ANNUAL REPORT
& ACCOUNTS 2021
Prescriptive Solutions,
Sustainable Production
Nurturing Growth
For the first time, the Group has
developed a standalone Sustainability
Report for 2021. Highlights from the
report are set out on pages 50 and 51
and the full report can be accessed at
www.originenterprises.com
10.7m
38%
hectares annually
influenced by advice or
products delivered by
an Origin entity
of the Group’s
purchased electricity
now supplied from
renewable sources
11%
decrease in
fleet emissions
since 2017
Strategic Report
At a Glance
Our Segments
Chairman’s Statement
Chief Executive’s Review
Financial Review
Alternative Performance Measures
Our Business
Strategy
Business Model
Key Performance Indicators
Business Review
›
› Continental Europe
› Latin America
Sustainability Report
Risk Report
Ireland and the United Kingdom
Governance
Board of Directors
Directors’ Report
Chairman’s Overview
Corporate Governance Statement
Nomination and Corporate Governance
Committee Report
Audit and Risk Committee Report
Remuneration Committee Report
Financial Statements
Directors and Other Information
Statement of Directors’ Responsibilities
Independent auditors’ report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes In Equity
Consolidated Statement of Cash Flows
Group Accounting Policies
Notes to the Group Financial Statements
Company Accounting Policies
Company Balance Sheet
Company Statement of Changes in Equity
Notes to the Company Financial Statements
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12
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50
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83
100
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102
109
110
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114
115
123
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183
184
185
Read about our progress
in Continental Europe
on pages 44 and 45
Read about Origin
Amenity Solutions
on page 37
Read about
Our Business
on page 20
1
Highlights
FY21 was an improved year for
the Group with solid earnings
recovery and continued strong
cash generation and reduced
net bank debt1.
Group revenue increase of 4.4%
to €1,658.4 million, 6.6% on an
underlying2 basis.
Operating profit of €61.0 million,
an increase of 38.3%, 42.1% on an
underlying2 basis.
Group operating margin of 3.7%
(2020: 2.8%).
Adjusted diluted earnings per share of
35.50 cent.
Strong cash generation with free
cash flow of €49.2 million (2020:
€64.3 million).
Working capital outflow of €4.0 million
(2020: Inflow of €30.3 million).
Proposed final dividend of 7.85 cent
per share giving total dividend of
11.00 cent.
Agronomy and Inputs volume
growth of 4.9%, pricing
improvements of 3.5% and an
acquisition contribution of 0.7%,
on a constant currency basis.
Acquisition of Green-tech, the
UK’s leading landscaping, forestry
and ground maintenance
equipment provider.
Net bank debt1 of €14.4 million (2020:
Divestment of Pillaert, the Group’s
€53.2 million).
Belgian fertiliser business.
1. Before the impact of IFRS 16 leases.
2. Excluding currency movements and the impact of acquisitions.
2
Origin Enterprises plc Annual Report and Accounts 2021
Revenue
€1,658.4m
Operating Profit1
€61.0m
S
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+4.4%
+7.2% at constant currency3
+38.3%
+44.2% at constant currency3
Adjusted Diluted EPS2
35.50C
+38.2%
+44.6% at constant currency3
Free Cash Flow
€49.2m
(2020: €64.3m)
ROCE4
9.3%
(2020: 7.3%)
Dividend per Share
11.00C
(2020: 3.15c)
1. Before amortisation of non-ERP intangible assets and exceptional
items, and before the Group’s share of profits of associates
and joint venture.
2. Before amortisation of non-ERP intangible assets, net of related
deferred tax (2021: €8.6m, 2020: €7.7m) and exceptional items,
net of tax (2021: credit of €1.2m, 2020: expense of €5.2m).
3. Excluding currency movements.
4. The definition and calculation of ROCE is set out on page 19.
Note: All references to constant currency in this Annual Report are
due to the fact that the translation of non-euro denominated earnings
are impacted by movements in local currency rates versus the euro,
the Group’s presentation currency. In order to reflect underlying
performance more accurately in the period, the Group calculates
results on a constant currency basis by retranslating non-euro
denominated current year earnings at prior year exchange rates.
3
Read our
Corporate
Governance
Statement on
page 69
Over the past decade,
our strategy has led
us to market-leading
positions, with crop
science and expert
research at the heart
of our business.
57,000
Crop Field Trials
4
Origin Enterprises plc Annual Report and Accounts 2021
Origin Enterprises plc Annual Report and Accounts 2021
Strategic
Report
At a Glance
Our Segments
Chairman’s Statement
Chief Executive’s Review
Financial Review
Alternative Performance Measures
Our Business
Strategy
Business Model
Key Performance Indicators
Business Review
›
› Continental Europe
› Latin America
Sustainability Report
Risk Report
Ireland and the United Kingdom
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12
18
20
24
28
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46
50
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STRATEGIC REPORT
At a Glance
A focused
Agri-Services
group providing
services and
technology.
Our businesses specialise in the
provision of independent and
innovative advice, inputs and
related services to farmers,
growers, landscapers and amenity
professionals to help them
optimise crop yield and economic
returns on a sustainable basis.
Business-to-Business
Agri-Inputs
Provides inputs and supply chain
solutions to the Irish, UK and
Brazilian primary food production
sectors covering the macro inputs
that drive on-farm efficiency, i.e.
prescription blended fertilisers,
speciality nutrition and animal feed
ingredients. In addition, Origin
is a market leader in advisory,
service and input provision to the
professional sports turf, landscaping
and amenity sectors in the UK.
Integrated Agronomy and
On-Farm Services
Provides agronomy advice, services
and inputs directly to arable, fruit
and vegetable growers in the UK,
Poland, Romania and Ukraine.
Our customised solutions ensure
the delivery of crop production
systems that adhere to the highest
safety, quality, environmental and
sustainability standards.
94
Distribution
Points
32
Input Formulation
and Processing Facilities
60
Demonstration
Farms
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Origin Enterprises plc Annual Report and Accounts 2021
Philipinnes Our Segments
Latin America
Ireland and the UK
Continental Europe
This segment includes the
Group’s operations in Brazil.
This segment includes the Group’s
wholly-owned Irish and UK-based
operations in addition to the Group’s
Irish and UK-based associates and
joint venture undertaking.
This segment includes the
Group’s operations in Poland,
Romania and Ukraine.
Ireland
and the UK
Continental
Europe
Latin
America
More on Latin America
on pages 46 to 49
More on Ireland and the
UK on pages 34 to 39
More on Continental
Europe on pages 40 to 45
Revenue
2%
2%
Operating Profit
35%
63%
37%
61%
10%
26%
64%
16%
31% 53%
2021
€1.7bn
2020
€1.6bn
2021
€61.0m
2020
€44.1m
Ireland & the UK Continental Europe
Latin America
7
STRATEGIC REPORTPhilipinnes
Chairman’s Statement
Dear Shareholder
The Group has worked to
restore growth to earnings
in 2021, responding to the
challenges of continuing
COVID-19 disruptions to deliver
an improved performance and
a solid earnings recovery.
FY21 Performance
Financial highlights this year include an increase in Group revenue by 4.4%
to €1,658.4 million, an operating profit rise of 38.3% to €61.0 million and
adjusted diluted earnings per share of 35.50 cent, up 38.2% on last year and
in line with guidance. Details of our financial performance are set out in the
Financial Review on pages 12 to 17.
Strategy
As the Company was emerging from an extremely challenging trading year
in 2020, it was an important time for a renewed, sharpened focus on
strategic delivery across the Group. This year has seen important strategic
investments with the acquisition of Greentech Limited ('Green-tech') in the
UK, enhancing Origin’s amenity offering in a segment we expect will grow
further in the coming years, and the construction of a second controlled
release fertiliser plant in Brazil. We disposed of our Belgian fertiliser
business, Pillaert, as we focus on opportunities and markets with strong
growth and value-add potential.
11.00cent
Dividend
€1.7bn
Revenue
8
Origin Enterprises plc Annual Report and Accounts 2021 Executive Leadership
We are pleased to have welcomed
TJ Kelly to Origin in January 2021
as Group Chief Financial Officer,
following the announcement last year
of his appointment. Declan Giblin,
CEO LATAM, stepped down from the
Board at the end of the financial year.
I would like to express our
appreciation to Declan for his
commitment to the Company, his
vision for the Group and his valued
contribution to the Board over the
past 13 years. Declan continues in
his role as CEO of the Company’s
LATAM division.
COVID-19
As the global pandemic continues
to disrupt businesses, markets
and governments globally, Origin
continues to adapt to support the
ongoing operation of production
facilities and distribution networks
to uphold its part in the food
supply chain. We do this always
remaining vigilant to protecting the
health, safety and wellbeing of our
workforce as a priority.
Dividend Resumption
With a continued adherence to
financial discipline and a focus on
strategic investments supporting an
improved financial performance, the
Board is pleased to be recommending
a final dividend of 7.85 cent per
share subject to approval at the
Annual General Meeting ('AGM') on
25 November 2021. Together with the
interim dividend of 3.15 cent per share
paid in April, this will bring the total
dividend per ordinary share for the
financial year to 11.00 cent, an increase
of 7.85 cent per share on 2020.
Board and Governance
The Board is committed to
maintaining the highest standard of
governance practices to ensure the
effective stewardship and long-term
sustainable success of the Group.
The Board continues its commitment
to applying the principles of
the Quoted Companies Alliance
Corporate Governance Code ('QCA
Code') as the basis for its corporate
governance framework. Full details
of our approach to governance are
set out in the Corporate Governance
Statement on pages 69 to 75.
As part of ongoing Board
development and renewal, we
are pleased to have announced
two new Non-Executive Director
appointments in the past year. Helen
Kirkpatrick was appointed to the
Origin Board in October 2020, with
Aidan Connolly to join in October
2021. The combination of industry
knowledge, technology expertise and
international experience from these
appointments will further diversify
and strengthen the range of skills
and experience on the Board.
Non-Executive Directors Hugh
McCutcheon and Kate Allum will
retire from the Board at the
conclusion of the Company’s 2021
AGM in November. Hugh and Kate
have served 10 years and 6 years
respectively and I would like to
acknowledge our appreciation of
their contributions, support and
commitment over the course of their
tenures. We wish them well in their
future endeavours.
I would like to extend this
appreciation to all members of the
Board for their continued support
for the business and their consistent
hard work and ongoing contribution
to the success of Origin.
Sustainability
Strong governance continues to
be a key underlying foundation in
building and delivering on our ESG
strategy and integrating ESG into
our organisational decision-making
across all operations.
This year saw a further acceleration
of progress on our ESG agenda,
with highlights including the
establishment of a Board ESG
Committee, commitments to the
development of science-based
targets and ISO standards and
the publication of our inaugural
standalone Sustainability Report.
Culture and People
The talent, adaptability and
commitment of our workforce is
reflected in our ability to successfully
emerge from a very challenging trading
environment in 2020 and drive a
return to growth across the Group this
year. On behalf of the Board, I would
like to thank all our employees for
the hard work and dedication to the
success of the Group.
We recognise the importance of
supporting our employees and
nurturing talent and capabilities. Key
enablers of an engaged workforce
include continuing learning and
development opportunities, ongoing
wellbeing initiatives and our employee
voice and engagement programme.
While COVID-19 travel and on-site
restrictions remained in place, the
Board continued its engagement
with employees with the ‘Let’s Talk’
programme being conducted virtually.
Board members participated in
meetings with both Agrii Romania
and Agrii UK senior management and
employees and joined business update
calls with teams in Ireland and the UK,
Continental Europe and Brazil.
We continue to champion equality,
diversity and inclusion in the
workplace. I am pleased to report
that we achieved our target
of a minimum of 33% female
representation on the Board by
the end of 2020 and scored in the
top quartile in our 2021 employee
opinion survey in the diversity and
inclusion category.
Looking Ahead
We enter FY22 supported by solid
financial management and a robust
corporate governance framework.
Together with a strong leadership
team, we are confident in the Group’s
ability to capitalise on its leading
market positions and progress our
strategic ambitions while continuing to
drive sustainable long-term value for
all our stakeholders.
On behalf of the Board, I would like
to thank you, our shareholders, for
your continued support.
Rose Hynes
Non-Executive Chairman
28 September 2021
9
STRATEGIC REPORT
Chief Executive’s Review
Dear Shareholder
I am pleased to report that FY21
saw a much-improved
performance for the Group,
compared to a challenging FY20
impacted by extreme weather
and the onset of the COVID-19
pandemic.
Although we experienced a delayed season in FY21 following prolonged cold
weather in spring, more favourable conditions in the fourth quarter resulted in
increased demand for agronomy services, crop inputs and amenity products.
In FY21 the Group delivered a solid recovery across all its financial metrics.
Group revenue increased by 4.4% to €1,658.4 million and Group operating profit
increased by 38.3% to €61.0 million. The Group continues to maintain strong
financial discipline with focus on improving its cash performance, delivering
free cash flow of €49.2 million despite a modest working capital outflow of
€4.0 million. Net bank debt at year end fell to €14.4 million representing a
Debt:EBITDA ratio of 0.13x.
COVID-19
COVID-19 and its impact in the markets in which the Group operates continues
to be a significant area of focus for the Board and senior management teams. The
Group implements the advice and guidance of governments and health authorities
across our markets, with ongoing audits at all our operating facilities to ensure we
adhere to safe social distancing and all other health and safety guidance.
The Group continues to monitor developments closely across our locations and
is taking appropriate actions to ensure we provide the safest environment we
can for our stakeholders, while continuing to serve the needs of the agricultural
community in a responsible manner.
35.50c
Adjusted EPS
€61.0m
Operating Profit
10
Origin Enterprises plc Annual Report and Accounts 2021
The principal highlights are as follows:
Financial
> Agronomy and Inputs volume
growth of 4.9%.
> Operating profit of €61.0 million,
an increase of 38.3%.
> Free cash flow of €49.2 million
(2020: €64.3 million).
> Net bank debt of €14.4 million
(2020: €53.2 million).
> Reinstatement of final dividend.
> Group operating margin of 3.7%
(2020: 2.8%).
> Launch of Origin Amenity Solutions
and the Turf Science & Technology
Centre in Throws Farm.
>
1.7 million digital hectares now
on-boarded (2020: 1.4 million).
> Return of UK cropping area to
normalised levels.
> TJ Kelly commenced as CFO.
Strategic
> Acquisition of Green-tech in
the UK.
> Disposal of Belgian fertiliser
business.
>
Investment in CRF manufacturing
plant in Brazil.
>
Improved ESG ratings.
> Publication of our inaugural
standalone Sustainability Report.
Operational
FY21 Progress
As I have already outlined, FY21 was
an improved year for Origin, with the
principal highlights set out above.
Divisional Review
Ireland and the UK
Ireland and the UK delivered an
improved performance in FY21
compared to a prior year which
had been impacted by highly
challenging weather conditions.
Underlying revenue increased 7.8%
while underlying operating profit
increased 64.3%.
A full business review of performance
in Ireland and the UK is set out on
pages 34 to 39.
The Group continues to focus
on strategic opportunities that
complement our existing market
positions and enhance our product
capabilities. During the year we
acquired Green-tech, the UK’s
leading manufacturer and distributor
of landscaping, forestry and ground
maintenance equipment. Green-tech
is an excellent strategic fit for Origin
and I am delighted to welcome the
team to the Group.
Continental Europe
Continental Europe delivered a good
performance in FY21 with improved
performances in all territories.
During the year, the Group disposed of
its Belgian fertiliser business, Pillaert.
With the lack of scalable opportunities
and consolidation options in the
Belgian market, the Group decided to
exit this market and redeploy capital in
the Group’s core operations.
Latin America
Latin America delivered a strong
underlying performance year-on-
year with volume development
and underlying growth driven by a
significant increase in controlled
release fertiliser sales, together with
a double digit percentage increase in
our core product range.
The impact of foreign currency
translation has significantly impacted
Latin America’s contribution in
the period and the weakening of
the Brazilian Real has significantly
impacted earnings.
A full business review of performance
in LATAM is set out on pages 46 to 49.
Dividend
In FY20, in light of market conditions
and uncertainty relating to the
COVID-19 pandemic, the Board
determined that it would be prudent
to suspend the final dividend for
FY20. During the year, the Group’s
improved performance allowed
dividend payments to resume, with
an interim dividend of 3.15 cent paid
to shareholders in April 2021. The
Directors are proposing a final dividend
of 7.85 cent for approval at the AGM
in November 2021, bringing the total
dividend payment to 11.00 cent per
ordinary share.
Board Changes
During the year TJ Kelly joined Origin
as Group CFO and Helen Kirkpatrick
joined the Board as an independent
Non-Executive Director. I would
like to welcome TJ and Helen to the
Group and thank them for their valued
contribution to date.
A full business review of performance
in Continental Europe is set out on
pages 40 to 45.
Also during the year, the Group
announced the intention of Declan
Giblin, our CEO LATAM, to retire in the
next two years, and of his decision
to step down from the Board at the
end of FY21. Declan joined the Board
of Origin following the acquisition
of Masstock in 2007 and has been
instrumental in the growth of the
Group in the subsequent 14 years.
I would like to thank Declan and
acknowledge his contribution over
that period.
Sustainability
I am pleased to announce that
the Group will shortly publish its
inaugural Sustainability Report
where we will outline our vision to
be the trusted partner of choice to
achieve shared economic, social and
environmental ambitions across our
value chain partnerships.
Summary and Outlook
FY21 was an improved year for
the Group and we continue to
demonstrate the discipline required
to maintain a strong financial
position and deliver growth in line
with our ambitions.
The Group has a strong and
experienced leadership team in
place. Our integrated crop services
business model, with scalable and
diversified market positions, continues
to demonstrate its resilience. I am
confident we will progress our financial
growth ambitions successfully in FY22
and beyond.
Sean Coyle
Chief Executive Officer
28 September 2021
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Financial Review
This Financial Review provides an
overview of the Group’s financial
performance for the year ended
31 July 2021 and of Origin’s financial
position at that date.
Overview of Results
› Group revenue increase of 4.4% to
€1,658.4 million, and 6.6% on an
underlying basis.
› Strong cash generation with free
cash flow of €49.2 million (2020:
€64.3 million).
› Operating profit1 of €61.0 million,
› Net bank debt5 of €14.4 million (2020:
an increase of 38.3% and 42.1% on
an underlying basis.
€53.2 million).
› Working capital outflow of €4.0 million
› Group operating margin of 3.7%
(2020: Inflow of €30.3 million).
(2020: 2.8%).
› Adjusted diluted earnings per share3
of 35.50 cent.
› Proposed final dividend of 7.85 cent
per share giving total dividend of
11.00 cent.
12
Origin Enterprises plc Annual Report and Accounts 2021
Results Summary
Revenue
Operating profit1
Associates and joint venture2, net
Total Group operating profit1
Finance expense, net
Profit before tax1
Income tax4
Adjusted net profit
Adjusted diluted EPS (cent)3
Net bank debt5
Adjusted Net Profit Reconciliation
Reported net profit
Amortisation of non-ERP intangible assets
Tax on amortisation of non-ERP related intangible assets
Exceptional items (net of tax)
Adjusted net profit
2021
€’m
1,658.4
61.0
2.8
63.8
(8.6)
55.2
(9.6)
45.6
35.50
(14.4)
2021
€’m
38.2
8.6
-
(1.2)
45.6
2020
€’m
1,589.1
44.1
6.2
50.3
(11.3)
39.0
(6.2)
32.8
25.69
(53.2)
2020
€’m
19.8
9.4
(1.6)
5.2
32.8
Reporting Segments
The Group has three separate reporting segments as set out below.
Ireland and the UK
This segment includes the Group’s wholly-owned Irish and UK-based Business-to-Business Agri-Input operations,
Integrated Agronomy and On-Farm Service operations and the Digital Agricultural Services business. In addition, this
segment includes the Group’s associates and joint venture undertaking.
Continental Europe
This segment includes the Group’s operations in Poland, Romania and Ukraine.
Latin America
This segment includes the Group’s operations in Brazil.
An analysis of segmental revenues and operating profit for the Group before the Group’s share of revenue / operating
profit from associates and joint venture is set out below:
Ireland and the UK
Continental Europe
Latin America
Total
2021
2020
Revenue
€’m
1,049.3
570.1
39.0
1,658.4
Operating profit1
€’m
Revenue
€’m
Operating profit1
€’m
39.1
15.6
6.3
61.0
967.9
590.1
31.1
1,589.1
23.3
13.7
7.1
44.1
The result from the Group’s associates and joint venture undertaking was €2.8 million (2020: €6.2 million).
Revenue
Group revenue increased by 4.4% from €1,589.1 million in the prior year to €1,658.4 million. On an underlying basis
revenue increased by 6.6% driven by increased demand for fertiliser, crop protection and seed, and global price
movements in fertiliser.
The underlying increase in agronomy services and crop input volumes, excluding crop marketing volumes, was 4.9%
for FY21.
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Operating Profit1
Operating profit1 increased by 38.3% to €61.0 million compared to €44.1 million in the previous year. On an underlying
basis, operating profit1 increased by €18.6 million (42.1%), primarily driven by recovering volumes and margins in Ireland
and the UK.
Group operating margin increased from 2.8% to 3.7% in FY21. This was principally driven by the Ireland and UK segment,
which saw its operating margin increase from 2.4% in FY20 to 3.7% in FY21.
Operating Profit Bridge
€44.1m
+42.1%
€18.6m
+2.1%
€0.9m
(5.9%)
(€2.6m)
+€16.9m
+38.3%
€61.0m
FY20
Underlying
Acquisitions
Currency
FY21
Seasonality
The Group’s operating profit1 is significantly weighted towards the latter half of the financial year. An analysis of the
quarterly revenue and operating profit1 is set out in the following table:
Revenue
Operating profit1
Revenue
Operating profit1
Q1
€’m
318.3
1.8
Q1
€’m
371.2
(1.3)
Q2
€’m
254.1
(0.6)
Q2
€’m
233.7
(1.5)
FY21
Q3
€’m
597.8
29.2
FY20
Q3
€’m
604.8
22.5
Q4
€’m
488.2
30.6
Q4
€’m
379.4
24.4
Total
€’m
1,658.4
61.0
Total
€’m
1,589.1
44.1
€59.8 million of operating profit1 was generated in the seasonally more important second half of the financial year, an
increase of €12.9 million (27.5%) on the second half of 2020.
Associates and Joint Venture
Origin’s share of the profit after interest and taxation from associates and joint venture amounted to €2.8 million in the
period (2020: €6.2 million).
Finance Expense and Net bank Debt
Net bank debt5 at 31 July 2021 was €14.4 million (€60.5 million including IFRS 16 lease debt) compared to net bank debt
of €53.2 million (€93.9 million including IFRS 16 lease debt) at the end of the prior year, a reduction of €38.8 million. The
reduction in net bank debt year-on-year reflects continued strong cash generation across the Group.
Net finance costs amounted to €8.6 million, which represents a significant decrease of €2.7 million on the prior year.
Excluding the impact of IFRS 16, there was a reduction in net finance costs of €2.8 million reflecting lower local debt
levels in our businesses and lower interest rates, year-on-year, across the Group.
14
Origin Enterprises plc Annual Report and Accounts 2021 Taxation
The effective tax rate for the year ended 31 July 2021 was 18.5% (2020: 18.5%), and reflects the mix of geographies
where profits were earned in the year.
Exceptional Items
Exceptional items net of tax amounted to a credit of €1.2 million in the year. These principally relate to the gain
on disposal of our Belgian fertiliser business, rationalisation costs related to the closure of a UK seed plant,
pension-related costs in our associate and joint venture and acquisition-related costs. Exceptional items are
summarised in the table below:
Year ended 31 July
Gain on disposal of Belgian fertiliser business
Pension and rationalisation-related costs
Arising in associates and joint venture
Transaction, other related costs and movements in contingent consideration, net
Total exceptional items, net of tax
Adjusted Diluted Earnings per Share3 (‘EPS’)
Adjusted diluted EPS3 amounted to 35.50 cent per share, an increase of 38.2% from FY20.
The year-on-year increase of 9.81 cent per share can be summarised as follows:
Impact of
Underlying increase
Acquisitions
Disposals
Currency
Total
Cent per share
11.30c
0.52c
(0.37c)
(1.64c)
9.81c
2021
€’m
(2.6)
0.7
0.4
0.3
(1.2)
%
+44.0%
+2.0%
(1.4%)
(6.4%)
+38.2%
Dividends
In FY20, in light of market conditions and uncertainty relating to the COVID-19 pandemic, the Board determined
that it would be prudent to suspend the final dividend for FY20. During the year, the Group’s improved performance
allowed dividend payments to resume, with an interim dividend of 3.15 cent paid to shareholders in April 2021. The
Directors are proposing a final dividend of 7.85 cent for approval at the AGM in November 2021, bringing the total
dividend payment to 11.00 cent per share. Subject to shareholder approval at the AGM, this final dividend will be paid
on 4 February 2022 to shareholders on the register on 14 January 2022.
Capital Structure – Bank Facilities
The financial structure of the Group is managed to maximise shareholder value while providing the Group with the
flexibility to take advantage of opportunities to develop the business. The Group targets acquisition and investment
opportunities that are value-enhancing and the Group’s policy is to fund these transactions in the most efficient manner.
At 31 July 2021, the Group had unsecured committed banking facilities of €430 million (2020: €430 million), of which
€30 million is scheduled to expire in September 2021, €100 million in May 2022, €34 million in June 2024 and €266
million in June 2025. Subsequent to year end, the Group extended the €100 million facility due to expire in May 2022
to June 2025. Consequent on this, the Group holds €400 million of committed banking facilities with pricing linked
to ESG performance, of which €34 million will expire in 2024 and €366 million in 2025.
Cash Flow and Net Bank Debt
Net bank debt5 at 31 July 2021 was €14.4 million compared to net bank debt5 of €53.2 million at the end of the previous
year. The majority of Group borrowings are subject to financial covenants calculated in accordance with lenders’ facility
agreements. The Group’s balance sheet is in a strong position. Group Treasury monitors compliance with all financial
covenants which at 31 July 2021 included:
Covenant
2021
Full year times
2021
Half year times
2020
Full year times
2020
Half year times
Net bank debt: EBITDA
Maximum 3.5x
EBITDA: Net interest
Minimum 3.0x
0.13
10.36
2.76
6.75
1.18
5.76
3.24
7.57
15
STRATEGIC REPORT A summary cash flow is presented below:
Cash flow from operating activities, before exceptional items
Change in working capital
Interest and taxation
Cash flow from ongoing operating activities
Exceptional items
Net cash flow from operating activities
Dividends received
Net capital expenditure:
– Routine
– Investment
Acquisition expenditure (including debt acquired)
Cash consideration on disposal of subsidiary/equity investment
Proceeds from investment properties
Dividends paid
Lease payments
Other
Increase in cash
Opening net bank debt
Translation
Closing net bank debt5
2021
€’m
83.5
(4.0)
(15.8)
63.7
(1.8)
61.9
4.5
(4.7)
(10.7)
(11.0)
15.3
5.9
(4.0)
(12.6)
(0.8)
43.8
(53.2)
(5.0)
(14.4)
2020
€’m
63.8
30.3
(16.6)
77.5
(2.2)
75.3
5.8
(7.9)
(6.8)
(7.4)
1.0
-
(26.8)
(11.4)
0.4
22.2
(75.6)
0.2
(53.2)
Working Capital
For the year ended 31 July 2021, there was a working capital outflow of €4.0 million, driven by the increased level of sales
during the fourth quarter. Working capital management remains a key priority for the Group. The year end represents the
low point in the working capital cycle for the Group reflecting the seasonality of the business.
Return on Capital Employed
Return on capital employed is a key performance indicator for the Group, with Origin delivering 9.3% in 2021 (2020:
7.3%), as follows:
Capital employed – 31 July
Average capital employed ('Group Net Assets' as defined on page 19)
EBITA (as defined on page 19)
Return on capital employed
Free Cash Flow
The Group generated free cash flow in the year of €49.2 million (2020: €64.3 million).
A further analysis on the calculation of Free Cash Flow is set out on page 18.
2021
€’m
538.1
684.1
63.9
9.3%
2020
€’m
509.9
686.9
50.3
7.3%
16
Origin Enterprises plc Annual Report and Accounts 2021 Post-Employment Benefit Obligations
The Group operates a number of defined benefit and defined contribution pension schemes with assets held in
separate trustee administered funds. All of the defined benefit schemes have been closed to new members for a
number of years and the majority are closed to future accrual.
Under IAS 19 ‘Employee Benefits’, the amounts recognised in the Consolidated Statement of Financial Position as at 31
July 2021 are as follows:
Non-current assets
Asset in defined benefit schemes
The movement during the year can be summarised as follows:
Net asset at 1 August 2020
Current service costs
Other finance expense, net
Contributions paid
Remeasurements
Translation
Net asset at 31 July 2021
2021
€’m
5.9
2020
€’m
0.4
€’m
0.4
(0.5)
-
1.3
4.7
-
5.9
The remeasurements of €4.7 million principally relate to experience gains, changes in financial assumptions and
remeasurement gains on scheme assets.
Risk Exposures
The Group’s international operations expose it to different financial risks that include currency risk, credit risk, liquidity
risk and interest rate risk. The Group has a risk management programme in place which seeks to limit the impact of
these risks on the financial performance of the Group. The Board has determined the policies for managing these risks.
It is the policy of the Board to manage these risks in a non-speculative manner. Details of the Group’s risk exposures
and the controls in place to monitor such exposures are set out in Note 23 to the financial statements.
Share Price
The Group’s ordinary shares traded in the range of €3.07 to €4.15 during the year from 1 August 2020 to 31 July 2021.
The Group’s share price at 31 July 2021 was €3.44 (31 July 2020: €3.17).
Investor Relations
Our strategy aims to create long-term shareholder value and we support this strategy through regular and open
communication with all capital market participants. We engage with institutional investors in numerous one-on-one
meetings, as well as at roadshows and conferences worldwide. Throughout the financial year, all engagement was
facilitated remotely through the use of virtual conferences and video calls.
Contact with institutional shareholders is the responsibility of the executive management team including the Chief
Executive Officer, the Chief Financial Officer and the Head of Investor Relations.
During the year there were 152 meetings / conference calls with institutional investors.
TJ Kelly
Chief Financial Officer
28 September 2021
1 Operating profit and total Group operating profit are stated before amortisation of non-ERP intangible assets and exceptional items.
2 Share of profit of associates and joint venture represents profit after interest and tax before exceptional items.
3 Before amortisation of non-ERP intangible assets, net of related deferred tax (2021: €8.6m, 2020: €7.7m) and exceptional items, net of tax (2021:
credit of €1.2m, 2020: expense of €5.2m).
Income tax before tax impact of exceptional items and excluding tax on amortisation of non-ERP intangible assets.
4
5 Before impact of IFRS 16 Leases.
17
STRATEGIC REPORT Alternative Performance
Measures
Certain financial information set out in this Annual Report
is not defined under International Financial Reporting
Standards (‘IFRS’). These key Alternative Performance
Measures (‘APMs’) represent additional measures in
assessing performance and for reporting both internally
and to external users.
APMs are presented to provide readers with additional financial information that is regularly reviewed by management.
The Group believes that the presentation of these non-IFRS measurements provides useful supplemental information
which, when viewed in conjunction with IFRS financial information, provides stakeholders with a more meaningful
understanding of the underlying financial and operating performance of the Group.
The key APMs of the Group are set out below.
Operating Profit
Operating profit is stated before amortisation of non-ERP intangible assets and exceptional items, and before the
Group’s share of profits of associates and joint venture.
The reconciliation of operating profit to the reported IFRS measure is as follows:
Operating profit (per Consolidated Income Statement)
Exceptional items
Amortisation of non-ERP related intangible assets
Share of profit after tax of associates and joint venture
Total
2021
€’m
56.4
(1.1)
8.6
(2.8)
61.1
Adjusted Diluted EPS
The definition and calculation of Adjusted Diluted EPS is set out in Note 11 to the financial statements.
Free Cash Flow
The Group generated free cash flow in the year of €49.2 million (2020: €64.3 million).
EBITDA (excluding associates and joint venture)
Interest paid
Tax paid
Routine capital expenditure
Working capital (outflow) / inflow
Dividends received
Free cash flow
2021
€’m
69.3
(5.8)
(10.1)
(4.7)
(4.0)
4.5
49.2
2020
€’m
34.4
6.5
9.4
(6.2)
44.1
2020
€’m
52.7
(8.6)
(8.0)
(7.9)
30.3
5.8
64.3
Free cash flow means the total of earnings before interest, tax, depreciation (excluding depreciation of IFRS 16 Right
of Use leased assets), amortisation of non-ERP related intangible assets and exceptional items of wholly-owned
businesses (‘EBITDA’) adjusted to take account of interest, tax, routine capital expenditure, working capital cash-flows
and dividends received.
18
Origin Enterprises plc Annual Report and Accounts 2021 Return on Capital Employed
Return on capital employed is a key performance indicator for the Group, with Origin delivering 9.3% in 2021 (2020:
7.3%), as follows:
Total assets
Total liabilities
Adjusted for:
Net debt (including IFRS 16 Lease liability)
Tax, put option and derivative financial instruments, net
Accumulated amortisation
Capital employed – 31 July
Average capital employed (Group Net Assets as defined below)
Operating profit
Exceptional items
Amortisation of non-ERP intangible assets
EBITA (as defined below)
Return on capital employed
2021
€’m
1,297.8
(936.8)
60.5
51.8
64.8
538.1
684.1
56.4
(1.1)
8.6
63.9
9.3%
2020
€’m
1,232.4
(920.0)
93.9
49.2
54.4
509.9
686.9
34.4
6.5
9.4
50.3
7.3%
For the purposes of this calculation, ROCE represents Group earnings before interest, tax and amortisation of non-ERP
related intangible assets from continuing operations (‘EBITA’) taken as a percentage of Group net assets:
(i) EBITA includes the net profit contribution from associates and joint venture (after interest and tax) and excludes the
impact of exceptional and non-recurring items.
(ii) Group Net Assets means total assets less total liabilities excluding net debt, derivative financial instruments, put
option liabilities, accumulated amortisation of non-ERP related intangible assets and taxation-related balances.
Group Net Assets are also adjusted to reflect the average level of acquisition investment spend and the average
level of working capital for the accounting period.
EBITA
EBITA includes the net profit contribution from associates and joint venture (after interest and tax) and excludes the
impact of exceptional and non-recurring items.
The reconciliation of EBITA to the reported IFRS measure is as follows:
Operating profit (per Consolidated Income Statement)
Exceptional items
Amortisation of non-ERP related intangible assets
Total
2021
€’m
56.4
(1.1)
8.6
63.9
2020
€’m
34.4
6.5
9.4
50.3
EBITDA
EBITDA is earnings before interest, tax, depreciation, amortisation of non-ERP related intangible assets and exceptional
items of wholly-owned businesses.
The reconciliation of EBITDA to the reported IFRS measure is as follows:
Operating profit (per Consolidated Income Statement)
Depreciation
Exceptional items
Amortisation of non-ERP related intangible assets
Share of profit after tax of associates and joint venture
Total
2021
€’m
56.4
8.2
(1.1)
8.6
(2.8)
69.3
2020
€’m
34.4
8.6
6.5
9.4
(6.2)
52.7
19
STRATEGIC REPORT Crop Nutrition
We develop science-led,
innovative products and
services which improve soil
fertility, nutrient use efficiency
and crop productivity, whilst
also conserving the natural
environment.
Our Business
Origin is a
recognised leader
in the Agri-Services
sector with operations
in six countries. The
Group supports
farmers, growers,
landscapers and
amenity professionals
across all our markets.
Read more about our
‘Own Product Capability’
in our Brazil Case Study
on page 49
Agri-Services
We provide a complete suite of agronomic
advice and solutions on-farm, including
seed, nutrients, crop protection products
and digital tools. The advice and solutions
provided incorporate environmental
measures and proposals.
20
Origin Enterprises plc Annual Report and Accounts 2021
Amenity Solutions
We manufacture and distribute landscaping,
forestry and turf management solutions to
the professional amenity sector in the UK and
Europe, promoting opportunities to enhance
biodiversity and green space use.
Digital Agronomy
We offer digital agronomy services and
technology to support sustainable and
profitable farming through our RHIZA digital
agronomy business with its market-leading
Contour platform.
Read more
about
Sustainability
on page 50
21
STRATEGIC REPORT
Our Business continued
What is Agronomy?
Agronomy combines crop science
and applied farming expertise
to enable growers to optimise
the productivity of crops, whilst
caring for the consumer, the soil
and the environment.
More on our Strategy
on page 24
What is an Agronomist?
An Agronomist is a specialist
plant and soil scientist who
works directly with farmers to
provide innovative research-
based advice and supply inputs
and other related services, to
optimise crop production, on a
sustainable basis.
More on our Business
Model on page 28
What do Agronomists do?
Our Agronomists act as
trusted advisers to farmers in
the provision of a range of
services and inputs including:
> specialist advice;
> seed inputs;
> crop protection products; and
> nutrition products.
More on Our Business
on page 20
Ireland and
the UK
Continental
Europe
Poland | Romania | Ukraine
Latin
America
Our
Brands
22
Origin Enterprises plc Annual Report and Accounts 2021
Our Approach to Integrated Agronomy:
Application Research
and Analysis
> Investment in research and
development to optimise
crop productivity.
> 57,000 trial units managed
across the UK, Continental
Europe and Latin America.
> Collaboration with key industry
partners and universities.
> Analysis of the needs of
primary producers.
Prescription Development
> Advise primary producers on all
components of crop and field
management.
> Recommendation of customised
solutions to optimise crop yields
and quality.
> Ensuring environmental
and regulatory compliance
requirements are met.
Application and Delivery
> Delivery of customised solutions
to primary producers.
> Supply of seed, nutrition and
crop protection technology
to farms.
> Provision of ongoing advice and
monitoring on the timing of the
application of products.
> Use of technology to optimise
service delivery to primary
producers.
Our Approach to Business-to-Business Agri-Inputs:
Foundations
> Well-established brands in the
Agri-Inputs and Amenity sectors.
Innovation and R&D
> Leading bespoke fertiliser blender.
> Continuous and technically-led
> Experienced and committed
product development.
Supply Chain
> Strategic locations and
geographic spread.
> Well-invested blending
people.
> Environmentally sustainable
and formulation facilities.
> Strong on-farm presence.
> Flexible operating facilities
to cater for high seasonal
variations in demand across our
Agri-Input and Feed businesses.
product offering.
> Continuing benchmarking
of production and plant
performance.
> Market share provides
supply chain flexibility.
> Strong supplier partnerships.
> Focus on health and safety.
23
STRATEGIC REPORT
Strategy
Our
Vision
Our
Purpose
To be the leading and trusted
partner of choice to the farmers,
growers, landscapers and
amenity professionals we serve.
Optimising sustainable agriculture
and food production through
innovation, research and development
and agronomic expertise.
Our
Values
P eople
nity
u
m
m
o
C
P
a
r
t
n
erships
I
n
n
o
v
a
t
i
o
n
g rity
I n t e
24
Origin Enterprises plc Annual Report and Accounts 2021
I
n
n
o
v
a
t
i
o
n
Our
2019 Targets
In 2019 the Group set out our
strategic ambition to deliver
agronomic-led solutions that
meet the advancing needs of all
stakeholders, collectively growing
profitability and returns in a
sustainable and socially responsible
manner. This ambition was built
around a set of strategic targets
to 2023, from a 2018 base. The
achievement of these targets has
been impacted by the unprecedented
challenges of extreme weather
conditions experienced across
our operating geographies, in
addition to COVID-19 disruptions
impacting global economies. The
new management team at Origin will
continue to focus on the Group’s
strategy to ensure continued success
for all our stakeholders.
A continued focus on delivering
Target
12-15%
Management Focus
Current
Year
Progress
Overall
Progress
Management continue to focus on ROCE
as a key performance measure and look to
improve the return.
70-100%
Management will continue to focus on
Free Cash Flow as a driver of success.
Return on
Investment –
Group ROCE
Free Cash
Flow Ratio
Digital
Hectares
4.0m
Geographical
profit split
40%
Outside
Ireland & UK
Ireland/UK
EBIT CAGR
1-2%
CE
EBIT CAGR
3-5%
LATAM
EBIT CAGR
5-10%
The Group continues to focus on growing our
digital footprint including specific attention in
Continental Europe.
The Group’s aim is to continue to diversify
earnings and grow the operating profit
contribution from geographies outside of
Ireland and the UK.
A key focus of the new management team is
to improve returns in Ireland and the UK. In
line with this ambition, the Group extended its
Amenity reach in the UK during the year through
the acquisition of Green-tech.
Following the launch of the Agrii brand across
all of our CE operations in FY20, a key focus
of management is on the development of our
own product capabilities including specialised
seed and nutrition products, with the goal of
delivering an increased EBIT contribution.
The underlying performance of the LATAM
division has been strong. It has, however, been
negatively impacted by the weakening of the
Brazilian Real. Management continue to focus
on areas of growth including investment in
controlled release fertiliser facilities in Brazil.
Improved
Reduced
On Target
Behind Target
25
STRATEGIC REPORT Strategy continued
Creating
value for all
stakeholders
Strategic Priorities
Detail
2021
Progress
> Expanded the Group’s leading market share
in the Amenity sector with the acquisition of
Green-tech, the UK’s leading manufacturer
and distributor of landscaping, forestry and
grounds maintenance equipment.
> Greater than 400% increase in controlled
release fertiliser volumes in LATAM following
the investment in our new controlled release
fertiliser plant in Minas Gerais in Brazil.
> Over 20% growth in active digital hectares
on-boarded throughout FY21 including the
continued roll-out across our CE markets.
Areas of
Focus
> The Group will continue to focus on strategic
opportunities to complement our existing
market positions and enhance our product
capability through a combination of organic
and acquisition-driven growth.
> We will continue to invest in strategic capital
expenditure opportunities to maximise
value-add opportunities within our existing
markets across both our fertiliser blending
and product formulation plants in addition to
our digital platform.
26
Scale
Market Focus
Portfolio Positioning
People & Organisations
> Concentrate on target geographies with
> Customisation and localisation.
> Maintain differentiated position as specialist route-
> Ongoing people and talent development.
long-term growth potential.
> Build complementary product-based and
distribution capabilities.
> Investments in digital and agronomic
capabilities to promote sustainable food
production systems.
to-market for crop technologies.
> Devolved accountability and autonomy to execute
> Optimise Group position through balanced business
growth agenda.
portfolio and geographical diversification.
> Launched Origin Amenity Solutions,
combining four of our key Amenity brands
under a single identity to better serve
amenity professionals.
> Created an industry-leading Turf Science &
Technology Centre in the UK complementing
the launch of Origin Amenity Solutions.
> Continued the roll-out of our on-farm
sustainability charter (Green Horizons) and
our Fertile Future sustainability manifesto as
we aim to:
- help growers build business resilience
to adapt to climate change;
- sustainably increase agricultural
production and incomes; and
- reduce the carbon footprint of our
industry and look after the natural
environment.
> Near-market product research,
development and innovation via our
technology centres and demonstration
farms remains central to the Group’s
strategy. Our continued ability to provide
our customers with the most effective
and proven technologies will enable us to
strengthen our position as market leaders.
> Growth in higher margin proprietary crop protection,
> Commencement of TJ Kelly as Group CFO and
seed, micronutrient and fertiliser products through
appointment of Helen Kirkpatrick as Non-Executive
the development of in-house products, own-
Director.
registrations and supplier exclusives.
> Expansion of in-house portfolio across Europe,
and wellbeing throughout the on-going COVID-19
generating 44% in-house annual sales growth.
pandemic.
> Continued focus on employee and customer safety
> Optimisation of the portfolio through greater
> Established a Group-wide Health, Safety and Wellbeing
alignment of product and supplier choice across
forum to facilitate sharing of best practice.
> Development of sustainable products and solutions
employee survey illustrating our commitment to
for growers, including customer-tailored nutrient
our people and promoting a positive and inclusive
> Sustainable engagement score of 88% in our annual
the Group.
blends.
working environment.
> Disposal of the Group’s Belgian fertiliser business
driven by a lack of scalable opportunities and
consolidation options.
> Maintain focus on the development of operations
> The Group will continue to invest in our people,
across our core geographies and product areas
providing the necessary support, development,
which are value enhancing, present future growth
infrastructure and environment to deliver our strategic
opportunities and deliver on the Group’s capital
agenda, drive performance and grow our reputation
return targets.
> Expand operating profit contribution from
geographies outside of Ireland and the UK.
as an employer of choice for the very best talent
within the Agri and Amenity services sectors. Focus
will remain on our employee engagement programme,
through ongoing Group-wide focus groups.
Origin Enterprises plc Annual Report and Accounts 2021 Investment
Case:
Creating
value for all
Stakeholders
> Long-term partnerships as trusted
advisors and input providers to
farmers, growers, landscapers
and amenity professionals.
> Leading market positions
which support the essential
global agriculture and food
production sector.
> Pioneering R&D and technical
innovation delivering sustainable
agronomic solutions which
accelerate productivity and
maximise efficiency.
> Integrated supply chains and
multiple routes to market across
strategic geographic locations.
> Digital technology optimised by
expert agronomist stewardship,
providing localised and
prescriptive solutions to farmers,
growers, landscapers and amenity
professionals.
> Positioned to capitalise on evolving
structural market trends of
increasing farm commercialisation,
professionalism and specialisation.
> Strong cash generation and
conversion capabilities.
> Promoting opportunities to
enhance biodiversity and green
space use.
Scale
Market Focus
Portfolio Positioning
People & Organisations
Detail
> Concentrate on target geographies with
> Customisation and localisation.
> Maintain differentiated position as specialist route-
> Ongoing people and talent development.
long-term growth potential.
> Investments in digital and agronomic
to-market for crop technologies.
> Devolved accountability and autonomy to execute
> Build complementary product-based and
capabilities to promote sustainable food
> Optimise Group position through balanced business
growth agenda.
distribution capabilities.
production systems.
portfolio and geographical diversification.
2021
Progress
> Expanded the Group’s leading market share
> Launched Origin Amenity Solutions,
in the Amenity sector with the acquisition of
combining four of our key Amenity brands
Green-tech, the UK’s leading manufacturer
under a single identity to better serve
and distributor of landscaping, forestry and
amenity professionals.
grounds maintenance equipment.
> Created an industry-leading Turf Science &
> Greater than 400% increase in controlled
Technology Centre in the UK complementing
release fertiliser volumes in LATAM following
the launch of Origin Amenity Solutions.
the investment in our new controlled release
fertiliser plant in Minas Gerais in Brazil.
> Continued the roll-out of our on-farm
sustainability charter (Green Horizons) and
> Over 20% growth in active digital hectares
our Fertile Future sustainability manifesto as
on-boarded throughout FY21 including the
we aim to:
continued roll-out across our CE markets.
- help growers build business resilience
to adapt to climate change;
- sustainably increase agricultural
production and incomes; and
- reduce the carbon footprint of our
industry and look after the natural
environment.
Areas of
Focus
> The Group will continue to focus on strategic
> Near-market product research,
opportunities to complement our existing
development and innovation via our
market positions and enhance our product
technology centres and demonstration
capability through a combination of organic
farms remains central to the Group’s
and acquisition-driven growth.
> We will continue to invest in strategic capital
expenditure opportunities to maximise
value-add opportunities within our existing
markets across both our fertiliser blending
and product formulation plants in addition to
our digital platform.
strategy. Our continued ability to provide
our customers with the most effective
and proven technologies will enable us to
strengthen our position as market leaders.
> Growth in higher margin proprietary crop protection,
seed, micronutrient and fertiliser products through
the development of in-house products, own-
registrations and supplier exclusives.
> Expansion of in-house portfolio across Europe,
generating 44% in-house annual sales growth.
> Commencement of TJ Kelly as Group CFO and
appointment of Helen Kirkpatrick as Non-Executive
Director.
> Continued focus on employee and customer safety
and wellbeing throughout the on-going COVID-19
pandemic.
> Optimisation of the portfolio through greater
> Established a Group-wide Health, Safety and Wellbeing
alignment of product and supplier choice across
the Group.
> Development of sustainable products and solutions
for growers, including customer-tailored nutrient
blends.
> Disposal of the Group’s Belgian fertiliser business
driven by a lack of scalable opportunities and
consolidation options.
forum to facilitate sharing of best practice.
> Sustainable engagement score of 88% in our annual
employee survey illustrating our commitment to
our people and promoting a positive and inclusive
working environment.
> Maintain focus on the development of operations
across our core geographies and product areas
which are value enhancing, present future growth
opportunities and deliver on the Group’s capital
return targets.
> Expand operating profit contribution from
geographies outside of Ireland and the UK.
> The Group will continue to invest in our people,
providing the necessary support, development,
infrastructure and environment to deliver our strategic
agenda, drive performance and grow our reputation
as an employer of choice for the very best talent
within the Agri and Amenity services sectors. Focus
will remain on our employee engagement programme,
through ongoing Group-wide focus groups.
27
STRATEGIC REPORT Business Model
What we do:
> Business-to-Business
Agri-Inputs.
>
Integrated Agronomy
and On-Farm Services.
> Digital Agricultural Services.
> Amenity Solutions.
More on Our Approach
to Integrated Agronomy
on page 23
What sets us apart:
> Our Approach to
Integrated Agronomy.
> Our Approach to
Business-to-Business
Agri-Inputs.
More on Our Approach
to Business-to-Business
Agri-Inputs on page 23
Inputs
People
Partnerships
Financial &
Strategic
Planning
Knowledge
& IP
Supply Chain
& Logistics
Nurturing our environment, Nurturing our society
28
Origin Enterprises plc Annual Report and Accounts 2021
How we add value:
Our
Offer
Nutrition
Crop Protection
Seed
Digital
Expertise / Advice /
Prescription
Amenity Solutions
Our
Brands
Agrii
Goulding
Fortgreen
RHIZA
Origin Amenity
Solutions
Origin Fertilisers
PB Kent
Linemark
Green-tech
Our
Channels
Our
End-Users
Business-to-Business
Agronomists
Farmers & Growers
Amenity Professionals
& Landscapers
Nurturing our environment, Nurturing our society
Outputs
Yield
Enhancement
Profitability &
Competitiveness
Environmental
Stewardship
Maximise
Shareholder
Return
Read our Financial
Review on page 12
Read our Sustainability
Report on page 50
See our KPIs
on page 30
29
STRATEGIC REPORT
Key Performance Indicators
Origin employs financial and non-financial Key Performance Indicators
(‘KPIs’) which benchmark progress towards our strategic priorities. KPIs
are reviewed and monitored on a regular basis and are amended to
better reflect the Group’s key performance measures when required.
KPI
Adjusted Diluted
Earnings per
Share (‘EPS’)
Return on
Capital
Employed (‘ROCE’)
Geographic
Diversity
Free Cash
Flow Ratio
Dividend
Number of
Agronomists
and Sales Staff*
Digital
Hectares
Description
Measures adjusted diluted
EPS in the current year
compared to the prior year.
ROCE is defined as Group
earnings before interest,
tax and amortisation
of non-ERP related
intangible assets taken as
a percentage of Group
Net Assets.
Measures operating profit
contribution from
geographies outside Ireland
and the UK as a percentage
of total operating profit.
Measures free cash flow
Measures the total
Measures the number of
Measures the number of
as a percentage of profit
dividend per ordinary
agronomists and sales
farm hectares uploaded
after tax of wholly-owned
share proposed in the
representatives available
to the Group’s digital
current financial year.
to customers to ensure
platforms as at year end.
businesses, excluding
exceptional items and
amortisation of non-ERP
related intangible assets.
that the appropriate mix of
experience and expertise
is available.
Link to
Strategy
Current
Year
Historic
Result
Strategic
Ambition
35.50C
(2020: 25.69c)
9.3%
(2020: 7.3%)
36%
(2020: 47%)
114.9%
(2020: 240.9%)
11.00C
(2020: 3.15c)
743
(2020: 777)
1.7m ha
(2020: 1.4m ha)
2018
2019
2020
2021
2018
2019
2020
2021
2018
2019
2020
2021
48.8c 52.65c 25.69c 35.50c
13.5% 13.2% 7.3%
9.3%
23%
27%
47%
36%
The Group’s aim is to
target growth in adjusted
diluted EPS, while
recognising that factors
outside our control may
cause inter-year variances.
A key element of the
Group’s strategic ambition
is to deliver ROCE of
12 – 15%.
The Group’s aim is to
grow the operating
profit contribution from
geographies outside of
Ireland and the UK to in
excess of 40% of total
operating profit.
A key element of the
The Group’s strategic
Group’s strategic ambition
ambition is to deliver a
Our target is to remain
adequately resourced
The Group’s aim is to
grow the number of farm
is to deliver a Free Cash
progressive dividend policy
with skilled agronomists
hectares on our digital
Flow Ratio of 70 – 100%.
with a payout ratio > 35%.
and sales representatives
platforms to in excess
who can meet our
customers’ needs.
of 4.0 million hectares.
30
Origin Enterprises plc Annual Report and Accounts 2021
Strategic Priorities Key:
Scale
People &
Organisations
Portfolio
Positioning
Market Focus
KPI
Adjusted Diluted
Return on
Earnings per
Share (‘EPS’)
Capital
Employed (‘ROCE’)
Geographic
Diversity
Free Cash
Flow Ratio
Dividend
Number of
Agronomists
and Sales Staff*
Digital
Hectares
Description
Measures adjusted diluted
ROCE is defined as Group
Measures operating profit
EPS in the current year
earnings before interest,
contribution from
compared to the prior year.
tax and amortisation
intangible assets taken as
of total operating profit.
geographies outside Ireland
and the UK as a percentage
of non-ERP related
a percentage of Group
Net Assets.
Measures free cash flow
as a percentage of profit
after tax of wholly-owned
businesses, excluding
exceptional items and
amortisation of non-ERP
related intangible assets.
Measures the total
dividend per ordinary
share proposed in the
current financial year.
Measures the number of
agronomists and sales
representatives available
to customers to ensure
that the appropriate mix of
experience and expertise
is available.
Measures the number of
farm hectares uploaded
to the Group’s digital
platforms as at year end.
Link to
Strategy
Current
Year
Historic
Result
35.50C
(2020: 25.69c)
9.3%
(2020: 7.3%)
36%
(2020: 47%)
114.9%
(2020: 240.9%)
11.00C
(2020: 3.15c)
743
(2020: 777)
1.7m ha
(2020: 1.4m ha)
2018
2019
2020
2021
2018
2019
2020
2021
2018
2019
2020
2021
2018
2019
2020
2021
Strategic
Ambition
The Group’s aim is to
A key element of the
The Group’s aim is to
target growth in adjusted
Group’s strategic ambition
grow the operating
diluted EPS, while
is to deliver ROCE of
recognising that factors
outside our control may
cause inter-year variances.
12 – 15%.
profit contribution from
geographies outside of
Ireland and the UK to in
excess of 40% of total
operating profit.
106.0% 90.0% 240.9% 114.9%
21.0c
21.32c
3.15c
11.00c
650
755
777
743
0.7m
1.0m
1.4m
1.7m
A key element of the
Group’s strategic ambition
is to deliver a Free Cash
Flow Ratio of 70 – 100%.
The Group’s strategic
ambition is to deliver a
progressive dividend policy
with a payout ratio > 35%.
Our target is to remain
adequately resourced
with skilled agronomists
and sales representatives
who can meet our
customers’ needs.
The Group’s aim is to
grow the number of farm
hectares on our digital
platforms to in excess
of 4.0 million hectares.
* Note: In FY21 the definition
of Sales Staff was updated,
with all comparable periods
restated to reflect this.
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Business Review
Origin is a recognised market leader
in the provision of Agronomy Services
and Crop Inputs in Ireland and the UK,
Continental Europe and Latin America.
Ireland and
the UK
case studies
on pages 37 to 39
Continental
Europe
case studies
on pages 44 and 45
Latin
America
case studies
on pages 48 and 49
Ireland and
the UK
Continental
Europe
Latin
America
€1,049.3m
€570.1m
€39.0m
Revenue
Revenue
Revenue
32
Origin Enterprises plc Annual Report and Accounts 2021
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Ireland and
the UK
Ireland
Origin has leading positions in the
UK Integrated Agronomy Services
market, the Irish and UK Fertiliser
and Speciality Nutrition markets
and the UK Amenity Inputs market.
More on Ireland and the UK on pages 34 to 39
iFarms
B2B Sites
Technology Centres
Continental
Europe
Poland
Ukraine
Origin is a recognised market
leader in the provision of
Agronomy Services and Crop
Inputs in our Continental
European markets.
Romania
More on Continental Europe on pages 40 to 45
Technology Centres
Demonstration Farms
Latin
America
Origin has a controlling interest in
Fortgreen. Based in Paraná State,
Brazil, Fortgreen is an established
leader in the development and
marketing of value-added crop
nutrition and speciality inputs.
More on Latin America on pages 46 to 49
Brazil
Minas
Gerais State
Paraná State
33
Business Review
Ireland and the
United Kingdom
Ireland and the UK delivered an
improved performance in FY21
compared to a prior year which
had been impacted by highly
challenging weather conditions.
Underlying revenue increased
7.8% while underlying operating
profit increased 64.3%.
The underlying volume growth
for agronomy services and crop
inputs was 5.3% in the period.
“ Volumes delivered in Q4
continue to demonstrate
the robustness of the
Group’s operational
capabilities.”
34
Origin Enterprises plc Annual Report and Accounts 2021
Operational Review - Ireland and the United Kingdom
Revenue
Operating profit1
Operating margin1
Associates and joint venture2
2021
€'m
1,049.3
39.1
3.7%
2.8
Change on prior year
2020
€'m
967.9
23.3
2.4%
5.8
Change
%
8.4%
67.5%
130bps
(51.1%)
Underlying3
%
Constant Currency4
%
7.8%
64.3%
130bps
(50.9%)
8.8%
68.2%
130bps
(50.9%)
1 Before amortisation of non-ERP intangible assets and exceptional items.
2 Profit after interest and tax before exceptional items.
3 Excluding currency movements and the impact of acquisitions.
4 Excluding currency movements.
FY20 was impacted by prolonged
unseasonal weather conditions in
Ireland and the UK resulting in lower
volumes and margins across the
segment. In FY21, volume development
in the UK was supported by a return
to more normalised cropping levels
with a 6.5% increase in total plantings.
The improved result was delivered
despite delayed in-field activities as
a result of persistent cold weather
continuing into Q3. Favourable on-
farm conditions in Q4 allowed for
significant catch-up activity with a
5.5% increase in crop protection
volumes year-on-year.
Operating margin increased to 3.7%
from 2.4% driven by a higher intensity
of crop input spend by farmers and
growers following a more normalised
cropping mix.
Integrated Agronomy and
On-Farm Services
Integrated Agronomy and On-Farm
Services delivered an improved result
during the year, recording higher
volumes, revenues and margins across
its service and input portfolios.
Demand for agronomy services and
inputs improved in FY21 following
a return to a more normalised
cropping profile but was impacted
by persistent cold conditions in
Q3. Catch-up activity in Q4 was
supported by improved on-farm
sentiment and more favourable
weather conditions resulting in an
improved contribution year-on-year.
Volumes delivered in Q4 continue to
demonstrate the robustness of the
Group’s operational capabilities.
Agrii launched a sustainable seed
rating offering during the year which
assists farmers in choosing the best
seed variety to cope with ever-
changing weather demands and soil
conditions. Integrated Agronomy and
On-Farm Services continues to deliver
an excellent operational performance
despite the backdrop of COVID-19
-related constraints and has
successfully implemented a range
of measures to ensure continuity of
service to farmers and growers.
Ireland and UK in
numbers:
€1,049.3m
Revenue
1,498
Employees
€39.1m
Operating Profit
C.30,000
Customers
35
STRATEGIC REPORT Profit by Geography
2021
€61.0m
Ireland & the UK
Continental Europe
Latin America
10%
26%
64%
100-
2,000ha
Customer Profile
Digital Agricultural Services
The development and roll-out of
Origin’s digital offering continued
during the year, with over 1.7 million
(FY20: 1.4 million) active hectares on-
boarded by year end, including growth
in Continental Europe.
Enhancement of functionality remains
a key priority for RHIZA, the Group’s
digital agronomy and precision farming
operation, and we continue to embed
our digital decision support services
across the Group’s established
routes-to-market, to optimise crop
performance and input utilisation for
farmers and growers.
Business-to-Business
Agri-Inputs
Business-to-Business Agri-Inputs
had a strong financial year, recording
increased volumes and an overall
improved contribution.
Fertiliser
Fertiliser delivered a strong financial
and operating performance in
FY21, recording higher volumes and
recovering margins in the period. The
result was supported by the more
normalised cropping profile in the
UK with positive volume momentum
continuing well into Q4 influenced by
raw material price increases.
The division rolled out its Fertile Future
sustainability manifesto during the year
and the development and promotion
of enhanced efficiency fertiliser and
bespoke nutrition ranges will continue
to be a significant focus in FY22.
Amenity
The Group’s Amenity business delivered
an improved performance in the
period, benefitting from the easing
of COVID-19 restrictions in the first
quarter, which had severely impacted
operations in FY20.
In March 2021, Origin acquired
Green-tech, the UK’s leading
manufacturer and distributor of
landscaping, forestry and ground
maintenance equipment. Green-tech
strengthens Origin’s amenity business
offering with potential in the area
of environmental land management
and biodiversity enhancement for
the Group’s agri-focused businesses.
Since acquisition, Green-tech has
performed in line with expectations
and the integration of the business
into the wider Amenity division is
proceeding to plan.
Feed Ingredients
The Feed Ingredients result reflects
a challenging trading and operating
environment impacted by a fire in
our animal feed business facility in
R&H Hall, at the Port of Cork, Ireland
and logistical challenges arising from
commodity supply constraints.
The Group’s animal feed manufacturing
associate, John Thompson & Sons
Limited, in which the Group has a 50%
shareholding, delivered a satisfactory
performance in the period.
36
Origin Enterprises plc Annual Report and Accounts 2021
Case Study
Origin Amenity
Solutions
During the year, four of
Origin’s leading amenity
industry brand names
- Headland Amenity,
Rigby Taylor, Symbio
and TurfKeeper - were
brought together to form
a consolidated business
called Origin Amenity
Solutions (‘OAS’).
Following the launch of OAS, Origin is operating
at the leading edge of plant science and turf
technology in the UK amenity sector.
Origin Amenity Solutions - Turf Science
& Technology Centre
In addition to the launch of OAS, the Group has
invested in a dedicated amenity research and
development facility based in Throws Farm,
the Group’s industry-leading research and
development facility.
Following the investment in the facility, the
campus comprises an extensive trial ground
including fine grasses, ryegrass and sports
pitch surfaces.
The trial ground has a fully functioning
Rain Bird irrigation system installed,
Davis Weather monitoring and recording
station, Soil Scout below ground ‘real time’
monitoring temperature, moisture and
salinity and a low-invasive, ground water
dynamics drainage system.
Completing the extensive trials area are
greenhouses, a fully equipped laboratory
and a conference facility, all dedicated to
identifying, developing and informing the
industry on new and innovative products,
techniques and practices.
Turf maintenance at the
Turf Science & Technology
Centre at Throws Farm
37
STRATEGIC REPORT
Case Study
Green-tech
In March 2021, the Group announced
the acquisition of Greentech Limited
(‘Green-tech’), the UK’s leading
manufacturer and distributor of
landscaping, forestry and ground
maintenance equipment. Green-tech
strengthens Origin’s amenity business
offering with potential in the area of
environmental land management
and biodiversity enhancement for the
Group’s agri-focused businesses.
Based in its own purpose-built
business park in Rabbit Hill,
Arkendale in the UK, Green-tech
is the UK's largest landscaping
supplier. It provides professional
grade landscaping materials and
wholesale garden supplies for
landscape contractors, architects,
designers and landowners.
Employing more than 80 people
and stocking over 16,000 essential
landscaping products, the
Green-tech team supports a
wide range of customer projects
including maintenance of public
open spaces, tree planting in
woodlands, creation of urban
landscapes and planting of
biodiverse wildflower meadows.
16,000+
Essential landscaping
products stocked
80+
Employees
38
Origin Enterprises plc Annual Report and Accounts 2021
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The Green-tech team based
in Rabbit Hill, Arkendale
Business Review
Continental Europe
Continental Europe delivered
a good performance in FY21
with improved performances
in all territories.
More on Agrii in
Continental Europe
on page 44
“ Underlying business
volumes increased by
1.0% in the period, with
an improved operating
margin of 3.8% (FY20: 3.2%).”
40
Origin Enterprises plc Annual Report and Accounts 2021
Origin Enterprises plc Annual Report and Accounts 2021
Operational Review - Continental Europe1
Revenue
Operating profit2
Operating margin2
Change on prior year
2021
€'m
415.7
15.7
3.8%
2020
€'m
417.5
13.2
3.2%
Change
%
(0.4%)
18.3%
60bps
Underlying3
%
Constant Currency4
%
5.9%
21.6%
50bps
5.9%
21.6%
50bps
1 Excluding crop marketing. While crop marketing has a significant impact on revenue, its impact on operating profit is insignificant.
For the year ending 31 July 2021 crop marketing revenues and losses attributable to Continental Europe amounted to €154.4 million
and €0.1 million respectively (2020: €172.7 million and €0.4 million profit respectively). An analysis of revenues, profits and margins
attributable to agronomy services and inputs more accurately reflects the underlying drivers of business performance.
2 Before amortisation of non-ERP intangible assets and exceptional items.
3 Excluding currency movements and the impact of acquisitions.
4 Excluding currency movements.
Underlying business volumes
increased by 1.0% in the period, with
an improved operating margin of
3.8% (FY20: 3.2%). Working capital
investment levels reduced further in
FY21 following continued management
focus on ensuring the cash conversion
cycle is optimised and an improving
mix of cash sales.
During the year, the Group disposed of
its Belgian fertiliser business, Pillaert.
With the lack of scalable opportunities
and consolidation options in the
Belgian market, the Group decided to
exit this market and redeploy capital in
the Group’s core operations.
Poland
Poland delivered an improved
performance on the prior year.
The improved overall result was
supported by a cropping area in line
with the prior year and performance
benefitted from the ongoing focus
on cost efficiencies and the further
volume growth in Origin’s seed and
speciality nutrition portfolios. During
FY21, the nutrition portfolio continued
to develop with a more favourable mix
of speciality and strategic products
positively impacting margin. The
excellent operational performance
delivered included improved overall
operating margin and a reduced
working capital investment.
Continental Europe
in numbers:
€570.1m
Revenue
994
Employees
€15.6m
Operating Profit
C.18,000
Customers
41
STRATEGIC REPORT
Profit by Geography
2021
€61.0m
Continental Europe
Ireland & the UK
Latin America
10%
26% 64%
100-
50,000ha
Customer Profile
Romania
Romania delivered a satisfactory
result during the year, in line with the
performance of FY20.
Despite a slow start to the year as
a result of dry conditions delaying
in-field operations, more favourable
conditions in the second half of the
year were sufficient to allow catch-
up activity on-farm, with a focus on
improving the mix of higher margin
speciality and strategic products.
Working capital management
continued to be an area of focus during
the year resulting in a working capital
inflow year-on-year.
Ukraine
While Ukraine delivered an improved
contribution in FY21 and a further
significant reduction in working capital
levels, the operating profit delivered
was disappointing. We continue to see
improved performance in our strategic
crop protection portfolio, however the
market remains highly challenging.
With the backdrop of this highly
challenging market, the Group
continues to prioritise the
development of improved margin and
higher service agronomy channels,
together with delivering further
operational and working capital
efficiencies.
42
Read more about
Agrii’s journey
in Continental
Europe on pages
44 and 45
Origin Enterprises plc Annual Report and Accounts 2021
43
STRATEGIC REPORT Case Study
Agrii Continental
Europe in Profile
Following the launch in FY20 of
the Agrii brand across Romania
and Ukraine, in addition to
Poland, Agrii in Continental
Europe has gone from strength
to strength in FY21.
Servicing approximately 18,000 customers across 3
countries, Agrii in Continental Europe is a market
leader in the supply of inputs and agronomy services,
leveraging off a skilled workforce with direct on-farm
access to deliver unrivalled expertise and support
for sustainable and profitable farming systems across
Poland, Romania and Ukraine.
During FY21 Agrii held 53 Agrii
Demos, an industry-leading
initiative with a focus on
demonstrating Origin’s world-class
technologies including exclusive
seed varieties, specialised crop
nutrition products and tailored
crop protection products. The
aim of Agrii Demo is to illustrate
the impact technology can bring
and how on-farm yields can
be optimised.
Agrii’s 360-strong team of
agronomists/sales staff across our
Continental European geographies
ensures that farmers receive the
best advice and access to the
correct inputs to enable them
to optimise on-farm returns. In
addition to this, Agrii’s customer
base has access to RHIZA,
Origin’s digital service providing
the industry’s leading satellite
imagery - now with over 800,000
active hectares on-boarded to the
platform across Poland, Romania
and Ukraine.
44
Origin Enterprises plc Annual Report and Accounts 2021
Timeline
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2008
2014
2016
2018
2020
> Origin enters the
Polish market
following the
acquisition of
Dalgeta Agra Polska
(now Agrii Polska).
> Origin enters
the Ukranian
market following
the acquisition
of Agroscope
International, a
leading provider of
agronomy services.
> Opening of
> Launch of Agrii
state-of-the-art
Seed Processing
and Input
Formulation facility
in Aleksandrów,
Poland.
brand in Ukraine
and Romania in
common with
Origin’s other
direct farm
customer-facing
businesses.
> Dalgeta Agra Polska
is rebranded as
Agrii in line with
Origin’s leading
agronomy services
business in the UK.
> Origin enters
the Romanian
market following
the acquisition
of Comfert and
Redoxim, suppliers
of agronomy
services and inputs.
“ Agrii’s 360-strong team of agronomists/sales
staff ensures that farmers receive the best
advice and access to the correct inputs to
enable them to optimise on-farm returns.”
Agrii Demo in Romania
demonstrating Agrii’s
industry-leading
technologies and
agricultural developments
45
Business Review
Latin America
The Latin American (‘LATAM’)
reporting segment incorporates
the Group’s operations in Brazil.
Read more on
our Business Model
on pages 28 and 29
46
Origin Enterprises plc Annual Report and Accounts 2021
Origin Enterprises plc Annual Report and Accounts 2021
Operational Review - Latin America
Change on prior year
Revenue
Operating profit1
Operating margin1
Associates and joint venture2
2021
€'m
39.0
6.3
16.1%
-
2020
€'m
31.1
7.1
Change
%
25.4%
(11.4%)
58.1%
16.9%
22.9%
(680bps)
(600bps)
0.4
(100.0%)
-
Underlying3
%
Constant Currency4
%
58.1%
16.9%
(600bps)
(100.0%)
1 Before amortisation of non-ERP intangible assets and exceptional items.
2 Profit after interest and tax before exceptional items.
3 Excluding currency movements and the impact of acquisitions and disposals.
4 Excluding currency movements.
LATAM delivered a strong underlying
performance year-on-year with volume
development and underlying growth
driven by a double-digit percentage
increase in our core product range, a
more significant increase in controlled
release fertiliser sales, together with
a 3.5% increase in the total cropping
area dedicated to soya.
Underlying business volumes increased
by 45.7% in the period with revenues
increasing by 58.1% on an underlying
basis at constant currency (25.4% on a
reported basis). The impact of foreign
currency translation has significantly
impacted LATAM’s contribution in the
period following the weakening of the
Brazilian Real. Reported operating
profit has decreased by 11.4% despite
an increase in operating profit of
16.9% on a constant currency basis.
The result was supported by the
completion of our new controlled
release fertiliser plant in Minas Gerais,
which became operational in the
second half of the financial year.
Latin America
in numbers:
€39.0m
Revenue
149
Employees
€6.3m
Operating Profit
C.1,000
Customers
47
STRATEGIC REPORT Profit by Geography
2021
€61.0m
Latin America
Ireland & the UK
Continental Europe
Case Study
10%
26%
64%
50-
5,000ha
Customer Profile
Controlled Release
Fertiliser
Controlled Release Fertiliser (‘CRF’) is
one of the most efficient crop nutrition
technologies currently available to the
agricultural community.
Fortgreen has invested in a new technology based on
thermoplastic resin-covered fertiliser, enabling the release of
nutrients in a controlled manner - known as Controlled Release
Fertiliser. Conventional fertilisers are immediately dissolved
in the soil after application, providing nutrition for a short
period of time only, requiring multiple fertiliser applications
to ensure that the crop gets the
required nutrition.
This CRF technology can enhance
nutrient efficiency, decreasing
losses such as leaching and fertiliser
volatility, enabling a better use of
nutrients and also reducing the
impact on the environment.
Fortgreen has invested in its
facility in the city of Varginha
(Minas Gerais State, Brazil) to
enhance its ability to deliver CRF
product to its customers. The
Varginha plant employs 25 people
and can produce 25,000 tonnes of
fertiliser annually.
Fortgreen’s head office in
Paraná State in Brazil
48
The CRF production line in Varginha, Brazil,
which produces 25,000 tonnes of fertiliser annually
Origin Enterprises plc Annual Report and Accounts 2021 Case Study - Own Product Capability
Fortgreen's CRF Offering
Fortgreen’s CRF is an intelligent fertiliser
that adjusts the release of nutrients
in a controlled manner to match the
requirement of the growing crop.
Fortgreen's CRF has three different
technologies: Fortcote, Fortblen and
MaxxCote, designed for different
environments and different crops:
> Fortcote is a coated fertiliser developed to deliver nutrients
over a period of up to 12 months.
> Fortblen is another blend of CRF fertiliser with a coating designed
to deliver nutrients over a 3 - 6 month period.
> MaxxCote is designed to deliver nutrients up to a maximum of
3 months.
Read more about
Our Business
on page 20
The determining factors for release
include temperature and soil
moisture, and an incorporated
shield provides the controlled
release of nutrients for the crop
throughout its lifecycle.
Effective use of CRF lowers on-farm
operating costs as the product may
be applied once in pre-planting
for annual crops and early in the
cycle of perennial crops, increasing
efficiency and limiting the impact on
the environment.
Read more about
our commitment
to sustainability
on page 50
49
STRATEGIC REPORT
Sustainability
Report
'Nurturing Growth' is Origin's long-term
sustainability strategy to 2030, to deliver
shared value for our stakeholders.
Our sustainability journey is one of continuous evolution
and progression. As we embed sustainability and target-
setting across our Group operations, we are adopting
a measured, phased approach - with an initial focus on
establishing our emissions baseline and setting target
reductions in line with accepted scientific evidence.
To coincide with the release of Origin's 2021 Annual
Report, the Group has published its inaugural stand-
alone Sustainability Report. 'Nurturing Growth' details
our strategic approach to sustainability, reflects
progress made to date and charts the Group’s path
forward, while profiling a selection of our international
sustainability-related initiatives.
To view the full report, please visit
www.originenterprises.com
Performance Highlights 2021
Nurturing
our environment
> Development of science-based climate targets.
> Launch of our Net Zero iFarm programme.
> Adoption of integrated pest management
practices (IPM) throughout c.98% of UK
field trials.
> 11.5% increase in Enhanced Efficiency
Fertiliser sales since 2017.
15%
Absolute CO2
emissions
reduction
since 2017
11%
decrease in
fleet emissions
since 2017
38%
of the Group’s purchased
electricity now supplied
from renewable sources
22%
decrease in
water usage in FY21
compared to FY20
50
Origin Enterprises plc Annual Report and Accounts 2021 Read more
about Our
Business on
pages 20 and 21
Our Commitment
> Lead in our role as an advisor to our customers.
> Engage with the latest innovations and best practices, and
align to best-in-class carbon removal initiatives.
> Verify our GHG emissions through the development of
science-based targets.
> Deepen our commitment to health and safety, and to
fostering a culture where all colleagues feel safe, valued and
fully engaged.
> Develop a formal Environmental Management System aligned
to ISO14001, working to specific targets and KPI-based
measurement of our progress.
Nurturing
our society
> Active promotion of health, safety
and wellbeing.
> 38% female Board membership.
> Adoption of the UN Global
Compact principles.
88%
Sustainable
employee
engagement
score
79%
Favourable
diversity and
inclusion
category score
51
STRATEGIC REPORT
Risk Report
The Board, supported
by the Audit and Risk
Committee, has overall
responsibility to ensure the
principal risks faced by
the Group are identified,
evaluated and adequately
managed.
“ Identifying,
evaluating and
managing risks.”
Read our
Corporate
Governance
Statement on
page 69
Risk Management
The Board has overall responsibility
for risk management and internal
control systems throughout the
Group. The Audit and Risk Committee
assists the Board by taking delegated
responsibility for risk identification
and assessment and for reviewing
the Group’s risk management and
internal control systems, along with
making recommendations to the
Board regarding the operation of the
Group’s Risk Management Framework.
In 2015, the Board established a Risk
Committee to support a focus on risk
management. In the ensuing period,
the Risk Committee strengthened
risk management systems and
promoted a strong risk management
culture throughout the Group. In
September 2018, the Board approved
the amalgamation of the Audit and
Risk Committees.
The detailed Terms of Reference of
the Audit and Risk Committee are
available on the Company’s website:
www.originenterprises.com. The
principal duties and responsibilities of
the Audit and Risk Committee related
to risk management for the year
ended 31 July 2021 are as follows:
› continually review the Group’s
overall risk assessment processes
and its capability to identify and
mitigate new risks;
› consider the output of the
consolidated risk map and the
appropriateness of the positioning
of individual risks;
› review and approve the
statements to be included in the
Annual Report concerning risk
management;
› work and liaise as necessary with
other Board Committees;
› annually review the Audit and Risk
Committee’s Terms of Reference
and carry out a performance
evaluation review; and
› report to the Board on how it has
discharged its responsibilities.
Risk Management Framework
The Group has an enterprise-wide
Risk Management Framework and
a formal risk assessment process
in place through which risks are
identified and mitigating controls
are evaluated. The Risk Management
Framework and the formal risk
assessment process help to reduce
the possibility of the Group failing to
achieve its strategic objectives.
The risk assessment process is
driven by business unit management
who are best placed to identify the
significant ongoing and emerging
risks facing their businesses. The
outputs of these risk assessment
processes are subject to review
and the risks identified, together
with associated mitigating controls,
are also subject to audit as part of
regular audit programmes.
The Group’s Risk Management
Framework is set out
diagrammatically on page 53 and
incorporates the ‘three lines of
defence’ approach as follows:
› the first line comprises
business unit and functional
management who have day-to-
day responsibility for anticipating,
identifying and managing risk,
along with devising, implementing
and upholding effective internal
controls in each respective
business unit and functional area;
› the second line comprises Group
oversight functions who provide
specific functional expertise; and
› the third line comprises Internal
Audit and external professional
advisors who provide an additional
level of independent assurance.
52
Origin Enterprises plc Annual Report and Accounts 2021
Risk Management Framework
Origin Enterprises plc
Board
› Group and Business
Unit Risk Registers
and Maps
› Financial Reporting
Audit & Risk
Committee
›
Internal Control Systems
› Whistleblowing and Fraud
›
Internal Audit
Executive Group
Risk Committee
Senior
Management
Team
Business Unit /
Functional
Management
1st Line of Defence
Owns and
manages risk
Group
Oversight
Function
Internal Audit /
Other Assurance
Providers
2nd Line of Defence
Oversees risk and
provides support
3rd Line of Defence
Independent
assurance
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
53
Roles and Responsibilities
The roles and responsibilities in respect of the key elements of the Risk Management Framework are set out below:
Origin Enterprises plc
Board
> Set strategic objectives.
> Set delegation of authority.
> Continually review and monitor key risks of the Group.
> Report on the effectiveness of the risk management and internal control systems.
Audit and
Risk Committee
Executive Group Risk
Committee (‘EGRC’)
> Review the Group’s overall risk assessment processes.
> Review and monitor the key risks of the Group and the mitigating actions in place.
> Review and consider reports from Internal and External Audit.
> Review internal control systems.
> Review whistleblowing arrangements and concerns raised through this channel.
> Review procedures for identifying and preventing fraud and bribery.
> Liaise with other Board Committees.
> Report to the Board on how it has discharged its responsibilities.
> Meet, direct and support the business units on risk management.
> Develop the risk management and control environment.
> Perform risk deep dives for Group functions and business units.
> Identify and share best practices for managing risk.
> Review, assess and support the implementation of agreed risk mitigation
and control programmes.
> Define risk appetite and tolerance for the most important risks.
Senior Management Team
Business Unit / Functional
Management
> Develop the risk management and control environment.
> Ownership and accountability for operational and cross-functional risks.
> Review, assess and support the implementation of agreed risk mitigation
and control programmes.
Group Oversight Function
> Oversee business unit and functional risk management.
> Promote the importance of a strong control environment.
> Provide expertise in areas such as Group finance, risk management, tax, treasury, legal,
health and safety and information security.
Group Internal Audit
> Monitor the effectiveness of the Group Risk Management Framework.
> Develop and execute risk-based internal audit plans.
> Identify areas for improvement and assess status of mitigating controls.
> Provide independent and objective assurance on risk matters to the Audit and
Risk Committee.
The Audit and Risk Committee
comprises three independent
Non-Executive Directors, Gary
Britton (Non-Executive Senior
Independent Director, Chairman
of the Audit and Risk Committee),
Helen Kirkpatrick (Non-Executive
Director) and Hugh McCutcheon
(Non-Executive Director).
The length of tenure of the Directors
on the Audit and Risk Committee as
at 31 July 2021 is set out below:
Length of tenure on Audit
and Risk Committee*
Gary Britton
Helen Kirkpatrick
Hugh McCutcheon
Years
5.77
0.50
9.63
* Following the amalgamation of the Audit
and Risk Committees in FY19, the length
of tenure for a Director represents the
longest tenure of that Director on either
Committee.
Risk Register and Risk
Mapping Process
The Group’s risk management process
requires risk registers and risk maps
that reflect the current risk profile of
the Group and its units and functions.
Each business unit is required to
maintain a risk register, which is
reviewed and updated for submission
to the Head of Risk and Internal Audit
on a quarterly basis. A risk register
template, pre-populated with a
number of relevant risks covering
strategic, operational, financial
and compliance areas, has been
developed. This template is completed
by each business unit, with the impact
and probability of occurrence for
each risk determined and scored. A
risk scoring matrix is issued to ensure
a consistent approach is taken when
completing the probability and impact
assessments.
New or emerging risks are added to
the risk register as they are identified.
Risk appetite, tolerance and key risk
indicators are defined for all major
risks. From these risk registers a risk
map is created for each business.
This requires input from senior
management in each business unit.
The consolidated Group risk register
and risk map is prepared and
maintained by the Head of Risk and
Internal Audit and is updated to
reflect any significant changes noted
during the reviews of business unit
risk registers.
The Group and business unit risk
maps are reviewed quarterly by the
Executive Group Risk Committee
before principal risks are reviewed by
the Board’s Audit and Risk Committee
during the financial year.
54
Origin Enterprises plc Annual Report and Accounts 2021 Deep dives of key risks and feedback
to business leaders are performed
by both the Executive Group Risk
Committee and the Audit and Risk
Committee during the financial year.
2021 Highlights
In order to continuously improve
the risk management framework
and integrate it into day-to-day
operations, a number of activities
were carried out during the year
ended 31 July 2021:
› The EGRC met four times to
discuss top risks and actions.
› Risk deep dives were performed
for all major business units.
› Risk owners and action plans were
identified for all major Group-
wide risks.
› Additional information was
acquired for the most important
and emerging risks, together
with an initial assessment of risk
appetite.
› Additional focus brought to areas
such as sustainability, information
security, health and safety and
COVID-19 related risks.
Viability Statement
Going concern and the viability
statement
Details on the Directors’ assessment
of the Group’s viability and ability to
continue as a going concern are set
out below.
Going concern
The Group’s business activities and
financial performance are set out in
the Strategic Report on pages 5 to 59.
As set out in the financial statements,
the Group has generated net cash
flow from operating activities of
€61.9 million during the year and its
net bank debt at 31 July 2021 is €14.4
million. Having assessed the relevant
business risks, the Directors believe
the Group is well placed to manage
its business risks successfully.
The Directors have a reasonable
expectation, having made
appropriate enquiries, that the
Group and the Company have
adequate resources to continue in
operational existence for a period
of at least 12 months from the date
of approval of the consolidated
financial statements.
For this reason, they continue to
adopt the going concern basis in
preparing the financial statements.
Viability statement
The Directors have assessed the
Group’s viability over a three-year
period as part of the Group’s
strategic planning activities.
The Directors concluded that a
three-year period was the most
appropriate period to undertake this
assessment, and the Directors have
no reason to believe the Group will
not be viable over a longer period.
As part of the exercise to assess
viability, a review of the principal
risks and uncertainties facing the
Group was undertaken and the
potential impact on the Group’s
strategic plan, financial performance
and liquidity was considered. Based
on the results of the analysis, the
Board has a reasonable expectation
that the Group will be able to
continue in operation and meet its
liabilities as they fall due over the
three-year period.
Principal Risks and Uncertainties
The principal risks and uncertainties
which have the potential to have a
significant impact on the Group’s
business operations and strategy are
set out on pages 56 to 59. The risks
outlined are not listed in order of
importance.
In addition, the principal mitigation
measures are outlined. These
mitigation measures are designed
to give reasonable but not absolute
protection against the impact of each
of the potential events in question.
These risks represent the Board’s
view of the principal risks and
uncertainties at this point in time,
though it should be noted that this is
not an exhaustive list of all relevant
risks and uncertainties.
Matters which are not known to the
Board or events which the Board
currently considers to be of low
likelihood or low financial impact
could emerge and give rise to
material consequences.
COVID-19 Pandemic Impact
and Response
Similar to 2020, the main risks
associated with the pandemic are
those related to health and safety,
business continuity of key sites,
price volatility of raw materials,
IT security and new regulatory
requirements – as shown in the
principal risks and uncertainties
section on pages 56 to 59.
While COVID-19 has caused disruption
and uncertainty at societal level,
it is important to note that the
Group’s long-term business strategy
remains unchanged, as Origin is a
market leader in sectors which are
providing essential supports to critical
industries.
All business units have proven to be
resilient to COVID-19 disruptions,
and continuity of operations was
ensured while complying with
restrictions and health and safety
measures at individual country level.
All production plants and distribution
centres have remained operational
during the pandemic.
From a Group perspective, the
highest priority has been given to
protect the health, safety and well-
being of all employees. Some of the
measures taken include proactive
implementation of government
guidance, ensuring additional
protective equipment, hygiene and
cleaning protocols are in place,
implementing working from home
arrangements where possible and
having in place specific protocols for
high-risk individuals.
All business units continue to conduct
risk assessments of the potential
impacts of the COVID-19 pandemic
at an operational site level. Regular
reviews are carried out by Group and
business unit management of the
risk picture, mitigating actions and
contingency plans in place.
As countrywide vaccination
programmes advance and
restrictions are eased, the Group has
defined return-to-work protocols
for those support functions that
had to fully or partially work from
home. This varies country to country
and depends on local government
roadmaps and protocols.
55
STRATEGIC REPORT The principal risks and uncertainties:
Link to Strategic Priorities Key:
Scale
People & Organisations
Portfolio Positioning Market Focus
Impact
Strategic / Commercial
Mitigation
Risk Movement
Strategic Priority
Competitor activity, product innovation, pricing and margin erosion
The Group operates in a competitive
environment where the pace of innovation,
changes in regulatory requirements
(including chemical product revocations)
and the impact of competitors’ activity,
could have an adverse impact on margin and
on the Group’s results, including the risk of
impairment of assets.
Acquisitions and corporate development
The Group faces risks and challenges
associated with acquiring new businesses,
including the failure to identify suitable
acquisitions, to integrate acquisitions
properly and to identify accurately
all potential liabilities at the time of
acquisition.
Underperformance or reduction in
projected earnings of acquired entities
could result in impairment of goodwill
amounts recorded at the time of the
acquisitions.
The business operates Group-wide product
forums, undertakes extensive application
research and innovation and focuses on
sales, marketing and distribution targeted
at ensuring the Group is at the forefront
of application methodologies, product
innovation and the delivery of superior
advisory and inputs offerings. In addition,
the Group actively monitors competitor
activity and develops strategies to maintain
its competitive advantage. The business
also employs experienced teams who track
potential or actual changes in regulatory
requirements, such that they can be managed
and, where possible, mitigated against.
All significant acquisitions must be approved
by the Board. Financial, legal, commercial
and operational due diligence is performed
both by external consultants and in-house
resources in advance of all acquisitions.
There is substantial experience within the
Group which lends itself to strong project
management capability in the area of
acquisitions, transaction completion
and integration. Goodwill values from business
acquisitions are reviewed on an annual basis
to ensure they are representative of expected
future income for the respective cash
generating units.
Commodity price volatility
The Group is exposed to commodity
price risk, particularly in its Agri-Inputs
business, which sources raw materials in
local markets and internationally. It is also
indirectly exposed to output price volatility
in commodity markets which impacts
on the value of outputs to the Group’s
end-customer. International commodity
markets experienced higher-than-normal
volatility in 2021.
The Group prioritises margin delivery and cost
management as key focus points in mitigating
input commodity price risk.
From an output perspective the business is
focused on maximising yield for the end
customer by providing value-added services,
technologies and inputs that address the
quality, efficiency and output requirements of
primary food producers.
56
Origin Enterprises plc Annual Report and Accounts 2021
Risk Movement Key:
Increased Risk Decreased Risk
No Change
Impact
Mitigation
Risk Movement
Strategic Priority
Strategic/Commercial (continued)
Political
The Group is a multinational organisation
and may be negatively impacted by
political decisions, civil unrest or other
developments in the geographies in which
it operates. This can negatively impact the
supply chain process at country level.
Adverse weather and climate change
Adverse weather conditions, changes in
weather patterns and the impact of climate
change, affect farming conditions and
yields. The environment in which the Group
operates is highly seasonal. As a result,
the Group’s earnings profile is significantly
weighted towards the second half of the
financial year. This seasonality and the
inherent uncertainty of weather conditions
has an ongoing impact on working capital
requirements and can significantly impact
the Group’s results. During the prior year
we witnessed first-hand agriculture’s
vulnerability to climate-induced changes
as disruptive weather events had a direct
impact on our profitability.
Operational
Political decisions and civil unrest are not
within the control of the Group nor have
they had a major impact on the Group’s
performance to date. Nevertheless, the Group
monitors these risks and actively manages its
businesses to ensure minimum disruption to
its operations.
The long-term impact of climate change and
the immediate consequence of abnormal
weather events are not within the control of
the Group. Nevertheless, the Group monitors
these risks and focuses on the management of
the earnings profile, geographical diversity and
investment in working capital, along with the
monitoring of weather and climate change by
divisional and Group managers. Actions taken
by the Group to mitigate the impact of short-
term weather incidents and longer-term
climate change challenges are included in the
Group's 2021 Sustainability Report. Also, the
Group has incorporated recommendations of
the Task Force on Climate-related Financial
Disclosures (TCFD).
Compliance with legislation and regulations including environmental and health and safety matters
Compliance with laws and regulations is
of critical importance to the Group. The
business is subject to legislation in many
areas including health and safety, emissions
and effluent controls. Failure to comply
with applicable legislation or regulatory
obligations could result in enforcement
action, legal liabilities, costs and damage
to the Group’s reputation. Product
availability and potential changes in the
regulatory environment and legislation
could also have a material impact on the
Group’s results and reputation.
New health and safety requirements
have been implemented in 2020/21 as a
consequence of the COVID-19 pandemic.
The Group monitors closely all changes to
legislation and regulation. It operates thorough
hygiene and health and safety systems across
its businesses and has well-established
product, environmental and discharge controls
which ensure product traceability. The
Group also develops new products, diverse
sources of supply and distribution capability
for its products to ensure it continues to
compete effectively and to anticipate and
meet customer requirements and compliance
with upcoming regulation (particularly on
government-driven environmental measures)
on a continuing basis.
Additional protective equipment, site access
restrictions, social distancing and isolation
measures and sanitising facilities have been
put in place to protect our personnel from the
COVID-19 impact.
57
STRATEGIC REPORT
Link to Strategic Priorities Key:
Scale
People & Organisations
Portfolio Positioning Market Focus
Impact
Mitigation
Risk Movement
Strategic Priority
Operational (continued)
Procurement and supply chain
The Group sources its products from a number
of significant suppliers. The loss of any, or a
number, of these suppliers could have a material
impact on the Group’s profitability and the ability
to meet customer requirements. The Group
relies on the business and relationship with
large manufacturers to source materials, sustain
margins, recognise vendor-related income and
jointly develop new products. 2021 has seen
increased disruption in international trade
affecting logistics and supply chain activities.
Recruitment and retention of key personnel
The ongoing success of the Group is dependent
on attracting and retaining high quality senior
management and front line employees who can
effectively implement the Group’s strategy,
particularly on product knowledge and agronomic
advice.
IT / Disaster recovery / Cyber security
The Group is a multinational business with
operations in a number of countries. The Group’s
IT strategy and its use of technology is key
across the organisation and a robust IT disaster
recovery plan is of high importance. Significant
challenges would arise in the event there was a
lack of access to the IT systems and environment
or through cybercrime.
The volume and variety of cyber-attacks against
companies has increased in recent years, where
actors attempt to gain access to systems through
a variety of techniques to defraud, disrupt, hold
to ransom or steal data.
Post-Brexit impact
The Group has operations within and outside
the European Union. The UK’s exit from the EU
(‘Brexit’) has increased uncertainty, particularly
in relation to foreign exchange rates, interest
rates and the short- to medium-term outlook for
the UK economy. There is a risk that political and
economic divergence between the UK and the EU
could reduce demand in the Group’s UK market
and in other markets where there is currently a
significant trade relationship with the UK and could
adversely impact the financial performance of
the Group. There is also a risk that any continuing
and sustained weakening of sterling will impact
the Group’s translation of its sterling earnings
with consequential impacts on the reported
performance and results of the Group. In 2021, the
UK market experienced increased challenges in
the logistics sector e.g. availability of personnel for
farming, transportation and warehousing activities.
58
The Group endeavours to maintain close,
formal and long-term commercial relationships
with all its suppliers, the most significant of
whom are large multinational organisations
which supply across the Group’s geographical
markets. The Group, through its research and
development capabilities, in collaboration with
suppliers, customers and research bodies, is
well-positioned to develop innovative solutions
to meet its customer needs.
The Group mitigates this risk through
succession planning, strong recruitment
processes, training and development
programmes and offering competitive
and attractive remuneration and benefits
packages. Monitoring and maintaining high
employee engagement levels is paramount to
the Group’s success.
The Group ensures the presence of a robust
IT strategy together with a related disaster
recovery plan, both of which are frequently
reviewed and updated. The Group’s IT strategy
and disaster recovery plan is overseen by
the Group Chief Information Officer. Cyber
security controls are in place, which are
managed by external technical experts. IT
infrastructure and cyber security controls
have been strengthened to address the
additional requirements from COVID-19 and
increased volume of external attacks. Cyber
security assessments across all countries
and businesses have been performed and
controls are regularly monitored. Awareness
and training programmes are in place for
all employees with systems access and key
systems are backed up off-site.
Management and the Board are continually
monitoring short- and long-term impacts of
Brexit on all of the Group’s operations. Any
developments, including new information and
policy indications from the UK Government
and the EU, are reviewed on an ongoing basis
and appropriate actions are taken to mitigate
the consequences of Brexit and material
divergences between the UK and the EU.
Pre-Brexit contingency plans and measures
(e.g. obtaining operator certifications,
stock planning) have worked well to ensure
the security of Origin’s supply chain
and minimise commercial disruptions
or imposition of tariffs, particularly for
importation of raw materials.
Origin Enterprises plc Annual Report and Accounts 2021
Risk Movement Key:
Increased Risk Decreased Risk
No Change
Impact
Financial
Banking, credit, liquidity and market risk
The Group is a multinational organisation
with interests both within and outside the
Eurozone. As a result, Origin is subject
to the risk of adverse movements in foreign
exchange rates, fluctuations in interest rates
and other market risks (including movements
in the market value of investments which
impact the funding levels of our defined
benefits pension schemes). The Group is also
exposed to credit risk arising on customer
receivables and financial assets.
Fraud
The Group, like all businesses, is at risk of
fraudulent activities from both internal and
external sources.
Fraud can result in financial losses, loss of
assets, reputational damage and potential
regulatory fines.
Farm subsidy payments
The Group has operations within and
outside the European Union. The
uncertainty in relation to EU and UK farm
subsidy payments, in the medium term,
could reduce demand in the Group’s
European markets which could adversely
impact the financial performance of
the Group.
UK farmers will see their direct EU subsidies
(GBP 3 billion per annum) replaced by UK
payments, gradually, until 2027. The level
of funding will vary per farm size and will
depend upon compliance with targets (e.g.
environmental requirements).
Mitigation
Risk Movement
Strategic Priority
The Group Treasury Department mitigates such
risks under the supervision of the CFO. Foreign
exchange rate and interest rate exposures
are managed through appropriate derivative
financial instruments. Where available and
appropriate, credit insurance is in place to
mitigate credit risk and supply chain finance
solutions are used to optimise working capital.
Financial Risk Management objectives and
policies are further discussed in Note 23 to
the financial statements. The Group closely
monitors the ongoing costs of its defined
benefit schemes and has closed all such
schemes to new members.
The Group places a high importance on
the design and ongoing effectiveness of its
internal control processes. Physical and IT-
based security measures are in place across
the Group’s subsidiaries to mitigate such
risk. There are whistleblowing arrangements
in place throughout the Group. In addition,
where economically available, the Group has
appropriate insurances in place to provide
cover against such an event.
The Group has ensured appropriate financial
controls are in place due to temporary work
from home arrangements for part of its
support staff.
Management and the Board are monitoring the
potential impact of changes in EU (CAP) and
UK (DEFRA) farm subsidy payments with a view
to taking the appropriate actions targeted at
managing and where possible mitigating the
risk in the event it occurs.
Credit risk management processes are in
place to enable early warnings of customers
who face potential financial difficulties from
reductions in farm subsidies.
59
STRATEGIC REPORT
Read our
Corporate
Governance
Statement on
page 69
Green-tech, our latest
acquisition, supports a
wide range of customer
projects including
maintenance of public
open spaces, tree planting
in woodlands, creating
urban landscapes and
planting biodiverse
wildflower meadows.
16,000+
Essential landscaping
products stocked
60
Origin Enterprises plc Annual Report and Accounts 2021
Origin Enterprises plc Annual Report and Accounts 2021
E
C
N
A
N
R
E
V
O
G
61
Governance
Board of Directors
Directors’ Report
Chairman’s Overview
Corporate Governance Statement
Nomination and Corporate Governance Committee Report
Audit and Risk Committee Report
Remuneration Committee Report
62
64
67
69
76
79
83
STRATEGIC REPORT Board of Directors
The Board of Origin comprises
a Non-Executive Chairman, two
Executive Directors and five
Non-Executive Directors.
Non-Executive
Chairman
Executive Directors
Rose Hynes (64)
Non-Executive Director
Sean Coyle (48)
Chief Executive Officer
TJ Kelly (47)
Chief Financial Officer
Nationality: Irish
Nationality: Irish
Nationality: Irish
Date of appointment: 1 October 2015
Date of appointment: 1 October 2018
Date of appointment: 18 January 2021
Committee membership: Chairman of the
Nomination and Corporate
Governance Committee and member of
the Remuneration Committee.
Skills and experience: Rose previously held
a number of senior executive positions
with GPA Group plc in the period 1988-
2002, including General Counsel and Head
of the Commercial Department. Rose
is an Associate of the Irish Institute of
Taxation and of the Chartered Institute
of Arbitrators. She is a law graduate of
University College Dublin and a lawyer.
Principal current directorships:
Non-Executive Chairman of the Irish
Aviation Authority and Non-Executive
Director of Dole plc and Eircom Holdings
(Ireland) Limited.
Skills and experience: Sean joined the
Group as Chief Financial Officer in
September 2018 and was appointed Chief
Executive Officer on 1 July 2020. Sean was
previously at UDG Healthcare plc where he
held a number of roles, including Group
Finance Director and Managing Director
of its Healthcare Supply Chain Division.
Prior to UDG Healthcare, Sean was Chief
Financial Officer and an Executive Director
of Aer Lingus plc. He also spent over 10
years at Ryanair Holdings plc where he
held a number of senior management
positions. Sean is a Fellow of Chartered
Accountants Ireland having trained with
KPMG in Dublin.
Skills and experience: TJ was appointed
Group Chief Financial Officer and an
Executive Director on 18 January 2021.
TJ was previously at Hostelworld Group
plc, where he held the role of Chief
Financial Officer and was a member of
the Board. Prior to this, TJ worked in the
US and Ireland with Glanbia plc for 12
years, where he held a number of senior
leadership roles, including Chief Financial
Officer of the Performance Nutrition
Business and Group Financial Controller
with responsibility for Investor Relations.
TJ has also held senior finance positions in
Microsoft, GE Capital and eir. TJ is a Fellow
of Chartered Accountants Ireland and
completed his training with PwC.
62
Origin Enterprises plc Annual Report and Accounts 2021
Non-Executive Directors
Kate Allum (56)
Non-Executive Director
Gary Britton (67)
Non-Executive Senior
Independent Director
Helen Kirkpatrick (62)
Non-Executive Director
Nationality: British
Nationality: Irish
Nationality: British
Date of appointment: 1 October 2015
Date of appointment: 1 October 2015
Date of appointment: 1 October 2020
Committee membership: Chairman of the
Remuneration Committee.
Skills and experience: Kate previously
held a number of senior management
positions in the food and agricultural
sector, including Chief Executive of CeDo
Limited and First Milk Limited and Head
of European Supply Chain for McDonald’s
Restaurants.
Principal current directorships: Non-
Executive Chairman of Anpario plc,
Non-Executive Director of Cranswick plc,
Stock Spirits Group plc and The Co-op and
Chair of the Court of the University of the
West of Scotland.
Committee membership: Chairman
of the Audit and Risk Committee and
member of the Nomination and Corporate
Governance Committee.
Committee membership: Member of
the Audit and Risk Committee and the
Nomination and Corporate Governance
Committee.
Skills and experience: Gary was previously
a partner in KPMG where he served in
a number of senior positions, including
the firm’s Board, the Remuneration
and Risk Committees and as head of
its Audit Practice. Gary was formerly a
Non-Executive Director of The Irish Stock
Exchange plc and KBC Bank Ireland plc.
Gary is a Fellow of Chartered Accountants
Ireland and a member of the Institute of
Directors in Ireland.
Skills and experience: Helen previously
served on the Boards of Kingspan Group
plc, Dale Farm Co-operative and Wireless
Group plc. She has held a number of
senior positions in global professional
services firms, including Ernst & Young
and Deloitte and as a corporate finance
executive with Invest Northern Ireland,
the economic development agency for
Northern Ireland. Helen is a Fellow of
Chartered Accountants Ireland.
Principal current directorships: Non-
Executive Director of Cairn Homes plc.
Principal current directorships:
Non-Executive Director of NTR plc.
Hugh McCutcheon (67)
Non-Executive Director
Christopher Richards (67)
Non-Executive Director
Nationality: Irish
Nationality: British
Date of appointment: 21 November 2011
Date of appointment: 1 October 2015
Committee membership: Member of the
Audit and Risk Committee.
Committee membership: Member of the
Remuneration Committee.
Skills and experience: Hugh spent over
20 years with Davy and was for more than
10 years the Head of Corporate Finance
and a member of the firm’s Board. Hugh
has extensive capital markets experience
and mergers and acquisitions advisory
experience working with a range of
corporate clients and with the Department
of Finance. Past directorships include
Non-Executive Director of IPL Plastics Inc.
Hugh is a Fellow of Chartered Accountants
Ireland having trained with PwC.
Principal current directorships:
Director at the Irish Takeover Panel
Skills and experience: Christopher is Chief
Executive Officer of Plant Health Care plc.
He has more than 30 years international
experience in the agriculture industry and
currently farms in the West of England.
Christopher previously spent 20 years in
various leadership roles with Syngenta and
its predecessor companies before serving
as Chief Executive Officer and, later, Non-
Executive Chairman of Arysta Life Science.
Principal current directorships:
Non-Executive Chairman of Nanoco Group
plc and Non-Executive Director of Volac
International Limited.
E
C
N
A
N
R
E
V
O
G
63
Directors’ Report
The Directors present their annual
report together with the audited
consolidated financial statements
of the Group for the year ended
31 July 2021, which are prepared
in accordance with International
Financial Reporting Standards
(‘IFRSs’) as adopted by the EU.
Read our
Corporate
Governance
Statement on
page 69
Principal Activity and
Business Review
The Group’s principal activities
comprise the provision of value-
added services, technologies and
inputs that address the quality,
efficiency and output requirements
of primary food producers. The
manufacturing, research and
development, trading, distribution
and digital services operations are
based in Ireland, the UK, Brazil,
Poland, Romania and Ukraine.
During the year under review, the
Group resumed dividend payments
and announced the acquisition of
Greentech Limited in the UK and the
sale of its Belgian fertiliser business,
Pillaert Meststoffen.
A comprehensive review of the
performance and development of
the Group is included in the Chief
Executive’s Review on pages 10 and
11 and the Financial Review on pages
12 to 17. The Directors consider the
state of affairs of the Company and
the Group to be satisfactory. A list of
the Group’s principal subsidiaries and
associates is set out in Note 35 to the
Group financial statements.
The key performance indicators
relevant to the Group are set out in
the Strategic Report on pages 30
and 31.
Results for the Year
The results for the year are set
out in the Consolidated Income
Statement on page 109. Revenue for
the financial year was €1,658.4 million
(2020: €1,589.1 million). The profit
after tax and exceptional items for
the financial year was €38.2 million
(2020: €19.9 million).
(including treasury shares) comprised
126,396,184 ordinary shares of €0.01
each (2020: 126,396,184). At 31 July
2021, 800,330 securities were held
as treasury shares (2020: 800,330).
Details of the share capital of the
Company are set out in Note 28 to the
Group financial statements and are
deemed to form part of this report.
Future Developments
Following resumption of dividend
payments this year, the Group will
continue to pursue sustainable growth
to enhance shareholder value, through
a combination of organic investment,
strategic M&A and advancing the
Company’s ESG agenda.
Dividends
The Board is recommending a final
dividend of 7.85 cent per ordinary
share, which combined with the
interim dividend of 3.15 cent per
ordinary share, brings the total
dividend for the year to 11.00 cent
per ordinary share (2020: 3.15 cent).
Subject to shareholder approval,
the final dividend is payable on 4
February 2022 to shareholders on
the register on 14 January 2022.
Share Capital and Treasury
Shares
At 31 July 2021, the Company’s total
authorised share capital comprised
250,000,000 ordinary shares of €0.01
each (2020: 250,000,000) and the
Company’s total issued share capital
In respect of share transfers, the
Directors may refuse to register
any share transfer unless: (i) it is
in respect of a share on which the
Company does not have a lien; (ii)
it is in respect of only one class of
shares; (iii) it is in favour of not more
than four joint holders as transferees;
(iv) no restriction has been imposed
and is in force on the transferor or
transferee in default of complying
with a notice to disclose beneficial
ownership under the Articles of
Association or under Chapter 4 of
Part 17 of the Companies Act 2014;
and (v) the required formalities for
the registration of transfers have
been satisfied. With the exception
of transfers of shares through a
stock exchange on which the shares
are traded, the Directors may also
decline to register: (i) any transfer
of a share which is not fully paid;
or (ii) any transfer to or by a minor
or person of unsound mind but this
shall not apply to a transfer of such
a share resulting from a sale of the
share through a stock exchange on
which the share is traded.
64
Origin Enterprises plc Annual Report and Accounts 2021
The rights and obligations of the
ordinary shares are set out in
the Articles of Association of the
Company which are available
on the Company’s website:
www.originenterprises.com.
Principal Risks and Uncertainties
Under Irish company law (Section
327(1)(b) of the Companies Act 2014),
the Directors are required to give a
description of the principal risks and
uncertainties facing the business.
These are set out in the Risk Report
on pages 52 to 59.
Financial Instruments and
Financial Risk
The financial risks of the Group
include market risks, liquidity risks
and credit risks. Details of the
financial instruments used, along with
the financial management objectives
and policies to which they relate,
are set out in Note 23 to the Group
financial statements.
Corporate Governance
The Corporate Governance
Statement on pages 69 to 75 sets out
the Group’s application of corporate
governance principles and the
Group’s system of risk management
and internal controls. The Corporate
Governance Statement shall be
treated as forming part of the
Directors’ Report. The adoption of
the going concern basis in preparing
the financial statements is set out on
page 55.
Directors and Company
Secretary
Changes to the Board of Directors
during the year:
› Helen Kirkpatrick was appointed
as a Non-Executive Director
effective 1 October 2020;
› TJ Kelly joined the Company as
Chief Financial Officer and was
appointed to the Board on 18
January 2021; and
› Declan Giblin stepped down as
Executive Director from the Board
with effect from 31 July 2021.
Changes to the Board of Directors
subsequent to year end:
In August 2021, the Company
announced:
› the appointment of Aidan
Connolly as a Non-Executive
Director with effect from 1
October 2021; and
› the retirement of Non-Executive
Directors Hugh McCutcheon and
Kate Allum from the Board at
the conclusion of the company’s
next Annual General Meeting,
scheduled for 25 November 2021.
The names of the persons who are
Directors are set out below.
Directors:
Rose Hynes
(Non-Executive Chairman)
Sean Coyle
(Chief Executive Officer)
TJ Kelly
(Chief Financial Officer)
Kate Allum
(Non-Executive Director)
Gary Britton
(Non-Executive Senior
Independent Director)
Helen Kirkpatrick
(Non-Executive Director)
Hugh McCutcheon
(Non-Executive Director)
Christopher Richards
(Non-Executive Director)
Company Secretary:
Barbara Keane
The biographical details of the
Directors are set out on pages 62 and
63 of this Annual Report.
Directors’ Interests in Share
Capital at 31 July 2021
The interests of the Directors and
the Company Secretary in the shares
of the Company are set out in the
Annual Report on Remuneration on
pages 90 to 96.
Substantial Holdings
As at 31 July 2021, the Directors
have been notified of the following
shareholdings which amount to 3%
or more of the Company’s issued
ordinary share capital (excluding
treasury shares):
Number of
shares
%
20,068,234 15.9%
12,633,404 10.1%
11,379,536
11,378,695
9.1%
9.1%
6,329,777
5.0%
6,203,016
4.9%
4,080,684
3.3%
Artemis
Investment
Management
LLP
Setanta Asset
Management
Limited
FIL Limited
FMR LLC
Janus
Henderson
Group plc
Invesco
Limited
Bank of
Montreal
As at 28 September 2021, the
Directors have been notified of
the following shareholdings which
amount to 3% or more of the
Company’s issued ordinary share
capital (excluding treasury shares):
Number of
shares
%
20,068,234 15.9%
12,633,404 10.1%
11,379,536
11,378,695
9.1%
9.1%
6,329,777
5.0%
6,203,016
4.9%
4,080,684
3.3%
Artemis
Investment
Management
LLP
Setanta Asset
Management
Limited
FIL Limited
FMR LLC
Janus
Henderson
Group plc
Invesco
Limited
Bank of
Montreal
“ Following resumption of dividend
payments this year, the Group will
continue to pursue sustainable growth
to enhance shareholder value.”
65
GOVERNANCE
Directors’ Compliance Statement
The Directors acknowledge that
they are responsible for securing
compliance by the Company with
its relevant obligations as defined in
the Companies Act 2014 (hereinafter
called the ‘Relevant Obligations’). The
Directors confirm that they have drawn
up and adopted a compliance policy
statement setting out the Company’s
policies that, in the Directors’ opinion,
are appropriate to the Company in
respect of its compliance with its
Relevant Obligations.
The Directors further confirm that
the Company has put in place
appropriate arrangements or
structures that are, in the Directors’
opinion, designed to secure material
compliance with its Relevant
Obligations and that they have
reviewed the effectiveness of these
arrangements or structures during
the financial period to which this
Annual Report relates.
Audit and Risk Committee
Pursuant to the Company’s Articles
of Association, the Board has
established an Audit and Risk
Committee that in all material
respects meets the requirements
of Section 167 of the Companies
Act 2014. The Audit and Risk
Committee was fully constituted and
active during the current and prior
financial periods under review in this
Annual Report.
Disclosure of Information
to Auditors
The Directors in office at the date of
this report have each confirmed that:
› as far as he/she is aware, there is
no relevant audit information of
which the Company’s statutory
auditors are unaware; and
› he/she has taken all the steps
that he/she ought to have taken
as a Director in order to make
himself/herself aware of any
relevant audit information and
to establish that the Company’s
statutory auditors are aware of
that information.
Accounting Records
The Directors believe that they have
complied with the requirements of
Sections 281 to 285 of the Companies
Act 2014 with regard to accounting
records by employing personnel
with appropriate expertise and by
providing adequate resources to the
finance function.
The accounting records of the
Company are maintained at the
Company’s registered office at: 4-6
Riverwalk, Citywest Business Campus,
Dublin 24.
Corporate Social Responsibility
Origin recognises the importance of
conducting its business in a socially
responsible manner. The Group
understands its responsibilities
as an important member of the
communities in which it operates and
aims to not only provide employment
opportunities to the local population
but to earn a positive reputation in
those communities by carrying out its
commercial dealings and operations
with integrity and in compliance with
local and national regulations.
The Directors believe that the Group’s
long-term success will benefit from a
motivated and committed workforce
and, therefore, aims to provide its
employees with an environment to
work safely and develop their skills
and practices in a well-structured
manner. Health and safety in the
workplace is given high priority
across the Group and is driven
internally by health and safety reviews
and procedures.
Non-Financial Statement
For the purposes of Statutory
Instrument S.I.360/2017 European
Union (Disclosure of Non-Financial
and Diversity Information by certain
large undertakings and groups)
Regulations 2017, the areas of
environmental matters, social and
employee matters, respect for human
rights, and bribery and corruption are
discussed in the following sections
of the Strategic Report: Strategy on
pages 24 to 27, Business Model on
pages 28 and 29, Key Performance
Indicators on pages 30 and 31,
Sustainability Report on pages 50
and 51, and Risk Report on pages
52 to 59, and are deemed to be
incorporated in this part of the
Directors’ Report.
Research and Development
Certain Group companies are
involved in research and development
activities which are focused on
improving the quality, capabilities and
range of technologies available to
support our businesses.
Political Donations
No political donations were made in
the current year (2020: €Nil).
Events since the end of the
Financial Year
There were no material events since
the end of the financial year to report.
Auditors
The auditors, PricewaterhouseCoopers,
will continue in office in accordance
with Section 383(2) of the Companies
Act 2014.
On behalf of the Board
Rose Hynes
Director
28 September 2021
Sean Coyle
Director
28 September 2021
Read more about
the Directors on
pages 62 to 63
66
Origin Enterprises plc Annual Report and Accounts 2021
Chairman’s Overview
In Origin, we view high
standards of corporate
governance as a vital
element of how we
conduct our business,
align the interests
of stakeholders and
achieve long-term
success for the Group.
Dear Shareholder
As a Board of Directors, we regard
strong governance as one of
the foundations of a sustainable
corporate growth strategy. The Board
applies the principles of the Quoted
Companies Alliance Corporate
Governance Code (‘QCA Code’) as
the basis for its corporate governance
framework. In doing so, the Board
is committed to continue to apply
the highest standards of corporate
governance consistent with the size
and complexity of the business. With
continuing disruptions to businesses,
economies and governments globally
from the COVID-19 pandemic, it
remains vital for the Board to maintain
effective governance and strong
oversight of the business through
a robust governance framework
and principles.
Details of our compliance with
the QCA Code are outlined in our
Corporate Governance Statement
on pages 69 to 75. There are
detailed reports from our respective
Audit and Risk, Remuneration,
and Nomination and Corporate
Governance Committees, on pages
76 to 96. A detailed Risk Report is
outlined on pages 52 to 59.
This year we established a new Board
ESG Committee, chaired by Kate
Allum, with Hugh McCutcheon and
Helen Kirkpatrick as members. The
Committee supports the Board in
defining the Company’s ESG strategy
and overseeing the Company’s
development, implementation and
long-term evolution of policies,
programmes, targets and initiatives
relating to ESG matters. A key focus
for the Committee since formation
has been supporting the Company’s
development of its inaugural, stand-
alone Sustainability Report. For a copy
of the report, please see the website
at: www.originenterprises.com.
During the year, in line with best
practice, we facilitated an external
evaluation of the effectiveness of the
Board and its principal Committees.
The Board and I found this to be a
hugely valuable process and I am
pleased to report that the findings
of this independent review were
positive, and the Board continues
to operate in an effective way.
More information on this process is
outlined on page 74 of this report.
The Board recognises the
importance of maintaining a culture
across the Group that promotes
ethical behaviour and values and
supports excellence in our business.
We also have a strong boardroom
culture, with constructive challenge
flowing freely from the Non-
Executive Directors, underpinned
by a mutual respect between all
Directors. These hallmarks of Board
effectiveness and engagement were
reflected in the outcome of the
Board’s evaluation review.
We welcomed TJ Kelly to the Group
as Chief Financial Officer and
Executive Director on 18 January
2021, following announcement of his
appointment last year. D Giblin
retired from the Board at the end of
the financial year and remains with
the Group to focus primarily on
continued growth and development
of our LATAM business. I would like to
thank Declan for his commitment,
dedication and contributions to the
growth of the Group during his tenure
on the Board.
As part of ensuring regular Board
refreshment alongside succession
planning and the right balance of
skills, experience, diversity and
independence on the Board, the
Board also oversaw the following
developments:
› the rotation of the role of Senior
Independent Director from H
McCutcheon to G Britton on 1
January 2021;
› a refresh of the composition of
Board Committees, also effective
in January 2021; and
67
GOVERNANCE Read more about
the Directors on
pages 62 and 63
“ The Board recognises the importance
of maintaining a culture across
the Group that promotes ethical
behaviour and values and supports
excellence in our business.”
› the appointment of two new
Non-Executive Directors,
with Helen Kirkpatrick having
commenced on 1 October 2020
and Aidan Connolly to commence
on 1 October 2021.
Looking ahead, the Board also
considered the tenure and re-
appointment of the other Non-
Executive Directors, including the
Chair. With four of the Non-Executive
Directors reaching the end of their
respective current 3-year terms
in October 2021, the Board re-
appointed each of Gary Britton,
Christopher Richards and I for a
further 1-year term, to run until the
Company’s 2022 AGM. There was
no change to Helen Kirkpatrick’s
appointment, with Helen currently
serving the first of the three years of
her term.
Hugh McCutcheon and Kate Allum
will retire at the conclusion of the
company’s next Annual General
Meeting, scheduled for 25 November
2021. Hugh has served on the Board
for almost 10 years, while Kate has
been a Board member since 2015.
The Board would like to extend its
sincere appreciation to Hugh and
Kate for the dedication, commitment
and invaluable contribution that they
made to the Company during their
tenure. We wish them both all the
best in the future.
At the date of this report, the
Board comprises six Non-Executive
Directors and two Executive
Directors. Biographies of the
Directors are set out on pages 62
and 63. In accordance with the re-
election policy adopted by the Board
in 2018, Directors will retire at the
2021 AGM and offer themselves for
election or re-election (as
applicable), other than Kate Allum
and Hugh McCutcheon.
The Board recognises the importance
and benefits of supporting all aspects
of diversity throughout all layers of
the organisation. In accordance
with its Diversity Policy, the Board
achieved its target of a minimum of
33% female representation on the
Board by the end of 2020. Going
forward, we will continue to promote
an inclusive and diverse membership
on the Board. Diversity more broadly
is also a key consideration in the
continuing development of our senior
management succession planning
and in talent management across the
Group. For further details, see page
78 of the Nomination and Corporate
Governance Committee Report.
As a Board, we continue to invest
time in the development of skills
and knowledge relevant to the
performance of our duties and
taking account of external political
and regulatory developments.
During the year we received
presentations from professional
advisors on developments in
corporate governance and executive
remuneration, while keeping up to
date with best corporate governance
practices and topical business
concerns, including cyber security
and ESG developments, through
an internal programme of updates,
briefings and reports.
Rose Hynes
Chairman
28 September 2021
Read more:
Financial Statements
on page 99
68
Origin Enterprises plc Annual Report and Accounts 2021
Corporate Governance
Statement
The Board of Origin is
committed to applying the
principles of the QCA Code.
This statement details the Company’s key governance principles and practices,
how it has complied with the principles of the QCA Code and how the application
of the QCA Code supports the Company’s medium to long-term success. A copy
of the QCA Code can be obtained from the Quoted Companies Alliance website,
www.theqca.com.
Corporate Governance Framework
Origin Enterprises plc Board
Audit and
Risk Committee
Acquisitions
and Disposals
Committee
Nomination
and Corporate
Governance
Committee
Remuneration
Committee
ESG
Committee
Internal
Audit
Executive
Group
Risk
Committee
Chief
Executive
Officer
Executive
Directors
Sustainability
Steering
Committee
69
GOVERNANCE The Board of Directors
During the year, the Board of
Origin comprised a Non-Executive
Chairman, five Non-Executive
Directors and three Executive
Directors, namely the Chief
Executive Officer (‘CEO’), the
Chief Financial Officer (‘CFO’) and
the Chief Executive Officer, Latin
America (‘CEO, LATAM’). The CFO
joined the Board on 18 January
2021. The CEO, LATAM retired from
the Board at the end of the year.
The role of the Board is to provide
leadership and the Directors are
collectively responsible for the
long-term success of the Group.
The offices of the Chairman and the
CEO are separate and clearly distinct.
The division of their responsibilities
is set out in writing and has been
approved by the Board.
The CEO, together with the other
Executive Directors, are responsible
for the day-to-day running of the
Group, carrying out an agreed
strategy and implementing specific
Board decisions. Detailed biographies
of Directors at year end are set out
on pages 62 and 63.
The Board has delegated some of
its duties and responsibilities to the
various Committees of the Board
whose composition and activities are
set out in their reports on pages 76 to
96. A Risk Report is outlined on pages
52 to 59.
Directors have access to
independent professional advice
in the furtherance of their duties
should they think it necessary.
Schedule of Matters
Reserved for the Board
There are certain matters that are
deemed sufficiently significant
to be reserved for the Board. A
schedule of matters reserved for
the Board has been reviewed by the
Board during the year to ensure it
continues to be appropriate for the
Company.
Matters reserved for the Board
include:
Setting of Group strategy and
long-term objectives.
Approval of the Annual Report,
annual and interim results, interim
management statements and
any non-routine stock exchange
announcements.
Approval of the annual budget.
Approval of the dividend policy.
Changes to the Company’s capital
structure.
Policy on remuneration for
Executive Directors and senior
management team.
Approval of significant acquisitions.
Approval of significant capital
expenditure.
Chairman
The Chairman is responsible for
the leadership of the Board and
ensuring it is effective in carrying
out all aspects of its duties and
responsibilities.
The Chairman is also responsible
for setting the Board’s agenda and
ensuring that adequate time is
available for the consideration of
all agenda items, in particular
strategic issues.
The Chairman is the link between
the Board and the Company. She
is specifically responsible for
establishing and maintaining an
effective working relationship with
the Chief Executive Officer and
promotes a culture of open dialogue
between the Executive and Non-
Executive Directors. She has the
responsibility to ensure that there is
ongoing and effective communication
with shareholders and to ensure that
members of the Board develop and
maintain an understanding of the
views of the shareholders.
Chief Executive Officer
The Chief Executive Officer is
responsible for the day-to-day
management of the Group’s
operations and for the
implementation of Group strategy
and policies agreed by the Board. The
Chief Executive also has a key role in
the process of setting and reviewing
strategy. The Chief Executive instils
the Company’s culture and standards,
which include appropriate corporate
governance, throughout the Group.
In executing his responsibilities, the
Chief Executive is supported by the
Chief Financial Officer and, during
the past year, the Chief Executive
Officer, Latin America, who together
are responsible for ensuring that high
quality, timely information is provided
to the Board on the Group’s financial
and strategic performance.
Non-Executive Directors
The Non-Executive Directors’ main
responsibilities are to review the
performance of senior management
and the Group’s financial information,
assist in strategy development, and
ensure appropriate and effective
systems of internal control and
risk management are in place. The
Non-Executive Directors review the
relationship with external auditors
and monitor the Risk Management
Framework through the Audit
and Risk Committee, monitor
the remuneration structures and
policy through the Remuneration
Committee and consider the Board
composition, succession planning and
best corporate governance practices
through the Nomination and
Corporate Governance Committee.
The Non-Executive Directors provide
a valuable breadth of experience and
independent judgement to Board
discussions.
Details of the Non-Executive Directors
are set out on pages 62 and 63.
Senior Independent Director
The Senior Independent Director is
responsible for providing advice to
the Chairman as necessary, serving
as an intermediary to the other
Directors when necessary, supporting
the Chairman with the annual Board
evaluation if required, leading an
annual performance review of the
Chairman and being available to
shareholders should they have any
matters for discussion other than
through the normal channels.
Company Secretary
All Directors have access to the
advice and services of the Company
Secretary, who is responsible for
ensuring compliance with Board
procedures. The Company Secretary
is also responsible for supporting the
Chairman and other Board members
as necessary, including the
70
Origin Enterprises plc Annual Report and Accounts 2021
management of Board and
Committee meetings, advising on
Directors’ duties and facilitating
appropriate, quality and timely
information flows between the
business and the Board. Both
the appointment and removal of the
Company Secretary are matters for
the Board as a whole.
Appointment of Directors
The Nomination and Corporate
Governance Committee is responsible
for reviewing the structure, size
and composition (including the
skills, knowledge, experience and
diversity) of the Board and making
recommendations to the Board with
regard to any new appointments of
Non-Executive Directors. The report
of the Nomination and Corporate
Governance Committee is set out on
pages 76 to 78.
The Board may appoint a person
willing to act as a Director, either
to fill a vacancy or as an additional
Director, provided that the
appointment does not cause the
number of Directors to exceed 15
as set out in the Company’s Articles
of Association. Such new Directors
will hold office only until the next
AGM, at which the new Director will
be subject to election by ordinary
resolution of the Company.
The terms of appointment of each
of the Non-Executive Directors are
set out in the Directors’ Letters
of Appointment and are available
for inspection at the Company’s
registered office during normal
office hours and at the AGM of
the Company. New Non-Executive
Directors are appointed to serve
an initial three-year term of office
which may be extended, subject to
Board approval.
Re-election of Directors
The Company’s Articles of Association
provide that one third of the
Directors shall retire by rotation each
year. New Directors are subject to
election by shareholders at the next
AGM following their appointment.
Following a change to the Directors’
re-election policy in 2018, Directors
now retire annually and offer
themselves for re-election at the
AGM. Details of the length of tenure
of each Director on the Board
as at 31 July 2021 are set out in
the Nomination and Corporate
Governance Committee Report on
page 77.
Induction and Training
All new Directors are
comprehensively briefed on the
Group and its operations upon
joining the Board. They also receive
extensive induction materials (via
the Directors’ electronic boardroom)
and a training session by the
Company’s Nominated Advisor.
Training requirements are considered
as part of the annual Board
evaluation process.
During the year professional advisors
advised the Board on developments
in corporate governance and
executive remuneration.
The Chairman and Company
Secretary review Directors’ training
and development needs on an
ongoing basis, as appropriate.
Independence
The Board has carried out its annual
evaluation of the independence of
each of its Non-Executive Directors
and has given regard to the highest
standards in governance in doing
so. Non-Executive Directors should
be independent in character
and judgement and free from
relationships or circumstances which
are likely to affect, or could appear to
affect, the Directors’ judgement.
Since their appointment, all current
Non-Executive Directors, including
the Chairman, have been considered
by the Board to be independent
and free from any business or other
relationship which could materially
affect their judgement.
In determining the independence of
Christopher Richards, the Board had
particular regard to the commercial
relationship between Agrii UK, a wholly
owned subsidiary of Origin, and Plant
Health Care (‘PHC’), of which
Christopher Richards is CEO. Following
successful product trials over the
past number of years, and as detailed
in our 2020 Annual Report, Agrii UK
and PHC intended to enter into a
formal contractual agreement with an
estimated average annual value of
c. £200,000. This contract was
concluded during 2021. In addition,
Headland, a wholly owned subsidiary
of Origin in the UK, made purchases of
c. £70,000 from PHC for a single raw
material product.
The Board considered this relationship
and concluded that Christopher
Richards was fully independent, taking
into account the following material
factors:
› the nature and scale of the
contractual commitments;
› the separation of discussions
between PHC and Origin’s UK
subsidiaries from the Origin
Board and Christopher Richards
in particular; and
› the absence of any role of
Christopher Richards in the
selection of PHC as a service
provider to any UK subsidiaries
or in any future discussions of a
similar nature.
In these circumstances, the Board
concluded that there was no material
relationship, financial or otherwise,
which might either directly or
indirectly influence the objectivity
or independence of Christopher
Richards.
More than half the Board comprises
Non-Executive Directors, in line with
the highest standards of governance.
Commitment
Under the terms of their appointment,
all Non-Executive Directors agree to
the time commitment which requires
them to allocate sufficient time
to discharge their responsibilities
effectively. This matter is considered
by the Nomination and Corporate
Governance Committee on an
ongoing basis in accordance with its
Terms of Reference. Each year, any
external commitments of Directors
are considered as part of the review
of Board composition. The Board is
satisfied that each of the Directors
continues to dedicate sufficient time
to their roles.
As part of the review this year,
there was particular regard for the
external commitments of Christopher
Richards. While acknowledging
certain advisor guidelines governing
evaluation of time commitments
generally, the Board remains fully
satisfied that taking into account
the particular circumstances in
71
GOVERNANCE relation to Christopher Richards, he
has the available time to dedicate
to the Company and discharge
his responsibilities. The depth of
Christopher’s experience in the
sector reduces the time commitment
involved in serving on both the
Origin Board and as CEO of PHC.
The Board acknowledges that the
time commitment needed to sit on
another Board from the same industry
is less burdensome. Furthermore, as
highlighted last year, over the past
18 months the scope of Christopher
Richards’ responsibilities at PHC
reduced, following his resignation as
Chairman. Given the similarities in
business model and the overlap in
sector, his role at PHC can be viewed
as complementary to his role at Origin
and he continues to provide valuable
insight of his experience at other
companies and in the Company’s
relatively unique sector.
Christopher Richards continues
to demonstrate a high level of
commitment to the Company and the
Board has satisfied itself of his ongoing
ability to devote sufficient time to his
role at Origin.
Board Meetings
A schedule of Board and Committee
meetings is circulated to all Board
members annually setting out the
dates on which Board and Committee
meetings will be held. Board papers
are circulated electronically at least
three days in advance of the meetings.
During the year ended 31 July 2021
the Board held a total of 11 meetings.
There is regular contact between
meetings in order to progress the
Company’s business. Individual
attendance at Board meetings and
Committee meetings is set out in the
table below.
Board of Directors:
Attendance at meetings during the year ended 31 July 2021
Directors
Kate Allum*
Gary Britton
Sean Coyle
Declan Giblin
Rose Hynes
TJ Kelly**
Helen Kirkpatrick***
Hugh McCutcheon*
Christopher Richards****
Board
Audit and Risk
Committee
Remuneration
Committee
Nomination and
Corporate Governance
Committee
11/11
11/11
11/11
11/11
11/11
6/6
10/10
11/11
10/11
2/2
4/4
–
–
–
–
3/3
4/4
–
3/3
–
–
–
3/3
–
–
–
3/3
–
6/6
–
–
6/6
–
5/5
1/1
–
The attendance statistics represent:
Total number of meetings attended by the Director / Total number of meetings held during the year to which the Director was eligible to attend.
*
K Allum and H McCutcheon attended all meetings of the Audit and Risk Committee and the Nomination and Corporate Governance Committee,
respectively, while they were members of those Committees during the financial year.
** TJ Kelly attended all Board meetings from the date of his appointment during the financial year.
*** H Kirkpatrick attended all Board meetings from the date of her appointment during the financial year and all Committee meetings of which she was
a member from the time of her appointment to those Committees.
**** C Richards attended all Board meetings during the year, with the exception of a conference call in respect of which there had been a late scheduling
update (and for which input was provided by him in advance).
Committees
The Board has delegated
certain responsibilities to Board
Committees, namely:
› Audit and Risk Committee
› Remuneration Committee
› Nomination and Corporate
Governance Committee
› Acquisitions and Disposals
Committee
› Environmental, Social and
Governance (ESG) Committee
These Committees operate under
clearly defined, formal Terms
of Reference and report to the
Board at each Board meeting,
as appropriate, via the relevant
Committee’s Chairman. The Terms
of Reference for the ESG Committee
were developed and approved by the
Board during the year, and for all other
Committees, were reviewed during
the year. The Terms of Reference
continue to be subject to an annual
review in future years. Any revisions
will be proposed by the respective
Committees and then proposed to
the Board for approval. The Terms
of Reference for the principal Board
Committees are available to view on
the Company’s website:
www.originenterprises.com.
Audit and Risk Committee
The primary function of the Audit
and Risk Committee is to assist the
Board in fulfilling its financial and risk
oversight responsibilities. Further
details of the activities of the Audit
and Risk Committee are set out in
the report on pages 79 to 82.
Remuneration Committee
The Remuneration Committee is
responsible for determining the
remuneration policy for the Executive
Directors, Chairman and the senior
management team. Further details
of the activities of the Remuneration
Committee are set out in the report
on pages 83 to 96.
72
Origin Enterprises plc Annual Report and Accounts 2021
Nomination and Corporate
Governance Committee
The Nomination and Corporate
Governance Committee is
responsible for reviewing the
structure, size and composition of
the Board, including with respect to
diversity of background and gender
and having regard to the Group’s
businesses and strategic objectives,
and for considering any corporate
governance developments that may
affect the Company.
The Committee is comprised
solely of Non-Executive Directors.
Further details of the activities
of the Nomination and Corporate
Governance Committee are set out
in the report on pages 76 to 78.
Acquisitions and
Disposals Committee
The Acquisitions and Disposals
Committee is responsible for
providing guidance when sought
by management on the search for
acquisitions and acquisition-related
matters, and for considering any
recommendations from management
in regard to specific divestments.
Environmental, Social and
Governance ('ESG') Committee
The Environmental, Social and
Governance Committee represents
the Board in defining the Group’s ESG
strategy and supporting, challenging
and overseeing the Group’s
development, implementation and
long-term evolution of policies,
programmes, practices, targets and
initiatives relating to ESG matters.
to the dealings in shares of the
Company by Directors and certain
employees of the Group and is
designed to ensure that these
individuals neither abuse, nor set
themselves under suspicion of
abusing, information held about the
Group which is not in the public
domain. It is also designed to ensure
compliance with the EU Market
Abuse Regulation (596/2014) which
came into effect on 3 July 2016.
The Policy requires Directors
and certain employees to obtain
clearance from the Company
Secretary and the Non-Executive
Chairman prior to dealing in the
shares of the Company and prohibits
them outright from dealing in shares
during prohibited periods and when
in possession of inside information.
Risk Management and Internal
Control Procedures
The Board is responsible for
identifying, evaluating and managing
the principal risks faced by the
Group in achieving its strategic
objectives. It is ultimately responsible
for monitoring risk management
systems including financial controls,
controls in respect of the financial
reporting process and controls of an
operational and compliance nature.
The Group’s internal control systems
are designed to manage, rather
than eliminate, the risk of failure to
achieve the Group’s objectives and
can only provide reasonable, and not
absolute, assurance against material
misstatement or loss.
Remuneration
It has been the Company’s practice
since 2015 to put the Remuneration
Report to an advisory, non-binding
shareholder vote at the AGM.
Accordingly, the Annual Report
on Remuneration will be put to an
advisory, non-binding shareholder
vote at the Company’s 2021 AGM.
The Board has delegated
responsibility for the ongoing
monitoring of the effectiveness of
the risk management and internal
control systems to the Audit and Risk
Committee. Details in relation to the
Audit and Risk Committee’s work in
this regard are set out in the Audit
and Risk Committee Report on
pages 79 to 82.
Share Ownership and Dealing
Details of each of the Directors’
interests in Origin’s shares are set
out in the Remuneration Committee
Report on pages 83 to 96.
The Board has adopted the Origin
Enterprises plc Share Dealing Policy
(the ‘Policy’). The Policy relates
The Directors have established a
number of key procedures designed to
provide an effective system of internal
control and risk management.
The key procedures which are
supported by detailed controls and
processes include:
Internal Audit
A Group internal audit function, led
by the Head of Risk and Internal
Audit, undertakes examinations of
business processes on a risk basis
and reports to the Audit and Risk
Committee on controls throughout
the Group.
Control Environment
Maintaining an organisation structure
with defined lines of responsibility
and specified delegations of
authority within which the Group’s
activities can be planned and
monitored. The control environment
is overseen by experienced Group
and divisional management teams.
Financial Reporting
A comprehensive financial reporting
system involving setting of annual
budgets and plans, timely monthly
reporting and variance analysis
and ongoing review, supported by
information systems developed for
this purpose.
Whistleblowing and Anti–Bribery
Arrangements
The Audit and Risk Committee
is responsible for the review of
the Company’s whistleblowing
arrangements and for ensuring that
these arrangements are suitable for
the Group’s employees. The Audit
and Risk Committee reviewed these
arrangements during the year and
satisfied itself that they are adequate
for the needs of the Group. The
Committee also reviewed the level of
compliance of employees across the
Group with Company anti-bribery
and corruption training.
Risk Management Framework
The Group has a robust Risk
Management Framework to identify,
manage and monitor risks.
Details of the operation of the Risk
Management Framework are outlined
in the Risk Report on pages 52 to 59.
Annual Review of Internal Controls
and Risk Management Systems
The Directors confirm that they have
conducted an annual review of the
effectiveness of internal control
and risk management systems as
operated up to and including the
date of approval of the financial
statements. This has had regard to
the processes for identifying the
73
GOVERNANCE
principal business risks facing the
Group, the methods for managing
those risks, the controls that are
in place to contain them and the
procedures to monitor them.
Consolidated Financial
Statements
The consolidated financial
statements are prepared subject
to the oversight and control of
the CFO, ensuring correct data
is captured and all information
that is required to be provided is
disclosed. The consolidated financial
statements are reviewed by the Audit
and Risk Committee and approved
by the Board.
Board Evaluation
The Board conducts an annual
evaluation of its performance,
operation and effectiveness and that
of each of its principal Committees,
the Audit and Risk, Remuneration,
and Nomination and Corporate
Governance Committees, with the
evaluation being externally facilitated
every three years. In the year ended
31 July 2021, this process was
conducted externally by the Institute
of Directors in Ireland (‘IoD’).
The external review comprised
of a confidential questionnaire
completed by each Director while
each Committee member completed
a further confidential questionnaire.
The review considered a range of
factors, including the balance of
skills and experience of the Board
members, independence of the
Board, Board diversity, the Board
agenda and relations between
the Executive and Non-Executive
Directors. IoD presented the findings
of the evaluation to the Board at
the June 2021 board meeting. The
results of the review demonstrated
that the Board was operating
effectively. Actions were agreed
which will be undertaken during the
current year.
Culture
Origin operates a decentralised
business model, where each country
and business have unique elements
in their culture. These businesses,
centered on employees and
customers, operate within a Group
culture that strives for innovation
and operational and people
excellence. The close involvement of
the Executive Directors and senior
executives with the businesses
continues to foster a culture of
excellence across the Group.
Through the Group’s principles
and policies, the Directors are
committed to ethical behaviours
and values. The Board receives
regular contributions from senior
executives, including updates on
culture, principles and policies,
at meetings of the Board and
Committees to assess that ethical
values and behaviours are recognised
and respected through the Group.
Employee Engagement
The employee engagement
programme ‘Let’s Talk’ is now into
its third year of operation. The
programme seeks to enable regular
two-way dialogue between the Board
and the Group’s employees. It allows
Non-Executive Directors to meet
management and employees on site
visits, where the Chairman, CEO,
CFO and designated Non-Executive
Directors are informed of local
market conditions and operations
as well as relevant local matters.
In light of continued COVID-19
restrictions, including in relation to
travel, the programme this year was
conducted online. Non-Executive
Directors had a virtual visit to the
Group’s business units in Romania
and the UK. The Chairman and the
Senior Independent Director also
joined COVID-19 update calls with
local senior management teams to
continue direct engagement.
The Chairman met with the other
Non-Executive Directors without
the Executive Directors present on a
number of occasions during the year.
Executive Directors’ performance
is reviewed by the Remuneration
Committee in conjunction with the
Chief Executive Officer, except in the
case of his own performance review.
Relations with Shareholders
The Board has responsibility for
ensuring that satisfactory
engagement with the Company’s
shareholders takes place.
Presentations are made to both
existing and prospective institutional
shareholders, principally after the
release of the interim and annual
results. Origin issues trading
updates twice yearly. Information is
disseminated to shareholders and
the market generally, via regulatory
information services, as well as
the Company’s website:
www.originenterprises.com, which
provides the full text of press releases
and all regulatory announcements.
All current and historical Annual
and Interim Reports and investor
presentations are also made available
on the Company’s website.
The Board is kept informed of the
views of shareholders through
the Chief Executive Officer, Chief
Financial Officer and Head of
Investor Relations’ attendance at
investor meetings, capital market
days and results presentations.
Furthermore, relevant feedback
from such meetings, investor
relations reports and broker notes
are provided to the entire Board on
a regular basis. The Chairman is also
readily available to meet institutional
shareholders as and when
appropriate. The Senior Independent
Director and other Non-Executive
Directors will attend meetings with
major shareholders if requested. Our
engagement programme continued
this year with meetings taking place
virtually in line with ongoing COVID-19
guidelines. The Company Secretary
engages annually with proxy advisers
in advance of the AGM.
The Executive Directors and Head of
Investor Relations maintain ongoing
engagement with the investment
community through a variety of
different media including investor
meetings and conferences, ongoing
investor calls and correspondence.
During FY21, meetings were
held with over 150 investors and
Origin participated at 8 investor
conferences. Due to the ongoing
imposition of COVID-19 related
restrictions, all engagements
throughout the year were conducted
virtually.
All shareholders are given the
opportunity to ask questions at the
AGM, which this year is scheduled to
take place at The Merrion Hotel, Upper
Merrion Street, Dublin 2 at 11.00am
on Thursday, 25 November 2021,
subject to the prevailing government
and health authority guidelines at
the time. Any updates to the AGM
74
Origin Enterprises plc Annual Report and Accounts 2021
required to reflect the then-current
COVID-19 situation will be duly notified
in advance. The Board Chairman along
with the Chairs of the Audit and Risk,
Remuneration, and Nomination and
Corporate Governance Committees,
will be available to answer questions at
that meeting.
Further information on the AGM
(including as to date, time, venue or
otherwise) will be made available on
publication of the notice of the AGM
and in any further updates published
by the Company.
A copy of the Memorandum and
Articles of Association of the
Company may be inspected at the
registered office of the Company or
on the Company’s website:
www.originenterprises.com.
General Meetings
Matters of Ordinary Business
General meetings of the Company
are convened in accordance with,
and governed by, the Articles of
Association and the Companies
Act 2014. In the normal course, the
Company is required to hold an
AGM at intervals of no more than
15 months from the previous AGM,
provided that an AGM is held in
each calendar year. The AGM has
the power to consider the following
matters, which are deemed by the
Articles of Association to be items
of ordinary business: (i) declaring a
dividend; (ii) the consideration of the
financial statements and reports of
the Directors and Auditor; (iii) the
election of Directors in the place
of those retiring by rotation or
otherwise; (iv) the re-appointment of
the retiring Auditor and the fixing of
the remuneration of the Auditor; (v)
generally authorising the Directors,
for a period to expire no later than
the conclusion of the next AGM, to
allot relevant securities with a nominal
value not exceeding the authorised
but unissued share capital of the
Company; (vi) generally authorising
the Directors, for a period to expire
no later than the conclusion of the
next AGM, to allot equity securities
non-pre-emptively; and (vii) generally
authorising the Directors, for a period
to expire no later than the conclusion
of the next AGM, to exercise the power
of the Company to make market
purchases of the Company’s shares.
Matters of Special Business
All other business transacted at an
AGM and all business transacted at
an Extraordinary General Meeting (an
‘EGM’) are deemed by the Articles of
Association to be special business.
Matters which must be attended to
by the Company in general meeting
pursuant to the Companies Act 2014
include: (i) amending the Memorandum
and Articles of Association; (ii)
changing the name of the Company;
(iii) increasing the authorised share
capital, consolidating or dividing share
capital into shares of larger or smaller
amounts or cancelling shares which
have not been taken by any person;
(iv) reducing the issued share capital;
(v) approving the holding of the AGM
outside the State; (vi) commencing the
voluntary winding up of the Company;
(vii) re-registering the Company as
a company of another type; (viii)
approving a substantial property
transaction between the Company and
a Director; (ix) approving a guarantee
or security for a loan or similar
transaction made by the Company to
a Director or connected person of a
Director; and (x) approving the draft
terms of a cross-border merger.
During the year, an EGM was held
at which shareholders approved
resolutions relating to the replacement
of CREST with a central securities
depository operated by Euroclear
Bank SA/NV for the electronic
settlement of trading in the Company’s
shares. The resolutions approved at
the EGM included amendment of the
Company’s Articles of Association
associated with the migration. The
full text of the approved resolutions
can be found in the Notice of
Extraordinary General Meeting
available on the Company's website:
www.originenterprises.com.
Attendance at Meetings and
Exercise of Voting Rights
A quorum for an AGM or an EGM
of the Company is constituted by
three members entitled to vote and
present in person, by proxy or duly
authorised representative in the case
of a corporate member. The passing of
resolutions at a general meeting, other
than special resolutions, requires a
majority of more than 50% of the
votes cast. To be passed, a special
resolution requires a majority of at
least 75% of the votes cast.
Votes may be given either personally
or by proxy or by a duly authorised
representative of a corporate member.
Subject to rights or restrictions for the
time being attached to any class or
classes of shares, on a show of hands,
every member present in person
and every proxy or duly authorised
representative of a corporate body
shall have one vote. No individual shall
have more than one vote and, on a
poll, every member present in person
or by proxy, or a duly authorised
representative of a corporate body,
shall have one vote for every share
carrying voting rights of which the
individual is the holder.
The instrument appointing a proxy
must be deposited at the registered
office of the Company or at another
place specified for that purpose in the
notice of the meeting, not less than
48 hours before the time for holding
the meeting or adjourned meeting
at which the person named in the
instrument proposes to vote.
Restrictions may be placed on
specified shares such that their
holder or holders will not be entitled
to vote at any general meeting, in
circumstances where the holder or
holders of those shares has failed to
pay any call at the time appointed for
payment or the holder or holders has
failed to comply, to the satisfaction
of the Directors, with a notice to
disclose beneficial ownership under
the Articles of Association or under
Chapter 4 of Part 17 of the Companies
Act 2014.
Shareholders have the right to
attend, speak and vote at general
meetings. In accordance with Irish
company law, the Company specifies
a record date for each general
meeting, by which date shareholders
must be registered in the Register of
Members of the Company in order to
be entitled to attend.
D&O Insurance
The Company maintains Directors’
and Officers’ liability insurance
cover, the level of which is reviewed
annually.
75
GOVERNANCE
Nomination
and Corporate
Governance
Committee Report
About this Committee
The Nomination and Corporate Governance Committee
comprises three independent Non-Executive Directors:
› Rose Hynes (Non-Executive Chairman)
› Gary Britton (Non-Executive Senior Independent Director)
› Helen Kirkpatrick (Non-Executive Director)
Dear Shareholder
As Chairman of the Nomination
and Corporate Governance
Committee, I am pleased to present
the report of the Nomination and
Corporate Governance Committee
for the year ended 31 July 2021.
This report has been prepared by
the Nomination and Corporate
Governance Committee and
approved by the Board.
Corporate Governance
Framework
The Board of Origin operates under
and applies the principles of the
Quoted Companies Alliance
Corporate Governance Code (‘QCA
Code’). Details of the Company’s
compliance with the QCA Code are
outlined in the Corporate Governance
Statement on pages 69 to 75. The
Committee keeps under review
corporate governance developments
with the aim of ensuring that the
Company’s corporate governance
policies and practices continue to be
in line with best practice.
The Committee also keeps under
review the leadership needs of
the organisation, both Executive
and Non-Executive Directors, with a
view to ensuring that the organisation
is positioned to compete effectively
in the marketplace and adapt as
needed to strategic, regulatory and
commercial changes affecting the
Company and the environment in
which it operates.
The Committee is comprised solely of
Non-Executive Directors.
Executive Director Changes
With the appointment of Sean Coyle
as Chief Executive Officer on 1 July
2020, the recruitment of a successor
to the role of Chief Financial Officer
was an area of focus and culminated
in the appointment of TJ Kelly in
September 2020. TJ assumed the
role of Chief Financial Officer on 18
January 2021 and was co-opted to
the Board on the same date.
As announced in our Interim Results
Statement on 4 March 2021, Declan
Giblin stepped down from the Board
at the end of the financial year. On
behalf of the Board, I would like to
extend our appreciation to Declan
and acknowledge his leadership in
the growth and diversification of the
Group over his 13 years as Executive
Director. Declan remains in a senior
management role continuing to focus
on the growth and development of
the Group’s LATAM division.
Non-Executive Director Updates
The Committee supported the Board
with the recruitment of two
additional Non-Executive Directors,
with the appointment of Helen
Kirkpatrick with effect from 1
October 2020 and, most recently, the
appointment of Aidan Connolly, to
take effect on 1 October 2021.
Non-Executive Directors Hugh
McCutcheon and Kate Allum
will retire from the Board following
the 2021 AGM, after tenures of 10
years and 6 years respectively. We
would like to extend our appreciation
to both Hugh and Kate for their
contributions and commitment to
the Board and wish them well in their
future endeavours.
Further in line with our commitment
to high standards of corporate
governance and the importance of
regular Board refreshment and
development, the role of Senior
Independent Director rotated from
Hugh McCutcheon to Gary Britton
on 1 January 2021. This rotation
was complemented by a refresh
of the composition of the Board
Committees during the year.
76
Origin Enterprises plc Annual Report and Accounts 2021
This included the Nomination and
Corporate Governance Committee,
which saw Hugh McCutcheon step
down and Helen Kirkpatrick join.
I would like to thank Hugh for his
contributions to the work of the
Committee over the past 5 years and
to welcome Helen as a member of the
Committee.
External Evaluation
During the year, the annual
performance evaluation of the
Board and its principal Committees
was conducted externally by the
Institute of Directors in Ireland, with
the findings presented to the Board.
I am pleased to report that the
outcome of this review was positive.
More information on this process is
outlined on page 74 of this report.
Committee Activities
The duties and responsibilities of
the Committee are summarised
in this report and are set out in
full in the Terms of Reference for
the Nomination and Corporate
Governance Committee which are
available on the Company’s website:
www.originenterprises.com. This
report also includes an overview of
the Committee’s activities during
the year.
Rose Hynes
Chairman of the Nomination and
Corporate Governance Committee
28 September 2021
“ The Board
recognises the
benefits of a high
quality and diverse
Board in enhancing
decision-making,
effectiveness
and supporting a
culture of inclusion.”
Duties and
Responsibilities
The principal duties and
responsibilities of the Nomination and
Corporate Governance Committee
include the following:
› regularly review the structure,
size and composition (including
the skills, knowledge, experience
and diversity) of the Board and
make recommendations to
the Board with regard to any
changes;
› consider succession planning
for Directors and other senior
executives, taking into account
the challenges and opportunities
facing the Company, and the
skills and expertise needed on
the Board in the future;
› keep under review the leadership
needs of the organisation, both
Executive and Non-Executive
Directors, with a view to
ensuring the continued ability
of the organisation to compete
effectively in the marketplace;
› review annually the time
required of each of the Non-
Executive Directors in discharging
responsibilities;
› before any appointment is
made to the Board, evaluate the
balance of skills, knowledge,
experience and diversity on the
Board, and, in the light of this
evaluation, prepare a description
of the role and capabilities
required for a particular
appointment;
› be responsible for identifying
and nominating, for the approval
of the Board, candidates to fill
Board vacancies as and when
they arise;
› make recommendations to
the Board as regards the
re-appointment of any Non-
Executive Director at the
conclusion of their specified
term of office;
› make recommendations to
the Board concerning suitable
candidates for the role of Senior
Independent Director and the
appointment of any Director to
Executive or other office;
› make recommendations to the
Board as regards membership
of each of the Audit and
Risk Committee and the
Remuneration Committee, and
other Board Committees as
appropriate;
› conduct an annual Committee
evaluation process and
additionally review the results
of the Board’s performance
evaluation process that relate to
the composition of the Board;
› keep under review corporate
governance developments that
might affect the Company, with
the aim of ensuring that the
Company’s corporate governance
policies and practices continue
to be in line with best practice;
› ensure that the principles set out
in the QCA Code are observed;
and
› review the disclosures and
statements made in the report
to shareholders on corporate
governance contained in the
Annual Report.
Length of Tenure
The length of tenure of the Directors
on the Board and on the Nomination
and Corporate Governance
Committee as at 31 July 2021 is
set out below.
Length of tenure
on Board
Kate Allum
Gary Britton
Sean Coyle
Rose Hynes
TJ Kelly
Helen Kirkpatrick
Hugh McCutcheon
Christopher Richards
Average Tenure
Length of tenure
on Nomination and
Corporate Governance
Committee
Gary Britton
Rose Hynes
Helen Kirkpatrick
Years
5.83
5.83
2.83
5.83
0.54
0.83
9.69
5.83
4.65
Years
2.84
5.75
0.50
77
GOVERNANCE Meetings
The Nomination and Corporate
Governance Committee met six times
during the year.
Board Composition
Appointment of Chief Financial Officer
Further to the announcement last
year of the appointment of a new
Chief Financial Officer, TJ Kelly joined
Origin on 18 January 2021, at which
time he was also co-opted to the
Board.
Retirement of Executive Director
Declan Giblin, the Company’s CEO,
LATAM, stepped down from the Board
with effect from 31 July 2021, while
continuing in a senior management
role focusing on the LATAM business.
Appointment of Non-Executive
Directors
Following a comprehensive
recruitment process last year for an
additional Non-Executive Director,
Helen Kirkpatrick was appointed
to the Board with effect from 1
October 2020.
The Company also recently
announced the appointment of Aidan
Connolly as Non-Executive Director
with effect from 1 October 2021.
Retirements, Elections and Re-
elections at AGM
In accordance with the Company’s
Directors’ re-election policy and
best practice corporate governance,
Directors offer themselves for re-
election on an annual basis. Kate
Allum, Gary Britton, Sean Coyle,
Declan Giblin, Rose Hynes, Hugh
McCutcheon and Christopher
Richards were re-elected, and
Helen Kirkpatrick was elected, by
the shareholders as Directors at the
Company’s AGM on 18 November
2020. Kate Allum and Hugh
McCutcheon will retire at the
conclusion of the 2021 AGM and
will not be offering themselves for
re-election. All other Directors will
retire at the 2021 AGM and offer
themselves for election or re-
election, as applicable.
Chairman, Senior Independent
Director and Non-Executive Directors
Rose Hynes continues to serve as
Chairman of the Board, following re-
appointment by the Board this year
for a further 1-year term up to the
Company’s 2022 AGM. The position
of Senior Independent Director
rotated on 1 January 2021 from Hugh
McCutcheon to Gary Britton, who
along with Christopher Richards, is
also serving an additional 1-year term
up to the Company’s 2022 AGM, having
been re-appointed by the Board.
Helen Kirkpatrick is 1 year into her
first 3-year term.
Boardroom Diversity
The Board recognises the benefits of
a high quality and diverse Board in
enhancing decision-making,
effectiveness and supporting a
culture of inclusion. Diversity at Board
level is an important element
to achieving our objectives in a
sustainable, responsible way. All
Board appointments are made
on merit and objective criteria with
due regard to diversity.
In considering nominations to
the Board and reviewing Board
composition, the Committee will
consider the benefits of all aspects
of diversity in order to maintain an
appropriate range and balance of
skills, experience and knowledge on
the Board.
The Board currently comprises eight
members in total, of which two are
Executive and six are Non-Executive
(including the Chairman). At year
end, female Directors constituted
38% of the Board, having achieved
the Board’s target of a minimum
of 33% female representation by
the end of 2020. At the date of this
report, female representation on the
Board is 38%.
Succession Planning
The Board, through the Nomination
and Corporate Governance
Committee, is committed to
effectively managing leadership
succession and assessing the
senior executives’ talent pool in
the Group. The Board proactively
engages with senior executives,
through regular contributions from
the senior management team at
Board and Committees meetings and
interactions through the 'Let’s Talk'
programme. Ongoing updates on
succession planning are also provided
to the Board by the Chief Executive
Officer, including a comprehensive,
formal deep dive presented to the
Board during the year covering the
Group’s senior leadership team.
Annual Evaluation of
Performance
The Board conducts an annual
evaluation of its own performance
and effectiveness and that of
its principal Committees and
Committee Chairmen. In the year
ended 31 July 2021, this process
was externally facilitated by the
Institute of Directors in Ireland. The
conclusion from this process was
that the Nomination and Corporate
Governance Committee and the
Chairman of the Committee operated
effectively and to a high standard.
Read our
Financial Review
on pages 12 to 17
78
Origin Enterprises plc Annual Report and Accounts 2021
Audit and Risk
Committee Report
About this Committee
The Audit and Risk Committee comprises three independent
Non-Executive Directors:
› Gary Britton (Non-Executive Senior Independent Director,
Chairman of the Audit and Risk Committee)
› Helen Kirkpatrick (Non-Executive Director)
› Hugh McCutcheon (Non-Executive Director)
The members of the Committee have significant financial and
business experience.
Dear Shareholder
I am pleased to present the report
of the Audit and Risk Committee for
the year ended 31 July 2021 which
has been prepared by the Audit and
Risk Committee and approved by the
Board.
This report provides an overview
of the principal duties and
responsibilities of the Audit and Risk
Committee, its role in ensuring the
integrity of the Group’s published
financial information and an outline
of its activities for the year.
During the year, the Audit and
Risk Committee had a change in
membership, welcoming Helen
Kirkpatrick as a new member and
expressing appreciation to Kate Allum
for all her work and contributions
as she stepped down from the
Committee.
An area of focus for the Audit
and Risk Committee this year has
been a drive to further enhance
the Company’s enterprise risk
management model, including
increased consideration of emerging
risks and the development of a risk
appetite framework. We continue
to invest in our cyber security
programme and remain vigilant to
cyber risks, being mindful of the
changing threat landscape brought
about in the past year in particular
by remote working and the COVID-19
pandemic.
Building on our Health, Safety &
Wellbeing agenda has been another
highlight for the Audit and
Risk Committee this year. We
continue to both seek and see
progress on compliance initiatives,
upgrading of our data capture
reporting tools and further
embedding of a health and safety
culture across the organisation.
A key responsibility of the Audit
and Risk Committee each year
is to review the Company’s risk
management and internal control
systems. Details in regard to these
matters are set out in the Risk Report
on pages 52 to 59.
The Terms of Reference of the Audit
and Risk Committee are available on
the Company’s website:
www.originenterprises.com.
Gary Britton
Chairman of the Audit and Risk
Committee
28 September 2021
“ We continue to invest in our cyber
security programme and remain vigilant
to cyber risks, being mindful of the
changing threat landscape brought
about in the past year.”
Read our
Corporate
Governance
Statement on
page 69
79
GOVERNANCE
As part of this review, the Audit and
Risk Committee considers reports
from the Chief Financial Officer
and the reports from the External
Auditor on the outcomes of its
annual audit. The Audit and Risk
Committee assesses the External
Auditor annually in respect of its
independence and objectivity, taking
into account relevant professional
and regulatory requirements and the
relationship with the Auditor as a
whole. In addition, the Audit and Risk
Committee reviews and considers the
Company’s draft Annual Report and
the Group’s financial statements in
advance of final approval.
Ahead of final approval of the Annual
Report and the financial statements,
the Audit and Risk Committee
discussed with management the key
sources of estimation and critical
accounting judgements outlined
in Note 34 to the Group’s financial
statements. The significant areas of
focus considered by the Audit and
Risk Committee in relation to
the Group’s financial statements for
the year ended 31 July 2021, and
how these have been addressed,
are listed on page 81. In concluding
that the list represents the primary
areas of judgement, the Audit
and Risk Committee considered a
detailed report which referenced
both quantitative and qualitative
judgement factors across each
significant account balance,
assessing the impact on the user of
the financial statements. These are
also areas of higher audit risk and,
accordingly, the External Auditor
reported to the Audit and Risk
Committee on these judgements
which were then duly considered by
the Audit and Risk Committee.
Duties and
Responsibilities
The principal duties and
responsibilities of the Audit and Risk
Committee include to:
› monitor the integrity of the
financial statements (including
the Annual Report, Interim
Report and preliminary results
announcements);
› monitor and review the financial
reporting process, reviewing
and challenging the judgements
of management in relation to
interim and annual financial
statements;
›
›
›
›
›
›
review the effectiveness of the
Company’s internal financial
controls and internal control and
risk management systems, along
with reviewing and approving
the statements to be included
in the Annual Report concerning
internal control and risk
management systems;
review the Company’s
whistleblowing arrangements;
review the Company’s procedures
for detecting and preventing
fraud;
review the Company’s systems
and controls for the prevention
of bribery;
review the effectiveness of the
Internal Audit function;
review and monitor
management’s responsiveness
to the findings and
recommendations of the Internal
Auditor;
› oversee the relationship with
the External Auditor, including
(but not limited to) monitoring
all matters associated with
the appointment, terms,
remuneration and performance
of the External Auditor and
reviewing the scope and results
of the audit and the effectiveness
of the process; and
›
review annually the Audit and Risk
Committee’s Terms of Reference
and conduct a performance
evaluation of the Audit and Risk
Committee.
Length of Tenure
The length of tenure of the Directors
on the Audit and Risk Committee as
at 31 July 2021 is set out below:
Length of tenure
on Audit and Risk
Committee*
Gary Britton
Helen Kirkpatrick
Years
5.77
0.50
Hugh McCutcheon
9.63
* Following the amalgamation of the Audit and
Risk Committees in FY19, the length of tenure for
a Director represents the longest tenure of that
Director on either Committee.
Meetings
The Audit and Risk Committee met
four times during the year. Each
Audit and Risk Committee meeting
was attended by the Head of Risk
and Internal Audit and by the Chief
Financial Officer from the time of
joining the Company. The External
Auditor also attended these meetings
as required. The Audit and Risk
Committee separately met with both
the Head of Risk and Internal Audit
and the External Audit Lead Partner
without executive management
being present.
Financial Reporting
The primary role of the Audit and
Risk Committee, in relation to
financial reporting, is to review the
appropriateness of the half-year and
annual financial statements, with
both management and the External
Auditor, and to report to the Board.
This review focuses on, amongst
other matters:
›
›
the quality and acceptability
of accounting policies and
practices;
the clarity of the disclosures
and compliance with financial
reporting standards and relevant
financial and governance
reporting requirements; and
› material areas in which significant
judgements have been applied or
there has been discussion with
the External Auditor.
80
Origin Enterprises plc Annual Report and Accounts 2021
The significant areas of judgement that were discussed at the interim and year-end Audit and Risk Committee
meetings included:
Key Audit Areas
Area
Goodwill
Discussion
The Audit and Risk Committee recognises that impairment reviews of
goodwill involve a range of judgemental assumptions.
These assumptions typically include business plans and projections, cash
flow forecasts and associated discount rates. Management provided the
Audit and Risk Committee with an analysis of the impairment reviews
undertaken by cash-generating unit, including the forecasts and key
assumptions used together with a summary of the results.
This analysis, together with the detail set out in Note 15 to the financial
statements, was reviewed and challenged by the Audit and Risk Committee.
Following these discussions, the Audit and Risk Committee is satisfied that
the approach to impairment reviews, key assumptions made and conclusions
reached, are appropriate.
Settlement Price Adjustments
The Audit and Risk Committee acknowledges the level of judgement
required in estimating settlement price adjustments payable given the
complexity of such arrangements in addition to the timing of payment.
The Audit and Risk Committee discussed the basis used for calculating
settlement price adjustments, the historical accuracy of settlement price
adjustment calculations, the level of judgement required and the expected
settlement date of related payments, with management.
Following these discussions, the Audit and Risk Committee is satisfied that
the accounting treatment adopted is appropriate and that settlement price
adjustments are accurately stated at year end.
Risk Management, Internal
Control and Internal Audit
The Audit and Risk Committee has
been delegated responsibility by the
Board for reviewing the effectiveness
of the Company’s internal financial
controls and internal control and risk
management systems.
The Chairman of the Audit and Risk
Committee reports to the Board on
the Audit and Risk Committee’s
activities and how it has discharged
its responsibilities in this regard.
The Audit and Risk Committee has
responsibility for reviewing the
Group’s consolidated risk register
and ensuring that the processes for
identifying, managing and mitigating
risks are operating effectively. The
principal risks facing the Group
and the processes and steps taken
to mitigate these risks are set out
in the Risk Report on pages 52 to
59. Included in this assessment is
consideration of increasing cyber-
attacks against organisations and
global supply chain pressures.
Risk Management
The Audit and Risk Committee’s
main duties from a risk management
perspective encompass the review of
the Group’s overall risk assessment
processes, including the ability
to identify and manage new risks.
Additionally, it is responsible for
considering the appropriateness of
the Group’s risk review process and
advising the Board in respect of the
current risk exposures of the Group.
The Executive Group Risk Committee
continues to be an important and
effective element of the Group’s Risk
Management Framework. It acts
as a key interface between the
business units and the Audit and Risk
Committee, supporting the alignment
of risk management strategies on an
enterprise-wide basis.
Internal Control and Internal Audit
The Audit and Risk Committee
considers the results of internal
control reviews and reviews the
effectiveness of the Internal Audit
function, ensuring it is adequately
resourced and has conducted an
annual review of its effectiveness, as
part of its annual activities.
The Group’s internal control systems
are designed to manage, rather
than eliminate, the risk of failure to
achieve the Group’s objectives, and
can only provide reasonable, and not
absolute, assurance against material
misstatement or loss. In assessing what
constitutes reasonable assurance, the
Audit and Risk Committee considers
the materiality of financial and
operational risks and the relationship
between the costs of, and benefit
from, internal control systems.
The Head of Risk and Internal Audit
has responsibility for all Internal
Audit matters and ensuring the
effective operation of the Internal
81
GOVERNANCE
encourage both employees and
business partners to raise issues
of potential wrongdoing within the
Company, without fear of retaliation.
The Audit and Risk Committee also
received updates on the Company’s
anti-bribery and corruption training
programme and plans.
Annual Evaluation of
Performance
Every three years, the annual
effectiveness review of the Board
and its principal Committees is
facilitated externally. Following the
last external facilitation in 2018, this
year’s review was facilitated by the
Institute of Directors in Ireland. The
review covered the Audit and Risk
Committee’s own performance,
operation and effectiveness. The
conclusion from this process was that
the performance of the Audit and
Risk Committee and of the Chairman
of the Audit and Risk Committee were
satisfactory.
Reporting
Following each meeting of the Audit
and Risk Committee, the Chairman of
the Audit and Risk Committee reports
to the Board on the activities and
key discussion areas of the Audit and
Risk Committee. The Chairman of the
Audit and Risk Committee is available
at the Company’s AGM to answer
questions on the report on the Audit
and Risk Committee’s activities
and matters within the remit of the
Audit and Risk Committee’s role and
responsibilities.
Audit function. The Head of Risk and
Internal Audit independently reports
to the Audit and Risk Committee in
relation to the work and findings of
the Internal Audit function.
Each year, the Internal Audit function
sets out a rolling programme of
Internal Audit reviews to be carried
out across the Group’s businesses
throughout Ireland and the UK,
Continental Europe and Latin
America. The Internal Audit review
programme is tailored to focus
attention on the particular financial
reporting and operational risks at
each location, which may have a
material financial impact on the
Group’s results. The Audit and Risk
Committee receives this annual
audit plan in advance, reviews the
adequacy of the plan and considers
whether it represents an appropriate
allocation of Internal Audit resources
given its knowledge of the Group’s
risk profile. The Internal Audit
function reports its findings to the
Audit and Risk Committee, with
each report comprising findings and
detailed recommendations as to
processes and controls which could
be implemented or improved in
order to reduce the level of
financial reporting and operating
risk. It also updates the Audit and
Risk Committee on processes
and improvements made, where
appropriate, at each location since its
previous Internal Audit review.
External Auditor
The Audit and Risk Committee
oversees the relationship with
the External Auditor, including
approval of the External Auditor’s
fees. PwC conducted the external
audit in respect of the year ended
31 July 2021.
Appointment, Independence and
Effectiveness
The Audit and Risk Committee
considers the re-appointment of the
External Auditor each year, whilst
assessing its independence on an
ongoing basis. The Audit and Risk
Committee continues to consider
PwC to be independent in the role
of Auditor. The External Auditor is
required to rotate the Audit Partner
every five years. The current Audit
Partner has completed three years as
Auditor for the Company.
In addition, the Audit and Risk
Committee considers the
effectiveness of the external audit
process on an annual basis, reporting
its findings to the Board as part of its
recommendations. This process is
carried out with the completion of a
detailed questionnaire which includes
consideration of the Audit Partner,
the audit approach, communication,
independence, objectivity and
reporting. The members of the Audit
and Risk Committee complete the
questionnaire and consider the
outcome of the results.
Accordingly, the Audit and Risk
Committee has provided the Board
with a recommendation to re-appoint
PwC as External Auditor.
Non-Audit Services
During the year, the Audit and Risk
Committee undertook its annual
review of the policy on engagement
of the External Auditor to provide
non-audit services. This policy is
designed to further safeguard the
independence and objectivity of
the External Auditor. Details of the
amounts paid to the External Auditor
for non-audit services are set out
in Note 5 to the Group’s financial
statements.
Whistleblowing and Anti-Bribery
The Audit and Risk Committee
is responsible for the review of
the Company’s whistleblowing
arrangements and for ensuring
that these are suitable for the
Group’s employees. The Audit and
Risk Committee reviewed these
arrangements during the year
and satisfied itself that they are
adequate for the needs of the
Group. Updates this year included
the completion of the roll-out of
the renewed Whistleblowing Policy
across the Company’s business
units and the migration of the
Group’s whistleblowing platform
to a new provider with enhanced
functionality, 24/7/365 availability
and additional reporting channels.
The Policy and related procedures
82
Read the Risk
Report on
page 52
Origin Enterprises plc Annual Report and Accounts 2021
Remuneration
Committee Report
About this Committee
The Remuneration Committee comprises three independent
Non-Executive Directors:
› Kate Allum (Non-Executive Director,
Chairman of the Remuneration Committee)
› Rose Hynes (Non-Executive Chairman)
› Christopher Richards (Non-Executive Director)
Dear Shareholder
On behalf of the Board, I am pleased
to present the Remuneration
Committee Report for the year
ended 31 July 2021. The objective of
the report is to provide shareholders
with information on the Company’s
remuneration policy to enable them
to understand the link between
remuneration structures and the
Group’s financial performance.
The responsibilities of the
Remuneration Committee are
summarised in this report and are set
out in full in the Terms of Reference
for the Remuneration Committee
which are available on the Company’s
website: www.originenterprises.com.
Governance Structure
Origin recognises the importance
of having remuneration policies,
practices and reporting that reflect
best corporate governance practices,
having regard to the Company’s size
and the markets on which its shares
are traded. We seek to ensure a
demonstrable link between reward
and long-term value creation, with
Executive remuneration weighted
towards performance-related
elements with targets to incentivise
the delivery of strategy over the
short- and long-term.
Performance for the Year
Ended 31 July 2021
Origin delivered a year of improved
performance in FY21, following the
challenges of COVID-19 and extreme
weather conditions of 2020. Group
Revenue was €1,658.4 million, an
increase of 6.6% on an underlying
basis, with Group operating profit of
€61.0 million, an increase of 42.1% on
an underlying basis. Adjusted diluted
earnings per share was 35.50 cent, in
line with guidance. Return on capital
employed, a key metric for Origin,
was 9.3%.
Pay Outcomes for 2021
Annual bonuses are based on a
combination of financial and non-
financial metrics. Whilst certain
objectives were met this year, key
threshold financial targets were not
reached. No bonus payouts for
Executive Directors for the year
ended 31 July 2021 were therefore
deemed appropriate.
Following the decision by the
Executive Directors in 2020 to
voluntarily waive their entitlement to
all outstanding unvested share
options under the LTIP awards
granted in September 2017, 2018 and
2019, no Executive Director LTIP
awards vested in the year ending 31
July 2021.
New Chief Financial Officer
Following announcement of the
appointment in September 2020, TJ
Kelly joined the Board on 18 January
2021 as Group Chief Financial Officer.
The Committee supported the
Board in agreeing an appropriate
remuneration package for TJ. TJ’s
base salary was set at €340,000 p.a.
with a pension entitlement of 6.6%
of salary. This level of pension
contribution, together with the
reduction of contributions for S Coyle
last year from 15% of salary to 6.6%,
means that the Company’s pension
contributions for both Executive
Directors are now fully aligned with
the pension provision available to the
workforce more generally.
TJ was granted an LTIP award of an
amount equal to 95% of his salary
upon joining. Further details of this
LTIP award are set out in the Annual
Report on Remuneration and in Note
9 to the Group financial statements.
Remuneration Arrangements
Review
As part of its ongoing assessment of
remuneration arrangements against
market good practice, the Committee
undertook a review of the annual
bonus and long-term incentive
models. The outcome of this review
included a recalibration of the bonus
scheme for FY22, whereby the
level of bonus payout for threshold
performance is reduced from 50% to
20% of maximum. This level of payout
is more in line with good and market
practice. The Committee also
considered the bonus measures
and has adjusted the weightings
slightly so that the financial and non-
financial metrics are split 70%/30%
and assessed independently.
Consideration was also given to
ensuring alignment of LTIP threshold
vesting levels with typical market
practice, resulting in an agreed
reduction from 30% to 25% for
threshold performance. The
Committee believes that the
recalibration of the short- and long-
term schemes ensures payout levels
are appropriate for achieving
threshold levels of performance.
83
GOVERNANCE
Other Activities in 2021
In support of its role in overseeing
the matters set out above, the
Committee reviewed remuneration
trends and market practices with its
remuneration consultants.
Duties and
Responsibilities
The principal duties and
responsibilities of the Remuneration
Committee include the following:
It also worked with the Institute of
Directors in Ireland in carrying out an
evaluation of its own effectiveness
and performance this year. The
conclusion from this process was
positive, indicating that the
Committee is considered to be
effective in carrying out its duties.
2020 Remuneration Report and
Looking Ahead
The Remuneration Report was
supported by 64% of voting
shareholders at the 2020 AGM.
While the Committee was pleased
that the resolution was approved by
shareholders, it also acknowledges
the views of shareholders who
opposed the resolution. As
announced at the time of issuing
the AGM voting results, the Board
engaged with major shareholders
and developed a clear understanding
of the concerns raised. The Board
provided an update following the AGM
(see www.originenterprises.com/
investors) and continues to welcome
engagement with shareholders on all
issues relating to remuneration and
governance. Further detail is
set out in the Annual Report on
Remuneration on page 96.
The Committee believes that all
of the actions which it has taken
on remuneration matters in the
last year are in the best interest
of shareholders. Remuneration and
incentive arrangements continue
to take account of good practice
and market standards and support
the Company’s overall strategy,
with ongoing rigorous oversight by
the Committee.
We hope that we will continue to
receive your support at the
forthcoming AGM.
Kate Allum
Chairman of the Remuneration
Committee
28 September 2021
84
› set an appropriate remuneration
policy for Executive Directors and
the Group’s Chairman;
›
recommend and monitor the level
and structure of remuneration
for senior management;
› determine the total individual
remuneration package of each
Executive Director, the Group
Chairman and other designated
senior management including
bonuses, incentive payments,
share options and other awards;
› approve the design of, and
determine targets for, any
performance-related pay
schemes operated by the
Company and approve the total
annual payments made under
such schemes;
› determine the policy for, and
scope of, pension arrangements
for each Executive Director;
›
review the design of all share
incentive plans for approval by the
Board and shareholders;
› ensure that contractual terms
on termination of any Director,
and any payments made, are
fair to the individual and to the
Company, and that failure is not
rewarded;
› oversee any major changes in
employee benefit structures
throughout the Group; and
› ensure the Company maintains
contact as required with its
principal shareholders regarding
remuneration matters.
Length of Tenure
The Remuneration Committee
comprises three independent Non-
Executive Directors: Kate Allum (Non-
Executive Director and Chairman of
the Remuneration Committee), Rose
Hynes (Non-Executive Chairman)
and Christopher Richards (Non-
Executive Director). The quorum for
Committee meetings is two and
only members are entitled to attend.
The Remuneration Committee may
extend an invitation to other persons
to attend meetings to be present for
particular agenda items as required.
The Company Secretary is secretary
to the Remuneration Committee.
The length of tenure of the current
Remuneration Committee members
as at 31 July 2021 is set out below:
Length of tenure
on Remuneration
Committee
Kate Allum
Rose Hynes
Christopher Richards
Years
5.77
5.77
5.75
Meetings and
Committee Governance
The Remuneration Committee met
three times during the financial
year. For full details on individual
Remuneration Committee members’
attendance at meetings, see page 72.
The principal activities carried out
included:
›
review of design of annual bonus
and long-term incentive models;
› annual review of the Terms of
Reference for the Committee;
› consideration of the 2021 bonus
scheme for Executives;
› approval of the awards under the
LTIP Scheme;
› annual review of the Committee
effectiveness; and
› consideration and approval of TJ
Kelly’s remuneration package.
The Committee has access to
independent advice and consults
with shareholders where it considers
it appropriate to do so. During the
year, FIT Remuneration Consultants
advised the Company on the impact
of legislative and corporate
governance changes on remuneration
policy and reporting, in respect of
the 2021 LTIP award to TJ Kelly and
in respect of the amendments to the
design of the bonus scheme and LTIP
threshold vesting levels.
FIT Remuneration Consultants are
members of the Remuneration
Consultants Group and abide by the
Remuneration Consultants Group
Code of Conduct, which requires its
members’ advice to be objective
and impartial. The fees paid to FIT
Origin Enterprises plc Annual Report and Accounts 2021
Remuneration Consultants in respect
of Remuneration Committee matters
over the financial year under review
was £26,371.
The remuneration of the Group
Chairman and the Executive Directors
is determined by the Board on
the advice of the Remuneration
Committee, with the Group Chairman
absenting herself from all discussions
relating to her remuneration. No
change has been made to the Group
Chairman’s remuneration.
Annual Evaluation of Performance
The Board conducts an annual
evaluation of its own performance and
that of its principal Committees and
Committee Chairmen. This evaluation
is externally facilitated every three
years, and having been conducted
internally for the past two years, was
externally facilitated by the Institute of
Directors in Ireland for the year ended
31 July 2021. As noted on page 84, the
conclusion from this process was that
the performance of the Remuneration
Committee and of the Chairman of
the Committee were satisfactory.
Directors’ Remuneration Policy
The Directors’ Remuneration Policy
(the ‘Remuneration Policy’) is set
out below. As an Irish-incorporated
company, Origin is not required
to comply with UK legislation which
requires UK companies to submit
their remuneration policies to a
binding shareholder policy vote.
However, we recognise the importance
of having remuneration policies,
practices and reporting that reflect
best corporate governance practices.
In formulating our Remuneration
Policy, full consideration has been
given to best practice, having regard
to the Company’s size and the markets
on which its shares are traded.
The Company aims to provide a
remuneration structure that is
aligned with shareholders’ interests,
is competitive in the marketplace,
and motivates Executive Directors
to deliver sustainable value for
shareholders. The Group’s policy
is that performance-related
components should form a significant
portion of the Directors’ overall
remuneration package, with maximum
total potential rewards being
earned through the achievement of
challenging performance targets
based on measures that represent the
best interests of shareholders.
Consideration of
Shareholder Views
The Remuneration Committee
considers shareholder feedback
received at each year’s AGM. This
feedback, in addition to any feedback
received during any meetings held
from time to time, is considered
as part of the Remuneration
Committee’s annual review of the
Remuneration Policy. The Committee
is informed of best practice
developments and takes this into
account when setting pay.
In addition, the Remuneration
Committee will seek to engage
directly with major shareholders and
their representative bodies, should
any material changes be proposed to
the prevailing Remuneration Policy.
Details of votes cast for and against
the resolution at last year’s AGM to
approve the Company’s Remuneration
Report are set out in the Annual
Report on Remuneration on page
96 together with an explanation of
shareholder engagement in relation to
the votes.
Summary of the Remuneration Policy
Element of
Remuneration
Salary
To provide competitive
fixed remuneration
and to motivate
Executive Directors
of superior calibre in
order to deliver for the
business.
To attract and
retain skilled
and experienced
Executives.
Benefits
To provide benefits
consistent with the
market.
Approach
Maximum Opportunity
The basic salary for each Executive Director is reviewed
annually by the Remuneration Committee.
Individual salary adjustments take into account:
› each Executive Director’s performance against
agreed challenging objectives;
›
the Group’s financial circumstances; and
› competitive market practice.
There is no prescribed
maximum annual increase. The
Remuneration Committee is
guided by general increases in
the market for the functional
roles held by the respective
Executive Directors along
with general increases for the
broader employee population
of the Group. On occasion, the
Remuneration Committee may
need to recognise, for example,
an increase in the scale, scope
or responsibility of a role.
Salary will be benchmarked
against market rates at least
every three years.
Current benefit provision may include a company car
or car allowance and private health insurance. Other
benefits may be payable, where appropriate. Specifically,
these may include payments related to relocation,
accommodation and travel allowances.
Not applicable.
85
GOVERNANCE Element of
Remuneration
Assignment Allowance
To provide benefits
to reflect additional
responsibilities and
personal disruption.
Bonus
Incentivises annual
achievement of
performance targets.
Approach
Maximum Opportunity
£225,000 p.a. for 3 years
commencing on 1 October 2018.
CEO & CFO: Maximum bonus of
100% of basic salary in cash.
CEO, LATAM: Maximum bonus of
150% of basic salary, deferred in
cash, as follows:
›
100% of basic salary relates
to a mix of both Group
and Latin America financial
measures and corporate /
personal objectives; and
› 50% of basic salary relates
solely to Latin America
financial measures. These
are assessed annually, with
any payment to be made
after the three-year period.
This additional element of fixed pay, as disclosed in
previous reports, is payable for three years from 1
October 2018 to the Chief Executive Officer, Latin
America ('CEO, LATAM'). This assignment allowance does
not apply post 1 October 2021.
It does not form part of the base salary for the purposes
of pension, annual bonus, LTIP or other benefits.
Bonus payments to the Chief Executive Officer and the
Chief Financial Officer are based on the meeting of
predetermined targets against financial measures, in
addition to the attainment of corporate and personal
objectives. These are approved by the Remuneration
Committee annually.
The CEO, LATAM resigned from the Board with effect
from 31 July 2021. For the three years from financial year
2019, bonus payments to the CEO, LATAM were based on
the meeting of predetermined targets against financial
measures of the Group and performance in Latin America
in addition to the attainment of corporate and personal
objectives. Measures and targets were approved by the
Remuneration Committee annually. Any payouts under
the bonus scheme during the three-year period were to
be deferred in their entirety and were subject to the CEO,
LATAM serving the full three-year assignment term.
Bonus payments are not pensionable.
Annual incentive payments are determined by the
Remuneration Committee after the year end based on
actual performance achieved against the targets. The
Remuneration Committee can apply appropriate
discretion in specific circumstances in determining the
incentive payment to be awarded.
For 2022, 70% of the bonus is based on financial metrics
and 30% on corporate and strategic objectives. The
measures, their weighting and the targets are reviewed on
an annual basis. The measures and weightings for the
financial metrics are set out on page 90. On the basis that
the targets are commercially sensitive, they are not
disclosed prospectively. The targets and outcomes for
2021’s bonuses are disclosed on page 93.
A clawback provision is in operation.
86
Origin Enterprises plc Annual Report and Accounts 2021 Maximum Opportunity
Plan limits:
›
100% (normal limit) of basic
salary; and
› 200% (exceptional limit e.g.
recruitment) of basic salary.
Element of
Remuneration
Approach
Long-Term Incentive Plan (2015) ('LTIP')
Designed to align
the interests of
Executives with the
delivery of sustainable
earnings growth
and the interests of
shareholders.
Grant of options at a set €Nil or nominal option
price, conditional on the achievement of challenging
performance targets over a three-year period. A
two-year holding period follows the testing period,
ensuring Executives’ interests are aligned with those of
shareholders over the five-year period.
Clawback provisions apply in any circumstance in
which the Remuneration Committee believes they are
appropriate. The clawback provisions apply throughout
the overall five-year period.
Performance is measured over three years based on the
business’s medium-term priorities which could include
measures relating to adjusted diluted EPS growth, return
on invested capital (‘ROIC’) performance and free cash
flow ratio (‘FCFR’) performance.
The Committee has discretion to use different or
additional performance measures to ensure that LTIP
awards remain appropriately aligned to the business
strategy and objectives. The Committee will consider the
Group’s overall performance before determining the final
vesting level.
All employee share plans
To encourage
employee share
ownership and
therefore increase
alignment with
shareholders’
interests.
2015 UK/Ireland Sharesave Scheme
A HMRC/Irish Revenue approved plan under which
regular monthly savings are made over a three-year
period which can be used to fund the exercise of
an option, the exercise price being discounted by up
to 20%.
2015 UK/Ireland Sharesave Plan
Maximum permitted savings of
£500/€500 per month across
all ongoing Sharesave contracts
for any individual.
Performance conditions are not applicable to any
employee share plans.
Share ownership guidelines
To increase alignment
of Executives’
interests with
shareholders’
interests.
Pension
Executive Directors are required to retain 50% of
the net-of-tax amount vested in LTIP shares until the
guideline is met.
LTIP retention guideline applies
until the Executive Director
holds shares to the value of
100% of salary.
To provide retirement
benefits.
The Group operates defined benefit, defined contribution
and/or salary supplement arrangements.
Life cover of up to four times salary is also provided.
The defined benefit arrangement applies to D Giblin only
and relates to a historic arrangement. D Giblin stepped
down from the Board with effect from 31 July 2021.
For Executive Directors
receiving a defined contribution
pension (or cash amount in
lieu), the maximum pension
contribution is up to 6.6% of
basic salary.
Read our
Corporate
Governance
Statement on
page 69
87
GOVERNANCE
Element of
Remuneration
Approach
Non-Executive Director fees
Reflect time
commitments and
the responsibilities of
each role.
Fees are reviewed on an annual basis and are intended to
be in line with the general market. The remuneration for
each Non-Executive Director is set by a subcommittee of
the Board, comprising Executive Directors only.
Reflect fees paid
by similarly sized
companies.
Maximum Opportunity
As with Executive Directors,
there is no prescribed maximum
annual increase. General
increases in the Non-Executive
Director market and general
increases received by the
broader employee population
are taken into account. On
occasion, an increase in the
scale, scope or responsibility
of a role may need to be
recognised.
Notes:
A description of how the Company intends to implement the Remuneration Policy is set out in the Annual Report on
Remuneration.
Differences between the Group’s policy for the remuneration of Executive Directors (as set out above) and its approach to
the remuneration of employees generally include:
› a lower level of maximum annual bonus opportunity (or zero bonus opportunity) may apply to employees than applies
for the Executive Directors and certain senior management;
› benefits offered to certain employees generally comprise the provision of healthcare and company car benefits where
required for the role or to meet market norms;
› the majority of employees participate in local defined contribution pension arrangements (post-employment benefits
are detailed in Note 27 to the financial statements);
› participation in the LTIP is currently limited to the Executive Directors and selected senior management (other
employees are eligible to participate in the Company’s Sharesave Scheme); and
› participation in a cash-based long-term incentive is limited to certain selected senior management (excluding
Executive Directors).
In general, these differences arise from the development of remuneration arrangements that are market competitive
for the various categories of individuals. They also reflect the fact that, in the case of the Executive Directors and senior
management, a greater emphasis tends to be placed on performance-related pay.
The choice of performance metrics applicable to the annual bonus scheme reflects the Remuneration Committee’s
belief that any incentive compensation should be appropriately stretching and tied to the delivery of earnings, other
financial KPIs and specific corporate and individual objectives.
The performance conditions that apply to awards made under the 2015 LTIP are selected by the Remuneration
Committee on the basis that they reward the delivery of long-term returns to shareholders and the Group’s financial
growth and are consistent with the Group’s objective of sustainable long-term value to shareholders.
The Remuneration Committee operates share plans in accordance with their respective rules and in accordance with
the Rules for Euronext Growth companies, the Rules for AIM companies and the rules of Irish Revenue and HMRC,
where relevant. The Remuneration Committee, consistent with market practice, retains discretion over a number of
areas relating to the operation and administration of the plans.
Details of remuneration received by the Directors, including salary and fees, taxable benefits, assignment allowances,
pension contributions, annual bonuses and long-term incentive awards are set out in the Annual Report on Remuneration.
Service Contracts for Executive Directors
The Remuneration Committee reviews the contractual terms for any new Executive Directors to ensure these reflect
best market practice. This year, this included the remuneration terms for TJ Kelly on appointment as Group CFO.
The current service agreements of the Executive Directors are not fixed term and in each case are terminable by either
the Company giving twelve months’ notice or the Executive Director giving six months’ notice.
The service contracts make provision, at the Board’s discretion, for early termination by way of payment in lieu of
notice. Incidental expenses may also be payable where appropriate. In calculating the amount payable to an Executive
Director on termination of employment, the Board would take into account the commercial interests of the Company.
88
Origin Enterprises plc Annual Report and Accounts 2021
Provision
Notice period
Payments in lieu of notice
Incentive schemes
Detailed terms
6 months’ notice from the CEO/CFO and 12 months’ notice from the
Company.
For any unexpired period of notice on termination, up to 12 months’ salary
(and other remuneration) in respect of the CEO/CFO.
In certain good leaver situations, annual bonus may be payable with respect
to performance in the financial year of cessation (pro-rated for time, unless
the Committee determines otherwise).
In the case of the LTIP, the default treatment is that any unvested awards
lapse on cessation of employment.
In certain good leaver situations, participants’ awards would normally vest at
their original vesting date and be subject to performance testing and a pro-
rata reduction.
Non-Executive Directors
Each of the Non-Executive Directors are appointed under a letter of appointment, detailing arrangements that may
generally be terminated at will, by either party, without compensation. Their appointment is reviewed on a three-year
basis. Directors retire annually and offer themselves for re-election at the AGM.
Remuneration Outcomes in Different Performance Scenarios
Remuneration consists of fixed pay salary, pension and benefits, short-term variable pay and long-term variable pay. A
significant portion of Executive Directors’ remuneration is linked to the delivery of key business goals over the short-
and long-term and the creation of shareholder value.
The charts below illustrate the potential future value and composition of the Executive Directors’ remuneration packages
for 2022 in different performance scenarios, both as a percentage of total remuneration opportunity and as total value.
S Coyle
2,000,000
€1,858,953
€1,603,953
32%
32%
€966,453
13%
€583,953
26%
100%
61%
36%
14%
27%
27%
32%
1,500,000
1,000,000
500,000
0
Minimum Target Maximum Maximum & Share
Price Growth
Fixed
Annual
Long-term
Share Price Appreciation
TJ Kelly
1,600,000
1,200,000
800,000
400,000
€390,641
€641,391
13%
26%
100%
61%
0
€1,053,641
€1,215,141
13%
31%
32%
37%
27%
28%
32%
Minimum Target Maximum Maximum & Share
Price Growth
Fixed
Annual
Long-term
Share Price Appreciation
Notes:
‘Minimum’ includes the value of fixed pay.
‘Target’ includes fixed pay and ‘target’ annual bonus (50% of the maximum) and assumes threshold vesting of the maximum LTIP (25% of the maximum).
‘Maximum’ includes fixed pay and maximum annual bonus (100% of salary) and full vesting of LTIP awards (100% of salary for CEO and 95% of salary for CFO).
‘Maximum & Share Price Growth’ includes 'maximum' remuneration, with an assumed Company share price appreciation of 50%.
89
GOVERNANCE
Annual Report on Remuneration
Implementation of the Remuneration Policy for the year ending 31 July 2022
A summary of how the Remuneration Policy will be applied for the financial year ending 31 July 2022 is set out below.
Basic Salary for Executive Directors
The Remuneration Committee has maintained salary for Executive Directors at 2021 levels for the 2022 financial year
with no increases to be awarded (see table below). The general workforce will, in the main, receive inflationary pay
increases for the 2022 financial year.
Executive Director (€’000)
S Coyle
TJ Kelly
2022
510
340
2021
510
340
% increase
Nil
Nil
Annual Bonus
The maximum bonus achievable in 2022 for S Coyle and TJ Kelly will remain at 100% of basic salary. The performance
measures have been chosen to provide alignment with the Group’s strategy. The targets are appropriately stretching
and tied to the delivery of earnings targets, other financial KPIs and specific corporate and individual objectives.
The measures, their weighting and the targets are reviewed on an annual basis. On the basis that the 2022 targets are
commercially sensitive, they are not disclosed prospectively, consistent with prior years.
The key metrics underlying the 2022 bonus plan for S Coyle and TJ Kelly are as follows:
30%30%
20%
Underlying PBT
Operating cash flow
Strategic objectives
50%
20%
“ The Company aims to provide
a remuneration structure that is
aligned with shareholders' interests, is
competitive in the marketplace, and
motivates Executive Directors to deliver
sustainable value for shareholders.”
80%
90
Origin Enterprises plc Annual Report and Accounts 2021
Pension Arrangements
S Coyle and TJ Kelly participate in the defined contribution section of the Group’s Irish pension scheme. Since S Coyle’s
appointment as Chief Executive Officer and TJ Kelly’s appointment as Chief Financial Officer, the Company contributes
6.6% of salary to their respective pensions, which is in line with the general workforce rate.
D Giblin participates in the Group’s UK defined benefit pension scheme, which relates to a historic arrangement. D Giblin
stepped down from the Board with effect from 31 July 2021.
Members of the Irish and UK pension schemes are entitled to life assurance cover of up to four times salary and a
retirement pension subject to the scheme rules. If a member dies whilst in pensionable service, the value of the
member’s retirement account will be used by the trustees to provide a lump sum and/or a pension payable to
dependents.
Long-Term Incentives Share-Based
2015 LTIP
It is the Remuneration Committee’s intention to make a grant of LTIP awards during the financial year 2022, but before
doing so it will, as is normal, consider the performance metrics and the related targets for awards. Details of any LTIP
awards made in the financial year 2022, including performance measurements and targets, will be disclosed in the
Remuneration Report for the financial year 2022. These will remain stretching relative to the internal forecast and
outlook for the Company.
In addition to the three-year performance period under the LTIP, all awards are subject to an additional two-year
holding period ensuring that the LTIP has a five-year time horizon in line with best practice.
Non-Executive Director Fees
Fees for the Non-Executive Directors for the 2021 and 2022 financial years are detailed below.
Chairman
Base fee
Additional fees:
Audit and Risk Committee Chair
Remuneration Committee Chair
Senior Independent Director*
Committee Membership
ESG/Sustainability Sponsor**
2022
€
130,000
62,000
13,000
8,000
5,000
3,000
3,000
2021
€
130,000
62,000
13,000
8,000
8,000
3,000
3,000
% Increase
Nil
Nil
Nil
Nil
Nil
Nil
Nil
* The Senior Independent Director role rotated on 1 January 2021 from H McCutcheon to G Britton. The supplementary fee associated with the Senior
Independent Director Role was adjusted to account for existing responsibilities of G Britton as Chair of the Audit and Risk Committee.
** This supplementary fee will be discontinued at a point during the 2022 financial year, having regard to the ESG Committee being established and
operational.
91
GOVERNANCE
Remuneration Outcomes for the Year Ended 31 July 2021
Directors’ remuneration (audited) for the year ended 31 July 2021 was as follows:
Salary and
fees1
€’000
Taxable
benefits2
€’000
Assignment
allowance3
€’000
Pension4
€’000
Annual
bonus5
€’000
Long-term
incentives6
€’000
Total
€’000
S Coyle
2021
2020
TJ Kelly*
2021
2020
R Hynes
2021
2020
G Britton
2021
2020
K Allum
2021
2020
H Kirkpatrick**
2021
2020
H McCutcheon
2021
2020
C Richards
2021
2020
Former Directors
D Giblin***
2021
2020
510
351
183
–
130
121
78
70
73
65
54
-
67
65
65
58
40
35
15
–
1
5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
34
53
12
–
–
–
–
–
–
–
–
–
–
–
–
–
425
380
45
73
–
187
39
26
-
–
-
–
–
–
–
–
–
–
–
–
–
–
–
–
-
–
-
–
-
–
–
–
–
–
–
–
–
–
–
–
–
–
-
–
584
439
210
–
131
126
78
70
73
65
54
-
67
65
65
58
509
666
*
TJ Kelly was appointed to the Origin Board on 18 January 2021. The amounts included in the table above represent emoluments for the period 18
January 2021 to 31 July 2021.
** H Kirkpatrick was appointed to the Origin Board on 1 October 2020. The amounts included in the table above represent emoluments for the period 1
October 2020 to 31 July 2021.
*** D Giblin resigned from the Board with effect from 31 July 2021. No assignment allowance was payable for the year ended 31 July 2021, reflecting
remote working during the period.
92
Origin Enterprises plc Annual Report and Accounts 2021
Notes:
1. Salary and Fees (audited)
In 2021, D Giblin's sterling salary was £375,000, converted at an average exchange rate of 0.88236 (average GBP FX rate
for the year).
2. Taxable Benefits (audited)
Benefits include a company car or company car allowance (S Coyle, TJ Kelly and D Giblin) and private medical insurance
(including immediate family members) (S Coyle, TJ Kelly and D Giblin). Benefits also include mileage claimed by Non-
Executive Directors for travel to Board meetings, grossed up for Irish tax purposes.
3. Assignment Allowance (audited)
No assignment allowance was paid to D Giblin in 2021, reflecting remote working during the period. The assignment
allowance arrangement relates to the three-year period from 1 October 2018, concluding on 30 September 2021.
4. Pensions (audited)
The Company contributes 6.6% of salary to S Coyle’s pension. TJ Kelly’s pension contribution was also set at 6.6% at his
date of appointment, 18 January 2021.
Figures for D Giblin represent the defined benefit provision for the year in respect of his membership of a UK scheme,
as calculated in line with applicable legislation.
Retirement benefits are accruing to the following number of Directors under:
Defined contribution scheme
Defined benefit scheme
Number of Directors
2021
2020
2
1
2
1
5. Annual Bonus
The financial measures applying to the CEO and CFO’s 2021 bonus were EPS (50% of salary) and Operating Cash
Flow (‘OCF’) (30% of salary). For the CEO, LATAM, 60% of 2021 bonus was based on EPS (37.5% of salary) and OCF
(22.5% of salary) and 20% was based on Latin America financial measures. For all Executive Directors, 20% of the
bonus is based on personal and corporate objective measures over the course of the 2021 financial year.
Financial measures
Executive
Director
Financial
Measures
Weighting
(% of
salary)
EPS
required
for
threshold
bonus
EPS
required
for
maximum
bonus
Actual
diluted
adjusted
EPS
Outcome
(% of
salary)
OCF
required
for
threshold
bonus
€’000
OCF
required
for
maximum
bonus
€’000
Actual
OCF
€’000
Outcome
(% of
salary)
Sean Coyle*
TJ Kelly*
Declan Giblin**
80%
80%
60%
37.73c
37.73c
37.73c
41.92c
35.50c
41.92c
35.50c
41.92c
35.50c
Nil
Nil
Nil
79,291
79,291
79,291
88,101
60,528
88,101
60,528
88,101
60,528
Nil
Nil
Nil
* 29% of salary is payable for achieving threshold EPS and 13% of salary is payable for achieving threshold Operating Cash Flow.
** 22% of salary is payable for achieving threshold EPS and 10% of salary is payable for achieving threshold Operating Cash Flow.
The CEO, LATAM, earned a bonus of Nil% out of a possible 20% of salary based on the Latin America EBIT and Latin
America OCF financial measures.
In addition, and as disclosed since the 2018 Annual Report, the CEO, LATAM had an opportunity to earn an additional
50% of salary per annum based on Latin America related financial objectives for three years from financial year 2019.
The financial measures for this bonus opportunity were EBIT growth CAGR, average annual free cash flow generation
and average ROCE. Following a full evaluation after the end of the three-year period, final assessment shows that
the targets for these measures have not been achieved. As a result, no bonus is payable in respect of the three-year
performance period under this element of D Giblin’s bonus.
Corporate and personal objectives
For 2021, non-financial objectives included further advancing the Company’s sustainability agenda and embedding
sustainability as an underlying foundation of the Group’s strategy, development and reporting of non-financial KPIs
across the Group and implementation of employee engagement initiatives. Notwithstanding that a proportion of
the non-financial objectives were met by Executive Directors, the Remuneration Committee did not award bonuses,
reflecting the performance of the business with key threshold financial targets not being reached.
93
GOVERNANCE 6. Long-Term Incentives
LTIP awards vesting based on performance to 31 July 2021.
All unvested share options held by Executive Directors under the September 2017, October 2018 and September 2019
LTIP awards were voluntarily waived in 2020. No Executive Director LTIP awards, therefore, were eligible to vest for
the period ended 31 July 2021.
LTIP awards granted during the year ended 31 July 2021.
S Coyle and D Giblin were granted LTIP awards in September 2020. These awards are based on performance over the
three-year period ending 31 July 2023. The number of shares awarded was calculated using the closing share price on
23 September 2020 of €3.09.
TJ Kelly was granted an LTIP award on joining the Company in January 2021, based on performance over the three-year
period ending 31 July 2023. The number of shares awarded was calculated using the closing share price on 15 January
2021 of €3.24.
A summary of the performance conditions for these awards is set out below.
Metric
Adjusted Diluted
Earnings per Share
(‘EPS’)
Free Cash Flow Ratio*
50%
* The definition of Free Cash Flow Ratio is set out on page 31.
An overall summary of the awards is set out below.
Weighting
Vesting at Threshold Condition
50%
30% Adjusted Diluted EPS at the end of the
three-year period of 46c (threshold) on a
pro-rata basis to 50c (maximum stretch) for
full payout.
30% An average annual free cash flow ratio of at
least 50% (threshold) on a pro-rata basis to
100% (maximum stretch) for full payout.
Executive Director
Face value of
award at grant
Number of
shares awarded
End of performance
period
Date from which
exercisable subject
to holding period*
S Coyle
TJ Kelly
D Giblin
100% of salary
95% of salary
95% of salary
165,048
99,691
125,207
31 July 2023
24 September 2023
31 July 2023
18 January 2024
31 July 2023
24 September 2023
* Subject to satisfaction of performance conditions.
CEO Single Figure History
The table below illustrates total remuneration for the CEO position over the period 1 August 2017 to 31 July 2021. This
reflects the actual outcomes under the annual bonus and LTIP schemes compared to their respective maximum
opportunities.
2021
2020 *
2020 **
2019
2018
2017
S Coyle
S Coyle
T O'Mahony
T O'Mahony
T O'Mahony
T O'Mahony
Total Remuneration
€'000
Annual bonus as % of
maximum bonus
LTIP award against
maximum opportunity
584
49
526
1,296
1,136
1,031
0%
0%
0%
78%
87%
66%
-
-
-
52.5%
0%
0%
* S Coyle was appointed CEO effective 1 July 2020. The remuneration above represents the amounts received for the period 1 July 2020 to
31 July 2020.
** T O'Mahony resigned as CEO on 30 June 2020. The remuneration above represents the amounts received for the period 1 August 2019 to
30 June 2020.
94
Origin Enterprises plc Annual Report and Accounts 2021
Outstanding Share Awards
The table below sets out details of outstanding share awards held by Executive Directors.
Plan
Grant Date
Exercise/
Option
Price (€)
Number of
share awards
1 August 2020
Granted
during
the year
Vested/
exercised
during the
year
Lapsed
during the
year
Cancelled/
waived
during the
year
Number of
share awards
at 31 July
2021
End of
performance
period
Date from
which
exercisable
Expiry date
S Coyle
2015 LTIP
08/07/2020
2015 LTIP
24/09/2020
0.01
0.01
Total
TJ Kelly
2015 LTIP
18/01/2021
0.01
Total
D Giblin**
2015 LTIP
24/09/2020
0.01
Total***
222,246
-
-
165,048
222,246
165,048
-
-
-
-
99,691
99,691
125,207
125,207
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
222,246 31/07/2023 08/07/2025* 08/07/2027
165,048 31/07/2023 24/09/2025
24/09/2027
387,294
99,691 31/07/2023
18/01/2026
18/01/2028
99,691
125,207 31/07/2023 24/09/2025
24/09/2027
125,207
* Subject to satisfaction of performance conditions.
** D Giblin resigned as an Executive Director with effect from 31 July 2021.
*** In FY20, 31,751 share options vested for D Giblin but have not yet been exercised.
LTIP awards are subject to the performance conditions outlined in the Long-Term Incentives section of the Annual
Report on Remuneration, set out on page 94.
Non-Executive Directors do not participate in any Group share incentive or award scheme.
Statement of Directors’ and Company Secretary’s Shareholdings and Share Interests (audited)
Beneficially owned at
1 August 2020
Beneficially owned at
31 July 2021
Unvested LTIP
awards at 31 July
2021
Outstanding share
awards under all
employee share plans
S Coyle
TJ Kelly
R Hynes
G Britton
K Allum
H Kirkpatrick
H McCutcheon
C Richards
B Keane
75,000
–
3,875
5,000
-
-
45,000
7,680
–
75,000
-
3,875
5,000
-
5,000
45,000
7,680
–
387,294
99,691
–
-
–
–
–
–
8,910
–
–
–
–
–
–
–
81,671
7,485
S Coyle, having joined the Company in September 2018 and having forfeited 131,080 share options in 2020, holds
51% of his salary. The value of the shareholding held by S Coyle is based on his shares held at the share price of €3.44
on 31 July 2021. At the date of this report, TJ Kelly does not have a shareholding in the Company, having joined in
January 2021.
Details of share ownership guidelines are set out on page 87 of this report.
95
GOVERNANCE
Statement of Voting at the AGM
At the Company’s 2020 AGM, the following votes were received from shareholders:
Votes cast in favour*
Votes cast against
Total votes cast
Abstentions
* Does not include Chairman’s discretionary votes.
Remuneration Report
61,269,302
34,130,897
95,400,199
1,500
%
64.22
35.78
100.00
The Remuneration Committee acknowledges the 35.78% vote against the Remuneration Report at the 2020 AGM. The
Committee’s policy is to pay fairly for the role being undertaken and the calibre of the individual. The base salary
for the new CEO at the time was set to reflect the scale of responsibility of the role and the one-off LTIP award granted
on appointment in July 2020 was to incentivise driving a sustained recovery for the business. The Remuneration
Committee believes the terms of the appointment were in the best interests of the Company’s shareholders and wider
set of stakeholders. The payment made to the departing CEO in June 2020 was in accordance with his contractual
entitlements.
The Remuneration Committee values the feedback received and welcomes continuing engagement with shareholders
on issues of remuneration to further develop a mutual understanding of the best way to deliver the Group’s strategy in
the interests of the business and our investors.
96
Origin Enterprises plc Annual Report and Accounts 2021
97
STRATEGIC REPORT Read our Business
Reviews on
pages 32 to 49
Throws Farm in Essex
in the UK is home to
the Group’s industry-
leading Technology
Centre and newly
launched Turf Science
& Technology Centre.
57,000
Crop Field Trials
98
Origin Enterprises plc Annual Report and Accounts 2021
Financial
Statements
Directors and Other Information
Statement of Directors’ Responsibilities
Independent Auditors’ Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Group Accounting Policies
Notes to the Group Financial Statements
Company Accounting Policies
Company Balance Sheet
Company Statement of Changes in Equity
Notes to the CompanyFinancial Statements
100
101
102
109
110
111
113
114
115
123
180
183
184
185
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
99
Directors and Other Information
Board of Directors
R Hynes
S Coyle
TJ Kelly
K Allum
G Britton
H Kirkpatrick
H McCutcheon
C Richards
(Non-Executive Chairman)
(Chief Executive Officer)
(Executive Director)
(Non-Executive Director)
(Non-Executive Director)
(Non-Executive Director)
(Non-Executive Director)
(Non-Executive Director)
Secretary and Registered Office
B Keane
4-6 Riverwalk
Citywest Business Campus
Dublin 24
Ireland
Syndicate Bankers
Allied Irish Banks plc
Bank of Ireland plc
Barclays Bank Ireland plc
HSBC Continental Europe
ING Bank NV
Rabobank Dublin
Auditors
PricewaterhouseCoopers
Chartered Accountants and Statutory Audit Firm
One Spencer Dock
North Wall Quay
Dublin 1
Ireland
Registrars
Link Asset Services
Shareholder Solutions (Ireland)
2 Grand Canal Square
Dublin 2
Ireland
Euronext Growth (Dublin) Advisor and Stockbroker
Goodbody
Ballsbridge Park
Ballsbridge
Dublin 4
Ireland
Nominated Advisor
Davy
Davy House
49 Dawson Street
Dublin 2
Ireland
Stockbroker
Numis Securities Limited
The London Stock Exchange Building
10 Paternoster Square
London
EC4M 7LT
United Kingdom
Media Relations
FTI Consulting
The Academy Building
Pearse Street
Dublin 2
Ireland
100
Origin Enterprises plc Annual Report and Accounts 2021 Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the Group and Company financial statements, in accordance
with Irish law.
Irish law requires the Directors to prepare Group and Company financial statements for each financial year, giving a true and
fair view of the assets, liabilities and financial position of the Group and the Company and the profit or loss of the Group for
the period. Under that law and in accordance with the Rules of the AIM and ESM exchanges issued by the London and Euronext
Growth Stock Exchanges, the Directors have prepared the Group financial statements in accordance with International
Financial Reporting Standards (‘IFRSs’) as adopted by the EU (‘EU IFRS’) with those parts of the Companies Act 2014 applicable
to companies reporting under EU IFRS. The Directors have prepared the Company financial statements in accordance with
Irish Generally Accepted Accounting Practice (accounting standards issued by the UK Financial Reporting Council, including
Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and Irish law).
Under Irish law the Directors shall not approve the Group and Company financial statements unless they are satisfied that they
give a true and fair view of the Group’s and Company’s assets, liabilities and financial position as at the end of the financial year
and of the profit or loss of the Group for the financial year.
In preparing the Group and Company financial statements, the Directors are required to:
— select suitable accounting policies and then apply them consistently;
— make judgements and estimates that are reasonable and prudent;
— state whether the financial statements have been prepared in accordance with applicable accounting standards and identify
the standards in question and ensure that they contain the additional information required by the Companies Act 2014; and
— prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to:
— correctly record and explain the transactions of the Group and Company;
— enable, at any time, the assets, liabilities and financial position of the Group and Company and profit or loss of the Group to
be determined with reasonable accuracy; and
— enable the Directors to ensure that the financial statements comply with the Companies Act 2014 and enable those financial
statements to be audited.
The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
Under applicable law and the requirements of the AIM and ESM Rules, the Directors are also responsible for preparing a
Directors’ report that complies with that law and those rules.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Group’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
On behalf of the Board
Rose Hynes
Director
28 September 2021
Sean Coyle
Director
28 September 2021
101
FINANCIAL STATEMENTS
Independent auditors’ report
to the members of Origin Enterprises Plc
Report on the audit of the financial statements Opinion
In our opinion:
— Origin Enterprises plc’s Group financial statements and Company financial statements (the “financial statements”) give a
true and fair view of the Group’s and the Company’s assets, liabilities and financial position as at 31 July 2021 and of the
Group’s profit and cash flows for the year then ended;
— the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards
(“IFRSs”) as adopted by the European Union;
— the Company financial statements have been properly prepared in accordance with Generally Accepted Accounting Practice
in Ireland (accounting standards issued by the Financial Reporting Council of the UK, including Financial Reporting Standard
102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and Irish law); and
— the financial statements have been properly prepared in accordance with the requirements of the Companies Act 2014.
We have audited the financial statements, included within the Annual Report and Accounts (the “Annual Report”), which comprise:
— the Consolidated Statement of Financial Position as at 31 July 2021;
— the Company Balance Sheet as at 31 July 2021;
— the Consolidated Income Statement and Consolidated Statement of Comprehensive Income for the year then ended;
— the Consolidated Statement of Cash Flows for the year then ended;
— the Consolidated Statement of Changes in Equity for the year then ended;
— the Company Statement of Changes in Equity for the year then ended;
— the Group Accounting Policies and Company Accounting Policies; and
— the Notes to the Group Financial Statements and the Notes to the Company Financial Statements.
Certain required disclosures have been presented elsewhere in the Annual Report, rather than in the notes to the financial
statements. These are cross-referenced from the financial statements and are identified as audited.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (“ISAs (Ireland)”) and applicable law.
Our responsibilities under ISAs (Ireland) are further described in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in Ireland, which includes IAASA’s Ethical Standard as applicable to listed entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
102
Origin Enterprises plc Annual Report and Accounts 2021 Independent auditors’ report
to the members of Origin Enterprises Plc (continued)
Our audit approach
Overview
Materiality
— €2.3 million (2020: €2.7 million) - Group financial statements.
— Based on c. 5% of profit before tax and exceptional items (2020: c. 5% of the 3
Materiality
year average profit before tax and exceptional items).
— €2.2 million (2020: €2 million) - Company financial statements.
— Based on c. 0.75% of net assets (2020: c. 0.75% of net assets).
Audit
scope
Key audit
matters
Audit scope
— We conducted work on 11 reporting components. We paid particular attention
to these components due to their size or risk characteristics and to ensure
appropriate audit coverage. An audit of the full financial information of these
11 components was performed.
— Taken together, the reporting components where an audit of the full financial
information was performed accounts for in excess of 90% of Group revenues,
Group profit before tax and exceptional items and Group total assets.
Key audit matters
— Goodwill.
— Settlement price adjustments.
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all
of our audits we also addressed the risk of management override of internal controls, including evaluating whether there was
evidence of bias by the directors that represented a risk of material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the
allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we
make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete
list of all risks identified by our audit.
103
FINANCIAL STATEMENTS
Independent auditors’ report
to the members of Origin Enterprises Plc (continued)
Key audit matter
Goodwill
See accounting policy in relation to impairment, Note
15 – Goodwill and intangible assets and Note 34 –
Accounting estimates and judgements.
The Group has goodwill of €171.02m at 31 July 2021
representing approximately 13% of the Group’s total
assets at year end. Identified cash generating units
(CGUs) containing goodwill are subject to impairment
testing on an annual basis or more frequently if there
are indicators of impairment.
The value in use calculations used in the impairment
testing have been prepared using the board approved
budget for each CGU. The impairment models are
based on a cash flow forecast for Year 1 extracted
from the 2022 budgets approved by the board.
Growth rates are then applied to the Year 1 forecasted
cash flows to forecast Years 2 & 3. The terminal value
growth rates used for periods beyond Year 3 are
based on the long-term growth for the country of
operation of each CGU.
As set out in Note 15 to the financial statements the
key assumptions used in the value in use calculations
are sales growth and margin in Year 1 budgets, Year 2
and Year 3 growth rates, terminal value growth rates
and discount rates.
We determined the assessment of the carrying value
of goodwill to be a key audit matter given the scale of
the assets and because the determination of whether
an impairment charge for goodwill was necessary
involves significant judgement in estimating the future
performance of the CGUs.
How our audit addressed the key audit matter
We obtained the Group’s impairment models and evaluated the
methodology used. We tested the mathematical accuracy of the
underlying calculations in the models.
We evaluated management’s expected future cash flows for
Year 1 and the process by which they were developed, including
comparing them to the latest board approved budgets. We
assessed the underlying key assumptions in the Year 1 budget.
We evaluated the growth rates applied for Years 2 & 3 and
considered the Group’s past record of achieving its forecasts
over time, taking into account the impact of factors such as
weather, crop conditions and competitor activity.
We assessed the Group’s long term forecast growth
rate assumptions used to calculate terminal values by
comparing them to independent sources, including publicly
available information.
We used PwC specialists in assessing management’s calculation
of discount rates. Our specialists developed a range of discount
rates for each CGU that in their view of various economic
indicators would be appropriate in estimating the value in use of
the CGUs.
We performed sensitivity analysis on the impact of changes in
key assumptions on the impairment assessments for CGUs.
Based on our procedures we determined that management’s
conclusion that there was no goodwill impairment
was reasonable.
We assessed the appropriateness of the related disclosures
within the financial statements and consider the disclosures
included in Note 15 to be reasonable.
104
Origin Enterprises plc Annual Report and Accounts 2021 Independent auditors’ report
to the members of Origin Enterprises Plc (continued)
Key audit matter
How our audit addressed the key audit matter
Settlement price adjustments
See accounting policy in relation to revenue, Note 19 -
Trade and other receivables and Note 34 – Accounting
estimates and judgements.
We considered the process undertaken by management in
determining the settlement price adjustment. We also compared
the method to that applied in the prior period and found it to be
consistently applied.
The estimation of final settlement prices for some
customers of the Group is subject to considerable
management judgement due to commodity prices,
competitor pricing pressures, prevailing market
conditions and the timing of the Group’s financial year
end as it is non-coterminous with the year end of its
main customers.
The key inputs to the calculation of the settlement
price adjustments include invoice prices, estimated
settlement prices and invoice quantities.
We determined this to be a key audit matter given the
level of judgement involved and the historical level of
fluctuation in final settlement prices.
We also performed a look back test designed to assess the
accuracy of the prior year estimate by comparing a sample of
prior year settlement price adjustments estimates to credit
notes issued to the customer. We considered the results of
this assessment and the current year factors impacting the
settlement price adjustments estimates at year end.
We agreed a sample of data inputs used in the calculation to
underlying documentation.
We obtained an understanding of the significant judgements
exercised in estimating the final settlement price and we
evaluated those judgements in the context of known market
developments, including trends in commodity prices. Based on
our procedures, we concluded the estimate of price settlement
adjustments required at year end were reasonable.
We reviewed the related disclosures within the financial
statements and concluded that they were appropriate.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the
industry in which the Group operates.
The Group is structured along three operating segments: Ireland and the United Kingdom, Continental Europe and
Latin America.
In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed at
the components by us, as the Group engagement team, or component auditors within PwC Ireland, from other PwC network
firms and from one non-PwC firm operating under our instruction. Where the work was performed by component auditors,
we determined the level of involvement we needed to have in the audit work at those components to be able to conclude
whether sufficient appropriate audit evidence had been obtained as a basis for our opinion on the Group financial statements
as a whole.
As part of our Group audit scoping we identified 11 components, which in our view, required an audit of their full financial
information due to their size or risk characteristics. These operations accounted for in excess of 90% of Group turnover,
Group profit before tax and exceptional items and Group total assets. Taken collectively these components represent the
principal business units of the Group.
The Group audit team organised planning conference calls with the component audit teams to discuss business developments,
audit risks and approach. In addition to these calls at the planning stage, post audit conference calls were held to discuss
component auditors’ key audit findings. We received a detailed memorandum of examination on work performed and relevant
findings from each of the component audit teams in addition to the audit reports which supplemented our understanding
of the individual components. In addition to this, the Group engagement team reviewed certain audit working papers of
significant components.
This, together with additional procedures over central functions, IT systems, treasury and areas of judgement including the key
audit matters noted above, taxation, business combinations and post-retirement benefits performed at the Group level, gave
us the evidence we needed for our opinion on the Group financial statements as a whole.
105
FINANCIAL STATEMENTS
Independent auditors’ report
to the members of Origin Enterprises Plc (continued)
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
€2.3 million (2020: €2.7 million).
€2.2 million (2020: €2 million).
Group financial statements
Company financial statements
How we determined it
c. 5% of profit before tax and exceptional
items (2020: c. 5% of the 3 year average profit
before tax and exceptional items).
c. 0.75% of net assets (2020: c. 0.75% of net
assets).
Rationale for
benchmark applied
We have applied this benchmark because
in our view this is a metric against which
the recurring performance of the Group is
commonly measured by its stakeholders.
We applied this benchmark as the Company is
primarily an investment holding Company.
We agreed with the Audit & Risk Committee that we would report to them misstatements, other than balance sheet-only
misstatements, identified during our audit above €0.115 million (Group audit) (2020: €0.135 million) and €0.1 million (Company
audit) (2020: €0.1 million) as well as misstatements below that amount that, in our view, warranted reporting for qualitative
reasons. We agreed with the Audit & Risk Committee that we would report to them balance sheet-only misstatements
identified during our audit above €1 million (Group audit) (2020: €1 million).
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group and Company’s ability to continue to adopt the going concern basis
of accounting included:
— Evaluating management’s budgets and forecasts for the going concern assessment period (being the period of twelve
months from the date on which the financial statements are authorised for issue) and challenging the key assumptions. In
evaluating these forecasts we considered the Group’s historic performance, its past record of achieving strategic objectives
and management’s assessment of the likely impact which Covid-19 may have on its operations, its financial performance
and liquidity for the going concern assessment period;
— Testing the mathematical integrity of the budgets and forecasts and the models and reconciling these to Board
approved budgets;
— Considering whether the assumptions underlying the budget and forecasts were consistent with related assumptions used
in testing for non-financial asset impairment;
— Performing sensitivity analysis to assess appropriate downside scenarios; and
— Considering the Group’s available financing and maturity profile of group debt and facilities to assess liquidity through the
going concern assessment period.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s or the Company’s ability to continue as a going concern
for a period of at least twelve months from the date on which the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s or
the Company’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
106
Origin Enterprises plc Annual Report and Accounts 2021 Independent auditors’ report
to the members of Origin Enterprises Plc (continued)
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report
based on these responsibilities.
With respect to the Directors’ Report, we also considered whether the disclosures required by the Companies Act 2014
(excluding the information included in the “Non Financial Statement” as defined by that Act on which we are not required to
report) have been included.
Based on the responsibilities described above and our work undertaken in the course of the audit, ISAs (Ireland) and the
Companies Act 2014 require us to also report certain opinions and matters as described below:
— In our opinion, based on the work undertaken in the course of the audit, the information given in the Directors’ Report
(excluding the information included in the “Non Financial Statement” on which we are not required to report) for the year
ended 31 July 2021 is consistent with the financial statements and has been prepared in accordance with the applicable
legal requirements.
— Based on our knowledge and understanding of the Group and Company and their environment obtained in the course of the
audit, we have not identified any material misstatements in the Directors’ Report (excluding the information included in the
“Non Financial Statement” on which we are not required to report).
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities set out on page 101, the directors are responsible for the
preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a
true and fair view.
The directors are also responsible for such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no
realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ 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 ISAs (Ireland) will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and 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
these financial statements.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete
populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.
107
FINANCIAL STATEMENTS Independent auditors’ report
to the members of Origin Enterprises Plc (continued)
A further description of our responsibilities for the audit of the financial statements is located on the IAASA website at:
https://www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-a98202dc9c3a/Description_of_auditors_responsibilities_for_
audit.pdf
This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance
with section 391 of the Companies Act 2014 and for no other purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2014 opinions on other matters
— We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
— In our opinion the accounting records of the Company were sufficient to permit the Company financial statements to be
readily and properly audited.
— The Company Balance Sheet is in agreement with the accounting records.
Other exception reporting
Directors’ remuneration and transactions
Under the Companies Act 2014 we are required to report to you if, in our opinion, the disclosures of directors’ remuneration
and transactions specified by sections 305 to 312 of that Act have not been made. We have no exceptions to report arising
from this responsibility.
Prior financial year Non Financial Statement
We are required to report if the Company has not provided the information required by Regulation 5(2) to 5(7) of the European
Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and Groups) Regulations 2017 in
respect of the prior financial year. We have nothing to report arising from this responsibility.
Paul O’Connor
for and on behalf of PricewaterhouseCoopers
Chartered Accountants and Statutory Audit Firm
Dublin
28 September 2021
108
Origin Enterprises plc Annual Report and Accounts 2021
Consolidated Income Statement
For the financial year ended 31 July 2021
Notes
Pre-
exceptional
2021
€’000
Exceptional
2021
Total
2021
€’000
€’000
Pre-
exceptional
2020
€’000
Exceptional
2020
Total
2020
€’000
€’000
Revenue
Cost of sales
Gross profit
1
1,658,367
(1,412,936)
245,431
-
-
-
1,658,367
1,589,142
(1,412,936)
(1,359,547)
245,431
229,595
-
-
-
1,589,142
(1,359,547)
229,595
Operating (costs) / income
2, 3
(193,001)
1,506
(191,495)
(194,877)
(6,505)
(201,382)
Share of profit of associates
and joint venture
3, 7
2,841
(403)
2,438
6,154
-
6,154
Operating profit
Finance income
Finance expense
5
4
4
55,271
1,103
56,374
40,872
(6,505)
34,367
795
(9,347)
-
-
795
954
(9,347)
(12,204)
-
-
954
(12,204)
Profit before income tax
46,719
1,103
47,822
29,622
(6,505)
23,117
Income tax (expense)/credit
3,10
(9,712)
122
(9,590)
(4,519)
1,261
(3,258)
Profit for the year
37,007
1,225
38,232
25,103
(5,244)
19,859
Basic earnings per share
Diluted earnings per share
11
11
2021
30.44
29.74
2020
15.81c
15.53c
109
FINANCIAL STATEMENTS Consolidated Statement of Comprehensive Income
For the financial year ended 31 July 2021
Profit for the year
Other comprehensive income/ (expense)
Items that are not reclassified subsequently to the Group income statement:
Group/Associate defined benefit pension obligations
— remeasurements on Group’s defined benefit pension schemes
— deferred tax effect of remeasurements
— share of remeasurements on associate’s defined benefit pension schemes
— share of deferred tax effect of remeasurements - associates
Items that may be reclassified subsequently to the Group income statement:
Group foreign exchange translation details
2021
€’000
2020
€’000
38,232
19,859
4,653
(1,112)
2,438
(610)
553
(70)
(1,001)
190
— exchange difference on translation of foreign operations
6,840
(17,350)
Group/Associate cash flow hedges
— effective portion of changes in fair value of cash flow hedges
— fair value of cash flow hedges transferred to operating costs and other income
— deferred tax effect of cash flow hedges
— share of associates and joint venture cash flow hedges
— deferred tax effect of share of associates and joint venture cash flow hedges
(520)
2,651
(299)
1,166
(146)
(1,976)
(58)
311
(5,508)
689
Other comprehensive income/ (expense) for the year, net of tax
15,061
(24,220)
Total comprehensive income/ (expense) for the year attributable to equity shareholders
53,293
(4,361)
110
Origin Enterprises plc Annual Report and Accounts 2021 Consolidated Statement of Financial Position
As at 31 July 2021
ASSETS
Non-current assets
Property, plant and equipment
Right of use asset
Investment properties
Goodwill and intangible assets
Investments in associates and joint venture
Other financial assets
Post employment benefit surplus
Deferred tax assets
Total non-current assets
Current assets
Properties held for sale
Inventory
Trade and other receivables
Derivative financial instruments
Cash and cash equivalents
Total current assets
TOTAL ASSETS
Notes
2021
€’000
2020
€’000
12
13
14
15
16
17
27
24
14
18
19
23
21
104,528
109,363
45,177
2,270
248,445
42,774
552
5,939
6,185
39,824
2,270
235,949
40,597
575
403
6,890
455,870
435,871
24,200
214,221
434,614
224
27,100
188,775
406,857
1,460
168,660
172,309
841,919
796,501
1,297,789
1,232,372
111
FINANCIAL STATEMENTS Consolidated Statement of Financial Position (continued)
As at 31 July 2021
EQUITY
Called up share capital presented as equity
Share premium
Retained earnings and other reserves
TOTAL EQUITY
LIABILITIES
Non-current liabilities
Interest-bearing borrowings
Lease liabilities
Deferred tax liabilities
Put option liability
Provision for liabilities
Derivative financial instruments
Total non-current liabilities
Current liabilities
Interest-bearing borrowings
Lease liabilities
Trade and other payables
Corporation tax payable
Provision for liabilities
Derivative financial instruments
Total current liabilities
TOTAL LIABILITIES
Notes
2021
€’000
2020
€’000
28
22
13
24
26
25
23
22
13
20
25
23
1,264
160,498
199,243
361,005
1,264
160,498
150,564
312,326
140,184
205,889
36,226
21,161
24,138
1,445
323
31,961
19,785
22,073
1,649
1,262
223,477
282,619
42,882
9,910
645,924
11,841
2,014
736
19,633
8,775
590,182
11,976
4,393
2,468
713,307
637,427
936,784
920,046
TOTAL EQUITY AND LIABILITIES
1,297,789
1,232,372
On behalf of the Board
Rose Hynes
Director
28 September 2021
Sean Coyle
Director
28 September 2021
112
Origin Enterprises plc Annual Report and Accounts 2021
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113
FINANCIAL STATEMENTS
Consolidated Statement of Cash Flows
For the financial year ended 31 July 2021
Cash flows from operating activities
Profit before tax
Exceptional items
Finance income
Finance expenses
Profit on disposal of property, plant and equipment
Share of profit of associates and joint venture
Depreciation of property, plant and equipment
Depreciation of right of use assets
Amortisation of intangible assets
Employee share-based payment charge/ (credit)
Pension contributions in excess of service costs
Payment of exceptional rationalisation costs
Payment of exceptional disposal costs
Payment of exceptional acquisition costs
Operating cash flow before changes in working capital
Movement in inventory
Movement in trade and other receivables
Movement in trade and other payables
Cash generated from operating activities
Interest paid
Income tax paid
Cash inflow from operating activities
Cash flows from investing activities
Proceeds from disposal of held for sale properties
Deposits received in advance for properties held-for-sale
Proceeds from disposal of investment in associate
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Additions to intangible assets
Consideration relating to acquisition
Payment of contingent acquisition consideration
Net proceeds from disposal of subsidiary
Repayment of equity investment
Dividends received from associates
Cash outflow from investing activities
Cash flows from financing activities
Drawdown of bank loans
Repayment of bank loans
Lease liability payments
Payment of dividends to equity shareholders
Cash (outflow)/ inflow from financing activities
Net increase in cash and cash equivalents
Translation adjustment
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
114
Notes
2021
€’000
2020
€’000
3
4
4
16
12
13
15
8
27
14
3
15
33
25
13
22
21,22
47,822
(1,103)
(795)
9,347
(434)
(2,841)
8,176
10,913
12,162
1,016
(790)
(1,207)
(344)
(253)
81,669
(20,857)
(17,983)
34,886
77,715
(5,755)
(10,073)
61,887
2,900
3,000
-
2,842
(8,155)
(10,073)
(9,175)
(1,844)
15,249
56
4,468
(732)
23,117
6,505
(954)
12,204
(533)
(6,154)
8,564
10,184
12,301
(406)
(1,007)
(726)
-
(1,439)
61,656
6,622
104,366
(80,663)
91,981
(8,628)
(7,947)
75,406
-
-
904
991
(12,056)
(3,670)
-
(7,386)
-
113
5,776
(15,328)
137,665
(180,065)
(12,553)
(3,956)
(58,909)
2,246
856
152,676
155,778
250,025
(209,528)
(11,422)
(26,780)
2,295
62,373
2,418
87,885
152,676
Origin Enterprises plc Annual Report and Accounts 2021 Group Accounting Policies
The Group is currently assessing the
impact in relation to the adoption of
the above standards and interpretations
for future periods. The Directors assess
that at this point they do not believe the
standards will have a significant impact
on the financial statements of the
Group in future periods.
New IFRS accounting standards
and interpretations not yet
effective
The Group has not applied the following
IFRS’s and International Financial
Reporting Interpretations Committee
(‘IFRIC’) Interpretations that have been
issued and adopted by the EU but are
not yet effective.
— Amendments to IAS 1: ‘Presentation
of Financial Statements:
Classification of Liabilities as Current
or Non-Current’.
— Amendments to IAS 16: ‘Property,
plant and equipment’: proceeds
before intended use.
— Amendments to IAS 37: ‘Provisions,
Contingent Liabilities and Contingent
Assets’: Onerous Contracts – Cost of
Fulfilling a Contract
— Amendments to IFRS 3 ‘Business
Combinations’: Definition of
a business.
— Amendments to IAS 39, IFRS 4, IFRS 9
and IFRS 16 ‘Interest Rate Benchmark
Reform’ – phase 2.
— Annual Improvements to IFRS
Standards 2018-2020.
— IFRS 17 Insurance Contracts
and Amendments to IFRS 17
Insurance Contracts.
These standards are not expected to
have a material impact on the entity in
the current or future reporting periods
and on foreseeable future transactions.
New IFRS accounting standards
and interpretations adopted in
2020/2021
During the year ended 31 July 2021,
the Group adopted the below
amendments to International
Financial Reporting Standards (‘IFRS’),
International Accounting Standards
(‘IAS’) and the International Financial
Reporting Interpretation Committee
(‘IFRIC’) pronouncements. The
following interpretations and standard
amendments became effective as of 1
August 2020:
— Amendments to IAS 1: ‘Presentation
of Financial Statements’ and
Amendments to IAS 8: ‘Accounting
Policies, Changes in Accounting
Estimates and Errors’: Definition
of material.
— Amendments to IFRS 16 ‘Leases’:
COVID-19-Related Rent Concessions.
— Amendments to References
to Conceptual Framework in
IFRS Standards.
— Amendments to IFRS 9, IAS
39, and IFRS 7: ‘Interest Rate
Benchmark Reform’.
These standards did not have a material
impact on the entity in the current
financial year.
Basis of preparation
The consolidated financial statements
have been prepared in accordance
with International Financial Reporting
Standards (IFRS) and IFRS Interpretation
Committee (IFRS IC) interpretations as
adopted by the European Union and
those parts of the Companies Act 2014
applicable to companies reporting
under IFRS.
The Directors have elected to prepare
the Company financial statements in
accordance with FRS 102, The Financial
Reporting Standard applicable in the UK
and Republic of Ireland.
Origin Enterprises plc (the ‘Company’) is
a company domiciled and incorporated
in Ireland. The Company registration
number is 426261 and the Company
address is 4-6 Riverwalk, Citywest
Business Campus, Dublin 24, Ireland.
The Group’s financial statements for the
year ended 31 July 2021 consolidate the
individual financial statements of the
Company and its subsidiaries (together
referred to as the ‘Group’) and show
the Group’s interest in associates and
joint venture using the equity method
of accounting.
The Group and Company financial
statements were authorised for issue by
the Directors on 28 September 2021.
Statement of compliance
As permitted by Company law and
as required by the Rules of the
AIM and Euronext Growth (Dublin)
exchanges, the Group financial
statements have been prepared in
accordance with International Financial
Reporting Standards (‘IFRSs’) and
their interpretations issued by the
International Accounting Standards
Board (‘IASB’) as adopted by the EU.
The IFRSs adopted by the EU applied by
the Group in the preparation of these
financial statements are those that
were effective for accounting periods
beginning on or after 1 August 2020.
New IFRS accounting standards
and interpretations not yet
adopted by the EU and not yet
effective
The Group has not applied the following
IFRS’s and International Financial
Reporting Interpretations Committee
(‘IFRIC’) Interpretations that have not
yet been adopted by the EU.
— Amendments to IAS 8: ‘Accounting
Policies, Changes in Accounting
Estimates and Errors’.
— Amendments to IAS 1: ‘Presentation
of Financial Statements’ and IFRS
Practice Statement 2
— Amendments to IFRS 17
‘Insurance Contracts’.
115
FINANCIAL STATEMENTS Group Accounting Policies (continued)
The financial statements have been
prepared on the going concern basis
of accounting and under the historical
cost convention, as modified by the
revaluation of investment properties,
and certain financial assets and
financial liabilities (including derivative
instruments) at fair value through profit
or loss.
In considering going concern, the
Directors have had regard to the
underlying trading in the Group’s key
markets and the continuing impact of
COVID-19 restrictions. Having evaluated
the 2022 budget and the long-term
strategy plan, the Directors are satisfied
that the Group has adequate resources
to meet obligations, having regard to
debt maturities, for a period of at least
12 months from the date of approval of
the consolidated financial statements.
Therefore, it is considered appropriate
to adopt the going concern basis in
the preparation of the consolidated
financial statements.
At 31 July 2021, the Group had cash
and cash equivalents of €155.8 million
(2020: €152.7m) and had total unsecured
committed banking facilities of €430
million (2020: €430 million), of which
€30 million will expire in September
2021, €100 million will expire in May
2022, €34m will expire in June 2024 and
€266 million will expire in June 2025,
as disclosed in Note 22. After year end,
the Group extended the €100 million
facility due to expire in May 2022 to June
2025. Given the amount of cash and
cash equivalents as at 31 July 2021, the
available undrawn banking facilities and
the maturity dates of the borrowings
indicate that the Group will be able to
meet its obligations as they fall due
within the next 12 months from the
approval of the consolidated financial
statements.
The Group employs two key target ratios
to monitor equity and to be compliant
with its bank covenants, as disclosed
in Note 30. Having considered the
2022 budget, significant headroom is
expected against the bank covenants for
at least 12 months from the approval of
the consolidated financial statements.
The preparation of financial statements
in conformity with IFRS requires the use
of certain critical accounting estimates.
It also requires management to exercise
its judgement in the process of applying
the Company’s and Group’s accounting
policies. Areas involving a higher degree
of judgement or complexity, or areas
where assumptions and estimates are
significant to the consolidated financial
statements are disclosed in Note 34.
Identifiable assets acquired and
liabilities and contingent liabilities
assumed in a business combination
are measured initially at their fair
values at the acquisition date. On an
acquisition by acquisition basis, the
Group recognises any non-controlling
interest in the acquiree either at fair
value or at the non-controlling interest’s
proportionate share of the acquiree’s
net assets.
Basis of consolidation
The Group financial statements reflect
the consolidation of the results,
assets and liabilities of the parent
undertaking, the Company and all of its
subsidiaries, together with the Group’s
share of profits/losses of associates
and joint ventures. Where a subsidiary,
associate or joint venture is acquired
or disposed of during the financial
year, the Group financial statements
include the attributable results from,
or to, the effective date when control
passes, or, in the case of associates
and joint ventures, when joint control
or significant influence is obtained
or ceases.
Subsidiary undertakings
Subsidiaries are all entities (including
special purpose entities) over which the
Group has control. The Group controls
an entity when the Group is exposed to,
or has right to, variable returns from its
involvement with the entity and has the
ability to affect those returns through
its power over the entity. Subsidiaries
are consolidated from the date on
which control is transferred to the
Group and are deconsolidated at the
date that control ceases.
The acquisition method of accounting
is used to account for business
combinations by the Group. The
consideration transferred for the
acquisition of a subsidiary is the fair
values of the assets transferred, the
liabilities incurred and the equity
interests issued by the Group. The
consideration transferred includes
the fair value of any asset or
liability resulting from a contingent
consideration arrangement. Acquisition
related costs are expensed as incurred.
The excess of the consideration
transferred, the amount of any non-
controlling interest in the acquiree and
the acquisition date fair value of any
previous equity interest in the acquiree
over the fair value of the identifiable net
assets acquired is recorded as goodwill.
If this is less than the fair value of the
net assets of the subsidiary acquired
in the case of a bargain purchase, the
difference is recognised directly in the
Consolidated Income Statement.
Anticipated acquisition accounting
is applied in relation to option
arrangements entered into with
minority shareholders, whereby
the non-controlling interest is not
recognised but rather treated as
already acquired by the Group both
in the Consolidated Statement of
Financial Position and the Consolidated
Statement of Comprehensive Income.
This treatment has been adopted as the
Directors have formed the view that,
based on the structure, pricing and
timing of option contracts, significant
risks and rewards are deemed to have
transferred to Origin.
Associates and joint ventures
Associates are those entities in which
the Group has significant influence
over, but not control of, the financial
and operating policy decisions. Joint
ventures are those entities over which
the Group has joint control, established
by contractual agreement and requiring
unanimous consent for strategic,
financial and operating decisions.
Investments in associates and joint
ventures are accounted for using the
equity method of accounting.
116
Origin Enterprises plc Annual Report and Accounts 2021 Group Accounting Policies (continued)
Under the equity method of
accounting, the Group’s share of the
post-acquisition profits or losses of
its associates and joint ventures is
recognised in the Consolidated Income
Statement. The income statement
reflects, in profit before tax, the Group’s
share of profit after tax of its associates
and joint ventures in accordance with
IAS 28, ‘Investments in Associates and
Joint Ventures’.
The Group’s interest in their net
assets is included as investments in
associates and joint ventures in the
Consolidated Statement of Financial
Position at an amount representing cost
at acquisition plus the Group’s share of
post acquisition retained income and
expenses. The Group’s investment in
associates and joint ventures includes
goodwill on acquisition. The amounts
included in the financial statements in
respect of the post acquisition income
and expenses of associates and joint
ventures are taken from their latest
financial statements prepared up to
their respective year ends, together
with management accounts for the
intervening periods to the Group’s year
end. The fair value of any investment
retained in a former subsidiary is
regarded as a cost on initial recognition
of an investment in an associate or
joint venture. Where necessary, the
accounting policies of associates and
joint ventures have been changed to
ensure consistency with the policies
adopted by the Group.
Transactions eliminated on
consolidation
Intra-group balances and any unrealised
gains and losses or income and
expenses arising from intra-group
transactions are eliminated in preparing
the Group financial statements.
Unrealised gains and income and
expenses arising from transactions
with associates and joint ventures are
eliminated to the extent of the Group’s
interest in the entity. Unrealised losses
are eliminated in the same way as
unrealised gains, but only to the extent
that they do not provide evidence
of impairment.
Revenue recognition
Rebates
Revenue represents the fair value of
the sale consideration received for the
goods supplied to third parties, after
deducting discounts and settlement
price adjustments estimated based on
individual customer arrangements and
historical experience and exclusive of
value added tax.
Revenue is recognised when control of
the products has transferred, which is
usually upon shipment, or in line with
terms agreed with individual customers.
In general, revenue is recognised to the
extent that the Group has satisfied its
performance obligations to the buyer
and the buyer has obtained control of
the goods or services. Revenues are
recorded when there is no unfulfilled
obligation on the part of the Group.
Revenues are recorded based on the
price specified in the sales invoices/
contracts net of actual and estimated
returns, settlement price adjustments,
rebates and any discounts granted and
in accordance with the terms of sale.
Accumulated experience is used to
estimate returns, rebates and discounts
using the expected value method and
revenue is only recognised to the
extent that it is highly probable that
a significant reversal will not occur.
Estimated settlement price adjustments
and discounts granted to customers are
classified as a reduction of revenues and
netted off the related trade receivable
balances in Note 19. Further details of
the estimation involved in determining
settlement price adjustments at year
end is included in Note 34.
Revenue from contracts for the
provision of Digital Agricultural Services
is recognised over the term of the
contract in the accounting period in
which the services are provided.
Rebates are a feature of commercial
arrangements with certain suppliers.
Rebates received and receivable
are deducted from cost of sales in
the income statement at the year
end and the Group is required to
calculate rebates receivable due from
suppliers for volume based rebates.
The calculation takes into account
current performance, historical data for
prior years and a review of the terms
contained within supplier contracts.
Rebates receivable are included within
trade and other receivables in Note 19.
Employee benefits
Group companies operate various
pension schemes. The schemes are
generally funded through payments
to insurance companies or trustee
administered funds, determined by
periodic actuarial calculations.
Pension obligations / surplus
Obligations for contributions to
defined contribution pension plans
are recognised as an expense in the
Consolidated Income Statement as the
related employee service is received.
The Group’s net obligation in respect
of defined benefit pension plans is
calculated, separately for each plan, by
estimating the amount of future benefit
that employees have earned in return
for their service in the current and prior
periods; that benefit is discounted to
determine the present value, and the
fair value of any plan assets is deducted.
The discount rate is the yield at the
year end date on high quality corporate
bonds that are denominated in the
currency in which the benefits will
be paid and that have maturity dates
approximating the terms of the
Group’s obligations. The calculation is
performed by a qualified actuary using
the projected unit credit method.
Fair value is based on market price
information, and in the case of quoted
securities is the published bid price.
117
FINANCIAL STATEMENTS Group Accounting Policies (continued)
Defined benefit costs are categorised
as: (1) service costs; (2) net interest
expense or income; and (3)
remeasurement. Service cost includes
current and past service cost as well
as gains and losses on curtailments and
settlements; it is included in operating
profit. Past service cost is recognised
in profit or loss in the period of a plan
amendment. Net interest, is calculated
by applying the discount rate to the net
defined benefit asset or liability at the
beginning of the year; it is included in
finance costs.
Remeasurement is comprised of the
return on plan assets other than interest
at the discount rate and actuarial gains
and losses; it is recognised in other
comprehensive income in the period in
which it arises and is not subsequently
reclassified to profit or loss. Settlement
gains or losses, where they arise, are
recognised in the Consolidated Income
Statement as exceptional items.
Long-Term Incentive Plans
The Group has established the ‘2015
Origin Long Term Incentive Plan’ (‘the
2015 LTIP Plan’).
All equity instruments issued under
the 2015 LTIP Plan are equity settled
share-based payments as defined in
IFRS 2, ‘Share-based Payments’. The
fair value of equity instruments issued
is recognised as an expense with a
corresponding increase in equity. The
fair value is measured at grant date and
spread over the period during which
the employees become unconditionally
entitled to the equity instrument. The
fair value of the equity instruments
issued is measured taking into account
the market related vesting conditions
under which the equity instruments
were issued. The plans are subject to
non-market vesting conditions and,
therefore, the amount recognised as an
expense is adjusted to reflect the actual
number of equity instruments that are
expected to vest.
As explained further in Note 9, the
Group has implemented a long term
incentive plan which operates in a
similar way to a long term cash bonus.
At each balance sheet date, the related
provision is calculated based on the
estimated fair value of the obligation
resulting from applying a straight line
charge approach to the estimated final
cash obligation over the term of the
award (3 years). Remeasurements are
recognised immediately through profit
or loss.
Segmental reporting
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’ operating results are
reviewed regularly by the Group’s
Chief Operating Decision Maker, being
the Origin Executive Directors, to
make decisions about resources to be
allocated to segments and to assess
performance, and for which discrete
financial information is available.
The Group has three operating
segments: Ireland and UK, Continental
Europe and Latin America (see Note 1
for further information). Segment assets
and liabilities consist of property, plant
and equipment, goodwill and intangible
assets and other assets and liabilities
that can be reasonably allocated to
the reported segment. Unallocated
assets and liabilities principally include
current and deferred income tax
balances together with financial assets
and liabilities.
Taxation
Income tax on the profit or loss for
the year comprises current and
deferred tax. Tax is recognised in
the Consolidated Income Statement
except to the extent that it relates
to items recognised directly in other
comprehensive income, in which case
the related tax is also recognised
in the Consolidated Statement of
Comprehensive Income.
Current tax is the expected tax payable
on the taxable income for the year,
using tax rates and laws that have been
enacted or substantially enacted at the
year end date, and any adjustment to
tax payable in respect of previous years.
The Group is subject to income taxes
in numerous jurisdictions. Significant
judgement is required in determining
the Group’s provision for income
taxes. There are many transactions and
calculations for which the ultimate tax
determination is uncertain during the
ordinary course of business. The Group
recognises liabilities for anticipated
tax audit issues based on estimates of
whether additional taxes will be due.
Where the final tax outcome of these
matters is different from the amounts
that were initially recorded, such
differences will impact the income tax
and tax provisions in the period in which
such determination is made.
Deferred tax is provided using the
balance sheet liability method, providing
for temporary differences between the
carrying amounts of assets and liabilities
for financial reporting purposes and the
amounts used for taxation purposes.
The amount of deferred tax provided
is based on the expected manner of
realisation or settlement of the carrying
amount of assets and liabilities, using
tax rates enacted or substantively
enacted at the year end date. If a
temporary difference arises from initial
recognition of an asset or liability in
a transaction other than a business
combination that at the time of the
transaction does not affect accounting
or taxable profit or loss, no deferred tax
is recognised.
Deferred tax is provided on temporary
differences arising on investments in
subsidiaries and associates and joint
venture, except where the timing
of the reversal of the temporary
difference is controlled by the Group
and it is probable that the temporary
difference will not reverse in the
foreseeable future.
118
Origin Enterprises plc Annual Report and Accounts 2021 Group Accounting Policies (continued)
A deferred tax asset is recognised
only to the extent that it is probable
that future taxable profits will be
available against which the asset can
be recovered. Deferred tax assets
are reduced to the extent that it is no
longer probable that the related tax
benefit will be realised.
Foreign currency
Transactions in foreign currencies are
translated at the foreign exchange rate
ruling at the date of the transaction.
Monetary assets and liabilities
denominated in foreign currencies
at the year end date are translated
to functional currency at the foreign
exchange rate ruling at that date.
Foreign exchange differences arising
on translation are recognised in the
Consolidated Income Statement.
The assets and liabilities of foreign
operations, including goodwill and fair
value adjustments, are translated to
euro at the foreign exchange rates ruling
at the year end date. The revenues
and expenses of foreign operations
are translated to euro at the average
exchange rates. Foreign exchange
differences arising on translation of the
net assets of a foreign operation are
recognised directly in the Consolidated
Statement of Comprehensive Income, in
a translation reserve. Exchange gains or
losses on long-term intra-Group loans
that are regarded as part of the net
investment in non-euro denominated
operations, are taken to the translation
reserve to the extent that they are
neither planned nor expected to be
repaid in the foreseeable future.
Property, plant and equipment
Property, plant and equipment is stated
at cost less accumulated depreciation
and impairment losses. Other
subsequent expenditure is capitalised
only when it increases the future
economic benefits embodied in the
item of property, plant and equipment.
All other expenditure including repairs
and maintenance costs is recognised
in the income statement as an expense
as incurred. Depreciation is calculated
to write off the cost less estimated
residual value of property, plant and
equipment, other than freehold land, on
a straight line basis, by reference to the
following estimated useful lives:
Buildings
Plant and machinery
Motor vehicles
20 to 50 years
3 to 15 years
3 to 7.5 years
The residual value of assets, if
significant, and the useful life of assets
is reassessed annually.
Gains and losses on disposals of
property, plant and equipment are
recognised on the completion of sale.
Gains and losses on disposals are
determined by comparing the proceeds
received with the carrying amount and
are included in operating profit.
Investment properties
Investment property, principally
comprising land, is held for capital
appreciation. Investment property
is stated at fair value. The fair value
is based on the price that would
be received to sell the asset in an
orderly transaction between market
participants at the measurement
date. Any gain or loss arising from a
change in fair value is recognised in the
Consolidated Income Statement. When
property is transferred to investment
property following a change in use, any
difference arising at the date of transfer
between the carrying amount of the
property immediately prior to transfer
and its fair value is recognised in
equity if it is a gain unless the increase
reverses a previous impairment loss in
that property in which case the increase
is recognised in profit or loss.
Upon disposal of the property, the
gain would be transferred to retained
earnings in equity. Any loss arising in
this manner, unless it represents the
reversal of a previously recognised gain,
would be recognised immediately in
the Consolidated Income Statement.
Investment properties are disclosed
as a Level 3 fair value if one or more of
the significant inputs is not based on
observable market data and as a Level
2 fair value where all significant inputs
required to fair value the investment
properties are observable.
Properties held for sale
Non-current assets that are expected
to be recovered principally through sale
rather than continuing use and meet
the IFRS 5 criteria are classified as held
for sale. These assets are shown in the
balance sheet at the lower of their
carrying amount and fair value less any
costs to sell. Impairment losses on initial
classification as non-current assets held
for sale and subsequent gains or losses
on re-measurement are recognised in
the income statement.
Properties held for sale are not used
in the ordinary course of business
and are available for immediate sale
in their present condition subject to
terms that are usual and customary
for such properties of this nature. The
carrying amount of these properties
will be recovered principally through
a sale transaction rather than through
continuing use. The properties have
been actively marketed and the
Group is committed to its plan to sell
these properties.
Leased assets
At inception of a lease contract, the
Group assesses whether a contract
is, or contains, a lease. If the contract
conveys the right to control the use
of an identified asset for a period of
time in exchange for consideration,
it is recognised as a lease. At the
commencement date of the lease,
the Group recognises a right-of-
use asset and a lease liability on the
balance sheet. The right-of-use asset
is measured at cost, which consists
of the initial measurement of the
lease liability, any initial direct costs
incurred by the Group in setting up/
entering into the lease, an estimate of
any costs to dismantle and remove the
asset at the end of the lease and any
payments made in advance of the lease
commencement date.
119
FINANCIAL STATEMENTS Group Accounting Policies (continued)
Right-of-use assets are depreciated
on a straight-line basis from the lease
commencement date to the earlier
of the end of the useful life or the
end of the lease term. The carrying
amounts of right-of-use assets are
reviewed at each balance sheet
date to determine whether there
is any indication of impairment. An
impairment loss is recognised when the
carrying value of an asset exceeds its
recoverable amount.
The lease liability is measured as the
present value of the lease payments
unpaid at that date, discounted using
the interest rate implicit in the lease
or, if that rate cannot be readily
determined, the Group’s incremental
borrowing rate. Lease payments
included in the measurement of the
lease liability comprises of fixed or
variable payments (based on an index or
rate), amounts expected to be payable
under a residual value guarantee
and payments arising from options
reasonably certain to be exercised.
Subsequent to the initial measurement,
the liability will be reduced for
payments made and increased for the
interest applied and it is remeasured to
reflect any reassessment or contract
modifications. When the lease liability
is remeasured, the corresponding
adjustment is reflected in the right-of-
use asset or in the Consolidated Income
Statement if the right-of-use asset is
already reduced to zero. The Group
has elected not to separate non-lease
components from lease components,
and instead account for each lease
component and any associated non-
lease components as a single lease
component further increasing the
lease liability.
The Group has elected to record short-
term leases of less than 12 months and
leases of low value assets as defined
in IFRS 16 as an operating expense in
the Consolidated Income Statement.
Payments made under operating leases
are charged to the Consolidated Income
Statement on a straight line basis over
the lease term.
Business combinations
and goodwill
All business combinations are
accounted for by applying the
acquisition method. Goodwill
represents amounts arising on
acquisition of subsidiaries, associates
and the joint venture. In respect of
acquisitions that have occurred since
1 August 2005, goodwill represents
the difference between the cost of
the acquisition and the fair value of
the net identifiable assets acquired.
In respect of acquisitions prior to this
date, goodwill is included on the basis
of its deemed cost, i.e. original cost
less accumulated amortisation from
the date of acquisition up to 31 July
2005, which represents the amount
recorded under Irish GAAP. Goodwill
is now stated at cost or deemed cost
less any accumulated impairment
losses. In respect of associates and
the joint venture, the carrying amount
of goodwill is included in the carrying
amount of the investment.
Contingent acquisition
consideration
Any contingent consideration to be
transferred by the Group is recognised
at fair value at the acquisition date
and classified as a financial liability or
as equity in accordance with IAS 32.
Subsequent changes to the fair value
of the contingent consideration that is
deemed to be a liability are recognised
in accordance with IFRS 9 in profit or
loss. Contingent consideration that is
classified as equity is not remeasured
and its subsequent settlement is
accounted for within equity.
Intangible assets
Intangible assets acquired as part of
a business combination are initially
recognised at fair value being their
deemed cost as at the date of
acquisition. These generally include
brand and customer related intangible
assets. Computer software that is
not an integral part of an item of
computer hardware is also classified as
an intangible asset. Where intangible
assets are separately acquired, they
are capitalised at cost. Cost comprises
purchase price and other directly
attributable costs.
Internally generated intangible assets
are recognised when the following can
be demonstrated;
— the technical feasibility of completing
the intangible asset so that it will be
available for use or sale,
— the intention to complete
the development,
— the ability to use or sell the
intangible asset,
— the ability to generate future
economic benefits,
— the availability of resources to
complete the development; and
— the ability to measure reliably
the expenditure attributable
to the intangible asset during
its development.
Intangible assets with finite lives are
amortised over the period of their
expected useful lives in equal annual
instalments, as follows:
up to 20 years
Brands
Customer related
up to 20 years
Developed technology up to 10 years
Computer and
ERP related
3 to 10 years
Subsequent to initial recognition,
intangible assets are stated at cost
less accumulated amortisation and
impairment losses incurred.
120
Origin Enterprises plc Annual Report and Accounts 2021 Group Accounting Policies (continued)
Deferred acquisition
consideration
To the extent that deferred acquisition
consideration is payable after more than
one year from the date of acquisition,
it is discounted at an appropriate loan
interest rate and accordingly, carried at
net present value on the Consolidated
Statement of Financial Position. An
appropriate interest charge, using the
Group’s incremental cost of capital, at
a constant rate on the carrying amount
adjusted to reflect market conditions,
is reflected in the Consolidated Income
Statement over the earnout period,
increasing the carrying amount so that
the obligation will reflect its settlement
at the time of maturity.
Impairment
The carrying amounts of the Group’s
assets, other than inventories (which
are carried at the lower of cost and
net realisable value), deferred tax
assets (which are recognised based on
recoverability), investment properties
(which are carried at fair value),
and financial instruments (which are
carried at fair value), are reviewed
to determine whether there is an
indication of impairment when an event
or transaction indicates that there may
be. If any such indication exists, an
impairment test is carried out and the
asset is written down to its recoverable
amount. An impairment test is carried
out annually on goodwill.
An impairment loss is recognised
whenever the carrying amount of
an asset or its cash-generating unit
exceeds its recoverable amount.
Impairment losses are recognised in
the Consolidated Income Statement.
Impairment losses recognised in
respect of cash-generating units are
allocated first to reduce the carrying
amount of any goodwill allocated to
the cash-generating unit and then, to
reduce the carrying amount of the other
assets in the unit on a pro rata basis.
An impairment loss, other than in the
case of goodwill, 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.
Inventory
Inventory is stated at the lower of
cost and net realisable value. Cost
is determined at either the first-
in, first-out (FIFO) method or the
weighted average method, depending
on the inventory type. Cost includes all
expenditure which has been incurred
in the normal course of business in
bringing the products to their present
location and condition. Net realisable
value is the estimated selling price of
inventory on hand less all further costs
to completion and all costs expected to
be incurred in marketing, distribution
and selling.
Cash and cash equivalents
Cash and cash equivalents in the
Consolidated Statement of Financial
Position comprise cash at bank and in
hand and call deposits. Bank overdrafts
that are repayable on demand and
form an integral part of the Group’s
cash management are included
as a component of cash and cash
equivalents for the purpose of the
Consolidated Statement of Cash Flows.
Dividends
Dividends are recognised in the period
in which they are approved by the
Company’s shareholders, or in the case
of an interim dividend, when it has been
approved by the Board of Directors
and paid.
Share capital
Ordinary shares are classified as
equity. Incremental costs directly
attributable to the issue of new shares
are shown in equity as a deduction from
the proceeds.
Financial assets and liabilities
Trade and other receivables
Trade and other receivables are
recognised initially at fair value and
subsequently measured at amortised
cost using the effective interest
method, less loss allowance.
The Group applies the IFRS 9 simplified
approach to measuring expected
credit losses which uses a lifetime
expected loss allowance for all trade
receivables. To measure the expected
credit losses, trade receivables have
been grouped based on shared credit
risk characteristics and the days past
due. The expected loss rates are
based on payment profiles of sales and
the corresponding historical credit
loss experience.
Short-term bank deposits
Short-term bank deposits of greater
than three months maturity which
do not meet the definition of cash
and cash equivalents are classified as
loans and receivables within current
assets and stated at amortised cost
in the Consolidated Statement of
Financial Position.
Trade and other payables
Trade and other payables are
recognised initially at fair value
and are subsequently measured at
amortised cost, using the effective
interest method.
Derivatives
All derivatives are initially recorded
at fair value on the date the contract
is entered into and subsequently, at
reporting dates remeasured to their
fair value. Fair value is the price that
would be received to sell an asset
or paid to transfer a liability in an
orderly transaction between market
participants at the measurement
date. The gain or loss arising on
remeasurement is recognised in the
income statement except where
the instrument is a designated
hedging instrument.
121
FINANCIAL STATEMENTS Group Accounting Policies (continued)
Derivative financial instruments are
used to manage the Group’s exposure
to foreign currency risk and interest
rate risk through the use of forward
currency contracts and interest rate
swaps. These derivatives are generally
designated as cash flow hedges, as
the purpose is to hedge a particular
risk associated with a highly probable
forecast transaction. The Group
does not enter into speculative
derivative transactions.
Put option liability
Where put/call option agreements
are in place in respect of shares held
by non-controlling shareholders, the
liability is measured in accordance with
the requirements of IAS 32 and IFRS 9
and is stated at fair value. Such liabilities
are shown as current or non-current
financial liabilities in the Consolidated
Statement of Financial Position.
At the time of acquisitions, and where
the Group has issued a put option
over shares held by a non-controlling
interest, the Group derecognises
the non-controlling interests and
instead recognises a contingent
deferred consideration liability for the
estimated amount likely to be paid to
the non-controlling interest on the
exercise of those options. Movements
in the estimated liability in respect
of put options are recognised in
retained earnings.
Cash flow hedges
In accordance with IFRS 9 and subject
to the satisfaction of certain criteria,
relating to the documentation of the
risk, objectives and strategy for the
hedging transaction and the ongoing
measurement of its effectiveness, cash
flow hedges are accounted for under
hedge accounting rules. In such cases,
any unrealised gain or loss arising on
the effective portion of the derivative
instrument is recognised in the cash
flow hedging reserve, a separate
component of equity. Unrealised gains
or losses on any ineffective portion of
the derivative are recognised in the
income statement. When the hedged
transaction occurs the related gains or
losses in the hedging reserve are
transferred to the Consolidated
Income Statement.
Hedge accounting is discontinued when
a hedging instrument expires or is sold,
terminated or exercised, or no longer
qualifies for hedge accounting. The
cumulative gain or loss at that point
remains in equity and is recognised in
accordance with the above policy when
the transaction occurs. If a hedged
transaction is no longer expected to
occur, the net cumulative gain or loss
recognised in other comprehensive
income is transferred to the income
statement in the period.
Interest-bearing loans and borrowings
Interest-bearing loans and borrowings
are recognised initially at fair value
less attributable transaction costs.
Subsequent to initial recognition,
interest-bearing loans and borrowings
are stated at amortised cost using an
effective interest rate method.
Lease liabilities
Fair value for disclosure purposes is
based on the present value of future
cash flows discounted at appropriate
current market rates.
Exceptional items
The Group has adopted an income
statement format which seeks to
highlight significant items within the
Group results for the year. The Group
believes that this presentation provides
a more informative analysis as it
highlights one off items. Such items may
include significant restructuring costs,
acquisition and disposal related costs,
organisation redesign costs, profit
or loss on disposal or termination of
operations, profit or loss on disposal of
property, plant and equipment, profit or
loss on disposal of investments, changes
in fair value of investment properties,
settlement gains or losses on defined
benefit plans, claims and significant
impairment of assets. Judgement is
used by the Group in assessing the
particular items, which by virtue of their
scale and nature, should be disclosed in
the Consolidated Income Statement and
related notes as exceptional items.
Borrowing costs
Finance expenses comprise interest
expense on borrowings. All borrowing
costs are recognised in the Consolidated
Income Statement using the effective
interest method.
Provisions
A provision is recognised in the
Consolidated Statement of Financial
Position when the Group has a present
legal or constructive obligation as a
result of a past event, it is probable that
an outflow of economic benefits will be
required to settle the obligation, and
a reliable estimate can be made of the
amount of the obligation.
If the effect is material, 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, where appropriate, the risks
specific to the liability.
Finance income
Finance income is recognised using the
effective interest method.
Government grants
Grants from the government are
recognised at their fair value where
there is a reasonable assurance that the
grant will be received and the Group
will comply with all attached conditions.
Government grants relating to costs
are deferred and recognised in profit
or loss over the period necessary to
match them with the costs that they are
intended to compensate. Government
grants relating to the purchase of
property, plant and equipment are
included in non-current liabilities as
deferred income and they are credited
to profit or loss on a straight-line
basis over the expected lives of the
related assets.
122
Origin Enterprises plc Annual Report and Accounts 2021 Notes to the Group Financial Statements
1 Segment information
IFRS 8, ‘Operating Segments’, requires operating segments to be identified on the basis of internal reports that are regularly
reviewed by the Chief Operating Decision Maker (‘CODM’) in order to allocate resources to the segments and to assess
their performance.
The Group has three operating segments as follows:
Ireland and the United Kingdom
This segment includes the Group’s wholly owned Irish and UK-based Business-to-Business Agri-Inputs operations, Integrated
Agronomy and On-Farm Services operations and Digital Agricultural Services business. In addition, this segment includes the
Group’s associate and joint venture undertakings.
Continental Europe
This segment includes the Group’s Business-to-Business Agri-Inputs operations, Integrated Agronomy and On-Farm Services
operations in Poland, Romania, Belgium and the Ukraine.
Latin America
Origin entered the Latin American market in August 2018 through the acquisition of Fortgreen, a business which is focused on
the development and marketing of value added crop nutrition and speciality inputs and which is headquartered in Paraná State
in southern Brazil.
Information regarding the results of each reportable segment is included below. Performance is measured based on segment
operating profit as included in the internal management reports that are reviewed by the Group’s CODM, being the Origin
Executive Directors. Segment operating profit is used to measure performance, as this information is the most relevant in
evaluating the results of the Group’s segments.
Segment results, assets and liabilities include all items directly attributable to a segment.
Segment capital expenditure is the total amount incurred during the period to acquire segment assets that are expected to be
used for more than one accounting period.
(a) Analysis by segment
(i) Segment revenue and result
Ireland and the UK
Continental
Europe
Latin America
Total Group
2021
€’000
2020
€’000
2021
€’000
2020
€’000
2021
€’000
2020
€’000
2021
€’000
2020
€’000
Total revenue
1,406,528 1,284,946
570,131 590,181
38,966 50,435
2,015,625 1,925,562
Less revenue from associates
and joint venture
(357,258)
(317,057)
-
-
- (19,363)
(357,258)
(336,420)
Revenue
1,049,270
967,889
570,131 590,181
38,966 31,072
1,658,367 1,589,142
Segment result
39,137
23,302
15,587
13,686
6,283
7,111
61,007
44,099
Profit from associates and joint
venture
Amortisation of non-ERP
intangible assets
Operating profit before
exceptional items
Exceptional items
Operating profit
2,841
5,808
-
-
-
346
2,841
6,154
(5,302)
(5,035)
(1,529)
(2,145)
(1,746)
(2,201)
(8,577)
(9,381)
36,676
(1,496)
35,180
24,075
14,058
11,541
4,537
5,256
(2,670)
2,599
(3,555)
-
(280)
21,405
16,657
7,986
4,537
4,976
55,271
1,103
56,374
40,872
(6,505)
34,367
123
FINANCIAL STATEMENTS 1 Segment information (continued)
(ii) Segment earnings before financing costs and tax is reconciled to reported profit before tax and profit after tax as follows:
Operating profit
Finance income
Finance expense
Reported profit before tax
Income tax
Reported profit after tax
(iii) Segment assets
Assets excluding investment in
associates and joint venture
Investment in associates and
joint venture
(including other financial assets)
2021
€’000
2020
€’000
56,374
795
(9,347)
47,822
(9,590)
38,232
34,367
954
(12,204)
23,117
(3,258)
19,859
Ireland and the UK
Continental
Europe
Latin America
Total Group
2021
€’000
2020
€’000
2021
€’000
2020
€’000
2021
€’000
2020
€’000
2021
€’000
2020
€’000
631,831 553,253
359,636 382,905
87,927
74,383
1,079,394
1,010,541
43,326
41,172
-
-
-
-
43,326
41,172
Segment assets
675,157 594,425
359,636 382,905
87,927
74,383
1,122,720
1,051,713
Reconciliation to total assets as reported in Consolidated Statement of Financial Position
Cash and cash equivalents
Derivative financial instruments
Deferred tax assets
Total assets as reported in Consolidated Statement of Financial Position
(iv) Segment liabilities
168,660
172,309
224
6,185
1,460
6,890
1,297,789
1,232,372
Ireland and the UK
Continental
Europe
Latin America
Total Group
2021
€’000
2020
€’000
2021
€’000
2020
€’000
2021
€’000
2020
€’000
2021
€’000
2020
€’000
Segment liabilities
407,155 369,177
273,687 257,115
38,815
32,741
719,657
659,033
Reconciliation of total liabilities as reported in Consolidated Statement of Financial Position
Interest-bearing loans and liabilities
Derivative financial instruments
Current and deferred tax liabilities
Total liabilities as reported in Consolidated Statement of Financial Position
183,066
225,522
1,059
33,002
3,730
31,761
936,784
920,046
124
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 1 Segment information (continued)
(v) Other segment information
Depreciation
Intangible amortisation
Exceptional items (Note 3)
Capital expenditure –
property, plant and equipment
Capital expenditure – ERP and
computer intangibles
Ireland and the UK
Continental Europe
Latin America
Total Group
2021
€’000
2020
€’000
2021
€’000
2020
€’000
2021
€’000
2020
€’000
2021
€’000
2020
€’000
14,608
14,151
8,887
1,496
7,955
2,670
4,211
1,529
(2,599)
4,335
2,145
3,555
270
262
1,746
2,201
-
280
19,089
12,162
(1,103)
18,748
12,301
6,505
4,726
11,351
1,172
1,446
1,476
1,050
7,374
13,847
7,804
1,930
539
369
6
2
Total capital expenditure
12,530
13,281
1,711
1,815
1,482
1,052
(b) Analysis by geography and revenue lines
8,349
15,723
2,301
16,148
Ireland and the UK
Continental Europe
Latin America
Total Group
2021
€’000
2020
€’000
2021
€’000
2020
€’000
2021
€’000
2020
€’000
2021
€’000
2020
€’000
Revenue
1,049,270
967,889
570,131 590,181
38,966
31,072
1,658,367
1,589,142
Total segment assets
675,157
594,425
359,636 382,905
87,927
74,383
1,122,720
1,051,713
IFRS 8 non-current assets*
331,258
303,602
63,111
76,063
49,377
48,913
443,746
428,578
*The total non-current assets in the UK are €286.3 million (2020: €262.4million).
The following table disaggregates revenue by significant revenue lines:
Integrated
Agronomy and Digital
Agricultural Services
Business-to-Business
Agri-Inputs
Total Group
2021
€’000
2020
€’000
2021
€’000
2020
€’000
2021
€’000
2020
€’000
Revenue
984,192
995,128
674,175
594,014
1,658,367
1,589,142
No one individual customer accounts for more than 10% of total revenue.
2 Operating costs
Distribution expenses
Administration expenses
Amortisation of non-ERP related intangible assets
Exceptional items (Note 3)
2021
€’000
2020
€’000
102,308
103,792
82,116
8,577
193,001
(1,506)
191,495
81,704
9,381
194,877
6,505
201,382
125
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 3 Exceptional items
Exceptional items are those that, in management’s judgement, should be separately presented and disclosed by virtue of
their nature or amount. Such items are included within the Consolidated Income Statement caption to which they relate. The
following exceptional items arose during the year:
Gain on disposal of subsidiary (i)
Transaction related (costs) / credit (ii)
Pension and rationalisation related costs (iii)
Write down of intangible assets arising from re-branding (iv)
Fair value adjustment of investment properties and properties held for sale (v)
Loss on disposal of associate (vi)
Total exceptional credit / (charge) before tax and before associates and joint venture
Arising in associates and joint venture (vii)
Total exceptional credit / (charge) before tax
Tax credit on exceptional items
2021
€’000
2,599
(253)
(840)
-
-
-
1,506
(403)
1,103
122
2020
€’000
-
379
(202)
(6,853)
730
(559)
(6,505)
-
(6,505)
1,261
Total exceptional credit / (charge) after tax
1,225
(5,244)
(i) Gain on disposal of subsidiary
Following the disposal of the Group’s Pillaert business operated in Belgium a disposal gain of €2.6 million was recorded.
Identified net assets on disposal of Pillaert:
Property, plant and equipment
Goodwill and intangible assets
Working capital
Cash & cash equivalents
Deferred tax liabilities
Consideration received, net of transaction costs
Gain on disposal of subsidiary
2021
€’000
5,209
3,351
4,900
269
(1,323)
12,406
(15,005)
2,599
The tax impact of this exceptional item in the current year was a tax charge of €Nil.
(ii) Transaction related (costs) / credit
Transaction related costs in the current year principally comprise of costs incurred in relation to the acquisition completed
during the year.
In the prior year, the transaction related credit arose on the movement in contingent consideration for both Fortgreen and
Resterra (Note 25), and is net of transaction related costs incurred in relation to the acquisitions completed during the prior
year and potential acquisitions in the current year. The tax impact of this item in the prior year was a tax credit of €0.1 million.
126
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 3 Exceptional items (continued)
(iii) Pension and rationalisation related costs
Rationalisation costs relate to termination payments from restructuring programmes across the Group. This exceptional charge
in the prior year also includes past service costs in respect of the defined benefit pension scheme. The tax impact of this
exceptional item in the current year is a tax credit of €0.1 million (2020: €Nil).
(iv) Write down of intangible assets arising from re-branding
During the prior year, the Group completed a re-branding of the businesses in Continental Europe. As a result, legacy
intangible assets relating to the branding of these businesses were written down by €3.6 million (Note 15) and charged to the
income statement as an exceptional item. In addition legacy brands within the Ireland/UK segment attributable to bolt on
acquisitions were also written down by €3.3 million as the business is now fully integrated under the Origin brand. The tax
impact of this in the prior year was a tax credit of €1.2 million.
(v) Fair value adjustment of investment properties and properties held for sale
During the prior year, investment properties valued at €2.9 million (Note 14) were reclassified as held for sale as it was
expected these properties would be sold within 12 months. There was a fair value uplift on these properties of €1.0 million
prior to reclassification to held-for-sale (Note 14). Also included are costs relating to the disposal of the properties. The tax
impact of this exceptional item in the prior year was a charge of €Nil.
(vi) Loss on disposal of associate
On 31 July 2020, the Group disposed of its 20% shareholding in Ferrari Zagatto E Cia Ltda, a Brazilian based agronomy services
and crop input distribution business. A loss of €0.6 million arose on the disposal as follows:
Consideration received from disposal of interest in Ferrari Zagatto
Carrying value of investment (Note 16)
Foreign exchange differences previously taken to comprehensive income
Loss arising on disposal of associate
The tax impact of this exceptional item is a tax charge of €Nil.
(vii) Arising in associates and joint venture
2020
€’000
904
(1,308)
(155)
(559)
The exceptional charge in the current year relates to past service costs in respect of the defined benefit pension scheme of
associates and joint venture. The net tax impact of this exceptional item in the year was a tax credit of €0.1 million.
127
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 4 Finance income and expense
Recognised in the Consolidated Income Statement
Finance income
Interest income on bank deposits
Defined benefit pension obligations: net interest income (Note 27)
Total finance income
Finance expenses
Interest payable on bank loans and overdrafts
Interest on lease liabilities (Note 13)
Defined benefit pension obligations: net interest cost (Note 27)
Total finance expenses
Finance costs, net
Recognised directly in Other Comprehensive Income
Effective portion of changes in fair value of interest rate swaps
5 Statutory and other information
Group operating profit before exceptional items is stated after charging:
Raw materials and consumables used
Amortisation of intangible assets (Note 15)
Depreciation of property, plant and equipment (Note 12)
Depreciation of right of use assets (Note 13)
Operating lease rentals (i)
Foreign exchange expense
2021
€’000
2020
€’000
787
8
795
(7,518)
(1,829)
-
(9,347)
(8,552)
954
-
954
(10,429)
(1,766)
(9)
(12,204)
(11,250)
700
(351)
2021
€’000
2020
€’000
1,402,363
1,349,771
12,162
8,176
10,913
3,758
9
12,301
8,564
10,184
4,277
3,008
(i) The operating lease rentals charge relates to short-term and low-value leases.
Auditors’ remuneration
Remuneration (including expenses) for the statutory audit of the entity financial statements and other services carried out for
the Group by the auditors is as follows:
Audit of the consolidated financial statements
Other non-audit services
2021
€’000
2020
€’000
624
43
595
7
128
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 6 Directors’ emoluments
Emoluments
Emoluments include the following contributions to retirement benefit schemes:
— Defined contribution
— Defined benefit
2021
€’000
2020
€’000
1,771
3,107
46
39
85
122
26
148
Further details are shown in the Remuneration Committee Report on pages 83 to 96.
Retirement benefits are accruing to one Director (2020: one Director) under a defined benefit scheme and to two Directors
(2020: two Directors) under a defined contribution scheme.
7 Share of profit after tax of associates and joint venture
Total Group share of:
Revenue
Profit after tax, before exceptional items (Note 16)
Share of exceptional items, net of tax (Note 3)
8 Employment
2021
€’000
2020
€’000
357,258
336,420
2,841
(403)
6,154
-
The average number of persons (including Executive Directors) employed by the Group during the year was as follows:
Sales and distribution
Production
Management and administration
Average number of Non-Executive Directors
Average number of Executive Directors
2021
Number
2020
Number
1,626
420
595
2,641
1,606
402
603
2,611
2021
Number
2020
Number
6
3
5
3
129
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 8 Employment (continued)
Aggregate employment costs of the Group are analysed as follows:
Wages and salaries (1)
Social insurance costs
Retirement benefit costs (Note 27) included in Consolidated Income Statement:
— defined benefit schemes – current service cost
— defined benefit schemes – past service cost/ (credit)
— defined benefit schemes – net interest (income)/ expense
— defined contribution schemes
Share based payment charge/ (credit)
Cash based long term incentive plan
Pension and rationalisation related costs (Note 3)
Retirement benefit costs (Note 27) included in Other Comprehensive Income:
— defined benefit schemes – remeasurements (Note 27)
2021
€’000
2020
€’000
112,776
10,578
108,125
11,520
526
17
(8)
4,113
1,016
146
840
624
(151)
9
4,125
(406)
35
202
130,004
124,083
(4,653)
125,351
(553)
123,530
(1)
includes furlough payments to UK employees of €Nil (2020: €636,000) under the UK Coronavirus Job Retention Scheme
130
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 9 Long Term Incentive Plans
Executive Directors and other senior management participate in the following Long Term Incentive Plans:
2015 LTIP Plan
The 2015 Origin Long Term Incentive Plan (‘2015 LTIP Plan’) is a share-based payment plan which was approved by the
shareholders on 27 November 2015. The details of awards under the plan are as follows:
Awards
2017 Awards
2018 Awards
On 10 March 2017, under the terms of the 2015 LTIP Plan, T O’Mahony, I Hurley and D Giblin were granted
73,529, 48,897 and 60,459 share options respectively. On the departure of I Hurley in 2018, options granted
to her lapsed with immediate effect. 52.70% of the remaining options for T O’Mahony and D Giblin vested in
March 2020.
On 28 September 2017, under the terms of the 2015 LTIP Plan, T O’Mahony, I Hurley and D Giblin were
granted 77,519, 51,550 and 63,076 share options respectively. On the departure of I Hurley in 2018, options
granted to her lapsed with immediate effect. In the prior year, the Executive Directors have voluntarily
waived their entitlement to any unvested share options under the 2018 awards.
2019 Awards -
Directors
On 2 October 2018, under the terms of the 2015 LTIP Plan, T O’Mahony, S Coyle and D Giblin were granted
88,496, 61,540 and 70,784 share options respectively. In the prior year, the Executive Directors have
voluntarily waived their entitlement to any unvested share options under the 2019 awards.
2019 Awards
– Senior
Management
On 2 October 2018, and 17 July 2019 under the terms of the 2015 LTIP Plan, senior management were granted
279,401 and 313,335 share options respectively. During the year 111,614 share options vested and a further
338,058 were not awarded. During the year three employees (2020: two employees) ceased employment
resulting in the forfeiture of 53,160 share options (2020: 53,540 share options).
2020 Awards -
Directors
On 26 September 2019, under the terms of the 2015 LTIP Plan, T O’Mahony, S Coyle and D Giblin were
granted 100,000, 69,540 and 80,356 share options respectively. In the prior year, the Executive Directors
have voluntarily waived their entitlement to any unvested share options under the 2020 awards.
Targets &
Thresholds
Vesting of share options and transfer of ownership of resulting shares is determined by reference to the
following conditions:
— Up to 30 per cent of the shares subject to the award will vest depending on the growth in the Group’s
consolidated Adjusted Earnings per Share (“Adjusted EPS”) over a three-year performance period
starting on the first day of the financial year in which the award is granted, determined in accordance
with the table below.
Annualised Adjusted Diluted
EPS growth
Below 5 per cent
5 per cent
Between 5 per cent and 10 per cent
10 per cent and above
Proportion of the Adjusted Diluted
EPS award vesting
0 per cent
30 per cent
30 per cent- 100 per cent pro rata
100 per cent
Vesting under the EPS performance condition is also contingent on the Group’s annualised EPS over the
three year performance period being positive.
— Up to 40 per cent of the shares subject to an award will vest depending on the Group’s consolidated
Return On Investment Capital (“ROIC”) over a three year performance period starting on the first day
of the financial year in which the award is granted, determined in accordance with the table below.
Average Annual ROIC Return
Below 12.5 per cent
12.5 per cent
Between 12.5 per cent and 17.5 per cent
17.5 per cent and above
Proportion of the ROIC award vesting
0 per cent
30 per cent
30 per cent- 100 per cent pro rata
100 per cent
131
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 9 Long Term Incentive Plans (continued)
Awards
Targets &
Thresholds
- continued
— Up to 30 per cent of the shares subject to an award will vest depending on the Group’s consolidated
Free Cash Flow Ratio (“FCFR”) over a three year performance period starting on the first day of the
financial year in which the award is granted, determined in accordance with the table below.
Average Annual FCFR
Below 50 per cent
50 per cent
Between 50 per cent and 100 per cent
100 per cent and above
Proportion of the FCFR award vesting
0 per cent
30 per cent
30 per cent- 100 per cent pro rata
100 per cent
Additional
Conditions
Additional conditions attaching to the vesting of the share options and transfer of ownership of resulting
shares include the following:
— as a general rule, the participant must remain in service throughout the performance period, except in
certain pre-determined circumstances;
— the Committee will specify a minimum retention period during which either vested options cannot be
exercised or if vested options can be exercised there will be a restriction on the disposal of the shares
acquired for the period. This period must be for a minimum of two years; and
— where a participant whose primary management responsibility is in respect of a business division of
the Group is granted an award, the Remuneration Committee at its discretion may determine that
a maximum of 40 per cent of an award will be subject to divisional financial or other performance
conditions related to the business division.
Under the terms of the 2015 LTIP Plan, awards will vest no earlier than the third anniversary of the award
date and in the case of options cannot be exercised later than the seventh anniversary of the award date.
An award will not vest unless the Committee is satisfied that the Group’s underlying financial performance
has shown a sustained improvement in the period since the award date. If this condition is met, the
extent of vesting for awards granted to employees of the Group following the adoption of the Plan will be
determined by the performance conditions set out above.
Transfer of
Ownership /
Vesting
In July 2020, September 2020 and January 2021 a number of share options were issued to S Coyle, D Giblin, TJ Kelly and
Senior Management under the 2015 Origin Long Term Incentive Plan. The details of awards under the Plan are as follows:
Awards
2020 Awards
On 8 July 2020 under the terms of the 2015 LTIP Plan, S Coyle was granted 222,246 share options.
2021 Awards -
Directors
On 24 September 2020 under the terms of the 2015 LTIP Plan, S Coyle and D Giblin were granted 165,048
and 125,207 share options respectively. On 18 January 2021, TJ Kelly was granted 99,691 share options under
the terms of the 2015 LTIP Plan.
2021 Awards
- Senior
Management
Targets &
Thresholds
On 24 September 2020 under the terms of the 2015 LTIP Plan, Senior Management were granted 1,174,944
share options. During the year 91,953 share options were forfeited due to two employees ceasing
employment with the Group.
Vesting of share options and transfer of ownership of resulting shares is determined by reference to the
following conditions:
Up to 50 per cent of the shares subject to the award will vest depending on the Group’s consolidated
Adjusted Earnings per Share (“Adjusted EPS”) determined in accordance with the table below.
132
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 9 Long Term Incentive Plans (continued)
Awards
Targets &
Thresholds
- continued
Adjusted Diluted EPS
Below 46 cent
46 cent
Between 46 cent and 50 cent
50 cent and above
Proportion of the Adjusted Diluted
EPS award vesting
0 per cent
30 per cent
30 per cent – 100 per cent pro rata
100 per cent
— Up to 50 per cent of the shares subject to an award will vest depending on the Group’s consolidated Free
Cash Flow Ratio (“FCFR”) over a three year performance period starting on the first day of the financial
year in which the award is granted, determined in accordance with the table below.
Average Annual FCFR
Below 50 per cent
50 per cent
Between 50 per cent and 100 per cent
100 per cent and above
Proportion of the FCFR award vesting
0 per cent
30 per cent
30 per cent- 100 per cent pro rata
100 per cent
Additional
Conditions
Additional conditions attaching to the vesting of the share options and transfer of ownership of resulting
shares include the following:
— as a general rule, the participant must remain in service throughout the performance period, except in
certain pre-determined circumstances;
— the Committee will specify a minimum retention period during which either vested options cannot be
exercised or if vested options can be exercised there will be a restriction on the disposal of the shares
acquired for the period. This period must be for a minimum of two years; and
— where a participant whose primary management responsibility is in respect of a business division of
the Group is granted an award, the Remuneration Committee at its discretion may determine that
a maximum of 40 per cent of an award will be subject to divisional financial or other performance
conditions related to the business division.
Under the terms of the 2015 LTIP Plan, awards will vest no earlier than the third anniversary of the award
date and in the case of options cannot be exercised later than the seventh anniversary of the award date.
An award will not vest unless the Committee is satisfied that the Group underlying financial performance
has shown a sustained improvement in the period since the award date. If this condition is met, the
extent of vesting for awards granted to employees of the Group following the adoption of the Plan will be
determined by the performance conditions set out above.
Transfer of
Ownership /
Vesting
Movement in the number of share options outstanding is as follows:
At 1 August
Vested (i)
Not awarded (i)
Forfeiture
Waived (ii)
Granted
At 31 July
Number of share
options
2021
Number of share
options
2020
761,442
(111,614)
(338,058)
(145,113)
-
1,564,890
1,731,547
1,088,139
(70,366)
(63,622)
(53,540)
(611,311)
472,142
761,442
(i) The amounts vested and not awarded relate to the 2019 awards as detailed on page 131. The total share options awarded
were 592,736 of which 111,614 have vested but none of which have yet been exercised.
(ii) These share options were voluntarily waived and have been accounted for as forfeited shares which resulted in a credit of
€39,000 in the Income Statement in the prior year.
133
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued)
9 Long Term Incentive Plans (continued)
Grant date
Expiry date
2 October 2018 (i)
17 July 2019 (ii)
8 July 2020 (iii)
24 September 2020 (iv)
18 January 2021 (v)
1 October 2025
1 October 2025
8 July 2027
24 September 2027
18 January 2028
Exercise
price
Number of
share options
2021
Number of
share options
2020
€0.01
€0.01
€0.01
€0.01
€0.01
36,364
-
222,246
1,373,246
99,691
225,861
313,335
222,246
-
-
1,731,547
761,442
(i) The fair value of the share options granted was €5.01 derived using the Black Scholes valuation model. The significant
inputs into the model were weighted average share price of €5.65 at the grant date, exercise price of €0.01 and dividend
yield of 3.7 per cent.
(ii) The fair value of the share options granted was €4.49 derived using the Black Scholes valuation model. The significant
inputs into the model were weighted average share price of €5.13 at the grant date, exercise price of €0.01 and dividend
yield of 4.1 per cent.
(iii) The fair value of the share options granted was €2.39 using the Black Scholes valuation model. The significant inputs into
the model were weighted average share price of €3.03 at the grant date, exercise price of €0.01 and dividend yield of 6.9
per cent.
(iv) The fair value of the share options granted was €2.45 using the Black Scholes valuation model. The significant inputs into
the model were weighted average share price of €3.09 at the grant date, exercise price of €0.01 and dividend yield of 6.8
per cent.
(v) The fair value of the share options granted was €2.60 using the Black Scholes valuation model. The significant inputs into
the model were weighted average share price of €3.24 at the grant date, exercise price of €0.01 and dividend yield of 6.5
per cent.
Cash based long term incentive plan
During the 2018 financial year a cash based Long Term Incentive Plan (‘LTIP’) for key employees was implemented. The LTIP
is intended to enable the retention and reward of key employees who are central to the achievement of the Group’s growth
strategy in the coming years. The implementation of the scheme commenced in 2018 when certain employees were granted
awards which have the characteristics of a long term cash bonus based on a maximum fixed amount with vesting of cash
bonuses based on the achievement of non-market performance conditions (Adjusted earnings per share, Free cash flow ratio,
Return on Investment Capital and Earnings before interest and tax) over a three-year period to 31 July 2020. The amount paid
under this scheme during 2021 was €0.9m. This amount was charged to the income statement within payroll costs in the years
ended 31 July 2018, 31 July 2019 and 31 July 2020 in line with the accounting policy on page 117. In order to calculate the fair
value of the obligation at the end of the term of the Plan, the Group has used the actual results for 2018, 2019 and 2020.
During the 2019 financial year a further cash based Long Term Incentive Plan for key employees was implemented with similar
terms to the 2017 LTIP. The performance conditions for this new scheme are evaluated over a three year period to 31 July
2021. The balance payable at the end of the three years is €0.3 million which has been charged to the income statement within
payroll costs in the years ending 31 July 2019, 31 July 2020 and 31 July 2021. This will be paid to the relevant employees in the
year ended 31 July 2022. In order to calculate the fair value of the obligation at the end of the term of the plan the Group has
used the actual results for 2019, 2020 and 2021.
134
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 9 Long Term Incentive Plans (continued)
Save As You Earn (‘SAYE’) scheme-UK and Ireland
The Save As You Earn (SAYE) scheme (‘the scheme’) is a share based savings plan which was approved by the shareholders on 27
November 2015. The details of awards under the plan are as follows:
Award
Conditions
Transfer of Ownership/
Vesting
A HMRC/Revenue approved plan under which regular monthly savings are made over a three year
period which can be used to fund the exercise of an option, the exercise price being discounted
by up to 20 per cent. The maximum permitted savings of £500/€500 per month across all on-
going sharesave contracts for any individual.
Conditions attaching to the transfer of ownership of the equity entitlements and vesting of the
share options include the following:
— in general, the employee must remain in service throughout the three year savings period;
— the option may not be granted if the result would be that the aggregate number of shares
issuable pursuant to options granted under the Scheme or under any other share award or
share option plan operated by the Group in the preceeding ten years exceeding 10 per cent of
the Group’s issued ordinary share capital at the date of grant; and
— the option may not be granted if the result would be that the aggregate number of shares
issuable pursuant to options granted under the Scheme or under any other share award or
share option plan operated by the Group in the preceeding three years exceeding 3 per cent
of the Group’s issued ordinary share capital at the date of grant.
Under the terms of the SAYE scheme, the eligible employee will have a choice at the end of
the three year period (representing the term of the scheme), to cash in their total savings or
alternatively purchase shares at the discounted price agreed at the time of entry into the SAYE
scheme. Ownership of shares will not transfer until this time.
The value of the SAYE scheme at 31 July 2021 is as follows:
At 1 August
Charge/ (credit)
At 31 July
Grant date
Expiry date
Option Price
Exercise price
1 June 2018
1 June 2019
1 June 2020
1 June 2021
1 June 2022
1 June 2023
€1.40
€1.42
€0.51
€4.20
€4.32
€2.02
2021
€’000
246
308
554
2020
€’000
595
(349)
246
Share
options No
of shares
2021
Share
options No
of shares
2020
39,629
66,555
96,768
63,395
1,823,169
1,740,655
1,929,353
1,900,818
135
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 9 Long Term Incentive Plans (continued)
The main variable inputs used to calculate the SAYE schemes are as follows:
Scheme 2018
Scheme 2019
Scheme 2020
€5.25
€4.20
3 years
28.9%
3.0%
€5.40
€4.32
3 years
27.9%
3.0%
€2.53
€2.02
3 years
30.4%
3.0%
2020
€’000
8,001
(4,743)
3,258
23,117
(6,154)
16,963
2,120
175
1,893
2,348
(696)
78
(2,660)
3,258
70
24
117
(311)
(100)
2021
€’000
9,513
77
9,590
47,822
(2,438)
45,384
5,673
589
2,799
4,434
(2,989)
90
(1,006)
9,590
(1,112)
-
20
(298)
(1,390)
Share price
Exercise price
Term
Share price volatility
Discount rate
10 Income tax
Current tax expense
Deferred tax charge/ (credit)
Income tax expense
Reconciliation of average effective tax rate to Irish corporate tax rate:
Profit before income tax
Share of profits of associates and joint venture
Taxation based on Irish corporate rate of 12.5 per cent
Effect of deferred tax rate change
Expenses not deductible for tax purposes
Higher rates of tax on overseas earnings
Changes in estimate/adjustment in respect of previous periods:
— Current tax
— Deferred tax
Other
Movement on deferred tax (liability)/asset recognised directly in the
Consolidated Statement of Comprehensive Income (Note 24):
Relating to Group employee benefit schemes
Property, plant and equipment
Foreign exchange
Hedge related
Recognised in the Consolidated Statement of Comprehensive Income
136
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 10 Income tax (continued)
The effective tax rate is 18.5% compared to 18.5% in the prior year and is calculated as follows:
Effective tax rate reconciliation
Profit before exceptional items and income tax
Add-back: amortisation of non-ERP related intangible assets (Note 15)
Add-back: tax on associates
Total adjusted profit before tax
Income tax expense before exceptional items
Add-back: tax (expense)/ credit on non-ERP amortisation
Add-back: tax on associates
Total adjusted income tax expense
2021
€’000
46,719
8,577
703
55,999
9,712
(55)
703
10,360
2020
€’000
29,622
9,381
1,299
40,302
4,519
1,638
1,299
7,456
Effective tax rate
18.5%
18.5%
A deferred tax asset of €6.2 million (2020: €6.9 million) has been recognised on the basis that the realisation of the related tax
benefit through future taxable profits is probable. This includes deferred tax assets which are recognised for tax losses carried
forward to the extent that realisation of the related tax benefit through future taxable profits is probable.
The total deductible temporary differences which have not been recognised are €34.0 million (2020: €25.1 million).
Deferred tax has not been recognised in respect of withholding taxes and other taxes that would be payable on the unremitted
earnings of foreign subsidiaries, as the Group is in a position to control the timing of reversal of the temporary differences and
it is probable that the temporary differences will not reverse in the foreseeable future. As the Group can rely on participation
exemptions and tax credits that would be available in the context of the Group’s investments in subsidiaries in the majority of
the jurisdictions in which the Group operates, the aggregate amount of temporary differences in respect of which deferred tax
liabilities have not been recognised would not be material.
137
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued)
11 Earnings per share
Basic earnings per share
2021
€’000
2020
€’000
Profit for the financial year attributable to equity shareholders
38,232
19,859
‘000
‘000
Weighted average number of ordinary shares for the year
125,595
125,595
Basic earnings per share
Diluted earnings per share
Cent
Cent
30.44
15.81
2021
€’000
2020
€’000
Profit for the financial year attributable to equity shareholders
38,232
19,859
Weighted average number of ordinary shares used in basic calculation
Impact of shares with a dilutive effect
Impact of the SAYE scheme (Note 9) with a dilutive effect
Weighted average number of ordinary shares (diluted) for the year
Diluted earnings per share
‘000
‘000
125,595
125,595
1,019
1,929
373
1,901
128,543
127,869
Cent
Cent
29.74
15.53
138
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 11 Earnings per share (continued)
Adjusted basic earnings per share
Weighted average number of ordinary shares for the year
125,595
125,595
2021
‘000
2020
‘000
Profit for the financial year
Adjustments:
Amortisation of non-ERP related intangible assets (Note 15)
Tax on amortisation of non-ERP related intangible assets
Exceptional items, net of tax
Adjusted earnings
Adjusted basic earnings per share
Adjusted diluted earnings per share
Weighted average number of ordinary shares used in basic calculation
Impact of shares with a dilutive effect
Impact of the SAYE scheme (Note 9) a dilutive effect
Weighted average number of ordinary shares (diluted) for the year
Adjusted earnings (as above)
Adjusted diluted earnings per share
2021
€’000
2020
€’000
38,232
19,859
8,577
55
(1,225)
45,639
9,381
(1,638)
5,244
32,846
Cent
Cent
36.34
26.15
2021
‘000
2020
‘000
125,595
125,595
1,019
1,929
373
1,901
128,543
127,869
2021
€’000
2020
€’000
45,639
32,846
Cent
Cent
35.50
25.69
139
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 12 Property, plant and equipment
Cost
At 1 August 2020
Additions
Transfers from under construction
Arising on acquisition (Note 33)
Arising on disposal of subsidiary
Disposals
Translation adjustments
At 31 July 2021
Accumulated depreciation
At 1 August 2020
Depreciation charge for year
Arising on disposal of subsidiary
Disposals
Translation adjustments
At 31 July 2021
Net book amounts
At 31 July 2021
Land and
buildings
€'000
Plant and
machinery
€'000
Motor
vehicles
€'000
Assets under
construction
€'000
Total
€'000
94,157
75,229
1,051
1,212
-
(7,436)
(1,624)
2,179
89,539
17,874
2,155
(2,716)
(684)
585
17,214
2,862
4,104
393
(1,019)
(3,177)
2,664
81,056
49,482
5,005
(577)
(1,983)
1,589
53,516
6,885
593
-
88
(1,135)
(329)
139
6,241
4,583
1,016
(1,088)
(313)
120
4,318
5,031
2,868
(5,316)
-
-
-
157
181,302
7,374
-
481
(9,590)
(5,130)
5,139
2,740
179,576
-
-
-
-
-
-
71,939
8,176
(4,381)
(2,980)
2,294
75,048
72,325
27,540
1,923
2,740
104,528
At 31 July 2020
76,283
25,747
2,302
5,031
109,363
140
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 12 Property, plant and equipment (continued)
Cost
At 1 August 2019
Reclassification on IFRS 16 adoption
Additions
Leased assets purchased
Disposals
Translation adjustments
At 31 July 2020
Accumulated depreciation
At 1 August 2019
Depreciation charge for year
Disposals
Translation adjustments
At 31 July 2020
Net book amounts
At 31 July 2020
At 31 July 2019
13 Leases
Land and
buildings
€’000
Plant and
machinery
€’000
Motor
vehicles
€’000
Assets under
construction
€’000
Total
€’000
94,152
71,263
(18)
1,322
-
(222)
(1,077)
94,157
(729)
5,850
-
(937)
(218)
75,229
15,880
44,859
2,051
(199)
142
5,255
(777)
145
17,874
49,482
7,721
(483)
1,312
208
(1,233)
(640)
6,885
3,986
1,258
(992)
331
4,583
-
-
5,363
-
-
(332)
5,031
-
-
-
-
-
173,136
(1,230)
13,847
208
(2,392)
(2,267)
181,302
64,725
8,564
(1,968)
618
71,939
76,283
25,747
2,302
5,031
109,363
78,272
26,404
3,735
-
108,411
With effect from 1 August 2019, IFRS 16 ‘Leases’ introduced a single lessee accounting model, and the majority of all lease
agreements now result in the recognition of a right of use asset and a lease liability on the balance sheet. The income
statement charge in relation to all leases will now comprise a depreciation element relating to the right of use asset and also a
financing charge relating to the lease liability.
The movement in the Group’s right-of-use leased assets during the period is as follows:
At 1 August
Arising on adoption of IFRS 16 at 1 August 2019
Reclassification of assets held under IAS 17 finance leases on adoption of IFRS 16
Additions in period
Arising on acquisition (Note 33)
Termination of leases
Leased assets purchased and transferred to property, plant and equipment
Depreciation charge
Translation adjustments
Right-of-use leased assets at 31 July
2021
€’000
39,824
-
-
14,772
189
(821)
-
2020
€’000
-
39,667
1,230
9,499
-
(43)
(208)
(10,913)
(10,184)
2,126
45,177
(137)
39,824
141
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 13 Leases (continued)
Right of use assets include land and buildings, vehicles, machinery and IT software, and is comprised as:
At 31 July 2021
Depreciation expense
Right-of-use leased assets
At 31 July 2020
Land and
buildings
€’000
Plant and
machinery
€’000
Motor
Vehicles
€’000
IT software
Total
€’000
€’000
4,867
31,027
2,781
6,921
3,242
7,229
23
-
10,913
45,177
Land and
buildings
€’000
Plant and
machinery
€’000
Motor
Vehicles
€’000
IT software
Total
€’000
€’000
Depreciation expense
Right-of-use leased assets
3,386
25,565
4,259
8,771
2,520
5,465
19
23
10,184
39,824
The amounts recognised in the Consolidated Income Statement include:
2021
€’000
10,913
1,829
3,758
2021
€’000
40,736
-
189
14,772
(785)
2020
€’000
10,184
1,766
4,277
2020
€’000
-
40,577
-
9,499
(43)
(12,553)
(11,422)
1,829
1,948
46,136
9,910
36,226
46,136
1,766
359
40,736
8,775
31,961
40,736
Depreciation expense on right-of-use assets (Note 5)
Interest expense on lease liabilities (Note 4)
Expense relating to short-term leases and leases of low-value assets (Note 5)
The movement in the Group’s related lease liabilities during the period is as follows:
At 1 August
Arising on adoption of IFRS 16 at 1 August 2019
Arising on acquisition
New leases arising in the period
Termination of leases
Lease payments
Interest on lease liabilities
Translation adjustments
Lease liabilities at 31 July
Current
Non-current
Lease liabilities at 31 July
See Note 23 for contractual cash flows relating to lease liabilities.
142
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 14 Investment properties and properties held for sale
At 1 August
Additions
Disposal of held-for-sale properties (i)
Fair value adjustment (ii)
At 31 July
2021
Properties
held for sale
€’000
2021
Investment
properties
€’000
2021
Total
2020
Total
€’000
€’000
27,100
2,270
29,370
28,356
-
(2,900)
-
-
-
-
-
(2,900)
-
64
-
950
24,200
2,270
26,470
29,370
(i)
In the current year, held-for-sale properties were disposed and proceeds of €2.9 million were received.
(ii) Measurement of fair value
Properties held for sale
Properties held for sale are carried at the lower of their carrying value and fair value less any costs to sell. Where carried at fair
value, it is regarded as a Level 3 fair value.
At 31 July 2021 and 2020 the valuation of the Group’s Cork properties and investment properties was determined by the
Directors using a market approach with reference to local knowledge and judgement supported by the consideration agreed
with third parties for the Cork property transaction announced to the market on 9 July 2019. The conditional agreement is
subject to the satisfaction of a number of conditions necessary to realise the full disposal proceeds including the granting of
various permissions and approvals and the relocation of the Group’s existing operating business at an economically viable cost
to an alternative location.
At 31 July 2020 the valuation of the Group’s other properties held for sale was also determined by the Directors using a market
approach with reference to local knowledge and judgement supported by the consideration agreed with a third parties for the
properties which were completed in the 2021 financial year.
Investment properties
Investment property is carried at fair value and regarded as a Level 3 fair value.
Valuations have been based on a market approach and have been undertaken having regard to comparable market
transactions between informed market participants.
The following is a summary of valuation methods used in relation to the Group’s held for sale and investment properties which
are carried at fair value:
Properties held for sale
Investment properties
Total
2021
€’000
2020
€’000
Offers from third parties
24,200
27,100
Comparable market transactions: level 3
-
-
Total
24,200
27,100
2021
€’000
-
2,270
2,270
2020
€’000
-
2,270
2,270
2021
€’000
2020
€’000
24,200
2,270
26,470
27,100
2,270
29,370
143
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 14 Investment properties and properties held for sale (continued)
(iii) Fair value measurements using significant unobservable inputs (level 3)
The below table outlines the changes in level 3 investment properties for fair value measurement:
Properties held
for sale
Investment
properties
Total
2021
€’000
2020
€’000
2021
€’000
2020
€’000
2021
€’000
2020
€’000
At 1 August
Additions
Transfers from level 2
Disposal of held-for-sale properties
Held for sale reclassification
Fair value adjustment
Total
27,100
24,135
2,270
-
-
(2,900)
64
-
-
-
-
2,901
-
-
-
-
-
-
24,200
27,100
2,270
-
-
4,221
(2,901)
950
2,270
-
(2,900)
29,370
24,135
-
-
-
-
64
4,221
-
-
950
26,470
29,370
Valuation Techniques and Significant Unobservable Inputs
The following tables show the valuation techniques used in measuring the fair value of properties held for sale and investment
properties and the significant unobservable inputs used. Where market transactions are present, the comparable market
transaction method is used for land and buildings held for sale or capital appreciation.
Properties held for sale – valuation technique & unobservable inputs
Valuation technique
Unobservable inputs
Offers from third parties:
This valuation is used for properties that have
formal offer documentation received by the Group
from third parties intending to purchase with a
reasonable possibility of a sale being concluded.
One offer for 31 acres of
land at South Docklands
in Cork for a cash
consideration of up to
€1.5 million an acre
Investment Properties – valuation technique & unobservable inputs
Valuation technique
Unobservable inputs
Comparable market transactions
Comparable land 211 acres
at €50,000 an acre
The value is based on comparable market transactions
after discussion with independent agents and/or with
reference to other information sources.
Comparable market transactions
The value is based on comparable market transactions
after discussion with independent agents and/or with
reference to other information sources.
Comparable land 44 acres
at €50,000 an acre
Inter-relationship between key
unobservable inputs and fair
value measurement
The estimated fair value would
increase/(decrease) if:
Final offer price increased /
(decreased)
Inter-relationship between key
unobservable inputs and fair
value measurement
The estimated fair value would
increase/ (decrease) if: Comparable
market prices per square acre were
higher / (lower).
The estimated fair value would
increase/ (decrease) if: Comparable
market prices per square acre were
higher / (lower).
144
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 15 Goodwill and intangible assets
Goodwill Brand (ii) Customer
related
€’000
€’000
€’000
Intangible assets
Developed
Technology
€’000
Computer
related
€’000
ERP (i)
Related
€’000
Total
€’000
Cost
At 1 August 2020
Additions
Arising on acquisition (Note 33)
Arising on disposal of subsidiary
Translation adjustment
At 31 July 2021
Accumulated Amortisation
At 1 August 2020
Amortisation
Arising on disposal of subsidiary
Translation adjustment
At 31 July 2021
Net book value
At 31 July 2021
162,681
9,542
82,273
-
4,390
(2,017)
5,968
17
1,516
(547)
303
-
3,645
(1,322)
3,367
19,677
1,707
113
-
478
10,396
24,885
309,454
3,511
4,838
10,073
52
(179)
538
-
-
9,716
(4,065)
186
10,840
171,022
10,831
87,963
21,975
14,318
29,909
336,018
-
-
-
-
-
2,735
41,513
506
(159)
127
3,810
(386)
1,858
5,047
2,199
-
262
5,118
2,062
(169)
273
19,092
3,585
-
100
73,505
12,162
(714)
2,620
3,209
46,795
7,508
7,284
22,777
87,573
171,022
7,622
41,168
14,467
7,034
7,132
248,445
At 31 July 2020
162,681
6,807
40,760
14,630
5,278
5,793
235,949
145
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 15 Goodwill and intangible assets (continued)
Goodwill Brand (ii) Customer
related
€’000
€’000
€’000
Intangible assets
Developed
Technology
€’000
Computer
related
€’000
ERP (i)
Related
€’000
Total
€’000
Cost
At 1 August 2019
Additions
Retirement of brand
Write-off (Note 3)
Translation adjustment
At 31 July 2020
Accumulated Amortisation
At 1 August 2019
Amortisation
Retirement of brand
Translation adjustment
At 31 July 2020
Net book value
At 31 July 2020
176,292
26,276
83,166
-
-
-
289
(8,962)
(6,853)
-
-
-
(13,611)
(1,208)
(893)
162,681
9,542
82,273
-
-
-
-
-
10,180
37,686
1,376
3,910
(8,962)
141
-
(83)
2,735
41,513
23,497
1,094
-
-
(4,914)
19,677
3,490
2,540
-
(983)
5,047
8,491
1,968
24,512
342,234
333
3,684
-
-
-
-
(8,962)
(6,853)
(63)
40
(20,649)
10,396
24,885
309,454
3,589
1,555
-
(26)
16,204
2,920
-
(32)
71,149
12,301
(8,962)
(983)
5,118
19,092
73,505
162,681
6,807
40,760
14,630
5,278
5,793
235,949
At 31 July 2019
176,292
16,096
45,480
20,007
4,902
8,308
271,085
Material individual intangible assets are as follows:
Customer Lists with a carrying value of €7.9 million, €4.1 million and €3.6 million respectively that have remaining residual lives
of 11 years, 8 years and 10 years respectively. Developed technologies with a carrying value of €5.8 million that have remaining
residual lives of 6 years.
(i) ERP related amortisation is charged within operating costs in the Consolidated Income Statement.
(ii) A rebranding of the Group’s Continental European business was completed during the prior year resulting in a write down
of the carrying value of the respective brands. In addition legacy brands within the Ireland/UK segment attributable to bolt
on acquisitions were also written down.
(iii) Developed technology relates to acquired accumulated knowledge and applied know-how.
146
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 15 Goodwill and intangible assets (continued)
Cash generating units (CGUs)
Goodwill acquired through business combination activity has been allocated to cash-generating units (‘CGUs’) that are
expected to benefit from the business combination. The carrying amount of goodwill allocated to cash generating units across
the Group and the key assumptions used in the impairment calculations are summarised as follows:
Pre-tax
discount
rate
Pre-tax
discount
rate
Projection
Period
EBIT Growth
rate in Year
2 & 3
Terminal Value
Growth Rate
2021
2020
For financial years 2021 and 2020
Goodwill
carrying
amount
2021
€’000
Goodwill
carrying
amount
2020
€’000
Agronomy – UK
Amenity
Fertiliser
Latin America
Poland
Belgium
Romania
8.6%
8.6%
8.6%
13.5%
8.7%
N/a
10.3%
8.9%
8.9%
8.9%
13.7%
9.2%
9.8%
10.6%
3 years
3 years
3 years
3 years
3 years
3 years
3 years
2%
2%
2%
5%
4%
4%
4%
2%
2%
2%
2%
2%
2%
2%
80,532
13,512
14,528
32,444
8,146
-
21,860
75,875
8,446
13,687
32,029
8,455
2,017
22,172
171,022
162,681
Impairment testing of goodwill
The recoverable amounts of cash generating units (‘CGUs’) are based on value in use computations. The cash flow forecasts
used for 2022 (Year 1) are extracted from the 2022 budget document formally approved by the Board. The cash flow
projections are based on current operating results of the individual CGUs and a conservative assumption regarding future
organic growth. For the purposes of the calculation of value in use, the cash flows are projected over a three-year period with
additional cash flows in subsequent years calculated using a terminal value methodology.
The cash flows are discounted using appropriate risk adjusted discount rates as disclosed in the table above. The range of
discount rates applied ranged from 8.6% to 13.5%. Any significant adverse change in the expected future operational results
and cash flows may result in the value in use being less than the carrying value of a CGU and would require that the carrying
value of the CGU be impaired and stated at the greater of the value in use or the fair value less costs to sell of the CGU.
However, the results of the impairment testing undertaken in the current year indicates sufficient headroom.
Key assumptions include management’s estimates of future profitability based on sales and margin, growth rates and discount rates.
These assumptions are based on management’s past experience. Profitability is based on the Group’s budgets and broadly
assumes that historic investment patterns will be maintained.
Sensitivity Analysis
— If the Group experienced no growth in years 2 and 3, there would have been no impairment charge across any CGU
— If the Group increased the pre-tax discount rate by one percentage point, there would have been no impairment charge
across any CGU
147
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 16 Investments in associates and joint venture
At 1 August
Share of profits after tax, before exceptional items (Note 7)
Share of exceptional items, net of tax (Note 3)
Dividends received
Share of other comprehensive income / (expense)
Disposal of interest in Ferrari Zagatto (Note 3)
Disposal of equity investment
Translation adjustment
At 31 July
2021
€’000
40,597
2,841
(403)
(4,468)
2,848
-
-
1,359
42,774
2020
€’000
47,140
6,154
-
(5,776)
(5,630)
(1,308)
(113)
130
40,597
On 31 July 2020, the Group disposed of its 20% shareholding in Ferrari Zagatto E Cia Ltda, a Brazilian based agronomy services
and crop input distribution business.
Split as follows:
Total associates
Total joint venture
2021
€’000
2020
€’000
24,178
18,596
42,774
21,194
19,403
40,597
The information below reflects the amounts presented in the financial statements of the associates and the joint venture (and
not Origin’s share of those amounts) adjusted for differences in accounting policies between the Group and those applied by
its associates and joint venture.
Associates and joint venture income statement (100%):
Revenue
Other comprehensive income / (expense)
Dividends received by Group
Exchange differences arising on consolidation
The investment in associates and joint venture as at 31 July 2021 is analysed as follows:
2021
€’000
2020
€’000
714,515
5,696
(4,468)
1,359
672,840
(11,260)
(5,776)
130
Non-current assets
Current assets
Non-current liabilities
Current liabilities
At 31 July 2021
148
Associates
€’000
Joint venture
€’000
Total
€’000
11,469
40,237
(5,683)
(21,845)
24,178
12,518
28,118
(6,575)
(15,465)
18,596
23,987
68,355
(12,258)
(37,310)
42,774
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 16 Investments in associates and joint venture (continued)
The investment in associates and joint venture as at 31 July 2020 is analysed as follows:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
At 31 July 2020
Associates
€’000
Joint venture
€’000
Total
€’000
9,151
29,814
(5,310)
(12,461)
21,194
12,915
36,578
(6,160)
(23,930)
19,403
22,066
66,392
(11,470)
(36,391)
40,597
The amounts included in these financial statements in respect of the income and expenses of associates and the joint venture
are taken from their latest financial statements prepared up to their respective year ends together with management accounts
for the intervening periods to the Group’s year end.
17 Other financial assets
At 1 August
Repayments during the year
Translation adjustments
At 31 July
18 Inventory
Raw materials
Finished goods
Consumable stores
19 Trade and other receivables
Trade receivables (i)
Amounts due from related parties (Note 32)
Value added tax
Other receivables
Prepayments and accrued income
(i)
Includes rebates from suppliers
2021
€’000
2020
€’000
575
(56)
33
552
607
(42)
10
575
2021
€’000
2020
€’000
74,054
137,267
2,900
52,802
134,734
1,239
214,221
188,775
2021
€’000
2020
€’000
381,610
30,013
3,450
5,867
13,674
434,614
362,108
26,715
1,911
4,399
11,724
406,857
149
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 20 Trade and other payables
Trade payables (i)
Accruals and other payables
Deposits received in advance for assets-for-sale
Amounts due to other related parties (Note 32)
Income tax and social insurance
Value added tax
2021
€’000
2020
€’000
510,533
69,910
3,000
12,691
8,960
40,830
645,924
478,918
58,614
-
9,002
8,168
35,480
590,182
(i) Certain Origin Enterprises plc subsidiary suppliers factor their trade payables from Origin Enterprises plc subsidiaries
with third parties through supplier finance arrangements. At 31 July 2021 approximately €43.5 million (2020: €17.9 million)
of the Origin Enterprises plc trade payables were known to have been sold onward. Origin Enterprises plc continues to
recognise these liabilities as trade payables and will settle the liabilities in line with the original payment terms of the
related invoices.
21 Cash and cash equivalents
In accordance with IAS 7, ‘Cash Flow Statements’, cash and cash equivalents comprise cash balances held for the purposes
of meeting short-term cash commitments and investments which are readily convertible to a known amount of cash and
are subject to an insignificant risk of changes in value. Where investments are categorised as cash equivalents, the related
balances have a maturity of three months or less from the date of acquisition. Bank overdrafts are classified as current
interest-bearing borrowings in the Consolidated Statement of Financial Position.
Cash at bank and in hand
Bank overdrafts (Note 22)
Included in the Consolidated Statement of Cash Flows
2021
€’000
2020
€’000
168,660
(12,882)
155,778
172,309
(19,633)
152,676
Cash at bank earns interest at floating rates based on daily deposit bank rates.
Short-term deposits are made for varying periods of between one day and three months depending on the immediate cash
requirements of the Group and earn interest at the respective short-term deposit rates.
150
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 22 Interest-bearing loans and borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings, which are
measured at amortised cost.
Included in non-current liabilities:
Bank loans
Leases liabilities
Non-current interest-bearing loans and borrowings
Included in current liabilities:
Bank loans
Bank overdrafts
Leases liabilities
Current interest-bearing loans and borrowings
Total interest-bearing loans and borrowings
Analysis of net debt
Cash
Overdraft
Cash and cash equivalents
Loans
Net debt
Lease liabilities
Net debt including lease creditors
2021
€’000
2020
€’000
140,184
36,226
176,410
205,889
31,961
237,850
30,000
12,882
9,910
52,792
-
19,633
8,775
28,408
229,202
266,258
2020
Cash flow
€’000
€’000
Non-cash
movement
€’000
Translation
adjustment
€’000
2021
€’000
172,309
(19,633)
152,676
(205,889)
(53,213)
(40,736)
(93,949)
(4,735)
6,981
2,246
42,400
44,646
12,553
57,199
-
-
-
1,086
(230)
168,660
(12,882)
856
155,778
(847)
(5,848)
(170,184)
(847)
(15,816)
(16,663)
(4,992)
(2,137)
(7,129)
(14,406)
(46,136)
(60,542)
151
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 22 Interest-bearing loans and borrowings (continued)
Analysis of net debt
Cash
Overdraft
Cash and cash equivalents
Loans
Net debt
Lease liabilities
2019
€’000
IFRS 16
transition
€’000
111,830
(23,945)
87,885
(162,571)
(74,686)
-
-
-
-
-
(910)
(39,667)
Net debt including lease creditors
(75,596)
(39,667)
Cash flow
€’000
62,709
(336)
62,373
(40,497)
21,876
11,422
33,298
Non-cash
movement
€’000
Translation
adjustment
€’000
2020
€’000
-
-
-
(2,230)
4,648
172,309
(19,633)
2,418
152,676
(609)
(2,212)
(205,889)
(609)
(11,222)
(11,831)
206
(359)
(153)
(53,213)
(40,736)
(93,949)
Opening lease liabilities as at 31 July 2019 relate to finance lease obligations as classified under IAS 17.
Currency
Nominal
value
€’000
Carrying
amount
€’000
The details of outstanding loans are as follows:
2021
Unsecured loan facility:
— term facility maturing in June 2025
— term facility maturing in June 2025
— term facility maturing in June 2025
— term facility maturing in June 2024
— term facility maturing in June 2024
— term facility maturing in June 2024
— term facility maturing in September 2021
2020
Unsecured loan facility:
— term facility maturing in June 2024
— term facility maturing in June 2024
— term facility maturing in June 2024
— term facility maturing in September 2021
EUR
STG
PLN
EUR
STG
PLN
EUR
EUR
STG
PLN
EUR
28,400
88,531
8,145
3,601
11,222
1,033
30,000
28,249
88,061
8,102
3,581
11,164
1,027
30,000
170,932
170,184
57,000
56,615
110,558
109,812
9,526
30,000
9,462
30,000
207,084
205,889
At 31 July 2021, the average interest rate being paid on the Group’s borrowings was 1.38 per cent (2020: 1.58 per cent).
At 31 July 2021, the Group had unsecured committed banking facilities of €430 million (2020: €430 million), of which €30 million
will expire in September 2021, €100 million will expire in May 2022, €34m will expire in June 2024 and €266 million will expire in
June 2025. Subsequent to year end, the Group extended the €100 million facility due to expire in May 2022 to June 2025.
152
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 22 Interest-bearing loans and borrowings (continued)
Repayment schedule – loans and overdrafts
Within one year
Between one and five years
Loans and overdrafts
Repayment schedule – lease liabilities and finance leases
Within one year
Greater than one year
Lease liabilities and finance leases
Guarantees
2021
€’000
2020
€’000
42,882
140,184
183,066
19,633
205,889
225,522
9,910
36,226
46,136
8,775
31,961
40,736
Group borrowings are secured by guarantees from Origin Enterprises plc and certain principal operational entities of
the Group.
23 Financial instruments and financial risk
The following table outlines the financial assets and liabilities held by the Group at the balance sheet date:
Fair value
hierarchy
Financial
Instruments
at fair value
through other
comprehensive
income
€’000
Financial
Instruments
at fair value
through
income
statement
€’000
Financial
assets/
(liabilities) at
amortised
cost
Fair value
Total
carrying
value
€’000
€’000
€’000
Level 2
Level 3
Level 2
Level 3
Level 2
-
-
224
-
224
-
-
-
-
-
(24,138)
(1,059)
(25,197)
-
-
-
-
-
-
552
552
552
417,490
417,490
417,490
-
224
224
168,660
168,660
168,660
586,702
586,926
586,926
(596,134)
(596,134)
(596,134)
(1,695)
-
(1,695)
(1,695)
-
-
-
-
-
(12,882)
(12,882)
(12,882)
(170,184)
(170,184)
(170,184)
(46,136)
(46,136)
(46,136)
-
-
(24,138)
(24,138)
(1,059)
(1,059)
(1,695)
(825,336)
(852,228)
(852,228)
2021
Other financial assets
Trade and other receivables
Derivative financial assets
Cash and cash equivalents
Total financial assets
Trade and other payables
Contingent consideration
Bank overdrafts
Bank borrowings
Lease liabilities
Put option liability
Derivative financial liabilities
Total financial liabilities
153
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 23 Financial instruments and financial risk (continued)
Fair value
hierarchy
Financial
Instruments
at fair value
through other
comprehensive
income
€’000
Financial
Instruments
at fair value
through
income
statement
€’000
Financial
assets/
(liabilities) at
amortised
cost
Fair value
Total
carrying
value
€’000
€’000
€’000
Level 2
Level 3
Level 2
Level 3
Level 2
-
-
1,460
-
1,460
-
-
-
-
-
(22,073)
(3,730)
(25,803)
-
-
-
-
-
-
(3,404)
-
-
-
-
-
(3,404)
575
393,222
-
172,309
566,106
(546,534)
-
(19,633)
(205,889)
(40,736)
-
-
(812,792)
575
393,222
1,460
172,309
567,566
(546,534)
(3,404)
(19,633)
(205,889)
(40,736)
(22,073)
(3,730)
(841,999)
575
393,222
1,460
172,309
567,566
(546,534)
(3,404)
(19,633)
(205,889)
(40,736)
(22,073)
(3,730)
(841,999)
2020
Other financial assets
Trade and other receivables
Derivative financial assets
Cash and cash equivalents
Total financial assets
Trade and other payables
Contingent consideration
Bank overdrafts
Bank borrowings
Lease liabilities
Put option liability
Derivative financial liabilities
Total financial liabilities
Estimation of fair values
Set out below are the major methods and assumptions used in estimating the fair values of the financial assets and liabilities
disclosed in the preceding table.
Trade and other receivables/payables
For any receivables and payables with a remaining life of less than six months or demand balances, the carrying value less
impairment provision, where appropriate, is deemed to reflect fair value. All other receivables and payables are discounted to
fair value on initial recognition.
Contingent consideration
The fair value of the contingent consideration has been determined based on an agreed earnings before interest and tax based
formula which includes an expectation of future trading performance (‘EBIT’). A reconciliation from opening to closing balance
has been included in Note 25.
Cash and cash equivalents including short-term bank deposits and restricted cash
For short-term bank deposits and cash and cash equivalents, all of which have a remaining maturity of less than three months,
the carrying amount is deemed to reflect fair value.
Derivatives - forward foreign exchange contracts
Forward foreign exchange contracts are marked to market using quoted forward exchange rates at the reporting date.
The absolute principal amount of the outstanding forward foreign exchange contracts at 31 July 2021 was €64,023,000 (2020:
€82,888,000).
The hedged highly probable forecast transactions denominated in foreign currency are expected to occur at various dates
during the next 12 months. Gains and losses recognised in the hedging reserve in equity on forward foreign exchange contracts
as of 31 July 2021 are recognised in the Consolidated Income Statement in the period or periods during which the hedged
transaction affects the Consolidated Income Statement. This is generally within 12 months of the end of the reporting period.
154
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 23 Financial instruments and financial risk
Derivatives – interest rate swaps
The fair value of interest rate swaps is calculated as the present value of the expected future cash flows based on observable
yield curves.
The notional principal amounts of the outstanding interest rate swap contracts at 31 July 2021 were €94,579,000 (2020:
€102,459,000).
At 31 July 2021, the average fixed interest rate on the swap portfolio was 0.67% per cent. The main floating rates are EURIBOR
and LIBOR. Gains and losses recognised in the hedging reserve in equity on interest rate swap contracts as of 31 July 2021 will
be continually released to the Consolidated Income Statement within finance cost until the maturity of the relevant interest
rate swap.
Interest-bearing loans and borrowings
For interest-bearing loans and borrowings with a contractual repricing date of less than six months, the nominal amount is
deemed to reflect fair value. For loans with repricing dates of greater than six months, the fair value is calculated based on the
present value of the expected future principal and interest cash flows discounted at interest rates effective at the year end
date and adjusted for movements in credit spreads.
Finance lease liabilities
Fair value is based on the present value of future cash flows discounted at market rates at the year end date.
Put option liability
The fair value of the put option liability has been determined based on an agreed earnings before interest and tax based
formula that is not capped which includes an expectation of future trading performance (‘EBIT’) and timing of when the
options are expected to be exercised, discounted to present day value using an appropriate discount rate. The valuation
technique applied to fair value the put option liability was the income approach. A reconciliation from opening to closing
balance has been included in Note 26.
Fair value hierarchy
The tables at the beginning of this note summarise the financial instruments carried at fair value, by valuation method, as of
31 July 2021. Fair value classification levels have been assigned to the Group’s financial instruments carried at fair value. The
different levels assigned are defined as follows:
Level 1: Price quoted in active markets
Level 2: Valuation techniques based on observable market data
Level 3: Valuation techniques based on unobservable input
Risk exposures
The Group’s international operations expose it to different financial risks that include currency risk, credit risk, liquidity risk,
commodity price risk and interest rate risk. The Group has a risk management programme in place which seeks to limit the
impact of these risks on the financial performance of the Group. The Board has determined the policies for managing these
risks. It is the policy of the Board to manage these risks in a non-speculative manner.
The Group has exposure to the following risks from its use of financial instruments:
— Credit risk
— Liquidity risk
— Market risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and
processes for measuring and managing the risk. Further quantitative disclosures are included throughout this note.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework.
155
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 23 Financial instruments and financial risk (continued)
Risk exposures (continued)
The Group has established an internal audit function under the direction of the Audit and Risk Committee. Internal audit
undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to
the Audit and Risk Committee.
The Board, through its Audit and Risk Committee, has reviewed the process for identifying and evaluating the significant
risks affecting the business and the policies and procedures by which these risks will be managed effectively. The Board
has embedded these structures and procedures throughout the Group and considers these to be a robust and efficient
mechanism for creating a culture of risk awareness throughout the business.
Credit risk
Exposure to credit risk
Credit risk arises from credit to customers arising on outstanding receivables and outstanding transactions as well as cash and
cash equivalents, derivative financial instruments and deposits with banks and financial institutions. The Group uses credit
insurance where appropriate to limit the exposure.
Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. There is no
concentration of credit risk by dependence on individual customers or geographically. While a high proportion of receivables
are located in the UK and Continental Europe, the risk is mitigated due to the geographic spread throughout, rather than an
isolated geographic region.
The Group has detailed procedures for monitoring and managing the credit risk related to its trade receivables based on
experience, customers’ track record and historic default rates. Individual risk limits are generally set by customer and risk
is only accepted above such limits in defined circumstances. The utilisation of credit limits is regularly monitored and credit
insurance is used where appropriate. Impairment provisions are used to record impairment losses unless the Group is satisfied
that no recovery of the amount owing is possible. At that point the amount is considered irrecoverable and is written off
directly against the trade receivable. The Group establishes an allowance for impairment that represents its estimate of
expected credit losses in respect of trade and other receivables and other financial assets.
Cash and short-term bank deposits and restricted cash
Group surplus cash is invested in the form of short-term bank deposits with financial institutions. Deposit terms are for a
maximum of three months. Cash and short-term deposits are invested with institutions within Origin’s bank financing syndicate,
with limits on amounts held with individual banks or institutions at any one time.
Exposure to credit risk
The carrying amount of financial assets, net of impairment provisions represents the Group’s maximum credit exposure. The
maximum exposure to credit risk at year end was as follows:
Other financial assets
Trade and other receivables
Cash and cash equivalents
Derivative financial assets
156
Carrying
amount
2021
€’000
Carrying
Amount
2020
€’000
552
417,490
168,660
224
575
393,222
172,309
1,460
586,926
567,566
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 23 Financial instruments and financial risk (continued)
Trade receivables
The Group has detailed procedures for monitoring and managing the credit risk related to its trade receivables. Trade
receivables are monitored by geographic region and by largest customers. The maximum exposure to credit risk for trade
receivables at the reporting date by geographic region based on location of customers was as follows:
Ireland and United Kingdom
Continental Europe
Latin America
Carrying
amount
2021
€’000
138,449
222,531
20,630
381,610
Carrying
amount
2020
€’000
111,453
234,679
15,976
362,108
At 31 July 2021 trade receivables of €315,834,000 (2020: €304,415,000) were not past due and were not impaired. These
receivable balances relate to customers for which there is no recent history of default. The following table details the ageing of
gross trade receivables, and the related loss allowances in respect of specific amounts expected to be irrecoverable;
Not past due
Past due 0-30 days
Past due 31-120 days
Past due +121 days
At 31 July
2021
2020
Gross
€'000
Impairment
€'000
Gross
€'000
Impairment
€'000
317,598
48,307
13,237
30,216
409,358
(1,764)
(2,500)
(625)
(22,859)
(27,748)
306,073
32,876
16,223
29,919
385,091
(1,658)
(234)
(2,863)
(18,228)
(22,983)
An analysis of movement in loss allowance in respect of trade receivables was as follows:
1 August
Charge to Consolidated Income Statement
Arising on acquisition
Receivables written off as uncollectable
Translation adjustments
31 July
2021
€’000
2020
€’000
(22,983)
(4,968)
(151)
265
89
(21,689)
(2,539)
-
659
586
(27,748)
(22,983)
The Group also manages credit risk through the use of a receivable purchase agreement with a financial institution. Under the
terms of this non-recourse agreement, the Group has transferred credit risk of certain trade receivables amounting to €46.7
million as at 31 July 2021 (2020: €44.2 million).
157
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 23 Financial instruments and financial risk (continued)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure as far as possible that it will always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group’s objective is to maintain a balance between flexibility and continuity of funding. Short-term flexibility is achieved
through the availability of overdraft facilities. The Group’s policy is that not more than 40 per cent of bank facilities should
mature in the twelve-month period following the year end. As at 31 July 2021, 93 per cent of bank facilities mature after
one year.
The contractual maturities of the Group’s loans and borrowings are set out in Note 22.
The contractual maturities of the financial liabilities are set out below:
Carrying
amount
€’000
Contractual
cash flows
€’000
6 months
or less
€’000
6 - 12
months
€’000
1 - 2
years
€’000
2 - 5
years
€’000
+ 5
years
€’000
2021
Variable rate bank loans
(170,184)
(177,826)
(31,035)
(967)
(1,931)
(143,893)
(12,882)
(12,882)
(12,882)
-
(596,134)
(596,134)
(582,148)
(13,646)
(1,695)
(1,695)
(145)
(105)
-
(319)
(106)
-
(21)
(1,339)
(46,136)
(52,179)
(5,230)
(4,918)
(9,275)
(18,459)
(14,297)
(24,138)
(26,921)
-
- (26,921)
-
Bank overdrafts
Trade and other payables
Contingent consideration
Lease liabilities
Put option liability
Derivative financial liabilities
Interest rate swaps used for hedging
(468)
(468)
(56)
(89)
(246)
(77)
Currency forward contracts used for hedging
— Inflows
— Outflows
54,174
54,174
54,072
(54,765)
(54,765)
(54,662)
(1,059)
(1,059)
(646)
102
(103)
(90)
-
-
-
-
(246)
(77)
158
-
-
-
-
-
-
-
-
-
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 23 Financial instruments and financial risk (continued)
Carrying
amount
€’000
Contractual
cash flows
€’000
6 months
or less
€’000
6 - 12
months
€’000
1 - 2
years
€’000
2 - 5
years
€’000
+ 5
years
€’000
2020
Variable rate bank loans
(205,889)
(216,504)
(1,517)
(1,517)
(32,601)
(180,869)
Bank overdrafts
Trade and other payables
Contingent consideration
Lease liabilities
Put option liability
(19,633)
(19,633)
(19,633)
(546,534)
(546,534)
(546,534)
-
-
-
-
-
-
(3,404)
(40,736)
(22,073)
(25,746)
(3,404)
(1,596)
(310)
(100)
(1,398)
(44,915)
(5,198)
(4,994)
(8,301)
(14,429)
(11,993)
-
-
-
-
Derivative financial liabilities
Interest rate swaps used for hedging
(1,262)
(1,262)
Currency forward contracts used for hedging
— Inflows
— Outflows
52,810
52,810
47,920
4,890
(55,278)
(55,278)
(50,240)
(5,038)
(3,730)
(3,730)
(2,320)
(148)
-
-
-
-
-
(25,746)
-
-
-
-
(1,262)
-
-
(1,262)
-
-
-
-
-
Accounting for derivatives and hedging activities
The fair value of derivative financial assets and liabilities at the year end date is set out in the following table:
Cash flow hedges
Currency forward contracts
Interest rate swaps
At 31 July
Cash flow hedges
2021
2020
Assets
€’000
Liabilities
€’000
Assets
€’000
Liabilities
€’000
224
-
224
(591)
(468)
(1,059)
1,460
-
1,460
(2,468)
(1,262)
(3,730)
Cash flow hedges are those of highly probable forecasted future income or expenses. In order to qualify for hedge accounting,
the Group is required to document the relationship between the item being hedged and the hedging instrument and
demonstrate, at inception, that the hedge relationship will be highly effective on an ongoing basis. The hedge relationship must
be tested for effectiveness on subsequent reporting dates.
There is no significant difference between the timing of the cash flows and income statement effect of cash flow hedges.
159
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 23 Financial instruments and financial risk (continued)
Market risk
Market risk is the risk that changes in market prices and indices, such as foreign exchange rates and interest rates, will affect
the Group’s income or the value of its holdings of financial instruments. The objective of the Group’s risk management strategy
is to manage and control market risk exposures within acceptable parameters, while optimising the return earned by the
Group. The Group has two types of market risk being currency risk and interest rate risk, each of which is dealt with as follows:
Currency risk
In addition to the Group’s operations carried out in eurozone economies, it also has significant operations in the United Kingdom
and certain operations in Brazil, Poland, Romania and Ukraine. Moreover, purchases are also denominated in US dollars. As a result
the Consolidated Statement of Financial Position is exposed to currency fluctuations from subsidiaries with a functional currency
different from the group’s presentation currency. The Group manages its Consolidated Statement of Financial Position having
regard to the currency exposures arising from its assets being denominated in different currencies. To this end, where foreign
currency assets are funded by borrowing, such borrowing is generally sourced in the currency of the related assets.
Transactional exposures arise from sales or purchases by an operating unit in currencies other than the unit’s functional
currency. The Group uses forward currency contracts to eliminate the currency exposures on certain foreign currency
purchases. The Group requires all its operating units, where possible, to use forward currency contracts to eliminate the
currency exposures on certain foreign currency purchases. The forward currency contracts must be in the same currency as
the hedged item.
Exposure to currency risk
The Group’s exposure to transactional foreign currency risk at the year end date is as follows:
2021
Trade receivables
Cash and cash equivalents
Trade and other payables
2020
Trade receivables
Cash and cash equivalents
Trade and other payables
Ron
€'000
Euro
€'000
Sterling
€'000
US Dollar
€'000
Total
€'000
-
80
-
80
-
(438)
-
(438)
3,712
15,876
(31,142)
(11,554)
4,180
15,006
(34,798)
(15,612)
-
410
(153)
257
-
359
(146)
213
2,418
3,445
(7,201)
(1,338)
6,130
19,811
(38,496)
(12,555)
2,083
7,438
(10,265)
(744)
6,263
22,365
(45,209)
(16,581)
Hedged items are excluded from the tables above.
Currency sensitivity analysis
A 10 per cent strengthening/weakening of the euro against the following currencies at 31 July 2021 would have affected
profit or loss on a transactional basis by the amounts shown below. This analysis assumes that all other variables, in particular
interest rates, remain constant. The analysis is performed on the same basis for 2020.
A positive number below indicates an increase in profit where the euro strengthens or weakens 10 per cent against the
relevant currency.
160
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 23 Financial instruments and financial risk (continued)
2021
Dollar
Sterling
Romanian Leu
At 31 July 2021
2020
Dollar
Sterling
Romanian Leu
At 31 July 2020
Interest rate risk
10% strengthening
income statement
€'000
10% weakening
income statement
€'000
134
(26)
(8)
100
74
(21)
43
96
(134)
26
8
(100)
(74)
21
(43)
(96)
The Group’s debt bears both floating and fixed rates of interest per the original contracts. Fixed rate debt is achieved through
the use of interest rate swaps.
The London Interbank Offered Rate (LIBOR) and other benchmark interest rates are expected to be replaced by alternative
risk-free rates by the end of 2021 as part of inter-bank offer rate (IBOR) reform. As at 31 July 2021, the Group is in
communication with swap and debt counterparties to manage the transition to these new benchmark interest rates. There
will be amendments to the contractual terms of IBOR-referenced interest rates and the corresponding update of the hedge
designations. However, it is not anticipated that these changes will impact the Group’s financing or interest rate hedging
strategies, nor would they have a material financial impact.
Cash pooling is availed of across the Group in order to reduce interest costs, however no overdraft balances have been offset.
At 31 July, the interest rate profile of the Group’s interest bearing financial instruments was as follows:
Variable rate instruments
Interest-bearing borrowings
Bank overdraft
Cash and cash equivalents
At 31 July
Total interest-bearing financial instruments
Cash flow sensitivity analysis for variable rate instruments
Carrying
amount
2021
€’000
Carrying
amount
2020
€’000
(170,184)
(205,889)
(12,882)
168,660
(14,406)
(19,633)
172,309
(53,213)
(14,406)
(53,213)
The sensitivity analysis below is based on the exposure to interest rates for both derivatives and non-derivative instruments.
A change of 50 basis points in interest rates at the reporting date would have increased/decreased profit and loss by the
amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The
analysis is performed on the same basis for 2020.
A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and
represents management’s assessment of the possible change in interest rates.
161
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 23 Financial instruments and financial risk (continued)
2021
Unhedged variable rate instruments
Bank overdraft
Cash flow sensitivity (net)
2020
Unhedged variable rate instruments
Bank overdraft
Cash flow sensitivity (net)
Principal
amount
€’000
Income
statement
50 bp
increase
€’000
(75,605)
(12,882)
(88,487)
(103,431)
(19,633)
(123,064)
(378)
(64)
(442)
(517)
(98)
(615)
A 50 basis points decrease in interest rates at the reporting date would have had the equal but opposite effect on
the above.
24 Deferred tax
The deductible and taxable temporary differences at the year end dates in respect of which deferred tax has been recognised
are analysed as follows:
Deferred tax assets (deductible temporary differences)
Pension related
Property, plant and equipment
Intangibles
Hedge related
IFRS 16
Other deductible temporary differences
Total
Deferred tax liabilities (taxable temporary differences)
Property, plant and equipment
Pension related
Intangibles
Other
Total
Net deferred tax liability
162
2021
€’000
2020
€’000
663
183
112
75
130
5,022
6,185
779
101
-
373
70
5,567
6,890
(4,531)
(1,193)
(13,424)
(2,013)
(21,161)
(3,953)
(226)
(12,117)
(3,489)
(19,785)
(14,976)
(12,895)
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 24 Deferred tax (continued)
Movements in deferred tax assets and liabilities, during the year, were as follows:
Property,
plant and
equipment
€’000
IFRS 16
Hedge
related
Pension
related
Intangibles Other
Total
€’000
€’000
€’000
€’000 €’000
€’000
2021
At 1 August 2020
Recognised in the Consolidated Income Statement
Arising on acquisition (Note 33)
Arising on disposal of subsidiary
Recognised in Other Comprehensive Income
Foreign exchange and other
(3,852)
(779)
(132)
588
-
(173)
70
53
-
-
-
7
373
-
-
-
553
57
1
-
(12,117)
2,078 (12,895)
(30)
620
(79)
(1,244)
21
(1,354)
450
285
1,323
(298)
(1,112)
-
20
(1,390)
-
(29)
(371)
(15)
(581)
At 31 July 2021
(4,348)
130
75
(530)
(13,312)
3,009 (14,976)
Property,
plant and
equipment
€’000
IFRS 16
Hedge
related
Pension
related
Intangibles Other
Total
€’000
€’000
€’000
€’000 €’000
€’000
2020
At 1 August 2019
Recognised in the Consolidated Income Statement
Recognised in Other Comprehensive Income
Foreign exchange and other
(3,968)
(371)
(24)
511
-
70
-
-
62
-
311
759
(26)
(70)
(16,349)
(27)
(19,523)
2,088 2,982
4,743
-
(117)
(760)
100
1,785
-
(110)
2,144
At 31 July 2020
(3,852)
70
373
553
(12,117)
2,078 (12,895)
Deferred tax has not been recognised in respect of withholding taxes and other taxes that would be payable on the unremitted
earnings of foreign subsidiaries, as the Group is in a position to control the timing of reversal of the temporary differences and
it is probable that the temporary differences will not reverse in the foreseeable future. As the Group can rely on participation
exemptions and tax credits that would be available in the context of the Group’s investments in subsidiaries in the majority of
the jurisdictions in which the Group operates, the aggregate amount of temporary differences in respect of which deferred tax
liabilities have not been recognised would not be material.
Other deferred tax assets and liabilities relates to losses carried forward and timing differences.
163
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 25 Provision for liabilities
The estimate of provisions is a judgement in the preparation of the financial statements.
2021
At beginning of year
Provided in year
Paid in year
Translation adjustment
At end of year
Current
Non-current
2020
At beginning of year
Provided in year
Paid in year
Released in year
Translation adjustment
At end of year
Current
Non-current
Contingent
acquisition
consideration
€’000
(i)
Rationalisation
Other
Total
€’000
(ii)
€’000
(iii)
€’000
3,404
-
(1,844)
135
1,695
250
1,445
13,431
109
(7,386)
(1,738)
(1,012)
3,404
1,906
1,498
-
-
-
-
-
-
-
251
-
-
(262)
11
-
-
-
2,638
146
(1,027)
7
1,764
1,764
-
4,936
35
(2,364)
-
31
2,638
2,487
151
6,042
146
(2,871)
142
3,459
2,014
1,445
18,618
144
(9,750)
(2,000)
(970)
6,042
4,393
1,649
(i) Contingent acquisition consideration relates to the acquisition of Comfert SRL (‘Comfert’) in December 2015 and
Vegetable Consulting Services Ltd (VCS) in March 2019. During the 2021 financial year, the Romania subsidiaries, including
Comfert SRL, were legally merged to form Agrii Romanai SRL. The amount attributable to Comfert is €0.1 million and the
amount attributable to VCS is €1.6 million.
(ii) Rationalisation costs in the prior year related to termination payments arising from the restructuring of Agri-Services in the UK.
(iii) Other provisions relate to various dilapidation provisions, operating and employment related costs.
26 Put option liability
At 1 August
Change in fair value of put option (i)
Translation adjustment
At 31 July
164
2021
€’000
22,073
1,674
391
24,138
2020
€’000
29,607
1,966
(9,500)
22,073
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 26 Put option liability (continued)
(i) As part of the Fortgreen acquisition, the Group entered into an arrangement with the minority shareholder, under which
the minority shareholder has the right at various dates to sell the remaining 35 per cent interest to Origin based on an
agreed formula. In the event that this is not exercised, Origin has a similar right to acquire the 35 per cent interest. Origin
recognised an option liability of €26.4 million at the date of acquisition which was the fair value of the future estimated
amount payable to exercise the option. This has been determined based on an agreed formula which includes an
expectation of future trading performance and timing of when the options are expected to be exercised, discounted to
present day value.
The assumption is that the holder of the put option will exercise this option during 2022.
27 Post employment benefit obligations
The Group operates a number of defined benefit pension schemes and defined contribution schemes with assets held in
separate trustee administered funds. All of the defined benefit schemes are closed to new members. The trustees of the
various pension funds are required by law to act in the best interests of the scheme participants and are responsible for
investment strategy and scheme administration. The majority of the Group’s defined benefit pension schemes are closed to
future benefits accrual with a small minority accruing benefits. The level of benefits available to members depends on length of
service and either their average salary over their period of employment, their salary in the final years leading up to retirement
and in some cases historical salaries depending on the rules of the individual scheme. Under IAS 19, ‘Employee Benefits’, the
total surplus in the Group’s defined benefit schemes at 31 July 2021 was €5,939,000 (2020: surplus of €403,000).
At 31 July 2021, the Group’s Irish scheme is in surplus of €2,473,000 and the Group’s UK scheme is in surplus of €3,466,000.
In the event of a wind-up of either the Irish or UK scheme, following the full settlement of scheme liabilities by the Trustees,
the pension scheme rules provide the Group with an unconditional right to a refund of any remaining surplus. In the ordinary
course of business, the Trustees have no rights to wind up or change the benefits due to members of the scheme. As a result,
any net surplus in the pension scheme is recognised in full.
Employee benefits included in the Consolidated Statement of Financial Position comprises the following:
Surplus in defined benefit schemes
2021
€’000
2020
€’000
5,939
403
The pension charge included in the Consolidated Income Statement for the year in respect of the Group’s defined benefit
schemes was €535,000 (2020: credit of €95,000) and a charge of €4,113,000 (2020: €4,125,000) in respect of the Group’s
defined contribution schemes.
The valuations of the defined benefit schemes used for the purposes of the following disclosures are those of the most recent
actuarial reviews carried out at 31 July 2021 by an independent, qualified actuary. The valuations have been performed using
the projected unit method.
Employee benefit plan risks
The employee benefit plans expose the Group to a number of risks, the most significant of which are:
Asset volatility
The plan liabilities are calculated using a discount rate set with reference to corporate bond yields. If assets underperform this
yield, this will create a deficit. Through its investment fund assets, the plans hold a significant proportion of equities which,
though expected to outperform corporate bonds in the long-term, create volatility and risk. The allocation to equities is
monitored to ensure it remains appropriate given the plans long-term objectives.
165
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 27 Post employment benefit obligations (continued)
Changes in bond yields
A decrease in corporate bond yields will increase the plans’ liabilities, although this will be partially offset by an increase in the
value of the plans’ bond holdings.
Inflation risk
In certain schemes the plans’ benefit obligations are linked to inflation, with the result that higher inflation will lead to higher
liabilities (although caps on the level of inflationary increases are in place). The majority of the assets are either unaffected by
or only loosely correlated with inflation, meaning that an increase in inflation will also increase the deficit.
Life expectancy
In the event that members live longer than assumed a further deficit will emerge in the Schemes.
The Group targets that the investment positions are managed with an overall asset-liability matching (‘ALM’) framework that
has been developed to achieve long-term investments that are in line with the obligations under the pension schemes. Within
this framework, the Group’s ALM objective is to match assets to the pension obligations.
Most of the plans are closed and therefore, under the projected unit credit method, the current service cost is expected to
increase as the members approach retirement and to decrease as members retire or leave service. The expected employee
and employer contributions for the year ending 31 July 2022 are €125,000 and €1,441,000 respectively.
Financial assumptions - scheme liabilities
The significant long-term assumptions used by the Group’s actuaries in the computation of scheme liabilities as at 31 July 2021
and 31 July 2020 are as follows:
Republic of Ireland schemes
Rate of increase in salaries
Discount rate on scheme liabilities
Inflation rate
UK scheme
Rate of increase in salaries
Rate of increases in pensions in payment and deferred benefits
Discount rate on scheme liabilities
Inflation rate
2021
2020
0.00%-2.45%
0.00%-1.95%
1.30%
1.60%
1.40%
1.10%
0.00%-3.50%
0.00%-3.20%
0.00%-3.80%
0.00%-3.60%
1.60%
2.90%
1.60%
2.40%
Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and
experience in both geographic regions. The mortality assumptions imply the following life expectancies in years of an active
member on retiring at age 65, 20 years from now:
2021
ROI
23.6
25.5
2021
UK
23.3
25.3
2020
ROI
24.3
26.3
2020
UK
23.1
25.2
Male
Female
166
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 27 Post employment benefit obligations (continued)
The mortality assumptions imply the following life expectancies in years of an active member, aged 65, retiring now:
Male
Female
2021
ROI
22.3
24.0
2021
UK
22.0
23.8
2020
ROI
22.5
24.4
2020
UK
21.8
23.7
Sensitivity analysis for principal assumptions used to measure scheme liabilities
There are inherent uncertainties surrounding the financial assumptions adopted in calculating the actuarial valuation of the
Group’s defined benefit pension schemes. The following table analyses (for the Group’s Irish and UK pension schemes) the
estimated impact on plan liabilities resulting from changes to key actuarial assumptions, whilst holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating
the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the
defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been
applied as when calculating the pension liability recognised in the statement of financial position.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.
Republic of Ireland schemes
Assumption
Discount rate
Price inflation
Salary
Mortality
UK scheme
Assumption
Discount rate
Price inflation
Salary
Mortality
Change in assumption
Increase/decrease 0.50%
Increase/decrease 0.50%
Increase/decrease 0.50%
Impact on plan liabilities
Decrease by 7.9% / increase by 9.0%
Increase by 0.6% / decrease by 0.7%
Increase / decrease by 0.1%
Increase/decrease by one year
Decrease / increase by 3.2%
Change in assumption
Impact on plan liabilities
Increase/decrease 0.50%
Decrease by 7.5% / increase by 8.1%
Increase/decrease 0.50%
Increase by 3.6% / decrease by 3.5%
Increase/decrease 0.50%
Increase by 0.5% / decrease by 0.3%
Increase/decrease by one year
Decrease / increase by 3.8%
167
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 27 Post employment benefit obligations (continued)
Net pension asset
Market value of scheme assets:
Bonds
Property
Investment funds
Insurance policy and insurance annuity
Other
Total market value of assets
Present value of scheme obligations
Surplus in the schemes
Net pension asset/(liability)
Market value of scheme assets:
Equities
Bonds
Property
Investment funds
Insurance policy and insurance annuity
Other
Total market value of assets
Present value of scheme obligations
Surplus/ (deficit) in the schemes
The majority of equity securities and bonds have quoted prices in active markets.
2021
ROI
€’000
2021
UK
€’000
2021
Total
€’000
11,762
-
-
704
11,762
704
3,672
76,159
79,831
-
501
8,798
1,072
15,935
86,733
(13,462)
(83,267)
8,798
1,573
102,668
(96,729)
2,473
3,466
5,939
2020
ROI
€’000
2020
UK
€’000
2020
Total
€’000
3,208
9,753
1,650
386
-
320
-
-
641
3,208
9,753
2,291
70,754
71,140
7,055
792
7,055
1,112
15,317
79,242
94,559
(13,508)
(80,648)
(94,156)
1,809
(1,406)
403
168
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 27 Post employment benefit obligations (continued)
The major categories of scheme assets are as follows:
Split of scheme assets:
— Equities
Bonds
— Government
Property - Ireland and UK
Other
Investment funds
Insurance policy and insurance annuity
Movement in the fair value of scheme assets
2021
ROI
2021
UK
2020
ROI
2020
UK
0%
74%
0%
3%
23%
0%
100%
0%
0%
1%
1%
88%
10%
100%
21%
64%
11%
2%
2%
0%
100%
0%
0%
1%
1%
89%
9%
100%
Fair value of assets at 1 August
Interest income
Remeasurements:
— Return on plan assets excluding amounts included in interest income
Employer contributions
Employee contributions
Insurance risk premium
Benefit payments
Settlement payments from plan assets
Translation adjustments
Fair value of assets at 31 July
As at 31 July 2021 and 2020 the pension schemes held no shares in Origin Enterprises plc.
2021
€’000
2020
€’000
94,559
1,502
105,581
1,918
3,070
1,333
123
(4)
(2,879)
-
4,964
102,668
3,349
1,480
131
(23)
(8,829)
(10,528)
1,480
94,559
169
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 27 Post employment benefit obligations (continued)
Movement in the present value of scheme obligations
Value of scheme obligations at 1 August
Current service costs
Past service (costs)/ credit
Gain on settlement
Interest on scheme obligations
Employee contributions
Insurance risk premium
Benefit payments
Settlement payments from plan assets
Remeasurements:
— Experience gain
— Effect of changes in demographic assumptions
— Effect of changes in financial assumptions
Translation adjustments
Value of scheme obligations at 31 July
Movement in net asset / (liability) recognised in the Consolidated Statement of Financial Position:
Net asset/ (liability) in schemes at 1 August
Current service costs
Past service (costs)/ credit
Gain on settlement
Employer contributions
Other finance income/ (expense)
Remeasurements
Translation adjustments
Net asset in schemes at 31 July
Analysis of defined benefit expense recognised in the Consolidated Income Statement:
Current service cost
Past service (costs)/ credit
Gain on settlement
Total recognised in operating profit
Net interest income/ (cost) (included in finance costs Note 4)
Net charge to Consolidated Income Statement
170
2021
€’000
2020
€’000
(94,156)
(107,057)
(526)
(17)
-
(1,494)
(123)
4
2,879
-
5,826
(2,014)
(2,229)
(4,879)
(624)
151
387
(1,927)
(131)
23
8,829
10,528
427
179
(3,402)
(1,539)
(96,729)
(94,156)
2021
€’000
403
(526)
(17)
-
1,333
8
4,653
85
5,939
2020
€’000
(1,476)
(624)
151
387
1,480
(9)
553
(59)
403
2021
€’000
2020
€’000
(526)
(17)
-
(543)
8
(535)
(624)
151
387
(86)
(9)
(95)
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 27 Post employment benefit obligations (continued)
Maturity analysis
The maturity profile of the Group’s defined benefit obligation (on a discounted basis) is as follows:
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
After five years
Total
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
After five years
Total
Average duration and scheme composition
Average duration of defined benefit obligation (years)
Average duration of defined benefit obligation (years)
2021
ROI
€’000
338
343
352
365
388
11,676
13,462
2020
ROI
€’000
335
343
353
370
394
11,713
13,508
2021
UK
€’000
2,795
2,844
2,816
2,946
3,025
68,841
83,267
2020
UK
€’000
2,543
2,662
2,765
2,919
3,019
66,740
80,648
2021
Total
€’000
3,133
3,187
3,168
3,311
3,413
80,517
96,729
2020
Total
€’000
2,878
3,005
3,118
3,289
3,413
78,453
94,156
2021
ROI
2021
UK
17.0
16.0
2020
ROI
2020
UK
18.0
16.0
171
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 27 Post employment benefit obligations (continued)
Allocation of defined benefit obligation by participant:
Active plan participants
Deferred plan participants
Retirees
Allocation of defined benefit obligation by participant:
Active plan participants
Deferred plan participants
Retirees
Defined benefit pension credit recognised in Other Comprehensive Income
2021
ROI
€’000
2021
UK
€’000
2021
Total
€’000
1,043
6,685
5,734
13,462
2020
ROI
€’000
1,018
6,500
5,990
13,508
21,935
21,720
39,612
83,267
2020
UK
€’000
20,815
23,699
36,134
80,648
22,978
28,405
45,346
96,729
2020
Total
€’000
21,833
30,199
42,124
94,156
Remeasurement gain on scheme assets
Remeasurement gain/(loss) on scheme liabilities:
Effect of experience gains on scheme liabilities
Effect of changes in demographical and financial assumptions
Remeasurements
Deferred tax expense
Defined benefit pension credit recognised in the Consolidated Statement of Comprehensive Income
2021
€’000
2020
€’000
3,070
3,349
5,826
(4,243)
4,653
(1,112)
3,541
427
(3,223)
553
(70)
483
172
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 28 Share capital
Authorised
250,000,000 ordinary shares of €0.01 each (i)
Allotted, called up and fully paid
2021
€’000
2020
€’000
2,500
2,500
126,396,184 (2020: 126,396,184) ordinary shares of €0.01 each (i) (ii) (iii)
1,264
1,264
(i) Ordinary shareholders are entitled to dividends as declared and each ordinary share carries equal voting rights at meetings
(ii)
of the Company.
In December 2012, the issued ordinary share capital was increased by the issue of 1,212,871 ordinary shares of nominal
value of €0.01 each, at an issue price of €4.04 each, pursuant to a share subscription by a wholly owned subsidiary for
the purposes of the Origin Long Term Incentive Plan 2012 (“2012 LTIP Plan”). Under the terms of 2012 LTIP Plan, 412,541 of
these shares were transferred to the Directors and senior management as a result of certain financial targets having been
achieved in the three years to 31 July 2015. The remaining 800,330 ordinary shares continue to be held as treasury shares.
(iii) In July 2019, the issued ordinary share capital was increased by the issue of 13,978 ordinary shares of nominal value €0.01
each, at an issue price of €5.48 each pursuant to the terms of the Origin Save As You Earn Scheme.
29 Dividends
The Board is recommending a final dividend of 7.85 cent per ordinary share (2020: nil) which when combined with the interim
dividend of 3.15 cent per ordinary share brings the total dividend for the year to 11.00 cent per share (total dividend of €13.8
million) (2020: 3.15 cent per share). Subject to shareholders’ approval at the Annual General Meeting, the dividend will be paid
on 4 February 2022 to shareholders on the register on 14 January 2022. In accordance with IFRS, this dividend has not been
provided for in the Consolidated Statement of Financial Position as at 31 July 2021.
30 Consolidated statement of changes in equity
Capital redemption reserve
The capital redemption reserve was created in the year ending 31 July 2011 and arose on the redemption of deferred
convertible ordinary shares
Cash flow hedge reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet occurred.
Revaluation reserve
The revaluation reserve relates to revaluation surpluses arising on revaluations of property, plant and equipment.
Share-based payment reserve
This reserve comprises amounts credited to reserves in connection with equity awards less the effect of any exercises of
such awards.
Reorganisation reserve
The difference between the fair value of the investment recorded in the Company balance sheet and the carrying value of the
assets and liabilities transferred in 2007 on the formation of Origin has been recognised as a reorganisation reserve in other
reserves within equity together with the currency translation reserve, cash flow reserve and revaluation reserve.
173
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 30 Consolidated statement of changes in equity (continued)
Foreign currency translation reserve
The translation reserve comprises all foreign exchange differences from 1 August 2005, arising from the translation of the net
assets of the Group’s non-euro denominated operations, including the translation of the profits of such operations from the
average exchange rate for the year to the exchange rate at the year end date. Exchange gains or losses on long-term intra-
group loans that are regarded as part of the net investments in non-euro denominated operations, are taken to the translation
reserve to the extent that they are neither planned nor expected to be repaid in the foreseeable future.
Capital management
The capital managed by the Group consists of the consolidated equity and net debt. Please refer to Note 22 for an analysis of
net debt. The Group has set the following goals for the management of its capital:
— to maintain a prudent net debt (as set out in Note 22) to EBITDA and interest cover ratio (interest as a percentage of EBIT)
to support a prudent capital base and ensure a long term sustainable business;
— to comply with covenants as determined by debt providers;
— to achieve an adequate return for investors; and
— to apply a dividend policy which takes into account the level of peer group dividends, the Group’s financial performance and
position, the Group’s future outlook and other relevant factors including tax and other legal considerations.
The Group employs two key target ratios to monitor equity and to be compliant with its bank covenants:
— the Group’s net debt to EBITDA ratio is below 3.50. The ratio is 0.13 times at 31 July 2021 (2020: 1.18 times), 31 January 2021
2.76 times (2020: 3.24 times); and
— the Group’s interest cover (EBITDA to interest) is above 3.00. The ratio is 10.36 times at 31 July 2021 (2020: 5.76 times),
31 January 2021 6.75 times (2020: 7.57 times).
31 Commitments
Future purchase commitments for property, plant and equipment
At 31 July 2021
Contracted for but not provided for
Land and
buildings
€’000
Plant and
machinery
€’000
Other
€’000
Total
2021
€’000
-
616
3
619
Land and
buildings
€’000
Plant and
machinery
€’000
Other
€’000
Total
2020
€’000
At 31 July 2020
Contracted for but not provided for
66
-
-
66
Future purchase commitments: Software Development
Contracted for but not provided for
Total
Total
2021
€’000
Total
2020
€’000
33
33
73
73
The Group has a financial commitment of €4.4 million attributable to a strategic partnership with University College Dublin
(‘UCD’). The commitment was originally over a five year period and was extended to January 2023.
174
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 32 Related party transactions
In the normal course of business, the Group undertakes trading transactions with its associates, joint venture and other related
parties. A summary of transactions with these related parties during the year is as follows:
2021
Sale of
goods
€’000
Purchase of
goods
€’000
Receiving
services from
€’000
Rendering
services to
€’000
Total
€’000
Transactions with joint venture
Transactions with associates
-
(143,050)
70,828
(228)
-
(806)
169
295
(142,881)
70,089
2020
Sale of
goods
€’000
Purchase of
goods
€’000
Receiving
services from
€’000
Rendering
services to
€’000
Total
€’000
Transactions with joint venture
Transactions with associates
-
(110,752)
61,341
(200)
-
(849)
222
303
(110,530)
60,595
The trading balances with related parties were:
Trading balances with associates
Trading balances with joint ventures
Total
Due from related parties
Due to related parties
2021
€’000
22,630
7,383
30,013
2020
€'000
19,525
7,190
26,715
2021
€’000
(9,222)
(3,469)
(12,691)
2020
€'000
(6,410)
(2,592)
(9,002)
Other financial assets on the Consolidated Statement of Financial Position primarily comprise of €552,000 (2020: €520,000) in
relation to a loan to West Twin Investments Limited, an associate of the Group.
Compensation of key management personnel
For the purposes of the disclosure requirements of IAS 24, ‘Related Party Disclosures’, the term ‘key management personnel’
(i.e. those persons having authority and responsibility for planning, directing and controlling the activities of the Group),
comprises the Board of Directors and their management team who have responsibility for managing the business and affairs of
the Group and its reporting segments. Comparatives are presented on a consistent basis.
Salaries and other short term employee benefits
Post employment benefits
Share-based payment charge/ (credit)
Other long term employee benefits
Total
2021
€’000
1,589
85
125
-
1,799
2020
€’000
3,123
148
(360)
24
2,935
175
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 33 Acquisition of subsidiary undertakings
On 5 March 2021, the Group acquired 100% of the share capital of Greentech Limited (‘Green-tech’), the UK’s leading
manufacturer and distributor of landscaping, forestry and grounds maintenance equipment. Green-tech is expected to
enhance the offering of Origin’s Amenity businesses and offers potential in the area of environmental land management and
bio-diversity enhancement for the Group’s agri-focused businesses.
Details of the net assets acquired and goodwill arising from the business combinations are as follows:
Assets
Non-current
Property, plant & equipment
Right of use asset
Intangible assets
Total non-current assets
Current assets
Inventory
Trade receivables (i)
Other receivables
Total current assets
Liabilities
Trade and other payables
Corporation tax
Deferred tax liability
Total liabilities
Total identifiable net assets at fair value (excluding cash acquired)
Goodwill arising on acquisition
Total net assets acquired (excluding cash acquired)
Consideration satisfied by:
Cash consideration
Cash acquired
Total consideration related to acquisitions
Fair
value
€’000
481
189
5,326
5,996
1,834
3,145
202
5,181
(4,805)
(233)
(1,354)
(6,392)
4,785
4,390
9,175
10,789
(1,614)
9,175
(i) Trade receivables acquired were €3.1 million. All amounts are deemed to be recoverable.
Goodwill recognised on the acquisition is attributable to the skills and technical talent of the acquired business’ workforce and
the synergies expected to be achieved from integrating the companies into the Group’s existing business. None of the goodwill
recognised is expected to be deductible for income tax purposes.
176
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 33 Acquisition of subsidiary undertakings (continued)
Post acquisition revenues and net profit relating to the current year acquisition amounted to €9.2 million and €0.8 million
respectively. If the acquisition had occurred on 1 August 2020, management estimates that the total consolidated revenue
would have been €1,672.0 million and the consolidated net profit (excluding exceptional items) would have been €38.1 million.
In determining these amounts management has assumed that the fair value adjustments that arose on the dates of acquisition
would have been the same if the acquisition occurred on 1 August 2020.
There were no acquisitions in the year ending 31 July 2020.
34 Accounting estimates and judgements
The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income
and expenses.
In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting
policies that have the most significant effect on the amount recognised in the financial statements are described as follows:
Accounting estimates
Note 15 Goodwill and intangible assets- measurement of the recoverable amounts of CGUs and intangible assets
Impairment testing of assets, particularly of goodwill, involves estimating the future cash flows for a cash generating unit and
an appropriate discount rate to determine a recoverable value as set out in Note 15.
Note 19 Trade and other receivables
An element of judgement is required in estimating a portion of the rebates receivable from suppliers in certain agricultural
chemicals and fertiliser products at year end given the number and complexity of rebate arrangements in addition to
the timing of payments. There are numerous contractual terms and requirements that must be met in order to obtain
certain rebates.
The Group acknowledges the level of judgement required in estimating settlement price adjustments payable to certain
customers give the nature of such arrangements in addition to the timing of payment. The estimation of the final settlements
payable is impacted by commodity prices, competitor pricing pressures, prevailing market conditions and the timing of the
Group’s financial year end as it is non-coterminous with the year end of its main customers. The Group records the estimated
settlement price adjustments when the related sales are made based on market conditions and historical experience.
Note 26 Put option liability
As part of the Fortgreen acquisition, the Group entered into an arrangement with the minority shareholder, under which the
minority shareholder has the right at various dates to sell the remaining 35 per cent interest to Origin. In the event that this is
not exercised, Origin has a similar right to acquire the 35 per cent interest. Origin has recognised an option liability of €26.4
million which is the fair value of the future estimated amount payable to exercise the option. The valuation of the put option
liability has been determined based on an agreed formula which includes an expectation of future trading performance and an
estimated timing of when the options are expected to be exercised, discounted to present day value.
Note 27 Post employment benefit obligations
The estimation of employee benefit costs requires the use of actuaries and the determination of appropriate assumptions such
as discount rates and expected future rates of return as set out in Note 27.
Accounting judgements
Note 3 Exceptional items
Exceptional items are those which are separately disclosed to highlight significant items, by virtue of their scale and nature,
within the Group results for the year in order to aid the user’s understanding of underlying performance of the Group.
Management exercises judgement in assessing which items are classified as exceptional in order to ensure that the treatment
of exceptional items is consistent with the accounting policy.
177
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) 35 Principal subsidiaries and associated undertakings
Name of undertaking
Nature of business
% of ordinary
shares
Registered office
Agrii Polska sp.Z.O.O
Agrii Romania S.R.L.
Agroscope International LLC
Agspace Agriculture Limited
BHH Limited (i)
Specialist agronomy
products and services
Specialist agronomy
products and services
Specialist agronomy
products and services
Digital agricultural
services group
Provender milling
FortGreen Comercial Agrícola Ltda
Goulding Chemicals Limited
Greentech Limited
Hall Silos Limited
Specialist agronomy
products and services
Fertiliser blending
and distribution
Manufacturer and distributor
of landscaping, forestry and
maintenance equipment
Grain handling
Headland Amenity Limited
Turf management services
100
100
100
100
50
65
100
100
100
100
Linemark UK Limited
Sports and amenity provider
100
Masstock Group
Holdings Limited
Origin Amenity Solutions Limited
(previously Rigby Taylor Limited)
Origin NI Limited
Origin Riverwalk
Property Trading Limited
Origin Secretarial Limited
Origin Treasury Limited
Origin UK Operations Limited
Specialist agronomy products
and services
Turf management services
Agricultural and
construction inputs
Property trading
IT implementation, maintaining
and licensing of software
Provides finance facilities and
funding to group companies
Fertiliser blending
and distribution
R&H Hall Limited
Grain and feed trading
R&H Hall Trading Limited
Grain and feed trading
United Agri Products Limited
West Twin Silos Limited
Specialist agronomy
products and services
Silo operation
100
100
100
100
100
100
100
50
100
100
50
Obornicka street 233,
60-650 Poznan, Poland
3 Calea Lugojului St., Ghiroda Village,
Ghiroda Commune Timis County, Romania
25B Sahaydachnoho Street,
Kyiv 04070, Ukraine
Unit 5, Dorcan Business Village, Murdock
Road, Swindon, SN3 5HY, England
35/39 York Road, Belfast BT15 3GW,
Northern Ireland
R. Curitiba, 805 - Zona Indl. II,
Paiçandu - PR, 87140-000, Brazil
4-6 Riverwalk, Citywest Business Campus,
Dublin 24, Ireland
Rabbit Hill Business Park, Great North Road,
Arkendale, Knaresborough,
HG5 0FF, UK
4A Campsie Real Estate, McLean Road,
Londonderry, BT47 3PF, Northern Ireland
Orchard Road, Royston, Hertfordshire, SG8
5HW, UK
Orchard Road, Royston, Hertfordshire, SG8
5HW, UK
Andoversford, Cheltenham, Gloucestershire,
GL54 4LZ, UK
Orchard Road, Royston, Hertfordshire, SG8
5HW, UK
Orchard Road, Royston, Hertfordshire, SG8
5HW, UK
4-6 Riverwalk, Citywest Business Campus,
Dublin 24, Ireland
4-6 Riverwalk, Citywest Business Campus,
Dublin 24, Ireland
4-6 Riverwalk, Citywest Business Campus,
Dublin 24, Ireland
Orchard Road, Royston, Hertfordshire,
SG8 5HW, UK
La Touche House, Custom House Dock, IFSC,
Dublin 1, Ireland
4A Campsie Real Estate, McLean Road,
Londonderry, BT47 3PF, Northern Ireland
Andoversford, Cheltenham, Gloucestershire,
GL54 4LZ, UK
McCaughey Road, Belfast BT3 9AG,
Northern Ireland
(i) BHH Limited owns 100% of the shareholding in John Thompson and Sons Limited.
The country of registration is also the principal location of activities in each case.
The full list of subsidiaries and associates will be annexed to the Annual Return of the Group to be filed with the Irish Registrar
of Companies.
178
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Group Financial Statements (continued) 36 Subsequent events
At 31 July 2021, the Group had unsecured committed banking facilities of €430 million (2020: €430 million), of which €30
million will expire in September 2021, €100 million will expire in May 2022, €34m will expire in June 2024 and €266 million
will expire in June 2025. Subsequent to year end, the Group extended the €100 million facility due to expire in May 2022
to June 2025.
There have been no other material events subsequent to 31 July 2021 that would require adjustment to or disclosure in this report.
37 Approval of financial statements
The Group financial statements were approved by the Board on 28 September 2021.
179
FINANCIAL STATEMENTSNotes to the Group Financial Statements (continued) Company Accounting Policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation
to the Company’s financial statements.
Basis of preparation
The Company financial statements have been prepared on a going concern basis and in accordance with Irish GAAP
(accounting standards issued by the UK Financial Reporting Council and the Companies Act 2014). The entity financial
statements comply with Financial Reporting Standard 102, The Financial Reporting Standard applicable to in the UK and
Republic of Ireland (FRS 102).
The entity financial statements have been prepared under historical cost convention, as modified by the measurement of
certain financial assets and liabilities at fair value through profit or loss, and the measurement of freehold land and buildings at
their deemed cost on transition to FRS 102 on 1 August 2014.
Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is
calculated to write off the cost or valuation of tangible assets, other than freehold land, on a straight line basis, by reference
to the following estimated useful lives:
Fixtures and fittings
25 years
Financial assets
Investments in subsidiaries are carried at cost less accumulated impairment losses. Dividends shall be recognised when the
shareholder’s right to receive payment is established.
Retirement benefits
For the Company’s defined benefit schemes, the difference between the market value of the scheme’s assets and the
actuarially assessed present value of the scheme’s liabilities, calculated using the projected unit credit method, is disclosed as
an asset/liability in the balance sheet, to the extent that it is deemed to be recoverable.
The amount charged to operating profit is the actuarially determined cost of pension benefits promised to employees and
earned during the year plus the cost of any benefit improvements granted to members during the period.
The net interest cost on the net defined benefit liability is determined by multiplying the net defined benefit liability by the
discount rate, both as determined at the start of the financial year, taking account of any changes in the net defined benefit
liability during the financial year as a result of contribution and benefit payments. This net interest cost is recognised in profit
or loss as ‘finance expense’ and presented within ‘interest payable and similar charges’.
Actuarial gains and loss arising from experience adjustments and charges in actuarial assumptions are recognised
in other comprehensive income. These amounts together with the return on plan assets less the interest income on
plan assets included in the net interest cost, are presented in ‘remeasurement of a defined benefit liability’ in other
comprehensive income.
Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date of the transactions or at actual rates. The
resulting monetary assets and liabilities are translated at the balance sheet rate or the transaction rate and the exchange
differences are dealt with in the profit and loss account.
Cash flow statement
The Company has taken advantage of the exemption, under FRS 102 paragraph 1.12 (b), from preparing a statement of cash
flows, on the basis that it is a qualifying entity and published Group financial statements, in which the Company’s results are
consolidated, include a cash flow statement.
180
Origin Enterprises plc Annual Report and Accounts 2021 Company Accounting Policies (continued)
Taxation
Current tax is provided on the Company’s taxable profits, at amounts expected to be paid (or recovered) using the tax rates
and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date,
as required by FRS 102. Provision is made at the rates expected to apply when the timing differences reverse.
A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence,
it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the
underlying timing differences can be deducted.
Long-Term Incentive Plan
The Company has granted Equity Entitlements under the Origin Enterprises Long-Term Incentive Plan 2015. All disclosures
relating to the plan are made in Note 9 to the Group financial statements.
Financial instruments
The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.
Financial assets
Basic financial assets, including trade and other receivables, cash and bank balances and amounts owed from other group
undertakings, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where
the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of
impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of
the estimated cash flows discounted at the asset’s original interest rate. The impairment loss is recognised in profit or loss.
If there is decrease in the impairment loss arising from an event occurring after the impairment was recognised the
impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount
would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b)
substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset
has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party
without imposing additional restrictions.
Financial liabilities
Basic financial liabilities, including trade and other payables and amounts owed to group undertakings, are initially recognised
at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the
present value of the future receipts discounted at a market rate of interest.
Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are
presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at
amortised cost using the effective interest method.
Related party disclosures
The Company discloses transactions with related parties that are not wholly owned within the Group. In accordance with FRS
102 33.1A, it does not disclose transactions with members of the same group that are wholly owned.
181
FINANCIAL STATEMENTS Company Accounting Policies (continued)
Leased assets
Leases, where a significant portion of the risks and rewards of ownership are retained by the lessor, are classified as operating
leases. Payments made under operating leases are charged to the Consolidated Income Statement on a straight line basis over
the lease term.
Leases, where the Group has substantially all the risks and rewards of ownership, are classified as finance leases. Finance
leases are capitalised at the inception of the lease at the lower of the fair value of the leased asset or the present value of
the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in interest-bearing
loans and borrowings. The interest element of the payments is charged to the Consolidated Income Statement over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The asset
acquired under the finance lease is depreciated over the shorter of the useful life of the asset or the lease term.
Intangible assets
Computer software that is not an integral part of an item of computer hardware is also classified as an intangible asset. Where
intangible assets are separately acquired, they are capitalised at cost. Cost comprises purchase price and other directly
attributable costs.
Internally generated intangible assets are recognised when the following can be demonstrated;
— the technical feasibility of completing the intangible asset so that it will be available for use or sale;
— the intention to complete the development;
— the ability to use or sell the intangible asset;
— the ability to generate future economic benefits;
— the availability of resources to complete the development; and
— the ability to measure reliably the expenditure attributable to the intangible asset during its development.
Intangible assets with finite lives are amortised over the period of their expected useful lives in equal annual instalments,
as follows:
Brands
Intellectual property
Developed technology
Computer software
up to 20 years
up to 20 years
up to 10 years
3 to 10 years
Subsequent to initial recognition, intangible assets are stated at cost less accumulated amortisation and impairment
losses incurred.
General
Origin Enterprises plc (the ‘Company’) is a company domiciled and incorporated in Ireland. The Company registration number
is 426261 and the Company address is 4-6 Riverwalk, Citywest Business Campus, Dublin 24, Ireland.
182
Origin Enterprises plc Annual Report and Accounts 2021 Company Balance Sheet
As at 31 July 2021
Fixed assets
Tangible assets
Intangible assets
Post employment benefit surplus
Financial assets
Current assets
Debtors
Cash at bank and in hand
Notes
2021
€’000
2020
€’000
1
2
7
3
898
5,451
2,473
151,500
160,322
886
4,039
1,809
33,107
39,841
4
251,053
82,314
333,367
522,355
58,227
580,582
Creditors (amounts falling due within one year)
5
(188,971)
(334,523)
Net current assets
Net assets
Capital and reserves
Called up share capital - presented as equity
Share premium
Profit and loss account and other reserves
Shareholders’ funds
144,396
246,059
304,718
285,900
8
1,264
164,850
138,604
1,264
164,850
119,786
304,718
285,900
The profit for the year attributable to shareholders dealt with in the financial statements of the holding company for the year
ended 31 July 2021 was €21,427,000 (2020: €44,656,000). As permitted by Section 304 of the Companies Act 2014, the income
statement of the Company has not been separately presented in these financial statements.
On behalf of the Board
Rose Hynes
Director
28 September 2021
Sean Coyle
Director
28 September 2021
183
FINANCIAL STATEMENTS
Company Statement of Changes in Equity
As at 31 July 2021
Share
capital
Treasury
shares
Share
premium
€’000
€’000
€’000
Capital
redemption
reserve
€’000
LTIP
reserve
Profit and
loss
Total
€’000
€’000
€’000
2021
At 1 August 2020
Profit for the year
Remeasurement gain on post employment
benefit asset
Deferred tax on remeasurement
Total comprehensive income for the year
Share-based payment charge
Dividend paid to shareholders
1,264
(8)
164,850
134
1,131
118,529
285,900
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,427
21,427
407
(51)
407
(51)
21,783
21,783
1,016
-
1,016
-
(3,981)
(3,981)
At 31 July 2021
1,264
(8)
164,850
134
2,147
136,331
304,718
2020
At 1 August 2019
Profit for the year
Remeasurement gain on post employment
benefit asset
Deferred tax on remeasurement
Total comprehensive income for the year
Share-based payment credit
Dividend paid to shareholders
At 31 July 2020
1,264
(8)
164,850
134
1,537
100,352
268,129
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
44,656
44,656
535
(67)
535
(67)
45,124
45,124
(406)
-
(406)
-
(26,947)
(26,947)
1,264
(8)
164,850
134
1,131
118,529
285,900
184
Origin Enterprises plc Annual Report and Accounts 2021 Notes to the Company Financial Statements
1 Tangible fixed assets
Cost
At 1 August 2020
Additions
Disposals
At 31 July 2021
Accumulated depreciation
At 1 August 2020
Depreciation charge for year
At 31 July 2021
Net book amounts
At 31 July 2021
At 31 July 2020
Cost
At 1 August 2019
Additions
At 31 July 2020
Accumulated depreciation
At 1 August 2019
Depreciation charge for year
At 31 July 2020
Net book amounts
At 31 July 2020
At 31 July 2019
Fixtures &
fittings
€’000
Total
€’000
1,392
1,392
112
(30)
112
(30)
1,474
1,474
506
70
576
898
886
506
70
576
898
886
1,377
15
1,392
1,377
15
1,392
430
76
506
886
947
430
76
506
886
947
185
FINANCIAL STATEMENTS 2
Intangible assets
Cost
At 1 August 2020
Additions
At 31 July 2021
Amortisation
At 1 August 2020
Charge for year
At 31 July 2021
Net book amounts
At 31 July 2021
At 31 July 2020
Cost
At 1 August 2019
Additions
At 31 July 2020
Amortisation
At 1 August 2019
Charge for year
At 31 July 2020
Net book amounts
At 31 July 2020
At 31 July 2019
3 Financial assets
Investment in subsidiaries
At 1 August
Additions
At 31 July
186
Developed
Technology
€’000
Brand
Software
Total
€’000
€’000
€’000
3,164
1,753
4,917
222
142
364
4,553
2,942
2,232
-
2,232
1,276
62
1,338
894
956
383
-
383
242
137
379
5,779
1,753
7,532
1,740
341
2,081
4
5,451
141
4,039
Developed
Technology
€’000
Brand
Software
Total
€’000
€’000
€’000
2,090
1,074
3,164
111
111
222
2,211
21
2,232
1,083
193
1,276
383
-
383
182
60
242
4,684
1,095
5,779
1,376
364
1,740
2,942
956
141
4,039
1,979
1,128
201
3,308
2021
€’000
2020
€’000
33,107
118,393
151,500
33,107
-
33,107
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Company Financial Statements (continued) 3 Financial assets (continued)
During the current financial year, the Company subscribed for share capital in Origin Agronomy Holdings Limited, a 100%
subsidiary company.
Investment in subsidiaries comprised as:
Origin Agronomy Holdings Limited
Origin Holdings Ukraine BV
Goulding Chemicals Limited (a)
Torrox Limited (b)
2021
€’000
2020
€’000
120,406
31,094
-
-
2,013
31,094
-
-
151,500
33,107
(a) The Company holds one ‘A’ share in Goulding Chemicals Limited, which has a carrying value of €20.
(b) The Company holds 100 ordinary shares of €0.02 each in Torrox Limited.
In the opinion of the directors, the value of the investments is not less than the book values shown above.
The principal subsidiaries are set out on Note 35 to the Group financial statements.
4 Debtors
Amounts owed by subsidiary undertakings
Corporation tax
Other debtors
Deferred tax
Amounts owed by subsidiary undertakings are unsecured and are repayable on demand.
5 Creditors (amounts falling due within one year)
Amounts owed to subsidiary undertakings (i)
Trade creditors (ii)
Accruals and other payables (ii)
Retirement benefit and related liabilities
Deferred tax
(i) Amounts owed to subsidiary undertakings are unsecured and are payable on demand.
(ii) Trade creditors, accruals and other payables are measured at amortised cost.
2021
€’000
2020
€’000
250,051
520,748
548
454
-
554
648
405
251,053
522,355
2021
€’000
2020
€’000
180,014
326,121
1,603
6,143
843
368
1,161
5,710
843
688
188,971
334,523
187
FINANCIAL STATEMENTSNotes to the Company Financial Statements (continued) 6 Deferred tax
At 1 August
Charge/ (credit) for the year
At 31 July
2021
€’000
2020
€’000
283
85
368
316
(33)
283
7 Post employment benefit asset
The Company operates a defined benefit pension scheme which is closed to new members.
Under FRS 102, the total surplus in the Company’s defined benefit scheme at 31 July 2021 was €2,473,000 (2020: surplus of
€1,809,000). There was a charge in the profit and loss account for the period in respect of the Company’s defined benefit
scheme of €23,000 (2020: charge of €69,000).
The expected employer contributions from the Company for the year ending 31 July 2022 are €280,000. The valuations of the
defined benefit schemes used for the purposes of the following disclosures are those of the most recent actuarial valuations
carried out at 31 July 2021 by an independent, qualified actuary. The valuations have been performed using the projected
unit method.
Post employment benefits included in the Company Balance Sheet comprises the following:
Surplus in defined benefit scheme (see analysis below)
Total
The main assumptions used by the actuary were as follows:
Rate of increase in salaries
Discount rate in scheme liabilities
Inflation rate
Net pension asset
Market value of scheme assets:
Equities
Bonds
Property
Investment funds
Other
Total market value of assets
Present value of scheme liabilities
Surplus in the scheme
188
2021
€’000
2,473
2,473
2021
%
2020
€’000
1,809
1,809
2020
%
0% - 2.45% 0% - 1.95%
1.30%
1.60%
2021
€’000
1.40%
1.10%
2020
€’000
-
11,762
-
3,672
501
15,935
(13,462)
2,473
3,208
9,753
1,650
386
320
15,317
(13,508)
1,809
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Company Financial Statements (continued) 7 Post employment benefit asset (continued)
Movement in value of scheme assets
Value of assets at 1 August
Interest income
Settlement payment
Remeasurement gain
Employer contributions
Benefit payment
Employee contributions
At 31 July
Movement in the present value of scheme obligations
Value of scheme obligations at 1 August
Current service costs
Settlement payment
Interest on scheme obligations
Remeasurement (loss)/ gain
Benefit payment
Employee contributions
Value of scheme obligations at 31 July
Movement in net asset recognised in the balance sheet
At 1 August
Current service cost
Employer contributions
Other finance income
Remeasurement gain
Net asset in scheme at 31 July
2021
€’000
2020
€’000
15,317
214
-
471
280
(357)
10
18,243
182
(2,234)
261
531
(1,678)
12
15,935
15,317
2021
€’000
2020
€’000
(13,508)
(17,431)
(50)
-
(187)
(64)
357
(10)
(80)
2,234
(171)
274
1,678
(12)
(13,462)
(13,508)
2021
€’000
2020
€’000
1,809
(50)
280
27
407
812
(80)
531
11
535
2,473
1,809
189
FINANCIAL STATEMENTSNotes to the Company Financial Statements (continued) 7 Post employment benefit asset (continued)
Defined benefit expense recognised in the profit and loss account:
Current service cost
Total recognised in operating profit
Interest income on scheme assets
Interest cost on scheme liabilities
Included in finance income
Net charge to Company’s profit and loss account
Net defined benefit surplus
Present value of the scheme obligation
Fair value of plan assets
Surplus in scheme
Actual return less expected return on scheme assets
Experience adjustment on scheme liabilities
Changes in demographical and financial assumptions
Remeasurements
Deferred tax charge
Gain recognised in statement of comprehensive income
8 Share capital
Authorised
250,000,000 ordinary shares of €0.01 each (i)
Allotted, called up and fully paid
2021
€’000
2020
€’000
(50)
(50)
214
(187)
27
(23)
(80)
(80)
182
(171)
11
(69)
2021
€’000
2020
€’000
(13,462)
(13,508)
15,935
2,473
2021
€’000
471
(108)
44
407
(51)
356
15,317
1,809
2020
€’000
261
(296)
570
535
(67)
468
2021
€’000
2020
€’000
2,500
2,500
126,396,184 (2020: 126,396,184) ordinary shares of €0.01 each (i) (ii) (iii)
1,264
1,264
(i) Ordinary shareholders are entitled to dividends as declared and each ordinary share carries equal voting rights at meetings
(ii)
of the Company.
In December 2012, the issued ordinary share capital was increased by the issue of 1,212,871 ordinary shares of nominal
value of €0.01 each, at an issue price of €4.04 each, pursuant to a share subscription by a wholly owned subsidiary for the
purposes of the Origin Long Term Incentive Plan 2012 (“2012 LTIP Plan”). Under the terms of the 2012 LTIP Plan, 412,541 of
these shares were transferred to the Directors and senior management as a result of certain financial targets having been
achieved. The remaining 800,330 ordinary shares continue to be held as treasury shares.
(iii) In July 2019, the issued ordinary share capital was increased by the issue of 13,978 ordinary shares of nominal value €0.01
each, at an issue price of €5.48 each pursuant to the terms of the Origin Save As You Earn Scheme.
190
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Company Financial Statements (continued) 9 Contingent liabilities
In order to avail of the exemption under Section 357 of the Companies Act 2014 the Company has guaranteed the liabilities and
commitments of all of its subsidiaries registered in Ireland. The Company has given guarantees to secure the obligations of its
subsidiaries in respect of total committed bank facilities to the value of €430 million.
10 Share-based payment
All disclosures relating to the Long-Term Incentive Plan are set out in Note 9 to the Group financial statements.
11 Statutory and other information
Auditors’ remuneration:
— statutory audit of entity financial statements
— other assurance services
Profit for the financial year
2021
€’000
2020
€’000
26
435
26
386
21,427
44,656
All of the Group audit fee was recharged by the Company to its subsidiaries in the current year.
12 Employment
The average number of persons employed by the Company (excluding Non-Executive Directors) during the year was as follows:
Management and administration
Aggregate employment costs of the Company are analysed as follows:
Wages and salaries
Social welfare costs
Cash based long term incentive plan
Pension costs:
— defined benefit schemes - profit and loss account
Share-based payment charge/ (credit)
2021
Number
2020
Number
21
22
2021
€’000
2020
€’000
7,640
362
146
23
1,016
9,187
5,099
342
35
69
(406)
5,139
191
FINANCIAL STATEMENTSNotes to the Company Financial Statements (continued) 13 Operating lease commitments
Non-cancellable operating lease rentals are payable as set out below. These amounts represent minimum future lease
payments, in aggregate, that the Company are required to make under existing lease agreements.
Within one year
In two to five years
After more than five years
14 Related party transactions
2021
€'000
185
45
-
230
In the normal course of business, the Company undertakes trading transactions with its associates and other related parties. A
summary of transactions with these related parties during the year is as follows:
2021
Sale
of goods
€’000
Purchase
of goods
€’000
Rendering
services to
€’000
Receiving
services from
€’000
Transactions with joint venture
Transactions with associates
-
-
169
295
-
-
-
-
2020
Sale
of goods
€’000
Purchase
of goods
€’000
Rendering
services to
€’000
Receiving
services from
€’000
Transactions with joint venture
Transactions with associates
-
-
-
-
222
278
-
-
Total
€’000
169
295
Total
€’000
222
278
For the purposes of the disclosure requirements of FRS 102, the term ‘key management personnel’ (i.e. those persons having
authority and responsibility for planning, directing and controlling the activities of the Company), comprises the management
team who have responsibility for managing the business and affairs of the Company. Comparatives are presented on a
consistent basis.
Salaries and other short term employee benefits
Post employment benefits
Share-based payment charge/ (credit)
Other long-term employee benefits
15 Approval of financial statements
These financial statements were approved by the Board on 28 September 2021.
192
2021
€’000
1,160
46
82
-
1,288
2020
€’000
2,609
122
(159)
24
2,596
Origin Enterprises plc Annual Report and Accounts 2021Notes to the Company Financial Statements (continued) e
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4-6 Riverwalk
Citywest Business Campus
Dublin 24
Ireland
T: +353 1 563 4900
F: +353 1 563 4916
Registered in Ireland
Registration no. 426261
www.originenterprises.com