NUFARM LIMITED
ANNUAL REPORT
20
09
CONTENTs
01 Facts in brief
03 Managing director’s review
08 Business review
14 Health, safety and environment
16 Management team
18 Board of directors
21 Corporate governance
Income statements
29 Directors’ report
39 Lead auditor’s independence declaration
40
41 Balance sheets
42 Statements of cash flows
43 Statements of recognised income and expense
44 Notes to the financial statements
115 Directors’ declaration
116 Independent auditor’s report
118 Shareholder and statutory information
124 Directory
KEy EvENTs
– Global glyphosate market issues make significant impact on profit result
– Conservative approach to risk management in Brazil
– Growth in sales revenues and new product introductions
– European businesses generate strong sales and margin growth
– Expansion of seeds business
FacTs in bRieF
Trading results
Profit attributable to shareholders
Material items gain/(loss)
Operating profit after tax
Sales revenue
Total equity
Total assets
Ratios
Earnings per ordinary share
Net debt to equity
Net tangible assets per ordinary share
Distribution to shareholders
Annual dividend per ordinary share
People
Staff employed
12 months ended
31 July 2009
$000
12 months ended
31 July 2008
$000
79,877
(79,755)
159,632
2,677,083
1,631,939
3,251,597
33.5¢
57%
$3.59
137,915
(25,961)
163,876
2,492,458
1,305,218
3,213,880
69.7¢
69%
$2.60
27¢
35¢
3,155
3,112
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Managing diRecTOR’s Review
Doug Rathbone AM
Managing director and
chief executive
ThE 2009 fiNANciAL
yEAR hAS PRoDucED
A DiSAPPoiNTiNg PRofiT
RESuLT foR ThE coMPANy.
ThE RESuLT REfLEcTS
A vERy chALLENgiNg
SEcoND hALf,
PARTicuLARLy wiTh
RESPEcT To ouR
gLyPhoSATE buSiNESS.
gLyPhoSATE SuffERED
A ShARP DEcLiNE iN
PRofiTAbiLiTy DuE To
A RANgE of iSSuES ThAT
hAD A NEgATivE iMPAcT
oN ALL of ThE woRLD’S
LEADiNg gLyPhoSATE
SuPPLiERS iN ThE fiNAL
quARTER. ThESE iMPAcTS
ARE DiScuSSED iN MoRE
DETAiL LATER iN ThiS
REPoRT.
Net profit after tax for the
year ended 31 July 2009 was
$79.9 million. The reported profit
includes the impact of material
items totalling $79.8 million.
group revenues increased
seven per cent to $2.68 billion
and operating earnings before
interest and tax (EbiT) was
down 44 per cent to $151 million.
Earnings per share were
33.5 cents, compared with
last year’s 69.7 cents.
inventory largely held in the
uS as at 31 July 2009. The
adjusted value of that inventory
places the company in a position
to generate profits in the 2010
year while selling glyphosate
at market competitive prices.
The dramatic fall in glyphosate
prices in the final six weeks of
the financial year meant that
the book value of inventory
could not be recovered through
sales made in the period. Losses
of $22.7 million after tax have
been classified as an inventory
adjustment material item.
The balance of $16.0 million
in material items mainly relates
to charges associated with
restructuring of manufacturing
activities in Europe and costs
relating to regulatory enquiries
dealing with competition impacts
of the Ah Marks acquisition.
There was also a small net
non-cash foreign exchange
loss of $0.3 million at 31 July
relating to the company’s Step-up
Securities (NSS). The foreign
exchange exposure on the
funding utilisation from the NSS
has been hedged over the term
of the securities and will guarantee
a cash gain of $19.6 million on
maturity in the 2012 financial year.
Material items
Final dividend
The company recorded a
$79.8 million after tax loss
associated with material items.
The significant material items
related to adjustments associated
with the company’s glyphosate
business. The company booked a
$40.8 million after tax write-down
on the value of glyphosate
Directors declared a final unfranked
dividend of 15 cents per share,
resulting in a full year dividend of
27 cents. The final dividend (which
will be classified as 100 per cent
conduit foreign income) will be
paid on 13 November 2009 to the
holders of all fully paid shares in
the company as at the close of
business on 16 october 2009.
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Managing diRecTOR’s Review cOnTinued
The Dividend Reinvestment Plan
will not operate with respect to
this dividend.
Treasury
Net debt to equity improved from
69 per cent in 2008 to 57 per cent
at July 2009, despite net debt
marginally increasing by $38 million
to $938 million.
The increase in working capital
– driven by a decrease in payables
at year-end – utilised the cash
raised from the new equity issue
undertaken in May. The reduction
in payables reflected a decrease
in purchasing activity in the last
two months of the year as it
became apparent that sales would
be below earlier expectations.
A significant decrease in working
capital is expected in 2010 in
response to more normal patterns
of sales and purchasing.
The group recorded a foreign
exchange loss of $27.5 million,
primarily in brazil. Approximately
half of this loss is a non-cash
mark-to-market adjustment on
a uS dollar banking facility due
to be renewed in the 2011
financial year.
cash from operations has
marginally improved to $76 million,
constrained by the working capital
increase. Net operating cash
outflow was $53 million,
a $74 million improvement
on the prior year.
subsequent events
Acquisition of Richardson
Seeds and MMR genetics
on 5 August 2009, Nufarm
acquired Texas based Richardson
Seeds Ltd and MMR genetics Ltd.
Richardson Seeds is a major
producer and marketer of
sorghum seed hybrids, with a
leading market share in the uS
and expanding market positions
in Mexico, South America, Europe,
Japan and the Middle East. The
company was founded over 50
years ago and has processing
capabilities of 10,000 bags of
sorghum seeds per day.
MMR genetics – previously
47 per cent owned by Richardson
Seeds – is a global leader in the
development of elite sorghum
germ plasm, used by many of
the world’s top seed companies.
The additional scale and reach
resulting from the acquisitions
will deliver significant growth
to Nufarm’s seeds business
and will be complementary
to the company’s existing
sorghum operations that
were secured via last year’s
acquisition of queensland
based Lefroy seeds.
Ah Marks
on 10 September 2009, the uK
competition commission notified
Nufarm that the company had
fulfilled its obligations in relation
to remedies associated with the
Ah Marks acquisition (completed
March 2008).
The resolution of this matter
allows the company to proceed
with the full integration of the
Ah Marks business.
belvedere closure
uK-based manufacturing
activities are to be consolidated
at the company’s wyke facility.
The belvedere plant will cease
production in october 2009.
The closure of the belvedere site
is not expected to result in any
significant net gains or losses.
Outlook
while market conditions remain
challenging in certain areas of the
company’s business, management
expects to see growth in group
profitability in the 2010 financial
year, with an improved operating
environment in brazil; a more
competitive position in glyphosate;
and continued revenue and margin
expansion across other product
positions being the major
contributors to that growth.
Seasonal conditions in key
markets such as Australia and
the uS saw reduced demand
for crop protection products in the
2009 period. if seasonal influences
return to more average conditions
in 2010, grower demand is
expected to improve. Similarly,
credit pressures impacted the
buying patterns of distribution
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Managing diRecTOR’s Review cOnTinued
customers in 2009, with many
of those customers not prepared,
or not able, to purchase and
carry average levels of inventory.
An improvement in the credit
environment is likely to result
in a re-stocking of distribution
channels as the major selling
seasons approach.
New, higher margin product
introductions and increased
sales in higher value segments
(insecticides, fungicides, seed
treatment, seeds) together with
expanded market penetration
in a number of regional locations
will also generate higher earnings
in the current financial year.
in summary, the directors are
confident that the 2010 year
will see an improvement in the
quality of earnings and believe
the company is well positioned
to resume its strong profit growth.
Doug Rathbone AM
Managing Director
28 September 2009
The 2010 year will also see
the beginning of integration-
related benefits associated
with the Ah Marks acquisition
and improved manufacturing
efficiencies resulting from
the rationalization of some
production activities in Europe.
while the 2009 year saw
a substantial reduction in group
profitability, the company was able
to generate strong sales revenues
and maintain or grow market share
positions on both a geographic and
product basis.
with the expected improvements
in earnings in a number of areas
of the business – and more
favourable market conditions –
there is confidence that Nufarm’s
2010 financial year will generate
much improved results.
credit restrictions in brazil have
eased and the company expects
to generate higher sales and
stronger margins in this market
over the 12 month period. while
risk management will continue
to be given close attention, the
business is forecast to generate
a positive operating result.
The company has taken measures
to ensure its glyphosate business
will be competitive and profitable
in 2010.
inventory levels at the
manufacturing level (total industry)
are estimated to be high, especially
in the uS market, and this will
result in aggressive competition
and relatively low prices.
with an adjusted cost base and
strong market access, Nufarm
is well placed to capture an
appropriate share of glyphosate
sales across its regional businesses.
The company is forecasting a
return to acceptable profitability
in its glyphosate business in 2010.
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Managing diRecTOR’s Review cOnTinued
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business Review
AfTER A buoyANT 2008
iN which AgRicuLTuRAL
iNDuSTRiES wERE
chARAcTERiSED by
STRoNg DEMAND,
ExPANDED PRoDucTioN
AND RiSiNg PRicES,
buSiNESS coNDiTioNS
foR ThE cRoP PRoTEcTioN
iNDuSTRy wERE vERy
chALLENgiNg iN 2009.
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following a solid first six months
– in which the company achieved
its budgeted profit performance
– pressures in the second half
relating to the global credit crisis
and climate-related declines in
demand for various products
had a negative impact on Nufarm’s
financial year. however, the
principal negative impact on
the company’s 2009 profitability
involved a range of issues that
led to significant deterioration
in the volume and profitability
of glyphosate sales.
These impacts were especially
obvious in the company’s South
American, uS and Australian
businesses. Nufarm’s European
business – which accounts for
relatively low sales of glyphosate
– performed very strongly during
the period.
Nufarm generated sales of $2.68
billion in the 12 months to 31July,
representing a seven per cent
increase on the previous year’s
total revenues. Australasia
generated $850 million in sales
(32 per cent of total sales); North
America recorded $775 million in
sales (29 per cent of total); South
America generated total sales of
$415 million (15 per cent); and
Europe $637 million (24 per cent).
Total glyphosate sales were
$833 million – representing about
31 per cent of group revenues –
and generating a 14.9 per cent
gross margin (before the impact
of adjustments included in material
items). This compares with
glyphosate sales in the previous
year of $909 million (36 per cent
of total sales) and a gross margin
contribution of 31 per cent.
business Review cOnTinued
Nufarm commenced the 2009
financial year with higher than
average glyphosate inventory
as it transitioned to new supply
arrangements. Much of that
inventory had been purchased
at a high point in the pricing
cycle for the key raw material
(glyphosate ‘technical’).
After a period of strong demand
and pricing in 2008, substantial
additional capacity of glyphosate
‘technical’ was brought into
production in china towards
the end of the 2008 period.
This surplus of product and
low seasonal demand saw
prices decline in 2009, with
severe price discounting
in the final two months
of Nufarm’s financial year,
particularly in the uS.
The company’s non-glyphosate
revenues increased by 16 per cent
to $1.84 billion.
Total herbicide sales were down
on the previous year, but when
glyphosate is excluded from that
calculation there was an increase
in other herbicide sales of almost
14 per cent to $1.08 billion.
Phenoxy herbicide sales, in which
Nufarm is a global leader, were
$554 million and similar to the
previous year.
The company generated
increased sales of insecticides
(up 21 per cent) and fungicides
(up 10 per cent) in 2009, reflecting
product development and portfolio
expansion activity focused on
those segments.
A number of new seed treatment
products were introduced in 2009,
providing a strong platform for
future growth in this high value
segment.
australasia
2009
2008
$ million $ million
Revenue
Segment profit
850
118
875
148
The Australasian business
generated $850 million in sales
and a segment profit (segment
earnings before interest and
tax) of $118 million in the 2009
financial year. This represents
a drop in revenue of about three
per cent on the previous year and
a 20 per cent decline in segment
profit. glyphosate represented
approximately 31 per cent of
total sales in this region.
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business Review cOnTinued
Despite average crop plantings
and reasonable climatic conditions
following the planting activity in
most parts of Australia, demand
for crop protection products
was unusually low with Nufarm’s
major distribution customers
looking to de-stock and growers
only purchasing minimum
requirements. crops in many
regions were planted in relatively
dry conditions reducing the
need for herbicide applications,
particularly glyphosate.
volume sales of glyphosate
in Australia were substantially
down on the previous year and –
combined with weaker pricing
and lower margins – were the
major contributor to a poorer
profit performance from the
Australian business.
Seasonal conditions improved
in many regions after crops were
sown and this generated strong
sales of a number of products
other than glyphosate, with
phenoxy herbicide sales and sales
into segments such as horticulture
generating an improved return
on the previous year.
Nufarm’s croplands division
(manufacturer and supplier of
spray equipment) increased sales
to $46.6 million, an improvement
of more than 30 per cent on the
previous year.
New Zealand crop protection sales
were down by some 16 per cent,
with a depressed dairy sector
and lower margin glyphosate
sales having an impact.
Nufarm’s Asian sales grew
strongly in 2009, with the
company’s businesses in
Malaysia, indonesia and Japan
all posting higher revenues driven
by additional product registrations
and improved access to local
distribution. The company’s
first full year of ‘Roundup’
brand distribution rights in
indonesia also boosted sales.
north america
2009
2008
$ million $ million
Revenue
Segment profit
775
8
631
84
North American sales increased
by almost 23 per cent on the
previous year ($775 million
versus $631 million). Segment
profit ($8.4 million) was substantially
down, with a significant decline
in uS glyphosate earnings being
the major contributor. glyphosate
represented 42 per cent of sales
in the North American region.
uS sales were up in Australian
dollars but were similar to the
previous year’s sales when reported
in local currency. This is despite uS
glyphosate sales being 20 per cent
down. Excluding the glyphosate
business, uS sales increased by
more than 17 per cent.
The gross profit generated by
uS glyphosate sales dropped by
$77 million from the previous year,
with 2009 sales recording a loss
of $22 million. Excess supply,
additional competition and lower
seasonal demand for glyphosate
saw prices soften throughout the
year, with a very sharp deterioration
in pricing towards the end of the
season. Nufarm’s cost position
and high starting inventory
resulted in glyphosate sales
generating losses as the business
sought to retain market share
positions. These impacts were
also felt by other major suppliers
of glyphosate in the uS market.
in other areas of the business,
Nufarm was able to grow revenues
by some 17 per cent and gross
margins by 32 per cent (both
calculated in local currency).
Non-glyphosate sales into the
crop segment grew approximately
six per cent, despite a relatively
poor season for phenoxy herbicides.
insecticides, fungicides and seed
treatment products were all
stronger.
Nufarm’s position in the uS turf
and ornamental segment and the
industrial vegetative management
segment improved on both a
revenue and gross margin basis,
helped in part by the contribution
of the Etigra business, which was
acquired in May 2008. Additional
product registrations and new
product introductions in these
segments helped strengthen the
company’s distribution relationships.
in canada, Nufarm benefited
from a broader product portfolio
to record a 30 per cent increase
in sales. colombia (also reported
as part of the North American
segment) saw a small increase
in sales but margins were down
on the previous year.
south america
2009
2008
$ million $ million
Revenue
Segment profit
414
(41)
431
59
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business Review cOnTinued
South American sales in 2009
were $414 million, down four
per cent on the previous year’s
$431 million. The region recorded
a loss of $41 million as a segment
operating result.
The global credit crisis had
a dramatic impact on business
in brazil with many growers
unable to source credit or
provide acceptable security to
cover purchases of crop inputs.
competition between suppliers
for lower risk business was
intense with margins
dramatically impacted.
Nufarm took a conservative
position in response to these
pressures and did not fill sales
orders considered to involve an
unacceptable credit risk. Discounts
were also offered to secure earlier
collections.
Nufarm’s sales revenues in brazil
were down by 13 per cent on the
previous year when reported in
local currency. while glyphosate
sales were similar to the previous
year, margins generated from
those sales were substantially
lower. glyphosate represented
approximately 42 per cent of total
sales in South America in 2009.
in other product segments, the
brazil business performed strongly
on a revenue basis with new
offerings in pasture and sugar
cane strengthening Nufarm’s
position in those important
markets.
on an operating basis brazil
generated a small EbiT loss
for the full year, with second
half overheads and relatively low
sales eroding the $25 million EbiT
posted at 31 January. This was
consistent with expectations and
guidance provided at the half year.
Argentina sales were slightly
higher in 2009 but credit related
pressures and lower glyphosate
margins made an impact on
the profitability of the business.
Drought conditions also persisted
throughout the year, with cereal
plantings down by some
40 per cent.
in chile, where Nufarm has
a more balanced portfolio not
dominated by glyphosate, the
business generated an above
budget profit result.
europe
2009
2008
$ million $ million
Revenue
Segment profit
637
101
555
56
European sales were up
by 15 per cent year on year to
$637 million, with a substantial
improvement in segment
profit ($100.6 million versus
$56.2 million in 2008). glyphosate
represented 14 per cent of total
European sales in the period.
Nufarm’s uK branded business
improved margins on sales which
were in line with the previous
year, despite poor autumn weather
and a sharp decline in demand
for glyphosate. Again, new product
introductions helped offset lower
sales of some existing products.
The Ah Marks business – acquired
in March of the previous year –
performed strongly and delivered
an earnings contribution ahead of
assumptions made at the time of
the acquisition. This business was
operated on an independent basis
to the local Nufarm business due
to ongoing enquiries by the uK
regulatory authority. This meant
that anticipated synergies could
not be realised in the 2009 period.
Sales in france were up five per
cent on the previous year. while
seasonal conditions were generally
not favourable, the company
generated excellent results from
its corn herbicide campaign and
made important gains in the
amenities (non-crop applications)
market. A rationalisation of
production activity in france
was also instigated during the
year and this will result in improved
efficiencies in future years.
The german business was slightly
down on the previous year with
sales into the spring market
for wheat herbicides down
by some 20 per cent due
to seasonal conditions. This
was offset, however, by the
successful introduction of
several new products.
Nufarm’s businesses in italy,
Spain, Portugal and the relatively
new operations in Romania and
hungary all generated very strong
results. when reported in local
currencies, these results were
even stronger. A new subsidiary
was also established in greece
with important product registrations
already secured in a number
of market segments.
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business Review cOnTinued
nufarm sales by
geography 2009
nufarm sales by
geography 2008
nufarm sales by
key products 2009
nufarm sales by
key products 2008
* Other – includes PGR’s, adjuvants,
seed treatments, seeds, spray
machinery, industrial sales.
seeds
Nufarm made substantial
strides in the expansion of the
seed and traits business within
the past year. The business
finished ahead of budget with
a small operating profit despite
challenging environmental
conditions prior to the canola
season in Australia.
The Nufarm seed business,
branded as Nuseed, has expanded
its product range to offer sunflower
and sorghum hybrids to both the
Australian and global markets.
This expansion has been facilitated
by the acquisition of queensland
based Lefroy Seeds in September
of 2008. Lefroy Seeds specialises
in hybrid breeding, production
and commercialisation activities
in sunflower and sorghum. The
acquisition delivered established
registrations, sales and commercial
partnerships in Australia, Argentina,
South Africa, china, Pakistan,
Thailand, and various countries
in Europe.
New South wales and victoria
planted their second year of
biotech canola (using Roundup
Ready® canola) with a four-fold
expansion in the sown area. The
Monola® specialty canola business
continued to gain momentum
as consumers in Australia and
overseas increased their demand
for healthier foods. Monola®
delivers a functional, healthy
alternative to high saturated
and trans-fats. Nuseed collaborates
with the supply chain from
breeding to final oil customer.
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HealTH, saFeTy and enviROnMenT
AgAiNST A bAcKDRoP
of chALLENgiNg MARKET
coNDiTioNS, NufARM
coNTiNuES To PAy
cLoSE ATTENTioN To ThE
cRiTicAL AREAS of SAfETy
AND ENviRoNMENTAL
coMPLiANcE AND To MAKE
PRogRESS iN ouR EffoRTS
To AchiEvE coNTiNuouS
iMPRovEMENT AcRoSS A
RANgE of hEALTh, SAfETy
AND ENviRoNMENTAL
MEASuRES.
in 2008 we lowered our injury
rates, achieved a reduction in
total energy use and secured
production efficiencies while
further minimizing our waste.
The 10th annual health, safety
and environment report covers
the 2008 calendar year, during
which Nufarm acquired the
Ah Marks phenoxy herbicide
manufacturing business, located
in wyke, uK. The need to clear a
number of regulatory requirements
relating to that transaction deferred
the full integration of the business
and has delayed a number
of planned improvements
in occupational health, safety
and environment areas. Also,
the addition of the wyke plant –
and its attendant energy, water
and waste profiles – has led
to a number of our group
measurements not showing the
overall improvement that would
otherwise have been evident.
for the first time in eight years,
our annual global consumption
of water increased and water use
efficiency decreased, due largely
to the inclusion of the Ah Marks
business. however, we are
committed to resuming the
downward trend so well
demonstrated over the
preceding nine years.
Nufarm has also signed up to
the Australian chemical industry’s
‘Sustainability Leadership Program’,
under the banner of the PAciA
Sustainability framework. This
also contains the long running
industry initiative, Responsible
care. Many of the framework’s .
principles are already reflected
in how Nufarm operates and the
framework will help us to more
formally integrate our improvement
efforts and to embed sustainability
initiatives within our business.
The framework is being introduced
first into the Australian business
and will flow across the global
operations as we progress.
A large number of Nufarm
sites are investing in additional
safety training. New courses
are being implemented regularly,
particularly in our European
operations. All Nufarm employees
have a responsibility to ensure
that our work places are safe.
increasing numbers of employee
groups are becoming involved
in site specific initiatives aimed
at achieving improvements in
areas such as water and waste
minimisation. This reflects a
culture within the company
that must be encouraged.
Nufarm’s 10th annual health,
safety and environment report
may be downloaded from the
corporate website, together
with separate reports from
manufacturing sites around the
world. The report covers 2008
calendar year data collected
from 16 manufacturing sites
and 19 offices and regional
centres. Data from the recently
acquired operation of Ah Marks
in wyke, uK, is included. The
health and safety data includes
permanent and casual employees,
as well as contractors.
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HealTH, saFeTy and enviROnMenT cOnTinued
LTifR or lost time injury frequency
rate is the number of lost time
injuries per million hours worked
that results in one or more days
of absence from work.
MTifR or medical treatment injury
frequency rate is the number of lost
time and medical treatment injuries
per million hours worked.
Severity is the number of days lost
per thousand hours worked.
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ManageMenT TeaM
Brian Benson
Rodney Heath
Doug Rathbone AM
Kevin Martin
Dale Mellody
doug Rathbone aM
Rodney Heath
dale Mellody
group general manager
marketing and president
North America
Dale Mellody joined Nufarm
as a territory manager in 1995,
having completed his bachelor
of agricultural science. Promoted
to head office in 1997, he has
had various roles in the global
marketing group and has assisted
with a number of company
acquisitions. Dale was promoted
to the senior management group
in July 2005 and is responsible
for Nufarm’s global marketing.
Now based in the uS, Dale also
heads Nufarm’s North American
regional operations.
Managing director and
chief executive
Doug Rathbone’s background
is chemical engineering and
commerce and he has worked
for Nufarm Australia Ltd for
36 years. Doug was appointed
managing director of Nufarm
Australia in 1982 and managing
director of Nufarm Ltd in
october 1999. he joined the
board of directors in 1987.
he was appointed to the
board of cSiRo in 2007.
brian benson
group general manager
agriculture
brian benson joined Nufarm in
2000, bringing with him extensive
experience in the crop protection
industry in the areas of international
marketing and strategy. he has
degrees in agricultural science and
business administration. brian is
responsible for Nufarm’s regional
sales operations and commercial
strategy.
group general manager
corporate services and
company secretary
Rod heath has a bachelor of
law and joined the company
in 1980, initially as legal officer,
later becoming assistant company
secretary. in 1989, Rod moved
from New Zealand to Australia
to become company secretary
of Nufarm Australia Ltd. in 2000,
Rod was appointed company
secretary of Nufarm Ltd.
Kevin Martin
chief financial officer
Kevin Martin is a chartered
accountant with over 26 years
of experience in the professional
and commercial arena. After joining
Nufarm in 1994, he was responsible
initially for the financial control
of the crop protection business.
Since 2000, Kevin has been
responsible for all financial,
treasury and taxation matters
for the group.
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ManageMenT TeaM cOnTinued
Mike Pointon
David Pullan
Bob Ooms
Robert Reis
bob Ooms
david Pullan
group general manager
chemicals
group general manager
operations
bob ooms joined the company
in 1999. An industrial chemist
by training, he has more than 40
years experience in the chemical
industry in a variety of positions,
including many years in senior
management. bob has executive
management responsibility for
global supply chain issues.
Mike Pointon
group general manager
innovation and development
Mike Pointon joined Nufarm
in 2001 and was responsible
for Nufarm’s southern European
business based in france. he has
a degree in agricultural science
and over 25 years experience in
the crop protection industry. Most
recently based in Melbourne with
responsibility for Nufarm’s global
glyphosate business, Mike was
appointed to the executive team
in July 2008. he is responsible for
the group’s product development
and regulatory affairs activities.
David Pullan joined the company
in 1985. A mechanical engineer,
David has extensive experience
in chemical synthesis and
manufacturing, having held
a variety of operational and
management positions in the
oil and chemical industries.
David is responsible for all of
Nufarm’s global manufacturing
and production sites.
Robert Reis
group general manager
corporate strategy and
external affairs
A former journalist, political
adviser and lobbyist, Robert
joined Nufarm in 1991. Robert
is responsible for global issues
management, investor relations,
media, government and stakeholder
relations. Robert also has executive
management responsibility for
corporate strategy, human resources
and organisational development.
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17
bOaRd OF diRecTORs
Pictured from left to right: Donald McGauchie AO, Bob Edgar, John Stocker AO, Kerry Hoggard (Chairman),
Doug Rathbone AM (Managing director and chief executive), Doug Curlewis (Deputy chairman),
Bruce Goodfellow, Garry Hounsell.
Kerry Hoggard
chairman
doug curlewis
Deputy chairman
Kerry hoggard, 68, joined
the board in 1987.
gDw (Doug) curlewis, 68,
joined the board in January 2000.
he has a financial background,
beginning his career with the
company in 1957 as office junior
and rising, through a number
of accounting, financial and
commercial promotions to be
chief executive officer in 1987.
on his retirement in october
1999, he was appointed chairman
of the board. Kerry is a member
of the audit and remuneration
committees.
he has a master of business
administration and was formerly
managing director of National
consolidated Ltd. he is also
a director of guD holdings Ltd
and Sigma Pharmaceuticals Ltd.
in the past three years Doug has
been a director of Pacifica group
Ltd (nine years), Remunerator
Australia Pty Ltd (seven years)
and graincorp Ltd (three years).
Doug is deputy chairman
of the board, chairman of the
remuneration and nomination
committees and a member
of the audit committee.
doug Rathbone aM
Managing director and
chief executive
Doug Rathbone AM, 63,
joined the board in 1987.
his background is chemical
engineering and commerce
and he has worked for Nufarm
Australia Ltd for 36 years. Doug
was appointed managing director
of Nufarm Australia in 1982 and
managing director of Nufarm Ltd
in october 1999. he was appointed
to the board of the cSiRo in 2007.
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bOaRd OF diRecTORs cOnTinued
bob edgar
garry Hounsell
John stocker aO
Dr RJ (bob) Edgar, 63, joined
the board on 1 June 2009.
gA (garry) hounsell, 54, joined
the board in october 2004.
Dr Jw (John) Stocker Ao,
63, joined the board in 1998.
he has a medical, scientific
and management background
and was formerly chief scientist
of the commonwealth of Australia
and is now the chairman of cSiRo.
he is a principal of foursight
Associates Pty Ltd and chairman
of Sigma Pharmaceuticals Ltd
and The Australian wine institute
Ltd. he is a director of Telstra
corporation Ltd. in the past three
years John has been a director
of Sigma company Ltd (eight
years), cambridge Antibody
Technology group plc (11 years)
and circadian Technologies Ltd
(12 years). John is a member
of the audit committee.
he has a bachelor of economics
(hons) from university of Adelaide
and a PhD from ohio State
university. he recently retired
from the ANZ banking group
where he was deputy chief
executive officer. in a 25 year
career at ANZ, he also held the
positions of chief operating officer,
managing director institutional
financial services and chief
economist. bob is a director
of Transurban holdings Ltd,
Transurban infrastructure
Management Ltd and Asciano
Ltd. he is also chairman of
the Prince henry’s institute
of Medical Research.
bruce goodfellow
Dr wb (bruce) goodfellow, 57,
joined the board representing the
holders of the ‘c’ shares in 1991.
following the conversion of the
‘c’ shares into ordinary shares,
he was elected a director in 1999.
he has a doctorate in chemical
engineering and experience in
the chemical trading business
and financial and commercial
business management experience.
bruce is chairman of Refrigeration
Engineering co Ltd and a director
of Sanford Ltd, Sulkem co Ltd,
and cambridge clothing co Ltd.
bruce is a member of the
nomination committee.
he has a bachelor of business
(accounting) and is a former senior
partner with Ernst & young and a
former Australian country-managing
partner with Arthur Andersen.
he has extensive experience
across a range of areas relating
to management and corporate
finance and has worked with
some of Australia’s leading
companies in consulting and
audit roles, with a particular
emphasis in the manufacturing
sector. garry is chairman of Pan
Aust Ltd, deputy chairman of
Mitchell communication group
Ltd and a director of qantas
Airways Ltd and orica Ltd.
garry is chairman of the audit
committee.
donald Mcgauchie aO
Dg (Donald) Mcgauchie Ao,
59, joined the board in 2003.
he has wide commercial
experience within the food
processing, commodity trading,
finance and telecommunication
sectors. he also has extensive
public policy experience, having
previously held several high-
level advisory positions to
the government including the
Prime Minister’s Supermarket
to Asia council, the foreign
Affairs council and the Trade
Policy Advisory council. he is
currently a member of the board
of the Reserve bank of Australia
and a director of James hardie
industries Nv. in the past three
years Donald has been a director
of Telstra Ltd (11 years). Donald is
a member of both the remuneration
and nomination committees.
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20
cORPORaTe gOveRnance
introduction
Nufarm’s board processes are
under constant review to ensure
our systems protect the interests
of all stakeholders.
As part of this review, we
consider the corporate governance
Principles and Recommendations
(‘the ASx principles’) 2nd Edition,
published by the Australian
Securities Exchange Limited’s
(ASx) corporate governance
council.
copies of our corporate governance
practices are publicly available in
the corporate governance section
of our website: www.nufarm.com
compliance with asX
principles
The ASx Listing Rules require
Nufarm to disclose in our annual
report the extent to which we
have adopted the 27 best practice
recommendations during our
reporting period and, where we
do not comply, to explain why not.
Nufarm believes it complies
with all the ASx principles
with the following exception:
Recommendation 2.2 recommends
that the chairman should be an
independent director. our chairman
is elected annually at the directors’
meeting immediately following the
annual general meeting (AgM).
Kerry hoggard is board chairman,
and is not deemed an independent
director in accordance with the
tests set out in Principle 2 of
the ASx principles.
This corporate governance report
reaffirms the statements contained
in our governance reports since
2003 that the board unanimously
continues to support Kerry as
chairman, believing this to be
clearly in the best interest
of all stakeholders.
Kerry’s history with the
company, including his detailed
knowledge of the industry where
the company operates and his
extensive accounting, financial
and commercial background,
bring invaluable experience
and unique skills to Nufarm.
Kerry continues to apply judgment
independent of management in
all decision making. he discharges
his role with a strong commitment
to considerations of governance
and disclosure.
Doug curlewis, an independent
director, is deputy chairman of
the board.
Management and oversight
of nufarm
The board
The governing body of the
company is the board of directors.
its clear responsibility is to oversee
the company’s operations and
ensure that Nufarm carries out
its business in the best interests
of all shareholders and with proper
regard to the interests of all
other stakeholders.
The board charter clearly defines
the board’s individual and collective
responsibilities and describes
those delegated to the managing
director and senior executives.
The board has set specific limits
to management’s ability to incur
expenditure, enter contracts or
acquire or dispose of assets or
businesses without full board
approval.
The board’s specific responsibility
is to:
• ratify, monitor and review
strategic plans for the company
and its business units;
• approve financial and dividend
policy;
• review the company’s accounts;
• approve and review operating
budgets;
• approve major capital
expenditure, acquisitions,
divestments and corporate
funding;
• oversee risk management
and internal compliance; and
• control codes of conduct
and legal compliance.
The board is also responsible for:
• the appointment and
remuneration of the
managing director;
• ratifying the appointment
of the chief financial officer
and the company secretary;
and
• reviewing remuneration
policy for senior executives
and Nufarm’s general
remuneration policy
framework.
The board annually reviews
its composition and terms
of reference for the board,
chairman, board committees
and managing director.
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cORPORaTe gOveRnance cOnTinued
There are seven scheduled
board meetings each year. when
necessary, additional meetings
are convened to deal with specific
issues that require attention before
the next scheduled meeting. Each
year the board also reviews the
strategic plan and direction of
the company.
At 31 July 2009, there are
three board committees: audit;
remuneration; and nomination.
All directors are entitled to
attend any committee meeting.
Details of the attendances
at meetings of board and
committees during the
reporting period appear
on page 30 of this report.
Evaluating the performance
of senior executives
Nufarm’s senior executive
team comprises a group of
long serving career Nufarm
or crop protection executives.
The performance of the senior
executive team is reviewed by
the managing director, and then
the remuneration committee
and the board, as part of the
annual remuneration review.
in the case of the managing
director, the remuneration
committee and the board
conduct his review.
A key consideration for the board
is the company’s return on funds
employed (RofE) performance.
RofE is, and has been for some
20 years, a core feature of Nufarm’s
culture, involving many aspects
of the company’s financial
management. RofE provides
the senior executive with guidance
as to how shareholder value can
be increased by improving operating
income and using capital more
efficiently. we believe that if
management concentrates on
improving RofE, then sustained
shareholder value will result.
The board believes RofE is the
appropriate performance condition
for the company’s senior executive
incentive program. however, the
board also reviews the company’s
total shareholder return (TSR)
performance with that of other
peer group companies.
in the reporting period, a
performance evaluation of the
senior executive was undertaken
in accordance with this process.
The company is managed according
to the recommendations of ASx
Principle 1.
A summary of the board charter
is available in the corporate
governance section of the
company’s website.
board of directors
composition
There are eight members
of the board with a majority
of independent non-executive
directors who have an appropriate
range of proficiencies, experience
and skills to ensure that it
discharges its responsibilities
with the best possible
management of the
company in mind.
The company’s constitution
specifies that the number of
directors may be neither less
than three, nor more than 11.
At present there are seven
non-executive directors and
one executive director, namely
the managing director, and the
board has decided at this time
that no other company executive
will be invited to join the board.
independence
Directors are expected to bring
independent views and judgment
to the board. The board applies the
framework set out in ASx Principle
2 to determine the independence
of directors. To decide whether a
director has a material relationship
with the company that may
compromise independence,
the board considers all relevant
circumstances.
The board reviewed the ASx
principles and the circumstances
of individual directors and believes
it is unnecessary to define any
specific materiality limits, except
that a substantial shareholder
is defined as one who holds
or is associated directly with
a shareholder controlling in
excess of five per cent of
the company’s equity.
Tenure
The board believes that
the way directors discharge
their responsibilities and their
contribution to the success
of the company determines
their independence and justifies
their positions.
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cORPORaTe gOveRnance cOnTinued
The nomination committee
reviews the performance
of directors who seek to offer
themselves for re-election at a
company annual general meeting
(AgM). That committee then
recommends to the board
whether or not it should continue
to support the nomination of
the retiring directors.
The board conducts an annual
review of the independence of
directors and, at the date of this
report, it has determined that the
status of directors is as follows.
independent non-executive
directors
gDw curlewis
Dr RJ Edgar
gA hounsell
Dg Mcgauchie
Dr Jw Stocker
Non-independent
non-executive directors
KM hoggard
Dr wb goodfellow
Executive director
(chief executive officer)
DJ Rathbone
Profiles of each board member,
including terms in office, are
on pages 18 and 19 of this report.
Access to independent advice
To help directors discharge their
responsibilities, any director can
appoint legal, financial or other
professional consultants, at the
expense of the company with the
chairman’s prior approval, which
may not be unreasonably withheld.
The board charter provides that
non-executive directors may meet
without management present.
The committee is chaired
by an independent director.
conflicts of interest
board members must identify
any conflict of interest they may
have in dealing with the company’s
affairs and then refrain from
participating in any discussion
or voting on these matters.
Directors and senior executives
must disclose any related party
transactions in writing.
chairman of the board
The chairman is elected
annually at the directors’
meeting immediately
following the company’s
annual general meeting.
According to the tests set
out in ASx Principle 2, Nufarm’s
chairman, Kerry hoggard, is not
an independent director. The
reasons why we unanimously
support Kerry’s appointment are
set out on page 21 of this report.
Doug curlewis, an independent
director, is deputy chairman.
The Nufarm board has stipulated
that the role of the chairman and
chief executive officer may not
be filled by the same person.
with the exception of the
independence of the chairman,
the board structure is consistent
with ASx Principle 2.
The nomination committee
Doug curlewis is chairman of
the nomination committee and
Donald Mcgauchie and bruce
goodfellow are members, with a
majority of independent directors.
The formal charter setting out
the committee’s membership
requirements includes the
responsibilities to:
• assess competencies of board
members;
• review board succession plans;
• evaluate board performance;
and
• recommend the appointment of
new directors when appropriate.
The performance of the board,
its committees and individual
directors is reviewed annually
and the board has utilised a
variety of review processes,
including a review by external
consultants and a review by
the chairman.
for the last three reporting
periods, the board has completed
a purpose-designed questionnaire,
the results of which were discussed
with the chairman and the chairman
of the nomination committee and
then by the board as a team.
The board ensures that new
directors are introduced to the
company appropriately, including
relevant industry knowledge, visits
to specific company operations
and briefings by key executives.
All directors may obtain
independent professional
advice and have direct access
to the company secretary, who
is appointed by, and accountable
to, the board on all governance
matters.
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cORPORaTe gOveRnance cOnTinued
Save for the fact that the chairman
is not independent, the operation
of the board is in accordance with
the recommendations of ASx
Principle 2.
our formal code of conduct
is available in the corporate
governance section of the
company’s website.
A copy of the nomination
committee charter and a
summary of the policy and
procedure for appointment
of directors is available in the
corporate governance section
of the company’s website.
ethical and responsible
decision-making
Ethical standards
Nufarm operates in many countries
and does so in accordance with
the social and cultural beliefs
of each country.
it is politically impartial except
where the board believes it
is necessary to comment due
to any perceived major impact
on the company, its business
or any of its stakeholders.
we require directors, senior
executives and all employees
to adopt standards of business
conduct that are ethical and in
compliance with all legislation.
where there are no legislative
requirements, the company
develops policy statements relating
to the business stakeholders to
ensure appropriate standards and
carefully selects and promotes
employees.
The board endorses the principles
of the code of conduct for
Directors, issued by the Australian
institute of company Directors.
Purchase and sale of company
shares
The Nufarm board has longstanding
policies about the purchase and
sale of company shares by
directors and key executives.
The current share trading
policy prohibits directors and
management from dealing in
the company’s shares at any
time the directors or employees
are aware of unpublished,
price-sensitive information.
Subject to this prohibition,
directors and senior executives
may buy or sell shares at any
time except during the
following periods:
• six weeks before the release
of the company’s half year
results to the ASx, ending
24 hours after the release;
• six weeks before the release
of the company’s year end
results to the ASx, ending
24 hours after the release;
and
• two weeks before the
company’s AgM, ending
24 hours after the AgM.
before any trading activity
in company shares, directors
and senior executives must
complete an application form,
which contains a declaration
confirming they have no relevant
knowledge pertaining to the
company that is not available
to the public. on receipt of the
application form the company
secretary will discuss the
application with the chairman
to obtain approval to trade.
No trading can be undertaken
before the application receives
the approval of the company
secretary.
A copy of the trading policy
is available in the corporate
governance section of the
company’s website.
The company’s code of
conduct and share trading
policy is consistent with
ASx Principle 3.
safeguard integrity
in financial reporting
financial reports
The company has put in
place a structure of review and
authorisation to independently
verify and safeguard the integrity
of financial reporting.
The audit committee reviews
the company’s financial statements
and the independence of the
external auditors.
Audit committee
garry hounsell is chairman of
the board audit committee with
Doug curlewis, John Stocker
and Kerry hoggard as members.
The committee has a majority
of independent non-executive
directors and is chaired by
an independent director.
Details of attendances at meetings
of the audit committee are set out
on page 30.
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cORPORaTe gOveRnance cOnTinued
garry hounsell has a bachelor
of business (accounting) and
is a former senior partner with
Ernst & young and a former
Australian country managing
partner with Arthur Andersen.
he has extensive experience
across a range of areas relating
to management and corporate
finance and has worked with
some of Australia’s leading
companies in consulting and audit
roles, with a particular emphasis
in the manufacturing sector.
he is chairman of PanAust Ltd,
deputy chairman of Mitchell
communication group Ltd
and a director of qantas Airways
Ltd and orica Ltd. garry is also
chairman of the audit committee
at qantas.
Doug curlewis has an MbA and
is a former managing director of
National consolidated Ltd, chief
executive (Europe) of ici Paints
and managing director of Dulux
Australia. Doug is currently a
director of guD holdings Ltd
and Sigma Pharmaceuticals Ltd.
John Stocker has a medical,
scientific and management
background and was formerly
chief scientist of the
commonwealth of Australia
and is now the chairman
of cSiRo. he is a principal
of foursight Associates Pty
Ltd and chairman of Sigma
Pharmaceuticals Ltd and
The Australian wine institute
Ltd. he is a director of Telstra
corporation Ltd.
Kerry hoggard has extensive
accounting and financial experience.
Kerry began his career with the
company in 1957 and, after a
number of accounting, financial
and commercial promotions,
was chief executive officer
from 1987 to 1999.
The committee reviews its
charter annually.
The charter sets out membership
requirements for the committee,
its responsibilities and provides
that the committee shall annually
assess the external auditor’s actual
or perceived independence by
reviewing the services provided
by the auditor.
The charter also identifies those
services that:
• the external auditor may
and may not provide; and
• require specific audit
committee approval.
The committee has recommended
that any former lead engagement
partner of the firm involved in the
company’s external audit should
not be invited to fill a vacancy on
the board and the lead engagement
audit partners will be required to
rotate off the audit after a maximum
five years involvement and it will
be at least two years before that
partner can again be involved
in the company’s audit.
A copy of the audit committee
charter and its duties is available
in the corporate governance
section of the company’s website.
The financial reporting system
of the company is consistent
with ASx Principle 4.
disclosure
The company has a detailed
written policy and procedure
to ensure compliance with
both the ASx Listing Rules
and corporations Act. This
policy is reviewed regularly
with the company’s legal
advisers, in line with best
practice.
The company secretary prepares
a schedule of compliance and
disclosure matters for directors
to consider at each board meeting.
A summary of the disclosure
policy is available in the corporate
governance section of the
company’s website.
The company’s disclosure policy
is consistent with ASx Principle 5.
Rights of shareholders
communication
we are committed to timely, open
and effective communication with
our shareholders and the general
investment community.
our communication policy aims to:
• ensure that shareholders and
the financial markets are
provided with full and timely
information about our activities;
• comply with our continuous
disclosure obligations;
• ensure equality of access to
briefings, presentations and
meetings for shareholders,
analysts and media; and
• encourage attendance and
voting at shareholder meetings.
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cORPORaTe gOveRnance cOnTinued
Postal and electronic
communication with
shareholders includes:
• half year and annual reports;
• proxy voting;
• notice of AGM;
• relevant market announcements
and related information; and
• copies of webcasts and
teleconferences.
our formal communications
policy is available in the corporate
governance section of the
company’s website.
The company’s policy in relation
to the rights of shareholders is
consistent with ASx Principle 6.
identifying and
managing risk
The board is committed to
identifying, assessing, monitoring
and managing its material business
risks.
Nufarm’s policies and procedures
relating to the management and
oversight of risk provide effective
management of material risks at
a level appropriate to Nufarm’s
global business.
The board annually, at its strategy
review meeting, comprehensively
reviews the material risks faced
by the company. in so doing,
it considers the interests of
all relevant stakeholders. in
addition, at each board meeting,
management report on specific
issues of risk and compliance,
including legal compliance,
health safety and environmental
compliance and financial reporting.
The board has retained responsibility
for the oversight of the company’s
risk management system. The
board ensures that appropriate
policies are in place to ensure
compliance with risk management
controls and requires management
to monitor, manage and report
on business risks.
The board has delegated the
oversight of financial and treasury
risk, including credit, liquidity and
market risks, to the audit committee
which will refer any relevant
matters to the full board. The
year end exposure to these risks
is described in Note 31 of the
financial statements.
The audit committee has approved
a global risk management charter
that specifies the responsibilities
of the general manager global risk
management (which includes the
internal audit function). The charter
provides authority to conduct
internal audits, risk reviews and
system-based analyses of the
internal controls in major
business systems.
The general manager, global
risk management reports directly
to the managing director and
provides a written report of his
activities at each meeting of
the audit committee. in so doing
he has continual access to the
chairman and members of the
audit committee. The internal
audit function is independent
of the external auditor.
All board committees report to the
board on risk management issues
within their areas of responsibility.
The company recognises a number
of operational risks related to its
crop protection business including:
• climate conditions and
seasonality;
• regulatory, freedom to operate,
product registration, product
use and sustainability;
• relationships with key suppliers
and customers; and
• licences and operating permits
for manufacturing facilities.
The managing director and the
company’s senior management
(group general managers [ggMs]
who report directly to the managing
director) are responsible for the
management of material risks
in their respective areas of
responsibility.
The managing director’s and
ggMs’ regular reports, submitted
for review to each board meeting,
will include relevant commentary
on any material risk. The board
also requires the managing
director and ggMs to provide
the board, for its annual strategy
meeting, with a report and
assurance that all material risks
are being effectively managed.
Such a report was received in
the current reporting period.
Local and regional financial
controllers complete half yearly
certificates, which are reviewed
by the chief financial officer and
the audit committee as part of
the company’s half year reporting
to the market and to achieve
compliance with section 295A
of the corporations Act. in
accordance with Section 295A,
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cORPORaTe gOveRnance cOnTinued
the board procedures to safeguard
the integrity of the company’s
financial reporting require the
chief executive officer and the
chief financial officer to state
in writing to the board that:
• the company’s financial reports
present a true and fair view,
in all material respects, of the
company’s financial condition
and operational results and
are in accordance with relevant
accounting standards; and
• the statement is founded
on a sound system of risk
management and internal
compliance and control,
which is operating effectively
in all material respects in relation
to financial reporting risks.
The board received in the current
reporting period an assurance
from the chief executive officer
and chief financial officer that
the declaration relating to the
company’s financial reports has
been made with due regard to
appropriate risk management
controls.
A summary of the company’s
policies on risk oversight and
management of material business
risks is available in the corporate
governance section of the
company’s website. Nufarm’s
management of risk is consistent
with ASx Principle 7.
Remuneration
The board has procedures to
ensure that the level and structure
of remuneration for executives
and directors is appropriate.
Remuneration committee
Doug curlewis is chairman of
the remuneration committee
and Kerry hoggard and Donald
Mcgauchie are members, with
a majority of independent directors.
The committee is chaired by an
independent director.
The committee’s formal charter
includes responsibility to:
• review and recommend to
the board the remuneration
packages and policies applicable
to key executives and directors;
and
• ensure remuneration packages
and policies attract, retain and
motivate high calibre executives.
The committee reports to the
board on all matters and the board
makes all decisions, except when
power to act is delegated expressly
to the committee.
Remuneration of non-executive
directors
The board’s policy with regard
to non-executive directors
remuneration is set out in the
remuneration report on pages
32 to 38.
A copy of the remuneration
committee charter and the
company policy on prohibiting
senior executives from hedging
any shares offered under the
executive share plan are available
in the corporate governance
section of the company’s website.
Nufarm’s remuneration policies
are consistent with ASx Principle 8.
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Financial sTaTeMenTs
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DIRECTORS’ REPORT
The directors present their report together with the financial report of Nufarm Limited (‘the company’) and of the
group, being the company and its subsidiaries and the group’s interests in associates and jointly controlled entities,
for the financial year ended 31 July 2009 and the auditor’s report thereon.
Directors
The directors of the company at any time during or since the end of the financial year are:
KM Hoggard (Chairman)
GDW Curlewis (Deputy Chairman)
DJ Rathbone AM (Managing Director)
Dr RJ Edgar (appointed 1 July 2009)
Dr WB Goodfellow
GA Hounsell
DG McGauchie AO
Dr JW Stocker AO
Unless otherwise indicated, all directors held their position as a director throughout the entire period and up
to the date of this report. Details of the qualifications, experience and responsibilities and other directorships
of the directors are set out on pages 18 and 19.
Company secretary
The company secretary is R Heath.
Details of the qualifications and experience of the company secretary are set out on page 16.
Directors’ interests in shares and Step-up Securities
Relevant interests of the directors in the shares and Step-up Securities issued by the company and related bodies
corporate are, at the date of this report, as notified by the directors to the Australian Securities Exchange in
accordance with S205G(1) of the Corporations Act 2001, as follows:
Nufarm Ltd
ordinary shares
Nufarm Finance (NZ) Ltd
Step-up Securities
KM Hoggard1
GDW Curlewis1
DJ Rathbone
Dr RJ Edgar
Dr WB Goodfellow1, 2
GA Hounsell1
DG McGauchie1
Dr JW Stocker1
2,383,614
48,280
24,162,610
–
708,018
46,720
20,038
43,780
–
–
–
–
47,723
–
–
–
1 The shareholdings of KM Hoggard, GDW Curlewis, Dr WB Goodfellow, GA Hounsell, DG McGauchie and Dr JW Stocker include
shares issued under the company’s non-executive director share plan and held by Pacific Custodians Pty Ltd as trustee of the plan.
2 The holding of Dr WB Goodfellow includes his relevant interest in:
(i) St Kentigern Trust Board (430,186 shares and 19,727 Step-up Securities) – Dr Goodfellow is chairman of the Trust Board.
Dr Goodfellow does not have a beneficial interest in these shares or Step-up Securities.
(ii) Sulkem Company Limited (117,628 shares).
(iii) Auckland Medical Research Foundation (26,558 Step-up Securities). Dr Goodfellow does not have a beneficial interest in these
Step-up Securities.
(iv) Trustees of the Goodfellow Foundation (35,698 shares and 1,338 Step-up Securities). Dr Goodfellow is chairman of the Trust
Board and does not have a beneficial interest in these shares or Step-up Securities.
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DIRECTORS’ REPORT CONTINuED
Directors’ meetings
The number of directors’ meetings (including meetings of committees of directors) and number of meetings
attended by each of the directors of the company during the financial year are:
Committees
Director
Board
Audit
KM Hoggard1
GDW Curlewis
DJ Rathbone1
Dr RJ Edgar2
Dr WB Goodfellow1
GA Hounsell1
DG McGauchie
Dr JW Stocker1
A
8
8
8
1
8
8
8
8
B
8
8
8
1
8
8
8
8
A
3
3
–
–
–
3
–
3
B
3
3
3
–
–
3
–
3
Remuneration
B
A
Nomination
B
A
4
4
–
–
–
–
4
–
4
4
4
–
2
2
4
1
–
3
–
–
3
–
3
–
3
3
3
–
3
1
3
1
Column A: indicates the number of meetings held during the period the director was a member of the board
and/or committee.
Column B: indicates the number of meetings attended during the period the director was a member of the
board and/or committee.
Other meetings of committees of directors are convened as required to discuss specific issues or projects.
1 Attended meeting although not a member of the committee. All directors are entitled to attend any committee meetings.
2 Dr RJ Edgar was appointed a director on 1 July 2009.
Principal activities and changes
Nufarm manufactures and supplies a range of agricultural chemicals used by farmers to protect crops from damage
caused by weeds, pests and disease. The company has production and marketing operations throughout the world
and sells products in more than 100 countries. Nufarm’s crop protection products enjoy a reputation for high quality
and reliability and are supported by strong brands, a commitment to innovation and a focus on close customer
relationships.
Nufarm employs 3,155 people at its various locations in Australasia, Africa, the Americas and Europe.
The company is listed on the Australian Securities Exchange (symbol NUF). Its head office is located at Laverton
in Melbourne.
Results
The net profit attributable to members of the consolidated entity for the 12 months to 31 July 2009 is $79.9 million.
The comparable figure for the 12 months to 31 July 2008 was $137.9 million.
Dividends
The following dividends have been paid, declared or recommended since the end of the preceding financial year:
The final dividend for 2007–08 of 23 cents paid 17 November 2008
The interim dividend for 2008–09 of 12 cents paid 8 May 2009
The final dividend for 2008–09 of 15 cents as declared and recommended by the directors
is payable 13 November 2009
$000
42,828
22,469
32,709
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DIRECTORS’ REPORT CONTINuED
Nufarm Step-up Securities distribution payment
The following Nufarm Step-up Securities distribution payments have been paid since the end of the preceding
financial year:
Distribution payment for the period 15 April 2008 – 15 October 2008 at the rate
of 9.97 per cent per annum paid 15 October 2008
Distribution payment for the period 16 October 2008 – 15 April 2009 at the rate
of 7.48 per cent per annum paid 15 April 2009
$000
12,547
9,361
Review of operations
The review of the operations during the financial year and the results of those operations are set out in the managing
director’s review on pages 3 to 6 and the business review on pages 8 to 12.
State of affairs
The state of the company’s affairs are set out in the managing director’s review on pages 3 to 6 and the business
review on pages 8 to 12.
Operations, financial position, business strategies and prospects
The directors believe that information on the company, which enables an informed assessment of its operations,
financial position, strategies and prospects, is contained in the financial accounts, managing director’s review
and the business review.
Events subsequent to reporting date
On 28 September 2009, the directors declared a final unfranked dividend of 15 cents per share, payable
13 November 2009.
With the UK Competition Commission inquiry now finalised, plans are advancing for the consolidation of the business
activities in the UK at the Wyke location. The plant at Belvedere will cease production in October 2009. No material
gain or loss is expected from the closure of the site.
On 5 August 2009, Nufarm acquired two US based sorghum companies, Richardson Seeds Ltd and MMR Genetics
Ltd. Richardson Seeds is a leading producer and marketer of sorghum seed hybrids, with a leading market share
in the US and expanding positions internationally. MMR Genetics is a global leader in the development of elite
sorghum germplasm, used by many of the world’s top seed companies. Combined sales of Richardson Seeds
and MMR in 2008 totaled approximately US$22 million.
Likely developments
The directors believe that likely developments in the company’s operations and the expected results of those
operations are contained in the managing director’s review and the business review.
Environmental performance
Details of Nufarm’s performance in relation to environmental regulations are set out on pages 14 to 15. The company
incurred the following prosecutions or fines in the financial period relating to environmental performance, namely
the Chicago Heights facility was fined US$450 for three small violations of the permit limits for discharge of trade
waste to sewer. The company publishes annually a health, safety and environment report. This report can be
viewed on the company’s website or a copy will be made available upon request to the company secretary.
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DIRECTORS’ REPORT CONTINuED
Non-audit services
During the year KPMG, the company’s auditor, has performed certain other services in addition to their statutory
duties. Details of the audit fee and non-audit services are set out in note 41 of the financial report.
The board has considered the non-audit services provided during the year by the auditor and in accordance with
written advice provided by resolution of the audit committee, is satisfied that the provision of those non-audit
services during the year by the auditor is compatible with, and did not compromise, the auditor independence
requirements of the Corporations Act 2001 for the reason that all non-audit services were subject to the corporate
governance procedures adopted by the company and have been reviewed by the audit committee to ensure
they do not impact the integrity and objectivity of the auditor.
Remuneration report – audited
Remuneration committee
The remuneration committee reviews and makes recommendations to the board on remuneration policies
and packages applicable to key management personnel and directors and ensures that remuneration policies
and packages retain and motivate high calibre executives and that remuneration policies demonstrate a clear
relationship between executive remuneration and company performance.
In light of the company’s performance for the financial year ended 31 July 2009, the board has resolved:
• at the 31 January 2009 half year, performance conditions for applicable cash incentive payments had been
met. Notwithstanding, only half of the entitlement was paid at that time;
• the company did not achieve the performance condition for the share component of the incentive program
and therefore no shares will be delivered to executives for the period ended 31 July 2009; and
• there will be no increases in directors’ fees for the period ending 31 July 2010.
Key management personnel include the five most highly remunerated executives in accordance with S300A
of the Corporations Act.
The remuneration levels of the managing director and key management personnel are recommended by the
remuneration committee and approved by the board, having taken advice from independent external advisors.
Principles of compensation
Executives
The Nufarm remuneration policy has been developed to ensure the company attracts and retains the highly skilled
people required to successfully manage and create shareholder value from a large diversified company with extensive
international operations.
The company has adopted a remuneration policy based on total target reward (TTR), which comprises two
components:
• fixed reward (TEC) – cash and benefits that reflect local market conditions and individual contribution. The reward
level is set relative to pertinent and prevailing executive employment market conditions for high calibre talent
in the geographies where Nufarm operates. The company’s policy position for TEC for Australian executives,
is benchmarked with reference to the 62nd percentile of similar sized companies within Mercer’s executive
remuneration database; and
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DIRECTORS’ REPORT CONTINuED
• an incentive program – upon achievement of the performance condition over six monthly periods, 50 per cent
of the incentive will be paid in cash. Upon achievement of the performance condition for the full year, 50 per
cent of the incentive will be delivered by way of shares, which, for the key management personnel, ensures
a longer-term focus to achieve benefits consistent with the delivery of sustained growth of shareholder value.
The exception is the current managing director who is paid in cash because of the very substantial shareholding
he currently controls in the company.
Management personnel are not permitted to hedge any shares issued to them under the incentive program
whilst they remain held in trust.
If the company’s financial objectives are achieved and the incentive program is paid at 100 per cent, the TTR will
meet the company’s TTR policy position of the upper quartile of similar sized companies within Mercer’s executive
remuneration database. Set out below are details of the maximum payment for the incentive program where
there has been above target achievement of the incentive program performance condition.
The performance condition for the incentive program is based on return on funds employed (ROFE) in the business.
Return is calculated on the group’s earnings before interest and taxation and adjusted for any non-operating items.
Funds employed are represented by shareholders’ funds plus total interest bearing debt.
The company believes ROFE is an appropriate performance condition for the following reasons:
• for many years the board has measured the company’s performance using an ‘economic value added’
methodology. It is believed that if the company can consistently add economic value (a satisfactory margin
above the cost of capital), then this will be recognized in share value; and
• ROFE ensures management is focused on the efficient use of capital and the measure remains effective
regardless of the mix of equity and debt, which may change from time to time.
The remuneration committee and the board review the level of the performance condition on an annual basis.
Whilst it believes ROFE is an appropriate performance condition for the company’s incentive program, the board
also reviews the company’s total shareholder return (TSR) with relevant comparator groups.
Each year, the board reviews and establishes the performance hurdle for the incentive program. The hurdle
reflects targets for specific objectives and increasing company value, consistent with the company’s business
and investment strategies.
The current target ROFE hurdle for the incentive program is 17.25 per cent.
At the end of each half year and financial year the board assesses company performance against target ROFE
to determine the percentage of any offer to be made under the cash component of the incentive program.
At the end of each financial year, the board:
• assesses company performance against the target ROFE hurdle to determine the percentage of any offer
to be made under the share component of the incentive program; and
• reviews target ROFE for the incentive program for the following financial period.
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DIRECTORS’ REPORT CONTINuED
For the incentive program, 25 per cent of the incentive will be payable on achievement of 90 per cent of target
ROFE with a linear progression to 100 per cent of the incentive on achievement of target ROFE and a maximum
of 175 per cent of the incentive on achievement of 110 per cent of target ROFE.
If less than 90 per cent of target ROFE is achieved, no incentive will be paid.
The following table shows the proportion of incentive as a percentage of TTR.
Managing director
Key management personnel other than non-executive directors
Percentage (%) target ROFE achieved
<90
0
0
90
20
14
100
110
50
40
64
54
Consequences of performance on shareholders’ wealth
The executive remuneration policy is designed to align remuneration with the creation of shareholder wealth.
The incentive program links executive reward with company performance.
In light of the company’s performance for the financial year ended 31 July 2009, target ROFE for the incentive
program was not achieved for the year ended 31 July 2009. Therefore, as set out in total B in the table of key
management personnel remuneration on page 37 of this report, for the period ended 31 July 2009, executives
will receive 25 per cent of the cash component of the incentive program (referable to the half year ended
31 January 2009) and no shares under the share component of the incentive program.
Set out below is a table which summarises the company’s performance and shareholder wealth statistics over
the last five years.
In considering the consolidated entity’s performance and benefits for shareholders’ wealth, the remuneration
committee and the board have regard to the following indices in respect of the current financial year and the
previous four financial years.
Operating
EBIT
ROFE
achieved
EPS
**Total
Dividend Dividends *Change in Share price shareholder
return
paid share price
31 July
rate
$m
%
cents per share
$000
$
$
2005
2006
2007
2008
2009
196.6
211.2
217.8
311.2
280.3
19.8
17.8
16.6
17.2
11.7
60.5
60.3
59.2
69.7
33.5
26
27
31
33
35
40,548
45,879
53,145
58,332
65,297
4.08
(1.37)
4.31
4.05
(5.86)
10.15
8.80
13.10
16.85
10.84
* This column reflects the change in share price from 1 August to 31 July in the relevant financial year.
** Source: Goldman Sachs JBWere – total shareholder return as at 30 June.
%
63
(2.3)
40
17
(41)
Service contracts
The company has employment contracts with the managing director and the key management personnel.
These contracts formalise the terms and conditions of employment. The contracts are for an indefinite term.
The company may terminate the contracts upon, in the case of the managing director, 12 months, and in the case
of key management personnel, six months notice, in which case a termination payment equivalent to, in the case
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DIRECTORS’ REPORT CONTINuED
of the managing director, 24 months, and in the case of key management personnel, 12 months, total employment
cost (base salary plus value of benefits such as motor vehicle and superannuation and any fringe benefits tax
in relation to those benefits,) will be paid. The company may terminate the employment contracts immediately
for serious misconduct.
Non-executive directors (NED)
The board’s policy with regard to NED remuneration is to position board remuneration at the market median with
comparable sized listed entities.
The board determines the fees payable to non-executive directors within the aggregate amount approved from
time to time by shareholders. At the company’s 2006 AGM, shareholders approved an aggregate of $1,200,000
per year (including superannuation costs).
Set out below are details of the annual fees payable at 31 July 2009 (excluding superannuation costs).
Chairman1
Deputy chairman1
Director board fees
Chairman audit committee
Chairman other board committees
Member audit committee
Member other board committees2
$
290,000
170,000
115,000
25,000
10,000
5,000
2,500
The board has resolved that there will be no increases in these fees for the period ending 31 July 2010.
1 The chairman, KM Hoggard and the deputy chairman, GDW Curlewis, receive no fees as members of any committee.
2 There is some common membership on the remuneration committee and nomination committee. Only one fee is paid where
a director is a member of both committees.
The board has created a non-executive share plan (NED plan) whereby a director can elect to commit a proportion
of director fees to acquire company shares. The number of shares available in the plan will be calculated quarterly,
using the weighted average of the price at which shares were traded on the ASX in the five days up to and
including the day when shares are allocated to a director. Shares in the plan will not vest until the earlier of three
years or retirement. Other than in this respect, non-executive director remuneration is paid in cash. No element
of remuneration is performance related, i.e., linked to short term or long term incentives.
The NED plan has been suspended pending resolution of the changes to taxation of share plans introduced
by the Federal Government.
On 31 October 2003, directors unanimously resolved to discontinue the directors’ retirement benefit plan and
benefits accrued under the plan were calculated and, at the option of the relevant director, converted into shares
or paid to the director’s superannuation fund.
Remuneration of directors and executives
Details of the nature and amount of each major element of remuneration in respect of key management personnel,
which includes each director of the company and each of the five most highly remunerated executives and
relevant group executives who receive the highest remuneration are:
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Short term
Short term
employment
Post-
Share based
payments
Other
long term
Salary Cash bonus Non-monetary
benefits
$
(vested3)
$
and fees
$
DIRECTORS’ REPORT CONTINuED
In AuD
Directors
non-executive
KM Hoggard (Chairperson)
GDW Curlewis (Deputy chairman)
Dr RJ Edgar5
Dr WB Goodfellow
GA Hounsell
DG McGauchie
Dr JW Stocker
RFE Warburton6
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
290,000
228,000
116,500
112,000
–
–
100,250
86,750
122,750
110,500
117,500
92,750
102,750
89,750
–
57,911
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Executive director
DJ Rathbone (Managing director)
Executive officers
DA Pullan (Group general manager operations)
KP Martin (Chief financial officer)
B Benson (Group general manager marketing)
RF Ooms (Group general manager chemicals)
RG Reis (Group general manager corporate
strategy and external affairs)
DA Mellody (Group general manager global marketing)
MJ Pointon (Group general manager innovation
and development)
R Heath (Company secretary)
2009
2008
1,251,350
1,124,760
923,000
1,525,244
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
539,456
476,138
508,708
447,447
511,820
462,264
470,017
443,781
452,278
387,152
482,846
324,688
246,643
200,031
228,780
219,309
57,500
535,051
55,000
502,077
55,000
498,387
49,583
500,386
45,833,
377,168
38,922
330,815
53,534
61,648
25,417
257,650
1 Total A represents total remuneration paid in the financial year.
2 Total B represents total remuneration referable to the financial period ended 31 July. The difference between Total A and Total B
reflects the timing of incentive payments being accrued and settled.
3 All cash bonuses were fully vested.
4 Other than to MJ Pointon, who was promoted to the role of group general manager innovation and development in 2008, no share based
offers were made to executives for the period ended 31 July 2008 because of the ChemChina takeover offer. Payments were made in cash.
5 Dr RJ Edgar was appointed a director on 1 July 2009.
6 RFE Warburton retired as a director on 5 December 2007.
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–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
64,029
37,587
25,890
43,010
27,063
25,713
29,859
36,191
13,595
10,423
39,401
36,049
–
23,919
28,761
26,046
26,630
32,519
Total Superannuation
Equity settled4
$
$
Total A
Total B
Total Remuneration
remuneration1 relative to year2
290,000
228,000
116,500
112,000
–
–
100,250
86,750
122,750
110,500
117,500
92,750
102,750
89,750
–
57,911
2,238,379
2,687,591
622,846
1,054,199
590,771
975,237
596,679
996,842
533,195
954,590
537,512
800,369
521,768
679,422
328,938
287,725
280,827
509,478
29,000
24,000
45,000
42,000
–
–
11,750
9,625
14,000
12,000
11,750
9,750
12,000
9,875
–
6,266
18,332
15,286
94,104
93,339
94,006
87,171
94,866
83,419
90,010
87,901
46,897
44,692
47,430
42,150
44,853
34,015
44,983
42,653
$
–
–
–
–
12,000
25,500
17,250
9,500
17,250
9,500
–
4,750
17,250
9,500
–
4,750
–
–
–
–
–
–
–
–
208,333
200,000
200,000
188,333
166,667
150,000
74,866
47,045
96,667
–
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
23,943
29,892
27,007
32,841
19,813
24,085
15,865
15,872
21,282
47,215
15,074
27,999
15,409
4,471
9,408
11,353
$
–
–
319,000
264,000
187,000
154,000
129,250
105,875
154,000
132,000
129,250
107,250
132,000
109,125
–
68,927
949,226
1,177,430
911,784
1,095,249
911,358
1,104,346
827,403
1,058,363
772,358
892,276
734,272
749,571
464,066
373,256
431,885
563,484
$
–
–
319,000
264,000
187,000
154,000
129,250
105,875
154,000
132,000
129,250
107,250
132,000
109,125
–
68,927
740,893
1,059,046
711,784
1,018,172
711,358
1,005,959
639,070
934,644
605,691
848,441
584,272
718,756
389,200
448,122
335,218
499,167
114,567
105,538
2,371,278
2,808,415
1,591,278
2,583,171
Short term
Salary Cash bonus Non-monetary
and fees
(vested3)
benefits
$
$
In AuD
Directors
non-executive
KM Hoggard (Chairperson)
GDW Curlewis (Deputy chairman)
Dr RJ Edgar5
Dr WB Goodfellow
GA Hounsell
DG McGauchie
Dr JW Stocker
RFE Warburton6
Executive director
DJ Rathbone (Managing director)
Executive officers
DA Pullan (Group general manager operations)
KP Martin (Chief financial officer)
B Benson (Group general manager marketing)
RF Ooms (Group general manager chemicals)
RG Reis (Group general manager corporate
strategy and external affairs)
DA Mellody (Group general manager global marketing)
MJ Pointon (Group general manager innovation
and development)
R Heath (Company secretary)
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
57,500
535,051
55,000
502,077
55,000
498,387
49,583
500,386
45,833,
377,168
38,922
330,815
53,534
61,648
25,417
257,650
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
290,000
228,000
116,500
112,000
–
–
100,250
86,750
122,750
110,500
117,500
92,750
102,750
89,750
–
57,911
539,456
476,138
508,708
447,447
511,820
462,264
470,017
443,781
452,278
387,152
482,846
324,688
246,643
200,031
228,780
219,309
2009
2008
1,251,350
1,124,760
923,000
1,525,244
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
64,029
37,587
25,890
43,010
27,063
25,713
29,859
36,191
13,595
10,423
39,401
36,049
–
23,919
28,761
26,046
26,630
32,519
2 Total B represents total remuneration referable to the financial period ended 31 July. The difference between Total A and Total B
1 Total A represents total remuneration paid in the financial year.
reflects the timing of incentive payments being accrued and settled.
3 All cash bonuses were fully vested.
4 Other than to MJ Pointon, who was promoted to the role of group general manager innovation and development in 2008, no share based
offers were made to executives for the period ended 31 July 2008 because of the ChemChina takeover offer. Payments were made in cash.
5 Dr RJ Edgar was appointed a director on 1 July 2009.
6 RFE Warburton retired as a director on 5 December 2007.
DIRECTORS’ REPORT CONTINuED
Short term
Post-
employment
Share based
payments
Other
long term
Total Superannuation
$
$
Equity settled4
$
290,000
228,000
116,500
112,000
–
–
100,250
86,750
122,750
110,500
117,500
92,750
102,750
89,750
–
57,911
2,238,379
2,687,591
622,846
1,054,199
590,771
975,237
596,679
996,842
533,195
954,590
537,512
800,369
521,768
679,422
328,938
287,725
280,827
509,478
29,000
24,000
45,000
42,000
–
–
11,750
9,625
14,000
12,000
11,750
9,750
12,000
9,875
–
6,266
18,332
15,286
94,104
93,339
94,006
87,171
94,866
83,419
90,010
87,901
46,897
44,692
47,430
42,150
44,853
34,015
44,983
42,653
Total A
Total B
Total Remuneration
remuneration1 relative to year2
$
$
319,000
264,000
187,000
154,000
–
–
129,250
105,875
154,000
132,000
129,250
107,250
132,000
109,125
–
68,927
319,000
264,000
187,000
154,000
–
–
129,250
105,875
154,000
132,000
129,250
107,250
132,000
109,125
–
68,927
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
12,000
25,500
–
–
–
17,250
9,500
17,250
9,500
–
4,750
17,250
9,500
–
4,750
–
–
114,567
105,538
2,371,278
2,808,415
1,591,278
2,583,171
208,333
–
200,000
–
200,000
–
188,333
–
166,667
–
150,000
–
74,866
47,045
96,667
–
23,943
29,892
27,007
32,841
19,813
24,085
15,865
15,872
21,282
47,215
15,074
27,999
15,409
4,471
9,408
11,353
949,226
1,177,430
911,784
1,095,249
911,358
1,104,346
827,403
1,058,363
772,358
892,276
734,272
749,571
464,066
373,256
431,885
563,484
740,893
1,059,046
711,784
1,018,172
711,358
1,005,959
639,070
934,644
605,691
848,441
584,272
718,756
389,200
448,122
335,218
499,167
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DIRECTORS’ REPORT CONTINuED
Remuneration options: granted and vested during the year
During the year there were no options granted to directors or executives, nor were any options vested or exercised
by the specified executives.
Shares issued as a result of the exercise of options
There were no shares issued as a result of the exercise of options during the year.
unissued shares under option
There are no unissued shares under option.
Indemnities and insurance for directors and officers
The company has entered into insurance contracts, which indemnify directors and officers of the company, and
its controlled entities against liabilities. In accordance with normal commercial practices, under the terms of the
insurance contracts, the nature of the liabilities insured against and the amount of premiums paid are confidential.
An indemnity agreement has been entered into between the company and each of the directors named earlier
in this report. Under the agreement, the company has agreed to indemnify the directors against any claim or for
any expenses or costs, which may arise as a result of the performance of their duties as directors. There are no
monetary limits to the extent of this indemnity.
Lead auditor’s independence declaration
The lead auditor’s independence declaration is set out on page 39 and forms part of the directors’ report for
the financial year ended 31 July 2009.
Rounding of amounts
The company is of a kind referred to in Australian Securities and Investment Commission Class Order 98/100 dated
10 July 1998 and, in accordance with that class order, amounts in the financial statements and the directors’
report have been rounded off to the nearest thousand dollars, unless otherwise stated.
This report has been made in accordance with a resolution of directors.
KM Hoggard
Director
DJ Rathbone
Director
Melbourne
28 September 2009
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38
LEAD AuDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
To: the directors of Nufarm Limited
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended
31 July 2009 there have been:
(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001
in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Paul J McDonald
Partner
Melbourne
28 September 2009
KPMG, an Australian partnership and a member firm of the KPMG network of independent member films affiliated with
KPMG International, a Swiss cooperative.
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39
INCOmE STATEmENTS
FOR THE yEAR ENDED 31 JULy 2009
Consolidated
Company
Note
2009
$000
2008
$000
2009
$000
2008
$000
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
Sales, marketing and distribution expenses
General and administrative expenses
Research and development expenses
Share of net profits of associates
Operating result
Barter trade loss realised on option
contracts – Brazil
Net non-cash revaluation profit/(loss)
on proceeds from Nufarm Step-up Securities
financing
Profit before net financing costs
and income tax
Financial income
Financial expenses
Net financing costs
7
19
6
6
6
10
10
2,677,083
(2,121,446)
2,492,458
(1,747,965)
555,637
744,493
11,054
(210,914)
(162,018)
(45,375)
3,080
151,464
5,519
(263,878)
(138,378)
(41,585)
2,698
308,869
–
(34,259)
(431)
(4,119)
48,584
(36,184)
12,400
55,249
(3,846)
(5,057)
(860)
1,090
58,976
–
–
57,919
(39,910)
18,009
63,060
(4,784)
(7,076)
(515)
1,237
69,931
–
–
151,033
270,491
58,976
69,931
8,177
(100,253)
(92,076)
3,202
(83,397)
(80,195)
698
(3,160)
(2,462)
119
(3,183)
(3,064)
Profit before income tax
58,957
190,296
56,514
66,867
Income tax (expense)/benefit
11
21,585
(52,176)
(1,165)
(2,169)
Profit for the period from continuing
operations
6
80,542
138,120
55,349
64,698
Attributable to:
Equity holders of the company
Minority interest
79,877
665
137,915
205
55,349
–
64,698
–
Profit for the period
80,542
138,120
55,349
64,698
Earnings per share
Basic earnings per share
Diluted earnings per share
Continuing operations
Basic earnings per share
Diluted earnings per share
30
30
30
30
33.5
33.5
33.5
33.5
69.7
69.7
69.7
69.7
The income statements are to be read in conjunction with the attached notes.
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40
BALANCE ShEETS
AS AT 31 JULy 2009
Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax assets
Total current assets
Non-current assets
Receivables
Equity accounted investments
Other investments
Deferred tax assets
Property, plant and equipment
Intangible assets
Other financial assets
Total non-current assets
TOTAL ASSETS
Current liabilities
Bank overdraft
Trade and other payables
Loans and borrowings
Employee benefits
Current tax payable
Provisions
Total current liabilities
Non-current liabilities
Payables
Loans and borrowings
Deferred tax liabilities
Employee benefits
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Share capital
Reserves
Retained earnings
Equity attributable to equity holders
of the company
Nufarm Step-up Securities
Minority interest
TOTAL EQuITY
Consolidated
Company
Note
2009
$000
2008
$000
2009
$000
2008
$000
15
16
17
18
16
19
20
18
22
23
21
15
24
25
26
18
28
24
25
18
26
29
29
29
29
29
29
84,312
787,760
797,383
48,973
59,143
839,963
843,544
61,185
1,856
790,324
17,734
93
3,308
467,536
17,318
12,860
1,718,428
1,803,835
810,007
501,022
33,125
12,468
7,442
194,960
435,468
848,739
967
29,041
24,264
354
93,270
433,112
821,500
8,504
–
9,803
306,331
2,921
4,864
971
–
–
9,206
300,769
1,603
5,283
49
–
1,533,169
1,410,045
324,890
316,910
3,251,597
3,213,880
1,134,897
817,932
35,669
407,421
584,692
20,671
17,772
26,091
20,841
778,060
587,612
18,222
12,461
6,184
–
107,397
–
432
5,804
–
–
133,671
–
342
7,227
–
1,092,316
1,423,380
113,633
141,240
17,695
402,327
64,215
43,105
527,342
39,842
351,456
57,239
36,745
485,282
–
–
–
–
–
–
–
74
52
126
1,619,658
1,908,662
113,633
141,366
1,631,939
1,305,218
1,021,264
676,566
812,844
(13,006)
584,348
456,870
6,822
593,558
812,844
36,027
172,393
1,384,186
246,932
821
1,057,250
246,932
1,036
1,021,264
–
–
456,870
37,355
182,341
676,566
–
–
1,631,939
1,305,218
1,021,264
676,566
The balance sheets are to be read in conjunction with the attached notes.
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STATEmENTS OF CASh FLOwS
FOR THE yEAR ENDED 31 JULy 2009
Consolidated
Company
Note
2009
$000
2008
$000
2009
$000
2008
$000
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
Payment for barter trade loss realised
on option contracts – Brazil
2,874,917
(2,799,092)
2,580,996
(2,523,981)
75,825
8,177
423
(100,252)
(37,298)
57,015
3,202
373
(83,397)
(70,336)
53,928
(54,180)
(252)
698
52,700
(3,160)
8,827
65,692
(55,281)
10,411
119
59,817
(3,183)
(10,921)
–
(34,259)
–
–
Net cash from operating activities
37
(53,125)
(127,402)
58,813
56,243
Cash flows from investing activities
Proceeds from sale of property, plant
and equipment
Proceeds from sale of businesses
and investments
Payments for plant and equipment
Payment for investments
Purchase of businesses, net of cash acquired
Payments for acquired intangibles and
major product development expenditure
284
8,086
–
70
12,821
(54,317)
(8,321)
(14,454)
3,306
(69,509)
–
(374,256)
–
(191)
–
–
–
(1,524)
–
–
(48,257)
(61,211)
(989)
(62)
Net investing cash flows
(112,244)
(493,584)
(1,180)
(1,516)
Cash flows from financing activities
Shares issued under private placement
(net of costs)
Shares issued under share purchase plan
Proceeds from borrowings
Repayment of borrowings
Repayment of receivables securitisation
program
Advances to controlled entities
Distribution to NSS holders
Dividends paid
294,764
35,691
56,022
(43,799)
(94,728)
–
(21,908)
(53,208)
197,755
10,791
600,774
(148,272)
–
–
(22,036)
(58,422)
294,764
35,691
–
–
–
(337,008)
–
(52,592)
197,755
10,791
–
–
–
(212,452)
–
(58,264)
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Net financing cash flows
172,834
580,590
(59,145)
(62,170)
Net increase (decrease) in cash and cash
equivalents
Cash at the beginning of the year
Exchange rate fluctuations on foreign
cash balances
Cash and cash equivalents at 31 July
15
7,465
38,302
2,876
48,643
(40,396)
79,661
(1,512)
3,308
(963)
60
38,302
1,856
(7,443)
12,367
(1,616)
3,308
The statements of cash flows are to be read in conjunction with the attached notes.
STATEmENTS OF RECOGNISED INCOmE AND ExPENSE
FOR THE yEAR ENDED 31 JULy 2009
Consolidated
Company
Note
2009
$000
2008
$000
2009
$000
2008
$000
Items recognised directly in equity
Foreign exchange translation differences
for foreign operations
Actuarial gains/(losses) on defined
benefit plans
Income tax on share issue costs
recognised directly in equity
29
(19,788)
(2,491)
(1,328)
(7,871)
29
(8,454)
(2,451)
–
–
29
1,683
699
1,683
699
Income and expense recognised directly
in equity
(26,559)
(4,243)
355
(7,172)
Profit for the year
80,542
138,120
55,349
64,698
Total recognised income and expense
for the year
53,983
133,877
55,704
57,526
Attributable to:
Equity holders of the parent
Minority interest
53,895
88
133,702
175
55,704
–
57,526
–
Total recognised income and expense
for the year
53,983
133,877
55,704
57,526
Other movements in equity arising from transactions with owners are set out in note 29.
The amounts recognised directly in equity are disclosed net of tax – see note 11 for tax effect.
The statements of recognised income and expense are to be read in conjunction with the attached notes.
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NOTES TO ThE FINANCIAL STATEmENTS
1. Reporting entity
Nufarm Limited (the ‘company’) is domiciled in Australia. The address of the company’s registered office is
103–105 Pipe Road, Laverton North, Victoria, 3026. The consolidated financial statements of the company as
at and for the year ended 31 July 2009 comprise the company and its subsidiaries (together referred to as the
‘group’ and individually as ‘group entities’) and the group’s interest in associates and jointly controlled entities.
The group is primarily involved in the manufacture and sale of crop protection products used by farmers to
protect crops from damage caused by weeds, pests and disease.
2. Basis of preparation
(a) Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with Australian
Accounting Standards (AASBs) (including Australian interpretations) adopted by the Australian Accounting
Standards Board (AASB) and the Corporations Act 2001. The consolidated financial report of the group and the
financial report of the company comply with International Financial Reporting Standards (IFRS) and interpretations
adopted by the International Accounting Standards Board (IASB).
(b) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for derivative
financial instruments which are measured at fair value. The methods used to measure fair values are discussed
further in note 4.
(c) Functional and presentation currency
These consolidated financial statements are presented in Australian dollars, which is the company’s functional
currency. The company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance
with that Class Order, all financial information presented in Australian dollars has been rounded to the nearest
thousand unless otherwise stated.
(d) Use of estimates and judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate
is revised and in any future periods affected.
Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies
that have the most significant impact on the amount recognised in the financial statements are described below.
(i) Business combinations
Fair valuing assets and liabilities acquired in a business combination involves making assumptions about the
timing of cash inflows and outflows, growth assumptions, discount rates and cost of debt. Refer to note 14
for details of acquisitions made during the period.
(ii) Impairment testing
The group determines whether goodwill and intangibles with indefinite useful lives are impaired on an annual
basis. This requires an estimation of the recoverable amount of the cash-generating units, using a value in use
discounted cash flow methodology. The estimation of future cash flows requires management to make significant
estimates and judgements concerning the identification of impairment indicators, earnings before interest and
tax, growth rates, applicable discount rates and useful lives. Further details can be found in note 23 on intangibles.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
2. Basis of preparation (continued)
(d) Use of estimates and judgements (continued)
(iii) Income taxes
The group is subject to income taxes in Australia and overseas jurisdictions. There are many transactions
and calculations undertaken during the ordinary course of business for which the ultimate tax determination
is uncertain. Where the final tax outcome of these matters is different from the amounts initially recorded, such
differences will impact the current and deferred tax provisions in the period in which the tax determination is
made. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will
be available against which the assets can be utilised.
(iv) Defined benefit plans
A liability in respect of defined benefit pension plans is recognised in the balance sheet, and is measured as
the present value of the defined benefit obligation at the reporting date less the fair value of the pension plan’s
assets. The present value of the defined benefit obligation is based on expected future payments which arise
from membership of the fund at the reporting date, calculated annually by independent actuaries. Consideration
is given to expected future salary levels, experience of employee departures and periods of service. Refer note
26 for details of the key assumptions used in determining the accounting for these plans.
(v) Valuation of inventories
Inventories of finished goods, raw materials and work in progress are valued at lower of cost and net realisable
value. The net realisable value of inventories is the estimated market price at the time the product is expected
to be sold.
(vi) Valuation of receivables
Nufarm and a major supplier are currently in dispute with respect to a claim that the supplier is liable for a relevant
share of losses attributable to the sale of product during the 2009 financial year.
The parties entered into an Agreement in 2002 that provides for the sharing of costs and proceeds associated
with Nufarm’s sale of products. Nufarm’s claim, for approximately $37 million, is being contested by the supplier.
Nufarm is confident it will recover all of this amount and will vigorously pursue its claim.
3. Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated
financial statements, and have been applied consistently by group entities.
Certain comparative amounts have been reclassified to conform with the current year’s presentation.
(a) Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the group. Control exists when the group has the power to govern the
financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements
of subsidiaries are included in the consolidated financial statements from the date that control commences until
the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align
them with the policies adopted by the group.
In the company’s financial statements, investments in subsidiaries are carried at cost.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
3. Significant accounting policies (continued)
(a) Basis of consolidation (continued)
Associates and jointly controlled entities (equity accounted investments)
Associates are those entities in which the group has significant influence, but not control, over the financial
and operating policies.
Significant influence is presumed to exist when the group holds between 20 and 50 per cent of the voting
power of another entity.
Jointly controlled entities are those entities over whose activities the group has joint control, established
by contractual agreement and requiring unanimous consent for strategic financial and operating decisions.
Associates and jointly controlled entities are accounted for using the equity method (equity accounted investments)
and are initially recognised at cost. The group’s investment includes goodwill identified on acquisition, net of any
accumulated impairment losses. The consolidated financial statements include the group’s share of the income
and expenses and equity movements of equity accounted investees, after adjustments to align the accounting
policies with those of the group, from the date that significant influence or joint control commences until the
date that significant influence or joint control ceases.
When the group’s share of losses exceeds its interest in an equity accounted investment, the carrying amount
of that interest is reduced to nil and the recognition of further losses is discontinued except to the extent that
the group has an obligation or has made payments on behalf of the investee.
Transactions eliminated on consolidation
Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted
investees are eliminated against the investment to the extent of the group’s interest in the investee. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of
impairment.
Gains and losses are recognised when the contributed assets are consumed or sold by the equity accounted
investee or, if not consumed or sold by the equity accounted investee, when the group’s interest in such entities
is disposed of.
(b) Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of group entities at
exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies
at the reporting date are retranslated to the functional currency at the foreign exchange rate at that date. Non-
monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated
to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency
differences arising on retranslation are recognised in profit or loss. Foreign currency gains and losses are included
in cost of sales as they mostly relate to the purchase of raw materials from overseas suppliers.
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition,
are translated to Australian dollars at exchange rates at the reporting date. The income and expenses of foreign
operations are translated to Australian dollars at exchange rates at the dates of the transactions.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
3. Significant accounting policies (continued)
(b) Foreign currency (continued)
Foreign operations (continued)
Foreign currency translation differences are recognised directly in equity. Since 1 August 2004, the group’s date
of transition to Australian equivalents to IFRS, such differences have been recognised in the foreign currency
translation reserve (FCTR).
When a foreign operation is disposed of, in part or in full, the relevant amount in FCTR is transferred to profit or loss.
Foreign exchange gains and losses arising from a monetary item receivable from or payable to a foreign subsidiary,
the settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of a net
investment in a foreign subsidiary and are recognised directly in equity in FCTR.
(c) Financial instruments
Non-derivative financial instruments
Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans
and borrowings, and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value plus any directly attributable transaction
costs.
Subsequent to initial recognition non-derivative financial instruments are measured as described below.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable
on demand and form an integral part of the group’s cash management are included as a component of cash
and cash equivalents for the purpose of statement of cash flows.
Accounting for finance income and expense is discussed in note 3(n).
Financial assets at fair value through profit or loss
An instrument is classified as at fair value through profit or loss if it is held for trading or is designated as such
upon initial recognition. Financial instruments are designated at fair value through profit or loss if the group manages
such investments and makes purchases and sale decisions based on their fair value in accordance with the group’s
documented risk management or investment strategy. Upon initial recognition attributable transaction costs are
recognised in profit and loss when incurred. Financial instruments at fair value through profit or loss are measured
at fair value, and changes therein are recognised in profit or loss.
Other
Other non-derivative financial instruments are measured at amortised cost using the effective interest method,
less any impairment losses.
Derivative financial instruments
The group holds derivative financial instruments to manage its foreign currency and interest rate risk exposures.
Derivatives are recognised initially at fair value, with attributable transaction costs recognised in profit or loss
when incurred. Subsequent to initial recognition, derivatives continue to be measured at fair value, with changes
therein accounted for in profit or loss.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
3. Significant accounting policies (continued)
(c) Financial instruments (continued)
Derivative financial instruments (continued)
Cash flow hedges
The group has not entered into any cash flow hedging transactions in the current or comparative periods.
Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares
are recognised as a deduction from equity, net of any related income tax benefit. Dividends on ordinary shares
are recognised as a liability in the period in which they are declared.
Hybrid securities
The group has on issue a hybrid security called Nufarm Step-up Securities (NSS). The NSS are classified as equity
instruments and after-tax distributions thereon are recognised as distributions within equity.
(d) Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
The cost of property, plant and equipment at 1 August 2004, the date of transition to AIFRS, was determined by
reference to its fair value at that date.
Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset
to a working condition for its intended use, and the costs of dismantling and removing the items and restoring
the site on which they are located. Purchased software that is integral to the functionality of the related equipment
is capitalised as part of that equipment. Borrowing costs related to the acquisition or construction of qualifying
assets are recognised in profit or loss as incurred.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment and are recognised net within ‘other
income’ in profit or loss.
Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of
the item if it is probable that the future economic benefits embodied within the part will flow to the group and its
cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of day-to-day
servicing of property, plant and equipment are recognised in profit or loss as incurred.
Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part
of an item of property, plant and equipment. Lease assets are depreciated over the shorter of the lease term
and their useful lives, unless it is reasonably certain that the group will obtain ownership by the end of the
lease term. Land is not depreciated.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
3. Significant accounting policies (continued)
(d) Property, plant and equipment (continued)
Recognition and measurement (continued)
Depreciation (continued)
The estimated useful lives for the current and comparative periods are as follows:
• buildings
15–50 years
• leasehold improvements 5 years
• plant and equipment
10–15 years
• motor vehicles
5 years
• computer equipment
3 years
Depreciation methods, useful lives and residual values are reassessed at each reporting date.
(e) Intangible assets
Goodwill
Goodwill arises on the acquisition of subsidiaries, associates and jointly controlled entities.
Acquisitions prior to 1 August 2004
As part of its transition to IFRS, the group elected not to restate those business combinations that occurred prior
to 1 August 2004. In respect of acquisitions prior to 1 August 2004, goodwill represents the amount recognised
under the group’s previous accounting framework, Australian GAAP.
Acquisitions since 1 August 2004
For acquisitions since 1 August 2004, goodwill represents the excess of the cost of the acquisition over the
group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree.
When the excess is negative, it is recognised immediately in profit or loss.
Acquisitions of minority interests
Goodwill arising on the acquisition of a minority interest in a subsidiary represents the excess of the cost of the
additional investment over the carrying amount of the net assets acquired at the date of acquisition.
Subsequent measurement
Goodwill is measured at cost less accumulated impairment losses. In respect of equity investments, the carrying
amount of goodwill is included in the carrying amount of the investment.
Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge
and understanding, is recognised in profit or loss when incurred.
Development activities involve a plan or design for the production of new or substantially improved products
and processes. Development expenditure is capitalised only if development costs can be measured reliably,
the product or process is technically and commercially feasible, future economic benefits are probable and the
group has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised
includes the cost of materials, direct labour and overhead costs that are directly attributable to preparing the
asset for its intended use. Borrowing costs related to the development of qualifying assets are recognised in
profit or loss as incurred. Development expenditure that does not meet the above criteria is recognised in profit
or loss as incurred.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
3. Significant accounting policies (continued)
(e) Intangible assets (continued)
Research and development (continued)
Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses.
Intellectual property
Intellectual property consists of product registrations, product access rights, trademarks, task force seats, product
distribution rights and product licences acquired from third parties. Generally, product registrations, product access
rights, trademarks and task force seats, if purchased outright, are considered to have an indefinite life as there
are minimal annual fees to maintain the assets. Other items of acquired intellectual property are considered to
have a finite life in accordance with the terms of the acquisition agreement. Intellectual property intangibles acquired
by the group are measured at cost less accumulated amortisation and impairment losses. Expenditure on internally
generated goodwill and brands is expensed when incurred.
Other intangible assets
Other intangible assets that are acquired by the group, which have finite useful lives, are measured at cost less
accumulated amortisation and impairment losses.
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditure is recognised in profit or loss when incurred.
Amortisation
For those intangibles with a finite life, amortisation is recognised in profit or loss on a straight-line basis over the
estimated useful lives of the assets. The estimated useful life for intangible assets with a finite life, in the current
and comparative periods, are as follows:
• capitalised development costs
5 years
• intellectual property – finite life
Over the useful life in accordance with the acquisition agreement terms
• computer software
3 to 7 years
(f) Leased assets
Leases in terms of which the group assumes substantially all of the risks and rewards of ownership are classified
as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair
value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted
for in accordance with the accounting policy applicable to that asset. Other leases are operating leases and the
leased assets are not recognised on the group’s balance sheet.
(g) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the
first-in first-out principle and includes expenditure incurred in acquiring the inventories, production or conversion
costs and other costs incurred in bringing them to their existing location and condition. In the case of manufactured
inventories and work in progress, cost includes an appropriate share of overheads based on normal operating
capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
costs of completion and selling expenses.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
3. Significant accounting policies (continued)
(h) Impairment
Financial assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it
is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events
have had a negative effect on the estimated future cash flows of that asset.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of estimated future cash flows discounted at the original
effective interest rate.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial
assets are assessed collectively in groups that share similar credit risk characteristics.
All impairment losses are recognised in profit or loss.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment
loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in profit or loss.
Non-financial assets
The carrying amounts of the group’s non-financial assets, other than inventories and deferred tax assets, are
reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication
exists, the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives
or that are not yet available for use, the recoverable amount is estimated at each reporting date.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value
less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group
of assets that generates cash flows from continuing use that are largely independent of the cash inflows of other
assets or groups of assets. The goodwill acquired in a business combination, for the purpose of impairment testing,
is allocated to cash-generating units that are expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect
of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units
and then to reduce the carrying amount of other assets in the unit on a pro-rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised
in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had
been recognised.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
3. Significant accounting policies (continued)
(i) Non-current assets held for sale
Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily
through sale rather than continuing use are classified as held for sale. Immediately before classification as held
for sale, the assets (or components of a disposal group) are remeasured in accordance with the group’s accounting
policies. Thereafter generally the assets (or disposal group) are measured at the lower of their carrying amount
and fair value less cost to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then
to the remaining assets and liabilities on a pro-rata basis, except that no loss is allocated to inventories, financial
assets, deferred tax assets and employee benefit assets, which continue to be measured in accordance with
the group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent
gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of
any cumulative impairment loss.
(j) Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into
a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions
to defined contribution plans are recognised as an expense in profit or loss when they are due. Prepaid contributions
are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The group’s net
obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of
future benefit that employees have earned in return for their service in the current and prior periods; that benefit
is discounted to determine its present value. Any unrecognised past service costs and the fair value of any plan
assets are deducted. The discount rate is the yield at the reporting date on government bonds that have maturity
dates approximating the terms of the group’s obligations and that are denominated in the same currency in which
the benefits are expected to be paid. The calculation is performed annually by a qualified actuary using the projected
unit credit method. When the calculation results in a benefit to the group, the recognised asset is limited to the
net total of any unrecognised past service costs and the present value of any future refunds from the plan or
reductions in future contributions to the fund. An economic benefit is available to the group if it is realisable
during the life of the plan, or on settlement of the plan liabilities.
When the benefits of a fund are improved, the portion of the increased benefit relating to past service by employees
is recognised in profit or loss on a straight-line basis over the average period until the benefits become vested.
To the extent that the benefits vest immediately, the expense is recognised immediately in profit or loss.
The group recognises all actuarial gains and losses arising from the defined benefit plans directly in equity
immediately.
Other long term employee benefits
The group’s net obligation in respect of long term employee benefits, other than defined benefit plans, is the amount
of benefit that employees have earned in return for their service in the current and prior periods plus related on-costs;
that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The
discount rate is the yield at the reporting date on government bonds that have maturity dates approximating the
terms of the group’s obligations. The calculation is performed using the projected unit credit method. Any actuarial
gains or losses are recognised in profit or loss in the period in which they arise.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
3. Significant accounting policies (continued)
(j) Employee benefits (continued)
Termination benefits
Termination benefits are recognised as an expense when the group is demonstrably committed, without a realistic
possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement
date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination
benefits for voluntary redundancies are recognised as an expense if the group has made an offer encouraging
voluntary redundancy, it is probable that the offer will be accepted and the number of acceptances can be
estimated reliably.
Short term benefits
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided.
A liability is recognised for the amount expected to be paid under short term cash bonus or profit-sharing plans
if the group has a present legal or constructive obligation to pay this amount as a result of past service provided
by the employee and the obligation can be estimated reliably.
Share-based payment transactions
The group has a global share plan for employees whereby matching and loyalty shares are granted to employees.
The fair value of matching and loyalty shares granted is recognised as expense in the profit or loss over the respective
service period, with a corresponding increase in equity, rather than as the matching and loyalty shares are issued.
Refer note 27 for details of the global share plan.
When the company grants options over its shares to employees of subsidiaries, the fair value at grant date is
recognised as an increase in the investments in subsidiaries, with a corresponding increase in equity.
(k) Provisions
A provision is recognised if, as a result of a past event, the group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle
the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability.
A provision for restructuring is recognised when the group has approved a detailed and formal restructuring plan,
and the restructuring either has commenced or has been announced publicly. Future operating costs are not
provided for.
(l) Revenue
Goods sold
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net
of returns, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards
of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs
and possible return of goods can be estimated reliably, there is no continuing management involvement with
the goods and the amount of revenue can be measured reliably.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
3. Significant accounting policies (continued)
(m) Lease payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of
the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term
of the lease.
Minimum lease payments made under finance leases are apportioned between the finance expense and
the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term
so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease
payments are accounted for by revising the minimum lease payments over the remaining term of the lease
when the lease adjustment is confirmed.
(n) Finance income and expense
Finance income comprises interest income on funds invested, dividend income, changes in the fair value of financial
assets at fair value through profit or loss, and gains on hedging instruments that are recognised in profit or loss.
Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income
is recognised in profit or loss on the date that the group’s right to receive payment is established.
Finance expense comprises interest expense on borrowings, unwinding of the discount on provisions, changes
in the fair value of financial assets at fair value through profit or loss, dividends on preference shares classified as
liabilities, impairment losses recognised on financial assets and losses on hedging instruments that are recognised
in profit or loss. All borrowing costs are recognised in profit or loss using the effective interest method.
(o) Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities
in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and
differences relating to investments in subsidiaries and jointly controlled entities to the extent that they will probably
not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences
arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied
to the temporary differences when they reverse, based on the laws that have been enacted or substantively
enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right
to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on
the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets
on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
3. Significant accounting policies (continued)
(o) Income tax (continued)
Additional income taxes that arise from the distribution of dividends are recognised at the same time as
the liability to pay the related dividend is recognised.
Tax consolidation
The company and its wholly-owned Australian resident entities are part of a tax-consolidated group. As a
consequence, all members of the tax-consolidated group are taxed as a single entity from that date. The head
entity within the tax-consolidated group is Nufarm Limited.
Current tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of
the members of the tax-consolidated group are recognised in the separate financial statements of the members
of the tax-consolidated group using the ‘separate taxpayer within group’ approach by reference to the carrying
amounts of assets and liabilities in the separate financial statements of each entity and the tax values applying
under tax consolidation.
Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the subsidiaries
are assumed by the head entity in the tax-consolidated group and are recognised by the company as amounts
payable/(receivable) to/(from) other entities in the tax-consolidated group in conjunction with any tax funding
arrangement amounts (refer below). Any difference between these amounts is recognised by the company
as an equity contribution or distribution.
The company recognises deferred tax assets arising from unused tax losses of the tax-consolidated group to
the extent that it is probable that future taxable profits of the tax-consolidated group will be available against
which the asset can be utilised.
Any subsequent period adjustments to deferred tax assets arising from unused tax losses as a result
of revised assessments of the probability of recoverability is recognised by the head entity only.
Nature of tax funding arrangements and tax sharing agreements
The head entity, in conjunction with other members of the tax-consolidated group, has entered into a tax
funding arrangement which sets out the funding obligations of members of the tax-consolidated group in
respect of tax amounts. The tax funding arrangements require payments to/from the head entity equal to
the current tax liability/(asset) assumed by the head entity and any tax-loss deferred tax asset assumed by
the head entity, resulting in the head entity recognising an inter-entity receivable/(payable) equal in amount
to the tax liability/(asset) assumed. The inter-entity receivables/(payables) are at call.
Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect
the timing of the head entity’s obligation to make payments for tax liabilities to the relevant tax authorities.
The head entity, in conjunction with other members of the tax-consolidated group, has also entered a tax sharing
agreement. The tax sharing agreement provides for the determination of the allocation of the 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 as payment of any amounts under the tax sharing
agreement is considered remote.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
3. Significant accounting policies (continued)
(p) Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST or equivalent),
except where the GST incurred is not recoverable from the taxation authority. In these circumstances, the GST
is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from,
or payable to, the ATO is included as a current asset or liability in the balance sheet.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows
arising from investing and financing activities which are recoverable from, or payable to, the relevant tax authorities
are classified as operating cash flows.
(q) Discontinued operations
A discontinued operation is a component of the group’s business that represents a separate major line of business
or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively
with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets
the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation,
the comparative income statement is re-presented as if the operation had been discontinued from the start of
the comparative period.
(r) Earnings per share
The group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated
by dividing the profit or loss attributable to ordinary shareholders of the company by the weighted average number
of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable
to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all
potential dilutive ordinary shares, which comprise convertible notes and share options granted to employees.
(s) Segment reporting
A segment is a distinguishable component of the group that is engaged either in providing related products
or services (business segment), or in providing products or services within a particular economic environment
(geographic segment), which is subject to risks or rewards that are different from those of other segments.
The group’s primary format for reporting segment is based on geographic segments. The geographic
segments are determined based on the group’s management and internal reporting structure.
Inter-segment pricing is determined on an arms length basis.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can
be allocated on a reasonable basis. Unallocated items comprise mainly loans and borrowings and related expenses,
corporate assets and head office expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment
and intangible assets other than goodwill.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
3. Significant accounting policies (continued)
(t) New standards and interpretations not yet adopted
The following standards, amendments to standards and interpretations have been identified as those which may
impact the entity in the period of initial application. They are available for early adoption at 31 July 2009, but have
not been applied in preparing this financial report:
• Revised AASB 3 Business Combinations (2008) incorporates the following changes that are likely to be relevant
to the group’s operations:
– the definition of a business has been broadened, which is likely to result in more acquisitions being treated
as business combinations;
– contingent consideration will be measured at fair value, with subsequent changes recognised in profit or loss;
– transaction costs, other than share and debt issue costs, will be expensed as incurred;
– any pre-existing interest in the acquiree will be measured at fair value with the gain or loss recognised
in profit or loss; and
– any non-controlling (minority) interest will be measured at either fair value, or at its proportionate interest
in the identifiable assets and liabilities of the acquiree, on a transaction-by-transaction basis. Revised AASB 3,
which becomes mandatory for the group’s 31 July 2010 financial statements, will be applied prospectively
and therefore, there will be no impact on prior periods.
• AASB 8 Operating Segments introduces the ‘management approach’ to segment reporting. AASB 8, which
becomes mandatory for the group’s 31 July 2010 financial statements, will require the disclosure of segment
information based on the internal reports regularly reviewed by the group’s chief operating decision maker in
order to assess each segment’s performance and to allocate resources to them. Currently, the group presents
segment information in respect of its geographical segments (see note 5). This is not expected to change
under AASB 8.
• Revised AASB 101 Presentation of Financial Statements (2007) introduces the term total comprehensive income,
which represents changes in equity during a period other than those changes resulting from transactions with
owners in their capacity as owners. Total comprehensive income may be presented in either a single statement
of comprehensive income (effectively combining both the income statement and all non-owner changes in
equity in a single statement) or, in an income statement and a separate statement of comprehensive income.
Revised AASB 101, which becomes mandatory for the group’s 31 July 2010 financial statements, is not
expected to have a significant impact, as the group already presents a separate statement of recognised
income and expense that reports all non-owner changes in equity.
• Amended AASB 127 Consolidated and Separate Financial Statements (2008) requires accounting for changes
in ownership interests by the group in a subsidiary, while maintaining control, to be recognised as an equity
transaction. When the group loses control of a subsidiary, any interest retained in the former subsidiary will be
measured at fair value with the gain or loss recognised in profit or loss. The amendments to AASB 127, which
become mandatory for the group’s 31 July 2010 financial statements, are not expected to have a significant
impact on the consolidated financial statements.
• Revised AASB 123 Borrowing Costs removes the option to expense borrowing costs and requires that an entity
capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset
as part of the cost of that asset. The revised AASB 123 will become mandatory for the group’s 31 July 2010
financial statements and will constitute a change in accounting policy for the group, as the group currently
expenses all borrowing costs. In accordance with the transitional provisions the group will apply the revised
AASB 123 to qualifying assets for which capitalisation of borrowing costs commences on or after the effective
date. Therefore, there will be no impact on prior periods in the group’s 31 July 2010 financial statements.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
3. Significant accounting policies (continued)
(t) New standards and interpretations not yet adopted (continued)
• AASB 2008-1 Amendments to Australian Accounting Standard – Share-based Payment: Vesting Conditions
and Cancellations clarifies the definition of vesting, introduces the concept of non-vesting conditions, requires
non-vesting conditions to be reflected in grant-date fair value and provides the accounting treatment for
non-vesting conditions and cancellations. The amendments to AASB 2 will be mandatory for the group’s
31 July 2010 financial statements, with retrospective application. The group has not yet determined the
potential effect of the amendment.
• AASB 2008-5 Amendments to Australian Accounting Standards arising from the Annual Improvements Process
and AASB 2008-6 Further Amendments to Australian Accounting Standards arising from the Annual Improvements
Process affect various AASBs resulting in minor changes for presentation, disclosure, recognition and measurement
purposes. The amendments, which become mandatory for the group’s 31 July 2010 financial statements, are
not expected to have a significant impact on the financial statements.
• AASB 2008-7 Amendments to Australian Accounting Standards – Cost of an Investment in a Subsidiary, Jointly
Controlled Entity or Associate changes the recognition and measurement of dividend receipts as income and
addresses the accounting of a newly formed parent entity in the separate financial statements. The amendments
become mandatory for the group’s 31 July 2010 financial statements. The group has not yet determined the
potential effect of the amendment.
• AI 16 Hedges of a Net Investment in a Foreign Operation clarifies that net investment hedging can only be applied
when the net assets of the foreign operation are recognised in the entity’s consolidated financial statements.
AI 16 will become mandatory for the group’s 31 July 2010 financial statements. The interpretation is not
expected to have any impact on the financial statements.
4. Determination of fair values
A number of the group’s accounting policies and disclosures require the determination of fair value, for both financial
and non- financial assets and liabilities. Fair values have been determined for measurement and/or disclosure
purposes based on the following methods. When applicable, further information about the assumptions made
in determining fair values is disclosed in the notes specific to that asset or liability.
(i) Property, plant and equipment
The fair value of property, plant and equipment recognised as a result of a business combination is based on
market values. The market value of property is the estimated amount for which a property could be exchanged
on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper
marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The market
value of items of plant, equipment, fixtures and fittings is based on the quoted market prices for similar items.
(ii) Intangibles assets
The fair value of patents and trademarks acquired in a business combination is based on the discounted estimated
royalty payments that have been avoided as a result of the patent or trademark being owned. The fair value of
other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual
sale of the assets.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
4. Determination of fair values (continued)
(iii) Inventories
The fair value of inventory acquired in a business combination is determined based on its estimated selling
price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable
profit margin based on effort required to complete and sell the inventory.
(iv) Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted
at the market rate of interest at the reporting date.
(v) Derivatives
The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market
price is not available, then fair value is estimated by discounting the difference between the contractual forward
price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based
on government bonds).
The fair value of interest rate swaps is based on broker quotes. Those quotes are tested for reasonableness
by discounting estimated future cash flows based on the terms and maturity of each contract and using market
interest rates for a similar instrument at the measurement date.
(vi) Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of interest at the reporting date. For finance
leases, the market rate of interest is determined by reference to similar lease agreements.
5. Segment reporting
Segment information is presented in respect of the group’s geographic segments. This is the primary format
of segment reporting based on the group’s management and internal reporting structure. The group operates
predominantly in one business segment, being the crop protection industry. The business is managed on a
worldwide basis, with the major geographic segments for reporting being Australasia, Europe, North America
and South America. The North America region includes Canada, USA, Mexico, the Central American countries
and the Andean region. The South America region includes Brazil, Argentina, Chile, Uruguay, Paraguay and
Bolivia. In presenting information on the basis of geographic segments, segment revenue is based on the
geographic location of customers. Segment assets are based on the geographic location of the assets.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
5. Segment reporting (continued)
Geographic segments 2009
Revenue
Total segment revenue
Results
Segment result before associate profit
Share of profit of associates
Segment result
Unallocated corporate expenses
Operating result
Net non-cash revaluation profit/(loss)
on proceeds from Nufarm Step-up
Securities financing
Net financing costs
Income tax benefit
Profit for the period
Assets
Segment assets
Investment in associates
Unallocated assets
Total assets
Liabilities
Segment liabilities
Unallocated liabilities
Total liabilities
Other segment information
Capital expenditure
Depreciation
Amortisation
Australasia
$000
Europe
$000
North
America
$000
South
America
$000
Consolidated
$000
850,211
636,928
775,375
414,569
2,677,083
117,366
1,100
98,652
1,934
118,466
100,586
8,305
46
8,351
(40,880)
–
(40,880)
808,444
10,656
852,219
1,812
580,115
–
653,988
–
162,760
221,321
55,593
75,310
183,443
3,080
186,523
(35,059)
151,464
(431)
(92,076)
21,585
80,542
2,894,766
12,468
344,363
3,251,597
514,984
1,104,674
1,619,658
32,408
18,960
5,360
45,163
21,177
8,338
21,570
5,841
2,558
6,541
2,434
1,294
105,682
48,412
17,550
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
5. Segment reporting (continued)
Geographic segments 2008
Revenue
Total segment revenue
Australasia
$000
Europe
$000
North
America
$000
South
America
$000
Consolidated
$000
874,992
554,661
631,383
431,422
2,492,458
Results
Segment result before associate profit
Share of profit of associates
146,364
1,228
54,908
1,336
84,336
134
59,301
–
Segment result
147,592
56,244
84,470
59,301
344,909
2,698
347,607
(38,738)
308,869
(34,259)
(4,119)
(80,195)
(52,176)
138,120
2,949,071
24,264
240,545
3,213,880
879,052
1,029,610
1,908,662
802,727
10,182
823,279
13,628
599,214
454
723,851
–
311,133
266,017
221,504
80,398
Unallocated corporate expenses
Operating result
Barter trade loss realised on option
contracts – Brazil
Net non-cash revaluation profit/(loss)
on proceeds from Nufarm Step-up
Securities financing
Net financing costs
Income tax expense
Profit for the period
Assets
Segment assets
Investment in associates
Unallocated assets
Total assets
Liabilities
Segment liabilities
Unallocated liabilities
Total liabilities
Other segment information
Capital expenditure
Depreciation
Amortisation
61,400
17,253
2,388
173,120
12,889
5,929
119,661
4,182
1,399
27,628
2,256
1,184
381,809
36,580
10,900
Capital expenditure includes the fixed assets, goodwill and intangibles resulting from the AH Marks and Etigra
acquisitions. The AH Marks’ values are included in Europe and Etigra is included in North America.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
6. Items of material income and expense
The following material items of income/(expense)
were included in the period result:
Cost of sales items
Net realisable value adjustment – year end inventories
Net realisable value adjustment – product sold
Restructuring – French business
General and administrative expense items
Competition inquiries (AH Marks)
Provision for non-collectability of sale proceeds
Due diligence costs
Restructuring – French business and sale of
equity investment
Disclosed on face of income statement
Barter trade loss realised on option contracts – Brazil
Net non-cash revaluation profit/(loss) on proceeds
from Nufarm Step-up Securities financing
7. Other income
Dividends from wholly owned controlled entities
Management fees from controlled entities
Sundry income
Total other income
8. Other expenses
The following expenses were included in the
period result:
Depreciation and amortisation
Impairment gain/(loss) on trade receivables1
Movement in stock obsolescence provision
Exchange gains/(losses)
1 Excludes items set out in Note 6.
Consolidated
Consolidated
2009
$000
Pre-tax
2009
$000
After-tax
2008
$000
Pre-tax
2008
$000
After-tax
(67,611)
(37,770)
(16,421)
(121,802)
(10,567)
(2,564)
(1,859)
9,593
(5,397)
(40,794)
(22,662)
(10,989)
(74,445)
(10,182)
(1,709)
(1,364)
8,247
(5,008)
–
–
–
–
(66)
–
(1,000)
–
(1,066)
–
–
–
–
(66)
–
(524)
–
(590)
–
–
(34,259)
(22,611)
(431)
(302)
(4,119)
(2,760)
(127,630)
(79,755)
(39,444)
(25,961)
Consolidated
Company
2009
$000
–
–
11,054
11,054
2008
$000
–
–
5,519
5,519
2009
$000
52,700
2,038
511
55,249
2008
$000
59,444
3,240
376
63,060
(65,962)
(4,241)
(648)
(27,528)
(47,480)
(533)
(828)
2,337
(698)
–
–
326
(646)
(43)
(50)
(281)
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
9. Personnel expenses
Wages and salaries
Other associated personnel expenses
Contributions to defined contribution
superannuation funds
Expenses related to defined benefit
superannuation funds
Annual leave expense
Long-service leave expense
Restructuring expense – French social plan
Consolidated
Company
2009
$000
2008
$000
(203,969)
(37,214)
(177,724)
(30,023)
2009
$000
(4,005)
(488)
2008
$000
(4,278)
(309)
(10,847)
(8,590)
(550)
(521)
(457)
(6,319)
(1,886)
(23,403)
(3,290)
(7,106)
(2,180)
–
–
(396)
–
–
–
(323)
–
–
(284,095)
(228,913)
(5,439)
(5,431)
The restructuring expense in France represents the redundancy costs associated with the shut down of two
manufacturing units at the Gaillon plant. The restructuring costs are included in the material items in note 6.
10. Finance income and expense
Interest income – controlled subsidiaries
Interest income – external
Financial income
Interest expense – controlled entities
Interest expense – external
Lease expense – finance charges
Costs of securitisation program
Financial expenses
Consolidated
Company
2009
$000
–
8,177
8,177
–
(98,796)
(1,887)
430
(100,253)
2008
$000
–
3,202
3,202
–
(75,553)
–
(7,844)
(83,397)
2009
$000
364
334
698
(3,093)
(67)
–
–
(3,160)
2008
$000
–
119
119
(3,129)
(54)
–
–
(3,183)
Net financing costs
(92,076)
(80,195)
(2,462)
(3,064)
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
11. Income tax expense/(benefit)
Recognised in the income statement
Current tax expense
Current year
Adjustments for prior years
Deferred tax expense
Origination and reversal of temporary differences
Reduction in tax rates
Benefit of tax losses recognised
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
6,161
(247)
5,914
(10,228)
2,604
(19,875)
(27,499)
43,941
(1,663)
42,278
12,717
283
(3,102)
9,898
414
314
728
437
–
–
437
2,016
87
2,103
58
8
–
66
Total income tax expense/(benefit) in income statement
(21,585)
52,176
1,165
2,169
Attributable to:
Continuing operations
(21,585)
(21,585)
52,176
52,176
1,165
1,165
2,169
2,169
Numerical reconciliation between tax
expense/(benefit) and pre-tax net profit
Profit before tax – continuing operations
Profit before tax
Income tax using the local corporate tax rate
of 30 per cent
Increase in income tax expense due to:
Non-deductible expenses
Other taxable income
Effect of changes in the tax rate
Effect of tax losses derecognised/(recognised)
Decrease in income tax expense due to:
Effect on tax rate in foreign jurisdictions
Tax exempt income
Tax incentives not recognised in the income statement
Under/(over) provided in prior years
Income tax expense/(benefit) on pre-tax net profit
58,957
58,957
190,296
190,296
56,514
56,514
66,867
66,867
17,687
57,089
16,954
20,060
3,175
1,383
2,604
1,015
(38,850)
(1,225)
(7,127)
(21,338)
(247)
(21,585)
3,601
–
(459)
–
(2,206)
(300)
(3,886)
53,839
(1,663)
52,176
3
–
–
–
–
(16,106)
–
851
314
1,165
281
–
8
–
(63)
(18,204)
–
2,082
87
2,169
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
64
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
11. Income tax expense/(benefit) (continued)
Income tax expense/(benefit) recognised
directly in equity
Relating to actuarial gains on defined benefit plans
Relating to cost of issuing equity
Nufarm Step-up Securities distribution
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
(3,363)
(1,683)
(6,572)
(11,618)
221
(699)
(7,272)
(7,750)
–
(1,683)
–
(1,683)
–
(699)
–
(699)
12. Discontinued operation
There were no discontinued operations in the current or prior year.
13. Non-current assets held for sale
There were no assets held for sale at the end of the current or prior financial periods.
14. Acquisition of subsidiaries
On 1 October 2008, the group acquired the shares in Lefroy Seeds Pty Ltd. Lefroy Seeds specialises in
hybrid breeding, production and commercialisation activities in sunflower and sorghum with facilities located
in Toowoomba, Queensland, Australia.
In the period to 31 July 2009, this business contributed profit of $169,257 to the consolidated group after tax profit.
If the above acquisition had occurred on 1 August 2008, the full-year contribution to group revenues would have
been $2,578,172 and to the consolidated entity’s profit after tax would have been $203,108.
Pre-acquisition
carrying
amounts
$000
Preliminary
fair value
adjustments
$000
Recognised
values on
acquisition
$000
Acquiree’s net assets at acquisition date
Cash and cash equivalents
Receivables
Inventory
Property, plant and equipment
Intangibles
Other assets
Trade and other payables
Employee benefits
Other liabilities
Net identifiable assets and liabilities
Acquisition costs
Identifiable intangibles acquired on acquisition
Goodwill on acquisition
Consideration paid
Cash acquired
Consideration satisfied by issue of shares
Net cash outflow
175
353
236
167
8
621
(113)
(21)
(68)
1,358
2009
–
–
102
–
(8)
–
–
(85)
–
9
175
353
338
167
–
621
(113)
(106)
(68)
1,367
(46)
5,074
5,075
11,470
(175)
(7,975)
3,320
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
65
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
14. Acquisition of subsidiaries (continued)
Pre-acquisition carrying values were determined based on applicable AASBs immediately before the acquisition.
The value of assets, liabilities and contingent liabilities recognised on acquisition are their estimated fair values
(see note 4 for methods used in determining fair values).
Goodwill has arisen on the acquisition above, mainly resulting from the synergies that this acquisition brings
to the Nufarm group.
Acquisitions during the prior year included the AH Marks (5 March 2008) and Etigra (31 March 2008) businesses.
AH Marks is a manufacturer and supplier of crop protection and industrial products. The company is based at Wyke,
UK and the purchase price was £74.6 million, consisting of cash consideration of £46.5 million with £28.1 million
in assumed debt. Etigra is a supplier of crop protection products, specialising in the US turf and specialty markets.
It is based in North Carolina and the assets of Etigra were acquired for US$65 million.
Recognised
values
$000
Fair value
adjustments
$000
Carrying
amounts
$000
Acquiree’s net assets at acquisition date
Cash and cash equivalents
Receivables
Inventory
Property, plant and equipment
Intangibles
Deferred taxes
Trade and other payables
Employee benefits
Interest bearing loans and borrowings
Other liabilities
Net identifiable assets and liabilities
Acquisition costs
Identifiable intangibles (registrations and trademarks)
acquired on acquisition
Goodwill on acquisition
Consideration satisfied in cash
Deferred consideration at balance date
Cash acquired
Net cash outflow
(935)
57,877
11,905
75,561
4,059
(6,391)
(49,277)
(6,771)
(40,303)
(10,457)
35,268
2008
–
–
–
–
(3,471)
11,199
3,887
2,111
–
–
13,726
(935)
57,877
11,905
75,561
588
4,808
(45,390)
(4,660)
(40,303)
(10,457)
48,994
2,407
82,023
35,139
168,563
(11,135)
935
158,363
The provisional accounting for the AH Marks and Etigra acquisitions was adjusted during the current year. The AH
Marks goodwill was adjusted for the recognition of previously unrecognised tax losses ($11.2 million). The Etigra
identified intangibles was adjusted following the finalisation of the valuation of certain intangible assets.
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
66
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
15. Cash and cash equivalents
Bank balances
Call deposits
Cash and cash equivalents
Bank overdrafts repayable on demand
Cash and cash equivalents in the statement
of cash flows
16. Trade and other receivables
Current
Trade receivables
Provision for impairment losses
Receivables due from controlled entities
Loans due from controlled entities
Receivables due from associates
Receivables due from securitisation program
Derivative financial instruments
Proceeds receivable from sale of businesses
Other receivables and prepayments
Non-current
Receivables due from associates
Other receivables
Proceeds receivable from sale of businesses
Provision for non-collectability of sale proceeds
Consolidated
Company
2009
$000
48,502
35,810
84,312
(35,669)
2008
$000
12,611
46,532
59,143
(20,841)
2009
$000
669
1,187
1,856
–
2008
$000
3,308
–
3,308
–
48,643
38,302
1,856
3,308
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
680,573
(25,087)
685,316
(23,339)
655,486
661,977
–
–
475
–
16,118
6,230
109,451
–
–
362
52,176
26,946
3,306
95,196
4,681
–
4,681
6,637
778,111
–
–
–
–
895
4,713
(43)
4,670
939
461,389
–
–
375
–
163
787,760
839,963
790,324
467,536
38
9,319
27,101
(3,333)
33,125
–
22,656
9,491
(3,106)
29,041
–
–
–
–
–
–
–
–
–
–
Total trade and other receivables
820,885
869,004
790,324
467,536
Nufarm and a major supplier are currently in dispute with respect to a claim that the supplier is liable for a
relevant share of losses attributable to the sale of product during the 2009 financial year.
The parties entered into an Agreement in 2002 that provides for the sharing of costs and proceeds associated
with Nufarm’s sale of products. Nufarm’s claim, for approximately $37 million, is being contested by the supplier.
Nufarm is confident it will recover all of this amount and will vigorously pursue its claim. The $37 million claim
is included in other receivables and prepayments.
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
67
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
17. Inventories
Raw materials
Work in progress
Finished goods
Provision for obsolescence of finished goods
Consolidated
Company
2009
$000
223,461
7,932
571,003
802,396
(5,013)
2008
$000
285,340
18,560
543,804
847,704
(4,160)
2009
$000
3,324
116
14,294
17,734
–
17,734
2008
$000
–
336
17,041
17,377
(59)
17,318
Total inventories
797,383
843,544
The finished goods and raw material values above are net of the net realisable value adjustment referred to in
note 6.
18. Tax assets and liabilities
Current tax assets and liabilities
The current tax asset for the group of $48,973,455 (2008: $61,185,329) and for the company of $93,012 (2008:
$12,860,431) represents the amount of income taxes recoverable in respect of prior periods and that arise from
the payment of tax in excess of the amounts due to the relevant tax authority. The current tax liability for the group
of $17,771,673 (2008: $12,461,369) and the company of $5,804,378 (2008: $7,226, 722) represent the amount
of income taxes payable in respect of current and prior financial periods. The company liability includes the
income tax payable by all members of the tax consolidated group.
Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Consolidated
Property, plant and equipment
Intangibles assets
Employee benefits
Provisions
Other items
Tax value of losses carried
forward
Assets
Liabilities
Net
2009
$000
9,467
6,545
14,889
14,500
35,541
2008
$000
11,478
6,428
11,956
5,044
18,501
2009
$000
2008
$000
2009
$000
(12,338)
(52,275)
–
–
(8,578)
(17,010)
(39,528)
–
–
(9,406)
(2,871)
(45,730)
14,889
14,500
26,963
2008
$000
(5,532)
(33,100)
11,956
5,044
9,095
122,994
48,568
–
–
122,994
48,568
Tax assets/(liabilities)
Set off of tax
203,936
(8,976)
101,975
(8,705)
(73,191)
8,976
(65,944)
8,705
130,745
–
36,031
–
Net tax assets/(liabilities)
194,960
93,270
(64,215)
(57,239)
130,745
36,031
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
68
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
18. Tax assets and liabilities (continued)
Company
Property, plant and equipment
Employee benefits
Provisions
Other items
Net tax assets/(liabilities)
Assets
Liabilities
Net
2009
$000
15
106
–
2,800
2,921
2008
$000
–
118
31
1,454
1,603
2009
$000
2008
$000
–
–
–
–
–
(73)
–
–
(1)
(74)
2009
$000
15
106
–
2,800
2,921
2008
$000
(73)
118
31
1,453
1,529
movement in temporary differences during the year
Balance Recognised Recognised
in income
31.07.08
$000
$000
Other
Currency
in equity adjustment movement
$000
$000
$000
(5,532)
(33,100)
11,956
5,044
9,095
4,429
(12,202)
(2,601)
9,654
14,517
48,568
36,031
24,750
38,547
–
–
3,363
–
1,683
–
5,046
Balance
31.07.09
$000
(2,871)
(45,730)
14,889
14,500
26,963
78
(428)
(293)
(198)
1,624
(1,846)
–
2,464
–
44
(2,092)
(1,309)
51,768
122,994
52,430
130,745
Consolidated 2009
Property, plant and equipment
Intangibles assets
Employee benefits
Provisions
Other items
Tax value of losses carried
forward
Consolidated 2008
Balance Recognised Recognised
in income
31.07.07
$000
$000
Other
Currency
in equity adjustment movement
$000
$000
$000
Property, plant and equipment
Intangibles assets
Employee benefits
Provisions
Other items
Tax value of losses carried
forward
4,355
(13,467)
11,917
3,908
8,001
(10,160)
(20,130)
404
984
1,459
43,970
2,956
58,684
(24,487)
–
–
(221)
–
–
–
(221)
250
497
(144)
(163)
880
1,642
2,962
23
–
–
315
(1,245)
–
(907)
Balance
31.07.08
$000
(5,532)
(33,100)
11,956
5,044
9,095
48,568
36,031
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
69
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
18. Tax assets and liabilities (continued)
Deferred tax assets and liabilities
movement in temporary differences during the year
Company 2009
Balance Recognised Recognised
in income
31.07.08
$000
$000
Other
Currency
in equity adjustment movement
$000
$000
$000
Property, plant and equipment
Employee benefits
Provisions
Other items
(73)
118
31
1,453
1,529
88
(12)
(31)
1,347
1,392
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Company 2008
Balance Recognised Recognised
in income
31.07.07
$000
$000
Other
Currency
in equity adjustment movement
$000
$000
$000
Property, plant and equipment
Employee benefits
Provisions
Other items
(2)
369
9
701
1,077
(71)
(235)
26
226
(54)
–
–
–
–
–
–
(16)
(4)
–
(20)
–
–
–
526
526
Balance
31.07.09
$000
15
106
–
2,800
2,921
Balance
31.07.08
$000
(73)
118
31
1,453
1,529
Unrecognised deferred tax liability
At 31 July 2009, a deferred tax liability of $18,450,432 (2008: $25,024,580) relating to investments in subsidiaries
has not been recognised because the company controls whether the liability will be incurred and it is satisfied
that it will not be incurred in the foreseeable future.
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Tax losses
Consolidated
Company
2009
$000
–
–
2008
$000
8,979
8,979
2009
$000
–
–
2008
$000
–
–
There were no unrecognised tax losses at 31 July 2009. The prior year tax losses were for AH Marks which have
subsequently been recognised as an adjustment to the provisional acquisition accounting.
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
70
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
19. Investments accounted for using the equity method
The group accounts for investments in associates using the equity method.
The group had the following significant investments in associates during the year:
Bayer CropScience Nufarm Ltd
Excel Crop Care Ltd
F&N joint ventures
Agricultural chemicals
manufacturer
Agricultural chemicals
manufacturer
Agricultural chemicals
distributor
Country
Balance date
of associate
Ownership and
voting interest
2009
2008
UK
31.12.2008
0.00%
25%
India
31.3.2009
14.69%
14.69%
Eastern
Europe
31.12.2008
50.00%
50.00%
Effective 31 July 2009, Nufarm sold its 25 per cent share in Bayer CropSciences Nufarm Limited to Bayer
CropSciences Limited.
The 14.69 per cent investment in Excel Crop Care Ltd is equity accounted as Nufarm has two directors on the
board and, together with an unrelated partner, has significant influence over nearly 35 per cent of the shares
of the company. The relationship also extends to manufacturing and marketing collaborations.
The F&N joint ventures represents the group’s interest in three joint ventures with FMC Corporation, which operate
in Poland, Czech Republic and Slovakia. The joint ventures sell Nufarm and FMC products within their country.
Financial summary of material associates (at reporting date)
Revenues
(100%)
$000
Profit
after tax
(100%)
$000
Total
assets
(100%)
$000
Net
Share of
assets as associate’s
Total reported by net assets
equity
(100%) accounted
$000
(100%)
$000
$000
liabilities associates
2009
Excel Crop Care Ltd
F&N joint ventures
2008
Bayer CropScience Nufarm Ltd
Excel Crop Care Ltd
F&N joint ventures
196,112
77,347
9,558
649
110,292
70,070
72,306
66,429
37,986
3,641
273,459
10,207
180,362
138,735
41,627
5,580
1,821
7,401
77,918
144,498
81,039
(6,760)
6,567
1,910
101,873
99,559
76,356
37,273
67,161
71,959
64,600
32,398
4,397
16,150
4,759
2,199
303,455
1,717
277,788
176,393
101,395
23,108
The financial summary information is from the financial statements as per the balance dates above.
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
71
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
19. Investments accounted for using the equity method (continued)
Carrying value by major associate
Bayer CropScience Nufarm Ltd
Excel Crop Care Ltd
F&N joint ventures
Others
Carrying value of associates
Share of profit by major associate
Bayer CropScience Nufarm Ltd
Excel Crop Care Ltd
F&N joint ventures
Others
Share of net profits of associates
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
–
9,803
1,812
853
12,468
1,837
1,090
97
56
3,080
11,471
9,206
2,157
1,430
24,264
(242)
1,237
1,578
125
2,698
–
9,803
–
–
9,803
–
1,090
–
–
1,090
–
9,206
–
–
9,206
–
1,237
–
–
1,237
The share of net profits has been derived from the latest management reports as at 31 July 2009 for Bayer
CropSciences and the F&N joint ventures. The Excel Crop Care share of net profits is from the 30 June 2009
management accounts.
20. Other investments
Investment in controlled entities
Balance at the beginning of the year
New investments during the year
Exchange adjustment
Balance at the end of the year
Investments – available-for-sale
Balance at the beginning of the year
New investments during the year
Exchange adjustment
Balance at the end of the year
Other investments
Other investments
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
–
–
–
–
–
6,829
179
7,008
–
–
–
–
–
–
–
–
434
354
300,769
5,562
–
307,214
1,394
(7,839)
306,331
300,769
–
–
–
–
–
–
–
–
–
–
Total other investments
7,442
354
306,331
300,769
The group’s investment in an unlisted entity is classified as available-for-sale.
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
72
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
21. Other non-current assets
Derivative financial instrument
Consolidated
Company
2009
$000
967
967
2008
$000
8,504
8,504
2009
$000
–
–
2008
$000
–
–
The derivative financial instrument is the market value of the interest rate cap relating to the NSS distribution
base rate.
22. Property, plant and equipment
Land
and
Leased
Plant and plant and
buildings machinery machinery
$000
$000
$000
Consolidated
Cost
Balance at 1 August 2008
Additions
Additions through business combinations
Disposals
Other transfers
Exchange adjustment
201,006
3,039
–
(4,030)
4,795
2,583
646,118
12,196
280
(28,022)
32,684
622
2009
15,156
166
–
(80)
(104)
(669)
Capital
work in
progress
$000
Total
$000
30,395
44,437
–
(1,380)
(37,375)
(201)
892,675
59,838
280
(33,512)
–
2,335
Balance at 31 July 2009
207,393
663,878
14,469
35,876
921,616
Depreciation and impairment losses
Balance at 1 August 2008
Depreciation charge for the year
Additions through business combinations
Disposals
Other transfers
Exchange adjustment
(58,689)
(7,460)
–
2,223
(33)
(1,144)
(399,701)
(40,525)
(113)
20,591
(7)
159
(1,173)
(427)
–
55
40
56
Balance at 31 July 2009
(65,103)
(419,596)
(1,449)
–
–
–
–
–
–
–
(459,563)
(48,412)
(113)
22,869
–
(929)
(486,148)
Net property, plant and equipment
at 31 July 2009
142,290
244,282
13,020
35,876
435,468
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
73
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
22. Property, plant and equipment (continued)
Land
and
Leased
Plant and plant and
buildings machinery machinery
$000
$000
$000
Consolidated
Cost
Balance at 1 August 2007
Additions
Additions through business combinations
Disposals
Other transfers
Exchange adjustment
185,156
3,503
1,581
(5,109)
15,977
(102)
471,845
9,684
144,132
(15,447)
37,254
(1,350)
2008
1,361
258
14,237
(359)
(315)
(26)
Capital
work in
progress
$000
Total
$000
27,035
56,064
–
–
(52,916)
212
685,397
69,509
159,950
(20,915)
–
(1,266)
Balance at 31 July 2008
201,006
646,118
15,156
30,395
892,675
Depreciation and impairment losses
Balance at 1 August 2007
Depreciation charge for the year
Additions through business combinations
Disposals
Other transfers
Exchange adjustment
(53,586)
(6,332)
(90)
1,187
(92)
224
(297,404)
(30,241)
(83,658)
11,421
(48)
229
(630)
(248)
(641)
191
140
15
Balance at 31 July 2008
(58,689)
(399,701)
(1,173)
–
–
–
–
–
–
–
(351,620)
(36,821)
(84,389)
12,799
–
468
(459,563)
Net property, plant and equipment
at 31 July 2008
142,317
246,417
13,983
30,395
433,112
Assets pledged as security for finance leases $13.02 million (2008: $13.983 million). There were no impairment
losses in the consolidated entity in the current financial year or the comparative year.
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
74
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
22. Property, plant and equipment (continued)
Company
Cost
Balance at 1 August 2008
Additions
Disposals
Other transfers
Exchange adjustment
Balance at 31 July 2009
Depreciation and impairment losses
Balance at 1 August 2008
Depreciation charge for the year
Disposals
Exchange adjustment
Balance at 31 July 2009
Net property, plant and equipment
at 31 July 2009
Company
Cost
Balance at 1 August 2007
Additions
Disposals
Other transfers
Exchange adjustment
Balance at 31 July 2008
Depreciation and impairment losses
Balance at 1 August 2007
Depreciation charge for the year
Disposals
Exchange adjustment
Balance at 31 July 2008
Net property, plant and equipment
at 31 July 2008
Land
and
Leased
Plant and plant and
buildings machinery machinery
$000
$000
$000
3,555
–
–
(650)
61
2,966
(352)
(129)
–
(8)
(489)
3,630
–
(176)
800
61
4,315
(1,902)
(488)
132
(18)
(2,276)
2009
–
–
–
–
–
–
–
–
–
–
–
Capital
work in
progress
$000
352
191
–
(150)
(45)
348
–
–
–
–
–
Total
$000
7,537
191
(176)
–
77
7,629
(2,254)
(617)
132
(26)
(2,765)
2,477
2,039
–
348
4,864
Land
and
Leased
Plant and plant and
buildings machinery machinery
$000
$000
$000
3,133
–
–
828
(406)
3,555
(275)
(123)
–
46
(352)
3,704
–
(207)
622
(489)
3,630
(1,846)
(489)
153
280
(1,902)
2008
–
–
–
–
–
–
–
–
–
–
–
Capital
work in
progress
$000
318
1,524
–
(1,450)
(40)
352
–
–
–
–
–
Total
$000
7,155
1,524
(207)
–
(935)
7,537
(2,121)
(612)
153
326
(2,254)
3,203
1,728
–
352
5,283
There were no impairment losses in the company in the current financial year or the comparative year.
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
75
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
23. Intangible assets
Goodwill
$000
Indefinite
life
$000
Intellectual property
Capitalised
Definite development
costs
$000
life
$000
Computer
software
$000
Total
$000
Consolidated
2009
Cost
Balance at 1 August 2008
Additions
Additions through
business combinations
Disposals
Other transfers
Exchange adjustment
360,327
9,109
441,333
10,339
75,941
818
75,586
24,847
18,164
3,565
971,351
48,678
5,075
(10,824)
–
(5,117)
5,074
(13,467)
–
11,303
–
(35)
–
7,823
–
(3,425)
–
1,134
–
(4)
–
20
10,149
(27,755)
–
15,163
Balance at 31 July 2009
358,570
454,582
84,547
98,142
21,745
1,017,586
Amortisation and
impairment losses
Balance at 1 August 2008
Amortisation charge for
the year
Additions through
business combinations
Disposals
Other transfers
Exchange adjustment
(73,303)
(10,207)
(29,354)
(25,243)
(11,744)
(149,851)
–
–
(8,776)
(6,386)
(2,388)
(17,550)
–
–
–
1,041
–
–
–
(261)
–
–
–
(1,834)
–
–
–
(379)
–
–
–
(13)
–
–
–
(1,446)
Balance at 31 July 2009
(72,262)
(10,468)
(39,964)
(32,008)
(14,145)
(168,847)
Intangibles carrying
amount at 31 July 2009
286,308
444,114
44,583
66,134
7,600
848,739
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
76
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
23. Intangible assets (continued)
Goodwill
$000
Indefinite
life
$000
Intellectual property
Capitalised
Definite development
costs
$000
life
$000
Computer
software
$000
Total
$000
Consolidated
2008
Cost
Balance at 1 August 2007
Additions
Additions through
business combinations
Disposals
Other transfers
Exchange adjustment
299,288
13,359
285,750
38,643
55,873
30,111
54,706
16,679
17,130
1,206
712,747
99,998
41,386
–
–
6,294
94,775
(2,402)
15,696
8,871
–
–
(11,666)
1,623
1,268
(1,594)
3,894
633
25
(3)
–
(194)
137,454
(3,999)
7,924
17,227
Balance at 31 July 2008
360,327
441,333
75,941
75,586
18,164
971,351
Amortisation and
impairment losses
Balance at 1 August 2007
Amortisation charge
for the year
Transferred to discontinued
businesses
Disposals
Other transfers
Exchange adjustment
(74,248)
(10,263)
(25,017)
(12,566)
(9,932)
(132,026)
–
–
(4,000)
(4,685)
(1,973)
(10,658)
–
–
–
945
–
–
–
56
–
–
360
(697)
(705)
1,201
(8,284)
(204)
–
–
–
161
(705)
1,201
(7,924)
261
Balance at 31 July 2008
(73,303)
(10,207)
(29,354)
(25,243)
(11,744)
(149,851)
Intangibles carrying
amount at 31 July 2008
287,024
431,126
46,587
50,343
6,420
821,500
The major intangibles with an indefinite economic life are the product registrations that Nufarm owns. These
registrations are considered to have an indefinite life because, based on past experience, they will be renewed
by the relevant regulatory authorities and the underlying products will continue to be commercialised and available
for sale in the foreseeable future. The company will satisfy all of the conditions necessary for renewal and the
cost of renewal is minimal. In determining that the registrations have indefinite useful life, the principal factor
that influenced this determination is the expectation that the existing registration will not be subject to significant
amendment in the foreseeable future.
The group has determined that legal entity by country is the appropriate method for determining the cash-generating
units (CGU) of the business. This level of CGU aligns with the cash flows of the business and the management
structure of the group. The goodwill and intellectual property with an indefinite life are CGU specific, as the
acquisitions generating goodwill and the product registrations that are the major indefinite intangible are
country specific in nature. There is no allocation of goodwill between CGUs.
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
77
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
23. Intangible assets (continued)
The major CGUs and their intangible value is as follows: Brazil $297 million, USA $178 million, seeds business
$70 million, UK and Holland $65 million, AH Marks business $44 million, Australia $42 million and France $28
million. The balance of intangibles is spread across multiple CGUs, with no individual amount being material
relative to the total intangibles at balance date.
For the impairment testing of these assets, the carrying amount of the asset is compared to its recoverable
amount at a CGU level. The group uses the value-in-use method to estimate the recoverable amount. In assessing
value-in-use, the estimated future cash flows are derived from the five year plan for each cash-generating unit
with a growth factor applied to extrapolate a cash flow over a 20 year period. The 20 year period has been selected
on the basis that this period most closely aligns with the product registration life in most geographies. The growth
rate assumed for each CGU is the forecast growth over the next five years, with a cap of 10 per cent. The 10 per
cent growth cap is the average growth achieved by the group in recent years. The cash flow is then discounted
to a present value using a discount rate of 11.4 per cent, which is the company’s weighted average cost of
capital. At 31 July 2009, the recoverable amount exceeded the carrying amount for all CGUs.
Sensitivity analysis on the impairment testing was performed assuming a zero growth rate for all CGUs. There were
no impairment issues under this scenario. Sensitivity analysis was also done around the discount rate, assuming
a one per cent increase and one per cent decrease in the discount rate. Again, no impairment issues arose. Finally,
specific impairment testing was done for the Brazil CGU, assuming a zero growth rate and discount factors of
15 per cent and 20 per cent. Under all scenarios, the Brazil CGU recoverable amount was higher than the
carrying value.
Goodwill
$000
Indefinite
life
$000
Intellectual property
Capitalised
Definite development
costs
$000
life
$000
Company
2009
Cost
Balance at 1 August 2008
Additions
Transfer
Exchange adjustment
Balance at 31 July 2009
Amortisation and
impairment losses
Balance at 1 August 2008
Amortisation charge for
the year
Transfer
Exchange adjustment
Balance at 31 July 2009
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Computer
software
$000
140
989
–
2
Total
$000
140
989
–
2
1,131
1,131
(91)
(69)
–
–
(91)
(69)
–
–
(160)
(160)
Intangibles carrying amount
at 31 July 2009
–
–
–
–
971
971
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
78
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
23. Intangible assets (continued)
Intellectual property
Capitalised
Definite development
costs
$000
life
$000
Computer
software
$000
Total
$000
Company
Cost
Balance at 1 August 2007
Additions
Transfer
Exchange adjustment
Balance at 31 July 2008
Amortisation and
impairment losses
Balance at 1 August 2007
Amortisation charge
for the year
Transfer
Exchange adjustment
Balance at 31 July 2008
Goodwill
$000
Indefinite
life
$000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Intangibles carrying
amount at 31 July 2008
–
–
24 . Trade and other payables
Current payables – unsecured
Trade creditors and accruals – unsecured
Payables due to controlled entities
Loans due to controlled entities
Payables due to associated entities
Derivative financial instruments
Payables – acquisitions
Securitisation payables
Non-current payables – unsecured
Creditors and accruals
Payables – acquisitions
2008
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
84
62
6
(12)
140
(60)
(34)
(6)
9
(91)
84
62
6
(12)
140
(60)
(34)
(6)
9
(91)
–
49
49
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
376,432
–
–
608
9,250
21,131
–
619,525
–
–
829
90
–
157,616
4,184
3,122
100,041
–
50
–
–
11,324
8,310
114,037
–
–
–
–
407,421
778,060
107,397
133,671
9,452
8,243
17,695
13,283
26,559
39,842
–
–
–
–
–
–
The group sells receivables to an unrelated third party for which Nufarm acts as the collection agent. The
securitisation payables above represent the sum payable in respect of those sales. The securitisation program,
under which the receivables were collected, was closed on 12 June 2009.
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
79
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
25. Interest-bearing loans and borrowings
This note provides information about the contractual terms of the group’s and the company’s interest-bearing
loans and borrowings.
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
583,961
314
417
587,171
–
441
584,692
587,612
387,048
1,522
13,757
335,962
1,028
14,466
402,327
351,456
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Consolidated
Company
Accessible
$000
utilised Accessible
$000
$000
utilised
$000
1,773,580
1,836
–
1,006,678
1,836
–
1,775,416
1,008,514
1,614,589
1,028
157,616
943,974
1,028
157,616
1,773,233
1,102,618
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Current liabilities
Bank loans – unsecured
Other loans – unsecured
Finance lease liabilities – secured
Non-current liabilities
Bank loans – unsecured
Other loans – unsecured
Finance lease liabilities – secured
Financing facilities
The group has access to the following facilities
with a number of financial institutions.
2009
Bank loan facilities
Other facilities
Receivables securitisation-type facilities
Total financing facilities
2008
Bank loan facilities
Other facilities
Receivables securitisation-type facilities
Total financing facilities
Financing arrangements
Bank loans
All unsecured bank borrowings, including bank overdraft facilities, are provided by banks that are parties to the
group negative pledge deed. The assets of all the entities included in the negative pledge deed (note 35) are in
excess of their related borrowings.
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
80
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
25. Interest-bearing loans and borrowings (continued)
Repayment of borrowings (excluding finance leases)
Period ending 31 July 2009
Period ending 31 July 2010
Period ending 31 July 2011
Period ending 31 July 2012
Period ending 31 July 2013 or later
Finance lease liabilities
Consolidated
Company
2009
$000
–
619,944
172,191
137,571
78,808
2008
$000
2009
$000
2008
$000
608,011
100,040
235,923
1,028
–
–
–
–
–
–
–
–
–
–
–
Finance leases are entered into to fund the acquisition of plant and equipment.
Lease commitments for capitalised finance leases are payable as follows:
Not later than one year
Later than one year but not later than two years
Later than two years but not later than five years
Later than five years
Less future finance charges
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
1,854
1,704
4,618
113,111
121,287
(107,113)
1,925
1,666
4,810
120,425
128,826
(113,919)
14,174
14,907
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Finance lease liabilities are secured over the relevant leased plant.
Average interest rates
Nufarm Step-up Securities
Bank loans
Other loans
Finance lease liabilities – secured
Consolidated
Company
2009
%
8.73
5.03
6.00
11.69
2008
%
8.78
7.32
9.25
11.57
2009
%
2008
%
–
–
–
–
–
–
–
–
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
81
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
26. Employee benefits
Consolidated
Company
2009
$000
2008
$000
2009
$000
Current
Liability for annual leave
Liability for long service leave
Non-current
Present value of wholly unfunded obligations
Present value of wholly funded obligations
Fair value of fund assets – funded
13,069
7,602
20,671
11,597
6,625
18,222
5,114
116,543
(89,829)
8,201
110,487
(93,786)
Recognised liability for defined benefit fund obligations
31,828
24,902
Liability for annual leave
Liability for long service leave
Total employee benefits
4,046
7,231
43,105
63,776
5,252
6,591
36,745
54,967
378
54
432
–
–
–
–
–
–
–
432
2008
$000
342
–
342
–
–
–
–
–
52
52
394
The consolidated entity makes contributions to defined benefit pension funds, in the UK, Holland, France and
Indonesia, that provide defined benefit amounts for employees upon retirement. The company has no defined
benefit pension funds.
historical information
Present value of defined benefit
obligation
Fair value of plan assets
Consolidated
2009
$000
2008
$000
2007
$000
2006
$000
2005
$000
(121,657)
89,829
(118,688)
93,786
(59,287)
39,732
(62,587)
35,477
(57,881)
30,534
Surplus/(deficit)
(31,828)
(24,902)
(19,555)
(27,110)
(27,347)
Experience adjustments arising
on plan liabilities
Experience adjustments arising
on plan assets
(1,223)
700
321
961
3,640
(8,058)
(10,088)
1,687
586
4,086
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
82
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
26. Employee benefits (continued)
Changes in the present value of the defined
benefit obligation are as follows:
Opening defined benefit obligation
Liability assumed with AH Marks business
Service cost
Interest cost
Actuarial gains
Past service cost
Losses/(gains) on curtailment
Contributions
Benefits paid
Exchange differences on foreign funds
Consolidated
2009
$000
2008
$000
118,688
–
3,692
7,768
5,516
5
(4,301)
414
(5,901)
(4,224)
59,287
65,017
2,952
4,609
(6,617)
5
–
355
(3,508)
(3,412)
Closing defined benefit obligation
121,657
118,688
Changes in the fair value of fund assets
are as follows:
Opening fair value of fund assets
Assets assumed with AH Marks business
Expected return
Actuarial gains/(losses)
Contributions by employer
Distributions
Exchange differences on foreign funds
Closing fair value of fund assets
The actual return on plan assets is the sum of
the expected return and the actuarial gain/(loss).
Expense recognised in profit or loss
Current service costs
Interest on obligation
Expected return on fund assets
Past service cost
Losses/(gains) on curtailment
93,786
–
6,707
(7,017)
4,928
(5,126)
(3,449)
89,829
39,732
60,286
4,276
(9,079)
3,964
(2,674)
(2,719)
93,786
3,692
7,768
(6,707)
5
(4,301)
457
2,952
4,609
(4,276)
5
–
3,290
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
83
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
26. Employee benefits (continued)
The expense is recognised in the following
line items in the income statement:
Cost of sales
Sales, marketing and distribution expenses
General and administrative expenses
Research and development expenses
Actuarial gains/(losses) recognised directly
in equity (net of tax)
Cumulative amount at 1 August
Recognised during the period
Cumulative amount at 31 July
The major categories of fund assets as a
percentage of total fund assets are as follows:
European equities
European bonds
Property
Cash
Principal actuarial assumptions at the reporting
date (expressed as weighted averages):
Discount rate at 31 July
Expected return on fund assets at 31 July
Future salary increases
Future pension increases
Consolidated
2009
$000
2008
$000
(1,134)
754
449
388
457
2,044
577
450
219
3,290
929
(8,454)
(7,525)
3,380
(2,451)
929
Consolidated
2009
%
2008
%
58.7
39.3
1.6
0.4
6.0
6.6
3.5
3.1
60.7
36.9
2.3
0.1
6.4
6.9
3.5
3.3
The overall expected long term rate of return on assets is 6.6 per cent. The expected rate of return on plan
assets reflects the average rate of earnings expected on the funds invested to provide for the benefits included
in the projected benefit obligation.
The group expects to pay $4,463,000 in contributions to defined benefit plans in 2010.
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
84
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
27. Share-based payments
The Nufarm Executive Share Plan (2000) offers shares to executives. The executives may select an alternative
mix of shares (at no cost) and options at a cost determined under the ‘Black Scholes’ methodology. These
benefits are only given when a predetermined return on capital employed is achieved over the relevant period.
The shares and options are subject to forfeiture and dealing restrictions. The executive cannot deal in the shares
or options for a period of between three and 10 years without board approval. An independent trustee holds the
shares and options on behalf of the executives. At 31 July 2009 there were 77 participants (2008: 58 participants)
in the scheme and 1,714,045 shares (2008: 1,522,934) were allocated and held by the trustee on behalf of the
participants. The cost of issuing shares is expensed in the year of issue.
The Global Share Plan commenced in 2001, and is available to all permanent employees. Participants contribute
a proportion of their salary to purchase shares. The company will contribute an amount equal to 10 per cent of
the number of ordinary shares acquired with a participant’s contribution in the form of additional ordinary shares.
Amounts over 10 per cent of the participant’s salary can be contributed but will not be matched. For each year
the shares are held, up to a maximum of five years, the company contributes a further 10 per cent of the value
of the shares acquired with the participant’s contribution. An independent trustee holds the shares on behalf
of the participants. At 31 July 2009 there were 763 participants (2008: 749 participants) in the scheme and 1,710,550
shares (2008: 1,604,742) were allocated and held by the trustee on behalf of the participants. The cost of the
Global Share Plan expensed for the year ended 31 July 2009 was $306,865 (2008: $1,037,967).
The power of appointment and removal of the trustees for the share purchase schemes is vested in the company.
28. Provisions
Current
Restructuring
Other
Consolidated
movement in provisions
Balance at 1 August 2008
Provisions made during the year
Provisions used during the year
Exchange adjustment
Balance at 31 July 2009
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
21,958
4,133
26,091
–
6,184
6,184
–
–
–
–
–
–
Restructuring
$000
Other
provisions
$000
Total
$000
6,184
21,958
(1,954)
(97)
–
21,958
–
–
21,958
6,184
–
(1,954)
(97)
4,133
26,091
The provision for restructuring in France ($21.96 million) relates to the shutdown of two manufacturing units and
the associated redundancy costs. The other provision consists of contingent liabilities recognised with the Agripec
acquisition ($4.1 million).
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
85
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
29. Capital and reserves
Reconciliation of movements in capital and reserves
29. Capital and reserves (continued)
Consolidated
Share
capital
$000
Translation
reserve
$000
Capital profit
reserve
$000
Other
reserve
$000
Retained
earnings
$000
Nufarm Step-up
Securities
$000
minority
interest
$000
Balance at 1 August 2007
240,886
(24,344)
33,627
531,124
246,932
1,017
1,029,151
Foreign exchange translation differences
Actuarial gains/(losses) on defined benefit plans
Shares issued to employees
Accrual and issue of shares under global share plan
Shares issued under private placement (net of costs)
Shares issued under share purchase plan
Shares issued as consideration for business acquisition
Tax benefit on share issue costs
Transfer to/from reserves
Profit for the period
Dividends paid to shareholders
Distributions to Nufarm Step-up Security holders
–
–
1,805
948
197,755
10,791
3,986
699
–
–
–
–
(2,461)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance at 31 July 2008
456,870
(26,805)
33,627
593,558
246,932
1,036
1,305,218
Balance at 1 August 2008
456,870
(26,805)
33,627
593,558
246,932
1,036
1,305,218
Foreign exchange translation differences
Actuarial gains/(losses) on defined benefit plans
Shares issued to employees
Accrual and issue of shares under global share plan
Shares issued under private placement (net of costs)
Shares issued under share purchase plan
Shares issued as consideration for business acquisition
Dividend reinvestment plan
Tax benefit on share issue costs
Profit for the period
Dividends paid to shareholders
Distributions to Nufarm Step-up Security holders
Minority interest acquired
–
–
3,078
78
294,764
35,691
7,975
12,705
1,683
–
–
–
–
(19,828)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance at 31 July 2009
812,844
(46,633)
33,627
584,348
246,932
821
1,631,939
Total
equity
$000
(2,491)
(2,451)
1,805
1,039
197,755
10,791
3,986
699
56
138,120
(58,478)
(14,764)
(19,788)
(8,454)
3,078
78
294,764
35,691
7,975
12,705
1,683
79,925
(65,297)
(15,336)
(303)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(30)
–
–
–
–
–
–
–
–
205
(156)
–
40
–
–
–
–
–
–
–
–
48
–
–
(303)
(91)
–
–
–
91
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(2,451)
–
–
–
–
–
–
–
56
137,915
(58,322)
(14,764)
(8,454)
–
–
–
–
–
–
–
–
79,877
(65,297)
(15,336)
–
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
86
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
29. Capital and reserves
Reconciliation of movements in capital and reserves
29. Capital and reserves (continued)
Consolidated
Share
capital
$000
Translation
Capital profit
reserve
$000
reserve
$000
Other
reserve
$000
Retained
earnings
$000
Nufarm Step-up
Securities
$000
minority
interest
$000
Total
equity
$000
Balance at 1 August 2007
240,886
(24,344)
33,627
Foreign exchange translation differences
Actuarial gains/(losses) on defined benefit plans
Shares issued to employees
Accrual and issue of shares under global share plan
Shares issued under private placement (net of costs)
Shares issued under share purchase plan
Shares issued as consideration for business acquisition
Tax benefit on share issue costs
Transfer to/from reserves
Profit for the period
Dividends paid to shareholders
Distributions to Nufarm Step-up Security holders
–
–
1,805
948
197,755
10,791
3,986
699
–
–
–
–
–
–
3,078
78
35,691
7,975
12,705
1,683
–
–
–
–
(2,461)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance at 31 July 2008
456,870
(26,805)
33,627
Balance at 1 August 2008
456,870
(26,805)
33,627
Foreign exchange translation differences
Actuarial gains/(losses) on defined benefit plans
Shares issued to employees
Accrual and issue of shares under global share plan
(19,828)
Shares issued under private placement (net of costs)
294,764
Shares issued under share purchase plan
Shares issued as consideration for business acquisition
Dividend reinvestment plan
Tax benefit on share issue costs
Profit for the period
Dividends paid to shareholders
Distributions to Nufarm Step-up Security holders
Minority interest acquired
Balance at 31 July 2009
812,844
(46,633)
33,627
(91)
–
–
–
91
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
531,124
246,932
1,017
1,029,151
–
(2,451)
–
–
–
–
–
–
56
137,915
(58,322)
(14,764)
–
–
–
–
–
–
–
–
–
–
–
–
(30)
–
–
–
–
–
–
–
–
205
(156)
–
(2,491)
(2,451)
1,805
1,039
197,755
10,791
3,986
699
56
138,120
(58,478)
(14,764)
593,558
246,932
1,036
1,305,218
593,558
246,932
1,036
1,305,218
–
(8,454)
–
–
–
–
–
–
–
79,877
(65,297)
(15,336)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
40
–
–
–
–
–
–
–
–
48
–
–
(303)
(19,788)
(8,454)
3,078
78
294,764
35,691
7,975
12,705
1,683
79,925
(65,297)
(15,336)
(303)
584,348
246,932
821
1,631,939
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
87
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
29. Capital and reserves (continued)
Reconciliation of movements in capital and reserves (continued)
Share
capital
$000
Company
Translation
reserve
$000
Capital profit
reserve
$000
Balance at 1 August 2007
240,886
5,152
40,074
Foreign exchange translation differences
Shares issued to employees
Accrual and issue of shares under global share plan
Shares issued under private placement (net of costs)
Shares issued under share purchase plan
Shares issued as consideration for business acquisition
Tax benefit on share issue costs
Transfer to/from reserves
Profit for the period
Dividends paid to shareholders
–
1,805
948
197,755
10,791
3,986
699
–
–
–
(7,871)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance at 31 July 2008
456,870
(2,719)
40,074
Balance at 1 August 2008
456,870
(2,719)
40,074
Foreign exchange translation differences
Shares issued to employees
Accrual and issue of shares under global share plan
Shares issued under private placement (net of costs)
Shares issued under share purchase plan
Shares issued as consideration for business acquisition
Dividend reinvestment plan
Tax benefit on share issue costs
Profit for the period
Dividends paid to shareholders
–
3,078
78
294,764
35,691
7,975
12,705
1,683
–
–
(1,328)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance at 31 July 2009
812,844
(4,047)
40,074
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
88
29. Capital and reserves (continued)
Nufarm Step-up
Securities
$000
minority
interest
$000
Other
reserve
$000
(91)
–
–
91
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Retained
earnings
$000
175,908
64,698
(58,322)
182,341
182,341
–
–
–
–
–
–
–
57
–
–
–
–
–
–
–
–
55,349
(65,297)
172,393
Total
equity
$000
461,929
(7,871)
1,805
1,039
197,755
10,791
3,986
699
57
64,698
(58,322)
676,566
676,566
(1,328)
3,078
78
294,764
35,691
7,975
12,705
1,683
55,349
(65,297)
1,021,264
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
29. Capital and reserves (continued)
Reconciliation of movements in capital and reserves (continued)
Company
Share
capital
$000
Translation
Capital profit
reserve
$000
reserve
$000
Balance at 1 August 2007
240,886
5,152
40,074
Foreign exchange translation differences
Shares issued to employees
Accrual and issue of shares under global share plan
Shares issued under private placement (net of costs)
Shares issued under share purchase plan
Shares issued as consideration for business acquisition
Tax benefit on share issue costs
Transfer to/from reserves
Profit for the period
Dividends paid to shareholders
–
1,805
948
197,755
10,791
3,986
699
–
–
–
–
3,078
78
35,691
7,975
12,705
1,683
–
–
(7,871)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance at 31 July 2008
456,870
(2,719)
40,074
Balance at 1 August 2008
456,870
(2,719)
40,074
Foreign exchange translation differences
Shares issued to employees
Accrual and issue of shares under global share plan
(1,328)
Shares issued under private placement (net of costs)
294,764
Shares issued under share purchase plan
Shares issued as consideration for business acquisition
Dividend reinvestment plan
Tax benefit on share issue costs
Profit for the period
Dividends paid to shareholders
Balance at 31 July 2009
812,844
(4,047)
40,074
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
29. Capital and reserves (continued)
Other
reserve
$000
(91)
–
–
91
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Retained
earnings
$000
175,908
–
–
–
–
–
–
–
57
64,698
(58,322)
182,341
182,341
–
–
–
–
–
–
–
–
55,349
(65,297)
172,393
Nufarm Step-up
Securities
$000
minority
interest
$000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
equity
$000
461,929
(7,871)
1,805
1,039
197,755
10,791
3,986
699
57
64,698
(58,322)
676,566
676,566
(1,328)
3,078
78
294,764
35,691
7,975
12,705
1,683
55,349
(65,297)
1,021,264
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
89
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
29. Capital and reserves (continued)
Company
Share capital
Balance at 1 August
Issue of shares
Balance at 31 July
Number
of ordinary
shares
2009
Number
of ordinary
shares
2008
185,882,333
32,178,866
171,501,253
14,381,080
218,061,199
185,882,333
The company does not have authorised capital or par value in respect of its issued shares.
On 1 October 2008, 527,585 shares at $15.12 were issued as part of the acquisition cost of Lefroy Seeds
Pty Ltd. On 20 October 2008, 198,450 shares at a price of $15.51 were issued under the executive share plan.
On 17 November 2008, 805,960 shares at a price of $10.35 were issued under the dividend reinvestment plan.
On 19 December 2008, 82,000 shares at a price of $9.56 were issued under the global share plan. On 8 May
2009, 358,866 shares at a price of $12.16 were issued under the dividend reinvestment plan. On 21 May 2009,
26,700,000 shares were issued at a price of $11.25 under an institutional placement to provide the group with
enhanced financial flexibility and to strengthen the balance sheet. On 30 June 2009, 3,506,005 shares were
issued at $10.18 under a share purchase plan to existing shareholders.
On 15 October 2007, 131,000 shares at a price of $13.78 were issued under the executive share plan.
On 13 December 2007, 65,000 shares at a price of $14.60 were issued under the global share plan.
On 12 March 2008, 13,245,034 were issued at a price of $15.10 under a private placement to fund the
AH Marks and Etigra acquisitions. On 9 April 2008, 714,614 share were issued at $15.10 under a share
placement plan to existing shareholders on the same terms as the private placement. On 7 May 2008,
225,432 shares at $17.68 were issued as part of the acquisition cost of Etigra.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled
to one vote per share at meetings of the company.
Nufarm Step-up Securities
In the year ended 31 July 2007 Nufarm Finance (NZ) Limited, a wholly owned subsidiary of Nufarm Limited,
issued a new hybrid security called Nufarm Step-up Securities (NSS). The NSS are perpetual Step-up Securities
and on 24 November 2006, 2,510,000 NSS were allotted at an issue price of $100 per security raising $251 million.
The NSS are listed on the ASX under the code ‘NFNG’ and on the NZDX under the code ‘NFFHA’. The after-tax
costs associated with the issue of the NSS, totalling $4.1 million, have been deducted from the proceeds.
Distributions on the NSS are at the discretion of the directors and are floating rate, unfranked, non-cumulative
and subordinated. However, distributions of profits and capital by Nufarm Limited are curtailed if distributions
to NSS holders are not made, until such time that Nufarm Finance (NZ) Limited makes up the arrears. The first
distribution date for the NSS was 16 April 2007 and on a six-monthly basis after this date. The floating rate is the
average mid-rate for bills with a term of six months plus a margin of 1.90 per cent. The step-up date is five years
from issue date, and provides the issuer with the following options: (a) keep the NSS on issue whereby the margin
will be reset or stepped up by the step-up margin; or (b) redeem the NSS for face value, or (c) change them for
a number of ordinary shares in Nufarm Limited. The exchange ratio is calculated based on the average market
price of Nufarm ordinary shares for 20 business days prior to exchange date less a 2.5 per cent discount.
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
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L
m
r
a
f
u
N
90
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
29. Capital and reserves (continued)
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations where their functional currency is different to the presentation currency of the
reporting entity.
Capital profit reserve
This reserve is used to accumulate realised capital profits.
Dividends
Dividends recognised in the current year by the company are:
2009
Interim 2009 ordinary
Final 2008 ordinary
Total amount
2008
Interim 2008 ordinary
Final 2007 ordinary
Total amount
Cents
per share
Total amount
$000
Franked/
unfranked
Payment
date
12.0
23.0
12.0
21.0
22,469
42,828
65,297
22,279
36,043
58,322
Unfranked
Franked
8 May 2009
17 Nov 2008
Franked
Franked
2 May 2008
9 Nov 2007
The interim 2009 dividend was unfranked. The final 2008 dividend was fully franked at a rate of 30 per cent.
Distributions recognised in the current year by Nufarm Finance (NZ) Ltd on the Nufarm Step-up Securities are:
2009
Distribution
Distribution
2008
Distribution
Distribution
Distribution Total amount
$000
rate
Payment
date
7.48%
9.97%
8.95%
8.56%
9,361
12,547
21,908
11,263
10,772
22,035
15 Apr 2009
15 Oct 2008
15 Apr 2008
15 Oct 2007
The distribution on the Nufarm Step-up Securities reported on the equity movement schedule has been reduced
by the tax benefit on the gross distribution, giving an after-tax amount of $15.336 million (2008: $14.764 million).
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
91
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
29. Capital and reserves (continued)
Franking credit/(debit) balance
The amount of franking credits available
for the subsequent financial year are:
Franking account balance as at the end of
the year at 30 per cent (2008: 30 per cent)
Franking credits/(debits) that will arise from
the payment of income tax payable/(refund)
as at the end of the year
Balance at 31 July
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
(1,374)
7,742
(1,374)
7,742
6,452
5,078
(2,721)
5,021
6,452
5,078
(2,721)
5,021
The impact on the dividend franking account of dividends proposed after the balance sheet date is zero as the
proposed dividend is unfranked (2008: $17,526,048). In accordance with the tax consolidation legislation, the
company as the head entity in the tax-consolidated group has also assumed the benefit of $5,078,270 (2008:
$5,021,081) franking credits.
30. Earnings per share
Net profit for the year
Net profit attributable to minority interest
Net profit attributable to equity holders of the parent
Nufarm Step-up Securities distribution
Earnings used in the calculations of basic and diluted
earnings per share
Earnings from continuing operations
Earnings from discontinued operations
Subtract items of material income/(expense)
(refer note 6)
Earnings excluding items of material income/
(expense) used in the calculation of earnings
per share excluding material items
Consolidated
2009
$000
80,542
(665)
79,877
(15,336)
2008
$000
138,120
(205)
137,915
(14,764)
64,541
123,151
64,541
–
123,151
–
64,541
123,151
(79,755)
(25,961)
144,296
149,112
For the purposes of determining basic and diluted earnings per share, the after-tax distributions on NSS are
deducted from net profit.
9
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
30. Earnings per share (continued)
Weighted average number of ordinary shares
used in calculation of basic earnings per share
Weighted average number of ordinary shares
used in calculation of diluted earnings per share
Number of shares
2009
2008
192,664,368
177,021,657
192,664,368
177,021,657
There have been no conversions to, calls of, or subscriptions for ordinary shares or issues of ordinary shares
since the reporting date and before the completion of this financial report.
Cents per share
2009
2008
33.5
0.0
33.5
33.5
0.0
33.5
74.9
74.9
69.7
0.0
69.7
69.7
0.0
69.7
84.3
84.3
Earnings per share for continuing and discontinued operations
Basic earnings per share
From continuing operations
From discontinued operations
Diluted earnings per share
From continuing operations
From discontinued operations
Earnings per share (excluding items of material income/expense – see note 6)
Basic earnings per share
Diluted earnings per share
31. Financial risk management
The group and the company have exposure to the following financial risks:
• credit risk;
• liquidity risk; and
• market risk.
This note presents information about the group and company’s exposure to each type of the above risks, their
objectives, policies and processes for measuring and managing risk, and the management of capital.
The board of directors has responsibility to identify, assess, monitor and manage the material risks facing the group
and to ensure that adequate identification, reporting and risk minimisation mechanisms are established and working
effectively. To support and maintain this objective, the audit committee has established detailed policies on risk
oversight and management by approving a global risk management charter that specifies the responsibilities of
the general manager global risk management (which includes responsibility for the internal audit function). This
charter also provides comprehensive global authority to conduct internal audits, risk reviews and system-based
analyses of the internal controls in major business systems operating within all significant company entities
worldwide.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
31. Financial risk management (continued)
The general manager global risk management reports to the chief executive officer and provides a written report
of his activities at each meeting of the audit committee. In doing so he has direct and continual access to the
chairman and members of the audit committee.
Credit risk
Credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from the group’s receivables from customers and other
financial assets. For the company, it primarily arises from receivables due from subsidiaries.
Exposure to credit risk
The group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
demographics of the group’s customer base, including the default risk of the industry and country in which the
customers operate, has less of an influence on credit risk.
The group has credit policies in place and the exposure to credit risk is monitored on an ongoing basis. Credit
evaluations are performed on all customers before the group’s standard payment and delivery terms and conditions
are offered. Purchase limits are established for each customer, which represents the maximum open amount
without requiring further management approval.
The group and company’s maximum exposure to credit risk at the reporting date was:
Carrying amount
Trade and other receivables
Receivables due from controlled entities
Loans due from controlled entities
Cash and cash equivalents
Interest rate cap:
Assets
Forward exchange contracts:
Assets
The group and company’s maximum exposure to
credit risk for trade receivables at the reporting date
by geographic region was:
Carrying amount
Australasia
Europe
North America
South America
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
804,767
–
–
84,312
842,058
–
–
59,143
5,576
6,637
778,111
1,856
4,833
939
461,389
3,308
967
8,504
16,118
26,946
–
–
–
375
906,164
936,651
792,180
470,844
276,653
238,432
44,284
245,398
164,988
263,754
130,177
283,139
804,767
842,058
5,576
–
–
–
5,576
4,833
–
–
–
4,833
9
0
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94
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
31. Financial risk management (continued)
The group’s top five customers account for $139.4 million of the trade receivables carrying amount at 31 July 2009
(2008: $116.4 million). These top five customers represent 19 per cent (2008: 17 per cent) of the total receivables
balance.
Impairment losses
The ageing of the group’s trade receivables at the reporting date was:
Receivables ageing
Current
Past due – 0 to 90 days
Past due – 90 to 180 days
Past due – 180 to 360 days
Past due – more than one year
Provision for impairment
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
504,313
130,284
6,405
11,877
27,694
680,573
(25,087)
593,034
53,372
12,454
5,775
20,681
685,316
(23,339)
655,486
661,977
4,361
280
40
–
–
4,681
–
4,681
3,978
523
212
–
–
4,713
(43)
4,670
Some of the past due receivables are secured by collateral such as directors guarantees, bank guarantees and
charges on fixed assets. The past due receivables not impaired relate to customers that have a good credit history
with the group. Historically, the bad debt write-off from trade receivables has been very low. Over the past seven
years, the bad debt write-off amount has averaged 0.02 per cent of sales, with no greater than 0.50 per cent of
sales written off in any one year.
In the crop protection industry, it is normal practice to vary the terms of sales depending on the climatic conditions
experienced in each country.
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
Balance at 1 August
Provisions made during the year
Provisions used during the year
Provisions reversed during the year
Provisions acquired through business combinations
Exchange adjustment
Balance at 31 July
Consolidated
Company
2009
$000
23,339
12,201
(9,139)
–
–
(1,314)
25,087
2008
$000
21,806
522
(534)
–
–
1,545
23,339
2009
$000
2008
$000
43
–
(43)
–
–
–
–
–
43
–
–
–
–
43
9
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A
–
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t
i
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u
N
95
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
31. Financial risk management (continued)
The allowance account for trade receivables is used to record the impairment losses unless the group is satisfied
that no recovery of the amount owing is possible: at that point the amount is considered irrecoverable and is
written off against the receivable directly.
Liquidity risk
Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet
its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the group’s reputation.
Most group entities have entered into a deed of negative pledge dated 24 October 1996 (last amendment dated
30 January 2009) with the group lenders which provides that all parties to the deed will guarantee to each creditor
payment in full of any debt of each company participating in the deed. See note 35 for listing of entities who are
a party to the deed. The deed of negative pledge allows all borrowings with group lenders to be on an unsecured
basis.
The following are the contractual maturities of the group’s financial liabilities:
Consolidated
2009
Carrying Contractual
cash flows
amount
$000
$000
Less than
1 year
$000
1–2 more than
2 years
$000
years
$000
Non-derivative financial liabilities
Bank overdrafts
Trade and other payables
Bank loans – unsecured
Other loans – unsecured
Finance lease liabilities – secured
Derivative financial liabilities
Forward exchange contracts:
Outflow
Inflow
Derivative financial assets
Forward exchange contracts:
Outflow
Inflow
35,669
415,866
971,009
1,836
14,174
35,669
415,866
971,009
1,836
14,174
–
35,669
398,171
8,243
583,961 171,605
586
186
314
417
–
9,452
215,443
936
13,571
9,250
–
111,290
(102,040)
111,290
(102,040)
–
–
–
–
–
(16,118)
295,046
(311,164)
40,021
(40,488)
–
–
255,025
(270,676)
1,431,686
1,431,686
1,027,315 180,620
223,751
9
0
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2
t
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d
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96
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
31. Financial risk management (continued)
Liquidity risk (continued)
Consolidated
2008
Carrying Contractual
cash flows
amount
$000
$000
Less than
1 year
$000
1–2 more than
2 years
$000
years
$000
Non-derivative financial liabilities
Bank overdrafts
Trade and other payables
Bank loans – unsecured
Other loans – unsecured
Finance lease liabilities – secured
Derivative financial liabilities
Forward exchange contracts:
Outflow
Inflow
Derivative financial assets
Forward exchange contracts:
Outflow
Inflow
20,841
817,812
923,133
1,028
14,907
20,841
817,812
923,133
1,028
14,907
–
20,841
2,000
777,970
587,171 100,040
–
213
–
441
–
37,842
235,922
1,028
14,253
90
–
73,872
(73,782)
73,872
(73,782)
–
–
–
–
–
(26,946)
269,391
(296,337)
24,003
(25,661)
–
–
245,388
(270,676)
1,750,865
1,750,865
1,384,855 102,253
263,757
The following are the contractual maturities of the company’s financial liabilities:
Company
2009
Carrying Contractual
cash flows
amount
$000
$000
Less than
1 year
$000
1–2 more than
2 years
$000
years
$000
Non-derivative financial liabilities
Trade and other payables
Derivative financial liabilities
Forward exchange contracts:
Outflow
Inflow
107,347
107,347
107,347
–
–
50
–
1,211
(1,161)
1,211
(1,161)
107,397
107,397
107,397
–
–
–
–
–
–
9
0
0
2
t
r
o
p
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a
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A
–
d
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i
i
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N
97
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
31. Financial risk management (continued)
Liquidity risk (continued)
Company
2008
Carrying Contractual
cash flows
amount
$000
$000
Less than
1 year
$000
1–2 more than
2 years
$000
years
$000
Non-derivative financial liabilities
Trade and other payables
Derivative financial assets
Forward exchange contracts:
Outflow
Inflow
133,671
133,671
133,671
–
–
–
(375)
9,594
(9,969)
9,594
(9,969)
133,296
133,296
133,296
–
–
–
–
–
–
Interest on borrowings is denominated in currencies that match the cash flows generated by the underlying
operations of the group. This provides an economic hedge and no derivatives are entered into.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the group’s income or the value of its holdings of financial instruments. The objective of market
risk management is to manage and control market risk exposures within acceptable parameters, while optimising
the return.
Currency risk
The consolidated entity uses derivative financial instruments to manage specifically identified foreign currency
risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency
of the individual group entity. The currencies giving rise to this risk are primarily the US Dollar, the Euro, the
British Pound and the Brazilian Real. The consolidated entity uses forward exchange contracts to hedge its
foreign currency risk. Most of the forward exchange contracts have maturities of less than three months after
reporting date.
The consolidated entity uses foreign exchange contracts to manage the foreign currency exposures between the
Nufarm Step-up Securities issued in Australia and New Zealand, and related group funding to several jurisdictions
to which the funds were advanced. The foreign exchange contracts primarily cover the exposure on the principal
advanced to group companies in US Dollars, the Euro and the British Pound.
The consolidated entity does not have any cash flow hedges with all movements in fair value recognised in
profit or loss during the period. The net fair value of forward exchange contracts in the group used as hedges of
forecasted transactions at 31 July 2009 was $6,867,549 (2008: $26,856,120) comprising assets of $16,118,071
(2008: $26,946,301) and liabilities of $9,250,522 (2008: $90,181) that were recognised as derivatives measured
at fair value. The net fair value of forward exchange contracts in the company at 31 July 2009 was $50,030 (2008:
$374,991) comprising assets of $ Nil (2008: $374,991) and liabilities of $50,030 (2008: $ Nil) that were recognised
as derivatives measured at fair value.
9
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
31. Financial risk management (continued)
Currency risk (continued)
Exposure to currency risk
The consolidated entity’s exposure to major foreign currency risks at balance date was as follows, based on
notional amounts:
Consolidated
31 July 2009
Cash and cash equivalents
Trade and other receivables
Bank overdraft
Trade and other payables
Loans and borrowings
AuD
$000
uSD
$000
80
275
–
(1,122)
–
7,328
88,947
(4,431)
(28,936)
(86,521)
Euro
€000
2,263
4,477
–
(10,408)
(5,914)
Gross balance sheet exposure
(767)
(23,613)
(9,582)
GBP
£000
–
194
(64)
(435)
–
(305)
Forward exchange contracts
Net exposure
Consolidated
31 July 2008
Cash and cash equivalents
Trade and other receivables
Bank overdraft
Trade and other payables
Loans and borrowings
(558)
84,577
(17,732)
–
(1,325)
60,964
(27,314)
(305)
AuD
$000
uSD
$000
357
1,034
–
(3,588)
–
5,764
139,893
(3,935)
(74,543)
(114,168)
Euro
€000
1,152
4,956
(23)
(14,701)
(4,555)
GBP
£000
–
–
(113)
(277)
–
(390)
Gross balance sheet exposure
(2,197)
(46,989)
(13,171)
Forward exchange contracts
Net exposure
786
37,826
(2,015)
(1,411)
(9,163)
(15,186)
1,756
1,366
The company’s exposure to major foreign currency risks at balance date was as follows, based on notional
amounts:
Company
31 July 2009
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Gross balance sheet exposure
Forward exchange contracts
Net exposure
AuD
$000
80
84
(25)
139
–
139
uSD
$000
18
–
(352)
(334)
312
(22)
Euro
€000
4
–
(587)
(583)
387
(196)
GBP
£000
–
–
–
–
–
–
9
0
0
2
t
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o
p
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a
u
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A
–
d
e
t
i
i
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L
m
r
a
f
u
N
99
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
31. Financial risk management (continued)
Currency risk (continued)
Exposure to currency risk (continued)
Company
31 July 2008
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Gross balance sheet exposure
Forward exchange contracts
Net exposure
The following significant exchange rates applied during the year:
AuD
US dollar
Euro
GBP
BRL
Sensitivity analysis
AuD
$000
uSD
$000
357
180
(3,441)
205
–
(3,438)
(2,904)
(3,233)
–
(2,904)
9,627
6,394
Euro
€000
150
–
(591)
(441)
–
(441)
GBP
£000
–
–
–
–
–
–
Average rate
Reporting date
2009
2008
2009
2008
0.737
0.541
0.465
1.524
0.911
0.608
0.454
1.578
0.835
0.585
0.500
1.558
0.944
0.605
0.476
1.478
A 10 per cent strengthening or weakening of the Australian dollar against the following currencies at 31 July
would have increased/(decreased) profit or loss by the amounts shown below. This analysis assumes all other
variables, including interest rates, remain constant. The analysis also assumes that any increases in raw material
costs arising from changes in exchange rates are not passed on to customers in their selling prices. In the market
place, nearly all raw material cost increases are passed onto customers and therefore, the profit or loss impact
below is not truly reflective of the full profit or loss impact of changes in exchange rates. The analysis is performed
on the same basis for 2008.
10 per cent strengthening
10 per cent weakening
Consolidated Company Consolidated Company
profit or
loss
$000
profit or
loss
$000
profit or
loss
$000
profit or
loss
$000
31 July 2009
US dollar
Euro
GBP
31 July 2008
US dollar
Euro
GBP
9
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0
2
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a
f
u
N
100
(6,637)
4,245
55
2
30
–
882
2,282
(261)
(616)
66
–
7,301
(4,669)
(61)
(971)
(2,510)
287
(3)
(34)
–
677
(73)
–
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
31. Financial risk management (continued)
Interest rate risk
The group has the ability to use derivative financial instruments to manage specifically identified interest rate risks.
Interest rate swaps, denominated in AUD, have been entered into to achieve an appropriate mix of fixed and floating
rate exposures. However, at 31 July 2009 and at 31 July 2008, there were no interest rate swaps in place.
Cash flow risk on Nufarm Step-up Securities
The group uses interest rate caps to protect the cash flow impact of a movement in the distribution base rate.
The distribution rate is the average mid-rate for bank bills with a term of six months plus a margin of 1.90 per cent.
Profile
At the reporting date the interest rate profile of the group and company’s interest-bearing financial instruments was:
Variable rate instruments
Financial assets
Financial liabilities
Consolidated
Carrying amount
Company
Carrying amount
2009
$000
2008
$000
2009
$000
2008
$000
35,810
(1,022,688)
46,532
(959,909)
(986,878)
(913,377)
1,187
–
1,187
–
–
–
There were no fixed interest rate instruments during the year ended 31 July 2009.
Sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) profit or
loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency
rates, remain constant. The sensitivity is calculated on the debt at 31 July. Due to the seasonality of the crop
protection business, debt levels can vary during the year. This analysis is performed on the same basis for 2008.
31 July 2009
Variable rate instruments
Total sensitivity
31 July 2008
Variable rate instruments
Total sensitivity
Profit or loss
100bp
increase
$000
100bp
decrease
$000
(9,869)
(9,869)
9,869
9,869
(9,134)
(9,134)
9,134
9,134
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
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L
m
r
a
f
u
N
101
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
31. Financial risk management (continued)
Fair values
Fair values versus carrying amounts
The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet,
are as follows:
Consolidated
Note
Cash and cash equivalents
Trade and other receivables
Interest rate cap:
Payable maturities – one to five years
Forward exchange contracts:
Assets
Liabilities
Bank overdraft
Unsecured bank loans
Other loans
Finance leases
15
16
21
16
24
15
25
25
25
Company
Cash and cash equivalents
Trade and other receivables
Receivables due from controlled entities
Loans due from controlled entities
Forward exchange contracts:
Asset/(liabilities)
Bank overdraft
Note
15
16
16
16
16/24
15
Carrying
amount
2009
$000
Fair
value
2009
$000
Carrying
amount
2008
$000
Fair
value
2008
$000
84,312
804,767
84,312
804,767
59,143
842,058
59,143
842,058
967
967
8,504
8,504
16,118
(9,250)
(35,669)
(971,009)
(1,836)
(14,174)
16,118
(9,250)
(35,669)
(971,009)
(1,836)
(14,174)
26,946
(90)
(20,841)
(923,133)
(1,028)
(14,907)
26,946
(90)
(20,841)
(923,133)
(1,028)
(14,907)
(125,774)
(125,774)
(23,348)
(23,348)
Carrying
amount
2009
$000
1,856
5,576
6,637
778,111
Fair
value
2009
$000
1,856
5,576
6,637
778,111
Carrying
amount
2008
$000
3,308
4,833
939
461,389
Fair
value
2008
$000
3,308
4,833
939
461,389
(50)
–
(50)
–
375
–
375
–
792,130
792,130
470,844
470,844
Capital management
The board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. The board of directors monitors the group’s return on funds
employed (ROFE). Return is calculated on the group’s earnings before interest and tax and adjusted for any
non-operating items. Funds employed is defined as shareholder’s funds plus total interest bearing debt.
The board of directors determines the level of dividends to ordinary shareholders. The board also reviews the
group’s total shareholder return with relevant comparator groups. The board believes ROFE is an appropriate
performance condition as it ensures management is focused on the efficient use of capital and the measure
remains effective regardless of the mix of equity and debt, which may change from time to time. The group’s
target ROFE is 17.25 per cent; during the year ended 31 July 2009 the return was 11.7 per cent (2008: 17.2 per cent).
There were no changes in the group’s approach to capital management during the year.
9
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102
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
32. Operating leases
Non-cancellable operating lease rentals are payable as follows:
Not later than one year
Later than one year but not later than two years
Later than two years but not later than five years
Later than five years
Consolidated
Company
2009
$000
10,793
9,479
20,290
180,300
2008
$000
6,763
6,526
18,232
183,339
220,862
214,860
2009
$000
126
22
22
–
170
2008
$000
–
–
–
–
–
Operating leases are generally entered to access the use of shorter term assets such as motor vehicles, mobile
plant and office equipment. Rentals are fixed for the duration of these leases. There is a small number of leases
for office properties. These rentals have regular reviews based on market rentals at the time of review.
33. Capital and other commitments
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
Capital expenditure commitments
Plant and equipment
Contracted but not provided for and payable:
Within one year
12,021
14,078
–
–
34. Contingencies
The directors are of the opinion that provisions are not required in respect of the following matters, as it is not
probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable
measurement.
The parent entity together with all the material wholly owned controlled entities have entered into a negative pledge
deed with the group’s lenders whereby all group entities, which are a party to the deed, have guaranteed
repayment of all liabilities in the event that any of these companies are wound up.
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u
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103
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
34. Contingencies (continued)
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
Guarantee facility for Eastern European
joint ventures with FMC Corporation.
10,276
4,222
–
–
Environmental guarantee given to the purchaser
of land and buildings at Genneviliers for EUR 8.5 million.
The guarantee expires in 2014, 18 months after the
expiry of the business tenancy contract.
Guarantee upon sale of a business limited to
EUR 2.29 million on account of possible remediation
costs for soil and groundwater contamination.
This guarantee decreases from 2004 progressively
to nil in 2011.
Insurance bond for EUR 2.717 million established
to make certain capital expenditures at Gaillon plant
in France. The insurance bond is for a three year term.
14,530
14,050
–
–
3,915
3,785
–
4,644
4,463
–
–
–
Bank guarantee for Holland defined benefit pension
plan to ensure coverage ratios.
342
–
33,707
26,520
–
–
35. Group entities
Parent entity
Nufarm Limited – ultimate controlling entity
Subsidiaries
Access Genetics Pty Ltd
ACN000425927 Pty Ltd
Agcare Biotech Pty Ltd
Agchem Receivables Corporation
Agryl Holdings Limited
Ag-seed Research Pty Ltd
AH Marks (New Zealand) Limited
AH Marks Australia Pty Ltd
AH Marks Holdings Limited
Artfern Pty Ltd
Australis Services Pty Ltd
Bestbeech Pty Ltd
Notes
Place of
incorporation
Percentage
of shares held
2009
2008
(a),(b)
(a),(b)
(b)
(a)
(a)
(a)
Australia
Australia
Australia
USA
Australia
Australia
New Zealand
Australia
United Kingdom
Australia
Australia
Australia
100
100
70
100
100
100
100
100
100
100
100
100
100
100
70
40
100
100
100
100
100
100
100
100
9
0
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2
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i
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L
m
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a
f
u
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104
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
35. Group entities (continued)
Chemicca Limited
CNG Holdings BV
Crop Care Australasia Pty Ltd
Crop Care Holdings Limited
Croplands Equipment Limited
Croplands Equipment Pty Ltd
Danestoke Pty Ltd
Edgehill Investments Pty Ltd
Fchem (Aust) Limited
Fernz Canada Limited
Fernz Singapore Pte Ltd
Fidene Limited
Finotech BV
First Classic Pty Ltd
Framchem SA
Frost Technology Corporation
Greenfarm Hellas Chemicals SA
Growell Limited
Laboratoire European de Biotechnologie s.a.s
Le Moulin des Ecluses s.a
Lefroy Seeds Pty Ltd
Les Ecluses de la Garenne s.a.s
Manaus Holdings Sdn Bhd
Marman (Nufarm) Inc
Marman de Guatemala Sociedad Anomima
Marman de Mexico Sociedad Anomima
De Capital Variable
Marman Holdings LLC
Mastra Corporation Pty Ltd
Mastra Corporation Sdn Bhd
Mastra Corporation USA Pty Ltd
Mastra Holdings Sdn Bhd
Mastra Industries Sdn Bhd
Medisup International NV
Medisup Securities Limited
Nufarm (Asia) Pte Ltd
Nufarm Agriculture (Pty) Ltd
Nufarm Agriculture Inc
Nufarm Agriculture Inc (USA)
Nufarm Agriculture Zimbabwe (Pvt) Ltd
Nufarm Americas Holding Company
Nufarm Americas Inc
Nufarm Asia Sdn Bhd
Nufarm Australia Limited
Nufarm BV
Notes
(a)
(a),(b)
(b)
(a),(b)
(a),(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(a),(b)
(b)
(b)
(b)
(b)
(a),(b)
(b)
Place of
incorporation
Australia
Netherlands
Australia
New Zealand
New Zealand
Australia
Australia
Australia
Australia
Canada
Singapore
New Zealand
Netherlands
Australia
Egypt
USA
Greece
United Kingdom
France
France
Australia
France
Malaysia
USA
Guatemala
Mexico
USA
Australia
Malaysia
Australia
Malaysia
Malaysia
N. Antillies
Australia
Singapore
South Africa
Canada
USA
Zimbabwe
USA
USA
Malaysia
Australia
Netherlands
Percentage
of shares held
2009
2008
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
70
70
70
70
70
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
–
100
100
100
100
100
–
100
100
–
–
100
100
–
100
100
100
100
100
100
70
70
70
70
70
100
100
100
100
100
100
100
100
100
100
100
100
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
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L
m
r
a
f
u
N
105
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
35. Group entities (continued)
Nufarm Chemical (Shanghai) Co Ltd
Nufarm Chile Limitada
Nufarm Colombia S.A.
Nufarm Crop Products UK Limited
Nufarm de Costa Rica
Nufarm de Guatemala SA
Nufarm de Mexico Sa de CV
Nufarm de Panama SA
Nufarm de Venezuela SA
Nufarm del Ecuador SA
Nufarm Deutschland GmbH
Nufarm do Brazil LTDA
Nufarm Espana SA
Nufarm Finance (NZ) Limited
Nufarm GmbH
Nufarm GmbH
Nufarm GmbH & Co KG
Nufarm Holdings (NZ) Limited
Nufarm Holdings BV
Nufarm Holdings s.a.s
Nufarm Hungaria Kft
Nufarm Inc.
Nufarm Industria Quimica e Farmaceutica SA
(formerly Agripec Quimica e Farmaceutica SA)
Nufarm Insurance Pte Ltd
Nufarm Investments Cooperatie WA
Nufarm Italia Holding srl (merged into Nufarm
Italia srl)
Nufarm Italia srl
Nufarm KK
Nufarm Labuan Pte Ltd
Nufarm Limited
Nufarm Malaysia Sdn Bhd
Nufarm Materials Limited
Nufarm NZ Limited
Nufarm Peru SAC
Nufarm Platte Pty Ltd
Nufarm Portugal LDA
Nufarm Romania SRL (formerly Nufarm Srl)
Nufarm s.a.s
Nufarm SA
Nufarm Suisse Sarl (formerly Nufarm
Switzerland LLC)
Nufarm Technologies (M) Sdn Bhd
Notes
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(a),(b)
(b)
(b)
(b)
(b)
(b)
(b)
Place of
incorporation
China
Chile
Colombia
United Kingdom
Costa Rica
Guatemala
Mexico
Panama
Venezuela
Ecuador
Germany
Brazil
Spain
New Zealand
Germany
Austria
Austria
New Zealand
Netherlands
France
Hungary
USA
Brazil
Singapore
Netherlands
Italy
Italy
Japan
Malaysia
United Kingdom
Malaysia
Australia
New Zealand
Peru
Australia
Portugal
Romania
France
Argentina
Switzerland
Malaysia
Percentage
of shares held
2009
2008
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
–
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
–
100
100
100
100
100
100
51
9
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
106
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
35. Group entities (continued)
Nufarm Technologies USA
Nufarm Technologies USA Pty Ltd
Nufarm Treasury Pty Ltd
Nufarm UK Limited
Nugrain Pty Ltd
Nuseed Pty Ltd
Nutrihealth Grains Pty Ltd
Nutrihealth Pty Ltd
Opti-Crop Systems Pty Ltd
Pharma Pacific Pty Ltd
PT Crop Care
PT Nufarm Indonesia
Selchem Pty Ltd
Notes
(a),(b)
(b)
(b)
(a)
(b)
(a)
Place of
incorporation
New Zealand
Australia
Australia
United Kingdom
Australia
Australia
Australia
Australia
Australia
Australia
Indonesia
Indonesia
Australia
Percentage
of shares held
2009
2008
100
100
100
100
100
100
100
100
75
100
100
100
100
100
100
100
100
100
100
100
100
75
100
100
100
100
Note (a). These entities have entered into a deed of cross guarantee dated 10 July 2000 with Nufarm Limited
which provides that all parties to the deed will guarantee to each creditor payment in full of any debt of each
company participating in the deed on winding-up of that company. As a result of a class order issued by the
Australian Securities and Investment Commission, these companies are relieved from the requirement to
prepare financial statements.
Note (b). These entities have entered into a deed of negative pledge dated 24 October 1996 (last amendment
dated 30 January 2009) with group lenders which provides that all parties to the deed will guarantee to each
creditor payment in full of any debt of each company participating in the deed.
36. Deed of cross guarantee
Under ASIC Class Order 98/1418, the Australian wholly-owned subsidiaries referred to in note 35 are relieved
from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports and
director’s reports.
It is a condition of the class order that the company and each of the subsidiaries enter into a deed of cross
guarantee. The parent entity and all the Australian controlled entities have entered into a deed of cross guarantee
dated 10 July 2000 which provides that all parties to the deed will guarantee to each creditor payment in full of
any debt of each company participating in the deed on winding-up of that company.
A consolidated income statement and consolidated balance sheet, comprising the company and controlled entities
which are a party to the deed, after eliminating all transactions between parties to the deed of cross guarantee,
at 31 July 2009 is set out as follows:
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107
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
36. Deed of cross guarantee (continued)
Consolidated
2009
$000
2008
$000
Summarised income statement and retained profits
Profit before income tax expense
Income tax expense
60,239
(16,149)
Net profit attributable to members of the closed group
44,090
Retained profits at the beginning of the period
Amendments to the closed group
Dividends paid
Retained profits at the end of the period
Statement of financial position
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax assets
Total current assets
Non-current assets
Equity accounted investments
Other investments
Deferred tax assets
Property, plant and equipment
Intangible assets
Total non-current assets
TOTAL ASSETS
Statement of financial position
Current liabilities
Bank overdraft
Trade and other payables
Interest bearing loans and borrowings
Employee benefits
Current tax payable
Total current liabilities
Non-current liabilities
Interest bearing loans and borrowings
Deferred tax liabilities
Employee benefits
Provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
9
0
0
2
t
r
o
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108
65,100
(20,201)
44,899
299,730
–
(58,322)
286,307
3,632
216,307
281,801
19,265
521,005
12,749
527,716
23,687
162,959
91,039
818,150
286,307
2,122
(65,297)
267,222
4,326
470,871
192,403
1,823
669,423
10,365
588,586
23,274
162,553
43,909
828,687
1,498,110
1,339,155
–
195,705
105,875
3,471
7,130
312,181
32,350
4,185
2,863
11,277
50,675
3,680
386,779
84,500
8,509
11,169
494,637
14,000
13,090
9,173
4,000
40,263
362,856
534,900
1,135,254
804,255
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
36. Deed of cross guarantee (continued)
Equity
Share capital
Reserves
Retained earnings
TOTAL EQuITY
Consolidated
2009
$000
2008
$000
812,844
55,188
267,222
456,870
61,078
286,307
1,135,254
804,255
37. Reconciliation of cash flows from operating activities
Cash flows from operating activities
Profit for the period
Dividend from associated company
Non-cash items:
Amortisation
Depreciation
Loss on sale of investment
Gain on disposal of non current assets
Net realisable value inventory adjustment
Write-down of non current assets
Share of profits of associates net of tax
Movement in provisions for:
Deferred tax
Tax assets
Exchange rate change on foreign
controlled entities provisions
Operating profit before changes in working
capital and provisions
Movements in working capital items:
(Increase)/decrease in receivables
(Increase)/decrease in inventories
Increase/(decrease) in payables
Increase/(decrease) in income tax payable
Exchange rate change on foreign controlled
entities working capital items
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
80,542
423
138,120
373
55,349
–
64,698
373
16,361
48,412
3,813
(284)
67,611
–
(3,080)
10,900
36,580
–
(135)
–
165
(2,698)
69
617
–
44
–
–
(1,091)
6,976
(78,655)
15,956
(33,530)
(74)
11,450
34
612
–
(16)
–
–
(1,237)
71
(1,734)
2,511
1,851
39
(220)
144,630
167,582
66,403
62,581
58,862
46,499
(349,585)
11,883
(8,728)
(354,235)
68,583
(4,223)
34,586
3,619
(197,755)
(294,984)
(377)
(416)
(7,044)
(1,422)
1,669
(7,590)
2,286
(2,597)
2,742
(6,869)
(1,901)
(6,339)
Net operating cash flows
(53,125)
(127,402)
58,813
56,242
9
0
0
2
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i
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u
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109
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
38. Key management personnel disclosures
The following were key management personnel of the consolidated entity at any time during the reporting period
and were key management personnel for the entire period.
Executives
BF Benson – Group general manager agriculture
R Heath – Group general manager corporate services and company secretary
Non-executive directors
KM Hoggard (Chairman)
GDW Curlewis
Dr RJ Edgar (appointed 1 July 2009) KP Martin – Chief financial officer
Dr WB Goodfellow
GA Hounsell
DG McGauchie
Dr JW Stocker
DA Mellody – Group general manager global marketing
RF Ooms – Group general manager chemicals
MJ Pointon – Group general manager innovation and development
DA Pullan – Group general manager operations
RG Reis – Group general manager corporate strategy and external affairs
Executive director
DJ Rathbone – Managing director and chief executive
Key management personnel compensation
The key management personnel compensation included in personnel expenses (see note 9) are as follows:
Short term employee benefits
Post employment benefits
Equity compensation benefits
Other long term benefits
Consolidated
Company
2009
$
2008
$
2009
$
2008
$
6,320,665
698,981
77,250
262,368
9,723,114
644,142
97,045
299,266
849,750
123,500
77,250
–
777,661
113,516
50,000
–
7,359,264
10,763,567
1,050,500
941,177
Individual directors and executives compensation disclosures
Information regarding individual directors and executives compensation is provided in the remuneration report
section of the director’s report.
Apart from the details disclosed in this note, no director has entered into a material contract with the company or
the consolidated entity since the end of the previous financial year and there were no material contracts involving
director’s interest existing at year-end.
Loans to key management personnel and their related parties
There were no loans to key management personnel at July 31 2009.
Other key management personnel transactions with the company or its controlled entities
A number of key management persons, or their related parties, hold positions in other entities that result in them
having control or significant influence over the financial or operating policies of those entities. A number of these
entities transacted with the company or its subsidiaries in the reporting period. The terms and conditions of the
transactions with management persons and their related parties were no more favourable than those available,
or which might reasonably be expected to be available, on similar transactions to non-director related entities
on an arms-length basis.
9
0
0
2
t
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o
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a
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A
–
d
e
t
i
i
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a
f
u
N
110
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
38. Key management personnel disclosures (continued)
Other key management personnel transactions with the company or its controlled entities continued
From time to time, key management personnel of the company or its controlled entities, or their related entities,
may purchase goods from the group. These purchases are on the same terms and conditions as those entered
into by other group employees or customers and are trivial or domestic in nature.
Options and rights over equity instruments granted as compensation
No options or other equity instruments were granted to key management personnel during the current or prior
year reporting period as compensation.
Movements in shares
The movement during the reporting period in the number of ordinary shares in Nufarm Limited held, directly,
indirectly or beneficially, by each key management person, including their related parties, is as follows:
Shares held
in Nufarm Ltd
2009
Directors
KM Hoggard1
DJ Rathbone
GDW Curlewis
Dr WB Goodfellow1, 2
Dr RJ Edgar
GA Hounsell1
DG McGauchie1
Dr JW Stocker1
Executives
BF Benson
R Heath
KP Martin
DA Mellody
RF Ooms
MJ Pointon
DA Pullan
RG Reis
Total
Balance
at 1 August
2008
Granted as
Exercise
remuneration of options
Net
change
other
Balance at
31 July
2009
2,383,614
25,912,610
44,533
665,846
–
45,170
17,038
41,522
149,760
209,001
402,673
16,491
331,155
32,756
138,184
128,569
30,518,922
–
–
2,293
1,550
–
1,550
–
1,550
12,895
6,233
12,895
9,671
12,143
4,827
13,432
10,746
89,785
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1,750,000)
1,454
40,622
–
–
3,000
708
2,383,614
24,162,610
48,280
708,018
–
46,720
20,038
43,780
(88,154)
–
64
(5,196)
–
(20,000)
–
(20,000)
74,501
215,234
415,632
20,966
343,298
17,583
151,616
119,315
–
(1,837,502)
28,771,205
9
0
0
2
t
r
o
p
e
R
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a
u
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n
A
–
d
e
t
i
i
m
L
m
r
a
f
u
N
111
NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
38. Key management personnel disclosures (continued)
Movements in shares (continued)
Shares held
in Nufarm Ltd
2008
Directors
KM Hoggard1
DJ Rathbone
GDW Curlewis
Dr WB Goodfellow1, 2
GA Hounsell1
DG McGauchie1
Dr JW Stocker1
RFE Warburton1
Executives
BF Benson
R Heath
KP Martin
DA Mellody
RF Ooms
DA Pullan
RG Reis
Total
Balance
at 1 August
2007
Granted as
Exercise
remuneration of options
Net
change
other
Balance at
31 July
2008
2,383,614
29,912,610
43,787
662,914
61,959
16,376
40,973
66,938
159,429
209,001
402,673
16,491
356,820
225,392
180,319
–
–
415
549
549
–
549
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(4,000,000)
331
2,383
(17,338)
662
–
662
2,383,614
25,912,610
44,533
665,846
45,170
17,038
41,522
67,600
(9,669)
–
–
–
(25,665)
(87,208)
(51,750)
149,760
209,001
402,673
16,491
331,155
138,184
128,569
34,739,296
2,062
–
(4,187,592)
30,553,766
All equity transactions with key management personnel other than those arising from the exercise of remuneration
options have been entered into under terms and conditions no more favourable than those the entity would have
adopted if dealing at arm’s length.
1 The shareholdings of KM Hoggard, GDW Curlewis, Dr WB Goodfellow, GA Hounsell, DG McGauchie and Dr JW Stocker include shares
issued under the company’s non-executive director share plan and are held by Pacific Custodians Pty Ltd as trustee of the plan.
2 The shareholding of Dr WB Goodfellow includes his relevant interest in:
(i)
St Kentigern Trust Board (430,186 shares and 19,727 Nufarm Step-up Securities) – Dr Goodfellow is chairman of the trust board.
Dr Goodfellow does not have a beneficial interest in these shares or Step-up Securities.
(ii) Sulkem Company Limited (117,628 shares).
(iii) Auckland Medical Research Foundation (26,558 Step-up Securities). Dr Goodfellow does not have a beneficial interest in these
Step-up Securities.
(iv) Trustees of the Goodfellow Foundation (35,698 shares and 1,338 Step-up Securities). Dr Goodfellow does not have a beneficial
interest in these shares or Step-up Securities.
39. Non-key management personnel disclosures
(a) Transactions with related parties in the wholly-owned group
The parent entity entered into the following transactions during the year with subsidiaries of the group:
• loans were advanced and repayments received on short term intercompany accounts; and
• management fees were received from several wholly-owned controlled entities.
These transactions were undertaken on commercial terms and conditions.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
39. Non-key management personnel disclosures (continued)
(b) Transactions with associated parties
Consolidated
Bayer CropScience Nufarm Limited Sales to
SRFA LLC
Excel Crop Care Ltd
F&N joint ventures
Purchases from
Trade receivable
Trade payable
Sales to
Commissions
received
Interest received
Trade receivable
Purchases from
Trade payable
Sales to
Trade payable
Trade receivable
2009
$000
17,069
18,938
–
–
3,682
57
3
–
978
–
68,450
–
36,028
2008
$000
13,859
13,875
1,651
5,930
2,238
–
16
486
1,015
247
65,087
248
29,140
These transactions were undertaken on commercial terms and conditions.
40. Subsequent events
On 28 September 2009, the directors declared a final unfranked dividend of 15 cents per share, payable
13 November 2009. The financial effect of this dividend has not been brought to account in the financial statements
for the year ended 31 July 2009 and will be recognised in the subsequent financial reports. The declaration and
subsequent payment of dividends has no income tax consequences for the company.
With the UK Competition Commission inquiry now finalised, plans are advancing for the consolidation of the
business activities in the UK at the Wyke location. The plant at Belvedere will cease production in October.
No material gain or loss is expected from the closure of the site.
On 5 August 2009, Nufarm acquired two US based sorghum companies, Richardson Seeds Ltd and MMR
Genetics Ltd. Richardsons Seeds is a leading producer and marketer of sorghum seed hybrids, with a leading
market share in the US and expanding positions internationally. MMR Genetics is a global leader in the development
of elite sorghum germplasm, used by many of the world’s top seed companies. Combined sales of Richardsons
Seeds and MMR in 2008 totalled approximately US$22 million.
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NOTES TO ThE FINANCIAL STATEmENTS CONTINuED
41. Auditors’ remuneration
Audit services
KPMG Australia
Consolidated
Company
2009
$000
2008
$000
2009
$000
2008
$000
Audit and review of group financial report
409
385
–
–
Overseas KPMG firms
Audit and review of group financial report
Audit and review of local statutory reports
Other auditors
Audit and review of financial reports
Other services
KPMG Australia
Transaction due diligence services
Other assurance services
Overseas KPMG firms
Other assurance services
947
286
941
188
1,642
1,514
122
1,764
155
1,669
15
–
48
63
12
14
35
61
118
23
141
–
141
–
–
–
–
63
64
127
–
127
–
–
–
–
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DIRECTORS’ DECLARATION
1. In the opinion of the directors of Nufarm Limited (the company):
(a) the financial statements and notes, and the remuneration report in the directors’ report, are in accordance
with the Corporations Act 2001 including:
(i) giving a true and fair view of the company’s and the group’s financial position as at 31 July 2009
and of their performance, for the financial 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 report also complies with International Financial Reporting Standards as disclosed in
note 2(a); and
(c) there are reasonable grounds to believe that the company will be able to pay its debts as and when
they become due and payable.
2. There are reasonable grounds to believe that the company and the group entities identified in note 36 will
be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the deed
of cross guarantee between the company and those group entities pursuant to ASIC Class Order 98/1418.
3. The directors have been given the declarations required by Section 295A of the Corporations Act 2001
from the chief executive officer and chief financial officer for the financial year ended 31 July 2009.
Signed in accordance with a resolution of the directors:
Dated at Melbourne this 28th day of September 2009
KM Hoggard
Director
DJ Rathbone
Director
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INDEPENDENT AuDITOR’S REPORT
TO THE MEMBERS OF NUFARM LIMITED
Report on the financial report
We have audited the accompanying financial report of Nufarm Limited (the company), which comprises the
balance sheets as at 31 July 2009, and the income statements, statements of recognised income and expense
and cash flow statements for the year ended on that date, a summary of significant accounting policies and other
explanatory notes 1 to 41 and the directors’ declaration of the group comprising the company and the entities
it controlled at the year’s end or from time to time during the financial year.
Directors’ responsibility for the financial report
The directors of the company are responsible for the preparation and fair presentation of the financial report in
accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the
preparation and fair presentation of the financial report that is free from material misstatement, whether due to
fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances. In note 2(a), the directors also state, in accordance with Australian Accounting
Standard AASB 101 Presentation of Financial Statements, that the financial report, comprising the financial
statements and notes, complies with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance
whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of
material misstatement of the financial report, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial
report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
the directors, as well as evaluating the overall presentation of the financial report.
We performed the procedures to assess whether in all material respects the financial report presents fairly,
in accordance with the Corporations Act 2001 and Australian Accounting Standards (including the Australian
Accounting Interpretations), a view which is consistent with our understanding of the company’s and the
group’s financial position and of their performance.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
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INDEPENDENT AuDITOR’S REPORT CONTINuED
TO THE MEMBERS OF NUFARM LIMITED
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Auditor’s opinion
In our opinion:
(a) the financial report of Nufarm Limited is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the company’s and the group’s financial position as at 31 July 2009
and of their 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 report also complies with International Financial Reporting Standards as disclosed in note 2(a).
Material uncertainty regarding revenue recognised and valuation of accounts receivable relating
to a claim made on a supplier
Without qualification to the opinion expressed above, attention is drawn to the following matter. As stated in notes
2(d)(vi) and 16, the consolidated entity has recorded revenue and an amount receivable of $37.8 million under an
Exclusive Distribution Agreement with a major supplier. The matter is the subject of a commercial dispute between
the parties which may result in a negotiated settlement or legal proceedings, the outcome of which cannot be
predicted with certainty. No provision has been made for any shortfall in recovery of the amount.
Report on the remuneration report
We have audited the remuneration disclosures included under the heading ‘remuneration report’ in the directors’
report for the year ended 31 July 2009. 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 Auditing Standards.
Auditor’s opinion
In our opinion, the remuneration report of Nufarm Limited for the year ended 31 July 2009, complies with
Section 300A of the Corporations Act 2001.
KPMG
Paul J McDonald
Partner
Melbourne
28 September 2009
KPMG, an Australian partnership and a member firm of the KPMG network of independent member films affiliated with
KPMG International, a Swiss cooperative.
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ShAREhOLDER AND STATuTORY INFORmATION
Details of shareholders, shareholdings and top 20 shareholders
Listed securities – 25 September 2009
Number
of holders
Number
of securities
Percentage held
by top 20
Fully paid ordinary shares
16,583
218,061,199
67.68
Ordinary
shares as at
25.09.09
Percentage of
issued capital
as at 25.09.09
10.81
10.38
9.09
8.04
6.93
5.67
2.51
2.43
1.93
1.37
1.23
1.14
1.08
1.05
1.03
0.77
0.66
0.57
0.54
0.45
Twenty largest shareholders
HSBC Custody Nominees (Australia) Limited
Falls Creek No 2 Pty Ltd
National Nominees Limited
JP Morgan Nominees Australia Limited
Amalgamated Dairies Limited
ANZ Nominees Limited
Citicorp Nominees Pty Limited
Cogent Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited – A/C 3
Challenge Investment Company Limited
Australian Foundation Investment Company Limited
Mr Edgar William Preston + Mr Paul Gerard Keeling
AMP Life Limited
23,581,546
22,630,987
19,824,214
17,536,331
15,112,542
12,374,673
5,467,815
5,306,386
4,211,876
2,984,673
2,675,980
2,493,253
2,345,665
RBC Dexia Investor Services Australia Nominees Pty Limited 2,283,206
RAM Custodian Limited + GBH Trustee Services Ltd
Pacific Custodians Pty Ltd
CPU Share Plans Pty Ltd
Queensland Investment Corporation
UBS Wealth Management Australia Nominees Pty Ltd
Credit Suisse Securities (Europe) Ltd
2,243,750
1,668,332
1,444,468
1,235,461
1,174,188
990,000
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ShAREhOLDER AND STATuTORY INFORmATION CONTINuED
Distribution of shareholders
Size of holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number of
holders as at
25.09.09
Ordinary
shares held
as at 25.09.09
7,112
7,320
1,288
772
91
3,725,228
18,022,190
9,110,903
16,940,707
170,262,171
Of these, 287 shareholders held less than a marketable parcel of shares of $500 worth of shares (45 shares).
In accordance with the ASX Listing Rules, the last sale price of the company’s shares on the ASX on 25 September
2009 was used to determine the number of shares in a marketable parcel.
Stock exchanges on which securities are listed
Ordinary shares: Australian Securities Exchange Limited.
Substantial shareholders
In accordance with section 671B of the Corporations Act, as at 25 September 2009, the substantial shareholders
set out below have notified the company of their respective relevant interest in voting shares in the company
shown adjacent to their respective names as follows:
Number and percentage of shares in which interest held at date of notice
Date of notice
Number
Interest %
Amalgamated Dairies Ltd
Khyber Pass Ltd1
Glade Building Ltd2
Hauraki Trading Ltd3
Oxford Trustees (Paul Gerard Keeling
and Edgar William Preston)4
Douglas John Rathbone
21 May 2009
21 May 2009
21 May 2009
21 May 2009
21 May 2009
21 May 2009
15,111,068
15,129,481
15,491,269
15,847,083
15,509,682
24,162,610
7.04
7.05
7.22
7.39
7.23
11.26
1 Khyber Pass Ltd has a relevant interest in Amalgamated Dairies Ltd and, as a result, the number of shares disclosed by it includes
the shares held by Amalgamated Dairies Ltd.
2 Glade Building Ltd has a relevant interest in Amalgamated Dairies Ltd and, as a result, the number of shares disclosed by it includes
the shares held by Amalgamated Dairies Ltd.
3 Hauraki Trading Ltd has a relevant interest in Amalgamated Dairies Ltd and, as a result, the number of shares disclosed by it includes
the shares held by Amalgamated Dairies Ltd.
4 Oxford Trustees has a relevant interest in Glade Building Ltd, Khyber Pass Ltd and Amalgamated Dairies Ltd and, as a result, the
number of shares disclosed by it includes the shares held by Glade Building Ltd, Khyber Pass Ltd and Amalgamated Dairies Ltd.
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ShAREhOLDER AND STATuTORY INFORmATION CONTINuED
Shareholder information
Annual general meeting
The annual general meeting of Nufarm Limited will be held on Thursday 3 December 2009 at 10.00am in
the Ballroom, Rendezvous Hotel, 328 Flinders Street, Melbourne, Victoria, Australia. Full details are contained
in the notice of meeting sent to all shareholders.
Voting rights
Shareholders are encouraged to attend the annual general meeting. However, when this is not possible, they
are encouraged to use the form of proxy by which they can express their views. Proxy voting can be completed
online via www.nufarm.com/annualgeneralmeeting or via post by completing the proxy form and sending it back
in the return envelope.
Every shareholder, proxy or shareholder’s representative has one vote on a show of hands. In the case of a poll,
each share held by every shareholder, proxy or representative is entitled to one vote for each fully paid share.
Stock exchange listing
Nufarm shares are listed under the symbol NUF on the ASX. The securities of the company are traded on the
ASX under CHESS (Clearing House Electronic Sub-register System), which allows settlement of on-market
transactions without having to reply on paper documentation.
Shareholders seeking more information about CHESS should contact their stockbroker or the ASX.
Shareholder details
The Nufarm Limited Share Register is managed by Computershare Investor Services. you can gain access
to your shareholding information in the following ways.
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ShAREhOLDER AND STATuTORY INFORmATION CONTINuED
Online via Investor Centre
Step 1 Go to www.computershare.com/au/investors
Step 2 Select ‘Holding Enquiry’
Step 3 Enter NUF or Nufarm Limited
Step 4 Enter your Securityholder Reference Number (SRN) or Holder Identification Number (HIN), postcode
or country if outside Australia
Step 5 Enter the security code that appears and agree to the terms and conditions
Step 6 Select ‘Submit’
Alternatively, manage your portfolio by becoming a member of Investor Centre and register for a username
and password at www.computershare.com/au/investors
By telephone via InvestorPhone (Australian shareholders only)
InvestorPhone provides telephone access 24 hours a day seven days a week.
Step 1 Call the Nufarm shareholder information line on 1300 652 479
Step 2 Follow the prompts to gain secure, immediate access to your:
– holding details
– registration details
– payment information
Shareholder communications
you can choose to receive shareholder communications electronically. Register for this initiative at
www.eTree.com.au/nufarm and a donation of $1 will go to Landcare to support urgent reforestation projects
in Australia and New Zealand.
The default for receiving the annual report is now via the company’s website – www.nufarm.com
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ShAREhOLDER AND STATuTORY INFORmATION CONTINuED
Shareholder enquiries
Contact:
Computershare Investor Services
yarra Falls, 452 Johnston Street
Abbotsford Victoria 3067
GPO Box 2975
Melbourne Victoria 3001
Telephone: 1300 652 479 (within Australia)
+61 3 9415 4360 (outside Australia)
Email: web.queries@computerhsare.com.au
Dividends
A final unfranked dividend of 15 cents per share will be paid on 13 November 2009 to shareholders registered
on 16 October 2009.
Australian and New Zealand shareholders may elect to have dividends paid directly into a bank account anywhere
in Australia and New Zealand. Forms for this purpose can be obtained on www.computershare.com.au or by
request from the share registry.
Key dates
16 October 2009
Record date (books closing) for 2008–09 final dividend
13 November 2009
Final dividend for 2008–09 payable
30 October 2009*
Annual report sent to shareholders
3 December 2009
Annual general meeting
30 March 2010*
Announcement of profit result for half year ending 31 January 2010
31 July 2010
End of financial year
* Subject to confirmation.
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ShAREhOLDER AND STATuTORY INFORmATION CONTINuED
For enquiries relating to the operations of the company, please contact the Nufarm Corporate Affairs Office on:
Telephone: (61) 3 9282 1177
Facsimile: (61) 3 9282 1111
Email: robert.reis@au.nufarm.com
Written correspondence should be directed to:
Corporate Affairs Office
Nufarm Limited
PO Box 103
Laverton Victoria 3028 Australia
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DIRECTORY
Directors
Share registrar
KM Hoggard – Chairman
GDW Curlewis – Deputy Chairman
DJ Rathbone AM – Managing Director
Dr RJ Edgar
Dr WB Goodfellow
GA Hounsell
DG McGauchie AO
Dr JW Stocker AO
Company Secretary
R Heath
Solicitors
Arnold Bloch Leibler & Co
333 Collins Street
Melbourne Victoria 3000 Australia
Sylvia Miller & Associates
131 Orrong Road
Elsternwick Victoria 3185 Australia
Auditors
KPMG
147 Collins Street
Melbourne Victoria 3000 Australia
Australia
Computershare Investor Services Pty Ltd
GPO Box 2975EE
Melbourne Victoria 3001 Australia
Telephone: 1300 850 505
Outside Australia: 61 3 9415 4000
Step-up Securities registrar
New Zealand
Computershare Registry Services Limited
Private Bag 92119
Auckland New Zealand 1020
Telephone: 64 9 488 8700
Registered office
103–105 Pipe Road
Laverton North Victoria 3026 Australia
Telephone: 61 3 9282 1000
Facsimile: 61 3 9282 1001
NZ branch office
6 Manu Street
Otahuhu Auckland New Zealand
Telephone: 64 9 270 4157
Facsimile: 64 9 267 8444
Trustee for Nufarm Step-up Securities
website
Permanent Trustee Company Ltd
35 Clarence Street
Sydney NSW 2000 Australia
http://www.nufarm.com
Nufarm Limited
ACN 091 323 312
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Produced by Gillian Sweetland. Designed by MDM Design. Photographers include: Dawn Arts, Danielle Moore, Louis Petrucelli and Melissa Powell.