Nufarm Limited

ANNUAL 
REPORT
2014

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103-105 Pipe Road 
Laverton North Victoria 3026 Australia
Telephone + 61 3 9282 1000 
Facsimile + 61 3 9282 1007
nufarm.com

 
 
 
 
At Nufarm we grow 
a better tomorrow 
by providing products 
and services that 
support the success of our 
distributors and growers.

CONTENTS

1 About Nufarm

2 Key events

2 Facts in brief

4 Managing director’s review

11 Business review

14 Sustainability

16 Board of directors

18 Executive management

20 Information on the company

23 Corporate governance

32 Financial report

33 Directors’ report

49 Lead auditor’s independence declaration

50 Income statement

51 Statement of comprehensive income

52 Balance sheet

53 Statement of cash flows

54 Statement of changes in equity

56 Notes to the financial statements

116 Directors’ declaration

117 Independent auditor’s report

119 Shareholder and statutory information

124 Directory

NUFARM LIMITED ANNUAL REPORT 2014

Design: MDM Investor Connect

ABOUT NUFARM

Nufarm is an established global agricultural inputs company, competing 
worldwide in crop protection and seed technologies. We are seen around 
the world as a supplier of quality products, supported by high standards 
of service and strong customer relationships.

Our mission is to grow a better tomorrow through the products and 
services we provide that support the success of our distributors and 
growers. This mission also reflects our commitment to the communities 
in which we operate, the ambition we have for our people and our 
collective approach to success.

Global headquarters

Regional headquarters

Crop protection production

Seeds production

Sales countries

NUFARM LIMITED ANNUAL REPORT 2014 | 01

KEY EVENTS

•  Brazil posts another year of strong growth

•  Australia and US impacted by tough market conditions

•  Important progress on seeds development projects

•  Reduction in year-end working capital and net debt

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 (cents)
Gearing ratio (%)
Net tangible assets per ordinary share ($)

Distribution to shareholders
Annual dividend per ordinary share (cents)

People
Staff employed

12 months ended
31 July 2014
$000

12 months ended
31 July 2013
$000

37,707
48,704
86,411

2,622,704
1,608,700
3,171,446

9.6 
24.2 
2.84

8.0 

80,999
2,224
83,223

2,277,292
1,664,745
3,371,669

25.5 
27.6 
3.04

8.0 

3,445

 3,458 

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 end 31 July 2013 unless otherwise stated. Non-IFRS measures have not 
been subject to audit or review.

02 | NUFARM LIMITED ANNUAL REPORT 2014

SEED TECHNOLOGIES 
THAT HAVE IMPACT 
BEYOND YIELD 
DELIVER SHARED 
VALUE FOR A BETTER 
TOMORROW.

NUFARM LIMITED ANNUAL REPORT 2014 | 03

MANAGING DIRECTOR’S REVIEW

The 2014 financial year delivered strong revenue growth and 
an increase in underlying profit. While conditions in some 
of our major markets were challenging, these results again 
underline the importance of having a diversified business 
across both geographic markets and product portfolio.

Doug Rathbone AM 
Managing director and 
chief executive

operations to support working capital 
efficiency targets. Excluding the impact 
of the lower volume through-put, the 
underlying gross profit margin was 
largely in line with the previous year.

Profit/loss attributable
to shareholders

0
.
1
8

6
.
2
7

Final dividend

Directors declared an unfranked 
final dividend of five cents per share, 
resulting in a full year dividend of 
eight cents. A full year dividend of 
eight cents per share (fully franked) 
was paid in the previous year.

The final dividend will be paid on 
14 November 2014 to the holders 
of all fully paid shares in the company 
as at the close of business on 
17 October 2014. The final dividend 
will be 100 per cent conduit foreign 
income. Given the impact of carry 
forward tax losses, it is unlikely the 
company will be in a position to 
frank dividend payments in the 
foreseeable future.

The dividend reinvestment plan 
(DRP) will be made available to 
shareholders for the final dividend.

Directors have determined that 
the issue price will be calculated 
on the volume weighted average of 
the company’s ordinary shares on the 
ASX over a period of 10 consecutive 
trading days commencing after the 
record date and concluding before 
the date of allotment of ordinary 
shares under the plan. The last 
election date for shareholders who 
are not yet participants in the DRP 
is 20 October 2014. The board has 
determined that, for this dividend 
payment, a one per cent discount will 
apply to shares issued under the DRP. 

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Material items 

In March and April of this year, the 
company announced a re-organisation 
of its Australian business and the 
rationalisation of the manufacturing 
footprint in Australia and New Zealand. 
These changes, which will be 
implemented over the next two years, 
resulted in a one-off after-tax cost of 
$48.7 million. Upon full implementation 
of the changes, total cost savings 
are estimated to be approximately 
$16 million.

The results also reflect a strong focus 
on strengthening our balance sheet 
and this will remain a key priority over 
the coming 12 months.

The company announced a statutory 
profit after tax of $37.7 million for 
the 12 months to 31 July 2014. This 
compares to a statutory profit after tax 
of $81.0 million in the previous financial 
year and included $48.7 million in 
one-off costs associated with the 
previously announced restructure and 
asset rationalisation of the Australian 
and New Zealand operations. 

Group revenues increased by 
15 per cent to $2.62 billion 
(2013: $2.28 billion). 

Underlying earnings before interest 
and tax (EBIT)1 was $200.6 million, 
up by just over seven per cent on 
the $186.8 million generated 
in the 2013 financial year. 

Underlying net profit after tax3 
was $86.4 million, up four per cent 
on the previous year. This included 
foreign exchange losses of 
$12.6 million reported as part 
of net financing expenses.

Earnings per share were 9.6 cents 
(2013: 25.5 cents per share). Excluding 
material items, earnings per share were 
28.1 cents (2013: 26.4 cents).

The group generated an underlying 
gross profit margin of 26.7 per cent, 
which was down on the previous year 
(27.4 per cent). Manufacturing volumes 
were down on the prior period due 
to both weather-related impacts 
on demand and changes to plant 

04 | NUFARM LIMITED ANNUAL REPORT 2014

 
AT NUFARM, 
INNOVATIVE THINKING 
IS ABOUT BEING 
DIFFERENT, BETTER, 
FASTER, RIGHT.

NUFARM LIMITED ANNUAL REPORT 2014 | 05

MANAGING DIRECTOR’S REVIEW CONTINUED

Important progress has been 
achieved since the re-organisation 
was announced, involving annualised 
savings of $6 million and relating 
to the rationalisation of back office 
positions. The balance of total cost 
savings will be achieved as several 
manufacturing plants are closed over 
the next two years. For financial year 
2015, estimated annualised savings 
will be $5 million, with further savings 
of $5 million expected to be achieved 
in financial year 2016.

Interest/tax/cash flow

Net external interest costs3 were 
$64.3 million (2013: $50.5 million). 
Higher levels of average net debt 
and higher bank base rates in Brazil 
were partially offset by reduced credit 
margins negotiated as part of the 
renewal of the syndicated bank facility. 

Total net financing costs increased 
from $70.7 million in the prior year to 
$88.0 million. This included the impact 
of foreign exchange losses that totalled 
$12.6 million (prior year $10.7 million), 
with almost half of those losses relating 
to the devaluation of currencies in 
Argentina and Ukraine.

The underlying effective tax rate was 
23.2 per cent. The lower than normal 
tax rate was driven by a number of 
individually immaterial one-off credits, 
mostly relating to tax credits in Brazil. 
It is expected that the future underlying 
effective tax rate will be approximately 
30 per cent.

The business generated strong net 
operating cash inflows of $268.1 million, 
well up on the $62.8 million generated 
in the prior period.

Balance sheet management

Net debt3 at year end was $513 million, 
a material improvement on the 
$633 million recorded at the end of the 
previous financial year. The reduction 
in net debt at balance date was driven 
by a focus on working capital targets 
delivering strong second half cash flow. 
Average net debt3 was $913 million, 
compared to $753 million in 2013. 

Net working capital3 at 31 July was 
down by $169 million to $842 million. 
This was achieved via a more disciplined 
approach to the management of 
working capital, supported by a 
range of initiatives implemented 
across the business. The major driver 
of the reduction in working capital was 
more efficient inventory management, 
with year-end inventories finishing 
at $633 million, compared to 
$803 million at 31 July 2013. 

Average net working capital3 was 
$1.25 billion, compared to $1.07 billion 
in the prior period. As a proportion 
of sales, average net working capital 
was slightly up on the previous year 
(47.7 per cent versus 46.8 per cent), 
reflecting the high starting point and 
large levels of working capital in the 
first half. Management has targeted 
an average net working capital to 
sales ratio of 40 per cent within the 
next two years.

Gearing (net debt to net debt 
plus equity) was 24.2 per cent 
(2013: 27.6 per cent).

People and organisation

Our talented and committed 
employees around the world have 
again contributed strongly to the 
profitable growth of the company 

during the 2014 financial year. 
We operate in highly competitive 
markets, where the strength of our 
people and their relationships with 
key stakeholders can provide an 
important competitive advantage.

We continued to encourage innovative 
thinking by providing training and 
development programs, and fostering 
the leadership qualities that will 
support the growth of the business.

Our commitment to providing a safe 
working environment is also supported 
by appropriate training and awareness 
programs and we expect to achieve 
continuous improvement across a 
range of safety and environmental 
performance parameters.

Outlook

With a return to more normal seasonal 
conditions in Australia and the US, 
the company is strongly positioned 
to generate growth at an underlying 
EBIT level in 2015.

Spring and summer rains in northern 
NSW and Queensland are needed to 
generate demand for crop protection 
products in Australia and to establish 
an important first half platform for the 
business. The restructuring program 
will be further progressed in 2015, 
with associated cost savings helping 
to drive earnings recovery.

If the US experiences more normal 
weather patterns – particularly in 
the spring period from March to 
May – Nufarm’s business will be 
able to capitalise on a stronger 
product portfolio and generate 
a significant recovery in earnings.

06 | NUFARM LIMITED ANNUAL REPORT 2014

MANAGING DIRECTOR’S REVIEW CONTINUED

The branded business in Europe is 
expected to generate further growth, 
however, lower overhead recoveries 
will result in a reduced contribution 
from manufacturing operations and 
an overall flat earnings outcome for 
the European segment.

The South American business will 
benefit from new product introductions 
and – given normal seasonal conditions 
and no significant further deterioration 
in crop prices – should post high single 
digit growth in 2015.

Earnings growth is also anticipated in 
the seed technologies segment, with a 
number of new varieties to be launched 
across our core crops. Some $7 million 
is forecast to be spent on progressing 
the DHA omega-3 canola project and 
this will be capitalised.

The balance sheet will remain a key 
focus for management, with net 
working capital to sales expected 
to decline over the year.

Longer term growth will be driven 
by a strong pipeline of new product 
launches, a transition to higher margin 
products and additional operational 
efficiencies.

Doug Rathbone AM
Managing director and  
chief executive

23 September 2014

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 $80.816 million for the year ended 31 July 2014 
and $73.986 million for the year ended 31 July 2013. 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 impacting operating profit 

Operating profit 

3.  Non-IFRS measures are defined as follows: 

2014 
$000 

200,607 

(50,761) 

149,846 

2013
$000 

186,803 

(3,177) 

183,626 

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

holders of Nufarm Limited less material items; 

•   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 2014 
Nufarm Limited financial report;

•   net debt – total net debt less cash and cash equivalents;

•   average net debt – net debt measured at each month end as an average;

•   net working capital – current trade and other receivables and inventories less current trade 

and other payables; and

•   average net working capital – net working capital measured at each month end as an average.

NUFARM LIMITED ANNUAL REPORT 2014 | 07

MANAGING DIRECTOR’S REVIEW CONTINUED

Underlying net profit after tax

Group sales

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Gearing ratio

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08 | NUFARM LIMITED ANNUAL REPORT 2014

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Return on funds employed

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NUFARM HAS MANUFACTURING 
AND MARKETING OPERATIONS 
THROUGHOUT AUSTRALIA, 
NEW ZEALAND, ASIA, THE 
AMERICAS AND EUROPE AND 
SELLS PRODUCTS IN MORE 
THAN 100 COUNTRIES AROUND 
THE WORLD.

NUFARM LIMITED ANNUAL REPORT 2014 | 09

NUFARM IS COMMITTED TO 
SUPPORTING THE COMMUNITIES 
IN WHICH WE OPERATE, 
FOSTERING THE AMBITION 
WE HAVE FOR OUR PEOPLE 
AND A COLLECTIVE APPROACH 
TO SUCCESS.

10 | NUFARM LIMITED ANNUAL REPORT 2014

BUSINESS REVIEW

A continuation of dry conditions in Australia and an unusually 
short spring season in the United States resulted in lower 
demand and considerable margin pressure in both markets. 
These negative impacts were more than offset, however, by 
another strong performance from the South American business, 
an increased profit contribution from the seeds business and 
lower corporate costs.

The range of seasonal impacts 
experienced in the 2014 financial 
year again underlined the importance 
of a geographically diverse business 
and Nufarm’s expansion into the 
seeds segment.

Nufarm’s crop protection business grew 
sales by 16 per cent to $2.48 billion 
and underlying EBIT by four per cent 
to $202.1 million. Crop protection sales 
accounted for just over 94 per cent of 
group revenues and generated an 
average gross margin of 26 per cent, 
which was in line with the previous year. 

The seed technologies segment 
generated revenues of $144 million, 
an increase of 10 per cent on the 
previous year ($132 million) and grew 
underlying EBIT by 15 per cent to 
$37.2 million. The segment generated 
an average gross margin of 51 per cent.

Corporate (head office) costs were 
$38.6 million, down five per cent 
on 2013. Total expenses were up 
on the previous year, but represented 
a slightly lower ratio to sales than in 
the prior period.

A key focus during financial year 2014 
was the implementation of a number 
of programs to improve working capital 
efficiencies. A significant reduction in 
year-end working capital and net debt 
reflected good progress on this front.

Operating segments summary 

The table adjacent provides a summary 
of the performance of the operating 
segments for the 2014 financial year 
and the prior period.

A re-organisation of the Australian 
business was announced during the 
year. Changes to the manufacturing 
base – to be implemented over a 
two-year period – will reduce fixed 
costs and improve utilisation of 
production facilities. A stronger focus 
on product development and customer 
service is also expected to contribute 
to improved business performance 
over the medium term.

Domestic sales in New Zealand 
were in line with the previous year 
but generated a slight improvement 
in margin contribution. A record year 
for the dairy industry, and strengthening 
returns in the sheep and beef sectors, 
as well as key horticultural crops, 
underpinned local demand.

Asia

Asian crop protection sales were 
$140.9 million, an increase of 
approximately 13 per cent on 
the previous year ($125.2 million). 
Underlying EBIT was largely unchanged 
at $19.5 million (2013: $19.6 million), 
with additional investments being 
made in new product development 
and an expansion into new markets 
segments, as well as regional markets 
such as Vietnam and Korea.

The Indonesian business recorded 
just over 25 per cent sales growth in 
local currency, driven by new product 
launches and increased sales in the 
important rice and vegetable segments.

Australia/New Zealand

The Australian and New Zealand 
business generated sales of 
$605.8 million, which was in line 
with the previous year ($604.4 million). 
Underlying EBIT was $33.9 million, 
slightly down on the $35.4 million 
generated in the prior period.

Australian sales were down year on 
year, reflecting lower demand due 
to a continuation of dry conditions 
throughout much of the country. 
Summer cropping conditions featured 
unusually low insect and weed pressure, 
and fungal disease for a second 
consecutive year, and fallow herbicide 
applications were well below normal. 
The challenging conditions led to 
pressure on both pricing and margins.

With good rainfalls in many cropping 
regions, market conditions improved 
considerably in the final quarter of 
the reporting period, providing an 
opportunity for channel stocks to 
normalise, lifting sentiment, and 
giving the Australian business a 
much more positive platform to 
start the new financial year.

Year ended 31 July

Revenue

Underlying EBIT

2014

2013

($000s)
Crop protection
Australia and 
New Zealand
604,432 
 125,201 
Asia
 468,253 
Europe
 516,278 
North America
South America
 431,440 
Total crop protection 2,478,275  2,145,604 
Seed technologies 
– global
Corporate
Nufarm group

 131,688 
–
2,622,704  2,277,292 

 605,761 
 140,885 
 555,521 
 513,596 
 662,512 

144,429 
 – 

Change  
(%)

2014

2013

Change  
(%)

 35,352 
0.2  33,903 
 19,580 
12.5  19,481 
 57,245 
18.6  56,420 
 42,153 
-0.5  20,638 
53.6  71,622 
 40,595 
15.5 202,064  194,925 

9.7 37,160 
n/a (38,617)

 32,449 
(40,571)
15.2 200,607  186,803 

-4.1
-0.5
-1.4
-51.0
76.4
3.7

14.5
-4.8
7.4

NUFARM LIMITED ANNUAL REPORT 2014 | 11

 
 
 
 
 
 
BUSINESS REVIEW CONTINUED

North America

North American crop protection sales 
were down on the previous year at 
$513.6 million (2013: $516.3 million). 
In local currency, Nufarm’s US sales 
were down by 10 per cent. Segment 
EBIT fell sharply to $20.6 million, 
compared to $42.2 million in the 
prior period. 

An unusually cold and long winter 
in the US negatively impacted both 
the cropping and non-crop markets, 
with fewer applications and higher 
inventories generating strong price 
competition. Sales into the burn-down 
(pre-plant) segment were well below 
average due to the shorter planting 
window for growers.

Lower volume demand and more 
efficient inventory management 
resulted in reduced production 
and lower overhead recoveries 
at Nufarm’s major herbicide 
manufacturing facility in Chicago.

Seasonal conditions prevented 
Nufarm from capitalising on a stronger 
and broader product position in the 
turf and specialty segment, having 
completed a distribution arrangement 
for Valent’s portfolio of products in 
January of this year.

Nufarm performed strongly in the US 
industrial and vegetative management 
segment, with both sales and EBIT 
contribution ahead of the previous year.

Seasonal conditions in Canada were 
generally average. Nufarm made 
good progress in implementing its 
differentiated strategy and launched 
a number of new products that 
received strong support from the 
market. Both sales and margin 
were up on the prior period.

South America

The South American business 
performed strongly, with regional sales 
up by 54 per cent to $662.5 million 
(2013: $431.4 million) and underlying 
EBIT up by 76 per cent to $71.6 million 
(2013: $40.6 million).

12 | NUFARM LIMITED ANNUAL REPORT 2014

In general, weather and cropping 
conditions in the region were average. 
Some parts of central Brazil experienced 
drier than normal weather which limited 
fungicide applications, but favoured 
the use of insecticides. Extremely cold 
conditions in Chile negatively impacted 
the important local fruit and vegetable 
segments.

Nufarm’s sales in Brazil were up 
on the previous year by more than 
60 per cent in local currency and 
helped the business gain market share. 
Sales growth was driven by Nufarm’s 
differentiated ‘Crucial’ glyphosate 
formulation as well as the successful 
introduction of a number of new 
products. A different product mix, 
that included significantly higher sales 
of older insecticide products, resulted 
in a slight fall in the average Brazilian 
gross margin. However, good cost 
control and the benefits of scale 
resulted in EBITDA margin expansion.

In Argentina, the business performed 
strongly with growth in the quickly 
developing herbicide segment for 
control of glyphosate resistant weeds. 
Local currency sales grew by more 
than 70 per cent.

Further investments were made 
in strengthening the regional 
organisation, with an additional 
15 sales representatives added in Brazil 
and a number of senior commercial 
appointments in Argentina. A new 
commercial manager was also 
appointed to support Nufarm’s 
expansion into Peru and a new 
distribution arrangement was 
finalised for the Uruguay market.

Europe

European sales were up by 19 per cent 
to $555.5 million (2013: $468.3 million). 
Underlying EBIT was in line with the 
previous year ($56.4 million versus 
$57.2 million). In local currency, 
Nufarm’s branded sales were ahead 
of the prior year, while revenues 
generated from operations (third party 
and industrial sales) were down. Total 
gross margin was up on the previous 
year when measured in euros, reflecting 
a higher proportion of branded sales.

Most western European markets 
experienced favourable weather 
conditions which helped drive an 
increase in cereal plantings and positive 
demand for crop protection inputs. 
Eastern Europe was affected by colder 
weather patterns and dry conditions.

Nufarm experienced solid growth 
in markets such as Spain, Germany 
and Romania, with new product 
introductions contributing to a 
slight improvement in average 
margins across the region.

A focus on working capital efficiencies 
resulted in changes at the European 
manufacturing units, with better 
forecasting and supply chain 
management allowing lower levels 
of safety stock and a resulting 
reduction in volume through-put. 
Consequently, overhead recoveries 
in these facilities were well down on 
the previous year. The contribution 
from the European manufacturing sites 
was approximately €2 million lower 
this year compared to the prior year.

Major product segments

Crop protection

Nufarm’s crop protection business 
accounted for 94 per cent of group 
revenues and grew sales by 16 per cent 
to $2.48 billion. These sales generated 
an average gross margin of 26 per cent.

Herbicide sales were $1.67 billion, 
an increase of 13 per cent on the 
previous year, and represented 
67 per cent of total crop protection 
revenues (2013: 69 per cent). Increased 
sales in both South America and Europe 
more than offset weather-related 
demand weakness in Australia and 
North America. Glyphosate margins 
were slightly up compared to the 
2013 year, mainly driven by a strong 
performance from Nufarm’s ‘Crucial’ 
glyphosate formulation in Brazil. 

BUSINESS REVIEW CONTINUED

Nufarm’s insecticide portfolio 
generated strong sales growth 
($290.5 million, up 37 per cent on FY13). 
Strong pest infestations in Brazil’s major 
crops generated very high demand 
for insecticide applications. Nufarm’s 
chlorpyrifos and imidacloprid-based 
products were well positioned to 
take advantage of these conditions.

Seed technologies

The company’s seed technologies 
business grew revenues by 10 per cent 
to $144.4 million and underlying EBIT 
by 15 per cent to $37.2 million. This 
was despite a relatively challenging 
year in terms of seasonal conditions 
for several core crops and the seed 
treatment business. 

While total fungicide sales were 
up year on year ($247 million versus 
$219 million), both Australia and 
Brazil experienced low fungal disease 
pressure and increased competition 
for sales. The European business 
had a strong year in the fungicides 
segment, with increased sales 
of azoxystrobin-based products.

Sales of plant growth regulators 
(PGRs) were up by 11 per cent 
on the prior period and generated 
stronger margins. Record sales of 
PGRs into both cereal crops and 
the trees, nuts, vegetables and vines 
segment in Europe drove the strong 
performance in this product group. 

The business also benefited 
from a stronger portfolio of 
biorational products.

The segment generated an average 
gross margin of 51 per cent (2013: 
55 per cent). A change in supply 
and selling arrangements relating 
to Nuseed’s servicing of the China 
confectionery sunflower segment 
resulted in a reduced percentage 
margin as the company moved away 
from a royalty-based model. The new 
arrangements lower risk as Nuseed 
consolidates its position as a leader 
in this important segment. 

Significant market share gains were 
achieved in the Australian canola 
segment, with Nuseed’s Roundup 
Ready® hybrid varieties performing 
very strongly. While the North 
American sunflower business was also 
positive, adverse weather and poor 
market conditions negatively impacted 

US seed treatment sales. Expansion 
into Uruguay helped drive sales growth 
in South America despite a poor 
production environment in Argentina 
and a reduction in local canola 
plantings. European sales were lower 
than expected, with instability in the 
Ukraine region a contributing factor.

The seeds business made important 
progress in advancing its pipeline 
of new products including moving 
DHA omega-3 canola into field trials, 
the prelaunch of a new China sunflower 
disease trait, prelaunch of a new 
confection sunflower category 
and a step change in molecular 
research capability, with the 
opening of two innovation 
centres in Victoria and California. 

Seed treatment sales increased 
by four per cent but this was below 
expectations, given weather-related 
impacts and a delay in a key European 
product registration. A large number of 
development projects were progressed 
and access to several new products was 
negotiated with third parties, which will 
lead to a broader portfolio offering in 
this high-value segment.

Sales revenue by region 2014
Total business

Sales by product segment 2014
Crop protection

Sales by product segment 2014
Seed technologies

24%

22%

6%

22%

26%

  Australia/New Zealand

  North America

  South America

  Europe

  Asia

$2,622.7 million

67%

11%

12%

10%

  Herbicides

  Fungicides

  Insecticides

  Other*

$2,478.3 million

* Other includes machinery, adjuvants,
  PGRs and industrial.

70%

30%

  Seed

  Seed treatment

$144.4 million

NUFARM LIMITED ANNUAL REPORT 2014 | 13

SUSTAINABILITY

Agriculture relies on sustainable production systems and – as 
a key supplier of necessary inputs into agricultural production 
– Nufarm strives to ensure our operations and products 
meet appropriate sustainability objectives and standards.

Nufarm’s growth strategy is built on the 
two pillars of innovation and discipline. 
Both of these principles have a strong 
enabling role in helping us to meet our 
sustainability objectives. 

We are actively encouraging innovative 
thinking across all areas of our business, 
including the successful application 
of innovative thinking to achieve safer 
working environments; reductions 
in emissions and waste; and more 
sustainable operations generally.

Increased discipline is also vital to 
ensure we have the right processes 
and structures in place and that we 
are measuring and managing our 
business in a way that allows us to 
be accountable for our performance.

Nufarm’s full sustainability report 
for the 2013 calendar year can be 
found on our corporate website.

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

It is pleasing to report improved 
outcomes in 2013 on important safety 
and environmental measurements, 
but we believe we can do better. 
The company is making a significant 
investment, both in terms of capital 
and resources, to achieve further 
improvements and we have restated 
our commitment to work towards 
a zero target for safety-related 
incidents in our workplaces.

Total greenhouse emissions decreased 
in 2013 compared with the previous 
year, due to changes in production 
volumes and product mix at various 
sites. Emissions per tonne of 
production remained consistent.
Air emissions result from the 
production process and we work 
to minimise emissions and their 
impact. Emissions vary depending on 
production volumes and the product 
mix. While CO2 emissions for most 
sites remained generally consistent, 
there were some reductions at Laverton, 
Wyke and Botlek sites following 
concerted efforts by these teams. 

Water is used in most of our production 
processes with the amount used directly 
impacted by production volumes and 
the product mix. We aim to reduce 
the amount of water we use and waste 
water created with many of our sites 
undergoing or investigating ways to 
recycle, harvest and better utilise 
water in our systems and processes.

Total waste decreased slightly in 2013 
compared with 2012 and we continue 
to work towards further reducing 
waste generation from manufacturing 
processes. A waste management system 
at many of our sites captures the nature 
and quantity of waste produced onsite 
and tracks it through to recycling or 
disposal. Waste generated per tonne 
of production has remained consistent 
due to efforts made in recent years to 
improve practices.

Our 2013 health and safety 
performance improved on our 
2012 results, although we failed to 
meet the board targets of LTIFR <1, 
MTIFR <2 and Severity <0.012.

Early in the year we issued new 
global corporate guiding principles 
to promote alignment of best practice 
and implement common operating 
principles. The principles operate 
within a continuous improvement 
framework as part of a structured 
and systematic approach to process 
safety management across our 
manufacturing base. 

The health and safety results for 
2013 were: LTIFR 1.16, MTIFR 2.18 
and Severity 0.018.

The eight lost time injuries were 
spread over eight separate sites. 
Two of the injuries were extremely 
severe; one resulting in the death 
of an Indonesian colleague in a traffic 
accident and another the lengthy 
continuing recovery of a Linz team 
member who accidentally opened 
a valve containing corrosive material 
which sprayed onto his face and into 
his lungs. 

There were 15 medical treatment 
injuries, seven of which did not involve 
loss of working days, and our global 
severity performance improved in 
comparison to the previous year.

LTIFR or lost time injury frequency rate 
is the number of lost time injuries per 
million hours worked that result in one 
or more days 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.

14 | NUFARM LIMITED ANNUAL REPORT 2014

SUSTAINABILITY CONTINUED

LTIFR 2009–2013

Severity 2009–2013

6

5

4

3

2

1

0

6

5

4

3

2

1

0

/
r
e
t
a
w
s
e
n
n
o
T

n
o
i
t
c
u
d
o
r
p
s
e
n
n
o
t

3.0

2.5

2.0

1.5

1.0

0.5

0.0

s
e
n
n
o
t
0
0
0

’

s
n
o
i
s
s
i
m
e
2

O
C

130

115

100

0.06

0.05

0.04

0.03

0.02

0.01

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

Target

Actual

Target

Actual

MTIFR 2009–2013

Unusual incident report/injury report 
versus LTIFR 2009–2013

16

14

12

10

8

6

4

2

0

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

Target

Actual

LTIFR

UIR/IR ratio

Water efficiency 2009–2013

Production volume 2009–2013

500

s
e
n
n
o
t
0
0
0

‘

400

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

CO2 released from energy use 
and processes 2009–2013

2009

2010

2011

2012

2013

NUFARM LIMITED ANNUAL REPORT 2014 | 15

 
 
 
 
 
 
BOARD OF DIRECTORS

Donald McGauchie AO 

Doug Rathbone AM

Anne Brennan

Gordon Davis

Chairman

Managing director  
and chief executive

Doug Rathbone AM, 68, 
joined the board in 1987. 

His background is chemical 
engineering and commerce 
and he has worked for 
Nufarm Australia Limited 
for over 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, 
64, 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.

16 | NUFARM LIMITED ANNUAL REPORT 2014

Anne Brennan, 54, joined the 
board on 10 February 2011.

Gordon Davis, 58, 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 
and risk 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 will be standing 
down as a director and 
deputy chairperson of Echo 
Entertainment Group Limited 
after that company’s 2014 
annual general meeting. 
Anne is a director of Myer 
Holdings 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 and risk committee.

BOARD OF DIRECTORS CONTINUED

Frank Ford

Bruce Goodfellow

Peter Margin

Toshikazu Takasaki

Bruce Goodfellow, 62, 
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.

Frank Ford, 68, joined the 
board on 10 October 2012. 

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

Mr Ford 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 and risk 
committee and a member 
of the nomination and 
governance committee.

Peter Margin, 54, joined the 
board on 3 October 2011. 

Toshikazu Takasaki, 67, 
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. 

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

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 a 
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, PACT Group 
Holdings Limited and 
Ricegrowers Limited. 

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

NUFARM LIMITED ANNUAL REPORT 2014 | 17

EXECUTIVE MANAGEMENT

Doug Rathbone AM

Brian Benson

Paul Binfield

Managing director and chief executive 
Doug Rathbone’s background is 
chemical engineering and commerce 
and he has worked for Nufarm Australia 
Ltd for over 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).

Group executive marketing 
and portfolio development
Brian Benson joined Nufarm in 2000 
after a long career with Monsanto 
where he held various senior positions 
in both Australia and overseas. Brian 
has extensive experience in the crop 
protection industry in the areas of 
international marketing and strategy. 
He has degrees in agricultural science 
and business administration. 

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

Rodney Heath

Greg Hunt

Group executive people 
and performance
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.

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

Group executive commercial operations
Greg joined Nufarm in February 2012. 
He has had considerable executive 
and agribusiness experience with a 
successful career at Elders Australia 
Limited where he was chief executive 
officer between 2001 and 2007. 
After leaving Elders, Greg worked 
with a number of organisations 
in business development and 
agribusiness related advisory roles. 
He is a director of Costa Group.

18 | NUFARM LIMITED ANNUAL REPORT 2014

EXECUTIVE MANAGEMENT CONTINUED

Dale Mellody

Mike Pointon

Group executive procurement 
and commercial services 
Dale Mellody joined Nufarm in 1995, 
having completed his bachelor of 
agricultural science. Promoted to the 
senior management group in 2005, 
he has had various global roles 
including group executive global 
marketing and general manager of 
Nufarm’s North American business. 
Dale is now responsible for global 
procurement and commercial services.

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. Mike 
was appointed to the executive team 
in 2008. He is responsible for the 
group’s product development 
and regulatory affairs activities. 

Elbert Prado

Robert Reis

Group executive manufacturing 
and supply chain
Elbert Prado, a chemical engineer, 
joined Nufarm in July 2013 after 
extensive international experience 
in senior operations roles within 
the chemical industry. He has a 
strong focus on safety, supply chain 
and manufacturing excellence. Elbert 
was global manufacturing and supply 
chain director for Rohm and Haas.

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.

NUFARM LIMITED ANNUAL REPORT 2014 | 19

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, and 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. 

20 | NUFARM LIMITED ANNUAL REPORT 2014

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 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 a 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 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. 

INFORMATION ON THE COMPANY CONTINUED

• 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. 

• 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. 

Principal risk area

Risk management approach

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.

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 market 
place, 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 2014 | 21

OUR AIM IS TO GROW 
A BETTER TOMORROW 
THROUGH PRODUCTS 
AND SERVICES THAT 
SUPPORT THE SUCCESS 
OF OUR DISTRIBUTORS 
AND GROWERS.

22 | NUFARM LIMITED ANNUAL REPORT 2014

CORPORATE GOVERNANCE

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

There are six 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. 

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 
ASX principles. During this reporting 
period, Nufarm complied with all of 
the ASX principles contained in the 
second edition of the ASX principles, 
and Nufarm is currently transitioning 
to compliance with the third edition 
of the ASX principles.

Management and oversight 
of Nufarm

The board

The governing body of the company 
is the board of directors. The board’s 
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 defines the board’s 
individual and collective responsibilities 
and describes those responsibilities 
delegated to the managing director 
and senior executives. A copy of 
the board charter is available on 
the corporate governance section 
of the company’s website.

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;

At 31 July 2014, there are four board 
committees: audit and risk; human 
resources; nomination and governance; 
health safety and environment. All 
directors are entitled to attend any 
committee meeting.

•  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. The company 
secretary has a direct reporting 
line to the chairman, and all directors 
have direct access to the company 
secretary, who is appointed by, 
and accountable to, the board 
on all governance matters; 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. 

A copy of the board charter is available 
on the corporate governance section 
of the company’s website.

Details of the attendances at meetings 
of board and committees during the 
reporting period appear on page 34 
of this report.

Nufarm undertakes appropriate checks 
before appointing or putting forward 
any director for election by shareholders 
and provides shareholders with all 
information relevant to their decision 
whether or not to re-elect the director. 

All directors and senior executives 
have a written agreement with the 
company setting out the terms of 
their appointment.

Diversity and inclusion 

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

To this end, we provide our people 
with opportunities 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 a truly diverse team 
across the business.

NUFARM LIMITED ANNUAL REPORT 2014 | 23

CORPORATE GOVERNANCE CONTINUED

In 2012 Nufarm identified cultural and 
gender diversity as areas for specific 
focus within the overall commitment 
to inclusion of all employees, and this 
focus remains key for the business. 
Nufarm’s diversity policy is reviewed 
annually and can be viewed at the 
corporate governance section of our 
website. Human resources policies and 
practices and board selection processes 
were reviewed to ensure they were 
both free of bias and supportive of 
diverse candidates and employees. 

In 2014 our focus was in the three 
key areas: 

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.

Analysis of available data does not 
highlight any gender or other diversity 
bias in the involvement of our people in 
training and development opportunities. 
Reasons for leaving as identified 
through exit interview data vary but do 
not show any trends related to gender 
or culture. Opportunities to participate 
in management and leadership training 
are open to all qualifying members of 
staff. Following feedback received in 
the 2012 employee opinion survey 
(EOS) there have been a number of 
programs put in place in our regions 
for our people managers. Women 
have been very well represented in 
these programs. 

As a global business Nufarm fosters 
the use of cross-functional and 
cross-regional project teams and 
work groups. These groups provide 
an excellent opportunity for our 
people to collaborate. Women are 
well represented within these groups.

24 | NUFARM LIMITED ANNUAL REPORT 2014

A comparison of salaries for men and 
women was completed during the year 
and the outcomes form a ‘base line’ 
for annual review. The indication from 
initial analysis is that any difference in 
salary for similar roles is based on the 
nature of the role, length of service, 
depth of experience and qualifications, 
as well as varying regional market rates. 
This analysis will be reviewed again 
in light of relevant outcomes of the 
2014 EOS. Nufarm is committed to 
remuneration based only on 
work-related factors. 

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;

Nufarm employee representation

•  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 benefiting from the inclusion 
of its diverse workforce.

Board and executive diversity

Every board, executive and senior 
management position which becomes 
available is an opportunity to bring 
further diversity to the business. As 
an example, in 2014 Pedro Tagliari, 
previously head of operations for 
Latin America, has moved to Australia 
to lead the Australia/New Zealand 
operations as part of the major 
reorganisation of the Australia/New 
Zealand business.

Women in Nufarm

Twenty-three per cent of Nufarm’s 
permanent full-time or part-time 
employees are women up from 
22 per cent in 2013.

The table shows the percentages by 
region with a breakdown of full-time 
and part-time employment. 

29%

20%

10%
9%

32%

  Australia/New Zealand

  Asia

  North America

  Europe

  South America

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

Percentage  
of women
23
25
28
28
21
21

Percentage distribution 
women in full and 
part-time employment
Part-time
9
16
0
3
13
4

Full-time
91
84
100
97
87
96

   
 
CORPORATE GOVERNANCE CONTINUED

Role
Board
Executive/senior management
People manager/team leaders
Professionals
Manufacturing
Administrative

Notable shifts from 2013 include:

•  an increase in the percentage of 

women in Asia from 16 per cent in 
2013 to 28 per cent in 2014. This is 
mainly attributable to a change in 
the mix of permanent and temporary 
jobs which saw women who were 
previously in temporary work moving 
into the permanent workforce; and

•  part-time positions have increased 
in North America (two per cent), 
which in turn provides greater 
flexibility for our employees.

Women work in every area of our 
business. The highest percentage is 
in administrative roles. Women make 
up 24 per cent of professional roles 
including scientific, sales, engineering, 
marketing, finance, human resources 
and information technology. Ten per 
cent of manufacturing roles are held 
by women working in our plants and 
mainly on day shift. Sixteen per cent 
of management and executive roles 
are held by women. One member of 
the board is female.

The percentages for professional, 
administrative and manufacturing 
are in line with the 2013 statistics. 
There has been a very pleasing shift 
of four per cent of our women moving 
into people management roles. A drop 
of two per cent in executive and senior 
management is due to restructuring 
and turnover. For these purposes, 
‘executive/senior management’ is 
defined as key management personnel 
and their direct reports and, regional 
general managers and their direct 
reports.

Percentage distribution 
of employees by role
Male
86
84
80
76
90
66

Female
14
16
20
24
10
34

maternity leave. In the last year 
81 per cent of maternity leavers 
returned to work – 77 per cent full-time 
and 23 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 opinion survey 
feedback

Nufarm conducts the EOS 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. 
This survey will run again in September 
2014. The EOS provides valuable 
feedback which allows us to track if 
there are differences in the working 
experience between men and women. 

Diversity and inclusion 2015

In the 2015 year, Nufarm will ensure 
that various policies, processes and 
education seminars are in place to 
actively encourage women into the 
organisation and into management. 
To this end, Nufarm has set the 
following three key measurable 
gender diversity objectives for 
the upcoming reporting period: 

1.  Nufarm aims to make one of the 
next two board appointments 
a suitably qualified woman;

2.  Nufarm will actively seek to have 

at least two appropriately qualified 
female candidates for all board, 
executive, management and key 
professional roles; and

One aspect of retaining women in 
Nufarm is the ability to encourage 
them back into the workforce after 

3.  Nufarm aims to annually improve the 
percentage of female representation 
in management roles. 

These objectives are in addition 
to the policies and practices which 
ensure we encourage diversity and 
inclusion across the business.

Evaluating board and board 
committee performance

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 the board undertook 
an annual internal survey of its 
performance, the results of which 
were used to monitor and improve 
performance and identify ongoing 
development opportunities to ensure 
directors have a suitable knowledge 
of the business.

In the current period, an independent 
consultant completed a formal review 
of the performance of the board and 
board committees and a report outlining 
the findings and recommendations of 
the review, was presented to the board. 

Evaluating the performance 
of senior executives

As part of Nufarm’s annual remuneration 
review, the performance of the senior 
executive team is reviewed first by the 
managing director, then the human 
resources committee and then by the 
board. 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 48 of this report. 

NUFARM LIMITED ANNUAL REPORT 2014 | 25

CORPORATE GOVERNANCE CONTINUED

Board of directors

Tenure

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. 

Profiles of each board member, 
including terms in office, are on 
pages 16 and 17 of this report.

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 has regard 
to, and applies, the recommendations 
and commentary in the ASX principles 
concerning the independence of 
directors.

At the date of this report, the majority 
of 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).

Donald McGauchie has been a member 
of the board for 10 years and chairman 
of the board for four years. The board 
unanimously continues to support 
Donald as chairman, believing this to be 
in the clear interest of all stakeholders. 
Donald applies judgment independent 
of management in all decision making. 
He discharges his role with strong 
commitment to considerations of 
governance and disclosure.

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 nomination and governance 
committee reviews the performance 
of directors who seek to offer 
themselves for re-election at the 
company’s annual general meeting. 
The company’s constitution requires 
directors to submit themselves for 
re-election at least every three years. 
The nomination and governance 
committee then recommends to 
the board whether or not it should 
continue to support the nomination 
of the retiring directors.

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.

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

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: 

•  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 to ensure the board is 
composed of directors who comprise 

an appropriate mix of skills to provide 
the necessary breadth and depth of 
knowledge and experience to meet 
the board’s responsibilities and 
objectives as well as reviewing the 
board to ensure it will be made up 
of directors with a diversity of skills, 
expertise, experience, backgrounds 
and gender; 

•  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;

•  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.

A copy of the nomination and 
governance committee charter and a 
summary of the policy and procedure 
for director appointments are available 
on the corporate governance section 
of the company’s website.

In the current period, the nomination 
and governance committee met on 
three occasions.

26 | NUFARM LIMITED ANNUAL REPORT 2014

CORPORATE GOVERNANCE CONTINUED

Nufarm recognises the valuable 
contribution made by each board 
member to the effective running of 
the company. When board positions 
become available, the company takes 
the opportunity to review the mix of 
skills and experience on the board in 
considering the skills and experience 
that a new director should possess.

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

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 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. 

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. 

To assist in providing appropriate 
development opportunities for 
continuing directors to develop and 
maintain their skills and knowledge 
of the company, each year, one of 

the scheduled board meetings will 
be held at one of the company’s 
international locations allowing 
directors to inspect the relevant 
operation, meet local management, 
customers and other stakeholders. 
Furthermore, directors are also 
provided with access to regional 
general managers and key industry 
speakers are scheduled to present 
to the board.

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 to the chairman.

Acting ethically and responsibly

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 that it is necessary 
to comment due to any perceived 
major impact on the company, its 
business or any of its stakeholders.

We require all directors, senior 
executives and employees to adopt 
standards of business conduct that 
are ethical and which comply with the 
law. Where there are no legislative 
requirements, the company develops 
policy statements to ensure appropriate 
standards are maintained.

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

Safeguard integrity in 
corporate reporting

Financial reports

The company has put in place a 
structure of review and authorisation 
to independently verify and safeguard 
the integrity of its financial reporting. 

The audit and risk committee reviews the 
company’s financial statements and the 
independence of the external auditors.

Audit and risk committee

Frank Ford is chairman of the board 
audit and risk committee and Anne 
Brennan and Gordon Davis are 
members of the committee. The 
committee comprises independent 
non-executive directors and is 
chaired by an independent director. 

Details of attendances at meetings 
of the audit and risk committee are 
set out on page 34 of this report.

Frank Ford has a master of taxation 
from the University of Melbourne, 
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 approximately 
35 years. During that period, he was 
also a member of the Deloitte global 
board, global governance committee 
and national management committee.

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

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

NUFARM LIMITED ANNUAL REPORT 2014 | 27

CORPORATE GOVERNANCE CONTINUED

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. 

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; 

•  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 lead partner can again be 
involved in the company’s audit.

In the current period the audit and risk 
committee met on four occasions. 

Prior to the approval of the financial 
statements for any financial period, 
the board receives a declaration from 
the CEO and CFO that: 

•  the financial records of the company 

have been properly maintained; 

•  the financial statements comply with 

the appropriate accounting standards 
and give a true and fair view of the 
company’s financial position and 
performance; and

•  that opinion has been formed on 

the basis of a sound system of risk 
management and internal control 
which operates effectively.

A summary of the disclosure policy is 
available on the corporate governance 
section of the company’s website.

Rights of shareholders

Information about Nufarm, including 
copies of:

•  relevant market announcements 

and related information; and

•  presentations made to analysts 

and investor briefings,

are immediately made available on the 
company’s website: www.nufarm.com. 
The corporate governance section 
of the website contains all relevant 
governance information.

Communication

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

Nufarm values a direct, two-way 
dialogue with shareholders and the 
company believes it is important not 
only to provide relevant information 
as quickly and efficiently as possible, 
but also to listen and understand 
shareholder’s perspectives and 
respond to their feedback. Nufarm’s 
communication policy aims to:

The company’s external auditor attends 
the company’s AGM and is available 
to answer questions for shareholders 
relevant to the audit. 

•  ensure that shareholders and the 

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

Disclosure

The company has a detailed written 
policy and procedure to ensure 
compliance with both the ASX Listing 
Rules and the Corporations Act. This 
policy is reviewed regularly with the 
company’s legal advisers and was most 
recently amended in February 2014.

The company secretary prepares a 
schedule of compliance and disclosure 
matters for directors to consider at 
each board meeting.

•  comply with its continuous disclosure 
obligations contained in applicable 
listing rules and the Corporations 
Act in Australia as well as industry 
guidelines such as the Australasian 
Investor Relations Association’s Best 
Practice Guidelines for Communication 
between Listed Entities and the 
Investment Community;

•  ensure equality of access to briefings, 

presentations and meetings for 
shareholders, analysts and media; and

•  encourage attendance and voting 

at shareholder meetings.

Anne will be standing down as a 
director and deputy chairperson of 
Echo Entertainment Group Limited 
after that company’s 2014 annual 
general meeting. Anne is a director 
of Myer Limited, Charter Hall Group, 
Argo Investments Ltd, Rabobank 
Australia Limited and Rabobank 
New Zealand Limited.

Gordon Davis has a bachelor of forest 
science (hons), master of agricultural 
science and he also 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. A copy of 
the audit and risk committee charter 
and the committee’s duties is available 
on the corporate governance section 
of the company’s website.

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 and risk 

committee approval. 

28 | NUFARM LIMITED ANNUAL REPORT 2014

 
CORPORATE GOVERNANCE CONTINUED

Information is communicated 
to shareholders:

Information, including in relation to: 

•  the nature of the business of the 

•  through the distribution of half year 

meeting;

Full details of the members of the 
audit and risk committee are set 
out on pages 27 and 28 of this report.

and annual reports;

•  whenever there are other significant 

developments to report, by electronic 
means as well as by post; and

•  when shareholders are provided with 
notice of the company’s AGM and 
other general meetings. 

Nufarm has a dedicated investor 
centre on the company’s website 
which contains:

•  all market announcements and 

related information which is posted 
immediately after release to the ASX;

•  a calendar of events relating to 

shareholders;

•  archived presentations made at the 

AGM and analyst and media briefings;

•  notice of annual general meeting 

and explanatory notes; 

•  archived half year and annual reports;

•  ASX announcements and financial 

results for at least the last three years; 
and

•  the company’s share price.

Management remains accessible to 
shareholders, analysts, fund managers 
and others with a potential interest 
in the company. Communications 
with external stakeholders are 
coordinated via a central contact 
point within the company.

Shareholders are encouraged to 
attend and participate at general 
meetings. To facilitate this, meetings 
will be held during normal business 
hours and at a place convenient for 
the greatest possible number of 
shareholders to attend.

The full text of notices and 
accompanying materials will 
appear on the company’s website. 

•  conflicts of interest;

•  voting restrictions; and

•  directors’ recommendations,

will be presented in a clear and 
concise manner designed to provide 
shareholders and the market with 
full and accurate information. Proxy 
forms will be provided in order to 
enable shareholders unable to attend 
the meeting to vote on the resolutions.

Nufarm encourages its shareholders 
to receive communications from, and 
to send communications to it and its 
share registry, electronically. 

Nufarm’s formal communications policy 
is available on the corporate governance 
section of the company’s website.

Identifying and managing risk

The board is committed to identifying, 
assessing, monitoring and managing 
its material business risks. To that end, 
the board has implemented a sound 
risk management framework which it 
reviews at least annually to ensure its 
effectiveness.

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 
and primarily to its audit and risk 
committee which is chaired by an 
independent director. The audit 
and risk committee’s responsibilities 
include providing an oversight of the 
effectiveness of Nufarm’s enterprise-
wide risk management and internal 
control framework.

In the current period the audit and risk 
committee met on four occasions.

A copy of the audit and risk committee 
charter and its duties is available on 
the corporate governance section of 
the company’s website.

The company’s risk management 
framework, policies and procedures 
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 and are 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 expands.

Nufarm’s group risk management 
department, led by the general 
manager global risk and assurance, 
manages the implementation of this 
framework across the group. Detailed 
risk profiles for key operational 
business units have been developed. 
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 LIMITED ANNUAL REPORT 2014 | 29

 
CORPORATE GOVERNANCE CONTINUED

The audit and risk committee charter 
requires the committee and the general 
manager global risk and assurance to 
review, at least annually, the group’s 
risk management framework. In the 
current reporting period, the audit 
and risk committee reviewed the 
effectiveness of the company’s risk 
management framework to ensure 
that the framework remains sound.

Nufarm’s internal audit function is 
headed by the general manager global 
risk and assurance who reports at each 
audit and risk committee meeting on the 
implementation and management of 
the enterprise risk management policy.

As explained in the audit and risk 
committee charter, the internal audit 
is designed to:

•  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 the 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.

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 and 
Peter Margin and Toshikazu Takasaki 
are members of the committee. 
The committee has a majority of 
independent directors.

All board committees report to the 
board on risk management issues 
within their area of responsibility.

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 publishes an annual 
sustainability report which reviews 
economic, environmental and 
sustainability risks. A copy of the 
2014 sustainability report is available 
on the company’s website. 

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 48 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, a copy 
of which is available on the corporate 
governance section of the company’s 
website, includes a 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 practices.

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.

30 | NUFARM LIMITED ANNUAL REPORT 2014

CORPORATE GOVERNANCE CONTINUED

In the current period the human 
resources committee met on five 
occasions.

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 48 of this report.

The rules of the short term incentive 
plan (‘STI plan’) provide that participants 
are not permitted to hedge any shares 
issued to them under the STI plan 
whilst those shares are held in trust.

Clause 9 of the company’s security 
trading policy sets out the process 
by which key management personnel 
may seek approval to enter into 
a margin loan or other security 
arrangement in respect of Nufarm’s 
securities. A copy of the security 
trading policy is available on the 
corporate governance section of 
the company’s website.

A copy of the human resources 
committee charter is available on 
the corporate governance section 
of the company’s website.

NUFARM LIMITED ANNUAL REPORT 2014 | 31

FINANCIAL REPORT

32 | NUFARM LIMITED ANNUAL REPORT 2014

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 2014 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 
Dr WB Goodfellow
PM Margin 
T Takasaki 

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 16 and 17.

Company secretary

The company secretary is R Heath.

Details of the qualifications and experience of the company secretary are set 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 Goodfellow1, 2
DG McGauchie1
PM Margin
DJ Rathbone 
T Takasaki

Nufarm Ltd
ordinary shares
10,000
40,000
10,000
1,146,138
46,239
2,458
3,368,241
–

Nufarm Finance (NZ) Ltd
step-up securities
–
–
–
48,423
–
–
1,500
–

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 (123,171 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 2014 | 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  
and risk

Committees
Human  
resources

Nomination  
and governance

AB Brennan 
GR Davis 
FA Ford
Dr WB Goodfellow 
DG McGauchie 
PM Margin 
DJ Rathbone 
T Takasaki

Meetings 
held1
10
10
10
10
10
10
10
10

Meetings 
attended
  9
10
10
10
10
10
10
10

Meetings 
held1
4
4
4
–
–
–
–
–

Meetings 
attended
4
4
4
–
–
–
–
–

Meetings 
held1
–
5
–
–
5
5
–
–

Meetings 
attended
–
5
–
–
5
5
–
–

Meetings 
held1
–
–
3
3
3
–
–
–

Meetings 
attended
–
–
3
3
3
–
–
–

Health safety  
and environment
Meetings 
held1
2
3
–
–
–
3
–
1

Meetings 
attended
2
3
–
–
–
3
–
1

1.  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 20 and 21 
of the financial report

Nufarm employs approximately 3,445 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 2014 is $37.7 million. The comparable figure 
for the 12 months to 31 July 2013 was $81.0 million.

Dividends

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

The final dividend for 2012–2013 of five cents paid 15 November 2013.

The interim dividend for 2013–2014 of three cents paid 9 May 2014. 

The final dividend for 2013–2014 of five cents as declared and recommended by the directors is payable 14 November 2014.

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 2013 – 15 October 2013  
at the rate of 6.9525% per annum paid 15 October 2013

Distribution for the period 15 October 2013 – 15 April 2014  
at the rate of 6.5167% paid 15 April 2014

$000
13,166

7,912 

$000

8,749 

8,156

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 13.

34 | NUFARM LIMITED ANNUAL REPORT 2014

DIRECTORS’ REPORT continued

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 13.

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 20 and 21 of the financial report.

Events subsequent to reporting date

On 23 September 2014, the directors declared a final unfranked dividend of five cents per share payable 14 November 2014.

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 14 to 15. 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 40 of the financial report.

The board has considered the non-audit services provided during the year by the auditor and, in accordance with written 
advice provided by resolution of the audit and risk 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 and risk 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 49 and forms part of the directors’ report for the financial 
year ended 31 July 2014.

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 2014 | 35

DIRECTORS’ REPORT continued

Remuneration report (audited)

A message from the chairman of the human resources committee (unaudited)

Nufarm’s remuneration structure is designed to support our strategic objectives and help drive sustainable value creation. 
The capabilities and commitment of our management and employees make a critical contribution to the success of the 
company and our remuneration policies are based on principles that encourage and reward performance and outcomes. 
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 2014. The report details remuneration information as it applies 
to Nufarm non-executive directors (NED) and Nufarm’s executives (referred to as key management personnel (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 

Key management personnel disclosed in this report

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).

Non-executive directors 

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

Other key management personnel 

Executives 
BF Benson 
P Binfield  
BJ Croft  
R Heath 
G Hunt  
DA Mellody  
MJ Pointon 
E Prado2 
DA Pullan1 
RG Reis 

Title
Group executive, marketing and portfolio development
Chief financial officer
Group executive, people and performance
Group executive, corporate services 
Group executive, commercial operations
Group executive, procurement and commercial services
Group executive, innovation and development
Group executive, manufacturing and supply chain
Group executive, operations
 Group executive, corporate strategy and external affairs

1.  DA Pullan resigned as group executive, operations with effect from 31 July 2013.

2.  E Prado was appointed as group executive, manufacturing with effect from 1 July 2013.

36 | NUFARM LIMITED ANNUAL REPORT 2014

DIRECTORS’ REPORT continued

Remuneration governance 

The human resources 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 2014 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 did not seek external executive remuneration benchmarking data for the 2014 year but 
relied on general information on executive salary movements to inform the committee’s recommendations to the board 
in regard to KMP salaries. 

The board considered this information in light of company performance, changes during the year to the scope and scale of 
executive roles, individual performance and the motivation and retention of key individuals, in making its remuneration decisions. 

Principles of remuneration for the period ended 31 July 2014

The company’s remuneration policy for the period ended 31 July 2014 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. 

NUFARM LIMITED ANNUAL REPORT 2014 | 37

DIRECTORS’ REPORT continued

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 2014 
year the financial measures remained unchanged with the board determining that underlying net profit after tax (NPAT) and 
average net working capital (ANWC)/sales are aligned with shareholder interests and rewards and also reflect the focus within 
the business on both profit and balance sheet performance. 

In 2014 the STI, which rewards annual performance, was delivered through a combination of cash incentive and shares which 
were retained and will vest in 2016 on the second anniversary. 

Who participates in the STI?
When are awards made?
What measures are used 
in the plan?

Plan participants include KMP and senior managers globally.
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 2014.
80% of the potential was based on 
underlying net profit after tax (NPAT) 
and average net working capital 
(ANWC)/sales.
This structure reflects Nufarm’s strong focus on the use of capital and ensures alignment 
of reward to business outcomes and shareholder returns.

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?

The board has resolved to change the percentage allocation for the managing director 
in the 2015 year from 80/20 financial to strategic to 70/30 to highlight the importance 
of effective competitive strategy to the sustainable performance of the business. 
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

85

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

25

nil

100 120 Underlying NPAT
110 ANWC/Sales
150

100

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.

38 | NUFARM LIMITED ANNUAL REPORT 2014

DIRECTORS’ REPORT continued

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 an 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).
The plan rules provide the flexibility to use a number of different instruments provided 
they comply with local regulations and sound practice. Previous awards were 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.

The 2014 allocations will be in indeterminate rights. At the time of vesting the board will 
determine if the rights convert to ordinary shares or cash or other instruments which may be 
in use at the time. These rights will be valued using the same methodology as employed in 
previous years. The change has no impact on the measurement or on the likelihood of vesting. 

When are the awards made? Under the plan, Australian LTIP participants receive an annual award of rights as soon as 

How are the number 
of rights calculated?

practical after the announcement of results for the preceding year.
The number of rights for previous years of the plan were calculated at ‘face value’ using the 
five-day volume weighted average price (VWAP) post the announcement of annual results;

When do the awards vest?

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?

•  the board reviews efficacy of a fair value methodology annually and the board resolved 

to retain ‘face value’ for the 2014 awards; and 

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

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 & 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.

NUFARM LIMITED ANNUAL REPORT 2014 | 39

DIRECTORS’ REPORT continued

What is the relative TSR 
performance required 
for vesting?

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

Proportion of TSR grant vesting

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

How is the ROFE target set? ROFE objectives are set by the board at the beginning of each year. There is both a ‘target’ 

How is ROFE measured?

What ROFE result is required 
for vesting?

What was the result for the 
2014 year?

What happens if the awards 
do not vest?

Is there a clawback provision 
in the plan?

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 was 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%

Target %
10.0
10.9
10.0
10.3

Outcome %
10.4
2012
8.8
2013
9.1
2014
Cumulative three-year average
9.4
This means that the first award which matures in 2014 has not vested on either the ROFE or 
the relative TSR and the rights have been forfeited. At this time the 2013 award is tracking 
below the ROFE hurdle rate necessary to trigger vesting on this metric. 
To the extent that the TSR and ROFE performance hurdles are not met at the end of the 
three year performance period and full vesting is not achieved, performance will not be 
re-tested and the award will lapse. The awards tested on the 31 July 2014 did not vest 
and therefore the rights have lapsed.
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.

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 6.5 per cent. Percentage increases reflected company performance, changes in the scope and 
responsibility of the role and individual performance. 

•  STI: based on an underlying NPAT result of $86.4 million, an ANWC/Sales result at 47.7 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.

40 | NUFARM LIMITED ANNUAL REPORT 2014

DIRECTORS’ REPORT continued

•  The managing director’s incentive outcome for 2014 was a calculated on part achievement of financial results and part 

achievement of strategic objectives.

•  LTIP: the LTIP vests on the third anniversary. Neither the average ROFE result over the three years nor the TSR result for 
triggered vesting and the rights for this first award have been forfeited. Results for 2013 and 2014 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
148.4
171.8
206.0
186.8
200.6

ANWC/ 

Sales**
%
N/A
N/A
45.3
46.8
47.7

Underlying  
NPAT*
$M
N/A
N/A
115.4
83.2
86.4

ROFE  
achieved
%
6.0
7.6
10.4
8.8
9.1

Closing  
share price  
31 July
$
3.82
4.34
5.47
4.50
4.35

Total 
shareholder 

return***
%
(62.7)
13.6
26.8
(16.5)
(1.7)

2010
2011
2012
2013
2014

*  

 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.

2014 STI outcomes

2014 STI potential

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

At target
$
1,687,140
322,740
206,400
520,905
455,211
289,405
390,902
286,272
245,072
239,009

At maximum
$
2,530,710
484,110
309,600
781,358
682,817
434,107
586,353
429,408
367,068
358,513

Total award as  
a % of target 
potential
24.6
33.6
33.6
33.6
33.6
33.6
33.6
33.6
33.6
33.6

Total award
$
414,216
108,284
69,250
174,771
152,730
97,100
131,153
96,048
82,224
80,190

* Deferred STI is retained in cash.

To be paid  
in cash in 
October 2014
$
165,686
54,142
34,625
87,385
76,365
48,550
65,576
48,024
41,112
40,095

Retained in 
shares vesting on 
2nd anniversary
31 July 2016 
$
248,530
54,142
34,625
87,385
76,365
48,550
65,576
48,024
41,112
40,095

NUFARM LIMITED ANNUAL REPORT 2014 | 41

DIRECTORS’ REPORT continued

2014 LTIP allocations 

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

Value of award
$
811,125
257,940
165,121
154,857
137,943
231,950
118,444
98,569
74,257
72,420

Number of 
performance 
rights*
170,881
54,341
34,786
32,624
29,061
48,865
24,953
20,766
15,644
15,257

Grant date
5.12.2013
9.10.2013
9.10.2013
9.10.2013
9.10.2013
9.10.2013
9.10.2013
9.10.2013
9.10.2013
9.10.2013

Vesting  
date
31.7.2016
31.7.2016
31.7.2016
31.7.2016
31.7.2016
31.7.2016
31.7.2016
31.7.2016
31.7.2016
31.7.2016

Fair value at grant date

TSR tranche 
(50% of award)
$2.40
$2.48
$2.48
$2.48
$2.48
$2.48
$2.48
$2.48
$2.48
$2.48

ROFE tranche 
(50% of award)
$4.10
$4.21
$4.21
$4.21
$4.21
$4.21
$4.21
$4.21
$4.21
$4.21

* Rights were valued at $4.7467 being the five-day VWAP post the announcement of 2013 annual results. 

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 most 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.

42 | NUFARM LIMITED ANNUAL REPORT 2014

DIRECTORS’ REPORT continued

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 (e.g. 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. 

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 (including 
superannuation costs).

Set out below are details of the annual fees payable for the year ended 31 July 2014 (including superannuation costs). 
These fees were effective from 1 February 2012. There was no change to fees during the 2014 year.

The total fees for the 2014 year remained within the approved cap. However, the board has determined that five years after 
the last revision of the board fee cap it is appropriate to seek a 10 per cent increase to accommodate the possible addition 
of another board member and cover a review of fees in February 2015. 

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

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

Fees applicable from 1 August 2013 to 31 July 2014 $ 
346,500
141,750
 28,875
 11,550
 17,325
 5,775
 23,100
 8,663
11,550
 1,444 per meeting

Board fees are reviewed every 18 months. These fees will be reviewed again in February 2015.

NUFARM LIMITED ANNUAL REPORT 2014 | 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 WB Goodfellow

GA Hounsell3

DG McGauchie

P Margin

F Ford2

T Takasaki4

Sub total non-executive directors’ remuneration

Executive director DJ Rathbone

Total directors’ remuneration

Group executives
PA Binfield 

BF Benson7 

GA Hunt 

RG Reis 

DA Mellody

MJ Pointon

BJ Croft 

R Heath 

E Prado6 

DA Pullan5

Sub total – total executives’ remuneration

Total directors’ and executives’ remuneration

Short term

Salary and fees
$

Cash bonus 
(vested)
$

Non- 
monetary 
benefits
$

2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013

2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013

 143,301 
 137,728 
 162,988 
 155,228 
 132,801 
 126,478 
 – 
 27,841 
 315,000 
 300,000 
 155,114 
 147,728 
 159,051 
 122,387 
 130,718 
 80,717 
 1,198,973 
 1,098,107 
 1,581,554 
 1,522,303 
 2,780,527 
 2,620,410 

 677,492 
 639,588 
 753,818 
 682,937 
 606,730 
 587,303 
 657,587 
 610,707 
 561,743 
 498,339 
 410,026 
 346,351 
 333,042 
 324,974 
 290,654 
 281,498 
 443,055 
 55,078 
 – 
 778,558 
 4,734,147 
 4,805,333 
 7,514,674 
 7,425,743 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 440,339 
 840,247 
 440,339 
 840,247 

 54,141 
 51,709 
 87,385 
 83,458 
 48,550 
 46,372 
 76,365 
 72,940 
 65,576 
 62,629 
 48,024 
 45,866 
 41,112 
 39,265 
 40,095 
 38,293 
 34,625 
 – 
 – 
 87,252 
 495,873 
 527,784 
 936,212 
 1,368,031 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 55,027 
 47,172 
 55,027 
 47,172 

 – 
 – 
 16,557 
 37,638 
 8,636 
 14,160 
 22,199 
 43,511 
 16,479 
 35,219 
 18,381 
 35,416 
 43,207 
 33,519 
 34,097 
 32,746 
 57,378 
 – 
 – 
 – 
 216,934 
 232,209 
 271,961 
 279,381 

Total
$

 143,301 
 137,728 
 162,988 
 155,228 
 132,801 
 126,478 
 – 
 27,841 
 315,000 
 300,000 
 155,114 
 147,728 
 159,051 
 122,387 
 130,718 
 80,717 
 1,198,973 
 1,098,107 
 2,076,920 
 2,409,722 
 3,275,893 
 3,507,829 

 731,633 
 691,297 
 857,760 
 804,033 
 663,916 
 647,835 
 756,151 
 727,158 
 643,798 
 596,187 
 476,431 
 427,633 
 417,361 
 397,758 
 364,846 
 352,537 
 535,058 
 55,078 
 – 
 865,810 
 5,446,954 
 5,565,326 
 8,722,847 
 9,073,155 

1.  Represents total remuneration in the financial year.
2.  F Ford appointed as a director 10 October 2012.
3.  GA Hounsell retired as a director on 8 October 2012.
4.  T Takasaki appointed as a director 6 December 2012.
5.   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.
6.  E Prado was appointed to the role of group executive manufacturing and supply chain on 1 July 2013.
7.  BF Benson – other long term includes partial payout of annual leave accrued.

Note: KMP were granted increases in fixed remuneration and short term incentive potential of between three per cent and 6.5 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 2014

Post- 

employment

Share-based 

payments

Other  

long term

Superannuation

$

Termination 

benefits

Equity  

settled

Total1

Total 

$

remuneration

Percentage of 

Value of options 

remuneration 

performance-

based

%

as a proportion  

of total 

remuneration

%

 14,330 

 13,772 

 16,299 

 15,522 

 13,280 

 12,647 

 – 

 2,784 

 31,500 

 30,000 

 15,511 

 14,772 

 15,905 

 12,238 

 13,071 

 8,071 

 119,896 

 109,806 

 33,416 

 22,341 

 153,312 

 132,147 

 24,650 

 23,606 

 24,850 

 23,725 

 25,832 

 22,917 

 24,850 

 24,000 

 24,175 

 24,150 

 24,850 

 24,000 

 35,000 

 25,833 

 34,017 

 24,833 

 23,180 

 2,040 

 – 

 30,828 

 241,404 

 225,932 

 394,716 

 358,079 

$

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 192,602 

 439,683 

 192,602 

 439,683 

 126,562 

 175,934 

 141,108 

 201,346 

 112,038 

 162,636 

 124,230 

 175,405 

 106,058 

 150,335 

 82,320 

 109,715 

 66,792 

 93,820 

 65,223 

 92,085 

 43,441 

 – 

 – 

$

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 799,000 

 799,000 

 799,000 

 210,500 

 867,772 

 1,371,776 

 1,060,374 

 1,811,459 

$

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 75,383 

 94,909 

 75,383 

 94,909 

 229,130 

 25,364 

 23,266 

 29,644 

 5,588 

 17,265 

 10,992 

 15,080 

 17,101 

 18,009 

 286,077 

 105,362 

 361,460 

 200,271 

 157,631 

 151,500 

 179,287 

 170,750 

 146,081 

 139,125 

 – 

 30,625 

 346,500 

 330,000 

 170,625 

 162,500 

 174,956 

 134,625 

 143,789 

 88,788 

 1,318,869 

 1,207,913 

 2,378,321 

 2,966,655 

 3,697,190 

 4,174,568 

 882,845 

 890,837 

 1,252,848 

 1,054,468 

 801,786 

 833,388 

 928,497 

 956,207 

 779,619 

 787,937 

 594,593 

 576,428 

 519,153 

 517,411 

 481,187 

 487,464 

 601,679 

 57,118 

 – 

 1,906,138 

 6,842,207 

 8,067,396 

 10,539,397 

 12,241,964 

27

43

20 

26 

18 

27 

20 

25 

22 

26 

22 

27 

22 

27 

21 

26 

22 

27 

13 

0 

0 

16 

8 

15 

8 

13 

13 

3 

7 

8 

4 

6 

4 

7 

5 

7 

4 

6 

4 

7 

8 

0 

0 

4 

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. 

Post- 
employment

Share-based 
payments

Other  
long term

Total1

DIRECTORS’ REPORT continued

Superannuation
$

Termination 
benefits
$

 14,330 
 13,772 
 16,299 
 15,522 
 13,280 
 12,647 
 – 
 2,784 
 31,500 
 30,000 
 15,511 
 14,772 
 15,905 
 12,238 
 13,071 
 8,071 
 119,896 
 109,806 
 33,416 
 22,341 
 153,312 
 132,147 

 24,650 
 23,606 
 24,850 
 23,725 
 25,832 
 22,917 
 24,850 
 24,000 
 24,175 
 24,150 
 24,850 
 24,000 
 35,000 
 25,833 
 34,017 
 24,833 
 23,180 
 2,040 
 – 
 30,828 
 241,404 
 225,932 
 394,716 
 358,079 

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

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 799,000 
 – 
 799,000 
 – 
 799,000 

Equity  
settled
$

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 192,602 
 439,683 
 192,602 
 439,683 

 126,562 
 175,934 
 141,108 
 201,346 
 112,038 
 162,636 
 124,230 
 175,405 
 106,058 
 150,335 
 82,320 
 109,715 
 66,792 
 93,820 
 65,223 
 92,085 
 43,441 
 – 
 – 
 210,500 
 867,772 
 1,371,776 
 1,060,374 
 1,811,459 

$

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 75,383 
 94,909 
 75,383 
 94,909 

 – 
 – 
 229,130 
 25,364 
 – 
 – 
 23,266 
 29,644 
 5,588 
 17,265 
 10,992 
 15,080 
 – 
 – 
 17,101 
 18,009 
 – 
 – 
 – 
 – 
 286,077 
 105,362 
 361,460 
 200,271 

Total 
remuneration
$

Percentage of 
remuneration 
performance-
based
%

Value of options 
as a proportion  
of total 
remuneration
%

 157,631 
 151,500 
 179,287 
 170,750 
 146,081 
 139,125 
 – 
 30,625 
 346,500 
 330,000 
 170,625 
 162,500 
 174,956 
 134,625 
 143,789 
 88,788 
 1,318,869 
 1,207,913 
 2,378,321 
 2,966,655 
 3,697,190 
 4,174,568 

 882,845 
 890,837 
 1,252,848 
 1,054,468 
 801,786 
 833,388 
 928,497 
 956,207 
 779,619 
 787,937 
 594,593 
 576,428 
 519,153 
 517,411 
 481,187 
 487,464 
 601,679 
 57,118 
 – 
 1,906,138 
 6,842,207 
 8,067,396 
 10,539,397 
 12,241,964 

27
43

20 
26 
18 
27 
20 
25 
22 
26 
22 
27 
22 
27 
21 
26 
22 
27 
13 
0 
0 
16 

8 
15 

8 
13 
3 
7 
8 
13 
4 
6 
4 
7 
5 
7 
4 
6 
4 
7 
8 
0 
0 
4 

NUFARM LIMITED ANNUAL REPORT 2014 | 45

In AUD

Directors’ non-executive

AB Brennan 

GR Davis 

Dr WB Goodfellow

GA Hounsell3

DG McGauchie

P Margin

F Ford2

T Takasaki4

Sub total non-executive directors’ remuneration

Executive director DJ Rathbone

Total directors’ remuneration

Group executives

PA Binfield 

BF Benson7 

GA Hunt 

RG Reis 

DA Mellody

MJ Pointon

BJ Croft 

R Heath 

E Prado6 

DA Pullan5

Short term

Cash bonus 

(vested)

Non- 

monetary 

benefits

Salary and fees

$

 143,301 

 137,728 

 162,988 

 155,228 

 132,801 

 126,478 

 – 

 27,841 

 315,000 

 300,000 

 155,114 

 147,728 

 159,051 

 122,387 

 130,718 

 80,717 

 1,198,973 

 1,098,107 

 1,581,554 

 1,522,303 

 2,780,527 

 2,620,410 

 677,492 

 639,588 

 753,818 

 682,937 

 606,730 

 587,303 

 657,587 

 610,707 

 561,743 

 498,339 

 410,026 

 346,351 

 333,042 

 324,974 

 290,654 

 281,498 

 443,055 

 55,078 

 – 

$

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 440,339 

 840,247 

 440,339 

 840,247 

 54,141 

 51,709 

 87,385 

 83,458 

 48,550 

 46,372 

 76,365 

 72,940 

 65,576 

 62,629 

 48,024 

 45,866 

 41,112 

 39,265 

 40,095 

 38,293 

 34,625 

 – 

 – 

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

$

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 55,027 

 47,172 

 55,027 

 47,172 

 – 

 – 

 16,557 

 37,638 

 8,636 

 14,160 

 22,199 

 43,511 

 16,479 

 35,219 

 18,381 

 35,416 

 43,207 

 33,519 

 34,097 

 32,746 

 57,378 

 – 

 – 

 – 

 216,934 

 232,209 

 271,961 

 279,381 

Total

$

 143,301 

 137,728 

 162,988 

 155,228 

 132,801 

 126,478 

 – 

 27,841 

 315,000 

 300,000 

 155,114 

 147,728 

 159,051 

 122,387 

 130,718 

 80,717 

 1,198,973 

 1,098,107 

 2,076,920 

 2,409,722 

 3,275,893 

 3,507,829 

 731,633 

 691,297 

 857,760 

 804,033 

 663,916 

 647,835 

 756,151 

 727,158 

 643,798 

 596,187 

 476,431 

 427,633 

 417,361 

 397,758 

 364,846 

 352,537 

 535,058 

 55,078 

 – 

 865,810 

 5,446,954 

 5,565,326 

 8,722,847 

 9,073,155 

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

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

 778,558 

 4,734,147 

 4,805,333 

 7,514,674 

 7,425,743 

 87,252 

 495,873 

 527,784 

 936,212 

 1,368,031 

5.   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.

6.  E Prado was appointed to the role of group executive manufacturing and supply chain on 1 July 2013.

7.  BF Benson – other long term includes partial payout of annual leave accrued.

Note: KMP were granted increases in fixed remuneration and short term incentive potential of between three per cent and 6.5 per cent. Percentage increases 

reflected changes in the scope and responsibility of the role, individual performance and alignment to market comparators.

DIRECTORS’ REPORT continued

Equity instruments held by key management personnel

The following tables show the number of:

•  options/performance rights over ordinary shares in the company;

•  right to deferred shares granted under the STI scheme;

•  shares in the company; and 

that were held during the financial year by key management personnel of the group, including their close family members 
and entities related to them.

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.

Options/rights over ordinary shares in Nufarm Ltd

Scheme

Balance  
at 1 August
2013

Granted as

remuneration Exercised

Net 
change 
other(d)

Balance  
at 31 July 
2014(e)

Vested 
during 
2014

Vested 
at 31 July

2014(a)

Value at  
date of 
forfeiture(d)

Executive director
DJ Rathbone(b)

LTI performance

 315,031 

 170,881 

 – 

 (180,749)

 305,163 

 – 

 670,579 

Executives

BF Benson

P Binfield

BJ Croft

R Heath

G Hunt

DA Mellody

MJ Pointon

E Prado

RG Reis

Total

Total

LTI performance
STI deferred(c)
LTI performance
STI deferred(c)
LTI performance
STI deferred(c)
LTI performance
STI deferred(c)
LTI performance
STI deferred(c)
LTI performance
STI deferred(c)
LTI performance
STI deferred(c)
LTI performance
STI deferred(c)
LTI performance
STI deferred(c)
LTI performance
STI deferred(c)

 60,302 

 21,202 

 97,288 

 9,312 

 28,298 

 9,790 

 27,744 

 19,274 

 90,876 

 11,776 

 45,872 

 15,602 

 34,611 

 11,014 

 – 

 – 

 52,850 

 18,357 

 752,872 

 116,327 

 869,199 

(a)  All options/rights that are vested are exercisable.

(b)  DJ Rathbone’s deferred STI is deferred in cash.

 – 

 (34,740)

 58,186 

 (21,202)

 – 

 17,582 

 21,202 

 – 

 (54,710)

 (9,312)

 – 

 – 

 (16,040)

 96,919 

 10,894 

 27,902 

 – 

 9,312 

 – 

 (9,790)

 – 

 8,272 

 9,790 

 – 

 – 

 – 

 – 

 – 

 (15,790)

 – 

 (52,588)

 – 

 (26,320)

 27,211 

 27,341 

 87,153 

 21,545 

 44,505 

 – 

 – 

 – 

 34,786 

 – 

 (30,080)

 51,831 

 – 

 – 

 – 

 (15,602)

 – 

 13,194 

 15,602 

 – 

 (18,340)

 37,037 

 – 

 9,663 

 (11,014)

 9,663 

 11,014 

 32,624 

 17,582 

 54,341 

 10,894 

 15,644 

 8,272 

 15,257 

 8,067 

 48,865 

 9,769 

 24,953 

 13,194 

 20,766 

 34,786 

 – 

 29,061 

 15,366 

 447,178 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 9,637 

 19,274 

 – 

 – 

 195,101 

 5,888 

 11,776 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 128,885 

 – 

 202,974 

 – 

 59,508 

 – 

 58,581 

 – 

 – 

 97,647 

 – 

 68,041 

 – 

 – 

 – 

 111,597 

 1,592,914 

 (18,357)

 – 

 15,366 

 18,357 

 – 

 (429,357)

 770,693 

 – 

 92,807 

 (85,277)

 – 

 123,857 

 100,802 

 31,050 

 – 

 539,985 

 (85,277)

 (429,357)

 894,550 

 100,802 

 31,050 

 1,592,914 

(c)   The grant date fair value of deferred shares granted as remuneration in 2014 was $4.75. One hundred per cent of STI deferred shares available to vest in 2014 

vested as the necessary service condition was satisfied. One hundred per cent of non-vested STI deferred shares are due to vest in 2015. 

(d)   LTI performance rights forfeited during 2014 are disclosed in column ‘net change other’. One hundred per cent of rights due to vest in 2014 were forfeited. 

The value of LTI performance rights forfeited is expressed in the table above using the grant date fair value of the rights determined in accordance with AASB 
2 Share-based payments. The value of the rights forfeited calculated by applying the share price of the company upon forfeiture of $4.35 was $1,867,703. 

(e)   With the exception of E Prado, 44 per cent of total LTI performance rights held by KMPs are due to vest in 2015, with the balance due to vest in 2016. 

One hundred per cent of LTI performance rights held by E Prado are due to vest in 2016. 

46 | NUFARM LIMITED ANNUAL REPORT 2014

DIRECTORS’ REPORT continued

Shares held in Nufarm Ltd

Directors
DG McGauchie
DJ Rathbone
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)

Note

1 
4 

1, 2
1, 3

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)
RG Reis

3 

Balance 
at 1 August
2013

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

 91,985 
 39,312 
 45,882 
 218,300 
 10,000 
 32,375 
 48,306 
 – 
 – 
 150,168 

Total

 13,604,472 

Granted as 
remuneration

On exercise
of rights

Net  
change
other

Balance 
at 31 July
2014

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 – 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 – 
 (8,357,790)
 – 
 – 
 10,000 
 2,722 
 – 
 – 
 – 

 46,239 
 3,368,241 
 10,000 
 40,000 
 10,000 
 1,146,138 
 – 
 2,458 
 – 

 21,202 
 9,312 
 9,790 
 – 
 – 
 15,602 
 11,014 
 – 
 – 
 18,357 

 – 
 26,000 
 (9,790)
 – 
 – 
 (9,671)
 – 
 – 
 – 
 – 

 113,187 
 74,624 
 45,882 
 218,300 
 10,000 
 38,306 
 59,320 
 – 
 – 
 168,525 

 85,277 

 (8,338,529)

 5,351,220 

1.   The shareholdings of Dr WB Goodfellow and DG McGauchie 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 (123,171 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 has been removed under the ‘net change other’ column due to his retirement as a director. 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 2014 (2013: 1,500).

NUFARM LIMITED ANNUAL REPORT 2014 | 47

DIRECTORS’ REPORT continued

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.

Loans to key management personnel

There were no loans to key management personnel at 31 July 2014 (2013: nil).

Other key management personnel transactions with the company or its controlled entities

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 director’s interest 
existing at year end.

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. 

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

DG McGauchie AO
Director

DJ Rathbone AM
Director

Melbourne
23 September 2014

48 | NUFARM LIMITED ANNUAL REPORT 2014

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 2014 
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
23 September 2014

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 2014 | 49

INCOME STATEMENT
For the year ended 31 July 2014

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

Profit/(loss) before income tax

Income tax benefit/(expense)

Consolidated

2014
$000

2013
$000

Note

 2,622,704 
 (1,955,363)
 667,341 

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

7

19

10
10

10

 10,882 
 (321,912)
 (168,489)
 (40,184)
 2,208 
 149,846 

 5,050 
 (12,609)
 (7,559)
 (80,436)
 (87,995)

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

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

 61,851 

 112,923 

11

 (24,104)

 (31,173)

Profit/(loss) for the period from continuing operations

 37,747 

 81,750 

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

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.

 37,707 
 40 

 80,999 
 751 

 37,747 

 81,750 

30
30

 9.6 
 9.6 

 25.5 
 25.4 

50 | NUFARM LIMITED ANNUAL REPORT 2014

STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 July 2014

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

2014
$000
 37,747 

2013
$000
 81,750 

 (62,136)
 (860)
 10,314 

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

 (15,321)
 (71)

 (683)
 252 

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

 (68,074)

 139,640 

Total comprehensive profit/(loss) for the period

 (30,327)

 221,390 

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.

 (30,367)
 40 

 220,639 
 751 

 (30,327)

 221,390 

NUFARM LIMITED ANNUAL REPORT 2014 | 51

BALANCE SHEET
As at 31 July 2014

Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax assets
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
Total non-current assets
TOTAL ASSETS

Current liabilities
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. 

52 | NUFARM LIMITED ANNUAL REPORT 2014

Consolidated

2014
$000

2013
$000

Note

15
16
17
18

16
19
20
18
22
23

24
25
26
18
28

24
25
18
26

 241,638 
 724,555 
 632,901 
 30,362 
 1,629,456 

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

 67,481 
 7,786 
 477 
 235,741 
 371,055 
 859,450 
 1,541,990 
 3,171,446 

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

 515,933 
 318,948 
 19,423 
 20,605 
 15,701 
 890,610 

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

 42,326 
 436,057 
 124,562 
 69,191 
 672,136 
 1,562,746 
 1,608,700 

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

 1,068,871 
 (248,573)
 536,241 
 1,356,539 
 246,932 
 5,229 
 1,608,700 

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

STATEMENT OF CASH FLOWS
For the year ended 31 July 2014

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
Material items
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
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

2014
$000

2013
$000

Note

 2,698,423 
 (2,316,894)
 381,529 
 5,050 
 254 
 (68,937)
 (45,028)
 (4,771)
 268,097 

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

6
38

 689 
 2,088 
 (44,460)
–
 (59,668)
 (101,351)

 1,036 
 12,630 
 (44,229)
 (30,706)
 (51,874)
 (113,143)

 (6,558)
 910,991 
 (1,047,435)
 (16,905)
 (18,371)
 (178,278)

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

 (11,532)
 264,972 
 (11,802)
 241,638 

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

15

NUFARM LIMITED ANNUAL REPORT 2014 | 53

STATEMENT OF CHANGES IN EQUITY
For the year ended 31 July 2014

Consolidated
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
 1,059,522 

Translation
reserve
$000
 (363,410)

Capital profit
reserve
$000
 33,627 

Other

reserve

$000

 2,868 

Retained

earnings

$000

 496,663 

Nufarm step-up 

Non-controlling

Total

$000

 1,229,270 

securities

$000

 246,932 

interest

$000

 600 

Total

equity

$000

 1,476,802 

 – 

 – 
 – 
 – 
 – 
 – 
 – 

 – 
 3,494 
 – 
 976 
 – 
 – 

 – 

 – 
 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 

Balance at 1 August 2013

 1,063,992 

 (196,643)

 33,627 

 (35,654)

 547,302 

 1,412,624 

 246,932 

 5,189 

 1,664,745 

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
Remeasurement of non-controlling interest option

 – 

 – 
 – 
 – 
 – 
 – 
 – 

 – 
 2,172 
 – 
 2,707 
 – 
 – 

 – 

 – 
 (62,136)
 – 
 – 
 – 
 (62,136)

 – 
 – 
 – 
 – 
 – 
 – 

 – 

 – 
 – 
 – 
 – 
 – 
 – 

 – 
 – 
 – 
 – 
 – 
 – 

Balance at 31 July 2014

 1,068,871 

 (258,779)

 33,627 

 (23,421)

 536,241 

 1,356,539 

 246,932 

 5,229 

 1,608,700 

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

54 | NUFARM LIMITED ANNUAL REPORT 2014

 80,999 

 80,999 

 751 

 81,750 

 (3,625)

 (23,071)

 252 

 (26,444)

 4,528 

 (3,494)

 (13,112)

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 (860)

 10,314 

 (71)

 9,383 

 1,782 

 (2,172)

 – 

 – 

 – 

 3,240 

 (683)

 80,316 

 (15,703)

 (13,974)

 (15,321)

 22,386 

 (21,078)

 (12,369)

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 (683)

 166,767 

 (3,625)

 (23,071)

 252 

 220,639 

 4,528 

 – 

 (15,703)

 976 

 (13,974)

 (13,112)

 (15,321)

 (62,136)

 (860)

 10,314 

 (71)

 (30,367)

 1,782 

 – 

 (21,078)

 2,707 

 (12,369)

 3,240 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 751 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 3,838 

 40 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 (683)

 166,767 

 (3,625)

 (23,071)

 252 

 221,390 

 4,528 

 – 

 (15,703)

 976 

 (13,974)

 (9,274)

 (15,321)

 (62,136)

 (860)

 10,314 

 (71)

 (30,327)

 1,782 

 – 

 (21,078)

 2,707 

 (12,369)

 3,240 

 37,707 

 37,707 

 40 

 37,747 

STATEMENT OF CHANGES IN EQUITY continued
For the year ended 31 July 2014

Share

capital

$000

 1,059,522 

Translation

Capital profit

reserve

$000

 (363,410)

reserve

$000

 33,627 

Other
reserve
$000
 2,868 

Retained
earnings
$000
 496,663 

Total
$000
 1,229,270 

Nufarm step-up 
securities
$000
 246,932 

Non-controlling
interest
$000
 600 

Total
equity
$000
 1,476,802 

 – 

 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)

 – 

 – 
 – 
 – 
 – 
 – 
 – 

 – 
 – 
 – 
 – 
 – 
 – 

 751 

 – 
 – 
 – 
 – 
 – 
 751 

 – 
 – 
 – 
 – 
 – 
 3,838 

 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 

Balance at 1 August 2013

 1,063,992 

 (196,643)

 33,627 

 (35,654)

 547,302 

 1,412,624 

 246,932 

 5,189 

 1,664,745 

 – 

 37,707 

 37,707 

 – 
 – 
 (860)
 10,314 
 (71)
 9,383 

 1,782 
 (2,172)
 – 
 – 
 – 
 3,240 

 (15,321)
 – 
 – 
 – 
 – 
 22,386 

 – 
 – 
 (21,078)
 – 
 (12,369)
 – 

 (15,321)
 (62,136)
 (860)
 10,314 
 (71)
 (30,367)

 1,782 
 – 
 (21,078)
 2,707 
 (12,369)
 3,240 

 – 

 – 
 – 
 – 
 – 
 – 
 – 

 – 
 – 
 – 
 – 
 – 
 – 

 40 

 – 
 – 
 – 
 – 
 – 
 40 

 – 
 – 
 – 
 – 
 – 
 – 

 37,747 

 (15,321)
 (62,136)
 (860)
 10,314 
 (71)
 (30,327)

 1,782 
 – 
 (21,078)
 2,707 
 (12,369)
 3,240 

Consolidated

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 

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

Remeasurement of non-controlling interest option

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 3,494 

 976 

 2,172 

 2,707 

 166,767 

 166,767 

 (62,136)

 (62,136)

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

Balance at 31 July 2014

 1,068,871 

 (258,779)

 33,627 

 (23,421)

 536,241 

 1,356,539 

 246,932 

 5,229 

 1,608,700 

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

NUFARM LIMITED ANNUAL REPORT 2014 | 55

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 2014 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 23 September 2014. 

(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 $530 million syndicated bank facility, entered into in December 2013, 
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. 

56 | NUFARM LIMITED ANNUAL REPORT 2014

 
 
 
 
 
 
 
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 

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

3. Significant accounting policies 

Except as described immediately below, the group’s accounting policies have been applied consistently to all periods 
presented in these consolidated financial statements, and have been applied consistently by group entities. 

The company has changed some of its accounting policies as the result of new or revised accounting standards that became 
effective for the annual reporting period commencing on 1 July 2013. The affected policies and standards are:

•  principles of consolidation: new standards AASB 10 Consolidated Financial Statements and AASB 11 Joint Arrangements; and

•  accounting for employee benefits: revised AASB 119 Employee Benefits.

Other new standards that have been applied for the first time for the July 2014 annual report are AASB 12 Disclosure of 
Interests in Other Entities, AASB 13 Fair Value Measurement, AASB 2012-2 Amendments to Australian Accounting Standards 
– Disclosures – Offsetting Financial Assets and Financial Liabilities, AASB 2012-5 Amendments to Australian Accounting 
Standards arising from Annual Improvements 2009-2011 Cycle and Recoverable Amount for Non-financial Assets – 
Amendments to IAS 36(2013). These standards have introduced new disclosures for the annual report but did not 
materially affect the entity’s accounting policies or any of the amounts recognised in the financial statements.

(i) Principles of consolidation – subsidiaries and joint arrangements

AASB 10 was issued in August 2011 and replaces the guidance on control and consolidation in AASB 127 Consolidated and 
Separate Financial Statements and in Interpretation 112 Consolidation – Special Purpose Entities. Under the new principles, 
the group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the 
entity and has the ability to affect those returns through its power over the entity.

NUFARM LIMITED ANNUAL REPORT 2014 | 57

 
 
 
 
 
NOTES TO THE FINANCIAL STATEMENTS continued

3. Significant accounting policies (continued)

(i) Principles of consolidation – subsidiaries and joint arrangements (continued)
The group has reviewed its investments in other entities to assess whether the consolidation conclusion in relation to these 
entities is different under AASB 10 than under AASB 127. No differences were found and therefore no adjustments to any 
of the carrying amounts in the financial statements are required as a result of the adoption of AASB 10.

Under AASB 11 investments in joint arrangements are classified as either joint operations or joint ventures depending on the 
contractual rights and obligations each investor has, rather than the legal structure of the joint arrangement. The group has 
assessed the nature of its joint arrangements and determined to have joint ventures only.

The accounting for the group’s joint ventures has not changed as a result of the adoption of AASB 11. The group continues 
to use the equity method to account for its interest in joint ventures. Under this method, the interests are initially recognised 
in the consolidated balance sheet at cost and adjusted thereafter to recognise the group’s share of the post-acquisition profits 
or losses and movements in other comprehensive income in profit or loss and other comprehensive income respectively. 

(ii) Employee benefits

The adoption of the revised AASB 119 Employee Benefits resulted in two changes to the group’s accounting policy. 

•  All past service costs are now recognised immediately in profit or loss. Previously, past service costs were recognised on 
a straight-line basis over the vesting period if the changes were conditional on the employees remaining in service for a 
specified period of time (the vesting period). The impact of this change was immaterial.

•  The group now determines the net interest expense (income) for the period on the net defined benefit liability (asset) by 

applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net 
defined benefit liability (asset) at the beginning of the annual period, taking into account any changes in the net defined 
benefit liability (asset) during the period as a result of contributions and benefit payments. Previously, the group determined 
interest income on plan assets based on their long term rate of expected return. The impact on the income statement is 
immaterial, the net impact on total comprehensive income is nil and there is also no adjustment to the amounts recognised 
in the balance sheet from this change. 

There are no other material impacts upon adoption of AASB 119.

(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. 

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.

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.

58 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

3. Significant accounting policies (continued)

(a) Basis of consolidation (continued)

(ii) Non-controlling interests (NCI) 
NCI are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. 

When a written put option is established with non-controlling shareholders in an existing subsidiary, then the group will 
recognise a liability for the present value of the exercise price of the option. When the NCI still has present access to the 
returns associated with the underlying ownership interest, NCI continues to be recognised and accordingly the liability is 
considered a transaction with owners and recognised via a reserve. Any changes in the carrying value of the put liability 
over time is recognised directly in reserves. 

(iii) Subsidiaries 
Subsidiaries are entities controlled by the group. The group controls an entity when it is exposed to, or has rights to, 
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the 
entity. 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. 

(iv) Investments in equity accounted investees 
The group’s interests in equity accounted investees comprise interests in associates and a joint venture. Associates are those 
entities in which the group has significant influence, but not control or joint control, over the financial and operating policies. 
A joint venture is an arrangement in which the group has joint control, whereby the group has rights to the net assets of the 
arrangement, rather than rights to its assets and obligations for its liabilities. 

Investments in associates and joint ventures 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 investees, after adjustments 
to align the accounting policies with those of the group, from the date that significant influence of equity accounted 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. 

(v) 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. 

NUFARM LIMITED ANNUAL REPORT 2014 | 59

NOTES TO THE FINANCIAL STATEMENTS continued

3. Significant accounting policies (continued)

(b) Foreign currency (continued)

(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.

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.

60 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

3. Significant accounting policies (continued)

(c) Financial instruments (continued) 

(i) Non-derivative financial assets (continued) 

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 initially 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. This includes trade payables that represent liabilities for goods and services provided to the group prior to the 
end of the year which are unpaid.

(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.

(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. 

NUFARM LIMITED ANNUAL REPORT 2014 | 61

 
NOTES TO THE FINANCIAL STATEMENTS continued

3. Significant accounting policies (continued)

(c) Financial instruments (continued) 

(iv) Derivative financial instruments, including hedge accounting (continued)

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. 

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. 

62 | NUFARM LIMITED ANNUAL REPORT 2014

 
 
 
 
 
 
 
 
 
 
 
NOTES TO THE FINANCIAL STATEMENTS continued

3. Significant accounting policies (continued)

(d) Property, plant and equipment (continued)

(i) Recognition and measurement (continued)
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  

•  computer equipment  

5 years 

3 years 

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

(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.

NUFARM LIMITED ANNUAL REPORT 2014 | 63

 
 
 
 
 
 
NOTES TO THE FINANCIAL STATEMENTS continued

3. Significant accounting policies (continued)

(e) Intangible assets (continued)

(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.

(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.

64 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

3. Significant accounting policies (continued)

(h) Impairment (continued)

(i) Non-derivative financial assets (continued)
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.

(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.

NUFARM LIMITED ANNUAL REPORT 2014 | 65

NOTES TO THE FINANCIAL STATEMENTS continued

3. Significant accounting policies (continued)

(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
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 the current and prior periods, discounting that amount and deducting the fair 
value of any assets.

The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit 
method. When the calculation results in a potential asset for the group, the recognised asset is limited to the present value 
of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. 
To calculate the present value economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan asset 
(excluding interest) and the effect of the asset ceiling (if any, excluding interest) are recognised immediately in OCI. The 
group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the 
discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then net-defined 
benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a 
result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans 
are recognised in profit and loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service 
or the gain or loss on curtailment is recognised immediately in profit or loss. The group recognises gains and losses on the 
settlement of a defined benefit plan when the settlement occurs.

(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.

(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.

66 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

3. Significant accounting policies (continued)

(j) Employee benefits

(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 that 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) that 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.

(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. 

NUFARM LIMITED ANNUAL REPORT 2014 | 67

NOTES TO THE FINANCIAL STATEMENTS continued

3. Significant accounting policies (continued)

(m) Lease payments (continued)

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.

(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.

68 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

3. Significant accounting policies (continued)

(o) Income tax (continued)

(i) Tax consolidation (continued)
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 blow). 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 
that 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 tax authority 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.

NUFARM LIMITED ANNUAL REPORT 2014 | 69

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 officer 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 officer 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 July 2013 and have not been applied in preparing these financial statements. None of these are expected to have a significant 
effect on the consolidated financial statements of the group, except for AASB 9 Financial Instruments, which becomes 
mandatory for the group’s 2016 consolidated financial statements and could change the classification and measurement 
of financial assets. The group does not currently plan to adopt this standard early and the extent of the impact has not 
been determined.

4. Determination of fair values 

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.

70 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

4. Determination of fair values (continued)

(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.

(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 (VWAP) 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: 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 officer. 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 2014 | 71

 
NOTES TO THE FINANCIAL STATEMENTS continued

5. Operating segments (continued)

2014
Operating
segments
Revenue
Total segment revenue 605,761  140,885   555,521   513,596 

Australia and 
New Zealand
$000

Europe
$000

Asia
$000

Crop protection
North
America
$000

Seed 

technologies Corporate

Group

South 
America
$000

Total
$000

Global
$000

$000

Total
$000

 662,512   2,478,275 

 144,429 

 –   2,622,704 

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

 53,869 

 22,418 

 89,629 

 35,879 

 75,286 

 277,081 

 41,963 

 (37,621)

 281,423 

 (19,966)
 33,903 

 (2,937)  (33,209)  (15,241)
 20,638 
 56,420 
 19,481 

 (3,664)
 71,622 

 (75,017)
 202,064 

 (4,803)
 37,160 

 (996)
 (38,617)

 (80,816)
 200,607 

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

 (50,761)

 – 

 (87,995)
 61,851 

Assets
Segment assets
Investment in associates
Total assets

Liabilities
Segment liabilities
Total liabilities

Other segment 
information
Capital expenditure

417,599 
 – 
417,599 

 85,878   753,554   442,360 
 – 
 1,993 
 91,287   755,547   442,360 

 5,409 

 645,914  2,345,305 
 7,402 
 645,914  2,352,707 

 – 

 316,316 
 384 
 316,700 

 502,039  3,163,660 
 7,786 
 502,039  3,171,446 

 – 

134,764 
134,764 

 98,342   186,768 
 98,342   186,768 

 56,022 
 56,022 

 133,211 
 133,211 

 609,107 
 609,107 

 31,307 
 31,307 

 922,332  1,562,746 
 922,332  1,562,746 

 12,834 

 5,102 

 37,675 

 13,979 

 7,175 

 76,765 

 16,900 

 – 

 93,665 

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

and impairments.

72 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

5. Operating segments (continued)

2013
Operating
segments
Revenue
Total segment revenue

Australia and 
New Zealand
$000

Crop protection
North
America
$000

Europe
$000

South 
America
$000

Asia
$000

Seed 

technologies Corporate

Group

Total
$000

Global
$000

$000

Total
$000

 604,432   125,201   468,253 

 516,278 

 431,440   2,145,604 

 131,688 

 –   2,277,292 

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

 57,765 

 23,640 

 84,023 

 55,366 

 43,482 

 264,276 

 36,024 

 (39,511)

 260,789 

 (22,413)
 35,352 

 (4,060)
 19,580 

 (26,778)
 57,245 

 (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 

Assets
Segment assets
Investment in associates
Total assets

Liabilities
Segment liabilities
Total liabilities

Other segment 
information
Capital expenditure

 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 

(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 2014 | 73

NOTES TO THE FINANCIAL STATEMENTS continued

5. Operating segments (continued)

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

Revenue by location 
of customer

Non-current assets 
by location

2014
$000
 570,396 
 67,866 
 151,065 
 579,131 
 459,625 
 105,100 
 552,391 
 137,130 
 – 
 2,622,704 

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

2014
$000
 228,520 
 7,051 
 39,915 
 393,527 
 321,470 
 24,050 
 272,202 
 19,513 
 235,742 
 1,541,990 

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 
Australia/New Zealand asset rationalisation and restructure

Consolidated

Consolidated

2014
$000
Pre-tax

2014
$000
After-tax

2013
$000
Pre-tax

2013
$000
After-tax

 – 
 (50,761)
 (50,761)

 – 
 (48,704)
 (48,704)

 (3,177)
 – 
 (3,177)

 (2,224)
 – 
 (2,224)

Class action settlement

No class action settlement costs were incurred during the year ended 31 July 2014. During 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 were reported 
as a material item.

Australia/New Zealand asset rationalisation and restructure

Asset rationalisation and restructure costs of $48.704 million (after tax) mainly relate to the rationalisation of Australian and 
New Zealand manufacturing assets, whereby three manufacturing facilities will be closed and manufacturing consolidated. 
The program has resulted in the rationalisation of under-utilised assets and an organisational restructure. Asset rationalisation 
costs have only been tax benefited to the extent that it is foreseeable that the benefit will be utilised.

No material asset rationalisation and restructure costs were incurred during the year ended 31 July 2013.

74 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

6. Items of material income and expense (continued)

Material items are classified by function as follows:

Selling, 
marketing and 
distribution 
expense

General and 
administrative 
expense

Research and 
development 
expense

Net  
financing  
costs

Cost of 
sales

 (33,612)
 (33,612)

 (7,322)
 (7,322)

 (8,674)
 (8,674)

 (1,153)
 (1,153)

 (33,612)

 (7,322)

 (8,674)

 (1,153)

Total 
Pre-tax 

 (50,761)
 (50,761)

 (50,761)

 – 
 – 

 – 

Selling, 
marketing and 
distribution 
expense
 – 
 – 

Cost of 
sales
 – 
 – 

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

Research and 
development 
expense
 – 
 – 

Net 
financing 
costs
 – 
 – 

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

 – 

 – 

 (3,177)

 – 

 – 

 (3,177)

Year ended 31 July 2014
$000
Australia/New Zealand asset 
rationalisation and restructure

Total material items included 
operating profit

Year ended 31 July 2013 
$000
Class action settlement 

Total material items included 
operating profit

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

Consolidated

2014
$000
 134 
 199 
 10,549 
 10,882 

2013
$000
 1 
 199 
 20,477 
 20,677 

Consolidated

2014
$000
 (80,816)
 (5,693)

2013
$000
 (73,986)
 (5,773)

NUFARM LIMITED ANNUAL REPORT 2014 | 75

NOTES TO THE FINANCIAL STATEMENTS continued

9. Personnel expenses

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

Consolidated

2014
$000
 (242,767)
 (42,580)
 (13,742)
 (4,002)
 (9,681)
 (2,091)
 (14,732)
 (329,595)

2013
$000
 (219,754)
 (37,370)
 (13,809)
 (3,311)
 (8,081)
 (3,319)
 – 
 (285,644)

The restructure expense relates to the rationalisation and restructure of the group’s Australian and New Zealand operations. 
(No material restructure costs were incurred in the year ended 31 July 2013). These costs are included in material items 
in note 6.

10. Finance income and expense

Financial income excluding foreign exchange gains/(losses)
Net foreign exchange gains/(losses)
Financial income

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

Net financing costs

Consolidated

2014
$000
 5,050 
 (12,609)
 (7,559)

 (67,527)
 (11,129)
 (1,780)
 (80,436)

2013
$000
 5,491 
 (10,734)
 (5,243)

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

 (87,995)

 (70,703)

76 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

11. Income tax expense

Recognised in the income statement
Current tax expense
Current period
Expense upon derecognition of tax assets on material items
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

2014
$000

2013
$000

Note

 24,275 
 12,961 
 (4,013)
 33,223 

 (9,974)
 (221)
 1,076 
 (9,119)

 29,383 
 – 
 (2,189)
 27,194 

 3,446 
 (30)
 563 
 3,979 

Total income tax expense/(benefit) in income statement

 24,104 

 31,173 

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/(decrease) 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
Non-recognition of tax assets on material items
Settlement of Brazilian tax proceedings
Utilisation of tax losses on settlement of Brazilian tax proceedings
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

18
18

 24,104 
 24,104 

 31,173 
 31,173 

 61,851 

 112,923 

 18,555 

 33,877 

 2,642 
 1,939 
 (221)
 1,076 
 12,961 
 21,053 
 (21,053)
 (4,349)
 (1,747)
 (2,739)
 28,117 
 (4,013)
 24,104 

 2,676 
 1,388 
 (30)
 563 
 – 
 – 
 – 
 (2,838)
 (382)
 (1,892)
 33,362 
 (2,189)
 31,173 

 (4,536)
 (4,536)

 (4,970)
 (4,970)

 (4,052)
 71 
 (3,981)

 269 
 (252)
 17 

NUFARM LIMITED ANNUAL REPORT 2014 | 77

NOTES TO THE FINANCIAL STATEMENTS continued

12. Discontinued operations

There were no discontinued operations in 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

14. Acquisition of businesses and acquisition of non-controlling interests

Business acquisitions – 2014

There were no businesses acquired in the current period.

Business acquisitions – 2013

Consolidated

2014
$000
 – 
 – 

2013
$000
 – 
 – 

On 1 January 2013, the group purchased the turf and ornamental business of US-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 US. 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.

78 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

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

Acquiree’s net assets at acquisition date
Cash and cash equivalents
Receivables
Inventory
Property, plant and equipment
Pre-acquistion intangibles assets 
Other assets
Trade and other payables
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

Fair value on
acquisiton 
 2014
$000
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

Fair value on

acquisiton(a)

 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 

(a)  There have been no adjustments to the provisional fair values reported at 31 July 2013.

Total goodwill of $nil (2013: $15,613,000) 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 

There were no acquisition of non-controlling interest in the current or prior period.

15. Cash and cash equivalents 

Bank balances
Call deposits
Cash and cash equivalents

Consolidated

2014
$000
 194,121 
 47,517 
 241,638 

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

NUFARM LIMITED ANNUAL REPORT 2014 | 79

NOTES TO THE FINANCIAL STATEMENTS continued

Consolidated

2014
$000

2013
$000

 696,434 
 (26,591)
 669,843 

 701,560 
 (24,172)
 677,388 

 184 
 – 
 19,443 
 35,085 
 724,555 

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

 67,481 
 67,481 

 36,191 
 36,191 

 792,036 

 794,725 

Consolidated

2014
$000
 193,323 
 29,983 
 415,231 
 638,537 
 (5,636)
 632,901 

2013
$000
 213,880 
 16,702 
 578,609 
 809,191 
 (6,402)
 802,789 

16. Trade and other receivables

Current
Trade receivables
Provision for impairment losses

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

Non-current
Other receivables
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

80 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

18. Tax assets and liabilities

Current tax assets and liabilities

The current tax asset for the group of $30,361,730 (2013: $33,865,619) 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 $20,604,868 (2013: $16,677,067) represents the amount of income taxes payable in 
respect of current and prior financial periods.

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)

2014
$000
 6,222 
 8,470 
 17,703 
 17,137 
 17,109 
 172,703 
 239,344 
 (3,603)
 235,741 

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

2014
$000
 (10,516)
 (102,089)
 – 
 – 
 (15,560)
 – 
 (128,165)
 3,603 
 (124,562)

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

2014
$000
 (4,294)
 (93,619)
 17,703 
 17,137 
 1,549 
 172,703 
 111,179 
 – 
 111,179 

Movement in temporary differences during the year

Consolidated 2014
Property, plant and equipment
Intangibles assets
Employee benefits
Provisions
Other items
Tax value of losses carried forward

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

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

Recognised
in income
$000
 2,201 
 (8,014)
 (1,195)
 6,903 
 (9,159)
 18,383 
 9,119 

Recognised
in equity
$000
 – 
 – 
 4,052 
 – 
 (71)
 – 
 3,981 

Currency
adjustment
$000
 39 
 3,385 
 233 
 (420)
 (1,118)
 (3,698)
 (1,579)

Other
movement
$000
 – 
 – 
 – 
 – 
 – 
 19,130 
 19,130 

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

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

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

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

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

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

Balance
31.07.14
$000
 (4,294)
 (93,619)
 17,703 
 17,137 
 1,549 
 172,703 
 111,179 

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

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 $76.6 million (2013: $56.3 million).

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

NUFARM LIMITED ANNUAL REPORT 2014 | 81

NOTES TO THE FINANCIAL STATEMENTS continued

18. Tax assets and liabilities (continued)

Deferred tax assets and liabilities (continued)

Unrecognised deferred tax liability
At 31 July 2014, a deferred tax liability of $25,743,684 (2013: $25,200,672) 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 2014, there are unrecognised tax losses and timing differences of $13,884,125 (2013: $29,590,667). These losses 
do not have an expiry date. 

During December 2013, the company elected to participate in a federal tax program instigated by the Brazilian government 
that allows taxpayers to reduce their tax liabilities by offering discounts on claims (including penalties and interest). The company 
elected to enter into the program and was able to offset the resulting tax liability by recognising previously unrecognised tax 
assets. The amount of previously unrecognised deferred tax assets offset in this way was $21,053,467. Refer note 34.

19. Investments accounted for using the equity method

The group accounts for investments in associates and joint ventures using the equity method. 

The group had the following individually immaterial associates and joint ventures during the year:

Nature of 
relationship

Excel Crop Care Ltd Associate1
F&N joint ventures
Lotus Agrar GmbH
Others

Joint Ventures2
Joint Venture3
Associates4

Country
India
Europe
Germany

Balance date 
of associate
31 March
31 December
31 December

Ownership and
voting interest

Carrying 
amount

Share  
of profit

2014

2014
$000
2013
14.69% 14.69%  5,409 
50.00% 50.00%  1,142 
 851 
50.00% 50.00%
 384 
 7,786 

2013
$000
 3,882 
 506 
 1,486 
 323 
 6,197 

2014
$000
 2,081 
 651 
 (614)
 90 
 2,208 

2013
$000
 796 
 (897)
 – 
 41 
 (60)

1.   Excel Crop Care Ltd is an agricultural chemicals manufacturer. Nufarm’s investment in Excel Crop Care Ltd is equity accounted due to Nufarm holding 
14.69 per cent of voting rights in Excel Crop Care Ltd, the transactions undertaken between the parties and Nufarm’s ability to appoint two directors 
to the board. The relationship extends to manufacturing and marketing collaborations and the sale/purchase of crop protection products.

2.   F&N joint ventures are agricultural chemicals distributors. 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.

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

4.   Aggregate of other individually immaterial associates.

The share of net profits has been derived from the latest management reports as at 31 July 2014 for the F&N joint ventures. 
The Excel Crop Care share of net profits is from the 30 June 2014 management accounts. 

82 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

20. Other investments

Investments – available-for-sale
Balance at the beginning of 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

Consolidated

2014
$000

 – 
 – 
 – 
 – 

 477 

 477 

2013
$000

 5,568 
 (5,616)
 48 
 – 

 448 

 448 

Consolidated

2014
$000
 – 
 – 

2013
$000
 – 
 – 

NUFARM LIMITED ANNUAL REPORT 2014 | 83

NOTES TO THE FINANCIAL STATEMENTS continued

22. Property, plant and equipment

Consolidated 2014
Cost
Balance at 1 August 2013
Additions
Additions through business combinations
Disposals and write-offs
Other transfers
Exchange adjustment
Balance at 31 July 2014

Depreciation and impairment losses
Balance at 1 August 2013
Depreciation charge for the year
Additions through business combinations
Impairment loss
Disposals and write-offs
Other transfers
Exchange adjustment
Balance at 31 July 2014

Land
and
buildings
$000

Plant and
machinery
$000

Leased
plant and
machinery
$000

Capital
work in
progress
$000

 214,121 
 1,220 
 – 
 (463)
 2,690 
 (4,420)
 213,148 

 647,143 
 17,895 
 – 
 (7,303)
 14,608 
 (5,731)
 666,612 

 (77,338)
 (6,583)
 – 
 (6,593)
 391 
 188 
 2,076 
 (87,859)

 (422,386)
 (38,010)
 – 
 (17,808)
 6,720 
 2,204 
 5,462 
 (463,818)

 18,637 
 723 
 – 
–
 – 
 385 
 19,745 

 (1,337)
 (1,147)
 – 
 – 
–
 – 
 (26)
 (2,510)

Total
$000

 903,759 
 44,460 
 – 
 (9,888)
 (3,213)
 (9,876)
 925,242 

 23,858 
 24,622 
 – 
 (2,122)
 (20,511)
 (110)
 25,737 

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 (501,061)
 (45,740)
 – 
 (24,401)
 7,111 
 2,392 
 7,512 
 (554,187)

Net property, plant and equipment at 31 July 2014

 125,289 

 202,794 

 17,235 

 25,737 

 371,055 

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

Depreciation and impairment losses
Balance at 1 August 2012
Depreciation charge for the year
Additions through business combinations
Disposals and write-offs
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)

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

 – 
 – 
 – 
 – 
 – 
 – 
 – 

Total
$000

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

 (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 

Assets pledged as security for finance leases amount to $10.714 million (2013: $10.063 million).

84 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

23. Intangible assets

Consolidated 2014
Cost
Balance at 1 August 2013
Additions
Additions through business combinations
Disposals and write-offs
Other transfers
Exchange adjustment
Balance at 31 July 2014

Amortisation and impairment losses
Balance at 1 August 2013
Amortisation charge for the year
Impairment loss
Disposals and write-offs
Other transfers
Exchange adjustment
Balance at 31 July 2014

Intellectual  
property

Goodwill
$000

Indefinite
 life
$000

Finite
life
$000

Capitalised
development
costs
$000

Computer
software
$000

Total
$000

 357,906 
 – 
 – 
 – 
 (5,840)
 (7,506)
 344,560 

 419,751 
 2,842 
 – 
 (213)
 (1,534)
 (12,109)
 408,737 

 146,741 
 4,612 
 – 
 – 
 1,534 
 (5,611)
 147,276 

 195,342 
 42,264 
 – 
 (12,527)
 1,285 
 3,758 
 230,122 

 36,778   1,156,518 
 51,317 
 1,599 
 – 
 – 
 (12,771)
 (31)
 (5,049)
 (494)
 (1,103)
 (22,571)
 36,749   1,167,444 

 (120,779)
 – 
 (5,649)
 – 
 5,840 
 2,839 
 (117,749)

 (16,673)
 (25)
 (166)
 166 
 1 
 493 
 (16,204)

 (77,102)
 (12,542)
 (20)
 (135)
 – 
 2,385 
 (87,414)

 (51,510)
 (19,114)
 (987)
 12,381 
 28 
 122 
 (59,080)

 (24,699)
 (3,395)
 – 
 24 
 1 
 522 
 (27,547)

 (290,763)
 (35,076)
 (6,822)
 12,436 
 5,870 
 6,361 
 (307,994)

Intangibles carrying amount at 31 July 2014

 226,811 

 392,533 

 59,862 

 171,042 

 9,202 

 859,450 

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

Intellectual  
property

Goodwill
$000

Indefinite
 life
$000

Finite
life
$000

Capitalised
development
costs
$000

Computer
software
$000

Total
$000

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

 368,749 
 11,789 
 374 
 (489)
 (9,919)
 49,247 
 419,751 

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

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

 (14,894)
 (560)
 (1,191)
 77 
 1,919 
 (2,024)
 (16,673)

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

 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 
 36,778 

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

 (18,930)
 (3,778)
 – 
 36 
 – 
 (2,027)
 (24,699)

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

Intangibles carrying amount at 31 July 2013

 237,127 

 403,078 

 69,639 

 143,832 

 12,079 

 865,755

NUFARM LIMITED ANNUAL REPORT 2014 | 85

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.

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 (CGU)).

The group has determined that operating unit by country or region (i.e. Europe) is the appropriate method for determining 
the 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 or region specific in nature. There is no 
allocation of goodwill between CGUs.

The major CGUs and their intangible value is as follows: US$191 million (2013: $188 million), Brazil $186 million (2013: $170 million), 
Seeds business $211 million (2013: $200 million), Europe $188 million (2013: $181 million) and Australia/New Zealand $26 million 
(2013: $29 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:

Terminal  
growth rate

Discount  
rate

Total goodwill  
and indefinite  
life assets

2014
%

2013
%

2014
%

2013
%

2014
$000

2013
$000

Material crop protection 
CGUs (US, Brazil, Europe and 
Australia/New Zealand)
Seeds CGU

 1.6 to 3.5 
2.0

2.0 to 3.5
2.0

7.3 to 13.3
8.8

9.2 to 11.4
8.9

 423,240 
 162,796 

 436,621 
 168,200 

86 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

24. Trade and other payables

Current payables – unsecured
Trade creditors and accruals – unsecured
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

2014
$000

2013
$000

 510,961 
 2,628 
 2,344 
 515,933 

 525,846 
 19,984 
 4,489 
 550,319 

 10,537 
 21,092 
 10,697 
 42,326 

 9,633 
 22,313 
 16,925 
 48,871 

Consolidated

2014
$000

2013
$000

 294,898 
 29,136 
 (6,079)
 489 
 504 
 318,948 

 78,524 
 14,739 
 339,271 
 (10,458)
 1,589 
 12,392 
 436,057 

 231,002 
 93,793 
 (9,218)
 386 
 402 
 316,365 

 225,674 
 4,834 
 350,146 
 (11,892)
 1,104 
 11,854 
 581,720 

 (241,638)

 (264,972)

 513,367 

 633,113

NUFARM LIMITED ANNUAL REPORT 2014 | 87

NOTES TO THE FINANCIAL STATEMENTS continued

25. Interest-bearing loans and borrowings (continued)

Financing facilities

Key group facilities include a $300 million group trade receivables securitisation facility, a US$325 million senior unsecured 
notes offering due in October 2019, and a senior secured syndicated bank facility of $530 million, of which $520 million is due 
in December 2016 and $10 million is due in December 2014. On 19 December 2013, the refinancing of the syndicated bank 
facility was completed with the facility increasing from $406 million to $530 million.

The majority of debt facilities that reside outside the senior unsecured notes, syndicated bank facility and the group trade 
receivables securitisation facility are regional working capital facilities, primarily located in Brazil and Europe totalling 
$572 million (2013: $343 million).

Refer to note 31 for further detail regarding the group’s financing facilities.

Accessible
$000

Utilised
$000

 1,741,340 
 2,078 
 1,743,418 

 756,568 
 2,078 
 758,646 

 1,320,116 
 1,490 
 1,321,606 

 905,449 
 1,490 
 906,939 

Consolidated

2014
$000
 – 
 324,522 
 7,138 
 426,986 

2013
$000
 325,181 
 194,684 
 32,095 
 354,979 

 1,781 
 1,706 
 4,804 
 94,974 
 103,265 
 (90,369)
 12,896 

 1,732 
 1,657 
 4,462 
 90,333 
 98,184 
 (85,928)
 12,256 

2014
Bank loan facilities and senior unsecured notes
Other facilities
Total financing facilities

2013
Bank loan facilities and senior unsecured notes
Other facilities
Total financing facilities

Financing arrangements

Repayment of borrowings (excluding finance leases)
Period ending 31 July 2014
Period ending 31 July 2015
Period ending 31 July 2016
Period ending 31 July 2017 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.

88 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

25. Interest-bearing loans and borrowings (continued)

Financing arrangements (continued)

Average interest rates
Nufarm step-up securities (refer note 29)
Syndicated bank facility
Group 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

2014
 % 
6.63
4.34
3.33
7.70
12.49
6.38

2013
 % 
6.95
5.06
3.32
5.66
12.48
6.38

Consolidated

2014
$000

2013
$000

 16,051 
 3,372 
 19,423 

 16,400 
 3,383 
 19,783 

 5,866 
 170,495 
 (121,773)
 54,588 

 6,079 
 140,505 
 (111,361)
 35,223 

 14,603 
 69,191 
 88,614 

 14,996 
 50,219 
 70,002

The group makes contributions to defined benefit pension funds in the UK, the Netherlands, France and Indonesia that 
provide defined benefit amounts for employees upon retirement.

NUFARM LIMITED ANNUAL REPORT 2014 | 89

 
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 losses/(gains)
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
Interest income
Actuarial gains/(losses) – return on plan assets excluding interest income
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
Interest income
Past service cost
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

2014
$000

2013
$000

 146,584 
 3,326 
 7,730 
 18,096 
 (923)
 – 
 54 
 (5,428)
 6,922 
 176,361 

 111,361 
 6,131 
 (1,277)
 – 
 5,147 
 (4,736)
 5,147 
 121,773 

 3,326 
 7,730 
 (6,131)
 (923)
 4,002 

 2,315 
 763 
 618 
 306 
 4,002 

 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 

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

 (17,681)
 (15,321)
 (33,002)

 (16,998)
 (683)
 (17,681)

90 | NUFARM LIMITED ANNUAL REPORT 2014

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
Future salary increases
Future pension increases

Consolidated

2014
 %
62.4
35.4
1.4
0.8

4.2
3.1
2.5

2013
 %
60.9
37.0
1.3
0.8

4.5
3.0
2.6

The group expects to pay $4,729,000 in contributions to defined benefit plans in 2015 (2014: $4,571,000). 

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 2014 there 
were 40 participants (2013: 48 participants) in the scheme and 387,076 shares (2013: 764,616) 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 on the following metrics, relevant to an individual:

•  budget measures of EBIT or net profit after tax and net working capital; and

•  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 
of Nufarm Limited shares in the five days subsequent to the results announcement. Vesting will occur after a two-year period.

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 performance 
and vesting period for the awards will be three years. Awards vest in two equal tranches as follows:

•  fifty 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.

NUFARM LIMITED ANNUAL REPORT 2014 | 91

NOTES TO THE FINANCIAL STATEMENTS continued

27. Share-based payments (continued)

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 2014 there were 872 participants (2013: 
948 participants) in the scheme and 2,013,567 shares (2013: 1,925,656) 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

Consolidated

2014
$000
 1,782 

2013
$000
 4,528 

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:

Nufarm STI
2014
deferred 
shares

$4.75 
$4.54 
9 Oct 2013
31 Jul 2015
 – 
1 year
n/a
n/a
n/a

Nufarm LTI
2014
performance
rights
Dec 2013

Nufarm LTI
2014
performance
rights
Oct 2013

$3.25 
$4.40 
5 Dec 2013
31 Jul 2016
 – 
2.7 years
35%
2.9%
2.7%

$3.35 
$4.54 
9 Oct 2013
31 Jul 2016
 – 
2.8 years
35%
3.0%
2.7%

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

Nufarm LTI
2013
performance
rights
Oct 2012

$4.40 
$5.62 
6 Dec 2012
31 Jul 2015
 – 
2.7 years
30%
2.6%
2.3%

$4.73 
$5.96 
9 Oct 2012
31 Jul 2015
 – 
2.8 years
30%
2.4%
2.3%

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

The fair values of awards granted were estimated using a Monte-Carlo simulation methodology and a Binomial Tree 
methodology.

92 | NUFARM LIMITED ANNUAL REPORT 2014

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
2014
 1,021,128 
 (26,724)
 – 
 (566,463)
 568,993 
 996,934 
 – 

Nufarm STI
number of
deferred
shares
2014
 296,490 
 – 
 (239,810)
 – 
 381,237 
 437,917 
 79,047 

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 
 39,509 

The performance rights outstanding at 31 July 2014 have a $nil exercise price and a weighted average contractual life of three 
years (2013: 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 2013
Provisions made during the year
Provisions used during the year
Exchange adjustment
Balance at 31 July 2014

Consolidated

2014
$000

 12,642 
 3,059 
 15,701 

 Restructuring 
$000

Other
 provisions 
$000

 118 
 16,966 
 (4,926)
 484 
 12,642 

 3,161 
 – 
 – 
 (102)
 3,059 

2013
$000

 118 
 3,161 
 3,279 

 Total 
$000

 3,279 
 16,966 
 (4,926)
 382 
 15,701 

The provision for restructuring is mainly relating to the rationalisation of the Australian and New Zealand operations and 
primarily consists of unpaid redundancy and associated transition costs. The other provision consists of liabilities recognised 
with the Agripec acquisition.

NUFARM LIMITED ANNUAL REPORT 2014 | 93

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
2014
 262,954,040 
 1,067,587 
 264,021,627 

Number of  
ordinary
shares
2013
 262,142,247 
 811,793 
 262,954,040 

The company does not have authorised capital or par value in respect of its issued shares.

On 15 October 2013, 381,237 shares at $4.75 were issued under the executive share plan.

On 15 November 2013, 308,171 shares at $4.83 were issued under the dividend reinvestment program.

On 6 January 2014, 82,447 shares at $4.39 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 9 May 2014, 295,732 shares at $4.12 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 (2013: 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.

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 Atlantica 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.

94 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

29. Capital and reserves (continued)

Dividends

An interim dividend of three cents per share, totalling $7,912,359 was declared on 26 March 2014, and was paid (net of 
dividend re-investment program) on 9 May 2014 (2013: three cents per share, totalling $7,883,907).

A final dividend of five cents per share, totalling $13,201,081 was declared on 23 September 2014, and will be paid on 
14 November 2014 (2013: five cents per share, totalling $13,166,764).

Distributions

Distributions recognised in the current year by Nufarm Finance (NZ) Ltd on the Nufarm step-up securities* are:

2014
Distribution
Distribution

2013
Distribution
Distribution

Distribution rate 
%

Total amount
$000

Payment
date

Consolidated

6.52
6.95

7.03
8.11

8,156
8,749
16,905

8,798
10,146
18,944

15 April 2014
15 October 2013

15 April 2013
16 October 2012

* 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 $12.369 million (2013: $13.974 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% (2013: 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

2014
$000

2013
$000

 4,973 

 18,771 

 (3,262)
 1,711 

 – 
 18,771 

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 $1,710,802 (2013: $18,771,001) franking credits. 

NUFARM LIMITED ANNUAL REPORT 2014 | 95

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

2014
$000
 37,747 
 (40)
 37,707 
 (12,369)
 25,338 

2013
$000
 81,750 
 (751)
 80,999 
 (13,974)
 67,025 

 25,338 
 25,338 

 67,025 
 67,025 

 (48,704)

 (2,224)

 74,042 

 69,249 

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
2013
2014
263,587,507 262,675,412
265,033,403 263,587,730

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
2013

2014

 9.6 
 9.6 

 9.6 
 9.6 

28.1
27.9

 25.5 
 25.5 

 25.4 
 25.4 

26.4
26.3

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. 

96 | NUFARM LIMITED ANNUAL REPORT 2014

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 and risk 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 and risk committee and functionally to the 
chief financial officer. He provides a written report of his activities at each meeting of the audit and risk committee. In doing so 
he has direct and ongoing access to the chairman and members of the audit and risk 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

Consolidated

2014
$000

2013
$000

 791,852 
 241,638 

 792,564 
 264,972 

 184 
 1,033,674 

 2,161 
 1,059,697 

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

2014
$000

2013
$000

 106,699 
 32,223 
 251,058 
 95,781 
 306,091 
 791,852 

 166,006 
 31,022 
 223,360 
 103,750 
 268,426 
 792,564

The group’s top five customers account for $107.4 million of the trade receivables carrying amount at 31 July 2014 
(2013: $120.8 million). These top five customers represent 15 per cent (2013: 17 per cent) of the total receivables.

NUFARM LIMITED ANNUAL REPORT 2014 | 97

NOTES TO THE FINANCIAL STATEMENTS continued

31. Financial risk management and financial instruments (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

2014
$000
 572,214 
 71,151 
 18,482 
 9,225 
 25,362 
 696,434 
 (26,591)
 669,843 

2013
$000
 598,898 
 60,727 
 9,325 
 9,972 
 22,638 
 701,560 
 (24,172)
 677,388 

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 0.04 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

2014
$000
 24,172 
 5,437 
 (2,080)
 – 
 (938)
 26,591 

2013
$000
 22,278 
 294 
 (1,032)
 39 
 2,593 
 24,172 

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.

98 | NUFARM LIMITED ANNUAL REPORT 2014

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 group 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’).

The group holds a three-year A$530 million senior secured syndicated bank facility (SFA) (2013: A$406 million), of which 
A$520 million is due in December 2016 and A$10 million is due in December 2014 (2013: A$406 million due in November 
2014). The SFA is secured by assets in the primary geographies in which Nufarm operates including Australia, New Zealand 
and the United States (2013: Australia, United States, Canada, United Kingdom, and France). 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 amount drawn down under the facility at 31 July 2014 is $51 million (2013: $164 million).

The majority of debt facilities that reside outside the notes, SFA and the group trade receivables securitisation facility are regional 
working capital facilities, primarily located in Brazil and Europe, which at 31 July totalled $572 million (2013: $343 million). 

At 31 July 2014, the group had access to debt of $1,743 million (2013: $1,322 million) under the notes, SFA, group trade 
receivables securitisation facility and with other lenders.

A parent guarantee is provided to support working capital facilities in Europe, Brazil and the notes. 

NUFARM LIMITED ANNUAL REPORT 2014 | 99

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

 – 
 534,539 
 373,422 
 43,875 
 339,271 
 2,078 
 12,896 

 – 
 534,539 
 397,202 
 47,368 
 461,801 
 2,078 
 103,265 

 – 
 513,305 
 301,714 
 30,833 
 22,278 
 489 
 1,781 

 – 
 1,063 
 5,783 
 8,493 
 22,278 
 1,589 
 1,706 

 – 
 20,171 
 89,705 
 8,042 
 417,245 
 – 
 99,778 

 21,817 
 – 

 230,879 
 (232,876)

 22,177 
 (22,815)

 21,452 
 (22,815)

 187,250 
 (187,246)

 1,903 
 – 

 252,666 
 (250,933)

 252,666 
 (250,933)

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

 – 
 (184)
 1,329,617 

 52,885 
 (53,064)
 1,545,810 

 52,885 
 (53,064)
 871,316 

 – 
 – 
 39,549 

 – 
 – 
 634,945 

Consolidated 2014
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

100 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

31. Financial risk management and financial instruments (continued)

Liquidity risk (continued)

Consolidated 2013
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

 – 
 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 

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.

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.

NUFARM LIMITED ANNUAL REPORT 2014 | 101

NOTES TO THE FINANCIAL STATEMENTS continued

31. Financial risk management and financial instruments (continued)

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 2012, 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 borrowers to movements in the Australian dollar against their local currencies. 

In October 2012, 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.

The group uses derivative financial instruments to manage foreign currency translation risk arising from the groups net 
investments in foreign currency subsidiary entities. These contracts have been designated as net investment hedges for 
hedge accounting purposes. No ineffectiveness was recognised from the net investment hedge.

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 2014 was a $1.719 million liability (2013: $17.823 million liability) comprising assets of $0.184 million 
(2013: $2.161 million) and liabilities of $1.903 million (2013: $19.984 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
2014
Functional currency of group operation
Australian dollars
US dollars
Euro
UK pounds sterling

Consolidated
2013
Functional currency of group operation
Australian dollars
US dollars
Euro
UK pounds sterling

Net financial assets/(liabilities) – by currency  
of denomination

AUD
$000

 – 
 (83,268)
 15,524 
 (14,768)
 (82,512)

AUD
$000

 – 
 2,345 
 6,820 
 (14,768)
 (5,603)

USD
$000

 (44,765)
 – 
 11,489 
 9,351 
 (23,925)

USD
$000

 (15,380)
 – 
 12,581 
 20,802 
 18,003 

Euro
$000

 21,379 
 (730)
 – 
 5,298 
 25,947 

Euro
$000

 (14,715)
 (2,515)
 – 
 (8,771)
 (26,001)

GBP
$000

 (17,464)
 – 
 10,596 
 – 
 (6,868)

GBP
$000

 (19,778)
 – 
 (2,254)
 – 
 (22,032)

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 2013.

102 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

31. Financial risk management and financial instruments (continued)

Currency 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/(loss) 
after tax
2014
$000

Weakening
Profit/(loss)
after tax
2014
$000

Strengthening
Profit/(loss)
after tax
2013
$000

Weakening
Profit/(loss)
after tax
2013
$000

 (289)
 421 
 (82)
 (47)

 292 
 (416)
 81 
 47 

 306 
 127 
 (301)
 (135)

 (313)
 (127)
 303 
 135 

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

2014
 0.917 
 0.673 
 0.556 
 2.092 

2013
 1.009 
 0.774 
 0.645 
 2.086 

2014
 0.930 
 0.694 
 0.551 
 2.105 

2013
 0.895 
 0.673 
 0.589 
 2.037 

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$530 million syndicated bank facility and 
the A$300 million group 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. During the period the group 
entered into interest rate swaps to manage the level of floating rate debt held by the group. These swaps effectively 
converted a portion of floating rate debt to fixed rate debt, 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 
(2013: 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
2013
2014
$000
$000

 47,517 
 (554,003)
 (506,486)

 34,222 
 (807,416)
 (773,194)

 – 
 (217,539)
 (217,539)

 – 
 (111,779)
 (111,779)

NUFARM LIMITED ANNUAL REPORT 2014 | 103

NOTES TO THE FINANCIAL STATEMENTS continued

31. Financial risk management and financial instruments (continued)

Currency risk (continued)

Interest rate risk (continued)

Sensitivity analysis for variable rate instruments
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 2013.

2014
Variable rate instruments
Total sensitivity

2013
Variable rate instruments
Total sensitivity

Fair values

Profit/(loss)

100bp
increase
$000

100bp
decrease
$000

 (5,065)
 (5,065)

 5,065 
 5,065 

 (7,732)
 (7,732)

 7,732 
 7,732 

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 
$107.6 million (2013: $111.8 million), the fair value at 31 July 2014 is $116.977 million (2013: $109.686 million).

Consolidated 2014
Cash and cash equivalents
Trade and other receivables
Forward exchange contracts:

Assets
Liabilities

Interest rate swaps
Trade and other payables excluding derivatives
Bank overdraft
Secured bank loans
Unsecured bank loans
Senior unsecured notes(a)
Other loans
Finance leases

Available 
for sale
$000
 – 
 – 

Note
15
16

Carried at 
fair value
through
profit or loss
$000
 – 
 – 

Derivatives
used for
hedging
$000
 – 
 – 

16
24
24
24
15
25
25
25
25
25

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 184 
 (1,903)
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 (1,719)

 – 
 (725)
 (21,092)
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 (21,817)

Financial
assets/
liabilities at
amortised
cost
$000
 241,638 
 791,852 

 – 
 – 
 – 
 (534,539)
 – 
 (373,422)
 (43,875)
 (339,271)
 (2,078)
 (12,896)
 (272,591)

Total
$000
 241,638 
 791,852 
 – 
 184 
 (2,628)
 (21,092)
 (534,539)
 – 
 (373,422)
 (43,875)
 (339,271)
 (2,078)
 (12,896)
 (296,127)

(a)   Includes $231.7 million (2013: $238.3 million) of centrally managed fixed rate debt swapped to floating rate under fair value hedges, and is consequently 

fair valued for interest rate risk.

104 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

31. Financial risk management and financial instruments (continued)

Fair values (continued)

Consolidated 2013
Cash and cash equivalents
Trade and other receivables
Forward exchange contracts:

Assets
Liabilities

Interest rate swaps
Trade and other payables excluding derivatives
Bank overdraft
Secured bank loans
Unsecured bank loans
Senior unsecured notes(a)
Other loans
Finance leases

Available 
for sale
$000
 – 
 – 

Note
15
16

Carried at 
fair value
through
profit or loss
$000
 – 
 – 

Derivatives
used for
hedging
$000
 – 
 – 

16
24
24
24
15
25
25
25
25
25

 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 

 2,161 
 (19,984)
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 (17,823)

 – 
 – 
 (22,313)
 – 
 – 
 – 
 – 
 – 
 – 
 – 
 (22,313)

Financial
assets/
liabilities at
amortised
cost
$000
 264,972 
 792,564 

 – 
 – 
 – 
 (556,893)
 – 
 (456,676)
 (98,627)
 (350,146)
 (1,490)
 (12,256)
 (418,552)

Total
$000
 264,972 
 792,564 

 2,161 
 (19,984)
 (22,313)
 (556,893)
 – 
 (456,676)
 (98,627)
 (350,146)
 (1,490)
 (12,256)
 (458,688)

(a)   Includes $231.7 million (2013: $238.3 million) 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).

2014
Derivative financial assets

Derivative financial liabilities

2013
Derivative financial assets

Derivative financial liabilities

There have been no transfers between levels in either 2014 or 2013.

Consolidated

Level 1
$000
 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

Level 2
$000
 184 
 184 

 (23,720)
 (23,720)

 2,161 
 2,161 

 (42,297)
 (42,297)

Level 3
$000
 – 
 – 

 – 
 – 

 – 
 – 

 – 
 – 

Total
$000
 184 
 184 

 (23,720)
 (23,720)

 2,161 
 2,161 

 (42,297)
 (42,297)

NUFARM LIMITED ANNUAL REPORT 2014 | 105

NOTES TO THE FINANCIAL STATEMENTS continued

31. Financial risk management and financial instruments (continued)

Fair values (continued)

Fair value hierarchy (continued)

Valuation techniques used to derive fair values
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is 
determined using valuation techniques. These valuation techniques maximise the use of observable market data where it is 
available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument 
are observable, the instrument is included in Level 2.

Specific valuation techniques used to value financial instruments include:

•  the use of quoted market prices or dealer quotes for similar instruments;

•  the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable 

yield curves;

•  the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date; and

•  other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial 

instruments.

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 shareholder’s 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 based on the budget and growth strategy. The ROFE return for the year ended 31 July 2014 was 9.1 per cent (2013: 
8.8 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

2014
$000
 11,807 
 10,286 
 22,725 
 144,995 
 189,813 

2013
$000
 10,114 
 11,453 
 21,806 
 141,166 
 184,539

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 $3.240 million at 31 July 2014 (2013: $6.116 million).

106 | NUFARM LIMITED ANNUAL REPORT 2014

 
NOTES TO THE FINANCIAL STATEMENTS continued

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

2014
$000
 7,254 

2013
$000
 6,225 

Environmental guarantee given to the purchaser of land and buildings at Genneviliers 
for EUR 8.5 million. 

 12,248 

 12,630 

Insurance bond for EUR 2.717 million established to make certain capital expenditures 
at Gaillon plant in France.

Brazilian taxation proceedings.(a)

Contingent liabilities

 4,019 

 3,843 

 12,157 

 74,624 

 35,678 

 97,322

(a)   The company’s 2013 annual financial report previously disclosed a contingent liability of $74.6 million in respect of potential pre-acquisition tax liabilities 

of its Brazilian business, which was acquired in 2007. The company continued to defend the related tax claims during the period. The agreements relating 
to the purchase of the business included indemnities which allow Nufarm to recover the majority of any such tax liabilities from the previous owners.

These indemnities have previously been confirmed via an independent arbitration process.

 During December 2013, the company elected to participate in a federal tax program instigated by the Brazilian Government that allows taxpayers to reduce 
their tax liabilities by offering discounts on claims (including penalties and interest) applying to a period ending on 30 November 2008. The decision to 
participate in the program reduced the company’s potential future liability and provided a final resolution of the claims to which the program applied.

 Entering into the program has given rise to a tax liability, which will result in a cash outflow of approximately $300,000 per month for five years commencing 
January 2014 and the utilisation of tax losses. As previously disclosed, cash inflows from the previous owner, via enforcement of the indemnities currently 
under arbitration, will follow the settlement of the tax obligations.

 The recognition of the liability has been offset by the benefit of previously unrecognised tax assets. The tax assets will be recovered via a combination 
of recoupment in the normal course of business and enforcement of the indemnities provided by the previous owner.

 As a consequence of entering the program, the total contingent liability relating to future potential tax liabilities has reduced to $12.157 million that 
relate to claims not covered by the program, some of which may also be covered by the indemnities. These cases will continue to be defended.

 Further to the above, the group has a contingent asset in respect of potential pre-acquisition tax credits of its Brazilian business acquired in 2007. Whilst the 
credits are deemed to be valid, the Brazilian courts are currently deliberating the value of the credits and therefore the full amount of this contingent asset is 
yet to be established. Such credits can be used to offset future federal tax payable.

NUFARM LIMITED ANNUAL REPORT 2014 | 107

 
 
 
 
 
 
NOTES TO THE FINANCIAL STATEMENTS continued

35. Group entities

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
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
Mastra Corporation Sdn Bhd
Mastra Corporation USA Pty Ltd
Mastra Holdings Sdn Bhd
Mastra Industries Sdn Bhd

108 | NUFARM LIMITED ANNUAL REPORT 2014

Note 

Place of 
incorporation

Percentage of shares held
2013

2014

(a) 
(a) 

(a) 
(a) 

(a) 

(a) 

(a) 
(a) 
(a) 

(a) 

(a) 
(a) 
(a) 
(a) 

(a) 

(a)

(a)
(a)

(a)

Australia 
Australia 
USA 
Australia 
Australia 
USA 
New Zealand 
Australia 
United Kingdom 
Australia 
Brazil 
Australia 
Australia 
Australia 
Netherlands 
Australia 
New Zealand 
New Zealand 
Australia 
Australia 
Australia 
Australia 
Canada 
Singapore 
New Zealand 
Australia 
Egypt 
USA 
Greece 
United Kingdom 
Guatemala 
France 
France 
Australia 
Malaysia 
USA 
Guatemala 
Mexico 
USA 
Australia 
Australia 
Malaysia 
Australia 
Malaysia 
Malaysia 

 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 51 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 

 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 51 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 

NOTES TO THE FINANCIAL STATEMENTS continued

35. Group entities (continued)

Medisup International NV
Medisup Securities Limited
Midstates Agri Services de Mexico
Midstates Agri Services Inc
Minteledan S.A.
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 Cropcare Private 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.
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

Note

(a)

(a)

Place of 
incorporation
N. Antillies 
Australia 
Mexico 
USA 
Uruguay
Morocco
South Africa 
Canada
USA
Zimbabwe
USA
USA
Malaysia
Australia
Netherlands
Canada
China
Chile
Colombia
United Kingdom 
India
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
Brazil
Singapore
Netherlands
Italy
Japan
Korea
Malaysia

Percentage of shares held
2013
 88 
 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 
 100 

2014
 88 
 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 
 100 
 100 
 100 

NUFARM LIMITED ANNUAL REPORT 2014 | 109

NOTES TO THE FINANCIAL STATEMENTS continued

35. Group entities (continued)

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 Services (Singapore) Pte Ltd
Nufarm Services Sdn Bhd
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 Uruguay SA
Nufarm USA Inc
Nugrain Pty Ltd
Nuseed Americas Inc
Nuseed do Brazil S.A.
Nuseed Europe Ltd
Nuseed Europe Holding Company Ltd
Nuseed Global Innovation Ltd
Nuseed Holding Company
Nuseed Pty Ltd
Nuseed SA
Nuseed South America Sementes Ltda
Nuseed Serbia d.o.o.
Nuseed Ukraine LLC
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
Societe Des Ecluses la Garenne s.a.s

Note 

(a)

(a)

(b)

(a)
(a)

(a)

(a)

(a)
(a)

(a)

(c)

(a)

Place of 
incorporation
United Kingdom 
Malaysia
Australia
New Zealand 
Peru
Australia
Portugal
Romania
France
Argentina
Singapore
Malaysia
Switzerland
Malaysia
New Zealand
Australia
Australia
United Kingdom
Ukraine
Uruguay
USA
Australia
USA
Brazil
United Kingdom 
United Kingdom 
United Kingdom 
USA
Australia
Argentina
Brazil
Serbia
Ukraine
Australia
Australia
Australia
Australia
Indonesia
Indonesia
Indonesia
USA
USA
Argentina
Australia
France

Percentage of shares held
2013
 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 

2014
 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 
 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)   Formerly known as Nufarm (Asia) Pte Ltd.

(c)    Merged with Nuseed Americas Inc and deregistered.

110 | NUFARM LIMITED ANNUAL REPORT 2014

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 directors’ 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 2014 
is set out as follows:

Consolidated

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

2014
$000

2013
$000

 (58,855)
 4,305 
 (54,550)

 120,659 
 – 
 (28,944)
 37,165 

 1,019 
 10,446 
 11,465 

 126,356 
 (1,459)
 (15,703)
 120,659 

 42,724 
 472,637 
 169,736 
 9,766 
 694,863 

 25,224 
 664,394 
 194,463 
 9,472 
 893,553 

 5,793 
 1,171,314 
 65,178 
 122,170 
 102,288 
 1,466,743 
 2,161,606 

 4,177 
 1,153,447 
 52,310 
 155,366 
 107,758 
 1,473,058 
 2,366,611 

 548,689 
 23,095 
 1,053 
 572,837 

 568,350 
 11,155 
 – 
 579,505 

 22,092 
 337,506 
 18,014 
 10,661 
 388,273 
 961,110 
 1,200,496 

 24,313 
 460,059 
 16,629 
 11,143 
 512,144 
 1,091,649 
 1,274,962 

 1,068,871 
 94,460 
 37,165 
 1,200,496 

 1,063,992 
 90,311 
 120,659 
 1,274,962

NUFARM LIMITED ANNUAL REPORT 2014 | 111

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(a)
Total equity

Company

2014
$000

2013
$000

 (1,192)
 (403)
 (1,595)

 8,833 
 2,385 
 11,218 

 1,060,681 
 1,419,961 

 1,106,952 
 1,447,739 

 179,549 
 179,549 

 188,746 
 189,073 

 1,068,871 
 37,788 
 (31,536)
 165,289 
 1,240,412 

 1,063,992 
 38,651 
 (30,344)
 186,367 
 1,258,666 

(a)   Retained earnings comprises the transfer of net profit for the year and are characterised as profits available for distribution as dividends in future years. 

Dividends amounting to $21.078 million (2013: $15.703 million) were distributed from the retained earnings during the year.

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 2014 or 2013.

112 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

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 
Depreciation
Australia/New Zealand asset rationalisation and restructure
Inventory 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

2014
$000

2013
$000

 37,747 

 81,750 

 120 
 35,076 
 45,740 
 33,355 
 5,693 
 (53)
 (2,208)
 80,436 
 (68,937)
 24,104 
 (45,028)
 146,045 

 (1,375)
 169,886 
 5,727 
 (52,186)
 122,052 
 268,097 

 73 
 33,612 
 41,564 
 – 
 5,773 
 (2,744)
 60 
 65,460 
 (49,958)
 31,173 
 (14,347)
 192,416 

 (16,005)
 (281,329)
 60,144 
 107,561 
 (129,629)
 62,787 

NUFARM LIMITED ANNUAL REPORT 2014 | 113

NOTES TO THE FINANCIAL STATEMENTS continued

39. Related parties

(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

Lotus Agrar GmbH

Purchases from
Trade payable
Sales to 
Trade payable
Trade receivable
Sales to 
Purchases from
Trade receivable
Trade payable
Sales to 
Trade receivable

Consolidated

2014
$000
 13,837 
 7,152 
 48,729 
 338 
 36,385 
 41,665 
 53,877 
 17,525 
 22,507 
 29,098 
 6,840 

2013
$000
 – 
 – 
 41,427 
 – 
 38,249 
 30,822 
 48,840 
 1,913 
 12,618 
 – 
 – 

These transactions were undertaken on commercial terms and conditions.

(c) Key management personnel compensation

The key management personnel compensation included in personnel expenses (see note 9) are as follows: 

Short term employee benefits
Post-employment benefits
Equity compensation benefits
Termination benefits
Other long term benefits

Consolidated

2014
$
 8,722,847 
 394,716 
 1,060,374 
 – 
 361,460 
 10,539,397 

2013
$
 9,073,155 
 358,079 
 1,811,459 
 799,000 
 200,271 
 12,241,964 

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.

114 | NUFARM LIMITED ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS continued

39. Related parties (continued)

(d) Other key management personnel transactions with the company or its controlled entities

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 director’s interest 
existing at year end.

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.

(e) Loans to key management personnel and their related parties

There were no loans to key management personnel at 31 July 2014 (2013: nil).

40. 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 advisory services
Other services remuneration

41. Subsequent events

Consolidated

2014

2013

 518,000 

 546,000 

 1,239,000 
 1,757,000 

 1,149,000 
 1,695,000 

 198,626 
 1,955,626 

 79,790 
 1,774,790 

 27,700 
 – 

 55,400 
 – 

 85,809 
 525,778 
 639,287 

 79,144 
 – 
 134,544 

A final dividend of five cents per share, totalling $13,201,081 was declared on 23 September 2014, and will be paid on 
14 November 2014 (2013: five cents per share, totalling $13,166,764).

NUFARM LIMITED ANNUAL REPORT 2014 | 115

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 2014 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.    There are reasonable grounds to believe that the company and the group entities identified in note 36 will be able to meet 
any obligations or liabilities to which they are or may become subject to by virtue of the deed of cross guarantee between 
the Company and those group entities pursuant to ASIC Class Order 98/1418. 

3.  The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the chief 

executive officer and chief financial officer for the financial year ended 31 July 2014. 

4.  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 23rd day of September 2014.

DG McGauchie AO 
Director 

DJ Rathbone AM 
Director 

116 | NUFARM LIMITED ANNUAL REPORT 2014

 
 
 
 
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 2014, 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 41 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.

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 2014 | 117

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 2014 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 2014. 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 2014, complies with Section 300A 
of the Corporations Act 2001.

KPMG

BW Szentirmay
Partner

Melbourne
23 September 2014

118 | NUFARM LIMITED ANNUAL REPORT 2014

 
 
SHAREHOLDER AND STATUTORY INFORMATION

Details of shareholders, shareholdings and top 20 shareholders

Listed securities – 23 September 2014
Fully paid ordinary shares 

Number 
of holders 
10,237

Number 
of securities 
264,021,627

Percentage held
by top 20
85.57

Twenty largest shareholders
Sumitomo Chemical Company Limited
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Limited
National Nominees Limited
Amalgamated Dairies Limited
Citicorp Nominees Pty Limited
NEFCO Nominees Pty Ltd
Challenge Investment Company Limited
BNP Paribas Noms Pty Ltd 
Avalon Investments Trust Ltd
HSBC Custody Nominees (Australia) Limited 
Citicorp Nominees Pty Limited 
Pacific Custodians Pty Limited 
GBH Trustee Services Limited + Mr Aaron Craig Quintal
Forsyth Barr Custodians Ltd 
Douglas Industries Limited
QIC Limited
Moturua Properties Ltd
Mirrabooka Investments Limited
CPU Share Plans Pty Ltd 

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 23.09.14 
60,210,136
47,301,526
36,997,061
26,605,895
14,805,328
12,000,296
4,320,470
3,130,282
3,067,257
2,664,282
2,519,095
2,104,908
2,008,374
1,850,000
1,487,221
1,170,866
1,016,738
964,455
909,308
797,540

Percentage of
issued capital as 
at 23.09.14
22.81
17.92
14.01
10.08
5.61
4.55
1.64
1.19
1.16
1.01
0.95
0.80
0.76
0.70
0.56
0.44
0.39
0.37
0.34
0.30

Number of 
holders as 
at 23.09.14

Ordinary
shares held as 
at 23.09.14

4,673
4,183
848
479
54

2,017,729
10,025,576
6,083,674
10,524,973
235,369,675

Of these, 1,042 shareholders held less than a marketable parcel of shares of $500 worth of shares (111 shares). In accordance 
with the ASX Listing Rules, the last sale price of the company’s shares on the ASX on 23 September 2014 was used to determine 
the number of shares in a marketable parcel.

NUFARM LIMITED ANNUAL REPORT 2014 | 119

 
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 23 September 2014, 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

FMR LLC
Dimensional Fund Advisors LP
Sumitomo Chemical Company Limited
Nufarm Limited1
Amalgamated Dairies Limited
The Khyber Pass Investment Co Ltd 2, 6
Glade Buildings Ltd3, 6
Hauraki Trading Co. Ltd4
PG Keeling & EW Preston (Oxford Trustees)5

Date of notice
5 February 2014
23 December 2013
10 June 2011
10 June 2011
31 May 2010
31 May 2010
31 May 2010
31 May 2010
31 May 2010

Number 
13,725,325
13,187,894
60,210,136
60,210,136
14,330,798
14,349,658
14,692,730
14,679,639
14,711,590

Interest %
5.03
5
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 Building Ltd has a relevant interest in Amalgamated Dairies Ltd and, as a result, the number of shares disclosed by it includes the shares held 

by Amalgamated Dairies Ltd.

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 Building Ltd, The Khyber Pass Investment Co Ltd and Amalgamated Dairies Ltd and, as a result, the number 

of shares disclosed by it includes the shares held by Glade Building Ltd, The Khyber Pass Investment Co Ltd and Amalgamated Dairies Ltd.

6.   On 30 March 2012 Glade Buildings Ltd and The Khyber 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.

120 | NUFARM LIMITED ANNUAL REPORT 2014

SHAREHOLDER AND STATUTORY INFORMATION continued

Shareholder information

Annual general meeting

The annual general meeting of Nufarm Limited will be held on Thursday 4 December 2014 at 10.00am in Bayside Rooms 
5 and 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.

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.

NUFARM LIMITED ANNUAL REPORT 2014 | 121

SHAREHOLDER AND STATUTORY INFORMATION continued

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

Details of individual shareholdings can be checked by visiting our share registry’s website at www.investorcentre.com

Existing users can simply log in. New users will need to create a log in. You will need to enter your security reference number 
(SRN) or holder identification number (HIN), your postcode or country of residence, enter Nufarm as the company name and 
then follow the prompts to complete registration.

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 2014

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 2014*  Annual report sent to shareholders
4 December 2014  Annual general meeting
25 March 2015* 
31 July 2015 

Announcement of profit result for half year ending 31 January 2015
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:  
Facsimile:  
Email:  

+61 3 9282 1177
+61 3 9282 1111
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 2014 | 123

 
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 1020 New Zealand
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

nufarm.com

Nufarm Limited
ACN 091 323 312

DIRECTORY

Directors

DG McGauchie AO – Chairman
DJ Rathbone AM – Managing director
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

The Trust Company (Australia) Limited
Level 15, 20 Bond Street 
Sydney NSW 2000 Australia

124 | NUFARM LIMITED ANNUAL REPORT 2014

At Nufarm we grow 
a better tomorrow 
by providing products 
and services that 
support the success of our 
distributors and growers.

CONTENTS

1 About Nufarm

2 Key events

2 Facts in brief

4 Managing director’s review

11 Business review

14 Sustainability

16 Board of directors

18 Executive management

20 Information on the company

23 Corporate governance

32 Financial report

33 Directors’ report

49 Lead auditor’s independence declaration

50 Income statement

51 Statement of comprehensive income

52 Balance sheet

53 Statement of cash flows

54 Statement of changes in equity

56 Notes to the financial statements

116 Directors’ declaration

117 Independent auditor’s report

119 Shareholder and statutory information

124 Directory

NUFARM LIMITED ANNUAL REPORT 2014

Design: MDM Investor Connect

ANNUAL 
REPORT
2014

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103-105 Pipe Road 
Laverton North Victoria 3026 Australia
Telephone + 61 3 9282 1000 
Facsimile + 61 3 9282 1007
nufarm.com