Nufarm Limited

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Diversity

places, products and people

Annual Report 2013

 
 
 
 
Special thanks to Gillian Sweetland who has 
produced Nufarm’s annual and interim reports 
since 2000. Gillian has been an invaluable 
contributor and a highly valued colleague.

Contents

01  About Nufarm

02  Key events

02  Facts in brief

04  Managing director’s review

11  Business review

16  Health, safety and environment

18  Executive management

20  Board of directors

22 

Information on the company

25  Corporate governance

32  Financial report

33  Directors’ report

47  Lead auditor’s independence declaration

48 

Income statement

49  Statement of comprehensive income

50  Balance sheet

51  Statement of cash flows

52  Statement of changes in equity

54  Notes to the financial statements

117  Directors’ declaration

118 

Independent auditor’s report

120  Shareholder and statutory information

124  Directory

Produced by Gillian Sweetland. Photographers include Lynton Crabb, Danielle Moore and Melissa Powell. Designed by MDM Design.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
About Nufarm

Nufarm is expanding its reach.

»  We have a strong and growing global platform, with sales in more than 

100 countries.

»  We have an expanding range of products that provide solutions and improved 

yield in a broad range of crops and market segments.

»  We have talented and committed people working with our customers and 

partners across all continents.

This expanding reach provides us with more opportunities. It also helps protect 
the business against risks from adverse climatic and market conditions. These 
risks are an inevitable part of the business of agriculture.

Global headquarters

Regional headquarters

Crop protection production

Seeds production

Sales countries

Nufarm Limited Annual Report 2013 | 01

Key events

» Tough Australian conditions affect regional results

» Strong earnings growth in overseas businesses

» Seeds business continues to expand

» Higher working capital and net debt

» Increased dividend payment

Facts in brief

Trading results

Profit attributable to shareholders

Material (gain)/loss

Underlying net profit after tax

Sales revenue

Total equity

Total assets

Ratios

Earnings per ordinary share

Gearing ratio (%)

Net tangible assets per ordinary share ($)

Distribution to shareholders

12 months ended
31 July 2013
$000

12 months ended 
31 July 2012
$000

 80,999 

2,224

83,223

2,277,292

1,664,745

3,371,669

 25.5 

27.6

 3.04 

 72,594 

42,846

115,440

2,181,551

1,476,802

2,801,268

 22.3 

24.1

 2.88 

Annual dividend per ordinary share (cents)

 8.0 

 6.0 

People

Staff employed

 3,458 

 3,401 

The financial information contained within our financial statements has been prepared in accordance with IFRS. Refer to page 7 for definitions of the non-IFRS measures used 
in the annual report. All references to the prior period are to the year ended 31 July 2012 unless otherwise stated. Non-IFRS measures have not been subject to audit or review.

02 | Nufarm Limited Annual Report 2013

Nufarm Limited Annual Report 2013 | 03

Managing director’s review

While underlying profitability in financial year 2013 was down on 
the previous year, our results reinforce the importance of building 
a strong global platform and being diversified across our product 
and market segments.

Underlying earnings before interest and 
tax (EBIT) was $186.8 million, down nine 
per cent on the $206.0 million recorded 
in the 2012 financial year.

Doug Rathbone AM
Managing director and 
chief executive

With hot and dry climatic conditions 
in Australia having a significant impact 
on demand for crop protection products, 
our ’home-base’ results were very 
disappointing. Australia is our largest 
country market and we have secured 
a leadership position in Australia with 
a full service business model, backed by 
extensive investment in manufacturing 
and distribution assets, product 
development activity and a large sales 
team. While we are committed to 
maintaining our leadership position 
in Australia, a high fixed cost base 
weighed heavily on the performance 
of the business when volumes were 
down and margins were lower.

In contrast to the Australian results, 
our performance in other parts of the 
world – and in our expanding seeds 
business – was very strong.

The group generated a statutory 
profit after tax of $81.0 million for 
the 12 months to 31 July 2013. This 
compares to a statutory profit after 
tax of $72.6 million in the previous 
financial year.

Group revenues increased by just 
over four per cent to $2.28 billion 
(2012: $2.18 billion).

Profit/loss attributable to shareholders

9
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9
7

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8

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Higher interest costs and foreign 
exchange losses contributed to a larger 
relative fall in underlying net profit, 
which fell from $115.4 million in 2012 
to $83.2 million in financial year 2013. 
Foreign exchange losses included within 
net financing expenses amounted to 
$10.7 million in financial year 2013, 
contrasting with a foreign exchange 
gain of $8.2 million in 2012. The foreign 
exchange impact on the proceeds of 
Nufarm’s step-up securities (NSS) has 
been included in net foreign exchange 
gains and losses rather than being 
treated as a material item as in the 
previous year (FY12: a net pre-tax 
gain of $11.1 million).

Material items amounted to a net loss 
of $2.2 million, representing the balance 
of the settlement of a class action 
brought against the company in 2011.

Earnings per share were 25.5 cents 
(2012: 22.3 cents). Excluding material 
items, earnings per share were 
26.4 cents (2012: 38.7 cents).

The gross profit margin of 27.4 per cent 
in financial year 2013 was slightly lower 
than the 28.0 per cent recorded in 2012. 
Excluding the Australian business from 
both years, the aggregate gross profit 
margin of other regions improved year 
on year.

Net working capital at 31 July was 
$1.01 billion (constant currency basis: 
$915 million), up on the $771 million 
recorded at 31 July 2012. Net debt 
increased to $633 million (31 July  
2012: $468 million). On a constant 
currency basis, net debt at year end 
was $552 million. Average net debt 
was $753 million, compared to 
$650 million in 2012.

The company will pay a fully franked 
final dividend of five cents per share, 
resulting in a full year dividend of eight 
cents. A full year dividend of six cents 
per share was paid in the previous year.

04 | Nufarm Limited Annual Report 2013

 
Group revenues increased 
by just over four per cent 
to $2.28 billion

Nufarm Limited Annual Report 2013 | 05

Managing director’s review continued

Interest/tax/cash flow
Net external interest costs were 
$50.5 million, up on the $40.9 million 
in the previous year and driven by higher 
average net debt due to higher levels 
of working capital, the funding of 
acquisitions (total consideration 
of $30.7 million) and the payment 
associated with settlement of the class 
action ($46.7 million). Higher interest 
costs also reflected increased funding 
costs associated with the seven year 
senior unsecured notes issued by the 
company in October 2012.

The reported effective tax rate is 
27.6 per cent, which is lower than the 
34 per cent, which applied in the previous 
financial year. Excluding material items, 
the underlying effective tax rate is 
27.7 per cent (2012: 31.7 per cent). 
The effective tax rate has benefitted 
from the reversal of over-provisions 
booked in the previous year.

The business generated net operating 
cash inflows of $62.8 million, compared 
to $166.5 million in the prior period.

Balance sheet management
Net debt at year end was $633 million, 
considerably higher than the $468 million 
recorded on 31 July of the previous year. 
On a constant currency basis, however, 
net debt at balance date was $552 million. 
Average net debt was $753 million, 
compared to $650 million in 2012.

Higher debt levels were the result of 
higher working capital, acquisition-
related activity, and the payment 
of the class action settlement.

Net working capital at 31 July increased 
to $1.01 billion from $771 million at the 
end of the previous year. The higher year 
end working capital was affected by 
excess inventory due to a poor season 
in Australia and a last quarter inventory 
build in Brazil to support strong sales 
activity in the early part of the new 
financial year. There was also an 
adverse translation impact on 
overseas inventory balances.

Average net working capital as a 
proportion of sales was 46.8 per cent, 
representing an increase on the 
corresponding measurement of 
45.3 per cent in 2012.

Gearing (net debt to net debt plus equity) 
was 27.6 per cent (2012: 24.1 per cent).
Capital expenditure (property, plant and 
equipment) in 2013 was $44.3 million, 
slightly lower than the $47.6 million 
expended in 2012. Capital expenditure 
on intellectual property and product 
development was $45.2 million versus 
$29.6 million in the previous year, 
reflecting a higher investment in 
US data compensation payments in 
support of new product introductions.

People and organisation
The talent and commitment of Nufarm 
employees around the world continues 
to be a key driver of the company’s 
success. As the business has expanded 
into new markets and has acquired new 
businesses, we have benefitted from a 
diversity of skills, ideas and cultures.

Over the 2013 reporting period, we 
continued to strengthen the organisation 
and implement changes to management 
structures in some parts of our business. 
These changes will align management 
teams with the specific strategic growth 
strategies that have been implemented 
in certain regions.

On behalf of all shareholders, I express 
my appreciation to our employees for 
their continued efforts.

Outlook
With average seasonal conditions in 
Nufarm’s major markets, the company 
expects to generate an improved 
underlying EBIT result in the 2014 
financial year. 

Despite increased competition, 
the company is forecasting a strong 
improvement in its Australian results, 
given a return to more normal seasonal 
conditions and demand patterns. It 
is anticipated, however, that excess 
inventory in the channel resulting from 
last year’s poor season may place 
pressure on margins in some segments.

Several regulatory-based product 
withdrawals in Europe will result 
in the loss of sales that contributed 
some $4 million in EBIT in financial 
year 2013. Nevertheless Nufarm’s 
European business is well positioned 
to capitalise on growth opportunities, 
driven by a number of new products 
scheduled to be launched, and increased 
market penetration in existing segments. 

06 | Nufarm Limited Annual Report 2013

Managing director’s review continued

The company’s North American business 
is also expecting to generate sales and 
earnings growth in the current year.

Given the strong recent growth in 
Nufarm’s Brazil business, further 
investments will be made to both 
consolidate this growth and build a 
stronger platform to secure additional 
revenue and earnings expansion in 
this fast growing market. Sales activity 
in Brazil has been very strong in the 
initial months of the financial year.

The Asian business is forecast to be 
slightly down, with additional pricing 
pressure anticipated in the glyphosate 
segment. Expansion into new crop 
segments such as rice and vegetables 
is expected to drive growth in Asia over 
the longer term.

The company’s seed technologies 
business is expected to achieve an 
improved result in financial year 2014, 
with expanded penetration in a number 
of geographies and the benefit of 
a number of new varieties and 
downstream products being brought 
to market. There will be an increased 
spend in relation to the long chain 
omega-3 canola project as it continues 
to meet key development milestones.

A strong focus will be maintained 
on balance sheet management, with 
working capital, net debt and cash 
flow metrics expected to improve over 
the course of the year. Interest costs 
are forecast to be in line with the 2013 
financial year with the full year impact 
of interest rates associated with the 
company’s US high yield notes and 
a higher net debt level at the start of 
the year being offset by lower base 
rates in Australia.

IFRS and non-IFRS financial information 

Nufarm results are reported under International Financial Reporting Standards (IFRS) including underlying EBIT and 
underlying EBITDA, which are used to measure segment performance. This release also includes certain non-IFRS 
measures including underlying net profit after tax and gross profit margin. These measures are used internally by 
management to assess the performance of our business, make decisions on the allocation of our resources and 
assess operational management. Non-IFRS measures have not been subject to audit or review. 

The following notes explain the terms used throughout this profit release:

1.  Underlying EBIT is earnings before net finance costs, taxation and material items. Underlying EBITDA is underlying 
EBIT before depreciation and amortisation of $73.986 million for the year ended 31 July 2013 and $61.781 million for 
the year ended 31 July 2012. We believe that underlying EBIT and underlying EBITDA provide useful information, but 
should not be considered as an indication of, or an alternative to, profit/(loss) for the period as an indicator of operating 
performance or as an alternative to cash flow as a measure of liquidity.

2.  Underlying EBIT is used to reflect the underlying performance of Nufarm’s operations. Underlying EBIT is reconciled 

to operating profit below;

Year ended 31 July

Underlying EBIT
Material items
Operating profit

2013
$000

205,973
(61,001)
144,972

2012
$000

186,803
(3,177)
183,626

3. Non-IFRS measures are defined as follows:

  •  underlying net profit after tax – comprises profit/(loss) for the period attributable to the equity holders of Nufarm 

Limited less material items as described on page 2; 

  •  average gross margin – defined as average gross profit as a percentage of revenue; 

  •  average gross profit – defined as revenue less a standardised estimate of production costs excluding material 

items and non-product specific rebates and other pricing adjustments; 

  •  net external interest expense – comprises interest income – external, interest expense – external and lease 
expense – finance charges as described in note 10 to the 31 July 2013 Nufarm Limited financial report; and

  •  constant currency – reconciled in the table below – whereby ’(a)’ represents the impact from the fluctuation in 

exchange rates between all foreign currency denominated amounts and the Australian dollar. Constant currency 
results exclude any benefit or loss caused by foreign exchange fluctuations between foreign currencies and the 
Australian dollar, which would not have occurred if there had been a constant exchange rate.

Year ended 31 July

FY 2012 as reported

Foreign currency translation impact (a)
Constant currency adjusted

FY 2013 as reported

Net working capital 
$000

770,759 

144,686
915,445

1,011,004 

Net debt 
$000

467,804

84,575 
552,379

633,113

The longer term outlook shows strong 
revenue and earnings growth as the 
company continues to execute on its 
strategic growth plans. Those plans 
involve further diversification and 
expansion into overseas markets 
and accelerated growth into higher 
value and more defendable product 
and market segments.

Doug Rathbone AM
Managing director and 
chief executive

25 September 2013

Nufarm Limited Annual Report 2013 | 07

Managing director’s review continued

Underlying net profit after tax

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Underlying EBITDA

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Gearing ratio

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08 | Nufarm Limited Annual Report 2013

Group sales

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Return on funds employed

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Earnings per share

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Nufarm Limited Annual Report 2013 | 09

Australia is Nufarm’s largest 
country market and represents a 
substantial fixed cost investment

10 | Nufarm Limited Annual Report 2013

Business review

The 2013 financial year was characterised by very challenging 
seasonal conditions and a poor result in Australia, with positive 
earnings growth in all other regions, as well as the company’s 
seed technologies business.

The results underline the importance of 
a geographically diverse business, where 
adverse climatic and business conditions 
in certain markets can be offset with 
exposure to more positive conditions 
and growth opportunities in other 
geographies.

Good progress was achieved on the 
development and implementation 
of regional strategies, with a clearer 
focus on supporting growth in certain 
product and market segments.

Nufarm’s crop protection business 
accounted for 94 per cent of group 
revenues and grew sales by just over 
four per cent to $2.15 billion. These sales 
generated an average gross margin 
of 26 per cent, slightly lower than the 
27 per cent gross margin recorded in 
2012 and reflecting higher sales of lower 
value products in some markets and 
margin pressure associated with the 
weaker market conditions in Australia.

The seed technologies segment generated 
revenues of $132 million, up nine per cent 
on the previous year and contributing 
a higher average gross margin of 
55 per cent (2012: 53 per cent).

Corporate (head office) costs were 
slightly lower in 2013 at $40.6 million, 
compared to $41.4 million in 2012. 
Total expenses were up by just under 
10 per cent on the previous year, 
reflecting higher depreciation and 
amortisation costs, increased head 
count – particularly in the South 
American and seeds businesses – 
and higher selling and distribution 
costs. Underlying selling, general 
and administrative (SG&A) expenses 
to sales were 18.2 per cent compared 
to 17.3 per cent in the previous year.

Operating segments summary 
The table on the right provides a summary 
of the performance of the operating 
segments for the 2013 financial year 
and the prior corresponding period.

Australia/New Zealand
The Australian and New Zealand 
businesses generated sales of 
$604.4 million, 14 per cent down on 
segment sales in the previous year 
($701.0 million). This represented 
28 per cent of total crop protection 
revenues (2012: 34 per cent). Underlying 
EBIT was well down on the previous year 
at $35.4 million (2012: $106.0 million), 
reflecting very difficult conditions in the 
Australian market.

Unusually dry weather conditions 
persisted in most Australian cropping 
regions from early in the financial year 
until the last quarter of the financial 
period. These conditions resulted in 
the need for very little summer weed 
control and exceptionally low levels of 
insect and fungal disease pressure. 
Sales of relatively higher value products 
into summer crops were significantly 
down on normal levels. It remained 
dry through the pre-plant period ahead 
of the major winter crop, resulting in 
low levels of demand for fallow and 
pre-emergent herbicide applications. 
While rains in May and June helped drive 
demand for post-emergent herbicides, 
lost opportunities over the balance of 
the year had a very negative impact 
on the business.

Year ended 31 July

Revenue

2012

2013

($000s)
Crop protection
Australia and 
 701,022 
New Zealand
 125,586 
Asia
 431,095 
Europe
 470,243 
North America
South America
 332,636 
Total crop protection  2,145,604   2,060,582 
Seed technologies 
– global
Corporate
Nufarm group

 120,969 
 – 
 2,277,292   2,181,551 

 604,432 
 125,201 
 468,253 
 516,278 
 431,440 

 131,688 
 – 

Crop protection sales in Australia were 
down some 17 per cent on the previous 
year and with additional competition 
for fewer sales opportunities, margins 
also were affected negatively. Lower 
production volumes also affected 
the efficiency of the Australian 
manufacturing plants.

Australia is Nufarm’s largest country 
market and represents a substantial 
fixed cost investment, which supports 
our clear market leadership position. 
While a return to more normal seasonal 
conditions is expected to see a strong 
earnings recovery in Australia, an 
extensive review of the business has 
been undertaken to identify areas for 
improvement.

Substantial work was also completed 
to prepare the Australian business for 
changes to distribution arrangements 
involving the BASF portfolio (which cease 
in March 2014) and a transition to new 
branding for the company’s glyphosate 
portfolio (effective August 2013).

The New Zealand business generated 
slightly higher sales, despite dry 
summer and autumn conditions, which 
reduced demand for herbicides. Insect 
pressure was above average. The 
manufacturing division, which produces 
insecticide and fungicide products for 
Nufarm businesses in other parts of 
the world, performed strongly.

Change 
(%)

2013

Underlying EBIT
Change 
(%)

2012

 35,352 
-13.8
 19,580 
-0.3
 57,245 
8.6
 42,153 
9.8
 40,595 
29.7
4.1  194,925 

 105,982 
 16,735 
 43,223 
 33,327 
 17,526 
 216,793 

 32,449 
8.9
N/A  (40,571)
4.4  186,803 

 30,589 
 (41,409)
 205,973 

-66.6
17.0
32.4
26.5
131.6
-10.1

6.1
-2.0
-9.3

Nufarm Limited Annual Report 2013 | 11

Business review continued

Asia
Asian crop protection sales were 
$125.2 million, in line with the previous 
year ($125.6 million) and again 
representing six per cent of total 
crop protection revenues. Underlying 
EBIT was $19.6 million, up from 
$16.7 million in 2012.

The business performed solidly despite 
lower demand for crop protection 
products in the plantation segment 
due to a lower palm oil commodity 
price. This is a major segment for 
Nufarm in Indonesia and Malaysia.

Nufarm opened a new office in South 
Korea to support increased sales into 
that market and launched several 
products that will help secure growth 
in target crop segments including rice 
and vegetables.

North America
North American crop protection sales 
increased by 10 per cent to $516.3 million. 
Measured in local currency, the increase 
in US sales was approximately two per 
cent, with Canadian sales up 26 per 
cent on the previous year. The region 
generated 24 per cent of total crop 
protection revenues (2012: 23 per cent).

Underlying EBIT was up by more than 
26 per cent, increasing to $42.2 million 
(2012: $33.3 million).

A late winter in the US reduced 
opportunities in the burndown (pre-plant) 
segment, with the large soy and corn 
crops being planted later than usual and 
over a more concentrated period. Cotton 
plantings were down resulting in lower 

demand for Nufarm’s portfolio of plant 
growth regulators in that segment. Sales 
of phenoxy herbicides were strong and 
the US agriculture business was able 
to increase total sales despite 
some challenging market conditions.

The business also performed strongly 
in the industrial vegetative management 
segment with both increased sales 
and stronger margins. The company 
completed the acquisition of Cleary 
Chemical Corporation midway through 
the period, which has strengthened 
Nufarm’s fungicide and insecticide 
portfolio in the high value turf and 
ornamental market, reinforcing 
Nufarm’s top three position in 
that segment.

A new manufacturing facility was 
commissioned at Alsip (Chicago), 
specialising in the formulation of 
insecticides, fungicides and custom 
seed treatment applications.

The strong Canadian result was 
supported by growth in the western 
cereals and pulse markets and increased 
sales into the horticulture segment. 
Several new products launched during 
the year had outstanding success.

South America
South American crop protection sales 
increased by almost 30 per cent to 
$431.4 million (2012: $332.6 million). 
Underlying EBIT was $40.6 million, 
a substantial improvement on the 
previous year ($17.5 million). Regional 
sales comprised 20 per cent of total 
crop protection revenues, up from 
16 per cent in the previous period.

Seasonal conditions in Brazil and 
Argentina were generally average, 
albeit some dry weather affected sales 
in the important pasture segment in 
Brazil. Dry weather in Colombia and 
Chile also had an impact on demand 
in the last quarter of the year.

Market conditions in Brazil were 
favourable, with increased plantings 
and an expansion in the use of crop 
protection inputs. In local currency, 
sales in Brazil were R$686 million, 
up almost 41 per cent on the previous 
year. Brazilian EBIT more than doubled, 
in local currency, to R$67.8 million, 
from R$29.8 million in 2012.

Nufarm strengthened its position in each 
of its target segments and continued to 
diversify its product offering with several 
new product introductions during 
the year. A new high load glyphosate 
formulation, ’Crucial’, was very 
successful, resulting in both increased 
volumes and margins in the glyphosate 
segment. An expansion of the sales force 
provided reach into additional regions.

The business in Argentina also performed 
very strongly, with sales up by some 
34 per cent in local currency and a 
significant improvement in profitability, 
driven by higher sales of differentiated 
products at improved margins.

Europe
European sales were up by more 
than eight per cent to $468.3 million 
(2012: $431.1 million). This represented 
22 per cent of total crop protection 
revenues (2012: 21 per cent). Underlying 
EBIT improved strongly to $57.2 million 
from $43.2 million in the previous year.

12 | Nufarm Limited Annual Report 2013

Business review continued

Seasonal conditions in Europe were 
mixed, with a relatively cold and wet 
autumn and a long winter having a 
negative impact on selling opportunities 
in a number of markets. The UK 
experienced difficult climatic conditions, 
with total industry sales estimated to be 
down by up to 20 per cent in that market.

Fungicide demand was strong in some 
markets and Nufarm’s more diversified 
portfolio enabled the company to take 
advantage of those conditions. Growth in 
Europe was also driven by the successful 
introduction of new products and strong 
sales of phenoxy herbicides.

Nufarm’s business in central/eastern 
Europe grew strongly. Sales in Germany, 
Spain and Portugal were also higher 
than in the previous year.

The company strengthened its position 
in the non-crop home and garden 
market in France, despite unhelpful 
climatic conditions during the high 
demand season. Nufarm is now the 
market leader in this segment and has 
expanded both its product range and 
distribution network.

The European manufacturing units 
performed very strongly, with increased 
volumes of phenoxy herbicides produced 
to meet strong demand in global 
markets. Overhead recoveries in 
these manufacturing facilities made 
an important contribution to the 
regional result.

The European management structure 
was changed during the year, with the 
appointment of a single head of Europe 
in place of the previous multi-regional 
structure. This is resulting in additional 
focus and efficiencies across the 
business.

Major product segments
Crop protection
Nufarm’s crop protection business 
accounted for 94 per cent of group 
revenues and grew sales by four per cent 
to $2.15 billion. These sales generated 
an average gross margin of 26 per cent 
(2012: 27 per cent).

Herbicide sales were $1.48 billion, 
slightly up on the previous year, with 
the average gross margin down slightly 
at 25 per cent. Very dry conditions and 
lower demand in both Australia and 
in the pasture segment in Brazil, 
where Nufarm has a substantial 
position, affected both volumes 
and pricing in those markets.

While glyphosate volumes were in line 
with the previous year, sales were higher 
and represented 26 per cent of total 
crop protection revenues. This reflected 
higher input costs and higher selling 
prices for glyphosate products. Margins 
improved slightly, driven by the 
successful launch of a differentiated 
formulation in Brazil. Phenoxy herbicide 
sales were down with demand in key 
markets adversely affected by seasonal 
factors. Sales of several other herbicides 
increased, including dicamba and 
bromoxynil.

Nufarm’s insecticide portfolio generated 
a 17 per cent increase in sales to 
$215 million, but a lower value product 
mix saw margins decline in comparison 
to the 2012 financial period (32 per cent 
versus 35 per cent). Insect pressure in 
Brazil’s major crops generated strong 
demand for chlorpyrifos and Nufarm’s 
sales of this chemistry were nearly 
double that of the previous year. 
Increased competition in the 
imidacloprid segment resulted in 
pricing pressure in some markets 
and new regulatory restrictions in 
some crop segments in Europe also 
affected sales, which were down 
compared to the prior year. Some higher 
value insecticide products were not 
required in Australia due to unusually 
low insect pressure in summer crops.

Fungicide sales were up slightly to 
$219 million, with average margins in 
line with the previous year. New product 
launches and relatively high disease 
incidence at times of the year in Brazil 
and Europe helped offset the very dry 
conditions and subsequent low demand 
for fungicide products, in Australia.

While sales of plant growth regulators 
(PGRs) were in line with the previous 
year, margins improved. Demand in the 
cotton segment was down but Nufarm’s 
expanded portfolio in the cereals market 
in Europe and additional sales of 
PGRs in distribution arrangements 
with Sumitomo Chemical helped drive 
an improved performance.

Nufarm Limited Annual Report 2013 | 13

Business review continued

Seed technologies
The company’s seed technologies 
business, which includes the global 
Nuseed business and Nufarm’s seed 
treatment applications, grew sales by 
nine per cent to $131.7 million and 
generated an average gross margin 
of 55 per cent, which was an 
improvement on the previous year 
(53 per cent). Underlying EBIT was 
up six per cent to $32.4 million.

Seed technologies markets faced below 
average conditions, with extreme drought 
in the lead-up to canola, sunflower 
and seed treatment selling periods 
in Australia and a very wet and cold 
spring affecting planting conditions in 
the USA sunflower segment and the 
soybean seed treatment market. These 
challenges were offset by another record 
sorghum year within most markets and 
contributions from recent acquisitions.
A hot, dry summer in Australia resulted 
in limited subsoil moisture and reduced 
canola plantings. Growers in marginal 
areas elected to plant retained open 
pollinated seed rather than purchase 
Nuseed hybrid and elite varieties.

Nuseed successfully launched its 
‘Wholis’ gluten free premium food grade 
sorghum product and announced an 
important downstream partnership with 
ADM, one of the world’s largest food 
processing companies. Important 
technical milestones were also achieved 
on Nuseed’s omega-3 DHA project 
in partnership with CSIRO and the 
Australian Grains Research and 
Development Corporation (GRDC). 
This project – which aims to express 
DHA rich canola oil – now enters 
significant development and regulatory 
phases, with a commensurate increase 
in funding support from Nufarm.

The 2013 financial year saw increased 
investment in Nuseed’s global platform 
to help position the business for future 
strong growth. This included the 
establishment of stronger European 
breeding and product development 
capabilities and the recruitment of 
additional management, research 
and development and finance resources.
Nuseed completed the acquisition 
of 51 per cent of the Atlantica seeds 

business in Brazil at a cost of 
R$25 million in January 2013. This 
acquisition allows Nuseed to supply its 
sorghum and sunflower seeds through 
the Atlantica distribution network and 
leverage other development programs 
in Australia, Argentina and the USA.

Seed treatment sales were slightly 
down on the previous year. This reflected 
adverse climatic conditions in some 
markets, particularly Australia and the 
USA. Some applications, involving 
neonicotinoid chemistry, were withdrawn 
in Europe due to regulatory authority 
concerns about impacts on bees. These 
restrictions also affected the company’s 
seed treatment sales.

Several new products were launched, 
positioning the business for growth 
with a return to more normal seasonal 
demand. The company’s new Alsip 
(Chicago) seed treatment facility was 
commissioned and has helped secure 
new business from US customers.

Sales revenue by region 2013
Total business

Sales by product segment 2013
Crop protection segment

Sales by product segment 2013
Seed technologies

  Australia/New Zealand 

  North America 

  South America 

  Europe 

  Asia 

$2,277.3 million

28%

25%

20%

21%

6%

  Herbicides 

  Fungicides 

  Insecticides 

  Other*  

69%

10%

10%

11%

  Seed 

  Seed treatment 

$131.7 million

69%

31%

$2,145.6 million

* Other includes machinery, adjuvants,
  PGRs and industrial.

14 | Nufarm Limited Annual Report 2013

Nufarm Limited Annual Report 2013 | 15

Health, safety and environment

As a company engaged in the development, production and supply of inputs to agriculture, Nufarm 
works in an industry where sustainability principles are entrenched. Farmers – and other users of 
our products – have followed and refined sustainable practices for many years and know that these 
principles are all-important in maintaining the productive capacity of their land.

Nufarm’s commitment to these same 
principles is very strong – sustainability 
is a cornerstone of the way we do 
business, so we are moving to more 
comprehensive reporting of our 
efforts and performance across key 
sustainability measures and activity. 
Part of that progress is to communicate 
our initiatives across a broader range of 
stakeholder engagement indicators and 
the company’s first sustainability report 
may be downloaded from our website, 
together with 17 individual site reports.

Notwithstanding that broader view, 
our performance against various health, 
safety and environmental parameters 
remains critically important. In the 
2012 calendar year we improved our 
performance in certain measures of 
safety but did not meet our objectives for 
continuous improvement in other areas.

The health and safety data includes 
permanent and casual employees and 
contractors with data collected from 
manufacturing sites, offices and regional 
service centres. As yet, it does not 
include data from eight offices 
in Asia and South America.

Overall, our 2012 health and safety 
performance improved from 2011 
but we failed to meet the target limits 
set by the board for 2012, which were:

•  LTIFR <1.16;

•  MTIFR : <2.31; and

•  severity: <0.014.

The improvements in 2012 over 2011 were:

•  LTIFR 27 per cent; 

•  MTIFR 40 per cent; and

•  severity rate 46 per cent.

LTIFR 2007–2012

Severity 2007–2012

4.0

3.5

3.0

2.5

2.0

1.5

1.0

8

7

6

5

4

3

2

0.06

0.05

0.04

0.03

0.03

0.02

0.01

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

Target

Actual

Target

Actual

MTIFR 2007–2012

Unusual incident report/injury report 
versus LTIFR 2007–2012

14

12

10

8

6

4

2

0

2
0
0
2

4
0
0
2

6
0
0
2

8
0
0
2

0
1
0
2

2
1
0
2

14

12

10

8

6

4

2

0

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

Target

Actual

LTIFR

UIR/IR ratio

16 | Nufarm Limited Annual Report 2013

Health, safety and environment continued

The data on our environmental 
management and performance is 
collected from our manufacturing 
plants, all of which have environmental 
management systems in place in varying 
degrees of complexity and development. 
Each country where we operate has 
different regulatory requirements 
and Nufarm has established specific 
environmental management systems 
to ensure compliance.

During 2012, due to an increase in 
production and changes in product 
mix at some sites, total greenhouse 
emissions increased while emissions 
per tonne of product remained 

consistent. The majority of greenhouse 
gas is generated from electricity and 
gas used in the production process 
with the Laverton, Australia plant 
being the largest emitter, followed 
by Wyke in the UK.

Water is an essential component of 
most of our production processes and, 
again, production volumes and the 
product mix affect the amount of water 
used and the waste water generated.

Nufarm remains vigilant in its 
commitment to strive for further 
improvement and better outcomes.

LTIFR or lost time injury frequency rate 
is the number of lost time injuries per 
million hours worked that result in one 
or more day’s absence from work.

MTIFR or medical treatment injury 
frequency rate is the number of lost 
time injuries plus those that did 
not result in lost time but required 
treatment by a qualified medical 
practitioner per million hours worked.

Severity is the number of days lost due 
to injuries per thousand hours worked.

2.5

2.0

1.5

t
c
u
d
o
r
p
s
e
n
n
o
t
/
r
e
t
a
w
s
e
n
n
o
t

160

130

s
e
n
n
o
t
0
0
0
‘

100

Water efficiency 2007–2012

Production volume 2007–2012

500

s
e
n
n
o
t
0
0
0
‘

400

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

CO2 released from energy use
and processes 2007–2012

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

Nufarm Limited Annual Report 2013 | 17

 
 
 
 
Elbert Prado
Group executive manufacturing 
(from 1 August 2013)
Elbert Prado, a chemical engineer, 
joined Nufarm on 1 July 2013 after 
extensive international experience 
in senior operations roles within the 
chemical industry. He has a very 
strong skills set in crop protection 
manufacturing and related areas, 
particularly safety. He was global 
manufacturing and supply chain 
director for the Rohm and Haas 
process chemicals and biocides 
business, with responsibility for 
11 manufacturing sites in Europe, 
Asia and the Americas and global 
supply chain.

David Pullan
Group executive operations 
(retired 31 July 2013)
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 was 
responsible for all of Nufarm’s global 
manufacturing and production sites.

Robert Reis
Group executive corporate 
strategy and external affairs
A former journalist, political adviser 
and lobbyist, Robert joined Nufarm in 
1991. Robert has executive management 
responsibility for corporate strategy 
and is responsible for global issues 
management, investor relations, media, 
government and stakeholder relations.

Executive management

Doug Rathbone AM
Managing director and 
chief executive
Doug Rathbone’s background is 
chemical engineering and commerce 
and he has worked for Nufarm Australia 
Ltd for 40 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 also served as a 
non-executive director on the board of 
CSIRO (2007–2010).

Brian Benson
Group executive 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.

Paul Binfield
Chief financial officer
Paul Binfield joined Nufarm in 
November 2011. He has held senior 
strategic financial roles at Coles 
Liquor and Hotels, a major division of 
Wesfarmers Ltd, and at Mayne Group. 
Paul has extensive experience in publicly 
listed and private company finance 
functions, both in Australia and the UK.

Bonita Croft
Group executive human resources 
and organisation development
Bonita joined Nufarm in December 
2010 in a newly created role responsible 
for people and organisation structure. 
She is a very experienced professional 
who has had previous human resources 
executive roles in large companies with 
international operations, including 
Brambles.

Rodney Heath
Group executive 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 

18 | Nufarm Limited Annual Report 2013

from New Zealand to Australia to 
become company secretary of Nufarm 
Australia Ltd. In 2000, Rod was appointed 
company secretary of Nufarm Ltd.

Greg Hunt
Group executive global marketing 
and business development
Greg joined Nufarm in February 2012. 
He has had considerable executive 
and agribusiness experience with a 
successful career at Elders Australia 
Limited where he held a number of 
management positions focused on 
both the Australian and international 
operations of Elders. Greg was 
appointed chief executive officer of 
Elders in 2001, a position he held 
until 2007, leading the company’s 
operations across a broad range of 
activity, including rural merchandising 
and product distribution. After leaving 
Elders, Greg worked with a number of 
organisations in business development 
and agribusiness related advisory roles. 
He is a director of Tandou Limited.

Dale Mellody
Group executive global supply 
chain and strategic procurement
Dale Mellody joined Nufarm as a 
territory manager in 1995, having 
completed his bachelor of agricultural 
science. Promoted to the senior 
management group in July 2005, he 
has had various global roles including 
group executive global marketing, 
general manager NAFTA and has 
assisted with a number of company 
acquisitions. Dale is now responsible 
for global supply chain and strategic 
procurement.

Mike Pointon
Group executive 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.

Executive management continued

Doug Rathbone AM

Bonita Croft

Dale Mellody

David Pullan

Brian Benson

Rodney Heath

Mike Pointon

Robert Reis

Paul Binfield

Greg Hunt

Elbert Prado

Nufarm Limited Annual Report 2013 | 19

Board of directors

Doug Rathbone AM
Managing director and 
chief executive

Doug Rathbone AM, 67, 
joined the board in 1987. 

His background is chemical 
engineering and commerce 
and he has worked for 
Nufarm Australia Limited 
for 40 years. Doug was 
appointed managing 
director of Nufarm Australia 
in 1982 and managing 
director of Nufarm 
Limited in October 1999.

He was appointed to the 
board of the CSIRO in 2007 
and retired from that board 
in September 2010.

Doug has been named as 
one of Australia’s top 100 
most influential engineers 
by Engineers Australia. The 
list includes 12 chemical 
engineers, five of whom are 
IChemE Fellows, of which 
Doug is one.

Donald McGauchie AO
(Chairman)

Donald McGauchie AO, 63, 
joined the board in 2003 and 
was appointed chairman 
on 13 July 2010. 

He has wide commercial 
experience within the 
agricultural, 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 a former 
member of the board of the 
Reserve Bank of Australia.

Donald is chairman of 
Australian Agricultural 
Company Limited and 
a director of James 
Hardie Industries plc 
and Graincorp Ltd.

Donald is chairman of the 
nomination and governance 
committee and a member 
of the human resources 
committee.

Anne Brennan

Gordon Davis

Anne Brennan, 53, joined the 
board on 10 February 2011.

Gordon Davis, 57, joined 
the board on 31 May 2011.

He has a bachelor of forest 
science (hons), master of 
agricultural science and 
holds a master of business 
administration.

Gordon was managing 
director of AWB Limited 
between 2006 and 2010. 
Prior to this, he held various 
senior executive positions 
with Orica Limited, including 
general manager of Orica 
Mining Services (Australia, 
Asia) and general manager of 
Incitec Fertilizers. He has also 
served in a senior capacity on 
various industry associations.

Gordon is chairman of 
the health, safety and 
environment committee 
and a member of the audit 
committee and the human 
resources committee.

She has a bachelor of 
commerce (hons) from 
University College Galway 
and is a fellow of the Institute 
of Chartered Accountants 
in Australia and a fellow 
of the Australian Institute 
of Company Directors.

She was formerly the 
executive finance director 
for the Coates Group and 
chief financial officer for 
CSR. Prior to this Anne was 
a partner in professional 
services firms Ernst & Young, 
Andersen and KPMG.

Anne is deputy chairperson 
of Echo Entertainment Group 
Limited and a director of 
Myer Limited, Charter Hall 
Group and Argo Investments 
Limited. She is also a director 
of Rabobank Australia Limited 
and Rabobank New Zealand 
Limited. In the past three 
years, Anne was a director 
of Cuscal Limited.

Anne is a member of the audit 
committee and health, safety 
and environment committee.

20 | Nufarm Limited Annual Report 2013

Board of directors continued

Frank Ford

Bruce Goodfellow

Peter Margin

Toshikazu Takasaki

Frank Ford, 67, joined the 
board on 10 October 2012.

He has a master of taxation 
from the University of 
Melbourne and a bachelor 
of business, accounting from 
RMIT University and is a fellow 
of the Institute of Chartered 
Accountants. Frank is a 
former managing partner of 
Deloitte Victoria after a long 
and successful career as a 
professional advisor spanning 
some 35 years. During that 
period, he was also a member 
of the Deloitte global board, 
global governance committee 
and national management 
committee.

He is a director of Toll 
Holdings Limited, Citigroup 
Pty Limited, Tarrawarra 
Museum of Art Limited and a 
former non-executive director 
of Manassen Foods Group.

Frank is the chairman of 
the audit committee and a 
member of the nomination 
and governance committee.

Bruce Goodfellow, 61, 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.

Dr Goodfellow is a director 
of Sanford Ltd, a public 
company registered in 
New Zealand and listed on 
NZX Limited, chairman of 
Refrigeration Engineering 
Co. Ltd and a director of 
Sulkem Co. Ltd and 
Cambridge Clothing Co. 
Ltd, all privately owned 
companies.

Bruce is a member of the 
nomination and governance 
committee.

Peter Margin, 53, joined the 
board on 3 October 2011.

Toshikazu Takasaki, 66, 
joined the board in 2012

Mr Takasaki represents 
the interests of 23 per cent 
shareholder Sumitomo 
Chemical Company (SCC).

He is a former executive 
of SCC who held senior 
management positions in 
businesses relating to crop 
protection, both within Japan 
and in the US. He is now 
a business consultant.

He brings broad industry 
and international experience 
to the board. 

He has a bachelor of science 
(hons) from the University 
of NSW and holds a master 
of business administration 
from Monash University.

Peter has many years of 
leadership experience 
in major Australian and 
international food companies. 
His most recent role was as 
chief executive of Goodman 
Fielder Ltd and, before that 
Peter was chief executive 
and chief operating officer 
of National Foods Ltd. He has 
also held senior management 
roles in Simplot Australia Pty 
Ltd, Pacific Brands Limited 
(formerly known as Pacific 
Dunlop Limited), East Asiatic 
Company and HJ Heinz 
Company Australia Limited.

Peter is currently a director 
of Bega Cheese Ltd, PMP 
Limited and Ricegrowers 
Limited. Over the past 
three years Peter has been 
a director of Goodman 
Fielder Ltd.

Peter is chairman of the 
human resources committee 
and a member of the health, 
safety and environment 
committee.

Nufarm Limited Annual Report 2013 | 21

Information on the company

Our business
Nufarm is a leading global crop 
protection company and has operated 
in the industry for almost 60 years. We 
develop, manufacture and sell a wide 
range of crop protection products, 
including herbicides, insecticides and 
fungicides that help protect crops 
against damage caused by weeds, pests 
and disease. We operate primarily in the 
off-patent segment of the crop protection 
market, which consists of products using 
technical active ingredients for which 
the patent has expired. Our focus is on 
creating products that use off-patent 
active ingredients within a differentiated 
formulation, delivery system or other 
enhancements that provide additional 
benefits to crop producers. We also 
have a proprietary seed technologies 
business with a portfolio covering canola, 
sorghum and sunflower crops and we 
are developing a global presence in 
the fast growing and high value seed 
treatment segment.

We have crop protection manufacturing 
and/or seeds facilities in 16 countries 
and marketing operations in more than 
30 countries. We distribute our products 
in more than 100 countries across 
Australia and New Zealand, Asia, North 
America, South America and Europe.

Our competitive strengths 
We believe our leading position in the 
crop protection industry is based on 
a combination of innovative product 
development, comprehensive product 
registration expertise and an integrated 
global manufacturing, marketing and 
distribution platform, which combine 
to create a resilient business with 
defendable market positions.

Leading positions in targeted markets 
and segments across a range of 
geographies: we have a diversified 
global business with an established 
presence in major cropping regions 
throughout the world, including 
Australia, New Zealand, Asia, North 
America, South America and Europe.

Diversified business across geographies 
and by products: our geographic and 
product diversification mitigates our 
exposure to adverse weather conditions 
or commercial pressures in any single 
cropping region or for any single type 
of crop or chemistry. We offer a wide 

22 | Nufarm Limited Annual Report 2013

range of products across all crop 
protection segments, including 
herbicides, fungicides and insecticides, 
as well as a range of seeds and seed 
treatment products. Our diverse portfolio 
contains products designed to be used 
at various stages of the cropping cycle, 
from pre-planting to pre-harvest.

Differentiated product portfolio with 
proven expertise in bringing new 
products to market: we have significant 
product development expertise, which 
enables us to create a portfolio of 
value-added off-patent products sold 
under a variety of reputable brand 
names. We believe this expertise, along 
with our ability to respond quickly to 
evolving customer needs with new, 
differentiated products represents 
one of our key competitive strengths.

Global manufacturing, marketing and 
distribution platform: our ability to 
deliver sufficient quantities of crop 
protection products to end users with 
short lead time is critical, particularly 
given the seasonal nature of cropping. 
We have established a global platform 
across Australia, New Zealand, Asia, 
North America, South America and 
Europe that enables us to service our 
existing customer base and support 
the continued growth of our business.

Established strategic alliance and 
commercial relationships with major 
crop protection companies: we have a 
history of successful collaborations with 
other major crop protection companies 
that provides opportunities for expansion 
into new products and geographic 
markets. Our strategic alliance with 
Sumitomo Chemical, which includes 
distribution agreements in a number 
of geographic markets, and our other 
commercial relationships encompass 
a range of research and development, 
manufacturing, supply and distribution 
agreements.

Highly experienced management 
team supported by strong board of 
directors: we have a highly experienced 
management team with extensive 
chemical engineering, scientific and 
industry experience, the majority of 
whom have worked for us for at least 
a decade. Our board combines a mix 
of long-serving directors and more 
recent appointees with industry, 
financial, accounting, management 
and governance expertise.

Our strategies
Our goal is to leverage our strong 
product development, manufacturing 
and distribution platform as well as our 
established market positions to be a 
leading global provider of innovative, 
off-patent crop protection products, 
seeds and seed traits. We aim to achieve 
this through the following strategies: 

•  leverage our product development 
and regulatory skills to generate 
accelerated growth in higher value 
products and market segments: we 
believe we have substantial potential 
to expand our business and grow our 
market share in many of our markets. 
We intend to continue growing our 
sales and optimising our product mix 
through new product development and 
commercial partnering, which will be 
focused on developing value-added 
off-patent products that generate 
higher margins. As part of this 
strategy, we intend to continue to 
grow our Nuseed business, which 
is one of our fastest growing and 
highest margin businesses; 

•  optimise route to market strategies: 
we constantly evaluate our route to 
market strategies, which are designed 
to ensure the delivery of the right 
product to the right market anywhere 
in our global operations. Our global 
manufacturing, formulation and 
logistics capabilities complemented 
by our network of distribution 
relationships are key to implementing 
this strategy; 

•  use strategic alliances and other 
commercial arrangements with 
industry leaders to maximise the 
value of our platform: we have an 
important strategic alliance with 
Sumitomo Chemical as well as a 
range of business relationships 
with other major companies in 
the sector, ranging from supply 
agreements, licensing arrangements, 
toll manufacturing and distribution 
arrangements. We believe these 
arrangements provide opportunities 
to maximise the value of our product 
development, manufacturing and 
distribution platforms as well as 
increasing our customer base by 
providing access to additional 
products or new markets or creating 
supply chain efficiencies; and

Information on the company continued

•  continue to maximise free cash flow 
and strengthen our balance sheet: 
we are focused on maximising our 
free cash flow through our continued 
disciplined approach to financial 
management. In particular, we are 
focused on further improving our 
working capital management as it 
relates to procurement as well as 
management of inventory and 
receivables. 

Our risks
Due to the scope of our operations and 
the industry in which we are engaged, 
there are numerous factors that may 
have an effect on our results and 
operations. The following describes the 
material risks that could affect Nufarm.

External risks
Weather conditions may significantly 
affect our results of operations and 
financial condition.

Fluctuations in commodity prices, 
foreign currency exchange rates and in 
currency values could have a material 
adverse effect on our results of operation 
and financial condition.

We are subject to extensive regulation 
and stringent environmental, health 
and safety laws that may adversely affect 
our operational and financial position.

Business, operational and financial risks
We sell our products in competitive 
markets, and the success of our 
competitive strategy depends on 
developing new products and retaining 
customers and distributors.

Our collaboration relationships with 
other major crop protection companies 
may change or be terminated.

We may not be able to obtain funding 
on acceptable terms, or at all, due to 
a deterioration of the credit and capital 
markets. This may hinder or prevent 
us from meeting our future capital 
needs and from refinancing our existing 
indebtedness.

We are dependent on effective 
procurement strategies and on the 
continuing efficient operation of our 
manufacturing plants to be able to deliver 
cost competitive products to market.

We may become involved in future 
legal proceedings, which may result 
in substantial expense and may divert 
our attention from our business.

Management of principal risks
Our approach to managing key 
risks is outlined below.

Principal risk area

Risk management approach

External risks
Risks arise from variable weather conditions, fluctuations 
in commodity prices and currency rates, actions by 
governments or regulators.

Business, operational and financial risks
Risks arise from a competitive marketplace, identifying 
and developing innovative solutions, legal proceedings, 
accessing and sourcing capital from financial markets, 
management of manufacturing facilities and supply chain. 
In addition, relationships with commercial counterparties 
we transact with may change.

The diversification of our portfolio of products, geographies and 
currencies is a key strategy for reducing volatility. The managing 
director’s review and business review describe external factors 
and trends affecting our results and note 31 to the financial 
statements outlines the group’s financial risk management 
strategy, including market and currency risk. We engage with 
government authorities and other key stakeholders to ensure 
the potential impacts of proposed regulatory changes are 
understood and where possible mitigated.

We support our growth strategy through established 
investment approval and review processes that apply to 
all major capital decisions and we invest in new product 
development and innovation projects that help keep our 
businesses competitive. We seek to establish a capital 
structure that is appropriate for our business model and 
provides a platform to support our growth strategy. We analyse 
risks to monitor volatilities and key financial ratios. Credit 
limits and review processes are established for all customers 
and financial counterparties. Note 31 to the financial 
statements outlines our financial risk management strategy.

We engage expert advisers to ensure our intellectual 
property is protected and potential impacts of legal 
proceedings are mitigated.

We seek to ensure that adequate operating margins are 
maintained through operating cost effective manufacturing 
facilities. Global sourcing arrangements have been established 
to ensure continuity of supply and competitive costs for key 
supply inputs. Through the application of our risk management 
processes, we identify material catastrophic operational risks 
and implement appropriate risk management controls and 
business continuity plans. 

Nufarm Limited Annual Report 2013 | 23

24 | Nufarm Limited Annual Report 2013

Corporate governance

Nufarm’s board processes have been reviewed to ensure they represent and protect the interests 
of all stakeholders including detailed consideration of the Corporate Governance Principles and 
Recommendations (‘the ASX principles’), published by the Australian Securities Exchange Limited’s 
(ASX) Corporate Governance Council.

Nufarm’s corporate governance 
practices can be viewed 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 30 best 
practice ASX recommendations during 
our reporting period. Nufarm complies 
with all the ASX principles.

Management and oversight 
of Nufarm
The board
The governing body of the company 
is the board of directors. The board’s 
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; 

•   review and approve operating budgets; 

•  approve major capital expenditure, 

acquisitions, divestments and 
corporate funding; 

•  oversee risk management and internal 

compliance; and

•  review 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.

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 2013, there are four board 
committees: audit; human resources; 
nomination and governance; and health 
safety and environment. 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 34 
of this report.

Evaluating the performance 
of senior executives
The performance of the senior executive 
team is reviewed by the managing 
director, and then the human resources 
committee and the board, as part of the 
annual remuneration review. In the case 
of the managing director, the human 
resources committee and the board 
conduct his review.

A performance evaluation of 
senior executives was undertaken 
in accordance with this process in 
the reporting period. The executive 
compensation principles and 

remuneration mix are set out in 
detail in the remuneration report 
on pages 36 to 46 of this report.

The company is managed according to 
the recommendations of ASX Principle 1.

A summary of the board charter is 
available on 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 
properly discharges its responsibilities. 

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.

Nufarm Limited Annual Report 2013 | 25

Corporate governance continued

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.

The Nufarm board has stipulated 
that the role of the chairman and 
chief executive officer may not be 
filled by the same person.

The board structure is consistent 
with ASX Principle 2.

•  reviewing and approving the company’s 

corporate governance policies 
for continuous disclosure 
 and securities trading; and

•  reviewing the company’s code of 

conduct and other ethical standards.

Nufarm recognises the valuable 
contribution made by each board 
member to the effective running of 
the company. When board positions 
become available the opportunity is 
taken to review the mix of skills and 
experience on the board in considering 
the skills and experience sought in 
new directors.

The nomination and governance 
committee
Donald McGauchie is chairman of the 
nomination and governance committee 
and Bruce Goodfellow and Frank Ford 
are members with a majority of 
independent directors. The committee 
is chaired by an independent director.

The formal charter setting out the 
committee’s membership requirements 
includes the following responsibilities:

This analysis forms the basis of selection 
criteria, which includes diversity, both as 
to gender and experience.

•  considering the appropriate size 
and composition of the board;

•  developing criteria for board 

membership selection, composition 
and assessing the skills required on 
the board;

•  reviewing the skills represented on 
the board and determining whether 
those skills meet the required skills;

•  developing a process for the evaluation 
of the performance of the board, its 
committees and directors;

•  recommending changes to the 

membership of the board;

•  making recommendations to the 
board on candidates it considers 
appropriate for appointment;

•  reviewing board succession plans;

•  in conjunction with the human 

resources committee, ensuring the 
application of the diversity policy to 
the selection of board members;

•  reviewing the time required from 

non-executive directors and whether 
those requirements are met;

•  reviewing any retiring non-executive 
director’s performance and making 
recommendations to the board as to 
whether the board should continue to 
support the nomination of a retiring 
non-executive director;

•  managing the process of managing 
director recruitment and transition 
on behalf of the board;

The board is committed to reviewing its 
performance and ensuring the board 
has the skills and knowledge to provide 
appropriate leadership and governance 
for the company.

For some years now the board has 
undertaken an annual internal survey 
of its performance, the results of 
which are used to monitor and improve 
performance and identify ongoing 
development to ensure directors 
have a suitable level of knowledge 
of the business.

In the current period, this formal internal 
review was undertaken together with 
the chairman’s assessment of board 
members against the skills and 
experience matrix.

It is anticipated an external assessment 
will be undertaken in 2013/2014.

In line with ASX Principle 2.6 Nufarm 
applies a capability matrix to assess 
the collective capability of the board. 
This matrix covers qualifications, 
strategic and functional expertise, 
industry knowledge, business and 
board experience and diversity. Prior 
to initiating a search for a new board 
member, these areas of capability are 
reviewed in light of Nufarm’s strategy 
and the prevailing and expected market 
conditions. The collective capability of 

The nomination and governance 
committee reviews the performance 
and governance of directors who seek 
to offer themselves for re-election at 
the company’s annual general meeting. 
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 all directors are independent with 
the exception of Dr WB Goodfellow and 
T Takasaki (non-executive directors) 
and DJ Rathbone (managing director 
and chief executive officer). 

Profiles of each board member, 
including terms in office, are on 
pages 20 and 21 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.

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. 
Nufarm’s chairman, Donald McGauchie, 
is an independent director.

26 | Nufarm Limited Annual Report 2013

Corporate governance continued

the current board is assessed against 
requirements and the search then 
focuses on finding a board member 
who will best complement the current 
mix of capability on the board. 

compliance with all legislation. Where 
there are no legislative requirements, 
the company develops policy statements 
to ensure appropriate standards and 
carefully selects and promotes employees.

The capability matrix is also used to 
select induction, development and 
education activities for the board and 
to articulate the ongoing relevance 
of a board member’s expertise prior 
to recommending re-election of that 
board member. 

In 2012 the board reviewed and updated 
the capability matrix and determined 
that all the criteria remained relevant 
and were free of gender bias.

The board ensures that new directors are 
inducted 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.

The operation of the board is in 
accordance with the recommendations 
of ASX Principle 2. 

A copy of the nomination and 
governance committee charter and a 
summary of the policy and procedure 
for appointment of directors is available 
on 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 

The board endorses the principles of 
the Code of Conduct for Directors, issued 
by the Australian Institute of Company 
Directors.

Our formal code of conduct is available 
on the corporate governance section of 
the company’s website.

Diversity and inclusion 
Nufarm is committed to building a 
diverse and inclusive workplace. 
Diversity of gender, sexual orientation, 
age, ethnicity and religion increase our 
capability to develop and maintain a high 
performing workforce, and to better take 
advantage of the diverse challenges and 
opportunities we face around the globe. 

To this end opportunities are provided for 
our people to work in different countries 
and regions as part of their development. 
Leadership teams are representative of 
the countries and regions within which 
they work resulting in global 
representation across the business.

In 2012 Nufarm confirmed cultural and 
gender diversity as areas for specific 
focus within the overall commitment 
to inclusion of all employees. A formal 
diversity policy was adopted (see the 
corporate governance section of our 
website www.nufarm.com). Human 
resources policies and practices and the 
board selection processes were reviewed 
to ensure they were free of bias and 
supportive of diverse candidates and 
employees. 

In 2013 our focus was in the three 
key areas: 

1.  build a deeper understanding of 

our gender diversity profile through 
improved reporting and the Nufarm 
employee survey;

2.  create an employee value proposition, 

targeted at a diverse range of candidates 
including gender, culture and 
experience, to attract them to 
our industry and company; and

3.  continue to encourage gender and 
cultural diversity while maintaining 
inclusion for all employees.

Cultural diversity
Nufarm supplies products in more than 
100 countries across five regions. Each 
region represents a sizeable percentage 
of our employees. This global footprint 
provides the opportunity to encourage a 
culturally diverse workforce in five ways: 

•  local leadership and teams are 
representative of local cultures; 

•  functions such as operations, 

supply chain, finance, procurement, 
marketing, information technology and 
human resources participate in global 
teams to share information and ideas;

•  cross-regional and cross-functional 

teams are formed to undertake major 
business improvement projects;

•  key individuals work in different 

regions to gain broader knowledge; 
and

•  senior regional leaders meet regularly 
to discuss global and cross-regional 
strategic and operational matters.

These and other activities ensure that 
Nufarm is benefitting from the inclusion 
of its diverse workforce.

Nufarm employee representation

%  Employees

  South America 

  Asia 

  North America 

  Europe 

15  510

16  560

19  640

25  863

  Australia/New Zealand  25  860

  Total 

100  3,433*

  * At 31 May 2013.

Nufarm Limited Annual Report 2013 | 27

   
Corporate governance continued

Board and executive diversity
Every board and executive position which 
becomes available is an opportunity to 
bring further diversity to the business. In 
December 2012 Toshikazu Takasaki was 
appointed to the board. This year Elbert 
Prado (born in Columbia and now a USA 
citizen) was appointed as group executive 
manufacturing. Both bring a different 
perspective to the business based on 
their unique cultural and business 
experience. 

Women in Nufarm
In 2013 data was collected to gain 
a more detailed picture of our gender 
diversity across the globe.

Women work in every area of our 
business. The highest percentage 
is in administrative roles, which are 
traditionally often staffed by women. 
Twenty-eight per cent are in professional 

Female representation

  Executive/senior management  6%

  People managers/team leaders  9%

  Professionals 

  Manufacturing 

  Administration 

28%

15%

42%

Regions
All Nufarm
Australia/New Zealand
Asia
North America
Europe
South America

Percentage 
of women
22
27
15
23
21
21

roles including scientific, sales, 
engineering, marketing, finance, human 
resources and information technology. 
Fifteen per cent are in manufacturing 
working in our plants largely on day 
shift. Fifteen per cent work in a range of 
people management and executive roles. 

a clear impact on business outcomes; 
working in a collegiate atmosphere; 
working in a role closely aligned to 
personal interests; the health and 
wellbeing benefits offered by Nufarm; 
and the company’s reputation for 
quality product and services. 

One aspect of retaining women in 
Nufarm is the ability to encourage them 
back into the workforce after maternity 
leave. In the last year 90 per cent of 
maternity leavers returned to work – 
55 per cent full-time and 45 per cent 
in a part-time capacity. This high 
percentage is encouraged through 
‘keep in touch’ conversations during 
the period of leave and flexibility in 
working arrangements on their return.

Employee survey feedback
Nufarm conducts an employee survey 
every two years and uses the feedback 
from that survey to assist in refining 
our practices for both retaining and 
attracting talented people to the business.

•  Eighty per cent of Nufarm employees 
responded to the survey conducted in 
October 2012. The overall engagement 
score was in the top quartile with no 
notable difference in the engagement 
levels of men and women or in the 
factors they found more or less 
engaging.

•  The employee value proposition 
attributes do not vary notably for 
our people regardless of gender 
or nationality. The work attributes 
emerging as being most valued in 
Nufarm include: having a job with 

Distribution women in full 
and part-time employment
Part-time 
Full-time 
10%
90%
14%
86%
0%
100%
8%
92%
13%
87%
8%
92%

Diversity and inclusion 2014
Our objectives for 2014 build on our 
past accomplishments and findings. 
In 2014 we will: 

1.  carry out a detailed study of 

remuneration and turnover to 
determine if there is any difference 
based on gender or other non-work 
related factors;

2.  ensure involvement of women 

in management and leadership 
development activities to encourage 
their ambitions to take on managerial 
roles; and

3.  increase the number of people 

involved in cross-regional projects 
and assignments.

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
Frank Ford is chairman of the board 
audit committee with Anne Brennan 
and Gordon Davis as members. The 
committee comprises 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 34.

Frank Ford has a master of taxation 
from the University of Melbourne and 
a bachelor of business, accounting from 
RMIT University and is a fellow of the 
Institute of Chartered Accountants. 
Frank is a former managing partner 
of Deloitte Victoria after a long and 

Twenty-two per cent of Nufarm’s permanent full-time or part-time employees 
are women. The table above shows the percentages by region with a breakdown 
of full-time and part-time employment. 

28 | Nufarm Limited Annual Report 2013

Corporate governance continued

successful career as a professional 
advisor spanning some 35 years. 
During that period, he was also a 
member of the Deloitte global board, 
global governance committee and 
national management committee.

Frank is a director of Toll Holdings 
Limited, Citigroup Pty Limited, 
Tarrawarra Museum of Art Limited.

Anne Brennan has a bachelor of 
commerce (hons) from University 
College Galway and is a fellow of the 
Institute of Chartered Accountants in 
Australia and a fellow of the Australian 
Institute of Company Directors.

She was formerly the executive finance 
director for the Coates Group and chief 
financial officer for CSR. Prior to this 
Anne was a partner in professional 
services firms Ernst & Young, Andersen 
and KPMG. 

Anne is deputy chairperson of Echo 
Entertainment Group Limited and a 
director of Myer Limited, Charter Hall 
Group and Argo Investments Ltd. She 
is also a director of Rabobank Australia 
Limited and Rabobank New Zealand 
Limited.

Gordon Davis has a bachelor of forest 
science (hons), master of agricultural 
science and holds a master of business 
administration.

Gordon was managing director of 
AWB Limited between 2006 and 2010. 
Prior to this, he held various senior 
executive positions with Orica Limited, 
including general manager of Orica 
Mining Services (Australia, Asia) and 
general manager of Incitec Fertilizers. 
He has also served in a senior capacity 
on various industry associations.

The committee has a formal charter 
which is reviewed 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 partner 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 
on 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 and was most recently 
amended in May 2013.

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 on the corporate governance 
section of the company’s website.

The company’s disclosure policy is 
consistent with ASX Principle 5.

Rights of shareholders
Communication
Nufarm is committed to timely, open 
and effective communication with its 
shareholders and the general investment 
community.

Nufarm’s communication policy aims to:

•  ensure that shareholders and the 

financial markets are provided with 
full and timely information about our 
activities;

•  comply with its 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.

Postal and electronic communication 
with shareholders includes:

•  half year and annual reports;

•  proxy voting; and

•  notices of AGM.

Copies of:

•  relevant market announcements 

and related information; and

•  presentations made to analysts 

and investor briefings;

are also immediately made available 
on the company’s website.

Nufarm’s formal communications policy 
is available on 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.

In 2012 Nufarm introduced a risk 
management framework, policies and 
procedures, which set out the roles, 
responsibilities and guidelines for 
managing financial and operational 
risks associated with the business. 
The framework, policies and procedures 
have been designed to provide effective 
management of material risks at a level 
appropriate to Nufarm’s global business.

Nufarm Limited Annual Report 2013 | 29

Corporate governance continued

During the year, Nufarm’s group risk 
management department initiated the 
implementation of this framework across 
the group and commenced the process 
of developing detailed risk profiles for 
key operational business units. These 
risk profiles identify the:

•  nature and likelihood of specific 

material risks;

•  key controls in place to mitigate 

and manage the risk;

•  sources and level of assurance 

provided on the effective operation 
of key controls; and

•  responsibilities for managing 

these risks.

Nufarm’s key operational and financial 
risks are set out on page 23 in the 
information on the company section 
of this report.

Nufarm’s risk management framework 
is based on concepts and principles 
identified in the Australian/New Zealand 
Standard on Risk Management (AS/NZ 
ISO 31000:2009). The risk framework, 
policies and procedures will continue to 
be enhanced as the group’s operations 
develop and its range of activities expand. 

The board annually, at its strategy review 
meeting, comprehensively reviews the 
material strategic risks faced by the 
company. In so doing, it considers the 
interests of all relevant stakeholders. 

The managing director and the 
company’s senior management (group 
executives who report directly to the 
managing director) are responsible for 
the management of material risks in 
their respective areas of responsibility. 
At each board meeting, management 
report on specific issues of risk and 
compliance, including legal compliance, 
health safety and environmental 
compliance and financial reporting.

These regular reports, submitted for 
review to each board meeting, will 
include relevant commentary on any 
material risk. 

The board is responsible 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 
delegates certain responsibilities to 
board committees. All board committees 
report to the board on risk management 
issues within their area of responsibility.

The nomination and governance 
committee is responsible for ensuring 
the company has appropriate governance 
policies and practices and appropriate 
ethical standards.

The health safety and environment 
(HSE) committee assists the board in 
respect of the company’s responsibilities 
in relation to health, safety and 
environment matters arising out of 
activities within the Nufarm group 
as they affect employees, contractors, 
visitors, customers and the communities 
in which the Nufarm group operates. 
Gordon Davis is chairman of the 
HSE committee with Anne Brennan 
and Peter Margin members of the 
committee. All members of the 
committee are independent directors.

The audit committee assists the board 
in regard to financial reporting, audit 
and risk management, including 
oversight of the preparation of Nufarm’s 
financial reporting, compliance with legal 
and regulatory obligations, oversight 
of the effectiveness of the Nufarm’s 
enterprise-wide risk management and 
internal control framework and oversight 
of the relationship with the external and 
internal auditors. The general manager 
global risk and assurance reports at 

each audit committee meeting on the 
implementation and management of 
the enterprise risk management policy.

The audit committee has specific 
oversight of financial and treasury risk, 
including credit, liquidity and market 
risks and will refer any relevant matters 
to the board. The year-end exposure 
to these risks is described in note 31 
of the financial statements. 

The Nufarm audit committee charter 
specifies the roles and responsibilities 
of the committee and the general 
manager global risk and assurance 
and requires the committee to:

•  evaluate the effectiveness of the 
group’s process for assessing, 
monitoring and managing significant 
risks or exposures and the steps 
management has taken to minimise 
such risks to the group as required 
by ASX Principle 7.2; 

•  assess the effectiveness of, or 

weaknesses in, the group’s internal 
control framework including 
computerised information system 
controls and security, the overall 
control environment, and accounting, 
treasury and financial controls;

•  consider significant findings and 
recommendations of the external 
auditors and internal auditors, together 
with management’s responses thereto, 
and the timetable for implementation of 
recommendations to correct identified 
weaknesses in internal controls; and

•  review, with the general manager 
global risk and assurance and the 
external auditors, the coordination 
of audit effort to assure completeness 
of coverage of key business controls 
and risk areas, reduction of redundant 
effort, and the effective use of risk 
management and audit resources.

30 | Nufarm Limited Annual Report 2013

Corporate governance continued

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, 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. Full details 
of the executive remuneration structure 
are set out in the remuneration report 
on pages 36 to 46 of this report.

Human resources committee
Peter Margin is chairman of the human 
resources committee and Gordon Davis 
and Donald McGauchie are members. 
The committee comprises independent 
non-executive directors and is chaired 
by an independent director.

The committee’s formal charter 
includes responsibility to review and 
make recommendations to the board 
in relation to Nufarm’s board and 
executive remuneration strategy, 
structure and practice with regard to:

•  Nufarm’s strategic objectives;

•  corporate governance principles; and 

•  competitive practice.

The specific matters the committee may 
consider include the review of:

•  executive management and directors’ 

remuneration, including the link 
between company and individual 
performance;

•  current industry best practice;

•  the outcome of the annual vote on the 
adoption of the remuneration report; 

•  different methods for remunerating 
senior management and directors 
including superannuation 
arrangements;

•  existing or proposed 
incentive schemes;

•  retirement and termination 
benefits and payments for 
senior management; and

•  professional indemnity and 
liability Insurance policies.

The committee is responsible for 
seeking and approving independent 
remuneration advisers who will provide 
independent remuneration advice, as 
appropriate, on board, chief executive 
officer and other key management 
personnel remuneration strategy, 
structure, practice and disclosure.

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.

The company distinguishes the structure 
of non-executive directors’ remuneration 
from that of senior executives. Details 
of senior executive and non-executive 
directors’ remuneration are set out 
in the remuneration report on pages 
36 to 46 of this report.

A copy of the human resources 
committee charter and the company 
policy on prohibiting senior executives 
from hedging any shares offered under 
the executive share plan are available 
on the corporate governance section 
of the company’s website. Nufarm’s 
remuneration policies are consistent 
with ASX Principle 8.

Nufarm Limited Annual Report 2013 | 31

Financial report

32 | Nufarm Limited Annual Report 2013

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 2013 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:

DG McGauchie AO (Chairman) 
DJ Rathbone AM (Managing director)
AB Brennan 
GR Davis 
FA Ford (appointed 10 October 2012)
Dr WB Goodfellow
GA Hounsell (retired 8 October 2012)
PM Margin 
T Takasaki (appointed 6 December 2012)

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 20 and 21.

Company secretary
The company secretary is R Heath.

Details of the qualifications and experience of the company secretary are set out on page 18.

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:

AB Brennan
GR Davis
FA Ford
Dr WB Goodfellow 1,2
DG McGauchie1
PM Margin
DJ Rathbone 
T Takasaki

Nufarm Ltd 
ordinary shares

Nufarm Finance (NZ) Ltd 
step-up securities

10,000
40,000
–
1,143,416
46,239
2,458
11,726,031
–

–
–
–
48,423
–
–
1,500
–

Note: at the date of his retirement GA Hounsell owned 43,723 shares.

1.  The shareholdings of Dr WB Goodfellow and DG McGauchie 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 (430,434 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 (120,000 shares);

(iii) 531 Trust (400,861 shares). Dr Goodfellow and EW Preston are trustees of 531 Trust.

(iv) Auckland Medical Research Foundation (26,558 step-up securities). Dr Goodfellow does not have a beneficial interest in these step-up securities.

(v)   Trustees of the Goodfellow Foundation (33,854 shares and 1,338 step-up securities). Dr Goodfellow is chairman of the Foundation and does not have a beneficial interest 

in these shares or step-up securities.

(vi) Archem Trading (NZ) Ltd (700 step-up securities).

Nufarm Limited Annual Report 2013 | 33

 
 
 
 
 
 
Directors’ report continued

Directors’ meetings
The number of directors’ meetings (including meetings of board committees) and number of meetings attended by each of the 
directors of the company during the financial year are:

Director

Board

Audit

AB Brennan 
GR Davis 
FA Ford1
Dr WB Goodfellow 
GA Hounsell1
DG McGauchie 
PM Margin
DJ Rathbone 
T Takasaki1

Meetings 
held 2
12
12
9
12
1
12
12
12
7

Meetings 
attended
12
12
9
12
1
12
12
11
7

Meetings 
held 2
4
4
3
–
1
–
–
–

Meetings 
attended
4
4
3
–
1
–
–
–

Committees

Human 
resources

Nomination and 
governance

Health safety 
and environment

Meetings 
held2
–
5

Meetings 
attended
–
5

–
–
5
5
–

–
–
5
5
–

Meetings 
held2
–
–
2
3
–
3
–
–

Meetings 
attended
–
–
2
3
–
3
–
–

Meetings 
held2
4
4

Meetings 
attended
4
4

–
–
–
4
–

–
–
–
4
–

1. FA Ford was appointed a director on 10 October 2012. T Takasaki was appointed a director on 6 December 2012. GA Hounsell retired as a director on 8 October 2012. 

2. Number of meetings held during the period the director held office.

Principal activities and changes
Details of Nufarm’s principal activities and changes are set out in the information on the company section on pages 22 to 23 of the 
financial report.

Nufarm employs approximately 3,458 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 group for the 12 months to 31 July 2013 is $81.0 million. The comparable figure for 
the 12 months to 31 July 2012 was $72.6 million.

Dividends
The following dividends have been paid declared or recommended since the end of the preceding financial year.

The final dividend for 2011–2012 of 3 cents paid 16 November 2012.

The interim dividend for 2012–2013 of 3 cents paid 10 May 2013. 

The final dividend for 2012–2013 of 5 cents as declared and recommended by the directors is payable 15 November 2013.

Nufarm step-up securities distributions
The following Nufarm step-up securities distributions have been paid since the end of the preceding financial year:

Distribution for the period 16 April 2012 – 15 October 2012 
at the rate of 8.1067% per annum paid 15 October 2012

Distribution for the period 15 October 2012 – 15 April 2013
at the rate of 7.03% paid 15 April 2013

34 | Nufarm Limited Annual Report 2013

$000
7,817

7,884 

$000
10,146 

8,798

Directors’ report continued

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 4 to 8 and the business review on pages 11 to 14.

State of affairs
The state of the group’s affairs are set out in the managing director’s review on pages 4 to 8 and the business review on 
pages 11 to 14.

Operations, financial position, business strategies and prospects
Information on the group, which enables an informed assessment of its operations, financial position, strategies and prospects, 
is contained in the financial accounts, managing director’s review, the business review, and the information on the company section 
on pages 22 and 23 of the financial report.

Events subsequent to reporting date
On 25 September 2013, the directors declared a final franked dividend of 5 cents per share payable 15 November 2013.

Likely developments
Likely developments in the group’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 16 and 17. The group did not 
incur any prosecutions or fines in the financial period relating to environmental performance. The group publishes annually 
a sustainability report (formerly called health, safety and environment report). This report can be viewed on the group’s website 
or a copy will be made available upon request to the company secretary.

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 to 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.

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 47 and forms part of the directors’ report for the financial year 
ended 31 July 2013.

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.

Nufarm Limited Annual Report 2013 | 35

Directors’ report continued

Remuneration report
A message from the chairman of the human resources committee (unaudited)
Nufarm’s success is delivered through the efforts of our global teams of people and their commitment and passion to make 
Nufarm a better company. The best way to focus those efforts is to balance our deep company and industry knowledge with 
new thinking and ideas on both an individual and shared basis. This drives the sustainable innovation that is key to delivering our 
growth strategy. The remuneration structure for key management personnel (KMP) at Nufarm has been designed to support these 
principles. The short and long term incentive plans combine shared accountability for financial results with individual reward for 
strategic changes and improvements within the individual’s function or business unit. Each year the board reviews the financial 
metrics and individual objectives to ensure they remain appropriate as a basis of reward given the objectives of the business 
strategy and the interests of shareholders. 

Nufarm’s remuneration report is for the year ended 31 July 2013. The report details remuneration information as it applies to 
Nufarm non-executive directors (NED) and Nufarm’s executives (referred to as KMP).

KMP include the managing director and the group executives who have the authority and responsibility for successfully planning, 
directing and controlling Nufarm’s business. 

Peter Margin

Remuneration governance 
The human resources (HR) committee is responsible for reviewing and making recommendations to the board on remuneration 
policies and packages applicable to KMP. The committee is comprised of three independent non-executive directors and is tasked 
with ensuring that remuneration policies and packages retain and motivate high calibre executives and have a clear relationship 
between company performance and executive remuneration. The committee charter can be found at www.nufarm.com

The board measures financial performance under the short term incentive (STI) and long term incentive plan, (LTIP) using audited 
numbers. The relative total shareholder return (TSR) will be measured by an independent external advisor. 

Within the remuneration framework the board has discretion to ‘clawback’ LTIP and deferred STI prior to vesting where: payment is 
contrary to the financial soundness of the company; in circumstances where the financial performance of Nufarm over the relevant 
period (including the initial STI performance period) has been misstated; and/or for individual gross misconduct. 

KMP are not permitted to hedge any shares issued to them under the STI while those shares remain held in trust.

Key outcomes for the 2013 year detailed in this report include:

•  fixed remuneration increases for KMP;

•  STI awards to KMP in line with performance; and

•  LTIP awards to KMP. 

Remuneration advice
The human resources committee engaged Godfrey Remuneration Group (GRG) as advisors to provide executive remuneration 
benchmarking data through comparisons to organisations of similar size and complexity to Nufarm and through detailed analysis 
of KMP compensation trends. This advice covered both fixed and variable components of compensation.

GRG was paid $36,300 for the provision of this advice. No other services were provided by GRG during the year. 

36 | Nufarm Limited Annual Report 2013

Directors’ report continued

The human resources committee appointed GRG with a set of clear criteria including the requirement for all reporting to be 
delivered directly to the chairman of the human resources committee. A process was established to ensure that GRG would be 
able to carry out its work, including information capture and the formation of its recommendations, free from undue influence 
from KMP to whom the recommendations would apply. The human resources committee undertook a full and independent review 
of the advice.

The board was satisfied that the remuneration recommendations made by GRG were free from undue influence by members 
of the KMP to whom the recommendations would apply. 

The remuneration recommendations were provided to the Nufarm board as an input into decision-making only. The board 
considered the recommendations, along with other factors such as company performance, individual performance and the 
motivation and retention of key individuals, in making its remuneration decisions. 

Principles of remuneration for the period ended 31 July 2013
The company’s remuneration policy for the period ended 31 July 2013 was based on total target reward (TTR) structured to align 
overall remuneration spend with business performance.

TTR was composed of total fixed remuneration (TFR), a variable component of STI linked to current year performance and a LTIP 
linked to longer term performance and business outcomes. 

Remuneration mix
The TTR for the majority of the KMP (excluding the managing director) will have a mix at target of 55 per cent fixed, 25 per cent 
STI (50 per cent paid cash and 50 per cent retained in equity) and 20 per cent LTIP (retained in performance rights). New KMP 
are employed on this basis. For longer serving KMP a case-by-case transition plan is being implemented to arrive at the target 
remuneration mix. Individual plans are necessary given different salary levels and contractual arrangements.

The effect of this transition is that an increasing percentage of the KMP’s remuneration is ‘at risk’ and is directly linked to company 
performance in the short, medium and longer term. 

Fixed remuneration
The company’s policy for the fixed reward was benchmarked against Australian executives with reference to the 62.5th percentile 
of companies of similar size and complexity excluding retail, utilities, financial and resources companies. 

The 62.5th percentile positioning reflects the reality that while the current KMP are Australian based they have significant 
international responsibility and operate in a globally competitive employment market where remuneration levels are often 
higher than in the Australian market. 

Short term incentive 
Nufarm’s strategy focuses on growth and increased participation in high value markets with sustainable returns. Therefore our 
STI program is heavily biased to growth in profitability and a strong focus on balance sheet management. Eighty per cent of STI 
potential was attached to the achievement of key financial outcomes for which KMP have shared accountability. Twenty per cent 
of STI potential was attached to individual strategic objectives depending on the role and function of the executive. Each of these 
objectives was focused on the contribution of the individual to the development of innovation capability and increased business 
discipline, both of which the company sees as integral to delivering targeted financial outcomes and returning the company to 
acceptable returns for shareholders. 

The board reviews the measures each year to ensure they remain relevant for the company and shareholders. For the 2013 year 
the financial measures were changed. Underlying NPAT replaced underlying EBIT while average net working capital (ANWC)/sales 
replaced return on assets (ROA). These changes resulted in greater alignment with shareholder interests and rewards and better 
alignment within the business where ANWC as a percentage of sales is a standard measure across the business units.

In 2013 the STI, which rewards annual performance, was delivered through a combination of cash incentive and shares which were 
retained and will vest in 2015 on the second anniversary.

Nufarm Limited Annual Report 2013 | 37

Directors’ report continued

Who participates in the STI? Plan participants include KMP and senior managers globally.
When are awards made?
What measures are used 
in the plan?

Awards under the plan are made at the end of the financial year.
The board sets measures at the start of each year focused on profitability, balance sheet 
management and overall return. Noted below are the measures used in 2013.
80% of the potential was based on underlying net 
profit after tax (NPAT) and average net working 
capital (ANWC)/sales.

20% of the potential was based on individual 
strategic and business improvement 
objectives aligned to the role and 
contribution of the executive.

When and how are the STI 
payments determined?

This structure reflects Nufarm’s strong focus on the use of capital and ensures alignment of 
reward to business outcomes and shareholder returns. 
Awards are assessed annually at the end of the financial year. Awards are based on the percentage 
achievement against the budget and strategic measures.
Percentage budget achievement

<85

100

85

Percentage of STI Target award realised
Straight-line vesting between 85% and budget and between budget (target) and 120% budget 
achievement (stretch).

100

nil

25

120 Underlying NPAT
110 ANWC/Sales
150

Are payments in cash or 
shares?
When do the shares vest?
Is there a clawback 
provision in the plan?

Strategic and business improvement objectives are assessed on a merit basis against stated objectives.
50% of STI is paid in cash at the time of performance testing and 50% deferred into shares in the 
company for nil consideration.
Vesting will occur on the second anniversary subject to continued employment.
The rules of the plan provide for clawback of deferred STI prior to vesting where: payment 
is contrary to the financial soundness of the company; in circumstances where the financial 
performance of Nufarm over the relevant period (including the initial STI performance period) 
has been misstated; and/or for individual gross misconduct.

Long term incentive plan 
Nufarm’s LTIP commenced in 2011 and is based on the principle of aligning executive interests and rewards with those of 
shareholders. Return on funds employed (ROFE) has long been held as an important metric for Nufarm and it was considered 
important to include a return measure in the LTIP. Relative TSR recognises that investors will choose to invest their money in 
industries and companies with acceptable returns. This plan rewards executives to the degree the company performs against 
these two hurdles over three years. 

Why have a LTIP?

Who participates 
in the LTIP
Are the awards cash 
or shares?

This plan aligns executive interests and earnings with the longer term Nufarm strategy and the 
interests of shareholders. 
The current participants in the plan are KMP and other selected senior managers (together, the 
LTIP participants).
Awards are granted to Australian executives in the form of performance rights, which comprise 
rights to acquire ordinary shares in the company for nil consideration, subject to the achievement 
of global performance hurdles.

When are the awards 
made?

The plan rules provide the flexibility to use other instruments to comply with local regulations and 
sound practice.
Under the plan, Australian LTIP participants receive an annual award of performance rights as 
soon as practical after the announcement of results for the preceding year.

In the case of the managing director the award is delayed until after shareholder approval is gained 
at an annual general meeting.

The initial awards were made to LTIP participants (excluding the managing director) in the first 
quarter of 2012 in line with the individual transition plans mentioned above under ‘remuneration mix’.

How are the number of 
rights calculated?

The awards for the 2012 financial year were made to the LTIP participants in the first quarter of the 
2013 year.
The number of rights for the 2011 and 2012 awards were calculated at ‘face value’ using the five 
day VWAP post the announcement of annual results for FY12:

•  the board will review the efficacy of a fair value methodology annually; and 

•  to be eligible the LTIP participant needs to be employed by Nufarm on the vesting date.

38 | Nufarm Limited Annual Report 2013

Directors’ report continued

When do the awards vest?

The performance/vesting period for awards is three years. Awards will vest in two equal tranches 
as follows:

•  50% of the LTIP grant will vest subject to the achievement of a relative TSR performance hurdle 

measured against a selected comparator group of companies; and

•  the remaining 50% of the LTIP grant will vest subject to the three year average of an absolute 

ROFE target.

Why have ROFE and 
relative TSR been chosen 
as the hurdles?
What is the comparator 
group for the assessment 
of relative TSR?

How is relative TSR 
measured?

What is the relative TSR 
performance required for 
vesting?

How is the ROFE target 
set?

How is ROFE measured?

What ROFE result is 
required for vesting?

What was the result 
for the 2013 year?

What happens if the 
awards do not vest?

Is there a clawback 
provision in the plan?

Proportion of TSR grant vesting

ROFE is used to track progress towards the goal to return long term results back to acceptable 
levels for Nufarm (ROFE). Strong relative TSR performance ensures Nufarm is an attractive 
investment for shareholders.
Based on the results of research and modelling carried out by Ernst and Young, the board approved 
the adoption of the ‘S&P ASX 200 excluding those companies in the Financial, Materials and 
Energy groups’ as the TSR comparator group. This provides a group which is large enough for 
sound measurement with exclusions that reduce the volatility by removing companies which are in 
significantly different industries to Nufarm. This comparator group is also seen as an appropriate 
representation of Nufarm’s competitors for investment. 
TSR will be measured over the performance period. For the purposes of this measurement, each 
company’s share price will be measured using the average closing price over 60 days up to (but 
excluding) the first day of the performance period, and the average closing price over 60 days 
up to and including the last day of the performance period.
TSR of Nufarm relative to the TSR of comparator 
group companies
Less than 50th percentile
50th percentile
Between 51st percentile and 75th percentile
75th percentile
ROFE objectives are set by the board at the beginning of each year. There is both a ‘target’ and a 
‘stretch’ hurdle. These numbers are based on the budget and growth strategy. ‘Target’ represents a 
sustainable return to acceptable ROFE levels. ‘Stretch’ recognises achievement well above budget. 
This ensures that full vesting of the LTIP is truly reliant on outstanding performance.
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. For the purposes of measuring ROFE performance in the LTIP, ROFE will be averaged 
over the life of the plan. 
Percentage of ROFE target achieved
Less than target
Target
Between target and stretch
Stretch
There is no partial vesting of the LTIP before the third anniversary which will be 31 July 2014 for the 
first awards under the plan. The table below shows the performance against target for the first two 
years of the plan.

Proportion of ROFE grant vesting
0%
50%
Straight-line vesting between 50% and 100%
100%

0%
50%
Straight-line vesting between 50% and 100%
100% vesting

Target %
10.00
10.90
10.45

Outcome %
10.40
8.8
9.6

2012
2013
Cumulative average
This means that at the second anniversary of the 2012 award that the results are tracking below 
the hurdle rate necessary to trigger vesting on this metric of the LTIP. 
To the extent that the TSR and ROFE performance hurdles are not met at the end of the three year 
performance period and vesting is not achieved, performance will not be re-tested and the award 
will lapse.
The rules of the plan provide for clawback of unvested LTIP rights where: payment is contrary to the 
financial soundness of the company; in circumstances where the financial performance of Nufarm 
over the relevant period has been misstated; and/or for individual gross misconduct.

Nufarm Limited Annual Report 2013 | 39

Directors’ report continued

Link between performance and KMP remuneration outcomes
•  Fixed and variable remuneration review: given the financial performance of the group and the contribution to the continued 
recovery of the business, KMP were granted increases in fixed remuneration and short term incentive potential of between 
three per cent and 10 per cent. Percentage increases reflected changes in the scope and responsibility of the role, individual 
performance and alignment to market comparators. Salary benchmarking carried out by Godfrey Remuneration Group 
confirmed that these increases were in line with market comparisons and movement in executive salaries.

•  STI: based on an underlying NPAT result of $83.2 million, an ANWC/Sales result at 46.8 per cent and performance against 

individual strategic and business improvement objectives, KMP were awarded a limited incentive in accordance with the rules 
of the plan.

  –  Individual objectives were driven by Nufarm’s strategy and the goals to deliver on sustainable innovation and business 
discipline across the business. These objectives were specific to the role of each executive and included organisation 
restructuring, management and board renewal, business process and systems improvements and the implementation 
of initiatives to support growth in higher value segments.

•  LTIP: the LTIP vests on the third anniversary. While both measures are tested on the third anniversary, the ROFE results 
for 2012 and 2013 are currently tracking below the hurdle rate necessary to trigger any payment against this metric. 

The table below summarises the company’s performance and shareholder wealth statistics which influence KMP variable 
remuneration. These are listed over the last five years with the exception of ANWC/Sales and Underlying NPAT which were 
used for calculation of the 2013 STI. 

Underlying
EBIT*
$M
312.5
148.4
171.8
206.0
186.8

ANWC/Sales***

%
–
N/A
N/A
45.3
46.8

Underlying

NPAT**
$M
–
N/A
N/A
115.4
83.2

ROFE
achieved
%
13.0
6.0
7.6
10.4
8.8

Closing
share price
31 July
$
10.84
3.82
4.34
5.47
4.50

Total
shareholder

return****
%
(33.8)
(62.7)
13.6
26.8
(16.5)

2009
2010
2011
2012
2013

* 

 And ** Underlying EBIT is earnings before net finance costs, taxation and material items. Underlying NPAT is net profit after tax before material items. Underlying NPAT and 
Underlying EBIT are used internally by management to assess performance of our business and make decisions on the allocation of our resources. NPAT, rather than EBIT, 
is used to assess management’s STI to ensure rewarded business outcomes are aligned with shareholder returns.

***  Average net working capital/sales is used throughout the business and highlights the strong business-wide focus on the management of working capital over the full year.

**** Source: Credit-Suisse.

40 | Nufarm Limited Annual Report 2013

Directors’ report continued

2013 STI outcomes

2013 STI Potential

KMP
Doug Rathbone*
Paul Binfield
David Pullan**
Brian Benson
Robert Reis
Greg Hunt
Dale Mellody
Mike Pointon
Bonita Croft
Rodney Heath

At target $ At maximum $
2,452,500
468,600
790,703
756,324
661,004
420,240
567,567
415,650
355,830
347,027

1,638,000
312,400
527,135
504,216
440,669
280,160
378,378
277,100
237,220
231,351

*  Deferred STI is retained in cash.

Total award as 
a % of target 

potential $ Total award $
501,294
103,418
174,504
166,916
145,880
92,744
125,258
91,732
78,530
76,586

30.6
33.1
33.1
33.1
33.1
33.1
33.1
33.1
33.1
33.1

To be paid in cash 
in October 2013 $
200,518
51,709
87,252
83,458
72,940
46,372
62,629
45,866
39,265
38,293

Retained in shares 
vesting on 2nd 
anniversary $
300,776
51,709
87,252
83,458
72,940
46,372
62,629
45,866
39,265
38,293

**  David Pullan retired on 31 July 2013 as a qualifying leaver. Therefore his award remains in the plan and is subject to the same vesting measurements and timing as if he had 

remained an employee. 

2013 LTIP allocations

KMP
Doug Rathbone
Paul Binfield
David Pullan
Brian Benson
Robert Reis
Greg Hunt
Dale Mellody
Mike Pointon
Bonita Croft
Rodney Heath

Value of award $ 
787,500
249,700
156,724
149,910
133,536
224,540
114,660
95,420
71,885
70,106

Number of performance rights*
134,282
42,578
26,724
25,562
22,770
38,288
19,552
16,271
12,258
11,954

* Rights were valued at $5.8645 being the five day VWAP post the announcement of 2012 annual results.

Note: To the degree that the ROFE and relative TSR hurdles are met, rights will vest on 31 July 2016.

Nufarm Limited Annual Report 2013 | 41

Directors’ report continued

Service contracts
The company has employment contracts with the KMP. These contracts formalise the terms and conditions of employment. 
The contracts are for an indefinite term. The contracts of the managing director and several other KMP named in this report 
were entered into prior to the announcement of legislation to change termination payment limits for executives.

The company may terminate the contract of the managing director, either immediately or by giving 12 months’ notice, in which 
case the managing director will be paid a termination payment equivalent to 24 months TFR (base salary plus value of benefits 
such as motor vehicle and superannuation and any fringe benefits tax in relation to those benefits). The contract also provides 
for the company to be able to make a payment in lieu of notice should it wish, for payment of any entitlements due under existing 
STI and LTI plans and for payment of applicable statutory entitlements.

The managing director may terminate the contract by giving the company 12 months’ notice. In this event, the contract provides an 
entitlement for the managing director to a termination payment equal to any part of the notice period, paid in lieu, by the company. 
In addition, the managing director will be paid any entitlements due under existing STI and LTI plans and all applicable statutory 
entitlements.

In certain limited circumstances, the managing director may also terminate his contract on immediate notice. This includes where 
there is a change of duties or responsibilities without the managing director’s agreement, which has the effect of material change 
in status and in certain other limited circumstances. If the contract is terminated in these circumstances, the managing director 
will, in general, be entitled to the payments outlined above where the company terminates on immediate notice. In extremely 
limited circumstances, the managing director may also be entitled to an additional amount equal to 24 months’ entitlement 
under the STI and LTI plans.

The company may terminate the contract of other KMP by six months’ notice in which case a termination payment equivalent to 
12 months’ total employment cost will be paid. In addition, the contracts provide for payment of any part of the applicable notice 
period paid in lieu, plus any entitlements due under existing STI and LTI plans (including any entitlements which would have been 
payable under the STI and LTI plans in the period ending on the later of (i) the last day of the financial year following notice of 
termination or (ii) six months following notice of termination) and applicable statutory entitlements.

The company may terminate the employment contracts immediately for serious misconduct.

Termination benefits
Under the rules of the STI plan if a KMP leaves before the vesting anniversary under ‘qualifying leaver’ provisions the equity will 
remain in the plan until the vesting date. If the KMP leaves under other than qualifying leaver circumstances the equity will be 
forfeited. 

To be eligible under the LTI plan the KMP must be employed by Nufarm on the first anniversary of the allocation. If the executive 
leaves before this date the allocation is forfeited. If the executive leaves under qualifying leaver provisions after the first anniversary 
and before the third anniversary of the plan the allocation will be pro-rated and the pro-rated allocation will remain ‘on foot’ in 
the plan subject always to certain overriding discretions set out in the plan, and to supervening provisions in certain executive 
contracts, which extend or alter the manner in which the pro-rating is undertaken. Qualifying leaver provisions include participants 
who cease employment due to retirement, death, ill health/disability, redundancy, or contract severance without cause by Nufarm. 

The rules of the plans provide the flexibility, in special circumstances (for example, health or severe personal hardship), to 
accelerate the vesting. In the case of the STI this would result in the shares being released from the trust to the KMP. In the 
case of the LTI plan the qualifying allocation will be tested against the hurdles to determine the value (if any) of the allocation. 

42 | Nufarm Limited Annual Report 2013

Directors’ report continued

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 2009 AGM, shareholders approved an aggregate of $1,600,000 per year (excluding superannuation costs).

Set out below are details of the annual fees payable for the year ended 31 July 2013 (including superannuation costs). These fees 
were effective from 1 February 2012. There was no change to fees during the 2013 year.

The total fees for year remained well within the approved cap. The board has determined there is no need to seek an increase in 
the cap for the 2014 year.

Chairman1
General board
Audit committee chair
Audit committee member
Health, safety, environment and risk committee chair
Health, safety, environment and risk committee member
Human resources committee chair
Human resources committee member
Nominations and governance committee chair
Nominations and governance committee member

1. The chairman receives no fees as a member of any committee.

Fees applicable from 1 February 2012 to 31 July 2013 $
330,000
135,000
27,500
11,000
16,500
5,500
22,000
8,250
11,000
1,375 per meeting

Board fees are reviewed every 18 months. After consideration of general market data all board and committee fees will increase by 
five per cent effective 1 August 2013. These fees will be reviewed again in January 2015.

Nufarm Limited Annual Report 2013 | 43

Directors’ report continued

Remuneration of directors and executives
Details follow of the nature and amount of each major element of remuneration in respect of the non-executive directors and 
key management personnel, which includes the managing director and group executives. 

In AUD
Directors’ non-executive
AB Brennan 

GR Davis 

Dr RJ Edgar3

Dr WB Goodfellow

GA Hounsell 4

DG McGauchie

P Margin

Dr JW Stocker 5

F Ford 2

T Takasaki6

Sub total non-executive directors’ remuneration

Executive director DJ Rathbone (managing director)

Total directors’ remuneration

Group executives
DA Pullan8 (group executive operations)

P Binfield (chief financial officer)

BF Benson (group executive marketing)

G Hunt (group executive global marketing)

RG Reis (group executive corporate strategy and external affairs)

DA Mellody (group executive global marketing)

MJ Pointon (group executive innovation and development)

BJ Croft (group executive human resources and organisation development)

R Heath (company secretary)

RF Ooms7 (group executive chemicals)

E Prado9 (group executive manufacturing)

Sub total – total executives’ remuneration

Total directors’ and executives’ remuneration

Salary and 
fees
$

Cash bonus 
(vested)
$

Short term

Non- 
monetary 
benefits
$

Post-

employment

Share-based 

payments

Other 

long term

Total1

Total Superannuation

benefits Equity settled

Termination 

Percentage of 

Value of options 

remuneration 

as a proportion 

Total 

performance 

of total 

remuneration

based

remuneration

$

%

%

2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012

2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012

 151,500 
 128,864 
 170,750 
 135,025 
 – 
 84,833 
 139,125 
 121,364 
 30,625 
 155,114 
 330,000 
 295,000 
 162,500 
 110,310 
 – 
 40,455 
 134,625 
 – 
 88,788 
 – 
 1,207,913 
 1,070,965 
 1,522,303 
 1,451,451 
 2,730,216 
 2,522,416 

 778,558 
 702,458 
 639,588 
 449,875 
 682,937 
 624,858 
 587,303 
 270,310 
 610,707 
 542,504 
 498,339 
 475,262 
 346,351 
 298,261 
 324,974 
 285,629 
 281,498 
 245,157 
 – 
 604,812 
 55,078 
 – 
 4,805,333 
 4,499,126 
 7,535,549 
 7,021,542 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 840,247 
 1,141,795 
 840,247 
 1,141,795 

 87,252 
 259,987 
 51,709 
 309,226 
 83,458 
 248,683 
 46,372 
 100,545 
 72,940 
 215,310 
 62,629 
 182,991 
 45,866 
 129,179 
 39,265 
 114,832 
 38,293 
 113,038 
 – 
 – 
 – 
 – 
 527,784 
 1,673,791 
 1,368,031 
 2,815,586 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 47,172 
 51,508 
 47,172 
 51,508 

 – 
 – 
 – 
 – 
 37,638 
 22,030 
 14,160 
 – 
 43,511 
 22,829 
 35,219 
 31,612 
 35,416 
 35,468 
 33,519 
 – 
 32,746 
 38,096 
 – 
 13,293 
 – 
 – 
 232,209 
 163,328 
 279,381 
 214,836 

$

 151,500 

 128,864 

 170,750 

 135,025 

 – 

 84,833 

 139,125 

 121,364 

 30,625 

 155,114 

 330,000 

 295,000 

 162,500 

 110,310 

 40,455 

 134,625 

 88,788 

 – 

 – 

 – 

 1,207,913 

 1,070,965 

 2,409,722 

 2,644,754 

 3,617,635 

 3,715,719 

 865,810 

 962,445 

 691,297 

 759,101 

 804,033 

 895,571 

 647,835 

 370,855 

 727,158 

 780,643 

 596,187 

 689,865 

 427,633 

 462,908 

 397,758 

 400,461 

 352,537 

 396,291 

 618,105 

 55,078 

 – 

 – 

 5,565,326 

 6,336,245 

 9,182,961 

 10,051,964 

$

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 799,000 

$

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 439,683 

 233,393 

 439,683 

 233,393 

 210,500 

 145,844 

 175,934 

 102,024 

 201,346 

 139,504 

 162,636 

 96,166 

 175,405 

 120,784 

 150,335 

 103,432 

 109,715 

 72,830 

 93,820 

 64,418 

 92,085 

 63,412 

 – 

 – 

 – 

 – 

$

 13,772 

 12,886 

 15,522 

 13,482 

 – 

 8,483 

 12,647 

 12,136 

 2,784 

 14,511 

 30,000 

 29,500 

 14,772 

 11,031 

 4,045 

 12,238 

 – 

 – 

 – 

 8,071 

 109,806 

 106,074 

 22,341 

 24,102 

 132,147 

 130,176 

 30,828 

 45,854 

 23,606 

 13,311 

 23,725 

 48,800 

 22,917 

 16,667 

 24,000 

 34,646 

 24,150 

 24,300 

 24,000 

 46,791 

 25,833 

 47,917 

 24,833 

 45,890 

 28,992 

 2,040 

 – 

 – 

 225,932 

 353,168 

 358,079 

 483,344 

$

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 94,909 

 178,174 

 94,909 

 178,174 

 17,400 

 25,364 

 19,671 

 29,644 

 20,455 

 17,265 

 13,969 

 15,080 

 8,520 

 18,009 

 9,316 

 165,272 

 141,750 

 186,272 

 148,507 

 – 

 93,316 

 151,772 

 133,500 

 33,409 

 169,625 

 360,000 

 324,500 

 177,272 

 121,341 

 44,500 

 146,863 

 96,859 

 – 

 – 

 – 

 1,317,719 

 1,177,039 

 2,966,655 

 3,080,423 

 4,284,374 

 4,257,462 

 1,906,138 

 1,171,543 

 890,837 

 874,436 

 1,054,468 

 1,103,546 

 833,388 

 483,688 

 956,207 

 956,528 

 787,937 

 831,566 

 576,428 

 591,049 

 517,411 

 512,796 

 487,464 

 514,909 

 2,172,097 

 57,118 

 – 

 – 

 8,067,396 

 9,212,158 

 12,351,770 

 13,469,620 

 1,525,000 

 799,000 

 1,525,000 

 799,000 

 1,525,000 

 1,371,776 

 908,414 

 1,811,459 

 1,141,807 

 105,362 

 89,331 

 200,271 

 267,505 

43

45

16

35

26

24

27

35

25

41

26

35

27

34

27

34

26

35

27

34

0

0

0

0

15

8

13

13

11

4

3

6

7

3

6

3

7

3

7

3

6

3

7

3

0

0

0

0

1.  Represents total remuneration in the financial year.
2.  F Ford appointed as a director 10 October 2012.
3.  Dr RJ Edgar retired as a director 27 March 2012.
4.  GA Hounsell retired as a director on 8 October 2012.
5.  Dr JW Stocker retired as a director 1 December 2011.
6.  T Takasaki appointed as a director 6 December 2012.
7.  R Ooms left Nufarm on 29 February 2012.
8.  D Pullan retired from Nufarm 31 July 2013. Payments to Mr. Pullan comprised his entitlements and termination payment under the conditions of his employment contract.
9.  E Prado was appointed to the role of group executive manufacturing on 1 July 2013.

Note: KMP were granted increases in fixed remuneration and short term incentive potential of between three per cent and 10 per cent. Percentage increases reflected changes in the scope and 
responsibility of the role, individual performance and alignment to market comparators.

44 | Nufarm Limited Annual Report 2013

Remuneration of directors and executives

Details follow of the nature and amount of each major element of remuneration in respect of the non-executive directors and 

key management personnel, which includes the managing director and group executives. 

In AUD

Directors’ non-executive

AB Brennan 

GR Davis 

Dr RJ Edgar3

Dr WB Goodfellow

GA Hounsell 4

DG McGauchie

P Margin

Dr JW Stocker 5

F Ford 2

T Takasaki6

Sub total non-executive directors’ remuneration

Executive director DJ Rathbone (managing director)

Total directors’ remuneration

Group executives

DA Pullan8 (group executive operations)

P Binfield (chief financial officer)

BF Benson (group executive marketing)

G Hunt (group executive global marketing)

RG Reis (group executive corporate strategy and external affairs)

DA Mellody (group executive global marketing)

MJ Pointon (group executive innovation and development)

BJ Croft (group executive human resources and organisation development)

R Heath (company secretary)

RF Ooms7 (group executive chemicals)

E Prado9 (group executive manufacturing)

Sub total – total executives’ remuneration

Total directors’ and executives’ remuneration

1.  Represents total remuneration in the financial year.

2.  F Ford appointed as a director 10 October 2012.

3.  Dr RJ Edgar retired as a director 27 March 2012.

4.  GA Hounsell retired as a director on 8 October 2012.

5.  Dr JW Stocker retired as a director 1 December 2011.

6.  T Takasaki appointed as a director 6 December 2012.

7.  R Ooms left Nufarm on 29 February 2012.

fees

$

 151,500 

 128,864 

 170,750 

 135,025 

 – 

 84,833 

 139,125 

 121,364 

 30,625 

 155,114 

 330,000 

 295,000 

 162,500 

 110,310 

 40,455 

 134,625 

 88,788 

 – 

 – 

 – 

 1,207,913 

 1,070,965 

 1,522,303 

 1,451,451 

 2,730,216 

 2,522,416 

 778,558 

 702,458 

 639,588 

 449,875 

 682,937 

 624,858 

 587,303 

 270,310 

 610,707 

 542,504 

 498,339 

 475,262 

 346,351 

 298,261 

 324,974 

 285,629 

 281,498 

 245,157 

 604,812 

 55,078 

 – 

 – 

$

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 87,252 

 259,987 

 51,709 

 309,226 

 83,458 

 248,683 

 46,372 

 100,545 

 72,940 

 215,310 

 62,629 

 182,991 

 45,866 

 129,179 

 39,265 

 114,832 

 38,293 

 113,038 

 – 

 – 

 – 

 – 

 4,805,333 

 4,499,126 

 7,535,549 

 7,021,542 

 527,784 

 1,673,791 

 1,368,031 

 2,815,586 

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

$

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 37,638 

 22,030 

 14,160 

 – 

 43,511 

 22,829 

 35,219 

 31,612 

 35,416 

 35,468 

 33,519 

 32,746 

 38,096 

 13,293 

 – 

 – 

 – 

 – 

 232,209 

 163,328 

 279,381 

 214,836 

 840,247 

 1,141,795 

 840,247 

 1,141,795 

 47,172 

 51,508 

 47,172 

 51,508 

8.  D Pullan retired from Nufarm 31 July 2013. Payments to Mr. Pullan comprised his entitlements and termination payment under the conditions of his employment contract.

9.  E Prado was appointed to the role of group executive manufacturing on 1 July 2013.

Note: KMP were granted increases in fixed remuneration and short term incentive potential of between three per cent and 10 per cent. Percentage increases reflected changes in the scope and 

responsibility of the role, individual performance and alignment to market comparators.

Directors’ report continued

Salary and 

Cash bonus 

(vested)

Short term

Non- 

monetary 

benefits

Post-
employment

Share-based 
payments

Other 
long term

Total1

Total Superannuation
$

$

benefits Equity settled
$

$

Termination 

Total 
remuneration
$

$

Percentage of 
remuneration 
performance 
based
%

Value of options 
as a proportion 
of total 
remuneration
%

 151,500 
 128,864 
 170,750 
 135,025 
 – 
 84,833 
 139,125 
 121,364 
 30,625 
 155,114 
 330,000 
 295,000 
 162,500 
 110,310 
 – 
 40,455 
 134,625 
 – 
 88,788 
 – 
 1,207,913 
 1,070,965 
 2,409,722 
 2,644,754 
 3,617,635 
 3,715,719 

 865,810 
 962,445 
 691,297 
 759,101 
 804,033 
 895,571 
 647,835 
 370,855 
 727,158 
 780,643 
 596,187 
 689,865 
 427,633 
 462,908 
 397,758 
 400,461 
 352,537 
 396,291 
 – 
 618,105 
 55,078 
 – 
 5,565,326 
 6,336,245 
 9,182,961 
 10,051,964 

 13,772 
 12,886 
 15,522 
 13,482 
 – 
 8,483 
 12,647 
 12,136 
 2,784 
 14,511 
 30,000 
 29,500 
 14,772 
 11,031 
 – 
 4,045 
 12,238 
 – 
 8,071 
 – 
 109,806 
 106,074 
 22,341 
 24,102 
 132,147 
 130,176 

 30,828 
 45,854 
 23,606 
 13,311 
 23,725 
 48,800 
 22,917 
 16,667 
 24,000 
 34,646 
 24,150 
 24,300 
 24,000 
 46,791 
 25,833 
 47,917 
 24,833 
 45,890 
 – 
 28,992 
 2,040 
 – 
 225,932 
 353,168 
 358,079 
 483,344 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 799,000 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 1,525,000 
 – 
 – 
 799,000 
 1,525,000 
 799,000 
 1,525,000 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 439,683 
 233,393 
 439,683 
 233,393 

 210,500 
 145,844 
 175,934 
 102,024 
 201,346 
 139,504 
 162,636 
 96,166 
 175,405 
 120,784 
 150,335 
 103,432 
 109,715 
 72,830 
 93,820 
 64,418 
 92,085 
 63,412 
 – 
 – 
 – 
 – 
 1,371,776 
 908,414 
 1,811,459 
 1,141,807 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 94,909 
 178,174 
 94,909 
 178,174 

 – 
 17,400 
 – 
 – 
 25,364 
 19,671 
 – 
 – 
 29,644 
 20,455 
 17,265 
 13,969 
 15,080 
 8,520 
 – 
 – 
 18,009 
 9,316 
 – 
 – 
 – 
 – 
 105,362 
 89,331 
 200,271 
 267,505 

 165,272 
 141,750 
 186,272 
 148,507 
 – 
 93,316 
 151,772 
 133,500 
 33,409 
 169,625 
 360,000 
 324,500 
 177,272 
 121,341 
 – 
 44,500 
 146,863 
 – 
 96,859 
 – 
 1,317,719 
 1,177,039 
 2,966,655 
 3,080,423 
 4,284,374 
 4,257,462 

 1,906,138 
 1,171,543 
 890,837 
 874,436 
 1,054,468 
 1,103,546 
 833,388 
 483,688 
 956,207 
 956,528 
 787,937 
 831,566 
 576,428 
 591,049 
 517,411 
 512,796 
 487,464 
 514,909 
 – 
 2,172,097 
 57,118 
 – 
 8,067,396 
 9,212,158 
 12,351,770 
 13,469,620 

43
45

16
35
26
24
27
35
25
41
26
35
27
34
27
34
26
35
27
34
0
0
0
0

15
8

4
3
13
6
7
3
13
11
6
3
7
3
7
3
6
3
7
3
0
0
0
0

Nufarm Limited Annual Report 2013 | 45

Directors’ report continued

Remuneration options: granted and vested during the year
During the year 350,239 (2012: 465,677) performance rights were granted to executives under the LTIP. No options vested or were 
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.

This report has been made in accordance with a resolution of directors.

DG McGauchie
Director

DJ Rathbone
Director

Melbourne
25 September 2013

46 | Nufarm Limited Annual Report 2013

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 2013 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

BW Szentirmay
Partner

Melbourne
25 September 2013

KPMG, an Australian partnership and a member 
firm of the KPMG network of independent member 
firms affiliated with KPMG International Cooperative 
(KPMG International), a Swiss entity.

Liability limited by a scheme approved 
under Professional Standards Legislation.

Nufarm Limited Annual Report 2013 | 47

Income statement 
For the year ended 31 July 2013

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/(losses) of equity accounted investees
Operating profit

Financial income excluding foreign exchange gains/(losses)(a)
Net foreign exchange gains/(losses)(a)
Net financing income
Financial expenses(a)
Net financing costs 

Profit/(loss) before income tax

Income tax benefit/(expense)

Consolidated

2013
$000

2012
$000

Note

 2,277,292 
 (1,653,991)
 623,301 

 2,181,551 
 (1,570,657)
 610,894 

 20,677 
 (269,582)
 (148,012)
 (42,698)
 (60)
 183,626 

 5,491 
 (10,734)
 (5,243)
 (65,460)
 (70,703)

 10,124 
 (240,543)
 (198,007)
 (37,874)
 378 
 144,972 

 7,910 
 19,237 
 27,147 
 (61,796)
 (34,649)

7

19

10
10

10

 112,923 

 110,323 

11

 (31,173)

 (37,501)

Profit/(loss) for the period from continuing operations

 81,750 

 72,822 

Attributable to:
Equity holders of the company
Non-controlling interest

Profit/(loss) for the period

Earnings per share
Basic earnings/(loss) per share
Diluted earnings/(loss) per share

The income statement is to be read in conjunction with the attached notes.
(a) Comparative amounts have been reclassifed to align with current classification. Refer to note 2(e) for details.

 80,999 
 751 

 72,594 
 228 

 81,750 

 72,822 

30
30

 25.5 
 25.4 

 22.3 
 22.3 

48 | Nufarm Limited Annual Report 2013

Statement of comprehensive income 
For the year ended 31 July 2013

Profit/(loss) for the period

Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Foreign exchange translation differences for foreign operations
Effective portion of changes in fair value of cash flow hedges
Effective portion of changes in fair value of net investment hedges

Items that will not be reclassified to profit or loss:
Actuarial gains/(losses) on defined benefit plans
Income tax on share-based payment transactions

Note

Consolidated

2013
$000
 81,750 

2012
$000
 72,822 

 166,767 
 (3,625)
 (23,071)

 (135,859)
 – 
 – 

 (683)
 252 

 (5,494)
 93 

Other comprehensive profit/(loss) for the period, net of income tax

 139,640 

 (141,260)

Total comprehensive profit/(loss) for the period

 221,390 

 (68,438)

Attributable to:
Equity holders of the company
Non-controlling interest

Total comprehensive profit/(loss) for the period

The amounts recognised directly in equity are disclosed net of tax.

The statement of comprehensive income is to be read in conjunction with the attached notes.

 220,639 
 751 

 (68,666)
 228 

 221,390 

 (68,438)

Nufarm Limited Annual Report 2013 | 49

Balance sheet 
As at 31 July 2013

Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax assets
Assets held for sale
Total current assets

Non-current assets
Trade and other receivables
Investments in equity accounted investees
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
Non-controlling interest
TOTAL EQUITY

The balance sheet is to be read in conjunction with the attached notes.

50 | Nufarm Limited Annual Report 2013

 Consolidated

2013
$000

2012
$000

Note

15
16
17
18
13

16
19
20
18
22
23
21

15
24
25
26
18
28

24
25
18
26

 264,972 
 758,534 
 802,789 
 33,866 
 – 
 1,860,161 

 191,317 
 730,496 
 515,254 
 37,664 
 – 
 1,474,731 

 36,191 
 6,197 
 448 
 200,219 
 402,698 
 865,755 
 – 
 1,511,508 
 3,371,669 

 41,095 
 4,126 
 6,213 
 181,633 
 370,780 
 722,690 
 – 
 1,326,537 
 2,801,268 

 – 
 550,319 
 316,365 
 19,783 
 16,677 
 3,279 
 906,423 

 – 
 474,991 
 292,323 
 18,167 
 14,834 
 6,742 
 807,057 

 48,871 
 581,720 
 119,691 
 50,219 
 800,501 
 1,706,924 
 1,664,745 

 10,246 
 366,798 
 95,823 
 44,542 
 517,409 
 1,324,466 
 1,476,802 

 1,063,992 
 (198,670)
 547,302 
 1,412,624 
 246,932 
 5,189 
 1,664,745 

 1,059,522 
 (326,915)
 496,663 
 1,229,270 
 246,932 
 600 
 1,476,802 

Statement of cash flows 
For the year ended 31 July 2013

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
Class action settlement
Net cash from operating activities

Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Proceeds from sales 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

Net investing cash flows

Cash flows from financing activities
Debt establishment transaction costs
Proceeds from borrowings 
Repayment of borrowings 
Distribution to Nufarm step-up security holders
Dividends paid
Net financing cash flows

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

The statement of cash flows is to be read in conjunction with the attached notes.

 Consolidated

2013
$000

2012
$000

Note

 2,464,521 
 (2,296,316)
 168,205 
 5,491 
 73 
 (49,958)
 (14,347)
 (46,677)
 62,787 

 2,163,049 
 (1,927,654)
 235,395 
 7,910 
 151 
 (48,824)
 (28,127)
 – 
 166,505 

38

 1,036 
 12,630 
 (44,229)
 – 
 (30,706)
 (51,874)

 591 
 4,915 
 (47,569)
 – 
 (53,914)
 (34,320)

 (113,143)

 (130,297)

 (16,569)
 1,244,168 
 (1,094,345)
 (19,275)
 (14,727)
 99,252 

 48,896 
 191,317 
 24,759 
 264,972 

 (26,960)
 832,466 
 (863,406)
 (19,082)
 (7,614)
 (84,596)

 (48,388)
 246,825 
 (7,120)
 191,317 

15

Nufarm Limited Annual Report 2013 | 51

Statement of changes in equity 
For the year ended 31 July 2013

Consolidated

Balance at 1 August 2011

Profit/(loss) for the period

Other comprehensive income

Actuarial gains/(losses) on defined benefit plans

Foreign exchange translation differences

Gains/(losses) on cash flow hedges taken to equity

Gains/(losses) on net investment hedges taken to equity

Income tax on share-based payment transactions

Total comprehensive income/(loss) for the period

Transactions with owners, recorded directly in equity

Accrued employee share award entitlement

Issuance of shares under employee share plans

Dividends paid to shareholders

Dividend reinvestment plan

Distributions to Nufarm step-up security holders

Acquisition of non-controlling interest 

Balance at 31 July 2012

Balance at 1 August 2012

Profit/(loss) for the period
Other comprehensive income
Actuarial gains/(losses) on defined benefit plans
Foreign exchange translation differences
Gains/(losses) on cash flow hedges taken to equity
Gains/(losses) on net investment hedges taken to equity
Income tax on share-based payment transactions
Total comprehensive income/(loss) for the period

Transactions with owners, recorded directly in equity
Accrued employee share award entitlement
Issuance of shares under employee share plans
Dividends paid to shareholders
Dividend reinvestment plan
Distributions to Nufarm step-up security holders
Acquisition of non-controlling interest 

Share
capital
$000

Translation
reserve
$000

Capital profit
reserve
$000

 1,058,151 

 (227,551)

 33,627 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 768 

 – 

 603 

 – 

 – 

 – 

 – 

 (135,859)

 – 

 – 

 – 

 (135,859)

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 1,059,522 

 (363,410)

 33,627 

 2,868 

 496,663 

 1,229,270 

 246,932 

 1,059,522 

 (363,410)

 33,627 

 2,868 

 496,663 

 1,229,270 

 246,932 

 – 

 – 
 – 
 – 
 – 
 – 
 – 

 – 

 – 
 166,767 
 – 
 – 
 – 
 166,767 

 – 
 3,494 
 – 
 976 
 – 
 – 

 – 
 – 
 – 
 – 
 – 
 – 

 – 

 – 
 – 
 – 
 – 
 – 
 – 

 – 
 – 
 – 
 – 
 – 
 – 

 67,100 

 (68,666)

 228 

 (68,438)

Other

reserve

$000

 714 

Retained

earnings

$000

 451,472 

Total

$000

 1,316,413 

Nufarm 

step-up 

securities

$000

 246,932 

Non-controlling

interest

$000

Total

equity

$000

 773 

 1,564,118 

 72,594 

 72,594 

 228 

 72,822 

 2,829 

 (768)

 – 

 – 

 – 

 – 

 – 

 93 

 93 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 (3,625)

 (23,071)

 252 

 (26,444)

 4,528 

 (3,494)

 – 

 – 

 – 

 (13,112)

 (5,494)

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 (7,865)

 (14,044)

 (683)

 80,316 

 (15,703)

 (13,974)

 (5,494)

 (135,859)

 – 

 – 

 93 

 2,829 

 – 

 (7,865)

 603 

 (14,044)

 – 

 (683)

 166,767 

 (3,625)

 (23,071)

 252 

 220,639 

 4,528 

 – 

 (15,703)

 976 

 (13,974)

 (13,112)

 80,999 

 80,999 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 (351)

 (50)

 600 

 600 

 751 

 751 

 3,838 

 (5,494)

 (135,859)

 – 

 – 

 93 

 2,829 

 – 

 (8,216)

 603 

 (14,044)

 (50)

 1,476,802 

 1,476,802 

 81,750 

 (683)

 166,767 

 (3,625)

 (23,071)

 252 

 221,390 

 4,528 

 – 

 (15,703)

 976 

 (13,974)

 (9,274)

Balance at 31 July 2013

 1,063,992 

 (196,643)

 33,627 

 (35,654)

 547,302 

 1,412,624 

 246,932 

 5,189 

 1,664,745 

The statement of changes in equity is to be read in conjunction with the attached notes.

52 | Nufarm Limited Annual Report 2013

Statement of changes in equity continued 
For the year ended 31 July 2013

Translation

Capital profit

Share

capital

$000

reserve

$000

reserve

$000

 33,627 

 1,058,151 

 (227,551)

Other
reserve
$000

 714 

Retained
earnings
$000

 451,472 

Total
$000

 1,316,413 

Nufarm 
step-up 
securities
$000

 246,932 

Non-controlling
interest
$000

Total
equity
$000

 773 

 1,564,118 

 – 

 – 

 – 

 – 

 – 

 93 

 93 

 2,829 

 (768)

 – 

 – 

 – 

 – 

 72,594 

 72,594 

 (5,494)

 – 

 – 

 – 

 – 

 (5,494)

 (135,859)

 – 

 – 

 93 

 67,100 

 (68,666)

 – 

 – 

 (7,865)

 – 

 (14,044)

 – 

 2,829 

 – 

 (7,865)

 603 

 (14,044)

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 228 

 72,822 

 – 

 – 

 – 

 – 

 – 

 (5,494)

 (135,859)

 – 

 – 

 93 

 228 

 (68,438)

 – 

 – 

 (351)

 – 

 – 

 (50)

 2,829 

 – 

 (8,216)

 603 

 (14,044)

 (50)

 1,059,522 

 (363,410)

 33,627 

 2,868 

 496,663 

 1,229,270 

 246,932 

 600 

 1,476,802 

 1,059,522 

 (363,410)

 33,627 

 2,868 

 496,663 

 1,229,270 

 246,932 

 – 

 80,999 

 80,999 

 – 
 – 
 (3,625)
 (23,071)
 252 
 (26,444)

 4,528 
 (3,494)
 – 
 – 
 – 
 (13,112)

 (683)
 – 
 – 
 – 
 – 
 80,316 

 – 
 – 
 (15,703)
 – 
 (13,974)
 – 

 (683)
 166,767 
 (3,625)
 (23,071)
 252 
 220,639 

 4,528 
 – 
 (15,703)
 976 
 (13,974)
 (13,112)

 – 

 – 
 – 
 – 
 – 
 – 
 – 

 – 
 – 
 – 
 – 
 – 
 – 

 600 

 751 

 – 
 – 
 – 
 – 
 – 
 751 

 – 
 – 
 – 
 – 
 – 
 3,838 

 1,476,802 

 81,750 

 (683)
 166,767 
 (3,625)
 (23,071)
 252 
 221,390 

 4,528 
 – 
 (15,703)
 976 
 (13,974)
 (9,274)

Consolidated

Balance at 1 August 2011

Profit/(loss) for the period

Other comprehensive income

Actuarial gains/(losses) on defined benefit plans

Foreign exchange translation differences

Gains/(losses) on cash flow hedges taken to equity

Gains/(losses) on net investment hedges taken to equity

Income tax on share-based payment transactions

Total comprehensive income/(loss) for the period

Transactions with owners, recorded directly in equity

Accrued employee share award entitlement

Issuance of shares under employee share plans

Dividends paid to shareholders

Dividend reinvestment plan

Distributions to Nufarm step-up security holders

Acquisition of non-controlling interest 

Balance at 31 July 2012

Balance at 1 August 2012

Profit/(loss) for the period

Other comprehensive income

Actuarial gains/(losses) on defined benefit plans

Foreign exchange translation differences

Gains/(losses) on cash flow hedges taken to equity

Gains/(losses) on net investment hedges taken to equity

Income tax on share-based payment transactions

Total comprehensive income/(loss) for the period

Transactions with owners, recorded directly in equity

Accrued employee share award entitlement

Issuance of shares under employee share plans

Dividends paid to shareholders

Dividend reinvestment plan

Distributions to Nufarm step-up security holders

Acquisition of non-controlling interest 

 768 

 603 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 3,494 

 976 

 (135,859)

 (135,859)

 166,767 

 166,767 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

Balance at 31 July 2013

 1,063,992 

 (196,643)

 33,627 

 (35,654)

 547,302 

 1,412,624 

 246,932 

 5,189 

 1,664,745 

The statement of changes in equity is to be read in conjunction with the attached notes.

Nufarm Limited Annual Report 2013 | 53

Notes to the financial statements

1. Reporting entity
Nufarm Limited (the ‘company’) is a company limited by shares and domiciled in Australia that is listed on the Australian Securities 
Exchange. 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 2013 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 a for-profit entity and 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, and seed treatment products. 

2. Basis of preparation
(a) Statement of compliance
The consolidated financial statements are general purpose financial statements which have been prepared in accordance with 
Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations 
Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRSs) adopted by 
the International Accounting Standards Board (IASB). 

The consolidated financial statements were authorised for issue by the board of directors on 25 September 2013.

(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. 

The group’s financial report has been prepared on the going concern basis, which assumes the realisation of assets and 
extinguishment of liabilities in the ordinary course of business. The going concern basis is considered appropriate by the directors 
having regard to the group’s access to appropriate lines of credit to support the group’s working capital and general corporate 
financing requirements through its three year $406 million syndicated bank facility, entered into in November 2011, a debtors' 
securitisation facility, entered into in August 2011, and the completion of a US$325 million senior unsecured notes offering in 
October 2012. 

(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 in conformity with AASBs 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 estimates are 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 or at each reporting 
date if required. 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 assumptions 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. Other non-current assets are also assessed for impairment indicators.

54 | Nufarm Limited Annual Report 2013

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. The assessment of probability 
involves estimation of a number of factors including future taxable income. 

(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 less costs to sell at the time the product is expected to be sold. 

(vi) Capitalised development costs 
Development expenditures are recognised as an intangible asset when the group judges and is able to demonstrate: 

(a) the technical feasibility of completing the intangible asset so that it will be available for use; 

(b) intention to complete; 

(c) ability to use the asset; and 

(d) how the asset will generate future economic benefits and the ability to measure reliably the expenditure during development. 

(e) Reclassification 
Net foreign exchange gains/losses on proceeds from Nufarm step-up securities financing (2012: gain $11.505 million) are 
now classified within net foreign exchange gains/losses, having previously been disclosed separately on the face of the income 
statement as part of net financing costs.

Comparatives have been adjusted to present them on the same basis as current period figures. 

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. 

(a) Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which 
control is transferred to the group. Control is the power to govern the financial and operating policies of an entity so as to obtain 
benefits from its activities. In assessing control, the group takes into consideration potential voting rights that currently are 
exercisable. 

Acquisitions on or after 1 July 2009 
For acquisitions on or after 1 July 2009, the group measures goodwill at the acquisition date as: 

•  the fair value of the consideration transferred; plus 

•  the recognised amount of any non-controlling interests in the acquiree; plus if the business combination 

is achieved in stages, the fair value of the existing equity interest in the acquiree; less

•  the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. 

Nufarm Limited Annual Report 2013 | 55

 
Notes to the financial statements continued

3. Significant accounting policies (continued)
(a) Basis of consolidation (continued)
Acquisitions on or after 1 July 2009 (continued)
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are 
generally recognised in profit or loss. 

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the group incurs in 
connection with a business combination are expensed as incurred. 

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified 
as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the 
contingent consideration are recognised in profit or loss.

Acquisitions between 1 July 2004 and 1 July 2009 
For acquisitions between 1 July 2004 and 1 July 2009, goodwill represents the excess of the cost of the acquisition over the group’s 
interest in the recognised amount (generally fair value) of the identifiable assets, liabilities and contingent liabilities of the acquiree. 
When the excess was negative, a bargain purchase gain was recognised immediately in profit and loss.

Transaction costs, other than those associated with the issue of debt or equity securities, that the group incurred in connection 
with business combinations were capitalised as part of the cost of the acquisition.

Acquisitions prior to 1 July 2004 (date of transition to IFRSs)
As part of its transition to IFRSs, the group elected to restate only those business combinations that occurred on or after 1 July 
2003. In respect of acquisitions prior to 1 July 2003, goodwill represents the amount recognised under the group’s previous 
accounting framework, Australian GAAP.

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore 
no goodwill is recognised as a result of such transactions. The adjustments to non-controlling interests are based on a 
proportionate amount of the net assets of the subsidiary. 

(ii) Subsidiaries 
Subsidiaries are entities controlled by the group. 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 where necessary to align them with the policies adopted by the group. 
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so 
causes the non-controlling interests to have a deficit balance.

(iii) Investments in equity accounted investees 
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.

Investments in associates and jointly controlled entities are accounted for using the equity method 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, including any long term 
investments, 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. 

56 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

3. Significant accounting policies (continued)
(a) Basis of consolidation (continued) 
(iv) Transactions eliminated on consolidation
Intra-group balances and transactions, 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.

(b) Foreign currency
(i) 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. Non-monetary 
items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of 
the transaction. Foreign currency gains and losses are included in net financing costs as they are mostly derived from financing 
arrangements.

The group has on issue a hybrid security called Nufarm step-up securities (NSS). Proceeds from the NSS (note 29) have been 
utilised to provide funding throughout the group. This creates a foreign currency exposure when the funding currency denomination 
differs from the respective entity’s functional currency. 

(ii) 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.

Foreign currency differences are recognised in other comprehensive income. Since 1 August 2004, the group’s date of transition 
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 the FCTR is transferred to profit or loss as part of the profit or loss on disposal. 

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the 
foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net 
investment in a foreign operation and are recognised in other comprehensive income, and are presented within equity in the FCTR.

(c) Financial instruments 
(i) Non-derivative financial assets 
The group initially recognises loans and receivables on the date that they are originated. All other financial assets (including assets 
designated at fair value through profit or loss) are recognised initially on the trade date at which the group becomes a party to the 
contractual provisions of the instrument.

The group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the 
rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risk and rewards 
of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the 
group is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when, the group has the 
legal right to offset the amounts and intends to settle on a net basis or to realise the asset and settle the liability simultaneously.

The group has the following non-derivative financial assets: financial assets at fair value through profit or loss, loans and 
receivables and available-for-sale financial assets.

Nufarm Limited Annual Report 2013 | 57

Notes to the financial statements continued

3. Significant accounting policies (continued)
(c) Financial instruments (continued) 
(i) Non-derivative financial assets (continued) 
Financial assets at fair value through profit or loss
A financial asset is classified as at fair value through profit or loss if it is classified as held for trading or is designated as such 
upon initial recognition. Financial assets are designated at fair value through profit or loss if the group manages such investments 
and makes purchase 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 assets at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss. 

Financial assets designated at fair value through profit or loss comprise equity securities that otherwise would have been classified 
as available-for-sale. 

Loans and receivables 
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such 
assets are recognised initially at fair value plus any direct attributable transaction costs. Subsequent to initial recognition loans 
and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Loans and 
receivables comprise trade and other receivables.

Cash and cash equivalents 
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. 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 purposes of the statement of cash flows.

Available-for-sale financial assets 
Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified 
as another category of financial asset. Available-for-sale financial assets are recognised initiallly at fair value plus any directly 
attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and any changes other than 
impairment losses are recognised in other comprehensive income and presented in the fair value reserve in equity. When an 
investment is derecognised, the cumulative gain or loss in equity is reclassified to profit or loss. 

(ii) Non-derivative financial liabilities
The group initially recognises debt securities and subordinated liabilities on the date they are originated. All other financial 
liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date at which 
the group becomes a party to the contractual provisions of the instrument. The group derecognises a financial liability when 
its contractual obligations are discharged or cancelled or expired. Financial assets and liabilities are offset and the net amount 
presented in the balance sheet when, and only when, the group has the legal right to offset the amounts and intends to settle 
on a net basis or to realise the asset and settle the liability simultaneously.

The group has the following non-derivative financial liabilities: loans and borrowings, bank overdrafts and trade and other payables. 
Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial 
recognition these financial liabilities are measured at amortised cost using the effective interest rate method. 

(iii) 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 NSS are classified as equity instruments but as non-controlling interests as they are issued by a subsidiary. 
After-tax distributions thereon are recognised as distributions within equity. Further details can be found in note 29.

58 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

3. Significant accounting policies (continued)
(c) Financial instruments (continued)
(iv) Derivative financial instruments, including hedge accounting
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured 
to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether 
the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The group designates certain 
derivatives as either: 

•  hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges); 

•  hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable forecast 

transactions (cash flow hedges); or

•  hedges of a net investment in a foreign operation (net investment hedges). 

The group documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, 
as well as its risk management objective and strategy for undertaking various hedge transactions. The group also documents its 
assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions 
have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.

The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the 
hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged 
item is less than 12 months. Trading derivatives are classified as a current asset or liability.

Fair value hedge 
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in profit or loss, together 
with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The gain or loss relating 
to the effective portion of interest rate swaps hedging fixed rate borrowings is recognised in profit or loss within finance costs, 
together with changes in the fair value of the hedged fixed rate borrowings attributable to interest rate risk. The gain or loss 
relating to the ineffective portion is recognised in profit or loss within other income or other expenses.

If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the 
effective interest method is used is amortised to profit or loss over the period to maturity using a recalculated effective interest rate.

Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in 
other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognised 
immediately in profit or loss within other income or other expense. 

Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for 
instance when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of interest rate swaps 
hedging variable rate borrowings is recognised in profit or loss within ‘finance costs’. The gain or loss relating to the effective 
portion of forward foreign exchange contracts hedging export sales is recognised in profit or loss within ‘sales’. However, when 
the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory or fixed assets) 
the gains and losses previously deferred in equity are reclassified from equity and included in the initial measurement of the cost 
of the asset. The deferred amounts are ultimately recognised in profit or loss as cost of goods sold in the case of inventory, or as 
depreciation or impairment in the case of fixed assets. 

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, 
any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is 
ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss 
that was reported in equity is immediately reclassified to profit or loss.

Nufarm Limited Annual Report 2013 | 59

Notes to the financial statements continued

3. Significant accounting policies (continued)
(c) Financial instruments (continued)
(iv) Derivative financial instruments, including hedge accounting (continued)
Net investment hedges 
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges.

Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive 
income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognised immediately in 
profit or loss within other income or other expenses.

Gains and losses accumulated in equity are reclassified to profit or loss when the foreign operation is partially disposed of or sold. 

Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does 
not qualify for hedge accounting are recognised immediately in profit or loss and are included in other income or other expenses. 

(d) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.

Cost includes expenditure that is 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, and capitalised borrowing 
costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

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 in general and administrative expenses.

(ii) 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.

(iii) Depreciation 
Depreciation is calculated over the depreciable amount, which is the cost of an asset, less its residual value. 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, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the 
asset. Leased 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. 

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. 

60 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

3. Significant accounting policies (continued)
(e) Intangible assets
(i) Goodwill
Goodwill that arises upon the acquisition of business combinations is included in intangible assets. Subsequent to initial 
recognition, goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the 
carrying amount of goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment 
is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity accounted investee.

(ii) 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 and capitalised borrowing costs. Development expenditure that does 
not meet the above criteria is recognised in profit or loss as incurred.

Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment losses.

(iii) 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. 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.

(iv) 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 accumulated impairment losses. 

(v) 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.

(vi) Amortisation
Amortisation is calculated over the cost of the asset, less its residual value. With the exception of goodwill, intangibles with a finite 
life are amortised on a straight-line basis in profit and loss over the estimated useful lives of the intangible assets from the date 
that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits 
embodied in the asset. The estimated useful life for intangible assets with a finite life, in the current and comparative periods, are 
as follows:

•  capitalised development costs 

5 –10 years 

•  intellectual property – finite life 

over the useful life in accordance with the acquisition agreement terms 

•  computer software 

3–7 years

Amortisation methods, useful lives and residual values are reassessed at each reporting date. 

(f) Leased assets 
Leases where 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 in the group’s balance sheet.

Nufarm Limited Annual Report 2013 | 61

Notes to the financial statements continued

3. Significant accounting policies (continued)
(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.

(h) Impairment 
(i) Non-derivative financial assets
A financial asset, not carried at fair value through profit or loss, is assessed at each reporting date to determine whether there is 
any objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred 
after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that 
asset that can be estimated reliably.

Objective evidence of impairment includes default or delinquency by a debtor, indications that a debtor will enter bankruptcy, 
and, in the case of an investment in an equity security, a significant or prolonged decline in its fair value.

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.

An impairment loss on an available-for-sale financial asset is recognised by reclassifying the losses accumulated in the fair value 
reserve in equity to profit and loss. The cumulative loss that is reclassified from equity to profit and loss is the difference between the 
acquisition cost and the current fair value less any impairment loss previously recognised in profit and loss. If, in a subsequent period, 
the fair value of an impaired available-for-sale financial asset increases and the increase relates to an event occurring after the 
impairment loss was recognised then the impairment loss is reversed, with the amount of the reversal recognised in profit and loss.

(ii) 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, then 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 inflows from continuing use that are 
largely independent of the cash inflows of other assets or groups of assets (the ‘cash-generating unit’). 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 estimated 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.

Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately, and therefore is not 
tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a single 
asset when there is objective evidence that the investment in an associate may be impaired.

62 | Nufarm Limited Annual Report 2013

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 costs 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.

Intangible assets and property, plant and equipment once classified as held for sale or distribution are not amortised or 
depreciated. In addition, equity accounting of equity accounted investees ceases once classified as held for sale or distribution.

(j) Employee benefits 
(i) 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 employee benefit expense in profit or loss in the periods during which services are rendered by employees. 
Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

(ii) 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 plan. In order to calculate the present value of economic benefits, consideration is 
given to any minimum funding requirements that may apply to any plan in the group. 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 other comprehensive income.

The group recognises gains and losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement 
occurs. The gain or loss on curtailment comprises any resulting change in the fair value of plan assets, change in the present value 
of defined obligation and any related actuarial gains and losses and past service cost that had not previously been recognised.

(iii) 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 future 
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.

Nufarm Limited Annual Report 2013 | 63

Notes to the financial statements continued

3. Significant accounting policies (continued)
(j) Employee benefits (continued)
(iv) 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. If benefits are payable more than 12 months after the reporting 
period, then they are discounted to their present value. 

(v) 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.

(vi) 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.

The group has a short term incentive plan (STI) available to key executives, senior managers and other managers globally. 
A pre-determined percentage of the STI is paid in cash with the remainder deferred into shares which have either a one or 
two year vesting period. The cash portion is recognised immediately as an expense at the time of performance testing. The 
expense relating to deferred shares is expensed over the vesting period. Refer to note 27 for further details on this plan. 

The group has a long term incentive plan (LTIP) which is available to key executives and certain selected senior managers. 
Peformance rights have been granted to acquire ordinary shares in the company subject to the achievement of global performance 
hurdles. The expense in relation to the LTIP is recognised over the vesting period of three years. Refer note 27 for further details on 
this plan.

(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. The unwinding of the discount is recognised as a finance cost.

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 losses are not provided for.

(l) Revenue 
(i) 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 persuasive evidence of an arrangement exists, usually in the form of 
an executed sales agreement, that 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. If it is probable that discounts will 
be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are 
recognised.

(ii) Dividend income
Dividend income is recognised when the right to receive the payment is established. This is generally at the point the dividend 
has been formally declared. 

64 | Nufarm Limited Annual Report 2013

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.

Determining whether an arrangement contains a lease
At the inception of an arrangement, the group determines whether such an arrangement is or contains a lease. A specific asset is 
the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the 
right to use the asset if the arrangement conveys to the group the right to control the use of the underlying asset. At inception or 
upon reassessment of the arrangement, the group separates payments and other consideration required by such an arrangement 
into those for the lease and those for other elements on the basis of their relative fair values. If the group concludes for a finance 
lease that it is impracticable to separate the payments reliably, an asset and liability are recognised at an amount equal to the fair 
value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the 
liability is recognised using the group’s incremental borrowing rate.

(n) Finance income and finance costs
Finance income comprises interest income on funds invested, 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.

Finance costs comprise interest expense on borrowings, transaction costs, unwinding of the discount on provisions, changes 
in the fair value of financial assets classified as 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. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset 
are recognised in profit or loss using the effective interest rate method. 

(o) Income tax 
Income tax expense comprises current and deferred tax. Current and deferred taxes are recognised in profit or loss except 
to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or 
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised in respect of 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 or loss, 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 for unused tax losses, tax credits and deductible temporary differences, to the extent that 
it is probable that future taxable profits will be available against which they 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.

Additional income taxes that arise from the distribution of cash dividends are recognised at the same time as the liability 
to pay the related dividend is recognised. The group does not distribute non-cash assets as dividends to its shareholders. 

Nufarm Limited Annual Report 2013 | 65

Notes to the financial statements continued

3 Significant accounting policies (continued)
(o) Income tax (continued)
(i) 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. 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 (refer below). Any difference 
between these amounts is recognised by the company as an equity contribution amounts 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.

(ii) 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.

(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) 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.

66 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

3 Significant accounting policies (continued)
(r) Segment reporting
Determination and presentation of operating segments
An operating segment is a component of the group that engages in business activities from which it may earn revenues and incur 
expenses, including revenues and expenses that relate to transactions with any of the group’s other components. All operating 
segments’ results are reviewed regularly by the group’s chief executive to make decisions about resources to be allocated to the 
segment and to assess its performance.

Segment results that are reported to the chief executive 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.

(s) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 
1 August 2012, and have not been applied in preparing these consolidated financial statements. Those which may be relevant 
to the group are set out below. The group does not plan to adopt these standards early.

(i) AASB 9 Financial Instruments (2010), AASB 9 Financial Instruments (2009)
AASB 9 (2009) introduces new requirements for the classification and measurement of financial assets. Under AASB 9 (2009), 
financial assets are classified and measured based on the business model in which they are held and the characteristics of their 
contractual cash flows. AASB 9 (2010) introduces additions relating to financial liabilities. The IASB currently has an active project 
that may result in limited amendments to the classification and measurement requirements of AASB 9 and add new requirements 
to address the impairment of financial assets and hedge accounting.

AASB 9 (2010 and 2009) are effective for annual periods beginning on or after 1 January 2015 with early adoption permitted. 
The extent of the impact upon adoption of these standards has not been determined.

(ii) AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in Other Entities (2011)
AASB 10 introduces a single control model to determine whether an investee should be consolidated. As a result, the group may 
need to change its consolidation conclusion in respect of its investees, which may lead to changes in the current accounting for 
these investees.

Under AASB 11, the structure of the joint arrangement, although still an important consideration, is no longer the main factor in 
determining the type of joint arrangement and therefore the subsequent accounting:

•  the group’s interest in a joint operation, which is an arrangement in which the parties have rights to the assets and obligations 

for the liabilities, will be accounted for on the basis of the group’s interest in those assets and liabilities; and

•   the group’s interest in a joint venture, which is an arrangement in which the parties have rights to the net assets, 

will be equity accounted.

The group may need to reclassify its joint arrangements, which may lead to changes in current accounting for these interests.

AASB 12 brings together into a single standard all the disclosure requirements about an entity’s interests in subsidiaries, joint 
arrangements, associates and unconsolidated structured entities. The group is currently assessing the disclosure requirements for 
interests in subsidiaries, interests in joint arrangements and associates and unconsolidated structured entities in comparison with 
the existing disclosures. AASB 12 requires the disclosure of information about the nature, risks and financial effects of these interests.

These standards are effective for annual periods beginning on or after 1 January 2013 with early adoption permitted. The extent 
of the impact upon adoption of these standards has not been determined.

Nufarm Limited Annual Report 2013 | 67

Notes to the financial statements continued

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, and willingly. The market value of items of plant, equipment, fixtures and fittings is based on the market 
approach and cost approaches quoted market prices for similar items when available and replacement cost when appropriate.

(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.

(iii) Inventories
The fair value of inventories 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 inventories.

(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. This fair value is determined for disclosure purposes.

(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 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.

68 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

4. Determination of fair values (continued)
(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.

(vii) Share-based payment transactions
The fair value of the performance rights issued under the Nufarm long term incentive plan have been measured using Monte Carlo 
Simulation and the Binomial Tree. The fair value of the deferred shares granted to participants under the Nufarm Short Term 
Incentive will be measured using the volume weighted average price for the five day period subsequent to year end results 
announcement. Measurement inputs include the share price on the measurement date, the exercise price of the instrument, 
expected volatility, expected term of the instruments, dividends, and the risk-free rate (based on government bonds).

5. Operating segments
Segment information is presented in respect of the group’s key operating segments. The operating segments are based 
on the group’s management and internal reporting structure.

Operating segments 
The group operates predominantly along two business lines, being crop protection and seed technologies.

The crop protection business deals in the manufacture and sale of crop protection products used by farmers to protect 
crops from damage caused by weeds, pests and disease. It is managed by major geographic segments, being Australia and 
New Zealand, Asia, Europe, North America and South America. The North America region includes Canada, US, Mexico and 
the Central American countries. The South America region includes Brazil, Argentina, Chile, Uruguay, Paraguay, Bolivia, 
Columbia and the Andean countries.

The seed technologies business deals in the sale of seeds and seed treatment products. The seed technologies business is 
managed on a worldwide basis.

Information regarding the results of each operating segment is included below. Performance is measured based on underlying 
EBIT as included in the internal management reports that are reviewed by the group’s chief executive. Underlying EBIT is used 
to measure performance as management believes that such information is the most relevant in evaluating the results of each 
segment. Segment revenue is based on the geographic location of customers. Segment results include items directly attributable 
to a segment as well as those that can be allocated on a reasonable basis. The corporate segment comprises mainly corporate 
expenses, interest-bearing loans, borrowings and corporate assets.

Nufarm Limited Annual Report 2013 | 69

Notes to the financial statements continued

5. Operating segments (continued)

Operating 
segments 
2013
Revenue
Total segment revenue

Results
Underlying EBITDA (a)

Crop protection

technologies Corporate

Group

Australia and  
New Zealand 
$000

Asia 
$000

Europe 
$000

North 
America 
$000

South 
America 
$000

Total 
$000

Global 
$000

$000

Total 
$000

Seed 

 604,432  125,201   468,253 

 516,278 

 431,440   2,145,604 

 131,688 

 –  2,277,292 

 57,765 

 23,640 

 84,023 

 55,366 

 43,482 

 264,276 

 36,024 

 (39,511)

 260,789 

Depreciation and 
amortisation excluding 
material items
Underlying EBIT(a)

Material items 
included in operating 
profit (refer note 6)
Material items included 
in net financing costs 
(refer note 6)
Net financing costs 
(excluding material 
items)
Profit/(loss) before tax

Assets
Segment assets
Investment in associates
Total assets

Liabilities
Segment liabilities
Total liabilities

Other segment 
information
Capital expenditure

 (22,413)
 35,352 

 (4,060)  (26,778)
 57,245 
 19,580 

 (13,213)
 42,153 

 (2,887)
 40,595 

 (69,351)
 194,925 

 (3,575)
 32,449 

 (1,060)
 (40,571)

 (73,986)
 186,803 

 (3,177)

 – 

 (70,703)
 112,923 

 545,034 
 – 
 545,034 

 86,364   749,453 
 1,992 
 90,246   751,445 

 3,882 

 527,147 
 – 
 527,147 

 672,960   2,580,958 
 5,874 
 672,960   2,586,832 

 – 

 287,647 
 323 
 287,970 

 496,867  3,365,472 
 6,197 
 496,867  3,371,669 

 – 

 144,996 
 144,996 

 48,888   214,159 
 48,888   214,159 

 90,307 
 90,307 

 126,072 
 126,072 

 624,422 
 624,422 

 29,677 
 29,677 

 1,052,825  1,706,924 
 1,052,825  1,706,924 

 17,322 

 1,629 

 35,491 

 24,839 

 8,168 

 87,449 

 5,356 

 1 

 92,806 

70 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

5. Operating segments (continued)

Crop protection

technologies Corporate

Group

Seed 

Australia and 
New Zealand
$000

Asia
$000

Europe
$000

North
America
$000

South 
America
$000

Total
$000

Global
$000

$000

Total
$000

 701,022 

 125,586  431,095 

 470,243 

 332,636   2,060,582 

 120,969 

 –   2,181,551 

 127,036 

 19,387 

 65,801 

 43,501 

 19,365 

 275,090 

 32,721 

 (40,057)

 267,754 

 (21,054)
 105,982 

 (2,652)  (22,578)
 43,223 
 16,735 

 (10,174)
 33,327 

 (1,839)
 17,526 

 (58,297)
 216,793 

 (2,132)
 30,589 

 (1,352)
 (41,409)

 (61,781)
 205,973 

 (61,001)

 2,072 

 (36,721)
 110,323 

 560,976 

 62,128  618,347 

 416,170 

 500,660   2,158,281 

 224,038 

 414,823   2,797,142 

 – 
 560,976 

 2,658 

 1,167 
 64,786  619,514 

 – 
 416,170 

 – 

 3,825 
 500,660   2,162,106 

 301 
 224,339 

 – 

 4,126 
 414,823   2,801,268 

 158,070 
 158,070 

 40,548  173,894 
 40,548  173,894 

 36,291 
 36,291 

 79,150 
 79,150 

 487,953 
 487,953 

 18,534 
 18,534 

 817,979   1,324,466 
 817,979   1,324,466 

 21,013 

 1,392 

 30,440 

 9,504 

 6,707 

 69,056 

 3,457 

 3 

 72,516

Operating 
segments 
2012
Revenue
Total segment revenue

Results
Underlying EBITDA(a)
Depreciation and 
amortisation excluding 
material items
Underlying EBIT(a)

Material items included 
in operating profit 
(refer note 6)
Material items included 
in net financing costs 
(refer note 6)
Net financing costs 
(excluding material 
items)
Profit/(loss) before tax

Assets
Segment assets
Investment in 
associates
Total assets

Liabilities
Segment liabilities
Total liabilities

Other segment 
information
Capital expenditure

(a)   Underlying EBIT is earnings before net finance costs, taxation and material items. Underlying EBITDA is Underlying EBIT, before depreciation, amortisation and impairments.

Nufarm Limited Annual Report 2013 | 71

Notes to the financial statements continued

5. Operating segments (continued)

Geographical information
Australia
New Zealand
Asia
Europe
USA
Rest of North America
Brazil
Rest of South America
Unallocated(b)
Total

Revenue by location of customer
2012
$000
 672,504 
 54,412 
 139,213 
 444,624 
 449,158 
 70,850 
 253,789 
 97,001 
 – 
 2,181,551 

2013
$000
 567,235 
 59,480 
 138,603 
 488,711 
 460,295 
 106,751 
 341,802 
 114,415 
 – 
 2,277,292 

Non-current assets by location
2012
$000
 269,150 
 14,443 
 30,289 
 304,895 
 265,653 
 29,776 
 214,281 
 16,417 
 181,633 
 1,326,537 

2013
$000
 257,186 
 15,999 
 39,831 
 369,692 
 333,481 
 30,736 
 245,419 
 18,945 
 200,219 
 1,511,508 

(b) Unallocated assets predominately include deferred tax assets.

6. Items of material income and expense
Material items are those items where their nature and/or amount is considered material to the financial statements. Such items 
included within the group’s profit for the year are detailed below. 

Material items by category:
Class action settlement 
Restructuring costs
Debt refinancing costs
Due diligence and litigation costs
Investment in associate write down
Intangibles write-off – Brazil
Net foreign exchange gains/(losses) on Nufarm step-up securities financing

Consolidated

Consolidated

2013
$000
Pre-tax

2013
$000
After-tax

2012
$000
Pre-tax

2012
$000
After-tax

 (3,177)
 – 
 – 
 – 
 – 
 – 
 – 
 (3,177)

 (2,224)
 – 
 – 
 – 
 – 
 – 
 – 
 (2,224)

 (43,500)
 (7,295)
 (9,931)
 (3,552)
 (1,993)
 (3,708)
 11,050 
 (58,929)

 (30,450)
 (5,013)
 (6,952)
 (2,427)
 (1,993)
 (3,708)
 7,697 
 (42,846)

Class action settlement
In 2013 the Federal Court gave final approval to the settlement of the class action brought against the company in early 2011. The 
settlement agreement was amended to cover an expanded number of claims, with Nufarm agreeing to pay a total of $46.6 million 
(previously $43.5 million). Consistent with previous treatment, the additional settlement amount and related costs have been 
reported as a material item.

Restructuring costs
No material restructuring costs were incurred during the year ended 31 July 2013. The prior year costs related to the 
reorganisation of the European business.

Debt refinancing costs
Whilst we have incurred and capitalised material debt establishment transaction costs associated with the US$325 million bond 
issuance, debt establishment transaction costs expensed during the year ended 31 July 2013 were not material or unusual in 
nature. The prior year debt refinancing costs relate to the establishment of a 12 month facility that was put in place in December 
2010. These costs were treated as a material item and were partially recognised in the year ended 31 July 2011 with the balance 
recognised in the year ended 31 July 2012 ($6.952 million).

72 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

6. Items of material income and expense (continued)
Due diligence and litigation costs
No material due diligence and litigation costs were incurred during the year ended 31 July 2013. The 2012 financial year due diligence 
and litigation costs largely relate to the class action proceedings, the Seeds 2000 acquisition and arbitration proceedings against the 
previous owner of the Brazilian business.

Investment in associate write down
No material write down on investment in associate occurred during the year ended 31 July 2013. The 2012 $1.993 million 
write-off was related to the value of a minor equity investment in an Indian crop protection company Excel Crop Care Ltd.

Intangibles write-off – Brazil
Several older insecticide products have been phased out of the Brazilian product portfolio due to regulatory requirements. The 
company took a write down in the carrying value of the intangible assets associated with these products in the prior year ($3.708 million) 
with the balance written down as at 31 July 2012. No further charges were incurred during the year ended 31 July 2013.

Net foreign exchange gains/(losses) on Nufarm step-up securities financing
No material foreign exchange gains/(losses) on the Nufarm step-up securities were incurred during the year ended 31 July 2013. 
In 2012, the company benefitted from a net after tax gain of $7.697 million associated with the mark-to-market revaluation of 
proceeds from Nufarm step-up securities.

Material items are classified by function as follows

Year ended 31 July 2013 
$’000
Class action settlement 
Restructuring costs
Debt refinancing costs
Due diligence and legal costs
Investment in associate write down
Intangibles write-off – Brazil
Net foreign exchange gains/(losses) 
on Nufarm step-up securities financing

Total material items included operating profit

Year ended 31 July 2012 
$’000
Class action settlement 
Restructuring costs
Debt refinancing costs
Due diligence and legal costs
Investment in associate write down
Intangibles write-off – Brazil
Net foreign exchange gains/(losses) 
on Nufarm step-up securities financing

Total material items included operating profit

Selling, 
marketing and 
distribution 
expense
 – 
 – 
 – 
 – 
 – 
 – 

General and 
administrative 
expense
 (3,177)
 – 
 – 
 – 
 – 
 – 

Cost of sales
 – 
 – 
 – 
 – 
 – 
 – 

-
 – 
 – 

 – 
 – 
 – 

 – 
 (3,177)
 (3,177)

Selling, 
marketing and 
distribution 
expense
 – 
 (4,846)
 – 
 – 
 – 
 – 

General and 
administrative 
expense
 (43,500)
 (1,644)
 (953)
 (3,552)
 (1,993)
 (3,708)

Cost of sales
 – 
 (805)
 – 
 – 
 – 
 – 

-
 (805)
 (805)

 – 
 (4,846)
 (4,846)

 – 
 (55,350)
 (55,350)

Net 
financing 
costs
 – 
 – 
 – 
 – 
 – 
 – 

 – 
 – 
 – 

Net 
financing 
costs
 – 
 – 
 (8,978)
 – 
 – 
 – 

 11,050 
 2,072 
 – 

Total 
Pre-tax 
 (3,177)
 – 
 – 
 – 
 – 
 – 

 – 
 (3,177)
 (3,177)

Total 
Pre-tax 
 (43,500)
 (7,295)
 (9,931)
 (3,552)
 (1,993)
 (3,708)

 11,050 
 (58,929)
 (61,001)

Nufarm Limited Annual Report 2013 | 73

Notes to the financial statements continued

7. Other income

Dividend income
Rental income
Sundry income 
Total other income

8. Other expenses
The following expenses were included in the period result:

Depreciation and amortisation
Inventory write down

9. Personnel expenses
Wages and salaries
Other associated personnel expenses
Contributions to defined contribution superannuation funds
Expenses related to defined benefit superannuation funds
Short term employee benefits
Other long term employee benefits
Restructuring expense
Personnel expenses

No material restructuring costs were incurred in the year ended 31 July 2013. (2012: Restructuring 
of the group’s European operations). The prior year restructuring expenses are included in material 
items in note 6.

10. Finance income and expense
Financial income excluding foreign exchange gains/(losses)(a)
Net foreign exchange gains/(losses)(a)(b)
Financial income

Interest expense – external
Interest expense – debt establishment transaction costs
Lease expense – finance charges
Financial expenses

Net financing costs

(a) Refer note 2(e) for an explanation of the prior year reclassification.

(b) In 2012, net foreign exchange gains on Nufarm step-up securities financing totalled $11.050 million. Refer to note 6.

74 | Nufarm Limited Annual Report 2013

Consolidated

2013
$000
 1 
 199 
 20,477 
 20,677 

2012
$000
 24 
 318 
 9,782 
 10,124

 (73,986)
 (5,773)

 (65,489)
 (2,966)

 (219,754)
 (37,370)
 (13,809)
 (3,311)
 (8,081)
 (3,319)
 – 
 (285,644)

 (212,306)
 (32,520)
 (13,371)
 (1,813)
 (7,976)
 (2,252)
 (4,847)
 (275,085)

 5,491 
 (10,734)
 (5,243)

 (54,537)
 (9,447)
 (1,476)
 (65,460)

 7,910 
 19,237 
 27,147 

 (47,405)
 (12,972)
 (1,419)
 (61,796)

 (70,703)

 (34,649)

Notes to the financial statements continued

11. Income tax expense

Recognised in the income statement
Current tax expense
Current period
Adjustments for prior periods
Current tax expense
Deferred tax expense
Origination and reversal of temporary differences and tax losses
Reduction in tax rates
Initial (recognition)/derecognition of tax assets
Deferred tax expense/(benefit)

Consolidated

2013
$000

2012
$000

 29,383 
 (2,189)
 27,194 

 3,446 
 (30)
 563 
 3,979 

 46,782 
 (690)
 46,092 

 (8,801)
 10 
 200 
 (8,591)

Total income tax expense/(benefit) in income statement

 31,173 

 37,501 

Attributable to:
Continuing operations
Total income tax expense/(benefit) in income statement

Numerical reconciliation between tax expense and pre-tax net profit
Profit/(loss) before tax

Income tax using the local corporate tax rate of 30%
Increase in income tax expense due to:
  Non-deductible expenses
  Other taxable income
  Effect of changes in the tax rate

Initial (recognition)/derecognition of tax assets

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)

Income tax recognised directly in equity
Nufarm step-up securities distribution
Income tax recognised directly in equity

Income tax recognised in other comprehensive income
Relating to actuarial gains/(losses) on defined benefit plans
Relating to equity based compensation
Income tax recognised in other comprehensive income

 31,173 
 31,173 

 37,501 
 37,501 

 112,924 

 110,323 

 33,877 

 33,097 

 2,676 
 1,388 
 (30)
 563 

 (2,838)
 (382)
 (1,892)
 33,362 
 (2,189)
 31,173 

 7,121 
 887 
 10 
 200 

 (1,476)
 (385)
 (1,267)
 38,187 
 (686)
 37,501 

 (4,970)
 (4,970)

 (5,038)
 (5,038)

 269 
 (252)
 17 

 (1,596)
 (93)
 (1,689)

Nufarm Limited Annual Report 2013 | 75

 
Notes to the financial statements continued

12. Discontinued operations
There were no discontinued operations in the current or prior period.

13. Non-current assets held for sale
There were no assets held for sale in the current or prior period.

Assets classified as held for sale
Property, plant and equipment including costs incurred in preparing site for sale
Total assets held for sale

Consolidated

2013
$000
 – 
–

2012
$000
 – 
–

14. Acquisition of businesses and acquisition of non-controlling interests
Business acquisitions – 2013
On 1 January 2013, the group purchased the turf and ornamental business of USA based Cleary Chemical Corporation for US$10 million 
plus working capital adjustments of US$2.5 million (A$12.0 million). The acquisition has provided a wider product offering for the group 
and is expected to complement and result in synergies with the existing turf and ornamental business in the region.

On 23 January 2013, the group acquired 51 per cent of the equity in Atlantica Sementes Ltda., a Brazilian business specialising in 
sorghum and sunflower seeds. The 51 per cent stake, purchased at a cost of 25 million Brazilian reais (A$12.0 million), will allow 
Nuseed to supply a number of existing Nuseed hybrids through the Atlantica distribution network and leverage other development 
programs in Australia, Argentina and the USA. The acquisition has been made to expand the seeds business in South America and 
is expected to complement the existing seeds business and grow our market share.

On 19 April 2013, the group purchased the pelletising business of Masmart Pty Ltd based in New South Wales, Australia for 
$4.8 million. Masmart is a supplier to the Australian Nufarm Crop Care business and also provides pelletising tolling services. 
The acquisition is expected to complement and result in synergies with the crop protection business in the region.

On 4 July 2013, the group purchased the Australian based sorghum seed business of the HSR Group for $2.5 million. The acquisition 
has sourced the breeding and germplasm assets of the HSR’s sorghum seed business and is expected to complement Nufarm’s 
existing global sorghum business.

Business acquisitions – 2012
On 1 December 2011, the group acquired 100 per cent of the shares in Seeds 2000 Inc. at a total cost of US$55.2 million. Seeds 
2000 is a sunflower seed research and production company based in Minnesota, USA and has activities in the USA, Canada, China, 
Argentina, and a number of European markets.

On 31 March 2012 the group acquired 100 per cent of the shares in Seeds 2000 Argentina SRL, a related company of Seeds 2000 
Inc, at a total cost of US$1.4 million. On 24 October 2011, the group acquired the breeding and germplasm assets of the Super 
Seeds sunflower business in Serbia. The Seeds 2000 Argentina SRL and Super Seeds acquisitions are individually immaterial.

76 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

14. Acquisition of businesses and acquisition of non-controlling interests (continued)

Fair value on acquisition(a)  Fair value on acquisition(a)

Acquiree’s net assets at acquisition date
Cash and cash equivalents
Receivables
Inventory
Property, plant and equipment
Deferred tax asset
Pre-acquistion intangibles assets 
Other assets
Trade and other payables
Interest bearing loans and borrowings
Deferred tax liability
Other liabilities
Net identifiable assets and liabilities
Intangibles acquired on acquisition
Non-controlling interest
Goodwill on acquisition
Consideration paid
Cash acquired
Net cash outflow

31 Jul 2013
$000
 643 
 9,137 
 6,205 
 1,102 
 – 
 52 
 72 
 (4,224)
 – 
 (3,173)
 (275)
 9,539 
 10,034 
 (3,837)
 15,613 
 31,349 
 (643)
 30,706 

 31 Jul 2012
$000
 1,844 
 1,967 
 13,182 
 1,749 
 400 
 1,879 
 164 
 (1,275)
 (2,074)
 (14,400)
 (4,321)
 (885)
 37,287 
 – 
 19,355 
 55,757 
 (1,844)
 53,913 

(a) Fair values established at acquisition date are provisional through to 12 months post-acquisition date.

Total goodwill of $15,613,000 (2012: $19,355,000) from business acquisitions is attributable mainly to the synergies expected to 
be achieved from integrating the respective businesses into the group’s existing business.

Acquisition of non-controlling interest
On 1 May 2012, the group acquired an additional 49 per cent interest in the voting shares of Nufarm Technologies (M) Sdn Bhd, 
increasing its ownership interest to 100 per cent. A cash consideration of $50,000 was paid to the non-controlling interest 
shareholders. The carrying value of the net assets of Nufarm Technologies (M) Sdn Bhd at the acquisition date was $102,000, 
and the carrying value of the additional interest acquired was $50,000. The group recognised a decrease in non-controlling 
interests of $50,000.

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

Consolidated

2013 
$000
 230,750 
 34,222 
 264,972 
 – 
 264,972 

2012 
$000
 103,522 
 87,795 
 191,317 
 – 
 191,317 

Nufarm Limited Annual Report 2013 | 77

Notes to the financial statements continued

16. Trade and other receivables

Current
Trade receivables
Provision for impairment losses

Receivables due from associates
Derivative financial instruments
Proceeds receivable from sale of businesses
Prepayments
Other receivables
Current receivables

Non-current
Receivables due from associates
Other receivables
Proceeds receivable from sale of businesses
Non-current receivables

Total trade and other receivables

17. Inventories
Raw materials
Work in progress
Finished goods

Provision for obsolescence of finished goods
Total inventories

Consolidated

2013
$000

2012
$000

 701,560 
 (24,172)
 677,388 

 – 
 2,161 
 2,153 
 19,199 
 57,633 
 758,534 

 688,059 
 (22,278)
 665,781 

 – 
 7,196 
 3,363 
 11,484 
 42,672 
 730,496 

 – 
 36,191 
 – 
 36,191 

 38 
 39,420 
 1,637 
 41,095 

 794,725 

 771,591 

 213,880 
 16,702 
 578,609 
 809,191 
 (6,402)
 802,789 

 138,018 
 13,991 
 368,172 
 520,181 
 (4,927)
 515,254 

18. Tax assets and liabilities
Current tax assets and liabilities
The current tax asset for the group of $33,865,619 (2012: $37,664,065) represents the amount of income taxes recoverable in respect 
of prior periods and that arose from the payment of tax in excess of the amounts due to the relevant tax authority. The current tax 
liability for the group of $16,677,067 (2012: $14,833,945) represents the amount of income taxes payable in respect of current and 
prior financial periods.

78 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

18. Tax assets and liabilities (continued)
Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:

Assets

Liabilities

Net

Consolidated
Property, plant and equipment
Intangible assets
Employee benefits
Provisions
Other items
Tax value of losses carried forward
Tax assets/(liabilities)
Set off of tax
Net tax assets/(liabilities)

2013
$000
 5,274 
 9,123 
 14,613 
 10,654 
 27,500 
 138,888 
 206,052 
 (5,833)
 200,219 

2012
$000
 4,507 
 8,511 
 14,265 
 25,951 
 28,319 
 103,346 
 184,899 
 (3,266)
 181,633 

2013
$000
 (11,808)
 (98,113)
 – 
 – 
 (15,603)
 – 
 (125,524)
 5,833 
 (119,691)

2012
$000
 (8,215)
 (75,510)
 – 
 – 
 (15,364)
 – 
 (99,089)
 3,266 
 (95,823)

Movement in temporary differences during the year

Consolidated 2013
Property, plant and equipment
Intangibles assets
Employee benefits
Provisions
Other items
Tax value of losses carried forward

Consolidated 2012
Property, plant and equipment
Intangibles assets
Employee benefits
Provisions
Other items
Tax value of losses carried forward

Balance
 31.07.12
$000
 (3,708)
 (66,999)
 14,265 
 25,951 
 12,955 
 103,346 
 85,810 

Balance
 31.07.11
$000
 (2,051)
 (53,596)
 13,778 
 11,174 
 36,468 
 99,831 
 105,604 

Recognised
in income
$000
 (571)
 (10,671)
 (668)
 (15,852)
 (3,946)
 27,729 
 (3,979)

Recognised
in equity
$000
 – 
 – 
 (269)
 – 
 252 
 – 
 (17)

Recognised
in income
$000
 (1,917)
 (2,131)
 (1,109)
 17,110 
 3,862 
 (7,223)
 8,592 

Recognised
in equity
$000
 – 
 – 
 1,596 
 – 
 93 
 – 
 1,689 

Currency
adjustment
$000
 (2,255)
 (10,836)
 1,285 
 555 
 2,636 
 12,830 
 4,215 

Currency
adjustment
$000
 260 
 3,128 
 – 
 (2,333)
 (5,313)
 (10,956)
 (15,214)

2013
$000
 (6,534)
 (88,990)
 14,613 
 10,654 
 11,897 
 138,888 
 80,528 
 – 
 80,528 

Other
movement
$000
 – 
 (484)
 – 
 – 
 – 
 (5,017)
 (5,501)

Other
movement
$000
 – 
 (14,400)
 – 
 – 
 (22,155)
 21,694 
 (14,861)

2012
$000
 (3,708)
 (66,999)
 14,265 
 25,951 
 12,955 
 103,346 
 85,810 
 – 
 85,810 

Balance
31.07.13
$000
 (6,534)
 (88,990)
 14,613 
 10,654 
 11,897 
 138,888 
 80,528 

Balance
31.07.12
$000
 (3,708)
 (66,999)
 14,265 
 25,951 
 12,955 
 103,346 
 85,810

Nufarm Limited Annual Report 2013 | 79

Notes to the financial statements continued

18. Tax assets and liabilities (continued)
Deferred tax assets and liabilities (continued)
The carrying value of deferred tax assets relating to tax losses and tax credits is largely dependent on the generation of sufficient 
future taxable income. The Brazilian business carries total deferred tax assets of $56.3 million (2012: $59.1 million). Based on the 
group’s accounting policy of recouping tax losses and tax credits within a maximum time frame of eight years, the carrying value 
of the deferred tax asset would be impaired if aggregate earnings over the eight year period are 44 per cent below management’s 
forecasts.

The carrying value of this asset will continue to be assessed at each reporting date. 

Unrecognised deferred tax liability
At 31 July 2013, a deferred tax liability of $25,200,672 (2012: $17,589,702) relating to investments in subsidiaries has not been recognised 
because the company controls the repatriation of retained earnings and it is satisfied that it will not be incurred in the foreseeable future. 
This amount represents the theoretical withholding tax payable if all overseas retained earnings were paid as dividends.

Unrecognised deferred tax assets
At 31 July 2013, there are unrecognised tax losses and timing differences of $29,590,667 (2012: $30,805,379). These losses do not 
have an expiry date.

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:

Country

Balance date 
of associate

Ownership and voting interest
2012

2013

Excel Crop Care Ltd
F&N joint ventures
Lotus Agrar GmbH

Agricultural chemicals manufacturer
Agricultural chemicals distributor
Agricultural chemicals distributor

India
Eastern Europe
Germany

31 March
31 December
31 December

14.69%
50.00%
50.00%

14.69%
50.00%
-

The 14.69 per cent investment in Excel Crop Care Ltd is equity accounted as Nufarm has the ability to appoint two directors to the 
board and, together with an unrelated partner, has significant influence over nearly 34 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.

Lotus Agrar GmbH is a joint venture established in Germany to sell generic agrochemicals.

Financial summary of material associates (at reporting date)

Revenues
(100%)
$000

 140,177 
 57,633 
 – 
 197,810 

 130,561 
 49,948 
 180,509 

Profit/(loss)
after-tax
(100%)
$000

 3,817 
 (1,686)
 – 
 2,131 

 2,766 
 668 
 3,434 

Total
assets
(100%)
$000

 94,238 
 65,134 
 2,972 
 162,344 

 97,755 
 51,158 
 148,913 

Total
liabilities
(100%)
$000

 48,333 
 64,122 
 – 
 112,455 

 58,151 
 48,824 
 106,975 

Net assets 
as reported 
by associates 
(100%)
$000

Share of 
associates’ 
net assets 
equity 
accounted
$000

 45,905 
 1,012 
 2,972 
 49,889 

 39,604 
 2,334 
 41,938 

 6,743 
 506 
 1,486 
 8,735 

 5,818 
 1,167 
 6,985 

2013
Excel Crop Care Ltd
F&N joint ventures
Lotus Agrar GmbH

2012
Excel Crop Care Ltd
F&N joint ventures

The financial summary information is as per the latest management accounts.

80 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

19. Investments accounted for using the equity method (continued)
Financial summary of material associates (at reporting date) (continued)

Carrying value by major associate
Excel Crop Care Ltd
F&N joint ventures
Lotus Agrar GmbH
Others
Carrying value of associates

Consolidated

2013
$000

 3,882 
 506 
 1,486 
 323 
 6,197 

2012
$000

 2,658 
 1,167 
 – 
 301 
 4,126 

No write down on the Excel Crop Care Ltd investment occurred during the year ended 31 July 2013. (2012: $1.993 million). 
Refer to note 6.

Share of profit by major associate
Excel Crop Care Ltd
F&N joint ventures
Others
Share of net profits of associates

 796 
 (897)
 41 
 (60)

 202 
 254 
 (78)
 378 

The share of net profits has been derived from the latest management reports as at 31 July 2013 for the F&N joint ventures. 
The Excel Crop Care share of net profits is from the 30 June 2013 management accounts.

20. Other investments
Investments – available-for-sale
Balance at the beginning of the year
New investments during the year
Disposals during the year
Exchange adjustment
Balance at the end of the year

Other investments
Other investments

Total other investments

The group’s investment in an unlisted entity is classified as available-for-sale.

21. Other non-current assets
Derivative financial instruments

 5,568 
 – 
 (5,616)
 48 
 – 

 5,324 
 – 
 – 
 244 
 5,568 

 448 

 645 

 448 

 6,213 

 – 
 – 

 – 
–

Nufarm Limited Annual Report 2013 | 81

Notes to the financial statements continued

22. Property, plant and equipment

Consolidated 2013
Cost
Balance at 1 August 2012
Additions
Additions through business combinations
Disposals
Other transfers
Exchange adjustment
Balance at 31 July 2013

Depreciation and impairment losses
Balance at 1 August 2012
Depreciation charge for the year
Additions through business combinations
Disposals
Other transfers
Exchange adjustment
Balance at 31 July 2013

Land
and
buildings
$000

Plant and
machinery
$000

Leased
plant and
machinery
$000

Capital
work in
progress
$000

 188,982 
 802 
 617 
 (1,131)
 4,572 
 20,279 
 214,121 

 (61,919)
 (6,075)
 (189)
 385 
 – 
 (9,540)
 (77,338)

 568,129 
 17,303 
 3,074 
 (4,033)
 4,555 
 58,115 
 647,143 

 (358,657)
 (34,830)
 (2,411)
 3,501 
 5,732 
 (35,721)
 (422,386)

 15,641 
 1,910 
 – 
 (244)
 – 
 1,330 
 18,637 

 (820)
 (659)
 – 
 244 
 – 
 (102)
 (1,337)

Total
$000

 792,176 
 44,232 
 3,702 
 (5,412)
 (13,785)
 82,846 
 903,759 

 19,424 
 24,217 
 11 
 (4)
 (22,912)
 3,122 
 23,858 

 – 
 – 
 – 
 – 
 – 
 – 
 – 

 (421,396)
 (41,564)
 (2,600)
 4,130 
 5,732 
 (45,363)
 (501,061)

Net property, plant and equipment at 31 July 2013

 136,783 

 224,757 

 17,300 

 23,858 

 402,698

Consolidated 2012
Cost
Balance at 1 August 2011
Additions
Additions through business combinations
Disposals
Other transfers
Exchange adjustment
Balance at 31 July 2012

Depreciation and impairment losses
Balance at 1 August 2011
Depreciation charge for the year
Additions through business combinations
Disposals
Other transfers
Exchange adjustment
Balance at 31 July 2012

Land 
and
buildings
$000

Plant and
machinery
$000

Leased 
plant and
machinery
$000

Capital 
work in
progress
$000

 192,698 
 2,328 
 1,303 
 (125)
 3,677 
 (10,899)
 188,982 

 (60,619)
 (4,763)
 (376)
 75 
 (78)
 3,842 
 (61,919)

 554,660 
 22,075 
 2,283 
 (4,221)
 11,329 
 (17,997)
 568,129 

 (340,140)
 (33,056)
 (1,461)
 3,855 
 48 
 12,097 
 (358,657)

 9,644 
 6,048 
 – 
 – 
 (31)
 (20)
 15,641 

 (640)
 (215)
 – 
 – 
 30 
 5 
 (820)

 18,202 
 17,124 
 – 
 (4)
 (14,975)
 (923)
 19,424 

 – 
 – 
 – 
 – 
 – 
 – 
 – 

Total
$000

 775,204 
 47,575 
 3,586 
 (4,350)
 – 
 (29,839)
 792,176 

 (401,399)
 (38,034)
 (1,837)
 3,930 
 – 
 15,944 
 (421,396)

Net property, plant and equipment at 31 July 2012

 127,063 

 209,472 

 14,821 

 19,424 

 370,780 

Assets pledged as security for finance leases amount to $10.063 million (2012: $8.8 million).

82 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

23. Intangible assets

Consolidated 2013
Cost
Balance at 1 August 2012
Additions
Additions through business combinations
Disposals and write-offs
Other transfers
Exchange adjustment
Balance at 31 July 2013

Amortisation and impairment losses
Balance at 1 August 2012
Amortisation charge for the year
Impairment loss
Disposals and write-offs
Other transfers
Exchange adjustment
Balance at 31 July 2013

Goodwill
$000

 300,453 
 10,520 
 15,644 
 – 
 – 
 31,289 
 357,906 

 (110,590)
 – 
 – 
 – 
 – 
 (10,189)
 (120,779)

Intellectual
Indefinite
 life
$000

property 
Finite
life
$000

Capitalised
development
costs
$000

Computer
software
$000

Total
$000

 368,749 
 11,789 
 374 
 (489)
 (9,919)
 49,247 

 110,685 
 412 
 9,661 
 (1,872)
 9,919 
 17,936 
 419,751   146,741 

 (14,894)

 (53,348)
 (560)  (14,450)
 – 
 1,872 
 (1,919)
 (9,257)
 (16,673)  (77,102)

 (1,191)
 77 
 1,919 
 (2,024)

 145,966 
 32,992 
 – 
 (3,179)
 (1,238)
 20,801 
 195,342 

 (34,100)
 (13,633)
 – 
 2,353 

 (6,130)
 (51,510)

 28,699 
 2,904 
 20 
 (165)
 2,071 
 3,249 

 954,552 
 58,617 
 25,699 
 (5,705)
 833 
 122,522 
 36,778   1,156,518 

 (18,930)
 (3,778)
 – 
 36 
 – 
 (2,027)

 (231,862)
 (32,421)
 (1,191)
 4,338 
 – 
 (29,627)
 (24,699)  (290,763)

Intangibles carrying amount at 31 July 2013

 237,127 

 403,078 

 69,639 

 143,832 

 12,079 

 865,755

Consolidated 2012
Cost
Balance at 1 August 2011
Additions
Additions through business combinations
Disposals and write-offs
Other transfers
Exchange adjustment
Balance at 31 July 2012

Amortisation and impairment losses
Balance at 1 August 2011
Amortisation charge for the year
Impairment loss
Disposals and write-offs
Other transfers
Exchange adjustment
Balance at 31 July 2012

Intellectual
Indefinite
 life
$000

property 
Finite
life
$000

Capitalised
development
costs
$000

Computer
software
$000

Total
$000

 391,948 
 13 
 28,724 
 (183)
 (20,953)
 (30,800)
 368,749 

 77,063 
 548 
 8,563 
 – 
 25,730 
 (1,219)
 110,685 

 (12,916)
 (3,708)
 – 
 – 
 – 
 1,730 
 (14,894)

 (44,508)
 (10,422)
 – 
 – 
 (222)
 1,804 
 (53,348)

 124,151 
 29,029 
 1,857 
 (87)
 (646)
 (8,338)
 145,966 

 (38,630)
 (10,272)
 – 
 (3)
 10,314 
 4,491 
 (34,100)

 27,357 
 2,052 
 22 
 (15)
 – 
 (717)
 28,699 

 948,129 
 31,642 
 58,521 
 (285)
 (10,178)
 (73,277)
 954,552 

 (16,679)
 (3,053)
 – 
 – 
 86 
 716 
 (18,930)

 (242,318)
 (27,455)
 – 
 (3)
 10,178 
 27,736 
 (231,862)

Goodwill
$000

 327,610 
 – 
 19,355 
 – 
 (14,309)
 (32,203)
 300,453 

 (129,585)
 – 
 – 
 – 
 – 
 18,995 
 (110,590)

Intangibles carrying amount at 31 July 2012

 189,863 

 353,855 

 57,337 

 111,866 

 9,769 

 722,690

Nufarm Limited Annual Report 2013 | 83

Notes to the financial statements continued

23. Intangible assets (continued)
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, 
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 operating unit 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 intangibles are country specific in nature. There is no allocation of goodwill 
between CGUs.

The major CGUs and their intangible value is as follows: US$188 million (2012: $146 million), Brazil $170 million (2012: 
$158 million), Seeds business $200 million (2012: $166 million), UK and Holland $90 million (2012: $76 million) and Australia 
$58 million (2012: $57 million). The balance of intangibles is spread across multiple CGUs, with no individual amount being 
material relative to the total intangibles balance at balance date.

Impairment testing for cash-generating units containing goodwill
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 beyond year five. A perpetuity factor is then applied to the normalised cash flow beyond year five in order to include a terminal 
value in the value-in-use calculation. The terminal growth rate assumed for each CGU is generally a long term inflation estimate. 
The cash flow is then discounted to a present value using a discount rate which is the company’s weighted average cost of capital, 
but then adjusted for country risk and asset-specific risk associated with each CGU.

The range of terminal growth rates and nominal post-tax discount rates applied for impairment testing purposes is as follows:

Material crop protection CGU’s (USA, Brazil, UK/Holland and Australia)
Seed CGU

Brazil cash-generating unit (CGU)
The Brazil CGU has the following intangible assets:

Goodwill
Indefinite life intangibles
Capitalised development costs
Computer software
Total

Terminal growth rate
2012

2013

2012
 2.0% to 3.5%  2.0% to 3.5% 9.2% to 11.4% 9.1% to 12.8%
9.1%

2.0%

8.9%

2013

2.0%

Discount rate

2013
$000
50,025
108,685
10,556
561
169,827

2012
$000
47,374
102,908
7,619
397
158,298

The indefinite life intangibles relates to the product registrations and trade marks acquired in June 2007.

In 2013, the company has assessed the recoverable amount of the Brazil CGU and determined the CGU’s recoverable amount 
exceeds its carrying value.

84 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

23. Intangible assets (continued)
Should the Brazil CGU fail to meet its forecast operating result going forward, this may necessitate a revision to the future 
forecasts or alternatively a further increase in the discount rate used in the value-in-use modelling. By way of sensitivity and 
all other things being equal: (a) a 1 per cent increase in the discount rate would result in a reduction in recoverable amount 
of approximately $91 million; or (b) a 5 per cent decrease in EBITDA compared to budget for all years in the forecast period 
and also in the terminal value calculation would result in a reduction in recoverable amount of approximately $58 million.

24. Trade and other payables

Current payables – unsecured
Trade creditors and accruals – unsecured
Payables due to associated entities
Derivative financial instruments
Payables – acquisitions
Current payables

Non-current payables – unsecured
Creditors and accruals
Derivative financial instruments
Payables – acquisitions
Non-current payables

25. Interest-bearing loans and borrowings

Current liabilities
Bank loans– secured
Bank loans – unsecured
Deferred debt establishment costs
Other loans – unsecured
Finance lease liabilities – secured
Loans and borrowings – current

Non-current liabilities
Bank loans – secured
Bank loans – unsecured
Senior unsecured notes
Deferred debt establishment costs
Other loans – unsecured
Finance lease liabilities – secured
Loans and borrowings – non-current

Net cash and cash equivalents

Net debt

Consolidated

2013
$000

2012
$000

 525,846 
 – 
 19,984 
 4,489 
 550,319 

 9,633 
 22,313 
 16,925 
 48,871 

 231,002 
 93,793 
 (9,218)
 386 
 402 
 316,365 

 225,674 
 4,834 
 350,146 
 (11,892)
 1,104 
 11,854 
 581,720 

 467,121 
 – 
 2,129 
 5,741 
 474,991 

 8,343 
 – 
 1,903 
 10,246 

 215,321 
 82,268 
 (5,995)
 557 
 172 
 292,323 

 359,441 
 4,134 
 – 
 (7,993)
 816 
 10,400 
 366,798 

 (264,972)

 (191,317)

 633,113 

 467,804

Nufarm Limited Annual Report 2013 | 85

Notes to the financial statements continued

25. Interest-bearing loans and borrowings (continued)
Financing facilities
On 23 August 2011, Nufarm executed a A$300 million trade receivables securitisation facility. Subsequent to execution, the 
facility size was reduced to A$250 million to reflect the value of trade receivables being used to secure funding under the program 
at that time. On 13 June 2013 the facility size was increased to A$300 million to reflect the increase in the current value of trade 
receivables being used to secure funding under this program. As at 31 July 2013, the amount of funding drawn under the 
securitised facility by the participating Nufarm entities was A$208 million (2012: A$202 million).

On 22 November 2011, the company executed a A$625 million senior secured syndicated bank facility (SFA) with a term of three 
years. On 8 October 2012, the group completed a US$325 million senior unsecured notes offering due in October 2019 (the ‘notes’). 
Concurrent with the issuance of the notes, US$250 million of the commitments under the A$625 million senior secured syndicated 
bank facility was cancelled. Subsequently, upon the admission of an additional financial institution to the syndicate on 25 January 
2013, the SFA was increased by A$25 million. As at 31 July 2013, the amount of funding drawn under the SFA of A$406 million was 
A$164 million (2012: A$336 million) with loans being advanced in multiple currencies.

The SFA and trade receivables securitisation facility provide access to committed lines of credit to support the group’s seasonal 
working capital demands and general corporate financing requirements. The SFA includes covenants of a type normally associated 
with facilities of this kind, and the group was in compliance with these covenants throughout the financial year.

The majority of debt facilities that reside outside the notes, the SFA and the trade receivables securitisation facility are regional 
working capital facilities, primarily located in Brazil and Europe totalling A$343 million (2012: A$152 million).

Total net debt at 31 July 2013 is A$633.1 million (2012: A$467.8 million).

2013
Bank loan facilities and senior unsecured notes
Other facilities
Total financing facilities

2012
Bank loan facilities and senior unsecured notes
Other facilities
Total financing facilities

Financing arrangements

Repayment of borrowings (excluding finance leases)
Period ending 31 July 2013
Period ending 31 July 2014
Period ending 31 July 2015
Period ending 31 July, 2016 or later

Finance lease liabilities
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
Finance lease liabilities

Finance lease liabilities are secured over the relevant leased plant.

86 | Nufarm Limited Annual Report 2013

Accessible
$000

Utilised
$000

 1,320,116 
 1,490 
 1,321,606 

 905,449 
 1,490 
 906,939 

 1,027,218 
 1,373 
 1,028,591 

 661,164 
 1,373 
 662,537 

Consolidated

2013 
$000
 – 
 325,181 
 194,684 
 387,074 

2012 
$000
 298,146 
 816 
 363,575 
 – 

 1,732 
 1,657 
 4,462 
 90,333 
 98,184 
 (85,928)
 12,256 

 1,382 
 1,493 
 3,696 
 80,587 
 87,158 
 (76,586)
 10,572 

Notes to the financial statements continued

25. Interest-bearing loans and borrowings (continued)

Average interest rates
Nufarm step-up securities (refer note 29)
Syndicated bank facility
Securitisation program facility
Other bank loans
Finance lease liabilities – secured
Senior unsecured notes

26. Employee benefits

Current
Liability for short term employee benefits 
Liability for current portion of other long term employee benefits
Current employee benefits

Non-current
Defined benefit fund obligations
Present value of unfunded obligations
Present value of funded obligations
Fair value of fund assets – funded
Recognised liability for defined benefit fund obligations

Liability for other long term employee benefits
Non-current employee benefits
Total employee benefits

Consolidated

2013 
%
6.95
5.06
3.32
5.66
12.48
6.38

2012 
%
7.60
3.79
3.61
5.63
12.13
–

Consolidated

2013 
$000

2012 
$000

 16,400 
 3,383 
 19,783 

 15,066 
 3,101 
 18,167 

 6,079 
 140,505 
 (111,361)
 35,223 

 14,996 
 50,219 
 70,002 

 4,768 
 112,005 
 (84,971)
 31,802 

 12,740 
 44,542 
 62,709 

The group makes contributions to defined benefit pension funds in the UK, Holland, France and Indonesia that provide defined 
benefit amounts for employees upon retirement.

Historical information
Present value of defined benefit obligation
Fair value of plan assets
Surplus/(deficit)

2013
$000
 (146,584)
 111,361 
 (35,223)

2012
$000
 (116,773)
 84,971 
 (31,802)

Consolidated
2011
$000
 (108,817)
 80,630 
 (28,187)

2010
$000
 (117,766)
 87,900 
 (29,866)

2009
$000
 (121,657)
 89,829 
 (31,828)

Experience adjustments arising on plan liabilities
Experience adjustments arising on plan assets

 2,597 
 1,821 

 (1,541)
 (1,191)

 (550)
 3,591 

 1,103 
 6,013 

 (1,223)
 (8,058)

Nufarm Limited Annual Report 2013 | 87

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
Service cost
Interest cost
Actuarial loss
Past service cost
Losses/(gains) on curtailment
Contributions
Benefits paid
Exchange differences on foreign funds
Closing defined benefit obligation

Changes in the fair value of fund assets are as follows:
Opening fair value of fund assets
Expected return
Actuarial gains/(losses)
Surplus taken to retained earnings
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
Expense recognised in profit or loss

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
Expense recognised in profit or loss

Consolidated

2013
$000

2012
$000

 116,773 
 2,580 
 5,090 
 5,647 
 4 
 – 
 50 
 (4,965)
 21,405 
 146,584 

 84,971 
 4,363 
 2,679 
 2,554 
 4,531 
 (4,752)
 17,015 
 111,361 

 2,580 
 5,090 
 (4,363)
 4 
 – 
 3,311 

 2,013 
 720 
 427 
 151 
 3,311 

 108,817 
 2,260 
 5,858 
 8,391 
 25 
 (1,066)
 172 
 (5,067)
 (2,617)
 116,773 

 80,630 
 5,264 
 1,492 
 (191)
 4,632 
 (4,876)
 (1,980)
 84,971 

 2,260 
 5,858 
 (5,264)
 25 
 (1,066)
 1,813 

 1,436 
 263 
 36 
 78 
 1,813 

Actuarial gains/(losses) recognised in other comprehensive income (net of tax)
Cumulative amount at 1 August
Recognised during the period
Cumulative amount at 31 July

 (16,998)
 (683)
 (17,681)

 (11,504)
 (5,494)
 (16,998)

88 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

26. Employee benefits (continued)

The major categories of fund assets as a percentage of total fund assets are as follows:

Equities
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

2013
 %

60.9
37.0
1.3
0.8

4.5
5.8
3.0
2.6

2012
 %

48.0
46.6
1.5
3.9

4.2
6.3
2.8
2.2

The overall expected long term rate of return on assets is 5.8 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 $4,571,000 in contributions to defined benefit plans in 2014.

27. Share-based payments
Nufarm executive share plan (2000)
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 granted 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 2013 there were 
48 participants (2012: 61 participants) in the scheme and 764,616 shares (2012: 989,830) were allocated and held by the trustee 
on behalf of the participants. The cost of issuing shares is expensed in the year of issue. From 1 August 2011, it was decided that 
there will be no further awards under this share plan and that it would be replaced by the Nufarm Short Term Incentive plan (refer 
below). Any unvested equities held in the executive share plan will remain and be subject to the vesting conditions under the rules 
of the plan.

Nufarm short term incentive plan (STI)
The STI is available to key executives, senior managers and other managers globally. The first awards under the plan were issued 
in October 2012. The STI is measured as follows:

•  80 per cent of the potential is based on budget measures of EBIT and return on operating assets (ROA); and

•  20 per cent of the potential is based on strategic and business improvement objectives.

A predetermined percentage of the STI is paid in cash at the time of performance testing and the balance is deferred into 
shares in the company for nil consideration. The number of shares granted is based on the volume weighted average price 
(VWAP) of Nufarm Limited shares in the five days subsequent to the results announcement. Vesting will occur after a two year 
period, although for the first year only (FY12) 50 per cent of the shares will vest on the first anniversary and 50 per cent of the 
shares will vest on the second anniversary.

Nufarm Limited Annual Report 2013 | 89

Notes to the financial statements continued

27. Share-based payments (continued)
Nufarm executive long term incentive plan (LTIP)
On 1 August 2011, the LTIP commenced and is available to key executives and certain selected senior managers. Awards are 
granted to individuals in the form of performance rights, which comprise rights to acquire ordinary shares in the company for nil 
consideration, subject to the achievement of global performance hurdles. Under the plan, individuals will receive an annual award 
of performance rights as soon as practical after the announcement of results in the preceding year. The initial awards were granted 
to executives (excluding the managing director) on 9 February 2012. The performance and vesting period for the awards will be 
three years. Awards will vest in two equal tranches as follows:

•  50 per cent of the LTIP grant will vest subject to the achievement of a relative total shareholder return (TSR) performance hurdle 

measured against a selected comparator group of companies; and

•  the remaining 50 per cent will vest subject to meeting an absolute return on funds employed (ROFE) target.

Global share plan (2001)
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 2013 there were 948 participants (2012: 722 participants) in the scheme 
and 1,925,656 shares (2012: 1,783,289) were allocated and held by the trustee on behalf of the participants.

The power of appointment and removal of the trustees for the share purchase schemes is vested in the company.

Employee expenses
Total expense arising from share-based payment transactions

2013 
$000

2012 
$000

 4,528 

 2,829 

Measurement of fair values
The fair value of performance rights granted through the LTIP and deferred shares granted through the STIP were measured as follows:

Plan
Weighted average fair value at grant date
Share price at grant date
Grant date
Earliest vesting date
Exercise price
Expected life
Volatility
Risk free interest rate
Dividend yield

Nufarm STI 
2013 
deferred  
shares
$5.86 
$5.96 
9 Oct 2012
31 Jul 2013
 – 
1 year
N/A
N/A
N/A

Nufarm LTI 
2013 
performance 
rights 
Dec 2012
$4.40 
$5.62 
6 Dec 2012
31 Jul 2015
 – 
2.7 years
30%
2.60%
2.3%

Nufarm LTI 
2013 
performance 
rights 
Oct 2012
$4.73 
$5.96 
9 Oct 2012
31 Jul 2015
 – 
2.8 years
30%
2.41%
2.3%

Nufarm LTI 
2012
performance
rights
Feb 2012
$3.71 
$4.86 
9 Feb 2012
31 Jul 2014
 – 
2.5 years
35%
3.59%
3.0%

The fair values of awards granted were estimated using a Monte Carlo simulation methodology and a Binomial Tree methodology.

90 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

27. Share-based payments (continued)

Reconciliation of outstanding share awards
Outstanding at 1 August
Forfeited during the year
Exercised during the year
Expired during the year
Granted during the year
Outstanding at 31 July
Exercisable at 31 July

Nufarm LTI
number of
performance
rights
2013
 465,677 
 – 
 – 
 – 
 555,451 
 1,021,128 
 – 

Nufarm STI
number of
deferred
shares
2013
 – 
 (4,452)
 (217,472)
 – 
 518,414 
 296,490 
 – 

Nufarm LTI
number of
performance
rights
2012
 – 
 – 
 – 
 – 
 465,677 
 465,677 
 – 

Nufarm STI
number of
deferred
shares
2012
 – 
 – 
 – 
 – 
 – 
 – 
 – 

The performance rights outstanding at 31 July 2013 have a $nil exercise price and a weighted average contractual life of three 
years (2012: three years). All performance rights granted to date have a $nil exercise price.

28. Provisions

Current
Restructuring
Other
Current provisions

Consolidated
Movement in provisions
Balance at 1 August 2012
Provisions made during the year
Provisions used during the year
Exchange adjustment
Balance at 31 July 2013

Consolidated

2013
$000

 118 
 3,161 
 3,279 

 Restructuring  
$000

Other
 provisions  
$000

 3,747 
 – 
 (3,266)
 (363)
 118 

 2,995 
 – 
 – 
 166 
 3,161 

2012
$000

 3,747 
 2,995 
 6,742 

 Total  
$000

 6,742 
 – 
 (3,266)
 (197)
 3,279 

The provision for restructuring is mainly relating to the restructuring of the European operations.
The restructuring provision primarily consists of unpaid redundancy costs.
The other provision consists of liabilities recognised with the Agripec acquisition.

Nufarm Limited Annual Report 2013 | 91

Notes to the financial statements continued

29. Capital and reserves

Share capital
Balance at 1 August
Issue of shares
Balance at 31 July

Parent company

Number
of ordinary
shares
2013
 262,142,247 
 811,793 
 262,954,040 

Number
of ordinary
shares
2012
 261,833,005 
 309,242 
 262,142,247 

The company does not have authorised capital or par value in respect of its issued shares.

On 12 October 2012, 274,443 shares at $5.86 were issued under the executive share plan.

On 15 October 2012, 245,936 shares at $5.86 were issued under the executive share plan.

On 16 November 2012, 58,796 shares at $5.76 were issued under the dividend reinvestment program.

On 8 January 2013, 75,469 shares at $5.87 were issued under the global share plan. 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.

On 10 May 2013, 157,149 shares at $4.06 were issued under the dividend reinvestment program.

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, were 
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 
3.9 per cent (2012: 3.9 per cent ). On 23 September 2011, Nufarm announced that it would 'step-up' the NSS. This resulted in the 
interest margin attached to the NSS being stepped up by 2.0 per cent, with the new interest margin being set at 3.9 per cent as at 
24 November 2011. No other terms were adjusted and there are no further step-up dates. Nufarm retains the right to redeem or 
exchange the NSS on future distribution dates.

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 from the presentation currency of the reporting entity.

Capital profit reserve
This reserve is used to accumulate realised capital profits.

92 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

29. Capital and reserves (continued)
Other reserve
This reserve represents the accrued employee entitlements to share awards that have been charged to the income statement and 
have not yet been exercised. This reserve also holds the debit balance related to the written put option of the 49 per cent interest 
held by the non-controlling shareholders of Altantica Sementes Ltda (Atlantica). As the non-controlling shareholders still have 
present access to the economic benefits with their underlying ownership interest, their non-controlling interest continues to be 
recognised. In the event the written put option is exercised, this debit reserve will be utilised to complete the transaction. This 
reserve also holds the balances related to hedging.

Dividends
An interim dividend of 3 cents per share, totalling $7,883,907 was declared on 27 March 2013 and was paid (net of dividend 
reinvestment program) on 10 May 2013 (2012: 3 cents per share, totalling $7,864,874).

A final dividend of 5 cents per share, totalling $13,147,702 was declared on 25 September 2013, and will be paid on 15 November 
2013 (2012: 3 cents per share, totalling $7,817,469).

Distributions
Distributions recognised in the current year by Nufarm Finance (NZ) Ltd on the Nufarm step-up securities are:

2013
Distribution
Distribution

2012
Distribution
Distribution

Distribution rate 
%

Total amount
$000

Payment
date

Consolidated

7.03
8.11

8,798

15 April 2013
10,146 15 October 2012
18,944

6.61 and 8.61*
6.94

10,253

16 April 2012
8,829 17 October 2011

19,082

* Refer to discussion titled ‘Nufarm step-up securities’ above.

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 $13.974 million (2012: $14.044 million).

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% (2012: 30%)
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

2013 
$000

2012 
$000

 18,771 

 30,421 

 – 
 18,771 

 (4,923)
 25,498 

The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends. In accordance 
with the tax consolidation legislation, the company as the head entity in the tax-consolidated group has also assumed the benefit 
of $18,771,001 (2012: $25,498,018) franking credits. 

Nufarm Limited Annual Report 2013 | 93

Notes to the financial statements continued

30. Earnings per share

Net profit for the year
Net profit attributable to non-controlling 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

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

2013
$000
 81,750 
 (751)
 80,999 
 (13,974)
 67,025 

2012
$000
 72,822 
 (228)
 72,594 
 (14,044)
 58,550 

 67,025 
 67,025 

 58,550 
 58,550 

 (2,224)

 (42,846)

 69,249 

 101,396 

For the purposes of determining basic and diluted earnings per share, the after-tax distributions on NSS are deducted from net profit.

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
2012
2013
262,675,412
261,983,233
263,587,730
262,203,348

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.

Earnings per share for continuing and discontinued operations
Basic earnings per share
From continuing operations

Diluted earnings per share
From continuing 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 and financial instruments
The group has exposure to the following financial risks:

•  credit risk;

•  liquidity risk; and

•  market risk.

Cents per share
2012

2013

 25.5 
 25.5 

 25.4 
 25.4 

26.4
26.3

 22.3 
 22.3 

 22.3 
 22.3 

38.7
38.7

This note presents information about the group’s exposure to each of the above risks, the objectives, policies and processes for 
measuring and managing risk, and the management of capital.

94 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

31. Financial risk management and financial instruments (continued)
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.

The general manager global risk management reports to the chairman of the audit committee and functionally to the chief 
financial officer. He provides a written report of his activities at each meeting of the audit committee. In doing so he has direct 
and ongoing 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.

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’s maximum exposure to credit risk at the reporting date was:

Carrying amount
Trade and other receivables
Cash and cash equivalents
Forward exchange contracts:
Assets

The group’s maximum exposure to credit risk for trade and other receivables at the reporting 
date by geographic region was:

Carrying amount
Australia/New Zealand
Asia
Europe
North America
South America
Trade and other receivables

Consolidated

2013
$000

2012
$000

 792,564 
 264,972 

 764,395 
 191,317 

 2,161 
 1,059,697 

 7,196 
 962,908 

 166,006 
 31,022 
 223,360 
 103,750 
 268,426 
 792,564 

 199,740 
 22,476 
 192,943 
 122,663 
 226,573 
 764,395 

The group’s top five customers account for $120.8 million of the trade receivables carrying amount at 31 July 2013 (2012: $150.6 million). 
These top five customers represent 17 per cent (2012: 22 per cent) of the total receivables.

Nufarm Limited Annual Report 2013 | 95

Notes to the financial statements continued

31. Financial risk management and financial instruments (continued)
Credit risk (continued)
Exposure to credit risk (continued)
Impairment losses
The ageing of the group’s customer 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
Trade receivables

Consolidated

2013
$000
 598,898 
 60,727 
 9,325 
 9,972 
 22,638 
 701,560 
 (24,172)
 677,388 

2012
$000
 578,876 
 85,681 
 1,801 
 4,809 
 16,892 
 688,059 
 (22,278)
 665,781 

Some of the past due receivables are secured by collateral from customers 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 nine years, the bad debt write-off 
amount has averaged 0.03 per cent of sales, with no greater than 0.11 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 acquired through business combinations
Exchange adjustment
Balance at 31 July

Consolidated

2013
$000
 22,278 
 294 
 (1,032)
 39 
 2,593 
 24,172 

2012
$000
 26,587 
 410 
 (410)
 – 
 (4,309)
 22,278 

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.

96 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

31. Financial risk management and financial instruments (continued)
Liquidity risk
Liquidity risk is the risk that the group will encounter difficulty in meeting the obligations associated with its financial liabilities 
that are settled by delivering cash or another financial asset. 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.

On 23 August 2011, Nufarm executed a A$300 million trade receivables securitisation facility. Subsequent to execution, the 
facility size was reduced to A$250 million to reflect the value of trade receivables being used to secure funding under the program 
at the time. On 13 June 2013 the facility size was increased to A$300 million to reflect the increase in the current value of trade 
receivables being used to secure funding under this program. The facility provides funding that aligns with the working capital 
cycle of the company.

On 8 October 2012, the group completed a US$325 million senior unsecured notes offering due in October 2019 (the ‘notes’).

In November 2011, the group finalised a three year A$625 million syndicated bank facility. Concurrent with the issuance of the 
notes, US$250 million of the commitments under the A$625 million senior secured bank facility was cancelled. Subsequently, 
upon the admission of an additional financial institution to the syndicate on 25 January 2013, the syndicated bank facility was 
increased by A$25 million. The amount drawn down under the facility at 31 July 2013 is $164 million (2012: $336 million).

At 31 July 2013, the group had access to debt of $1,322 million (2012: $1,029 million) under the notes, SFA, trade receivables 
securitisation facility and with other lenders.

The majority of debt facilities that reside outside the notes, senior facility agreement (SFA) and the trade receivables securitisation facility 
are regional working capital facilities, primarily located in Brazil and Europe, which at 31 July totalled $343 million (2012: $152 million).

The SFA is secured by assets in the primary geographies in which Nufarm operates including Australia, USA, Canada, UK and 
France. A parent guarantee is provided to support working capital facilities in Brazil and the notes. Total net debt (net of cash) 
at 31 July 2013 was $633.1 million (2012: $467.8 million). The SFA includes covenants of a type normally associated with facilities 
of this kind, and the group was in compliance with these covenants throughout the financial year.

Nufarm Limited Annual Report 2013 | 97

Notes to the financial statements continued

31. Financial risk management and financial instruments (continued)
Liquidity risk (continued)
The following are the contractual maturities of the group’s financial liabilities:

Carrying
amount
$000

Contractual 
cash flows
$000

Less than
1 year
$000

1–2
years
$000

 More than
2 years
$000

 – 
 556,893 
 456,676 
 98,627 
 350,146 
 1,490 
 12,256 

 – 
 556,893 
 470,867 
 101,256 
 502,868 
 1,490 
 98,184 

 – 
 530,335 
 241,563 
 94,863 
 23,471 
 386 
 1,732 

 – 
 4,876 
 197,102 
 363 
 23,471 
 1,104 
 1,657 

 – 
 21,682 
 32,202 
 6,030 
 455,926 
 – 
 94,795 

 22,313 
 – 

 279,592 
 (263,639)

 19,321 
 (20,948)

 19,751 
 (20,948)

 240,520 
 (221,743)

 19,984 
 – 

 222,794 
 (201,393)

 222,794 
 (201,393)

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 (2,161)
 1,516,224 

 105,905 
 (108,483)
 1,766,334 

 105,905 
 (108,483)
 909,546 

 – 
 – 
 227,376 

 – 
 – 
 629,412 

Consolidated 2013
Non-derivative financial liabilities
Bank overdrafts
Trade and other payables
Bank loans – secured
Bank loans – unsecured
Senior unsecured notes
Other loans – unsecured 
Finance lease liabilities – secured

Derivative financial liabilities
Derivatives used for hedging:
Outflow
Inflow
Other derivative contracts:
Outflow
Inflow

Derivative financial assets
Derivatives used for hedging:
Outflow
Inflow
Other derivative contracts:
Outflow
Inflow

98 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

31. Financial risk management and financial instruments (continued)
Liquidity risk (continued)

Consolidated 2012
Non-derivative financial liabilities
Bank overdrafts
Trade and other payables
Bank loans – secured
Bank loans – unsecured
Unsecured note issues
Other loans – unsecured 
Finance lease liabilities – secured

Derivative financial liabilities
Derivatives used for hedging:
Outflow
Inflow
Other derivative contracts:
Outflow
Inflow

Derivative financial assets
Derivatives used for hedging:
Outflow
Inflow
Other derivative contracts:
Outflow
Inflow

Carrying
amount
$000

Contractual 
cash flows
$000

Less than
1 year
$000

1–2
years
$000

 More than
2 years
$000

 – 
 483,108 
 574,762 
 86,402 
 – 
 1,373 
 10,572 

 – 
 483,108 
 604,435 
 86,402 
 – 
 1,373 
 87,158 

 – 
 472,862 
 228,038 
 82,268 
 – 
 557 
 1,382 

 – 
 1,903 
 12,717 
 – 
 – 
 816 
 1,493 

 – 
 8,343 
 363,680 
 4,134 
 – 
 – 
 84,283 

 – 
 – 

 – 
 – 

 – 
 – 

 2,129 
 – 

 179,158 
 (177,029)

 179,158 
 (177,029)

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 (7,196)
 1,151,150 

 183,880 
 (191,076)
 1,257,409 

 183,880 
 (191,076)
 780,040 

 – 
 – 
 16,929 

 – 
 – 
 460,440

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 used to manage the exposure.

Nufarm Limited Annual Report 2013 | 99

Notes to the financial statements continued

31. Financial risk management and financial instruments (continued)
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 group 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 include the US dollar (USD), the Euro, the British pound (GBP), the Australian dollar (AUD), the New Zealand 
dollar and the Brazilian Real (BRL). The group uses foreign exchange contracts and options to manage currency risk.

The group uses foreign exchange contracts and options 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. During the previous financial reporting period, the funding, which was previously advanced to these jurisdictions 
in US dollars, the Euro and the British pound, was converted to Australian dollars. The foreign currency contracts therefore 
primarily cover the exposure of the lenders to movements in the Australian dollar against their local currencies.

During the period the group completed a US$325 million senior unsecured notes offering due in October 2019 (the ‘notes’). 
Currency risk related to the principal amount of the notes has been hedged using cross currency interest rate swap contracts 
that mature on the same date as the notes are due for repayment. These contracts have been designated for hedge accounting.

For accounting purposes, other than the contracts referred to previously, the group has not designated any other derivatives in hedge 
relationships and all movements in fair value are recognised in profit or loss during the period. The net fair value of forward exchange 
contracts in the group, not designated as being in a hedge relationship, used as economic hedges of forecast transactions at 31 July 
2013 was a $17.823 million liability (2012: $5.067 million asset) comprising assets of $2.161 million (2012: $7.196 million) and 
liabilities of $19.984 million (2012: $2.129 million).

Exposure to currency risk
The group’s translation exposure to major foreign currency risks at balance date was as follows, based on notional amounts:

Consolidated
2013
Functional currency of group operation
Australian dollars
US dollars
Euro
UK pounds sterling

Consolidated
2012
Functional currency of group operation
Australian dollars
US dollars
Euro
UK pounds sterling

Net financial assets/(liabilities) – by currency of denomination
GBP
$000

AUD
$000

USD
$000

Euro
$000

 – 
 2,345 
 6,820 
 (14,768)
 (5,603)

AUD
$000

 – 
 39,618 
 336 
 – 
 39,954 

 (15,380)
 – 
 12,581 
 20,802 
 18,003 

USD
$000

 (24,448)
 – 
 38,132 
 56,172 
 69,856 

 (14,715)
 (2,515)
 – 
 (8,771)
 (26,001)

Euro
$000

 (12,396)
 (1,715)
 – 
 (5,682)
 (19,793)

 (19,778)
 – 
 (2,254)
 – 
 (22,032)

GBP
$000

 (24,665)
 – 
 (9,498)
 – 
 (34,163)

Sensitivity analysis
Based on the aforementioned group’s net financial assets/(liabilities) at 31 July, a one per cent strengthening or weakening of 
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 is performed on the same basis for 2012.

100 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

31. Financial risk management and financial instruments (continued)
Market risk (continued)
Sensitivity analysis (continued)

Currency movement
1% change in the Australian dollar exchange rate
1% change in the US dollar exchange rate
1% change in the Euro exchange rate
1% change in the GBP exchange rate

Strengthening
Profit 
or (loss) 
after-tax
2013
$000

Weakening
Profit 
or (loss) 
after-tax
2013
$000

Strengthening
Profit 
or (loss) 
after-tax
2012
$000

Weakening
Profit 
or (loss) 
after-tax
2012
$000

 306 
 127 
 (301)
 (135)

 (313)
 (127)
 303 
 135 

 705 
 226 
 (339)
 (589)

 (714)
 (221)
 343 
 593 

The group’s financial asset and liability profile may not remain constant, and therefore these sensitivities should be used with care.

The following significant exchange rates applied during the year:

AUD
US dollar
Euro
GBP
BRL

Average rate

Reporting date

2013
 1.009 
 0.774 
 0.645 
 2.086 

2012
 1.033 
 0.783 
 0.654 
 1.900 

2013
 0.895 
 0.673 
 0.589 
 2.037 

2012
 1.051 
 0.854 
 0.671 
 2.151 

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, are entered into to achieve an appropriate mix of fixed and floating rate exposures.

The majority of the group’s debt is raised under central borrowing programs. The A$406 million syndicated bank facility and the 
A$300 million trade receivables securitisation facility are considered floating rate facilities. On 8 October 2012, the group completed 
a US$325 million notes issue with a fixed coupon component. Concurrent with the completion of the US$325 million notes issue, 
the group entered into interest rate swaps to manage specifically identified interest rate risks associated with the fixed coupon 
component of the notes. These swaps effectively converted a majority of the fixed interest payable on the notes to floating interest, 
and have been designated for hedge accounting. The group’s earnings are sensitive to changes in interest rates on the floating 
interest rate component of the group’s net borrowings.

Interest rate risk on Nufarm step-up securities
The distribution rate is the average mid-rate for bank bills with a term of six months plus a margin of 3.90 per cent (2012: 3.90 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

Fixed rate instruments
Financial assets
Financial liabilities

Consolidated 
Carrying amount
2012
$000

2013
$000

 34,222 
 (807,416)
 (773,194)

 87,795 
 (673,109)
 (585,314)

 – 
 (111,779)
 (111,779)

 – 
 – 
 – 

Nufarm Limited Annual Report 2013 | 101

Notes to the financial statements continued

31. Financial risk management and financial instruments (continued)
Market risk (continued)
Profile (continued)
A change of 100 basis points (bp) 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 2012.

2013
Variable rate instruments
Total sensitivity

2012
Variable rate instruments
Total sensitivity

Profit or loss

100bp
increase
$000

100bp
decrease
$000

 (7,732)
 (7,732)

 7,732 
 7,732 

 (5,853)
 (5,853)

 5,853 
 5,853 

Fair values
All financial assets and financial liabilities, other than derivatives, are initially recognised at the fair value of consideration paid or 
received, net of transaction costs as appropriate, and subsequently carried at fair value or amortised cost, as indicated in the tables 
below. Derivatives are initially recognised at fair value on the date the contract is entered into and are subsequently remeasured at 
their fair value.

The financial assets and liabilities are presented by class in the tables below at their carrying values, which generally approximate to 
the fair values. In the case of the centrally managed fixed rate debt not swapped to floating rate totalling $111.8 million (2012: $nil), 
the fair value at 31 July 2013 is $109.686 million (2012: $nil).

Consolidated 2013
Cash and cash equivalents
Trade and other receivables
Forward exchange contracts:
  Assets
  Liabilities
Interest rate swaps
Trade and other payables
Bank overdraft
Secured bank loans
Unsecured bank loans
Senior unsecured notes(a)
Other loans
Finance leases

Carried at  
fair value 
through 
profit or loss 
$000
 – 
 – 

Derivatives 
used for 
hedging 
$000
 – 
 – 

Available 
for sale 
$000
 – 
 – 

Financial 
assets/ 
liabilities at 
amortised 
cost 
$000
 264,972 
 792,564 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 2,161 
 (19,984)
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 (17,823)

 – 
 – 
 (22,313)
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 (22,313)

 – 
 – 
 – 
 (579,206)
 – 
 (456,676)
 (98,627)
 (350,146)
 (1,490)
 (12,256)
 (440,865)

Total 
$000
 264,972 
 792,564 
 – 
 2,161 
 (19,984)
 (22,313)
 (579,206)
 – 
 (456,676)
 (98,627)
 (350,146)
 (1,490)
 (12,256)
 (481,001)

Note
15
16

16
24
24
24
15
25
25
25
25
25

(a) Includes $238.3 million (2012: $nil) of centrally managed fixed rate debt swapped to floating rate under fair value hedges, and is consequently fair valued for interest rate risk.

102 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

31. Financial risk management and financial instruments (continued)
Fair values (continued)

Consolidated 2012
Cash and cash equivalents
Trade and other receivables
Forward exchange contracts:
  Assets
  Liabilities
Interest rate swaps
Trade and other payables
Bank overdraft
Secured bank loans
Unsecured bank loans
Senior unsecured notes(a)
Other loans
Finance leases

Carried at 
fair value 
through 
profit or loss 
$000
 – 
 – 

Derivatives 
used for 
hedging 
$000
 – 
 – 

Available  
for sale 
$000
 – 
 – 

Financial 
assets/ 
liabilities at 
amortised 
cost 
$000
 191,317 
 764,395 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 7,196 
(2,129)
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 5,067 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 – 
 – 
 – 
 (483,108)
 – 
 (574,762)
 (86,402)
 – 
 (1,373)
 (10,572)
 (200,505)

Note
15
16

16
24
24
24
15
25
25
25
25
25

Total 
$000
 191,317 
 764,395 

 7,196 
 (2,129)
 – 
 (483,108)
 – 
 (574,762)
 (86,402)
 – 
 (1,373)
 (10,572)
 (195,438)

(a) Includes $238.3 million (2012: $nil) of centrally managed fixed rate debt swapped to floating rate under fair value hedges, and is consequently fair valued for interest rate risk.

Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined 
as follows:

•  Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

•  Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly 

(i.e., as prices) or indirectly (i.e., derived from prices); and

•  Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

2013
Derivative financial assets

Derivative financial liabilities

2012
Derivative financial assets

Derivative financial liabilities

There have been no transfers between levels in either 2013 or 2012.

Level 1
$000
 – 
 – 

Consolidated

Level 2
$000
 2,161 
 2,161 

Level 3
$000
 – 
 – 

Total
$000
 2,161 
 2,161 

 – 
 – 

 (42,297)
 (42,297)

 – 
 – 

 (42,297)
 (42,297)

Consolidated

Level 1
$000
 – 
 – 

Level 2
$000
 7,196 
 7,196 

 – 
 – 

 (2,129)
 (2,129)

Level 3
$000
 – 
 – 

 – 
 – 

Total
$000
 7,196 
 7,196 

 (2,129)
 (2,129)

Nufarm Limited Annual Report 2013 | 103

Notes to the financial statements continued

31. Financial risk management and financial instruments (continued)
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 material items. Funds employed is defined as 
shareholders’ funds plus total interest bearing debt. The board of directors determines the level of dividends to ordinary 
shareholders and reviews the group’s total shareholder return with similar 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. ROFE 
objectives are set by the board at the beginning of each year. There is a target and a stretch hurdle. These numbers will be based 
on the budget and growth strategy. The ROFE return for the year ended 31 July 2013 was 8.8 per cent (2012: 10.4 per cent).

There were no changes in the group’s approach to capital management during the year.

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

2013
$000
 10,114 
 11,453 
 21,806 
 141,166 
 184,539 

2012
$000
 8,569 
 9,429 
 17,956 
 127,427 
 163,381 

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 commitments
The group had contractual obligations to purchase plant and equipment for $6.116 million at 31 July 2013 (2012: $8.253 million).

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.

Guarantee facility for Eastern European joint ventures with FMC Corporation.

Consolidated
2012
2013
$000
$000
 6,225 
 6,983 

Environmental guarantee given to the purchaser of land and buildings at Genneviliers for EUR 8.5 million. 

 12,630 

 9,953 

Insurance bond for EUR 2.717 million established to make certain capital expenditures at Gaillon plant in France.

 3,843 

 3,182 

Brazilian taxation proceedings(a)

Contingent liabilities

 74,624 

 86,163 

 97,322   106,281 

(a)   The group has a contingent liability for an amount of $74.624 million (July 2012: $86.163 million) in respect of potential pre-acquisition tax liabilities of its Brazilian business 
acquired in 2007. In June 2010 the group commenced arbitration proceedings against the previous owners of the Brazilian business that sought to confirm that the tax 
indemnification clauses contained in the initial Investment Agreement and the subsequent Share Purchase Agreement (‘the Agreements’) are effective in allowing Nufarm 
to recover amounts from the previous owners.

 In November 2012 Nufarm received the award from the Arbitral Tribunal. Whilst the award, and subsequent clarification ruling, confirmed the validity of the indemnities provided 
by the previous owners of the Brazilian business, Nufarm continues to work through the application of the award to the many specific tax cases.

 Nufarm will only be liable to the extent that the tax authorities are ultimately successful in pursuing the claims for primary tax, penalties and interest. In which case, Nufarm 
will seek to enforce the tax indemnities provided by the former owners in order to recover, to the extent possible under the Agreements, the tax paid. It is acknowledged that the 
cash outflow (if any) in the event the tax authorities are ultimately successful in pursuing their claims will pre-date cash inflows Nufarm will obtain by enforcing the indemnities.

 Further to the above, the group has a contingent asset for an amount of $29.315 million (July 2012: $28.429 million) in respect of potential pre-acquisition tax credits of its 
Brazilian business acquired in 2007. Currently, the validity of the credits is before the Brazilian courts and if found to be valid, can be used to offset federal tax obligations.

  Nufarm’s share of the contingent liability after applying the former owner’s indemnities’ is estimated to be $31.147 million.

104 | Nufarm Limited Annual Report 2013

 
 
 
Notes to the financial statements continued

35. Group entities

Notes

 Place of incorporation

Percentage of shares held
2012

2013

Parent entity
Nufarm Limited – ultimate controlling entity

Subsidiaries
Access Genetics Pty Ltd
Agcare Biotech Pty Ltd
Agchem Receivables Corporation
Agryl Holdings Limited
Ag-seed Research Pty Ltd
Agturf Inc
AH Marks (New Zealand) Limited
AH Marks Australia Pty Ltd
AH Marks Holdings Limited
Artfern Pty Ltd
Atlantica Sementes Ltda
Australis Services Pty Ltd
Bestbeech Pty Ltd
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
First Classic Pty Ltd
Framchem SA
Frost Technology Corporation
Greenfarm Hellas Chemicals SA
Growell Limited
Grupo Corporativo Nufarm SA
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
Masmart Pty Ltd
Mastra Corporation Pty Ltd

 (a) 
 (a) 

 (a) 
 (a) 

 (a) 

 (a) 

 (a) 
 (a) 
 (a) 

 (a) 

 (a) 
 (a) 
 (a) 
 (a) 

 (a) 

 (a) 

 (a)(b) 
 (a) 

 Australia 
 Australia 
 USA 
 Australia 
 Australia 
 USA 
 New Zealand 
 Australia 
 UK 
 Australia 
 Brazil 
 Australia 
 Australia 
 Australia 
 Netherlands 
 Australia 
 New Zealand 
 New Zealand 
 Australia 
 Australia 
 Australia 
 Australia 
 Canada 
 Singapore 
 New Zealand 
 Australia 
 Egypt 
 USA 
 Greece 
 UK 
 Guatemala 
 France 
 France 
 Australia 
 France 
 Malaysia 
 USA 
 Guatemala 
 Mexico 
 USA 
 Australia 
 Australia 

 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 
 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 
 100 
 100 
 100 
 100 
 70 

Nufarm Limited Annual Report 2013 | 105

Notes to the financial statements continued

35. Group entities (continued)

Mastra Corporation Sdn Bhd
Mastra Corporation USA Pty Ltd
Mastra Holdings Sdn Bhd
Mastra Industries Sdn Bhd
Medisup International NV
Medisup Securities Limited
Midstates Agri Services de Mexico
Midstates Agri Services Inc
Nufarm (Asia) Pte Ltd
Nufarm Africa SARL AU
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
Nufarm Canada Receivables Partnership
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 Europe GmbH
Nufarm Finance BV
Nufarm Finance (NZ) Limited
Nufarm GmbH
Nufarm GmbH & Co KG
Nufarm Grupo Mexico
Nufarm Holdings (NZ) Limited
Nufarm Holdings BV
Nufarm Holdings s.a.s
Nufarm Hong Kong Investments Ltd
Nufarm Hungaria Kft
Nufarm Inc.

106 | Nufarm Limited Annual Report 2013

Notes

 Place of incorporation

Percentage of shares held
2012

2013

 (a) 

 (a) 

 (a) 

 Malaysia 
 Australia 
 Malaysia 
 Malaysia 
 N. Antillies 
 Australia 
 Mexico 
 USA 
 Singapore 
 Morocco 
 South Africa 
 Canada 
 USA 
 Zimbabwe 
 USA 
 USA 
 Malaysia 
 Australia 
 Netherlands 
 Canada 
 China 
 Chile 
 Colombia 
 UK 
 Costa Rica 
 Guatemala 
 Mexico 
 Panama 
 Venezuela 
 Ecuador 
 Germany 
 Brazil 
 Spain 
 Germany 
 Netherlands 
 New Zealand 
 Austria 
 Austria 
 Mexico 
 New Zealand 
 Netherlands 
 France 
 Hong Kong 
 Hungary 
 USA 

 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 – 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 

 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 
 N/A 
 – 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 

Notes to the financial statements continued

35. Group entities (continued)

Nufarm Industria Quimica e Farmaceutica SA
Nufarm Insurance Pte Ltd
Nufarm Investments Cooperatie WA
Nufarm Italia srl
Nufarm KK
Nufarm Korea Ltd
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
Nufarm s.a.s 
Nufarm SA
Nufarm Suisse Sarl
Nufarm Technologies (M) Sdn Bhd 
Nufarm Technologies USA
Nufarm Technologies USA Pty Ltd
Nufarm Treasury Pty Ltd
Nufarm UK Limited
Nufarm Ukraine LLC
Nufarm USA Inc
Nugrain Pty Ltd
Nuseed Americas Inc
Nuseed do Brazil S.A.
Nuseed Holding Company
Nuseed Pty Ltd
Nuseed SA
Nuseed Serbia d.o.o.
Nutrihealth Grains Pty Ltd
Nutrihealth Pty Ltd
Opti-Crop Systems Pty Ltd
Pharma Pacific Pty Ltd
PT Agrow
PT Crop Care
PT Nufarm Indonesia
Richardson Seeds Ltd
Seeds 2000 Inc
Seeds 2000 Argentina SRL
Selchem Pty Ltd

Notes

 Place of incorporation

Percentage of shares held
2012

2013

 Brazil 
 Singapore 
 Netherlands 
 Italy 
 Japan 
 Korea 
 Malaysia 
 UK 
 Malaysia 
 Australia 
 New Zealand 
 Peru 
 Australia 
 Portugal 
 Romania 
 France 
 Argentina 
 Switzerland 
 Malaysia 
 New Zealand 
 Australia 
 Australia 
 UK 
 Ukraine 
 USA 
 Australia 
 USA 
 Brazil 
 USA 
 Australia 
 Argentina 
 Serbia 
 Australia 
 Australia 
 Australia 
 Australia 
 Indonesia 
 Indonesia 
 Indonesia 
 USA 
 USA 
 Argentina 
 Australia 

 (a) 

 (a) 

 (a) 
 (a) 

 (a) 

 (a) 

 (a) 
 (a) 

 (a) 

 (a) 

 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 
 75 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 

 100 
 100 
 100 
 100 
 100 
 N/A 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100
 100 
 100 
 100 
 100 
 100 
 N/A 
 100 
 100 
 100 
 100 
 100 
 100 
 75 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 

(a)   These entities have entered into a deed of cross guarantee dated 21 June 2006 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.

(b)  Masmart Pty Ltd was previously named ‘ACN000425927 Pty Ltd’.

Nufarm Limited Annual Report 2013 | 107

Notes to the financial statements continued

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 21 June 2006 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 2013 is set out as follows:

Summarised income statement and retained profits
Profit before income tax expense
Income tax expense
Net profit attributable to members of the closed group

Retained profits at the beginning of the period
Adjustments for entities entering the deed of cross guarantee
Dividends paid
Retained profits at the end of the period

Balance sheet
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

Current liabilities
Trade and other payables
Employee benefits
Current tax payable
Total current liabilities

Non-current liabilities
Payables
Interest bearing loans and borrowings
Deferred tax liabilities
Employee benefits
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS

Equity
Share capital
Reserves
Retained earnings
TOTAL EQUITY

108 | Nufarm Limited Annual Report 2013

Consolidated

2013
$000

2012
$000

 1,019 
 10,446 
 11,465 

 126,356 
 (1,459)
 (15,703)
 120,659 

 25,224 
 664,394 
 194,463 
 9,472 
 893,553 

 (32,368)
 (3,039)
 (35,407)

 169,628 
 – 
 (7,865)
 126,356 

 29,073 
 407,800 
 159,509 
 13,327 
 609,709 

 4,177 
 1,153,447 
 52,310 
 155,366 
 107,758 
 1,473,058 
 2,366,611 

 2,658 
 1,120,632 
 38,019 
 159,337 
 23,806 
 1,344,452 
 1,954,161 

 568,350 
 11,155 
 – 
 579,505 

 512,574 
 11,656 
 – 
 524,230 

 24,313 
 460,059 
 16,629 
 11,143 
 512,144 
 1,091,649 
 1,274,962 

 – 
 131,914 
 7,126 
 9,464 
 148,504 
 672,734 
 1,281,427 

 1,063,992 
 90,311 
 120,659 
 1,274,962 

 1,059,522 
 95,549 
 126,356 
 1,281,427

Notes to the financial statements continued

37. Parent entity disclosures

Result of the parent entity
Profit/(loss) for the period
Other comprehensive income
Total comprehensive profit/(loss) for the period

Financial position of the parent entity at year end
Current assets
Total assets

Current liabilities
Total liabilities

Total equity of the parent entity comprising of:
Share capital
Reserves
Accumulated losses
Retained earnings
Total equity

Company

2013
$000

2012
$000

 8,833 
 2,385 
 11,218 

 (30,344)
 (1,205)
 (31,549)

 1,106,952 
 1,447,739 

 1,096,826 
 1,432,484 

 188,746 
 189,073 

 173,448 
 173,714 

 1,063,992 
 38,651 
 (30,344)
 186,367 
 1,258,666 

 1,059,522 
 36,355 
 (30,344)
 193,237 
 1,258,770 

Parent entity contingencies
The parent entity is one of the guarantors of the Senior Facility Agreement (SFA) and would be obliged, along with the other 
guarantors, to make payment on the SFA in the unlikely event of a default by one of the borrowers. The parent entity also provides 
guarantees to support several of the regional working capital facilities located in Brazil and Europe, and the senior unsecured notes.

Parent entity capital commitments for acquisition of property, plant and equipment
There are no capital commitments for the parent entity in 2013 or 2012.

38. Reconciliation of cash flows from operating activities

Cash flows from operating activities
Profit/(loss) for the period
Adjustments for:
Dividend from associated company
Amortisation and impairment of intangibles
Depreciation
Investment in associates write down
Gain on disposal of non-current assets and investments
Share of (profits)/losses of associates net of tax
Financial expense
Interest paid
Tax expense
Taxes paid

Movements in working capital items:
(Increase)/decrease in receivables
(Increase)/decrease in inventories
Increase/(decrease) in payables
Exchange rate change on foreign controlled entities working capital items

Net operating cash flows

Consolidated

2013
$000

2012
$000

 81,750 

 72,822 

 73 
 33,612 
 41,564 
 – 
 (2,744)
 60 
 65,460 
 (49,958)
 31,173 
 (14,347)
 186,643 

 (16,005)
 (281,329)
 65,917 
 107,561 
 (123,856)
 62,787 

 151 
 27,455 
 38,034 
 1,993 
 (333)
 (378)
 61,796 
 (48,824)
 37,501 
 (28,127)
 162,090 

 (61,231)
 39,607 
 84,830 
 (58,791)
 4,415 
 166,505 

Nufarm Limited Annual Report 2013 | 109

Notes to the financial statements continued

39. 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 (except where denoted otherwise).

Executives
Non-executive directors
BF Benson
DG McGauchie AO (Chairman)
P Binfield(1)
AB Brennan 
BJ Croft 
GR Davis 
R Heath
FA Ford (appointed 10 October 2012)
G Hunt(2)
Dr RJ Edgar (retired 27 March 2012)
DA Mellody(3)
Dr WB Goodfellow
RF Ooms(4)
GA Hounsell (retired 8 October 2012)
PM Margin (appointed 3 October 2011)
MJ Pointon
Dr JW Stocker AO (retired 1 December 2011) DA Pullan(5)
T Takasaki (appointed 6 December 2012)

RG Reis
E Prado(6)

Title
Group executive, agriculture
Chief financial officer (CFO)
Group executive, human resources and organisation development
Group executive, corporate services and company secretary
Group executive, global marketing and business development
Group executive, supply chain and strategic procurement
Group general manager chemicals
Group executive, innovation and development
Group executive, operations
Group executive, corporate strategy and external affairs
Group executive, manufacturing

Executive director
DJ Rathbone AM – Managing director and chief executive officer

1. Mr P Binfield was appointed as CFO with effect from 6 November 2011.

2.  Mr G Hunt was appointed as group general manager of global marketing and business development with effect from 6 February 2012.

3.  Mr DA Mellody, formerly the group general manager global marketing, moved into a new executive role of group general manager supply chain and strategic procurement 

with effect from 1 February 2012.

4. Mr RF Ooms resigned as group general manager chemicals with effect from 29 February 2012.

5. Mr DA Pullan resigned as group general manager operations with effect from 31 July 2013.

6. Mr E Prado was appointed as group executive, manufacturing with effect from 1 July 2013.

Key management personnel compensation
The key management personnel compensation included in personnel expenses (see note 9) are as follows:

Consolidated

2013
$
 9,182,961 
 358,079 
 1,811,459 
 799,000 
 200,271 

2012
$
 10,051,964 
 483,344 
 1,141,807 
 1,525,000 
 267,505 

 12,351,770 

 13,469,620 

Short term employee benefits
Post-employment benefits
Equity compensation benefits
Termination benefits
Other long term benefits

110 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

39. Key management personnel disclosures (continued)
Individual director’s and executive’s compensation disclosures
Information regarding individual director’s and executive’s compensation is provided in the remuneration report section of the 
directors’ report.

Apart from the details disclosed in this note, no director has entered into a material contract with the company or entities in the group 
since the end of the previous financial year and there were no material contracts involving directors’ interest existing at year end.

Loans to key management personnel and their related parties
There were no loans to key management personnel at 31 July 2013 (2012: nil).

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 arm’s length basis.

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
The movement during the reporting period in the number of rights over ordinary shares in Nufarm Limited held directly, indirectly 
or beneficially, by each key management person, including their related parties, is as follows:

Options/rights over
ordinary shares in
Nufarm Ltd

Scheme

Balance 
at 1 August
2012

Granted as
remuneration

Exercised

Net

Balance 
change at 31 July
2013

other

Vested 
Vested 
during  at 31 July

2013

2013(a)

2013
Directors
DJ Rathbone(b)

Executives
BF Benson

P Binfield

BJ Croft

R Heath

G Hunt

DA Mellody

MJ Pointon

DA Pullan

RG Reis

Total

LTI performance

 180,749 

 134,282 

 – 

 – 

 315,031 

 – 

LTI performance
STI deferred
LTI performance
STI deferred
LTI performance
STI deferred
LTI performance
STI deferred
LTI performance
STI deferred
LTI performance
STI deferred
LTI performance
STI deferred
LTI performance
STI deferred
LTI performance
STI deferred

 34,740 
 – 
 54,710 
 – 
 16,040 
 – 
 15,790 
 – 
 52,588 
 – 
 26,320 
 – 
 18,340 
 – 
 36,320 
 – 
 30,080 
 – 
 465,677 

 25,562 
 42,404 
 42,578 
 18,624 
 12,258 
 19,580 
 11,954 
 19,274 
 38,288 
 11,776 
 19,552 
 31,204 
 16,271 
 22,028 
 26,724 
 44,332 
 22,770 
 36,714 
 596,175 

 – 
 (21,202)
 – 
 (9,312)
 – 
 (9,790)
 – 
 (9,637)
 – 
 (5,888)
 – 
 (15,602)
 – 
 (11,014)
 – 
 (22,166)
 – 
 (18,357)
 (122,968)

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 (63,044)
 (22,166)
 – 
 – 
 (85,210)

 60,302 
 21,202 
 97,288 
 9,312 
 28,298 
 9,790 
 27,744 
 9,637 
 90,876 
 5,888 
 45,872 
 15,602 
 34,611 
 11,014 
 – 
 – 
 52,850 
 18,357 
 853,674 

 – 
 21,202 
 – 
 9,312 
 – 
 9,790 
 – 
 9,637 
 – 
 5,888 
 – 
 15,602 
 – 
 11,014 
 – 
 22,166 
 – 
 18,357 
 122,968 

 – 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

(a) All options/rights that are vested are exerciseable.

(b) DJ Rathbone STI is deferred in cash.

Nufarm Limited Annual Report 2013 | 111

Notes to the financial statements continued

39. Key management personnel disclosures (continued)
Options and rights over equity instruments granted as compensation (continued)

Options/rights over
ordinary shares in
Nufarm Ltd
2012
Directors
DJ Rathbone

Executives
BF Benson
P Binfield
BJ Croft
R Heath
G Hunt
DA Mellody
MJ Pointon
DA Pullan
RG Reis
Total

Scheme

Balance 
at 1 August
2011

Granted as
remuneration

Exercised

Net

Balance 
change at 31 July
2012

other

Vested 
Vested 
during  at 31 July

2012

2012(a)

LTI performance

LTI performance
LTI performance
LTI performance
LTI performance
LTI performance
LTI performance
LTI performance
LTI performance
LTI performance

 – 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 180,749 

 34,740 
 54,710 
 16,040 
 15,790 
 52,588 
 26,320 
 18,340 
 36,320 
 30,080 
 465,677 

 – 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 – 

 180,749 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 34,740 
 54,710 
 16,040 
 15,790 
 52,588 
 26,320 
 18,340 
 36,320 
 30,080 
 465,677 

 – 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 – 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

(a) All options/rights that are vested are exerciseable.

(b) DJ Rathbone STI is deferred in cash.

112 | Nufarm Limited Annual Report 2013

Notes to the financial statements continued

39. Key management personnel disclosures (continued)
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
2013
Directors
DG McGauchie1
DJ Rathbone4
AB Brennan
GR Davis
FA Ford (appointed 10 October 2012)
Dr WB Goodfellow 1,2
GA Hounsell (retired 8 October 2012)1, 3
PM Margin
T Takasaki (appointed 6 December 2012)

Executives
BF Benson
P Binfield 
BJ Croft
R Heath
G Hunt 
DA Mellody
MJ Pointon
E Prado (appointed 1 July 2013)
DA Pullan (retired 31 July 2013)3
RG Reis
Total

Balance at 
1 August 2012

Granted as 
remuneration

On exercise
of rights

Net change 
other

Balance at 
31 July 2013

 31,239 
 11,676,031 
 10,000 
 40,000 
 – 
 1,141,491 
 43,723 
 2,458 
 – 

 70,783 
 30,000 
 36,040 
 218,300 
 10,000 
 34,848 
 37,292 
 – 
 187,242 
 131,811 
 13,701,258 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 21,202 
 9,312 
 9,790 
 9,637 
 5,888 
 15,602 
 11,014 
 – 
 22,166 
 18,357 
 122,968 

 15,000 
 50,000 
 – 
 – 
 – 
 1,925 
 (43,723)
 – 
 – 

 – 
 – 
 52 
 – 
 10,000 
 (18,075)
 – 
 – 
 (209,408)
 – 
 (194,229)

 46,239 
 11,726,031 
 10,000 
 40,000 
 – 
 1,143,416 
 – 
 2,458 
 – 

 91,985 
 39,312 
 45,882 
 227,937 
 25,888 
 32,375 
 48,306 
 – 
 – 
 150,168 
 13,629,997 

Nufarm Limited Annual Report 2013 | 113

Notes to the financial statements continued

39. Key management personnel disclosures (continued)
Movements in shares (continued)

Shares held in Nufarm Ltd
2012
Directors
DG McGauchie1
DJ Rathbone4
AB Brennan 
GR Davis
Dr RJ Edgar (resigned 27 March 2012)
Dr WB Goodfellow1,2
GA Hounsell1
PM Margin (appointed 3 October 2011)
Dr JW Stocker (retired 1 December 2011)1,3

Executives
BF Benson
P Binfield (appointed 7 November 2012)
BJ Croft
R Heath
G Hunt (appointed 6 February 2012)
DA Mellody
RF Ooms (retired 27 March 2012)
MJ Pointon
DA Pullan
RG Reis
Total

Balance at 
1 August 2011

Granted as 
remuneration

On exercise 
of rights

Net change 
other

Balance at 
31 July 2012

 31,239 
 11,676,031 
 10,000 
 20,000 
 13,000 
 1,120,551 
 43,723 
 – 
 41,521 

 33,068 
 – 
 19,990 
 206,250 
 – 
 16,773 
 333,409 
 19,217 
 159,527 
 104,096 
 13,848,395 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 27,715 
 – 
 12,050 
 12,050 
 – 
 18,075 
 18,075 
 18,075 
 27,715 
 27,715 
 161,470 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 – 
 – 
 – 
 20,000 
 (13,000)
 20,940 
 – 
 2,458 
 (41,521)

 10,000 
 30,000 
 4,000 
 – 
 10,000 
 – 
 (351,484)
 – 
 – 
 – 
 (308,607)

 31,239 
 11,676,031 
 10,000 
 40,000 
 – 
 1,141,491 
 43,723 
 2,458 
 – 

 70,783 
 30,000 
 36,040 
 218,300 
 10,000 
 34,848 
 – 
 37,292 
 187,242 
 131,811 
 13,701,258 

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 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 (430,434 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 (120,000 shares).
(iii)  531 Trust (400,861 shares). Dr Goodfellow and EW Preston are trustees of 531 Trust.
(iv)  Auckland Medical Research Foundation (26,558 step-up securities). Dr Goodfellow does not have a beneficial interest in these step-up securities.
(v)   Trustees of the Goodfellow Foundation (33,854 shares and 1,338 step-up securities). Dr Goodfellow is chairman of the foundation board and does not have a beneficial interest 

in these shares or step-up securities.

(vi)  Archem Trading (NZ) Ltd (700 step-up securities).

3.  The shareholding of GA Hounsell, Dr JW Stocker, Dr RJ Edgar and GDW Curlewis has been removed under the ‘net change other’ column due to their retirement as directors. 

The shareholding of DA Pullan has been removed under the ‘net change other’ column due to his resignation from the company on 31 July 2013.

4. DJ Rathbone holds 1,500 step-up securities at 31 July 2013 (2012: 1,500).

114 | Nufarm Limited Annual Report 2013

 
 
 
 
 
 
Notes to the financial statements continued

40. 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.

(b) Transactions with associated parties

Excel Crop Care Ltd

F&N joint ventures

Sumitomo Chemical Company Ltd

Purchases from
Trade payable
Sales to 
Trade payable
Trade receivable
Sales to 
Purchases from
Trade receivable
Trade payable

These transactions were undertaken on commercial terms and conditions.

Consolidated

2013
$000
 – 
 – 
 41,427 
 – 
 38,249 
 30,822 
 48,840 
 1,913 
 12,618 

2012
$000
 – 
 – 
 32,454 
 99 
 25,554 
 15,737 
 27,545 
 5,868 
 14,675 

Nufarm Limited Annual Report 2013 | 115

Notes to the financial statements continued

41. Auditors’ remuneration

Audit services
KPMG Australia
Audit and review of group financial report

Overseas KPMG firms
Audit and review of group and local financial reports

Other auditors
Audit and review of financial reports
Audit services remuneration

Other services
KPMG Australia
Other assurance services
Other advisory services
Overseas KPMG firms
Other assurance services
Other services remuneration

Consolidated

2013
$000

2012
$000

 546 

 615 

 1,149 
 1,695 

 79 
 1,774 

 55 
 – 

 79 
 134 

 1,022 
 1,637 

 259 
 1,896 

 356 
 41 

 2 
 399 

42. Subsequent events
A final dividend of 5 cents per share, totalling $13,147,702 was declared on 25 September 2013 and will be paid on 
15 November 2013 (2012: 3 cents per share, totalling $7,817,469).

116 | Nufarm Limited Annual Report 2013

Directors’ declaration

1. 

In the opinion of the directors of Nufarm Limited (the company): 

(a)   the consolidated 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 group's financial position as at 31 July 2013 and of its 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; and

(b)   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. 

3. 

4. 

 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.

 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 2013.

 The directors draw attention to note 2 to the consolidated financial statements, which includes a statement of compliance 
with International Financial Reporting Standards.

Signed in accordance with a resolution of the directors:

Dated at Melbourne this 25th day of September 2013.

DG McGauchie
Director

DJ Rathbone
Director

Nufarm Limited Annual Report 2013 | 117

 
 
 
 
 
 
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 consolidated balance 
sheet as at 31 July 2013, consolidated income statement and consolidated statement of comprehensive income, consolidated 
statement of changes in equity and consolidated statement of cash flows for the year ended on that date, notes 1 to 42 comprising 
a summary of significant accounting policies and other explanatory information 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 of the financial report that gives a true and fair view in accordance 
with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is 
necessary to enable the preparation of the financial report that is free from material misstatement whether due to fraud or error. 
In note 2(a), the directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, 
that the financial statements of the group comply 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 of the financial report that gives a true and fair view 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, a true and fair view which is consistent with our understanding of the 
group’s financial position and of its performance.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

118 | Nufarm Limited Annual Report 2013

KPMG, an Australian partnership and a member 
firm of the KPMG network of independent member 
firms affiliated with KPMG International Cooperative 
(KPMG International), a Swiss entity.

Liability limited by a scheme approved 
under Professional Standards Legislation.

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 the group is in accordance with the Corporations Act 2001, including:

(i)   giving a true and fair view of the group’s financial position as at 31 July 2013 and of its performance for the year 

ended on that date; and

(ii)  complying with Australian Accounting Standards and the Corporations Regulations 2001.

(b)  the financial report also complies with International Financial Reporting Standards as disclosed in note 2(a).

Report on the remuneration report
We have audited the remuneration report included under the heading ‘remuneration report’ of the directors’ report for the year 
ended 31 July 2013. 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 2013, complies with Section 300A of the 
Corporations Act 2001.

KPMG

BW Szentirmay
Partner

Melbourne
25 September 2013

Nufarm Limited Annual Report 2013 | 119

 
 
Shareholder and statutory information

Details of shareholders, shareholdings and top 20 shareholders

Listed securities – 25 September 2013
Fully paid ordinary shares 

Number of 
holders 
10,807

Number of 
securities 
262,954,040

Percentage held 
by top 20
84.98

Twenty largest shareholders 
Sumitomo Chemical Company Limited
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
J P Morgan Nominees Australia Limited
Amalgamated Dairies Limited
Citicorp Nominees Pty Limited
Falls Creek No 2 Pty Ltd
JP Morgan Nominees Australia Limited 
Citicorp Nominees Pty Limited 
Challenge Investment Company Limited
BNP Paribas Noms Pty Ltd 
HSBC Custody Nominees (Australia) Limited 
Mr Edgar William Preston + Mr Paul Gerard Keeling 
Pacific Custodians Pty Limited 
GBH Trustee Services Limited + Mr Aaron Craig Quintal
Forsyth Barr Custodians Ltd 
QIC Limited
Douglas Industries Limited
Moturua Properties Ltd
Mirrabooka Investments Limited

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 

Ordinary 
shares as 
at 25.09.13 
60,210,136
37,438,421
31,138,475
25,493,637
14,805,328
14,517,972
10,763,092
5,780,636
3,220,922
3,130,282
2,865,998
2,368,722
2,364,282
1,917,835
1,850,000
1,330,066
1,220,077
1,170,866
964,455
900,000

Percentage of 
issued capital 
as at 25.09.13
22.90
14.24
11.84
9.70
5.63
5.52
4.09
2.20
1.22
1.19
1.09
0.90
0.90
0.73
0.70
0.51
0.46
0.45
0.37
0.34

Number of  
holders as 
at 25.09.13

Ordinary 
shares held as 
at 25.09.13

4,925
4,501
854
470
57

2,174,823
10,831,593
6,099,719
10,176,039
233,671,866

Of these, 1,009 shareholders held less than a marketable parcel of shares of $500 worth of shares (103 shares). In accordance 
with the ASX Listing Rules, the last sale price of the company’s shares on the ASX on 25 September 2013 was used to determine 
the number of shares in a marketable parcel.

120 | Nufarm Limited Annual Report 2013

 
Shareholder and statutory information continued

Stock exchanges on which securities are listed
Ordinary shares: Australian Stock Exchange Limited.

Substantial shareholders
In accordance with section 671B of the Corporations Act, as at 25 September 2013, 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

Paradice Investments Management Pty Ltd
Sumitomo Chemical Company Limited
Nufarm Limited1
Amalgamated Dairies Limited
The Khyber Pass Investment Ltd 2,6
Glade Buildings Ltd 3,6
Hauraki Trading Co. Ltd 4
PG Keeling & EW Preston (Oxford Trustees)5

Date of notice
9 September 2013
10 June 2011
10 June 2011
31 May 2010
31 May 2010
31 May 2010
31 May 2010
31 May 2010

Number 
13,261,120
60,210,136
60,210,136
14,330,798
14,349,658
14,692,730
14,679,639
14,711,590

Interest %
5.04
23
23
5.47
5.48
5.61
5.61
5.62

1.  Nufarm Limited has a relevant interest in the shares held by Sumitomo Chemical Company. The relevant interest arises under a Shareholder Deed dated 22 January 2010 between 

Nufarm and Sumitomo which contains certain obligations relating to the voting and disposal of shares in Nufarm by Sumitomo.

2.  The Khyber Pass Investment Co. 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.  Glade Buildings 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.  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.

5.  Oxford Trustees has a relevant interest in Glade Buildings 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 Buildings Ltd, Khyber Pass Ltd and Amalgamated Dairies Ltd.

6.  On 30 March 2012 Glade Buildings Ltd and the Kyber Pass Investment Co. Ltd amalgamated to become The Kyber Pass Investment Co. Ltd. Glade Buildings Ltd was struck off as a 

NZ Limited Company.

Voting rights
On a show of hands, every shareholder present in person or represented by a proxy or representative shall have one vote and on a 
poll every shareholder who is present in person or represented by a proxy or representative shall have one vote for every fully paid 
share held by the shareholder.

Shareholder information
Annual general meeting
The annual general meeting of Nufarm Limited will be held on Thursday 5 December 2013 at 10.00am in Bayside Rooms 5 & 6, Level 2, 
RACV Club, 501 Bourke Street, Melbourne, Victoria. 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.

Nufarm Limited Annual Report 2013 | 121

Shareholder and statutory information continued

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:

(a) one vote for each fully paid share; and

(b) voting rights in proportion to the paid up amount of the issue price for partly paid shares.

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.

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’
Step 7  You will be asked to choose a User ID and password. Please keep this information confidential. 

By telephone via InvestorPhone:
InvestorPhone provides telephone access 24 hours a day 7 days a week.

Step 1  Call the Nufarm shareholder information line on 1300 652 479 (within Australia) or +61 3 9415 4360 (outside Australia).
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

122 | Nufarm Limited Annual Report 2013

 
 
 
Shareholder and statutory information continued

Shareholder enquires
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@computershare.com.au

Key dates
29 October 2013*  Annual report sent to shareholders
5 December 2013  Annual general meeting
26 March 2014* 
31 July 2014   

Announcement of profit result for half year ending 31 January 2014
End of financial year

* Subject to confirmation.

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

Nufarm Limited Annual Report 2013 | 123

 
Directory

Directors
DG McGauchie AO – Chairman
DJ Rathbone AM – Managing director
Ms AB Brennan
GR Davis
FA Ford
Dr WB Goodfellow
PM Margin
T Takasaki

Company secretary
R Heath

Solicitors
Arnold Bloch Leibler & Co
333 Collins Street
Melbourne Victoria 3000 Australia

Auditors
KPMG
147 Collins Street
Melbourne Victoria 3000 Australia

Trustee for Nufarm step-up securities
Permanent Trustee Company Ltd
35 Clarence Street
Sydney NSW 2000

Share registrar
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 NZ 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

Website
www.nufarm.com

Nufarm Limited
ACN 091 323 312

124 | Nufarm Limited Annual Report 2013

Special thanks to Gillian Sweetland who has 
produced Nufarm’s annual and interim reports 
since 2000. Gillian has been an invaluable 
contributor and a highly valued colleague.

Contents

01  About Nufarm

02  Key events

02  Facts in brief

04  Managing director’s review

11  Business review

16  Health, safety and environment

18  Executive management

20  Board of directors

22 

Information on the company

25  Corporate governance

32  Financial report

33  Directors’ report

47  Lead auditor’s independence declaration

48 

Income statement

49  Statement of comprehensive income

50  Balance sheet

51  Statement of cash flows

52  Statement of changes in equity

54  Notes to the financial statements

117  Directors’ declaration

118 

Independent auditor’s report

120  Shareholder and statutory information

124  Directory

Produced by Gillian Sweetland. Photographers include Lynton Crabb, Danielle Moore and Melissa Powell. Designed by MDM Design.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Diversity

places, products and people

Annual Report 2013