LEADING ANIMAL NUTRITION ANNUAL REPORT 2024 Front cover photo credit (bottom left): Dog on tractor © Bec Sneath, Rural Love Photography ABN 33 006 708 765 Contents Ridley Corporation Limited (Ridley) is an integrated animal feed manufacturer, serving a diverse mix of species and lifecycles. 02 About Ridley 12 Board of Directors 03 Highlights 05 Locations and Sectors 06 Chair and Managing Director’s Joint Review 10 Five Year Summary 14 Financial Report 73 Independent Auditor’s Report 78 Shareholder Information 80 Glossary 81 Corporate Directory RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 01 About Ridley As Australia’s leading provider of quality, high-performance animal nutrition products, we believe smart animal nutrition plays a part in solving the food production challenges of today and tomorrow. 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 span the production and sourcing of raw materials, specialised nutrition formulation, feed manufacturing and on-ground sales support. 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. Our 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. 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. 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 supply high quality animal proteins and fats to Ridley’s feed mills, and also supply the wider stockfeed, pet food and biofuel industries, both domestically and internationally. Earlier this year, Ridley extended its geographic and product reach with the acquisition of the Oceania Meat Processors (OMP) business. OMP is a premium provider of mechanically deboned meat frozen block products and other raw materials for the global pet food industry with operations in Melbourne and Timaru, New Zealand. ANNUAL REPORT 2024 RIDLEY CORPORATION LIMITED 02 Disciplined Capital Management • Capital deployed in line with allocation framework • High operating cash conversion (116%) • Lower inventory at year-end, inclusive of OMP Delivering returns to Shareholders • Total shareholder return (TSR) of 11% • Progressive dividends paid/ determined (interim 4.40 cps + final 4.65 cps fully franked) • On-market share buy back announced for up to $20m Earnings growth • 1.2% EBITDA growth from corresponding business • $3.2m1 EBITDA contribution from Oceania Meat Processors (OMP) $39.9m NPAT Reported: -4.7% YoY decline Underlying: +1.1% YoY growth $92.8m 4.9% YoY growth EBITDA (underlying) $107.7m Operating cash flow (underlying) pcp $101.7m 11.2% ROFE (underlying) pcp 12.2% 0.55x pcp 0.33x Leverage (underlying) 9.05 cps Dividend (100% franked) pcp 8.25 cps Highlights 1. Reflects OMP EBITDA over the period April 2024 to June 2024. 2. Refer to page 15 section 3 for financial and non-financial definitions. 03 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 ANNUAL REPORT 2024 RIDLEY CORPORATION LIMITED 04 New South Wales Victoria New Zealand Tasmania Queensland South Australia Thailand Locations and Sectors Bulk Stockfeeds Packaged Feeds and Ingredients Business Unit Monogastric Ruminant Ingredient Recovery Aqua Nutrition Packaged Products Supplements Products Pellet, meals, concentrates and premixes for poultry and pigs. Pellet, meals, concentrates and premixes for dairy cattle, beef cattle and sheep. Rendered and MDM poultry, red meat and fish products for the pet food, stockfeed, aquaculture and biofuel sectors. Extruded and steam pelleted products for all prawn and fin fish, including novel ingredient NovaqPro. Bagged poultry, dairy, dog, horse and lifestyle animal feed. Block and loose lick supplements. 05 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Chair and Managing Director’s Joint Review Quinton Hildebrand Chief Executive Officer and Managing Director We are pleased to present the Annual Report for FY24 – a year of progress for Ridley. As a business we aspire to enhance our market offering through customer partnerships, to develop our performance culture, and to deliver exceptional shareholder value. In FY24, by leveraging the scale of our operations, we grew the market share “This year our diversified platform came to the fore to deliver a solid performance despite some challenging market conditions. We also made targeted acquisitions, aligned to strategy, which will facilitate future growth.” of our existing business. Through acquisition, we gained technical capability in fresh and frozen ingredients for the petfood sector, extended our supply chain for novel proteins into North America, and expanded Ridley’s operational footprint into New Zealand and Tasmania. We continued to evolve towards a high-performance culture, investing in leadership development, employing Mick McMahon Chair and Independent Non-Executive Director specific skills, and promoting the alignment of our staff with shareholder outcomes through incentives and participation in various employee share schemes. As a result of our performance, in FY24 shareholders were rewarded for their investment through the declaration of a progressive dividend and an increase in the market capitalisation of Ridley. SUMMARY ($ million unless otherwise stated) 2024 2023 Movement EBITDA1 – after individually significant items (“ISI’s”)3 90.0 88.5 ▲ 1.5 EBITDA2 – before individually significant items (“ISI’s”)3 92.8 88.5 ▲ 4.3 Net profit after tax (“NPAT”) – before ISI’s 42.3 41.8 ▲ 0.5 Net profit after tax (“NPAT”) – after ISI’s 39.9 41.8 ▼ (2.0) Total comprehensive income 40.1 41.8 ▼ (1.7) Operating cashflow4 107.7 101.7 ▲ 6.0 Consolidated cash inflow/(outflow)5 (21.3) (6.6) ▼ (14.7) Net debt 50.8 29.5 ▲ 21.3 Leverage ratio (times)6 0.55 0.33 ▲ 0.22 Earnings per share – before ISI’s (cents) 13.4 13.1 ▲ 0.3 Earnings per share (cents) 12.6 13.1 ▼ (0.5) 1. Calculated as NPAT of $39.9m adjusted for finance costs ($7.8m), income tax expense ($16.2m), depreciation and amortisation ($26.1m). 2. Calculated as EBITDA adjusted for individually significant items ($2.8m). 3. Refer note 1(c) in the financial statements for details on individually significant items (“ISI’s”). 4. Calculated as EBITDA before individually significant items ($92.8m), plus movement in working capital ($14.9m). 5. Calculated as closing net debt less opening net debt. 6. 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. ANNUAL REPORT 2024 RIDLEY CORPORATION LIMITED 06 “The first priority of Ridley’s Board and Management is the safety of our employees, suppliers and customers. Delivering for Customers In FY24, Ridley continued to use its integrated scale and capability to grow with existing customers and win new customers. High-quality, cost-effective nutrition products were supplied to the dairy, poultry, pig, aquaculture, sheep and beef bulk feed sectors; the equine, canine and home layer markets in the packaged product sector; and protein meals and animal fats from our ingredient recovery facilities to stockfeed, petfood and biofuel industries. In an economy facing high levels of inflation, Ridley was able to partially offset cost increases to customers due to efficiency projects and by leveraging volume increases. Solid Operational Performance The first priority of Ridley’s Board and Management is the safety of our employees, suppliers and customers. In FY24, Ridley recorded a Lost Time Injury Rate (LTIFR) of 12.7 and Total Recordable Frequency Rate (TRFR) of 14.9, which is against the trend we have seen in recent years. In response, we have intensified the focus on employee and contractor inductions, training and reducing manual handling, with a view to bringing the safety outcomes back to target levels. (Continued on page 8). 07 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Chair and Managing Director’s Joint Review continued The Bulk Stockfeeds segment contributed an EBITDA of $44.4m, an increase of $8.4m on the prior year. The strategy to leverage our procurement and nutrition capability, drive asset utilisation and share scale benefits and expertise with our customers, continued to support the growth in earnings. Within the ruminant sector, we experienced volume growth of 12.7%, with market share gains and the benefits of dry season feeding in the first quarter. The monogastric sector delivered efficiency initiatives which more than offset the lower volumes (1.2%) in part a result of the breeding issues that impacted much of the broiler industry throughout FY24, however, broiler volumes did show signs of recovery in the final quarter of FY24. The Packaged Feeds and Ingredients segment reduced earnings by $6.1m with an EBITDA contribution of $59.7m. The Ingredient Recovery business unit was negatively impacted by lower market prices for tallows and protein meals, partially offset by increased volumes associated with supplier wins and higher volumes on the back of drier conditions in the first half. The strategy of investing in capability to produce premium products was enhanced through the acquisition of Oceania Meat Processers (OMP) (producing mechanically deboned meat products for the petfood sector), which delivered a positive EBITDA result of $3.2m in the last quarter. Dog food volumes through the Packaged Products business grew by 8.8% year on year, as we increased volumes for pet product lines and delivered improved efficiency following the installation of the new packing operations. The Supplements business had a good year benefiting from drier conditions in the first half of FY24. Resilient Financial Performance In FY24, earnings before individually significant items, grew to $92.8m, up 4.9% on the prior year, based on our key financial metric of EBITDA from ongoing operations. The key financial indicators are summarised in the table on page 6. Net profit after tax, before individually significant items of $42.3m reflected a 1.9% growth over the prior year. The operating cash flow of $107.7m for FY24 (FY23: $101.7m) represents an improvement in working capital with strong collections coupled with the business shortening its hold of strategic inventory and increased usage of the trade payables facility. The strong balance sheet has been supported by an efficient operating cash conversion, with net debt only increasing by $21.3m, despite the outflow of $53.0m for the acquisition of OMP. The leverage ratio of 0.55x at year end was well below the 1 to 2x guidance in both our Capital Allocation Framework and banking facility covenant of 3.25x. This provides resilience through macro-economic uncertainty and a platform from which the business can take advantage of future investment opportunities. Building the Growth Platform We continue to invest capital into the business in a disciplined way, ensuring that we enhance our capacity and capability to provide earnings growth. In FY24, $14.5m was committed to maintenance capital and $18.4m to growth capital projects. Growth capital included de-bottlenecking projects for the Pakenham Ruminant Feedmill and the Clifton Monogastric Feedmill, new packing facilities for the companion pet business at Narangba, the ongoing delivery of Project Boost and various other capability enhancing projects. In FY24, Ridley Direct’s second year of operation, the team doubled its sales such that this business now accounts for 6% (or equivalent volumes of an average feedmill) of the Bulk Stockfeeds volumes. This initiative provides opportunity to generate returns by leveraging our raw material procurement scale and making sales to customers with whom we have traditionally had no dealings. Both Ingredient Recovery facilities benefitted from increased raw material supply during the year with over half of these volumes contracted on multi-year agreements. The Maroota facility in NSW, experienced a significant uplift in volumes following the closure of a nearby renderer, and the business is now working through the capital expenditure options to optimise returns. With the Aquafeed sector underperforming, the Narangba extrusion facility was restructured in the second half of FY24. As we relinquished low returning aquafeed sales, production reverted from a 7-day operation to a 5-day operation, and the Aquafeed sales and NovaqPro® business were combined into the Aqua Nutrition Business Unit with associated savings. The costs of this restructure were included in our FY24 full year results and the business now has extrusion capacity to participate for future petfood growth opportunities. The Packaged Products business continues to develop new branded products for the rural market. During FY24 the poultry feed range branding was refreshed and smaller pack sizes introduced for the peri-urban market. In addition, the new packing facility in Narangba, Queensland was completed in December 2023, unlocking an additional 10% extrusion capacity and automating the packing of smaller pack sizes in the petfood (dog and cat) range. ANNUAL REPORT 2024 RIDLEY CORPORATION LIMITED 08 Ridley’s Sustainability Pathway, released in May 2022, continued to gain momentum in FY24. Building on the 4 pillars of Smarter Ingredients, Optimised Production, Effective Solutions and Meaningful Partnerships, we established 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 is included in our stand-alone Sustainability Report. Targeted Acquisitions Whilst investing organically in our existing business, we also made acquisitions that will accelerate our future growth. Within the Packaged Feeds and Ingredients Segment, the Ingredient Recovery business continued to “climb the wall of value” by extending its product offering and capability with the acquisition of Oceania Meat Processors. OMP is a premium provider of mechanically deboned meat frozen block products and other raw materials for the global petfood industry with operations in Melbourne and Timaru, New Zealand. The integration of OMP into Ridley is progressing to plan. We have committed to a new leasehold facility (including a custom-built plant) in Timaru New Zealand which, when complete in October 2025, will replace the current leased facility in Timaru; enhance the OMP product offering; lower operating costs; and provide capacity for future growth. Our strategy in the Bulk Stockfeeds Segment is to increase market share by supporting the growth of our current customer base and win new customers. To further this strategy, at the end of FY24, Ridley made an offer for the Carrick Feedmill, Tasmania which completed at the end of August 2024. This feedmill will enhance Ridley’s ability to supply dairy customers in Tasmania and creates capacity at the Pakenham Ruminant Feedmill (which has been supplying the Tasmanian market) to supply growth opportunities in Gippsland, Victoria. In anticipation of pursuing further growth opportunities for Ridley, we have embarked on a deliberate program to develop the leadership and skills of the business. This comprises a development program for existing leaders as well as recruiting new capability to augment the management team. Effective Governance The Board comprises a majority of independent non-executive directors that bring a mix of skills, experience, diversity and knowledge to Ridley. We operate an established governance framework to oversee the business and deliberately prioritise time spent on strategy and increasing shareholder value, while maintaining an appropriate lens on risk and balancing the interests of all stakeholders. 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. Delivering for Shareholders With the performance and outlook for the business, together with the strength of the balance sheet, the Board has declared a progressive dividend of $27.1m (FY23: $25.2m), paying at the top of the indicative pay-out ratio. Furthermore, the Board has announced a share buy-back for up to $20m in FY25 which will enhance shareholder value while retaining flexibility to invest in other growth opportunities. Looking Forward As a short-term outlook, Ridley’s business portfolio, with its diversified spread of operations and markets, provides a platform to deliver consistent growth. In FY25 Ridley expects earnings growth in the Packaged and Ingredients segment from continued premiumisation in the petfood sector; and the Bulk Stockfeeds segment from volume increases enabled by the de-bottlenecking projects. The business continues to take steps to reduce the adverse impact of inflationary pressures, biosecurity events and changes in commodity cycles. Cash generated from operations and a strong balance sheet support the $20m buy-back and payment of progressive dividends, while still promoting ongoing investment in the business to pursue growth opportunities. Acknowledgements We would like to thank our Director colleagues for their commitment to the business and their leadership in positioning Ridley for the future. On behalf of the Board, we would like to recognise the efforts of the executives and all employees over the past year. We also wish to acknowledge the customers and suppliers of Ridley as these partnerships continue to underpin the business. Finally, we appreciate our shareholders for their investment in Ridley. Mick McMahon Director and Ridley Chair Quinton Hildebrand CEO and Managing Director “Our commitments are designed to improve the sustainability of our supply chains and provide Ridley with a competitive advantage.” RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 09 Five Year Summary Five year summary A$’000 2024 2023 2022 2021 2020 Operating results Revenue 1,262,897 1,260,133 1,049,086 927,719 967,942 Other income 441 328 13,045 4,917 1,082 EBITDA 90,012 88,503 80,144 69,178 15,084 Depreciation and amortisation expense (26,128) (24,781) (25,775) (29,629) (26,159) Earnings before interest and tax (EBIT) 63,884 63,722 63,303 39,549 (11,075) Net finance cost (7,823) (5,086) (2,849) (4,509) (5,828) Operating (loss)/profit before tax 56,061 58,635 60,454 35,040 (16,903) Tax benefit/(expense) (16,208) (16,810) (18,024) (10,144) 6,041 Net (loss)/profit after income tax attributable to members 39,853 41,825 42,430 24,896 (10,862) Other comprehensive income/(loss) (net of tax) 249 – – – 114 Total comprehensive (loss)/income 40,102 41,825 42,430 24,896 (10,748) Net (loss)/profit on significant items (net of tax) (2,443) – 6,253 28 (32,808) Net (loss)/profit after income tax attributable to members before individually significant items 42,296 41,825 36,177 24,868 22,060 Financial position – in A$’000 unless otherwise stated Ridley shareholders’ funds 323,119 315,386 316,029 287,545 259,537 Intangible assets 107,626 73,988 74,972 75,892 75,001 Total assets 664,381 617,701 607,365 613,061 644,618 Total liabilities 341,262 302,315 291,336 325,516 385,081 Net debt 50,804 29,477 22,901 83,096 147,182 Market capitalisation 672,724 631,665 571,896 363,557 226,407 Enterprise value (market capitalisation plus net debt) 723,528 661,142 594,797 446,653 373,589 Development capital expenditure 18,371 23,012 10,900 10,423 42,900 Operating cash flow (statutory) 105,056 79,081 46,588 85,778 22,367 Closing share price (cents) 213.00 200.00 179.00 114.00 72.50 Weighted average number of shares on issue – non-diluted (thousands) 315,833 318,567 319,495 318,910 312,285 Number of employees (number) 705 660 613 612 622 Key profitability ratios Sales tonnes (millions) 2.04 1.94 1.82 1.75 1.80 EBITDA/tonne ($) 44.16 45.69 44.04 39.53 8.38 EBITDA: shareholders’ funds (%) 28% 28% 25% 24% 6% Return on shareholders’ funds (%) 12.3 13.3 13.4 8.7 (4.2) Earnings per share (EPS) (cents) 12.6 13.1 13.3 7.8 (3.5) Total Shareholder Returns (%) 10.8 16.2 61.8 60.0 (37.8) EPS growth (%) (3.9) (1.1) 70.1 324.4 (145.8) EBITDA growth (%) 1.7 10.4 15.9 358.6 (72.2) Operating cash flow/EBITDA (times) 1.2 0.9 0.6 1.2 1.5 Operating cash flow per share (cents) 33.3 24.8 14.6 26.9 7.2 Market capitalisation/operating cash flow (times) 6.4 8.0 12.3 4.2 10.1 EBITDA per employee (A$’000) 127.7 134.1 130.7 113.0 24.3 Capital market and structure ratios Gearing: Debt/Debt plus Equity (being enterprise value) (%) 7% 4% 4% 19% 39% Interest cover: EBITDA/net interest (times) 11.5 17.4 28.1 15.3 2.6 Market capitalisation/EBITDA (times) 7.5 7.1 7.1 5.3 15.0 EBITDA per share (cents) 28.5 27.8 25.1 21.7 4.8 EBITDA growth (%) 1.7 10.4 15.9 358.6 (72.2) Enterprise value/EBITDA (times) 8.0 7.5 7.4 6.5 24.8 Price/Earnings (P/E) ratio (share price/EPS) (times) 16.9 15.2 13.5 14.6 (20.8) Net debt/shareholders’ equity (%) 15.7 9.3 7.2 28.9 56.7 Equity/Total Assets (%) 48.6 51.1 52.0 46.9 40.3 Net debt/EBITDA (times) 0.6 0.3 0.3 1.2 2.6 Net tangible asset (NTA) backing per share (cents) 68.2 75.8 75.4 66.4 59.1 Dividends per share (cents) 9.05 8.25 7.40 2.00 1.50 Dividend payout ratio (%) 71.3 62.8 55.7 25.6 (43.6) Percentage franked (%) 100 100 100 100 100 10 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Times Leverage Ratio (Per Banking Facility) 3.0 2.5 2.0 1.5 1.0 0.5 0.0 $ Millions Consolidated NPAT -20 -10 0 20 10 30 40 50 0.33 2023 0.55 2024 0.29 2022 2020 2.63 2021 1.20 $ Millions Net Debt 150 125 100 75 50 25 0 $ Millions EBITDA from Continuing Operations 100 80 60 40 20 0 1. Payable in respect of the financial year. 90.0 2024 15.1 2020 69.2 2021 80.1 2022 29.5 2023 50.8 2024 147.2 2020 83.1 2021 22.9 2022 Cents Per Share Dividends1 10.0 8.0 6.0 4.0 2.0 0.0 8.25 2023 9.05 2024 7.40 2022 2020 1.50 2021 2.00 $ Millions Operating Cash Flow (Statutory) 120 100 80 60 40 20 0 79.1 2023 105.1 2024 22.4 2020 85.8 2021 46.6 2022 Cents Per Share Earnings Per Share 15 12 9 6 3 0 -3 -6 13.1 2023 12.6 2024 2020 7.8 -3.5 2021 13.3 2022 2023 88.5 2020 -10.8 2021 24.9 2022 33.5 2023 41.8 2024 39.8 11 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Board of Directors Quinton Hildebrand BSc AgEcon, MBA Chief Executive Officer and Managing Director Julie Raffe GAICD, FFIN, FCA Independent Non-Executive Director Mick McMahon B Ec (UTAS) / Harvard AMP 176 Independent Non-Executive Director and Ridley Chair Appointed in August 2019, Quinton has 30 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 None. 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. 12 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Melanie Laing BA (Hons), FAICD, FAHRI, CEW Independent Non-Executive Director Ejnar Knudsen CFA Non-Executive Director Rhys Jones BSc (Chem), BBS(Hons) (1st), MBS Independent Non-Executive Director Appointed 1 September 2023, Melanie brings a depth of experience as a c-suite executive and people and culture leader in large multinational and listed corporates, as well as entrepreneurial and rapid growth businesses. Melanie has a Bachelor of Arts (Hons) from the University of the Witwatersrand, and has more than 30 years of professional experience across various sectors and geographies. Melanie is a non-executive director and people and remuneration committee chair of AUB Group Limited, and has also held global and regional executive leadership roles at the Commonwealth Bank of Australia, Origin Energy and Unisys Corporation. Melanie is a fellow of both 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 AUB Group Limited from November 2023. Former listed company directorships in the last three years Keypath Education International Inc Inflection Inc 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. 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. 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. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 13 Directors’ Report 15 Remuneration Report – Audited 21 Auditor’s Independence Declaration 31 Consolidated Statement of Profit or Loss and Other Comprehensive Income 32 Consolidated Balance Sheet 33 Consolidated Statement of Changes in Equity 34 Consolidated Statement of Cash Flows 35 Index of Notes 36 Notes to the Financial Statements 37 Consolidated Entity Disclosure Statement 71 Directors’ Declaration 72 Independent Auditor’s Report 73 Shareholder Information 78 Financial Report ANNUAL REPORT 2024 RIDLEY CORPORATION LIMITED 14 Directors’ Report For the Year Ended 30 June 2024 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 2024 (FY24). 1. Directors The following persons were directors of Ridley Corporation Limited during the whole of the financial year and up to the date of this report unless otherwise stated: M McMahon Q L Hildebrand J E Raffe E Knudsen R Jones M Laing (appointed 1 Sep 2023) P M Mann (resigned 20 Nov 2023) R J van Barneveld (resigned 20 Nov 2023) 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) FY24 results are: • EBITDA before individually significant items was $92.8m, representing a $4.3m, or 4.9% increase on FY23 achieved through the execution of Ridley’s Growth Strategy. The Bulk Stockfeeds segment increased EBITDA by $8.4m, mostly through customer wins in ruminant and operating efficiency, which more than offset the reduction in the Packaged Feed and Ingredient Segment, down $6.1m, which was negatively impacted by lower tallow and meal pricing but benefited from EBITDA of $3.2m from the newly acquired Oceania Meat Processors (OMP) business. • The profit after tax was $39.9m, representing a $2.0m, or 4.7% reduction when compared to FY23. The result included $2.4m of individually significant items expense after tax, which largely related to the acquisition transaction costs of OMP. The underlying net profit, was $42.3m, representing a $0.5m increase when compared to FY23. • The operating cashflow of $107.7m represents an improvement on FY23 of 6.0m or 5.9%, supported by disciplined working capital management which was partially achieved on the back of the increased usage of the trade payables facility (increased $19.3m) and lower tax payments (reduced $10.8m) related to the timing of tax payments. • The Balance Sheet strength was maintained. Net debt increased by $21.3m, which included the cash outflow of $53.0m for the acquisition of OMP, and underlying debt (excluding the acquisition) was reduced by $31.7m. SUMMARY ($ million unless otherwise stated) 2024 2023 Movement EBITDA1 – after individually significant items (“ISI’s”)3 90.0 88.5 ▲ 1.5 EBITDA2 – before individually significant items (“ISI’s”)3 92.8 88.5 ▲ 4.3 Net profit after tax (“NPAT”) – before ISI’s 42.3 41.8 ▲ 0.5 Net profit after tax (“NPAT”) – after ISI’s 39.9 41.8 ▼ (2.0) Total comprehensive income 40.1 41.8 ▼ (1.7) Operating cashflow4 107.7 101.7 ▲ 6.0 Consolidated cash inflow/(outflow)5 (21.3) (6.6) ▼ (14.7) Net debt 50.8 29.5 ▲ 21.3 Leverage ratio (times)6 0.55 0.33 ▲ 0.22 Earnings per share – before ISI’s (cents) 13.4 13.1 ▲ 0.3 Earnings per share (cents) 12.6 13.1 ▼ (0.5) 1. Calculated as NPAT of $39.9m adjusted for finance costs ($7.8m), income tax expense ($16.2m), depreciation and amortisation ($26.1m). 2. Calculated as EBITDA adjusted for individually significant items ($2.8m). 3. Refer note 1(c) in the financial statements for details on individually significant items (“ISI’s”). 4. Calculated as EBITDA before individually significant items ($92.8m), plus movement in working capital ($14.9m). 5. Calculated as closing net debt less opening net debt. 6. 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. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 15 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY 4. Review of operations The first priority of the Board and Management of Ridley is the safety of our employees, suppliers and customers. In FY24 Ridley recorded a Lost Time Injury Rate (LTIFR) of 12.7 and Total Recordable Frequency Rate (TRFR) of 14.9. All business units maintained their focus on operating efficiency to ensure that inflationary costs were able to be managed in order to reduce the value of costs that were passed through to customers. In FY24, $14.5m in maintenance capex was prioritised and a further $18.4m in growth capex including the expansion projects at the Clifton and Pakenham Feedmills and the new Narangba Packing facility. Segment performance The Bulk Stockfeeds segment contributed an EBITDA of $44.4m (FY23: $36.0m). The strategy to leverage our procurement and nutrition capability, drive asset utilisation and share scale benefits and expertise with our customers continued to support the growth in earnings. Within the ruminant sector, we experienced volume growth of 12.7%, with market share gains and the benefits of dry season feeding in the first quarter. The monogastric sector delivered efficiency initiatives which more than offset the lower volumes (1.2%) in part a result of the breeding issues that impacted much of the industry throughout FY24, however, poultry volumes did show signs of recovery in the final quarter of FY24. The Packaged Feeds and Ingredients segment reduced earnings with an EBITDA of $59.7m (FY23: $65.8m). The Ingredient Recovery business unit was negatively impacted by lower market prices for tallows and protein meals, which was partially offset by increased volumes associated with supplier wins and higher volumes on the back of drier conditions in the first half. The strategy of investing in capability to produce premium products was enhanced through the acquisition of OMP, which delivered a positive EBITDA result of $3.2m in the last quarter. Dog volumes through the Packaged Products business grew by 8.8% year on year, as we increased volumes for pet product lines and delivered improved efficiency following the installation of the new packing operations. The Supplements business benefited from drier conditions in the first half of FY24. The Aquafeed sector underperformed which resulted in a restructure in the second half. The costs of the restructure where included in the results and the business has now transferred to a lower cost operation whilst freeing capacity for future petfood capacity. The Thailand facility that manufactures the raw materials for NovaqPro® continued to improve its cost base, while the commercial focus for NovaqPro® continues to be the domestic prawn feed market and expansion into international markets through the sale of prawn booster diets marketed as NovaqPro® Propel. Corporate cost The unallocated corporate costs of $11.3m (FY23: $13.3m) were below the prior year as remuneration costs associated with the Groups incentive programs were reduced. Other key cost areas of salaries and insurance were well managed. Net finance costs increased to $7.8m from $5.1m, which was primarily a product of the higher market interest rates and the increase in debt following the acquisition of the OMP business in the final quarter of FY24. Cashflows and debt The operating cash flow of $107.7m (FY23: $101.7m) represents an improvement over the previous year, however this understates the benefits of the strong operating cash conversion delivered in both years (FY24 116% vs FY23 115%). This was achieved in part through a reduction of inventory in response to the improving global supply chains, together with a $19.3m benefit from the increased usage of the trade payables facility. Net debt at 30 June 2024 was $50.8m (FY23: $29.5m) and the FY24 leverage ratio was 0.55 times (FY23: 0.33). During the period, the strong operating cash flow helped to fund the acquisition of OMP ($53.0m), the increased dividends paid ($27.1m) and $7.9m to acquire shares to fund employee incentives. Earnings per share The earnings per share as at 30 June is reflected in the table below: 2024 Cents 2023 Cents Basic / Diluted earnings per share 12.6 / 12.2 13.1 / 12.7 Basic / Diluted earnings per share – before individually significant items 13.4 / 13.0 13.1 / 12.7 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. Directors’ Report continued 16 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Events occurring after the balance sheet date There were no matters or circumstances that have arisen since 30 June 2024. 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 economy, (namely poultry, 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 cycles 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 work closely with the Australian operations. The business owns the land upon which it operates reducing the risk of changes in the regulatory environment. • New Zealand Operational and Regulatory risk – with the acquisition of OMP, which has operations in New Zealand, the business is actively managing the operational risks through an established local management team that work closely with the Ridley Australian operations. The acquired business also has operations in Australia and capacity can be alternated between the two operations/ countries if required. • Foreign Currency Risk – the business trades and operates in multiple currencies, including USD, NZD and Thai Baht. The business maintains strategies to reduce its exposure to movements in exchange rates including executing forward contracts to offset known net exposures. • 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 non-payment, interest rate increases, 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. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 17 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY 4. Review of operations continued Key drivers In FY25 Ridley expects to create shareholder value through: Packaged & Ingredients segment from: • a full year earnings contribution of OMP • raw material supplier benefits in Ingredient Recovery following the closure of a competitor • cost savings from the restructure of extrusion operations Bulk Stockfeeds segment from: • volumes enabled by the Pakenham and Clifton de-bottlenecking projects • market share growth from the acquisition of Carrick feedmill • increased broiler feed volumes following the recovery from industry breeder limitations These earnings benefits are expected to more than offset cost increases, including employees, utilities and inflation. Outlook Our business portfolio, with its diversified spread of operations and markets, provides a platform to deliver consistent growth. In FY25, Ridley expects earnings growth in the: • Packaged & Ingredients segment, from continued premiumisation in the petfood sector; and • Bulk Stockfeeds segment, from volume increases enabled by the de-bottlenecking projects. The business continues to take steps to reduce the adverse impact of inflationary pressures, biosecurity events and changes in commodity cycles. Cash generated from operations and a strong balance sheet support the $20m buy-back and payment of progressive dividends, while still promoting ongoing investment in the business to pursue growth opportunities. 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 2024. 6. Dividends and distributions to shareholders The FY23 final dividend of 4.25 cents per share franked to 100% was paid on 26 October 2023. The FY24 interim dividend of 4.4 cents per share franked to 100% was paid on 24 April 2024. Following a year of strong operating performance and operating cash generation, the Board has declared a final dividend of 4.65 cents per share (cps), fully franked and payable on 24 October 2024 for a cash outlay of approximately $14.7m. 7. Directors’ and executives’ remuneration Refer to the Remuneration Report. Directors’ Report continued 18 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 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, Nomination and People Committee Ridley Innovation and Operational Committee Sustainability Committee Directors H A H A H A H A H A M McMahon 10 10 4 4 3 3 – – 2 2 Q L Hildebrand 10 10 – – – – 1 1 1 1 E Knudsen 10 9 – – – – 1 1 2 1 R Jones 10 10 2 2 3 3 – – – – J Raffe 10 10 2 2 2 2 – – – – M Laing1 9 9 – – 2 2 – – 2 1 P M Mann2 3 3 2 2 – – – – – – R J van Barneveld2 3 3 2 2 – – 1 1 – – 1. Appointed 1 September 2023. 2. Resigned 20 November 2023. References to director meeting attendance table: H: Number of meetings held during the period the Director was a member of the Board or Committee. 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: Number Expiry Date Ridley Corporation Long Term and Special Retention Incentive Plan (Performance Rights) 10,334,432 Various Ridley Employee Share Scheme (Options)1 2,443,020 Various 1. The share grant and supporting loan together in substance comprise a share option. 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 19 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. 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. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 19 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY 12. Post balance date events There were no matters or circumstances that have arisen since 30 June 2024 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 FY24 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 31 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 369,930 Taxation and other services 68,068 Total 437,998 16. Rounding of amounts to nearest thousand dollars The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 issued by the Australian Securities and Investments Commission relating to the “rounding off” of amounts in the directors’ report and financial statements. Amounts in the directors’ report and the consolidated financial statements have been rounded off to the nearest thousand dollars in accordance with that legislative instrument, unless otherwise indicated. Signed in Melbourne on 21 August 2024 in accordance with a resolution of the Directors. Mick McMahon Director and Ridley Chair Quinton Hildebrand CEO and Managing Director Directors’ Report continued 20 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Remuneration Report – Audited Report structure The Remuneration Report for the year ended 30 June 2024 (FY24) has been prepared in accordance with the Corporations Act 2001 (Cth) (the Act) and Accounting Standards, audited as required by section 308 (3C) of the Act. The Remuneration Report is divided into the following sections: 1. Key Management Personnel 2. Remuneration link with Company performance and strategy 3. Remuneration framework details 4. Company performance and remuneration outcomes 5. Non-executive Director arrangements 6. Remuneration Governance 7. Statutory tables and disclosures. 1. Key Management Personnel The Remuneration Report discloses the remuneration arrangements and outcomes for the people listed below, who are KMP, as defined by AASB 124 Related Party Disclosures. Name Position Term as KMP in FY24 Non-Executive Directors M P McMahon Non-Executive Chair Full Year R Jones Non-Executive Director Full Year E Knudsen Non-Executive Director Full Year M Laing Non-Executive Director Appointed 1 September 2023 J Raffe Non-Executive Director Full Year P Mann Non-Executive Director Ceased 20 November 2023 R J Van Barneveld Non-Executive Director Ceased 20 November 2023 Executive KMP Q L Hildebrand Managing Director and Chief Executive Officer (CEO) Full Year R Betts Chief Financial Officer (CFO) Full Year C Klem Chief Operating Officer, Ingredient Recovery Full Year R Singh Chief Operating Officer, Ruminant Stockfeeds, Packaged products and Aquafeed Full Year S Clowes Chief Operating Officer, Monogastric Stockfeeds Full Year K Clarke General Counsel and Company Secretary Full Year RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 21 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY 2. Remuneration link with Company performance and strategy Ridley’s remuneration framework is designed to align reward with the achievement of annual objectives, successful business strategy and shareholder returns. The framework is designed around three principles, which are summarised in the following table. Remuneration Component Principles and Purpose Performance link Delivery and timeline Total Employment Package (base salary + superannuation) (TEP) Competitively set to attract and retain talented people. Considers the size and complexity of the role and the skills and experience required for success in the role. Roles are benchmarked annually against a Comparator Group of companies comprised of ASX and private companies of comparable activity and scale. Cash salaries, employer contributions to superannuation and salary sacrifice benefits paid continuously throughout each year. Short Term Incentive Plan (STIP) To drive focus and discretionary effort. Performance is tested at the end of a one-year performance period. Annual performance targets are based on two streams: • Group financial performance (70% weighting); and • Individual KPIs (30% weighting). Group financial performance is assessed against a stretch budget EBITDA. Where achievement of 90% of stretch budget EBITDA is reached, the payment of a partial STIP based on the achievement of individual KPIs will be assessed by the Board at its sole discretion. Awarded annually, subject to audited financial results and Board discretion. Long Term Incentive Plan (LTIP) Reward aligned to the creation of long-term shareholder value. Annual grants are made to executives based on their capacity to influence long-term outcomes. The awards are granted at the beginning of a three-year performance period and are based on two performance measures, namely Return on Funds Employed (ROFE) and Absolute Total Shareholder Returns (TSR). Performance rights awarded annually. Tested after 3-year performance period. Vested rights remain subject to restrictions regarding the timing of the sale of shares allocated under this scheme. Remuneration Report – Audited continued 22 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 3. Remuneration framework details Details of Short-Term Incentive Plan The following is a detailed description of the operation of the STIP. Parameter Details Opportunity CEO: target opportunity equivalent to 150% of TEP CFO: target opportunity equivalent to 60% of TEP Other executive KMP: target opportunity equivalent to 40% of TEP Performance measures & weighting STIP is linked to the Group’s underlying EBITDA performance, operational and strategic KPIs, including safety. All Executive KMP: Group underlying EBITDA (70%) and individual KPIs (30%). The Board considers these measures to be appropriate as they are strongly aligned with the interests of shareholders. Underlying EBITDA (or EBITDA before individually significant items) is a key indicator of the underlying growth of the business, supporting future capital investments and enables the payment of dividends to shareholders. Award calculation A summary of the STIP award structure for FY2024 is shown in the following table, subject always to the exercise of discretion by the Board. Metric Proportion of budgeted EBITDA Award Financial < Stretch Budget minus $5m Nil Financial Stretch Budget minus $5m to Stretch Budget 51-100% of the 70% Group Financial component straight line pro rata of incremental EBITDA up to $5m Financial ≥ Stretch Budget Capped at 100% of the 70% financial component Individual < 90% Nil Individual 90% or greater 100% of the 30% individual KPI component subject to the individual meeting his or her own KPls for the year and to Board discretion Details of Long-Term Incentive Plan The following is a detailed description of the operation of the LTIP. Parameter Details Opportunity CEO: target opportunity equivalent to 170% of TEP CFO: target opportunity equivalent to 100% of TEP Other executive KMP: target opportunity equivalent to 60% of TEP Instrument, dividends and voting rights LTIP awards are delivered in the form of share rights. The share rights do not carry any dividend or voting arrangements. Each vested share right represents a right to a fully paid ordinary share in the Company. Number and type of share rights The total number of share rights to be granted is calculated by taking the value of the award being made and dividing by the value of the Value Weighted Average Price (VWAP) of ordinary shares for the five-day trading period prior to 30 June in the year prior to the issue of the share rights. The award is divided into two halves, each with its own vesting conditions: • Tranche A – subject to a Return on Funds Employed (ROFE) performance condition with a conventional vesting scale. • Tranche B – subject to an Absolute Total Shareholder Return (TSR) performance condition with a conventional vesting scale. ROFE tranche ROFE is calculated as the yearly average of Ridley’s Consolidated Underlying Group Earnings Before Interest, Tax, Depreciation and Amortisation (Underlying EBITDA) before significant items divided by the Funds Employed (FE). 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. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 23 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY Parameter Details Absolute TSR tranche 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 fair value of Tranche B Rights is calculated by an independent expert in accordance with Share-Based Payment accounting standard AASB2 on an option-equivalent basis. Award Criteria The performance criteria for Rights on issue in FY24 are set out in the following table: Tranche Metric FY22 Scheme1 FY23 Scheme2 FY24 Scheme3 Award A ROFE <15% <15% <20% Nil A ROFE – – 20% 50% A ROFE 15% – 25% 15% – 25% 20% – 27.5% 50 – 100% on a straight-line pro rata basis A ROFE >25% >25% >27.5% 100% B Absolute TSR <30% <30% <30% Nil B Absolute TSR 30% 30% 30% 50% B Absolute TSR 30% – 70% 30% – 52%% 30% – 52% 50% – 100% on a straight-line pro rata basis B Absolute TSR >70% >52% >52% 100% 1. 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. 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 2022 to 30 June 2025. 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 2023 to 30 June 2026. Service conditions and cessation of employment If an LTIP participant resigns or is terminated for cause, any unvested LTIP plan awards will be forfeited, unless otherwise determined by the Board. Any such performance rights will be subject to the original terms and conditions, and discretion of the Board. Remuneration Report – Audited continued 3. Remuneration framework details continued 24 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 4. Company performance and remuneration outcomes This section summarises remuneration outcomes for FY2024 and provides commentary on their alignment with Company outcomes. 4.1 Five-year Company performance and remuneration outcomes The table below summarises key indicators of the performance of the Company and relevant shareholder returns over the past five financial years. 2020 2021 2022 2023 2024 Total comprehensive Income/(loss) $’000 (10,748) 24,896 42,430 41,825 40,102 Earnings Before Interest, Tax and Depreciation & Amortisation (EBITDA) before Individually Significant Items $’000 59,418 69,148 80,144 88,505 92,7841 EBITDA after individually significant items $’000 15,084 69,148 89,077 88,505 90,0122 Cash flow from operating activities (statutory) $’000 22,367 85,778 46,588 79,081 105,056 Year end closing share price $ 0.72 1.14 1.79 2.00 2.13 EBITDA Return on Funds Employed3 % 16.0 17.8 24.9 25.6 25.1 Return on Funds Employed (ROFE)4 % (2.6) 6.8 10.9 12.2 11.2 Dividends paid $’000 13,226 – 17,253 25,500 27,320 TSR5 % (35.5) 67.9 61.8 16.2 10.8 1. FY24 Non-IFRS measure calculated as Net Profit After Tax (NPAT) of $39.9m adjusted for Net Finance Costs ($7.8m), Tax Expense ($16.2m), Depreciation and Amortisation ($26.1m) and before Individually Significant Items of $2.8m. 2. FY24 EBITDA calculated above including Individually Significant Items of $2.8m. 3. FY24 calculated as underlying EBITDA before Individually Significant Items divided by average Funds Employed for the three-year period. 4. Calculated as underlying NPAT divided by Funds Employed. 5. 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. 4.2 Executive Key Management Personnel Short-Term Incentive outcomes for FY2024 The FY2024 STIP outcomes for the KMP are set out in the table below. The outcomes reflect the combination of the overall company performance for the year (financial component) as well as the individual KPI performance for the year (individual component) for each KMP member. The weighting is 70% financial and 30% individual. The threshold for the payment of an individual STIP was not achieved and therefore KMPs were ineligible for a STIP in FY24, despite delivering against individual targets. Maximum STIP Opportunity $1 Actual 2024 STI $ Actual STIP payment as % of maximum % of maximum STIP forfeited Current Executive KMP Q L Hildebrand 1,158,750 – – 100% R Betts 339,900 – – 100% C Klem 156,560 – – 100% R Singh 165,600 – – 100% S Clowes 148,320 – – 100% K Clarke 130,200 – – 100% 1. Maximum financial value applicable to the maximum percentage. 4.3 Long-term performance and Long-term Incentive outcome Outcomes for the FY2022 scheme, which were approved by the Board, based on testing at 30 June 2024 are set out as follows: Tranche Performance measure1 Number of rights on issue Performance measure outcome Award % of rights vested Number of rights vested A ROFE performance 948,045 25.1% 100% 100% 948,045 B Absolute TSR performance 1,132,487 102% 100% 100% 1,132,487 Total 2,080,532 100% 2,080,532 1. The FY2022 scheme is tested as at 30 June 2024 and vests on 1 July 2024. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 25 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY 5. Non-Executive Director arrangements 5.1 Overview The Board policy is to remunerate Non-Executive Directors at market rates for comparable companies for time, commitment and responsibilities. Remuneration comprises fixed fees with no incentive-based payments. The current aggregate fee pool for Directors of $850,000 was approved by shareholders at our 2022 Annual General Meeting. The company pays both superannuation and Committee fees to the Directors from this pool. On 28 April 2023, the Board approved a policy that non-executive directors may elect to receive either 10% or 20% of their fee by way of Company securities in lieu of cash. An election must be made by directors at least six 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. 5.2 Fees and Other benefits Fees/Benefits Description 2024 $ Board fees Board 105,000 Chair fees Board 75,000 Chair Audit and Risk Committee 10,000 Chair Remuneration, Nomination and People Committee 5,000 Committee Representation Audit and Risk Committee Chair – Julie Raffe (from November 2023) Members – Mick McMahon, Rhys Jones (from November 2023) Remuneration, Nomination and People Committee Chair – Melanie Laing (from November 2023) Members – Mick McMahon, Rhys Jones Sustainability Committee (Inaugural meeting held February 2024) Chair – Mick McMahon Members – Ejnar Knudsen, Melanie Laing Ridley Innovation and Operational Committee (ceased October 2023) Chair – Mick McMahon Members – Ejnar Knudsen, Melanie Laing Payment of Fess Prior to the start of the financial year, Directors can elect to receive either 10% or 20% of their Board and Committee fees as shares in lieu of cash, which are allocated twice a year following the release of the half and full year results. Superannuation Superannuation contributions are made on behalf of the Directors at a rate of 11% from 1 July 2023 being the current superannuation guarantee contribution rate, subject to a cap at the Maximum Contributions Base. Remuneration Report – Audited continued 26 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 6. Remuneration Governance 6.1 The role of the Remuneration, Nomination and People Committee (RNPC) The Remuneration, Nomination and People Committee supports the Board by overseeing Ridley’s people and remuneration related policies, frameworks and practices. Including its Chair, the RNPC has three members, all of whom are independent non-executive directors. In addition, there is a standing invitation to all Board members to attend the RNPC meetings. Management attend RNPC meetings by invitation, but a member of management will not be present when their own remuneration is under discussion. The Committee makes specific resolutions in its own right and makes recommendations to the Board on: • Remuneration strategy and framework, including equity plans for employees; • People policies, including diversity and inclusion, employee engagement, organisational culture, talent management, training and development, and succession planning for the Chief Executive Officer (CEO) and their direct reports; • Board performance and renewal; • Complying with legal and regulatory requirements across the jurisdictions in which the Group operates; and • Supporting the Group’s risk management framework. Executive remuneration and other terms of employment are reviewed annually by the Committee, having regard to performance against objectives and targets set at the start of the financial year, relevant comparative information and independent expert advice. 6.2 Executive and Director share ownership The Board considers that an important foundation of our Executive remuneration framework is that each Executive and Director accumulate and hold Ridley shares to align their interests as long-term investors. The table below sets out the number of shares held directly and indirectly by Directors and Executive KMP employed as at 30 June 2024: Non-Executive Directors/Executive KMP Balance at 1 July 2023 Acquired during the year1 Disposed during the year Holding at date of no longer being a KMP Balance at 30 June 2024 Non-Executive Directors M P McMahon 541,750 14,513 – – 556,263 P M Mann 99,044 – – 99,044 – R J van Barneveld 83,053 – – 83,053 – E Knudsen 703,286 – – – 703,286 R Jones 115,000 9,391 – – 124,391 J Raffe 25,906 9,053 – – 34,959 M Laing – 16,323 – – 16,323 Executive KMP Q L Hildebrand 1,351,699 1,437,134 – – 2,788,833 R Betts 91,227 5,635 – – 96,862 C Klem 202,492 261,556 – – 464,048 R Singh – 270,055 (90,018) – 180,037 S Clowes – – – – – K Clarke – – – – – 1. Includes any shares acquired by way of equity-based remuneration. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 27 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY 7. Statutory tables and disclosures 7.1 Executive service agreements The main terms of service agreements for executive KMP as at 30 June 2024 are set out in the table below. Basis of contract Conditions Notice period to be provided by Executive CEO: twelve months. Other executive KMP: ranges from three and six months Notice period to be provided by Ridley CEO: twelve months. Other executive KMP: ranges from three and six months. Termination benefits for cause Statutory entitlements only. Termination benefits for resignation Notice as above or payment in lieu of notice that is not worked; current year STIP forfeited; unvested equity lapses; statutory entitlements. STIP and/or LTIP benefits may be retained at the discretion of the Board Termination benefits for other than resignation or cause Notice as above or payment in lieu of notice that is not worked. Redundancy payments not in excess of 52 weeks. Remuneration Remuneration is reviewed annually or as required to maintain alignment with policy and benchmarks. 7.2 Executive KMP statutory remuneration Short-term benefits Post- Employment Cash Salary $ STIP $ Other1 $ Super- annuation $ Share Based Payments Expense $ Total $ Proportion of remuneration performance related (%) Current Executive KMP Q L Hildebrand 2024 745,000 – 1,070,343 27,500 1,091,772 2,934,615 37% 2023 722,500 637,500 49,212 27,500 594,621 2,031,333 61% R Betts 2024 539,000 – 2,958 27,500 290,985 860,443 34% 2023 498,512 305,250 44,200 25,292 216,928 1,090,182 48% C Klem 2024 372,300 – (10,284) 27,500 119,241 508,758 23% 2023 352,500 129,200 5,190 27,500 112,485 626,875 39% R Singh 2024 386,500 – 73,871 27,500 123,973 611,844 20% 2023 372,500 148,000 (2,621) 27,500 117,043 662,422 40% S Clowes 2024 343,300 – 2,787 27,500 39,423 413,009 10% 2023 100,243 – 2,699 10,526 – 113,468 –% K Clarke 2024 298,000 – 18,872 27,500 97,907 442,279 22% 2023 280,543 114,700 (4,171) 29,457 72,175 492,704 38% Total Current Executive KMP 2024 2,684,100 – 1,158,547 165,000 1,763,301 5,770,948 2023 2,326,798 1,334,650 94,509 147,775 1,113,252 5,016,984 Former Executive KMP H Slattery2 2023 176,012 – – 19,638 57,795 253,445 23% Total 2024 2,684,100 – 1,158,547 165,000 1,763,301 5,770,948 2023 2,502,810 1,334,650 94,509 167,413 1,171,047 5,270,429 1. Includes movement in leave provisions, grossed up fringe benefits, and allowances incurred through salary sacrifice. In addition, Mr Hildebrand received a payment of $1,000,000 as part of a Special Retention Plan (SRP) and Ms Clarke received $25,000 on the completion of the OMP acquisition. 2. KMP until 15 February 2023. Remuneration Report – Audited continued 28 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 7.3 Summary of awards held under Ridley’s Executive equity arrangements Grant date Rights granted Rights exercised Rights lapsed Rights balance at 30 June 2024 Fair value of Rights at Grant date ($) Current Executive KMP Q L Hildebrand1 FY24 Plan2 1 Jul 20233 669,648 – – 669,648 787,034 FY24 SRP2 1 Jul 20233 1,500,000 – – 1,500,000 1,890,000 FY23 Plan 1 Jul 20224 716,905 – – 716.905 690,759 FY22 Plan6 1 Jul 20215 1,045,173 – – 1,045,173 638,171 FY21 Plan 1 Jul 2020 1,566,108 (1,437,134) (128,974) – 663,531 R Betts FY24 Plan 1 Jul 20233 288,868 – – 288,868 363,974 FY23 Plan 1 Jul 20224 309,253 – – 309,253 324,716 FY22 Plan6 1 Jul 20215 483,036 – – 483,036 326,068 C Klem FY24 Plan 1 Jul 20233 119,749 – – 119,749 150,884 FY23 Plan 1 Jul 20224 128,199 – – 128,199 134,609 FY22 Plan6 1 Jul 20215 193,950 – – 193,950 130,916 FY21 Plan 1 Jul 20206 290,618 (261,556) (29,062) – 129,325 R Singh FY24 Plan 1 Jul 20233 126,663 – – 126,663 159,956 FY23 Plan 1 Jul 20224 134,947 – – 134,947 141,694 FY22 Plan6 1 Jul 20215 200,252 – – 200,252 135,170 FY21 Plan 1 Jul 20206 300,061 (270,055) (30,006) – 133,527 S Clowes FY24 Plan 1 Jul 20233 113,446 – – 113,446 142,942 K Clarke FY24 Plan 1 Jul 20233 99,587 – – 99,587 125,479 FY23 Plan 1 Jul 20224 104,584 – – 104,584 109,813 FY22 Plan6 1 Jul 20215 158,093 – – 158,093 106,713 1. Executive Director Long Term Incentive Plan holding split 41% Tranche A and 59% Tranche B. Other Executive KMP Long Term Incentive Plan holdings split equally between the two tranches A and B. 2. Rights granted comprised of 669,648 Long Term Incentive Plan rights and 1,500,000 Special Purpose Retention Rights granted, with holdings split equally between the two tranches A and B. 3. The Fair Value per Right at the grant date was $1.74 for Tranche A Rights before adjusting for the initial assessment of the likelihood of exceeding the ROFE performance hurdle and $0.78 for Tranche B Rights 4. 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 5. 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. 6. The FY22 Plan is tested as at 30 June 2024 and vests on 1 July 2024. Refer 4.3 for summary of the Long-Term Incentive Plan outcomes. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 29 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY 7. Statutory tables and disclosures continued 7.4 Non-Executive Director statutory remuneration Short-term Post- employment benefits Board and committee fees $ Non-monetary benefit1 $ Superannuation contributions $ Total $ Current Directors M P McMahon, Chairman 2024 129,910 32,455 17,863 180,227 2023 163,864 – 17,206 181,070 R Jones 2024 84,000 21,000 – 105,000 2023 96,275 – – 96,275 E Knudsen 2024 105,000 – – 105,000 2023 96,275 – – 96,275 M Laing 2024 73,907 9,459 6,070 89,436 2023 – – – – J Raffe 2024 81,492 20,262 11,205 112,960 2023 76,430 – 8,025 84,455 Total Current Directors 2024 474,309 83,177 35,138 592,623 2023 432,844 – 25,231 458,075 Former Directors P M Mann2 2024 39,715 – 4,369 44,083 2023 96,514 – 10,134 106,648 R J van Barneveld3 2024 47,019 – – 47,019 2023 103,925 – – 103,925 D J Lord4 2023 35,810 – 3,760 39,570 Total 2024 561,043 83,117 39,506 683,725 2023 669,093 – 39,125 708,218 1. Represents the value of Board and Committee fees taken as shares in lieu of cash. 2. Director until 20 November 2023. 3. Director until 20 November 2023. 4. Director until 24 November 2022. Remuneration Report – Audited continued 30 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 21 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 2024 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 21 August 2024 PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01 Auditor’s Independence Declaration RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 31 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY Consolidated Statement of Profit or Loss and Other Comprehensive Income For The Year Ended 30 June 2024 Note 2024 $’000 2023 $’000 Revenue 1 1,262,897 1,260,133 Cost of sales (1,146,961) (1,148,775) Gross profit 115,936 111,358 Other income 441 328 Selling and distribution expenses (15,163) (13,669) General and administrative expenses (37,330) (34,295) Operating profit 63,884 63,722 Finance income 9(c) 785 397 Finance costs 9(c) (8,608) (5,484) Net finance costs 9(c) (7,823) (5,087) Profit before income tax expense 56,061 58,635 Income tax expense 8(b) (16,208) (16,810) Profit after income tax 39,853 41,825 Other comprehensive income Items that are or may be reclassified subsequently to profit or loss Net gain on cash flow hedges, net of tax 249 – Other comprehensive income for the year, net of tax 249 – Total comprehensive income for the year 40,102 41,825 Total comprehensive income for the year attributable to: Ridley Corporation Limited 40,102 41,825 Earnings per share cents cents Basic earnings per share 2 12.6c 13.1c Diluted earnings per share 2 12.2c 12.7c The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes. 32 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Consolidated Balance Sheet As at 30 June 2024 Note 2024 $’000 2023 $’000 Current assets Cash and cash equivalents 9 34,196 43,023 Trade and other receivables 3 134,995 132,952 Inventories 3 105,338 107,049 Tax asset – 705 Derivative financial instruments 11(f) 414 58 Total current assets 274,943 283,787 Non current assets Property, plant and equipment 4 281,637 258,617 Intangible assets 5 107,626 73,988 Deferred tax asset 8 – 1,309 Other receivables 175 – Total non-current assets 389,438 333,914 Total assets 664,381 617,701 Current liabilities Trade and other payables 3 220,406 205,189 Interest bearing liabilities 9 5,092 4,160 Provisions 17 14,635 15,636 Tax liabilities 4,973 – Total current liabilities 245,106 224,985 Non-current liabilities Interest bearing liabilities 9 93,202 77,005 Deferred tax liabilities 8(d) 2,578 – Provisions 17 376 325 Total non current liabilities 96,156 77,330 Total liabilities 341,262 302,315 Net assets 323,119 315,386 Equity Share capital 10 218,090 218,090 Reserves (462) (1,889) Retained earnings 105,491 99,185 Total equity 323,119 315,386 The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 33 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY Consolidated Statement of Changes in Equity For The Year Ended 30 June 2024 2024 Share Capital $’000 Share Based Payments Reserve $’000 Treasury Shares Reserve $’000 Cash Flow Hedge Reserve $’000 Retained Earnings $’000 Total $’000 Opening balance at 1 July 2023 218,090 4,227 (6,115) – 99,185 315,386 Profit for the year – – – – 39,853 39,853 Other Comprehensive (Loss) / Income – – – 249 – 249 Total Comprehensive (Loss) / Income for the year – – – 249 39,853 40,102 Transactions with owners recognised directly in equity: Dividends paid / declared – 245 – – (27,320) (27,075) Shares purchased on market1 – – (7,905) – – (7,905) Shares released for LTIP2 – – 9,000 – (9,000) – Transfer to Retained Earnings – (2,773) – – 2,773 – Share based payment transactions – 2,610 – – – 2,610 Total transactions with owners recognised directly in equity – 82 1,095 – (33,547) (32,370) Balance at 30 June 2024 218,090 4,309 (5,020) 249 105,491 323,119 1. During FY24, the Group purchased its own shares on-market at a value of $7.9m for the purpose of allocating these shares to eligible employees as a part of the Group’s Long-Term Incentive Plan. 2. During FY24, the Group awarded $9.0m value for the FY21 LTIP to eligible employees. 2023 Share Capital $’000 Share Based Payments Reserve $’000 Treasury Shares Reserve $’000 Cash Flow Hedge Reserve $’000 Retained Earnings $’000 Total $’000 Balance at 1 July 2022 225,114 3,146 – – 87,770 316,030 Profit after income tax expense – – – – 41,825 41,825 Other Comprehensive (Loss) / Income – – – – – – Total Comprehensive (Loss) / Income for the year – – – – 41,825 41,825 Transactions with owners recognised directly in equity: – Dividends paid / declared – 261 – – (25,500) (25,239) Treasury share buyback – – (20,314) – – (20,314) Treasury shares cancelled (7,024) – 7,024 – – – Shares released for LTIP – – 7,175 – (7,175) – Transfer to Retained Earnings – (2,264) – – 2,264 – Share based payment transactions – 3,084 – – – 3,084 Total transactions with owners recognised directly in equity (7,024) 1,081 (6,115) – (30,410) (42,468) Balance at 30 June 2023 218,090 4,227 (6,115) – 99,185 315,386 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. 34 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Consolidated Statement of Cash Flows For the Year Ended 30 June 2024 Note 2024 $’000 2023 $’000 Cash flows from operating activities Receipts from customers 1,392,762 1,393,158 Payments to suppliers and employees (1,269,868) (1,287,732) Other income received 441 206 Interest paid (7,970) (4,983) Interest received 785 397 Income taxes paid (11,094) (21,965) Net cash from operating activities 105,056 79,081 Cash flows from investing activities Payments for property, plant and equipment (30,867) (34,270) Payments for intangibles (2,254) (500) Payments for purchase of business (53,048) – Net cash from / (used in) investing activities (86,169) (34,770) Cash flows from financing activities LTIP share purchase (7,905) (13,291) Share buyback – (7,023) Proceeds from loans and borrowings 95,000 42,500 Repayment of borrowings (82,500) (20,294) Dividends paid 10(c) (27,074) (25,239) Payment of lease liabilities (5,235) (5,019) Net cash used in financing activities (27,714) (28,366) Net movement in cash held (8,827) 15,945 Cash at the beginning of the financial year 43,023 27,078 Cash at the end of the financial year 9(a) 34,196 43,023 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 35 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY Index of Notes To and Forming Part of the Financial Report Section A. Financial performance 1. Segment report 2. Earnings per share (EPS) Section B. Operating assets and liabilities 3. Working capital 4. Property, plant and equipment 5. Intangible assets 6. Impairment testing of assets 7. Leases Section C. Taxation 8. Taxation Section D. Capital management 9. Net debt and financing costs 10. Contributed equity and reserves Section E. Managing financial risks 11. Financial risk management Section F. Group structure 12. Investments in controlled entities 13. Businesses acquired 14. Parent company disclosure – Ridley Corporation Limited 15. Deed of cross guarantee 16. Related party disclosures Section G. Remunerating our people 17. Employee benefits expenses and provisions 18. Key management personnel 19. Share based payments 20. Retirement benefit obligations Section H. Other disclosures 21. Contingent liabilities 22. Events subsequent to balance sheet date 23. Auditor’s remuneration 36 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Notes to the Financial Statements For the Year Ended 30 June 2024 Overview Ridley Corporation Limited (the Company) is a company limited by shares, incorporated and domiciled in Australia. The address of the Company’s registered office is Level 9, South Tower Rialto, 525 Collins Street, Melbourne VIC 3000. The nature of the operations and principal activities of the Company are described in the segment information in Note 1. On 21 August 2024, the Directors resolved to authorise the issue of these consolidated general purpose financial statements for the year ended 30 June 2024. Basis of preparation This is a general-purpose Financial Report which has been prepared by a for‑profit entity in accordance with Australian Accounting Standards adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001 and complies with the International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board. The financial statements are presented in Australian dollars with all amounts rounded off, except where otherwise stated, to the nearest thousand dollars, in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 dated 24 March 2016. Ridley’s Directors have included information in this report that they deem to be material and relevant to the understanding of the consolidated financial statements. Where appropriate, comparative information has been reclassified to conform to changes in presentation and to enhance comparability. Disclosure may be considered material and relevant if the dollar amount is significant due to size or nature, or the information is important to understand the: • Group’s current year results • impact of significant changes in Ridley’s business • aspects of the Group’s operations that are important to future performance. Functional and presentation currency The Company’s functional and presentation currency is Australian dollars. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Transactions and Balances Transaction in currencies other than the functional currency of the Company or entity concerned are recorded using the exchange rate on the date of the transaction. 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. Consolidation of Group entities 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. Judgements and estimates In preparing these consolidated financial statements, management has made judgements and estimates about the future, including climate-related risks and opportunities, that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The areas involving a higher degree of judgement or complexity are set out in more detail in Note 4 – Property, plant and equipment, Note 6 – Impairment testing of assets and Note 13 – Business combinations – provisional. DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 37 Basis of preparation continued Changes in accounting policies The Group has applied for the first-time certain standards and amendments which are effective for annual reporting periods on or after 1 July 2023, including those set out below. Amendments to AASB 101: Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements – Disclosure of Accounting Policies The amendments change the requirements in AASB 101 with regard to disclosure of accounting policies. The amendments replace all instances of the term ‘significant accounting policies’ with ‘material accounting policy information’. Accounting policy information is material if, when considered together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. The supporting paragraphs in AASB 101 are also amended to clarify that accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed. Accounting policy information may be material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is itself material. AASB 2023-2: International Tax Reform – Pillar Two Model Rules AASB 2023-2 amends AASB 112 Income Taxes to introduce a mandatory temporary exemption to accounting for deferred taxes arising from the implementation of the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (OECD); and targeted disclosure requirements to help financial statement users better understand an entity’s exposure to income taxes arising from the reform, particularly before legislation implementing the rules is in effect. Accounting standards issued but not yet operative The AASB has issued several new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods, some of which are relevant to the Group. The Group’s assessment of the new and amended pronouncements that are relevant to the Group but applicable in future reporting periods is set out below. The Group does not expect adoption of the following standards to have a material impact on the financial statements. Amendments to AASB 101: Classification of Liabilities as Current or Non-current The amendments are applicable for annual reporting periods beginning on or after 1 January 2024, and are applied retrospectively. This amendment will only affect the presentation of liabilities as current or non-current in the statement of financial position. The reported profit or loss and financial position is not expected to change on adoption of this amendment as it does not result in any changes to the Group’s existing accounting policies. AASB 18: Presentation and Disclosure in Financial Statements The AASB has issued a new standard, AASB 18, which aims to provide greater consistency in presentation of income and cash flow statements, and more disaggregated information. The standard will change the way companies present their results on the face of the income statement and disclose information in the notes to the financial statements. Certain ‘non-GAAP’ measures – management performance measures (MPMs) will now form part of the audited financial statements. There will be three new categories of income and expenses, two defined income statement subtotals and one single note on management-defined performance measures. This new standard will be applicable for annual reporting periods beginning on or after 1 January 2027, and will be applied retrospectively. The Group has not early adopted any standard, interpretation or amendment that has been issued but not yet effective. New sustainability reporting standards The Australian sustainability reporting standards (ASRS) are still being finalised, however disclosures are expected to be closely aligned with the ISSB Standards, with Australian equivalents to be set by the AASB considering Australian-specific requirements. Based on the current proposals, the climate related disclosure requirements are expected to first apply to the Group for the financial year ended 30 June 2026. Notes to the Financial Statements continued 38 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Section A. Financial performance A key element of Ridley’s strategy is to create sustainable shareholder value. This section highlights the results and performance of the Group for the year ended 30 June 2024. 1. Segment report (a) Identification and description of segments Ridley’s reportable segments are based on internal reporting to the Group’s Chief Operating Decision Maker (the Group’s Managing Director and Chief Executive Officer). The CEO monitors results by reviewing the reportable segments on a product perspective as outlined in the table below. Reportable segment Products / services Countries of operation Packaged Feeds and Ingredients Manufacture and supply premium quality, high performance animal nutrition feed and ingredient solutions delivered in packaged form ranging from 1 tonne bulka bag down to 3kg bags. Australia New Zealand Thailand Bulk Stockfeeds Manufacture and supply premium quality, high performance animal nutrition stockfeed solutions delivered in bulk. Australia (b) Reportable segments 2024 financial year in $’000 Bulk Stockfeeds Packaged / Ingredients Corporate Consolidated Revenue 886,588 376,309 – 1,262,897 Earnings before significant items, interest, tax depreciation and amortisation 44,373 59,730 (11,319) 92,784 Depreciation and amortisation (16,257) (9,859) (12) (26,128) Finance costs (Note 9(c)) – – (7,823) (7,823) Reportable segment profit/(loss) before income tax and individually significant items 28,116 49,871 (19,154) 58,833 Individually significant items – – (2,772) (2,772) Reportable segment profit/(loss) before income tax 28,116 49,871 (21,926) 56,061 Total segment assets 316,814 290,934 56,633 664,831 Segment liabilities (189,932) (55,187) (96,143) (341,262) Acquisition of assets1 26,901 56,093 – 82,994 1. Acquisitions include property, plant and equipment, right of use assets, intangibles and assets associated with the acquisition of OMP. 2023 financial year in $’000 Bulk Stockfeeds Packaged / Ingredients Corporate Consolidated Revenue 869,958 390,175 – 1,260,133 Earnings before significant items, interest, tax depreciation and amortisation 36,013 65,794 (13,304) 88,503 Depreciation and amortisation (15,428) (9,336) (17) (24,781) Finance costs (Note 9(c)) – – (5,087) (5,087) Reportable segment profit/(loss) before income tax and individually significant items 20,584 56,458 (18,408) 58,635 Individually significant items – – – – Reportable segment profit/(loss) before income tax 20,584 56,458 (18,408) 58,635 Total segment assets 299,809 250,642 67,250 617,701 Segment liabilities (171,296) (55,668) (75,351) (302,315) Acquisition of assets1 20,855 14,649 4 35,509 1. Acquisitions include property, plant and equipment and intangibles. DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 39 1. Segment report continued (c) Individually significant items 2024 2023 Gross $’000 Tax $’000 Net $’000 Gross $’000 Tax $’000 Net $’000 Profit after income tax includes the following individually significant items of expense: Acquisition transaction costs1 (2,402) 218 (2,184) – – – Land management costs2 (370) 111 (259) – – – Total (2,772) 329 (2,432) – – – 1. Transaction costs associated with the acquisition of Oceania Meat Processors (OMP). 2. The Group incurred additional costs in FY24 associated with the FY21 sale of Moolap land, the net gain was reported as an individually significant item. (d) Geographical segments The presentation of geographical revenue is based on the geographical location of customers. Segment non-current assets are based on the geographical location of the assets. Revenue Non-current assets 2024 $’000 2023 $’000 2024 $’000 2023 $’000 Australia 1,242,070 1,255,945 258,407 234,581 United States 13,837 – – – New Zealand 1,238 – 1,376 – Thailand – – 21,854 24,036 Other1 5,752 4,188 – – Total 1,262,897 1,260,133 281,637 258,617 1. FY24 includes New Caledonia ($2.1m), Japan ($1.3m), Tahiti ($1.1m), Mexico ($0.8m) and other countries ($0.5m). (e) Major customers The Group conducts business with two customers (2023: two) where the revenue generated from each customer exceeds 10% of the Group’s revenue. Revenue from these two customers was: 2024 $’000 2023 $’000 Customer A 200,674 198,706 Customer B 175,956 139,239 Total 376,630 337,945 Revenue recognition and measurement For the sale of product, the Group generally has one performance obligation. Consequently, revenue is currently recognised when the product 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 product 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. Notes to the Financial Statements continued 40 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 2. Earnings per share (EPS) (i) As reported in the income statement 2024 $’000 2023 $’000 Earnings used in the calculation of basic and diluted EPS: Profit after income tax expense 39,853 41,825 Individually significant items after income tax expense 2,432 – Profit after income tax expense before individually significant items 42,285 41,825 Weighted average number of ordinary shares for basic EPS 315,832,713 315,832,713 Dilution due to share options and rights 10,334,342 14,324,519 Weighted average number of ordinary shares for diluted EPS 326,167,055 330,157,232 Earnings per share Basic earnings per share 12.6 13.1 Diluted earnings per share 12.2 12.7 Basic earnings per share, before significant items 13.4 13.1 Diluted earnings per share, before significant items 13.0 12.7 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 FY24. 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. DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 41 Section B. Operating assets and liabilities This section highlights the primary operating assets used and liabilities incurred to support the Group’s operating activities. Liabilities relating to the Group’s financing activities are disclosed in Section D, whilst information pertaining to deferred tax assets and liabilities is provided in Section C. 3. Working capital Working capital includes current receivables, inventories and payables that arise from normal trading conditions. 2024 $’000 2023 $’000 Trade and other receivables 134,995 132,952 Inventories 105,338 107,049 Trade and other payables (220,406) (205,188) Working capital 19,927 34,813 3.1 Trade and other receivables 2024 $’000 2023 $’000 Current Trade debtors 132,170 122,154 Less:Allowance for impairment loss on trade receivables (a) (92) (226) 132,078 121,928 Prepayments and other receivables 2,917 11,024 134,995 132,952 Recognition and measurement 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 Financial Instruments, the Group adopts a forward-looking credit loss (ECL) approach, whereby the Group records an allowance for ECLs for all loans and other debt financial assets, including Trade and other receivables. For Trade and other receivables, the Group applies the standard’s simplified approach and calculated ECLs based on lifetime expected credit losses. The Group has established a provision matrix that is based on the Group’s historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. A provision has been recognised, determined with reference to forward looking ECL. (a) Movement in the allowance for impairment loss: 2024 $’000 2023 $’000 Balance brought forward at 1 July 226 144 Provision raised / (reversed) during the year (72) 211 Receivables written off during the year (62) (129) Balance carried forward at 30 June 92 226 As at 30 June 2024, a provision for impairment loss of $92 thousand (2023: $226 thousand) 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. Notes to the Financial Statements continued 42 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Concentration of risk Within the Trade Debtors ledger at 30 June 2024, the top 5 customer balances represent 36% (2023: 40%) of the total, and the top 20 represent 61% (2023: 63%). Ageing Analysis At 30 June 2024, the age profile of trade receivables that were past due amounted to $8.0m (2023: $5.7m) as shown in the following table. The ageing analysis of trade receivables is shown as follows: 2024 $’000 2023 $’000 Past due by 1-30 days 6,278 4,316 Past due by 31-60 days 1,130 534 Past due by 61-90 days 179 638 Past due by greater than 90 days 394 379 7,981 5,868 3.2 Inventories 2024 $’000 2023 $’000 Raw materials – at cost 53,354 59,838 Finished goods – at cost 42,084 41,483 – at net realisable value 9,900 5,727 105,338 107,049 Recognition and measurement Inventory included in cost of goods sold equals $1,147m for FY24 (FY23 $1,148m). Included in this number are write-downs of inventories to net realisable value of $0.6m (2023: $0.9m). Inventories are measured at the lower of cost and net realisable value. Cost is based on a 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. 3.3 Trade and other payables 2024 $’000 2023 $’000 Current Trade creditors and accruals 155,408 159,539 Other financial liability – trade payables facility 64,998 45,650 220,406 205,189 Recognition and measurement Trade creditors and accruals are recognised when the Group is required to make future payments as a result of the purchase of goods or as services provided prior to the end of the reporting period. The carrying amount of trade payables approximates their fair values due to their short‑term nature. Trade Payables Facility 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 $65,000,000 (2023: $50,000,000). The amount utilised and recorded within trade creditors at 30 June 2024 was $64,998,551 (2023: $45,650,084). DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 43 4. Property, plant and equipment 2024 ($’000) Land and Buildings Plant and Equipment Capital work in progress Right of use assets Total Cost at 1 July 2023 89,504 337,287 44,077 27,444 498,312 Accumulated depreciation (17,545) (203,312) – (18,839) (239,695) Carrying amount at 1 July 2023 71,959 133,975 44,077 8,606 258,617 Additions – – 30,867 6,595 37,462 Acquisitions through business combinations 3,316 3,945 – 2,647 9,908 Transfers 5,107 36,329 (41,436) – – Other lease movements – – – 200 200 Disposals – – – – – Depreciation (2,347) (17,406) – (4,795) (24,548) Carrying amount at 30 June 2024 78,035 156,843 33,508 13,252 281,638 At 30 June 2024 Cost 97,927 377,561 33,508 36,886 545,882 Accumulated depreciation (19,892) (220,718) – (23,634) (264,244) Carrying amount at 30 June 2024 78,035 156,843 33,508 13,252 281,638 2023 ($’000) Land and Buildings Plant and Equipment Capital work in progress Right of use assets Total Cost at 1 July 2022 85,804 319,617 31,177 25,968 462,566 Accumulated depreciation (15,424) (185,988) – (14,251) (215,663) Carrying amount at 1 July 2022 70,380 133,629 31,177 11,717 246,902 Additions – – 34,451 1,476 35,927 Transfers 3,703 17,849 (21,551) – – Other lease movements – – – – – Disposals (3) (178) – – (181) Depreciation (2,121) (17,324) – (4,588) (24,032) Carrying amount at 30 June 2023 71,959 133,975 44,077 8,606 258,617 At 30 June 2023 Cost 89,504 337,287 44,077 27,444 498,312 Accumulated depreciation (17,545) (203,312) – (18,839) (239,695) Carrying amount at 30 June 2023 71,959 133,975 44,077 8,606 258,617 Capital expenditure commitments Capital expenditure on property, plant and equipment at cost less accumulated depreciation for but not provided for and payable no later than one year was $13.7m (2023: $18.0m). Recognition and measurement Property, plant and equipment is measured at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the asset. Subsequent costs are capitalised only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Capital work in progress are assets under construction and therefore not yet depreciated. The cost of construction for includes the cost of materials used in construction, direct labour on the project, and an allocation of overheads. The right of use asset at initial recognition reflects the lease liability adjusted for any lease payments made before the commencement date plus and make good obligations and initial direct costs incurred. Judgements and estimates Management reviews the appropriateness of useful lives at least annually, any changes to useful lives may affect prospective deprecation rates and asset carrying values. Depreciation is recorded on a straight-line basis using the following useful lives, being 13-40 years for buildings and 2-30 years for plant and equipment. Notes to the Financial Statements continued 44 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 5. Intangible assets 2024 ($’000) Software Customer Relation- ships Goodwill Contracts Assets under development Total Cost at 1 July 2023 18,627 – 69,904 2,685 5,000 96,216 Accumulated amortisation and impairment (17,784) – (953) (2,505) (987) (22,228) Carrying amount at 30 June 2024 843 – 68,951 180 4,013 73,988 Additions 1,871 – – – 383 2,254 Acquisitions through business combinations – 15,197 17,947 – – 33,144 Disposals – – – – – – Amortisation charge (1,007) (332) – (180) (240) (1,759) Carrying amount at 30 June 2024 1,707 14,865 86,898 – 4,156 107,626 At 30 June 2024 Cost 20,498 15,197 87,851 2,685 5,383 131,614 Accumulated amortisation and impairment (18,791) (332) (953) (2,685) (1,227) (23,988) Carrying amount at 30 June 2024 1,707 14,865 86,898 – 4,156 107,626 2023 ($’000) Software Customer Relation- ships Goodwill Contracts Assets under development Total Cost at 1 July 2022 18,093 – 69,904 2,685 4,997 95,678 Accumulated amortisation and impairment (17,275) – (953) (1,733) (746) (20,706) Carrying amount at 30 June 2022 818 – 68,951 952 4,251 74,972 Additions 534 – – – 3 537 Disposals – – – – – – Amortisation charge (509) – – (772) (240) (1,521) Carrying amount at 30 June 2023 843 – 68,951 180 4,013 73,988 At 30 June 2023 Cost 18,627 – 69,904 2,685 5,000 96,216 Accumulated amortisation and impairment (17,784) – (953) (2,505) (987) (22,228) Carrying amount at 30 June 2023 843 – 68,951 180 4,013 73,988 Recognition and measurement 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. Goodwill Where the fair value of the consideration paid for a business acquisition exceeds the fair value of the identifiable assets, liabilities and contingent liabilities acquired, the difference is treated as goodwill. Goodwill is not amortised but the recoverable amount is tested for impairment at least annually. DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 45 5. Intangible assets continued Recognition and measurement continued The Group has two reporting segments namely Packaged and Ingredients and Bulk Stockfeed. The Cash Generating Unit (CGU) or group of CGUs that makes up the “Packaged and Ingredients” reportable segments are Ingredients Recovery, Extrusion and Aqua Nutrition and Supplements. For the purposes of impairment testing, goodwill has been allocated to the Group’s CGUs/operating segments as follows: 2024 $’000 2023 $’000 Packaged and Ingredients: Ingredients Recovery 74,564 56,616 Bulk Stockfeed 12,334 12,334 Total 86,898 68,950 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. Assets under development Assets under development as at 30 June 2024 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. 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. Notes to the Financial Statements continued 46 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 6. Impairment testing of assets Recognition and measurement Methodology Formal impairment tests are carried out annually for goodwill. In addition, formal impairment tests for all assets are performed when there is an indication of impairment. The Group conducts an internal review of asset values at each reporting period, which is used as a source of information to assess for any indications of impairment. External factors, such as changes in expected future prices, costs and other market factors, are also monitored to assess for indications of impairment. If any such indication exists, an estimate of the asset’s recoverable amount is calculated. The recoverable amount is determined using the higher of value in use or fair value less costs to dispose. Value in use is the present value of the estimated future cash flows expected to arise from the continued use of the asset in its present form and its eventual disposal. Value in use is determined by applying assumptions specific to the Group’s continued use and does not consider future development. The value in use calculations use cash flow projections which do not exceed five years based on actual operating results and the operating budgets approved by the Board of Directors. Growth rates are specific to individual cash‑generating units (CGUs) and reflect expected future market and economic conditions. Fair value less costs to dispose is the value that would be received in exchange for an asset in an orderly transaction. The discount rates applied to the post‑tax cash flows are derived using the weighted average cost of capital methodology. Adjustments to the rates are made for any risks that are not reflected in the underlying cash flows. The terminal growth rate was determined based on management’s estimate of the long‑term compound annual EBIT growth rate. In testing for indications of impairment and performing impairment calculations, assets are considered as collective groups and referred to as CGUs. CGUs are the smallest identifiable group of assets, liabilities and associated goodwill that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets with each CGU being no larger than a segment. CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. The test of goodwill and its impairment is undertaken at the operating segment level. Key assumptions The key assumptions for Packaged and Ingredients: Ingredient Recovery (Group of CGUs) and Bulk Stockfeed used in the estimation of value in use were as follows: Goodwill Allocation $’000 Post-tax discount rate (%) Terminal growth rate (%) 2024 Packaged and Ingredients: Ingredient Recovery 74,564 8.0 2.0 Bulk Stockfeed 12,334 8.0 2.0 2023 Packaged and Ingredients: Ingredient Recovery 56,616 8.0 2.0 Bulk Stockfeed 12,334 8.0 2.0 Increases in discount rates or changes in other key assumptions such as operating conditions or financial performance, may cause the recoverable amount to fall below the carrying values. Based on current economic conditions and CGU/Group of CGUs performance, there are no reasonably possible changes to key assumptions used in the determination of CGU/Group of CGUs recoverable amounts that would result in an impairment. Impairments during the year There have been no impairments raised in the 2024 financial year. DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 47 7. Leases While the majority of the Group’s operations are conducted on sites owned by the group, the Group leases certain sites and warehouses on long term lease periods of up to ten years in duration, preferably with options for Ridley to renew in order to provide operational flexibility. Each lease is negotiated in the context of market conditions and unique terms and conditions as offered by the individual lessor. The Group leases motor vehicles and certain items of mobile plant under a number of different lease arrangements with external fleet management entities. The Group leases certain IT equipment with contract terms of up to three years. Respectively, these leases are considered to be short term and for low value individual items. (a) Right-of-use assets 2024 ($’000) Property Motor vehicles Plant Total At 30 June 2024 Carrying amount 11,056 3,280 3,711 18,047 Accumulated depreciation (2,562) (1,101) (1,132) (4,795) Net carrying amount 8,494 2,179 2,579 13,252 Movement Carrying amount at the beginning of the year 5,570 1,124 1,911 8,605 Additions 3,296 1,887 1,412 6,595 Acquisitions through business combinations 2,190 110 347 2,647 Execution of extension option – 159 41 200 Depreciation (2,562) (1,101) (1,132) (4,795) Balance as at 30 June 2024 8,494 2,179 2,579 13,252 2023 ($’000) Property Motor vehicles Plant Total At 30 June 2023 Carrying amount 8,071 2,080 3,042 13,193 Accumulated depreciation (2,502) (955) (1,131) (4,588) Net carrying amount 5,570 1,124 1,911 8,605 Movement Carrying amount at the beginning of the year 7,839 968 2,910 11,717 Additions – 947 132 1,079 Execution of extension option 232 165 – 397 Depreciation (2,502) (955) (1,131) (4,588) Balance as at 30 June 2023 5,570 1,124 1,911 8,605 (b) Lease liabilities 2024 ($’000) Property Motor vehicles Plant Total Balance as at 1 July 2023 (5,889) (925) (1,852) (8,666) Additions to lease liability (3,296) (1,887) (1,412) (6,595) Acquisition through business combinations (2,190) (110) (347) (2,647) Execution of extension option – (159) (41) (200) Accretion of interest (237) (74) (111) (423) Payments 2,943 1,098 1,195 5,236 Balance as at 30 June 2024 (8,669) (2,057) (2,568) (13,294) Current 2,951 1,078 1,063 5,092 Non-current 5,718 979 1,505 8,202 Total 8,669 2,057 2,568 13,294 Notes to the Financial Statements continued 48 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 2023 ($’000) Property Motor vehicles Plant Total Balance as at 1 July 2022 (8,196) (773) (2,846) (11,815) Additions to lease liability – (947) (132) (1,079) Execution of extension option (225) (165) – (390) Accretion of interest (255) (43) (94) (391) Payments 2,787 1,002 1,220 5,009 Balance as at 30 June 2023 (5,889) (925) (1,852) (8,666) Current 2,779 602 779 4,160 Non-current 3,109 323 1,073 4,506 Total 5,889 925 1,852 8,666 Extension options 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. Amounts recognised in profit or loss and statement of cash flows The financial impact of lease accounting on profit or loss was $5.2m (2023: $5.0m), comprising interest and amortisation (Refer Note 4 and Note 9 (c)). The total cash outflows for leases in the year was $7.9m (2023: $5.0m). Recognition and measurement The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease assets Lease assets are recognised at the commencement date of the lease (i.e. the date the underlying asset is available for use). Lease assets are initially measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of lease assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Lease assets are depreciated on a straight-line basis over the lease term. Lease assets are also subject to impairment, assessed in accordance with the Group’s impairment policy. Lease liabilities Lease liabilities are recognised by the Group at the commencement date of the lease. Lease liabilities are measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group. Variable lease payments are recognised as expenses in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date where the interest rate implicit in the lease is not readily determinable. After the commencement date, the lease liability is increased to reflect the recognition of interest and reduced for lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment to purchase the underlying asset. Short term leases and leases of low value 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. DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 49 Section C. Taxation This section outlines the taxes paid by Ridley and the impact tax has on the financial statements. 8. Income tax expense (a) Income tax expense 2024 $’000 2023 $’000 Current tax 12,328 9,891 Deferred tax 3,889 6,846 Under provided in prior year (8) 73 Total income tax expense in income statement 16,208 16,810 (b) Reconciliation of income tax expense and pre-tax net profit 2024 $’000 2023 $’000 Profit before income tax expense 56,061 58,635 Income tax expense using the Group’s tax rate of 30% 16,818 17,592 Tax effect of items which (decrease)/increase tax expense: Non-deductible expenses 214 (9) Under provision in prior year (8) 73 Research and development allowance (809) (840) Other (7) (6) Income tax expense 16,208 16,810 (c) Income tax recognised in equity 2024 2023 Gross $’000 Tax $’000 Net $’000 Gross $’000 Tax $’000 Net $’000 Cash flow hedges Effective portion of changes in fair value 356 (107) 249 – – – Total recognised in equity 356 (107) 249 – – – Notes to the Financial Statements continued 50 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 (d) Recognised deferred tax assets and liabilities Balance Sheet Income Statement 2024 $’000 2023 $’000 2024 $’000 2023 $’000 Deferred tax assets Intangibles 381 946 (565) (631) Doubtful debts 15 34 (19) (9) Property, plant and equipment 1,552 1,422 129 (401) Provision for employee entitlements 4,465 4,788 (323) 70 Provisions 400 1,302 (902) 594 Total 6,813 8,492 (1,680) (377) Deferred tax liabilities Intangibles (4,773) (314) (4,459) – Doubtful debts 12 (156) 168 (144) Property, plant and equipment (4,092) (5,811) 1,719 (5,811) Other (538) (902) 363 (514) Total (9,391) (7,183) (2,209) (6,469) Net (2,578) 1,309 (3,889) (6,846) Recognition and measurement Income tax on the profit or loss for the year comprises current and deferred tax and is recognised in the income statement. Current tax expense is the expected tax payable on the taxable income for the year using tax rates applicable at the reporting date, and any adjustments to tax payable in respect of previous years. Deferred tax balances are determined by calculating temporary differences based on the carrying amounts of assets and liabilities for financial reporting purposes and their amounts for taxation purposes. Where amounts are recognised directly in equity the corresponding tax impact is also recognised directly in equity. The amount of deferred tax recognised is based on the expected manner of realisation of the asset or settlement of the liability, using tax rates enacted or substantively enacted at reporting date. A deferred tax asset will be recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets will be reduced to the extent it is no longer probable that the related tax benefit will be realised. Tax consolidation Ridley Corporation Limited is the parent entity in the tax consolidated group comprising all wholly‑owned Australian entities. Due to the existence of a tax sharing agreement between the entities in the tax consolidated group, the parent entity recognises the tax effects of its own transactions and the current tax liabilities and the deferred tax assets arising from unused tax losses and unused tax credits assumed from the subsidiary entities. DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 51 Section D. Capital management This section details specifics of the Group’s capital structure. When managing capital, management’s objective is to ensure that the Group continues as a going concern as well as to provide optimal returns to shareholders and other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the Group. 9. Net Debt and net financing costs 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 (gross debt / gross debt plus equity) for bank covenant requirements. The gearing ratios as at 30 June are as follows: 2024 $’000 2023 $’000 The gearing ratio is calculated as follows: Interest bearing liabilities excluding lease liabilities 85,000 72,500 Total equity 323,119 315,386 Total interest bearing liabilities excluding lease liabilities and equity 408,119 387.886 Gearing ratio (%) 20.8% 18.7% (a) Cash and cash equivalents Cash and cash equivalents comprise cash balances in Australian dollars and foreign currencies. 2024 $’000 2023 $’000 Cash at bank 34,196 43,023 (b) Interest bearing liabilities 2024 $’000 2023 $’000 Current Lease liabilities 5,092 4,160 Non-current Bank loans (unsecured) 85,000 72,500 Lease liabilities 8,202 4,505 93,202 77,005 98,294 81,165 Notes to the Financial Statements continued 52 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Total loan facilities available to the Group 2024 2023 All in AUD$’000 Limits Utilised Limits Utilised Long Term Loan facility (a) 150,000 55,000 100,000 42,500 Trade receivables facility (b) 30,000 30,000 30,000 30,000 180,000 85,000 130,000 72,500 (a) Long-Term Loan Facility In March 2024, the Group increased its Long-Term Loan Facility (Facility) with ANZ and Westpac from $100m to $150m in order to fund the OMP acquisition. The Facility term expiry date is August 2026 and the available funding facility continues to be split equally between the two financiers. The Facility comprises unsecured bank loans with floating interest rates subject to bank covenant arrangements in respect of a Leverage Cover Ratio, Interest Cover Ratio, Gearing Ratio and Consolidated Net Worth. The Group is in compliance with all Facility covenants and reports as such to the two financiers on a six-monthly basis coinciding with the release of the half year and full year financial reports. (b) Trade Receivables Facility The Group operates a fully drawn $30m Trade Receivables Facility with Cooperative Rabobank U.A. Australia Branch (Rabobank). In addition to adopting the same bank covenants calculation and reporting arrangements as prevailing under the Facility, a detailed monthly analysis of the Trade Receivables Ledger is provided by the Group to Rabobank. Offsetting of financial instruments The Group does not set-off financial assets with financial liabilities in the consolidated financial statements. Under the terms of the Facility agreement, subject to the paragraph following, if the Group does not pay an amount when due and payable, the banks may apply any credit balance in any currency in any account that the Group has with the bank, in or towards satisfaction of that amount. Under the terms of the Rabobank facility, ANZ as the Group’s transactional bank has agreed not to exercise its right of set off until Rabobank has received payment in full of the amount advanced to the Group under the Trade Receivables Facility. As at 30 June 2024, the value of legally enforceable cash balances which upon default or bankruptcy would be applied to the loan facility is $34.2m (2023: $43.0m). Defaults and breaches During the year, there were no defaults or breaches on ant of the loan terms and conditions. (c) Net financing costs 2024 $’000 2023 $’000 Interest income 785 397 Interest expense 7,970 4,984 Interest expense on lease liabilities 423 391 Amortisation of borrowing costs 215 109 Total finance costs 8,608 5,484 Net financing costs 7,823 5,087 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 53 9. Net Debt and net financing costs continued (d) Notes to the statement of cash flows Reconciliation of net cash inflow from operating activities to profit after income tax 2024 $’000 2023 $’000 Net profit after tax 39,853 41,825 Adjustments for non-cash items: Depreciation and amortisation (Note 4 and 5) 26,128 24,781 Net gain on sale of non-current assets 73 – Non-cash share-based payments expense (Note 19) 3,261 3,582 Non-cash finance movements 637 500 Other non-cash movements 712 1,301 Change in operating assets and liabilities, excluding the effects of acquisitions of businesses: Decrease / (increase) in prepayments 7,692 (5,483) Decrease / (increase) in receivables 824 5,722 Decrease / (increase) in inventories 13,133 10,083 Decrease / (increase) in deferred tax asset 1,309 6,845 Increase in trade creditors 8,845 1,923 Increase / (decrease) in provisions (1,215) 567 Increase / (decrease) in deferred tax liability (1,981) – Increase in tax liabilities 5,785 (12,565) Net cash from operating activities 105,056 79,081 Recognition and Measurement Cash and cash equivalents Cash includes cash at bank, cash on hand and deposits at call. Interest bearing liabilities, excluding lease liabilities Interest bearing liabilities are initially recognised net of transaction costs. Subsequent to initial recognition, interest bearing liabilities are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the liabilities on an effective interest basis, unless they are liabilities designated in a fair value relationship in which case they continued to be measured at fair value. Financing costs Borrowing costs are expensed as incurred unless they relate to qualifying assets where interest on funds are capitalised. Lease liabilities Details for lease liabilities are set out in Note 7(b). Notes to the Financial Statements continued 54 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 10. Contributed equity and reserves (a) Contributed equity Parent entity 2024 $’000 2023 $’000 Fully paid up capital: 315,832,713 ordinary shares with no par value (2023: 315,832,713) 218,090 218,090 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 and to one vote per share at general meetings of the Company. (b) Reserves Recognition and Measurement Cash flow hedge reserve Represents the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred. Other reserves Other reserves represent share-based payments reserve used to recognise the fair value of performance rights and options issued to employees in relation to equity settled share-based payments. Treasury shares reserve represents the cost of the Company’s shares held by the Group. (c) Dividends 2024 $’000 2023 $’000 Dividends paid or declared in respect of the year ended 30 June were: Ordinary shares interim dividend of 4.0 cents per share, fully franked, paid 27 April 2023 – 12,720 interim dividend of 4.40 cents per share, fully franked, paid 24 April 2024 13,897 – final dividend of 4.0 cents per share, fully franked, paid 27 October 2022 – 12,780 final dividend of 4.25 cents per share, fully franked, paid 26 October 2023 13,423 – Dividends paid in cash or applied to employee in-substance option loan balances during the year were as follows: paid in cash 27,075 25,239 non-cash dividends paid applied to employee in-substance option loan balances 245 261 Since the end of the financial year, the Directors declared the following dividend: Final dividend on ordinary shares of 4.65 cents per share, fully franked, payable 24 October 2024. The financial effect of the final dividend on ordinary shares has not been brought to account in the financial statements for the year ended 30 June 2024, however will be recognised in the 2025 financial statements. Franking credits Franking credits available at the 30 per cent corporate tax rate after allowing for tax payable in respect of the current year’s profit or loss and the payment of the final dividend for 2024 are $31.6m (2023: $32.2m). DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 55 Section E. Managing our financial risks This section discusses the principal market and other financial risks that Ridley is exposed to and the risk management program, which seeks to mitigate these risks and reduce the volatility of Ridley’s financial performance. 11. Financial risk management Financial risk management is carried out by management under policies approved by the Board. The Group’s principal financial risks are: • Foreign exchange risk • Commodity price risk • Interest rate risk • Credit risk • Liquidity risk. (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. 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: 2024 2023 ($’000) USD NZD EUR THB USD NZD EUR THB Cash 3,681 138 1 842 1,340 22 78 914 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 $423,936 (2023: $213,990) or increased by $518,145 (2023: $261,543) the Group’s reported comprehensive income and the Group’s equity. A sensitivity of 10% has been selected as this is considered reasonable, considering 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. Notes to the Financial Statements continued 56 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 (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 6.34% (2023: 5.51%). 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 Interest rate 2024 Interest rate 2023 Variable rate instruments Cash – 34,196 – 43,023 Bank loans 6.34% 85,000 5.51% 72,500 Interest rate sensitivity A 100 basis point change in interest rates at the reporting date annualised for the financial year would have increased or decreased the Group’s reported comprehensive income and equity (i.e. post tax) by $0.6m (2023: $0.5m). (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: 2024 $’000 2023 $’000 Trade receivables 132,078 121,928 Cash and cash equivalents 34,196 43,023 166,274 164,951 Further credit risk disclosures on trade receivables are disclosed in Note 3.1(a). (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 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 Note 9(b). DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 57 11. Financial risk management continued (e) Liquidity risk continued The following tables disclose the contractual maturities of financial liabilities, including estimated interest payments: 2024 in $’000 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 Non-derivative financial liabilities Trade and other payables 220,406 220,406 – – – – 220,406 Lease liabilities 13,294 5,092 3,581 1,614 1,226 1,781 13,294 Bank loans 85,000 4,885 34,315 55,536 – – 94,736 318,700 230,383 37,896 57,150 1,226 1,781 328,436 2023 in $’000 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 Non-derivative financial liabilities Trade and other payables 205,188 205,188 – – – – 205,188 Lease liabilities 8,666 4,250 3,044 1,767 632 22 9,715 Bank loans 72,500 3,995 38,210 7,419 44,195 – 93,819 286,354 213,433 41,254 9,186 44,827 22 308,722 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 cashflows for the Group’s borrowings reflects the impact of the waivers granted by the Group’s lenders. (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. Notes to the Financial Statements continued 58 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Derivative financial instruments and hedge accounting Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered. Subsequently, at each reporting date, the gain or loss on remeasurement to fair value is recognised immediately in the Consolidated Income Statement, unless they qualify for hedge accounting as outlined in AASB 9 Financial Instruments. The Group enters into certain cash flow hedges to hedge exposure to variability in cash flows that are attributable to the risk associated with the cash flows of highly probable forecast transactions caused by foreign currency movements. The Group’s cash flow hedges include forward foreign exchange contracts. When a derivative financial instrument is designated as a cash flow hedge, the effective part of any gain or loss on the derivative financial instrument is recognised in other comprehensive income and accumulated in the cash flow hedge reserve within equity. The gain or loss relating to the ineffective portion is recognised immediately in the Consolidated Income Statement. When a hedging instrument expires, or is sold, terminated or exercised, but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity and is recognised in accordance with the above policy when the transaction occurs. If the hedged transaction is no longer expected to take place, the cumulative unrealised gain or loss accumulated in equity is reclassified immediately into the Consolidated Income Statement. 2024 $’000 2023 $’000 Derivative financial instruments – cash flow hedge Forward exchange contracts 356 – Derivative financial instruments – fair value through profit and loss Foreign currency derivative 58 58 414 58 (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). DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 59 Section F. Group structure This section provides details of acquisitions which the Group has made in the financial year, as well as details of controlled entities. 12. Investment in controlled entities Recognition and measurement The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the Group, being the Company (the parent entity) and its subsidiaries as defined in AASB 10 Consolidated Financial Statements. 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. On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. When the Group relinquishes control over a subsidiary, it derecognises its share of net assets. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost. The consolidated financial statements include the information and results of each subsidiary from the date on which the Company obtains control until such time as the Company ceases to control such entity. In preparing the consolidated financial statements, all intercompany balances, transactions and unrealised profits arising within the Group are eliminated in full. Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses (except for foreign currency transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. The ultimate parent entity within the Group is Ridley Corporation Limited. Ownership Interest Name of Entity Country of Incorporation Class of Shares 2024 2023 Ridley AgriProducts Pty Ltd and its controlled entity: Australia Ordinary 100% 100% CSF Proteins Pty Ltd Australia Ordinary 100% 100% Oceania Meat Processors Pty Ltd Australia Ordinary 100% –% Oceania Meat Processors Limited New Zealand Ordinary 100% –% Pen Ngern Feed Mill Co., Ltd. (PNFM) Thailand Ordinary 100% 100% Barastoc Stockfeeds Pty Ltd Australia Ordinary 100% 100% Ridley Corporation (Thailand) Co., Ltd Thailand Ordinary 100% 100% Ridley Corporation Ecuador S.A. Ecuador Ordinary 100% 100% Ridley Corporation (India) Private Limited India Ordinary 100% 100% RCL Retirement Pty Limited Australia Ordinary 100% 100% Ridley Land Corporation Pty Ltd1 and its controlled entities: Australia Ordinary 100% 100% Lara Land Development Corporation Pty Ltd Australia Ordinary 100% 100% Moolap Land Development Corporation Pty Ltd Australia Ordinary 100% 100% 1. Following the completion of the divestment of all Moolap and Lara properties, application will be made in FY25 to de-register Ridley Land Corporation Pty Ltd and its two controlled entities. Notes to the Financial Statements continued 60 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 13. Business combinations – Provisional Business combinations are accounted for under the acquisition method when control is transferred to the Group, in accordance with AASB 3 Business Combinations. On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. The transaction costs are expensed in the Consolidated Income Statement. Consolidated – 2024 Acquisitions of business and controlled entities On 28 March 2024, the Group acquired the business assets of Oceania Meat Processors NZ LP (OMP). OMP is a premium producer of mechanically deboned meat (MDM) and other raw materials for global pet food customers. The purchase price comprises AUD$55.4m. For the three months ended 30 June 2024, OMP contributed EBITDA of AUD$3.2m to the Group’s results. 2024 Provisional $’000 Consideration cash paid 53,048 working capital settlement 2,399 Total consideration 55,447 Fair value of net assets of business acquired Working capital 19,692 Other assets 175 Property, plant and equipment 9,907 Customer relationships 15,197 Lease liabilities (2,647) Provisions (265) Deferred tax liability (4,559) Total fair value of net assets of business acquired 37,500 Goodwill on acquisition 17,947 Goodwill on the purchase is attributable mainly to the skills and technical talent of the acquired business’ workforces and the synergies expected to be achieved from integrating this business. None of the goodwill recognised is expected to be deductible for income tax purposes. The Group incurred acquisition-related costs of $2.2m on legal fees and due diligence costs. These costs are included in ‘general and administrative expenses’ in the Consolidated Income Statement and in operating cash flows in the Consolidated Statement of Cash Flows. DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 61 14. Parent company disclosure – Ridley Corporation Limited As at 30 June 2024 and throughout the financial year ending on that date, the parent company of the Group was Ridley Corporation Limited. 2024 $’000 2023 $’000 Result of the parent entity Income / (loss) for the year 5,143 43,008 Total comprehensive income / (loss) for the year 5,143 43,008 Financial position of the parent entity at year end Current assets 2,018 1,208 Non-current assets 226,580 269,410 Total assets 228,599 270,618 Current liabilities 8,565 2,224 Non-current liabilities 89,506 72,500 Total liabilities 98,071 74,724 Net assets 130,527 195,894 Share capital 218,090 218,090 Share based payment reserve 4,309 4,227 Treasury Shares (5,020) (6,115) Profit Reserve 47,180 74,500 Retained earnings (134,032) (94,808) Total equity 130,527 195,894 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 15. Notes to the Financial Statements continued 62 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 15. 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 2024 $’000 2023 $’000 Revenue 1,231,211 1,252,239 Cost of sales (1,118,740) (1,142,745) Gross profit 112,470 109,494 Other income 336 328 Selling and distribution expenses (15,078) (13,669) General and administrative expenses (36,348) (34,129) Operating profit 61,380 62,024 Finance income 765 397 Finance costs (8,570) (5,484) Net finance costs (7,805) (5,086) Profit before income tax expense 53,574 56,937 Income tax expense (16,208) (16,810) Profit after income tax 37,366 40,127 Other comprehensive income for the year, net of tax 249 – Total comprehensive income for the year 37,615 40,127 (b) Summary of movements in retained profits 2024 $’000 2023 $’000 Opening balance at 1 July 99,253 89,535 Comprehensive income for the year 37,615 40,127 Dividends paid (27,320) (25,500) Share based payment reserve net transfer (6,227) (4,909) Closing balance at 30 June 103,321 99,253 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 63 15. Deed of Cross Guarantee continued (c) Balance sheet 2024 $’000 2023 $’000 Current assets Cash and cash equivalents 27,536 42,103 Receivables 118,620 125,089 Inventories 93,296 106,623 Tax asset – 705 Derivative financial instruments 414 – Total current assets 239,866 274,521 Non current assets Receivables 8,319 9,847 Property, plant and equipment 250,091 235,770 Intangible assets 92,230 73,988 Investments 58,440 20,408 Deferred tax asset 1,980 1,309 Total non-current assets 411,060 341,322 Total assets 650,926 615,834 Current liabilities Payables 219,001 207,424 Provisions 14,508 15,636 Tax Liability 4,973 – Total current liabilities 238,484 223,059 Non-current liabilities Interest bearing liabilities 91,118 77,005 Provisions 376 325 Total non current liabilities 91,494 77,330 Total liabilities 329,978 300,389 Net assets 320,948 315,454 Equity Share capital 218,090 218,090 Reserves (463) (1,889) Retained earnings 103,321 99,253 Total equity 320,948 315,454 16. Related party disclosures Dr Robert van Barneveld, a director of Ridley Corporation until 20 November 2023, 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. Notes to the Financial Statements continued 64 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Section G. Remunerating our people This section provides financial insight into employee reward and recognition designed to attract, retain, reward and motivate high performing individuals so as to achieve Ridley’s objectives, in alignment with the interests of the Group and its shareholders. This section should be read in conjunction with the Remuneration Report, which provides specific details on the setting of remuneration for key management personnel (KMP). 17. Employee benefits expenses and provisions The Group’s employee benefits expenses for the year ended 30 June were as follows: 2024 $’000 2023 $’000 Wages and salaries 72,411 66,418 Defined contribution superannuation expense 7,177 6,298 Other employee benefits expense 12,934 16,470 Share-based payments expense 3,261 3,582 Total employee benefits expense 95,783 92,768 The employee entitlements provisions as at 30 June comprise the following: 2024 $’000 2023 $’000 Current Employee entitlements 14,635 15,636 Non-current Employee entitlements 376 325 Recognition and measurement Employee Entitlements Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages and salaries, annual leave and long service leave. Benefits vested within twelve months of the reporting date are classified as current and are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. 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. 18. Key management personnel The amounts disclosed in the table below are the amounts recognised as an expense during the year relating to KMP: 2024 $’000 2023 $’000 Short-term employee benefits 3,245 3,172 Post-employment benefits 205 207 Short term incentive remuneration – 1,335 Other benefits 1,242 95 Share-based payments expense 1,763 1,171 Total compensation 6,455 5,979 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 65 19. Share-based payments 2024 $’000 2023 $’000 Share-based payment expense Shares issued under the employee share scheme 500 458 Performance rights issued under the Ridley long-term incentive plan 2,761 3,124 Total Share-based payment expense 3,261 3,582 Recognition and measurement 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. The Long-Term Incentive Plan (LTIP) 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 FY22, FY23 and FY24, 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 FY24 is divided equally into two tranches, Tranche A and Tranche B. The performance measure for Tranche A Rights issued in FY24 is the ROFE hurdle as applied to all three years of the performance period (FY22 and FY23: 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 (FY22 and FY23: 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: 2024 2023 2022 Grant date 1 July 2023 1 July 2022 1 July 2021 Expiry date 30 June 2026 30 June 2025 30 June 2024 Share price at grant date $2.00 $1.74 $1.15 Fair value at grant date: Tranche A / Tranche B $1.741/$0.78 $1.541/$0.56 $1.041/$0.31 Expected price volatility of the Company’s shares 27.0% 26.0% 25.0% Expected dividend yield 13.8 cps 6.70 cps 5.00 cps Risk free interest rate being the Commonwealth Government Bond rate at the date of grant 4.03% 3.01% 0.195% 1. The fair 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. Notes to the Financial Statements continued 66 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 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. Details of Rights outstanding under the Long-term incentive plans at balance date are as follows: 2024 Grant Date Expiry Date Balance at 1 July 2023 Granted during the year Cancelled during the year Vested during the year Balance at 30 June 2024 1 Sept 2020 30 June 20231 4,546,971 – (146,875) (4,400,096) – 1 July 2021 30 June 20242 3,938,826 – (295,108) – 3,643,718 1 July 2022 30 June 2025 2,885,558 – (286,416) – 2,599,142 1 July 2023 30 June 2026 – 4,359,350 (267,778) – 4,091,572 11,371,355 4,359,350 (996,177) (4,400,096) 10,334,432 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 FY24. 2. The FY22 Plan is tested as at 30 June 2024 and vests on 1 July 2024. Refer to section 4.3 of the remuneration report for summary of the Long-Term Incentive Plan outcomes. 2023 Grant Date Expiry Date Balance at 1 July 2022 Granted during the year Cancelled during the year Vested during the year Balance at 30 June 2023 1 July 2019 30 June 20221 3,520,056 – (373,503) (3,146,553) – 1 Sept 2020 30 June 2023 5,764,913 – (798,313) (419,629)2 4,546,971 1 July 2021 30 June 2024 4,400,436 – (361,307) (100,303)2 3,938,826 1 July 2022 30 June 2025 – 3,033,730 (148,172) – 2,885,558 13,685,405 3,033,730 (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. 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 2023, such that 366,000 (FY23: 342,000) shares were allocated to participating employees during the year, all of which were allocated from the RCL Retirement Pty Ltd account in which Company shares are accumulated upon the departure of ESS scheme participant employees (FY23: 342,000). The fair value at grant date of the options issued in FY24 through the ESS was measured based on the binomial option pricing model using the following inputs: 2024 2023 Grant date 30 Sept 2023 30 Sept 2022 Restricted life 3 years 3 years Share price at grant date $2.11 $2.04 Fair value at grant date $1.44 $1.34 Expected price volatility of the Company’s shares 25.0% 25.0% Expected dividend yield per annum in cents per share (cps) 10.0 cps 8.9 cps Risk free interest rate being the Commonwealth Government Bond rate at the date of grant 3.725% 3.895% DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 67 19. Share-based payments continued Ridley ESS loan movements 2024 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 $0.61 73,260 – (73,260) – – 30 April 2011 30 April 2014 $0.66 66,352 – (9,048) 57,304 57,304 30 April 2012 30 April 2015 $0.61 82,700 – (11,578) 71,122 71,122 26 April 2013 26 April 2016 $0.41 192,049 – (192,049) – – 23 May 2014 23 May 2017 $0.48 222,780 – (222,780) – – 31 May 2015 31 May 2018 $0.66 192,564 – (33,877) 158,687 158,687 20 May 2016 20 May 2019 $0.85 207,060 – (36,975) 170,085 170,085 19 May 2017 19 May 2020 $0.84 222,985 – (42,935) 180,050 180,050 31 May 2018 31 May 2021 $0.84 280,170 – (49,525) 230,645 230,645 21 June 2019 21 June 2022 $0.64 328,600 – (67,363) 261,237 261,237 1 Sept 2020 1 Sept 2023 $0.41 608,650 – (194,250) 414,400 414,400 1 Sept 2021 1 Sept 2024 $0.78 359,667 – (51,381) 308,286 – 30 Sept 2022 30 Sept 2025 $1.34 326,000 – (41,000) 285,000 – 30 Sept 2023 30 Sept 2026 $1.44 – 326,112 (19,908) 306,204 – 3,162,837 326,112 (1,045,929) 2,443,020 1,543,530 Weighted average exercise price $0.70 $1.44 $0.59 $0.85 $0.66 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 $0.61 87,912 – (14,652) 73,260 73,260 30 April 2011 30 April 2014 $0.66 78,416 – (12,064) 66,352 66,352 30 April 2012 30 April 2015 $0.61 102,548 – (19,848) 82,700 82,700 26 April 2013 26 April 2016 $0.41 240,669 – (48,620) 192,049 192,049 23 May 2014 23 May 2017 $0.48 279,660 – (56,880) 222,780 222,780 31 May 2015 31 May 2018 $0.66 251,403 – (58,839) 192,564 192,564 20 May 2016 20 May 2019 $0.85 266,220 – (59,160) 207,060 207,060 19 May 2017 19 May 2020 $0.84 288,080 – (65,095) 222,985 222,985 31 May 2018 31 May 2021 $0.84 348,090 – (67,920) 280,170 280,170 21 June 2019 21 June 2022 $0.64 441,967 – (113,367) 328,600 328,600 1 Sept 2020 1 Sept 2023 $0.41 668,220 – (59,570) 608,650 – 1 Sept 2021 1 Sept 2024 $0.78 386,136 – (26,469) 359,667 – 30 Sept 2022 30 Sept 2025 $1.34 – 342,000 (16,000) 326,000 – 3,439,321 342,000 (618,484) 3,162,837 1,868,520 Weighted average exercise price $0.64 $1.34 $0.67 $0.70 $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. Notes to the Financial Statements continued 68 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 20. 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 $7.2m (2023: $6.3m). DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 69 Section H. Other Disclosures This section includes additional financial provides that is required by Australian Accounting Standards and which management considers to be relevant information to shareholders. 21. 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. 2024 $’000 2023 $’000 Bank guarantees 1,411 950 Litigation 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. 22. Events subsequent to balance sheet date There were no matters or circumstances that have arisen since 30 June 2024 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. 23. Auditor’s remuneration 2024 $ 2023 $ (a) Audit and review of financial reports Auditor of the Company – KPMG Australia 369,930 411,691 (b) Other services Auditor of the Company – KPMG Australia – in relation to taxation and other services 68,068 21,422 Total remuneration of auditor 437,998 433,113 Notes to the Financial Statements continued 70 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Consolidated Entity Disclosure Statement Set out below is a list of entities that are consolidated in this set of Consolidated financial statements at the end of the financial year. Entity name Body corporate, partnership or trust Country of Incorporation % of share capital held directly or indirectly by the Company in the body corporate Australian or Foreign tax resident Jurisdiction for Foreign tax resident 2024 2023 Ridley AgriProducts Pty Ltd and its controlled entity: Body corporate Australia 100% 100% Australian n/a CSF Proteins Pty Ltd Body corporate Australia 100% 100% Australian n/a Oceania Meat Processors Pty Ltd Body corporate Australia 100% –% Australian n/a Oceania Meat Processors Limited Body corporate New Zealand 100% –% Foreign New Zealand Pen Ngern Feed Mill Co., Ltd. (PNFM) Body corporate Thailand 100% 100% Foreign Thailand Barastoc Stockfeeds Pty Ltd Body corporate Australia 100% 100% Australian n/a Ridley Corporation (Thailand) Co., Ltd Body corporate Thailand 100% 100% Foreign Thailand Ridley Corporation Ecuador S.A. Body corporate Ecuador 100% 100% Foreign Ecuador Ridley Corporation (India) Private Limited Body corporate India 100% 100% Foreign India RCL Retirement Pty Limited Body corporate Australia 100% 100% Australian n/a Ridley Land Corporation Pty Ltd and its controlled entities: Australia 100% 100% Australian n/a Lara Land Development Corporation Pty Ltd Body corporate Australia 100% 100% Australian n/a Moolap Land Development Corporation Pty Ltd Body corporate Australia 100% 100% Australian n/a Key assumptions and judgements Determination of Tax Residency Section 295(3A) of the Corporation Act 2001 requires that the tax residency of each entity which is included in the Consolidated Entity Disclosure Statement (CEDS) be disclosed. In the context of an entity which was an Australian resident, “Australian resident” has the meaning provided in the Income Tax Assessment Act 1997. The determination of tax residency involves judgement as the determination of tax residency is highly fact dependent and there are currently several different interpretations that could be adopted, and which could give rise to a different conclusion on residency. In determining the tax residency, the consolidated entity has applied the following interpretations: • Australian tax residency – the consolidated entity has applied current legislation and judicial precedent, including having regard to the Commissioner of Taxation’s public guidance in Tax Ruling TR 2018/5. • Foreign tax residency – the consolidated entity applies current legislation and where applicable judicial precedent in the determination of foreign tax residency. Where necessary, the consolidated entity has used independent tax advisors in foreign jurisdictions to assist in its determination of tax residency to ensure applicable foreign tax legislation has been complied with. DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 71 Directors’ Declaration 1. In the opinion of the Directors of Ridley Corporation Limited (the Company): (a) The consolidated financial statements and notes that are set out on pages 32 to 71 and the Remuneration Report are in accordance with the Corporations Act 2001, including: (i) complying with Australian Accounting Standards and the Corporations Regulations 2001, and (ii) giving a true and fair view of the Group’s financial position as at 30 June 2024 and its performance for the financial year ended on that date. (b) The consolidated entity disclosure statement as at 30 June 2024 set out on page 71 is true and correct; and (c) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 2. There are reasonable grounds to believe that the Company and the group entities identified in note 15 will be able to meet any obligations or liabilities to which they are or may be become subject to by virtue of the Deed of Cross Guarantee between the Company and those group entities pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785. 3. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Managing Director and Chief Financial Officer for the financial year ended 30 June 2024. 4. The directors draw attention to Basis of Preparation on page 37 to the financial statements, which includes a statement of compliance with International Financial Reporting Standards. Signed in accordance with a resolution of the directors: Mick McMahon Director and Ridley Chair Q L Hildebrand CEO and Managing Director Melbourne 21 August 2024 72 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Independent Auditor’s Report 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 gives a true and fair view, including of the Group’s financial position as at 30 June 2024 and of its financial performance for the year then ended, in accordance with the Corporations Act 2001, in compliance with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated balance sheet as at 30 June 2024; • Consolidated statement of profit or loss and other comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended; • Consolidated entity disclosure statement and accompanying basis of preparation as at 30 June 2024; • Notes, including material accounting policies; and • Directors’ Declaration. The Group consists of the Company and the entities it controlled at the year end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with these requirements. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 73 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY Independent Auditor’s Report continued 66 Key Audit Matters The Key Audit Matters we identified are: • Acquisition accounting; and • 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. Acquisition accounting (cash purchase consideration of $53m) Refer to Note 13 Business Combinations - Provisional to the financial report The key audit matter How the matter was addressed in our audit On 28 March 2024, the Group acquired 100% of Oceania Meat Processors NZ LP (OMP) for consideration of $53m, resulting in the recognition of right-of-use assets, property, plant and equipment, customer relationships and goodwill. The transaction is considered to be a key audit matter due to the: • size of the acquisition having a significant impact on the Group’s financial statements; • the judgement and complexity involved in the determination of the fair values of assets and liabilities acquired in the transaction requiring significant audit effort. The Group engaged an external valuation expert to assess the fair value of customer relationships. The key assumptions we focused on in the valuations of intangible assets included forecast earnings, discount rate and attrition rate. We involved our valuation specialists to supplement our senior audit team members in assessing this key audit matter. Our procedures included: • Evaluating the acquisition accounting by the Group against the requirements of the accounting standards; • Reading the underlying transaction agreements to understand the terms of the acquisition and nature of the assets and liabilities acquired; • Assessing the accuracy of the calculation and measurement of consideration paid to acquire OMP based on the underlying transaction agreements and underlying documentation from the Group’s bank; • Working with our valuation specialists, we assessed the Group’s external valuation expert reports and: • Considered the objectivity, competence and scope of work of the Group’s external valuation expert; • Assessed the key assumptions in the Group’s external valuation expert report prepared in relation to the identification and valuation of the customer relationships including: - Checking forecast earnings assumptions used as a part of the acquisition process against Board approved forecasts; - Verifying that the attrition rate used in the model aligns with the analysis on customer attrition; - Comparing terminal growth rates to published studies of industry trends and expectations; and 74 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 67 - independently developing a discount rate range considered comparable using publicly available market data for comparable entities, adjusted by risk factors specific to the acquired business and the industry it operates in. • Recalculating the goodwill balance arising as a result of the transaction and comparing it to the goodwill amount recorded by the Group; and • Assessing the adequacy of disclosures in the financial report using our understanding of the transaction obtained from our testing and against the requirements of the accounting standard. Existence of Inventory ($105m) Refer to Note 3 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 (16% 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 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; and • 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 2024 75 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY Independent Auditor’s Report continued 68 Other Information Other Information is financial and non-financial information in Ridley Corporation Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. The Other Information we obtained prior to the date of this Auditor's Report was the Financial 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. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: • preparing the Financial Report in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of the Group, and in compliance with Australian Accounting Standards and the Corporations Regulations 2001; • implementing necessary internal control to enable the preparation of a Financial Report in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of the Group, and that is free from material misstatement, whether due to fraud or error; and • assessing the Group’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. 76 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 69 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 http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our Auditor’s Report. Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of Ridley Corporation Limited for the year ended 30 June 2024, 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, 10 to 20 of the Directors’ report for the year ended 30 June 2024. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPM_INI_01 KPMG Julie Carey Partner Melbourne 21 August 2024 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 77 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY Shareholder Information As at 2 September 2024 Holdings of securities – ordinary shares Number of holders Number of Securities % Held by 20 largest shareholders Each fully paid 6,875 315,832,713 76.88 Distribution of holdings – ordinary shares Number held Number of ordinary shareholders Number of ordinary shares held % of ordinary shares held 1 – 1,000 1,578 768,187 0.24 1,001 – 5,000 2,377 6,917,336 2.19 5,001 – 10,000 1,202 9,125,083 2.89 10,001 – 100,000 1,613 40,281,669 12.75 100,001 and Over 105 258,740,438 81.92 Total 6,875 315,832,713 100.00 As at 30 August 2024, there were 474 holders of unmarketable parcels (comprising shareholdings less than 219 shares at $2.2900 per share) of ordinary shares. 20 largest fully paid shareholders Number of ordinary shares % of fully paid ordinary shares 1 CITICORP NOMINEES PTY LIMITED 101,420,367 32.11 2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 55,470,229 17.56 3 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 53,186,572 16.84 4 BNP PARIBAS NOMINEES PTY LTD10,098,535 3.20 5 RCL RETIREMENT PTY LTD 3,382,898 1.07 6 BNP PARIBAS NOMS PTY LTD 3,281,404 1.04 7 QUINTON LANCE HILDEBRAND 2,736,077 0.87 8 CITICORP NOMINEES PTY LIMITED 1,977,124 0.63 9 MR JAMES FONG SEETO 1,650,000 0.52 10 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2 1,521,278 0.48 11 LJ & K THOMSON PTY LTD 1,400,000 0.44 12 NATIONAL NOMINEES LIMITED 1,399,651 0.44 13 NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT> 843,331 0.27 14 MR ROSS MERVYN JOHNS 780,000 0.25 15 GARMARAL PTY LTD 660,338 0.21 16 RATHVALE PTY LIMITED 626,516 0.20 17 NETWEALTH INVESTMENTS LIMITED 612,476 0.19 18 MR RUSSELL LYONS 605,762 0.19 19 BNP PARIBAS NOMINEES PTY LTD 602,873 0.19 20 MR MICHAEL PETER MCMAHON + MRS AMANDA JANE MCMAHON 549,435 0.17 Top 20 ordinary fully paid shareholders 242,804,866 76.88 Balance of ordinary fully paid shareholders 73,027,847 23.12 Substantial Shareholders – circa 25.94% of issued capital Holding % Holding1 AGR Agricultural Investments LLC / AGR Partners LLC 60,727,615 19.23 Schroder Investment Management Australia Limited 21,182,600 6.71 1. As per the latest Substantial Shareholder lodged with the ASX. 78 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Directors' holdings On 2 September 2024, the Directors of Ridley Corporation Limited had an interest in the following shares and performance rights of the Company. Director Fully paid ordinary shares Ridley Performance rights MP McMahon 556,263 – QL Hildebrand1 2,788,833 3,931,826 E Knudsen 703,286 – R Jones 124,391 – J Raffe 34,959 – M Laing 22,989 – 4,230,721 3,931,826 1. The Board has approved the offer of 669,648 Ridley Performance Rights to Mr Hildebrand under the LTIP. In addition the Board approved the offer of 1,500,000 Ridley Performance Rights to Mr Hildebrand under Ridley’s Special Retention Plan. Both of these offers were approved by shareholders at the 21 November 2023 Annual General Meeting of the Company. Voting rights As at 2 September 2024, the number of holders of Fully Paid Ordinary Shares with full voting rights was 6,875. 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. RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 79 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY Glossary AASB Australian Accounting Standards Board AASBs Australian Accounting Standards AGM Annual General Meeting ASX Australian Securities Exchange Board Ridley Board of Directors CEO Ridley Chief Executive Officer & Managing Director CGU Cash Generating Unit CODM Chief Operating Decision Maker Company Ridley Corporation Limited CSF Proteins Ingredients Recovery businesses at Laverton, Victoria and Maroota, NSW CSIRO Commonwealth Scientific and Industrial Research Organisation Deed Deed of Indemnity between Company and its Directors and officers EBIT Earnings Before Interest and Tax EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation ECL Expected Credit Loss EPS Earnings Per Share ESS Ridley Employee Share Scheme Facility Long-term Loan Facility with ANZ and Westpac Fund Ridley Superannuation Plan – Australia FY## Financial year ended 30 June ## Group Ridley Corporation Limited and its subsidiaries GST Goods and Services Tax IASB International Accounting Standards Board IBR Incremental Borrowing Rate IFRIC International Financial Reporting Standards Interpretation Committee IFRS International Financial Reporting Standards IP Intellectual property KMP Key Management Personnel KPI Key Performance Indicators KPMG Independent External Auditor of Ridley Kt Thousand tonnes LTIFR Long Term Injury Frequency Rate LTIP Ridley Corporation Long Term Incentive Plan M, m Million MTI Medically Treated Injury/ies NGER National Greenhouse and Energy Reporting Act 2007 NPAT Net Profit After Tax P/E Ratio of share Price to Earnings PNFM Pen Ngern Feed Mill Co., Ltd. R&D Research and Development RDTI Research and Development Tax Incentive Ridley Ridley Corporation Limited Rights Indeterminate Performance rights issued under the LTIP RIOC Ridley Innovation and Operational Committee ROFE Return On Funds Employed SRP Special Retention Plan STIP Short Term Incentive Plan TEP Total Employment Package TRFR Total Recordable Frequency Rate TSR Total Shareholder Return VWAP Volume Weighted Average Price 80 RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 Corporate Directory Ridley Corporation Limited ABN 33 006 708 765 Corporate office and registered office Level 9, South Tower Rialto, 525 Collins Street, Melbourne VIC 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 9, South Tower Rialto, 525 Collins Street, Melbourne VIC 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.cobberdogfood.com.au www.cobberchallenge.com.au www.barastocpoultry.com.au www.foodfordogs.au MDM Design® RIDLEY CORPORATION LIMITED ANNUAL REPORT 2024 81 DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION CORPORATE DIRECTORY