Elders Limited ABN 34 004 336 636.
Registered Office: Level 10, 80 Grenfell Street, Adelaide SA Australia 5000
18 November 2024
Appendix 4E and Annual Report for the Financial
Period Ended 30 September 2024
Elders Limited (ASX:ELD) today reports its results for the financial year ended 30 September 2024.
Attached is the Appendix 4E (Results for announcement to the market) and Annual Report for the 12-month
period ended 30 September 2024.
Further Information:
Mark Allison, Managing Director & Chief Executive Officer, 0439 030 905
Authorised by:
Elders Limited Board of Directors
View this announcement on Elders’ Investor Hub.
Elders Limited Appendix 4E (Rule 4.3A)
RESULTS FOR ANNOUNCEMENT TO MARKET
For the year ended 30 September 2024
Attached is the final report for the year ended 30 September 2024. The consolidated profit after tax and non-controlling interests was
$45.1 million (2023: $100.8 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
12 months
September
2024
$000
Revenue
down
6%
to
3,131,290
Profit after tax for the year attributable to members
down
55%
to
45,080
Dividends
Amount
per security
Franked amount
per security
2024
Final Dividend
18 cents
12.6 cents
Interim Dividend
18 cents
9.0 cents
Total
36 cents
21.6 cents
2023
Final Dividend
23 cents
6.9 cents
Interim Dividend
23 cents
6.9 cents
Total
46 cents
13.8 cents
The record date for the final dividend is 18 December 2024. Dividend payment date is 24 January 2025.
September
2024
September
2023
$
$
Net tangible assets backing per ordinary security (158,041,121)1
1.93
2.80
1
Assets for the purpose of net tangible assets include right-of-use assets associated with leases recognised in accordance with AASB 16
Details of subsidiaries, associates and joint ventures
Subsidiaries and joint ventures
Name
% Held by the group
Details of entities over which control has been gained
IPST Holdings Pty Ltd
100
Integrated Property Services Tas Pty Ltd
100
KF Tas (Property Services) Pty Ltd
100
KF Tas (Valuations) Pty Ltd
100
SBK Beef Pty Ltd
75
Details of entities over which control has been lost
Elders China Trading Company
100
Elders Fine Foods (Shanghai) Company
100
Primac Exports Pty Ltd
100
Details of acquired associates or joint venture entities
TLX Pty Ltd
50
Annual Report
2024
Elders Limited ABN 34 004 336 636
Bordertown Branch approx 1910
1
Contents
Chair's Report
2
CEO’s Report
4
Year in Brief
6
Operating and Financial Review
8
Review of Operations
20
Sustainability
29
Directors’ Report
38
Remuneration Report
45
Executive Management
66
Elders Limited Annual Financial Report
70
Shareholder Information
131
Company Directory
132
Elders Limited Annual Financial Report
2
Chair’s Report
Elders has demonstrated its
durability in FY24, delivering
a reasonable financial
result, including underlying
earnings before interest and
tax of $128 million, despite
difficult conditions in the
first half of FY24. Directors
announced a final dividend of
18 cents per share.
Financial and
operational highlights
The agricultural operating landscape has
generated plenty of challenges, with
declines in livestock prices in the first
quarter impacting Elders’ agency business,
reducing demand for animal health
products and diminishing client sentiment.
Performance of the agriculture sector varied
across the country with some regions
flourishing and others facing drought-like
conditions. A focus on building and
maintaining Elders’ product and geographic
diversification has allowed us to deliver
steady earnings overall during this period.
‘First strike’ against the 2023
Remuneration Report
At the 2023 AGM, Elders received a ‘first
strike’ against the Remuneration Report
when more than 25% of votes were
cast against the adoption of the Report.
Shareholders also rejected a proposal to
award Mark Allison Service Rights intended
to incentivise him to remain as Managing
Director and Chief Executive Officer until
at least June 2025.The Board subsequently
determined to settle its commitment to Mr
Allison by way of a cash payment.
The Board invested considerable time
engaging with proxy advisors and major
shareholders during the year. Their feedback
indicated that the vote against the
Remuneration Report reflected concerns
with the overall level of the remuneration
package put in place to retain the services
of Mr Allison and the succession planning
prior to Mr Allison’s intent to retire
from Elders. Your Board acknowledges the
concerns expressed by shareholders and
proxy advisors as a result of what were
one-off decisions taken to deal with the
circumstances related to CEO succession.
These were intended to mitigate risks to
the business at the time, taking account
of Elders’ systems modernisation and
supply chain rationalisation, along with the
challenging business conditions.
The Board believes the remuneration
package put in place for Mr Allison
is reasonable and appropriate for the
circumstances of the company and Mr
Allison’s performance, and in line with
external benchmarking sourced from an
independent third party.
Mr Allison’s value to Elders has been
demonstrated by his leadership, particularly
in respect of laying a foundation for
the continued growth of the company
through significant acquisitions in FY24, the
completion of the ground-breaking Elders
Wool facility and the continued momentum
in systems modernisation.
Board renewal
We have implemented significant changes
to the Board at Elders in the last 12
months to ensure that we are equipped with
the right skills and expertise to serve the
business as it continues to grow. Following
the departures of two directors earlier in the
year, in December 2023 we welcomed John
Lloyd, a director with extensive experience
and knowledge of the agricultural industry
in both cropping and livestock sectors, and
whose broad understanding of agribusiness
will be of immense benefit to the Board.
In August 2024, Damien Frawley joined the
Board as Non-Executive Director. Mr Frawley
is a respected leader and experienced
CEO and director. He is currently Chair of
Queensland Treasury Corporation and Chair
of Host-Plus Pty Limited. Mr Frawley is also a
non-executive director of both Mirvac Group
and Blue Sky Beef Pty Ltd. Mr Frawley brings
skills in CEO and leadership oversight,
board leadership, strategy and planning,
talent and remuneration, customers and
consumers and government relations.
Chair's Report
3
In September 2024, Glenn Davis, a highly
experienced director of both listed and
unlisted companies, also joined the Board.
He has almost 40 years of experience as
a commercial lawyer. Mr Davis is a director
of SkyCity Entertainment Group Limited (and
Chair of its Adelaide-based casino), Chair
of ASX listed Adrad Holdings Limited and
Chair of ASX listed Itech Minerals Ltd.
He was previously Chair of Beach Energy
Limited. His knowledge and skills will add
significantly to the Board as the company
continues its development.
CEO succession and
leadership changes
The Board has continued its important
task of CEO succession planning during
FY24, working with an external professional
firm to identify, evaluate and develop the
Elders' senior executive team. The executive
leadership team has developed significantly
in recent years. Changes this year included
the appointment of Patrick White as
General Counsel. He has responsibility
for the Company’s legal, compliance, risk
and insurance functions. Prior to his
appointment, Mr White served as Elders’
Head of Legal Affairs for nearly 10 years,
a role in which he helped to protect
and grow shareholder value through the
provision of advice and services across the
entire group. His appointment followed the
decision, by Elders’ Company Secretary and
General Counsel Peter Hastings, to step
down from the executive team, a position
he has held since 2010. In December this
year Amanda-Lea Smith, an experienced
human resource and safety executive, will
join the company as Executive General
Manager People and Performance, further
strengthening the executive team.
I am pleased that as the Board continues
CEO succession planning, Mr Allison has
indicated his willingness to continue in the
role of Managing Director and CEO at least
until the end of the current Eight Point Plan,
in 2026.
With a secure leadership team in place,
and refreshed CEO succession plans being
overseen by a Board that has continued
its own renewal process, your Directors
look forward to continuing to oversee the
interests of shareholders through the next
chapter of Elders’ growth and success.
I would like to recognise my fellow directors
and all members of the Elders' team for
their dedication and commitment. Finally,
thank you to all our shareholders for your
ongoing support.
Ian Wilton
Chair
Elders Limited Annual Financial Report
4
CEO’s Report
Against a backdrop
of fluctuating commodity
markets and challenging
trading conditions, Elders
has delivered a resilient
result in FY24.
Brand
Guided by the Eight Point Plan, Elders’
performance reflects our commitment
to achieving long-term consistent and
methodical growth, driven by financial
discipline and decision making that is true
to our core as a pure-play agribusiness.
On the back of this approach, Elders was
awarded the ‘Most Trusted Agribusiness
Products and Services Brand’, and the
‘Best of the Best Most Trusted Agribusiness
Brand’ in the 2024 Roy Morgan Trusted
Agribusiness Brand Awards. Through our 185
years of servicing rural Australia, we have
taken great care to nurture strong client
relationships built on a foundation of trust,
and I am proud to deliver this result.
Safety and wellbeing
At Elders, we are dedicated to continually
evolving and improving our safety
performance. This year we maintained our
downward trend in lost time injuries to two,
compared to three in FY23. We also made
progress in reducing our Total Recordable
Injury Frequency Rate (TRIFR) from 10.1 in
FY23 to 9.0 in FY24. It is unacceptable that
any of our people are harmed at work,
and we continue to strive for a ‘zero harm’
work environment.
Central to employee wellbeing is their
feeling of inclusion and representation in
the workplace. In FY24, the Elders Inclusion
Committee introduced our inaugural
Indigenous Engagement Strategy to support
Elders in creating shared benefits and
expanding our contribution to communities.
We also progressed our efforts to increase
the proportion of women in higher paying
roles through recruitment and succession
programs. This is an area that we will
continue to focus on in FY25.
Resilient financial performance
In FY24, our underlying earnings before
interest and tax (EBIT) was $128.0 million,
a decrease of 25% on last year. An
underperforming first quarter, caused by
declining livestock prices, lower crop
protection gross margin and subdued
client sentiment, was partially offset
by improved trading in the second
half. This resilient result reflects Elders’
investment in a geographically diversified,
multi-product portfolio.
Summary of the FY24 results include:
• sales of $3,131.3 million (down 6%) and
gross margin of $637.6 million (up 3.0%)
benefitting from recent acquisitions, the
commencement of Elders Wool and
recovery in livestock prices
• costs of $509.6 million, up 14%, driven by
continued investment in transformational
growth initiatives and acquisitions. Costs,
excluding transformation and acquisitions
held below CPI at 1.8%
• underlying EBIT of $128.0 million (down
25%) and return on capital of 11.3%,
were impacted by low livestock prices and
subdued client sentiment in Q1, partially
offset by an improved H2 performance
• operating cash inflow of $82.9 million,
resulting in a cash conversion of 129%
• covenant leverage ratio of 1.3 times
against a limit of 2.5 times, demonstrating
significant headroom
• accounting leverage ratio of 3.1 times,
forecast to return to target by FY25
H1 based on a normalised Q1 and
debtor collection.
CEO’s Report
5
Growth and reinvestment
A major highlight of 2024 has been the
growth of our network, which expanded by
21 points of presence to welcome a range
of high-quality bolt-on businesses that have
incremental benefit to our earnings.
The launch of Elders Wool is another key
highlight for us. We officially launched
Elders Wool in August 2024 at our world-
first automated Ravenhall facility, with
the opening marking the single largest
investment in Australian wool handling this
century. We see this as a reaffirmation of
Elders’ enduring commitment to the sheep
and wool industry and its growers, and a
vote of confidence for wool’s future as a
sustainable and in-demand fibre.
Investment in our Systems Modernisation
project is integral to Elders’ ability to
continue to grow and provide a seamless
experience to our customers. In FY24 we
progressed to Wave 2 where we will
begin to implement Microsoft Dynamics
365 for our retail operations and supply
chain. Commencing in South Australia and
moving to a national rollout in 2025,
transitioning from our legacy system will
allow us to streamline our processes across
sales, inventory management and customer
service, setting us up for success into
the future. We have also commenced work
on Wave 3 Livestock, in which we’re
implementing Saleg8 as our new livestock
operations system.
Longstanding commitment to
sustainability and innovation
Elders continues to advocate for the
sustainable growth of our sector to
meet industry ambitions of $100 billion
pre-farmgate value by 2030. Our work
with industry bodies and education
institutions is evidence of this; our
continued partnership with industry leading
agricultural innovation event, evokeAG,
continues to foster entrepreneurship in
the industry, and in September we signed
a Memorandum of Understanding with
SmartSat Cooperative Research Centre,
Australia’s leading space research centre
to explore how satellite-enabled earth
observation technologies can be used
in agriculture.
We have continued to evolve our offering to
clients to support their own sustainability
goals through our Thomas Elder Sustainable
Agriculture (TESA) division, including our
carbon farming arm. Elders is in position to
provide tailored advice to growers with the
backing of our national network to assist
producers with navigating the complexities
of the carbon market, and TESA is facilitating
the delivery of this service with commercial
projects and trials around the country.
The wellbeing and resilience of rural
and regional communities is an important
element of our sustainability strategy, and
an area in which we excelled this year.
In FY24 we actively supported rural and
regional Australia not just in our dealings
with producers each day, but through
our advocacy work with the Regional
Australia Institute. We also launched the
first round of the Elders Community
Giving Project which provided 14 grants to
small community groups and organisations
around the country to implement long-term
change in rural and regional Australia.
Our most trusted brand title affirms that
our community engagement strategy is
effectively supporting the communities that
are intrinsic to the success of our business.
Outlook
A return to average seasonal conditions
appears promising for FY25, and we intend
to maintain a heightened focus on the
fundamentals of our Eight Point Plan
strategy to achieve sustainable, consistent
growth and create shareholder value. Cost
control and reduction is a central focus
that will allow us to maintain acceptable
shareholder returns in challenging
conditions and excellent shareholder
returns in favourable conditions.
The significance of achieving 185 years
servicing Australian farmers in 2024 does
not go unrecognised here at Elders. Our
longevity is a testament to the unparalleled
understanding that Elders has of the farming
landscape and the needs of our clients.
Our unwavering commitment to this sector
means we continue to prosper as leaders at
the forefront of the agriculture industry. On
behalf of the leadership team, I would like
to thank our people for their dedication to
achieving FY24’s result, and our clients for
their ongoing support.
Mark Allison
Managing Director
and CEO
2
LOST TIME
INJURIES
#1
MOST TRUSTED
AGRIBUSINESS BRAND1
amongst farmers for the fifth year in a row
77%
EMPLOYEE
ENGAGEMENT
47
NET PROMOTER
SCORE
1 Most Trusted Agribusiness Products and Services Brand’, and the ‘Best of the Best Most Trusted Agribusiness Brand’
in the 2024 Roy Morgan Trusted Agribusiness Brand Awards
Elders Limited Annual Financial Report
6
YEAR
IN BRIEF
$3.1b
Sales
revenue
volume growth offset by softening input prices
$509.6m
Costs
investment in people and transformational projects
3.1x
Leverage
ratio
expected to return within target range in FY25
$128m
Underlying
EBIT
resilient performance despite market headwinds
$637.6m
Gross
margin
diversified portfolio mitigating adverse headwinds
11.3%
Return
on
capital
negatively impacted by Q1 under performance
36c
Dividends
per share
resulting in a dividend payout ratio of 88%
129.5%
Cash
conversion
exceeds target of 90% per capital management framework
Year in Brief
7
Operating and
Financial Review
2024
Cotton Harvest – Griffith NSW, 2024
Operating and Financial Review
9
Operating and
Financial Review
Improved second half trading
partially offset the negative
earnings impact in the
first quarter from low
livestock prices, lower crop
protection margins and
subdued client sentiment.
Our product, channel and
geographical diversification
allowed Elders to partially
overcome market headwinds,
particularly impacting Q1,
while investment continues
in our transformational
projects to support
underlying EBIT growth and
operational efficiency.
Key metrics for the full year ended
30 September 2024:
• resilient underlying EBIT at $128.0 million
• improved gross margin result of
$637.6 million, supported by livestock
price recovery throughout the year
• cost increase of 14%, resulting
primarily from recent acquisitions and
transformational growth initiatives
• return on capital of 11.3% and
leverage ratio of 3.1x, impacted by the
subdued Q1 performance and spend on
transformational projects
• operating cash inflow of $82.9 million
and cash conversion ahead of target
at 129%
• thirteen new businesses acquired and
21additional points of presence to expand
our product and geographical footprint
• providing shareholder returns with
underlying EPS of 40.7 cents and
dividends per share of 36.0 cents
• sustaining a safer working environment
with the total recordable injury frequency
rate decreasing to 9.0
• commitment to sustainability
priorities, including achieving key
climate milestones
• diverse working environment, with 45%
of the workforce are women and 21%
of leadership positions are occupied
by women
• awarded Australia's Most Trusted
Agribusiness Brand amongst farmers for
the fifth year in a row
Elders FY25 outlook:
• improving market conditions anticipated
to benefit our multi-channelled and
diversified portfolio
– favourable summer crop planting in
key geographic areas following average
seasonal outlook, with gradually
improving Rural Products margins from
the stabilisation of fertiliser and crop
protection prices
– cattle and sheep price recovery a
tailwind for FY25, partially offset
by potential volume pressure with
improving pasture availability
– improving inflationary conditions
through FY25 in line with the Reserve
Bank forecast, and continued focus on
cost management to hold the cost base
below CPI excluding acquisition and
new business
• new acquisitions and greenfield
opportunities will expand our points
of presence and support product and
geographical diversification
• continued uptake at our wool handling
facilities generating margin improvement
and customer satisfaction
• Systems Modernisation project wave 2
forecast to go live in November 2024,
and ongoing investment in our other
transformational initiatives to enhance
capabilities and capture efficiencies
Elders Limited Annual Financial Report
10
Profit and Loss
Profit: Reported and Underlying
$million
FY24
FY23
Change
Change %
Sales
3,131.3
3,321.4
(190.1)
(6%)
Gross margin
Retail Products
284.5
306.9
(22.4)
(7%)
Wholesale Products
75.7
71.7
4.0
6%
Agency Services
123.1
113.7
9.4
8%
Real Estate Services
82.6
59.5
23.1
39%
Financial Services
54.5
53.5
1.0
2%
Feed and Processing Services
17.2
13.7
3.5
26%
Total gross margin
637.6
619.0
18.6
3%
Costs (distribution and administration)
(509.6)
(448.2)
(61.4)
(14%)
Underlying earnings before interest and tax
128.0
170.8
(42.8)
(25%)
Finance Costs
(34.6)
(22.9)
(11.7)
(51%)
Underlying profit before tax
93.4
147.9
(54.5)
(37%)
Tax
(24.7)
(39.1)
14.4
37%
Non-Controlling Interests
(4.8)
(5.0)
0.2
4%
Underlying profit to shareholders
64.0
103.7
(39.7)
(38%)
Items excluded from underlying profit
(18.9)
(2.9)
(16.0)
552%
Reported profit after tax to shareholders
45.1
100.8
(55.7)
(55%)
Underlying earnings before interest, tax, depreciation and amortisation
201.5
228.4
(26.9)
(12%)
Underlying earnings per share (cents)
40.7
66.3
(25.6)
(39%)
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 are 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
FY24
FY23
Commentary
Acquisition, divestment and other closure costs
(7.2)
1.5
Costs incurred to exit various investments
Restructuring initiatives
(6.1)
-
Costs associated with the re-organisation of operations and
structure to improve efficiency and reduce costs
Platform and system modernisation
(5.6)
(5.4) Relates to platform modernisation costs that are one off in nature
and cannot be capitalised
Business transformation costs
(4.8)
(4.5) Recognition of one off costs for transformational activity, mostly
related to start-up costs for Elders Wool
Other costs
(2.0)
(0.6) Predominantly relates to one off retention arrangements
Tax adjustments
6.7
6.1
Tax benefits from temporary differences on one off costs
Total
(18.9)
(2.9)
Operating and Financial Review
11
Sales
Sales decreased $190.1 million or 6% compared to the prior year, proving a resilient result considering the material impact to Q1 from lower
livestock prices and associated reduction in client sentiment, as well as lower input prices for key agricultural chemicals and fertilisers.
Prices for Retail Products remained historically low offsetting improved volumes sold across most categories. Key FY24 upsides include strong
performances from Real Estate Services, our Elders Wool Handling investment and Elders Finance offering.
Gross Margin
Retail Products
Retail Products continued to grow market share, achieving volume growth across most products, benefitting from our backward integration
strategy and gradual improvement in seasonal conditions following the materially lower Q1 performance. Margins remained negatively impacted
by subdued crop protection and fertiliser input prices, compared to prior period.
Wholesale Products
Wholesale Products were up on the prior period, as demand for animal health products benefitted from the recovery in livestock prices following
the sell-off in 2023.
Agency Services
Agency Services margin increased largely driven by the recovery in livestock prices and higher volumes sold, with wool margins benefitting from
Elders Wool as throughput and earn-per-bale increased.
Real Estate Services
Real Estate Services margin benefitted from recent acquisitions, particularly Knight Frank in Tasmania, and improved broadacre demand
following the recovery in the livestock market.
Financial Services
Financial Services made considerable progress in the transition to the expanded broker model with earnings growth across all products largely
attributable to the Elders Insurance business and Elders Home Loans.
Feed and Processing Services
Feed and Processing Services margins recovered from negatively impacted trading conditions in Q1, with improvements in feeder cattle and
commodity prices benefitting the second half of FY24.
Costs
Costs increased $61.4 million or 14% compared to last year, largely attributable to acquisitions ($26.0 million), which contributed to increased
people costs ($24.5 million or 8%). FTE employees reduced by 15, excluding acquisitions and new business.
Net Profit After Tax
Net profit after tax includes the recognition of underlying tax expense ($24.7 million). The physical payment of tax is forecast to recommence
in FY26.
Elders Limited Annual Financial Report
12
EBIT by Geography
$million
FY24
FY23
Change
Change %
Wholesale Products
31.3
32.1
(0.8)
(2%)
New South Wales
40.4
44.6
(4.2)
(9%)
Queensland and Northern Territory
12.6
21.0
(8.4)
(40%)
Victoria and Riverina
58.4
57.1
1.3
2%
South Australia
26.7
36.4
(9.7)
(27%)
Tasmania
5.2
5.0
0.2
4%
Western Australia
31.1
50.5
(19.4)
(38%)
Corporate Overheads
(77.7)
(75.9)
(1.8)
(2%)
Underlying earnings before interest and tax
128.0
170.8
(42.8)
(25%)
Wholesale Products
Earnings improvement in the second half of FY24 was unable to fully offset the impact of the material Q1 under-performance on animal heath
products, in line with lower livestock prices and increased costs.
New South Wales
Agency Services gross margin was a key tailwind, with a recovery in livestock prices and increased volumes. This was more than offset by weaker
Rural Products earnings and increased costs, due to higher average FTEs and increased property costs. Pleasingly, the Killara Feedlot contributed
favourably to margin, benefitting from a decline in both feeder cattle and feed prices.
Queensland and Northern Territory
Real Estate gross margin was a key upside, with favourable residential and property management earn. Unfortunately it was unable to offset the
decline in performance by the other products and inflation in people costs.
Victoria and Riverina
Sizable gross margin improvement across all products, benefitting from the Charles Stewart acquisition and recovery in Agency Services.
South Australia
Unfavourable seasonal conditions with limited rainfall adversely affecting Rural Products demand, coupled with ongoing margin pressure,
partially offset by improved Agency Services and Real Estate earnings as livestock prices recovered. Costs were maintained below inflation.
Tasmania
Tasmania's EBIT increased, primarily due to higher residential Real Estate earnings following the Knight Frank acquisition.
Western Australia
Gross margin was adversely affected by unfavourable seasonal conditions which materially impacted H1 earnings, particularly Rural Products.
Real Estate showed improvement on the prior period, with improvement across most products in the second half of FY24.
Corporate Overheads
Corporate overheads increased mainly due to inflation, people costs and strategic investment through acquisitions and transformational
projects, offset by business initiatives.
Operating and Financial Review
13
Capital Management
Balance Sheet
$million
FY24
FY23
Change
Change %
Trade and other receivables
895.3
738.2
157.1
21%
Inventory
399.5
491.7
(92.2)
(19%)
Livestock
47.4
49.1
(1.7)
(3%)
Trade and other payables
(667.0)
(646.2)
(20.8)
(3%)
Working capital
675.2
632.8
42.4
7%
Property, plant and equipment
93.2
70.6
22.6
32%
Right-of-use assets
246.6
199.2
47.4
24%
Equity accounted investments and other financial assets
66.1
79.9
(13.8)
(17%)
Intangibles
538.1
409.3
128.8
31%
Provisions
(79.5)
(76.6)
(2.9)
(4%)
Capital (net operating assets)
1,539.7
1,315.2
224.5
17%
Borrowings: working capital and other facilities
(477.0)
(281.2)
(195.8)
(70%)
Lease liabilities
(253.7)
(203.6)
(50.1)
(25%)
Cash and cash equivalents
40.2
21.5
18.7
87%
Net debt
(690.5)
(463.3)
(227.2)
(49%)
Tax assets
(3.9)
14.9
(18.8)
(126%)
Shareholders' equity
845.3
866.8
(21.5)
(2%)
Working Capital
$million
FY24
FY23
Change
Change %
Retail Products
502.2
463.8
38.4
8%
Wholesale Products
110.6
116.1
(5.5)
(5%)
Agency Services
63.2
40.9
22.3
55%
Real Estate Services
(18.4)
1.3
(19.7)
(1515%)
Financial Services
(0.3)
10.4
(10.7)
(103%)
Feed and Processing Services
51.9
54.8
(2.9)
(5%)
Other
(34.0)
(54.5)
20.5
38%
Working capital (balance date)
675.2
632.8
42.4
7%
Working capital (average)
676.0
733.8
(57.8)
(8%)
Key movements in working capital
Working capital as of balance date closed at $675.2 million, up $42.4 million or 7%, primarily due to the increase in trade and other receivables
partially offset by a favourable movements in trade and other payables and inventory:
• trade and other receivables increased $157.1 million or 21%, mainly due to higher Rural Products and livestock debtors (up 17% and 12%
respectively), as a result of some temporary pressure on debtor days in the Rural Products business, and a later winter crop season in WA
and SA
• inventory (including livestock) fell $93.8 million or 17% on last year, benefitting from our supply chain optimisation initiatives and lower crop
protection prices
• trade and other payables increased $20.8 million or 3%, mainly due to the impact on clients from unfavourable seasonal timing.
Key movements in net operating assets
Net operating assets at balance date increased $224.5 million or 17% on last year to close at $1,539.7 million:
• intangibles grew $128.8 million or 31%, driven by goodwill on thirteen acquisitions in FY24
• provisions increased $2.9 million or 4%, predominantly as a result of higher leave entitlements, offset by lower staff incentives
• property, plant and equipment increased $22.6 million or 32%, largely relating to investment spend on our transformational initiatives
• right-of-use assets increased $47.4 million or 24%, resulting from recent acquisitions, additional distribution centres and new locations, as
well as renegotiated lease contracts.
Elders Limited Annual Financial Report
14
Net Debt
Net debt at balance date was $690.5 million, which is up $227.2 million or 49% on the prior year. Lease liabilities comprises $253.7 million of
the total balance and $50.1 million of the movement. The positive operating cash inflow was mainly offset by further capital expenditure on our
transformational initiatives and acquisition spend on thirteen businesses.
Capital management ratios
Key Ratios - rolling 12 months
FY24
FY23
Change
Change %
Underlying return on capital (%)
11.3%
16.0%
(4.7%)
n/m
Leverage ratio (balance date net debt to EBITDA) (times)
3.1
1.4
1.7
114%
Interest cover ratio (EBITDA to net interest) (times)
4.8
9.2
(4.4)
(48%)
Gearing ratio (balance date net debt to closing equity) (%)
51.7%
30.0%
21.7%
n/m
Leverage excluding AASB 16 (Elders' preferred measure) totalled 3.1 times and bank covenant leverage, which excludes the Rabobank debtor
facility, of 1.3 times against a covenant limit of less than 2.5 times. Our undrawn facilities as at 30 September 2024 were $90.9 million out of
total committed facilities of $655.0 million.
Financial ratios were negatively impacted by the trading conditions that prevailed in the first quarter. Consequently, significant improvement is
forecast across these ratios assuming a normalised first quarter in FY25.
Tax Assets
Tax assets balance, which includes both deferred tax assets and tax liabilities, decreased $18.8 million or 126% to $3.9 million at balance date.
This is driven by the recognition of an underlying tax expense of $24.7 million.
Shareholders' Equity
Shareholders’ equity at balance date closed at $845.2 million, a decrease of $21.6 million or 2% on prior period. This movement primarily
pertains to FY24 reported net profit of $45.1 million, partially offset by dividend distribution to shareholders of $64.3 million.
Return on Capital
Elders’ underlying return on capital finished the year at 11.3%, a decrease of 4.7% compared to last year, influenced by the material impact
on Q1 EBIT from lower livestock prices and associated reduction in client sentiment, as well as ongoing investment spend on our strategic
initiatives increasing average capital.
Operating and Financial Review
15
Cash Flow
$million
FY24
FY23
Change
Change %
Operating cash flows
82.9
169.2
(86.3)
(51%)
Investing cash flows
(150.9)
(132.1)
(18.8)
(14%)
Financing cash flows
86.7
(33.5)
120.2
359%
Net cash flow
18.7
3.6
15.1
n/m
Cash conversion (%)
129%
163%
(34%)
n/m
Operating cash flow
Operating cash flow was a net inflow of $82.9 million, represented by underlying EBITDA adjusted for non-cash items of $200.0 million, partially
offset by movements in assets and liabilities of $117.1 million:
• trade and other receivables increased $157.1 million or 21%
• inventory (including livestock) declined $93.8 million or 17% on last year
• trade and other payables increased $20.8 million or 3%
• remaining $74.6 million, which includes movements in provisions and balances acquired via business acquisitions
Despite an unfavourable movement in assets and liabilities and a decline in EBIT year on year, an operating cash inflow of $82.9 million was
achieved resulting in a cash conversion of 129%.
While net working capital increased against prior period, significant progress was made in improving inventory management with a reduction of
$93.8 million against prior period. Trade receivables were elevated at balance date compared to prior period due to a late start to winter crop in
WA and SA, greater client demand for deferred terms and some increase in overdue debtors. Elders is confident in the quality of the debtor book
with most material exposures maintaining significant net asset cover.
A significant reduction in debtors is forecast in FY25 Q1.
Investing cash flow
Investing cash flow was a net outflow of $150.9 million at balance date, driven by acquisition spend on thirteen businesses and the strategic
investment in our transformational initiatives, such as Systems Modernisation and Elders Wool.
Financing cash flow
Financing cash flow was an outflow of $86.7 million, primarily representing full year FY23 and half year FY24 dividends paid to shareholders of
$52.5 million and $51.3 million payment for lease liabilities, largely offset by $195.8 million proceeds from borrowings.
Elders Limited Annual Financial Report
16
Material
Business
Risks
Elders faces a variety of financial and non-financial risks that might impact its operations
and outcomes.
While some of these risks are unique to Elders, others are general risks associated with any stock market investment. Elders has an established
risk appetite set by the Board and has implemented a Resilience and Risk Management Framework and strategy with internal checks and
balances to address these risks. Nonetheless, the nature and severity of these risks can evolve, and Elders' approach to managing them
is adaptive.
The following overview lists key risks faced in pursuit of Elders' objectives. This list is not exhaustive and does not rank the risks by materiality.
Elders continue to identify, analyse, evaluate, manage and monitor risks, aiming to capitalise on opportunities and minimise potential losses.
More detail on Elders’ approach to managing risk is contained in the Corporate Governance Statement on Elders’ website at elders.com.au/
for-investors/performance/periodic-reports/.
In line with ASX Corporate Governance Council recommendation 7.4, Elders has identified those risks of a specific environmental or social risk type:
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
Our risk management approach
Health and safety
Safety risk is inherent in Elders' business activities. Key safety risks include
livestock handling, remote driving, manual handling and chemical handling.
Beyond these physical risks, we recognise the impact of psychosocial risks
in the workplace. These include challenges like excessive workloads, limited
job control, unsupported organisational environments, and issues such as
bullying, discrimination and harassment.
At Elders, the safety of our people and a strong safety culture are non-
negotiable priorities. Our Health, Safety and Environment team shapes the
processes, behaviours and reporting that underpin our safety standards. Our
One Elders Awards program, held monthly, recognises and reinforces safe
practices across the business, while our annual Safety Week focuses on core
safety principles.
In 2024 we prioritised enterprise-wide safety risk assessments to evaluate our
control environment and construct the most effective mitigation strategies.
Critical Risk Teams further bolster effectiveness by collaboratively working to
enhance safety controls. Additionally, safety is a standing agenda item in
every team meeting.
Animal welfare
The welfare of livestock is of paramount importance to Elders. A failure
to adequately protect and ensure the wellbeing of animals within our
control may lead to significant consequences, including stakeholder scrutiny,
operational disruptions and potential reputational damage.
Elders has a "zero tolerance" policy for poor treatment of livestock. We
ensure our people are trained and adhere to safe livestock handling
procedures, aiming to surpass government requirements. Beyond compliance
we're committed to proactive engagement with the broader industry and
stakeholders, pushing for enhanced animal welfare practices where possible.
Operating and Financial Review
17
Material Business Risk
Our risk management approach
Climate variability and severe weather events
Climate variability and severe weather events risk is the short to medium term
risk of adverse weather patterns and natural events directly impacting Elders'
agricultural operations. The risk pertains to sudden or cyclical events such
as drought, floods, frost and fires, which can unpredictably affect the volume
of agricultural production, disrupt supply chains and create volatility in the
availability of rural products. These events can cause fluctuations in revenue,
supply demand imbalances and operational disruptions due to the immediate
impact of weather related natural disasters.
Elders manages its exposure to cyclical weather conditions and events via
its geographical spread of operations and the diversification of its product,
channel and service range.
In its operational planning, Elders integrates forecasting and supply
management, taking into account usual weather patterns. These strategies
are designed to bolster the flexibility of our supply chain, enabling us to
swiftly adapt to weather-induced challenges.
Climate change
Climate change risk refers to the long term systemic risk posed by both
physical and transitional factors arising from climate change. Physical risks
include the gradual increase in temperature, changing precipitation patterns
and the frequency of extreme weather events. Transitional risks involve
regulatory changes aimed at curbing greenhouse gas emissions, market shifts
toward sustainability and evolving consumer preferences.
For Elders, this risk encompasses potential disruptions to agricultural
productivity, supply chain vulnerabilities, increased operational costs due
to compliance with environmental regulations and reputational damage if
perceived as lagging in environmental stewardship. It also includes potential
financial performance impacts due to these direct and indirect effects of
climate change.
In FY24, Elders made significant progress in managing climate-related risks by
implementing emissions reduction targets that guide our business activities
and employing scenario analysis to assess our exposure to climate risks and
opportunities. We continue to evolve our diverse product and service offerings
across Australia to help mitigate risks and support our clients as they adapt to
climate impacts.
Additionally, we incorporate climate considerations into our due diligence
processes for potential business acquisitions, ensuring alignment with our
sustainability principles, climate trends and emissions profile.
More details on our energy and emissions management can be found in
our FY24 Sustainability Report, which follows the recommendations of the
Taskforce on Climate-related Financial Disclosures.
Environmental
This is the risk of operational, financial and reputational damage from Elders'
interactions with the natural environment, particularly through our supply of
chemicals and fertilisers to the agriculture industry. It includes risks related to
biodiversity loss and environmental contamination affecting soil health which
impact agricultural productivity and sustainability.
Additionally, this is the risk of stringent environmental regulations, potential
legal liabilities and reduced competitiveness if our products are perceived as
environmentally harmful.
Elders recognise the importance of managing environmental risks relating
to our agricultural operations, particularly in the supply of chemicals and
fertilisers. We invest in minimising the impacts on soil health and biodiversity
through sustainable practice under our Thomas Elder Sustainable Agriculture
and Sustainability Framework.
Additionally, we maintain compliance with evolving environmental regulations
to mitigate legal liabilities and uphold our reputation for sustainability. Our
focus on sustainable agriculture practices and community engagement helps
ensure we contribute positively to long term agricultural productivity and
environmental preservation, while also maintaining our competitiveness in
the market.
Biosecurity
Australia's expansive agricultural landscape means companies like Elders are
vulnerable to biosecurity threats impacting crops and livestock. An outbreak
can trigger quarantine measures across rural areas, potentially halting trading
and transport operations.
Such outbreaks can also initiate or exacerbate international trade restrictions,
directly influencing market access and profitability. Furthermore, producers
might curtail their demand for goods and services due to these biosecurity
challenges, or even find their operational capacities severely hampered.
Elders is committed to being a proactive part of the solution to biosecurity
challenges. We have instated disease management protocols and maintain
a business continuity framework to ensure resilience against unforeseen
disruptions. We scan for and recognise threats, especially from Foot-and-
Mouth Disease and Lumpy Skin Disease occurring in regions near Australia.
Beyond our internal measures, we actively engage with regulators who
monitor these biosecurity threats, ensuring that we not only stay informed
but also adhere to their recommendations and directives.
Food
Elders' Feed and Processing operations handle livestock destined for human
consumption, presenting a possible risk of food product contamination.
Elders enforces strict animal health controls in its feedlot, supported by a
dedicated business continuity framework.
Elders Limited Annual Financial Report
18
Material Business Risk
Our risk management approach
Global and domestic economic conditions
This risk pertains to the impact of global and domestic economic trends
on Elders' products and services. It includes factors like population growth,
living standards and broader economic cycles such as recessions or booms.
A significant global economic downturn or domestic recession could alter
consumer demand patterns, leading to changes in the volume and type
of products and services Elders sells. This risk focuses primarily on
macroeconomic factors, including shifts in GDP, inflation rates and consumer
spending behaviours, which could directly influence Elders' profitability and
market position.
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.
Pandemic
Pandemic events can jeopardise health and wellbeing and lead to
considerable economic, operational and societal upheavals, with 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.
To effectively triage and respond to such events, Elders activates its Business
Continuity and Incident Response teams to ensure a coordinated approach.
During the COVID-19 pandemic, Elders established a dedicated COVID-19
Committee, bringing together executive level business unit leaders and
functional experts. Chaired by the Company Secretary and General Counsel,
this Committee placed a critical role in navigating the challenges of the
pandemic, ensuring the safety of our people, customers and the broader
community while maintaining business continuity.
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.
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.
Supply chain
Elders operates in complex supply chains, reliant on multiple third-party
suppliers, including those located in China. The availability and cost of
inputs can be affected by disruptions, evolving environmental standards, and
policy shifts. Such interruptions can increase our expenses and impede order
fulfilment. Additionally, extreme weather events, due to changing climatic
conditions, pose risks to our infrastructure and supply chain, which could
impact financial results. Furthermore, our dependence on diverse suppliers
exposes potential risks of modern slavery and labour exploitation, especially
in those regions with lower standards of labour oversight.
In 2024, Elders remains aware of supply chain risks, magnified by the residual
impacts of the pandemic, geopolitical events, economic fluctuations and
climatic events. To fortify against these challenges and ensure alignment
with strategic goals, Elders actively manages its Rural Products supply chain
vulnerabilities. Furthermore, Elders has embarked on a comprehensive multi-
year initiative to enhance resilience and excellence throughout its supply
chain ecosystem. Our actions addressing the risk of modern slavery in
operations and supply chains are explained in our annual Modern Slavery
Statement. We outline the minimum ethical expectations we have of our
suppliers in our Responsible Sourcing Code.
Counterparty
Elders engage with numerous counterparties. We extend credit to approved
parties and may experience losses from a customer's inability to settle debts.
Additionally, we are exposed to supply counterparty risk where there is
potential for suppliers or partners to default or not meet their service, supply
or contractual obligations.
Elders manage counterparty risks through credit assessments, underpinned
by credit policies and procedures. Oversight is provided by the Credit
Committee, complemented by monitoring, reporting of debtors and trade
credit insurance. The CEO, CFO, and when relevant, the Board review notable
credit issues. To address supply counterparty risks, Elders incorporates
standard contract clauses, conducts due diligence, adheres to procurement
procedures and emphasises the establishment of long-term relationships with
trusted suppliers.
Geopolitical
This risk is the influence of political events, regulatory changes and
international relations on Elders' operations. Elders, as an importer from
foreign and domestic markets, is vulnerable to shifts in government policies,
trade tensions and international conflicts. This risk also includes the effects
of foreign government subsidies that may undermine the competitive position
of Australian agricultural products. It encompasses broader concerns such as
trade barriers, sanctions and political instability, which could disrupt supply
chains, increase costs or limit market access.
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.
Operating and Financial Review
19
Material Business Risk
Our risk management approach
Key personnel and human resource
The loss of critical employees, or difficulties in recruiting, retaining or
motivating skilled talent, can affect Elders. As a company with a national
footprint across various regions, Elders faces increased talent complexities
compared to businesses operating in a single location. Staff changes,
particularly in pivotal and senior roles, has the potential to create disruptions,
impacting Elders' financial standing and its forward looking strategy.
Essential personnel and positions with Elders have been identified, with
corresponding succession and retention plans formulated.
Compensation and incentive guidelines have been established to assist
Elders in effectively attracting and retaining skilled talent.
Strategic outcomes
This is the risk of strategic outcomes failing to meet market expectations
due to the inadequacy of planning and preparation in achieving the Eight
Point Plan objectives. For Elders, the risk implies that growth initiatives
might fall short of their targets because of flawed assumptions or faulty
implementation. Such a shortfall can result in strategic misalignment with
market demands and investor expectations, leading to reduced stakeholder
confidence and potential financial under performance.
Our strategic risk mitigation focuses on leveraging geographic and product
diversification, we remain responsive to market shifts, mitigating the risk of
flawed assumptions about growth opportunities.
Additionally, we refine our operational efficiency and investment strategies
to support long term growth. This includes ongoing review of our financial
health and transformation initiatives, helping to ensure our growth aligns with
shareholder expectations.
Elders commits to ongoing assessment of our Eight Point Plan objectives,
ensuring that we identify any gaps early and recalibrate strategies to
minimise misalignment with investor expectations and reduce financial
underperformance risks.
Compliance and regulation
Elders' adherence to local laws and regulations is paramount to maintaining
our licence to operate. Non-compliance could expose us to investigations,
penalties, liabilities, reputational damage and other adverse consequences.
Elders has established policies and procedures to facilitate legislative and
regulatory compliance. Central to these is our Code of Conduct, which
delineates the expected behaviours of our people. In addition to our internal
legal team we have dedicated compliance resources that support compliance
education and offer insights into legislative and regulatory compliance
matters. To further enhance our commitment to ethical operations, we operate
a whistleblower program, allowing employees to report any conduct that may
be unethical, illegal or fraudulent.
Fraud and corruption
This risk refers to the potential for intentional deceit or unethical behaviour
including fraud, bribery or misuse of power for personal or financial gain. This
risk can result in financial loss, legal liabilities or reputational damage.
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, Whistleblower Policy and
reporting hotline, leave management protocols and an internal audit
program which is complemented by periodic reviews conducted by the
external auditor.
Cyber
Cyber risk encompasses both malicious and non-malicious events that could
disrupt Elders' operations or compromise data security. It includes external
threats such as cyber attacks, as well as systems outages or failures caused
by technical faults, human error or malicious activity. These incidents can
result in service unavailability, unauthorised access to sensitive information
or operational disruptions.
We have proactively managed the risk with dedicated cyber risk resources,
continued investment and alignment with best practice frameworks such
as the Australian Signals Directorate Essential 8 and National Institute of
Standards and Technology Cybersecurity Framework 2.0.
Technology and systems capability
This risk refers to the potential for Elders' internal technology infrastructure
and third-party systems to fail in keeping pace with operational demands and
industry advancements. This risk includes the possibility of Elders' systems
becoming outdated, inefficient or incompatible with new technological
standards, which could lead to reduced productivity, operational bottlenecks
and missed strategic opportunities. It also encompasses the challenges in
adopting and integrating new technologies essential for innovation, process
optimisation and maintaining a competitive edge.
Elders is committed to ensuring our IT infrastructure remains current and
safe. To directly address the risk of technological inadequacy, Elders is
running a Systems Modernisation Program. This initiative aims to elevate
customer experience, enhance people engagement and streamline processes
and administration for better adaptability to change.
Review
of Operations
2024
Derby Tech Day – Bendigo VIC, 2023
OPERATING
HIGHLIGHTS
$2.2b
Retail
Products
Sales
Down 7% on FY23 results
$0.4b
Wholesale
Products
Sales
Down 6% on FY23 results
$2.3b
Residential
Sales
Turnover
Up 36% on FY23 results
$2.2b
Broadacre
Sales
Turnover
Up 11% on FY23 results
1.7m
Head of
Cattle Sold
Up 26% on FY23 results
11.3m
Head of
Sheep Sold
Up 15% on FY23 results
$1.4b
Gross
Written
Premiums
Up 9% on FY23 results
56k
Killara
Head of
Cattle Sold
Down 3% on FY23 results
Review of Operations
21
Elders Limited Annual Financial Report
22
Rural Products margin ($million)
219.5
219.5
284.7
284.7
383.1
383.1
378.6
378.6
360.2
360.2
FY20
FY21
FY22
FY23
FY24
Margin by product
53%
Crop
Protection
14%
Other Farm
Supplies
21%
Wholesale
Products
12%
Fertiliser
Margin split by geography
15%
24%
29%
3%
13%
16%
QLD & NT
NSW
VIC & RIV
TAS
SA
WA
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. These rural products are supplied to primary producers and corporate farm customers through our 260 Elders
owned retail stores. Additionally, we also provide professional production and cropping advice with 246 agronomists nationwide, including
additional specialists operating through Elders Technical Services.
Elders also operates a Wholesale Products business which supplies products to independently owned member stores, utilising the AIRR
branding. AIRR also provides retail services through corporate owned stores and the Ag, Horse & Pet brand to independently owned
member stores.
Central to our product value-add is our backward integration strategy which is facilitated through various brands and channels, allowing for
margin enhancement and transparency.
Performance
Retail Products margin declined $22.4 million or 7% compared to the prior year, with sales impacted by lower crop protection and fertiliser
prices, as well as subdued client sentiment during the first quarter of FY24. Overall, we achieved volume growth across most categories
(fertiliser and crop protection volumes growth, generating sales uplift of $199.3 million), however this was offset by a negative sales impact from
commodity price declines (sales reduction of $388.8 million), particularly in herbicide crop protection products and fertiliser.
Wholesale Products margin increased $4.0 million or 6% year on year, as animal health products benefitted from the recovery in livestock
prices following the first quarter lows. This was partially offset by the under-performance of AIRR's Apparent product, in line with softening
commodity prices.
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
• Successful integration of Eureka!
• 10 new Titan AG product registrations in FY24
• Investment in toll formulation operations
• Employed demand planning and procurement specialists
• Continue to grow the Eureka! business and expand on Titan AG
utilisation and wallet growth
• Continued focus on Titan AG share of wallet growth
within branches
• Plan to be operational by March FY25 with our new toll
formulation plant in WA
• Expand the innovation function and identify
strategic opportunities
Margin management
and efficiency
improvements
• Maintained GM% despite competitive pressure
• Established a national supply chain function to deliver
efficiencies and support risk management
• Develop an enhanced pricing platform as part of the systems
modernisation project
Customer focus
and expanded
store footprint
• Continued expansion of our retail footprint through
acquisitions and greenfield development
• Customers supported by 246 agronomists
• Continue to fill geographic gaps with strategic acquisitions
and greenfield developments, combined with organic growth
from capturing additional market share
Growth of
Wholesale Products
• Warehouse footprint expansion to grow market share
• Delivered procurement synergies through the Elders network
• Launched a range of insurance and short term
funding products
• Continue to increase the warehouse footprint in Brisbane
and Rockhampton, and streamline with robotics within
Queensland warehouse
• Deepen customer relationships through AIRR EComm and Feed
Club loyalty program
Review of Operations
23
Agency Services margin ($ million) 1
127.1
127.1
139.9
139.9
147.0
147.0
113.7
113.7
123.1
123.1
FY20
FY21
FY22
FY23
FY24
1 Includes equity earnings from investments.
Margin by product
48%
Cattle
34%
Sheep
19%
Wool
0%
Grain
Margin split by geography
12%
16%
38%
3%
19%
12%
QLD & NT
NSW
VIC & RIV
TAS
SA
WA
Agency Services
Elders provides a range of marketing options for livestock, wool and grain. Elders' livestock network comprises employees and agents
operating across Australia conducting on-farm sales to third parties, regular physical and online public livestock auctions and direct sales to
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.
In 2023, Elders commenced its wool handling operations, a $25 million investment in the Australian wool industry with operations in Perth
and Melbourne. Full transition to the new wool handling operation was completed in late FY24 which will deliver greater efficiency and
long-term cost savings within the wool supply chain.
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 increased $9.4 million or 8% on last year, driven by the move to Elders' new wool handling operations out of Perth
and Melbourne.
Livestock was a tale of recovery during FY24 with gross margin increasing $3.0 million or 3% due to an improvement in prices from the lows of
Q1 with cattle and sheep prices up 22% and 56% respectively over the period. Price recovery and strong volumes (cattle up 26% and sheep up
15% ) saw earn improve across both cattle and sheep with FY24 ending up marginally ahead of the prior year.
There was an improvement in wool margin ($7.0 million or 43%) in FY24 driven by the move to Elders wool handling operations. The transition
to the new operations occurred throughout FY24, starting with Western Australia in October 23, then South Australia and Victoria early 2024
and finally New South Wales and Queensland in June 2024. Given the staggered transition throughout the year ~50% of total bales sold went
through Elders Wool, with overall bales sold 5% fewer than in FY23. However, this was offset by a higher earn per bale up 51% as the fully
automated operations in Melbourne provide significant logistics outcomes and lower labour units and floor space required when compared to a
traditional wool store. Largely driven by additional pre-sale and post-sale revenue as a result of the transition away from third party providers.
Grain margin was lower than in FY23 driven by fewer tonnes traded with the FY24 harvest back on 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
• Acquisition of Charles Stewart Group, consisting of 5 locations
in Victoria
• Complete national transition to Elders' wool
handling operations
• Elders wool handling to reach 100% capacity in FY25
• Continue to strengthen, expand and improve our livestock
finance and livestock production advice offerings
• Identify and capture strategic opportunities in key geographic
locations via acquisitions
People
• Continued roll out of national livestock handling training
• Continued growth and uptake of our Livestock trainee program
• Increased investment in training young staff through Elders
Livestock Academy
• Increase wool handling capability and knowledge through
recruitment and training
• Continued recruitment of high performing staff in key
geographical areas
Elders Limited Annual Financial Report
24
Real Estate Services margin ($ million)
37.6
37.6
50.1
50.1
61.6
61.6
59.5
59.5
82.6
82.6
FY20
FY21
FY22
FY23
FY24
Margin by product
28%
Broadacre
31%
Residential
41%
Property
Management
Margin split by geography
18%
17%
14%
10%
14%
27%
QLD & NT
NSW
VIC & RIV
TAS
SA
WA
Real Estate Services
Elders’ Real Estate Services includes 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 sales and property management services in major population
centres and regional areas through company owned and franchise offices. Other services include water broking, commercial real estate
and valuation.
Performance
Real Estate Services margin increased by $23.1 million or 39% year on year. The main driver of this growth came from acquisitions of new and
bolt on businesses. Turnover for broadacre and residential properties increased 11% and 36% respectively, with Emms Mooney, Rockingham
and Knight Frank Tasmania acquisitions adding significant growth. Property management gross margin increased $11.5 million or 52% year on
year, benefitting from acquisitions, rental inflation and ongoing rent roll growth.
Strategy
To increase market share and deliver profitable growth of the Real Estate Services portfolio, through increased productivity, recruitment and
acquisition across rural, residential and property management.
Strategy
Achievement
Plan
Operating model
• Key acquisition of Knight Frank Tasmania, expanding our
geographical footprint by including 5 locations
• Strong FY24 performance with the realisation of a full
year period of acquisitions, contributing to the growth of
Residential, Broadacre and Property Management
• Maintained commission rate in an increasingly competitive
market through a range of marketing and agent
support initiatives
• Increased rent roll assets via organic and acquisitive growth
• Continue to grow company owned broadacre agency,
residential agency and property management market share in
major regional centres and capital cities through acquisition,
franchise and agent recruitment
• Grow our product expertise to include valuation and asset
management services
• Continue to expand market share in large scale corporate
transactions through participation in global agri-investing
forums and working closely with Elders' Customer
Solutions Team
People
• Targeted recruitment of high performing real estate sales
representatives, water brokers and appointment of key
management personnel
• Continued implementation of numerous business
improvement initiatives, primarily focused on brand
enhancement, digital strategy, system modernisation and
people development
• Enhance productivity and efficiency initiatives in our property
management business
• Delivery of national appraisal campaigns to drive awareness of
the real estate business
Review of Operations
25
Financial Services margin ($ million)1
37.8
37.8
42.1
42.1
44.2
44.2
53.5
53.5
54.5
54.5
FY20
FY21
FY22
FY23
FY24
1 Includes equity earnings from investments.
Margin by product
34%
Agri Finance
51%
Insurance
13%
LIT Delivery
Warranty
Margin split by geography
18%
15%
31%
1%
18%
17%
QLD & NT
NSW
VIC & RIV
TAS
SA
WA
Financial Services
Elders Finance provides and distributes a wide range of finance, insurance and warranty products and services through its Australian network
and Wholesale Products channel.
Elders' partnership with Rural Bank for our banking portfolio was ceased in early FY24, allowing the expansion and promotion of the Elders
Finance brokerage model which is now providing a variety of financing options, across personal and business lending, to our customers.
In addition, Elders provides various Livestock and Wool Funding products and a Livestock in Transit (LIT) Delivery Warranty service, which
all complement our Agency business. Collectively, these relationships and business units enable us to offer a broad spectrum of products
designed to help our customers grow their businesses and manage cash flow and risk.
We work together with a number of partners to deliver some of these offerings, including offering third party livestock funding products and
general insurance products from Elders Insurance (a QBE subsidiary).
Performance
Financial Services margin increased $1.0 million or 2% in comparison to prior year, with growth achieved in the Elders Finance brokerage model,
including strengthening our contractor broker cohort, and investment in dedicated regionally based Agricultural lending brokers. This produced
an increase of $0.7 million with the other key upside in our LIT Delivery warranty ($0.5 million). Livestock funding placements with third parties
declined year on year in line with the promotion of Elders' own Balance Sheet lending products.
Strategy
To deliver incremental profitable growth across the Financial Services portfolio through expansion of the Elders Finance brokerage model across
all loan types, utilising a disciplined and controlled approach to identify and onboard brokers, incremental growth of existing products, and
enhanced training driving a referral culture in our financial services business.
Strategy
Achievement
Plan
Loan
brokerage launched
• Increase in quality and quantity of contractor brokers
• Establishment of centralised in-house brokers servicing all
loan types
• Establishment of regionally located employed Agri Finance
brokerage model
• Embed and grow RLS Agribusiness (acquired 1 Nov)
• Continued focus on contractor broker earnings growth
• Continue roll-out of employed Agri Finance broker model,
ensuring discipline regarding quality of hires
• Install employed Agri Finance brokers into Wholesale Products
business (AIRR)
• Fill geographical gaps through acquisition
Incremental growth of
existing products
• Increased Livestock Funding, subject to normal capital
allocation processes
• Slight recovery in LIT delivery warranty to historical levels, with
improved penetration and claim rates
• Significant growth in Rural Products Prepayment product
• Finalise and launch white label deposit product to complete
Rural Bank product replacement
• Continue to drive incremental growth across all products and
capitalise on recovery in Livestock segment
Referral culture and
staff training
• Significant training at branch level to promote ownership and
understanding of product, and capitalise on investment in
brokerage business and Elders Finance brand
• Expansion of referral activity from Elders Network and
Wholesale Products across home, asset and equipment and
Agri Loans
• In-branch champions to build sales and referral capabilities
• Continue Financial Services Academy training
Elders Limited Annual Financial Report
26
Feed and Processing Services margin
($ million)
15.5
15.5
12.6
12.6
16.8
16.8
13.7
13.7
17.2
17.2
FY20
FY21
FY22
FY23
FY24
Feed and Processing Services
Elders owns and operates Killara Feedlot, a diversified business incorporating grain and grass fed cattle production operations, manure
processing and irrigated feed production in Quirindi, New South Wales.
Performance
Feed and Processing Services margin increased $3.5 million, or 26% on the prior period, with improved performance across Killara Feedlot. The
key drivers of the result were the performance of the grass-fed cattle program as well as an increase in occupancy and tonnes fed in the feedlot.
The positive result was supported by continued upside in the manure processing, as well as farming and grass finishing operations.
Strategy
To deliver continuous improvement in EBIT and ROC across the operations of the Killara Feedlot, whilst maintaining the highest standards of
animal welfare.
Strategy
Achievement
Plan
Grow Killara Feedlot
• Expansion of feedlot capacity by 10%
• Implementation of new feed mill and steam flake
processing facility
• Installation of solar farm to provide Killara with access to
sustainable, cost-effective electricity
• New feed mill and steam flake processing facility in full
operation in early FY25
• Pursue opportunities to expand farming and grass
finishing operations
• Continuous improvement in cattle performance and gross
margin given recent capital investment
Review of Operations
27
Outlook
The FY25 outlook is
promising with favourable
moisture profiles in many
dry land areas and
average seasonal conditions
across most of our key
regions. Livestock agency is
forecast to drive improved
performance in the first
quarter given significantly
higher livestock prices
compared to prior period.
We anticipate continued
benefit from our product,
channel and geographical
diversification, growth via
acquisitions and additional
market share.
We will continue to invest
in our strategic initiatives,
in line with our Eight Point
Plan strategy, particularly in
our Systems Modernisation
project with benefits
commencing in FY25.
Rural Products
• favourable winter crop outlook with
NSW, QLD and WA offsetting challenging
conditions in SA and western VIC
• promising summer crop outlook with
encouraging moisture profiles in many
dry land areas and sufficient water
allocations in irrigated areas
• gross margin expected to gradually
improve on FY24 as fertiliser and crop
protection prices remain stable
• continued progress on our backward
integration strategy following the
acquisition of Eureka! and investment in
a new greenfield sites
• strategic expansion of our branch
network, as well as our own
brand product segment through
strategic opportunities
Agency Services
• livestock price recovery a tailwind,
supporting improved performance against
the prior period
• cattle and sheep volumes may be
impacted by drier conditions in SA and
VIC, with the national cattle herd forecast
to ease to 28.7m in FY25 (29.7m 2024)
and national flock to decline marginally
from 70.5m in FY24 to 68.5m in FY25.
• increased sheep slaughter rates are
anticipated to continue, bolstered
by a favourable export market with
Australia contributing 50% of the global
export total
• wool prices are expected to remain
steady reflecting subdued global spend
on discretionary items
Real Estate Services
• demand for broadacre properties is
anticipated to benefit from improving
livestock prices
• full year benefit from acquisitions in FY24,
predominately Knight Frank Tasmania
• continued expansion of our property
management offering
Financial Services
• Elders Finance to gain traction with
an additional 21 brokers onboarded
during FY24
• continued uptake of livestock funding
product to support margin growth
Feed and Processing Services
• favourable outlook assuming continued
stability or improvement in cattle prices
• benefits from new feed mill and solar
array expected to be realised in FY25
• softening feed prices are anticipated to
offset increase in feeder cattle prices
• FY25 gross margin improvement further
supported by below CPI costs increases
Costs and Capital
• focus on holding cost increases below
CPI, excluding the impact of acquisitions
and new business
• maintain financial discipline for cost and
capital efficiency
• ongoing investment on our
transformational initiatives and
acquisitive growth
Eight Point Plan
• Elders commenced its fourth Eight Point
Plan in FY24; our three-year strategy
taking us through to FY26
• we continue to strive for compelling
shareholder returns, industry leading
sustainability outcomes, being the most
trusted agribusiness brand in rural and
regional Australia
• our strategic priorities are categorised
in three key areas: Run, Transform, and
Innovate & Grow, focusing on optimising
the existing business, future-proofing our
business, and expanding and innovating
our portfolio
Elders Limited Annual Financial Report
28
Investment in innovation paves the way for
livestock clients
The Prendergast family runs
a mixed farming operation in
Clarkes Hill, Victoria, a blink-
and-you’ll-miss-it town just
northeast of Ballarat. The
family first began farming at
their property, Brackenhurst,
in 1906, and 118 years later,
the fourth generation is
taking the reins.
The Prendergasts’ now doubled-in-size
mixed enterprise is built on commercial
potato production, and the family also
grows canola, barley, wheat and peas, and
runs sheep and cattle.
Third generation Pat Prendergast recalls how
agriculture is part of his family’s DNA.
“After coming out from Ireland during the
Potato Famine, our family first settled in
Newlands, Victoria, and farmed there for
about 50 years, before shifting across to
where we have been farming ever since,”
said Pat.
“I took on the farm from my father about 40
years ago, in 1985.
“I like to think that our family have
been leaders in farming in our region. My
grandfather was a founding member of the
Victorian Producers Cooperative (VPC) and
when they folded in the 1990s, Elders took
them on.
“Elders has been looking after us
ever since.”
The family works alongside Elders to buy
and sell livestock, and for their rural
products, from fencing, to animal health and
crop protection.
Now in his 80s, Pat still has a vested interest
and role in the operation, but it is his
eldest son Dominic who largely manages
the day-to-day farming activities. Dominic
works on the farm alongside his own son
Ben, who also runs a successful local bulk
haulage business.
Pat’s younger son, Julian, is even more
connected to Elders, having worked for the
business since 2013. Commencing as a
senior sales support officer in the Ballarat
branch, Julian has since worked his way into
leadership, becoming a branch and then
area manager, and most recently taking on
a role leading the modernisation of Elders’
livestock systems.
“In my role, I am the conduit between a
technology team, a project team and our
Elders branches and staff on the ground.
My core motivation is to ensure that any
solution we implement works well and
positively impacts producers,” said Julian.
Julian said he is excited to be delivering a
project which will have sweeping benefits
for clients like his own family.
“We are building a brand-new livestock
system, which is going to deliver significant
benefits for both our company and our
clients, particularly in how it will deliver
efficiencies in processing and also greater
traceability,” he said.
“With this new system, we will be able to
get a lot more data out of livestock sales.
We want to be able to predict trends, see
when people are buying or selling, and even
things like their habits in buying bulls and
rams for breeding programs.
“There is so much potential for better
analysis of the data that we gather. With
this new system we will be able to report on
livestock weight gains, yields and that sort
of thing.
“It will give us a lot more insight into how
farms are performing, and our clients will
see a lot of efficiencies in processing.
“It’s a big innovation for Elders and of
course I am excited that the benefits will
flow through to our clients.”
Julian’s role is part of the wider Elders
Systems Modernisation (SysMod) project,
which is seeking to revolutionise business
systems and processes, to better support
staff, clients and customers.
Pat explained that it is satisfying to see
Elders continually innovate to better service
farmers, and it is clear he is proud of his
son and the leading role he is taking in the
project’s implementation.
“It gives me a lot of joy and I am excited to
be able to see some of these new insights
come to life,” said Pat.
“I think some of that really in-depth
reporting about our sold stock, what we got
for them and how much they cost us in
the first place will help us to make on-farm
decisions going forward. I’m looking forward
to our family being able to tap into that.”
While Julian’s family is excited to see the
system come to life, his brother Dominic
jested that the biggest benefit of Julian’s
connection to Elders is being able to ring
him to ask that a new packet of drench be
brought home.
“He just leaves it in the mailbox now; saves
me a trip into town,” he joked.
Sustainability
Report
2024
Sorghum Production – Tamworth NSW, 2024
1 Reported emissions are based on the period 1 July 2023 to 30 June 2024.
2 Subject to commercially viable technology being available to address feedlot cattle emissions.
SUSTAINABILITY
PERFORMANCE
TARGET
2024
2025
100% renewable electricity
in all Australian sites by 2025
Target achieved through on-site solar
generation and procurement and retirement
of Large-scale Generation Certificates (LGCs)
Increase of 13 sites with solar installations;
76 sites now equipped with solar panels
2030
50% reduction in Scope 1 and 2 emissions
intensity (tCO2e/$m revenue) by 2030,
against a baseline year of 20212
2050
Net zero Scope 1 and 2 emissions by 2050
23% reduction in Scope 1 and 2 emissions
intensity against baseline year of 2021
18.3 tCO2e/$m revenue in 2024
Up from 17.93 tCO2e in 2023
57,210 tCO2e this year
(Scope 1 and 2)
Down from 59,551 tCO2e in 2023
CLIMATE TARGETS TO REDUCE GREENHOUSE GAS EMISSIONS1
33%
Board positions held by women
21%
Women in senior positions
DIVERSITY AND INCLUSION
HEALTH AND SAFETY
2
Lost Time Injuries (down from three in FY23)
Over $2.5m invested in safety
capital expenditure
9
TRIFR
Down from 10.1 in FY23
$3.39m
Donations and sponsorships
14
Grants awarded through
Community Giving Project
COMMUNITY IMPACT AND INVESTMENT
WASTE MANAGEMENT
51,000
Agricultural chemical containers collected
for reuse or recycling
3.1t
Bags collected for recycling
through Big Bag Recovery
Elders Limited Annual Financial Report
32
Elders’ Sustainability
Framework
Our Sustainability Framework is designed to address the priorities of our customers, clients,
and the industries and communities in which we operate. It guides us in navigating both
challenges and opportunities, ensuring that we remain focused on the areas that matter most
to drive meaningful impact.
The Elders Sustainability Framework features eight priority topics which were identified through a materiality assessment conducted in FY23.
During FY24, we reviewed Elders' sustainability topics to ensure that we continue to address and report on issues that are most important to
our business and our stakeholders. It was determined that the topics featured within our Sustainability Framework remain material and require
ongoing focus. For more information, please see our FY24 Sustainability Report.1
1
Available on our website, at Elders' Periodic Reports.
Sustainability
33
Climate Change
Australia's changing climate
presents systemic challenges
to our clients and the
agriculture sector as a whole.
Increasing temperatures, prolonged
droughts, and more intense weather events
are profoundly affecting farmers, their
supporting businesses, the communities we
are part of, and the broader Australian
economy. The challenge of reducing
emissions while improving farm productivity
and building on-farm climate resilience
presents both difficulties and opportunities.
As a key partner in Australian agriculture, we
are committed to strengthening the sector’s
resilience and supporting the adoption
of innovative technologies for emissions
reduction and climate adaptation. We also
acknowledge our responsibility to address
climate change by actively managing and
minimising the greenhouse gas emissions
from our own operations.
Climate
Change Governance
Elders considers climate change to be
a material business risk with potential
impacts on our economic, environmental,
and social sustainability. Both the
operational and strategic risks posed by
climate change are captured under our
current governance, risk management and
resilience frameworks. Our Climate Change
Policy2, which was updated during FY24 to
ensure its currency and relevance, sets out:
• our commitment to supporting the
global effort to reduce greenhouse
gas emissions in alignment with the
recommendations of the Paris Agreement
established by the UNFCCC (United
Nations Framework Convention on
Climate Change)
• the role of our Board and executive in
managing climate change strategy, risks
and opportunities.
Australian Sustainability
Reporting Standards
In FY24, we transitioned our focus
towards the requirements of the newly
released Australian Sustainability Reporting
Standards (ASRS), which will apply to
Elders from FY26. Given our alignment
with the Taskforce on Climate-related
Financial Disclosure recommendations,
we believe that we are well placed
to align with the incoming mandatory
climate-related disclosure requirements.
We have also completed a thorough
readiness assessment, pinpointing the
necessary steps to ensure compliance with
the standards, and created an internal
implementation plan to direct efforts.
Our Board and Executive Management have
both been briefed on requirements under
the ASRS. In FY24, our Integrated Reporting
Working Group, originally established in
FY23 and comprising of members of our
executive and representatives from our
sustainability, finance, governance and risk
teams, continued to work in collaboration
to enable Elders to become compliant with
the ASRS.
Strategy and
Risk Management
Climate change presents both risks and
opportunities to Elders. We recognise
that climate change will have different
impacts across Australia, and economic
decarbonisation will also affect our sector in
different ways. We are managing the impact
of climate change through:
• maintaining and evolving our diverse
product and service offerings across our
national footprint, which supports risk
mitigation and the ability to meet our
clients' needs as they adapt and respond
to climate-related impacts
• the implementation of emissions
reduction targets that guide
business activities
• the utilisation of scenario analysis to
understand our exposure to climate-
related risks and opportunities
• due diligence processes that facilitate
the evaluation of potential business
acquisitions against our key sustainability
principles, relevant climate trends and
impacts (i.e. industry and geography) and
our emissions profile.
Important information
It is important to note that where
Elders' climate-related disclosures
contain forward-looking statements
and metrics, they should not be viewed
as guarantees for future outcomes in
climate change, financial or operational
performance or share pricing. Our
statements and metrics are influenced
by various risks, uncertainties and
other factors, many of which are
outside of Elders' control.
Readers should be cautious and avoid
placing excessive reliance on these
statements due to the uncertainty in
climate metrics and modelling, and the
potential for divergent outcomes based
on underlying risks and assumptions.
While Elders has developed this report
based on its current knowledge and
in good faith, it reserves its right to
modify its views in the future.
2
Available on our website, at Elders' Periodic Reports.
Published our first Sustainability Report
including our emissions profile and our
climate-risk management processes,
roles and responsibilities
Initiated internal and
independent review of
climate-related risks
and opportunities
Set action plan for
full alignment with the
TCFD Recommendations
Disclosed our climate-related
risk assessment methodology
and our climate-related risks
and mitigation actions
Identified
climate-related
opportunities
Set climate
change targets
Qualitatively assessed
future climate-related
risks and impacts using
appropriate climate
scenarios
Reported on performance
against our targets
Achieved 100%
renewable electricity
in all Australian sites*
Developed our
Scope 3 emissions
profile
Undertook quantitative
analysis of climate-related
physical risks and impacts
Maintained 100%
renewable electricity
in all Australian sites*
Increased the number
of sites with onsite solar
generation capability
Conducted qualitative
scenario analysis, focusing
on transition risks and
opportunities
Identified
Scope 3
emissions
boundaries
Develop and implement
a strategy to reduce fleet
fuel related emissions
Publish Sustainability Report
pursuant to mandatory
climate-related disclosure
requirements
Elders
Climate Action
Roadmap
FY20
FY21
FY22
FY23
FY24
FY25
FY26
Continue to maintain 100%
renewable electricity in all
Australian sites
*Achieved through procurement and retirement of Large-scale Generation Certificates and onsite solar generation.
FY28 ONWARDS
Quantify our Scope 3 emissions and report
them pursuant to mandatory climate-related
disclosure requirements
FY27
Continue to seek to reduce our
emissions in line with our 2030
climate target
Continue to support research, development and
extension to agriculture sector in the areas of
emissions reduction and climate change resilience
WE’RE HERE
AIMING FOR NET ZERO SCOPE 1 AND SCOPE 2 EMISSIONS
2050
Elders Limited Annual Financial Report
34
Sustainability
35
Assessing Climate Risks and Opportunities
Physical Risks and Opportunities
We recognise that our ability to prepare for and respond to physical risks is critical to maintaining business continuity as the frequency
and intensity of climate-related events increase. Below is an overview of the key physical risks identified by Elders. The risks noted
are not exhaustive and are in no particular order. More information on our physical risks and opportunities is available in our FY24
Sustainability Report.3
Risk categories: A – Acute C – Chronic
Opportunity categories: RE – Resource efficiency E – Energy source PS – Products/Services M – Markets/Geographies R - Resilience
Risks and impacts
Our strategy
C Crop yields
Crop yields may be adversely impacted by a fall in
total annual rainfall; prolonged drought; future rainfall
occurring in fewer, heavier events; higher temperatures;
increased fire risk and an increased prevalence of pests,
diseases and weeds. These events could impact farm
profitability and the demand for the goods and services
which Elders supplies.
PS Continue to offer supportive rural products, including water-efficient and heat-tolerant
plant varieties and plants with shorter growing seasons.
PS Continue to offer agronomic advisory services and supportive AgTech assisting farmers
with effective cropping, pest, disease and weed management and farm adaptation.
R Maintain and improve inventory management practices to mitigate the impact of
demand variability.
PS Investigate opportunities to partner with additional suppliers providing climate-resilient
plant varieties.
C Health and safety
Increased frequency and severity of extreme heat days
may result in reduced productivity, increased changes of
heat-related illness, exposure to heat-related injury and
exposure to diseases which may become more prevalent.
R Continue to implement and improve our Work Health and Safety Management System,
provide appropriate, sun-safe uniforms and personal protective equipment and maintain
appropriate and effective incident management plans.
C Livestock production
Livestock production may be affected by variability in
pasture quality driven by prolonged drought, higher
temperatures and heat stress and flood-related mortality.
This could impact the demand for animal health, feed
products and agency services. Killara Feedlot may also be
impacted due to increased mitigation requirements.
M Retain our geographically diverse livestock agency base to serve clients across the country
and mitigate the impacts of regional adverse conditions.
PS Continue to offer supportive rural products, including pasture varieties that maximise
water use efficiency, heat tolerance and shorter growing seasons, and feed supplements
that mitigate the effects of heat stress, dehydration and physical stress in animals in
extreme weather.
PS Continue to offer livestock production advisory services, advising farmers on the
selection of animals based on genetic resilience, and appropriate seedstock and
commercial replacements.
R Ongoing scenario analysis and an increased understanding of the likely geographical
shifts of livestock production may identify further opportunities and controls.
A Severe weather
Tropical storms and cyclones may increase the risk of
heavy, prolonged rainfall events and the potential for
widespread flooding and destruction of infrastructure,
physical assets, crops and livestock. These events may
affect the productivity of our agribusiness customers
and, in turn, increase the variability of Elders'
financial performance.
M Retain and grow our national footprint to serve customers and clients across the country
in responding to the impacts of severe weather. Given Australia's vast and diverse
landscape, severe weather events rarely occur across multiple regions at the same time. By
maintaining a geographical spread of operations across the country and a diverse product
and service range, the negative impacts of severe weather events on our organisation are
limited and mitigated.
R Maintain and improve our incident management, emergency evacuation and business
continuity plans.
R Maintain and improve inventory management practices to mitigate the impact of
demand variability.
A Storm impacts
Coastal events like cyclones, storms and associated storm
surges may result in damage to port infrastructure, vessels
or goods, which could impact Elders’ supply chains.
M Maintain and diversify our supplier base to mitigate supply chain disruptions.
R Continue working with suppliers to manage risks and implement effective inventory
management practices, including holding stock in our Australia-based AIRR warehouses,
working with local suppliers, and formulating certain products locally.
C Water availability
Decreases in average rainfall and an increase in the
frequency and duration of drought conditions limits the
replenishment of dams, reservoirs and aquifers. This could
impact water supply for on-site usage and trading, and
could see changes to licence terms. Water scarcity could
impact farm operations and reduce the demand for the
goods and services which we supply.
RE Monitor and maintain Killara Feedlot’s water licences, centre pivot irrigation system and
relationships with third party feed suppliers.
M Continue to explore opportunities to increase our offering of water capture and storage
equipment, including through our business, Sunfam, which provides irrigation and
pumping equipment from its base in Bundaberg, Queensland.
3
Available online at Elders' Periodic Reports.
Elders Limited Annual Financial Report
36
Transition Risks and Opportunities
Given the rapidly evolving landscape of regulations, technology, and market trends, it is essential to continuously address these factors
to maintain competitiveness and ensure business resilience. The following is a list of transition risks that have been identified. The risks
noted are not exhaustive and are in no particular order. More information on our transition risks and opportunities is available in our FY24
Sustainability Report.4
Risk categories: PL – Policy and Legal M – Markets R – Reputation L – Liability
Opportunity categories: RE – Resource efficiency E – Energy source PS – Products/Services M – Markets/Geographies R - Resilience
Risks and impacts
Our strategy
R
Demand for key products
Consumer preferences shifting to ‘green’ labelled products
may result in a decreased demand for some of Elders’
product lines.
PS
Maintain and grow our diverse product offering.
M
Continue to investigate opportunities to expand our range to accommodate changes
in demand.
PL
Climate change policy and carbon charges
International pressure or changes at a Federal government
level have the potential to rapidly shift the types of
obligations faced by Australian companies in the coming
years. Changes may include the introduction of a carbon
charge, which may impact Elders’ operational costs and
that of its customer base. International changes may
also impact customers' ability to conduct business in
foreign jurisdictions, which may impact the demand for the
products and services which we supply.
R
Align our climate-related disclosures with the requirements of the Australian
Sustainability Reporting Standards.
RE
Implement strategies to reduce Elders’ greenhouse gas emissions in alignment with
our emissions reduction targets.
PS
Continue to offer products and services which support sustainable farming practices
which deliver climate change mitigation and adaptation.
R
Achieving our climate-related targets
Delayed, or lack of, innovation could affect Elders' ability to
meet its 2030 and 2050 climate-related emissions targets,
which may require an investment in carbon offsets.
RE
Continue to monitor developments in technology through industry partnerships and
aim to implement innovative technology as it becomes commercially viable.
4
Available online at Elders' Periodic Reports.
Killara Feedlot Cattle - 62%
Fleet Transport Fuel - 34%
diesel
Killara Feedlot Equipment - 2%
diesel and gasoline
Other - 2%
including fleet transport fuel (gasoline),
stationary forklif fuel (LPG) and natural gas
0
5000
10000
15000
20000
25000
30000
35000
40000
Electricity
Other
Killara Feedlot equipment
Fleet transport fuel - diesel
Killara Feedlot cattle
tC02e
Killara Feedlot cattle
Fleet transport fuel
diesel
Killara Feedlot
equipment
diesel and gasoline
Other
including fleet
transport fuel (gasoline),
stationary forklif fuel (LPG)
and natural gas
Electricity
35,218
19,682
1,172
1,138
57,210
TOTAL SCOPE
1 AND 2
tC02e
ELDERS’ EMISSIONS PROFILE
Scope 1 and 2 emissions
Our emissions profile reflects our emissions between 1 July 2023 and 30 June 2024, and was calculated using the following
methodologies.
•
For electricity usage: The methodology used is set out in the National Greenhouse and Energy (Measurement)
Determination 2008 (as updated from time to time). Specifically, Elders utilises the NGER emissions and energy threshold
calculator to calculate its scope 2 emissions and energy usage.
•
For fuel use: The methodology used is set out in the National Greenhouse and Energy Reporting (Measurement)
Determination 2008(as updated from time to time). Specifically, Elders' utilises the NGER emissions and energy threshold
calculator to calculate fuel emissions and energy usage.
•
For cattle production: the methodology set out in the Greenhouse Gas Accounting Framework for Feedlots and the Sheep
and Beef Accounting Framework (Monthly) produced by the University of Melbourne and based on the Australian National
Greenhouse Gas Inventory methodology. These methodologies are unable to account for sequestered carbon from
minimum till farming practices at the feedlot or specific manure and fertiliser management practices used by the feedlot.
Further information on our energy, emissions
and procurement of LGCs is contained
in our FY24 Sustainability Report
For more information on the methodologies used by Elders, please see our FY24 Sustainability Report
0
Sustainability
37
Directors’
Report
2024
Circuit Sale – Eyre Peninsula SA, 2023
Directors’ Report
39
Directors'
Report
Your Directors present their report on the
consolidated entity consisting of Elders
Limited (Elders) and the entities it controlled
at the end of, or during, the year ended
30 September 2024.
Ian Wilton
MSc, FCCA, FCPA, CA, FAICD
Appointed Chair on 11 Sept 2019 and Non-
Executive Director since 2014, Mr Wilton is
also Chair of the Nomination and Prudential
Committee (appointed 11 Sept 2019) and
the Safety and Sustainability Committee
(Sept 2019 to Feb 2023, re-appointed Sept
2023). He is a member of the Audit,
Risk and Compliance Committee (former
Chair) and the Remuneration, People and
Culture Committee.
Mr Wilton is an experienced non-executive
director and former senior executive with
extensive knowledge of the agricultural
sector. He has held chief financial officer
positions with Ridley Corporation Limited,
CSR Sugar and GrainCorp Limited. He was
President and Chief Executive Officer of
GrainCorp Malt.
Mr Wilton is currently a non-executive
director of Namoi Cotton Limited (since June
2020). He was previously a non-executive
director of Sheep CRC Ltd (Nov 2015
– Sept 2020) and was also previously
Chair of the advisory board of Mackay’s
Banana Marketing.
Mr Wilton is a resident of New South Wales.
Mark Allison
BAgrSc, BEcon, GDM, AMP (HBS), DUniv (hc)
(Adel), FAICD
Mr Allison joined Elders Limited as a non-
executive director in November 2009, served
as Chairman and Executive Chairman, before
being appointed Managing Director and
Chief Executive Officer in May 2014.
His 44-year agribusiness career spans
technical, manufacturing, supply and
distribution roles and businesses. Previous
roles include Managing Director/CEO of
GrainGrowers Limited, Jeminex Limited,
Farmoz Pty Ltd, Wesfarmers Landmark
Limited, Wesfarmers CSBP Limited, CropCare
Australasia Pty Ltd and General Manager of
Incitec Fertilisers.
Mr Allison is currently Chair of the
Agriculture and Natural Resources End-User
Advisory Board of the SmartSat CRC, the
Agrifood and Wine Advisory Board of the
University of Adelaide, and a member
of the Rabobank Food and Agriculture
Advisory Board.
He is the previous Chair of Agribusiness
Australia, AuctionsPlus, CropLife, Agsafe,
the APVMA, as well as a number of
other agricultural and industrial and
safety businesses.
Mr Allison oversaw the development and
implementation of the four Elders’ Eight
Point Plans from 2014. This strategic plan
returned the company to a pure play
agribusiness and resulted in the first
shareholder distribution in nearly a decade
in 2017. Since 2014 Elders has grown from
a market capitalisation of $50 million to a
peak of $2.3 billion.
In 2023 Mr Allison was awarded an Honorary
Doctorate from the University of Adelaide for
his experience and lifelong contribution to
agriculture and agribusiness.
Mr Allison is from far north Queensland, and
is a passionate advocate of agriculture, and
regional and rural Australia.
Elders Limited Annual Financial Report
40
Robyn Clubb AM
BEc, CA, SF Fin, MAICD
Non-Executive Director since September
2015, Ms Clubb is Chair of the Audit,
Risk and Compliance Committee (appointed
11 Sept 2019) and a member of the
the Safety and Sustainability Committee;
the Remuneration, People and Culture
Committee (former Chair); and the
Nomination and Prudential Committee.
Ms Clubb is an experienced non-executive
director, a chartered accountant and senior
fellow of the Finance and Securities Institute
of Australasia. She has over 20 years’
experience as a senior executive in the
financial services industry, working for
organisations including AMP Limited and
Citibank Limited.
Ms Clubb is currently Chair of ProTen Limited
(Director since Apr 2019) and a director of
Australia Post (since Sept 2022). She was
previously a director of Essential Energy (Apr
2018 - Mar 2024), Craig Mostyn Holdings
Pty Ltd (Feb 2017 - Dec 2022), Chair
of the Australian Wool Exchange Limited
(Aug 2016 - Nov 2022) and Chair of FCFA
Management Leasing Limited (Director Aug
2021 - Feb 2023).
Ms Clubb is a resident of New South Wales.
Raelene Murphy
BBus, FCA, GAICD
Non-Executive Director since January
2021, Ms Murphy is a member of the
Safety and Sustainability Committee; the
Audit, Risk and Compliance Committee;
the Remuneration, People and Culture
Committee (Chair Sept 2023 - Aug
2024); and the Nomination and
Prudential Committee.
Ms Murphy has non-executive director
experience in the Australian listed company
environment, across a range of industry
sectors. She holds a Bachelor of Business
(Accounting), is a fellow of the Institute of
Chartered Accountants and a graduate of the
Australian Institute of Company Directors.
She also has many years' experience as
a senior executive, having previously been
the CEO of the Delta Group and Managing
Director of 333 Management.
Ms Murphy's current ASX non-executive
director roles are at Bega Cheese Limited
(since June 2015), Integral Diagnostics
Limited (since Oct 2017) and Tabcorp
Holdings Limited (since Aug 2022). Ms
Murphy was also previously a non-executive
director of Altium Limited (Sept 2016 -
Nov 2022).
Ms Murphy is a resident of Victoria.
John LLoyd
BSc, MBA
Non-Executive Director since 1 December
2023, Mr Lloyd is Chair of the Remuneration,
People and Culture Committee (appointed
19 Aug 2024) and a member of the Safety
and Sustainability Committee; the Audit,
Risk and Compliance Committee; and the
Nomination and Prudential Committee.
Mr Lloyd holds a Bachelor of Science, Wool
and Pastoral, from the University of NSW
and an MBA from the Macquarie Graduate
School of Management.
He has extensive experience in the
agricultural industry, including his current
appointment as Chair-Elect of Meat and
Livestock Australia. Mr Lloyd is a council
member of Charles Sturt University and
was previously a non-executive director of
Wine Australia and Grains and Legumes
Nutrition Council.
Mr Lloyd's previous executive roles include
CEO of Horticulture Innovation Australia,
Managing Director of Case New Holland
ANZ, General Manager Commercial at Incitec
Pivot and General Manager Merchandise at
Wesfarmers Dalgety.
Mr Lloyd is a resident of New South Wales.
Directors’ Report
41
Damien Frawley
Non-Executive Director since 1 August
2024, Mr Frawley is a member of the
Safety and Sustainability Committee; the
Audit, Risk and Compliance Committee;
the Remuneration, People and Culture
Committee; and the Nomination and
Prudential Committee.
Mr Frawley is an experienced CEO and
director, with extensive experience in the
financial services sector and a strong
passion for agriculture. He is currently Chair
of Queensland Treasury Corporation (since
2022) and Chair of Host-Plus Pty Limited
(Director since Jul 2021). Mr Frawley is also
a non-executive director of both Mirvac
Group (ASX: MGR, since Dec 2021) and
Blue Sky Beef Pty Ltd (since Mar 2018). He
was previously Chair of AMPS Agribusiness
Limited (Nov 2018 - Apr 2024).
Mr Frawley brings to the Elders Board
skills in CEO and leadership oversight,
Board leadership, strategy and planning,
talent and remuneration, customers and
consumers and government relations. He
also has a well-developed understanding of
agribusiness through various professional
and personal undertakings.
Mr Frawley is a resident of New South Wales.
Glenn Davis
LLB, BEc, FAICD
Non-Executive Director since 2 September
2024, Mr Davis is a member of the
Safety and Sustainability Committee; the
Audit, Risk and Compliance Committee;
the Remuneration, People and Culture
Committee; and the Nomination and
Prudential Committee.
Mr Davis holds a Bachelor of Laws
and a Bachelor of Economics from the
University of Adelaide. He is a fellow of the
Australian Institute of Company Directors,
with extensive experience serving on both
listed and unlisted company boards.
He currently serves as a director of ASX and
NZX dual listed SkyCity Entertainment Group
Limited and Chair of SkyCity's Adelaide-
based casino (since Sept 2022), as Chair of
ASX listed Adrad Holdings Limited (since Jan
2022), and Chair of ASX listed iTech Minerals
Ltd (since Apr 2021).
Mr Davis was previously Non-Executive
Director of Beach Energy Limited
(2007-2023), including serving as Chair
between 2012 and his retirement.
In addition to his experience as a director,
Mr Davis has almost 40 years' experience
as a commercial lawyer. Since 2002 he has
been principal and co-founder of DMAW
Lawyers. As a lawyer he has advised many
corporate clients, including listed clients, on
transactional and risk management matters.
Mr Davis brings to the Board skills in legal,
CEO and leadership oversight, talent and
remuneration, strategy and planning, Board
leadership and risk management.
Mr Davis is a resident of South Australia.
Elders Limited Annual Financial Report
42
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
• Raelene Murphy
• John Lloyd
Executive Director
• Mark Allison, Managing Director and Chief
Executive Officer
New Directors
• Damien Frawley was appointed by the
Board as a non-executive director,
effective 1 August 2024
• Glenn Davis was appointed by the Board
as a non-executive director, effective
2 September 2024.
Mr Frawley and Mr Davis will stand for
election by Shareholders at the 2024 Annual
General Meeting.
Ms Clubb and Ms Murphy will retire by
rotation at the 2024 AGM in accordance with
the Company's Constitution. Ms Clubb will
offer herself for re-election, and Ms Murphy
has advised of her intention to retire, at the
2024 AGM.
Elders' Company Secretaries during the
financial year and until the date of this
report were:
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 also held
the position of General Counsel from 2010
to 2024. Mr Hastings is Chair of Walford
Anglican School for Girls.
• Shannon Hope Doecke,
BAcc, Grad Dip Applied Corporate
Governance, AGIA, MAICD
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.
Results and Review
of Operations
The consolidated entity recorded a profit
for the year, after tax and non-controlling
interests, of $45.1 million (2023: profit of
$100.8 million). A review of the operations
and results of the consolidated entity and
its principal businesses during the year is
contained in pages 20 to 26.
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
• storage and handling of wool
• feedlotting of cattle
• 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 and investments in the
AuctionsPlus and Clear Grain Exchange
online trading platforms
• formulation, blending, and importation
of, and selling, own-brand agricultural
chemicals and animal health products.
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.
Events Subsequent
to Balance Date
There was no matter or circumstance that
has arisen since 30 September 2024 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 27 of this report.
Non-Audit Services
In accordance with Company policy, and
based on advice received from the Audit,
Risk and Compliance Committee, the
Directors are satisfied that the provision
of non-audit and audit-related services is
compatible with the general standard of
independence for auditors and imposed
under the Corporations Act 2001, for the
following reasons:
• all non-audit and audit-related services
have been reviewed by the Audit, Risk
and Compliance Committee to ensure
they do not impact on the impartiality or
objectivity of the auditor
• the nature and scope of the non-audit
services provided means that auditor
independence was not compromised.
The amount received or due to be received
for the provision of non-audit services is
disclosed in note 28 of the financial report,
Auditor's Remuneration.
A copy of the auditor’s independence
declaration as required under section 307C
of the Corporations Act 2001 is set out on
page 121.
Insurance of Officers
and Indemnities
The consolidated entity paid an insurance
premium in respect of a contract insuring
each of the Directors of Elders named
earlier in this report and each full time
executive officer, director and secretary of
Australian group entities against liabilities
and expenses arising as a result of work
performed in their respective capacities,
to the extent permitted by law. The terms
of the policy prohibit disclosure of the
premiums paid.
As at 30 September 2024, Elders
has provided each officer a Deed of
Access, Insurance and Indemnity. These
deeds provide:
• that Elders will maintain an insurance
policy insuring the Officer against any
liability incurred by the Officer in
the Officer’s capacity as an officer of
Elders or another group entity, or other
entity (where required by the Officer's
employment with Elders) to the extent
allowed by law
• for indemnity against liability as an
officer, except to the extent of indemnity
under the insurance policy or where
prohibited by law
• for access to company documents and
records, subject to undertakings as
to confidentiality.
Remuneration of Directors and
Senior Executives
Details of the remuneration arrangements in
place for Elders’ Key Management Personnel
are set out in the Remuneration Report
commencing on page 45. In compiling
this report, Elders has met the disclosure
requirements prescribed in the Australian
accounting standards and Corporations
Act 2001.
Directors’ Report
43
Attendance at Meetings by Directors
Director attendance at meetings in the 12 months to 30 September 2024 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
Safety and
Sustainability
Committee
Audit, Risk and
Compliance Committee
Remuneration, People and
Culture Committee
Nomination and
Prudential Committee
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
I Wilton
14
14
4
4
5
5
5
5
3
3
M Allison
14
14
-
-
-
-
-
-
3
3
R Clubb
14
14
4
4
5
5
5
5
3
3
R Murphy
13
14
4
4
5
5
5
5
3
3
J Lloyd1
11
11
3
3
4
4
3
3
1
1
D Frawley2
2
2
-
-
1
1
1
1
-
-
G Davis3
1
1
-
-
1
1
1
1
-
-
1 Commenced 1 December 2023. 2. Commenced 1 August 2024. 3. Commenced 2 September 2024.
Share and Other Equity Issues During the Year
During FY24, shares allocated under Elders' incentive plans were purchased on market. The following ordinary shares were issued during
the year:
Relevant Date
No. Ordinary
Shares Issued
Reason for Issue
20 December 2023
893,454
Shares issued in accordance with Elders' DRP for dividends paid on 20 December 2023
22 December 2023
71
Shares issued in accordance with Elders' DRP for dividends paid to a participant in Elders' Long-Term Incentive Plan
26 June 2024
670,972
Shares issued in accordance with Elders' DRP for dividends paid on 26 June 2024
28 June 2024
50
Shares issued in accordance with Elders' DRP for dividends paid to participant in Elders' Long-Term Incentive Plan
The total number of ordinary shares on issue at the date of this report is 158,041,121.
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 45 to 65 of this Annual Report.
The number of performance rights on issue at 30 September 2024, which were held by 29 Long-Term Incentive Plan participants, is disclosed in
note 27 to the Financial Statements. If each of these rights vested, this would represent 1.00% 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.
1,042,267
(94,035)
901,270
(589,187)
0
1,260,315
No. of rights as at 30
Sept 2023
No. of rights vested on
20 Nov 2023¹
No. of rights granted
since the AGM on 14 Dec
2023
No. of rights lapsed from
30 Sept 2023 to date of
report
No. of rights vested on 18
Nov 2024¹
No. of rights outstanding
at the date of report²
1. In accordance with Australian accounting standards. 2. Differs from note 27 in the financial statements which does not take into account
316,200 rights that lapsed after 30 September 2024.
Note: The FY23 Directors' Report included an immaterial error in the total number of performance rights outstanding as at the date of the report.
Elders Limited Annual Financial Report
44
The performance rights granted to the five
most highly remunerated Officers as part of
their remuneration, between 30 September
2023 and the date of this report, are
shown below.
Name of Officer
Number of Rights Granted
between 30 September 2023
and 18 November 2024
Mark Allison
283,990
Thomas Russo
57,250
Viv Da Ros
51,190
Paul Rossiter
48,280
Anna Bennett
43,320
Directors’ Interests
The relevant interests of the Directors in
shares and other equity securities of Elders,
as at the date of this report, are detailed on
page 64 of the Remuneration Report.
Dividends and Other
Equity Distributions
On 15 November 2024, the Directors
determined to pay a final dividend of $0.18
per ordinary share, franked at 70%, bringing
dividends for FY24 to $0.36 per share. In
accordance with a determination made by
the Directors, Elders’ Dividend Reinvestment
Plan (DRP) remains in operation. To
encourage participation in the DRP, a
discount of 1.5% has been offered on
the volume weighted average price used
to calculate the DRP price for the FY24
final dividend.
Dividends paid during the year were
FY23 Final
Dividend
HY24
Interim
Dividend
Date
Determined
10 November
2023
17 May 2024
Date Paid
20 December
2023
26 June
2024
Dividend Per
Share
$0.23
$0.18
Franking Rate
30%
50%
Total Dividend
$35.990m
$28.327m
Restricted Securities and
Voluntary Escrow
As at the date of this report, Elders has no
restricted securities on offer.
Environmental
Performance Regulation
A number of Elders' operations are
subject to environmental legislation. Such
legislation is diverse and varies between
states, territories, local authorities and
various regulators. Compliance with relevant
legislation is managed by our branches
and overseen and guided by our internal
Safety, Risk and Environment Business
Partners, Legal Team and Compliance
Team. Environmental risks and hazards are
managed in accordance with our Resilience
and Risk Framework. Our performance
in relation to environmental management
and the various applicable environmental
regulations across our businesses over the
reporting period is as follows.
Killara Feedlot
Elders operates Killara Feedlot, a beef
cattle feedlot in Quirindi, New South
Wales. Killara is subject to both state and
local government environmental legislation,
and its operation is conditional on it
maintaining its environment protection and
water licences.
In accordance with its environment
protection licence (EP Licence), Killara is
required to undertake a significant number
of environmental management activities to
ensure that it is managing its waste, dust
and odour emissions to minimise pollution
of the surrounding community and to avoid
groundwater and soil contamination. Failure
to manage these emissions can affect
the amenity of the local community and
contaminate private and public property.
Killara has a publicly available Odour, Dust
and Noise Management Plan and to further
ensure that its activities are not negatively
impacting the local community, Killara
proactively engages with all neighbours and
local council through both feedlot tours and
regular contact.
Emissions are monitored internally by
Killara, and externally by the New South
Wales Environment Protection Authority
(NSW EPA) and the National Pollutant
Inventory (NPI). Killara submits reports
to the NPI detailing emissions of NPI
substances (including ammonia, carbon
monoxide and oxides of nitrogen) and
activities Killara has participated in to
reduce these emissions. Killara also submits
annual reports to the New South Wales
EPA describing (amongst other things)
management systems in place to manage
soil health and nutrient levels, odour and
dust, waste, protection of local waterways
and any pollution complaints received
in the reporting year. These reports are
prepared by an external consultant. During
FY24, Killara has observed through soil
testing a notable improvement in the health
of the soil in its cropping operations.
Nutrient levels are in line with EPA
recommendations in respect of nitrate,
phosphate and potassium.
No confirmed breaches of environmental
regulations or pollution complaints relating
to Killara were reported during the
year ended 30 September 2024. Killara's
performance on water management and
consumption and waste management is
detailed on pages 34 and 32 of Elders' 2024
Sustainability Report.
Saleyards
Saleyards are subject to various
state, territory and local government
environmental requirements, particularly
relating to effluent management, dust and
noise. These obligations vary from place to
place and generally only apply to saleyards
above a prescribed size. Elders expects its
saleyard operations, irrespective of their
size, to abide by the applicable laws
and regulations.
No breaches of environmental regulations
affecting Elders’ saleyards were reported
during the year ended 30 September 2024.
Retail and Wholesale Operations
Elders’ retail and wholesale operations are
subject to state environmental regulations
relating to the storage, handling, transport
and sale of dangerous goods, which
include some of the agricultural chemicals,
fertilisers and poisons we supply. Although
these regulations are based on nationally
recognised standards, the regulatory
environment for the transporting, handling,
storage, sale and use of such dangerous
goods, chemicals and scheduled poisons is
complex and subject to regulations imposed
by each state and territory. Elders' Safety,
Risk and Environment Business Partners
monitor compliance with these regulations.
In addition, many of Elders’ branches and
personnel participate in an accreditation,
training and audit program operated by
AgSafe. These assurance activities are
being progressively rolled out to our
wholesale operations.
Elders is not aware of any breaches
of environmental regulations affecting
Elders’ retail or wholesale operations that
were reported during the year ended
30 September 2024.
Rounding of Amounts
The parent entity is a Group of the kind
specified in ASIC Corporations (Rounding
in Financial/Directors Report) Instrument
2016/191 issued by the Australian Securities
and Investments Commission. In accordance
with that class order, amounts in the
Financial Report and Directors’ Report have
been rounded to the nearest thousand
dollars unless otherwise stated.
This report, including the Remuneration
Report commencing on page 45, is made in
accordance with a resolution of Directors.
Ian Wilton
Chair
Mark Allison
Managing Director
18 November 2024
Remuneration
Report
2024
Gandy Angus – Diamond Tree WA, 2024
Elders Limited Annual Financial Report
46
Remuneration
Report
Following is the
Remuneration Report for
the consolidated entity
for the year ended
30 September 2024.
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 2024, and demonstrates the strong
alignment of remuneration arrangements at
Elders with the shareholder experience.
The information provided in this report
forms part of the Directors' Report, and
where required has been audited to ensure
compliance with the Corporations Act
2001 (Cth).
Remuneration at a Glance
Our Year
Despite improved second half trading
conditions, Elders was unable to fully offset
the earnings impact from Q1 resulting from
low livestock prices, lower crop protection
margins and subdued client sentiment.
Our product, channel and geographical
diversification allowed Elders to partially
overcome market headwinds (particularly
impacting Q1), while investment continues
in our transformational projects to
support underlying EBIT growth and
operational efficiency.
Our FY24 underlying EBIT of $128.0 million
represents a decrease of 25% on FY23.
As a result of the underlying EBIT
performance in FY24 the threshold EBIT
target was not met and no short term
incentives were awarded to Executive KMP
and non-KMP Senior Executive (details of
the FY24 STI outcomes 3.1).
The FY22 Long-Term Incentive (LTI) grant,
which has a three year performance period
concluding on 30 September 2024, resulted
in none of the grant vesting as tested
against EPS compound annual growth
rate (CAGR) over the period and the
Total Shareholder return (TSR) performance
relative to the ASX 200 peer group (details
of the performance testing of the FY22 LTI
offer are outlined in Section 3.2).
Key Management Personnel
The Board reviewed the KMP for FY24 and
determined the following persons are KMP:
• Non-Executive Directors (NED)
• Managing Director and Chief Executive
Officer (MD and CEO) and
• Chief Financial Officer (CFO).
The following changes to Non-Executive
Directors were announced during FY24:
• John Lloyd joined as a Non-Executive
Director effective 1 December 2023
• Damien Frawley joined as a Non-Executive
Director effective 1 August 2024
• Glenn Davis joined as a Non-Executive
Director effective 2 September 2024.
There were no changes to the Executive KMP
in FY24.
Remuneration Report
47
First Strike Against
Remuneration Report
At the 2023 AGM, shareholders voted
against the adoption of the 2023
Remuneration Report, and the granting
of Service Rights to the MD and CEO,
Mr Allison.
The Board has sought to understand
the concerns of shareholders and proxy
advisors, and to address these as
necessary. The Board notes that these
concerns largely relate to the specific
decisions taken in negotiating to retain
the services of Mr Allison rather than the
broader structure and reporting of KMP and
executive remuneration at Elders.
Feedback from proxy advisors and major
shareholders indicated that the vote
against the 2023 Remuneration Report
reflected concerns with the size of the
increase in fixed remuneration for the MD
and CEO and with the one-off retention
arrangements put in place to retain Mr
Allison’s services; the lack of performance
conditions in the retention arrangements;
and transparency around the benchmarking
used to arrive at these decisions. Concerns
were also expressed regarding the process
of addressing CEO succession, given the
notice provided by Mr Allison in November
2022 of his intent to retire from Elders.
A detailed response to these concerns is set
out in Section 1 of this report.
Honouring the MD and CEO
Retention Arrangements and
Service Rights
As part of the arrangements put in place
to retain Mr Allison’s services, shareholders
were asked to approve the issue of Service
Rights, as outlined in the 2023 Annual
Report and Notice of Meeting.
In putting the proposal to issue Service
Rights for approval by shareholders,
the Board had reserved its right to
satisfy this commitment by way of
alternative arrangements, should approval
not be provided.
Whilst shareholders rejected the issue of
Service Rights, the Board formed the view
that it was in the best interests of the
Company and shareholders to honour in
full the commitments agreed in order to
retain Mr Allison’s services. As advised to
shareholders in May 2024 the Board has
satisfied the value of the Service Rights
commitment by way of a cash payment.
This cash payment is determined by the
value of the proposed Service Rights
(90,000 in each of two tranches) multiplied
by the volume weighted average price of
Elders shares traded on ASX over the five
trading days prior to Mr Allison’s retention
service dates, being 1 June 2024 and
1 June 2025.
The Board acknowledges the concerns
expressed by shareholders and proxy
advisors regarding what were one-off
decisions taken to deal with the
circumstances related to CEO succession.
These arrangements were intended to
mitigate the risks considered by the Board
at the time and are addressed in more detail
in Section 1 of this Report.
With a secure leadership team in place,
and refreshed CEO succession plans
being overseen by a board that has
continued its own renewal process, the
Board looks forward to an orderly process
that will ensure the continuation of
recent business success and improved
shareholder outcomes.
Remuneration Changes
Implemented in FY24
The Board believes that the current
framework for remuneration and
performance-based reward at Elders is
aligned to the principles outlined in Section
2.1 of this Report.
The Elders' Reward Framework was reviewed
in FY24 and remains relevant to Elders, with
the following changes made for FY24:
• from the FY24 Short Term Incentive
onwards, equity deferral for non-KMP
Senior Executive was revised to 20%
of any STI earned being awarded via
restricted Elders shares, to be held for
one year before being released. This was
revised from a deferral of 40% of any
STI into restricted shares, in two equal
tranches, one released after 12 months
and the other after 24 months. These
changes were considered appropriate for
non-KMP Senior Executive, balancing out
the issues of market practice, appropriate
reward for performance, requirements
for executive equity holding and the
governance processes to address any
inappropriate reward outcomes
• Executive KMP retain the requirement to
defer 40% of any STI paid into restricted
shares in two equal tranches as outlined
in Section 4.2
• all other requirements for deferral and
restrictions remained unchanged.
Overview of FY24
Remuneration Outcomes
Non Executive Directors
Non-Executive Director Fee Pool
The fee pool of $1,500,000 was last
increased with shareholder approval at the
2022 AGM.
During FY24 Messrs Lloyd, Frawley and Davis
joined the Board increasing the current
number of non-executive directors to six,
complementing ongoing Board renewal. As
noted elsewhere in the Annual Report,
each brings a wide range of industry and
commercial experience to the Board.
Non-Executive Director Fees
The Board reviewed Non-Executive Director
(NED) fees against market data and applied
an increase of 4.0% to the Chair fee and
Board member fees effective 1 January 2024.
This increase was in line with the Company’s
overall annual remuneration review budget
for FY24.
No fee increase is planned for the 2025
financial year.
Executive KMP
Total Fixed Remuneration (TFR)
TFR for the MD and CEO was unchanged
during FY24. No increase in remuneration is
planned for the 2025 financial year.
TFR for the CFO, Paul Rossiter, was increased
to $500,000 on 1 October 2023, after
having been appointed permanently to the
CFO role, and then to $510,000 effective
1 January 2024, as part of the annual
remuneration review process.
The review of TFR for the Executive KMP
considers market movements, individual
performance and benchmarking to relevant
peers. Further details of fixed remuneration
setting are outlined in Section 4.1 of
this Report.
Variable Remuneration
Short-Term Incentives
Elders' Short-Term Incentive pool for
executive participants is aligned with
company performance and shareholders'
interests. As a result of the FY24 threshold
EBIT target not being met, no short term
incentives were awarded to Executive KMP
and non-KMP Senior Executive.
Further details are in section 3.1 of this
Remuneration Report.
Long-Term Incentives vesting
The FY22 LTI grant three-year performance
period ended 30 September 2024 with none
of this grant vesting. This outcome was the
result of:
• an absolute TSR outcome of -16.3% which
resulted in a ranking at less than the 50th
percentile of the comparator group. As
this was below the minimum performance
hurdle none of tranche 1 vested
• an EPS CAGR outcome of -18.0% which
resulted in none of tranche 2 vesting.
Further details of this outcome are in section
3.2 of this Remuneration Report.
Elders Limited Annual Financial Report
48
Remuneration Changes
for FY25
FY25 Short-Term Incentive
The Board has approved changes to the
short-term incentive (STI) plan arrangements
for FY25, with a view to creating greater
alignment around delivering on overall
Elders' group performance.
These changes include:
• the creation of a single group STI
pool covering the Executive (KMP
and non-KMP), employees in corporate
functions and product groups, and
incorporating State Network teams and
subsidiary entities. All participating
employees are aligned under common
financial performance hurdles and STI
payout opportunities
• funding for this group STI pool is
subject to achieving a minimum hurdle
of 90% of target EBIT for the financial
year. Previously, the minimum financial
performance was a mix of 80% of
business entity performance and 95% of
Elders group financial target hurdles
• the STI pool at the minimum performance
will accrue at 30% of participant
maximum STI opportunity
• at 100% of the EBIT target the STI pool
will be funded at 60% of the participant
maximum STI opportunity
• for the MD and CEO, 95% of target EBIT
must be achieved for consideration of a
payment from the STI pool
• this STI pool continues to be subject to
safety and environmental gateways
• payouts from the pool are then subject
to work team and individual performance,
taking account of outcomes against
planned KPIs and the Elders Code
of Conduct
• Board discretion continues, with potential
to adjust based on overall financial,
safety or environmental performance.
Discretion also exists for claw back where
inappropriate outcomes are determined
• these changes are considered appropriate
in providing an overall incentive pool
for the business, taking account of the
inherent volatility in the environment
in which the business operates and
financial target setting, and in providing
a remuneration framework that is
market competitive.
Contents
Key Management Personnel
49
1 Response to First Strike Against
Remuneration Report
49
2 Overview of FY24
Executive Remuneration
51
3 Link Between Elders’
Financial Performance and FY24
Remuneration Outcomes
52
4 Details of the Executive
Remuneration Framework
58
5 Remuneration Governance
61
6 Non-Executive Director Remuneration
and Statutory Remuneration
62
7 Key Terms of Executive
KMP Employment Contracts and
Statutory Remuneration
63
8 Additional Required Disclosures
64
Remuneration Report
49
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 and CEO and Senior Executives considered KMP are referred to collectively as “Executive KMP” in this report.
FY24 Key Management Personnel
Name
Position
Status
Date as KMP (if not a full year)
Non-Executive Directors
I Wilton
Chair
Full year
R Clubb
Director
Full year
R Murphy
Director
Full year
J Lloyd
Director
Part year
Commenced 1 December 2023
D Frawley
Director
Part year
Commenced 1 August 2024
G Davis
Director
Part year
Commenced 2 September 2024
Executive KMP
M Allison
Managing Director and CEO
Full year
P Rossiter
Chief Financial Officer
Full year
Section 1 – Response to First Strike Against Remuneration Report
As noted earlier, the feedback from proxy advisors and major shareholders indicated that the vote against the 2023 Remuneration Report
reflected concerns with the arrangements put in place to retain the services of Mr Allison, and the failure of the Board to ensure an orderly
process of CEO succession.
Outlined below are the key issues raised by shareholders and proxy advisors and the Board’s response to these concerns.
Concern:
The lack of succession candidates reflecting a poor performance of what should be a key Board function
Response:
Prior to the announcement in November 2022 of Mr Allison’s intention to retire from Elders, the Board had a continuing focus on
CEO succession. In 2021 it commenced a detailed succession process aided by external providers. With Mr Allison’s retirement
announcement the Board accelerated this process, extended it to a global search and undertook an updated review of internal
candidates at the time.
Through this process it became apparent that none of the potential internal candidates were considered ready to make the
immediate transition to the role of MD and CEO, so the succession process focused on identifying suitable external candidates,
with the combination of industry knowledge, experience, and leadership skills necessary to continue the evolution of Elders as
experienced under Mr Allison’s leadership.
Whilst this process had identified suitable candidates, and discussions had been undertaken, the Board had been unable to
secure a suitable appointment to accommodate the timeframes originally agreed with Mr Allison, and was required to take into
consideration business conditions at the time.
Having retained Mr Allison’s services, the Board then reviewed and refined its approach to ensuring that a suitable successor is in
place when Mr Allison does retire from Elders. This has included the engagement of external advisors, Derwent Search, to assist
with increased activity associated with the identification and development of internal candidates.
Concern:
The size of retention arrangements provided to the MD and CEO and the lack of performance conditions applied to the
Service Rights
Response:
The Board felt it was in the best interests of the Company and shareholders that they seek to secure Mr Allison’s services beyond
his planned retirement date, and for a sufficient enough period to moderate the risks that a gap in leadership may present given
the internal and external circumstances at the time. These included the delivery of the Elders systems modernisation and supply
chain streamline projects, and the impact of climatic and broader macro-economic conditions on the business conditions for
the Company.
The retention arrangements were constructed as part of a package of one-off arrangements designed to retain Mr Allison’s
services through the immediate period, while refreshed succession arrangements were put in place.
The intent of the Service Rights component was to balance the priorities of retention and value generated for shareholders under
Mr Allison's continued leadership.
Mr Allison has indicated his willingness to remain in the role of MD and CEO for the duration of the current Eight Point Plan which
ends in September 2026. No further retention payments will be made beyond those anticipated in June 2025.
Elders Limited Annual Financial Report
50
Concern:
The size of fixed pay increase awarded to the MD and CEO, and transparency around benchmarking
Response:
During the course of the search process to identify and secure the services of a suitable successor it became apparent that
the remuneration package needed to secure a suitable candidate would be at a level greater than being provided to the role at
that time.
In negotiating the arrangements to continue Mr Allison’s tenure, the Board felt that the package arrived at was appropriate in the
circumstances, in line with benchmarking conducted previously and in the best interests of the Company and its shareholders.
As part of the 2024 annual review process, and per the process outlined in Section 4.1 of this report, the Board commissioned
independent benchmarking of Mr Allison’s remuneration by consulting firm Guerdon Associates, an update on similar work
previously undertaken.
A benchmarking peer group was determined with regard for company size and financials, taking account of criteria such as market
capitalisation, total assets, net assets, revenue, EBITDA, and capital intensity ratio. Operational scope took account of commodity
exposure, retail aspect, and manufacturing operations.
The analysis, excluding one-off retention arrangements, showed that Mr Allison’s total fixed remuneration is positioned at the 64th
percentile and his total remuneration package, at maximum value of the STI and LTI opportunity, is at the 57th percentile of the
peer group.
The Board believes that the remuneration package and market positioning arrived at for Mr Allison is reasonable and appropriate
for the circumstances of the Company and Mr Allison’s performance in the role.
Concern:
The impact of these decisions on shareholder wealth
Response:
The decision to put in place the remuneration arrangements to retain Mr Allison’s services beyond his planned retirement date
from Elders was considered as appropriate in the circumstances confronted by the Board at that time and deemed to be in the
best interest of the Company and the shareholders.
It should be noted that the market capitalisation of the Company has increased by over 30% since the announcement of Mr
Allison continuing as MD and CEO.
The Board believes that the structure of the Company’s overall remuneration arrangements aligns performance based reward with
overall business outcomes and the impact on shareholder wealth.
Concern:
The weighting of non-financial measures in the STI
Response:
Concerns were expressed regarding the overall 40% weighting of non-financial measures. Whilst the overall balanced scorecard
of measures used to assess individual performance comprises a mix of financial and non-financial measures, the underlying
STI plan requires the achievement of an overall company financial gateway that is considered appropriate to warrant any
STI payment.
Non-financial objectives are intended to ensure that critical components relating to People and Safety, Sustainability, the delivery
of critical strategic priorities and other key non-financial objectives form part of the overall assessment of individual performance;
that these are front of mind in setting, reviewing and rewarding the achievement of annual performance objectives.
The Board believes that the current STI structure provides an appropriate mix of performance objectives for the executive team, in
a manner that focuses on delivering outcomes aligned to the Company’s overall strategy.
Concern:
The outcomes of the vesting decision for the FY21 LTI grant
Response:
The FY21 LTI grant vested at 28% of the maximum number of performance rights issued, based on the EPS Growth tranche
achieving a compound annual growth rate (CAGR) of 7.8%, and the TSR tranche failing to achieve the minimum performance
hurdle of 50th percentile of TSR ranked with the ASX 200 comparison companies.
Elders adopted the accounting standard AASB 16 Leases from 1 October 2019. Underlying EPS was 69.9¢ in FY20 including the
impact of this standard. This standard has been applied consistently across the performance period of the FY21 LTI grant.
The Elders 2020 Notice of Meeting stated the opening EPS for the FY21 LTI grant, in the case of the MD and CEO’s offer as 70.7¢
but did not clarify that this was the adjusted figure. This disclosure has since been rectified in future notices to avoid confusion
and doubt, and the Board considered that using the adjusted value of 69.9¢ (includes the impact of AASB 16 Leases) as the FY20
starting point for the calculation of the EPS CAGR was appropriate in the circumstances.
The Board believes that the use of the underlying EPS value from the FY20 results, and the vesting outcome of the FY21 LTI grant
were appropriate in the circumstances.
In reviewing shareholder and proxy adviser feedback, the Board has considered the structure of executive remuneration arrangements and
feels that these meet the needs of being able to attract and retain key executive talent, as well as providing appropriate outcomes for
all stakeholders.
As already noted, the Board readily acknowledges the concerns expressed by shareholders and proxy advisors, as a result of the decision taken
to retain Mr Allison’s services after having been unable to secure a suitable successor within the original succession timeframes.
Having addressed that issue, with a secure leadership team in place, refreshed CEO succession planning and a Board that has continued its
own renewal process, the Board is confident of an orderly succession process that will continue to deliver outcomes in the best interests of the
Company and shareholders.
Remuneration Report
51
Section 2 – Overview of FY24 Executive Remuneration
Elders’ remuneration framework is designed to attract, retain and motivate whilst driving Elders’ culture and delivering our business strategy,
long-term company performance and creation of shareholder value.
2.1 Remuneration Principles
To drive and
support delivery of
Elders’ strategy and
create long-term
shareholder value
Drive outcomes and
provide a balance
between motivation,
risk and reward
Market competitive
to attract and retain
key talent
Reward is
commensurate
with performance.
Decisions
are objective
and consistent
Simple and flexible
– allowing for
business growth
Reinforces Elders'
culture, vision
and values
2.2 Remuneration Structure and Mix
Remuneration is structured so a portion of reward for the Executive KMP and non-KMP Senior Executive depends on meeting individual,
business unit and Elders’ targets and objectives, including maximising returns for shareholders.
Further details of the remuneration framework are provided in Section 4 of this Report.
Executive KMP and other Senior Executive remuneration elements, structure and delivery1
100% paid
in cash
Year 1
Year 2
Year 3
Fixed Remuneration
Attracts and retains executives
with the capability and
experience to deliver our
strategy.
100% delivered
in performance
rights
Base salary,
superannuation and
other benefits
50% subject to relative TSR (and additional requirement
of absolute TSR is greater than or equal to zero)
50% subject to EPS growth
Year 4
Three year performance period
One year holding lock
STI Cash
Deferred STI vests in two equal
tranches over two years
STI Cash
Deferred STI over
one year
Executive KMP
60% paid in cash
and 40% deferred
to equity
Senior Executive
(non-KMP)1
80% paid in cash and
20% deferred to equity
Short-Term Incentive
Motivates and rewards for
achievement of annual performance
against Elders’ overall results and
individual key performance
indicators.
Subject to performance targets across
the performance year
Long-Term Incentive
Supports alignment to long-term
overall company performance
rewarding for delivery of longer
term strategy and creating
shareholder value.
Executive KMP and other Senior Executive FY24 remuneration mix at maximum1
MD and CEO
Performance-based
Total Fixed Remuneration 32%
Maximum STI 32%
Maximum LTI 36%
Performance-based
Executive KMP (other than MD and CEO)
Total Fixed Remuneration 48%
Maximum STI 26%
Maximum LTI 26%
Performance-based
Senior Executive (non-KMP)1
Total Fixed Remuneration 49%
Maximum STI 24%
Maximum LTI 27%
1
Information for Senior Executive non-KMP is unaudited.
Elders Limited Annual Financial Report
52
Section 3 – Link Between Elders’ Financial Performance and FY24 Remuneration
Outcomes
3.1 Overview of STI Outcomes for FY24
Executive KMP (other than MD and CEO) FY24 STI performance measures
Elders' Short-Term Incentive pool for executive participants is aligned with company performance and shareholders' interests. Company
financial performance determines the pool of funds available and STI outcomes are awarded based on achievement of individual KPIs which
contain a balance of challenging financial and operational targets, aligned to business strategy.
The FY24 threshold EBIT performance was not met and as a result no STI was awarded to Executive KMP.
For the purpose of completeness in reporting, the structure of the Executive FY24 KPIs, as applied to the CFO and the typical structure for
non-KMP Senior Executive is tabled below.
Category
Performance measure
Weighting
Why was it chosen?
How is it measured?
Gateway
Achievement
of threshold
performance for
underlying EBIT,
greater than prior
year EBIT outcome,
zero fatalities,
adherence to Elders
Code of Conduct
and no significant
environmental event
-
Ensures Executive KMP will only be awarded
where threshold financial, Code of Conduct,
safety and environmental performance has
been achieved.
Threshold is based on achievement of:
• 95% of the Board approved underlying
EBIT budget
• adherence to Elders Code of Conduct
• zero fatalities
• no significant environmental event.
Below the EBIT threshold no STI is payable to
Executive KMP.
Financial
measures
Financial and
operational
performance
60%
Key indicators of Elders’ financial
performance and aligned to Elders’ Eight
Point Plan objectives.
Achievement of Board approved budget
financial outcomes, including underlying
EBIT, Operating Cash Flow, ROC and SG&A
reduction targets.
Strategic
measures
Strategic Priorities
CFO-40%
Other
Executive-
15%
The Board believes the strategic priorities of
Elders’ Eight Point Plan are fundamental key
drivers of long-term value creation.
For the CFO and non-KMP Senior Executive
this is measured on achievement of their
Business Unit’s key milestones in the Eight
Point Plan.
People, Safety,
and Sustainability
CFO - 0%
Other
Executive-
15%
Focusing on our people through diversity and
employee engagement is critical to continue
to attract and retain the talent needed to
deliver our strategy.
Safety is about driving significant progress in
achieving a “zero harm” workplace.
Sustainability is about focusing on delivering
sustainability priorities as identified.
People is measured through positive
movement in the representation of women
in management and employee engagement
and enablement.
Safety is measured through reduction in
total recordable injury frequency rate and
completion of risk radar actions.
Sustainability is measured through key
objectives in the Sustainability Action
Plan, including:
• Climate Change - Scenario Analysis Phase 2
• Climate Change - TCFD
disclosure alignment
• Energy-emissions reduction/sustainable
facilities strategy implementation
• Waste reduction - strategy implementation
Customer
CFO- 0%
Other
Executive-
10%
Focusing on building and maintaining
effective customer relationships is key to a
long-term sustainable business.
Measured through the Roy Morgan Trust
Survey and customer Net Promoter Score.
Remuneration Report
53
MD and CEO FY24 STI outcomes
The FY24 threshold EBIT performance was not met and as a result no STI was awarded to Executive KMP. For the purpose of completeness in
reporting, the MD and CEO FY24 KPIs and results are tabled below.
Key Priority
Measures
Target
Outcome
FY24 Performance Commentary
Financial
Measures
(60%)
Underlying EBIT
$151.8m
$128.0m
FY24 EBIT gateway not achieved
Operating Cash Flow (over 12-month period) 90% - 100% of
net profit after tax (NPAT)
>100%
+129%
Operating cash flow exceeded
stretch target
Return on Capital
15.0%
11.3%
FY24 target not achieved
Strategic
Priorities
(15%)
Deliver System Modernisation project milestone as per
Business Case
Key
Milestones Delivered
On Track
FY24 milestones met
People ,
Safety and
Sustainability
(15%)
Total recordable injury frequency rate (TRIFR)
10.0
9.0
Target exceeded
Lost Time Injuries
2.0
2.0
Target achieved
Achievement of five diversity objectives by 2025:
Maintain representation of women in Senior Executive
positions > 40%
38%
20%
Threshold not met
Increase representation of women in senior positions > 25%
1
21%
21%
Threshold met
Increase overall diversity of workforce2
34%
38%
Exceeded Target
Maintain the feeling of belonging2
85%
90%
Exceeded Target
Overall employee engagement2
77%
77%
Target achieved
Achievement of FY24 Sustainability Action Plan
• implementation of the Environmental Management Plan
Key milestones
achieved as per
FY24 Sustainability
Action Plan
Incomplete
Not all actions completed.
• all major suppliers assessed for ethical sourcing risks
On Track
On Track
• progression of branch solar panel installations, against a
baseline of FY22
On Track
On Track
Customer
(10%)
Roy Morgan Trusted Agribusiness Brand Award
No. 1
No. 1
Achieved Target
Customer Net Promoter feedback response
80%
46%
Threshold not met
1 Working towards the 2025 objective, FY24: 23-24%; FY25: 25%
2 Measured as part of annual 'Employee Effectiveness' survey
Target met or exceeded
Threshold/Minimum performance achieved
Threshold/Minimum performance not met
Executive KMP FY24 STI outcomes and performance against targets
KMP
Financial
Measures
(60%)
Sustainability
(10%)
Strategic Priorities
(20%)
People and
Safety
(10%)
Customer
(10%)
Maximum STI
Opportunity
Awarded
STI as % of
Maximum
Forfeited
STI as % of
Maximum
Company
Company
Company
Business
Unit
Company
Company
$
%
%
M Allison, MD
and CEO
Gateway
not met
Met Target
Met Target
Most Targets
Met or
Exceeded
Targets Met or
Exceeded
1,500,000
0%
100%
P Rossiter, CFO
Gateway
not met
Met Target
Met Target
N/A
280,500
0%
100%
Elders Limited Annual Financial Report
54
3.2 Overview of LTI Outcomes for FY24
The FY22 LTI grant, with a performance period of three years, concluded 30 September 2024. The testing resulted in 0% of the performance
rights vesting.
Finalised LTI – FY22 grant
3.2 Overview of FY24 LTI Outcomes
% of Total Grant Performance Measures
Outcome of Testing
Tranche 1 – Total Shareholder Return (TSR)
50%
Based on Elders’ TSR performance relative to the TSR performance of
comparator companies over the three year performance period 1 October
2021 ending on 30 September 2024. The percentage of TSR rights that vest
were determined as follows:
Elders’ absolute TSR over the performance period was -16.3%,
which ranked below the 50th percentile, resulting in 0% of this
tranche vesting.
Notes regarding calculation:
The starting share price to calculate the Elders TSR was Elders' five
trading day VWAP up to and including 30 September 2021 of $12.062
and the closing share price of Elders' fivetrading day VWAP as at
30 September 2024 of $8.65.
Dividends paid over the performance period were $1.42 per share.
An external consultant (PFS Consulting) was engaged to calculate the
TSR outcome.
Absolute TSR over the
performance period
% of Rights that vest
Less than 50th percentile
Nil
At 50th percentile
50%
Between 50th and 75th percentile
50-100%, on a straight-line
sliding scale
At 75th percentile or greater
100%
Absolute TSR was measured using opening and closing share prices
determined as follows:
• the opening share price value of $12.062
• the closing share price value based on the five trading day Volume
Weighted Average Price (VWAP) up to and including the last day of the
performance period
• dividends paid in the performance period
Tranche 2 – Earnings per Share Growth
50%
EPS rights vest subject to achievement of target or above EPS Compound
Annual Growth Rate (CAGR) over the performance period as follows:
Elders' EPS CAGR over the performance period was -18.0%, resulting in
0% of this tranche vesting.
As communicated in FY20, EPS for the purposes of LTI will be
calculated using the weighted average shares as the denominator
and underlying NPAT2 as numerator. The EPS outcome for FY24 was
determined as follows:
EPS CAGR over the
performance period
% of Rights that vest
FY21
FY22
FY23
FY24
Less than 7.5%
Nil
Weighted avg. no. of
shares1 (000)
156,305
156,477
156,477
157,353
Equals 7.5%
50%
Underlying NPAT
($ million)
151.1
152.2
137.02
83.82
Greater than 7.5% but less than 10%
50-100%, on a straight-line
sliding scale
EPS (cents)
96.7
97.3
87.62
53.42
CAGR
-18.0%
Equal to or greater than 10%
100%
For a reconciliation between underlying and statutory 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.
1 Shares do not include performance rights which have not yet vested. For FY24, no rights were deemed to be dilutive. Refer to note 4 of the financial statements.
2 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.
One fully paid share in Elders will be allocated for each vested performance right, and shares are subject to 12-month holding lock, as detailed
in section 4.2. The total number of vested performance rights under the FY22 grant is zero. Individual vesting outcomes for Executive KMP are
outlined in in section 8.
Remuneration Report
55
Finalised LTI - FY22 grant (continued)
Reconciliation of statutory profit to underlying profit used to calculate EPS for the FY22 LTI grant vesting FY24
Statutory Profit ($ million)
45.1
Basic EPS (cents) – Statutory Profit
28.6
Adjustment for non-underlying items ($ million)
18.9
Underlying NPAT ($ million)
64.0
Basic EPS (cents) - Underlying NPAT
40.7
Adjustment for tax expense
20.1
Adjusted NPAT ($ million)
84.1
Basic EPS (cents) - Adjusted NPAT
53.4
Weighted average shares (millions of shares)
157.4
Reconciliation of tax expense adjustment
Statutory tax expense
18.0
Add back of tax expense
relating to entity outside the tax
consolidated group
(4.6)
Add back of non-underlying
tax expense
6.7
Adjustment for tax expense
20.1
For a reconciliation between underlying and statutory 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.
3.3 Summary of FY24 Executive KMP Outcomes
This table presents actual remuneration paid or payable, or vested for the Executive KMP in respect of FY24. The information is voluntary,
unaudited, different from and additional to that required by Australian accounting standards and statutory requirements, which is provided in
section 7.2.
Executive KMP Remuneration outcomes for FY24 (unaudited and non-IFRS)
Base salary
Total STI1
Values of
Shares
Vested2
Super-
annuation
Other
Termination
benefits
Total
$
$
$
$
$
$
$
M Allison
MD and CEO
1,471,968
-
164,307
28,032
1,245,2003
-
2,909,507
P Rossiter
CFO
476,247
-
-
29,714
75,0004
-
580,961
Total
1,948,215
-
164,307
57,746
1,320,200
-
3,490,468
1 STI cash and deferral component not awarded in FY23 as threshold EBIT performance not met.
2 Value of the FY21 LTI grant that vested in the FY24 year. Value based on total number of shares issued as a result of FY21 LTI vesting and five day VWAP of price prior to vesting date (30/9/23).
3 Cash retention payment ($500,000) and cash payment in lieu of Service Rights ($745,200).
4 Cash payment awarded for period as Acting CFO, in lieu of salary adjustment.
Elders Limited Annual Financial Report
56
3.4 Historical Five Year Performance
Highlights Elders’ key financial performance over the past five years and that link to the Senior Executive KMPs' STI and LTI
remuneration outcomes.
Elders' CAGR Performance FY20 to FY241
2,093
2,549
3,445
3,321
3,131
FY20
FY21
FY22
FY23
FY24
Sales Revenue ($m)
10.6% CAGR
121
167
232
170
128
FY20
FY21
FY22
FY23
FY24
Underlying EBIT ($m)
1.4%
CAGR
70
97
97
66
41
FY20
FY21
FY22
FY23
FY24
Underlying Earnings per Share
(cents)
-12.7% CAGR
70
97
97
66
41
134
87
53
FY20
FY21
FY22
FY23
FY24
Adjusted Underlying Earnings
per Share for Vesting (cents)1
-6.5% CAGR
Adjusted
underlying
EPS
108
151
152
106
64
FY20
FY21
FY22
FY23
FY24
Underlying NPAT ($m)1
-12.3% CAGR
19
23
26
16
11
FY20
FY21
FY22
FY23
FY24
Return on Capital (%)
-12.0% CAGR
22
42
56
46
36
FY20
FY21
FY22
FY23
FY24
Dividends per Share (cents)
13.1% CAGR
453
138
(38)
(607)
267
FY20
FY21
FY22
FY23
FY24
Share Price Movement (cents)
-12.4% CAGR
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
The table and chart below present the performance based remuneration outcomes for Executive KMP (STI and LTI) over the last five years, as a
percentage of the maximum incentive opportunity.
Remuneration outcomes
2020
2021
2022
2023
2024
STI – average % received of maximum opportunity
94%
95%
87%
0%
0%1
LTI – vesting % of maximum opportunity
75%
100%
100%
28%
0%2
1 FY24 minimum EBIT not achieved as reported elsewhere in this report
2 FY22 LTIP minimum performance requirements not achieved as reported elsewhere in this report
Executive KMP Remuneration Outcomes vs. Underlying EBIT
74
121
167
232
170
128
0
0.2
0.4
0.6
0.8
1
1.2
0
50
100
150
200
250
2019 (Baseline)
2020
2021
2022
2023
2024
% of Maximum Opportunity
Underlying EBIT ($m)
Underlying EBIT
STI - average % received of maximum opportunity
LTI- vesting % of maximum opportunity
Remuneration Report
57
3.4 Historical Five Year Performance (cont.)
This chart shows Elders’ annual TSR performance over the last five years against the S&P/ASX 200 Accumulation Index. Elders’ LTI Plans for
FY19, FY20 and FY21 include an absolute TSR performance condition. Full vesting of the TSR tranche (50% of total grant for FY18 and FY19, and
33.3% of FY20) was achieved for grants under the FY18, FY19 and FY20 LTI Offers.
Absolute TSR %
Absolute TSR %
-10.2%
-10.2%
30.6%
30.6%
-7.7%
-7.7%
13.5%
13.5%
21.8%
21.8%
77.1%
77.1%
14.6%
14.6%
2.6%
2.6%
-48.0%
-48.0%
56.9%
56.9%
ASX200
Elders
2020
2021
2022
2023
2024
This chart compares Elders’ total LTI vesting results for grants made in FY18 to FY22, and vesting in FY20 to FY24, to Elders’ share price during the
same period.
LTI Plan performance outcomes relative to Elders' share price
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
2
4
6
8
10
12
14
16
LTI award (% vested)
Elders share price ($)
01/10/2020
LTI Grant: FY18
75%
01/10/2021
LTI Grant: FY19
100%
01/10/2022
LTI Grant: FY20
100%
01/10/2023
LTI Grant: FY21
28%
01/10/2024
LTI Grant: FY22
0%
Elders Limited Annual Financial Report
58
Section 4 – Details of the Executive Remuneration Framework
4.1 Fixed Remuneration
Fixed remuneration levels for Executive KMP, and the broader executive group, are set in line with regular remuneration survey benchmarking
data, that seeks to assess appropriate remuneration based on the size of the role, and where appropriate on the basis of job role or function
and specific industry benchmark data. Remuneration policy is set using the median of relevant market data as a reference point, and the annual
review of individual remuneration is undertaken to take account of market movements in benchmark data, the budget for annual remuneration
costs, along with individual performance in the role to consider appropriate positioning relative to market data.
Specific benchmarking analysis is also periodically undertaken to assess executive roles against publicly reported peer company data, as noted
for the MD and CEO earlier in this Report. A benchmarking peer group is typically determined with regard for company size and financials, taking
account of criteria such as market capitalisation, total assets, net assets, revenue, EBITDA, capital intensity ratio, and operational scope, taking
account of business operations, including commodity exposure, retail aspect, and manufacturing operations.
4.2 Current Short-Term and Long-Term Incentive Plan Structures
Current STI Structure
Executive KMP
Performance Period
Annual aligned with financial year – 1 October 2023 to 30 September 2024
Maximum STI Opportunity as % of TFR
MD and CEO - 100% of TFR
Other Executive KMP (CFO) - 50% of TFR
Performance Measure(s)
Gateway: Underlying EBIT (95% of Target for Executive KMP), zero fatalities, adherence to Elders Code of
Conduct and no significant environmental events are achieved.
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 3.1 for further details on Executive KMP FY24 STI
performance measures.
Equity Deferral
40% of any STI earned by Executive KMP is delivered via restricted 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 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 advisors; 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.
Cessation of Employment
STI participants must be employed at the time of payment and not on notice to terminate.
Restricted shares are subject to service and other conditions as noted above.
Change of Control (STI Restricted Shares)
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.
Non- KMP Senior Executive (unaudited)
The STI structure for non-KMP Senior Executive is the same as applied to the Executive KMP, with the following differences:
• Maximum STI Opportunity as % of TFR is 50% of TFR
• Equity Deferral- commencing in FY24, equity deferral for non-KMP Senior Executive was revised to 20% of any STI earned being awarded via
restricted Elders shares, to be held for one year before being released. All other requirements for deferral and restrictions with these STI
participants remain unchanged.
Remuneration Report
59
4.2 Current Short-Term and Long-Term Incentive Plan Structures (continued)
Current LTI Plan Structure
FY23
FY24
Maximum LTI
Opportunity % of TFR
MD and CEO – 110%,
Executive KMP (other than the MD and CEO)– 55%
Performance Period
(3 years)
1 October 2022 to 30 September 2025
1 October 2023 to 30 September 2026
Grant Date
15-Dec-22
MD and CEO (M Allison)
19-Dec-23
MD and CEO (M Allison)
23-Dec-22
Other participants
19-Dec-23
Other participants
As at 30 September 2024
Executive KMP and
Other Participants
No. of
Rights Outstanding
MD and CEO (M Allison)
107,000 Rights
MD and CEO (M Allison)
283,990 Rights
CFO (P Rossiter)
0 Rights
CFO (P Rossiter)
48,280 Rights
21 other participants
252,045 Rights
19 other participants
569,000 Rights
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.
Tranche 1
Relative TSR
50% weighting
Tranche 2
EPS Growth
50% weighting
Performance Measures
and Vesting
Tranche 1 – Relative TSR Against Comparator Companies Performance Rights
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
Target: 50th Percentile
50%
Stretch: 75th Percentile or above
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.
The Comparator Companies for this tranche comprises the companies in the S&P/ASX 200 index as at the start of the Performance
Period. Any companies that are delisted from the ASX during the Performance Period or suspended from trading at the end of the
Performance Period will be removed from the vesting assessment.
Tranche 2 – EPS Growth Performance Rights
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.
EPS CAGR
% of Tranche that Vest
Target
7.5%
50%
Stretch
10%
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.
Elders Limited Annual Financial Report
60
4.2 Current Short-Term and Long-Term Incentive Plan Structures (continued)
Current LTI Plans Structure
Holding Lock
A 12-month holding lock on shares awarded under the LTI plan. A participant is entitled to receive dividends and other
distributions and exercise full voting rights.
Performance Testing
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.
Clawback
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.
Dividends
No entitlement to dividends during the performance period.
Treatment of Unvested
Rights on Cessation
of Employment
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.
Dealing in Securities
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.
Change of Control
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.
Corporate
Actions/Reconstructions
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.
Board Discretion
The Board may exercise its discretion to make adjustments it considers appropriate in light of the purpose and intent of the Plan
and the performance conditions. This may include making adjustments to ensure that the interests of the relevant Participant are
not, in the opinion of the Board, materially prejudiced or advantaged relative to the position reasonably anticipated at the time of
the grant. The Board uses a number of principles to assess whether to make an adjustment, including:
• maintaining the desired level of stretch for targets
• maintaining the integrity and intention of the reward
• aligning outcomes with general market and shareholder expectations
• consistent treatment across remuneration elements and performance period
• preserving the success and intent of transactions or other actions that have materially benefited the Company.
If discretion is to be exercised, it may be a result of events such as:
• acquisitions 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.
Future Considerations
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.
4.3 Current Retention Arrangements
In addition to these incentive arrangements the Board has put in place specific retention arrangements to secure the continued services of Mr
Allison as Managing Director and Chief Executive Officer.
During FY24 Mr Allison received payment for the first part of the retention arrangements as he was still employed on 1 June 2024 as required
by the terms of those arrangements. The payments made were (i) the cash retention payment of $500,000 and (ii) a payment of $745,200, as
advised to shareholders in May 2024, to reflect the value of 90,000 Elders shares, based on the volume weighted average price of Elders shares
traded on ASX over the period of 27 May to 31 May 2024.
The remaining components of these arrangements comprise the following, provided Mr Allison remains employed by Elders on 1 June 2025:
1. $500,000 cash (gross).
2. A cash payment to reflect the value of 90,000 Elders shares, based on the volume weighted average price of Elders shares traded on the ASX
over the period of 26 May to 30 May 2025 (inclusive).
Mr Allison has indicated his willingness to remain in the role of MD and CEO for the duration of the current Eight Point Plan which ends in
September 2026 and no further retention payments will be made beyond those anticipated in June 2025.
Remuneration Report
61
Section 5 – Remuneration Governance
The Board Remuneration, People and Culture Committee operates in accordance with the guidance set out in the 4th Edition of the ASX
Corporate Governance Council Principles and Recommendations.
Further information on the role and responsibilities of the Committee is set out in the Corporate Governance Statement, which along with the
Committee’s Charter, is published on the Elders Investor Hub2.
The Committee is comprised entirely of independent Non-Executive Directors.
Board
Reviews the performance of individual Directors and the Executive
team, and approves the CEO’s remuneration.
Management
Provides briefs or recommendations to
the BRPCC on the remuneration
strategy and framework.
Board Remuneration,
People and Culture Committee
(BRPCC)
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
BRPCC on remuneration and market
practice.
5.1 Independent Remuneration Advice
The Committee is briefed by management, however, the Committee makes all decisions free of the influence of management.
Further to the management briefings, to assist in its decision-making, the Committee may, from time to time, seek independent advice from
remuneration advisors, and in so doing will directly engage with the advisors without management involvement.
In the year ended 30 September 2024, the Committee has not sought independent advice from remuneration consultants, therefore no
remuneration recommendations, as defined by the Corporations Act 2001 (Cth), were made by remuneration consultants.
2
Elders' 2024 Corporate Governance Statement can be found online at https://elders.com.au/for-investors/performance/periodic-reports/
Elders Limited Annual Financial Report
62
Section 6 – Non-Executive Director Remuneration and Statutory Remuneration
6.1 Remuneration Framework and Policy
Non-Executive Directors are remunerated by way of fees in the form of cash and superannuation. Non-Executive Directors do not participate in
Elders’ cash or equity incentive plans and do not receive retirement benefits other than superannuation contributions disclosed in this report.
Non-Executive Director fees are reviewed by the Board on an annual basis, taking into consideration the accountability and time commitment of
each director, supported, where appropriate and necessary, by information from external remuneration advisors.
The Board believes Elders’ Non-Executive Directors should own securities in Elders to further align their interests with the interests of other
shareholders. Elders’ Minimum Shareholding Policy now requires Non-Executive Directors to hold at least 100% of non-executive director Base
fees (including superannuation) within three years of appointment. Details of Non-Executive Directors’ shareholdings in Elders can be found in
section 8.
6.2 Non-Executive Director Fees in FY24
Total fees for the financial year ended 30 September 2024 remain within the aggregate fee limit of $1,500,000 per annum, (including
superannuation guarantee), as approved by shareholders at the 2022 AGM .
The Board reviewed the Non-Executive Director fees during FY24 and applied a 4.0% increase to the Board Chair and Member fees from 1 January
2024 per the schedule below.
Non-Executive Director fees
FY24 fee including superannuation1
Chair
Member
$
$
Board
320,2002
140,600
Audit, Risk and Compliance Committee
26,000
13,000
Remuneration, People and Culture Committee
26,000
13,000
Safety and Sustainability Committee
26,000
13,000
Nomination and Prudential Committee
Nil
Nil
1 Showing fees effective 1 January 2024.
2 The Chair of the Board does not receive additional Committee fees.
Non-Executive Director remuneration
Short-term payments
Post-employment
Total
Base Board fee Board Committee fees
Superannuation
$
$
$
$
I Wilton
2024
289,093
28,032
317,125
2023
279,848
-
25,819
305,667
R Clubb
2024
148,480
23,172
19,098
190,750
2023
121,327
44,040
17,572
182,939
J Lloyd1
2024
124,426
9,709
14,956
149,091
2023
-
-
-
-
R Murphy
2024
157,251
11,586
18,788
187,625
2023
121,327
32,014
16,295
169,636
D Frawley2
2024
24,903
1,943
3,087
29,933
2023
-
-
-
-
G Davis3
2024
14,967
-
-
14,967
2023
-
-
-
-
Former Non-Executive Directors
D Eilert4
2024
-
-
-
-
2023
121,327
43,024
17,465
181,816
M Quinn5
2024
-
-
-
-
2023
81,067
25,796
11,277
118,140
Total
2024
759,120
46,410
83,961
889,491
2023
724,896
144,874
88,428
958,198
1 Joined on 1 December 2023.
2 Joined 1 August 2024.
3 Joined 2 September 2024. No superannuation contributions were made on behalf of Mr Davis. Director’s fees for Mr Davis are paid to a related entity.
4 Resigned 30 September 2023.
5 Resigned 4 June 2023.
Remuneration Report
63
Section 7 – Key Terms of Executive KMP Employment Contracts
and Statutory Remuneration
7.1 Contractual Arrangements of Executive KMP
Contractual arrangements
Component
MD and CEO
Other Executive KMP
Contract Duration
Ongoing until terminated by either party
Notice (without cause) initiated by:
Elders: 12 months
6 months
Individual: 6 months
3 months
Payment in lieu of notice may be made equivalent to the remuneration the Executive KMP 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 (Cth), the
Executive KMP 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 Executive KMP, the
Executive KMP may terminate their contract on three months’ notice.
Non-KMP Senior Executive (unaudited)
Contractual arrangements for non-KMP Senior Executive are consistent with those applied to the Executive KMP.
7.2 Executive KMP Statutory Remuneration
Executive KMP remuneration
Short-term payments
Post-
employment
Share-based payments
Long-term
payments
Total
%
performance
related1
Base
salary
Cash STI
Annual
Leave2
Other
Super-
annuation
Deferred
STI
shares
LTI
Rights -
cash3
LTI
Rights -
equity
Long
service
leave
Other
$
$
$
$
$
$
$
$
$
$
%
M Allison
2024 1,471,968
- (225,610)
-
28,032
47,503 1,240,635
262,3724 201,336
588,8395 3,615,075
9%
2023 1,237,064
-
36,827
-
25,819
166,294
-
370,404
231,599
243,5786 2,311,585
23%
P Rossiter
2024
476,247
-
(6,819)
75,0007
29,714
-
-
68,422
62,002
-
704,566
10%
20238
399,222
-
3,562
100,0009
25,819
-
-
-
11,444
-
540,047
0%
Total
2024 1,948,215
- (232,429)
75,000
57,746
47,503 1,240,635
330,794
263,338
588,839 4,319,641
20238 1,636,286
-
40,389
100,000
51,638
166,294
-
370,404
243,043
243,578 2,851,632
1 Performance related remuneration consists of cash STI and share based payments (including deferred STI) as a percentage of total remuneration.
2 This includes the movement in annual leave accrual over the reporting period.
3 The value of cash payment to honour Service Rights announced on 5 June 2023 as part of retention arrangements for the MD & CEO.
4 The FY24 value of LTI performance rights and reversal of service rights in relation to retention arrangements.
5 FY24 value of cash retention arrangements announced on 5 June 2023 as reported in Section 4.3 of this report.
6 FY23 value of cash retention arrangements announced on 5 June 2023 as reported in Section 4.3 of this report.
7 Final cash payment awarded for period as Acting CFO, in lieu of salary adjustment; reported in the interests of transparency.
8 (i) In the interests of transparency, the amounts reported are for the full period of FY23 (12 months).
(ii) The portion of the amounts relating to the period as KMP can be calculated by dividing the amount in the table by 365 days and multiply by 85 days (being the period from 7 Jul 23 to 30
Sep 23).
9 Cash payment awarded for initial period as Acting CFO, in lieu of salary adjustment.
Elders Limited Annual Financial Report
64
Section 8 – Additional Required Disclosures
8.1 KMP equity
Details of Executive KMP current LTI grants and STI restricted shares
Type
Grant date1
Balance
at start
of period
Granted
Vesting
date2
Vested3
Lapsed
Balance4
Expensed
at end of
period
Fair Value
at grant
date5
Rights
maximum
value yet to
vest6
No.
No.
No.
%
No.
%
No.
$
$
$
M Allison
LTI
17-Dec-20
101,0007
-
Nov-23
28,280
28%
72,720
72%
-
114,762
478,174
19,127
LTI
16-Dec-21 102,400
-
Nov-24
-
-
-
-
102,400
63,037
797,184
73,544
LTI
15-Dec-22 107,000
-
Nov-25
-
-
-
-
107,000
(65,356)
694,965
109,889
LTI
19-Dec-23
- 283,990
Nov-26
-
-
-
-
283,990
402,470
1,676,961
1,274,490
LTI Total
310,400 283,990
28,280
28%
72,720
72%
493,390
514,913
3,647,284
1,477,050
STI
22-Dec-21
16,726
-
Sep-23
-
-
-
-
16,726
-
204,726
-
STI
23-Dec-22
-
14,082
Sep-23
-
-
-
-
14,082
-
142,510
-
STI
23-Dec-22
-
14,082
Sep-24
-
-
-
-
14,082
47,503
142,510
-
STI Total
16,726
28,164
-
-
-
-
44,890
47,503
489,746
-
P Rossiter
LTI
19-Dec-23
-
48,280
Nov-24
-
0%
-
0%
48,280
68,422
285,093
216,671
LTI Total
-
48,280
-
-
-
-
48,280
68,422
285,093
216,671
1 The grant dates are aligned to the requirements under the Accounting Standards.
2 The vesting date for LTI performance rights does not include the 12 month holding lock period which is a vesting requirement in relation to the service requirement.
3 The exercise price for the rights was nil.
4 The balance represents unvested rights as of 30 September 2024.
5 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 FY24 LTI Grant- Tranche 1- $5.12 and Tranche 2- $6.69 (for more information see note 27 financial statements).
Fair value is used to calculate the value of restricted shares for the STI Plan. Fair value for FY22 STI restricted shares is $10.12 per share, based on market share price at grant date.
6 The maximum value of yet to vest of performance rights and restricted shares represents the fair value amount at grant date that is yet to be expensed. The minimum value of performance
rights and deferred shares yet to vest is nil, as the rights/shares will be forfeited if the vesting conditions are not met.
7 This offer vested in November 2023, with 28,280 rights vested and 72,720 rights forfeited.
Executive KMP shareholding
Shares held at
start of year
1 October 2023
Shares acquired
during the year as
part
of remuneration
Shares acquired
during the
year through
the vesting of LTI
Other shares
acquired
(disposed of)
during the year
Balance of shares
held at end of
financial period
M Allison
1,197,014
-
28,280
-
1,225,294
P Rossiter
-
-
-
-
-
Total
1,197,014
-
28,280
-
1,225,294
Non-Executive Directors shareholding
Shares held at
start of year
1 October 2023
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
I Wilton
146,845
-
643
147,488
R Clubb
15,000
-
-
15,000
J Lloyd1
-
-
-
-
D Frawley2
-
-
-
-
G Davis3
-
-
-
-
R Murphy
9,000
-
643
9,643
Total
170,845
-
1,286
172,131
1 Joined 1 December 2023
2 Joined 1 August 2024
3 Joined 2 September 2024
Remuneration Report
65
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, in accordance with the Securities Dealing Policy, seeking to avoid both real and perceived trading on inside
information. This approach limits the opportunities for Non-Executive Directors to acquire Elders' shares.
8.2 Other equity schemes in which one or more KMP participate
Deferred Employee Share Plan (DESP)
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.
For NED participants, amounts are sacrificed from monthly Board fees and shares are purchased on market during share trading windows after
announcement of full year and half year results.
8.3 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’
customers on an arm’s length basis and are trivial or domestic in nature.
Elders Limited Annual Financial Report
66
Executive
Management
Mark Allison
Managing Director and Chief Executive
Officer BAgrSc, BEcon, GDM, AMP (HBS),
DUniv (hc) (Adel), FAICD
Mr Allison joined Elders Limited as a non-
executive director in November 2009, served
as Chairman and Executive Chairman, before
being appointed Managing Director and
Chief Executive Officer in May 2014.
Mr Allison's 43-year agribusiness career
spans technical, manufacturing, supply and
distribution roles and businesses. Previous
roles include Managing Director/CEO of
GrainGrowers Limited, Jeminex Limited,
Farmoz Pty Ltd, Wesfarmers Landmark
Limited, Wesfarmers CSBP Limited, CropCare
Australasia Pty Ltd and General Manager of
Incitec Fertilisers.
Mr Allison is currently Chair of the
Agriculture and Natural Resources End-User
Advisory Board of the SmartSat CRC, the
Agrifood and Wine Advisory Board of the
University of Adelaide, and a member
of the Rabobank Food and Agriculture
Advisory Board.
He was the previous Chair of Agribusiness
Australia, AuctionsPlus, CropLife, Agsafe,
the APVMA, as well as a number of
other agricultural and industrial and
safety businesses.
Mr Allison oversaw the development and
implementation of the four Elders Eight
Point Plans from 2014. This strategic
plan returned the company to a pure-
play agribusiness and resulted in the first
shareholder distribution in nearly a decade
in 2017. Since 2014 Elders has grown from
a market capitalisation of $50 million to a
peak of $2.3 billion.
On 19 September 2023 he was awarded
an Honorary Doctorate from the University
of Adelaide for his experience and lifelong
contribution to agriculture and agribusiness.
Mr Allison is from far north Queensland, and
is a passionate advocate of agriculture, and
regional and rural Australia.
Paul Rossiter
Chief Financial Officer BAcc, CPA, FINSIA
Mr Rossiter was appointed to the role of
Chief Financial Officer in July 2023, after
serving the business since 2004. Mr Rossiter
has been Group Treasurer since 2012. Prior
to joining Elders, Mr Rossiter worked for
employers in the finance sector including
Credit Suisse in Sydney and Morgan Stanley
in London.
Mr Rossiter is a Certified Practising
Accountant, with a Bachelor of Accountancy
from the University of South Australia,
and a Fellow of the Financial Services
Institute of Australasia (FINSIA). He is an
experienced finance, accounting and risk
management professional in the fields of
banking, financial markets and agriculture.
Patrick White
General Counsel LLB (Hons) BCom GDLP
Mr White was appointed Elders’ General
Counsel in 2024. He has responsibility
for the Company’s legal, compliance, risk
and insurance functions. Prior to his
appointment, Mr White served as Elders’
Head of Legal Affairs for nearly 10 years, a
role in which he helped to protect and grow
shareholder value through the provision
of legal advice and services across the
entire group. Before joining Elders, Mr White
worked in private practice at a national
commercial law firm, and at a leading
grain marketer.
Executive Management
67
Tom Russo
Executive General Manager Network LLB
(Hons), BA, Grad Dip LP, Dip Prop Serv
(Agency Mgt)
Mr Russo was appointed Executive General
Manager Network in 2022, prior to which
he held several other roles within the
Elders group. Most recently, Mr Russo was
Executive General Manager Real Estate,
Brand & Communications. During his tenure
in that role the gross margin contribution of
the real estate product more than doubled
and Mr Russo established himself as a
leading transaction advisor in the broadacre
investment space. He is a trusted advisor to
many of Elders’ largest clients.
Mr Russo previously played a pivotal
role in devising and implementing the
turnaround strategy for Elders, including
executing a number of large and complex
divestment initiatives.
Prior to Elders, Mr Russo was the Chief
Executive of a specialist international
law firm and practiced as a corporate
lawyer with a focus on mergers and
acquisitions, corporate finance, complex
contractual projects, corporate governance
and intellectual property.
Viv Da Ros
Chief Information Officer MBA (Manchester),
MPM, GAICD
Mr Da Ros was appointed to the position of
Chief Information Officer (CIO) in 2021 and
is responsible for leading the technology/
business transformation program at Elders
– a strategic multiyear change program that
introduces enabling technologies to simplify
and enhance interactions with customers
through traditional and digital channels.
The transformation is well underway and
has already successfully delivered new
capabilities for people management, finance
and operations, reporting and analytics,
public websites and our intranet. The
next wave of change will see exciting
transformations in retail, supply chain and
livestock operations.
Mr Da Ros' 30+ years of experience includes
senior leadership positions in Australia,
Asia and Europe, predominantly in the retail
sector with the AS Watson Group, Tesco,
KPMG and Dairy Farm International. More
recently, Mr Da Ros spent four years running
the technology and digital functions for
Caltex Australia, based in Sydney.
Kiim Lim
Executive General Manager Business
Development BCom, CPA, GAICD
Ms Lim was appointed Executive General
Manager Business Development in 2018.
She has successfully led the completion
and integration of many acquisitions
underpinning the growth of Elders, including
Australian Independent Rural Retailers
(AIRR), Titan AG and over 80 retail, agency
and real estate bolt-ons. Her focus is
to ensure long term sustainable growth
through the acquisition of high-quality
businesses in strategic areas throughout
the network and supply chain. Her team
has also embedded a systemised business
development process at Elders which will
allow Elders to continue this business
discipline into the future.
Ms Lim commenced with Elders in March
2006, and has held various roles within the
finance team. Prior to Elders, Ms Lim worked
with PwC in Malaysia and Adelaide.
Elders Limited Annual Financial Report
68
Anna Bennett
Executive General Manager Strategy,
Sustainability and Innovation MBA, M.Eng,
B.Eng (Hons), GAICD
Anna was appointed Executive General
Manager Strategy, Sustainability and
Innovation in January 2023. She has
responsibility for overall group strategy
as well as leading Elders’ sustainability
and innovation agendas. This includes the
establishment of Thomas Elder Sustainable
Agriculture, an external innovation venture
with a focus on sustainable farming
solutions, in collaboration with leading
research and industry partners.
Anna has over 20 years’ experience
leading strategy and transformation and
prior to joining Elders was General
Manager Corporate Strategy at Australia
Post, where she led the development of
transformation strategies during a period
of significant growth and disruption to
the core business. Anna was previously
a management consultant with Bain
& Company specialising in customer
experience and performance improvement.
Nick Fazekas
Executive General Manager Rural Products
BAgrSc, GAICD
Mr Fazekas was appointed to the position of
Executive General Manager Rural Products in
October 2023.
Since joining Elders in early 2009, Mr
Fazekas has held numerous key roles
including General Manager Key Accounts
and General Manager Retail. Prior to his
current role, he served as State General
Manager Western Australia from October
2019 to September 2023, during which
period he led the team to more than double
WA’s EBIT and expand WA’s operations by
adding eight new businesses.
With 32 years of experience in agricultural
services, Mr Fazekas will continue to focus
on optimising supply chain efficiencies and
improving sales and operational planning,
ultimately enhancing working capital usage
and profitability.
Peter Lourey
Executive General Manager Wholesale
Mr Lourey was appointed to the role
of Executve General Manager Wholesale
in September 2023, with 37 years of
experience within the agriculture, retail and
manufacturing industries. Prior to his current
position, he was AIRR General Manager
where he demonstrated his ability to drive
sales, build a strategic procurement team
and foster strong client relationships that
saw the business double in the five years
since being acquired by Elders.
Mr Lourey's journey also includes a
successful 19 years as the Business
Unit Manager Ruminant division at MSD
Animal Health.
Extending community outreach and impact
69
Extending community outreach and impact
For 185 years, Elders has
been intrinsically linked
to regional, rural and
remote communities.
Through a suite of donations,
community sponsorships
and corporate partnerships,
Elders is proud to enable
the advancement of the
agriculture sector and
supporting regions.
This year, Elders’ community impact was
extended through the inaugural round of
the Community Giving Project. The Project
offers grants of up to $20,000 for grassroots
initiatives promoting sustainable, focused
and long-term impact in regional, rural or
remote communities.
Focused on building capacity, liveability
and connection in the regions in which
we operate, the Project seeks applications
from not-for-profit organisations for projects
which align with one of six pillars: people
and regions, environmental awareness,
innovation into the future, healthy bodies
and minds, encouraging diversity and safety
first. There is also a people’s choice
category, enabling Elders employees to vote
for a project of their choice.
One grant recipient was the Trundle
War Memorial Hall, for their initiative
establishing a 24/7 community gym.
Representative Andrew Rawsthorne said he
hopes the facility will uplift both mental and
physical health in his local community.
“The nearest gym is 60 kilometres away,
and the Trundle community has long needed
an accessible local facility. Converting the
large, unused room at the rear of the hall
into a gym was the natural solution,” said
Mr Rawsthorne.
“Several community groups have already
shown interest in using the facility. We
plan to have a regular yoga instructor, self-
defence classes for girls hosted by Trundle
Central School, Active Farmers sessions and
karate lessons, among other activities.
“We applaud the real leadership Elders is
showing in delivering support to regional
communities across Australia. Without their
support, the creation of this community gym
and its rapid development would not have
been possible.”
The Belinda McGowan Foundation Ltd also
received a grant, which will be used to
provide a double-sized cuddle bed to
Barcaldine Multi-Purpose Health Service,
enhancing the level of palliative and end-of-
life care in the local community.
Tracy Dobie, Executive Director at the
Belinda McGowan Foundation, said the bed
will allow the hospital to provide enhanced
palliative and end of life care in Barcaldine,
where patients can remain close to home
and be held by their loved ones.
“This is especially crucial for rural and
remote areas of Queensland, enabling
individuals who are receiving palliative care
to stay near their homes and families” Ms
Dobie said.
“These beds add a new dimension to how
hospital care staff can support the wellbeing
of both patients and their families.”
The community gym and palliative care
cuddle bed are two of 14 successful
initiatives, with others including the delivery
of leadership workshops, a community
transport vehicle, and farmer first aid
courses, among others.
Elders Managing Director and Chief
Executive Officer Mark Allison said he is
proud to see Elders support such wide-
ranging and noteworthy initiatives, which
seek to make long-term impact.
“A strong agricultural sector is dependent on
strong supporting regions and communities.
Investing in regional economies will
encourage both sustainable growth in
the agricultural sector and the long-
term resilience and viability of regional
communities,” said Mr Allison.
“The Elders culture is true to the value of
community spirit; it’s something our people
embody, and the Community Giving Project
helps both strengthen and highlight this.
“This initiative is our way to give back
and invest in initiatives that will support in
building further connections and capability
in our towns. There is so much creativity
and ingenuity in our regions, and I am so
pleased that we can play our part to bring
these to life, alongside our village of people
and partners.”
The Elders Community Giving Project will re-
open for applications in March 2025.
(L-R) Mr Matt Mulholland (Teacher Science and
Agriculture), three Moura State High School
students, Brendan Crouch, Elders Moura Branch
Manager and Brooke Leo P&C member
Financial
Report
2024
Real Estate – Dalby QLD, 2024
Elders Limited Annual Financial Report
70
Elders Limited Annual Financial Report
Elders
Limited
Annual
Financial
Report
30 September 2024
71
Consolidated Statement of Comprehensive Income
72
Consolidated Statement of Financial Position
73
Consolidated Statement of Cash Flows
74
Consolidated Statement of Changes in Equity
75
Notes to the Consolidated Financial Statements
76
About this report
76
Group Performance
1
Segment Information
79
2
Revenue and Expenses
81
3
Income Tax
82
4
Earnings Per Share
84
Working Capital
5
Receivables
85
6
Livestock
86
7
Inventory
87
8
Trade and Other Payables
88
Capital Employed
9
Property, Plant and Equipment
89
10
Leases
91
11
Intangibles
93
12
Equity Accounted Investments
95
13
Other Financial Assets
96
14
Provisions
97
Net Debt
15
Cash Flow Statement Reconciliation
99
16
Interest Bearing Loans and Borrowings
100
Risk Management
17
Financial Instruments
101
Equity
18
Contributed Equity
106
19
Reserves
107
20
Dividends
108
Group Structure
21
Investments in Controlled Entities
109
22
Parent Entity
112
23
Business Combinations – Changes in the Composition of the Entity
113
Other Notes
24
Expenditure Commitments
114
25
Contingent Liabilities
115
26
Related Party Disclosures
115
27
Share Based Payment Plans
116
28
Auditor's Remuneration
117
29
Key Management Personnel
117
30
Other Matters
117
31
Subsequent Events
117
Consolidated Entity Disclosure Statement
118
Directors' Declaration
120
Elders Limited Annual Financial Report
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 September 2024
72
2024
2023
Note
$000
$000
Continuing operations
Sales revenue
2
3,131,290
3,321,420
Cost of sales
(2,508,066)
(2,716,576)
Gross profit
623,224
604,844
Equity accounted profits
12
14,463
14,116
Distribution expenses
(423,241)
(370,478)
Administrative expenses
(86,405)
(77,682)
Finance costs
2
(34,562)
(23,019)
Other items of income/(expense)
2
(25,645)
(8,913)
Profit before income tax expense
67,834
138,868
Income tax expense
3
(17,986)
(33,028)
Net profit for the period
49,848
105,840
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign operations
2,198
636
Net gains on cash flow hedges
(950)
(594)
Items that will not be reclassified to profit and loss
Changes in the fair value of financial assets at fair value through other comprehensive income
13
(16,785)
(6,251)
Other comprehensive profit/(loss) for the period, net of tax
(15,537)
(6,209)
Total comprehensive income for the period
34,311
99,631
Profit for the period is attributable to:
Non-controlling interest
4,768
5,000
Owners of the parent
45,080
100,840
Net profit for the period
49,848
105,840
Total comprehensive income for the period is attributable to:
Non-controlling interest
4,768
5,000
Owners of the parent
29,543
94,631
Total comprehensive income for the period
34,311
99,631
Reported operations
Basic earnings per share (cents per share)
4
28.6¢
64.4¢
Diluted earnings per share (cents per share)
4
28.6¢
64.4¢
The accompanying notes form an integral part of this consolidated statement of comprehensive income.
Elders Limited Annual Financial Report
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2024
73
2024
2023
Note
$000
$000
Current assets
Cash and cash equivalents
15
40,210
21,483
Trade and other receivables
5
895,326
738,169
Livestock
6
47,436
49,120
Inventory
7
399,538
491,660
Total current assets
1,382,510
1,300,432
Non current assets
Other financial assets
13
15,824
32,586
Equity accounted investments
12
50,315
47,383
Property, plant and equipment
9
93,175
70,583
Right-of-use assets
10
246,574
199,216
Intangibles
11
538,066
409,314
Deferred tax assets
3
-
15,049
Total non current assets
943,954
774,131
Total assets
2,326,464
2,074,563
Current liabilities
Trade and other payables
8
654,158
636,747
Interest bearing loans and borrowings
16
295,000
265,814
Lease liabilities
10
52,718
36,041
Current tax payable
3
1,067
149
Provisions
14
73,748
72,183
Total current liabilities
1,076,691
1,010,934
Non current liabilities
Other payables
8
12,990
9,469
Interest bearing loans and borrowings
16
182,000
15,356
Lease liabilities
10
200,998
167,583
Deferred tax liabilities
3
2,845
-
Provisions
14
5,751
4,386
Total non current liabilities
404,584
196,794
Total liabilities
1,481,275
1,207,728
Net assets
845,189
866,835
Equity
Contributed equity
18
1,655,976
1,643,419
Reserves
19
(53,421)
(37,387)
Retained earnings
(761,831)
(743,551)
Total parent entity equity interest
840,724
862,481
Non-controlling interests
4,465
4,354
Total equity
845,189
866,835
The accompanying notes form an integral part of this consolidated statement of financial position.
Elders Limited Annual Financial Report
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 September 2024
74
2024
2023
Note
$000
$000
Cash flows from operating activities
Receipts from customers (inclusive of GST)
11,341,038
12,037,814
Payments to suppliers and employees (inclusive of GST)
(11,237,494)
(11,852,325)
Dividends received
12
14,099
14,330
Interest and other finance costs paid
(31,116)
(22,060)
Income tax (paid)
(3,579)
(8,516)
Net operating cash flows
15
82,948
169,243
Cash flows from investing activities
Payments for property, plant and equipment
9
(28,262)
(30,099)
Payments for equity accounted investments
12
(2,568)
-
Payments for intangibles
11
(19,100)
(17,663)
Payments for acquisitions through business combinations, net of cash acquired
23
(103,304)
(47,022)
Proceeds from sale of property, plant and equipment
2,317
1,206
Acquisition of other financial assets
13
(23)
(38,568)
Net investing cash flows
(150,940)
(132,146)
Cash flows from financing activities
Purchase of shares
(677)
(11,047)
Net (repayment)/proceeds of borrowings
195,830
101,960
Payments of lease liabilities
(51,321)
(44,526)
Dividends paid
(52,456)
(73,337)
Partnership profit distributions/dividends paid
20
(4,657)
(6,504)
Net financing cash flows
86,719
(33,454)
Net increase/(decrease) in cash held
18,727
3,643
Cash at the beginning of the financial period
21,483
17,840
Cash at the end of the financial period
15
40,210
21,483
The accompanying notes form an integral part of this consolidated statement of cash flows.
Elders Limited Annual Financial Report
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 September 2024
75
Issued capital
Reserves
Retained
earnings
Non-controlling
interest
Total equity
$000
$000
$000
$000
$000
As at 1 October 2023
1,643,419
(37,387)
(743,551)
4,354
866,835
Profit for the period
-
-
45,080
4,768
49,848
Other comprehensive income/(loss):
Exchange differences on translation of
foreign operations
-
2,198
-
-
2,198
Cash flow hedge and fair value of derivatives, net
of tax
-
(950)
-
-
(950)
Changes in the fair value of financial assets at fair
value through other comprehensive income
-
(16,785)
-
-
(16,785)
Total comprehensive income/(loss) for the period
-
(15,537)
45,080
4,768
34,311
Transactions with owners in their capacity as owners:
Transfer of unvested employee equity benefits reserve
to retained earnings
-
(955)
955
-
-
Dividends paid
-
-
(52,456)
-
(52,456)
Dividend reinvestment plan
11,859
-
(11,859)
-
-
Partnership profit distributions/dividends paid
-
-
-
(4,657)
(4,657)
Cost of share based payments
-
1,833
-
-
1,833
Transfer of vested employee equity benefits reserve to
share capital
1,375
(1,375)
-
-
-
Shares purchased
(677)
-
-
-
(677)
As at 30 September 2024
1,655,976
(53,421)
(761,831)
4,465
845,189
As at 1 October 2022
1,646,630
(27,705)
(764,066)
5,858
860,717
Profit for the period
-
-
100,840
5,000
105,840
Other comprehensive income/(loss):
Exchange differences on translation of
foreign operations
-
636
-
-
636
Cash flow hedge and fair value of derivatives, net
of tax
-
(594)
-
-
(594)
Changes in the fair value of financial assets at fair
value through other comprehensive income
-
(6,251)
-
-
(6,251)
Total comprehensive income/(loss) for the period
-
(6,209)
100,840
5,000
99,631
Transactions with owners in their capacity as owners:
Dividends paid
-
-
(75,043)
-
(75,043)
Dividend reinvestment plan
4,762
-
(4,762)
-
-
Other movements in retained earnings
-
-
(520)
-
(520)
Partnership profit distributions/dividends paid
-
-
-
(6,504)
(6,504)
Cost of share based payments
-
(399)
-
-
(399)
Transfer of vested employee equity benefits reserve to
share capital
3,074
(3,074)
-
-
-
Shares purchased
(11,047)
-
-
-
(11,047)
As at 30 September 2023
1,643,419
(37,387)
(743,551)
4,354
866,835
The accompanying notes form an integral part of this consolidated statement of changes in equity.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
ABOUT THIS REPORT
76
Corporate information
The consolidated financial report of Elders Limited for the year ended 30 September 2024 was authorised for issue on 18 November 2024 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 and fair value of financial assets at fair value through
other comprehensive income 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. 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 rearranged 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 2024.
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.
Critical 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. Management bases its judgements and estimates on historical experience and on
various other factors it believes to be reasonable under the circumstances, the result of which forms the basis of the carrying value of assets
and liabilities that are not readily apparent from other sources.
Management has identified the following key accounting policies for which critical judgement, estimates and assumptions are made. 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
Inventory
Note 7
Accounting for rebates
Note 9
Impairment of non-financial assets other than brand names and goodwill
Note 10
Accounting for leases
Note 11
Impairment of brand names and goodwill
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
ABOUT THIS REPORT
77
Impacts of climate change
Elders has considered 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 materially change the critical accounting, estimates, 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 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 Statement of Comprehensive Income.
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 2024 financial year have taken into consideration Elders’ current climate-related
risk assessments.
Insurance
The change in climate might result in more regular and intense climate events which can have a significant impact on Elders’ operations with
business interruption, accident or damages. This may increase Elders’ insurance costs due to higher premium rates or Elders’ costs with more
frequent uninsurable events.
Changes to accounting policies
(i) New and Revised Accounting Standards and Interpretations
A number of amendments to standards and interpretations became operative for the financial year ended 30 September 2024. None of these
have materially impacted Elders and its policies.
(ii) Accounting Standards and Interpretations and Amendments issued but not yet effective
Elders has not early adopted any standards, interpretations or amendments that has been issued but are not yet effective. Elders has assessed
the upcoming standards and 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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
ABOUT THIS REPORT
78
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 critical accounting judgements, estimates and
assumptions 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
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.
Capital Employed
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.
Net Debt
Provides additional information regarding financial statement lines that are most relevant to explaining Elders’ net debt position
and borrowings for the period.
Risk Management
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.
Equity
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.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
GROUP PERFORMANCE – NOTE 1: SEGMENT INFORMATION
79
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 Managing Director and 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 Managing Director and Chief Executive Officer on at least a monthly
basis. Elders operates only within Australia.
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 Australian Independent Rural Retailers (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 diversified business incorporating grain-fed beef distribution, grass-fattening
operations, cow manure processing and irrigated feed crop production in Quirindi, New South Wales.
• 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.
Branch
Network
Wholesale
Products
Feed and
Processing
Services
Corporate
Services and
Other Costs
Total
$000
$000
$000
$000
$000
2024
Sale of goods and biological assets
2,230,708
360,813
138,217
1,150
2,730,888
Debtor interest associated with sales
12,468
-
-
-
12,468
Commission revenue
387,934
-
-
-
387,934
Sales revenue
2,631,110
360,813
138,217
1,150
3,131,290
Equity accounted profits
14,463
-
-
-
14,463
Earnings before interest, tax, depreciation
and amortisation
219,683
41,937
11,559
(97,335)
175,844
Depreciation and amortisation
(9,669)
(4,981)
(1,364)
(1,624)
(17,638)
Depreciation on right-of-use assets
(42,842)
(7,382)
(831)
(4,755)
(55,810)
Segment result
167,172
29,574
9,364
(103,714)
102,396
Interest expense
(26,079)
Unwinding discount expense in regards to liabilities
(2,653)
Fair value adjustments of financial instruments
(793)
Interest on lease liabilities
(5,037)
Finance costs
(34,562)
Profit before income tax benefit/(expense)
67,834
Segment assets
1,731,734
329,815
99,859
165,056
2,326,464
Segment liabilities
830,877
116,666
12,945
520,787
1,481,275
Net assets
900,857
213,149
86,914
(355,731)
845,189
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
GROUP PERFORMANCE – NOTE 1: SEGMENT INFORMATION
80
Branch
Network
Wholesale
Products
Feed and
Processing
Services
Corporate
Services and
Other Costs
Total
$000
$000
$000
$000
$000
2023
Sale of goods and biological assets
2,389,665
391,971
181,660
1,271
2,964,567
Debtor interest associated with sales
9,481
-
-
-
9,481
Commission revenue
347,372
-
-
-
347,372
Sales revenue
2,746,518
391,971
181,660
1,271
3,321,420
Equity accounted profits
14,116
-
-
-
14,116
Earnings before interest, tax, depreciation
and amortisation
250,758
42,518
7,890
(81,667)
219,499
Depreciation and amortisation
(5,803)
(4,395)
(1,223)
(1,196)
(12,617)
Depreciation on right-of-use assets
(35,696)
(5,974)
(591)
(2,734)
(44,995)
Segment result
209,259
32,149
6,076
(85,597)
161,887
Interest expense
(17,934)
Unwinding discount expense in regards to liabilities
(959)
Fair value adjustments of financial instruments
(758)
Interest on lease liabilities
(3,368)
Finance costs
(23,019)
Profit before income tax benefit/(expense)
138,868
Segment assets
1,471,715
363,803
88,667
150,378
2,074,563
Segment liabilities
698,309
122,120
11,450
375,849
1,207,728
Net assets
773,406
241,683
77,217
(225,471)
866,835
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
GROUP PERFORMANCE – NOTE 2: REVENUE AND EXPENSES
81
2024
2023
$000
$000
Sales revenue
Sale of goods and biological assets
2,730,888
2,964,567
Debtor interest associated with sales
12,468
9,481
Commission revenue
387,934
347,372
Total sales revenue
3,131,290
3,321,420
Other items of income/(expense)
Acquisition, divestment and other closure costs
(7,199)
1,504
Restructuring initiatives
(6,093)
-
Platform and system modernisation
(5,562)
(5,438)
Business transformation costs
(4,807)
(4,483)
Other costs
(1,984)
(496)
Total other items of income/(expense)
(25,645)
(8,913)
Finance costs
Interest expense
(26,079)
(17,934)
Unwinding discount expense in regards to liabilities
(2,653)
(959)
Fair value adjustments of financial instruments
(793)
(758)
Interest on lease liabilities
(5,037)
(3,368)
Total finance costs
(34,562)
(23,019)
Specific expenses: depreciation and amortisation
Depreciation and amortisation
(17,638)
(12,617)
Depreciation on right-of-use assets
(55,810)
(44,995)
Total depreciation and amortisation
(73,448)
(57,612)
Specific expenses: employee benefit expense
Salaries, wages and incentives
(265,949)
(233,366)
Superannuation and other employee costs
(55,194)
(51,934)
Share based payments
(2,087)
651
Total employee benefit expense
(323,230)
(284,649)
Low value assets lease expenditure
(2,891)
(2,609)
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 critical 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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
GROUP PERFORMANCE – NOTE 3: INCOME TAX
82
Critical 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. 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:
2024
2023
$000
$000
Income statement
Current income tax expense
(21,279)
(19,310)
Adjustments in respect of current income tax of prior periods
115
(390)
Deferred income tax benefit
3,178
(13,328)
Income tax expense reported in the statement of comprehensive income
(17,986)
(33,028)
(b) Reconciliation of income tax expense applicable to accounting profit/(loss) before income tax at the statutory income tax rate to income tax
expense at Elders’ effective income tax rate is as follows:
Accounting profit before tax
67,834
138,868
Income tax expense at 30% (2023: 30%)
(20,350)
(41,660)
Adjustments in respect of current income tax of prior periods
115
(390)
Share of equity accounted profits
4,340
4,235
Non assessable profits
423
2,852
Non deductible other expenses
(1,968)
(986)
Reversals of impairment
-
2,954
Other
(546)
(33)
Income tax expense as reported in the statement of comprehensive income
(17,986)
(33,028)
Current tax payable
1,067
149
Capital losses not recognised as an asset
Elders held $107.3 million of capital losses (2023: $103.5 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)
16,394
33,518
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 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 2024. The tax transparency
report has not been audited and does not form part of the Financial Report.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
GROUP PERFORMANCE – NOTE 3: INCOME TAX
83
(c) Major components of deferred income tax:
Statement of
Financial Position
Movement
2024
2023
2024
2023
$000
$000
$000
$000
Deferred income tax assets
Losses available to offset against future taxable income
16,394
33,518
(17,124)
(16,410)
Lease liabilities
75,850
61,087
14,763
24,125
Provision for employee entitlements
24,656
23,005
1,651
(6,101)
Other provisions
3,242
2,719
523
(2,631)
Capitalised expenses
1,654
499
1,155
(3,318)
Other
212
338
(126)
(500)
Gross deferred income tax assets
122,008
121,166
842
(4,835)
Deferred income tax liabilities
Right-of-use assets
(73,764)
(59,681)
(14,083)
(23,901)
Intangibles
(40,076)
(36,004)
(4,072)
756
Plant and equipment temporary differences
(6,256)
(6,763)
507
(3,223)
Inventory
(2,621)
(2,302)
(319)
(181)
Other
(2,136)
(1,367)
(769)
1,027
Gross deferred income tax liabilities
(124,853)
(106,117)
(18,736)
(25,522)
Net deferred tax asset/(liability)
(2,845)
15,049
Movement in net deferred tax asset
(17,894)
(30,357)
Deferred income tax benefit recognised in the statement of
comprehensive income
(3,178)
13,328
Utilisation of booked tax losses
16,667
16,904
Deferred income tax assets/(liabilities) recognised for acquisitions of
businesses (principally related to acquired intangibles)
4,813
380
Deferred income tax (expense)/benefit recognised in equity
(408)
(255)
17,894
30,357
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.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
GROUP PERFORMANCE – NOTE 4: EARNINGS PER SHARE
84
2024
2023
Weighted average number of ordinary shares (‘000) used in calculating basic EPS
157,353
156,477
Dilutive performance rights (‘000)
-
-
Adjusted weighted average number of ordinary shares used in calculating dilutive EPS (‘000)
157,353
156,477
For rights that vest under the Long-Term Incentive Plan, Elders will, unless the Elders Board subsequently determine otherwise, purchase the
required shares on the market, rather than issuing new shares, hence there is no dilution from the recognition of these performance rights.
The following reflects the net profit/(loss) and share data used in the calculations of earnings per share (EPS):
2024
2023
$000
$000
Reported operations
Net profit attributable to members (after tax)
45,080
100,840
Reported operations earnings per share:
Basic earnings per share (cents per share)
28.6¢
64.4¢
Diluted earnings per share (cents per share)
28.6¢
64.4¢
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 rights issued under a Long-Term
Incentive Plan into ordinary shares.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
WORKING CAPITAL – NOTE 5: RECEIVABLES
85
2024
2023
$000
$000
Current
Trade debtors
805,279
664,989
Loss allowance
(4,947)
(4,580)
800,332
660,409
Amounts receivable from equity accounted investments
3,264
10,203
Livestock deferred receivables
72,876
42,146
Prepayments
14,117
12,046
Other receivables
4,737
13,365
Total current receivables
895,326
738,169
Included in trade debtors is $73.6 million (2023: $60.2 million) of debt, which is covered by trade credit insurance on various terms
and conditions.
Trade debtors are generally on 30 to 90 day terms with the exception of Livestock debtors which are generally on 10 day terms. In some
instances, deferred terms in excess of 90 days are offered on commercial terms agreed by Elders.
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:
Current
1-30 days
past due
31-60 days
past due
61-90 days
past due
+91 days
past due
Total
$000
$000
$000
$000
$000
$000
2024
Expected loss rate
< 1%
< 1%
< 1%
< 1%
13%
Gross carrying amount
640,131
102,874
15,879
11,274
35,121
805,279
Loss allowance
384
62
44
28
4,429
4,947
2023
Expected loss rate
< 1%
< 1%
< 1%
< 1%
22%
Gross carrying amount
540,668
81,488
16,553
7,716
18,564
664,989
Loss allowance
301
105
49
7
4,118
4,580
Reconciliation of loss allowances for trade debtors at beginning and end of period:
2024
2023
$000
$000
Opening loss allowance
4,580
7,034
Increase/(decrease) in loss allowance recognised in profit or loss
1,651
(169)
Trade debtors (written off)/reversal
(1,284)
(2,285)
Closing loss allowance
4,947
4,580
Related party receivables
Refer to note 26 for terms and conditions of related party receivables, including from equity accounted investments.
Fair value and credit risk
Due to the short-term nature of trade and other current receivables, their carrying value is assumed to approximate their fair value. For other
receivables, the carrying amount is not materially different to their fair values. The maximum exposure to credit risk is the fair value of each class
of receivables. Details regarding credit risk exposure are disclosed in note 17.
Foreign exchange and interest rate risk
Details regarding the foreign exchange and interest rate risk exposure are disclosed in note 17, including those relating to derivative
related balances.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
WORKING CAPITAL – NOTE 5: RECEIVABLES
86
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
2024
2023
$000
$000
Current
Total livestock
47,436
49,120
Reconciliation of fair value of livestock at beginning and end of period:
Opening fair value
49,120
73,371
Purchases
106,914
148,363
Cost of sales
(109,474)
(172,775)
Fair value increment/(decrement)
876
161
Closing fair value
47,436
49,120
At balance date, 21,631 head of cattle (2023: 22,057) are included in livestock. This represents cattle held in Australia for feedlotting and grass
feeding 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 to 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 sales 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 diseases and other natural forces. Elders has 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.
Material changes in any of the significant unobservable valuation inputs for feedlot cattle in isolation would result in significantly higher or
lower fair value measurement.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
WORKING CAPITAL – NOTE 7: INVENTORY
87
Critical Accounting Judgements, Estimates and Assumptions
Accounting for inventory
Inventory is valued at the lower of cost or net realisable value. The net realisable value calculation includes management judgements and
estimates. A significant change in the assumptions and judgement used in the calculation of provision for obsolescence may result in
material changes in the carrying values of the inventory.
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.
2024
2023
$000
$000
Current
Retail and Wholesale
391,463
487,640
Other
10,172
8,117
Provision for obsolescence
(2,097)
(4,097)
Total inventory
399,538
491,660
Inventory write-downs recognised as an expense totalled $3.1 million (2023: $1.7 million).
Accounting Policy
Costs are assigned to individual items of inventory predominantly on the basis of weighted average cost. Net realisable value is the
estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale.
Supplier rebates received are recognised as a reduction in the cost of inventory and are recorded as a reduction in cost of sales when the
inventory is sold.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
WORKING CAPITAL – NOTE 8: TRADE AND OTHER PAYABLES
88
2024
2023
$000
$000
Current
Trade creditors
535,687
514,726
Payables associated with supplier financing arrangements
32,895
41,178
Other creditors and accruals
85,524
79,122
Payables to associated companies
52
1,721
654,158
636,747
Non current
Other creditors and accruals
12,990
9,469
Total trade and other payables
667,148
646,216
Interest rate, foreign exchange and liquidity risk
Information regarding interest rate, foreign exchange and liquidity risk exposure is set out in note 17, including those relating to derivative
forward contracts.
Accounting Policy
Trade and other payables are carried at amortised cost and due to their short-term nature they are not discounted. The carrying amount
of trade and other payables are assumed to be the same as their fair values. They represent liabilities for goods and services provided to
Elders prior to the end of the financial year that remain unpaid and arise when Elders becomes obliged to make future payments in respect
of the purchase of these goods and services. The amounts are unsecured and are usually paid within supplier terms.
Financial guarantees
Financial guarantee contracts issued by Elders are those contracts that require a payment to be made to reimburse the holder for a loss
it incurs because the specific debtor fails to make a payment when due in accordance with the terms of the debt instrument. Financial
guarantee contracts are recognised initially at fair value, adjusted for transaction costs that are directly attributable to the issuance of
the guarantee. Subsequently, the liability is measured at the higher of the best estimate of the expenditure required to settle the present
obligation at the reporting date and the amount recognised less cumulative amortisation. Information regarding financial guarantees is set
out in note 25.
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 2024, 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.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
CAPITAL EMPLOYED – NOTE 9: PROPERTY, PLANT AND EQUIPMENT
89
Critical 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
Assets under
construction
Total
Note
$000
$000
$000
$000
$000
$000
2024
Carrying amount at beginning of period
7,204
11,012
5,887
25,148
21,332
70,583
Additions
165
5,071
1,349
8,787
12,890
28,262
Additions through business combinations
23
-
-
508
2,254
-
2,762
Disposals
(13)
(227)
(63)
(531)
-
(834)
Depreciation expense
-
(888)
(1,826)
(5,298)
-
(8,012)
Other
-
-
-
414
-
414
Transfers from assets under construction
-
-
-
16,885
(16,885)
-
Carrying amount at end of period
7,356
14,968
5,855
47,659
17,337
93,175
Cost
7,356
26,202
21,381
82,726
17,337
155,002
Accumulated depreciation and impairment
-
(11,234)
(15,526)
(35,067)
-
(61,827)
7,356
14,968
5,855
47,659
17,337
93,175
2023
Carrying amount at beginning of period
3,569
11,456
5,076
18,297
8,555
46,953
Additions
3,667
254
2,104
10,417
13,657
30,099
Additions through business combinations
23
-
-
15
444
-
459
Disposals
(32)
-
(37)
(821)
-
(890)
Depreciation expense
-
(781)
(1,299)
(3,643)
-
(5,723)
Impairment/writedown expense
-
-
-
(331)
-
(331)
Transfers from assets under construction
-
83
42
755
(880)
-
Other
-
-
(14)
30
-
16
Carrying amount at end of period
7,204
11,012
5,887
25,148
21,332
70,583
Cost
7,204
21,359
19,587
54,275
21,332
123,757
Accumulated depreciation and impairment
-
(10,347)
(13,700)
(29,127)
-
(53,174)
7,204
11,012
5,887
25,148
21,332
70,583
All property, plant and equipment is pledged as security, refer to note 16 for interest bearing loans and borrowings.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
CAPITAL EMPLOYED – NOTE 9: PROPERTY, PLANT AND EQUIPMENT
90
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:
Life
Method
Buildings
50 years
Straight line
Leasehold improvements
Lease term
Straight line
Plant and equipment
3 to 10 years
Straight line
Plant and equipment - Network infrastructure
5 to 25 years
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.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
CAPITAL EMPLOYED – NOTE 10: LEASES
91
Critical 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:
Properties
Motor vehicles
Equipment
Total
$000
$000
$000
$000
2024
Carrying amount at beginning of period
165,472
33,688
56
199,216
Additions
35,373
19,898
1,140
56,411
Depreciation expense
(39,979)
(15,428)
(403)
(55,810)
Lease modifications and reassessments
48,073
(1,260)
(56)
46,757
Carrying amount at end of period
208,939
36,898
737
246,574
2023
Carrying amount at beginning of period
99,072
19,953
279
119,304
Additions
52,530
20,569
-
73,099
Depreciation expense
(29,155)
(15,617)
(223)
(44,995)
Lease modifications and reassessments
43,025
8,783
-
51,808
Carrying amount at end of period
165,472
33,688
56
199,216
Reconciliation of carrying amounts of lease liabilities at beginning and end of period:
2024
2023
$000
$000
Carrying amount at beginning of period
203,624
123,543
Additions
56,411
73,099
Interest expense
5,037
3,368
Lease modifications and reassessments
45,002
51,508
Repayments of principal and interest
(56,358)
(47,894)
Carrying amount at end of period
253,716
203,624
Lease liabilities of which are:
●
Current lease liabilities
52,718
36,041
●
Non current lease liabilities
200,998
167,583
253,716
203,624
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
CAPITAL EMPLOYED – NOTE 10: LEASES
92
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.
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.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
CAPITAL EMPLOYED – NOTE 11: INTANGIBLES
93
Critical 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 and
loan books
Brand names
Distribution
rights
Customer
intangibles
Software
assets
Other
Total
$000
$000
$000
$000
$000
$000
$000
$000
2024
Carrying amount at beginning
of period
231,691
21,308
80,993
23,000
33,791
15,700
2,831
409,314
Additions
-
-
-
-
-
18,703
397
19,100
Additions through
business combinations
89,186
29,595
338
-
-
-
270
119,389
Amortisation
-
(4,138)
-
-
(3,593)
(1,440)
(455)
(9,626)
Other
(111)
-
-
-
-
-
-
(111)
Carrying amount at end
of period
320,766
46,765
81,331
23,000
30,198
32,963
3,043
538,066
Cost
320,766
59,816
81,331
23,000
47,620
34,626
5,615
572,774
Accumulated amortisation
and impairment
-
(13,051)
-
-
(17,422)
(1,663)
(2,572)
(34,708)
320,766
46,765
81,331
23,000
30,198
32,963
3,043
538,066
2023
Carrying amount at beginning
of period
199,254
15,925
80,993
23,000
37,385
4,235
3,528
364,320
Additions
2,017
3,958
-
-
-
11,688
-
17,663
Additions through
business combinations
32,437
1,791
-
-
-
-
-
34,228
Disposals
-
-
-
-
-
-
(3)
(3)
Amortisation
-
(2,383)
-
-
(3,594)
(223)
(694)
(6,894)
Carrying amount at end
of period
233,708
19,291
80,993
23,000
33,791
15,700
2,831
409,314
Cost
231,691
30,221
80,993
23,000
47,620
15,923
4,948
434,396
Accumulated amortisation
and impairment
-
(8,913)
-
-
(13,829)
(223)
(2,117)
(25,082)
231,691
21,308
80,993
23,000
33,791
15,700
2,831
409,314
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, $240.0 million (2023: $150.7 million) of goodwill, $13.2 million (2023:
$12.8 million) of brand names and $23.0 million (2023: $23.0 million) of distribution rights were allocated for impairment testing. For Wholesale
Products, $81.0 million (2023: $81.0 million) of goodwill and $7.6 million (2023: $7.8 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.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
CAPITAL EMPLOYED – NOTE 11: INTANGIBLES
94
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 11.2% pre-tax
(2023: 11.4% 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 CGU is greater than the carrying values at
30 September 2024. Carrying values are not sensitive to a reasonable change in discount rate of +/- 1% and headroom remains.
The calculation of value in use for cash generating units was based on the following key assumptions:
Gross margin
• 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
Gross margin assumptions are subject to risk factors associated with the agriculture industry, many of which are beyond the control of Elders
such as weather and rainfall conditions, commodity prices and international trade relations. These factors are highly dependent on the outlook
and prospects of the Australian farm sector, and the values and volume growth in internationally traded livestock and fibre.
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 2025-2027 budget. Growth rate of 2-3% for years 4 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 Systems 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
Relates to other definite life intangibles carried at cost less accumulated amortisation and impairment losses and indefinite life assets
carried at cost less accumulated impairment losses. Definite intangibles are amortised over their useful lives of up to 5 years and tested for
impairment whenever there is an indicator of impairment.
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.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
CAPITAL EMPLOYED – NOTE 12: EQUITY ACCOUNTED INVESTMENTS
95
Balance
date
Ownership interest
2024
2023
%
%
AuctionsPlus Pty Ltd
30-Jun
50
50
Elders Insurance (Underwriting Agency) Pty Ltd
31-Dec
20
20
TLX Pty Ltd
31-Dec
50
-
Clear Grain Pty Ltd
30-Jun
30
30
AgCrest Holdings Pty Ltd
30-Jun
33
33
AgCrest Land Holdings Pty Ltd
30-Jun
33
33
Consolidated entity
investment
Contribution to
net profit
Dividends received
2024
2023
2024
2023
2024
2023
$000
$000
$000
$000
$000
$000
AuctionsPlus Pty Ltd
1,853
1,395
458
316
-
1,426
Elders Insurance (Underwriting Agency) Pty Ltd
43,994
43,596
13,597
12,917
13,199
12,304
TLX Pty Ltd
1,753
-
(47)
-
-
-
Clear Grain Pty Ltd
1,908
2,340
468
920
900
600
AgCrest Holdings Pty Ltd
153
64
(11)
(37)
-
-
AgCrest Land Holdings Pty Ltd
654
(12)
(2)
-
-
-
Equity accounted investments
50,315
47,383
14,463
14,116
14,099
14,330
All equity accounted investments are Australian resident companies. Summary financial information for equity accounted investees is
as follows:
Profit/(loss) after
income tax
Assets
Liabilities
$000
$000
$000
2024
AuctionsPlus Pty Ltd
915
9,164
(4,886)
Elders Insurance (Underwriting Agency) Pty Ltd
67,983
114,793
(103,621)
TLX Pty Ltd
(93)
3,763
(243)
Clear Grain Pty Ltd
1,559
8,034
(3,912)
AgCrest Holdings Pty Ltd
(38)
149
(241)
AgCrest Land Holdings Pty Ltd
(5)
2,992
(250)
Total
70,321
138,895
(113,153)
2023
AuctionsPlus Pty Ltd
630
6,715
(3,511)
Elders Insurance (Underwriting Agency) Pty Ltd
64,591
128,670
(119,441)
Clear Grain Pty Ltd
3,068
19,609
(13,572)
AgCrest Holdings Pty Ltd
(124)
148
-
AgCrest Land Holdings Pty Ltd
-
761
(14)
Total
68,165
155,903
(136,538)
Elders invested $0.7 million (2023: Nil) and $0.1m (2023: Nil) in Agcrest Land Holdings Pty Ltd and Agcrest Holdings Pty Ltd respectively with
ownership interest remained at 33% and acquired 50% equity stake in TLX Pty Ltd for $1.8 million (2023: Nil).
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
CAPITAL EMPLOYED – NOTE 12: EQUITY ACCOUNTED INVESTMENTS
96
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.
CAPITAL EMPLOYED – NOTE 13: OTHER FINANCIAL ASSETS
Accounting Policy
Financial assets at fair value through other comprehensive income (FVOCI) comprise equity securities which are not held for trading
and which Elders has irrevocably elected at initial recognition to recognise in this category. These are strategic investments and Elders
considers this classification to be more relevant.
2024
2023
$000
$000
PGG Wrightson Limited
15,555
32,317
Others
269
269
Total other financial assets
15,824
32,586
Gains/(losses) recognised in other comprehensive income
(16,785)
(6,251)
During the period, Elders purchased equity interests in PGG Wrightson Limited (NZX:PGW) for a total consideration of $0.02 million (2023:
$38.6 million).
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
CAPITAL EMPLOYED – NOTE 14: PROVISIONS
97
Reconciliation of carrying amounts at beginning and end of period:
Employee benefits
Restructuring
provisions
Other
Total
$000
$000
$000
$000
2024
As at beginning of period
72,933
126
3,510
76,569
Arising during year
52,402
3,040
-
55,442
Utilised
(54,659)
(63)
(3,271)
(57,993)
Discount rate adjustment
2,653
-
-
2,653
Provisions arising from entities acquired
2,828
-
-
2,828
76,157
3,103
239
79,499
Disclosed as:
Current
70,406
3,103
239
73,748
Non current
5,751
-
-
5,751
Total
76,157
3,103
239
79,499
2023
As at beginning of period
92,415
2,033
3,777
98,225
Arising during year
46,304
-
5,964
52,268
Utilised
(67,293)
(1,907)
(5,699)
(74,899)
Unused amounts reversed
-
-
(532)
(532)
Discount rate adjustment
959
-
-
959
Provisions arising from entities acquired
548
-
-
548
72,933
126
3,510
76,569
Disclosed as:
Current
68,547
126
3,510
72,183
Non current
4,386
-
-
4,386
Total
72,933
126
3,510
76,569
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
CAPITAL EMPLOYED – NOTE 14: PROVISIONS
98
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.
Others
(i) 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.
(ii) 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.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
NET DEBT – NOTE 15: CASH FLOW STATEMENT RECONCILIATION
99
(a) Reconciliation of net profit after tax to net cash flows from operations
2024
2023
$000
$000
Profit after income tax expense
49,848
105,840
Adjustments for non cash items:
Depreciation and amortisation
73,448
57,612
Unwinding of discount in regards to payables
2,653
959
Fair value adjustments of financial instruments
793
758
Equity accounted profits
(14,463)
(14,116)
Dividends from equity accounted investments
14,099
14,330
Other fair value adjustments
(876)
(1,582)
Impairments of property, plant and equipment
-
331
Doubtful debts
1,651
(169)
Employee entitlements
55,055
46,304
Other provisions
3,040
5,432
Net profit/(loss) on sale of non current assets
(1,483)
(316)
Net tax movements
14,407
24,512
Other non cash items
1,833
(651)
Total non cash items
150,157
133,404
Total after non cash items
200,005
239,244
●
(Increase)/decrease in receivables and other assets
(149,513)
113,936
●
(Increase)/decrease in inventories
93,631
(2,498)
●
Increase/(decrease) in payables and provisions
(61,175)
(181,439)
Net cash flows from operating activities
82,948
169,243
(b) Cash and cash equivalents
Cash at bank and in hand
40,210
21,483
(c) Net debt reconciliation
Cash and cash equivalents
40,210
21,483
Borrowings - repayment within one year
(295,000)
(265,814)
Borrowings - repayment after one year
(182,000)
(15,356)
Lease liabilities
(253,716)
(203,624)
Net debt
(690,506)
(463,311)
Cash and liquid investments
40,210
21,483
Gross debt - fixed interest rates
(253,716)
(203,624)
Gross debt - variable interest rates
(477,000)
(281,170)
Net debt
(690,506)
(463,311)
Non-cash investing and financing activities disclosed in other notes are:
• acquisition of right-of-use assets – note 10
• dividend distributions through the issue of shares under the dividend reinvestment plan – note 20
• shares issued to eligible executives under Elders Long-Term Incentive Plan – note 27
At balance date, Elders held $61.0 million (2023: $41.2 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.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
NET DEBT – NOTE 16: INTEREST BEARING LOANS AND BORROWINGS
100
2024
2023
$000
$000
Current
Secured loans
-
-
Trade receivables and other working capital funding
295,000
265,814
295,000
265,814
Non current
Secured loans
182,000
15,356
Total current and non current
477,000
281,170
Under the terms of the group syndicated facilities which are subject to change over time, Elders is required to comply with the following
financial covenants at the end of each annual and interim reporting period:
• the leverage ratio must be less than 2.5 times
• the interest cover must be more than 3.5 times
• the net worth must be more than $300 million
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 2024, $7.6 million had been
issued by the bank (2023: $5.0 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) except debtors carried
out for trade receivables funding. Trade receivables and other working capital funding is secured over the underlying debtors. This facility
expires in December 2025.
Elders notes that whilst the scheduled termination date of the debtor financing facility is currently 31 December 2025, the liability is classified as
current as Elders does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, pursuant
to AASB 101 Presentation of Financial Statements.
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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
RISK MANAGEMENT – NOTE 17: FINANCIAL INSTRUMENTS
101
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 and long-term debt obligations. The level of debt is disclosed in note 16.
At 30 September 2024 there was nil value of secured loans hedged under a floating to fixed arrangement (2023: nil), meaning at balance date,
Elders had the following mix of financial assets and liabilities exposed to Australian variable interest rate risk:
2024
2023
$000
$000
Financial assets
Cash and cash equivalents
40,210
21,483
Financial liabilities
Interest bearing loans and liabilities
(477,000)
(281,170)
Net exposure
(436,790)
(259,687)
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
(4,368)
(2,597)
- 100 basis points
4,368
2,597
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
RISK MANAGEMENT – NOTE 17: FINANCIAL INSTRUMENTS
102
(b) Liquidity risk
Liquidity risk arises from Elders’ financial liabilities and the subsequent ability to meet 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. As at 30 September 2024, Elders has $90.9 million (2023: $314.2 million) of undrawn facilities.
(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 2024. 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
6 months
or less
6-12 months
More than 1 year
$000
$000
$000
$000
$000
2024
Non-derivative financial assets:
Trade and other receivables
900,273
900,273
900,273
-
-
900,273
900,273
900,273
-
-
Non-derivative financial liabilities:
Interest bearing loans and borrowings
(477,000)
(501,995)
(310,458)
-
(191,537)
Lease liabilities
(253,716)
(258,215)
(28,698)
(28,698)
(200,819)
Trade and other payables
(667,148)
(667,148)
(638,565)
(15,593)
(12,990)
(1,397,864)
(1,427,358)
(977,721)
(44,291)
(405,346)
Net inflow/(outflow)
(497,591)
(527,085)
(77,448)
(44,291)
(405,346)
2023
Non-derivative financial assets:
Trade and other receivables
742,749
742,749
742,749
-
-
742,749
742,749
742,749
-
-
Non-derivative financial liabilities:
Interest bearing loans and borrowings
(281,170)
(281,237)
(265,814)
-
(15,423)
Lease liabilities
(203,624)
(208,712)
(15,759)
(23,716)
(169,237)
Trade and other payables
(646,166)
(646,165)
(635,816)
(880)
(9,469)
(1,130,960)
(1,136,114)
(917,389)
(24,596)
(194,129)
Net inflow/(outflow)
(388,211)
(393,365)
(174,640)
(24,596)
(194,129)
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
RISK MANAGEMENT – NOTE 17: FINANCIAL INSTRUMENTS
103
(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
(2023: 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:
2024
2023
$000
$000
Cash and cash equivalents
40,210
21,483
Trade and other receivables
900,273
742,749
940,483
764,232
Location of credit risk
Australia
939,768
761,567
Asia
715
1,659
Other
-
1,006
Total
940,483
764,232
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
RISK MANAGEMENT – NOTE 17: FINANCIAL INSTRUMENTS
104
(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 denominated 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 crop protection products from international suppliers,
denominated in US Dollars. The cash flow financial instruments are not speculative investments. As at 30 September 2024, Elders held
designated cash flow hedges with a notional value of $77.8 million with a fair value liability of $2.3 million (2023: $1.1 million fair value asset).
The maturity dates for designated cash flow hedges ranges from October 2024 to May 2025.
As at 30 September 2024, Elders had the following Australian Dollar exposures to foreign currencies that were not designated in cash flow
hedging arrangement:
2024
2023
$000
$000
Financial assets
Cash and cash equivalents – CNY
-
718
Cash and cash equivalents – IDR
413
413
Cash and cash equivalents – other
-
1,006
Receivables – CNY
-
82
Receivables – IDR
302
446
715
2,665
Financial liabilities
Payables – CNY
-
(188)
Payables – IDR
(174)
(240)
(174)
(428)
Net exposure
541
2,237
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
-
(61)
IDR
(54)
(62)
Other
-
(100)
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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
RISK MANAGEMENT – NOTE 17: FINANCIAL INSTRUMENTS
105
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:
2024
2023
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
-
(2,297)
-
-
1,169
-
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
EQUITY – NOTE 18: CONTRIBUTED EQUITY
106
2024
2023
Number of shares
$000
Number of shares
$000
Issued and paid up capital
Balance 1 October
156,476,574
1,643,419
156,476,574
1,646,630
Treasury shares purchased
(94,035)
(677)
(1,247,168)
(11,047)
Allocation of dividend reinvestment plan shares
1,564,547
11,859
638,645
4,762
Allocation of deferred shares under executive performance schemes
94,035
1,375
608,523
3,074
Balance 30 September
158,041,121
1,655,976
156,476,574
1,643,419
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
and Short-Term Incentive plans (see note 27 for further information).
Shares issued are recognised on a first-in-first-out basis.
2024
2023
Number of shares
$000
Number of shares
$000
Balance 1 October
-
-
-
-
Acquisition of shares - average price $7.18 per share (2023: $8.86)
94,035
677
1,247,168
11,047
Allocation of deferred shares under executive performance schemes
(94,035)
(677)
(608,523)
(6,285)
Allocation of dividend reinvestment plan shares
-
-
(638,645)
(4,762)
Balance 30 September
-
-
-
-
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.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
EQUITY – NOTE 19: RESERVES
107
Reconciliation of carrying amounts at beginning and end of period:
Business
combination
reserve
Employee
equity
benefits
reserve
Hedge
reserve
Foreign
currency
translation
reserve
Financial
assets
at FVOCI
Total
$000
$000
$000
$000
$000
$000
2024
Carrying amount at beginning
of period
(29,730)
3,203
(18)
(4,591)
(6,251)
(37,387)
Exchange differences on
translation of foreign operations
-
-
-
2,198
-
2,198
Fair value movement in cash
flow hedge
-
-
(2,297)
-
-
(2,297)
Reclassified to inventory
-
-
939
-
-
939
Less deferred tax impact
-
-
408
-
-
408
Cost of share based payments
-
1,833
-
-
-
1,833
Transfer to issued capital
-
(1,375)
-
-
-
(1,375)
Transferred of unvested
employee equity benefits reserve
to retained earnings
-
(955)
-
-
-
(955)
Changes in the fair value
of financial assets at
fair value through other
comprehensive income
-
-
-
-
(16,785)
(16,785)
Carrying amount at end of period
(29,730)
2,706
(968)
(2,393)
(23,036)
(53,421)
2023
Carrying amount at beginning
of period
(29,730)
6,676
576
(5,227)
-
(27,705)
Exchange differences on
translation of foreign operations
-
-
-
636
-
636
Fair value movement in cash
flow hedge
-
-
1,143
-
-
1,143
Reclassified to inventory
-
-
(1,992)
-
-
(1,992)
Less deferred tax impact
-
-
255
-
-
255
Cost of share based payments
-
(399)
-
-
-
(399)
Transfer to issued capital
-
(3,074)
-
-
-
(3,074)
Changes in the fair value
of financial assets at
fair value through other
comprehensive income
-
-
-
-
(6,251)
(6,251)
Carrying amount at end of period
(29,730)
3,203
(18)
(4,591)
(6,251)
(37,387)
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
EQUITY – NOTE 19: RESERVES
108
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) Financial assets at fair value through other comprehensive income
Elders has elected to recognise changes in the fair value of certain investments in financial assets in OCI. These changes are accumulated
within the FVOCI reserve within equity. The group transfers amounts from this reserve to retained earnings when the relevant equity securities
are derecognised.
(v) Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign
subsidiaries, including exchange differences arising from loans which are deemed to be net investments in a foreign operation.
Accounting Policy
The results of subsidiaries incorporated in countries other than Australia, are translated into Australian Dollars (presentation currency) as
at the date of each transaction. Assets and liabilities are translated at exchange rates prevailing at reporting date. Exchange variations
resulting from the translation are recognised in the foreign currency translation reserve in equity.
On consolidation, exchange differences arising from the translation of net investments in overseas subsidiaries are taken to the foreign
currency translation reserve. If such a subsidiary was disposed of, the proportionate share of exchange differences would be transferred
out of equity and recognised in profit or loss.
EQUITY – NOTE 20: DIVIDENDS
On 20 December 2023, Elders paid a partially franked (30%) final dividend of 23 cents per share. This distribution totalled $35.9 million
(December 2022: $43.8 million). The cash outflow was $29.5 million (December 2022: $41.2 million), with the difference reinvested by
shareholders under dividend reinvestment plan.
On 26 June 2024, Elders paid a partially franked (50%) interim dividend of 18 cents per share. This distribution totalled $28.3 million (June
2023: $36.0 million). The cash flow was $22.9 million (June 2023: $32.1 million), with the difference reinvested by shareholders under dividend
reinvestment plan.
2024
2023
$000
$000
Subsidiary equity dividends on ordinary shares:
Dividends paid to non-controlling interests during the year
4,657
6,504
Franking credits available to the parent for subsequent financial years based on tax rate of 30% (2023: 30%)
13,508
12,006
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
GROUP STRUCTURE – NOTE 21: INVESTMENTS IN CONTROLLED ENTITIES
109
(a) Schedule of material controlled entities
Country
of incorporation
% Held by group
2024
2023
Ace Ohlsson Pty Limited
Australia
(a)
100
100
AIRR Apparent Pty Ltd
Australia
(a)
100
100
AIRR Belmark Pty Ltd
Australia
(a)
100
100
AIRR Holdings Limited
Australia
(a)
100
100
AIRR iO Pty Ltd
Australia
(a)
100
100
Australian Independent Rural Retailers Pty Ltd
Australia
(a)
100
100
B & W Rural Pty Ltd
Australia
75.5
75.5
Elders Finance Pty Ltd
Australia
(a)
100
100
Elders Home Loans Pty Ltd
Australia
(c)
100
100
Elders Real Estate (Tasmania) Pty Ltd
Australia
(c)
100
100
Elders Real Estate (W.A.) Pty Ltd
Australia
(c)
100
100
Elders Rural Services Australia Limited
Australia
100
100
Elders Rural Services Limited
Australia
(a)
100
100
Elders Toll Formulation Pty Ltd
Australia
(c)
100
100
Emmobi Pty Ltd
Australia
(c)
100
100
IPST Holdings Pty Ltd
Australia
(a)(b)
100
-
Integrated Property Services Tas Pty Ltd
Australia
(a)(b)
100
-
KF Tas (Property Services) Pty Ltd
Australia
(a)(b)
100
-
KF Tas (Valuations) Pty Ltd
Australia
(a)(b)
100
-
Killara Feedlot Pty Ltd
Australia
(a)
100
100
SBK Beef Pty Ltd
Australia
(b)
75
-
S D E A Nominees Pty Ltd
Australia
(a)
100
100
Sunfam Pty Ltd
Australia
(c)
100
100
The Hunter River Company Pty Ltd
Australia
(a)
100
100
Titan Ag Pty Ltd
Australia
(a)
100
100
Ultrasound Australia Pty Ltd
Australia
(a)
100
100
YP Agricultural Services Pty Ltd
Australia
(c)
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 classified by the Corporations Act as small proprietary companies relieved from audit requirements are denoted by (c)
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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
GROUP STRUCTURE – NOTE 21: INVESTMENTS IN CONTROLLED ENTITIES
110
(b) Deed of Cross Guarantee
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, 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 16. A consolidated statement of comprehensive income and consolidated statement of financial position,
comprising Elders Limited and the controlled entities which are a party to the Deed, after elimination of all transactions between parties to the
Deed, for the year ended 30 September 2024 is set out as follows. The prior period has been adjusted to ensure comparability:
2024
2023
$000
$000
Statement of comprehensive income of the Closed Group
Sales revenue
1,220,312
1,360,290
Cost of sales
(1,006,216)
(1,142,967)
Gross profit
214,096
217,323
Other revenue
151
59,279
Distribution expenses
(67,261)
(53,804)
Administrative expenses
(8,938)
(12,920)
Other items of income/(expense)
(229)
-
Finance costs
(12,531)
(6,963)
Profit/(loss) before income tax benefit/(expense)
125,288
202,915
Income tax benefit/(expense)
(13,145)
(29,913)
Profit/(loss) after income tax benefit/(expense)
112,143
173,002
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
GROUP STRUCTURE – NOTE 21: INVESTMENTS IN CONTROLLED ENTITIES
111
2024
2023
$000
$000
Consolidated statement of financial position of the Closed Group
Current assets
Cash and cash equivalents
3,171
21,099
Trade and other receivables
517,028
277,707
Livestock
47,436
49,120
Inventory
109,767
147,906
Total current assets
677,402
495,832
Non current assets
Other financial assets
274,179
274,179
Property, plant and equipment
44,867
24,582
Right-of-use assets
35,398
25,659
Intangibles
33,167
29,765
Deferred tax assets
19,176
21,438
Total non current assets
406,787
375,623
Total assets
1,084,189
871,455
Current liabilities
Trade and other payables
401,544
436,112
Lease liabilities
7,152
6,396
Interest bearing loans and borrowings
25,000
20,000
Provisions
6,836
4,130
Total current liabilities
440,532
466,638
Non current liabilities
Interest bearing loans and borrowings
182,000
15,000
Lease liabilities
27,377
18,805
Total non current liabilities
209,377
33,805
Total liabilities
649,909
500,443
Net assets
434,280
371,012
Equity
Issued capital
1,655,976
1,643,419
Retained earnings
(1,366,633)
(1,465,432)
Profit reserve
142,231
189,822
Employee equity reserve
2,706
3,203
Total equity
434,280
371,012
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
GROUP STRUCTURE – NOTE 22: PARENT ENTITY
112
Information relating to the parent entity of the Group, Elders Limited:
2024
2023
$000
$000
Results:
Net profit for the period after income tax expense
(19,414)
24,154
Total comprehensive income
(19,414)
24,154
Financial position:
Current assets
141,965
213,976
Non current assets
198,687
198,781
Total assets
340,652
412,757
Current liabilities
2,042
1,600
Total liabilities
2,042
1,600
Net assets
338,610
411,157
Issued capital
1,655,976
1,643,419
Retained earnings
(1,462,304)
(1,425,287)
Profit reserve
142,232
189,822
Employee equity reserve
2,706
3,203
Total equity
338,610
411,157
Guarantees
As disclosed in note 21, 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 25.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
GROUP STRUCTURE – NOTE 23: BUSINESS COMBINATIONS – CHANGES IN THE COMPOSITION OF THE ENTITY
113
(a) Acquisitions
(i) Prior period acquisitions
In the prior period, Elders acquired a number of small to medium retail, livestock and real estate businesses for a total consideration of
$42.0 million, including $16.5 million of deferred consideration. These transactions resulted in the recognition of $32.4 million of goodwill.
(ii) Current period acquisitions
During the current period, Elders acquired a number of small to medium retail, livestock and real estate businesses for a total consideration of
$116.7 million, including $36.0 million of deferred consideration. These transactions resulted in the recognition of $89.2 million of goodwill.
2024
2023
$000
$000
Purchase consideration
Cash paid
80,710
25,516
Deferred consideration
35,975
16,504
Total purchase consideration
116,685
42,020
The total assets and liabilities recognised as a result of acquisitions are:
Cash and cash equivalents
3,744
-
Trade and other receivables
1,348
8,098
Prepayments
3,492
-
Inventory
1,968
4,680
Property, plant and equipment
2,762
459
Rent roll
29,595
1,791
Brand name
338
-
Other intangibles
270
-
Trade and other payables
(4,124)
(4,517)
Accruals
(4,253)
-
Provisions
(2,828)
(548)
Deferred tax assets/(liabilities)
(4,813)
(380)
Net identifiable assets acquired
27,499
9,583
Goodwill on acquisition
89,186
32,437
Total purchase consideration
116,685
42,020
Payments for acquisitions through business combinations, net of cash acquired
The cash outflow for payments for acquisitions through business combinations of $103.3 million (2023: $47.0 million) represents cash paid,
net of cash acquired in respect of businesses acquired during the period of $77.0 million (2023: $25.5 million) and payments of deferred
consideration relating to acquisitions from prior and current periods of $26.3 million (2023: $21.5 million).
At 30 September 2024, Elders has $44.1 million (2023: $27.8 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.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
GROUP STRUCTURE – NOTE 23: BUSINESS COMBINATIONS – CHANGES IN THE COMPOSITION OF THE ENTITY
114
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 24: EXPENDITURE COMMITMENTS
(a) Low value assets 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' low value assets lease commitments are
presented below.
2024
2023
$000
$000
Low value assets lease commitments:
●
Within one year
2,476
2,134
●
After one year but not later than five years
4,004
3,321
Total minimum lease payments
6,480
5,455
(b) Capital commitments
Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
2024
2023
$000
$000
Capital expenditure commitments:
●
Within one year
1,503
2,859
Total minimum payments
1,503
2,859
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
OTHER NOTES – NOTE 25: CONTINGENT LIABILITIES
115
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 Elders. The Directors are not aware of any material exposure
arising from these contingent obligations
• Elders has contingent obligations in respect of real property sub-let to the purchaser of Elders’ former Sandalwood estate. The Directors are
not aware of any material exposure arising from these contingent obligations
• 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. The quantum of
such benefits is generally contingent on company and personal performance and where appropriate expensed in the financial statements in
any relevant year
• The Parent and some of its subsidiaries 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
• The Parent and its subsidiaries have from time to time provided warranties and indemnities in connection with the acquisition or provision of
goods and services and 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 21, 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 26: 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.
As at balance date, Elders has receivables from equity accounted investments as disclosed in note 5.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
OTHER NOTES – NOTE 27: SHARE BASED PAYMENT PLANS
116
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:
Grant Date
Vesting date Balance at start
of period
Granted
Vested
Lapsed
Balance at end
of period
MD & CEO Grant
17-Dec-20
Nov-23*
101,000
-
28,280
72,720
-
Senior Executive Grant
12-Mar-21
Nov-23*
235,667
-
65,755
169,912
-
MD & CEO Grant
16-Dec-21
Nov-24*
102,400
-
-
-
102,400
Senior Executive Grant
22-Dec-21
Nov-24*
223,700
-
-
9,900
213,800
MD & CEO Grant
15-Dec-22
Nov-25*
107,000
-
-
-
107,000
Senior Executive Grant
23-Dec-22
Nov-25*
272,500
-
-
20,455
252,045
MD & CEO Grant
19-Dec-23
Nov-26*
-
283,990
-
-
283,990
Senior Executive Grant
19-Dec-23
Nov-26*
-
617,280
-
-
617,280
Total
1,042,267
901,270
94,035
272,987
1,576,515
*The vesting date does not include the 12 month holding lock period which is an additional service requirement.
During the period, Long-Term Incentive performance rights expense of $2.0 million (2023: $(0.8) million benefit) was recognised.
For Long-Term Incentive performance rights vesting in November 2024, no additional shares (November 2023: Nil) 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.
The fair value at grant date of the Long-Term Incentive performance rights issued during the year was:
MD & CEO
Grant
Senior
Executive Grant
$ per right
$ per right
2024
Relative TSR against Comparator Companies Performance Rights
5.12
5.12
EPS Growth Performance Rights
6.69
6.69
2023
Relative TSR against Comparator Companies Performance Rights
3.95
3.78
EPS Growth Performance Rights
9.04
8.84
Key inputs in calculating the fair value of the Long-Term Incentive performance rights issued during the year include:
• Share price at valuation date: $7.66 for the MD and CEO Grant (2023: $10.36) and $7.66 for the Senior Executive Grant (2023: $10.12)
• Risk free rate: 3.7% for the MD and CEO Grant (2023: 3.3%) and 3.7% for the Senior Executive Grant (2023: 3.3%)
• Volatility: 33% for the MD and CEO Grant (2023: 33%) and 33% for the Senior Executive Grant (2023: 33%)
• Dividend yield: 5.0% for the MD and CEO Grant (2023: 5.0%) and 5.0% for the Senior Executive Grant (2023: 5.0%)
The weighted average remaining life of the Long-Term Incentive performance rights outstanding at the end of the financial year was 1.5 years.
(2023: 1.2 years).
Performance rights associated with the 2021 Long-Term Incentive Plan vested during the period. As a result, a total of 94,035 shares were issued
to relevant participants.
Short-Term Incentive Restricted Shares
Restricted shares issued to employees are part of the Short-Term Incentive plan. During the period, a total expense of $0.1 million (2023:
$0.2 million) was recognised in relation to this.
A total of 39,573 (2023: 79,151) 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 $10.12 (2023: $10.12).
Other Service Rights
As part of the arrangements put in place to retain Mr Allison’s services, shareholders were asked to approve the issue of Service Rights, as
outlined in the 2023 Annual Report and Notice of Meeting. As advised to shareholders in May 2024, the Board has satisfied the value of Other
Services Rights by way of cash payment. This cash payment is determined by the value of the proposed Other Service Rights (90,000 in each
of two tranches) multiplied by the volume weighted average price of Elders shares traded on ASX over the five trading days prior to Mr Allison’s
retention service dates, being 1 June 2024 and 1 June 2025. During the year, a total expense of $1.0 million (2023: $0.2 million) was recognised
in relation to this.
Elders Limited Annual Financial Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2024
OTHER NOTES – NOTE 28: AUDITOR'S REMUNERATION
117
2024
2023
$
$
Amounts received or due and receivable by the auditor PricewaterhouseCoopers for:
●
auditing or review of financial statements *
778,780
820,390
●
other audit related services
142,500
74,240
●
other non-audit services
33,923
100,113
Total
955,203
994,743
* Fees include amounts paid to overseas PricewaterhouseCoopers offices in relation to the statutory audits of the subsidiaries in China
and Indonesia.
OTHER NOTES – NOTE 29: 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.
2024
2023
$
$
Short-term
1,790,786
1,776,675
Long-term
852,177
486,621
Post employment
57,746
51,638
Share based payments
1,618,932
536,698
Total
4,319,641
2,851,632
For details of Key Management Personnel, see section 6.2 of the Remuneration Report.
OTHER NOTES – NOTE 30: OTHER MATTERS
On 20 December 2023, Elders Rural Services Australia Limited (a subsidiary of Elders Limited) and Bendigo and Adelaide Bank Limited (ASX:
BEN) executed a settlement deed terminating the Relationship Agreement (dated 4 March 2019) between Elders Rural Services Australia Limited
and Rural Bank (a division of Bendigo and Adelaide Bank Limited) in connection with the origination and referral of Rural Bank’s loan and
deposit products since 2019. Rural Bank has paid Elders Rural Services Australia Limited $17.0 million during the period which has been
accounted for in this financial reports as follows:
- $9.4 million recognised as revenue in the consolidated statement of comprehensive income
- $5.8 million offset against trade and other receivables and the balance of $1.8 million is deferred in the consolidated statement of financial
position as a current liability
OTHER NOTES – NOTE 31: SUBSEQUENT EVENTS
On 18 November 2024, Elders entered into a binding Share Agreement to acquire 100% of shares in Delta Agribusiness Pty Limited (Delta Ag).
Delta Ag is an Australian agribusiness providing rural products and advisory services through a network of 68 locations. Purchase consideration
for the acquisition is $475 million which will be funded through a fully underwritten, non-renounceable entitlement offer equity raise, scrip
consideration in the form of Elders shares to the vendors and debt financing. Completion of the acquisition is subject to the satisfaction of
customary conditions precedent and informal merger clearance by the Australian Competition and Consumer Commission.
The financial effects of this transaction have not been recognised at 30 September 2024. At the time the financial statements were authorised
for issue, Elders had not yet completed the acquisition accounting. In particular, it is not yet possible to provide detailed information for the fair
value of the assets and liabilities acquired. The operating results and assets and liabilities of the acquired company are to be consolidated on
completion of the acquisition.
Elders Limited Annual Financial Report
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
For the year ended 30 September 2024
118
Name of entity
Entity type
Country
of incorporation
% Held by group
Australian
resident or
foreign
resident
Foreign
jurisdiction(s)
of foreign
residents
Ace Ohlsson Pty Limited
Body Corporate
Australia
100
Australia
N/A
Agsure Pty Ltd
Body Corporate
Australia
100
Australia
N/A
AI Asia Pacific Operations Holding Limited
Body Corporate
Hong Kong SAR
50
Foreign
Hong Kong SAR
Air International Asia Pacific Operations Pty Ltd
Body Corporate
Australia
100
Australia
N/A
AIRR Apparent Pty Ltd
Body Corporate
Australia
100
Australia
N/A
AIRR Belmark Pty Ltd
Body Corporate
Australia
100
Australia
N/A
AIRR Holdings Limited
Body Corporate
Australia
100
Australia
N/A
AIRR iO Pty Ltd
Body Corporate
Australia
100
Australia
N/A
APO Administration Limited
Body Corporate
Hong Kong SAR
50
Foreign
Hong Kong SAR
Ashwick (Vic.) No. 102 Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Australian Independent Rural Retailers Pty Ltd
Body Corporate
Australia
100
Australia
N/A
B & W Rural Pty Ltd
Body Corporate
Australia
75.5
Australia
N/A
Chemseed Australia Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Eastern Rural Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Elders Asset Finance Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Elders Automotive Group Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Elders Finance Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Elders Forestry Finance Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Elders Forestry Management Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Elders Limited
Body Corporate
Australia
N/A Australia
N/A
Elders Forestry Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Elders Home Loans Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Elders Management Services Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Elders PT Indonesia
Body Corporate
Indonesia
100
Foreign
Indonesia
Elders Real Estate (Tasmania) Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Elders Real Estate (W.A.) Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Elders Rural Services Australia Limited
Body Corporate
Australia
100
Australia
N/A
Elders Rural Services Limited
Body Corporate
Australia
100
Australia
N/A
Elders Toll Formulation Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Emmobi Pty Ltd1
Body Corporate
Australia
100
Australia
N/A
Family Hospitals Pty Ltd
Body Corporate
Australia
100
Australia
N/A
IPST Holdings Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Integrated Property Services Tas Pty Ltd
Body Corporate
Australia
100
Australia
N/A
ITC Timberlands Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Keratin Holdings Pty Ltd
Body Corporate
Australia
100
Australia
N/A
KF Tas (Property Services) Pty Ltd
Body Corporate
Australia
100
Australia
N/A
KF Tas (Valuations) Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Killara Feedlot Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Manor Hill Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Northern Rural Supplies Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Prels Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Prestige Property Holdings Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Primac Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Redray Enterprises Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Robian Holdings Pty Ltd
Body Corporate
Australia
100
Australia
N/A
SBK Beef Pty Ltd
Body Corporate
Australia
75
Australia
N/A
S D E A Nominees Pty Ltd2
Body Corporate
Australia
100
Australia
N/A
Sunfam Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Elders Limited Annual Financial Report
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
For the year ended 30 September 2024
119
Name of entity
Entity type
Country
of incorporation
% Held by group
Australian
resident or
foreign
resident
Foreign
jurisdiction(s)
of foreign
residents
The Hunter River Company Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Titan Ag Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Ultrasound Australia Pty Ltd
Body Corporate
Australia
100
Australia
N/A
Victorian Producers' Co-operative Company Pty Ltd
Body Corporate
Australia
100
Australia
N/A
YP Agricultural Services Pty Ltd
Body Corporate
Australia
100
Australia
N/A
RWEM Unit Trust
Trust
N/A
N/A Australia
N/A
S D E A Bunbury Unit Trust
Trust
N/A
N/A Australia
N/A
1 Emmobi Pty Ltd is trustee of RWEM Unit Trust.
2 S D E A Nominees Pty Ltd is trustee of S D E A Bunbury Unit Trust.
Basis of preparation
This consolidated entity disclosure statement (CEDS) has been prepared in accordance with the Corporations Act 2001.
Determination of tax residency
Section 295 (3A)(vi) of the Corporation Act 2001 defines tax residency as having the meaning in the Income Tax Assessment Act 1997. The
determination of tax residency involves judgement as there are different interpretations that could be adopted, and which could give rise to a
different conclusion on residency.
Partnerships and trusts
Australian tax law generally does not contain corresponding residency tests for partnerships and trusts and these entities are typically taxed on
a flow-through basis.
Elders Limited Annual Financial Report
DIRECTORS' DECLARATION
For the year ended 30 September 2024
120
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 2024 are in accordance with the
Corporations Act 2001, including:
(i)
giving a true and fair view of its financial position as at 30 September 2024 and of its performance for the year ended on that
date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Regulations 2001
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in the basis of preparation
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable
(d) the consolidated entity disclosure statement on pages 118 to 119 is true and correct.
2. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the
Corporations Act 2001 for the year ended 30 September 2024.
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 21 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
Mark Allison
Managing Director and CEO
Adelaide
18 November 2024
PricewaterhouseCoopers, ABN 52 780 433 757
Level 11, 70 Franklin Street, ADELAIDE SA 5000, GPO Box 418, ADELAIDE SA 5001
T: +61 8 8218 7000, F: +61 8 8218 7999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Auditor’s Independence Declaration
As lead auditor for the audit of Elders Limited for the year ended 30 September 2024, I declare that to
the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Elders Limited and the entities it controlled during the period.
M. T. Lojszczyk
Adelaide
Partner
PricewaterhouseCoopers
18 November 2024
Auditor’s Independence Declaration
121
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 2024 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 financial report comprises:
•
the consolidated statement of financial position as at 30 September 2024
•
the consolidated statement of comprehensive income for the year then ended
•
the consolidated statement of cash flows for the year then ended
•
the consolidated statement of changes in equity for the year then ended
•
the notes to the consolidated financial statements, including material accounting policy
information and other explanatory information
•
the consolidated entity disclosure statement as at 30 September 2024
•
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.
Elders Limited Annual Financial Report
122
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.
Audit scope
Key audit matters
•
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 financial information
of the Group’s significant operations.
•
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.
•
Amongst other relevant topics, we communicated
the following key audit matters to the Audit, Risk
and Compliance Committee:
− Accounting for supplier rebates (refer to note 7)
− Existence and Valuation of inventory (Refer to
note 7)
− Accounting for receivables loss allowance (refer
to note 5)
•
These are further described in the Key audit
matters section of our report.
Independent Auditor’s Report
123
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.
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 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:
•
agreed terms to supplier credit notes or
individual supplier agreements and
recalculated the amount of the rebate; and
•
checked if the rebate amount was only
recognised as a reduction in cost of sales
when a sale of the relevant product had
occurred.
for a sample of rebates receivable at balance date, we:
•
agreed the Group’s calculation of the rebate
receivable to the terms in the relevant supplier
agreement; and
•
agreed the key components of rebates
receivable, including rebate accruals and
amounts received 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:
•
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
•
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.
Elders Limited Annual Financial Report
124
Key audit matter
How our audit addressed the key audit matter
Existence and valuation of inventory
(Refer to note 7)
At 30 September 2024, the Group held inventory
balances of $399.5 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 to 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 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;
•
for a sample of inventory items, we
reperformed the calculation of weighted
average cost using the Group’s methodology;
•
attended stocktakes at selected locations;
•
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; and
•
assessed the reasonableness of the financial
report disclosures against the requirements of
Australian Accounting Standards.
Independent Auditor’s Report
125
Key audit matter
How our audit addressed the key audit matter
Accounting for receivables loss allowance
(Refer to note 5)
Elders recognised receivables from sales initially at
transaction price and subsequently at amortised cost
using the effective interest rate method, less expected
creditor 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
profiles over a historic 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. This
requires a detailed understanding of the impact of
historical and forward-looking factors.
We considered the accounting for receivables loss
allowance to be a key audit matter because:
•
receivables recognised as at balance date are
material to the financial statements; and
•
there is judgement, subjectivity and effort
involved to evaluate the loss allowance and
assumptions used to estimate the expected
loss allowance that should be recognised in
profit and loss and provided against gross
receivables.
To assess the loss allowance recorded as at balance
date we performed the following procedures:
•
obtained an understanding of the estimation
process including data, and significant
assumptions used, in the loss allowance
model;
•
tested the mathematically accuracy of Group’s
expected credit loss model;
•
for a sample of receivables, tested aging of
outstanding receivables to underlying
invoices;
•
assessed assumptions relating to expected
default rates, forward looking estimates and
macroeconomic factors included in the
expected credit loss model to agriculture
specific macroeconomic factors;
•
assessed payments received subsequent to
balance date; and
•
assessed the calculated loss allowance in the
Group’s model, and reasonableness of
disclosures, against the requirements of
Australian Accounting Standards.
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 2024, 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 through our opinion on the financial report. We
have issued a separate opinion on the remuneration report.
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.
Elders Limited Annual Financial Report
126
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report in accordance
with Australian Accounting Standards and the Corporations Act 2001, including giving a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that 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.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended 30
September 2024.
In our opinion, the remuneration report of Elders Limited for the year ended 30 September 2024
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
18 November 2024
Independent Auditor’s Report
127
Elders Limited Annual Financial Report
128
This page has been intentionally left blank.
ASX Additional Information
129
ASX
Additional
Information
a) Distribution of Ordinary Shares as at 1 November 2024
Holdings Ranges
Total Units
Percentage FPO
Holders
1-1,000
4,853,608
3.07%
12,978
1,001-5,000
16,306,244
10.31%
6,707
5,001-10,000
9,933,712
6.29%
1,356
10,001-100,000
22,094,212
13.98%
930
100,001-9,999,999,999
104,853,345
66.35%
58
Totals
158,041,121
100.00%
22,029
The number of holders holding less than a marketable parcel
1,442
Distribution of Unquoted Equity Securities at 1 November 2024
As noted on page 43 of the Directors' Report, performance rights are the only unquoted equity securities on issue as at the date of this report.
Holdings Ranges
Total Units
Percentage Unquoted
Equity Securities
Holders
1-1,000
0
0.00%
0
1,001-5,000
0
0.00%
0
5,001-10,000
30,683
1.94%
4
10,001-100,000
950,592
60.30%
23
100,001-9,999,999,999
595,240
37.76%
2
Totals
1,576,515
100.00%
29
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.
Elders Limited Annual Financial Report
130
d) Twenty Largest Shareholders as at 1 November 2024
The twenty largest holders of Elders Ordinary Shares were as follows:
No. of shares
%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
36,252,495
22.939%
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
26,162,018
16.554%
CITICORP NOMINEES PTY LIMITED
23,703,716
14.998%
BNP PARIBAS NOMS PTY LTD
2,015,706
1.275%
BNP PARIBAS NOMINEES PTY LTD
1,977,549
1.251%
MR MARK CHARLES ALLISON
1,182,932
0.748%
NATIONAL NOMINEES LIMITED
931,648
0.589%
UBS NOMINEES PTY LTD
891,597
0.564%
VENN MILNER SUPERANNUATION P/L
800,000
0.506%
BNP PARIBAS NOMS (NZ) LTD
739,491
0.468%
BNP PARIBAS NOMINEES PTY LTD
596,234
0.377%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
517,811
0.328%
BNP PARIBAS NOMINEES PTY LTD
485,299
0.307%
CERTANE CT PTY LTD
462,404
0.293%
CITICORP NOMINEES PTY LIMITED
453,232
0.287%
MR RAYMOND JAMES ALLAN
390,000
0.247%
PACIFIC AGRIFOODS INVESTMENTS PTY LTD
335,456
0.212%
MR KWOK CHING CHOW & MS PIK YUN PEGGY CHAN
310,000
0.196%
NETWEALTH INVESTMENTS LIMITED
306,750
0.194%
MR JAMES STUART FOLEY
300,000
0.190%
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 2024.
Shareholder
No. of shares
Percentage of shares held at date of notice
Date of notice
Vanguard Group
9,502,710
6.013%
21 October 2024
Dimensional
7,878,525
5.006%
23 January 2024
State Street Corporation 7,865,930
5.00%
22 May 2024
e) Corporate Governance Statement
Elders’ 2024 Corporate Governance Statement can be found online at https://investors.elders.com.au/periodic-reports.
Shareholder Information
131
Shareholder
Information
Share Registry
Boardroom Pty Limited
Level 8, 210 George Street,
Sydney, NSW, 2000
1300 121 053
+61 (0)2 9279 0664
elders@boardroomlimited.com.au
boardroomlimited.com.au
Enquiries
Shareholders with enquiries about
their shareholdings should contact the
Company’s share registry, Boardroom, on
the above contact details.
Online shareholder information
Shareholders can obtain information about
their holdings or view their account
instructions online.
For identification and security purposes, you
will need to know your Reference Number
(HIN/SRN), Surname/Company Name and
Post/Country Code to access. This service
is accessible via Elders' Investor Hub
or direct via the Boardroom website
at investorserve.com.au.
Tax and dividend/
interest payments
Elders is obliged to deduct tax from
dividend/ interest payments (which are
not fully franked) to holders registered in
Australia who have not quoted their Tax File
Number (TFN) to the Company. Shareholders
who have not already quoted their TFN can
do so by contacting Boardroom.
Change of address
Issuer sponsored shareholders who have
changed their address should advise
Boardroom in writing. Written notification
can be emailed or posted to Boardroom
at the address shown adjacent and must
include both old and new addresses and the
Securityholder Reference Number (SRN) of
the holding.
Alternatively, holders can amend their
details online via Boardroom’s website.
Shareholders who have broker sponsored
holdings should contact their broker to
update these details.
Annual Report mailing list
Shareholders who wish to vary their Annual
Report mailing arrangements should advise
Boardroom online or in writing.
Electronic versions of the report are
available to all via the Company’s website.
Annual Reports will be mailed to all
shareholders who have elected to be placed
on the mailing list for this document.
Investor information
Information about the Company is available
from a number of sources:
Website:
elders.com.au
Subscribe:
Shareholders can nominate to receive
company information electronically via
Elders' Investor Hub.
Additionally, shareholders may elect to
receive official company information through
InvestorServe on Boardroom’s website.
Publications:
The Annual Report is the major printed
source of Company information. Other
publications include the half-yearly report,
Sustainability Report, Corporate Governance
Statement, company press releases and
investor presentations.
All publications can be obtained either
through the Company’s website or by
contacting the Company.
Elders Limited Annual Financial Report
132
Company
Directory
Directors
Ian Wilton — MSc, FCCA, FCPA, CA, FAICD
Mark Allison — BAgrSc, BEcon, GDM, AMP (HBS), DUniv (hc) (Adel), FAICD
Robyn Clubb AM — BEc, CA, SF Fin, MAICD
Raelene Murphy — BBus, FCA, GAICD
John Lloyd - BSc, MBA
Damien Frawley
Glenn Davis - LLB, BEc, FAICD
Secretaries
Peter Hastings — BA, LLB, GDLP, FGIA, Grad Dip Applied Corporate Governance, GAICD
Shannon Doecke — BAcc, Grad Dip Applied Corporate Governance, AGIA, MAICD
Registered Office
Level 10, 80 Grenfell Street, Adelaide, South Australia, 5000
P (08) 8425 4000
CompanySecretary@elders.com.au
elders.com.au
Share Registry
Boardroom Pty Limited, Level 8, 210 George Street, Sydney, NSW, 2000
P 1300 121 053
F +61 (0)2 9279 0664
boardroomlimited.com.au
Auditor
PricewaterhouseCoopers
Bankers
Australia & New Zealand Banking Group
National Australia Bank
Cooperatieve Rabobank U.A., Australia Branch
Stock Exchange Listing
Elders Limited ordinary shares are listed on the Australian Securities Exchange under the ticker code “ELD”.