Monday 14 November 2022
Appendix 4E and Annual Report for the Financial
Period Ended 30 September 2022
Elders Limited (ASX:ELD) today reports its results for the financial year ended 30 September 2022.
Attached is the Appendix 4E (Results for announcement to the market) and Annual Report for the 12 month
period ended 30 September 2022.
Further Information:
Mark Allison, Managing Director & Chief Executive Officer, 0439 030 905
Authorised by:
Peter Hastings, Company Secretary
Elders Limited ABN 34 004 336 636.
Registered Office: Level 10, 80 Grenfell Street, Adelaide SA Australia 5000
Elders Limited Appendix 4E (Rule 4.3A)
RESULTS FOR ANNOUNCEMENT TO MARKET
For the year ended 30 September 2022
Attached is the final report for the year ended 30 September 2022. The consolidated profit before tax and non-controlling interests was $162.9 million
(2021: $149.8 million).
Additional Appendix 4E disclosure requirements and further details on the results and operations are included in the Annual Report provided to the
Australian Securities Exchange.
Result
Revenue
Profit after tax for the year attributable to members
12 months
September
2022
$000
3,445,254
162,866
up
up
35%
9%
to
to
Dividends
2022
Final Dividend
Interim Dividend
Total
2021
Final Dividend
Interim Dividend
Total
The record date for the final dividend is 22 November 2022. Dividend payment date is 16 December 2022.
Net tangible assets backing per ordinary security (156,476,574)1
1 Assets for the purpose of net tangible assets include right-of-use assets associated with leases recognised in accordance with AASB 16
Amount
per security
Franked amount
per security
28 cents
28 cents
56 cents
22 cents
20 cents
42 cents
8.4 cents
8.4 cents
16.8 cents
4.4 cents
4.0 cents
8.4 cents
September
2022
September
2021
$
2.84
$
2.17
FOR
AUSTRALIAN
AGRICULTURE
2022 Elders
Annual Report
Elders Limited ABN 34 004 336 636
Contents
Chair's Report
CEO’s Report
Year in Brief
Operating and Financial Review
Review of Operations
Sustainability
Directors’ Report
Remuneration Report
Executive Management
Elders Limited Annual Financial Report
Shareholder Information
Company Directory
1
2
4
6
10
22
34
42
50
70
76
136
137
(cid:754)
Elders (cid:754)(cid:752)(cid:754)(cid:754) Annual Report
Chair’s Report
lders(cid:4) has(cid:4) thrived(cid:4) in(cid:4) this(cid:4) environment(cid:4) and(cid:4)
created exceptional(cid:4) value(cid:4) for(cid:4) shareholders(cid:4) as(cid:4)
a(cid:4) result.(cid:4) While(cid:4) environmental(cid:4) factors(cid:4) affecting
commodities(cid:4) have(cid:4) a(cid:4) direct(cid:4) correlation(cid:4) with(cid:4)
our(cid:4) performance,(cid:4) the(cid:4) results(cid:4) presented(cid:4) in(cid:4) this(cid:4)
Annual(cid:4) Report(cid:4) are(cid:4) also(cid:4) the(cid:4) product(cid:4) of(cid:4) the(cid:4) hard(cid:4)
work(cid:4) of(cid:4) the(cid:4)
lders(cid:4) team(cid:4) and(cid:4) its(cid:4) dedication(cid:4) to(cid:4)
the(cid:4) interests(cid:4) of(cid:4) our(cid:4) customers.(cid:4) Our(cid:4) adherence(cid:4)
to(cid:4) the(cid:4)
of(cid:4) the(cid:4) network(cid:4) team(cid:4) to(cid:4) consistently(cid:4) deliver(cid:4) the(cid:4)
best(cid:4) service(cid:4) in(cid:4) rural(cid:4) Australia,(cid:4) has(cid:4) allowed(cid:4) us(cid:4) to(cid:4)
record(cid:4) this(cid:4) exceptional(cid:4) result.
ight(cid:4) Point(cid:4) Plan,(cid:4) and(cid:4) the(cid:4) commitment(cid:4)
(cid:56) he(cid:4) world’s(cid:4) population(cid:4) is(cid:4) pro(cid:78) ected(cid:4) to(cid:4) increase(cid:4)
by(cid:4) 2(cid:4) billion(cid:4) people(cid:4) in(cid:4) the(cid:4) next(cid:4) 30(cid:4) years1,(cid:4)
dramatically growing(cid:4) from(cid:4) almost(cid:4) 8(cid:4) billion(cid:4)
currently(cid:4) to 9.7 billion(cid:4) in(cid:4) 20501.(cid:4)
growth together(cid:4) with(cid:4) global(cid:4) instability(cid:4) put(cid:4)
added(cid:4) pressure(cid:4) on(cid:4) food(cid:4) production(cid:4) and(cid:4) these(cid:4)
factors(cid:4) call(cid:4) on(cid:4) Australian(cid:4) farmers(cid:4) to(cid:4) continue(cid:4) to(cid:4)
increase(cid:4) productivity.(cid:4) Our(cid:4) industry’s(cid:4) ambition(cid:4) of(cid:4)
reaching(cid:4) pre-farmgate(cid:4) value(cid:4) of(cid:4) $100(cid:4) billion2(cid:4) by(cid:4)
2030(cid:4) has(cid:4) never(cid:4) been(cid:4) more(cid:4) relevant.
(cid:56) his(cid:4) population(cid:4)
lders(cid:4) is(cid:4) at(cid:4) the(cid:4) forefront(cid:4) of(cid:4) this(cid:4) growth,(cid:4)
supplying(cid:4) goods(cid:4) and(cid:4) services(cid:4) to(cid:4) thousands(cid:4)
of(cid:4) farmers(cid:4) across(cid:4) the(cid:4) country(cid:4) and(cid:4) assisting(cid:4)
them(cid:4) to(cid:4) improve(cid:4) their(cid:4) production(cid:4) quality(cid:4) and(cid:4)
quantity.(cid:4) We(cid:4) have(cid:4) an(cid:4) opportunity(cid:4) to(cid:4) sustainably(cid:4)
grow(cid:4) our(cid:4) business(cid:4) and(cid:4) our(cid:4) sector(cid:4) to(cid:4) deliver(cid:4)
more(cid:4) value(cid:4) to(cid:4) Australian(cid:4) farmers,(cid:4) consumers,(cid:4)
and(cid:4) industry(cid:4) stakeholders.
lders(cid:4) announced(cid:4) its(cid:4)
Reinvestment(cid:4) is(cid:4) an(cid:4) important(cid:4) part(cid:4) of(cid:4) our(cid:4)
growth(cid:4) strategy.(cid:4)
(cid:56) his(cid:4) year(cid:4)
new(cid:4) wool(cid:4) handling(cid:4) business(cid:4) which(cid:4) is(cid:4) a(cid:4) clear(cid:4)
demonstration(cid:4) of(cid:4) confidence(cid:4) in(cid:4) the(cid:4) future(cid:4) of(cid:4)
(cid:56) his(cid:4) significant(cid:4) investment(cid:4)
this(cid:4) unique fibre.(cid:4)
will(cid:4) help(cid:4) to(cid:4) make(cid:4) the(cid:4) wool(cid:4) industry(cid:4) more(cid:4)
efficient(cid:4) and(cid:4) more(cid:4) sustainable.
(cid:74) or(cid:4) Australian(cid:4)
(cid:43) ood(cid:4)
Australian(cid:4) agriculture(cid:4) is(cid:4) in(cid:4)
a(cid:4) strong(cid:4) position.(cid:4)
seasonal(cid:4) conditions,(cid:4) strong(cid:4)
commodity(cid:4) prices,(cid:4) and(cid:4)
record(cid:4) demand(cid:4)
agricultural(cid:4) products(cid:4) are(cid:4)
all(cid:4) contributing(cid:4) to(cid:4) a(cid:4)
very(cid:4)
(cid:74) avourable(cid:4) production(cid:4)
environment(cid:4) and(cid:4) a(cid:4) sense(cid:4) o(cid:74)
confidence(cid:4) and(cid:4) excitement(cid:4)
(cid:74) or(cid:4) t(cid:76) e(cid:4) years(cid:4) a(cid:76) ead.
In(cid:4) addition,(cid:4) during(cid:4) the(cid:4) course(cid:4) of(cid:4) the(cid:4) financial
year,(cid:4) we(cid:4) acquired(cid:4) 13(cid:4) businesses(cid:4) with(cid:4) 10(cid:4) new(cid:4)
locations(cid:4) and(cid:4) 115(cid:4) new(cid:4) employees,(cid:4) improving(cid:4)
our(cid:4) geographic(cid:4) spread(cid:4) to(cid:4) service(cid:4) more(cid:4) clients.(cid:4)
(cid:56) he(cid:4) business(cid:4) development(cid:4) pipeline(cid:4) for(cid:4) FY23
is(cid:4) encouraging(cid:4) with(cid:4) numerous(cid:4) successful(cid:4)
businesses(cid:4) expected(cid:4) to(cid:4)
12(cid:4) months.
lders(cid:4) in(cid:4) the(cid:4) next(cid:4)
(cid:78) oin(cid:4)
(cid:56) he(cid:4)
We(cid:4) also(cid:4) continue(cid:4) to(cid:4) invest(cid:4) in(cid:4) our(cid:4) people.(cid:4)
Food(cid:4) Supply(cid:4) Chain(cid:4) Alliance(cid:4) recently(cid:4) stated(cid:4) the(cid:4)
food(cid:4) supply(cid:4) chain(cid:4) is(cid:4) short(cid:4) at(cid:4) least(cid:4) 172,000
people3.(cid:4)
(cid:48) abour(cid:4) is(cid:4) crucial(cid:4) to(cid:4) achieving(cid:4) our(cid:4)
goals,(cid:4) and(cid:4) shortages(cid:4) in(cid:4) our(cid:4) sector(cid:4) mean(cid:4) we(cid:4)
need(cid:4) to(cid:4) attract(cid:4) talent(cid:4) across(cid:4) every(cid:4) area(cid:4) of(cid:4) our(cid:4)
business.(cid:4)
(cid:56) he(cid:4) need(cid:4) to(cid:4) encourage(cid:4) diversity(cid:4) in(cid:4)
our(cid:4) sector(cid:4) has(cid:4) never(cid:4) been(cid:4) so(cid:4) pertinent(cid:31)
need(cid:4) to(cid:4) ensure(cid:4) we(cid:4) hire(cid:4) and(cid:4) retain(cid:4) talent(cid:4) from(cid:4)
across(cid:4) a(cid:4) broad(cid:4) spectrum(cid:4) of(cid:4) individuals.
(cid:4) we(cid:4)
lders(cid:4) is(cid:4)
(cid:56) his(cid:4) year(cid:4)
Women(cid:4) are(cid:4) underrepresented(cid:4) in(cid:4) our(cid:4) industry,(cid:4)
with data(cid:4) showing(cid:4) women(cid:4) make(cid:4) up(cid:4) only(cid:4)
32%(cid:4) of(cid:4) the(cid:4) agricultural(cid:4) workforce4.(cid:4)
committed to(cid:4) changing(cid:4) this(cid:4) with(cid:4) a(cid:4) focus(cid:4)
on(cid:4) diversity,(cid:4) equity(cid:4) and(cid:4) inclusion.(cid:4)
we(cid:4) refreshed(cid:4) our(cid:4) Diversity(cid:4) and(cid:4) Inclusion(cid:4)
ob(cid:78) ectives(cid:4) regarding(cid:4) the(cid:4) representation(cid:4) of(cid:4)
women(cid:4) in(cid:4) management(cid:4) positions,(cid:4) implemented(cid:4)
equal(cid:4) gender(cid:4) composition(cid:4) on(cid:4) learning(cid:4) and(cid:4)
development(cid:4) programs(cid:4) and(cid:4) in(cid:4) early(cid:4) careers(cid:4)
recruitment,(cid:4) created(cid:4) policy(cid:4) changes(cid:4) to(cid:4) reflect(cid:4)
inclusion,(cid:4) and(cid:4) introduced(cid:4) unconscious(cid:4) bias(cid:4)
training(cid:4) at(cid:4) the(cid:4) frontline(cid:4) leadership(cid:4) level.
lders(cid:4) is(cid:4) a(cid:4) partner(cid:4) of(cid:4) the(cid:4) National(cid:4) Farmer’s(cid:4)
Federation(cid:4) Diversity(cid:4) in(cid:4) Agriculture(cid:4)
program,(cid:4) which(cid:4) involves(cid:4) committing(cid:4) to(cid:4)
meaningful(cid:4) change(cid:4) towards(cid:4) gender(cid:4) diversity(cid:4)
within(cid:4)
lders(cid:4) and(cid:4) more(cid:4) broadly(cid:4) in(cid:4) the(cid:4)
agriculture(cid:4) industry.
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1
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Chair's Report
3
The representation of women in management
is an important measure for us to track the
success of our diversity strategy. In the coming
year we are striving to get closer to our
target of 25% women in leadership positions
by 2025. This figure currently sits at 17%.
Our representation of women in Non-Executive
Director roles and Senior Executive positions
remain steady at 60% and 42% respectively.
There is much work to be done and
Elders acknowledges it has a key role to
play in improving participation of the under
represented in our workforce.
With so many opportunities ahead, there is a
feeling of optimism in the agriculture sector.
The Australian Bureau of Agricultural and
Resource Economics and Sciences (ABARES)
is predicting the gross value of agricultural
production to exceed $80 billion in 2022-23
and for favourable conditions to persist5.
Farmland values continue to increase, showing
genuine confidence in agriculture as a safe and
reliable asset class for investors6. Recent APRA
findings support this increased investment in
agricultural assets, with a 6% overall increase
in lending to the farm sector in 2020-217.
It’s not possible to speak about the successes
of Elders without referencing the progress we
are making towards being a more sustainable
business. This year Elders publishes its third
Sustainability Report, tracking progress towards
our ambitions to be a leader in sustainability for
the agricultural sector, and an adopter of the
best governance and sustainability standards
practised in corporate Australia.
We continue to support a wide range of
organisations that each contribute to the
richness and vitality of rural and regional
communities around Australia. Strengthening
regional Australia is important to us, and
our clients, which is why we have joined
the Regional Australia Council, to offer our
support and expertise as well as make our own
commitments to its development.
It is evident that Elders plays a crucial role, not
just in the agricultural sector, but to Australian
livelihoods, the economy, and the global food
supply chain. I am pleased to say your company
is in good shape financially, which will allow it
to continue in this role into the future and bring
value to shareholders.
I would like to thank my fellow directors for
their support and all Elders team members for
their great efforts and dedication throughout
the year.
Your Chair,
Ian Wilton
Chair
5 Department of Agriculture, Fisheries and Forestry, Agricultural overview: September quarter 2022.
6
Elders, Elders Rural Property Update Q2 April - June 2022.
7 Department of Agriculture, Fisheries and Forestry, Agricultural lending data 2020-21.
(cid:756)
Elders (cid:754)(cid:752)(cid:754)(cid:754) Annual Report
CEO’s Report
lders(cid:4) is(cid:4) a(cid:4) trusted(cid:4)
lders(cid:4) has(cid:4) maintained(cid:4)
(cid:38) rand
I(cid:4) am(cid:4) proud(cid:4) to(cid:4) share(cid:4) that(cid:4)
its position(cid:4) as(cid:4) rural(cid:4) Australia’s(cid:4) most(cid:4) trusted(cid:4)
agribusiness(cid:4) by(cid:4) farmers,(cid:4) according(cid:4) to(cid:4) Roy(cid:4)
Morgan(cid:4) brand(cid:4) trust(cid:4) research.(cid:4)
partner(cid:4) to(cid:4) Australian(cid:4) farming(cid:4) enterprises,(cid:4)
delivering(cid:4) products,(cid:4) services,(cid:4) and(cid:4) advice(cid:4) to(cid:4)
assist(cid:4) them(cid:4) in(cid:4) improving(cid:4) the(cid:4) productivity(cid:4) of(cid:4)
their(cid:4) businesses.(cid:4) We(cid:4) occupy(cid:4) this(cid:4) privileged(cid:4)
position(cid:4) as(cid:4) a(cid:4) result(cid:4) of(cid:4) the(cid:4) passion(cid:4) and(cid:4)
commitment(cid:4) of(cid:4) our(cid:4) industry-leading(cid:4) workforce(cid:4)
which(cid:4) is(cid:4) there(cid:4) for(cid:4) our(cid:4) clients(cid:4) and(cid:4) communities(cid:4)
in(cid:4) every(cid:4) season.(cid:4)
is(cid:4) year.(cid:4)
(cid:76) as(cid:4) muc(cid:76)
(cid:4) to(cid:4) be(cid:4)
(cid:76) e(cid:4)
(cid:41) lders(cid:4)
(cid:4) t(cid:76)
proud(cid:4) o(cid:74)
business(cid:4)
(cid:76) as(cid:4) per(cid:74) ormed(cid:4)
remar(cid:79) ably(cid:4) well,(cid:4) ma(cid:79) ing(cid:4)
significant(cid:4) progress(cid:4) on(cid:4) its(cid:4)
strategic(cid:4) ambitions(cid:4) and(cid:4)
contributing(cid:4) to(cid:4) a(cid:4) t(cid:76) riving(cid:4)
agriculture(cid:4) sector.
(cid:41) xceptional(cid:4) financial(cid:4) per(cid:74) ormance
In FY22 our(cid:4) underlying(cid:4) earnings(cid:4) before(cid:4) interest(cid:4)
and(cid:4) tax(cid:4) ((cid:41) BI(cid:56) )(cid:4) was(cid:4) $232.1(cid:4) million,(cid:4) an(cid:4) increase(cid:4)
of(cid:4) 39%.(cid:4) We(cid:4) have(cid:4) seen(cid:4) steady(cid:4) growth(cid:4) across(cid:4)
all(cid:4) of(cid:4) our(cid:4) core(cid:4) product(cid:4) and(cid:4) geographic(cid:4) areas,(cid:4)
contributing(cid:4) to(cid:4) this(cid:4) result,(cid:4) which(cid:4) is(cid:4) testament(cid:4) to(cid:4)
our(cid:4) business(cid:4) improvement(cid:4) initiatives.
lders’(cid:4) performance(cid:4) this(cid:4) year(cid:4) reflects(cid:4) the(cid:4)
continued(cid:4) commitment(cid:4) to(cid:4) improvement(cid:4) and(cid:4)
growth(cid:4) in(cid:4) accordance(cid:4) with(cid:4) our(cid:4)
ight(cid:4) Point(cid:4)
Plan,(cid:4) coupled(cid:4) with(cid:4) excellent(cid:4) seasonal(cid:4) and(cid:4)
market(cid:4) conditions.(cid:4) We(cid:4) have(cid:4) made(cid:4) both(cid:4) product(cid:4)
and(cid:4) geographically(cid:4) strategic(cid:4) acquisitions(cid:4) and(cid:4)
continued(cid:4) to(cid:4) grow(cid:4) our(cid:4) business(cid:4) organically(cid:4)
across(cid:4) the(cid:4) country.(cid:4) Our(cid:4) ongoing(cid:4) rural(cid:4) products(cid:4)
backward(cid:4) integration(cid:4) strategy(cid:4) and(cid:4) execution(cid:4) of(cid:4)
supply(cid:4) chain(cid:4) efficiency(cid:4) initiatives(cid:4) has(cid:4) continued(cid:4)
to(cid:4) deliver(cid:4) margin(cid:4) growth.
We(cid:4) have(cid:4) not(cid:4) compromised(cid:4) our(cid:4) unflinching(cid:4)
financial(cid:4) discipline(cid:4) in(cid:4) achieving(cid:4) this(cid:4) growth,(cid:4)
with(cid:4) our(cid:4) commitment(cid:4) to(cid:4) cost(cid:4) and(cid:4) capital(cid:4)
efficiency(cid:4) reflected(cid:4) in(cid:4) underlying(cid:4) return(cid:4) on(cid:4)
capital(cid:4) (ROC)(cid:4) of(cid:4) 26.2%(cid:4) up(cid:4) from(cid:4) 22.5%(cid:4) in(cid:4)
FY21(cid:4) and(cid:4) outperforming(cid:4) our(cid:4) benchmark(cid:4) target(cid:4)
of(cid:4) 15%.
(cid:47) ey(cid:4) highlights(cid:4) of(cid:4) the(cid:4) FY22(cid:4) results(cid:4) include:
Sales(cid:4) of(cid:4) $3445.3(cid:4) million,(cid:4) up(cid:4) 35%
ross(cid:4) margin(cid:4) of(cid:4) $652.7(cid:4) million,(cid:4) up(cid:4) 23%
Rural(cid:4) Products(cid:4) gross(cid:4) margin(cid:4) of(cid:4)
$383.1(cid:4) million,(cid:4) up(cid:4) 35%, including(cid:4) 53%
growth(cid:4) in(cid:4) gross(cid:4) margin(cid:4) contribution(cid:4) from(cid:4)
our(cid:4) fertiliser(cid:4) sales,(cid:4) where(cid:4) we(cid:4) continue(cid:4)
to(cid:4) grow(cid:4) margins(cid:4) through(cid:4) supply(cid:4) chain(cid:4)
efficiency,(cid:4) dynamic(cid:4) pricing(cid:4) and(cid:4) other(cid:4)
business(cid:4) improvement(cid:4) initiatives
(cid:617) Agency(cid:4) Services(cid:4) contributed(cid:4) gross(cid:4) margin(cid:4) of(cid:4)
(cid:41) state(cid:4) gross(cid:4) margin(cid:4) of(cid:4) $61.6(cid:4) million,(cid:4)
$147.0(cid:4) million,(cid:4) up(cid:4) 4%
Real(cid:4)
up(cid:4) 21%(cid:4) with(cid:4) growth(cid:4) across(cid:4) farmland(cid:4) sales,(cid:4)
residential(cid:4) sales(cid:4) and(cid:4) property(cid:4) management
Financial(cid:4) Services(cid:4) contributed(cid:4) gross(cid:4) margin(cid:4)
of(cid:4) $44.2(cid:4) million,(cid:4) up(cid:4) 7%,(cid:4) with(cid:4) growth(cid:4) in(cid:4)
insurance(cid:4) and(cid:4)
Feed(cid:4) and(cid:4) Processing(cid:4) Services(cid:4) gross(cid:4) margin(cid:4)
of(cid:4) $16.8(cid:4) million,(cid:4) up(cid:4) 33% benefitting(cid:4) from(cid:4)
improved(cid:4) efficiency(cid:4) and(cid:4) innovation(cid:4) at(cid:4)
(cid:4) delivery(cid:4) warranty
(cid:48) I(cid:56)
illara(cid:4) Feedlot
Improvement(cid:4) of(cid:4) leverage,(cid:4) interest(cid:4) cover(cid:4) and(cid:4)
gearing(cid:4) ratios
Sa(cid:74) ety(cid:4) and(cid:4) wellbeing
While(cid:4) we(cid:4) have(cid:4) en(cid:78) oyed(cid:4) the(cid:4) return(cid:4) of(cid:4) many(cid:4)
in-person(cid:4) events,(cid:4) allowing(cid:4) our(cid:4) employees(cid:4) to(cid:4)
reconnect(cid:4) with(cid:4) clients(cid:4) and(cid:4) industry(cid:4) after(cid:4) a(cid:4)
significant(cid:4) hiatus(cid:4) caused(cid:4) by(cid:4) the(cid:4) pandemic,(cid:4)
lders(cid:4) has(cid:4) maintained(cid:4) a(cid:4) safety-first(cid:4) approach(cid:4)
to(cid:4) protecting(cid:4) its(cid:4) employees.(cid:4) Adherence(cid:4) to(cid:4)
COVID-19(cid:4) guidelines(cid:4) and(cid:4) best(cid:4) practice(cid:4) has(cid:4)
been(cid:4) a(cid:4) priority(cid:4) to(cid:4) ensure(cid:4) the(cid:4) health(cid:4) of(cid:4) all(cid:4)
members(cid:4) of(cid:4) the(cid:4) community(cid:4) is(cid:4) protected.(cid:4)
We(cid:4) have(cid:4) had(cid:4) a(cid:4) staggered(cid:4) return(cid:4) to(cid:4) offices
and(cid:4) branches,(cid:4) encouraging(cid:4) work(cid:4) from(cid:4) home(cid:4)
arrangements(cid:4) where(cid:4) possible(cid:4) to(cid:4) contribute(cid:4) to(cid:4)
the(cid:4) public(cid:4) effort(cid:4) to(cid:4) minimise(cid:4) the(cid:4) spread(cid:4) of(cid:4)
COVID-19.(cid:4)
nimble(cid:4) and(cid:4) maintain(cid:4) the(cid:4) highest(cid:4) level(cid:4) of(cid:4) service(cid:4)
to(cid:4) our(cid:4) clients(cid:4) throughout(cid:4) this(cid:4) period(cid:4) has(cid:4)
been(cid:4) commendable.
(cid:56) he(cid:4) ability(cid:4) of(cid:4) our(cid:4) team(cid:4) to(cid:4) remain(cid:4)
(cid:56)
(cid:41)
(cid:41)
(cid:41)
(cid:41)
(cid:617)
(cid:617)
(cid:43)
(cid:617)
(cid:617)
(cid:617)
(cid:617)
(cid:47)
(cid:617)
(cid:41)
We had 6 Lost Time Injuries (LTI) this year.
Any harm to our employees is unacceptable
and we strive for a zero-harm workplace. Our
commitment to safety has been backed by
a $3.3 million investment in our network to
provide sufficient chemical storage controls,
upgraded racking and new purpose-built
branches. Elders also invested $365k in pallet
wrappers and drum jib lifters, and is trialling
improved in-vehicle safety systems.
With the assistance of our employee Wellbeing
Committee, this year we reviewed our current
risk controls around psychosocial hazards and
trained selected staff in mental health first aid,
with further investment to be made. In addition
to these initiatives, Elders is in the process of
implementing a plan for all branches to host a
defibrillator, so that any employee or member
of the community can access this potentially
life-saving equipment in an emergency.
Sustainability and innovation
Elders' commitment to sustainability is one
of our top priorities and I am pleased
to share that we have made significant
inroads across all facets of our sustainability
strategy. Across our network we allocated
$2.7 million to sponsorships and donations,
directing the majority of our spend to local
community groups, agriculture industry and
innovation and health and wellbeing initiatives.
At a grassroots level, these investments have
significant and lasting impacts on the vitality
and connectedness of rural communities.
Our dedication to managing our environmental
impact deepened in 2022. One example
has been our focus on improving waste
management. We joined the Australian
Packaging Covenant Organisation and our
branches collected 1,600 small and 50,000
bulk chemical containers from farmers for
recycling. We also undertook further analysis
of our waste management approach, with
the objective of developing a national waste
management strategy that will enable us to
better manage our impact.
Innovation is an essential driver of the
agricultural sector achieving its ambitions of
$100 billion pre-farmgate output by 2030.
Elders continues to partner with industry bodies
and research institutions, both in our network
and the Thomas Elder Institute, to bridge the
gap between research and on-farm adoption of
technologies and techniques that have proven
benefits to productivity. AgTech remains an
important contributor to improving farming
productivity and this year we partnered with
providers that assist producers with a range
of innovations from farm management tools to
remote water monitoring, soil moisture probes
and remote sensing satellite imagery.
Over the coming months and years we’re
changing our ways of working through a
significant systems modernisation project. Early
in 2023, Elders will unveil a brand-new website,
which will deliver a seamless and convenient
experience, with the customer at the centre,
and e-commerce capabilities in the future.
The Elders values of teamwork and innovation
will be brought to the forefront with a
transformed internal digital landscape through
a new intranet that will significantly improve
our communication and operations. Our core
business systems will be evolving, future
proofing us and laying solid foundations to
maintain growth and strong relationships with
customers, community, and our own people.
These changes will be implemented across
finance, operations and human resources
platforms making them far more accessible
and useable. Additionally, we’ll build talent
and capability across Elders, with leaders
accessing integrated information for a clearer
real time picture of the organisation, optimising
our workforce, and removing capability gaps.
Elders’ customers will experience the benefits
of these improved ways of working and of the
increased capacity of our people.
Full details on our targets and strategy can be
found in our Sustainability Report, available at
Elders Investor Centre.
Growth and reinvestment
As the Elders network expands through
recruitment and the acquisition of businesses
that fill strategic or geographical gaps, our
focus on our people becomes increasingly
important. This year, Elders achieved all-time
high results in our employee effectiveness
survey, well above the global high performing
benchmark. The results showed an increase in
both markers: the level to which our employees
are engaged, committed and willing to go
the extra mile, and enabled, possessing the
resources and support to do their job. As CEO
I am encouraged by these results, assured that
we are doing the right things in our business to
support our employees.
CEO’s Report
5
I am also motivated to ensure that we continue
to be an employer of choice in our sector
and offer a desirable value proposition in a
competitive recruitment market. Retention is
just one part of our strategy to employ the
best people, which is why we have reinvested
and re-envisioned our Early Careers Program
which encapsulates a range of pathways
across our business for the next generation of
agribusiness professionals.
Reinvestment in our people, business and
industry, is an important part of ensuring
that Elders continues to grow and thrive.
In this vein, we announced the launch of
Elders Wool Handling, scheduled for launch in
2023, which will see a significant investment
in improving the wool supply chain and
offering end to end service for our clients with
improved efficiency and ease. Complementing
Elders’ existing wool offering, the new business
and its associated facilities, will be industry
leading in terms of capabilities, safety and
environmental credentials, and approach to
supply chain optimisation.
As we grow, it is imperative that we
continue to invest in developing our existing
team and maintaining our One Elders
culture. We have numerous personal and
professional development initiatives in the
business ranging from our traineeships
through to our senior leaders development
program, known as the Thomas Elder
Academy. Notwithstanding ongoing COVID-19
restrictions, we have successfully maintained
engagement with our people, as demonstrated
by our high performance enablement and
engagement scores.
This is a credit to the leadership group
throughout the business and I thank them for
their commitment to our people during these
challenging times.
Looking forward
Elders has once again generated excellent
results for our shareholders in 2022 and
deepened its position as the most trusted
partner to Australian farmers. Having said that,
there are still many opportunities to grow and
improve our business, and further enhance
our value proposition to rural Australia. I wish
to thank the entire Elders team for their
contribution to achieving these results and their
commitment to delivering on these ambitions
moving forward.
Mark C Allison
Managing Director
and CEO
(cid:758)
Elders (cid:754)(cid:752)(cid:754)(cid:754) Annual Report
6
LOST TIME
INJURIES
#1
MOST TRUSTED
AGRIBUSINESS BRAND
79%
EMPLOYEE
ENGAGEMENT
49
NET PROMOTER
SCORE
Year in Brief
(cid:759)
YEAR
IN BRIEF
Sales
revenue
$3.4b
Cost to
earn ratio
64%
Up 35% on FY21 Results
Down 5% on FY21 Results
Gross
margin
$653m
Return
on
capital
26%
Up 23% on FY21 Results
Up 3.7% on FY21 Results
Underlying
EBIT
$232m
Underlying
earnings
per share
97.3c
Up 39% on FY21 Results
Up 1% on FY21 Results
Dividend per
share
56.0c
Cash
conversion
75%
Up 33% on FY21 Results
Down 19% on FY21 Results
8
Elders 2022 Annual Report
A healthy future
For Australian wool
One of the programs that Samantha refers
to is the Responsible Wool Standard (RWS)
which is an international, voluntary standard
that addresses animal welfare in sheep farms
and the chain of custody of wool from farm
to final product. Individual sites are certified
by independent bodies, and material is then
tracked from the farm to the final product using
transaction certificates.
Elders is a leader in providing consultation
to clients to support them in becoming RWS
accredited, with a growing number of RWS
accredited clips being sold each month across
the country.
“Supporting our clients, whether to achieve
accreditation, transition to non-mulesing, or
improve their safety or productivity practices
in other ways, are all examples of how Elders
is doing more to support farming businesses,”
said Samantha.
“We have to look at the entire supply chain to
find opportunities where we can add value as
professionals, but also as industry participants
who want the sheep and wool sector to enjoy
success for generations to come.”
Samantha has her own list of credentials as
winner of the Broker Award from the National
Council of Wool Selling Brokers of Australia
in 2019, Elders Employee of the Year award
in 2018, and the title Youth Ambassador
for WoolProducers Australia, just to name a
few. While she seems a natural fit to the
industry, Samantha doesn’t have an agricultural
background, and has driven her own success
by seeking out experiences and opportunities,
learning from the network around her, and
recognising that her unique skillset is an asset.
“If we keep looking for the same people to
do the same things, we will never change.
I’m fortunate that I have always had senior
members of my team backing me, giving me
confidence,” she said.
People like Samantha are helping to take the
wool industry forward and are crucial advocates
for pursuing a career in the sector. In July 2022,
Elders announced a significant investment in
the industry with the Elders Wool Handling
business to launch in 2023.
“Elders Wool Handling is showing that we’re
not just brokers, we are a solid and invested
part of the supply-chain. The pro-activeness of
this business decision is important to show the
next generation that we have something great
to showcase,” said Samantha.
For Matthew Tattersall, Wool Technical
Manager, the new business is a keen reflection
of the optimism felt in the sector.
“There are major benefits for growers, including
being able to manage their businesses better
by having easier access to information,”
said Matthew.
“These efficiency gains will be felt well past
the farmgate, with central facilities making
the shipping and handling process faster and
easier and putting product in the hands of
buyers sooner.”
Matthew said the wool sector is developing a
keener interest in ethical production which is
helping to drive change.
“Wool is already seen as a clean and natural
fibre but we are seeing an evolution of our
industry toward a more sustainable model,
driven by consumer demand. The welfare of
workers in wool, the animals and the land on
which wool is grown, is being prioritised more
than ever before.
The combination of this, with changing
infrastructure and investment in the supply
chain through Elders’ new wool handling
business, are all signs that wool has a
healthy future.”
Elders has played a
pioneering role in the
Australian wool industry
since its infancy.
In the early days of wool production in
Australia, Elder, Smith & Co, owned and
ran several pastoral properties, shearing an
estimated 1.5 million sheep in the early 1880’s.
During this time, wool was an important
export commodity for the growing colony and
Australia became the largest producer of wool
in the world.
In 2021/22 Australia exported $3.3 billion of
wool1; the fibre remains a world-renowned
and sought-after product due to its natural
properties which include insulation, fire
resistance, hardiness and stretch.
While the sector might be steeped in tradition,
it is far from backward. Wool has an impressive
list of environmentally friendly credentials and
is being transitioned by some of the industry’s
sharpest minds who are passionate about
the fibre’s ecofriendly credentials, its ability
to be grown and sourced sustainably, and
who service international markets that are
increasingly driven by consumers who demand
transparency and traceability.
Samantha Wan is the Wool Quality Assurance
& Marketing Manager at Elders’ Wool Selling
Centre in Melbourne. She acts as a point of
contact for growers and district wool managers,
assisting them with key decision making.
“It’s important for Australia to keep an eye
on this industry that is changing every day,”
said Samantha.
“Consumers are driving the wool market to
become increasingly accountable, traceable
and sustainable, which means we have
opportunities to implement techniques and
programs with our clients that make their
product more sellable, and often, more able to
earn premiums on a clip.”
1
Rural Bank, Australian agricultural trade 2021/22.
A healthy future Australian wool
9
“We have to look at the
entire supply chain to
find opportunities where
we can add value as
professionals, but also as
industry participants who
want the sheep and wool
sector to enjoy success for
generations to come.”
Samantha Wan
Wool Quality Assurance & Marketing Manager,
Elders' Wool Selling Centre Melbourne
OPERATING & FINANCIAL REVIEW2022 12
Elders 2022 Annual Report
Operating
and Financial
Review1
During the year ended
30 September 2022, all
our key products and
geographies outperformed
the prior year, reflecting
the implementation of our
Eight Point Plan business
improvement initiatives and
successful integration of our
strategic acquisitions, which
allowed us to take advantage
of excellent seasonal and
market conditions.
Geographical and product
diversity enabled Elders
to overcome headwinds
from localised unfavourable
weather events in many
regions, while supply chain
efficiency initiatives and
our backward integration
strategy continue to support
margin growth.
Operations
Elders is focused on creating value for
all its people, customers, community and
shareholders in Australia and internationally.
We achieve this with the expertise and
dedication of over 2,500 employees and an
ongoing commitment to safety, sustainability
and diversity.
In Australia, Elders works closely with primary
producers to provide products, marketing
options and specialist technical advice across
rural, wholesale, agency and financial product
and service categories.
Elders is also 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 best practice beef cattle feedlot in New
South Wales.
Strategy
Elders' strategic framework is governed by our
three-year Eight Point Plan.
Our ambitions to FY23 include:
• achieving compelling shareholder returns
(5-10% EBIT and EPS growth through the
cycles and minimum 15% ROC). Two years
into the current Eight Point Plan we have
attained 39% EBIT growth, while improving
ROC to 26.2% in FY22
• industry leading sustainability outcomes,
with targets set to reduce our Scope 1 and
2 greenhouse gas emissions to zero by 2050
• being the most trusted agribusiness brand
in rural and regional Australia, which we
are proud to have had awarded for the last
three years
Elders continued to make strong progress on
our strategic priorities and enablers:
1. Win market share across all products,
services and geographies through client
focus, effective sales and marketing and
strategic acquisitions
2. Capture more gross margin in
Rural Products through optimised
pricing, backward integration and supply
chain efficiency
3. Strengthen and expand our service
offerings, including Livestock and Wool
Agency, Real Estate, Financial and
Technical Services
4. Optimise our Feed and Processing
Services business at Killara Feedlot
5. Develop a sustainability program that is
authentic and industry leading
6. Invest in Systems Modernisation program -
best of breed solutions to improve customer
experience, drive process and administration
efficiency and better accommodate change
7. Attract, retain and develop the best
people and provide a safe and inclusive
working environment
8. Maintain unflinching financial discipline and
commitment to cost and capital efficiency
Impacts of COVID-19
While COVID-19 pandemic conditions appear
to be easing in Australia at the date of this
report, COVID-19 remains a global pandemic
as declared by the World Health Organisation.
Elders has considered the impact of COVID-19
when preparing the consolidated financial
statements and related note disclosures,
and continues to monitor the impact on
our employees, demand for Elders’ products
and services, customers, communities and
supply chains.
Impacts of severe weather events
in Australia
The eastern Australian states have been
impacted by high rainfall and severe
flooding during 2022. The commitment
of our employees to supporting their
local communities and the geographical
diversification of our business has resulted in
minimal disruption to our operations.
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.
Profit and Loss
Profit: Reported and Underlying2
$million
Sales
Gross margin
Retail Products
Wholesale Products
Agency Services
Real Estate Services
Financial Services
Feed and Processing Services
Total gross margin
Costs (distribution and administration)
Underlying earnings before interest and tax
Finance Costs
Underlying profit before tax
Tax
Non-Controlling Interests
Underlying profit to shareholders
Items excluded from underlying profit
Reported profit after tax to shareholders
Underlying earnings before interest, tax, depreciation and amortisation
Underlying earnings per share (cents)
Operating and Financial Review
13
FY22
3,445.3
FY21
2,548.9
Change
896.4
310.0
73.1
147.0
61.6
44.2
16.8
652.7
(420.6)
232.1
(8.6)
223.5
(64.2)
(7.1)
152.2
10.7
162.9
279.3
97.3
222.3
61.2
141.3
50.7
41.3
12.6
529.4
(362.9)
166.5
(8.8)
157.7
(2.6)
(4.0)
151.1
(1.3)
149.8
207.4
96.7
87.7
11.9
5.7
10.9
2.9
4.2
123.3
(57.7)
65.6
0.2
65.8
(61.6)
(3.1)
1.1
12.0
13.1
71.9
0.6
Change %
35%
39%
19%
4%
21%
7%
33%
23%
(16%)
39%
2%
42%
n/m
(78%)
1%
n/m
9%
35%
1%
Items Excluded from Underlying Profit
The statutory result included 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.
$million
Profit on sale
Business closure costs
One-off costs
Unbooked tax losses
Total
Change in product margin ($million)3
FY22
22.0
(10.6)
(0.7)
-
10.7
FY21
Commentary
- Profit on sale of StockCo investment
- Cost associated with the closure of Elders Fine Foods (China)
-
Systems Modernisation costs that are one off in nature, but cannot
be capitalised
(1.3) Recognition of tax and unbooked tax losses
(1.3)
2
3
FY22 underlying earnings per share (97.3 cents per share) is impacted by the recognition of tax expense in underlying income commencing 1 October 2021. To enable consistent comparison year on year,
FY22 adjusted underlying earnings per share is 134.1 cents per share up 38.7% on FY21
Branch incentive is proportionally allocated to Retail Products and Agency based on margin contribution
AgencyServicesInterest,tax & NCIReal EstateServicesCostsFeed andProcessingServicesRetailProducts87.75.710.92.94.2(57.7)(64.5)152.2151.1WholesaleProducts11.9Product marginFinancialServicesFY21FY22 14
Elders 2022 Annual Report
Sales
Sales increased $896.4 million to $3,445.3 million (+35%) across all products. Retail and Wholesale Products represented $817.4 million or 91% of the
upside, supported by acquisitions and organic growth initiatives, as well as improved seasonal conditions and favourable market activity.
Gross Margin
Retail Products
Retail Products margin uplift was mainly due to increased sales (+$745.7 million or +44%), driven by strong demand for fertiliser and crop protection
chemicals following favourable seasonal conditions. Benefits from the backward integration strategy mostly mitigated margin pressures from higher input
costs, resulting in strong margin consistent with the prior year.
Wholesale Products
Wholesale Products margin growth was attributable to sales uplift (+$71.7 million or +22%) in line with expansion of the AIRR network and organic growth
initiatives, including investment in the member base, supported by strong demand from ongoing favourable seasonal conditions.
Agency Services
Agency Services margin uplift was largely driven by the Livestock business, which increased $4.7 million to $129.6 million (+4%). This was primarily due to
strong cattle prices with sheep prices remaining relatively flat, partially offset by lower volumes due to herd and flock rebuilding, in line with market activity.
Wool margin also grew, corresponding to recoveries in the market and re-emerging global demand.
Real Estate Services
Real Estate Services margin increase of $10.9 million (+21%) was favourable across all service offerings. Broadacre and residential sales improved on the
previous year, supported by growth in volumes, and favourable market conditions. Property management earnings increased, boosted by acquisitions in
key geographical locations.
Financial Services
Financial Services achieved margin improvement of $2.9 million (+7%), mostly across the Insurance and Livestock in Transit delivery warranty products.
Insurance increased, corresponding to growth in gross written premiums, as well as higher returns from the equity accounted investment (+21%). LIT uplift
of $0.9 million on the prior year to $8.7 million is primarily the result of higher livestock prices.
Feed and Processing Services
Feed and Processing Services margin recovered significantly on the prior year due to increasing efficiency at Killara Feedlot (+$4.2 million or +35% ). This
was supported by strong demand from domestic and export customers and high residency levels. Gross margin also benefited from cattle performance
efficiencies, supported by increasing backgrounding operations. A closure strategy has been implemented for the Elders Fine Foods business following
continuing low sales due to COVID-19 disruptions in key regions in China.
Costs
FY22 was a year of significant EBIT growth. The cost to earnings ratio improved to 64% (FY21: 69%), despite an increased cost base driven by additional
FTEs required to facilitate network growth and initiatives. Incentives were also higher in line with business out-performance.
Net Profit After Tax
Net profit after tax includes the recognition of underlying tax expense ($64.2 million), effective from 1 October 2021.
Product margin by year ($million)
222.3RetailProductsFeedand ProcessingServicesFinancialServicesReal EstateServicesAgency ServicesWholesaleProducts310.061.273.1141.3147.050.761.641.344.212.616.8050100150200250300350FY21FY22
Profit and Loss (cont.)
EBIT by Geography
$million
Wholesale Products
New South Wales
Queensland and Northern Territory
Victoria and Riverina
South Australia
Tasmania
Western Australia
International (China)
Corporate Overheads
Underlying earnings before interest and tax
Operating and Financial Review
15
FY22
37.3
52.4
34.4
80.6
43.7
6.9
63.7
(0.8)
(86.1)
232.1
FY21
Change
Change %
31.4
34.1
21.5
62.5
31.8
6.0
54.7
(1.0)
(74.5)
166.5
5.9
18.3
12.9
18.1
11.9
0.9
9.0
0.2
(11.6)
65.6
19%
54%
60%
29%
37%
15%
16%
20%
(16%)
39%
EBIT contribution from all geographies improved in FY22 as a result of organic growth initiatives, including increasing sales staff to extend the value
proposition to clients, which enabled the branch network to capitalise on strong demand arising from favourable seasonal conditions. This was supported
by contributions from strategic acquisitions and a continued focus on cost and capital efficiency.
Wholesale Products
Wholesale Products margin growth was attributable to sales uplift in line with expansion of the AIRR network and organic growth initiatives, including
investment in the member base, supported by strong demand from ongoing favourable seasonal conditions.
New South Wales
New South Wales achieved growth across all products with organic growth initiatives positioning the business to capitalise on strong demand. B&W Rural
and Titan AG sales were strong contributors, with increased demand for chemical and fertiliser products following more favourable weather conditions
across the region. Further growth was provided by buoyant livestock and wool prices and a favourable broadacre Real Estate market. Contribution from
Killara Feedlot improved due to strong demand and high residency levels.
Queensland and Northern Territory
The improvement in Queensland and Northern Territory was assisted by product diversification from the Sunfam acquisition as well as sustained high Retail
Products demand for chemical and fertiliser products, and a favourable rural Real Estate market, partially offset by lower cattle volumes resulting from herd
rebuild and a limited live export market.
Victoria and Riverina
The upside in Victoria and Riverina is the result of increased contributions from all products, with organic growth initiatives enabling the branch network to
capitalise on strong Retail Products demand, particularly for fertiliser and chemical products, with Titan AG showing significant growth. Further uplift was
provided by sustained high cattle prices and an active Real Estate market, particularly in broadacre asset sales.
South Australia
Growth in Rural Products, particularly Titan AG, fertiliser and chemical products, was the primary driver of the uplift in South Australia, reflecting the success
of both organic growth initiatives and integration of strategic acquisitions. This was supported by favourable contributions from increased Real Estate
turnover, with competition for broadacre remaining high, and from Agency Services with limited domestic cattle supply leading to higher prices.
Tasmania
Livestock agency was the primary contributor to growth in Tasmania, due to a combination of higher cattle prices and increased volumes from growth in
market share. Contribution from the retail business improved with favourable conditions driving demand across most categories.
Western Australia
Western Australia's increase was primarily driven by Retail Products, with both organic growth initiatives and strategic acquisitions positioning the business
to benefit from increased demand for retail products, notably seed and chemical products. Real Estate performed very strongly with all real estate
categories increasing on last year due to strong demand for both residential and broadacre properties, as well as higher property management turnover
and the successful integration of strategic acquisitions.
Corporate Overheads
Costs increased +$11.6 million or +16% primarily due to the investment in people to support business growth, increased variable incentives in line with
business out-performance and strategic initiatives including the Systems Modernisation project.
16
Elders 2022 Annual Report
Change in underlying profit by geography ($million)
Underlying profit by geography ($million)
Capital Management
Balance Sheet
$million
Trade and other receivables
Inventory
Livestock
Trade and other payables
Working capital
Property, plant and equipment
Right-of-use assets
Equity accounted investments and other financial assets
Intangibles
Provisions
Capital (net operating assets)
Borrowings: working capital and other facilities
Lease liabilities
Cash and cash equivalents
Net debt
Tax assets
Shareholders' equity
FY22
819.5
484.5
73.4
(752.5)
624.9
47.0
119.3
48.8
364.3
(98.2)
1,106.1
(179.2)
(123.5)
17.8
(284.9)
39.5
860.7
FY21
734.8
321.7
56.2
(667.5)
445.2
36.0
105.7
59.2
332.6
(85.0)
893.8
(154.3)
(110.7)
48.1
(216.9)
101.7
778.6
Change
Change %
84.7
162.8
17.2
(85.0)
179.7
11.0
13.6
(10.4)
31.7
(13.2)
212.3
(24.9)
(12.8)
(30.3)
(68.0)
(62.2)
82.1
12%
51%
31%
(13%)
40%
31%
13%
(18%)
10%
(16%)
24%
(16%)
(12%)
(63%)
(31%)
(61%)
11%
FY21FY22WholesaleProducts5.9151.1Underlying EBITNSWQLD& NTVIC&RIVSATASWAInternationalCorporateOverheadsInterest,Tax &NCI152.218.312.918.111.90.99.00.2(11.6)(64.5)-2002040608010031.4FY21FY2237.334.152.421.534.462.580.631.843.76.06.954.763.7(1.0)(0.8)WholesaleProductsNSWQLD & NTVIC & RIVSATASWAInternational Working Capital
$million
Retail Products
Wholesale Products
Agency Services
Real Estate Services
Financial Services
Feed and Processing Services
Other
Working capital (balance date)
Working capital (average)
Operating and Financial Review
17
FY22
401.9
99.9
58.7
0.4
9.4
83.4
(28.8)
624.9
606.5
FY21
246.1
83.8
53.8
4.1
32.3
59.7
(34.6)
445.2
487.7
Change
155.8
16.1
4.9
(3.7)
(22.9)
23.7
5.8
179.7
118.8
Change %
63%
19%
9%
(90%)
(71%)
40%
17%
40%
24%
Key movements in working capital
Working capital at balance date closed at $624.9 million, which is $179.7 million higher than the prior year, driven by 35% growth in sales in FY22:
• trade and other receivables uplift of $84.7 million is largely in line with increased Rural Products sales activity, which was underpinned by favourable
seasonal conditions and commodity price increases. Debtor days, recoverability and ageing profile have remained stable. This was partially offset by a
reduction in Financial Services receivables following the divestment of StockCo
• inventory increased $162.8 million, mostly in Rural Products due to gross price inflation on most categories (particularly crop protection chemicals and
fertiliser) and additional investment in own brand products which have longer lead times
• livestock grew $17.2 million predominantly due to higher prices at Killara Feedlot, in line with higher demand from domestic and export customers
• trade and other payables increased $85.0 million primarily driven by higher underlying commodity prices and increased inventory on hand in line with
positive outlook for 1H23
Key movements in net operating assets
Net operating assets at balance date increased a further $212.3 million to $1,106.1 million on the prior year relating to:
• intangibles (+$31.7 million or +10%), driven by goodwill on acquisitions in FY22
• right-of-use assets (+$13.6 million), due to an increased number of renegotiated lease contracts, which resets the right-of-use value
• provisions increased by $13.2 million predominantly due to increased incentives in line with business out-performance
• property, plant and equipment growth is primarily related to investment in Elders Wool Handling facilities
Net Debt
Net debt at balance date was $284.9 million, which was an increase of $68.0 million from the prior year. Average net debt increased $27.0 million
to $327.7 million primarily due to the increase in Rural Products working capital to support business growth, with higher investing cash outflows for
acquisitions, the Systems Modernisation project and construction of the Elders Wool Handling facility. This was partially offset by proceeds from the
StockCo divestment. Additional financing cash outflows relate to higher dividends paid to shareholders.
Capital management ratios
Key Ratios - rolling 12 months
Underlying return on capital (%)
Leverage ratio (average net debt to EBITDA) (times)
Interest cover ratio (EBITDA to net interest) (times)
Gearing ratio (average net debt to closing equity) (%)
FY22
26.2%
1.2
32.5
38.1%
FY21
22.5%
1.4
23.6
38.6%
Change
Change %
3.7%
(0.2)
8.9
(0.5%)
n/m
(14%)
38%
n/m
All financial debt ratios have improved on last year in line with earnings growth. There is also significant headroom in the banking covenants, which
excludes AASB16 leases impact and the debtor securitisation facility.
Undrawn facilities at 30 September 2022 were $290.0 million out of total committed facilities of $475.0 million.
Tax Assets
Tax assets decreased $62.2 million to $39.5 million, impacted by the recognition of underlying tax expense of $64.2 million, effective from 1 October 2021,
which is due to all tax losses now recorded on balance sheet.
Shareholders' Equity
Shareholders' equity increased $82.1 million to $860.7 million at September, mostly representing FY22 reported net profit of $162.9 million partially offset
by dividend distribution to shareholders of $73.7 million.
Return on Capital
Elders' underlying return on capital increased to 26.2% at 30 September 2022, an increase of 3.7% on last year. The increase is attributable to higher
earnings from all products and geographies, with very strong Rural Products demand due to favourable seasonal conditions the major contributor.
(cid:753)(cid:760)
Elders (cid:754)(cid:752)(cid:754)(cid:754) Annual Report
Cas(cid:76)
(cid:4) Flow
$million
Operating(cid:4) cash(cid:4) flows
Investing(cid:4) cash(cid:4) flows
Financing(cid:4) cash(cid:4) flows
(cid:50) et(cid:4) cas(cid:76)
(cid:74) low
Cash(cid:4) conversion(cid:4) (%)
Cas(cid:76)
(cid:4) Conversion
Operating Cash Flow
113.7
EBIT
232.1
Depreciation and Amortisation
47.2
Other Non Cash Items
50.7
Underlying Profit after Tax
Interest, Tax and Dividends
152.2
(2.2)
Cash Conversion
75%
Movements in Assets
and Liabilities
(214.1)
FY22
113.7
(45.1)
(98.7)
(30.2)
75%
FY21
142.2
(35.5)
(109.3)
(2.7)
94%
C(cid:76) ange
(28.5)
(9.6)
10.6
(27.5)
(19%)
C(cid:76) ange(cid:4) %
(20%)
(27%)
10%
n/m
n/m
Working Capital
Rural Products
(171.9)
Real Estate Services
3.7
Financial Services
22.9
Agency Services
(4.9)
Feed and Processing Services
(23.7)
Corporate and Other
(5.8)
Other Capital
(34.4)
Increase
in Receivables
(73.2)
Decrease
in Net Paid Stock
(108.0)
Provisions / Other
9.3
Decrease
in Receivables
9.2
Decrease
in Payables
(13.3)
Provisions / Other
(0.8)
Operating(cid:4) cas(cid:76)
Operating(cid:4) cash(cid:4) flow(cid:4) is(cid:4) largely(cid:4) comprised(cid:4) of(cid:4) an(cid:4) underlying(cid:4)
assets and(cid:4) liabilities(cid:4) of(cid:4) $214.1(cid:4) million:
(cid:74) low
(cid:41) BI(cid:56) DA(cid:4) ad(cid:78) usted(cid:4) for(cid:4) non(cid:4) cash(cid:4) items(cid:4) of(cid:4) $327.7(cid:4) million.(cid:4)
(cid:56) his(cid:4) is(cid:4) partially(cid:4) offset(cid:4) by(cid:4) movements(cid:4) in(cid:4)
increase(cid:4) in(cid:4) Rural(cid:4) Products(cid:4) (Retail(cid:4) and(cid:4) Wholesale(cid:4) Products)(cid:4) working(cid:4) capital(cid:4) at(cid:4) balance(cid:4) date(cid:4) of(cid:4) $171.9(cid:4) million,(cid:4) mostly(cid:4) attributable(cid:4) to(cid:4) higher(cid:4) debtors(cid:4) in(cid:4)
line(cid:4) with(cid:4) increased(cid:4) sales(cid:4) activity(cid:4) and(cid:4) increased(cid:4) commodity(cid:4) prices,(cid:4) while(cid:4) maintaining(cid:4) stable(cid:4) debtor(cid:4) days,(cid:4) recoverability(cid:4) and(cid:4) ageing(cid:4) profile
(cid:617) Agency(cid:4) Services(cid:4) working(cid:4) capital(cid:4) increase(cid:4) of(cid:4) $4.9(cid:4) million(cid:4) with(cid:4) an(cid:4) increase(cid:4) in(cid:4) receivables(cid:4) more(cid:4) than(cid:4) offsetting(cid:4) the(cid:4) increase(cid:4) in(cid:4) payables,(cid:4) primarily(cid:4) due(cid:4) to(cid:4)
the(cid:4) unfavourable(cid:4) timing(cid:4) of(cid:4) year(cid:4) end
reduction(cid:4) in(cid:4) Financial(cid:4) Services(cid:4) working(cid:4) capital(cid:4) of(cid:4) $22.9(cid:4) million(cid:4) due(cid:4) to(cid:4) a(cid:4) decrease(cid:4) in(cid:4) receivables(cid:4) following(cid:4) the(cid:4) divestment(cid:4) of(cid:4) StockCo
higher(cid:4) Feed(cid:4) and(cid:4) Processing(cid:4) Services(cid:4) working(cid:4) capital(cid:4) (+$23.7 million)(cid:4) predominantly(cid:4) due(cid:4) to(cid:4) increased(cid:4) inventory(cid:4) balances(cid:4) at(cid:4)
higher(cid:4) cattle(cid:4) prices
illara(cid:4) Feedlot,(cid:4) related(cid:4) to(cid:4)
Cash(cid:4) conversion(cid:4) was(cid:4) 75%,(cid:4) corresponding(cid:4) to(cid:4) an(cid:4) operating(cid:4) cash(cid:4) inflow(cid:4) of(cid:4) $113.7(cid:4) million(cid:4) on(cid:4) underlying(cid:4) net(cid:4) profit after(cid:4) tax(cid:4) of(cid:4) $152.2(cid:4) million.(cid:4)
to(cid:4) a(cid:4) cash(cid:4) conversion(cid:4) of(cid:4) 94%(cid:4) in(cid:4) the(cid:4) prior(cid:4) year,(cid:4) resulting(cid:4) from(cid:4) an(cid:4) inflow(cid:4) of(cid:4) $142.2(cid:4) million(cid:4) on(cid:4) underlying(cid:4) net(cid:4) profit(cid:4) of(cid:4) $151.1(cid:4) million.(cid:4)
prior(cid:4) period(cid:4) mostly(cid:4) relates(cid:4) to(cid:4) the(cid:4) increased(cid:4) net(cid:4) working(cid:4) capital(cid:4) required(cid:4) to(cid:4) support(cid:4) 39%(cid:4) growth(cid:4) in(cid:4) underlying(cid:4)
(cid:41) BI(cid:56)
.
(cid:56) his(cid:4) is(cid:4) compared(cid:4)
(cid:56) he(cid:4) movement(cid:4) on(cid:4) the(cid:4)
Working(cid:4) capital(cid:4) to(cid:4) sales(cid:4) ratio(cid:4) of(cid:4) 18%(cid:4) improved(cid:4) +2%(cid:4) on(cid:4) the(cid:4) prior(cid:4) year(cid:4) demonstrating(cid:4)
lders(cid:11)
(cid:4) efficient(cid:4) capital(cid:4) management(cid:4) framework.
Investing(cid:4) cas(cid:76)
Investing(cid:4) cash(cid:4) flow(cid:4) was(cid:4) a(cid:4) net(cid:4) outflow(cid:4) of(cid:4) $45.1(cid:4) million(cid:4) at(cid:4) balance(cid:4) date,(cid:4) the(cid:4) result(cid:4) of(cid:4) 13(cid:4) acquisitions(cid:4) during(cid:4) the(cid:4) year,(cid:4) Systems(cid:4) Modernisation(cid:4) pro(cid:78) ect(cid:4) and(cid:4)
construction(cid:4) of(cid:4) the(cid:4)
lders(cid:4) Wool(cid:4) Handling(cid:4) facility,(cid:4) partially(cid:4) offset(cid:4) by(cid:4) the(cid:4) proceeds(cid:4) from(cid:4) the(cid:4) StockCo(cid:4) divestment.
(cid:74) low
Financing(cid:4) cas(cid:76)
Financing(cid:4) cash(cid:4) flow(cid:4) was(cid:4) an(cid:4) outflow(cid:4) of(cid:4) $98.7(cid:4) million,(cid:4) primarily(cid:4) representing(cid:4) full(cid:4) year(cid:4) FY21(cid:4) and(cid:4) half(cid:4) year(cid:4) FY22(cid:4) dividends(cid:4) paid(cid:4) to(cid:4) shareholders(cid:4) of(cid:4)
$73.7(cid:4) million.
(cid:74) low
(cid:4)
(cid:4)
(cid:617)
(cid:617)
(cid:617)
(cid:47)
(cid:41)
(cid:4)
(cid:41)
(cid:4)
Operating and Financial Review
19
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 not in order of materiality.
Elders seeks to identify, analyse, evaluate, treat and monitor all risks, to maximise 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 maintains 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.
More detail on Elders’ approach to managing risk is contained in the Corporate Governance Statement on Elders’ website at
elders.com.au/corporategovernance.
Note: In line with ASX Corporate Governance Council recommendation 7.4, and the purpose of this report, 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 potential negative consequences to a listed entity if its activities adversely affect the natural environment or if its activities are adversely affected by changes
in the natural environment.
Social
The potential negative consequences to a listed entity if its activities adversely affect human society or its activities are adversely affected by changes in
human society.
Material Business Risk
Health and safety
Our strategy
Safety risk is inherent in Elders’ business activities. The safety of our people, our
customers and 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 at 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.
During FY22 Elders established Critical Risk Teams to facilitate a team based
approach to identify and implement improved controls for safety risks across
the business.
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.
Our suite of livestock handling policies and procedures will be relaunched in FY23
to ensure the highest standards of care by our people.
20
Elders 2022 Annual Report
Material Business Risk
Pandemic
Our strategy
Pandemic conditions have the potential to impact Elders’ ability to conduct
its business.
The safety of our people, customers and clients, the general community and
business continuity are at risk during such events.
Throughout COVID-19, Elders has enacted and operated its business continuity
processes, establishing a COVID-19 Committee which is comprised of executive
level business unit representitives and functional experts and is chaired by the
Company Secretary and General Counsel. This Commitee continues to meet to
this day.
While COVID-19 pandemic conditions appear to be easing in Australia,
Elders continues to monitor developments for safety, wellbeing and business
disruption impacts.
Commodity pricing
Elders has exposure to commodity price fluctuations in its Agency, Rural Products
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.
Exposures are managed through diversification of income streams by product,
channel and geography, controlled inventory levels and flexible remuneration
models for the Agency business which allow for cost base adjustments in response
to fluctuations.
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.
To limit the impact of natural weather events, Elders maintains both a geographical
spread of operations and a diverse product, channel and service range.
We maintain robust incident response and business continuity systems to manage
events arising from severe weather.
Climate change
Physical risks (such as hotter and drier conditions and more extreme weather
events) and transitional risks (such as those relating to the reduction of greenhouse
gas emissions) may have significant implications for the environment and
conditions in which Elders operates.
In 2022 Elders continued to develop its approach to managing climate related risks.
This included progress on:
• Climate change scenario analysis
• Targets relating to renewable electricity
• Developing our Scope 3 emissions profile
Biosecurity threats
Biosecurity threats to agricultural products and livestock may affect Elders’
business. An outbreak of an animal or plant disease can lead to quarantine
conditions in rural Australia, trade controls and reduce producers’ need for goods
and services or affect their ability to operate.
Food safety
Our Board has set a target of fully aligning our climate related disclosures with the
TCFD Recommendations by 30 September 2023.
Further detail on our management of climate related risks and performance on
managing energy and emissions is available in Elders' 2022 Sustainability Report.
To manage the impact, Elders has in place disease management protocols. In
addition, Elders also has a business continuity framework to respond to and
recover from the risk of business disruption.
During 2022, Elders formed a biosecurity committee to plan for the threat of
Foot and Mouth Disease and Lumpy Skin Disease. With both diseases present
in countries close to Australia, Elders considers increased preparedness for these
risks to be prudent management.
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.
This risk is managed through strict animal health controls in the feedlot. In addition,
Elders has a business continuity framework specifically for the Killara Feedlot.
Fraud and corruption
Elders is exposed to fraud, bribery and corruption risks, including in foreign markets
in which it operates.
Elders has several controls to counter these risks, including appropriate
segregation of duties, the terms of its Code of Conduct, compliance policies,
anti-fraud policy, anti-bribery and corruption policy, training throughout the
business, financial reconciliation processes, whistle-blower policy and reporting
hot-line, leave management protocols and an Internal Audit program which is
complemented by periodic reviews conducted by the external auditor.
Global and domestic economic shocks
Elders is exposed to rapid changes in economic conditions that impact prices, sales
volumes, growth and or overhead costs.
Exposures are managed through diversification of income streams by product and
geography, controlled inventory levels and flexible remuneration models for the
Agency business and appropriate debt facility management.
Operating and Financial Review
21
Material Business Risk
Counterparty risk
Our strategy
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.
This risk is managed by individual counterparty credit risk assessments,
maintaining credit policies and procedures, oversight by the Credit Committee,
debtors monitoring and reporting, trade credit insurance (major livestock exporter
and processors debtor) 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.
Geopolitical 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.
Human resource risk
Elders' people are critical to the performance and success of the organisation.
Failure to attract and retain the right people might adversely impact
organisational performance.
Elders has well established processes aligned to our objective to be an employer
of choice and attract outstanding people with the right values. Additional
processes are designed to ensure Elders utilises their individual talents to achieve
sustainable success.
Social licence risk
Elders operates in jurisdictions where the business may be affected by changes
to stakeholder expectations which and require the business to modify its
activities. This includes expectations relating to human rights, animal welfare, the
environment and product and services mix.
Elders controls consequential exposure to this risk through continuous monitoring
of social trends that have the potential to impact the business. Various resources,
including our sustainability team, are responsible for identifying, analysing
and responding to social shifts. The Board has oversight over activities in
all jurisdictions.
Cyber risk
Elders' operations rely on information technology solutions which expose us to the
threat of cyber disruption and loss of data.
Supply chain risk
Elders maintains a strong focus on our information technology and data security
capabilities and we continue to implement and embed stronger security for our IT
infrastructure on a continuous improvement basis.
During 2022, Elders has continued to invest in cyber security and established a
data governance committee to further enhance data security and privacy controls
within the organisation.
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.
This operational risk continues to be a strong focus in 2022 in light of some
continued pandemic impacts, global volatility arising from geopolitical and
economic factors and the need to ensure supply chain resiliency.
Elders continues to manage its Rural Products supply chain risks and has
established a dedicated supply chain team to reduce supply chain vulnerability.
REVIEW OF OPERATIONS2022 (cid:754)(cid:756)
Elders (cid:754)(cid:752)(cid:754)(cid:754) Annual Report
200
AGRONOMISTS
Nationwide
756k
USERS
ELDERSRURAL.COM.AU
Nationwide
75k
FOLLOWERS ON
SOCIAL MEDIA
Across Elders national accounts on all platforms
9.6m
USERS ON
ELDERS WEATHER
www.eldersweather.com.au and app available on mobile devices
Review of Operations
(cid:754)(cid:757)
OPERATING
HIGHLIGHTS
Retail
Products
Sales
$2.4b
Wholesale
Products
Sales
$0.4b
Up 44% on FY21 Results
Up 22% on FY21 Results
Head of
Cattle Sold
1.4m
Head of
Sheep Sold
9.0m
Down 12% on FY21 Results
Down 3% on FY21 Results
Farmland
Sales
Turnover
$2.5b
Residential
Sales
Turnover
$1.8b
Up 54% on FY21 Results
Up 21% on FY21 Results
Gross
Written
Premiums
$1.0b
Killara
Head of
Cattle Sold
67k
Up 12% on FY21 Results
Up 12% on FY21 Results
26
Elders 2022 Annual Report
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.
Our Retail Products division supplies these rural products to primary producers and corporate farm customers through 232 Elders owned
retail stores. Additionally, we also provide professional production and cropping advice with 200 agronomists nationwide, including
additional specialists operating through Elders Technical Services.
Elders also operates a Wholesale Products business supplying independently owned member stores, utilising the AIRR branding. AIRR also
provides retail services through corporate owned stores and the Tuckers Pet and Produce brand to independently owned member stores.
Our backward integration strategy is facilitated through various brands.
Performance
Rural Products margin increased $99.6 million (35%) to $383.1 million, of which $87.7 million is attributable to Retail Products. This uplift in Retail
Products is largely driven by sales activity (up 44%), with favourable seasonal conditions strengthening cropping demand. Retail Products gross margin
percentage was maintained year on year, supported by our backward integration strategy, preferred supplier ranging and focus on margin management.
Titan AG also contributed a further $15.1 million of manufacturing margin year on year, supported by a 32% increase in sales through the Elders network.
Wholesale Products margin is up $11.9 million (19%) to $73.1 million, benefiting from sales growth of 22% due to growth in independent member sales,
higher private label sales and increased wholesale business via AIRR's distribution centres.
Strategy
To deliver profitable growth through execution of our backward integration strategy, capturing more gross margin through optimised pricing and supply
chain efficiency, and winning market share through customer centricity, sales force effectiveness and strategic acquisitions.
Strategy
Achievement
Plan
Expand own brand
product segment
• Increased own brand share of sales across most major
• Continue to expand own brand product portfolio through new
product categories
product launches
• Launched new home brand products in the crop protection, seed,
• Expand the innovation function and identify strategic opportunities
fertiliser and animal health ranges
• Re-launched own brand 'EPG Seed'
Margin management and
efficiency improvements
• Maintained average margins in a challenging market with supply
• Continued improvement in margin management sophistication
constraints and rising cost of inputs
through technology solutions
• Established a new national supply chain function to deliver supply
• Develop an enhanced pricing strategy
chain efficiencies and support risk management
Customer focus and
expanded store footprint
• Invested in revenue generating roles and delivered sales training to
• Continue to fill geographic gaps with strategic acquisitions and
200+ front line employees
greenfield developments
• Added nine new retail locations, four through acquisitions and five
• Create a further 40+ sales facing roles in the network to support
greenfield developments across the country
organic growth
Growth of
Wholesale Products
• Increased the warehouse footprint with a new warehouse and
• Continue to increase the warehouse footprint by opening a new
distribution centre in Tasmania
warehouse in Central Queensland
• Successfully delivered procurement synergies and enhanced
• Build on the private label brand position through the launch of
maturity of sales through the Elders network
new products
• Grew private label brand share in wholesale and retail networks
• Filled key strategic gaps with a new corporate store and two
• Expand retail footprint through strategic acquisitions in key areas
• Grow the member base
successful acquisitions
Rural Products margin ($million)
Margin by product
Margin split by geography
383.1
383.1
283.5
283.5
219.5
219.5
148.8
148.8
152.9
152.9
66%
Farm
Supplies
19%
Wholesale
Products
15%
Fertiliser
QLD & NTNSWVIC & RIVTASSAWA16%22%27%3%13%19% Review of Operations
27
Agency Services
Elders provides a range of marketing options for livestock, wool, and grain. 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 $5.7 million (4%) to $147.0 million, which is mostly attributable to Livestock (up $4.7 million). This is due to strong
livestock prices for both cattle and sheep, due to limited domestic supply. This is however partially offset by improved seasonal conditions driving herd
and flock rebuild and Foot and Mouth Disease concerns, which has seen volumes reduce for both cattle and sheep.
Wool margin is favourable $0.5 million (3%) to last year, as the wool market stabilised following a strong recovery in FY21. Volumes were marginally lower
than prior year, however this was offset by the Eastern Market Indicator (EMI) averaging higher than prior year .
Strategy
To deliver profitable growth of the Agency Services portfolio through business improvement, recruitment and acquisition for our Livestock and Wool
businesses and through focused growth of our investments in AuctionsPlus and CGX.
Strategy
Achievement
Plan
Operating model
• Business efficiency and growth through implementation of
• Continued investment in Livestock, Wool and Grain product
initiatives, including digitisation of processes
development to improve and expand offering
• Further growth in AuctionsPlus channel in livestock and
machinery transactions
• Record year for CGX for volumes sold through the platform
• Launched Elders Wool Handling, with operations set to commence
• Further footprint expansion through targeted agency acquisitions
• Continue to grow listings through AuctionsPlus
• Leverage 30% shareholding in CGX to improve grain value
proposition and grow revenue
in FY23
People
• Relaunched livestock trainee program
• Implemented national livestock training program
• Selective recruitment of Livestock and Wool personnel
• Geographical expansion through recruitment of high
performing people
Agency Services margin ($ million) 1
Margin by product
Margin split by geography
119.6119.6
116.5
116.5
127.2
127.2
141.3
141.3
147.0
147.0
FY18
FY19
FY20
FY21
FY22
1 Includes equity earnings from investments.
88%
Livestock
11%
Wool
1%
Grain
16%12%33%4%19%16%QLD & NTNSWVIC & RIVTASSAWA 28
Elders 2022 Annual Report
Real Estate Services
Elders’ Real Estate Services include company owned rural agencies 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 increased by $10.9 million (21%) to $61.6 million compared to last year, with sales turnover up across most service offerings.
Margin from company owned residential and farmland agency has contributed most of the uplift due to ongoing network expansion, high demand and
increased prices. Growth was achieved across most geographies.
Property management has also outperformed last year as a result of ongoing rent roll growth. Key agent retention and net growth in agent numbers has
been maintained at strong levels through delivery of a compelling attraction and retention proposition.
Strategy
To deliver profitable growth of the Real Estate Services portfolio through 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, residential
primarily focused at brand enhancement, digital strategy, system
modernisation and people development
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 in our property
• Positioned the business as a transaction adviser of choice in
management business
corporate agriculture and facilitated numerous on and off-market
investment scale farmland transactions
• Implemented Console Cloud property management platform to
• Leverage the new CRM systems for agency operations, including
use of data and driving cross referral opportunities
• Continued enhancement of digital marketing and lead
drive efficiency improvement in rent roll operations
generation activity
• Implemented AgentBox, an industry leading CRM, across company
owned and franchise network
People
• Positioned key personnel as leading transaction advisers for
• Ongoing recruitment of high performing real estate sales
corporate scale transactions
• Maintained a strong attraction and retention proposition
• Retained high performing sales agents
• Significant increase in participation levels in a modern learning
and development program
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 life cycle service offering
Real Estate Services margin ($ million)
Margin by product
Margin split by geography
61.661.6
50.750.7
33.633.6
34.334.3
38.238.2
FY18
FY19
FY20
FY21
FY22
71%
Agency
29%
Property
Management
24%12%17%1%17%29%QLD & NTNSWVIC & RIVTASSAWA
Review of Operations
29
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 for banking, StockCo for 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 to help our
customers grow their business and manage cash flow and risk.
Performance
Financial Services margin of $44.2 million improved $2.9 million (7%) on last year. This uplift is largely contributed by our Insurance business (up
$1.9 million), driven by increased gross written premiums through new insurance lines and locations. Growth in our Livestock in Transit (LIT) Delivery
Warranty and new livestock funding products has also contributed to the overall uplift.
Strategy
To deliver profitable growth of the Financial Services portfolio through business improvement, product development and upstream investment in our
services business.
Strategy
Achievement
Plan
Deeper, more
productive partnerships
• Launched engagement program with Rural Bank to further enhance
• Building on existing and new relationships with Rural Bank
local relationships and drive growth
• Sale of share in StockCo and new distribution agreement with
new owner
staff located in Elders' branches to bring finance solutions to
Elders' clients
• Joint strategic marketing and referral campaigns with Elders
• Continued service and distribution of Rural Banking products
Insurance to grow gross written premiums
Expand Elders issued
product offerings
• Further growth in Livestock Delivery Warranty associated with
• Further development of new and existing on-balance sheet finance
Elders’ Agency Services business
products to improve efficiency and client experience
• Increased on-balance sheet lending capability though
• Grow Livestock Delivery Warranty revenue through increased
product enhancement
uptake and further digitisation
• Expand Elders' finance footprint and capability through recruitment
and training
Financial Services margin ($ million)1
Margin by product
Margin split by geography
38.338.3
33.433.4
37.137.1
41.341.3
44.244.2
FY18
FY19
FY20
FY21
FY22
1 Includes equity earnings from investments.
38%
Agri Finance
42%
Insurance
20%
LIT Delivery
Warranty
15%16%29%2%19%19%QLD & NTNSWVIC & RIVTASSAWA
30
Elders 2022 Annual Report
Feed and Processing Services
In Australia, Elders operates Killara Feedlot, a beef cattle feedlot near Tamworth in New South Wales. Elders also imports, processes and
distributes premium Australian meat in China.
Performance
Killara Feedlot margin is favourable to last year $4.2 million improving 35% to $16.1 million, with strong demand from domestic and export customers
driving increased sales across all aspects of the business. Excellent seasonal conditions and higher residency levels have contributed to margin
improvement while growth in our backgrounding operations via early purchasing of young stock continues to support the supply chain. Further investment
in Killara's farming operations and capital expenditure has also seen improved efficiencies and sustainability across the business.
Elders Fine Foods contributed gross margin of $0.7 million, which is in line with last year, as ongoing COVID-19 disruptions impact sales in China. A closure
plan has been formalised and the business will conduct an orderly wind down of operations in FY23.
Strategy
To deliver continuous improvement in EBIT and ROC for all businesses with active portfolio composition management.
Strategy
Achievement
Plan
Grow Killara Feedlot
• Continued investment in capital improvements to drive high
utilisation and efficiencies including installation of a 500-kilowatt
solar farm due for completion in late 2022
• Steady cattle supply chain management via backgrounding and
external facilities
• Extensive capital investment in new feeding technologies
• Continue staged roll out of centre pivot irrigation systems for the
production of corn silage to be used as part of cattle feeding at the
feedlot and backgrounding operations
• Explore opportunities for carbon farming and improved soil
• Enhanced irrigated farming operations to better utilise farming
nutrient and moisture management practices
country and available effluent and licensed bore water
• Undertake full carbon footprint evaluation to account for on-site
• Diversified customer portfolio
• Continued improvements in animal health outcomes through pre
carbon sequestration
• Finalise commission of new feed mill
vaccination and backgrounding strategy
• World first feedlot trial work in the early detection of bovine
respiratory disease
• Antimicrobial stewardship plan to reduce antibiotic use in cattle
Closure of Elders Fine
Foods in FY23
• Contained losses despite market conditions severely impacted by
• Finalise closure of trading operations
COVID -19
Feed and Processing Services margin
($ million)
Margin by product
14.214.2
15.015.0
15.515.5
16.816.8
12.612.6
FY18
FY19
FY20
FY21
FY22
96%
Killara
4%
Elders Fine
Foods
Review of Operations
31
Outlook
Elders remains committed
to Australian agriculture and
achieving its Eight Point
Plan strategy.
Several regional
communities have been
impacted by recent flood
events across Eastern
Australia. With the water yet
to recede at the time of
writing, the full impact of
these events on the current
winter crop harvest and
summer crop planting is yet
to be determined. Elders has
enacted its hardship policy
to support clients in need.
Rural Products
• ABARES summer crop outlook, released
in early September 2022, predicted a
positive summer crop outlook, with area
planted forecast to rise 2% to 1.6 million
hectares1, which was expected to drive
strong demand in the first half for cropping
inputs, particularly agricultural chemicals,
fertiliser and seed. Areas of Queensland,
New South Wales, Victoria and South
Australia have since experienced continued
wet weather and flooding which has created
significant uncertainty regarding summer
crop production
• Current 2022-23 winter crop production of
55.5 million tonnes was forecast by ABARES,1
which supported continued optimism for
the following winter crop season next year,
however the impact of unseasonal wet
weather across parts of the East coast may
impact the 2022 winter crop harvest
• With the water yet to recede at the time of
writing, the full impact of these events on the
current winter crop harvest and summer crop
planting is yet to be determined
• Benefits from strategic bolt-on acquisitions
to provide further growth in FY23
Agency Services
• Prices for beef are expected to fall in
2023 due to easing of restocking demand,
however will remain historically elevated due
to supplies remaining relatively tight2
• Sheep prices are expected to fall in 2022-23,
due to reduced restocking demand, but are
expected to remain high. Export volumes are
expected to increase in volume supported
by continuing strong demand from United
States and China2
• Global demand for wool is expected to
dampen due to increases in inflation and
interest rates in major economies. The gross
value of wool production is expected to
remain unchanged as increased production
volumes are offset by a decrease in Eastern
Market Indicator in 2022-232
• The Australian agriculture sector has taken
action to mitigate the risk of outbreak of
Foot and Mouth Disease and Lumpy Skin
Disease, however we remain alert to any
potential outbreak
Real Estate Services
• Favourable commodity price outlook and
good seasonal conditions are expected
to continue to drive strong demand
for farmland properties in the short to
medium term
• Demand for residential properties is
expected to normalise due to inflation
control measures, however the strong
demand for rental properties is likely
to continue
• Property management earnings are expected
to increase due to rent roll portfolio
acquisitions completed in FY22
Financial Services
• Favourable market conditions to support
demand for our Insurance and other Agri
Finance offerings
1 Department of Agriculture, Fisheries and Forestry, ABARES Australian Crop Report: September edition
2 Department of Agriculture, Fisheries and Forestry, ABARES Agricultural forecasts and outlook: September edition
• Continued uptake of our livestock funding
product forecast to provide margin upside
• Our Livestock in Transit delivery warranty
product expected to continue to grow in line
with higher livestock turnover
Feed and Processing Services
• Some headwinds expected in first half FY23
regarding higher cost of goods, in particular
the premium branded beef programs
• Supply chain continues to be supported
by our backgrounding and irrigated farming
operations to ensure high utilisation and
throughput at the feedlot
• Killara continues to diversify its supply to
include the growing grass fed segment
• Investment in environmentally sustainable
growth initiatives to meet community and
consumer expectations
Costs and Capital
• Maintain focus on cost to earn through
the cycles
• General inflation, footprint and acquisition
growth, continued investment in
Sustainability and our Eight Point Plan,
investment in Elders Wool Handling and the
first phases of our System Modernisation
program will temporarily increase our
cost base prior to benefits from Systems
Modernisation and Elders Wool Handling
being achieved
• Interest rates are expected to stabilise in
2023, following successive increases in 2022
External impacts
There are a number of current events which
may have an impact on global and domestic
markets, input prices, supply chain and geo
political environments:
• Widespread wet weather in key
cropping areas
• Russia and Ukraine conflict
• COVID-19
32
Elders 2022 Annual Report
Trust in advisors
the key to success
for rice growers
That element of trust is the bedrock of
Brooke and Nev’s relationship with Shaun,
who has helped improve their operations to
such a standard that the couple recently
won SunRice Grower of the Year Award,
an accolade measured against a grower’s
production and agronomy quality, water use,
efficiency, innovation and technology use,
business management, and sustainability.
With their agronomist Shaun’s characteristic
straight-talking advice, they’ve reached the top
of their farming game.
“The first time Shaun came out, and I still
remember the day, he sat at our kitchen table
and said, ‘if you do what I say when I say it, we
can grow good crops together’” laughs Brooke.
“We were on-board, and it didn’t take long
to realise that when he says something it’s
for a reason. If we didn’t have Shaun, we
wouldn’t get the results that we get. I don’t
know a farmer who isn’t happy with him as
their agronomist.”
In farming, where the lines between personal
and business are blurred, to be considered part
of your clients’ family, not just their farm, is
high praise.
“At the end of the day, it’s our livelihood that’s
in Shaun’s hands,” said Brooke.
“We see his passion, he wears his heart on his
sleeve, and in a bad year he really feels it.
He really is part of the family.”
“We’ve invested in pivots for low or zero water
allocation years to be able to grow crops
that keep us going. We have a self-propelled
sprayer with an ExactApplyTM nozzle control
system to deal with weed resistance in the
corner paddocks, so we can deal with problems
now and avoid issues in years to come,”
said Brooke.
“When we returned to the farm, it was during
the ‘millennial drought’ and we quickly realised
that we needed to get any loamy country as
close by as we could to remain viable while we
didn't have water.
We were diligent in putting money back into the
soil to bring it back to health, as well as dealing
with major weed control issues.”
Shaun said the Hollins’ competitive advantage
is being open to change.
“Nev and Brooke are always open to putting
ideas on the table and weighing them up,”
said Shaun.
“Everything they grow complements the rest of
the operation and they’re always looking for
ways to use water more efficiently, get more
value per megalitre, whether that’s through
growing rice close to the main channel or re
lasering the paddocks.
They’ve had the ability to adapt and trust the
advisors around them who want to help, and
that’s made them able to grow like they have.”
The Hollinses use Elders for their agronomy,
livestock services, merchandise, insurance, and
wool brokering. Brooke couldn’t be clearer that
they wouldn’t be where they are today if it
wasn’t for the Elders team and their family
around them.
“We can’t fault the service that we get from
Elders,” she said.
“We get a lot of advice; we use the whole team,
pull them together and trust them, and that’s
how we’ve been able to get where we are.”
When Elders’ agronomist
Shaun Krahnert rolled up
the Hollins’ driveway to
introduce himself in 2007,
little did they know that
he would become such
an important part of
their farming business. He
became a friend whose
advice they would rely on
and eventually someone
they would consider part of
the family.
Brooke and Nev Hollins run a 4115ha mixed
farming operation in Burraboi NSW, a blink
and-you-miss-it town 30km from Barham. They
began farming an initial plot from Nev’s Dad
whose family were the first in the district to
trial and grow rice crops 80 years previously in
neighbouring town, Wakool.
Since taking on their first property, Brooke and
Nev have managed to more than triple their
existing landholdings, buying land where they
could improve the soil with pea and vetch
and use it to future-proof their business in
drought years.
The Hollinses now grow winter and summer
crops, ensuring they have rotations in their
cropping program to maintain the health of the
soil, and run 2000 merino sheep.
“We look at each other at the end of every year
and say, ‘no wonder we’re exhausted’. It’s hard
work but you’ve got to have diversity and a few
different strings in your bow,” said Brooke.
“We are very mindful that we could grow crops
in the same paddocks every year and get
average results, but that’s not us, and if we do,
we’re not going to be farming in 50 years.”
This focus on the sustainability of their
enterprise is a priority for the couple, whose
son has a keen interest in carrying on farming
after school.
Trust in advisors the key to success
33
“We can’t fault the service
that we get from Elders,”
Brooke Hollins
Producer, Burraboi NSW
CLIMATE TARGETS
TO REDUCE GREENHOUSE
GAS EMISSIONS1
TARGET
2025
100% renewable electricity
in all Australian sites by 2025
2030
50% reduction in Scope 1 and
2 emissions intensity
(tCO2e/$m revenue) by 2030,
against a baseline year of 20212
FY22 PROGRESS
Target achieved through the
Target achieved through the
procurement and retirement
of Large-scale Generation
Certificates (LGCs)
500kW solar farm in development
Progressive increase in onsite solar
generation from FY
generation from FY23
18.8 tCO2e/$m revenue in 2022
Down from 23.86 tCO2e in 2021
Achieved through record revenue, LGC
procurement and reduced equipment
fuel use at Killara Feedlot
2050
Net zero Scope 1 and 2
emissions by 2050
64,772 tCO₂e this year
(Scope 1 and 2)
Up from 60,828 tCO2e in 2021
1 Targets are based on Elders’ financial year ending 30 September.
1 1 1 Targets are based on Elders’ financial year ending 30 September.
2 Subject to commercially viable technology being available to address feedlot cattle emissions.
SUSTAINABILITY
PERFORMANCE
50%
Board positions held by women
17%
Women in senior management
Improvement programs in place
6
12.6
Lost Time Injuries (up from 3 in FY21)
$3.3m invested in safety capital expenditure
TRIFR
Down from 15.1 in FY21
$2.69m
Donations and sponsorships
1,000+
Local community sports teams
and events sponsored
41,000+
APCO
Agricultural chemical containers collected
for reuse or recycling
Joined the Australian Packaging Covenant
Organisation and committed to
reducing packaging waste
36
Elders 2022 Annual Report
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 Material Topics
Our sustainability program includes the following topics, which are regularly reviewed to ensure we continue to address the issues our stakeholders
consider to be material to our business.
Topic
Focus
Community impact
and investment
Supporting local communities and managing community expectations and relations
Health and safety
Maintaining our commitment to providing a safe work environment
Employee attraction
and retention
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
Climate change
Addressing the risks and opportunities presented by climate change mitigation and adaptation
Water availability
Addressing the issue of water availability to the communities in which Elders operates and its impact on the operation and performance of
Elders’ business
Animal welfare
Ensuring the well-being 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
Innovation
and technology
Demonstrating our investment in innovation and technology in the agriculture industry
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 current Eight Point Plan, which sets out Elders' key strategic priorities from 1 October 2020 through 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.
Full details of our sustainability program and actions during FY22 can be found in our Sustainability Report, available at our Sustainability Centre.
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 continue to face 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 our role 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
Sponsorships and Donations (numbers rounded)
To local communities - including the Regional Australia Institute, rural schools, clubs and more than 1,000 local community sports teams and events.
To industry and innovation - including major field days, national growers associations, industry bodies and several grass roots organisations.
To health and well-being - including RFDS, Dolly's Dream and Beyond Blue and local fundraising events for local and national causes.
$2.69m
$1.25m
$1.19m
$0.2m
Sustainability
37
Climate change
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.
In 2022, a change in Federal Government saw Australia reaffirming its commitment to net zero emissions by 2050 and announcing more ambitious interim
targets to reduce greenhouse gas emissions by 2030.
Reducing emissions in the agriculture sector presents some challenges and many opportunities to improve productivity and resilience while benefiting the
environment. 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. We also acknowledge our own responsibility to address climate change
and in particular, manage and reduce greenhouse gas emissions associated with our own operations.
This year, we completed qualitative climate change scenario analysis. Ahead of our 2023 ambitions, we also identified and quantified select categories
of our Scope 3 emissions, and made progress against our emissions reductions targets, achieving 100% renewable electricity in all our Australian sites
through the procurement and retirement of Large-scale Generation Certificates.
Elders' staged action plan for full alignment with the TCFD Recommendations by 30 September 2023
Governance
Risk Management
Strategy
Comprehensive disclosure
of our climate-risk
management process, roles
and responsibilities.
Initiated internal and
independent review of
climate-related risks
and opportunities.
Detailed our climate-risk
assessment methodology
and disclosed our climate
related risks and current
mitigation actions.
FY20
FY21
FY22
FY23
Detailed the role risk plays in our
decision making.
Identified climate
related opportunities.
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.
Metrics & Targets
Reported our Scope
1 and 2 emissions
from energy use and
feedlot cattle.
Reported our Scope
1 and 2 emissions,
including emissions from
feedlot waste and
fertiliser management.
Develop our Scope 3
emissions profile.
Set climate related
targets and metrics.
Report on performance
against targets.
Progress against our targets
Target
Performance
100% renewable electricity in all Australian sites by 2025
• Target achieved through LGC procurement and retirement
• 500kW solar farm in development
• Progressive increase in onsite solar generation from FY23
50% reduction in Scope 1 and 2 emissions intensity (tCO2e/$m revenue) by
2030, against a baseline year of 2021 (subject to commercially viable technology
being available to address feedlot cattle emissions)
• 2021: 23.86tCO2e / $m revenue
• 2022: 18.8tCO2e / $m revenue
• Achieved through record revenue, LGC procurement and reduced equipment fuel
Net zero Scope 1 and 2 emissions by 2050
use at Killara Feedlot
• 64,772 tCO2e in 2022
• Up from 60,828 tCO2e in 2021
Our targets apply to the sites over which Elders has operational control and are based on our financial year ending 30 September. Full details on our
emissions profile, targets and strategy to reduce emissions are set out in our Sustainability Report.
Our strategy to achieve our emissions reduction targets involves investment in renewable energy, technology and innovation to improve energy efficiency
and reduce greenhouse gas emissions. We are particularly reliant on innovation to support a greater uptake of electric and hybrid vehicles in our fleet, and
a reduction in enteric emissions from our feedlot cattle. In the coming years, we aim to partner with industry on the development and implementation of
technology to tackle the carbon footprint of our cattle. We also recognise that carbon offsets may have a role to play. We will further develop our strategy
and position on carbon offsets in the coming years and communicate this in future annual and sustainability reports. We will aim to reduce and eliminate
our emissions where possible and commercially sensible, without the use of carbon offsets in the first instance.
38
Elders 2022 Annual Report
Our emissions profile1
Scope 1 emissions - Source
Killara Feedlot cattle
Fleet transport fuel - diesel
Killara Feedlot equipment fuel - diesel and gasoline
Other (including fleet transport fuel (gasoline), forklift fuel (LPG) and
natural gas)
Total: 64,772 tCO2e
Scope 2 emissions - Source
Electricity - Australian sites
tCO2e
0
Electricity - Elders Fine Foods, China
385
0%
1%
tCO2e
44,826
17,450
1,418
693
69%
27%
2%
1%
1
Between 1 July 2021 and 30 June 2022.
Sustainability
(cid:755)(cid:761)
40
Elders 2022 Annual Report
Success for Killara
with investment
in sustainability
The initiatives at Killara are part of Elders’ wider
commitment to sustainability, as outlined in
Elders Eight Point Plan.
Mark Allison, Elders’ Managing Director and
CEO said he is pleased to see the initiatives
at Killara come to life.
“Sustainability is a core objective of Elders as
we continue to operate, grow and support our
people and communities,” he said.
“The efforts being made by our team at
Killara are proof of this; Elders prioritises and
celebrates responsible operations.”
Andrew said he is proud of the leadership
that Killara is taking regarding sustainability,
explaining that the health of the business is
much more than just its profitability.
“The balance sheet of the business is now
healthier and more financially sustainable
which is great news for all of our stakeholders,”
he said.
“But the real health of the business is more
than the financial returns; it needs to include
the health of the environment, the animals
and the engagement of the staff, to ensure
that those financial returns are sustainable into
the future.”
A solar farm, an
antimicrobial stewardship
plan and world-first
disease detection trials
are just some of the
measures Elders Killara is
implementing to prioritise
sustainable operations.
On the outskirts of Quirindi, New South Wales,
lies Killara Feedlot, a 20,000-head beef cattle
feedlot operated by Elders.
Killara is committed to supplying high-quality
beef products, while operating sustainably.
The initiatives in place at Killara are wide
ranging, and include measures based in both
animal and environmental welfare and best
industry practices.
Andrew Talbot, General Manager of Killara,
explained that investing in new technology and
adopting sustainable practices is crucial for
the long-term health of the feedlot and just
good business.
“Prioritising environmental and social factors
results in better operations overall,” he said.
“As staff safety and community engagement
improve and our environment is better looked
after, our cattle become healthier and happier.”
One of the most exciting developments is
Killara’s involvement in a world-first trial for the
early detection of Bovine Respiratory Disease
(BRD). Working alongside industry bodies
and international universities, it is hoped the
findings from the trial will deliver improvements
in drug efficacy and animal health across
the globe.
Similarly, autogenous vaccine development,
targeting the bacteria unique to BRD at Killara
has seen vaccines approved and in use at the
feedlot. Such vaccines are not yet commercially
available in Australia, placing Killara in a unique
position to reduce illness and mortality rates
in cattle. Whilst in the early stages, there are
positive early signs.
The feedlot has an antimicrobial stewardship
plan in place, which is part of the facility’s
ambition to reduce antibiotic use in cattle.
Killara works closely with cattle suppliers as
part of this plan, ensuring cattle are best
prepared for feedlot entry, with strong immune
response capabilities. The trends in recent
years for animal health are positive, with
excellent gains being recorded and mortality
rates from BRD falling from 1% to 0.5% over the
past five years.
There are further plans for milling operations
at the feedlot to run predominantly on solar
power, which is set to be sourced on-site from
a 500-kilowatt solar farm, due for completion in
late 2022.
Andrew explained this will reduce Killara’s
dependence on electricity from the grid
produced by fossil fuels.
“The solar farm is expected to supply most of
the electricity used by our mill and potentially
export an additional 200MWh of renewable
electricity,” he said.
The removal of fossil fuels to power the
processing mill at Killara is also underway.
“We are exploring other green energy sources
such as hydrogen to power the plant in a clean
and sustainable way,” Andrew said.
Other initiatives include the establishment of
a centre pivot irrigation system to maximise
water use efficiency, and a continued focus
on managing nutrient and moisture levels in
soil to optimise soil health and productivity.
In the coming months, Killara will be focusing
on further developing its understanding of its
current soil carbon baseline at Killara and its
total farm carbon footprint, to identify more
opportunities for improvement.
Success for Killara
41
“The real health of the
business is more than the
financial returns; it needs
to include the health of
the environment, the animals
and the engagement of
the staff, to ensure that
those financial returns are
sustainable into the future.”
Andrew Talbot
General Manager Killara, Elders
DIRECTORS’REPORT2022 (cid:756)(cid:756)
Elders (cid:754)(cid:752)(cid:754)(cid:754) Annual Report
Directors’
Report
r(cid:4) Ian(cid:4)
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ilton
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Appointed(cid:4) Chair(cid:4) on(cid:4) 11(cid:4) September 2019(cid:4) and(cid:4) Non(cid:112)
(cid:41) xecutive(cid:4) Director(cid:4) since(cid:4) 2014,(cid:4) Mr(cid:4) Wilton(cid:4) is(cid:4) also(cid:4) Chair(cid:4)
(appointed 11(cid:4) September 2019) of(cid:4) the(cid:4) Work(cid:4) Health(cid:4)
and(cid:4) Safety(cid:4) Committee(cid:4) and(cid:4) Nomination(cid:4) and(cid:4) Prudential(cid:4)
Committee.(cid:4) Mr(cid:4) Wilton(cid:4) is(cid:4) a(cid:4) member(cid:4) of(cid:4) the(cid:4) Audit,(cid:4) Risk(cid:4)
and(cid:4) Compliance(cid:4) Committee(cid:4) (former(cid:4) Chair)(cid:4) and(cid:4) the(cid:4)
Remuneration(cid:4) and(cid:4) Human(cid:4) Resources(cid:4) Committee.
Mr(cid:4) Wilton(cid:4) is(cid:4) an(cid:4) experienced(cid:4) non-executive(cid:4) director(cid:4) and(cid:4)
former(cid:4) senior(cid:4) executive(cid:4) with(cid:4) extensive(cid:4) knowledge(cid:4) of(cid:4)
the(cid:4) agricultural(cid:4) sector.(cid:4) He(cid:4) has(cid:4) held(cid:4) Chief(cid:4) Financial(cid:4)
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lders(cid:4)
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Mr(cid:4) Allison(cid:4)
(cid:48) imited(cid:4) as(cid:4) a(cid:4) Non-(cid:41) xecutive(cid:4)
Director in(cid:4) December(cid:4) 2009,(cid:4) served(cid:4) as(cid:4) Chairman(cid:4) and(cid:4)
(cid:41) xecutive(cid:4) Chairman,(cid:4) before(cid:4) being(cid:4) appointed(cid:4) Managing(cid:4)
Director(cid:4) and(cid:4) Chief(cid:4)
(cid:41) xecutive(cid:4) Officer(cid:4) in(cid:4) May(cid:4) 2014.
Mr(cid:4) Allison’s(cid:4) agribusiness(cid:4) career(cid:4) of(cid:4) more(cid:4) than(cid:4)
40(cid:4) years(cid:4) spans(cid:4) technical,(cid:4) manufacturing,(cid:4) supply(cid:4)
and(cid:4) distribution(cid:4) roles(cid:4) and(cid:4) business.(cid:4) Previous(cid:4) roles(cid:4)
include(cid:4) Managing(cid:4) Director/C(cid:41) O(cid:4) of(cid:4)
(cid:48) imited,(cid:4) Jeminex(cid:4)
(cid:48) andmark(cid:4)
CropCare(cid:4) Australasia(cid:4) Pty(cid:4)
Incitec(cid:4) Fertilisers.
rowers(cid:4)
rain(cid:43)
(cid:48) td,(cid:4) Wesfarmers(cid:4)
(cid:48) imited(cid:4) and(cid:4)
(cid:43) eneral(cid:4) Manger(cid:4) of(cid:4)
(cid:48) imited,(cid:4) Farmo(cid:94)
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Non-(cid:41) xecutive(cid:4) Director(cid:4) since(cid:4) September(cid:4) 2015,(cid:4) Ms(cid:4)
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Committee(cid:4) (appointed(cid:4) 11(cid:4) September 2019) and(cid:4)
a(cid:4) member(cid:4) of(cid:4) the(cid:4) Remuneration(cid:4) and(cid:4) Human(cid:4)
Resources(cid:4) Committee(cid:4) (former(cid:4) Chair),(cid:4) the(cid:4) Work(cid:4) Health(cid:4)
and(cid:4) Safety(cid:4) Committee(cid:4) and(cid:4) the(cid:4) Nomination(cid:4) and(cid:4)
Prudential(cid:4) Committee.
Ms(cid:4) Clubb(cid:4) is(cid:4) an(cid:4) experienced(cid:4) Non-(cid:41) xecutive(cid:4) Director,(cid:4)
a(cid:4) Chartered(cid:4) Accountant(cid:4) and(cid:4) Fellow(cid:4) of(cid:4) the(cid:4) Finance(cid:4)
and(cid:4) Securities(cid:4) Institute(cid:4) of(cid:4) Australia.(cid:4) She(cid:4) has(cid:4) over(cid:4) 20
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services(cid:4) industry,(cid:4) working(cid:4) for(cid:4) organisations(cid:4) including(cid:4)
AMP(cid:4)
(cid:48) imited(cid:4) and(cid:4) Citibank(cid:4)
(cid:48) imited.
Officer(cid:4) positions(cid:4) with(cid:4) Ridley(cid:4) Corporation(cid:4)
Sugar(cid:4) and(cid:4)
Chief(cid:4)
(cid:41) xecutive(cid:4) Officer of(cid:4)
rainCorp(cid:4) Malt.
rainCorp(cid:4)
(cid:48) imited.(cid:4) He(cid:4) was(cid:4) President(cid:4) and(cid:4)
(cid:48) imited,(cid:4) CSR(cid:4)
Mr(cid:4) Wilton(cid:4) is(cid:4) a(cid:4) Non-(cid:41) xecutive(cid:4) Director(cid:4) of(cid:4) Namoi(cid:4) Cotton(cid:4)
(cid:48) imited(cid:4) (since(cid:4) June(cid:4) 2020).
Mr(cid:4) Wilton(cid:4) was(cid:4) previously(cid:4) Chair(cid:4) of(cid:4) the(cid:4) advisory(cid:4) board(cid:4)
of(cid:4) Mackay’s(cid:4) Banana(cid:4) Marketing(cid:4) and(cid:4) Non-(cid:41) xecutive(cid:4)
(cid:4) Sept(cid:4) 2020).
Director(cid:4) of(cid:4) Sheep(cid:4) CRC(cid:4)
(cid:48) td(cid:4) (Nov(cid:4) 2015(cid:4)
Mr(cid:4) Wilton(cid:4) is(cid:4) a(cid:4) resident(cid:4) of(cid:4) New(cid:4) South(cid:4) Wales.
Mr(cid:4) Allison(cid:4) is(cid:4) currently(cid:4) Chair(cid:4) of(cid:4) Agribusiness(cid:4) Australia,(cid:4)
AuctionsPlus,(cid:4) the(cid:4) Agriculture(cid:4) and(cid:4) Natural(cid:4) Resources(cid:4)
(cid:41) nd-User(cid:4) Advisory(cid:4) Board(cid:4) of(cid:4) the(cid:4) SmartSat(cid:4) CRC,(cid:4) the(cid:4)
Agrifood(cid:4) and(cid:4) Wine(cid:4) Advisory(cid:4) Board(cid:4) of(cid:4) Adelaide(cid:4)
University,(cid:4) a(cid:4) Non-(cid:41) xecutive(cid:4) Director(cid:4) of(cid:4)
(cid:48) imited(cid:4) and(cid:4) a(cid:4) member(cid:4) of(cid:4) the(cid:4) Rabobank(cid:4) Food(cid:4) and(cid:4)
Agriculture(cid:4) Advisory(cid:4) Board.
rowers(cid:4)
rain(cid:43)
lders’(cid:4)
ight(cid:4) Point(cid:4) Plan(cid:4) in(cid:4) 2014,
Mr(cid:4) Allison(cid:4) oversaw(cid:4) the(cid:4) development(cid:4) and(cid:4)
implementation(cid:4) of(cid:4)
which(cid:4) returned(cid:4) the(cid:4) company(cid:4) to(cid:4) pure(cid:4) play(cid:4) agribusiness(cid:4)
and(cid:4) resulted(cid:4) in(cid:4) the(cid:4) first(cid:4) shareholder(cid:4) distribution(cid:4) in(cid:4)
nearly(cid:4) a(cid:4) decade.(cid:4) Since(cid:4) 2014,(cid:4)
a(cid:4) market(cid:4) capitalisation(cid:4) of(cid:4) $50m(cid:4) to(cid:4) $1.9b.
lders(cid:4) has(cid:4) grown(cid:4) from(cid:4)
(cid:48) td(cid:4) (since(cid:4) Feb(cid:4) 2017,(cid:4) retiring(cid:4) Dec(cid:4) 2022),
(cid:48) imited(cid:4) (since(cid:4)
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(cid:48) imited(cid:4)
Ms(cid:4) Clubb(cid:4) is(cid:4) currently(cid:4) a(cid:4) Director(cid:4) of(cid:4) Craig(cid:4) Mostyn(cid:4)
Holdings(cid:4) Pty(cid:4)
Chair(cid:4) of(cid:4) the(cid:4) Australian(cid:4) Wool(cid:4)
Aug(cid:4) 2016, retiring(cid:4) Nov(cid:4) 2022),(cid:4) Chair(cid:4) of(cid:4) Pro(cid:56) en(cid:4)
(Director(cid:4) since(cid:4) Apr(cid:4) 2019),(cid:4) Non-(cid:41) xecutive(cid:4) Director(cid:4) of(cid:4)
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(cid:48) easing(cid:4)
Director(cid:4) of(cid:4) Australia(cid:4) Post(cid:4) (since(cid:4) Sept(cid:4) 2022).
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(cid:48) imited(cid:4) (Director(cid:4) since(cid:4) Aug(cid:4) 2021)(cid:4) and(cid:4) a(cid:4)
Ms(cid:4) Clubb(cid:4) is(cid:4) a(cid:4) resident(cid:4) of(cid:4) New(cid:4) South(cid:4) Wales.
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(cid:59)
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Directors’ Report
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ilert(cid:4)
was appointed(cid:4) Chair(cid:4) of(cid:4) the(cid:4) Remuneration(cid:4) and(cid:4) Human(cid:4)
Resources(cid:4) Committee(cid:4) on(cid:4) 11(cid:4) September 2019.(cid:4) She(cid:4) is(cid:4)
also(cid:4) a(cid:4) member(cid:4) of(cid:4) the(cid:4) Audit,(cid:4) Risk(cid:4) and(cid:4) Compliance(cid:4)
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the(cid:4) Nomination(cid:4) and(cid:4) Prudential(cid:4) Committee.
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ilert(cid:4) has(cid:4) held(cid:4) senior(cid:4) executive(cid:4) roles(cid:4) with(cid:4) Suncorp,(cid:4)
(cid:48) imited,(cid:4) during(cid:4) which(cid:4) time(cid:4)
Citibank,(cid:4) IBM(cid:4) and(cid:4) News(cid:4)
she(cid:4) developed(cid:4) experience(cid:4) in(cid:4) operational(cid:4) leadership,(cid:4)
strategy,(cid:4) technology,(cid:4) digital(cid:4) disruption(cid:4) with(cid:4) alternate(cid:4)
strategies(cid:4) for(cid:4) large(cid:4) incumbent(cid:4) businesses,(cid:4) and(cid:4)
customer(cid:4) experience/marketing.
(cid:49) att(cid:76) ew(cid:4)
(cid:53) uinn
r(cid:4)
(cid:55) c,(cid:4)
Non-(cid:41) xecutive(cid:4) Director(cid:4) since(cid:4) February(cid:4) 2020,(cid:4) Mr(cid:4)
is(cid:4) a(cid:4) member(cid:4) of(cid:4) the(cid:4) Audit,(cid:4) Risk(cid:4) and(cid:4) Compliance(cid:4)
Committee,(cid:4) Remuneration(cid:4) and(cid:4) Human(cid:4) Resources(cid:4)
Committee,(cid:4) Work(cid:4) Health(cid:4) and(cid:4) Safety(cid:4) Committee(cid:4) and(cid:4)
Nomination(cid:4) and(cid:4) Prudential(cid:4) Committee.
(cid:53) uinn(cid:4)
(cid:53) uinn(cid:4) holds(cid:4) a(cid:4) BSc(cid:4) in(cid:4) Chemistry(cid:4) and(cid:4) Management(cid:4)
Mr(cid:4)
Science(cid:4) and(cid:4) is(cid:4) a(cid:4) Chartered(cid:4) Accountant.(cid:4) He(cid:4) also(cid:4) has(cid:4)
senior(cid:4) executive(cid:4) experience(cid:4) as(cid:4) Managing(cid:4) Director(cid:4) of(cid:4)
Stockland(cid:4) for(cid:4) 13(cid:4) years.
(cid:49) s(cid:4)
(cid:54) aelene(cid:4)
,(cid:4)
(cid:89) s,(cid:4) F(cid:39)
(cid:39) D
(cid:49) urp(cid:76) y
Non-(cid:41) xecutive(cid:4) Director(cid:4) since(cid:4) January(cid:4) 2021,(cid:4) Ms(cid:4) Murphy(cid:4)
is(cid:4) a(cid:4) member(cid:4) of(cid:4) the(cid:4) Audit,(cid:4) Risk(cid:4) and(cid:4) Compliance(cid:4)
Committee,(cid:4) Remuneration(cid:4) and(cid:4) Human(cid:4) Resources(cid:4)
Committee,(cid:4) Work(cid:4) Health(cid:4) and(cid:4) Safety(cid:4) Committee(cid:4) and(cid:4)
Nomination(cid:4) and(cid:4) Prudential(cid:4) Committee.
raduate(cid:4) of(cid:4) the(cid:4) Australian(cid:4) Institute(cid:4) of(cid:4) Company(cid:4)
Ms(cid:4) Murphy(cid:4) holds(cid:4) a(cid:4) Bachelor(cid:4) of(cid:4) Business(cid:4) (Accounting),(cid:4)
is(cid:4) a(cid:4) Fellow(cid:4) of(cid:4) the(cid:4) Institute(cid:4) of(cid:4) Chartered(cid:4) Accountants(cid:4)
and(cid:4) a(cid:4)
Directors.(cid:4) She(cid:4) also(cid:4) has(cid:4) many(cid:4) years(cid:11)
as(cid:4) a(cid:4) senior(cid:4) executive,(cid:4) having(cid:4) previously(cid:4) been(cid:4) the(cid:4)
C(cid:41) O(cid:4) of(cid:4) the(cid:4) Delta(cid:4)
roup(cid:4) and(cid:4) Managing(cid:4) Director(cid:4) of(cid:4)
333(cid:4) Management.
(cid:4) experience(cid:4)
ilert(cid:4) is(cid:4) currently(cid:4) a(cid:4) Non-(cid:41) xecutive(cid:4) Director(cid:4) of(cid:4)
(cid:48) imited(cid:4) (since(cid:4) Nov(cid:4) 2017)(cid:4) and(cid:4)
(cid:41) ducation(cid:4) International(cid:4) Inc(cid:4) (since(cid:4) May(cid:4) 2021).
Ms(cid:4)
Domain(cid:4) Holdings(cid:4)
(cid:47) eypath(cid:4)
Ms(cid:4)
Competition(cid:4)
(cid:56) ribunal.
ilert(cid:4) is(cid:4) also(cid:4) a(cid:4) member(cid:4) of(cid:4) the(cid:4) Australian(cid:4)
Ms(cid:4)
ilert(cid:4) was(cid:4) previously(cid:4) a(cid:4) director(cid:4) of(cid:4) Super(cid:4) Retail(cid:4)
(cid:4) Jan(cid:4) 2021)(cid:4) and(cid:4) Navitas(cid:4)
(cid:48) imited(cid:4) (Oct(cid:4) 2015(cid:4)
roup(cid:4)
(cid:48) imited(cid:4) (July 2014(cid:4)
(cid:4) July(cid:4) 2019).
Ms(cid:4)
ilert(cid:4) is(cid:4) a(cid:4) resident(cid:4) of(cid:4) New(cid:4) South(cid:4) Wales.
(cid:53) uinn(cid:4) has(cid:4) extensive(cid:4) non-executive(cid:4) director(cid:4)
Mr(cid:4)
experience(cid:4) in(cid:4) the(cid:4) Australian(cid:4) listed(cid:4) company(cid:4)
environment.(cid:4) He(cid:4) is(cid:4) currently(cid:4) a(cid:4) director(cid:4) of(cid:4) CSR(cid:4)
(cid:48) imited(cid:4) (since(cid:4) Aug(cid:4) 2013)(cid:4) and(cid:4) Chair(cid:4) of(cid:4) unlisted(cid:4)
Management(cid:4) Holdings(cid:4)
(cid:53) uinn(cid:4) was(cid:4) previously(cid:4) Chair(cid:4) of(cid:4) Class(cid:4)
July(cid:4) 2015(cid:4)
Healthcare(cid:4)
(cid:4) Feb(cid:4) 2022)(cid:4) and(cid:4) a(cid:4) Director(cid:4) of(cid:4) Regis(cid:4)
(cid:48) imited(cid:4) (Mar(cid:4) 2018(cid:4) -(cid:4) Oct(cid:4) 2021).
(cid:48) imited(cid:4) (since(cid:4) June(cid:4) 2018).(cid:4) Mr(cid:4)
(cid:48) imited(cid:4) (Director(cid:4)
(cid:56) SA(cid:4)
Mr(cid:4)
(cid:53) uinn(cid:4) is(cid:4) a(cid:4) resident(cid:4) of(cid:4) New(cid:4) South(cid:4) Wales.
Ms(cid:4) Murphy(cid:4) has(cid:4) strong(cid:4) non-executive(cid:4) director(cid:4)
experience in(cid:4) the(cid:4) Australian(cid:4) listed(cid:4) company(cid:4)
environment,(cid:4) across(cid:4) a(cid:4) range(cid:4) of(cid:4) industry(cid:4) sectors.(cid:4) Her(cid:4)
(cid:4) non-executive(cid:4) director(cid:4) roles(cid:4) are(cid:4) at(cid:4) Bega(cid:4)
current(cid:4) AS(cid:60)
Cheese(cid:4)
(cid:48) imited(cid:4) (since(cid:4) June(cid:4) 2015),(cid:4) Integral(cid:4) Diagnostics(cid:4)
(cid:48) imited(cid:4) (since(cid:4) Oct(cid:4) 2017)(cid:4) and(cid:4) Altium(cid:4)
Sept(cid:4) 2016,(cid:4) retiring(cid:4) Nov(cid:4) 2022)(cid:4) and(cid:4)
(cid:48) imited(cid:4) (since(cid:4) Aug(cid:4) 2022).(cid:4) Ms(cid:4) Murphy(cid:4) was(cid:4) also(cid:4)
previously(cid:4) a(cid:4) non-executive(cid:4) director(cid:4) of(cid:4) Clean(cid:4) Seas(cid:4)
(cid:48) imited(cid:4) (July(cid:4) 2018 -(cid:4) Oct(cid:4) 2020).
Seafood(cid:4)
(cid:48) imited(cid:4) (since(cid:4)
(cid:56) abcorp(cid:4) Holdings(cid:4)
Ms(cid:4) Murphy(cid:4) is(cid:4) a(cid:4) resident(cid:4) of(cid:4) Victoria.
(cid:38)
(cid:49)
(cid:50)
(cid:55)
(cid:59)
(cid:43)
(cid:37)
(cid:45)
(cid:4)
(cid:39)
(cid:4)
(cid:41)
(cid:41)
(cid:41)
(cid:41)
(cid:41)
(cid:41)
(cid:43)
(cid:606)
(cid:606)
(cid:41)
(cid:49)
(cid:38)
(cid:37)
(cid:39)
(cid:37)
(cid:606)
(cid:38)
(cid:38)
(cid:37)
(cid:43)
(cid:37)
(cid:45)
(cid:43)
(cid:43)
46
Elders 2022 Annual Report
Directors and Secretaries
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
• Raelene Murphy
Executive Director
• Mark Charles Allison, Managing Director and
Chief Executive Officer
Company Secretaries
• 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. Peter is also Chair of Walford
Anglican School for Girls.
• 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.
Principal Activities
The principal activities of Elders during the
year were:
• the provision of retail products 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
$162.9 million (2021: profit of $149.8 million).
A review of the operations and results of the
consolidated entity and its principal businesses
during the year is contained in pages 23 to 30.
Significant Changes
in the State of Affairs
There were no significant changes in the
state of affairs of the consolidated entity that
are not otherwise disclosed elsewhere in this
annual report.
Impacts of COVID-19
As in FY20 and FY21, 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. This approach has also
focused on the mental health consequences
of the pandemic and responses to it on
our employees.
A range of measures have been implemented
to help manage the risk of COVID-19 infection
in our workplaces, and the mental health issues
that can be a consequence of COVID-19 and
societal restrictions introduced to combat it.
Key employees across the country received
mental health first aid training and Elders'
myWellbeing team continue to roll out
communications to increase understanding and
awareness around health and wellbeing.
Throughout Elders' network we have, through
our COVID-safe plans, worked to minimise the
spread of COVID-19. Fortunately the impact
to our business has been minimal and
contingency plans have enabled Elders to
continue to service our customers. Our stores
continue to maintain a thorough cleaning
regime in line with our COVID-safe plans.
While COVID-19 pandemic conditions appear
to be easing in Australia at the date of this
report, COVID-19 remains a global pandemic
as declared by the World Health Organisation.
Elders has considered the impact of COVID-19
when preparing the consolidated financial
statements and related note disclosures,
and continues to monitor the impact on
our employees, demand for Elders' products
and services, customers, communities and
supply chains.
Events Subsequent
to Balance Date
There was no matter or circumstance that
has arisen since 30 September 2022 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 31
of this report.
Attendance at Meetings
by Directors
Director attendance at scheduled meetings in
the 12 months to 30 September 2022 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
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
12
12
12
12
11
12
12
12
12
12
12
12
2
-
2
2
2
2
2
-
2
2
2
2
5
-
5
5
5
5
5
-
5
5
5
5
5
-
5
5
5
5
5
-
5
5
5
5
2
2
2
2
1
2
2
2
2
2
2
2
I Wilton
M C Allison
R Clubb
D Eilert
M Quinn
R Murphy
Directors’ Report
47
Dividends and Other Equity Distributions
On 11 November 2022, the Directors determined to pay a final dividend of $0.28 per ordinary share, franked at 30%, bringing dividends for FY22 to $0.56
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 Half Year Ended 30 September 2021
12 November 2021
17 December 2021
Interim Dividend for Half Year Ended 31 March 2022
20 May 2022
17 June 2022
Dividend per
Share
Franking Rate Total Dividend
$0.22
$0.28
20%
30%
$ 34,424,846.28
$ 43,813,440.72
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 51 to 69 of this Annual Report.
The number of performance rights on issue at 30 September 2022, which were held by 21 Long-Term Incentive Plan participants, is disclosed in note 26 to
the Financial Statements. If each of these rights vested, this would represent 0.74% 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. The representation below differs from note 26 in the financial statements which does not take into account performance rights that vested after the
reporting date. The closing performance rights per note 26 of the financial statements includes the 487,916 rights that vested on 14 November 2022.*
1,238,666
(389,750)
391,900
(90,133)
(487,916)
662,767
No. of rights as at 30
Sept 2021
No. of rights vested on
15 Nov 2021*
No. of rights granted
since the AGM on 16
Dec 2021
No. of rights lapsed from
30 Sept 2021 to date of
report
No. of rights vested on
14 Nov 2022*
No. of rights outstanding
at the date of report
* in accordance with Australian accounting standards
The performance rights granted to the five most highly remunerated officers as part of their remuneration, between 30 September 2021 and the date of
this report, are shown below.
Name of Officer
Mark Charles Allison
Malcolm Hunt
Peter Gordon Hastings
Thomas Benjamin Russo
Elizabeth Therese Ryan
Number of Rights Granted between 30 September 2021 and 14 November 2022
102,400
20,500
18,800
18,700
17,900
Share and Other Equity Issues During the Year
The total number of ordinary shares on issue at the date of this report is 156,476,574.
Elders has historically issued new shares to satisfy allocations under its incentive plans and dividend reinvestment plan. In late 2021, the Board
determined that shares allocated for these purposes should be purchased on market. Therefore, there has been no change to the number of ordinary
shares on issue between 1 October 2021 and the date of this report.
Restricted Securities and Voluntary Escrow
As at the date of this report, Elders has no restricted securities on offer.
Nonetheless, pursuant to the FY21 short-term incentive (STI) plan, 40% of the STI earned by executives was delivered in shares that are subject to trading
restrictions. A total of 86,523 shares were allocated to plan participants under the FY21 STI plan. At the date of this report 43,258 shares allocated
under the FY21 STI plan are held by plan participants and remain subject to the plan's trading restrictions. (Further information about the FY21 and FY22
short-term incentive plans is included in the 2022 Remuneration Report, commencing on page 51).
(cid:756)(cid:760)
Elders (cid:754)(cid:752)(cid:754)(cid:754) Annual Report
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environmental legislation.(cid:4) Such(cid:4) legislation(cid:4) is(cid:4)
diverse(cid:4) and(cid:4) varies(cid:4) between(cid:4) states,(cid:4) territories,(cid:4)
local(cid:4) authorities(cid:4) and(cid:4) various(cid:4) regulators.(cid:4)
Compliance(cid:4) with(cid:4) relevant(cid:4) legislation(cid:4) is(cid:4)
managed(cid:4) on(cid:4) the(cid:4) ground(cid:4) by(cid:4) our(cid:4) branches(cid:4) and(cid:4)
overseen(cid:4) and(cid:4) guided(cid:4) by(cid:4) our(cid:4) internal(cid:4) Safety,(cid:4)
Risk(cid:4) and(cid:4)
(cid:41) nvironmental(cid:4) risks(cid:4) and(cid:4) ha(cid:94) ards(cid:4) are(cid:4) managed(cid:4)
in(cid:4) accordance(cid:4) with(cid:4) our(cid:4) Resilience(cid:4) Framework.(cid:4)
Our(cid:4) performance(cid:4) in(cid:4) relation(cid:4) to(cid:4) environmental(cid:4)
management(cid:4) and(cid:4) the(cid:4) various(cid:4) applicable(cid:4)
environmental(cid:4) regulations(cid:4) across(cid:4) our(cid:4) various(cid:4)
businesses(cid:4) over(cid:4) the(cid:4) reporting(cid:4) period(cid:4) is(cid:4)
as(cid:4) follows.
(cid:41) nvironment(cid:4) Business(cid:4) Partners.(cid:4)
(cid:53) uirindi,(cid:4) New(cid:4) South(cid:4) Wales.(cid:4)
illara(cid:4) Feedlot
illara(cid:4) Feedlot,(cid:4) a(cid:4) beef(cid:4) cattle(cid:4)
lders(cid:4) operates(cid:4)
feedlot,(cid:4) in(cid:4)
illara(cid:4)
is(cid:4) sub(cid:78) ect(cid:4) to(cid:4) both(cid:4) state(cid:4) and(cid:4) local(cid:4) government(cid:4)
environmental(cid:4) legislation,(cid:4) and(cid:4) its(cid:4) operation(cid:4) is(cid:4)
conditional(cid:4) on(cid:4) it(cid:4) maintaining(cid:4) its(cid:4) environment(cid:4)
protection(cid:4) and(cid:4) water(cid:4) licences.
operated(cid:4) by(cid:4) AgSafe.(cid:4)
are(cid:4) being(cid:4) progressively(cid:4) rolled(cid:4) out(cid:4) to(cid:4) our(cid:4)
wholesale(cid:4) operations.
(cid:56) hese(cid:4) assurance(cid:4) activities(cid:4)
lders(cid:4) is(cid:4) not(cid:4) aware(cid:4) of(cid:4) any(cid:4) breaches(cid:4)
of(cid:4) environmental(cid:4) regulations(cid:4) affecting
lders’(cid:4) retail(cid:4) or(cid:4) wholesale(cid:4) operations(cid:4) that(cid:4)
were(cid:4) reported(cid:4) during(cid:4) the(cid:4) year(cid:4) ended(cid:4)
30(cid:4) September 2022.
roup(cid:4) of(cid:4) the(cid:4) kind(cid:4)
(cid:4) Amounts
(cid:54) ounding(cid:4) o(cid:74)
(cid:56) he(cid:4) parent(cid:4) entity(cid:4) is(cid:4) a(cid:4)
specified(cid:4) in(cid:4) ASIC(cid:4) Corporations(cid:4) (Rounding(cid:4)
in(cid:4) Financial/Directors(cid:4) Report)(cid:4) Instrument(cid:4)
2016/191(cid:4) issued(cid:4) by(cid:4) the(cid:4) Australian(cid:4) Securities(cid:4)
and(cid:4) Investments(cid:4) Commission.(cid:4) In(cid:4) accordance(cid:4)
with(cid:4) that(cid:4) class(cid:4) order,(cid:4) amounts(cid:4) in(cid:4) the(cid:4) Financial(cid:4)
Report(cid:4) and(cid:4) Directors’(cid:4) Report(cid:4) have(cid:4) been(cid:4)
rounded(cid:4) to(cid:4) the(cid:4) nearest(cid:4) thousand(cid:4) dollars(cid:4) unless(cid:4)
otherwise(cid:4) stated.
(cid:50) on-Audit(cid:4) Services
Based(cid:4) on(cid:4) advice(cid:4) received(cid:4) from(cid:4) the(cid:4) Audit,(cid:4) Risk(cid:4)
and(cid:4) Compliance(cid:4) Committee,(cid:4) the(cid:4) Directors(cid:4) are(cid:4)
satisfied(cid:4) that(cid:4) the(cid:4) provision(cid:4) of(cid:4) non-audit(cid:4) and(cid:4)
audit-related(cid:4) services(cid:4) is(cid:4) compatible(cid:4) with(cid:4) the(cid:4)
general(cid:4) standard(cid:4) of(cid:4) independence(cid:4) for(cid:4) auditors(cid:4)
imposed(cid:4) under(cid:4) the(cid:4) Corporations(cid:4) Act(cid:4) 2001(cid:4) for(cid:4)
the(cid:4) following(cid:4) reasons:
all(cid:4) non-audit(cid:4) and(cid:4) audit-related(cid:4) services(cid:4) have(cid:4)
been(cid:4) reviewed(cid:4) by(cid:4) the(cid:4) Audit,(cid:4) Risk(cid:4) and(cid:4)
Compliance(cid:4) Committee(cid:4) to(cid:4) ensure(cid:4) they(cid:4) do(cid:4) not(cid:4)
impact(cid:4) on(cid:4) the(cid:4) impartiality(cid:4) or(cid:4) ob(cid:78) ectivity(cid:4) of(cid:4)
the(cid:4) auditor
the(cid:4) nature(cid:4) and(cid:4) scope(cid:4) of(cid:4) the(cid:4) non-audit(cid:4)
services(cid:4) provided(cid:4) means(cid:4) that(cid:4) auditor(cid:4)
independence(cid:4) was(cid:4) not(cid:4) compromised
(cid:56) he(cid:4) amount(cid:4) received(cid:4) or(cid:4) due(cid:4) to(cid:4) be(cid:4) received(cid:4)
for(cid:4) the(cid:4) provision(cid:4) of(cid:4) non-audit(cid:4) services(cid:4) is(cid:4)
disclosed(cid:4) in(cid:4) note(cid:4) 27(cid:4) of(cid:4) the(cid:4) financial(cid:4) report,(cid:4)
Auditors’(cid:4) Remuneration.
A(cid:4) copy(cid:4) of(cid:4) the(cid:4) auditor’s(cid:4) independence(cid:4)
declaration(cid:4) as(cid:4) required(cid:4) under(cid:4) section(cid:4) 307C
of(cid:4) the(cid:4) Corporations(cid:4) Act(cid:4) 2001(cid:4) is(cid:4) set(cid:4) out(cid:4) on(cid:4)
page(cid:4) 126.
(cid:56) his(cid:4) report,(cid:4) including(cid:4) the(cid:4) Remuneration(cid:4)
Report(cid:4) commencing(cid:4) on(cid:4) page(cid:4) 51,(cid:4) is(cid:4) made(cid:4) in(cid:4)
accordance(cid:4) with(cid:4) a(cid:4) resolution(cid:4) of(cid:4) Directors.
ilton
Ian(cid:4)
Chair
(cid:4) Allison
(cid:49) ar(cid:79)
Managing(cid:4)
Director
14(cid:4) November 2022
(cid:48) icence),(cid:4)
illara(cid:4) is(cid:4) required(cid:4)
In(cid:4) accordance(cid:4) with(cid:4) its(cid:4) environment(cid:4) protection(cid:4)
licence(cid:4) ((cid:41) P(cid:4)
to(cid:4) undertake(cid:4) a(cid:4) significant(cid:4) number(cid:4) of(cid:4)
environmental(cid:4) management(cid:4) activities(cid:4) to(cid:4) ensure(cid:4)
that(cid:4) it(cid:4) is(cid:4) managing(cid:4) its(cid:4) waste,(cid:4) dust(cid:4) and(cid:4)
odour(cid:4) emissions(cid:4) to(cid:4) minimise(cid:4) pollution(cid:4) of(cid:4)
the(cid:4) surrounding(cid:4) community(cid:4) and(cid:4) to(cid:4) avoid(cid:4)
groundwater(cid:4) and(cid:4) soil(cid:4) contamination.(cid:4) Failure(cid:4) to(cid:4)
manage(cid:4) these(cid:4) emissions(cid:4) can(cid:4) affect(cid:4) the(cid:4) amenity(cid:4)
of(cid:4) the(cid:4) local(cid:4) community(cid:4) and(cid:4) contaminate(cid:4) private(cid:4)
and(cid:4) public(cid:4) property.
(cid:41) missions(cid:4) are(cid:4) monitored(cid:4) internally(cid:4) by(cid:4)
and(cid:4) externally(cid:4) by(cid:4) the(cid:4) New(cid:4) South(cid:4) Wales(cid:4)
(cid:41) nvironment(cid:4) Protection(cid:4) Authority(cid:4) (NSW(cid:4)
and(cid:4) the(cid:4) National(cid:4) Pollutant(cid:4) Inventory(cid:4) (NPI).(cid:4)
illara(cid:4) submits(cid:4) reports(cid:4) to(cid:4) the(cid:4) NPI(cid:4) detailing(cid:4)
(cid:41) PA)(cid:4)
illara,(cid:4)
(cid:41) PA(cid:4) describing(cid:4) (amongst(cid:4) other(cid:4) things)(cid:4)
emissions(cid:4) of(cid:4) NPI(cid:4) substances(cid:4) (including(cid:4)
ammonia,(cid:4) carbon(cid:4) monoxide(cid:4) and(cid:4) oxides(cid:4) of(cid:4)
nitrogen)(cid:4) and(cid:4) activities(cid:4)
illara(cid:4) has(cid:4) participated(cid:4)
illara(cid:4) also(cid:4)
in(cid:4) to(cid:4) reduce(cid:4) these(cid:4) emissions.(cid:4)
submits(cid:4) annual(cid:4) reports(cid:4) to(cid:4) the(cid:4) New(cid:4) South(cid:4)
Wales(cid:4)
management(cid:4) systems(cid:4) in(cid:4) place(cid:4) to(cid:4) manage(cid:4)
soil(cid:4) health(cid:4) and(cid:4) nutrient(cid:4) levels,(cid:4) odour(cid:4) and(cid:4)
dust,(cid:4) waste,(cid:4) protection(cid:4) of(cid:4) local(cid:4) waterways(cid:4)
and(cid:4) any(cid:4) pollution(cid:4) complaints(cid:4) received(cid:4) in(cid:4) the(cid:4)
reporting(cid:4) year.(cid:4)
(cid:56) hese(cid:4) reports(cid:4) are(cid:4) prepared(cid:4) by(cid:4)
an(cid:4) external(cid:4) consultant.
illara(cid:4) is(cid:4) also(cid:4) sub(cid:78) ect(cid:4) to(cid:4) licence(cid:4) requirements(cid:4)
for(cid:4) water(cid:4) consumption(cid:4) and(cid:4) waste(cid:4) management.
No(cid:4) confirmed(cid:4) breaches(cid:4) of(cid:4) environmental(cid:4)
regulations(cid:4) or(cid:4) pollution(cid:4) complaints(cid:4) relating(cid:4) to(cid:4)
illara(cid:4) were(cid:4) reported(cid:4) during(cid:4) the(cid:4) year(cid:4) ended(cid:4)
illara(cid:11) s(cid:4) performance(cid:4)
30(cid:4) September 2022.(cid:4)
on(cid:4) water(cid:4) management(cid:4) and(cid:4) consumption(cid:4) and(cid:4)
waste(cid:4) management(cid:4) is(cid:4) detailed(cid:4) on(cid:4) pages(cid:4) 44
(cid:4) 2022(cid:4) Sustainability(cid:4) Report.
and(cid:4) 25(cid:4) of(cid:4)
lders(cid:11)
Saleyards
Saleyards(cid:4) are(cid:4) sub(cid:78) ect(cid:4) to(cid:4) various(cid:4) state,(cid:4)
territory and(cid:4) local(cid:4) government(cid:4) environmental(cid:4)
requirements,(cid:4) particularly(cid:4) relating(cid:4) to(cid:4) effluent
management,(cid:4) dust(cid:4) and(cid:4) noise.(cid:4)
vary(cid:4) from(cid:4) place(cid:4) to(cid:4) place(cid:4) and(cid:4) generally(cid:4)
only(cid:4) apply(cid:4) to(cid:4) saleyards(cid:4) above(cid:4) a(cid:4) prescribed(cid:4)
si(cid:94) e.(cid:4)
lders(cid:4) expects(cid:4) its(cid:4) saleyard(cid:4) operations,(cid:4)
irrespective(cid:4) of(cid:4) their(cid:4) si(cid:94) e,(cid:4) to(cid:4) abide(cid:4) by(cid:4) the(cid:4)
applicable(cid:4) laws(cid:4) and(cid:4) regulations.
(cid:56) hese(cid:4) obligations(cid:4)
No(cid:4) breaches(cid:4) of(cid:4) environmental(cid:4) regulations(cid:4)
affecting(cid:4)
the(cid:4) year(cid:4) ended(cid:4) 30(cid:4) September 2022.
lders’(cid:4) saleyards(cid:4) were(cid:4) reported(cid:4) during(cid:4)
(cid:76) olesale(cid:4) Operations
(cid:54) etail(cid:4) and(cid:4)
lders’(cid:4) retail(cid:4) and(cid:4) wholesale(cid:4) operations(cid:4) are(cid:4)
sub(cid:78) ect to(cid:4) state(cid:4) environmental(cid:4) regulations(cid:4)
relating(cid:4) to(cid:4) the(cid:4) storage,(cid:4) handling,(cid:4) transport(cid:4)
and(cid:4) sale(cid:4) of(cid:4) dangerous(cid:4) goods,(cid:4) which(cid:4) include(cid:4)
some(cid:4) of(cid:4) the(cid:4) agricultural(cid:4) chemicals,(cid:4) fertilisers(cid:4)
and(cid:4) poisons(cid:4) we(cid:4) supply.(cid:4) Although(cid:4) these(cid:4)
regulations(cid:4) are(cid:4) based(cid:4) on(cid:4) nationally(cid:4) recognised(cid:4)
standards,(cid:4) the(cid:4) regulatory(cid:4) environment(cid:4) for(cid:4) the(cid:4)
transporting,(cid:4) handling,(cid:4) storage,(cid:4) sale(cid:4) and(cid:4) use(cid:4)
of(cid:4) such(cid:4) dangerous(cid:4) goods,(cid:4) chemicals(cid:4) and(cid:4)
scheduled(cid:4) poisons(cid:4) is(cid:4) complex(cid:4) and(cid:4) sub(cid:78) ect(cid:4)
to(cid:4) regulations(cid:4) imposed(cid:4) by(cid:4) each(cid:4) state(cid:4) and(cid:4)
territory.(cid:4)
Business(cid:4) Partners(cid:4) monitor(cid:4) compliance(cid:4) with(cid:4)
these(cid:4) regulations.(cid:4) In(cid:4) addition,(cid:4) many(cid:4) of(cid:4)
branches(cid:4) and(cid:4) personnel(cid:4) participate(cid:4) in(cid:4) an(cid:4)
accreditation,(cid:4) training(cid:4) and(cid:4) audit(cid:4) program(cid:4)
(cid:4) Safety,(cid:4) Risk(cid:4) and(cid:4)
(cid:41) nvironment(cid:4)
lders’(cid:4)
lders(cid:11)
(cid:41)
(cid:41)
(cid:41)
(cid:41)
(cid:617)
(cid:41)
(cid:41)
(cid:617)
(cid:617)
(cid:41)
(cid:47)
(cid:41)
(cid:47)
(cid:47)
(cid:47)
(cid:47)
(cid:47)
(cid:47)
(cid:47)
(cid:47)
(cid:47)
(cid:47)
(cid:41)
(cid:41)
(cid:41)
(cid:59)
(cid:41)
(cid:41)
(cid:41)
(cid:41)
(cid:41)
(cid:43)
(cid:617)
(cid:617)
(cid:59)
Directors’ Report
(cid:756)(cid:761)
REMUNERATION REPORT 52
Elders 2022 Annual Report
Remuneration
Report
Following is the
Remuneration Report for
the consolidated entity
for the year ended
30 September 2022.
The Remuneration Report
provides shareholders with
an understanding of Elders’
remuneration policies and
the link between our
remuneration approach
and our performance, in
particular with regard to
Elders’ Key Management
Personnel (KMP).
The remuneration outcomes presented in this
report reflect the results of Financial Year
2022, not only the business performance,
but also strong alignment with outcomes for
our shareholders.
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.
Remuneration at a Glance
Our Year
Our FY22 underlying EBIT of $232.1 million
represents an increase of 39% on FY21.
Excellent seasonal conditions, strong
commodity prices and the hard work of the
Elders team have driven the strong growth.
In addition our well-executed growth strategy,
which targets a balance between organic and
acquisitive growth, has continued to produce
value for shareholders.
KMP Changes
The Board reviewed the KMP for FY22 and
determined the following persons are KMP:
• Non- Executive Directors
• Managing Director and Chief
Executive Officer
• Chief Financial Officer (CFO)
The following changes were made to the
Executive KMP during FY22:
• Tania Foster, Chief Financial Officer, ceased
employment with Elders on 31 August 2022
• The role occupied by Malcolm Hunt,
Executive General Manager National &
Victoria/Riverina, was determined by the
Board not to be a KMP role for FY22
effective 1 October 2021 as the role no
longer encompassed the responsibility for
the strategic direction of Elders
Remuneration Changes
Implemented in FY22
Elders' Reward Framework was reviewed in
FY20 and remains relevant to Elders with the
only changes:
• FY22 Short-Term Incentive (STI) changes
to gateways:
– addition of, for this year only, a greater
than prior year EBIT gateway
– addition of a no significant environmental
event gateway
– removal of ROC hurdle as a gateway, but
maintaining ROC as a modifier and a key
financial measure in the MD & CEO STI
Further details are in section 3.1 of this
Remuneration Report.
• FY22 Long-Term Incentive relative TSR
comparator peer group will comprise all
companies in the S&P/ASX 200 to align with
shareholders expectations. Previously, this
peer group included S&P/ASX 200 with the
exclusion of companies in the S&P/ASX 100.
Further details are in section 3.1 of this
Remuneration Report.
Remuneration Report
53
Contents
Key Management Personnel
1 Overview of FY22 Executive Remuneration
2 Link Between Elders’ Financial Performance
and FY22 Remuneration Outcomes
3 Details of the Executive
Remuneration Framework
4 Remuneration Governance
5 Non-Executive Director Remuneration and
Statutory Remuneration
6 Key Terms of Executive KMP Employment
Contracts and Statutory Remuneration
7 Additional Required Disclosures
54
55
56
61
64
65
66
68
Remuneration Changes
for FY23
• FY23 Short-Term Incentive
– Changes to gateways of:
– removal of greater than prior year EBIT
– EBIT threshold gateway increase to
95% of EBIT budget (from 90%)
– addition of sustainability measure
as a key priority in MD & CEO
measures to reflect the focus of Elders
on sustainability.
• Non-Executive Directors Fees
NED fees will increase by 3% from 1 January
2023. In addition, with expansion of the
oversight responsibilities of the Board Work
Health and Safety Committee (which will
become the Board Safety and Sustainability
Committee, effective 1 January 2023), the
Board reviewed and equalised fees paid to
the chairs and members of each Committee.
From 1 January 2023, the Committee Chair
fee is $25,000 and the Member fee is
$12,500 for all Committees other than for the
Nomination and Prudential Committee which
continues to attract no fee for the Chair or
a Member.
• Non-Executive Directors Fee Pool
Approval is being sought at the 2022 AGM
to increase the Fee Pool by $300,000 from
$1,200,000 to $1,500,000. The proposal
follows consideration of Board succession
planning which identified a need to appoint
an additional Non-Executive Director. The
Board expects to appoint the new Director
in FY23.
Overview of FY22
Remuneration Outcomes
Total Fixed Remuneration (TFR)
The MD & CEO’s TFR increased 2% and CFO's
TFR increased 1% effective 1 January 2022.
All increases considered market movements,
individual performance and benchmarking to
relevant peers.
Variable Remuneration
Short-Term Incentives
Elders' Short-Term Incentive pool is aligned
with company performance and shareholders'
interests and reflects the very strong FY22
EBIT results.
The MD & CEO’s FY22 STI outcome was 74.5%
of maximum opportunity.
The CFO's FY22 STI outcome was
100% of maximum opportunity as per
separation arrangements.
Further details are in section 2.1 of this
Remuneration Report.
Long-Term Incentives vesting
The FY20 LTI grant 3 year performance period
ended 30 September 2022. 100% of this grant
vested based on:
• an absolute TSR outcome of 27.7% which
exceeded the stretch target of 14%
• an EPS CAGR outcome of 36.6% which
exceeded the stretch target of 10%
• a ROC outcome of 26.2% which exceeded
the stretch target of 18%
Further details are in section 2.2 of this
Remuneration Report.
Non-Executive Director Fees
The Board reviewed NED fees against market
fees and applied an increase of 2% to the Chair
fee, member Board fees and Committee fees
effective 1 January 2022. Further details are in
section 5.2 of this Remuneration Report.
54
Elders 2022 Annual Report
Key Management Personnel
In this report, 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.
The MD & CEO and Senior Executives considered KMP are referred to collectively as “Executive KMP” in this report.
FY22 Key Management Personnel
Name
Position
Non-Executive Directors
I Wilton
R Clubb
D Eilert
R Murphy
M Quinn
Chair
Director
Director
Director
Director
Executive KMP
M C Allison
Former Executive KMP
Managing Director and CEO
Status
Date as KMP (if not a full year)
Full year
Full year
Full year
Full year
Full year
Full year
T Foster
Chief Financial Officer
Part year
Ceased 31 August 2022
Remuneration Report
(cid:757)(cid:757)
(cid:4) Overview(cid:4) o(cid:74)
(cid:4) FY22(cid:4)
Section(cid:4) 1 (cid:606)
lders’(cid:4) remuneration(cid:4) framework(cid:4) is(cid:4) designed(cid:4) to(cid:4) attract,(cid:4) retain(cid:4) and(cid:4) motivate(cid:4) whilst(cid:4) driving(cid:4)
company performance(cid:4) and(cid:4) creation(cid:4) of(cid:4) shareholder(cid:4) value.
(cid:41) xecutive(cid:4)
(cid:54) emuneration
lders’(cid:4) culture(cid:4) and(cid:4) delivering(cid:4) our(cid:4) business(cid:4) strategy,(cid:4) long-term(cid:4)
1.1(cid:4)
(cid:54) emuneration(cid:4) Principles
(cid:56) o(cid:4) drive(cid:4) and(cid:4)
support(cid:4) delivery(cid:4) o(cid:74)
(cid:41) lders(cid:610)
(cid:4) strategy(cid:4) and(cid:4)
create(cid:4) long-term(cid:4)
s(cid:76) are(cid:76) older(cid:4) value.
Drive(cid:4) outcomes(cid:4) and(cid:4)
provide(cid:4) a(cid:4) balance(cid:4)
between(cid:4) motivation,(cid:4)
ris(cid:79)
(cid:4) and(cid:4) reward.
(cid:49) ar(cid:79) et(cid:4) competitive(cid:4)
to(cid:4) attract(cid:4) and(cid:4) retain(cid:4)
(cid:79) ey(cid:4) talent.
(cid:54) eward(cid:4) is(cid:4)
commensurate(cid:4)
wit(cid:76)
(cid:4) per(cid:74) ormance.(cid:4)
Decisions(cid:4)
are(cid:4) ob(cid:78) ective(cid:4)
and(cid:4) consistent.
Simple(cid:4) and(cid:4)
(cid:74) lexible(cid:4)
(cid:4) allowing(cid:4)
(cid:74) or(cid:4)
business(cid:4) growt(cid:76)
.
(cid:54) ein(cid:74) orces(cid:4)
(cid:41) lders(cid:11)
culture,(cid:4) vision(cid:4)
and(cid:4) values.
1.2(cid:4)
(cid:54) emuneration(cid:4) Structure(cid:4) and(cid:4)
Remuneration(cid:4) is(cid:4) structured(cid:4) so(cid:4) a(cid:4) portion(cid:4) of(cid:4) an(cid:4)
lders’(cid:4) targets(cid:4) and(cid:4) ob(cid:78) ectives,(cid:4) including(cid:4) maximising(cid:4) returns(cid:4) for(cid:4) shareholders.
ix
(cid:41) xecutive(cid:4)
(cid:47) MP’s(cid:4) and(cid:4) other(cid:4) Senior(cid:4)
(cid:41) xecutive(cid:11) s(cid:4) reward(cid:4) depends(cid:4) on(cid:4) meeting(cid:4) individual,(cid:4) business(cid:4) unit(cid:4) and(cid:4)
(cid:41) xecutive(cid:4)
(cid:47) MP(cid:4) and(cid:4) other(cid:4) Senior(cid:4)
(cid:41) xecutives(cid:4) remuneration(cid:4) elements,(cid:4) structure(cid:4) and(cid:4) delivery
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.
60% paid in cash
and 40% deferred
to equity
Long-Term Incentive
Supports alignment to
long-term overall company
performance rewarding for
delivery of longer term
strategy and creating
shareholder value.
100% delivered
in performance
rights
Subject to performance
targets across the
performance year
STI Cash
Deferred STI vests in 2 equal
tranches over 2 years
50% subject to relative TSR (and additional requirement of
absolute TSR is greater than or equal to zero)
50% subject to EPS growth
3 year performance period
1 year holding lock
Year 1
Year 2
Year 3
Year 4
(cid:41) xecutive(cid:4)
(cid:47) MP(cid:4) FY22 remuneration(cid:4) mix(cid:4) at(cid:4) maximum
MD & CEO
Performance Based
Total Fixed Remuneration 32%
Maximum STI 32%
Maximum LTI 36%
Senior Executives (Including KMP)
Performance Based
Total Fixed Remuneration 49%
Maximum STI 24%
Maximum LTI 27%
(cid:41)
(cid:41)
(cid:4)
(cid:606)
(cid:4)
(cid:49)
(cid:41)
(cid:757)(cid:758)
Elders (cid:754)(cid:752)(cid:754)(cid:754) Annual Report
Section(cid:4) 2 (cid:606)
(cid:38) etween(cid:4)
(cid:48) in(cid:79)
Outcomes
(cid:41) lders(cid:610)
(cid:4) Financial(cid:4) Per(cid:74) ormance(cid:4) and(cid:4) FY22(cid:4)
(cid:54) emuneration(cid:4)
2.1(cid:4) Overview(cid:4) o(cid:74)
(cid:4) FY22(cid:4) S(cid:56) I(cid:4) Outcomes
(cid:41) xecutive(cid:4)
(cid:47) MP(cid:4) FY22 S(cid:56) I(cid:4) performance(cid:4) measures
Category
Per(cid:74) ormance(cid:4) measure
(cid:59) eig(cid:76) ting
(cid:76) y(cid:4) was(cid:4) it(cid:4) c(cid:76) osen(cid:35)
(cid:44) ow(cid:4) is(cid:4) it(cid:4) measured(cid:35)
(cid:43) ateway
Financial(cid:4)
measures
Strategic(cid:4)
measures
-
(cid:41) xecutive(cid:4)
(cid:41) nsures(cid:4)
(cid:47) MP(cid:4) will(cid:4) only(cid:4) be(cid:4) awarded(cid:4)
where(cid:4) threshold financial, Code(cid:4) of(cid:4) Conduct,(cid:4)
safety(cid:4) and(cid:4) environmental(cid:4) performance(cid:4) has(cid:4)
been(cid:4) achieved.
,(cid:4)
(cid:41) BI(cid:56)
Achievement(cid:4) of(cid:4)
threshold(cid:4) performance(cid:4)
for(cid:4) underlying(cid:4)
greater(cid:4) than(cid:4) prior(cid:4) year(cid:4)
(cid:41) BI(cid:56)
fatalities,(cid:4) adherence(cid:4) to(cid:4)
lders(cid:4) Code(cid:4) of(cid:4) Conduct(cid:4)
and(cid:4) no(cid:4) significant
environmental(cid:4) event
(cid:4) outcome,(cid:4)
(cid:94) ero(cid:4)
Financial(cid:4) and(cid:4)
operational(cid:4)
performance
Strategic(cid:4) Priorities
60%
20%
(cid:47) ey(cid:4) indicators(cid:4) of(cid:4)
and(cid:4) aligned(cid:4) to(cid:4)
lders’(cid:4) financial(cid:4) performance(cid:4)
lders’(cid:4)
ight(cid:4) Point(cid:4) Plan(cid:4) ob(cid:78) ectives.
(cid:56) hreshold(cid:4) is(cid:4) based(cid:4) on(cid:4) achievement(cid:4) of:
(cid:4) budget
90%(cid:4) of(cid:4) the(cid:4) Board(cid:4) approved(cid:4) underlying(cid:4)
(cid:41) BI(cid:56)
greater(cid:4) than(cid:4) prior(cid:4) year(cid:4)
adherence(cid:4) to(cid:4)
(cid:94) ero(cid:4) fatalities
no(cid:4) significant(cid:4) environmental(cid:4) event.
(cid:4) outcome
lders(cid:4) Code(cid:4) of(cid:4) Conduct
(cid:41) BI(cid:56)
Below(cid:4) the(cid:4)
(cid:41) xecutive(cid:4)
(cid:4) threshold(cid:4) no(cid:4) S(cid:56) I(cid:4) is(cid:4) payable(cid:4) to(cid:4)
(cid:41) BI(cid:56)
(cid:47) MP.
Achievement(cid:4) of(cid:4) Board(cid:4) approved(cid:4) budget(cid:4) financial
outcomes,(cid:4) including(cid:4) underlying(cid:4)
Cash(cid:4) Flow(cid:4) and(cid:4) ROC(cid:4) targets.
,(cid:4) Operating(cid:4)
(cid:41) BI(cid:56)
(cid:56) he(cid:4) Board(cid:4) believes(cid:4) the(cid:4) strategic(cid:4) priorities(cid:4) of(cid:4)
lders’(cid:4)
ight(cid:4) Point(cid:4) Plan(cid:4) are(cid:4) fundamental(cid:4) key(cid:4)
drivers(cid:4) of(cid:4) long-term(cid:4) value(cid:4) creation.
(cid:4) C(cid:41) O(cid:4) is(cid:4) measured(cid:4) by(cid:4) the(cid:4) overall(cid:4) key(cid:4)
(cid:56) he(cid:4) MD(cid:4)
milestones(cid:4) of(cid:4) the(cid:4)
ight(cid:4) Point(cid:4) Plan(cid:4) which(cid:4) is(cid:4)
translated(cid:4) into(cid:4) an(cid:4) Annual(cid:4) Operating(cid:4) Plan.
People(cid:4) and(cid:4) safety
10%
Focusing(cid:4) on(cid:4) our(cid:4) people(cid:4) through(cid:4) diversity(cid:4) and(cid:4)
employee(cid:4) engagement(cid:4) is(cid:4) critical(cid:4) to(cid:4) continue(cid:4) to(cid:4)
attract(cid:4) and(cid:4) retain(cid:4) the(cid:4) talent(cid:4) needed(cid:4) to(cid:4) deliver(cid:4)
our(cid:4) strategy.
Safety(cid:4) is(cid:4) about(cid:4) driving(cid:4) significant(cid:4) progress(cid:4) in(cid:4)
achieving(cid:4) a(cid:4)
(cid:4) workplace.
(cid:94) ero(cid:4) harm(cid:613)
Customer
10%
Focusing(cid:4) on(cid:4) building(cid:4) and(cid:4) maintaining(cid:4) effective
customer(cid:4) relationships(cid:4) is(cid:4) key(cid:4) to(cid:4) a(cid:4) long-term(cid:4)
sustainable business.
(cid:41) xecutive(cid:4)
(cid:47) MP(cid:4) are(cid:4) measured(cid:4) on(cid:4)
Other(cid:4)
achievement(cid:4) of(cid:4) their(cid:4) Business(cid:4) Unit’s(cid:4) key(cid:4)
milestones(cid:4) in(cid:4) this(cid:4) Plan.
People(cid:4) is(cid:4) measured(cid:4) through(cid:4) positive(cid:4) movement(cid:4)
in(cid:4) the(cid:4) representation(cid:4) of(cid:4) women(cid:4) in(cid:4) management(cid:4)
and(cid:4) employee(cid:4) engagement(cid:4) and(cid:4) enablement.
Safety(cid:4) is(cid:4) measured(cid:4) through(cid:4) reduction(cid:4) in(cid:4) total(cid:4)
recordable(cid:4) in(cid:78) ury(cid:4) frequency(cid:4) rate(cid:4) and(cid:4) completion(cid:4)
of(cid:4) risk(cid:4) radar(cid:4) actions.
Measured(cid:4) through(cid:4) the(cid:4) Roy(cid:4) Morgan(cid:4)
and(cid:4) customer(cid:4) net(cid:4) promoter(cid:4) score.
(cid:56) rust(cid:4) Survey(cid:4)
MD(cid:4)
(cid:4) C(cid:41) O(cid:4) FY22(cid:4) S(cid:56) I(cid:4) outcomes
(cid:47) ey(cid:4) Priority
(cid:49) easures
(cid:56) arget
Outcome
FY22(cid:4) Per(cid:74) ormance(cid:4) Commentary
Financial(cid:4)
(cid:49) easures(cid:4)
(60%)
Strategic(cid:4)
Priorities(cid:4)
(20%)
People(cid:4)
Sa(cid:74) ety(cid:4) (10%)
Underlying(cid:4)
(cid:41) BI(cid:56)
$180m
$232.1m
Operating(cid:4) Cashflow(cid:4) (over(cid:4) 12-month(cid:4) period)
$114m
$113.7m
Return(cid:4) on(cid:4) Capital
22%
26.2%
Deliver(cid:4) Business(cid:4) Improvement(cid:4) initiatives(cid:4) to(cid:4) improve(cid:4)
rural product(cid:4) margin
+1% between(cid:4) 0%
and 1%
Deliver(cid:4) system(cid:4) modernisation(cid:4) pro(cid:78) ect(cid:4) as(cid:4) per(cid:4)
milestones(cid:4) and(cid:4) budget
Achievement(cid:4) of(cid:4) FY22(cid:4) Sustainability(cid:4) Action(cid:4) Plan
(cid:56) otal(cid:4) recordable(cid:4) in(cid:78) ury(cid:4) frequency(cid:4) rate(cid:4) ((cid:56) RIFR)
Completion(cid:4) of(cid:4) annual(cid:4) risk(cid:4) radars(cid:4) across(cid:4)
completion of(cid:4) risk(cid:4) radar(cid:4) actions
lders(cid:11)
(cid:4) and(cid:4)
Positive(cid:4) trend(cid:4) towards(cid:4) four(cid:4) Board(cid:4) endorsed(cid:4)
diversity(cid:4) ob(cid:78) ectives(cid:31)
25%(cid:4) of(cid:4) women(cid:4) in(cid:4) management(cid:4) positions(cid:4) across(cid:4)
the(cid:4) organisation
(cid:4) including(cid:4) working(cid:4) towards(cid:4)
Senior(cid:4) leadership(cid:4) development(cid:4) and(cid:4)
succession(cid:4) planning
Customer(cid:4)
(10%)
Roy(cid:4) Morgan(cid:4)
Brand in(cid:4) Regional(cid:4) Australia
(cid:56) rust(cid:4) Survey(cid:4) Results(cid:4) for(cid:4) most(cid:4)
(cid:56) rusted(cid:4)
Customer(cid:4) Net(cid:4) Promoter(cid:4) Score
(average(cid:4) across(cid:4) year)
Board(cid:4)
Assessed
Board(cid:4)
Assessed
<14
96%
70%
20%
(cid:41) xceeded(cid:4)
(cid:56) arget
(cid:56) arget
12.6
100%
87%
17%
Board(cid:4)
Assessed
(cid:56) arget
No.(cid:4) 1
No.(cid:4) 1
50%
48.7%
(cid:41) BI(cid:56)
(cid:4) was(cid:4) 39% higher(cid:4) than(cid:4) FY21.(cid:4) It(cid:4)
FY22(cid:4) underlying(cid:4)
substantially(cid:4) exceeded(cid:4) budget(cid:4) and(cid:4) prevailing(cid:4) market(cid:4)
expectations(cid:4) at(cid:4) the(cid:4) start(cid:4) of(cid:4) the(cid:4) year(cid:4) and(cid:4) was(cid:4) supported(cid:4)
by(cid:4) strong(cid:4) return(cid:4) on(cid:4) capital.(cid:4) Operating(cid:4) cash(cid:4) flow(cid:4) was(cid:4)
impacted(cid:4) by(cid:4) investment(cid:4) in(cid:4) working(cid:4) capital(cid:4) to(cid:4) support(cid:4)
the(cid:4) growth(cid:4) in(cid:4) business.
83.3%(cid:4) of(cid:4) this(cid:4) key(cid:4) priority(cid:4) was(cid:4) awarded.
Product(cid:4) margin(cid:4) growth(cid:4) fell(cid:4) short(cid:4) of(cid:4) target(cid:4) due(cid:4)
to(cid:4) dynamic(cid:4) global(cid:4) market(cid:4) conditions.(cid:4) System(cid:4)
modernisation(cid:4) pro(cid:78) ect,(cid:4) a(cid:4) key(cid:4) business(cid:4) transformation,(cid:4)
is(cid:4) meeting(cid:4) key(cid:4) pro(cid:78) ect(cid:4) milestones(cid:4) and(cid:4) budget.(cid:4) FY22
Sustainability(cid:4) Action(cid:4) Plan(cid:4) is(cid:4) meeting(cid:4) key(cid:4) milestones.
60%(cid:4) of(cid:4) this(cid:4) key(cid:4) priority(cid:4) was(cid:4) awarded.
Decrease(cid:4) in(cid:4)
(cid:56) RIFR,(cid:4) strong(cid:4) risk(cid:4) radar(cid:4) outcomes,(cid:4)
delivery of(cid:4) one(cid:4) of(cid:4) the(cid:4) four(cid:4) diversity(cid:4) ob(cid:78) ectives(cid:4)
and(cid:4) delivery(cid:4) of(cid:4) senior(cid:4) leadership(cid:4) development(cid:4) and(cid:4)
succession(cid:4) planning.
78.5%(cid:4) of(cid:4) this(cid:4) key(cid:4) priority(cid:4) was(cid:4) awarded.
lders(cid:4) continues(cid:4) to(cid:4) be(cid:4) the(cid:4) most(cid:4) trusted(cid:4) agribusiness(cid:4)
brand among(cid:4) farmers,(cid:4) through(cid:4) the(cid:4) efforts(cid:4) of(cid:4) our(cid:4)
employees.(cid:4) Our(cid:4) customer(cid:4) net(cid:4) promoter(cid:4) score(cid:4) fell(cid:4)
short(cid:4) of(cid:4) target.
(cid:78) ust(cid:4)
50%(cid:4) of(cid:4) this(cid:4) key(cid:4) priority(cid:4) was(cid:4) awarded.
Maximum(cid:4) performance(cid:4) achieved
(cid:56) hreshold/Minimum(cid:4) performance(cid:4) achieved
(cid:56) hreshold/Minimum(cid:4) performance(cid:4) not(cid:4) met
(cid:4)
(cid:4)
(cid:59)
(cid:41)
(cid:617)
(cid:617)
(cid:617)
(cid:41)
(cid:617)
(cid:617)
(cid:41)
(cid:41)
(cid:41)
(cid:41)
(cid:41)
(cid:10)
(cid:41)
(cid:612)
(cid:10)
(cid:10)
(cid:4)
(cid:41)
(cid:41)
Remuneration Report
57
2.1 Overview of FY22 STI Outcomes continued
Executive KMP FY22 STI outcomes and performance against targets
KMP
Financial Measures
(60%)
People and Safety
(10%)
Strategic Priorities
(20%)
Customer
(10%)
Maximum STI
Opportunity
Awarded
STI as % of
Maximum
Forfeited
STI as % of
Maximum
Company
Company
Company
Business Unit
$
%
%
M C Allison, MD
& CEO
Former KMP
T Foster, CFO
Meets target
Meets target
Meets target
-
Meets target
1,123,200
74.5%
25.5%
Meets target
Meets target
-
Meets target Meets target
313,700
1001
0
1 Approved by Board, to award 100% of STI in cash to the former CFO for the full FY22 as part of separation arrangements.
2.2 Overview of FY22 LTI Outcomes
The FY20 LTI grant, with a performance period of 3 years, concluded 30 September 2022. The testing resulted in 100% vesting.
Finalised LTI – FY20 grant
2.2 Overview of FY22 LTI Outcomes
% of Total Grant Performance Measures
Tranche 1 – Total Shareholder Return (TSR)
50%
Based on Elders’ average annual compound TSR over the
three year performance period 1 October 2019 ending on
30 September 2022. TSR rights were subject to a target goal
and a stretch goal. The percentage of TSR rights that vest were
determined as follows:
Absolute TSR over the
performance period
Less than 10%
Equals 10%
% of Rights that vest
Nil
50%
Greater than 10% but less
than 14%
50-100%, on a straight-line
sliding scale
Equal to or greater than 14%
100%
Absolute TSR was measured using opening and closing share
prices determined as follows:
• the opening share price value of $6.27
• 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 in the performance period
Outcome of Testing
Elders’ absolute TSR over the performance period was 27.7%.
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 2019 of
$6.27 and the closing share price of Elders' 5 trading day VWAP as at
30 September 2022 of $11.887.
Dividends paid over the performance period were $1.01 per share.
An external consultant (PFS Consulting) was engaged to calculate the
TSR outcome.
Tranche 2 – Earnings per Share Growth
25%
EPS rights vest subject to achievement of Target or above EPS
Compound Annual Growth Rate (CAGR) over the performance
period as follows:
Elders' EPS growth over the performance period was 36.6%.
Resulting in 100% vesting of this tranche.
As communicated in FY20, EPS for the purposes of LTI will be calculated
using the weighted average shares as the denominator and underlying
NPAT3 as numerator. The EPS outcome for FY22 was determined as follows:
% of Rights that vest
FY19
FY20
FY21
FY22
EPS CAGR over the
performance period
Less than 7%
Equals 7%
Nil
50%
Weighted avg. no. of
shares1 (000)
Underlying NPAT ($ million)
121,006
154,094
156,305
156,477
63.6
52.6
109.02
151.1
70.72
96.7
209.73
134.13
36.6%
Greater than 7% but less
than 10%
50-100%, on a straight-line
sliding scale
EPS (cents)
CAGR
Equal to or greater than 10%
100%
58
Elders 2022 Annual Report
2.2 Overview of FY22 LTI Outcomes
% of Total Grant Performance Measures
Outcome of Testing
Reconciliation of statutory profit to underlying profit used to calculate EPS for this LTI grant FY22
Statutory Profit ($ million)
● Basic EPS (cents) – Statutory Profit
Adjustment for non-underlying items ($ million)
Underlying NPAT ($ million)
● Basic EPS (cents) - Underlying NPAT
Adjustment for tax expense
Adjusted NPAT ($ million)3
● Basic EPS (cents) - Adjusted NPAT
Weighted average shares (millions of shares)
Reconciliation of tax expense adjustment
Statutory tax expense
Add back of tax expense
relating to entity outside the tax
consolidated group
Add back of non-underlying
tax expense
Adjustment for tax expense
162.9
104.1
(10.7)
152.2
97.3
57.5
209.7
134.1
156.5
67.7
(6.6)
(3.6)
57.5
For a reconciliation between underlying and NPAT please see the Operating
and Financial Review section of the Annual Report.
The weighted average shares are displayed in note 4 of the
Financial Statements.
Elders’ return on capital as at 30 September 2022 was 26.2%.
Resulting in 100% vesting of this tranche.
ROC = Underlying EBIT/Average Net Operating Assets
Average Net Operating Assets = Working Capital, PP&E, Investments,
Intangibles, Tax Balances Recognised on Acquisitions and Provisions
(Excludes Elders Brand Name)
Tranche 3 – Return on Capital (ROC)
25%
ROC rights vest in full if ROC was greater than or equal to 18%
for the financial year ending 30 September 2022.
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 2019, being a day prior to the start of the
performance period.
The VWAP as at 30 September 2019 was $6.27 therefore it is expected,
based on the share price as at the date of this Report, that the vesting
condition will be met (vesting will occur no later than 30 November 2022).
1 Shares exclude dilutive performance rights which have not yet vested. For FY22 , no rights were deemed to be dilutive refer to note 4 of the finanical statements.
2 Pre-AASB 16 Leases, the FY20 EPS outcome applying AASB 16 Leases is 69.9c.
3 As approved by the Board, the underlying NPAT component of the EPS calculation was adjusted for certain tax charges recognised during the year. This is to present the underlying NPAT on a comparable
basis to align tax treatment across the periods. The Board utilised its discretion on the treatment of tax.
One fully paid share in Elders will be allocated for each vested performance right. The total number of vested performance rights under the FY20 grant is
487,916. In addition, 41,455 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 section 7.
Remuneration Report
59
2.3 Summary of FY22 Executive KMP Outcomes
This table presents actual remuneration paid or payable, or vested for the Executive KMP in respect of FY22. The information is voluntary, unaudited,
different from and additional to that required by Australian accounting standards and statutory requirements, which is provided in section 6.2.
Executive KMP Remuneration outcomes for FY22 (unaudited and non-IFRS)
Base salary
Total STI1
Values of
Shares
Vested2
Super-
annuation
Other3
Termination
benefits
Total
M C Allison
MD & CEO
1,093,695
836,971
1,847,474
23,999
$
$
$
$
$
-
$
-
$
3,802,139
Former KMP
T Foster4
Total
CFO
573,850
313,700
-
1,667,545
1,150,671
1,847,474
23,999
47,998
50,570
301,053
1,263,172
50,570
301,053
5,065,311
1 STI cash and deferral component that will be paid for performance in FY22.
2 Value of the FY19 LTI grant that vested in the FY22 year.
3 Second payment of sign on bonus paid to T Foster and relocation assistance.
4 T Foster's base salary and superannuation was disclosed up to cessation of employment on 31 August 2022.
2.4 Historical Five Year Performance
Highlights Elders’ key financial performance over the past five years and link to the Senior Executive KMPs' STI and LTI remuneration outcomes.
Elders' CAGR Performance FY18 to FY221
1 As approved by the Board, the underlying NPAT component of the EPS calculation was adjusted for certain tax charges recognised during the year. This is to present the underlying NPAT on a comparable
basis to align tax treatment across the periods. The Board utilised its discretion on the treatment of tax.
Elders’ Remuneration Outcomes
Remuneration outcomes
STI – average % received of maximum opportunity
LTI – vesting %
2018
81%
100%
2019
0%
75%
2020
94%
75%
2021
95%
100%
2022
87%
100%
FY18 FY19 FY20 FY21 FY22Sales Revenue ($m)1,5991,6262,0932,5493,445+ 21.1%CAGRUnderlying EBIT ($m)7574121167232+ 32.6%CAGRUnderlying Earningsper Share (cents)+15.0%CAGR Underlying NPAT ($m)1108151152+24.2%CAGR6464Return on Capital (%)192326+2.2%2418Dividends per Share (cents)224256+32.8%CAGR1818FY18 FY19 FY20 FY21 FY22FY18 FY19 FY20 FY21 FY22FY18 FY19 FY20 FY21 FY22FY18 FY19 FY20 FY21 FY22FY18 FY19 FY20 FY21 FY22Share Price Movement (cents)453138(38)221(68)FY18 FY19 FY20 FY21 FY225553709797Adjusted Underlying Earningsper Share for Vesting (cents)1+25.0%CAGRFY18 FY19 FY20 FY21 FY225553709713497Adjusted underlying EPS
60
Elders 2022 Annual Report
2.4 Historical Five Year Performance continued
This chart shows Elders’ annual TSR performance over the last five years against the S&P/ASX 200 Accumulation Index. Elders’ LTI Plans for FY18, FY19
and FY20 include an absolute TSR performance condition. Full vesting of the TSR tranche (50% of total grant for FY18 and FY19, and 33.3% of FY20) was
achieved for grants under the FY18, FY19 and FY20 LTI Offers.
Absolute TSR %
ASX200
Elders
48.1%48.1%
%
R
S
T
e
t
u
o
s
b
A
l
14.00%
14.00%
12.50%
12.50%
77.1%77.1%
30.60%
30.60%
14.6%14.6%
2.6%2.6%
-7.7%-7.7%
-7.0%-7.0%
-10.20%
-10.20%
2018
2019
2020
2021
2022
This chart compares Elders’ total LTI vesting results for grants in FY16-20 to Elders’ share price during the same period.
LTI Plan performance outcomes relative to Elders' share price
Elders share priceLTI award (% vested)100%75%75%100%100%0%10%20%30%40%50%60%70%80%90%100%0246810121401/10/201701/10/2018LTI Grant: FY1601/10/2019LTI Grant: FY1701/10/2020LTI Grant: FY1801/10/2021LTI Grant: FY1901/10/2022LTI Grant: FY20Elders share price ($)LTI award (% vested)16
Remuneration Report
61
Section 3 – Details of the Executive Remuneration Framework
3.1 Current Short-Term and Long-Term Incentive Plan Structures
Current STI Structure FY22
Performance Period
Annual aligned with financial year – 1 October 2021 to 30 September 2022
Maximum STI Opportunity as % of TFR
100% of TFR
50% of TFR
MD & CEO
Senior Executives
Performance Measure(s)
Gateway: Underlying EBIT (90% of Target), greater than prior year EBIT, zero fatalities, adherence to Elders Code of
Conduct and no significant environmental events are achieved.
Equity Deferral
Once the gateway has been achieved, individual STI for the Executive KMPs are 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 section 2.1 for further details on Executive KMP FY22 STI performance measures.
40% of any STI earned by Executive KMP is delivered in locked Elders shares with half released at the end of year
one and the balance released at the end of year two. These shares are held in trust subject to trading restrictions
and are contingent on the Executive KMP remaining employed at the end of each period. During the restriction
periods, the shares are subject to forfeiture if the Executive KMP resigns or is terminated for cause, unless the Board
determines otherwise. No further performance conditions apply and shares fully vest to the participant at the end of
the restriction period if the continued service requirement is met.
As the shares are awarded in lieu of cash and relate to an incentive that has already been earned, during the
restriction period Executive KMP are entitled to all dividend and voting entitlements applying to the shares held in
trust in their name.
Exercise of Discretion
The MD & CEO may recommend discretionary incentive payments to Senior Executives for approval by the Board.
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, and any other special circumstances (e.g. acquisitions and divestments).
The Board has discretion to reduce or deny individual STI outcomes in relation to any significant breach of Elders’
Code of Conduct, One Elders values or significant environmental events.
Clawback
Elders may recover amounts paid 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.
62
Elders 2022 Annual Report
3.1 Current Short-Term and Long-Term Incentive Plan Structures continued
Current LTI Plans Structure
FY21
FY22
Performance Period (3 years)
1 October 2020 to 30 September 2023
1 October 2021 to 30 September 2024
Maximum LTI Opportunity % of TFR
Grant Date
17-Dec-20
12-Mar-21
MD & CEO – 110%, Senior Executives – 55%
MD & CEO
16-Dec-21
MD & CEO
other participants
22-Dec-21
other participants
As at 30 September 2022
101,000 Rights
MD & CEO
102,400 Rights
MD & CEO
No. of Rights Outstanding and no. of Participants
235,667 Rights
18 other participants
223,700 Rights
19 other participants
Grant Methodology
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).
Performance Conditions
The performance rights are split into two tranches.
Performance Measures and Vesting
Tranche 1 – Relative TSR Against Comparator Companies Performance Rights
Tranche 1
Tranche 2
Relative TSR
EPS Growth
50% weighting
50% weighting
50% of rights vest subject to Elders' TSR performance relative to the TSR performance of the Comparator Companies
over the Performance Period (subject to Elders' absolute TSR over the Performance Period being greater than or
equal to zero).
Elders' TSR Percentile Rank
% of Tranche that Vest
50th Percentile
75th Percentile or above
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
• 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
The Comparator Companies for the purposes of this
tranche comprises of the companies in the S&P/ASX 200
index excluding the companies in the S&P/ASX 100 as as
the start of the Performance Period.
Tranche 2 – EPS Growth Performance Rights
The Comparator Companies for the purposes of
this tranche comprises of the companies in the
S&P/ASX 200.
50% of rights vest in full if 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.
Target
Stretch
EPS CAGR
% of Tranche that Vest
7.5%
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
Remuneration Report
63
3.1 Current Short-Term and Long-Term Incentive Plan Structures continued
Current LTI Plans Structure
FY21
FY22
Holding Lock
Performance Testing
Clawback
Dividends
Treatment of Unvested Rights on Cessation
of Employment
Dealing in Securities
Change of Control
Corporate Actions/Reconstructions
Board Discretion
Future Considerations
A 12 month holding lock on shares awarded under the LTI. A participant is entitled to receive dividends and other
distributions and exercise full voting rights.
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.
No compensation for the value of dividends not received.
The Board has overriding discretion over the treatment of unvested performance rights when a participant ceases
employment. On cessation of employment the Board may, amongst other options, allow the participant to retain a
pro-rated number of rights based on the portion of the performance period the participant has worked or to lapse
all rights.
Participants are prohibited from taking out derivatives over performance rights. In addition, after vesting of
performance rights, all dealings in shares issued to a participant are regulated by Elders’ Securities Dealing Policy
which requires, amongst other things, that dealings only take place during open periods specified by Elders.
In the event of a transaction, event or state of affairs that, in the Board’s opinion, is likely to result in a change
of control of the Company, the Board may, in its absolute discretion, determine that all or a specified number of
a participant’s unvested performance rights and/or options vest or cease to be subject to restrictions. If the Board
does not make a determination, participants will retain all of their incentive securities and the incentive securities
will continue to be subject to the original terms of the grant.
Prior to 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 benefitted the company
If discretion is to be exercised, it may be a result of events such as:
• acquisitions and acquisition costs
• divestments
• changes to tax treatments
• 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
From FY22 onwards, Elders has resolved to include items of tax expense and/or benefit in Underlying NPAT. As
Elders has recognised all tax losses on balance sheet in FY21, the Underlying tax expense will no longer be offset
by an income tax benefit as a result of tax losses recognition. The Board will seek to exercise its discretion on
the EPS outcomes of future LTI vesting by adjusting the tax expense across the Performance Period to ensure
comparability across the performance period. The performance measures will be as intended as the Board originally
set. Shareholders will be provided with a reconciliation.
(cid:758)(cid:756)
Elders (cid:754)(cid:752)(cid:754)(cid:754) Annual Report
Section(cid:4) 4 (cid:606)
(cid:56) he(cid:4) Board(cid:4) Remuneration(cid:4) and(cid:4) Human(cid:4) Resources(cid:4) Committee(cid:4) operates(cid:4) in(cid:4) accordance(cid:4) with(cid:4) the(cid:4) guidance(cid:4) set(cid:4) out(cid:4) in(cid:4) the(cid:4) 4th(cid:4)
(cid:43) overnance(cid:4) Council(cid:4) Principles(cid:4) and(cid:4) Recommendations.
(cid:54) emuneration(cid:4)
(cid:43) overnance
(cid:41) dition(cid:4) of(cid:4) the(cid:4) AS(cid:60)
(cid:4) Corporate(cid:4)
Further(cid:4) information(cid:4) on(cid:4) the(cid:4) role(cid:4) and(cid:4) responsibilities(cid:4) of(cid:4) the(cid:4) Committee(cid:4) is(cid:4) set(cid:4) out(cid:4) in(cid:4) the(cid:4) Corporate(cid:4)
Charter,(cid:4) is(cid:4) publishedon(cid:4) the(cid:4)
lders(cid:4) Investor(cid:4) Centre1.
(cid:43) overnance(cid:4) Statement,(cid:4) which(cid:4) along(cid:4) with(cid:4) the(cid:4) Committee’s(cid:4)
(cid:56) he(cid:4) Committee(cid:4) is(cid:4) comprised(cid:4) entirely(cid:4) of(cid:4) independent(cid:4) Non-(cid:41) xecutive(cid:4) Directors.
Board
Reviews the performance of individual Directors and the Executive
team, and approves the CEO’s remuneration.
Management
Provides briefs or recommendations to
the BRHRC on the remuneration
strategy and framework.
Board Remuneration
and Human Resources
Committee (BRHRC)
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.
Independent external advisors
Provide independent advice to the
BRHRC on remuneration and market
practice.
4.1(cid:4) Independent(cid:4) remuneration(cid:4) advice
(cid:56) he(cid:4) Committee(cid:4) is(cid:4) briefed(cid:4) by(cid:4) management,(cid:4) however,(cid:4) the(cid:4) Committee(cid:4) makes(cid:4) all(cid:4) decisions(cid:4) free(cid:4) of(cid:4) the(cid:4) influence(cid:4) of(cid:4) management.
Further(cid:4) to(cid:4) the(cid:4) management(cid:4) briefings,(cid:4) to(cid:4) assist(cid:4) in(cid:4) its(cid:4) decision-making,(cid:4) the(cid:4) Committee(cid:4) may,(cid:4) from(cid:4) time(cid:4) to(cid:4) time,(cid:4) seek(cid:4) independent(cid:4) advice(cid:4) from(cid:4) remuneration(cid:4)
advisors, and(cid:4) in(cid:4) so(cid:4) doing(cid:4) will(cid:4) directly(cid:4) engage(cid:4) with(cid:4) the(cid:4) advisor(cid:4) without(cid:4) management(cid:4) involvement.
In(cid:4) the(cid:4) year(cid:4) ending(cid:4) 30(cid:4) September 2022,(cid:4) the(cid:4) Committee(cid:4) has(cid:4) not(cid:4) sought(cid:4) independent(cid:4) advice(cid:4) from(cid:4) remuneration(cid:4) advisors,(cid:4) therefore(cid:4) no(cid:4) remuneration(cid:4)
recommendations,(cid:4) as(cid:4) defined(cid:4) by(cid:4) the(cid:4)
(cid:37) ct(cid:4) 2001(cid:4) (Cth),(cid:4) were(cid:4) made(cid:4) by(cid:4) remuneration(cid:4) advisors.
(cid:39) or(cid:84) orations(cid:4)
1
lders(cid:11)
(cid:4) 2022(cid:4)
(cid:39) or(cid:84) orate(cid:4)
(cid:43) overnance(cid:4)
(cid:55) tate(cid:81) ent(cid:4) can(cid:4)
(cid:70) e(cid:4)
(cid:74) o(cid:89) nd(cid:4) online(cid:4) at(cid:4) investors.eldersli(cid:81)
ited.co(cid:81)
/investor-centre
(cid:4)
(cid:41)
(cid:41)
Remuneration Report
65
Section 5 – Non-Executive Director Remuneration and Statutory Remuneration
5.1 Remuneration Framework and Policy
Non-Executive Directors are remunerated by way of fees in the form of cash and superannuation.
NEDs do not participate in Elders’ cash or equity incentive plans and do not receive retirement benefits other than superannuation contributions disclosed
in this report.
NED 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 information from external remuneration advisors.
The Board believes Elders’ NEDs should own securities in Elders to further align their interests with the interests of other shareholders. Elders’ Minimum
Shareholding Policy was 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 NEDs’ shareholdings in Elders can be found in section 7.
5.2 Non-Executive Director Fees in FY22
Total fees for the financial year ended 30 September 2022 remain within the aggregate fee limit of $1,200,000 per annum, (including superannuation
guarantee), approved by the Board following Elders’ 2013 Annual General Meeting. Approval is being sought at the AGM to increase the NED Fee Pool by
$300,000 from $1,200,000 including superannuation to $1,500,000 including superannuation. The proposal follows consideration of Board succession
planning, which identified a need to appoint an additional Non-Executive Director. The Board expects to appoint the new Director in FY23.
The Board reviewed the NED fees during FY22 and applied a 2% increase to all Chair and member fees. Previous reporting of NED fees excluded
superannuation, for FY22 superannuation is included.
Non-Executive Director fee
Board
Audit, Risk and Compliance Committee
Work Health and Safety Committee
Remuneration and Human Resources Committee
Nomination and Prudential Committee
1 Showing fees effective 1 January 2022. NED Board fees previously presented excluding superannuation.
2 The Chair of the Board does not receive additional Committee fees.
Non-Executive Director remuneration
FY22 fee including superannuation1
Chair
$
298,9682
33,660
Nil
22,440
Nil
I Wilton
R Clubb
D Eilert
R Murphy1
M Quinn
Total
1 R Murphy commenced as Non-Executive Director on 28 January 2021.
Short-term payments
Post-employment
Base Board fee Board Committee fees
Superannuation
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
$
273,619
262,500
118,620
115,750
118,620
115,750
118,620
78,929
118,620
115,750
748,099
688,679
$
-
-
40,554
40,000
36,498
36,000
26,360
17,540
26,360
26,000
129,772
119,540
$
23,999
22,163
16,117
14,992
15,706
14,608
14,680
9,343
14,680
13,645
85,182
74,751
Member
$
131,274
17,952
Nil
10,200
Nil
Total
$
297,618
284,663
175,291
170,742
170,824
166,358
159,660
105,812
159,660
155,395
963,053
882,969
66
Elders 2022 Annual Report
Section 6 – Key Terms of Executive KMP Employment Contracts and Statutory
Remuneration
6.1 Contractual Arrangements of Executive KMP
Contractual arrangements
Component
Contract Duration
Notice (without cause) initiated by:
Elders
Individual
MD & CEO
Senior Executives
Ongoing until terminated by either party
12 months
6 months
6 months
3 months
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.
Notice for Serious Misconduct
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 contract on three months’ notice.
Remuneration Report
67
6.2 Executive KMP Statutory Remuneration
Executive KMP remuneration
Short-term payments
Post-
employment
Share-based payments1
Long-term
payments
Termination
benefits2
Total
Base
salary
Cash STI
Annual
Leave
Other4
Super-
annuation
Deferred
STI rights
LTI
Performance
rights
Long
service
leave5
$
$
$
$
$
$
$
$
$
$
M C Allison
2022
1,093,695
502,183
(63,655)
2021
1,015,969
605,280
87,795
23,999
310,075
619,801
(219,140)
22,163
170,611
692,980
71,103
-
-
2,266,958
2,665,901
%
performance
related3
-
-
n/a
412
n/a
-
n/a
n/a
n/a
151,577
-
52,685
n/a
n/a
n/a
390,096
204,000
158,365
573,850
313,7008
32,726
50,570
183,934
98,4309
4,455
18,265
n/a
7,231
n/a
22,163
23,999
11,316
Former
KMP6
J H Cornish
R I Davey
T Foster7
M Hunt10
R L Norton
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
n/a
n/a
n/a
n/a
n/a
n/a
-
(169,908)
198,910
459,006
699,913
-24%
n/a
n/a
n/a
n/a
n/a
n/a
109,472
248,509
261,588
1,394,193
-
-
-
81,695
-
n/a
-
-
n/a
301,053
1,377,593
-
n/a
-
n/a
316,400
n/a
449,470
n/a
%
63%
55%
22%
29%
31%
n/a
39%
n/a
0%
n/a
n/a
n/a
n/a
n/a
n/a
223,155
71,036
4,434
17,662
13,432
20,021
83,89411
15,836
n/a
n/a
n/a
n/a
n/a
41,570
-
35,195
2,830
14,463
n/a
-
n/a
-
n/a
-
249,419
343,477
Total
2022
1,667,545
815,883
(30,929)
50,570
47,998
310,075
701,496
(219,140)
301,053
3,644,551
2021
2,006,301
978,746
342,929
39,169
90,768
190,632
716,438
534,358
970,013
5,869,354
1 The amortisation of the fair value of the FY21 equity based STI was fully recognised in FY21. The 2021 comparative value has been restated to reflect the appropriate amortisation of the STI component over
the appropriate vesting period. Additionally, the vesting period for the FY21 LTI granted to M C Allison & M Hunt did not include the 12 month holding lock period which is a vesting condition in relation to
the KMPs' service requirement. The 2021 comparative values have been restated to include the additional 12 month holding lock period as part of the vesting and amortisation period. This has resulted in
a total decrease of $332,956.
2 Comprised of redundancy payments under Elders’ redundancy policy and/or payments in lieu of notice and comply with Part 2D.2 of the Corporations Act 2001 (Cth).
3 Performance related remuneration consists of cash STI and share based payments (including deferred STI) as a percentage of total remuneration.
4 Includes car parking (M Hunt, J Cornish, R Norton), living away from home allowance (J Cornish), company leased vehicles (M Hunt, R Norton) and sign on bonus and relocation assistance (T Foster).
5 Former KMP data is statutory leave entitlements paid on separation.
6 Former KMP reflect the changes in restructure of Elders executive during the period.
7 T Foster's data for 2021 pro-rata from commencement with Elders, 31 May 2021. Data for 2022 base salary was disclosed up to cessation of employment with Elders, 31 August 2022.
8 For FY22 T Foster's STI will be paid 100% cash.
9 For FY21 T Foster's STI was paid 100% cash.
10 M Hunt's data pro-rata from date of commencement in EGM National & VIC/RIV role, 8 March 2021. For FY22 the role was not considered as a KMP as determined by the Board.
11 In FY21, M Hunt was appointed as a KMP effective 8 March 2021 in which the LTI expense was not apportioned to the period where he was a KMP. The 2021 comparative value has been restated to reflect
the appropriate apportioned expense of the FY21 LTI component to the period he was a KMP, resulting in a decrease of $70,859 .
68
Elders 2022 Annual Report
Section 7 – Additional Required Disclosures
Details of Executive KMP current LTI grants and STI restricted shares
Type
Grant date1 Balance
at start
of
period
Granted Vesting
Vested2
Lapsed
date
Balance3 Expensed
at end of
period
Fair
Value at
grant
date4
Rights
maximum
value
yet to
vest5
No.
No.
No.
%
No.
%
No.
$
$
$
M C Allison
LTI
LTI
LTI
LTI
13-Dec-18 146,000
12-Dec-19 166,0006
17-Dec-20 101,000
-
-
-
Nov-22
Nov-23
16-Dec-21
- 102,400
Nov-24
-
-
-
Nov-21 146,000
100
LTI Total
413,000 102,400
146,000
STI
STI
22-Dec-21
22-Dec-21
STI Total
-
-
-
16,727
Sep-22
16,726
Sep-23
33,453
Former KMP
T Foster7
LTI
22-Dec-21
-
28,600
Nov-24
1 The grant dates are aligned to the requirements under the Accounting Standards.
2 The exercise price for the rights was nil.
3 The balance represents 100% of unvested rights as of 30 September 2022.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 166,000 264,493 793,480
-
-
- 101,000 163,984 683,265 355,298
- 102,400 191,324 797,184 605,860
369,400 619,801 2,273,929 961,158
-
-
16,727 102,369 204,738
-
16,726
68,242 204,726
68,242
33,453 170,611 409,464
68,242
19,067
67
9,533
81,695 245,102
-
4 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 option
for TSR tranche. A discounted cash flow model was used for the fair value of the EPS tranche. Fair value utilised for FY22 LTI Grant, tranche 1, MD & CEO $5.13, Senior Executive $5.99 and Tranche 2, MD &
CEO $10.44 and Senior Executive $11.15 (for more information see note 26 financial statements).
Fair value is used to calculate the value of restricted shares for the STI Plan. Fair value utilised for FY21 restricted shares is $12.24 per share.
5 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.
6 For the FY20 LTI grant expected to vest November 2022, additional shares of 14,104 will be allocated to the Executive KMP at the time of vesting for the value of dividends not received during the
performance period on the vested rights.
7 No LTI grants were made to T Foster in FY21 as commencement with Elders was 1 May 2021. T Foster ceased employment on 31 August 2022, as per the LTI Plan Rules a portion of T Foster rights has
continued on foot, based on the percentage of performance period completed for each grant.
Executive KMP shareholding
M C Allison
Former KMP
T Foster
Total
Shares held at
start of year
1 October 2021
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 period1
800,000
33,4532
155,293
19
800,019
3863
33,839
-
155,293
-
-
988,746
405
989,151
1 Balance of shares helds at end of financial period for former KMP is the date of cessation of employment.
2 Represents the deferred component of FY21 STI in restricted shares.
3 Reflects shares acquired through the Deferred Employee Share Plan for FY22.
Non-Executive Directors shareholding
I Wilton
R Clubb
D Eilert
M Quinn
R Murphy
Total
Remuneration Report
69
Shares held at
start of year
1 October 2021
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
131,193
12,400
13,769
15,597
4,000
176,959
-
-
-
-
-
-
-
1,600
-
5,742
2,500
9,842
131,193
14,000
13,769
21,339
6,500
186,801
Note: No other changes occurred during the year. None of the shares in the two tables above are held by the Non-Executive Directors or Executive KMP.
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 limits
the opportunities for Non-Executive Directors to acquire Elders’ shares.
Other equity schemes in which one or more KMP participate
Description
Deferred
Employee
Share Plan
(DESP)1
This plan enables participants to salary sacrifice remuneration up to
$5,000 to acquire restricted shares. Tax can be deferred up to 15
years. Elders makes no contribution to this plan other than funding
the costs of administration.
There are no further performance or service conditions once shares
are purchased.
Eligibility
Criteria
Number of participants
as at
Number of outstanding
shares as at
30 Sept
2021
All permanent
employees
241
30 Sept
2022
200
30 Sept 2021 30 Sept 2022
170,881
186,443
1 T Foster participated in 2021 and 2022 and held 405 shares under this Plan accumulated in FY21 and FY22.
7.1 Other transactions and loans 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 in 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.
(cid:759)(cid:752)
Elders (cid:754)(cid:752)(cid:754)(cid:754) Annual Report
Executive
Management
(cid:49) ar(cid:79)
(cid:49) ana(cid:75)
(cid:4) Allison
(cid:4) Director(cid:4)
in(cid:75)
(cid:43) D(cid:49)
(cid:41) con,(cid:4)
(cid:75) r(cid:55) c,(cid:4)
(cid:76)i e(cid:74)
(cid:92) ec(cid:89) tive(cid:4) Officer
,(cid:4) F(cid:37)
(cid:39) D,(cid:4)
(cid:49) P(cid:4) ((cid:44)
lders(cid:4)
(cid:78) oined(cid:4)
Mr(cid:4) Allison(cid:4)
(cid:48) imited(cid:4) as(cid:4) a(cid:4) Non-(cid:41) xecutive(cid:4)
Director in(cid:4) December(cid:4) 2009,(cid:4) served(cid:4) as(cid:4) Chairman(cid:4) and(cid:4)
(cid:41) xecutive(cid:4) Chairman,(cid:4) before(cid:4) being(cid:4) appointed(cid:4) Managing(cid:4)
Director(cid:4) and(cid:4) Chief(cid:4)
(cid:41) xecutive(cid:4) Officer(cid:4) in(cid:4) May(cid:4) 2014.
Mr(cid:4) Allison’s(cid:4) agribusiness(cid:4) career(cid:4) of(cid:4) more(cid:4) than(cid:4)
40(cid:4) years(cid:4) spans(cid:4) technical,(cid:4) manufacturing,(cid:4) supply(cid:4)
and(cid:4) distribution(cid:4) roles(cid:4) and(cid:4) business.(cid:4) Previous(cid:4) roles(cid:4)
include(cid:4) Managing(cid:4) Director/C(cid:41) O(cid:4) of(cid:4)
(cid:48) imited,(cid:4) Jeminex(cid:4)
(cid:48) andmark(cid:4)
CropCare(cid:4) Australasia(cid:4) Pty(cid:4)
Incitec(cid:4) Fertilisers.
rain(cid:43)
rowers(cid:4)
(cid:48) td,(cid:4) Wesfarmers(cid:4)
(cid:48) imited(cid:4) and(cid:4)
(cid:43) eneral(cid:4) Manger(cid:4) of(cid:4)
(cid:48) imited,(cid:4) Farmo(cid:94)
(cid:4) Pty(cid:4)
(cid:48) imited,(cid:4) Wesfarmers(cid:4) CSBP(cid:4)
(cid:48) td(cid:4) and(cid:4)
Paul(cid:4)
(cid:37) ctin(cid:75)
(cid:37) cc,(cid:4)
(cid:54) ossiter
(cid:76)i e(cid:74)
,(cid:4) F(cid:45)
(cid:39) P(cid:37)
(cid:4) Financial(cid:4) Officer
Paul(cid:4) was(cid:4) appointed(cid:4) to(cid:4) the(cid:4) role(cid:4) of(cid:4) Acting(cid:4) Chief(cid:4) Financial(cid:4)
Officer(cid:4) in(cid:4) August(cid:4) 2022, after(cid:4) serving(cid:4) the(cid:4) business(cid:4) since(cid:4)
2004.(cid:4) Paul(cid:4) has(cid:4) been(cid:4)
(cid:56) reasurer(cid:4) since(cid:4) 2012.
roup(cid:4)
(cid:78) oining(cid:4)
Prior(cid:4) to(cid:4)
lders,(cid:4) Paul(cid:4) worked(cid:4) for(cid:4) employers(cid:4) in(cid:4)
the(cid:4) finance(cid:4) sector(cid:4) including(cid:4) Credit(cid:4) Suisse(cid:4) in(cid:4) Sydney(cid:4)
and(cid:4) Morgan(cid:4) Stanley(cid:4) in(cid:4)
(cid:48) ondon.(cid:4) Paul(cid:4) is(cid:4) a(cid:4) Certified
(cid:54) usso
(cid:56) om(cid:4)
(cid:92) ec(cid:89) tive(cid:4)
(cid:43) eneral(cid:4)
(cid:49) ana(cid:75) er(cid:4)
(cid:4) ((cid:44) ons(cid:13) ,(cid:4)
,(cid:4)
(cid:43) rad(cid:4) Di(cid:84)
(cid:50) ational(cid:4)
(cid:4) Pro(cid:84)
(cid:48) P,(cid:4) Di(cid:84)
ictoria,(cid:4)
(cid:55) erv(cid:4) ((cid:37)
(cid:75) enc(cid:93)
iverina(cid:4)
(cid:75) t(cid:13)
(cid:41) xecutive(cid:4)
(cid:56) om(cid:4) was(cid:4) appointed(cid:4)
Network(cid:4) in 2022,(cid:4) prior(cid:4) to(cid:4) which(cid:4) he(cid:4) has(cid:4) held(cid:4) several(cid:4)
other(cid:4) roles(cid:4) within(cid:4) the(cid:4)
(cid:43) eneral(cid:4) Manager(cid:4)
lders(cid:4) group.
(cid:56) om(cid:4) was(cid:4)
(cid:41) xecutive(cid:4)
(cid:41) state,(cid:4) Brand(cid:4)
(cid:43) eneral(cid:4) Manager(cid:4)
(cid:4) Communications.(cid:4) During(cid:4) his(cid:4)
Most(cid:4) recently,(cid:4)
Real(cid:4)
tenure(cid:4) in(cid:4) that(cid:4) role(cid:4) the(cid:4) gross(cid:4) margin(cid:4) contribution(cid:4) of(cid:4)
the(cid:4) real(cid:4) estate(cid:4) product(cid:4) more(cid:4) than(cid:4) doubled(cid:4) and(cid:4) he(cid:4) has(cid:4)
established(cid:4) a(cid:4) strategic(cid:4) marketing(cid:4) and(cid:4) communications(cid:4)
function(cid:4) which(cid:4) has(cid:4) custody(cid:4) of(cid:4) the(cid:4) most(cid:4) trusted(cid:4)
agribusiness(cid:4) brand(cid:4) in(cid:4) rural(cid:4) Australia.
(cid:56) om(cid:4) has(cid:4) established(cid:4) himself(cid:4) as(cid:4) a(cid:4) leading(cid:4) transaction(cid:4)
adviser(cid:4) in(cid:4) the(cid:4) farmland(cid:4) investment(cid:4) space(cid:4) and(cid:4) is(cid:4) a(cid:4)
lders’(cid:4) largest(cid:4) clients.
trusted(cid:4) adviser(cid:4) to(cid:4) many(cid:4) of(cid:4)
Mr(cid:4) Allison(cid:4) is(cid:4) currently(cid:4) Chair(cid:4) of(cid:4) Agribusiness(cid:4) Australia,(cid:4)
AuctionsPlus,(cid:4) the(cid:4) Agriculture(cid:4) and(cid:4) Natural(cid:4) Resources(cid:4)
(cid:41) nd-User(cid:4) Advisory(cid:4) Board(cid:4) of(cid:4) the(cid:4) SmartSat(cid:4) CRC,(cid:4) the(cid:4)
Agrifood(cid:4) and(cid:4) Wine(cid:4) Advisory(cid:4) Board(cid:4) of(cid:4) Adelaide(cid:4)
University,(cid:4) a(cid:4) Non-(cid:41) xecutive(cid:4) Director(cid:4) of(cid:4)
(cid:48) imited(cid:4) and(cid:4) a(cid:4) member(cid:4) of(cid:4) the(cid:4) Rabobank(cid:4) Food(cid:4) and(cid:4)
Agriculture(cid:4) Advisory(cid:4) Board.
rowers(cid:4)
rain(cid:43)
lders’(cid:4)
ight(cid:4) Point(cid:4) Plan(cid:4) in(cid:4) 2014,
Mr(cid:4) Allison(cid:4) oversaw(cid:4) the(cid:4) development(cid:4) and(cid:4)
implementation(cid:4) of(cid:4)
which(cid:4) returned(cid:4) the(cid:4) company(cid:4) to(cid:4) pure(cid:4) play(cid:4) agribusiness(cid:4)
and(cid:4) resulted(cid:4) in(cid:4) the(cid:4) first(cid:4) shareholder(cid:4) distribution(cid:4) in(cid:4)
nearly(cid:4) a(cid:4) decade.(cid:4) Since(cid:4) 2014,(cid:4)
a(cid:4) market(cid:4) capitalisation(cid:4) of(cid:4) $50m(cid:4) to(cid:4) $1.9b.
lders(cid:4) has(cid:4) grown(cid:4) from(cid:4)
Practising(cid:4) Accountant,(cid:4) with(cid:4) a(cid:4) Bachelor(cid:4) of(cid:4) Accountancy(cid:4)
from(cid:4) the(cid:4) University(cid:4) of(cid:4) South(cid:4) Australia,(cid:4) and(cid:4) a(cid:4) Fellow(cid:4) of(cid:4)
the(cid:4) Financial(cid:4) Services(cid:4) Institute(cid:4) of(cid:4) Australasia(cid:4) (FINSIA).(cid:4)
Paul(cid:4) is(cid:4) an(cid:4) experienced(cid:4) finance,(cid:4) accounting(cid:4) and(cid:4) risk(cid:4)
management(cid:4) professional(cid:4) in(cid:4) the(cid:4) fields(cid:4) of(cid:4) banking,(cid:4)
financial(cid:4) markets(cid:4) and(cid:4) agriculture.
(cid:56) om(cid:4) previously(cid:4) played(cid:4) a(cid:4) pivotal(cid:4) role(cid:4) in(cid:4) devising(cid:4)
and implementing(cid:4) the(cid:4) turnaround(cid:4) strategy(cid:4) for(cid:4)
including(cid:4) executing(cid:4) a(cid:4) number(cid:4) of(cid:4) large(cid:4) and(cid:4) complex(cid:4)
divestment(cid:4) initiatives.
lders,(cid:4)
lders,(cid:4)
(cid:41) xecutive(cid:4) of(cid:4)
Prior(cid:4) to(cid:4)
(cid:56) om(cid:4) was(cid:4) the(cid:4) Chief(cid:4)
a(cid:4) specialist(cid:4) international(cid:4) law(cid:4) firm(cid:4) and(cid:4) practiced(cid:4)
as(cid:4) a(cid:4) corporate(cid:4) lawyer(cid:4) with(cid:4) a(cid:4) focus(cid:4) on(cid:4) mergers(cid:4)
and(cid:4) acquisitions,(cid:4) corporate(cid:4) finance,(cid:4) complex(cid:4)
contractual(cid:4) pro(cid:78) ects,(cid:4) corporate(cid:4) governance(cid:4) and(cid:4)
intellectual(cid:4) property.
(cid:10)
(cid:4)
(cid:39)
(cid:4)
(cid:41)
(cid:38)
(cid:37)
(cid:38)
(cid:45)
(cid:37)
(cid:38)
(cid:55)
(cid:13)
(cid:41)
(cid:43)
(cid:43)
(cid:41)
(cid:41)
(cid:41)
(cid:4)
(cid:39)
(cid:38)
(cid:50)
(cid:55)
(cid:45)
(cid:37)
(cid:43)
(cid:41)
(cid:41)
(cid:10)
(cid:4)
(cid:58)
(cid:54)
(cid:48)
(cid:48)
(cid:38)
(cid:38)
(cid:37)
(cid:4)
(cid:4)
(cid:4)
(cid:49)
(cid:41)
(cid:10)
(cid:41)
(cid:41)
(cid:41)
Executive Management
(cid:759)(cid:753)
(cid:39) o(cid:89) nsel
lied(cid:4)
(cid:39) or(cid:84) orate(cid:4)
(cid:43) overnance,(cid:4)
(cid:39) D
(cid:44) astings
(cid:55) ecretar(cid:93)
Peter(cid:4)
(cid:84) an(cid:93)
(cid:39) o(cid:81)
,(cid:4)
,(cid:4)
(cid:43) D(cid:48) P,(cid:4) F(cid:43)
,(cid:4)
(cid:43) rad(cid:4) Di(cid:84)
(cid:43) eneral(cid:4)
lders’(cid:4) Company(cid:4) Secretary(cid:4) and(cid:4)
Peter(cid:4) was(cid:4) appointed(cid:4)
(cid:43) eneral(cid:4) Counsel(cid:4) in(cid:4) 2010.(cid:4) He(cid:4) has(cid:4) responsibility(cid:4) for(cid:4) the(cid:4)
Company’s(cid:4) legal,(cid:4) compliance,(cid:4) company(cid:4) secretarial,(cid:4) risk(cid:4)
and(cid:4) insurance(cid:4) functions.
Peter(cid:4) was(cid:4) an(cid:4) integral(cid:4) member(cid:4) of(cid:4) the(cid:4)
lders’(cid:4) team(cid:4)
that(cid:4) worked(cid:4) hard(cid:4) to(cid:4) protect(cid:4) shareholder(cid:4) interests(cid:4)
through(cid:4) many(cid:4) years(cid:4) of(cid:4) financial(cid:4) distress(cid:4) and(cid:4) which,(cid:4)
subsequently,(cid:4)
(cid:4) successfully(cid:4) implemented(cid:4) stabilisation,(cid:4)
and(cid:4) now(cid:4) growth,(cid:4) strategies.(cid:4) Peter(cid:4) has(cid:4) three(cid:4) decades(cid:4) of(cid:4)
experience(cid:4) gained(cid:4) in(cid:4) legal(cid:4) and(cid:4) governance(cid:4) roles(cid:4) with(cid:4)
lders,(cid:4) other(cid:4) inhouse(cid:4) legal(cid:4) positions(cid:4) and(cid:4) in(cid:4) private(cid:4) and(cid:4)
government(cid:4) legal(cid:4) practice.
(cid:54) os
Viv(cid:4) Da(cid:4)
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many(cid:4) implications(cid:4) and(cid:4) opportunities(cid:4) for(cid:4)
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roup,(cid:4)
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spent(cid:4) four(cid:4) years(cid:4) running(cid:4) the(cid:4) technology(cid:4) and(cid:4) digital(cid:4)
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Elders (cid:754)(cid:752)(cid:754)(cid:754) Annual Report
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integration of(cid:4) many(cid:4) acquisitions(cid:4) underpinning(cid:4) the(cid:4)
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category(cid:4) management.
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in(cid:4) the(cid:4) FMC(cid:43)
Australia(cid:4) and(cid:4) the(cid:4) United(cid:4) States.
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possesses(cid:4) direct(cid:4) insight(cid:4) into(cid:4) how(cid:4) regions(cid:4) and(cid:4) the(cid:4)
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role(cid:4) of(cid:4) supporting(cid:4) our(cid:4) business(cid:4) growth(cid:4) and(cid:4) backward(cid:4)
integration(cid:4) strategy,(cid:4) along(cid:4) with(cid:4) the(cid:4) further(cid:4) integration(cid:4)
of(cid:4) our(cid:4) rural(cid:4) products(cid:4) businesses.
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(cid:41)
Executive Management
73
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74
Elders 2022 Annual Report
Opportunities abound
for agriculture’s
next generation
As the agriculture industry
expands to feed and
clothe a growing global
population, doors are
opening for the next
generation of agricultural
professionals interested in
new ways to contribute
to the sector with fresh
perspectives and diverse
skills and backgrounds.
With fond memories of helping her dad on
their mixed farming property, West Australian
Georgia Adams says that farming seemed like a
dream job to her – one that has since become
a reality after taking on a role in livestock
production with Elders’ Williams branch in
Western Australia.
After a short stint in Farm Supplies, Georgia
quickly realised that livestock production was
her passion, and that helping producers to
improve their productivity was an ambition that
had impacts far beyond the farms she was
working on.
“The honest day’s work, the drive and
determination of the people in the industry, as
well as the challenge it posed, really motivated
me to get involved and work to offer value to
producers,” said Georgia.
“There is an enormous amount of pressure
placed on agriculture to increase production
to meet the demands of a growing global
population. Australian growers are already
efficient producers, but this will need to
improve to meet such growing demand.
“We need to take a systems approach
to improving productivity – considering the
production, environmental and social issues
that surround food production.”
With demand for quality Australian product
only growing, a desire to help contribute to
Australia’s food supply chain requires a broad
range of emerging skills and insights.
Similarly, Amy Canty, a graduate agronomist in
Cowra from the 2022 intake, said her role is
challenging just as it is rewarding, which is why
the sector is so appealing.
“There are so many new branches in the
industry opening due to the need for new
innovations, so it appeals to a wider audience
more now than it did in decades gone by,”
said Georgia.
“The generation coming through offers an
understanding of new technologies such
as robotics, IT, and engineering related to
agriculture. This understanding will aid in the
utilisation of new technologies and improved
traditional practices.
“The opportunities available to those in the
industry are incredible and only expanding; I
believe that females are participating in greater
numbers in agriculture as a result.”
This swing toward a younger and more diverse
industry is being supported by the Elders
Early Careers Program, which this year saw
an 8% increase in applicants. As one way to
bring in new talent to the sector, the program
has expanded its intake from 30 network
only based roles, like the Graduate Agronomy
Program and Livestock Trainee Program, to up
to 50 roles and a whole new corporate stream,
offering opportunities in the areas of marketing
and communications, human resources and
information technology.
One employee benefitting from the program is
Olivia O’Brien who joined the Livestock Trainee
Program in 2021 and is forging a successful
career in livestock production with Elders’
Hamilton branch.
“The program enables trainees to gain first-
hand experience in different regions with
different climates and challenges, as well as
seeing how our livestock people interact with
their grazier clients to help improve their
operations,” she said.
“Farming practices will always change. With
research and innovation comes change, and
that’s exciting to me,” she said.
“As a young person entering the industry, I can
see so much room for growth, but at the same
time I love the traditional side. This is the career
path for me, and I can’t wait to see where it
takes me.”
Heading north, at just 23, Eliza Connors
joined Elders Rockhampton in a state-wide
stud stock role. Now with the business for
two years, Eliza said the traditions of the
livestock industry combined with the exciting
opportunities offered as it adapts and grows,
are some of the reasons she is passionate
about the sector, suggesting that the male
farming stereotype is outdated.
“Yes, many of the auctioneers you might see
are men, but working in the industry there are
so many women calling the shots as breeders,
managers, journalists, or technical support staff
at the sale.”
Eliza says growing her career in the pink shirt
has been transformative.
“I find it impossible to not feel a thrill as years
of careful management and breeding are put
to the open market and you watch the success
unfold for clients,” she said.
“You kind of get the feeling that this is the
industry for you, then it’s all about finding your
own path to a career that can fit your interests.”
Whether in livestock or agronomy, Georgia
Adams’ assertion about opportunities rings
true: “The rate of change in agriculture
demands a lot of the next generation but the
opportunities are limitless.”
Opportunities abound for agriculture’s next generation
75
“The generation coming
through offers an
understanding of new
technologies such as
robotics, IT, and engineering
related to agriculture. This
understanding will aid in
the utilisation of new
technologies and improved
traditional practices.
Georgia Adams
Livestock Production Advisor, Elders Williams
(cid:759)(cid:758)
Elders (cid:754)(cid:752)(cid:754)(cid:754) Annual Report
Elders Limited Annual Financial Report
77
FINANCIALREPORT2022 Elders
Limited
Annual
Financial
Report
30 September 2022
Elders Limited Annual Financial Report
78
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 Segment Information
2 Revenue and Expenses
3
Income Tax
4 Earnings Per Share
Working Capital
5 Receivables
6 Livestock
7
Inventory
8 Trade and Other Payables
Capital Employed
9 Property, Plant and Equipment
10 Leases
11
Intangibles
12 Equity Accounted Investments
13 Provisions
Net Debt
14 Cash Flow Statement Reconciliation
15
Interest Bearing Loans and Borrowings
Risk Management
16 Financial Instruments
Equity
17 Contributed Equity
18 Reserves
19 Dividends
Group Structure
20
Investments in Controlled Entities
21 Parent Entity
22 Business Combinations – Changes in the Composition of the Entity
Other Notes
23 Expenditure Commitments
24 Contingent Liabilities
25 Related Party Disclosures
26 Share Based Payment Plans
27 Auditor's Remuneration
28 Key Management Personnel
29 Subsequent Events
Directors' Declaration
79
80
81
82
83
83
86
88
89
91
92
93
94
95
96
98
100
102
103
105
106
107
112
113
114
115
119
120
121
122
122
123
124
124
124
125
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 September 2022
Sales revenue
Cost of sales
Gross profit
Equity accounted profits
Distribution expenses
Administrative expenses
Finance costs
Other items of income/(expense)
Profit before income tax expense
Income tax expense
Net profit for the period
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign operations
Net gains on cash flow hedges
Other comprehensive profit/(loss) for the period, net of tax
Elders Limited Annual Financial Report
79
Note
2
12
2
2
3
2022
$000
2021
$000
3,445,254
2,548,924
(2,805,343)
(2,030,501)
639,911
12,725
(333,221)
(87,334)
(8,571)
14,227
237,737
(67,727)
170,010
(84)
(357)
(441)
518,423
10,897
(287,090)
(75,767)
(8,755)
-
157,708
(3,924)
153,784
343
932
1,275
Total comprehensive income for the period
169,569
155,059
Profit for the period is attributable to:
Non-controlling interest
Owners of the parent
Net profit for the period
Total comprehensive income for the period is attributable to:
Non-controlling interest
Owners of the parent
Total comprehensive income for the period
Reported 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.
7,144
162,866
170,010
7,144
162,425
169,569
4,007
149,777
153,784
4,007
151,052
155,059
4
4
104.1¢
104.1¢
95.8¢
95.5¢
80
Elders 2022 Annual Report
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2022
Note
2022
$000
2021
$000
Current assets
Cash and cash equivalents
Trade and other receivables
Livestock
Inventory
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
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.
14
5
6
7
12
9
10
11
3
8
15
10
3
13
8
10
13
17
18
17,840
819,504
73,371
484,482
48,063
734,769
56,237
321,683
1,395,197
1,160,752
1,269
47,547
46,953
119,304
364,320
45,406
624,799
1,269
57,936
36,018
105,739
332,643
102,673
636,278
2,019,996
1,797,030
736,373
179,210
32,716
5,869
94,348
1,048,516
16,059
90,827
3,877
110,763
648,294
154,265
37,972
974
81,870
923,375
19,204
72,705
3,154
95,063
1,159,279
1,018,438
860,717
778,592
1,646,630
1,651,006
(27,705)
(764,066)
854,859
5,858
860,717
(26,887)
(848,694)
775,425
3,167
778,592
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 September 2022
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Dividends received
Interest and other finance costs paid
Income tax (paid)
Net operating cash flows
Cash flows from investing activities
Payments for property, plant and equipment
Payments for equity accounted investments
Payments for intangibles
Payments for acquisitions through business combinations, net of cash acquired
22
Proceeds from sale of property, plant and equipment
Acquisition of intangible assets
Proceeds from sale of equity accounted investments
Net investing cash flows
Cash flows from financing activities
Purchase of shares
(Repayment)/proceeds 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 period
Cash at the end of the financial period
The accompanying notes form an integral part of this consolidated statement of cash flows.
14
Elders Limited Annual Financial Report
81
Note
2022
$000
2021
$000
12,885,381
10,638,812
(12,769,549)
(10,495,672)
11,806
(7,941)
(6,036)
9,584
(7,727)
(2,840)
14
113,661
142,157
(16,361)
(123)
(4,235)
(53,965)
716
(4,568)
33,400
(45,136)
(9,584)
24,945
(35,908)
(73,748)
(4,453)
(98,748)
(30,223)
48,063
17,840
(6,378)
(150)
-
(28,028)
911
(1,845)
-
(35,490)
-
(29,426)
(29,286)
(48,468)
(2,165)
(109,345)
(2,678)
50,741
48,063
82
Elders 2022 Annual Report
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 September 2022
Issued capital
Reserves
Retained
earnings
Non-controlling
interest
Total equity
As at 1 October 2021
Profit for the period
Other comprehensive income/(loss):
Exchange differences on translation of foreign operations
Cash flow hedge and fair value of derivatives, net of tax
Total comprehensive income/(loss) for the period
Transactions with owners in their capacity as owners:
Put option revaluation
Dividends paid
Dividend reinvestment plan
Deferred performance shares
Partnership profit distributions/dividends paid
Cost of share based payments
Reallocation of equity
Shares purchased
As at 30 September 2022
As at 1 October 2020
Profit for the period
Other comprehensive income/(loss):
Foreign currency translation differences for
foreign operations
Cash flow hedge and fair value of derivatives, net of tax
Total comprehensive income/(loss) for the period
Transactions with owners in their capacity as owners:
Dividends paid
Dividend reinvestment plan
Partnership profit distributions/dividends paid
Cost of share based payments
Reallocation of equity
As at 30 September 2021
$000
1,651,006
-
-
-
-
-
-
3,383
112
-
-
1,713
(9,584)
$000
(26,887)
-
(84)
(357)
(441)
(2,234)
-
-
-
-
3,570
(1,713)
-
1,645,561
(27,670)
-
-
-
-
-
2,520
-
-
2,925
1,651,006
-
343
932
1,275
-
-
-
2,433
(2,925)
(26,887)
$000
(848,694)
162,866
-
-
$000
3,167
7,144
-
-
$000
778,592
170,010
(84)
(357)
162,866
7,144
169,569
-
(74,855)
(3,383)
-
-
-
-
-
(946,890)
149,777
-
-
-
-
-
-
(4,453)
-
-
-
5,858
1,325
4,007
-
-
(2,234)
(74,855)
-
112
(4,453)
3,570
-
(9,584)
860,717
672,326
153,784
343
932
149,777
4,007
155,059
(49,061)
(2,520)
-
-
-
-
-
(2,165)
-
-
(49,061)
-
(2,165)
2,433
-
(848,694)
3,167
778,592
1,646,630
(27,705)
(764,066)
The accompanying notes form an integral part of this consolidated statement of changes in equity.
Elders Limited Annual Financial Report
83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
ABOUT THIS REPORT
Corporate information
The consolidated financial report of Elders Limited for the year ended 30 September 2022 was authorised for issue on 14 November 2022 by the Directors.
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. 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, 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 2022. 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 7
Note 9
Note 10
Note 11
Accounting for rebates
Impairment of non-financial assets other than brand names and goodwill
Accounting for leases
Impairment of brand names and goodwill
84
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
ABOUT THIS REPORT
Impacts of Climate Change
Elders has incorporated climate change risk and the necessary measures to meet its emissions reduction targets. While the effects of climate change risk
and the implementation of the emissions reduction targets do not change the significant estimates, judgements and assumptions used in the preparation
of the consolidated financial statements, it has increased the accounting estimation uncertainty and resulted in application of further judgement within
those identified areas. Elders has used accounting estimates based on forecasts developed on market information available at balance date.
Elders has reviewed the following material accounting judgements, estimates and assumptions within the accounting policies that have potential to be
impacted by climate change risk and the implementation of Elders' emissions reduction targets:
Impairment testing
Cash flow projections used in the impairment testing process are based upon financial budgets approved by the Board, external forecasts of
market growth rates and expected operating margins and capital expenditure, including projected expenditure required to meet the Elders’ emissions
reduction targets.
Capital expenditure and research and development
Elders’ research and development and capital expenditures are aligned to Elders’ strategy focusing on new and alternative technologies and products, in
line with Elders' emissions reduction targets, impacting either capital expenditure or the Income Statement.
Taxes
Climate-related matters have been considered in the assessment of the future taxable profits on which the recognition of deferred tax assets are based.
Business plans used for the recognition of deferred tax assets have been aligned with those used in the impairment testing process taking into account
Elders’ emissions reduction targets.
Provisions and contingent liabilities
Elders’ provisions and contingent liabilities for the 2022 financial year have taken into consideration Elders’ current climate-related risk assessments.
Insurance
The change in climate may result in more regular and intense climate events which can have a significant impact on Elders’ production with business
interruption, accident or damages. This may increase Elders’ insurance costs due to higher amounts at stake or Elders’ costs with more frequent
uninsurable events.
Changes to Accounting Policies
(i) New and Revised Accounting Standards and Interpretations
A number of new amendments to standards and interpretations became operative for the financial year ended 30 September 2022. None of these have
materially impacted Elders and its policies.
(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 Limited Annual Financial Report
85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
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 Notes
Includes other notes 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.
86
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
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 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 and real estate services and financial services.
• Wholesale Products includes the AIRR business based in Shepparton, Victoria, supported by a network of 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.
• 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.
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.
2022
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
Interest on lease liabilities
Finance costs
Profit before income tax benefit/(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
2,432,147
400,258
202,443
1,433
3,036,281
10,052
1,492
397,429
2,841,120
12,725
328,002
(4,792)
(28,282)
294,928
1,397,501
679,887
717,614
47,547
75,327
(284)
22,376
-
-
-
-
-
-
400,258
202,443
-
-
46,012
(4,443)
(4,283)
37,286
2,576
(1,838)
(583)
156
338,188
109,369
228,819
-
-
-
-
105,500
5,606
99,894
-
2,197
288
-
-
-
-
1,433
-
(83,042)
(723)
(2,297)
(86,062)
178,807
364,417
(185,610)
-
1,728
10,052
1,492
397,429
3,445,254
12,725
293,548
(11,796)
(35,445)
246,308
(5,226)
(630)
(2,715)
(8,571)
237,737
2,019,996
1,159,279
860,717
47,547
79,252
(132,802)
(132,798)
-
22,376
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
GROUP PERFORMANCE – NOTE 1: SEGMENT INFORMATION
Elders Limited Annual Financial Report
87
2021
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
Interest on lease liabilities
Finance costs
Profit before income tax benefit/(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
1,689,152
328,642
161,991
1,160
2,180,945
7,552
2,585
357,842
2,057,131
10,897
234,039
(3,725)
(24,674)
205,640
1,157,142
608,714
548,428
57,936
32,476
(5,075)
423
-
-
-
-
-
-
328,642
161,991
-
-
39,023
(4,355)
(3,274)
31,394
5,462
(1,423)
(66)
3,973
302,488
87,687
214,801
-
-
-
-
87,668
12,291
75,377
-
2,197
58
-
-
-
-
1,160
-
(71,136)
(897)
(2,511)
(74,544)
249,732
309,746
(60,014)
-
1,728
(45,039)
-
7,552
2,585
357,842
2,548,924
10,897
207,388
(10,400)
(30,525)
166,463
(5,355)
(1,028)
(2,372)
(8,755)
157,708
1,797,030
1,018,438
778,592
57,936
36,401
(50,056)
423
88
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
GROUP PERFORMANCE – NOTE 2: REVENUE AND EXPENSES
Sales revenue
Sale of goods and biological assets
Debtor interest associated with sales
Interest revenue from related party advances
Commission revenue
Total sales revenue
Other items of income/(expense)
Sale of equity accounted investment
Impairment of foreign operation
Other costs
Total other items of income/(expense)
Finance costs
Interest expense
Unwinding discount expense in regards to liabilities
Interest on lease liabilities
Total finance costs
Specific expenses: depreciation and amortisation
Depreciation and amortisation
Depreciation on right-of-use assets
Total depreciation and amortisation
Specific expenses: employee benefit expense
Salaries, wages and incentives
Superannuation and other employee costs
Share based payments
Total employee benefit expense
Operating lease expenditure
Note
25
2022
$000
2021
$000
3,036,281
2,180,945
10,052
1,492
397,429
3,445,254
7,552
2,585
357,842
2,548,924
21,956
(6,982)
(747)
14,227
(5,226)
(630)
(2,715)
(8,571)
(11,796)
(35,445)
(47,241)
-
-
-
-
(5,355)
(1,028)
(2,372)
(8,755)
(10,400)
(30,525)
(40,925)
(222,267)
(190,702)
(43,865)
(3,570)
(37,928)
(2,433)
(269,702)
(231,063)
(2,011)
(1,766)
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 Limited Annual Financial Report
89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
GROUP PERFORMANCE – NOTE 3: 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 expense reported in the statement of comprehensive income
2022
$000
(70,982)
596
2,659
(67,727)
2021
$000
(52,098)
360
47,814
(3,924)
(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:
Total accounting profit before tax
Income tax expense at 30% (2021: 30%)
Adjustments in respect of current income tax of previous years
Share of equity accounted profits
Non-assessable profits/(losses)
Recognition of previously unrecognised losses
Impairment expense
Other
Income tax expense as reported in the statement of comprehensive income
237,737
157,708
(71,321)
(47,312)
596
3,825
4,148
-
(3,604)
(1,371)
(67,727)
360
3,269
(419)
42,461
(2,283)
(3,924)
Current tax payable
5,869
974
Capital losses not recognised as an asset
Elders held $103.5 million of capital losses (2021: $109.5 million) measured at 30% of gross value for which no deferred tax asset was recognised in the
consolidated statement of financial position. The capital losses are available indefinitely for offset against future capital profits subject to continuing to
meet relevant statutory tests.
Tax losses carried forward at the end of the year
Value of tax losses carried forward (net)
49,928
109,946
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.
Tax Transparency Report
Elders has prepared a voluntary tax transparency report which is available to view online or to download from the Elders’ website at elders.com.au. The
report sets out relevant tax information for Elders and its controlled entities for the year ended 30 September 2022. The tax transparency report has not
been audited and does not form part of the Financial Report.
90
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
GROUP PERFORMANCE – NOTE 3: INCOME TAX
(c) Major components of deferred income tax:
Statement of
Financial Position
Movement
Deferred income tax assets
Losses available to offset against future taxable income
Provision for employee entitlements
Other provisions
Capitalised expenses
Lease liabilities
Other
2022
$000
49,928
29,106
5,350
3,817
36,962
838
2021
$000
109,946
24,431
4,342
3,187
32,992
1,129
Gross deferred income tax assets
126,001
176,027
Deferred income tax liabilities
Inventory
Intangibles
Right-of-use assets
Other
Gross deferred income tax liabilities
Net deferred tax asset
Movement in net deferred tax asset
Deferred income tax benefit recognised in the statement of
comprehensive income
Utilisation of booked tax losses
Deferred income tax assets/(liabilities) recognised for acquisitions of
businesses (principally related to acquired intangibles)
Deferred income tax (expense)/benefit recognised in equity
(2,121)
(36,760)
(35,780)
(5,934)
(80,595)
45,406
(1,601)
(37,202)
(32,269)
(2,282)
(73,354)
102,673
2022
$000
(60,018)
4,675
1,008
630
3,970
(291)
(50,026)
(520)
442
(3,511)
(3,651)
(7,240)
2021
$000
(6,167)
5,242
844
(376)
1,658
493
1,694
94
878
(2,015)
(1,745)
(2,788)
(57,266)
(1,094)
(2,659)
59,450
627
(152)
57,266
47,814
(48,628)
120
(400)
(1,094)
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.
Current tax assets and liabilities are offset if there is a legally enforceable right to offset and the Group intends to either settle on a net basis, or
to realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and when the deferred tax balances relate to income taxes levied by the same tax authority.
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 consolidated statement of financial position.
Cash flows are included in the consolidated 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
GROUP PERFORMANCE – NOTE 4: 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)
Elders Limited Annual Financial Report
91
2022
156,477
-
156,477
2021
156,305
579
156,884
In previous periods rights issued under the LTIP scheme were considered dilutive as it was anticipated that shares would be issued. Given the policy
change to purchasing shares on the market, rather than issuing shares, no dilution from performance rights in the current period is recognised.
The following reflects the net profit/(loss) and share data used in the calculations of earnings per share (EPS):
2022
$000
2021
$000
Reported operations
Basic and dilutive
Net profit attributable to members (after tax)
162,866
149,777
Reported operations earnings per share:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
104.1¢
104.1¢
95.8¢
95.5¢
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.
92
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
WORKING CAPITAL – NOTE 5: RECEIVABLES
Current
Trade debtors
Loss allowance
Amounts receivable from equity accounted investments
Livestock deferred receivables
Prepayments
Other receivables
Total current receivables
2022
$000
2021
$000
795,489
(7,034)
788,455
2,515
8,856
8,328
11,350
819,504
695,274
(9,257)
686,017
17,520
16,276
3,909
11,047
734,769
Included in trade debtors is $107.3 million (2021: $93.9 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. Elders' assessment of trade receivables and loss allowances was determined as follows:
1-30 days
past due
$000
31-60 days
past due
$000
61-90 days
past due
$000
+91 days
past due
$000
Total
$000
2022
Expected loss rate
Gross carrying amount
Loss allowance
2021
Expected loss rate
Gross carrying amount
Loss allowance
Current
$000
< 1%
675,925
406
< 1%
597,142
1,483
< 1%
84,908
127
< 1%
72,683
218
< 1%
11,666
35
< 2%
9,345
182
< 1%
8,206
1
< 1%
2,918
6
Reconciliation of loss allowances for trade debtors at beginning and end of period:
Opening loss allowance
Increase/(decrease) in loss allowance recognised in profit or loss
Trade debtors written off
Increase in loss allowance through acquisitions
Closing loss allowance
Related party receivables
For terms and conditions of related party receivables, including from equity accounted investments, refer to note 25.
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 16.
Foreign exchange and interest rate risk
Details regarding the foreign exchange and interest rate risk exposure are disclosed in note 16, including those relating to derivative related balances.
44%
14,784
6,465
56%
13,186
7,368
2022
$000
9,257
(1,226)
(997)
-
7,034
795,489
7,034
695,274
9,257
2021
$000
8,245
2,172
(1,254)
94
9,257
Elders Limited Annual Financial Report
93
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
WORKING CAPITAL – NOTE 5: RECEIVABLES
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.
WORKING CAPITAL – NOTE 6: LIVESTOCK
Current
Total livestock
Reconciliation of fair value of livestock at beginning and end of period:
Opening fair value
Purchases
Cost of sales
Fair value increment/(decrement)
Closing fair value
2022
$000
2021
$000
73,371
56,237
56,237
168,395
44,734
131,925
(152,315)
(120,480)
1,054
73,371
58
56,237
At balance date 22,789 head of cattle (2021: 22,265) 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.
94
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
WORKING CAPITAL – NOTE 7: 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
Provision for obsolescene
Total inventory
2022
$000
2021
$000
484,801
5,357
(5,676)
484,482
315,180
9,750
(3,247)
321,683
Inventory write-downs recognised as an expense totalled $2.4 million (2021: $4.2 million).
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
WORKING CAPITAL – NOTE 8: 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
Elders Limited Annual Financial Report
95
2022
$000
2021
$000
617,044
47,114
70,590
1,625
736,373
16,059
752,432
546,997
26,050
73,541
1,706
648,294
19,204
667,498
Interest rate, foreign exchange and liquidity risk
Information regarding interest rate, foreign exchange and liquidity risk exposure is set out in note 16, 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 24.
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 2022, 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.
96
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
CAPITAL EMPLOYED – NOTE 9: 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.
Freehold land
Buildings
Leasehold
improvements
Plant and
equipment
(owned)
Assets under
construction
Total
Note
$000
$000
$000
$000
$000
$000
2022
Carrying amount at beginning of period
Additions
Additions through business combinations
22
Disposals
Depreciation expense
Impairment/ writedown expense
Exchange fluctuations
Transfers from assets under construction
Other transfers within PPE
Carrying amount at end of period
Cost
Accumulated depreciation and impairment
2021
Carrying amount at beginning of period
Additions
Additions through business combinations
Disposals
Depreciation expense
Exchange fluctuations
Transfers from assets under construction
Carrying amount at end of period
Cost
Accumulated depreciation and impairment
3,484
90
-
(5)
-
-
-
-
11,778
748
-
-
4,396
1,697
36
(31)
(1,102)
(1,027)
-
32
-
-
(2)
7
-
15,757
5,818
1,415
(273)
(3,715)
(766)
24
17
20
603
8,008
-
-
-
-
-
(56)
-
36,018
16,361
1,451
(309)
(5,844)
(766)
22
-
20
3,569
11,456
5,076
18,297
8,555
46,953
15,231
45,197
8,555
93,574
(10,155)
(26,900)
-
(46,621)
5,076
18,297
8,555
46,953
3,569
-
3,569
3,516
10
-
(42)
-
-
-
21,022
(9,566)
11,456
11,419
1,128
-
(29)
(740)
-
-
4,502
547
92
(7)
(851)
-
113
12,473
4,096
2,787
(410)
(3,438)
10
239
3,484
11,778
4,396
15,757
3,484
-
3,484
20,242
(8,464)
11,778
13,536
(9,140)
4,396
39,251
(23,494)
15,757
358
597
-
-
-
-
(352)
603
603
-
603
32,268
6,378
2,879
(488)
(5,029)
10
-
36,018
77,116
(41,098)
36,018
All property, plant and equipment is pledged as security, refer to note 15 for interest bearing loans and borrowings.
Elders Limited Annual Financial Report
97
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
CAPITAL EMPLOYED – NOTE 9: 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 consolidated statement
of comprehensive income.
98
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
CAPITAL EMPLOYED – NOTE 10: 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 consolidated statement of financial position
Reconciliation of carrying amounts of right-of-use assets at beginning and end of period:
2022
Carrying amount at beginning of period
Additions
Depreciation expense
Lease modifications and reassessments
Carrying amount at end of period
2021
Carrying amount at beginning of period
Additions
Depreciation expense
Lease modifications and reassessments
Carrying amount at end of period
Properties
Motor vehicles
$000
$000
89,786
10,268
(22,760)
21,778
99,072
86,722
12,099
(19,942)
10,907
89,786
15,419
9,382
(12,430)
7,582
19,953
13,343
5,436
(10,380)
7,020
15,419
Reconciliation of carrying amounts of lease liabilities at beginning and end of period:
Carrying amount at beginning of period
Additions
Interest expense
Lease modifications and reassessments
Repayments of principal and interest
Carrying amount at end of period
Lease liabilities of which are:
● Current lease liabilities
● Non current lease liabilities
Other
$000
534
-
(255)
-
279
737
-
(203)
-
534
2022
$000
110,677
19,650
2,715
29,124
(38,623)
123,543
32,716
90,827
123,543
Total
$000
105,739
19,650
(35,445)
29,360
119,304
100,802
17,535
(30,525)
17,927
105,739
2021
$000
104,501
17,535
2,372
17,927
(31,658)
110,677
37,972
72,705
110,677
Elders Limited Annual Financial Report
99
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
CAPITAL EMPLOYED – NOTE 10: LEASES
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 on any banking covenants, however leased assets may not be used as security for
borrowing purposes.
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.
100
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
CAPITAL EMPLOYED – NOTE 11: 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:
Non current
Goodwill
Rent rolls &
loan books
Brand names
Distribution
rights
Customer
intangibles
Software
Assets in
progress
Other
Total
$000
$000
$000
$000
$000
$000
$000
$000
2022
Carrying amount at beginning
of period
Additions
Additions through
business combinations
Amortisation
Other
Carrying amount at end
of period
175,151
786
23,181
-
136
9,325
4,407
3,949
(1,756)
-
80,240
23,000
40,979
-
753
-
-
-
-
-
-
-
-
(3,594)
-
-
4,235
-
-
-
3,948
182
-
(602)
-
332,643
9,610
27,883
(5,952)
136
199,254
15,925
80,993
23,000
37,385
4,235
3,528
364,320
Cost
199,254
22,455
80,993
23,000
47,620
4,235
5,127
382,684
-
199,254
(6,530)
15,925
-
-
(10,235)
80,993
23,000
37,385
-
4,235
(1,599)
(18,364)
3,528
364,320
146,952
305
27,894
-
-
8,214
1,540
865
(1,294)
-
79,162
23,000
44,476
-
1,078
-
-
-
-
-
-
-
-
(3,497)
-
175,151
9,325
80,240
23,000
40,979
-
-
-
-
-
-
-
-
-
4,443
415
-
(580)
(330)
306,247
2,260
29,837
(5,371)
(330)
3,948
332,643
5,085
345,195
(1,137)
(12,552)
3,948
332,643
Cost
175,151
14,098
80,240
23,000
47,621
Accumulated amortisation
and impairment
-
175,151
(4,773)
9,325
-
-
80,240
23,000
(6,642)
40,979
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, $125.0 million (2021: $119.4 million) of goodwill, $12.8 million (2021: $12.0 million) of brand
names and $23.0 million (2021: $23.0 million) of distribution rights were allocated for impairment testing. For Wholesale Products, $74.3 million (2021:
$74.3 million) of goodwill and $7.6 million (2021: $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.
Accumulated amortisation
and impairment
2021
Carrying amount at beginning
of period
Additions
Additions through
business combinations
Amortisation
Impairment
Carrying amount at end
of period
Elders Limited Annual Financial Report
101
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
CAPITAL EMPLOYED – NOTE 11: INTANGIBLES
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 (2021: 10.0% 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. The estimated recoverable amount of each of the CGU’s is greater than the carrying values at 30 September 2022. Carrying values are not
sensitive to a reasonable change in discount rate of +/- 2% and significant headroom remains.
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 2023 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
• 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 2023 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.
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) Software assets
Software assets relates to internally generated software and associated assets that form part of the System Modernisation program and are carried at
cost until project milestones are completed. When a project milestone is completed, the asset is ready for use and amortised over the asset's useful
life of 10 years in line with Elders' policy for core IT systems.
(vii) 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.
102
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
CAPITAL EMPLOYED – NOTE 12: EQUITY ACCOUNTED INVESTMENTS
Auctions Plus Pty Ltd
Elders Insurance (Underwriting Agency) Pty Ltd
StockCo Holdings Pty Ltd
Clear Grain Pty Ltd
Agcrest Holdings Pty Ltd
Agcrest Land Holdings Pty Ltd
Elders Financial Planning Pty Ltd
Auctions Plus Pty Ltd
Elders Insurance (Underwriting Agency) Pty Ltd
StockCo Holdings Pty Ltd
Clear Grain Pty Ltd
Agcrest Holdings Pty Ltd
Agcrest Land Holdings Pty Ltd
Equity accounted investments
Balance
date
30-Jun
31-Dec
30-Jun
30-Jun
30-Jun
30-Jun
30-Sep
Ownership interest
2022
%
2021
%
50
20
-
30
33
33
-
50
20
30
30
33
33
49
Consolidated entity
investment
Contribution to
net profit
Dividends received
2022
$000
2,507
42,982
-
2,020
38
-
2021
$000
2,637
42,653
10,916
1,580
100
50
2022
$000
1,486
10,195
516
740
(212)
-
2021
$000
1,954
8,449
89
405
-
-
2022
$000
1,617
9,889
-
300
-
-
2021
$000
1,491
7,913
-
180
-
-
47,547
57,936
12,725
10,897
11,806
9,584
All equity accounted investments are Australian resident companies. Summary financial information for equity accounted investees is as follows:
2022
Auctions Plus Pty Ltd
Elders Insurance (Underwriting Agency) Pty Ltd
StockCo Holdings Pty Ltd
Clear Grain Pty Ltd
Agcrest Holdings Pty Ltd
Total
2021
Auctions Plus 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
2,972
51,095
1,719
2,466
(642)
7,636
109,708
-
7,747
896
(2,508)
(98,645)
-
(4,810)
(4)
57,610
125,987
(105,967)
3,907
42,247
298
1,350
47,802
8,415
97,610
294,274
5,178
405,477
3,140
88,000
292,838
3,827
387,805
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 Limited Annual Financial Report
103
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
CAPITAL EMPLOYED – NOTE 13: PROVISIONS
Reconciliation of carrying amounts at beginning and end of period:
2022
As at beginning of period
Arising during year
Utilised
Unused amounts reversed
Provisions arising from entities acquired
Disclosed as:
Current
Non current
Total
2021
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
Employee benefits
Restructuring
provisions
Make good
$000
$000
$000
81,582
62,731
(52,514)
-
616
92,415
88,538
3,877
92,415
64,148
38,953
(23,422)
-
426
1,477
81,582
78,428
3,154
81,582
484
1,559
(10)
-
-
2,033
2,033
-
2,033
1,193
-
(709)
-
-
-
484
484
-
484
996
-
(32)
(581)
-
383
383
-
383
694
675
(199)
(174)
-
-
996
996
-
996
Other
$000
1,962
2,675
(1,190)
(53)
-
3,394
3,394
-
3,394
2,181
339
(433)
(125)
-
-
1,962
1,962
-
1,962
Total
$000
85,024
66,965
(53,746)
(634)
616
98,225
94,348
3,877
98,225
68,216
39,967
(24,763)
(299)
426
1,477
85,024
81,870
3,154
85,024
104
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
CAPITAL EMPLOYED – NOTE 13: PROVISIONS
Accounting Policy
Provisions are recognised when Elders has a present obligation (legal or constructive) as a result of a past event, which makes it 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. The non-current
portion of this liability relates to the entitlement that Elders does not expect employees to take within 12 months of the reporting date.
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 Limited Annual Financial Report
105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
NET DEBT – NOTE 14: 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
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
Total non cash items
Total after 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
2022
$000
2021
$000
170,010
153,784
47,241
630
40,925
1,028
(12,725)
(10,897)
11,806
(1,054)
766
(1,226)
62,731
3,599
2,429
(22,376)
62,272
3,570
157,663
327,673
9,584
(58)
330
2,172
39,379
715
4,216
(423)
1,154
2,433
90,558
244,342
(99,163)
(142,404)
(165,228)
(59,087)
50,379
113,661
99,306
142,157
17,840
48,063
17,840
48,063
(179,210)
(154,265)
-
-
(123,543)
(110,677)
(284,914)
(216,879)
17,840
48,063
(123,543)
(110,677)
(179,210)
(154,265)
(284,914)
(216,879)
Non-cash investing and financing activities disclosed in other notes are:
• acquisition of right-of-use assets – note 10
• shares issued a part of purchase consideration of a business combination – note 22
• dividend distributions through the issue of shares under the dividend reinvestment plan – note 19
• shares issued to eligible executives under Elders Long-Term Incentive Plan – note 26
At balance date, Elders held $46.3 million (2021: $52.6 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 bank 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.
106
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
NET DEBT – NOTE 15: INTEREST BEARING LOANS AND BORROWINGS
Current
Unsecured loans
Trade receivables and other working capital funding
2022
$000
2021
$000
4,230
174,980
179,210
4,265
150,000
154,265
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 2022, $10.1 million had been issued
(2021: $6.7 million).
Assets pledged as security
Secured loans are secured by various fixed and floating charges over all the assets of Elders' (either directly or indirectly). Trade receivables and other
working capital funding is secured over the underlying debtors. This facility expires in December 2023.
Fair value
The carrying value of interest bearing liabilities approximates fair value.
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 Limited Annual Financial Report
107
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
RISK MANAGEMENT – NOTE 16: 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 15. At 30 September 2022
there was nil value of secured loans hedged under a floating to fixed arrangement (2021: nil), 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
2022
$000
2021
$000
17,840
48,063
(179,210)
(161,370)
(154,265)
(106,202)
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:
Post tax profit/equity
Higher/(lower)
+ 100 basis points
- 100 basis points
(1,614)
1,614
(1,062)
1,062
108
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
RISK MANAGEMENT – NOTE 16: FINANCIAL INSTRUMENTS
(b) Liquidity risk
Liquidity risk arises from Elders’ financial liabilities and the subsequent ability to meet our obligations to repay 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 2022, Elders has $290.0 million of undrawn facilities (2021:
$293.0 million).
(i) Non derivative financial assets and 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 2022. 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 committed to make amounts available in instalments, each instalment is allocated to the earliest period in which Elders is 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.
Carrying amount
Contractual
cash flows
$000
$000
6 months
or less
$000
6-12 months
> 1 years
$000
$000
2022
Non derivative financial assets:
Trade and other receivables
Non derivative financial liabilities:
Interest bearing loans and borrowings
Lease liabilities
Trade and other payables
Net inflow/(outflow)
2021
Non derivative financial assets:
Trade and other receivables
Non derivative financial liabilities:
Interest bearing loans and borrowings
Lease liabilities
Trade and other payables
Net inflow/(outflow)
826,538
826,538
(179,210)
(123,543)
(752,433)
826,538
826,538
(179,210)
(126,281)
(752,433)
(1,055,187)
(1,057,925)
(228,649)
(231,387)
744,026
744,026
(154,265)
(110,677)
(667,498)
(932,440)
(188,414)
744,026
744,026
(154,265)
(116,506)
(667,498)
(944,978)
(200,952)
826,538
826,538
(179,210)
(15,280)
(734,081)
(928,571)
(102,033)
744,026
744,026
(154,265)
(19,178)
(640,612)
(820,764)
(76,738)
-
-
-
(15,280)
(2,312)
(17,592)
(17,592)
-
-
-
(19,178)
(7,682)
(26,860)
(26,860)
-
-
-
(95,721)
(16,040)
(111,761)
(111,761)
-
-
-
(78,150)
(19,204)
(97,354)
(97,354)
Elders Limited Annual Financial Report
109
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
RISK MANAGEMENT – NOTE 16: FINANCIAL INSTRUMENTS
(ii) Derivative financial instruments
Due to the unique characteristics and inherent risks of derivative instruments, Elders separately monitors liquidity risk arising from transacting in derivative
instruments. Net settled derivatives comprise interest rate hedges. Net settled derivatives held by Elders at balance date were nil (2021: nil).
(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 5. 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 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
2022
$000
17,840
819,505
837,345
2021
$000
48,063
734,769
782,832
833,679
785,604
3,447
219
6,210
275
837,345
792,089
110
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
RISK MANAGEMENT – NOTE 16: FINANCIAL INSTRUMENTS
(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 is applied effective 1 October 2020. Elders uses cash flow financial
instruments to offset foreign currency exposures on purchases of AgChem products from international suppliers, denominated in US Dollars. The cash
flow financial instruments are not speculative investments. As at 30 September 2022, Elders held designated cash flow hedges with a notional value of
$103.8 million with a fair value asset of $5.3 million (2021: $3.3 million fair value asset). The maturity dates for designated cash flow hedges ranges from
October 2022 to February 2023.
As at 30 September 2022, Elders had the following AUD exposures to foreign currencies that were not designated in cash flow financial instruments:
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
2022
$000
1,873
464
223
471
639
3,670
(2,527)
(240)
-
(2,767)
903
2021
$000
1,864
669
275
3,378
299
6,485
(941)
(240)
(4,265)
(5,446)
1,039
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:
Post tax profit
Higher/(lower)
CNY
IDR
Other
18
(86)
(22)
(4)
(73)
(28)
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.
Elders Limited Annual Financial Report
111
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
RISK MANAGEMENT – NOTE 16: FINANCIAL INSTRUMENTS
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.
Elders applies the hedge accounting principles contained within AASB 9 Financial Instruments. For all effective cash flow hedges entered into,
Elders recognises the movements in fair value of the derivative financial instruments in equity and only recognises the cumulative difference in
the statement of comprehensive income when the hedged item is recognised. Amounts accumulated in equity are included within the initial cost
of the asset where the hedged item subsequently results in the recognition of a non-financial asset such as inventory. Any ineffective portion of a
cash flow hedge is recognised immediately in the profit and loss. Hedge effectiveness is determined at the inception of the hedge relationship, and
prospectively assessed to ensure economic relationships remain between the hedging instrument and hedged item.
Elders documents the economic relationship between hedging instruments and hedged items, including whether changes in the cash flows of the
hedging instruments are expected to offset changes in the cash flows of hedged items. Elders also documents its risk management objective and
strategy for undertaking its hedge transactions.
(e) Financial assets and liabilities measured at fair value
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.
The fair value of financial instruments as well as the method used to estimate the fair values are summarised in the table below:
2022
2021
Quoted
market price
(Level 1)
Valuation
technique
– market
observable inputs
(Level 2)
Valuation
technique –
non market
observable inputs
(Level 3)
Quoted
market price
(Level 1)
Valuation
technique
– market
observable inputs
(Level 2)
Valuation
technique –
non market
observable inputs
(Level 3)
$000
$000
$000
$000
$000
$000
Financial assets and liabilities
Foreign currency derivatives
-
5,264
-
-
3,292
-
112
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
EQUITY – NOTE 17: CONTRIBUTED EQUITY
2022
$000
2021
$000
Issued and paid up capital
156,476,574 ordinary shares (September 2021: 156,476,574)
1,646,630
1,651,006
The movement in the dollar balance of share capital is a result of:
• $9.6 million of treasury shares purchased
• ($3.4) million of dividends where the shareholders have participated in the dividend reinvestment plan
• ($1.8) million of shares transferred from treasury upon vesting of performance rights in accordance with Elders’ Long-Term Incentive Plan
Elders considers both capital and net debt as relevant components of funding, and 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.
Treasury Shares
Treasury shares are shares in Elders Limited that are held for the purpose of allocating shares under the Elders Executive Long-Term Incentive (LTI) and
Short-Term incentive (STI) plans (see note 26 for further information).
Shares issued are recognised on a first-in-first-out basis. There were no treasury shares acquired in FY21.
Opening balance 1 October 2021
Acquisition of shares (average price $13.96 per share)
Allocation of deferred shares under executive performance schemes
Allocation of dividend reinvestment plan shares
Balance 30 September 2022
Number of Shares
-
686,315
(414,554)
(271,761)
-
$000
-
9,584
(5,789)
(3,795)
-
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
EQUITY
EQUITY – NOTE 18: RESERVES
Reconciliation of carrying amounts at beginning and end of period:
Business
combination
reserve
$000
Employee
equity
benefits
reserve
$000
2022
Carrying amount at beginning of period
(27,495)
4,819
Exchange differences on translation of foreign operations
Fair value movement in cash flow hedge
Reclassified to inventory
Less deferred tax impact
Cost of share based payments
Transfer to issued capital
Revaluation of put option
Carrying amount at end of period
2021
-
-
-
-
-
(2,235)
(29,730)
-
-
-
-
3,570
(1,713)
-
6,676
Carrying amount at beginning of period
(27,495)
5,311
Exchange differences on translation of foreign operations
Fair value movement in cash flow hedge
Reclassified to inventory
Less deferred tax impact
Cost of share based payments
Transfer to issued capital
-
-
-
-
-
-
Carrying amount at end of period
(27,495)
-
-
-
-
2,433
(2,925)
4,819
Elders Limited Annual Financial Report
113
Hedge
reserve
$000
932
-
6,757
(7,265)
152
-
-
-
Foreign
currency
translation
reserve
$000
(5,143)
(84)
-
-
-
-
-
576
(5,227)
-
-
3,292
(1,960)
(400)
-
-
932
(5,486)
343
-
-
-
-
-
(5,143)
Total
$000
(26,887)
(84)
6,757
(7,265)
152
3,570
(1,713)
(2,235)
(27,705)
(27,670)
343
3,292
(1,960)
(400)
2,433
(2,925)
(26,887)
114
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
EQUITY – NOTE 18: RESERVES
Nature and purpose of reserves
(i) Business combination reserve
This 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) Hedge reserve
The hedge reserve is used to record the effective portion of gains or losses on derivative financial instruments. Amounts are subsequently included within
the initial cost of the asset where the hedged item subsequently results in the recognition of a non-financial asset such as inventory or profit and loss
as appropriate.
(iv) 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 19: DIVIDENDS
On 17 December 2021, Elders paid a partially franked (20%) final dividend of 22 cents per share. This distribution totalled $33.9 million (December
2020: $20.3 million). The cash outflow was $32.5 million (December 2020: $19.2 million), with the difference reinvested by shareholders under dividend
reinvestment plan.
On 17 June 2022, Elders paid a partially franked (30%) interim dividend of 28 cents per share. This distribution totalled $43.2 million (June
2021: $30.7 million). The cash flow was $41.2 million (June 2021: $29.3 million), with the difference reinvested by shareholders under dividend
reinvestment plan.
Subsidiary equity dividends on ordinary shares:
Dividends paid to non-controlling interests during the year
2022
$000
2021
$000
4,453
2,165
Franking credits available to the parent for subsequent financial years based on tax rate of 30% (2021: 30%)
11,007
10,700
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
GROUP STRUCTURE – NOTE 20: 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 (in liq)
Ashwick (Vic) No 102 Pty Ltd
Australian Independent Rural Retailers Pty Ltd
B & W Rural Pty Ltd
BWK Holdings Pty Ltd (in liq)
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 (in liq)
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 (in liq)
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 (in liq)
Family Hospitals 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 (in liq)
Northern Rural Supplies Pty Ltd
Prels Pty Ltd
Prestige Property Holdings 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
China
Australia
Australia
China
Vietnam
Australia
Australia
Australia
Australia
Australia
Australia
Indonesia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
(a)
(a)
(c)
(d)
(a)
(a)
(a)
(a)
(d)
(d) (f)
(d)
(a)
(d) (f)
(d)
(d)
(d)
(d)
(d) (f)
(a)
(e)
(d)
(d)
(d)
(d) (f)
(d)
(d)
(d)
(d)
(a)
(d) (f)
(d)
(d)
(e)
(e)
(d)
(a)
(d)
(d) (f)
(d)
(d)
(d)
Elders Limited Annual Financial Report
115
% Held by Group
2022
2021
100
100
100
100
100
100
100
100
100
100
77
100
100
76
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
76
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
116
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
GROUP STRUCTURE – NOTE 20: INVESTMENTS IN CONTROLLED ENTITIES
Primac Exports Pty Ltd
Primac Pty Ltd
Redray Enterprises Pty Ltd
Robian Holdings Pty Ltd
SDEA Nominees Pty Ltd
Sunfam 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
% Held by Group
2022
2021
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
(d)
(d)
(d)
(b) (d)
(a)
(d)
(a)
(a)
(a)
(d)
(d)
100
100
100
100
100
100
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)
• Entities acquired or registered during the period are denoted by (b)
• Entities exempted from audit requirements due to overseas legislation or non-corporate status are denoted by (c)
• Entities classified by the Corporations Act as small proprietary companies relieved from audit requirements are denoted by (d)
• Entities denoted by (e) were disposed of, deregistered or liquidated during the year
• Entities denoted by (f) entered members voluntary liquidation 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.
Elders Limited Annual Financial Report
117
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
GROUP STRUCTURE – NOTE 20: INVESTMENTS IN CONTROLLED ENTITIES
(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 (Deed). 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.
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 15. 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, for the year ended
30 September 2022 is set out as follows. The prior period has been adjusted to ensure comparability:
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)
2022
$000
2021
$000
1,425,122
(1,202,050)
223,072
197,476
(52,970)
(14,831)
-
(1,865)
350,882
(59,459)
291,423
848,747
(725,678)
123,069
75,000
(48,795)
(11,417)
-
(2,658)
135,199
(6,592)
128,607
118
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
GROUP STRUCTURE – NOTE 20: INVESTMENTS IN CONTROLLED ENTITIES
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
Lease liabilities
Total non current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
2022
$000
2021
$000
26,154
332,259
73,721
135,845
567,980
274,179
20,721
21,326
161,338
49,703
527,267
6,867
216,623
55,556
174,447
453,493
274,179
18,361
13,625
136,584
108,854
551,603
1,095,247
1,005,096
591,952
6,712
-
8,990
607,654
13,424
13,424
621,078
474,169
678,204
4,097
-
6,334
688,635
7,935
7,935
696,570
308,526
1,646,630
1,651,006
6,163
4,819
(1,178,625)
(1,347,299)
474,169
308,526
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
GROUP STRUCTURE – NOTE 21: PARENT ENTITY
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
Non current liabilities
Total liabilities
Net assets
Issued capital
Retained earnings
Profit reserve
Employee equity reserve
Total equity
Elders Limited Annual Financial Report
119
2022
$000
151,869
151,869
209,215
228,880
438,095
1,684
-
1,684
436,411
2021
$000
54,647
54,647
79,431
288,335
367,766
1,958
-
1,958
365,808
1,646,630
1,651,006
(1,189,821)
(1,341,690)
(26,561)
6,163
436,411
51,673
4,819
365,808
The prior period has been adjusted to ensure comparability.
Guarantees
As disclosed in note 20, 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 extended to the Group as disclosed in note 24.
120
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
GROUP STRUCTURE – NOTE 22: BUSINESS COMBINATIONS – CHANGES IN THE COMPOSITION OF THE ENTITY
(a) Acquisitions
(i) Current period acquisitions
During the current period, Elders acquired a number of small to medium retail and real estate businesses for a total consideration of $39.2 million,
including $10.4 million of deferred consideration. These transactions resulted in the recognition of $23.2 million of goodwill.
(ii) Prior period acquisitions
In the prior period, Elders acquired a number of small to medium retail and agency businesses for a total consideration of $49.0 million, including
$28.6 million of deferred consideration. These transactions resulted in the recognition of $27.9 million of goodwill.
Purchase consideration
Cash paid
Deferred consideration
Total purchase consideration
The total assets and liabilities recognised as a result of acquisitions are:
Cash and cash equivalents
Trade and other receivables
Inventory
Property, plant and equipment
Rent roll
Brand name
Trade and other payables
Provisions
Deferred tax assets/(liabilities)
Net identifiable assets acquired
Goodwill on acquisition
2022
$000
28,849
10,383
39,232
206
-
11,671
1,451
4,014
753
(800)
(616)
(627)
16,051
23,181
39,232
2021
$000
20,352
28,645
48,997
8,324
3,805
10,882
2,879
865
1,078
(5,381)
(1,465)
116
21,103
27,894
48,997
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 $54.0 million (2021: $28.0 million) represents cash
paid, net of cash acquired in respect of businesses acquired during the period of $28.6 million (2021: $12.0) and payments of deferred consideration
relating to acquisitions from prior periods of $23.7 million (2021: $16.0 million).
At 30 September 2022, Elders has $31.3 million (2021: $36.8 million) of deferred consideration amounts related to acquisitions which are included in
current and non current other creditors and accruals in note 8.
(b) Disposals
There were no disposals during the current or prior period other than for equity accounted investments (refer to note 12).
Elders Limited Annual Financial Report
121
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
GROUP STRUCTURE – NOTE 22: BUSINESS COMBINATIONS – CHANGES IN THE COMPOSITION OF THE ENTITY
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.
OTHER NOTES – NOTE 23: EXPENDITURE COMMITMENTS
(a) Operating lease commitments – Elders as a lessee
As a result of the application of AASB 16, Elders' expenditure commitments relating to leases have been recognised as lease liabilities with an
associated right-of-use asset and are presented in note 10 , 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
(b) Capital commitments
Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
Capital expenditure commitments:
● Within one year
● After one year but not later than five years
● After more than five years
Total minimum payments
2022
$000
1,221
1,464
-
2,685
2022
$000
27,217
-
-
27,217
2021
$000
1,316
1,372
-
2,688
2021
$000
-
-
-
-
122
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
OTHER NOTES – NOTE 24: 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 fulfilment 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.
Other guarantees
As disclosed in note 20, 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 extended to Elders.
OTHER NOTES – NOTE 25: 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 sold its 30% equity stake in StockCo holdings. In the prior period Elders received a net repayment of $5.0 million on its advance
to StockCo Holdings Pty Ltd. As at balance date, Elders has no receivable from StockCo Holdings Pty Ltd (2021: $15.1 million) and recognised interest
revenue of $1.5 million (2021: $2.6 million) during the period. Elders also received trail and exclusivity fees of $1.1 million (2021: $1.5 million).
During the year, the Managing Director of AIRR Holdings Limited ceased employment at Elders. During the year, Elders assumed property lease contracts
and made lease payments (comprising principal and interest) totalling $3.2 million (2021: $2.8 million) to related entities of the former Managing Director
of AIRR Holdings Limited. As at balance date, there is no related party relationship, such transactions were on arm’s length commercial terms and
procedures are in place to manage any actual or potential conflicts of interest.
Elders Limited Annual Financial Report
123
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
OTHER NOTES – NOTE 26: 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 tranches, each carrying a different performance
condition. 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:
MD & CEO Grant
Senior Executive Grant
MD & CEO Grant
Senior Executive Grant
MD & CEO Grant
Senior Executive Grant
MD & CEO Grant
Senior Executive Grant
Total
Grant Date
Vesting date Balance at start
of period
Granted
Vested
Lapsed Balance at end
of period
13-Dec-18
15-Feb-19
12-Dec-19
21-Feb-20
17-Dec-20
12-Mar-21
16-Dec-21
22-Dec-21
Nov-21
Nov-21
Nov-22
Nov-22
Nov-23
Nov-23
Nov-24
Nov-24
146,000
243,750
166,000
321,916
101,000
260,000
-
-
1,238,666
-
-
-
-
-
-
102,400
289,500
391,900
146,000
243,750
-
-
-
-
-
-
389,750
-
-
-
-
-
24,333
-
65,800
90,133
-
-
166,000
321,916
101,000
235,667
102,400
223,700
1,150,683
During the period, long-term incentive performance rights expense of $3,059,225 (2021: $2,432,638) was recognised.
For long-term incentive performance rights vesting in November 2022, additional shares of 41,455 (November 2021: 42,518) will be allocated under the
MD & CEO Grant and Senior Executive Grant at the time of vesting for the value of dividends paid but not received on the vested rights during the
performance period.
Performance rights were granted to eligible executives with a three year performance period and split into tranches, each carrying a different performance
condition. Upon vesting of performance rights one fully paid share in Elders will be allocated for each performance right.
The fair value at grant date of the long-term incentive performance rights issued during the year was:
2022
Relative TSR against Comparator Companies Performance Rights
EPS Growth Performance Rights
2021
Relative TSR against Comparator Companies Performance Rights
EPS Growth Performance Rights
MD & CEO
Grant
Senior
Executive Grant
$
$
5.13
10.44
4.30
9.23
5.99
11.15
6.51
11.27
Key inputs in calculating the fair value of the long-term incentive performance rights issued during the year include:
• Share price at valuation date: $11.54 for the MD & CEO Grant (2021: $9.89) and $12.24 for the Senior Executive Grant (2021: $11.89)
• Risk free rate: 1.0% for the MD & CEO Grant (2021: 0.1%) and 0.8% for the Senior Executive Grant (2021: 0.1%)
• Volatility: 30% for the MD & CEO Grant (2021: 39%) and 30% for the Senior Executive Grant (2021: 38%)
• Dividend yield: 3.6% for the MD & CEO Grant (2021: 2.5%) and 3.4% for the Senior Executive Grant (2021: 2.1%)
The weighted average remaining life of the long-term incentive performance rights outstanding at the end of the financial year was 1.0 years. (2021:
1.1 years).
Performance rights associated with the 2019 Long-Term Incentive Plan vested during the period. As a result, a total of 389,750 shares were issued to
relevant participants.
Short term incentive restricted shares
Restricted shares are issued to employees are part of the short term incentive plan. During the period, a total expense of $0.5 million was recognised in
relation to this.
A total of 86,523 restricted shares were allocated to the plan participants and remain unvested at the end of the year.
The weighted average fair value at the grant date is $12.24 (2021: nil).
124
Elders 2022 Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2022
OTHER NOTES – NOTE 27: AUDITOR'S REMUNERATION
Amounts received or due and receivable by the auditor PricewaterhouseCoopers for:
● auditing or review of financial statements
● other non-audit services
●
fee paid to subcontractors of the auditor
Total
2022
$
788,300
10,695
-
798,995
2021
$
699,000
11,500
1,668
712,168
OTHER NOTES – NOTE 28: 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
Total
2022
$
2,503,069
(219,140)
47,998
301,053
1,011,571
3,644,551
2021
$
3,367,145
534,358
90,768
970,013
907,070
5,869,354
For details of Key Management Personnel, see section 6.2 of the Remuneration Report.
OTHER NOTES – NOTE 29: SUBSEQUENT EVENTS
There are no matters or circumstances that have arisen since 30 September 2022 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.
Elders Limited Annual Financial Report
125
DIRECTORS' DECLARATION
For the year ended 30 September 2022
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 2022 are in accordance with the Corporations Act
2001, including:
(i) Giving a true and fair view of its financial position as at 30 September 2022 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
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in the basis of preparation
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
(b)
(c)
Corporations Act 2001 for the year ended 30 September 2022.
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 20 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
14 November 2022
Mark C Allison
Managing Director and CEO
126
Elders 2022 Annual Report
Auditor’s Independence DeclarationAs lead auditor for the audit of Elders Limited for the year ended 30 September 2022, I declare that tothe best of my knowledge and belief, there have been:(a)no contraventions of the auditor independence requirements of theCorporations Act 2001inrelation 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.M.T. LojszczykAdelaidePartnerPricewaterhouseCoopers14 November 2022PricewaterhouseCoopers, ABN 52 780 433 757Level 11, 70 Franklin Street, ADELAIDE SA 5000, GPO Box 418, ADELAIDE SA 5001T: +61 8 8218 7000, F: +61 8 8218 7999, www.pwc.com.auLiability limited by a scheme approved under Professional Standards Legislation. Independent auditor’s report
127
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 Liability limited by a scheme approved under Professional Standards Legislation. 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 2022 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 2022 ● 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 and other explanatory information ● 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 & 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. 128
Elders 2022 Annual Report
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. Materiality ● For the purpose of our audit, we used overall Group materiality of $11.8 million, which represents approximately 5% of the Group’s profit before tax. ● 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 utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly acceptable thresholds. Audit Scope ● 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. Independent auditor’s report
129
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 and Risk Committee. Key audit matter How our audit addressed the key audit matter Accounting for supplier rebates (Refer to note 7) Elders receive rebates on purchases of retail goods for resale from suppliers. These rebates are varied in nature and include price and volume rebates. 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 detailed understanding by the Group of the various contractual arrangements. We considered the accounting for supplier rebates to be a key audit matter because: ● supplier rebates recognised during the year are material to the financial statements; ● 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 cost of sales and the amount that should be deferred to inventory. We performed the following procedures: ● for a sample of rebates recognised as a reduction to cost of sales, we: o agreed terms 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 over the course of the year, to relevant underlying evidence. ● to assess the accuracy of rebates being deferred in inventory as at balance date we: o obtained a listing of retail stock on hand and for a sample of items, traced the rebate percentage back to supplier agreements. We also recalculated the rebate amount deferred against inventory; and o for a sample of rebates receivable, checked that when the related inventory was still on hand at balance date, the rebate amount had been appropriately deducted from inventory. o 130
Elders 2022 Annual Report
Key audit matter How our audit addressed the key audit matter Existence and valuation of Inventory (Refer to note 7) At 30 September 2022, the Group held inventory balances of $484.4 million, as disclosed in Note 7 Inventories. Inventories are valued at the lower of cost and net realisable value (‘NRV’). 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. We considered this a key audit matter due the judgement required by the Group in estimating the net realisable value and the provision for obsolescence in relation to the inventory. In addition, the distribution of the Group’s inventory across a large number of locations may result in an increased risk in relation to existence. We performed the following procedures amongst others: ● developed an understanding of the Group’s process for the procurement and accounting for inventory. ● tested the operating effectiveness of selected controls on a sample basis in relation to the inventory process. ● for a sample of inventory items, we reperformed the calculation of weighted average cost using the Group’s methodology. ● attended stocktakes at selected locations and performed the following procedures, amongst others: o observed the Group’s processes and controls during the stocktakes, o selected a sample of inventory items from the Group’s inventory records and compared the quantity recorded to the actual amount counted during the stock takes. ● for a sample of inventory items, traced the inventory quantity counted during the stocktakes to the Group’s inventory records. ● for a sample of inventory purchases and sales made between the stocktake date and balance sheet date, we checked the inventory movements to the relevant supporting documentation. ● for a sample of inventory items sold after the year end, we compared the selling price net of estimated selling costs to the cost of the inventory items at the balance date. ● assessed the reasonableness of the financial report disclosures against the requirements of Australian Accounting Standards. Independent auditor’s report
131
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 2022, 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. 132
Elders 2022 Annual Report
Our opinion on the remuneration report We have audited the remuneration report included in pages 51 to 69 of the directors’ report for the year ended 30 September 2022. In our opinion, the remuneration report of Elders Limited for the year ended 30 September 2022 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 M. T. Lojszczyk Adelaide Partner 14 November 2022 Independent auditor’s report
133
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134
Elders 2022 Annual Report
ASX
Additional
Information
a) Distribution of Ordinary Shares as at 1 November 2022
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
Total Units
Percentage FPO
4,085,521
11,956,321
6,109,987
16,717,848
117,606,897
156,476,574
2.610%
7.640%
3.900%
10.680%
75.160%
100.000%
Holders
11,593
5,097
836
684
56
18,266
856
Distribution of Unquoted Equity Securities at 1 November 2022
As noted on page 47 of the Directors' Report, performance rights are the only unquoted equity securities on issue as at the date of this report.
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 Unquoted
Equity Securities
Holders
0
0
25,833
755,450
369,400
1,150,683
0.000%
0.000%
2.250%
65.650%
32.100%
100.00%
0
0
3
17
1
21
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.
ASX Additional Information
135
d) Twenty Largest Shareholders as at 1 November 2022
The twenty largest holders of Elders Ordinary Shares were as follows:
No. of shares
%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
MR MARK CHARLES ALLISON
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
VENN MILNER SUPERANNUATION P/L
BNP PARIBAS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
PACIFIC AGRIFOODS INVESTMENTS PTY LTD
SANDHURST TRUSTEES LTD
MR KWOK CHING CHOW & MS PIK YUN PEGGY CHAN
NETWEALTH INVESTMENTS LIMITED
CERTANE CT PTY LTD
G HARVEY NOMINEES PTY LIMITED
PJ & JL ROBERTS PTY LTD
LEUTENEGGER INVESTMENTS PTY LTD
Total Securities of Top 20 Holdings
39,849,051
24,591,302
21,988,779
10,581,904
5,771,758
1,969,217
1,378,606
955,293
869,223
800,000
643,411
383,657
335,456
314,620
310,000
300,323
289,134
278,000
271,020
261,081
25.466%
15.716%
14.052%
6.763%
3.689%
1.258%
0.881%
0.611%
0.555%
0.511%
0.411%
0.245%
0.214%
0.201%
0.198%
0.192%
0.185%
0.178%
0.173%
0.167%
112,141,835
71.667%
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 2022.
Shareholder
No. of shares
Percentage of shares held at date of notice
Vanguard Group 7,839,970
5.010%
Date of notice
19 October 2022
e) Corporate Governance Statement
Elders’ 2022 Corporate Governance Statement can be found online at investors.elderslimited.com/investor-centre/?page=annual-reports
(cid:753)(cid:755)(cid:758)
Elders (cid:754)(cid:752)(cid:754)(cid:754) Annual Report
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S(cid:76) are(cid:4)
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(cid:48) imited
Boardroom(cid:4) Pty(cid:4)
(cid:48) evel(cid:4) 8, 210 (cid:43) eorge(cid:4) Street,
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(cid:56) his(cid:4) service(cid:4) is(cid:4)
(cid:56) ax(cid:4) and(cid:4) dividend/
interest(cid:4) payments
lders(cid:4) is(cid:4) obliged(cid:4) to(cid:4) deduct(cid:4) tax(cid:4) from(cid:4) dividend/(cid:4)
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not(cid:4) quoted(cid:4) their(cid:4)
(cid:56) ax(cid:4) File(cid:4) Number(cid:4) ((cid:56) FN)(cid:4) to(cid:4)
the(cid:4) Company.(cid:4) Shareholders(cid:4) who(cid:4) have(cid:4) not(cid:4)
already(cid:4) quoted(cid:4) their(cid:4)
contacting(cid:4) Boardroom.
(cid:56) FN(cid:4) can(cid:4) do(cid:4) so(cid:4) by(cid:4)
C(cid:76) ange(cid:4) o(cid:74)
(cid:4) address
Issuer(cid:4) Sponsored(cid:4) Shareholders(cid:4) who(cid:4) have(cid:4)
changed their(cid:4) address(cid:4) should(cid:4) advise(cid:4)
Boardroom(cid:4) in(cid:4) writing.(cid:4) Written(cid:4) notification(cid:4) can(cid:4)
be(cid:4) emailed(cid:4) or(cid:4) posted(cid:4) to(cid:4) Boardroom(cid:4) at(cid:4) the(cid:4)
address(cid:4) shown(cid:4) ad(cid:78) acent(cid:4) and(cid:4) must(cid:4) include(cid:4) both(cid:4)
old(cid:4) and(cid:4) new(cid:4) addresses(cid:4) and(cid:4) the(cid:4) Securityholder(cid:4)
Reference(cid:4) Number(cid:4) (SRN)(cid:4) of(cid:4) the(cid:4) holding.
Alternatively,(cid:4) holders(cid:4) can(cid:4) amend(cid:4) their(cid:4) details(cid:4)
on-line via(cid:4) Boardroom’s(cid:4) website.(cid:4) Shareholders(cid:4)
who(cid:4) have(cid:4) broker(cid:4) sponsored(cid:4) holdings(cid:4) should(cid:4)
contact(cid:4) their(cid:4) broker(cid:4) to(cid:4) update(cid:4) these(cid:4) details.
Annual(cid:4)
(cid:54) eport(cid:4) mailing(cid:4) list
Shareholders(cid:4) who(cid:4) wish(cid:4) to(cid:4) vary(cid:4) their(cid:4) Annual(cid:4)
Report(cid:4) mailing(cid:4) arrangements(cid:4) should(cid:4) advise(cid:4)
Boardroom(cid:4) online(cid:4) or(cid:4) in(cid:4) writing.
lectronic(cid:4) versions(cid:4) of(cid:4) the(cid:4) report(cid:4) are(cid:4) available(cid:4) to(cid:4)
all(cid:4) via(cid:4) the(cid:4) Company’s(cid:4) website.(cid:4) Annual(cid:4) Reports(cid:4)
will(cid:4) be(cid:4) mailed(cid:4) to(cid:4) all(cid:4) shareholders(cid:4) who(cid:4) have(cid:4)
elected(cid:4) to(cid:4) be(cid:4) placed(cid:4) on(cid:4) the(cid:4) mailing(cid:4) list(cid:4) for(cid:4)
this(cid:4) document.
(cid:4)
(cid:41)
(cid:41)
Company Directory
137
Company
Directory
Directors
Mr Ian Wilton — MSc, FCCA, FCPA, FAICD, CA
Mr Mark C Allison — BAgrSc, BEcon, GDM, AMP (HBS), FAICD
Ms Robyn Clubb AM — BEc, CA, F Fin, MAICD
Ms Diana Eilert — BSc (Syd), MCom (UNSW), GAICD
Mr Matthew Quinn — BSc, ACA
Ms Raelene Murphy — BBus, FCA, GAICD
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 8, 210 George Street, Sydney, NSW, 2000
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)