Limited, the Directors declare:
1. In the opinion of the Directors:
(a) the financial statements and notes of Elders Limited for the financial year ended 30 September 2020
are in accordance with the Corporations Act 2001, including:
(i) Giving a true and fair view of its financial position as at 30 September 2020 and of its performance
for the year ended on that date; and
(ii) Complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001
(b) the financial statements and notes also comply with International Financial Reporting Standards
as disclosed in the basis of preparation
(c) there are reasonable grounds to believe that the Company 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 the Directors
in accordance with section 295A of the Corporations Act 2001 for the year ended 30 September 2020.
3. In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe
that the members of the Closed Group identified in note 22 will be able to meet any obligations or
liabilities to which they are or may become subject, by virtue of the deed of cross guarantee.
On behalf of the Board,
Ian Wilton
Chair
Adelaide
16 November 2020
Mark C Allison
Managing Director and CEO
160
Auditor’s Independence Declaration
As lead auditor for the audit of Elders Limited for the year ended 30 September 2020, I declare that to
the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Elders Limited and the entities it controlled during the period.
Andrew Forman
Partner
PricewaterhouseCoopers
Adelaide
16 November 2020
PricewaterhouseCoopers, ABN 52 780 433 757
Level 11, 70 Franklin Street, ADELAIDE SA 5000, GPO Box 418, ADELAIDE SA 5001
T: +61 8 8218 7000, F: +61 8 8218 7999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Elders2020 Annual Report
Auditor’s Independence Declaration
As lead auditor for the audit of Elders Limited for the year ended 30 September 2020, I declare that to
the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Elders Limited and the entities it controlled during the period.
Andrew Forman
Partner
PricewaterhouseCoopers
Adelaide
16 November 2020
Directors' Declaration
161
Independent auditor’s report
To the members of Elders Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Elders Limited (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 30 September 2020 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
•
•
•
•
•
•
the consolidated statement of financial position as at 30 September 2020
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include significant accounting policies
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
Level 11, 70 Franklin Street, ADELAIDE SA 5000, GPO Box 418, ADELAIDE SA 5001
T: +61 8 8218 7000, F: +61 8 8218 7999, www.pwc.com.au
PricewaterhouseCoopers, ABN 52 780 433 757
Level 11, 70 Franklin Street, ADELAIDE SA 5000, GPO Box 418, ADELAIDE SA 5001
T: +61 8 8218 7000, F: +61 8 8218 7999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Liability limited by a scheme approved under Professional Standards Legislation.
162
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Elders operates branches throughout Australia and works with primary producers to provide:
• Rural products: Rural farm inputs from branch and wholesale networks including seeds,
fertilisers, agricultural chemicals, animal health products and general rural merchandise.
• Agency services: A range of marketing options for livestock, wool and grain.
• Real estate services: Agency services primarily involved in the marketing of farms, stations and
lifestyle estates and includes a network of residential real estate agencies providing agency and
property management services.
• Financial services: Elders distributes a wide range of banking and insurance products and
services.
Elders provides feed and processing services in Australia and operates the Killara feedlot, which is a
beef cattle feedlot near Tamworth in New South Wales. Elders has a business in China which imports,
processes and distributes premium Australian meat in China.
Materiality
•
For the purpose of our audit we used overall Group materiality of $5.3 million, which represents
approximately 5% of the Group’s profit before tax excluding acquisition related expenses.
• We applied this threshold, together with qualitative considerations, to determine the scope of our audit and
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the
financial report as a whole.
• We chose Group profit before tax because, in our view, it is the benchmark against which the performance of
the Group is most commonly measured. We adjusted the Group's profit before tax for acquisition related
expenses as they are unusual or infrequently occurring items which are not expected to recur from year to
year or otherwise significantly affect the underlying trend of performance of the Group.
• We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly
acceptable thresholds.
Elders2020 Annual Report
Directors' Declaration
163
Our audit approach
Audit Scope
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Elders operates branches throughout Australia and works with primary producers to provide:
• Rural products: Rural farm inputs from branch and wholesale networks including seeds,
fertilisers, agricultural chemicals, animal health products and general rural merchandise.
• Agency services: A range of marketing options for livestock, wool and grain.
• Real estate services: Agency services primarily involved in the marketing of farms, stations and
lifestyle estates and includes a network of residential real estate agencies providing agency and
• Financial services: Elders distributes a wide range of banking and insurance products and
property management services.
services.
Elders provides feed and processing services in Australia and operates the Killara feedlot, which is a
beef cattle feedlot near Tamworth in New South Wales. Elders has a business in China which imports,
processes and distributes premium Australian meat in China.
Materiality
•
For the purpose of our audit we used overall Group materiality of $5.3 million, which represents
approximately 5% of the Group’s profit before tax excluding acquisition related expenses.
• We applied this threshold, together with qualitative considerations, to determine the scope of our audit and
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the
financial report as a whole.
• We chose Group profit before tax because, in our view, it is the benchmark against which the performance of
the Group is most commonly measured. We adjusted the Group's profit before tax for acquisition related
expenses as they are unusual or infrequently occurring items which are not expected to recur from year to
year or otherwise significantly affect the underlying trend of performance of the Group.
• We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly
acceptable thresholds.
• Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
• Our audit work focused on the Australian operations’ financial information given their financial significance
to the Group.
• We performed further audit procedures at a Group level, including procedures over the consolidation of the
Group’s businesses and the preparation of the financial and remuneration reports.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Board, Audit, Risk and Compliance Committee.
Key audit matter
How our audit addressed the key audit matter
Business combinations - Australian
Independent Rural Retailers
(‘AIRR’)
(Refer to note 24)
On 13 November 2019, Elders acquired
100% of the shares of AIRR for $177.1
million. The consideration included $75.0
million in cash, $80.4 million in Elders
Limited shares and a $21.7 million cash
advance for repayment of AIRR’s debt
facility, as described in note 24 of the
financial report.
The accounting for the acquisition was a
key audit matter because it was a
significant transaction for the year given
the financial and operational impacts on
the Group. In addition, the Group made
complex judgements when accounting for
the acquisition in identifying all assets and
liabilities of the newly acquired business
and estimating the fair value of each asset
and liability for initial recognition by the
Group, particularly brand names and
customer intangible assets.
Assisted by PwC valuation experts in aspects of our work, our
procedures included the following, amongst others:
● Evaluated the Group’s accounting against the
requirements of Australian Accounting Standards, key
transaction agreements, our understanding of the business
acquired and its industry and selected minutes of Elders
Limited board of directors meetings.
● Checked the consideration to bank statements and to the
market value of shares issued.
● Assessed the fair values of the acquired assets and
liabilities recognised, including:
○
○
○
○
considered the key assumptions used in the
valuation models (the models) that estimated fair
value in light of historical performance and
industry forecasts;
considered the discount rate assumptions used in
the models in light of other market participants’
average cost of capital;
considered the valuation methodology in the
models in light of the requirements of Australian
Accounting Standards; and
assessed the competence and capability of those
involved in estimating fair values.
● Evaluated the adequacy of the disclosures made in light of
the requirements of Australian Accounting Standards.
164
Key audit matter
How our audit addressed the key audit matter
Recoverability of deferred tax assets
(Refer to note 4)
Elders disclosed unused tax losses of $42.7
million available for use in future periods.
Elders recognised net deferred tax assets of
$103.8 million at 30 September 2020 in
the consolidated statement of financial
position, of which $116.1 million arises
from tax losses carried forward.
Australian Accounting Standards require
deferred tax assets to be recognised only to
the extent that it is probable that sufficient
future taxable profits will be generated in
order for the benefits of the deferred tax
assets to be realised. These benefits are
realised by reducing tax payable on future
taxable profits.
This was a key audit matter due to the
quantum of the accumulated losses
available as well as the judgement involved
by the Group in preparing forecasts to
demonstrate the future utilisation of these
losses.
Accounting for rebates
(Refer to note 8)
Elders receives rebates in connection with
the purchase of retail goods for resale from
suppliers. These rebates are varied in
nature and include price and volume
rebates.
Elders recognises rebates as a reduction to
the cost of purchased inventory and a
reduction in cost of sales when the
inventory is sold.
In accordance with Australian Accounting
Standards, rebates should only be
recognised as a reduction in cost of sales
when the associated performance
conditions have been met. This requires a
We performed the following procedures, amongst others:
• Assessed the forecast profits over the relevant utilisation
period and evaluated whether the forecasts were consistent
with Board approved budgets and had been appropriately
adjusted for the differences between accounting and
taxable profits.
• With assistance from PwC tax specialists, examined the
ability to carry forward the tax losses for future use and
considered the appropriateness of the deductions in the
forecasts.
•
Tested the mathematical accuracy of the forecasts.
• Reperformed the reconciliation of tax losses recognised
and utilised in the current year, as detailed in note 4.
• Recalculated deferred tax asset balances which comprise
temporary differences between tax and accounting values
and tax losses.
• Evaluated the adequacy of the disclosures made in light of
the requirements of Australian Accounting Standards.
We performed the following procedures, amongst others:
•
For a sample of rebates recognised as a reduction to cost of
sales, we:
o
agreed terms and conditions to supplier credit
notes or individual supplier agreements and
recalculated the amount of the rebate; and
o
checked if the rebate amount was only recognised
as a reduction in cost of sales when a sale of the
relevant product had occurred.
•
For a sample of rebates receivable at balance date, we:
o
agreed the Group’s calculation of the rebate
receivable to the terms in the relevant supplier
agreement; and
o
agreed the key components of rebates receivable,
including rebate accruals and amounts received
Elders2020 Annual Report
Directors' Declaration
165
Key audit matter
How our audit addressed the key audit matter
Key audit matter
How our audit addressed the key audit matter
Recoverability of deferred tax assets
We performed the following procedures, amongst others:
(Refer to note 4)
Elders disclosed unused tax losses of $42.7
period and evaluated whether the forecasts were consistent
million available for use in future periods.
with Board approved budgets and had been appropriately
• Assessed the forecast profits over the relevant utilisation
adjusted for the differences between accounting and
Elders recognised net deferred tax assets of
taxable profits.
• With assistance from PwC tax specialists, examined the
ability to carry forward the tax losses for future use and
considered the appropriateness of the deductions in the
forecasts.
$103.8 million at 30 September 2020 in
the consolidated statement of financial
position, of which $116.1 million arises
from tax losses carried forward.
Australian Accounting Standards require
the extent that it is probable that sufficient
order for the benefits of the deferred tax
assets to be realised. These benefits are
deferred tax assets to be recognised only to
•
Tested the mathematical accuracy of the forecasts.
future taxable profits will be generated in
• Reperformed the reconciliation of tax losses recognised
and utilised in the current year, as detailed in note 4.
realised by reducing tax payable on future
• Recalculated deferred tax asset balances which comprise
taxable profits.
temporary differences between tax and accounting values
and tax losses.
available as well as the judgement involved
the requirements of Australian Accounting Standards.
• Evaluated the adequacy of the disclosures made in light of
This was a key audit matter due to the
quantum of the accumulated losses
by the Group in preparing forecasts to
demonstrate the future utilisation of these
losses.
Accounting for rebates
We performed the following procedures, amongst others:
(Refer to note 8)
•
For a sample of rebates recognised as a reduction to cost of
Elders receives rebates in connection with
sales, we:
the purchase of retail goods for resale from
suppliers. These rebates are varied in
nature and include price and volume
rebates.
Elders recognises rebates as a reduction to
the cost of purchased inventory and a
reduction in cost of sales when the
In accordance with Australian Accounting
Standards, rebates should only be
recognised as a reduction in cost of sales
when the associated performance
conditions have been met. This requires a
o
o
o
o
agreed terms and conditions to supplier credit
notes or individual supplier agreements and
recalculated the amount of the rebate; and
checked if the rebate amount was only recognised
as a reduction in cost of sales when a sale of the
relevant product had occurred.
agreed the Group’s calculation of the rebate
receivable to the terms in the relevant supplier
agreement; and
agreed the key components of rebates receivable,
including rebate accruals and amounts received
inventory is sold.
•
For a sample of rebates receivable at balance date, we:
detailed understanding by the Group of the
various contractual arrangements.
o
over the course of the year, to relevant underlying
evidence.
We considered rebates to be a key audit
matter because:
•
To assess the completeness of rebates being recorded
against inventory on hand at balance date we:
•
•
•
Supplier rebates recognised
during the year are financially
significant;
Supplier arrangements are
complex in nature and vary
between suppliers; and
Judgement is involved by the
Group to determine the amount
of rebates that should be
recognised in the consolidated
statement of comprehensive
income and the amount that
should be deferred to inventory.
o
o
obtained a listing of retail stock on hand at
balance date and for a sample of stock items,
traced the rebate percentage back to supplier
agreements and recalculated the rebate amount
offset against inventory; and
checked for a sample of rebates receivable, that
when the related inventory was still on hand at
balance date, the rebate amount had been
appropriately deducted from inventory.
• Evaluated the adequacy of the disclosures made in light of
the requirements of Australian Accounting Standards.
Lease accounting and adoption of
new accounting standard AASB 16 –
Leases
(refer note 11)
Elders has adopted Australian Accounting
Standard AASB 16 Leases (‘AASB 16’) on 1
October 2019. The new policy and its
transition impact are disclosed in the
financial statements within the “About this
report” section and note 11.
This is considered a key audit matter due
to:
•
•
The financial significance of the
impact on transition to the
financial report; and
The judgement involved by the
Group when applying AASB 16
requirements to determine
whether lease extension options
are reasonably certain to be
extended.
We performed the following procedures, amongst others:
• Assessed whether the Group’s new accounting policies are
in accordance with the requirements of AASB 16.
• Evaluated the methodology adopted by the Group to
identify lease arrangements.
• Evaluated the adequacy of the disclosures made in light of
the requirements of Australian Accounting Standards.
For a sample of lease agreements, we:
• Evaluated the lease calculation against the terms of the
relevant lease agreement and the requirements of
Australian Accounting Standards.
•
Tested the mathematical accuracy of the lease calculations.
• Assessed the incremental borrowing rates applied to the
lease calculations.
• Assessed the reasonableness of management’s assessment
as to whether lease terms are reasonably certain to be
extended.
166
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 September 2020, but does not include
the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor's report.
Elders2020 Annual Report
Directors' Declaration
167
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 88 to 107 of the directors’ report for the
year ended 30 September 2020.
In our opinion, the remuneration report of Elders Limited for the year ended 30 September 2020
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Andrew Forman
Partner
Adelaide
16 November 2020
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 September 2020, but does not include
the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor's report.
168
ASX
Additional
Information
a) Distribution of Ordinary Shares as at 1 November 2020
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
The number of holders holding less than a marketable parcel
Distribution of Unvested Performance Rights as at 1 November 2020
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
Total Units
Percentage FPO
Holders
2,922,318
9,636,676
5,376,050
17,419,022
120,399,659
155,753,725
1.880%
6.190%
3.450%
11.180%
77.300%
100.000%
Total Units
Percentage Unvested
Performance Rights
0
0
8,000
603,000
977,000
1,588,000
0.000%
0.000%
0.500%
37.970%
61.520%
100.000%
7,422
4,116
742
664
68
13,012
834
Holders
0
0
1
9
5
15
All unvested performance rights on issue were acquired under an employee incentive plan.
b) Voting Rights
All ordinary shares carry one vote per share without restriction.
Unvested performance rights carry no voting rights.
c) Stock Exchange Quotation
Elders has one class of quoted securities, being the ordinary shares (ELD) which is listed on the Australia Securities Exchange.
The Home Exchange is Sydney.
Elders2020 Annual Report ASX Additional Information
169
d) Twenty Largest Shareholders as at 1 November 2020
The twenty largest holders of Elders Ordinary Shares were as follows:
No. of shares
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
PODMONT PTY LTD
BNP PARIBAS NOMS PTY LTD
MR MARK CHARLES ALLISON
RCW RURAL PTY LTD
CITICORP NOMINEES PTY LIMITED
VENN MILNER SUPERANNUATION PTY LTD
BNP PARIBAS NOMINEES PTY LTD
DARTON PTY LTD
WARBONT NOMINEES PTY LTD
ROSS JAMES HUGHES
NATIONAL NOMINEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
PACIFIC AGRIFOODS INVESTMENTS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
Total Securities of Top 20 Holdings
43,507,448
25,244,406
15,118,186
11,516,067
3,349,689
2,997,532
2,250,000
1,741,163
1,274,880
908,153
850,056
800,000
683,845
526,500
397,000
379,547
348,259
347,793
335,456
311,669
%
27.965%
16.226%
9.717%
7.402%
2.153%
1.927%
1.446%
1.119%
0.819%
0.584%
0.546%
0.514%
0.440%
0.338%
0.255%
0.244%
0.224%
0.224%
0.216%
0.200%
112,887,649
72.561%
The number of shares held by substantial shareholders in the Company, as disclosed in substantial holding notices given to the Company
as at 1 November 2020.
Shareholder
The Vanguard Group, Inc. and its controlled entities.
Yarra Funds Management Ltd
Yarra Capital Management Holdings Pty Ltd
Yarra Management Nominees Pty Ltd
AA Australia Finco Pty Ltd
TA SP Australia Topco Pty Ltd
TA Universal Investment Holdings Ltd
No. of shares
Percentage of shares
held at date of notice
Date of notice
7,821,881
8,161,206
5.025%
5.2398%
20 February 2020
8 October 2020
e) Corporate Governance Statement
Elders’ 2020 Corporate Governance Statement can be found online at https://investors.elderslimited.com/investor-centre/?page=annual-reports
170
Shareholder
Information
Share Registry
Boardroom Pty Limited
Level 12, 225 George Street,
Sydney, NSW, 2001
1300 737 760
+61 (0)2 9279 0664
enquiries@
boardroomlimited.com.au
boardroomlimited.com.au
Enquiries
Shareholders with enquiries about
their shareholdings should contact the
Company’s share registry, Boardroom,
on the above contact details.
Online shareholder information
Shareholders can obtain information about their
holdings or view their account instructions online.
Investor information
Information about the Company is available from
a number of sources:
Website:
elders.com.au
Subscribe:
Shareholders can nominate to receive company
information electronically via the Investor
Centre on the Company’s website.
Additionally, shareholders may elect to
receive official company information through
InvestorServe on Boardroom’s website.
Publications:
The Annual Report is the major printed source of
company information. Other publications include
the half-yearly report, company press releases,
presentations and Investor Presentations.
All publications can be obtained either through the
Company’s website or by contacting the Company.
For identification and security purposes, you will
need to know your Reference Number (HIN/SRN),
Surname/Company Name and Post/Country Code
to access. This service is accessible via the Investor
Centre on the Company’s website or direct via the
Boardroom website at investorserve.com.au.
Tax and dividend/interest payments
Elders is obliged to deduct tax from dividend/
interest payments (which are not fully franked)
to holders registered in Australia who have
not quoted their Tax File Number (TFN) to the
Company. Shareholders who have not already
quoted their TFN can do so by contacting
Boardroom.
Change of address
Issuer Sponsored Shareholders who have changed
their address should advise Boardroom in writing.
Written notification can be emailed, posted or
faxed to Boardroom at the address shown adjacent
and must include both old and new addresses
and the Securityholder Reference Number (SRN)
of the holding.
Alternatively, holders can amend their details
on-line via Boardroom’s website. Shareholders
who have broker sponsored holdings should
contact their broker to update these details.
Annual Report mailing list
Shareholders who wish to vary their Annual Report
mailing arrangements should advise Boardroom
online or in writing.
Electronic versions of the report are available to all
via the Company’s website. Annual Reports will be
mailed to all shareholders who have elected to be
placed on the mailing list for this document.
Elders2020 Annual Report Company Directory
171
Company
Directory
Directors
Mr Ian Wilton — MSc, FCCA, FCPA, FAICD, CA
Mr Mark C Allison — BAgrSc, BEcon, GDM, FAICD, AMP (HBS)
Ms Robyn Clubb — BEc, CA, F Fin, MAICD
Ms Diana Eilert — BSc (Syd), MCom (UNSW), GAICD
Mr Matthew Quinn — BSc, ACA
Secretaries
Mr Peter G Hastings — BA, LLB, GDLP, FGIA, Grad Dip Applied Corporate Governance, GAICD
Ms Shannon Doecke — BAcc, Grad Dip Applied Corporate Governance, MAICD, AGIA
Registered Office
Level 10, 80 Grenfell Street, Adelaide, South Australia, 5000
P (08) 8425 4000
F (08) 7131 0118
CompanySecretary@elders.com.au
elders.com.au
Share Registry
Boardroom Pty Limited, Level 12, 225 George Street, Sydney, NSW, 2001
Auditor
Bankers
P 1300 737 760
F +61 (0)2 9279 0664
boardroomlimited.com.au
PricewaterhouseCoopers
Australia & New Zealand Banking Group
National Australia Bank
Stock Exchange Listing
Elders Limited ordinary shares are listed on the Australian Securities Exchange under the ticker code “ELD”.
Coöperative Centrale Raiffeisen - Boerenleenbank (Rabobank Australia)
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