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Intrepid PotashAnnual Report 2021
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We are a global crop
protection and seed
technology company
that has been helping
growers fi ght disease,
weeds and pests for
more than 100 years.
Contents
Financial Year 2021 Overview
Chairman’s message
Managing Director’s message
About us
Environmental, Social and Governance
Operating and Financial Review
Board of Directors
Key Management Personnel
Corporate Governance Statement
Directors’ report
2021 Remuneration Report
Auditors’ Independence Declaration
Consolidated financial statements
for the year ended 30 September 2021
Consolidated statement of profit or loss
and other comprehensive income
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to the consolidated financial statements
Directors’ declaration
Independent Audit Report
Shareholder and Statutory Information
Corporate Information
Nufarm Limited ABN 37 091 323 312
1
2
4
6
12
19
30
32
33
51
55
75
77
78
80
81
82
84
144
145
151
IBC
We are a global crop
protection and seed
technology company
that has been helping
growers fi ght disease,
weeds and pests for
more than 100 years.
Contents
Financial Year 2021 Overview
Chairman’s message
Managing Director’s message
About us
Environmental, Social and Governance
Operating and Financial Review
Board of Directors
Key Management Personnel
Corporate Governance Statement
Directors’ report
2021 Remuneration Report
Auditors’ Independence Declaration
Consolidated financial statements
for the year ended 30 September 2021
Consolidated statement of profit or loss
and other comprehensive income
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to the consolidated financial statements
Directors’ declaration
Independent Audit Report
Shareholder and Statutory Information
Corporate Information
Nufarm Limited ABN 37 091 323 312
1
2
4
6
12
19
30
32
33
51
55
75
77
78
80
81
82
84
144
145
151
IBC
Financial Year 2021 Overview
Uplift in earnings and profitability reflecting significantly improved conditions and
commodity prices with tight supply driving strong demand for Nufarm products.
Our teams adapted quickly
to the global Covid-19
pandemic and achieved
strong safety performance
Safety
(Lost time injury
frequency rate per
1,000,000 hours worked)
Good sales momentum
was generated in all
regions and seeds
Significant earnings
uplift across all
regions and seeds
Revenue
(A$m)
Underlying
EBITDA (A$m)
9
.
0
6
0
.
6
1
2
,
3
4
3
9
2
,
1
6
3
7
3
2
2020
2021
20201
2021
20201
2021
1. Proforma 12 months ended 30 September 2020 for continuing operations, refer page 24 for basis of preparation.
Underlying cash generation
was improved through
disciplined working
capital management
Significant uplift in cash
flow performance has
enabled a return of dividend
payments to shareholders
Underlying net
operating and
investing cash
flow (A$m)
4
9
2
Dividend per
share (cps)
0
.
4
5
5
20202
2021
0
2020
2021
2. 12 months ended 31 July 2020 before material items and discontinued operations.
1
Nufarm Limited | Annual Report 2021 Chairman’s message
I am honoured to have been appointed
Chairman of an agricultural company with
a unique Australian heritage, a strong global
presence, and exciting growth opportunities.
Strong operational performance and cash
generation delivers returns to shareholders
I am pleased to report a significant uplift in financial
performance across the Group which has delivered underlying
EBITDA of $361 million1 – an over 50 per cent increase on the
prior year’s underlying EBITDA. Revenues of $3.2 billion also
increased by 10 per cent. Underlying net profit after tax was
$61 million – a much needed turnaround from disappointing
losses in previous years. We are particularly pleased to have
achieved these strong results by supporting customers and
keeping our employees safe whilst facing significant ongoing
challenges caused by the Covid-19 pandemic.
We have also taken steps to improve working capital
management and this, together with the strong business
performance, has generated significant cash flow to support
growth initiatives and future working capital needs.
The significant uplift in performance has allowed your Board
to announce a return of dividend payments to shareholders
after a 2-year period of suspended dividends due to challenging
agricultural conditions. The Board has declared an unfranked
final dividend of 4 cents per share.
During the year, a detailed review of Nufarm’s capital management
principles was undertaken which Greg will speak to in further
detail in his commentary. As part of this review, the Board has
adopted a change in the dividend policy to align dividend
payments to free cash flow generation, subject to growth
initiatives and the balance sheet maintaining our target leverage
range. This change in policy ensures elevated attention to cash
generation and greater focus on maintaining an appropriate
capital structure for the Group.
Responding to Covid-19 challenges
The safety of our people is our most critical priority as a Board
and Management team and this has guided our approach
throughout the Covid-19 pandemic. It has been over 21 months
since the pandemic began and we are proud to have been able
to maintain supply to customers and growers, as an essential
agricultural industry service, throughout the pandemic.
Being a global organisation has introduced its own unique
challenges as Covid-19 status and restrictions continually
change country to country. Each of our regions has its own
Covid-19 Response Team which regularly assesses the local
situation and adapts work practices to keep our people safe
at all times.
We continue to prioritise the health and safety of our employees
while ensuring we deploy Covid-19 safe work practices in line
with government directives and business best practice. Our
employees are understandably fatigued by the Covid-19 induced
changing working conditions and community restrictions.
We are very conscious that such distractions can increase the
risk of incidents and work hard to continually reinforce safe work
practices in this challenging environment.
Covid-19 has also brought many supply chain and logistic
challenges across the globe which the team has been diligently
managing to ensure we meet our customers’ ongoing needs.
I would like to thank all of our people, led by Greg and the
Executive team, for their dedication and commitment servicing
our customers and growers during this time.
Environmental, Social & Governance priorities
At Nufarm, we contribute to a sustainable society while helping
farmers get the best from their land. We actively look for ways
to minimise our footprint and deliver more sustainable solutions.
This year, to demonstrate our commitment to sustainable
agricultural and production processes and continue to drive
improvement through our business, we aligned to the United
Nations Sustainable Development Goals (SDGs), which set the
global sustainability ambition for 2030.
We continue to progress our ambition to transparently report our
sustainability approach and performance, aligning our sustainability
reporting to the Global Reporting Initiative (GRI) Standards.
We also formalised our commitment by becoming a Task Force
for Climate-Related Disclosures (TCFD) supporter during FY21
and have expanded our disclosures with the intent to align our
reporting to the TCFD framework next year.
In addition, our seed technology business, Nuseed, is developing
crops that look to positively impact global environmental issues
and provide new economic opportunities for farming
communities. The outlook for these activities is very exciting.
I encourage you to read our approach to sustainability on page 12
to this Annual Report and our detailed Sustainability Review
which will be available publicly on our Nufarm.com website
in December 2021. We welcome feedback on these actions.
1. Refer to page 19 for impact on underlying EBITDA due to change in accounting policy. Pre change in accounting policy the Group delivered
underlying EBITDA of $370 million.
2
Nufarm Limited | Annual Report 2021 Board renewal
Closing remarks
The task of Board renewal was commenced by the Board under
the leadership of the previous Chairman and my appointment
in July last year was part of that renewal. The Board takes a
structured approach to Board renewal to ensure the necessary
balance of skills, experience and diversity for effective
governance at Nufarm.
Anne Brennan retired at the conclusion of the 2020 Annual
General Meeting and Frank Ford advised of his intention to retire
from the Board at the conclusion of the 2021 Annual General
Meeting. We thank them for their valuable contributions over
many years. The Board continued its structured succession
process taking into consideration the current skills on the Board
and the expected requirements into the future. As a result, I was
pleased to welcome Ms Lynne Saint and Dr David Jones as
independent Non-executive Directors in December 2020 and
June 2021 respectively. Both Ms Saint and Dr Jones have already
provided a valuable contribution to the Board since they joined.
Ms Saint has broad financial and commercial experience from
a global career including more than 19 years with Bechtel
Group where she served as Chief Audit Executive and Chief
Financial Officer of the Mining and Metals Global Business
Unit. Her experience in a complex global business environment
and her financial skill base is adding to the Board’s experience
and expertise.
Dr Jones has held Chairman and Director roles in large global
agricultural businesses. His experience includes as Head
of Business Development at Syngenta and former Chairman
of Zeneca China, Arysta Life Science, and Plant Impact. His
extensive knowledge and experience in the global agricultural
industry is of great benefit to the Nufarm Board.
Your Company has endured difficult conditions in recent times
and, as such, this year’s strong operational performance was
much needed. A significant effort has been expended and is
ongoing to ensure our crop protection and seeds businesses
are even better placed to perform well in future years through
a raft of growth initiatives and a continued focus on disciplined
operational performance.
On behalf of the Board, I would again like to reiterate our
thanks to all of our people for their unwavering dedication
and commitment during such difficult times. We recognise the
challenges that all of our people have faced – both personally
and professionally – due to Covid-19 and their efforts in ensuring
our customers’ needs are met are greatly appreciated.
To all of our shareholders, thank you for your ongoing support.
John Gillam
Chairman
3
Nufarm Limited | Annual Report 2021 Managing Director’s message
2021 has been a successful year for Nufarm.
We have delivered solid financial results and
continued to take action that will shape the
future of our Company.
I am pleased to report that Nufarm has delivered a solid
financial result in 2021, with revenue up 10 per cent to
$3.2 billion and underlying EBITDA up 52 per cent to
$361 million1. Underlying NPAT of $61 million marked a
turnaround on the loss of last year2, with improved seasonal
conditions and the benefit of recent investments and our
performance improvement program lifting earnings across
all operating segments.
The improvement in our operating results has translated to
higher cash generation, with free cash flow from operations
increasing to $257 million. This outcome has further
strengthened our balance sheet, providing the foundation to
re-instate dividends and reinvest for future growth. Our leading
metric of cash generation, average net working capital to sales,
achieved a ratio of 34 per cent, exceeding our target range of
35 per cent to 40 per cent. This accomplishment reflected both
tight availability of inventory due to global disruption in industry
supply chains and a strong focus on actively managing working
capital to generate improved cash returns for shareholders.
Business highlights
The steps we have taken throughout 2021 to improve the
competitiveness of our supply chain and cost base in the
European business, coupled with normalisation of raw material
costs, delivered the improvement in revenue and earnings we
had prioritised for this region.
The newly created APAC region delivered a standout financial
performance as the headwinds from the drought in 2019 and
2020 turned to tailwinds. The reinvestment in our product
portfolio and business processes over the past few years
enabled us to fully leverage the very favourable market
conditions and strong demand while delivering a competitive
and reliable offer for customers.
In North America our Turf and Ornamental business benefited
from the easing of Covid-19 restrictions and improved market
conditions drove strong demand for our crop protection
portfolio. While industry supply chains within North America
were strained by pandemic disruption, we achieved strong
organic earnings growth reflecting the value of the investment
we have made in both our manufacturing footprint and
customer relationships.
Recent investment in proprietary new hybrid seed varieties in
our Seed Technologies business, along with increased sales of
Omega-3 Canola and Carinata, contributed to a significant lift in
earnings for this segment. While Covid-19 disrupted salmon
demand and slowed sales of our Omega-3 Aquaterra product in
the first half, we saw good adoption of this new technology in
the second half with a meaningful expansion in our customer
base creating a strong platform to accelerate sales in coming
years. Certification of both Aquaterra and Nutriterra by Friends
of the Sea during 2021 has provided further validation of the
sustainable benefits of this breakthrough technology for marine
environments. Key milestones were also achieved in the
development of Nutriterra, including US FDA recognition as a
New Dietary Ingredient, and successful completion of a human
clinical trial to support the planned commercial launch in the
USA nutraceuticals market.
Carinata achieved another year of commercial expansion and
verification of eligibility as a feedstock for Sustainable Aviation
Fuel (SAF) by the International Civil Aviation Organisation (ICAO)
was received during 2021. This confirms the strength of the end
market growth options for this product.
Building resilience
The steps we have taken over the past two years to strengthen
our business to deal with market volatility and uncertainty have
created a solid platform for future performance. The divestment
of our South American businesses has allowed us to retain a
geographically diverse portfolio while focusing on the
businesses and agricultural regions where we have strong
relevance and can leverage opportunities to generate growth in
margins and cash flows.
Our balance sheet has been reshaped to provide flexibility to
invest in growth and allow us to pursue capital management
initiatives, including the return to dividend payments to
shareholders. Our stronger balance sheet and improved cash
generation also offers flexibility to structure the Company’s
financing arrangements to deliver cost efficiency, ensure
appropriate levels of liquidity and to reduce balance-sheet risk.
1. Refer to page 19 for impact on underlying EBITDA due to change in accounting policy. Pre change in accounting policy the Group delivered underlying EBITDA
of $370 million.
2. 12 months ended 31 July 2020
4
Nufarm Limited | Annual Report 2021 We also continue to invest in our people, and particularly in the
safety of our people. While the disruption of Covid-19 created
new challenges in maintaining the consistent improvement we
have achieved in safety, a number of our operating sites
achieved significant milestones during the year. Ensuring that
every colleague returns home safely will continue to be our most
important priority.
Closing remarks
In closing, I thank my Nufarm colleagues for their commitment
and focus throughout a year of trying circumstances. The
determination and flexibility you have shown to ensure continuity
of supply to our customers during the disruption of the Covid-19
pandemic is a true reflection of the Nufarm brand and our
customer promise.
To our shareholders, thank you for your support, continued
confidence and shared belief in the future value to be delivered
from our business.
Greg Hunt
Managing Director and Chief Executive Officer
During the year, we completed a review of our capital
management principles to provide clear guidelines for capital
allocation decisions and the application of free cash flow. Free
cash flow from business operations will be deployed to support
investment in growth objectives (where returns meet our internal
Return on Funds Employed measures and exceed our weighted
cost of capital) or the return of capital to shareholders if those
investment opportunities don’t exist.
The dividend policy has been reviewed to elevate attention to
cash generation and maintain an appropriate capital structure
for the Group. As a result, dividend payments are now linked to
free cash flow generation, subject to the balance sheet maintaining
our target leverage range of 1.5x – 2.0x and insufficient growth
opportunities existing to utilise excess free cash flow.
Delivering sustainable growth
The investment we have made in our Seed Technologies
business has opened new market opportunities for Nufarm.
As we deliver against important milestones for our Omega-3
Canola and Carinata products, our confidence and
excitement in the delivery of near-term value from these
investments is growing.
We are also reinvesting in our crop protection portfolio. In 2021
we appointed a new Group Executive, Rico Christensen, to
accelerate the development of our existing product portfolio
opportunities and identify and evaluate new opportunities that
will leverage the value of our global distribution network. The
Board has established an Innovation Committee, chaired by
Non-executive Director, David Jones, to provide oversight of the
development and balance of our portfolio choices and selection.
The recent modest investment in two new growth opportunities,
Enko and crop.zone are examples of early-stage investments
with potential to provide future diversification of our portfolio to
meet the changing needs of our customer base, regulators and
communities. Our investment in the potential of these exciting
new technologies will be balanced against lower risk
opportunities within existing or adjacent technologies and
known markets to ensure a good balance between risk and
return for shareholders.
5
Nufarm Limited | Annual Report 2021 About us
Our purpose and ambition
Nufarm is a global crop protection and seed technology company that has been helping
growers fight disease, weeds and pests for more than 100 years. We do this by developing
and manufacturing crop protection solutions and Beyond YieldTM seed technologies.
Our purpose is to help our customers grow a better tomorrow. Our ambition is to grow
our relevance by delivering more sustainable solutions over more acres every year.
We develop, manufacture and sell crop protection solutions
including herbicides, insecticides and fungicides that help
growers protect crops against weeds, pests and disease.
We operate primarily in the off-patent market, providing
customers with long-standing foundational products and unique
formulations. Our business is focused on five core crops across
key geographies (Europe, Middle East & Africa; North America;
and Asia Pacific). The crops we focus on are cereals; corn;
soybean; pasture, turf and ornamentals (T&O); and trees,
nuts, vines and vegetables (TNVV).
Crop protection
Seed Technologies combines our seed treatment portfolio and
the Nuseed business. Our seed treatment products provide
protection and treatment for damage caused by insects, fungus
and disease. Nuseed develops unique plant output traits with
specific customer and consumer benefits. We call this our Value
BEYOND YIELD™ strategy. Nuseed distributes high yielding
sunflower, sorghum and canola seed to customers in more
than 30 countries.
Seed Technologies
FY21 Revenue*
FY21 Underlying EBITDA*
APAC
Europe
North America
28%
27%
37%
Seed Technologies Global 8%
APAC
Europe
North America
26%
39%
24%
Seed Technologies Global 11%
* Excluding non-operating corporate
6
Nufarm Limited | Annual Report 2021
Our strategy, operating model and value proposition
Our crop protection strategy focuses on five core crops (corn; soybean; cereals;
pasture, turf and ornamentals; trees, nuts, vines and vegetables) in three key regions
(North America, Europe and Asia Pacific).
Alsip and
Chicago Heights
USA
Sacramento
California
USA
Greenville
Mississippi
USA
Manufacturing facilities
Regional HQ
Seed R&D
Procurement Hub
Gaillon
France
Dusseldorf
Germany
Cairo
Egypt
Wyke
UK
Linz
Austria
Shanghai
China
Kuala Lumpur
Malaysia
Merak
Indonesia
Kwinana
Australia
Laverton
(2 sites)
Australia
Melbourne
Australia
Soybean
Corn
Cereals
Trees, nuts, vines
and vegetables
Pasture, turf
and ornamentals
Our scale and global distribution footprint make us an attractive
partner for major manufacturers and research organisations.
By collaborating with these industry partners, we are able to
offer our customers high-quality products at competitive prices
and a growing range of new, differentiated products to meet
more of their needs across the crop lifecycle.
We believe our products and geographic diversity, along with
our long-term customer relationships, help protect our business
from adverse seasonal or commercial pressures in any one
market while also providing a range of expansion opportunities
in major cropping markets around the world.
Nufarm Limited | Annual Report 2021
7
About us continued
Our operating model puts the customer at the centre of our business
and decision making and provides a foundation for future growth.
Our Operating Model puts the customer at the centre
Delivering value to our growers,
our channel and to Nufarm.
We recognise the value that our channel brings
to delivering our solutions to our customers.
Our commercial teams are committed to ensuring
that we excel at realising the value of our solutions
and growing our business for us and our partners.
o m
C
r c ial Excell
e
e
m
n
Channel
partnerships and
commercial excellence
c
e
A relevant portfolio of foundational,
differentiated and innovative
products backed by technical
support and advice.
Our Portfolio team is both globally
coordinated, to benefit from our One
Nufarm approach, and locally focused,
to ensure that we can identify and
develop relevant solutions to meet the
needs of our customers.
Customer
Customer
Customer
Customer
Customer
Experience
Experience
Experience
Experience
Experience
Experience
Experience
Experience
Experience
Relevant portfolio
with technical
support
R
e
l
e
v
antPor t f o li o
Quality products
at competitive
costs
p ply
u
Reliab l e S
Supply of quality products
at competitive costs.
We focus on improving the cost
position, reliability and the quality
across our product range with
coordinated supply planning to
meet customers’ demands. Our
global footprint means our supply
team have optimised procurement
practices and efficient and
effective manufacturing. We have
a logistics network that helps the
team deliver on time and in full.
Our Value Proposition is to be a partner for growth
Being a partner for growth means
understanding what our partners need
and working to grow our businesses
together, backed by an essential and
relevant portfolio of products.
Easy To Do
Business
With
Relevant
Portfolio
Technical
Support
& Advice
Quality
Products
Competitively
Supplied
Priced
Reliably
8
Nufarm Limited | Annual Report 2021
Our seed technology business
The strategy and commitment of our seed technology business, Nuseed,
to provide world-changing solutions through the power of plants means
creating crops that positively impact global environmental issues and
provide new economic opportunities for farming communities. We call
this our Value BEYOND YIELD® strategy.
Carinata is grown as a cover crop, between food crop
rotations. Nuseed Carinata is RSB certified with a best in
class, greenhouse gas (GHG) emissions reduction when used
to replace petroleum diesel. Its amazing ability to sequester
carbon dramatically improves soil health. Carinata also
contributes to food production with its non-GMO high protein
meal for animal feed without using additional farmland.
Aquaterra® is the world’s first land-based source of long-chain
omega-3 fatty acids. An excellent complement to fish nutrition,
providing docosahexaenoic acid (DHA), eicosapentaenoic acid
(EPA) and alpha-linolenic acid (ALA), Aquaterra delivers
enhanced production performance by elevating the omega-3
levels needed for higher-quality nutritious fish.
Nutriterra is the world's first source of plant-based total
omega-3 nutrition. Clinical studies show excellent bioavailability
and efficacy. FDA recognises Nutriterra as a New Dietary
Ingredient. Friend of the Sea certified, Nutriterra offers
a sustainable alternative to marine-based nutrition.
9
Nufarm Limited | Annual Report 2021 About us continued
Our History
The customer has always been at the heart of what we do. We have a long history of
focusing on the customer, beginning in 1916. Since then, our purpose has remained
the same: to help our customers grow a better tomorrow.
1916
1957
1970s
1988
New Zealand Farmers
Federation (NZFF)
began with a few
people delivering
quality products to
help farmers grow
better crops.
Nufarm Australia
established by
Max Fremder,
providing solutions for
farmers in Australia.
Nufarm forges a
reputation for service
and product quality, and
moves to headquarters
in Melbourne.
Nufarm and
NZFF unite and
starts a period of
increased growth
while always
focusing on the
customer.
1999
1994-98
1991-92
1988-89
Nufarm acquires
one of its
customers,
Riverdale Chemical
Company, to Make
Nufarm Americas.
Nufarm expands into
Europe, acquiring
businesses that
strengthen our core
and diversify to meet
customer demand.
Nufarm expands
into Asia, opening
offices in Singapore
and Malaysia.
Exports to America
start in earnest and
Nufarm USA is
incorporated in 1989.
2004
2006
2010
2015
Nufarm today
Expansion into
South America via
Agripec (Brazil)
and Agrogen
(Columbia). Now
over 3000 people
are part of Nufarm.
The Nufarm seeds
business, Nuseed,
is established
providing hybrid
crops that create
value for the
farmer.
Sumitomo
acquires a
significant minority
stake in Nufarm,
giving access to
an expanded
portfolio to serve
customers.
Refreshed
strategy to ensure
that we focus on
key crops in key
geographical
areas that meet
customers’
needs.
Nufarm strengthens
partnerships with the
channel to provide
quality solutions
solving growers’
needs.
10
Nufarm Limited | Annual Report 2021 Our culture, values and behaviours
At Nufarm, the safety of our people, our products, our customers
and the community is foremost in all that we do.
We believe all incidents can be prevented and that we are all
responsible for making sure everyone who works at, or visits
our sites, goes home safely.
Our actions are anchored by our RARE values and guided
by our ONE NUFARM behaviours.
Our employees are encouraged to unearth the possibilities,
every day. We aim to provide an inclusive work environment
where individuals are valued for their diversity and empowered
to reach their full potential. This is a reference to our high
performing culture and also reflects the three principles of our
employee value proposition – own your growth, stay curious
and come as you are.
RResponsibility
We are accountable for our decisions
and our actions. We recognise that trust is
at the foundation of relationships and that
acting ethically, safely and responsibly
creates that trust.
AAgility
RRespect
We are resourceful and adaptable
in meeting the needs of our customers
and our organisation.
We respect others – colleagues,
customers and stakeholders – and
our environment. We care for all
of our resources.
EEmpowerment
We are an innovative, entrepreneurial
organisation where individuals and
teams can do what is best for the
customer, the organisation and
our stakeholders.
11
Nufarm Limited | Annual Report 2021 Environmental, Social and Governance
At Nufarm, we contribute to a sustainable society while helping farmers
get the best from their land. Our ambition is to grow our relevance
by delivering more sustainable solutions over more acres every year.
In 2021, to demonstrate this commitment, we adopted the
United Nations Sustainable Development Goals (SDGs), aligning
with those goals that we feel we can most strongly contribute.
These goals set the global sustainability ambition for 2030.
We continue to progress our ambition to transparently report our
sustainability approach and performance, aligning our sustainability
reporting to the Global Reporting Initiative (GRI) Standards.
In addition, we have commenced reporting of climate-related
risks and will report against the Task Force for Climate Related
Financial Disclosures (TCFD) framework next year.
We have undertaken consultation with a number of our key
stakeholders. We are progressively expanding our materiality
study and did so again this year. We have engaged; investors,
analysts, customers, financiers, and important decision makers
to determine the material sustainability matters relevant to
Nufarm and how we can mitigate and reduce our impact.
We look to improve on our approach every year to ensure
we are incorporating elements of best practice where possible.
Detailed information on our sustainability approach, targets and
performance can be found in our 2021 Sustainability Review
and GRI Content and Index, which will be available on our
corporate website.
Supporting sustainable agriculture to grow
a better tomorrow
By 2050, food output will need to expand by as much as
50 per cent in some parts of the world to meet the demands
of 9.7 billion people wanting more, higher quality and diverse
food. At the same time, our food production system will be
under increasing pressure from climate change impacts,
water scarcity, urbanisation, and soil degradation. All of
these changes have the potential to reduce the agricultural
productivity and availability of land.
The challenges facing the world can seem daunting as we strive
to transform our resource intensive and environmentally destructive
practices to ones that equitably share the planet’s resources
and preserve our natural environment. It requires the commitment
and effort of every one of us to change our current trajectory.
At Nufarm we match our ambition to our scale and core
competencies, that is – we focus our efforts where we can have
the greatest influence.
Central to our sustainability approach is enabling our growers
to produce more from less, responding to the global demand for
more food, while at the same time providing products that help
them adapt to climate change impacts and minimise unintended
environmental consequences.
Our crop protection business – turning world-leading
scientific breakthroughs into sustainable local solutions
Our farmers are on the frontline of sustainable agriculture; doing
their best with the knowledge and tools available to them to
balance the land’s productivity and their livelihood with the
environmental and social responsibilities that come with its
stewardship. Nufarm provides growers with a tool kit of crop
protection products to help them achieve their goals.
We manufacture and sell products that enable sustainable
farming practices such as no-tillage farming which reduces
on farm fuel consumption by up to 60 per cent, significantly
contributes to carbon sequestering, retains soil moisture,
and reduces erosion. Products like Glyphosate help farmers
produce more from less while reducing the environmental
impacts of agriculture. Over 23 per cent of our product
portfolio comprises products that enable more sustainable
farming practices.
While there are exciting new biotechnologies being developed
in the crop protection space, synthetic crop protection products
remain an essential component of sustainable agriculture and
our business. These products prevent significant crop losses
to pests, weeds and disease and improving the quality and
quantity of available food.
Our sustainable crop protection products provide growers
an alternative to synthetic chemistry. Products in this category
have lower or no human health and environmental impacts.
Over 6.5 per cent of our product portfolio is made up of partially
or fully sustainable products and it is growing. In the coming
year we will direct nearly 20 per cent of our research and
development budget to sustainable crop protection products,
including biologicals.
This year we launched our brand NuBio in Europe, championed
by a team dedicated to advancing biological pesticides. With
20 years’ experience in biological pesticides, NuBio brings
together our European biological product portfolio to make it
easier for growers to find the right biological solution using our
digital platform. From now on, biological insecticides, fungicides
and bio-stimulants, as well as environmentally friendly spraying
programmes, will carry the registered NuBio label. This means
that farmers can easily identify effective biological solutions at
a glance. The NuBio portfolio comprises more than 15 products
and with new biological products in the pipeline, we will continue
to launch them on to this platform into the future.
Last year we announced our investment in crop.zone, a
German-based agtech company that has developed a hybrid-
electric weed control solution, NUCROP™. NUCROP™ provides
an alternative and complementary solution to chemical based
weed control by using a conductive liquid and electrical voltage
to control weeds and desiccate crops. This year we strengthened
our relationship by converting our investment to an equity
holding and are working with crop.zone to expand the range
of applications and countries where the technology is available.
This technology is recognised as a game changer in the potato
industry, taking out two awards recently at Potato Europe’s
Innovation Awards.
12
Nufarm Limited | Annual Report 2021 Our seed technologies business – creating crops
that positively impact global environmental issues
and providing new economic opportunities for
farming communities
Plant-based products have the power to solve important global
problems. Today our Nuseed Value Chains and teams are
connecting growers, industry, and end-users around the
world to deliver new sustainable plant-based solutions with
considerable benefits to consumers and our environment.
Nuseed Omega-3
Estimates indicate over 80 per cent of people worldwide are not
getting enough Omega-3 in the food they eat. Wild fish stocks,
the current major source, are already under intense pressure to
supply the rapidly growing global demand. Nuseed Omega-3
Canola was developed to provide aquafeed and human nutrition
markets from a land-based source.
This year marks a new milestone for our products Aquaterra®
and Nutriterra®. The world’s first non-marine source of long-
chain omega-3 fatty acids were each certified as a Friend of the
Sea; a global standard for products and services that respect
and protect the marine environment.
Both Aquaterra® and Nutriterra® are derived from Nuseed
Omega-3 Canola, where just 1-2 hectares of crop can produce
as much docosahexaenoic acid (DHA) as 10,000 kg of wild
caught fish, taking pressure off our precious marine resources.
In another significant milestone this year, the US Food and
Drugs Administration (FDA) recognised Nutriterra® Total
Omega-3 as a New Dietary Ingredient (NDI). This allows
us to progress our plans to provide a sustainable source
of plant-based Omega 3 to the human nutrition market.
Nuseed Omega-3 Canola was developed by Nuseed and its
partners to deliver the nutrition of microalgae through renewable
canola seeds. Canola is a rotational crop that improves soil and
increases yield in subsequent planting and the Friend of the Sea
certification verifies sustainable crop production.
Agriculture is a key contributor to reducing atmospheric carbon;
sustainable farming practices such as no till and retention of
cover crops has been proven to improve soil carbon retention.
Nufarm supports sustainable agricultural practices with both
our crop protection and seeds products.
Nuseed Carinata
Nuseed Carinata is an independently certified, scalable and
sustainable non-food oilseed cover crop used in the production
of low-carbon fuel. After the crop is harvested, the oil is
extracted and the remaining fibre is used as a source of
traceable non-GMO plant protein.
Nuseed Carinata addresses many sustainability challenges.
It reduces emissions by replacing fossil fuels, removes
atmospheric carbon, and restores soil carbon as it grows and
improves soil health. Grown between main crops, Nuseed
Carinata generates extra income for growers from existing
farmland and rewards certified sustainable farming practices.
Aviation and other, difficult to decarbonise transport sectors, are
looking for sustainably scalable fuel innovations to substantially
reduce their carbon emissions. Nuseed Carinata is
independently certified by the Roundtable on Sustainable
Biomaterials (RSB) and is listed by the International Civil Aviation
Organization (ICAO) as having similar greenhouse gas (GHG)
savings as top performing feedstocks, primarily waste and used
cooking oil.
13
Nufarm Limited | Annual Report 2021 Environmental, Social and Governance continued
Advancing our sustainability ambition
This year, to demonstrate our commitment to sustainable
agricultural and production processes and to continue to drive
improvement through our business, we aligned to the United
Nations Sustainable Development Goals (SDGs), which set the
global sustainability ambition for 2030.
To further SDG 12, this year we set environmental targets to
reduce air emissions and waste from our manufacturing sites
by 2025 as well as committed to obtaining best practice
ISO14001 environmental management system certification at our
remaining five manufacturing sites still to achieve this certification.
SDG 2: End hunger, achieve food security and improved nutrition
and promote sustainable agriculture and SDG 12: Ensure
sustainable consumption and production patterns, both align with
our core-competencies and as manufacturers of sustainable
agricultural solutions represent where we contribute the most
to these global ambitions.
SDG 13: Take urgent action to combat climate change and
its impacts, SDG 14: Conserve and sustainably use the oceans,
seas and marine resources for sustainable development and
SDG 15: Protect, restore and promote sustainable use of terrestrial
ecosystems, sustainably manage forests, combat desertification,
and halt and reverse land degradation and halt biodiversity loss,
reflect the areas of the environment we actively work to minimise
any potential impacts from our products and operations.
Together, these SDG’s reflect the balance the agricultural sector
strives to achieve when needing to feed a growing population
while protecting our precious environment and responding
to climate change.
This year we also established the foundation for our
commitment to SDG 13, with a Board approved Climate
Change Policy and progressed our reporting transparency
of climate risks. In addition, to contribute to Climate Action
we set ourselves a target to reduce our scope 1 and 2
greenhouse gas emissions, through renewable electricity and
energy efficiency opportunities at our manufacturing sites by
2030. Further information on all of targets can be found in our
2021 Sustainability Review.
At the heart of our commitment to SDG 12 is the health and
safety of our people, our customers, and the communities in
which we operate. In line with this, Everyone Goes Home Safely
remains a priority ambition of Nufarm’s Board, management,
and employees. This year, our Board and Executive Leadership
team progressed this ambition through participating in a
Process Safety Management training program that focused
on the role of leadership in the ongoing safe and effective
operation of a Major Hazard Facilities.
14
Nufarm Limited | Annual Report 2021 Managing impacts of climate change
Climate Change Governance
The Board has ultimate oversight of climate-related risks and
opportunities through its sub-committee, the Board Risk &
Compliance Committee. This Committee is responsible for
overseeing and monitoring the identification, assessment,
management, prioritisation and reporting of financial and
non-financial risks that are material to the operations and
achievement of Nufarm’s strategy. The Charter was updated
this year to include Environmental, Social and Governance
(ESG) responsibilities.
Refer to disclosure 102-18 Governance Structure in our 2021
GRI Content and Index for details on Board oversight and the
sub-committee charters.
The Board has this year strengthened its consideration of
climate related risks with the development and approval of a
Climate Change Policy and incorporation of climate change
information in the Group Strategy setting/review process. The
Board and Executive agreed to commence work on improving
our disclosures on how climate change may impact our
organisation and the communities we are part of. We have
formalised this commitment by becoming a TCFD Supporter
during FY21 and we intend to align our reporting to the TCFD
framework next year.
Our Health, Safety & Environment (HSE) team monitor Scope 1
and 2 greenhouse gas emissions from our synthesis and
formulation manufacturing sites. This is reported quarterly
to the Executive Risk, Health, Safety & Environment (ERHSE)
Committee and to the Board Risk and Compliance Committee.
The HSE team has a network of local representatives at our
manufacturing sites across the globe who work closely with Site
Managers and their teams to monitor emissions.
Our Portfolio Solutions team is undertaking sustainability
assessments of our key products which will be an input to the
annual product review cycle.
Climate change strategy and risks
Climate change will result in both acute and chronic physical
impacts to our environment which will have consequential
social, economic and political impacts across the globe. The
magnitude and frequency of significant weather events will
increase and their volatility will make them hard to predict. The
weather patterns to which we have aligned so much of our
social and economic activity are no longer stable but may bring
opportunities for new enterprises and industries.
More intense and frequent weather events will make it harder
to produce and distribute food using current methods:
• Crop damage events (from weather or disease) and water
scarcity will reduce yields, causing prices to rise and be
unaffordable for impoverished communities.
• Certain land will be climatically unsuitable to farm crops
and/or will require more resilient or new crops to be grown
in this geography.
Agriculture, and the wider food production system, is already
a major source of greenhouse gas emissions and growers are
taking action, either voluntarily or as mandated by government
policy in their local area, to reduce their greenhouse gas (GHG)
emissions and reduce their carbon footprint. Climate adaptation
measures undertaken by growers, others in the agricultural value
chain and energy providers may also contribute to increases in
food prices.
Climate change will also affect aquaculture via acidification,
changes in sea temperatures and circulation patterns, the
frequency and severity of extreme weather events and sea
level rises.
Nufarm’s strategic response
Sustainable agriculture helps to combat climate change in many
ways; through increasing land productivity and yields to limit
further land clearing, growing renewable sources of fuel and
materials, protecting soil against erosion and water loss and
growing plants that sequester carbon.
As a global crop protection and seed technologies company,
Nufarm is committed to playing its role in addressing climate
change and its impacts. We recognise the need to reduce our
own emissions and believe we can provide solutions to help
our growers and end customers reduce the impact of their
operations on climate change.
We believe our crop protection products support growers to
increase crop yields, which reduces the need for land clearing
and de-forestation by producing more food on less land. Our
crop protection products also allow growers to practice minimal
or zero tillage weed control, therefore retaining plant matter
on their land after crops are harvested. Retained plant matter
supports water retention, prevents wind erosion, promotes
healthier soils and assists with carbon sequestration.
We believe that innovative plant-based solutions will play
a role in addressing climate change and we are committed
to exploring and commercialising these opportunities.
Our products assist the agricultural industry in moving towards
carbon neutrality and promoting sustainable agriculture.
During our most recent strategic planning process, we broadly
identified the key uncertainties relating to climate change and
how these may impact our business.
15
Nufarm Limited | Annual Report 2021 Environmental, Social and Governance continued
Opportunity for Nufarm
Improving yields and new plant-based solutions are important elements in improving
nutrition, supporting the environment and getting the most from every acre.
How our products help growers adapt
Carbon sequestration case study:
Nuseed Carinata, is grown as a cover crop to produce non-food oil feedstock for
renewable fuel production. A co-product of crushing Carinata to extract the oil is
a high protein, non-GMO meal for animal feed – a valuable by-product generated
without using additional farmland. The sustainability benefits of Carinata include
both carbon sequestration and carbon reduction.
Nuseed sunflower hybrids have many of the characteristics of their wild relatives,
such as drought tolerance and a deep root system that mines for nutrients. The
majority of sunflowers are produced in a reduced-tillage system which prevents
erosion, leaving the stalks standing and fields undisturbed over winter which also
provides an excellent food source for wildlife.
Water efficiency case study:
Sorghum, another Nuseed product, is both a more sustainable and economical
corn feed ration replacement, requiring one third less water with comparable
energy and nutrition.
Sustainability enabling crop protection products:
We manufacture and sell products that enable sustainable farming practices such
as no-tillage farming, which reduces on-farm fuel consumption by up to 60 per
cent, significantly contributes to carbon sequestering, retains soil moisture and
reduces erosion. These products help growers reduce energy and time resources
while increasing farm productivity and are an important part of our product portfolio.
Risk for Nufarm
It’s important to us that we reduce our consumption of precious resources and
minimise our impact on the world around us.
Refer to our 2021 Sustainability Review and GRI Content and Index for
more information.
Risk for Nufarm
Just as Nufarm ‘partners for growth’ with our distribution channel partners, we
also apply this philosophy when establishing and maintaining our key supply
partnerships and alliances. As we and our partners plan our transition pathways,
we will continue to work closely to understand and manage any increase to
supply costs.
Transition risks
Changes in product demand – driven
by adaptation policy & regulation
Climate trends in agriculture mean that growers
across the globe will need to adapt and evolve
their farming methods and crop choice.
Therefore, we will also need to evolve our
product offerings and target markets. We
believe that grower adaptation and evolution
will occur at different speeds and to different
extents across the globe, depending on the
speed of government policy setting and
regulation in that geographic region.
Operational changes – fossil fuel & carbon
footprint reduction/compliance with GHG
policy & regulation
Our manufacturing and processing facilities
across many geographical locations may be
impacted by regulatory changes to address
climate changes. Preparing for and complying
with these regulatory changes could result in
an increase to our operating costs. It may not
be possible to fully recover this in sales prices.
Operational cost/cost of goods sold
(COGS) increase – suppliers passing on
transition costs
Just as we will need to adapt our operations
to reduce GHG emissions and carbon
footprint, so too will our suppliers. Prices for
production inputs including energy to run our
production/processing plants may increase
where suppliers pass these costs on.
16
Nufarm Limited | Annual Report 2021 Physical risks
Changes in product demand – driven by
climate unsuitability (chronic physical)
Future climate variability and unsuitability
means that growers across the globe will need
to evolve their farming methods and seed/crop
/fish choice. Climate change impacts on
aquaculture may also render Omega 3 -rich
salmon farming unviable. Therefore, we will
also need to evolve our product offerings
and target markets. We believe that grower
evolution will occur at different speeds and to
different extents across the globe, depending
on the speed of climatic unsuitability in that
geographic region.
Changes in product demand – driven
by acute physical events
The increasing volatility of weather patterns will
increase the frequency and intensity of adverse
weather events. These may result in significant
crop damage and reduction in yields.
Impacts on our operations (including
supply chain) – driven by acute and
chronic physical events
As climate change increases weather pattern
instability, our operations may be subject
to more disruption from physical events.
Repeated disruptions may render parts of our
supply chain and manufacturing arrangements
unviable in the long term.
Opportunity for Nufarm
Sustainable solutions that are relevant
Climate change scenario analysis will give us more detailed insights on how
climate change may impact our core crop selection and geographies. We will
integrate these insights into our longer term strategic planning process.
How we are making crops more resilient
Our crop protection products provide farmers with important tools to help
improve resource efficiency, reduce soil erosion and conserve moisture for plant
growth. By improving crop yields, we also help to limit the amount of new land
required for agricultural use as demand for food production increases. We
support integrated pest management practices that combine cultural, biological
and chemical methods and we are committed to promoting practices that
encourage responsible, safe and efficient use of our products.
New crop choices that help growers adapt to different climate conditions
Nutriterra® is the world’s first plant-based source of total omega-3 nutrition,
including docosahexaenoic acid (DHA), eicosapentaenoic acid (EPA) and
alpha-linolenic acid (ALA). Until now, DHA and EPA was found exclusively in
marine sources, mostly fish and algae. But our ocean cannot provide enough
of this nutrient to meet human nutritional needs without depleting wild fish
populations. Nutriterra® fills the gap between how much omega-3 is needed and
how little the ocean currently produces and will be able to produce in the future.
In August 2021, the U.S. Food and Drug Administration’s (FDA) issued a notice
recognising Nutriterra® Total Omega-3 as a New Dietary Ingredient (NDI). This
acknowledgement allows us to progress our plans to expand into the human
nutrition market and meet a growing demand for plant-based DHA and EPA
omega-3 options.
Risk for Nufarm
Our business continuity and insurance programs consider physical risk
exposures relating to our manufacturing and non-manufacturing operations
including identifying actions to physically strengthen our facilities.
The longer term suitability of our manufacturing footprint and supply chain
arrangements is assessed through our strategic risk management process.
Integrated Risk Management, Metrics and Targets
Next steps in our climate change work program:
• Climate-change scenario selection and analysis;
• Continue to disclose our risk management process
and key roles and responsibilities for oversight relating
to climate-related risks and opportunities;
• Continue to enhance our disclosure of climate-related risks
and opportunities each year;
• Continue to embed climate-related risk and opportunity
understanding into our Group Risk Management risk
hierarchy and tools; and
• Detailed risk assessment for material climate-change risks
identified in the scenario analysis exercise.
Nufarm Group is working toward managing all risks, including
climate-related risks, in an integrated manner. This means that
risk management activities are not separate to core business
activity but are embedded in operations. Risk-based prioritisation
assists business areas to focus their resources on their most
significant activities. Risk assessments are being improved to
support key decision-making activities. This is supported by the
Group’s Risk Management framework which is underpinned by
the Group Risk Management Policy. It sets out the requirements
and responsibilities for risk management across the Group.
Climate change has been identified as one of the trends/causes
of a number of our Group strategic risks. Refer to the risk
disclosure in this annual report for a summary of our key risks
and further information on our risk management framework
and processes.
Refer to the 2021 Corporate Governance Statement and GRI
Content and Index for further information on our risk
management principles.
We are currently finalising our metrics which will be published in
the upcoming 2021 Sustainability Report, along with our targets.
17
Nufarm Limited | Annual Report 2021 Environmental, Social and Governance continued
Safety matters
We operate Major Hazard Facilities which have best practice
process safety management systems. This year, our two North
Laverton sites in Australia were issued 5-year unconditional
Major Hazard Facility licenses by the government regulator,
Worksafe. This is the highest level of Worksafe’s licence to
operate available and reflects the high standard and sustainable
deployment of Nufarm’s process safety management processes
and culture at these sites.
Against this backdrop, several of our manufacturing sites have
again delivered on our aspirations of Everyone Goes Home Safely
through reaching new injury free milestones. Unfortunately,
other sites, which had previously achieved significant injury free
milestones, have had injuries of a strains, sprains or minor cut type
nature. While there have been a number of contributing factors,
despite our best efforts, we believe Covid-19 fatigue has contributed
to the increase in the Lost Time Injury Frequency Rate (LTIFR).
It has been more than a year since the Covid-19 global
pandemic began and we are proud to be an essential service,
operating throughout the pandemic to provide valuable inputs to
the agricultural industry. We continue to prioritise the health and
safety of our employees while ensuring we deploy Covid-safe
work practices in line with government directives and business
best practice. Our employees are understandably fatigued
by the Covid-19 induced changing working conditions and
community restrictions. We are very conscious that such
distractions can increase the risk of incidents and work
hard to continually reinforce safe work practices in this
challenging environment.
This is not how we hoped to end the year. Recognising that this
is a challenging time for many of our people, we have held
discussions with staff across our business focusing on the
impacts Covid-19 may be having on individuals and teams and
steps and resources available to assist in dealing with these.
We have also held mental health and wellbeing sessions that
have been positively embraced by many across the business.
For further information on our sustainability approach,
targets, and performance, please refer to our 2021
Sustainability Review which will be available in
December 2021 and our 2021 GRI Content and Index,
which will be available in early 2022. Both publications
will be available on our corporate website.
Nufarm Global Serious Injury Frequency Rate (SIFR) and Lost Time Injury Frequency Rate (LTIFR) –
rolling 12 month averages (per million hours worked)
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
6
1
-
n
a
J
6
1
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a
M
6
1
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M
6
1
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J
6
1
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S
6
1
-
v
o
N
7
1
-
n
a
J
7
1
-
r
a
M
7
1
-
y
a
M
7
1
-
l
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J
7
1
-
p
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S
7
1
-
v
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N
8
1
-
n
a
J
8
1
-
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a
M
8
1
-
y
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8
1
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l
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J
8
1
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p
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S
8
1
-
v
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N
9
1
-
n
a
J
9
1
-
r
a
M
9
1
-
y
a
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9
1
-
l
u
J
9
1
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9
1
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v
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N
0
2
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n
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J
0
2
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r
a
M
0
2
-
y
a
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0
2
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l
u
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0
2
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0
2
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1
2
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1
2
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1
2
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2
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2
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S
Nufarm Global LTIFR Rolling 12 months
Nufarm Global SIFR Rolling 12 months
Our SIFR includes Lost Time Injuries (LTIs) and Medical Treatment Injuries (MTIs).
18
Nufarm Limited | Annual Report 2021
Operating and Financial Review
Group results
Following the divestment of the South American crop protection businesses on 1 April 2020 Nufarm changed its financial year-end
to better align reporting periods with key sales periods and enable improved comparison with industry peers. This Operating and
Financial Review includes financial information based on financial statements prepared in accordance with International Financial
Reporting Standards (IFRS) and audited by KPMG, including the two-month period ending 30 September 2020 (statutory comparative
period). Information is presented on a continuing operations basis unless otherwise specified. Non-IFRS measures and proforma
comparatives for the twelve months ended 30 September 2020 (proforma comparative period) have also been provided for insight
into performance on a like-for-like calendar basis, and the basis for preparing the proforma financial information is set out on page 24.
Non-IFRS measures and proforma figures have not been subject to audit or review. All amounts are in Australian dollars unless
otherwise specified.
The results in the statutory comparative period are not proportional to the proforma results for 12 months ended 30 September 2021
as the operating profits/losses of the Group is subject to seasonality inherent within the crop protection and seed technology markets.
Summary financial results
(continuing operations unless specified)
Revenue
Revenue excluding Corporate revenue**
Gross profit
Underlying SG&A
Research and development expenses
Underlying EBITDA
Underlying EBIT
Operating profit/(loss)
Net external interest
Foreign exchange (gains)/losses
Underlying net profit/(loss) after tax
Net profit/(loss) after tax
Statutory effective tax rate
Basic earnings per share – excluding material items (cents)
Basic earnings per share (cents)
Total dividend per share declared in respect of period (cents)
Accounting policy changes*
Underlying EBITDA – pre IFRIC accounting policy change
IFRIC accounting policy change impact
Underlying EBITDA
Underlying EBIT – pre IFRIC accounting policy change
IFRIC accounting policy change impact
Underlying EBIT
12 months
ended
30 Sep 2021
$000
Restated*
2 months
ended
30 Sep 2020
$000
Proforma
12 months
ended
30 Sep 2020
$000
Change
30 Sep 2021 vs
Proforma
30 Sep 2020
%
3,215,651
267,320
2,933,500
3,017,936
222,136
2,802,929
834,705
39,920
737,871
(654,390)
(115,862)
(682,498)
(36,663)
361,107
153,100
156,977
(58,488)
(2,802)
61,058
65,128
32%
14
15
4
(6,132)
(47,191)
(81,008)
(87,870)
(9,348)
(4,659)
(87,448)
(92,859)
9%
(23)
(25)
–
(22,298)
237,170
39,995
n/a
(69,813)
(26,245)
(73,079)
n/a
n/a
n/a
n/a
n/a
10%
8%
13%
7%
(60)%
52%
283%
n/a
16%
89%
large
n/a
n/a
n/a
n/a
100%
12 months
ended
30 Sep 2021
$000
Restated*
2 months
ended
30 Sep 2020
$000
Proforma
12 months
ended
30 Sep 2020
$000
Change
30 Sep 2021 vs
Proforma
30 Sep 2020
%
369,838
(8,731)
361,107
157,259
(4,159)
153,100
(43,379)
(3,812)
(47,191)
(78,815)
(2,193)
(81,008)
245,204
(8,034)
237,170
41,913
(1,918)
39,995
51%
9%
52%
275%
117%
283%
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii) to the financial statements
** Corporate revenue is defined as the non-operating corporate segment revenue as presented in note 5 to the financial statements
19
Nufarm Limited | Annual Report 2021 Operating and Financial Review continued
Earnings
Underlying EBITDA improved significantly over the 12 months
ended 30 September 2021 with increased revenue, higher
gross profit margins and reduced costs. Underlying EBITDA
is $408 million higher than the statutory 2 months ended
30 September 2020. Compared to the proforma comparative
period, Underlying EBITDA increased by $124 million,
representing growth of over 50 per cent.
Improved seasonal conditions and commodity prices generated
strong demand for Nufarm crop protection products and seed
technologies. This resulted in revenue (excluding corporate
revenue) growth of 8 per cent relative to the proforma comparative
period. Gross profit margin (excluding corporate revenue)
increased from 26 per cent to 28 per cent over the prior year
pro-forma comparative period.
Underlying selling, general and administration costs (Underlying
SG&A) reduced by $28 million as compared to the proforma
comparative period with the performance improvement program
contributing approximately $20 million from cost reduction
projects ($25 million since inception) which are expected to
deliver sustainable, continuing benefits. Favourable currency
translation also contributed to the reduction. Lower discretionary
expenditure due to Covid-19 restrictions helped offset increased
logistics costs and short-term incentive provisions. Research
and development expenditure increased by $14 million as
compared to the proforma comparative period due to increased
innovation and development activities. These activities focus
on new markets and new technologies as well as expansion
of existing product registrations and formulations.
Depreciation and amortisation expense of $208 million
included a positive currency translation benefit of approximately
$11 million relative to the proforma comparative period. The
underlying increase in expense related primarily to increased
amortisation of Seed Technologies intellectual property
following commercialisation (including Omega 3-Canola).
Net external interest costs reduced 16 per cent compared to
the proforma comparative period reflecting both lower average
net debt balances following the disposal of the South American
crop protection businesses and a relative strengthening of the
AUD currency to the USD currency which reduced interest costs
on the Company’s US dollar denominated high yield bonds.
Foreign exchange losses reduced to $3 million, reflecting reduced
currency volatility, particularly in Eastern Europe. The Group
has implemented a targeted currency exposure risk mitigation
program to reduce foreign exchange risk in this region.
The statutory effective tax rate was 32 per cent. The improved
profits in Australia enabled us to utilise previously unrecognised
tax losses and which has offset the impact of not being able
to recognise losses in certain European countries.
Net profit after tax increased to $65 million from a loss relative
to the statutory comparative period, lifting basic earnings
per share to 15 cents. Return on Funds Employed improved
to 5.9 per cent, with the increase in underlying EBIT contributing
to the improvement.
Cash flow
Cash flow
Underlying net operating cash flow
Net operating cash flow – material items
Total net operating cash flow
Underlying net investing cash flow
Net investing cash flow – material items
Total net investing cash flow
12 months
ended
30 Sep 2021
$000
Restated*
2 months
ended
30 Sep 2020
$000
439,807
(119,683)
(15,616)
(10,306)
424,191
(129,989)
(146,299)
(17,105)
–
–
(146,299)
(17,105)
Total underlying net operating and investing cash flow
Total net operating and investing cash flow
293,508
277,892
(136,788)
(147,094)
Change
%
large
(52)%
large
large
n/a
large
large
large
12 months
ended
31 Jul 2020
$000
216,553
(417,557)
(201,004)
(161,514)
1,277,106
1,115,592
55,039
914,588
Change
%
large
98%
35%
89%
(100)%
large
large
large
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii) to the financial statements
Cash generation improved significantly with higher operating cash flows and reduced investing cash flows contributing to underlying
net operating and investing cash flow of $294 million for the year.
Underlying net operating cash flows increased $223 million relative to the 31 July 2020 statutory comparative period, due in large
part to the improvement in underlying earnings and the relative closing working capital position, with Net Working Capital closing
$191 million favourable to the 30 September 2020 balance. Cash flow generation is highly correlated with changes in Net Working
Capital and Underlying EBITDA.
Net cash from investing activities reduced significantly compared to 12 months ended 31 July 2020, to an outflow of $146 million.
The Company experienced some delays in project expenditure as a result of Covid-19 restrictions across manufacturing facilities
and for development projects of intellectual property.
20
Nufarm Limited | Annual Report 2021 Balance Sheet Management
Financial position
Net debt
Net working capital
ANWC/sales excluding non-operating corporate revenue (%)
ANWC/sales (%)
Leverage – continuing operations (includes lease liabilities)
Gearing %
As at
30 Sep 2021
$000
As at
30 Sep 2020
$000
316,817
606,207
854,431
1,044,934
34%
32%
0.88
13.0%
45%
43%
2.47
22.9%
Change
%
(48)%
(18)%
(1,044)bps
(1,055)bps
(65)%
(986)bps
The Group’s financial position strengthened considerably during the period as a result of the improved Net Working Capital position
as at 30 September 2021 consolidating the improvement during the year ended 31 July 2020 following the sale of the South American
business. Net debt has reduced 48 per cent from 30 September 2020.
The Average net working capital/sales (ANWC/sales (%)) continued to improve to 32 per cent (34 per cent excluding non-operating
corporate revenue). Management has a clear focus on maintaining this metric between a targeted range of 35 per cent to 40 per cent
via a range of actions including customer terms, supplier negotiations and effective stock management. In the year ended
30 September 2021, the Group was able to exceed this target as customer liquidity was high resulting in early season customer
negotiations locking in prepayments and terms. Maintaining or exceeding the targeted range remains a key focus across all regions.
3. Consideration of any excess capital to be returned to
shareholders in circumstances where Nufarm is below
its targeted leverage metrics and insufficient growth
opportunities exist to utilise excess free cash flow. These
capital return measures may include special dividends
and share buy-backs.
Dividend
As part of our review of the capital management framework,
the Board has adopted a change in the dividend policy to align
dividend payments to free cash flow generation, after allowing
for investment growth opportunities, and subject to maintaining
our target leverage range of 1.5x – 2.0x. Nufarm’s dividend
policy ensures elevated attention to cash generation, especially
net working capital management, and greater focus on
maintaining an appropriate capital structure for the Group.
Today, the Board has declared to pay an unfranked final
dividend of four cents per share, a level covered by the Group’s
free cash flow. The final dividend will be paid on 17 December
2021 to the holders of all fully paid shares in the Company as
at the close of business on 26 November 2021. 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 price
of the Company’s ordinary shares on the ASX over the 10 day
period commencing on 22 November 2021 and ending on
3 December 2021. The last election date for shareholders who
are not yet participants in the DRP, is Monday 29 November 2021.
Capital Management
During the year, we completed a review of our capital
structure and capital management principles with the aim
of maintaining a robust and durable capital structure and
clear guidelines for the application of free cash flow generated
from business operations.
Nufarm’s stronger balance sheet following the divestment of the
South American crop protection businesses on 1 April 2020
offers additional flexibility to:
• structure the Company’s financing arrangements to deliver
cost efficiency;
• ensure appropriate levels of liquidity; and
• reduce balance-sheet risk.
Our financing arrangements aim to ensure we have the required
financial resilience to withstand adverse trading cycles without
experiencing undue balance sheet stress.
Our capital management framework provides the basis for capital
allocation decisions, including the application of free cash flow.
An ongoing commitment to continuous improvement in net
working capital management is the cornerstone to expand
Nufarm's capacity to be consistently cash generative.
Subject to Board discretion, Nufarm intends to adopt a cascading
approach to capital allocation decisions that is consistent with
maintaining targeted credit metrics and a sound financial
structure in the following manner:
1. Application of free cash flow to investment growth projects
and/or small bolt-on acquisitions where the projected returns
satisfy internal ROFE measures that exceed Nufarm’s
weighted average cost of capital.
2. Consideration of the payment of a dividend from part of
free cash flow, subject to compliance with a core target
leverage (statutory) range of 1.5x – 2.0x, under the adoption
of a new dividend policy.
21
Nufarm Limited | Annual Report 2021 Operating and Financial Review continued
Review of operations
Nufarm’s business has two main reporting segments, crop protection and seed technologies. The crop protection business is
focused on major agricultural markets in Europe, North America and Asia Pacific (APAC). The seed technologies business operates
in more than 30 countries across the globe.
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii) to the financial statements.
Revenue – Underlying
($000s)
Crop protection
APAC
North America
Europe
Total Crop protection
Seed Technologies – global
Corporate
Nufarm Group
Discontinued operations
Nufarm Group
EBITDA – Underlying
($000s)
Crop protection
APAC
North America
Europe
Total Crop protection
Seed Technologies – global
Corporate
Nufarm Group
Discontinued operations
Nufarm Group
Restated*
2 months
ended
Sep-20
Change
Proforma
12 months
ended
Sep-20
Change
Change %
12 months
ended
Sep-21
858,407
1,112,423
806,485
92,463
74,323
48,293
765,944
754,298
104,109
1,038,100
1,054,286
758,192
796,204
58,137
10,281
2,777,315
215,079
2,562,236
2,604,788
172,527
240,621
197,715
7,057
45,184
233,564
152,531
198,141
130,571
3,215,651
267,320
2,948,331
2,933,500
–
–
–
442,422
42,480
67,144
282,151
(442,422)
3,215,651
267,320
2,948,331
3,375,922
(160,271)
12 months
ended
Sep-21
Restated*
2 months
ended
Sep-20
111,550
104,394
171,696
387,640
46,322
(72,855)
691
(6,224)
(19,119)
(24,652)
(4,515)
(18,024)
Proforma
12 months
ended
Sep-20
75,983
96,854
102,183
275,020
29,492
(67,342)
Change
110,859
110,618
190,815
412,292
50,837
(54,831)
35,567
7,540
69,513
112,620
16,830
(5,513)
Change
Change %
361,107
(47,191)
408,298
237,170
123,937
–
–
–
28,085
361,107
(47,191)
408,298
265,255
(28,085)
95,852
(100)%
36%
14%
6%
1%
7%
21%
51%
10%
(100)%
(5%)
47%
8%
68%
41%
57%
8%
52%
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii) to the financial statements.
EBIT – Underlying
($000s)
Crop protection
APAC
North America
Europe
Total Crop protection
Seed Technologies – global
Corporate
Nufarm Group
Discontinued operations
Nufarm Group
12 months
ended
Sep-21
Restated*
2 months
ended
Sep-20
91,436
71,716
45,953
209,105
17,817
(73,822)
(2,354)
(11,210)
(39,818)
(53,382)
(9,420)
(18,206)
Change
93,790
82,926
85,771
262,487
27,237
(55,616)
153,100
(81,008)
234,108
–
–
–
153,100
(81,008)
234,108
Proforma
12 months
ended
Sep-20
57,045
66,402
(21,267)
102,179
6,566
(68,750)
39,995
23,180
63,175
Change
Change %
34,391
5,314
67,220
106,926
11,251
(5,072)
113,105
(23,180)
89,925
60%
8%
(316)%
105%
171%
7%
283%
(100)%
142%
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii) to the financial statements.
22
Nufarm Limited | Annual Report 2021 Crop Protection
APAC
Underlying EBITDA of $112 million was up 47 per cent on the
proforma comparative period with higher revenues, improved
gross profit margin in Australia and New Zealand and lower
operating costs driving the improvement.
Revenue increased 14 per cent with volume growth driven
by easing of drought conditions in Australia and Indonesia,
particularly in the first half of the year.
The Australia and New Zealand business generated Underlying
EBITDA of $82 million, with improved seasonal conditions, better
commodity prices and tight industry supply generating strong
demand. Increased sales of Nufarm branded crop protection
products and Croplands spraying equipment contributed to a
positive product mix, lifting margins and earnings. Recent product
launches including Crucial®, Terrad’or® and Saracen® have been
successful and have contributed positively to the growth.
The Asia businesses generated Underlying EBITDA of $29 million,
with increased sales volumes and reduced operating costs more
than offsetting the impact of unfavourable currency translation.
Manufacturing at the Raymond Road insecticide and fungicide
(I&F) manufacturing facility in Australia ceased in September
2021 and the land and buildings are now expected to be sold
during the next financial year. I&F products for the Australian
market will now be sourced from a combination of Nufarm’s
Malaysian & North American manufacturing plants, domestic
toll formulators and imports.
Europe
Regional operating costs were lower relative to the proforma
comparative period. An increase in freight and logistics costs
relating to increased volumes, Covid-19 disruption and the Brexit
transition was more than offset by lower discretionary spending
costs due largely to Covid-19 restrictions.
Manufacture of 2,4-D synthesis at the Linz manufacturing facility
ceased in March 2021. Financial benefits from the closure are
expected to begin to be realised in the new financial year as
existing stock levels are utilised.
North America
Underlying EBITDA increased 8 per cent relative to the proforma
comparative period. In US Dollars, underlying EBITDA increased
25 per cent relative to the same period, with strong commodity
prices and improved demand offset by increased expenditure
due to global and regional logistic constraints which saw
increased costs in warehousing and freight.
Revenues increased 6 per cent relative to the proforma
comparative period. In US Dollars, revenue increased 19 per
cent relative to same period. Strong commodity prices and
improved demand has underpinned the demand for crop
protection products. The Turf & Ornamental segment has also
seen improvement as Covid-19 restrictions have eased during
the year. Global and regional logistic constraints saw increased
costs in warehousing and freight continued over the second half
of the financial year. These constraints are expected to continue
well into FY22. Good customer support flowing from the
successful commissioning of the Greenville manufacturing plant
last year also contributed to the strong performance.
Underlying EBITDA increased to $172 million or 68 per cent
(80 per cent in Euro), with higher revenues, improved margins
and reduced operating costs contributing to the outcome.
Freight and logistics cost increases were partially offset by
a reduction in discretionary expenditure due to Covid-19
restrictions limiting travel and product promotional activities.
Revenue increased 1 per cent relative to the proforma
comparative period. In Euro, revenues were up 6 per cent
on the same period. Sales performance in Germany, the UK,
Baltic markets and parts of Eastern Europe was particularly
strong with improved seasonal and trading conditions in these
countries. Revenues also benefitted from increased sales of
bromoxynil and beta-cyfluthrin which were in extended sell-out
periods as they were phased out of the market during the 2021
calendar year.
EBITDA improved with strong commercial performance, an
easing in certain raw material costs and increased production
volumes which improved manufacturing cost recoveries.
Positive product mix contributed to the improved margins,
with lower volumes of non-branded product sales into industrial
markets and increased sales of differentiated products from
the Century and Surf (acquired portfolio) range.
23
Nufarm Limited | Annual Report 2021 Operating and Financial Review continued
Seed Technologies
The seed technologies segment includes sales of seed and
downstream products managed by the Nuseed business and
seed treatment products.
The change in corporate reporting periods results in the majority
of Nuseed’s full year earnings now falling within the first half
of the financial year.
Underlying EBITDA of $46 million represented an improvement
of 57 per cent over the proforma comparative period, with
higher sales and gross profit margins the primary drivers
of the improvement.
Revenues increased 21 per cent on the comparative period with
strong volume growth from new hybrid seed varieties, product
launches for Omega-3 Canola and Carinata, and a return
to more normal seasonal conditions in Australia driving
significantly higher endpoint royalty income on FY20 canola
sales. Nuseed’s leading market share position in Australian
canola continues to strengthen.
Margin improvement resulted from a more profitable product
mix, with the increased share of hybrid canola in Australia
and stronger sales of higher margin sorghum and sunflower
products in USA and South America. European sunflower
sales and margin were, however, adversely impacted by
Covid-19 related logistics and cost impacts. Overall, global
seed treatment sales and margins declined slightly year over
year with lower sales in the European and APAC regions; offset
partially by initial sales and strong margins from the Trunemco
launch in North America.
The Covid-19 related reduction in food service demand for salmon
resulted in lower than anticipated full year sales of Aquaterra®
(Nuseed’s Omega-3 Canola oil for aquaculture use) to Chilean
aquaculture customers. Positive use experience, repeat orders
and stronger demand from new customers was experienced in
the second half of the year as Chilean salmon markets started to
recover. Nuseed expects to recommence commercial plantings
of its Omega-3 Canola in calendar year 2022.
Results from a human clinical trial for Nutriterra® (Nuseed’s
Omega-3 Canola oil for human nutrition markets) were received
during the year, confirming the product’s safety and efficacy
as a novel plant-based source of total omega-3 nutrition. The
results of this trial will support ongoing discussions relating
to the commercialisation of Nutriterra®. Recognition was also
received from the FDA for Nuseed Omega-3 as a New Dietary
Ingredient in August 2021.
During the year, Nuseed further scaled production of its
proprietary Carinata oilseed cover crop in Argentina. Carinata
is a non-food cover crop for certified sustainable low-carbon
fuel production. Carinata grain was delivered to off-take partner
Saipol, in Europe, for processing, where it is marketed under
the Renewable Energy Directive regulatory framework.
Outlook
The outlook for soft commodity prices remains positive and
improved seasonal conditions in key grain producing regions
is resulting in strong demand for crop protection products.
• An underlying effective tax rate which is materially in line with
the current year assuming the mix of geographical earnings
is consistent with FY21
Increasing cost of raw materials as well as global logistics and
supply chain challenges, will continue to pressure margins
however we expect price increases and volume growth will
provide an offset.
Strong demand and channel restocking is likely to create earlier
than normal sales as customers look to secure supplies.
With the change in our financial year end the seeds business now
delivers the bulk of its earnings in the first half. High commodity
prices are driving strong demand for canola, sunflower and
sorghum seed. As Covid-19 restrictions reduce, and the salmon
market further recovers, we expect expanded adoption of
Aquaterra. As such, we intend to re-commence commercial
plantings of Omega-3 canola in calendar year 2022. Fundamental
market trends are supportive of expanded demand for Carinata
as a low carbon fuel feedstock. Nuseed intends to expand
commercial plantings of Carinata in calendar year 2022.
For the full FY22 financial year, assuming consistent currency
translation to FY21, the Group is projecting:
• Depreciation and amortisation to be materially in line with the
year ended 30 September 2021
• Increased capital expenditure to approximately $190 million
as Covid restrictions continue to ease with carry over
capital expenditure from FY21 and targeted investments
in growth opportunities
An update on trading conditions will be provided at the Annual
General Meeting to be held on Friday 17 December 2021.
Basis of preparation of selected proforma
financial information for non-statutory
reporting periods (‘proforma’)
With the exception of the calculation of proforma Underlying
net profit/(loss) after tax, the proforma financial information
presented in this report has been measured using the
accounting policies of the Group in place at 1 October 2020
including the retrospective impact of the change in accounting
policy detailed in note 3(a)(ii) to the financial statements.
The proforma Underlying net profit/(loss) after tax has been
measured by reference to proforma underlying EBIT less net
external interest less net foreign exchange losses multiplied
by the underlying (pre material items) effective tax rate for the
12 months ended 31 July 2020. The information is presented
on a continuing basis and adopts certain non-IFRS measures
of the group, defined herein. The proforma information does not
provide information regarding material items due to the inherent
complications associated with reliably measuring statutory
measures on a continuing basis, at a point in time in a financial
year that had not been subject to review or audit. The pro-forma
information has not been subject to review or audit.
24
Nufarm Limited | Annual Report 2021
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. 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 on a continuing basis.
Operating profit reconciliation
Underlying EBITDA
add Depreciation and amortisation excluding material items
Underlying EBIT
Material items impacting operating profit
Operating profit
12 months
ended
30 Sep 2021
$000
Restated*
2 months
ended
30 Sep 2020
$000
361,107
(208,007)
153,100
3,877
156,977
(47,191)
(33,817)
(81,008)
(6,862)
(87,870)
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii) to the financial statements.
(3) Non-IFRS measures are defined as follows:
Term
Underlying EBIT
Underlying EBITDA
Underlying net profit after tax
Gross profit margin
Underlying SG&A
Net external interest
ROFE
Net debt
Net working capital
Definition
Earnings before net financing costs, taxation and material items.
Underlying EBIT before depreciation and amortisation.
Profit/(loss) for the period attributable to the equity holders of Nufarm Limited excluding
material items.
Gross profit as a percentage of revenue.
Sales, marketing and distribution expenses plus general and administrative expenses less
material items.
Comprises other financial income, interest expense – external/debt establishment transaction
costs and lease expense – finance charges as described in note 10 to the 30 September 2021
Annual Report.
12 months rolling underlying EBIT divided by the average of opening and closing funds
employed (total equity plus net debt).
Total debt less cash and cash equivalents.
Current trade and other receivables, non-current trade receivables/trade finance receivables
and inventories less current trade and other payables.
Underlying net operating cash flow
Net cash from operating activities excluding material items.
Underlying net investing cash flow
Net cash from investing activities excluding material items.
Average net working capital
Net working capital measured at each month end as an average over the last 12 months.
ANWC/Sales (%)
Leverage
Gearing (%)
Average net working capital as a percentage of the last 12 months revenue.
Net debt/rolling 12 months underlying EBITDA.
Net debt/(net debt plus equity).
Underlying income tax benefit/(expense)
Income tax benefit/(expense) excluding material items.
Underlying effective tax rate
Underlying income tax benefit/(expense) divided by underlying net profit after tax.
Constant currency
References to constant currency indicate a comparison removing the impact of exchange rates.
It is the 12 months ended 30 September 2021 translated at the corresponding monthly exchange
rates over the 12 month period ending 30 September 2020.
25
Nufarm Limited | Annual Report 2021 Operating and Financial Review continued
Key risks
A summary of the material risks that could impact the achievement of Nufarm’s business objectives is included
below. The Group’s processes for managing risk are set in the Group’s Corporate Governance statement which
is available in the corporate governance section of our website, www.nufarm.com/CorporateGovernance.
The risks below are set out in no particular order. There are interdependencies between them and so an increased exposure for one
risk may elevate the exposure of other risks. Nufarm may be impacted by other more general risks that Australian businesses with
global operations may face as well as emerging risks that are not listed below.
Strategic context
What this means for Nufarm Ltd
(risk/uncertainty)
How this is being managed
Strategic growth (medium to long term)
Climate change
As an input supplier to global agriculture, demand for crop protection products and seed solutions is influenced by climatic
conditions that help determine the timing and extent of cropping activity as well as weed, pest and disease pressures.
Refer to the Environmental, Social & Governance section of this report for further details on Nufarm’s climate-related risks and how
they are being managed.
Demand for new/different products and
supporting manufacturing capability
Continually evolving our product
portfolio and customer strategy
Regulatory policies can have an impact on
the availability and usage of crop protection
products and, in some cases, can result in
the restriction or removal of certain products
from the market, which may have a material
adverse effect on the financial performance
of Nufarm.
Over time, our synthetic crop protection
products may become less commercially
viable in certain markets. This may bring
the opportunity to increase our biological
and other sustainable solutions presence
in those markets.
This may require re-alignment of our
manufacturing footprint which will require
capital investment to ensure we have the
manufacturing capability to produce new
products that are pivotal to our growth.
If the manufacturing footprint is not aligned
to product portfolio, there is a risk that
Nufarm’s assets will be under-utilised and/or
not ready to manufacture new product lines,
thereby impacting our financial performance.
• All product development is aligned
to Nufarm’s strategic focus on key
geographies and crops. This is supported
by centralised systems and processes
to approve and monitor development
activities and provide ongoing support
and technical advice to the marketing
and commercial functions.
• The Nufarm portfolio team conducts
regular assessments of advancements
in application technology and product
development. This is a key input to the
product development pipeline and
participation in potential partnerships
with third parties with access
to alternative technologies.
• Nufarm monitors regulatory developments
across its key regions of operations closely
and completes detailed regulatory risk
scenario analysis biannually. The Nufarm
portfolio team considers this analysis
in the maintenance and ongoing
development of our portfolio.
• Nufarm participates in several industry
bodies and task forces which provide input
and analysis to regulatory bodies on the
use of our key products.
Alignment of manufacturing capability
• Assessment of the viability of our
manufacturing footprint is completed
on an ongoing basis. This has resulted
in some investment, such as the newly
commissioned formulation facility
in Greenville, USA and divestment
in manufacturing capability in Australia
and Austria.
• Capital plans developed to support
replacement of ageing plant and
preventative maintenance programs
have been established to minimise
production downtime.
Regulation and market access
The crop protection industry is
highly regulated with government
controls and standards imposed
on all aspects of the industry’s
operations. Crop protection
products are subject to regulatory
review and approval in all markets
in which they are sold, with the
requirements of regulatory
authorities varying from country
to country. Europe, in particular,
is highly regulated and there is
increasing political influence on the
regulatory system. This is increasing
the uncertainty in predicting
regulatory outcomes.
In relation to seed, Omega 3 trait
presence in canola is also highly
regulated in many markets across
the globe (e.g. China).
Continued legal and community
focus on the impact of crop
protections products has been
increasing, particularly in the
US which may give rise to increased
litigation risk in personal bodily
injury class actions.
26
Nufarm Limited | Annual Report 2021 Strategic context
What this means for Nufarm Ltd
(risk/uncertainty)
Post-pandemic economic
& geo-political uncertainty
Whilst the impact of Covid-19 has
not been significant on our business
operations, the flow-on effect of this
pandemic on how and where the
global population lives and works
remains to be seen. Uncertainties
around economic policy-setting
and the geo-political environment
will impact movements around
the globe and previously well-
established supply chains may
continue to be disrupted. The cost
of capital may potentially increase.
Capability to execute strategy
Inability to operationalise our strategy
could result in loss of market share and
variability in our earnings.
• Capital – Nufarm’s manufacturing footprint
may require capital investment to ensure
we have the manufacturing capability
to produce new products that are pivotal
to our growth.
• Supply chain – Our growth depends
on getting our products between Nufarm
global locations and to customers
efficiently and effectively. Freight and
logistics availability and supply generally
may become increasingly harder and
costlier to do which may negatively impact
our financial performance. Supply chain
partners may cease to exist or financial
pressure may drive others to take shortcuts
that impact their quality of service or integrity.
• Workforce capability – The Covid-19
pandemic will continue to change how
people work and what they do for work.
Executing our strategy will mean
strengthening existing functions and
introducing new processes/functions. If we
can’t retain or attract existing and new skills,
there is a risk that these processes and
functions will not operate at the standard
that will be required to execute our strategy.
How this is being managed
Continually monitoring our
operational capability
• The Finance team is reviewing Nufarm’s
capital management principles against our
longer-term objectives and also Nufarm’s
capital structure.
• The manufacturing capital expenditure
plan is reviewed annually as part of the
budgeting process.
• The Procurement team is undertaking
a number of reviews to improve
diversification of supply and reduce
key dependencies.
• Suppliers operating in high-risk jurisdictions
are subject to Ecovadis risk assessments.
• The People Plan and HR strategic priorities
are set annually and monitored throughout
the year.
• An annual talent showcase and
succession planning processes ensure
that key roles/competencies are identified
and managed.
Risk/uncertainty inherent in Nufarm’s operations
How we are managing this
Operational continuity (what we do)
Weather volatility – seasonality
The timing of weather seasons in the geographies in which
Nufarm operates is uncertain and varies from year to year.
Consequently, there is a risk that unusually early or late seasons
may have a negative impact on demand for Nufarm products
in a particular year and therefore its financial performance.
Weather volatility – physical damage
An increase in extreme weather events as a result of changing
climatic conditions could also result in operational disruptions,
such as physical damage to our manufacturing facilities
or disruption to our supply chain for key raw material inputs
or delivery of finished goods to our customers.
Significant disruption to our manufacturing facilities could
materially impact production and our financial performance.
• Nufarm’s operations are global, providing geographic
diversification to climatic and seasonality risks and our
product portfolio is diverse, supporting a wide range
of agricultural applications.
• At an operating level, Nufarm’s business planning processes
incorporate forecasting and supply planning based on
typical weather conditions. These plans are reviewed on
an ongoing basis as the seasons progress to align supply
with changing demand.
• Nufarm maintains a comprehensive insurance program
which is supported by continuity strategies across our
global manufacturing footprint and key suppliers.
• Arrangements have been established with key toll
manufacturers to support our internal manufacturing capability.
27
Nufarm Limited | Annual Report 2021 Operating and Financial Review continued
Risk/uncertainty inherent in Nufarm’s operations
How we are managing this
Third party supply interruptions
Nufarm relies on supply of various active ingredients,
intermediates and other inputs from a number of third-party
suppliers, including suppliers based in China. The reliability
of supply and the cost of these inputs can be impacted by
a range of factors including, but not limited to, manufacturing
closures or temporary disruptions, compliance with more
stringent environmental and/or safety standards, and other
changes in government policy or regulation.
Significant interruptions can impact our ability to fulfil orders
which may ultimately increase our costs.
• Nufarm’s procurement and integrated business planning
processes include the ongoing assessment of supply
availability as input to manufacturing and safety stock levels.
• Where possible, we have entered into specific supply
arrangements to assist with availability and pricing of key
active ingredients.
• Alternate supply arrangements have been established, where
permitted under regulatory requirements.
• Our manufacturing facilities are geographically aligned with
distribution to minimise disruption to supply.
Cyber-attack/unauthorised access
• Nufarm has made significant investment in IT systems,
infrastructure and capability to support the efficient operation
of the business. This investment has included a global
integrated business planning system, new financial system
across Europe, significant uplift in our customer platforms
and realignment to the Cloud for certain services to gain
access to improved technology and capability.
• Nufarm has implemented disaster recovery strategies over
its key IT systems, applications and data centres, which are
reviewed and tested on a regular basis.
• Cyber threats are assessed on an ongoing basis to the best
of our knowledge based on the continually evolving nature of
these threats. Security controls are updated to mitigate these
risks supported by a combination of external and internal
vulnerability testing.
• Critical roles across the organisation have been identified and
appropriate succession and retention strategies developed.
• Guidelines for remuneration and reward have been developed
to ensure Nufarm can attract and retain talent.
Nufarm’s operations are supported by several key IT systems
and applications. Complete or partial failure of the IT systems,
applications or data centre infrastructure due to unauthorised
access, cyberattacks or natural disasters could have a
significant impact on Nufarm’s ability to maintain operations
and service customers. This could adversely impact Nufarm’s
financial position and/or reputation.
Loss of key personnel
The loss of key personnel or the inability to recruit and retain or
motivate high calibre staff could have a material adverse effect
on Nufarm. Nufarm operates globally and has facilities in
multiple jurisdictions. Management of a complex business that
operates globally has a higher employee risk/complexity than a
business which operates in one jurisdiction. The addition of new
employees and the departure of existing employees, particularly
in key positions, can be disruptive and could have an adverse
effect on Nufarm and may impact Nufarm’s financial
performance and future prospects.
Operational sustainability & compliance (how we do it)
Safety incident
Operation of Nufarm’s manufacturing sites across the globe
require major hazard facility licences. Operating within these
environments can lead to personal injury, loss of life or damage
to property. Regulatory bodies undertake regular audits of
Nufarm’s sites to ensure that it is appropriate to renew the
licences. These audits can result in suspension of operations,
fines or penalties or remediation expenses.
• A robust and comprehensive Health, Safety and Environment
(HSE) program is in place which provides clear guidance
on culture, behaviours, process, metrics and reporting.
• This program includes the ongoing audit and assessment
of HSE risks and practices.
• A program of regular reporting at a local, regional and
global level is in place, including quarterly reporting to the
Executive Management and Board.
Covid-19 has heightened fatigue amongst our staff, in particular
those living in areas of prolonged lockdowns and restrictions.
• Close monitoring of Covid-related fatigue by
Executive Management.
• Wellbeing seminars, encouragement of leave-taking
and a range of other Covid-related fatigue support
measures are in place and continue to be advocated
throughout the organisation.
28
Nufarm Limited | Annual Report 2021 Risk/uncertainty inherent in Nufarm’s operations
How we are managing this
Environmental damage
Nufarm operates in a regulatory environment that establishes
high standards in terms of environmental compliance. Any
material failure by Nufarm to adequately control hazardous
substances and manufacturing operations, including the
discharge of waste material, or to meet its various statutory
and regulatory environmental responsibilities, could result
in significant liabilities as well as ongoing costs relating
to operational inefficiencies which may arise.
• Environmental risk assessments have been completed across
all our key operational sites and guidelines on the management
of environmental risks aligned to ISO 14001 on environmental
management systems have been implemented.
• Local management engage with local environmental
authorities on key risks and compliance.
Product contamination/quality
Nufarm manufactures and supplies a range of crop protection
products and seed solutions which must be manufactured,
formulated and packaged to exact standards, with strict quality
controls. The performance of those products would be
negatively impacted if those quality standards are not met and
this could, in turn, have an adverse impact on the reputation and
success of Nufarm.
• Quality guidelines and procedures are defined across the
manufacturing process, including external tolling activities.
This includes a detailed contamination prevention program
with associated procedures.
• Manufacturing processes are subject to rigorous testing
to ensure quality standards are met and an ongoing review
program is in place with the aim of ensuring operations
adhere to the quality standards.
Compliance breach
Nufarm’s global footprint requires compliance with government
legislation and regulations across all the countries within which
we are established to maintain our licenses to operate. New
legislation or changes to requirements could have an adverse
impact on our operations, financial position or relationship with
key customers and suppliers. This includes requirements
relating to occupational health and safety, environment, product
registration, sanctions and anti-bribery, data privacy, taxation
and review of contractual obligations with key suppliers and
customers. Geopolitical risks such as changes to tariffs and
sovereign risk impacting the political stability of certain countries
we operate in could impact the price and volume of agricultural
products traded in these regions.
• Policies and procedures have been developed supporting
legislative and regulatory compliance. Nufarm’s Code of
Conduct provides overarching guidance on behaviours and
is supported by procedures for sanction implications, ethical
sourcing and management of sensitive personal data.
• Nufarm also maintains a dedicated internal legal team
across its key regional operations, which is supported
externally as required, to provide input on key legislative
and regulatory compliance.
• Nufarm’s internal tax department has developed specific
guidance on the group’s tax strategy and policies to ensure
compliance and alignment with tax authorities on the
treatment of transactions.
• Nufarm has an online global whistleblower program to allow
employees to report any unethical, illegal or fraudulent behaviour.
Financial exposures (how we fund what we do)
Debt financing
Nufarm has significant short term bilateral funding and supplier
financing facilities to fund its working capital requirements.
Continued access to these facilities is dependent upon
compliance with relevant banking covenants and the successful
renewal of these facilities as and when they fall due. Nufarm’s
ability to refinance its debt obligations, and the terms on which
any such refinancing can be obtained, is uncertain. If Nufarm
is unable to refinance its debt obligations, or to do so on
reasonable terms, it may have an adverse effect on the financial
position and performance of Nufarm.
Foreign exchange exposure
Global crop protection companies such as Nufarm purchase
inputs and determine selling prices in a range of international
currencies and are therefore exposed to fluctuations in
exchange rates. Further, a substantial portion of Nufarm’s
revenues, costs, assets and liabilities are denominated in
currencies other than Australian dollars. As a result, exchange
rate movements affecting these currencies may impact the
financial performance and future prospects of the business
of Nufarm.
Working Capital Management
Effective management of working capital is a key operational
priority across the group and is impacted by factors such as
changing customer demand as a result of seasonality and
climatic conditions, changes in customer credit profiles and
supply constraints.
• A clearly defined funding strategy is in place which includes a
diversified funding structure with a range of debt maturity profiles.
• Board and executive oversight is in place to monitor ongoing
compliance with key banking covenants and facilitate the early
identification of any covenants under stress.
• Further details on strategies to manage liquidity, credit
and market risk is included in note 27 of the Consolidated
Financial Statements.
• Nufarm has implemented a range of financial risk
management policies and procedures to assist with the
management of foreign exchange exposure. The group
treasury function manages financial risks in accordance with
these policies. Where possible, currency and interest rate risk
is managed through hedging strategies (refer note 27 of the
Consolidated Financial Statements).
• Policies and procedures have been developed to support the
management of customer credit, inventory and procurement.
• Nufarm’s procurement and integrated business planning
processes provide a focus on working capital management
regionally and globally. This is supported by an investment
in systems and data analytics to provide timely data on key
working capital drivers.
• Performance metrics supporting working capital management
have been defined at a global and regional level and included
in individual objectives and performance related remuneration
for senior management.
29
Nufarm Limited | Annual Report 2021 Board of Directors
John Gillam BCom, MAICD, FAIM (Chairman)
Independent Non-executive Director
Other directorships and offi ces (current and recent):
John Gillam joined the Board on 31 July 2020 and was
appointed Chairman on 24 September 2020.
• Chairman of CSR Limited (Director since December
2017 and Chairman since 1 June 2018)
John has extensive commercial and leadership
experience from a 20-year career with Wesfarmers
where he held various senior leadership roles including
CEO of the Bunnings Group, Managing Director of
CSBP and Chairman of Offi ceworks.
• Chairman of BlueFit Pty Limited (since February 2018)
• Director of the Heartwell Foundation (since 2009)
• Director of Clontarf Foundation (since 2017)
• Former Director of Trinity Grammar School (from
June 2018 until June 2021)
Board Committee memberships:
• Chairman of the Nomination Committee
Greg Hunt Managing Director and Chief Executive Offi cer
Non-independent Executive Director
Greg Hunt joined the Board on 5 May 2015.
Greg joined Nufarm in 2012 and was Group Executive
Commercial Operations prior to being appointed
acting chief executive offi cer in February 2015.
Greg has considerable executive and agribusiness
experience. Greg had a successful career at Elders before
being appointed managing director of Elders Australia
Limited, a position he held between 2001-2007. After
leaving Elders, Greg worked with various private equity
fi rms focussed on the agriculture sector and has acted
as a corporate advisor to Australian and international
organisations in agribusiness related matters.
Gordon Davis BForSc, MAgSc, MBA
Independent Non-executive Director
Other directorships (current and recent):
Gordon Davis joined the Board on 31 May 2011.
• Director of Healius Limited (formerly Primary Health
Gordon was Managing Director of AWB Limited (from
2006 to 2010) and has held various senior executive
positions with Orica Limited, including General Manager
of Orica Mining Services (Australia, Asia) and General
Manager of Incitec Fertilisers. He has also served in
a senior capacity on various industry associations.
Care Limited) (since August 2015)
• Director of Midway Limited (since April 2016)
Board Committee memberships:
• Chairman of the Risk and Compliance Committee
• Member of the Audit Committee
• Member of the Human Resources Committee
• Member of the Nomination Committee
Frank Ford MTax, BBus (Acc), FCA
Independent Non-executive Director
Board Committee memberships:
Frank Ford joined the Board on 10 October 2012.
• Member of the Nomination Committee
• Member of the Audit Committee
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.
Dr David Jones BA (Hons) Science, PhD
Independent Non-executive Director
Other directorships (current and recent):
David Jones joined the Board on 23 June 2021.
• Chairman of Enko Chem Inc (since July 2021)
David has held Chairman and Director roles in large
global agricultural business. His experience includes as
Head of Business Development at Syngenta and former
Chairman of Zeneca China, Arysta Life Science, and
Plant Impact. David has broad leadership experience
in operations, strategy, mergers and acquisitions and
intellectual property in multiple jurisdictions including
Asia, Latin America, Europe and the United States.
• Chairman of BigSis (since 2020)
• Former Chairman of Commercial Advisory Board
of Enko Chem Inc (2019 to July 2021)
Board Committee memberships:
• Chairman of the Innovation Committee
• Member of the Nomination Committee
30
Nufarm Limited | Annual Report 2021
Peter Margin BSc(Hons), MBA
Independent Non-executive Director
• Director of Bega Cheese Limited (from June 2011
Peter Margin joined the Board on 3 October 2011.
to January 2019)
Peter has many years of leadership experience in major
Australian and international food companies including
Chief Executive of Goodman Fielder Ltd and before that
Chief Executive and Chief Operating Offi cer of National
Foods Ltd.
Other directorships (current and recent):
• Deputy Chairman of Bega Cheese Limited
since September 2020)
• Former Director of PACT Group Holdings Limited
(from November 2013 to 14 August 2019)
• Former Chairman of Asahi Holdings (Australia) Pty Ltd
(to December 2020)
Board Committee memberships:
• Chairman of the Human Resources Committee
• Member of the Risk and Compliance Committee
• Member of the Nomination Committee
• Director of Costa Group Holdings Limited
• Member of the Innovation Committee
(since June 2015)
Marie McDonald LLB(Hons), BSc(Hons)
Independent Non-executive Director
Other directorships (current and recent):
Marie McDonald joined the Board on 22 March 2017.
• Director of CSL Limited (since 14 August 2013)
Marie is widely recognised as one of Australia’s leading
corporate and commercial lawyers having been a Senior
Partner at Ashurst until 2014 where she specialised in
mergers and acquisitions, corporate governance and
commercial law.
Marie was Chair of the Corporations Committee of the
Business Law Section of the Law Council of Australia
from 2012 to 2013, having previously been the Deputy
Chair, and was a member of the Australian Takeovers
Panel from 2001 to 2010.
• Director of Nanosonics Limited
(since 24 October 2016)
• Director of Walter and Eliza Hall Institute of Medical
Research (since October 2016)
• Member of Melbourne University Law School
Foundation Board (since October 2021)
Board Committee memberships:
• Member of the Nomination Committee
• Member of the Audit Committee
• Member of the Risk and Compliance Committee
• Member of the Innovation Committee
Lynne Saint BCom, GradDip Ed Studies, FCPA, FAICD
Independent Non-executive Director
Other directorships (current and recent):
Lynne Saint joined the Board on 18 December 2020.
• Director of Iluka Resources (since 24 October 2019)
Ms Saint has broad fi nancial and commercial
experience from a global career including more than
19 years with Bechtel Group where she served as
Chief Audit Executive and Chief Financial Offi cer of
the Mining and Metals Global Business Unit. Her
expertise encompasses strong fi nancial skills, corporate
governance, enterprise risk, supply chain risk and
project management.
• Director of Ventia Services Group Limited
(since 25 October 2021)
Board Committee memberships:
• Chairman of the Audit Committee
• Member of the Human Resources Committee
• Member of the Nomination Committee
Toshikazu Takasaki BBA
Non-independent Non-executive Director
Toshikazu Takasaki joined the Board on 6 December 2012.
by the Japanese Ministry of Economy, Trade and Industry
as a small and medium sized Enterprise Consultant.
Mr Takasaki represents the interests of shareholder
Sumitomo Chemical Company (SCC).
He brings broad industry and international experience
to the Board.
He is a former executive of SCC holding senior
management positions in businesses relating to crop
protection, both within Japan and in the US. He is now a
business consultant with a national qualifi cation registered
Board Committee memberships:
• Member of the Risk and Compliance Committee
• Member of the Nomination Committee
Fiona Smith Group General Counsel and Company Secretary BSc, LLB, GDipGov, FGIA
Fiona joined Nufarm on 20 June 2019 and was
appointed Company Secretary on 27 June 2019.
Fiona is a senior legal and governance professional
with 20 years’ experience in Company secretarial
roles arising from her time spent in such roles in
listed companies.
Fiona reports directly to the Board. She holds a
Bachelor of Science and Bachelor of Law from the
Australian National University and a Graduate Diploma
in Applied Governance.
Nufarm Limited | Annual Report 2021
31
Key Management Personnel
Greg Hunt Managing Director and Chief Executive Officer
Non-independent Executive Director
Greg Hunt joined the Board on 5 May 2015.
Greg joined Nufarm in 2012 and was Group Executive Commercial Operations prior to being appointed acting
chief executive officer in February 2015.
Greg has considerable executive and agribusiness experience. Greg had a successful career at Elders before
being appointed managing director of Elders Australia Limited, a position he held between 2001-2007. After
leaving Elders, Greg worked with various private equity firms focussed on the agriculture sector and has acted
as a corporate advisor to Australian and international organisations in agribusiness related matters.
Elbert Prado Group Executive Manufacturing and Supply Chain
Elbert joined Nufarm in July 2013. He has extensive international experience in senior operations roles within
the chemical industry, including as Global Manufacturing and Supply Chain director for Rohm and Haas.
Elbert has a strong focus on safety, supply chain and manufacturing excellence.
Paul Townsend Chief Financial Officer
Paul Townsend joined Nufarm in December 2020, whose 30-year career record spans across a variety
of industries and includes CFO roles with Asaleo Care, Pacific Hydro, Futuris Automotive Group and most
recently Monash University.
32
Nufarm Limited | Annual Report 2021 Corporate Governance Statement
1 Introduction
2 Board of directors
Nufarm is committed to ensuring that its policies
and practices reflect a high standard of corporate
governance. The Board considers that Nufarm’s
governance framework and adherence to that
framework are fundamental in demonstrating that
the Directors are accountable to shareholders, are
appropriately overseeing the management of risk
and promoting a culture of ethical, lawful and
responsible behaviour within Nufarm.
This section of the Annual Report outlines the governance
framework of Nufarm Limited and its controlled entities
(Nufarm or Company) for the year ended 30 September 2021.
During FY2021, the Board continued its structured succession
process taking into consideration the current skills on the Board
and the expected requirements into the future. During the year,
Anne Brennan retired from the Board with Lynne Saint and Dr
David Jones being appointed as independent Non-executive
Directors in December 2020 and June 2021 respectively.
The Board reviewed the Board Charter and Committee structure
to ensure they remain appropriate for Nufarm. This resulted in
the establishment of an Innovation Committee, the formalisation
of the Risk and Compliance Committee’s role in overseeing
Environment Social and Governance matters and the responsibility
of the overall corporate governance practices of the Company
being allocated to the Board with the Nomination and Governance
Committee changing its name to the Nomination Committee.
Further details of these changes can be found in Section 3
of this Statement.
The Board also continued its governance focus approving
a Climate Change Policy, formalising the Conflicts of Interest
Policy for Directors and Officers and introducing a Minimum
Shareholding Policy for Non-executive Directors. All other
governance policies continued to be reviewed on an annual
basis to ensure they continue to reflect a high standard of
corporate governance and comply with the ASX Corporate
Governance Principles and Recommendations (ASX Principles).
Nufarm, as a listed entity is required to comply with the
Corporations Act (Cth), the ASX Listing Rules and other
Australian and international laws and is required to report
on the extent to which it has complied with the ASX Principles.
During FY2021 Nufarm complied with the fourth edition of the
ASX Principles.
Nufarm’s key governance documents, including the
Constitution, Board and Board Committee Charters and key
policies are available in the Corporate Governance section
of Nufarm’s website.
The Corporate Governance Statement is current as at
17 November 2021 and has been approved by the Board.
2.1 Board role and responsibilities
The Constitution provides that the business and affairs of
Nufarm are to be managed by or under the direction of the
Board. Ultimate responsibility for governance and strategy
rests with the Board. The role of the Board is to represent
shareholders, and to demonstrate leadership and approve
the strategic direction of Nufarm. The Board is accountable
to the shareholders for the Company’s performance and
governance. At the 2020 Annual General Meeting shareholders
approved a new Constitution that reflects current market
practice and terminology.
The Board has adopted a formal Board Charter which was
reviewed during 2021 and sets out the Board’s key responsibilities,
the matters the Board has reserved for its own consideration
and decision making and the authority it has delegated to the
Managing Director and Chief Executive Officer (CEO). The
Board’s responsibilities, as set out in the Board Charter, include:
• appointment and termination of the CEO and the Company
Secretary and ratification of the appointment of the Chief
Financial Officer (CFO) and Key Management Personnel
(KMP) and the terms of their employment contracts including
termination payments.
• approving the remuneration policies and practices of the
Board, the CEO and the CEO’s direct reports.
• approving commitments, capital and non-capital items,
acquisitions and divestments above authority levels delegated
to the CEO.
• approving the overall capital structure of Nufarm including any
equity related transactions and major financing arrangements.
• approving the annual and half year financial and director
reports including the full year operating and financial review,
remuneration report and corporate governance statement.
• approving the dividend policy and determining the dividends
to be paid.
• approving management’s development of corporate strategy.
• reviewing and approving the annual budget, strategic
business plans, balance sheet and funding strategy.
• approving the succession plans and processes for the
Chairman, Directors, CEO and the CEO’s direct reports.
• approving the Diversity and Inclusion Policy and measurable
objectives for achieving diversity across Nufarm and
monitoring progress in achieving those objectives.
• approving governance practices and policies including
Continuous Disclosure Policy, Code of Conduct, Anti-bribery
Policy and Whistleblower Policy.
• approving ASX releases as set out in the Continuous
Disclosure Policy.
• appointing the Chairman of the Board.
• appointing Directors to casual vacancies and recommending
their election to shareholders at the next Annual General Meeting.
A copy of the Board Charter which sets out the role and
responsibilities of the Board in more detail can be found in the
Corporate Governance section of Nufarm’s website.
33
Nufarm Limited | Annual Report 2021 Corporate Governance Statement continued
Delegation to management
The Board has delegated to the CEO responsibility for the
day-to-day management of the Company’s affairs and
implementation of the strategic objectives, the annual budgets
and policy initiatives. The CEO is accountable to the Board for
all authority delegated to management and for the Company’s
performance. The CEO is required to operate in accordance
with Board approved policies and delegations of authority and
management must supply the Board with information in a form,
timeframe and quality that will enable the Board to discharge
its duties effectively. The CEO is required to report to the Board
in a spirit of openness and trust and is required to ensure that
all decisions are made lawfully, ethically and responsibly.
2.2 Board meetings and attendance
The Board meets as often as required. During the reporting
period, the Board met 11 times including a strategy Board
session. While regularly scheduled meetings are generally held
face to face, this year, most meetings were held virtually or as
hybrid meetings due to the impact of the Covid-19 pandemic.
In addition to the Company Secretary, the CFO regularly attends
all Board meetings by invitation. Other members of management
attend meetings by invitation. During regularly scheduled
meetings, the Board holds a closed session (attended by
Non-executive Directors only), which provides Non-executive
Directors with an opportunity to raise issues in the absence
of management.
Details of attendance at Board and standing Board committee
meetings during FY2021 can be found in the Annual Report
on page 53.
Key Activities undertaken by the Board during
the year
The Board considered a range of matters during FY21, including:
• reviewing and agreeing to adopt an updated Board Charter,
Audit Committee Charter, Risk and Compliance Committee
Charter, Nomination Committee Charter and the establishment
of an Innovation Committee and approving changes to
Committee memberships as required;
• agreeing to adopt a Climate Change Policy, Minimum
Shareholding Policy for Non-executive Directors and Conflicts
of Interest Policy;
• reviewing and agreeing to adopt updates to governance
policies including the Securities Trading Policy, Anti-bribery
and Anti-corruption Policy and Continuous Disclosure Policy;
• participating in the board succession process concluding with
the appointment of Lynne Saint as a Non-executive Director
from 18 December 2020 and Chair of the Audit Committee
from 1 July 2021 and appointment of Dr David Jones as a
Non-executive Director from 23 June 2021;
• participating with management in the annual review of strategy
and monitoring management’s execution of strategy;
• reviewing Nufarm’s capital structure;
• reviewing the delegation of authority to management to ensure
it remains appropriate;
• approving an equity investment in Enko Chem Inc, a US based
company discovering new small molecules in crop protection;
• overseeing the financial performance and key metrics of the
Company including receiving regular updates of the impact
of Covid-19 on the Company;
• overseeing the changes to the risk management system
including approving an updated Risk Management Policy
and Framework;
• ratifying the appointment of the Chief Financial Officer
and approving his remuneration package; and
• approving a new executive incentive plan for KMPs and
members of the Nufarm Leadership Team and the adoption
of new Equity Incentive Plan Rules.
2.3 Board composition
The Board currently has eight Non-executive Directors and
the CEO. Details of the Directors, including their qualifications,
experience, date of appointment and independent status are
set out in the Directors’ Report on pages 51–53 in the 2021
Annual Report. The Constitution provides that the Company
is not to have more than 11 or less than three Directors.
Sumitomo Chemical Company, as a major shareholder in
the Company, is entitled to have one nominee Director on the
Board. Toshikazu Takasaki is Sumitomo’s current nominee and
is therefore not considered independent.
In assessing the composition of the Board regard is given
to the following principles:
• the role of the Chairman and the CEO should not be filled
by the same person;
• the Chairman must be an independent Non-executive Director;
• the CEO must be a full-time employee of the Company;
• the majority of the Board must be independent Non-executive
Directors; and
• the Board should represent a broad range of qualifications,
experience, expertise and diversity.
Changes during the year
During the year, Anne Brennan retired at the conclusion of the
2020 Annual General Meeting and Frank Ford advised of his
intention to retire from the Board at the conclusion of the 2021
Annual General Meeting. The Board, with the assistance of the
Nomination Committee, actively progressed Board succession
planning during the year with the appointment of Lynne Saint
as a Non-executive Director on 18 December 2020 and as Chair
of the Audit Committee on 1 July 2021 and the appointment
of Dr David Jones as an independent Non-executive Director
on 23 June 2021 and Chair of the Innovation Committee
on 14 July 2021.
2.4 Director skills, experience and attributes
The key attributes that Directors must possess are set out in the
Board Charter and include:
• honesty, integrity and a proven track record of creating value
for shareholders;
• an ability to apply strategic thought;
• a preparedness to debate issues openly and constructively
and to question, challenge and critique;
• a willingness to understand and commit to the governance
framework of the Company; and
• an ability to devote sufficient time to properly carry out the role
and responsibilities of the Board.
34
Nufarm Limited | Annual Report 2021 Skills matrix
During FY2021, as part of the ongoing succession planning for the Board, the Nomination Committee continued to review the Board
skills matrix which took into consideration the skills and experience the Board currently requires but also the skills and experience that
will be required for the Company during its next phase of development. The Board skills matrix and the assessment of the current
Directors is included in the following table.
Skills/Experience
No of Directors
with skill
Manufacturing & Integrated Supply Chain Management in High Risk Environment
Relevant experience in international manufacturing and/or integrated supply chain management including demonstrated ability
to improve production systems
Customer Relations
Relevant international experience in customer service delivery and/or marketing of products, including brand marketing,
e-commerce and use of digital technology
Technology
Experience in R&D, seed technologies or emerging technologies including commercialisation
Agricultural Experience
Experience in crop protection or agricultural industry obtained through a large international company
Finance
Board audit experience or a senior executive or equivalent experience in financial accounting and reporting, corporate finance
and internal financial controls/audit
Risk
Relevant experience and understanding of risk management frameworks and controls, including HSEC and sustainability,
and the ability to oversee mitigation strategies and identify emerging risks
Mergers, Acquisitions, JVs, Partnerships, Alliances, Divestments & Integrations
Relevant experience in merger and acquisition transactions (including JV’s etc) raising complex financial, regulatory and
operational issues
Strategy and Transformation
Experience in developing and executing successful strategies and/or transformation in a complex environment to deliver
a sustained and resilient business
Corporate Governance and Compliance
Experience serving on boards in different industries, including publicly listed. Awareness of leading practice in corporate
governance and compliance with a demonstrated commitment to achieving those standards
Regulatory, Government, Public Policy
Relevant experience identifying and managing legal, regulatory, public policy and corporate affairs issues
People, Culture and Remuneration
Relevant experience overseeing or implementing a company’s culture and people management framework, including
succession planning and setting and applying remuneration policy and frameworks linked to strategy
Diversity
(as at 30 September 2021)
Tenure of Non-executive Directors
(as at 30 September 2021)
Female
Male
2
7
0–3 years
3–6 years
6–9 years
9+ years
3
1
2
2
6
7
6
7
9
9
8
7
8
7
8
35
Nufarm Limited | Annual Report 2021 Corporate Governance Statement continued
2.5 Chairman
The Chairman of the Board is John Gillam, an independent
Non-executive Director.
The Chairman is responsible for the leadership of the Board
and for encouraging a culture of openness and debate amongst
the directors to foster a high performing and collegiate board.
The Chairman also serves as the primary link between the
Board and management.
2.6 Board succession planning
The Board manages succession planning for Non-executive
Directors with the assistance of the Nomination Committee and for
the CEO with the assistance of the Human Resources Committee.
The Board has a Non-executive Director tenure policy that
provides for Non-executive Directors to retire after nine years
(or twelve years in the case of a Chairman who has served
in the role of Chair for less than six years) from the first date
of election of shareholders. The Board may in exceptional
circumstances, exercise discretion to extend the maximum
term where it considers such an extension is in the best
interests of the Company.
All Non-executive Directors are required to stand for re-election
every three years. The Nomination Committee will undertake
a review of the Directors retiring by rotation and make a
recommendation to the Board on whether their re-election is
to be supported. The Company provides all material information
in its possession concerning the director standing for re-election
in the notice of meeting and accompanying explanatory notes.
During FY2021 Anne Brennan retired as a Director at the 2020
Annual General Meeting. There were two Non-executive Director
appointments during the year with Lynne Saint being appointed
on 18 December 2020 and Dr David Jones on 23 June 2021.
The Board also considered Committee Chair succession with
the appointment of Lynne Saint as Chair of the Audit Committee
from 1 July 2021 following Frank Ford’s decision to retire from
the Board at the 2021 Annual General Meeting.
2.7 Director independence
The Board is committed to ensuring the majority of Non-
executive Directors are independent. The Board considers
Directors to be independent where they are independent of
management and free from any interest, position, association
or relationship that might influence or might reasonably be
perceived to interfere with the exercise of their unfettered and
independent judgement.
During FY2021 all Non-executive Directors, except for Toshikazu
Takasaki, who is a nominee of Sumitomo, a substantial
shareholder in the Company, were considered to be independent.
2.8 Conflict of interest
During FY2021 the Board formalised its procedure for dealing
with conflicts of interest by approving a Conflict of Interest Policy
to ensure that Directors disclose any conflicts of interest and that
any conflicts are appropriately addressed. In the event a Director
does have an actual or potential conflict, the director does not
receive the relevant Board or Committee papers and must
absent themselves from the room when the Board or Committee
discusses and votes on matters subject to the conflict. This
continues unless the other Directors resolve otherwise. The
Director cannot access the minutes of the Board or Committee
meeting in relation to the conflict.
The Board has in place an information exchange protocol with
Sumitomo Chemical Company to ensure that the Sumitomo
nominee Director can discharge their duties as a director while
also ensuring that they do not receive any competitive information
or participate in discussions regarding competitive information.
2.9 Director appointment, induction training and
continuing education
When considering new appointments to the Board, the
Nomination Committee oversees the preparation of a role
description which includes the key attributes identified in the
Board Charter and the relevant skills taking into account the
principles set out in section 2.3 and any gaps identified in the
Board skills matrix. This role description is normally provided to
an external search firm who assists in undertaking the search.
When suitable candidates are identified, the Nomination
Committee will interview a short list of candidates before making
a recommendation to the Board. All Directors will interview the
candidate prior to the Board considering formal appointment.
All Non-executive Directors on appointment are required to sign
a letter of appointment which sets out the terms and conditions
of their appointment including;
• duties and responsibilities of a Director;
• participation in induction training and continuing education;
• remuneration;
• expectation around time commitments for the Board
and relevant Committee meetings;
• the requirement to disclose Directors’ interests
on an ongoing basis;
• access to professional advice; and
• indemnity, access and insurance arrangements.
Prior to appointment all Directors, including any new Executive
Directors, are subject to extensive background and screening
checks. All new senior executive appointments are also subject
to extensive background and screening checks.
With the exception of the CEO, all Directors appointed by the
Board to a casual vacancy are required to stand for shareholder
election at the next AGM. The Company provides all material
information in its possession concerning the director standing
for re-election in the notice of meeting and accompanying
explanatory notes.
Induction training is provided to all new directors. This includes
discussions with the CEO, CFO, Company Secretary and other
senior executives and the option to visit the Company’s sites in
Australia on appointment or with the Board during an overseas
Board meeting. Induction materials include information on the
Company’s strategy and financial performance, full information
on the Board including all Board and Committee Charters,
recent Board and Committee minutes, information on the risk
management framework and the risk appetite statement
approved by the Board, all Board policies including the Code
of Conduct and the obligations of Directors.
All Directors are expected to undertake ongoing professional
development to develop and maintain the skills and knowledge
required to discharge their responsibilities. Directors are
provided with information papers and presentations on
developments in the law including continuous disclosure,
industry related matters and any new emerging developments
that may affect the Company.
36
Nufarm Limited | Annual Report 2021 2.10 Shareholding requirements for
Non-executive Directors
During FY2021 the Board introduced a Non-executive Director
Minimum Shareholding Policy which applies to all Non-executive
Directors except for any nominee Directors appointed to the
Board. The Policy requires that Non-executive Directors are
required to accumulate and then hold a minimum holding of
Nufarm securities equivalent to 100 per cent of their total pre-tax
annual base fee including superannuation. This minimum
holding is to be achieved within five years of appointment or for
those Non-executive Directors who were a member of the Board
at the date the Policy was adopted, within five years of the
adoption. Further details are set out in the Remuneration Report
on pages 55 to 74 of the Annual Report.
2.11 Board performance evaluation
The Board is committed to regularly reviewing its own performance
and effectiveness as well of those of the Committees and
individual directors. The Board conducted an externally
facilitated review during FY2020 which focused on Chairman
succession, board succession planning and board capabilities,
board calendar and papers, executive succession planning and
the structure of the Board Committees. All actions from this
review have been implemented.
During FY2021 the Board continued to monitor the effectiveness
of these changes to ensure they remained appropriate. As a
result, the responsibility for corporate governance practices
previously within the remit of the Nomination and Governance
Committee has been incorporated into the Board Charter with
the Nomination and Governance Committee being renamed the
Nomination Committee and membership expanded to include
all Non-executive Directors.
An assessment of director performance is undertaken by the
Nomination Committee with feedback sought from all Directors
prior to the Board considering recommending a director for
re-election to shareholders at an Annual General Meeting.
2.12 Independent professional advice
The Board and its Committees may access independent experts
and professional counsel for advice where appropriate and may
invite any person from time to time to attend meetings.
2.13 Company Secretary
The details of the Company Secretary, including their
qualifications, are set out in the Annual Report 2021 on page 53.
The appointment and removal of the Company Secretary is
a matter for the Board. The Company Secretary is accountable
to the board for the effectiveness of the implementation of the
corporate governance processes, adherence to the Board’s
principles and procedures and co-ordinates all Board and
Board Committee business, including agendas, papers,
minutes, communication and filings. All Directors have direct
access to the Company Secretary.
3 Committees
To assist the Board to carry out its responsibilities, the Board
has established an Audit Committee, a Risk and Compliance
Committee, a Human Resources Committee and a Nomination
and Governance Committee. During FY2021 the Board also
agreed to establish an Innovation Committee and changed
the name of the Nomination and Governance Committee to the
Nomination Committee.
Each of the permanent Committees has a Charter which sets
out the membership structure, roles and responsibilities and
meeting procedures.
Generally, these Committees review matters on behalf of the
Board and, as determined by the relevant Charter:
• refer matters to the Board for decision, with a recommendation
from the Committee; or
• determine matters (where the Committee acts with delegated
authority), which the Committee then reports to the Board.
The Company Secretary provides secretarial support
for each Committee.
In addition to the changes to the standing Committee structure
as outlined above, changes were made to the membership
of each Committee highlighted in the relevant section below.
3.1 Audit Committee
The role of the Audit Committee is to assist the Board in fulfilling
its responsibilities in respect of the Company’s financial statements,
the effectiveness of internal and external audit processes,
internal control systems, treasury and taxation practices and
compliance with relevant legal and regulatory and best practice
requirements within the responsibility of the Committee.
The Audit Committee has a Charter which sets out the roles and
responsibilities of the Committee in more details and can be
found in the Corporate Governance Section of Nufarm’s website.
During FY2021 the Audit Committee reviewed the Committee
Charter to ensure that it remains appropriate, operates
effectively and complies with best practice. As a result, the
Board approved an amendment to include treasury practices
as part of the Committee’s responsibilities.
Membership and meetings
The Audit Committee consists of:
• a minimum of 3 members of the Board, all of whom are
Non-executive Directors;
• a majority of independent Directors (as defined in the Board
Charter); and
• an independent chair, who is not Chair of the Board.
37
Nufarm Limited | Annual Report 2021 Corporate Governance Statement continued
The members of the Audit Committee during the reporting
period were:
Name
Membership status
Lynne Saint (Chairman)
Frank Ford
Anne Brennan
Gordon Davis
Member from 18 December 2020
and Chair (from 1 July 2021)
Chair (until 30 June 2021) and
member for the entire period
Member until 18 December 2020
Member for the entire period
Marie McDonald
Member for the entire period
At least one member of the Committee must have formal
accounting qualifications with recent and relevant experience.
The Committee as a whole is to have sufficient understanding
of the industry in which Nufarm operates. The Board is satisfied
that the current composition of the Committee satisfies
this requirement.
The external auditors, the Chairman, the CEO, the CFO, the
Group Financial Controller, the Head of Internal Audit (if
applicable), the Group Tax Manager, Group Treasurer and the
internal audit service provider partner attend meetings of the
Committee at the invitation of the Committee Chair. All Board
members are invited to attend all Audit Committee meetings.
Activities during the year
The key activities undertaken by the Audit Committee during
the year include:
• reviewing the scope, plan and fees for the external audit
for the period and overseeing the work performed by the
external auditors;
• reviewing the independence and performance of the
external auditor;
• reviewing significant accounting, financial reporting and related
issues raised by management and the External Auditor;
• monitoring developments in significant accounting, financial
reporting and taxation matters and considering the
implications for the Company;
• approving the internal audit plan for FY2021 including
amendments required in response to Covid-19 and reviewing
the outcome of internal audit reviews and the plans to
implement any remedial action;
• reviewing and monitoring improvements to the Company’s
internal control and accounting practices;
• reviewing and recommending to the Board the approval of the
Company’s two months ended 30 September 2020, FY2021
half year and annual financial statements;
The Committee has a Policy on the Provision of Non-audit
related services by the External Auditor which sets out the
Company’s approach to engaging the External Auditor for the
performance of non-audit related services with a view to
ensuring their independence is maintained. This Policy was
reviewed and updated in February 2021.
A copy of the Policy on the Provision of Non-audit related
services by the External Auditor can be found in the Corporate
Governance section of Nufarm’s website.
The External Auditor attends the Company’s Annual General
Meeting and is available to answer questions from investors
relevant to the audit.
3.2 Risk and Compliance Committee
The role of the Risk and Compliance Committee is to assist the
Board in relation to the oversight of financial and non-financial
risk management and compliance management within Nufarm.
The key responsibilities and functions of the Risk and
Compliance Committee are:
• overseeing the risk profile and recommending the risk appetite
for the Company to the Board for approval;
• considering and recommending to the Board the Risk
Management Framework in respect of both financial and
non-financial risk, (including the Health Safety and
Environment Framework);
• recommending for approval by the Board the Company’s Risk
Management Policy and Health, Safety and Environment Policy;
• overseeing the Company’s response to Environment, Social
and Governance (ESG) responsibilities and reporting
requirements, including modern slavery and climate change;
• overseeing the Company’s insurance program;
• overseeing compliance management; and
• receiving reports of any material breaches of the Anti-Bribery
and Whistleblower Policies.
Membership and meetings
The Risk and Compliance Committee consists of:
• a minimum of 3 members of the Board, all of whom are
Non-executive Directors;
• a majority of independent Directors; and
• an independent Director as chair.
The members of the Risk and Compliance Committee during
the reporting period were:
Name
Membership status
Gordon Davis (Chairman)
Member for the entire period
• reviewing and endorsing an updated Provision of non-audit
Peter Margin
Member for the entire period
Marie McDonald
Member for the entire period
Toshikazu Takasaki
Member for the entire period
Non-committee members, including members of management
attend meetings of the Committee at the invitation of the
Committee Chair.
services Policy for the External Auditor; and
• endorsing to the Board the adoption of an updated Audit
Committee Charter.
External Audit
The Audit Committee reviews the External Auditor’s scope of
work, including the external audit plan, to ensure it is appropriate,
having regard to the Company’s key risks. The External Auditor
reports to the Committee at each meeting and is given an
opportunity to raise issues with the Committee in the absence
of management. The Committee also reviews the performance
and independence of the External Auditor on an annual basis.
KPMG is the External Auditor.
38
Nufarm Limited | Annual Report 2021 Activities during the reporting period
The key activities undertaken by the Committee during this
period were:
• reviewing the Company’s key risks and Risk Management
Framework including recommending to the board the adoption
of a revised Risk Management Policy and Framework and
confirming that the framework was sound and that the
Company is operating with due regard to the risk appetite
set by the Board;
• reviewing management reports on the Company’s key
financial and non-financial risks and risk management
program including contemporary and emerging risks such
as impacts of Covid-19, geopolitical, cyber-security, privacy
and data breaches and climate change;
Further details on the Company’s remuneration framework, the
policies and practices regarding the remuneration of Directors,
as well as the contractual arrangements, remuneration and
performance evaluation of other members of KMP, are reflected
in the Remuneration Report on pages 55 to 74. The progress
against the Company’s Inclusion and Diversity objectives are
detailed in the Inclusion and Diversity section of this statement
on pages 41–46.
Membership and meetings
The Human Resources Committee consists of:
• a minimum of 3 members of the Board, all of whom are
Non-executive Directors;
• a majority of independent Directors; and
• receiving regular reports on health, safety, environment and
• an independent Director as chair.
quality matters;
• recommending to the Board the approval of the Modern
Slavery Statement for FY2020 and the adoption of a Climate
Change Policy;
• recommending to the Board updates to the Committee
Charter to expand the responsibilities of the Committee to
include overseeing the Company’s response to ESG including
receiving regular reports on ESG performance; and
The members of the Committee during this period were:
Name
Membership status
Peter Margin (Chairman)
Member for the entire period
Anne Brennan
Gordon Davis
Member until 18 December 2020
Member for the entire period
• receiving regular reports on the Company’s compliance program.
Lynne Saint
Member from 25 February 2021
3.3 Human Resources Committee
The role of the Human Resources Committee is to assist the
Board to perform its functions in relation to remuneration
policies and practices, development, retention and termination
of the CEO and KMP.
The Committee’s key responsibilities and functions are to:
• oversee the Company’s remuneration, recruitment, retention
and termination policy and procedures and its application
to the CEO and the KMPs;
• assess the performance of the CEO and assist the Chair with
reviews of the CEO’s performance;
• review and make recommendations to the Board on the CEO
succession plans;
• review and make recommendations to the Board regarding
the remuneration and benefits of Non-executive Directors;
• review the annual remuneration report;
• review and make recommendations to the Board on the
Inclusion and Diversity Policy and the measurable objectives
for achieving the inclusion and diversity outcomes; and
• make recommendations to the Board on the adoption of the
Company’s Code of Conduct.
The process to engage remuneration consultants is included
in the Human Resources Charter who will provide independent
remuneration advice, as appropriate, on director fees and KMP
remuneration, structure, practice and disclosure. Remuneration
consultants are engaged directly by the Chair of the Human
Resources Committee and report directly to the Committee.
During the period remuneration consultants were engaged
through this process to undertake external benchmarking
of KMP and NLT remuneration for FY2022.
A standing invitation is issued to the Managing Director and
CEO, CFO and Group Executive, People and Performance
for all meetings.
Activities during the year
The key activities undertaken by the Committee during
the year included:
• engaging remuneration consultants to provide advice on
Managing Director and CEO and other KMPs executive
remuneration;
• engaging remuneration consultants to provide advice on
design of a new executive incentive plan and recommending
the adoption of this plan to the Board;
• endorsing the adoption by the Board of Equity Incentive
Plan Rules;
• monitoring the progress on measurable objectives for
achieving gender diversity including recommending the
approval of the FY2021 Inclusion and Diversity report;
• overseeing and recommending the remuneration package
for the appointment of the new Chief Financial Officer;
• receiving regular updates on progress with people plans and
succession planning;
• reviewing and recommending to the Board the outcome
of the FY2020 incentive plans and the metrics for the FY2021
incentive plans; and
• approving the remuneration report for the 2 months ended
30 September 2020.
39
Nufarm Limited | Annual Report 2021 Corporate Governance Statement continued
3.4 Nomination Committee (previously Nomination
and Governance Committee)
The role of the Nomination Governance Committee is to assist
the Board to oversee the composition, performance, succession
planning of the Board as well as the induction and ongoing
training for directors. During FY2021 the Board agreed the
responsibility for the Company’s corporate governance
practices would be incorporated into the Board Charter.
The Nomination and Governance Committee Charter was
amended in July 2021 to reflect this change and renamed
the Nomination Committee.
Membership and meetings
The membership of the Nomination Committee also changed
during the period to include:
• All Non-executive Directors (with the majority to be independent
Non-executive Directors) with the Chair to be an independent
Non-executive Director; and
• where the Board Chairman is the Committee Chair, he or
she will not chair the Committee when it is dealing with the
appointment of a successor to the Chair.
Marie McDonald was Chair of the Nomination and Governance
Committee until 30 June 2021 when John Gillam became the
Chair of the Nomination Committee.
The members of the Nomination and Governance Committee
until 13 July 2021 were:
Name
Membership status
(until 13 July 2021)
Marie McDonald (Chairman)
Member for the relevant period
John Gillam
Frank Ford
Peter Margin
Member for the relevant period
Member for the relevant period
The members of the Nomination Committee from 14 July 2021 are:
Name
John Gillam (Chairman)
Membership status
(from 14 July 2021)
Chair and member for the
relevant period
Gordon Davis
Member for the relevant period
Frank Ford
David Jones
Member for the relevant period
Member for the relevant period
Marie McDonald
Member for the relevant period
• making a recommendation to the Board on adopting an
updated Securities Dealing Policy and reviewing and updating
the Continuous Disclosure Policy;
• making recommendations to the Board on changes to
Committee membership including the appointment of Lynne
Saint as Chair of the Audit Committee and Dr David Jones
as Chair of the Innovation Committee;
• making a recommendation to the board to update the
Committee Charter; and
• making a recommendation to the board to establish
an Innovation Committee and adopting the Innovation
Committee Charter.
3.5 Innovation Committee (from July 2021)
The role of the Innovation Committee is to assist the Board
in the oversight of the Company’s strategy, policies and
procedures with regard to the development and adoption
of innovation solutions and technologies in crop protection
and seed technologies.
The Committee’s key responsibilities and functions are:
• recommending the Product Research and Development Policy
to the Board for approvals;
• reviewing the strategic direction of the Company’s approach
to innovation in crop protection and seed technologies including
the processes for reviewing existing and emerging trends
in innovation that may affect the Company’s strategic plan;
• oversight and review of any innovation technologies in
potential acquisitions;
• monitoring and reviewing the Company’s research and
development capital allocation policies and procedures
for crop protection and seed technologies;
• monitoring post implementation results including measurable
• reviewing management of the intellectual property portfolio;
• reviewing and making recommendations on
commercialisation opportunities for the Company’s
technology and intellectual property; and
• reviewing relationships with key third parties necessary
to further develop the Company’s adoption of innovative
solutions and technologies.
Membership and meetings
The Committee consists of:
• a minimum of 3 members of the Board with the majority
to be independent Non-executive Directors; and
• an independent Director as chair.
The members of the Committee during the relevant period were:
Member for the relevant period
benefits for all new key product development;
Peter Margin
Lynne Saint
Member for the relevant period
Member for the relevant period
Name
Membership status
from July 2021
Toshikazu Takasaki
Member for the relevant period
Dr David Jones (Chairman)
Member for the relevant period
Marie McDonald
Member for the relevant period
Peter Margin
Member for the relevant period
Non-committee members, including members of management
attend meetings of the Committee at the invitation of the
Committee Chair.
Activities during the year
The key activities undertaken by the Nomination Committee
during the year include:
• overseeing the process of succession planning for the Board
including making recommendations to appoint Lynne Saint
and Dr David Jones as independent Non-executive Directors;
• making a recommendation to the Board to introduce a
Minimum Shareholding Policy for Non-executive Directors;
40
Nufarm Limited | Annual Report 2021 4 Inclusion and diversity
Nufarm is a global organisation that aims to provide an inclusive
work environment where individuals are valued for their diversity,
can bring their whole self to work and be empowered to reach
their full potential. We believe that diversity fuels innovative
thinking, decision making and contributes to the richness of
Nufarm. We are stronger when our plans and operations reflect
the thinking of all our people, representing a broad range of
backgrounds, cultures, and experience. We strive for a high
performing culture – one that is created by our employees as
they solve for the customer with a growth mindset and work
together as ‘One Nufarm’.
This year we continued the delivery of our 2018-2021 Inclusion
and Diversity strategy and focus areas with oversight and
leadership from our executive I&D steering committee. Our goal
is to embed inclusion and diversity in the way we conduct our
business, wherever we operate around the world. Some
activities included:
• Nufarm’s continued effort to respond to Covid-19 with flexibility
and inclusion. While we are privileged to be working in an
essential industry, we also recognise that this has been
a very trying time for all our employees. We had regular
promotion and education sessions with our Employee
Assistant Programs, facilitation of wellness check-ins and
continual access to updated Health and Wellbeing resources/
intranet for all employees. Our focus on staying connected,
work life balance, flexible working and building resilience has
enabled us to maintain high levels of employee satisfaction;
• at least five Executive Inclusion and Diversity Steering
committee meetings;
• establishing and in some regions, re-establishing Inclusion,
and diversity councils (ANZ, North America and Europe);
• launching Nufarm Voice, our employee continuous
listening strategy;
• celebrating diversity across the globe with International
Women’s day, Black History Month in North America, and
European Diversity Week;
• continuing to educate the business through unconscious
bias training and mentoring programs;
• intentional focus on attracting female talent; and
• our One Nufarm Behaviours recognition program continues
to progress with 447 (2020: 702) people recognised with 745
new badges (2020: 1,107 badges) of appreciation during 2021.
4.1 Nufarm’s workforce
At the end of this reporting period, we employed the full time
equivalent of 2,678 people (2020: 2,668), an increase of 10 full
time equivalents.
Most of our workforce remain full time with 89 per cent
permanent employees (2020: 88 per cent) and 11 per cent
contract or non-permanent employees (2020: 12 per cent).
Where the nature of the role allows it, we support flexible work
arrangements with 2 per cent of our workforce operating with
part time arrangements, we continue to operate with significant
flexible working arrangement to support our workforce capability
during Covid-19 and beyond. During 2021 we implemented
global flexible working guidelines, providing managers and staff
with the clarity they needed to ensure productivity, engagement
and connection amongst staff remained high.
We continue to recruit across the career lifespan with 41 per
cent (2020: 33 per cent) of new hires aged less than 30 years
of age, 46 per cent (2020: 54 per cent) between 30-50 years
and 13 per cent over the age of 50 (2020: 13 per cent). This
aligns with our longer- term intent to increase numbers in
younger age groups, allowing us to grow and develop our
internal talent to fill more senior opportunities more often.
2021 FTE by Geography
2021 FTE by Function
Asia
ANZ
Europe
LATAM
NA
22%
22%
36%
4%
16%
Supply Chain
Sales
Portfolio Solutions
Finance
Corporate
48%
30%
9%
6%
3%
Information Technology 2%
Human Resources
2%
Organisation Functions
30 Sept 2021
30 Sept 2020
Supply Chain
Sales
Portfolio Solutions
Finance
Corporate
Information Technology
Human Resources
1,280
1,265
816
236
166
85
51
44
827
238
168
73
56
41
41
Nufarm Limited | Annual Report 2021 Corporate Governance Statement continued
Gender by Organisation Levels
Key management personnel
Exec and senior management
(CEO-1 and CEO-2)
People manager
Professionals
Manufacturing shop floor
Administration
Other
30 Sept 2021
Female
0%
25%
21%
28%
10%
70%
23%
FTE
3
91
471
1,189
676
218
30
Male
100%
75%
79%
72%
90%
30%
77%
30 Sept 2020
Female
0%
21%
21%
29%
10%
70%
22%
FTE
4
92
472
1,212
654
202
32
Male
100%
79%
79%
71%
90%
30%
78%
* Key Management Personnel as listed in the annual report and include CEO and some direct reports
** CEO-1 refers to the layer of senior executives reporting directly to the CEO, CEO-2 the next layer of management reporting to those senior executives
4.2 Women at Nufarm
Nufarm’s focus on gender diversity is designed to empower all employees by actively addressing the barriers to equality and creating
a level playing field and inclusive culture for all staff. To this end we are committed to working towards a revised target of not less than
35 per cent (2020: 30 per cent) of either gender making up our workforce by 2025.
We are focused on improving female representation across all areas of the business and continue to recruit above our female
representation of 26 per cent (2020: 25 per cent). During this reporting period, 30 per cent (2020: 29 per cent) of new hires were
female and 28 per cent of people leaving the business were female (2020: 18 per cent).
Female representation increased in Information Technology by 7 per cent (2020: 13 per cent), Finance by 4 per cent (2020: 51 per
cent) and Portfolio Solutions by 1 per cent (2020: 42 per cent). Portfolio, Finance and Corporate are functions that already meet
our target of no less than 35 per cent of either gender.
Our Executive and Senior management employee category went up 4 per cent to 25 per cent representation (2020: 21 per cent)
as did our People Manager category by 1 per cent while all other categories remained stable in female representation.
Females appointed at the executive and senior management category represented 56 per cent (2020: 37 per cent) and 40 per cent
of those came from within our internal talent pool. Promotions showed a higher female representation of 28 per cent (2020: 25 per
cent) with 56 per cent of these promotions being appointed in Europe. Thirty-two per cent of all internal lateral moves were filled
by females compared to 22 per cent last year. Females represent 22 per cent of all people leadership positions across Nufarm
2020: 20 per cent). The percentage of female Non-executive Directors is 25 per cent (2020: 29 per cent), this is due to the addition of
a new Non-executive Director.
Gender by Geography 30 Sept 2021
Female
Male
Gender by function 30 Sept 2021
Female
Male
ANZ
ASIA
Europe
LATAM
NA
27%
18%
27%
20%
31%
73%
82%
73%
80%
69%
Supply Chain
Sales
Portfolio Solutions
Finance
Corporate
Information Technology
Human Resources
20%
18%
43%
55%
46%
20%
79%
80%
82%
57%
45%
54%
80%
21%
4.3 Cultural diversity
Our global footprint enables a culturally diverse workforce of leaders and teams, representing local cultures and customers in over
100 countries. 25 per cent of non-executive board members reside outside Australia (2020: 11 per cent) as do 50 per cent of
executive team members. Our executive and senior management team remains culturally diverse with at least 15 different cultural
backgrounds represented. Nufarm’s employee self-disclosed data indicates that our workforce originates from no less than 63
different countries and speaks at least 37 different languages. Nufarm also has at least 8 per cent of employees working in a different
country to their birth country.
42
Nufarm Limited | Annual Report 2021 4.4 Nufarm Voice
Employee feedback uncovers opportunities to improve and
strengths to leverage towards building a better Nufarm and a
more inclusive culture. This year We introduced a new Employee
Survey platform, ‘Nufarm Voice’, this is our continuous employee
listening strategy.
The purpose of Nufarm Voice was to empower managers to
more effectively use anonymous employee feedback to fuel
meaningful conversations and prioritise timely action that
responds to this feedback and contribute to positive change.
• Nufarm Voice puts our managers in the driver’s seat to take
the action that their teams are telling them is needed to create
positive change;
• the surveys are shorter and more frequent so we can
continuously listen to the voice of our people;
• the results are delivered with suggested learning and
checklists to take immediate action towards positive change.
The surveys run every 4 months and we have seen gradual
improvement toward the top quartile benchmark, and whilst
it is not compulsory, we encourage everyone to participate.
Our most recent survey had a participation rate of 80 per cent
and a slight improvement in overall employee satisfaction.
Both of which are close to the top quartile benchmark.
Whilst it is a comprehensive employee engagement platform,
it allows us to focus on key Inclusion and Diversity drivers
and is quickly becoming an integral part of our Inclusion and
Diversity roadmap. These include Authenticity, Inclusion, Speak
my Mind and Equal Opportunity. The results of which are used
to understand, cultivate, and measure our progress towards
building a more inclusive culture.
4.5 Progress against 2021 objectives
Nufarm believes that both inclusion and diversity are critical to our sustainable growth. We have now completed the third year of our
three-year strategy. During 2021 we focused on embedding our key priorities deeper into the organisation and placed additional effort
on developing greater gender equality with our internal talent pipeline; and conducting inclusion and diversity audits in each region.
2021 Objectives
Inclusion and diversity strategy goals
Progress against 2021 Objectives
Vision and Purpose Goal
Diversity is actively understood and represented by all
employees who promote an inclusive culture. Difference
is celebrated across the Company and there is a solid
understanding of how inclusion and diversity can contribute
to achieving business objectives.
By 2022
Policy Goal
Inclusion and diversity policy underpins other HR strategies.
Policies and procedures are regularly reviewed, and where
special circumstances allow, alternative solutions are put in
place to ensure attraction and retention of a diverse workforce.
By 2020
Continue with the communications plan and regular inclusion
and diversity articles.
Refresh the NLT Inclusion and Diversity Steering Committee,
minimum 2-year term and maximum 3-year term to ensure
diversity of the group.
• Progress: Rotation of 2 new executives to the NLT
steering committee have been appointed along with
a representative chairman to lead the group and revisit
progress against objectives.
Conduct a progress Global (regional) Inclusion and Diversity
diagnostic by March 2021 to demonstrate progress and review
Inclusion and Diversity Strategy.
• Progress: I&D Audit was completed with improvement
shown across all areas measured and results shared with
the Board. A 2025 I&D Road map has been developed using
the Audit results, Nufarm Voice results and Company strategy
as key inputs.
• Objectives developed for 2022 and approved by the HRC.
• Developed and introduced Flexible Working Guidelines
across the business.
43
Nufarm Limited | Annual Report 2021 Corporate Governance Statement continued
Inclusion and diversity strategy goals
Progress against 2021 Objectives
Knowledge and Capability Goal
All employees understand what diversity and inclusion is
and the competitive advantages it brings, are aware of their
responsibilities in contributing to a diverse and inclusive
environment, and how to do so effectively.
By 2022
Remuneration Goal
Remuneration practices ensure there is no bias based
on difference.
By 2022
Talent Goal
The board to have not less than 30 per cent of directors
of each gender by 2022.
The senior leadership team and workforce generally to have
not less than 30 per cent of people of each gender by 2025.
Succession plan coverage reflects the diversity of the
organisation.
By 2025
Deliver unconscious bias trainings to the European Senior
Leadership team and the next level.
• Progress: Completed with planned biannual retraining.
100 per cent employees have access to our Inclusive
Leadership Framework online.
• Progress: The inclusive Leadership Framework continues
to be deployed through online training to staff in their national
language during Covid-19. All employees except those with
Spanish and Polish language have access. 19 per cent of the
workforce using the framework and resources.
Deploy a Voice of the Business program ‘Nufarm Voice’ to
improve engagement through continuous listening and data
driven actions.
• Progress: Nufarm Voice platform was deployed three
times over this period along with onboarding surveys
as part of a more inclusive continuous listening program.
80 per cent participation with key actions taken at team
level for greatest impact.
Incorporate business as usual, gender analysis by region into
the remuneration review signoff process, to be led by regional
leads and signed off by RGM. Global to support development
of analysis.
• Progress: Our planned annual gender pay analysis for FY20
did not occur due to a salary freeze.
• Nufarm’s short term incentive 2020 plan included a non-
financial team component that aims to drive a collaborative
growth mindset culture. This component is measured based
on team performance, contribution and behaviour and
minimises manager bias associated to individual
performance decisions.
Continue to have one female on the panel for all senior
leadership level appointments and the commitment of having
one female on the shortlist for all senior Leadership roles.
• Progress: 100 per cent of SLT open vacancies had one
female on the interview panel and all senior leadership level
roles apart from one (88 per cent) had at least one female
on the shortlist.
Succession plan coverage reflects the diversity of the
SLT population.
• Progress: The NLT succession plan is populated with
37 per cent female talent and 77 per cent of the executive
roles have at least one female in the succession pool.
A new gender diversity KPI was introduced and cascaded
to CEO-1 and CEO-2 and will be included in their team
performance scorecard.
44
Nufarm Limited | Annual Report 2021 4.6 Focus for 2022 – FY2025
Nufarm aim to provide an inclusive work environment where individuals are valued for their diversity, can bring their whole self to work
and be empowered to reach their full potential. Nufarm believe that diversity fuels innovative thinking, improved decision making and
contributes to the richness of Nufarm, and our ability to serve customers. We strive for a high performing culture – one that is created
by our employees as they solve for the customer with a growth mindset and work together as ‘One Nufarm’.
Now that we have concluded the first phase of our I&D program, the Executive Steering committee has reviewed and reset our
priorities for 2022-2025. The review included a diversity audit, review of engagement and demographic data, business needs, the
impact of Covid-19 and the capability required to deliver our strategy. As an outcome of this review key priorities for 2022 – 2025 were
established with the following progress objectives for 2022.
Inclusion and Diversity at Nufarm: our 2022 – 2025 Roadmap
Inclusive and Diverse workplaces perform better. They deliver stronger returns, innovate with
ease, have access to a diverse talent pool and retain their employees for longer.
Why Diversity &
Inclusion matters
at Nufarm
We aim to provide an inclusive work environment where individuals are valued for their
diversity, can bring their whole self to work and be empowered to reach their full potential.
We believe that diversity fuels innovative thinking, decision making and contributes to the
richness of Nufarm, and our ability to serve customers. We strive for a high performing
culture – one that is created by our employees as they solve for the customer with a growth
mindset and work together as ‘One Nufarm’
One Nufarm
Global Priorities
Communications:
Implement I&D
communication
plan including;
internal
& external key
messages
Leadership & Talent Management:
Increase leadership accountability
for creating an inclusive workplace
and progressing diversity
Employee Lifecycle:
Modernise role design. Update recruitment
& selection processes to reduce bias,
attract/select more diverse talent and
enable internal promotions
Leadership & Talent
Development
Succession
Management
Attraction &
Advertising
Selection
45
Nufarm Limited | Annual Report 2021 Corporate Governance Statement continued
4.61 2022-2025 One Nufarm Key Priorities
Global I&D Priorities and Goals
2022 I&D Objectives
Communications:
Implement an I&D communication plan for all internal and external communications.
Implement I&D communication plan for all internal and
external communications.
The objective of the plan is to show how we are consistently
creating an inclusive work environment where individuals are
valued for their diversity, can bring their whole self to work
and be empowered to reach their full potential.
We aim to achieve this by 2025 and will measure our success
through our internal engagement survey and presence
on LinkedIn.
Develop and Deliver a targeted 2022 I&D communications plan:
• INTERNAL: Frequent communication/engagement activities
that improve awareness and engagement results:
– Authenticity: I feel comfortable being myself at work
– Inclusion: Leaders at Nufarm Value different perspectives
– Speak my Mind: I feel free to speak my mind without fear
of negative consequences
– Equal Opportunity: Regardless of background everyone
at Nufarm has equal opportunity to succeed
• EXTERNAL: Increase the awareness of Nufarm diversity
benefits measured through increased diversity of the stories
we share on our social media channels and the diversity of
our social media followers.
Leadership & Talent Management:
Increase leadership accountability for creating an inclusive workplace and progressing diversity
Leadership & Talent Development by 2025
• The board to have not less than 35 per cent of directors
of each gender by 2025.
• The senior leadership team and workforce to have not less
than 35 per cent of each gender represented by 2025.
• Increase female representation in manufacturing roles from
14 per cent to 25 per cent by 2025.
Succession Planning
Succession plans are populated with diverse candidates who
are skilled, ambitious, and engaged.
By 2025 all executive roles (no exception) have established
gender diversity in their succession plans
The senior leadership team (CEO-2) to have not less
than 30 per cent of either gender represented with clear
accountabilities established.
Women in Manufacturing Review conducted to identify
obstacles and opportunities for Nufarm.
• Increase female representation in supply chain (manufacturing)
leadership roles by at least 3 per cent in FY2023 (2020: 13 per cent)
Improve female representation in commercial and P&L roles:
• Women’s Mentoring Program established and deployed.
• External talent mapping for P&L roles within each Region
alongside internal succession coverage.
Succession plan coverage of the executive team to have
no less than 30 per cent representation of either gender.
Employee Lifecycle:
Modernise role design and update recruitment and selection processes to reduce bias, attract/select more diverse talent
and enable internal promotions
Attracting and Advertising
• Increase role attractiveness to minority groups by 2025.
• Target universities, colleges, technical institutions, and areas
with high minority population to advertise and build an
employer of choice image for IT, Commercial agriculture,
and manufacturing by 2025.
Selection
• Have one female on the selection panel for all senior leadership
appointments and 80 per cent of all other appointments across
the organisation by 2025.
• Commit to having at least two females on the shortlist for
all (100%) senior leadership roles, and 80 per cent of all other
roles to have at least one female on the shortlist by 2025.
• Conduct a review on how we advertise to attract diverse
candidates and develop an action plan to ensure that our
jobs ads are more inclusive.
• Develop a program to attract early in career pipeline talent
relevant to regional focus areas.
• Develop a pre-interview tool/guide to minimise unconscious
bias. Focus on criteria and outcomes of the role.
• Develop: Interview Training plan and have all panellists trained.
• 100 per cent CEO-1&2 roles and 80 per cent for all CEO-3
roles to have one female on the interview panel.
• 100 per cent all CEO-1&2 to have at least one female on the
shortlist with 60 per cent of these roles having at least two
females on the shortlist.
These objectives are in addition to the ongoing activities under Nufarm’s inclusion and diversity policy and current practices that
are already yielding meaningful results.
46
Nufarm Limited | Annual Report 2021 5 Promoting responsible and ethical behaviour
Code of Conduct
Nufarm has in place a Code of Conduct, which applies to all
Directors, employees, contractors, agents and representatives
of the Company.
The key values underpinning the Code of Conduct are:
• actions must be governed by the highest standards of integrity
and fairness;
• all decisions must be made in accordance with the spirit and
letter of applicable law; and
• business must be conducted honestly and ethically, with skill
and the best judgement, and for the benefit of customers,
employees, investors and the Company alike.
The Code of Conduct provides clear direction and advice on
general workplace behaviour and how to conduct business both
domestically and internationally, interacting with investors, business
partners and the communities in which the Company operates.
Material breaches of the Code of Conduct are reported to the
Human Resources Committee.
The Code was reviewed with updates approved by the Board in
November 2020. The Code of Conduct is available in the
Corporate Governance Section of Nufarm’s website.
Anti-bribery Policy
Nufarm has in place an Anti-bribery and Anti-corruption Policy
that applies to all Directors, officers and employees of Nufarm.
The policy strictly prohibits the making or receiving of unlawful
improper payments, or the giving or receiving of anything of
value or improper advantage, to or by any individual or entity
with the intent of securing a business advantage for Nufarm
to which it is not legally entitled.
The policy prohibits improper payments to persons or entities
including public officials, any Nufarm customer or any other
individual or entity with whom Nufarm does business.
Breaches of the Anti-bribery and Anti-corruption policy are
reported to the Risk and Compliance Committee.
The Anti-bribery and Anti-corruption Policy was reviewed
with updates approved by the Board in October 2020. The
Policy is available in the Corporate Governance Section of
Nufarm’s website.
Whistleblower Policy
Nufarm has in place a Whistleblower Policy to provide a clear
and transparent way for employees and contractors to report
unethical, unlawful or irresponsible behaviour without fear
of intimidation or recrimination.
The purpose of the Whistleblower Policy is to help detect and
address any conduct that is:
• corrupt, illegal, unlawful or fraudulent including bribery or
any other act in breach of the Company’s Anti-bribery Policy;
• contrary to or in breach of any Company’s policy or the
Company’s Code of Conduct, including harassment, bullying,
discrimination, victimisation;
• seriously harmful or potentially seriously harmful activity that
pose a threat to the Company’s employees, shareholders,
clients or third parties such as deliberate unsafe work
practices, with wilful disregard for the safety of others;
• activity that could cause significant financial loss to the
Company or damage its reputation or be otherwise
detrimental to the Company’s interests;
• a substantial mismanagement of Company resources; and
• any act which endangers the public or the financial system.
The Whistleblower Policy sets out protection that will be
afforded to whistleblowers as well as the option to make
an anonymous report.
Material breaches of the Whistleblower Policy are reported
to the Risk and Compliance Committee.
The Whistleblower Policy is available in the Corporate
Governance Section of Nufarm’s website.
Modern Slavery and Human Rights Policy
Nufarm takes its human rights obligations and responsibilities
seriously and is committed to the protection of human rights
in its business, supply chain and the communities in which it
operates consistent with the United Nations Universal Declaration
of Human Rights. Nufarm believes that respecting human rights
is integral to the sustainability and success of its business.
Nufarm has in place a Human Rights Policy that was reviewed
and updated by the Board in July 2021.
Nufarm is also committed to preventing slavery and human
trafficking in all it business activities and to ensuring that our
supply chains are free from such practices. The Board approved
the Modern Slavery Statement in March 2021. The statement
provides information on the steps taken to identify and reduce
the risk of modern slavery in Nufarm’s operations and supply
chain and the actions that will be taken in the coming year. The
Risk and Compliance Committee receives updates on progress
against these actions.
The Human Rights Policy and Modern Slavery Statement
are available in the Corporate Governance Section
of Nufarm’s website.
Securities Trading Policy and insider trading
The Board adopted a new Securities Trading Policy during
FY2021 that covers dealings by Directors, KMP and relevant
employees and complies with the ASX Listing Rule requirements
for a trading policy. The Securities Trading Policy aims to ensure
that public confidence is maintained in the reputation of Nufarm,
the reputation of its directors and employees and in the trading
of Nufarm securities.
The Securities Trading Policy prohibits all Nufarm employees
from trading in Nufarm securities at any time if they are in
possession of price sensitive information and during blackout
periods. Additional restrictions apply to Directors, KMPs and
relevant employees including that they may only trade if they
have obtained pre-approval to do so.
The policy also prohibits Directors, KMP’s and relevant employees
from entering into margin lending, short-term or speculative
dealing or hedging of Nufarm securities.
The Securities Trading Policy is available in the Corporate
Governance Section of Nufarm’s website.
47
Nufarm Limited | Annual Report 2021 Corporate Governance Statement continued
6.2 Risk management responsibilities
The Board is responsible for overseeing Nufarm’s risk
management framework, including both financial and non-
financial risks and setting the risk appetite within which the
Board expects management to operate. The Board is also
responsible to satisfy itself that management has developed
and implemented a sound system of internal controls.
The Board has delegated oversight of the ongoing risk
management program, procedures, auditing and adequacy
and effectiveness of the enterprise risk management to the
Risk and Compliance Committee and oversight of evaluating
the adequacy and effectiveness of the internal control systems
to the Audit Committee.
The Company’s Risk Management Framework, policies and
procedures set out the roles, responsibilities and guidelines for
managing financial and non-financial risks associated with the
business. The framework, policies and procedures have been
designed to provide effective management and governance of
material risks at a level appropriate to Nufarm’s global business.
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 Group
Head Risk and Compliance, manages the implementation of
this framework across the Company. The framework aims to
deal adequately with contemporary and emerging risks, such
as conduct risk, digital disruption, cyber-security, privacy and
data breaches, sustainability and climate change.
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.
The Risk and Compliance Committee Charter requires the
Committee and the Group Head Risk and Compliance to review,
at least annually, the Risk Management Framework.
During FY2021, the Risk and Compliance Committee oversaw
a review of the Risk Management Framework and is satisfied
that the Risk Management Framework continues to be sound
and that the Company is operating with due regard for the risk
appetite set by the Board.
6 Risk management and internal control
6.1 Approach to risk management and
internal control
The Board recognises that the effective identification and
management of risk reduces the uncertainty associated in
executing the Company’s business strategies. The Board has
a focus on strategy development and execution and actively
supports integrated risk management to strengthen this focus
area. During the year the Risk and Assurance function was
reviewed resulting in the establishment of a Risk and
Compliance business unit reporting to the Group General
Counsel and Company Secretary and Internal Audit reporting
to the CFO. A Group Head, Risk and Compliance was appointed
in April 2021 to further integrate risk management across Nufarm.
During the year, the risk management framework and policies
and procedures were reviewed and updated to align to the
concepts and principles identified in the Australia/New Zealand
standard on Risk Management (AS/NZ ISO 31000:201809).
The risk framework, policies and procedures set out the roles,
responsibilities, and guidelines for managing financial and
non-financial risks associated with the Company’s business
and have been designed to provide effective management
of material risks at a level appropriate to the Company’s global
business and have continued to be enhanced as the Group’s
operations develop and its range of activities expand. These
risks include contemporary and emerging risks such as
cyber-security, Covid-19 impacts, privacy and data breaches,
increased geo-political risk and climate change.
The updated Policy and Framework emphasise the Board and
Executive’s commitment to maintaining a positive risk culture
across Nufarm to maximise the effectiveness of risk management
practices with a particular focus on integrating risk into strategy
and decision-making.
The Group Risk Management Policy is available in the Corporate
Governance section of Nufarm’s website.
Nufarm is committed to continuing to improve its enterprise risk
management practices to protect and enhance shareholder
value. The recent appointment of a Group Head, Risk and
Compliance, has brought a renewed focus to strategic risk
management and the integration of risk in decision-making.
The Executive Risk, Health, Safety and Environment Committee
continued to meet during FY2021 to assist with overseeing,
directing and supporting the implementation and operation
of the risk management framework and internal compliance
and control system across the Company. The members of the
Committee are the CEO (Chair), CFO, Group Executive Supply
Chain Operations, Group Executive People and Performance,
the Group Company Secretary and General Counsel, Group
Head Risk and Compliance, General Manager, Global
Sustainability, General Manager Quality and a Regional General
Manager (on a rotational basis).
More information on Nufarm’s financial and non-financial risks,
including environmental, the approach to climate change
and social related risks, is set out in the Annual Report 2021
on pages 26 to 29 and the Sustainability Report.
48
Nufarm Limited | Annual Report 2021 6.3 Internal audit
6.4 CEO and CFO assurance
Before adoption by the Board of 2021 half year and annual
financial statements, the CEO and the CFO provided written
declarations to the Board in respect of the Company’s half year
and annual financial statements that, in their opinion, 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 financial position
and performance of the Company, and that the opinion has
been formed on the basis of an adequate system of risk
management and internal control which is operating effectively.
The declaration of the CEO and CFO is supported by written
statements by all executives and key finance personnel relating
to the financial position of the Company, market disclosure, the
application of Company policies and compliance with internal
controls and external obligations.
6.5 Verification of periodic reports
Nufarm is committed to ensuring that all the information
contained in its corporate reports are accurate, effective and
clear. Nufarm has put in place a process to verify the integrity
of its periodic reports that are not subject to audit or reviewed
by the External Auditor. This includes the annual directors’
reports, the Annual Report and the Sustainability Report.
A statement on the processes undertaken to verify the information
not audited or verified by the External Auditor is available in the
Corporate Governance section of Nufarm’s website.
During FY2021 Nufarm reviewed its Risk and Assurance function
resulting in separate Internal Audit and Risk and Compliance
business units being established with Internal Audit reporting to
the CFO and Risk and Compliance to the Group General Counsel
and Company Secretary. The internal audit delivery model was
also reviewed, and the decision made to move from a co-sourced
model to an outsourced internal audit model, particularly while the
limitations on international travel remain in place.
Nufarm’s internal audit service provider is PWC who is
accountable to both the Committee and the CEO for the delivery
of the internal audit plan and work program. The CFO manages
the relationship with PWC.
The internal audit service provider supports management
efforts to:
• manage and control risks;
• improve the efficiency and effectiveness of key business
processes and internal control systems;
• monitor compliance with company-wide requirements,
policies and procedures; and
• provide the Committee with assurance on the operating
effectiveness of controls.
The scope of internal audit work (including the annual internal
audit plan) is prepared with a view to providing coverage of
all major business and functional units and identified key risks.
The Audit Committee approves the internal audit plan which
is reviewed throughout the year to ensure it remains appropriate.
The Head of Internal Audit and following the change to an
outsourced internal audit model, PWC representatives, report
directly to the Committee at each meeting on the progress
against the internal audit plan, as well as detailed findings
and corresponding management actions in relation to reviews
undertaken in accordance with the internal audit plan. There
is an opportunity to raise issues with the Committee in the
absence of management, in a closed session held during each
Committee meeting. The internal audit function had unfettered
access to the Chair of the Audit Committee.
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Nufarm Limited | Annual Report 2021 Corporate Governance Statement continued
7 Continuous disclosure and communications with shareholders
7.1 Continuous disclosure and market communications
7.2 Shareholder communication
Nufarm is committed to timely, open and effective communication
with its shareholders and the general investment community.
The Board has adopted a Continuous Disclosure Policy, which
establishes procedures aimed at ensuring that Nufarm complies
with the legal and regulatory requirements under the Corporations
Act and the ASX Listing Rules. These procedures include the
establishment of a Market Disclosure Committee, which monitors
the continuous disclosure framework and is responsible
for ensuring that Nufarm complies with its obligations.
The Continuous Disclosure Policy was reviewed and updated
by the Board in July 2021.
The Market Disclosure Committee is constituted by the Chairman
of the Board, CEO, CFO, Group General Counsel and Company
Secretary and the General Manager, Investor Relations and
External Communications and is responsible for implementing
and monitoring reporting processes and controls to ensure
there is an adequate system in place for the disclosure of all
material information to the ASX.
The Group General Counsel and Company Secretary reports
to the Board on the matters considered by the Market
Disclosure Committee at each meeting. The Board approves
any announcement which are within the matters reserved for
decision by the Board including annual and half year financial
reports, any profit update or earnings guidance, matters which
could have significant financial or reputational risks, company
transforming transactions or events, significant corporate
transactions including any equity related transactions and any
other matters that the Market Disclosure Committee considers
is of fundamental significance to the Company.
In addition to approving the announcements reserved for
decision by the Board, directors are provided with copies of all
announcements that are made to the ASX immediately after they
have been released on the Market Announcements Platform.
The Continuous Disclosure Policy was reviewed and updated
by the Board in July 2021. The Policy is available in the Corporate
Governance Section of Nufarm’s website.
The Company places a high priority on communication with
shareholders and other stakeholders and aims to ensure they
are kept informed of all major developments affecting Nufarm.
The Company has an investor relations program to facilitate 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 shareholders’ perspectives and respond
to their feedback.
Nufarm holds briefings on the annual and half year financial
results and on other new and significant information. Presentation
material or speeches that provides any new and substantive
information are first disclosed to the ASX through the Market
Announcements Platform and then posted to the Nufarm
website prior to any discussion.
One of the key communication tools is the Company’s website.
The website contains the key governance documents, market
announcements, the Annual Report and half-yearly financial
statements, a calendar of events relating to shareholders
and other communications to key stakeholders. The website
also contains a facility for shareholders to direct inquiries
to the Company.
Shareholders are provided with an update on the Company’s
performance at the Annual General Meeting, as well as an
opportunity to vote on important matters affecting Nufarm and
ask questions of the Board and key members of management.
All substantiative resolutions at the AGM are decided by a poll
rather than a show of hands. Copies of the Chairman’s speech
and the meeting presentation are released to the ASX and
posted to the Company’s website as the meeting commences.
A summary of proceedings and outcome of voting on the items
of business are also released to the ASX and posted to the
website as soon as they are available after the meeting.
All directors are expected to attend the AGM.
Nufarm’s external auditor attends the AGM to answer any
shareholder questions concerning the conduct of the audit,
the preparation and content of the audit report, the accounting
policies adopted by Nufarm and the independence of the
external auditor in relation to the audit.
The Company encourages shareholders to receive
communications electronically. Shareholders may elect
to receive all or some of their communications electronically.
This election can be made directly with the Share Registry,
Computershare Investor Services Pty Limited.
The Board obtains the views of shareholders by either formal
or informal means. The Board receives a regular report from the
General Manager Investor Relations and External Communications
which contains feedback from investors. The CEO and CFO are
accessible to shareholders, analysts, fund managers and others
with a potential interest in the Company. The Chairman and the
Chairman of the Human Resources Committee are also
accessible to shareholders and institutional investors.
50
Nufarm Limited | Annual Report 2021 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 30 September 2021 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:
PM Margin
LD Saint (Appointed 18 December 2020)
JC Gillam (Chairman)
GA Hunt (Managing Director)
AB Brennan (Retired 18 December 2020)
GR Davis
FA Ford
DJ Jones (Appointed 23 June 2021)
ME McDonald
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 below.
Name, qualifications and responsibilities
Tenure and experience
John Gillam
BCom, MAICD, FAIM
John Gillam joined the Board on 31 July 2020 and was appointed Chairman
on 24 September 2020.
Independent Non-executive Chairman
Chairman of the Nomination Committee
John has extensive commercial and leadership experience from a 20-year career
with Wesfarmers where he held various senior leadership roles including CEO
of the Bunnings Group, Managing Director of CSBP and Chairman of Officeworks.
Other directorships and offices (current and recent):
• Chairman of CSR Limited (Director since December 2017 and Chairman since
1 June 2018)
• Chairman of BlueFit Pty Limited (since February 2018)
• Director of the Heartwell Foundation (since 2009)
• Director of Clontarf Foundation (since 2017)
• Former Director of Trinity Grammar School (from June 2018 until June 2021)
Greg Hunt joined the Board on 5 May 2015.
Greg joined Nufarm in 2012 and was Group Executive Commercial Operations prior
to being appointed acting chief executive officer in February 2015.
Greg has considerable executive and agribusiness experience. Greg had a successful
career at Elders before being appointed managing director of Elders Australia
Limited, a position he held between 2001-2007. After leaving Elders, Greg worked
with various private equity firms focused on the agriculture sector and has acted
as a corporate advisor to Australian and international organisations in agribusiness
related matters.
Gordon Davis joined the Board on 31 May 2011.
Gordon was Managing Director of AWB Limited (from 2006 to 2010) and has held
various senior executive positions with Orica Limited, including General Manager
of Orica Mining Services (Australia, Asia) and General Manager of Incitec Fertilisers.
He has also served in a senior capacity on various industry associations.
Other directorships (current and recent):
• Director of Healius Limited (formerly Primary Health Care Limited)
(since August 2015)
• Director of Midway Limited (since April 2016)
Frank Ford joined the Board on 10 October 2012.
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.
Greg Hunt
Managing Director and CEO
Gordon Davis
BForSc, MAgSc, MBA
Independent Non-executive Director
Chairman of the Risk and
Compliance Committee
Member of the Audit Committee
Member of the Human
Resources Committee
Member of Nomination Committee
Frank Ford
MTax, BBus (Acc), FCA
Independent Non-executive Director
Member of the Nomination Committee
Member of the Audit Committee
51
Nufarm Limited | Annual Report 2021 Directors’ report continued
Name, qualifications and responsibilities
Tenure and experience
Dr David Jones
BA (Hons) Science, PhD
Independent Non-executive Director
Chairman of the Innovation Committee
Member of the Nomination Committee
David Jones joined the Board on 23 June 2021.
David has held Chairman and Director roles in large global agricultural business.
His experience includes as Head of Business Development at Syngenta and former
Chairman of Zeneca China, Arysta Life Science, and Plant Impact. David has broad
leadership experience in operations, strategy, mergers and acquisitions and
intellectual property in multiple jurisdictions including Asia, Latin America. Europe
and the United States.
Peter Margin
BSc(Hons), MBA
Independent Non-executive Director
Chairman of the Human
Resources Committee
Member of the Risk and
Compliance Committee
Member of the Nomination Committee
Member of the Innovation Committee
Other directorships (current and recent):
• Chairman of Enko Chem Inc (since July 2021)
• Chairman of BigSis (since 2020)
• Former Chairman of Commercial Advisory Board of Enko Chem Inc
(2019 to July 2021)
Peter Margin joined the Board on 3 October 2011.
Peter has many years of leadership experience in major Australian and international
food companies including Chief Executive of Goodman Fielder Ltd and before that
Chief Executive and Chief Operating Officer of National Foods Ltd.
Other directorships (current and recent):
• Deputy Chairman of Bega Cheese Limited (since September 2020)
• Director of Costa Group Holdings Limited (since June 2015)
• Former Director of Bega Cheese Limited (from June 2011 to January 2019)
• Former Director of PACT Group Holdings Limited
(from November 2013 to 14 August 2019)
• Former Chairman of Asahi Holdings (Australia) Pty Ltd (to December 2020)
Marie McDonald
LLB(Hons), BSc(Hons)
Independent Non-executive Director
Member of the Nomination Committee
Member of the Audit Committee
Member of the Risk and
Compliance Committee
Member of Innovation Committee
Marie McDonald joined the Board on 22 March 2017.
Marie is widely recognised as one of Australia’s leading corporate and commercial
lawyers having been a Senior Partner at Ashurst until 2014 where she specialised
in mergers and acquisitions, corporate governance and commercial law.
Marie was Chair of the Corporations Committee of the Business Law Section of the
Law Council of Australia from 2012 to 2013, having previously been the Deputy Chair,
and was a member of the Australian Takeovers Panel from 2001 to 2010.
Other directorships (current and recent):
• Director of CSL Limited (since 14 August 2013)
• Director of Nanosonics Limited (since 24 October 2016)
• Director of Walter and Eliza Hall Institute of Medical Research (since October 2016)
• Member of Melbourne University Law School Foundation Board (since October 2021)
Lynne Saint joined the Board on 18 December 2020.
Ms Saint has broad financial and commercial experience from a global career
including more than 19 years with Bechtel Group where she served as Chief Audit
Executive and Chief Financial Officer of the Mining and Metals Global Business Unit.
Her expertise encompasses strong financial skills, corporate governance, enterprise
risk, supply chain risk and project management.
Other directorships (current and recent):
• Director of Iluka Resources (since 24 October 2019)
• Ventia Services Group Limited (since 25 October 2021)
Toshikazu Takasaki joined the Board on 6 December 2012.
Mr Takasaki represents the interests of shareholder Sumitomo Chemical
Company (SCC).
He is a former executive of SCC holding senior management positions in businesses
relating to crop protection, both within Japan and in the US. He is now a business
consultant with a national qualification registered by the Japanese Ministry of
Economy, Trade and Industry as a small and medium sized Enterprise Consultant.
He brings broad industry and international experience to the Board.
Lynne Saint
BCom, GradDip Ed Studies, FCPA, FAICD
Independent Non-executive Director
Chairman of the Audit Committee
Member of the Human
Resources Committee
Member of Nomination Committee
Toshikazu Takasaki
BBA
Non-independent Non-executive Director
Member of the Risk and
Compliance Committee
Member of the Nomination Committee
52
Nufarm Limited | Annual Report 2021 Company Secretary
Fiona Smith (BSc, LLB, GDipGov, FGIA) joined the Company
on 20 June 2019 and was appointed Company Secretary on
27 June 2019. Fiona is a senior legal and governance professional
with 20 years’ experience in Company secretarial roles arising
from her time spent in such roles in listed companies. Fiona
reports directly to the Board. She holds a Bachelor of Science
and Bachelor of Law from the Australian National University and
a Graduate Diploma in Applied Governance.
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 Brennan1
GR Davis
FA Ford
GA Hunt
JC Gillam
DJ Jones3
ME McDonald
PM Margin
LD Saint2
T Takasaki
Nufarm Ltd
Ordinary
shares
Nufarm Finance
(NZ) Ltd
Step-up
securities
15,156
71,609
51,400
1,030,671
185,000
82,000
34,827
13,906
6,659
–
–
–
–
–
–
–
–
–
–
–
1. Anne Brennan ceased to be a Director of the Company on 18 December 2020.
2. Lynne Saint was appointed as Director on 18 December 2020.
3. David Jones was appointed as Director on 23 June 2021.
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:
Board
Audit
Risk and
Compliance
Nomination and
Governance4
Human
Resources
Committee
Nomination
Committee
A
3
11
11
11
11
3
11
11
8
11
B
3
11
11
11
11
3
11
11
8
11
A
B
A
B
A
B
A
B
A
B
1
5
5
–
–
–
–
5
4
–
1
5
5
5
5
–
5
5
4
3
–
5
–
–
–
–
5
5
0
5
–
5
4
4
5
–
5
5
4
5
–
–
4
4
–
–
4
4
–
–
–
1
4
4
1
–
4
4
–
–
1
4
–
–
–
–
4
–
2
–
1
4
2
3
–
–
4
4
3
2
–
1
1
1
1
1
1
1
1
1
–
1
1
1
1
1
1
1
1
1
Anne Brennan1
Gordon Davis
Frank Ford
John Gillam
Greg Hunt
David Jones3
Peter Margin
Marie McDonald
Lynne Saint2
Toshikazu Takasaki
Column A: indicates the number of meetings held during the period of each Director’s tenure. Where a Director is not a member
but attending meetings during the period, then only the number of meetings attended rather than held is shown.
Column B: indicates the number of meetings attended by each Director.
1. Anne Brennan retired 18 December 2020
2. Lynne Saint joined the Board on 18 December 2020
3. David Jones joined the Board 23 June 2021
4. Nomination and Governance Committee changed to Nomination Committee from 15 July 2021
53
Nufarm Limited | Annual Report 2021 Directors’ report continued
Principal Activities and Changes
Environmental performance
Nufarm’s principal activities during the financial year were
the manufacture and sale of crop protection products and
its proprietary seed technologies business which are further
described in the Information on the Company section
on pages 6 to 11 inclusive in the Annual Report.
Nufarm employs approximately 2,700 people at its various
locations in Australasia, Africa, the Americas and Europe.
Details of Nufarm’s performance in relation to environmental
regulations are set out in the Operating and Financial Review
on pages 26 to 29 and forms part of the Directors’ Report.
The group did not incur any prosecutions or fines in the financial
period relating to environmental performance. The group publishes
annually a Sustainability Report. This report can be viewed on the
group’s website or a copy will be made available upon request
to the Company Secretary.
The Company is listed on the Australian Securities Exchange
(symbol NUF). Its head office is located at Laverton in Melbourne.
Non-audit services
Results
The net profit/(loss) attributable to members of the Group for
the 12 months to 30 September 2021 is $65.1 million. The
comparable figure for the 2 months to 30 September 2020
was ($92.9)* million.
Operating and Financial Review and
Future Prospects
The operating and financial review and future prospects are set
out in the Operating and Financial Review on pages 19 to 29
and forms part of this Directors’ Report.
Dividends
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 35
on page 143 to the financial report.
The Board has considered the non-audit services provided during
the year by the auditor and, in accordance with written advice
provided by resolution of the Audit Committee, is satisfied that
the provision of those non-audit services during the year by the
auditor is compatible with, and did not compromise, the auditor
independence requirements of the Corporations Act 2001 for
the reason that all non-audit services were subject to the
corporate governance procedures adopted by the Company
and have been reviewed by the Audit Committee to ensure they
do not impact the integrity and objectivity of the auditor.
No dividends were paid, declared or recommended during the
financial year ended 30 September 2021.
Indemnities and insurance for directors
and officers
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 15 April 2020 –
14 October 2020 at the rate of 4.15 per cent
per annum paid 15 October 2020
Distribution for the period 15 October 2020 –
14 April 2021 at the rate of 4.01 per cent
per annum paid 15 April 2021
$000
5,216
5,013
State of Affairs
The state of the Group’s affairs are set out in the Operating
and Financial Review on pages 19 to 29 and forms part of this
Directors’ Report.
Events subsequent to reporting date
On 15 October 2021 a distribution on Nufarm step-up securities
was paid at the rate of 4.0 per cent per annum for the period
15 April 2021 to 14 October 2021.
On 17 November 2021 the Directors declared a final
and unfranked dividend of four cents per share payable
17 December 2021.
Other than noted above, the Directors are not aware of any
matter or circumstance that has arisen since the end of the
financial year that, in the opinion, has significantly affected,
or may significantly affect in future years, Nufarm’s operations
or the state of Nufarm’s operations.
Remuneration Report
The Remuneration Report set out on pages 55 to 74 and forms
part of this Directors’ Report.
* Comparative information has been restated as a result of a change in accounting
policy detailed in note 3(a)(ii) of the notes to the financial statements.
54
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 to the extent allowed by law. 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 75 and forms part of the Directors’ Report for the financial
year ended 30 September 2021.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument 2016/191
and, in accordance with that Instrument, all financial information
presented in Australian dollars has been rounded to the nearest
thousand unless otherwise stated.
This report has been made in accordance with a resolution
of directors.
John Gillam
Director
Melbourne
17 November 2021
GA Hunt
Director
Nufarm Limited | Annual Report 2021
2021 Remuneration Report
A letter from the Chairman of the Human Resources Committee (HRC)
Dear fellow shareholder,
On behalf of the Board, I am pleased to present the 2021
Remuneration Report.
As a global business that operates in a dynamic and volatile
industry, we recognise the critical role our people play in
achieving the Company’s strategic objectives and delivering
sustainable, long-term value for shareholders.
In recent years the Company’s performance has been impacted
by environmental and market challenges and shareholder
returns have been unsatisfactory. The Board and management
have responded by driving a variety of initiatives that have
improved the operating platform, capital structure and cost base
of the organisation. These have included divestiture of the South
American businesses, investment in manufacturing capacity in
North America, and a performance improvement program focused
on simplifying the business, reducing the cost base, and improving
gross margins. Board succession has continued throughout the
year and a new Chief Financial Officer was appointed.
Executive remuneration outcomes for the 2021 year
Financial performance in 2021 has improved considerably on
the previous year. The Company has delivered revenue and
EBITDA growth in all regions and the Seed Technologies
business. Cash generation from operations has also increased
with significant improvement in the Company’s net working
capital performance.
For 2021, total financial reward framework consisted of fixed
salary, and the traditional short-term incentive (STI) and
long-term incentive (LTI) plans. The Company’s improved
financial performance has been reflected in the short-term
incentive outcomes for Executive Key Management Personnel
(KMP). The FY21 STI plan was simplified with a targeted focus
on a single profit measure, a single cash flow measure and
the addition of an SG&A measure to add focus on cost control
in line with the Performance Improvement Program. Based on
the FY21 STI outcome Executive KMP will receive on average
141 per cent of the target opportunity.
The fixed salaries of KMP remained frozen for a second year.
The last external benchmarking was conducted in 2017. During
the year the Board through the HRC committee appointed Egan
Associates as a remuneration consultant to provide a FY22
recommendation for Executive KMP remuneration.
The 2019 LTI plan was tested on 30 September 2021. The
threshold targets were not achieved and consequently no
incentive was paid.
Changes to the Board
Board renewal continued throughout FY21 with the
following changes:
• Lynne Saint joined the Board on 18 December 2020 as an
Independent Non-executive Director. Her experience in a
complex global business environment and her financial skill
base is adding to the Board’s experience and expertise.
• David Jones joined the Board on 23 June 2021 as an
Independent Non-executive Director. His extensive knowledge
and experience in the global agricultural industry will add to
the Board’s experience and expertise.
• Anne Brennan retired from the Nufarm Board as an
Independent Non-executive Director on 18 December 2020.
Anne had been a Director of Nufarm since 2011 and served
on the Audit and Risk, and Human Resources Committees
to the Board.
• Frank Ford has been a Non-executive Director for the past
nine years and Chair of the Audit Committee for eight years
and will retire from the Board at the conclusion of the AGM
on 17 December 2021.
Director fees
The Chairman’s fee and Non-executive Director fees remained
frozen for a second year, although there was a change in
Directors’ Committee fees from 1 August 2020 to reflect
changes to the structure of the Board Committees.
Introduction of the minimum shareholding policy
for Non-executive Directors
During FY2021 the Board introduced a Non-executive Director
Minimum Shareholding Policy which applies to all Non-executive
Directors except for any nominee directors appointed to the
Board to promote alignment between the interests of Non-
executive Directors and shareholders. The Policy requires that
Non-executive Directors are required to accumulate and then
hold a minimum holding of Nufarm securities equivalent to
100 per cent of their total pre-tax annual base fee including
superannuation. To support this Policy, the Board also introduced
a Non-executive Director Share Rights Plan to enable Directors
to build up their minimum requirement quicker. Further details
are set out in the Remuneration Report on page 73 of the
Annual Report.
Changes to Key Management Personnel
Having regard to Nufarm’s restructuring and strategic
repositioning, and as part of a broader review of the Executive
Remuneration Framework outlined overleaf, the Board and
management have reevaluated which roles within the Nufarm
Leadership Team have the authority and responsibility to meet
the definition of key management personnel (KMP) as set
out in AASB 124 – Related Party Disclosures for the purposes
of our remuneration reporting obligations. The last review of
this nature was conducted in 2014. Since that time the Company
has significantly increased the scope of the European crop
protection portfolio, divested the South American businesses,
and simplified the organisational model. As a result of these
changes, the Group’s current operating model has centralised
responsibility for strategic decision making and oversight, with
operational decisions relating to the execution of the Group
strategy devolved to regional managers who are more closely
aligned to the needs of local markets and customers.
As a result of this review, effective from 1 October, 2020
Nufarm’s Executive KMP include the following roles: CEO and
Managing Director, Group Executive CFO and Group Executive
Global Supply Chain.
On 1 December 2021, Paul Townsend was appointed Group
CFO of Nufarm replacing Paul Binfield in this role.
55
Nufarm Limited | Annual Report 2021 Further information on the new 2022 Executive Incentive Plan
is included in section 1.6 to this Remuneration Report and
further detail on targets and performance against them for
each Executive KMP will be disclosed in the 2022 Remuneration
Report. Changes to the framework will be implemented from
1 October 2021.
While the Board is confident that remuneration outcomes for
2021 and our forthcoming remuneration framework for 2022 are
sound, we will continue to listen to feedback on the effectiveness
of the remuneration policy, framework, and governance to
ensure it continues to meet the needs of the business and
its stakeholders. I would also like to take this opportunity to
thank shareholders for their support of Nufarm and its purpose
and vision.
Peter Margin
Chair – Human Resources Committee
2021 Remuneration Report continued
Reshaping the Executive Remuneration Framework
Despite recent improvements in business performance and
steps that have been taken to strengthen management
capability throughout the organisation, the Company remains
challenged in attracting and retaining capable talent in the
global markets in which it operates. The current incentive
structure has been in place since 2012 and no longer aligns
with the combined needs of the organisation, shareholders,
and plan participants.
With the assistance of an external provider, the Board initiated a
review of Nufarm’s Executive Remuneration Framework in 2021 to:
• Better understand local and global market practices and trends
• Review the efficacy of the current incentive scheme
• Provide insights into the design of a Nufarm incentive scheme,
that ensures it;
– attracts and retains talent from a global pool
– focuses executives on creating value for shareholders
consistent with the Company’s strategy and values
– rewards performance through the cycles of volatility inherent
in the sector
– rewards results that strengthen the business and deliver
long term value.
The work undertaken found that a more contemporary
remuneration framework would better fit the needs of the business
and be more market competitive in attracting global talent.
In considering a new Executive Remuneration Framework, the
Board agreed the design of the framework would be
underpinned by the following principles:
• Create a pay for performance culture where financial rewards
are directly linked to both short and long term Company
performance
• Attract global talent, and reward and retain participants
• Address the cyclical nature of the sector
• Include annual financial and non-financial targets that
are both key to Company performance, and in the control
of the participants
• Distribute awards in a mix of cash and equity.
To support the introduction of this new Executive Remuneration
Framework the Board also approved the Equity Incentive Plan
Rules to replace the existing LTI and STI Plan Rules.
56
Nufarm Limited | Annual Report 2021 Audited Remuneration Report
The audited remuneration report is designed to provide shareholders with an understanding of Nufarm’s remuneration policies and
the link between our remuneration strategy and performance. This report details Nufarm’s remuneration framework and outcomes
for KMP for FY21. The report has been prepared in accordance with section 300A of the Corporations Act 2001 (Corporations Act).
Section
What it covers
1. Remuneration snapshot
1.1 Key Management Personnel
• Lists the names and roles of the Executive KMP whose remuneration
details are disclosed in this report.
1.2 Executive KMP remuneration outcomes
• Details the key remuneration outcomes in FY21.
1.3 Actual total remuneration earned by executives in FY21
• Additional voluntary disclosure of cash and benefits actually earned
by KMPs in FY21.
1.4 Summary of FY21 Non-executive Director (NED) fees
• Details the NED fee changes in FY21.
1.5 Changes for FY21
1.6 Outlook for FY22
2. Setting Senior Executive remuneration
2.1 Remuneration governance
2.2 Remuneration strategy
2.3 Remuneration components
3. Executive remuneration outcomes
3.1 Financial performance
• Outlines the changes to remuneration arrangements in FY21.
• Outlines the changes to remuneration in FY22.
• Explains Nufarm’s remuneration policy, and how the board and
Human Resources committee (HRC) make decisions, including
the use of external consultants.
• Explains Nufarm’s remuneration strategy for FY22.
• Shows how executive remuneration is structured to support business
objectives and explains the executive remuneration mix.
• Provides a breakdown of Nufarm’s performance over the past five years.
3.2 Short Term Incentive performance
• Details the historical STI plan performance relative to Nufarm’s
3.3 Long Term Incentive performance
3.4 Senior executive contract details
Underlying NPAT results.
• Historical LTI plan performance relative to Nufarm’s share price.
• Lists the key contract terms governing the employment of Executive
KMP (including termination entitlements where relevant).
4. Non-executive Director remuneration
• Provides details of the fee structure for board and committee roles.
5. Remuneration tables
5.1 Remuneration of directors and disclosed executives
5.2 Equity instruments held by disclosed executives
5.3 Shares held in Nufarm
• Provides the remuneration disclosures required by the Corporations
Act and in accordance with relevant Australian Accounting Standards.
57
Nufarm Limited | Annual Report 2021 2021 Remuneration Report continued
1 Remuneration snapshot
1.1 Key Management Personnel
This Remuneration Report is focused on the KMP of Nufarm, being those persons with authority and responsibility for planning,
directing and controlling the activities of Nufarm. KMP includes the Non-executive Directors and senior executives (referred to as
executive KMPs throughout this report). Unless otherwise indicated, the KMP were classified as KMP for the entire financial year.
Non-executive Directors
John Gillam
Anne Brennan
Gordon Davis
Frank Ford
David Jones
Peter Margin
Marie McDonald
Lynne Saint
Toshikazu Takasaki
Executive KMPs
Greg Hunt
Paul Binfield
Paul Townsend
Elbert Prado
Chairman and Independent, Non-executive Director
Independent, Non-executive Director (retired effective 18 December 2020)
Independent, Non-executive Director
Independent, Non-executive Director
Independent, Non-executive Director (effective 23 June 2021)
Independent, Non-executive Director
Independent, Non-executive Director
Independent, Non-executive Director (effective 18 December 2020)
Non-independent, Non-executive Director
Managing director and chief executive officer
Chief financial officer (until 30 November 2020)
Chief financial officer (effective 1 December 2020)
Group executive supply chain operations
• Anne Brennan’s final day on the Nufarm Board as an Independent Non-executive Director was 18 December 2020.
• Paul Binfield announced his resignation as Chief financial officer (CFO) on 14 September 2020 and left Nufarm after a handover on 31 December 2020. Mr Binfield
remained a KMP until his departure on 31 December 2020.
1.2 Executive KMP remuneration outcomes
The overall structure and philosophy of Nufarm’s approach to remuneration remained consistent throughout FY21. The organisation’s
remuneration philosophy continues to be based on linking financial rewards directly to employee contributions and Company performance.
Fixed annual remuneration (FAR)
No Executive KMP received an increase to their FAR for FY21.
Short term incentive (STI)
Long term incentive (LTI)
Executive KMPs received an average of 141 per cent of the target opportunity available based
on the assessment of financial and team performance.
The FY19 LTI plan was tested on 30 September 2021. The average cumulative Return on Funds
Employed (ROFE) and the Relative Total Shareholder Return (RTSR) achievement were both
below threshold. The plan did not meet the entry hurdle associated with the measures. The
outcome was that no Executive KMP received any equity related to the FY19 plan.
58
Nufarm Limited | Annual Report 2021 1.3 Actual total remuneration earned by executives
in FY21 (unaudited)
The table below details actual pay and benefits for Executive
KMPs who were employed during the reporting period. This
table aims to assist shareholders in understanding the cash
and other benefits received by executive KMPs from the
various components of their remuneration during FY21. The
period depicted as 2020 represents the two-month period
1 August 2020 – 30 September 2020.
As a general principle, Australian Accounting Standards require
the value of share-based payments to be calculated at the time
of grant and accrued over the performance period and restriction
period. The Corporations Act and Australian Accounting
Standards also require that pay and benefits be disclosed for
the period that a person is an executive KMP. This may not reflect
what executive KMPs received or became entitled to during FY21
(especially if they became KMP part way through the year).
The figures in this table have not been prepared in accordance
with Australian Accounting Standards. They provide additional
voluntary disclosures to Table 5.1 (which provides a breakdown
of executive KMPs remuneration in accordance with statutory
requirements and Australian Accounting Standards). The treatment
of the remuneration elements in this disclosure are as follows:
• Fixed remuneration earned between 1 October 2020 and
30 September 2021. This includes superannuation.
• STI payable as cash under the FY20 STI plan (which is paid in
FY21 after audited results), as well as any restricted STI or LTI
that has been earned as a result of performance in previous
financial years but was subject to a restriction period that
ended between 1 October 2020 and 30 September 2021.
• Benefits received between 1 October 2020 and
30 September 2021.
Fixed remuneration
At risk remuneration (Realised)
Total3
In AUD
Period1
Salary
and Fees
$
Other
benefits2
$
Super-
annuation
$
Total
$
STI cash
$
STI
deferred
shares
vested
$
LTI
rights
vested
$
Other
long
term
$
Total
Remun-
eration
$
LTI
rights
forfeited
$
Directors’ Non-executive
Sub total Non-executive
Directors remuneration
(realised)
Executive Director
2021 1,510,839
2020
272,873
–
–
124,964 1,635,803
23,604
296,477
–
–
GA Hunt
2021 1,294,063
100
25,625 1,319,788
697,766
Total Directors’
remuneration (realised)
Group Executives
2020
215,781
–
4,167
219,948
–
2021 2,804,902
100
150,589 2,955,591
697,766
2020
488,654
–
27,771
516,425
–
PA Binfield4
2021
205,556
213,592
6,250
425,398
50,000
P Townsend5
2021
603,047
100
21,458
624,605
265,280
2020
137,037
–
4,167
141,204
–
E Prado
B Zacharias6
2020
–
2021
706,740
2020
122,329
–
2021
2020
–
60,160
10,326
–
–
–
–
45,469
812,369
259,413
53,685
–
–
132,655
–
–
–
–
–
–
–
74,909
7,608
8,240
90,757
Sub total – total
executive remuneration
(realised)
2021 1,515,343
273,852
73,177 1,862,372
574,693
53,685
2020
334,275
17,934
12,407
364,616
–
–
Total directors and
executive remuneration
(realised)
2021 4,320,245
273,952
223,766 4,817,963 1,272,459
53,685
2020
822,929
17,934
40,178
881,041
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 1,635,803
–
296,477
–
–
– 2,017,554
(782,078)
–
219,948
–
– 3,653,357 (782,078)
–
–
–
–
–
516,425
475,398
–
–
141,204
(636,320)
889,885
–
–
–
– 1,125,467
(238,253)
–
–
–
132,655
–
90,757
–
–
–
– 2,490,750 (238,253)
–
364,616 (636,320)
– 6,144,107 (1,020,331)
–
881,041 (636,320)
1. ‘2021’ in this table represents the 12 months ended 30 September 2021; In the prior period, ‘2020’, it represents the two-month period ended 30 September 2020.
2. Other benefits includes termination payments made during the 12 months ended 30 September 2021. For overseas based Executives other benefits includes
reimbursement of car expenses and health insurance.
3. ‘Total’ represents total remuneration paid in the financial period.
4. Mr PA Binfield announced his resignation on 14 September 2020 and therefore forfeited his rights under the Long-term incentive program plan rules. The rights lapsed
upon Mr Binfield leaving Nufarm on 31 December 2020. An STI cash bonus was paid to Mr Binfield upon achievement of the delivery of a report recasting how operating
expense savings could be accelerated into FY21.
5. Mr P Townsend commenced as a KMP following his appointment to CFO on the 1 December 2020.
6. Mr B Zacharias ceased to be a KMP on 1 October 2020 following a change of the Executive KMP’s.
Note: STI deferred shares vested and LTI rights vested or forfeited are valued at the Nufarm share price prevailing upon the vesting or forfeiture date ($4.80 at 30 September
2021, $4.31 at 31 July 2021 and $3.85 at 30 September 2020).
59
Nufarm Limited | Annual Report 2021
2021 Remuneration Report continued
1.4 Summary of FY21 NED fees
NED fees are fixed and do not have any variable components.
The chairman receives a fee for chairing the Nufarm board and
is not paid any other fees. Other NEDs receive a base fee and
additional fees for each additional Committee chairmanship and
membership (except for the Nomination Committee with effect
from 15 July 2021). The Chairman’s fee and Non-executive
Director fees remained frozen for a second year, although
Directors’ Committee fees were adjusted from 1 August 2020 to
reflect changes to the structure of the Board Committees. No
additional retirement benefits were paid. Fees paid to NEDs are
subject to a maximum annual Non-executive Director fee pool
of $2 million approved by shareholders at the 2017 AGM.
1.5 Changes for FY21
Additions:
• Paul Townsend commenced as Chief Financial Officer
on 1 December 2020 replacing Paul Binfield in this role.
• Lynne Saint joined the Board on 18 December 2020 as
an Independent Non-executive Director.
• David Jones joined the Board on 23 June 2021 as an
Independent Non-executive Director.
Cessations:
• Anne Brennan’s final day on the Nufarm Board as an
Independent Non-executive Director was 18 December 2020.
• Paul Binfield ceased being Chief Financial Officer effective
30 November 2020 and ceased to be an Executive KMP
of Nufarm on 31 December 2020 following a short handover
period with Paul Townsend as incoming Chief Financial Officer
to ensure continuity in this role.
• Brent Zacharias, Group General Manager ceased being
a KMP of Nufarm as of 1 October 2020.
1.6 Outlook for FY22
Fixed annual
remuneration (FAR)
As the last external benchmarking was conducted in 2017, the Board through the HRC committee appointed Egan
Associates as a remuneration consultant to provide a remuneration recommendation for Executive KMP FY22.
With the assistance of an external provider, the Board initiated a review of Nufarm’s Executive Remuneration Framework to:
• Better understand local and global market practices and trends
• Review the efficacy of the current incentive schemes
• Provide insights into the design of a Nufarm incentive scheme, that ensures it:
– attracts and retains talent from a global pool
– focuses executives on creating value for shareholders consistent with the Company’s strategy and values
– rewards performance through the cycles of volatility inherent in the sector
– rewards results that strengthen the business and deliver long term value.
From 1 October 2021, a summary of Executive KMP remuneration is as follows:
Fixed
Fixed Annual Remuneration (FAR)
or base salary
Reviewed annually for changes in role scope, promotion,
internal relativities, and significant market changes.
Variable
Executive Incentive Plan (EIP)
66.67% delivered in deferred rights at the
end of year one
33.33% delivered in cash at end of year one
100% of deferred rights to be released at the end of year 4
following retesting at the end of the vesting period. Hence
this 66.67% component remains ‘at risk’ and subject
to a second test.
Executive Incentive Plan (EIP) target payout
The EIP target payout is set annually as a percentage of FAR (CEO, CFO) or base salary (Group executive supply chain
operations) applicable during the year. This is pro-rated if that percentage is changed during the year.
Four key performance areas
The EIP will have focus on four main performance elements, with an equal weighting allocated to each.
Element
Profit
Return on Investments
Cash flow
Non-financial
Weighting
Measured by
25%
25%
25%
25%
Group underlying EBIT (uEBIT)
Average Group return on funds employed (ROFE)
Average net working capital (ANWC) divided by sales
Defined non-financial strategic or operational goals as determined
by the Board for each Executive KMP
The EIP will be comprised of three performance levels for each element: minimum, target and maximum outcomes.
The minimum, target, and maximum values for financial performance measures will be set, reviewed, and approved
by the Board annually for each KMP.
Performance Level
Minimum
Target
Maximum
The minimum performance outcome that must be achieved before any EIP payment
will be made in relation to the measure
An outcome delivering significant benefit to the Company achieved by great performance
A stretch goal that could only be achieved by sustained outstanding performance
Executive Incentive
Plan (EIP)
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Nufarm Limited | Annual Report 2021
Executive Incentive
Plan (EIP) Continued
Gateway hurdle for EIP
In order to earn an award in the EIP, the Profit element must meet its minimum threshold. If this is not met, all elements
are forfeited.
FY22 EIP target payout
CEO & Managing Director
CFO
130% of FAR
100% of FAR
Group executive supply chain operations
85% of Base Salary
FY22 EIP performance levels
Minimum
Target
Maximum
Profit
Return on
Investments
Cash flow
Non-financial
85% of budgeted
uEBIT
85% of budgeted
ROFE
95% of budgeted
ANWC/Sales
Determined by the
Board based on
individual performance
100%
120%
100%
120%
100%
105%
FY22 budgets are reviewed and approved by the Board to ensure they demonstrate growth potential and achievement
of strategic milestones.
Once performance levels are set, EIP payments are calculated based on payout slopes with a minimum of 25%
to a maximum of 150% for each financial measure. All measures are equally weighted at 25% of the total award.
Minimum
Target
Maximum
Profit
Return on Funds
Employed
Cash flow
Non-financial
25% of EIP target payment
0-100% of EIP
target payment
100%
150%
Two thirds (66.67%) of the total EIP payment are deferred into Nufarm rights, and the remaining one third (33.33%) is paid
as cash at the end of year one.
The rights are retested at the end of year four. This test is conducted against key strategic objectives, including ESG and
other key deliverables as determined by the Board. Withholding a large portion of the award as Nufarm rights for a period
ensures the participants maintain a focus on both short and long-term Company performance as well as ensuring
alignment with shareholder experience.
The Nufarm Board have absolute discretion regarding the amount and timing of any EIP payments. The EIP plan is governed
by the overarching Nufarm Equity Incentive Plan Rules.
Cessation of employment
Unless the Board determines otherwise:
a. if employment is terminated for cause (as defined below) or the KMP resigns (or give notice of resignation) prior to the
date on which the EIP award is delivered, the employee will not be entitled to an EIP award;
An employee will be ‘terminated for cause’, where employment with the Group is terminated because the employee:
• acted fraudulently or dishonestly;
• engaged in serious or willful misconduct;
• is seriously negligent in the performance of your duties;
• committed a serious breach of your employment contract;
• committed an act, whether at work or otherwise, which could reasonably be regarded to have brought the Company
or a Group Company into disrepute; or
• is convicted of an offence punishable by imprisonment.
b. if an employee ceases employment for any other reason prior to the date on which the EIP award is delivered, it will be
pro-rated (based on the portion of the performance period that has elapsed up until the date of termination). Unvested
equity will remain intact and continue to vest under the plan rules.
61
Nufarm Limited | Annual Report 2021 2021 Remuneration Report continued
2 Setting senior executive remuneration
2.1 Remuneration governance
The HRC is responsible for reviewing and making recommendations
to the Nufarm Board on remuneration policies and practices
of the Board, the CEO and other Executive KMP. The HRC is
comprised of a minimum 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 HRC charter can be found
at www.nufarm.com.
The HRC has progressively increased their remit to include
a wider talent and succession agenda including a review
of Nufarm’s diversity and inclusion strategy.
The HRC reviews Executive KMPs’ remuneration annually to
ensure there is a balance between fixed and at risk pay, and it
reflects both short and long term objectives aligned to Nufarm’s
strategy. The Board reviews the CEO’s remuneration based
on market benchmarks, performance against agreed measures
and other relevant factors, while the CEO undertakes a similar
exercise in relation to the other Executive KMPs. The results of
the CEO’s annual review of Executive KMPs’ performance and
remuneration are subject to Board review and approval.
The Board measures financial performance under the STI and
LTI plans using audited numbers. The relative total shareholder
return (RTSR) used within the LTI plan is measured by an
independent external advisor.
Within the remuneration framework the Board has discretion to
‘clawback’ LTI plan and STI accruals (cash and equity) if in the
Board’s opinion, a participant has obtained or will obtain
an unfair benefit:
• 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 mis-stated; and/or
• for individual gross misconduct.
In accordance with Nufarm’s Security Trading Policy, Executive
KMPs are not permitted to enter into margin lending, short-term
or speculative dealing or hedging of Nufarm securities, including
any rights.
The Board considered all 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 remuneration decisions.
2.2 Remuneration Strategy
Nufarm’s remuneration strategy and reward framework has had
the same construct since 2012. They were designed to reflect
the importance of improving the performance of the business
and lifting returns on funds employed, as well as supporting a
goal to attract, motivate and retain a high performing workforce.
However, as previously noted a review has deemed this structure
to no longer be effective and therefore will change for FY22.
For FY21, the remuneration strategy was adjusted as follows:
• The addition of an SG&A measure in the STI plan to
put a focus on cost control in line with the Performance
Improvement Program.
FAR
STI
LTI
Attract, motivate, and retain highly
skilled employees
Reward achievement if financial and personal/team strategic
objectives are met
Align to long term shareholder
value creation
Cash
Equity
Base salary plus superannuation
50% of STI paid annually after
financial year end
Set based on market and
internal relativity, performance,
and experience
STI outcome based on financial
and personal/team performance
50% of the STI outcome is
deferred as Indeterminate Rights
for a period of 2 years
Indeterminate Rights subject to
three-year performance period
with 50% subject to RTSR and
50% subject to ROFE
Subject to clawback and forfeiture in circumstances outlined
62
Nufarm Limited | Annual Report 2021 2.3 Remuneration components
a) FY21 Remuneration structure
The executive remuneration structure is based on Fixed Annual Remuneration (FAR) with additional short term and long-term
incentives (described as a percentage of FAR) available to be earned subject to performance. Australian based Executive KMPs
are employed on this basis. Those located overseas also receive benefits as per local employment conditions.
The graph below outlines the target remuneration mix for executive KMPs. The variable components of STI (including potential
restricted rights) and LTI are expressed at target.
Group
executive
supply chain
operations
CFO
CEO
34.2% Equity
52.6%
13.2%
13.2%
21.1%
38.1% Equity
47.6%
14.3%
14.3%
23.8%
45.0% Equity
40.0%
15.0%
15.0%
30.0%
● FAR ● Cash STI ● Deferred STI ● LTI
b) FY21 STI plan
All Executive KMPs participated in the same STI plan. All plan details are below.
Who participates
in the STI?
What is the
plan’s aim?
Plan participants include disclosed Executive KMP and senior managers globally.
The Plan rewards a combination of financial and non-financial performance measures that are aligned
to the creation of shareholder value. Primary emphasis is placed on profitability, cash flow and cost
management. The non-financial measures focus our Executive KMP and employees on executing
the most critical objectives aligned to the annual business plan as a collaborative member of a team.
When are awards made? Awards are made at the end of the financial year.
What measures are
used in the plan?
The board sets measures at the start of each year focused on profitability and cash flow management.
Noted below are the measures used in 2021.
When and how are
the STI payments
determined?
All Executive KMP roles
40% of potential was based on Group Underlying Earnings Before Interest and Tax (uEBIT).
40% of potential was based on Group Average Net Working Capital (ANWC)/Sales. This measure
presents the Groups ANWC as a percentage of the Groups total sales.
10% of potential was based on Group Cash SG&A.
For all executives
10% of the potential was based on team objectives.
Awards are assessed annually at the end of the financial year. Awards are based on the percentage
achievement against the budget and strategic measures.
Overall plan gateway Group Underlying Net Profit After Tax (uNPAT).
Group uEBIT – The threshold for this measure is 85% of target. At threshold achievement, 25%
of the STI associated with the measure pays out.
Group ANWC/Sales – The threshold for this measure is 95% of target. At threshold achievement,
25% of the STI associated with the measure pays out.
Target achievement results in 100% payment with stretch achievement (120% for uEBIT and 105%
for ANWC/Sales) of up to 150%.
Group cash SG&A must achieve target on a constant currency basis (i.e.,100% of target or better).
Target achievement results in 100% payment with stretch achievement (110% for cash SGA) of up to 200%.
Straight line vesting between threshold and target and between target and stretch.
Strategic and business improvement objectives are assessed on a merit basis against stated objectives.
63
Nufarm Limited | Annual Report 2021 2021 Remuneration Report continued
Are payments in cash
or equity?
50% of Executive KMPs’ STI is paid in cash at the time of performance testing and 50% deferred into
indeterminate rights with a time-based restriction.
When do the
shares vest?
Vesting will occur on the second anniversary of the grant date of the deferred equity, subject to continued
employment or otherwise if the participant has left employment for a qualifying reason.
Is there a clawback
provision in the plan?
The rules of the plan provide for clawback of the entire STI (cash and equity which may be vested or
unvested) with board discretion 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.
What happens if the
Executive KMP
leaves Nufarm?
If an Executive KMP leaves before the vesting anniversary under ‘qualifying leaver’ provisions the equity
will remain in the plan until the vesting date. If the executive leaves under other than ‘qualifying leaver’
circumstances the equity will be forfeited. ‘Qualifying leaver’ provisions include participants who cease
employment due to retirement, death, ill health/disability, redundancy, or contract severance without
cause, or such other reason as determined by the board at its absolute discretion.
The rules of the plan provide the flexibility, in special circumstances (e.g., health or severe personal
hardship), to accelerate the vesting.
c) FY21 LTI plan
All Executive KMPs participated in the same LTI plan:
Why have an
LTI plan?
This plan aims to focus and reward plan participants for delivering sustainable financial returns over
a longer period in line with Nufarm’s strategy and the interests of shareholders.
Who participates
in the LTI plan?
The current participants in the plan are Executive KMPs and other selected senior managers
(together, the LTI plan participants).
Are the awards cash
or equity?
The plan rules provide the flexibility to use a number of different instruments provided they comply with
local regulations and sound practice. 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.
When are the
awards made?
Under the plan, LTI plan participants receive an annual award of rights as soon as practical after the
announcement of results for the preceding year.
How are the number
of rights calculated?
The number of rights to be granted is calculated by dividing the individual’s LTI grant opportunity for the
performance year by the volume weighted average price of the Company’s shares over the five trading
days immediately following the prior year’s annual results announcement.
When do the
awards vest?
The performance/vesting period for awards is three years. Awards will vest in two equal tranches as follows:
• 50% of the LTI plan grant will vest subject to the achievement of RTSR performance hurdle measured
against a selected comparator group of companies; and
• The remaining 50% of the LTI plan grant will vest subject to the 3-year average of an absolute ROFE target.
Why have ROFE and
RTSR been chosen
as the hurdles?
What is the
comparator group
for the assessment
of relative TSR?
How is RTSR
measured?
What is the RTSR
performance required
for vesting?
ROFE is used to track progress towards the goal to return long-term results back to acceptable levels
for Nufarm. Strong RTSR performance ensures Nufarm is an attractive investment for shareholders.
Based on the results of research and modelling carried out by EY, at the inception of the plan the board
approved the adoption of the ‘S&P ASX 200 excluding those companies in the Financial, Materials and
Energy groups’ as the RTSR comparator group.
RTSR will be measured over the performance period. For the purposes of this measurement, each
company’s share price will be measured using the average 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.
RTSR of Nufarm relative to the RTSR of comparator
group companies
Proportion of RTSR grant vesting
Less than 50th percentile
50th percentile
0%
50%
Between 51st percentile and 75th percentile
Straight line vesting between 50% and 100%
75th percentile
100% vesting
64
Nufarm Limited | Annual Report 2021 How is the ROFE
target set?
How is ROFE
measured?
What ROFE result is
required for vesting?
ROFE objectives are set by the board at the beginning of each year. There is both a ‘target’ and a ‘stretch’
hurdle. These numbers are based on the budget and align with the guidance given to the market. ‘Target’
represents a sustainable return to acceptable ROFE levels. Stretch recognises achievement well above
budget. This ensures that full vesting of the LTI plan is truly reliant on outstanding performance.
Return is calculated on the group’s earnings before interest and taxation and adjusted for any material
items. Funds employed are represented by shareholder’s funds plus total interest-bearing debt (including
lease liability). For the purposes of measuring ROFE performance in the LTI plan, ROFE will be averaged
over the life of the plan.
Percentage of ROFE target achieved
Proportion of ROFE grant vesting
Less than Target
Target
0%
50%
Between Target and Stretch
Straight line vesting between 50% and 100%
Stretch
100%
What was the result
for the FY21 year?
Nufarm’s RTSR was less than 50th percentile of the comparator group and average cumulative ROFE
was below threshold. Consequently, the FY19 award, which matured in FY21 did not vest into shares
as both performance hurdles were not met.
What happens if the
awards do not vest?
To the extent that the RTSR and ROFE performance hurdles are not met at the end of the 3-year
performance period and full vesting is not achieved, performance will not be re-tested, and the award
will lapse. There is no partial vesting of the LTI plan before the 3rd anniversary.
Is there a clawback
provision in the plan?
The rules of the plan provide for clawback of both vested and unvested LTI plan 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.
What happens
if an Executive
KMP leaves?
To be eligible under the LTI plan, the executive must be employed by Nufarm on the 1st anniversary of the
allocation. If the executive leaves before this date, the allocation is forfeited. If the executive leaves under
‘qualifying leaver’ provisions, (refer STI section above for definition of ‘qualifying leaver’) after the 1st
anniversary and before the 3rd anniversary of the plan the allocation will be pro-rated and the pro-rated
allocation will remain ‘on foot’ in the plan subject to certain overriding discretions set out in the plan.
65
Nufarm Limited | Annual Report 2021 2021 Remuneration Report continued
3 Executive remuneration outcomes
3.1 Financial Performance
Details of Nufarm’s performance, share price and dividends over the past five years are summarised in the table below:
Performance measures3
FY21
Sept 202
FY20
FY19
FY18
FY17
Continuing group1
Total Group (continuing and
discontinued operations)
Earnings
Underlying EBITDA*
Underlying EBIT*
Underlying NPAT*
ANWC/Sales**
ROFE achieved
Shareholder value
TSR
Dividends declared
Closing share price
$m
$m
$m
%
%
%
Cents
$
361.1
153.1
61.1
34.3
5.9
(45.3)
4.0
4.80
(43.4)
(78.8)
(85.9)
44.7
n/a
(4.2)
–
3.85
235.8
34.4
(80.6)
46.4
1.2
(49.2)
–
4.02
300.1
135.3
39.6
47.7
4.6
(31.0)
–
4.88
385.7
265.1
98.4
40.3
9.4
(13.9)
11.0
7.03
390.0
302.3
135.8
36.8
13.6
3.5
13.0
8.10
1. Performance measures for the periods FY19, FY20, Sept 20 and FY21 are presented on a continuing operations basis.
2. ‘Sept 20’ in this table represents the 2 months ended 30 September 2020.
3. Performance metrics for Sept 20, FY20, FY19, FY18 and FY17 have not been restated for the change in accounting policy as per note 3(a)(ii) of the consolidated
financial statements contained within this annual report.
* Underlying EBIT is earnings before net finance costs, taxation and material items. Underlying EBITDA is underlying EBIT before depreciation, amortisation,
and material items. Underlying NPAT is Net Profit/(Loss) after Tax before material items. Underlying NPAT, Underlying EBIT and Underlying EBITDA are used internally
by management to assess performance of the business and make decisions on the allocation of our resources. Underlying NPAT, rather than Underlying EBIT
or Underlying EBITDA, is used as a gateway metric for 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 management of working capital over the full year and is calculated excluding
non-operating corporate revenue.
3.2 Short Term Incentive outcomes
Based on an underlying NPAT result of $61.1 million, underlying EBIT result of $153.1 million, ANWC/Sales % result of 34.3 per cent
and performance against individual and strategic business improvement objectives, Executive KMPs employed for the performance
period FY21 were awarded an incentive in accordance with the rules of the plan.
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 executive’s role and included organisation restructuring, management of risk,
efficiency improvements, partnership development, portfolio enhancement, business process and systems improvements and the
implementation of initiatives to support growth in higher value segments.
Given the announcement on 14 September 2020 of Paul Binfield’s resignation effective 31 December 2020, Mr Binfield was not
eligible to participate in the FY21 STI plan and has not been included in the below tables relating to STI achievement. An STI cash
bonus of $50,000 was paid to Mr Binfield upon achievement of the delivery of a report recasting how operating expense savings
could be accelerated into FY21.
a) FY21 STI plan payment results
Outcomes against targets for Executive KMPs are shown below:
Executive KMPs
Group uNPAT
Greg Hunt
Paul Townsend
Elbert Prado
Gateway achieved
Gateway achieved
Gateway achieved
● Below threshold ● Between threshold and target ● Above target
Financial: Weighting and outcome*
Group uEBIT
Group ANWC/
sales %
Group cash
SG&A
Team metrics
40% ●
40% ●
40% ●
40% ●
40% ●
40% ●
10% ●
10% ●
10% ●
10% ●
10% ●
10% ●
*
Nufarm’s objective is to be as transparent as possible, without disclosing commercially sensitive information. Consequently, while STI measures, weighting
and performance in FY21 for executive KMPs have been provided above, the specific targets have not.
66
Nufarm Limited | Annual Report 2021
The table below displays FY21 STI payments as a percentage of FAR and also as a percentage of target opportunity.
Executive KMPs
At target $ At maximum $
Total Award $
2021 STI potential
FY21 STI
Award as a %
of target
potential
FY21 STI
as % of FAR
To be paid in
cash in
December
2021
Retained
as rights
vesting on
30 September
2023
Greg Hunt
Paul Townsend*
Elbert Prado
Executive KMP average
989,766
1,484,649
1,395,531
376,294
367,972
578,011
564,441
551,958
867,016
530,559
518,826
814,972
141%
141%
141%
141%
106%
70%
70%
82%
697,766
265,280
259,413
407,486
697,766
265,280
259,413
407,486
*
Paul Townsend begun as a KMP on 1 December 2020 following his appointment as CFO. Figures provided above are based on a pro-rata from 1 December 2020
to 30 September 2021.
b) Historical STI plan performance relative to Nufarm’s uNPAT results
The following chart compares Nufarm’s historical STI plan performance results against underlying NPAT for the same period.
Nufarm’s incentive plans measure performance against a range of financial and non-financial metrics with varied weightings.
Accordingly, the pay for performance relationship is based on the performance against these metrics as a whole and may not always
align with underlying NPAT changes.
Underlying NPAT growth vs STI outcomes
h
t
w
o
r
g
T
A
P
N
g
n
y
l
r
e
d
n
U
i
200.0%
100.0%
0.0%
-100.0%
-200.0%
-300.0%
-400.0%
FY17
FY18
FY19
Sep FY20
FY21
● Underlying NPAT % Growth
% STI outcome
FY20
160%
140%
120%
100%
80%
60%
40%
20%
0%
e
m
o
c
t
u
o
n
a
p
l
I
T
S
3.3 Long Term Incentive outcomes
The performance period for the FY19 LTI plan concluded on 30 September 2021.
The results of Nufarm’s RTSR are calculated by an external provider. The Board determined the ROFE outcome to ensure no windfall
gains or losses and accordingly adjusted for the net impact of material items. The Board approved the vesting outcomes in
accordance with the LTI plan rules.
a) FY19 LTI plan testing as at 30 September 2021
The vesting table for the FY19 LTI plan is detailed below reflecting performance up to 30 September 2021 against the two
performance measures of RTSR and ROFE.
Performance measure*
Threshold
RTSR
ROFE
Total
50% percentile
7.1%
Outcome
Below threshold
Below threshold
* Refer to section 2.3(c) for further information regarding the LTI plan measures.
% of total plan vested
0%
0%
Nil
67
Nufarm Limited | Annual Report 2021
2021 Remuneration Report continued
b) FY19 LTI award outcome
The table below details the individual outcome for the FY19 LTI plan award granted 1 August 2018.
Executive KMP
Greg Hunt
Paul Townsend*
Elbert Prado
FY19 LTI award vested 30 September 2021
Total number
of rights
available
Total number
of rights
awarded
Total award as
a % of
potential
Average
granted date
fair value of
awarded rights
Total grant
date fair value
of award $
Total grant
date fair value
of lapsed
award $
162,933
–
49,636
–
–
–
0.0%
0.0%
0.0%
n/a
n/a
n/a
–
–
–
804,889
–
245,202
* Paul Townsend did not participate in the FY19 LTI plan as he was not employed by Nufarm at the time of plan issue.
FY19 and FY20 LTI plan rights, totalling 69,734 rights and 95,544 rights respectively, for Mr Binfield were forfeited upon announcement
of his resignation on 14 September 2020 and lapsed upon his departure from Nufarm on 31 December 2021. The total grant date fair
value, that lapsed on 31 December 2021, was $344,486 for the FY19 LTI plan rights and was $399,374 for the FY20 LTI plan rights.
Historical LTI plan performance relative to Nufarm’s share price
The following chart compares Nufarm’s LTI plan vesting results for the past six LTI plans (as a percentage of plan maximum) to the
share price history during the same period. The FY16, FY17, FY18 and FY19 LTI plans did not meet hurdle and therefore are depicted
below as hollow bars.
Nufarm historical share price vs LTI outcome
$
e
c
i
r
p
e
r
a
h
S
12.00
10.00
8.00
6.00
4.00
2.00
0.00
89%
100%
0%
0%
0%
120%
0%
100%
e
m
o
c
t
u
o
n
a
p
l
I
T
L
80%
60%
40%
20%
0%
5
1
-
g
u
A
5
1
-
t
c
O
5
1
-
c
e
D
6
1
-
b
e
F
6
1
-
r
p
A
6
1
-
n
u
J
6
1
-
g
u
A
6
1
-
t
c
O
6
1
-
c
e
D
7
1
-
b
e
F
7
1
-
r
p
A
7
1
-
n
u
J
7
1
-
g
u
A
7
1
-
t
c
O
7
1
-
c
e
D
8
1
-
b
e
F
8
1
-
r
p
A
8
1
-
n
u
J
8
1
-
g
u
A
8
1
-
t
c
O
8
1
-
c
e
D
9
1
-
b
e
F
9
1
-
r
p
A
9
1
-
n
u
J
9
1
-
g
u
A
9
1
-
t
c
O
9
1
-
c
e
D
0
2
-
b
e
F
0
2
-
r
p
A
0
2
-
n
u
J
0
2
-
g
u
A
0
2
-
t
c
O
0
2
-
c
e
D
1
2
-
b
e
F
1
2
-
r
p
A
1
2
-
n
u
J
1
2
-
g
u
A
● LTI Plan
Share Price
The hollow bars indicate periods in which the LTI plans did not achieve threshold and lapsed.
3.4 Senior Executive contract details
The Company has employment contracts with the Executive KMPs. These contracts formalise the terms and conditions of employment.
The contracts are for an indefinite term. The contracts of the CEO and other Executive KMPs have been structured to be compliant
with the termination benefits cap under the Corporations Act.
The Company may terminate the contract of the CEO and other Executive KMPs by giving 6 months’ notice, in which case the
CEO and other Executive KMPs would be entitled to a termination payment of 12 months FAR inclusive of any notice paid in lieu.
The contract also provides for payment of applicable statutory entitlements.
The CEO and other Executive KMPs may terminate the contract by giving the Company 6 months’ notice.
The Company may terminate the employment contracts immediately for serious misconduct.
68
Nufarm Limited | Annual Report 2021
4. Non-executive Directors (NED) remuneration
Nufarm’s operations are managed under the direction of the
Board. The Board oversees the performance of Nufarm
management in seeking to deliver superior business and
operational performance and long-term growth in shareholder
value. The Board recognises that providing strong leadership
and strategic guidance to management is important to achieve
our goals and objectives.
Fees for Non-executive Directors are set at a level to attract
and retain Directors with the necessary skills and experience
to allow the Board to have a proper understanding of, and
competence to deal with, current and emerging issues for
Nufarm’s business. The Board seeks to attract directors with
different skills, experience, expertise, and diversity. Additionally,
when setting Non-executive Director fees, the Board takes into
account factors such as external market data on fees and the
size and complexity of Nufarm’s operations. The Non-executive
Directors’ fees are fixed, and Non-executive Directors do not
participate in any Nufarm incentive plan.
The Board’s policy with regard to NED remuneration is to position
board remuneration at the market median with comparably 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 2017 AGM,
shareholders approved an aggregate of $2,000,000 per year
(including superannuation costs). The total fees for FY21
remained within the approved cap.
Fees applicable from 1 October 2020 ($) per annum
Chairman1
Director
Audit committee Chair
Audit committee Member
Risk and Compliance committee Chair
Risk and Compliance committee Member
HR committee Chair
HR committee Member
Nominations and Governance committee Chair2
Nominations and Governance committee Member2
Innovation committee Chair3
Innovation committee Member3
392,567
160,597
27,000
13,500
27,000
13,500
27,000
13,500
20,250
10,125
27,000
13,500
1. The Chairman receives no fees as a member of any committee.
2. With effect from 15 July 2021 the Board changed the name of the Nomination and Governance Committee to the Nomination Committee and also agreed that
no additional fees would be payable for being a member or Chair of this Committee.
3. The Innovation committee was effective 15 July 2021.
69
Nufarm Limited | Annual Report 2021 2021 Remuneration Report continued
5. Remuneration tables
5.1 Remuneration of directors and disclosed executives
Short Term
Post-
employment
Share based
payments
(SBP)
Total
In AUD
Period1
Salary
and Fees
$
Cash
Bonus
(Vested)
$
Other
benefits2
$
Total
short
term
$
Other
long
term3
$
Super-
annuation
$
Term-
ination
benefits
$
Equity
settled
expenses
$
Total
Remun-
eration
$
Percen-
tage of
remun-
eration
perform-
ance
based
%
SBP
expense
as a
prop-
ortion of
total
remun-
eration
%
Directors’ Non-executive
DG McGauchie4
2021
–
J Gillam5
AB Brennan6
GR Davis
F Ford
D Jones7
P Margin
M McDonald
L Saint8
T Takasaki
Sub total
Non-executive
Directors
remuneration
2020
59,480
2021
360,980
2020
24,862
2021
36,676
2020
28,424
2021
195,088
2020
32,515
2021
175,145
2020
31,429
2021
49,424
2020
–
2021
211,785
2020
36,822
2021
187,929
2020
32,963
2021
135,542
2020
–
2021
158,270
2020
26,378
2021 1,510,839
2020 272,873
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
59,480
360,980
24,862
36,676
28,424
195,088
32,515
175,145
31,429
49,424
–
211,785
36,822
187,929
32,963
135,542
–
158,270
26,378
– 1,510,839
–
272,873
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,948
36,098
2,486
3,668
2,842
19,509
3,251
17,515
3,143
–
–
–
–
18,793
3,296
13,554
–
15,827
2,638
124,964
23,604
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
65,428
397,078
27,348
40,344
31,266
214,597
35,766
192,660
34,572
49,424
–
211,785
36,822
206,722
36,259
149,096
–
174,097
29,016
– 1,635,803
–
296,477
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
70
Nufarm Limited | Annual Report 2021
Short Term
Post-
employment
Share based
payments
(SBP)
Total
Salary
and Fees
$
Cash
Bonus
(Vested)
$
Other
benefits2
$
Total
short
term
$
Other
long
term3
$
Super-
annuation
$
Term-
ination
benefits
$
Equity
settled
expenses
$
Total
Remun-
eration
$
In AUD
Period1
Executive Director
Percen-
tage of
remun-
eration
perform-
ance
based
%
SBP
expense
as a
prop-
ortion of
total
remun-
eration
%
GA Hunt
2021 1,294,063
697,766
49,895 2,041,724
32,340
25,625
Total
Directors’
remuneration
2020
215,781
–
–
215,781
–
4,167
2021 2,804,902 697,766
49,895 3,552,563
32,340
150,589
2020 488,654
–
–
488,654
–
27,771
–
–
–
–
472,103 2,571,792
47,556
267,504
472,103 4,207,595
47,556
563,981
45%
18%
–
–
18%
18%
–
–
Group Executives
PA Binfield9
2021
205,556
50,000
(31,485)
224,071
(176,610)
6,250
213,492
–
267,203
19%
0%
2020
137,037
–
–
137,037
E Prado
2021
706,740
259,413
60,160 1,026,313
2020
122,329
–
10,326
132,655
–
–
–
4,167
45,469
–
P Townsend10
2021
603,047
265,280
18,871
887,198
15,098
21,458
2020
2021
–
–
2020
74,909
–
–
–
–
–
–
–
–
–
–
–
7,608
82,517
4,146
8,240
–
–
–
–
–
–
–
179,271 1,251,053
19,072
151,727
162,093 1,085,847
–
–
–
–
3,647
98,550
(244,547)
(103,343)
237%
237%
2021 1,515,343 574,693
47,546 2,137,582 (161,512)
73,177 213,492 341,364 2,604,103
2020 334,275
–
17,934
352,209
4,146
12,407
– (221,828)
146,934
2021 4,320,245 1,272,459 97,441 5,690,145 (129,172)
223,766 213,492 813,467 6,811,698
2020 822,929
–
17,934
840,863
4,146
40,178
– (174,272)
710,915
37%
13%
39%
0%
0%
4%
–
–
–
–
15%
13%
15%
0%
0%
4%
–
–
–
–
B Zacharias11
Sub total –
total executive
remuneration
Total directors
and executive
remuneration
1. ‘2021’ in this table represents the 12 months ended 30 September 2021; ‘2020’ in this table represents the two-month period ending 30 September 2020.
2. Other benefits includes movements in annual leave accrual. For overseas based Executives other benefits include reimbursement of taxation services and other costs.
A negative balance may appear where the leave accrual has decreased from the prior year.
3. Other long term includes movement in long service leave provisions. A negative balance may appear where the leave accrual has decreased from the prior year.
4. Mr DG McGauchie ceased to be a KMP on 24 September 2020 following his resignation.
5. Mr J Gillam was appointed Chairman from the 24 September 2020.
6. Ms AB Brennan ceased to be a KMP on 18 December 2020 following her retirement.
7. Mr D Jones begun as a KMP following his appointment to the board effective 23 June 2021.
8. Ms L Saint begun as a KMP following her election to the board on 18 December 2020.
9. Mr P Binfield announced his resignation on 14 September 2020 and therefore forfeited his equity based compensation in accordance with the plan rules, resulting
in negative renumeration from the reversal of prior awards. An STI cash bonus was paid to Mr Binfield upon achievement of the delivery of a report recasting how
operating expense savings could be accelerated into FY21. Upon departure from Nufarm, Mr Binfield received a termination payment consisting of annual and long
service leave accrued.
10. Mr P Townsend begun as a KMP following his appointment to CFO on 1 December 2020.
11. Mr B Zacharias ceased to be a KMP on 1 October 2020.
71
Nufarm Limited | Annual Report 2021
2021 Remuneration Report continued
5.2 Equity instruments held by disclosed executives
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; and
• shares in the Company
that were held during the financial year by disclosed executives 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 October
2020
Granted
as remun-
eration(f) Exercised
Forfeited
or
lapsed
Net
change
other(e)
Balance
at 30 Sept
2021(d)
Vested
during
2020
Vested
at 30 Sept
Value at
date of for-
2021(a)
feiture(c)
Executive Director
G Hunt
LTI performance
322,389
233,948
STI deferred(b)
–
Executive KMP
P Binfield(g)
LTI performance
165,278
STI deferred(b)
P Townsend
LTI performance
STI deferred(b)
–
–
–
–
–
–
74,161
–
E Prado
LTI performance
100,266
67,867
–
–
–
–
–
–
–
STI deferred(b)
12,456
B Zacharias(e)
LTI performance
–
STI deferred(b)
10,575
–
–
–
Total
LTI performance
587,933
375,976
(12,456)
–
–
–
STI deferred(b)
23,031
–
(12,456)
Non-KMP Officers
F Smith
LTI performance
36,248
53,183
STI deferred(b)
–
–
–
–
(162,933)
–
(165,278)
–
–
–
(49,636)
–
–
–
–
–
–
–
–
–
–
–
–
(10,575)
393,404
–
–
–
74,161
–
118,497
–
–
–
(377,847)
–
586,062
–
–
–
–
–
–
–
12,456
–
–
–
–
–
–
(10,575)
–
12,456
–
–
89,431
–
–
–
–
–
782,078
–
–
–
–
–
–
–
–
–
–
–
–
–
636,320
–
–
–
238,253
–
–
–
1,656,651
–
–
–
Total
647,212
429,159
(12,456)
(377,847)
(10,575)
675,493
12,456
– 1,656,651
(a) All options/rights that are vested are exercisable.
(b) No deferred shares were granted during the year ended 30 September 2021 in relation to the year ended 31 July 2020 or the two months ended 30 September 2020.
Deferred shares granted as remuneration on the back of the current year STI outcomes will be determined and allocated in December 2021.
(c) 100% of LTI performance rights due to vest in the year ended 30 September 2021 were forfeited due to a failure to satisfy service or performance conditions. The value
of the LTI performance rights forfeited is expressed in the table above using the share price of the Company as at the date of forfeiture.
(d) 246,334 of the total LTI performance rights held by KMPs or Non-KMP Officers are due to vest in the period ending 30 September 2022, with the remaining unvested
balance due to vest in the period ending 30 September 2023.
(e) ‘Net change other’ reflects changes to KMPs and Non-KMP Officers during the period.
(f) The number of LTI performance rights granted as remuneration during FY21 were determined by dividing the KMP’s total LTI grant opportunity by $4.23, being the
five-day VWAP post the announcement of the group’s annual results for the year ended 31 July 2020.
(g) On 14 September 2020, Mr Binfield announced his resignation from Nufarm. Upon leaving Nufarm on 31 December 2020, in accordance with the long-term incentive
plan rules, Mr Binfield forfeited all of his LTI rights.
72
Nufarm Limited | Annual Report 2021
5.3 Shares held in Nufarm Ltd
During FY21 the Board introduced a Non-executive Director Minimum Shareholding Policy which applies to all Non-executive
Directors except for any nominee directors appointed to the Board. The Policy requires that Non-executive Directors are required to
accumulate and then hold a minimum holding of Nufarm securities equivalent to 100 per cent of their total pre-tax annual base fee
including superannuation. This minimum holding is to be achieved within five years of appointment or for those Non-executive
Directors who were a member of the Board at the date the Policy was adopted, within five years of the adoption. At the date the Policy
was adopted (19 May 2021) the minimum share holding requirement was 31,492 shares. In line with the Minimum Shareholding Policy
and the transitional arrangements all applicable Non-executive Directors comply with the Policy.
Balance as at 1
October 2020
Granted as
remuneration
On exercise of
rights
Net change
other
Balance as at
30 September
2021
Directors
JC Gillam
AB Brennan1
GR Davis
FA Ford
GA Hunt
DJ Jones2
PM Margin
ME McDonald
LD Saint
T Takasaki
Executive KMP
E Prado
P Townsend
P Binfield3
B Zacharias4
Total
185,000
14,156
71,609
51,400
544,812
–
3,480
22,327
–
–
–
40,824
–
198,348
42,443
1,174,399
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
12,456
–
–
–
–
185,000
(14,156)
–
–
20,035
82,000
10,426
12,500
6,659
–
–
(35,451)
11,000
(198,348)
(42,443)
–
71,609
51,400
564,847
82,000
13,906
34,827
6,659
–
–
17,829
11,000
–
–
12,456
(147,778)
1,039,077
1. Net change other for AB Brennan reflects that she has ceased to be a director from 18 December 2020.
2. Net change other for DJ Jones reflects the shares held when appointed as a director.
3. Net change other for P Binfield reflects that he has ceased to be a KMP on 31 December 2020.
4. Net change other for B Zacharias reflects that he has ceased to be a KMP on 1 October 2020.
73
Nufarm Limited | Annual Report 2021
2021 Remuneration Report continued
Shares issued as a result of the exercise of options
There were nil (2020: nil) shares issued as a result of the exercise of options during the year.
Unissued shares under option
There are nil (2020: nil) unissued shares under option.
Loans to key management personnel
There were no loans to key management personnel at 30 September 2021 (2020: 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 arms-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.
JC Gillam
Director
Melbourne
17 November 2021
GA Hunt
Director
74
Nufarm Limited | Annual Report 2021 Auditors’ Independence Declaration
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 of Nufarm Limited for the
financial year ended 30 September 2021 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Chris Sargent
Partner
Melbourne
17 November 2021
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo
are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a
scheme approved under Professional Standards Legislation.
Nufarm Limited | Annual Report 2021
75
76
Nufarm Limited | Annual Report 2021 Consolidated financial statements
for the year ended 30 September 2021
Contents
Consolidated statement of profit or loss
and other comprehensive income
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to the consolidated financial statements
1 Reporting entity
2 Basis of preparation
3 Significant accounting policies
4 Determination of fair values
5 Operating segments
6
Individually material income and expense items
7 Other income
8 Other expenses
9 Personnel expenses
10 Finance income and expense
11 Income tax expense
12 Cash and cash equivalents
13 Trade and other receivables
14 Inventories
15 Tax assets and liabilities
78
80
81
82
84
84
84
86
97
98
102
104
104
104
105
106
107
107
107
108
18 Property, plant and equipment
19 Intangible assets
20 Trade and other payables
21 Interest-bearing loans and borrowings
22 Employee benefits
23 Share-based payments
24 Provisions
25 Capital and reserves
26 Earnings per share
111
112
114
115
117
119
121
121
123
27 Financial risk management and financial instruments 124
28 Leases
29 Capital commitments
30 Contingencies
31 Group entities
32 Company disclosures
33 Deed of cross guarantee
34 Related parties
35 Auditors' remuneration
36 Subsequent events
Directors’ declaration
Independent Audit Report
16 Investments accounted for using the equity method 110
Shareholder and Statutory Information
17 Other investments
110
Corporate Information
133
134
134
135
139
140
142
143
143
144
145
151
IBC
77
Nufarm Limited | Annual Report 2021 Consolidated statement of profit or loss
and other comprehensive income
For the 12 months ended 30 September 2021
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 profits/(losses)
Financial income
Financial expenses excluding foreign exchange gains/(losses)
Net foreign exchange gains/(losses)
Net financial expenses
Net financing costs
Profit/(loss) before income tax
Income tax benefit/(expense)
Profit/(loss) for the period
Attributable to:
Equity holders of the group
Consolidated
12 months to
30 Sep 2021
$000
Note
Restated*
2 months to
30 Sep 2020
$000
3,215,651
267,320
(2,380,946)
(227,400)
834,705
39,920
7
16
10
10
10
9,021
(477,623)
(172,890)
(36,663)
427
1,114
(78,337)
(44,387)
(6,132)
(48)
156,977
(87,870)
1,616
(60,104)
(2,802)
(62,906)
(61,290)
467
(9,815)
(4,659)
(14,474)
(14,007)
95,687
(101,877)
11
(30,559)
9,018
65,128
(92,859)
65,128
(92,859)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the attached notes.
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
78
Nufarm Limited | Annual Report 2021 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:
Gains/(losses) due to changes in fair value of other investments
Actuarial gains/(losses) on defined benefit plans
Income tax on share based payment transactions
Consolidated
12 months to
30 Sep 2021
$000
Note
Restated*
2 months to
30 Sep 2020
$000
65,128
(92,859)
14,365
227
1,659
270
12,033
680
(4,088)
(78)
(1,426)
–
(417)
–
Other comprehensive profit/(loss) for the period, net of income tax
29,234
(6,009)
Total comprehensive profit/(loss) for the period
94,362
(98,868)
Attributable to:
Equity holders of the group
Earnings per share
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
94,362
(98,868)
26
26
15.2
15.1
(24.5)
(24.5)
The amounts recognised directly in equity are disclosed net of tax.
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the attached notes.
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
79
Nufarm Limited | Annual Report 2021 Consolidated balance sheet
As at 30 September 2021
Current 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 group
Other securities
TOTAL EQUITY
The consolidated balance sheet is to be read in conjunction with the attached notes.
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
80
Consolidated
Note
30 Sep 2021
$000
Restated*
30 Sep 2020
$000
12
13
14
15
13
16
17
15
18
19
20
21
22
15
24
20
21
15
22
724,215
811,714
423,914
859,035
976,163
1,046,929
22,709
22,593
2,534,801
2,352,471
1,427
3,750
4,267
142,612
441,367
3,119
2,259
394
147,981
436,685
1,243,831
1,306,349
1,837,254
1,896,787
4,372,055
4,249,258
933,446
252,536
19,234
4,434
13,778
861,030
234,313
16,703
11,113
33,557
1,223,428
1,156,716
5,777
788,496
133,893
98,998
5,995
795,808
148,146
112,165
1,027,164
1,062,114
2,250,592
2,218,830
2,121,463
2,030,428
1,835,888
1,834,934
94,992
74,679
(56,349)
(126,117)
1,874,531
1,783,496
25
246,932
246,932
2,121,463
2,030,428
Nufarm Limited | Annual Report 2021 Consolidated statement of cash flows
For the 12 months ended 30 September 2021
Cash flows from operating activities
Profit/(loss) for the period – after tax
Adjustments for:
Tax expense/(benefit)
Net finance expense
Depreciation & amortisation
Inventory write down
Share of (profits)/losses of associates net of tax
Other
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
Cash generated from operations
Interest received
Dividends received
Interest paid
Taxes paid
Net operating cash flows
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Payments for plant and equipment
Payments for other investments, associates or joint ventures
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
Lease liability payments
Distribution to other securities holders
Dividends paid
Net financing cash flows
Net increase/(decrease) in cash and cash equivalents
Cash at the beginning of the period
Exchange rate fluctuations on foreign cash balances
Cash and cash equivalents at period end date
Consolidated
12 months to
30 Sep 2021
$000
Note
Restated*
2 months to
30 Sep 2020
$000
65,128
(92,859)
8
16
30,559
58,488
208,007
16,853
(427)
(221)
49,013
53,912
18,824
10,515
(9,018)
9,348
33,817
6,628
48
6,793
123,105
(120,751)
(82,986)
6,215
510,651
(119,660)
1,616
14
(56,837)
(31,253)
467
–
(2,132)
(8,664)
6
424,191
(129,989)
780
(48,809)
(4,592)
(93,678)
6
(146,299)
90
(2,895)
–
(14,300)
(17,105)
21
21
21
21
25
25
6
(1,437)
467,488
(131)
13,629
(416,788)
(124,326)
(19,851)
(10,229)
–
(3,996)
–
–
19,183
(114,824)
297,075
423,914
3,226
(261,918)
686,552
(720)
12
724,215
423,914
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the attached notes.
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
81
Nufarm Limited | Annual Report 2021 Consolidated statement of changes in equity
For the 12 months ended 30 September 2021
Consolidated
Attributable to equity holders of the group
Share
capital
$000
Translation
reserve
$000
Capital
profit
reserve
$000
Other
reserve
$000
Retained
earnings
$000
Total
$000
Other
securities
$000
Total
equity
$000
Balance as at 1 August 2020
1,834,934
50,884
33,627
(4,706)
(18,048)
1,896,691
246,932
2,143,623
Change in accounting policy
–
–
–
–
(14,793)
(14,793)
–
(14,793)
Balance as at 1 August 2020 (restated)
1,834,934
50,884
33,627
(4,706)
(32,841)
1,881,898
246,932
2,128,830
Restated profit/(loss) for the period*
Other comprehensive income
Foreign exchange translation differences
Gains/(losses) on cash flow hedges taken to equity
Gains/(losses) on net investment hedges taken
to equity
Actuarial gains/(losses) on defined benefit plans
Income tax on share based payment transactions
Total comprehensive income/(loss)
for the period
Transactions with owners, recorded directly
in equity
Employee share award entitlements and share
issuances
Dividends paid to shareholders
Dividend reinvestment plan
Distributions to other security holders
–
–
–
–
–
–
–
–
–
–
–
–
(4,088)
–
–
–
–
–
–
–
–
–
–
–
(92,859)
(92,859)
–
(92,859)
–
(78)
–
–
(4,088)
(78)
(1,426)
–
(1,426)
–
–
(417)
(417)
–
–
–
–
–
–
–
(4,088)
(78)
(1,426)
(417)
–
(4,088)
–
(1,504)
(93,276)
(98,868)
–
(98,868)
–
–
–
–
–
–
–
–
466
–
–
–
–
–
–
–
466
–
–
–
–
–
–
–
466
–
–
–
Balance at 30 September 2020 (restated)
1,834,934
46,796
33,627
(5,744)
(126,117)
1,783,496
246,932
2,030,428
82
Nufarm Limited | Annual Report 2021 Consolidated
Attributable to equity holders of the group
Share
capital
$000
Translation
reserve
$000
Capital
profit
reserve
$000
Other
reserve
$000
Retained
earnings
$000
Total
$000
Other
securities
$000
Total
equity
$000
Balance at 1 October 2020
1,834,934
46,796
33,627
(5,744)
(126,117)
1,783,496
246,932
2,030,428
Profit/(loss) for the period from continuing operations
Other comprehensive income
Foreign exchange translation differences
Gains/(losses) on cash flow hedges taken to equity
Gains/(losses) on net investment hedges taken
to equity
Gains/(losses) due to changes in fair value
of other investments
Actuarial gains/(losses) on defined benefit plans
Income tax on share based payment transactions
Total comprehensive income/(loss)
for the period
Transactions with owners, recorded
directly in equity
Employee share award entitlements and share
issuances
Dividends paid to shareholders
Dividend reinvestment plan
Distributions to other security holders
–
–
–
–
–
–
–
–
14,365
–
–
–
–
–
–
–
–
–
–
–
–
–
65,128
65,128
–
65,128
–
227
1,659
270
–
–
–
–
14,365
227
1,659
270
–
12,033
12,033
680
–
680
–
–
–
–
–
–
14,365
227
1,659
270
12,033
680
–
14,365
–
2,836
77,161
94,362
–
94,362
954
–
–
–
–
–
–
–
–
–
–
–
3,112
–
–
–
–
–
–
4,066
–
–
(7,393)
(7,393)
–
–
–
–
4,066
–
–
(7,393)
Balance at 30 September 2021
1,835,888
61,161
33,627
204
(56,349)
1,874,531
246,932
2,121,463
The amounts recognised directly in equity are disclosed net of tax.
The consolidated statement of changes in equity is to be read in conjunction with the attached notes.
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
83
Nufarm Limited | Annual Report 2021 Notes to the consolidated 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 30 September 2021 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. Following the
divestment of the South American crop protection businesses
on 1 April 2020 Nufarm changed its financial year-end to
better align reporting periods with key sales periods and
enable improved comparison with industry peers. In
accordance with International Financial Reporting Standards
comparative information is presented as the 2 months ending
30 September 2020.
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. Operating profits/
(losses) may fluctuate throughout the year due to seasonality
inherent within the crop protection and seed technology
markets, and the geography of operations.
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) issued by the
Australian Accounting Standards Board (AASB) and the
Corporations Act 2001. The consolidated financial statements
comply with International Financial Reporting Standards (IFRSs)
issued by the International Accounting Standards Board (IASB).
Changes to significant accounting policies are described
in note 3.
The consolidated financial statements were authorised for issue
by the Board of Directors on 17 November 2021.
(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, and defined
benefit fund obligations that are 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 methods
used to measure fair values are discussed further in note 4.
(c) Functional and presentation currency
These consolidated financial statements are presented in
Australian dollars, which is the company’s functional and
presentation currency. The company is of a kind referred to in
ASIC Corporations (Rounding in Financial/Director’s Reports)
Instrument 2016/191 and, in accordance with that Instrument,
all financial information presented in Australian dollars has been
rounded to the nearest thousand dollars unless otherwise stated.
(d) Use of estimates and judgements
The preparation of financial statements requires management
to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. Actual results may
differ from these estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the 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 the group making assumptions about
the timing of cash inflows and outflows, growth assumptions,
discount rates and cost of debt.
(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, using the higher of a value in use
(VIU) or a fair value less cost to dispose (FVLCD) methodology
to estimate the recoverable amount of cash generating units.
VIU is determined as the present value of the estimated future
cash flows expected to arise from the continued use of the asset
in its present form and its eventual disposal.
VIU is determined by applying assumptions specific to the
group’s continued use and cannot consider future development.
The determination of recoverable value often requires the
estimation and discounting of future cash flows which is based
on information available at balance date such as expected
revenues from products, the return on assets, future costs,
growth rates, applicable discount rates and useful lives.
FVLCD is an estimate of the amount that a market participant
would pay for an asset or Cash Generating Unit (CGU), less
the cost to dispose. Fair value is generally determined using
independent market assumptions to calculate the present
value of the estimated future cash flows expected to arise from
the continued use of the asset, and its eventual sale where
a market participant may take a consistent view. Cash flows
are discounted using an appropriate discount rate to arrive
at a net present value of the asset which is compared against
the asset’s carrying value.
These estimates are subject to risk and uncertainty that may
be beyond the control of the group, hence there is a possibility
that changes in circumstances will materially alter projections,
which may impact the recoverable amount of assets at each
reporting date.
Other non-current assets are also assessed for impairment
indicators. Refer to note 19 for key assumptions made
in determining the recoverable amounts of the CGU's.
84
Nufarm Limited | Annual Report 2021 (iii) Income taxes
(vi) Capitalised development costs
Development expenditure is recognised as an intangible asset
when the group judges and can 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.
The criteria above are derived from independent valuations and
predicated on estimates and judgements including future cash
flows, revenue streams and value in use calculations. Estimates
and assumptions may change as new information becomes
available. If, after having commenced the development activity,
a judgement is made that the intangible asset is impaired, the
appropriate amount will be written off to the income statement.
(vii) 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. The
group assesses intellectual property to have a finite life.
Changes to estimates related to the useful life of intellectual
property are accounted for prospectively and may affect
amortisation rates and intangible asset carrying values.
(viii) Coronavirus (Covid-19)
The group has carefully considered the effect of the Coronavirus in
preparing its financial statements for the year ended 30 September
2021. Where applicable, the group has incorporated judgements,
estimates and assumptions specific to the impact of the
Coronavirus in determining the amounts recognised in the financial
statements. This was done based on conditions existing at balance
sheet date, recognising that an element of uncertainty still exists.
(e) Reclassification
Where applicable comparatives are adjusted to present them
on the same basis as current period figures.
Uncertain tax matters:
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. The group has exercised
judgement in the application of tax legislation and its interaction
with income tax accounting principles. 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 recognised on the balance sheet and the amount
of other tax losses and temporary differences not yet recognised
in the period in which the tax determination is made.
Deferred tax:
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. Judgement is required by
the group to determine the likely timing and the level of future
taxable income. The group assesses the recoverability of
recognised and unrecognised deferred taxes including losses
in Australia and overseas incorporating assumptions including
expected revenues from products, the return on assets, future
costs, growth rates and useful lives.
Deferred tax liabilities arising from temporary differences
in investments, caused principally by retained earnings held
in foreign tax jurisdictions, are recognised unless repatriation
of retained earnings can be controlled and are not expected
to occur in the foreseeable future.
(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 and requires the
exercise of judgement in relation to assumptions for expected
future salary levels, long term price inflation and bond rates,
experience of employee departures and periods of service.
Refer to note 22 for details of the key assumptions used in
determining the accounting for these plans.
(v) Working capital
In the course of normal trading activities, the group uses
judgement in establishing the carrying value of various elements
of working capital, which is principally inventories and trade
receivables. Judgement is required to estimate the provision
for obsolete or slow moving inventories and bad and doubtful
receivables. In estimating the provision for obsolete or slow
moving inventories the group considers the net realisable value
of inventory using estimated market price less cost to sell.
In estimating the provision for bad and doubtful receivables
the group measures the expected credit losses (ECLs) using
key assumptions to determine a probability weighted basis
including the geographical location’s specific circumstances.
Actual expenses in future periods may be different from the
provisions established and any such differences would impact
future earnings of the group.
85
Nufarm Limited | Annual Report 2021 3 Significant accounting policies
Except as described 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.
(a) Impact of new accounting standards and
interpretation and changes in accounting policies
(i) New and amended accounting standards and
interpretations adopted by the group
In the current year the group has adopted all of the following
new and revised Standards and Interpretations issued by the
AASB that are relevant to its operations and effective for the
current financial reporting period. Their adoption has not had
a material impact on the disclosures or amounts reported in
these financial statements except for International Financial
Reporting Standards Interpretations Committee (IFRIC)
agenda decisions on Cloud Computing Arrangement Costs
documented below:
• AASB 2018-6 Amendments to Australian Accounting
Standards – Definition of a Business
• AASB 2018-7 Amendments to Australian Accounting
Standards – Definition of Material
• AASB 2019-1 Amendments to Australian Accounting
Standards – References to the Conceptual Framework
• IFRIC agenda decisions on Cloud Computing
Arrangement Costs
Impact on consolidated balance sheet
(ii) IFRIC agenda decisions on Cloud Computing
Arrangement Costs
IFRIC issued two final agenda decisions which impact the
group's accounting policy with respect to Cloud Computing
arrangements (commonly known as Software-as-a-Service
(SaaS)) arrangements:
• Customer’s right to receive access to the supplier’s software
hosted on the cloud (March 2019) – this decision considers
whether a customer receives a software asset at the contract
commencement date or a service over the contract term.
• Configuration or customisation costs in a cloud computing
arrangement (April 2021) – this decision discusses whether
configuration or customisation expenditure relating to SaaS
arrangements can be recognised as an intangible asset and
if not, over what time period the expenditure is expensed.
The group’s accounting policy has historically been to capitalise
all costs related to the configuration and customisation of SaaS
arrangements as intangible assets in the Statement of Financial
Position. The adoption of the above agenda decisions has resulted
in a reclassification of these intangible assets to be recognised
as an expense in the Statement of Comprehensive Income.
Historical financial information has been restated to account for
the impact of the change in accounting policy in relation to SaaS
arrangements, as follows:
As previously
reported
$000
SaaS
restatement
$000
Restated
$000
1,328,906
(22,557)
1,306,349
141,731
6,250
147,981
1,913,094
(16,307)
1,896,787
4,265,565
(16,307)
4,249,258
2,046,735
(16,307)
2,030,428
(109,810)
(16,307)
(126,117)
2,046,735
(16,307)
2,030,428
As previously
reported
$000
SaaS
restatement
$000
Restated
$000
1,339,016
(20,364)
1,318,652
133,302
5,571
138,873
1,917,692
(14,793)
1,902,899
4,535,169
(14,793)
4,520,376
2,143,623
(14,793)
2,128,830
(18,048)
(14,793)
(32,841)
2,143,623
(14,793)
2,128,830
30 September 2020
Intangible assets
Deferred tax assets
Non-current assets
Total assets
Net assets
Retained earnings
Total equity
31 July 2020
Intangible assets
Deferred tax assets
Non-current assets
Total assets
Net assets
Retained earnings
Total equity
8686
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued Impact on consolidated statement of profit or loss and other comprehensive income
2 months ended 30 September 2020
General and administrative expenses
Operating profits/(losses)
Profit/(loss) before income tax
Income tax benefit/(expense)
Profit/(loss) for the period
Total comprehensive profit/(loss) for the period
Earnings per share (cents)
Basic
Diluted
Impact on consolidated statement of cash flows
2 months ended 30 September 2020
Profit/(loss) for the period – after tax
Tax expense/(benefit)
Depreciation & amortisation
Cash generated from operations
Net operating cash flows
As previously
reported
$000
SaaS
restatement
$000
(42,194)
(85,677)
(99,684)
8,339
(91,345)
(97,354)
(2,193)
(2,193)
(2,193)
679
(1,514)
(1,514)
Restated
$000
(44,387)
(87,870)
(101,877)
9,018
(92,859)
(98,868)
(24.1)
(24.1)
(0.4)
(0.4)
(24.5)
(24.5)
As previously
reported
$000
SaaS
restatement
$000
(91,345)
(8,339)
35,436
(115,848)
(126,177)
(1,514)
(679)
(1,619)
(3,812)
Restated
$000
(92,859)
(9,018)
33,817
(119,660)
(3,812)
(129,989)
Payments for acquired intangibles and major product development expenditure
Net investing cash flows
(18,112)
(20,917)
3,812
3,812
(14,300)
(17,105)
(iii) New and revised Australian Accounting Standards and Interpretations on issue but not yet effective
There are no standards that are not yet effective that would be expected to have a material impact on the group in the current
or future reporting periods.
8787
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 3 Significant accounting policies (continued)
(b) 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. 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. In assessing control,
the group takes into consideration potential voting rights that
currently are exercisable.
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.
(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.
When the group loses control over a subsidiary it derecognises
the assets and liabilities of the subsidiary and any related NCI
and other components of equity. Any resulting gain or loss is
recognised in profit and loss. Any interest retained is measured
at fair value when control is lost.
8888
Changes in the group's interest in a subsidiary that do not result
in a loss of control are accounted for as an equity transaction
with the owners of the group.
The accounting policies of subsidiaries have been changed
where necessary to align them with the policies adopted by
the group. Losses applicable to the NCI in a subsidiary are
allocated to the NCI even if doing so causes the NCI to have
a deficit balance.
(iv) Investments in equity accounted investees
The group's interests in equity-accounted investees comprise
interests in associates and joint ventures. 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, which includes transaction costs. The group's investment
includes goodwill identified on acquisition, net of any
accumulated impairment losses. Subsequent to initial
recognition, the consolidated financial statements include
the group's share of the income and expenses and equity
movements of the investees after adjustments to align the
accounting policies of the investees with those of the group,
until the date on which significant influence or joint control
ceases. On loss of significant influence the investment
is no longer equity accounted and is revalued to fair value.
Where the group’s share of losses in an equity-accounted
investment equals or exceeds its interest in the entity, including
any other unsecured long-term receivables, the group does not
recognise further losses, unless it has incurred obligations or
made payments on behalf of the other entity.
The carrying amount of equity-accounted investments is tested for
impairment in accordance with the policy described in note 3(i).
(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.
(c) 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.
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements 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 and accumulated in translation reserve
except to the extent that the translation difference is allocated
to NCI. When a foreign operation is disposed of, in part or in full,
the relevant amount in the translation reserve 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
translation reserve.
(d) Financial instruments
A financial instrument is any contract that gives rise to a financial
asset of one entity and a financial liability or equity instrument
of another entity.
(i) Non-derivative financial assets
Financial assets are classified, at initial recognition, as
either measured at amortised cost, fair value through other
comprehensive income (FVOCI), or fair value through profit
or loss (FVTPL).
The classification of financial assets at initial recognition
depends on the financial asset’s contractual cash flow
characteristics and the group’s business model for managing
them. With the exception of trade receivables, the group initially
measures a financial asset at its fair value plus transaction costs
on trade date at which the group becomes a party to the
contractual provisions of the instrument. Trade receivables that
do not contain a significant financing component are measured
at the transaction price determined under AASB 15 Revenue
from Contracts with Customers. Refer to note 3 (m).
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.
Subsequent measurement
For purposes of subsequent measurement, financial assets
are classified in four categories:
• Amortised cost
• Fair value through OCI with recycling of cumulative gains
and losses (debt instruments)
• Fair value through OCI with no recycling of cumulative
gains and losses upon derecognition (equity instruments)
• Fair value through profit or loss
Financial assets at amortised cost
This category is the most relevant to the group. Financial
assets are measured at amortised cost if both of the following
conditions are met and is not designated as FVTPL:
• The financial asset is held within a business model with the
objective to hold financial assets in order to collect contractual
cash flows; and
• The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured
using the effective interest (EIR) method and are subject
to impairment. Gains and losses are recognised in profit
or loss when the asset is derecognised, modified or impaired.
The group’s financial assets at amortised cost includes
trade receivables.
Financial assets at fair value through OCI (FVOCI) –
debt instruments
The group measures debt instruments at fair value through OCI
if both of the following conditions are met and is not designated
as FVTPL:
• The financial asset is held within a business model with the
objective of both holding to collect contractual cash flows
and selling; and
• The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Interest income, foreign exchange revaluation and impairment
losses or reversals are recognised in the statement of profit or
loss and computed in the same manner as for financial assets
measured at amortised cost. The remaining fair value changes
are recognised in OCI. Upon derecognition, the cumulative fair
value change recognised in OCI is recycled to profit or loss.
Financial assets at fair value through OCI (FVOCI) –
equity instruments
Upon initial recognition, the group can elect to classify
irrevocably its equity investments as equity instruments
designated at fair value through OCI when they meet the
definition of equity under AASB 132 Financial Instruments:
Presentation and are not held for trading. The classification
is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled
to profit or loss. Dividends are recognised as other income in
the statement of profit or loss when the right of payment has
been established, except when the group benefits from such
proceeds as a recovery of part of the cost of the financial asset,
in which case, gains are recorded in OCI.
Financial assets at fair value through profit or loss (FVTPL)
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. Financial assets with cash
flows that are not 'solely payments of principal and interest'
(SPPI) are classified and measured at fair value through profit
or loss, irrespective of the business model.
8989
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 3 Significant accounting policies (continued)
In assessing whether the contractual cash flows are SPPI, the
group considers the contractual terms of the instrument by
considering events, terms and prepayment/extension features
that could change the timing or amount of contractual cash
flows such that it would not meet this condition.
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.
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.
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
(ii) Non-derivative financial liabilities
• hedges of a net investment in a foreign operation (net
At initial recognition, financial liabilities are classified at FVTPL,
loans and borrowings, or payables, as appropriate. All financial
liabilities are recognised initially at fair value and, in the case of
loans and borrowings and payables, net of directly attributable
transaction costs.
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.
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 period which are unpaid.
The group has the following non-derivative financial liabilities:
loans and borrowings, bank overdrafts and trade and
other payables.
(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.
(iv) Other securities
Nufarm step-up securities
The Nufarm step-up securities (NSS) are classified as non-
controlling equity instruments as they are issued by a subsidiary.
After-tax distributions thereon are recognised as distributions
within equity. Further details can be found in note 25.
(v) 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 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
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 documentation includes identification of the hedging
instrument, the hedged item, the nature of the risk being hedged
and how the group will assess whether the hedging relationship
meets the hedge effectiveness requirements (including the analysis
of sources of hedge ineffectiveness and how the hedge ratio is
determined). A hedging relationship qualifies for hedge accounting
if it meets all of the following effectiveness requirements:
• There is an 'economic relationship’ between the hedged item
and the hedging instrument.
• The effect of credit risk does not ‘dominate the value changes’
that result from that economic relationship.
• The hedge ratio of the hedging relationship is the same as that
resulting from the quantity of the hedged item that the group
actually hedges and the quantity of the hedging instrument that
the group actually uses to hedge that quantity of hedged item.
Hedges that meet all the qualifying criteria for hedge accounting
are accounted for, as described below:
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 expenses.
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
9090
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 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 hedge
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.
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.
Land is not depreciated.
The estimated useful lives for the current and comparative periods
are as follows:
• buildings
• leasehold improvements
• plant and equipment
• motor vehicles
• computer equipment
15-50 years
5 years
10-15 years
5 years
3 years
Depreciation methods, useful lives and residual values are
reassessed at each reporting date.
Gains and losses accumulated in equity are reclassified to profit
or loss when the foreign operation is partially disposed of or sold.
(f) Intangible assets
(i) Goodwill
Derivatives that do not qualify or are not designated
for hedge accounting
Certain derivative instruments do not qualify, or are not
designated for hedge accounting. Changes in the fair value
of any derivative instrument that does not qualify, or is not
designated for hedge accounting are recognised immediately
in profit or loss.
(e) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost
less accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the
acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour, any other costs
directly attributable to bringing the asset to a working condition
for its intended use, and the costs of dismantling and removing
the items and restoring the site on which they are located, and
capitalised borrowing costs. Purchased software that is integral
to the functionality of the related equipment is capitalised as
part of that equipment.
When parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items
(major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant
and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property, plant
and equipment and are recognised net in profit or loss.
(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
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) 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.
Intellectual property is assessed to have a finite life. Finite life
intellectual property is amortised over its useful life but not
longer than 30 years. 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.
(iii) Computer software
Computer software is measured initially at acquisition cost or
costs incurred to develop the asset. Cost includes expenditure
that is directly attributable to the acquisition or development
of the software. Software assets acquired in a business
combination are recognised at fair value at the date of
acquisition. Following initial recognition, computer software
with finite useful lives are carried at cost less accumulated
amortisation and accumulated impairment losses. They are
amortised on a straight-line basis over their estimated useful
lives. The group adopted a change in accounting policy during
the period related to the treatment of configuration and
customisation costs related to SaaS arrangements.
Details of the change and restatement are presented in note 3(a)(ii).
9191
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 3 Significant accounting policies (continued)
(iv) 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, or for extended use of existing 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.
(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.
(e) payments of penalties for terminating the lease, if the lease term
reflects the lessee exercising an option to terminate the lease.
Lease liabilities are remeasured when there is a change
in future lease payments arising from a change in the above.
Lease liabilities are measured at amortised cost using the
effective interest method.
Interest is recognised as part of the financial expenses in the
Income Statement.
Incremental borrowing rate
The group determines its incremental borrowing rate by
obtaining interest rates from various external financing sources
and makes certain adjustments to reflect the terms of the lease
and type of the asset leased. Adjustments made relate to the
standalone borrowing capacity of entities within the group,
in addition to financing rates applicable in the geographical
regions in which it operates.
Right of use asset
The right-of-use asset is initially measured at cost, and
comprises the following (where applicable):
(a) the amount of the initial measure of the lease liability,
as described above;
(b) any lease payments made at or before the commencement
date, less any lease incentives received;
(c) any initial direct costs incurred by the lessee; and
(vi) Amortisation of intangible assets
(d) an estimate of the costs to be incurred by the lessee in
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,
for the current and comparative periods, are as follows:
• capitalised development costs
5 to 30 years
• intellectual property
over the useful life and
not more than 30 years
• computer software
3 to 7 years
Amortisation methods, useful lives and residual values are
reassessed at each reporting date.
(g) Leases
Lease liability
Lease liabilities are initially measured at the present value
of lease payments that are not paid at that date. The lease
payments are discounted using either the interest rate implicit
in the lease, where that rate can be readily determined, or the
incremental borrowing rate.
The lease payments included in the measurement of the lease
liability comprise the following (where applicable):
(a) fixed payments, less any lease incentives receivable;
(b) variable lease payments, measured using the index or rate
as at the commencement;
(c) amounts expected to be paid by the lessee under residual
value guarantees;
(d) the exercise price of a purchase option if the lessee
is reasonably certain to exercise that option; and
9292
dismantling and removing the underlying asset, restoring
the site on which it is located or restoring the underlying
asset to the condition required by the lease terms and
conditions of the lease, unless those costs are incurred
to produce inventories.
The right-of-use asset is depreciated on a straight-line basis
over the shorter of the lease term and the useful life.
Determining the lease term
The lease term is the non-cancellable period of a lease,
together with both:
(a) periods covered by an option to extend the lease, if the
lessee is reasonably certain to exercise that option; and
(b) periods covered by an option to terminate the lease, if the
lessee is reasonably certain not to exercise that option.
The lease term is revised if there is a change in the non-
cancellable period of a lease.
Short term/low value leases
Leases with a short term (duration of a year or less at the time of
commencement) and leases which are low value are expensed
on a straight line basis over the lease term.
(h) 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.
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued (i) Impairment
(i) Non-derivative financial assets
The group recognises an allowance for expected credit losses
(ECLs) for all financial assets at amortised cost and debt
instruments not held at fair value through profit or loss. ECLs are
based on the difference between the contractual cash flows due
in accordance with the contract and all the cash flows that the
group expects to receive, discounted at an approximation of
the original effective interest rate. The expected cash flows will
include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
For trade receivables, the group applies a simplified approach
in calculating ECLs. Therefore, the group does not track
changes in credit risk, but instead recognises a loss allowance
based on lifetime ECLs at each reporting date. The group has
established a provision matrix that is based on its historical
credit loss experience, adjusted for forward-looking factors
specific to the debtors and the economic environment.
The group considers a financial asset to be in default when
contractual payments are 90 days past due. However, in certain
cases, the group may also consider a financial asset to be in
default when internal or external information indicates that the
group is unlikely to receive the outstanding contractual amounts
in full before taking into account any credit enhancements held
by the group. A financial asset is written off when there is no
reasonable expectation of recovering the contractual cash flows.
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. Loss allowances for financial
assets measured at amortised cost are deducted from the gross
carrying amount of the assets. For debt securities at FVOCI, the
loss allowance is charged to profit or loss and is recorded in OCI.
(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 of
disposal. 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 or joint venture is not recognised separately, and
therefore is not tested for impairment separately. Instead, the
entire amount of the investment in an associate or joint venture
is tested for impairment as a single asset when there is objective
evidence that the investment in an associate or joint venture may
be impaired.
Refer to use of estimates and judgements note 2 and intangibles
note 19 for further information.
(j) Assets held for sale
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.
(k) 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.
9393
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 3 Significant accounting policies (continued)
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
comprises 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 other
comprehensive income (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.
(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
an expense in the profit or loss over the respective service
period, with a corresponding increase in equity. The plan
is currently suspended, refer to note 23 for further details.
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 either shares or rights to ordinary shares
which have a two year vesting period following the year in which
the short term incentives are measured. The cash portion is
recognised immediately as an expense at the time of performance
testing. The expense relating to deferred shares or rights to
ordinary shares is expensed over the vesting period including
the year in which the short term incentives are measured.
Refer to note 23 for further details on this plan.
The group has a long term incentive plan (LTIP) which is
available to key executives and certain selected senior
managers. Performance rights have been granted to acquire
ordinary shares in the group subject to the achievement of
global performance hurdles. The expense in relation to the LTIP
is recognised over the vesting period of 3 years. Refer to note 23
for further details on this plan.
(l) Provisions
(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 corporate 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.
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.
(iv) Termination benefits
(m) Revenue from contracts with customers
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
twelve 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.
9494
Revenue from contracts with customers is recognised when
control of the goods or services are transferred to the customer
at an amount that reflects the consideration to which the group
expects to be entitled in exchange for those goods or services.
The group has generally concluded that it is the principal in its
revenue arrangements, because it typically controls the goods
or services before transferring them to the customer.
(i) Goods sold
Revenue from sale of goods is recognised at the point in time
when control of the asset is transferred to the customer,
generally on delivery of the goods. The group considers whether
there are other promises in the contract that are separate
performance obligations to which a portion of the transaction
price needs to be allocated. In determining the transaction price
for the sale of goods, the group considers the effects of variable
consideration, the existence of significant financing
components, non-cash consideration, and consideration
payable to the customer (if any).
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued (ii) Variable consideration
If the consideration in a contract includes a variable amount,
the group estimates the amount of consideration to which
it will be entitled in exchange for transferring the goods to the
customer. The variable consideration is estimated at contract
inception and constrained until it is highly probable that a
significant revenue reversal in the amount of cumulative revenue
recognised will not occur when the associated uncertainty
with the variable consideration is subsequently resolved.
Some contracts for the sale of certain products provide
customers with a right of return and volume rebates. The rights
of return and volume rebates give rise to variable consideration.
Rights of return
Certain contracts provide a customer with a right to return the
goods within a specified period. The group uses the expected
value method, including applying any constraints, to determine
variable consideration to which the group will be entitled. For
goods that are expected to be returned, instead of revenue, the
group recognises a refund liability. A right of return asset (and
corresponding adjustment to cost of sales) is also recognised
for the right to recover products from a customer.
Rebates and sales incentives
The group provides rebates and sales incentives to certain
customers once thresholds specified in the contract are met
or exceeded. Rebates are offset against amounts payable by
the customer. To estimate the variable consideration for the
expected future rebates, the group applies the requirements
on constraining estimates of variable consideration and
recognises a refund liability for the expected future rebates.
(iii) End point royalties
The group receives royalty revenue from growers for certain
varieties of seed. Sales or usage based royalties are recognised
as revenue at the later of when the sales or usage occurs and
the performance obligation is satisfied, which would be when
the harvest occurs and the royalty is paid.
(iv) Significant financing components
The group may receive short-term advances from its customers.
Using the practical expedient in AASB 15, the group does not
adjust the promised amount of consideration for the effects of
a significant financing component as it is expected, at contract
inception, that the period between the transfer of the good and
when the customer pays for that good will be one year or less.
(n) 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.
(o) Finance income and finance costs
The group's finance income and finance costs include the
following: interest income, interest expense, dividends on
preference shares issued classified as financial liabilities,
financial assets, the net gain or loss on financial assets
at fair value through profit or loss, the foreign currency gain
or loss on financial assets and financial liabilities, the gain
on the remeasurement to fair value of any pre-existing interest
in an acquiree in a business combination, the fair value loss
on contingent consideration classified as a financial liability,
impairment losses recognised on financial assets (other than
trade receivables), the net gain or loss on hedging instruments
that are recognised in profit or loss, and the reclassification
of net gains or losses previously recognised in other
comprehensive income.
Interest income or expense is recognised using the effective
interest method.
Finance costs are expensed as incurred except where they
relate to the financing of construction or development of
qualifying assets.
(p) 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 period, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment
to tax payable in respect of previous periods. 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 (the 'head entity').
Current tax expense/benefit, 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.
9595
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 3 Significant accounting policies (continued)
Any current tax liabilities (or assets) and deferred tax assets
arising from unused tax losses of the subsidiaries are assumed
by the head entity in the tax-consolidated group and are
recognised by the company as amounts payable/(receivable)
to/(from) other entities in the tax-consolidated group in
conjunction with any tax funding arrangement (refer below).
Any difference between these amounts is recognised by the
company as an equity contribution amounts or distribution.
The company recognises deferred tax assets arising from
unused tax losses of the tax-consolidated group to the extent
that it is probable that future taxable profits of the tax-consolidated
group will be available against which the asset can be utilised.
Any subsequent period adjustments to deferred tax assets
arising from unused tax losses as a result of revised
assessments of the probability of recoverability is recognised
by the head entity only.
(ii) Nature of tax funding arrangements and tax
sharing agreements
The head entity of the Australian tax-consolidated group, in
conjunction with other members of the tax-consolidated group,
has entered into a tax funding arrangement which sets out the
funding obligations of members of the tax-consolidated group
in respect of tax amounts. The tax funding arrangements require
payments to/from the head entity equal to the current tax
liability/(asset) assumed by the head entity and any tax-loss
deferred tax asset assumed by the head entity, resulting in
the head entity recognising an inter-entity receivable/(payable)
equal in amount to the tax liability/(asset) assumed. The
inter-entity receivables/(payables) are at call.
Contributions to fund the current tax liabilities are payable as per
the tax funding arrangement and reflect the timing of the head
entity's obligation to make payments for tax liabilities to the
relevant tax authorities.
The head entity of the Australian tax-consolidated group, 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 consolidated financial statements in respect
of this agreement as payment of any amounts under the tax
sharing agreement is considered remote.
(q) 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.
(r) Earnings per share
The group presents basic and diluted earnings per share (EPS)
data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the
group by the weighted average number of ordinary shares
outstanding during the period. Diluted EPS is determined by
adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares
outstanding for the effects of all potential dilutive ordinary
shares, which comprise convertible notes and share options
granted to employees.
(s) Segment reporting
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 (CEO) to make decisions about resources
to be allocated to the segment and to assess its performance.
Segment results that are reported to the CEO 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.
9696
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 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) Intangible assets
The fair value of patents and trademarks acquired in a business
combination is based on the discounted estimated royalty
payments that have been avoided as a result of the patent or
trademark being owned. The fair value of other intangible assets
is based on the discounted cash flows expected to be derived
from the use and eventual sale of the assets.
(iii) Inventories
The fair value of inventories acquired in a business combination
is determined based on its estimated selling price in the ordinary
course of business less the estimated costs of completion and
sale, and a reasonable profit margin based on effort required
to complete and sell the inventories.
(iv) Trade and other receivables
The fair value of trade and other receivables is estimated as
the present value of future cash flows, discounted at the market
rate of interest at the reporting date. This fair value is determined
for disclosure purposes.
(v) Derivatives
The fair value of forward exchange contracts is based on their
listed market price, if available. If a listed market price is not
available, then fair value is estimated by discounting the
difference between the contractual forward price and the current
forward price for the residual maturity of the contract using a
risk-free interest rate (based on Government bonds). The fair
value of interest rate swaps is based on broker quotes. Those
quotes are tested for reasonableness by future cash flows based
on the terms and maturity of each contract and using market
interest rates for a similar instrument at the measurement date.
(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 or rights to ordinary shares granted
to participants under the Nufarm Short Term Incentive are
measured using the volume weighted average price for the five
day period subsequent to period 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).
9797
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 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.
The seed technologies business deals in the sale of seeds
and seed treatment products. The seed technologies business
is managed on a worldwide basis.
Operating segments
The group operates predominantly along two business lines,
being crop protection and seed technologies.
The crop protection business deals in the manufacture and sale
of crop protection products used by farmers to protect crops
from damage caused by weeds, pests and disease. It is managed
by major geographic segments, being Australia, New Zealand
and Asia (together ‘APAC’), Europe and North America.
As a result of changes in the management structure and
internal reporting of the operating segments, incorporated
as part of the asset rationalisation and restructuring activities,
the group changed its operating segments to combine the
previous Australia and New Zealand, and Asia segments
together to form APAC. The comparison period has been
restated for this change.
Information regarding the results of each operating segment is
included below. Performance is measured based on underlying
EBITDA and underlying EBIT, as defined below, as included
in the internal management reports that are reviewed by the
group's CEO. These metrics are 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 non-operating corporate segment comprises mainly
corporate expenses, interest-bearing loans, borrowings and
corporate assets. From April 2020, the non-operating corporate
segment revenue represents revenue earned on delivering
products under a two year supply agreement with Sumitomo
Chemical Company Ltd as the purchaser of the group’s South
American business, that was divested in April 2020.
Crop Protection
12 months ended 30 September 2021
Operating
Segments
APAC
$000
Europe
$000
North
America
$000
Seed
Technologies
Global
$000
Non
Operating
Corporate
$000
Total
$000
Group
Total
$000
Revenue
Total segment revenue
858,407
806,485
1,112,423
2,777,315
240,621
197,715
3,215,651
Results
Underlying EBITDA(a)
111,550
171,696
104,394
387,640
46,322
(72,855)
361,107
Depreciation & amortisation excluding
material items
(20,114)
(125,743)
(32,678)
(178,535)
(28,505)
(967)
(208,007)
Underlying EBIT(a)
91,436
45,953
71,716
209,105
17,817
(73,822)
153,100
Material items included in operating profit (refer note 6)
Material items included in net financing costs (refer note 6)
Total material items (refer note 6)
Net financing costs (excluding material items)
Profit/(loss) before tax
3,877
–
3,877
(61,290)
95,687
(a) Underlying EBIT is earnings before net finance costs, taxation and material items. Underlying EBITDA is Underlying EBIT before depreciation, amortisation and material items.
9898
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 2 months ended 30 September 2020
(restated*)
Operating
Segments
Revenue
Crop Protection
APAC
$000
Europe
$000
North
America
$000
Seed
Technologies
Global
$000
Non
Operating
Corporate
$000
Total
$000
Group
Total
$000
Total segment revenue
92,463
48,293
74,323
215,079
7,057
45,184
267,320
Results
Underlying EBITDA*(a)
Depreciation & amortisation excluding
material items*
691
(19,119)
(6,224)
(24,652)
(4,515)
(18,024)
(47,191)
(3,045)
(20,699)
(4,986)
(28,730)
(4,905)
(182)
(33,817)
Underlying EBIT*(a)
(2,354)
(39,818)
(11,210)
(53,382)
(9,420)
(18,206)
(81,008)
Material items included in operating profit (refer note 6)
Material items included in net financing costs (refer note 6)
Total material items (refer note 6)
Net financing costs (excluding material items)
Profit/(loss) before tax
(6,862)
–
(6,862)
(14,007)
(101,877)
(a) Underlying EBIT is earnings before net finance costs, taxation and material items. Underlying EBITDA is Underlying EBIT before depreciation, amortisation and material items.
*
Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii). During the year the group changed its operating
segments to combine the previous Australia and New Zealand and Asia segments together to form APAC. The comparison period has been restated for this change.
9999
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 5 Operating segments (continued)
Crop Protection
As at 30 September 2021
Operating
Segments
Assets
Segment assets
APAC
$000
Europe
$000
North
America
$000
Seed
Technologies
Global
$000
Non
Operating
Corporate
$000
Total
$000
Group
Total
$000
667,866
1,306,106
947,116
2,921,088
562,871
884,346
4,368,305
Equity accounted investments
2,146
941
–
3,087
663
–
3,750
Total assets
670,012
1,307,047
947,116
2,924,175
563,534
884,346
4,372,055
Liabilities
Segment liabilities
Total liabilities
Other segment information
561,395
238,480
223,379
1,023,254
41,570
1,185,768
2,250,592
561,395
238,480
223,379
1,023,254
41,570
1,185,768
2,250,592
Capital expenditure
15,395
74,572
40,887
130,854
34,861
–
165,715
As at 30 September 2020 (restated*)
Operating
Segments
APAC
$000
Europe
$000
North
America
$000
Seed
Technologies
Global
$000
Non
Operating
Corporate
$000
Total
$000
Group
Total
$000
Crop Protection
Assets
Segment assets
670,874
1,564,492
904,528
3,139,894
529,788
577,317
4,246,999
Equity accounted investments
1,710
–
–
1,710
549
–
2,259
Total assets
672,584
1,564,492
904,528
3,141,604
530,337
577,317
4,249,258
Liabilities
Segment liabilities
Total liabilities
Other segment information
484,197
288,218
222,089
994,504
30,572
1,193,754
2,218,830
484,197
288,218
222,089
994,504
30,572
1,193,754
2,218,830
Capital expenditure*
2,276
8,477
3,750
14,503
8,835
–
23,338
*
Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii). During the year the group changed its operating
segments to combine the previous Australia and New Zealand and Asia segments together to form APAC. The comparison period has been restated for this change.
100100
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued Geographical information – revenue by location of customer
United States of America
Australia
Brazil
Rest of world(b)
Total
Revenue
12 months to
30 Sep 2021
$000
2 months to
30 Sep 2020
$000
955,090
577,556
203,910
1,479,095
69,721
57,508
40,882
99,209
3,215,651
267,320
(b) Other than Australia, Brazil and the United States of America sales to other countries are individually less than 10% of the group’s total revenues.
Geographical information – non-current assets by location of asset
Germany
United States of America
United Kingdom
Australia
Rest of world(c)
Unallocated(d)
Total*
Non-current assets
30 Sep 2021
$000
Restated*
30 Sep 2020
$000
467,501
413,962
349,113
277,875
186,191
142,612
528,675
423,800
318,004
277,811
206,495
142,002
1,837,254
1,896,787
(c) Other than Germany, Australia, United States of America, and the United Kingdom, non-current assets held in other countries are individually less than 10% of the group’s
total non-current assets.
(d) Unallocated non-current assets predominately include deferred tax assets.
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
101
101
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 6 Individually material income and expense items
Individually material items are those items where their nature, including the expected frequency of the events giving rise to them, and/or amount
is considered material to the financial statements. Such items included within the group’s profit for the period are detailed below.
Material items by category:
Legal costs
Asset rationalisation and restructuring
Transactions related to South American business disposal
Total
Consolidated
Consolidated
12 months to
30 Sep 2021
$000
pre-tax
12 months to
30 Sep 2021
$000
after-tax
2 months to
30 Sep 2020
$000
pre-tax
2 months to
30 Sep 2020
$000
after-tax
(392)
(2,031)
6,300
3,877
(392)
(1,838)
6,300
4,070
–
(1,926)
(4,936)
(6,862)
–
(961)
(4,450)
(5,411)
30 September 2021 Material items
30 September 2020 Material items
Legal costs
In the financial years ended 31 July 2019 and 31 July 2020, the
group incurred legal costs associated with the enforcement of
Omega-3 canola trademark and patent matters. The group has
continued to incur legal costs in relation to the same matter
during the year ended 30 September 2021.
Asset rationalisation and restructuring
During the year ended 31 July 2020 the group announced a
group wide performance improvement program, relating to asset
rationalisation and organisational restructuring. The group has
continued to incur expenses in relation to this program during the
year ended 30 September 2021.
Transactions related to South American business
disposal – onerous contract provision reversal
During the year ended 31 July 2020 the group entered into a
supply agreement contract signed as part of the disposal of the
South American business that subsequently became onerous,
as disclosed in material items for that period. During the year
ended 30 September 2021 market conditions in relation to the
terms of the contract have improved. The group has assessed
that the full provision will no longer be required and it has
therefore been partially reversed. The contract is due to expire
in March 2022.
Transactions related to South American business
disposal – high yield bond
The sale of the group's South American crop protection
businesses triggered a requirement for unutilised sale proceeds
remaining at 31 March 2021 to be used to either make a tender
offer to noteholders at par for the group's senior unsecured
notes due in April 2026 (2026 notes) (refer note 27) or cancel
other debt facilities.
The group chose to approach current noteholders in September
2020 to seek exemption from this requirement in order to
maintain the group’s liquidity. Majority consent was provided
by the noteholders on 14 September 2020. The terms and
conditions of the 2026 notes remain unchanged. The cost of
obtaining the exemption was $4.936 million including consent
fees, advisor and legal fees.
Asset rationalisation and restructuring
Expenses continue to be incurred on the group wide performance
improvement program, relating to asset rationalisation and
organisational restructuring.
102102
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued Material items are classified by function as follows:
12 months ended 30 September 2021
$000
Legal costs
Asset rationalisation and restructuring
Transactions related to South American business disposal –
onerous contract provision reversal
Total material items
Total material items included in operating profit
2 months ended 30 September 2020
$000
Transactions related to South American business disposal –
high yield bond
Asset rationalisation and restructuring
Total material items
Total material items included in operating profit
Material items impacting cash flows are as follows:
12 months ended 30 September 2021
Cash flows from operating activities
Net operating cash flows
Cash flows from investing activities
Net investing cash flows
Selling,
marketing and
distribution
expense
General &
administrative
expense
Net financing
costs
Cost of sales
–
–
–
–
–
–
–
–
–
–
(392)
(2,031)
6,300
3,877
3,877
–
–
–
–
–
Total
Pre-tax
(392)
(2,031)
6,300
3,877
3,877
Selling,
marketing and
distribution
expense
General &
administrative
expense
Cost of sales
Net financing
costs
Total
Pre-tax
–
–
–
–
–
–
–
–
(4,936)
(1,926)
(6,862)
(6,862)
–
–
–
–
(4,936)
(1,926)
(6,862)
(6,862)
Underlying
$000
Material
items
$000
Total
group
$000
439,807
(15,616)
424,191
(146,299)
–
(146,299)
Net operating and investing cash flows
293,508
(15,616)
277,892
2 months ended 30 September 2020 (restated*)
Cash flows from operating activities
Net operating cash flows*
Cash flows from investing activities
Net investing cash flows*
Underlying
$000
Material
items
$000
Total
group
$000
(119,683)
(10,306)
(129,989)
(17,105)
–
(17,105)
Net operating and investing cash flows*
(136,788)
(10,306)
(147,094)
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
103103
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 7 Other income
Rental income
Sundry income
Total other income
8 Other expenses
The following expenses were included in the period result:
Depreciation and amortisation*
Inventory write down
9 Personnel expenses
Wages and salaries
Other associated personnel expenses
Contributions to defined contribution superannuation funds
Expense/(gain) related to defined benefit superannuation funds
Short-term employee benefits
Other long-term employee benefits
Restructuring
Personnel expenses
Consolidated
12 months to
30 Sep 2021
$000
2 months to
30 Sep 2020
$000
42
8,979
9,021
6
1,108
1,114
Consolidated
12 months to
30 Sep 2021
$000
208,007
16,853
Restated*
2 months to
30 Sep 2020
$000
33,817
6,628
Consolidated
12 months to
30 Sep 2021
$000
2 months to
30 Sep 2020
$000
290,615
47,383
12,184
1,782
7,824
2,687
1,117
50,529
7,713
2,204
417
1,555
140
1,091
363,592
63,649
The restructuring expense relates to the group’s asset rationalisation and organisational restructure program. These expenses are
included in material items in note 6.
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
104104
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 10 Finance income and expense
Other financial income
Financial income
Interest expense – external
Interest expense – debt establishment transaction costs
Lease liability – interest expense
Net foreign exchange gains/(losses)
Financial expenses
Net financing costs
Consolidated
12 months to
30 Sep 2021
$000
2 months to
30 Sep 2020
$000
1,616
1,616
(49,537)
(3,147)
(7,420)
(2,802)
467
467
(8,075)
(569)
(1,171)
(4,659)
(62,906)
(14,474)
(61,290)
(14,007)
105105
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 11 Income tax expense
Recognised in the income statement
Current tax expense/(benefit)
Current period
Tax free income and non-recognition of tax assets on material items
Changes in estimates related to prior years
Current tax expense/(benefit)
Deferred tax expense/(benefit)
Origination and reversal of temporary differences and tax losses
Effect of changes in tax rates
(Recognition)/non-recognition of tax assets
Deferred tax expense/(benefit)
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 Australian corporate tax rate of 30%
Increase/(decrease) in income tax expense due to:
Non-deductible Amortisation/Depreciation
Non-deductible expenses
Other taxable income
Effect of changes in tax rates
(Recognition)/non-recognition of tax assets
Tax free income and non-recognition of tax assets on material items
Effect of tax rate in foreign jurisdictions
Tax exempt income
Tax incentives not recognised in the income statement
Changes in estimates related to 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
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
106106
Consolidated
12 months to
30 Sep 2021
$000
Restated*
2 months to
30 Sep 2020
$000
31,304
(1,892)
5,656
35,068
(2,981)
310
635
(2,036)
(1,233)
(22,291)
(50)
(3,226)
(4,509)
–
15,309
(6,982)
30,559
(9,018)
Consolidated
12 months to
30 Sep 2021
$000
95,687
28,706
2,914
3,043
1,511
(50)
(3,226)
(1,892)
(4,969)
(170)
(965)
24,903
5,656
30,559
Restated*
2 months to
30 Sep 2020
$000
(101,877)
(30,563)
643
488
496
–
15,309
310
3,997
(82)
(251)
(9,653)
635
(9,018)
Consolidated
12 months to
30 Sep 2021
$000
2 months to
30 Sep 2020
$000
(2,836)
(2,836)
(2,706)
(680)
(3,386)
–
–
(105)
–
(105)
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 12 Cash and cash equivalents
Bank balances
Call deposits
Bank overdraft
Total cash and cash equivalents
13 Trade and other receivables
Current
Trade receivables
Provision for impairment losses
Prepayments
Derivative financial instruments
Other receivables
Current receivables
Non-current
Other receivables
Non-current receivables
Total trade and other receivables
14 Inventories
Raw materials
Work in progress
Finished goods
Provision for obsolescence of finished goods
Total inventories
Consolidated
30 Sep 2021
$000
30 Sep 2020
$000
710,021
14,194
724,215
–
415,890
8,024
423,914
–
724,215
423,914
Consolidated
30 Sep 2021
$000
30 Sep 2020
$000
710,201
(22,662)
687,539
55,103
6,110
62,962
772,125
(28,423)
743,702
27,880
5,980
81,473
811,714
859,035
1,427
1,427
3,119
3,119
813,141
862,154
Consolidated
30 Sep 2021
$000
30 Sep 2020
$000
304,176
22,193
669,228
233,320
25,968
804,456
995,597
1,063,744
(19,434)
(16,815)
976,163
1,046,929
107107
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 15 Tax assets and liabilities
Current tax assets and liabilities
The current tax asset for the group of $22.709 million (30 September 2020: $22.593 million) 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 $4.433 million (30 September 2020: $11.113 million) 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:
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)
Assets
Liabilities
Net
30 Sep 2021
$000
Restated*
30 Sep 2020
$000
30 Sep 2021
$000
30 Sep 2020
$000
30 Sep 2021
$000
Restated*
30 Sep 2020
$000
11,984
11,225
23,332
24,463
37,487
44,282
152,773
(10,161)
142,612
14,205
12,887
25,087
21,257
29,818
44,727
(7,020)
(94,319)
–
(20,037)
(22,678)
–
(7,971)
(95,445)
–
(21,273)
(23,457)
–
147,981
(144,054)
(148,146)
–
10,161
–
147,981
(133,893)
(148,146)
4,964
(83,094)
23,332
4,426
14,809
44,282
8,719
–
8,719
6,234
(82,558)
25,087
(16)
6,361
44,727
(165)
–
(165)
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
108108
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued Movement in temporary differences during the period (restated*)
Consolidated
Property, plant and equipment
Intangible assets*
Employee benefits
Provisions
Other items
Tax value of losses carried forward
Consolidated
Property, plant and equipment
Intangible assets*
Employee benefits
Provisions
Other items
Tax value of losses carried forward
Balance
1 October 2020
$000
Recognised
in income
$000
Recognised
in equity
$000
Currency
adjustment
$000
Balance
30 Sep 2021
$000
6,234
(82,558)
25,087
(16)
6,361
44,727
(165)
(1,225)
(1,336)
(4,929)
4,554
7,495
(50)
4,509
–
–
2,706
–
680
–
3,386
(45)
800
468
(112)
273
(395)
989
4,964
(83,094)
23,332
4,426
14,809
44,282
8,719
Balance
1 Aug 2020
$000
Recognised
in income
$000
Recognised
in equity
$000
Currency
adjustment
$000
Balance
30 Sep 2020
$000
6,581
(81,417)
25,056
(2,362)
5,006
40,123
(7,013)
(354)
(733)
147
2,351
1,310
4,261
6,982
–
–
105
–
–
–
105
7
(408)
(221)
(5)
45
343
(239)
6,234
(82,558)
25,087
(16)
6,361
44,727
(165)
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 carrying value of this asset will continue to be assessed at each reporting date.
Deferred tax assets and liabilities
Unrecognised deferred tax liability
At 30 September 2021, a deferred tax liability of $30.532 million (30 September 2020: $28.463 million) relating to investments in
subsidiaries has not been recognised because the group 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 30 September 2021, there are unrecognised deferred tax assets in respect of tax losses and timing differences of $245.718 million
(30 September 2020: $257.558 million).
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
109109
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 16 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 period:
Nature of
relationship
Country
Balance
date of
associate
Seedtech Pty Ltd
Associate(1)
Australia
31 December
Leshan Nong Fu Trading Co., Ltd
Joint Venture(2) China
31 December
Crop.zone GmbH
Associate(3)
Germany
31 December
Ownership and voting interest
30 Sep 2021
30 Sep 2020
25.00%
35.00%
10.71%
25.00%
35.00%
0.00%
Seedtech Pty Ltd
Leshan Nong Fu Trading Co., Ltd
Crop.zone GmbH
Carrying amount
Share of profit/(loss)
30 Sep 2021
$000
30 Sep 2020
$000
12 months to
30 Sep 2021
$000
2 months to
30 Sep 2020
$000
663
2,146
941
3,750
549
1,710
–
2,259
115
343
(31)
427
–
(48)
–
(48)
(1) Seedtech is a company that offers services to the seed industry such as cleaning, packaging, distribution and storage of seeds.
(2) Leshan Nong Fu Trading is a joint venture in which the group has joint control and a 35 per cent ownership interest. The joint venture is focused on sales and marketing
of formulated crop protection products in the Chinese domestic market. It is structured as a separate vehicle. In accordance with the agreement under which Leshan Nong
Fu Trading was established, the investors in the joint venture have agreed to make capital contributions in proportion to their ownership interests to make up any losses,
if required, or at the latest within 5 years after incorporation, up to a maximum amount of RMB 100 million ($21.459 million). This commitment has not been recognised
in this consolidated financial report.
(3) Crop.zone is an Agtech start-up which provides electrophysical solutions to replace chemical herbicides in select market segments. The 10.71 per cent investment
in crop.zone is equity accounted as Nufarm has additional powers under its shareholders agreement such that it is able to exert significant influence over the operations
of crop.zone.
17 Other investments
Non-current investments
Other investments
Total non-current investments
30 Sep 2021
$000
30 Sep 2020
$000
4,267
4,267
394
394
In June 2021, the group made an investment in Enko Chem. The group intends to hold this investment for the long term for strategic
purposes and has designated the investment at FVOCI.
110110
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 18 Property, plant and equipment
Cost
Balance at 1 Oct 2020
Additions
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2021
Accumulated depreciation and impairment losses
Balance at 1 Oct 2020
Depreciation charge for the period
Impairment charge for the period
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2021
Consolidated
Land
and
buildings
$000
Plant and
machinery
$000
Capital
work in
progress
$000
Total
$000
327,192
15,372
(8,587)
2,186
(1,741)
685,747
31,063
(8,118)
19,939
(487)
42,989
25,603
–
(22,125)
1,055,928
72,038
(16,705)
–
597
(1,631)
334,422
728,144
47,064
1,109,630
(138,371)
(480,872)
(20,544)
(40,611)
–
4,066
(234)
986
–
6,159
234
924
(154,097)
(514,166)
–
–
–
–
–
–
–
(619,243)
(61,155)
–
10,225
–
1,910
(668,263)
Net property, plant and equipment at 30 September 2021
180,325
213,978
47,064
441,367
Cost
Balance at 1 August 2020
Additions
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2020
Accumulated depreciation and impairment losses
Balance at 1 August 2020
Depreciation charge for the period
Impairment charge for the period
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2020
Consolidated
Land
and
buildings
$000
Plant and
machinery
$000
Capital
work in
progress
$000
Total
$000
324,718
686,054
41,220
1,051,992
2,458
(481)
–
497
1,950
(1,656)
491
(1,092)
2,435
(59)
(491)
(116)
6,843
(2,196)
–
(711)
327,192
685,747
42,989
1,055,928
(134,946)
(477,402)
(3,469)
(5,996)
–
266
–
(222)
–
1,758
–
768
(138,371)
(480,872)
–
–
–
–
–
–
–
(612,348)
(9,465)
–
2,024
–
546
(619,243)
Net property, plant and equipment at 30 September 2020
191,295
204,568
42,989
436,685
111111
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 19 Intangible assets
Cost
Balance at 1 October 2020
Additions
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2021
Accumulated amortisation and impairment losses
Balance at 1 October 2020
Amortisation charge for the period
Impairment loss
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2021
Consolidated
Goodwill
$000
Intellectual
Property
$000
Computer
software
$000
Capitalised
development
costs
$000
Total
$000
382,481
1,124,954
–
–
–
15,453
(27,961)
(621)
(2,638)
(17,532)
88,525
2,680
(75)
135
(719)
544,563
2,140,523
75,545
(3,090)
486
10,900
93,678
(31,126)
–
(9,989)
379,843
1,094,293
90,546
628,404
2,193,086
(173,536)
(420,244)
(98)
(89,076)
(37,362)
(12,647)
(203,032)
(834,174)
(45,032)
(146,853)
–
–
–
1,164
–
27,841
(232)
5,791
–
95
773
(649)
–
2,827
(541)
(5,297)
–
30,763
–
1,009
(172,470)
(475,920)
(49,790)
(251,075)
(949,255)
Intangibles carrying amount at 30 September 2021
207,373
618,373
40,756
377,329
1,243,831
112112
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued Cost (restated*)
Balance at 1 August 2020
Additions
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2020
Accumulated amortisation and impairment losses (restated*)
Balance at 1 August 2020
Amortisation charge for the period
Impairment loss
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2020
Consolidated
Goodwill
$000
Intellectual
Property
$000
Computer
software*
$000
Capitalised
development
costs
$000
Total
$000
382,559
1,124,928
88,770
534,059
2,130,316
–
–
–
237
–
–
–
–
–
14,106
14,343
(38)
–
(38)
–
(78)
(211)
(245)
(3,564)
(4,098)
382,481
1,124,954
88,525
544,563
2,140,523
(174,093)
(405,649)
(35,189)
(196,733)
(811,664)
–
–
–
–
(14,418)
(2,113)
(7,821)
(24,352)
–
–
–
–
–
–
–
–
–
–
–
–
557
1,335
(60)
1,522
3,354
(173,536)
(420,244)
(37,362)
(203,032)
(834,174)
Intangibles carrying amount at 30 September 2020
208,945
704,710
51,163
341,531
1,306,349
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 cash-generating units (CGU) of the business. This level
of CGU aligns with the cash flows of the business and the
management structure of the group. The goodwill and
intellectual property with an indefinite life are CGU specific,
as the acquisitions generating goodwill and the product
registrations that are the major indefinite life intangibles are
country or region specific in nature. There is no allocation
of goodwill between CGUs.
The major CGUs and their intangible assets are as follows:
North America $175 million (30 September 2020*: $185 million),
Seed Technologies $391 million (30 September 2020*:
$374 million), Europe $646 million (30 September 2020*:
$714 million) and Australia and New Zealand (ANZ) $13 million
(30 September 2020*: $17 million). The remaining balance of
intangibles is spread across multiple CGUs, with no remaining
individual CGU intangible balance being more than 5 per cent
of 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 higher of the following two valuation methods are
used by the group when assessing recoverable value.
Valuation method – Value in use
Value in use (VIU) is an estimate of the recoverable amount
based on the present value of the future cash flows expected
to be derived from a CGU. In assessing VIU, the estimated
future cash flows are derived from the three year plan for each
cash-generating unit with a growth factor applied to extrapolate
a cash flow beyond year three. A perpetuity factor is then
applied to the normalised cash flow beyond year five in order
to include a terminal value in the VIU 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, adjusted for country risk and asset-
specific risk associated with each CGU.
Valuation method – Fair value less cost of disposal
Fair value less cost of disposal (FVLCD) is an estimate of the
amount that a market participant would pay for an asset or a
CGU, less the cost of disposal. The fair value is determined
using discounted cash flows. This fair value is benchmarked
using relevant methodologies including the sum of the parts
method, comparable market transactions, and company
trading multiples. The cash flows are derived from Board
approved management expectations of future outcomes taking
into account past experience, adjusted for anticipated revenue
growth. Cash flows are discounted using an appropriate
post-tax market discount rate to arrive at a net present value
of the asset which is compared against the asset’s carrying
value. The fair value measurement was categorised as a
Level 3 fair value based on inputs in the valuation technique
used (see note 27).
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
113113
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 19 Intangible assets (continued)
Valuation assumptions
The valuation method, range of terminal growth rates and nominal post-tax discount rates applied for impairment testing purposes
is as follows:
Valuation
method
Terminal
growth rate
Discount rate
Total goodwill
$000
VIU
VIU
VIU
VIU
2.3%
1.9%
2.4%
3.0%
8.4%
10.0%
9.6%
13.1%
53,255
67,117
–
71,900
Valuation
method
Terminal
growth rate
Discount rate
Total goodwill
$000
VIU
FVLCD
FVLCD
VIU
1.9%
8.5%
1.7% 9.5% to 11.3%
2.0% 9.8% to 11.3%
53,664
67,781
–
2.6%
13.4%
72,302
Europe CGU
At 30 September 2021, management has determined that the
recoverable amount remains equal to the carrying amount.
Any adverse movement in a key assumption (noted above)
or projected Europe cash flows, in the absence of other factors,
may lead to further impairment.
ANZ CGU
At 30 September 2021, management has determined that the
recoverable amount remains equal to the carrying amount.
Any adverse movement in a key assumption (noted above)
or projected ANZ cash flows, in the absence of other factors,
may lead to further impairment.
Consolidated
30 Sep 2021
$000
30 Sep 2020
$000
835,136
788,215
4,779
93,531
6,098
66,717
933,446
861,030
5,777
5,777
5,995
5,995
30 Sep 2021
North America CGU
Europe CGU
ANZ CGU
Seed Technology CGU
30 Sep 2020
North America CGU
Europe CGU
ANZ CGU
Seed Technology CGU
The terminal growth rate assumed is generally a long term
inflation estimate. The discount rate assumed is the group’s
weighted average cost of capital, adjusted for country risk
and asset-specific risk. The margin and volume assumptions
generally reflect past experience for existing and enhanced
portfolio products, while new products utilise external sources
of information reflecting current market pricing in expected
end use markets.
With the exception of the Europe and ANZ CGU (see below) in
which an impairment was recognised during the years ended
31 July 2020 and 31 July 2019 respectively, the directors have
determined that, given the excess of recoverable value over
asset carrying value (headroom), there are no reasonably
possible changes in assumptions which could occur to
cause the carrying amount of the CGU's to exceed their
recoverable amount.
20 Trade and other payables
Current payables – unsecured
Trade creditors and accruals – unsecured
Derivative financial instruments
Cash advances from customers (contract liabilities)
Current payables
Non-current payables – unsecured
Creditors and accruals
Non-current payables
114114
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 21 Interest-bearing loans and borrowings
Current liabilities
Bank loans – secured
Bank loans – unsecured
Deferred debt establishment costs
Lease liabilities
Other loans – unsecured
Loans and borrowings – current
Non-current liabilities
Bank loans – secured
Bank loans – unsecured
Senior unsecured notes
Deferred debt establishment costs
Lease liabilities
Other loans – unsecured
Loans and borrowings – non-current
Net cash and cash equivalents
Net debt
Financing facilities
Refer to the section entitled “Liquidity Risk” in note 27 for detail regarding the group’s financing facilities.
30 Sep 2021
Bank loan facilities and senior unsecured notes
Other facilities
Total financing facilities
30 Sep 2020
Bank loan facilities and senior unsecured notes
Other facilities
Total financing facilities
Consolidated
30 Sep 2021
$000
30 Sep 2020
$000
227,872
208,156
9,009
(2,444)
18,099
–
10,161
(2,229)
18,225
–
252,536
234,313
–
63
–
388
659,447
667,322
(5,292)
(7,216)
125,464
126,395
8,814
8,919
788,496
795,808
(724,215)
(423,914)
316,817
606,207
Accessible
$000
Utilised
$000
1,493,689
896,391
8,814
8,814
1,502,503
905,205
1,541,028
886,027
8,919
8,919
1,549,947
894,946
115115
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 21 Interest-bearing loans and borrowings (continued)
Reconciliation of liabilities arising from financing activities
Balance at 1 Oct 2020
Cash changes
Proceeds from borrowings (net of costs)
Repayment of borrowings
Debt establishment transaction costs
Lease liability payments
Total cash flows
Non-cash changes
Leases entered into during the period net of leases ceased
Foreign exchange movements
Transfer
Amortisation of debt establishment transaction costs
Total non-cash changes
Balance at 30 September 2021
Loans and
borrowings
– current
$000
Loans and
borrowings
– non-current
$000
Debt related
derivatives
(included in
assets/
liabilities)(1)
$000
Total debt
related
financial
instruments
$000
234,313
795,808
336
1,030,457
347,230
(329,149)
(1,173)
(19,851)
(2,943)
4,971
483
12,565
3,147
21,166
87,800
(87,639)
(264)
–
(103)
12,074
(6,718)
(12,565)
–
32,458
467,488
–
–
–
32,458
–
(32,407)
–
–
(416,788)
(1,437)
(19,851)
29,412
17,045
(38,642)
–
3,147
(7,209)
(32,407)
(18,450)
252,536
788,496
387
1,041,419
(1) Total derivatives balance at 30 September 2021 is a net asset of $1.331 million (30 September 2020: $0.118 million net liability). The difference in carrying value to the
table above relates to forward exchange contracts which are excluded from the balances above as they are not connected to the group's financing activities.
Financing arrangements
Without refinancing, expiry of available debt facilities (excluding lease liabilities)
Period ending 30 September 2022/30 September 2021
Period ending 30 September 2023/30 September 2022
Period ending 30 September 2024 or later/30 September 2023 or later
Average interest rates
Nufarm step-up securities
Syndicated bank facility
Group securitisation program facility
Other bank loans
Lease liabilities
Senior unsecured notes
Consolidated
30 Sep 2021
$000
30 Sep 2020
$000
414,179
420,063
668,261
321,081
552,625
676,241
Consolidated
30 Sep 2021
%
30 Sep 2020
%
4.00
n/a
1.32
4.06
5.15
5.75
4.15
n/a
1.22
4.77
4.91
5.75
Average interest rates are calculated using the weighted average of the interest rates for the drawn balances under each facility as at
30 September 2021. The Syndicated bank facility was undrawn as at 30 September 2021 and 30 September 2020. Undrawn facility
fees are paid on undrawn portions of the Syndicated bank facility, the Group securitisation program facility, and Other bank loans.
116116
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 22 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 non-current portion of other long-term employee benefits
Non-current employee benefits
Total employee benefits
Consolidated
30 Sep 2021
$000
30 Sep 2020
$000
16,234
3,000
19,234
14,176
2,527
16,703
9,935
203,487
10,377
202,444
(130,946)
(115,517)
82,476
97,304
16,522
98,998
118,232
14,861
112,165
128,868
During the 12 months ended 30 September 2021 the group made contributions to defined benefit pension funds in the United Kingdom,
France, Indonesia and Germany that provide defined benefit amounts for employees upon retirement.
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
Plan amendments
Contributions
Benefits paid
Exchange adjustment
Consolidated
12 months to
30 Sep 2021
$000
2 months to
30 Sep 2020
$000
212,821
216,703
942
3,543
(3,655)
–
–
(810)
–
(6,119)
6,700
148
562
(1,254)
–
–
–
–
(1,186)
(2,152)
Closing defined benefit obligation
213,422
212,821
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
Assets distributed on settlement
Contributions by employer
Distributions
Exchange adjustment
Closing fair value of fund assets
The actual return on plan assets is the sum of the expected return and the actuarial gain/(loss).
115,517
117,823
1,893
6,664
–
–
8,066
(5,856)
4,662
293
(1,788)
–
–
1,335
(1,163)
(983)
130,946
115,517
117117
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 22 Employee benefits (continued)
Expense/(gain) recognised in profit or loss
Current service costs
Interest on obligation
Interest income
Losses/(gains) on curtailment
Plan amendments
Past service cost/(gain)
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
Actuarial gains/(losses) recognised in other comprehensive income (net of tax)
Cumulative amount at period opening date
Recognised during the period
Cumulative amount at period closing date
The major categories of fund assets as a percentage of total fund assets are as follows:
Equities
Bonds
Property
Cash
Other
Principal actuarial assumptions at the reporting date (expressed as weighted averages):
Discount rate at period end
Future salary increases
Future pension increases
Consolidated
12 months to
30 Sep 2021
$000
2 months to
30 Sep 2020
$000
942
3,543
(1,893)
–
(810)
–
1,782
1,006
415
274
87
1,782
148
562
(293)
–
–
–
417
186
169
47
15
417
30 Sep 2021
$000
30 Sep 2020
$000
(84,772)
12,033
(72,739)
(84,772)
–
(84,772)
Consolidated
30 Sep 2021
%
30 Sep 2021
%
63.0%
16.0%
0.8%
16.0%
4.2%
1.6%
2.6%
2.1%
64.8%
26.7%
1.2%
1.6%
5.7%
1.6%
2.5%
2.1%
The group expects to pay $8.872 million in contributions to defined benefit plans during the 12 months ending 30 September 2022
(12 months ending 30 Sep 2021: $8.007 million).
118118
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued Nufarm Key Leadership Incentive Plan (KLIP)
On 1 August 2018, the KLIP commenced and is available
to certain selected group employees. Awards are granted
to individuals in the form of rights, which provide eligibility
to the employees to acquire ordinary shares in the group
for nil consideration, subject to the employees remaining
employed within the group for a defined length of time under
the respective plans.
The rights generally will have a vesting period of two years
or four years. At 30 September 2021 there were 46 participants
(30 September 2020: 139 participants) in the scheme and
709,798 rights (30 September 2020: 599,429) were allocated.
Global Share Plan (2001)
The Global Share Plan commenced in 2001 and was available
to all permanent employees. The plan was suspended effective
31 December 2020. Previously, participants contributed
a proportion of their salary to purchase shares. The group
contributed an amount equal to 10% of the number of ordinary
shares acquired with a participant's contribution in the form of
additional ordinary shares. Amounts over 10% of the participant's
salary could be contributed but were not able to be matched.
For each year the shares are held, up to a maximum of five
years, the group contributes a further 10% of the value
of the shares acquired with the participant's contribution.
An independent trustee holds the shares on behalf of the
participants. At 30 September 2021 there were 379 participants
(30 September 2020: 466 participants) in the scheme and
1,558,899 shares (30 September 2020: 1,685,312) 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 group.
23 Share-based payments
Nufarm Executive Share Plan (2000)
The Nufarm Executive Share Plan (2000) offered shares to
executives. 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. 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 ten
years without board approval. An independent trustee holds the
shares and options on behalf of the executives. At 30 September
2021 there were 3 participants (30 September 2020: 7 participants)
in the scheme and 3,034 shares (30 September 2020: 24,640)
were allocated and held by the trustee on behalf of the
participants. The cost of issuing shares is expensed in the
period of issue.
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 profit before tax or net profit after tax
and net working capital; and
• strategic and business improvement objectives.
A pre-determined percentage of the STI is paid in cash at the
time of performance testing and the balance is deferred into
shares or rights to shares in the group for nil consideration.
The number of shares granted is based on the volume weighted
average price (VWAP) of Nufarm Limited shares in the 5 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 group 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 period. The
performance and vesting period for the awards will be three
years. Awards vest in two equal tranches as follows:
• 50 per cent of the LTIP grant will vest subject to the
achievement of a relative total shareholder return (TSR)
performance hurdle measured against a selected comparator
group of companies; and
• the remaining 50 per cent will vest subject to meeting an
absolute return on funds employed (ROFE) target.
119119
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 23 Share-based payments (continued)
Employee expenses
Total expense arising from share-based payment transactions
Measurement of fair values
12 months to
30 Sep 2021
$000
2 months to
30 Sep 2020
$000
3,640
466
The fair value of performance rights granted through the LTIP, KLIP and STIP were measured as follows:
Plan
Weighted average fair value at grant date
Share price at grant date
Grant date
Earliest vesting date
Exercise price
Expected life
Volatility
Risk free interest rate
Dividend yield
Nufarm LTIP
2021
Performance
rights
Nufarm LTIP
2020
Performance
rights
Nufarm KLIP
2021
Performance
rights
Nufarm KLIP
2020
Performance
rights
Nufarm KLIP
2019
Performance
rights
Nufarm STIP
2020
Performance
rights
$2.98
$3.87
$4.18
$5.03
$3.60
$3.87
$4.83
$5.03
$6.69
$7.25
$4.04
$4.04
1 Oct 2020
1 Aug 2019
1 Oct 2020
1 Aug 2019
1 Aug 2018
1 Aug 2019
30 Sep 2023
30 Sep 2022
30 Sep 2024
31 Jul 2023
31 Jul 2022
31 Jul 2022
–
–
–
–
–
–
3 years
3 years
4 years
4 years
4 years
3 years
32%
0.2%
1.7%
30%
0.8%
1.0%
32%
0.3%
1.8%
30%
0.9%
1.0%
28%
2.2%
2.0%
n/a
n/a
n/a
The fair values of awards granted were estimated using a Monte-Carlo simulation methodology and a Binomial Tree methodology.
Reconciliation of outstanding share awards
Outstanding at period opening date
Forfeited during the period
Exercised during the period
Expired during the period
Granted during the period
Outstanding at 30 September
Exercisable at 30 September
Nufarm LTI
number of
performance
rights
30 Sep 2021
Nufarm KLIP
number of
performance
rights
30 Sep 2021
Nufarm STI
number of
performance
rights
30 Sep 2021
Nufarm LTI
number of
performance
rights
30 Sep 2020
Nufarm KLIP
number of
performance
rights
30 Sep 2020
Nufarm STI
number of
performance
rights
30 Sep 2020
1,023,788
(594,563)
599,429
(96,131)
35,545
1,143,172
604,429
35,545
–
(119,384)
(5,000)
–
–
783,197
1,212,422
–
(158,500)
(35,545)
–
365,000
709,798
–
–
26,695
26,695
–
–
–
–
–
–
–
–
–
–
–
1,023,788
599,429
35,545
–
–
–
The performance rights outstanding at 30 September 2021 have a $nil exercise price (30 September 2020: $nil) and a weighted
average contractual life of 3 years (30 September 2020: 3 years). All performance rights granted to date have a $nil exercise price.
120120
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 24 Provisions
Current
Restructuring
Other
Current provisions
Movement in provisions
Balance at 1 October 2020
Provisions made during the period
Provisions reversed during the period
Provisions used during the period
Exchange adjustment
Balance at 30 September 2021
Consolidated
30 Sep 2021
$000
30 Sep 2020
$000
12,686
1,092
13,778
25,407
8,150
33,557
Consolidated
Other
provisions
$000
Restructuring
$000
25,407
959
(1,325)
(12,062)
(293)
12,686
8,150
–
(6,300)
(754)
(4)
1,092
Total
$000
33,557
959
(7,625)
(12,816)
(297)
13,778
The provision for restructuring is mainly relating to the asset rationalisation and restructuring being undertaken by the group.
25 Capital and reserves
Share capital
Balance at 1 October
Issue of shares
Balance at 30 September
Group
Number
of ordinary
shares
30 Sep 2021
Number
of ordinary
shares
30 Sep 2020
379,694,706
379,694,706
212,410
–
379,907,116
379,694,706
The group does not have authorised capital or par value in respect of its issued shares. 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 4 February 2021, a total of 58,889 shares at $4.85 were issued under the Global Share Plan. On the 2 August 2021 153,521
performance rights were converted into ordinary shares at VWAP of $4.38 under the Key Leadership Incentive Plan and Short Term
Incentive Plan.
121
121
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 25 Capital and reserves (continued)
Other securities
Nufarm step-up securities
On 24 November 2006 Nufarm Finance (NZ) Limited, a wholly
owned subsidiary of Nufarm Limited, issued 2,510,000 hybrid
securities at $100 each called Nufarm step-up securities (NSS),
which are perpetual step up securities. The NSS are listed on
the ASX under the code 'NFNG' and on the NZDX under the
code 'NFFHA'.
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 floating rate is the average mid-rate
for bills with a term of six months plus a margin of 3.9%
(30 September 2020: 3.9%).
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.
Distributions
Nufarm step-up securities
The following distributions were paid by Nufarm Finance (NZ) Ltd:
12 months ended 30 Sep 2021
Distribution
Distribution
Capital profit reserve
This reserve is used to accumulate realised capital profits.
Other reserve
This reserve includes the following:
• accrued employee entitlements to share awards that have
been charged to the income statement and have not yet
been exercised;
• accumulative effective portion of changes in the fair value of
financial instruments that have been designated as either cash
flow hedges or net investment hedges;
• changes in the fair value of other investments that have been
designated at FVOCI.
Dividends
A final dividend of four cents per share, totalling $15.196 million,
was declared on 17 November 2021 and will be paid on
17 December 2021 (final dividend September 2020: nil; interim
dividend March 2021: nil).
Consolidated
Distribution
rate
Total amount
$000
Payment
date
4.15%
4.01%
5,216
5,013
15 Oct 2020
15 Apr 2021
There were no distributions in the 2 months ended 30 September 2020 for the Nufarm step-up securities.
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 $7.393 million (2020: no distribution was made during the 2 months ended
30 September 2020).
Franking credit balance
The amount of franking credits available for the subsequent financial period are:
Franking account balance as at the end of the period at 30% (30 Sep 2020: 30%)
Franking credits that will arise from the payment of income tax payable as at the end of the period
Credit balance at 30 September 2021
12 months to
30 Sep 2021
$000
2 months to
30 Sep 2020
$000
–
–
–
–
–
–
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 $nil (30 September 2020: $nil) franking credits.
122122
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 26 Earnings per share
Net profit/(loss) for the period
Net profit/(loss) attributable to equity holders of the group
Other securities distributions (net of tax)
Earnings/(loss) used in the calculations of basic and diluted earnings per share
Subtract/(add back) items of material income/(expense) (refer note 6)
Earnings/(loss) excluding items of material income/(expense) used in the calculation of underlying earnings per share
Consolidated
12 months to
30 Sep 2021
$000
Restated*
2 months to
30 Sep 2020
$000
65,128
65,128
(7,393)
57,735
4,070
53,665
(92,859)
(92,859)
–
(92,859)
(5,411)
(87,448)
For the purposes of determining basic and diluted earnings per share, the after-tax distributions on other securities 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
30 Sep 2021
30 Sep 2020
379,757,921
379,694,706
382,323,691
379,694,706
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
Basic earnings per share
Diluted earnings per share
Underlying earnings per share (excluding items of material income/expense – see note 6)
Basic earnings per share
Diluted earnings per share
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
Cents per share
12 months to
30 Sep 2021
Restated*
2 months to
30 Sep 2020
15.2
15.1
14.1
14.0
(24.5)
(24.5)
(23.0)
(23.0)
123123
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 27 Financial risk management and financial instruments
The group has exposure to the following financial risks:
• credit risk;
• liquidity risk; and
• market risk.
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.
The Board of Directors has responsibility to identify, assess,
monitor and manage the material risks facing the group and
to ensure that adequate identification, reporting and risk
minimisation mechanisms are established and working
effectively. To support and maintain this objective, the audit
committee and the risk and compliance committee has
established detailed policies on risk oversight and management
by approving a global risk management charter that specifies
the responsibilities of the global head of risk and compliance and
the chief financial officer (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 group entities worldwide.
The global head of risk and compliance and the chief financial
officer report to the chairman of the risk and compliance
committee and the audit committee respectively. Written reports
regarding risk and compliance activities and internal audit
findings are provided at each meeting of the risk and compliance
committee and audit committee respectively. In doing so,
the global head of risk and compliance and the chief financial
officer has direct and ongoing access to the chairman and
members of the risk and compliance committee and the audit
committee respectively.
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 equivalent assets
Derivative contracts:
Assets
Consolidated
30 Sep 2021
$000
30 Sep 2020
$000
807,031
724,215
856,174
423,914
6,110
5,980
1,537,356
1,286,068
124124
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 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
30 Sep 2021
$000
30 Sep 2020
$000
123,606
162,249
261,662
241,281
18,233
807,031
121,315
167,010
347,129
203,271
17,449
856,174
The group’s top five customers account for $272.224 million of the trade receivables carrying amount at 30 September 2021
(30 Sep 2020: $274.052 million). These top five customers represent 38 per cent (30 Sep 2020: 35 per cent) of the total receivables.
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
30 Sep 2021
$000
30 Sep 2020
$000
626,710
52,914
8,603
6,202
15,772
710,201
(22,662)
687,539
607,529
98,016
32,437
10,492
23,651
772,125
(28,423)
743,702
Some receivables are secured by collateral from customers such as guarantees and charges on assets. In some countries credit
insurance is undertaken to reduce credit risk. The past due receivables not impaired are considered recoverable.
In the crop protection industry, it is normal practice to vary the terms of sales depending on the climatic conditions experienced
in each country.
125125
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 27 Financial risk management and financial instruments (continued)
Credit risk (continued)
The movement in the allowance for impairment in respect of trade receivables during the period was as follows:
Balance at 1 October
Provisions made/(reversed) during the period
Provisions used during the period
Exchange adjustment
Balance at 30 September
Expected credit loss assessment for individual customers
The group uses an allowance matrix to measure the expected credit
loss (ECL) of trade receivables from individual customers, which
comprise of a large number of customers with small balances.
Loss rates are calculated using a 'roll rate' method based on
the probability of a receivable progressing through successive
stages of delinquency to write off. Roll rates are calculated
separately for exposures in different segments and countries.
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.
Sales and operating profit are seasonal and are weighted
towards the first half of the calendar year in Australia/New
Zealand, North America and Europe, reflecting the planting and
growing cycle in these regions while in Latin America the sales
and operating profit is weighted towards the second half of the
calendar year. This seasonal operating activity results in
seasonal working capital requirements.
Principally, the group sources liquidity from cash generated from
operations, and where required, external bank facilities. Working
capital fluctuations due to seasonality of the business are
supported by the short-term funding available from the group's
trade receivable securitisation facility.
Debt facilities
As at 30 September 2021, the key group facilities include a
group trade receivables securitisation facility, a US$475 million
senior unsecured notes offering due in April 2026 (30 Sep 2020:
US$475 million), and a senior secured bank facility of
$490 million (30 September 2020: $555 million).
The US$475 million senior unsecured notes are due in April 2026
with a fixed coupon component of 5.75% (‘2026 notes’). The 2026
notes were issued under a dual tranche structure by Nufarm
Australia Ltd (US$266 million) and Nufarm Americas Inc
(US$209 million).
On 31 January 2021 $65 million of the group's senior secured
bank facility (SFA) expired, reducing the limit to $490 million.
Under the facility agreement $20 million expires on 31 January
2022, $50 million expires on 30 June 2022 and $420 million
expires on 31 October 2022 (30 September 2020: $85 million
and $470 million expires in January 2021 and January 2022
respectively). The SFA includes covenants of a type normally
associated with facilities of this kind, and the group was in
compliance with these covenants. The facility was undrawn
at 30 September 2021 (30 September 2020: undrawn).
126126
Consolidated
30 Sep 2021
$000
30 Sep 2020
$000
28,423
7,093
(12,447)
(407)
22,662
28,689
(30)
(46)
(190)
28,423
On 23 August 2011, Nufarm executed a group trade receivables
securitisation facility. The facility provides funding that aligns
with the working capital cycle of the group. The facility limit
varies on a monthly basis to reflect the cyclical nature of the
trade receivables being used to secure funding under the
program. The monthly facility limit is set at $500 million for three
months of the financial year, $400 million for one month of the
financial year, $350 million for four months of the financial year,
$300 million for two months of the financial year and
$250 million for two months of the financial year (30 September
2020: Consistent with FY21 monthly facility limits).
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
Europe, which at 30 September 2021 totalled $130.604 million
(30 September 2020: $129.299 million).
At 30 September 2021, the group had access to debt of
$1,494 million (30 September 2020: $1,541 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 and the notes.
Trade finance
The liquidity of the group is influenced by the terms suppliers
extend in respect of purchases of goods and services. The
determination of terms provided by suppliers is influenced by
a variety of factors including supplier’s liquidity. Suppliers may
engage financial institutions to facilitate the receipt of payments
for goods and services from the group, which are often referred
to as supplier financing arrangements. The group is aware that
trade payables of $297.066 million at 30 September 2021
(30 September 2020: $198.139 million) are to be settled via such
arrangements in future periods. In the event suppliers or financial
institutions cease such arrangements the liquidity of the group’s
suppliers may be affected. If suppliers subsequently seek to
reduce terms on group’s purchases of goods and services in the
future, the group’s liquidity will be affected. Details of the group's
trade and other payables are disclosed in note 20.
To support the liquidity of the group and reduce the credit risk
relating to specific customers, trade receivables held by the
group are sold to third parties. The sales (or factoring) of
receivables to third parties is primarily done on a non-recourse
basis, and the group incurs a financing expense at the time of
the sale. The group derecognises trade receivables where the
terms of the sale allows for derecognition. At 30 September
2021 the group estimates $18.426 million (30 September 2020:
$10.639 million) of derecognised trade receivables were being
held by third parties. For clarity, the group trade receivables
securitisation facility, noted above, has terms which does not
allow the group to derecognise these trade receivables.
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued The following are the contractual maturities of the group’s financial liabilities:
Consolidated
30 Sep 2021
Non-derivative financial liabilities
Trade and other payables
Bank loans – secured
Bank loans – unsecured
Senior unsecured notes
Other loans – unsecured
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
Consolidated
30 Sep 2020
Non-derivative financial liabilities
Trade and other payables
Bank loans – secured
Bank loans – unsecured
Senior unsecured notes
Other loans – unsecured
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
934,444
227,872
9,072
934,447
230,847
9,974
659,447
849,038
8,814
8,814
928,667
230,847
9,908
37,918
–
205
–
66
5,575
–
–
37,918
773,202
–
8,814
143,563
307,084
18,087
21,387
267,610
–
–
–
–
–
–
4,779
791,695
791,695
–
–
–
–
(783,901)
(783,901)
–
–
–
–
889,173
889,173
(6,110)
(899,110)
(899,110)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,981,881
2,338,061
1,223,284
59,576
1,055,201
Carrying
amount
$000
Contractual
cash flows
$000
Less than
1 year
$000
1-2
years
$000
More than
2 years
$000
860,927
208,156
10,549
667,322
8,919
860,927
210,690
11,734
881,569
8,919
854,932
210,690
11,341
38,371
–
904
–
393
5,091
–
–
38,371
804,827
–
8,919
144,620
307,314
20,448
20,124
266,742
–
–
–
–
–
–
6,098
925,927
925,927
–
–
–
–
(916,152)
(916,152)
–
–
–
–
1,027,346
1,027,346
(5,980)
(1,036,319)
(1,036,319)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,900,611
2,281,955
1,136,584
59,792
1,085,579
127127
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 27 Financial risk management and financial instruments (continued)
Liquidity risk (continued)
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.
Currency risk
The group uses financial instruments to manage specifically
identified foreign currency risks. This includes risks relating to
the translation of earnings that are denominated in a currency
other than the group reporting currency (Australian Dollars), and
transactional foreign currency risks where receivables, payables
and borrowings are denominated in a currency other than the
functional currency of the individual group entity. The functional
currency is determined via reference to the currency of the
operating, investing and financing cashflows for each individual
group entity. The currencies giving rise to the identified risks
include the US Dollar, the Euro, the British Pound, the Australian
Dollar, New Zealand Dollar, Polish Zloty, Ukrainian Hryvnia,
Romanian Leu, Hungarian Forint, Mexica Peso, Turkish Lira,
Russian Ruble and the Czech Koruna.
Financial instruments used by the group to manage currency
risks include derivative instruments such as foreign exchange
contracts, cross currency interest rate swaps and options, and
non-derivative instruments such as foreign currency debt
instruments. The group designates select financial instruments
for hedge accounting where it is deemed appropriate to do so.
On 26 April 2018 the group completed the refinancing of the
US$325 million senior unsecured notes due in October 2019
(‘2019 notes’). The 2019 notes were redeemed through the
issuance of US$475 million senior unsecured notes due in April
2026 as a dual tranche issuance by Nufarm Australia Ltd and
Nufarm Americas Inc. Currency risk related to the principal of
the notes is managed using a combination of foreign exchange
contracts, other financial instruments (natural hedges), and net
investment hedges. Currency risk related to the interest incurred
on the notes is managed using a combination of foreign exchange
contracts, and earnings derived in US Dollars (natural hedges).
The group uses financial instruments to manage foreign
currency translation risk arising from the group's net investments
in foreign currency subsidiary entities. These financial
instruments are designated as net investment hedges for hedge
accounting purposes. No ineffectiveness was recognised from
net investment hedges during the reporting periods.
For accounting purposes, the group has not designated any
other derivative financial instruments in hedge relationships and
all movements in fair value are recognised in profit or loss during
the period. The net fair value of derivative financial instruments
in the group, not designated as being in a hedge relationship,
used as economic hedges of forecast transactions at
30 September 2021 was a $1.331 million asset (30 September 2020:
$0.118 million liability) comprising assets of $6.110 million
(30 September 2020: $5.980 million) and liabilities of
$4.779 million (30 September 2020: $6.098 million).
Exposure to transactional currency risk
The group's exposure to major transactional foreign currency
risks at balance date are as follows. The exposures are
calculated based on locally reported net foreign currency
exposures, and are presented net of open derivative financial
instruments. The analysis is performed on the same basis
as the previous financial period.
Consolidated
30 Sep 2021
Functional currency of group operation
Australian dollars
US dollars
Euro
British pound
Consolidated
30 Sep 2020
Functional currency of group operation
Australian dollars
US dollars
Euro
British pound
128128
Net financial assets/(liabilities) – by currency of denomination
AUD
$000
–
(236)
3,607
(245)
3,126
USD
$000
Euro
$000
6,495
–
(5,404)
(359)
732
2,680
(6,177)
–
7,760
4,263
GBP
$000
5,556
(13)
4,018
–
9,561
Net financial assets/(liabilities) – by currency of denomination
AUD
$000
USD
$000
Euro
$000
GBP
$000
–
(1,233)
2,463
(2,036)
(268)
159
–
21,494
36,314
56,575
6,707
(3,452)
–
(15,139)
(11,884)
4,435
(10)
6,544
–
10,969
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued Sensitivity analysis
Based on the aforementioned group’s net financial assets/(liabilities) at 30 September 2021, a 1 per cent strengthening or weakening
of the following currencies at 30 September 2021 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 30 September 2020.
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
Weakening
Strengthening
Weakening
Profit or (loss)
after tax
30 Sep 2021
$000
Profit or (loss)
after tax
30 Sep 2021
$000
Profit or (loss)
after tax
30 Sep 2020
$000
Profit or (loss)
after tax
30 Sep 2020
$000
(80)
50
14
17
81
(50)
(14)
(17)
(68)
403
(265)
(70)
68
(399)
263
69
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 period:
AUD
US Dollar
Euro
GBP
BRL
Interest rate risk
Average rate
Reporting date
12 months to
30 Sep 2021
2 months to
30 Sep 2020
As at
30 Sep 2021
As at
30 Sep 2020
0.751
0.628
0.548
4.019
0.722
0.611
0.552
3.894
0.720
0.621
0.536
3.901
0.712
0.608
0.555
4.009
The group’s exposure to the risk of changes in market interest rates primarily relates to the group’s debt obligations that have floating
interest rates. This risk is mitigated by maintaining a level of fixed and floating rate borrowings, as well as the ability to use derivative
financial instruments when deemed appropriate to do so.
The majority of the group’s debt is raised under central borrowing programs. The A$490 million syndicated bank facility and the
group trade receivables securitisation facility are considered floating rate facilities. The group completed the refinancing of the
existing US$325 million senior unsecured notes due in October 2019 during April 2018. The former notes were refinanced through
the issuance of US$475 million senior unsecured notes due in April 2026 with a fixed coupon component.
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% (30 September 2020: 3.90%).
129129
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 27 Financial risk management and financial instruments (continued)
Interest rate risk (continued)
Profile
At the reporting date the interest rate profile of the group’s interest-bearing financial instruments were:
Variable rate instruments
Financial assets
Financial liabilities
Fixed rate instruments
Financial assets
Financial liabilities
Consolidated
Carrying amount
30 Sep 2021
$000
30 Sep 2020
$000
14,194
8,024
(389,321)
(372,244)
(375,127)
(364,220)
–
–
(659,447)
(667,322)
(659,447)
(667,322)
Sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) profit or loss by the amounts
shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The sensitivity is
calculated on the debt at 30 September 2021. Due to the seasonality of the crop protection business, debt levels can vary during the
period. The analysis is performed on the same basis for 30 September 2020.
30 Sep 2021
Variable rate instruments
Total sensitivity
30 Sep 2020
Variable rate instruments
Total sensitivity
Fair values
Profit or loss
100bp
increase
$000
(3,751)
(3,751)
100bp
decrease
$000
3,751
3,751
Profit or loss
100bp
increase
$000
(3,642)
(3,642)
100bp
decrease
$000
3,642
3,642
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 $659.447 million
(30 September 2020: $667.322 million), the fair value at 30 September 2021 is $677.582 million (30 September 2020: $678.166 million).
130130
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued Consolidated
30 Sep 2021
Cash and cash equivalents
Trade and other receivables excluding
derivatives
Other investments
Forward exchange contracts:
Assets
Liabilities
Interest rate swaps:
Assets
Liabilities
Trade and other payables excluding
derivatives
Secured bank loans
Unsecured bank loans
Senior unsecured notes
Other loans
Lease liabilities
Consolidated
30 Sep 2020
Cash and cash equivalents
Trade and other receivables excluding
derivatives
Other investments
Forward exchange contracts:
Assets
Liabilities
Interest rate swaps:
Assets
Liabilities
Trade and other payables excluding
derivatives
Secured bank loans
Unsecured bank loans
Senior unsecured notes
Other loans
Lease liabilities
Carried at
fair value
through
profit or loss
$000
Derivatives
used for
hedging
$000
Note
12
13
17
13
20
13
20
20
21
21
21
21
21
–
–
–
6,110
(4,779)
–
–
–
–
–
–
–
–
1,331
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Carried at
fair value
through
profit or loss
$000
Derivatives
used for
hedging
$000
Note
12
13
17
13
20
13
20
20
21
21
21
21
21
–
–
–
5,980
(6,098)
–
–
–
–
–
–
–
–
(118)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Financial
assets/
liabilities at
amortised
cost
$000
724,215
807,031
–
–
–
–
–
(934,444)
(227,872)
(9,072)
(659,447)
(8,814)
(143,563)
(451,966)
Financial
assets/
liabilities at
amortised
cost
$000
423,914
856,174
–
–
–
–
–
(860,927)
(208,156)
(10,549)
(667,322)
(8,919)
(144,620)
(620,405)
Financial
assets/
liabilities at
FVOCI
$000
–
–
3,887
–
–
–
–
–
–
–
–
–
–
Total
$000
724,215
–
807,031
3,887
6,110
(4,779)
–
–
(934,444)
(227,872)
(9,072)
(659,447)
(8,814)
(143,563)
3,887
(446,748)
Financial
assets/
liabilities at
FVOCI
$000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$000
423,914
856,174
–
5,980
(6,098)
–
–
(860,927)
(208,156)
(10,549)
(667,322)
(8,919)
(144,620)
(620,523)
131
131
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 27 Financial risk management and financial instruments (continued)
Fair values (continued)
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).
30 Sep 2021
Derivative financial assets
Other investments
Derivative financial liabilities
30 Sep 2020
Derivative financial assets
Other investments
Derivative financial liabilities
Level 1
$000
–
–
–
–
–
Level 1
$000
–
–
–
–
–
Consolidated
Level 2
$000
6,110
–
6,110
(4,779)
(4,779)
Consolidated
Level 2
$000
5,980
–
5,980
(6,098)
(6,098)
Level 3
$000
–
3,887
3,887
–
–
Level 3
$000
–
–
–
–
–
Total
$000
6,110
3,887
9,997
(4,779)
(4,779)
Total
$000
5,980
–
5,980
(6,098)
(6,098)
There have been no transfers between levels in either the 12 months ended 30 September.
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.
• Other techniques, such as discounted cash flow analysis and
seed rounding capital raises, are used to determine fair value
for the remaining financial instruments.
Capital management
During the year ended 30 September 2021 the Board's policy has
been 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.
132132
Following the year ended 30 September 2021, but before the
signing of this report a review of the group's capital structure
and capital management principles has been undertaken.
The Board's updated capital management policy aims to
maintain a robust and durable capital structure and provide
clear guidelines for the application of cash flow generated from
business operations. The policy includes a cascading approach
to capital allocation decisions that is consistent with maintaining
targeted credit metrics and a sound financial structure.
This cascading approach to capital allocation and the application
of free cashflow encompasses both capital investment decisions
and distributions paid to shareholders. While the Board of
Directors maintain discretion, it is intended that the group applies
free cashflow from business operations in the following manner:
1. Application of free cashflow to investment growth projects
and/or small bolt-on acquisitions where the projected returns
satisfy internal ROFE measures that exceed the group’s
weighted average cost of capital.
2. Consideration of the payment of a dividend from part of free
cashflow, subject to compliance with the core target leverage
(statutory) range of 1.5x – 2.0x, under the adoption of a new
dividend policy.
3. Consideration of any excess capital to be returned to
shareholders in circumstances where the group is below its
targeted leverage metrics and insufficient growth opportunities
exist to utilise excess free cashflow. These capital return measures
may include special dividends and share buy-backs.
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
period. There is a target and a stretch hurdle. These numbers
are based on the budget and growth strategy. The ROFE for the
year ended 30 September 2021 was 5.9 per cent.
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 28 Leases
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.
The group also leases IT equipment which have short term contracts and/or are low value items. The group has elected not
to recognise right-of-use assets and lease liabilities for these leases.
Right-of-use assets
Right-of-use assets included in property, plant and equipment (refer note 18) are as follows:
Balance at 1 October 2020
Additions to right-of-use assets
Depreciation charge for the period
Disposals and write-offs
Foreign exchange adjustment
Balance at 30 September 2021
Balance at 1 August 2020
Additions to right-of-use assets
Depreciation charge for the year
Disposals and write-offs
Foreign exchange adjustment
Balance at 30 September 2020
Amounts recognised in profit/(loss)
Depreciation on right of use assets
Lease liability interest expenses
Expenses relating to short-term leases
Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets
Amounts recognised in statement of cash flows
Operating cashflows
Lease liability interest payments
Short-term and low-value lease payments
Financing cashflows
Lease liability principal payments
Consolidated
Land and
buildings
$000
Plant and
machinery
$000
90,893
10,933
(15,211)
(800)
(266)
19,784
8,393
(6,965)
(466)
335
Total
$000
110,677
19,326
(22,176)
(1,266)
69
85,549
21,081
106,630
Consolidated
Land and
buildings
$000
Plant and
machinery
$000
91,157
2,600
(2,382)
(417)
(65)
19,580
1,825
(1,156)
(189)
(276)
Total
$000
110,737
4,425
(3,538)
(606)
(341)
90,893
19,784
110,677
Consolidated
12 months to
30 Sep 2021
$000
2 months to
30 Sep 2020
$000
(22,176)
(7,420)
(67)
(7)
(3,538)
(1,170)
(113)
(1)
(7,420)
(74)
(1,170)
(114)
(19,851)
(3,996)
133133
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 29 Capital commitments
The group had contractual obligations to purchase plant and equipment for $12.747 million at 30 September 2021
(30 September 2020: $4.943 million).
The group has agreed to make capital contributions in proportion to its interest in the Leshan Nong Fu Trading Co., Ltd joint venture
to make up any losses if required or at the latest within five years after incorporation, up to a maximum of RMB 35 million. Also refer
to note 16.
30 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.
Environmental guarantee given to the purchaser of land and buildings at Gennevilliers for EUR 8.5 million.
Brazilian taxation proceedings
Other bank guarantees
Contingent liabilities
Consolidated
30 Sep 2021
$000
30-Sep-20
$000
13,688
8,643
323
22,654
13,980
10,227
923
25,130
Obligations may arise in the future due to currently unknown
lawsuits and claims including those pertaining to product
liability, safety and health, environmental and tax matters which
may be instituted or asserted against the group. While the
amounts claimed may be substantial, the ultimate liability cannot
now be determined because of the considerable uncertainties
that existed at balance date. Nonetheless, it is possible that
results of the group's operations or liquidity in a particular period
could be materially affected by such claims.
Brazilian taxation proceedings
Following the sale of the Brazilian business in April 2020 to
Sumitomo, Nufarm retains a contingent liability in respect of
certain pre-sale tax assessments that are being challenged
and other potential tax liabilities.
As at 30 September 2021, the total contingent liability relating
to future potential tax liabilities in Brazil is $8.643 million
(30 September 2020: $10.227 million). The group considers that
it is not probable that a liability will arise in respect of these cases.
134134
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 31 Group entities
Company
Nufarm Limited – ultimate controlling entity
Subsidiaries
Access Genetics Pty Ltd
Agcare Biotech Pty Ltd
Agchem Receivables Corporation
Agryl Holdings Limited
Agtrol International SE DE CV
Ag-seed Research Pty Ltd
Ag-turf SA DE CV
AH Marks (New Zealand) Limited
AH Marks Australia Pty Ltd
AH Marks Holdings Limited
AH Marks Pensions Scottish Limited Partnership
Artfern Pty Ltd
Atlantica Sementes SA
Australis Services Pty Ltd
Bestbeech Pty Ltd
Chemicca Limited
CNG Holdings BV
COCRF Investor 177 LLC
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
Fidene Limited
First Classic Pty Ltd
Frost Technology Corporation
Greenfarm Hellas Trade of Chemical Products SA
Growell Limited
Grupo Corporativo Nufarm SA
Le Moulin des Ecluses s.a
Lefroy Seeds Pty Ltd
Manaus Holdings Sdn Bhd
Marman (Nufarm) Inc
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
Notes
Place of
incorporation
30 Sep 2021
30 Sep 2020
Percentage of shares held
(a)
(a)
(a)
(a)
(c)
(a)
Australia
Australia
USA
Australia
Mexico
Australia
Mexico
New Zealand
Australia
United Kingdom
United Kingdom
(a)
Australia
(a)
(a)
(a)
(b)
(a)
(a)
(a)
(a)
(a)
(c)
(a)
(c)
(a)
(a)
(a)
(a)
Brazil
Australia
Australia
Australia
Netherlands
USA
Australia
New Zealand
New Zealand
Australia
Australia
Australia
Australia
Canada
New Zealand
Australia
USA
Greece
United Kingdom
Guatemala
France
Australia
Malaysia
USA
Mexico
USA
Australia
Australia
Malaysia
Australia
Malaysia
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
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
135135
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 31 Group entities (continued)
Mastra Industries Sdn Bhd
Medisup Securities Limited
Munistrategies Sub-CDE 29, LLC
NF Agriculture Inc
Nufarm Africa SARLAU
Nufarm Agriculture (Pty) Ltd
Nufarm Agriculture Inc
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 Crop Products UK Limited
Nufarm Cropcare Private Limited
Nufarm Costa Rica Inc. SA
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 Inc
Nufarm Finance Pty Ltd
Nufarm Finance (NZ) Limited
Nufarm GmbH
Nufarm GmbH & Co KG
Nufarm Grupo Mexico S DE RL DE CV
Nufarm Holdings (NZ) Limited
Nufarm Holdings BV
Nufarm Holdings s.a.s
Nufarm Hong Kong Investments Ltd
Nufarm Hungaria Kft
Nufarm Inc
Nufarm Insurance Pte Ltd
Nufarm Investments Cooperatie WA
Nufarm Investment Pty Ltd
Nufarm Italia srl
Nufarm KK
Nufarm Korea Ltd
Nufarm Labuan Pte Ltd
136136
Notes
Place of
incorporation
30 Sep 2021
30 Sep 2020
Percentage of shares held
(a)
(b)
(a)
Malaysia
Australia
USA
USA
Morocco
South Africa
Canada
Zimbabwe
USA
USA
Malaysia
Australia
Netherlands
Canada
China
United Kingdom
India
Costa Rica
Guatemala
Mexico
Panama
Venezuela
Ecuador
Germany
Brazil
Spain
Germany
(b)
Netherlands
USA
Australia
New Zealand
Austria
Austria
Mexico
New Zealand
Netherlands
France
Hong Kong
Hungary
USA
Singapore
Netherlands
Australia
Italy
Japan
Korea
Malaysia
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
–
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 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued Nufarm Limited
Nufarm Malaysia Sdn Bhd
Nufarm Materials Limited
Nufarm Middle East Operations
Nufarm NZ Limited
Nufarm Paraguay SA
Nufarm Pensions General Partner Ltd
Nufarm Pensions Scottish Limited Partnership
Nufarm Peru SAC
Nufarm Platte Pty Ltd
Nufarm Polska SP.Z O.O
Nufarm Portugal LDA
Nufarm Romania SRL
Nufarm s.a.s
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 Turkey Import & Trade of Chemical Products LLP
Nufarm UK Limited
Nufarm Ukraine LLC
Nufarm Uruguay SA
Nufarm USA Inc
Nugrain Pty Ltd
Nuseed Americas Inc
Nuseed Canada Inc
Nuseed Europe Holding Company Ltd
Nuseed Europe Ltd
Nuseed Global Holdings Pty Ltd
Nuseed Global Innovation
Nuseed Global Management USA Inc
Nuseed Holding Company
Nuseed International Holdings Pty Ltd
Nuseed Mexico SA De CV
Nuseed Nutritional Australia Pty Ltd
Nuseed Nutritional US Inc
Nuseed Omega Holdings Pty Ltd
Nuseed Pty Ltd
Nuseed Russia LLC
Nuseed SA
Nuseed Serbia d.o.o.
Nuseed South America Sementes Ltda
Nuseed Ukraine LLC
Nuseed Uruguay SA
Notes
Place of
incorporation
30 Sep 2021
30 Sep 2020
Percentage of shares held
United Kingdom
Malaysia
Australia
Egypt
New Zealand
Paraguay
United Kingdom
United Kingdom
Peru
Australia
Poland
Portugal
Romania
France
Singapore
Malaysia
Switzerland
Malaysia
New Zealand
Australia
Australia
Turkey
(a)
(a)
(a)
(a)
United Kingdom
Ukraine
Uruguay
USA
(a)
Australia
USA
Canada
United Kingdom
United Kingdom
(a)
Australia
United Kingdom
(a)
(a)
(a)
USA
USA
Australia
Mexico
Australia
USA
Australia
Australia
Russia
Argentina
Serbia
Brazil
Ukraine
Uruguay
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
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
137137
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 31 Group entities (continued)
Nutrihealth Grain Pty Ltd
Nutrihealth Pty Ltd
Opti-Crop Systems Pty Ltd
Pharma Pacific Pty Ltd
PT Agrow
PT Crop Care
PT Nufamindo Agro Mukmur
PT Nufarm Indonesia
Richardson Seeds Ltd
Selchem Pty Ltd
Societe Des Ecluses De la Garenne
3 Rivers Sub-CDE 5 LLC
Notes
Place of
incorporation
30 Sep 2021
30 Sep 2020
Percentage of shares held
(a)
(a)
(a)
Australia
Australia
Australia
Australia
Indonesia
Indonesia
Indonesia
Indonesia
USA
(a)
Australia
(b)
France
USA
100
100
75
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, varied by an Assumption Deed dated 13 February 2013, 29 May 2013 and 26 July 2019
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) The group does not hold any ownership interests in these entities, however, based on the terms of agreement under which these entities were established, the group
controls the operations of these entities.
(c) These entities ceased operations during the 12 months ended 30 September 2021 resulting in liquidation of the entity or amalgamation with other group entities.
138138
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued 32 Company disclosures
Result of the company
Profit/(loss) for the period
Other comprehensive income
Total comprehensive profit/(loss) for the period
Financial position of the company at the period end
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the company comprising of:
Share capital
Reserves
Accumulated losses
Retained Earnings(a)
Total equity
Company
12 months to
30 Sep 2021
$000
Restated*
2 months to
30 Sep 2020
$000
8,995
1,217
10,212
703
(76)
627
As at
30 Sep 2021
$000
Restated*
As at
30 Sep 2020
$000
603,049
1,462,687
2,109,791
2,360,789
125,423
129,970
392,703
395,247
1,835,888
1,834,934
45,257
(57,512)
40,927
(57,512)
156,188
147,193
1,979,821
1,965,542
(a) Retained earnings comprises the transfer of net profit for the period and are characterised as profits available for distribution as dividends in future periods.
No dividends (30 September 2020: $nil) were distributed from the retained earnings during the period.
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii).
Company contingencies
The company is one of the guarantors of the senior secured
bank facility (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 company also provides
guarantees to support several of the regional working capital
facilities located in Europe, and the senior unsecured notes.
Company capital commitments for acquisition
of property, plant and equipment
There are no capital commitments for the company
at 30 September 2021 or 30 September 2020.
139139
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 33 Deed of cross guarantee
Under ASIC Corporations (Wholly owned Companies) Instrument 2016/785, the Australian wholly-owned subsidiaries referred
to in note 31 are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports
and director's reports.
It is a condition of the class order that the company and each of the subsidiaries enter into a deed of cross guarantee. The company
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 30 September 2021 follows.
Summarised income statement and retained profits
Profit/(loss) before income tax expense
Income tax (expense)/benefit
Net profit/(loss) attributable to members of the closed group
Retained profits/(losses) at the beginning of the period
Dividends paid
Retained profits/(losses) at the end of the period
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii).
Consolidated
12 months to
30 Sep 2021
$000
Restated*
2 months to
30 Sep 2020
$000
83,658
6,660
90,318
(17,153)
1,406
(15,747)
(184,873)
(169,126)
–
–
(94,555)
(184,873)
140140
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued Balance sheet
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax assets
Total current assets
Non-current assets
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
Provision
Total current liabilities
Non-current liabilities
Loans and borrowings
Deferred tax liabilities
Employee benefits
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Share capital
Other contributed equity
Reserves
Retained earnings
TOTAL EQUITY
* Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii)
As at
30 Sep 2021
$000
Restated*
As at
30 Sep 2020
$000
192,869
44,840
1,266,190
1,367,640
209,118
12,361
211,700
6,802
1,680,538
1,630,982
2,809
1,252,619
64,236
106,904
167,793
549
918,713
55,222
113,638
165,845
1,594,361
1,253,967
3,274,899
2,884,949
925,980
619,439
2,162
11,199
799
10,564
950,704
2,265
8,580
3,639
23,294
657,217
372,492
377,648
42,737
12,184
43,616
10,184
427,413
431,448
1,378,117
1,088,665
1,896,782
1,796,284
1,835,888
1,834,934
73,691
81,758
73,691
72,532
(94,555)
(184,873)
1,896,782
1,796,284
141141
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 34 Related parties
a) Transactions with related parties in the wholly-owned group
The group entered into the following transactions during the period 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
Sumitomo Chemical Company Ltd:
Sale of goods and services
Purchase of goods and services
Crop.zone GMBH:
Lease liability repayments
Lease liability interest expense
Purchase of goods and services
Sumitomo Chemical Company Ltd:
Trade receivable
Trade payable
Crop.zone GMBH:
Trade payable
Lease liability
Consolidated
12 months to
30 Sep 2021
$000
2 months to
30 Sep 2020
$000
262,307
104,754
49,140
14,261
354
23
259
–
–
–
As at
30 Sep 2021
$000
As at
30 Sep 2020
$000
145,715
28,008
166,253
11,730
63
1,726
–
–
In August 2021, Nufarm provided a bank guarantee to support Crop.zone GmbH for a value of € 250,000.
These transactions were undertaken on commercial terms and conditions, and include certain transactions disclosed within the non
operating corporate segment (note 5) in accordance with a two year supply agreement that the group and Sumitomo Chemical
Company Ltd agreed upon the sale of the group’s South American business (‘Supply Agreement’). Under the Supply Agreement, active
ingredient manufactured by the group is transacted at an agreed market price. This resulted in the recognition of an onerous contract
in April 2020 (note 6). The balance of the product supplied under the Supply Agreement is transacted at the cost incurred by the group.
c) Key management personnel compensation
The key management personnel compensation included in personnel expenses (see note 9) are as follows:
Consolidated
12 months to
30 Sep 2021
$
2 months to
30 Sep 2020
$
5,690,145
223,766
813,467
213,492
840,863
40,178
(174,272)
–
(129,172)
4,146
6,811,698
710,915
Short term employee benefits
Post employment benefits
Equity compensation benefits
Termination benefits
Other long term benefits
142142
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021Notes to the consolidated financial statements continued Individual directors and executives
compensation disclosures
Information regarding individual directors and executives
compensation is provided in the remuneration report section
of the director’s report.
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 reporting period
and there were no material contracts involving director’s interest
existing at the end of this period.
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
35 Auditors' remuneration
company or its subsidiaries in the reporting period. The terms
and conditions of the transactions with management persons
and their related parties were no more favourable than those
available, or which might reasonably be expected to be
available, on similar transactions to non-director related entities
on an arms-length basis.
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 30 September 2021 (30 September 2020: nil).
Consolidated
12 months to
30 Sep 2021
$
2 months to
30 Sep 2020
$
Audit services
KPMG Australia
Audit and review of group financial report
852,332
444,000
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 auditors
Other assurance services
Other advisory services
Other services remuneration
36 Subsequent events
2,597,914
906,813
3,450,246
1,350,813
237,524
52,265
3,613,861
1,403,078
–
–
–
92,865
–
21,877
114,742
–
–
–
–
–
64,115
64,115
On 15 October 2021 a distribution was paid by Nufarm Finance (NZ) on the Nufarm step-up securities. The distribution was 4.00%
resulting in a gross distribution of $5.029 million.
A final dividend of four cents per share, totalling $15.196 million, was declared on 17 November 2021 and will be paid on
17 December 2021 (2020: no dividends declared).
Other than noted above, no matters or circumstances have arisen in the interval between 30 September 2021 and the date of this
report that, in the opinion of the directors, have or may significantly affect the operations, results or state of affairs of the group
in subsequent accounting periods.
143143
Nufarm Limited | Annual Report 2021Nufarm Limited | Annual Report 2021 Directors’ declaration
1 In the opinion of the directors of Nufarm Limited (the company):
(a) the consolidated financial statements and notes are in accordance with the Corporations Act 2001 including:
(i) giving a true and fair view of the group’s financial position as at 30 September 2021 and of its performance for the twelve
months 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 31 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 Corporations (Wholly owned Companies) Instrument 2016/785.
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 twelve months ended 30 September 2021.
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 17th day of November 2021
JC Gillam
Director
GA Hunt
Director
144
Nufarm Limited | Annual Report 2021 Independent Audit Report
Independent Auditor’s Report
To the shareholders of Nufarm Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Nufarm Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance with
the Corporations Act 2001, including:
giving a true and fair view of the Group’s
financial position as at 30 September 2021
and of its financial performance for the year
ended on that date; and
The Financial Report comprises:
Consolidated balance sheet as at 30
September 2021
Consolidated statement of profit or loss and
other comprehensive income, Consolidated
statement of changes in equity, and
Consolidated statement of cash flows for the
year then ended
Notes including a summary of significant
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
accounting policies
Directors’ Declaration.
The Group consists of the Company and the
entities it controlled at the year-end or from time
to time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with the Code.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo
are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a
scheme approved under Professional Standards Legislation.
145
Nufarm Limited | Annual Report 2021
Independent Audit Report continued
Key Audit Matters
The Key Audit Matters we identified are:
Recoverability of non-current assets,
including property, plant and equipment and
intangible assets
Recoverability of deferred tax assets in
relation to tax losses
Key Audit Matters are those matters that, in our
professional judgement, were of most significance
in our audit of the Financial Report of the current
period.
These matters were addressed in the context of
our audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Recoverability of non-current assets, including property, plant and equipment ($441.4m) and
intangible assets ($1,243.8m)
Refer to the following notes to the financial report: Note 2(d)(ii) Basis of preparation – Use of
estimates and judgments – impairment testing, Note 3(i)(ii) Significant accounting policies –
Impairment – Non-financial assets, Note 18 Property, plant and equipment, and Note 19 Intangible
assets.
The key audit matter
How the matter was addressed in our audit
Recoverability of non-current assets, including
property, plant and equipment and intangible
assets, is a key audit matter due to the
following:
Inherent complexity in determination of the
Group’s cash generating units (“CGU’s”),
noting that the Group prepares a separate
discounted cash flow model for each CGU.
The diverse nature of regional agricultural
markets in which the Group operates,
noting that each geographic and product
market segment experiences the following
factors which are subject to inherent
uncertainty leading to a range of possible
forecast outcomes:
-
fluctuating demand depending on
economic and climatic conditions;
- significant regulatory activity and
oversight, which can lead to approval
and cessation of new and existing
products; and
-
technological advancements by the
Group and competitors, which can lead
to shifts in market demand for products.
Given the unique, non-homogenous, nature
of these factors, specific auditor attention is
applied to each element, increasing the
overall audit effort in this area. We focus
Our procedures included:
Using our understanding of the nature of the
Group’s business, we analysed:
-
-
the internal reporting of the Group to
assess how results are monitored and
reported; and
the implications for CGU identification in
accordance with accounting standards.
Considering the appropriateness of the value in
use method applied by the Group to perform
the annual impairment test against the
requirements of the accounting standards.
Assessing the integrity of the value in use
model used, including the accuracy of the
underlying calculation formulas.
Testing the design and implementation of key
controls over the cash flow models, including
Board consideration and approval of key
assumptions and business unit budgets which
form the basis of the cash flow forecasts.
Assessing the Group’s discounted cash flow
models and key assumptions by:
- comparing forecast cash flows to historical
trends and performance, by CGU, to inform
our evaluation of the forecasts incorporated
into the models and company-specific risk
premiums incorporated into the discount
146
Nufarm Limited | Annual Report 2021
on the authority and knowledge of the
sources of judgements incorporated into
the cash flow models, evidence of bias and
consistency of application of judgements.
The above factors increase the complexity
in auditing both the assessed useful lives
for individual intangible assets, and also the
forward-looking assumptions contained in
the Group’s discounted cash flow models
for each CGU. Additional key assumptions
we focused on included growth rates
during the forecast period, terminal value
growth rates and discount rates.
These same conditions impact our audit
effort associated with assessing the
capitalised development costs intangible
asset, in particular the recoverable amount
of new products in development phases.
Products in early stages of development,
compared to those closer to product
launch, are prone to a wider range of
forecast outcomes and projections can
contain highly judgemental assumptions.
We focused on the authority and
knowledge of the sources of judgements
incorporated into the valuation, common
market practices and consistency of
judgements.
We involved valuation specialists to supplement
our senior audit team members in assessing
this key audit matter.
rates;
- comparing the relevant cash flow forecasts
to the Board approved budgets and FY22-
FY24 business plans;
- working with our valuation specialists, we
independently developed a discount rate
range and terminal growth rate for each
CGU, using publicly available market data
for comparable entities, adjusted for risk
factors specific to the CGU and the industry
it operates in. We compared the discount
rates and terminal growth rates applied by
the Group for each CGU to our acceptable
ranges; and
- using our industry knowledge, information
published by regulatory and other bodies
and information obtained through inquiries
with the Group to challenge key
assumptions. This included the forecast
cash flows and growth assumptions in light
of recent operating performance, the useful
lives associated with specific intangible
assets and the impact of technology,
market and regulatory changes on those
assumptions. We looked for evidence of
sensitivity and bias within and across
models, and consistency of application,
investigating significant differences.
Evaluating the Group’s sensitivity analysis in
respect of the key assumptions in the models
to identify those assumptions at higher risk of
bias or inconsistency in application and to
focus our further procedures.
Working with our valuation specialists, we
assessed the reasonableness of forecast cash
flows by comparing implicit earnings and asset
multiples from the models to corresponding
multiples of comparable entities.
Assessing the related disclosures included in
the financial report using our understanding of
the matter obtained from our testing and
against the requirements of accounting
standards.
147
Nufarm Limited | Annual Report 2021
Independent Audit Report continued
Recoverability of deferred tax assets in relation to tax losses ($44.3m)
Refer to the following notes to the financial report: Note 2(d)(iii) Basis of preparation – Use of
estimates and judgements – income tax, Note 3(p) Significant accounting policies – Income tax, Note
11 Income tax expense and Note 15 Tax assets and liabilities.
The key audit matter
How the matter was addressed in our audit
Recoverability of deferred tax assets in relation
to tax losses is a key audit matter due to the:
Complexity in auditing the forward-looking
assumptions applied to the Group’s tax loss
utilisation models, especially given the
multiple tax jurisdictions and their bespoke
tax regimes. Further details on the
significant forward-looking assumptions and
implications for the audit are contained in
the Key Audit Matter relating to the
recoverability of non-current assets,
including property, plant and equipment and
intangible assets. Additional auditor
attention is focused on the reconciliation of
forecast cash flows to forecasts of taxable
income for each tax jurisdiction.
Age of the tax losses, and the relevance of
recent taxable profits to forecasts.
The large number of jurisdictions and our
need to consider their varying and complex
rules on tax loss utilisation. This
necessitated involvement of our tax
specialists to supplement our senior audit
team members in relevant jurisdictions.
Our procedures included:
Testing design and implementation of key
controls over the taxable income forecasts
underpinning the tax loss utilisation models,
including Board consideration and approval of
key assumptions and business unit budgets
which form the basis of these forecasts.
Comparing the key assumptions and business
unit budgets for consistency with those tested
by us, as set out in the Key Audit Matter
relating to the recoverability of non-current
assets, including property plant and equipment
and intangible assets, and also comparing the
reconciliation of these budgets to taxable
income concepts.
Assessing the Group’s tax loss utilisation
models and key assumptions, by significant
jurisdiction, by:
- comparing taxable income to historical
trends and performance to inform our
evaluation of the current taxable profit
forecasts;
- evaluating the key assumptions in the
Group’s forecast tax loss utilisation models,
including the identification of areas of
estimation uncertainty to focus further
procedures;
- understanding the timing of future taxable
income and considering the consistency of
the timeframes of expected recovery to our
knowledge of the business and its plans;
and
-
involving our tax specialists and teams from
relevant jurisdictions to assess the tax loss
utilisation expiry dates and annual utilisation
allowances for consistency with local
practice, regulatory parameters and
legislation.
148
Nufarm Limited | Annual Report 2021
Other Information
Other Information is financial and non-financial information in Nufarm Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor's Report. The Directors are
responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001
implementing necessary internal control to enable the preparation of a Financial Report that gives
a true and fair view and is free from material misstatement, whether due to fraud or error
assessing the Group and Company’s ability to continue as a going concern and whether the use
of the going concern basis of accounting is appropriate. This includes disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless they
either intend to liquidate the Group and Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
Auditor’s Report.
149
Nufarm Limited | Annual Report 2021
Independent Audit Report continued
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Nufarm Limited for the year ended 30
September 2021 complies with Section 300A of
the Corporations Act 2001.
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 responsibilities
We have audited the Remuneration Report
included in the Directors’ report for the year ended
30 September 2021.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit
conducted in accordance with Australian Auditing
Standards.
KPMG
Chris Sargent
Partner
Melbourne
17 November 2021
150
Nufarm Limited | Annual Report 2021
Shareholder and Statutory Information
Substantial shareholders
As at 30 September 2021, the names of the substantial holders of the Company and the number of equity securities in which those
substantial holders and their associates have a relevant interest, as disclosed in substantial holding notices given to the Company,
are as follows:
Holder of Equity Securities
Allan Gray Australia Pty Ltd
Firetrail Investments Pty Ltd
Sumitomo Chemical Company Limited
Nufarm Limited1
Aware Super Pty Ltd as trustee of Aware Super
Number of
Equity
Securities
held
37,131,613
30,241,799
60,271,136
60,271,136
19,759,960
% of total
issued
securities
capital in
relevant class
9.78%
7.96%
16.38%
16.38%
5.20%
1. Nufarm Limited has a relevant interest in the shares held by Sumitomo Chemical Company Limited. The relevant interest arises under a Shareholder Deed dated
22 January 2010 between Nufarm and Sumitomo which contains certain obligations to the voting and disposal of shares in Nufarm by Sumitomo.
Number of holders
As at 30 September 2021, the number of holders is as follows:
Class of Equity Securities
Fully paid ordinary shares
Number of
holders
15,239
Less than marketable parcels of ordinary shares (UMP Shares)
The number of holders of less than a marketable parcel of ordinary shares based on the closing market price at 30 September 2021
is as follows:
Total Shares
379,907,116
UMP Shares
UMP Holders
% of issued shares held by UMP holders
33,918
1,095
0.001%
Voting rights of equity securities
As at 30 September 2021, there were 15,239 holders of a total of 379,907,116 ordinary shares of the Company. At a general meeting
of the Company, every holder of ordinary shares present in person or by proxy, attorney or representative has one vote on a show of
hands and, on a poll, one vote for each ordinary share held. On a poll, every member (or his or her proxy, attorney or representative)
is entitled to vote for each fully paid share held and, in respect of each partly paid share, is entitled to a fraction of a vote equivalent
to the proportion which the amount paid up (not credited) on that partly paid share bears to the total amounts paid and payable
(excluding amounts credited) on that share. Amounts paid in advance of a call are ignored when calculating the proportion.
Distribution of holders of equity securities
The distribution of holders of equity securities on issue in the Company as at 30 September 2021 is as follows:
Distribution of Ordinary Shareholders
Holdings Ranges
Holders
Total Units
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 Over
6,623
6,223
1,449
888
56
2,922,541
15,474,785
10,754,083
20,421,943
%
0.77
4.07
2.83
5.38
330,333,764
86.95
151
Nufarm Limited | Annual Report 2021 Shareholder and Statutory Information continued
Twenty largest shareholders
Rank
Name
Units
% Units
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SUMITOMO CHEMICAL COMPANY LIMITED
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
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