LEADING ANIMAL
NUTRITION
Annual Report 2023
RIDLEY CORPORATION LIMITED
ANNUAL REPORT 2023
Ridley Corporation Limited (Ridley) is an integrated
animal feed manufacturer, serving a diverse mix
of species and lifecycles.
Contents
02 About the Company
03 Highlights
22 Board of Directors
24 Financial Report
04 Locations and Sectors
81 Independent Auditor’s Report
06 Chair and Managing Director’s
Joint Review
86 Shareholder Information
10 Five Year Summary
88 Glossary
12 Sustainability Review
89 Corporate Directory
ABN 33 006 708 765
ANNUAL REPORT 2023
RIDLEY CORPORATION LIMITED
01
RIDLEY CORPORATION LIMITED
ANNUAL REPORT 2023
About the Company
As Australiaʼs 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
We are one of the largest domestic
consumers of Australian-grown cereal
grains, and as a significant employer in
farming communities, Ridley is part of
the economic and social fabric of rural
Australia. Our integrated capability and
scale spans the production and sourcing
of raw materials, specialised nutrition
formulation, feed manufacturing and
on-ground sales support. This positions
Ridley to offer nutritional solutions for
food producers, navigate changing
market conditions and manage price
volatility in raw materials.
We cater to 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.
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.
Ridley’s scale allows dedicated
facilities for some species and premium
quality products at competitive prices
supplied from facilities located in South
Australia, Victoria, New South Wales and
Queensland. Our feed manufacturing
facilities consist 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 protein meals and
animal fats, which are valuable raw
materials for animal feed. In addition,
the animal fats are increasingly being
used as a feedstock for renewable
diesel production.
Our 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 internationally.
With major brands including Barastoc,
Rumevite, Cobber, Primo, Propel
and Food for Dogs, backed by highly
experienced nutritionists, Ridley has
developed a portfolio that provides
a first-class lifecycle solution.
Our trusted brands:
02
ANNUAL REPORT 2023
RIDLEY CORPORATION LIMITED
Highlights
Earnings growth
• 10% YoY EBITDA growth
from ongoing operations
Disciplined Capital
Management
Delivering returns
to Shareholders
• Effective cash conversion
• Total Shareholder Return (TSR)
• Both reporting sectors
• Orderly inventory reduction
of 16%
contributing
• Deployed maintenance ($11m)
and growth ($23m) capex
in line with framework
• Maintained a strong
balance sheet
• Increased dividends paid/
determined (interim 4.00 cps
+ final 4.25 cps fully franked)
• On-market share buy-back
concluded ($7m @$ 1.92/share)
EBITDA (underlying)
NPAT
Operating cash flow
$88.5m
+10.5% YoY growth
$41.8m
$105.3m
Reported: -1% YoY growth
pcp $72.2m
Underlying: +15.5% YoY growth
ROFE (underlying)
12.2%
pcp 10.9%
Leverage
0.33x
pcp 0.29x
Dividend (100% franked)
8.25cps
pcp 7.4 cps
03
Locations and Sectors
Thailand
Queensland
South
Australia
New South Wales
Victoria
04
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Bulk Stockfeeds
Packaged Feeds and Ingredients
Business
Unit
Products
Monogastric Ruminant
Pellet, meals,
concentrates
and premixes
for poultry
and pigs.
Pellet, meals,
concentrates
and premixes
for dairy cattle,
beef cattle
and sheep.
Ingredient
Recovery
Rendered
poultry, red
meat and fish
products for
the pet food,
stockfeed,
aquaculture
and biofuel
sectors.
NovaqPro®
Novel value-
adding feed
ingredient
being
commercialised
for sale into
prawn feed
globally.
Packaged
Products
Bagged
poultry, dairy,
dog, horse
and lifestyle
animal feed.
Supplements Aquafeed
Block and
loose lick
supplements.
Extruded and
steam pelleted
products for
all major fin
fish and
prawns.
05
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Chair and Managing Director’s Joint Review
“ Our geographical spread,
multi-species offering,
customer mix and disciplined
risk management can provide
earnings resilience through
weather, disease and
market cycles.”
Mick McMahon
Chair and Independent
Non-Executive Director
Quinton Hildebrand
Chief Executive Officer
and Managing Director
Another year of strong momentum
in the business as Ridley continued
to deliver high-performance animal
nutrition solutions to customers,
while increasing earnings and
maintaining a strong balance
sheet to support future growth.
We are pleased to present the Annual
Report for FY23 - highlighting our
ongoing delivery of high-performance
products for customers to meet
increased demand; continued success
in growing earnings; and delivering key
strategic initiatives. Our ongoing progress
in delivery against strategic objectives
in turn has allowed for continued capital
investment to support future growth
and improved value for shareholders.
Delivering for Customers
In FY23, Ridley continued to leverage
its integrated scale and capability to
deliver high quality, cost effective
nutrition products to our customers.
This included supplying the dairy, poultry,
pig, aquaculture, sheep and beef bulk
feed sectors; the equine, canine and
home layer markets in the packaged
product sector; and providing protein
meals and animal fats from our ingredient
recovery facilities to stockfeed, petfood
and biofuel industries. We did this while
successfully overcoming post pandemic
supply chain challenges, the impacts of
regional flooding and navigating
inflationary pressures.
Solid Operational
Performance
The first priority of Ridley’s Board
and Management is the safety of our
employees, suppliers and customers.
In FY23, Ridley recorded a Lost Time
Injury Rate (LTIFR) of 5.15 and Total
Recordable Frequency Rate (TRFR) of
8.83. We continue to focus on engaging
our employees in behavioral safety
initiatives and during the year introduced
mental health first aid training.
The Packaged Feeds and Ingredients
segment lifted earnings significantly
with an EBITDA of $65.8m (FY22:
$58.0m). The Ingredient Recovery
business unit was the primary driver of
this increase where there is an ongoing
strategy to invest in differentiating our
products for premium markets which is
generating higher returns. In FY23, the
business also benefitted from higher
market prices for rendered tallows, oils
and protein meals in the first half (H1).
Whilst these prices moderated in H2,
higher volumes offset the price impact.
Volumes through the Packaged Products
business grew by 6% year on year as we
expanded market share and increased
pet product lines into urban retail chains.
The Aquafeed sector underperformed,
resulting in more extrusion capacity
being allocated to petfood production.
NovaqPro® operations delivered their
first profit through sales growth,
primarily to domestic prawn customers,
and cost reductions with the ongoing
improvement in operating efficiency
at the Thailand facility.
The Bulk Stockfeeds segment
contributed an EBITDA of $36.0m
(FY22: $34.4m). The strategy to
leverage our procurement and nutrition
(continued on page 8)
06
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 ANNUAL REPORT 2023
RIDLEY CORPORATION LIMITED
SUMMARY ($ million unless otherwise stated)
Total Comprehensive Income - Net Profit After Tax (“NPAT”)
Comprehensive Income (NPAT) – ongoing operations
EBITDA - ongoing operations1
Operating cash flow2
Consolidated cash inflow / (outflow)3
Net debt
Leverage ratio (times)4
Earnings Per Share – ongoing operations (cents)
2023
41.8
41.8
88.5
105.3
(6.6)
29.5
0.33
13.4
2022
42.4
36.2
80.1
72.2
60.2
22.9
0.29
11.3
Movement
0.6
5.6
8.4
33.1
(66.8)
6.6
0.04
2.1
1. FY23 calculated as NPAT of $41.8m adjusted for Net Finance Costs ($5.1m), Tax Expense ($16.8m), Depreciation and Amortisation ($24.8m).
2. FY23 operating cash flow is EBITDA ($88.5m) plus or minus the change in working capital ($16.8M).
3. Calculated as Closing Net debt less Opening Net debt.
4. Calculated as Net debt / Last 12 months EBITDA per banking facility covenant calculations.
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.
07
Chair and Managing Directorʼs Joint Review continued
capability, increase asset utilisation
and share scale benefits with our
customers is continuing to deliver
with volume growth of 3% in
monogastric sales and 11% in ruminant
sales in FY23. The challenges reported
in H1, where margins were impacted by
wet conditions delaying the transition
to lower priced new season grains,
normalised in H2.
All business units continued their focus
on operating efficiency whilst ensuring
that where inflationary costs could not
be off-set that they were passed through.
Continued Earnings Growth
In FY23, earnings grew to $88.5m, up
10.5% on the prior year, based on our
key financial metric of EBITDA from
ongoing operations. This outcome was
achieved through increased contributions
from both reporting segments as we
executed on the first year of the
FY23-FY25 Growth Plan.
The key financial indicators are
summarised in the table on page 7.
The Total Comprehensive Income of
$41.8m reflected an underlying 15.5%
increase on prior year when excluding
the FY22 gains from individually
significant items of $8.9m ($6.2m after
tax), primarily related to the sale of the
Westbury Facility and other surplus
assets. The operating cash flow of
$105.3m for FY23 (FY22: $72.2m)
represents the significant improvement
made by the business in reducing the
strategic inventory that had been held
previously to manage unreliable supply
chains due to COVID-19 disruptions.
This efficient cash conversion
permitted the funding of increased
dividend payments of $8.2m and a
$7.0m share buy-back whilst maintaining
a comfortable Net Debt as at 30 June
2023 of $29.5m (FY22: $22.9m).
Disciplined Capital
Management
The Board continues to diligently apply
the Capital Allocation Framework as
a means of enforcing capital discipline
in the business with the objective
of maximising shareholder returns.
“ Cash generated from operations, and a strong
balance sheet, are expected to support the
ongoing investment in the business, the payment
of progressive dividends and the potential to
pursue growth opportunities.”
In FY23, $11.3m was committed to
maintenance capex and $23m to
growth capex projects. The growth
capex included four de-bottlenecking
projects, the ongoing delivery of Project
Boost and various other capability
enhancing projects.
During FY23, an on-market share
buy-back was undertaken through
which $7m was expensed to acquire
3.66 million shares. The Board
determined dividends for the period
totaling $25.5m (FY22 $17.3m) or
8.25c/share fully franked.
The strength of the balance sheet was
maintained with net debt increasing
by just $6.6m despite the increased
dividend, share buy-back and
investment in growth. The leverage ratio
was 0.33x at year end which is well
below the 1 to 2x guidance in our Capital
Allocation Framework and the banking
facility covenant of 3.25x. This result
displays resilience through macro-
economic uncertainty and provides a
platform
from which the business can take
advantage of opportunities that
present themselves for investment.
Sustainability Pathway
During the year we have continued to
develop Ridley’s Sustainability Pathway
which was released in May 2022. Building
on the 4 pillars of Smarter Ingredients,
Optimised Production, Effective Solutions
and Meaningful Partnerships, we have
established our baselines and identified
2030 targets for 14 key deliverables.
Our commitments are designed to
improve the sustainability of our supply
chains and provide Ridley with a
competitive advantage. A more fulsome
explanation of Ridley’s approach to
Sustainability is included in this report.
business continued to “climb the wall
of value” by segregating homogenous
raw materials from suppliers to produce
bespoke protein meals and oils for
targeted customers. During this period,
the business has been successful
in extending contracts with suppliers
to underpin the ongoing capital
expenditure to produce higher-value
products, predominantly for the petfood
and aquafeed sectors. We also initiated
a number of projects to reduce the
carbon intensity of our supply chain,
which not only lowers our costs but
makes our tallows and oils more valuable
in the renewable diesel supply chain.
In relation to Packaged Products, the
Narangba packing line is on schedule
to be completed by the end of December
2023. This unlocks an additional 10%
extrusion capacity and, with the flexibility
between companion (dog) and aquafeed,
we can allocate this to the highest
returning market.
As mentioned, NovaqPro® operations
delivered their first profit. The strategy
is to continue to extend the application
of NovaqPro® in Australia and pursue
targeted international markets.
The strategy of the Bulk Stockfeeds
Segment is to increase market share
through supporting the growth of our
customers and acquiring new customers.
This is achieved through providing quality
products, differentiated service and
sharing the economic benefits of Ridley’s
scale. To support this strategy, during the
year de-bottlenecking projects were
completed at four feed mills which have
increased installed capacity by 10%. We
believe this will provide us with 2 years
sales growth runway on our current
assumptions. In addition, two further
de-bottlenecking projects were approved
which will increase capacity by a further
5% when complete at the end of FY24.
Looking Forward
With a well-defined Growth Plan, strong
balance sheet and disciplined approach
to capital management, Ridley is well
positioned to execute on opportunities
to create shareholder value. Being the
With the focus on working capital and the
reduction in levels of strategic inventory,
the business was efficient in converting
earnings to cash.
Building the Growth Platform
Whilst delivering growth in year, we
have also been developing our capability
for future growth.
Within the Packaged and Ingredients
Segment, the Ingredient Recovery
08
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Chair the Remuneration and Nomination
Committee, Julie Raffe will Chair the
Audit and Risk Committee, and Mick
McMahon will Chair a new Sustainability
Committee which replaces the Ridley
Innovation and Operational Committee.
The Sustainability Committee will assist
the Board with environmental, social,
governance and sustainability matters
relevant to Ridley.
Acknowledgements
On behalf of the Board, we would like
to recognise the efforts of our employees
in delivering this outcome for the
business in FY23. We also appreciate
the collaboration of our customers
and suppliers which has enabled
us to collectively drive improvements
in the supply chain.
We express our thanks to the Directors
and Executives of Ridley for their shared
leadership of the business through
the year.
And finally, we acknowledge our
shareholders who have chosen to
support our journey by investing in Ridley.
[Insert Signature]
Mick McMahon
Director and Ridley Chair
Quinton Hildebrand
CEO and Managing Director
market leader in the animal nutrition
sector, Ridley enjoys scale benefits and
has the capacity to employ specialists
and adopt technology which should allow
us to continue differentiating our offering
and margins.
As supply chains evolve to meet
sustainability expectations, Ridley’s
capability and products can deliver
profitable solutions for our customers.
Our geographical spread, multi-species
offering, customer mix and disciplined
risk management can provide earnings
resilience through weather, disease
and market cycles.
With forecasts for protein, consumed
by humans and pets, and feedstock
for renewable fuels, all expected to
increase, this is likely to underpin
demand for Ridley’s products.
So, as a short-term outlook, Ridley
expects ongoing earnings growth for
the year ahead by delivering further
premiumisation for the petfood sector
in the Packaged and Ingredients
segment and volume increases in
the Bulk Stockfeeds segment enabled
by the de-bottlenecking projects.
Macro-economic conditions are
expected to remain challenging,
however the business continues to take
steps to reduce the adverse impact of
inflationary pressures and changes in
commodity cycles.
Cash generated from operations, and a
strong balance sheet, are expected to
support the ongoing investment in the
business, the payment of progressive
dividends and the potential to pursue
growth opportunities.
Board Succession
Over the past year, Ridley has actively
managed Board succession, to ensure a
talented, experienced and diversified
Board that will deliver shareholder value
over the medium and long-term. On 1
September 2022, and in anticipation of
the retirement of David Lord, we
welcomed Julie Raffe to the Board. Most
recently, we welcomed Melanie Laing to
the Board, appointed from 1 September
2023. This latest appointment coincides
with the retirement of longstanding board
members Patria Mann and Prof. Robert
van Barneveld and we would like to thank
Patria and Rob for their invaluable
contribution to Ridley over many years.
It is intended that with effect from
the 2023 AGM, Melanie Laing will
RIDLEY CORPORATION LIMITED
09
ANNUAL REPORT 2023 Five Year Summary
Five year summary A$ʼ000
Operating results
Revenue
Other income
EBITDA
Depreciation and amortisation (DA)
Earnings before interest and tax (EBIT)
Net finance cost
Operating profit/(loss) before tax
Tax (expense)/benefit
Net profit/(loss) 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 – in A$ʼ000 unless otherwise stated
Ridley shareholdersʼ funds
Intangible assets
Total assets
Total liabilities
Net debt
Market capitalisation
Enterprise value (market capitalisation plus net debt)
Development capital expenditure
Operating cash flow (statutory)
Closing share price (cents)
Weighted average number of shares on issue – non-diluted (thousands)
Number of employees (number)
Key profitability ratios
Sales tonnes (millions)
EBITDA/tonne ($)
EBITDA: shareholdersʼ funds (%)
Return on shareholdersʼ 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$ʼ000)
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)
EBITDA growth (%)
Enterprise value/EBITDA (times)
Price/Earnings (P/E) ratio (share price/EPS) (times)
Net debt/shareholdersʼ 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 (%)
10
2023
2022
2021
2020
2019
1,259,734
328
88,503
24,781
63,722
5,086
58,635
(16,810)
41,825
-
41,825
-
41,825
1,049,086
13,045
80,144
25,775
63,303
2,849
60,453
(18,024)
42,430
-
42,430
(6,253)
36,177
315,386
73,988
617,701
302,315
29,477
631,665
661,142
23,012
79,081
200.00
318,567
660
316,029
74,972
607,365
291,336
22,901
571,896
594,797
10,900
46,588
179.00
319,495
613
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
318,910
612
967,942 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
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
312,285
622
277,499
85,670
573,754
296,255
101,443
366,875
468,318
60,000
36,824
119.00
308,298
697
1.94
45.69
28%
13.3
13.1
16.2
(1.1)
10.4
0.9
24.8
8.0
134.1
4%
17.4
7.1
27.8
10.4
7.5
15.2
9.3
51.1
0.3
75.8
8.25
62.8
100
1.82
44.04
25%
13.4
13.3
61.8
70.1
15.9
0.6
14.6
12.3
130.7
4%
28.1
7.1
25.1
15.9
7.4
13.5
7.2
52.0
0.3
75.4
7.40
55.7
100
1.75
39.53
24%
8.7
7.8
60.0
324.4
358.6
1.2
26.9
4.2
113.0
19%
15.3
5.3
21.7
358.6
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
(72.2)
24.8
(20.8)
56.7
40.3
9.8
59.1
1.50
(43.6)
100
1.89
28.74
20%
8.5
7.6
(10.4)
33.3
24.5
0.7
11.9
10.0
77.9
22%
10.7
6.8
17.6
24.5
8.6
15.7
36.6
48.4
1.9
62.2
4.25
56.6
100
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 EBITDA from Continuing
Operations
Consolidated
NPAT
Operating Cash Flow
(Statutory)
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1. Payable in respect of the financial year.
Leverage Ratio
(Per Banking Facility)
Earnings Per Share
s
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3.0
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3
0
-3
-6
.
3
3
1
1
.
3
1
6
.
7
8
.
7
.
5
3
-
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
11
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
• Effective Solutions: The activity
“Produce quality safe feeds that
support good animal health and
welfare” has been adjusted to remove
the words “quality” and “good” as our
focus is on biosecurity under this Pillar.
• Optimised Production: “Respect for
local environment” has been altered
to “Respect for environment through
sustainable packaging” to better
reflect our intended focus.
“Identify and mitigate climate risk” has
been added to the Sustainability Pathway
framework in recognition of the need for
our business to be aware of, and where
practical and viable, act to address,
operational and business risks
associated with climate change.
The updated Sustainability Pathway
is shown on the following page.
Sustainability Review
At Ridley, we believe we can contribute to solving
food production challenges of today and tomorrow
through smart animal nutrition.
Our process
Building on work done in FY22 to develop
Ridley’s pathway, this year’s focus has
been to refine what we want to achieve
and how we intend to get there. To do
this, each of our General Managers was
tasked with developing clear baselines
of current performance in key areas
and scoping potential opportunities for
improving performance in the future.
The results of this analysis have been
used to set clear commitments and
create a roadmap to 2030 to guide
our future effort. This process involved
engaging with our customers, suppliers
and employees to ensure intended
outcomes are both practical and
meaningful.
To support our commitments and
roadmap, four of the activities described
under the Pillars in Ridley´s Sustainability
Pathway were updated. The changes,
and the reasons for making them, are
described below:
• Smarter Ingredients and Effective
Solutions: The activities “Create high
performance circular ingredients”
and “Utilise high-performance circular
ingredients” were merged to form
a single activity: “Create and utilise
high-performance circular ingredients”.
• Effective Solutions: The activity
“Measure and reduce the
environmental footprint of our raw
materials” was moved from the
Smarter Ingredients Pillar to the
Effective Solutions Pillar. This is
because it is through our knowledge
of feed formulation that we can best
influence this area. In addition, we
have further scoped this activity to
“Assess the environmental footprint
of our feeds and offer lower CO2e
intensity options”.
In May 2022, Ridley released its
Sustainability Pathway, charting our
intended path to embedding smart
animal nutrition as a key contributor
to identifying and actioning more
sustainable and profitable ways of
farming. By building on the good
work already done by our teams, we
believe we can contribute to a more
sustainable food supply system as
well as find ways to make our own
business more sustainable.
Our Sustainability Pathway is supported
by a step-by-step approach that builds
a solid foundation for our sustainability
strategy, including capturing what we
already do, followed by action to drive
improvement over time.
Our approach to sustainability moves
beyond compliance. At Ridley, we
assist our people to drive meaningful
change, which, in turn builds
competitive advantage.
Our Sustainability Pathway
Ridley’s Sustainability Pathway,
underpinned by our four Sustainability
Pillars – Smarter Ingredients, Optimised
Production, Effective Solutions, and
Meaningful Partnerships – is designed
to support the delivery of real value
in more sustainable ways.
The Sustainability Pillars draw on seven
of the 17 United Nations Sustainable
Development Goals (see Table on page
13), which help shape how we see
Ridley’s role in addressing global
sustainability challenges. This includes
working with our customers and
suppliers within the food and farming
ecosystem to better prepare us to take
on challenges such as scarce resources,
emissions, climate change impacts
and social inequities. The four Pillar
methodology also assists us to improve
current levels of production, and
encourage growth in a manner which is
responsible, sustainable and profitable.
12
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Our updated Sustainability Pathway
SMARTER
INGREDIENTS
Sourcing high-quality
raw materials that
are produced with
respect to social and
planetary boundaries.
• Create and utilise
high-performance
circular ingredients
• Source from well-
managed production
systems
• Support Australian
growers
OPTIMISED
PRODUCTION
EFFECTIVE
SOLUTIONS
Optimising our
manufacturing and
supply chain processes
to reduce our footprint.
Developing nutritional
solutions that enable
farmers to produce
more from less.
MEANINGFUL
PARTNERSHIPS
Creating safe, healthy
and diverse workplaces
that support local
communities.
• Measure and reduce
• Measure the
greenhouse gas
intensity of our
operations
• Respect for our
local environment
through sustainable
packaging
• Reduce waste
to landfill
environmental
footprint of our feeds
and offer lower CO2e
intensity options
• Produce safe feeds
that support animal
health and welfare
• Help farmers to
address climate
challenges
• Reduce reliance on
finite marine resources
• Support customers
to meet their
sustainability goals
• Ensure safe and
healthy employees
• Create diverse
workplaces
• Provide training
and development
opportunities
• Support local
communities
13
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 RIDLEY CORPORATION LIMITED
ANNUAL REPORT 2023
Sustainability Review continued
Our Management Approach
Our approach to addressing each key focus area in our Sustainability Pathway is set out below – followed by Ridley’s
2030 Sustainability Commitments.
‘Our Management Approach’ should be read with the ‘Our Commitments’ section of this report.
Smarter Ingredients
“Sourcing high-quality raw materials that are produced with respect to social and environmental boundaries.”
Create and utilise high-performance circular ingredients
Ridley’s Ingredient Recovery business, sources by-products derived from animal production industries (raw materials) and
processes these materials into high-performance animal proteins for use in animal feeds. In a circular process, co-products that
might otherwise go to landfill, are recycled to create a range of animal diet ingredients. During FY23, using the Life Cycle
Assessment (LCA) Methodology, we assessed the carbon footprint of Ridley manufactured ingredients produced by the Ingredient
Recovery business to enable both Ridley, and its’ customers, to gain a better understanding of the environmental impacts of our
circular ingredients.
Source from well managed production systems
Over the past few years, we have upgraded our supplier approval process to incorporate greater due diligence around the
environmental and social credentials of our suppliers. Together with our customers, we identified deforestation as a material
sustainability issue facing our sector. To address deforestation, we are now committing to source 100% of our soybean products
from suppliers that are committed to offering Deforestation and Conversion free (DCF) supply chains by 2030. We will achieve this
through a combination of (1) supplier engagement to promote transparency and traceability within the soy supply chain; and (2)
updates to our supplier approval process to ensure we are able to monitor progress and create compliance.
Support Australian growers
Ridley is a proud Australian company, headquartered in Victoria, and with deep connections to rural and regional Australia. We
support Australian growers, with over 70% of our farm produced ingredients sourced from Australian farms. There are various
reasons why Ridley imports some ingredients, for example, where ingredients are not produced in Australia or are not locally
available in required quantities.
14
ANNUAL REPORT 2023
RIDLEY CORPORATION LIMITED
Optimised Production
“Optimising our manufacturing and supply chain processes to reduce our footprint.”
Measure and reduce GHG intensity of our operations
As a source of both environmental and economic cost, minimising the energy used to power our mills is a constant focus of our
operations teams. This year we engaged a third-party consultant to undertake an energy assessment of our mills including audit
data from six Ridley sites (representing our key operations being monogastric, ruminant, aqua and ingredient recovery) to better
understand where energy is being used and lost from our facilities, and what actions Ridley can take to optimise energy use and
reduce GHG emissions. Based on this work, Ridley has a clear and actionable plan in place to reduce scope 1 and scope 2
greenhouse gas emissions against an FY23 baseline by at least 10% per tonne of finished product by 20301.
Respect our local environment – sustainable packaging
Ridley has a relatively low outgoing packaging footprint due to the high volume of product sold in bulk. Regardless, we take the
issue of plastic pollution seriously and are committed to playing a role in the reduction of plastics and driving demand for more
sustainable packaging solutions. As such, we aim to reduce the amount of packaging material used for our outgoing woven
polypropylene (WPP) Packaged Products. Specifically, we aim to reduce the weight of this packaging by an average of 10% per unit2
against a FY23 baseline and switch to single polymer recyclable bags for outgoing bulk bags. We will also continue to engage with
our suppliers to stay up to date with new technologies, and when commercially available and viable, we will transition to single
polymer formats that are recyclable for our pet specialty products.
Reduce waste to landfill
To identify opportunities to reduce waste to landfill, Ridley has engaged a national waste contractor commencing FY24 to collect,
manage and report on waste volumes and categories at an enterprise level. Once we have 12 months of detailed data, we will set a
baseline, reduction targets and develop the strategy we will adopt to achieve these targets by 2030.
1. This commitment targets Ridley’s scope 1 emissions from the burning of natural gas onsite as well as the
scope 2 emissions from the use of electricity.
2. Assessed as an average per unit across the range of outgoing packaging.
15
Sustainability Review continued
Effective Solutions
“Developing nutritional solutions that enable farmers to produce more from less.”
Assess the environmental impact of our feeds and offer lower CO2e intensity options
Feed formulation can play an important role in the overall environmental impact of animal production through ingredient selection.
In FY23, we conducted a series of Life Cycle Assessments to better understand the environmental impacts of a selection of Ridley
manufactured ingredients and feeds. We are committed to extending this work over the coming years, with the aim to have
up-to-date information on the GHG intensity of all major feed ingredients used and manufactured by Ridley by 2030. This will be
accompanied by the continual upskilling of our nutrition and technical staff to ensure they have the knowledge and capability to
balance nutritional, financial and environmental impact requirements when formulating our feeds. This approach will enable us to
deliver on our commitment to offer lower GHG intensive feeds as well as the technical expertise to assist our customers to reduce
the GHG intensity of their own products through animal nutrition.
Produce high-performance circular ingredients
Our Ingredient Recovery business draws on circular economy principles of designing out waste and pollution and recirculating
products and materials. We do this by turning materials that are not suitable for human consumption into high-quality ingredients,
which can replace the need to grow other protein sources. We continue to work with our suppliers to ensure the quality credentials
of these materials, as well as our clients to encourage them to take a more circular approach to feed formulation.
Produce safe feeds that support animal health and welfare
The provision of safe feeds is at the core of our business. To demonstrate our commitment to this principle we have challenged
ourselves to adopt more enhanced biosecurity standards than those applied by the FeedSafe Certification Rules as at 20231
in regions of high biosecurity risk2 by 2030. To achieve this, we will engage a third party to identify these regions and dedicate
resources to the implementation of the equipment and/or infrastructure required to minimise these risks.
Help farmers to address climate challenges
The livestock sector is facing increasing pressure from consumers and regulators to reduce the methane emissions associated
with the production of ruminants (beef and dairy). Ridley is well-positioned to assist animal producers respond to these demands
through the provision of smart nutrition solutions. We also know that substantial research is being conducted on developing
methanogenic feed additives worldwide. Ridley is committed to actively exploring the potential use of commercially viable and
scientifically sound feed additives, applying its expertise to adapt such solutions to Australian conditions, and serving as a channel
to deliver them to the local industry. Ridley will also explore development and/or promotion (either ourselves or with third parties)
of two commercially viable nutritional approaches which reduce the CO2e intensity in dairy and/or beef production. This could be
achieved by a focused effort to improve productivity through nutrition, supported by the collection of quality data to substantiate
the claims made. This commitment relies on commercially viable technical nutrition solutions that could be available, but are
currently not subject to widespread use, in which case our efforts will support a faster pace of adoption.
Reduce reliance on finite marine resources
Ridley has made significant progress over the years to support the reduction of forage marine ingredients used in its commercially
available aquaculture diets, for example, barramundi, yellowtail kingfish, salmon and shrimp, through investment into the
development of alternative sources of protein and fat. This has resulted in improvements in the Fish In Fish Out (FIFO) and Fish
Feed Inclusion Factor (FFIF) ratios, which are commonly used to assess the environmental performance of aquaculture producers.
We are committed to helping the aquaculture sector to continue to reduce its reliance on forage marine resources, with the aim of
100% of Ridley barramundi and prawn feeding programs to deliver FFIF and FIFO ratios of less than 0.25 by 20303 estimated at a
Feed Conversion of 1.6. This will be achieved through the adoption of emerging technologies such as our NovaqPro® product and
substitutions for more sustainable alternatives such as chicken protein concentrate.
1. FeedSafe Certification Rules – Version 12 – 17 April 2022.
2. Risk assessment is based on the size and location of Ridley mills and the number of animals that would be affected if an outbreak occurred.
3. The Best Aquaculture Practices Standard (BAP Issue No. 3.1 Effective on 07-Feb-2023) sets a maximum FIFO ratio of 1.0 for whiteleg shrimp,
1.2 for black tiger shrimp and 4 for other species.
16
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 ANNUAL REPORT 2023
RIDLEY CORPORATION LIMITED
Meaningful Partnerships
“Creating safe, healthy and diverse workplaces that support local communities.”
Support customers to meet their sustainability goals
Ridley acknowledges that the sustainability challenges facing our sector will require collaboration between the multiple players
within our value chain. As such, we are committed to supporting our customers to meet their own sustainability goals through
ongoing customer engagement in relation to sustainability challenges. As part of this commitment, we are upskilling key staff within
the business in LCA methodology to ensure they understand the factors driving environmental impacts and are well-positioned to
assist our clients to calculate and reduce scope 3 emissions, without negatively impacting on the nutritional and functional
attributes of feeds.
Ensure safe and healthy employees
Good management of the safety and health of employees is fundamental to the on going success of our business. In addition to
meeting our legal obligations, we have an absolute commitment to our employees to foster an environment where they can perform
their duties safely. Our ever-evolving safety programs now include a well-being strategy and action plan, mental health first aid
training and the ongoing support and guidance of a qualified HSE team.
Create diverse workplaces
We are committed to having a workforce culture that fosters diversity. We believe diverse, equitable and inclusive (DEI) work
environments have benefits for both employees and employers. These include improved performance, the attraction and retention
of talent, higher innovation revenues and a more balanced approach to decision making and risk management. Ridley’s initial targets
for DEI are gender related as women are significantly under-represented in our workforce, with a commitment that 30% of Ridley’s
employees will be female by 2030. This will be achieved through a focus on leadership, pay equity, training and embedding an
inclusive culture that supports diversity. We will continue to address diversity more broadly via our diversity and inclusion strategy
and action plans.
We also recognise the importance of respecting Indigenous communities and their heritage. To demonstrate this, we commit to
developing, implementing and embedding a Reconciliation Action Plan (RAP) into our business by 2030.
Provide training and development opportunities
Investing in the development of Ridley’s workforce will help future-proof our business, and the local communities in which we
operate, by ensuring our employees have the right skills and capabilities to address the everchanging needs of our industry.
Workforce development will also help to attract and retain high-quality employees, foster innovation and increase employee
satisfaction levels. Therefore, Ridley is committed to embedding a formalised learning and development program that includes an
annual review of Ridley’s requirements and development plans, to ensure our business has “future fit” skills by 2030. We will achieve
this through the implementation of a continuous cycle of needs assessment, gap analysis and planning to ensure our employees
and our business have the capabilities required to remain competitive.
Identify and mitigate climate risk
As our climate continues to change, so too does the environment
in which our business and supply chain operates. As such, Ridley
seeks to actively identify, and where practicable and viable
manage, climate-related risks and opportunities within Ridley’s
operations including integrating such risks as a consideration in
strategic decision making. To guide us in this process, we will be
looking to emerging standards such as the International Financial
Reporting Standards (IFRS) Climate-related Disclosures and the
Task Force on Climate-related Financial Disclosures (TCFD).
17
Sustainability Review continued
Our Commitments
Ridley’s 2030 Sustainability Commitments are presented in the table below.
The 2030 Sustainability Commitments are the targets Ridley intends to reach
by 2030. Each commitment has been developed based on comprehensive,
action-based management plans.
The 2030 Commitments should be read with the Definitions section.
Pillar
Activity
Smarter
Ingredients
Source from
well-managed
production
systems
Intent of
Commitment
Support
reduction of
deforestation
and conversion
Optimised
Production
Measure and
reduce GHG
intensity of
our operations
Reduce CO2e
per tonne of
finished product
from energy
consumption
Respect
our local
environment
– sustainable
packaging
Utilise
sustainable
packaging
for outgoing
products
FY23 Baseline
2023: Currently, in the manufacture of
its feeds, Ridley does import soybean
meal from (1) Argentina only; and (2)
from suppliers of Argentinian soybean
who are members of the Round Table
on Responsible Soy (RTRS) and
therefore committed to improving the
traceability of their product and to
sourcing from Deforestation and
Conversion Free (DCF) supply chains.
2023: Based on audit data from
six Ridley sites representing
monogastric, ruminant, aqua and
ingredients recovery, a baseline
of circa 106kg of CO2e per tonne
of finished product produced
through energy consumption
has been established.
2030 Commitment
Ridley will:
• In the manufacture of its feeds, commit to
purchasing 100% of our soybean products
from suppliers that are committed to offering
Deforestation and Conversion Free (DCF)
supply chains by 2030.
Ridley will:
• Reduce by more than 10%, the CO2e per
tonne of finished product derived from
energy consumption by 2030, from the
FY23 baseline.
2023: Ridley uses:
Ridley will:
• over 400T of non-biodegradable
or non-recyclable packaging for
outgoing Packaged Products
per year; plus
• outgoing bulk bags across the
Ridley business.
• With respect to its outgoing Packaged
Products:
– reduce woven polypropylene (WPP)
packaging weight by 10% against FY23
Packaging Specifications.1
– transition to single polymer formats for
our pet specialty products if recyclable or
single polymer formats as they become
commercially available and viable.2
• With respect to outgoing bulk bags:
– use only 100% single polymer recyclable
bulk bags.
Ridley will:
• Work with waste contractor to obtain
standardised data which can be used
to determine a reliable baseline and set
a clearly defined path aligned with an
evidence-based approach to implement
initiatives that reduce Ridley’s waste to
landfill by 2030.
Ridley will:
• Maintain an up-to-date database of
environmental impact metrics for all major
feed ingredients used and manufactured
by Ridley calculated using Life Cycle
Assessment (LCA) methodology.
• Offer lower footprint feed options
to customers.
Ridley will:
• Adopt enhanced biosecurity standards
than those applied by the FeedSafe
Certification Rules as at 2023 at mills
located in higher-risk areas.3
Reduce waste
to landfill
Reduce waste
going to landfill
Currently, Ridley works with
different waste removal providers and
does not have a standardised data set
to determine a reliable baseline.
Effective
Solutions
Assess the
environmental
footprint of
our feeds and
offer lower
CO2e intensity
options
Offer lower
CO2e intensity
animal feeds
2023: There are currently limited
environmental impact metrics
available on Ridley feeds or
Ridley-manufactured ingredients.
Strengthen
biosecurity
Produce quality,
safe feeds that
support animal
health and
welfare
2023: All Ridley feed mills are
FeedSafe Certified (Stockfeed
Manufacturers’ Council of Australia
Quality Assurance Accreditation
Program FeedSafe).
18
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Pillar
Activity
Intent of
Commitment
FY23 Baseline
Effective
Solutions
continued
Help farmers to
address climate
challenges
Reduce GHG
intensity of
ruminants
2023: In spite of recent progress
in the development of methanogenic
feed additives, no solution of proven
efficacy and demonstrated to be
commercially viable within local
industrial settings, is currently
available in the Australian market.
2030 Commitment
Ridley will:
• Actively explore the potential use of
commercially viable and scientifically
sound feed additives, apply its expertise
in adapting nutrition solutions to the
Australian conditions, and serve as a channel
to deliver them to the local industry; and
• Develop, and/or promote either by itself
or in collaboration with third parties,
two commercially viable nutritional
approaches capable of reducing CO2e
intensity by 20% per unit of milk and/or
meat production as demonstrated by a
reputable research institution.
Ridley will:
• Offer 100% of Ridley barramundi and prawn
Feeding Programs in 2030 to deliver FFIF
and FIFO ratios at less than 0.25 against
the FY2023 Aquafeed Baseline by 20304
estimated at a Feed Conversion of 1.6 for
both species.
Ridley will:
• Offer technical expertise to assist customers
to reduce the GHG intensity of customer’s
products through animal nutrition.
Ridley will:
• Continue to foster an environment where
they can perform their duties safely.
Ridley will:
• ≥ 30% of Ridley’s employees to be female
by 2030.
• Have an embedded RAP or equivalent
by 2030.
Ridley will:
2023: Ridley Aqua Feed Programs
FY23 currently meet FFIF and FIFO
ratios according to Best Aquaculture
Practices Certification Standards,
Implementation Guide, Issue 3.2, page
41 published on 07/Feb/2023 (FY2023
Aquafeed Baseline).
2023: Ridley’s Nutrition and Technical
team continue to build capability to
assist customers to reduce GHG
intensity of customer’s products
through animal nutrition.
2023: Ridley safety programs include
a well-being strategy and action plan,
mental health first aid training and
the ongoing support and guidance
of a qualified HSE team.
2023: WEGA report 2022 = 22%
Female, 78% Male employees.
2023:
• basic compliance training for
• Embed a formalised learning and
all employees
• ad hoc external learning and
development opportunities
supported
• ad hoc technical training
supported relevant to industry
2023: Each site has access to
$2,000 per year to support local
charities and or community groups.
This represents approximately 0.03%
($34k) of the Group EBITDA.
2023: Ridley currently includes some
climate risks in the risk register and
discloses its scope 1 and 2 emissions
as part of the obligations for the
National Greenhouse Gas and Energy
Reporting (NGER) Act.
development program that includes an
annual review of Ridley’s requirements and
development plans, where necessary, to
ensure our business has “future fit” skills
by 2030.
Ridley will:
• Increase the baseline financial contribution
five-fold to 0.15% of group EBITDA and
continue our ongoing non-financial support
of our local communities including targeting
charities and community groups that align
with the values of the company by 2030.
Ridley will:
• Actively manage climate-related risks and
opportunities across Ridley’s operations,
integrating such risks in strategic decision
making by 2030.
Meaningful
Partnerships
Reduce reliance
on finite marine
resources
More
Sustainable
Aquafeeds
Support
customers to
meet their
sustainability
goals
Technical
expertise in
sustainability
opportunities
linked to animal
nutrition
Ensure safe and
healthy
employees
Employee
health and
safety
Create diverse
workplaces
Diversity,
Equity and
Inclusion
Provide training
and
development
opportunities
Training and
development
Support local
communities
Community
engagement
Others
Climate Risk
1. Assessed as an average per unit across the range of outgoing Packaged Products.
2. This commitment relies on not yet commercially available technology that would allow higher oil content product to be packaged in recyclable,
single polymer formats.
3. FeedSafe Certification Rules – Version 12 – 17 April 2022 (Stockfeed Manufacturers’ Council of Australia Quality Assurance Accreditation Program FeedSafe.
4. This commitment relies on the continued research and development of substitute forage fish protein and lipid sources, and Ridley’s collaboration with
third parties.
19
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Sustainability Review continued
Definitions
Deforestation and Conversion means the conversion of forest to other land use
independently whether human-induced or not1. (This definition is referenced from
FAO’s Global Forest Resource Assessment 2020 Terms and Definitions.)
FY23 Packaging Specifications means the specifications that impact weight, being
grams per square metre and bag size, held by Ridley and its packaging partners in
Ridley’s FY23 database.
Feed Fish Inclusion Factor or FIFF means the Feed Fish Inclusion Factor measured
according to Best Aquaculture Practices Certification Standards, Implementation Guide,
Issue 3.2, page 41 published on 07/Feb/2023.
FeedSafe means the Stockfeed Manufacturers’ Council of Australia Quality Assurance
Accreditation Program “FeedSafe”.
Finished product means product which is manufactured and sold by Ridley.
Fish In Fish Out or FIFO means the Fish In Fish Out ratio measured according to
Best Aquaculture Practices Certification Standards, Implementation Guide, Issue 3.2,
page 41 published on 07/Feb/2023.
Life Cycle Assessment or LCA means the systematic analysis of the potential
environmental impacts of products during their entire life cycle including production,
distribution, use and end-of-life phases.
Life Cycle Assessment or LCA Methodology refers to a methodology adopted in
accordance with ISO 14040 standard which describes the principles and framework for
LCA and ISO 14044 standard which specifies the requirements and guidelines for LCA.
Packaged Products means all bags less than 25kg sold to retail and wholesale
customers and excludes bulk bags.
Reconciliation Action Plan or RAP means a reconciliation action plan with
Reconciliation Australia.
Ridley Aqua Feed Programs FY23 means our program for feeding prawn and
barramundi over their production cycle as at 30 June 2023.
Ridley Aqua Feeding Programs 2030 means our commercially available Ridley programs
for feeding prawn and barramundi over their production cycle as at 30 June 2030.
1. Explanatory notes 1. Includes permanent reduction of the tree canopy cover below the minimum 10
percent threshold. 2. It includes areas of forest converted to agriculture, pasture, water reservoirs,
mining and urban areas. 3. The term specifically excludes areas where the trees have been
removed as a result of harvesting or logging, and where the forest is expected to regenerate
naturally or with the aid of silvicultural measures. 4. The term also includes areas where, for
example, the impact of disturbance, over-utilisation or changing environmental conditions affects
the forest to an extent that it cannot sustain a canopy cover above the 10 percent threshold.
20
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 21
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Board of Directors
Mick McMahon
B Ec (UTAS) / Harvard
AMP 176
Independent
Non-Executive Director
and Ridley Chair
Appointed in August 2020,
Mick is a former Managing
Director and CEO of Inghams,
led Inghams through its Initial
Public Offering (IPO) process
and was Executive Chairman
of Inghams prior to its IPO.
Mick has over 37 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
Seafarms Limited.
22
Quinton Hildebrand
BSc AgEcon, MBA
Managing Director and
Chief Executive Officer
Julie Raffe
GAICD, FFIN, FCA
Independent
Non-Executive Director
Melanie Laing
BA (Hons), FAICD,
FAHRI, CEW
Independent
Non-Executive Director
Appointed 1 September 2023,
Melanie brings a depth of
executive experience as a
people and culture leader in
large corporates.
Melanie has a Bachelor of
Arts (Hons) from the University
of the Witwatersrand, and
has more than 25 years of
professional experience
across various sectors and
geographies. Melanie is a
Non-Executive Director and
people, remuneration and
sustainability committee
chair of Keypath Education
International Inc, and has
also held global and regional
leadership roles at the
Commonwealth Bank of
Australia, Origin Energy and
Unisys Corporation.
Melanie is a fellow of the
Australian Institute of
Company Directors (FAICD)
and the Australian Human
Resources Institute (FAHRI),
a member of Chief Executive
Women (CEW) Australia and
a certified chair with the
Advisory Board Centre.
Other current listed
company Directorships
Keypath Education
International Inc from
May 2021.
Former listed company
Directorships in the last
three years
Inflection Inc (acquired
by Checkr in 2022).
Appointed in August 2019,
Quinton has 25 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.
Prior to joining Ridley, in 2015
Quinton was Chief Commercial
Officer and Operations
Excellence Director at Ingham’s
Group Limited, and in 2018
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.
Appointed in September 2022,
Julie has held significant
executive and non-executive
roles across multiple sectors.
With 40 years of professional
experience, Julie is currently
a Non-Executive Director of
Latitude Group Holdings
Limited, President of the
National Board for Finance
Executives Institute of Australia
and Chair of its Victorian
Chapter; and Deputy Chair
and Treasurer of Entertainment
Assist (a not-for-profit
industry forum).
Julie is a former Finance
Director and Company
Secretary for Village Roadshow
Limited (previously an ASX
200/300 listed company with
operations in Australia, Asia,
USA and Europe). Julie has
also held positions as a
non-executive member of
the advisory committee and
Chair of the Audit and Risk
Committee for Ironman 4 x 4
Pty Ltd Director; Chair of the
Audit and Risk Committee and
Chair of Finance Committee
for Eltham College; Non-
Executive Director and Chair
of Audit and Risk Committee
for Signature Capital Limited
(a publicly 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
Metro Performance
Glass Limited.
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Ejnar Knudsen
Rhys Jones
CFA
Non-Executive Director
BSc (Chem), BBS(Hons)
(1st), MBS
Independent
Non-Executive Director
Patria M Mann1
BEc FAICD
Independent
Non-Executive Director
Appointed in August 2020,
Rhys has over 30-years’
experience working in the
Australasian building,
manufacturing and packaging
industries. Rhys is currently
the Managing Director and
Chief Executive Officer of
Vulcan, an ASX/NZX listed
steel distributor with over
72 business units across
Australasia. He was 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
Vulcan Steel Limited.
Former listed company
Directorships in the last
three years
Metro Performance
Glass Limited.
Appointed in March 2008,
Patria is an experienced
Non-Executive Director
with over 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
EVT Limited from
October 2013.
Bega Cheese Limited
from September 2019.
GWA Group Limited
from January 2022.
Former listed company
Directorships in the last
three years
None.
Appointed in June 2013,
Ejnar is AGR’s founder and
Chief Executive Officer of
AGR Partners, LLC and
oversees the firm’s investment
strategy. He serves on the
boards of several AGR
portfolio companies. AGR
Partners, LLC is an associated
entity of Ridley’s largest
shareholder, AGR Agricultural
Investments LLC.
Prior to founding AGR,
Ejnar served as executive
vice president of Western
Milling, a grain and feed
milling company that grew
from a single site in Goshen,
CA to over $1 billion in sales
and is now the largest animal
feed company in the Western
United States. He also spent
10 years with Rabobank, in
its New York office, managing
a loan portfolio and venture
capital investments as well
as providing corporate
advisory services.
Ejnar received his B.S. from
Cornell University and is a CFA
Charterholder. He was raised
on a family dairy farm and is
married with four children.
Other current listed
company Directorships
Green Plains Inc.
Former listed company
Directorships in the last
three years
None.
Prof. Robert J van
Barneveld1
B.Agr.Sc. (Hons), 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.
Kirsty Clarke is Ridley Corporation Limited’s General
Counsel and Company Secretary appointed 21 October
2021. Kirsty has a BA (UWA), LLB (Hons) (Murdoch
University) and a Graduate Diploma in Corporate
Governance from the Governance Institute of Australia.
After commencing her career in private practice, Kirsty
has held senior legal and governance roles across a
variety of organisations most recently the Tandem
Group, Service Stream Limited and Australia Post.
23
1. Director to retire from the Ridley Board following
the Board meeting to be held 20 November 2023.
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 RIDLEY CORPORATION LIMITED
ANNUAL REPORT 2023
Financial Report
Directors’ Report
Remuneration Report – Audited
Auditor’s Independence Declaration
25
31
41
Consolidated Statement of Comprehensive Income 42
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
43
44
45
46
47
80
81
86
24
Directors’ Report
For the Year Ended 30 June 2023
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 2023 (FY23).
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 P McMahon
P M Mann
D J Lord (resigned 24 Nov 2022)
Q L Hildebrand
R Jones
R J van Barneveld
E Knudsen
J E Raffe (appointed 1 Sep 2022)
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
The highlights of the Ridley Corporation Limited consolidated group (Ridley or Group) FY23 results are:
• Total Comprehensive income of $41.8 million (m), representing a $5.6m, or 15.5% increase when compared to ongoing operations
of FY22. The Reported FY22 result included $6.2m of Individually Significant Items after tax, which were largely related to gains on the
sale of various sites.
• EBITDA from ongoing operations of $88.5m, representing an $8.4m, or 10.5% increase on FY22 achieved through the execution
of Ridley’s Growth Strategy.
• The operating cash flow of $105.3m represents an improvement on FY22 of 45.8%, as the business reduced working capital,
making an orderly reduction to inventory as macro supply chains normalised. The FY22 Consolidated cash inflow includes
the proceeds from the sale of various assets.
• The Balance Sheet strength was maintained with debt increasing by just $6.6m after increasing dividend payments, conducting an
on-market share buy-back and investing in growth capital in the business.
SUMMARY ($ million unless otherwise stated)
Total Comprehensive income – Net Profit After Tax (“NPAT”)
Comprehensive Income (NPAT) – ongoing operations
EBITDA – ongoing operations1
Operating cash flow2
Consolidated cash inflow/(outflow)3
Net debt
Leverage ratio (times)4
Earnings Per Share – ongoing operations (cents)
2023
41.8
41.8
88.5
105.3
(6.6)
29.5
0.33
13.4
2022
42.4
36.2
80.1
72.2
60.2
22.9
0.29
11.3
Movement
5.6
0.6
▼
▲
▲
8.4
▲ 33.1
▼ (66.8)
▲
6.6
▲ 0.04
▲
2.1
1. FY23 calculated as NPAT of $41.8m adjusted for Net Finance Costs ($5.1m), Tax Expense ($16.8m), Depreciation and Amortisation ($24.8m).
2. FY23 operating cash flow is EBITDA ($88.5m) plus or minus the change in working capital ($16.8m).
3. Calculated as Closing Net debt less Opening Net debt
4. Calculated as Net debt/Last 12 months EBITDA per banking facility covenant calculations.
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.
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RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Directors’ Report continued
30 June 2023
4. Review of operations
The first priority of the Board and Management of Ridley is the safety of our employees, suppliers and customers. In FY23 Ridley
recorded a Lost Time Injury Rate (LTIFR) of 5.15 and Total Recordable Frequency Rate (TRFR) of 8.83.
For statutory reporting purposes, the Consolidated Profit and Loss from continuing operations after income tax for the year was a
profit of $41.8m (FY22: $42.4m). The prior year included gains from individually significant items of $8.9m ($6.2m after tax), primarily
related to the sale of the Westbury Facility and other surplus assets.
Segment performance
The Packaged Feeds and Ingredients segment lifted earnings significantly with an EBITDA of $65.8m (FY22: $58.0m).
The Ingredient Recovery business unit was the primary driver of this increase where there is an ongoing strategy to invest in differentiating
our products for premium markets which is generating higher returns. In FY23, the business also benefitted from higher market prices
for rendered tallows, oils and protein meals in the first half (H1). Whilst these prices moderated in H2, higher volumes offset the price
impact. Volumes through the Packaged Products business grew by 6% year on year as we expanded market share and increased pet
product lines into urban retail chains. The Aquafeed sector underperformed resulting in more extrusion capacity being allocated to
petfood production. NovaqPro® operations delivered their first profit with sales primarily to domestic prawn customers, albeit export
sales did commence in FY23. The ongoing improvement in operating efficiency at the Thailand facility is resulting in a meaningful
reduction in the cost base.
The Bulk Stockfeeds segment contributed an EBITDA of $36.0m (FY22: $34.4m).
The strategy to leverage our procurement and nutrition capability, drive asset utilisation and share scale benefits and expertise with
our customers is continuing to deliver with volume growth of 3% in monogastric sales and 11% in ruminant sales in FY23. The challenges
reported in H1 where wet conditions delayed the transition to new season grains impacting margins, normalised in H2.
All business units continued their focus on operating efficiency whilst ensuring that where inflationary costs could not be off-set that
they were passed through. In FY23, $11.3m in maintenance capex was committed and $23m in growth capex projects. The growth
capex included four de-bottlenecking projects, the ongoing delivery of Project Boost and various other capability enhancing projects
across the Group.
Corporate cost
The unallocated corporate cost of $13.3m (FY22: $12.2m), included a $1m accrual related to the CEO retention payment announced
in May. Other corporate costs were in line with the prior years, despite the significant pressures on both employee costs (inflationary)
and insurance (market drivers).
Interest costs have increased to $5.0m from $2.2m and while this includes a contribution from the small increase in net debt during
the period, the primary reason for the increase is the higher interest cost on the debt facilities.
Cash flows and debt
The operating cash flow of $105.3m for FY23 (FY22: $72.2m) represents a significant improvement as the business was able to make
an orderly reduction in the strategic inventory held previously as macro supply chains normalised.
Net Debt as at 30 June 2023 was $29.5m (FY22: $22.9m) and the FY23 Leverage ratio is 0.33 times (FY22: 0.29). During the period,
the business funded an increase in dividends of $8.2m and a $7.0m share buy-back.
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
2023
Cents
13.1/12.7
13.1/12.7
2022
Cents
13.3/12.8
11.3/10.9
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.
Events occurring after the balance sheet date
There were no matters or circumstances that have arisen since 30 June 2023.
26
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 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 variations impacting the demand for animal nutrition products – by operating across different business sectors within the
domestic economy, (namely poultry and pig, dairy, aqua, beef and sheep, companion animals, consumer goods packaged products
and ingredient recovery) 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.
• Commodity pricing fluctuations impacting raw material input prices – 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.
• Commodity pricing fluctuations impacting end product sales prices – the selling price of protein meals, tallow and oils by our
ingredient recovery business varies as a result of domestic and export demand for these products, however the impact on the
returns for Ridley are moderated due to raw material contracts with suppliers, which share a portion of the benefit or reduction
in selling price with those suppliers.
• 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.
• Influence of natural pasture on supplementary feed decision making – whilst 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 well-being 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 feed mills 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
ingredient recovery) 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 focussed on:
– sourcing high-quality raw materials that are produced with respect to social and environmental boundaries;
– optimising our manufacturing and supply chain process to reduce our footprint;
– developing technical solutions that enable farmers to produce more from less; and
– creating safe, healthy and diverse workplaces that support vibrant communities.
• Corporate – risks such as safety, recruitment and retention of high calibre employees, inadequate innovation and new product
development, customer credit non-payment, interest rate increases, foreign exchange fluctuations, 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 review and monitoring by the executive lead team.
Outlook
Ridley expects ongoing earnings growth for the year ahead by delivering:
• further premiumisation for the petfood sector in the Packaged and Ingredients segment; and
• volume increases in the Bulk Stockfeeds segment enabled by the de-bottlenecking projects.
Macro-economic conditions are expected to remain challenging, however the business continues to take steps to reduce the adverse
impact of inflationary pressures and changes in commodity cycles.
Cash generated from operations, and a strong balance sheet, are expected to support the ongoing investment in the business,
the payment of progressive dividends and the potential to pursue growth opportunities.
27
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RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Directors’ Report continued
30 June 2023
5. Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the year ended 30 June 2023.
6. Dividends and distributions to shareholders
An FY22 Final Dividend of 4.0 cents per share franked to 100% was paid on 27 October 2022.
An FY23 Interim Dividend of 4.0 cents per share franked to 100% was paid on 27 April 2023.
Following a year of strong operating performance, cash generation and debt retirement, the Board has declared a Final Dividend
of 4.25 cents per share (cps), fully franked and payable on 26 October 2023 for a cash outlay of approximately $13.4m.
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
R Jones
D J Lord1
J Raffe2
1. Resigned 24 Nov 22.
2. Appointed 1 Sep 22.
H
9
9
9
9
9
9
9
9
A
9
9
9
9
9
9
9
9
H
4
4
4
A
4
4
4
H
4
4
4
A
4
4
4
H
3
3
3
3
A
3
2
3
3
References to Director meeting attendance table:
H: Number of meetings held during period of office.
A: Number of meetings attended.
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. 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)1
1. The share grant and supporting loan together in substance comprise a share option.
Number
Expiry Date
11,371,355
3,162,837
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 22 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.
28
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 11. 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.
12. Post balance date events
There were no matters or circumstances that have arisen since 30 June 2023 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.
13. 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.
14. 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 FY23 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 41
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
$
411,691
21,422
433,113
29
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RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Directors’ Report continued
30 June 2023
15. 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 17 August 2023 in accordance with a resolution of the Directors.
Mick McMahon
Director and Ridley Chair
Quinton Hildebrand
CEO and Managing Director
30
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 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 2023. This report forms part of the Directors’
Report for the year ended 30 June 2023.
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 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.
Korn Ferry was engaged to complete salary benchmarking in FY23. Total remuneration consultancy fees for the period amounted
to $11,000.
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 Directors’ fee pool limit which is reviewed periodically,
with proposed amendments recommended to shareholders for approval. The maximum currently stands at $850,000 as approved
at the 2022 Annual General Meeting. The Chair receives incremental fees of $75,000, the Chair of the Audit and Risk Committee
receives $10,000 and the Chair of the Ridley Innovation and Operational Committee and Remuneration and Nominations Committee
each receive $5,000 of incremental fees, in addition to their base fees. The total amount paid to Non-Executive Directors in FY23
was $708,217 (FY22: $648,900).
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Executives
The executive pay and reward framework comprises the three components of base pay and benefits, short-term incentives and
long-term incentives.
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31
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
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 to the following
indices in respect of the last five years.
Comprehensive income/(loss) (NPAT)
$’000
Earnings Before Interest, Tax,
Depreciation and Amortisation (EBITDA)
before Individually Significant Items
EBITDA after individually significant items
Earnings Before Interest and Tax
$’000
$’000
$’000
Cash flow from operating activities (statutory) $’000
Return on Net Assets3
Dividends paid
TSR4
Year end closing share price
Short-term Incentive to KMP
%
$’000
%
$
$’000
2023
41,825
2022
42,430
2021
24,896
2020
(10,748)
2019
23,565
88,5051
88,5052
63,722
43,023
13.2
25,500
16.2
2.00
1,335
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
–
1. FY23 Non-IFRS measure calculated as Net Profit After Tax (NPAT) of $41.8m adjusted for Net Finance Costs ($5.1m), Tax Expense ($16.8m),
Depreciation and Amortisation ($24.8m) and before Individually Significant Items of $0m.
2. FY23 EBITDA calculated above including Individually Significant Items of $0m.
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, other 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 FY23, 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).
The Group Financial Performance component of the STI is assessed against a stretch budget Earnings Before Interest, Tax,
Depreciation and Amortisation before significant items (EBITDA). Where achievement of 90% of stretch budget 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.
Personal KPls for FY23 comprised targets relevant to each participant’s responsibilities and include targets relevant to safety, quality,
operational excellence, sales growth, expansion/innovation, capital management, strategy development and sustainability progress.
KPls for the Managing Director are initially considered and recommended by the Remuneration and Nominations 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.
STI incentives by role range from 100% of the TEP for the Managing Director down to 10% of the TEP for the least senior participants
in the plan.
A summary of the STI award structure for FY23 is shown in the following table, subject always to the exercise of discretion by the Board.
32
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Metric
Proportion of budgeted EBITDA
Financial
< Stretch Budget minus $5m
Award
Nil
Financial
Stretch Budget minus $5m to Stretch Budget
Financial
≥ Stretch Budget
Personal
< 90%
Personal
90% or greater
51-100% of the 70% Group Financial component straight-line pro rata
of incremental EBITDA up to $5m
Capped at 100% of the 70% financial component
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 2023 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 the EBITDA stretch budget, the Board has resolved to award 100% of the Group Financial component. The FY23
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.
In September 2023, the FY23 STI award, which was fully provided for as at 30 June 2023, will be 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 $1,593,797 (2022: $1,348,920) payable to KMP had all STI performance
targets been achieved.
2023
2022
STI
percentage
range of TEP1
STI
maximum
potential
award in $2
KMP name
2023 STI
award in $3
Paid
%
Forfeited
%
Paid
%
Forfeited
%
Q Hildebrand
0-100%
R Betts
C Klem
R Singh
H Slattery4
K Clarke
S Clowes5
0-60%
0-40%
0-40%
0-40%
0-40%
0-40%
750,000
330,000
152,000
160,000
77,797
124,000
–
637,500
305,250
129,200
148,000
–
114,700
–
1,593,797
1,334,650
85.0%
92.5%
85.0%
92.5%
–
92.5%
–
83.7%
15.0%
7.5%
15.0%
7.5%
100%
7.5%
–
16.3%
92.5%
92.5%
92.5%
100%
77.5%
92.5%
–
94.0%
7.5%
7.5%
7.5%
0%
22.5%
7.50%
–
6.0%
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. FY23 STI award to be paid via the September 2023 Payroll.
4. Pro rata award calculation in line with when STI participant ceased role as KMP (15 February 2023).
5. KMP from 13 March 2023 and is not eligible for the FY23 STI.
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33
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Remuneration Report – Audited continued
Long-term incentives
In FY23 there was an issue of Indeterminate performance rights (Rights) to senior executives and officers under the Ridley LTIP
with an effective grant date of 1 July 2022. 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. 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 rights issue is limited to a percentage of each participant’s total fixed remuneration.
ROFE is calculated as being the Ridley Consolidated Group Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)
before significant items divided by the Funds Employed (FE).
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 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 on issue in FY23 are set out in the following table:
Tranche Metric
Performance
hurdle FY231
Performance
hurdle FY242
Performance
hurdle FY253
< 19%
19%
< 15%
< 15%
Award
Nil
50%
ROFE
ROFE
ROFE
ROFE
Absolute TSR
A
A
A
A
B
B
B
B
19% – 30%
15% – 25%
15% – 25%
50% – 100% on a straight-line pro rata basis
> 30%
< 30%
> 25%
< 30%
30%
> 25%
< 30%
30%
100%
Nil
50%
Absolute TSR
30%
Absolute TSR
30% – 70%
30% – 70%
30% – 52%
50% – 100% on a straight-line pro rata basis
Absolute TSR
>70%
>70%
> 52%
100%
1. 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 2020
to 30 June 2023.
2. Actual vesting of this Tranche A of Rights is determined by the average ROFE performance for all three years of the performance period, being from
1 July 2021 to 30 June 2024.
3. Actual vesting of this Tranche A of Rights is determined by the average ROFE performance for all three years of the performance period, being from
1 July 2022 to 30 June 2025.
34
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Summary of Ridley performance
The following table provides a summary of the performance for each tranche of the LTIP Rights on issue to KMP’s at year end,
rebased to the effective date of grant and using 30 June 2023, being the actual test date for the FY21 issue and the hypothetical
end date for the FY22 and FY23 tranches. The data does not take account future dividends and are 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 2023.
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Start date
Test date
Tranche
Ridley ROFE
Ridley TSR
Number of
rights on issue
% of rights
hypothetically
vested as at
30 June 2023
Number of rights
hypothetically
vested as at
30 June 2023
01-Jul-20
30-Jun-23
01-Jul-20
30-Jun-23
01-Jul-21
01-Jul-21
30-Jun-24
30-Jun-24
01-Jul-22
30-Jun-25
01-Jul-22
30-Jun-25
A
B
A
B
A
B
25.6%
25.6%
25.6%
175.0%
87.6%
17.2%
940,207
1,216,580
948,044
1,132,487
633,688
760,200
80%
100%
80%
100%
80%
14%
752,166
1,216,580
758,435
1,132,4871
506,950
106,4284
1. Based on actual dividends paid to date during the performance period and the dividend to be paid in October 2023 i.e. excluding consideration
of any undeclared future dividends payable during the performance period.
Shares purchased on-market
3,666,387 shares were allocated to participating employees under the LTIP during the 2023 financial year, with a total market value
of $7,147,709.
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Ridley Corporation Special Retention Plan
In May 2023 it was announced that, subject to shareholder approval at the 2023 Annual General Meeting, the Managing Director,
Quinton Hildebrand would be issued with 1,500,000 rights on 1 July, 2023 in addition to his ordinary allotment of LTIP rights. These rights
will be tested on the same basis as the FY24 LTIP. These rights were issued as part of special retention arrangements put in place for
Mr Hildebrand, the details of which are discussed later in this report.
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 FY23 unless otherwise stated.
Name
Directors
M P McMahon
Q L Hildebrand
P M Mann
Position and status
Director and Chair
Managing Director and CEO
Non-Executive Director
R J Van Barneveld
Non-Executive Director
E Knudsen
D J Lord
R Jones
J Raffe
Executives
R Betts
C Klem
R Singh
K Clarke
S Clowes
H Slattery
Non-Executive Director
Non-Executive Director up until 24 November 2022
Non-Executive Director
Non-Executive Director from 1 September 2022
Chief Financial Officer
Chief Operating Officer Ingredients Recovery
Chief Operating Officer Ruminant Stockfeeds, Packaged products and Aquafeed
General Counsel and Company Secretary
Chief Operating Officer Monogastric Stockfeeds from 13 March 2023
General Manager Aquafeed up until 15 February 2023.
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35
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Remuneration Report – Audited continued
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 2023 and 2022 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) and certain other benefits.
FY23 Remuneration table
Short-term benefits
Other benefits
Share-
based
payments
Directors’
fees and
cash
salary
$
FY23
STI
$
Super-
annuation
$
Other
allow-
ances
$
Perfor-
mance
Rights
$
Sub-total
$
Share-
based
payment
reversal
Perfor-
mance
Rights
$
Total
$
Name
Directors
M P McMahon
163,864
–
17,206
–
–
181,069
–
181,069
%1
–
%2
–
Q L Hildebrand
– CEO and
Managing Director
722,500
637,500
27,500
47,9458
594,621 2,030,066
– 2,030,066
29%
61%
P M Mann
96,514
R J van Barneveld3
103,925
E Knudsen3
D J Lord4
R Jones3
J Raffe5
96,275
35,810
96,275
76,430
–
–
–
–
–
–
10,134
–
–
3,760
–
8,025
–
–
–
–
–
–
–
–
–
–
–
–
106,647
103,925
96,275
39,570
96,275
84,455
–
–
–
–
–
–
106,647
103,925
96,275
39,570
96,275
84,455
Total Directors
1,391,593
637,500
66,625
47,945
594,621 2,738,284
– 2,738,284
Executives
R Betts
C Klem
R Singh
H Slattery6
K Clarke
S Clowes7
498,512
305,250
25,292
26,1959
216,928 1,072,177
352,500
129,200
27,500
372,500
148,000
27,500
176,012
–
19,638
280,543
114,700
29,457
100,243
–
10,526
–
–
–
–
–
112,485
621,685
117,043
665,043
57,795
253,445
72,175
496,875
–
110,769
Total executives
1,780,310
697,150
139,913
26,195
576,426 3,219,994
Total
3,171,903 1,334,650
206,537
74,140 1,171,047 5,958,278
–
–
–
–
–
–
1,072,177
621,685
665,043
253,445
496,875
110,769
– 3,219,994
– 5,958,278
–
–
–
–
–
–
20%
18%
18%
23%
15%
–
–
–
–
–
–
–
49%
40%
40%
23%
38%
–
1. Percentage remuneration consisting of performance rights.
2. Percentage remuneration performance related.
3. Director fees paid as an invoice rather than through payroll.
4. Director until 24 November 2022.
5. Director from 1 September 2023.
6. KMP until 15 February 2023.
7. KMP from 13 March 2023.
8. Rental for accommodation in Melbourne.
9. Vehicle allowance awarded via salary sacrifice.
36
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
FY22 Remuneration table
Short-term benefits
Other benefits
Share-
based
payments
Directors’
Fees and
Cash
Salary
$
FY22
STI
$
Super-
annuation
$
Other
allow-
ances
$
Perfor-
mance
Rights
$
Sub-total
$
Share-
based
payment
reversal
Perfor-
mance
Rights
$
Name
Directors
Total
$
180,250
%1
–
%2
–
1,594,835
28%
56%
–
–
–
–
–
12%
13%
15%
8%
12%
9%
–
–
–
–
–
43%
42%
38%
35%
33%
34%
–
–
–
–
–
–
–
–
–
–
–
–
180,250
441,585 1,594,835
–
–
–
–
–
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
16,295
91,964
129,490
(152,000)
129,490
596,180
(95,000)
596,180
1,8227
49,510
583,332
55,114
448,114
35,571
380,632
–
–
–
583,332
448,114
380,632
357,143 3,040,506
(247,000) 3,040,506
798,728 5,284,241
(247,000) 5,284,241
–
–
1,822
1,822
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
88,955
97,850
87,550
88,955
87,550
–
–
–
–
–
27,500
8,895
–
–
8,895
–
Total Directors
1,287,224
453,250
61,676
Executives
R Betts4
A Boyd5
C Klem
R Singh
H Slattery
K Clarke6
493,140
279,325
71,848
37,732
340,541
136,175
352,500
152,000
272,727
229,371
93,000
92,753
21,604
3,615
27,500
27,500
27,273
22,937
Total executives
1,760,127
790,985
130,429
Total
3,047,351 1,244,235
192,105
1. Percentage remuneration consisting of performance rights.
2. Percentage remuneration performance related.
3. Director fees paid as an invoice rather than through payroll.
4. KMP from 1 August 2021.
5. KMP until 25 August 2021.
6. KMP from 30 August 2021.
7. Travel allowance.
Non-Executive Directors – Fee structure
On 28 April 2023, the Board approved a policy that Non-Executive Directors may elect to receive up to 20% of their fee by way
of Company securities in lieu of cash. An election must be made by Directors at least 6 months in advance and immediately prior to 1
January and/or immediately prior to 1 July. Elections remain on foot until such time as the Director elects to opt out. Opting out
requires 6 months notice and aligns with twice yearly election dates.
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37
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Remuneration Report – Audited continued
Details of KMP remuneration continued
Contracts of employment
Remuneration and other terms of employment for the Managing Director are formalised in a service agreement which includes provision
of performance related bonuses and other benefits, 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
Remuneration and other terms of employment for the Managing Director are formalised in a service agreement which includes provision
of performance related bonuses and other benefits, eligibility to participate in the Ridley LTIP and STI. Other major provisions of the
agreements relating to his remuneration are set out below:
Base remuneration, inclusive of superannuation and any elected benefits, of $750,000, to be reviewed annually each June with any
changes to be effective from the following 1 July.
• Full STI scheme participation up to 100% 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 FY23
comprised targets for Safety (10%), Quality (10%), Operational Excellence for optimisation of savings (20%), Strategy Development
(underlying 30% and growth 20% for an aggregate of 50%) and Sustainability progress (10%). The 70% of Ridley financial performance
STI for FY23 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 2022 for the 716,905 performance rights issued
to Mr Hildebrand in FY23 with a performance test period from 1 July 2022 to 30 June 2025.
• 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 12 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. 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.
• In May 2023 it was announced that the Managing Director, Quinton Hildebrand would be issued with a one-off retention cash
payment of $1,000,000 payable on 1 July 2023, and 1,500,000 rights to be issued effective 1 July, 2023 in addition to his allotment
of annual LTIP rights. These rights would be tested on the same basis as the FY24 LTIP. These amounts were part of the special
retention arrangements put in place for Mr Hildebrand, which also included an increase in the STI scheme participation up to 150%
of total Base Package (previously 100%). The $1,000,000 cash payment was accrued in full in FY23 and the 1,500,000 rights will
be accounted for over the qualifying period on the same basis as the FY24 LTIP rights.
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 twelve months
for the Managing Director.
38
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 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 are set out in the table below.
KMP LTIP Rights Holdings
Recipients of LTIP Rights
Directors
Q L Hildebrand
Key Management Personnel
R Betts
C Klem
R Singh
K Clarke
S Clowes
LTIP percentage
range of TEP1
Year of grant
Granted
Grant date
0-170%
0-100%
0-60%
0-60%
0-60%
0-60%
20212
20223
20234
20223
20234
20212
20223
20232
20212
20223
20234
20223
20234
20234
1,566,108
01 Jul 2020
1,045,173
01 Jul 2021
716,905
01 Jul 2022
483,063
309,253
290,618
193,950
128,199
300,061
01 Jul 2021
01 Jul 2022
01 Jul 2020
01 Jul 2021
01 Jul 2022
01 Jul 2020
200,252
01 Jul 2021
134,947
158,093
104,584
01 Jul 2022
01 Jul 2021
01 Jul 2022
–
01 Jul 2022
Fair value
of Rights at
grant date
$
663,531
638,171
690,759
326,068
324,716
129,325
130,916
134,609
133,527
135,170
141,694
106,713
109,813
–
Total issued to Directors
and Key Management Personnel
5,631,206
3,665,012
1. LTI percentage applicable subject to pro rata adjustment for the period of employment or in the KMP role.
2. Percentage remuneration consisting of performance rights effective grant date for the FY21 LTIP was 1 July 2020. The Fair Value per Right at the
grant date was $0.67 for Tranche A Rights before adjusting for the initial assessment of the likelihood of exceeding the ROFE performance hurdle
and $0.22 for Tranche B Rights. Each participant’s holding is split equally between the two tranches A and B excluding the CEO and Managing
Director’s, which are split 41% Tranche A and 59% Tranche B.
3. Percentage remuneration consisting of performance rights effective grant date for the FY22 LTIP was 1 July 2021. The Fair Value per Right at the
grant date was $1.04 for Tranche A Rights before adjusting for the initial assessment of the likelihood of exceeding the ROFE performance hurdle
and $0.31 for Tranche B Rights.
4. Percentage remuneration consisting of performance rights effective grant date for the FY23 LTIP was 1 July 2022. The Fair Value per Right at the
grant date was $1.54 for Tranche A Rights before adjusting for the initial assessment of the likelihood of exceeding the ROFE performance hurdle
and $0.56 for Tranche B Rights.
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39
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Remuneration Report – Audited continued
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 hold shares, including their personally related entities, are set out in the table below.
Balance at
1 July 2022
Acquired
during the year3
(Disposed)
during the year
Holding at date
of no longer
being a KMP
Balance at
30 June 2023
Director/executive
M P McMahon
Q L Hildebrand
P M Mann
R J van Barneveld
E Knudsen
D J Lord
R Jones
J Raffe1
541,750
323,323
99,044
83,053
703,286
134,275
115,000
25,906
–
1,028,376
–
–
–
–
–
–
Total Directors
2,025,637
1,028,376
R Betts
C Klem
R Singh
H Slattery
K Clarke
S Clowes2
91,227
750,326
–
22,500
–
–
–
186,675
–
–
–
–
Total executives
Total Key Management Personnel
864,053
2,889,690
186,675
1,215,051
–
–
–
–
–
–
–
–
–
–
734,509
–
10,000
–
–
744,509
744,509
–
–
–
–
–
134,275
–
–
541,750
1,351,699
99,044
83,053
703,286
–
115,000
25,906
134,275
2,919,738
–
–
–
12,500
–
–
12,500
146,775
91,227
202,492
–
–
–
–
293,719
3,213,457
1. Director from 1 September 2022.
2. KMP from 13 March 2023.
3. Conversion of 1,215,051 performance rights to 1,215,051 ordinary shares granted under LTIP expired 30 June 2022.
40
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Auditor's Independence Declaration
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41
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 2023 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 17 August 2023 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Consolidated Statement of Comprehensive Income
For the Year Ended 30 June 2023
Revenue
Cost of sales
Gross profit
Finance income
Other income
Expenses:
Selling and distribution
General and administrative
Finance costs
Profit before income tax expense
Income tax (expense)
Profit 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
Diluted earnings per share
Note
4
5(b)
4
5
5(b)
6
6
1
1
2023
$’000
1,260,133
(1,148,775)
111,358
397
328
(13,669)
(34,295)
(5,484)
58,635
(16,810)
41,825
2022
$’000
1,049,086
(949,523)
99,563
–
13,045
(13,632)
(35,673)
(2,849)
60,454
(18,024)
42,430
–
–
41,825
42,430
41,825
42,430
13.1c
12.7c
13.3c
12.8c
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
42
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Consolidated Balance Sheet
As at 30 June 2023
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Tax asset
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax asset
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Provisions
Tax liability
Total current liabilities
Non-current liabilities
Lease liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Retained earnings
Total equity
Note
2023
$’000
2022
$’000
7
8
9
12
10
11
12
13
13
14
12
13
15
14
16
17
17
43,023
133,010
107,049
705
283,787
258,617
73,988
1,309
333,914
617,701
205,189
4,160
15,636
–
27,078
133,126
117,131
–
277,335
246,902
74,972
8,157
330,031
607,366
202,205
4,420
15,112
11,860
224,985
233,598
4,505
72,500
325
77,330
302,315
7,374
50,000
364
57,738
291,336
315,386
316,030
218,090
(1,889)
99,185
315,386
225,114
3,146
87,770
316,030
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
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43
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2023
2023
Opening balance at 1 July 2022
Profit for the year
Other comprehensive (loss)/income
Total comprehensive (loss)/income
for the year
Transactions with owners
recognised directly in equity:
Dividends paid/declared
Treasury share buy-back
Treasury shares cancelled1
Treasury shares buy-back
and release of LTIP2
Transfer to retained earnings
Share-based payment transactions
Total transactions with owners
recognised directly in equity
Balance at 30 June 2023
Share
Capital
$’000
225,114
Share-Based
Payments
Reserve
$’000
3,146
–
–
–
–
–
(7,024)
–
–
–
(7,024)
218,090
–
–
–
261
–
–
–
(2,264)
3,084
1,081
4,227
Treasury
Shares
$’000
–
–
–
–
–
(20,314)
7,024
7,175
–
–
(6,115)
(6,115)
Retained
Earnings
$’000
87,770
41,825
–
Total
$’000
316,030
41,825
–
41,825
41,825
(25,500)
–
–
(7,175)
2,264
–
(30,410)
99,185
(25,239)
(20,314)
–
–
–
3,084
(42,468)
315,386
1. On 18 August 2022, the Group announced the plan to Buy-back ordinary shares of Ridley Corporation Limited on-market up to a total value of
$20m between 12 October 2022 to 30 June 2023. As at 30 June 2023, 3.7 million shares at a total consideration of $7.0m have been bought back
and cancelled.
2. During FY23, the Group purchased its own shares on-market at a value of $7.2m for the purpose of allocating these shares to eligible employees
as a part of the Group’s Long term Incentive Plan. As at 30 June 2023, all of these shares have been issued to the eligible employees.
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
225,114
Share-Based
Payments
Reserve
$’000
1,706
–
–
–
–
–
–
–
–
–
–
(1,868)
–
3,308
1,440
3,146
Treasury
Shares
$’000
–
–
–
–
–
–
–
–
–
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
Balance at 30 June 2022
225,114
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
44
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Consolidated Statement of Cash Flows
For the Year Ended 30 June 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Other income received
Interest paid
Interest received
Income tax payments
Net cash from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payment for intangibles
Proceeds from sale of non-current assets
Net cash from/(used in) investing activities
Cash flows from financing activities
LTIP share purchase
Share Buy-back
Increase/(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
2023
$’000
2022
$’000
1,393,158
1,141,706
(1,287,732)
(1,082,482)
206
(4,983)
397
(21,965)
79,081
334
(2,224)
–
(10,746)
46,588
(34,270)
(23,797)
(500)
–
(34,770)
(13,291)
(7,023)
22,206
(25,239)
(5,019)
(28,366)
88
60,072
36,363
(431)
–
(73,021)
(17,054)
(5,271)
(95,777)
15,945
(12,826)
27,078
39,904
2
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P
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T
O
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S
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C
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F
N
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S
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A
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M
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N
T
S
Cash at the end of the financial year
7
43,023
27,078
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
D
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A
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O
N
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45
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Index of Notes
To and Forming Part of the Financial Report
Earnings per share
1.
2. Dividends
3. Operating segments
4.
5.
6.
Revenue and other income
Expenses
Income tax expense
Cash and cash equivalents
Trade and other receivables
Inventories
7.
8.
9.
10. Property, plant and equipment
11.
Intangible assets
12. Tax assets and liabilities
13. Trade and other payables
14. Provisions
15. Borrowings
16. Share capital
17. Reserves and retained earnings
Investment in controlled entities
18.
19. Parent entity
20. Deed of Cross Guarantee
21. Related party disclosures
22. Share-based payments
23. Retirement benefit obligations
24. Financial risk management
25. Leases
26. Commitments for expenditure
27. Contingent liabilities
28. Events occurring after the balance sheet date
29. Auditor’s remuneration
30. Corporate information and accounting policy summary
46
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Notes to the Financial Statements
30 June 2023
Note 1 – Earnings per share
Basic/Diluted earnings per share
Basic/Diluted earnings per share – before Individually Significant Items
2023
Cents
13.1/12.7
13.1/12.7
2022
Cents
13.3/12.8
11.3/10.9
Diluted
$’000
42,430
36,177
2023
2022
Basic
$’000
41,825
41,825
Diluted
$’000
41,825
41,825
Basic
$’000
42,430
36,177
2023
2022
315,832,713
319,494,975
330,157,232
331,920,423
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
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 FY23.
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 2023, there are 11,590,048 (30 June 2022: 12,425,448) dilutive potential
ordinary shares outstanding based on the hypothetical vesting of Performance rights on issue as at 30 June 2023 as detailed
in the Remuneration Report.
Note 2 – Dividends
Dividends paid during the year
Franking
Payment date
Cents per share
Interim dividend
Final dividend
Fully franked
27 April 2023
4.0 (2022: 3.4)
Fully franked
27 October 2022
4.0 (2022: 2.0)
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 dividend
Following a year of strong operating performance, cash generation and debt retirement
in FY23, the Board has declared a final dividend of 4.25 cents per share (cps),
fully franked and payable on Thursday 26 October 2023.
Amount of franking credits available at 30 June to shareholders of Ridley Corporation Limited
for subsequent financial years (prior to the above dividend declaration)
2023
$’000
12,720
12,780
25,500
25,239
261
25,500
2023
$’000
2022
$’000
10,863
6,390
17,253
17,054
199
17,253
2022
$’000
13,422
12,779
32,243
20,435
47
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’
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D
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S
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I
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D
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P
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N
D
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T
I
N
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W
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
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 and income
tax assets and liabilities. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and
equipment and intangible assets other than goodwill.
In accordance with the organisational structure and internal reporting to the CODM, 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 1 tonne bulka bag down to 3kg bags, and includes the 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.
Geographical locations
While the Group predominantly operates in Australasia, it has established a platform for NovaqPro® 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 NovaqPro® operations, commencing with commercial trials.
Total Property, Plant and Equipment by geographical segment
Australia
Thailand
Total Revenue by geographical segment
Australia
Thailand
Major Customers
2023
$’000
234,581
24,036
258,617
2023
$’000
2022
$’000
221,787
25,115
246,902
2022
$’000
1,260,461
1,062,131
–
–
1,260,461
1,062,131
The Group conducts business with two customers (2022: two) where the revenue generated from each customer exceeds 10%
of the Group’s revenue. Revenue from these customers was:
For the year ended 30 June
Customer A
Customer B
2023
$’000
198,706
139,239
337,945
2022
$’000
172,083
125,221
297,304
48
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 2023 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
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
1. Acquisitions include Property, plant and equipment and Intangibles.
Bulk
Stockfeeds
Packaged/
Ingredients
869,958
36,013
(15,428)
–
390,175
65,794
(9,336)
–
Corporate
Consolidated
–
1,260,133
(13,304)
(17)
(5,086)
88,503
(24,781)
(5,086)
20,584
56,458
(18,407)
58,635
–
20,584
299,809
(171,296)
20,855
–
56,458
250,642
(55,668)
14,649
–
(18,407)
67,250
(75,351)
4
–
58,635
617,701
(302,315)
35,509
Bulk
Stockfeeds
Packaged/
Ingredients
Corporate
Consolidated
695,399
34,363
(15,649)
–
18,715
–
18,714
280,233
(161,468)
11,424
353,688
58,014
(10,109)
–
47,905
–
47,905
269,816
(66,431)
12,416
(12,233)
(17)
(2,849)
(15,099)
8,934
(6,166)
57,315
(63,437)
4,102
1,049,086
80,144
(25,775)
(2,849)
51,521
8,934
60,453
607,365
(291,336)
23,845
49
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY Note 4 – Revenue and other income
Revenue
Sale of goods
Other income
Rent received
Gain on sale of assets held for sale (Note 5(d))
Credit card fees
Other
Other income
Revenue recognition
2023
$'000
2022
$'000
1,260,133
1,049,086
50
–
122
156
328
1,260,461
70
12,266
122
586
13,045
1,062,131
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.
Note 5 – Expenses
Profit 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
2023
$’000
2,121
17,324
509
240
4,588
24,782
2022
$’000
2,098
18,220
592
240
4,624
25,775
(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.
50
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 (b) Finance costs
Interest expense
Interest expense on lease liabilities
Amortisation of borrowing costs
Interest income
2023
$’000
4,983
391
109
(397)
5,086
2022
$’000
2,224
484
141
–
2,849
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 which 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 (gain)/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 NovaqPro® Yamba site
Restructuring of Thailand entity
Total Individually Significant Items – losses included in General and Administrative expenses
Gain on sale of Westbury extrusion plant
Gain on sale of former feed mills at Bendigo, Mooroopna and Murray Bridge
Total Individually Significant Items – (gains) included Other Income
Net Individually Significant Items – (gains)
2023
$'000
90,584
895
129
(591)
–
2022
$'000
83,032
713
59
174
70
9,878
10,739
2023
$'000
–
–
–
–
–
–
–
–
2022
$'000
2,260
836
237
3,334
(6,032)
(6,234)
(12,266)
(8,933)
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 in FY22.
The former feed mills 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 was reported as an Individually Significant item in FY22.
51
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY 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 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
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 which are not deductible/(taxable) in calculating taxable income:
Non-deductible expenses
Under provision 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
2023
$’000
9,891
6,846
73
16,810
2022
$’000
15,976
1,275
773
18,024
16,810
18,024
–
–
58,635
17,592
(9)
73
(840)
–
–
–
(6)
16,810
60,453
18,136
1
773
(913)
(3,756)
3,644
–
138
18,024
52
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 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 (Note 5(d))
Non-cash share-based payments expense (Note 22)
Non-cash finance movements
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 – Trade and other receivables
Current
Trade debtors
Less: Allowance for impairment loss on trade receivables (a)
Derivative assets (b)
Prepayments and other receivables
Trade receivables
2023
$'000
43,023
2023
$'000
41,825
24,781
–
3,582
500
734
(5,483)
5,722
10,083
6,845
1,923
567
(12,565)
78,516
2023
$'000
122,154
(226)
121,928
58
11,025
133,010
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
133,126
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.
53
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY Note 8 – Trade and other receivables continued
(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
2023
$’000
144
211
(129)
226
2022
$’000
86
81
(23)
144
As at 30 June 2023, a provision for impairment loss of $226,407 (2022: $143,671) 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 which 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 2023, the top 5 customer balances represent 40% (2022: 43%) of the total, and the top
20 represent 63% (2022: 70%).
Ageing analysis
At 30 June 2023, the age profile of trade receivables that were past due amounted to $2.3m (2021: $4.3m) 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
2023
$’000
1,614
319
583
(205)
2,311
2022
$’000
3,037
700
220
340
4,297
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 30(v)(b)).
Note 9 – Inventories
Current
Raw materials – at cost
Finished goods – at cost
– at net realisable value
2023
$’000
59,838
41,483
5,727
107,049
2022
$’000
71,308
29,605
16,218
117,132
Inventory included in cost of goods sold equals $1,148m for FY23 (FY22 $949.5m). Included in this number are write-downs of inventories
to net realisable value of $0.9m (2022: $0.6m).
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 which 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.
54
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Note 10 – Property, plant and equipment
2023 in $'000
Cost at 1 July 2022
Accumulated depreciation
Carrying amount at 1 July 2022
Additions
Transfers
Other lease movements
Disposals
Depreciation
Carrying amount at 30 June 2023
At 30 June 2023
Cost
Accumulated depreciation
Carrying amount at 30 June 2023
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
Property, plant and equipment
Land and
Buildings
Plant and
Equipment
Capital work
in progress
Right of use
assets
85,804
(15,424)
70,380
–
3,703
–
(3)
(2,121)
71,959
89,504
(17,545)
71,959
319,617
(185,988)
133,629
–
17,849
–
(178)
(17,324)
133,975
337,287
(203,312)
133,975
31,177
–
31,177
34,451
(21,551)
–
–
–
44,077
44,077
–
44,077
25,968
(14,251)
11,717
1,476
–
–
–
(4,588)
8,606
Total
462,566
(215,663)
246,902
35,927
–
–
(181)
(24,032)
258,617
27,444
(18,839)
8,606
498,312
(239,695)
258,617
Land and
Buildings
Plant and
Equipment
Capital work
in progress
Right of use
assets
85,338
(13,326)
72,012
185
281
–
–
313,341
(167,768)
145,573
15
6,261
–
–
(2,098)
70,380
(18,220)
133,629
85,804
(15,424)
70,380
319,617
(185,988)
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
Total
435,523
(190,721)
244,802
27,197
–
(154)
–
(24,942)
246,902
462,566
(215,663)
246,902
Land and buildings, 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 2-30 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.
55
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY Contracts
Assets under
development
Note 11 – Intangible assets
2023 in $'000
Software
Carrying amount at 1 July 2022
Additions
Disposals
Amortisation charge
Carrying amount at 30 June 2023
818
534
–
(509)
843
Goodwill
68,951
–
–
–
68,951
At 30 June 2023
Cost
Accumulated amortisation and impairment
Carrying amount at 30 June 2023
18,627
(17,784)
843
69,904
(953)
68,951
952
–
–
(772)
180
2,685
(2,505)
180
2022 in $'000
Carrying amount at 1 July 2021
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
Software
1,412
–
(2)
(592)
818
18,093
(17,275)
818
Goodwill
68,951
Contracts
1,688
–
–
–
68,951
69,904
(953)
68,951
–
–
(736)
952
2,685
(1,733)
952
4,250
3
–
(240)
4,013
5,000
(987)
4,013
Assets under
development
3,842
650
–
(240)
4,251
4,997
(746)
4,251
Total
74,972
537
–
(1,521)
73,988
96,216
(22,228)
73,988
Total
75,892
650
(2)
(1,568)
74,972
95,678
(20,706)
74,972
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, 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 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.
The Group has two reporting segments namely Packaged and Ingredients and Bulk Stockfeed (Note 3). The Cash Generating Unit
(CGU) that makes up the "Packaged and Ingredients" segments are Ingredients Recovery, Extrusion, Supplements and NovaqPro®.
For the purposes of impairment testing, goodwill has been allocated to the Group’s CGUs as follows:
Packaged and Ingredients: Ingredients Recovery
Bulk Stockfeed
Total goodwill
56
2023
$’000
56,616
12,334
68,950
2022
$’000
56,616
12,334
68,950
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 (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 2023 comprised the cumulative value of the five-year NovaqPro® alliance with CSIRO under
which the Group contributed $1.0m per annum and CSIRO an equivalent value in kind.
Research and development expenditure
Research and development (R&D) expenditure of $9,877,839 has been incurred in the current year (2022: $10,738,703) which is
expected to be included as eligible R&D in the R&D Tax Incentive schedule for FY23. 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
Package and Ingredients: Ingredients Recovery and Bulk Stockfeed
The recoverable amount for these two CGUs was based on their value in use, determined by discounting the future cash flows
to be generated from the continuing use of the respective CGUs.
The key assumptions for Ingredients Recovery and Bulk Stockfeed used in the estimation of value in use were as follows:
Description
Discount rate (Post Tax)
Terminal value growth rate
Budgeted EBIT growth rate (average over next 5 years)
2023
8.0%
2.0%
2.0%
2022
8.0%
2.0%
2.0%
The Group applies a post tax discount rate to post tax cash flows as the valuation calculated using this method closely approximates
applying a pre tax discount rates to a pre tax cash flows.
Budgeted EBIT for Bulk Stockfeed and Ingredients recovery for FY23 was based on expectations of future outcomes taking into
account past experience, adjusted for anticipated revenue growth, which was approved by the Board. The Group applied a constant
growth rate of 2% (FY22: 2%) to the period beyond FY23.
Increases in discount rates or changes in other key assumptions such as operating conditions or financial performance, may cause
the recoverable amount to fall below the carrying values.
Based on current economic conditions and CGU performance, there are no reasonably possible changes to key assumptions used
in the determination of CGU recoverable amounts that would result in an impairment.
Impairments during the year
There have been no impairments raised in either FY23 or FY22.
57
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY Note 12 – Tax assets and liabilities
Current
Tax asset
Tax liability
Non-current
Deferred tax asset
2023
$’000
705
–
2022
$’000
–
11,860
1,309
8,155
Movement in deferred tax asset:
Opening balance at 1 July
(Charged)/Credited to the Consolidated Statement of Comprehensive Income
Closing balance at 30 June
8,155
(6,846)
1,309
Recognised deferred tax assets and liabilities
Consolidated balances
Intangibles
Doubtful debts
Property, plant and
equipment
Employee entitlements
Provisions
Other
Tax assets/(liabilities)
Assets
Liabilities
Net
2023
$’000
946
34
1,422
4,788
1,302
–
8,492
2022
$’000
1,577
43
1,823
4,718
707
–
8,869
2023
$’000
(314)
(156)
(5,811)
–
–
(902)
(7,183)
2022
$’000
(314)
(12)
–
–
–
(388)
(714)
2023
$’000
632
(122)
(4,389)
4,788
1,302
(902)
1,309
9,431
(1,276)
8,155
2022
$’000
1,263
31
1,823
4,718
707
(388)
8,155
Movement in net deferred tax assets and liabilities
Consolidated movements
Intangibles
Doubtful debts
Property, plant and equipment
Employee entitlements
Provisions
Other
Tax assets/(liabilities)
Balance
30 June 2021
$’000
Recognised
in FY22
profit or loss
$’000
Balance
30 June 2022
$’000
Recognised
in FY23
profit or loss
$’000
Balance
30 June 2023
$’000
1,785
26
2,100
4,633
928
(41)
9,431
(521)
5
(277)
85
(221)
(347)
(1,276)
1,264
31
1,823
4,718
707
(388)
8,155
(632)
(153)
(6,212)
70
595
(514)
(6,846)
632
(122)
(4,389)
4,788
1,302
(902)
1,309
58
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 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 which 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 13 – Trade and other payables
Current
Trade creditors and accruals
Other financial liability – trade payables facility
Lease liabilities
Non-current
Lease liabilities
Trade Payables Facility
2023
$'000
2022
$'000
159,538
45,650
4,161
209,349
152,209
49,997
4,420
206,626
4,505
7,374
The Group has a trade payable facility which 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 (2022: $50,000,000).
The amount utilised and recorded within trade creditors at 30 June 2023 was $45,650,084 (2022: $49,996,948).
59
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY Note 14 – Provisions
Current
Employee entitlements
Non-current
Employee entitlements
Provisions
2023
$'000
2022
$'000
15,636
15,112
325
364
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 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.
Note 15 – 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)
2023
$'000
2022
$'000
72,500
50,000
2023
2022
Limits
100,000
30,000
130,000
Utilised
42,500
30,000
72,500
Limits
100,000
30,000
130,000
Utilised
20,000
30,000
50,000
(a) Long-Term Loan Facility
In May 2023 the Group refinanced $100m of its Long-Term Loan Facility (Facility) with ANZ and Westpac. The Facility term has an
expiry date of August 2026 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.
60
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 (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 2023, the value of legally enforceable cash balances which upon default or bankruptcy would be applied to the loan
facility is $43.0m (2022: $27.1m).
Note 16 – Share capital
Fully paid up capital:
315,832,713 ordinary shares with no par value (2022: 319,494,975).
Parent entity
2023
$'000
218,090
2022
$'000
225,114
Issued share capital was reduced by 3,662,262 ordinary shares in FY23 through the Share Buy-back (announced in on 18 August 2022).
Ordinary shares
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
2023
$'000
72,500
(43,023)
29,477
315,386
9.3%
2022
$'000
50,000
(27,078)
22,922
316,029
7.3%
61
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY Note 17 – Reserves and retained earnings
Reserves
Share-based payments reserve/Treasury Shares
Opening balance at 1 July
Options and performance rights expense
Dividends Paid/declared
Share-based payment transactions
Transfer to Retained earnings
Treasury Shares
Closing balance at 30 June
2023
$'000
3,146
2,861
261
223
(2,264)
(6,115)
(1,889)
2022
$'000
1,706
3,540
–
(232)
(1,868)
–
3,146
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. Treasury Shares represents the cost of the Company’s shares held by the Group.
Retained earnings
Opening balance at 1 July
Net Profit for the year
Dividends paid
Release of LTIP
Share-based payments reserve transfer
Closing balance at 30 June
Note 18 – 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
2023
$'000
87,769
41,825
(25,500)
(7,175)
2,264
99,185
2022
$'000
60,725
42,430
(17,253)
–
1,868
87,769
Ownership Interest
2023
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2022
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.
62
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Note 19 – Parent entity
As at 30 June 2023 and throughout the financial year ending on that date, the parent company of the Group was Ridley
Corporation Limited.
Result of the parent entity
Income/(loss) for the year
Total comprehensive income/(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
Treasury Shares
Profit Reserve
Retained earnings
Total equity
2023
$'000
43,008
43,008
1,208
269,410
270,618
2,224
72,500
74,724
195,894
218,090
4,227
(6,115)
74,500
(94,808)
195,894
2022
$'000
(6,942)
(6,942)
2,350
256,440
258,790
13,073
50,364
63,437
195,353
225,114
3,144
–
25,000
(57,906)
195,353
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 which are party to the deed. Further details of the Deed of Cross Guarantee and the subsidiaries subject to the deed,
are disclosed in Note 20.
63
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY Note 20 – 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
2023
$'000
1,252,239
(1,142,745)
109,494
2022
$'000
1,043,672
(945,355)
98,317
397
328
(13,669)
(34,129)
(5,484)
56,937
(16,810)
40,127
–
40,127
2023
$'000
89,535
40,127
(25,500)
(4,909)
99,253
–
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
Revenue
Cost of sales
Gross profit
Finance income
Other income
Expenses:
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
64
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 (c) Balance sheet
Current assets
Cash and cash equivalents
Receivables
Inventories
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
2023
$'000
2022
$'000
42,103
125,089
106,623
273,816
9,847
235,770
73,988
20,408
1,310
341,323
615,138
207,424
15,636
(705)
222,355
4,505
72,500
325
77,330
299,685
315,454
218,089
(1,889)
99,253
315,454
26,349
130,039
115,114
271,503
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
65
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY Note 21 – Related party disclosures
Dr Robert van Barneveld, a Director of Ridley Corporation, is the Group CEO and Managing Director of the SunPork Group. Ridley supply
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 23.
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
2023
$
3,171,903
206,538
1,334,650
74,140
1,171,047
–
2022
$
3,047,351
192,105
1,244,235
1,822
798,728
(247,000)
Total Key Management Personnel compensation
5,958,278
5,037,241
Note 22 – 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
2023
$'000
458
3,124
3,582
2022
$'000
334
3,206
3,540
Share-based payment arrangements
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
In May 2023 it was announced that, subject to shareholder approval at the 2023 Annual General Meeting, the Managing Director,
Quinton Hildebrand would be issued with 1,500,000 rights on 1 July, 2023 in addition to his ordinary allotment of LTIP rights. These rights
will be tested on the same basis as the FY24 LTIP. These rights were issued as part of special retention arrangements put in place for
Mr Hildebrand, the details of which are discussed later in the FY23 Remuneration Report.
66
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 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.
Current year issues under the Ridley Corporation Long Term Incentive Plan
For FY21, FY22 and FY23, there were two performance measures, namely Return on Funds Employed (ROFE) and Absolute Total
Shareholder Return (TSR).
The number of Rights issued to each participant in FY23 is divided equally into two tranches, Tranche A and Tranche B. The performance
measure for Tranche A Rights issued in FY23 is the ROFE hurdle as applied to all three years of the performance period (FY21 and
FY22: 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 (FY21 and FY22: 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
Risk-free interest rate being the Commonwealth
Government Bond rate at the date of grant
2023
2022
2021
1 July 2022
1 July 2021
1 July 2020
30 June 2025
30 June 2024
30 June 2023
$1.74
$1.15
$0.75
$1.541/$0.56
$1.041/$0.31
$0.671/$0.22
26.0%
6.70 cps
25.0%
5.00 cps
25.3%
3.50 cps
3.01%
0.195%
0.27%
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.
67
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY Note 22 – Share-based payments continued
Details of Rights outstanding under the plans at balance date are as follows:
2023
Grant date
Expiry date
Long Term Incentive Plan
1 July 2019
1 Sept 2020
1 July 2021
1 July 2022
30 Jun 20221
30 Jun 2023
30 Jun 2024
30 Jun 2025
Balance at
1 July 2022
Granted during
the year
Cancelled
during the year
Vested during
the year
Balance at
30 June 2023
3,520,056
5,764,913
4,400,436
–
13,685,405
–
–
–
3,033,730
3,033,730
(373,503)
(3,146,553)
(798,313)
(361,307)
(148,172)
(419,629)2
(100,303)2
–
–
4,546,971
3,938,826
2,885,558
(1,681,295)
(3,666,485)
11,371,355
1. The performance targets for this tranche of performance rights were met to 100% and consequently all of these Rights vested and were converted
into ordinary shares in FY23.
2. Rights of former executives who departed from Ridley in FY23 and on an agreed arrangement, whereby these rights vested prior to the original test
date and were converted into ordinary shares in FY23.
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 2022
30 Jun 2023
30 Jun 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
–
11,825,275
–
–
–
4,537,030
4,537,030
(2,350,000)
(33,335)
(156,971)
(136,594)
(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.
Ridley Employee Share Scheme (ESS)
Under the ESS, shares are offered to permanent employees with a minimum of 6 months’ continuous service prior to the offer date,
at a discount of 50%. Employees can elect to receive an interest free loan to fund the purchase of 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 is 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.
Shares issued to employees under the ESS vest immediately on grant date. 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.
An offer under the Scheme was made in September 2022, such that 342,000 (FY22: 426,618) shares were allocated to participating
employees during the year, of which nil (FY22: 300,000) were purchased on market and 342,000 (FY22: 126,618) were allocated
from the RCL Retirement Pty Ltd account in which Company shares are accumulated upon the departure of ESS scheme participant
employees. The fair value at grant date of the options issued in FY23 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
2023
2022
30 Sept 2022
30 Sept 2021
3 years
$2.04
$1.34
25.0%
8.9 cps
3.895%
3 years
$1.34
$0.78
25.0%
6.0 cps
1.445%
68
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Ridley ESS loan movements
2023 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
1 Sept 2021
1 Sept 2024
30 Sept 2022
30 Sept 2025
Weighted average exercise price
2022 Number of shares
$0.61
$0.66
$0.61
$0.41
$0.48
$0.66
$0.85
$0.84
$0.84
$0.64
$0.41
$0.78
$1.34
87,912
78,416
102,548
240,669
279,660
251,403
266,220
288,080
348,090
441,967
668,220
386,136
–
3,439,321
$0.64
–
–
–
–
–
–
–
–
–
–
–
–
342,000
342,000
$1.34
(14,652)
(12,064)
(19,848)
(48,620)
(56,880)
(58,839)
(59,160)
(65,095)
(67,920)
(113,367)
(59,570)
(26,469)
(16,000)
73,260
66,352
82,700
192,049
222,780
192,564
207,060
222,985
280,170
328,600
608,650
359,667
326,000
73,260
66,352
82,700
192,049
222,780
192,564
207,060
222,985
280,170
328,600
–
–
–
(618,484)
3,162,837
1,868,520
$0.67
$0.70
$0.68
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
1 Sept 2021
1 Sept 2024
Weighted average exercise price
$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
–
3,802,382
$0.62
–
–
–
–
–
–
–
–
–
–
–
426,618
426,618
$0.78
(24,420)
(21,112)
(24,810)
(58,344)
(73,470)
(67,754)
(78,387)
(94,180)
(113,200)
(82,150)
(111,370)
(40,482)
87,912
78,416
102,548
240,669
279,660
251,403
266,220
288,080
348,090
441,967
668,220
386,136
87,912
78,416
102,548
240,669
279,660
251,403
266,220
288,080
348,090
441,967
–
–
(789,697)
3,439,321
2,384,965
$0.66
$0.64
$0.68
The “Exercisable at end of the year” column in the above tables reflects the fact that the options remain restricted for 3 years.
69
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY
Note 23 – Retirement benefit obligations
Superannuation
The Group endorses the Ridley Superannuation Plan – Australia, which is administered by Mercer. The fund provides available benefits
on a defined contribution basis for employees or their dependents 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 $6,297,663 (2022: $5,538,222).
Note 24 – 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.
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
USD
1,340
2023
NZD
22
EUR
78
THB
914
USD
291
2022
NZD
554
EUR
8
THB
724
70
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 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 $213,990 (2022: $136,367) or increased by $261,543 (2022: $175,954) 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 5.51% (2022: 2.68%).
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 sensitivity
Interest rate
2023
Interest rate
2022
–
5.51%
43,023
72,500
–
2.68%
27,078
50,000
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 $0.5m (2022: $0.4m).
(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
Further credit risk disclosures on trade receivables are disclosed in Note 8.
2023
$'000
121,928
–
43,023
164,951
2022
$'000
127,732
–
27,078
154,810
71
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY Lease liabilities
Bank loans
2022 in $’000
Non-derivative
financial liabilities
Note 24 – Financial risk management continued
(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 15.
The following tables disclose the contractual maturities of financial liabilities, including estimated interest payments:
2023 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
205,188
205,188
8,666
72,500
4,250
3,995
286,354
213,433
–
3,044
38,210
41,254
–
1,767
7,419
9,186
–
632
44,195
44,827
–
22
–
22
205,188
9,715
93,819
308,722
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
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
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.
72
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 (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 30.
(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).
73
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY Note 25 – 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.
Property Motor vehicles
7,839
–
232
–
(2,502)
5,570
968
947
165
–
(955)
1,124
Property Motor vehicles
9,563
1,019
–
(164)
(2,579)
7,839
706
1,075
147
–
(960)
968
Property Motor vehicles
(8,196)
–
(225)
–
(255)
2,787
(5,889)
2,779
3,109
5,889
(773)
(947)
(165)
–
(43)
1,002
(925)
602
323
925
Plant
2,910
132
–
–
(1,131)
1,911
Plant
2,975
1,157
50
(187)
(1,085)
2,910
Plant
(2,846)
(132)
–
–
(94)
1,220
(1,852)
779
1,073
1,852
Total
11,717
1,079
397
–
(4,588)
8,605
Total
13,244
3,251
197
(351)
(4,624)
11,717
Total
(11,815)
(1,079)
(390)
–
(391)
5,009
(8,666)
4,161
4,505
8,666
Right-of-use assets – in $’000
2023 in $’000
Balance as at 1 July 2022
Additions to right-of-use assets
Execution of extension option
Cancellation of leases
Depreciation
Balance as at 30 June 2023
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
(i) Lease liabilities – in $’000
2023 in $’000
Balance as at 1 July 2022
Additions to lease liability
Execution of extension option
Cancellation of leases
Accretion of interest
Payments
Balance as at 30 June 2023
Current
Non-current
74
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 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
(ii) 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
Plant
(3,042)
(1,157)
(50)
187
(125)
1,340
(2,846)
1,096
1,751
2,846
Total
(13,523)
(3,251)
(197)
366
(484)
5,271
(11,815)
4,420
7,395
11,815
Some 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.
(iii) Amounts recognised in profit or loss and statement of cash flows
The financial impact of lease accounting on profit or loss was $5.0m (2022: $5.1m), comprising interest and amortisation (Refer Note5(b)
and Note 10). The total cash outflows for leases in the year was $5.0m (2022: $5.3m).
Note 26 – Commitments for expenditure
Expenditure contracted for but not recognised as liabilities:
Capital Plant and equipment
Capital plant and equipment
2023
$'000
2022
$'000
17,978
18,147
At 30 June 2023 there were $18.0m (2022: $18.1m) of capital plant and equipment commitments in place in respect of capital projects.
Note 27 – 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
2023
$'000
950
2022
$'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) which 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.
75
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY Note 28 – Events occurring after the balance sheet date
There were no matters or circumstances that have arisen since 30 June 2023 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.
Note 29 – 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
2023
$
2022
$
411,691
424,878
21,422
433,113
165,677
590,555
Note 30 – 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 2023 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 17 August 2023 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 and new or amended standards in preparing these consolidated
financial statements.
76
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 (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.
(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.
77
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY Note 30 – Corporate information and accounting policy summary continued
Basis of preparation continued
(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 2023 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
cash-settled share-based payment arrangements, which are measured at fair value (in the balance sheet).
(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
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 which are largely independent of the cash inflows from other assets or groups of assets (Cash Generating Units, or CGUs).
Refer to Note 11 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.
(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.
78
Notes to the Financial Statements continued30 June 2023RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 (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 2023.
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 2023 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 2023, the Group had nil (2022: 2) forward futures contracts in the form of swaps in Australian dollar currency with
a Mark to Market gain of $nil (2022: $1,137,212).
(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.
(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) 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.
(ix) 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.
79
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023DIRECTORS’ REPORTREMUNERATION REPORTAUDITOR’S INDEPENDENCE DECLARATIONFINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTSDIRECTORS’ DECLARATIONINDEPENDENT AUDITOR’S REPORTSHAREHOLDER INFORMATIONCORPORATE DIRECTORY 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 42 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 2023 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 20 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 2023.
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 Hildebrand
CEO and Managing Director
Melbourne
17 August 2023
80
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Independent Auditor’s Report
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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 2023 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated balance sheet as at 30 June 2023; • 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 Ridley Corporation Limited (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: • Valuation of Goodwill • Existence of Inventory 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. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Independent Auditor’s Report continued
82
Valuation of Goodwill ($68.9m) Refer to Note 11 Intangible assets to the financial report The key audit matter How the matter was addressed in our audit A key audit matter was the Group’s annual testing of goodwill for impairment due to: the magnitude of the goodwill balance (being 11% of total assets) and the judgment required by the management in assessing whether an impairment was required. Management tests goodwill for impairment on an annual basis. The models are largely manually developed, use a range of internal and external sources as inputs to the assumptions. 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. - 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 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, 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. - 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. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 R
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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. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. The Other Information we obtained prior to the date of this Auditor's Report was the Financial Report (including Directors’ report and the Remuneration Report). The Introduction, Chair and Managing Director’s Joint Review, Five Year Summary, Sustainability Review, Board of Directors, and Shareholder Information are expected to be made available to us after the date of the Auditor's Report. 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. Existence of Inventory ($107m) Refer to Note 9 Inventories to the financial report The key audit matter How the matter was addressed in our audit Existence of inventory is a key audit matter due to: • The size of the inventory balance relative to the Group’s financial position (17% of total assets); • The Group’s diverse and broad product range for different market segments; and • Inventory being held at geographically diverse locations around Australia at various distribution centres managed by the Group or third parties. These conditions result in greater audit effort across locations and across product ranges to gather sufficient evidence. Our procedures included: • Obtaining an understanding of the Group’s key processes for accounting for inventory. • Attending a sample of inventory counts to test the existence and condition of inventory at year end. Observing the Group’s processes, which included identifying slow moving and potentially obsolete finished goods inventory, we performed sample counts ourselves and compared count results to the Group’s and to their underlying system records. • For stocktakes attended, assessing the processing of count discrepancies to underlying inventory systems and financial reporting records for consistencies with amounts determined by the stocktake. • Obtaining external confirmations for a sample of third party managed locations and comparing the external parties’ records of inventory quantity to the Group’s. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Independent Auditor’s Report continued
84
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 2023 R
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Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of Ridley Corporation Limited for the year ended 30 June 2023, complies with Section 300A of the Corporations Act 2001. Directors’ responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in pages 31 to 40 of the Directors’ report for the year ended 30 June 2023. 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 17 August 2023 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Shareholder Information
As at 1 September 2023
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
100,001 and Over
Total
Number of
holders
Number of
Securities
% Held by
20 largest
shareholders
6,112
315,832,713
77.93
Number of
ordinary
shareholders
1,461
2,079
1,033
1,437
Number of
ordinary
shares held
675,286
6,002,532
7,620,311
37,335,002
102
264,199,582
6,112
315,832,713
% of ordinary
shares held
0.21
1.90
2.41
11.82
83.65
100.00
As at 1 September 2023, there were 504 holders of unmarketable parcels (comprising shareholdings less than 230 shares at $2.1800
per share) of ordinary shares.
20 largest fully paid shareholders
Number of
ordinary shares
% of fully paid
ordinary shares
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
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
RCL RETIREMENT PTY LTD
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
MR JAMES FONG SEETO
LJ & K THOMSON PTY LTD
QUINTON LANCE HILDEBRAND
MR ROSS MERVYN JOHNS
NETWEALTH INVESTMENTS LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
ANGIP NOMINEES PTY LTD
UBS NOMINEES PTY LTD
GARMARAL PTY LTD
MR RUSSELL LYONS
SANDHURST TRUISTEES LTD
20
CITICORP NOMINEES PTY LIMITED
Top 20 ordinary fully paid shareholders
Balance of ordinary fully paid shareholders
117,381,904
44,380,997
38,400,968
16,003,896
6,884,722
5,302,956
4,035,411
2,114,252
1,700,000
1,400,000
1,298,943
1,200,000
1,013,422
892,586
839,642
751,676
657,635
635,762
613,192
608,842
246,116,806
69,715,907
37.17
14.05
12.16
5.07
2.18
1.68
1.28
0.67
0.54
0.44
0.41
0.38
0.32
0.28
0.27
0.24
0.21
0.20
0.19
0.19
77.93
22.07
Substantial Shareholders – circa 24.50 % of issued capital (as at 1 September 2023)
Holding
% Holding1
AGR Agricultural Investments LLC / AGR Partners LLC
Schroder Investment Management Australia Limited
1. As per the latest Substantial Shareholder lodged with the ASX.
60,727,615
16,643,934
19.73
5.21
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RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 Directors' holdings
On 1 September 2023, the Directors of Ridley Corporation Limited had an interest in the following shares and perfromance rights of
the Company.
Director
MP McMahon
QL Hildebrand1
PM Mann
RJ van Barneveld
E Knudsen
R Jones
J Raffe
M Liang
Fully paid
ordinary shares
541,750
1,351,699
90,044
83,053
703,286
115,000
25,906
-
Ridley
Performance
rights
-
3,199,312
-
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-
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-
-
2,910,738
3,199,312
1. The Board has approved the offer of 669,650 Ridley Performance rights to Mr Hildebrand under the LTIP. In addition the Board has approved the offer
of 1,500,000 Ridley Performance rights to Mr Hildebrand Ridley's Special Purpose Retention Incentive Plan. Both of these offers are subject to
shareholder approval at the 21 November 2023 Annual General Meeting of the Company.
Voting rights
As at 1 September 2023, the number of holders of Fully Paid Ordinary Shares with full voting rights was 6,112. 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.
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RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023
Glossary
AASB
AASBs
AGM
ASX
Board
CEO
CGU
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
CODM
Company
Chief Operating Decision Maker
Ridley Corporation Limited
CSF Proteins
Ingredients Recovery businesses at Laverton, Victoria and Maroota, NSW
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
Special Retention Plan
Short Term Incentive
Total Employment Package
Total Recordable Frequency Rate
Total Shareholder Return
Volume Weighted Average Price
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
SRP
STI
TEP
TRFR
TSR
VWAP
88
RIDLEY CORPORATION LIMITED ANNUAL REPORT 2023 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
Facsimile 03 8624 6505
Email
secretary@ridley.com.au
www.ridley.com.au
ASX code RIC
Head office
Level 4, 565 Bourke Street
Melbourne Victoria 3000 Australia
Telephone 03 8624 6500
Facsimile 03 9960 6140
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
www.barastocpoultry.com.au
www.foodfordogs.com.au
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