ANNUAL REPORT &
ACCOUNTS 2022
SUSTAINABILITY REPORT
The Group has developed
a standalone Sustainability
Report for 2022. Highlights
from the report are set out
on pages XX and XX and the
full report can be accessed at
www.originenterprises.com
www.originenterprises.com
SHAPING
A MORE
SUSTAINABLE
FUTURE
SHAPING A MORE
SUSTAINABLE FUTURE
THROUGH AGRONOMY
AND AMENITY SOLUTIONS
STRATEGY
We have aligned our strategic
priorities to focus on a model of
sustainable land use.
BUSINESS REVIEW
Origin is a recognised market
leader in the provision of
Agronomy Services.
SUSTAINABILITY REPORT
The Group has a standalone
Sustainability Report,
with highlights set out on
pages 44 and 45. The full
report can be accessed at:
www.originenterprises.com
_ Read about it on page 26
_ Read about it on pages 32 to 41
15%
decrease in
fl eet emissions
since 2017
10.6 m
hectares annually
infl uenced by
advice or products
delivered by an
Origin entity
38%
of the Group’s
purchased electricity
now generated from
renewable sources
CONTENTS
8
10
STRATEGIC REPORT
At a Glance
6
Our Segments
7
Chairman’s Statement
Chief Executive’s Review
Financial Review
12
Alternative Performance Measures
Our Business
Business Model
Strategy
Key Performance Indicators
Business Review
Sustainability Report
Risk Report
46
44
20
26
32
24
30
18
GOVERNANCE
58
Board of Directors
Directors’ Report
60
Chairman’s Overview
Corporate Governance Statement
Nomination and Corporate Governance
Committee Report
Audit and Risk Committee Report
Remuneration Committee Report
64
73
66
76
80
96
94
95
104
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 Balance Sheet
Company Statement of Changes in Equity
Company Accounting Policies
Notes to the Company Financial Statements
120
178
176
177
110
111
181
105
106
108
2,643
Employees
_
Look out for our
OWN PRODUCT
PORTFOLIO
in the Business Review.
See pages 42 and 43
Contents
1
HIGHLIGHTS
FY22 DELIVERED ADJUSTED
EARNINGS PER SHARE OF
71.53 CENT AND AN IMPROVED
RETURN ON CAPITAL
EMPLOYED OF 18.3%.
_ Group revenue increase of 41.2% to
€2.3 billion, reflecting commodity
price growth
_ Operating profit of €119.7 million,
an increase of 96.3% (88.5% on an
underlying1 basis)
_ Group operating margin of 5.1%
(2021: 3.7%)
_ Adjusted diluted earnings per share
of 71.53 cent (2021: 35.50 cent)
_ Strong cash generation, with free
cash flow of €108.5 million
(2021: €49.2 million)
_ Net cash2 of €43.4 million (2021: Net
bank debt2 of €14.4 million)
_ Working capital inflow of €16.2 million
(2021: Outflow of €4.0 million)
_ Proposed final dividend of 12.85 cent per
share, giving total dividend of 16.00 cent
_ Completion of first phase of Cork
property disposals, generating cash flow
of €19.5 million
_ Completion of €40.0 million share
buyback programme at an average price
of €3.97 per share
_ Return on Capital Employed of 18.3%
(2021: 9.3%)
1. Excluding currency movements and the impact of acquisitions.
2. Before the impact of IFRS 16 leases.
2
Origin Enterprises plc Annual Report and Accounts 2022
THE GROUP'S KEY ALTERNATIVE PERFORMANCE MEASURES INCLUDE:
REVENUE
€2,342.1m
+41.2%
+38.0% at constant currency2
OPERATING PROFIT1
€119.7m
+96.3%
+89.7% at constant currency2
ADJUSTED DILUTED EPS3
71.53c
+101.5%
+94.7% at constant currency2
FREE CASH FLOW4
€108.5m
2022
2021
2020
2019
€49.2m
€64.3m
€54.0m
€108.5m
SHARE BUYBACK
€40.0m
ROCE5
18.3%
2022
2021
2020
18.3%
9.3%
7.3%
2019
13.2%
DIVIDEND PER SHARE
16.00c
2022
2021
16.00c
11.00c
2020
3.15c
2019
21.32c
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. Excluding currency movements.
3. Before amortisation of non-ERP intangible assets, net of related
deferred tax (2022: €13.0m, 2021: €8.6m) and exceptional items, net
of tax (2022: credit of €2.8m, 2021: credit of €1.2m).
4. The definition and calculation of Free Cash Flow is set out on page 18.
5. The definition and calculation of ROCE is set out on pages 18 and 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.
Highlights
3
SUSTAINABILITY
AT THE CORE OF ORIGIN
16,000+
Essential landscaping
products stocked
STRATEGY
We have aligned our strategic
priorities to focus on a model of
sustainable land use.
_ Read about it on page 26
4
Origin Enterprises plc Annual Report and Accounts 2022
STRATEGIC
REPORT
6
8
10
At a Glance
Our Segments
7
Chairman’s Statement
Chief Executive’s Review
Financial Review
12
Alternative Performance Measures
Our Business
Business Model
Strategy
Key Performance Indicators
Business Review
Sustainability Report
Risk Report
46
44
20
26
32
24
30
18
Strategic Report
5
AT A GLANCE
A FOCUSED
AGRONOMY
GROUP PROVIDING
SERVICES AND
TECHNOLOGY.
Our businesses specialise in the
provision of independent and
innovative advice, inputs and
related services to growers and
professionals in agriculture,
amenity, landscaping and ecology
markets 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.
6
Origin Enterprises plc Annual Report and Accounts 2022
99
Distribution
Points
32
Input Formulation
and Processing
Facilities
92
Demonstration
Farms
2,643
Employees
55,000
Crop Field Trials
OUR SEGMENTS
IRELAND AND
THE UK
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.
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.
REVENUE
3%
2%
28%
69%
35%
63%
OPERATING PROFIT
8%
13%
10%
79%
26%
64%
2022
2021
2022
2021
€2.34bn
€1.66bn
€119.7m
€61.0m
Ireland and the UK
Continental Europe
Latin America
IRELAND
AND
THE UK
_
More on pages 34 to 37
CONTINENTAL
EUROPE
_
More on pages 38 and 39
LATIN
AMERICA
_
More on pages 40 and 41
Strategic Report
7
PhilipinnesREVENUE CHAIRMAN’S
STATEMENT
16.00c
Dividend
€2.3bn
Revenue
Dear Shareholder
FY22 Performance
The Group has navigated a year
characterised by global macro
challenges to deliver a strong
performance in 2022. As the
outbreak of war in Ukraine,
supply chain disruptions,
inflationary pressures and
pricing volatility all presented
challenging trading conditions,
the business responded with
both agility and resilience,
leading to strong results across
all key financial metrics. Financial
highlights include an increase
in Group revenue of 41.2% to
€2,342.1m, an operating profit
rise of 96.3% to €119.7m and
adjusted diluted earnings per
share of 71.53c, up 101.5% on
last year. Details of our financial
performance are set out in the
Financial Review on pages 12
to 17.
Strategy
Building on the foundation laid
last year for a refreshed Group
strategy, the Board approved an
updated integrated corporate
strategy in 2022. This was
presented at our Capital Markets
Day in May this year, where the
Executive Team set out the
Company’s strategic positioning
and future growth strategies.
Recognising the role we play in
shaping a future of sustainable
land use, we have placed
sustainability at the core of our
business model, responding to
three key macro drivers in our
markets of sustainable agronomy,
global food security and the
emerging nature economy.
Further details on our medium-
term strategic, financial and
operational targets to 2026
are outlined on pages 26 to 29.
Progress during the year on
the execution of our strategic
priorities is illustrated in the
Strategy in Action section of this
report on page 28.
Sustainability
Our sustainability roadmap to
2030, ‘Nurturing Growth’, is
underpinned by a commitment
to operate ethically and
responsibly throughout
our businesses and in the
communities in which we
operate. We have invested
time this year putting in
place the building blocks
for a long-term framework
for the measurement and
reduction of our environmental
footprint, including progressing
both the development of an
Environmental Management
System aligned to ISO14001
standards and the setting of
long-term science-based targets
to reach net-zero GHG emissions
throughout our value chain.
8
Origin Enterprises plc Annual Report and Accounts 2022
RECOGNISING THE ROLE
WE PLAY IN SHAPING A
FUTURE OF SUSTAINABLE
LAND USE, WE HAVE
PLACED SUSTAINABILITY
AT THE CORE OF OUR
BUSINESS MODEL.
The Board, through the ESG
Committee, oversees these efforts
and continues to guide the direction
of the Company’s ESG programmes
in alignment with the strategic
ambitions of the Group.
Culture and People
In order to successfully execute on
a strategy that is responsive to the
evolving needs of our customers
and true to our purpose, it is vital
that we continue to empower our
people and promote a culture of
equality, diversity and inclusion. This
focus is reflected in a programme of
initiatives built around our five values
of people, innovation, integrity,
partnerships and community. Health,
safety and wellbeing remains high on
our agenda.
The Board had the opportunity
to meet with local teams during
the year as part of our ‘Let’s Talk’
employee engagement programme,
beginning with a virtual meeting with
our colleagues in Fortgreen in Brazil.
As COVID-19 restrictions began to
ease, we were pleased to gradually
resume in-person site visits and see
operations on the ground, including
trips to our Irish and UK fertiliser and
amenity businesses. On behalf of the
Board, I would like to thank all of our
employees for their contribution to
the success of the Group in 2022.
Shareholder Returns
The Group’s strong performance over
the year has allowed the Board to
recommend a final dividend of 12.85c
per share, subject to approval at
the Annual General Meeting ('AGM')
on 22 November 2022. Together
with the interim dividend of 3.15c
per share paid on 24 June 2022,
this will bring the total dividend per
ordinary share for the financial year
to 16.00c, an increase of45% on
2021. We conducted a share buyback
programme during the year, which
returned €40 million to shareholders,
and are planning to return up to a
further €20 million under a new
buyback programme to be launched
shortly.
Chair Succession
As announced in June, Gary Britton,
Senior Independent Director, has
been appointed as Chair Designate
to succeed me as Chairman at the
conclusion of the Company’s AGM on
22 November. It has been a privilege
to lead the Board over the past seven
years and I wish Gary all the best as
he takes the Group forward to deliver
on its strategic ambitions in the
coming years.
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. Full details of our approach
to governance are set out in the
Corporate Governance Statement on
pages 66 to 72.
As part of ongoing Board renewal
and in planning for the retirement
of Non-Executive Directors Hugh
McCutcheon and Kate Allum from
the Board in November 2021, we are
pleased to have welcomed two new
Non-Executive Directors this year.
Aidan Connolly and Lesley Williams
both joined the Board in October
2021. With these Board changes,
we have maintained 38% female
representation on the Board and
further strengthened the breadth
and diversity of expertise amongst
Board members.
I would like to extend an appreciation
to all members of the Board for their
continued dedication and support for
the business.
Looking Ahead
Governments and economies
around the world continue to
work through the impact of global
energy, commodity and general
inflationary pressures. We are
confident, however, that the strong
performance of the business this
year, the reinvigorated Group
strategy and our resilient business
model all provide a path forward for
sustainable growth and value creation
for all our stakeholders.
On behalf of the Board, I would like
to thank all our shareholders for the
continued support.
Rose Hynes
Non-Executive Chairman
26 September 2022
Strategic Report
9
CHIEF EXECUTIVE’S REVIEW
Dear Shareholder
FY22 saw strong agricultural commodity price
growth and volatile trading conditions across all of
the Group’s three segments throughout the financial
year. Despite these challenges, Origin delivered
significantly improved financial returns and a strong
operating performance, supported by favourable
conditions across all markets in the key planting and
application periods of the year, in contrast to the
previous two years, which were impacted by extreme
weather and COVID-19.
The war in Ukraine and ongoing global energy and
supply disruptions have resulted in exceptional price
volatility for feed and fertiliser raw materials. Strong
on-farm sentiment, bolstered by high crop prices,
supported the Group in successfully navigating this
price volatility across each segment.
These challenges further highlight the urgent need
for sustainable practices. During 2022 we continued
to make progress in driving positive environmental
outcomes, fostering equality, diversity and inclusivity,
and supporting ongoing sustainable production across
the agriculture, amenity and landscaping markets
we serve.
The Group delivered strong increases in revenue,
operating profit and EPS. Return on capital employed
also grew to 18.3%, driven by the improved earnings
performance. The Group also delivered strong free
cash flow of €108.5 million, including a working
capital inflow of €16.2 million. Our net cash position
of €43.4 million at year end compares to a net debt
position of €14.4 million in FY21. This strong net cash
position reflects the impact of certain one-off items
but was also delivered on top of the return of €40.0
million to shareholders during the year through our
share buyback programme.
PRINCIPAL HIGHLIGHTS ARE AS FOLLOWS:
FINANCIAL
_ Operating profit of €119.7 million,
an increase of 96.3%
_ Adjusted diluted EPS of 71.53
cent (2021: 35.50 cent)
_ Net cash of €43.4 million (2021:
Net bank debt of €14.4 million)
_ Dividend of 16.00 cent per share
OPERATIONAL
_ Group operating margin of 5.1%
(2021: 3.7%)
_ Completion of €40.0 million
share buyback programme
_ Completion of the first phase
of Cork property disposals,
generating cash flow of €19.5
million
STRATEGIC
_ Hosting of Capital Markets Day,
outlining our key medium-
term strategic, financial and
operational objectives
_ Acquisition of Envirofield Limited
in the UK
10
Origin Enterprises plc Annual Report and Accounts 2022
FY22 Progress
As I have already outlined, FY22
delivered a strong operational and
financial result, with the principal
highlights set out above.
Divisional Review
Ireland and the UK
Ireland and the UK delivered an
improved performance in FY22
compared to the prior year, delivering
an increase in underlying revenue of
47.0%, while underlying operating profit
increased 125.8%.
There was an underlying volume
reduction for agronomy services and
crop inputs of 7.3% in the period. While
raw material price inflation was the
primary driver of revenue growth, it
negatively impacted fertiliser volumes
during the year. The reduction in
fertiliser volumes of 22.6% was partially
offset by a strong volume performance
across our seed and crop protection
portfolios.
FY22’s performance was supported
by strong on-farm sentiment and
a positive trading environment, set
against the backdrop of a significantly
better crop mix at planting, excellent
crop establishment and ideal
application and growing conditions.
Despite the extremely dry weather
conditions experienced in Q4, to date
the overall harvest has been strong.
Operating margin increased to 5.9%
from 3.7% driven by management of
the exceptional raw material pricing
volatility in the market and a higher
intensity of crop input spend by
farmers and growers, influenced by
strong output prices and favourable
weather.
The war in Ukraine is having a profound
impact on agriculture in the region.
30% of arable land is estimated to be
in either Russian occupied regions or
unsafe areas and agricultural production
is forecast to be 35% down from 2021
levels. Furthermore, with the area
under agricultural production declining,
so too has farmer liquidity. To align
with the more challenging operational
environment and smaller market, the
Group took the difficult, but necessary,
decision in August to reduce the size of
our team in Ukraine. This included the
provision of a comprehensive financial
assistance package and additional
supports to those impacted.
Key judgements in relation to Ukraine
are addressed in the Audit and Risk
Committee Report on page 76.
A full business review of performance in
Continental Europe is set out on pages
38 and 39.
Latin America
Latin America delivered a strong
performance in FY22, sustaining the
momentum of FY21, with operating
profit increasing to €9.7 million from
€6.3 million in FY21, with an underlying
increase of €2.4 million.
There was an underlying increase in
crop input volumes of 43.4%. The
volume development and underlying
growth is driven by increases in our
core product range and a significant
increase in controlled release fertiliser
volumes, following the completion of
the Group’s new production facility
in Minas Gerais in the second half
of FY21. Volume growth during the
year was driven equally by controlled
release fertiliser volumes and the core
product portfolio.
A full business review of performance in
Ireland and the UK is set out on pages
34 to 37.
A full business review of performance
in Latin America is set out on pages 40
and 41.
Continental Europe
Continental Europe (‘CE’) delivered
a strong underlying performance in
Poland and Romania in FY22, with the
overall result impacted by a reported
loss in Ukraine as a consequence of
the Russian invasion in February 2022.
CE’s underlying business volumes
reduced by 5.4% in the period, with
overall volume increases in Poland
and Romania offset by reductions in
Ukraine. Operating margin in FY22 for
CE was 3.2% (FY21: 3.8%).
Shareholder Returns
Following an interim dividend of 3.15
cent, the Board is proposing a final
dividend of 12.85 cent per share,
bringing the total dividend payment
per share to 16.00 cent. Following on
from the €40.0 million share buyback
programme in FY22, we intend to return
a further €20.0 million to shareholders
by way of share buyback launching on
28 September 2022 and which may
continue until 31 March 2023.
Board Changes
In June 2022, the Group announced
that Gary Britton was appointed Chair
Designate to succeed Rose Hynes
at the conclusion of the 2022 AGM.
On behalf of the Origin management
team, I sincerely thank Rose for her
contribution to the Group during her
tenure as Chairman and wish her well
in her future endeavours. I look forward
to working with Gary to drive the next
phase of growth and development of
the business.
Capital Markets Day
During the year, we set out our key
medium-term strategic, financial,
operational and ESG objectives at our
Capital Markets Day. Our FY22 results
represent a strong foundation from
which to achieve these targets.
Current Trading and Outlook
FY22 was characterised by several
challenging macro-economic factors,
including significant inflation, increasing
energy costs and disrupted supply
chains, which led to an exceptionally
volatile trading environment. While
these conditions are likely to persist,
with the Group’s strong balance sheet,
market positions, deep customer
relationships, access to diverse sources
of product supply, and established
routes to market, Origin is well
positioned to deliver the financial,
strategic and ESG objectives outlined
at the recent Capital Markets Day.
Sean Coyle
Chief Executive Officer
26 September 2022
Strategic Report
11
FINANCIAL
REVIEW
This Financial Review provides an overview of the Group’s
financial performance for the year ended 31 July 2022 and
of Origin’s financial position at that date.
OVERVIEW OF RESULTS
_ Group revenue increase of 41.2% to €2.3
billion, reflecting commodity price growth
_ Operating profit1 of €119.7 million, an
increase of 96.3% (88.5% on an
underlying basis)
_ Group operating margin of 5.1% (2021: 3.7%)
_ Adjusted diluted earnings per share3 of 71.53
cent (2021: 35.50 cent)
_ Strong cash generation with free cash flow
of €108.5 million (2021: €49.2 million)
_ Net cash5 of €43.4 million (2021: Net bank
debt5 of €14.4 million)
_ Working capital inflow of €16.2 million
(2021: Outflow of €4.0 million)
_ Proposed final dividend of 12.85 cent per
share, giving total dividend of 16.00 cent
71.53c
Adjusted Diluted EPS
€108.5m
Free Cash Flow
12
Origin Enterprises plc Annual Report and Accounts 2022
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
Group net cash/(bank debt)5
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
Reporting Segments
The Group has three separate reporting segments as set out below.
2022
€’m
2,342.1
119.7
6.8
126.5
(11.1)
115.4
(25.4)
90.0
71.53
43.4
2022
€’m
79.9
15.2
(2.3)
(2.8)
90.0
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
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
2022
Revenue
€’m
1,614.4
654.5
73.2
2,342.1
Operating profit1
€’m
94.5
15.6
9.6
119.7
2021
Revenue
€’m
1,049.3
570.1
39.0
1,658.4
Operating profit1
€’m
39.1
15.6
6.3
61.0
The result from the Group’s associates and joint venture undertaking was €6.8million (2021: €2.8 million).
Revenue
Group revenue increased by 41.2% from €1,658.4 million in the prior year to €2,342.1 million. On an underlying basis
revenue increased by 38.6%, driven by the exceptionally high fertiliser raw material pricing environment, offset by
reduced fertiliser demand and strong growth in both crop protection and seed volumes.
The underlying reduction in agronomy services and crop input volumes, excluding crop marketing volumes, was 5.4%
for FY22.
Strategic Report
13
Operating Profit1
Operating profit1 increased by 96.3% to €119.7 million compared to €61.0 million in the previous year. On an
underlying basis, operating profit1 increased by €54.0 million (88.5%), driven by strong contributions across all three
segments.
Group operating margin increased from 3.7% to 5.1% in FY22. This was principally driven by the Ireland and UK
segment, which saw its operating margin increase from 3.7% in FY21 to 5.9% in FY22.
Operating Profit Bridge
+88.5%
€54.0m
+1.2%
€0.7m
+6.6%
€4.0
+96.3%
€119.7m
€61.0m
FY21
Underlying
Acquisitions/
Disposals
Currency
FY22
Associates and Joint Venture
Origin’s share of the profit after taxation from associates and joint venture amounted to €6.8 million in the period
(2021: €2.8 million). This performance benefitted from exceptional operating and trading conditions and is set
against a challenging prior year, which was impacted by a facility fire in our animal feed business, R&H Hall, at the
Port of Cork, Ireland and shipping challenges.
Finance Expense and Net Bank Debt
Net cash4 at 31 July 2022 was €43.4 million (net debt4 of €5.1 million including IFRS 16 lease debt) compared to net
bank debt4 of €14.4 million (€60.5 million including IFRS 16 lease debt) at the end of the prior year, an improvement
of €57.8 million. The movement is primarily driven by the strong FY22 operating performance and a net working
capital inflow in the year.
Net finance costs amounted to €11.1 million, which represents an increase of €2.5 million on the prior year. Excluding
the impact of IFRS 16, there was an increase in net finance costs of €2.4 million, reflecting increased interest rates,
year-on-year, across the Group.
Taxation
The effective tax rate for the year ended 31 July 2022 was 23.0% (2021: 18.5%), and reflects the mix of geographies
where profits were earned in the year.
14
Origin Enterprises plc Annual Report and Accounts 2022
Exceptional Items
Exceptional items net of tax amounted to a credit of €2.8 million in the year (FY21: credit of €1.2 million). These
principally relate to the disposal of investment properties and are summarised in the table below:
Year ended 31 July
Gain on disposal of investment properties
Other
Total exceptional items, net of tax
2022
€’m
(2.7)
(0.1)
(2.8)
Adjusted Diluted Earnings per Share3 (‘EPS’)
Adjusted diluted EPS3 amounted to 71.53 cent per share, an increase of 101.5% from FY21. The year-on-year increase
of 36.03 cent per share can be summarised as follows:
Impact of
Underlying increase
Acquisitions
Disposals
Currency
Impact of share buyback
Total
Cent per share
31.10
1.35
(0.74)
2.41
1.91
36.03
%
87.6%
3.8%
(2.1%)
6.8%
5.4%
101.5%
Excluding the impact of the completed €40.0 million share buyback, the adjusted diluted earnings per share is 69.62 cent.
Dividends
The Directors are proposing a final dividend of 12.85 cent per ordinary share for approval at the AGM in November
2022, bringing the total dividend payment to 16.00 cent. Subject to shareholder approval at the AGM, this final
dividend will be paid on 6 February 2023 to shareholders on the register on 13 January 2023.
Share Buyback
On 9 March 2022 the Group commenced a share buyback programme to repurchase up to €40.0 million of ordinary
shares. The programme completed on 8 July 2022 with 10,086,258 shares purchased at an average price of €3.97.
1,084,797 shares were cancelled from Treasury shares on 29 July 2022 and further cancellations will be put into
effect in due course.
The Group intends to launch another share buyback programme of up to €20.0 million. The buyback programme
will commence on 28 September 2022 and may continue until 31 March 2023 subject to shareholder approval of a
renewed repurchase authority at the 2022 AGM, market conditions, the ongoing capital requirements of the business
and termination provisions customary for arrangements of this nature. The purpose of the share buyback programme
is to reduce the share capital of the Company and the repurchased ordinary shares will be held in treasury pending
their cancellation or re-issue in due course.
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 2022, the Group had unsecured committed banking facilities of €400.0 million (2021: €430.0 million), with
pricing linked to ESG performance, of which €33.8 million will expire in 2024 and €366.2 million in 2026.
Cash Flow and Net Bank Debt
Net cash4 at 31 July 2022 was €43.4 million compared to net bank debt4 of €14.4 million at the end of the prior 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 2022 included:
Covenant
2022
Full year times
2022
Half year times
2021
Full year times
2021
Half year times
Net bank debt: EBITDA
Maximum 3.5x
EBITDA: Net interest
Minimum 3.0x
-
13.83
0.61
11.10
0.13
10.36
2.76
6.75
Strategic Report
15
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/Property, Plant and Equipment
Dividends paid
Share buyback
Lease payments
Other
Increase in cash
Opening net bank debt
Translation
Closing net cash/(bank) debt5
2022
€’m
146.0
16.2
(34.3)
127.9
(0.2)
127.7
3.0
(6.9)
(17.2)
(1.5)
2.9
20.5
(13.4)
(40.0)
(13.5)
(0.6)
61.0
(14.4)
(3.2)
43.4
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)
Working Capital
For the year ended 31 July 2022, there was a working capital inflow of €16.2 million. Improvements in the mix of cash
versus credit sales and certain one-off items were partly offset by an underlying working capital outflow, due to higher
commodity prices. The year end working capital position includes the net impact of trade payables which have been
suspended in accordance with international sanctions imposed by authorities in response to the Russian invasion of
Ukraine in 2022 of approximately €40.0 million. We continue to closely monitor the situation with regard to sanctions
and act accordingly. Excluding the impact of suspended payments, the Group would have had a modest net bank debt4
position at year end. 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 18.3% in 2022 (2021:
9.3%), 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
2022
€’m
532.7
691.4
126.6
18.3%
2021
€’m
538.1
684.1
63.9
9.3%
Free Cash Flow
The Group generated free cash flow in the year of €108.5 million (2021: €49.2 million). A further analysis on the
calculation of Free Cash Flow is set out on page 18.
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 2022 are as follows:
Non-current assets
Asset in defined benefit schemes
16
Origin Enterprises plc Annual Report and Accounts 2022
2022
€’m
7.8
2021
€’m
5.9
The movement during the year can be summarised as follows:
Net asset at 1 August 2021
Current service costs
Other finance expense, net
Contributions paid
Remeasurements
Translation
Net asset at 31 July 2022
€’m
5.9
(0.5)
-
1.4
1.0
-
7.8
The remeasurements of €1.0 million principally relate to changes in financial assumptions offset by remeasurement
losses 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 €2.94 to €4.64 during the year from 1 August 2021 to 31 July 2022.
The Group’s share price at 31 July 2022 was €3.96 (31 July 2021: €3.44).
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.
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.
We engage with institutional investors in numerous one-on-one meetings, as well as at roadshows and equity
conferences. During FY22, meetings were held with 174 institutional investors. Engagement was facilitated through a
combination of in-person meetings and remotely using virtual conferences and video calls.
In May 2022 Origin hosted a Capital Markets Day in London, to set out the Group’s key medium-term strategic,
financial, operational and ESG objectives. The event attracted a strong in-person attendance of analysts,
shareholders and institutional investors, in addition to a large number of participants joining via a live broadcast on
Origin’s website.
Details of Origin’s Capital Markets Day 2022, including the presentation and webcast replay, are available on the
investor relations section of the website: https://originenterprises.com/capital-markets-day-2022.
TJ Kelly
Chief Financial Officer
26 September 2022
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 (2022: €13.0m, 2021: €8.6m) and exceptional items, net of tax (2022:
credit of €2.8m, 2021: credit of €1.2m).
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.
Strategic Report
17
ALTERNATIVE
PERFORMANCE
MEASURES
Certain financial information set out in this Annual Report is not defined under International Financial Reporting Standards (‘IFRSs’).
These key Alternative Performance Measures (‘APMs’) represent additional measures in assessing performance and for
reporting both internally and to external users. As a result of rounding, there are immaterial tot checking differences noted
in the tables below.
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
2022
€’m
115.3
(3.9)
15.2
(6.8)
119.7
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 €108.5 million (2021: €49.2 million).
EBITDA (excluding associates and joint venture)
Interest paid
Tax paid
Routine capital expenditure
Working capital inflow/(outflow)
Dividends received
Free cash flow
2022
€’m
130.4
(8.0)
(26.2)
(6.9)
16.2
3.0
108.5
2021
€’m
56.4
(1.1)
8.6
(2.8)
61.1
2021
€’m
69.3
(5.8)
(10.1)
(4.7)
(4.0)
4.5
49.2
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 2022
Return on Capital Employed
For the purposes of the Annual Report, the definitions of Return on Invested Capital ('ROIC') and Return on Capital
Employed are the same. Return on capital employed is a key performance indicator for the Group, with Origin delivering
18.3% in 2022 (2021: 9.3%), 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
2022
€’m
1,512.4
(1,109.6)
5.1
52.0
72.8
532.7
691.4
115.3
(3.9)
15.2
126.6
18.3%
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%
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
2022
€’m
115.3
(3.9)
15.2
126.6
2021
€’m
56.4
(1.1)
8.6
63.9
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
2022
€’m
115.3
10.7
(3.9)
15.2
(6.8)
130.4
2021
€’m
56.4
8.2
(1.1)
8.6
(2.8)
69.3
Strategic Report
19
OUR BUSINESS
Origin is an international
Agronomy-Services Group with
operations in Ireland and the UK,
Continental Europe and Latin America
('LATAM'). The Group supports growers
and professionals in agriculture, amenity,
landscaping and ecology markets,
through the provision of specialist
advice, inputs and digital solutions.
CROP NUTRITION
We develop science-led,
innovative products and services
which improve soil fertility,
nutrient use efficiency and crop
productivity.
_
Read more
about Origin's
‘Own Product
Portfolio’ on
pages 42 and 43
20
Origin Enterprises plc Annual Report and Accounts 2022
INTEGRATED
AGRONOMY
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.
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.
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.
_
Read
more about
Sustainability
on pages 44
and 45
Strategic Report
21
OUR BUSINESS (continued)
WHAT IS
AGRONOMY?
WHAT IS AN
AGRONOMIST?
WHAT DO
AGRONOMISTS DO?
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.
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.
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 Strategy
on page 26
_
More on our Business
Model on page 24
_
More on Our Business
on page 20
OUR
BRANDS
IRELAND AND THE UK
CONTINENTAL EUROPE
Poland | Romania | Ukraine
LATIN AMERICA
22
Origin Enterprises plc Annual Report and Accounts 2022
OUR APPROACH TO
INTEGRATED AGRONOMY:
APPLICATION RESEARCH
AND ANALYSIS
_ Investment in research and
development to optimise
crop productivity.
_ 55,000 trial units managed
across the UK, Continental
Europe and Latin America.
PRESCRIPTION
DEVELOPMENT
_ Advise primary producers on all
components of crop and field
management.
_ Recommendation of customised
solutions to optimise crop yields
and quality.
_ Collaboration with key industry
_ Ensuring environmental
partners and universities.
_ Analysis of the needs of
primary producers.
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.
_ Experienced and committed
people.
_ Strong on-farm presence.
_ Flexible operating facilities
to cater for high seasonal
variations in demand across our
Agri-Input and Feed businesses.
INNOVATION AND R&D
_ Leading bespoke fertiliser blender.
_ Continuous and technically-led
product development.
_ Environmentally sustainable
product offering.
_ Continuing benchmarking
of production and plant
performance.
SUPPLY CHAIN
_ Strategic locations and
geographic spread.
_ Well-invested blending
and formulation facilities.
_ Market share provides
supply chain flexibility.
_ Strong supplier partnerships.
_ Focus on health and safety.
Strategic Report
23
BUSINESS MODEL
OUR SEGMENTS
IRELAND
AND THE UK
CONTINENTAL
EUROPE
LATIN
AMERICA
WHAT WE DO
_ Business-to-Business
Agri-Inputs
_ Integrated Agronomy
and On-Farm Services
_ Digital Agricultural
Services
_ Amenity
Solutions
WHAT SETS US APART
_ Our Approach to
Integrated Agronomy
_ Our Approach to
Business-to-Business
Agri-Inputs
INPUTS
PEOPLE
PARTNERSHIPS
FINANCIAL &
STRATEGIC
PLANNING
KNOWLEDGE
& IP
SUPPLY CHAIN
& LOGISTICS
Nurturing our environment, Nurturing our society
24
Origin Enterprises plc Annual Report and Accounts 2022
HOW WE ADD VALUE
OUR OFFER
OUR BRANDS
Nutrition
Crop Protection
Seed
Digital
Expertise / Advice /
Prescription
Amenity Solutions
Agrii
Goulding
Fortgreen
RHIZA
Origin Amenity Solutions
Origin Fertilisers
PB Kent
Linemark
Green-tech
Origin Digital
OUR CHANNELS
OUR END-USERS
Business-to-Business
Agronomists
Farmers and Growers
Amenity Professionals
and Landscapers
Nurturing our environment, Nurturing our society
OUTPUTS
PEOPLE
PARTNERSHIPS
FINANCIAL &
STRATEGIC
PLANNING
KNOWLEDGE
& IP
SUPPLY CHAIN
& LOGISTICS
YIELD
ENHANCEMENT
PROFITABILITY AND
COMPETITIVENESS
ENVIRONMENTAL
STEWARDSHIP
MAXIMISE
SHAREHOLDER
RETURN
_
Read our Financial
Review on page 12
_
Read our Sustainability
Report on page 44
_
See our KPIs
on page 30
Strategic Report
25
STRATEGY
Origin is an international Agronomy-
Services group, providing specialist
advice, inputs and digital solutions
to growers and professionals in
agriculture, amenity, landscaping
and ecology markets.
OUR STRATEGY
_
Click here to see our Capital Markets Day presentation:
https://originenterprises.com/capital-markets-day-2022
OUR
PURPOSE
OUR
VISION
GROWTH
DRIVERS
To optimise the
sustainable use of land
through innovation and
integrated solutions.
To be the leading and trusted
partner of choice for growers
and professionals in agriculture,
amenity, landscaping and
ecology markets.
We have aligned our strategic priorities to
focus on a model of sustainable land use
that underpins food security, combats
climate change and restores biodiversity
and ecosystem services. Our business model
responds to three macro-growth drivers in
our markets: Sustainable Agronomy, Global
Food Supply Responsiveness and Emerging
Nature Economy.
FEEDING
OURSELVES
SUSTAINABLE
AGRONOMY
SUSTAINABLE
LAND USE
MARKET
MACRO-GROWTH
DRIVERS
GLOBAL
FOOD SUPPLY
RESPONSIVENESS
STABILISING
CLIMATE
EMERGING
NATURE ECONOMY
RESTORING
BIODIVERSITY
26
Origin Enterprises plc Annual Report and Accounts 2022
SUSTAINABLE AGRONOMY
Sustainable agronomy means good stewardship of the natural systems and
resources that humanity depends on. Delivering on the need for sustainable
agronomy is built on Origin’s strong heritage of providing market-leading
technical advice and solutions to growers and professionals across
agriculture and amenity markets in the UK and Ireland and supporting
food production systems in Continental Europe and LATAM. Our offering is
delivered through four strategic pillars for action:
_ Balancing sustainability and outputs;
_ Soil resilience and plant nutrition;
_ Innovative and integrated plant protection; and
_ Enhancing biodiversity and protecting natural capital.
Utilising our digital agronomy capabilities, we will continue to harness data
and emerging technologies to deliver value-add solutions that improve
efficiencies across all four pillars.
GLOBAL FOOD SUPPLY RESPONSIVENESS
We recognise the necessity to adopt technologies and innovative tools
and practices, in order to meet the growing global demand for food in
the coming decades. Our approach to global food supply responsiveness
focuses on closing yield gaps and creating efficiencies within agricultural
production systems that support the goal to eradicate food insecurity.
Integration of new products and solutions into our portfolios across
existing markets is central to our objective as we support the transition
from legacy plant protection portfolios to bio-solutions and specialty
nutrition product technologies focused on yield optimisation.
EMERGING NATURE ECONOMY
The natural world, its inherent assets and the ecosystem services
provided, fundamentally underpin our economies - from agriculture and
forestry to leisure and tourism. In recognition of the need to protect the
environment and preserve key habitats, we’re adopting an approach to
promoting sustainable land management that aims to leave the natural
environment in a measurably better state than it was beforehand.
In addition to augmenting our existing offering within agricultural and
amenity markets, we plan to accelerate investment in products and
services that enhance environmental and ecological benefits across all
sustainable land use markets.
STRATEGIC
PRIORITIES
Our strategic priorities
are key in enabling
delivery against the
macro growth drivers
and they ensure a
common approach to
performance assessment
across the Group.
Building and maintaining
customer-centric,
market-leading business
models in the provision
of technical advice and
services in our chosen
market segments in UK
and Ireland, Continental
Europe and LATAM.
Transitioning our product
and services portfolio to
optimise yields sustainably
with specific focus on
Biosolutions, Specialty
Nutrition Technologies and
Digital Technologies.
Accelerating Origin's
participation in
Environmental and
Ecological markets within
and beyond agriculture.
Strategic Report
27
STRATEGY CONTINUED (continued)
STRATEGY IN ACTION
KEY ACHIEVEMENTS IN FY2022
BUILDING AND
MAINTAINING
CUSTOMER-CENTRIC
MARKET-LEADING
BUSINESS MODELS
TRANSITIONING
OUR PRODUCT AND
SERVICES PORTFOLIO
ACCELERATING OUR
PARTICIPATION IN
ENVIRONMENTAL
AND ECOLOGICAL
MARKETS
_ Launched our Soil Resilience
Strategy through Agrii UK as
a novel approach to utilise
carbon:clay ratios and active
carbon to measure soil health
on-farm.
_ Released a world-first cloud-free
imagery service, revolutionising
the way satellite imagery is
used in precision agriculture
by growers.
_ Acquired Scottish-based seed
merchants and GPS technology
provider, George Duncan
Agrisolutions.
_ Opened a coated Urea production
facility in Romania.
_ Greater than a three–fold
increase in LATAM controlled
release fertiliser sales following
the completion of the Group’s
new production facility in Minas
Gerais.
_ 30% sales growth in the Group’s
Bio-stimulant, Adjuvant and
Micronutrient ('BAM') portfolio,
with in-house products growing
by 45%.
_ Aquired Envirofield Limited in the
UK to enhance our environmental
and agricultural field research
capabilities.
_ Protected more than ten million
newly planted trees over the last
12 months through our Green-
tech operations.
_ Provided wild flower seeds to
cover over 1,000 ha of land in
urban and amenity settings.
INVESTMENT CASE:
CREATING VALUE FOR ALL STAKEHOLDERS
_ Long-term partnerships as trusted advisors
and input providers to farmers, growers and
professionals in agriculture, amenity, landscaping
and ecology markets.
_ 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 to optimise sustainable use of land.
_ Strong cash generation and conversion capabilities.
_ Promoting opportunities to enhance biodiversity
and green space use.
28
Origin Enterprises plc Annual Report and Accounts 2022
Details of the Origin Capital Markets Day 2022,
including a playback function, is available on the
investor relations section of the website:
http://www.originenterprises.com.
CAPITAL MARKETS DAY
During the year the Group held a successful Capital
Markets Day in London, where our refreshed strategy,
sustainability approach and mid-term financial
targets were outlined. This ambition was built around
a set of strategic targets from FY2022 to FY2026. The
management team at Origin is focused on the Group’s
strategy to ensure continued success for all our
stakeholders. The event attracted a strong in-person
attendance, in addition to a large number of investors
availing of a live broadcast via Origin’s website.
CUMULATIVE OPERATING
PROFIT TARGET
FY22 TO FY26
FY22 – FY26
CUMULATIVE GROUP
OPERATING PROFIT1
€415m
2017-2021
CUMULATIVE GROUP
OPERATING PROFIT1
€329m
1. Prior to contribution from associates and joint venture
€240m
IRELAND AND
THE UK
€75m
CONTINENTAL
EUROPE
€50m
LATIN
AMERICA
€50m
M&A IMPACT
STRATEGIC ENABLERS
Our strategic enablers are key disciplines that contribute to our operating effectiveness and enable us to deliver
against our strategic priorities.
WORKING
CAPITAL
DISCIPLINE
PRODUCT
INNOVATION
AND MIX
GROWTH IN
BIOLOGICALS
ECOLOGY
SERVICES
ACQUISITION
STRENGTHEN
FOUNDATIONS
INVEST FOR
GROWTH
IMPROVED
USE OF
TECHNOLOGY
INVEST IN
OUR PEOPLE
BROADEN
AMENITY
SERVICE OFFER
LANDSCAPING
PRODUCTS
BOLT-ONS
Strategic Report
29
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’)
OPERATING
PROFIT
RETURN ON
CAPITAL
EMPLOYED
(‘ROCE’)
DIVIDEND
FREE CASH
FLOW RATIO
CARBON EMISSIONS
HEALTH, SAFETY
GENDER
(SCOPE 1 AND 2)
AND WELLBEING
DIVERSITY AT
Description Measures adjusted
diluted EPS in
the current year
compared to the
prior year.
Measures operating
profit contribution
from subsidiary
undertakings.
Measures the total
dividend per ordinary
share proposed in the
financial 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 free cash flow
Total Scope 1 and 2 carbon
Measures the Group’s
as a percentage of profit
emissions expressed in
Reportable Injury Rate
Measures female
representation
after tax of wholly-owned
kilotonnes (kts) of CO2.
(RIR) per 1,000 employees.
in leadership and
businesses, excluding
exceptional items and
amortisation of non-ERP
related intangible assets.
Link to
Strategy
Current
Year
71.53C €119.7m 18.3%
16.00c
130.5%
20.6KTS 6.41
24%
LEADERSHIP AND
MANAGEMENT
LEVEL
management positions
across the Group
as a percentage of
total leadership and
management employees.
Historic
Result
Strategic
Ambition
2019
2020
2021
2022
2019
2020
2021
2022
2019
2020
2021
2022
2019
2020
2021
2022
52.65c 25.69c 35.50c 71.53c
€82.3m €44.1m €61.0m €119.7m
13.2% 7.3%
9.3% 18.3%
21.32c
3.15c
11.00c 16.00c
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
cumulative operating
profit of €415m from
FY22 - FY26.
A key element of the
Group’s strategic
ambition is to deliver
ROCE of 12 – 15%.
The Group’s strategic
ambition is to deliver
a dividend policy with
a payout ratio of 50%
of Free Cash Flow.
30
Origin Enterprises plc Annual Report and Accounts 2022
A key element of the
The Group is developing
The Group aims to drive
Group’s strategic ambition
science-based climate
our RIR down to <6
is to deliver a Free Cash
targets which will be put
per 1,000 per year by
Increase female
representation
in leadership and
Flow Ratio of >80%.
forward for validation by
implementing focused risk
management positions
the Science-Based Targets
reduction strategies.
to 30% by 2030.
Initiative ('SBTi') in FY23.
Strategic Priorities and Enabler Key
STRATEGIC PRIORITIES
Building and maintaining customer-centric, market-leading
business models
Transitioning our product and services portfolio
Accelerating Origin's participation in Environmental
and Ecological markets
STRATEGIC ENABLERS
Strengthening foundations
Investing for growth
KPI
ADJUSTED
DILUTED
EARNINGS PER
SHARE (‘EPS’)
OPERATING
PROFIT
RETURN ON
CAPITAL
EMPLOYED
(‘ROCE’)
DIVIDEND
FREE CASH
FLOW RATIO
CARBON EMISSIONS
(SCOPE 1 AND 2)
HEALTH, SAFETY
AND WELLBEING
Description Measures adjusted
diluted EPS in
the current year
compared to the
prior year.
Measures operating
profit contribution
from subsidiary
undertakings.
ROCE is defined as
Measures the total
Group earnings before
dividend per ordinary
share proposed in the
financial year.
interest, tax and
amortisation
of non-ERP related
intangible assets taken
as 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.
Total Scope 1 and 2 carbon
emissions expressed in
kilotonnes (kts) of CO2.
Measures the Group’s
Reportable Injury Rate
(RIR) per 1,000 employees.
GENDER
DIVERSITY AT
LEADERSHIP AND
MANAGEMENT
LEVEL
Measures female
representation
in leadership and
management positions
across the Group
as a percentage of
total leadership and
management employees.
Link to
Strategy
Historic
Result
Current
Year
71.53C €119.7m 18.3%
16.00c
130.5%
20.6KTS 6.41
24%
2019
2020
2021
2022
2019
2020
2021
2022
2021
2022
2019
2020
2021
2022
Strategic
Ambition
The Group’s aim is
to target growth in
A key element of the
A key element of the
The Group’s strategic
Group’s strategic
Group’s strategic
ambition is to deliver
adjusted diluted EPS,
ambition is to deliver
ambition is to deliver
a dividend policy with
while recognising
cumulative operating
ROCE of 12 – 15%.
a payout ratio of 50%
that factors outside
profit of €415m from
of Free Cash Flow.
our control may
cause inter-year
variances.
FY22 - FY26.
90.0% 240.9% 114.9% 130.5%
23.1kts 20.9kts 20.3kts 20.6kts
6.12
6.41
21%
22%
23%
24%
A key element of the
Group’s strategic ambition
is to deliver a Free Cash
Flow Ratio of >80%.
The Group is developing
science-based climate
targets which will be put
forward for validation by
the Science-Based Targets
Initiative ('SBTi') in FY23.
The Group aims to drive
our RIR down to <6
per 1,000 per year by
implementing focused risk
reduction strategies.
Increase female
representation
in leadership and
management positions
to 30% by 2030.
Strategic Report
31
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.
SUSTAINABLE LAND USE
Sustainable
Agronomy
Global Food Supply
Responsivness
Emerging Nature
Economy
IRELAND
AND
THE UK
Review on pages 34 to 37
CONTINENTAL
EUROPE
Review on pages 38 and 39
LATIN
AMERICA
Review on pages 40 and 41
32
Origin Enterprises plc Annual Report and Accounts 2022
PhilipinnesREVENUEREVENUE
IRELAND AND
THE UK
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.
REVENUE:
€1,614.4m
CONTINENTAL
EUROPE
Origin is a recognised market
leader in the provision of
Agronomy Services and Crop
Inputs in our Continental
European markets.
Ireland
UK
_
More on Ireland and the UK on pages 34 to 37
Poland
Ukraine
REVENUE:
€654.4m
_
More on Continental Europe on pages 38 and 39
Romania
LATIN
AMERICA
Origin has a controlling interest in
Fortgreen. Based in Paraná State,
Brazil, and with recent investment
in facilities in Minas Gerais State,
Fortgreen is an established leader
in the development and marketing
of value-added crop nutrition and
speciality inputs.
Brazil
Minas
Gerais State
REVENUE:
€73.2m
Paraná State
_
More on Latin America on pages 40 and 41
Strategic Report
33
PhilipinnesREVENUEREVENUE BUSINESS REVIEW
IRELAND AND
THE UNITED
KINGDOM
Ireland and the UK delivered
an improved performance in
FY22 compared to the prior
year, delivering an increase in
underlying revenue of 47.0%
while underlying operating profit
increased 125.8%.
Ireland and the United Kingdom in numbers:
€1,614.4m
Revenue
1,523
Employees
€94.5m
Operating Profit1
c.30,000
Customers
34
Origin Enterprises plc Annual Report and Accounts 2022
Operational Review - Ireland and the United Kingdom
Revenue
Operating profit1
Operating margin1
Associates and joint venture2
2022
€'m
1,614.4
94.5
5.9%
6.8
Change on prior year
2021
€'m
1,049.3
39.1
3.7%
2.8
Change
%
53.9%
141.4%
220bps
140.9%
Underlying3
%
Constant Currency4
%
47.0%
125.8%
200bps
134.0%
48.7%
131.3%
210bps
134.0%
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.
4 Excluding currency movements.
There was an underlying volume
reduction for agronomy services and
crop inputs of 7.3% in the period.
While raw material price inflation
was the primary driver of revenue
growth, it negatively impacted
fertiliser volumes during the year.
The reduction in fertiliser volumes of
22.6% was partially offset by a strong
volume performance across our seed
and crop protection portfolios.
FY22’s performance was supported
by strong on-farm sentiment and a
positive trading environment, set
against the backdrop of a significantly
better crop mix at planting, excellent
crop establishment and ideal
application and growing conditions.
Despite the extremely dry weather
conditions experienced in Q4, to date
the overall harvest has been strong.
Operating margin increased to 5.9%
from 3.7%, driven by management of
the exceptional raw material pricing
volatility in the market and a higher
intensity of crop input spend by
farmers and growers, influenced by
strong output prices and favourable
weather.
Integrated Agronomy and On-
Farm Services
Integrated Agronomy and On-Farm
Services delivered an improved result
during the year, recording higher
seed and crop protection volumes,
revenues and margins.
The contribution was supported by a
positive trading environment, despite
the impact of price inflation, as a
result of the strong planting profile,
with good crop establishment and
favourable weather conditions. Given
the dry conditions in Q4, the harvest
progressed at pace with strong yields
and quality widely reported.
During the year, the Group enhanced
its near-market R&D capabilities with
the acquisition of Envirofield Limited
in the UK, an expert independent
field-trials company specialising
in agricultural and environmental
research. The integration of
Envirofield Limited is progressing to
plan and the company is performing
to expectations.
Digital Agricultural Services
The development and roll-out of
Origin’s digital offering continued
during the year, with over 1.8 million
(FY21: 1.7 million) active hectares on
the platform.
Profit by Geography
2022
€94.5m
8%
13%
Ireland & the UK
Continental Europe
Latin America
79%
100 -
2,000ha
Representative
Customer Profile
Strategic Report
35
Digital Agricultural Services continues
to develop the Group’s capabilities
in precision farming and digital
agronomy. The Group continues to
work on in-house developments
and foster external collaborative
partnerships to build its capabilities.
During the year, the Group partnered
with Aspia Space to launch ClearSky,
a world-first service with an aim to
revolutionise the way satellite imagery
is used in precision agriculture by
farmers. The priority for RHIZA, the
Group’s digital agronomy and precision
farming operation, is strengthening
in-field insights and decision-making,
enhancing user functionality, and
aligning Group technology to core
business operations.
Business-to-Business Agri-Inputs
Our Business-to-Business Agri-
Inputs division had a strong financial
year, recording an overall improved
contribution, despite reduced
demand as a result of global raw
material inflation during the year.
Fertiliser
Fertiliser delivered a strong financial
and operating performance in FY22,
despite the exceptional inflationary
environment for global fertiliser
prices in the year, as a result of
increased global raw material
prices and supply chain challenges.
The global fertiliser market saw
significant raw material price volatility
through the year, however the Group
continues to successfully navigate
these supply chain and pricing
pressures.
In addition to ensuring product
availability for the important seasonal
application period, the Group
continues to focus on growing its
speciality and bespoke soil health and
nutrition product ranges. With high
energy prices and general inflationary
and supply chain challenges
persisting, we expect product
availability and pricing to remain a key
challenge into FY23.
Amenity
The Group’s Amenity business
delivered a strong performance in
the period, continuing the positive
momentum of FY21.
The integration of Green-tech,
the UK’s leading manufacturer and
distributor of landscaping, forestry
and ground maintenance equipment,
is complete and Green-tech is
performing ahead of expectations.
Feed Ingredients
Origin’s Feed Ingredients division
reported an improved performance
in FY22, achieved in an inflationary
environment and following the
challenging trading and operating
environment experienced in FY21.
The Group’s animal feed
manufacturing associate, John
Thompson & Sons Limited, in which
the Group has a 50% shareholding,
delivered a strong performance
in the period.
36
Origin Enterprises plc Annual Report and Accounts 2022
THE GLOBAL FERTILISER MARKET SAW
SIGNIFICANT RAW MATERIAL PRICE
VOLATILITY THROUGH THE YEAR,
HOWEVER THE GROUP CONTINUES TO
SUCCESSFULLY NAVIGATE THESE SUPPLY
CHAIN AND PRICING PRESSURES.
Strategic Report
37
BUSINESS REVIEW
CONTINENTAL
EUROPE
Continental Europe (‘CE’) delivered
a strong underlying performance in
Poland and Romania in FY22, with the
overall result impacted by a reported
loss in Ukraine as a consequence of
the Russian invasion in February 2022.
CE’s underlying business volumes
reduced by 5.4% in the period, with
overall volume increases in Poland
and Romania offset by reductions in
Ukraine. Operating margin in FY22 for
CE was 3.2% (FY21: 3.8%).
Continental Europe in numbers:
€461.8m
Revenue1
933
Employees
€14.8m
Operating Profit2
c.18,000
Customers
38
Origin Enterprises plc Annual Report and Accounts 2022
Operational Review - Continental Europe1
Revenue
Operating profit2
Operating margin2
2022
€'m
461.8
14.8
3.2%
Change on prior year
2021
€'m
415.7
15.7
3.8%
Change
%
11.1%
(5.3%)
(60bps)
Underlying3
%
Constant Currency4
%
18.4%
9.6%
(30bps)
11.6%
0.4%
(40bps)
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 2022 crop marketing revenues and losses attributable to Continental Europe amounted to €192.7 million and €0.8 million
respectively (2021: €154.4 million and €0.1 million 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 and disposals.
4 Excluding currency movements.
The war in Ukraine is having a profound
impact on agriculture in the region.
30% of arable land is estimated to be
in either Russian occupied regions
or unsafe areas and agricultural
production is forecast to be 35% down
from 2021 levels. Furthermore, with
the area under agricultural production
declining, so too has farmer liquidity.
To align with the more challenging
operational environment and smaller
market, the Group took the difficult,
but necessary, decision in August
to reduce the size of our team in
Ukraine. This included the provision of
a comprehensive financial assistance
package and additional supports to
those impacted.
Poland
Poland delivered a strong performance
in FY22 supported by a marginally
improved cropping area compared to
FY21.
Weather conditions were generally
favourable during the year, with the
harvest well progressed despite
prolonged dry periods in some
localised geographies. There was
renewed focus on Origin’s nutrition
portfolio which continued to develop
a more favourable mix of speciality
and strategic products, positively
contributing to returns. The strong
operational performance reflects the
continued focus on working capital
management and margin optimisation
in the region. While farm sentiment
has remained generally positive, it is
being impacted by input price inflation
which may influence on-farm decisions
in FY23.
Romania
Romania reported a strong
performance in FY22, ahead of prior
year contribution supported by a larger
planted area.
The harvest is well progressed across
Romania, and despite good crop
establishment earlier in the year, dry
conditions across the country have
resulted in a reduced yield potential
of up to 20% for some crops. General
farm sentiment, while overall positive,
is impacted by price uncertainty
across a range of inputs and the dry
conditions are challenging for autumn
seed planting.
Working capital management continued
to be an area of focus during the year
together with a focus on improving
the mix of higher margin speciality and
strategic products. The result was a
working capital inflow year-on-year
and higher margin delivery.
Ukraine
Activity levels have reduced sharply
since the start of the war, with on-
farm liquidity significantly impacted
by the limited sale of last year’s crop.
In the last two years the Group has
undertaken a significant de-risking
of the balance sheet in Ukraine
through a sustained focus on working
capital reduction.
The Group’s top priority remains
ensuring the safety and wellbeing of
our colleagues and the continued
de-risking of the balance sheet in
Ukraine. The Group continues to closely
monitor the situation on the ground
and support the limited localised
operations in areas away from conflict,
overseen by the local team.
Profit by Geography
2022
€14.8m
8%
13%
79%
Continental Europe
Ireland & the UK
Latin America
100 -
50,000ha
Representative
Customer Profile
Strategic Report
39
BUSINESS REVIEW
LATIN
AMERICA
The Latin American
(‘LATAM’) reporting
segment incorporates
the Group’s operations
in Brazil. Based in
Paraná State, Brazil,
Fortgreen is an
established leader in
the development and
marketing of value-
added crop nutrition
and speciality inputs.
Latin America in numbers:
€73.2m
Revenue
187
Employees
€9.7m
Operating Profit1
c.1,000
Customers
40
Origin Enterprises plc Annual Report and Accounts 2022
Operational Review - Latin America
Change on prior year
Revenue
Operating profit1
Operating margin1
2022
€'m
73.2
9.7
13.2%
2021
€'m
39.0
6.3
16.1%
1 Before amortisation of non-ERP intangible assets and exceptional items.
2 Excluding currency movements and the impact of acquisitions and disposals.
3 Excluding currency movements.
Change
%
87.9%
53.7%
Underlying2
%
Constant Currency3
%
71.4%
37.7%
71.4%
37.7%
(320bps)
(290bps)
(320bps)
Latin America delivered a strong
performance in FY22, sustaining the
momentum of FY21, with operating
profit increasing to €9.7 million from
€6.3 million in FY21, with an underlying
increase of €2.4 million.
There was an underlying increase in
crop input volumes of 43.4%. The
volume development and underlying
growth is driven by increases in our
core product range and a significant
increase in controlled release fertiliser
volumes, following the completion of
the Group’s new production facility
in Minas Gerais in the second half
of FY21. Volume growth during the
year was driven equally by controlled
release fertiliser volumes and the core
product portfolio.
The overall result was supported
by an increase in the cropping area
dedicated to soya, Brazil’s principal
crop, to 41.5 million hectares from
39.2 million in FY21. Planting of the
FY23 soya crop has commenced,
with initial estimates of the planted
area increasing by 2.9% to 42.7
million hectares.
Profit by Geography
2022
€9.7m
8%
13%
79%
Latin America
Continental Europe
Ireland & the UK
50 -
5,000ha
Representative
Customer Profile
Strategic Report
41
ORIGIN’S OWN PRODUCT PORTFOLIO
Origin’s vision is to create a market-leading
in-house portfolio of Crop Protection (‘CP’),
Bio-stimulant, Adjuvant and Micronutrient (‘BAM’)
and Nutrition products which can be leveraged
across the wider Group.
The Group’s current capability reaches across each of our
geographies and includes:
_ FOLIQ – CONTINENTAL EUROPE
_ OWN REGISTRATION CP PRODUCTS – AGRII UK
_ CONTROLLED RELEASE FERTILISER – LATAM
FOLIQ
CONTINENTAL EUROPE
In Continental Europe, foliQ is Origin’s range
of in-house foliar fertilisers that, in addition to
its standard nutrition function, has a significant
impact on the processes responsible for crop
growth rate through a balanced content of
macro and micro nutrients.
Agrii Poland has more than 20 years of production and
research expertise in the production of foliQ, with the
whole process undertaken in-house in Poland. The foliQ
range helps Agrii Poland support farmers at every stage of
the crop cycle by providing them with intelligent innovative
crop solutions. foliQ is a market-leading high quality
fertiliser with balanced doses of micro and macro nutrients
delivering fast and effective nutrition to crops and plants.
When compared to commonly-used liquid fertiliser, foliQ
provides the following advantages:
_ Even coverage of fertiliser;
_ Mixes effectively with other CP products;
_ Improves nutrient uptake;
_ Prolonged and efficient absorption;
_ Lower transport and storage costs; and
_ Higher crop yield of better quality.
foliQ is delivered in micro-doses compared to more
commonly-used liquid fertilisers in the market. As a result,
the use of 1 litre of foliQ suspension fertiliser per hectare
can deliver the same result as up to 5 litres of other liquid
fertilisers.
- V -
1 Litre foliQ
5 Litres other liquid fertiliser
Particularly
effective
absorption of
nutrients
Fast and effective
nutrition of
the plants
More intensive
plant growth
Higher
tolerance to
stress factors
Improved
resistance to
diseases
Visibly higher
yield of better
quality
42
Origin Enterprises plc Annual Report and Accounts 2022
OWN REGISTERED
CP PRODUCTS
AGRII UK
In the UK, Origin has invested in a number of
products that are distributed by Agrii using
the Cleancrop brand. Cleancrop is a long
established and trusted brand, and comes
with the technical backing of Agrii giving
farmers the confidence they expect from
an Agrii product. Cleancrop products are
toll manufactured for the UK market using
Origin’s own product registrations. The use
of these products allows Agrii to manage
its own supply chain and stock volumes
while delivering cost-effective solutions
to farmers that meet the high standards of
excellence expected from Agrii.
CONTROLLED
RELEASE
FERTILISER
LATAM
Fortgreen’s own product portfolio includes some of the
most innovative formulations in the Brazilian marketplace.
With six research laboratories operating across Fortgreen’s
operations, the investment in research and development
provides a competitive advantage to Fortgreen in the
development of bespoke products for the LATAM market.
Following an investment in a new technology called
Controlled Release Fertiliser (‘CRF’), Fortgreen’s offering
includes technologies that can enhance nutrient efficiency
and decrease losses such as leaching and fertiliser
volatility, enabling a better use of nutrients and also
reducing the impact on the environment. This in-house
expertise is key to Fortgreen’s continuing success in the
LATAM market.
Strategic Report
43
SUSTAINABILITY
REPORT
In pursuit of the Origin purpose to optimise sustainable use of land through
innovation and integrated solutions, we have adopted a long-term sustainability
strategy — 'Nurturing Growth' — which draws together our environmental,
social and governance ambitions. At the heart of this approach are the five core
values which make up ‘The Origin Way’ and define who we are as an organisation:
‘Integrity’, ‘People’, ‘Community’, ‘Partnerships’ and ‘Innovation'.
With the support of our Board, who have given us a clear ESG mandate, we are addressing external and internal challenges, as
well as opportunities.
In 2022 we made further progress in putting essential pillars in place to deliver on our ‘Nurturing Growth’ strategy, such as:
> continuing to engage with our stakeholders through a further ‘Pulse Check’ to inform our sustainability strategy;
> identifying the right goals and metrics; and
> streamlining our ESG reporting.
Origin is adopting a deliberate, phased and pragmatic approach to sustainability under the 'Nurturing Growth' strategy, which
is being delivered under our two programme areas, Nurturing our Society and Nurturing Our Environment.
Our Approach - Nurturing our Society
Origin supports the ten principles of the Global Compact on human rights, labour,
environment and anti-corruption. We are committed to continuing to apply the Global
Compact, embedding its principles in our strategy, culture and day-to-day operations,
and engaging in collaborative projects which advance the broader development goals of
the United Nations, particularly the Sustainable Development Goals ('SDGs').
Our people are central to the delivery of this strategy and
in 2022 Origin reinforced its commitment to developing
and empowering our team, with the adoption of 'People
enablement and community' as a material theme for
the Group.
Listening to all our key stakeholders is central to our
approach. This feedback helps us to identify our most
material economic, environmental and societal matters, so
that we can better manage our impacts. To this end, we are
committed to undertaking Materiality Assessments every
four years. The first was undertaken in 2019, and our next will
be in 2023.
In the interim, we have adjusted to the rapid pace at which
environmental and social themes are evolving within the
agriculture and amenity sectors, through internal review and
by undertaking an independent materiality 'Pulse Check' in
July 2022. The 2022 'Pulse Check' therefore enabled us to
deepen our internal consultation to include customer-facing
employees, as well as the Board and a customer sample
across key geographies.
For more information on how we engage our stakeholders
see page 13 of our FY22 Nurturing Growth Sustainability
Report which is available at: www.originenterprises.com.
44
Origin Enterprises plc Annual Report and Accounts 2022
To fully integrate and embed sustainability across the Group, we have developed Key
Performance Indicators ('KPIs') and measures for our relevant UN SDGs.
UN SDG’s
Origin KPI
> 20% increase in Nitrogen Use Efficiency of crops by 2030
> Utilise digital tools to promote adoption of sustainable practices
> Fast-track the development of Biosolutions
> Achieve 30% female representation in leadership and management by 2030
> Maintain a minimum of 33% female representation on the Board
> Target a reportable Incident Rate target of <6 per 1,000 employees
> Target a ROIC of 12%-15%
> Use soil health indices to support growers decisions on optimal nutrition,
cultivation and cropping
> Run best practice workshops for sprayer operators in CE markets –
targeting 75% of customer base by 2030
> Achieve net zero emissions by 2050
> Implement a Group-wide EMS by 2023
> Verify Scope 1 – 3 GHG emissions targets by 2023
> 1,000 miles of 'Wildlife corridors' by 2030 to join Amenity, Rural and
Agricultural land to improve Biodiversity
Our Approach - Nurturing our Environment
Our strategy for sustainable agronomy is about creating
systems to meet economic and food production needs,
whilst conserving resources and protecting the environment.
Supporting the transition to more sustainable food,
agronomy and land use, we continued to adopt a strategic
approach to reduce our environmental footprint and support
our farming, amenity and landscaping customers to do
the same.
To advance our efforts, in FY22 we commenced the
development of a formal Environmental Management System
aligned to the ISO14001 standard and accelerated our work in
the development of science-based Greenhouse Gas ('GHG')
reduction targets which we will aim to submit for verification
by the Science-Based Targets Initiative ('SBTi') in 2023. In
addition, we aim to reduce waste and water usage, improve
soil health and promote biodiversity.
_
To read more about Origin’s
approach to sustainability
and learn more about the
business we do, how we
do business and how we
organise for impact, refer
to our FY22 Nurturing
Growth Sustainability
Report which is available at:
www.origineneterprises.com
Sustainability Performance Highlights 2022
Nurturing Our Society
89%
employee survey
engagement score
Nurturing Our Environment
5%
absolute CO2 emissions
reduction since 2017
How We Organise For Impact
38%
female Board membership
84%
20%
favourable diversity and
inclusion category score
target to increase crop
Nitrogen Use Efficiency by 2030
Materiality
'Pulse Check'
LTIR 13.8
incidents per 1,000 employees
1,000 miles
of wildlife corridors by 2030
30% by 2030
female representation in
management/leadership
Strategic Report
45
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.
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.
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 2022 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
46
Origin Enterprises plc Annual Report and Accounts 2022
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 47 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.
IDENTIFYING, EVALUATING
AND MANAGING RISKS
_
Read our
Corporate
Governance
Statement on
pages 66 to 72
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
_ 2nd Line of Defence
Oversees risk and
provides support
INTERNAL AUDIT /
OTHER ASSURANCE
PROVIDERS
_ 3rd Line of Defence
Independent assurance
Strategic Report
47
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
Audit and
Risk Committee
_ 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.
_ 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.
Executive Group Risk
Committee (‘EGRC’)
_ Meet, direct and support the business units on risk management areas.
_ Continuously develop the Group’s risk management processes and control
environment.
_ Perform risk deep dives for Group functions and business units, as required.
_ 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.
Group Internal Audit
_ 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.
_ 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 Lesley
Williams (Non-Executive Director).
The length of tenure of the Directors
on the Audit and Risk Committee as
at 31 July 2022 is set out below:
Length of tenure on Audit
and Risk Committee*
Gary Britton
Helen Kirkpatrick
Lesley Williams
Years
6.77
1.50
0.75
* 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, 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.
48
Origin Enterprises plc Annual Report and Accounts 2022
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.
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.
2022 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 2022:
_ The EGRC met four times to
discuss top risks and actions.
_ Risk deep dives were performed
for all major business units and
the Committee facilitated a
dedicated Board risk session
to examine the enterprise risk
management framework in a
holistic way.
_ Emerging risks were re-assessed
and risk appetite and tolerance
concepts were incorporated for a
selection of key risks.
_ Additional focus was given in 2022
to areas such as health and safety
and crisis management protocols.
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 55. As set out in the
financial statements, the Group
has generated net cash flow from
operating activities of €127.7 million
during the year and its net cash at
31 July 2022 is €43.4 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.
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 51 to 55. 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.
Ukraine Crisis Impact and
Response
The ongoing war and humanitarian
crisis in Ukraine has significantly
impacted Origin’s employees and
business operations in the country.
Activity levels have reduced sharply
since the start of the war with the
limited sale of last year’s crops
impacting on-farm liquidity.
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.
The Group’s priority is the health
and safety of colleagues. Origin has
taken concrete measures to assist
them and their families (including
providing relocation support within
and outside Ukraine).
Warehouses in Ukraine have been
open for limited operations to serve
customers while it is safe to do so
and without placing our own staff at
risk.
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.
Strategic Report
49
From a risk management perspective,
actions have been taken to mitigate
operational and financial risks
associated with the crisis:
_ activating contingency plans with
focus on people first;
_ early engagement with
stakeholders (employees,
customers, suppliers, etc);
_ de-risking the balance sheet
through targeted working capital
reduction;
_ reducing the footprint of our
warehouses and support offices;
and
_ adjusting the size of our workforce
to sustain the business in the
current market environment.
The ongoing war has also affected
Group-wide risks such as commodity
prices, geopolitical exposure,
international logistics/procurement
and the agri economy in general.
Impacts and related mitigations are
described on pages 51 to 55.
COVID-19 Pandemic Impact
and Response
Similar to 2021, the main risks
associated with the pandemic were
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
51 to 55.
While COVID-19 has caused
disruption and uncertainty at societal
level, it is important to note that the
Group’s long-term business strategy
is unaffected, 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.
The highest priority has been given
to protect the health, safety and
wellbeing of all employees.
The second half of 2022 showed
a reduction in infection numbers,
which resulted in countries
significantly reducing restrictions.
Group HR continues to monitor the
situation especially for key sites as
hybrid working and return-to-work
protocols are implemented for
all countries.
_
Read our
Corporate
Governance
Statement on
page 66
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.
50
Origin Enterprises plc Annual Report and Accounts 2022
PRINCIPAL RISKS AND UNCERTAINTIES:
Key: Strategic Priorities and Strategic Enablers
STRATEGIC PRIORITIES
STRATEGIC ENABLERS
Building and maintaining customer-centric, market-leading business models
Strengthening foundations
Transitioning our product and services portfolio
Investing for growth
Accelerating Origin's participation in Environmental and Ecological markets
Risk Movement Key:
Increased Risk Decreased Risk No Change
Impact
Mitigation
Risk Movement
Link to Strategy
STRATEGIC / COMMERCIAL
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.
Commodity price volatility
The Group is exposed to both
deflationary and inflationary 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 2022
due to the war in Ukraine and ongoing
global energy, commodity and general
inflationary pressures.
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.
The Group prioritises margin delivery and
working capital 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. Origin's business units continually
monitor commodity market price movements
and stock holding levels taking necessary
corrective actions to minimise risks,
particularly where downward market price
movements could have a negative impact on
balance sheet holding values.
Strategic Report
51
Link to Strategy
Building and maintaining customer-centric, market-leading business models
Strengthening foundations
Transitioning our product and services portfolio
Investing for growth
Accelerating Origin's participation in Environmental and Ecological markets
Risk Movement Key:
Increased Risk Decreased Risk No Change
Impact
Mitigation
Risk Movement
Link to Strategy
STRATEGIC/COMMERCIAL (CONTINUED)
Geopolitical
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 processes at country
level. As a result of the war in Ukraine and
ongoing global energy, commodity and
general inflationary pressures, the last two
years have seen increased disruption in
international trade affecting logistics and
supply chains.
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 FY20, we witnessed first-hand
agriculture’s vulnerability to climate-
induced changes as disruptive weather
events had a direct negative impact on
our profitability that year, which also
carried through to FY21.
Political decisions and civil unrest are not
within the control of the Group. Nevertheless,
the Group monitors these risks and actively
manages its businesses to ensure minimum
disruption to its operations. Measures taken
to mitigate the impact of the Ukraine crisis
are described on page 49.
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 2022 Sustainability
Report. The Group is also accelerating its
investment in products and services that
enhance environmental and ecological
benefits in sustainable land use together with
continuing its transition to Biosolutions and
Specialty Nutrition Product Technologies
focused on yield optimisation. In addition, the
Group has considered recommendations of
the Task Force on Climate-related Financial
Disclosures ('TCFD').
52
Origin Enterprises plc Annual Report and Accounts 2022
Link to Strategy
Building and maintaining customer-centric, market-leading business models
Strengthening foundations
Transitioning our product and services portfolio
Investing for growth
Accelerating Origin's participation in Environmental and Ecological markets
Risk Movement Key:
Increased Risk Decreased Risk No Change
Impact
OPERATIONAL
Mitigation
Risk Movement
Link to Strategy
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.
Additional health and safety
requirements have been implemented in
the last two years as a consequence of
the COVID-19 pandemic.
The Group closely monitors 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. In addition to COVID-19 related
measures and protective actions, additional
resources, monitoring/reporting capabilities
and management focus have been allocated
to the Group’s Health and Safety function
during 2022.
Procurement and supply chain
The Group sources 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 relationships with
large manufacturers to source materials,
sustain margins, recognise vendor-related
income and jointly develop new products.
The last two years have seen increased
disruptions in international trade affecting
logistics and supply chain activities, as a
result of the war in Ukraine and ongoing
global energy, commodity and general
inflationary pressures.
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. While ensuring
compliance with relevant international
sanctions against Russia, the Group has taken
appropriate measures to ensure logistics and
supply chain disruption is kept to a minimum
through leveraging its broad global supply
chain network.
Recruitment and retention of key personnel
The ongoing success of the Group is
dependent on attracting and retaining high
quality senior management and frontline
employees who can effectively implement
the Group’s strategy, particularly on
product knowledge and agronomic advice.
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.
Strategic Report
53
Link to Strategy
Building and maintaining customer-centric, market-leading business models
Strengthening foundations
Transitioning our product and services portfolio
Investing for growth
Accelerating Origin's participation in Environmental and Ecological markets
Risk Movement Key:
Increased Risk Decreased Risk No Change
Impact
Mitigation
Risk Movement
Link to Strategy
OPERATIONAL (CONTINUED)
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.
This risk was further heightened during
2022, following the invasion of Ukraine
by Russia.
UK–EU Relationship
The Group has operations within and
outside the European Union. The UK’s exit
from the EU 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. Any 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.
During 2022, the UK continued to face
logistics challenges affecting availability
of personnel. Also, ongoing discussions
and potentially diverging approaches to
the Northern Ireland Protocol could have
a negative effect on trade to/from the UK
and Ireland.
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 volumes 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 backed
up off-site.
Management and the Board are continually
monitoring the short and long-term impacts
of the UK-EU relationship 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 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.
54
Origin Enterprises plc Annual Report and Accounts 2022
Link to Strategy
Building and maintaining customer-centric, market-leading business models
Strengthening foundations
Transitioning our product and services portfolio
Investing for growth
Accelerating Origin's participation in Environmental and Ecological markets
Risk Movement Key:
Increased Risk Decreased Risk No Change
Impact
FINANCIAL
Mitigation
Risk Movement
Link to Strategy
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 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.
The Group is exposed to increased levels of
credit risk arising from a higher inflationary
and interest rate environment, which
increases risk of default by customers in
settling balances.
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.
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.
New working arrangements for support
staff require that key financial controls
operate properly under hybrid models to
minimise the risk of fraud.
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).
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 hybrid
or work from home arrangements for 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 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.
Strategic Report
55
ENGAGING WITH
THE LATEST INNOVATIONS
AND BEST PRACTICES IN
SUSTAINABLE AGRONOMY
38%
of the Group’s
purchased electricity
now generated from
renewable sources
56
Origin Enterprises plc Annual Report and Accounts 2022
GOVERNANCE
58
60
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
76
80
64
66
73
Governance
57
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 (65)
NON-EXECUTIVE DIRECTOR
SEAN COYLE (49)
CHIEF EXECUTIVE OFFICER
TJ KELLY (48)
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, Non-Executive Lead
Independent Director of Dole plc and
Non-Executive Director of Eircom Holdings
(Ireland) Limited.
Skills and experience: Sean was appointed
Chief Executive Officer on 1 July 2020,
having originally joined the Group as Chief
Financial Officer in September 2018.
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 joined Origin
as Chief Financial Officer and 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.
58
Origin Enterprises plc Annual Report and Accounts 2022
NON-EXECUTIVE DIRECTORS
GARY BRITTON (68)
NON-EXECUTIVE SENIOR INDEPENDENT
DIRECTOR
AIDAN CONNOLLY (55)
NON-EXECUTIVE DIRECTOR
HELEN KIRKPATRICK (63)
NON-EXECUTIVE DIRECTOR
Nationality: Irish
Nationality: Irish
Nationality: British
Date of appointment: 1 October 2015
Date of appointment: 1 October 2021
Date of appointment: 1 October 2020
Committee membership: Chairman
of the Audit and Risk Committee and
member of 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.
Principal current directorships:
Non-Executive Director of Cairn Homes plc.
Committee membership: Member of the
ESG Committee.
Skills and experience: Aidan is the
president of U.S.-based AgriTech Capital,
a strategic consulting and investment
firm in the agribusiness sector. Aidan was
previously the Chief Executive of Cainthus,
an Irish agtech start-up using artificial
intelligence to deliver data-driven solutions
to dairy farms. He has also held multiple
senior leadership positions at Alltech over
a period of 25 years, most recently in the
role of Chief Innovation Officer. He holds a
Master’s Degree in International Marketing
from the Smurfit School of Business,
University College Dublin.
Committee membership: Chairman of the
Remuneration Committee, member of the
Audit and Risk Committee, the Nomination
and Corporate Governance Committee
and the ESG Committee.
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:
President of AgriTech Capital, LLC.
Principal current directorships:
Non-Executive Director of NTR plc.
CHRISTOPHER RICHARDS (68)
NON-EXECUTIVE DIRECTOR
LESLEY WILLIAMS (57)
NON-EXECUTIVE DIRECTOR
Nationality: British
Nationality: Irish
Date of appointment: 1 October 2015
Date of appointment: 15 October 2021
Committee membership: Member of
the Remuneration Committee and the
ESG Committee.
Skills and experience: Christopher has
more than 35 years' international
experience in the agriculture industry and
currently farms in the West of England.
Christopher spent 20 years in various
leadership roles with Syngenta and its
predecessor companies before serving
for 7 years as Chief Executive Officer and,
later, Non-Executive Chairman of Arysta
Life Science. In the period 2018 - 2022, he
served as Chief Executive Officer of Plant
Health Care plc.
Principal current directorships:
Non-Executive Chairman of Nanoco
Group plc and of Plant Health Care plc
and Non-Executive Director of Volac
International Limited.
Committee membership: Chairman of the
ESG Committee and member of the Audit
and Risk Committee.
Skills and experience: Lesley is an
Independent Non-Executive Director at
Irish Continental Group plc and holds
a number of directorships in the asset
management and international fund
sectors. She has over 25 years’ experience
in capital markets having held senior
positions with Investec Bank plc, Euronext
Dublin and Goodbody Stockbrokers. Lesley
is an Associate member of the Chartered
Financial Analyst Institute and a Fellow
of the Chartered Institute for Securities
and Investment and holds a Diploma in
Company Direction from the Institute of
Directors in Ireland.
Principal current directorships:
Non-Executive Director of Irish
Continental Group plc.
Governance
59
DIRECTORS’
REPORT
_
Read our
Corporate
Governance
Statement on
page 66
THE DIRECTORS PRESENT
THEIR ANNUAL REPORT
TOGETHER WITH THE AUDITED
CONSOLIDATED FINANCIAL
STATEMENTS OF THE GROUP
FOR THE YEAR ENDED 31 JULY
2022, WHICH ARE PREPARED
IN ACCORDANCE WITH
INTERNATIONAL FINANCIAL
REPORTING STANDARDS (‘IFRSs’)
AS ADOPTED BY THE EU.
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 conducted a €40 million share
buyback programme and enhanced
its R&D trials offering through the
acquisition of Envirofield Limited in
the UK.
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 104. Revenue for
the financial year was €2,342.1 million
(2021: €1,658.4 million). The profit
after tax and exceptional items for
the financial year was €79.9 million
(2021: €38.2 million).
Future Developments
The Group will continue to pursue
its growth ambitions to enhance
shareholder value, through a
combination of organic investment
and strategic M&A, with sustainability
at the core of our operations.
60
Origin Enterprises plc Annual Report and Accounts 2022
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.
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.
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 46 to 55.
Dividends
The Board is recommending a final
dividend of 12.85 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 16.00 cent
per ordinary share (2021: 11.00 cent).
Subject to shareholder approval,
the final dividend is payable on 6
February 2023 to shareholders on
the register on 13 January 2023.
Share Buyback
The Company announced the launch
of a €40 million share buyback
programme on 8 March 2022 and
completed the programme on 8
July 2022. A total of 10,086,258
ordinary shares of €0.01 each were
repurchased by the Company
pursuant to the share buyback
programme, at an average share
price of €3.97, returning €40 million
in cash to shareholders. The
Company cancelled 1,084,797 of
the repurchased shares on 29 July
2022 and intends to cancel further
tranches of treasury shares in due
course. See Note 28 to the Group
financial statements for further
details on the share buyback
programme.
Share Capital and Treasury Shares
During the year, the Company
reissued 38,615 treasury shares to
satisfy an exercise of share options
granted under the Company’s
Long-Term Incentive Plan (2015).
Accordingly, and having regard, inter
alia, to the shares repurchased under
the share buyback programme and
subsequent cancellation of treasury
shares, at 31 July 2022:
_ the Company’s total authorised
share capital comprised
250,000,000 ordinary shares of
€0.01 each (2021: 250,000,000);
_ the Company’s total issued share
capital (including treasury shares)
comprised 125,317,865 ordinary
shares of €0.01 each (2021:
126,396,184); and
_ 9,763,176 ordinary shares
were held as treasury shares
(2021: 800,330).
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 66 to 72 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 49.
Directors and Company Secretary
Changes to the Board of Directors
during the year:
_ Aidan Connolly was appointed as a
Non-Executive Director effective
1 October 2021;
_ Lesley Williams was appointed as a
Non-Executive Director effective
15 October 2021; and
_ Kate Allum and Hugh McCutcheon
retired as Non-Executive
Directors at the conclusion of the
Annual General Meeting on 25
November 2021.
Changes to the Board of Directors
subsequent to year end:
As announced in June 2022:
_ the Chairman, Rose Hynes, does
not intend to offer herself for
re-election and will step down
from the Board of Directors at the
next Annual General Meeting of
the Company, scheduled for 22
November 2022; and
_ Gary Britton was appointed as
Chair Designate to succeed Rose
Hynes at the conclusion of the
Company's 2022 Annual General
Meeting.
Governance
61
Directors’ Interests in Share Capital at 31 July 2022
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 87 to 91.
Substantial Holdings
As at 31 July 2022, 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):
Artemis Investment Management LLP
Gary Britton
(Non-Executive Senior Independent
Director) (Chair Designate)
FMR LLC
FIL Limited
Invesco Limited
Janus Henderson Group plc
Blackrock, Inc
Number of
shares
19,811,813
12,373,350
11,457,124
7,511,193
6,179,449
3,618,816
%
17.1%
10.7%
9.9%
6.5%
5.3%
3.1%
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)
Aidan Connolly
(Non-Executive Director)
Helen Kirkpatrick
(Non-Executive Director)
Christopher Richards
(Non-Executive Director)
Lesley Williams
(Non-Executive Director)
Company Secretary:
Barbara Keane
The biographical details of the
Directors are set out on pages 58
and 59 of this Annual Report.
As at 26 September 2022, 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):
Artemis Investment Management LLP
FMR LLC
FIL Limited
Invesco Limited
Janus Henderson Group plc
Number of
shares
19,811,813
12,373,350
11,457,124
7,511,193
6,179,449
%
17.1%
10.7%
9.9%
6.5%
5.3%
DURING THE YEAR UNDER REVIEW,
THE GROUP CONDUCTED A
€40 MILLION SHARE BUYBACK
PROGRAMME AND ENHANCED ITS
R&D TRIALS OFFERING THROUGH
THE ACQUISITION OF ENVIROFIELD
LIMITED IN THE UK.
62
Origin Enterprises plc Annual Report and Accounts 2022
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: Business
Model on pages 24 and 25, Strategy
on pages 26 to 29, Key Performance
Indicators on pages 30 and 31,
Sustainability Report on pages 44 and
45, Risk Report on pages 46 to 55,
and Corporate Governance Statement
on pages 66 to 72, 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 (2021: €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
26 September 2022
Sean Coyle
Director
26 September 2022
Governance
63
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
SUSTAINABLE 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 governments, economies and
businesses around the world already
under pressure from the COVID-19
pandemic, the challenges resulting
from the Russian invasion of Ukraine
and the ensuing war have further
highlighted the importance of
maintaining effective governance and
risk management systems through a
robust governance framework.
Details of our compliance with
the QCA Code are outlined in our
Corporate Governance Statement on
pages 66 to 72. There are detailed
reports from our respective Audit and
Risk, Remuneration, and Nomination
and Corporate Governance
Committees, on pages 73 to 91. A
detailed Risk Report is outlined on
pages 46 to 55.
The ESG Committee, comprising
Lesley Williams (Committee Chair),
Aidan Connolly, Helen Kirkpatrick and
Christopher Richards, continues to
support the Company's ESG strategy,
with important progress this year
on the development of sustainability
targets. For further detail and a
copy of this year's Sustainability
Report, please see pages 44 to 45
of this report and the website at:
www.originenterprises.com.
Following the formalisation of the
Acquisitions and Disposals Committee
in 2019 and its work in supporting
the Company in its acquisition and
divestment strategy over the last 3
years, the Board agreed that from May
this year, all future M&A activity would
be considered by the full Board.
I would like to thank Christopher
Richards for his leadership of the
Committee during its operation.
The Board is committed to supporting
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.
This was reaffirmed in the findings of
this year’s Board evaluation, which
along with the Committee evaluations,
was conducted internally. I am pleased
to report that the findings of these
reviews were positive and the Board
continues to operate in an effective
way. More information on this process
is outlined on page 71 of this report.
64
Origin Enterprises plc Annual Report and Accounts 2022
On an ongoing basis, we seek to
ensure that we have the right
balance of skills, experience,
diversity and independence on
the Board. As Kate Allum and Hugh
McCutcheon stepped down from
the Board at the conclusion of the
Company’s Annual General Meeting
in November 2021, we were pleased
to have welcomed Aidan Connolly
and Lesley Williams to the Board
as Non-Executive Directors on 1
October 2021 and 15 October 2021,
respectively, further diversifying and
strengthening the range of skills and
experience on the Board.
In preparation for Gary Britton
taking up the role of Chairman at
the conclusion of the 2022 Annual
General Meeting ('AGM'), Helen
Kirkpatrick has been appointed as
Senior Independent Director with
effect from that date also. At that
time she will step down from the
ESG Committee.
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 58
and 59. In accordance with the re-
election policy adopted by the Board
in 2018, all Directors will retire at
the 2022 AGM and, myself excepted,
offer themselves for re-election.
The Board recognises the importance
and value of diversity in all its forms
and its role in setting the tone
throughout the organisation by
promoting a culture of diversity
and inclusion. In accordance with
its Diversity Policy, the Board is
committed to maintaining a minimum
of 33% female representation on the
Board and continuing to promote an
inclusive and diverse membership.
Diversity more broadly is also a
key consideration in our senior
management succession planning
and in talent management across the
Group. For further details, see page
75 of the Nomination and Corporate
Governance Committee Report.
The Board continues 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 and
market updates from professional
_
Read more about
the Directors on
pages 58 and 59
advisors on developments in
corporate governance and executive
remuneration and our training
programme included refresher
sessions on cyber security and
regulatory frameworks. In addition to
the resumption of physical meetings
during the year, we were pleased
to also be able to travel to Group
sites for in-person visits as part of
our ongoing employee engagement
programme, 'Let's Talk'.
Rose Hynes
Chairman
26 September 2022
THE BOARD
RECOGNISES THE
IMPORTANCE
AND VALUE OF
DIVERSITY IN
ALL ITS FORMS
AND ITS ROLE IN
SETTING THE TONE
THROUGHOUT THE
ORGANISATION
BY PROMOTING
A CULTURE
OF DIVERSITY
AND INCLUSION.
Governance
65
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
NOMINATION
AND CORPORATE
GOVERNANCE
COMMITTEE
INTERNAL
AUDIT
EXECUTIVE
GROUP RISK
COMMITTEE
_
CHIEF
EXECUTIVE
OFFICER
EXECUTIVE
DIRECTORS
REMUNERATION
COMMITTEE
ESG
COMMITTEE
SUSTAINABILITY
STEERING
COMMITTEE
66
Origin Enterprises plc Annual Report and Accounts 2022
The Board of Directors
The Board of Directors currently
comprises a Non-Executive
Chairman, five Non-Executive
Directors and two Executive
Directors, namely the Chief
Executive Officer (‘CEO’) and the
Chief Financial Officer (‘CFO’).
The role of the Board is to provide
leadership and the Directors are
collectively responsible for setting
the Company's purpose and strategy
to deliver value to its stakeholders
and promote 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 CFO,
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 58 and 59.
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
73 to 91. A Risk Report is outlined on
pages 46 to 55.
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 and
distribution 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
promoting 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,
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 58
and 59.
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
Governance
67
the Chairman and other Board
members as necessary, including the
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 73 to 75.
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 Annual General Meeting
('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.
Under the Directors’ re-election
policy, Directors 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 2022 are set out
in the Nomination and Corporate
Governance Committee Report on
page 74.
Induction and Training
All new Directors receive a
comprehensive induction upon joining
the Board. The induction programme
includes meetings with other
Directors, senior management and
the Company's Nominated Advisor.
This is supplemented by a detailed
induction pack, covering a broad
range of information.
The Chairman and Company
Secretary review Directors’ training
and development needs on an
ongoing basis, as appropriate. Training
requirements are also considered as
part of the annual Board evaluation
process.
During the year professional advisors
advised the Board on developments
in corporate governance, executive
remuneration and Market Abuse.
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 plc (‘PHC’).
Christopher Richards stepped down
as Chief Executive Officer of PHC
in June 2022, at which point he was
appointed Non-Executive Chairman
of PHC. As detailed in our 2020 and
2021 Annual Reports, Agrii UK and
PHC are parties to an agreement for
the distribution of a biostimulant
product in the UK with an estimated
average annual value of c. £200,000.
68
Origin Enterprises plc Annual Report and Accounts 2022
Agrii UK is also currently conducting
a trial for a new biological product in
the UK for PHC as part of Agrii UK's
contract trials service offering, based
out of Throws Farm. In addition,
Headland, a wholly owned subsidiary
of Origin in the UK, maintained its
longstanding trading relationship
with PHC, with purchases of a single
product this year to the value of
c.£98,000.
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. A new Chief Executive
Officer for PHC was appointed in June
2022.
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,
the Board noted that the external
commitments of Christopher
Richards had reduced as he
stepped down as Chief Executive
Officer of Plant Health Care plc
and was appointed Non-Executive
Chairman. The Board is satisfied
that Christopher Richards has
the available time to dedicate to
the Company and discharge his
responsibilities.
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.
For the year ended 31 July 2022,
the Board’s schedule of meetings
comprised a total of 10 meetings. 3
additional ad hoc meetings were held
by conference call during the year.
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 scheduled meetings during the year ended 31 July 2022:
Directors
Kate Allum*
Gary Britton
Aidan Connolly**
Sean Coyle
Rose Hynes
TJ Kelly
Helen Kirkpatrick
Hugh McCutcheon*
Christopher Richards
Lesley Williams
Board
4/4
10/10
8/9
10/10
10/10
10/10
10/10
4/4
10/10
9/9
Audit
and Risk
Committee
Remuneration
Committee
Nomination and
Corporate Governance
Committee
Environmental, Social
and Governance
('ESG') Committee
-
4/4
-
–
–
–
4/4
1/1
–
3/3
1/1
–
-
–
4/4
–
3/3
–
4/4
-
–
3/3
-
–
3/3
–
3/3
-
–
-
1/1
–
2/2
–
–
–
3/3
1/1
2/2
2/2
The attendance statistics represent:
Total number of meetings attended by the Director of scheduled meetings held during the year to which the Director was eligible to attend.
* K Allum and H McCutcheon each retired from the Board at the conclusion of the Company's AGM on 25 November 2021.
** A Connolly attended all scheduled Board meetings from the date of his appointment during the financial year, with the exception of one meeting in
respect of which there had been a late scheduling update.
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 (which operated until
May 2022); and
_ 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 three principal
Committees were reviewed during
the year and will 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 76 to 79.
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 80 to 91.
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 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 73 to 75.
Governance
69
Acquisitions and Disposals
Committee
The Acquisitions and Disposals
Committee was responsible for
providing guidance when sought
by management on the search
for acquisitions and acquisition-
related matters, and for considering
any recommendations from
management with regard to specific
divestments. The Board agreed
that from May 2022, all future M&A
activity would be considered by the
full Board.
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.
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 2022 AGM.
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 80 to 91.
The Board has adopted the Origin
Enterprises plc Share Dealing Policy
(the ‘Policy’). The Policy relates to
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 closed periods and when in
possession of inside information.
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.
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.
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
76 to 79.
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.
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.
Employment and Human Rights
Origin is committed at all times to
upholding international human rights.
This commitment is embedded in
the cultural values that define the
organisation and is reflected in
policies and actions towards the
Company’s employees, suppliers,
customers, communities and
countries in which they operate.
Policies, processes and procedures
are in place to support compliance
with human rights legislation, modern
slavery, wage and hour practices,
discrimination and harassment and
employee data protection.
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 46 to 55.
70
Origin Enterprises plc Annual Report and Accounts 2022
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
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. These
evaluations are facilitated externally
every three years. In the year
ended 31 July 2022, this process
was conducted internally following
last year's external facilitation. The
internal review led by the Chairman
comprised of a self-assessment
questionnaire completed by each
Director and a Board discussion on
the outcome at the June 2022 Board
meeting. 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. The results of the review
demonstrated that the Board was
operating effectively. Actions were
agreed which will be undertaken
during the current year.
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.
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
and shares the same corporate
values. The close involvement of
the Executive Directors and senior
executives with the businesses
continues to foster a culture of
excellence and alignment 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’ continues
to act as a key driver in enhancing
communication and engagement with
colleagues. 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 experience
the local workplace culture first-
hand and are briefed on local
market conditions and operations.
As COVID-19 restrictions eased
during the year, including in relation
to travel, the programme this year
gradually returned to in-person
meetings. Non-Executive Directors
had a virtual visit to the Group’s
business unit in Brazil earlier in the
year, while visits to the Irish and UK
sites were in-person and included
tours of facilities and meeting with
local staff.
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 scheduled 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 and
in-person reflecting then current
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, regular
investor calls and correspondence.
During FY22, meetings were held
with 174 institutional investors and
engagement was facilitated through
a combination of virtual conferences
and video calls and in-person
meetings in line with the easing of
COVID-19 restrictions. Origin also
hosted a Capital Markets Day in May
2022 in London.
Governance
71
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.
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 Tuesday, 22
November 2022. 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 will
be made available on publication of
the notice of the AGM.
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.
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
72
Origin Enterprises plc Annual Report and Accounts 2022
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 2022.
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 66 to 72. 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. This is key
to enabling the organisation to be
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.
Chair Succession and other
Board Updates
During the year, as Non-Executive
Directors Hugh McCutcheon and
Kate Allum retired from the Board
at the conclusion of the 2021 Annual
General Meeting ('AGM'), we were
pleased to welcome Aidan Connolly
and Lesley Williams as Non-Executive
Directors. Aidan's appointment took
effect on 1 October 2021 and Lesley
joined on 15 October 2021.
Most recently, as I informed the
Board of my intention not to seek re-
election at the 2022 AGM, a process
was undertaken for the appointment
of a suitable successor to the role
of Chairman. We are pleased to
have announced the appointment
of Gary Britton, currently Senior
Independent Director, to the role
of Chairman with effect from the
conclusion of the 2022 AGM, further
underpinning the value of the Board’s
succession planning.
In planning for Gary's transition to the
role of Chairman in November 2022,
Helen Kirkpatrick has been appointed
as Senior Independent Director, also
with effect from the conclusion of
the 2022 AGM.
Governance
73
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
26 September 2022
_
Read the Risk Report
on pages 46 to 55
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 2022 is set
out below.
Length of tenure on Board
Years
Gary Britton
Aidan Connolly
Sean Coyle
Rose Hynes
TJ Kelly
Helen Kirkpatrick
Christopher Richards
Lesley Williams
Average Tenure
Length of tenure on
Nomination and Corporate
Governance Committee
Gary Britton
Rose Hynes
Helen Kirkpatrick
6.83
0.83
3.83
6.83
1.54
1.83
6.83
0.79
3.66
Years
3.84
6.75
1.50
74
Origin Enterprises plc Annual Report and Accounts 2022
Boardroom Diversity
The Board’s understanding of the
role that diversity of thought plays in
maximising the collective potential
of our people, bringing value to
the organisation and enhancing
decision-making, is a key driver
of our commitment to a diverse
Board. All Board appointments
are made on merit and against
objective criteria with due regard to
diversity. Diversity at Board level is an
important element to achieving the
Group’s objectives in a sustainable,
responsible way.
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 balance and range of
skills, experience and knowledge
which the Board as a whole requires
to be effective.
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, ahead of our target
of maintaining a minimum of 33%
female representation. At the date of
this report, female representation on
the Board is still 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
by the Chief Executive Officer,
including a recent comprehensive
deep dive provided to this Committee
on behalf of the Board, 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
2022, the Nomination and Corporate
Governance Committee carried out
an evaluation of its own performance.
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.
Meetings
The Nomination and Corporate
Governance Committee met three
times during the year.
Board Composition
Retirement of Non-Executive
Directors
Kate Allum and Hugh McCutcheon
retired from the Board of Directors
at the conclusion of the Company’s
AGM on 25 November 2021.
Appointment of Non-Executive
Directors
Following a comprehensive
recruitment process last year for
Non-Executive Directors, Aidan
Connolly and Lesley Williams were
appointed to the Board with effect
from 1 October and 15 October
2021, respectively.
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. Gary
Britton, Sean Coyle, Rose Hynes,
Helen Kirkpatrick and Christopher
Richards were re-elected, and Aidan
Connolly, TJ Kelly and Lesley Williams
were elected, by the shareholders as
Directors at the Company’s AGM on
25 November 2021.
R Hynes will not be seeking re-
election at the 2022 AGM. All other
Directors will retire at the 2022 AGM
and offer themselves for election or
re-election, as applicable.
Chairman, Senior Independent
Director and Non-Executive
Directors
Following the announcement of
Rose Hynes’ intention not to seek
re-election at the 2022 AGM, Gary
Britton has been appointed as
successor to serve as Chairman of
the Board, for a 3-year term. Helen
Kirkpatrick has been appointed
as Senior Independent Director
in his place. Helen is 2 years into
her first 3-year term. Christopher
Richards has been appointed to
serve a further 1-year term, up to the
Company's 2023 AGM, having been
re-appointed by the Board. Both
Aidan Connolly and Lesley Williams
are each approaching 1 year into their
respective 3-year terms.
Governance
75
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)
_ Lesley Williams (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 2022 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 Lesley
Williams to the Committee and
expressing appreciation to Hugh
McCutcheon for his contributions
to the work of the Committee
as he retired from the Board in
November 2021.
Against a backdrop of global supply
chain disruptions, exceptional price
volatility and the outbreak of war in
Ukraine, the Group’s risk management
processes served as a solid
foundation in navigating the business
through the period. This included
ensuring appropriate provisions
were made at year end in relation
to Ukraine, which are immaterial
in the context of Group net assets.
The Committee also supported a
risk deep dive by the Board this
year, examining the enterprise
risk management framework in a
holistic way while also formalising
crisis management protocols
and procedures.
appointment of a Group Head of
Health & Safety during the year,
underlying the importance of a
coordinated and strategic approach
to health and safety within Origin.
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 46 to 55.
The Terms of Reference of the
Audit and Risk Committee are
available on the Company’s
website: www.originenterprises.com.
The Committee continues to place
emphasis on promoting the Health,
Safety & Wellbeing framework across
the organisation. Throughout the
ongoing war in Ukraine, the priority
has remained the health and safety
of colleagues and their families.
We were also pleased to see the
Gary Britton
Chairman of the Audit and Risk
Committee
26 September 2022
76
Origin Enterprises plc Annual Report and Accounts 2022
Duties and Responsibilities
The principal duties and
responsibilities of the Audit and Risk
Committee include to:
Length of Tenure
The length of tenure of the Directors
on the Audit and Risk Committee as
at 31 July 2022 is set out below:
_ 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
on Audit and Risk
Committee*
Gary Britton
Helen Kirkpatrick
Lesley Williams
Years
6.77
1.50
0.75
* 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 Chief Financial
Officer and the Head of Risk and
Internal Audit. 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.
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 2022, and
how these have been addressed,
are listed on page 78. 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.
_
Read our Financial
Review on pages
12 to 17
Governance
77
The significant accounting estimates and judgements as set out in Note 34 of the Group financial statements were
discussed at the interim and year-end Audit and Risk Committee meetings. The key audit areas of particular focus included:
Key Audit Areas
Area
Discussion
Goodwill
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.
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 and
emerging 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 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 46 to
55. Included in this assessment
is consideration of the impact
of the war in Ukraine and global
energy, commodity and general
inflationary pressures.
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.
78
Origin Enterprises plc Annual Report and Accounts 2022
The Head of Risk and Internal Audit
has responsibility for all Internal
Audit matters and ensuring the
effective operation of the Internal
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 2022.
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 four 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.
THE COMMITTEE CONTINUES
TO PLACE EMPHASIS ON
PROMOTING THE HEALTH, SAFETY
& WELLBEING FRAMEWORK
ACROSS THE ORGANISATION.
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.The
Committee was briefed on legislative
developments in this area as the
Company continues to monitor
requirements under whistleblower
protection laws. The Whistleblowing
Policy and related procedures
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, which has been given
increased priority to enhance
awareness, support compliance and
promote good market practice.
Annual Evaluation of
Performance
The Board conducts an annual
evaluation of its own performance
and that of its Committees and
Committee Chairmen.
In the year ended 31 July 2022,
the Audit and Risk Committee
carried out an evaluation of its
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 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 Annual
General Meeting 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.
Governance
79
REMUNERATION
COMMITTEE
REPORT
ABOUT THIS COMMITTEE
The Remuneration Committee comprises three
independent Non-Executive Directors:
_ Helen Kirkpatrick (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, and in my first
year as Chair of the Remuneration
Committee, I am pleased to present
the Remuneration Committee Report
for the year ended 31 July 2022. 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 purpose of the Remuneration
Committee is to create a
remuneration structure which
supports the delivery of the
Group strategy and creates value
for shareholders over the longer
term, while attracting, motivating,
rewarding and retaining Executive
Directors and senior management.
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.
During the year, I transitioned into
the role of Committee Chairman. I
would like to express appreciation
to Kate Allum for all her work and
contributions over the past number
of years leading the Committee,
handing over a remuneration
structure that has evolved over time
in line with market practices and
reflecting a rigorous oversight by the
Committee.
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 2022
Origin delivered a strong performance
in FY22, amidst the war in Ukraine,
global supply chain disruption and
price volatility across our markets.
Group revenue was €2,342.1 million,
an increase of 38.6% on an underlying
basis, with Group operating profit of
€119.7 million, an increase of 88.5% on
an underlying basis.
Adjusted diluted earnings per share
was 71.53 cent, ahead of guidance
of 64 - 68 cent. Return on capital
employed, a key metric for Origin,
was 18.3%.
Pay Outcomes for 2022
Annual bonuses are based on a
combination of financial and non-
financial metrics. Details of the
metrics are set out on page 89. The
performance for the year ending
31 July 2022 has been reflected in
bonus outcomes for the Executive
Directors of 91.5% of the maximum.
The Committee believes this bonus
outcome is commensurate with the
performance of the business during
the financial year.
80
Origin Enterprises plc Annual Report and Accounts 2022
No long-term incentives awards were
scheduled to vest for the Executive
Directors by reference to Company
performance in the year to 31 July
2022. During the year, share awards
were made to Executive Directors
under the Company’s long-term
incentive plan 2015 (‘2015 LTIP’).
Details of the individual awards
made under the 2015 LTIP and the
relevant performance conditions for
these awards are set out later in this
report.
Remuneration Activities in 2022
As well as overseeing the matters
detailed as the Committee’s principal
duties and responsibilities in the
year, the Committee supported
the evaluation of workforce
remuneration, including in relation
to the Company’s response to
widespread inflationary pressures.
Details of the outcome of this
evaluation, including as it relates to
the Executive Directors, are set out
on page 87.
The Committee reviewed, alongside
senior executive remuneration,
remuneration matters for the
wider workforce, including
in the context of employee
engagement, talent management,
flexible working options, bonus
and commission schemes, real
living wage considerations and
gender pay gap reporting. It also
reviewed remuneration trends
and market practices with its
remuneration consultants.
With the appointment of Gary Britton
as Chair Designate in June to succeed
Rose Hynes at the conclusion of the
Company’s 2022 Annual General
Meeting ('AGM'), the Committee gave
consideration to the remuneration
of the Chairman. The conclusion
from this process was that it was
appropriate to maintain the Chairman
fees at the current level.
An evaluation of the Committee’s
own effectiveness and performance
was carried out internally this year.
The conclusion from this process
was positive, indicating that the
Committee is considered to be
effective in carrying out its duties.
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, and I look
forward to continuing to promote the
rigorous oversight by the Committee
in this regard.
We hope that we will continue
to receive your support at the
forthcoming AGM.
Helen Kirkpatrick
Chairman of the Remuneration
Committee
26 September 2022
_
Look out for our
Continental Europe
OWN PRODUCT
PORTFOLIO
in the Business Review
on page 42
Duties and Responsibilities
The principal duties and
responsibilities of the Remuneration
Committee include to:
_ 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: Helen
Kirkpatrick (Non-Executive Director
and Committee Chairman), 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.
Governance
81
The Company Secretary is secretary
to the Remuneration Committee.
The length of tenure of the current
Remuneration Committee members
as at 31 July 2022 is set out below:
Length of tenure on
Remuneration Committee
Helen Kirkpatrick
Rose Hynes
Christopher Richards
Years
0.68
6.77
6.75
Meetings and Committee
Governance
The Remuneration Committee met
four times during the financial year. For
full details on individual Remuneration
Committee members’ attendance at
meetings, see page 69. The principal
activities carried out included:
_ consideration of inflationary pay
increases across the Group;
_ annual review of the Terms of
Reference for the Committee;
_ consideration of the 2022 bonus
scheme for Executives;
_ approval of awards under the 2015
LTIP scheme;
_ annual review of the
Committee effectiveness; and
_ review of the Company's
remuneration disclosures.
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 remuneration and governance
matters including compliance with
disclosure requirements and long-
term incentive awards.
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
Remuneration Consultants in respect
of Remuneration Committee matters
over the financial year under review
was £29,381.
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.
Annual Evaluation of Performance
The Board conducts an annual
evaluation of its own performance
and that of its principal Committees
and Committee Chairmen. In the year
ended 31 July 2022, the Remuneration
Committee carried out an evaluation
of its own performance. 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, while attracting,
motivating, rewarding and retaining
Executive Directors and senior
management. The Group’s policy
is that performance-related
components should form a significant
portion of the Executive Directors’
overall remuneration packages,
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 Annual
General Meeting ('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 91.
_
Read our
Corporate
Governance
Statement on
pages 66 to 72
82
Origin Enterprises plc Annual Report and Accounts 2022
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.
Bonus
Incentivises annual
achievement of
performance targets.
Approach
Maximum opportunity
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.
Not applicable.
CEO & CFO: Maximum bonus of
100% of basic salary in cash.
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.
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.
Bonus payments to the Chief Executive Officer
and the Chief Financial Officer are based on the
meeting of pre-determined targets against financial
measures, in addition to the attainment of corporate
and personal objectives. These are approved by the
Remuneration Committee annually.
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 2023, 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 87. On the basis that the targets
are commercially sensitive, they are not disclosed
prospectively. The targets and outcomes for 2022’s
bonuses are disclosed on page 89.
Malus and clawback provisions operate which enable
the Company to withhold and/or recover annual
bonus in the event of material misstatement, an
error in assessing a performance condition, gross
misconduct, insolvency or significant reputational
damage.
Governance
83
Element of
remuneration
Approach
Long-Term Incentive Plan (2015) ('LTIP')
Maximum opportunity
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 a five-year period.
Plan limits:
_ 100% (normal limit) of basic
salary; and
_ 200% (exceptional limit e.g.
recruitment) of basic salary.
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 the ability to set different or
additional performance measures for each award
cycle to ensure that LTIP awards remain appropriately
aligned to the business strategy and objectives. In
assessing performance, the Committee will consider
the individual’s contribution and 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.
Non-Executive Director fees
Reflect time
commitments and
the responsibilities
of each role.
Reflect fees paid
by similarly sized
companies.
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.
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.
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.
84
Origin Enterprises plc Annual Report and Accounts 2022
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 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, 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.
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.
Provision
Notice period
Detailed terms
6 months’ notice from the CEO/CFO and 12 months’ notice from the Company.
Payments in lieu of notice
For any unexpired period of notice on termination, up to 12 months’ salary (and other
remuneration) in respect of the CEO/CFO.
Incentive schemes
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.
Governance
85
Recruitment Policy
New Executive Directors will be offered a basic salary in line with the Policy. This will take into consideration a number
of factors including external market forces, the expertise, experience and calibre of the individual and current level
of pay. Where the Committee has set the salary of a new appointment at a discount to the market level initially until
proven, they may receive an uplift or a series of planned increases to bring the salary to the appropriate market
position over time. For external and internal appointments, the Committee may agree that the Company will meet
appropriate relocation and/or incidental expenses as appropriate.
Annual bonus awards, LTIP awards and pension contributions would not be in excess of the levels stated in the Policy.
In the case of an internal appointment, any variable pay element awarded in respect of the prior role would be allowed
to pay out according to its terms, adjusted as relevant to take into account the appointment. The Committee may offer
additional cash and/or share-based buyout awards when it considers these to be in the best interests of the Company
(and therefore shareholders) to take account of remuneration given up at an individual’s former employer. Such awards
would be capped at a reasonable estimate of the value foregone and would reflect, as far as possible, the delivery
mechanism, time horizons and whether performance requirements are attached to that remuneration.
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 2023 in different performance scenarios, both as a percentage of total remuneration opportunity and as
total value.
S Coyle
€2,000,000
€1,500,000
€1,000,000
€500,000
TJ Kelly
€1,600,000
€1,200,000
€800,000
€400,000
€1,870,701
Share Price Appreciation
€969,276
13%
26%
€582,951
100%
61%
€1,613,151
32%
32%
36%
14%
27%
27%
32%
Minimum
Target
Maximum
Maximum &
Share Price Growth
Long-term
Annual
Fixed
€1,082,227
32%
32%
36%
€1,254,777
13%
28%
28%
31%
€650,852
13%
26%
61%
€392,027
100%
Minimum
Target
Maximum
Maximum &
Share Price Growth
Notes:
‘Minimum’ includes the value of fixed pay
(including taxable benefits and pension).
‘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
both CEO and CFO).
'Maximum & Share Price Growth’ includes
‘maximum’ remuneration, with an assumed
Company share price appreciation of 50%.
86
Origin Enterprises plc Annual Report and Accounts 2022
ANNUAL REPORT ON REMUNERATION
Implementation of the Remuneration Policy for the year ending 31 July 2023
A summary of how the Remuneration Policy will be applied for the financial year ending 31 July 2023 is set out below.
Basic Salary for Executive Directors
Recognising global inflationary pressures and, in some jurisdictions, national requirements, the Company implemented
pay increases in our businesses during the year. The increases in Ireland and the UK were based on a tiering pay
principle, with reducing increases applicable to higher pay bands and a cap above which no increases applied. This
tiered approach was also applied to the Executive Director salaries, with these revised salaries effective 1 August 2022.
Executive Director
2023 (€’000)
2022 (€’000)
% increase
S Coyle
TJ Kelly
515
345
510
340
1.0%
1.5%
Annual Bonus
The maximum bonus achievable in 2023 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,
including in relation to ESG measures.
30%
The measures, their weighting and the targets are reviewed on an annual basis. On the basis that the 2023 targets are
commercially sensitive, they are not disclosed prospectively, consistent with prior years.
50%
The key metrics underlying the 2023 bonus plan for S Coyle and TJ Kelly are as follows:
20%
30%
20%
50%
`
Underlying
PBT
Operating
cash flow
Strategic
objectives
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.
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 2023. The
expected grant level is to be 100% of salary for both Executive Directors, which includes an increase of 5% of salary
for the CFO from his previous grant level. The Committee believes this modest increase is appropriate as it aligns with
the CEO’s grant level and reflects TJ Kelly’s strong performance in the role since joining the business in January 2021.
Furthermore, the Committee is assured that a grant level of 100% of salary for the CFO is in line with market levels.
Before making the grant, as is normal, the Committee will consider the performance metrics and related targets for
awards. Details of any LTIP awards made in the financial year 2023, including performance measurements and targets,
will be disclosed in the Remuneration Report for the financial year 2023. 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.
Governance
87
Non-Executive Director Fees
Fees for the Non-Executive Directors for the 2022 and 2023 financial years are detailed below.
Chairman
Base fee
Additional fees:
Audit and Risk Committee Chair
Remuneration Committee Chair
Senior Independent Director
Committee Membership*
2023
€
130,000
62,000
13,000
8,000
5,000
3,000
2022
€
130,000
62,000
13,000
8,000
5,000
3,000
* Does not apply where there is a separate fee for Chairman of a Committee or to Chairman of the Board.
Remuneration Outcomes for the Year Ended 31 July 2022
Directors’ remuneration (audited) for the year ended 31 July 2022 was as follows:
Salary and
fees
€’000
Taxable
benefits1
€’000
Pension2
€’000
Annual
bonus3
€’000
Long-term
incentives4
€’000
Total
Fixed Pay
€’000
Total
Variable Pay
€’000
S Coyle
2022
2021
TJ Kelly
2022
2021
R Hynes
2022
2021
G Britton
2022
2021
A Connolly*
2022
2021
H Kirkpatrick
2022
2021
C Richards
2022
2021
L Williams**
2022
2021
Former Directors
K Allum***
2022
2021
H McCutcheon***
2022
2021
510
510
340
183
130
130
80
78
54
–
68
54
65
65
51
–
24
73
21
67
34
40
24
15
5
1
–
–
8
–
–
–
–
–
–
–
–
–
–
–
34
34
23
12
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
466
–
311
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
578
584
387
210
135
131
80
78
62
–
68
54
65
65
51
-
24
73
21
67
466
-
311
-
-
-
–
–
-
–
–
–
–
–
–
–
–
–
–
–
% Increase
Nil
Nil
Nil
Nil
Nil
Nil
Total
€’000
1,044
584
698
210
135
131
80
78
62
–
68
54
65
65
51
-
24
73
21
67
*
**
A Connolly was appointed to the Origin Board on 1 October 2021. The amounts included in the table above represent emoluments for the period 1
October 2021 to 31 July 2022.
L Williams was appointed to the Origin Board on 15 October 2021. The amounts included in the table above represent emoluments for the period 15
October 2021 to 31 July 2022.
*** K Allum and H McCutcheon retired from the Board following the 2021 Annual General Meeting. The amounts included in the table above represent
emoluments for the period 1 August 2021 to 25 November 2021.
88
Origin Enterprises plc Annual Report and Accounts 2022
Notes:
1. Taxable Benefits (audited)
Benefits include a car allowance (S Coyle and TJ Kelly) and private medical insurance (including immediate family
members) (S Coyle and TJ Kelly). Benefits also include mileage claimed by Non-Executive Directors for travel to Board
meetings, grossed up for Irish tax purposes.
2. Pensions (audited)
The Company contributes 6.6% of salary to S Coyle and TJ Kelly’s pensions.
Retirement benefits are accruing to the following number of Directors under:
Defined contribution scheme
Number of Directors
2022
2021
2
2
3. Annual Bonus
The financial measures applying to the CEO and CFO’s 2022 bonus were Group underlying PBT (50% of salary) and
operating cash flow (20% of salary), while 30% of the bonus was based on strategic objectives over the course of the
2022 financial year.
Financial measures
Executive
Director
Sean
Coyle*
TJ Kelly*
Financial
Measures
Weighting
(% of
salary)
PBT
required
for
threshold
bonus
€’000
PBT
required
for
maximum
bonus
€’000
Actual
PBT
€'000
Outcome
(% of
salary)
OCF
required
for
threshold
bonus
€’000
OCF
required
for
maximum
bonus
€’000
Actual
OCF
€’000
Outcome
(% of
salary)
70%
48,330
53,700
100,292
50%
31,220
34,689
70,700
20%
70%
48,330
53,700
100,292
50%
31,220
34,689
70,700
20%
*
50% of bonus is payable for achieving maximum adjusted PBT and 20% of bonus is payable for achieving maximum Operating Cash Flow.
Corporate and personal objectives
For 2022, non-financial objectives included a number of strategic objectives relating to Health & Safety programmes,
the development of Science-Based Targets and the implementation of business transformation projects. In relation to
these objectives, the Remuneration Committee determined that a bonus of 21.5% of salary would be paid out of a
maximum of 30%.
Overall, a bonus of 91.5% of maximum (i.e. 91.5% of salary) was earned by the two Executive Directors. The Committee
believes this strong performance is commensurate with the financial and non-financial progress of the Group during FY22.
4. Long-Term Incentives
LTIP awards vesting based on performance to 31 July 2022.
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 2022.
LTIP awards granted during the year ended 31 July 2022.
S Coyle and TJ Kelly were granted LTIP awards in March 2022. These awards are based on performance over the three-
year period ending 31 July 2024. The number of shares awarded was calculated using the closing share price on 10
March 2022 of €3.835.
A summary of the performance conditions for these awards is set out below.
Metric
Adjusted Diluted
Earnings per Share
(‘EPS’)
Weighting
50%
Vesting at Threshold Condition
25%
Free Cash Flow Ratio*
50%
25%
* The definition of Free Cash Flow Ratio is set out on page 31.
Adjusted Diluted EPS at the end of the
three-year period of 47c (threshold) on a
pro-rata basis to 51c (maximum stretch)
for full payout.
An average annual free cash flow ratio of at
least 50% (threshold) on a pro-rata basis to
100% (maximum stretch) for full payout.
Governance
89
An overall summary of the awards is set out below.
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
100% of salary
95% of salary
132,985
84,224
31 July 2024
31 July 2024
11 March 2025
11 March 2025
* 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 2022. This reflects
the actual outcomes under the annual bonus and LTIP schemes compared to their respective maximum opportunities.
2022
2021
2020*
2020**
2019
2018
2017
S Coyle
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
1,044
584
49
526
1,296
1,136
1,031
91.5%
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.
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
2021
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
2022
End of
performance
period
Date from
which
exercisable*
Expiry date
S Coyle
2015 LTIP 08/07/2020
0.01 222,246
2015 LTIP 24/09/2020
0.01
165,048
-
-
2015 LTIP
11/03/2022
0.01
-
132,985
Total
TJ Kelly
387,294 132,985
2015 LTIP
18/01/2021
2015 LTIP
11/03/2022
0.01
0.01
99,691
-
-
84,224
Total
99,691
84,224
* Subject to satisfaction of performance conditions.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 222,246
31/07/2023 08/07/2025 08/07/2027
- 165,048
31/07/2023 24/09/2025 24/09/2027
- 132,985
31/07/2024
11/03/2027
11/03/2029
- 520,279
-
-
-
99,691
31/07/2023
18/01/2026 18/01/2028
84,224
31/07/2024
11/03/2027
11/03/2029
183,915
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 89, and in previous Annual Reports.
Non-Executive Directors do not participate in any Group share incentive or award scheme.
90
Origin Enterprises plc Annual Report and Accounts 2022
Statement of Directors’ and Company Secretary’s Shareholdings and Share Interests (audited)
S Coyle
TJ Kelly
R Hynes
G Britton
A Connolly
H Kirkpatrick
C Richards
L Williams
B Keane
Beneficially
owned at
1 August 2021
Beneficially
owned at
31 July 2022
Unvested LTIP
awards at 31 July
2022
Outstanding share
awards under all
employee share plans
75,000
–
3,875
5,000
-
5,000
7,680
-
–
85,000
4,000
3,875
5,000
-
10,000
7,680
10,000
–
520,279
183,915
–
-
–
–
–
-
8,910
–
–
–
–
–
–
-
45,307
7,485
S Coyle, having joined the Company in September 2018 and having forfeited 131,080 share options in 2020, holds 66.0%
of his salary. TJ Kelly, having joined the Company in January 2021, holds 4.7% of his salary. The value of the shareholdings
held by S Coyle and TJ Kelly is based on their respective shares held at the share price of €3.96 on 31 July 2022.
Details of share ownership guidelines are set out on page 84 of this report.
Statement of Voting at the AGM
At the Company’s 2021 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
52,638,595
3,732,929
56,371,524
270
%
93.38
6.62
100.00
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.
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.
Governance
91
POSITIONED TO CAPITALISE
ON EVOLVING STRUCTURAL
MARKET TRENDS
10.6m
hectares annually
influenced by advice
or products delivered
by an Origin entity
92
Origin Enterprises plc Annual Report and Accounts 2022
FINANCIAL
STATEMENTS
96
94
95
104
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 Balance Sheet
Company Statement of Changes in Equity
Company Accounting Policies
Notes to the Company Financial Statements
120
178
176
177
110
111
181
106
108
105
Governance
93
DIRECTORS AND OTHER INFORMATION
Board of Directors
R Hynes
S Coyle
TJ Kelly
G Britton
A Connolly
H Kirkpatrick
C Richards
L Williams
(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 Bank plc
ING Bank NV
Rabobank Ireland plc
Stockbroker
Numis Securities Limited
The London Stock Exchange Building
10 Paternoster Square
London
EC4M 7LT
United Kingdom
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
Media Relations
FTI Consulting
The Academy Building
Pearse Street
Dublin 2
Ireland
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Origin Enterprises plc Annual Report and Accounts 2022
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
26 September 2022
Sean Coyle
Director
26 September 2022
Financial Statements
95
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 2022 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, which comprise:
— the Consolidated Statement of Financial Position as at 31 July 2022;
— the Company Balance Sheet as at 31 July 2022;
— 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.
96
Origin Enterprises plc Annual Report and Accounts 2022
Our audit approach
Overview
Materiality
Audit
scope
Key audit
matters
Overall materiality
— €5 million (2021: €2.3 million) - Group financial statements.
— Based on c. 5% of profit before income tax and exceptional items.
— €1.9 million (2021: €2.2 million) - Company financial statements.
— Based on c. 0.75% of net assets.
Performance materiality
— €3.75 million (2021: €1.725 million) - Group financial statements.
— €1.425 million (2021: €1.65 million) - Company financial statements.
Audit scope
— We conducted work on 12 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 12
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
— Recoverability of 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.
Financial Statements
Financial Statements
97
97
INDEPENDENT AUDITORS’ REPORT (continued)to the members of Origin Enterprises Plc
Key audit matter
How our audit addressed the key audit matter
Recoverability of 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 €178.32m at 31 July 2022
representing approximately 12% 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 terminal value growth rates
used for periods beyond Year 3 are based on the
long-term growth rates 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 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.
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
agreeing them to the latest board approved budgets. We
assessed the underlying key assumptions in the Year 1 budget
by comparing them to the current year actual performance and
assessing historical budget accuracy.
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 on the outturn
for the relevant years.
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 long
term growth rates for each country.
We used PwC specialists in assessing management’s calculation of
discount rates. Our specialists developed a range of discount rates
for each CGU having regard to the various economic indicators
that would be appropriate in determining the discount rates.
We performed sensitivity analysis on the impact of changes in
key assumptions on the impairment assessments for CGUs. This
included considering the potential impact of adverse weather
patterns by reference to historical experience.
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.
98
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Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
INDEPENDENT AUDITORS’ REPORT (continued)to the members of Origin Enterprises Plc Key audit matter
How our audit addressed the key audit matter
Settlement price adjustments
See accounting policy in relation to revenue
recognition, 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 the estimation of the settlement price
adjustment to be a key audit matter given the level of
estimation uncertainty involved and the historical level
of fluctuation in final settlement prices.
We agreed a sample of data inputs used in the calculation to
underlying documentation.
We performed a look back test designed to assess the outturn of
the prior year estimate by comparing a sample of the estimated
customers’ settlement price adjustments recorded in the prior
year financial statements to the total of related credit notes
issued to the customer in the current year.
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 that the estimate of settlement
price adjustments required at year end was reasonable.
We considered 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 UK, 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 12 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 revenue, Group
profit before income 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, taxation 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.
Financial Statements
Financial Statements
99
99
INDEPENDENT AUDITORS’ REPORT (continued)to the members of Origin Enterprises Plc 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:
Group financial statements
Company financial statements
Overall materiality
€5 million (2021: €2.3 million).
€1.9 million (2021: €2.2 million).
How we determined it
c. 5% of profit before tax and exceptional
items.
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 use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope
of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example
in determining sample sizes. Our performance materiality was 75% of overall materiality, amounting to €3.75 million (Group
audit) and €1.425 million (Company audit).
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our
normal range was appropriate.
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 €0.195 million (Group audit) (2021: €0.115 million) and €0.095 million
(Company audit) (2021: €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) (2021: €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:
— Obtaining management’s going concern assessment and evaluating the 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
and its past record of achieving strategic objectives;
— 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 budgets and forecasts were consistent with related assumptions used
in testing for non-financial asset impairment;
— Evaluating the sensitivity analysis prepared by management 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.
100
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Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
INDEPENDENT AUDITORS’ REPORT (continued)to the members of Origin Enterprises Plc 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.
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 2022 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 95, 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.
Financial Statements
Financial Statements
101
101
INDEPENDENT AUDITORS’ REPORT (continued)to the members of Origin Enterprises Plc 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws
and regulations related to breaches of environmental regulations and health and safety regulations, and we considered the
extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and
regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2014 and tax
legislation. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements
(including the risk of override of controls), and determined that the principal risks were related to posting inappropriate
journal entries to manipulate financial results and potential management bias in accounting estimates. Audit procedures
performed by the group engagement team included:
— Discussions with the Audit & Risk Committee, management and internal audit including consideration of known or suspected
instances of non-compliance with laws and regulations and fraud;
— Review of meeting minutes of the Board, Audit & Risk and Remuneration Committees;
— Considered the results of reporting from component teams relating to compliance with applicable laws and regulations and
procedures performed to address assessed fraud risk;
— Challenging assumptions made by management in its significant accounting estimates, particularly in relation to the key
audit matters;
— Evaluating whether there was evidence of management bias that represents a risk of material misstatement due to fraud;
— Identifying and testing journal entries, including non standard revenue entries based on our risk assessment; and
— Incorporating elements of unpredictability into the audit procedures performed.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations,
or through collusion.
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.
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.
102
102
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
INDEPENDENT AUDITORS’ REPORT (continued)to the members of Origin Enterprises Plc 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
26 September 2022
Financial Statements
Financial Statements
103
103
INDEPENDENT AUDITORS’ REPORT (continued)to the members of Origin Enterprises Plc CONSOLIDATED INCOME STATEMENT
For the financial year ended 31 July 2022
Notes
Pre-
exceptional
2022
€’000
Exceptional
2022
Total
2022
€’000
€’000
Pre-
exceptional
2021
€’000
Exceptional
2021
Total
2021
€’000
€’000
Revenue
Cost of sales
Gross profit
1
2,342,102
(1,972,937)
369,165
-
-
-
2,342,102
1,658,367
(1,972,937)
(1,412,936)
369,165
245,431
-
-
-
1,658,367
(1,412,936)
245,431
Operating (costs) / income
2, 3
(264,661)
3,919
(260,742)
(193,001)
1,506
(191,495)
Share of profit of associates
and joint venture
3, 7
6,845
-
6,845
2,841
(403)
2,438
Operating profit
Finance income
Finance expense
5
4
4
111,349
3,919
115,268
55,271
1,103
56,374
1,127
(12,184)
-
-
1,127
(12,184)
795
(9,347)
-
-
795
(9,347)
Profit before income tax
100,292
3,919
104,211
46,719
1,103
47,822
Income tax (expense)/credit
3,10
(23,240)
(1,072)
(24,312)
(9,712)
122
(9,590)
Profit for the year
77,052
2,847
79,899
37,007
1,225
38,232
Basic earnings per share
Diluted earnings per share
11
11
2022
65.40
63.49
2021
30.44
29.74
104
Origin Enterprises plc Annual Report and Accounts 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the financial year ended 31 July 2022
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
2022
€’000
2021
€’000
79,899
38,232
909
(176)
(2,386)
596
4,653
(1,112)
2,438
(610)
— exchange difference on translation of foreign operations
9,588
6,840
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
9,186
(3,751)
(840)
2,134
(267)
(520)
2,651
(299)
1,166
(146)
Other comprehensive income for the year, net of tax
14,993
15,061
Total comprehensive income for the year attributable to equity shareholders
94,892
53,293
Financial Statements
105
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 July 2022
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
Derivative financial instruments
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
2022
€’000
2021
€’000
12
13
14
15
16
17
27
23
24
14
18
19
23
21
107,906
104,528
47,705
2,270
251,999
47,053
561
7,767
4,241
6,363
45,177
2,270
248,445
42,774
552
5,939
-
6,185
475,865
455,870
5,800
380,412
455,110
2,162
24,200
214,221
434,614
224
193,059
168,660
1,036,543
841,919
1,512,408
1,297,789
106
Origin Enterprises plc Annual Report and Accounts 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
As at 31 July 2022
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
Put option liability
Provision for liabilities
Derivative financial instruments
Total current liabilities
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
On behalf of the Board
Rose Hynes
Director
26 September 2022
Sean Coyle
Director
26 September 2022
Notes
2022
€’000
2021
€’000
28
22
13
24
26
25
23
22
13
20
26
25
23
1,253
160,521
241,003
402,777
1,264
160,498
199,243
361,005
132,936
140,184
38,753
20,854
-
4,002
-
36,226
21,161
24,138
1,445
323
196,545
223,477
16,689
9,803
841,085
12,290
29,695
1,610
1,914
42,882
9,910
645,924
11,841
-
2,014
736
913,086
713,307
1,109,631
936,784
1,512,408
1,297,789
Financial Statements
107
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Financial Statements
109
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 July 2022
Cash flows from operating activities
Profit before tax
Exceptional items
Finance income
Finance expenses
Loss / (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
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 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 loans
Dividends received from associates
Cash inflow/(outflow) from investing activities
Cash flows from financing activities
Drawdown of bank loans
Repayment of bank loans
Lease liability payments
Share buyback
Payment of dividends to equity shareholders
Cash outflow 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
110
Origin Enterprises plc Annual Report and Accounts 2022
Notes
2022
€’000
2021
€’000
3
4
4
16
12
13
15
8
27
14
15
33
25
13
28
22
21,22
104,211
(3,919)
(1,127)
12,184
650
(6,845)
10,696
11,482
17,112
2,285
(762)
-
(206)
-
145,761
(161,914)
(18,464)
196,531
161,914
(8,040)
(26,213)
127,661
19,500
-
1,083
(13,128)
(10,998)
(1,457)
(106)
-
2,898
3,042
834
295,365
(334,465)
(13,499)
(39,997)
(13,449)
(106,045)
22,450
(1,858)
155,778
176,370
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)
137,665
(180,065)
(12,553)
-
(3,956)
(58,909)
2,246
856
152,676
155,778
GROUP ACCOUNTING POLICIES
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
2022 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 26 September 2022.
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 2021.
New IFRS accounting
standards and
interpretations not yet
adopted by the EU and
not yet effective
The Group has not applied the following
IFRSs and International Financial
Reporting Interpretations Committee
(‘IFRIC’) Interpretations that have not
yet been adopted by the EU:
— Amendments to IAS 1 ‘Presentation
of Financial Statements’ and IFRS
Practice Statement 2: ‘Disclosure of
Accounting Policies’
— Amendments to IAS 8 ‘Accounting
policies, Changes in Accounting
Estimates and Errors’: Definition of
Accounting Estimates
— Amendments to IAS 12 ‘Income
Taxes’: Deferred Tax related to
Assets and Liabilities arising from a
Single Transaction
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:
New IFRS accounting
standards and
interpretations
adopted in 2021/2022
During the year ended 31 July 2022,
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 2021:
— Amendments to IFRS 9, IAS 39, IFRS
7, IFRS 4 and IFRS 16 Interest Rate
Benchmark Reform – Phase 2
— Amendment to IFRS 16 Leases:
COVID-19-Related Rent Concessions
beyond 30 June 2021
— Amendments to IFRS 4 ‘Insurance
Contracts’ – Extension of the
Temporary Exemption from Applying
IFRS 9
These standards did not have a material
impact on the entity in the current
financial year and are not expected
to have a material impact on future
reporting periods or foreseeable
future transactions.
— 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’: Reference to the
Conceptual Framework
— Annual Improvements to IFRS
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.
Standards 2018-2020
— IFRS 17 Insurance Contracts
and Amendments to IFRS 17
Insurance Contracts
— Amendments to IAS 1: ‘Presentation
of Financial Statements’:
Classification of Liabilities as Current
or Non-Current
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.
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.
Financial Statements
111
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. Having evaluated the 2023
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 2022, the Group had
cash and cash equivalents of €176.4
million (2021: €155.8m) and had total
unsecured committed banking facilities
of €400.0 million (2021: €430.0
million), of which €33.8m will expire
in June 2024 and €366.2 million will
expire in June 2026, as disclosed in
Note 22. Given the amount of cash
and cash equivalents as at 31 July
2022, 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 2023 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 IFRSs 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.
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.
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.
Subsidiary undertakings
Associates and joint ventures
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.
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.
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’.
112
112
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
GROUP ACCOUNTING POLICIES (continued) Rebates
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.
Revenue recognition
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.
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.
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.
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.
Financial Statements
Financial Statements
113
113
GROUP ACCOUNTING POLICIES (continued) 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.
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.
114
114
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
GROUP ACCOUNTING POLICIES (continued) 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.
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 3 to 15 years
3 to 7.5 years
Motor vehicles
20 to 50 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.
Financial Statements
Financial Statements
115
115
GROUP ACCOUNTING POLICIES (continued) 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.
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.
116
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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.
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,
— its intentions to complete
the development,
— its ability to use or sell the
intangible asset,
— its ability to generate future
economic benefits,
— the availability of resources to
complete the development; and
— its 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.
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.
Financial Statements
Financial Statements
117
117
GROUP ACCOUNTING POLICIES (continued) 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.
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.
118
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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.
GROUP ACCOUNTING POLICIES (continued) 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.
Financial Statements
Financial Statements
119
119
GROUP ACCOUNTING POLICIES (continued) NOTES TO THE GROUP FINANCIAL STATEMENTS
Segment information
1
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 and Ukraine. Comparative numbers for 2021 include the Pillaert business, a Belgian company
that was disposed of during the prior year.
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
2022
€’000
2021
€’000
2022
€’000
2021
€’000
2022
€’000
2021
€’000
2022
€’000
2021
€’000
Total revenue
2,101,719 1,406,528
654,446 570,131
73,233 38,966
2,829,398 2,015,625
Less revenue from associates and
joint venture
(487,296)
(357,258)
-
-
-
-
(487,296)
(357,258)
Revenue
1,614,423 1,049,270
654,446 570,131
73,233 38,966
2,342,102 1,658,367
Segment result
94,480
39,137
15,604
15,587
9,656
6,283
119,740
61,007
Profit from associates and joint
venture
Amortisation of non-ERP intangible
assets
Operating profit before
exceptional items
Exceptional items
Operating profit
6,845
2,841
-
-
-
-
6,845
2,841
(7,967)
(5,302)
(5,354)
(1,529)
(1,915)
(1,746)
(15,236)
(8,577)
93,358
36,676
10,250
14,058
7,741
4,537
111,349
55,271
3,919
(1,496)
-
2,599
-
-
3,919
1,103
97,277
35,180
10,250
16,657
7,741
4,537
115,268
56,374
120
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Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 1
(a)
Segment information (continued)
Analysis by segment (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)
2022
€’000
115,268
1,127
(12,184)
104,211
(24,312)
79,899
2021
€’000
56,374
795
(9,347)
47,822
(9,590)
38,232
Ireland and the UK
Continental
Europe
Latin America
Total Group
2022
€’000
2021
€’000
2022
€’000
2021
€’000
2022
€’000
2021
€’000
2022
€’000
2021
€’000
835,080 631,831
307,690 359,636
116,199
87,927
1,258,969
1,079,394
47,614
43,326
-
-
-
-
47,614
43,326
Segment assets
882,694 675,157
307,690 359,636
116,199
87,927
1,306,583
1,122,720
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
193,059
168,660
6,403
6,363
224
6,185
1,512,408
1,297,789
Ireland and the UK
Continental
Europe
Latin America
Total Group
2022
€’000
2021
€’000
2022
€’000
2021
€’000
2022
€’000
2021
€’000
2022
€’000
2021
€’000
Segment liabilities
607,864 407,155
262,547 273,687
54,537
38,815
924,948
719,657
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
149,625
183,066
1,914
33,144
1,059
33,002
1,109,631
936,784
Financial Statements
Financial Statements
121
121
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 1
(a)
Segment information (continued)
Analysis by segment (continued)
(v) Other segment information
Ireland and the UK
Continental Europe
Latin America
Total Group
2022
€’000
2021
€’000
2022
€’000
2021
€’000
2022
€’000
2021
€’000
2022
€’000
2021
€’000
Depreciation
Intangible amortisation
Exceptional items (Note 3)
Capital expenditure –
property, plant and equipment
Capital expenditure – ERP and
computer intangibles
Total capital expenditure
16,818
14,219
(3,919)
14,608
8,887
1,496
4,826
971
-
4,211
1,529
(2,599)
534
1,922
-
270
1,746
-
22,178
17,112
(3,919)
19,089
12,162
(1,103)
10,006
4,726
2,425
1,172
1,046
1,476
13,477
7,374
8,289
18,295
7,804
12,530
635
3,060
539
1,711
8
1,054
6
1,482
8,932
22,409
8,349
15,723
(b) Analysis by geography and revenue lines
Ireland and the UK
Continental Europe
Latin America
Total Group
2022
€’000
2021
€’000
2022
€’000
2021
€’000
2022
€’000
2021
€’000
2022
€’000
2021
€’000
Revenue
Total segment assets
IFRS 8 non-current assets*
1,614,423 1,049,270
675,157
331,258
882,694
351,171
654,446 570,131
307,690 359,636
63,111
51,746
73,233
116,199
54,581
38,966
87,927
49,377
2,342,102
1,306,583
457,498
1,658,367
1,122,720
443,746
* The total non-current assets in the UK are €272.0 million (2021: €286.3 million).
The following table disaggregates revenue by significant revenue lines:
Integrated Agronomy and
Digital Agricultural Services
Business-to-Business
Agri-Inputs
Total Group
2022
€’000
2021
€’000
2022
€’000
2021
€’000
2022
€’000
2021
€’000
Revenue
1,252,329
984,192
1,089,773
674,175
2,342,102
1,658,367
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)
122
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Origin Enterprises plc Annual Report and Accounts 2022
2022
€’000
2021
€’000
121,718
127,707
15,236
264,661
(3,919)
260,742
102,308
82,116
8,577
193,001
(1,506)
191,495
NOTES 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 properties held for sale (i)
Gain on disposal of subsidiary (ii)
Transaction and other related credit / (costs) (iii)
Pension and rationalisation related costs (iv)
Total exceptional credit before tax and before associates and joint venture
Arising in associates and joint venture (v)
Total exceptional credit before tax
Tax charge/(credit) on exceptional items
2022
€’000
2021
€’000
3,794
-
125
-
3,919
-
3,919
(1,072)
-
2,599
(253)
(840)
1,506
(403)
1,103
122
Total exceptional credit after tax
2,847
1,225
(i) Gain on disposal of properties held for sale
During the current year, held for sale properties (Note 14) were sold, resulting in an exceptional gain of €3.8 million. Also
included are costs relating to the disposal of the properties. The tax impact of this exceptional item in the current year was a
charge of €1.1 million.
(ii) Gain on disposal of subsidiary
Following the disposal of the Group’s Pillaert business operated in Belgium in the prior year, 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
The tax impact of this exceptional item in the prior year was a tax charge of €Nil.
2021
€’000
5,209
3,351
4,900
269
(1,323)
12,406
(15,005)
2,599
Financial Statements
Financial Statements
123
123
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 3 Exceptional items (continued)
(iii) Transaction and other related credit / (costs)
Transaction and other related credit / (costs) comprise of a dilapidation credit. The costs in the prior year principally
comprised of costs incurred in relation to the acquisition completed during the prior year.
(iv) Pension and rationalisation related costs
Rationalisation costs in the prior year related to termination payments from restructuring programmes across the Group. The
tax impact of this exceptional item in the prior year was a tax credit of €0.1 million.
(v) Arising in associates and joint venture
The exceptional charge in the prior year related 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 prior year was a tax credit of €0.1 million.
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)
Total finance expenses
Finance costs, net
Recognised directly in Other Comprehensive Income
2022
€’000
2021
€’000
1,034
93
1,127
(10,274)
(1,910)
(12,184)
(11,057)
787
8
795
(7,518)
(1,829)
(9,347)
(8,552)
Effective portion of changes in fair value of interest rate swaps
4,677
700
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
(i) The operating lease rentals charge relates to short-term and low-value leases.
124
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Origin Enterprises plc Annual Report and Accounts 2022
2022
€’000
2021
€’000
1,961,292
1,402,363
17,112
10,696
11,482
4,497
206
12,162
8,176
10,913
3,758
9
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 5 Statutory and other information (continued)
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
6 Directors’ emoluments
Emoluments
Emoluments include the following contributions to retirement benefit schemes:
— Defined contribution
— Defined benefit
2022
€’000
2021
€’000
734
29
624
43
2022
€’000
2021
€’000
2,248
1,771
57
-
57
46
39
85
Further details are shown in the Remuneration Committee Report on pages 80 to 91.
There are no retirement benefits accruing to Directors (2021: one Director) under a defined benefit scheme and there are
retirement benefits accruing to two Directors (2021: 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)
2022
€’000
2021
€’000
487,296
357,258
6,845
-
2,841
(403)
Financial Statements
Financial Statements
125
125
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 8 Employment
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
Aggregate employment costs of the Group are analysed as follows:
Wages and salaries
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
— defined benefit schemes – net interest income
— defined contribution schemes
Share based payment charge
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)
2022
Number
2021
Number
1,612
441
590
2,643
1,626
420
595
2,641
2022
Number
2021
Number
6
2
6
3
2022
€’000
2021
€’000
137,677
12,190
112,776
10,578
590
-
(93)
4,666
2,285
1,045
-
526
17
(8)
4,113
1,016
146
840
158,360
130,004
(909)
157,451
(4,653)
125,351
126
126
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES 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:
2019 Awards
2019 Awards
– Senior
Management
Targets &
Thresholds
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 10,909 (2021: 111,614) share
options vested and a further 25,455 (2021: 338,058) were not awarded.
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
Proportion of the Adjusted Diluted
EPS award vesting
Below 5 per cent
5 per cent
Between 5 per cent and 10 per cent
10 per cent and above
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 Invested 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
Proportion of the ROIC award vesting
Below 12.5 per cent
12.5 per cent
Between 12.5 per cent and 17.5 per cent 30 per cent- 100 per cent pro rata
17.5 per cent and above
0 per cent
30 per cent
100 per cent
— 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
Proportion of the FCFR award vesting
Below 50 per cent
50 per cent
Between 50 per cent and 100 per cent
100 per cent and above
0 per cent
30 per cent
30 per cent- 100 per cent pro rata
100 per cent
Financial Statements
Financial Statements
127
127
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 9 Long Term Incentive Plans (continued)
2020 - 2021 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. During the year 31,302 share options relating to D Giblin lapsed.
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 21,915 (2021: 91,953) share options were forfeited due to one (2021: two)
employee 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 growth in the Group’s
consolidated Adjusted Earnings per Share ('Adjusted EPS') determined in accordance with the table below.
Annualised Adjusted Diluted
EPS growth
Proportion of the Adjusted Diluted
EPS award vesting
Below 46 cent
46 cent
Between 46 cent and 50 cent
50 cent and above
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
Proportion of the FCFR award vesting
Below 50 per cent
50 per cent
Between 50 per cent and 100 per cent 30 per cent- 100 per cent pro rata
100 per cent and above
0 per cent
30 per cent
100 per cent
128
128
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 9 Long Term Incentive Plans (continued)
2022 Awards
2022 Awards
- Directors
Targets &
Thresholds
On 14 March 2022 under the terms of the 2015 LTIP Plan, S Coyle was granted 132,985 share options
and TJ Kelly was granted 84,224 share options.
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 growth in the
Group’s consolidated Adjusted Earnings per Share ('Adjusted EPS') determined in accordance with
the table below.
Annualised Adjusted Diluted
EPS growth
Proportion of the Adjusted Diluted
EPS award vesting
Below 47 cent
47 cent
Between 47 cent and 51 cent
51 cent and above
0 per cent
25 per cent
25 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
Proportion of the FCFR award vesting
Below 50 per cent
50 per cent
Between 50 per cent and 100 per cent
100 per cent and above
0 per cent
25 per cent
25 per cent- 100 per cent pro rata
100 per cent
All Awards
Additional
Conditions
Transfer of
Ownership /
Vesting
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.
Financial Statements
Financial Statements
129
129
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 9 Long Term Incentive Plans (continued)
Movement in the number of share options outstanding is as follows:
At 1 August
Vested (i)
Not awarded (i)
Lapsed (ii)
Forfeiture
Granted
At 31 July
Number of
share options
2022
Number of
share options
2021
1,731,547
(10,909)
(25,455)
(31,302)
(21,915)
217,209
1,859,175
761,442
(111,614)
(338,058)
-
(145,113)
1,564,890
1,731,547
(i) The amounts vested and not awarded relate to the 2019 awards as detailed on page 127. The total share options awarded
were 36,364, of which 10,909 have vested but none of which have yet been exercised.
(ii) The share options which have lapsed are accounted for as forefeired shares which resulted in a credit of €11,000 in the
Income Statement.
Grant date
Expiry date
Exercise
price
Number of
share options
2022
Number of
share options
2021
2 October 2018 (i)
8 July 2020 (ii)
24 September 2020 (iii)
18 January 2021 (iv)
14 March 2022 (v)
1 October 2025
8 July 2027
24 September 2027
18 January 2028
14 March 2029
€0.01
€0.01
€0.01
€0.01
€0.01
-
222,246
1,320,029
99,691
217,209
1,859,175
36,364
222,246
1,373,246
99,691
-
1,731,547
(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 €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.
(iii) 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.
(iv) 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.
(v) The fair value of the share options granted was €3.20 using the Black Scholes valuation model. The significant inputs into the
model were weighted average share price of €3.84 at the grant date, exercise price of €0.01 and dividend yield of 5.5 per cent.
Cash based long term incentive plan
During the 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. Under the scheme 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 diluted earnings per share, Free cash flow ratio, Return on invested capital and Earnings before interest
and tax) over a three-year period to 31 July 2024. The amount was charged to the income statement within payroll costs in
the year ended 31 July 2022 was €1.1m and is in line with the accounting policy on page 114. 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 2022 and forecasted results for
2023 and 2024.
130
130
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES 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 is as follows:
At 1 August
Charge
At 31 July
Grant date
Expiry date
1 June 2018
1 June 2019
1 June 2020
1 June 2021
1 June 2022
1 June 2023
Option
Price
€1.40
€1.42
€0.51
Exercise
price
€4.20
€4.32
€2.02
2022
€’000
2021
€’000
554
150
704
246
308
554
Number of
share options
2022
Number of
share options
2021
-
62,454
39,629
66,555
1,696,721
1,823,169
1,759,175
1,929,353
Financial Statements
Financial Statements
131
131
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 9 Long Term Incentive Plans (continued)
Save As You Earn (‘SAYE’) scheme-UK and Ireland (continued)
The main variable inputs used to calculate the SAYE schemes are as follows:
Scheme
2018
€5.25
€4.20
3 years
28.9%
3.0%
Scheme
2019
€5.40
€4.32
3 years
27.9%
3.0%
Scheme
2020
€2.53
€2.02
3 years
30.4%
3.0%
2021
€’000
9,513
77
9,590
47,822
(2,438)
45,384
5,673
589
2,799
4,434
2022
€’000
26,594
(2,282)
24,312
104,211
(6,845)
97,366
12,171
38
4,467
7,085
(1,302)
(2,989)
882
971
24,312
90
(1,006)
9,590
(176)
(41)
(840)
(1,112)
20
(298)
(1,057)
(1,390)
Share price
Exercise price
Term
Share price volatility
Discount rate
10 Income tax
Current tax expense
Deferred tax (credit) / charge
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
Foreign exchange
Hedge related
Recognised in the Consolidated Statement of Comprehensive Income
132
132
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued)
10 Income tax (continued)
The effective tax rate is 23.0% 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 credit / (expense) on non-ERP amortisation
Add-back: tax on associates
Total adjusted income tax expense
2022
€’000
2021
€’000
100,292
15,236
1,421
116,949
23,240
2,269
1,421
26,930
46,719
8,577
703
55,999
9,712
(55)
703
10,360
Effective tax rate
23.0%
18.5%
A deferred tax asset of €6.4 million (2021: €6.2 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 (2021: €34.0 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.
11 Earnings per share
Basic earnings per share
Profit for the financial year attributable to equity shareholders
2022
€’000
2021
€’000
79,899
38,232
‘000
‘000
Weighted average number of ordinary shares for the year
122,164
125,595
Basic earnings per share
Cent
Cent
65.40
30.44
Financial Statements
Financial Statements
133
133
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 11 Earnings per share (continued)
Diluted earnings per share
Profit for the financial year attributable to equity shareholders
Weighted average number of ordinary shares used in basic calculation
Impact of shares with a dilutive effect
Impact of the SAYE scheme with a dilutive effect (Note 9)
Weighted average number of ordinary shares (diluted) for the year
Diluted earnings per share
Adjusted basic earnings per share
2022
€’000
2021
€’000
79,899
38,232
‘000
‘000
122,164
125,595
1,928
1,759
1,019
1,929
125,851
128,543
Cent
Cent
63.49
29.74
2022
‘000
2021
‘000
Weighted average number of ordinary shares for the year
122,164
125,595
2022
€‘000
2021
€‘000
79,899
38,232
15,236
(2,269)
(2,847)
90,019
8,577
55
(1,225)
45,639
Cent
Cent
73.69
36.34
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
134
134
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 11 Earnings per share (continued)
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 with a dilutive effect (Note 9)
Weighted average number of ordinary shares (diluted) for the year
Adjusted earnings (as above)
Adjusted diluted earnings per share
12 Property, plant and equipment
2022
‘000
2021
‘000
122,164
125,595
1,928
1,759
1,019
1,929
125,851
128,543
2022
€‘000
2021
€‘000
90,019
45,639
Cent
Cent
71.53
35.50
Land and
buildings
€’000
Plant and
machinery
€’000
Motor
vehicles
€’000
Assets under
construction
€’000
Total
€’000
Cost
At 1 August 2021
Additions
Transfers from under construction
Arising on acquisition (Note 33)
Disposals / retirements
Translation adjustments
At 31 July 2022
Accumulated depreciation
At 1 August 2021
Depreciation charge for year
Disposals / retirements
Translation adjustments
At 31 July 2022
Net book amounts
At 31 July 2022
At 31 July 2021
89,539
3,474
9
509
(570)
944
17,214
2,781
(14)
209
81,056
8,065
201
365
6,241
424
-
-
(12,897)
(1,344)
710
(206)
5,115
93,905
77,500
53,516
6,372
4,318
1,543
(11,801)
(1,263)
323
(270)
4,328
20,190
48,410
2,740
1,514
(210)
-
-
270
4,314
-
-
-
-
-
179,576
13,477
-
874
(14,811)
1,718
180,834
75,048
10,696
(13,078)
262
72,928
73,715
29,090
787
4,314
107,906
72,325
27,540
1,923
2,740
104,528
Financial Statements
Financial Statements
135
135
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 12 Property, plant and equipment (continued)
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
At 31 July 2020
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
76,283
25,747
2,302
5,031
109,363
13 Leases
The movement in the Group’s right-of-use leased assets during the period is as follows:
At 1 August
Additions in period
Arising on acquisition (Note 33)
Termination of leases
Depreciation charge
Translation adjustments
Right-of-use leased assets at 31 July
136
136
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
2022
€’000
45,177
13,708
-
(361)
2021
€’000
39,824
14,772
189
(821)
(11,482)
(10,913)
663
47,705
2,126
45,177
NOTES 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 2022
Land and
buildings
€’000
Plant and
machinery
€’000
Motor
Vehicles
€’000
IT
software
€’000
Depreciation expense
Right-of-use leased assets
5,360
32,204
2,647
8,384
3,475
7,018
-
-
At 31 July 2021
Land and
buildings
€’000
Plant and
machinery
€’000
Motor
Vehicles
€’000
IT
software
€’000
Depreciation expense
Right-of-use leased assets
4,867
31,027
2,781
6,921
3,242
7,229
23
-
The amounts recognised in the Consolidated Income Statement include:
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
New leases arising in the period
Termination of leases
Lease payments
Arising on acquisition
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.
Total
€’000
11,482
47,705
Total
€’000
10,913
45,177
2021
€’000
10,913
1,829
3,758
2021
€’000
40,736
14,772
(785)
2022
€’000
11,482
1,910
4,497
2022
€’000
46,136
13,708
(402)
(13,499)
(12,553)
-
1,910
703
48,556
9,803
38,753
48,556
189
1,829
1,948
46,136
9,910
36,226
46,136
Financial Statements
Financial Statements
137
137
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 14 Investment properties and properties held for sale
2022
Properties
held for sale
€’000
2022
Investment
properties
€’000
2022
Total
2021
Total
€’000
€’000
At 1 August
Disposal of held for sale properties (i)
At 31 July
24,200
(18,400)
5,800
2,270
-
2,270
26,470
(18,400)
8,070
29,370
(2,900)
26,470
(i)
In the current year, held for sale properties were disposed and proceeds of €19.5 million (€2.9 million) were received.
When combined with deposits received in advance of €3.0 million in the prior year, it resulted in a pre-tax exceptional
credit of €3.8 million after selling costs and professional fees.
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 2022 and 2021 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.
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
2022
€’000
2021
€’000
Offers from third parties
5,800
24,200
Comparable market transactions: level 3
-
-
Total
5,800
24,200
2022
€’000
-
2,270
2,270
2021
€’000
-
2,270
2,270
2022
€’000
2021
€’000
5,800
2,270
8,070
24,200
2,270
26,470
138
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Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 14 Investment properties and properties held for sale (continued)
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
2022
€’000
24,200
(18,400)
5,800
2021
€’000
27,100
(2,900)
24,200
2022
€’000
2,270
-
2,270
2021
€’000
2022
€’000
2021
€’000
2,270
26,470
-
(18,400)
2,270
8,070
29,370
(2,900)
26,470
At 1 August
Disposal of held for sale properties
Total
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.
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 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.
The estimated fair value would increase/
(decrease) if: Comparable market prices
per square acre were higher / (lower).
Financial Statements
Financial Statements
139
139
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 15 Goodwill and intangible assets
Intangible assets
Goodwill
Brand Customer
related
€’000
€’000
€’000
Developed
Technology
(i)
€’000
Computer
related
ERP (ii)
Related
Total
€’000
€’000
€’000
Cost
At 1 August 2021
Additions
Arising on acquisition (Note 33)
Disposals / retirements
Retirement of customer related
intangibles
Translation adjustment
At 31 July 2022
Accumulated Amortisation
At 1 August 2021
Amortisation
Disposals / retirements
Retirement of customer
related intangibles
Translation adjustment
At 31 July 2022
Net book value
At 31 July 2022
171,022
10,831
87,963
-
1,308
-
-
8
179
-
-
29
827
-
(8,874)
5,990
532
1,797
178,320
11,550
81,742
1,667
25,671
21,975
2,029
14,318
29,909
336,018
3,022
5,910
10,998
-
-
-
-
-
2,314
(821)
(6,527)
(7,348)
-
133
-
54
(8,874)
10,173
16,652
29,346
343,281
-
-
-
-
-
-
3,209
46,795
583
7,896
-
-
-
(8,874)
7,508
3,984
-
-
113
899
853
7,284
2,773
(312)
22,777
1,876
87,573
17,112
(6,188)
(6,500)
-
82
-
24
(8,874)
1,971
3,905
46,716
12,345
9,827
18,489
91,282
178,320
7,645
35,026
13,326
6,825
10,857
251,999
At 31 July 2021
171,022
7,622
41,168
14,467
7,034
7,132
248,445
140
140
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 15 Goodwill and intangible assets (continued)
Intangible assets
Goodwill
Brand Customer
related
€’000
€’000
€’000
Developed
Technology
(i)
€’000
Computer
related
ERP (ii)
Related
Total
€’000
€’000
€’000
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
Cost
At 1 August 2020
Additions
Arising on acquisition
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
At 31 July 2020
162,681
6,807
40,760
14,630
5,278
5,793
235,949
Material individual intangible assets are as follows:
Customer Lists with a carrying value of €7.3 million and €3.2 million respectively that have remaining residual lives of 10 years
and 9 years. Developed technologies with a carrying value of €5.8 million that have remaining residual lives of 5 years.
(i) Developed technology relates to acquired accumulated knowledge and applied know-how.
(ii)
Included in Group ERP are assets under construction with a carrying value of €8.7 million, these are not amortised until
brought into use. ERP related amortisation is charged within operating costs in the Consolidated Income Statement.
Financial Statements
Financial Statements
141
141
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 15 Goodwill and intangible assets (continued)
Cash generating units
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
2022
Pre-tax
discount
rate
2021
Projection
Period
EBIT Growth
rate in
Year 2 & 3
Terminal
Value Growth
Rate
For financial years 2022 and 2021
Total
Goodwill
2022
€’000
Total
Goodwill
2021
€’000
Agronomy – UK
Amenity
Fertiliser
Latin America
Poland
Romania
10.2%
10.2%
10.2%
14.5%
9.6%
11.6%
8.6%
8.6%
8.6%
13.5%
8.7%
10.3%
3 years
3 years
3 years
3 years
3 years
3 years
2%
2%
2%
5%
4%
4%
2%
2%
2%
2%
2%
2%
83,176
13,734
14,767
36,972
7,856
21,815
80,532
13,512
14,528
32,444
8,146
21,860
178,320
171,022
Impairment testing of goodwill
The recoverable amounts of CGUs are based on value in use computations. The cash flow forecasts used for 2023 (Year 1) are
extracted from the 2023 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 9.6% to 14.5%. 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.
142
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Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES 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
Translation adjustment
At 31 July
Split as follows:
Total associates
Total joint venture
2022
€’000
42,774
6,845
-
(3,042)
77
399
47,053
2021
€’000
40,597
2,841
(403)
(4,468)
2,848
1,359
42,774
2022
€’000
2021
€’000
24,580
22,473
47,053
24,178
18,596
42,774
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
Dividends received by Group
Exchange differences arising on consolidation
The investment in associates and joint venture as at 31 July 2022 is analysed as follows:
2022
€’000
2021
€’000
974,593
714,515
154
(3,042)
399
5,696
(4,468)
1,359
Non-current assets
Current assets
Non-current liabilities
Current liabilities
At 31 July 2022
Associates
€’000
Joint venture
€’000
Total
€’000
8,930
58,771
(8,464)
(34,657)
24,580
6,815
47,770
(6,022)
(26,090)
22,473
15,745
106,541
(14,486)
(60,747)
47,053
Financial Statements
Financial Statements
143
143
NOTES 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 2021 is analysed as follows:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
At 31 July 2021
Associates Joint venture
€’000
€’000
Total
€’000
11,469
40,237
(5,683)
12,518
28,118
(6,575)
(21,845)
(15,465)
24,178
18,596
23,987
68,355
(12,258)
(37,310)
42,774
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
During the financial year, write-downs of inventories of €1.5 million were recognised as an expense.
2022
€’000
2021
€’000
552
-
9
561
575
(56)
33
552
2022
€’000
2021
€’000
137,375
237,030
6,007
74,054
137,267
2,900
380,412
214,221
144
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Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 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
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
2022
€’000
2021
€’000
397,131
30,562
7,058
1,550
18,809
455,110
381,610
30,013
3,450
5,867
13,674
434,614
2022
€’000
2021
€’000
658,980
124,483
-
15,239
12,604
29,779
510,533
69,910
3,000
12,691
8,960
40,830
841,085
645,924
(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 2022 approximately €63.8 million (2021: €43.5 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
2022
€’000
2021
€’000
193,059
(16,689)
176,370
168,660
(12,882)
155,778
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.
Financial Statements
Financial Statements
145
145
NOTES 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
Cash
Overdraft
Cash and cash equivalents
Loans
Net (debt) / cash
Lease liabilities
Net debt including lease liabilities
2022
€’000
2021
€’000
132,936
38,753
171,689
140,184
36,226
176,410
-
16,689
9,803
26,492
30,000
12,882
9,910
52,792
198,181
229,202
2021
Cash flow
€’000
€’000
Non-cash
movement
€’000
Translation
adjustment
€’000
2022
€’000
168,660
(12,882)
155,778
(170,184)
(14,406)
(46,136)
(60,542)
25,403
(2,953)
22,450
39,100
61,550
13,499
75,049
-
-
-
(595)
(1,004)
(854)
193,059
(16,689)
(1,858)
(1,257)
176,370
(132,936)
(595)
(3,115)
43,434
(15,216)
(15,811)
(703)
(48,556)
(3,818)
(5,122)
146
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Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 22 Interest-bearing loans and borrowings (continued)
Cash
Overdraft
Cash and cash equivalents
Loans
Net debt
Lease liabilities
Net debt including lease liabilities
The details of outstanding loans are as follows:
2022
Unsecured loan facility:
— term facility maturing in June 2026
— term facility maturing in June 2026
— term facility maturing in June 2026
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)
Currency
Nominal
value
€’000
Carrying
amount
€’000
EUR
STG
PLN
30,000
95,431
8,852
29,699
94,475
8,762
134,284
132,936
Financial Statements
Financial Statements
147
147
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 22 Interest-bearing loans and borrowings (continued)
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
Currency
Nominal
value
€’000
Carrying
amount
€’000
EUR
STG
PLN
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
At 31 July 2022, the Group had unsecured committed banking facilities of €400.0 million (2021: €430.0 million), of which
€33.8m will expire in June 2024 and €366.2 million will expire in June 2026.
At 31 July 2022, the average interest rate being paid on the Group’s borrowings was 2.15 per cent (2021: 1.38 per cent).
During the financial year, the term facility maturing in September 2021 expired and the Group extended the revolving credit
facility due to expire in June 2025 to June 2026.
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
2022
€’000
2021
€’000
16,689
132,936
149,625
42,882
140,184
183,066
9,803
38,753
48,556
9,910
36,226
46,136
148
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Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 23 Financial instruments and financial risk
Guarantees
Group borrowings are secured by guarantees from Origin Enterprises plc and certain principal operational entities of the Group.
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
at fair value
through
income
statement
€’000
€’000
Financial
assets/
(liabilities) at
amortised
cost
€’000
Fair value
Total
carrying
value
€’000
€’000
Level 2
Level 3
Level 2
Level 3
Level 2
-
-
6,403
-
6,403
-
-
-
-
-
(29,695)
(1,914)
(31,609)
-
-
-
-
-
-
561
561
561
429,243
429,243
429,243
-
6,403
6,403
193,059
193,059
193,059
622,863
629,266
629,266
(798,702)
(798,702)
(798,702)
(3,081)
-
(3,081)
(3,081)
-
-
-
-
-
(16,689)
(16,689)
(16,689)
(132,936)
(132,936)
(132,936)
(48,556)
(48,556)
(48,556)
-
-
(29,695)
(29,695)
(1,914)
(1,914)
(3,081)
(996,883) (1,031,573)
(1,031,573)
2022
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
Financial Statements
Financial Statements
149
149
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 23 Financial instruments and financial risk (continued)
Guarantees (continued)
Fair value
hierarchy
Financial instruments
at fair value
through other
comprehensive
income
at fair value
through
income
statement
€’000
€’000
Financial
assets/
(liabilities) at
amortised
cost
€’000
Fair value
Total
carrying
value
€’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
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.
150
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NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 23 Financial instruments and financial risk (continued)
Estimation of fair values (continued)
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 2022 was €170,938,000
(2021: €64,023,000).
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 2022 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.
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 2022 were €107,264,000
(2021: €94,579,000).
At 31 July 2022, the average fixed interest rate on the swap portfolio was 0.58% (2021: 0.67%). The main floating rates are
EURIBOR and SONIA. Gains and losses recognised in the hedging reserve in equity on interest rate swap contracts as of 31 July
2022 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 2022. 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
Financial Statements
Financial Statements
151
151
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 23 Financial instruments and financial risk (continued)
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.
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.
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NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 23 Financial instruments and financial risk (continued)
Credit risk (continued)
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
Carrying
amount
2022
€’000
561
429,243
193,059
6,403
Carrying
Amount
2021
€’000
552
417,490
168,660
224
629,266
586,926
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 the location of customers was as follows:
Ireland and United Kingdom
Continental Europe
Latin America
Carrying
amount
2022
€’000
196,444
172,345
28,342
397,131
Carrying
amount
2021
€’000
138,449
222,531
20,630
381,610
At 31 July 2022 trade receivables of €314,485,000 (2021: €315,834,000) 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
2022
2021
Gross
€’000
Impairment
€’000
Gross
€’000
Impairment
€’000
325,958
(11,473)
317,598
67,794
21,959
22,606
438,317
(5,006)
(4,323)
(20,384)
(41,186)
48,307
13,237
30,216
409,358
(1,764)
(2,500)
(625)
(22,859)
(27,748)
Financial Statements
Financial Statements
153
153
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 23 Financial instruments and financial risk (continued)
Credit risk (continued)
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
2022
€’000
2021
€’000
(27,748)
(16,010)
-
1,494
1,078
(22,983)
(4,968)
(151)
265
89
(41,186)
(27,748)
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 €47.2
million as at 31 July 2022 (2021: €46.7 million).
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 2022, 100 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
2022
Bank borrowings
Bank overdrafts
Trade and other payables
Contingent consideration
Lease liabilities
Put option liability
Derivative financial liabilities
Currency forward contracts used for
hedging
— Inflows
— Outflows
(132,936)
(145,573)
(1,443)
(1,443)
(2,886)
(139,801)
(16,689)
(16,689)
(16,689)
-
(798,702)
(798,702)
(787,859)
(10,843)
-
-
-
-
(3,081)
(48,556)
(29,695)
(3,081)
(145)
(122)
(787)
(2,027)
(54,641)
(5,232)
(4,793)
(11,938)
(18,575)
(14,103)
(30,663)
-
(30,663)
-
-
-
-
94,867
94,867
94,867
(96,781)
(96,781)
(96,781)
(1,914)
(1,914)
(1,914)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 23 Financial instruments and financial risk (continued)
Liquidity 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
-
-
-
-
-
-
-
-
-
2021
Bank borrowings
Bank overdrafts
Trade and other payables
Contingent consideration
Lease liabilities
Put option liability
Derivative financial liabilities
(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)
(145)
(105)
-
(319)
(106)
-
(21)
(1,339)
(1,695)
(46,136)
(24,138)
(52,179)
(5,230)
(4,918)
(9,275)
(18,459)
(14,297)
(26,921)
-
- (26,921)
-
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)
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
2022
2021
Assets
€’000
Liabilities
€’000
Assets
€’000
Liabilities
€’000
2,048
4,355
6,403
(1,914)
-
(1,914)
224
-
224
(591)
(468)
(1,059)
Cash flow hedges
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.
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:
Financial Statements
Financial Statements
155
155
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 23 Financial instruments and financial risk (continued)
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:
2022
Trade receivables
Cash and cash equivalents
Trade and other payables
2021
Trade receivables
Cash and cash equivalents
Trade and other payables
Ron
€'000
Euro
€'000
Sterling
€'000
US Dollar
€'000
Total
€'000
-
58
-
58
-
80
-
80
3,904
24,375
(31,497)
(3,218)
3,712
15,876
(31,142)
(11,554)
-
3,815
(2,452)
1,363
1,801
7,511
5,705
35,759
(25,698)
(59,647)
(16,386)
(18,183)
-
410
(153)
257
2,418
3,445
(7,201)
(1,338)
6,130
19,811
(38,496)
(12,555)
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 2022 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 2021.
A positive number below indicates an increase in profit where the euro strengthens or weakens 10 per cent against the
relevant currency.
156
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Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 23 Financial instruments and financial risk (continued)
Currency risk (continued)
2022
Dollar
Sterling
Romanian Leu
At 31 July 2022
2021
Dollar
Sterling
Romanian Leu
At 31 July 2021
Interest rate risk
10% strengthening
income statement
€’000
10% weakening
income statement
€’000
1,639
(136)
(6)
1,497
134
(26)
(8)
100
(1,639)
136
6
(1,497)
(134)
26
8
(100)
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.
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
Carrying
amount
2022
€’000
Carrying
amount
2021
€’000
(132,936)
(170,184)
(16,689)
193,059
43,434
(12,882)
168,660
(14,406)
43,434
(14,406)
Cash flow sensitivity analysis for variable rate instruments
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 2021.
Financial Statements
Financial Statements
157
157
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 23 Financial instruments and financial risk (continued)
Interest rate risk (continued)
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.
2022
Unhedged variable rate instruments
Bank overdraft
Cash flow sensitivity (net)
2021
Unhedged variable rate instruments
Bank overdraft
Cash flow sensitivity (net)
Principal
amount
€’000
Income
statement 50
bp increase
€’000
(25,672)
(16,689)
(42,361)
(75,605)
(12,882)
(88,487)
(128)
(83)
(211)
(378)
(64)
(442)
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
Hedge related
Other
Total
Net deferred tax liability
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Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
2022
€’000
2021
€’000
437
284
71
-
112
5,459
6,363
663
183
112
75
130
5,022
6,185
(4,474)
(1,577)
(4,531)
(1,193)
(12,082)
(13,424)
(765)
(1,956)
(20,854)
-
(2,013)
(21,161)
(14,491)
(14,976)
NOTES 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
2022
At 1 August 2021
Recognised in the Consolidated Income Statement
Arising on acquisition (Note 33)
Recognised in Other Comprehensive Income
Foreign exchange and other
(4,348)
351
(54)
-
(139)
130
(24)
-
-
6
75
-
-
(840)
-
(530)
(385)
-
(176)
(49)
(13,312)
3,009 (14,976)
2,081
(251)
-
(529)
259
-
(41)
276
2,282
(305)
(1,057)
(435)
At 31 July 2022
(4,190)
112
(765)
(1,140)
(12,011)
3,503 (14,491)
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
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)
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 relate mainly to losses carried forward.
Financial Statements
Financial Statements
159
159
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 25 Provision for liabilities
The estimate of provisions is a judgement in the preparation of the financial statements.
2022
At beginning of year
Arising on acquisition (Note 33)
Provided in year
Paid in year
Translation adjustment
At end of year
Current
Non-current
2021
At beginning of year
Provided in year
Paid in year
Translation adjustment
At end of year
Current
Non-current
Contingent
acquisition
consideration
€’000
(i)
1,695
1,460
-
(106)
32
3,081
267
2,814
3,404
-
(1,844)
135
1,695
250
1,445
Other
Total
€’000
(ii)
1,764
-
1,045
(278)
-
2,531
1,343
1,188
2,638
146
(1,027)
7
1,764
1,764
-
€’000
3,459
1,460
1,045
(384)
32
5,612
1,610
4,002
6,042
146
(2,871)
142
3,459
2,014
1,445
(i) Contingent acquisition consideration relates to the acquisition of Comfert SRL (‘Comfert’) in December 2015, Vegetable
Consulting Services Limited ('VCS') in March 2019, Envirofield Limited (‘Envirofield’) in February 2022 and George Duncan
Agri Solutions Limited (‘George Duncan’) in July 2022. During the prior financial year, the Romanian subsidiaries, including
Comfert SRL, were legally merged to form Agrii Romania SRL. The amount attributable to Comfert SRL is €0.1 million,
the amount attributable to VCS is €1.5 million, the amount attributable to Envirofield is €0.8 million and the amount
attributable to George Duncan is €0.7 million.
(ii) Other provisions relate to various operating and employment related costs.
160
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Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 26 Put option liability
At 1 August
Change in fair value of put option (i)
Translation adjustment
At 31 July
2022
€’000
24,138
1,982
3,575
29,695
2021
€’000
22,073
1,674
391
24,138
(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.
It is expected the option to acquire the remaining 35 per cent will be exercised during the financial year 2023.
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 2022 was €7,767,000 (2021: surplus of €5,939,000).
At 31 July 2022, the Group’s Irish scheme is in surplus of €3,154,000 and the Group’s UK scheme is in surplus of €4,613,000.
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
2022
€’000
2021
€’000
7,767
5,939
The pension charge included in the Consolidated Income Statement for the year in respect of the Group’s defined benefit
schemes was €497,000 (2021: €535,000) and a charge of €4,666,000 (2021: €4,113,000) 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 2022 by an independent, qualified actuary. The valuations have been performed using
the projected unit method.
Financial Statements
Financial Statements
161
161
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 27 Post employment benefit obligations (continued)
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.
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 2023 are €105,000 and €1,337,000 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 2022
and 31 July 2021 are as follows:
2022
2021
0%-3.25%
0%-2.45%
2.70%
2.40%
1.30%
1.60%
0%-3.55%
0%-3.50%
0%-3.80%
0%-3.80%
3.50%
3.05%
1.60%
2.90%
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
162
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Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 27 Post employment benefit obligations (continued)
Financial assumptions - scheme liabilities (continued)
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:
Male
Female
2022
ROI
23.6
25.5
2022
UK
23.4
25.4
2021
ROI
23.6
25.5
The mortality assumptions imply the following life expectancies in years of an active member, aged 65, retiring now:
Male
Female
2022
ROI
22.3
24.0
2022
UK
22.1
23.9
2021
ROI
22.3
24.0
2021
UK
23.3
25.3
2021
UK
22.0
23.8
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
Impact on plan liabilities
Increase/decrease 0.50%
Decrease by 7.0% / increase by 7.8%
Increase/decrease 0.50%
Increase / decrease by 0.5%
Increase/decrease 0.50%
Decrease / increase by 0.1%
Increase/decrease by one year
Decrease by 2.9% / increase by 2.8%
Change in assumption
Impact on plan liabilities
Increase/decrease 0.50%
Decrease by 6.5% / increase by 7.1%
Increase/decrease 0.50%
Increase by 3.7% / decrease by 3.6%
Increase/decrease 0.50%
Increase / decrease by 0.3%
Increase/decrease by one year
Decrease / increase by 3.3%
Financial Statements
Financial Statements
163
163
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 27 Post employment benefit obligations (continued)
Categories of pension scheme assets
Net pension asset
Market value of scheme assets:
Bonds
Property
Pooled 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
Market value of scheme assets:
Bonds
Property
Pooled investment funds
Insurance policy and insurance annuity
Other
Total market value of assets
Present value of scheme obligations
Surplus in the schemes
2022
ROI
€’000
2022
UK
€’000
2022
Total
€’000
10,254
-
6,432
716
16,686
716
3,322
52,703
56,025
-
36
9,278
816
9,278
852
13,612
69,945
83,557
(10,458)
(65,332)
(75,790)
3,154
4,613
7,767
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)
2,473
3,466
8,798
1,573
102,668
(96,729)
5,939
The majority of pooled investment funds consist of equity securities and bonds, which have quoted prices in active markets.
164
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Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 27 Post employment benefit obligations (continued)
Categories of pension scheme assets (continued)
The major categories of scheme assets are as follows:
2022
ROI
2022
UK
2021
ROI
2021
UK
Split of scheme assets:
Bonds
— Government
— Corporate
Property - Ireland and UK
Other
Pooled investment funds
Insurance policy and insurance annuity
Movement in the fair value of scheme assets
75%
0%
0%
0%
25%
0%
100%
5%
4%
1%
1%
76%
13%
100%
Fair value of assets at 1 August
Interest income
Remeasurements:
- (Loss) / return on plan assets excluding amounts included in interest income
Employer contributions
Employee contributions
Insurance risk premium
Benefit payments
Translation adjustments
Fair value of assets at 31 July
As at 31 July 2022 and 2021 the pension schemes held no shares in Origin Enterprises plc.
74%
0%
0%
3%
23%
0%
100%
2022
€’000
102,668
1,582
(18,667)
1,352
116
(7)
(4,731)
1,244
83,557
0%
0%
1%
1%
88%
10%
100%
2021
€’000
94,559
1,502
3,070
1,333
123
(4)
(2,879)
4,964
102,668
Financial Statements
Financial Statements
165
165
NOTES 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
Interest on scheme obligations
Employee contributions
Insurance risk premium
Benefit payments
Remeasurements:
- Experience (loss) / gain on scheme liabilities
- 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 recognised in the Consolidated Statement of Financial Position:
Net asset in schemes at 1 August
Current service costs
Past service costs
Employer contributions
Other finance income
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
Total recognised in operating profit
Net interest income (included in finance costs Note 4)
Net charge to Consolidated Income Statement
166
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Origin Enterprises plc Annual Report and Accounts 2022
2022
€’000
2021
€’000
(96,729)
(94,156)
(590)
-
(1,489)
(116)
7
4,731
(1,387)
105
20,858
(1,180)
(526)
(17)
(1,494)
(123)
4
2,879
5,826
(2,014)
(2,229)
(4,879)
(75,790)
(96,729)
2022
€’000
2021
€’000
5,939
(590)
-
1,352
93
909
64
7,767
403
(526)
(17)
1,333
8
4,653
85
5,939
2022
€’000
2021
€’000
(590)
-
(590)
93
(497)
(526)
(17)
(543)
8
(535)
NOTES 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)
Allocation of defined benefit obligation by participant:
Active plan participants
Deferred plan participants
Retirees
2022
ROI
€’000
329
346
360
367
367
8,689
10,458
2021
ROI
€’000
338
343
352
365
388
11,676
13,462
2022
ROI
€’000
719
4,749
4,990
10,458
2022
UK
€’000
2,466
2,449
2,570
2,646
2,713
52,488
65,332
2021
UK
€’000
2,795
2,844
2,816
2,946
3,025
68,841
83,267
2022
Total
€’000
2,795
2,795
2,930
3,013
3,080
61,177
75,790
2021
Total
€’000
3,133
3,187
3,168
3,311
3,413
80,517
96,729
2022
ROI
2022
UK
15.0
14.0
2021
ROI
17.0
2022
UK
€’000
16,331
16,549
32,452
65,332
2021
UK
16.0
2022
Total
€’000
17,050
21,298
37,442
75,790
Financial Statements
Financial Statements
167
167
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 27 Post employment benefit obligations (continued)
Average duration and scheme composition (continued)
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
2021
UK
2021
Total
€’000
1,043
6,685
5,734
13,462
€’000
21,935
21,720
39,612
83,267
€’000
22,978
28,405
45,346
96,729
Remeasurement (loss) / gain on scheme assets
Remeasurement (loss) / gain on scheme liabilities:
Effect of experience (loss) / gains on scheme liabilities
Effect of changes in demographical and financial assumptions
Remeasurements
Deferred tax credit
Defined benefit pension credit recognised in the Consolidated Statement of Comprehensive Income
28 Share capital
Authorised
250,000,000 ordinary shares of €0.01 each (i)
Allotted, called up and fully paid
2022
€’000
2021
€’000
(18,667)
3,070
(1,387)
20,963
909
(176)
733
5,826
(4,243)
4,653
(1,112)
3,541
2022
€’000
2021
€’000
2,500
2,500
125,317,865 (2021: 126,396,184) ordinary shares of €0.01 each (i) (iii)
1,253
1,264
Allotted, called up and fully paid issued shares
At 1 August 2021
Share options exercised (ii)
Cancellation of treasury shares (v)
At July 2022
168
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Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
Number of
ordinary shares
Nominal value
of shares
€’000
126,396,184
6,478
(1,084,797)
125,317,865
1,264
-
(11)
1,253
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 28 Share capital (continued)
Treasury shares in issue
At 1 August 2021
LTIP share options exercised (iii)
Share buyback (iv)
Cancellation of treasury shares (v)
Number of
treasury shares
Nominal value
of shares
€’000
Carrying value
of shares
€’000
(800,330)
38,615
(10,086,258)
1,084,797
(9,763,176)
(8)
-
(101)
11
(98)
(8)
-
(39,997)
4,000
(36,005)
(i) Ordinary shareholders are entitled to dividends as declared and each ordinary share carries equal voting rights at meetings
(ii)
of the Company.
In the current financial year, the issued ordinary share capital was increased by the issue of 6,478 ordinary shares of
nominal value €0.01 each, at an issue price of €2.02 each pursuant to the terms of the Origin Save As You Earn Scheme.
(iii) During the current financial year, the Group transferred 38,615 treasury shares to satisfy an exercise of share options
granted under the Company’s Long Term Incentive Plan (2015).
(iv) During the financial year, the Group completed a share buyback programme. The total number of ordinary shares
purchased by the Group was 10,086,258 for a total consideration before expenses of €40 million. The repurchased shares
are held as treasury shares.
(v) On 29 July 2022, the Group cancelled 1,084,797 treasury shares and intends to cancel further tranches of treasury shares
in due course.
29 Dividends
The Board is recommending a final dividend of 12.85 cent per ordinary share (2021: 7.85) which when combined with the
interim dividend of 3.15 cent per ordinary share brings the total dividend for the year to 16.00 cent per share (total dividend of
€18.5 million) (2021: 11.00 cent per share). Subject to shareholders’ approval at the Annual General Meeting on 22 November
2022, the dividend will be paid on 6 February 2023 to shareholders on the register on 13 January 2023. In accordance with
IFRS, this dividend has not been provided for in the Consolidated Statement of Financial Position as at 31 July 2022.
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. The capital redemeption reserve increased by €11,000 during the current year arising from the
cancellation of 1,084,797 treasury shares (Note 28).
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.
Financial Statements
Financial Statements
169
169
NOTES 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 times at 31 July 2022 (2021: 0.13 times), 31 January 2022
0.61 times (2021: 2.76 times); and
— the Group’s interest cover (EBITDA to interest) is above 3.00. The ratio is 13.83 times at 31 July 2022 (2021: 10.36 times),
31 January 2022 11.10 times (2021: 6.75 times).
31 Commitments
Future purchase commitments for property, plant and equipment
At 31 July 2022
Contracted for but not provided for
Land and
buildings
€’000
Plant and
machinery
€’000
Other
Total
€’000
€’000
3,157
1,915
-
5,072
Land and
buildings
€’000
Plant and
machinery
€’000
Other
Total
€’000
€’000
At 31 July 2021
Contracted for but not provided for
-
616
3
619
Future purchase commitments: Software Development
Contracted for but not provided for
Total
Total
2022
€’000
Total
2021
€’000
27
27
33
33
The Group has a financial commitment of €3.2 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.
170
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Origin Enterprises plc Annual Report and Accounts 2022
NOTES 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:
2022
Sale of goods Purchase of
goods
€’000
€’000
Receiving
services from
€’000
Rendering
services to
€’000
Total
€’000
Transactions with joint venture
Transactions with associates
-
(210,975)
116,038
(1,368)
-
(951)
222
520
(210,753)
114,239
2021
Sale of goods Purchase of
goods
€’000
€’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
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
2022
€’000
26,564
3,998
30,562
2021
€’000
22,630
7,383
30,013
2022
€’000
2021
€’000
(11,150)
(4,089)
(15,239)
(9,222)
(3,469)
(12,691)
Other financial assets on the Consolidated Statement of Financial Position primarily comprise of €561,000 (2021: €552,000) 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
Total
2022
€’000
2,122
57
690
2,869
2021
€’000
1,589
85
125
1,799
Financial Statements
Financial Statements
171
171
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 33 Acquisition of subsidiary undertakings
On 9 February 2022, the Group acquired 100% of the share capital of Envirofield Limited (‘Envirofield’) in the UK, an expert
independent field-trials company specialising in agricultural and environmental research. Envirofield is expected to enhance
the Groups near market R&D capabilities.
On 4 July 2022, the Group acquired 100% of the share capital of George Duncan Agri Solutions Limited (‘George Duncan’) in
the UK, specialising in agricultural grass seed mixtures and provider of agricultural GPS services.
Details of the net assets acquired and goodwill arising from the business combinations are as follows:
Assets
Non-current
Property, plant & equipment
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
Net cash outflow
Contingent consideration arising from acquisition
Total consideration related to acquisitions
Fair
value
€’000
874
1,006
1,880
86
980
40
1,106
(1,004)
(68)
(305)
(1,377)
1,609
1,308
2,917
2,194
(737)
1,457
1,460
2,917
(i) Trade receivables acquired were €1.0 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.
172
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Origin Enterprises plc Annual Report and Accounts 2022
NOTES 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 €0.8 million and €0.1 million
respectively. If the acquisition had occurred on 1 August 2021, management estimates that the total consolidated revenue
would have been €2,346.1 million and the consolidated net profit (excluding exceptional items) would have been €77.6 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 2021.
For the acquisition completed in 2021, there have been no material revisions of the provisional fair value adjustments since the
initial values were established.
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
Rebates receivable: 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.
Settlement price adjustments: The Group acknowledges the level of judgement required in estimating settlement price
adjustments payable to certain customers given 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.
Trade receivables: The Group has assessed the recoverability of trade receivable balances in all business units and in
particular Ukraine given the current and potential future consequences of the Russian invasion. Appropriate provisions are in
place and the group will continue to assess the recoverability of such balances as a result of the ongoing war in Ukraine.
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.
Financial Statements
Financial Statements
173
173
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 35 Principal subsidiaries and associated undertakings
Name of undertaking
Nature of business
Agrii Polska sp.Z.O.O
Agrii Romania S.R.L.
Specialist agronomy products
and services
Specialist agronomy products
and services
Agrii Ukraine LLC
(formerly Agroscope International LLC)
BHH Limited (i)
Specialist agronomy products
and services
Provender milling
FortGreen Comercial Agrícola Ltda
Goulding Soil Nutrition Limited
(formerly 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
% of
ordinary
shares
100
100
100
50
65
100
100
100
Line Mark (UK) Limited
Sports and amenity provider
100
Masstock Arable Limited
Origin Amenity Services Limited
(formerly Rigby Taylor Limited)
Origin Enterprises Digital Limited
(formerly Agspace Agriculture Limited)
Origin Northern Ireland Limited
Origin Riverwalk Property Trading Limited
Origin Secretarial Limited
Origin Treasury Limited
Origin UK Operations Limited
R&H Hall Limited
Specialist agronomy products
and services
Turf management services
Digital agricultural services
group
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
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
100
50
100
100
50
Registered office
Obornicka street 233, 60-650
Poznan, Poland
3 Calea Lugojului St., Ghiroda
Village, Ghiroda Commune, Timis,
Romania
25B Sahaydachnoho Street, Kyiv
04070, Ukraine
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
Andoversford, Cheltenham,
Gloucestershire, GL54 4LZ, UK
Orchard Road, Royston,
Hertfordshire, SG8 5HW, UK
Unit 5, Dorcan Business Village,
Murdock Road, Swindon, SN3 5HY, 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.
A 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.
174
174
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) 36 Subsequent events
There have been no material events subsequent to 31 July 2022 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 26 September 2022.
Financial Statements
Financial Statements
175
175
NOTES TO THE GROUP FINANCIAL STATEMENTS (continued) COMPANY BALANCE SHEET
As at 31 July 2022
Fixed assets
Tangible assets
Intangible assets
Post employment benefit surplus
Financial assets
Current assets
Debtors
Cash at bank and in hand
Current liabilities
Derivative financial instruments
Creditors (amounts falling due within one year)
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
Notes
2022
€’000
2021
€’000
1
2
7
3
441
5,744
3,154
120,406
129,745
898
5,451
2,473
151,500
160,322
4
315,787
74,001
389,788
251,053
82,314
333,367
(612)
-
5
(258,709)
(188,971)
(259,321)
(188,971)
130,467
144,396
260,212
304,718
8
1,253
164,873
94,086
1,264
164,850
138,604
260,212
304,718
The profit for the year attributable to shareholders dealt with in the financial statements of the holding company for the year
ended 31 July 2022 was €6,809,000 (2021: €21,427,000). 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
26 September 2022
Sean Coyle
Director
26 September 2022
176
Origin Enterprises plc Annual Report and Accounts 2022
COMPANY STATEMENT OF CHANGES IN EQUITY
As at 31 July 2022
2022
At 1 August 2021
Profit for the year
Fair value changes of cash flow hedges
Deferred tax effect of cash flow hedges
Remeasurement gain on post
employment benefit asset
Deferred tax on remeasurement
Total comprehensive income for the year
Share-based payment charge
Shares issued
Share buyback (Note 8)
Cancellation of treasury shares
Transfer of share based payment reserve
to retained earnings
Dividend paid to shareholders
Share
capital
Treasury
shares
Share
premium
Capital
redemption
reserve
LTIP
reserve
Profit
and loss
€’000
€’000
€’000
€’000 €’000
€’000
Cashflow
hedge
reserve
€’000
Total
€’000
1,264
(8) 164,850
134
2,147 136,331
- 304,718
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- (39,997)
(11)
4,000
-
-
-
-
-
-
-
-
-
-
-
23
-
-
-
-
-
-
-
-
-
-
-
-
-
11
-
-
-
-
-
-
-
-
6,809
-
-
409
(51)
-
(612)
77
-
-
7,167
(535)
2,285
-
-
-
-
-
-
(4,000)
(238)
238
6,809
(612)
77
409
(51)
6,632
2,285
23
-
-
- (39,997)
-
-
-
-
- (13,449)
- (13,449)
At 31 July 2022
1,253 (36,005) 164,873
145
4,194 126,287
(535) 260,212
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
407
(51)
21,783
1,016
-
-
(3,981)
-
-
-
-
-
-
21,427
407
(51)
21,783
1,016
(3,981)
At 31 July 2021
1,264
(8) 164,850
134
2,147 136,331
- 304,718
Financial Statements
177
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.
178
Origin Enterprises plc Annual Report and Accounts 2022
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.
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.
Financial instruments
The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.
(i) 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 a 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.
(ii) 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.
(iii) Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-
measured at 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. For derivatives that do not qualify for hedge accounting,
changes in their fair value are recognised in profit or loss in finance costs or income as appropriate. Financial liabilities are
derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
Financial Statements
Financial Statements
179
179
COMPANY ACCOUNTING POLICIES (continued) The effective portion of changes in the fair values of derivatives that are designated and qualify as cash flow hedges is
recognised in other comprehensive income and presented in the cash flow hedge reserve. The gain or loss relating to the
ineffective portion is recognised immediately in the profit and loss account. Amounts accumulated in equity are reclassified
to the profit and loss account in the period when the hedged item affects profit or loss. When a hedging instrument expires
or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in other
comprehensive income at that time is recognised in the profit and loss account when the forecast transaction to which it
relates occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in
other comprehensive income is immediately reclassified to the profit and loss account.
In accordance with FRS 102 Sections 11.41 to 11.48A and 12.26 to 12.29A, the Company has applied the exemption from financial
instruments disclosure.
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;
— its intentions to complete the development;
— its ability to use or sell the intangible asset;
— its ability to generate future economic benefits;
— the availability of resources to complete the development; and
— its 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
Developed technology
Computer software
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.
180
180
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
COMPANY ACCOUNTING POLICIES (continued) NOTES TO THE COMPANY FINANCIAL STATEMENTS
1 Tangible fixed assets
Cost
At 1 August 2021
Additions
At 31 July 2022
Accumulated depreciation
At 1 August 2021
Depreciation charge for year
At 31 July 2022
Net book amounts
At 31 July 2022
At 31 July 2021
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
Fixtures &
fittings
€’000
Total
€’000
1,474
12
1,486
1,474
12
1,486
576
469
576
469
1,045
1,045
441
898
441
898
1,392
1,392
112
(30)
112
(30)
1,474
1,474
506
70
576
898
886
506
70
576
898
886
Financial Statements
181
2
Intangible assets
Cost
At 1 August 2021
Additions
At 31 July 2022
Amortisation
At 1 August 2021
Charge for year
At 31 July 2022
Net book amounts
At 31 July 2022
At 31 July 2021
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
Developed
Technology
€’000
Brand
Software
Total
€’000
€’000
€’000
4,917
2,132
7,049
364
1,784
2,148
4,901
4,553
2,232
-
2,232
1,338
52
1,390
842
894
383
-
383
379
3
382
1
4
7,532
2,132
9,664
2,081
1,839
3,920
5,744
5,451
Developed
Technology
€’000
Brand
Software
Total
€’000
€’000
€’000
3,164
1,753
4,917
222
142
364
2,232
-
2,232
1,276
62
1,338
4,553
2,942
894
956
383
-
383
242
137
379
4
141
5,779
1,753
7,532
1,740
341
2,081
5,451
4,039
182
182
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE COMPANY FINANCIAL STATEMENTS (continued) 3 Financial assets
Investment in subsidiaries
At 1 August
Impairment
Additions
At 31 July
2022
€’000
2021
€’000
151,500
(31,094)
-
120,406
33,107
-
118,393
151,500
During the prior 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 Soil Nutrition Limited (a)
Torrox Limited (b)
2022
€’000
2021
€’000
120,406
-
-
-
120,406
31,094
-
-
120,406
151,500
(a) The Company holds one ‘A’ share in Goulding Soil Nutrition Limited, which has a carrying value of €20.
(b) The Company holds 100 ordinary shares of €0.02 each in Torrox Limited.
During the year the Company assessed the carrying value of its investment in Origin Holdings Ukraine BV for any impairment. In
light of the ongoing conflict in Ukraine it was deemed appropriate to write down the full value of the investment resulting in an
impairment of €31,094,000 in the Company accounts.
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
Amounts owed by subsidiary undertakings are unsecured and are repayable on demand.
2022
€’000
2021
€’000
313,216
250,051
1,574
997
548
454
315,787
251,053
Financial Statements
Financial Statements
183
183
NOTES TO THE COMPANY FINANCIAL STATEMENTS (continued) 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.
6 Deferred tax
At 1 August
Charge for the year
At 31 July
2022
€’000
2021
€’000
245,706
180,014
1,918
9,745
843
497
1,603
6,143
843
368
258,709
188,971
2022
€’000
2021
€’000
368
129
497
283
85
368
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 2022 was €3,154,000 (2021: surplus of
€2,473,000). There was a charge in the profit and loss account for the period in respect of the Company’s defined benefit
scheme of €15,000 (2021: charge of €23,000).
The expected employer contributions from the Company for the year ending 31 July 2022 are €287,000. 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 2022 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
Total
2022
€’000
3,154
3,154
2021
€’000
2,473
2,473
184
184
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE COMPANY FINANCIAL STATEMENTS (continued) 7 Post employment benefit asset (continued)
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:
Bonds
Pooled investment funds
Other
Total market value of assets
Present value of scheme liabilities
Surplus in the scheme
Movement in value of scheme assets
Value of assets at 1 August
Interest income
Remeasurement (loss) / gain
Employer contributions
Benefit payment
Employee contributions
At 31 July
2022
%
2021
%
0%-3.25% 0% - 2.45%
2.70%
2.40%
1.30%
1.60%
2022
€’000
2021
€’000
10,254
3,322
36
13,612
(10,458)
3,154
11,762
3,672
501
15,935
(13,462)
2,473
2022
€’000
2021
€’000
15,935
207
(1,956)
287
(871)
10
15,317
214
471
280
(357)
10
13,612
15,935
Financial Statements
Financial Statements
185
185
NOTES TO THE COMPANY FINANCIAL STATEMENTS (continued) 7 Post employment benefit asset (continued)
Movement in the present value of scheme obligations
Value of scheme obligations at 1 August
Current service costs
Interest on scheme obligations
Remeasurement gain / (loss)
Benefit payment
Employee contributions
2022
€’000
2021
€’000
(13,462)
(13,508)
(49)
(173)
2,365
871
(10)
(50)
(187)
(64)
357
(10)
Value of scheme obligations at 31 July
(10,458)
(13,462)
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
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
186
186
Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
2022
€’000
2021
€’000
2,473
1,809
(49)
287
34
409
(50)
280
27
407
3,154
2,473
2022
€’000
2021
€’000
(49)
(49)
207
(173)
34
(15)
(50)
(50)
214
(187)
27
(23)
2022
€’000
2021
€’000
(10,458)
(13,462)
13,612
3,154
15,935
2,473
NOTES TO THE COMPANY FINANCIAL STATEMENTS (continued) 7 Post employment benefit asset (continued)
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
2022
€’000
(1,956)
2,444
(79)
409
(51)
358
2021
€’000
471
(108)
44
407
(51)
356
2022
€’000
2021
€’000
2,500
2,500
125,317,865 (2021: 126,396,184) ordinary shares of €0.01 each (i) (iii)
1,253
1,264
Issued ordinary shares
Ordinary
shares
€’000
Number of
ordinary
shares
Treasury shares in issue
Treasury
shares
€’000
Number of
treasury
shares
Allotted, called up and fully paid
At 1 August 2021
Share options exercised (ii)
LTIP share options exercised (iii)
Share buyback (iv)
Cancellation of treasury shares (v)
126,396,184
1,264
(800,330)
6,478
-
-
-
-
-
-
38,615
(10,086,258)
(39,997)
(1,084,797)
(11)
1,084,797
4,000
125,317,865
1,253
(9,763,176)
(36,005)
(8)
-
-
(i) Ordinary shareholders are entitled to dividends as declared and each ordinary share carries equal voting rights at meetings
(ii)
of the Company.
In the current financial year, the issued ordinary share capital was increased by the issue of 6,478 ordinary shares of
nominal value €0.01 each, at an issue price of €2.02 each pursuant to the terms of the Origin Save As You Earn Scheme.
(iii) During the current financial year, the Company transferred 38,615 treasury shares to satisfy an exercise of share options
granted under the Company’s Long Term Incentive Plan (2015).
(iv) During the financial year, the Company completed a share buyback programme. The total number of ordinary shares
purchased by the Company was 10,086,258 for a total consideration before expenses of €40 million. The repurchased
shares are held as treasury shares.
(v) On 29 July 2022, the Company cancelled 1,084,797 treasury shares and intends to cancel further tranches of treasury
shares in due course.
Financial Statements
Financial Statements
187
187
NOTES 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 €400 million.
Pursuant to the provisions of Section 357 of the Companies Act 2014, such subsidiaries have been exempted from the filing
provisions of Section 304 of the Companies Act 2014.
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
2022
€’000
2021
€’000
27
-
26
-
6,809
21,427
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
188
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Origin Enterprises plc Annual Report and Accounts 2022
Origin Enterprises plc Annual Report and Accounts 2022
2022
Number
2021
Number
23
21
2022
€’000
2021
€’000
10,072
436
1,045
15
2,285
13,853
7,640
362
146
23
1,016
9,187
NOTES 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 is required to pay under existing lease agreements.
Within one year
In two to five years
After more than five years
2022
€’000
2021
€’000
178
578
-
756
185
45
-
230
14 Related party transactions
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:
Transactions with joint venture
Transactions with associate
2022
Sale of goods Purchase of
goods
Rendering
services to
€’000
€’000
€’000
Rendering
services
from
€’000
222
396
-
-
-
-
-
-
2021
Sale of goods Purchase of
goods
Rendering
services to
€’000
€’000
€’000
Rendering
services
from
€’000
Transactions with joint venture
Transactions with associate
-
-
-
-
169
295
-
-
Total
€’000
222
396
Total
€’000
169
295
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.
Financial Statements
Financial Statements
189
189
NOTES TO THE COMPANY FINANCIAL STATEMENTS (continued) 14 Related party transactions (continued)
Salaries and other short term employee benefits
Post employment benefits
Share-based payment charge
2022
€’000
2021
€’000
2,122
1,160
57
690
46
82
2,869
1,288
15 Accounting judgements and estimates
Estimates and judgements made in the process of preparing the Company financial statements are continually evaluated
and are based on historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances.
The Directors make estimates and assumptions concerning the future in the process of preparing the Company financial
statements. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are addressed below.
(i)
Impairment of financial assets
Annually, the Company considers whether financial assets are impaired. Where an indication of impairment is identified the
estimation of recoverable value requires estimation of the recoverable value of the cash generating units (CGUs). This requires
estimation of the future cash flows from the CGUs and also selection of appropriate discount rates in order to calculate the
net present value of those cash flows. See Note 3 for the carrying amount of financial assets.
(ii)
Impairment of debtors
Management make an assessment at the end of each financial year of whether there is objective evidence that a debtor or
amounts owed from subsidiary undertakings is impaired. When assessing impairment, the Directors consider factors including
the current credit rating of the debtor, the age profile of outstanding amounts, recent correspondence and activity, and
historical experience of cash collections. See Note 4 for the net carrying amount of debtors.
(iii) Post employment benefit asset
The post employment benefit asset is assessed by selecting key assumptions. The selection of mortality rates and inflation are
key sources of estimation uncertainty which could lead to a material adjustment in the defined benefit obligation within the
next financial year. These assumptions are set with close reference to market conditions.
The Company's defined benefit obligation is discounted at a rate set by reference to market yields at the end of the reporting
period on high quality corporate bonds. The assumptions selected are disclosed in Note 7.
16 Approval of financial statements
These financial statements were approved by the Board on 26 September 2022.
190
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Origin Enterprises plc Annual Report and Accounts 2022
NOTES TO THE COMPANY FINANCIAL STATEMENTS (continued) Financial Statements
191
192
Origin Enterprises plc Annual Report and Accounts 2022
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The paper and board used to produce this Annual Report
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2
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2
2
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