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CVR PartnersNufarm Limited Annual Report 2023 2023 Annual Report2023 Annual Report Contents
Financial year 2023 overview
Chair’s message
CEO’s message
About us
Our business
Environmental, social and governance
Summary of our sustainability performance
External recognition of our sustainability journey
Operating and Financial Review
Board of directors and key
management personnel
Corporate governance statement
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Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Financial Statements
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
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About this report
This annual report is a summary of the operations,
activities and performance of Nufarm Limited (ABN 37
091 323 312) and its controlled entities for the year
ended 30 September 2023 and its financial position as
at 30 September 2023.
In this report, unless otherwise stated, references to
'Nufarm', 'the Nufarm Group', 'the group', 'we', 'us' and
'our' and similar expressions refer collectively to Nufarm
Limited and its controlled entities. Unless otherwise
stated, financial information in this report is presented
on the basis as described in the Notes to the Financial
Statements basis of preparation on page 86. Nufarm
Limited shares trade on the ASX under the listing code
of NUF.
All financial data is presented in Australian dollars
unless otherwise stated.
Forward looking statements and scenario analysis
This report contains forward-looking statements,
including our expected business strategies, business
performance and market conditions including with
respect to climate change and other environmental
and energy transition scenarios. While these forward
looking statements reflect Nufarm’s current knowledge,
expectations and assumptions at the date of this
report, they are not guarantees or predications of
future performance or statements of fact and Nufarm
does not give any assurance that the assumptions will
prove to be correct. They involve known and unknown
risks and uncertainties, which may cause actual
outcomes and developments to differ materially from
those expressed in the statements contained in this
annual report. Relevant factors may include (without
limitation) changes in product demand, the timing
and success of new product launches, decisions by
regulatory authorities regarding approval and ongoing
registration of Nufarm products, operational changes,
difficulties or delays in manufacturing, third party
supply interruptions, weather volatility, cyberattack/
unauthorised access, the loss of key personnel,
safety incidents, environmental damage, product
contamination and quality, compliance breaches,
litigation or government investigations, global economic
and geo-political uncertainty and conflict, energy
security and inflation including increases in costs of
goods, and the effect of economic conditions generally.
Further information about Nufarm’s risks are set out on
pages 25 to 31 of this annual report.
This report also contains scenario analysis related
to potential climate impacts. Scenario analysis
has inherent limitations, including its reliance on
assumptions that may or may not prove to be correct
or eventuate, and may be impacted by factors apart
from the assumptions disclosed. It is difficult to predict
which (if any) of the scenarios might eventuate.
Nufarm cautions readers against undue reliance on any
forward-looking statements or guidance, particularly
in light of the current economic climate with the
significant volatility, uncertainty and disruption caused
by global events such as geopolitical tensions and
the inherent uncertainty in possible policy, market and
technological developments in the future. Except as
required by applicable laws or regulations, Nufarm
does not undertake to publicly update or review any
forward-looking statements, whether as a result of new
information or future events. Past performance cannot
be relied on as a guide to future performance.
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 Nufarm’s business, make
decisions on the allocation of its resources and assess
operational management. Non-IFRS measures have
not been subject to audit or review. Notes explaining
underlying EBIT and underlying EBITDA can be found
on page 23 of this annual report.
2
Nufarm Limited | Annual Report 2023
Financial year 2023 overview
Our diverse portfolio and geographic footprint provide earnings stability and resilience.
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Nufarm Limited | Annual Report 2023
3
Continue to strive towards our zero-injury goalStatutory NPAT up 3%Underlying EBIT up 6%Underlying EBITDA down 2%Net debt to underlying EBITDA within target rangeMaintained dividend at 10cpsSafety (Lost time injury frequency rate per 1,000,000 hours worked)0.8FY22FY231.46Net profit after tax(A$m)107FY22FY23111UnderlyingEBIT (A$m)237FY22FY23250UnderlyingEBITDA (A$m)447FY22FY23438Net debt to underlying EBITDA (times)0.8FY22FY231.9Total dividend(cps)FY22FY231010
Chair’s message
“Over the past year, Nufarm has taken
strong strides in establishing itself as a
global agricultural innovator with exciting
technologies and a promising growth pipeline.”
Strong earnings result and acceleration of our
growth strategy
Nufarm performed strongly in 2023, reporting a statutory
net profit after tax three percent above the prior year and
achieving a number of important milestones as we advanced
our growth strategy.
Whilst the external environment was more challenging than
the prior year, the result is an outcome of a disciplined focus
on growth and performance. Diversity across geographies
and core crops helped our crop protection business. Our
seed technology business continues to increase its revenue
and profit contribution to the group and its expansion into
new, sustainable technologies is providing a platform for
accelerated growth.
The board declared an unfranked final dividend of 5 cents per
share, taking the total dividend for the year to 10 cents per
share, in line with the prior year.
Our balance sheet has been further strengthened with major
refinancing activities completed. Nufarm has a flexible and
durable capital structure that supports growth and provides
greater financial resilience across operating cycles.
Strategic focus on innovation and technology
Agriculture faces major global forces that present significant
opportunities for Nufarm. The world needs to feed a growing
global population that is nearing 10 billion people, and that
must be done in more sustainable ways. At the same time,
plant-based solutions that aim to meet clean energy and other
environmental needs are arising.
Nufarm is positioning itself at the centre of these changes
where the opportunities are significant. We are an agricultural
innovator, where technology and innovation are central to the
future of our business.
Our activities in this area all progressed strongly during the
year, including expansions of our biopesticides, omega-3 and
bioenergy platforms. Unique synergies from our combined crop
protection and seeds market presence will enhance and help
accelerate these growth initiatives.
Thanks to our people
The safety of our people is a core priority for the board
and management. A number of global events mean that we
continue to face higher than usual volatility in our businesses.
The Nufarm team has very diligently and safely managed these
challenges, ensuring we meet customers’ ongoing needs and
deliver on our promises.
On behalf of the board, I would like to sincerely thank all our
people, led by Greg and his executive team, for their terrific
dedication and commitment to Nufarm.
Our commitment to sustainability
At Nufarm we define "agricultural sustainability" as the ability
of the agricultural value chain to reliably and securely produce
affordable food, feed and fuel in ways that regenerate the
environment, meeting the ongoing needs of future generations.
Through the development and delivery of new solutions
we have chosen to focus on four of the United Nations
Sustainable Development Goals (UN SDGs), which set the
global sustainability ambition for 2030. Those are Zero Hunger,
Life Below Water, Climate Action and Life on the Land. We
are proud of the impact our solutions can have on these
four challenges and believe that our agricultural portfolio, our
aquaculture and nutritional portfolio of Omega-3 Canola and
our bioenergy portfolio of Carinata and Energy Cane will help
the world evolve to its ambition of making substantial progress
in these areas.
Within our operations we focus on three UN SDGs Climate
Action, Responsible Production and Consumption and Gender
Diversity. We continue to progress in these areas by actively
working towards our first-step targets set around emissions,
waste, volatile compounds and environmental management at
our manufacturing sites. We have seen measurable progress
in our gender diversity metrics in the last year and continue
to pursue an agenda that encourages greater inclusion and
diversity recognising the critical link between diversity of ideas
and our ability to meet our ambition of agricultural innovation.
We have invested this year in new sustainability skills and talent
and are planning to review our overall sustainability strategy and
targets in FY24.
I encourage you to read our sustainability report which has also
been released today with our annual report.
4
Nufarm Limited | Annual Report 2023
Board renewal
Our board renewal program to ensure a diverse mix of skills,
experience and tenure that is aligned with the future of our
business completed its final phase in 2023. In order to draw
from experience in all our operating geographies, we now have
independent non-executive directors with deep career expertise
in Europe, North America and South America.
In November 2023, longstanding non-executive directors
Gordon Davis and Peter Margin retired from the board.
Gordon joined the board in May 2011. During his 12
year tenure at Nufarm, Gordon served on numerous
board committees, including chairing the risk and
compliance committee.
Peter Margin joined the board in October 2011. Peter also
served on numerous committees during his tenure, most
notably chairing the human resources committee.
We thank Gordon and Peter for their longstanding valuable
contributions and commitment to Nufarm.
Earlier in the year we were pleased to welcome to the
board Federico Tripodi and Adrian Percy as independent non-
executive directors.
Federico has close to three-decades of involvement in the
global agri-food sector with his experience spanning general
management, research and development, corporate strategy
and the commercialization of novel plant biotechnologies
targeted for consumers and farmers.
Adrian is currently the inaugural Executive Director of the NC
Plant Sciences Initiative at North Carolina State University and
brings more than 30 years of global experience to Nufarm in
the areas of research and development and commercialisation
of crop protection chemistry and biologicals, seeds and traits.
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Nufarm is strongly positioned
to perform well through
a focused growth strategy
matched with disciplined
operational performance and
capital management.
The future is positive
Substantial progress has been made in FY23 advancing
Nufarm’s long-term growth agenda. As such, we look to FY24
and beyond with confidence.
Nufarm is strongly positioned to perform well through a
focused growth strategy matched with disciplined operational
performance and capital management.
On behalf of the board, I would again like to thank all our
people for their unwavering dedication and commitment. We
recognise the challenges they face and their efforts in ensuring
we meet our customers’ needs are greatly appreciated.
And to all of our shareholders, thank you for your ongoing
support of Nufarm.
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John Gillam
Chair
8 December 2023
Nufarm Limited | Annual Report 2023
5
CEO’s message
“2023 was an excellent year for Nufarm.
We delivered a strong result during a challenging
year and made substantial progress on our
growth initiatives.”
Record results
In FY23, Nufarm generated statutory net profit after tax of
$111 million, an increase of 3 per cent on the prior comparative
period (pcp).
Progressing our long-term growth agenda
We continued to progress on our long-term growth agenda,
introducing innovative new crop protection products and
expanding our Omega-3 Canola and bioenergy platforms.
Our approach is to remain agile and nimble. Our strategy of
collaborating with third party research companies, institutions
and universities provides access to new technologies without
having to invest significant capital in early-stage research
and discovery. Examples include our partnerships with the
Commonwealth Scientific and Industrial Research Organisation
(CSIRO) which led to the development of Nuseed Omega-3
Canola, the Universitites of Liverpool and Adelaide, and U.S.
based novel products discovery company, Enko.
During the year our Omega-3 Canola platform reached
another important milestone, with Norway approving the use
of Aquaterra® in fish feed. We made progress in our bionenergy
platform, and delivered the first shipment of Carinata under our
strategic 10-year offtake agreement with bp. During the year
we also completed the integration of Energy Cane which we
acquired in the prior year from GranBio, a leading Brazilian
industrial biotechnology group.
These developments reflect a new direction for Nufarm. We
have repositioned the company and now direct ourselves
increasingly towards agricultural innovation, believing novel
technology will play a greater role in driving the future growth
of our business.
Whilst external conditions were more challenging than the prior
year, our focused strategy and execution combined with the
efforts of our peple delivered a strong result.
The results validate our transformation program, our strategy
to focus on core crops and key geographies, and our
ongoing investment in the development of our seed
technologies platforms.
We continue to execute on our strategic plan. Our
balance sheet is strong and supports implementation of our
growth agenda.
Our operating segments performed
strongly during the year
The global market for crop protection products was challenging
in FY23. There was widespread channel destocking resulting
from higher interest rates and expectations of falling active
ingredients prices. These impacts were most pronounced in
foundational products and led to reduced sales for Nufarm
across all regions. Strong outcomes from new product
introductions helped mitigate these impacts.
Despite these challenges Nufarm recorded a solid crop
protection result. Total crop protection sales revenue fell 6%
and underlying EBITDA fell 9%. During the period we continued
to invest in our new product pipeline as well as manufacturing
and supply chain efficiency with significant investment into
Wyke and Chicago Heights.
Seed technologies delivered an excellent result. Revenue of
$393 million increased 33%. Increased revenue from seed
sales reflected stronger demand for hybrid canola varieties
in Australia, South America and Canada; sorghum in Brazil,
USA and other international markets; and sunflower in key
global markets. Underlying EBITDA of $98 million was up
67%, reflecting strong growth in our base seeds business
as well as the recognition of license revenues in our seed
technologies portfolio.
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Nufarm Limited | Annual Report 2023
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Recognising our stakeholders
Our key stakeholders deserve recognition in what has been
another year of challenges as well as opportunities.
Our customers sit at the core of our operations. In FY23 we
have been grateful for their ongoing support and loyalty. They
recognise Nufarm for its range of products, competitive pricing,
efficient supply, and after sales support; in return we stand
by them as we meet their needs and help them GROW A
BETTER TOMORROW®.
We are extremely grateful for the dedication shown by our
people in delivering outstanding outcomes for our customers.
Their continuing determination and flexibility in a challenging
global environment are truly inspiring and reflect our Nufarm
brand and our customer promise.
On behalf of the management team, I would also like to thank
the board for their ongoing support and guidance.
And finally, to our shareholders, thank you for your support and
shared belief in the future of Nufarm.
Macro trends support our revenue aspirations
The crop protection market is expected to continue to grow
and our product development pipeline, with more than 200
projects, will enable us to take an increasing share of this
growing market. Our Omega-3 Canola meets the growing need
for sustainable solutions for fish feed in commercial aquaculture
as well as providing an alternative to conventional fish oil in
human nutritionals. In our bioenergy portfolio, Carinata meets
a growing need for the production of sustainable aviation fuel
which is being driven by policy to reduce carbon emissions
from aviation.
We remain on track to meet our annual revenue aspirations of
$4.6 billion by 2026, including $600–$700 million of revenue at
20-25% EBITDA margin from seed technologies.1
We remain on track to
meet our annual revenue
aspirations of $4.6 billion
by 2026, including $600–
$700 million of revenue at
20-25% EBITDA margin from
seed technologies.1
Greg Hunt
Chief Executive Officer
8 December 2023
1 For details of our FY26 revenue aspirations refer to our Investor Presentation on 3 Feb 2022, as updated in Nov 2022 and affirmed in May 2023 and in this
report. All statements in relation to future revenue aspirations are based on management estimates & reflect management’s internal goals & should not be
taken as forecasts or guidance.
Nufarm Limited | Annual Report 2023
7
About us
Our business
The agricultural industry and Nufarm are evolving to meet global sustainability challenges.
Nufarm is a global company based in Australia. For more than
100 years, we have been helping farmers, locally and globally,
meet changing nutrition and energy needs. We are focused
on crop protection and seed technology solutions to help
our customers meet new global challenges through innovation
and technology.
Today, Nufarm takes an integrated approach to crop science
innovation. We leverage our unique capabilities across
chemistry, production, seeds, digital sciences and alliances to
deliver the products our customers depend on, and to unlock
new solutions, business models and value chains, and help
growers produce more while conserving natural resources.
Across our crop protection and seed technologies platforms,
we invest in technologies that deliver innovative solutions to
combat weeds, pests and disease, and we deliver new crops,
traits and hybrid varieties that generate new sources of value
and will serve entirely new markets.
Our group strategy focuses on four key regions (North America,
Europe, Asia Pacific and South America)1 and 10 core crops
and seeds where we can provide most value. These have been
carefully selected based on our portfolio, market position and
the potential for growth.
Our platforms also strengthen agricultural sustainability, which
to us means reliably producing more affordable food, feed
and fuel in ways that support farmer livelihoods and
regenerate the environment. As we increasingly steer our
business towards innovation, we are forging partnerships with
agricultural collaborators and world-class innovators. We are
thinking bigger and bolder. Nufarm is the first company to
develop and commercialise plant-based omega-3 and we
have developed and commercialised advanced bioenergy
feedstock technology.
Focused on markets, crops and segments where we can be most successful
We have four revenue-generating operating segments. In FY23,
North America was our largest contributor to revenue with 36
per cent, followed by Asia Pacific with 28 per cent and then
Europe with 25 per cent. Our seed technologies operating
segment, which is global, contributed 11 per cent of revenue
in FY23, up from eight per cent in FY22.
Our FY23 underlying revenue was A$3,481m
1 Our major geographic segments are Asia Pacific, which includes Australia, New Zealand and certain parts of Asia; Europe, which includes the United
Kingdom, the European Union, and certain other countries in Europe; the Middle East and Africa; North America, which includes the United States of
America, Canada and Mexico; and South America, which includes Brazil. Argentina and certain other countries in South America.
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Nufarm Limited | Annual Report 2023
KEY REGIONSNorthAmericaCerealsHybrid seedsBioenergyNutritionalsBiologicalsCropprotectionDisruptivetechnologiesTrees,nuts, vinesandvegetablesPasture,turf andornamentalSoybeanSorghumSunflowerCanolaCarinataEnergycaneCornCROPSSEEDSEuropeAsiaPacificSouthAmericaCORECROPS and SEEDSGROWTHPLATFORMS28%Asia Pacific25%Europe36%North America11%Seed technologiesPercentage contribution We have grown our EBITDA over the last four years. Our teams worldwide have worked to improve the financial health of Nufarm. We see this as a
critical component of our ongoing sustainability as a business.
Underlying EBITDA ($M)
Underlying NPAT ($M)
1 In FY20, Nufarm Ltd changed its financial year from a 31 July to 30 September
1 In FY20, Nufarm Ltd changed its financial year from a 31 July to 30 September
reporting date. FY20 numbers reported here reflect the 12 months ended
31 July 2020.
reporting date. FY20 numbers reported here reflect the 12 months ended
31 July 2020.
2 Underlying EBITDA is earnings before net finance costs, taxation, depreciation
2 Underlying NPAT is net profit/(loss) after tax excluding material items.
and amortisation excluding material items.
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Nufarm Limited | Annual Report 2023
9
235.8361.1446.8438.2FY20¹FY21FY22FY230200400600-80.661.1133.2122.2FY20¹FY21FY22FY23-1000100200
About us continued
Our operations span the globe
In FY23, we employed 3,059 full time equivalent people in 34 countries. We have herbicide
synthesis sites at Wyke, UK and Laverton, Australia. We formulate crop protection products
in 11 manufacturing sites across the world.
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Nufarm Limited | Annual Report 2023
SacramentoCaliforniaUSACuritibaBrazilAlsip and Chicago HeightsUSAVenado TuertoArgentinaGreenvilleMississippi USAVegaUSASaskatoonCanadaBreckenridgeUSAShanghaiChinaKuala LumpurMalaysiaMerakIndonesiaHorshamAustraliaKwinanaAustraliaMelbourneAustraliaWyke UKDusseldorf GermanyCairo EgyptLinz AustriaAtar SerbiaGaillonFranceLavertonAustraliaManufacturing facilitiesRegional HQSeed Innovation centreSeed R&DProcurement Hub We have three seed innovation centres in Horsham, Australia; Sacramento, USA and Venado Tuarto,
Argentina. We have five seed R&D facilities, three in North America, one in Brazil and one in Serbia.
We have a global procurement hub in Shanghai, China.
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Nufarm Limited | Annual Report 2023
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SacramentoCaliforniaUSACuritibaBrazilAlsip and Chicago HeightsUSAVenado TuertoArgentinaGreenvilleMississippi USAVegaUSASaskatoonCanadaBreckenridgeUSAShanghaiChinaKuala LumpurMalaysiaMerakIndonesiaHorshamAustraliaKwinanaAustraliaMelbourneAustraliaWyke UKDusseldorf GermanyCairo EgyptLinz AustriaAtar SerbiaGaillonFranceLavertonAustraliaManufacturing facilitiesRegional HQSeed Innovation centreSeed R&DProcurement Hub
About us continued
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.
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 responsible
creates that trust.
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.
We are an innovative, entrepreneurial
organisation where individuals and
teams can do what is best for
the customer, the organisation and
our stakeholders.
12
Nufarm Limited | Annual Report 2023
RResponsibilityAAAgilityRRespectEEmpowerment Our history
For 100 years our focus has been on the customer. This will continue to be our focus for the next 100.
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Nufarm Limited | Annual Report 2023
13
1916New Zealand Farmers Federation (NZFF) began with a few people delivering quality products to help farmers grow better crops.1957Nufarm Australia established by Max Fremder, providing solutions for farmers in Australia.1979Nufarm forges a reputation for service and product quality and moves to headquarters in Melbourne.1988Nufarm and NZFF unite and starts a period of increased growth while always focusing on the customer.2002Nufarm acquires CropCare, strengthening its position in the cotton and broadacre selective grass herbicide sectors.1998-99Nufarm enters into a JV with GrainCorp and Vicgrain to ensure Australian growers have access to profitable and sustainable delivery of the world’s most advanced biotechnology. Nufarm acquires Riverdale Chemical Co., (Crop Protection formulation specialists), along with 2,4-D businesses in USA, Canada and France.2006Nufarm establishes Nuseed, our seed technology platform, providing hybrid crops that create value for the farmer. 2022Nufarm + bp enter strategic agreement to accelerate market adoption of Nuseed Carinata as a sustainable, low-carbon biofuel feedstock.Nufarm enters into long-term alliance with GranBio to accelerate global expansion of Energy Cane, enabling the biomass-to-fuel value chain to become another powerful solution to the challenge of securing renewable feedstock at large scale.2020Nuseed Omega-3 named ‘Innovation Of The Year’ Finalist by Global Aquaculture Alliance.Nufarm collaborates with Crop.Zone and develops Nucrop, a hybrid herbicide-electric solution for chemical-free plant control.2017-19Nufarm invests in Enko, applying highly disruptive technology from the pharmaceutical industry to agriculture. Nufarm acquires EU crop protection assets from Adama and Syngenta, and partners with Marrone Bio Innovations to develop Grandevo Bioinsecticides.Nufarm partners with Uni of QLD securing Fed Govt funding to create a new Aust Research Hub for Sustainable Crop Protection.2011-13Nufarm signs agreement with Sumitomo to co-develop new formulations of crop protection products.Nuseed collaborates with CSIRO and GRDC on plant-based omega-3 project.Nufarm expands seed platform by acquiring sunflower seed and research company, Seeds 2000 Inc in the USA.1994-98Nufarm expands into Europe, acquiring businesses that strengthen our core and diversify to meet customer demand.1988-89Exports to America start in earnest and Nufarm USA is incorporated in 1989.1991-92Nufarm expands into Asia, opening offices in Singapore and Malaysia.
Environmental, social and governance
Nufarm's purpose is to 'grow a better tomorrow'. Agricultural sustainability and the sustainability of our
operations are integral to achieving our purpose.
Governance
Nufarm is committed to having policies and practices that
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 overseeing the
management of risk and promoting a culture of ethical, lawful
and responsible behaviour within Nufarm.
In FY23, we evolved our governance structure. Recognising
the importance of board-level oversight in driving sustainable
outcomes, we established the board sustainability and
environment committee. This new committee is specifically
charged with overseeing organisational performance in
sustainability and environmental affairs, including compliance
and risk management.
Our board composition continues to reflect our commitment
to diversity and strong governance. We welcomed new
independent, non-executive board members Federico Tripodi
and Adrian Percy this year. At the date of this report, 43
per cent of the board's non-executive directors are women.
At 30 September 2023 (2022: 43 per cent), 33 per cent of
our non-executive directors were female. This was part of the
board's succession planning which resulted in an overlapping
period between the appointment of two men and the planned
retirement of two men.
To ensure that the board remains effective and up-to-date,
directors undertook training in key areas such as process
safety management, anti-trust requirements, cybersecurity risk
management and continuous disclosure requirements. Our
code of conduct and our speak up (whistleblower) policy set
our expectations to do the right thing, and how to intervene
if we think someone is not doing the right thing. Nufarm has
various other corporate governance and disclosure policies
covering areas including conflicts of interest and internal trading
in the company’s shares. In FY23, we updated our policies
on continuous disclosure, risk management and inclusion and
diversity and we made progress in areas such as modern
slavery risk mitigation, tax transparency and cybersecurity.
We expanded the responsibilities of our Group Executive
Growth to include sustainability and added new
sustainability professionals into key business units, increasing
our capabilities.
Further information on our governance approach is in our FY23
corporate governance statement in our annual report.
Solutions
We deliver commercial solutions that contribute to addressing three sustainability challenges the world faces.1,2,3
For us, 'agricultural sustainability' means the ability of the
agricultural value chain to reliably and securely produce
affordable food, feed and fuel in ways that regenerate
the environment and protect the ongoing needs of future
generations. We strive to enable this by engaging with our
customers to understand their needs and bring innovative
solutions to market.
We have products in our agricultural portfolio that contribute
towards the United Nations Sustainable Development Goals
(UN SDGs), 'Zero hunger' and 'Life on land'. Our products
protect crops from weeds, diseases and pests and contribute
to a more reliable and affordable food system.
1 Ranganathan, J et al. (2018) How to Sustainably Feed 10 Billion People by 2050, in 21 Charts, World Resources Institute. https://www.wri.org/insights/how-
sustainably-feed-10-billion-people-2050-21-charts
2 World Ocean Review (2021) The Ocean, Guarantor of Life – Sustainable Use, Effective Protection, World Ocean Review. https://
worldoceanreview.com/en/wor-7/
3 Masum, FH et al. (2023) Supply chain optimization of sustainable aviation fuel from carinata in the southeastern United States, Renewable and Sustainable
Energy Reviews, Vol 171, January 2023, 113032.
14
Nufarm Limited | Annual Report 2023
Strengtheningfood security and affordability1By 2050, 10B peoplewill need to be fed affordably, reliably and sustainably Protectingmarinebiodiversity2Oceans are increasinglyoverfished to meet growing needs for protein and omega-3Decarbonisingemissions-intensive industries3Aviation is responsible for approximately 3.5 per cent of greenhouse gas emissions
Our nutritional portfolio provides renewable plant-based
sources of protein and nutrition while also preserving the
biodiversity of our oceans, contributing to the UN SDGs,
'Life below water' and 'Life on land'. Our Nuseed Omega-3
oil produces higher quality outputs in fish and nutritional
supplements.4 Our product has been recognised by Friend of
the Sea® for its contribution to biodiversity protection.
Our bioenergy portfolio of carinata and energy cane provides a
source of renewable fuel, contributing towards the UN SDGs,
'Climate action' and 'Life on land'. Nuseed Carinata is an
accredited sustainable aviation fuel that can be used with
existing infrastructure for liquid fuels.
People
At Nufarm, our employees are central to our operational
success and the achievement of our long-term strategic goals.
Safety is our highest priority and we strive to continuously
improve our approach to process safety management, personal
safety and wellbeing. Our objective is that 'everyone goes
home safely' every day, whether working in the manufacturing
plants or out on the road meeting with customers. Our wellness
initiatives further extend to both physical and mental health,
offering programs that range from fitness activities to mental
health support.
While our internal safety audit program continues to
demonstrate progress and identify areas for further
improvement in our safety behaviours and culture,
disappointingly we saw an increase in the number of lost time
injuries (LTIs). About half of the reported LTIs were incurred in
business areas other than our crop protection manufacturing
sites (including in a newly acquired business). We aim to
increase our safety culture and awareness and training effort in
our non-crop protection manufacturing business. The Serious
Injury Frequency Rate has remained at a similar level: 2.92 in
FY23 compared with 3.07 in FY22.
We were fined £300,000 in August 2023 for an incident
in 2021 where two employees at our Wyke facility were
accidentally exposed to chlorine gas and required hospital
treatment. This was a serious incident, prompting a thorough
internal investigation into the circumstances surrounding it and
corrective actions have been implemented.
We aim to foster a workplace where diversity is celebrated
and our employees feel included. We understand that diverse
thinking helps contribute to our innovation agenda, among
other things. Our activities in this area include targeted
hiring policies, ongoing cultural sensitivity training, and specific
gender equality programs. FY23 saw us increase the number
of women in our senior leadership team by 4 percentage
points, bringing our gender ratio up from 31 per cent to 35
per cent. Our target for FY30 is to have a gender balance that
is 40:40:20 for our senior leadership team (CEO-1 and CEO-2),
meaning 40 per cent who identify as female, 40 per cent who
identify as male and 20 per cent who identify as male, female
or other. Overall, we increased the total proportion of women
in Nufarm this year by 1 percentage point, with women now
making up 28 per cent of our employee population. We have
identified that supply chain, manufacturing and commercial
remain three areas where our representation of women is lower
and we will need more targeted initiatives to make a difference
in our gender metrics in these areas.
Our employees remain engaged in our business, with our latest
employee survey resulting in an engagement score of 785,
which is top quartile compared with other organisations.6
Planet
We have made steady progress in responding to our
environmental challenges. We have worked to align our
climate-related disclosures with the Taskforce on Climate-
related Financial Disclosures' (TCFD) recommendations.
We recorded a 19 per cent reduction in our greenhouse gas
emissions from our FY20 baseline, on track towards our 30 per
cent reduction target by FY30. This year’s reduction was largely
due to reductions in volume in our synthesis plants at Laverton,
Australia and Wyke, UK, which is why we continue to focus
on our decarbonisation pathways. We completed our power
purchase agreement (PPA) strategy at Pipe Road, Laverton and
aim to establish the PPA in FY24. We also continue to monitor
the development of hydrogen for our Wyke site in the UK.
We understand the importance of a risk-based approach
to environmental management. Our activities include training
our workforce and conducting regular environmental audits,
to ensure compliance with our environmental obligations.
However, in FY23, we received a US$8,500 fine at our Chicago
Heights facility for exceeding a license limit on the site’s
domestic sewage discharge.
We are on track to meet our target for 10 of our 11
manufacturing sites to achieve ISO 14001 certification by
the end of FY25. Currently, five of our 11 crop protection
manufacturing sites are ISO 14001 certified. This initiative
aims to embed strong governance and process around
environmental management at our manufacturing sites.
We aim to use materials responsibly, reduce waste, and
increase recycling rates. This year, we achieved a 12 per cent
reduction in hazardous waste and we are on track to reach our
target of reducing hazardous waste by 20 per cent by 2025
from our FY20 baseline.
Our efforts in air emissions management have been
progressing, focusing on reducing volatile organic compounds
(VOCs) to minimise impacts on local communities and the
environment. Progress on the output metric has been slower,
with reduction in FY23 reaching 7 per cent against our
baseline of FY20. Our goal remains a 25 per cent reduction
in VOCs by 2025 and we are in the process of evaluating
the optimal engineering option for our operations to help
us achieve this goal in a way that balances economic and
environmental benefits.
We recognise the need to protect ecosystems and have
incorporated biodiversity considerations into our operations
and product development. Where applicable, we evaluate the
potential impact of our products on biodiversity as a part of the
registration process, to minimise risk of harm from the use of
our products.
4 Ruyter, B et al. n-3 Canola oil effectively replaces fish oil as a new safe dietary source of DHA in feed for juvenile Atlantic salmon, National Library of
Medicine. https://pubmed.ncbi.nlm.nih.gov/31506120/#:~:text=The%20results%20demonstrated%20that%20DHA,%3B%20n%2D3%20Fatty%20acids
5 This is an employee satisfaction score out of 100.
6 We have partnered with GLINT to facilitate our employee engagement surveys. We benchmark Nufarm against GLINT's 900-strong customer base.
Nufarm Limited | Annual Report 2023
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Environmental, social and governance continued
Our planned sustainability activity for FY24
While we are proud of our progress in FY23, we are well aware
there is still much to do. We have secured new resources and
skills to accelerate our sustainability program. In FY24, we will
aim to complete four goals:
1 expand our emissions reporting and prepare our business
for anticipated mandatory climate-related financial disclosure
obligations expected to apply to Nufarm in the FY25
reporting year
2 refresh our materiality study to ensure we understand and
prioritise sustainability issues with the greatest impact on
our stakeholders
3 evolve our corporate strategy to integrate our strategic
sustainability priorities
4 review our sustainability targets.
We estimate our manufacturing sites cover approximately 80
per cent of our greenhouse gas emissions and this is where we
have focused our reporting resources in the past.
In FY24, we aim to expand our reporting activities to capture
the balance of our scope 1 and 2 emissions, ready for external
reporting in FY25. We will also consider our approach to scope
3 emissions for FY26 reporting. We aim to strengthen our
approaches in the four areas of climate governance, strategy,
risk management and metrics and targets.
We look forward to engaging with a broad set of stakeholders
to undertake our materiality assessment in the new year
and we aim to consider the broader concepts of double
materiality in scoping the activity. This is an important input
into our corporate strategy, helping set out the pathway
for agricultural innovation in a responsible and sustainable
manner that considers the broader dimensions of natural
capital and protecting human rights. As part of that strategy
refresh, we aim to take the opportunity to examine our
current public targets and align with our stakeholders'
respective expectations.
16
Nufarm Limited | Annual Report 2023
Summary of our sustainability performance
This year we made progress on our climate targets and gender diversity goals.
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1.
2.
3.
The lost time injury frequency rate (LTIFR) is the number of days of work lost due to workplace injury per million hours worked. Our LTIFR
has increased this year from 0.81 in FY22 to 1.46. The serious injury frequency rate (SIFR) is the number of serious injuries per million hours
worked. Our SIFR has fallen this year from 3.07 in FY22 to 2.92. Both metrics include Nufarm employees and contractor injuries.
Our greenhouse gas emissions target is to reduce our scope 1 and 2 emissions from our crop protection manufacturing sites (over which we
have both operational and financial control) by 2030 from our FY20 baseline. This year our greenhouse gas emissions were 19 per cent lower
than our baseline, compared with 13 per cent lower in FY22. We have a target to reduce our volatile organic compounds (VOCs) to air by 25
per cent by 2025. This year our emissions increased compared with FY22; however, they are 7 per cent lower than our FY20 baseline.
Our gender goal is to achieve no less than 35 per cent representation of either gender by 2025. This year we increased the percentage
of female employees from 27 per cent in FY22 to 28 per cent. Our target for 2030 is for 40:40:20 representation in our senior leadership
team (40 per cent identifying as women, 40 per cent identifying as men and 20 per cent identifying as men, women or other). We achieved
our employee satisfaction goal of 78, as measured by GLINT; however, this is down one point from FY22 (79). FY21 was the first year of
our continuous listening strategy measuring employee satisfaction frequently throughout the year. Prior to this we were capturing employee
satisfaction every two years in a different way; as such, we do not have a measure of employee satisfaction for FY20.
4. We have a target to reduce our hazardous waste by 20 per cent by 2025. This year our hazardous waste increased compared with
FY22; however, it is 12 per cent below our FY20 baseline. We also have a target to obtain ISO 14001 certification at our crop protection
manufacturing sites (excluding Cairo) by 2025.
Nufarm Limited | Annual Report 2023
17
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PeopleLost time injury frequency rate of 1.46Serious injury frequency rate of 2.920.290.90.811.46FY20FY21FY22FY231.582.693.072.92FY20FY21FY22FY231Planet19% reduction in greenhouse gas emissions (tonnes)7%reduction in volatile organic compounds to air (tonnes)94878276FY20FY21FY22FY2341443638FY20FY21FY22FY232Planet12% reduction in hazardous waste (tonnes)Manufacturing sites with ISO 14001 certification5/1020211717FY20FY21FY22FY234People28%of employees are womenOur employee satisfaction is 7825%26%27%28%FY20FY21FY22FY23777978FY20FY21FY22FY233
Environmental, social and governance continued
External recognition of our sustainability journey
Our certifications and accreditations acknowledge our continuous improvement and
sustainable solutions.
18
Nufarm Limited | Annual Report 2023
1. ETS is a global non-profit organisation that promotes the universal adoption of product stewardship programs and quality management systems for the full lifecycle of agricultural biotechnology products.2. ISCC is a voluntary certification scheme recognised by the EU’s Renewable Energy Directive and the US Internal Revenue Service for SAF tax credits.Nufarm Limited• Awarded a silver rating in FY23 by Ecovadis a global leader in supplier corporate social responsibility • Advanced rating from bronze in FY22 • Improved across all key areas of assessment (score out of 100) Up from 50 to 60 • Environmental • Ethics • Human Rights Up from 40 to 70 • Sustainable procurementAquaterra® & Nutriterra®• Have been certified as Friend of the Sea®, the leading certification standard for products and services which respect and protect the marine environment• Were the first products to earn Friend of the Sea’s new plant-based certification• Have achieved accreditation in the USA and Australia through the Excellence Through Stewardship (ETS) program.1Carinata• Recognised by the International Civil Aviation Organization (ICAO) as enabling GHG reductions • Listed as a feedstock for ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) sustainable aviation fuels (SAF)• Certified by the Roundtable on Sustainable Biomaterials (RSB)• Certified by International Sustainability & Carbon Certification (ISCC).2Corporate sustainabilityPlant-based omega-3Sustainable aviation fuelCRSIA Operating and Financial Review
Group results
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. Information is presented on a continuing operations
basis unless otherwise specified. Non-IFRS measures including underlying EBIT and underlying EBITDA 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. All amounts are in Australian dollars unless
otherwise specified.
Summary financial results
Revenue
Revenue excluding Corporate revenue
Gross profit
Gross profit margin - excluding corporate revenue
Underlying gross profit
Underlying gross profit margin
Underlying gross profit margin - excluding corporate revenue
Underlying SG&A
Research and development expenditure
Underlying EBITDA
Underlying EBIT
Operating profit / (loss)
Underlying net external interest
Net external interest
Foreign exchange gains / (losses)
Underlying net financing costs
Net financing costs
Underlying net profit / (loss) after tax
Underlying effective tax rate
Net profit / (loss) after tax
Statutory effective tax rate
Basic earnings per share - excluding material items (cents)
Basic earnings per share (cents)
Final dividend per share declared (cents)
Total dividends declared during the year (cents)
2023
$000
3,480,611
3,480,611
1,026,370
29.5%
1,020,649
29.3%
29.3%
(730,031)
(44,677)
438,170
249,796
239,403
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(77,415)
(7,161)
(84,576)
(84,576)
122,191
26.0%
111,140
28.2%
29.2
26.3
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10 cents
2022
$000
3,772,970
3,579,856
972,585
27.2%
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26.2%
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(710,061)
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446,751
236,661
208,287
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(77,346)
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16.1%
33.1
26.3
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10 cents
Change
%
(8)%
(3)%
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(2)%
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15%
50%
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(3)%
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-
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-
Nufarm Limited | Annual Report 2023
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Operating and Financial Review continued
Earnings
Following a period of elevated commodity prices and demand
in FY22, falling active ingredient prices for foundational
products created a less favourable set of conditions for
Nufarm Crop Protection in FY23. Seed Technologies performed
strongly and executed on a number of important milestones
in omega-3 and biofuels. The group's revenue declined 8% to
$3.5 billion and underlying EBITDA declined 2% relative to the
prior comparative period.
Excluding non-operating corporate revenue (representing sales
to Sumitomo Chemical Company Ltd under supply agreements
following the Latin American operations divestment), revenue
reduced 3% compared with FY22 to $3.5 billion in FY23.
Gross profit for the period was $1.0 billion, which included
a net expense of $5 million recognised in material items.
Excluding the impacts of the material items and non-operating
corporate revenue, underlying gross profit margin increased by
170bp to 29.3% over the prior comparative period.
Net profit after tax increased 3% to $111 million. This
movement helped to keep basic earnings per share stable at
26.3 cents. Excluding material items, basic earnings per share
reduced by 3.9 cents to 29.2 cents.
Underlying EBITDA of $438 million is a reduction of 2% over
the prior comparative period, representing strong performance
in a challenging operating environment and following a record
EBITDA result in the prior year.
Underlying selling, general and administration costs (underlying
SG&A) increased by $20 million as compared to the prior
comparative period with increases in expenses across a
number of categories. Research and development expenditure
decreased by $6 million as compared to the prior
comparative period.
Depreciation and amortisation expense of $188 million
was 10% lower than the prior comparative period due
mainly to regulatory phase-outs in Europe and delayed
capital expenditure.
Underlying net external interest increased by $26 million to
$77 million for the twelve months ended 30 September 2023,
with benefits from refinancing the high yield bond during the
first half of the prior year, more than offset by increases in base
rates and debt levels.
Net foreign exchange losses were $7 million which was
$4 million higher than the prior comparative period. This
increase was a result of global currency volatility associated
with a range of events including the conflict in Ukraine.
The Group has a targeted currency exposure risk mitigation
program to assist in the management of foreign exchange risk.
The statutory effective tax rate was 28.2%. Excluding material
items, the underlying effective tax rate was 26.0%.
Underlying net profit after tax decreased 8% to $122 million.
Cash flow
Cash flow results
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
Total underlying net operating and investing cash flow
Total net operating and investing cash flow
2023
$000
2022
$000
(124,630)
366,120
(990)
(6,551)
(125,620)
359,569
(241,731)
(240,409)
-
-
(241,731)
(240,409)
(366,361)
(367,351)
125,711
119,160
Change
%
large
(85)%
large
1%
-
1%
large
large
The group’s total net operating and investing cash flow for the year ended 30 September 2023 was a cash outflow of $367 million.
Underlying net operating cash flow was a $125 million outflow reflecting the movement in working capital during the period.
Operating cash flow generation is highly correlated with changes in Net Working Capital and underlying EBITDA.
Net cash outflow from investing activities was flat when compared with the prior comparative period. The majority of capital
expenditure during the year was in property, plant and equipment, with significant amounts in Wyke, largely relating to Health, Safety
and Environment, and plant integrity, as well as in Chicago Heights. The balance was spent on internally developed intellectual
property across Crop Protection and Seed Technologies, representing a significant investment in the future of the group.
20
Nufarm Limited | Annual Report 2023
Balance Sheet Management
Financial position
Net debt
Net working capital
ANWC/sales excluding external corporate (%)
ANWC/sales (%)
Leverage (includes lease liabilities)
Gearing %
ROFE - total group
As at
As at
30 Sep 2023
30 Sep 2022
Change
$000
849,842
1,363,113
41.9%
41.9%
1.9
26.9%
8.8%
$000
346,168
862,696
28.3%
26.8%
0.8
13.9%
9.5%
%
large
58%
1,360 bps
1,510 bps
1.1 x
1,300 bps
(70) bps
Net debt increased by $504 million to $850 million. The
Average net working capital to sales (ANWC/sales excluding
external corporate (%)) ratio increased by 13.6 ppt to 41.9%,
which is above the target range of between 35% and 40%.
The increase in net working capital reflects increases in
receivables due to normal fluctuations in sales and collections
together with a reduction in accounts payable as the group
reduced inventory through the second half. Management will
continue to focus on working capital via a range of actions
including customer terms, supplier negotiations and effective
stock management.
Statutory core leverage was 1.9x at 30 September 2023, which
is within the group target of 1.5x – 2.0x. Leverage was higher
than the prior comparative period due mainly to the increase in
net working capital.
Return on funds employed (ROFE) decreased to 8.8%, with the
improvement in underlying EBIT being offset by higher funds
employed reflecting the increase in net working capital.
Capital Management
Nufarm capital management principles aim to maintain a
robust and durable capital structure with clear guidelines
for the application of free cashflow generated from
business operations.
Our financing arrangements aim to ensure we have the required
financial resilience to withstand adverse trading cycles without
experiencing undue balance sheet stress.
During the first half of the year, it was announced that
Nufarm had entered into a five-year A$800 million revolving
Asset Based Lending credit facility (the ABL Facility) secured
against trade receivables and inventory located in Australia, the
United States and Canada. A smaller A$150 million Liquidity
Facility (the Liquidity Facility) has also been established to sit
alongside the ABL Facility to assist in the ongoing funding
of Nufarm’s working capital requirements. Concurrently, the
existing syndicated bank facility (SFA) and group receivables
securitisation facility were both wound up with amounts drawn
under those existing facilities settled via proceeds obtained
under the new facilities.
Complementing the US$350 million Senior Unsecured Notes
which were issued in January 2022 and due in January 2030,
the ABL Facility is expected to deliver considerable benefits to
Nufarm’s capital structure, transitioning Nufarm to a covenant-
lite financing structure and extending the duration of the
group’s debt maturity profile. An ABL facility provides a less
restrictive and more flexible financial covenant regime.
Nufarm’s new working capital debt facilities are important
components underpinning a flexible and durable capital
structure that will provide greater financial resilience across
operating cycles and variable trading conditions.
Dividend
The board has adopted a dividend policy to align dividend
payments to free cash flow generation, subject to the balance
sheet meeting our target leverage range of 1.5x – 2.0x and
there being insufficient growth opportunities. Nufarm’s dividend
policy ensures an appropriate focus on cash generation,
especially net working capital management, and greater focus
on maintaining an appropriate capital structure for the group.
In considering the application of this policy any reference to free
cash flow should be assessed through an appropriate historical
and forecast cycle, to take into consideration fluctuations in
net working capital and planned investment. Similarly target
leverage is considered on an annualised basis.
The board has determined to pay an unfranked final dividend
of 5 cents per share. The final dividend will be paid on
15 December 2023 to the holders of all fully paid shares in
the company as at the close of business on 22 November
2023. 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 20 November
2023 and ending on 1 December 2023. The last election date
for shareholders who are not yet participants in the DRP, is
27 November 2023.
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Nufarm Limited | Annual Report 2023
21
Operating and Financial Review continued
Review of operations
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 APAC (including Australia,
New Zealand and certain parts of Asia), Europe (including the United Kingdom, the European Union, and certain other countries in
Europe, the Middle East and Africa), and North America (including United States of America, Canada and Mexico).
The Seed Technologies business comprises the base seeds, bioenergy, omega-3 and seed treatment platforms. These platforms
generate revenues through the sale of seed or oil based products, and licensing of intellectual property. The Seed Technologies
business is managed on a worldwide basis.
2023
$000
2022
$000
Change
$000
Change
%
-7%
-7%
-4%
-6%
33%
970,504
1,259,811
857,214
1,038,424
1,350,190
894,931
(67,920)
(90,379)
(37,717)
3,087,529
3,283,545
(196,016)
393,082
-
296,311
193,114
96,771
(193,114)
-100%
3,480,611
3,772,970
(292,359)
-8%
2023
$000
2022
$000
Change
$000
Change
%
87,709
161,060
164,768
413,537
98,052
(73,419)
438,170
134,534
147,899
171,109
453,542
58,544
(65,335)
446,751
(46,825)
-35%
13,161
(6,341)
(40,005)
39,508
(8,084)
(8,581)
9%
-4%
-9%
67%
12%
-2%
2023
$000
2022
$000
Change
$000
Change
%
70,964
127,918
72,695
271,577
52,622
(74,403)
249,796
117,236
117,121
41,346
275,703
27,201
(66,243)
236,661
(46,272)
-39%
10,797
31,349
(4,126)
25,421
(8,160)
13,135
9%
76%
-1%
93%
12%
6%
Revenue - Underlying
($000s)
Crop protection
APAC
North America
Europe
Total Crop protection
Seed Technologies
Corporate
Nufarm Group
EBITDA - Underlying
($000s)
Crop protection
APAC
North America
Europe
Total Crop protection
Seed Technologies
Corporate
Nufarm Group
EBIT - Underlying
($000s)
Crop protection
APAC
North America
Europe
Total Crop protection
Seed Technologies
Corporate
Nufarm Group
22
Nufarm Limited | Annual Report 2023
APAC
Outlook
Whilst the outlook is positive, we expect to face challenging
conditions in our Crop Protection business in the first half of
FY24 as industry conditions continue to normalise. We expect
further growth in EBITDA in Seed Technologies in FY24, albeit
at a more modest rate than we experienced in FY23 as
we continue to invest in scaling our Omega-3 and biofuels
platforms. We expect to return to growth in the second half of
fiscal 24.
Forward looking statements reflect Nufarm’s expectations at
the date of this review and are based on information and
assumptions known to date. They are subject to risks and
uncertainties outlined in more detail on pages 26-30. Actual
results may be significantly different to those expressed.
Revenue of $970 million decreased 7% and underlying EBITDA
fell 35% to $88 million relative to the prior comparative period,
with lower active ingredients prices on foundational products
being a key reason for the decline in revenue and EBITDA.
These impacts were partly mitigated by a strong performances
from our business in Indonesia.
North America
Revenue of $1.3 billion decreased 7% relative to the prior
comparative period, driven by lower demand for foundational
products as customer buying patterns shifted to be more just-
in-time. Demand for other, higher margin, products remained
solid resulting in a favourable product mix which, together
with tight control of SG&A, enabled the segment to delivered
underlying EBITDA of $161 million, which is 9% above the prior
comparative period.
Europe
Revenue of $857 million was 4% below the prior comparative
period. Sales performance was strong in core crop segments,
despite dry conditions through southern European markets
and the impact of the phasing out of specific products.
The industrial sales business experienced challenges in FY23
with reliability issues in Wyke impacting plant availability and
manufacturing costs. Overall, the segment has performed
solidly with EBITDA of $165 million, down 4% vs the prior
comparative period.
Seed Technologies
The Seed Technologies segment deals in the sale of seeds
and seed treatment products, the sale of oil products
into aquaculture, the licensing of certain seed technology
intellectual property and facilitating activities including oil
products into bioenergy markets. Revenue of $393 million
increased 33% relative to prior comparative period. Increased
revenue from seed sales reflected stronger demand for hybrid
canola varieties in Australia, South America and Canada;
sorghum in Brazil, USA and other international markets; and
sunflower in key global markets.
Underlying EBITDA of $98 million was 67% above the prior
comparative period, reflecting strong growth in our base seeds
business as well as the recognition of license revenues.
Seed Technologies achieved several important milestones
during the year, including the first shipment of Carinata grain
to be processed into carinata oil for delivery to bp. During the
period, the Norwegian Food Safety Committee approved Seed
Technologies’ patented Omega-3 Canola to be used as part of
the feedstock mix for the Norwegian aquaculture market.
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Nufarm Limited | Annual Report 2023
23
Operating and Financial Review continued
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 the
operating and financial review:
1 Underlying EBIT is earnings before net finance costs,
taxation and material items. Underlying EBITDA is
underlying EBIT before depreciation, amortisation and
material items. 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 EBITDA is used to reflect the underlying
performance of Nufarm’s operations. Underlying EBITDA is
reconciled to operating profit below on a continuing basis.
2023
$000
438,170
(188,374)
249,796
(10,393)
239,403
2022
$000
446,751
(210,090)
236,661
(28,374)
208,287
Change
%
(2)%
(10)%
6%
(63)%
15%
Material 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 consolidated
financial report. Such items included within the group's profit
for the period are detailed below.
Transactions related to Russia and Ukraine
During the year ended 30 September 2023, the group has
continued to assess the recoverability of assets, primarily trade
receivables and inventories, in respect of the group’s operations
in Russia and Ukraine. The group has determined to cease
operations in its Russian legal entity. The group continues
to operate in Ukraine to support growers through sales of
seed and crop protection products. The amounts recognised
as material items during the year ended 30 September 2023
include reversals of previously recognised expenses pertaining
to receivables and inventories, and the recognition in profit/
(loss) of foreign currency translation reserve balances previously
recognised in other comprehensive income. At 30 September
2023, the total remaining assets in Ukraine make up less than
half a percent of total group assets.
Asset rationalisation and restructuring
During the year ended 30 September 2023, the group has
ceased operating specific legal entities and begun liquidation
proceedings. As a result, a non-cash material item has been
incurred with respect to the recognition in profit/(loss) of foreign
currency translation reserve balances previously recognised in
other comprehensive income.
Deferred tax adjustments
During the prior corresponding period, the group recognised
previously unrecognised tax losses as a result of improved
financial performance and outlook for the group.
Debt refinancing costs
During the prior corresponding period the group refinanced its
high yield bond and incurred costs related to early redemption
call premium and accelerated amortisation of deferred debt
establishment transaction costs.
Transactions related to South American business
disposal – onerous contract provision reversal
During the period 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 6 months ended 31 March 2022 market conditions in
relation to the terms of the contract improved resulting in
the group assessing at that time that the full provision would
not be required and it was reversed. The contract expired in
March 2022.
Operating profit reconciliation
Underlying EBITDA
add Depreciation and amortisation excluding material items
Underlying EBIT
Material items impacting operating profit
Operating profit
24
Nufarm Limited | Annual Report 2023
3 Non-IFRS measures are defined as follows:
Term
Definition
Gross profit margin
Gross profit as a percentage of revenue
Underlying gross profit
Gross profit less material items
Underlying gross profit margin
Underlying gross profit as a percentage of revenue
Underlying SG&A
Underlying EBIT
Underlying EBITDA
Sales, marketing and distribution expenses plus General and administrative expenses less
material items
Earnings before net financing costs, taxation and material items
Underlying EBIT before depreciation, amortisation and material items
Underlying net external interest
Financial income, plus interest expense – external, plus interest expense - amortisation of debt
establishment transaction costs, plus lease liability – interest expense, less material items.
Underlying net financing costs
Net financing costs less material items
Underlying net profit after tax
Profit/(loss) for the period attributable to the equity holders of Nufarm Limited less material items
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
Net debt
Current loans and borrowings, plus non-current loans and borrowings, plus cash and
cash equivalents
Net working capital
Current trade and other receivables, plus inventories less current trade and other payables
Average net working capital
Net working capital measured at each month end as an average
ANWC/sales (%)
Average net working capital as a percentage of rolling 12 months revenue
ANWC/sales excluding external corporate (%)
Average net working capital as a percentage of rolling 12 months revenue excluding non-operating
corporate revenue
Leverage
Net debt / rolling 12 months underlying EBITDA
Interest coverage ratio
Rolling 12 months underlying EBITDA / rolling 12 months net external interest
Gearing %
Net debt / (net debt plus equity)
Return on funds employed (ROFE)
12 months rolling underlying EBIT divided by the average of opening and closing funds employed
(total equity plus net debt)
Underlying net operating cash flow
Net cash from operating activities excluding material items cash flows
Underlying net investing cash flow
Net cash from investing activities excluding material items cash flows
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Nufarm Limited | Annual Report 2023
25
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 out in the group’s Corporate
Governance statement which is available in the corporate governance section of our website,
www.nufarm.com/CorporateGovernance.
Nufarm’s approach to risk and governance focuses on effective identification and management of risk to assist us in executing our
business strategies. An overview of our approach to risk management and internal control is included in section 6 of the Corporate
Governance Statement.
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 Risks
Strategic context
What this means for Nufarm (risk/uncertainty)
How we are managing this
Strategic growth (medium to long term)
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) therefore
industry resistance to Omega 3 co-
existence that will continue until full de-
regulation.
Continued legal and community focus
on the impact of crop protection
products has been increasing,
particularly in the US which may
give rise to increased litigation risk
in both environmental and personal
bodily injury class actions.
Demand for new/different products and
supporting manufacturing capability
Regulatory policies can have an impact on the availability
and usage of crop protection and seed technology
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. Social/ activist pressure to
strengthen regulatory requirements as they relate to
synthetic crop protection products may increase.
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.
For example, seed technologies that improve crop
resilience and yield will be in demand.
Continually evolving our product
portfolio and customer strategy
Nufarm has increased its investment in crop
health company, Enko Chem (Enko). Enko is
a crop health company that develops products
for farmers to protect their crops from pests
and disease. Enko recognises that innovation
and technology are the future for sustainable
agriculture practices.
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.
This may require re-alignment and/or expansion of
our manufacturing and processing footprint which will
require capital investment to ensure we have the
manufacturing and processing 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.
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. We are undertaking a significant
consultation process with the industry to build
and maintain support for Omega 3 coexistence.
Alignment of manufacturing
capability to our strategic plan
Assessment of the viability of our manufacturing
footprint is continuously reviewed and assessed
to ensure production capability is aligned to the
product demands of our customers.
Capital plans developed to support replacement
of ageing plant and preventative maintenance
programs have been established to minimise
production downtime. During FY23 we have
continued implementation of a significant
investment in our Wyke plant that will mitigate
risks associated with ageing plant and enhance
capability to support our growth plans.
26
Nufarm Limited | Annual Report 2023
Strategic context
What this means for Nufarm (risk/uncertainty)
How we are managing this
Strategic growth (medium to long term)
Global economic & geo-
political uncertainty
The global economic environment
continues to be inflationary.
The crises in Ukraine and the middle-
east have not materially impacted our
financial position to date, however,
uncertainties remain given these crises
are ongoing, such as volatility of
energy prices and further supply chain
impacts, and potential interruptions to
our regional operations.
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
further capital investment to ensure we have the
manufacturing capability to produce new products.
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 – Executing our strategy will
mean strengthening existing functions and introducing
new processes/ functions. If we cannot 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.
Innovation
Nufarm holds or has the right to
use intellectual property covering its
products, which intellectual property
may be lost or infringed.
Nufarm introduces innovative crop
protection and seed technology
products where there may be a risk of
infringement of third-party intellectual
property rights.
Legal obligations and patent protection
If Nufarm does not take adequate steps to protect or
enforce its intellectual property rights it will lose the value
of these rights.
Nufarm risks potential liability if it infringes third party
intellectual property rights, and may need to withdraw
products or negotiate a licensing deal.
Continually monitoring our
operational capability
The Finance team reviews 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 Innovation team continually review our
products and delete, re-engineer or develop
new products that align to our customer needs.
The Procurement team monitors the
diversification of supply to reduce
key dependencies.
Suppliers operating in high-risk jurisdictions
are subject to independent third-party
risk assessments.
The People Plan and People and Performance
strategic priorities are set annually and
monitored throughout the year.
Succession planning processes ensure that
key roles/ competencies are identified
and managed.
Portfolio discipline
The portfolio team conducts product
evaluations, which include engaging with
advisors throughout the pipeline to assess to
manage IP related risks.
The PMO 365 process was recently introduced
to maintain new product project information,
approve progress, and report on all new
product projects.
Disciplined product selection process
taking into account possible intellectual
property infringement.
Aim to share responsibility with product
development partners where feasible.
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Nufarm Limited | Annual Report 2023
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Operating and Financial Review continued
Climate Related Risks
Nufarm has conducted a risks and opportunities assessment against two scenarios with a short (2030) and long (2050)
term horizon:
1 Low emissions (high transitional impact – global average temperature below 20C warming to pre industrial levels), and
2 High emissions (high physical impact – global average temperature above 30C warming to pre industrial levels),
The identified potential risks associated with these scenarios were:
• Changes in product demand – driven by changes in the market, and in policy and regulation,
• Operational changes – fossil fuels and carbon footprint reduction/compliance with policy and regulation and operational costs /
cost of goods sold increases with suppliers passing on transition costs,
• Change in product demand driven by climate unsuitability and acute environmental events, and
• Impacts on our operations (including our supply chain) driven by changes in climate and weather events.
In addressing these risks into the future, Nufarm is committed to investing in our portfolio to deliver improving yields for growers,
and new plant based solutions for use in aquaculture and bioenergy markets. Nufarm maintains a ‘partner for growth’ philosophy
and this is applied across our distribution channel partners, and when establishing and maintaining our key supply partnerships
and alliances. Our business continuity and insurance programs consider physical risk exposures relating to our manufacturing and
non-manufacturing operations, and the longer term suitability of our manufacturing footprint and supply chain arrangements is
assessed through our strategic risk management process.
Refer to the FY23 Sustainability Report for our Taskforce on Climate-related Financial Disclosures (TCFD), and further detail on our
climate-related risks.
Operational Risks
What this means for Nufarm (risk/ uncertainty)
Operational continuity (what we do)
How we are managing this
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.
Additionally, seasonality may result in credit risk where the cash flow of our
customers, and their ability to pay on time is impacted.
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 processes have been designed to allow
for agility in the supply chain to respond to business interruptions,
geo-political/economic and weather-related impacts.
There are detailed policies and procedures which govern our credit
management processes.
Additional controls related to working capital to support responding
to seasonality are discussed in the financial risks section of
this report.
Our operational plants are located in regions that have lower
susceptibility to extreme weather events.
Nufarm maintains a business continuity framework and business
continuity plans for our production operations.
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.
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
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.
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.
Alternate supply arrangements have been established, where
permitted under regulatory requirements.
Significant interruptions can impact our ability to fulfil orders which may
ultimately increase our costs.
28
Nufarm Limited | Annual Report 2023
What this means for Nufarm (risk/ uncertainty)
Operational sustainability & compliance (how we do it)
How we are managing this
Cyber-attack/unauthorised access
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.
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.
Nufarm has continued to invest in IT systems, infrastructure and
capability to support the efficient operation of the business.
Disaster recovery strategies exist for 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.
Nufarm staff cyber security awareness program that includes
awareness and education of potential events, including mock
phishing exercises.
We engage external providers to undertake simulated periodic
system penetration testing.
Critical roles across the organisation have been identified and
appropriate succession and retention strategies developed.
There is an in-house talent acquisition resource dedicated to serving
Nufarm's key hiring needs.
Guidelines for remuneration and reward have been developed to
ensure Nufarm can attract and retain talent.
Regular surveys are delivered to determine levels of
staff engagement.
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.
Well-being seminars, encouragement of leave-taking and a range
of other support measures (for example, the Employee Assistance
Program) are in place and continue to be advocated throughout
the organisation.
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.
This extends to historical environmental issues that may be present in sites
that we have acquired.
Environmental risk assessments have been completed across all our
key operational sites and control measures implemented.
Our environmental management systems are aligned to the key
requirements of ISO41001 certification at five out of 11 of our crop
manufacturing sites. Five other sites are currently working towards
obtaining certification.
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.
We produce GM and non-GM seed. Unapproved GM products are highly
regulated in many markets across the globe. Most markets have regulations
determining accepted levels of unapproved trait presence, and other markets
have no tolerance. Unintended trait presence and non-compliance with
regulations could lead to significant liabilities owed to third parties, and
impact our brand, reputation and growth.
Quality specification guidelines and procedures are defined across
the manufacturing process. This includes a detailed contamination
prevention program with associated procedures that are aligned
to the ‘Contamination Prevention in the Manufacture of Crop
Protection Products Guidelines and Best Practices’ issued by
CropLife International.
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.
In relation to controlling GM traits, trait testing is undertaken from
breeding handover through different stages in production, before
commercial product is released to be shipped to customers, and
following relevant regulations in each targeted market. We are
actively working to promote industry coordination and transparency
of hybrid seed production zones.
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Nufarm Limited | Annual Report 2023
29
Operating and Financial Review continued
What this means for Nufarm (risk/ uncertainty)
Operational sustainability & compliance (how we do it)
How we are managing this
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, sustainability
and governance including climate change, product registration, antitrust,
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 relating to key compliance obligations.
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 a global speakup/ whistleblower program that
encourages employees to report any unethical, illegal or fraudulent
behaviour and allows for anonymous online and phone reporting.
Financial exposures (how we fund what we do)
How we are managing this
Debt financing
Nufarm has several bilateral financing facilities to fund its working capital
requirements. Continued access to these facilities is dependent upon 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.
Trade financing
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. 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 the
group’s purchases of goods and services in the future, the group’s liquidity
will be affected.
Foreign exchange exposure
Global 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.
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 the reporting
of financial undertakings as required under Group debt facilities
together with the ongoing compliance with certain financial
covenants where applicable.
Further details on strategies to manage liquidity, credit and market
risk is included in note 29 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 29 of the consolidated financial statements).
Working Capital Management
Effective management of working capital is a key operational priority across
the group and is directly correlated with the group’s liquidity. Movements in
working capital are able to be linked to factors such as changing customer
demand as a result of seasonality, climatic conditions, changes in customer
credit profiles and supply constraints; and changing supply dynamics as a
result of supply chain disruptions, supplier manufacturing capacity, climatic
conditions, changes in supplier credit profiles and customer demand. If
Nufarm is unable to appropriately manage these factors across the group,
it may have an adverse effect on the financial position and performance of
the Nufram.
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.
30
Nufarm Limited | Annual Report 2023
Board of directors and key management personnel
Board
Additional information about directors' committee memberships and other roles can be found in the Directors' Report on
pages 54-59.
Current directors
John Gillam BCom, MAICD, FAIM
Independent non-executive chair
John Gillam joined the board on 31 July 2020 and was appointed chair on 24 September 2020.
John has extensive commercial and leadership experience from a 20-year career with Wesfarmers
where he held various senior leadership roles including chief executive officer of the Bunnings Group,
Managing Director of CSBP and chairman of Officeworks. John is based in Australia.
Greg Hunt Harvard AMP, Grad Dip. Mgmt, AGSM, AICD
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 chief executive officer in 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.
Alexandra Gartmann BSc (Resource & Environmental Management)
Independent non-executive director
Alexandra Gartmann joined the board on 23 September 2022.
Alexandra brings over 25 years of deep industry experience in rural, agriculture and community
focused organisations and is the former chief executive officer of the Rural Bank, a division of the
Bendigo & Adelaide Bank. Her executive career includes roles such as Bendigo & Adelaide Bank
Executive Marketing, Partnerships & Corporate Affairs and chief executive officer of Rural Bank and
as chief executive officer of the Foundation for Rural & Regional Renewal and The Birchip Cropping
Group. Alexandra serves on boards across agriculture, banking and the environment. Alexandra is
based in Australia.
Dr David Jones BA (Hons) Science, PhD
Independent non-executive director
David Jones joined the board on 23 June 2021.
David has held chair and director roles in large global agricultural business. His experience includes
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. David is based in Switzerland.
Marie McDonald LLB(Hons), BSc(Hons)
Independent non-executive director
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. Marie is currently a member of the Melbourne
University Law School Foundation Board. Marie is based in Australia.
Nufarm Limited | Annual Report 2023
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Board of directors and key management personnel continued
Prof. Adrian Percy BSc, MSc, PhD
Independent non-executive director
Adrian Percy joined the board on 1 July 2023.
Adrian is currently the inaugural executive director of the NC Plant Sciences Initiative at North Carolina
State University. He has more than 30 years of experience in the agricultural sector, with previous roles
as chief technology officer of UPL Ltd and head of research and development for the Crop Science
Division of Bayer. In the latter role, he was a member of their executive committee with responsibility for
internal and open innovation activities in the areas of crop protection chemistry and biologicals, as well
as seeds and traits. During his 25-year tenure at Bayer, he also held numerous positions in agricultural
research and development. Adrian is a venture partner at Finistere Ventures LLC, a technology and life
sciences venture capital investor. Adrian is based in the United States.
Lynne Saint BCom, GradDip Ed Studies, FCPA, FAICD
Independent non-executive director
Lynne Saint joined the board on 18 December 2020.
Lynne 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. Lynne is based in Australia.
Federico Tripodi BAgronomic Engineering, MBA
Independent non-executive director
Federico Tripodi joined the board on 19 June 2023.
Federico has close to three decades of involvement in the agri-food sector with his
experience spanning general management, research and development, corporate strategy and the
commercialization of novel plant biotechnologies targeted for consumers and farmers. Federico is the
founder and chief executive officer of Blacktop Holdings, a boutique venture lab that offers strategic
and operating partnership services to rapidly growing Ag Tech, Food and Agribusiness companies,
their investors and research institutions. From 2016 to 2018, Federico served as the chief executive
officer of Calyxt Inc. (NASDAQ:CLXT), a company that develops healthier food ingredients by applying
a new breeding technology. Prior to Calyxt, Federico worked at Monsanto Company for nearly two
decades where his primary focus was developing health, sustainability and renewable energy crop
products in the United States and Latin America. Federico is based in the United States.
Gordon Davis BForSc, MAgSc, MBA
Independent non-executive director
Gordon Davis joined the board on 31 May 2011 and resigned on 15 November 2023.
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. Gordon is based in Australia.
Peter Margin BSc(Hons), MBA
Independent non-executive director
Peter Margin joined the board on 3 October 2011 and resigned on 15 November 2023.
Peter has many years of leadership experience in major Australian and international food companies
including executive chairman of Asahi Holdings (Australia) Pty Ltd, chief executive/managing director of
Goodman Fielder Ltd and before that chief executive/managing director of National Foods Ltd. Peter is
based in Australia.
Former directors
32
Nufarm Limited | Annual Report 2023
Company Secretary
Kate Hall LLB(Hons), BSc and LLM(IP)
Company Secretary
Kate Hall was appointed company secretary on 20 April 2022. Kate has more than 20 years’ Australian
and international experience as a general counsel and senior executive leading legal, intellectual
property, governance, risk and compliance functions.
Key management personnel
Greg Hunt Managing Director and Chief Executive Officer
(See profile in Board section)
Paul Townsend B.Bus (Accounting), FCA, GAICD
Chief Financial Officer
Paul Townsend joined Nufarm in December 2020. His 30-year career record spans across a variety of
industries and includes chief financial officer roles with Asaleo Care, Pacific Hydro, Futuris Automotive
Group and most recently Monash University.
David Allen MBA
Group Executive, Supply Chain Operations
Dave joined Nufarm in 2022 with a highly successful track record within global organisations of delivering
strategic change, business transformation and capability development. Dave's areas of expertise include
manufacturing, operations, procurement, sales and operations planning, logistics and IT.
Nufarm Limited | Annual Report 2023
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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 corporate governance statement (Statement) outlines the
governance framework of Nufarm Limited ABN 37 091 323 312
and its controlled entities (Nufarm or company) for the year
ended 30 September 2023.
Key governance policies are reviewed regularly to ensure they
continue to reflect a high standard of corporate governance
and comply with the ASX Corporate Governance Principles
and Recommendations 4th Edition (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.
Nufarm’s key governance documents, including constitution,
board and board committee charters and key policies are
available on the company’s website at https://nufarm.com/
investor-centre/corporate-governance/.
The Statement is current as at 8 December 2023 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.
The board charter 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 chair,
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
the continuous disclosure policy, code of conduct,
anti-bribery and anti-corruption policy and speak up
(whistleblower) policy
• approving ASX releases as set out in the continuous
disclosure policy
• appointing the chair 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.
34
Nufarm Limited | Annual Report 2023
2.3 Board composition
At the date of this Statement the board has seven non-
executive directors and the CEO and at 30 September
2023 the board had nine 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 52-53 in the 2023
Annual Report. The constitution provides that the company is
not to have more than 11 or less than three directors.
In assessing the composition of the board regard is given to the
following principles:
• the role of the chair and the CEO should not be filled by the
same person
• the chair 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
• the board should represent a broad range of qualifications,
experience, expertise and diversity.
Changes during the year
During FY23, the board, with the assistance of the nomination
committee, completed the final phase of its board renewal
program to ensure a diverse mix of skills, experience and
tenure that is aligned with the future of our business. Federico
Tripodi and Adrian Percy were appointed as independent non-
executive directors effective 19 June 2023 and 1 July 2023
respectively and long-standing non-executive directors Gordon
Davis and Peter Margin retired effective 15 November 2023.
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
• an ability to devote sufficient time to properly carry out the
role and responsibilities of the board.
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 8 times including a strategy board
session. Meetings are held face to face, virtually or as
hybrid meetings.
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 generally 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 FY23 can be found in the Annual Report on
page 54.
Key Activities undertaken by the board during
the year
The board considered a range of matters during
FY23, including:
• reviewing and agreeing to adopt updates to governance
policies including the inclusion and diversity policy,
continuous disclosure policy, the group risk policy and the
Modern Slavery Statement
• implementing a new board committee structure
• continuing the board succession process resulting in the
appointment of Federico Tripodi and Adrian Percy as non-
executive directors
• 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
• overseeing the financial performance and key metrics of
the company
• reviewing the risk management system including the risk
management framework.
Nufarm Limited | Annual Report 2023
35
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Corporate governance statement continued
Skills matrix
During FY23, the board completed the final phase of its board renewal program to ensure a diverse mix of skills, experience and
tenure that is aligned with the future of our business. The board skills matrix at 30 September 2023 and the assessment of the
directors in office at that date is included in the following table.
Skills/Experience
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
No of Directors
with skill
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7
36
Nufarm Limited | Annual Report 2023
2.5 Chair
2.8 Conflict of interest
The chair of the board is John Gillam, an independent
non-executive director.
The chair 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 chair 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 people,
safety and remuneration committee (previously the human
resources committee).
During FY23 Federico Tripodi and Adrian Percy were appointed
as independent non-executive directors, effective 19 June 2023
and 1 July 2023 respectively. Gordon Davis and Peter Margin
resigned effective 15 November 2023.
The board has a non-executive tenure policy that provides
for non-executive directors to retire after nine years (or twelve
years in the case of a chair 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. Gordon Davis and Peter Margin had both held office
for 12 years before they retired following a transition period with
the newly appointed non-executive directors to facilitate the
final phase of the board’s renewal program.
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.
The company has 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.
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 2.4 and any gaps identified in
the board skills matrix. This role description is 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
2.7 Director independence
• indemnity, access and insurance arrangements.
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 FY23 all non-executive directors were considered to
be independent.
In considering the matter of independence, the board
considered each director’s tenure and concluded that Gordon
Davis and Peter Margin had not held office for such a period
as to interfere with the exercise of independent judgement.
In reaching this conclusion, the board noted that neither had
formed associations with management that might compromise
their ability to exercise independent judgement.
Prior to appointment all 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.
Nufarm Limited | Annual Report 2023
37
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Corporate governance statement continued
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 key
sites globally. 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, industry related matters and any new
emerging developments that may affect the company.
2.10 Shareholding requirements for non-executive
directors
The company has a 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 (May 2021), within five years of the adoption. Further
details are set out in the Remuneration Report on pages 56 to
76 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 FY23 which focussed
on 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.
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 AGM.
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 2023 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 coordinates all board
and board committee business, including agendas, papers,
minutes, communication and filings. All directors have direct
access to the company secretary.
38
Nufarm Limited | Annual Report 2023
3 Committees
During FY23 the board carried out a comprehensive review
of its committee structure. To assist the board to carry out
its responsibilities, effective 1 July 2023 the board has the
following committees in place:
• audit and risk committee
• people, safety and remuneration committee
• innovation committee
• sustainability and environment committee
• nomination committee.
The former audit committee, risk and compliance
committee and human resources committee ceased effective
30 June 2023 and their responsibilities were allocated to
other committees.
Each committee has a charter which sets out the membership
structure, roles and responsibilities and meeting procedures
that can be found in the corporate governance section of
Nufarm’s website.
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.
Membership of each committee is outlined in the relevant
section below. All board members are invited to attend all
committee meetings with the consent of the committee chair.
3.1 Audit and risk committee
The role of the audit and risk committee is to assist the board in
fulfilling its responsibilities in respect of the company’s financial
statements and corporate reporting, the effectiveness of
internal and external audit processes, internal control systems,
treasury and taxation practices, oversight of financial and
non-financial risk management and the company's insurance
program, and oversight of compliance with relevant legal
and regulatory and best practice requirements within the
responsibility of the committee.
The audit and risk committee was convened effective 1 July
2023, taking on all responsibilities of the former audit
committee and those responsibilities of the former risk and
compliance committee relating to overall risk governance and
any risks which have not been allocated to other committees.
Membership of and key activities carried out by those former
committees is detailed in this section. The audit and risk
committee charter was created in June 2023.
The key responsibilities of the audit and risk committee are:
• oversight of the integrity of the financial statements and
other financial reports and financial reporting systems
and processes
• considering any material financial and non-financial risk
areas that are not specifically under the remit of
other committees
• oversight of compliance with applicable legal and regulatory
requirements and best practices guidelines within the
committee’s area of responsibility
• oversight of the insurance program
• oversight of the process for receipt, retention and treatment
of information received under the speak up (whistleblower)
policy and any material breaches of the anti-bribery and
corruption policy and the code of conduct
• other matters referred by the board from time to time.
Membership and meetings
The audit and risk 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)
• an independent chair, who is not chair of the board.
The members of the audit and risk committee during the
reporting period were:
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Membership status
Lynne Saint (Chair) Member and chair from 1 July 2023
Marie McDonald
Member from 1 July 2023
Alexandra
Gartmann
Member from 1 July 2023
John Gillam
Member from 1 July 2023
Gordon Davis
Peter Margin
Member from 1 July 2023 until
15 November 2023
Member from 1 July 2023 until
15 November 2023
Members of the former audit committee from 1 October 2022
until 30 June 2023 were:
Name
Membership status
Lynne Saint (Chair) Member and chair for the entire period
Marie McDonald
Member for the entire period
Alexandra
Gartmann
Member for the entire period
Gordon Davis
Member for the entire period
Members of the former risk and compliance committee from
1 October 2022 the start of the period until 30 June 2023 were:
Name
Membership status
Gordon
Davis (Chair)
Member and chair for the entire period
Marie McDonald
Member for the entire period
Alexandra
Gartmann
Member for the entire period
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• reviewing the effectiveness of external audit processes
Peter Margin
Member for the entire period
• oversight of the effectiveness of the internal audit function
and systems of internal control
• oversight of treasury and taxation practices
• reviewing the effectiveness of risk governance including the
risk management framework
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.
Nufarm Limited | Annual Report 2023
39
Corporate governance statement continued
The external auditors, CEO, CFO and Head of Risk, Assurance
and Compliance have a standing invitation to attend meetings
of the audit and risk committee, and the internal audit
service provider partner attends meetings of the audit and risk
committee at the invitation of the committee chair.
The details of the audit and risk committee meetings are set out
in the Directors’ Report in the 2023 Annual Report on page X.
reviewed and updated in February 2023. 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 AGM and is
available to answer questions from investors relevant to
the audit.
Activities during the year
The key activities undertaken by the audit and risk committee
(including the former audit committee and former risk and
compliance 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 FY24 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 half year and annual financial statements
• reviewing management reports on the company’s key
financial and non-financial risks and risk management
program including contemporary and emerging risks such
as, geopolitical, cyber-security, privacy and data breaches
and climate change
• reviewing the company’s key risks and risk management
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
• receiving regular reports on health, safety and ESG matters
(until responsibility for health and safety and ESG matters
moved to other committees effective 1 July 2023)
• receiving regular reports on quality matters
• considering the company's insurance program
• recommending to the board the approval of the Modern
Slavery Statement for FY22
• approving the 2022 Sustainability Report
• receiving regular reports on the company’s
compliance program.
External audit
The audit and risk 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.
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
40
Nufarm Limited | Annual Report 2023
3.2 People, safety and remuneration committee
The role of the people, safety and remuneration committee
is to assist the board to perform its functions in relation to
remuneration policies and practices for directors, the CEO
and KMP. It also assists in the development, retention and
termination of the CEO and KMP, succession planning for the
CEO and senior executives, equity based remuneration plans
for employees, management of inclusion and diversity and
management of occupational health and safety (OHS).
The people, safety and remuneration committee was convened
effective 1 July 2023, taking on all responsibilities of the
former human resources committee and those responsibilities
of the former risk and compliance committee relating to OHS.
Membership of and key activities carried out by the people,
safety and remuneration committee and the former human
resources committee is detailed in this section. The people,
safety and remuneration committee charter was created in
June 2023.
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
• assisting the board in the annual performance review of the
CEO and overseeing the annual performance review of KMP
• oversee the succession plans and process for the CEO and
direct reports to the CEO
• 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
• oversee and monitor the identification, assessment,
management, prioritisation and reporting of OHS risks.
The process to engage remuneration consultants, who will
provide independent remuneration advice, as appropriate, on
director fees and KMP remuneration, structure, practice and
disclosure, is included in the people, safety and remuneration
committee charter. Remuneration consultants are engaged
directly by the chair of the people, safety and remuneration
committee and report directly to the committee.
During the period data provided by remuneration consultants
engaged through this process was utilised to review KMP and
Nufarm Leadership Team (NLT) remuneration for FY23.
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 56 to 76. The progress
against the company’s inclusion and diversity objectives are
detailed in the inclusion and diversity section of this Statement
on pages 43–47.
Membership and meetings
The people, safety and remuneration committee consists of
a minimum of 3 members of the board, all of whom are
independent non-executive directors.
The members of the committee during this period were:
Name
Membership status
Marie McDonald
Member and chair from 1 July 2023
John Gillam
Member from 1 July 2023
Gordon Davis
Member from 1 July 2023
David Jones
Member from 1 July 2023
Federico Tripodi
Member from 1 July 2023
The members of the former human resources committee from
1 October 2023 until 30 June 2023 were:
Name
Membership status
Peter Margin
Member and chair for the entire period
Gordon Davis
Member for the entire period
Lynne Saint
Member for the entire period
A standing invitation for all meetings is issued to the CEO, CFO
and Group Executive, People and Performance.
Activities during the year
The key activities undertaken by the committee during the
year included:
• approving the remuneration report for FY22
• responding to the FY22 remuneration ‘strike’ by engaging
an independent remuneration consultant and engaging
extensively with key stakeholders regarding proposed
changes to the FY23 Executive Incentive Plan (EIP)
• endorsing the design of the FY23 EIP
• Undertaking the annual review of executive KMP’s
remuneration and making recommendations to the Board
regarding remuneration levels, performance outcomes and
incentive awards
• considering extension of minimum shareholding policy to
executive KMP and other senior executives
• approving performance objectives and key performance
indicators (KPIs) for the CEO, KMPs and key executives;
• approving the diversity and inclusion strategic priorities
and targets
• approving the FY23 parameters for fixed pay remuneration
• monitoring the organisational culture and employee
engagement metrics including pay equity and
workforce representation;
• reviewing talent development programs and
succession planning
3.3 Sustainability and environment committee
The role of the sustainability and environment committee is to
assist the board in relation to sustainability and environment
related performance, risks and reporting. The committee was
convened on 1 July 2023 to enhance the board's focus on
sustainability and the environment, previously under the remit of
the former risk and compliance committee. Membership of and
key activities carried out by the sustainability and environment
committee is detailed in this section. The sustainability and
environment committee charter was created in June 2023.
The key responsibilities and functions of the sustainability and
environment committee are:
• overseeing sustainability and environmental risks that
are material to the operations and achievement of
Nufarm's strategy
• overseeing Nufarm's performance with respect to
sustainability and environmental issues, including
external targets, the impact on stakeholders and on
Nufarm's reputation
• reviewing Nufarm's public sustainability and environment
targets and position statements
• monitoring Nufarm's strategy as it relates to sustainability
and environmental issues
• monitoring compliance with applicable sustainability and
environmental related laws and regulations
• overseeing the preparation and assurance of Nufarm's
periodic sustainability and environment related reporting.
Membership and meetings
The sustainability and environment committee consists of:
• a minimum of 3 members of the board, all of whom are
non-executive directors
• a majority of independent directors
• an independent director as chair.
The members of the sustainability and environment committee
during the reporting period were:
Name
Alexandra
Gartmann
Membership status
Member and chair from 1 July 2023
Lynne Saint
Member from 1 July 2023
Adrian Percy
Member from 1 July 2023
A standing invitation for all meetings is issued to the CEO,
CFO, Group Executive, Supply Chain Operations and Group
Executive, Growth and Sustainability.
Activities during the reporting period
The key activities undertaken by the committee during this
period were:
• monitoring Nufarm inclusion and diversity objectives in line
• overseeing the preparation of the 2023 Annual
with Nufarm plans
Sustainability Review
• from 1 July 2023, receiving reports on key OHS risks.
• receiving reports from management on environmental
performance and ESG related matters.
Nufarm Limited | Annual Report 2023
41
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Corporate governance statement continued
3.4 Innovation committee
3.5 Nomination committee
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. Membership of and key activities carried
out by the innovation committee is detailed in this section. The
innovation committee charter was last reviewed in July 2021.
The innovation committee’s key responsibilities and
functions are:
• recommending the product research and development
policy to the board for approval
• 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
The role of the nomination 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. Membership of and key activities carried out by
the nomination committee is also detailed in this section. The
nomination committee charter was last reviewed in July 2021.
The nomination committee has a charter which sets out the
roles and responsibilities of the committee in more detail
and can be found on the corporate governance section of
Nufarm’s website.
Membership and meetings
The membership of the nomination committee includes:
• All non-executive directors (with the majority to be
independent non-executive directors) with the chair to be
an independent non-executive director
• where the board chair 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.
development capital allocation policies and procedures for
crop protection and seed technologies
The members of the nomination committee during this
period were:
• monitoring post implementation results including
measurable benefits for all new key product development
Name
Membership status
• reviewing management of the intellectual property portfolio
John Gillam (Chair) Chair and member for the entire period
Gordon Davis
Member for the entire period
Alexandra
Gartmann
Member for the entire period
David Jones
Member for the entire period
Marie McDonald
Member for the entire period
Peter Margin
Member for the entire period
Adrian Percy
Member from 1 July 2023
Lynne Saint
Member for the entire period
Federico Tripodi
Member from 19 June 2023
Activities during the year
The key activities undertaken by the nomination committee
related to succession planning for the board including making a
recommendation to appoint Federico Tripodi and Adrian Percy
as independent non-executive directors.
• reviewing and making recommendations on
commercialisation opportunities for the company’s
technology and intellectual property
• 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
• an independent director as chair.
The members of the committee during the relevant
period were:
Name
Membership status
Dr David
Jones (Chair)
Member for the entire period
Peter Margin
Member for the entire period
Marie McDonald
Member until 30 June 2023
Adrian Percy
Member from 1 July 2023
Federico Tripodi
Member from 19 June 2023
A standing invitation for all meetings is issued to the
CEO, CFO, Group Executive, Portfolio Solutions and Group
Executive, Nuseed.
Activities during the reporting period
The key activities undertaken by the committee during this
period were:
• recommending material innovation related capital
expenditure to the board
• receiving reports from management on new leads, new
technologies and M&A opportunities
• reviewing capital allocation for research and
development projects.
42
Nufarm Limited | Annual Report 2023
4 Inclusion and diversity
4.1 Nufarm’s workforce
As a global agricultural innovator, we highly value a diverse
and inclusive work environment that fuels innovative thinking
and decision-making. We know this comes from nurturing a
workplace in which individuals are valued for their diversity, can
bring their whole self to work and be empowered to reach
their full potential. We are stronger when our operations and
solutions reflect the thinking of all our people, representing
a broad range of backgrounds, cultures and experiences. As
we continue to support the future of agriculture, we will also
continue to nurture a rich diverse and inclusive culture and a
strong sense of belonging for all.
This year we continued our focus towards our 2022–2025
Inclusion and Diversity goals with oversight and leadership from
our executive Inclusion and Diversity (I&D) steering committee.
Our strategy will allow us to embed inclusion, diversity and
equity in the way we conduct our business, wherever we
operate around the world. Some activities were:
• continuing to improve our employee satisfaction and
inclusion and diversity items measured through Nufarm
Voice, our employee continuous listening strategy
• providing access to a global wellness platform and
Employee Assistance Program (EAP) for all employees in
48 languages, and seeing 36 per cent uptake for 2023 FY
(2022: 23 per cent)
• refreshing our executive I&D steering committee with a new
chair appointed and new member introduced to bring fresh
perspective to the steering committee leadership
• establishing employee-initiated Employee Representative
Groups (ERG) as a subset of our regional I&D councils
• providing mentoring for women and extending this externally
beyond the Nufarm context
• celebrating diversity through the theme #comeasyouare
across the globe with International Women's Day with a
STEM focus, Black History Month in North America, and
European Diversity Week
• establishing Graduate/Internship programs in all regions to
help attract and build diversity pipelines in relevant functions,
ranging from commercial to technology and engineering
• intentionally focusing on attracting diverse and female
talent through:
– inclusive interview training for all managers
– targeted shortlists
– gender diverse interview panels
– deploying our new referral programs that encouraged
referral of under-represented candidates across
all regions
• showcasing Nufarm progress through Work 180 recognition
and promotion of 3 employee stories. We continue to be
recognised as a relevant employer under the Workplace
Gender Equality Act and as a gender diverse employer,
endorsed by work180 in Australia and North America.
At the end of this reporting period, we employed the full-time
equivalent of 3059 people (2022: 2,811), an increase of 248
full-time equivalents seen mostly in the supply chain, sales and
portfolio functions (87 percent).
Most of our workforce remain full-time: 93 per cent are
permanent employees (2022: 89 per cent) and 7 per cent
are contract or non-permanent employees (2022: 11 per
cent). Where the role allows it, we support flexible working
arrangements, with 3 per cent of our workforce operating under
part-time arrangements (2022: 3 per cent). The number of men
participating in part-time work continues to increase. Men now
represent 28 per cent of our part-time workforce compared
with women, who represent 72 per cent (2022: 23 per cent
men and 77 percent women).
2023 FTE by Geography
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Nufarm Limited | Annual Report 2023
43
41%Asia-Pacific35%Europe6%South America18%North America46%Supply Chain31%Sales10%Portfolio Solutions7%Finance2%Corporate2%Information Technology2%Human Resources
Corporate governance statement continued
4.2 Women at Nufarm
Nufarm focuses on removing barriers to equality and being an
inclusive place to work. We are committed to working towards
a 40:40:20 vision for 2030 in our senior leadership category
(CEO-1 and CEO-2). This represents at least 40 per cent who
identify as women, 40 per cent who identify as men and 20
per cent who identify as man, woman, or other in our senior
leadership by 2030.
With 35% of the executive and senior management team being
women, we are well on the way to achieving our target of
having not less than 35 per cent of either gender represented
in our workforce by 2025. We saw improved representation of
women across the business this year:
Representation of women increased in Europe and South
America, while North America and APAC remained unchanged.
Representation of women also increased across all functions
that are under-represented by women. We continued to
focus on improving gender diversity in our commercial and
manufacturing functions and pursue targeted objectives to
address the gender diversity gap.
Board 43%
At the date of this report 43 per cent of
the board's non-executive directors are
women. 33 per cent of our non-executive
directors were women at 30 September
2023 (2022: 43 per cent). This was
part of the board's succession planning,
which resulted in an overlapping period
between the appointment of two men
and the planned retirement of two men.
Leadership 35%
Women represent 35 per cent (2022:
31 per cent) in our executive and
senior management employee category
(including KMP). This is an increase of
4 per cent.
45 per cent of all executive and
senior management appointments were
women, (2022: 80 per cent); 40 per cent
of those came from within our internal
talent pool (2022: 13 per cent)
Business 28%
Representation of women across the
business increased to 28 per cent (2022:
27 per cent)
35 per cent of all new appointments
were women (2022: 37 per cent).
27 per cent of leavers were women
(2022: 28 per cent).
Promotions of women was 34 per cent
(2022: 35 per cent)
44
Nufarm Limited | Annual Report 2023
Gender Diversity by Geography
Asia-Pacific
Europe
South America
North America
Gender Diversity by Function
Supply Chain
Sales
Portfolio Solutions
Finance
Corporate
Information Technology
Human Resources
Women
314
329
42
171
Women
306
219
119
113
35
12
52
30 Sept 2023
30 Sept 2022
Men
921
754
134
393
Grand Total
1236
Women %
25%
Women%
25%
Grand Total
1189
1083
176
564
3059
30%
24%
30%
28%
29%
23%
30%
27%
1017
113
492
2811
30 Sept 2023
30 Sept 2022
Men
1105
738
173
99
37
37
13
Grand Total
1411
Women %
22%
Women%
20%
Grand Total
1280
957
292
212
72
49
65
3059
23%
41%
53%
49%
24%
80%
28%
18%
43%
55%
46%
20%
79%
27%
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2811
Gender Diversity by Employee Category
30 Sept 2023
30 Sept 2022
Non-executive directors
(Sep 2023)
Non-executive directors
(Nov 2023)
Executive key
management personnel3
Exec and senior management
(CEO-1 and CEO-2)4
People manager
Professionals
Manufacturing shop floor
Administration
Other
Women
3
3
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31
99
396
137
190
3
Men
6
4
3
55
328
879
820
94
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Grand Total
9
Women %
33%1
Women%
43%
Grand Total
9
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1275
957
285
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19
1 33 per cent is the representation of women non-executive directors at 30 September 2023, due to succession planning, which resulted in an overlapping period between
the appointment of two men and the planned retirement of two men.
2 43 per cent is the representation of women non-executive driectors at the time of this report and reflects the true gender diversity of the board's non executive directors.
3 Executive key management personnel as listed in the annual report and includes CEO and some direct reports.
4 CEO-1 refers to the layer of senior executives reporting directly to the CEO; CEO-2 the next layer of senior management reporting to those senior executives.
Nufarm Limited | Annual Report 2023
45
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Corporate governance statement continued
4.3 Nufarm board diversity
During FY23 the board continued its succession planning resulting in the appointment of two new non-executive directors ahead
of the planned retirement of longstanding directors Peter Margin and Gordon Davis in November 2023. The following data set
represents the current non-executive director composition at the date of this annual report release.
Gender of non-executive directors
Age of non-executive directors
Tenure of non-executive directors
Region of residence of non-executive directors
4.4 Cultural diversity at Nufarm
Our global footprint gives us a culturally diverse workforce of leaders and teams serving customers from more than 100 countries.
• 43 per cent of non-executive board members (2022: 14 per cent) and 46 per cent of CEO-1 executive team members reside
outside Australia
• Our executive and senior management team remains culturally diverse, representing at least 20 different nationalities
• Nufarm’s employee self-disclosed data indicate that our workforce comes from over 80 different countries and can speak over
40 different languages
• From this self-disclosed data we know 21 per cent are currently working in a country other than that of their birth (2022:18 per
cent). This population represents 11 per cent of our organisation (2022: 9 per cent)
• Of the employees that are working in a country other than that of their birth 41 per cent are women and 59 per cent are men
(2022: 42 percent female and 58 percent male).
2023 Gender diversity of employees working in a country
other than birth
2023 Location of our employees working in a country other
than that of their birth
46
Nufarm Limited | Annual Report 2023
43%Women57%Men0%Under 30 years old29%30 - 50 years old71%Over 50 years old29%0 - 1 years43%1 - 3 years14%3 - 5 years14%5 - 10 years57%Asia-Pacific14%Europe29%North America41%Women59%Men49%Asia-Pacific36%Europe1%South America14%North America 4.5 Nufarm Voice
Through Nufarm Voice, our comprehensive employee
engagement platform, we facilitate a continuous listening
strategy that involves regular, anonymous surveys. Employee
feedback uncovers opportunities to improve and strengths to
leverage towards building a more inclusive culture and a better
Nufarm. This year we conducted three Nufarm Voice employee
engagement surveys and introduced onboarding surveys to
speed up time to perform and sense of belonging as part of
our continuous employee listening strategy.
Nufarm Voice empowers managers to better use anonymous,
confidential employee feedback on a regular basis to fuel
meaningful conversations and prioritise timely action that
responds to this feedback and contributes to positive change.
This is done by:
• empowering our managers in the driver’s seat to act on
what their teams are telling them about ways to create
positive change
• conducting shorter and more frequent surveys so we can
continuously listen to the voice of our people
• delivering results coupled with suggested resources and
checklists so managers can start to make positive
change immediately.
The survey runs every four months and while participation is
not compulsory it is encouraged. We saw gradual improvement
towards the top quartile benchmark: high participation
continued at 78–80 per cent and overall employee satisfaction
(78) remains at the top quartile benchmark in the GLINT
database (77 per cent).
Nufarm Voice is a comprehensive employee engagement
platform, we use the results to understand, cultivate and
measure our progress towards building a more inclusive
culture. Since we introduced the survey, we can see our
inclusion and diversity efforts progressing positively, with
most of the identified inclusion items at or above the top
quartile benchmark.
Although women report slightly lower engagement across
all the identified inclusion items, their response continues to
improve more than that of men year on year across most items
since introduced in 2020.
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Nufarm Voice Inclusion Items 2023
Overall engagement (eSat)
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.
Belonging: I feel a sense of belonging at Nufarm.
Recent result
versus
benchmark
Change since
FY22
Women versus
men response
Change in
womens
response
78
83
74
74
78
78
+1
+1
-
+1
+1
+1
(1)
(1)
+1
+1
+1
-
(3)
(1)
(1)
(2)
(3)
(2)
(1)
(1)
+3
+4
+2
-
Nufarm Limited | Annual Report 2023
47
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Corporate governance statement continued
4.6 Focus for FY25 and progress towards achievement
We are cultivating a high performing culture – one our employees create as they solve for the customer using a growth mindset and
working together as ‘One Nufarm’. We recognise inclusive and diverse workplaces perform better and can deliver stronger returns,
innovate with ease, have access to a diverse talent pool and retain their employees for longer while making a positive contribution to
the economy.
Our committed aspiration - 40:40:20 representation by 2030 for Senior Leadership Team (CEO-1 and CEO-2)
I&D Goals by 2025
2023 I&D objectives
Increase I&D awareness:
Implement an I&D communication plan for all internal and
external communications.
Communicate about I&D internally and externally to show
our employees and stakeholders Nufarm is an inclusive work
environment where individuals are valued for their diversity and
can bring their whole self to work and be empowered to reach
their full potential, measured through Nufarm Voice survey and
LinkedIn presence.
For internal communications:
Frequent communication/engagement activities that improve our
people's experience above benchmark for the following inclusion items:
• 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.
• Belonging: I feel a sense of belonging at Nufarm.
For external communications:
Improve gender diversity of social media followers greater than industry,
31 per cent that identify as women (LinkedIn, 2022). Increasing female
engagement and awareness of Nufarm diversity benefits measured
through LinkedIn reporting.
Strengthen I&D leadership:
Increase leadership accountability for creating an inclusive
workplace and progressing diversity.
Progress the senior leadership team towards having not less
than 35 per cent of each gender represented, with clear
accountabilities established.
Pursue leadership and talent development
targets by 2025:
•
the board to have not less than 40 per cent of either gender
represented by 2025
•
•
senior leadership team and workforce to have not less than 35
per cent of either gender represented by 2025
senior leadership team to have succession plans with diverse
candidates who are skilled, ambitious and engaged
• establishing gender diversity in succession plans for all
executive roles by 2025
Pursue a targeted inclusion program for manufacturing: Increase
representation of women in supply chain (manufacturing) leadership
roles by at least 3 per cent in FY23 (2020: 13 per cent)
• map external talent for manufacturing roles
• ensure sites are represented on local inclusion and diversity councils
• establish Women in Manufacturing Mentoring
Improve representation of women in commercial and P&L roles:
• deploy the Women’s Mentoring Program across all regions
•
increase female representation greater than 17 per cent in
commercial and P&L roles
• conduct a global gender pay parity review.
Have not less than 35 per cent of each gender represented in
succession plans of the executive team (CEO-1) and establish gender
diversity in more than 70 per cent of individual succession plans.
Attract and retain diverse talent:
Update recruitment and selection processes to reduce bias,
attract/select more diverse talent and enable internal promotions.
For attracting and advertising:
•
increase role attractiveness to minority groups by 2025
measured through engagement presence with LinkedIn
and appointments
•
target universities, colleges, technical institutions, and areas
with high minority populations to advertise and build an
employer of choice image for IT, commercial agriculture, and
manufacturing by 2025
For selection:
• have one female on the selection panel for all senior leadership
appointments and for 80 per cent of all other appointments
across the organisation by 2025
• commit to having a gender-neutral shortlist for all senior
leadership roles with at least one female on the shortlist of 80
per cent of all other roles by 2025
Deploy an employee referral program across all regions to increase
diversity of candidates in each business unit:
• develop a global parental leave guide
•
launch early-in-career programs to attract early-in-career pipeline
relevant to regional focus areas
For interview panels:
• have one female on selection panel for all senior
leadership appointments
• have one female on selection panel for 80 per cent of all other
appointments across the organisation
For shortlisting:
• have a gender-neutral shortlist for all senior leadership roles
• have one female on the shortlist for 70 per cent of all other roles
by 2025
48
Nufarm Limited | Annual Report 2023
North America creates a sense of belonging and allows members of these groups to
• Authenticity: I feel comfortable being myself at work.
2023 Progress against objectives
For internal communications:
We have implemented psychological safety training and embeded psychological safety
in our training and processes, through Leadership Training in Asia, Development Training
in Europe and Career Conversations in Australia. The creation of ERG's in Europe and
speak up and share their views of diversity through local campaigns.
Four of the five inclusion items track above the top quartile (Nufarm Voice items 2023,
section 4.4).
For external communications:
represented by women.
2024 I&D objectives
For internal communications: Frequent
communication/engagement activities that improve our
peoples experience above benchmark for the following
inclusion iteams:
•
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
• Belonging: I feel a sense of belonging at Nufarm.
For external communications: Improve gender
diversity of social media followers greater than industry,
31 per cent that identify as women (LinkedIn, 2022).
Total female engagement with LinkedIn went up 2 per cent to 40 per cent (2022: 38
everyone at Nufarm has equal opportunity
per cent). Overall, followers remained consistent at 31 per cent (2022: 31 per cent)
to succeed.
• 43 per cent of non-executive directors are women at the date of this report
• 35 per cent of the Executive and Senior Management team are women
Develop the next 2025-2028 Inclusion and Diversity
roadmap through diagnostics, data and consultation.
•
targeted talent mapping was completed and being used for talent acquisition
•
increase representation of women in supply chain
Women in manufacturing:
• women representation has increased in manufacturing leadership roles representing
15 per cent of all people leadership roles (2022: 13 per cent)
• our manufacturing sites have either their own local inclusion & diversity council or are
represented on the regional I&D council
• Europe and NA have established mentoring across manufacturing and supply
chain with 12 initial participants. APAC will extend their mentoring program to
manufacturing in 2024
Women in commercial and P&L roles:
• women's mentoring is active in all regions with targeted commercial female
participation of at least 21 participants
• women's representation has increased to 23 per cent of the commercial function
(2022: 21 per cent) and 19 per cent of commercial leadership roles
Progress the senior leadership team beyond having not
less than 35 per cent of each gender represented.
Pursue a targeted program for manufacturing:
(manufacturing) leadership roles to 16 per cent
• establish Women in Manufacturing focus groups and
conduct a needs analysis to remove barriers for
women in manufacturing
• extend access to mentoring for women
in manufacturing
Conduct a global gender pay parity review using new
job architecture framework.
Have not less that 40 per cent of either gender
represented across the talent pool for executive (CEO-1)
succession and establish gender diversity in more than
Nufarm job architecture framework has been developed across all countries and roles in
70 percent of individual succession plans.
the organisation. This will be used to undertake Pay Parity review early FY24
Employee referral program across all regions is now deployed and we have seen an
Develop a Global Parental Leave Guide to provide a
uplift in diverse candidates selected. At least 28 successful external referrals were made
Nufarm minimum standard.
Women now represent 39 per cent of the talent pool for executive (CEO-1) succession
(2022: 35 per cent). Both genders are represented in 70 per cent of active
succession plans.
and 21 per cent were considered under-represented appointments. 50 per cent of the
referrals identify as female.
• our parental leave practice was audited across all countries with more than 100
employees to find we meet or exceed the median market practice
• early in career programs are now established and focus on regional priorities: NA
- technology to be launched early 2024, ANZ - commercial and operations and
Europe - operations
For interview panels:
For shortlisting:
• 100 per cent of senior leadership (CEO-1 and CEO-2) appointments had both
genders as part of interview panel
• 68 per cent of all roles had a woman on the interview panel
• 92 per cent of all senior leadership roles had at least one woman on the shortlist, and
78 per cent had at least two women.
• 51 per cent of all roles appointed had at least one woman on the shortlist.
Facilitate the early-in career programs established and
develop a growth plan for 2025 -2028.
For interview panels: have one woman on selection
panel for all senior leadership appointments and
for 80 per cent of all other appointments across
the organisations
For shortlisting: have a gender-neutral shortlist for all
senior leadership roles with at least one woman on the
shortlist for 70 per cent of all other roles by 2025
These objectives are in addition to the ongoing activities
expected as part of Nufarm's inclusion and diversity
policy and current practices that are already yielding
meaningful results.
Our committed aspiration - 40:40:20 representation by 2030 for Senior Leadership Team (CEO-1 and CEO-2)
I&D Goals by 2025
2023 I&D objectives
Increase I&D awareness:
Implement an I&D communication plan for all internal and
external communications.
Communicate about I&D internally and externally to show
our employees and stakeholders Nufarm is an inclusive work
environment where individuals are valued for their diversity and
can bring their whole self to work and be empowered to reach
their full potential, measured through Nufarm Voice survey and
LinkedIn presence.
For internal communications:
Frequent communication/engagement activities that improve our
people's experience above benchmark for the following inclusion items:
• 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.
• Belonging: I feel a sense of belonging at Nufarm.
For external communications:
Improve gender diversity of social media followers greater than industry,
31 per cent that identify as women (LinkedIn, 2022). Increasing female
engagement and awareness of Nufarm diversity benefits measured
through LinkedIn reporting.
Strengthen I&D leadership:
Increase leadership accountability for creating an inclusive
workplace and progressing diversity.
Progress the senior leadership team towards having not less
than 35 per cent of each gender represented, with clear
accountabilities established.
Pursue leadership and talent development
targets by 2025:
represented by 2025
the board to have not less than 40 per cent of either gender
Pursue a targeted inclusion program for manufacturing: Increase
representation of women in supply chain (manufacturing) leadership
roles by at least 3 per cent in FY23 (2020: 13 per cent)
• map external talent for manufacturing roles
senior leadership team and workforce to have not less than 35
• ensure sites are represented on local inclusion and diversity councils
per cent of either gender represented by 2025
• establish Women in Manufacturing Mentoring
•
•
•
senior leadership team to have succession plans with diverse
candidates who are skilled, ambitious and engaged
• establishing gender diversity in succession plans for all
executive roles by 2025
Improve representation of women in commercial and P&L roles:
• deploy the Women’s Mentoring Program across all regions
•
increase female representation greater than 17 per cent in
commercial and P&L roles
• conduct a global gender pay parity review.
Have not less than 35 per cent of each gender represented in
succession plans of the executive team (CEO-1) and establish gender
diversity in more than 70 per cent of individual succession plans.
Attract and retain diverse talent:
Update recruitment and selection processes to reduce bias,
attract/select more diverse talent and enable internal promotions.
For attracting and advertising:
•
increase role attractiveness to minority groups by 2025
measured through engagement presence with LinkedIn
and appointments
•
target universities, colleges, technical institutions, and areas
with high minority populations to advertise and build an
employer of choice image for IT, commercial agriculture, and
manufacturing by 2025
Deploy an employee referral program across all regions to increase
diversity of candidates in each business unit:
• develop a global parental leave guide
•
launch early-in-career programs to attract early-in-career pipeline
relevant to regional focus areas
For interview panels:
• have one female on selection panel for all senior
leadership appointments
• have one female on selection panel for 80 per cent of all other
appointments across the organisation
For shortlisting:
For selection:
• have one female on the selection panel for all senior leadership
appointments and for 80 per cent of all other appointments
• have a gender-neutral shortlist for all senior leadership roles
• have one female on the shortlist for 70 per cent of all other roles
across the organisation by 2025
by 2025
• commit to having a gender-neutral shortlist for all senior
leadership roles with at least one female on the shortlist of 80
per cent of all other roles by 2025
2023 Progress against objectives
For internal communications:
We have implemented psychological safety training and embeded psychological safety
in our training and processes, through Leadership Training in Asia, Development Training
in Europe and Career Conversations in Australia. The creation of ERG's in Europe and
North America creates a sense of belonging and allows members of these groups to
speak up and share their views of diversity through local campaigns.
Four of the five inclusion items track above the top quartile (Nufarm Voice items 2023,
section 4.4).
For external communications:
Total female engagement with LinkedIn went up 2 per cent to 40 per cent (2022: 38
per cent). Overall, followers remained consistent at 31 per cent (2022: 31 per cent)
represented by women.
2024 I&D objectives
For internal communications: Frequent
communication/engagement activities that improve our
peoples experience above benchmark for the following
inclusion iteams:
• 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.
• Belonging: I feel a sense of belonging at Nufarm.
For external communications: Improve gender
diversity of social media followers greater than industry,
31 per cent that identify as women (LinkedIn, 2022).
• 43 per cent of non-executive directors are women at the date of this report
• 35 per cent of the Executive and Senior Management team are women
Develop the next 2025-2028 Inclusion and Diversity
roadmap through diagnostics, data and consultation.
Women in manufacturing:
• women representation has increased in manufacturing leadership roles representing
15 per cent of all people leadership roles (2022: 13 per cent)
•
targeted talent mapping was completed and being used for talent acquisition
• our manufacturing sites have either their own local inclusion & diversity council or are
represented on the regional I&D council
• Europe and NA have established mentoring across manufacturing and supply
chain with 12 initial participants. APAC will extend their mentoring program to
manufacturing in 2024
Women in commercial and P&L roles:
• women's mentoring is active in all regions with targeted commercial female
participation of at least 21 participants
• women's representation has increased to 23 per cent of the commercial function
(2022: 21 per cent) and 19 per cent of commercial leadership roles
Nufarm job architecture framework has been developed across all countries and roles in
the organisation. This will be used to undertake Pay Parity review early FY24
Women now represent 39 per cent of the talent pool for executive (CEO-1) succession
(2022: 35 per cent). Both genders are represented in 70 per cent of active
succession plans.
Employee referral program across all regions is now deployed and we have seen an
uplift in diverse candidates selected. At least 28 successful external referrals were made
and 21 per cent were considered under-represented appointments. 50 per cent of the
referrals identify as female.
• our parental leave practice was audited across all countries with more than 100
employees to find we meet or exceed the median market practice
• early in career programs are now established and focus on regional priorities: NA
- technology to be launched early 2024, ANZ - commercial and operations and
Europe - operations
For interview panels:
• 100 per cent of senior leadership (CEO-1 and CEO-2) appointments had both
genders as part of interview panel
• 68 per cent of all roles had a woman on the interview panel
For shortlisting:
• 92 per cent of all senior leadership roles had at least one woman on the shortlist, and
78 per cent had at least two women.
• 51 per cent of all roles appointed had at least one woman on the shortlist.
Progress the senior leadership team beyond having not
less than 35 per cent of each gender represented.
Pursue a targeted program for manufacturing:
•
increase representation of women in supply chain
(manufacturing) leadership roles to 16 per cent
• establish Women in Manufacturing focus groups and
conduct a needs analysis to remove barriers for
women in manufacturing
• extend access to mentoring for women
in manufacturing
Conduct a global gender pay parity review using new
job architecture framework.
Have not less that 40 per cent of either gender
represented across the talent pool for executive (CEO-1)
succession and establish gender diversity in more than
70 percent of individual succession plans.
Develop a Global Parental Leave Guide to provide a
Nufarm minimum standard.
Facilitate the early-in career programs established and
develop a growth plan for 2025 -2028.
For interview panels: have one woman on selection
panel for all senior leadership appointments and
for 80 per cent of all other appointments across
the organisations
For shortlisting: have a gender-neutral shortlist for all
senior leadership roles with at least one woman on the
shortlist for 70 per cent of all other roles by 2025
These objectives are in addition to the ongoing activities
expected as part of Nufarm's inclusion and diversity
policy and current practices that are already yielding
meaningful results.
Nufarm Limited | Annual Report 2023
49
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Corporate governance statement continued
5 Promoting responsible and ethical behaviour
The policies and other documents described in this section are available in the corporate governance section of Nufarm’s website.
Code of conduct
Nufarm's code of conduct applies to all directors, employees,
contractors, agents and representatives of the company.
The speak up policy sets out protection that will be
afforded to whistleblowers as well as the option to make an
anonymous report.
The audit and risk committee oversees the application of the
speak up policy, including review of reporting trends.
The speak up policy was reviewed with updates approved by
the board in June 2022.
Modern Slavery Statement and human rights policy
Nufarm takes its human rights obligations and responsibilities
seriously and strives to protect 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 September 2022.
Nufarm believes that slavery, trafficking in persons and child
labour are very serious issues. The board approved the current
Modern Slavery Statement in March 2023. The statement
provides information on the steps taken to identify and reduce
the risk of modern slavery in our business, including our initial
focus on the most significant areas of our supply chain and
operations being our direct spend and employees in higher risk
countries and the actions that will be taken in the coming year.
The audit and risk committee receives updates on progress
against these actions.
Security trading policy and insider trading
The board has a security trading policy that covers dealings
by directors, KMP and relevant employees and complies
with the ASX Listing Rule requirements for a trading policy.
The security 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 security 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 in 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 security trading policy was last reviewed by the board in
November 2023.
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
• 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.
Our code of conduct outlines the expectations that guide the
daily actions of our employees. It requires Nufarm to promote
high standards of integrity by conducting our affairs honestly,
ethically and responsibly.
Material breaches of the code of conduct are reported to the
audit and risk committee.
The code of conduct was reviewed with updates approved by
the board in November 2020.
Anti-bribery and anti-corruption policy
Nufarm's anti-bribery and anti-corruption policy applies to all
directors, employees, contractors, agents and representatives
who must not offer, provide or receive, anything of value to
or from a public official or someone in business, either directly
or indirectly, to obtain or retain a commercial advantage or to
induce or reward the recipient, or any other person, for acting
improperly. While bribery may involve a monetary payment or
offer, it covers anything of value such as gifts, entertainment,
scholarships, donations and travel.
Material breaches of the anti-bribery and anti-corruption policy
are reported to the audit and risk committee.
The anti-bribery and anti-corruption policy was reviewed with
updates approved by the board in November 2023.
Speak up (whistleblower) policy
Nufarm has in place a speak up (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 speak up 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 and
anti-corruption 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
• any act which endangers the public or the financial system.
50
Nufarm Limited | Annual Report 2023
6 Risk management and internal control
6.1 Approach to risk management and internal
6.2 Risk management responsibilities
control
The board recognises that the effective identification and
management of risk reduces the uncertainty 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.
The risk framework, policies and procedures align to the
concepts and principles identified in the Australia/New Zealand
standard on Risk Management (AS/NZ ISO 31000:201809).
They 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, post-COVID-19
impacts, privacy and data breaches, increased geo-political
risk, sustainability and climate change.
The 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 executive risk and compliance committee continued
to meet during FY23 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 Executive, General Counsel and Company Secretary,
the Group Executive, Technology and Information Services and
the Group Executive, Growth and Sustainability. A standing
invitation to attend the meeting is issued to the Head of Risk,
Assurance and Compliance, Group ESG Manager and the
Global Lead – Health, Safety and Quality.
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 pages 25 to 31 of this report
and in the sustainability report.
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 and oversight
of evaluating the adequacy and effectiveness of the internal
control systems to the audit and risk 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 team, led by the Head of
Risk, Assurance 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.
Risk profiles for key operational business units have been
developed and were reviewed in FY23. These risk profiles
identify the:
• nature and likelihood of specific material risks
• key controls in place to mitigate and manage the risk
• the effectiveness of key controls
• responsibilities for managing these risks.
The audit and risk committee charter requires the
committee to review, at least every two years, the risk
management framework.
The risk management framework was reviewed in FY23. The
audit and risk committee 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.
Nufarm Limited | Annual Report 2023
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Corporate governance statement continued
6.3 Internal audit
6.4 CEO and CFO assurance
Nufarm adopts a co-sourced internal audit model, engaging
PWC which is accountable to both the audit and risk
committee and the CEO for the delivery of the internal audit
plan and work program. The Head of Risk, Assurance and
Compliance 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
• 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 and risk committee approves the internal
audit plan which is reviewed throughout the year to ensure it
remains appropriate.
The Head of Risk, Assurance and Compliance and PWC
reports directly to the audit and risk 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
audit and risk committee in the absence of management, in
closed sessions held at least twice per year. The internal audit
function had unfettered access to the chair of the audit and
risk committee.
Before the board adopted the 2023 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 a
sound 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.
52
Nufarm Limited | Annual Report 2023
7 Continuous disclosure and communications with shareholders
7.1 Continuous disclosure and market
7.2 Shareholder communication
communications
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 market disclosure committee is constituted by the chair 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 Executive, 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 announcements 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 September 2023. 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 AGM, as well as an opportunity to vote
on important matters affecting Nufarm and ask questions of
the board and key members of management. All resolutions at
the AGM are decided by a poll rather than a show of hands.
Copies of the chair’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 chair of the board and the chair of the people, safety and
remuneration committee are also accessible to shareholders
and institutional investors.
Nufarm Limited | Annual Report 2023
53
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Directors’ Report
The directors present their report together with the financial report of Nufarm Limited (‘the
company’) and of the group, being the company and its subsidiaries and the group’s interests in
associates and jointly controlled entities, for the financial year ended 30 September 2023 and the
auditors’ report thereon.
Directors
The directors of the company at any time during or since the end of the financial year are:
J Gillam (Chair)
G Hunt (Managing Director)
G Davis (resigned 15 November 2023)
A Gartmann
D Jones
P Margin (resigned 15 November 2023)
M McDonald
A Percy (appointed 1 July 2023)
L Saint
F Tripodi (appointed 19 June 2023)
Details of the qualifications, experience and current committee responsibilities and other directorships of the directors are set out
below. During the year the board implemented a new committee structure and membership effective from 1 July 2023. Unless
otherwise indicated, all directors held their position as a director throughout the entire period or from the date of the creation of a
new committee (if applicable) and up to the date of this report. Membership of the current and former committees is included below.
More information about the committee re-structure will be provided in the 2023 Corporate Governance Statement. In summary,
from 1 July 2023: the audit and risk committee replaced the former audit and risk and compliance committees; the people, safety
and remuneration committee replaced the former human resources committee and gained responsibility for occupational health and
safety; the sustainability and environment committee was newly convened; the innovation committee structure did not change but
membership did; and, the nomination committee did not change.
Name, qualifications and responsibilities
Tenure and experience
John Gillam
BCom, MAICD, FAIM
John Gillam joined the board on 31 July 2020 and was appointed chair on
24 September 2020.
John has extensive commercial and leadership experience from a 20-year career with
Wesfarmers where he held various senior leadership roles including chief executive officer
of the Bunnings Group, Managing Director of CSBP and chairman of Officeworks. John is
based in Australia.
Other directorships and offices (current and recent):
• Chair of CSR Limited (director since December 2017 and chair since 1 June 2018)
• Chair of BlueFit Pty Limited (since February 2018)
• Director of Clontarf Foundation (since 2017)
• Former director of the Heartwell Foundation (from 2009 to July 2023)
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 CEO 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.
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. Gordon in based in Australia.
Other directorships (current and recent):
Director of Healius Limited (formerly Primary Health Care Limited) (since August 2015)
Director of Midway Limited (since April 2016)
Independent non-executive chair
Member of the audit and risk committee
Member of the people, safety and
remuneration committee
Chair of the nomination committee
Greg Hunt
Managing director and CEO
Gordon Davis
BForSc, MAgSc, MBA
Independent non-executive director
Member of the audit and risk committee
Member of the people, safety and
remuneration committee
Member of the nomination committee
(Chair of the former risk and compliance
committee and member of the former audit
committee and the former human resources
committee until 30 June 2023)
54
Nufarm Limited | Annual Report 2023
Name, qualifications and responsibilities
Tenure and experience
Alexandra Gartmann
BSc (Resource & Environmental Management)
Independent non-executive director
Chair of the sustainability and
enviroment committee
Member of the audit and risk committee
Member of the nomination committee
(Member of the former risk and compliance
committee and member of the former audit
committee until 30 June 2023)
Dr David Jones
BA (Hons) Science, PhD
Independent non-executive director
Chair of the innovation committee
Member of the people, safety and
remuneration committee
Member of the nomination committee
Peter Margin
BSc(Hons), MBA
Independent non-executive director
Member of the audit and risk committee
Member of the innovation committee
Member of the nomination committee
(Chair of the former human resources committee
and member of the former risk and compliance
committee until 30 June 2023)
Marie McDonald
LLB(Hons), BSc(Hons)
Independent non-executive director
Chair of the people, safety and
remuneration committee
Member of the audit and risk committee
Member of the nomination committee
(Member of the innovation committee, the
former audit committee and the former risk and
compliance committee until 30 June 2023)
Alexandra Gartmann joined the board on 23 September 2022.
Alexandra brings over 25 years of deep industry experience in rural, agriculture and
community focused organisations and is the former CEO of the Rural Bank, a division of the
Bendigo & Adelaide Bank. Her executive career includes roles such as Bendigo & Adelaide
Bank Executive Marketing, Partnerships & Corporate Affairs and CEO of Rural Bank and
as CEO of the Foundation for Rural & Regional Renewal and The Birchip Cropping Group.
Alexandra serves on boards across agriculture, banking and the environment. Alexandra is
based in Australia.
Other directorships and roles (current and recent):
• Chair of the Victorian Agriculture & Climate Change Council
• Trustee of the Helen MacPherson Smith Trust
• Director of the Australian Farm Institute
• Presiding member of the Grains Research & Development Corporation (GRDC)
Selection Committee
• Director and Deputy Chair of the Australian Wool Testing Authority
• Director of the One Basin Cooperative Research Centre
• Former chair of the CSIRO Agriculture and Food Advisory Council
David Jones joined the board on 23 June 2021.
David has held chair and director roles in large global agricultural business. His experience
includes 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. David is based in Switzerland.
Other directorships (current and recent):
• Chairman of BigSis (since 2020)
• Former Chairman of Enko Chem Inc (July 2021 to June 2023)
• 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 executive chairman of Asahi Holdings (Australia) Pty Ltd, chief
executive/managing director of Goodman Fielder Ltd and before that chief executive/
managing director of National Foods Ltd. Peter is based in Australia.
Other directorships (current and recent):
• Deputy chairman of Bega Cheese Limited (since September 2020)
• Director of Costa Group Holdings Limited (since June 2015)
• Director of Golf Australia (since September 2023)
• Former chairman of Asahi Holdings (Australia) Pty Ltd (to December 2020)
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. Marie is currently a member of
the Melbourne University Law School Foundation Board. Marie is based in Australia.
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)
Nufarm Limited | Annual Report 2023
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Directors’ Report continued
Name, qualifications and responsibilities
Tenure and experience
Prof. Adrian Percy
BSc, MSc, PhD
Independent non-executive director
Member of the sustainability and
environment committee
Member of the innovation committee
Member of the nomination committee
Adrian Percy joined the board on 1 July 2023.
Adrian is currently the inaugural Executive Director of the NC Plant Sciences Initiative at
North Carolina State University. He has more than 30 years of experience in the agricultural
sector, with previous roles as Chief Technology Officer of UPL Ltd and Head of Research
and Development for the Crop Science Division of Bayer. In the latter role, he was a member
of their Executive Committee with responsibility for internal and open innovation activities
in the areas of crop protection chemistry and biologicals, as well as seeds and traits.
During his 25-year tenure at Bayer, he also held numerous positions in agricultural research
and development.
Adrian is a Venture Partner at Finistere Ventures LLC, a technology and life sciences venture
capital investor. Adrian is based in the United States.
Other directorships (current and recent):
• Director at BioLumic (US)
• Director at AgPlenus (US)
• Director at FA Bio (US)
• Director at Evogene (US)
Lynne Saint
BCom, GradDip Ed Studies, FCPA, FAICD
Independent non-executive director
Chair of the audit and risk committee
Member of the sustainability and
environment committee
Member of the nomination committee
Lynne Saint joined the board on 18 December 2020.
Lynne 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. Lynne is based in Australia.
Other directorships (current and recent):
(Chair of the former audit committee and member
of the former human resources committee until
30 June 2023)
• Director of Iluka Resources (since 24 October 2019)
• Director of Ventia Services Group Limited (since 1 July 2021)
Federico Tripodi
BAgronomic Engineering, MBA
Independent non-executive director
Member of the people, safety and
remuneration committee
Member of the innovation committee
Member of the nomination committee
Federico Tripodi joined the board on 19 June 2023.
Federico has close to three-decades of involvement in the agri-food sector with
his experience spanning general management, research and development, corporate
strategy and the commercialization of novel plant biotechnologies targeted for consumers
and farmers.
Federico is the Founder and CEO of Blacktop Holdings, a boutique venture lab that
offers strategic and operating partnership services to rapidly growing Ag Tech, Food and
Agribusiness companies, their investors and research institutions.
From 2016 to 2018, Federico served as the CEO of Calyxt Inc. (NASDAQ:CLXT), a company
that develops healthier food ingredients by applying a new breeding technology. Prior to
Calyxt, Federico worked at Monsanto Company for nearly two decades where his primary
focus was developing health, sustainability and renewable energy crop products in the United
States and Latin America. Federico is based in the United States.
Other directorships (current and recent):
• Chairman at the Agricultural Utilization Research Institute (AURI)
Company secretary
Kate Hall (LLB (Hons), BSc and LLM (IP)) was appointed company secretary on 20 April 2022. Kate has more than 20 years’
Australian and international experience as a general counsel and senior executive leading legal, intellectual property, governance,
risk and compliance functions.
56
Nufarm Limited | Annual Report 2023
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:
J Gillam
G Hunt
G Davis
A Gartmann
D Jones
P Margin
M McDonald
A Percy1
L Saint
F Tripodi2
Nufarm Ltd
Ordinary shares
Nufarm Finance
(NZ) Ltd
Step-up
securities
185,000
822,623
71,609
8,450
82,000
38,762
34,827
–
28,027
–
–
–
–
–
–
–
–
–
–
–
1 Adrian Percy was appointed as director on 1 July 2023.
2 Federico Tripodi was appointed as director on 19 June 2023.
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 listed below. During the year the board implemented a new committee structure and membership effective
1 July 2023. More information about the committee re-structure is provided in the 2023 Corporate Governance Statement.
Board
Audit and Risk1
People,
Safety and
Remuneration2
Innovation3
Sustainability and
Environment4
Nomination
John Gillam
Greg Hunt
Gordon Davis
Alexandra Gartmann
David Jones
Peter Margin
Marie McDonald
Adrian Percy5
Lynne Saint
Federico Tripodi6
A
8
8
8
8
8
8
8
2
8
2
B
8
8
8
8
8
8
8
1
8
2
A
1
–
7
7
–
3
7
–
4
–
B
6
6
7
7
–
5
7
–
7
–
A
1
–
3
–
1
3
1
–
3
1
B
4
4
3
3
1
3
4
–
3
1
A
–
–
–
–
3
3
2
1
–
1
B
–
3
3
2
3
3
2
1
2
1
A
–
–
–
1
–
–
–
1
1
–
B
1
1
–
1
–
1
–
–
1
–
A
7
–
7
7
7
7
7
1
7
2
B
7
7
7
7
7
7
7
–
7
2
1 Includes audit & risk committee meetings since 1 July 2023, and meetings of the previous 'audit committee' and 'risk & compliance committee' meetings up to 30 June
2023 (when those committees ceased)
2 Includes people, safety & remuneration committee since 1 July 2023, and meetings of the previous 'human resources committee' up to 30 June 2023 (when that
committee ceased)
3 The innovation committee structure did not change and was in place for the full year, membership of the committee changed from 1 July 2023
4 The sustainability and environment committee commenced 1 July 2023
5 Adrian Percy commenced as a director on 1 July 2023
6 Federico Tripodi commenced as a director on 19 June 2023
Column A: indicates the number of meetings held during the period of each director’s board tenure and formal membership of a committee.
Column B: indicates the number of meetings attended by each director (whether or not the director was a member of the committee).
Nufarm Limited | Annual Report 2023
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Directors’ Report continued
Principal Activities and Changes
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 Operating and Financial Review accompanying this Directors’ Report.
Nufarm employs approximately 3,070 people at its various locations in Australasia, the Americas, Europe, Africa and the
Middle East.
The company is listed on the Australian Securities Exchange (symbol NUF). Its head office is located at Laverton in Melbourne.
Results
The net profit/(loss) attributable to members of the group for the year ended 30 September 2023 is $111.1 million. The comparable
figure for the year ended 30 September 2022 was $107.4 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 19-30 and
forms part of this Directors’ Report.
Dividends
The following unfranked dividends have been paid, declared or recommended since the end of the preceding financial year.
Declared final dividend (unfranked)
Paid interim dividend (unfranked)
Paid final dividend (unfranked)
Cents per share
Total amount $000
Payment date
5.0
5.0
6.0
19,038
15 December 2023
18,997
9 June 2023
22,795
9 December 2022
Nufarm Step-up Securities distributions
The following distributions have been paid or proposed since the end of the preceding financial year.
Proposed and unrecognised at reporting date
Distribution for the period 16 October 2023 to 14 April 2024
Distribution for the period 17 April 2023 to 16 October 2023
2023
Distribution for the period 17 October 2022 to 16 April 2023
Distribution for the period 19 April 2022 to 16 October 2022
Distribution
rate (annualised)
Total amount $000
Payment date
8.32%
7.66%
7.37%
4.86%
10,413
9,587
15 Apr 2024
16 Oct 2023
9,227
6,055
17 Apr 2023
17 Oct 2022
State of Affairs
The state of the group’s affairs are set out in the Operating and Financial Review accompanying this Directors’ Report.
Events subsequent to reporting date
On 16 October 2023 a distribution was paid by Nufarm Finance (NZ) Ltd on the Nufarm Step-up Securities. The distribution rate
was 7.66 (annualised) per cent resulting in a gross distribution of $9,587 million.
On 15 November 2023 the directors declared a final and unfranked dividend of 5.0 cents per share which is payable on
15 December 2023.
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 their opinion, has significantly affected, or may significantly affect in future years, Nufarm’s operations of the state of
Nufarm’s affairs.
Remuneration Report
The Remuneration Report set out on pages 60-83 forms part of this Directors’ Report.
58
Nufarm Limited | Annual Report 2023
Environmental performance
Nufarm UK Ltd incurred a GBP300K fine in August 2023 after pleading guilty to a breach of the Control of Major Accidents Hazards
Regulations in the UK 2015. The group did not incur any other material 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.
Non-audit services
During the year KPMG, the company’s auditor, has performed certain other services in addition to their statutory duties. Details of
the audit fee and non-audit services are set out in note 37 on page 153 to the financial report.
The board has considered the non-audit services provided during the year by the auditor and is satisfied that the provision of
those non-audit services during the year by the auditor is compatible with, and did not compromise, the auditor independence
requirements of the Corporations Act 2001 for the reason that all non-audit services were subject to the corporate governance
procedures adopted by the company and have been reviewed by the audit and risk committee to ensure they do not impact the
integrity and objectivity of the auditor.
Indemnities and insurance for directors and officers
The company has entered into insurance contracts which indemnify directors and officers of the company, and its controlled
entities, against liabilities. In accordance with normal commercial practices, under the terms of the insurance contracts, the nature of
the liabilities insured against and the amount of premiums paid are confidential.
An indemnity agreement has been entered into between the company and each of the directors named earlier in this report. Under
the agreement, the company has agreed to indemnify the directors against any claim or for any expenses or costs, which may arise
as a result of the performance of their duties as directors 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 84 and forms part of the Directors’ Report for the financial year
ended 30 September 2023.
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
Greg Hunt
Director
Melbourne, 15 November 2023
Nufarm Limited | Annual Report 2023
59
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Remuneration Report
Introduction from the chair of the People, Safety and Remuneration committee
Dear fellow shareholders,
As chair of Nufarm’s People, Safety and Remuneration (PSR)
committee, I am pleased to present the remuneration report for
the financial year ended 30 September 2023 (FY23).
Response to First Strike Against Remuneration Report
At the FY22 AGM, we received a ‘first strike’ against the
remuneration report. Additionally, 51.16% of shareholders
voted against the grant of equity under the Executive Incentive
Plan (EIP) to our Managing Director and Chief Executive
Officer (CEO).
While disappointing, we recognised the importance of this
feedback and undertook extensive consultation with our
shareholders and their representatives. Throughout the year,
we listened to a wide cohort of stakeholders, and while we
received strong support from a number, we were conscious of
the concerns of others.
Of particular concern was the structure of the EIP – with
some stakeholders expressing a desire for increased long-term
performance alignment, a preference for tighter linkage of non-
financial metrics to quantitative performance outcomes, and
concerns regarding the binary approach to the profit gateway.
In light of this feedback, the PSR committee has spent
significant time during the year reviewing and re-setting
the remuneration arrangements for Nufarm’s executive Key
Management Personnel (KMP). Our focus has remained on
maintaining the alignment between the rewards we provide to
attract, retain and motivate our key people, and the delivery of
sustainable financial returns to our shareholders.
While the board continues to believe the objectives behind the
introduction of the EIP remain appropriate for Nufarm, we have
made changes in response to shareholder concerns.
The key changes we have made to the FY23 EIP are:
• Introduction of a relative total shareholder return measure,
which applies to 43% of any performance rights granted to
the CEO (30% for other executive KMP);
• Introduction of long-term financial measures to drive
performance in the Seed Technologies and Crop Protection
businesses, which are in line with our published FY26
strategic aspirations. These measures apply to 46% of
any performance rights granted to the CEO (60% for both
the Chief Financial Officer (CFO) and the Group Executive
Supply Chain Operations (GESC));
• Modest adjustments were made to remuneration
arrangements to reflect the changes, which were set with
reference to a thorough market review to ensure a market
appropriate position; and
• A changed approach to the profit gateway such that,
if the profit hurdle is not met at Year 1, any awards
due to be made based on scorecard outcomes will be
made in performance rights (with no portion in cash), to
maintain a link to our long-term shareholder and strategic
performance targets.
We have also sought to enhance the transparency of our
disclosures in this Remuneration Report.
Finally, we will be re-presenting to shareholders for approval the
FY22 EIP performance rights award to our CEO, reflecting the
revised FY23 EIP design. Details will be available in our Notice
of Meeting.
While the board and PSR committee believe that remuneration
awards and the changes introduced in FY23 are appropriate,
we will continue to consult with our investors on the
effectiveness of our remuneration policy, framework and
governance to ensure they continue to meet the needs of the
business and our stakeholders.
Executive remuneration outcomes for the 2023 year
FY23 has been a challenging year for the industry and, despite
this, Nufarm had a sound result overall.
Following a record year in FY22, our financial performance in
FY23 remained strong. We reported revenue of $3.5 billion and
statutory Net profit after tax of $111 million, up 3% on our
FY22 year. Underlying EBITDA of $438 million, was 2% below
our FY22 year and was negatively impacted by widespread
channel destocking and falling active ingredients prices in our
crop protection business.
The contributions made by our people in creating sustainable
long-term returns for our shareholders resulted in several
significant accomplishments during FY23 including strong
growth in our base Seed Technology business; strong growth
in Omega-3, including the planting of our first hybrids and
expansion of our certified grower base and farm contracting;
and strong growth in our Bioenergy businesses, including the
first delivery of Carinata for processing into biofuel. Despite
the more difficult trading environment, we also achieved a
solid result in Crop Protection, continuing to invest in our new
product pipeline as well as plant and supply chain efficiency
with significant investment into Wyke and Chicago Heights.
The company’s financial performance has been reflected in
the EIP outcomes for executive KMP. Each of the FY23
EIP award measures was assessed and two of the financial
metrics were above threshold, while one was below. No
discretion was exercised to adjust the timing or amount of the
outcome. Taking into account assessment of Non-financial
individual goals, the EIP award outcome for FY23 was 65% of
potential target for all executive KMP, including the CEO.
The final legacy LTI (FY21) plan was tested on 30 September
2023: the 3-year return on funds employed (ROFE) target was
achieved; and the relative total shareholder return (RTSR) target
was achieved, consequently 85% of the incentive rights vested.
Further details of remuneration outcomes are set out in section
5 of the Remuneration Report
60
Nufarm Limited | Annual Report 2023
Director fees
In July 2023 we restructured the sub committees of the
board. A new sustainability and environment committee was
created, the former risk and compliance committee was
dissolved, and its responsibilities were allocated among other
committees. This resulted in an increase to some committee
fees, as follows:
Committee
Audit & risk
People, safety & remuneration
Fee increase ($)
Chair
Member
$10,500
$6,000
$5,250
$3,000
There were no changes to board member fees, which have
remained constant since 1 August 2018.
In summary
The board believes the remuneration outcomes reflect the
strong financial results for FY23. The future prospects for our
business are bright and I believe we have the right team to
achieve our growth aspirations.
Thank you to my fellow PSR committee members and, in
particular, to Peter Margin for his past leadership of the
committee over 11 years.
I invite you to review Nufarm’s full remuneration report and
thank you, our shareholders, for your ongoing support of
Nufarm, its purpose and vision.
Marie McDonald
Chair – People, Safety and Remuneration Committee
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Nufarm Limited | Annual Report 2023
61
Remuneration Report continued
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 Key Management Personnel (KMP) for the financial year ended 30 September 2023 (FY23). The report has been prepared in
accordance with section 300A of the Corporations Act 2001 (Cth) (Corporations Act).
Contents
Introduction
1 KMP in FY23
2 Response to the ‘first strike’ and evolution of the EIP design
3 Our Remuneration Philosophy
4 Executive KMP remuneration framework
5 FY23 company performance and remuneration outcomes
6 Remuneration governance
7 Executive KMP contractual agreements and cessation
of employment
8 Non-executive director remuneration
9 Statutory remuneration tables
10 Equity instruments held by directors and
disclosed executives
11 Other statutory disclosures
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1 KMP in FY23
KMP are those individuals with authority and responsibility for planning, directing, and controlling the activities of the Group directly
or indirectly, being non-executive directors (NEDs); executive directors (the CEO); and other executives considered to be KMP. The
CEO and other executive KMP are referred to collectively as ‘executive KMP' throughout this report.
For FY23, Nufarm’s KMP were:
NEDs
Name
John Gillam
Gordon Davis1
Position
Chair, independent non-executive director
Independent non-executive director
Alexandra Gartmann
Independent non-executive director
David Jones
Peter Margin1
Marie McDonald
Lynne Saint
Federico Tripodi
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Independent non-executive director
Independent non-executive director
Independent non-executive director
Independent non-executive director
Independent non-executive director
Adrian Percy
Independent non-executive director
Executive KMP
Greg Hunt
Managing director, and CEO (CEO)
Term
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Part year
Appointed on 19 June 2023
Part year
Appointed on 1 July 2023
Full year
Full year
Chief Financial Officer (CFO)
Group executive supply chain operations (GESC)
Full year
Paul Townsend
Dave Allen
1 Gordon Davis and Peter Margin resigned effective 15 November 2023
62
Nufarm Limited | Annual Report 2023
2 Response to the ‘first strike’ and evolution of the EIP design
In FY22 we introduced a new executive remuneration approach, replacing traditional short- and long-term incentive plans with a
single variable reward program, the Executive Incentive Plan (EIP). Under the EIP, performance is measured over one year against a
scorecard, following which awards are made in both cash and performance rights. Cash awards are paid immediately following the
performance assessment. Performance rights may vest after a further three years, subject to satisfactory achievement of additional
long-term performance targets.
While there was strong support from pockets of our shareholders, others held concerns around the EIP design, resulting in a ‘first
strike’ at the FY22 AGM. Extensive stakeholder feedback sessions with our key stakeholders were undertaken to understand what
worked well and what needed improvement. A broad range of views were expressed, and valuable suggestions provided.
We have outlined below a summary of key concerns raised and our response:
Concerns expressed
Response
Detail
Lack of long-
term EIP financial
performance measures
for equity component
Introduced a
long-term relative
Total Shareholder
Return (rTSR)
performance measure
The revised EIP structure incorporates an rTSR measure, to be assessed against the
companies in the S&P/ASX200.
rTSR provides alignment with the shareholder experience and ensures executives only benefit
from the award where shareholder outcomes are in line with, or outperform, ‘the market’.
The rTSR measure will be weighted at 43% for the CEO and 30% for other executive KMP.
See section 4.4 for further details.
Disclosure of EIP non-
financial measures was
unclear, resulting in them
being seen as ‘a normal
part of executive KMP
day job’
Introduction of
strategic financial
measures more
clearly aligned with
Nufarm’s published
FY26 aspirations
We have introduced long-term strategic financial measures for the Seed Technologies and
Crop Protection businesses, in line with our published FY26 strategic aspirations, first
announced to ASX on 3 February 2022.
These measures were selected as they are integral to the success of our FY26 aspirations,
and will align executive remuneration outcomes with shareholder expectations.
These now make up 46% of the CEO’s performance rights award (60% for both the CFO and
the GESC), and the targets set are aligned to the aspirations already published for FY26.
The previously disclosed ESG assessment remains, but we have specified the weighting of
the measure (11% for the CEO, 10% for both the CFO and the GESC), and note the targets
are aligned to the metrics published in our sustainability report.
See section 4.4 for further details.
Impact of the ‘binary’
profit gateway potentially
resulting in no incentives
through parts of
the cycle
Amendment of the
gateway approach
The previous profit gateway has been modified to address stakeholder concerns that its
effect could be such that no ongoing shareholder-linked awards might be available to
participants. This was considered a genuine retention and motivation risk, and not aligned
to long-term shareholder interests.
The binary profit gateway was changed to an Annual Cash Award Gateway.
From FY23, if the Annual Cash Award Gateway is not met, no cash awards will be provided.
Instead, any awards payable as measured against the scorecard and reflecting the nil profit
outcome will be delivered in performance rights and subject to the longer-term performance
hurdles, maintaining focus on our long-term strategic objectives.
See section 4.4 for further details.
Quantum of CEO’s
remuneration package
at maximum outcome
was not discounted
and market positioning
for executive
KMP remuneration
was unclear
Market review for
executive KMP has
been undertaken,
adjustments made,
and transparency of
disclosure increased
In response to shareholder concerns regarding the CEO’s remuneration quantum, a thorough
market remuneration review was undertaken for executive KMP in FY23. The review
confirmed that our current market positioning for the CEO and CFO was at approximately
median for fixed remuneration and below median for total remuneration (at both target and
maximum). For the GESC, who is based in the UK, valid UK market data for positions
matched to the GESC position with similar working capital and logistics scope was not
available. Therefore the company determined a remuneration level utilising internal relativities
and survey data for positions in larger and smaller companies.
To reflect the change to the long-term performance conditions of the revised EIP, and to
maintain a competitive market position, we made the following adjustments to executive
KMP remuneration:
• For the CEO, a 4% increase in EIP opportunity, all of which was allocated to
performance rights.
• For the CFO and GESC, one-off grants of restricted stock will be made following
publication of the FY23 results. The grants of $120,000 and $100,000 worth of Nufarm
restricted equity (respectively) will vest after 3 years.
To provide a better understanding of Mr Hunt’s package relative to ASX peers, we
now disclose:
• Remuneration opportunity at target and maximum outcomes
•
Information regarding our remuneration benchmarking approach and the CEO’s position.
See section 4.3 for further details.
Nufarm Limited | Annual Report 2023
63
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Remuneration Report continued
Concerns expressed
Response
Detail
Given the non-traditional
executive remuneration
approach, a minimum
shareholding expectation
should be in place
Extension of the
Non Executive
Director Minimum
Shareholding policy to
executive KMP
Nufarm’s Minimum Shareholding policy will be extended to apply to executive KMP and other
senior executives.
See section 6.3 for further details.
Approach to the CEO’s FY22 EIP award
At the 2022 AGM our resolution to make a grant of rights to the Managing Director and CEO under the FY22 EIP did not receive
majority shareholder support. In light of this outcome, the board determined the most appropriate action would be to re-present an
amended FY22 award to shareholders for approval at the FY23 AGM. The new FY22 performance rights award will be presented
to shareholders under the terms of the revised FY23 EIP plan rules, but as though it had been granted following FY22 (i.e., it will be
assessed at end of FY25). Details will be provided in the Notice of Meeting for the forthcoming Annual General Meeting.
FY22 Executive incentive plan updates for CEO
FAR
EIP % At target $
At maximum
$
Total award
$
EIP Award as
a % of target
potential
EIP as % of
FAR
G Hunt
Original FY22 EIP plan
1,359,278
130%
1,767,061
2,429,709
2,429,709
Updated FY22 EIP plan
1,359,278
134%
1,821,433
2,504,470
2,504,470
138%
138%
179%
184%
FY22 Executive incentive plan updates for CEO
Total award $
To be paid in cash
in December 2022
To be converted
into rights with
vesting date
30 September
20251
Equivalent
number of rights
using 5-Day
VWAP post
FY22 results
Estimated fair
value of rights
using 30 September
2023 valuation
G Hunt
Original FY22 EIP plan
Updated FY22 EIP plan
2,429,709
2,504,470
809,822
809,822
1,619,887
1,694,648
272,227
284,791
1,249,522
1,007,163
1 The amounts to be converted into rights are converted by dividing this amount by the 5-Day VWAP of the Nufarm share price following the announcement of the audited
financial statements.
3 Our Remuneration Philosophy
Link between business strategy and remuneration
Ambition: Nufarm’s ambition is to be an agricultural innovator developing integrated solutions for our customers. Using technology
and innovation, we are developing solutions across each of our business segments and platforms.
Business strategy: We remain focussed on core crops and key geographies where we believe we can drive better returns and
serve our customers. We have ten core crops and seeds, across key regions of North America, Europe, APAC and South America.
The agricultural industry is evolving, and Nufarm is well positioned to support our customers and the industry through change, with
innovation and technology as the cornerstones of our future. We have growth platforms in hybrid seeds, bioenergy, nutritionals,
crop protection, biologicals and disruptive technologies.
Our platforms and solutions help to:
• improve farm productivity and strengthen agriculture’s resilience.
• protect crops and soils to reduce food loss and enable practices such as no-till farming.
• remove carbon from the air and reduce pressure on oceans for marine sources of omega-3 oil.
• provide farm inputs that safeguard the supply of affordable food, fibre and fuel.
Remuneration strategy: To attract, retain and motivate global talent that delivers our business strategy and contributes to
sustainable, long-term growth in:
Driving a pay for
performance culture
where financial rewards
are directly linked to
short- and long-term
company performance
Rewarding and retaining
participants, and attracting
global talent
Addressing the cyclical
nature of the sector
Distributing awards as
a mixture of cash and
performance rights
Including annual financial
and non-financial targets
64
Nufarm Limited | Annual Report 2023
4 Executive KMP remuneration framework
FAR
EIP
Purpose
Type
Attract, motivate, and retain highly
skilled employees.
Reward achievement if financial and personal/team strategic objectives are met and
align to long-term shareholder value creation.
Base salary plus
superannuation/pension.
If Annual Cash Award Gateway (as defined in section 4.4) is...
Payment method
Cash, paid monthly plus
contributions to superannuation/
pension plans, as applicable.
Link to
remuneration
principles
Cash remuneration levels are
set with reference to market
benchmarking as well as
internal relativity, performance,
and experience.
...met:
...not met:
• Cash: 32% of award for CEO (33.3%
• Performance rights: 100% of award
other executive KMP)
• Performance rights: 68% of award for
CEO (66.7% for other executive KMP)
Award quantum is determined based on an assessment of performance over Year 1
against a combination of financial and non-financial performance measures.
• Cash component (if any): Paid in cash annually following release of audited
financial statements.
• Performance rights component: Granted following release of audited financial
statements, other than for CEO where the grant is subject to shareholder approval
at next AGM. Vesting is subject to meeting performance conditions at Year 4. Vested
performance rights are converted to shares.
EIP remuneration levels are set with reference to market benchmarking and seek to
ensure that the balance between fixed and at risk pay reflects both short- and long-term
Nufarm objectives.
Outcomes are based on short-term/long-term financial and non-financial
performance measures.
Nufarm Limited | Annual Report 2023
65
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Long-term performance periodInitial performance periodYear 1Year 2CashPerformance Rights – subject to further long-term performance measurement(subject to satisfaction of Annual Cash Gateway)(where the Annual Cash Gateway is not met, all of the award earned is granted as performance rights)Year 3Year 4Fixed Annual Remuneration(FAR)Executive Incentive Plan(EIP)
Remuneration Report continued
4.1 Executive KMP pay mix at target and maximum
The graphic below shows the remuneration mix for executive KMP. The variable ‘at risk’ components of EIP (including potential
performance rights) are expressed at target and maximum. The minimum that can be earned under the EIP (if performance is
considered unacceptable) is zero. Each component is determined as a percentage of the total remuneration package.
The CFO and GESC will receive one-off grants of restricted stock following publication of the FY23 results. The grants of $120,000
and $100,000 worth of Nufarm restricted equity (respectively) will vest after 3 years. Given the one-off nature of these grants, their
impact is not reflected in the framework table above, but has been considered as part of the FY23 remuneration disclosures in
section 5 of this remuneration report.
4.2 Setting competitive remuneration levels
FAR and total remuneration levels are reviewed annually for changes in role scope, promotion, internal relativities, and significant
market changes. With the assistance of an independent remuneration consultant, Guerdon Associates, remuneration benchmarking
was conducted in FY23.
A subset of peers within the ASX200 companies with similar characteristics to the Nufarm business was chosen, referencing
companies total assets, net assets, revenue, EBITDA, market capitalisation and operational scope. The comparators included
companies involved in agriculture and other cyclical industries, with significant capex requirements and complexity, and with
international manufacturing/processing operations. Nufarm targets the median of this group as its preferred market position for both
fixed and total remuneration.
4.3 Fixed Annual Remuneration
Nufarm offers market competitive pay rates to attract and retain our experienced and skilled management team. Remuneration
levels are set based on role size, complexity, scope, and leadership accountability, and with reference to our remuneration
benchmarking comparator group. Nufarm remains committed to the principle of pay equity.
Having reviewed FY22 market data and incumbent performance, the board considered it appropriate to grant the CEO and CFO,
5.0% and 3.0% FAR increases (respectively), effective from 1 October 2022.
An independent market remuneration review undertaken during FY23 showed that both CEO and CFO was at approximately the
median for fixed remuneration and below median for total remuneration (at both target and maximum). For the GESC, who is based
in the UK, valid UK market data for positions matched to the GESC position with similar working capital and logistics scope was not
available. Therefore the company determined a remuneration level utilising internal relativities and survey data for positions in larger
and smaller companies.
After taking into account the adjustments referred to in section 2, the board considered that an increase to executive KMP FAR/
base salary for FY24, would be appropriate. Details of the increases are outlined below:
Executive KMP
Currency
FY23 FAR ($)
FY24 FAR ($)
Increase (%)
Target EIP (%)1
CEO
CFO
GESC
AUD
AUD
GBP
1,427,243
1,484,333
794,980
400,000
834,729
416,000
4.0%
5.0%
4.0%
134.0%
100.0%
85.0%
1 Percentage of fixed remuneration for incentive opportunities.
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43%35%50%42%54%46%18%21%17%19%15%17%39%44%33%39%31%37%Fixed remuneration (cash)EIP cash incentiveEIP performance rightsCEO, targetCEO, maximumCFO, targetCFO, maximumGp Exec, SCO, targetGp Exec, SCO, maximum0102030405060708090100
4.4 Executive incentive plan (EIP) description
The EIP is a single variable reward plan that provides participants the opportunity to earn shareholder aligned awards, across both
the short- and long-term.
The revised EIP takes into account the feedback received from key investors and proxy advisors after the AGM held in February
2023 and has been adapted from the previous version to incorporate longer-term financial measures, and reduce the weighting of
non-financial measures. The revised EIP applied in FY23 (and subject to shareholder approval, will apply retrospectively to the CEO’s
FY22 EIP performance rights award).
We note the following key features for FY23:
(i) Award Measures requiring testing annually against metrics made up of 75% financial and 25% non-financial at target to
determine the amount of total award that will be made;
(ii) An Annual Cash Award Gateway that determines if any cash payments will be made, or if incentive awards will be entirely
granted as performance rights. If the gateway has been met, for the CEO the award is delivered in a combination of 32% cash
and 68% performance rights (for other executive KMP 33.3%/66.7%); and
(iii) Performance Rights Vesting Measures requiring testing three years after any awards are granted, against financial and
non-financial objectives, with financial metrics making up approximately 90% of the total weighting.
The following diagram shows how these features apply in determining the EIP award value:
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The following table outlines the key terms of the FY23 EIP:
What is the EIP’s aim?
The plan rewards achievement against a combination of financial and non-financial performance measures that are
aligned to the creation of shareholder value over both the short- and longer-term.
In Year 1, primary emphasis is placed on profitability, return on investment, and cash flow. There are also non-financial
measures at Year 1 which focus our executive KMP on executing the most critical objectives aligned to the company’s
strategy. These measures determine the amount of cash and performance rights which may be awarded at the end of
Year 1.
Performance rights are subsequently tested at the end of Year 4, against a market measure and other strategic
measures supporting our long-term objectives. The majority of strategic measures are tied to clear financial objectives.
How is the EIP
opportunity established?
The EIP target is set annually as a percentage of FAR (CEO, CFO) or base salary (GESC). This is pro-rated for any
relevant changes determined during the year.
Who participates in the
EIP and what is the “at
risk” amount as a %
of FAR?
CEO
CFO
GESC
134% of FAR at target / 184.25% of FAR at maximum
100% of FAR at target / 137.5% of FAR at maximum
85% of base salary at target / 116.87% of base salary at maximum
What measures are used
in the plan?
The EIP consists of:
(i) Award Measures: tests four measures over Year 1, each with an equal weighting at target. The Award Measures
include three financial measures and one non-financial measure. These measures determine the size of the
Total Award.
(ii) Annual Cash Award Gateway: tests one financial measure, uEBIT, over Year 1. This measure determines
whether the award is eligible for a cash payment or not.
(iii) Performance Rights Vesting Measures: tests a number of financial and non-financial long-term measures
at the completion of the performance period (Year 4). These measures determine whether performance rights
will vest.
Nufarm Limited | Annual Report 2023
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Target AwardOpportunityAwardMeasuresx=Annual Cash AwardGatewayAward deliveryPerformanceRights Vesting MeasuresuEBITCashMetNot MetPerformance RightsPerformance RightsAUD equivalent based on contracted EIP % of FARFinancial and Non Financial, measured over three years (Years 2–4)uEBITANWC/SalesROFENon-financialTotal Award
Remuneration Report continued
What are the
Award Measures?
Elements – Award Measures
Weighting Measured by
Profit
25%
Group underlying EBIT (uEBIT)
Return on Investments
25%
Average group underlying return on funds employed (ROFE)
Cash flow
25%
Average net working capital divided by sales (ANWC/Sales)
Non-financial
25%
Defined non-financial strategic or operational goals as determined by
the board for each executive KMP. These include:
• Safety and Environment
• Sustainability
•
Improved supply chain capability and outcomes
• Strategic growth for the Crop Protection and Seed
Technologies business
•
Improved capital structure with more appropriate working capital
debt facilities
Is there a
minimum threshold for
EIP payment?
All Award Measures have a minimum threshold that must be achieved in order to be considered for an award to
be made.
The previous “binary” profit gateway has been removed. Refer below for detail of the new Annual Cash
Award Gateway.
How are the Award
Measures measured?
Each of the Award Measures is comprised of three performance levels: minimum, target and maximum. The
minimum, target and maximum values for financial performance measures are set, reviewed, and approved by the
board annually for each executive KMP.
Performance Levels
Minimum
Target
Maximum
Minimum
Target
Maximum
The minimum performance outcome that must be achieved before any EIP award
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 outstanding performance.
uEBIT & Return
on investments
85% of budget*
Cash flow
Non-financial
105% of budgeted*
ANWC/Sales
Determined by the
board based on
individual
performance
100%
120%
100%
95%
*Annual budgets are reviewed and approved by the board to ensure they demonstrate growth potential and
achievement of strategic milestones.
Once performance levels are assessed, EIP Awards are calculated based on payout slopes with a minimum award 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
uEBIT & Return
on Investments
Cash flow
Non-financial
25% of EIP target payment
100%
150%
0% to 100% of EIP
target payment
Are payments in cash
or equity?
The Annual Cash Award Gateway determines whether any awards are eligible to be paid in cash:
•
•
If the Annual Cash Award Gateway is met: a portion of the total EIP Award (CEO: 32%, CFO/GESC: 33.3%)
is awarded as cash at the end of Year 1, following the release of the audited financial statements. The remaining
(CEO: 68%; CFO/GESC: 66.7%) is awarded as performance rights, subject to continued performance and
vesting conditions.
If the Annual Cash Award Gateway is not met: the total EIP Award is awarded as performance rights, subject
to continued performance and vesting conditions.
How are the
number of performance
rights determined?
The number of performance rights to be granted will be determined using the value of the relevant portion of the Total
Award divided by the 5-day VWAP following the release of the preliminary final report in November 2023.
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What are the
performance rights
vesting measures?
At the end of the vesting period, the following performance measures will apply:
Weighting
CEO
43%
CFO
30%
GESC
Target
30%
Percentile rank
% vesting
Measure
Relative TSR (rTSR)
Measured against the ASX 200
This peer group was selected
as we believe investors have a
choice to allocate capital across
all the sectors and companies
within it.
Revenue and margin growth in
our Crop Protection segment
23%
20%
30%
Revenue, margin growth in our
Seed Technologies segment
23%
20%
-
ESG Outcomes
11%
10%
10%
Less than the
50th percentile
0%
50th percentile
50%
Between the
50th and the
75th percentile
75th percentile
or above
Straight line vesting
between 50%-100%
100%
In line with publicly disclosed FY26
aspirations, revenue of $3.8-$3.9b by FY26
and overall margin improvement since
announcement of FY22-26 aspirations. Note:
Crop Protection margin growth targets are
commercially sensitive and will be disclosed
retrospectively at the time of testing.
In making the assessment, the board will
also have regard to the performance of
the Crop Protection segment relative to the
overall growth/contraction of the global crop
protection market.
In line with publicly disclosed FY26
aspirations, revenue of $600 to $700 million
by FY26, EBITDA margin of 20% to 25%
by FY26.
On track to meet the targets applicable at
2026 or beyond as published in our 2023
sustainability report, including 30% reduction
in emissions from our manufacturing sites
by 2030.
Average NWC/sales
Leverage outcomes
Strategic investments and
delivery of planned
outcomes across our
global crop protection
manufacturing platforms.
-
-
10%
10%
ANWC/sales 35-40% on a three-
year average.
10%
Statutory leverage 1.5-2 times on a three-
year average.
-
20%
Delivery of strategic investments (CapEx) that
support the growth in volume and margin
from our global crop protection manufacturing
assets in line with Budget FY24-26.
rTSR will be measured over the three-years following Year 1 (i.e., Years 2 -4). rTSR performance is calculated by an
independent external provider and is subject to board confirmation and discretion.
Strategic performance measures will be assessed by the board at the end of Year 4. Vesting cannot exceed 100%.
The board will provide shareholders with a clear rationale as to the final determination of vesting outcomes following
its assessment of performance at the end of the performance period.
What are the dividend
and voting rights?
Rights do not carry any dividend or voting rights.
Shares allocated on vesting of Rights carry the same dividend and voting rights as other shares issued by
the company.
When do the
performance rights vest?
At the end of the Year 4, the performance rights are tested against the objectives described above. Withholding a
large portion of the award as rights with service and performance measures ensures the participants maintain a focus
on both short- and long-term company performance as well as alignment with shareholder experience. Awards that
do not vest will lapse.
What happens if
the performance rights
vesting measures are
not met?
There is no retesting if the performance condition is not met at the end of the performance period. Any proportion of
the performance rights that have not met the performance required to vest at the end of the three-year performance
period will lapse and consequently be forfeited as a result.
Nufarm Limited | Annual Report 2023
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Remuneration Report continued
Is there a “claw back”
provision in the plan?
The Nufarm board has absolute discretion regarding the amount and timing of any EIP awards. The EIP is governed
by the overarching Nufarm Executive Incentive Plan rules.
What happens if
the executive KMP
leaves Nufarm?
Within the remuneration framework, under specific circumstances, the board has discretion to lapse or enforce
forfeiture (or potentially cash repayment where an award has been issued as cash or converted into cash) of any
rights, options or shares issued under the terms of the relevant plans.
Unless the board determines otherwise:
(a)
if employment is terminated for cause (as defined below) or the executive KMP resigns (or gives 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 wilful misconduct;
–
is seriously negligent in the performance of their duties;
– committed a serious breach of their 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.
4.5 Legacy long term incentive (LTI) plan
Whilst the previous STI and LTI plans were replaced with the EIP in FY22, some rights awarded under the Legacy FY21 LTI plans
were on foot in FY23 and have been performance tested to 30 September 2023. Key terms of the awards can be found in the 2021
Remuneration Report and Notice of Meeting. The outcome is described in section 5.
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Nufarm Limited | Annual Report 2023
5 FY23 company performance and remuneration outcomes
Nufarm’s financial performance, share price and dividends over the past five years are summarised below:
Performance measures
FY23
FY22
FY21
Sept 202,3
FY203,4
Continuing group1
Earnings
Underlying EBITDA5
Underlying EBIT5
Underlying NPAT5
ANWC/Sales6
ROFE achieved7
Shareholder value
TSR8
Dividends declared
Closing share price
$m
$m
$m
%
%
%
Cents
$
438.2
249.8
122.2
41.9
8.8
27.0
10.0
4.75
446.8
236.7
133.2
28.3
9.5
24.8
10.0
5.00
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
1 Performance measures for FY20 are presented on a continuing operations basis.
2 'Sept 20' is presented for the 2 months ended 30 September 2020.
3 Performance metrics for Sept 20 and FY20 have not been restated for the change in accounting policy with respect to the IFRIC agenda decision on cloud computing
arrangement costs as disclosed in the FY21 Annual Report.
4 FY20 is presented for the 12 months ended 31 July 2020.
5 Underlying EBIT is earnings before net finance costs and taxation excluding material items. Underlying EBITDA is earnings before net finance costs, taxation, depreciation
and amortisation excluding material items. Underlying NPAT is Net profit/(loss) after tax excluding 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.
6 ANWC/Sales is the average net working capital over the period divided by the sales over the period, and is used throughout the business as a key performance indicator
with respect of capital management.
7 ROFE is underlying EBIT divided by the average of opening and closing funds employed (total equity plus net debt).
8 Total shareholder return (TSR) is measured over a three year return period.
5.1 FY23 EIP Annual Measures outcomes
The Annual Measures performance period for the FY23 EIP concluded on 30 September 2023.
The hurdles for the FY23 EIP were as follows:
Weighting
Metric
Threshold
Target
Maximum
Applies to
FY23 targets
Financial elements
Profit
Return on investment
Cash flow
Non-financial elements
25%
25%
25%
25%
Underlying EBIT1
ROFE2
ANWC/Sales
212.2
8.2%
34.2%
249.6
9.6%
32.5%
299.52
11.5%
31.0%
All Executive KMP
All Executive KMP
All Executive KMP
All Executive KMP
Refer executive incentive plan description
Varies by Executive KMP
1 Measure used as the Annual Cash Award Gateway
2 Calculated on an underlying basis which excludes the impact of material items.
The below tables shows the outcomes against actual targets for executive KMP:
Executive KMP
G Hunt
P Townsend
D Allen
1 Figures presented are $ millions.
Annual cash
award gateway
Group uEBIT
Group uEBIT
Weight
Target1
Actual1
Award outcome
Successful
Successful
Successful
25%
25%
25%
249.6
249.6
249.6
249.8
249.8
249.8
100%
100%
100%
Group ROFE
Group ANWC / sales %
Non-financial
Executive KMP
Weight
Target
Actual
Award
outcome
Weight
G Hunt
P Townsend
D Allen
25%
25%
25%
9.6%
9.6%
9.6%
8.8%
8.8%
8.8%
60%
60%
60%
25%
25%
25%
Target
32.5%
32.5%
32.5%
Actual
41.9%
41.9%
41.9%
Award
outcome
Weight
Award
Outcome
0%
0%
0%
25%
25%
25%
100%
100%
100%
Nufarm Limited | Annual Report 2023
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Remuneration Report continued
FY23 Executive incentive plan potential
Executive KMP
At target $
At maximum
$
Total award
$
G Hunt
P Townsend
D Allen
1,912,506
2,629,695
1,245,153
794,980
1,093,098
517,578
641,509
882,075
417,660
Executive KMP average
1,116,332
1,534,956
726,797
EIP Award
as a % of
target
potential
To be paid in
cash in
December
2023
EIP as % of
FAR
To be
converted
into rights
with vesting
date
30 September
20261
Estimated fair
value of rights
using
30 September
2023
valuation
65%
65%
65%
65%
87%
65%
55%
69%
398,449
172,354
139,081
236,628
846,704
345,224
278,579
490,169
664,420
287,969
232,374
394,921
1 The amounts to be converted into rights are converted by dividing this amount by the 5-Day VWAP of the Nufarm share price following the announcement of the audited
financial statements.
The board approved the outcomes in accordance with the EIP rules and determined there was no reason to exercise any discretion
(up or down) with regard to the EIP Annual Measures outcome for FY23.
5.2 Executive KMP pay mix FY23, actual
The graphic below shows the actual remuneration mix for executive KMP for FY23.
5.3 FY22 EIP Performance Rights Allocation
EIP performance rights are allocated based on the five-day VWAP following the release of the preliminary final report.
Because the FY22 Remuneration Report was released before the allocation value could be determined, the number of rights
awarded were not able to be reported at the time. Accordingly, the FY22 EIP equity outcomes against targets for executive KMP are
shown here:
FY22 Executive incentive plan rights conversion
EIP to
be converted
into rights
5-Day
VWAP post
FY22 results
Equivalent
number of rights
using 5-Day
VWAP post
FY22 results
EIP
rights granted
Grant date
fair value
Fair value of EIP
rights granted
during FY23
1,694,648
707,542
n/a
5.9505
5.9505
n/a
284,791
118,904
n/a
-
118,904
n/a
-
5.68
n/a
-
675,375
n/a
Executive KMP
G Hunt1
P Townsend
D Allen2
1 G Hunt EIP rights are subject to shareholder approval prior to granting.
2 D Allen did not participate in the FY22 EIP plan.
Details of the terms of the FY22 EIP for the CFO is set out in the FY22 remuneration report. Details of the terms of the FY22 EIP for
the CEO will be set out in the Notice of Meeting for the forthcoming Annual General Meeting, and the grant of performance rights
will be subject to shareholder approval.
The details of performance rights granted with respect to the FY23 EIP award will be disclosed in the FY24 remuneration report.
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Nufarm Limited | Annual Report 2023
53%55%59%15%12%11%32%25%22%8%8%Fixed remuneration (cash)EIP cash incentiveEIP performance rightsRestricted equity grantCEO, actualCFO, actualGESC, actual0102030405060708090100 Historical STI/EIP outcomes vs underlying EBIT performance
The following chart compares remuneration outcomes with underlying EBIT performance over the past five financial years. FY19 -
FY21 reflect STI outcomes, while FY22 and FY23 reflect the EIP. It is important to note that a significant portion of the FY22 and
FY23 EIP remains at risk and subject to further long-term performance measures. While historical comparison is difficult given the
change in remuneration structure to the EIP, Nufarm is confident that there is a strong link between pay and performance, with
executives only benefiting when the group is performing in line with challenging expectations.
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5.4 Legacy FY21 LTI plan outcomes
The performance period for the final LTI plan, for FY21, concluded on 30 September 2023.
The results of Nufarm’s rTSR were calculated by an external provider. ROFE was calculated on an underlying basis which excludes
the impact of material items. This is intended to ensure that no windfall gains or losses distort the outcome. The board approved the
vesting outcomes in accordance with the LTI plan rules and decided that there was no reason to exercise any modifying discretion
(up or down) with regard to the LTI outcome for FY23.
The vesting outcomes for the FY21 LTI plan are detailed below reflecting rTSR and ROFE performance to 30 September 2023.
Performance measure
RTSR
ROFE
Total
Threshold
50th percentile
6.9%
Actual
60th percentile
8.1% (above stretch)
% of total plan vested
35%
50%
85%
This table details the individual outcomes for the FY21 LTI plan award granted 1 October 2020.
Executive KMP
G Hunt
P Townsend
D Allen1
FY21 LTI award vested 30 September 2023
Total number of
rights available
Total number of
rights awarded
Total award as a
% of potential
Grant date fair
value of rights
awarded $
Total grant date
fair value of
rights available $
Total grant date
fair value of
lapsed rights $
233,948
74,161
n/a
198,856
63,037
n/a
85.0%
85.0%
n/a
568,026
180,063
n/a
697,165
221,000
n/a
129,139
40,936
n/a
1 D Allen did not participate in the FY21 LTI plan.
Nufarm Limited | Annual Report 2023
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STI/EIP outcome (% target)Underlying EBIT $mAverage KMP STI outcome (% target);Average KMP EIP outcome (% target - cash award)Average KMP EIP outcome (% target - equity awardsubject to 3-year performance testing)Underlying EBIT (group)FY19(STI)FY20(STI)FY21(STI)FY22(EIP)FY23(EIP)020406080100120140160050100150200250300
Remuneration Report continued
Historical LTI outcomes vs TSR performance
The following chart compares Nufarm’s LTI plan vesting results for the past five LTI plans (as a percentage of plan maximum)
compared to the rolling three-year TSR performance during the same period. While awards were tested against relative TSR (rather
than the absolute performance shown), the chart demonstrates that executives have only benefited historically when shareholder
return has been positive.
The FY17, FY18 and FY19 LTI plans did not meet the threshold and are depicted as hollow bars.
5.5 Actual total remuneration earned by executives in FY23 (unaudited)
The table below details actual pay and benefits for executive KMP who were employed during the reporting period. This table aims
to assist shareholders in understanding the cash and other benefits received by executive KMP from the various components of
their remuneration during FY23.
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
KMP received or became entitled to during FY23 (especially if they became executive 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 the statutory remuneration tables in section 9 (which provides a breakdown of executive KMP remuneration
in accordance with statutory requirements and Australian Accounting Standards). The treatment of the remuneration elements in this
disclosure is as follows:
• Fixed remuneration earned between 1 October 2022 and 30 September 2023 including superannuation.
• EIP cash illustrates the cash award earned via the FY23 EIP and paid following the release of the audited results for the year
ended 30 September 2023.
• STI and LTI rights vested illustrates the number of rights that vested (in respect of the FY21 STI plan and the FY21 LTI plan)
during the period 1 October 2022 to 30 September 2023. The values represent the number of rights vested multiplied by the
share price at the relevant date.
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Nufarm Limited | Annual Report 2023
LTI plan outcome (%)TSR (%)Vesting outcome (% maximum opportunity)Unachieved opportunityNufarm Ltd 3-year TSR (absolute)FY19FY20FY21Vesting yearsFY22FY23020406080100-60-40-2002040 Fixed remuneration
Salary
and
fees
Period
Other
benefits2
Super-
annuation
$000
$000
$000
At risk
remuneration (realised)
Total1
EIP
cash
$000
STI
rights
vested3
LTI
rights
vested3
Total rem-
uneration
LTI
rights
forfeited3
$000
$000
$000
$000
Non-executive directors
Sub total non-executive directors
remuneration (realised)
FY23
1,602
FY22
1,470
Executive KMP
G Hunt
Managing director and CEO
P Townsend
Chief financial officer
D Allen
Group executive supply chain4
Former executive KMP
E Prado
Group executive supply chain5
Sub total executive
KMP (realised)
Total non-executive directors and
executive KMP (realised)
FY23
1,400
FY22
1,332
FY23
FY22
FY23
FY22
FY23
FY22
767
744
778
61
-
691
FY23
2,945
FY22
2,828
FY23
4,547
FY22
4,298
-
-
-
-
-
-
15
1
-
57
15
58
15
58
Total
$000
1,687
1,569
1,428
1,360
795
772
793
62
-
797
3,016
85
99
28
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-
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-
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56
-
-
398
810
173
354
139
-
-
298
710
-
-
693
-
263
-
-
-
-
-
-
-
945
327
299
-
-
-
-
-
956
1,244
105
2,991
1,462
-
327
141
204
4,703
710
956
1,244
4,560
1,462
-
327
1,687
1,569
3,464
2,497
1,530
1,126
932
62
-
1,095
5,926
4,780
7,613
6,349
-
-
(167)
(470)
(53)
-
-
-
-
-
(220)
(470)
(220)
(470)
1 Total represents total remuneration paid in the financial period.
2 Other benefits includes allowances, health insurance and other costs for overseas based executives.
3 STI/LTI rights vested or forfeited are valued at the Nufarm share price prevailing upon the vesting or forfeiture date ($4.75 at 30 September 2023, $5.00 at
30 September 2022).
4 D Allen was appointed a KMP on 1 September 2022.
5 E Prado ceased being a KMP on 31 August 2022.
Nufarm Limited | Annual Report 2023
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Remuneration Report continued
6 Remuneration governance
The PSR committee 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 PSR committee is comprised of four independent NEDs
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 PSR committee charter can be found
at www.nufarm.com.
The board has progressively increased the remit of the PSR committee to include a wider talent and succession agenda including a
review of Nufarm’ s diversity and inclusion strategy and, more recently, responsibility for occupational health and safety.
The board engages the services of independent remuneration consultants, as it deems appropriate throughout the year. During
FY23, we worked with Guerdon Associates in relation to remuneration benchmarking and SW Corporate in relation to shareholder
engagement regarding the EIP design. No remuneration recommendations were requested or provided.
6.1 PSR committee’s focus during FY23
In FY23 the PSR committee undertook a range of activities relating to broader people and remuneration issues including:
• Responding to the FY22 remuneration ‘strike’ by engaging an independent remuneration consultant and engaging extensively
with key stakeholders regarding proposed changes to the FY23 EIP;
• Endorsing the design of the FY23 EIP;
• Undertaking the annual review of executive KMP remuneration and making recommendations to the board regarding
remuneration levels, performance outcomes and incentive awards;
• Considering extension of Minimum Shareholding Policy to executive KMP and other senior executives;
• Approving performance objectives and Key Performance Indicators (KPIs) for the CEO, executive KMP and key executives;
• Approving the diversity and inclusion strategic priorities and targets;
• Approving the FY23 parameters for Fixed Pay remuneration;
• Monitoring the organisational culture and employee engagement metrics including pay equity and workforce representation;
• Reviewing talent development programs and succession planning; and
• Monitoring Nufarm inclusion and diversity objectives in line with Nufarm plans.
6.2 Board’s approach to remuneration governance
The board measures financial performance under the applicable EIP and LTI plans using audited numbers. Within the remuneration
framework, under specific circumstances, the board has discretion to lapse or enforce forfeiture (or potentially cash repayment
where an award has been issued as cash or converted into cash) of any rights, options or shares issued under the terms
of the relevant plans. 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.
6.3 Minimum shareholding policy and share trading
In FY21 the board introduced a NED MSR policy which applies to all NEDs except for any nominee directors appointed to the
board. The policy requires that NEDs are required to accumulate and then hold a minimum holding of Nufarm securities equivalent
to one hundred per cent of their total pre-tax annual base fee including superannuation. In line with the MSR policy and applicable
transitional arrangements, all NEDs comply with the policy or are on track to comply.
During the year, the board agreed to extend the minimum shareholding policy to all executive KMP and other senior executives.
The executive KMP and other senior executives will be expected to build and hold a shareholding equal to, for the CEO one
hundred per cent of FAR, and for other executives, fifty per cent of FAR or base salary. Other than for meeting tax obligations,
executives are expected not sell any Nufarm equity until the threshold has been met. The policy applies to the CEO from FY24 and
to other executives from FY25.
NEDs and executive KMP, like all officers, must comply with Nufarm’s Security Trading Policy. Further, in accordance with the policy,
they are not permitted to enter into margin lending, short-term or speculative dealing or hedging of Nufarm securities, including any
performance rights.
76
Nufarm Limited | Annual Report 2023
7 Executive KMP contractual agreements and cessation of employment
The company has employment contracts with the executive KMP which formalise the terms and conditions of employment and are
for an indefinite term. The contracts of the CEO and other executive KMP have been structured to be compliant with the termination
benefits cap under the Corporations Act. The contracts also provide for payment of applicable statutory entitlements including when
executive KMP leave employment under different circumstances, as specified here.
The company may terminate the contract of the CEO and other executive KMP by giving suitable notice, and they may
terminate their contract by giving notice as specified below. The company may terminate an employment contract immediately
for serious misconduct.
The table below includes details relating to executive KMP contractual terms, as well as treatment of on-foot incentive awards in the
event of termination (which are governed under the rules of the relevant award):
Employment agreement
Individual contract
Resignation by the executive
6-month notice period.
CEO and other executive KMP
The board may choose to allow the CEO to work out their notice period or place the CEO on leave or
make a payment in lieu of notice at the board’s discretion.
If an executive KMP resigns (or gives notice of resignation) prior to the date on which the EIP award is
delivered, they are not entitled to an EIP award for the current performance year.
Termination by the Group
without cause
If employment is terminated by the company without cause they will be entitled to receive a total
payment of an amount equivalent to twelve (12) months’ Fixed Annual Remuneration, inclusive of
payment in lieu of any notice period not served (the ‘Severance Payment’).
Termination by the Group with cause
No notice or severance is payable. All unvested incentive awards are forfeited, including any grant for
the current year (which will not be granted).
Cessation of employment for
other reasons
If an executive KMP ceases employment for any reason other than ‘terminated for cause’ all
unvested equity will remain intact and continue to vest under the plan rules.
If employment ceases 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).
Board discretion
The Nufarm board have an absolute discretion regarding the amount and timing of any EIP payment
made or not made to any executive KMP or other participant.
Nufarm Limited | Annual Report 2023
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Remuneration Report continued
8 Non-executive director remuneration
To maintain independence and impartiality when making decisions affecting the future direction of the company, NED fees are
fixed, and NEDs do not receive any performance-related incentives. The chair receives a fee for chairing the board and does not
receive any other fees for participation on committees. Other NEDs receive a base fee and additional fees for each additional
committee chair position and membership. Non-executive directors are not entitled to any retirement benefits other than statutory
superannuation contributions.
Fees for NEDs 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 NED fees, the board takes into
account factors such as external market data on fees and the size and complexity of Nufarm’s operations.
The board’s policy is to position NED fees at the market median with comparably sized listed entities. The board determines the
fees payable to NEDs within the aggregate amount approved from time to time by shareholders. At the company’s 2017 AGM,
shareholders approved an aggregate of $2,000,000 per year (including superannuation costs). The total fees for FY23 remained
within the approved cap.
8.1 NED remuneration for FY23
The chair’s fee and NED base fees have remained unchanged since 1 August 2018.
8.2 Committee fee adjustments
Two changes to committees were made with effect from 1 July 2023, with consequential fee adjustments:
• A new sustainability & environment committee was created, with fees set at the same level as the previous committees.
• The risk and compliance committee was dissolved, and its responsibilities allocated to other committees:
– The previous audit committee (renamed audit and risk committee) took on responsibility for risk; and
– The previous human resources committee (renamed people, safety & remuneration committee) took on responsibility for
occupational health and safety.
Fees for these committees were increased slightly to account for the additional responsibilities.
The changes to committee fees, effective from 1 July 2023, resulted in the following chair and NED fee arrangements:
Fees applicable from 1 July 2023 ($) per annum
Board
Audit and Risk committee
People, Safety, and remuneration committee
Innovation committee
Sustainability and Environment committee
Nomination committee
Chair
392,567
37,500
33,000
27,000
27,000
-
Member
160,597
18,750
16,500
13,500
13,500
-
78
Nufarm Limited | Annual Report 2023
9 Statutory remuneration tables
9.1 NEDs
Short term
Post-
employment
Share based
payments
(SBP)
Total
Period
Salary
and fees
Cash
bonus
(vested)
Other
benefits1
Total
short
term
Other long
term
benefits2
Super-
annuation
Term-
ination
benefits
Equity
settled
expenses
Total rem-
uneration
$000
$000
$000
$000
$000
$000
$000
$000
$000
Non-executive directors
J Gillam
Chair
G Davis
Director
A Gartmann
Director3
D Jones
Director
P Margin
Director
M McDonald
Director
A Percy
Director4
L Saint
Director
F Tripodi
Director5
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
Former non-executive directors
FY23
FY22
FY23
FY22
FY23
F Ford
Director6
T Takasaki
Director7
Sub total non-
executive
directors
remuneration
365
359
210
200
155
4
192
188
207
215
187
183
47
-
184
183
55
-
-
32
-
106
1,602
FY22
1,470
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
365
359
210
200
155
4
192
188
207
215
187
183
47
-
184
183
55
-
-
32
-
106
1,602
1,470
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
28
34
-
15
17
-
-
-
-
-
20
18
-
-
20
18
-
-
-
3
-
11
85
99
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
393
393
210
215
172
4
192
188
207
215
207
201
47
-
204
201
55
-
-
35
-
117
1,687
1,569
1 Other benefits includes movements in annual leave accrual. For overseas based executives other benefits include allowances health insurance and other costs. A negative
balance may appear where the leave accrual has decreased from the prior year.
2 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.
3 A Gartmann was appointed as a director on 23 September 2022.
4 A Percy commenced as a director on 1 July 2023.
5 F Tripodi commenced as a director on 19 June 2023.
6 F Ford ceased being a director on 17 December 2021.
7 T Takasaki ceased being a director on 31 May 2022.
Nufarm Limited | Annual Report 2023
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Remuneration Report continued
9.2 Executive KMP
Short term
Post-
employment
Share based
payments
(SBP)
Total
Period
Salary
and fees
Cash
bonus
(vested)
Other
benefits1
Total
short
term
Other long
term
benefits2
Super-
annuation
Term-
ination
benefits
Equity
settled
expenses3
Total Rem-
uneration
$000
$000
$000
$000
$000
$000
$000
$000
$000
Executive KMP
G Hunt
Managing director
and CEO
P Townsend
Chief
financial officer
D Allen
Group executive
supply chain4
FY23
FY22
FY23
FY22
FY23
FY22
Former executive KMP
FY23
FY22
FY23
FY22
FY23
E Prado
Group executive
supply chain5
Sub total
executive KMP
remuneration
Total non-
executive
directors and
executive KMP
remuneration
1,400
1,332
767
744
778
61
-
691
2,945
2,828
4,547
398
810
173
354
139
-
-
298
710
1,462
710
58
66
6
-
15
1
-
57
79
124
79
1,856
2,208
946
1,098
932
62
-
1,046
3,734
4,414
5,336
53
42
20
19
-
-
-
-
73
61
73
61
28
28
28
28
-
-
-
49
56
105
141
204
-
-
-
-
-
-
-
-
-
-
-
-
730
833
425
339
83
-
-
276
1,238
1,448
1,238
2,667
3,111
1,419
1,484
1,015
62
-
1,371
5,101
6,028
6,788
1,448
7,597
FY22
4,298
1,462
124
5,884
1 Other benefits includes movements in annual leave accrual. For overseas based executives other benefits include allowances health insurance and other costs. A negative
balance may appear where the leave accrual has decreased from the prior year.
2 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.
3 Assuming shareholder approval, G Hunt equity settled expenses in respect of the FY22 EIP and FY23 EIP are estimated based on 30 September 2023 fair value. P
Townsend and D Allen equity settled expenses in respect of the FY23 EIP are estimated based on 30 September 2023 fair value.
4 D Allen was appointed a KMP on 1 September 2022.
5 E Prado ceased being a KMP on 31 August 2022.
Percentage of
remuneration
performance
based
SBP expense as
a proportion of
total
remuneration
%
42%
53%
42%
47%
22%
-
-
%
27%
27%
30%
23%
8%
-
-
42%
20%
Period
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
Executive KMP
G Hunt
Managing director and CEO
P Townsend
Chief financial officer
D Allen
Group executive supply chain1
Former executive KMP
E Prado
Group executive supply chain2
1 D Allen was appointed a KMP on the 1 September 2022.
2 E Prado ceased being a KMP on the 31 August 2022.
80
Nufarm Limited | Annual Report 2023
10 Equity instruments held by directors and disclosed executives
The following tables show the number of:
• options/performance rights over ordinary shares in the company,
• right to deferred shares granted under previous years STI schemes, and
• shares in the company
that were held during the financial year by disclosed executives and non-executive directors of the group, including their close family
members and entities related to them. Equity instruments in relation to the FY23 EIP will be granted following the release of the
FY23 audited financial statements.
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.
10.1 Executive KMP rights over ordinary shares in Nufarm Limited
Number of
rights held
at
30 September
2022
Number
of rights
granted
as rem-
uneration
Number
of rights
exercised
Number
of
rights
foreited
or
lapsed
Number
of rights
changed
due to
other
reasons1
Number of
rights held
at
30 September
2023
Number
of rights
vested
during
FY23
Number of
rights
vested at
30 September
20232
Value at
date of
forfeiture
$3
Scheme
Executive KMP
G Hunt
Managing
director and
CEO
P Townsend
Chief financial
officer
Total executive
KMP
LTI rights
299,325
STI rights deferred
145,890
-
-
EIP rights
LTI rights
STI rights deferred
EIP rights
LTI rights
STI rights
deferred
-
118,904
74,161
55,465
-
-
-
118,904
373,486
201,355
-
-
Non-KMP officers
EIP rights
-
28,167
(65,377)
(35,092)
-
-
-
-
-
-
-
(11,124)
-
-
(65,377)
(46,216)
-
-
-
-
K Hall
Company
secretary
Total executive
KMP and non-
KMP officers
-
-
-
-
-
-
-
-
-
-
198,856 198,856
198,856 166,687
145,890 145,890
145,890
118,904
-
-
-
-
63,037
63,037
63,037
52,839
55,465
55,465
55,465
118,904
-
-
-
-
261,893 261,893
261,893 219,526
201,355 201,355
201,355
28,167
-
-
-
-
610,319 463,248
463,248 219,526
574,841
147,071
(65,377)
(46,216)
1 "Other reasons" reflect changes to KMP and non-KMP officers during the period.
2 All rights that are vested are exercisable.
3 15% of LTI performance rights due to vest in the year ended 30 September 2023 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 (30 September 2023: $4.75)
10.2 Non-executive director rights over ordinary shares in Nufarm Limited
Nufarm’s NED rights (NED rights) plan commenced in 2021. Under the terms of this plan, NEDs may allocate a fixed portion of
their remuneration to be used to purchase NED rights. In accordance with Nufarm’s Security Trading Policy, the rights will vest
every 6 months on the second business day following the date in which Nufarm publicly releases its half-yearly and annual financial
statements. All vested rights are converted into ordinary shares via on market purchase and are subject to restrictions in accordance
with the plan rules. As a fee sacrifice arrangement, there are no performance obligations attached to the NED rights or restricted
shares. Changes in price of the NED rights and restricted shares are not considered to be remuneration.
The first six-monthly tranche of FY23 NED rights issued under the plan vested into shares in May 2023. Rights issued under the
second tranche are scheduled to vest in November 2023. These rights, as well as those that subsequently convert to restricted
shares, combine to form part of the NED’s Minimum Shareholding Requirement (MSR). The movement during the reporting period in
the number of rights for each NED, including their related parties, is set out in the table below:
Nufarm Limited | Annual Report 2023
81
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Remuneration Report continued
Non-executive directors
J Gillam
G Davis
A Gartmann
D Jones
P Margin
M McDonald
A Percy2
L Saint
F Tripodi3
Total
Balance as at
30 September
2022
Rights acquired
Vested and
converted to
shares1
Forfeited
Balance as at
30 September
2023
-
-
-
-
-
-
-
-
-
-
-
-
4,197
5,397
(6,895)
-
-
7,631
-
11,828
-
-
-
-
12,212
(13,737)
-
-
17,609
(20,632)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,699
-
-
6,106
-
8,805
1 This represents the NED rights that have vested and subsequently been converted to ordinary shares.
2 A Percy commenced as a director on 1 July 2023.
3 F Tripodi commenced as a director on 19 June 2023
Shares in Nufarm Limited held by non-executive directors and executive KMP
Non-executive directors
J Gillam
G Davis
A Gartmann
D Jones
P Margin
M McDonald
A Percy1
L Saint
F Tripodi2
Executive KMP
G Hunt
P Townsend
D Allen
Total
Balance as at
30 September
2022
Granted
as remuneration
On exercise
of rights
Net
change other
Balance as at
30 September
2023
185,000
71,609
-
82,000
31,867
34,827
-
14,290
-
589,847
20,500
9,843
1,039,783
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,895
-
-
13,737
-
-
-
8,450
-
-
-
-
-
-
65,376
21,510
-
-
-
394
185,000
71,609
8,450
82,000
38,762
34,827
-
28,027
-
676,733
20,500
10,237
86,008
30,354
1,156,145
1 A Percy commenced as a director on 1 July 2023.
2 F Tripodi commenced as a director on 19 June 2023.
Shares issued as a result of the exercise of options
There were nil (2022: nil) shares issued as a result of the exercise of options during the year.
Unissued shares under option
There are nil (2022: nil) unissued shares under option.
82
Nufarm Limited | Annual Report 2023
11 Other statutory disclosures
Loans to key management personnel
There were no loans between executive KMP (or their related parties) and the company or any of its subsidiaries at 30 September
2023 (2022: 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 personnel, 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 personnel and their related
parties were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions
to unrelated 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.
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John Gillam
Director
Marie McDonald
Director
Melbourne, 15 November 2023
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Nufarm Limited | Annual Report 2023
83
Auditor’s Independence Declaration
84
Nufarm Limited | Annual Report 2023
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. 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 2023 there have been: i.no contraventions of the auditor independence requirements as set out in the Corporations Act2001 in relation to the audit; andii.no contraventions of any applicable code of professional conduct in relation to the audit.KPMG Chris Sargent Partner Melbourne 15 November 2023 Consolidated financial statements
for the year ended 30 September 2023
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 Revenue from contracts with customers and
other income
8 Other expenses
9 Personnel expenses
10 Finance income and expense
11 Income tax expense
12 Assets held for sale
13 Business combinations and acquisition of
non-controlling interests
14 Cash and cash equivalents
15 Trade and other receivables
16 Inventories
17 Tax assets and liabilities
86
88
89
90
92
92
92
94
104
105
108
110
110
111
111
112
113
113
114
115
115
116
18 Investments accounted for using the equity method
19 Other investments
20 Property, plant and equipment
21 Intangible assets
22 Trade and other payables
23 Interest-bearing loans and borrowings
24 Employee benefits
25 Share-based payments
26 Provisions
27 Capital and reserves
28 Earnings per share
29 Financial risk management and financial instruments
30 Leases
31 Capital commitments
32 Contingencies
33 Group entities
34 Company disclosures
35 Deed of cross guarantee
36 Related parties
37 Auditors’ remuneration
38 Subsequent events
Directors’ declaration
Independent Audit Report
117
117
118
119
122
122
124
126
130
130
132
133
143
144
144
144
148
149
151
153
153
154
155
Nufarm Limited | Annual Report 2023
85
Consolidated statement of profit or loss
and other comprehensive income
For the year ended 30 September
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
Note
2023
$000
2022
$000
3,480,611
3,772,970
(2,454,241)
(2,800,385)
1,026,370
972,585
7
18
10
10
10
10
10
11
5,039
(515,590)
(230,555)
(44,677)
(1,184)
239,403
5,383
(82,798)
(7,161)
(89,959)
(84,576)
9,051
(523,344)
(198,813)
(51,100)
(92)
208,287
2,381
(79,727)
(2,838)
(82,565)
(80,184)
154,827
128,103
(43,687)
(20,665)
111,140
107,438
111,140
107,438
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the attached notes.
86
Nufarm Limited | Annual Report 2023
Profit/(loss) for the period
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Currency translation on foreign subsidiaries closed, transferred to profit/(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
Note
2023
$000
2022
$000
111,140
107,438
16,969
70,403
(283)
-
83
5,564
(950)
-
(67,496)
234
6,293
4,293
12,635
359
Other comprehensive profit/(loss) for the period, net of income tax
91,786
(43,682)
Total comprehensive profit/(loss) for the period
202,926
63,756
Attributable to:
Equity holders of the group
Earnings per share
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
202,926
63,756
28
28
26.3
26.0
26.3
26.1
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.
Nufarm Limited | Annual Report 2023
87
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Consolidated balance sheet
As at 30 September
Note
2023
$000
2022
$000
14
15
16
17
12
15
18
19
17
20
21
22
23
24
17
26
22
23
17
24
410,957
670,785
585,702
550,251
1,464,011
1,602,457
17,881
10,818
19,251
3,438
2,574,452
2,761,099
6,436
5,527
62,804
176,267
569,332
1,230,249
2,050,615
4,625,067
3,778
6,462
54,850
164,801
475,331
1,192,777
1,897,999
4,659,098
771,683
1,290,012
47,763
32,730
15,753
5,059
269,169
30,595
10,773
6,878
872,988
1,607,427
30,333
1,213,036
149,687
49,133
1,442,189
2,315,177
2,309,890
28,827
662,701
146,141
61,281
898,950
2,506,377
2,152,721
1,840,609
1,837,228
133,012
89,337
42,751
25,810
2,062,958
1,905,789
246,932
246,932
2,309,890
2,152,721
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax assets
Assets held for sale
Total current assets
Non-current assets
Trade and other receivables
Investments in equity accounted investees
Other investments
Deferred tax assets
Property, plant and equipment
Intangible assets
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.
88
Nufarm Limited | Annual Report 2023
Consolidated statement of cash flows
For the year ended 30 September
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
Currency translation on foreign subsidiaries closed, transferred to profit/(loss)
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
Note
2023
$000
2022
$000
111,140
107,438
8
18
43,687
77,415
188,374
9,419
1,184
16,969
348
(123,191)
130,614
(485,188)
13,114
(16,115)
5,383
-
(73,984)
(40,904)
20,665
77,346
213,680
58,278
92
-
(363)
259,518
(684,572)
390,551
8,853
451,486
2,381
9
(62,278)
(32,029)
Net operating cash flows
6
(125,620)
359,569
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Payments for property, plant and equipment
Payments for other investments, associates or joint ventures
Purchase of a business, net of cash acquired
Payments for acquired intangibles and major product development expenditure
Net investing cash flows
Cash flows from financing activities
High yield bond – early redemption costs
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
541
(129,628)
(7,739)
(7,790)
(97,115)
(241,731)
-
(20,842)
877,760
(590,124)
(24,363)
(15,282)
(41,169)
643
(75,802)
(46,170)
(33,965)
(85,115)
(240,409)
(18,988)
(14,354)
497,895
(668,645)
(20,116)
(10,201)
(29,957)
185,980
(264,366)
(181,371)
585,702
6,626
410,957
(145,206)
724,215
6,693
585,702
6
23
23
23
23
27
27
6
14
The consolidated statement of cash flows is to be read in conjunction with the attached notes.
Nufarm Limited | Annual Report 2023
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Consolidated statement of changes in equity
For the year ended 30 September
Attributable to equity holders of the group
Share
capital
Translation
reserve
Capital
profit
reserve
Other
reserve
Retained
earnings
Other
Total
securities Total equity
Consolidated
$000
$000
$000
$000
$000
$000
$000
$000
Balance at 1 October 2021
1,835,888
61,161
33,627
204
(56,349) 1,874,531
246,932 2,121,463
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
-
-
-
-
-
-
-
-
-
(67,496)
-
-
-
-
-
(67,496)
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
901
-
439
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
234
6,293
4,293
107,438
107,438
-
-
-
-
(67,496)
234
6,293
4,293
-
12,635
12,635
359
-
359
11,179
120,073
63,756
4,076
-
4,977
-
-
-
(30,396)
(30,396)
-
439
(7,518)
(7,518)
-
-
-
-
-
-
-
-
-
-
-
-
107,438
(67,496)
234
6,293
4,293
12,635
359
63,756
4,977
(30,396)
439
(7,518)
Balance at 30 September 2022
1,837,228
(6,335)
33,627
15,459
25,810
1,905,789
246,932 2,152,721
90
Nufarm Limited | Annual Report 2023
Attributable to equity holders of the group
Share
capital
Translation
reserve
Capital
profit
reserve
Other
reserve
Retained
earnings
Other
Total
securities Total equity
Consolidated
$000
$000
$000
$000
$000
$000
$000
$000
Balance at 1 October 2022
1,837,228
(6,335)
33,627
15,459
25,810
1,905,789
246,932 2,152,721
Profit/(loss) for the period from
continuing operations
Other comprehensive income
Currency translation on foreign subsidiaries
closed, transferred to profit/(loss)
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
-
-
-
-
-
-
-
-
-
-
16,969
70,403
-
-
-
-
-
87,372
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
2,706
-
675
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(283)
-
83
-
111,140
111,140
-
-
-
-
-
16,969
70,403
(283)
-
83
5,564
5,564
(950)
-
(950)
(1,150)
116,704
202,926
4,039
-
6,745
-
-
-
(41,844)
(41,844)
-
675
(11,333)
(11,333)
-
-
-
-
-
-
-
-
-
-
-
-
-
111,140
16,969
70,403
(283)
-
83
5,564
(950)
202,926
6,745
(41,844)
675
(11,333)
Balance at 30 September 2023
1,840,609
81,037
33,627
18,348
89,337
2,062,958
246,932 2,309,890
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.
Nufarm Limited | Annual Report 2023
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Notes to the consolidated financial statements
For the year ended 30 September
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 2023 comprise the company and its
subsidiaries (together referred to as the ‘group’ and individually
as ‘group entities’) and the group’s interest in associates and
jointly controlled entities.
The group is a for-profit entity and is primarily involved in the
manufacture and sale of crop protection products used by
farmers to protect crops from damage caused by weeds, pests
and disease, and seed treatment products. 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 on 15 November 2023.
(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 tonote 21 for key assumptions made in
determining the recoverable amounts of the CGU’s.
92
Nufarm Limited | Annual Report 2023
(iii) Income taxes
(vi) Capitalised development costs
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 24 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.
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. Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in the specific
asset to which it relates.
The criteria above are derived from estimates and judgements
including supply and demand forecasts, growth rates, discount
rates, and regulatory considerations that are used in valuation
modelling. Estimates and assumptions may change as new
information becomes available, including changes to estimates
related to the useful life of the intangible assets which
are accounted for prospectively and may affect amortisation
rates and intangible asset carrying values. If, after having
commenced the development activity, a judgement is made
that the intangible asset is impaired, the appropriate amount
will be recognised in profit or loss.
(vii) Intellectual property
Intellectual property consists of product registrations, product
access rights, copyright, patents, 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) Revenue from contracts with customers
Estimates are used by the group in determining the transaction
price, including variable consideration, for long-term licensing
contracts with customers, along with the stand-alone selling
price for distinct performance obligations within specific
contracts, used in the allocation of the transaction price to
performance obligations within individual contracts. Using the
expected value method or the most likely value method,
the variable consideration is estimated over the life of the
contracts, whereby the group considers third party projections
on grain commodity prices, biofuel pricing, emissions pricing,
available acreage, and other market inputs. The group applies
judgement in applying constraints to the transaction price
considering how the variable consideration is linked to factors
within the control of the group, and factors related to
market forces.
The group estimates, using the expected cost plus margin
approach and the residual approach, how the transaction price
is allocated to distinct performance obligations within specific
contracts. The expected cost plus margin approach includes
estimates on the cost drivers to deliver services to customers
over the life of the contract. The group applies judgement,
based on existing market conditions and service delivery costs,
in estimating the long term cost to deliver the relevant service
performance obligations.
(ix) Russia and Ukraine conflict
The group has carefully considered the effect of the Russian
and Ukrainian conflict in preparing its financial statements
for the year ended 2023. Where applicable, the group
has incorporated judgements, estimates and assumptions
specific to the impact of the conflict, primarily in respect
Nufarm Limited | Annual Report 2023
93
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Notes to the consolidated financial statements continued
For the year ended 30 September
2 Basis of preparation continued
of the net realisable value of inventory and the expected
credit losses for outstanding receivables, in determining the
amounts recognised in the financial statements. Estimates and
assumptions may change as the situation in these geographies
change, with actual expenses in future periods differing from
the provisions established, and any such differences would
impact future earnings of the group.
accounting for deferred taxes arising from the implementation
of these rules. The group is assessing the impact on its
financial statements for the next financial year.
There are no standards, except the above, that are not yet
effective, that would be expected to have a material impact on
the group in the current or future reporting periods.
(e) Reclassification
Where applicable comparatives are adjusted to present them
on the same basis as current period figures.
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
(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:
interpretation and changes in accounting policies
• the fair value of the consideration transferred; plus
(i) New and amended accounting standards and
interpretations adopted by the group
In the current year the group has adopted 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 however, has not had a
material impact on the disclosures or amounts reported in
these financial statements:
• AASB 2020-3 Amendments to Australian Accounting
Standards – Annual Improvements 2018-2020 and Other
Amendments, including:
– Amendments to AASB 137 – Onerous Contracts – Cost
of Fulfilling a Contract.
– Amendments to AASB 116 – Property, Plant and
Equipment: Proceeds before Intended Use.
– Reference to the Conceptual Framework (Amendments
to AASB 3).
(ii) New and revised accounting standards and
interpretations on issue but not yet effective
During the current year, the International Sustainability
Standards Board (ISSB) issued the inaugural sustainability
reporting disclosures:
• IFRS S1 General Requirements for Disclosure of
Sustainability-related Financial Information
• IFRS S2 Climate-related Disclosures
The group has not early adopted these standards.
In May 2023, the International Accounting Standards
Board (IASB) issued ‘International Tax Reform—Pillar Two
Model Rules’, which amended IAS 12 Income Taxes. The
amendments provide temporary relief from accounting for
deferred taxes arising from the Organisation for Economic Co-
operation and Development’s (OECD) international tax reform
(“the reform”), which required large multinational companies
to be subject to a minimum 15% tax rate (global minimum
tax). The amendment to IAS 12 introduces targeted disclosure
requirements, to help investors better understand a company’s
exposure to income taxes arising from the reform, effective
for the financial year ended 30 September 2024. The group
is subject to the Pillar Two Global Anti-Base Erosion Rules
(GloBE) and has applied the temporary exception to the
94
Nufarm Limited | Annual Report 2023
• 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.
(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.
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.
are translated using the exchange rate at the date of the
transaction. Foreign currency gains and losses are included in
net financing costs.
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
(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
Nufarm Limited | Annual Report 2023
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Notes to the consolidated financial statements continued
For the year ended 30 September
3 Significant accounting policies continued
• 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)
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.
• 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
96
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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.
(ii) Non-derivative financial liabilities
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 27.
(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.
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 net
foreign exchange gains or losses.
The full fair value of a hedging derivative is classified as a
non-current asset or liability when the remaining maturity of
the hedged item is more than 12 months; it is classified as
a current asset or liability when the remaining maturity of the
hedged item is less than 12 months. Trading derivatives are
classified as a current asset or liability.
The group designates certain derivatives as either:
• hedges of the fair value of recognised assets or liabilities or a
firm commitment (fair value hedges);
• hedges of a particular risk associated with the cash flows of
recognised assets and liabilities and highly probable forecast
transactions (cash flow hedges); or
• hedges of a net investment in a foreign operation (net
investment hedges).
The group documents at the inception of the hedging
transaction the relationship between hedging instruments and
hedged items, as well as its risk management objective and
strategy for undertaking various hedge transactions.
The 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 net financing 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 net financing costs.
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
Amounts accumulated in equity are reclassified to profit or loss
in the periods when the hedged item affects profit or loss (for
instance when the forecast sale that is hedged takes place).
The gain or loss relating to the effective portion of interest rate
swaps hedging variable rate borrowings is recognised in profit
or loss within net financing costs. The gain or loss relating
to the effective portion of forward foreign exchange contracts
hedging foreign currency revenues is recognised in profit or loss
within ‘revenue’. However, when the forecast transaction that
is hedged results in the recognition of a non-financial asset (for
example, inventory or property, plant and equipment) 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 property, plant
and equipment.
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.
Gains and losses accumulated in equity are reclassified to
profit or loss when the foreign operation is partially disposed
of or sold.
Derivatives that do not qualify 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 within net foreign exchange gains or losses.
(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.
Nufarm Limited | Annual Report 2023
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Notes to the consolidated financial statements continued
For the year ended 30 September
3 Significant accounting policies continued
When parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items
(major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant
and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and
equipment and are recognised net in 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 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
(f) Intangible assets
(i) Goodwill
Goodwill that arises upon the acquisition of business
combinations is included in intangible assets. Subsequent
to initial recognition, goodwill is measured at cost less
accumulated impairment losses. In respect of equity accounted
investees, the carrying amount of goodwill is included in the
carrying amount of the investment, and an impairment loss on
such an investment is not allocated to any asset, including
goodwill, that forms part of the carrying amount of the equity
accounted investee.
(ii) Intellectual property
Intellectual property consists of product registrations, product
access rights, copyright, patents, 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.
98
Nufarm Limited | Annual Report 2023
(iii) Computer software
Computer software the group controls, 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.
(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.
(vi) Amortisation of intangible assets
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
(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 in profit or loss within net financing costs.
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):
1 the amount of the initial measure of the lease liability, as
described above;
2 any lease payments made at or before the commencement
date, less any lease incentives received;
3 any initial direct costs incurred by the lessee; and
4 an estimate of the costs to be incurred by the lessee in
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.
(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 the statement of profit or loss and other
comprehensive income.
(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
Nufarm Limited | Annual Report 2023
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Notes to the consolidated financial statements continued
For the year ended 30 September
3 Significant accounting policies continued
available for use, the recoverable amount is estimated at each
reporting date.
depreciated. In addition, equity accounting of equity accounted
investees ceases once classified as held for sale or distribution.
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 21 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
100 Nufarm Limited | Annual Report 2023
Refer to note 12 for assets held for the sale during the period.
(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.
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.
(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.
rights is expensed over the relevant vesting period. For further
information refer to note 25 for further details on the plan.
(iv) Termination benefits
Termination benefits are recognised as an expense when
the group is demonstrably committed, without a realistic
possibility of withdrawal, to a formal detailed plan to either
terminate employment before the normal retirement date, or
to provide termination benefits as a result of an offer made
to encourage voluntary redundancy. Termination benefits for
voluntary redundancies are recognised as an expense if the
group has made an offer encouraging voluntary redundancy, it
is probable that the offer will be accepted and the number of
acceptances can be estimated reliably. If benefits are payable
more than twelve months after the reporting period, then they
are discounted to their present value.
The group has a executive incentive plan (EIP) which is
available to key executives. Subject to the achievement
of certain performance conditions in the first year, a pre-
determined percentage of the EIP is paid in cash with
the remainder deferred into rights to ordinary shares which
have vesting periods of one to three years following the
year in which the performance conditions are measured.
The deferred rights are subject to service vesting conditions,
applicable performance conditions, and may include market
based performance conditions. The cash portion is recognised
immediately as an expense at the time of performance testing.
The fair value of the EIP rights is expensed over the vesting
period including the year in which the performance measures
are measured. Refer to note 25 for further details on this plan.
(v) Short-term benefits
(l) Provisions
Short-term employee benefit obligations are measured on an
undiscounted basis and are expensed as the related service
is provided.
A liability is recognised for the amount expected to be paid
under short-term cash bonus or profit-sharing plans if the
group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee
and the obligation can be estimated reliably.
(vi) Share-based payment transactions
The group has a global share plan for employees whereby
matching and loyalty shares are granted to employees. The
group’s previous global share plan, which was suspended in
December 2020, included loyalty shares granted to employees.
Although the plan is suspended the loyalty component of
the plan will continue until November 2025. The fair value
of matching and loyalty shares granted is recognised as an
expense in profit or loss over the respective service period,
with a corresponding increase in equity. Refer to note 25 for
further details.
The group has short term incentive plans (STI) available to
key executives, senior managers and other managers globally.
For the year ended 30 September 2021 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. Since the year ended
30 September 2022, the STI plans are fully cash settled. The
cash portion is recognised immediately as an expense at the
time of performance testing. The fair value of the STI shares or
rights is expensed over the vesting period including the year in
which the short term incentives are measured. Refer to note 25
for further details on this plan.
The group has a Key Leadership Incentive Plan (KLIP) 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 satisfaction of
service vesting conditions. The fair value of the KLIP rights
is expensed over the relevant vesting period. For further
information refer to note 25 for further details on the plan.
The group has a long term incentive plan (LTIP) in place,
granted on 1 October 2020, which was available to
key executives and certain selected senior managers. The
vesting date for the existing plan was 30 September 2023.
Performance rights were granted to acquire ordinary shares
in the group subject to the achievement of market and non-
market performance conditions. The fair value of the LTIP
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.
(m) Revenue from contracts with customers
Revenue is recognised when the group satisfies a performance
obligation by transferring control of the promised good
or service to a customer at an amount that reflects the
consideration to which the group expects to be entitled in
exchange for the goods or services. Further information about
each source of revenue from contracts with customers and the
criteria for recognition follows.
(i) Revenue from the sale of goods
Revenue from the sale of goods is recognised when
performance obligations are satisfied, and 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).
If the transaction price in a contract for the sale of goods
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 is
constrained until it is highly probable that a significant revenue
reversal will not occur when the uncertainty in respect of the
variable consideration is resolved. Some contracts for the sale
of goods provide customers with a right of return and volume
rebates. The rights of return and volume rebates give rise to
variable consideration.
Nufarm Limited | Annual Report 2023
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Notes to the consolidated financial statements continued
For the year ended 30 September
3 Significant accounting policies continued
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.
(ii) Revenue from services, licenses and royalties
The group earns revenue from the provision of services to
customers, with revenue recognised over time as the services
are performed and the performance obligations satisified.
Revenue from licenses of intellectual property are either
recognised at a point in time or over time. Where a license
represents a license to use the intellectual property as it exists
at the point in time in which the license is granted, then
the revenue is recognised at a point in time (subject to any
constraints applied against variable consideration). Where a
license represents a license to access the intellectual property,
then the revenue is recognised over time.Typically, the group
earns revenues from licenses at a point in time.
Where a contract contains a sales or usage based element,
such as a royalty linked to the amount of grain harvested
from a particular seed sale, or generation of oil with respect
to specific varieties of seed by a customer through the use of a
license of intellectual property relevant to the end product, this
sales or usage based element is recognised over time as the
performance obligations are satisified.
If the consideration in a contract includes a variable amount
of consideration to which it will be entitled in exchange for the
services, licensing or royalties, then the variable consideration
is estimated at contract inception and is constrained until it is
highly probable that a significant revenue reversal will not occur
when the uncertainty in respect of the variable consideration
is resolved. The group uses both the expected value method
and the most likely value method when estimating the total
variable consideration based on the terms of the contracts with
customers. In certain circumstances the group is required to
allocate the variable consideration to performance obligations,
and this is done so based on their relative stand-alone selling
price, considering discounts and variable amounts. In situations
in which a stand-alone selling price is not directly observable,
the group uses the expected cost plus margin approach, and
the residual approach, to estimate the stand-alone selling price
over the life of the contract with customers.
(iii) Other income
Other income is derived from net income realised from activities
that are outside of the ordinary business of the group.
(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
102 Nufarm Limited | Annual Report 2023
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.
Further, in respect of contracts with customers that cover
multiple periods, the group assesses whether there is a
significant financing component in the contracts, including
whether the customer has paid in advance and the timing of
the transfer is at its discretion, or whether a substantial amount
of the consideration is variable and the amount or timing of
the consideration varies on a future event not substantially
within the control of the customer of the group, or whether the
difference between the promised consideration and the cash
selling price arose for reasons other than financing.
(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, 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.
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 following).
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.
Nufarm Limited | Annual Report 2023
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Notes to the consolidated financial statements continued
(v) Derivatives
The fair value of forward exchange contracts is based on
their listed market price, if available. If a listed market price
is not available, then fair value is estimated by discounting
the difference between the contractual forward price and the
current forward price for the residual maturity of the contract
using a risk-free interest rate (based on Government bonds).
The fair value of interest rate swaps is based on broker quotes.
Those quotes are tested for reasonableness by future cash
flows based on the terms and maturity of each contract and
using market interest rates for a similar instrument at the
measurement date.
(vi) Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is
calculated based on the present value of future principal and
interest cash flows, discounted at the market rate of interest
at the reporting date. For finance leases, the market rate of
interest is determined by reference to similar lease agreements.
(vii) Share-based payment transactions
The fair value of the rights to ordinary shares issued under the
respective Nufarm incentive plans have been measured using
Monte Carlo Simulation or the Binomial Tree. 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).
For the year ended 30 September
3 Significant accounting policies continued
Segment capital expenditure is the total cost incurred during
the period to acquire property, plant and equipment (excluding
right-of-use assets) and intangible assets other than goodwill.
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 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.
104 Nufarm Limited | Annual Report 2023
5 Operating segments
Segment information is presented in respect of the group’s key
operating segments. The operating segments are based on the
group’s management and internal reporting structure.
Operating segments
The group operates predominantly along two business lines,
being crop protection and seed technologies.
The crop protection business deals in the manufacture and
sale of crop protection products used by farmers to protect
crops from damage caused by weeds, pests and disease.
It is managed by major geographic segments, being APAC
(including Australia, New Zealand and certain parts of Asia);
Europe (including the United Kingdom, the European Union,
and certain other countries in Europe, the Middle East and
Africa) and North America (including United States of America,
Canada and Mexico).
The seed technologies business comprises the base seeds,
bioenergy, nutritionals and seed treatment platforms. These
platforms generate revenues through the sale of seed or oil
based products, and licensing of intellectual property. The seed
technologies business is managed on a worldwide basis.
Information regarding the results of each operating segment is
included below. Performance is measured based on underlying
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, and unallocated interest-bearing loans,
borrowings and corporate assets. From April 2020, the non-
operating corporate segment revenue represented revenue
earned on delivering products under the 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. As the contract expired in March 2022,
there is expected to be no corporate revenue for the year
ended 30 September 2023 (and into the future) with respect
to this agreement.
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2023
Operating Segments
Revenue
Crop Protection
APAC
$000
Europe
$000
North
America
$000
Total
$000
Seed
Technologies
Global
Non
Operating
Corporate Group Total
$000
$000
$000
Total segment revenue
970,504
857,214
1,259,811
3,087,529
393,082
-
3,480,611
Results
Underlying EBITDA1
Depreciation & amortisation excluding
material items
87,709
164,768
161,060
413,537
98,052
(73,419)
438,170
(16,745)
(92,073)
(33,142)
(141,960)
(45,430)
(984)
(188,374)
Underlying EBIT1
70,964
72,695
127,918
271,577
52,622
(74,403)
249,796
Material items included in operating profit (refer note 6)
Net financing costs
Profit/(loss) before tax
(10,393)
(84,576)
154,827
1 Underlying EBIT is earnings before net finance costs, taxation and material items. Underlying EBITDA is Underlying EBIT before depreciation, amortisation and
material items.
2022
Operating Segments
Revenue
Crop Protection
APAC
$000
Europe
$000
North
America
$000
Total
$000
Seed
Technologies
Global
Non
Operating
Corporate
Group Total
$000
$000
$000
Total segment revenue
1,038,424
894,931
1,350,190
3,283,545
296,311
193,114
3,772,970
Results
Underlying EBITDA1
Depreciation & amortisation excluding
material items
134,534
171,109
147,899
453,542
58,544
(65,335)
446,751
(17,298)
(129,763)
(30,778)
(177,839)
(31,343)
(908)
(210,090)
Underlying EBIT1
117,236
41,346
117,121
275,703
27,201
(66,243)
236,661
Material items included in operating profit (refer note 6)
Net financing costs
Profit/(loss) before tax
(28,374)
(80,184)
128,103
1 Underlying EBIT is earnings before net finance costs, taxation and material items. Underlying EBITDA is Underlying EBIT before depreciation, amortisation and
material items.
Nufarm Limited | Annual Report 2023
105
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Notes to the consolidated financial statements continued
For the year ended 30 September
5 Operating segments continued
2023
Operating Segments
Assets
Segment assets
Assets held for sale
Equity accounted & other investments
Total assets
Liabilities
Segment liabilities
Total liabilities
Other segment information
Crop Protection
APAC
$000
Europe
$000
North
America
$000
Seed
Technologies
Global
Non
Operating
Corporate
$000
$000
Total
$000
Group
Total
$000
710,361
1,356,419
1,304,654
3,371,434
719,057
455,427
4,545,918
10,818
1,870
-
2,921
-
-
10,818
4,791
-
-
1,136
62,404
10,818
68,331
723,049
1,359,340
1,304,654
3,387,043
720,193
517,831
4,625,067
327,567
280,364
231,915
839,846
128,204
1,347,127
2,315,177
327,567
280,364
231,915
839,846
128,204
1,347,127
2,315,177
Capital expenditure (cash basis)1
28,688
95,120
45,587
169,395
65,106
7,771
242,272
1 Capital expenditure includes cash investments in property, plant and equipment, intangibles and other investments but excludes right of use lease assets
2022
Operating Segments
Assets
Segment assets
Assets held for sale
Equity accounted & other investments
Total assets
Liabilities
Segment liabilities
Total liabilities
Other segment information
Crop Protection
APAC
$000
Europe
$000
North
America
$000
Seed
Technologies
Global
Non
Operating
Corporate
$000
$000
Total
$000
Group
Total
$000
745,488
1,273,606
1,320,015
3,339,109
618,741
636,498
4,594,348
3,438
2,165
-
3,514
-
-
3,438
5,679
-
-
1,188
54,445
3,438
61,312
751,091
1,277,120
1,320,015
3,348,226
619,929
690,943
4,659,098
678,181
252,309
376,031
1,306,521
90,662
1,109,194
2,506,377
678,181
252,309
376,031
1,306,521
90,662
1,109,194
2,506,377
Capital expenditure (cash basis)1
20,579
70,894
26,923
118,396
77,963
44,693
241,052
1 Capital expenditure includes cash investments in property, plant and equipment, intangibles and other investments but excludes right of use lease assets
106 Nufarm Limited | Annual Report 2023
Geographical information - revenue by location of customer
United States of America
Australia
Rest of world1
Total
Revenue
2023
$000
2022
$000
1,047,598
1,104,667
770,257
1,662,756
3,480,611
801,219
1,867,084
3,772,970
1 Other than Australia 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
United States of America
United Kingdom
Germany
Australia
Rest of world1
Unallocated2
Total
Non-current assets
2023
$000
468,925
433,084
385,942
351,563
234,834
176,267
2022
$000
453,371
346,587
381,766
339,798
211,676
164,801
2,050,615
1,897,999
1 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.
2 Unallocated non-current assets predominately include deferred tax assets.
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Nufarm Limited | Annual Report 2023
107
Notes to the consolidated financial statements continued
For the year ended 30 September
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.
2023
$000
2023
$000
pre-tax
after-tax
2022
$000
pre-tax
2022
$000
after-tax
2,312
(12,705)
1,654
(12,705)
-
-
-
-
-
-
(29,454)
(28,191)
-
(25,772)
1,080
-
-
(18,767)
1,080
20,119
(25,759)
(10,393)
(11,051)
(54,146)
ended 30 September 2022 market conditions in relation to
the terms of the contract improved. The group assessed that
the full provision previously recognised, would no longer be
required, and it was fully reversed. The contract expired in
March 2022.
Deferred tax adjustments
Australian Accounting Standards require that the group
recognises a deferred tax asset arising from unutilised tax
losses and tax credits, to the extent that it is probable that
future taxable profit will be available, against which the tax
losses and tax credits can be utilised. The net recognition of
the deferred tax assets of $20.119 million in respect of the tax
losses, during the year ended 30 September 2022, reflected
improved financial performance and outlook for the group.
Material items by category:
Transactions related to Russia and Ukraine
Asset rationalisation and restructuring
Debt refinancing costs
Transactions related to South American Business disposal
Deferred tax asset recognition
Total profit/(loss)
30 September 2023 Material items
Transactions related to Russia and Ukraine
During the year ended 30 September 2023, the group has
continued to assess the recoverability of assets, primarily trade
receivables and inventories, in respect of the group’s operations
in Russia and Ukraine. The group has determined to cease
operations in its Russian legal entity. The group continues
to operate in Ukraine to support growers through sales of
seed and crop protection products. The amounts recognised
as material items during the year ended 30 September 2023
include reversals of previously recognised expenses pertaining
to receivables and inventories, and the recognition in profit/
(loss) of foreign currency translation reserve balances previously
recognised in other comprehensive income. At 30 September
2023, the total remaining assets in Ukraine make up less than
half a percent of total group assets.
Asset rationalising and restructuring
During the year ended 30 September 2023, the group has
ceased operating specific legal entities and begun liquidation
proceedings. As a result, a non-cash material item has been
incurred with respect to the recognition in profit/(loss) of foreign
currency translation reserve balances previously recognised in
other comprehensive income.
30 September 2022 Material items
Transactions related to Russia and Ukraine
During the year ended 30 September 2022 the group assessed
the recoverability of assets, primarily trade receivables and
inventories, in respect of the group’s operations in Russia and
Ukraine and recognised a pre tax expense of $29.5 million
following this assessment. At 30 September 2022, the total
assets in Ukraine and Russia made up less than half a percent
of total group assets.
Debt refinancing costs
During the year ended 30 September 2022 the group
refinanced its high yield bond and incurred costs related to
early redemption call premium and accelerated amortisation of
deferred debt establishment transaction costs.
Transactions related to South American business
disposal – onerous contract provision reversal
During the period ended 31 July 2020 the group entered into
a supply agreement contract 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
108 Nufarm Limited | Annual Report 2023
5,721
-
5,721
5,721
Cost of sales
(16,278)
-
-
(16,278)
(16,278)
Material items are classified by function as follows:
2023
$000
Transactions related to Russia and Ukraine
Asset rationalisation and restructuring
Total material items
Total material items included in operating
profit/(loss)
2022
$000
Transactions related to Russia and Ukraine
Debt refinancing costs
Transactions related to South American
Business disposal
Total material items
Total material items included in operating
profit/(loss)
Material items impacting cash flows are as follows:
2023
Cash flows from operating activities
Net operating cash flows
Cash flows from investing activities
Net investing cash flows
Cash flows from financing activities
Net financing cash flows
Selling,
marketing and
distribution
expense
General &
administrative
expense
Net
financing costs
Cost of sales
-
-
-
-
(3,409)
(12,705)
(16,114)
(16,114)
-
-
-
-
Selling, marketing
and distribution
expense
General &
administrative
expense
Net financing
costs
-
-
-
-
-
(13,176)
-
-
(25,772)
-
(25,772)
1,080
(12,096)
(12,096)
-
(28,374)
Underlying
Material items
Total group
$000
$000
$000
(124,630)
(990)
(125,620)
(241,731)
185,980
-
-
(241,731)
185,980
Net operating, investing and financing cash flows
(180,381)
(990)
(181,371)
2022
Cash flows from operating activities
Net operating cash flows
Cash flows from investing activities
Net investing cash flows
Cash flows from financing activities
Net financing cash flows
Underlying
Material items
Total group
$000
$000
$000
366,120
(6,551)
359,569
(240,409)
-
(240,409)
(245,378)
(18,988)
(264,366)
Net operating, investing and financing cash flows
(119,667)
(25,539)
(145,206)
Nufarm Limited | Annual Report 2023
109
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Total
Pre-tax
2,312
(12,705)
(10,393)
(10,393)
Total
Pre-tax
(29,454)
(25,772)
1,080
(54,146)
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Notes to the consolidated financial statements continued
For the year ended 30 September
7 Revenue from contracts with customers and other income
The following sources of revenue from contracts with customers were recognised in the period result:
Sources of revenue from contracts with customers
Revenue from the sale of goods
Revenue from services, licenses and royalties
Total revenue
2023
$000
2022
$000
3,425,334
3,753,782
55,277
19,188
3,480,611
3,772,970
The following sources of other income, derived outside of the ordinary course of business, were recognised in the period result:
Other income
Rental income
Sundry income
Total other income
8 Other expenses
The following expenses were included in the period result:
2023
Depreciation and amortisation
Inventory write down
2022
Depreciation and amortisation
Inventory write down
2023
$000
36
5,003
5,039
2022
$000
48
9,003
9,051
Underlying
Material items
Total group
$000
188,374
15,140
210,090
42,000
$000
-
(5,721)
3,590
16,278
$000
188,374
9,419
213,680
58,278
110
Nufarm Limited | Annual Report 2023
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
Personnel expenses
10 Finance income and expense
Other financial income
Financial income
Interest expense – external
Interest expense – debt establishment transaction costs
Debt redemption costs
Lease liability – interest expense
Net foreign exchange gains/(losses)
Financial expenses
Net financing costs
2023
$000
359,342
58,023
16,579
3,439
7,260
2,206
2022
$000
312,104
49,117
12,217
2,110
6,582
4,112
446,849
386,242
2023
$000
5,383
5,383
(67,680)
(6,590)
-
(8,528)
(7,161)
(89,959)
2022
$000
2,381
2,381
(43,474)
(9,755)
(18,988)
(7,510)
(2,838)
(82,565)
(84,576)
(80,184)
Nufarm Limited | Annual Report 2023
111
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Notes to the consolidated financial statements continued
For the year ended 30 September
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 on underlying and material items
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 on underlying items
(Recognition)/non-recognition of tax losses on material items
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
112
Nufarm Limited | Annual Report 2023
2023
$000
2022
$000
51,046
2,880
(726)
53,200
(1,537)
(2,246)
(5,730)
(9,513)
31,355
4,361
2,434
38,150
12,008
(105)
(29,388)
(17,485)
43,687
20,665
2023
$000
2022
$000
154,827
128,103
46,448
38,431
3,813
4,416
1,111
(2,246)
(5,730)
-
2,880
(5,688)
-
(591)
44,413
(726)
43,687
2023
$000
(3,949)
(3,949)
(1,728)
950
(778)
3,310
3,640
1,612
(105)
(9,269)
(20,119)
4,361
(2,217)
-
(1,413)
18,231
2,434
20,665
2022
$000
(2,489)
(2,489)
3,998
(359)
3,639
12 Assets held for sale
During the period ended 31 July 2020 the group announced a group wide performance improvement program, relating to asset
rationalisation and organisational restructuring. As part of this program, the manufacturing operations of the Raymond Road site in
Laverton Australia, forming part of the APAC segment, were closed. During the year ended 30 September 2022 the group approved
the sale of the Raymond Road site and entered into a asset sale agreement.
During the year ended 30 September 2023, remediation activity with regards to the site has been ongoing such that the asset sale
agreement settlement has been extended. During the year, the group has recognised an additional $7.380 million of assets held for
sale relating to the agreed remeditation works incurred to prepare the site for final sale. The group continues to report the assets as
held for sale at 30 September 2023, with settlement expected to occur during the next financial year.
Land and buildings
Total assets held for sale
2023
$000
10,818
10,818
2022
$000
3,438
3,438
13 Business combinations and acquisition of non-controlling interests
Acquisitions in 2023
On 8 November 2022, the group announced that it had entered into an agreement to purchase Sonic Boomsprays (Sonic)
a Western Australian owned and operated sprayer manufacturer. The acquisition of Sonic follows the expansion of Croplands’
Adelaide manufacturing site and will mean the company has additional capacity and operating efficiencies to meet the needs of
growers across Australia.
The acquisition included a cash consideration of $4.8 million paid on the acquisition date. Since acquisition date, Sonic has
contributed $1.356 million to the group's operating profit. Revenue and profit from the acquisition that would have been earned
if the acquisition had occurred at the commencement of the financial year has not been provided on the basis that the amounts
would not be significant.
Acquiree's net assets at acquisition date
Net identifiable assets and liabilities
Goodwill on acquisition
Cash consideration paid
Total consideration
Preliminary
acquisition
fair value
$000
3,205
1,595
4,800
4,800
Total goodwill of $1.595 million from the business combination is attributable to synergies expected to be achieved from integrating
Sonic into the group's existing Croplands' business.
Acquisitions in 2022
On 9 September 2022, the group announced that it had entered into an agreement with GranBio Investimentos SA (GranBio)
group, a leading Brazilian industrial biotechnology group, to acquire its energy cane business. The acquisition included energy
cane production assets including germplasm, breeding materials and related processes, together with products in various stages of
development and customer contracts. The acquisition included cash consideration of USD 23 million paid on the acquisition date,
contingent consideration of USD 2 million payable upon satisfaction of certain conditions subsequent, and contingent consideration
based upon agreed revenues earned until 30 June 2034.
The acquisition is highly complementary to the group’s existing bioenergy platform within the Seed Technology segment. The
business expects to extract revenue synergies from the acquisition via the existing bioenergy platform and established model
enabling the Seed Technology segment to provide advanced feedstocks to a broader suite of energy forms.
In the period from 9 September 2022 to 30 September 2022, the acquisition did not contribute any additional revenues, whilst the
contribution to operating profit was a loss of $0.134 million. Revenue and profit from the acquisition that would have been earned
if the acquisition had occurred at the commencement of the financial year has not been provided on the basis that the calculation
of that information is impracticable. This is because the business was fully integrated into the vendor’s operations and separate
comparable financial information relating to the acquired business as a stand-alone operation was not available.
Nufarm Limited | Annual Report 2023
113
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Notes to the consolidated financial statements continued
For the year ended 30 September
13 Business combinations and acquisition of non-controlling interests continued
Acquiree's net assets at acquisition date
Intangible assets
Property, plant and equipment
Net identifiable assets and liabilities
Goodwill on acquisition
Cash consideration paid
Contingent consideration
Total consideration
Preliminary
acquisition
fair value
$000
39,250
1,255
40,505
2,895
33,965
9,435
43,400
Total goodwill of $2.895 million from the business combination is attributable to the synergies expected to be achieved from
integrating the respective businesses into the group’s existing Seed Technologies business.
Since the acquisition date, there have been no changes in the acquisition date fair values of the net assets acquired.
Acquisition of non-controlling interest
There were no acquisition of non-controlling interest in the current or prior period.
14 Cash and cash equivalents
Bank balances
Call deposits
Bank overdraft
2023
$000
408,856
2,101
410,957
-
2022
$000
578,159
7,543
585,702
-
Total cash and cash equivalents
410,957
585,702
114
Nufarm Limited | Annual Report 2023
15 Trade and other receivables
Current
Trade receivables
Provision for impairment losses
Prepayments
Derivative financial instruments
Other receivables
Current receivables
Non-current
Other receivables
Other receivables - associates
Non-current receivables
Total trade and other receivables
16 Inventories
Raw materials
Work in progress
Finished goods
Provision for obsolescence and valuation adjustments of inventories
Total inventories
2023
$000
530,417
(25,232)
505,185
34,640
12,073
118,887
670,785
4,390
2,046
6,436
2023
$000
477,464
(30,945)
446,519
27,277
24,734
51,721
550,251
3,778
-
3,778
677,221
554,029
2023
$000
420,706
34,728
1,048,613
1,504,047
2022
$000
582,421
26,481
1,051,399
1,660,301
(40,036)
(57,844)
1,464,011
1,602,457
For the year ended 30 September 2023 the value of inventory was written down by $9.419 million (30 September 2022:
$58.278 million), refer note 8 for additional information.
Nufarm Limited | Annual Report 2023
115
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Notes to the consolidated financial statements continued
For the year ended 30 September
17 Tax assets and liabilities
Current tax assets and liabilities
The current tax asset for the group of $17.881 million (2022: $19.251 million) represents the amount of income taxes recoverable
in respect of the current and 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 $15.753 million (2022: $10.773 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
2023
$000
16,112
13,255
16,422
27,461
53,886
80,587
207,723
(31,456)
176,267
2022
$000
10,750
10,052
19,282
25,898
31,200
77,070
174,252
2023
$000
(14,532)
(101,718)
(585)
(22,977)
(41,328)
2022
$000
(6,580)
(101,061)
-
(20,466)
(27,485)
(3)
-
(181,143)
(155,592)
(9,451)
31,456
9,451
2023
$000
1,580
(88,463)
15,837
4,484
12,558
80,584
26,580
-
164,801
(149,687)
(146,141)
26,580
2022
$000
4,170
(91,009)
19,282
5,432
3,715
77,070
18,660
-
18,660
Movement in temporary differences during the period
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
Recognised
Recognised
Currency
Balance
2022
$000
4,170
(91,009)
19,282
5,432
3,715
77,070
18,660
in income
in equity
adjustment
$000
(2,375)
5,169
(5,640)
(1,234)
9,750
3,843
9,513
$000
-
-
1,728
-
(950)
-
778
$000
(215)
(2,623)
467
286
43
(329)
(2,371)
2023
$000
1,580
(88,463)
15,837
4,484
12,558
80,584
26,580
Balance
Recognised
Recognised
Currency
Balance
2021
$000
4,964
(83,094)
23,332
4,426
14,809
44,282
8,719
in income
in equity
adjustment
$000
(968)
(2,204)
1,144
917
(11,345)
29,941
17,485
$000
-
-
(3,998)
-
359
-
(3,639)
$000
174
(5,711)
(1,196)
89
(108)
2,847
(3,905)
2022
$000
4,170
(91,009)
19,282
5,432
3,715
77,070
18,660
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.
116
Nufarm Limited | Annual Report 2023
Deferred tax assets and liabilities
Unrecognised deferred tax liability
At 30 September 2023, a deferred tax liability of $42.547 million (2022: $36.867 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 2023, there are unrecognised deferred tax assets in respect of tax losses and timing differences of
$216.876 million (2022: $216.374 million).
18 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
Associate1
Australia
31 December
Leshan Nong Fu Trading Co., Ltd
Joint Venture2
China
31 December
Crop.zone GmbH
Associate3
Germany
31 December
Ownership and voting interest
2023
25.00%
35.00%
14.77%
2022
25.00%
35.00%
14.77%
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 percent 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 up
to a maximum amount of RMB 100 million ($21.645 million). This commitment has not been recognised in this consolidated financial statements.
3 Crop.zone is an Agtech start-up which provides electrophysical solutions to replace chemical herbicides in select market segments. During the period additional capital
contributions were provided which raised the group's ownership interest to 14.77 per cent. The 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.
Carrying amount
Share of profit/(loss)
Seedtech Pty Ltd
Leshan Nong Fu Trading Co., Ltd
Crop.zone GmbH
19 Other investments
Non-current investments
Other investments
Total non-current investments
2023
$000
762
1,870
2,895
5,527
2022
$000
808
2,164
3,490
6,462
2023
$000
(45)
(250)
(889)
(1,184)
2023
$000
62,804
62,804
2022
$000
144
3
(239)
(92)
2022
$000
54,850
54,850
In November 2022, the group increased its investment, by USD 5 million, in Enko Chem, a crop protection innovation company
specialising in the discovery and development of novel products for growers that meet demands of growers, consumers and
regulators globally. The group intends to hold this investment for the long term for strategic purposes and has designated the
investment at FVOCI.
Since inception, the group has recognised an increase in the investment fair value of $6.637 million, in respect of the investment in
Enko Chem, as at 30 September 2023 (30 September 2022: $6.403 million) through other comprehensive income.
Nufarm Limited | Annual Report 2023
117
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Notes to the consolidated financial statements continued
For the year ended 30 September
20 Property, plant and equipment
Cost
Balance at 1 October 2022
Additions
Additions through business combinations
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2023
Accumulated depreciation and impairment losses
Balance at 1 October 2022
Depreciation charge for the period
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2023
Land and
buildings
$000
Plant and
machinery
Capital work in
progress
$000
$000
342,501
13,790
-
(1,724)
20,572
11,385
386,524
(164,420)
(21,647)
448
(4,669)
(5,694)
(195,982)
732,001
31,069
494
(9,417)
18,324
28,541
801,012
(530,555)
(43,820)
9,250
4,669
(20,495)
(580,951)
Total
$000
1,170,306
142,151
494
(11,141)
-
44,455
95,804
97,292
-
-
(38,896)
4,529
158,729
1,346,265
-
-
-
-
-
-
(694,975)
(65,467)
9,698
-
(26,189)
(776,933)
Net property, plant and equipment at 30 September 2023
190,542
220,061
158,729
569,332
Cost
Balance at 1 October 2021
Additions
Additions through business combinations
Disposals and write-offs
Transfer to assets held for sale
Other transfers
Foreign exchange adjustment
Balance at 30 September 2022
Accumulated depreciation and impairment losses
Balance at 1 October 2021
Depreciation charge for the period
Disposals and write-offs
Transfer to assets held for sale
Other transfers
Foreign exchange adjustment
Balance at 30 September 2022
Land and
buildings
$000
334,422
18,439
669
(6,662)
(8,648)
(305)
4,586
Plant and
machinery
Capital work in
progress
$000
$000
Total
$000
728,144
17,712
586
(22,215)
-
16,541
(8,767)
47,064
64,248
1,109,630
100,399
-
-
-
(16,236)
728
1,255
(28,877)
(8,648)
-
(3,453)
342,501
732,001
95,804
1,170,306
(154,097)
(20,330)
5,536
5,210
1,039
(1,778)
(514,166)
(40,799)
17,936
-
(1,039)
7,513
(164,420)
(530,555)
-
-
-
-
-
-
-
(668,263)
(61,129)
23,472
5,210
-
5,735
(694,975)
Net property, plant and equipment at 30 September 2022
178,081
201,446
95,804
475,331
118
Nufarm Limited | Annual Report 2023
21 Intangible assets
Goodwill
$000
Intellectual
Property
Computer
software
Capitalised
development
costs
$000
$000
$000
Cost
Balance at 1 October 2022
380,791
1,092,366
Additions
Additions through business combinations
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2023
-
1,595
-
-
18,063
400,449
Accumulated amortisation and impairment losses
Balance at 1 October 2022
(165,076)
3,247
1,212
(5,081)
2,393
61,102
1,155,239
(549,129)
(60,041)
5,081
9,534
(30,409)
(624,964)
-
-
-
(11,645)
(176,721)
Amortisation charge for the period
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2023
Intangibles carrying amount at
30 September 2023
Cost
Balance at 1 October 2021
379,843
1,094,293
Additions
Additions through business combinations
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2022
Accumulated amortisation and impairment losses
Balance at 1 October 2021
Amortisation charge for the period
Disposals and write-offs
Other transfers
Foreign exchange adjustment
Balance at 30 September 2022
Intangibles carrying amount at
30 September 2022
-
2,895
-
-
(1,947)
4,920
39,250
(111)
(28,918)
(17,068)
380,791
1,092,366
(172,470)
-
-
-
7,394
(475,920)
(78,422)
29
526
4,658
(165,076)
(549,129)
223,728
530,275
21,989
454,257
1,230,249
F
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n
a
n
c
a
i
l
Goodwill
$000
Intellectual
Property
$000
Computer
software
$000
Total
$000
2,267,067
97,115
2,807
(5,744)
-
128,684
2,489,929
705,977
91,450
-
(663)
(2,286)
44,179
838,657
(300,077)
(1,074,290)
(52,831)
(122,907)
153
(9,650)
(21,995)
5,239
-
(67,722)
(384,400)
(1,259,680)
R
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Capitalised
development
costs
$000
628,404
79,468
-
(4,747)
28,722
(25,870)
Total
$000
2,193,086
85,090
42,145
(4,858)
-
(48,396)
705,977
2,267,067
(251,075)
(62,320)
552
(526)
(949,255)
(152,551)
581
-
13,292
26,935
(300,077)
(1,074,290)
87,933
2,418
-
-
(107)
5,340
95,584
(60,008)
(10,035)
5
116
(3,673)
(73,595)
90,546
702
-
-
196
(3,511)
87,933
(49,790)
(11,809)
-
-
1,591
(60,008)
F
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543,237
27,925
405,900
1,192,777
Nufarm Limited | Annual Report 2023
119
Notes to the consolidated financial statements continued
For the year ended 30 September
21 Intangible assets continued
Cash-generating units containing goodwill
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 inflows 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. The
exception to this is Seeds Technologies which is managed on a worldwide basis. There is no allocation of goodwill between CGUs.
The major CGUs and their intangible assets are as follows: North America $186 million (2022: $197 million), Seed Technologies
$461 million (2022: $432 million), Europe $548 million (2022: $534 million) and APAC $31 million (2021: $30 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 group typically uses a value in use methodology when assessing the recoverable amount of the assets, but may also
use a fair value less cost to dispose methodology, in which case the higher of the two valuation methods is used when assessing
recoverable amount.
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.
120 Nufarm Limited | Annual Report 2023
Valuation assumptions
The valuation method, range of terminal growth rates and nominal post-tax discount rates applied for impairment testing purposes
is as follows:
2023
North America CGU
Europe CGU
APAC CGU
Seed Technology CGU
2022
North America CGU
Europe CGU
APAC CGU
Seed Technology CGU
Valuation
method
Terminal
growth rate
Discount rate
Total
goodwill $000
VIU
VIU
VIU
VIU
2.0%
2.3%
2.5%
3.3%
10.3%
11.2%
10.6%
12.9%
58,921
68,146
15,139
79,928
Valuation method
Terminal
growth rate
Discount rate
Total
goodwill $000
VIU
VIU
VIU
VIU
1.9%
2.0%
2.5%
2.6%
9.8%
10.4%
10.3%
13.5%
58,586
62,767
15,265
79,096
The margin and volume assumptions underpinning the cashflow projections 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 CGU below, the directors have determined that given the excess of recoverable amount over
asset carrying value, 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.
Europe cash generating unit
At 30 September 2023 the group used a value in use (VIU) methodology to estimate the recoverable amount of the Europe cash
generating unit (CGU). The key assumptions underlying the value in use calculations are as follows:
• growth in post-tax casflows before working capital changes and capital expenditure for the region of 4.4% per annum between
FY23 and FY28.
• a weighted average terminal growth rate in line with local country economic forecasts of 2.3%; and
• a weighted average post-tax discount rate of 11.2%.
Given the limited headroom identified through the modelling, management estimated the value of the Europe CGU considering
different cashflow scenarios, and applying sensitivities against discount rates and terminal growth rates. While management has
determined that no impairment exists for the year ended 30 September 2023, any future adverse movement in a key assumption
including projected European CGU cashflows, terminal growth rates, and discount rates, in the absence of other factors, may lead
to impairment.
Nufarm Limited | Annual Report 2023
121
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Notes to the consolidated financial statements continued
For the year ended 30 September
22 Trade and other payables
Current payables – unsecured
Trade creditors and accruals – unsecured
Business combination – consideration payable
Derivative financial instruments
Cash advances from customers (contract liabilities)
Current payables
Non-current payables – unsecured
Creditors, accruals and cash advances from customers (contract liabilities)
Business combination – consideration payable
Non-current payables
23 Interest-bearing loans and borrowings
Current liabilities
Bank loans – secured
Bank loans – unsecured
Deferred debt establishment costs
Lease liabilities
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 29 for detail regarding the group’s financing facilities.
2023
Bank loan facilities and senior unsecured notes
Other facilities
Total financing facilities
2022
Bank loan facilities and senior unsecured notes
Other facilities
Total financing facilities
122 Nufarm Limited | Annual Report 2023
2023
$000
2022
$000
673,358
1,147,451
-
6,812
91,513
3,072
11,254
128,235
771,683
1,290,012
23,421
6,912
30,333
2023
$000
18,658
16,690
(6,313)
18,728
47,763
513,043
44,480
540,040
(20,275)
125,947
9,801
1,213,036
22,194
6,633
28,827
2022
$000
239,526
15,033
(3,964)
18,574
269,169
-
398
537,634
(8,371)
123,288
9,752
662,701
(410,957)
(585,702)
849,842
346,168
Accessible
$000
Utilised
$000
1,366,855
1,132,911
9,801
9,801
1,376,656
1,142,712
1,302,559
9,752
1,312,311
792,590
9,752
802,342
Reconciliation of liabilities arising from financing activities
Balance at 1 Oct 2022
Cash changes
Proceeds from borrowings (net of costs)
Repayment of borrowings
Debt establishment transaction costs
Lease liability payments
Total cash flows
Non-cash changes
Loans and
borrowings
– current
Loans and
borrowings
– non-current
Debt related
derivatives
(included in
assets /
liabilities)1
Total debt
related financial
instruments
$000
269,169
64,121
(244,827)
(1,154)
(24,363)
$000
662,701
848,106
(345,297)
(19,688)
-
$000
(7,256)
(34,467)
-
-
-
$000
924,614
877,760
(590,124)
(20,842)
(24,363)
(206,223)
483,121
(34,467)
242,431
Leases entered into during the period net of leases ceased
Foreign exchange movements
Transfer
Amortisation of debt establishment transaction costs
Accelerated amortisation of debt establishment transaction costs
Total non-cash changes
Balance at 30 September 2023
-
7,204
(28,977)
6,590
-
(15,183)
47,763
20,731
17,506
28,977
-
-
67,214
1,213,036
-
36,164
-
-
-
20,731
60,874
-
6,590
-
36,164
(5,559)
88,195
1,255,240
1 Total derivatives balance at 30 September 2023 is a net asset of $5.261 million (2022: $13.480 million net asset). 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.
Reconciliation of liabilities arising from financing activities
Balance at 1 Oct 2021
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
Accelerated amortisation of debt establishment transaction costs
Total non-cash changes
Balance at 30 September 2022
Financing arrangements
449,177
(443,523)
(4,123)
(20,116)
(18,585)
-
11,581
20,666
2,971
-
35,218
269,169
Loans and
borrowings
– current
$000
252,536
Loans and
borrowings
– non-current
$000
788,496
Debt related
derivatives
(included in
assets / liabilities)
Total debt related
financial
instruments
$000
387
(3,843)
-
-
-
$000
1,041,419
497,895
(668,645)
(14,354)
(20,116)
52,561
(225,122)
(10,231)
-
(182,792)
(3,843)
(205,220)
21,484
49,396
(20,666)
-
6,783
56,997
662,701
-
(3,800)
-
-
-
(3,800)
(7,256)
2023
$000
73,213
159,994
21,484
57,177
-
2,971
6,783
88,415
924,614
2022
$000
764,527
398
Without refinancing, expiry of available debt facilities (excluding lease liabilities)
Period ending 30 September 2024 / 30 September 2023
Period ending 30 September 2025 / 30 September 2024
Period ending 30 September 2026 or later / 30 September 2025 or later
1,143,449
547,386
Nufarm Limited | Annual Report 2023
123
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Notes to the consolidated financial statements continued
For the year ended 30 September
23 Interest-bearing loans and borrowings continued
Average interest rates
Nufarm step-up securities
Asset backed loan
Standby liquidity facility
Syndicated bank facility
Group securitisation program facility
Other bank loans
Lease liabilities
Senior unsecured notes
2023
%
7.66
6.63
5.73
n/a
n/a
6.71
5.95
5.00
2022
%
4.86
n/a
n/a
n/a
3.31
3.91
5.26
5.00
Average interest rates are calculated using the weighted average of the interest rates for the drawn balances under each facility as
at 30 September 2023. Undrawn facility fees are paid on undrawn portions of the Asset backed loan, the Standby liquidity facility,
and other bank loans.
24 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
2023
$000
17,065
15,665
32,730
8,322
120,087
(84,588)
43,821
5,312
49,133
81,863
2022
$000
16,162
14,433
30,595
7,687
122,393
(77,650)
52,430
8,851
61,281
91,876
During the period ended 30 September 2023 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.
124 Nufarm Limited | Annual Report 2023
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
Closing defined benefit obligation
Changes in the fair value of fund assets are as follows:
Opening fair value of fund assets
Interest income
Actuarial gains/(losses) – return on plan assets excluding interest income
Surplus taken to retained earnings
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).
2023
$000
2022
$000
130,557
213,422
755
7,141
870
4,136
(14,167)
(69,070)
-
-
-
-
(6,394)
11,126
129,018
77,780
4,437
(7,234)
-
-
8,048
(5,686)
7,393
84,738
-
-
-
-
(6,222)
(12,579)
130,557
130,946
2,548
(49,795)
-
-
8,040
(6,037)
(7,922)
77,780
Nufarm Limited | Annual Report 2023
125
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Notes to the consolidated financial statements continued
For the year ended 30 September
24 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 profit or loss:
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
2023
$000
755
7,141
(4,437)
-
(20)
-
3,439
2022
$000
870
4,136
(2,548)
-
(348)
-
2,110
1,902
1,011
955
520
62
811
251
37
3,439
2,110
2023
$000
(60,104)
5,564
(54,540)
2023
%
76.4%
13.6%
0.3%
8.4%
1.3%
5.4%
3.2%
2.5%
2022
$000
(72,739)
12,635
(60,104)
2022
%
77.0%
14.5%
1.3%
6.7%
0.5%
5.0%
2.9%
2.7%
The group expects to pay $8.340 million in contributions to defined benefit plans during the year ending 30 September 2024 (2023:
$7.621 million).
25 Share-based payments
Nufarm Executive Share Plan (2000)
The Nufarm Executive Share Plan (2000) offered shares to
executives. In August 2011 the group decided to cease the
use of this plan and no awards have been granted since this
time. All awards have vested and converted into unrestricted
shares as at 30 September 2023 and an independent trustee
continues to hold the shares on behalf of participants. At
30 September 2023 there were 2 participants (2022: 3
participants) in the scheme and 2,554 shares (2022: 3,034)
were allocated and held by the trustee on behalf of the
participants. The cost of issuing the shares were 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 incorporates certain financial
and non-financial measures relevant to an individual, including:
• a profit measure (typically underlying EBIT(a) or
underlying EBITDA(a))
• a cash flow measure (typically average net working capital
as a percentage of revenue)
• a return measure (typically return of funds employed, or
return on assets)
• non-financial measures incorporating strategic and business
improvement objectives.
For the year ended 30 September 2021, a pre-determined
percentage of the STI was paid in cash at the time of
126 Nufarm Limited | Annual Report 2023
two, three and four years. For key management personnel the
vesting of the deferred performance rights is conditional upon
satisfaction of certain non-market measures and a relative total
shareholder return measure (market measure) at the end of the
vesting period.
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 four years. At 30 September 2023 there were
90 participants (30 September 2022: 63 participants) in the
scheme and 1,227,500 rights (30 September 2022: 1,025,500)
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 per cent of the number of
ordinary shares acquired with a participant’s contribution in the
form of additional ordinary shares. Amounts over 10 per cent
of the participant’s salary 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 per
cent of the value of the shares acquired with the participant’s
contribution. An independent trustee holds the shares on
behalf of the participants. At 30 September 2023 there were
288 participants (30 September 2022: 343 participants) in
the scheme and 1,213,694 shares (30 September 2021:
1,412,199) were allocated and held by the trustee on behalf
of the participants.
performance testing and the balance was deferred into rights
to shares in the group for nil consideration. The number of
rights to shares granted was based on the volume weighted
average price (VWAP) of Nufarm Limited shares in the 5 days
subsequent to the results announcement. At 30 September
2023, all STI rights have vested and are eligible for exercising
into ordinary shares.
Nufarm Executive Long Term Incentive Plan (LTIP)
On 1 August 2011, the LTIP commenced and was available to
key executives and certain selected senior managers. Awards
were granted to individuals in the form of performance rights,
which comprised rights to acquire ordinary shares in the group
for nil consideration, subject to the achievement of global
performance hurdles. Under the plan, individuals received 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 was three
years. For the year ended 30 September 2023, the group had
one LTIP plan in place, as it is being phased out following the
introduction of the Executive Incentive Plan. LTIP 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.
Executive Incentive Plan (EIP)
The Executive Incentive Plan (EIP) commenced in 2022 and
replaced the STI and LTIP plans for key management personnel
and certain selected senior managers.
The total EIP award opportunity is based on a fixed
percentage of the fixed annual remuneration (or equivalent)
relevant to an individual, and is calculated at the end of the
initial performance year. The calculation incorporates certain
financial and non-financial performance measures relevant to
an individual, including:
• a profit measure (typically underlying EBIT1 or
underlying EBITDA1)
• a cash flow measure (typically average net working capital
as a percentage of revenue)
• a return measure (typically return of funds employed, or
return on assets)
• non-financial measures incorporating strategic and business
improvement objectives
Subject to the achievement of an annual cash award gateway,
the total EIP award opportunity is:
• Where the annual cash award gateway is met: allocated
to an individual as a combination of cash paid (typically
33.33%) and deferred performance rights (typically 66.67%)
in Nufarm ordinary shares for nil consideration.
• Where the annual cash award gateway is not met: allocated
to an individual as deferred performance rights (100%) in
Nufarm ordinary shares for nil consideration.
The number of rights granted is based on the volume weighted
average price of Nufarm Limited shares in the five days
subsequent to the results announcement.
Depending on the role of the individual, the performance and
vesting period for the deferred performance rights vary between
1 Underlying EBIT is earnings before net finance costs, taxation and material items. Underlying EBITDA is Underlying EBIT before depreciation, amortisation
and material items.
Nufarm Limited | Annual Report 2023
127
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Notes to the consolidated financial statements continued
For the year ended 30 September
25 Share-based payments continued
Nushare Share Plan
The Nushare Share Plan commenced in 2022 and offers
shares to all permanent employees who have not given, or
been given, notice of termination. Over an initial six-month
period, employees contribute a percentage or set-amount of
after-tax salary each month, up to 10 per cent of their annual
salary, and an independent trustee acquires shares monthly
at market value. At the end of the initial six-month period, for
every three shares acquired through the plan, employees are
granted one share right. The rights have a subsequent vesting
period of 12 months, with conditions requiring employees
to hold the acquired shares and continue employment with
Employee expenses
Total expense arising from share-based payment transactions
Measurement of fair values
Nufarm over the subsequent month period. Upon satisfaction
of the conditions, the rights will automatically convert into
unrestricted Nufarm ordinary shares. An independent trustee
holds both the acquired shares and the rights on behalf of all
employees. At 30 September 2023 there were 496 participants
(30 September 2022: 311) in the scheme and 127,279 rights
(30 September 2022: 15,718) 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.
2023
$000
5,850
2022
$000
4,606
The number of performance rights to be granted as awards under the EIP corresponds to pre-determined performance levels (i.e.:
Minimum, Target or Maximum) at the beginning of the financial year in respect of the relevant financial and non-financial performance
measures. Eligible employees will receive a variable number of rights ‘to the value of’ these pre-determined amounts. The number
of rights is determined based on the value of the award to be deferred into performance rights, divided by the volume weighted
average price (VWAP) for the five day period subsequent to the period end results announcement.
The EIP performance rights vesting conditions vary depending on the role of the individual, but they are all subject to employment
vesting conditions, and may include both non-market vesting conditions and market vesting conditions (specifically relative total
shareholder return metrics). The LTIP performance rights are also subject to employment vesting conditions, and both non-market
vesting conditions and market vesting conditions (specifically relative total shareholder return metrics). The KLIP performance rights
are subject to employment vesting conditions only. The STIP is not subject to vesting conditions.
To estimate the fair value of the different performance plans, the group utilises a range of valuation techniques including Monte-Carlo
simulation methodologies, Binomial Tree methodologies, and discounted dividend methodologies.
128 Nufarm Limited | Annual Report 2023
The fair value of performance rights granted through the EIP, LTIP, KLIP and STIP were measured as follows:
Weighted
average fair
value at
grant date
Share price
at grant
date
Grant date
Earliest
vesting date
Weighted
average
expected
life
Volatility
Risk free
interest rate
Dividend
yield
Nufarm EIP
performance rights
2022 Plan
$5.68
$5.95 24 Nov 2022 30 Sep 2023
2.3 years
n/a
n/a
1.7%
Nufarm LTIP
performance rights
2021 Plan – 3 year
$2.98
$3.87
1 Oct 2020 30 Sep 2023
3 years
32%
0.2%
1.7%
Nufarm KLIP
performance rights
2023 Plan – 4 year
2022 Plan – 4 year
2021 Plan – 4 year
2020 Plan – 4 year
Nufarm STIP
deferred rights
$4.71
$4.41
$3.60
$4.83
$5.00
1 Oct 2022 30 Sep 2026
$4.72
1 Oct 2021 30 Sep 2025
$3.87
1 Oct 2020 30 Sep 2024
$5.03
1 Aug 2019
31 Jul 2023
4 years
4 years
4 years
4 years
n/a
n/a
32%
30%
n/a
n/a
0.3%
0.9%
1.7%
1.7%
1.8%
1.0%
2021 Plan - 3 year
$4.78
$4.78 24 Nov 2021 30 Sep 2023
3 years
n/a
n/a
n/a
2023
Reconciliation of outstanding
share awards
Outstanding
at period
opening
date
Forfeited
during the
period
Exercised
rights
during the
period
Expired
during the
period
Granted
during the
period
Outstanding
at
30 September
Exercisable
at
30 September
EIP
LTI
KLIP
STI
-
-
-
943,321
(153,576)
(188,868)
1,025,500
(51,000)
(233,500)
484,564
-
-
-
-
-
-
751,317
751,317
174,376
-
600,877
600,877
486,500
1,227,500
-
-
484,564
484,564
2022
Reconciliation of outstanding share awards
Outstanding
at period
opening date
Forfeited
during the
period
Exercised
rights during
the period
Expired
during the
period
Granted
during the
period
Outstanding
at
30 September
Exercisable at
30 September
LTI
KLIP
STI
1,212,422
(269,101)
-
709,798
(105,500)
(83,798)
26,695
-
(26,695)
-
-
-
-
943,321
187,002
505,000
1,025,500
484,564
484,564
-
-
The performance rights outstanding at 30 September 2023 have a $nil exercise price (2022: $nil) and a weighted average
contractual life of 3 years (2022: 3 years). All performance rights granted to date have a $nil exercise price.
Nufarm Limited | Annual Report 2023
129
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Notes to the consolidated financial statements continued
For the year ended 30 September
26 Provisions
Current
Restructuring
Other
Current provisions
Movement in provisions
Balance at 1 October 2022
Provisions made during the period
Provisions reversed during the period
Provisions used during the period
Exchange adjustment
Balance at 30 September 2023
2023
$000
5,059
-
5,059
Restructuring
Other provision
$000
6,878
-
-
(2,039)
220
5,059
$000
-
-
-
-
-
-
2022
$000
6,878
-
6,878
Total
$000
6,878
-
-
(2,039)
220
5,059
The provision for restructuring is mainly relating to the asset rationalisation and restructuring being undertaken by the group.
27 Capital and reserves
Share capital
Balance at 1 October
Issue of shares
Balance at 30 September
Number of
ordinary shares
Number of
ordinary shares
2023
2022
380,168,745
379,907,116
595,508
261,629
380,764,253
380,168,745
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.
During the period the following shares were issued:
• On 25 November 2022, 188,868 shares at $5.95 were
issued under Employee Incentive Plan
• On 9 December 2022, 59,890 shares at $6.06 were issued
under the Dividend Reinvestment Plan
• On 21 February 2023, 56,527 shares at $5.69 were issued
under the Global Share Plan
• On 9 June 2023, 56,723 shares at $5.50 were issued under
Dividend Reinvestment Plan
• On 1 August 2023, 233,500 shares at $5.40 were issued
under Key Leadership Incentive Plan
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 distribution rate is the average mid-
rate for bank bills with a term of six months plus a margin of
3.9% (2022: 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.
Capital profit reserve
This reserve is used to accumulate realised capital profits.
Other reserves
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.
130 Nufarm Limited | Annual Report 2023
Dividends
2023
Paid interim dividend (unfranked)
Paid final dividend (unfranked)
2022
Paid interim dividend (unfranked)
Paid final dividend (unfranked)
Cents per share
Total
amount $000
5.0
6.0
4.0
4.0
18,997
22,795
Payment date
9 Jun 2023
9 Dec 2022
15,199
15,200
17 Jun 2022
17 Dec 2021
The company operates a Dividend Reinvestment Plan (DRP) under which eligible holders of ordinary shares are able to reinvest all or
part of their dividend payments into additional fully paid Nufarm Limited shares.
Distributions
Nufarm step-up securities
The following distributions were paid by Nufarm Finance (NZ) Ltd:
Proposed and unrecognised at reporting date
Distribution
Distribution
2023
Distribution
Distribution
2022
Distribution
Distribution
Distribution
rate (annualised)
Total
amount $000
Payment date
8.32%
7.66%
7.37%
4.86%
3.97%
4.00%
10,413
15 Apr 2024
9,587
16 Oct 2023
9,227
6,055
17 Apr 2023
17 Oct 2022
5,072
5,029
19 Apr 2022
15 Oct 2021
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 $11.333 million (2022: $7.518 million).
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% (2022: 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
2023
$000
2022
$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 (2022: $nil) franking credits.
Nufarm Limited | Annual Report 2023
131
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Notes to the consolidated financial statements continued
For the year ended 30 September
28 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)
Earnings/(loss) excluding items of material income/(expense) used in the calculation of
earnings per share - excluding material items
Note
6
2023
$000
111,140
111,140
(11,333)
99,807
(11,051)
2022
$000
107,438
107,438
(7,518)
99,920
(25,759)
110,858
125,679
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
Plus weighted average number of rights held under employee share plans
Weighted average number of ordinary shares used in calculation of diluted earnings
per share
Number of shares
2023
2022
380,098,351
379,799,885
3,439,239
2,841,016
383,537,590
382,640,901
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
Basic earnings per share – excluding material items
Diluted earnings per share – excluding material items
Cents per share
2023
26.3
26.0
29.2
28.9
2022
26.3
26.1
33.1
32.8
132 Nufarm Limited | Annual Report 2023
audit and risk committee. In doing so, the global head of risk
and compliance and the chief financial officer have direct and
ongoing access to the chair and members of the audit and
risk committee.
Credit risk
Credit risk is the risk of financial loss to the group if a customer
or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the group’s
receivables from customers and other financial assets.
Exposure to credit risk
The group’s exposure to credit risk is influenced mainly by the
individual characteristics of each customer. The demographics
of the group’s customer base, including the default risk of the
industry and country in which the customers operate, has less
of an influence on credit risk.
The group has credit policies in place and the exposure to
credit risk is monitored on an ongoing basis. Credit evaluations
are performed on all customers before the group’s standard
payment and delivery terms and conditions are offered.
Purchase limits are established for each customer, which
represents the maximum open amount without requiring further
management approval.
The group’s maximum exposure to credit risk at the reporting
date was:
29 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 has responsibility to identify, assess, monitor and
manage the material risks facing the group and to ensure
that adequate identification, reporting and risk minimisation
mechanisms are established and working effectively. To
support and maintain this objective, the audit and risk
committee has established detailed policies on risk oversight
and management by approving a global risk management
charter that specifies the responsibilities of the 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 chair of the audit and risk committee.
Written reports regarding risk and compliance activities and
internal audit findings are provided at each meeting of the
Carrying amount
Trade and other receivables
Cash and cash equivalents
Derivative contracts:
Assets
2023
$000
665,148
410,957
2022
$000
529,295
585,702
12,073
24,734
1,088,178
1,139,731
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The group's maxium 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
The group's top five customers account for $99.022 million
of the trade receivables carrying amount at 30 September
2023 (30 September 2022: $96.338 million). These top five
customers represent 19 per cent (30 September 2022: 21 per
cent) of the total trade receivables.
2023
$000
118,282
76,286
233,630
203,893
33,057
665,148
2022
$000
164,340
61,627
191,810
89,436
22,080
529,293
Nufarm Limited | Annual Report 2023
133
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Notes to the consolidated financial statements continued
For the year ended 30 September
29 Financial risk management and financial instruments continued
Impairment losses
The ageing of the group's customer trade receivables at the
reporting date was:
Receivables ageing
Current
Past due – 0 to 90 days
Past due – 90 to 180 days
Past due – 180 to 360 days
Past due – more than one year
Provision for expected credit losses
Trade receivables
2023
$000
448,044
52,559
7,170
6,489
16,155
530,417
(25,232)
505,185
2022
$000
402,601
46,982
11,567
2,806
13,508
477,464
(30,945)
446,519
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.
The movement in the allowance for impairment in respect of
trade receivables during the period was as follows.
2023
$000
30,945
7,446
(13,736)
577
25,232
2022
$000
22,662
18,194
(8,903)
(1,008)
30,945
Provision for expected credit losses
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
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.
134 Nufarm Limited | Annual Report 2023
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 asset based lending facility.
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.
Debt facilities
As at 30 September 2023, the key group facilities include a five
year $800 million revolving asset based lending credit facility
maturing in November 2027 (30 September 2022: group trade
receivables securitisation facility with a maximum seasonal
limit of $500 million), a US$350 million senior unsecured
notes offering maturing in January 2030 (30 September 2022:
US$350 million) and two year standby liquidity facility of
$150 million maturing in November 2024 (30 September 2022:
a senior secured bank facility (SFA) of $440 million).
On 15 November 2022 Nufarm entered into a five year
$800 million revolving asset based lending credit facility (ABL)
secured against trade receivables and inventory located in
Australia, the United States and Canada. Concurrently, a two
year $150 million standby liquidity facility (SLF) secured against
tangible assets in Australia, the United States, Canada and
New Zealand was entered into. The ABL and SLF replaced
the $500 million group trade receivables securitisation facility
and the senior secured bank facility (SFA). The ABL and SLF
facilities provide the group with flexibility to align drawings with
changes in working capital and other cash requirements.
Availability under the ABL will be limited at any time to the
lesser of the global borrowing base and the ABL facility
limit ($800 million). The global borrowing base fluctuates on
a monthly basis relative to the advance rates against trade
receivables and inventory, ineligibility criteria and the inclusion
of a provision for general reserves in Australia, the United
States and Canada. As at 30 September 2023, the global
borrowing base was lower than the ABL facility limit at
$536 million.
The ABL facility is governed by terms and conditions that
are customary for a secured facility of this size, and as
at 30 September 2023 Nufarm was in compliance with
all conditions.
On 27 January 2022 the group completed the refinancing
of the US$475 million senior unsecured notes due in April
2026 ("the 2026 notes"). The 2026 notes were redeemed
from investors in February 2022 through the issuance of
US$350 million senior unsecured notes due in January 2030
with a fixed coupon of 5.00% ("the 2030 notes"). The 2030
notes were issued under a dual tranche structure by Nufarm
Australia Ltd (US$105 million) and Nufarm Americas Inc
(US$245 million).
The SLF is designed to provide the group access to committed
funding to cover peak working capital requirements, and is
governed by terms and conditions that are customary for a
secured facility of this size. The guarantor group is consistent
across the ABL, the 2030 notes and SLF.
The majority of debt facilities that reside outside the ABL
facility, the 2030 notes and SLF are regional working
capital facilities, primarily located in Europe, which at
30 September 2023 totalled $150.291 million (30 September
2022: $112.372 million). A parent guarantee is provided to
support working capital facilities in Europe.
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 $31.816 million at 30 September 2023
(30 September 2022: $367.639 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 22.
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 2023 the group did not have any derecognised
trade receivables which were being held by third parties
(30 September 2022: nil).
Nufarm Limited | Annual Report 2023
135
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Notes to the consolidated financial statements continued
For the year ended 30 September
29 Financial risk management and financial instruments continued
The following are the contractual maturities of the group's
financial liabilities:
Carrying
amount
$000
Contractual
cash flows Less than 1 year
$000
$000
788,292
6,912
531,701
61,170
540,040
9,801
144,675
1,271
-
5,541
-
-
-
-
(12,073)
788,292
30,204
655,326
70,514
715,553
9,801
300,278
764,871
-
52,849
21,758
27,002
-
25,118
92,578
(91,596)
92,578
(91,596)
396,366
(389,992)
396,366
(389,992)
-
-
784,425
(796,642)
-
-
784,425
(796,642)
886,737
2,077,330
2,565,107
1-2 years
$000
17,074
314
113,328
5,863
27,002
-
20,622
More than
2 years
$000
6,347
29,890
489,149
42,893
661,549
9,801
254,538
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
184,203
1,494,167
2023
Non-derivative financial liabilities
Trade and other payables
Business combination – consideration payable
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
136 Nufarm Limited | Annual Report 2023
2022
Non-derivative financial liabilities
Carrying
amount
$000
Contractual
cash flows Less than 1 year
$000
$000
1-2 years
$000
More than
2 years
$000
Trade and other payables
1,297,880
1,297,880
1,275,686
16,736
Business combination – consideration payable
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
9,705
239,526
15,431
537,634
9,752
141,862
-
-
11,254
-
-
-
-
(24,734)
31,099
247,088
16,939
739,247
9,752
288,246
3,072
247,088
16,490
26,882
-
24,004
-
-
449
26,882
-
20,463
-
-
-
-
733,317
(721,141)
733,317
(721,141)
-
-
-
-
841,870
(870,076)
841,870
(870,076)
-
-
-
-
-
-
-
-
5,458
28,027
-
-
685,483
9,752
243,779
-
-
-
-
-
-
-
-
2,238,310
2,614,221
1,577,192
64,530
972,499
Nufarm Limited | Annual Report 2023
137
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Notes to the consolidated financial statements continued
For the year ended 30 September
29 Financial risk management and financial instruments continued
Market risk
Market risk is the risk that changes in market prices, such
as foreign exchange rates, interest rates and equity prices will
affect the group’s income or the value of its holdings of financial
instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable
parameters, while optimising the return.
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 2023 was a $5.261 million asset (2022:
$13.480 million asset) comprising assets of $12.073 million
(2022: $24.734 million) and liabilities of $6.812 million (2022:
$11.254 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.
Net financial assets/(liabilities) - by currency of denomination
AUD
$000
-
(7)
1,136
(245)
884
USD
$000
803
-
(4,961)
(98)
(4,256)
EUR
$000
688
(682)
-
1,219
1,225
Net financial assets/(liabilities) - by currency of denomination
AUD
$000
-
(1)
1,445
(245)
1,199
USD
$000
(4,554)
-
3,478
(9,656)
(10,732)
EUR
$000
256
(388)
-
(6,082)
(6,214)
GBP
$000
(2,035)
(18)
1,468
-
(585)
GBP
$000
(608)
-
1,727
-
1,119
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, Mexican
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.
2023
Functional currency of group operation
Australian dollars
US dollars
Euro
British pound
2022
Functional currency of group operation
Australian dollars
US dollars
Euro
British pound
138 Nufarm Limited | Annual Report 2023
Sensitivity analysis
Based on the aforementioned group’s net financial assets/
(liabilities) at 30 September 2023, a one per cent strengthening
or weakening of the following currencies at 30 September 2023
would have increased/(decreased) profit or loss and equity 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 2022.
Strengthening
Weakening
Strengthening
Weakening
Profit or (loss)
after tax
Profit or (loss)
after tax
Profit or (loss)
after tax
Profit or (loss)
after tax
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
2023
$000
10
(25)
25
(10)
2023
$000
(10)
25
(25)
10
2022
$000
42
(72)
(90)
120
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
Average Rate1
Reporting Date2
2023
0.664
0.621
0.540
2022
0.710
0.658
0.558
2023
0.648
0.611
0.530
1 This represents the average of the monthly rates used to translate foreign subsidiary earnings into the reporting currency (AUD). It is not weighted by earnings.
2 This represents the closing rate at 30 September 2023.
2022
$000
(43)
72
89
(119)
2022
0.651
0.662
0.580
Nufarm Limited | Annual Report 2023
139
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Notes to the consolidated financial statements continued
For the year ended 30 September
29 Financial risk management and financial instruments continued
Interest rate risk
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 asset based loan facility and the
standby liquidity facility are considered floating rate facilities.
The notes were refinanced in January 2022 through the
issuance of US$350 million senior unsecured notes due in
January 2030 with a fixed coupon component of 5.00%.
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 3.9% (2022: 3.9%).
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
Carrying amount
2023
$000
2,101
(747,347)
(745,246)
-
(540,040)
(540,040)
2022
$000
7,543
(406,571)
(399,028)
-
(537,634)
(537,634)
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 2023.
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 2022.
2023
Variable rate instruments
Total sensitivity
2022
Variable rate instruments
Total sensitivity
Profit or (loss)
100bp increase
100b decrease
$000
(7,452)
(7,452)
(3,990)
(3,990)
$000
7,452
7,452
3,990
3,990
140 Nufarm Limited | Annual Report 2023
Fair values
All financial assets and financial liabilities, other than derivatives,
are initially recognised at the fair value of consideration paid
or received, net of transaction costs as appropriate, and
subsequently carried at fair value or amortised cost, as
indicated in the tables below. Derivatives are initially recognised
at fair value on the date the contract is entered into and are
subsequently remeasured at their fair value.
The financial assets and liabilities are presented by class in
the tables below at their carrying values, which generally
approximate to the fair values. In the case of the centrally
managed fixed rate debt not swapped to floating rate
totalling $540.040 million (2022: $537.634 million), the fair
value at 30 September 2023 is $474.938 million (2022:
$451.156 million).
Carried at fair
value through
profit or loss
Derivatives
used for
hedging
Financial
assets /
liabilities at
amortised cost
2023
Note
$000
$000
Cash and cash equivalents
Trade and other receivables
excluding derivatives
Other investments
Forward exchange contracts:
Assets
Liabilities
Trade and other payables
excluding derivatives
Secured bank loans
Unsecured bank loans
Senior unsecured notes
Other loans
Lease liabilities
14
15
19
15
22
22
23
23
23
23
23
-
-
-
12,073
(5,541)
(6,912)
-
-
-
-
-
-
-
-
-
(1,271)
-
-
-
-
-
-
(380)
(1,271)
$000
410,957
665,148
-
-
-
(788,292)
(531,701)
(61,170)
(540,040)
(9,801)
(144,675)
(999,574)
Financial
assets /
liabilities
at FVOCI
$000
-
-
62,403
-
-
-
-
-
-
-
-
62,403
Carried at fair
value through
profit or loss
Derivatives used
for hedging
Financial assets /
liabilities at
amortised cost
Financial assets /
liabilities at FVOCI
2022
Note
$000
$000
Cash and cash equivalents
Trade and other receivables
excluding derivatives
Other investments
Forward exchange contracts:
Assets
Liabilities
Trade and other payables
excluding derivatives
Secured bank loans
Unsecured bank loans
Senior unsecured notes
Other loans
Lease liabilities
14
15
19
15
22
22
23
23
23
23
23
-
-
-
24,734
(11,254)
(9,705)
-
-
-
-
-
3,775
-
-
-
-
-
-
-
-
-
-
-
-
$000
585,702
529,295
-
-
-
(1,297,880)
(239,526)
(15,431)
(537,634)
(9,752)
(141,862)
$000
-
-
54,445
-
-
-
-
-
-
-
-
Total
$000
410,957
665,148
62,403
12,073
(6,812)
(795,204)
(531,701)
(61,170)
(540,040)
(9,801)
(144,675)
(938,822)
Total
$000
585,702
529,295
54,445
24,734
(11,254)
(1,307,585)
(239,526)
(15,431)
(537,634)
(9,752)
(141,862)
(1,127,088)
54,445
(1,068,868)
Nufarm Limited | Annual Report 2023
141
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Notes to the consolidated financial statements continued
For the year ended 30 September
29 Financial risk management and financial instruments 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: Based on quoted prices (unadjusted) in active
markets for identical financial assets and 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: Based on inputs not observable in the market using
appropriate valuation models, including discounted cash
flow modelling and comparable company transactions.
Level 1
$000
-
-
-
-
-
-
Level 1
$000
-
-
-
-
-
-
Level 2
$000
12,073
-
12,073
(6,812)
-
(6,812)
Level 2
$000
24,734
-
24,734
(11,254)
-
(11,254)
Level 3
$000
-
62,403
62,403
-
(6,912)
(6,912)
Level 3
$000
-
54,445
54,445
-
(9,705)
(9,705)
Total
$000
12,073
62,403
74,476
(6,812)
(6,912)
(13,724)
Total
$000
24,734
54,445
79,179
(11,254)
(9,705)
(20,959)
2023
Derivative financial assets
Other investments
Derivative financial liabilities
Business combination – consideration payable
2022
Derivative financial assets
Other investments
Derivative financial liabilities
Business combination – consideration payable
There have been no transfers between levels in either
the year ended 30 September 2023 and the year ended
30 September 2022.
Valuation techniques used to derive fair values
The group has used the following valuation techniques
and assumptions in the determination of the fair values
noted above.
• Derivative financial assets and liabilities include forward
exchange contracts which are valued using market data
including spot foreign exchange rates and forward rates at
balance sheet date to determine fair value.
• Other investments include the group's strategic investments
which primarily consist of unlisted private investments.
The fair value of these investments are determined
using comparable company analysis and recent capital
seeding rounds.
• Contingent consideration is payable with respect to the
group's acquisition of the energy cane business from
GranBio Investimentos SA in the year ended 30 September
2022. The fair value of the contingent consideration
payable is determined using valuation techniques such as
discounted cashflow models. Assumptions are based upon
agreed royalty rates payable on forecasted revenues to be
earned by the group until 30 June 2034, together with
estimated discount rate and growth rate assumptions.
142 Nufarm Limited | Annual Report 2023
Capital management
The board’s 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 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 underlying return on funds employed
(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 group's
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 is focused on the efficient use of capital and believes
ROFE, leverage and cashflow are appropriate performance
measures to be considered in the application of the board's
capital management policy. In particular, ROFE provides a
measure that remains effective regardless of the mix of equity
and debt, which may change from time to time. ROFE
is included in management remuneration structures through
budget targets that incorporate capital management and
growth strategies. The ROFE for the year ended 30 September
2023 was 8.8 per cent. (2022: 9.5 per cent).
30 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 (see note 20) are as follows:
Balance at 1 October 2022
Additions to right-of-use assets
Depreciation charge for the period
Disposals and write-offs
Transfers between categories
Foreign exchange adjustment
Balance at 30 September 2023
Balance at 1 October 2021
Additions to right-of-use assets
Depreciation charge for the period
Disposals and write-offs
Foreign exchange adjustment
Balance at 30 September 2022
Land and
buildings
Plant and
machinery
$000
86,786
9,734
(15,981)
(1,018)
8,302
3,498
91,321
$000
18,148
11,692
(9,538)
(267)
(8,302)
(496)
11,237
Land and
buildings
Plant and
machinery
$000
85,549
16,242
(14,521)
(238)
(246)
$000
21,081
7,331
(7,294)
(2,129)
(841)
Total
$000
104,934
21,426
(25,519)
(1,285)
-
3,002
102,558
Total
$000
106,630
23,573
(21,815)
(2,367)
(1,087)
86,786
18,148
104,934
Nufarm Limited | Annual Report 2023
143
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2
3
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Notes to the consolidated financial statements continued
For the year ended 30 September
30 Leases continued
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
31 Capital commitments
2023
$000
(25,519)
(8,528)
(1,133)
(47)
2022
$000
(21,815)
(7,510)
(197)
(8)
(8,528)
(1,087)
(7,510)
(205)
(24,363)
(20,116)
The group had contractual obligations to purchase plant and equipment for $11.151 million at 30 September 2023 (2022:
$15.346 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, up to a maximum of RMB 35 million. The outstanding commitment is RMB 28 million
($5.945 million). For further information refer to Note 18.
32 Contingencies
In the ordinary course of business, obligations may arise in the future due to 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, a future liability cannot be determined due to significant 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 in the future.
33 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 Australia Pty Ltd
AH Marks Holdings Limited
AH Marks Pensions Scottish Limited Partnership
Artfern Pty Ltd
Nuseed Brazil SA (previously known as Atlantica Sementes SA)
Australis Services Pty Ltd
144 Nufarm Limited | Annual Report 2023
Notes
Place
of incorporation
2023
2022
Percentage of shares held
1
1
1
1
1
1
1
Australia
Australia
USA
Australia
Mexico
Australia
Mexico
Australia
United Kingdom
United Kingdom
Australia
Brazil
Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
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
First Classic Pty Ltd
Frost Technology Corporation
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
Mastra Industries Sdn Bhd
Medisup Securities Limited
Munistrategies Sub-CDE 29, LLC
NF Agriculture Inc
Nufarm ABF Trustees Limited
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 Costa Rica Inc. SA
Nufarm de Guatemala SA
Notes
Place
of incorporation
2023
2022
Percentage of shares held
1
1
2
1
1
1
1
1
1
1
1
1
1
1
2
1
Australia
Australia
Netherlands
USA
Australia
New Zealand
New Zealand
Australia
Australia
Australia
Australia
Canada
Australia
USA
United Kingdom
Guatemala
France
Australia
Malaysia
USA
Mexico
USA
Australia
Australia
Malaysia
Australia
Malaysia
Malaysia
Australia
USA
USA
United Kingdom
Morocco
South Africa
Canada
Zimbabwe
USA
USA
Malaysia
Australia
Netherlands
Canada
China
United Kingdom
Costa Rica
Guatemala
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
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 2023
145
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2
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Notes to the consolidated financial statements continued
For the year ended 30 September
33 Group entities continued
Notes
Place
of incorporation
2023
2022
Percentage of shares held
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
Nufarm Limited
Nufarm Malaysia Sdn Bhd
Nufarm Materials Limited
Nufarm Middle East Operations
Nufarm Nordics AB
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
146 Nufarm Limited | Annual Report 2023
2
1
1
Mexico
Panama
Venezuela
Ecuador
Germany
Brazil
Spain
Germany
Netherlands
USA
Australia
New Zealand
Austria
Austria
Mexico
New Zealand
Netherlands
France
Hong Kong
Hungary
USA
Singapore
Netherlands
Australia
Italy
Japan
Korea
Malaysia
United Kingdom
Malaysia
Australia
Egypt
Sweden
New Zealand
Paraguay
United Kingdom
United Kingdom
Peru
Australia
Poland
Portugal
Romania
France
Singapore
Malaysia
Switzerland
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
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 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
Nutrihealth Grain Pty Ltd
Nutrihealth Pty Ltd
Opti-Crop Systems Pty Ltd
Pharma Pacific Pty Ltd
Plant Protection Products For Middle East Operations
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
1
1
1
1
1
1
1
1
1
1
1
2
Place
of incorporation
Malaysia
New Zealand
Australia
Australia
Turkey
United Kingdom
Ukraine
Uruguay
USA
Australia
USA
Canada
United Kingdom
United Kingdom
Australia
United Kingdom
USA
USA
Australia
Mexico
Australia
USA
Australia
Australia
Russia
Argentina
Serbia
Brazil
Ukraine
Uruguay
Australia
Australia
Australia
Australia
Egypt
Indonesia
Indonesia
Indonesia
Indonesia
USA
Australia
France
USA
Percentage of shares held
2023
2022
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
75
100
100
-
100
-
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
75
100
-
100
100
100
100
100
100
100
-
1 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.
2 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.
Nufarm Limited | Annual Report 2023
147
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Notes to the consolidated financial statements continued
For the year ended 30 September
34 Company disclosures
Result of the company
Profit 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 Earnings1
Total equity
Company
2023
$000
43,580
98
43,678
2023
$000
2022
$000
45,522
(1,542)
43,980
2022
$000
679,738
747,789
2,116,094
2,175,225
102,186
108,017
166,482
176,404
1,840,609
1,837,228
51,929
(57,512)
173,051
47,790
(57,512)
171,315
2,008,077
1,998,821
1 Retained earnings comprises the transfer of net profit for the period and are characterised as profits available for distribution as dividends in future periods. Dividends
amounting to $41.844 million (2022: $30.396 million) were distributed from the retained earnings during the year.
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 2023 or 30 September 2022.
148 Nufarm Limited | Annual Report 2023
35 Deed of cross guarantee
Under ASIC Corporations (Wholly owned Companies) Instrument 2016/785, the Australian wholly-owned subsidiaries referred to
in note 33 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 certain Australian controlled 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, 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 statement of profit or loss and other comprehensive income, 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 2023 follows.
Summarised consolidated statement of profit or loss, and retained earnings
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
Consolidated Deed Group
2023
$000
88,983
(2,144)
86,839
(116,171)
(41,844)
(71,176)
2022
$000
(9,800)
18,580
8,780
(94,555)
(30,396)
(116,171)
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Nufarm Limited | Annual Report 2023
149
Notes to the consolidated financial statements continued
For the year ended 30 September
35 Deed of cross guarantee continued
Consolidated Deed Group
2023
$000
93,716
923,158
302,869
12,621
10,818
2022
$000
136,807
1,027,461
271,896
12,346
3,438
1,343,182
1,451,948
2,632
2,972
1,364,077
1,302,019
81,219
114,949
172,385
1,735,262
3,078,444
85,721
114,092
168,273
1,673,077
3,125,025
753,534
1,020,710
2,924
22,954
(381)
3,325
1,302
22,533
2,158
3,922
782,356
1,050,625
340,809
42,937
2,439
386,185
1,168,541
1,909,903
173,349
46,594
2,443
222,386
1,273,011
1,852,014
1,840,609
1,837,228
73,691
66,779
73,691
57,266
(71,176)
(116,171)
1,909,903
1,852,014
Balance sheet
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax assets
Assets held for sale
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
150 Nufarm Limited | Annual Report 2023
36 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
Crop.zone GMBH
In August 2021, Nufarm provided a bank guarantee to support crop.zone GmbH for a value of EUR 250,000. The guarantee is
still in place as at 30 September 2023. In July 2023, the group provided a convertible loan of EUR 1.250 million with a fixed term
maturity of three years to Crop.zone GMBH. It is expected that the loan will be converted into additional shares in Crop.zone GMBH
within this period. The payment of interest is contingent upon whether the loan is converted into additional shares in Crop.zone
GMBH within this period, and will become payable where such a conversion does not occur. The group has recognised the
convertible loan as a Other receivables - associates balance at 30 September 2023.
Crop.zone GMBH:
Lease payments
Interest expense
Sale of goods and services
Purchase of goods and services
Crop.zone GMBH:
Trade and other payables
Trade and other receivables
Other receivables - associates
Lease liability
2023
$000
639
13
21
893
As at 30 Sep
2023
$000
-
21
2,046
513
2022
$000
611
123
40
1,620
2022
$000
74
-
-
792
On the 23 May 2022, Sumitomo Chemical Company Ltd divested its shares in Nufarm Limited and ceased being a related party
of the group. The transactions represented below for 2022 are transactions for the period of which they were defined as a related
party, from the 1 October 2021 to the 22 May 2022.
The sale of goods and services above includes 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
was 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 was transacted at the cost incurred by the group.
Sumitomo Chemical Company Ltd:
Sale of goods and services
Purchase of goods and services
These transactions were undertaken on commercial terms and conditions.
2023
$000
-
-
2022
$000
242,985
81,450
Nufarm Limited | Annual Report 2023
151
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Notes to the consolidated financial statements continued
For the year ended 30 September
36 Related parties continued
(c) Key management personnel compensation
The key management personnel compensation included in personnel expenses (see note 9) are as follows:
Short term employee benefits
Post employment benefits
Equity compensation benefits
Termination benefits
Other long term benefits
2023
$000
5,338
139
1,237
-
73
2022
$000
5,883
203
1,448
-
61
6,787
7,595
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 company
or its subsidiaries in the reporting period. The terms and conditions of the transactions with key management personnel 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 2023 (2022: nil).
152 Nufarm Limited | Annual Report 2023
37 Auditors’ remuneration
Audit services
KPMG Australia
2023
$000
2022
$000
Audit and review of group financial report
1,060
885
Overseas KPMG firms
Audit and review of group and local financial reports
Other auditors
Audit and review of local 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
2,913
3,973
499
4,472
-
3
46
-
103
152
2,698
3,583
473
4,056
362
-
92
1
-
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522
38 Subsequent events
On 16 October 2023 a distribution was paid by Nufarm Finance (NZ) on the Nufarm step-up securities. The distribution rate
(annualised) was 7.66% resulting in a gross distribution of $9.587 million.
A final dividend of 5 cents per share, totalling $19.038 million, was declared on 15 November 2023 and will be paid on
15 December 2023.
Other than noted above, no matters or circumstances have arisen in the interval between 30 September 2023 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.
Nufarm Limited | Annual Report 2023
153
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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 2023 and of its performance for the year
ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Regulations 2001; 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 33 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 year ended 30 September 2023.
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:
John Gillam
Director
Greg Hunt
Director
Dated at Melbourne this 15th day of November 2023
154 Nufarm Limited | Annual Report 2023
Independent Audit Report
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Nufarm Limited | Annual Report 2023
155
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. 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 2023 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated balance sheet as at 30 September 2023 • 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 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 these requirements. Key Audit Matters The Key Audit Matters we identified are: • Recoverability of 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.
Independent Audit Report continued
156 Nufarm Limited | Annual Report 2023
Recoverability of property, plant and equipment ($569.3m) and intangible assets ($1,230.2m) Refer to the following notes to the financial report: Note 2(d)(ii) Basis of preparation – Use of estimates and judgements – impairment testing, Note 3(i)(ii) Significant accounting policies – Impairment – Non-financial assets, Note 20 Property, plant and equipment, and Note 21 Intangible assets. The key audit matter How the matter was addressed in our audit A key audit matter was the Group’s testing of the recoverable amount of property, plant and equipment and intangible assets given the size of the balances and the level of judgement required by us when evaluating the evidence available. In addition, the ongoing uncertainty around inflationary expectations, supply chain disruptions and fluctuations in demand and pricing caused by economic and climatic conditions increases estimation uncertainty when applying forward looking assumptions. We focused on the significant forward looking assumptions the Group applied in each value in use model, including: • Forecast cash flows, growth rates and terminal growth rates in light of market conditions impacting each cash generating unit (“CGU”); and • Discount rates, which vary according to the conditions and environment the specific CGUs are subject to from time to time, and the approach to incorporating risks into the cash flows or discount rates. The value in use models are complex, largely manually developed and use adjusted historical performance and a range of internal and external sources as inputs to the assumptions. Modelling using forward looking assumptions tends to be prone to greater risk for potential bias, error and inconsistent application. Where the Group has not met prior year forecasts in relation to a specific CGU we factor this into our assessment of forecast assumptions. These conditions necessitate additional scrutiny by us, in particular to address the objectivity of sources used for assumptions, and their consistent application. We involved valuation specialists to supplement our senior audit team members in assessing this key audit matter. 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 rates; - comparing the relevant cash flow forecasts to the Board approved budgets and FY24-FY26 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 F
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Nufarm Limited | Annual Report 2023
157
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. • 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 compared the implied 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.
Independent Audit Report continued
158 Nufarm Limited | Annual Report 2023
Recoverability of deferred tax assets in relation to tax losses ($80.6m) Refer to the following notes to the financial report: Note 2(d)(iii) Basis of preparation – Use of estimates and judgements – income taxes, Note 3(p) Significant accounting policies – Income tax, Note 11 Income tax expense and Note 17 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 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 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. F
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Nufarm Limited | Annual Report 2023
159
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. The Other Information we obtained prior to the date of this Auditor’s Report was the Appendix 4E, the Directors’ Report (including the Remuneration Report), the Operating and Financial Review, the Corporate Governance Statement and the Corporate Information. The Financial Year 2023 Overview, Chair’s Message, CEO’s Message, Environmental, Social and Governance, information on the Board of Directors and Key Management Personnel and the Shareholder and Statutory Information are expected to be made available to us after the date of the Auditor’s Report. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will 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; and 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.
Independent Audit Report continued
160 Nufarm Limited | Annual Report 2023
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report. Report on the audit of the Financial Report Opinion In our opinion, the Remuneration Report of Nufarm Limited for the year ended 30 September 2023 complies with Section 300A of the Corporations Act 2001. Directors’ responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in the Directors’ report for the year ended 30 September 2023. 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 15 November 2023 Shareholder and Statutory Information
Substantial shareholders
As at 29 November 2023, 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 Pty Ltd
L1 Capital Pty Ltd
Phoenix Group
Host Plus Pty Ltd
Dimensional Entities LLC
Vanguard Group
Number of holders
Number of equity securities held
% of total issued securities
capital in relevant class
57,379,649
51,574,303
21,290,883
19,480,896
19,039,733
19,011,407
15.08%
13.55%
5.60%
5.12%
5.00%
5.00%
As at 15 November 2023, the number of holders is as follows:
Class of Equity Securities
Fully paid ordinary shares
Number of holders
13,395
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 15 November 2023
is as follows:
Total shares
381,423,197
UMP shares
40,688
UMP holders
1,202
% of issued shares held by
UMP holders
0.01%
Voting rights of equity securities
As at 15 November 2023, there were 13,395 holders of a total of 381,423,197 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 15 November 2023 is as follows:
Distribution of ordinary shareholders holdings ranges
Holders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
5,811
5,340
1,354
842
48
Total units
2,381,328
13,565,222
10,042,557
18,412,592
%
0.62
3.56
2.63
4.83
337,021,498
88.36
Nufarm Limited | Annual Report 2023
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Shareholder and Statutory Information continued
Twenty largest shareholders as at 15 November 2023
Rank Name
Units
% Units
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
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