LEADING ANIMAL NUTRITION
ANNUAL REPORT
2022
Contents
About the Company
01
Highlights
02
Locations and Sectors
04
Chair and Managing Director’s Joint Review
05
Five Year Summary
10
Sustainability Review
12
Board of Directors
18
Financial Report
20
Independent Auditor’s Report
81
Shareholder Information
86
Glossary
88
Corporate Directory
89
ABN 33 006 708 765
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ABOUT THE COMPANY
Ridley Corporation Limited (Ridley) is
Australia’s leading provider of premium
quality, high-performance animal
nutrition solutions.
We believe smart animal nutrition is
pivotal to solving the food production
challenges of today and tomorrow.
Our business
As one of the largest domestic consumers of Australian-
grown cereal grains and a significant employer in farming
communities, Ridley is part of the economic and social
fabric of rural Australia. Our operations supply a diverse
range of customers, from commercial farms to backyard
enthusiasts, in the dairy, poultry, pig, aquaculture, sheep
and beef industries, and to the equine, canine and home
layer markets in the retail sector.
Offering scale and operational capacity, Ridley’s extensive
product range supports the agriculture and aquaculture
industries, delivering commercial stockfeeds direct to farm
gate, packaged feeds for stock and companion animals and
ingredients, including raw materials, additives, supplements
and animal meals, delivered in packaged form ranging from
one-tonne bulka bags to 3kg feed bags. Ridley’s scale
ensures dedicated facilities for some species whilst providing
regional relevance for our commercial stockfeeds which are
manufactured from Ridley facilities located in South Australia,
Victoria, New South Wales and Queensland, consisting of
an extrusion plant , supplements plant and 13 feed mills.
Ridley operates two ingredient recovery plants in Victoria
and New South Wales, where we produce animal meals
(including meat and bone meal, poultry meal, hydrolysed
feather meal, blood meal, fish meal), our specialised
ingredient Chicken Protein Concentrate (CPC) and animal
fats, all of which are valuable sources of protein for animal
feed produced from otherwise surplus co-products.
Ridley’s ingredient recovery plants are the source of most
of Ridley’s own animal feed requirements and also supply
the stockfeed, pet food and biofuel industries, both
domestically and overseas.
With major brands including Barastoc, Rumevite, Cobber,
Primo, Propel and Food for Dogs, and with a product range
to accommodate starter feed solutions, Ridley has developed
a portfolio that provides a first-class lifecycle solution.
Our products are backed by sustained investment in a
dedicated team of nutritionists, our network of optimised
manufacturing facilities operated in line with strict quality
standards, and research and development that keeps us
at the forefront of advances in animal nutrition and science.
Ridley Corporation Limited
01
Annual Report 2022
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HIGHLIGHTS
Delivered earnings growth
• 16% YOY EBITDA growth from ongoing operations
• Both reporting sectors grew organically
Strengthened the balance sheet
• Net debt reduction of $60.2m
• Disciplined capital management
• Funded proactive inventory hold
Created shareholder value
• Total Shareholder Return (TSR) of 62%
• Increased dividends paid/determined (interim 3.4cps + final 4.0cps fully
franked)
• Announced on-market share buy-back (up to $20m commencing 1H FY23)
02
Ridley Corporation Limited Annual Report 2022 NPAT
EBITDA (Underlying)
$42.4m
$80.1m
+70% YOY growth
+16% YOY growth
Operating Cash Flow
ROFE (Underlying)
$46.8m
10.9%
PCP $82.4m
PCP 6.8%
Leverage
Dividend (100% franked)
0.29x
7.4cps
PCP 1.20x
PCP 2.0 cps
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03
Ridley Corporation Limited Annual Report 2022
LOCATIONS AND SECTORS
Thailand
Queensland
South
Australia
New South Wales
Victoria
Business Unit
Products
Bulk Stockfeeds
Monogastric
Pellet, meals, concentrates and premixes for poultry and pigs.
Ruminant
Pellet, meals, concentrates and premixes for dairy cattle,
beef cattle and sheep.
Packaged Feeds and Ingredients
Ingredient
Recovery
NovaqPro™
Packaged
Products
Rendered poultry, red meat and fish products for the pet food,
stockfeed and aquaculture sectors.
Novel value-adding feed ingredient being commercialised
for sale into prawn feed globally.
Bagged poultry, dairy, dog, horse and lifestyle animal feed.
Supplements
Block and loose lick supplements.
Aquafeed
Extruded and steam pelleted products for all major fin fish
and prawns.
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Ridley Corporation Limited Annual Report 2022 I
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Ridley Corporation Limited
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Annual Report 2022
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CHAIR AND MANAGING DIRECTOR’S JOINT REVIEW
Mick McMahon
Quinton Hildebrand
Chair and Independent
Non-Executive Director
Chief Executive Officer
and Managing Director
Continued momentum in the
business as Ridley delivers
its third successive year
of earnings growth and
we build the platform for
future growth.
We are pleased to provide the Annual
Report for FY22 following another strong
financial performance by the Ridley
business. In FY22, earnings grew to
$80.1m, up 16% on the prior year, based
on our key financial metric of EBITDA
from ongoing operations. This pleasing
outcome is the result of dedicated
execution against the FY20-FY22
Growth Plan, which has seen EBITDA
from ongoing operations lift from $48.1m
over the three-year period.
Ridley’s balance sheet strengthened in
FY22, with a reduction in net debt of
$60.2m, achieved with the sale of the
Westbury extrusion plant and surplus
land parcels as well as solid operational
earnings. The net debt reduction was
delivered despite an increase in working
capital as strategic commodity positions
were taken to off-set the impacts of
rising raw material prices and persistent
delays in the supply chain.
The key financial indicators are
summarised in the table below.
Strong operational
performance
In a year that saw COVID-19 continue
to challenge operations, along with
extreme volatility in commodity markets
(including as a result of the Ukraine
conflict), Ridley continued to meet
the needs of its customers, increased
market share and handled greater
volume through its operations.
Ridley operations demonstrated
resilience in managing higher
absenteeism due to COVID-19 infections
and ‘close contact’ restrictions, while
maintaining the focus on safety. In FY22,
Ridley recorded a Lost Time Injury
Frequency Rate (LTIFR) of 3.23 and
Total Recordable Frequency Rate (TRFR)
of 5.65. Our number one priority remains
the safety of our employees, suppliers
and customers and continually
embedding a safety culture.
Both reporting segments grew in
FY22 demonstrating the strength
of our portfolio.
The Packaged Feeds and Ingredients
segment performed strongly, delivering
an EBITDA of $58.0m (FY21: $46.5m).
The main contributor to this segment
was the Ingredient Recovery business,
which is benefiting from the ongoing
capital investment in product
premiumisation and higher market
prices for tallows and oils.
SUMMARY ($ million unless otherwise stated)
Total comprehensive income – Net Profit After Tax (NPAT)
Comprehensive income (NPAT) – ongoing operations
EBITDA – ongoing operations
Consolidated cash inflow
Net debt
Leverage ratio (times)
Earnings Per Share – ongoing operations (cents)
2022
42.4
36.2
80.1
60.2
22.9
0.29
11.3
2021
24.9
24.9
69.1
64.1
83.1
1.20
7.8
06
11.0
11.3
17.5
Movement
▲
▲
▲
▼
▼
▼
▲
60.2
0.91
3.9
3.5
Ridley Corporation Limited Annual Report 2022 I
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Ridley Corporation Limited
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Annual Report 2022
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CHAIR AND MANAGING DIRECTOR’S REVIEW CONTINUED
Volumes in the branded Packaged
Products business grew strongly year
on year, with expanded market share
and increased product lines into the
urban pet specialty chains. Aquafeed
volumes reduced following the sale
of the Westbury facility in August 2021.
Sales to salmon customers were curtailed
while production was allocated to
maintaining our supply to the growing
barramundi and prawn customers.
The NovaqPro™ operations in Thailand
broke even; however, prior to the closure
of the Yamba site in May 2022, this
operation contributed a small loss that is
carried in this reporting segment.
The Bulk Stockfeeds segment contributed
an EBITDA of $34.4m (FY21: $32.5m),
with the stronger performance driven by
increasing throughput and efficiencies.
The business gained market share over
FY22, led by increased sales volumes
in both the poultry and dairy sectors.
Corporate cost of $12.2m (2021: $9.9m)
increased due to additional accruals for
employee incentives linked to Ridley’s
improved operating results. The 38%
reduction in net finance costs to $2.8m
reflects the continuation of debt
retirement and lower interest rates.
Sustainability Pathway
In May 2022, Ridley announced its
Sustainability Pathway, which is designed
to embed animal nutrition as a key
contributor to more sustainable and
profitable farming. We are working with
our customers and suppliers to deliver
real value in sustainable ways with a
focus on:
• smarter ingredients – sourcing
high-quality raw materials that are
produced with respect to social
and environmental boundaries;
• optimised production – refining
our manufacturing and supply chain
processes to reduce our footprint;
• effective solutions – developing
technical solutions that enable our
customers to produce more from
less; and
• meaningful partnerships – creating
safe, healthy, and diverse workplaces
that support vibrant local communities.
Ridley Sustainability Pathway
Ridley’s primary objective is to deliver satisfactory returns to our shareholders.
We believe this is only achievable over the long run when we focus on:
SMARTER
INGREDIENTS
Sourcing high-quality raw
materials that are produced
with respect to social and
environmental boundaries
OPTIMISED
PRODUCTION
Optimising our
manufacturing and
supply chain processes
to reduce our footprint
EFFECTIVE
SOLUTIONS
Developing technical
solutions that enable
farmers to produce
more from less
MEANINGFUL
PARTNERSHIPS
Creating safe, healthy,
and diverse workplaces
that support vibrant
local communities
• Measure and reduce the
environmental footprint
of our raw materials
• Measure and reduce
• Create high-performance,
• Support customers to meet
circular ingredients
their sustainability goals
green house gas intensity
of our operations
• Source from well-managed
• Respect our local
production systems
environment
• Produce quality, safe feeds
that support good animal
health and welfare
• Ensure safe and healthy
employees
• Create diverse workplaces
• Provide training and
development opportunities
• Support vibrant local
communities
• Utilise high-performance
• Reduce waste to landfill
• Help farmers to address
circular ingredients
• Support Australian growers
climate challenges
• Reduce reliance on finite
marine resources
Ridley’s Sustainability Pathway aims to align with the United Nations Sustainable Development Goals refer to:
https://www.un.org/sustainabledevelopment
08
Ridley Corporation Limited Annual Report 2022 Disciplined capital
management
At the start of FY22, the Ridley Board
announced a Capital Allocation Framework
to ensure future capital discipline
and maximise shareholder returns.
This framework prioritises maintenance,
ESG and working capital requirements
to sustain the future earnings of the
Company and supports a conservatively
geared balance sheet. Thereafter,
surplus cash flows are available to
pay dividends and fund organic and
inorganic growth opportunities.
On the back of the strengthened balance
sheet, and reflecting confidence in the
sustained performance of Ridley, the
Board increased the dividend pay-out
ratio guideline to between 50-70%,
determining dividends for FY22 close
to the upper end of this range. With the
FY22 results, the Board also announced
the intention to undertake an on-market
share buy-back of up to $20.0m
commencing mid October 2022.
Building Capability
While delivering growth in the year, we
have also been developing our capability
for future growth.
In July 2022, Project Boost was
announced with the allocation of $15.0m
in additional capital expenditure to profit
improvement projects with less than a
three-year pay-back. During the year,
two-thirds of this capital has been
committed with returns anticipated
to commence in FY23. Furthermore,
multiple debottlenecking projects have
been initiated to increase capacity in FY23
and FY24 to meet the growing demand
of our customers. Ridley successfully
completed its ERP Upgrade with the D365
Platform going live in November 2021.
In the course of FY22, Ridley identified
and recruited specialised capability into
the business, which will differentiate
our future performance from that of our
competitors. We also deployed Near
Infrared Reflectance Spectroscopy
(NIRS) technology more extensively
within our business to improve the
precision and quality of our feed.
In response to the tightening insurance
market, Ridley proactively established
a Protective Cell Captive in Guernsey.
The Protective Cell Captive will enable
us to access the reinsurance market
directly and with effect from FY23,
we can more actively manage our risk
and reduce insurance premiums.
Looking forward
Future demand for Ridley’s products is
positive with Australian farm gate output
forecast to continue increasing. As the
market leader in the animal nutrition
sector, Ridley enjoys scale benefits and
has the capacity to employ specialists
and adopt technology that should allow
us to continue differentiating our offering
and margins.
As expectations rise in regard to
sustainability, Ridley is well positioned
to partner with our customers to deliver
profitable solutions and, through our
Sustainability Pathway, provide sector
leadership.
Building on three years of successive
earnings growth, the Board approved
the FY23 – FY25 Growth Plan, which
was disclosed to the market at the
end of May. This Plan supports the
ongoing earnings momentum of the
business, embeds the Sustainability
Pathway within our work streams and
operates within the Capital Allocation
Framework with the aim of delivering
Total Shareholder Returns over 15%
per annum.
With a well-defined Growth Plan,
strong balance sheet and disciplined
approach to capital allocation, Ridley
has a platform to execute on growth
opportunities that create shareholder
value. While not immune to weather,
disease and market cycles, the
combination of Ridley’s geographical
spread, multi-species offering, customer
mix and disciplined risk management
should provide earnings resilience.
So, as a short-term outlook, Ridley
expects to grow earnings and cash flow
in the year ahead by increasing sales as
we support the growth of our existing
customers and win market share;
implementing cost savings and efficiency
initiatives; and executing on the Growth
Plans in place for each Business Unit.
With the cash generated from operations
and a strong balance sheet, we expect
to support ongoing investment in the
business and the payment of dividends,
leaving capacity to undertake the
announced on-market share buy-back
and pursue growth opportunities.
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Board succession
Ridley recently announced the
appointment of Julie Raffe to the Board
effective 1 September 2022. Julie will be
an independent Non-Executive Director
and will stand for election at Ridley’s
AGM in November 2022. Julie joins
the Remuneration and Nomination
Committee with the intent that Julie
will assume the position of Chair of
that Committee following the Ridley
AGM. David Lord has advised of his
intention to retire from the Ridley Board
after the next AGM due to increased
commitments elsewhere. Appointed to
the Board in 2016, David has provided an
invaluable contribution to Ridley during a
period of change and significant growth.
Further Board renewal is expected in the
next few years.
Acknowledgements
On behalf of the Board, we would like
to acknowledge our employees who
have delivered a strong performance
in a challenging operational environment.
We would also like to thank our customers
and suppliers for the collaboration that
has strengthened our supply chain and
provided resilience through the past year.
We would also like to recognise the
contribution of the Directors and
Executives that has collectively led
to a successful FY22.
And finally to our shareholders,
thank you for your ongoing support
as we continue on the journey to take
Ridley to its full potential.
Mick McMahon
Chair and Independent
Non-Executive Director
Quinton Hildebrand
Chief Executive Officer
and Managing Director
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Ridley Corporation Limited Annual Report 2022
FIVE YEAR SUMMARY
A$’000 unless otherwise stated
Operating results
Revenue
Other income
EBITDA
Depreciation and amortisation (DA)
Earnings before interest and tax (EBIT)
Net finance cost
Operating (loss)/profit before tax
Tax benefit/(expense)
Net (loss)/profit after income tax attributable to members
Other comprehensive income/(loss) (net of tax)
Total comprehensive income /(loss)
Net (profit)/loss on significant items (net of tax)
Profit attributable to members before significant items
Financial position
Ridley shareholders’ funds
Intangible assets
Total assets
Total liabilities
Net debt
Market capitalisation
Enterprise value (market capitalisation plus net debt)
Development capital expenditure
Operating cash flow (statutory)
Closing share price (cents)
Weighted average number of shares on issue – non-diluted
(thousands)
Number of employees (number)
Key profitability ratios
Sales tonnes (millions)
EBITDA/tonne ($)
EBITDA: shareholders’ funds (%)
Return on shareholders’ funds (%)
Earnings per share (EPS) (cents)
Total Shareholder Returns (%)
EPS growth (%)
EBITDA growth (%)
Operating cash flow/EBITDA (times)
Operating cash flow per share (cents)
Market capitalisation/operating cash flow (times)
EBITDA per employee (A$’000)
Capital market and structure ratios
Gearing: Debt/Debt plus equity (being enterprise value) (%)
Interest cover: EBITDA/net interest (times)
Market capitalisation/EBITDA (times)
EBITDA per share (cents)
Enterprise value/EBITDA (times)
Price/Earnings (P/E) ratio (share price/EPS) (times)
Net debt/shareholders’ equity (%)
Equity/Total assets (%)
Net debt/EBITDA (times)
Net tangible asset (NTA) backing per share (cents)
Dividends per share (cents)
Dividend payout ratio (%)
Percentage franked (%)
2022
Actual
2021
Actual
2020
Actual
2019
Actual
2018
Actual
927,719
4,917
69,178
29,629
39,549
4,509
35,040
(10,144)
24,896
–
24,896
(28)
24,868
287,545
75,892
613,061
325,516
83,096
363,557
446,653
10,423
85,778
114.00
967,942
1,082
15,084
26,159
(11,075)
5,828
(16,903)
6,041
(10,862)
114
(10,748)
32,808
22,060
259,537
75,001
644,618
385,081
147,182
226,407
373,589
42,900
22,367
72.50
1,002,583
7,300
54,315
18,903
35,412
5,073
30,339
(6,774)
23,565
(403)
23,162
(3,641)
19,521
277,499
85,670
573,754
296,255
101,443
366,875
468,318
60,000
36,824
119.00
917,660
6,248
43,629
17,262
26,367
4,648
21,719
(4,310)
17,409
520
17,929
–
17,929
263,107
82,485
510,319
247,212
52,781
423,248
476,029
21,100
50,900
137.50
318,910
612
312,285
622
308,298
697
307,817
710
1.75
39.53
24
8.6
7.8
60.0
324.4
358.6
1.2
26.9
4.2
113.0
19%
15.3
5.3
21.7
6.5
14.6
28.9
46.9
1.2
66.4
2.00
25.6
100
1.80
8.38
6
(4.2)
(3.5)
(37.8)
(145.8)
(72.2)
1.5
7.2
10.1
24.3
39%
2.6
15.0
4.8
24.8
(20.8)
56.7
40.3
9.8
59.1
1.50
(43.6)
100
1.89
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55.7
100
10
Ridley Corporation Limited Annual Report 2022 ’
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11
Ridley Corporation Limited Annual Report 2022
SUSTAINABILITY REVIEW
In May of this year, Ridley announced
the release of its Sustainability Pathway,
which charts our intended path to
embedding animal nutrition as a key
contributor to more sustainable and
profitable farming. At Ridley, we believe
we can solve for the food production
challenges of today and tomorrow
through smart animal nutrition. We also
believe that we can build on the good
work already done by our teams to make
our business more sustainable.
Our approach to sustainability moves
beyond compliance to assist our people
to drive meaningful change, which, in
turn, builds competitive advantage.
Therefore, our Sustainability Pathway
is underpinned by a step-by-step
approach that first focuses on building
solid foundations upon which to base
our sustainability strategy, including
capturing what we already do, followed
by action to drive improvement over time.
Our Sustainability Pathway
In collaboration with our suppliers and
customers, our Sustainability Pathway,
underpinned by our four Sustainability
Pillars – Smarter Ingredients, Optimised
Production, Effective Solutions, and
Meaningful Partnerships – is designed
to support us to deliver real value in
sustainable ways. Our journey has been
informed by seven United Nations
Sustainable Development Goals which
help shape how we see Ridley’s role
in addressing global sustainability
challenges.
It is our belief that to lead animal nutrition
in Australia, Ridley must embed a
sustainable food supply system.
Working with our partners at each stage
of the food and farming ecosystem
better prepares us to take on challenges
such as scare resources, emissions
and climate change. The four Pillar
methodology will assist us to improve
current levels of production, growing
in a manner which is responsible,
sustainable and profitable.
1
4
RIDLEY
SUSTAINABILITY
PATHWAY
2
3
1
2
3
4
SMARTER
INGREDIENTS
OPTIMISED
PRODUCTION
EFFECTIVE
SOLUTIONS
MEANINGFUL
PARTNERSHIPS
By selecting and developing
better-performing ingredients,
we can reduce our ecological
footprint while increasing
quality and performance.
We can also close the loop
by recapturing resources
through our ingredient
recovery plants, which
promotes cost-effective
circularity.
We aim to deploy a holistic
approach to managing our
environmental footprint,
including everything from
improving our utilities usage
to more considered factory
design and packing
materials. This approach
encourages maximum feed
production output while also
improving our efforts as
environmental stewards.
Healthier animals are more
resilient, produce greater
yields and require less
interventions. By delivering
animal nutrition solutions,
we can make a significant
contribution to both
environmental and
economic outcomes.
We aim to work with
our customers, through
technical solutions and
services, to meet their
sustainability goals.
We strive to contribute
towards a safer, more
inclusive and prosperous
workplace for our people,
partners and communities.
This builds sustainability
and drives progress.
Ridley Corporation Limited
12
Annual Report 2022
Our process
The development of the Sustainability Pathway and the identification of our Sustainability Pillars occurred over four stages.
01
Desktop
assessment
to identify key
sustainability
topics
02
Interview with
stakeholders
to prioritise
list of topics
03
Workshop with
executive team
to prioritise and
group topics into
framework
04
Meetings with
General Managers
to set KPIs and
activities
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Stage 1 – Assessment and
Identification
To identify the key sustainability
issues, Ridley conducted a materiality
assessment to isolate topics most
relevant to our key stakeholders being
employees, customers, suppliers,
shareholders and the wider community.
This included reviewing public
disclosures of key stakeholders for a
cross section of customers, competitors,
suppliers, industry bodies, retailers,
and food service providers. At this
end of this process, a list of key
sustainability topics was created.
Stage 2 – Stakeholders
We believe meaningful change will be
best achieved through the collective
action of both Ridley and its key
stakeholders. As such, Stage 2 involved
undertaking in-depth interviews with
key stakeholders. The list of key
sustainability topics produced at Stage 1
formed the basis of our interviews and
allowed us to further prioritise topics
as well as to discuss potential solutions.
From here, we could further refine our
key sustainability issues while also
building stakeholder engagement in
our sustainability journey.
Following our interviews, each topic
was considered within a materiality
matrix, which compared ‘environmental’
and ‘social’ materiality against
‘financial’ materiality.
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Ridley Corporation Limited Annual Report 2022
SUSTAINABILITY REVIEW CONTINUED
Stage 3 – Workshops
Having identified our most significant
sustainability drivers through the
materiality assessment, we
workshopped our key areas of focus
to create our four Sustainability
Pillars being Smarter Ingredients;
Optimised Production; Effective
Solutions; and Meaningful Progress.
Stage 4 – Engagement
Key to the success of our Sustainability
Pathway is obtaining ‘buy in’ from our
employees. For this reason, the final
stage of our process involved
workshopping with our General Managers
how the Pathway and each of the four
Sustainability Pillars will be embedded
in our operations and commercial
thinking at Ridley and establishing
FY23 sustainability KPIs to be flowed
down to all Ridley employees.
Sustainability governance
and oversight
A Working Group oversees the
implementation of the Sustainability
Pathway. This group is comprised of our
General Managers (each of whom have
operational responsibility for the activities
that contribute to our Sustainability
Pathway) and the CEO, who has overall
accountability. The Sustainability
Pathway is sponsored by the Board.
The Working Group meets quarterly to
discuss progress, track against internal
KPIs for FY23 and set future ambitions.
More broadly, sustainability governance
and oversight fall within Ridley’s
overarching governance framework,
established by the Board, and described
in Ridley’s Corporate Governance
Statement at www.ridley.com.au/
corporate-governance.
The Ridley Sustainability Pathway
consolidates our good work to date
and provides a future roadmap that
aligns with our overall business strategy.
Looking to the future, we believe the
transition to a sustainable economy
requires a set of reliable metrics against
which progress can be measured.
In FY23, our focus is on determining
the baseline data and setting
measurable targets. We are proud
to be taking this step forward in our
sustainability journey and look forward
to the positive outcomes that will
come from it.
14
Ridley Corporation Limited Annual Report 2022 Sustainability in action
Safe and healthy employees
Our number one priority remains the safety of our employees,
suppliers and customers. Over the past financial year,
Ridley recorded a Lost Time Injury Frequency Rate (LTIFR)
of 3.23, and Total Recordable Frequency Rate (TRFR) of 5.65.
Our safety programs continue to be driven and executed in line
with our agreed strategy, legislation and audits and we are
pleased to see ongoing improvements in our risk and injury
management and statistics.
Ridley continues to build upon the groundwork laid in FY21
with high-risk and non-routine tasks being key focus areas.
To support this, we launched the STOP-THINK-ACT program
across all sites.
With the uncertainty of the past two years still affecting the
mental health of so many around the world, we continued
to focus on health and wellbeing initiatives and supported
important days such as RUOK? Day.
Diversity
Ridley is committed to creating a safe and inclusive workplace
that supports the wellbeing of our employees. We have
continued to support initiatives as outlined in our diversity
strategy including, but not limited to, a balanced candidate
pool, support of flexible working arrangements and a mentoring
program, and are pleased to see an increase in our female
employee percentage since the last report. It is also of some
significance that we were chosen to participate in the
Career Revive program, an Australian Government initiative
aimed at supporting skilled women to return to the workforce.
This will help progress our diversity strategy and initiatives
into FY23. You can view Ridley’s Workplace Gender Equality
Agency (WGEA) 2021-22 submission in detail at www.ridley.com.
au/corporate-governance/corporate-governance/
Ridley’s commitment to protect against modern slavery
Ridley is serious about social responsibility and we respect
human rights as fundamental to our business and the
communities in which Ridley operates. We seek to protect
against all forms of modern slavery and serious exploitation
including human trafficking, forced labour and child labour
within our organisation and its supply chain. To support this,
Ridley has reviewed and updated its supplier questionnaires
and approval process to ensure we capture relevant
information and comply with ethical, sustainable and social
responsibility obligations. Concurrently, Ridley has released
a Modern Slavery Policy and a Supplier Code of Conduct as
part of a range of measures being taken to protect against
modern slavery in our organisation and supply chain.
15
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Ridley Corporation Limited Annual Report 2022
SUSTAINABILITY REVIEW CONTINUED
Circular ingredients
If not utilised in animal feed production, a large proportion
of product from the human food chain would go to landfill.
Many products, such as grain, canola and meat, are all
grown primarily for human consumption, yet the processing
of these products produces human-inedible co-products.
Through innovative processing, these co-products can be
turned into highly valuable nutritional ingredients that can
be fed to livestock.
Ridley plays a key role in both producing these valuable
co-products at our ingredient recovery plants, and utilising
them in our feeds. Over the past financial year, Ridley
continued work on its innovative Chicken Protein Concentrate
ingredient, which is much higher in protein and digestibility
than regular poultry meal. Inclusion of this ingredient in our
commercial diets throughout the year has enabled customers
to maintain or improve performance whilst decreasing their
environmental footprint by producing more from less.
Ridley in Thailand
Ridley continues to establish itself in Thailand with its
production site for Novacq™ in Chanthaburi. The Novacq™
product is manufactured on land in saline water ponds,
and is grown from naturally occurring marine microbes,
then de-watered and dried. For the Novacq™ product itself,
and at all stages of the production process, there are no
materials used (either directly or indirectly) that are sourced
from fisheries or aquaculture.
In the process of manufacturing a product that supports
sustainable outcomes, Ridley’s Chanthaburi site has been
recognised for its successful community engagement and
employee wellbeing by the National Department of Industrial
Works with an award for its Corporate Social Responsibility
(CSR) program. This year, the Ridley team at Chanthaburi
completed the National Department of Industrial Works
Environmental Management System Program Level 1 Award.
Ridley is one of 22 companies in Thailand participating in
the Program. Ridley’s participation will continue with the
Level 2 Program in 2023.
16
Ridley Corporation Limited Annual Report 2022 ’
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Sustainable prawn diets
Ridley partnered with Mackay-based Australian Prawn Farms
to successfully complete a commercial-scale trial of a prawn
diet free of marine ingredients. The prawn diet represents over
a decade of research and investment and creates a step-
change for the industry.
Building on this momentum, Ridley launched its Propel™ range
of prawn feeds this season. Propel™ is low in both marine
resources and protein, creating a more sustainable high-
performing diet for the Australian market today. Within a year
of being launched, 100% of Australian tiger prawn farmers
introduced the Propel™ range into their production systems.
Propel™ feeds are manufactured from plant and land animal
raw materials. The feeds contain two key ingredients: (i) a
highly digestible Chicken Protein Concentrate developed and
used exclusively by Ridley; and (ii) a unique microbial biomass
ingredient called Novacq™, which was developed by CSIRO
and licensed exclusively to Ridley in Australia and certain other
countries. Ridley has made significant improvements
in the production methods of Novacq™ resulting in a product
with at least double the bioactivity of its predecessor.
The novel higher-potency version is named NovaqPro™
to reflect its superior performance.
In March 2022, Ridley was recognised for the development
of the Propel™ feed, when we were presented with the
Environmental Award at the Queensland Seafood Industry
Council 2022 Awards held in Brisbane.
Ms Kim Hooper, Executive Officer, Australian Prawn Farmers
Association, says sustainable production is a high priority for
the sector, and this technology is a significant breakthough.
“By the rapid uptake by farmers, you can see how important
it is to our industry. This technology allows Australian prawn
farmers to meet the standards for sustainable aquaculture
set by Best Aquaculture Practices (BAP) and the Aquaculture
Stewardship Council (ASC). It’s a world-first and really puts
prawn farmers a step ahead in sustainable aquaculture,”
Ms Hooper said.
Ridley’s 2022 Corporate Governance Statement, outlining the key aspects of the
corporate governance framework that has been established by the Board, and which
has operated throughout the year, can be found on the Company’s website at
www.ridley.com.au/corporate-governance/corporate-governance.
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Ridley Corporation Limited Annual Report 2022
BOARD OF DIRECTORS
Mick McMahon
Quinton Hildebrand
Patria M Mann
BEc (UTAS)/Harvard AMP 176
BSc AgEcon, MBA
BEc FAICD
Independent Non-Executive
Director and Ridley Chair
Chief Executive Officer and
Managing Director
Independent Non-Executive
Director
Appointed in March 2008,
Patria is an experienced
Non-Executive Director with
20 years’ Board experience
across various sectors and
geographies. Patria has
significant insight and
understanding of market
development, business
transformation, including
digital and technological
change and M&A, and
financial transactions.
She also brings strong ASX,
audit, risk management and
governance experience.
Patria qualified as a
Chartered Accountant
and was a former Partner
at KPMG. She is a Fellow
of the Australian Institute
of Company Directors.
Other current listed
company directorships
Event Hospitality &
Entertainment Limited from
October 2013.
Bega Cheese Limited from
10 September 2019.
Former listed company
directorships in the last
three years
None.
Appointed in August 2020,
Mick is a former Managing
Director and CEO of Ingham’s
Group Limited, led the
company through its Initial
Public Offering (IPO) process
and was Executive Chairman
of Ingham’s Group Limited
prior to its IPO. Mick has over
35 years’ management and
Director experience, having
served as Managing Director
and CEO of Skilled Group for
five years, COO of Coles
Supermarkets and Managing
Director of Coles Express
during five years at Coles
Group, and spent 19 years
with Royal Dutch Shell both
in Australia and overseas.
Mick is a former Non-Executive
Director of Metcash Limited
and former Chairman of
Red Rock Leisure.
Mick graduated in Economics
from the University of
Tasmania and has completed
the Advanced Management
Program at Harvard
Business School.
Other current listed
company directorships
None.
Former listed company
directorships in the last
three years
Ingham’s Group Limited
Limited from January 2015 to
October 2019 (during which
time Inghams became a
publicly listed entity).
Seafarms Limited from
November 2021 to
6 May 2022.
Appointed in August 2019,
Quinton has more than
20 years of experience in
the agribusiness and food
industries across Australia
and in South Africa. He has
extensive experience in
general management,
commerce, marketing, sales,
supply chain and logistics,
planning and operations.
In his most recent role, which
commenced in 2015, Quinton
was Chief Commercial Officer
and Operations Excellence
Director at Ingham’s Group
Limited. In 2018, Quinton was
appointed as Interim Chief
Executive Officer (CEO).
Prior to joining Ingham’s
Group Limited, Quinton was
CEO of Mackay Sugar Limited
from 2008 to 2015, General
Manager Marketing at Illovo
Sugar in South Africa from
2007 to 2008, and International
Marketing Director at South
African Sugar Association
from 2001 to 2007.
Quinton has a Bachelor
of Science in Agricultural
Economics from the University
of Natal in South Africa,
a Master of Business
Administration from the
Edinburgh Business School
in Scotland, and a Graduate
Diploma in Banking from
the Institute of Bankers in
South Africa.
Other current listed
company directorships
None.
Former listed company
directorships in the last
three years
None.
18
Prof. Robert J van
Barneveld
B.Agr.Sc. (Hon), PhD,
R.An.Nutr., FAICD
Independent Non-Executive
Director
Appointed in June 2010,
Professor van Barneveld is a
registered animal nutritionist,
has a Bachelor of Agricultural
Science with a major in Animal
Production and a PhD in
nutrition from the University
of Queensland. Rob brings
to the Board a wealth of
experience in the agricultural
sector and is the Group CEO
and Managing Director of
the SunPork Group, which
includes genetics, farms,
abattoirs, value-add and
food businesses. Rob also
serves on the Board of the
Australasian Pork Research
Institute Ltd and is Chairman
of Autism CRC Ltd. Rob is
an Adjunct Professor in the
School of Environmental
and Rural Science at the
University of New England,
and an Adjunct Professor
at the School of Agriculture
and Food Science at the
University of Queensland.
Other current listed
company directorships
None.
Former listed company
directorships in the last
three years
None.
Ridley Corporation Limited Annual Report 2022 ’
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David Lord
Ejnar Knudsen
Rhys Jones
Julie Raffe
CFA
Non-Executive Director
Appointed in June 2013,
Ejnar is the CEO of AGR
Partners, LLC, an associated
entity of Ridley’s largest
shareholder, AGR Agricultural
Investments LLC. Ejnar has
more than 20 years of
experience investing in and
operating food and agriculture
companies. Ejnar was
Executive Vice President of
Western Milling, a start-up
California grain and feed
milling company that grew
to over $1 billion in sales.
Ejnar spent 10 years as
Vice President for Rabobank
in New York managing a loan
portfolio, equity investments
and corporate advisory
services. Prior to founding
AGR Partners, Ejnar was
Co-Portfolio Manager of
Passport Capital’s Agriculture
Fund and Craton Capital.
Other current listed
company directorships
Green Plains Inc.
Former listed company
directorships in the last
three years
None.
BSc (Chem), BBS(Hons)
(1st), MBS
Independent Non-Executive
Director
Appointed in August 2020,
Rhys has a 30-year career
working in the Australasian
building, manufacturing
and packaging industries.
Rhys is currently the
Managing Director and
Chief Executive Officer
of Vulcan Steel Limited,
an ASX/NZX listed steel
distributor with over 72
business units across
Australasia. He is also a
Director of Metro Performance
Glass Ltd. Prior to joining
Vulcan in 2006, Rhys held
senior roles in particular
with Carter Holt Harvey and
Fletcher Challenge, including
as Chief Operating Officer
of the Pulp, Paper and
Packaging businesses
of Carter Holt Harvey.
Other current listed
company directorships
Metro Performance Glass
Limited, Vulcan Steel Limited.
Former listed company
directorships in the last
three years
None.
MBA (Executive) MBS,
Grad. Dip. Bus (Management)
(Monash) MAICD
Independent Non-Executive
Director
Appointed in April 2016,
David has enjoyed a senior
management career primarily
in consumer products and
agribusiness, most recently
as President and Chief
Operating Officer of Saputo
Dairy Division (Australia)
and as CEO and Managing
Director of Warrnambool
Cheese & Butter Factory
Company Limited (WCB)
from 2010 to 2015. Between
the years 2002 and 2009,
David was CEO and Managing
Director of Parmalat Australia.
David has extensive executive
Director experience in supply
chain, the domestic markets
for consumer and industrial
food products, and the
marketing of Australian dairy
products in the international
commodity markets. From
28 June 2019 to 26 August
2019, David was appointed
to the executive position as
Interim CEO for the Ridley
consolidated group while it
conducted its CEO search.
David retired from a position
on the Board of Dairy Australia
in November 2021.
Other current listed
company directorships
None.
Former listed company
directorships in the last
three years
None.
GAICD, FFIN, FCA
Independent Non-Executive
Director
Appointed 1 September 2022,
Julie has 40 years of
professional experience
across multiple sectors.
Julie is a non-executive director
of Latitude Group Holdings
Limited, non-executive
advisory Committee member
and Chair of Ironman 4 x 4
Pty Ltd’s Audit and Risk
Committee National Board for
Finance Executives Institute
Australia President and Chair
of its Victorian Chapter; and
Deputy Chair and Treasurer
of Entertainment Assist.
Julie is a former Finance
Director and Company
Secretary for Village Roadshow
Limited (previously an ASX
200/300 listed company
Julie has held positions as
a director, Chair of both the
Audit and Risk Committee
and Finance Committee for
Eltham College; non-executive
director and Chair of Audit
and Risk Committee for
Signature Capital Limited
(a listed financial services
company); alternate director
and Audit Committee member
for Austereo Limited; and
director and Chair of Audit
and Risk Committee for
Northern Health.
Other current listed
company directorships
Latitude Group Holdings
Limited.
Former listed company
directorships in the last
three years
None.
19
Ridley Corporation Limited Annual Report 2022
FINANCIAL REPORT
Directors’ Report
Remuneration Report – Audited
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Index of Notes
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
21
27
39
40
41
42
43
44
45
80
81
86
Ridley Corporation Limited
20
Annual Report 2022
DIRECTORS’ REPORT
For the Year Ended 30 June 2022
The Directors of Ridley Corporation Limited (Ridley or the Company) present their report for the Group (the Group), being the
Company and its subsidiaries, and the Group’s interest in equity accounted investments at the end of, or during, the financial year
(FY) ended 30 June 2022 (FY22).
1. Directors
The following persons were Directors of Ridley Corporation Limited during the whole of the financial year and up to the date of this
report unless otherwise stated:
M McMahon
P M Mann
Q L Hildebrand
E Knudsen
D J Lord
R Jones
R J van Barneveld
2. Principal activities
The principal continuing activities of the Group during the year were the production of premium quality, high-performance animal
nutrition solutions.
3. Results – Growth Strategy delivering improved earnings
Results
The highlights of the Ridley Corporation Limited consolidated group (Ridley or Group) FY22 results are:
• Total comprehensive income of $42.4 million (m), representing a $17.5m, or 70.4% increase including $6.2m of Individually
Significant Items after tax, which were largely related to gains on the sale of various sites.
• EBITDA from ongoing operations before Individually Significant Items of $80.1m, representing an $11.0m, or 16.0% increase on the
prior corresponding period, driven by the execution of Ridley’s Growth Strategy, continued focus on efficiency and demonstrating
resilience to challenging macro factors including rising raw material costs, delays in supply chains and the impacts of COVID-19
(EBITDA from ongoing operations before Individually Significant Items is a non-IFRIS measure).
• A $60.2m, or 72.4% reduction in net debt from $83.1m to $22.9m, driven by the sale of assets, strong earnings and disciplined
controls over capital expenditure. During the period working capital increased as the Group took strategic commodity positions
to offset the impacts of rising raw materials and delays in supply chains, which was more than offset by asset sales, including the
sale of the Westbury extrusion facility.
SUMMARY ($ million unless otherwise stated)
Total comprehensive income – Net Profit After Tax (NPAT)
Comprehensive income (NPAT) – ongoing operations
EBITDA – ongoing operations1
Consolidated cash inflow2
Net debt
Leverage ratio (times)3
Earnings Per Share – ongoing operations (cents)4
2022
42.4
36.2
80.1
60.2
22.9
0.29
11.3
2021
24.9
24.9
69.1
64.1
83.1
1.20
7.8
11.0
11.3
17.5
Movement
▲
▲
▲
▼
▼
▼
▲
60.2
0.91
3.9
3.5
1. Calculated as NPAT of $42.4m adjusted for finance costs ($2.8m), tax expense ($18.0m), depreciation and amortisation ($25.8m) and before
Individually Significant Items of $8.9m.
2. Calculated as closing net debt less opening net debt.
3. Calculated as net debt/Last 12 months EBITDA per banking facility covenant calculations.
4. Calculated as basic Earnings Per Share (13.3cps) less the benefit of the Individually Significant Items of 2cps.
The Directors believe that the presentation of the unaudited non-IFRS financial summary above is useful for users of the accounts
as it reflects the underlying financial performance of the business.
21
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 DIRECTORS’ REPORT CONTINUED
4. Review of operations
For statutory reporting purposes, the consolidated profit and loss from continuing operations after income tax for the year was
a profit of $42.4m (FY21: $24.9m). The consolidated profit and loss from continuing operations before income tax for the year
was a profit of $60.5m (FY21: $35.0m).
Consistent with the focus to lift the overall performance of the business, the Company kept its emphasis on a strong safety culture
and has maintained a good safety record in the year, despite the operational challenges of the global environment including the
COVID-19 pandemic.
Segment performance
The Packaged Feeds and Ingredients segment performed strongly, delivering an EBITDA of $58.0m (FY21: $46.5m). The main contributor
to this segment was the Rendering Business Unit, which is benefiting from the ongoing capital investment in product premiumisation
and the higher market prices for rendered tallows and oils. Volumes through the branded Packaged Products business grew strongly
year on year as we expanded market share and increased product lines into the urban pet specialty chains. Aquafeed volumes reduced
following the sale of the Westbury facility in August 2021. Sales to salmon customers were curtailed while production was allocated
to maintaining our supply to the growing sub-tropical varieties. The NovaqPro™ operations contributed a small loss resulting from
the costs of the Yamba site prior to its closure in May 2022. The NovaqPro™ operations in Thailand broke even.
The Bulk Stockfeeds segment contributed an EBITDA of $34.4m (FY21: $32.5m), with the stronger performance driven by increasing
throughput and efficiencies. The business gained market share over the year, led by increased sales volumes in the poultry and
dairy sectors.
The unallocated corporate cost of $12.2m (2021: $9.9m) has increased due to additional accruals for employee incentives, which are
linked to the improved operating results, while the 38% reduction in net finance costs to $2.8m reflects the continuation of debt retirement
and lower interest rates.
Cash flows and debt
The operating cash flow of $46.8m for FY22 (FY21: $82.4m) was lower due to the strategic decision to hold more inventory to avoid
the impact of customer disruptions due to supply chain delays. As a result, the cash conversion from ongoing operations was 52.5%
(FY21: 119%); however, excluding the strategic inventory hold, the cash conversion was 89%.
The operating cash flow was augmented with the sale of a number of surplus assets, including the operations at Westbury in Tasmania,
reducing the Company debt levels. Net debt as at 30 June 2022 was $22.9m (FY21: $83.1m) and the FY22 leverage ratio has reduced
to 0.29 times (FY21: 1.20).
Earnings per share
The earnings per share as at 30 June is reflected in the table below:
Basic/Diluted earnings per share
Basic/Diluted earnings per share – before Individually Significant Items
2022
Cents
13.3/12.8
11.3/10.9
2021
Cents
7.8/7.6
7.8/7.6
The Directors believe that the presentation of the unaudited non-IFRS EPS calculation before significant items above is useful for users
of the accounts as it reflects the underlying earnings per share of the business.
Individually Significant Items (ISI) (Note 5(d))
The pre-tax, net effect of the FY22 ISI is $8.9m ($6.2m after tax) and comprises of the following:
(i) Westbury asset sale
The sale of the Westbury extrusion business in Tasmania was completed in August 2021 and generated a pre-tax profit of $6.0m
($4.2m after tax).
(ii) Property sales
The sale of the former feedmills at Bendigo, Mooroopna and Murray Bridge generated a FY22 pre-tax profit of $4.2m ($3.0m after tax).
(iii) Software-as-a-Service (SaaS) arrangements
The Company concluded the ERP upgrade in FY22 and the project costs have been reported for consistency as an ISI. For FY22,
the SaaS costs expensed are $2.3m ($1.6m after tax).
(iv) Restructuring costs
During the period restructuring costs totalling $1.1m ($0.8m after tax) were incurred in relation to the closure of the Yamba Novaq™
facility of $0.8m and the finalisation of the restructuring of the Thailand business of $0.2m.
22
Ridley Corporation Limited Annual Report 2022 (v) Reversal of excess provisions
The provision for restructuring comprised all of the estimated costs of employee termination benefits, asset relocation, site closure,
demolition, remediation and preparation for divestment with regard to the Murray Bridge, Bendigo and Mooroopna former feedmills.
Following the sale of all three sites in FY22, the unutilised balance of the provision of $2.0m ($1.4m after tax) was written back to
the overall gain on sale reported as an Individually Significant Item.
Events occurring after the balance sheet date
There were no matters or circumstances that have arisen since 30 June 2022.
Risks
The following is a summary of the key continuing significant operational risks facing the business and the way in which Ridley manages
these risks.
• Cyclical fluctuations impacting the demand for animal nutrition products – by operating in several business sectors within the
domestic economy (namely poultry and pig, dairy, aqua, beef and sheep, companion animals, consumer goods packaged products
and rendering), some of which have a positive or negative correlation with each other, Ridley is not dependent upon a single business
sector or agricultural cycle and is able to spread the sector and adverse event risk across a diversified portfolio.
• Influence of the domestic grain harvest – through properly managed procurement practices and many of our customers retaining
responsibility for the supply of raw materials for the feed Ridley manufactures on their behalf, the impact of fluctuations in raw
material prices associated with domestic and world harvest cycles is reduced.
• Influence of natural pasture on supplementary feed decision-making – while not being able to control the availability of natural
pasture, Ridley believes there is a compelling commercial justification for supplementary feeding in each of its ruminant sectors
of operation, whether that be measured in terms of milk yield or herd wellbeing and feed conversion.
• Impact on domestic and export markets in the event of disease outbreak in livestock – Ridley operates in several business
sectors exposed to different animal species and has a footprint of feedmills dispersed across the eastern states of Australia that
provide geographical segregation to reduce the exposure to a disease outbreak occurring within a customer’s (supplier’s in the
case of rendering) operations.
• Claims or market access restrictions due to product contamination or the delivery of product that is not in specification –
Ridley has a strategy of plant segregation, and operational controls in place to effectively manage its own risk of product
contamination across the various species sectors. HACCP (hazard analysis and critical control points) Plans are deployed
across the business to adhere to product specifications.
• Customer and supplier concentration and risk of customer and supplier vertical integration or risk of losing a significant
customer or supplier – Ridley endeavours to enter into long-term sales and supply contracts with its customers and suppliers. This
strategy provides a degree of confidence in order to plan appropriate shift structures, procurement and supply chain activities in
the short term, and capital expenditure programs in the long term, while actively managing the risk of stranded assets and
backward integration into feed production by significant customers and forward integration into rendering by significant suppliers.
• Commercialising NovaqPro™ – the commercialisation of NovaqPro™, including risk mitigation strategies, is being actively managed
by Ridley; however, there are significant risks with any start-up business, some of which are beyond Ridley’s control and could
further delay commercialisation.
• Thailand operational and regulatory risk– with the establishment of commercial operations in Thailand, the business is actively
managing the operational risks through the appointment of an established local management team that works closely with the
Australian operations. The business owns the land upon which it operates, reducing the risk of changes in the regulatory environment.
• Sustainability and climate change – Ridley has worked with its customers and suppliers to develop a Sustainability Pathway that
is focused on:
֢ sourcing high-quality raw materials that are produced with respect to social and environmental conditions;
֢ optimising our manufacturing and supply chain process to reduce our footprint;
֢ developing technical solutions that enable farmers to produce more with less; and
֢ creating safe, healthy and diverse workplaces that supports the vibrant local communities in which we operate.
• Cyber breach – the business has implemented system controls that are reviewed and tested periodically to assist the business
in being able to detect and react to a potential cyber attack.
• Corporate – risks such as safety, recruitment and retention of high-calibre employees, inadequate innovation and new product
development, customer credit non-payment, climate change, interest rate increases, foreign exchange fluctuations, and the purchase
of inappropriate raw material, lower than anticipated return on capital invested and consequences of lower underlying earnings are
all managed through the Group’s risk management framework, which includes reviews and monitoring by the executive lead team.
Overlaying the day-to-day business activity risks were the unique operational risks associated with the COVID-19 pandemic, the
management of which has necessitated the introduction of a vast array of new practices, processes and procedures collectively
designed to ensure the safety and wellbeing of all Ridley and related personnel while maintaining essential continuity of supply
to all farmers of livestock.
23
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 DIRECTORS’ REPORT CONTINUED
Outlook
Ridley expects to grow earnings and cash flow in the year ahead by:
• increasing sales as we support the growth of our existing customers and win market share;
• implementing cost savings and efficiency initiatives; and
• executing on the growth plans in place for each Business Unit.
Cash generated from operations, and a strong balance sheet, are expected to support the ongoing investment in the business and
the payment of dividends, leaving capacity to undertake the announced on-market share buy-back and pursue growth opportunities.
5. Significant changes in the state of affairs
Other than as reported in Section 4 of this report, there were no significant changes in the state of affairs of the Group during the year
ended 30 June 2022.
6. Dividends and distributions to shareholders
An FY21 final dividend of 2 cents per share franked to 100% was paid on 29 October 2021.
An FY22 interim dividend of 3.4 cents per share franked to 100% was paid on 29 April 2022.
Following a year of strong operating performance, cash generation and debt retirement, the Board has declared a final dividend
of 4 cents per share (cps), fully franked and payable on 27 October 2022 for a cash outlay of approximately $12.8m.
7. Directors’ and executives’ remuneration
Refer to the Remuneration Report.
8. Meetings of Directors
The number of Directors’ meetings and meetings of Committees of Directors held during the financial year, and the number of meetings
attended by each Director as a Committee member, are as shown in the following table.
Board
Audit and
Risk Committee
Remuneration and
Nominations Committee
Ridley Innovation and
Operational Committee
Directors
M McMahon
Q L Hildebrand
P M Mann
R J van Barneveld
E Knudsen
D J Lord
R Jones
H
11
11
11
11
11
11
11
A
11
11
11
11
11
11
11
References to Director meeting attendance table:
H: Number of meetings held during period of office.
A: Number of meetings attended.
H
4
4
4
A
4
4
4
H
3
3
3
A
3
3
3
H
3
3
3
A
3
3
2
9. Information on Directors
Particulars of shares and Performance Rights in the Company held by Directors, together with a profile of the Directors, are set out
in the Board of Directors section in the Annual Report and in the Remuneration Report.
10. Company Secretary
Amy Alston was Company Secretary until 21 October 2021, whereupon Kirsty Clarke was appointed as Company Secretary.
24
Ridley Corporation Limited Annual Report 2022 11. Share options and performance rights
Unissued ordinary shares of Ridley Corporation Limited and controlled entities under options and performance rights at the date
of this report are as follows:
Ridley Corporation Long Term and Special Retention Incentive Plan (Performance Rights)
Ridley Employee Share Scheme (Options)*
* The share grant and supporting loan together in substance comprise a share option.
Number
Expiry date
13,685,405
3,439,321
Various
Various
No holder has any right under the above plan and scheme to participate in any other share issue of the Company or of any other entity.
The Company will issue shares when the options and performance rights are exercised. Further details are provided in Note 24
in the Notes to the Financial Statements and in the Remuneration Report.
The names of all persons who currently hold options granted under the option plans are entered in the register kept by the Company,
pursuant to section 215 of the Corporations Act 2001. The register is available for inspection at the Company’s registered office.
12. Environmental regulation
The Group’s manufacturing activities are subject to environmental regulation. Management ensures that any registrations, licences
or permits required for the Group’s operations are obtained and observed.
Ridley has environmental risk management reporting processes that provide senior management and the Directors with periodic reports
on environmental matters, including rectification actions for any issues as identified. In accordance with its environmental procedures,
the Group monitors environmental compliance of all of its operations on an ongoing basis. The Board is not aware of any environmental
matters likely to have a material financial impact.
The Group is subject to the reporting requirements of the National Greenhouse and Energy Reporting Act 2007 (Cth) (NGER), which
governs the reporting and dissemination of information about greenhouse gas emissions, greenhouse gas projects and energy use
and production. Ridley continues to comply with its NGER reporting requirements.
13. Post balance date events
There were no matters or circumstances that have arisen since 30 June 2022 that have significantly affected, or may significantly affect:
(i)
the Group’s operations in future financial years; or
(ii) the results of those operations in future financial years; or
(iii) the Group’s state of affairs in future financial years.
14. Insurance
Regulation 113 of the Company’s Constitution indemnifies officers to the extent now permitted by law.
A Deed of Indemnity (Deed) was approved by shareholders at the 1998 Annual General Meeting. Subsequent to this approval,
the Company has entered into the Deed with all the Company’s Directors, the secretary of the Company, and the Directors of
all the subsidiaries.
The Deed requires the Company to maintain insurance to cover the Directors in relation to liabilities incurred while acting as a Director
of the Company or a subsidiary and costs involved in defending proceedings. During the year the Company paid a premium in respect
of such insurance covering the Directors and secretaries of the Company and its controlled entities, and the general managers of
the Group.
25
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 DIRECTORS’ REPORT CONTINUED
15. Non-audit services
The Company may decide to employ the auditor (KPMG) on assignments in addition to the statutory audit function where the auditor’s
expertise and experience with the Company and/or the Group are important and valuable.
The Board has considered the non-audit services and, in accordance with the advice received from the Audit and Risk Committee,
is satisfied that the provision of such expertise on separately negotiated fee arrangements is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services
by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
• all non-audit services provided during FY22 have been reviewed by the Audit and Risk Committee to ensure they do not impact
the impartiality and objectivity of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making
capacity for the Company, acting as advocate for the Company, or jointly sharing economic risk and rewards.
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 38
and forms part of this report.
During the year the following fees were paid or are payable for services provided by the auditor of the parent entity and its related practices:
Audit and review of financial reports
Taxation and other services
Total
$
424,878
165,677
590,555
16. Rounding of amounts to nearest thousand dollars
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 issued by
the Australian Securities and Investments Commission relating to the ‘rounding off’ of amounts in the Directors’ Report and financial
statements. Amounts in the Directors’ Report and the consolidated financial statements have been rounded off to the nearest
thousand dollars in accordance with that legislative instrument, unless otherwise indicated.
Signed in Melbourne on 18 August 2022 in accordance with a resolution of the Directors.
Mick McMahon
Director and Ridley Chair
Quinton L Hildebrand
CEO and Managing Director
26
Ridley Corporation Limited Annual Report 2022 REMUNERATION REPORT – AUDITED
The Directors of Ridley Corporation Limited (Ridley or Company) present the Remuneration Report prepared in accordance with
section 300A of the Corporations Act 2001 for the Company and the Group, being the Company and its subsidiaries (Group), and the
Group’s interest in equity accounted investments, for the financial year ended 30 June 2022. This report forms part of the Directors’
Report for the year ended 30 June 2022.
Remuneration and Nominations Committee
The Remuneration and Nominations Committee, (throughout the Remuneration Report referred to as the Committee), consisting of at
least three independent Non-Executive Directors, advises the Ridley Board of Directors (Board) on remuneration policies and practices
generally. The Committee makes specific resolutions in its own right and recommendations to the Board on remuneration packages
and other terms of employment for the Managing Director, other senior executives and Non-Executive Directors. The Committee is
responsible for evaluating the Board’s performance, reviewing Board size and composition, setting the criteria for membership, and
identifying and evaluating candidates to fill vacancies on behalf of the Ridley Board.
Executive remuneration and other terms of employment are reviewed annually by the Committee, having regard to performance
against goals set at the start of the year, relevant comparative information and independent expert advice.
The number of meetings held during the year is shown as item 8 of the Directors’ Report.
Services from remuneration consultants
As part of its annual review of remuneration strategy and structures, the Board has confirmed its executive remuneration and diversity
disclosure policies in the context of current Australian corporate governance best practice.
Remuneration of Directors and executives
Principles used to determine the nature and amount of remuneration
Remuneration packages are set at levels that are intended to attract and retain directors and executives capable of directing
and managing the Group’s operations and achieving the Group’s strategic objectives.
Executive remuneration is benchmarked against a comparator group of companies comprised of ASX and private companies of similar
function and size to Ridley.
Executive remuneration is structured to align reward with the achievement of annual objectives, successful business strategy
implementation and shareholder returns. The remuneration strategy is to:
(i) offer a base Total Employment Package (TEP) that can attract and retain talented people;
(ii) provide short-term performance incentives to encourage personal performance;
(iii) provide long-term incentives to align the interests of executives more closely with those of Ridley shareholders; and
(iv) reward sustained superior performance, foster loyalty and staff retention.
The overall level of executive reward considers the performance of the Group primarily for the current year.
Non-Executive Directors
Non-Executive Directors’ fees are determined within an aggregate Non-Executive Director fee pool limit, which is reviewed periodically,
with proposed amendments recommended to shareholders for approval. The maximum currently stands at $700,000 as approved at
the 2003 Annual General Meeting. The Chair receives incremental fees, and the Chair of the Audit and Risk Committee, Ridley Innovation
and Operational Committee and Remuneration and Nominations Committee each receives $10,000 of incremental fees, in addition
to the base Director fees. The total amount paid to Non-Executive Directors in FY22 was $648,900 (FY21: $637,398).
Executives
The executive pay and reward framework comprises the three components of base pay and benefits, short-term incentives
and long-term incentives.
27
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 REMUNERATION REPORT – AUDITED CONTINUED
Remuneration of Directors and executives continued
Consequences of performance on shareholder wealth
In considering the Group’s performance and benefits for creation of shareholder wealth, the Committee has regard for the following
indices in respect of the last five years.
Comprehensive income/(loss) (NPAT)
$’000
2022
42,430
2021
24,896
2020
(10,748)
2019
23,565
2018
17,409
Earnings before interest, tax, depreciation
and amortisation (EBITDA) before individually
significant Items1
EBITDA after individually significant items2
Earnings before interest and tax
Cash flow from operating activities (statutory)
Return on net assets3
Dividends paid
TSR4
Year end closing share price
Short-term incentive to KMP
$’000
$’000
$’000
$’000
%
$’000
%
$
$’000
80,144
89,077
63,303
46,588
13.4
17,253
61.8
1.79
1,270
69,148
69,148
39,549
85,778
8.7
–
67.9
1.14
1,086
59,418
15,084
(11,075)
22,367
(4.1)
13,226
(35.5)
0.72
445
48,154
54,315
35,412
36,824
8.3
13,083
(10.4)
1.19
–
43,629
43,629
26,368
50,900
6.8
13,083
2.3
1.38
–
1. Non-IFRS measure calculated as Net Profit After Tax (NPAT) of $42.4m adjusted for finance costs ($2.8m), tax expense ($18.0m), depreciation
and amortisation ($25.8m) and before individually significant items of $8.9m.
2. EBITDA calculated above including individually significant items of $8.9m.
3. Calculated as NPAT as a percentage of net assets.
4. Total Shareholder Returns (TSR) is calculated as the change in share price for the year plus dividends paid per share for the year, divided by the opening
share price, expressed as a percentage.
Base pay and benefits
Executives receive a base package, which may be delivered as a mix of cash and, at the executive’s discretion, certain prescribed
non-financial benefits, including superannuation in excess of the superannuation contribution guarantee payments.
External consultants provide analysis and advice to ensure the base package and benefits for non-executive staff are set to reflect
the market rate for a comparable role. An executive’s pay may also be reviewed on promotion.
The Group sponsors the Ridley Superannuation Plan – Australia (the Fund), and contributes to other employee-nominated superannuation
plans. The Fund provides benefits on a defined contribution basis for employees or their dependants on retirement, resignation,
total and permanent disability, death and, in some cases, on temporary disablement.
Short-term incentives
For FY22, executives and employees in senior positions are eligible for short-term incentive (STI) payments based on two performance
streams, being the Group financial performance component (70% weighting) and the personal key performance Indicators (KPls)
component (30% weighting). STI incentives by role range from 70% of the TEP for the Managing Director down to 10% of the TEP
for the least senior participants in the plan.
The Group financial performance component of the STI is assessed against budgeted EBITDA. The measures of personal KPI
components include targets on safety, training, operational excellence, customer focus, sustainability and community, and people
values and development. Each year, appropriate KPls are set to align the STI plan with the priorities of the Group through a process
that includes setting stretch target and minimum performance levels required to be achieved prior to any payment of an STI.
Where achievement of 90% of budgeted EBITDA is reached, the payment of a partial STI based on the achievement of personal
KPls will be assessed by the Board at its sole discretion.
KPls for the Managing Director are initially considered and recommended by the Committee and then approved by the Board based
on the adopted business strategy. These approved KPls are then cascaded down to the KMPs, direct reports of the CEO referred to
as C-Suite Executives, and throughout the business, recognising the relative contributions required of each role within the organisation
to achieve the stated objectives.
A summary of the STI award structure for FY22 is shown in the following table, subject always to the exercise of discretion by the Board.
28
Ridley Corporation Limited Annual Report 2022 Metric
Financial
Financial
Financial
Financial
Personal
Personal
Percentage of budgeted EBITDA Award
< 100%
100%
100% plus up to $5m
Nil
50% of the 70% Group financial component
51%–100% of the 70% Group financial component straight-line pro rata
of incremental EBITDA up to $5m
100% plus > $5m
Capped at 100% of the 70% financial component
< 90%
90% or greater
Nil
100% of the 30% personal KPI component subject to the individual meeting
his or her own KPls for the year and to Board discretion
Following the end of the 2022 financial year, the financial results and each individual’s performance against KPls have been reviewed to
determine STI payments for each executive and employees in senior positions. Given the underlying consolidated EBITDA performance
was greater than $5m ahead of the EBITDA budget before individually significant items, the Board has resolved to award 100% of the
Group financial component. The FY22 STI entitlements awarded also reflect the performance of the individual assessed against their
personal KPIs, with the maximum 100% awarded only to those employees who have exceeded all of their performance targets for the
year. The award will be satisfied in cash via the September 2022 payroll.
In September 2021, the FY21 STI award, which was fully provided for as at 30 June 2021, was satisfied through the monthly payroll.
For each KMP included in the annual remuneration tables, the percentage of the available STI that was awarded for the financial year,
and the percentage that was forfeited because the service and performance criteria were not achieved, are set out in the following
table, together with the maximum amount of $1,348,920 (2021: $1,155,149) payable to KMP had all STI performance targets been
achieved.
2022
2021
STI
percentage
range of TEP1
STI
maximum
potential
award in $2
2022 STI
award in $3
Paid
%
Forfeited
%
0–70%
0–60%
0–50%
0–40%
0–40%
0–40%
0–40%
490,000
301,972
37,732
147,216
152,000
120,000
100,000
453,250
279,325
37,732
136,175
152,000
93,000
92,753
1,348,920
1,244,235
92.5%
92.5%
100%
92.5%
100%
77.5%
92.5%
92.2%
7.5%
7.5%
0%
7.5%
0%
22.5%
7.5%
7.8%
Paid
%
92.5%
N/A
100%
100%
85%
92.5%
N/A
94.0%
Forfeited
%
7.5%
N/A
-
–
15%
7.5%
N/A
6.0%
KMP name
Q Hildebrand
R Betts4
A Boyd5
C Klem
R Singh
H Slattery
K Clarke6
STI for FY22
1. STI percentage applicable subject to pro rata adjustment for the period of employment or in the KMP role.
2. Maximum financial value applicable to the maximum percentage.
3. FY22 STI award to be paid via the September 2022 payroll.
4. STI participant from 1 August 2021.
5. STI participant until 25 August 2021 date of resignation as CFO, so maximum potential STI pro rated accordingly.
6. STI participant from 30 August 2021.
29
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022
REMUNERATION REPORT – AUDITED CONTINUED
Long-term incentives
In FY22 there was an issue of Indeterminate Performance Rights (Rights) to senior executives and officers under the Ridley Long Term
Incentive Plan (LTIP) with an effective grant date of 1 July 2021 and an offer of the Ridley Employee Share Scheme (ESS) in September 2021.
The standard terms and conditions of these issuances is stated below. The LTIP aligns the interests of executives with those of Ridley
shareholders in rewarding sustained superior performance, while the ESS fosters Company-wide loyalty and staff retention by providing
an ownership interest in the Company. Company policy prohibits employees from entering into any transaction that is designed or
intended to hedge any exposure to Ridley securities.
Ridley Corporation Long Term Incentive Plan (LTIP)
The purpose of the LTIP is to provide long-term rewards through the delivery of long-term, sustainable business objectives that are
directly linked to the generation of shareholder returns. Under the LTIP, which was introduced in October 2006, selected executives
and the Managing Director may be offered a number of Rights, each Right providing the entitlement to acquire one Ridley share at
nil cost.
Rights vest subject to continued employment (with an exclusion for cessation of employment for a Qualifying Reason such as death,
disability or redundancy) and to the satisfaction of performance hurdles set for the three-year term of the Rights.
For all Rights currently on issue, there are two performance measures, namely Return on Funds Employed (ROFE) and Absolute Total
Shareholder Returns (TSR). The maximum is limited to a percentage of each participant’s total fixed remuneration.
ROFE is calculated as being the average annualised Ridley Consolidated Group Earnings Before Interest, Tax, Depreciation and
Amortisation (EBITDA) for the performance period divided by the average of the Funds Employed (FE) at the start and end of that
performance period.
TSR is expressed as a percentage and calculated as the sum of the cents per share increase in the Ridley share price from the effective
date of grant to the last day of the three-year performance period plus the aggregate of cents per share dividends paid throughout the
performance period, divided by the Ridley share price at the effective date of grant. All Ridley share prices adopted in the calculations
comprise the five-day VWAP immediately prior to the relevant start and end dates of the performance period.
The number of Rights issued to each participant is divided equally into two tranches, Tranche A and Tranche B. The performance
measure for Tranche A Rights is the ROFE hurdle while the Absolute TSR is the performance hurdle for Tranche B Rights. Each tranche
is independently tested, such that one tranche could hypothetically result in 100% vesting while the other could result in 100% forfeiture,
or any combination thereof.
The fair value of Tranche B Rights has been calculated by an independent expert in accordance with Share-Based Payment accounting
standard AASB2 on an option-equivalent basis, while the accounting fair value of Tranche A Rights is estimated excluding the impact
of the ROFE hurdle (as this is considered a ‘non-market condition’). The impact of the ROFE hurdle is then taken into consideration
by adjusting the estimated number of Tranche A Rights that will vest based on current and projected performance.
The performance criteria for Rights issued in FY22 are set out in the following table, with the ROFE performance assessment spanning
the entire three-year performance period:
Tranche
Metric
Performance hurdles
for the periods
30 June 2022 & 2023
Performance hurdles
for the period
30 June 2024
A
A
A
A
A
B
B
B
B
ROFE
ROFE
ROFE
ROFE
ROFE
Absolute TSR
Absolute TSR
< 19%
19%
19% – 30%
> 30%
< 30%
30%
Absolute TSR
30% – 70%
Absolute TSR
>70%
< 15%
15% – 25%
> 25%
< 30%
30%
30% – 70%
> 70%
30
Award
Nil
0% – 100% on a straight-line pro rata basis
50%
50 – 100% on a straight-line pro rata basis
100%
Nil
50%
50% – 100% on a straight-line pro rata basis
100%
Ridley Corporation Limited Annual Report 2022 Summary of Ridley performance
The following table provides a summary of the performance for each tranche of the LTIP Rights on issue at year end, rebased to the
effective date of grant and using 30 June 2022, being the actual test date for the FY20 issue and the hypothetical end date for the FY21
and FY22 tranches. The data does not take account future dividends and is therefore only an indicative and incomplete measure of
Absolute TSR performance. The ROFE has been assessed for all three tranches based on the assessed ROFE at 30 June, 2022.
Start date
Test date
Tranche
Ridley TSR
Ridley ROFE
Number of
rights on issue
Number/%
hypothetically
vested as at
30 June 2022
1 Sep 20191
30 June 2022
1 Sep 2019
30 June 2022
1 Jul 20202
1 Jul 2020
1 Jul 20213
30 June 2023
30 June 2023
30 June 2024
1 Jul 2021
30 June 2024
A
B
A
B
A
B
78.5%
141.0%
60.8%
25%
1,660,014
1,286,511/77.5%
1,860,042
1,860,042/100%
25%
2,744,271
2,258,535/82.3%
3,020,643
3,020,643/100%4
25%
2,107,988
2,107,988/100%
2,292,448
2,040,279/89%4
1. The Rights on issue with an effective grant date of 1 September 2019 and performance period ending 30 June 2022 were tested on 1 July 2022
based on Ridley’s Total Shareholder Return over the 34-month performance period ended on 30 June 2022 (noting that the offer was made effective
from 1 September 2019 to align with the appointment of the current CEO). Actual vesting of this Tranche A of Rights was determined by ROFE
performance from 1 July 2021 to 30 June 2022, being the final year of the performance period.
2. Actual vesting of this Tranche A of Rights is determined by ROFE performance for the final year of the performance period, being from 1 July 2022
to 30 June 2023.
3. Actual vesting of this Tranche A of Rights is determined by ROFE performance for all three years of the performance period, being from 1 July 2021
to 30 June 2024.
4. Based on actual dividends paid to date during the performance period and the dividend to be paid in October 2022, i.e. excluding consideration
of any undeclared future dividends payable during the performance period.
Ridley Corporation Special Retention Plan
The Ridley Corporation Special Retention Plan (SRP) was developed specifically to retain and motivate key executives. Under the
SRP, and at the discretion of the Board, selected executives and the Managing Director may be offered a number of performance
rights (SRP Rights). There were no SRP Rights brought forward from prior years or issued during the year.
Ridley Employee Share Scheme (ESS)
Under the ESS, shares have historically been offered to permanent employees with a minimum of 12 months’ continuous service prior
to the offer date, at a discount of up to 50%, and financed by an interest-free loan secured against the shares. The maximum discount
per employee is limited to $1,000 annually in accordance with current Australian taxation legislation. Dividends on the ESS shares
are applied against the outstanding loan balance until such balance is fully extinguished. The amount of the discount and number of
shares allocated are at the sole discretion of the Board. The purpose of the ESS is to align employee and shareholder interests and to
foster a sense of loyalty and ownership in the Company. An offer under the Scheme was made in September 2021, such that 426,618
(2021: 831,390) shares were allocated to participating employees during the year, of which 300,000 (2021: 250,000) were purchased
on-market for an aggregate outlay excluding GST of $404,357 (2021: $206,830) and 126,618 (2021: 581,390) were allocated from the
RCL Retirement Pty Ltd account in which Company shares are accumulated upon the departure of ESS participant employees.
Shares purchased on-market
The following table reflects the number and total market value of shares that were allocated to participating employees under the
incentive plans during the financial year.
Incentive plan
Long Term Incentive Plan
Employee Share Scheme
Number of shares
Cash outlay $’000
2022
–
2021
–
2022
–
2021
–
426,618
831,390
404,357
206,830
31
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 REMUNERATION REPORT – AUDITED CONTINUED
Directors and Key Management Personnel
The following persons were the Directors and executives with the greatest authority for the strategic direction and management
of the Group (Key Management Personnel or KMP) throughout FY22 unless otherwise stated.
Name
Directors
M P McMahon
Q L Hildebrand
P M Mann
R J van Barneveld
E Knudsen
D J Lord
R Jones
Executives
R Betts
A Boyd
C Klem
H Slattery
R Singh
K Clarke
Position and status
Director and Chair
Managing Director and CEO
Director
Director
Director
Director
Director
KMP from 1 August 2022 and Chief Financial Officer from 25 August 2021
Chief Financial Officer and KMP to 25 August 2021
General Manager Rendering
General Manager Aquafeed
Chief Operating Officer
KMP and Company Secretary from 21 October 2021
32
Ridley Corporation Limited Annual Report 2022 Details of KMP remuneration
Details of the remuneration of each Director of Ridley Corporation Limited and each of the KMP of the Group during the financial
year are set out below. In accordance with the requirements of Section 300A of the Corporations Act 2001 and Regulation 2M.3.03,
the remuneration disclosures for the 2022 and 2021 financial years only include remuneration relating to the portion of the relevant
periods that each individual was considered a KMP. All values are in A$ unless otherwise stated. The salary package may be allocated
at the executive’s discretion to cash, superannuation (subject to legislative limits), motor vehicle and certain other benefits.
FY22 Remuneration table
2022
Short-term benefits
Post-
employ-
ment
benefits
Other
benefits
Share-
based
payments
Directors’
fees and
cash
salary
$
FY22
STI
$
Super-
annuation
$
Travel
allow-
ance
Perfor-
mance
Rights
$
Sub-total
$
Name
Directors
Share-
based
payments
reversal7
Perfor-
mance
Rights
$
Total
$
%1
%2
M P McMahon
163,864
–
16,386
Q L Hildebrand –
CEO and Managing
Director
P M Mann
R J van Barneveld3
E Knudsen3
D J Lord
R Jones3
672,500
453,250
27,500
88,955
97,850
87,550
88,955
87,550
–
–
–
–
–
8,895
–
–
8,895
–
Total Directors
1,287,224
453,250
61,676
493,140
279,325
21,604
71,848
37,732
3,615
340,541
136,175
27,500
Executives
R Betts4
A Boyd5
C Klem
R Singh
H Slattery
K Clarke6
–
–
–
–
–
–
–
–
–
–
–
–
180,250
–
180,250
–
–
441,585 1,594,835
– 1,594,835 28% 56%
–
–
–
–
–
97,850
97,850
87,550
97,850
87,550
–
–
–
–
–
97,850
97,850
87,550
97,850
87,550
–
–
–
–
–
–
–
–
–
–
441,585 2,243,735
– 2,243,735
108,689
902,758
-
902,758
12% 43%
16,295
129,490 (152,000)
129,490
13% 42%
91,964
596,180
(95,000)
596,180
15% 38%
352,500
152,000
27,500
1,822
49,510
583,332
272,727
93,000
27,273
–
55,114
448,114
–
–
583,332
8% 35%
448,114
12% 33%
229,371
92,753
22,937
35,571
380,632
380,632
9% 34%
Total executives
1,760,127
790,985
130,429
1,822
357,143 3,040,506 (247,000) 3,040,506
Total
3,047,351 1,244,235
192,105
1,822
798,728 5,284,241 (247,000) 5,284,241
1. Percentage remuneration consisting of Performance Rights / Options.
2. Percentage remuneration performance related.
3. Director fee paid to a company.
4. KMP from 1 August 2021.
5. KMP until 25 August 2021.
6. KMP from 30 August 2021.
7. The vesting criterion was not met for the FY19 tranche of rights.
33
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 REMUNERATION REPORT – AUDITED CONTINUED
Details of KMP remuneration continued
FY21 Remuneration table
2021
Short term benefits
Post
employ-
ment
benefits
Directors’
fees and
cash salary
$
Super-
annuation
$
STI
$
Other
benefits
$
Name
Directors
M P McMahon3
138,444
–
13,844
Q L Hildebrand – CEO
and Managing Director
P M Mann
R J van Barneveld4
E Knudsen4
D J Lord
R Jones3,4
G H Weiss – Chair5
675,000
453,250
25,000
88,955
97,850
87,550
88,955
73,968
27,311
–
–
–
–
–
–
8,895
–
–
8,895
–
2,731
Total Directors
1,278,033
453,250
59,365
Executives
A Boyd
C Klem
R Singh
469,246
246,000
343,041
147,000
22,620
25,000
347,781
129,000
34,545
H Slattery
272,727
111,000
27,273
Total executives
1,432,795
633,000
109,438
Total
2,710,828
1,086,250
168,803
1. Percentage remuneration consisting of performance rights / options.
2. Percentage remuneration performance related.
3. Appointed on 27 August 2020.
4. Director fee paid to a company.
5. Retired on 26 August 2020.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Share-
based
payments
Perfor-
mance
rights/
options
$
Total
$
–
152,288
% 1
–
% 2
–
373,811
1,527,061
24%
54%
–
–
–
–
–
–
97,850
97,850
87,550
97,850
73,968
30,042
373,811
2,164,459
166,548
904,414
101,033
616,074
24,755
536,081
19,543
430,543
311,879
2,487,112
685,690
4,651,571
–
–
–
–
–
–
18%
16%
5%
5%
–
–
–
–
–
–
46%
40%
29%
30%
34
Ridley Corporation Limited Annual Report 2022 Contracts of employment
Remuneration and other terms of employment for the Managing Director are formalised in a service agreement that includes provision
of performance-related bonuses and other benefits, and eligibility to participate in the Ridley LTIP, STI and ESS. Other major
provisions of the agreements relating to remuneration are set out below:
Q L Hildebrand, CEO and Managing Director
• Base remuneration, inclusive of superannuation and any elected benefits, of $700,000, to be reviewed annually each December
with any changes to be effective from the following 1 January.
• Full STI scheme participation up to 70% of total Base Package based on the achievement of certain agreed KPls as approved by the
Board, split 70% on consolidated Group EBITDA performance and 30% on personal KPls. The split of personal KPls for FY22 comprised
targets for safety (10%), quality (10%), operational excellence for optimisation of savings, sales growth, expansion/innovation
(10% each for aggregate 30%), capital recycling (20%), strategy development (20%) and corporate and social responsibility
progress (10%). The 70% of Ridley financial performance STI for FY22 is assessed solely against budgeted EBITDA before any
individually significant item(s).
• Eligible to participate in the Ridley LTIP and Ridley to use its best endeavours to obtain shareholder approval for the issue of equity
securities under the scheme. Shareholder approval was received on 24 November 2021 for the 1,045,173 performance rights issued
to Mr Hildebrand in FY22 with a performance test period from 1 July 2021 to 30 June 2024.
• Ridley may terminate the contract immediately for cause and with a 12-month period of notice without cause, being inclusive of
any redundancy benefits payable to the executive. Payment of termination benefits on early termination by the employer is not to
exceed the threshold above which shareholder approval is required under the Corporations Act 2001, and comprises any amount of
the total remuneration package accrued but unpaid at termination, plus accrued but unpaid leave entitlements, and any other
entitlements accrued under applicable legislation.
• The CEO’s contract of employment has no fixed term, and Ridley is able to terminate the contract by giving the CEO 12 months’
notice in writing. Conversely, the CEO may terminate his contract by giving the Company six months’ notice in writing. Ridley is able
to terminate the contract of employment without notice or payment in lieu if the CEO engages in fraud or other serious misconduct,
commits a serious or persistent breach of the contract, disobeys a lawful and reasonable direction of the Company, or is found guilty
of an offence precluding or inhibiting further performance of the duties of the CEO office.
Other senior executives have individual contracts of employment but with no fixed term of employment.
Notice periods
The notice period for terminating employment of KMP ranges from between three and six months for executives to 12 months for the
Managing Director.
35
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 REMUNERATION REPORT – AUDITED CONTINUED
Equity instrument disclosures relating to Directors and executives
Performance rights provided as remuneration
Details of Rights over ordinary shares in the Company issued under the Ridley LTIP as remuneration to the Managing Director
of Ridley Corporation Limited and each of the other KMP of the Group and are set out in the following table.
KMP LTIP Rights holdings
Recipient of LTIP rights
Year of grant
Granted1
Grant date
Fair value of Rights
at grant date
$
Directors
Q L Hildebrand3
Key Management Personnel
R Betts
C Klem2
R Singh
H Slattery
K Clarke
2020
2021
2022
2022
2020
2021
2022
2021
2022
2021
2022
2022
1,133,488
1,566,108
1,045,273
483,063
210,338
290,618
193,950
300,061
200,252
236,890
158,093
158,093
01 Sep 2019
01 Jul 2020
01 Jul 2021
01 Jul 2021
01 Sep 2019
01 Jul 2020
01 Jul 2021
01 Jul 2020
01 Jul 2021
01 Jul 2020
01 Jul 2021
01 Jul 2021
1,045,076
1,079,048
1,084,994
326,068
127,254
129,325
130,916
133,527
135,170
105,416
106,713
106,713
Total issued to Directors
and Key Management Personnel
5,976,228
4,510,220
1. The effective grant date was 1 July 2021. The fair value per Right at the grant date was $1.04 for Tranche A Rights after adjusting for the initial
assessment of the likelihood of exceeding the ROFE performance hurdle and $0.31 for Tranche B Rights, with each participant’s holding split
equally between the two Tranches A and B.
2. The vesting criterion was not met for the Rights that were tested as at 30 June 2021, and consequently 100% of these Rights were forfeited.
3. Shareholder approval was received on 24 November 2021 for the 1,045,273 performance rights granted to Mr Hildebrand on 23 November 2020.
36
Ridley Corporation Limited Annual Report 2022
KMP shareholdings
The numbers of shares in the parent entity held during the financial year by each Director of Ridley Corporation Limited and each
of the KMP of the Group who holds shares, including their personally related entities, are set out in the table below.
Number of shares held in Ridley Corporation Limited
Director/executive
M P McMahon
Q L Hildebrand
P M Mann
R J van Barneveld
E Knudsen
D J Lord
R Jones
Total Directors
R Betts
A Boyd1
C Klem
R Singh
H Slattery
K Clarke
Total executives
Total Key Management Personnel
1. KMP to 25 August 2021.
Balance at
1 July 2021
Acquired
during the year
Holding at date
of no longer
being a KMP
(Disposed)
during the year
Balance at
30 June 2022
541,750
323,323
99,044
83,053
703,286
134,275
115,000
1,999,731
–
–
–
–
–
–
–
–
–
91,227
–
–
–
–
–
–
–
–
–
1,200,000
750,326
–
22,500
–
1,972,826
3,982,557
–
–
–
–
(1,200,000)
–
–
–
91,227
91,227
(1,200,000)
(1,200,000)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
541,750
323,323
99,044
83,053
703,286
134,275
115,000
1,999,731
91,227
–
750,326
–
22,500
–
864,053
2,873,784
37
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 AUDITOR’S INDEPENDENCE DECLARATION
38
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Ridley Corporation Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Ridley Corporation Limited for the financial year ended 30 June 2022 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. KPMG Julie Carey Partner Melbourne 18 August 2022 Ridley Corporation Limited Annual Report 2022 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended 30 June 2022
Revenue from continuing operations
Cost of sales
Gross profit
Finance income
Other income
Expenses from continuing operations:
Selling and distribution
General and administrative
Finance costs
Profit from continuing operations before income tax expense
Income tax (expense)
Profit from continuing operations after income tax
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Total comprehensive income for the year attributable to:
Ridley Corporation Limited
Earnings per share
Basic earnings per share
Basic earnings per share – before individually significant items
Diluted earnings per share
Diluted earnings per share – before individually significant items
I
N
T
R
O
D
U
C
T
O
N
I
I
L
O
C
A
T
O
N
S
&
S
E
C
T
O
R
S
I
C
H
A
R
A
N
D
M
A
N
A
G
N
G
I
’
I
D
R
E
C
T
O
R
S
J
O
N
T
R
E
V
E
W
I
I
Note
4
2022
$’000
1,049,086
2021
$’000
927,719
(949,523)
(848,694)
99,563
79,025
5(b)
4
5
5(b)
6
1
1
1
1
–
13,045
(13,632)
(35,673)
(2,849)
60,454
(18,024)
42,430
21
4,917
(14,090)
(30,303)
(4,530)
35,040
(10,144)
24,896
–
–
42,430
24,896
42,430
24,896
I
F
V
E
Y
E
A
R
S
U
M
M
A
R
Y
13.3c
11.3c
12.8c
10.9c
7.8c
7.8c
7.6c
7.6c
I
I
S
U
S
T
A
N
A
B
L
T
Y
R
E
V
E
W
I
I
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
B
O
A
R
D
O
F
D
R
E
C
T
O
R
S
I
I
I
F
N
A
N
C
A
L
R
E
P
O
R
T
C
O
R
P
O
R
A
T
E
D
R
E
C
T
O
R
Y
I
39
Ridley Corporation Limited Annual Report 2022
CONSOLIDATED BALANCE SHEET
As at 30 June 2022
Current assets
Cash and cash equivalents
Receivables
Inventories
Assets held for sale
Total current assets
Non-current assets
Receivables
Property, plant and equipment
Intangible assets
Deferred tax asset
Total non-current assets
Total assets
Current liabilities
Payables
Provisions
Tax liability
Total current liabilities
Non-current liabilities
Payables
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Retained earnings
Total equity
Note
2022
$’000
2021
$’000
7
8
9
10
8
11
12
14
15
16
14
15
17
16
18
19
19
27,078
133,126
117,131
–
277,335
–
246,902
74,972
8,157
330,031
607,366
206,626
15,112
11,860
233,598
7,374
50,000
364
57,738
291,336
39,904
113,561
81,947
46,078
281,490
1,446
244,802
75,892
9,431
331,571
613,061
169,752
17,319
5,858
192,929
9,262
123,000
325
132,587
325,516
316,030
287,545
225,114
3,146
87,770
316,030
225,114
1,706
60,725
287,545
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
40
Ridley Corporation Limited Annual Report 2022 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2022
2022
Opening balance at 1 July 2021
Profit for the year
Other comprehensive (loss)/income
Total comprehensive (loss)/income for the year
Transactions with owners recognised directly in equity:
Transfer to retained earnings
Dividends paid/declared
Share-based payment transactions
Total transactions with owners recognised directly in equity
Share capital
$’000
Share-based
payments
reserve
$’000
225,114
1,706
–
–
–
–
–
–
–
–
–
–
(1,868)
–
3,308
1,440
3,146
Balance at 30 June 2022
225,114
2021
Share capital
$’000
Share-based
payments
reserve
$’000
Opening balance at 1 July 2020
223,521
1,843
Profit for the year
Other comprehensive (loss)/income
Total comprehensive (loss)/income for the year
Transactions with owners recognised directly in equity:
Issue of share capital
Transfer to retained earnings
Share-based payment transactions
Total transactions with owners recognised directly in equity
Balance at 30 June 2021
–
–
–
1,593
–
–
1,593
225,114
–
–
–
–
(1,656)
1,519
(137)
1,706
Retained
earnings
$’000
60,725
42,430
–
Total
$’000
287,545
42,430
–
42,430
42,430
1,868
(17,253)
–
(15,385)
87,770
–
(17,253)
3,308
(13,945)
316,030
Retained
earnings
$’000
34,173
24,896
–
24,896
–
1,656
–
1,656
60,725
Total
$’000
259,537
24,896
–
24,896
1,593
–
1,519
3,112
287,545
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
41
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2022
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Other income received
Net interest and other costs of finance paid
Income tax payments
Net cash from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Proceeds/(Payments) for intangibles
Proceeds from sale of non-current assets
Net cash from/(used) in investing activities
Cash flows from financing activities
Purchase of shares for share-based payments
(Repayment of) borrowings
Dividends paid
Payment of lease liabilities
Net cash used in financing activities
Net movement in cash held
Cash at the beginning of the financial year
Note
2022
$’000
2021
$’000
1,141,706
(1,082,482)
1,015,093
(924,824)
334
(2,224)
(10,746)
46,588
(23,797)
88
60,072
36,363
(431)
(73,021)
(17,054)
(5,271)
(95,777)
1,200
(3,986)
(1,705)
85,778
(19,364)
(2,433)
5,362
(16,435)
(207)
(70,000)
–
(5,050)
(75,257)
(12,826)
(5,914)
39,904
45,818
2
27 (iii)
Cash at the end of the financial year
7
27,078
39,904
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
42
Ridley Corporation Limited Annual Report 2022 INDEX OF NOTES
To and Forming Part of the Financial Report
1. Earnings per share
2. Dividends
3. Operating segments
4. Revenue and other income
5. Expenses
6.
Income tax expense
7. Cash and cash equivalents
8. Receivables
9.
Inventories
10. Assets held for sale
11. Property, plant and equipment
12. Intangible assets
13. Investments accounted for using the equity method
14. Tax assets and liabilities
15. Payables
16. Provisions
17. Borrowings
18. Share capital
19. Reserves and retained earnings
20. Investment in controlled entities
21. Parent entity
22. Deed of Cross Guarantee
23. Related party disclosures
24. Share-based payments
25. Retirement benefit obligations
26. Financial risk management
27. Leases
28. Commitments for expenditure
29. Contingent liabilities
30. Events occurring after the balance sheet date
31. Auditor’s remuneration
32. Corporate information and accounting policy summary
43
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 NOTES TO THE FINANCIAL STATEMENTS
30 June 2022
Note 1 – Earnings per share
Basic/Diluted earnings per share
Basic/Diluted earnings per share – before Individually Significant Items
2022
Basic
$’000
42,430
36,177
Diluted
$’000
42,430
36,177
Earnings used in calculating earnings per share:
Profit after income tax
Profit after income tax before individually significant items
Weighted average number of shares used in calculating:
Basic earnings per share
Diluted earnings per share
Basic earnings per share
2022
Cents
13.3/12.8
11.3/10.9
2021
Basic
$’000
24,896
24,896
2021
Cents
7.8/7.6
7.8/7.6
Diluted
$’000
24,896
24,896
2022
2021
319,494,975
318,910,291
331,920,423
325,408,326
Basic earnings per share is calculated by dividing the profit attributable to shareholders of the Company, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares on issue during the financial year.
There were no Ridley shares issued in FY22. 2,063,420 Ridley shares were issued in FY21 as consideration for the FY20 STI award.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Based on the vesting conditions and exercise price, as at 30 June 2022 there are 12,425,448 (30 June 2021: 6,498,035) dilutive
potential ordinary shares outstanding based on the hypothetical vesting of Performance Rights on issue as at 30 June 2022 as
detailed in the Remuneration Report.
44
Ridley Corporation Limited Annual Report 2022 Note 2 – Dividends
Dividends paid
during the year
Franking
Payment date
Per share
(cents)
2022
$’000
2021
$’000
Interim dividend
Fully franked
Final dividend
Fully franked
2022: 3.4 cents per share and
paid on 29 April 2022 (2021: nil)
2022: 2 cents per share and
paid on 29 October 2021 (2021: nil)
Paid in cash
Non-cash dividends paid applied to employee in-substance option loan balances
Since the end of the financial year, the Board has declared
the following with respect to the FY22 final dividend
3.4 (2021: nil)
10,863
2.0 (2021: nil)
6,390
17,253
17,054
199
17,253
2022
$’000
–
–
–
–
–
2021
$’000
Following a year of strong operating performance, cash generation and debt retirement in FY22,
the Board has declared a final dividend of 4 cents per share (cps), fully franked and payable on
Thursday 27 October 2022
Amount of franking credits available at 30 June to shareholders of Ridley Corporation Limited
for subsequent financial years (prior to the above dividend declaration)
12,779
6,390
20,435
17,525
Note 3 – Operating segments
The Group determines and presents operating segments based on information that internally is provided to and used by the Managing
Director, who is the Group’s Chief Operating Decision Maker (CODM).
Segment results reported to the Managing Director include items directly attributable to a segment, as well as those that can be
allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, head office expenses, borrowings, income tax
assets and liabilities and surplus property asset holding costs. Segment capital expenditure is the total cost incurred during the period
to acquire property, plant and equipment and intangible assets other than goodwill.
In accordance with the organisational structure and internal reporting to the CODM arising from 1 July 2020 Ridley has adopted the
following segment reporting:
• Packaged Feeds and Ingredients – comprising the Group’s premium quality, high-performance animal nutrition feed and ingredient
solutions delivered in packaged form ranging from one-tonne bulka bag down to 3kg bags, and includes the Aquafeed and
Extrusion Business Unit.
• Bulk Stockfeeds – comprising the Group’s premium quality, high-performance animal nutrition stockfeed solutions delivered in bulk.
The basis of inter-segmental transfers is market pricing. The non-operating, unallocated component in the segment reporting tables
represents mainly corporate expenses, interest-bearing loans, borrowings and corporate assets, plus any residual surplus property
asset holding costs.
45
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 3 – Operating segments continued
Geographical locations
While the Group predominantly operates in Australasia, it has established a platform for Novacq™ commercial operations at Chanthaburi,
Thailand. From 1 July 2020 the site became fully operational and has been reported through the profit and loss since that date.
In addition to Thailand, legal entities have not traded but have been established in India and Ecuador in anticipation of an international
expansion of Novacq™ operations, commencing with commercial trials.
2022 financial year in $’000
Total income (Note 4)
EBITDA before significant items
Depreciation and amortisation expense (Note 5(a))
Finance costs (Note 5(b))
Reportable segment profit/(loss) before income tax
and individually significant items
Individually significant items
Reportable segment profit/(loss) before income tax
Total segment assets
Segment liabilities
Acquisitions of assets1
2021 financial year in $’000
Total income (Note 4)
EBITDA before significant items
Depreciation and amortisation expense (Note 5(a))
Finance costs (Note 5(b))
Reportable segment profit/(loss) before income tax
and individually significant items
Individually significant items
Reportable segment profit/(loss) before income tax
Total segment assets
Segment liabilities
Acquisitions of assets1
1. Acquisitions include property, plant and equipment and intangibles.
Bulk
Stockfeeds
Packaged/
Ingredients
695,399
353,688
Unallocated
Consolidated
34,363
(15,649)
–
18,715
–
18,714
280,233
(161,468)
11,424
58,014
(10,109)
–
(12,233)
(17)
(2,849)
47,905
(15,099)
8,934
(6,166)
57,315
–
47,905
269,816
(66,431)
12,416
(63,437)
(291,336)
4,102
23,845
1,049,086
80,144
(25,775)
(2,849)
51,521
8,934
60,453
607,365
Bulk
Stockfeeds
Packaged/
Ingredients
Unallocated
Consolidated
613,236
32,481
(16,271)
–
16,210
–
16,210
258,618
(132,316)
13,304
315,226
46,507
(13,342)
–
33,165
–
33,165
305,374
(60,086)
18,604
4,174
(9,838)
(16)
(4,509)
(14,363)
28
(14,335)
49,069
(133,114)
–
932,636
69,150
(29,629)
(4,509)
35,012
28
35,040
613,061
(325,516)
31,908
46
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 Note 4 – Revenue and other income
Revenue from continuing operations
Sale of goods
Other income from continuing operations
Rent received
Gain on sale of assets held for sale
Gain on sale of property, plant and equipment
Credit card fees
Other
Other income from continuing operations
Total revenue by geographical segment
Australia
Thailand
2022
$’000
2021
$’000
1,049,086
927,719
70
12,266
–
122
586
13,045
61
3,674
43
160
979
4,917
2022
$’000
2021
$’000
1,062,131
932,636
–
–
1,062,131
932,636
Revenue recognition
For the sale of feed, the Group generally has one performance obligation. Consequently, revenue is currently recognised when the
feed is either collected from the Ridley premises or delivered to the customers’ premises, which are taken to be the points in time at
which the customer accepts the feed and the performance obligation has been met when the control transfers. Revenue is recognised
at these points, depending on agreed terms, provided that the revenue and costs can be measured reliably, the recovery of the
consideration is probable and there is no continuing management involvement with the goods.
Interest income is recognised using the effective interest rate method. Dividend income is recognised as revenue when the right
to receive payment is established.
Note 5 – Expenses
Profit from continuing operations before income tax is arrived at after charging the following individually significant items:
(a) Depreciation and amortisation(i)
Buildings
Plant and equipment
Software
Intangible assets
Right of use assets
2022
$’000
2,098
18,220
592
240
4,624
25,775
2021
$’000
2,548
20,783
1,302
240
4,756
29,629
(i) The depreciation and amortisation charge is included either as cost of goods sold or within general and administrative expenses in the Consolidated
Statement of Comprehensive Income, depending on the use of the asset.
47
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 5 – Expenses continued
(b) Finance costs
Interest expense
Interest expense on lease liabilities
Amortisation of borrowing costs
Interest income
Unwind of discount on deferred consideration
2022
$’000
2,224
484
141
–
–
2,849
2021
$’000
4,314
393
160
(21)
(337)
4,509
Finance costs include interest and amortisation of ancillary costs incurred in connection with the arrangement of borrowings.
Borrowing costs are expensed as incurred unless they relate to qualifying assets, being assets that normally take more than 12 months
from commencement of activities necessary to prepare for their intended use or sale to the time when substantially all such activities
are complete.
(c) Other expenses
Employee benefits expense
Expenses relating to short-term leases and low-value assets
Impairment loss on trade receivables – net of recoveries
Foreign exchange loss
Loss on disposal of property, plant and equipment
Research and development
(d) Individually Significant Items on a pre-tax basis:
Software-as-a-Service change in accounting policy
Closure of Novacq™ Yamba site
Restructuring of Thailand entity
Total Individually Significant Items – losses included in general and administrative expenses
Gain on sale of surplus land assets at Lara and Moolap
Gain on sale of Westbury extrusion plant
Gain on sale of former feedmills at Bendigo, Mooroopna and Murray Bridge
Total Individually Significant Items – (gains) included other income
Net Individually Significant Items – losses/(gains)
2022
$’000
83,032
713
59
174
70
2021
$’000
81,457
779
–
795
132
10,739
17,166
2022
$’000
2,260
836
237
3,334
2021
$’000
3,646
–
–
3,646
–
(3,674)
(6,032)
(6,234)
(12,266)
(8,933)
–
–
(3,674)
(28)
48
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 Note 6 – Income tax expense
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the income tax
rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the
tax bases of assets and liabilities and their carrying amounts in the financial statements, and by unused tax losses.
Ridley Corporation Limited and its wholly-owned Australian controlled entities are part of a tax consolidated group. The entities in the
tax consolidated group are party to a tax sharing agreement, which limits the joint and several liability of the wholly-owned entities in
the case of a default by the head entity, Ridley Corporation Limited. The agreement provides for the allocation of income tax liabilities
between the entities should Ridley Corporation Limited default on its tax payment obligations. At balance date the possibility of default
is considered to be remote.
(a) Income tax expense
Current tax
Deferred tax
Under/(Over) provided in prior year
Aggregate income tax expense
Income tax expense is attributable to:
Profit from continuing operations
(b) Income tax recognised directly in equity
2022
$’000
15,976
1,275
773
18,024
2021
$’000
7,260
3,133
(249)
10,144
18,024
10,144
Aggregate current and deferred tax arising in the period and not recognised in net
comprehensive income but directly debited or (credited) to equity
–
–
(c) Reconciliation of income tax expense and pre-tax accounting profit
Consolidated group profit before income tax expense
Income tax expense using the Group’s tax rate of 30%
Tax effect of amounts that are not deductible/(taxable) in calculating taxable income:
Non-deductible expenses
Underprovision/(Overprovision) in prior year
Research and development allowance
Accounting gain on disposal of sale of properties
Capital gain on disposal of sale of properties
Tax effect of overseas losses
Other
Income tax expense
60,453
18,136
35,040
10,512
1
773
(913)
(3,756)
3,644
–
138
91
(249)
(1,459)
(1,077)
1,103
490
733
18,024
10,144
49
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 7 – Cash and cash equivalents
Cash and cash equivalents comprise cash balances in Australian dollars and foreign currencies.
Cash at bank
Reconciliation of net cash inflow from operating activities to profit after income tax
Net profit after tax for the year
Adjustments for non-cash items:
Depreciation and amortisation (Note 5(a))
Net gain on sale of non-current assets
Non-cash share-based payments expense (Note 24)
Non-cash finance movements
Impairment loss on trade receivables
Other non-cash movements
Change in operating assets and liabilities:
Decrease/(increase) in prepayments
Decrease/(increase) in receivables
Decrease/(increase) in inventories
Decrease/(increase) in deferred income tax asset
Increase in trade creditors
Increase/(decrease) in provisions
Increase in net income tax liability
Net cash from operating activities
Note 8 – Receivables
Current
Trade debtors
Less: Allowance for impairment loss on trade receivables (a)
Derivative assets (b)
Prepayments and other receivables
Lara land sale deferred consideration receivable
Non-current
Prepayments
Lara land sale deferred consideration receivable
50
2022
$’000
27,078
2022
$’000
42,430
25,775
(12,520)
3,540
625
–
(2)
(2,712)
(19,256)
(35,184)
1,276
36,714
(100)
6,002
46,588
2022
$’000
127,975
(144)
127,831
58
5,237
–
2021
$’000
39,904
2021
$’000
24,896
29,629
(3,717)
1,726
522
(32)
(168)
3,221
(6,234)
22,154
3,133
5,836
(662)
5,474
85,778
2021
$’000
108,764
(86)
108,678
338
2,245
2,300
133,126
113,561
–
–
–
96
1,350
1,446
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less the provision for impairment
loss. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off.
Under the requirements of AASB 9, the Group adopts a forward-looking credit loss (ECL) approach, whereby the Group records an
allowance for ECLs for all loans and other debt financial assets, including trade and other receivables. For trade and other receivables,
the Group applies the standard’s simplified approach and calculated ECLs based on lifetime expected credit losses. The Group has
established a provision matrix that is based on the Group’s historical credit loss experience, adjusted for forward-looking factors specific
to the debtors and the economic environment. A provision has been recognised, determined with reference to forward-looking ECL.
(a) Movement in the allowance for impairment loss:
Balance brought forward at 1 July
Provision raised during the year
Receivables written off during the year
Balance carried forward at 30 June
2022
$’000
86
81
(23)
144
2021
$’000
118
52
(84)
86
As at 30 June 2022, a provision for impairment loss of $143,671 (2021: $86,026) was raised against trade receivables. This is
considered to be adequate provision against the balance of any overdue receivables to the extent they are not covered by collateral
and/or credit insurance. Based on historic default rates and having regard to the ageing analysis referred to immediately below, the
Group believes that, apart from those trade receivables that have been impaired, no further impairment allowance is necessary in
respect of trade receivables not past due or past due by up to 30 days, as receivables relate to customers that have a good payment
record with the Group.
The Group’s policy is to write off debts when there is no longer a reasonable expectation of recovery. Debts that are written off are
still subject to enforcement activity. Any write-off of debt is presented to and approved by the Audit and Risk Committee.
Concentration of risk
Within the trade debtors ledger at 30 June 2022, the top five customer balances represent 43% (2021: 39%) of the total, and the top
20 represent 70% (2021: 69%).
Ageing analysis
At 30 June 2022, the age profile of trade receivables that were past due amounted to $4.3m (2021: $4.6m) as shown in the
following table.
The ageing analysis of trade receivables is shown as follows:
Past due by 1–30 days
Past due by 31–60 days
Past due by 61–90 days
Past due by greater than 90 days
(b) Derivative assets
2022
$’000
3,037
700
220
340
4,297
2021
$’000
3,738
457
239
130
4,564
Represents the fair value of the mark to market unrealised gain on forward futures contracts used to hedge the fair value risk associated
with the purchase of raw materials (Note 32(v)(b)).
51
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 9 – Inventories
Current
Raw materials
– at cost
Finished goods
– at cost
– at net realisable value
2022
$’000
71,308
29,605
16,218
117,132
2021
$’000
41,756
31,909
8,282
81,947
Inventory included in cost of goods sold equals $949.5m for FY22 (FY21 $848.7m). Included in this number are write-downs
of inventories to net realisable value of $0.6m (2021: $0.2m).
Inventories are valued at the lower of cost and net realisable value. Costs are determined on the first in, first out and weighted average
cost methods. Costs included in inventories consist of materials, labour and manufacturing overheads that are related to the purchase
and production of inventories. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
costs of completion and selling expenses.
Note 10 – Assets held for sale
Assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than
through continuing use. They are measured at the lower of their carrying amount and fair value less costs to sell. Assets (including
those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale.
Westbury extrusion plant
Murray Bridge, Bendigo and Mooroopna sites
Assets held for sale
2022
$’000
–
–
–
2021
$’000
45,278
800
46,078
The Westbury extrusion plant was subject to a sale agreement that became unconditional on 9 July 2021, and was reclassified
as a current asset held for sale as at 30 June 2021 at its carrying value of $45.3m. The sale was completed on 2 August 2021
and a pre-tax profit of $6.0m reported as an Individually Significant Item (Note 5(d)).
The former feedmills at Murray Bridge, Bendigo and Mooroopna, which had a net carrying value of $0.8m as at 30 June 2021, were
sold in FY22 for gross proceeds of $5.0m and a pre-tax aggregate gain on sale of $6.2m, including the reversal in full of the unutilised
balance of the prior year restructuring provision of $2.1m, which has been reported as an Individually Significant item (Note 5(d)).
52
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022
Note 11 – Property, plant and equipment
2022 in $’000
Cost at 1 July 2021
Accumulated depreciation
Carrying amount at 1 July 2021
Additions
Transfers
Other lease movements
Disposals
Depreciation
Carrying amount at 30 June 2022
At 30 June 2022
Cost
Accumulated depreciation
Carrying amount at 30 June 2022
2021 in $’000
Cost at 1 July 2020
Accumulated depreciation
Carrying amount at 1 July 2020
Additions
Transfers
Reversals of impairment
Other lease movements
Disposals
Reclassification to current assets held
for sale
Depreciation
Carrying amount at 30 June 2021
At 30 June 2021
Cost
Accumulated depreciation
Carrying amount at 30 June 2021
Property, plant and equipment
(2,098)
70,380
(18,220)
133,629
Land and
buildings
85,338
(13,326)
72,012
185
281
–
–
85,804
(15,424)
70,380
Land and
buildings
100,835
(13,031)
87,804
–
3,022
335
–
(1,472)
(15,129)
(2,548)
72,012
85,338
(13,326)
72,012
Plant and
equipment
Capital work
in progress
Right of use
assets
313,341
(167,768)
145,573
15
6,261
–
–
319,617
(186,988)
133,629
13,973
–
13,973
23,746
(6,542)
–
–
–
31,177
31,177
–
31,177
22,871
(9,627)
13,244
3,251
–
(154)
–
(4,624)
11,717
25,968
(14,251)
11,717
Plant and
equipment
Capital work
in progress
Right of use
assets
356,068
(171,882)
184,186
–
14,815
15
–
(1,711)
(30,949)
(20,783)
145,573
313,341
(167,768)
145,573
12,315
–
12,315
19,495
(17,837)
–
–
–
–
–
13,973
13,973
–
13,973
13,699
(4,871)
8,828
9,286
–
–
(114)
–
–
(4,756)
13,244
22,871
(9,627)
13,244
Total
435,523
(190,721)
244,802
27,197
–
(154)
–
(24,942)
246,902
462,566
(215,663)
246,902
Total
482,917
(189,784)
293,133
28,781
–
350
(114)
(3,183)
(46,078)
(28,087)
244,802
435,523
(190,721)
244,802
Land and buildings and plant and equipment are stated at cost, or deemed cost, less accumulated depreciation and impairment.
Cost includes expenditure that is directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s
carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted
for as a separate asset is derecognised when replaced. All repairs and maintenance are charged to the Consolidated Statement of
Comprehensive Income during the financial period in which they are incurred.
Land is not depreciated. Depreciation of other assets is calculated using the straight-line method to allocate their cost or revalued
amounts, net of their residual values, over their estimated useful lives, being 13-40 years for buildings and two to 30 years for
plant and equipment.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Gains and losses
on disposals are determined by comparing proceeds with carrying amounts and are included in the Consolidated Statement of
Comprehensive Income.
53
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 12 – Intangible assets
2022 in $’000
Software
Goodwill
Contracts
Carrying amount at 1 July 2021
1,412
68,951
1,688
Additions
Disposals
Amortisation charge
Carrying amount at 30 June 2022
At 30 June 2022
Cost
Accumulated amortisation and impairment
Carrying amount at 30 June 2022
–
(2)
(592)
818
18,093
(17,275)
818
–
–
–
68,951
69,904
(953)
68,951
–
–
(736)
952
2,685
(1,733)
952
2021 in $’000
Software
Goodwill
Contracts
Carrying amount at 1 July 2020
2,684
68,950
Additions
Disposals
Amortisation charge
Carrying amount at 30 June 2021
At 30 June 2021
Cost
Accumulated amortisation and impairment
Carrying amount at 30 June 2021
30
–
(1,302)
1,412
18,095
(16,683)
1,412
–
–
–
68,950
69,903
(953)
68,950
1. Reflected in profit and loss as a reduction in revenue rather than amortisation charge.
382
2,000
–
(694)1
1,688
2,685
(997)
1,688
Assets under
development
3,842
650
–
(240)
4,251
4,997
(746)
4,251
Assets under
development
2,985
1,097
–
(240)
3,842
4,347
(505)
3,842
Total
75,892
650
(2)
(1,568)
74,972
95,678
(20,706)
74,972
Total
75,001
3,127
–
(2,236)
75,892
95,030
(19,138)
75,892
The amortisation charge is included within general and administrative expenses in the Consolidated Statement of Comprehensive Income.
Intangible assets
(i) Software
Capitalised intangible software, excluding Software-as-a-Service (Note 32(xi)), has a finite useful life and is carried at cost less
accumulated amortisation and impairment losses. The cost of system development, including purchased software, is capitalised
and amortised over the estimated useful life, being three to eight years. Amortisation methods, useful lives and residual values
are reviewed at each financial year end and adjusted if appropriate.
(ii) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of
the acquired subsidiary or associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets.
Goodwill on acquisitions of associates is included in investments in associates, accounted for using the equity method. Goodwill acquired
in business combinations is not amortised. Instead, goodwill is tested for impairment annually or more frequently if events or changes
in circumstances indicate that it might be impaired.
Goodwill is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold. Goodwill is allocated to cash generating units for the purpose of impairment testing.
Goodwill is not amortised.
$56.6m (2021: $56.6m) of goodwill has been recognised in the Packaged Feeds and Ingredients Cash Generating Unit (CGU),
while the balance has been accumulated from a combination of other CGUs over many years as summarised below:
Packaged Feeds and Ingredients
Bulk Stockfeed
Total goodwill
54
2022
$’000
56,616
12,334
68,950
2021
$’000
56,616
12,334
68,950
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 (iii) Contracts
Amortisation methods, useful lives and residual values are and were reviewed at each financial year end and adjusted if appropriate.
Contracts are amortised as a reduction in revenue.
(iv) Assets under development
Assets under development as at 30 June 2022 comprised the cumulative value of the five-year Novacq™ alliance with CSIRO under
which the Group contributed $1.0m per annum and CSIRO an equivalent value in kind. In June 2022, Ridley and CSIRO agreed to extend
the relationship for a further one year without any additional cost to Ridley.
Research and development expenditure
Research and development (R&D) expenditure of $10,738,703 has been incurred in the current year (2021: $17,166,452), which is
expected to be included as eligible R&D in the R&D tax incentive schedule for FY22. Expenditure on research activities, undertaken
with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the Consolidated Statement
of Comprehensive Income as incurred.
Development activities involve a plan or design for the production of new or substantially improved products and processes.
Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically
and commercially feasible, future economic benefits are probable, and the Group intends, and has sufficient resources, to complete
development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour and overhead costs
that are directly attributable to preparing the asset for its intended use. Capitalised development expenditure is measured at cost
less accumulated depreciation and accumulated impairment losses as part of either intangibles or property, plant and equipment.
Amortisation
Amortisation is calculated to write off the cost of the intangible assets less their residual values using the straight-line method over
their estimated useful lives, and is generally recognised in profit or loss.
Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently
if events or changes in circumstances indicate that the carrying amount may no longer be recoverable. An impairment loss is recognised
for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an
asset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
flows, which are largely independent of the cash inflows from other assets or groups of assets (cash generating units). Non-financial
assets other than goodwill that have previously suffered impairment are reviewed for possible reversal of the impairment at each
reporting date.
Impairment testing
The recoverable amount of a CGU is initially assessed using value-in-use calculations. The following assumptions have been used
in the preparation of the cash flow projections and analyses to undertake impairment testing, and have been applied to each CGU
unless otherwise stated.
(i) Cash flow projections are based on the Board-approved FY23 budget, with the projections for the subsequent four years based
on either (a) specific forecasts; or (b) projected using a constant growth rate. A terminal value is also included in the calculation
of the value in use.
(ii) Forecast growth rates are based on management’s expectations of future performances for the respective CGUs having regard
to industry growth rates and factors specific to the Group. Excluding the Extrusion and Novacq™ CGUs (forming part of Packaged
Feeds and Ingredients), the Group applied a constant growth rate of 2% (FY21: 2%) to the period beyond FY23, and also adopted
a growth rate of 2% (FY21: 2%) in the calculation of the terminal value. Growth rates for Extrusion and Novacq™ vary for each
year in the forecast period, with Extrusion influenced by factors such as the improvement in production efficiency at Narangba,
and Novacq™ by the expansion of commercial production of, and into international markets for, Novacq™. A terminal growth rate
of 2% (FY21: 2%) has been applied to both the Extrusion and Novacq™ CGUs.
(iii) Discount rates used are the weighted average cost of capital for the Group, adjusted as appropriate for the specific CGU.
The post-tax discount rate applied to forecast cash flows was 8.0% (2021: 8.0%) except for the Novacq™ CGU, where 10%
was adopted to reflect the stage of its commercial lifecycle.
55
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 12 – Intangible assets continued
Impairments during the year
There have been no impairments raised in either FY22 or FY21.
Impact of possible changes in key assumptions
A 0.5 percentage point increase in the discount rate or a 0.5 percentage point reduction in the terminal growth rate would not cause
the carrying value of any CGU to exceed its recoverable amount. However, the future cash flow projections for Extrusion is reliant
on the improvement in production efficiency at Narangba, and the expansion of commercial production of, and volume of sales into
international markets for, Novacq™.
Note 13 – Investments accounted for using the equity method
Name of company
Joint venture entities:
Nelson Landholdings Pty Ltd as
Trustee for Nelson Landholdings Trust1
Principal activity
Country of
incorporation
2022
%
2021
%
2022
$’000
2021
$’000
Ownership interest
Carrying amount
Property realisation
Australia
–
50
–
–
1. The Company and Unit Trust were the corporate structure through which any ultimate development of the Moolap site was to be managed. Given the sale
of the investment property at Moolap, which was the subject of the development, the joint venture entities were de-registered during FY22.
Note 14 – Tax assets and liabilities
Current
Tax asset
Tax liability
Non-current
Deferred tax asset
Movement in deferred tax asset:
Opening balance at 1 July
(Charged)/Credited to the Consolidated Statement of Comprehensive Income
Closing balance at 30 June
Recognised deferred tax assets and liabilities
2022
$’000
–
11,860
2021
$’000
–
5,858
8,155
9,431
9,431
(1,276)
8,155
12,564
(3,133)
9,431
Consolidated balances
Intangibles
Doubtful debts
Property, plant and equipment
Employee entitlements
Provisions
Other
Tax assets/(liabilities)
Assets
Liabilities
Net
2022
$’000
1,577
43
1,823
4,718
707
–
8,869
2021
$’000
1,785
26
2,100
4,633
928
–
9,472
2022
$’000
(314)
(12)
–
–
–
(388)
(714)
2021
$’000
–
–
–
–
–
(41)
(41)
2022
$’000
1,263
31
1,823
4,718
707
(388)
8,155
2021
$’000
1,785
26
2,100
4,633
928
(41)
9,431
56
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 Movement in net deferred tax assets and liabilities
Balance
30 June 2020
$’000
Recognised
in FY21
profit or loss
$’000
Balance
30 June 2021
$’000
Recognised
in FY22
profit or loss
$’000
Balance
30 June 2022
$’000
372
36
5,676
4,869
862
749
12,564
1,413
(10)
(3,576)
(236)
66
(790)
(3,133)
1,785
26
2,100
4,633
928
(41)
9,431
(522)
5
(277)
85
(221)
(347)
(1,276)
1,263
31
1,823
4,718
707
(388)
8,155
Consolidated movements
Intangibles
Doubtful debts
Property, plant and equipment
Employee entitlements
Provisions
Other
Tax assets/(liabilities)
Income tax
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets
are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted for each jurisdiction.
The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred
tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability.
No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than
a business combination, that at the time of the transaction did not affect either accounting profit or taxable comprehensive income.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for
temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is
able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the
foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the
entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously. Deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Note 15 – Payables
Current
Trade creditors and accruals
Other financial liability – trade payables facility
Lease liabilities
Non-current
Lease liabilities
Trade Payables Facility
2022
$’000
2021
$’000
152,209
49,997
4,420
206,626
115,491
50,000
4,261
169,752
7,374
9,262
The Group has a trade payable facility that is an unsecured funding arrangement for the purposes of funding trade related payments
associated with the purchase of various raw materials from approved suppliers. Trade bills of exchange are paid by the facility direct
to the importer and the Group pays the facility on 180-day terms within an overall facility limit of $50,000,000 (2021: $50,000,000).
The amount utilised and recorded within trade creditors at 30 June 2022 was $49,996,948 (2021: $50,000,000).
57
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 16 – Provisions
Current
Provision for restructuring
Employee entitlements
Non-current
Employee entitlements
Provisions
2022
$’000
–
15,112
15,112
2021
$’000
2,449
14,870
17,319
364
325
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined
by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money
and the risks specific to the liability.
(i) Provision for restructuring
The provision for restructuring comprised all of the estimated costs of employee termination benefits, asset relocation, site closure,
demolition, remediation and preparation for divestment with regard to the Murray Bridge, Bendigo and Mooroopna former feedmills.
Following the sale of all three sites in FY22, the unutilised balance of the provision of $2.0m was written back to the overall gain on
sale reported as an Individually Significant Item in Note 5(d).
(ii) Provision for employee entitlements
Current liabilities for wages and salaries, including non-monetary benefits, short-term incentive payments, annual leave, accumulating
sick leave and long service leave expected to be settled within 12 months of the reporting date, are recognised in accruals and provisions
for employee entitlements in respect of employees’ services up to the reporting date, and are measured at the amounts expected to
be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured
at the rates paid or payable. Employee benefit on-costs, including payroll tax, are recognised and included in both employee benefit
liabilities and costs.
The non-current liability for long service leave expected to be settled more than 12 months from the reporting date is measured
as the present value of expected future payments to be made in respect of services provided by employees up to the reporting
date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the reporting date on high-quality corporate bonds with terms to
maturity and currency that match, as closely as possible, the timing of estimated future cash outflows.
Superannuation
Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions
are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
58
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 Note 17 – Borrowings
Non-current
Bank loans (unsecured)
Total loan facilities available to the Group
All in AUD$’000
Long-Term Loan Facility
Trade Receivables Facility
(a)
(b)
2022
$’000
2021
$’000
50,000
123,000
2022
2021
Limits
100,000
30,000
130,000
Utilised
20,000
30,000
50,000
Limits
150,000
30,000
180,000
Utilised
93,000
30,000
123,000
(a) Long-Term Loan Facility
On 30 June 2021, the Group executed a reduction in the value of its Long-Term Loan Facility (Facility) with ANZ and Westpac from
$200m to $150m, with a further reduction executed in December 2021 from $150m to $100m. The Facility term remains with an expiry
date of May 2024, while the available funding facility continues to be split equally between the two financiers. The Facility comprises
unsecured bank loans with floating interest rates subject to bank covenant arrangements in respect of a Leverage Cover Ratio,
Interest Cover Ratio, Gearing Ratio and Consolidated Net Worth. The Group is in compliance with all Facility covenants and reports
as such to the two financiers on a six-monthly basis coinciding with the release of the half year and full year financial reports.
(b) Trade Receivables Facility
The Group operates a fully drawn $30m Trade Receivables Facility with Cooperative Rabobank U.A. Australia Branch (Rabobank).
In addition to adopting the same bank covenants calculation and reporting arrangements as prevailing under the Facility, a detailed
monthly analysis of the Trade Receivables Ledger is provided by the Group to Rabobank.
Offsetting of financial instruments
The Group does not set off financial assets with financial liabilities in the consolidated financial statements.
Under the terms of the Facility agreement, subject to the paragraph following, if the Group does not pay an amount when due
and payable, the banks may apply any credit balance in any currency in any account that the Group has with the bank, in or towards
satisfaction of that amount.
Under the terms of the Rabobank facility, ANZ, as the Group’s transactional bank, has agreed not to exercise its right of set off until
Rabobank has received payment in full of the amount advanced to the Group under the Trade Receivables Facility.
As at 30 June 2022, the value of legally enforceable cash balances, which upon default or bankruptcy would be applied to the loan
facility, is $27.1m (2021: $39.9m).
59
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 18 – Share capital
Fully paid up capital:
319,494,975 ordinary shares with no par value (2021: 319,494,975)
There were no movements in issued share capital in FY22.
Ordinary shares
Parent entity
2022
$’000
225,114
2021
$’000
225,114
Ordinary shares are classified as share capital. Incremental costs directly attributable to the issue of new shares or options are shown
in equity as a deduction, net of tax, from the proceeds. Ordinary shares entitle the holder to receive dividends and the proceeds on
winding up the interest in proportion to the number of shares held. On a show of hands, every shareholder present at a shareholders’
meeting in person or by proxy is entitled to one vote, and upon a poll each share is entitled to one vote.
Capital risk management
The Group manages capital to ensure it maintains optimal returns to shareholders and benefits for other stakeholders. The Group
also aims to maintain a capital structure that ensures the optimal cost of capital available to the Group.
The Group reviews and, where appropriate, adjusts the capital structure to take advantage of favourable costs of capital or high
returns on assets. The Group may change the amount of dividends to be paid to shareholders, return capital to shareholders, issue
new shares or sell assets to reduce debt. The Group monitors capital through the gearing ratio (net debt/total equity). The gearing
ratios as at 30 June are as follows:
Gross debt
Less: cash
Net debt
Total equity
Gearing ratio
Note 19 – Reserves and retained earnings
Reserves
Share-based payments reserve
Opening balance at 1 July
Options and performance rights expense
Share-based payment transactions
Transfer to retained earnings
Closing balance at 30 June
2022
$’000
50,000
(27,078)
22,922
316,029
7.3%
2022
$’000
1,706
3,540
(232)
(1,868)
3,146
2021
$’000
123,000
(39,904)
83,096
287,545
28.9%
2021
$’000
1,843
1,639
(120)
(1,656)
1,706
The share-based payments reserve is used to recognise the fair value of performance rights and options issued to employees in relation
to equity-settled share-based payments.
Retained earnings
Opening balance at 1 July
Net profit for the year
Dividends paid
Share-based payments reserve transfer
Closing balance at 30 June
2022
$’000
60,725
42,430
(17,253)
1,868
87,769
2021
$’000
34,173
24,896
–
1,656
60,725
60
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 Note 20 – Investment in controlled entities
The ultimate parent entity within the Group is Ridley Corporation Limited.
Country of
incorporation
Class of shares
Name of entity
Ridley AgriProducts Pty Ltd and its controlled entity:
CSF Proteins Pty Ltd
Barastoc Stockfeeds Pty Ltd
Ridley Corporation (Thailand) Co., Ltd
Ridley Corporation Ecuador S.A.
Ridley Corporation (India) Private Limited
Pen Ngern Feed Mill Co., Ltd. (PNFM)
RCL Retirement Pty Limited
Australia
Australia
Australia
Thailand
Ecuador
India
Thailand
Australia
Ridley Land Corporation Pty Ltd1 and its controlled entities: Australia
Lara Land Development Corporation Pty Ltd
Moolap Land Development Corporation Pty Ltd
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ownership interest
2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
1. Following the completion of the divestment of all Moolap and Lara properties in FY22, application has been made after balance date to de-register
Ridley Land Corporation Pty Ltd and its two controlled entities.
Note 21 – Parent entity
As at 30 June 2022 and throughout the financial year ending on that date, the parent company of the Group was Ridley
Corporation Limited.
Result of the parent entity
Loss for the year
Comprehensive income for the year
Total comprehensive loss for the year
Financial position of the parent entity at year end
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Share capital
Share-based payment reserve
Profit reserve
Retained earnings
Total equity
2022
$’000
2021
$’000
(6,942)
(9,492)
–
–
(6,942)
(9,492)
2,350
256,440
258,790
13,073
50,364
63,437
195,353
225,114
3,144
25,000
(57,906)
195,353
3,358
345,881
349,239
9,999
123,000
132,999
216,240
225,114
1,706
–
(10,580)
216,240
The parent entity has entered into a Deed of Cross Guarantee with the effect that the Company guarantees the debts of certain
of its subsidiaries that are party to the deed. Further details of the Deed of Cross Guarantee and the subsidiaries subject to the deed
are disclosed in Note 22.
61
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 22 – Deed of Cross Guarantee
Ridley Corporation Limited, Ridley AgriProducts Pty Ltd and CSF Proteins Pty Ltd are parties to a Deed of Cross Guarantee under which
each company guarantees the debts of the other entities.
The above companies represent a Closed Group for the purposes of the ASIC Class Order, which governs the operation and
establishment of the Deed of Cross Guarantee. As there are no other parties to the Deed of Cross Guarantee that are controlled but not
wholly owned by Ridley Corporation Limited, they also represent the Extended Closed Group.
(a) Consolidated Statement of Comprehensive Income
Revenue from continuing operations
Cost of sales
Gross profit
Finance income
Other income
Expenses from continuing operations:
Selling and distribution
General and administrative
Finance costs
Profit before income tax
Income tax expense
Profit after income tax
Other comprehensive income
Total comprehensive income for the year
(b) Summary of movements in retained profits
Opening balance at 1 July
Comprehensive income for the year
Dividends paid
Share-based payment reserve net transfer
Closing balance at 30 June
2022
$’000
2021
$’000
1,043,672
924,417
(945,355)
(844,222)
98,317
80,195
–
13,045
(13,632)
(35,720)
(2,849)
59,161
(17,636)
41,525
–
41,525
2022
$’000
65,590
41,525
(17,253)
(327)
89,535
21
4,916
(14,090)
(33,513)
(4,530)
33,001
(9,025)
23,976
–
23,976
2021
$’000
39,958
23,976
–
1,656
65,590
62
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 2022
$’000
26,349
130,039
115,114
–
2021
$’000
38,351
111,261
82,687
46,078
271,503
278,377
9,372
222,976
74,972
20,409
8,155
335,884
607,387
204,860
15,112
11,860
231,832
7,395
50,000
364
57,759
289,591
317,795
225,114
3,146
89,535
317,795
21,146
219,733
75,892
12, 979
9,429
339,179
617,556
169,226
17,319
6,014
192,559
123,000
9,262
325
132,587
325,146
292,410
225,114
1,706
65,590
292,410
(c) Balance sheet
Current assets
Cash and cash equivalents
Receivables
Inventories
Assets held for sale
Total current assets
Non-current assets
Receivables
Property, plant and equipment
Intangible assets
Investments
Deferred tax asset
Total non-current assets
Total assets
Current liabilities
Payables
Provisions
Tax liability
Total current liabilities
Non-current liabilities
Borrowings
Payables
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Retained earnings
Total equity
63
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 23 – Related party disclosures
Prof. Robert van Barneveld, a Director of Ridley Corporation, is the Group CEO and Managing Director of the SunPork Group.
Ridley supplies feed to the SunPork Group. All transactions between Ridley and the SunPork Group are on normal commercial
terms in the ordinary course of business.
There were no other transactions with related parties in the current or prior period.
Other related parties
Contributions to superannuation funds on behalf of employees are disclosed in Note 25.
Key Management Personnel compensation
Short-term employee benefits
Post-employment benefits
Short-term incentive remuneration
Other benefits
Share-based payments accrual
Share-based payments reversal
2022
$
3,047,351
192,105
1,244,235
1,822
798,728
(247,000)
2021
$
2,710,828
168,803
1,086,250
–
685,690
–
Total Key Management Personnel compensation
5,037,241
4,651,571
Note 24 – Share-based payments
Share-based payment expense
Shares issued under the employee share scheme
Performance rights issued under the Ridley long-term incentive plan
Total share-based payment expense
Share-based payment arrangements
2022
$’000
334
3,206
3,540
2021
$’000
340
1,299
1,639
The fair value at grant date of equity-settled share-based payment arrangements granted to employees is generally recognised as an
expense, with a corresponding increase in equity, over the period of vesting of the awards. The amount recognised as an expense is
adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met,
such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance
conditions at the vesting date. For share based payment awards with non-vesting conditions, such as the ESS, the fair value at grant
date is measured to reflect such conditions and there is no true up for differences between expected and actual outcomes.
Ridley Corporation Special Retention Plan
The Ridley Corporation Special Retention Plan was developed specifically to retain and motivate key executives. Under the Special
Retention Plan, selected executives and the Managing Director may be offered a number of performance rights (SRP Rights). There were
no SRP Rights issued or on issue in FY22 or FY21.
Ridley Corporation Long Term Incentive Plan
The purpose of the Ridley Corporation Long Term Incentive Plan (LTIP) is to provide long-term rewards that are linked to shareholder
returns. Under the LTIP, selected executives and the Managing Director may be offered a number of performance rights (Right).
Each Right provides the entitlement to acquire one Ridley share at nil cost subject to the satisfaction of performance hurdles.
The fair value of Rights granted is recognised as an employee benefit expense over the performance period with a corresponding
increase in equity.
64
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 Current year issues under the Ridley Corporation Long Term Incentive Plan
For FY20, FY21 and FY22, there are two performance measures, namely Return on Funds Employed (ROFE) and Absolute Total
Shareholder Return (TSR).
The number of Rights issued to each participant in FY22 is divided equally into two tranches, Tranche A and Tranche B. The performance
measure for Tranche A Rights issued in FY22 is the ROFE hurdle as applied to all three years of the performance period (FY20 and
FY21: year three of the performance period only). The Absolute TSR is the performance hurdle for Tranche B Rights as applied across
the entire three-year performance period (FY20 and FY21: also the full three years). The testing of each tranche is independent of
the other tranche, such that one tranche could hypothetically result in 100% vesting while the other could result in 100% forfeiture,
or any combination thereof.
The fair value of Tranche B Rights has been calculated by an independent expert in accordance with AASB2 on an option-equivalent
basis, while the accounting fair value of Tranche A Rights is estimated excluding the impact of the ROFE hurdle (as this is considered
a ‘non-market condition’). The impact of the ROFE hurdle is then taken into consideration via adjusting the estimated number of
Tranche A Rights that will vest based on current and projected performance.
The model inputs for the Tranche A and Tranche B Rights granted during the reporting period under the LTIP included:
Grant date
Expiry date
Share price at grant date
Fair value at grant date: Tranche A/Tranche B
Expected price volatility of the Company’s shares
Expected dividend yield
2022
2021
2020
1 July 2021
1 July 2020
1 Sept 2019
30 June 2024
30 June 2023
30 June 2022
$1.15
$0.75
$1.08
$1.041/$0.31
$0.671/$0.22
$0.961/$0.25
25.0%
5.00 cps
25.3%
3.50 cps
22.5%
4.25cps
Risk-free interest rate being the Commonwealth Government Bond
rate at the date of grant
0.195%
0.27%
0.68%
1. The fair value of Tranche A Rights before adjusting for the initial estimate of the likelihood of exceeding the ROFE hurdle. A 100% probability was
attached to the likelihood of exceeding the ROFE hurdle.
The expected share price volatility is based on the historic volatility (based on the remaining life of the Rights), adjusted for any expected
changes to future volatility due to publicly available information.
65
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 24 – Share-based payments continued
Details of Rights outstanding under the plans at balance date are as follows:
2022
Grant date
Expiry date
Long Term Incentive Plan
1 July 2018
1 Sept 2019
1 July 2020
1 July 2021
30 Jun 20211
30 Jun 20222
30 Jun 2023
30 June 2024
Balance at
1 July 2021
Granted during
the year
Cancelled
during the year
Vested during
the year
Balance at
30 June 2022
2,350,000
3,553,391
5,921,884
–
–
–
(2,350,000)
(33,335)
(156,971)
–
4,537,030
(136,594)
11,825,275
4,537,030
(2,676,900)
–
–
–
–
–
–
3,520,056
5,764,913
4,400,436
13,685,405
1. The performance targets for this tranche of Performance Rights were not met and consequently all of these Rights were forfeited on 1 July 2021.
2. The performance targets for this tranche of Performance Rights were met to 100% and consequently all of these Rights vested to be converted
into ordinary shares in FY23.
2021
Grant date
Expiry date
Long Term Incentive Plan
1 July 2017
1 July 2018
1 Sept 2019
1 July 2020
30 Jun 20201
30 Jun 2021
30 Jun 2022
30 Jun 2023
Balance at
1 July 2020
Granted during
the year
Cancelled
during the year
Vested during
the year
Balance at
30 June 2021
2,225,000
2,400,000
3,646,106
–
–
–
–
5,986,459
(2,225,000)
(50,000)
(92,715)
(64,575)
8,271,106
5,986,459
(2,432,290)
–
–
–
–
–
–
2,350,000
3,553,391
5,921,884
11,825,275
1. The performance targets for this tranche of Performance Rights were not met and consequently all of these Rights were forfeited on 1 July 2020.
Ridley Employee Share Scheme (ESS)
At the 1999 Annual General Meeting, shareholders approved the introduction of the Ridley ESS. Under the ESS, shares are offered
to permanent Australian employees who are not participants in the STI program and who have a minimum of 12 months’ service as
at the date of offer. Ridley shares are offered at a discount of up to 50% with the maximum discount per employee limited to $1,000
annually in accordance with relevant Australian taxation legislation. The amount of the discount and number of shares allocated are
at the discretion of the Board. The purpose of the ESS is to align employee and shareholder interests.
Shares issued to employees under the ESS vest immediately on grant date. Employees can elect to receive an interest-free loan
to fund the purchase of the shares. Dividends on the shares are allocated against the balance of any loan outstanding. The shares
issued are accounted for as ‘in-substance’ options, which vest immediately. The fair value of these ‘in-substance’ options is recognised
as an employee benefit expense with a corresponding increase in equity. The fair value at grant date is independently determined
using a binomial option pricing model.
There were 426,618 shares awarded under the ESS in FY22 (FY21: 831,390). The fair value at grant date of the options issued in FY22
through the ESS was measured based on the binomial option pricing model using the following inputs:
Grant date
Restricted life
Share price at grant date
Fair value at grant date
Expected price volatility of the Company’s shares
Expected dividend yield per annum in cents per share (cps)
Risk-free interest rate being the Commonwealth Government Bond rate at the date of grant
2021
2020
30 Sept 2021
1 Sept 2020
3 years
$1.34
$0.78
25.0%
6.0 cps
1.445%
3 years
$0.77
$0.41
25.1%
4.0 cps
0.97%
66
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 Ridley ESS loan movements
2022 Number of shares
Grant date
Date shares
become
unrestricted
Weighted
average
exercise price
Balance at
start of
the year
Granted
during
the year
Exercised
during
the year
30 April 2010
30 April 2013
30 April 2011
30 April 2014
30 April 2012
30 April 2015
26 April 2013
26 April 2016
23 May 2014
23 May 2017
31 May 2015
31 May 2018
20 May 2016
20 May 2019
19 May 2017
19 May 2020
31 May 2018
31 May 2021
21 June 2019
21 June 2022
1 Sept 2020
1 Sept 2023
1 Sept 2021
1 Sept 2024
$0.61
$0.66
$0.61
$0.41
$0.48
$0.66
$0.85
$0.84
$0.84
$0.64
$0.41
$0.78
112,332
99,528
127,358
299,013
353,130
319,157
344,607
382,260
461,290
524,117
779,590
-
-
-
-
-
-
-
-
-
-
-
-
426,618
(24,420)
(21,112)
(24,810)
(58,344)
(73,470)
(67,754)
(78,387)
(94,180)
(113,200)
(82,150)
(111,370)
(40,482)
Balance
at end of
the year
87,912
78,416
102,548
240,669
279,660
251,403
266,220
288,080
348,090
441,967
668,220
386,136
Exercisable
at end of
the year
87,912
78,416
102,548
240,669
279,660
251,403
266,220
288,080
348,090
441,967
-
-
3,802,382
426,618
(789,679)
3,439,321
2,384,965
Weighted average exercise price
$0.62
$0.78
$0.66
$0.64
$0.68
The ‘Exercisable at end of the year’ column in the above table and following table reflects the fact that the options outstanding have
a weighted average contractual life of three years.
2021 Number of shares
Grant date
Date shares
become
unrestricted
Weighted
average
exercise price
Balance at
start of
the year
Granted
during
the year
Exercised
during
the year
Balance
at end of
the year
Exercisable
at end of
the year
30 April 2010
30 April 2013
30 April 2011
30 April 2014
30 April 2012
30 April 2015
26 April 2013
26 April 2016
23 May 2014
23 May 2017
31 May 2015
31 May 2018
20 May 2016
20 May 2019
19 May 2017
19 May 2020
31 May 2018
31 May 2021
21 June 2019
21 June 2022
1 Sept 2020
1 Sept 2023
$0.61
$0.66
$0.61
$0.41
$0.48
$0.66
$0.85
$0.84
$0.84
$0.64
$0.41
118,844
110,084
140,590
325,754
388,680
354,817
383,061
422,425
499,495
576,693
-
-
-
-
-
-
-
-
-
-
-
831,390
(6,512)
(10,556)
(13,232)
(26,741)
(35,550)
(35,660)
(38,454)
(40,165)
(38,205)
(52,576)
(51,800)
112,332
99,528
127,358
299,013
353,130
319,157
344,607
382,260
461,290
524,117
779,590
112,332
99,528
127,358
299,013
353,130
319,157
344,607
382,260
461,290
-
-
3,320,443
831,390
(349,451)
3,802,382
2,498,675
Weighted average exercise price
$0.62
$0.78
$0.66
$0.64
$0.68
67
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 25 – Retirement benefit obligations
Superannuation
The Group sponsors the Ridley Superannuation Plan – Australia, which is administered by Mercer. The fund provides available benefits
on a defined contribution basis for employees or their dependants on retirement, resignation, total and permanent disability, death and,
in some cases, on temporary disablement. The members and the Group make contributions as specified in the rules of the plan.
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution
plans are recognised as an employee benefit expense in comprehensive income in the periods during which services are rendered
by employees.
Group contributions in terms of awards and agreements are legally enforceable, and, in addition, contributions for all employees have
to be made at minimum levels for the Group to comply with its obligations. Other contributions are in the main not legally enforceable,
with the right to terminate, reduce or suspend these contributions upon giving written notice to the trustees.
Benefits are based on an accumulation of defined contributions. The amount of contribution expense recognised in the Consolidated
Statement of Comprehensive Income for the year is $5,538,222 (2021: $5,578,448).
Note 26 – Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk including currency, interest rate, commodity, credit and
liquidity risk. The Group’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks
to minimise potential adverse effects on the financial performance of the Group. The Group may use derivative financial instruments,
such as foreign exchange contracts and interest rate swaps, to manage certain risk exposures. Any derivatives used to manage these
exposures are designated into either fair value or cash flow hedging relationships (as appropriate).
Risk management is carried out by management under policies approved by the Board. Management evaluates and hedges financial
risks where appropriate. The Board approves written principles for overall risk management, as well as written policies covering specific
areas such as mitigating foreign exchange, interest rate and credit risks.
(a) Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency
that is not the relevant entity’s functional currency. The Group is exposed to foreign exchange risk through the purchase and sale of
goods in foreign currencies.
Forward contracts and foreign currency bank balances are used to manage foreign exchange risk. Management is responsible for
managing exposures in each foreign currency by using external forward currency contracts and purchasing foreign currency that is
held in US dollar, New Zealand dollar, Thai Baht and Euro bank accounts. Where possible, borrowings are made in the currencies in
which the assets are held in order to reduce foreign currency translation risk. The Group does not hedge account on forward foreign
currency contracts.
Foreign currency
The Group holds foreign currency bank accounts in US dollars, New Zealand dollars, Thai Baht and Euros, which are translated into
AUD using spot rates. These foreign currency bank accounts, and at times forward foreign exchange contracts, are entered into for
purchases and sales denominated in foreign currencies. The Group classifies forward foreign exchange contracts as financial assets
and liabilities and measures them at fair value.
68
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 The Group’s exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollars, was as follows:
$’000 Australian
Cash
Assets
Net balance sheet exposure
USD
291
–
291
2022
NZD
554
–
554
EUR
8
–
8
THB
724
27,099
27,823
USD
1,375
–
1,375
2021
NZD
385
–
385
EUR
12
–
12
THB
1,548
25,067
26,615
Foreign currency sensitivity
A change of a 10% strengthening or weakening in the closing exchange rate of the foreign currency bank balances at the reporting
date for the financial year would have decreased by $136,367 (2021: $301,867) or increased by $175,954 (2021: $368,949) the Group’s
reported comprehensive income and the Group’s equity. A sensitivity of 10% has been selected as this is considered reasonable,
taking into account the current level of exchange rates and volatility observed both on a historical basis and on market expectations
for future movements. The Directors cannot and do not seek to predict movements in exchange rates.
(b) Commodity risk
Impact of movements in commodities is managed through procurement practices and many of our customers retaining responsibility
for the supply of raw materials for the feed Ridley manufactures on their behalf. As a result, the impact of fluctuations in commodity
prices is reduced.
(c) Interest rate risk
As the Group has no significant interest-bearing assets, the Group’s income and operating cash inflows are substantially independent
of changes in market interest rates.
The Group’s main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash
flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group policy is to ensure
that the interest cover ratio does not fall below the ratio limit set by the Group’s financial risk management policy. At balance date,
bank borrowings of the Group were incurring an average variable interest rate of 2.68% (2021: 2.606%).
Interest rate risk exposures
The Group’s exposure to interest rate risk (defined as interest on drawn and undrawn facilities plus allocation of prepaid facility fee
establishment costs) and the effective weighted average interest rate for each class of financial assets and financial liabilities is set
out below. Exposures arise predominantly from assets and liabilities bearing variable interest rates as the Group intends to hold fixed
rate assets and liabilities to maturity.
In $’000
Variable rate instruments
Cash
Bank loans
Interest rate
2022
Interest rate
2021
–
2.68%
27,078
50,000
–
2.60%
39,904
123,000
Interest rate sensitivity
A 100 basis point change in interest rates at the reporting date annualised for the financial year would have increased or decreased
the Group’s reported comprehensive income and equity (i.e. after income tax) by $0.4m (2021: $0.9m).
69
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 26 – Financial risk management continued
(d) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and the risk arises principally from the Group’s receivables from customers. Wherever possible, the Group mitigates
credit risk through securing of collateral and/or credit insurance. The Group has policies in place to ensure that sales of products
and services are made to customers with an appropriate credit history. The Group holds collateral and/or credit insurance over
certain trade receivables.
Derivative counterparties and cash transactions are limited to financial institutions with a high credit rating. The Group has policies
that limit the amount of credit exposure to any one financial institution. The maximum exposure to credit risk at the reporting date was:
Trade receivables
Other receivables
Cash and cash equivalents
2022
$’000
127,732
–
27,078
154,810
2021
$’000
108,678
3,650
39,904
152,232
Further credit risk disclosures on trade receivables are disclosed in Note 8.
(e) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset.
The ultimate responsibility for liquidity risk management rests with the Board, which has established an appropriate risk management
framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group’s
Corporate Finance Manager manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities,
and by monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
Details of finance facilities are set out in Note 17.
The following tables disclose the contractual maturities of financial liabilities, including estimated interest payments:
2022 in $’000
Non-derivative
financial liabilities
Carrying
amount
Less than
1 year
1 to 2 years
2 to 3 years
3 to 4 years
4 to 5 years
Total
contractual
cash flows
Trade and other payables
202,206
202,206
Lease liabilities
Bank loans
2021 in $’000
11,815
50,000
4,420
2,506
264,021
209,132
–
3,426
31,859
35,285
–
2,466
20,721
23,187
–
1,382
–
1,382
–
121
–
121
202,206
11,815
55,087
269,108
Carrying
amount
Less than
1 year
1 to 2 years
2 to 3 years
3 to 4 years
> 4 years
Total
contractual
cash flows
Non-derivative
financial liabilities
Trade and other payables
Lease liabilities
Bank loans
165,491
13,523
123,000
302,014
165,491
4,261
2,163
171,915
–
3,575
31,927
35,502
–
2,489
1,785
4,274
–
1,901
93,876
95,777
–
1,297
–
165,491
13,523
129,751
1,297
308,765
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different
amounts, noting that the maturity of the contractual cash flows for the Group’s borrowings reflects the impact of the waivers granted
by the Group’s lenders.
70
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 (f) Financial instruments
Non-derivative financial assets
The Group initially recognises loans, receivables and deposits on the date that they are originated. All other financial assets (including
assets designated at fair value through comprehensive income) are recognised initially on the trade date at which the Group becomes
a party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to
the cash flows from the asset expire, or when it transfers the rights to receive the contractual cash flows on the financial asset
in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred.
Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when, the Group has a
legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition,
loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses.
Non-derivative financial liabilities
The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial
liabilities (including liabilities designated at fair value through comprehensive income) are recognised initially on the trade date
at which the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial liability
when its contractual obligations are discharged or cancelled or expire. Financial assets and liabilities are offset and the net amount
presented in the balance sheet when, and only when, the Group has a legal right to offset the amounts and intends either to settle
on a net basis or to realise the asset and settle the liability simultaneously.
The Group has the following non-derivative financial liabilities: loans, borrowings, trade and other payables. Such financial liabilities
are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial
liabilities are measured at amortised cost using the effective interest rate method.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and are subsequently remeasured
to their fair value at each reporting date. The resulting gain or loss is recognised in the Consolidated Statement of Comprehensive
Income. Refer Note 32.
(g) Fair values
Fair values versus carrying amounts
The carrying amount of financial assets and liabilities approximates their fair value.
For financial assets and liabilities carried at fair value, the Group uses the following to categorise the method used:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets
or liabilities.
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). Valuation inputs include
forward curves, discount curves and underlying spot and futures prices.
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are
not based on observable market data (unobservable inputs).
71
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 27 – Leases
While the majority of the Group’s operations are conducted on sites owned by the Group, the Group leases certain sites and warehouses
on long-term lease periods of up to 10 years in duration, preferably with options for Ridley to renew in order to provide operational
flexibility. Each lease is negotiated in the context of market conditions and unique terms and conditions as offered by the individual lessor.
The Group leases motor vehicles and certain items of mobile plant under a number of different lease arrangements with external fleet
management entities. The Group leases certain IT equipment with contract terms of up to three years. These leases are considered
to be short term and for low-value individual items.
(i) Right-of-use assets – in $’000
2022 in $’000
Balance as at 1 July 2021
Additions to right-of-use assets
Execution of extension option
Cancellation of leases
Depreciation
Balance as at 30 June 2022
2021 in $’000
Balance as at 1 July 2020
Additions to right-of-use assets
Execution of extension option
Cancellation of leases
Depreciation
Balance as at 30 June 2021
Property Motor vehicles
9,563
1,019
–
(164)
(2,579)
7,839
706
1,075
147
–
(960)
968
Property Motor vehicles
4,485
7,666
–
–
(2,588)
9,563
1,119
456
44
–
(913)
706
Plant
2,975
1,157
50
(187)
(1,085)
2,910
Plant
3,224
1,164
7
(165)
(1,255)
2,975
Total
13,244
3,251
197
(351)
(4,624)
11,717
Total
8,828
9,286
51
(165)
(4,756)
13,244
72
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 (ii) Lease liabilities – in $’000
2022 in $’000
Balance as at 1 July 2021
Additions to lease liability
Execution of extension option
Cancellation of leases
Accretion of interest
Payments
Balance as at 30 June 2022
Current
Non-current
2021 in $’000
Balance as at 1 July 2020
Additions to lease liability
Execution of extension option
Cancellation of leases
Accretion of interest
Payments
Balance as at 30 June 2021
Current
Non-current
(iii) Extension options
Property Motor vehicles
(9,797)
(1,019)
–
179
(308)
2,749
(8,196)
2,734
5,462
8,196
(684)
(1,075)
(147)
–
(50)
1,183
(773)
590
183
773
Property Motor vehicles
(4,629)
(7,666)
–
–
(221)
2,718
(9,797)
2,778
7,019
9,797
(1,119)
(456)
(44)
–
(34)
970
(684)
545
139
684
Plant
(3,042)
(1,157)
(50)
187
(125)
1,340
(2,846)
1,096
1,751
2,846
Plant
(3,261)
(1,164)
(7)
165
(138)
1,363
(3,042)
938
2,104
3,042
Total
(13,523)
(3,251)
(197)
366
(484)
5,271
(11,815)
4,420
7,395
11,815
Total
(9,009)
(9,286)
(51)
165
(393)
5,050
(13,523)
4,261
9,262
13,523
Some property leases contain extension options exercisable by the Group up to one year before the expiry of the initial lease term.
The Group assesses at the commencement of the initial lease term, or whenever there is a significant event or change in circumstances
relating to a lease, the likelihood of it exercising its option to extend the lease.
The Group considers the potential future lease payments associated with the exercise of any lease term extension options to be
immaterial or uncertain.
(iv) Amounts recognised in profit or loss and statement of cash flows
The financial impact of lease accounting on profit or loss was $5.1m (2021: $5.1m), comprising interest and amortisation (refer Note 5(b)
and Note 11). The total cash outflows for leases in the year was $5.3m (2021: $5.0m).
73
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 Note 28 – Commitments for expenditure
Expenditure contracted for but not recognised as liabilities:
Capital plant and equipment (a)
CSIRO Novacq™ Research Alliance (b)
2022
$’000
18,147
–
18,147
2021
$’000
7,244
750
7,994
(a) Capital plant and equipment
At 30 June 2022 there were $18.1m (2021: $7.2m) of capital plant and equipment commitments in place in respects of capital projects.
(b) CSIRO Novacq™ Research Alliance
On 24 March 2017, a five-year strategic alliance was executed with CSIRO to collaborate in order to maximise the development of
new Novacq™ applications beyond the former application for prawn and crustacean species. Ridley’s annual cash commitment to the
alliance was $1 million, and in June 2022, at the end of the term, Ridley and CSIRO agreed to extend the relationship for a further one
year without any additional cost to Ridley.
Note 29 – Contingent liabilities
Guarantees
The Group is, in the normal course of business, required to provide certain guarantees and letters of credit on behalf of controlled
entities, associates and related parties in respect of their contractual performance obligations. These guarantees and letters of credit
only give rise to a liability where the entity concerned fails to perform its contractual obligations.
Bank guarantees
Litigation
2022
$’000
971
2021
$’000
971
In the ordinary course of business the Group may be subject to legal proceedings or claims. Where there is significant uncertainty
as to whether a future liability will arise in respect of these items, or the amount of liability (if any) that may arise cannot be reliably
measured, these items are accounted for as contingent liabilities. Based on information available as of the date of this report, the Group
does not expect any of these items to result in a material charge to profit and loss.
Note 30 – Events occurring after the balance sheet date
There were no matters or circumstances that have arisen since 30 June 2022 that have significantly affected, or may significantly affect:
(i)
the Group’s operations in future financial years; or
(ii) the results of those operations in future financial years; or
(iii) the Group’s state of affairs in future financial years.
74
NOTES TO THE FINANCIAL STATEMENTS CONTINUED30 June 2022Ridley Corporation Limited Annual Report 2022 Note 31 – Auditor’s remuneration
(a) Audit and review of financial reports
Auditor of the Company – KPMG Australia
(b) Other services
Auditor of the Company – KPMG Australia – in relation to taxation
and other services
Total remuneration of auditor
2022
$
2021
$
424,878
339,750
165,677
590,555
85,931
425,681
Note 32 – Corporate information and accounting policy summary
Ridley Corporation Limited (the Company) is a company limited by shares, incorporated and domiciled in Australia, whose registered
office is at level 4, 565 Bourke Street, Melbourne, Victoria, 3000, and whose shares are publicly traded on the Australian Securities
Exchange (ASX). The consolidated financial statements as at, and for the year ended, 30 June 2022 comprise Ridley Corporation Limited,
the ‘parent entity’ and its subsidiaries. Ridley Corporation Limited and its subsidiaries together are referred to in this financial report
as ‘the Group’. The Group is a ‘for-profit’ entity and is primarily involved in the manufacture of animal nutrition solutions.
The financial report was authorised for issue by the Directors on 18 August 2022 and is presented in Australian dollars, being the
Company’s functional currency. The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 issued by the Australian Securities and Investments Commission relating to the ‘rounding off’ of amounts in the
Directors’ Report and financial statements. Amounts in the Directors’ Report and the consolidated financial statements have been rounded
off to the nearest thousand dollars in accordance with that legislative instrument, unless otherwise indicated.
Basis of preparation
The principal accounting policies as outlined below and as adopted in the preparation of the financial report are set out in either the
relevant note to the accounts or below. These policies have been consistently applied except if mentioned otherwise. Certain comparative
amounts have been restated, reclassified or re-presented to conform with the current year’s presentation.
(i) Statement of compliance
These consolidated financial statements are general purpose financial statements prepared in accordance with Australian Accounting
Standards (AASBs) (including Interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations
Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRSs) and interpretations
adopted by the International Accounting Standards Board (IASB).
The Group has adopted all of the new and revised standards and interpretations issued by the AASB that are relevant to its operations
and effective for the current financial year, and has not early adopted any new or amended standards in preparing these consolidated
financial statements.
(ii) AASB 16 Leases
Lease accounting standard AASB 16 requires all leases to be recognised on the balance sheet with a right-of-use asset capitalised
and depreciated over the estimated lease term together with a corresponding liability that will reduce over the same period with
an appropriate interest charge recognised.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. 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. To assess
whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in AASB 16.
75
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 June 2022
Note 32 – Corporate information and accounting policy summary continued
Basis of preparation continued
(ii) AASB 16 Leases continued
(a) As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the
contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property, the Group has
elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset
or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of
the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost
of the right-of-use asset reflects that the Group will exercise a purchase option. In that case, the right-of-use asset is depreciated
over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition,
the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing
rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
• fixed payments, including in-substance fixed payments;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
• amounts expected to be payable under a residual value guarantee; and
• the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal
period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the
Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future
lease payments arising from a change in an index or rate, if:
• there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee;
• the Group changes its assessment of whether it will exercise a purchase, extension or termination option; or
• if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
(b) As a lessor
The Group has no material contractual arrangements where it is the lessor of an operating or finance lease.
(c) Short-term leases and lease of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases,
including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line
basis over the lease term.
76
Ridley Corporation Limited Annual Report 2022 (d) Use of lease estimates and judgements
• Determining the lease term of contracts with renewal and termination options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to
extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably
certain not to be exercised.
The Group has several lease contracts that include extension and termination options. The Group applies judgement in evaluating
whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. After the commencement date,
the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its
ability to exercise or not to exercise the option to renew or terminate.
• Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR)
to measure lease liabilities. The IBR is the rate of interest the Group would have to pay to borrow over a similar term, and with similar
security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR
therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available.
Where leases are held in non-Australian dollar currencies, the spot exchange rates on 1 July 2022 have been used to value them.
Lease liabilities will be revalued to spot exchange rates at each future balance sheet date.
(iii) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis (unless otherwise stated) except for the following
item in the balance sheet:
• cash-settled share-based payment arrangements, which are measured at fair value.
(iv) Use of estimates and judgements
The preparation of the consolidated financial statements in conformity with AASBs requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimates are revised and in any future periods affected. 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 discussed following.
(a) Estimated recoverable amount of goodwill and other non-current assets
The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy for intangible
assets. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash inflows that are largely independent of the cash inflows from other assets or groups of assets (Cash Generating Units, or CGUs).
Refer to Note 12 for further details on impairment testing.
(b) Estimated Research and Development costs and tax provisions
As at the date of adoption of these financial statements, the total cost of projects eligible to claim the Research and Development
Tax Incentive (RDTI) and the tax provisions are estimates only. The actual RDTI claimable cost and income tax return are finalised
in the first half of the ensuing financial year in order to facilitate respective lodgements within the required deadlines.
(c) Provision for ECL on receivables
The Group calculates the doubtful debts provision under the expected credit loss (ECL) model. The Group has established a provision
matrix that is based on the Group’s historical credit loss experience, adjusted for forward-looking factors specific to the debtors and
the economic environment. Measurement of ECL allowance for trade receivables is disclosed in Note 8.
(d) Determining timing of satisfaction of performance obligations
The Group generally has one performance obligation, and consequently revenue from the sale of feed is recognised at a point in time.
Refer to Note 4 for further details on revenue recognition.
77
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 June 2022
Note 32 – Corporate information and accounting policy summary continued
Basis of preparation continued
(v) Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial
assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods.
When applicable, further information about the assumptions in determining fair values is disclosed in the notes specific to that asset
or liability.
(a) Non-derivative financial assets and liabilities
The net fair value of cash and non-interest bearing monetary financial assets and liabilities of the Group approximates their
carrying amounts.
Ridley buys large volumes of grain for stock-feed manufacture, with price risk mainly offset through sales of finished feed. Where Ridley
commits to forward grain purchases at a fixed price and future date, unsupported by a finished feed sale contract, Ridley may look
to offset price risk through the use of a forward futures contract derivative instrument, which creates a floating purchase price to
mitigate the price risk in the intervening period.
In such instances, the futures contract hedge is deemed to be highly effective because (a) volumes are consistent across the committed
purchase and sold futures contract, (b) timeframes for grain delivery and futures maturity are aligned, and (c) pricing reference points
are consistent.
(b) Non-derivative financial assets and liabilities
The forward futures contracts and the committed purchases in place at balance sheet date have been revalued at 30 June 2022.
The hedge is classified as a fair value hedge of a firm commitment per IFRS 9/39. Both the derivative and the commitment have
been revalued at 30 June 2022 and recognised on balance sheet at their fair value. The difference between the two revaluations
represents the ‘ineffectiveness’ in the hedge relationship and gives rise to a mark to market gain (or loss) and is recognised in profit
or loss.
As at 30 June 2022, the Group had two (2021: seven) forward futures contracts in the form of swaps in Australian dollar currency with
a mark to market gain of $1,137,212 (2021: $133,060).
(c) Derivative financial instruments
The fair values of forward exchange contracts are estimated using listed market prices if available. If a listed market price is not
available, then the fair value is estimated by discounting the contractual cash flows at their forward price and deducting the current
spot rate. The fair value of interest rate swaps is based on broker quotes. Those quotes are tested for reasonableness by discounting
estimated cash flows based on the terms and maturity of each contract and using market interest rates for similar instruments at the
measurement date.
(vi) Basis of consolidation – Business combinations
The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration
transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises
is tested annually for impairment. Any gain on bargain purchase is recognised in profit or loss immediately. Transaction costs are
expensed as incurred, except if related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are
generally recognised in profit or loss. Any contingent consideration is measured at fair value at the date of acquisition. If an obligation
to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured
and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are
recognised in profit or loss.
78
Ridley Corporation Limited Annual Report 2022 (vii) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements
of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on
which control ceases.
Intercompany transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated.
Accounting policies of subsidiaries are changed where necessary to ensure consistency with the policies adopted by the Group.
(viii) Interests in equity-accounted investees
Associates are those entities where the Group has significant influence, but not control or joint control, over the financial and operating
policies. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net amounts of
the arrangement, rather than rights to its assets and obligations for liabilities. Investments in associates and joint venture entities are
accounted for in the consolidated financial statements using the equity method of accounting, after initially being recognised at cost.
The Group’s investment in associates and joint venture entities includes goodwill identified on acquisition, net of any accumulated
impairment losses.
The Group’s share of its associates’ and joint venture entities’ post-acquisition profits or losses is recognised in the Consolidated
Statement of Comprehensive Income, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative
post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable reduce the carrying
amount of the investment.
Unrealised gains on transactions between the Group and its associates and joint venture entities are eliminated to the extent of the
Group’s interests in the associates and joint venture entities. Accounting policies of associates and joint venture entities have been
changed where necessary to ensure consistency with the policies adopted by the Group.
(ix) Foreign currency
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year
end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement
of Comprehensive Income.
(x) Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars at the exchange rates prevailing at balance date.
The income and expenses of foreign operations are translated into Australian dollars at the exchange rates prevailing at the date of
the transactions.
(xi) Intangible assets and Software-as-a-Service arrangements
In April 2021, the International Financial Reporting Standards Interpretations Committee (IFRIC) issued a final agenda decision
that impacts Software-as-a-Service (SaaS) arrangements: Configuration or customisation costs in a cloud computing arrangement.
This decision discusses whether configuration or customisation expenditure relating SaaS arrangements can be recognised as an
intangible asset, and if not, over what time period the expenditure is expensed.
The Group’s accounting policy was traditionally to capitalise all costs related to SaaS arrangements as capital work in progress in the
Statement of Financial Position. The adoption of the IFRIC decisions resulted in a change in accounting policy in FY21, giving rise to a
reclassification in FY21 of the pre-tax costs that were previously capitalised as a Statement of Financial Position asset to an expense
in the Statement of Comprehensive Income. The tax effect was a further adjustment.
The financial impact of the change in accounting policy on both FY22 and FY21 reported results is disclosed as an Individually
Significant Item in Note 5(d) to the accounts.
79
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 DIRECTORS’ DECLARATION
1.
In the opinion of the Directors of Ridley Corporation Limited (the Company):
(a) The consolidated financial statements and notes set out on pages 39 to 79 and the Remuneration Report are in accordance
with the Corporations Act 2001, including:
(i) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001, and
(ii) giving a true and fair view of the Group’s financial position as at 30 June 2022 and its performance for the financial
year ended on that date.
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
2.
In the opinion of the Directors, as at the date of this declaration there are reasonable grounds to believe the members of
the Extended Closed Group identified in Note 22 will be able to meet any obligations or liabilities to which they are or may be
become subject, by virtue of the Deed of Cross Guarantee, between the Company and those group entities pursuant to ASIC
Class Order 98/1418.
3. The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A
of the Corporations Act 2001 for the financial year ended 30 June 2022.
4. The consolidated financial statements also comply with International Financial Reporting Standards as disclosed in Note 32.
This declaration is made in accordance with a resolution of the Directors.
Mick McMahon
Director and Ridley Chair
Quinton L Hildebrand
CEO and Managing Director
Melbourne
18 August 2022
80
Ridley Corporation Limited Annual Report 2022 INDEPENDENT AUDITOR’S REPORT
81
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Independent Auditor’s Report To the shareholders of Ridley Corporation Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of Ridley Corporation Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: • giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated balance sheet as at 30 June 2022; • Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended; • Notes including a summary of significant accounting policies; and • Directors’ Declaration. The Group consists of (the Company and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with these requirements. Key audit matters The Key Audit Matters we identified are: • Carrying value of non-current assets, including goodwill; and • Accounting for inventory, including consideration of valuation risks. Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period. These matters were addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 INDEPENDENT AUDITOR’S REPORT CONTINUED
82
Carrying value of non-current assets including goodwill ($321m) Refer to Note 11 Property, plant and equipment and Note 12 Intangible assets to the financial report The key audit matter How the matter was addressed in our audit A key audit matter for us was the Group’s annual testing of non-current assets, including goodwill, for impairment due to: • the size of the non-current assets balance (which represents 53% of the total assets); and • complexity in auditing the assumptions applied to the Group’s discounted cash flow models for each Cash Generating Unit (CGU), given the potential variability in demand from customers operating in the agriculture industry. We focused on the key assumptions the Group applied in preparing the “value in use” cash flow models, including the terminal value growth rates, annual growth rates and discount rates. The Group uses complex models to perform its annual testing for impairment. The models are largely manually developed, use adjusted historical performance, and a range of internal and external sources as inputs to the assumptions. For certain CGUs, the Group has not met prior forecasts, raising our concern for the reliability of current forecasts. Complex modelling, particularly those containing highly judgmental allocations of any significant corporate assets and costs to CGUs, using forward-looking assumptions, tends to be prone to greater risk for potential bias, error and inconsistent application. These conditions necessitate additional scrutiny by us, in particular to address the objectivity of sources used for assumptions, and their consistent application. We involved valuation specialists to supplement our senior audit team members in assessing this key audit matter. Our procedures included: • Testing the key controls over the discounted cash flow models, including inspection of Board approval of key assumptions and budgets, which form the basis of the cash flow forecasts; • Assessing the Group’s discounted cash flow models and key assumptions by: - Considering the appropriateness of the value in use methodology applied by the Group to perform the test for impairment against the requirements of the accounting standards. - Assessing the integrity of the value in use models used, including the accuracy of the underlying calculation formulas. - Comparing the forecast cash flows contained in the value in use models to the Board approved forecasts. - Assessing the Group’s underlying methodology and documentation for the allocation of corporate costs and corporate assets to each CGU, for consistency with our understanding of the business and the criteria in the accounting standards. - Assessing the accuracy of previous Group forecasts to inform our evaluation of current forecasts incorporated in the model. - Challenging the Group’s significant forecast cash flow and growth assumptions in light of the potential variability in demand from customers operating in the agriculture industry. We applied increased scepticism to forecasts in the CGU’s where previous forecasts were not achieved. We used our knowledge of the Group, their past performance, business and customers, and our industry experience. - Considering the sensitivity of the models by varying key assumptions, such as annual growth rates, cash flows, terminal value growth rate and discount rates, within a reasonably possible range, to identify those assumptions at higher risk of bias or inconsistency in application and to focus our further procedures. Ridley Corporation Limited Annual Report 2022 I
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- Working with our valuation specialists, we: o independently developed a discount rate range considered comparable using publicly available market data for comparable entities, adjusted by risk factors specific to the Group and the industry it operates in; and o compared forecast growth rates and terminal value growth rates to published studies of industry trends and expectations, and considered differences for the Group’s operations. - Assessing the disclosures in the financial report using our understanding obtained from our testing and against the requirements of the accounting standards. Accounting for inventory, including consideration of valuation risks ($117m) Refer to Note 9 Inventories to the financial report The key audit matter How the matter was addressed in our audit Accounting for inventory is a key audit matter due to the: • size of the inventory balance relative to the Group’s financial position (19% of total assets); • Group’s diverse and broad product range to different market segments; and • extent of any judgement involved by the Group in determining the net realisable value. Such judgements may have a significant impact on the Group’s provision and therefore the overall carrying value of inventories, necessitating additional audit effort. We involved our senior audit team members in assessing this key audit matter. Our procedures included: • Obtaining an understanding of the Group’s key processes for accounting for inventory, including valuation; • Assessing the Group’s policies for the valuation of finished goods inventory against the requirements of the accounting standards and our understanding of the business; • Comparing the cost of finished goods on hand to the latest current year selling price (as a proxy for expected selling price of inventory and net realisable value) and resulting gross margin for each product to identify evidence of any negative gross margin products at risk of selling below their recorded value. We compared any negative gross margin products against the Group’s inventory provision; • Assessing the integrity of the inventory provision, including the accuracy of the underlying calculations; • Attending stocktakes in significant locations, observing the Group’s processes, which included identifying slow moving and potentially obsolete finished goods inventory, performing sample counts ourselves, and comparing count results to the Group’s; • Obtaining external confirmations for third party managed locations and comparing the external parties’ records of inventory quantity to the Group’s; and • Assessing the disclosures in the Group’s financial report using our understanding obtained from our testing against the requirements of accounting standards. Ridley Corporation Limited Annual Report 2022
INDEPENDENT AUDITOR’S REPORT CONTINUED
84
Other information Other Information is financial and non-financial information in Ridley Corporation Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. The Other Information we obtained prior to the date of this Auditor’s Report was the Financial Review and the Director’s Report (including the Remuneration Report). The Introduction, Locations and Sectors, Chairman and CEO’s Report, Board of Directors, Shareholder Information and the Corporate Directory are expected to be made available to us after the date of the Auditor’s Report. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: • preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; • implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and • assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objective is: • to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and • to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf . This description forms part of our Auditor’s Report. Ridley Corporation Limited Annual Report 2022 I
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Report on the audit of the Financial Report Opinion In our opinion, the Remuneration Report of Ridley Corporation Limited for the year ended 30 June 2022 complies with Section 300A of the Corporations Act 2001. Directors’ responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in pages 9 to 18 of the Director’s report for the year ended 30 June 2022. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Julie Carey Partner Melbourne 18 August 2022 Ridley Corporation Limited Annual Report 2022
SHAREHOLDER INFORMATION
As at 8 September 2022
Holdings of securities – ordinary shares
Each fully paid
Distribution of holdings – ordinary shares
Number held
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
>100,000
Total
Number of holders
Number of
securities
% Held by 20 largest
shareholders
6,266
319,494,975
77.39%
Number of ordinary
shareholders
Number of ordinary
shares held
Percentage of ordinary
shares held
1,307
2,258
1,067
1,527
107
6,266
574,372
6,510,923
7,904,072
40,198,519
264,307,089
319,494,975
0.18
2.04
2.47
12.58
82.73
100.00
As at 8 September 2022, there were 503 holders of unmarketable parcels (comprising shareholdings less than 229 shares at $1.355 per
share) of ordinary shares.
20 largest fully paid shareholders
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
MR JAMES FONG SEETO
RCL RETIREMENT PTY LTD
LJ & K THOMSON PTY LTD
MR ROSS MERVYN JOHNS
UBS NOMINEES PTY LTD
ANGIP NOMINEES PTY LTD
MR RUSSELL LYONS
GARMARAL PTY LTD
BNP PARIBAS NOMS PTY LTD
MR LYNDEN WAYNE SMITH + MRS JANET GWENDOLEEN SMITH
BRISPOT NOMINEES PTY LTD
RATHVALE PTY LIMITED
MR MICHAEL PETER MCMAHON + MRS AMANDA JANE MCMAHON
Top 20 ordinary fully paid shareholders
Balance of ordinary fully paid shareholders
Number of
ordinary shares
% of fully paid
ordinary shares
118,251,101
48,400,827
28,211,697
25,932,599
8,117,485
3,768,662
2,106,247
1,700,000
1,589,290
1,550,000
1,300,000
1,114,191
1,000,000
672,144
657,635
618,884
600,000
576,198
564,316
541,750
247,273,026
72,221,949
37.01%
15.15%
8.83%
8.12%
2.54%
1.18%
0.66%
0.53%
0.50%
0.49%
0.41%
0.35%
0.31%
0.21%
0.21%
0.19%
0.19%
0.18%
0.18%
0.17%
77.39%
22.61%
86
Ridley Corporation Limited Annual Report 2022 Substantial Shareholders – circa 36.9% of issued capital
Insitor Holdings LLC2 / AGR Partners LLC
Tattarang Pty Ltd
Schroder Investment Management Australia Limited
Dimensional Fund Advisors Group
1. As per the latest Substantial Shareholder lodged with the ASX.
2. Subsequently changed name to AGR Agricultural Investments LLC.
Holding
60,727,615
20,864,186
19,888,828
15,954,589
% Holding1
19.73
6.53
6.23
5.14
Directors’ holdings
On 8 September 2022, the Directors of Ridley Corporation Limited had an interest in the following shares and performance rights
of the Company.
MP McMahon
QL Hildebrand1
PM Mann
RJ van Barneveld
E Knudsen
DJ Lord
R Jones
J Raffe
Fully paid
ordinary shares
Ridley performance
rights
541,750
323,323
99,044
83,053
703,286
134,275
115,000
25,906
-
3,639,855
-
-
-
-
-
-
2,025,637
3,639,855
1. The Board has approved the offer of 716,905 Ridley Performance Rights to Mr Hildebrand subject to shareholder approval at the 24 November 2022
Annual General Meeting of the Company.
Voting rights
As at 8 September 2022, the number of holders of Fully Paid Ordinary Shares with full voting rights was 6,266. On a show of hands,
every person who is a member or a representative of a member has one vote. On a poll, each shareholder is entitled to one vote for
each Fully Paid Ordinary Share held. A shareholder may appoint a maximum of two proxies to represent than at a general meeting.
87
INTRODUCTIONLOCATIONS & SECTORSCHAIR AND MANAGINGDIRECTOR’S JOINT REVIEWFIVE YEAR SUMMARYSUSTAINABILITY REVIEWBOARD OF DIRECTORSFINANCIAL REPORTCORPORATE DIRECTORYRidley Corporation Limited Annual Report 2022 GLOSSARY
AASB
AASBs
AGM
ASX
Board
CEO
CGU
CODM
Australian Accounting Standards Board
Australian Accounting Standards
Annual General Meeting
Australian Securities Exchange
Ridley Board of Directors
Ridley Chief Executive Officer & Managing Director
Cash Generating Unit
Chief Operating Decision Maker
Company
Ridley Corporation Limited
CSF Proteins
Rendering businesses at Laverton, Victoria and Maroota, NSW
CSIRO
Deed
EBIT
EBITDA
ECL
EPS
ESS
Facility
Fund
FY##
Group
GST
IASB
IBR
IFRIC
IFRS
IP
KMP
KPI
KPMG
Kt
LTIFR
LTIP
M, m
MTI
NGER
NPAT
P/E
PNFM
R&D
RDTI
Ridley
Rights
RIOC
ROFE
SaaS
SRP
STI
TEP
TRFR
TSR
VWAP
YOY
Commonwealth Scientific and Industrial Research Organisation
Deed of Indemnity between Company and its Directors and officers
Earnings before interest and tax
Earnings before interest, tax, depreciation and amortisation
Expected Credit Loss
Earnings per share
Ridley Employee Share Scheme
Long-term Loan Facility with ANZ and Westpac
Ridley Superannuation Plan – Australia
Financial year ended 30 June ##
Ridley Corporation Limited and its subsidiaries
Goods and Services Tax
International Accounting Standards Board
Incremental Borrowing Rate
International Financial Reporting Standards Interpretation Committee
International Financial Reporting Standards
Intellectual property
Key Management Personnel
Key Performance Indicators
Independent external auditor of Ridley
Thousand tonnes
Long Term Injury Frequency Rate
Ridley Corporation Long Term Incentive Plan
Million
Medically Treated Injury/ies
National Greenhouse and Energy Reporting Act 2007
Net Profit After Tax
Ratio of share price to earnings
Pen Ngern Feed Mill Co., Ltd
Research and Development
Research and Development Tax Incentive
Ridley Corporation Limited
Indeterminate Performance Rights issued under the LTIP
Ridley Innovation and Operational Committee
Return On Funds Employed
Software-as-a-Service
Special Retention Plan
Short Term Incentive
Total Employment Package
Total Recordable Frequency Rate
Total Shareholder Return
Volume Weighted Average Price
Year on year
88
Ridley Corporation Limited Annual Report 2022 CORPORATE DIRECTORY
Ridley Corporation Limited
ABN 33 006 708 765
Corporate office and registered office
Level 4, 565 Bourke Street
Melbourne Victoria 3000 Australia
Telephone 03 8624 6500
03 8624 6505
Facsimile
secretary@ridley.com.au
Email
www.ridley.com.au
ASX code RIC
Head office
Level 4, 565 Bourke Street
Melbourne Victoria 3000 Australia
Telephone 03 8624 6500
03 9960 6140
Facsimile
Ridley AgriProducts Pty Limited
ABN 94 006 544 145
www.agriproducts.com.au
CSF Proteins Pty Limited
ABN 77 000 499 918
www.csfproteins.com.au
Community interest
www.barastochorse.com.au
www.cobberchallenge.com.au
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Ridley Corporation Limited Annual Report 2022