INGHAMS GROUP LIMITED — Annual Report 2021

Oct 4, 2021

AnnuAl RepoRt 2021

optIMISInG FoR tHe FutuRe

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ContentS

ContentS
WHO WE ARE	IFC
WHERE WE OPERATE	1
OPTIMISING OUR FULLY-INTEGRATED
OPERATING MODEL	2
FINANCIAL HIGHLIGHTS	3
CHAIRMAN’S REPORT	4
CEO AND MD’S REPORT	5
OPERATIONAL HIGHLIGHTS	6
SUSTAINABILITY REPORT	12
BOARD OF DIRECTORS	32
SENIOR MANAGEMENT	34
CORPORATE GOVERNANCE STATEMENT	36
DIRECTORS’ REPORT	41
LEAD AUDITOR’S INDEPENDENCE DECLARATION	84
CONSOLIDATED INCOME STATEMENT	85
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME	86
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	87
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	88
CONSOLIDATED STATEMENT OF CASH FLOWS	89
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS	90
DIRECTORS’ DECLARATION	125
INDEPENDENT AUDITOR’S REPORT	126
SHAREHOLDER INFORMATION	131
CORPORATE DIRECTORY	IBC

notes to financials

All financials are in Australian dollars, unless otherwise stated. The financial figures provided in the front section of the Annual Report (IFC to page 40) have been rounded, and therefore some totals and percentages may not add up exactly.

WHo We ARe

Ingham’s is the largest integrated poultry producer across Australia and new Zealand, supplying chicken, turkey and plant‑based protein products into retail, quick service restaurants, foodservice distributors, wholesale and export channels. We are also one of the largest producers of stockfeed in Australia.

Our focus on animal welfare is strongly supported by our 8,000 people, who are encouraged to thrive through personal and professional development as we continually work towards a constructive culture.

We have a long‑standing reputation for food quality, customer service, sustainable operations and a commitment to nourish consumers with fresh, convenient and affordable food that is always good.

ouR pRouD HIStoRY

Ingham’s was founded as a family business in 1918 by Walter Ingham in Liverpool, New South Wales, Australia. In 1953, Walter’s sons, Bob and Jack Ingham, expanded the business across Australia. The company started supplying products to major retail and quick service restaurants in the 1960s. We then expanded to produce turkey and stockfeed, followed by value‑enhanced products. In 1990, we started operating in New Zealand.

The company was acquired by TPG Capital in 2013 and listed on the Australian Securities Exchange in 2016. TPG Capital sold their last remaining shareholdings on 26 August 2020. Over the past decade, we have invested more than $1 billion in state‑of‑the‑art facilities to meet future growth and firmly establish Ingham’s as an industry leader in Australia and New Zealand poultry.

Reference to Underlying excludes any profit or loss on sale of assets, restructuring expenses and impairments. Further, Underlying NPAT excludes tax on the abovementioned exclusions.

online Annual Report

This report can be viewed online at www.inghams.com.au

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Front cover photo credit: HatchTech.

WHERE WE OPERATE

WHeRe We opeRAte

Our geographically dispersed network is designed to optimise the national supply chain, minimise agricultural and biosecurity risks, and provide flexibility and resilience to deliver continuity of supply to customers.

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State‑of‑the‑art pakenham Hatchery, bringing together high tech, animal rights practices and welfare.

the HatchCare technology features on our front cover and on page 6.

Facilities/farms

Farms

Hatcheries

Feedmills

Primary processing

Further processing

Warehouse and distribution

Protein conversion plant

OPTIMISING FOR THE FUTURE 1

OPTIMISING OUR FULLY-INTEGRATED OPERATING MODEL

OPTIMISING OUR FULLY-INTEGRATED OPERATING MODEL

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FEEDMILLS
FURTHER
PROCESSING
WAREHOUSING
BROILER PRIMARY
Genetics BREEDERS HATCHERIES AND Customers Consumers
FARMS PROCESSING
DISTRIBUTION
Retail
Quick Service Restaurants
Foodservice
Wholesale
Export
Rearing
~22 weeks
Production ~3 weeks 5-7 weeks
~40-48 weeks
BYPRODUCTS
Total approximately 70 – 78 weeks
Owned or controlled
External
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Our vertically integrated operations are complex and span the entire value chain from farming to processing and distribution.

We optimise and extract value from our fully‑integrated operating model through integrated planning and operational excellence.

Effective integrated planning ensures we have the right products in the right place at the right time to service our customers and we consider the end‑to‑end supply chain impacts from all decision‑making.

Operational excellence is required to deliver on our operational and sustainability objectives. Recent examples, which are elaborated on further in this report, include:

• Opening our latest hatchery at Pakenham in Victoria, which has the highest welfare offering in Australia;

• Investing in automation at our primary processing facilities at Osborne Park in Western Australia and Tahmoor in New South Wales allowing us to increase capacity and provide safer and more efficient production;

• Planning to build a bigger and better distribution centre at Truganina in Victoria to meet future growth and deliver cost savings by being closer to transport routes;

• Expanding our further processing facility at Auckland in New Zealand to increase production and installing equipment to supply fully cooked products to our customers; and

• By focusing on sustainability and efficiency, our feedmill team reconfigured trailer loading for the delivery of feed that reduced truck movements and reduced greenhouse gas emissions by 71 tonnes per annum.

2 INGHAM’S ANNUAL REPORT 2021

HIGHlIGHtS

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CHAIRMAN’S REPORT

CHAIRMAN’S REPORT

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WelCoMe to YouR 2021 AnnuAl RepoRt.

I would like to commend the entire Ingham’s team for delivering strong financial results in FY21, driven by our disciplined approach to executing our long‑term strategy. Unfortunately, these results have been overshadowed by the tragic fatality of one of our employees at our Bolivar facility in May, which weighs heavily on us all.

Our FY21 financial results included Statutory Net Profit After Tax (NPAT) of $83.3 million, increasing 107.7 per cent on the previous year. Our Cash Flow from operations was strong at $450.4 million, increasing 15.5 per cent on the previous year. These results enabled us to provide shareholders with fully franked dividends totalling 16.5 cents per share. This is an increase of 17.9 per cent on the previous year and reflects a payout ratio of 71 per cent of Underlying NPAT.

YouR teAM

Our people, led by our new Chief Executive Officer and Managing Director, Andrew Reeves, have shown resilience, agility, and an unwavering commitment to the safe delivery of our quality products to our customers and consumers while facing the ongoing challenges of COVID‑19. I am pleased to confirm that our operations have had minimal disruption.

The Board was delighted that Andrew agreed to become our new Chief Executive Officer and Managing Director on 29 March 2021. As many shareholders are aware, Andrew served on our Board for two years and has more than 40 years’ experience in successfully managing complex, commoditised businesses and brands in the fast‑moving consumer goods (FMCG) and agribusiness industries. This deep experience ensured a seamless leadership transition with no loss of momentum.

I would like to formally acknowledge and thank our former Chief Executive Officer and Managing Director, Jim Leighton, for his significant contribution to your company. He built a world class executive team, and we are a stronger business as a result. Andrew was able to take over the reins of the business, knowing he had an executive team of depth and talent. We wish Jim and his family all the best.

SuStAInABIlItY

Our long‑term focus on sustainability has positioned us as industry leaders in water stewardship, sustainable agriculture and food production. Sustainability is core to our strategy, and we are committed to always acting in the best interests of our people, our animals, the community and the environment.

In meeting our commitment, we have set meaningful targets to reduce our greenhouse gas emissions, water and landfill waste by 2030. We are also improving the quality of

our reporting to stakeholders and, for the first time, we have published our alignment to the Task Force on Climate‑Related Financial Disclosures in our Sustainability Report.

tHe FutuRe

We are invested in ensuring our company’s culture is constructive and provides a platform for our 8,000 people to develop and thrive so they can each contribute in a meaningful way to our growth strategy. It is clear from our results that this focus is delivering a high‑performing business.

I would like to thank my Board colleagues for their prudent governance, and the Ingham’s team across Australia and New Zealand for working safely and with a commitment to remain an essential service to our communities by ensuring supply continuity to our customers.

Thank you also to our shareholders for your continuing support. We are committed to delivering ongoing consistent, predictable and reliable returns.

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Peter Bush Chairman

Sustainability is core to our strategy, and we are committed to always acting in the best interests of our people, our animals, the community and the environment.

4 INGHAM’S ANNUAL REPORT 2021

CEO AND MD’S REPORT

Ceo AnD MD’S RepoRt

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Our strong financial results demonstrate we have much to be proud of as a safe, sustainable and essential company that provides quality food that is always good.

InGHAM’S HAS A pRouD ReputAtIon FoR pRoVIDInG GooD FooD to tHe CoMMunItY FoR MoRe tHAn 100 YeARS.

I am honoured to have been given the opportunity to lead and work with a team that is totally committed to continuing to fulfil our role as an essential service.

Our FY21 results demonstrate the effectiveness of our strategy and the ongoing demand for poultry. We increased:

• Core poultry volume by 4.2 per cent to 446.9 kilotonnes;

• Revenue by 4.4 per cent to $2.7 billion;

• Statutory EBITDA by 14.5 per cent to $443.9 million; and

• Statutory NPAT was up 107.7 per cent to $83.3 million.

These strong results were made possible by our people who ensured we maintained supply to consumers and customers across Australia and New Zealand. This included throughout the volatility of COVID‑19 lockdowns, restrictions and peak buying demands.

During the year, we leveraged the scale of our operations to optimise the core of our business and create value for our shareholders in line with our growth strategy.

This value is being delivered with modest capital spend. Optimisation during the year included opening a new hatchery that improves animal welfare, investing in automation at our primary processing facilities to increase efficiency, and expanding a further processing facility to increase our capacity. Our continuous improvement program has 320 projects underway that will continue to reduce costs and waste to deliver strong outcomes for our business.

We are deeply saddened that we had a fatality at Bolivar, South Australia, in May. We continue to assist SafeWork SA with their investigation. My Executive Leadership Team and I remain focused on providing a safe working environment for our people. This has included prioritising our people’s safety throughout the COVID‑19 pandemic, with initiatives such as paid pandemic leave so that people can stay home and get tested without financial burden. More recently, we have provided paid vaccination leave to ensure they also have the flexibility to get vaccinated at any time.

Our 30‑year focus on sustainability is delivering positive economic, environmental and social outcomes in caring for our people, animals and the planet. We extend this care across our supply chain through our Modern Slavery Statement, which also addresses human rights. I invite you to read more in our Sustainability Report.

After serving on the Board for the past two years, I have been delighted to spend more time across our operations getting to know our people in Australia. I look forward to visiting New Zealand when travel restrictions are eased. I have also been working with the Executive Leadership Team to evolve our strategy to continue to leverage future growth opportunities. This includes developing our brands and expanding our product range. We will also strengthen customer engagement, and I am pleased to welcome Chief Customer Officer, Mark Powell to the team to lead this strategic pillar. Mark has more than 25 years’ experience in the FMCG industry and a proven track record for achieving sales and profit growth with major customers.

I would like to thank everyone who supports us – our people, customers, consumers, shareholders and the communities where we work. I look forward to continuing to work alongside our capable, committed and ‘can do’ team to deliver our growth strategy. Our strong financial results demonstrate we have much to be proud of as a safe, sustainable and essential company that provides quality food that is always good.

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Andrew Reeves Chief Executive Officer and Managing Director

OPTIMISING FOR THE FUTURE 5

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OPERATIONAL HIGHLIGHTS
InGHAM’S VeteRInARIAn, SoY RuBIte, IS pRouD oF
ouR InVeStMent In tHe HAtCHCARe teCHnoloGY,
WHICH IS eleVAtInG AnIMAl WelFARe to tHe
HIGHeSt StAnDARDS.
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opeRAtIonAl HIGHlIGHtS

tHe HIGHeSt WelFARe oFFeRInG HAtCHeRY

We opened our latest hatchery at pakenham, Victoria, in March 2021. the hatchery is critical to ensuring we have the capacity to meet future demand and has been designed to nurture 1.1 million eggs into healthy chicks every week.

We are committed to leading the way with our operating standards.

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6 INGHAM’S ANNUAL REPORT 2021

OPERATIONAL HIGHLIGHTS

The BRC Global Standard for Food Safety has given 95 per cent of our sites an ‘A’ or ‘AA’ for quality.

The installation of HatchCare technology within our new hatchery is an Australian first and is leading the way in animal welfare standards.

The HatchCare technology benefits our chicks through:

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tHe HAtCHCARe teCHnoloGY pRoVIDeS FoR HIGHeR HAtCHABIlItY,
AnD StRonGeR AnD HeAltHIeR DAY‑olD CHICKS.
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1. ACCESS TO FOOD AND WATER AS SOON AS THEY ARE HATCHED. THIS HELPS AVOID DEHYDRATION AND BUILD THEIR IMMUNITY.

2. AN UNDISTURBED ENVIRONMENT IN THEIR HATCHCARE BASKETS UNTIL TRANSPORTED TO THE FARM.

3. OPTIMAL LIGHT SO THEY CAN SOCIALISE EARLY, HAVE ENOUGH SPACE TO AVOID OVERHEATING AND HUMIDITY MANAGEMENT TO IMPROVE AIR QUALITY AND LIVING CONDITIONS.

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tHe InStAllAtIon oF HAtCHCARe teCHnoloGY
In ouR neW HAtCHeRY IS An AuStRAlIAn‑FIRSt.
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These optimal living conditions and nourishment are maintained from the hatchery through transport and handover to our farmers, who continue to support their welfare‑led growth and care.

Our commitment to best practice quality that our customers can trust continues to be built from a long‑standing alignment to animal welfare organisations such as the RSPCA, Free Range Egg & Poultry Association and SPCA (NZ). This is further demonstrated by 95 per cent of our sites achieving ‘A’ or ‘AA’ ratings by the BRC Global Standard for Food Safety. We continue to work towards achieving the highest levels of accreditation at all of our sites.

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OPTIMISING FOR THE FUTURE 7

OPERATIONAL HIGHLIGHTS

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InGHAM’S Won BeSt CoMMeRCIAl FooD &
BeVeRAGe eXHIBIt At tHe RoYAl BAtHuRSt
SHoW, IntRoDuCInG ouR neW pRoDuCtS to
tHe CoMMunItY WItH ouR neW FooD tRuCK.
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eXpAnDInG ouR BuSIneSS Core poultry volume has grown 4.2 per cent in FY21 as customer demand for our products has strengthened across our channels in Australia and new Zealand.

We have focused on increasing customer engagement across our channels by:

• Elevating strategic relationships with key retail customers;

• Increasing volume with quick service restaurants (QSRs) through the launch of new product ranges;

• Supporting food service customers to manage the impacts of COVID‑19 restrictions; and

• Broadening wholesale customer relationships to grow share.

Ingham’s new food truck (pictured) is also travelling to community events to introduce Ingham’s new products to consumers. For example, at the Woolies Wheels and Walks Tour de Cure fundraiser in Sydney and at the Royal Bathurst Show we served our exciting new products: Chicken Potato Cakes and Super Crunch.

We create value for our business and shareholders by focusing on operational excellence across our operations.

InVeStInG In AutoMAtIon

Spin chillers are used to reduce the internal temperature of products from approximately 34 to less than four degrees Celsius during processing. they are one of the largest pieces of equipment in our facilities.

We installed new immersion chillers at our primary processing facilities at Osborne Park in Western Australia and Tahmoor, New South Wales. Their benefits include:

• Providing a safer environment for our team by eliminating the need to load ice manually; and

• More rapidly lowering the product temperatures to provide a longer shelf‑life of products.

In Western Australia, the new equipment is expected to increase our production capacity to meet future demand within the state. It will also reduce water usage by up to 12 per cent by recirculating it and adjusting the water flow to accommodate the volume of product processed. This will save 35 million litres of water – the equivalent of 14 Olympic‑sized swimming pools – and enable cost savings of $90,000 per year.

This new immersion chiller technology also features at our primary processing facility at Somerville, Victoria.

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ouR neW SpIn
CHIlleRS ARe
SAFeR AnD
MoRe eFFICIent.
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8 INGHAM’S ANNUAL REPORT 2021

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OPERATIONAL HIGHLIGHTS
tHe neW DIStRIButIon CentRe At tRuGAnInA
In VICtoRIA WIll loWeR CoStS BY:
– BeInG CloSeR to tRAnSpoRt RouteS;
– ReDuCInG RelIAnCe on eXteRnAl StoRAGe; AnD
– IMpRoVInG eFFICIenCY WItH neW eQuIpMent.
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SupplYInG to DeMAnD

Ingham’s five‑year growth plan includes ensuring our geographically dispersed network continues to meet dynamic customer demands for our products.

In Victoria, we have invested in a bigger and better distribution centre to meet future growth. We are forecasting almost double production output from our Somerville primary processing facility.

Moving from our current Lyndhurst location, the new facility at Truganina is closer to our customers and to the rail network that supports our national distribution.

The new facility will also yield more than $35 million in savings over 15 years, based on costs, including transport and the comparative costs of maintaining an ageing facility.

In New Zealand, we are on track to complete the expansion and upgrade of the further processing facility at Auckland in December 2021.

New facility features include:

• A new oven, fryer, and freezer, enabling us to produce fully cooked, crumbed and battered products; and

• An automated palletising line allowing for higher throughput and a safer overall result for our people by reducing manual handling tasks.

Once complete, the facility will increase its output by around 35 per cent.

OPTIMISING FOR THE FUTURE 9

OPERATIONAL HIGHLIGHTS

GRoWInG ouR people

We want to create an inclusive environment where everyone is treated fairly and with respect. our leaders are instrumental in helping to shape our culture so our people can thrive.

In FY21, more than 170 leaders across Australia and New Zealand participated in our GROW program. This program is designed to support our frontline leaders – leading hands, supervisors, plant, production, farming and distribution managers – who are responsible for leading 90 per cent of our people.

The program focuses on building our leaders’:

• Self‑awareness and personal development;

• Communication and team development;

• Ability to positively engage their teams; and

• Astuteness to identify tangible ideas to operate more effectively to save time and money. It also focuses on strengthening collaboration and knowledge‑sharing across different sites.

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CReAtIVe CoSt‑SAVInG
IDeAS ARe SHAReD BY
ouR leADeRS ACRoSS
ouR opeRAtIonS.
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In New Zealand, the GROW program has received external accreditation by the New Zealand qualifications authority – Business Management Improvement New Zealand. They provide the external assessment to ensure the assignments are moderated to the New Zealand standard. This provides yet another opportunity for our people to grow their careers with national qualifications.

In addition, the ‘Homegrown’ personal development program in New Zealand has been successfully piloted with our frontline people. This program aims to help them set goals and be empowered to make decisions. It has resulted in promotions into roles, such as quality assurance and team leadership, providing clearer career paths where they can thrive in the organisation.

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ouR GRoW pRoGRAM pARtICIpAntS DeVelop tHeIR ABIlItY
to poSItIVelY enGAGe WItH tHeIR teAMS, IDentIFY IDeAS to
opeRAte MoRe eFFeCtIVelY, AnD CollABoRAte ACRoSS SIteS.
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ContInuouS IMpRoVeMent

In FY21, our Continuous Improvement team oversaw 200 active projects. these projects focused on improving processes and eliminating costs and waste from the business through the following projects.

The gas savings will reduce our carbon dioxide emissions by more than 300 tonnes per year and use the equivalent of eight weeks less gas than the previous year.

The Overall Equipment effectiveness model was rolled‑out across our value chain. This model aims to reduce the eight wastes identified through the lean manufacturing principles: defects, overproduction, waiting, non‑utilised skills, transport, inventory, motion and excess processing. An automated online reporting tool has also been developed and implemented to enable teams to access their real‑time results and focus on optimising our business for growth.

Creative ideas generated big results in our operations when we asked each leader to collectively identify and deliver $10 million in ongoing savings. This led to innovation‑ sharing across the group and ideas, including packaging changes to minimise tray breakages during transport and sorting storage areas to improve productivity when obtaining supplies.

The Primary Processing team at Te Aroha identified an opportunity to access geothermal bore water on the site. This enabled them to reduce gas usage by 15 per cent, reduce drawing on the town’s water supply by 20 per cent and save $320,000 per year.

The success of these projects is being driven at the frontline of our business. It is engaging our people to find and complete them. This means we’re entering FY22 with 320 projects identified to continuously improve the way we work.

10 INGHAM’S ANNUAL REPORT 2021

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OPERATIONAL HIGHLIGHTS
pRoDuCt pRIDe
We continued to excite
customers and consumers
with new product
innovations in FY21.
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InGHAM’S

Super Crunch – a world‑first coating system that delivers a deep‑fried taste straight from the oven

Bulk bag wings – satisfying demand for more from big households

Fresh tray packs – expanding our range across new retail customers to meet changing consumer needs due to COVID‑19

Free range schnitzel – introducing higher welfare alternatives to existing product ranges Branch Out plant‑based nuggets – expanding to our QSR, export and retail customers in Australia

Let’s Eat plant‑based range – new product offering in New Zealand, including nuggets, tenders and burgers

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QSR AnD FooDSeRVICe

Chicken potato cake – a twist on the familiar potato cake/scallop

Super Crunch and plant‑based nuggets – expanding into home delivery

Hot and crispy boneless pieces – adding the convenience of boneless products

Flow‑wrapped products and 9‑cut chicken pieces – introduced into the Petrol and Convenience channel

Spicy chicken burgers and pieces – expanding product ranges with quick service restaurants

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RetAIl

Roast and boneless roast – meeting family meal occasions

Southern style wings – capitalising on consumer trends

Chicken tenders and pops – for family snacking

Mini roast and split chicken – perfect for the barbecue season

Plant‑based nuggets – catering for meat‑reducers and plant‑based consumers

OPTIMISING FOR THE FUTURE 11

SUSTAINABILITY REPORT

SuStAInABIlItY RepoRt

Sustainability is core to our strategy.

At Ingham’s, sustainability means more than doing good for the environment. It is about doing good for our people, community, environment and business.

For more than 30 years, we have embedded sustainability into our business to become recognised industry leaders in water stewardship, sustainable agriculture and food production.

Our sustainability decisions are evidence‑based and scientific.

We work closely with our sites, suppliers and customers to identify environmental and social risks. Together, we investigate the options and test our assumptions through pilot projects. Measuring and evaluating these pilot projects enable us to use the learnings gained to implement the most effective and impactful projects across the business.

We invest in research. It underpins our ability to identify and develop innovative approaches that result in more sustainable practices, higher quality food safety practices, improved people safety and the highest animal welfare standards. We collaborate with our community, customers, suppliers and industry to help achieve our sustainability goals.

Our future is bright. We will continue to lead and challenge the industry to find innovative solutions to today’s sustainability challenges. Together, we will continue to do good for our people, community, environment and business. We will also continue to develop our short and medium term actions and challenge our set targets where we can.

FY21 SuStAInABIlItY At A GlAnCe

At Ingham’s, we are committed to sustainable business practices. We all contribute to making a positive impact on the environment, creating a safe and rewarding work environment for our people, accepting diversity and inclusion, and making a positive difference in our communities. The below highlights the advances in our sustainability strategy in FY21.

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people pRoDuCt plAnet
Improved LTIFR by 24% to 2.9 BRC accredited food safety – 95% Reduced absolute GHG emissions
Improved TRIFR by 25% to 6.1 of our sites achieved ‘A’ or ‘AA’ rating by 4.4% against previous year
at end of FY21
170 people attended ‘GROW’ Reduced water intensity by 4.5%
leadership development program Reported Key Animal Welfare against previous year
Indicators to Ingham’s Animal Welfare
Council and select customers
Improved senior leadership female Reduced landfill waste intensity
representation by 2% by 5.4% against previous year
Transitioned our primary processing
plant at Murarrie to 100% recycled
Employed 30 people on content for our main fresh product Launched 2030 GHG, water and
unemployment benefits through transport carton landfill targets
NZ ‘Te Heke Mai’ program
Launched 2025 packaging targets Launched our TCFD report and
Contributed to 844,950 meals outlined the phased approach to
through GivING program to Continuously improved product quality full disclosure
Foodbank, redirecting food destined and food safety – reduced complaints
for waste per million kg by 26% in FY21 Saved more than 100 million litres
of water through Bolivar Blue project
Reduced our use of antibiotics in
Enhanced paid pandemic leave policy
feed – no zinc bacitracin is used
for our people in FY21 and launched
COVID‑19 vaccination leave in FY22 in any of our broiler operations
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12 INGHAM’S ANNUAL REPORT 2021

SUSTAINABILITY REPORT

InGHAM’S HAS A lonG‑StAnDInG HIStoRY oF ADAptInG to tHe MARKet

This was demonstrated in FY21 by the dedicated and passionate teams across Australia and New Zealand, who adapted quickly to manage the impact of COVID‑19 on the business by ensuring a continuous supply of our quality products to customers. While this period of uncertainty challenged our people, we focused on keeping our company running, our people employed and supporting our local communities. We also leant in to ensure the health and safety of our people remained our priority. We continue to take an agile approach to how we manage the business today and sustain it for the future.

Despite the challenges throughout the year, our teams have made good progress in several key areas across our sustainability strategy.

• In FY21, we set 2030 Planet Targets, including a commitment to set Science Based Targets (SBT) for Scope 1 and Scope 2 Greenhouse Gas (GHG) emissions based on the 1.5°C Pathway. By 2030, we plan to reduce:

• Scope 1 and Scope 2 absolute GHG emissions by 43 per cent[ 1] against a FY19 baseline;

• Water intensity (kL/T) needed to process our products by 20 per cent against a FY19 baseline; and

• Waste to landfill intensity (kg/T) by 20 per cent against a FY20 baseline[ 2] .

• This report outlines our phased approach and our work towards aligning to the Task Force on Climate‑Related Financial Disclosures (TCFD) recommendations. Refer to page 28;

• We have adapted our sustainability strategy and approach to align with the goals of the Paris Agreement;

• We have also made continued positive progress towards reducing our environmental footprint across Ingham’s operations in FY21. Our measures include GHG emissions, water usage and landfill waste generation, which have all improved year‑on‑year;

• We have set 2025 targets for Ingham’s packaging. These align with the Australian Packaging Covenant, Australian National Packaging Targets and New Zealand Plastic Packaging Declaration;

• We continue to take a leadership role in animal welfare with the launch of Key Animal Welfare Indicators incorporating 15 outcome‑based welfare measures. These are reported both internally and shared with customers;

pRoGReSS on ouR SuStAInABIlItY AGenDA

In FY21, we worked on several strategic initiatives across the business. Sustainability is core to our strategy both in how we operate and how we grow. As we work towards the future, our strategic initiatives will be underpinned by our commitment to our sustainability focus.

Our sustainability focus addresses our commitment to deliver positive economic, environmental and social outcomes in the following areas:

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AnIMAl WelFARe

ClIMAte CHAnGe ADAptAtIon AnD ReSIlIenCe

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WAteR SteWARDSHIp

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SuStAInABle AGRICultuRe

enVIRonMentAl CoMplIAnCe AnD peRFoRMAnCe

lABouR pRACtICeS AnD SAFetY

• We released our Modern Slavery Statement in March 2021, which can be located on our website; and

• To protect the wellbeing of our people and communities across Australia and New Zealand, we introduced an industry‑first policy at the start of FY22 to provide a three‑hour leave payment to our people to cover their absence while receiving each of their COVID‑19 vaccinations.

SuStAInABle pRoCuReMent

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In FY22, we will continue to develop Ingham’s sustainability strategy to support and challenge our targets while increasing our transparency with improved reporting of these initiatives.

1 Scope 1 & Scope 2 SBT subject to change pending Science‑Based Targets initiative (SBTi) validation. 2 Complete dataset for Landfill Waste only available from 2020.

OPTIMISING FOR THE FUTURE

13

Work safe and go home safe, every day.

14 INGHAM’S ANNUAL REPORT 2021

people

lABouR pRACtICeS AnD SAFetY

At Ingham’s, our team of 8,000 people are at the forefront of our purpose.

We aim to provide them with a high‑performing, supportive, safe work environment. We do this by ensuring we have the right people with the right capabilities, building a constructive culture that supports higher engagement and performance, and investing in developing our leaders’ capabilities. Combined, our aim is for our people to deliver higher performance to sustain our competitive advantage.

WoRK SAFe AnD Go HoMe SAFe, eVeRY DAY

loSt tIMe InJuRY FReQuenCY RAte (ltIFR)

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FY19
FY20 3.8
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FY21 2.9

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5.7
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The health, safety and wellbeing of our people will always come first.

Safety is integral to everything we do and we are committed to a vision of zero harm. This includes our team taking responsibility for their actions and understanding, implementing and complying with Ingham’s established Work Health and Safety Management System (WHSMS) and procedures covering our operations across Australia and New Zealand, and is subject to rigorous audits.

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SAFe
SYSteMS
ZeRo HARM
SAFe safety for life
SAFe
WoRKplACe
BeHAVIouR
eQuIpMent
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Our Safety for Life program provides the foundation for improving safety performance across our business. It is underpinned by goals supporting risk reduction, safety management systems, safe behaviours and injury management. It is a multi‑faceted program that guides our sites when completing Safety Walks, Hazard Inspections, Toolbox Talks and our Procedural Compliance Inspection and Auditing program. To reinforce the importance we place on work health and safety, considerable time was also spent promoting positive behaviours across our worksites and rewarding the ‘good’ things our teams are doing.

totAl ReCoRDABle InJuRY FReQuenCY RAte (tRIFR)

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FY19
FY20 8.1
FY21 6.1
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9.8

At the end of FY21, we had progressed above our set targets towards achieving our Safety for Life goals. Our company‑wide safety performance also materially improved for the second consecutive year. Our Lost Time Injury Frequency Rate (LTIFR), per million hours worked, reduced by 24 per cent to 2.9 and the Total Recordable Injury Frequency Rate (TRIFR), per million hours worked, reduced by 25 per cent to 6.1 compared to the FY20 results.

On 17 May 2021, one of our people tragically died in a truck incident at our South Australian Bolivar site. We are assisting SafeWork SA with their ongoing investigations.

As an essential food production business, during the COVID‑19 pandemic, we have taken additional steps to support and protect our people’s wellbeing and operational continuity. In FY21, we enhanced the paid pandemic leave introduced earlier in FY20, extending additional paid days off work for our people (including casuals) when they needed to get tested and self‑isolate or care for someone affected by COVID‑19. In early FY22, we also introduced paid vaccination time to remove barriers to people getting access to COVID‑19 vaccinations.

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ouR pRInCIpleS oF BeInG
open, HoneSt AnD
CollABoRAtIVe Set tHe
tone FoR ouR CultuRe
AnD WHAt We CARe ABout.
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ouR CultuRe JouRneY

Ingham’s principles of being open, honest and collaborative guide our thinking, ways of working and decision‑making. In a nutshell, they set the tone for our culture and what we care about.

In FY21, our Culture Survey benchmarked and identified actions we could take to move to a more constructive culture, one where our people feel valued and empowered to thrive and contribute to achieving our strategic growth plan.

Actions through the year included:

• Recognising and celebrating our people for high performance and living our purpose and principles through quarterly ‘Nourish Awards’;

We have a range of policies and procedures in place that are overseen by the Ingham’s Board. These include our Equal Employment Opportunity Policy, anti‑bullying procedures, and Whistleblower Policy.

Our labour practices ensure our workplace remains fair and equitable. Ingham’s directly‑employed people in operations are typically covered by the terms of negotiated enterprise agreements in Australia and collective agreements in New Zealand. These agreements allow us to provide modern, transparent, productive and flexible employment arrangements for our people. Our labour practices, including how we manage the standards in our supply chain, are further outlined in Ingham’s Modern Slavery Statement, available on our website.

• Hosting company‑wide Town Halls via our communications application ‘Workplace’;

• Engaging culture champions throughout the business to ensure our people’s voices are heard at all levels and ideas shared;

• Increasing awareness and capability regarding constructive leadership through programs such as the ‘GROW’ frontline leader program and other bespoke organisational development activities for teams and leaders; and

• Developing company‑wide learning programs to help our people behave and communicate constructively, including programs that focus on courageous and ‘above‑the‑line’ conversations that respect and encourage each other.

Ingham’s principles of being open, honest and collaborative guide our thinking.

16 INGHAM’S ANNUAL REPORT 2021

CAReeR leADeRSHIp AnD DeVelopMent pRoGRAMS

More than 170 leaders across Australia and New Zealand have participated in our bespoke leadership development program, ‘GROW’. This program targets our frontline leaders, who lead 90 per cent of our people. GROW has been designed to help our frontline leaders better understand their strengths and development areas and build skills to lead and engage their teams more effectively. The program provides our leaders with exposure to different parts of the business and enables greater knowledge sharing and collaboration across our many functions and sites.

DeVelopMent AnD tRAInInG pRoGRAMS AIMeD At FRontlIne eMploYeeS

‘Homegrown’ is a personal development program in New Zealand aimed at frontline employees. It is designed to help our people set goals and empower them to make decisions. This has resulted in promotion into roles, such as quality assurance and team leadership, and provided the program participants with a clearer career path to thrive in the organisation.

Examples of learnings in this module include being more self‑aware regarding unconscious bias, showing different types of bias, whether they are conscious or subconscious, and how this impacts the way we see the world and interact with people. In recognising the diversity of our people, we often translate important messages into other languages. This includes communication of policy updates, training materials, information on work conditions during enterprise agreement negotiations and announcements to teams.

Our people have access to our internal communications application, Workplace. This platform allows them to tailor their profile in 91 different languages. We also provide translated communications in the top eight languages to ensure our people can quickly identify with key company communications.

In New Zealand, we started two initiatives. The Ministry of Social Development helped five people with disabilities begin employment in our farming operations. Plus, through our alignment with the Te Heke Mai program, we employed 30 people on unemployment benefits at our Te Aroha primary processing plant over the past year.

Company‑wide, we celebrated diversity and inclusion during Pride month. We also recognised First Nations people during Manaaki month in New Zealand and National Reconciliation and National Aborigines and Islanders Day Observance Committee (NAIDOC) Weeks in Australia.

eQuAlItY, InCluSIon AnD DIVeRSItY enABlInG ouR puRpoSe

We are committed to creating an inclusive and equitable work environment where everyone is respected, and we value and celebrate our differences. Our approach to evolving inclusion and diversity across our business is outlined in our Inclusion and Diversity Strategy. In FY21, we made further progress by developing new initiatives and setting additional targets.

We trialled a partnership with disability employment service providers in Queensland as part of our resourcing plan. This initiative had positive results, and we are working with a number of agencies to provide employment to people with disabilities in our primary processing, distribution centre and farming teams.

We included a module on fostering an inclusive workplace in our GROW program. This helps our frontline leaders to understand the important role they play in creating an environment where their people are valued and respected.

DonAtIonS

GivING is our corporate program of sponsorships and donations. It aligns with our purpose to ‘Nourish our World’, reflecting our commitment to making a positive difference.

In FY21, this included:

• Signing a national agreement with Foodbank in Australia to donate food products that would previously go to waste. Over the year, this contributed to 844,950 meals.

• Committing to provide $150,000 per year over three years to the Ingham Institute for Applied Medical Research in support of research for new medical treatments and therapies in hospitals and health programs for the community.

• In support of Tour de Cure, and with generous donations from our people and their friends and family, raising $22,408 for the research, prevention and support of families fighting cancer in addition to our $65,000 contribution as a Platinum Sponsor in the ‘Woolies Wheels and Walks’.

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ouR ‘HoMeGRoWn’ pRoGRAM
DeVelopS ouR FRontlIne people to
eMpoWeR tHeM to MAKe DeCISIonS.
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We are proud to provide the very best product standards, from farm to table.

18 INGHAM’S ANNUAL REPORT 2021

pRoDuCt

At Ingham’s, quality, sustainability and animal welfare are at the forefront of our priorities. We’re proud of our commitment without compromise to the highest possible product standards, a culture of continuous improvement and a passion for always providing the very best, from farm to table.

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SuStAInABle pRoCuReMent Sourcing sustainably

Our Product Pride program provides the framework to deliver a world‑class quality culture across our business.

The program consists of five strategic pillars:

1. Risk Reduction Strategies

2. Hazard Analysis Critical Control Point (HACCP)

3. Best Practice Support Programs

4. Standards and Procedures

5. Leadership, Communication and Learning

The ongoing focus by our teams on quality and leveraging the program resulted in reducing ‘complaints per million kg’ by 26 per cent on the previous year. It also supported the achievement of 95 per cent of our sites achieving ‘A’ or ‘AA’ grade BRC Food Safety Standard certification as of end FY21. We continue to work towards achieving the highest levels of accreditation at all of our sites.

tIeR 1 SupplIeR BReAKDoWn BY loCAtIon (BY nuMBeR oF VenDoRS)

Our sustainable procurement practices, and importantly, the expectations we have for our operations and supply chain, are covered in our Modern Slavery Statement and Supplier Code of Conduct.

Our Modern Slavery Statement for FY20, released in March 2021, included a number of key improvements:

• The introduction of a Whistleblower Policy;

• The inclusion of a Modern Slavery clause in our supply agreement templates; and

• The roll‑out of our Supplier Code of Conduct with a solution to assess risks across our entire supply chain.

We have high ethical standards across our operations. The new Supplier Code of Conduct extends these standards to our more than 4,000 direct suppliers (Tier 1) who are a critical aspect of our supply chain. It includes expectations regarding human rights, the environment, ethical practices aligned to legal requirements and other policies, and international good practice. We will also develop and implement a Supplier Assurance Program.

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AuStRAlIA 78%
neW ZeAlAnD 20%
unIteD StAteS oF AMeRICA 1%
euRope 1%
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SupplY CHAIn KeY RISK AReAS AnD CuRRent ACtIonS

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RISK AReAS RISK DRIVeRS CuRRent ACtIonS
• We conducted audits to assess labour practices within our supply
chain and to ensure appropriate rates were paid to workers.
Service categories • Modern Slavery clause is included in contracts for new business suppliers.
(e.g. cleaning, Labour intensive
contractors, contingent categories • Ongoing spot audits will be completed across these categories.
labour hire)
• Supplier Code of Conduct to outline the expectations of our Tier 1 suppliers
to ensure appropriate measures are in place for the locations from which they
are sourced.
Electronics Possible risk of forced
industry labour in the industry • Supplier Code of Conduct will outline the expectations of our Tier 1 suppliers to
ensure the appropriate measures are in place for the locations from which they
are sourced.
Personal protective Possible risk of
equipment (including exploitation of labour in • We will complete a desktop audit of high‑risk suppliers and categories.
uniforms) garment manufacturing
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SuStAInABle pACKAGInG

Equally important to our sustainable procurement initiatives and reducing our impact on the planet is our packaging sustainability. We are well‑advanced in implementing the use of packaging that is 100 per cent reusable or recyclable.

Our target is to increase the average recycled content in our packaging to at least 50 per cent by 2025. We achieved the following sustainable packaging improvements in FY21:

• We transitioned our primary processing plant at Murarrie, Queensland to 100 per cent recycled material for our main fresh product transport cartons. Remaining primary processing sites are planned for transition during FY22;

• 40 per cent of our plastic trays in Australia are now kerbside recyclable with the balance targeted to be recyclable by the end of FY22; and

• The inner plastic bags in our frozen product cartons sold in Australia now contain a minimum of 20 per cent recycled content (post‑industrial recyclate).

Our packaging targets and progress towards them are shown in the table below. They focus on increasing the recyclability and the recycled content of Ingham’s packaging. These targets align with the 2025 targets set by the Australian Packaging Covenant of which Ingham’s is a signatory.

	2025 Packaging Targets	Ingham’s progress in FY21
	100% reusable, recyclable or compostable packaging	>90%
	50% average recycled content included in packaging	>30%

20 INGHAM’S ANNUAL REPORT 2021

AnIMAl WelFARe

We continue to work towards being recognised as a leader in animal welfare.

The health and wellbeing of the animals in our care has always been a fundamental part of our business, and we have a strong ongoing commitment to the continuous improvement of animal welfare. In FY21, we enhanced our welfare performance monitoring and governance processes.

Based on standards published by AssureWel and Bristol University, we developed Key Animal Welfare Indicators. These indicators incorporate 15 outcome‑based welfare measures focusing on the comfort of the bird. These KPIs are used across our Australian and New Zealand operations and enable us to closely track, measure and report our performance. Our internal Animal Welfare Council reviews our performance quarterly to monitor compliance and identify any projects to improve animal welfare.

We have invested in improving animal welfare at our new hatchery at Pakenham in Victoria by implementing HatchTech incubation technology. This technology gives chicks light, food and water from the moment they hatch. Now fully operational, we have seen positive results, with a 15 per cent improvement in seven‑day chick weights over traditional hatchery performance.

We have invested in improving animal welfare at our new Pakenham Hatchery in Victoria by implementing HatchTech incubation technology. This technology gives chicks light, food and water from the moment they hatch.

The commissioning of our new hatchery in Western Australia, which will also use HatchTech incubation technology, is scheduled to be operational by the end of 2021.

Our commitment to antibiotic stewardship continues under the direction of our Antibiotic Stewardship Council. No antibiotics used in human medicine are used prophylactically in any of our operations. Therapeutic antibiotics are only used under veterinary supervision and where necessary for animal health and welfare.

To ensure our standards are best practice and customers can trust the products they are buying, we align our business with organisations whose key focus is on animal welfare, such as the RSPCA, Free Range Egg & Poultry Australia and SPCA (NZ).

We also conduct animal welfare training and research through:

• Participation in outcome‑based industry‑led research welfare projects specific to Australasia using Ingham’s Research and Innovation Farm in Queensland and providing services and operations in collaboration with the AgriFutures Chicken Meat Research Program.

• Renewed focus on education and training, including developing an internal Poultry Welfare Officer training program led by our veterinarians and external training for our people in both the Agribusiness and Processing sectors in conjunction with AgriFutures and MINTRAC.

The Bulimba Creek Catchment Coordinating Committee inspect a barn owl nest box at the grasslands surrounding Murarrie’s ponds, just some of the wildlife that has returned following the ponds’ rejuvenation.

22 INGHAM’S ANNUAL REPORT 2021

plAnet

Ingham’s has announced our 2030 planet targets, including Science Based targets (SBt) for GHG emissions. our SBts will be in line with the latest climate science to meet the goals of the paris Agreement. our Scope 1 and Scope 2 emissions SBt will be based on the 1.5‑degree pathway. these targets reflect our ongoing intent to manage sustainable environmental practices.

ouR 2030 plAnet tARGetS ARe:

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GoAlS InGHAM’S tARGet
GHG Science Based Targets Reduce Scope 1 and Scope 2 absolute GHG emissions by 43%
(tCO2e) by 2030 against a FY19 baseline. [1]
Water Usage Reduce the water intensity needed to process our products by 20%
(Kilolitres per tonne of product) by 2030 against a FY19 baseline.
Waste to Landfill Reduce waste sent to landfill intensity by 20% by 2030 against
(Kilograms per tonne of product) a FY20 baseline. [2]
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enVIRonMentAl CoMplIAnCe AnD peRFoRMAnCe Our environmental performance and compliance

We are pleased to report that there was continued positive progress towards reducing our environmental footprint across operations in FY21. Our measures include GHG, water usage and landfill waste generation.

The graphs below show year‑on‑year improvement in all areas.

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ABSolute GHG eMISSIonS KG Co e
2
FY19 240,276
FY20 237,468
FY21 226,910
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lAnDFIll WASte (KG/t)

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FY20 5.71
FY21 5.40
WAteR Kl/t
FY19 2.95
FY20 2.87
FY21 2.74
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Note: GHG emissions are those from energy use and landfill waste generation at the Ingham’s sites.

1 Scope 1 and Scope 2 SBT subject to change pending Science Based Target initiative (SBTi) validation. 2 Complete dataset for landfill waste only available from 2020 (FY20).

OPTIMISING FOR THE FUTURE 23

a By the end of FY21, total of 261,631 cups were collected for upcycling from our sites since we introduced the Simply Cups program.

All Ingham’s sites maintain a bespoke environmental Management plan detailing environmental compliance, risk management and sustainability.

This has been independently reviewed as being aligned to ISO 14001:2015 standard requirements. Each site continually looks for measures to improve.

Their initiatives during FY21 have contributed to improved environmental performance:

• Our Procurement, Feedmill and Farming teams in Western Australia improved the efficiency of the freight network that delivers feed to the farms when they introduced a larger trailer configuration. The reduced truck movements resulted in greenhouse gas emissions being reduced by 71 tonnes per annum.

• Contributing to our sustainability journey, the Distribution Centre team in Waharoa, New Zealand, completed a refrigeration system upgrade, which replaced refrigeration equipment that was 50 years old and had become inefficient and costly to maintain. The upgrade did not disrupt operations and improved energy efficiency by 30%.

• By challenging an existing process, our team at the further processing plant in Edinburgh Parks, South Australia, saved 5.7 million litres of water, or more than two Olympic‑size swimming pools. Using technical information and following an appropriate risk assessment, they eliminated the use of water previously used to cool oven door seals on site.

• Three of our sites – North Ryde and Lisarow in New South Wales and Bolivar in South Australia – have participated in the national program, Simply Cups. The program diverts used disposable coffee cups from landfill and upcycles the waste to produce items of higher value, such as outdoor furniture, road surfacing materials and reusable drink cups. By the end of FY21, a total of 261,631 cups were collected for upcycling from our sites since we introduced the program.

While we undoubtedly made solid progress over the year on our sustainability journey, and there were numerous examples of improved practices across our operations, we acknowledge we can do better.

In FY21, we received a caution or formal warning from the respective environmental regulators in New South Wales and New Zealand following raw wastewater spill incidents at our Tahmoor and Te Aroha sites. As licence holders, we take our regulatory responsibilities seriously and we quickly fixed the issues. Where applicable, we will implement the same improvements at other Ingham’s sites.

CASe StuDY

eCoSYSteM ReStoRAtIon IMpRoVeS WIlDlIFe HABItAtS

This year, United Nations launched its Decade of Ecosystem Restoration program on World Environment Day. The program aims to prevent, halt and reverse ecosystem degradation on every continent and in every ocean. Healthy ecosystems are essential to sustaining us with resources that nourish people and our way of life.

Ingham’s primary processing team at Murarrie, Queensland, have demonstrated the value of biodiversity restoration projects. Over the past 18 months, they successfully rejuvenated five disused water treatment ponds on the site by redirecting the flush water from the site’s own Advanced Water Treatment Plant (AWTP) to the ponds.

While disused, the ponds had been exposed to the extreme conditions of drought that led to stagnant and mosquito‑infested water and invasive weeds. Subsequent significant rainfall events resulted in the ponds deteriorating further, and site surveys showed minimal natural wildlife.

Under this project, the ponds’ bases and walls were restored, and the depths increased, improving their overall capacity by 50 per cent. The engineered overflow and fill pipe system allowed water wildlife to move through the pipe system and between the ponds on the site. The overflow water flows off‑site to the freshwater swamplands on adjacent Council‑owned property. Most notably, through the joint efforts of Ingham’s and partners, the rejuvenation program has improved the wildlife habitats on the site and in surrounding areas.

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24 INGHAM’S ANNUAL REPORT 2021

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CASe StuDY eDInBuRGH pARKS teAM plAntS 700 tReeS to IMpRoVe BIoDIVeRSItY

Our team at Edinburgh Parks collaborated with Salisbury Council in a biodiversity project and planted 700 trees in the Burton West Industrial Drain, which forms part of a 100‑hectare Edinburgh Biodiversity Corridor.

The corridor is an engineered drainage system that passes through several suburbs before entering the Bolivar Wastewater Treatment Plant. Along the way, the watercourse goes through five constructed wetlands, including Kaurna Park Wetland, that removes contaminants and improves the water quality.

The trees have helped to revegetate the area and provide great habitats for a variety of birds, reptiles and insects, including locally threatened fauna species, as well as link habitats along the corridor.

The 700 trees planted are native to the Northern Adelaide Plains and include aquatic species, groundcovers, grasses and shrubs.

We are proud to be participating and contributing towards nourishing our world by improving the biodiversity and ecosystem in our local community.

CASe StuDY

InnoVAtIVe IDeAS DIVeRt WASte FRoM lAnDFIll

At Ingham’s, we encourage our people to be collaborative by working together to explore new possibilities. Collaboration by our teams at the Hemmant and Wacol Feedmills in Queensland and our Distribution Centre at Dry Creek in South Australia led to two excellent outcomes for waste reduction, reuse and recycling.

Each year, the Hemmant and Wacol Feedmills sent more than 5,000 polypropylene bags to landfill, which take years to break down. They now partner with a local recycling business, PRC Recycling, to convert the plastic bags to small black pellets for use as raw materials to manufacture polypropylene plastic products, such as safety hard hats, which are standard personal protective equipment at Ingham’s feedmills. This sustainable closed‑loop solution has also delivered annual savings on waste disposal costs.

The Distribution Centre team at Dry Creek has achieved zero waste to landfill, with the further benefit of reducing the overall energy footprint in the local area. Achieved through the support of the SUEZ‑ResourceCo Alternative Fuels facility, all general waste from Ingham’s Dry Creek site is used to manufacture processed engineering fuel (PEF), a viable alternative to fossil fuel. The PEF is then supplied to a local cement manufacturer for use in cement kilns, displacing a proportion of its fossil fuel use.

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SuStAInABle AGRICultuRe

Sustainable agriculture practices reducing our footprint

Ingham’s participates in the local chapter of the global Sustainable Agriculture Initiative (SAI). We support their vision of a sustainable, thriving and resilient agricultural sector that protects the Earth’s resources, human rights and animal welfare.

Ensuring our feed ingredients are sustainable is a key focus area for Ingham’s. We are working with a range of research groups on an alternative protein meal strategy to reduce our reliance on soy‑based products. In addition, we are working with suppliers to ensure that future supplies of soy meal do not contribute to deforestation. This will be a key action with goals set in line with Ingham’s SBTs in 2023.

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WAteR SteWARDSHIp

As a member of the Alliance for Water Stewardship (AWS) Global Standard, whose aim is to achieve responsible and sustainable water management, we have committed to proactively manage our water catchment, usage and treatment of wastewater. Proudly, we continue to set the industry benchmark for water stewardship, being the only certified poultry processor in the world.

We undertook our annual audits remotely at four sites in FY21. We are delighted that four of our primary processing sites – Bolivar, Murarrie, Somerville and Te Aroha – are part of the worldwide group of 162 certified to AWS standards. The Murarrie and Somerville sites achieved the highest recognition with platinum certification.

At the primary processing plant at Murarrie, several water stewardship projects completed over the past 12 months delivered great benefits and platinum recognition. We rejuvenated six of the site’s ponds, so they now hold 60 million litres of water and provide a fantastic habitat for the local wildlife. The volume of on‑site wastewater treatment plant’s sludge has also been reduced over three years and the site’s water consumption by one‑third.

CASe StuDY

WAnneRoo FeeDMIll’S WAteR InnoVAtIon

Every year, the West Australian Water Corporation recognise and celebrate the water efficiency achievements of businesses.

In FY21, we were delighted that Ingham’s Wanneroo Feedmill operations were awarded the Platinum Waterwise Business of the Year, the highest recognition, for their innovative water management and industry‑leading best practices on site.

Under the site’s Environmental Management Plan, the team set actions towards their Planet Key Performance Indicator targets. They then identified and implemented a range of innovative water savings and efficiency measures. These included water‑efficient fixtures, checking for leaks and using fit‑for‑purpose recycled water that contributed to reducing water usage by more than 40 per cent from the previous year.

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CASe StuDY

BolIVAR Blue pRoJeCt’S WAteR SAVInGS

Our primary processing plant at Bolivar, South Australia has set the standard in sustainable water usage for our processing operations, reducing their annual water usage intensity by more than 10 per cent. This site is one of Ingham’s largest processing plants and uses almost 20 per cent of all water consumption. It is also one of four Ingham’s sites certified to the international Alliance for Water Stewardship (AWS) standard for sustainable and responsible water management.

The Bolivar Blue Project is a great example of water stewardship by the Bolivar team. Through the project, they challenged the status quo, existing norms and behaviours, and investigated opportunities to reduce water usage, including using trigger handles on water hoses and reducing the run‑time on high pressure washers.

The result was a saving of 120 million litres of water. The team is working to achieve its target of 200 million litres.

26 INGHAM’S ANNUAL REPORT 2021

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ClIMAte CHAnGe ADAptAtIon AnD ReSIlIenCe

Our resilience to climate‑related impacts that may affect our business continuity was assessed in 2019. The potential climate risks and the recommended mitigation actions are now on the agenda for meetings of the Board’s Risk & Sustainability Committee (R&SC), along with other business risk discussions, and related actions have been developed.

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CASe StuDY te ARoHA’S eneRGY‑SAVInG BoRe WAteR

Growth at our primary processing plant at Te Aroha, New Zealand, has meant that its water usage has also increased over the years. Following the site’s certification to the Alliance for Water Stewardship (AWS) standard in 2017, the site has built a bore water treatment plant to supplement the existing town water supply, which started in February 2020. Having two water sources secures the future growth of our New Zealand business and continued operation through droughts, experienced more frequently in recent decades.

Due to the location of the site, bore water is geothermal at approximately 30 degrees Celsius. This was both a challenge and an opportunity, as the plant requires the water to be chilled for product processing but also uses a large volume of hot water for cleaning each night. The site has installed a heat recovery system to capture the heat from the bore water and transfer it to pre‑heat the incoming water (a blend of both town water and bore water) before it enters the boiler system that produces hot water.

that We recognise climate change is one of the most significant challenges facing the world today.

ClIMAte‑RelAteD FInAnCIAl DISCloSuRe

The Financial Stability Board’s Task Force on Climate‑related Financial Disclosures (TCFD) develops recommendations for more effective climate‑related financial disclosures. This allows investment, credit and insurance stakeholders to make more informed decisions by better understanding carbon‑related assets and the financial system’s exposure to climate‑related risk.

To improve our stakeholder’s understanding, we have disclosed our climate‑related risks and opportunities in alignment with the TCFD’s recommendations for the first time in this report.

We recognise that climate change is one of the most significant challenges facing the world today. It presents serious social, economic and environmental risks to the planet. As a business that relies on healthy ecosystems to bring food to our communities, we are acutely aware of the need to understand and mitigate these risks to continue to ensure the best nutrition and welfare of our animals and to nourish our communities with quality food.

When referring to risks, this includes physical risks from climate change following an acute event or longer‑term shifts in the climate that may have financial implications because of damage to physical assets. For example, Ingham’s hatcheries, farms and processing facilities; the welfare of our animals; or indirect impacts such as supply chain disruption. Financial performance may also be affected by climate change reducing water availability and extreme temperature impacting our physical space, operations, supply chain, transport needs or our people’s safety.

Transition risks from the move to a low‑carbon economy may result from extensive government policy and legal, technological and market changes. Despite this, we support the need for action to limit global temperature rise to 2 degrees Celsius or less from pre‑industrial levels.

To assess and mitigate risk, we will undertake scenario analysis to better understand climate change risk to the organisation. This will consider the impact of a low and high emissions future, aligned to the Intergovernmental Panel on Climate Change’s RCP2.6 and 8.5 respectively, on physical and transition risks and opportunities.

The following table details a phased approach to our reporting against the TCFD’s recommended disclosures.

This innovation reduced the site’s energy required to power the hot water system. It also reduced reliance on the town water supply, safeguarding continued and sustainable operation of our primary processing plant.

OPTIMISING FOR THE FUTURE 27

pHASeD AppRoACH – InGHAM’S RoADMAp to ClIMAte‑RelAteD FInAnCIAl DISCloSuReS

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pHASe 1 pHASe 2 pHASe 3
(FY21) (FY22‑24) (FY25+)
GoVeRnAnCe Describe the Board’s Describe who is responsible for
oversight of climate‑related climate‑related risk mitigating
risks and opportunities. actions as it relates to the plans
outlined on page 29
Describe management’s role
regarding TCFD
in assessing and managing recommendations.
climate‑related risks and
opportunities.
StRAteGY Describe risks and Describe the company’s Describe climate‑related
opportunities from climate material transition risks and opportunities on
change (physical climate‑related risks the organisation’s business,
and transition). and opportunities. strategy and financial
planning.
Describe scenario analysis,
including a 2‑degree or Include climate‑related
lower scenario. risks in a resilience strategy.
RISK MAnAGeMent Describe the approach Describe the organisation’s Describe how processes
taken to identify and processes for managing for identifying and managing
manage climate risk. climate‑related risks. climate risk are integrated into
broader risk management
procedures.
MetRICS AnD Describe metrics used to Describe Scope 1, 2 and Describe how remuneration
assess climate‑related risks. 3 emissions. is tied to emissions.
tARGetS
Describe Scope 1 and Describe the associated
2 emissions. risks with each scope.
Describe mitigation and
emission reduction strategy.
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We rely on healthy ecosystems to bring food to our communities, and we are acutely aware of the need to understand and mitigate climate-related risks.

28 INGHAM’S ANNUAL REPORT 2021

The table below summarises how we are working towards disclosure aligned to TCFD recommendations.

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tCFD
ouR AppRoACH
ReCoMMenDAtIonS
The Board’s Ingham’s Board and our Risk and Sustainability Committee (R&SC) are responsible for overseeing
oversight of climate‑related risk management. The Board authorises the R&SC to assist it to fulfil its statutory
climate‑related risks and regulatory responsibilities.
and opportunities Page 40 of this report details the Committee’s responsibility for economic, environmental,
(including climate risk), social sustainability and governance risks.
The Committee meets quarterly to fulfil its role and take the following actions:
• Address climate change risk including physical and transitional risks.
• Assess progress against targets and commitments made in Ingham’s Sustainability Strategy from
2019 to 2030.
See the R&SC Charter on our website for more information on our governance structure.
Management’s Assessing and managing climate‑related risk is included in our sustainability strategy and available
role in assessing at Our Purpose – Planet at https://inghams.com.au/our-purpose/planet/ . This is overseen by Ingham’s
and managing R&SC, which works with management to address climate risk with actions.
climate‑related risks
Climate risk (both physical and transition) and associated adaptation plans are included as a standard
and opportunities
agenda item and, moving forward, will be reviewed at the quarterly R&SC meetings.
Existing tools being used or planned to be implemented to manage and monitor progress against
climate risk actions include:
• Envizi – to measure emissions monthly for Scope 1 and 2.
• Sustainability Action Plan – includes progress on site‑specific targets for areas such as GHG,
water, energy and waste.
• Business Continuity Plans.
• Environmental incident reporting – used by site teams and systems to respond to emergency issues,
including climate‑related impacts/events.
Key areas of underperformance are escalated to the R&SC.
Impacts of Our purpose and principles are aligned to our objective to deliver consistent and reliable returns to our
climate‑related stakeholders. This is only possible in a future where climate change risk has been identified and mitigated.
risks (opportunities This includes our role to protect the planet by understanding climate change risk and mitigation.
and threats) on
An initial list of potential transition and physical risks and opportunities identified though high‑level analysis
organisation’s
are summarised in the table on ‘climate‑related risks and opportunities’.
businesses,
strategy and We recognise the difference between physical and transition risks facing Australian and New Zealand
financial planning operations. Particularly with the different regulatory requirements in each country influencing action on
transition risks.
We will undertake a review, including scenario analysis of transition risks, to identify those most relevant
to the organisation in Phases 2 and 3.
In 2019, we undertook a detailed, site‑level climate change risk assessment across a representative
sample of sites. Further review of potential physical risks will be part of Phase 2.
We will consider potential risk in our business planning through a deeper understanding of
investor/stakeholder concerns and feedback.
Resilience of Our plans to undertake quantitative scenario analysis in Phase 2 of the roadmap, based on a low‑emissions
organisation’s and high‑emissions scenario, including considering a 2‑degree or lower scenario. This is a crucial step to
strategy, taking into fully understand the impact of climate change on the business and our ability to continue to protect animal
account different welfare and nourish our communities. Phase 3 will aim to demonstrate the financial exposure of the
climate scenarios, organisation under these two scenarios.
including 2‑degree
This work will go beyond disclosure to influence future decisions and enhance our education on
scenario or lower
sustainability risk mitigation.
GoVeRnAnCe
StRAteGY
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OPTIMISING FOR THE FUTURE 29

tCFD ReCoMMenDAtIonS

Processes for identifying and assessing climate‑ related risks

ouR AppRoACH

Our Board and R&SC have ultimate responsibility for the organisation’s climate‑related risk management identification and strategy and liaise on relevant matters with the Finance & Audit Committee (F&AC) and People & Remuneration Committee (P&RC).

To inform climate change resilience, we undertook a Climate Change Risk Assessment across representative sites. The key recommendations from this assessment have been applied company wide to improve our business resilience against the effects of climate change. We have also completed Life Cycle Assessments to assess feed sustainability.

Transition risk

Our Sustainability Strategy addresses several aspects of climate transition risk, including:

• GHG Emissions Reduction. SBTs will be incorporated into our 2030 Sustainability Strategy:

• Reducing energy intensity through efficiencies.

• Monthly monitoring of Scope 1 and 2 emissions.

• Reviewing renewable energy options.

• Sustainable Procurement Strategy. Supplier Code of Conduct to establish expectations around environmental practices.

• Sustainability Action Plan (SAP) Framework. As part of our Environmental Management Plan, SAPs are used to set annual site‑specific targets for sustainability focus areas (water, energy and waste) and record and monitor actions.

• Waste reduction. Data collection on landfill waste has been improved to capture 99% of data, creating a credible starting point against which to benchmark and measure future performance.

Physical risk

• Climate resilience. Site facilities and operations, which have been identified as at or above ‘high risk’ to physical impacts of climate change are monitored through our risk registers.

• Optimised water consumption to build drought resilience. We have pioneered a sustainable water management strategy through an international Alliance for Water Stewardship (AWS) framework.

• Undertaking education and training of management and key teams related to climate risk mitigation.

We will update any additional actions related to transition risks in line with a detailed review in Phase 2 of our TCFD disclosure roadmap.

Processes for managing climate‑ related risks

How processes for identifying, assessing and managing climate‑ related risks are integrated into the organisation’s overall risk management

Responding to climate‑related risks is a focus within the ‘Climate Change’ section of our Sustainability Strategy and includes both physical and transition risks and opportunities.

The Board’s role is to set the risk appetite for the organisation (that is, the nature and extent of the risks it is prepared to take to meet its objectives), oversee the risk management framework, and satisfy itself that the framework is sound.

The Board and the R&SC assess the influence of climate change on our operations and categorise risk to determine the acceptable threshold of risk tolerance for each identified risk. We can then set the business strategy within these risk parameters.

30 INGHAM’S ANNUAL REPORT 2021

tCFD ReCoMMenDAtIonS

ouR AppRoACH

Metrics used by the organisation to assess climate‑ related risks and opportunities in line with its strategy and risk management process

Scope 1, 2 and 3 greenhouse gas (GHG) emissions and related risks

Targets used by the organisation to manage climate‑ related risks and opportunities and performance against targets

Our Sustainability Strategy details targets in climate resilience, energy, carbon, water and waste.

We measure metrics of water usage (kL), fuel consumption (kms), greenhouse gas emissions (CO2), energy usage (MWh) and waste production (tonnes). Normalisation to metrics per tonne of production is used as an industry standard and for uniform comparison across metrics.

Our operational vulnerability to physical climate‑related changes are measured using the following metrics:

• Animal welfare incident reporting.

• Drought‑related supply chain risk (feed supply) and financial impact considerations.

From FY21, Ingham’s will be disclosing GHG emissions in absolute terms.

• Reduced FY21 absolute Scope 1 and Scope 2 GHG emissions (tCO2e) by 5.6% against FY19.

• Scope 3 GHG emission results to be disclosed by FY24.

• Under the Alliance for Water Stewardship (AWS) framework, we have reduced water use intensity from 2.95 kL/T in FY19 to 2.74 kL/T in FY21 (7.1% reduction).

• Reduced landfill waste intensity from 5.7 kg/T in FY20 to 5.40 kg/T in FY21 (5.4% reduction).

SBTs for GHG emissions will be incorporated in Ingham’s 2030 Sustainability Strategy. We commit to the following reduction targets by 2030:

• Reduce Scope 1 & Scope 2 absolute GHG emissions by 43% against a FY19 baseline.

• Reduce operational water usage intensity (kL/T) by 20% against an FY19 baseline.

• Reduce Landfill Waste intensity (kg/T) by 20% against a FY20 baseline.

We will assess performance against these targets by measuring progress against a baseline[b] .

ClIMAte‑RelAteD RISKS AnD oppoRtunItIeS

RISKS

oppoRtunItIeS

Transition risk categories of concern for Ingham’s include policy (regulatory), legal, market, technology and reputation.

As energy is a significant input for operations, it leaves us exposed to energy pricing fluctuations.

The cost of changing to low emissions technologies presents a current barrier for action.

As New Zealand has introduced the Zero Carbon Act, transition risks for New Zealand operations will occur sooner than in Australia.

In addition to transition risks, there are opportunities to move towards a low‑carbon economy.

Onsite renewables to stabilise against energy pricing volatility. Early adoption of the electrification of fleet vehicles.

Earlier adoption of low‑carbon initiatives in New Zealand may inform how Australian operations can transition effectively.

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Animal transport risks due to extreme heat.

Danger to animal welfare following power outages from extreme weather.

Impact on feed supply chains due to heatwaves and extreme weather events (e.g. drought). Facilities and site impact due to flooding/extreme rainfall events or bushfires.

Consideration of alternative animal transport technologies.

a Scope 1 & Scope 2 SBT subject to change pending Science Based Targets initiative (SBTi) validation. b Complete landfill waste data set only available from 2020.

OPTIMISING FOR THE FUTURE 31

BOARD OF DIRECTORS

BoARD oF DIReCtoRS

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peteR BuSH Chairman

Bachelor of Arts, Fellow of the Australian Marketing Institute

Board Chair, Chair of the Nominations Committee

Peter has had a long and successful career in the fast‑moving consumer goods (FMCG) industry, holding senior roles with Ampol/Caltex, Arnott’s, Reckitt and Coleman, and SC Johnson. He was also formerly Chief Executive Officer of AGB McNair, McDonald’s Australia and Schwarzkopf. Peter ran his own strategic consultancy business for six years with clients including George Patterson Bates, John Singleton Advertising, McDonald’s Australia, Qantas and Telstra. He has also previously served as Chairman of Mantra Group Limited, Nine Entertainment Holdings Limited, Pacific Brands Limited and Southern Cross Media Group Limited, and as a director of Insurance Australia Group Limited.

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AnDReW ReeVeS Chief executive officer and Managing Director

Bachelor of Arts (Economics), Advanced Management Program – Harvard Business School

Andrew was appointed Chief Executive Officer and Managing Director of Ingham’s on 29 March 2021. Andrew has more than 40 years’ experience in leadership and governance roles across the food and beverage and agribusiness industries in Australia and internationally. From 2019 to 2021, Andrew was a Non‑Executive Director on the Inghams Group Limited Board and was a member of the Board’s Finance & Audit Committee and Risk & Sustainability Committee. He is currently an Independent Non‑Executive Director of Keytone Dairy Corporation Limited and was previously the Chief Executive Officer of George Weston Foods, Managing Director and Executive Director of Lion Nathan Limited, Managing Director Australia of Coca‑Cola Amatil and Managing Director of The Smith’s Snack Food Company.

RoB GoRDon non‑executive Director

Bachelor of Science (Honours), Chartered Engineer, Member of the Australian Institute of Company Directors

Rob has nearly 40 years’ experience in the FMCG and agribusiness sectors. This includes over 20 years in Chief Executive Officer and Managing Director roles for companies including Dairy Farmers Limited, Goodman Fielder Limited (Meadow Lea and Consumer Goods divisions) and Viterra Inc. Rob is currently the Chief Executive Officer and a director of Ricegrowers Limited, and a member of the Rabobank Agribusiness Advisory Board. He has also served as a Non‑Executive Deputy Chair of the Australian Food and Grocery Council and a member of Gresham Private Equity Advisory Board.

Member of the Finance & Audit Committee

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MICHAel IHleIn non‑executive Director

Bachelor of Business (Accounting), Fellow of the Australian Institute of Company Directors, Fellow of Certified Practising Accountants, Fellow of the Financial Services Institute of Australasia, Member of the Financial Executives Institute of Australia

Michael has significant experience across FMCG and supply chain logistics companies. He held senior roles at Coca‑Cola Amatil Limited, including Executive Director and Chief Financial Officer, as well as Managing Director, Coca‑Cola Amatil Poland. Subsequently, he was Executive Director and Chief Financial Officer at Brambles Limited prior to becoming Chief Executive Officer until his retirement. Michael also serves on the Boards of Ampol Limited, Scentre Group Limited and the not‑for‑profit mentoring organisation Kilfinan Australia. He was formerly a Non‑Executive Director of CSR Limited.

Chair of the Finance & Audit Committee, Member of the People & Remuneration Committee, Member of the Risk & Sustainability Committee

32 INGHAM’S ANNUAL REPORT 2021

BOARD OF DIRECTORS

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JACKIe MCARtHuR non‑executive Director

Bachelor of Engineering (Aeronautical)

Jackie has more than 20 years’ experience in supply chain and logistics roles globally. She was most recently the Managing Director ANZ for the Martin Brower Company, a global logistics solutions provider for quick service restaurants. Prior to that, Jackie was the McDonald’s Vice President Supply Chain for Asia, Pacific, Middle East and Africa having also had roles in McDonald’s Australia as Senior Vice President Chief Restaurant Support Officer and Vice President Supply Chain Director. Jackie is an Independent Non‑Executive Director on the boards of Qube Holdings and Tassal Group Limited. She was formerly a Non‑Executive Director of InvoCare and Blackmores Limited.

Chair of the Risk & Sustainability Committee, Member of the People & Remuneration Committee and Member of the Nominations Committee

Helen nASH non‑executive Director

Bachelor of Arts (Hons), Graduate of the Australian Institute of Company Directors

Helen has more than 20 years’ executive experience across the consumer‑ packaged goods, media and quick service restaurant industries. Initially trained as a certified management accountant in the UK, she then spent more than 15 years in brands and consumer marketing, including as Chief Marketing Officer for McDonald’s Australia and New Zealand. She also held the position of Chief Operating Officer for McDonald’s Australia, where she had strategic, commercial and operational responsibility for the business. Helen is currently an Independent Non‑Executive Director of Metcash Limited and Southern Cross Media Limited. She was formerly a Non‑Executive Director of Blackmores Limited and Pacific Brands Limited.

Chair of the People & Remuneration Committee, Member of the Nominations Committee

lInDA BARDo nICHollS Ao non‑executive Director

Bachelor of Arts, Master of Business Administration, Fellow of the Australian Institute of Company Directors

Linda has more than 30 years’ experience as a senior executive and director in banking, insurance and funds management in Australia, New Zealand and the United States. She is Chairman of Japara Healthcare Limited and Melbourne Health, a director of Medibank Private Limited, and serves on the Museums Board of Victoria. She has previously served as a director and chairman on the boards of other major Australian listed companies, including Fairfax Limited, and is a Life Fellow of the Australian Institute of Company Directors.

Member of the Finance & Audit Committee, Member of the People & Remuneration Committee, Member of the Risk & Sustainability Committee and Member of the Nominations Committee

OPTIMISING FOR THE FUTURE 33

SENIOR MANAGEMENT

SenIoR MAnAGeMent

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AnDReW ReeVeS Chief executive officer and Managing Director

Refer to profile in Board of Directors on page 32.

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GARY MAllett Chief Financial officer

Chartered Accountant, Gary joined Ingham’s in 2019. He is responsible for the company’s financial and management Bachelor of Business reporting, treasury, investor relations, governance and information technology. Gary has (Accounting) more than 30 years’ experience in a range of senior finance roles with ASX listed companies, including Brambles Limited and Origin Energy Limited. Before joining Ingham’s, he was Chief Financial Officer at Senex Energy Limited. He also serves as secretary and director on several Inghams Group Limited subsidiary companies.

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JonAtHAn GRAY Chief executive officer, new Zealand

Master of Business Administration

Jonathan joined Ingham’s in 2008. He is responsible for leading the New Zealand business and managing all operations, sales, marketing and support services. His experience in the company includes executive responsibility across Australia and New Zealand, having previously held the roles of Sales and Marketing Director based in Australia and General Manager, Sales and Marketing for New Zealand. He has 27 years’ experience in the United Kingdom, New Zealand and Australia. Before joining Ingham’s, he held senior positions with Countdown Supermarkets and Marks & Spencer.

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tIM SInGleton Chief operations officer

Bachelor of Health Information Management

Tim joined Ingham’s in 2019. He is responsible for Ingham’s Australian chicken and turkey operations, spanning primary processing, further processing, warehousing and logistics, quality, continuous improvement, engineering, regulatory compliance, and our turkey farming operations and strategy development. Tim joined from Case Farms in the US, where he held the position of Vice President. He has more than 20 years’ experience in the poultry industry, including in key operational roles at Pilgrim’s Pride, Simmons Prepared Foods and Tyson Foods.

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MARK poWell Chief Customer officer

Bachelor of Commerce, Master of Business Administration, Chartered Accountant, Graduate of the Institute of Company Directors

Mark joined Ingham’s in 2021 and has more than 25 years’ experience in the FMCG industry. In previous roles, he has led cultural change to build high‑performing sales teams, achieved consistent sales, share and profit growth with major customers and developed and executed strategic plans. Before joining Ingham’s, Mark was the National Sales Director for Lion Nathan and previously held senior roles at Coca‑Cola Amatil and PricewaterhouseCoopers.

34 INGHAM’S ANNUAL REPORT 2021

SENIOR MANAGEMENT

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SeB BRAnDt Chief Marketing officer

Bachelor of Economics/Marketing and Business Statistics

Seb joined Ingham’s in 2019. He is responsible for consumer and shopper insights, product development and marketing. Seb has more than 20 years’ marketing experience in the food and beverage, quick service restaurant and retail categories, and previously worked at Fosters, McDonald’s, PepsiCo and Red Bull. His skills and passion lie in creating new business and winning new consumers via innovation, brand building, entering new categories and instilling an innovation mindset at all levels of the organisation.

Anne‑MARIe MooneY Chief Agribusiness officer

Anne‑Marie joined Ingham’s in 2018. She is the executive lead for the company’s sustainability and animal welfare programs and leads our operations across nutrition, commodity procurement, feed milling and Australian farming. Anne‑Marie has more than 15 years’ senior executive experience, having held roles covering strategic, commercial and operational areas across the energy and agriculture sectors.

Bachelor of Commerce

GRAnt KeRSWell Chief people officer

Bachelor of Business (Human Resource Management), Master of Business Administration

Grant joined Ingham’s in 2019. He provides strategic advice and support in the core areas of people, culture and communications, including organisational development, capability, remuneration and workplace relations. Grant brings more than 25 years’ leadership experience in the human resources function from previous leadership roles at Arnott’s Biscuits, Broadspectrum, Coca‑Cola Amatil and Seven Network.

eDWARD AleXAnDeR Chief Strategy officer

Bachelor of Commerce (Economics, Finance)

Ed joined the Ingham’s team in 2015 and was promoted to Chief Strategy Officer in 2020. He is responsible for corporate development, corporate strategy and integrated business planning (including sales and operations planning). Before his current position, Ed held a number of senior roles at Ingham’s spanning sales, strategy and commercial optimisation. He brings over 10 years’ experience in corporate strategy, change management and sales and operations planning through his previous positions at Aon Risk Solutions and Ernst & Young.

DAVID MAttHeWS General Counsel & Company Secretary

Bachelor of Economics, Bachelor of Laws

David joined Ingham’s in 2015. He is an experienced senior executive with over 30 years’ experience as Group General Counsel and Company Secretary in large listed FMCG, food and agribusiness companies, including Arnott’s Biscuits, Fonterra Co‑operative Group and now Ingham’s. In those roles, David has managed several corporate functions, including Legal and Secretariat, Property, Policy, Risk, Government Affairs and Public Relations. Before working in corporate, David was a corporate, commercial and finance lawyer with international law firms in Australia and the United Kingdom.

OPTIMISING FOR THE FUTURE 35

CORPORATE GOVERNANCE STATEMENT

CoRpoRAte GoVeRnAnCe StAteMent

this statement summarises the Corporate Governance framework, policies and practices of Inghams Group limited (ACn 162 709 506) (‘Ingham’s’ or ‘the Company’) for the financial year ended on 26 June 2021 (‘reporting period’) in accordance with the 4th edition of the ASX Corporate Governance Council’s Corporate Governance principles and Recommendations (ASX Recommendations). this Corporate Governance Statement has been approved by the Ingham’s Board.

Ingham’s Board and Committee Charters and the key corporate governance policies referred to in this statement are available in the Investor Centre (Corporate Governance tab) of the Company website: https://investors.inghams.com.au/Investor-Centre/Governance . html?page=corporate-governance

pRInCIple 1 lAY SolID FounDAtIonS FoR MAnAGeMent AnD oVeRSIGHt

The Board delegates authority to the CEO/MD for the day‑to‑day operations of the Company, its subsidiaries and their respective operations. The Company Secretary is accountable to the Board through the Chair for the proper functioning of the Board.

Board Responsibilities

The Board is responsible for the overall governance of Ingham’s including overseeing and appraising Ingham’s strategies, policies, performance, and reporting to shareholders. In accordance with the Board Charter, the Board sets, reviews and monitors compliance with the Company’s values, strategies, policies and performance, and ensures that shareholders are kept informed of the Group’s performance and any major developments affecting its state of affairs.

The Company’s purpose and principles form the basis for Ingham’s culture and are disclosed on the Company website. The Board Charter sets out the Board’s role, powers and duties and establishes the functions reserved for the Board and those which are delegated to management. The Charter is available on the Company website:

https://investors.inghams.com.au/Investor-Centre/Governance. html?page=corporate-governance

The Board’s responsibilities as set out in the Board Charter include:

• Selecting, appointing and evaluating from time to time the performance of, determining the remuneration of, and planning succession of the Chief Executive Officer and Managing Director (CEO/MD);

• Contributing to and approving management’s development of corporate strategy, setting performance objectives and approving operating budgets;

• Reviewing, ratifying and monitoring systems of risk management and internal control, and ethical and legal compliance;

• Monitoring corporate performance and implementation of strategy and policy;

• Approving major capital expenditure, acquisitions and divestitures, and monitoring capital management;

• Monitoring and reviewing management processes aimed at ensuring the integrity of financial and other reporting; and

• Developing and reviewing corporate governance principles and policies.

Board Reviews and Appointments

The Board regularly reviews the performance and effectiveness of the Board, its Committees and individual directors, with the aim of ensuring that individual directors, Board Committees, and the Board as a whole, work effectively in meeting their responsibilities.

The Company has written agreements in place with its directors setting out the terms of their appointment. Prior to the appointment of a new director, the Company arranges for appropriate checks to be undertaken relevant to a decision on whether to elect a director. Material information is disclosed to security holders through a number of channels, including via the Notice of Meeting, and the Directors’ resumés and other information contained in this report.

Inclusion and Diversity

The Company has an Inclusion and Diversity policy, which includes a requirement that the Board set measurable objectives for diversity, including gender diversity. The Company’s current targets for gender diversity are that women should comprise at least 30 per cent (in aggregate) of each of the Company’s Board and senior leaders within Ingham’s management. The measurable objective with respect to the Board meets the recommendations applying to Ingham’s as an S&P/ASX 300 company under the 4th edition of the ASX Recommendations.

During the reporting period, women comprised three of the seven directors on the Board. Women generally comprise up to 21 per cent of senior leaders at Ingham’s and 41 per cent of our people across Australia and New Zealand. As a ‘relevant employer’ under the Workplace Gender Equality Act 2012, the Company submitted its annual filing to the Workplace Gender Equality Agency (“WGEA”) by 11 August 2021 for the 12‑month period ending 31 March 2021, which will disclose its current Gender Equality Indicators. When published, the report can be accessed in accordance with the 4th edition of the ASX Recommendations at: https://data.wgea.gov.au/organisations/464 .

The Company is continuing its commitment to be a workplace that encourages ethnic and cultural diversity with individuals from approximately 90 different countries working throughout the business.

36 INGHAM’S ANNUAL REPORT 2021

CORPORATE GOVERNANCE STATEMENT

executive responsibilities and reviews

Each member of the Executive Leadership Team, including the CEO/MD, has a written service agreement that clearly sets out their role and responsibilities. Goals and objectives of senior executives are aligned to Ingham’s strategic objectives. The performance of each of Ingham’s senior executives is evaluated during the reporting period, and the performance of the CEO/MD is reviewed by the Board and the Chairman. During the reporting period Mr Andrew Reeves was appointed to the role of CEO/MD following the resignation of Mr Jim Leighton as announced to the ASX on 29 March 2021.

The Company undertakes appropriate background checks on senior executives prior to appointment. Details of the experience of the Executive Leadership Team are set out in this report.

pRInCIple 2 StRuCtuRe tHe BoARD to ADD VAlue

The Board currently comprises six independent Non‑Executive Directors and one Executive Director (being the CEO/MD). The Chair of the Board, Peter Bush, is an independent Non‑Executive Director.

The Board seeks directors with an appropriate range of skills, knowledge, experience, independence and diversity, and an understanding of, and competence to deal with, current and emerging issues of the business. The table below summarises the key skills of the existing directors and forms the basis of the skills matrix against which existing Non‑Executive Directors are assessed, to ensure that the skills and experience of the Board reflect the various areas relevant to Ingham’s core capabilities and strategic objectives.

Details of the experience, qualifications and length of service of each current director are set out on page 32 to 33 of this report.

Independence of directors

The Board only considers a Director to be independent where he or she is free of any interest, position, association or relationship that might influence, or might reasonably be perceived to influence, in a material respect, his or her capacity to bring independent

judgment to bear on issues before the Board, and to act in the best interests of the Company and its shareholders generally. The Company’s Board Charter sets out guidelines for the purpose of determining independence of directors in accordance with the ASX Recommendations and has adopted a definition of independence that is based on the definition set out in the ASX Recommendations. The Board will consider the materiality of any given interest, position, association or relationship on a case‑by‑case basis and reviews the independence of each director in light of interests disclosed to the Board from time‑to‑time. During the reporting period, the Board considered that each of Peter Bush (Chair), Robert Gordon, Michael Ihlein, Jackie McArthur, Helen Nash[1] and Linda Bardo Nicholls AO were free from any business or any other relationship that could materially interfere with, or reasonably be perceived to interfere with, the independent exercise of their respective judgment as directors, and were able to fulfil the role of an independent director for the purposes of the 4th edition of the ASX Recommendations.

nomination Committee and Board education and succession

The Board’s Nomination Committee is comprised of four Non‑Executive Directors, Peter Bush (Chair), Jackie McArthur, Helen Nash and Linda Bardo Nicholls AO, all of whom are independent directors. The roles, responsibilities, composition and structure of the Nomination Committee are set out in the Nomination Committee Charter.

The Nomination Committee assists the Board with the selection and appointment of Directors. The Committee met on a number of occasions during the reporting period, including with other directors, in order to consider the appointment of Andrew Reeves as CEO/MD. The number of times the Nomination Committee met throughout the reporting period and individual attendance is set out elsewhere in this report.

The Board has a program for inducting new directors and considers ongoing professional development for directors to maintain the skills and knowledge needed to effectively perform their role as directors.

The Board will continue to review its composition with a view to enhancing its base of skills and experience, and to develop succession plans to maintain an appropriate balance of skills, knowledge, experience, independence and diversity on the Board.

• 1 Helen Nash is also a Director of Metcash Limited, which is a customer of the Company and therefore a factor relevant to assessing independence. The Board has considered this relationship, and because the Company’s dealings with Metcash are not material to the sales volume, revenue or overall results of the Company, the Board is of the opinion that this role does not compromise the independence of Helen Nash.

SKIllS/eXpeRIenCe

SKIllS/eXpeRIenCe	= Experienced = Specialist	= Developing
ASX listed company experience	FMCG experience
Senior exec listed company experience	Government relations
Financial and accounting experience	Experience in Aust and NZ
Knowledge of risk management	Strategic planning experience
Agri business experience	Marketing and brand management experience
Exec/Board experience with major	Experience with manufacturing
supermarkets	operations
QSR experience	Innovation and new technology experience

OPTIMISING FOR THE FUTURE 37

CORPORATE GOVERNANCE STATEMENT

GenDeR DIVeRSItY

teRtIARY QuAlIFICAtIonS

tenuRe

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Science
0 – 2 years
Men Business MBA
2 – 4 years
Women Accounting & Finance
4+ years
Commerce & Marketing
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pRInCIple 3 ACt etHICAllY AnD ReSponSIBlY

The Company is committed to act with honesty and integrity, and ethically in all its dealings. It has adopted a Code of Conduct that underpins the Company’s commitments, ethical standards and policies and outlines the standards of conduct expected of Ingham’s business and people, taking into account the Company’s legal and other obligations to its stakeholders.

The Company has an Anti‑Bribery and Anti‑Corruption Policy and a Whistle‑Blower Policy, which outline the Company commitment to prevent fraud, bribery and corruption and provide a mechanism for individuals to report concerns regarding potentially improper practices or behaviours. The Board is advised of all material breaches of those Policies and the Code of Conduct.

Copies of the policies are available on the Company website:

https://investors.inghams.com.au/Investor-Centre/Governance. html?page=corporate-governance/

pRInCIple 4 SAFeGuARD InteGRItY In CoRpoRAte RepoRtInG

Finance & Audit Committee

The Finance & Audit Committee (F&AC) assists the Board in fulfilling its corporate governance and oversight responsibilities in relation to:

• the integrity of the Company’s financial reporting;

• the Company’s financial controls and systems; and

• the Company’s relationship with each of the external auditor and internal auditor, and the external and internal audit functions generally.

The F&AC Charter sets out the roles, responsibilities, composition and structure of the Committee.

The F&AC is comprised of three Non‑Executive Directors, all of whom are independent, being Michael Ihlein (Chair), Linda Bardo Nicholls AO and Rob Gordon. Andrew Reeves was a member of the Committee until his appointment as CEO/MD on 29 March 2021.

The CEO/MD, the Chief Financial Officer (CFO), the external auditor and internal auditor must attend Committee meetings if requested. The Committee has unrestricted access to management and the auditors, and the right to seek explanations and additional information. The Committee meets with the external auditor and the internal auditor without management present. The number of times the F&AC met throughout the reporting period and individual attendance is set out elsewhere in this report.

Ceo/MD and CFo certifications

In accordance with section 295A of the Corporations Act 2001, the CEO/MD and the CFO have provided assurances to the Board for each of the half year and full year results, that in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity, and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

38 INGHAM’S ANNUAL REPORT 2021

CORPORATE GOVERNANCE STATEMENT

external Audit

Ingham’s external auditor is KPMG. The Company will ensure that the auditor attends the Company’s Annual General Meeting (AGM) and is available to answer questions from shareholders relevant to the audit and the preparation and content of the auditor’s report.

Internal Audit

The Internal Audit function provides independent and objective assurance on the adequacy and effectiveness of the Group’s systems for risk management, internal control and governance, along with recommendations to improve the efficiency and effectiveness of Ingham’s internal control systems and processes. The Internal Auditor reports to the Board through the F&AC on Ingham’s compliance against its governance framework and policies, and has direct access to the Chairman of the F&AC. The Internal auditor oversees the implementation of Ingham’s risk framework across the organisation, and generally provides the F&AC with reports and information relevant to assisting the Committee with discharging its responsibilities.

Verification

Ingham’s is committed to providing shareholders and external stakeholders with timely and transparent corporate reporting. For any periodic report that is not audited or reviewed by an external auditor, including disclosures in this report on operations, sustainability, risk and corporate governance, the Company has implemented internal verification processes to validate the statements made and supporting the data used. ASX announcements (other than administrative announcements) during the reporting period were reviewed and approved prior to publication by the Ingham’s Board and/or its Disclosure Committee comprising the Chairman, CEO/MD, CFO and General Counsel & Company Secretary.

Ingham’s process to verify the integrity of corporate reports is based on the nature of the relevant report, its subject matter and where it will be published. Generally, the following processes and principles are applied for preparation and verification of its corporate reporting:

• Corporate reports are provided by relevant subject matter experts with oversight by relevant senior executives;

• All reports are required to be accurate and not misleading, and to comply with applicable legislation or regulation; and

• Relevant reports must be authorised for release by any appropriate approver required under Ingham’s policy.

The Annual Report for the reporting period, which includes the Remuneration Report, Sustainability Report and Corporate Governance Statement, were prepared by the relevant subject matter experts and reviewed and verified by relevant Ingham’s executives and senior managers prior to Board approval.

pRInCIple 5 MAKe tIMelY AnD BAlAnCeD DISCloSuRe

The Company has a Continuous Disclosure Policy for the purposes of complying with its continuous disclosure obligations. The Policy outlines the processes that the Company implements to ensure compliance with its continuous disclosure obligations, including the role of the Disclosure Committee. The Company releases any new and substantive investor or analyst presentations on the ASX Market Announcement Platform ahead of any such presentation.

Directors are provided copies of all material announcements promptly after they have been made.

A copy of the Continuous Disclosure Policy is available on the Company website:

https://investors.inghams.com.au/Investor-Centre/Governance. html?page=corporate-governance

pRInCIple 6 ReSpeCt tHe RIGHtS oF SeCuRItY HolDeRS

Communication with shareholders

Ingham’s investor relations program aims to promote effective two‑way communication with investors and market analysts so that they are kept informed of all major developments affecting the state‑of‑affairs of the Company. In addition, Ingham’s values the opportunity to hear investors’ and analysts’ views and concerns and, where appropriate, distils and communicates those views to the Board.

Shareholder communications include half yearly and annual reports, market announcements and media releases, all of which are available in the investor Centre of the Company website, together with corporate governance information and background information on the Group. Shareholders have the option to receive communications from, and send communications to, the Company and its security registry electronically, to ensure that information is received in a timely manner.

The Company provides the full text of all notices of meetings and explanatory material on its website. The Company also encourages shareholders to provide email addresses so that notices of meetings and explanatory material can be sent to shareholders electronically. The Company encourages participation of shareholders at its AGM each year. All substantive resolutions at meetings of shareholders of the Company are decided by poll.

For sustainability disclosures, our current internal verification process includes aggregating external sources for utility data, individual site recording for water and waste for a small number of sites, as well as independent real‑time interval data for electricity. In addition, greenhouse gas emissions are calculated on an externally administered Envizi platform, which uses the latest emissions factors published by the Australian and New Zealand governments for each region.

OPTIMISING FOR THE FUTURE 39

CORPORATE GOVERNANCE STATEMENT

pRInCIple 7 ReCoGnISe AnD MAnAGe RISK

Risk & Sustainability Committee

The Company’s Risk & Sustainability Committee (R&SC) is responsible for overseeing the Company’s risk management system. The R&SC Charter sets out the responsibilities of the Committee in relation to risk. The R&SC is comprised of three Non‑Executive Directors, all of whom are independent, being Jackie McArthur (Chair), Michael Ihlein and Linda Bardo Nicholls AO. Andrew Reeves was a member of the Committee until his appointment as CEO/MD on 29 March 2021. The number of times the R&SC met throughout the reporting period and individual attendance is set out elsewhere in this report.

evaluate and manage risk

The Board and the Risk & Sustainability Committee monitor and evaluate risks through a variety of existing systems, programs and policies. The Finance & Audit Committee monitors and evaluates financial risks, while the People & Remuneration Committee monitors and evaluates people risks. The Board and/or Risk & Sustainability Committee also reviews the following areas:

• The Company’s risk management and compliance framework;

• Health, safety, quality and environmental risks;

• All other material and emerging risks including but not limited to risks associated with cyber security, brand and reputation, climate change and regulatory matters (but excluding financial and people risks which are the responsibility of the Finance & Audit Committee and People & Remuneration Committee respectively);

• Strategic risks facing the Company;

• The annual insurance program;

• Structure and adequacy of business continuity plans; and

• The Company’s sustainability strategy and its implementation plans.

The Company’s management is responsible for managing strategic, financial and operational risk, and implementing risk mitigation measures, within parameters overseen by the Board and its Committees. Management incorporates risk management into strategic planning and decision making to understand and prioritise the management of material business risks. The R&SC reviews key risks within the Company’s risk management framework to ensure Ingham’s strategy is executed in a responsible, ethical and sustainable way.

pRInCIple 8 ReMuneRAte FAIRlY AnD ReSponSIBlY

people & Remuneration Committee

The Company’s People & Remuneration Committee (P&RC) assists and advises the Board on remuneration policies and practices for the Board and senior management, including equity‑based remuneration.

The P&RC is comprised of four Non‑Executive Directors, all of whom are independent including the Chair. The directors currently serving on the P&RC are Helen Nash (Chair), Michael Ihlein, Jackie McArthur and Linda Bardo Nicholls AO. The roles, responsibilities, composition and structure of the P&RC are set out in the P&RC Charter.

The number of times the P&RC met throughout the reporting period and individual attendance is set out elsewhere in this report.

Director and executive remuneration

The Remuneration Report on page 58 to 83 of this report details the Company’s policies and practices for remunerating directors and executives. The Company distinguishes the remuneration of executive directors and executives from that of Non‑Executive Directors by offering executives a mix of fixed and at‑risk remuneration through the Company’s short‑term and long‑term incentive plans. These plans are designed to enable Ingham’s to realise its strategic objectives by rewarding sustainable performance and behaviour that is aligned to our purpose and values.

Non‑Executive Director’s remuneration is fixed and includes superannuation. It does not include any retirement benefits.

Securities trading policy

The Company’s Securities Dealing Policy includes terms which provide that the Directors, the CEO/MD and other Company executives (each being ‘Designated Persons’ under the Policy) are prohibited from entering into transactions or arrangements with anyone which could have the effect of limiting their exposure to risk relating to an element of their remuneration that has not vested or is held subject to escrow restrictions.

Ingham’s Sustainability Strategy is available on the Company website and addresses the areas considered key for sustainable performance, including animal welfare, climate change, water stewardship, sustainable agriculture, environmental compliance, people and safety, and procurement.

40 INGHAM’S ANNUAL REPORT 2021

DIRECTORS’ REPORT

This audited general purpose financial report for the year ended 26 June 2021 covers the consolidated entity comprising Inghams Group Limited (the Company) (ACN 162 709 506) and its controlled entities (‘The Group’, ‘Ingham’s’). The Group’s functional and presentation currency is Australian dollars ($), rounded to the nearest hundred thousand.

DIRECTORS

The following persons were Directors of Inghams Group Limited during the year and until the date of this report:

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NAME ROLE DATE OF APPOINTMENT DATE OF RESIGNATION
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Peter Bush	Chairman	7 October 2016
Rob Gordon	Non‑Executive Director	11 April 2019
Michael Ihlein	Non‑Executive Director	16 April 2020
Jim Leighton	CEO & Managing Director	7 January 2019	29 March 2021
Jackie McArthur	Non‑Executive Director	18 September 2017
Helen Nash	Non‑Executive Director	16 May 2017
Linda Bardo Nicholls AO	Non‑Executive Director	7 October 2016
Andrew Reeves	Non‑Executive Director	14 January 2019	29 March 2021
Andrew Reeves	CEO & Managing Director	29 March 2021

PRESENT DIRECTOR PROFILES OF THE COMPANY

See pages 32 to 33.

DIRECTORS’ MEETINGS

The number of meetings of directors (including meetings of Board Committees) held during the year and the number of meetings attended by each director, during their time in office, were as follows:

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DIRECTORS’ DIRECTORS’ F&AC F&AC P&RC P&RC R&SC R&SC NOMS C NOMS C
MEETINGS MEETINGS MEETINGS MEETINGS MEETINGS MEETINGS MEETINGS MEETINGS MEETINGS MEETINGS
HELD ATTENDED HELD ATTENDED HELD ATTENDED HELD ATTENDED HELD ATTENDED
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P Bush	8	8(c)	–	3*	–	2*	–	3*	8	8(c)
R Gordon	8	8	4	4	–	2*	–	1*	–	–
M Ihlein	8	8	4	4(c)	4	44	1	15	–	–
J Leighton1	6	6	–	3*	–	3*	–	3*	–	–
J McArthur	8	8	–	2*	5	5	4	4(c)	–	6*
H Nash	8	8	–	3*	5	5(c)	–	3*	8	7
L Bardo Nicholls AO	8	8	4	4	5	43	4	4	8	7
A Reeves	8	8	3	32	–	5*	3	32	–	–

F&AC Finance & Audit Committee P&RC People & Remuneration Committee R&SC Risk & Sustainability Committee

• Denotes attendance by a Director while not a member of the Committee.

(c) Denotes Chair of the Board or Committee.

(1) Jim Leighton resigned as a Chief Executive Officer and Managing Director (CEO/MD) as from 29 March 2021.

(2) Andrew Reeves appointed as CEO/MD as from 29 March 2021 and on that date he stepped down as a Committee member of the F&AC and R&SC.

(3) Linda Bardo Nicholls AO was on leave of absence due to illness for the P&RC meeting held on 3 June 2021.

(4) Michael Ihlein joined the P&RC on 10 September 2020, and he attended one P&RC meeting prior to being appointed to the Committee.

(5) Michael Ihlein joined the R&SC on 28 April 2021 and he attended three R&SC meetings prior to being appointed to the Committee.

OPTIMISING FOR THE FUTURE 41

DIRECTORS’ REPORT CONTINUED

COMPANY SECRETARY

David Matthews, BEcon LLB.

Please refer to his profile on page 35.

PRINCIPAL ACTIVITIES

The principal activities of the Group during the year consisted of the production and sale of chicken and turkey products across its vertically integrated free‑range, value enhanced, primary processed, further processed and by‑product categories. Additionally, stockfeed is produced primarily for internal use but also for the poultry, pig and dairy industries.

CORPORATE STRUCTURE

Ingham’s is a company limited by shares that is incorporated and domiciled in Australia. Details of all companies in the Group are outlined in Note 22 to the Financial Statements.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

ENVIRONMENTAL REGULATION

The Group is subject to particular and significant environmental regulations. All relevant authorities have been provided with regular updates and, to the best of the directors’ knowledge, all activities have been undertaken in compliance with or in accordance with a process agreed with the relevant authority.

The Group takes its environmental obligations seriously and has had an Environmental Policy in place for more than 30 years. The policy provides the framework for a comprehensive management strategy that is integrated with overall business strategy and ensures individual sites are managed in a consistent way to a high standard. In the past decade, sustainability has become a focus for the organisation and is a key business objective, helping identify business improvements and further efficiencies. Ingham’s is now recognised as a leader in sustainability and aims to lead the world in the continued adoption of advanced water treatment to reduce water use.

The policy contains a commitment to protecting the environment including:

• Development of an environmental management system integral to overall management;

• Prevention of pollution;

• Product stewardship;

There were no significant changes in the nature of the Group’s activities during the year.

• Water, energy and material conservation;

• Continuous environmental improvement; and

DIVIDENDS

An interim fully franked dividend of 7.5 cents per share totalling $27.9 million was paid on 8 April 2021 (2020: $27.1M).

Subsequent to the year end, a fully franked dividend of 9.0 cents per share has been declared totalling $33.4 million to be paid on 6 October 2021. The financial effect of this dividend has not been brought to account in these consolidated financial statements and will be recognised in the subsequent financial report.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

The directors of the Company are not aware of any other matter or circumstance not otherwise dealt within the financial report that significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs in the period subsequent to the year ended 26 June 2021.

• Working towards sustainability internally and with the supply chain.

It includes requirements for each site to develop and implement a site‑specific environmental management plan with the following objectives:

• Compliance with applicable legal and other requirements met;

• Identification of environmental impacts of our activities, products and services;

• Procedures for managing activities with a potential to impact the environment; and

• Continuous environmental improvement through setting and reviewing specific objectives and targets; and clear responsibilities and accountability.

It also outlines the annual self‑assessment and the periodic independent environmental review processes.

Each site has the required environmental protection licence or resource consent and completes an annual statement of compliance.

The Group is subject to the National Greenhouse and Energy Reporting Act 1997 and is required to report on the energy consumption and greenhouse gas emissions of its Australian operations.

42 INGHAM’S ANNUAL REPORT 2021

DIRECTORS’ REPORT CONTINUED

DIRECTORS’ INTERESTS

The relevant interest of each director in the shares and rights over such instruments issued by the companies within the Group, as notified by the directors to the ASX in accordance with s250G(1) of the Corporations Act 2001 , at the date of this report is as follows:

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ORDINARY PERFORMANCE
SHARES RIGHTS
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Peter Bush	208,730	–
Michael Ihlein	45,455	–
Jackie McArthur	24,950	–
Helen Nash	29,370	–
Linda Bardo Nicholls AO	42,048	–
Rob Gordon	15,772	–
Andrew Reeves	12,800	–

SHARE OPTIONS

Legacy share option arrangement

A KMP of the Group was granted an interest‑free loan in September 2018 to subscribe to shares of Inghams Group Limited. This loan is non‑recourse other than to the shares held by that employee, and the proceeds of the loan must be used to buy shares. The arrangement has been accounted for as share options. These options entitle the holder to receive dividends on ordinary shares of the Company, and these dividends are required to be used to repay the loans attached. Shares under this scheme are held in trust for employees by a subsidiary, Ingham 2 Pty Limited. This interest free non‑recourse loan to purchase shares in Ingham’s under a legacy arrangement has a balance owing as at 26 June 2021 of A$23,600, with this loan being repaid from dividends from the ordinary shares held. It is expected that this loan will be fully repaid within FY22.

Performance rights

Executive KMP and senior executives are invited annually to participate in a three‑year Long‑Term Incentive Plan (LTIP), awarded in share rights with these share rights being performance‑based and only vest if minimum performance hurdles are met. The share rights do not attract voting rights or entitle the holder to receive dividends.

In addition, Executive KMP and certain senior executives have a portion of any actual Short‑Term Incentive Plan award deferred into share rights, that are required to be held for a period of 12 months before vesting into shares. No performance conditions exist for these share rights to vest and they are time‑based vesting on the completion of the service period.

There are no other loans to KMP and no loan arrangements will be offered in the future.

OPTIMISING FOR THE FUTURE 43

DIRECTORS’ REPORT CONTINUED

SHARE OPTIONS ( CONTINUED )

Share options and rights outstanding at the end of the year have the following expiry dates and exercise prices (where relevant):

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2021 2020
NUMBER OF
EXERCISE RIGHTS / EXERCISE NUMBER OF
GRANT DATE EXPIRY DATE PRICE OPTIONS PRICE RIGHTS / OPTIONS
10 June 2021 1 July 2023 – 1,097,339 – –
15 September 2020 1 July 2021 – 299,654 – –
17 April 2020 25 June 2022 – 1,448,756 – 1,996,208
2 April 2020 31 December 2022 – 14,410 – –
1 September 2020 31 July 2023 – 15,031 – –
6 December 2018 30 June 2021 – 34,860 – 80,095
6 December 2018 30 June 2020 – – – 11,260
4 December 2018 30 June 2021 – 506,862 – 506,862
5 November 2018 30 June 2021 – 354,001 – 306,459
7 November 2017 30 June 2020 – – – 157,779
22 December 2015 21 December 2020 $1.40 200,000 $1.40 200,000
Share‑based payments 3,970,913 3,258,663
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(1) The options for 200,000 shares relate to a KMP interest‑free loan granted in September 2018. Based on expected dividend payouts, the option was expected to expire in December 2020 but a balance of A$23,600 remains outstanding as of 26 June 2021. The options will continue to remain outstanding and are expected to vest in FY22 upon final dividend settlements.

Included in the above were rights granted as remuneration to the following directors and officers of the Company and the Group during the year:

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NAME OF OFFICER DATE GRANTED NUMBER OF RIGHTS
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Jonathan Gray	10 June 2021	114,260
Gary Mallett	10 June 2021	128,368
Jonathan Gray	15 September 2020	15,275
Gary Mallett	15 September 2020	13,384
Jim Leighton	15 September 2020	180,377

No options were granted to the directors or officers of the Company since the end of the financial year.

44 INGHAM’S ANNUAL REPORT 2021

DIRECTORS’ REPORT CONTINUED

INDEMNITIES AND INSURANCE OF OFFICERS AND AUDITORS

Indemnities

Ingham’s constitution indemnifies each officer of Ingham’s and its controlled entities against a liability incurred by that person as an officer unless that liability arises out of conduct involving a lack of good faith. The constitution also provides that Ingham’s may make a payment to an officer or employee (by way of advance, loan or otherwise) for legal costs incurred by them in defending legal proceedings in their capacity as an officer or employee. Ingham’s has entered into a Deed of Access, Indemnity and Insurance with each director which applies during their term in office and after their resignation (except where a director engages in conduct involving a lack of good faith). Ingham’s constitution provides that it may indemnify its auditor against liability incurred in its capacity as the auditor of Ingham’s and its controlled entities. Ingham’s has not provided such an indemnity.

Indemnification and insurance of officers

During the reporting period and since the end of the reporting period, the consolidated entity has paid premiums in respect of a contract insuring directors and officers of the consolidated entity in relation to certain liabilities. The insurance policy prohibits disclosure of the nature of the liabilities insured and the premium paid.

LEAD AUDITOR’S INDEPENDENCE DECLARATION

The lead auditor’s independence declaration required under section 307C of the Corporations Act 2001 is included on page 84.

NON‑AUDIT SERVICES

The following non‑audit services were provided by the entity’s auditor, KPMG. The directors are satisfied that the provision of non‑audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 . The nature and scope of each type of non‑audit service provided means that auditor independence was not compromised. This assessment has been confirmed to the Board by the Finance & Audit Committee.

KPMG received or are due to receive the following amounts for the provision of non‑audit services:

		$000
Other	services (FY21 includes benchmarking data for short‑term and long‑term incentive plans for executive remuneration)	35
Other	assurance services	8
Total	non‑audit services	43

ROUNDING OF AMOUNTS

The amounts contained in this report and in the financial statements have been rounded to the nearest hundred thousand dollars unless otherwise indicated under the option available to the Group under ASIC Corporations (Rounding in Financial / Directors’ Reports) Instrument 2016 / 191.

OPERATING AND FINANCIAL REVIEW

Underlying results

The underlying results exclude the profit on sale of assets, impairments and restructuring charges. The above mentioned items have been tax effected to determine an underlying Net Profit after Tax (NPAT) to allow shareholders to make a meaningful comparison of the Group’s underlying NPAT performance against prior year.

Non‑IFRS measures

Throughout this report, Ingham’s has included certain non‑IFRS financial information, including EBITDA. Ingham’s believes that these non‑IFRS measures provide useful information to recipients for measuring the underlying operating performance of Ingham’s.

EBITDA stands for Earnings Before Interest, Tax, Depreciation, and Amortisation. This is calculated throughout the Operating and Financial Review consistent with the segment note to the financial statements from page 97.

OPTIMISING FOR THE FUTURE 45

DIRECTORS’ REPORT CONTINUED

OPERATING AND FINANCIAL REVIEW ( CONTINUED )

Underlying results (52 weeks)

Table 1: Underlying results for FY21 compared to underlying results for prior year

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FY21 FY20
UNDERLYING UNDERLYING CHANGE
CONSOLIDATED INCOME STATEMENT $000 $000 $000
Revenue 2,668,800 2,555,300 113,500
Cost of sales (1,948,600) (1,891,800) (56,800)
Gross profit 720,200 663,500 56,700
Distribution expense (142,200) (137,900) (4,300)
Sales, general and administration expense (130,100) (116,600) (13,500)
Share of net profit associate 400 300 100
Other income 400 – 400
EBITDA 448,700 409,300 39,400
Depreciation and amortisation (265,300) (263,400) (1,900)
EBIT 183,400 145,900 37,500
Net interest expense (65,600) (68,400) 2,800
Net profit before tax 117,800 77,500 40,300
Income tax expense (31,100) (22,400) (8,700)
Net profit after tax 86,700 55,100 31,600
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Group core poultry volume grew 4.2% despite challenging market conditions including intermittent lockdowns, closed international borders and export market disruptions due to Avian Influenza, though not at any Ingham’s sites. Group core poultry revenue was up +5.7% while net selling prices grew +1.4% reflecting growth across all channels except Export.

Australian core poultry volume grew 3.9% (1H 4.0% / 2H 3.8%) with growth coming from all channels except for export which declined sharply as export markets were closed for the most part of FY21. Australian core poultry revenue grew 5.8% in FY21 with net selling prices growing +1.8% highlighting the elevated prices reflected of high commodity prices.

New Zealand core poultry grew 6.2% (1H 4.2% / 2H 8.3%) with strong 2H growth reflecting the cycling of the Q4 FY20 COVID‑19 lockdowns in NZ, while 1H FY21 volume performance of +4.2% was due to the clearance of excess inventory. New Zealand core poultry revenue grew slower at 5.3% in FY21 with net selling prices declining ‑0.8% as the market progressively sold down excess stock and rebalanced supply across the market.

Feed volume declined ‑9.1% or ‑37.1kt, ‑17.7kt in New Zealand and ‑19.3kt in Australia. New Zealand was impacted by continued favourable pasture conditions impacting the dairy feed business and the sale of Hamilton at the end of Q3. Australia was impacted by lower external feed demand due to COVID‑19 and a customer loss. By‑products volume grew +5.1% or +5.3kt, with the growth predominantly coming from Australia +6.2kt, while NZ volume declined ‑0.9kt due to a challenged domestic market.

Cost of sales grew modestly at 3.0% due to improved operational performance and the realisation of continuous improvement initiatives across farming, primary processing and further processing. In addition, the business benefited from the forward purchasing of electricity and initiatives to save water at sites, while the FY21 cost of sales benefited from a $13.6M year‑on‑year improvement in the inventory provision. The Gross profit margin % as a result improved 1.0 pp to 27.0% of revenue.

Distribution costs increased 3.9% in the year due to a mix of higher core poultry volumes +4.2% and CPI increases offset by improved route optimisation. Sales, general and administrative costs were up +10.5% due to higher insurance premiums and legal settlements incurred.

Depreciation was broadly in line with FY20 due to the delays in completing new projects due to COVID‑19 restrictions.

External net interest, excluding AASB 16 interest was up 9.6% due to higher debt balance in 1H FY21.

The effective tax rate (ETR) of 26.4% (2020: 28.9%) was down due to the receipt of an R&D tax credit of $8.5M for the FY19 claim year partially offset by a provision under IFRIC 23 for an uncertain tax matter.

46 INGHAM’S ANNUAL REPORT 2021

DIRECTORS’ REPORT CONTINUED

OPERATING AND FINANCIAL REVIEW ( CONTINUED )

The impact of AASB 16 included in the underlying results above are as follows:

Table 1a: AASB 16

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FY21 FY20 []
AASB 16 AASB 16 CHANGE
AASB 16 $000 $000 $000
Cost of sales [1] (211,800) (203,100) (8,700)
Gross profit (211,800) (203,100) (8,700)
Distribution expense [2] (20,100) (19,500) (600)
Sales, general and administration expense [3] (7,200) (7,000) (200)
EBITDA (239,100) (229,600) (9,500)
Depreciation and amortisation 208,900 208,500 400
EBIT (30,200) (21,100) (9,100)
Net interest expense 50,800 54,800 (4,000)
Net loss / (profit) before tax 20,600 33,700 (13,100)
Income tax expense (6,100) (10,000) 3,900
Net loss / (profit) after tax 14,500 23,700 (9,200)
----- End of picture text -----*

• FY20 includes a reallocation from AASB 16 adoption between COGS, Distribution and SG&A

(1) Cost of Sales – reduction of $21.0M to reflect the reclassification of the below

(2) Distribution – increase to reflect the rental adjustment on distribution centres

(3) Sales, general and administration – increase to correctly reflect the rental on office facilities

The AASB 16 impact on the Statutory NPAT reduced $9.2M from FY20 due to:

• The increase in payments of $2.3M related to CPI remeasurements and additions and the non‑recurrence of opening balance adjustments to inventory for $6.3M; and

• The reduction in interest expense due to the unwinding of the lease liabilities for $4.0M.

Table 1b: Underlying Pre AASB 16

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FY21 FY20
UNDERLYING UNDERLYING
PRE AASB 16 PRE AASB 16 CHANGE
UNDERLYING PRE AASB 16 $000 $000 $000
EBITDA 209,600 179,700 29,900
Net profit after tax 101,200 78,800 22,400
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Underlying EBITDA pre AASB 16 was up 16.6% due to a recovering market and the ongoing benefits of operational efficiencies across the entire network outlined above.

Underlying NPAT pre AASB 16 was up 28.4% due to a lower effective tax rate 26.9% (2020: 29.1%) offset by $1.4M increase in depreciation and a $1.2M increase in external net interest.

OPTIMISING FOR THE FUTURE 47

DIRECTORS’ REPORT CONTINUED

OPERATING AND FINANCIAL REVIEW ( CONTINUED )

COVID‑19 and Avian Influenza

Ingham’s operated as an ‘essential’ service provider during the COVID‑19 lockdown periods, maintaining supply to our customer base and meeting the surges in demand that followed lockdown announcements. In FY21, the Thomastown Further Processing facility in Victoria was affected by a COVID‑19 shutdown, that closed the facility for 12 days from 22 July 2020 to 3 August 2020, which did not have a material impact to the financial performance. There have been no other facilities impacted by COVID‑19 lockdowns up to the date of this report.

The Australian export market was partially closed in the FY21 due to a series of outbreaks of Avian Influenza in Victoria. These were not at Ingham’s operated farms and the impact to the financials in FY21 was not material as export products have been diverted to other channels domestically.

Statutory results

Table 2: Statutory results for FY21 actual compared to FY20

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STATUTORY STATUTORY
FY21 FY20
(52 WEEKS) (52 WEEKS) []
ACTUAL ACTUAL CHANGE
CONSOLIDATED INCOME STATEMENT $000 $000 $000
Revenue 2,668,800 2,555,300 113,500
Cost of sales [1] (1,948,600) (1,891,800) (56,800)
Gross profit 720,200 663,500 56,700
Other income (100) 500 (600)
Distribution expense [2] (142,200) (136,900) (5,300)
Sales, general and administration expense [3] (134,400) (139,600) 5,200
Share of net profit associate 400 300 100
EBITDA 443,900 387,800 56,100
Depreciation and amortisation (265,300) (263,400) (1,900)
EBIT 178,600 124,400 54,200
Net interest expense (65,600) (68,300) 2,700
Net profit before tax 113,000 56,100 56,900
Income tax expense (29,700) (16,000) (13,700)
Net profit after tax 83,300 40,100 43,200
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• FY20 includes a reallocation from AASB 16 adoption between COGS, Distribution and SG&A

(1) Cost of Sales – reduction of $21.0M to reflect the reclassification of the below

(2) Distribution – increase to reflect the rental adjustment on distribution centres

(3) Sales, general and administration – increase to correctly reflect the rental on office facilities

STATUTORY RESULTS VS PRIOR YEAR ACTUAL

Business drivers behind the year‑on‑year performance have been described in the underlying results commentary above.

In addition, there have been employee restructuring costs of $3.1M in 1H FY21, a legal settlement of $1.2M related to the sale of the Mitavite business in a prior period and a loss on sale of the Hamilton mill of $0.5M. The prior corresponding period included impairment charges of $10.7M relating to the Cleveland Further Processing Facility, $6.7M impairment charge for the Wacol Feedmill Facility and $2.9M for other properties.

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Reconciliations – statutory to underlying

Table 3: Reconciliation of statutory EBITDA to underlying EBITDA

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FY21 FY20
CONSOLIDATED EBITDA ($M) NOTE ACTUAL ACTUAL
Statutory revenue 2,668.8 2,555.3
Underlying revenue 2,668.8 2,555.3
Statutory EBITDA 443.9 387.8
Loss / (profit) on sale of assets 0.5 (0.4)
Restructuring 1 4.3 1.6
Impairment 2 – 20.3
Underlying EBITDA 448.7 409.3
AASB 16 (239.1) (229.6)
Underlying EBITDA pre AASB 16 209.6 179.7
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Table 4: Reconciliation of underlying NPAT to statutory NPAT

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FY21 FY20
CONSOLIDATED NPAT ($M) NOTE ACTUAL ACTUAL
Statutory NPAT 83.3 40.1
Loss / (profit) on sale of assets 0.3 (0.3)
Restructuring 1 3.1 1.1
Impairment 2 – 14.2
Underlying NPAT 86.7 55.1
AASB 16 14.5 23.7
Underlying NPAT pre AASB 16 101.2 78.8
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(1) Removal of restructuring expenses.

(2) Removal of impairment for Cleveland, Wacol and other properties.

Australia

Table 5: Selected statutory financial information for the Australia segment

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ACTUAL FY21 ACTUAL FY20 CHANGE
CONSOLIDATED INCOME STATEMENT $000 $000 $000
Revenue 2,275,200 2,170,100 105,100
EBITDA 371,800 327,800 44,000
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Australia revenue (attributed to poultry and by‑products) grew by 4.8% in the year and was underpinned by strong growth from market share gains in Wholesale, elevated demand from COVID‑19 restrictions in Retail, promotional uplifts in QSR, and growth in Foodservice offset by reduced volumes on export markets.

Australia did not receive any Government COVID‑19 financial support during the year.

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New Zealand

Table 6: Selected statutory financial information for the New Zealand segment

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ACTUAL FY21 ACTUAL FY20 CHANGE
CONSOLIDATED INCOME STATEMENT $000 $000 $000
Revenue 393,600 385,200 8,400
EBITDA 72,100 60,000 12,100
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New Zealand revenue increased 2.2% in the year, attributable to growth in poultry volumes of 6.3%. The volume growth was driven by clearance of excess inventory in H1 offset by lower feed volume driven by lower dairy sales.

Q4 experienced high volume growth against the prior comparative period with the full impact of eased trading restrictions in FY21 compared with level 4 restrictions closing 50% of the available customer channels in Q4 in the prior year.

New Zealand initially received Government COVID‑19 financial support during the year in relation to employee leave support and short‑term absence schemes. A total of NZ$357,000 was received across FY20 and FY21 and a total of NZ$147,000 payments received were returned back to the Government due to employees no longer meeting eligibility requirements.

Balance Sheet

Table 7: Selected statutory consolidated statement of financial position for the year ended 26 June 2021

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FY21 FY20 CHANGE
SELECTED CONSOLIDATED STATEMENT OF FINANCIAL POSITION $000 $000 $000
Current assets 702,400 690,500 11,900
Non‑current assets 1,842,600 1,881,700 (39,100)
Total assets 2,545,000 2,572,200 (27,200)
Current liabilities 703,000 671,700 31,300
Non‑current liabilities 1,678,400 1,771,400 (93,000)
Total liabilities 2,381,400 2,443,100 (61,700)
Net assets 163,600 129,100 34,500
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NET ASSETS

Current assets increased largely due to the improvement in cash which increased by $23.9M. The working capital impact of increased receivables of $20.1M is due to stronger sales in the closing months of FY21 against the prior comparative period. This was offset by the reduction in inventories of $20.9M from the June 2020 balance which included the frozen inventory build due to COVID‑19.

Non‑current asset values have decreased $39.1M largely due to the reduction in the right of use asset for AASB 16 Leases which contributed to a $54.3M decrease (note 12).

Current liabilities increased $31.3M due to an increase in line with the current tax liability of $27.8M.

Non‑current liabilities decreased $93.0M due to the wind down of the AASB 16 Lease liability of $40.0M and the repayment of borrowings, net of amortised borrowing costs, of $50.6M (note 2).

These financial statements are prepared on a going concern basis despite the group being in a current net liability position of $0.6M. The Group continues to have positive profit after tax, positive net assets, positive operating cashflow, significant cash on hand and undrawn committed debt facilities. In addition, the bank facility debt is non‑current and bank covenants have been met.

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Table 8: Consolidated statutory net debt as at 26 June 2021

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FY21 FY20
NET DEBT AS AT 26 JUNE 2021 $000 $000
Bank loans (400,000) (450,000)
Capitalised loan establishment fees included in borrowings 1,700 1,100
Total borrowings (398,300) (448,900)
Less: Cash and cash equivalents 158,100 134,200
Net debt (240,200) (314,700)
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NET DEBT

Net debt has decreased by $74.5M due to improved cash generation from trading activities, lower capital spend and lower dividends paid in the year. The Group’s leverage ratio is 1.2x (FY20: 1.8x).

Material business risks

Ingham’s is exposed to a range of strategic, financial and operational risks associated with operating a vertically integrated poultry company. Ingham’s has an enterprise risk management framework which together with the company’s governance framework provides a sound basis for managing material risks. Ingham’s has continued to invest to optimise its risk management processes and has implemented new reporting and tools during FY21.

In line with best practice governance guidelines, Ingham’s has recently updated the Risk Management Policy reaffirming accountabilities for risk assessment throughout the business. Risk appetite statements have been agreed with the Executive Leadership Team and endorsed by the Board and Risk and Sustainability Committee. Strategic, climate, emerging and material operational risk reports and progress with action plans are regularly reviewed. We treat our risk programs, particularly across safety, food safety and animal welfare, as living documents and updates are used to regularly drive improvement.

The disruption of COVID‑19 has had impacts to Ingham’s including volatility in consumer demand for poultry products, people safety at our sites and overall performance of the business. Ingham’s continues to manage its COVID‑19 response via an executive level committee set up in early 2020. The business continues to manage its COVID‑19 response via comprehensive site‑based plans including team segregation and additional controls where required to safely manage and maintain our workforce as an essential food service.

Importantly, we successfully performed our critical role as an essential services provider despite disruptions associated with the first, second and subsequent waves of COVID‑19. We managed to maintain our operations and sustain supply to our customers and, in turn, the people of Australia and New Zealand. Recently, Ingham’s has also offered employees paid leave to receive their COVID‑19 vaccinations. We will continue to monitor and manage our business in response to COVID‑19 pandemic impacts, which could have a material impact to Ingham’s and the safety of our employees if not managed effectively.

Ingham’s management and the Board recognise that climate change risk has become pervasive across all of Ingham’s material risks. On this basis, climate change risk has now been incorporated into the Risk & Sustainability Board Committee agenda going forward. For further information, refer to our FY21 Sustainability Report.

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Material business risks faced by the Group that may have a significant effect on the financial prospects of the Group include:

STRATEGIC RISKS:

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RISK IMPLICATION MITIGATING ACTIONS
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Unanticipated	Any material increase in the supply of chicken in the	•	We participate in a competitive market involving a
changes to poultry	Australian and New Zealand markets that exceeds		number of suppliers of chicken products in Australia
demand and supply	the increase in demand could lead to an oversupply		and New Zealand.
impacting poultry pricing	of chicken, which may result in reduced prices, negatively affecting Ingham’s financial performance.	•	We carefully manage our supply of poultry to match expected demand from our customers.
	Any material decrease in the supply of chicken in the Australian and New Zealand markets resulting in an inability to service demand could lead to reduced customer service levels, which may result in reduced	•	We leverage our diverse geographic network of poultry production across Australia and New Zealand to efficiently manage the cost of supply.
	market share, negatively affecting Ingham’s financial	•	We supply into the domestic wholesale and into
	performance.		export markets, which serves as a buffer to manage
			supply excesses.
Import restrictions	Changes to import quarantine conditions in Australia	•	We contribute or respond to research on the topic
	and/or New Zealand that would allow additional		of poultry food safety and disease.
	forms of poultry to be imported could result in changes to the poultry market that would adversely impact Ingham’s financial performance.	•	We participate in discussions with industry forums and government bodies such as Australian Chicken Meat Federation (ACMF) and the Poultry Industry
	New Zealand currently relies on imported feed.		Association of New Zealand (PIANZ).
	If imports were restricted, this would raise grain
	commodities/feed costs in New Zealand and
	potentially make poultry farming unviable.
Customer mix	A change in the volume or mix of Ingham’s	•	Ingham’s commercial strategy focuses on strengthening
	business could negatively impact its operational		core customer relationships, sustainably building new
	or commercial performance.		business and diversifying its revenue streams.
Assets stranded	Ingham’s may be locked into long‑dated leases	•	Ingham’s base network plan has been developed
geographically or	that do not align with future operating requirements		to more effectively manage the future network.
due to new business models / technology	and / or the economic life of the assets.	•	We are also exploring divest / exit decisions in places that do not align with the overall network plan.

OPERATIONAL RISKS:

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RISK IMPLICATION MITIGATING ACTIONS
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People safety	Ingham’s is subject to inherent operational risks that	•	We have a comprehensive Work Health and
	could potentially result in serious injury or fatality of		Safety Management System. This includes our
	employees, contractors or members of the public.		Golden Safety Rules, which help our people
			identify critical controls that must be in place
			before undertaking work at Ingham’s.
		•	Our Safety for Life program is anchored around four
			pillars: zero harm culture, risk reduction strategies,
			safety management system enhancement and
			improved workers’ compensation performance.
		•	Safety measures within our balanced scorecard
			are used as a performance gate for executives for
			significant components of our short‑term incentive plan.

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Material business risks (continued)

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RISK IMPLICATION MITIGATING ACTIONS
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Business interruption	Interruption to our operations can be caused by a	•	We monitor and respond to threats in the continuity
e.g. industrial action,	range of issues including but not limited to natural		of our operations.
pandemic	disaster, supply chain, industrial action and other regulatory incidents, loss of plant, cyber incident or IT system failure and pandemic / epidemic.	•	We undertake a range of business continuity exercises to test the ability of our business to respond effectively.
	Business interruptions could impact our operations,	•	We are in the process of investing in our technology
	our partners and our employees and may cause		infrastructure and applications and regularly review
	business and reputational damage as well as		our IT recovery plans to enhance our offsite back‑up
	significant financial impacts.		and recovery capabilities.
	The disruption of COVID‑19 has had impacts to	•	We continue to monitor and manage our business in
	consumer demand for poultry products. In addition,		response to COVID‑19 pandemic impacts, which could
	any loss of our operational sites for an extended		have a material impact to Ingham’s and the safety of
	period could have a material financial impact on		our employees if not managed effectively.
	our business.
Food safety and	Poor product quality or unsafe products and	•	We have a food safety and quality governance
disease outbreak	processes may potentially result in injury, harm		framework and dedicated quality and food safety
	or illness to consumers, claims, regulatory impacts		staff across the business to meet both mandatory
	and significant reputational damage.		and internal food safety requirements.
	Outbreak of an avian disease in Ingham’s flocks or	•	Ingham’s holds accreditation to the BRC Global Food
	within the same geographic regions may affect the		Standard, with all sites achieving A or AA ratings.
	use and transportation of the affected stock and disrupt supply causing financial loss.	•	Ingham’s operates a comprehensive Hazard Analysis Critical Control Points (HACCP) framework across the
	If poultry livestock of Ingham’s or a competitor		entire supply chain.
	became unsafe or were perceived as being unsafe, reduced demand for poultry products could follow.	•	Procedures are in place for how we effectively manage, handle, store, recall and withdraw products.
		•	Our Product Pride program involves quality assurance,
			training and awareness across the whole supply chain.
		•	Strong biosecurity measures are in place to control
			the risk of infections on our sites.
		•	We have documented procedures to manage
			and minimise the impact should an avian disease
			outbreak occur.
Animal welfare	Poor animal welfare practices or industry activism	•	Our commitment to high animal welfare standards is
	could result in significant reputational damage for		underpinned by comprehensive programs developed
	Ingham’s and the poultry industry more broadly.		in collaboration with international animal welfare
			experts, retailers and regulatory authorities.
		•	We hold accreditation with the Royal Society for the
			Prevention of Cruelty to Animals (RSPCA) in Australia
			and Society for the Prevention of Cruelty to Animals
			(SPCA) in New Zealand in line with their Approved
			Farming Scheme standards.
		•	100% of Ingham’s Australian chicken is certified
			by RSPCA or Free Range Egg and Poultry Australia
			(FREPA). All Free Range farms hold an additional
			accreditation to the FREPA standards.

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Material business risks (continued)

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Drought and grain	If grain supply is reduced following a prolonged	•	Ingham’s national production footprint mitigates the
prices	period of drought, higher grain prices may arise		risk of concentrated production in one region. In
	from lower grain production levels resulting in		addition, the diversity of grain suppliers across the
	higher input costs for Ingham’s.		regions provides access to multiple grain supply
	Ingham’s may be impacted by limited availability		chains, further mitigating the risk of grain shortages.
	or higher prices for imported products used in	•	Input costs, including grain price and other
	feed production.		commodities, are partially managed through cost pass
			through arrangements where available. There may
			be instances where these are not able to be passed
			through or are delayed and this can contribute to the
			potential risk of margin erosion.
		•	For imported products, we carefully manage our
			lead times and use more than one supplier for key
			ingredients used in feed production.
Plant failure	A range of events, including natural disaster,	•	We have a rolling program of regular site inspections
	fire, explosion and other force majeure related		of a plant’s pressure vessels, boiler, gas supply and
	events, may result in the failure of one of our plants.		fire detection and response.
	Our plants include feed mills, primary processing plants, and further processing plants and hatcheries.	•	Ingham’s would address any loss of plant using its business continuity plans, disaster recovery and
			network planning. This would mean that spare
			capacity is identified at a group level to accommodate
			the loss of the largest site.
Customer	A sizeable loss of demand, or a missed opportunity	•	We focus on delivering to customer expectations.
relationships	to increase our demand, from one of our largest customers could have a significant financial consequence for Ingham’s.	•	We extend supply contracts to key customers to both mitigate the risk of loss of business and allow for effective network planning.
		•	Ingham’s has a centralised customer complaints
			management process and network‑wide tracking and
			remediation of outcomes arising from customer audits.
		•	Quality assurance teams undertake comprehensive
			quality assurance testing of products prior to customer
			approvals.
Information asset	Information assets may fail, including as a result	•	We have a range of IT and IT security controls within
failure and cyber	of a cyber‑attack, resulting in the inability to operate		an overarching IT risk management framework. We
	and support critical business processes.		regularly test our disaster recovery plans and have
			rolled out a cyber awareness program during the
			reporting period.
		•	We have a forward‑looking strategy to refresh legacy
			information assets.
Legal, regulatory	Our operations are subject to a range of legal and	•	We have a range of policies, procedures and plans to
and governance	regulatory matters including work health and safety,		help us manage our legal and regulatory compliance.
	food safety, consumer protection, competition and the environment.	•	Our Code of Conduct sets out the guiding principles for ‘doing the right thing’ and living up to our Principles
			of ‘open, honest and collaborative’.
		•	We evaluate and respond to legal proceedings and
			claims, with our response correlated to the potential
			risk exposure.
		•	We monitor and engage with government and
			regulatory bodies on policy, regulatory compliance
			and impacts to the regulatory environment.

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OPERATING AND FINANCIAL REVIEW ( CONTINUED )

Strategy and future prospects

The Group’s goal is to be the most trusted food company in our market. Our Purpose is to ‘Nourish our World’, the world of our people, products, partners, planet and to deliver operational results to ensure fuel for our growth for our investors and stakeholders alike.

This Purpose underpins our strategy and our commitment to making a positive difference by:

• Providing our people with a high‑performing, supportive, safe work environment and culture;

• Nourishing our consumers and customers with high‑quality trusted products;

• Collaborating with our partners – customers and suppliers – to work in new ways;

• Reducing, reusing and recycling to create a better tomorrow for our planet; and

• Growing the business and rewarding our shareholders by reinvesting for growth and generating profit.

Our people are guided by our Principles – they are open, honest and collaborative in the way they work.

With a team that is united by a common Purpose and Principles, we are committed to achieving our Ambition to be the most trusted food producer in our market.

As Australia and New Zealand’s largest integrated poultry producer, we want to stay true to our Purpose. This is a responsibility that goes beyond just producing high‑quality products for our consumers. We know that when we come together and work for a common cause, we can deliver the best possible products, time after time.

Our strategy is to deliver more consistent, predictable and reliable returns, and we have developed a set of pillars that set the framework for how we will achieve this.

Our strategic pillars are as follows:

• Optimise the Core: deliver asset efficiency with capital discipline; implement and apply a culture of continuous improvement; refine and re‑frame our customer relationships; maximise the value of every asset we deploy and every bird we produce.

• Innovate to Grow: manage our core new product development and portfolio mix to maximise our margins; build poultry and protein products and brands to deliver growing margins and to offset cost volatility mostly found in commodity products.

• Invest in the New: be flexible, disciplined and well capitalised to take advantage of growth opportunities in the plant and animal protein category.

The primary enablers to deliver our strategy are centred on the Consumer, Cost and our Culture.

Our aim is to continue to deliver efficiency in our network and operations as we strive to simplify our business and apply our much‑improved integrated business planning model. We are committed to evolving into a consumer‑centric organisation where we align and support our customers’ growth in the poultry category whilst we also invest in new value‑added products and categories.

Our culture is a key to our success. We believe in and apply the principles of being open, honest and collaborative in everything we do. We believe that by engaging and growing our people, we will continue to deliver success and strong returns into the future.

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LETTER FROM THE CHAIR OF THE PEOPLE & REMUNERATION COMMITTEE

The overall outcome of the FY19‑FY21 LTIP was vesting of 13.97% of the award. Of the Earnings Per Share (EPS) tranche, 0% vested. However, as Ingham’s was positioned at the 53rd percentile against its comparator group for Total Shareholder Return (TSR), 55.90% of the Relative TSR measure vested. For further information by individual Executive KMP see page 79.

DEAR SHAREHOLDER,

behaviour in line with our purpose and values. Operating as an essential service providing quality food to our customers, we were able to keep our frontline people employed and we did not receive any JobKeeper payments in Australia. In New Zealand, we did not receive JobKeeper‑style payments, however, we did pass on a Government subsidy to our people aged 70+ and also for those who were immune compromised, to support them to stay at home and adhere to the Government guidance.

On behalf of the Board of Directors, I am pleased to present our Remuneration Report for the financial year 2021, which summarises Inghams Group Limited’s remuneration strategy and outcomes for Executive Key Management Personnel (Executive KMP) and Non‑Executive Directors.

Government guidance. SUCCESSFUL TRANSITION TO A NEW CHIEF EXECUTIVE We appreciate the exceptional efforts of our people as they rapidly adapted to the OFFICER AND MANAGING changing external environment and delivered DIRECTOR excellent customer service, strong financial results and improved returns to shareholders Andrew Reeves succeeded Jim Leighton as in FY21. CEO / MD from 29 March 2021. Jim remained

OUR YEAR

Ingham’s delivered strong financial results in FY21, achieved against stretching targets and in a very volatile pandemic environment. These results would not have been possible without the dedication of all our people and the leadership of our passionate and committed Executive Leadership Team. Our results included:

Andrew Reeves succeeded Jim Leighton as CEO / MD from 29 March 2021. Jim remained employed until 25 June 2021 to facilitate an orderly handover. Jim was paid three months of his contracted 12‑month Total Fixed Remuneration (TFR) termination payment from 29 March to 25 June, with the balance paid at 25 June 2021. The Board determined that Jim be considered a good leaver. Further details on Jim’s termination arrangements, including incentives, can be found on page 80.

• REMUNERATION OUTCOMES

• • Increasing revenue by 4.4% to – SHORT‑TERM INCENTIVE $2.7 billion; PLAN (STIP) AND LONG‑TERM

• • Increasing Earnings Before Interest Taxes, INCENTIVE PLAN (LTIP) Depreciation and Amortisation (EBITDA) by 14.4% to $443.9 million;

• Increasing revenue by 4.4% to $2.7 billion;

The overall STIP Balanced Scorecard outcome for FY21 was 57.5% against the maximum STIP award. For Executive Key Management Personnel (KMP), their individual final STIP outcome was differentiated by their Individual Multiplier ratings. In line with Ingham’s remuneration framework and policies, the fatality at our Bolivar site was treated as a significant safety incident and the safety component of STIP was reduced to 0%. Both the former and current Chief Executive Officer and Managing Director (CEO/MD) (as well as Managers directly accountable for the Bolivar site) had further discounts applied to their awards as a result of the fatality because of the leadership responsibility placed upon them for ensuring workplace health and safety. The external investigations into this matter are not complete. Once complete, the Board will consider the findings and the suitability of these actions. Beyond this downward adjustment applied in FY21 to the STIP award, no discretion has been applied to any remuneration outcomes in FY21.

• Increasing Net Profit after Tax by 107.7% to $83.3 million;

Andrew Reeves’ Total Fixed Remuneration (TFR) at $1.1 million is 27% lower than the former CEO / MD, and his total potential remuneration at $4.4 million is 35% lower. Andrew was eligible for a pro‑rata FY21 Short‑Term Incentive Payment (STIP) award, however, his first Long‑Term Incentive Payment (LTIP) grant will be the upcoming FY22 LTIP award being put to shareholders for approval at the 2021 Annual General Meeting (AGM). Andrew’s STIP and LTIP maximum opportunity are both 150% of TFR. Andrew’s remuneration package reflects his knowledge, skills and highly relevant experience and was referenced against external benchmarking data to ensure his package is competitive in the market. Further information on Andrew’s remuneration package and how this was determined can be seen on page 70.

• Improving Earnings Per Share (basic) by 107.9% to 22.43 cents per share; and

• Increasing Dividends (fully franked) by 17.9% to 16.5 cents per share.

These results were overshadowed by a fatality on 17 May 2021, when one of our people tragically died in a truck incident at our South Australian Bolivar site. The Board and all levels of management have spent (and will continue to spend) considerable time and effort to investigate this incident and introduce further risk mitigants at all of our sites. We are also assisting SafeWork SA with their ongoing investigations (at the time of writing). Without exception, the safety of our people remains our top priority.

We withstood the ongoing impact of COVID‑19 by prioritising the health, safety and wellbeing of our people, and focusing on building a more constructive culture to drive workforce engagement, efficiency and innovation. Key to our success was setting high expectations both for our leaders’ performance and their

For further information on the STIP outcomes see page 74.

56 INGHAM’S ANNUAL REPORT 2021

DIRECTORS’ REPORT CONTINUED

RESPONSE TO THE STRIKE AGAINST THE FY20 REMUNERATION REPORT AND UNAPPROVED FY20 TRANSFORMATIONAL INCENTIVE PLAN (TIP)

The Board of Directors has carefully considered the feedback it received regarding the FY20 Remuneration Report and FY20 TIP structure, both of which were not approved by shareholders at the 2020 AGM. Since receiving the first strike, the Board Chair and I engaged with numerous stakeholders before making changes to the remuneration structure and disclosures within the FY21 report. The following changes aim to address the main concerns within the FY20 Remuneration Report and outcomes:

• The FY20 Transformational Incentive Plan (TIP) has proposed amendments that will be voted on by shareholders at the 2021 AGM. These will reflect the original FY20 LTIP award that was approved by shareholders at the 2019 AGM. More information on this can be found on page 77.

• No one‑off bonus awards have been granted to any Executive KMP in FY21.

• No increase to Executive KMP TFR or Board Fees in FY21.

• A minimum shareholding requirement to be implemented from FY22 for Non‑Executive Directors, Executive KMP and Senior Management.

• A mandatory 12‑month equity deferral component introduced into the STIP award for Executive KMP and Senior Management.

• Improved transparency and disclosure in a redesigned Remuneration Report to meet shareholder expectations.

• Disclosure of performance measures enhanced and expanded in the STIP Balanced Scorecard and the Individual Multiplier. In addition to the pre‑existing underlying pre AASB 16 EBITDA measure (60% weighting) there are now three other measures:

• A people safety measure (10% weighting) in Total Recordable Injury Frequency Rate (TRIFR);

• A food safety measure (10% weighting)– CPmKg (Complaints per million kg); and

• Core Poultry Sales Volume Growth (20% weighting).

Individual scorecards are also modified by an executive’s achievement against our desired leadership behaviours (Individual Multiplier). This assessment can increase or reduce the overall STIP outcome. The rationale behind incorporating these measures into the STIP Plan is to reward Executive KMP on both the results they deliver (the ‘what’) and the way they deliver them (the ‘how’).

• LTIP targets for the FY22‑FY24 LTIP award at grant to be disclosed from the 2021 AGM onwards. This will enhance disclosure and provide shareholders with the ability to vote on the respective resolution with full transparency of the grant and the performance measures at the beginning of the performance period rather than retrospectively.

• For more information on the changes implemented, please see page 60.

INCENTIVE PLANS – FINANCIAL MEASURES AND AASB 16

For FY21, the financial results for Ingham’s have been provided in both a pre AASB 16 and post AASB 16 format and, consistent with prior years, both the FY21 STIP and FY21‑FY23 LTIP have financial measures that are based on pre AASB 16 financial outcomes. In FY23, Ingham’s will review its incentive structure to align to post AASB 16 financial results.

This change cannot be made earlier due to the substantial complexity in selecting the most appropriate financial measures to make this change and the impact to FY23 STIP and FY23‑FY25 LTIP. The Board is undertaking thorough analysis and modelling to ensure that any changes to the performance measures best align with company and shareholder value creation.

Ingham’s will continue to disclose both pre and post AASB 16 financial results in FY22 and consistently both the FY22 STIP and FY22‑FY24 LTIP will have financial measures that are based on pre AASB 16 financial outcomes. The Board believes management will be neither advantaged nor disadvantaged by adopting this approach.

OUR REMUNERATION STRATEGY SUPPORTS INGHAM’S BUSINESS STRATEGY

The Board is committed to ensuring the remuneration strategy reflects good governance, consultation with key stakeholders, and is transparent in its design to support the business strategy and drive sustainable outperformance for shareholders over the short, medium and long‑term. It strongly aligns to shareholder’s interests by incorporating significant equity components to encourage executives to behave like owners of the business – focused on sustainable, long‑term value creation.

On behalf of the Board, we invite you to read the Report and we look forward to receiving your feedback at the Annual General Meeting (AGM).

Yours faithfully,

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Helen Nash Chair, People & Remuneration Committee

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REMUNERATION REPORT – AUDITED

Contents

1	REMUNERATION REPORT OVERVIEW	59
2	RESPONSE TO SHAREHOLDER FEEDBACK
	AND THE FIRST STRIKE OF FY20	60
3	HOW REMUNERATION IS GOVERNED	61
4	OVERVIEW OF COMPANY PERFORMANCE	63
5	OVERVIEW OF EXECUTIVE REMUNERATION	66
6	EXECUTIVE REMUNERATION FRAMEWORK
	AND OUTCOMES	69
7	OTHER KEY INFORMATION	79
8	OVERVIEW OF NON‑EXECUTIVE
	DIRECTOR REMUNERATION IN FY21	80
9	STATUTORY AND SHARE‑BASED REPORTING	81

58 INGHAM’S ANNUAL REPORT 2021

DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT – AUDITED ( CONTINUED )

1 Remuneration report overview

The Remuneration Report has been audited as required by section 308 (3c) of the Corporations Act 2001 .

This Report covers Non‑Executive Directors and Executive Key Management Personnel (KMP) of Ingham’s who are responsible for determining and executing the business strategy. The Executive KMP comprises the Chief Executive Officer and Managing Director (CEO/MD), Chief Financial Officer (CFO) and Chief Executive Officer, New Zealand (CEO, NZ) as well as Non‑Executive Directors.

Executive KMP are authorised and responsible for planning, directing and controlling Ingham’s activities, directly or indirectly, including any director (whether executive or otherwise) of Ingham’s.

The table below outlines the Non‑Executive Directors of Ingham’s and any movement during FY21.

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NAME POSITION TERM
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Non‑Executive Directors
Peter Bush	Non‑Executive Chairman	Full financial year
Rob Gordon	Non‑Executive Director	Full financial year
Michael Ihlein	Non‑Executive Director	Full financial year
Jackie McArthur	Non‑Executive Director	Full financial year
Helen Nash	Non‑Executive Director	Full financial year
Linda Bardo Nicholls AO	Non‑Executive Director	Full financial year
Andrew Reeves	Non‑Executive Director	To 29 March 2021

The table below outlines the Executive KMP of Ingham’s and any movement during FY21.

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CURRENT EXECUTIVE KMP POSITION TERMS AS EXECUTIVE KMP
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Executive Director
Andrew Reeves	Chief Executive Officer / Managing Director	From 29 March 2021
Jim Leighton	Chief Executive Officer / Managing Director	To 29 March 2021
Senior Executives
Jonathan Gray	Chief Executive Officer, New Zealand	Full financial year
Gary Mallett	Chief Financial Officer	Full financial year

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DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT – AUDITED ( CONTINUED )

2 Response to shareholder feedback and the first strike of FY20

In FY20, the company received a first strike against the Remuneration Report, and has addressed key items of concern that were raised as follows:

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REMUNERATION COMPONENT ISSUE RAISED INGHAM’S RESPONSE
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REMUNERATION COMPONENT	ISSUE RAISED INGHAM’S RESPONSE
Total Fixed Remuneration (TFR)	Quantum of CEO / MD TFR continues to be significantly higher than peers As announced on 29 March 2021, our new CEO / MD, Andrew Reeves, was appointed after the departure of Jim Leighton. Andrew’s TFR is set 27% lower than Jim’s previous TFR and has been determined taking into consideration a number of contributing factors, including a rigorous benchmarking process. Please find more information regarding this on page 70.
STIP Plan	Discretion to waive the STIP gateway and award bonuses The Board acknowledges the feedback received regarding the outcomes and the application of STIP discretion in FY20. While Board discretion remains an important element of the Board’s mandate, discretion will only be applied in a manner that takes into consideration the overall business performance and shareholder experience in a given year.
	Lack of transparency of targets Ingham’s remains committed to ensuring it discloses all performance targets where commercial sensitivity does not prohibit this. The Board has continued to make improvements to the STIP structure in FY21 and beyond, and the levels of disclosure and transparency as seen in this report.
LTIP Plan	Lack of disclosure of performance measures and high quantum of the LTIP plan For the current LTIP awards in place, the targets will be disclosed retrospectively at the conclusion of the performance period. The Board has, however, committed to disclosing the targets for the LTIP at the time of grant from the 2021 AGM, where the FY22‑24 performance measures will be disclosed. This practice will continue for each future LTIP grant, with performance measures to be provided at the time of grant.
FY20 LTIP Plan – TIP	Lack of disclosure regarding the Transformation Incentive Plan (TIP), with a high weighting towards undisclosed strategic objectives Upon receiving the feedback from investors and proxy advisors following the 2020 AGM, the Board undertook an extensive review of the TIP structure. The Board determined, following this review, to amend the TIP award (which will be subject to shareholder approval at the 2021 AGM) and subsequently reverted to the FY20 LTIP structure, metrics and vesting scales as approved at the 2019 AGM. More details on this structure can be found on page 77.
One‑off bonus awards	Substantial one‑off bonuses granted during FY20 The Management Recognition Incentive (a legacy FY19 award) and the sign‑on bonus were the one‑off awards in question, with the Management Recognition Incentive an item that pre‑dated FY20. No one‑off bonus awards have been granted in FY21. Any approval of one‑off awards is at the discretion of the Board. The Board retains discretion to approve one‑off awards and only does so in limited circumstances in the best interests of the business and shareholders.
Minimum Shareholding Requirement	No minimum shareholding requirements The Board has introduced minimum shareholding requirements that need to be satisfied after five years from the latter of either the commencement of this policy or employment with Ingham’s, whichever is longer. The quantum required to be held by KMP are as follows: Non‑Executive Directors 100% of Base Director Fees CEO / MD 100% of TFR Other KMP 50% of TFR

60 INGHAM’S ANNUAL REPORT 2021

DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT – AUDITED ( CONTINUED )

3 How remuneration is governed

A. REMUNERATION DECISION MAKING

The Board, People and Remuneration Committee, Executive KMP and Management work together to apply our Remuneration Governance Framework (see below) and ensure our strategy supports sustainable shareholder value. Our Framework is designed to support our purpose, principles, strategy and our long‑term approach to creating value for our shareholders, customers and the community.

Ingham’s has several policies that govern the framework and promote responsible management and conduct. These policies include an Inclusion and Diversity Policy, Continuous Disclosure Policy and Securities Dealing Policy. Further information is available at: http://investors.Inghams.com.au.

Membership of the Committee during the period 27 June 2020 to 26 June 2021 was comprised of the following four independent Non‑Executive Directors and chaired by an independent Non‑Executive Director for the whole year:

• Helen Nash Independent Non‑Executive Committee Chair

• Linda Bardo Nicholls AO Independent Non‑Executive Committee Member

• Jackie McArthur Independent Non‑Executive Committee Member

• • Michael Ihlein Independent Non‑Executive Committee Member

The Committee’s Charter allows the Committee access to specialist external advice about remuneration structure and levels and is utilised periodically to support the remuneration decision‑making process.

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3 How remuneration is governed (continued)

REMUNERATION GOVERNANCE FRAMEWORK

INGHAM’S BOARD

• Responsible for the remuneration strategy and outcomes for executives and Non‑Executive Directors

• Reviews and approves recommendations from the People and Remuneration Committee

• Approves the appointment of Non‑Executive Directors

PEOPLE AND REMUNERATION COMMITTEE

• Four Non‑Executive Directors, all of whom are independent, including the Chair of the Committee, make recommendations to the Board on remuneration strategy, governance and policy for executives and Non‑Executive Directors

• Key responsibilities of the Committee are as follows: 1. Approve major changes and developments in the remuneration policies and superannuation arrangements for the Group.

• Approve the appointment of remuneration consultants for the purposes of the Corporations Act 2001 .

NOMINATION COMMITTEE

• Develops and implements a process to evaluate the performance of Non‑Executive Directors

• Leads process to appoint Non‑Executive Directors

• Take appropriate action to ensure the Committee, Board and management have available to them sufficient information and external advice to ensure informed decision‑making regarding remuneration.

• Review and recommend to the Board the Remuneration Report prepared in accordance with the Corporations Act 2001 for inclusion in the annual Directors’ Report.

• Oversee and recommend to the Board an equitable, consistent and responsible reward approach – including incentive targets for achieving remuneration outcomes – have regard to the performance of Ingham’s, the performance of the executives and the general pay environment.

INDEPENDENT EXTERNAL CONSULTANTS

CEO/MD AND CHIEF PEOPLE OFFICER

• Provide external independent advice, information and recommendations relevant to remuneration decisions where required.

• Provided benchmarking data on executive remuneration to the People and Remuneration Committee.

• Advisors do not provide a remuneration recommendation as defined in Section 9B of the Corporations Act 2001 and Advisors did not provide a remuneration recommendation for FY21.

Provides information to the People and Remuneration Committee for the Committee to recommend:

1. Incentive targets and outcomes

2. Remuneration Policy

3. Short and long‑term incentive participation eligibility

4. Individual remuneration and contractual arrangements for executives

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REMUNERATION REPORT – AUDITED ( CONTINUED )

4 Overview of company performance

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UNDERLYING TSR
NPAT [1]
EBITDA [1]
26.89% GROWTH
$101.2M
$209.6M FROM FY19
IN FY21
IN FY21 TO FY21
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FY17
FY21 FY21 FY20 FY20 FY19 FY19 FY18 FY18 FY17 PRO
STATUTORY UNDERLYING [1] STATUTORY UNDERLYING [1] STATUTORY UNDERLYING [1] STATUTORY UNDERLYING [1] STATUTORY FORMA
Revenue ($’M) 2,668.8 2,668.8 2,555.3 2,555.3 2,489.8 2,487.8 2,373.9 2,341.4 2,373.8 2,383.9
EBITDA ($’M) 443.9 209.6 387.8 179.7 242.2 208.6 212.0 202.7 160.3 195.0
Profit after tax ($’M) 83.3 101.2 40.1 78.8 126.2 103.2 114.6 108.0 59.1 102.0
Dividends per year
(cents per share) 16.5 16.5 14.0 14.0 19.5 19.5 21.1 21.1 2.6 2.6
Return of capital
(cents per share) – – – – 33.0 33.0 – – – –
Movement in share
price post‑IPO
(cents per share) [2] 84.0 – 5.0 – 87.0 – 67.0 – 23.0 –
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(1) The underlying pre AASB 16 excludes AASB 16 results, the loss on sale of assets and restructuring charges. The above mentioned items have been tax effected to determine an underlying Net Profit after Tax (NPAT) to allow shareholders to make a meaningful comparison of the Group’s underlying NPAT performance against prior year.

(2) Movement in share price is calculated by taking the last price of the current financial year since the initial public offering price of $3.15.

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DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT – AUDITED ( CONTINUED )

4 Overview of company performance (continued)

NON‑FINANCIAL COMPANY PERFORMANCE

YEAR‑ON‑YEAR LTIFR AND TRIFR

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49
CUSTOMER COMPLAINTS FY18 TO FY21
Group AUS NZ Linear Group Linear (AUS) Linear (NZ)
5000
4750
4500
4250
22 4000
3750
3500
17 17 3250
3000
2750
10 2500
8 2250
7 6 6 2000
5 4 1750
2 1500
1250
1000
15/16 16/17 17/18 18/19 19/20 20/21 750
500
250
0
LTIFR TRIFR Linear (LTIFR) Linear (TRIFR) 2018 2019 2020 2021
FIVE‑YEAR TOTAL SHAREHOLDER RETURN (TSR) PERFORMANCE
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
-10.00%
-20.00%
06 NOV 1607 DEC 1612 JAN 1715 FEB 1720 MAR 1724 APR 1726 MAY 1729 JUN 1701 AUG 1701 SEP 1704 OCT 1706 NOV 1707 DEC 1712 JAN 1815 FEB 1820 MAR 1824 APR 1828 MAY 1830 JUN 1801 AUG 1803 SEP 1804 OCT 1806 NOV 1807 DEC 1814 JAN 1915 FEB 1920 MAR 1924 APR 1928 MAY 1901 JUL 1901 AUG 1903 SEP 1904 OCT 1906 NOV 1909 DEC 1914 JAN 2017 FEB 2019 MAR 2023 APR 2026 MAY 2029 JUN 2030 JUL 2001 SEP 2002 OCT 2004 NOV 2007 DEC 2012 JAN 2115 FEB 2118 MAR 2122 APR 2125 MAY 2128 JUN 21
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64 INGHAM’S ANNUAL REPORT 2021

DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT – AUDITED ( CONTINUED )

4 Overview of company performance (continued)

4.1 ACTUAL REMUNERATION TABLE (NON‑STATUTORY)

The remuneration earned by Executive KMPs in FY21 and FY20 are set out below. This information is relevant as it provides shareholders with a view of the remuneration ‘paid’ to executives in FY21 for performance. This information has not been prepared in accordance with the accounting standards and differs from the statutory tables presented on page 81.

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TOTAL
OTHER ACTUAL
FIXED SHORT‑TERM LTI LONG‑TERM REMUNER‑
REMUNERATION [1] STI [4] TOTAL CASH BENEFITS [2] VESTED [3] BENEFITS ATION
YEAR $000 $000 $000 $000 $000 $000 $000
Chief Executive Officer
and Managing Director
Andrew Reeves [5] 2021 287 – 287 – – – 287
2020 – – – – – – –
Former Chief Executive
Officer and Managing
Director
Jim Leighton 2021 1,561 – 1,561 1,255 – – 2,816
2020 1,679 – 1,679 31 – 23 1,733
KMP Senior Executives
Gary Mallett 2021 610 45 655 – – – 655
2020 430 – 430 100 – 7 537
Jonathan Gray 2021 550 52 602 271 50 – 923
2020 526 – 526 – 41 1 568
Total Actual ‘Paid’ 2021 3,008 97 3,105 1,526 50 – 4,681
Remuneration
2020 2,635 – 2,635 131 41 31 2,838
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(1) Fixed remuneration entitlements include salary, super, annual leave and sick leave entitlements.

(2) Jim Leighton’s FY21 other short‑term benefits consist of a termination benefit $1,125,000 and relocation and expatriate benefits of $129,503. Jonathan Gray’s FY21 benefit reflects a relocation benefit of NZ$281,472 for Jonathan Gray moving to New Zealand urgently at the company’s request that includes selling costs and loss in value upon the sale of his Australian home.

(3) LTI vested represents the portion of the grant date fair value of share rights vested. The amount recognised is adjusted to reflect the expected number of instruments that will vest for non‑market based performance conditions. No adjustment for non‑vesting is made for failure to achieve the relative TSR performance hurdle, as this is taken into account in the fair value at grant date.

(4) STIP paid during the financial year. The amount disclosed for FY21 reflects the STIP paid in FY21 for FY20 performance.

(5) Andrew Reeves’ fixed remuneration excludes $121,391 in Board fees and $11,712 in Superannuation for FY21 for the period he served as a non‑executive director.

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DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT – AUDITED ( CONTINUED )

5 Overview of executive remuneration

A. HOW WE DETERMINE EXECUTIVE REMUNERATION POLICIES AND STRUCTURES

The Remuneration Governance Framework is designed to attract, motivate and retain high performing executives. The remuneration for Executives, including Executive KMP, is set on appointment to the role and reviewed annually. We set both fixed and total remuneration by considering a range of factors including experience, capabilities and performance in the role, relevant market data, talent availability and the role’s impact. The variable components of Executive remuneration are closely linked to successful execution of strategic objectives, balancing delivery in both the short and long‑term and linking pay primarily to shareholder interests. The key principles supporting Ingham’s remuneration framework are:

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PRINCIPLE OBJECTIVE APPLICATION
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Competitive Remuneration	Reward Executives competitively for their	•	Total remuneration is based on the Executive’s
	contributions to Ingham’s success, ensuring		capabilities and experience.
	consistency with shareholder, community and consumer expectations.	•	Remuneration is benchmarked against appropriate peer companies and independent remuneration
			data from a variety of sources.
		•	The Board approves recommendations on total
			remuneration packages.
Performance Driven	Executives are rewarded for achieving	•	Variable rewards are intended to provide a robust link
	business outcomes that support sustainable		between remuneration outcomes and key drivers of
	growth in shareholder wealth only when this		long‑term shareholder value.
	is achieved through the expected behaviours.	•	Variable rewards are designed to motivate strong
			performance against short‑term and long‑term
			performance objectives.
Behaviour Driven	Executives are rewarded for Ingham’s	•	An Individual Multiplier has been applied to the STIP
	performance when the manner in which		award to ensure the behaviours of each executive
	this performance is achieved is aligned with		are driven to create strong, sustainable performance
	Ingham’s purpose, principles and expected		for both the Company and shareholders. Three key
	behaviours. Only when we achieve our results		principles form the underlying basis of this behaviour
	through these expected behaviours will		model, requiring executives to be Open, Honest and
	Ingham’s fully realise its strategic objectives.		Collaborative.
		•	All incentive awards are subject to malus and
			clawback provisions to ensure that no rewards are
			received by Executives where the outcomes are
			materially misaligned with our values, code of conduct
			or other circumstances detailed on page 38.

B. OUR EXECUTIVE REMUNERATION PRINCIPLES, POLICIES AND STRUCTURES

REMUNERATION PRINCIPLES

• Contribute to Ingham’s key strategic business objectives and desired business outcomes.

• Align the interest of employees with those of shareholders.

• Assist in attracting and retaining employees required to execute the business strategy by providing competitive remuneration and benefits.

• Manage risks in rewarding desired behaviours and balance of short and long‑term focus.

• Support Ingham’s high performance culture driven by desired leadership behaviours.

• Develop an ownership mindset.

• Be simple, clear and easily understood.

Ingham’s Executive remuneration consists of TFR, short‑term incentives (with the deferred component being into rights) and long‑term incentives in the form of performance rights.

Non‑Executive Directors do not have a variable performance related component to their remuneration, hence none of their remuneration is at risk.

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DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT – AUDITED ( CONTINUED )

5 Overview of executive remuneration (continued)

B. OUR EXECUTIVE REMUNERATION PRINCIPLES, POLICIES AND STRUCTURES (CONTINUED)

INGHAM’S REMUNERATION STRATEGY AND FRAMEWORK

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OUR
OBJECTIVE IS
TO NOURISH OUR WORLD
OUR OBJECTIVE IS TO DELIVER CONSISTENT AND RELIABLE RETURNS THROUGH OUR
FOCUS ON OUR STRATEGIC PILLARS
STRATEGIC PILLARS
OPTIMISE TRANSFORM CREATE
THE CORE FOR TOMORROW THE NEW
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OUR PILLARS ARE REFLECTED IN PERFORMANCE MEASURES ACROSS OUR INCENTIVE PLANS

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EBITDA ACHIEVEMENTS EARNINGS
CORE POULTRY SALES VOLUME OF GROWTH PER SHARE
INITIATIVES (EPS) GROWTH
PEOPLE SAFETY
AND BUSINESS RETURN ON
FOOD SAFETY PRIORITIES INVESTED
CAPITAL
(ROIC)
WITH OUTCOMES DIRECTLY DRIVING EXECUTIVE REMUNERATION
FIXED SHORT‑TERM LONG‑TERM TOTAL
REMUNERATION INCENTIVE INCENTIVE REMUNERATION
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FY21 SHORT‑TERM INCENTIVE PLAN

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BALANCED SCORECARD
FINANCIAL NON‑FINANCIAL TOTAL STIP
EBITDA SAFETY INDIVIDUAL STIP POOL
GATE MODIFIERS MEASURES MEASURES MULTIPLIER MODIFIER (CASH+DEFERRED
(80%) (20%) RIGHTS)
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DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT – AUDITED ( CONTINUED )

5 Overview of executive remuneration (continued)

B. OUR EXECUTIVE REMUNERATION PRINCIPLES, POLICIES AND STRUCTURES (CONTINUED)

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FY21 – FY23 LONG‑TERM FY21–FY23 LTIP ROIC RELATIVE TSR (INGHAMS TOTAL LTI
INCENTIVE PLAN PERFORMANCE (50%) (50%) ORDINARY
RIGHTS GRANT SHARES)
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The graphs below set out the remuneration mix for the CEO / MD and Executives at Ingham’s in FY21, illustrating the fixed and variable proportions of remuneration at target and maximum levels.

KMP REMUNERATION MIX AT TARGET

CEO / MD

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TFR 36.4% STI 36.4% LTI 27.2%
50% Deferred Performance
50% Cash
Rights Rights
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CFO

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TFR 54.1% STI 27.0% LTI 18.9%
30% Deferred Performance
70% Cash
Rights Rights
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CEO, NZ

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TFR 54.1% STI 27.0% LTI 18.9%
30% Deferred Performance
70% Cash
Rights Rights
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68 INGHAM’S ANNUAL REPORT 2021

DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT – AUDITED ( CONTINUED )

5 Overview of executive remuneration (continued)

B. OUR EXECUTIVE REMUNERATION PRINCIPLES, POLICIES AND STRUCTURES (CONTINUED)

KMP REMUNERATION MIX AT MAXIMUM

CEO / MD

CFO

CEO, NZ

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TFR 25.0% STI 37.5% LTI 37.5%
50% Deferred Performance
50% Cash
Rights Rights
TFR 40.8% STI 30.6% LTI 28.6%
30% Deferred Performance
70% Cash
Rights Rights
TFR 40.8% STI 30.6% LTI 28.6%
30% Deferred Performance
70% Cash
Rights Rights
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6 Executive remuneration framework and outcomes TOTAL FIXED REMUNERATION (TFR)

TFR is comprised of base salary, salary sacrificed items and employer superannuation contributions, in line with statutory obligations. TFR is reviewed annually taking into consideration:

• Performance and experience in role;

• Organisational level;

• Role and responsibilities;

• Impact on the business;

• Commercial outputs;

• Market benchmarking;

• Recognition of desired behaviours; and

• Risk management.

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DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT – AUDITED ( CONTINUED )

6 Executive remuneration framework and outcomes (continued)

In FY21, there was a thorough benchmarking process undertaken to assess KMP remuneration. In the lead up to the CEO / MD handover, the Board also sought external benchmarking data on setting the remuneration package for Andrew Reeves, taking into consideration previous feedback from stakeholders on the level of CEO / MD remuneration and the above key inputs. As a result, the new CEO / MD’s remuneration has been positioned well below the former CEO / MD (see below), while also acknowledging the need to position his remuneration at a level commensurate to the level of experience, skillset and knowledge that Andrew brings to Ingham’s.

COMPARISON OF INGHAM’S CURRENT CEO / MD REMUNERATION TO OUR FORMER CEO / MD

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$6.75m
$7.00m
$6.00m
Current CEO/MD Former CEO/MD
$5.00m
$4.40m
$4.00m
$3.00m
$3.00m
$2.25m
$2.00m $1.50m $1.50m $1.65m $1.65m
$1.10m $1.10m
$1.00m
$0.00m
Fixed Remuneration Target STI Maximum STI Maximum LTI Maximum Total
Opportunity Opportunity Remuneration (Fixed
Remuneration, Max STI
and Max LTI)
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Furthermore, the Board determined there would be no increases to TFR for both the CFO and CEO, NZ.

INCUMBENT	POSITION	FY20 TFR	FY21 TFR % CHANGE FROM FY20 TO FY21
Jim Leighton	CEO / MD (to 29 March 2021)	$1,500,000	$1,500,000 (Pro‑rata for time in role)(1) 0%
Andrew Reeves	CEO / MD (from 29 March 2021)	N / A	$1,100,000 (Pro‑rata for time in role) N / A
Jonathan Gray	CEO, NZ	$526,000	$549,989(2) 0%
Gary Mallett	CFO	$610,000	$610,000 0%

(1) Jim Leighton served nine months of the year as CEO / MD before his resignation and was paid his TFR on a pro‑rata basis up until this time for the period of the full financial year served. There was no increase to Jim’s TFR from FY20 to FY21.

(2) 2021 remuneration is reported in AUD based on the 12‑month average historic foreign exchange rates for FY21 being NZD 1.06 (NZD $582,998). Jonathan Gray’s remuneration from FY20 to FY21 remained unchanged in NZD, with any fluctuations year‑on‑year subject to currency conversion.

SHORT‑TERM INCENTIVE PLAN (STIP)

The STIP provides the Executive KMP and other senior members of the management team a cash or cash / equity incentive where specific outcomes have been achieved in the financial year. STIP payments are calculated as a percentage of total TFR, as per contractual arrangements and conditional on achieving performance objectives against key financial measures (underlying pre AASB 16 EBITDA and Core Poultry Sales Volume Growth) and two non‑financial measures (people and food safety).

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KEY FEATURES OF THE FY21 STIP

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TERM DESCRIPTION
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Objective	To reward participants for achieving strategic business objectives in a manner consistent with our values, purpose and ambition
Participants	Executive KMP and invited senior management
Performance Period	Financial year ended 26 June 2021
Opportunity	EXECUTIVE KMP ON TARGET MAXIMUM
	CEO / MD 100% of TFR 150% of TFR
	CEO, NZ 50% of TFR 75% of TFR
	CFO 50% of TFR 75% of TFR
Gate	For any STIP payment to be made, the financial threshold level of performance (underlying EBITDA pre AASB 16) must be met.
Modifiers	In the event of a significant people safety or food safety incident (e.g. death, major injury, major loss of plant, consumer recall, etc.) the STIP payout on the safety metrics may be reduced to nil for all participants (20% of total balanced scorecard payout reduced to nil). Board retains discretion to make further adjustments to STIP payout based on individual accountability. To ensure any payout remains fully funded, the STIP pool modifier allows STIP payouts to be adjusted to remain within the available pool.
Financial Measures (80% of balanced scorecard)	Ingham’s financial performance is measured by the Group’s underlying EBITDA (pre AASB 16) and Core Poultry Sales Volume growth. Underlying pre AASB 16 EBITDA has been assessed as the most suitable measure of financial performance for the STIP historically due to its expected alignment to the generation of cash earnings for Ingham’s and its shareholders. This is now well complemented with the Core Poultry Sales Volume measure that will further enhance the alignment between the growth of our sales volume and shareholder value creation. Our underlying pre AASB 16 EBITDA (60%) performance is measured at four levels:
	FULL YEAR TARGET % OF TARGET STIP
	Below Threshold <$190.125M 0%
	Threshold $190.125M 30%
	Target $195.0M 100%
	Maximum $214.5M 120%
	Our Core Poultry Sales Volume growth (20%) performance is measured at three levels.
	FULL YEAR TARGET % OF TARGET STIP
	Below Target <5.3% increase 0%
	Target increase of 5.3% 100%
	Maximum increase of 6.3% 120%

Non‑Financial Measures The Board reviews the performance objectives against non‑financial measures as these are key contributors (20% of balanced to short‑, medium‑ and long‑term sustainable value creation for both the Company and shareholders. The scorecard) non‑financial measures ensure the business prioritises community and consumer expectations for ensuring the safety of our employees and our products and to maintain our reputation as a high‑quality food producer.

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People Safety

The safety of our people across the business, be it Ingham’s employees or contractors, is paramount to ensure we are conducting our business in the most ethical community‑focused way. A safe and healthy workplace not only protects workers from injury and illness, it can also lower injury / illness costs, reduce absenteeism and turnover, increase productivity and quality, and raise employee morale.

Our Group TRIFR (total recordable injury frequency rate being the number of lost time injuries requiring treatment by a medical professional per million hours worked) Year‑On‑Year (YOY) Reduction (10%) performance is measured at two levels.

	FULL YEAR TARGET	% OF TARGET STIP
Target	7% reduction or a TRIFR of 8.0	100%
Maximum	9% reduction or a TRIFR of 7.0	120%

Food Safety

Reducing complaints is a cross‑organisational responsibility, not just quality and operations. Complaints have been selected as the STIP measure being an indicator of direct impact to business performance including legal, reputational and financial implications, and to ensure that all facets of the business contribute to and are invested in a successful outcome.

Our Customer Complaints YOY Reduction (10%) performance is measured at two levels.

	FULL YEAR TARGET	% OF TARGET STIP
Target	10% reduction or a CPmKg of 6.15	100%
Maximum	15% reduction or a CPmKg of 5.81	120%

Individual Multiplier

This multiplier serves to link an individual’s overall performance to the achievement of our group strategic objectives (Balanced Scorecard) by an executive behaving in line with our values, purpose and ambition. Leading the business as a senior executive at Ingham’s is about not only an individual’s contribution to business performance but also about leading through the right behaviours. Our leaders’ behaviour drives our culture and the right behaviours drive enhanced business performance.

MULTIPLIER

MULTIPLIER
	% APPLIED TO BALANCE
RATING:	SCORECARD OUTCOME
Straight‑line vesting from threshold performance	0% – 125%
to significant outperformance

The Individual Multiplier enables an Executive to achieve the maximum opportunity of the award, as without this, the maximum award an executive can receive is 120% of the target. The multiplier acts in a way that can, however, both increase or decrease the total final award. Any Individual Multiplier below 100% of target will decrease the total award, while the inverse is also true. Two examples of how the multiplier works are provided below:

1. 100/120 scorecard outcome is multiplied by a 125/125 Individual Multiplier outcome. = final outcome of 83% of maximum

2. 100/120 of target scorecard outcome is multiplied by a 75/125 Individual Multiplier outcome. = final outcome of 50% of maximum

In both circumstances, the scorecard outcome remains the same, however, the Individual Multiplier determines the final quantum of the STIP award.

Any final STIP award is subject to the performance gates, the balanced scorecard outcome and modifiers before taking these calculations into consideration.

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6 Executive remuneration framework and outcomes (continued)

Deferral	50% of CEO / MD and 30% of other KMP payouts will be deferred into rights for 12 months subject
	to a 12‑month service condition.
	The deferred component supports increased share ownership and is a risk management lever to facilitate
	Malus policy application during the deferral period.
Payment method	CEO / MD = 50% is paid as cash and the other 50% is awarded as Inghams Group Limited rights.
	Other KMP = 70% is paid as cash and the other 30% is awarded as Inghams Group Limited rights.
	Rights are deferred for a period of 12 months from the STIP payment date, 12 September 2021.
	Following the deferral period, the rights convert into Inghams Group Limited ordinary shares.
	Deferred rights are grants which are not subject to any further performance conditions except continuous
	employment. The rights will vest on 12 September 2022 and the fair value on the deferred rights is
	calculated as the market price of Ingham’s shares traded on the ASX on grant date of the deferred rights.
	The rights carry no voting or dividend rights. Shares once allocated carry the same voting and dividend
	rights as all other Inghams Group Limited ordinary shares.
Quantum of Rights	The final number of Rights awarded to each participant is calculated by dividing the face value of the deferred
	portion of their STIP award by the volume weighted average price (VWAP) of Ingham’s shares traded on the
	ASX in the 10 days after 20 August 2021. (i.e. the announcement of Ingham’s FY21 annual results.)
Discretion	At all times, the Board may exercise discretion on STIP payments. Discretion will only be applied
	in a manner that aligns the experience of both the Company and shareholders. Any discretion applied
	will be disclosed and explained in the Remuneration Report.
Cessation of employment	The following are circumstances where the Rights will be lapsed or forfeited, unless the Board
	determines otherwise:
	• where employment ends before the completion of the deferral period; or
	• where a notice of resignation is given before the completion of the deferral period, even where
	employment will end after the completion of the deferral period; or
	• if while during employment it is found that an employee has engaged in any misconduct, or serious
	breach of policy, or conduct that brings Ingham’s into disrepute, including where such conduct is
	discovered post the ending of employment and prior to the date the shares are awarded; or
	• any other circumstance which in the Board’s judgement warrants the Rights to be lapsed or forfeited.
	Where an Executive’s exit is related to any other reason (e.g. retrenchment, retirement or death), the
	Executive remains eligible on a pro‑rata basis where applicable (unless the Board determines otherwise)
	to be considered for a STIP award with regard to actual performance against performance measures
	(as determined by the Board in the ordinary course following the end of the performance period).

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6 Executive remuneration framework and outcomes (continued)

STIP OUTCOMES FOR FY21

In determining the Executive remuneration outcomes this year and how these outcomes will be delivered, the Board has considered the needs and expectations of various stakeholders, the business performance and the efforts undertaken by management to continue to trade through a year of extraordinary challenge.

FY21 BALANCED SCORECARD OUTCOME

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TYPE OF PERFORMANCE
MEASURE AND WEIGHTING KMP PERFORMANCE
AT TARGET MEASURE TARGETS FY21 ACTUAL PERFORMANCE SCORECARD OUTCOME
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TYPE OF PERFORMANCE MEASURE AND WEIGHTING AT TARGET	KMP PERFORMANCE MEASURE TARGETS FY21 ACTUAL PERFORMANCE SCORECARD OUTCOME	KMP PERFORMANCE MEASURE TARGETS FY21 ACTUAL PERFORMANCE SCORECARD OUTCOME
Group Financial 80% of balanced scorecard	Group underlying EBITDA (pre AASB 16) (60%) Threshold = $190.125M Target = $195M Maximum = $214.5M Group underlying EBITDA (pre AASB 16) = $209.6M Vesting at 114.97% of the target performance level (due to sliding scale from target to stretch of 100% to 120%) or 95.8% of maximum performance level
	Core Poultry Sales Volume Growth (20%) Target = increase of 5.3% Maximum = increase of 6.3% Core Poultry Sales Volume Growth of 4.2% was achieved1 (79.2% of target) 0% outcome against the target and maximum STIP performance levels
Non‑Financial Strategic Goals include 20% of balanced scorecard	Safety	People Safety (TRIFR) (10%) Target = TRIFR of 8.0 Maximum = TRIFR of 7.0 TRIFR of 6.0 Due to significant safety incident both components become zero, i.e.: 0% outcome against the target and maximum performance level Food Safety (Customer Complaints) (10%) Target = CPmKg of 6.15 Maximum = CPmKg of 5.81 Customer complaints or a CPmKg of 4.99

1. Whilst Ingham’s grew by 4.2% and was below the performance threshold of 5.3%, Ingham’s still outperformed the industry standard as from FY16 to FY21 the Australian poultry market grew at approximately 2.7% per annum.

OVERALL FY21 STIP OUTCOME CALCULATION

For the KMP detailed below, the Board assessed that the results for both individual performance and behaviours for Andrew Reeves and Jonathan Gray resulted in a 100% out of a maximum of 125% outcome for the Individual Multiplier. Gary Mallett’s management of the financial complexities during COVID‑19 resulted in very strong financial outcomes for the Company and as a result he received a slightly higher assessment at 110% out of a maximum 125%.

For Jim Leighton’s Individual Multiplier outcome, this took into account a number of factors including the significant safety incident that resulted in a further downward discretion applied to his Multiplier due to the responsibility placed upon him for this incident. At the time of Jim’s departure and as demonstrated in our FY21 results, he and his leadership team significantly improved the operations of our Company. For these reasons he was assessed for an Individual Multiplier at 50% out of a maximum of 125%.

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INDIVIDUAL MULTIPLIER OVERALL INDIVIDUAL OVERALL INDIVIDUAL
SCORECARD OUTCOME (% OF THE MAXIMUM STIP OUTCOME (APPLIED STIP OUTCOME AS A
EXECUTIVE KMP (% OF THE MAXIMUM SCORE) SCORE) AGAINST MAXIMUM STI) % OF TFR
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Jim Leighton	68.985/120 =57.49%	50/1252=40%	57.49% multiplied by 40%	34.49% of TFR awarded out
			=23.00%	of a maximum of 150% of TFR
Jonathan Gray	68.985/120 =57.49%	100/125 =80%	57.49% multiplied by 80%	34.49% of TFR awarded out
			=45.99%	of a maximum of 75% of TFR
Gary Mallett	68.985/120 =57.49%	110/125 =88%	57.49% multiplied by 88%	37.94% of TFR awarded out
			=50.59%	of a maximum of 75% of TFR
Andrew Reeves	68.985/120 =57.49%	90/1252=72%	57.49% multiplied by 72%	62.09% of TFR1 awarded out
			=41.39%	of a maximum of 150% of TFR

1. Andrew’s STIP award is Pro‑rata for time in role from 29 March 2021 to FY21 year end.

2. As detailed in the opening letter from the P&RC Chair, in addition to the 20% safety components reduced to 0% an additional downward discretion was applied to both Jim Leighton and Andrew Reeves, the former and current CEO / MD, due to the responsibility associated with the fatality that occurred at our Bolivar site. This is reflected above in their Individual Multiplier scores that were reduced by a further 10%.

FY21 STIP AWARDED

EXECUTIVE KMP	STI TARGET – $	STI MAXIMUM – $	TOTAL STI AWARDED – $	STIP CASH AWARDED – $	STIP RIGHTS AWARDED – $3	FORFEIT AGAINST STI MAXIMUM	FORFEITED % AGAINST STI MAXIMUM
Jim Leighton1	1,500,000	2,250,000	517,388	517,388	–	1,732,613	77.01%
Jonathan Gray	272,816	409,224	188,202	131,741	56,461	221,022	54.01%
Gary Mallett	305,000	457,500	231,445	162,011	69,433	226,055	49.41%
Andrew Reeves2	283,288	424,932	175,884	87,942	87,942	249,048	58.61%

1. Upon termination, Jim’s FY21 STIP deferral payment was agreed to be made as a cash payment, subject to the same provisions as deferred rights under the STIP framework as detailed earlier in this report.

2. Andrew’s STIP award is pro‑rata for time in role from 29 March 2021 to FY21 year end.

3. The estimated number of rights is calculated by dividing the face value of their award by the volume weighted average price (VWAP) of Ingham’s shares traded on the ASX in the 10 days after grant date. The number of rights and VWAP will be known subsequent to the grant date in FY22.

LONG‑TERM INCENTIVE PLANS

FY21‑FY23 LTIP OFFER

The FY21‑FY23 LTIP was approved at the 2020 AGM. The below table outlines the key terms of the Offer:

Eligibility Offers may be made at the Board’s discretion to employees of the Inghams Group or any other person the Board to participate determines to be eligible to receive a grant under the Plan. in LTIP Offer

TERM DESCRIPTION

The FY21‑23 LTIP Offer has been made to the following current KMP:

• Jonathan Gray (CEO, NZ), (70% of TFR at Maximum)

• Gary Mallett (CFO), (70% of TFR at Maximum)

The former and newly appointed CEO/MDs were both deemed ineligible for an FY21‑FY23 LTIP award. Please see Jim Leighton’s termination arrangements on page 80 and Andrew Reeves’ service agreement on page 79 for more information.

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Offers under the Plan	The LTIP Offer is a grant of performance rights.
Grant of Rights	A Right entitles the participant to acquire a share for nil consideration at the end of the performance period,
	subject to meeting specific performance conditions. The Board retains the discretion to make a cash payment
	to participants on vesting of the Rights in lieu of an allocation of shares.
Quantum of Rights	The aggregate face value at maximum of the LTIP Offer to all participants (Executive KMP and Senior Management)
	is $3.65 million.
	The final number of Rights awarded to each participant was calculated by dividing the face value of their LTIP
	award by $3.326, being the volume weighted average price (VWAP) of Ingham’s shares traded on the ASX in the
	10 days after 21 August 2020. (i.e. the announcement of Ingham’s FY20 annual results).
Performance Period	3 years, from the beginning of FY21 to the end of FY23.
Performance	Relative TSR (50% of Award)
conditions	For this component, the Company’s relative TSR will be compared to a comparator group comprising the ASX 200
	(excluding companies classified as financial, mining and resources) and vest according to the following schedule:

COMPANY’S RELATIVE TSR RANK IN THE COMPARATOR GROUP OVER PERFORMANCE PERIOD	% OF RIGHTS THAT VEST
Less than 50th percentile	Nil
At 50th percentile (threshold)	50%
Between 50th and 75th percentile	Straight line pro rata Vesting between 50% and 100%
At 75th percentile or above	100%

Return on invested capital (50% of award)

For this component, the Company’s Underlying Return on Invested Capital pre AASB 16 (“ROIC”) will be calculated as the equivalent of the pre AASB 16 net operating profit after tax, divided by average invested capital. ROIC for each of the three years forming the performance period will be averaged to provide an overall outcome.

The level of vesting of this component will be determined according to the following schedule:

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COMPANY’S ROIC OUTCOME % OF RIGHTS THAT VEST
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	Less than Threshold target Nil At Threshold target 50% Between Threshold and Maximum target Straight line pro rata Vesting between 50% and 100% At Maximum target 100%
Voting and dividend entitlements	Performance rights granted under the LTIP do not carry dividend or voting rights prior to vesting. Shares allocated upon vesting of performance rights carry the same dividend and voting rights as other Ingham’s shares.
Re‑testing	Performance will not be re‑tested if the performance conditions are not satisfied at the end of the performance period. Any Rights that remain unvested at the end of the performance period will lapse immediately.
Restrictions on dealing	The Executive KMP must not sell, transfer, encumber, hedge or otherwise deal with performance rights. The Executive KMP will be free to deal with the shares allocated on vesting of the performance rights, subject to the requirements of Ingham’s Securities Dealing Policy at that time.
Change of control	Under the Plan rules and the terms of the LTIP awards, the Board may determine in its absolute discretion that some or all of the Executive KMP’s performance rights will vest on a likely change of control.

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Clawback	Under the Plan rules and the terms of the LTIP awards, the Board has clawback powers which it may exercise if,
	among other things:
	• The Executive KMP has acted fraudulently or dishonestly;
	• Has engaged in gross misconduct, brought Ingham’s, the Ingham’s Group or any Ingham’s group company into
	disrepute or breached their obligations to the Inghams Group;
	• Ingham’s is required by or entitled under law or Ingham’s policy to reclaim remuneration from the Executive KMP;
	• There is a material misstatement or omission in the accounts of an Inghams Group company; or
	• The Executive KMP’s entitlements vest or may vest as a result of the fraud, dishonesty or breach of obligations of
	any other person and the Board is of the opinion that the performance rights would not have otherwise vested.
Cessation of	If the participant ceases employment for cause or due to their resignation, unless the Board determines otherwise,
employment	any unvested Rights will automatically lapse. The Board has the discretion to designate a “good leaver”, whereby
	Rights will not automatically lapse.
	In all other circumstances, the Rights will be pro‑rated (based on the proportion of the performance period that has
	elapsed) and remain on foot and subject to the original performance conditions, unless the Board exercises a
	discretion to treat them otherwise.
Fair Value	The fair value of the LTI offer at grant date was determined using an adjusted form of the Black Scholes Model.
	The weighted average grant date fair value of rights granted in the year was $2.69.
	The model inputs for performance rights granted during the year ended included:
	a) Exercise price $Nil (2020: $Nil)
	b) Share price at grant date $3.71 (2020: $3.39)
	c) Expected price volatility 33% (2020: 24‑28%)
	d) Expected dividend yield 4.3% (2020: 4.8%)
	e) Risk‑free interest rate 0.014% (2020: 0.23%)

FY20‑FY22 LTIP OFFER – REVISED LEGACY ITEM DUE TO PROPOSED AMENDMENT FROM TIP TO LTIP

This year, after an extensive review by the Board and engagement with key stakeholders, and as a result of the shareholders not approving the FY20‑FY22 TIP award for the CEO / MD at the 2020 AGM, the Board determined that the other participants in TIP who had already been offered their performance rights in this plan would have their rights amended to the terms of the FY20 LTIP that was approved at the 2019 AGM. Under ASX Listing Rule 6.23.4, Ingham’s is required to seek shareholder approval for this amendment at the 2021 AGM. If approval is granted, all participants will be under the already approved FY20‑FY22 LTIP at the 2019 AGM, with the exception of the former CEO / MD who has agreed to forgo his rights under the EPS growth hurdle (see page 80 for more information).

Should shareholders not approve the proposed amendments, the original FY20 TIP award will remain for Executive KMP and Senior Management that were eligible for this award, other than the former CEO / MD.

The table below outlines the key terms of the FY20‑FY22 LTIP Offer under the LTIP where these key details differ from the FY21‑FY23 LTIP grant:

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TERM DESCRIPTION
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Eligibility to participate	Offers may be made at the Board’s discretion to employees of the Inghams Group or any other person	Offers may be made at the Board’s discretion to employees of the Inghams Group or any other person
in LTIP Offer	that	the Board determines to be eligible to receive a Grant under the Plan.
	The	FY20‑FY22 LTIP Offer has been made to the following current and former KMP:
	•	Jim Leighton (former CEO / MD, see pages 70 and 80 for further information on Jim’s amended offer
		upon termination – originally 200% of TFR at Maximum amended to 50% of TFR)
	•	Jonathan Gray (CEO, NZ), (70% of TFR at Maximum)
	•	Gary Mallett (CFO), (70% of TFR at Maximum)

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Offers under the Plan	The LTIP Offer is a grant of performance rights.
Quantum of Rights	The aggregate face value, at maximum, of the LTIP Offer to all participants (Executive KMP and Senior
	Management) is $4.245 million.
	Jim Leighton was granted Rights with a maximum face value of $750,000 equivalent to 50% of TFR. Other
	participating members of senior management were granted Rights with a cumulative face value of $3.495 million.
	The final number of Rights awarded to each participant was calculated by dividing the face value of their LTIP
	award by $3.19662 being the volume weighted average price (VWAP) of Ingham’s shares traded on the ASX
	in the 10 days after 27 August 2019. (i.e. the announcement of Ingham’s FY20 annual results).
Performance Period	3 years, from the beginning of FY20 to the end of FY22.
Performance conditions	Rights granted as part of the LTIP Offer will vest at the end of the performance period, subject to meeting
	the performance conditions.
	The performance conditions are:
	• 75% of the Rights are subject to a performance condition based on Ingham’s absolute Earnings Per
	Share (EPS) over the performance period (EPS Component); and
	• The remaining 25% of the Rights are subject to a relative total shareholder return (TSR) performance
	condition, measured over the performance period (TSR Component). Ingham’s relative TSR will be
	benchmarked against an appropriate comparator group of companies within the S&P / ASX200 index
	excluding financing, mining and real estate sectors.

EPS Component

For any Rights in the EPS Component to vest, a threshold target must be achieved (as set out below). The percentage of Rights comprising the EPS Component that vest, if any, will be determined over the performance period by reference to the following vesting schedule:

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INGHAM’S EPS OVER THE PERFORMANCE PERIOD % OF RIGHTS THAT VEST
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	Less than threshold Nil
	Equal to threshold 50%
	Greater than threshold up to maximum target Straight line pro rata vesting between 50% and 100%
	At or above maximum target 100%
•	Threshold and maximum targets will be set annually by the Board at the start of each financial year, with
	vesting of the EPS Component based on achievement against these targets over the three‑year performance
	period. The EPS targets will be disclosed retrospectively at the end of the performance period.

TSR Component

The percentage of Rights comprising the TSR Component that vest, if any, will be based on Ingham’s TSR ranking over the performance period, as set out in the following vesting schedule:

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INGHAM’S TSR RANK IN THE RELEVANT COMPARATOR GROUP % OF RIGHTS THAT VEST
----- End of picture text -----

Less than 50% percentile	Nil
At 50% percentile (threshold performance)	50%
Between 50th and 75th percentile	Straight line pro rata vesting between 50% and 100%
At 75th percentile or above	100%

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6 Executive remuneration framework and outcomes (continued)

LTIP VESTING OUTCOMES

The FY19‑FY21 LTIP scheme vested on 30 June 2021. The EPS performance was below threshold and resulted in all EPS‑based rights lapsing. The TSR performance was at the 53rd Percentile, which resulted in 55.90% of the TSR‑based rights vesting.

The total amount that vested is 13.97% of total rights granted.

The details of the outcomes against the relative TSR hurdles are set out below.

RELATIVE TSR HURDLE:

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COMPANY’S TSR RANK IN THE RELEVANT COMPARATOR GROUP % OF RIGHTS THAT VEST
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Less than 50th percentile	Nil
At 50th percentile	50%
Between 50th and 75th percentile	Straight line pro‑rata vesting between 50% and 100%
At 75th percentile	100%
Outcome:
TSR percentile rank at the 53rd percentile	55.90% vesting

The following outcome applies:

EXECUTIVE KMP	LTIP RIGHTS GRANTED	LTIP RIGHTS VESTED	LTIP RIGHTS FORFEITED
Jim Leighton	506,862	70,809	436,053
Jonathan Gray	121,957	17,037	104,920

7 Other Key Information

EXECUTIVE EMPLOYMENT AGREEMENTS

Key terms of the Executive Service Agreements for the CEO / MD and other Executive KMP members are presented in the table below:

EXECUTIVE KMP	POSITION	CONTRACT DURATION	NOTICE PERIOD	TERMINATION PAYMENTS APPLICABLE
Jim Leighton	CEO / MD (Former)	Unlimited	12 months	Up to 12 months fully paid
Andrew Reeves	CEO / MD	Unlimited	12 months	Up to 12 months fully paid
Jonathan Gray	CEO, NZ	Unlimited	6 months	Up to 6 months fully paid
Gary Mallett	CFO	Unlimited	6 months	Up to 6 months fully paid

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7 Other Key Information (continued)

TERMINATION ARRANGEMENTS FOR FORMER CEO / MD, JIM LEIGHTON

As previously announced, Jim returned to the US for personal reasons beyond his control. During his tenure, Jim and his team significantly improved the operations of the Company and we thank Jim for his dedication and contribution to Ingham’s. The Board determined that Jim would be treated as a good leaver.

In order to facilitate an orderly handover, Jim Leighton remained with the company until the end of the financial year. As a result, he remained eligible to receive a full entitlement to the FY21 STIP and the FY19 LTIP awards as he was employed for the full performance period.

Any STIP awards previously deferred that are yet to vest continue with the original service period unchanged upon termination. Jim will be receiving the full entitlement to each award that was deferred as per our good leaver approach and with vesting dates unchanged. This applies to the FY19 Management Recognition Incentive and the FY20 & FY21 STIP awards.

Recognising shareholder feedback on proposed changes to Ingham’s LTIP arrangements where the proposed FY20 TIP plan was not approved at the 2020 AGM, Ingham’s determined the FY20 LTIP provided to Jim was to be granted on the terms originally approved by Ingham’s shareholders at the company’s 2019 AGM. However, the LTIP award for FY20 will only relate to the Total Shareholder Return (TSR) component of the original proposed award (being 25% of its original face value) and will also be pro‑rated on cessation of Jim’s employment (based on the portion of the performance period served). The award will be subject to testing at the end of the performance period, in June 2022. Jim will not be eligible to receive an LTIP award for FY21.

LOANS TO KEY MANAGEMENT PERSONNEL – LEGACY ITEM

Jonathan Gray received a NZ$350,000 non‑interest bearing loan in September 2018 in conjunction with his urgent relocation to New Zealand to take up the New Zealand CEO role at a critical time. Jonathan Gray fully repaid to Ingham’s the NZ$350,000 relocation loan on 7 October 2020.

Jonathan Gray was also offered an interest free non‑recourse loan to purchase shares in Ingham’s under a legacy arrangement in September 2018 with a balance owing as at 26 June 2021 of A$23,600, with this loan being repaid from dividends from the ordinary shares held. It is expected that this loan will be fully repaid within FY22.

There are no other loans to KMP.

8 Overview of Non‑Executive Director remuneration in FY21

The details of fees paid to Non‑Executive Directors in FY21 are outlined in section 7 of this Remuneration Report. Non‑Executive Directors’ fees were fixed, and they did not receive any performance‑based remuneration.

The table below outlines the fee structure for Non‑Executive Directors in FY21 (inclusive of superannuation as applicable). The annual aggregate fee pool for Non‑Executive Directors is capped at $2.0M. Board and committee fees inclusive of statutory superannuation contributions are included in this aggregate fee pool.

BOARD FEES Chairman Non‑Executive Director COMMITTEE FEES		FY21 $350,000 (no additional committee fees) $140,000
Finance & Audit	Chair	$20,000
People & Remuneration	Chair	$20,000
Risk & Sustainability	Chair	$20,000
Nomination	Chair	–
Committee Fees	Membership per committee	$10,000

80 INGHAM’S ANNUAL REPORT 2021

DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT – AUDITED ( CONTINUED )

9 Statutory and share‑based reporting

A. DIRECTOR & EXECUTIVE KMP REMUNERATION FOR THE YEAR ENDED 26 JUNE 2021

The following tables of Director & Executive KMP remuneration has been prepared in accordance with accounting standards and the Corporations Act 2001 requirements, for the period from 27 June 2020 to 26 June 2021. Share‑based payments are calculated as deferred STIP and LTIP awards.

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LONG‑TERM / POST‑
SHORT‑TERM BENEFITS EMPLOYMENT BENEFITS SHARE‑BASED PAYMENTS
MONETARY
AND DEFER‑ LONG TERMI‑ PERFOR‑ DEFER‑ TOTAL PERFOR‑
SALARY STI OTHER RED SUPERAN‑ SERVICE NATION MANCE RED REMUN‑ MANCE
AND FEES BONUS BENEFITS [1] CASH NUATION LEAVE BENEFITS RIGHTS BENEFITS [4,8] ERATION RELATED
YEAR $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Non‑Executive Directors [2]
Peter Bush 2021 328 – – – 22 – – – – 350 –
2020 329 – – – 21 – – – – 350 –
Rob Gordon 2021 137 – – – 13 – – – – 150 –
2020 132 – – – 13 – – – – 145 –
Michael Ihlein 2021 171 – – – – – – – – 171 –
2020 30 – – – 2 – – – – 32 –
Jackie McArthur 2021 162 – – – 15 – – – – 177 –
2020 146 – – – 14 – – – – 160 –
Helen Nash 2021 161 – – – 7 – – – – 168 –
2020 158 – – – 7 – – – – 165 –
Linda Bardo Nicholls AO 2021 155 – – – 15 – – – – 170 –
2020 162 – – – 7 – – – – 169 –
Andrew Reeves 2021 – – – – – – – – – – –
2020 146 – – – 14 – – – – 160 –
Sub‑total
Non‑Executive 2021 1,114 – – – 72 – – – – 1,186 –
Directors’
Remuneration 2020 1,103 – – – 78 – – – – 1,181 –
Chief Executive Officer
Andrew Reeves 2021 422 [3] 88 – – 17 [5] 4 – – 44 575 132
Former Chief Executive Officer
Jim Leighton 2021 1,478 259 182 258 22 (29) 1,125 (746) [6] 541 [7] 3,090 312
2020 1,658 – 14 – 21 23 – 809 394 2,919 1,203
Sub‑total Directors’ 2021 1,900 347 182 258 39 (25) 1,125 (746) 585 3,665 444
Actual Remuneration 2020 1,658 – 14 – 21 23 – 809 394 2,919 1,203
KMP Senior Executives
Gary Mallett 2021 588 162 – – 22 9 – 312 54 1,147 528
2020 416 44 100 – 14 8 – 30 18 630 92
Jonathan Gray 2021 512 132 271 – 38 6 – 120 84 1,163 336
2020 508 51 – – 38 1 – 20 48 666 119
Total Executives 2021 1,100 294 271 – 60 15 – 432 138 2,310 864
Remuneration 2020 924 95 100 – 52 9 – 50 66 1,296 211
Total Directors’
and Executive 2021 4,114 641 453 258 171 (10) 1,125 (314) 723 7,161 1,308
Officers’
Remuneration 2020 3,685 95 114 – 151 32 – 859 460 5,396 1,414
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OPTIMISING FOR THE FUTURE 81

DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT – AUDITED ( CONTINUED )

9 Statutory and share‑based reporting (continued)

• (1) Monetary benefits represents relocation payments for the CEO, a sign on bonus for the CFO and a payment of NZD $281,472 was made in FY21 for Jonathan Gray moving to New Zealand urgently at the Company’s request that includes selling costs and loss in value upon the sale of his Australian home. Other benefits include a company provided motor vehicle for the CEO valued at $19,143.

• (2) Andrew Reeves, Jackie McArthur and Helen Nash also received remuneration for special Board projects in FY21. This work ceased in March for Andrew upon appointment to the role of CEO / MD, and in mid‑April for the other directors.

• (3) Andrew Reeves’ salary and fees include $121,391 in Board fees for FY21 for the period he served as a non‑executive director.

• (4) Deferred benefits include deferred equity incentives and the FY19 Management Recognition Incentive (see note 8).

• (5) Andrew Reeves’ Superannuation includes $11,712 in FY21 for the period he served as a non‑executive director.

• (6) The reversal of performance right expenses for Jim Leighton relates to the EPS portion of the FY19 LTIP award which did not vest. The FY20 LTIP was granted only on the TSR portion and the estimated EPS component which was also reversed.

• (7) The deferred benefits for Jim Leighton include $300,000 on deferred equity portion of FY20 STIP award and $241,544 on the FY19 Management Recognition Incentive.

• (8) As disclosed in FY20, Jim Leighton was awarded 93,721 restricted shares with a value of $400,000 and Jonathan Gray was awarded 24,474 restricted shares with a value of $103,940 as part of the FY19 Management Recognition Incentive plan. For Jim, the number of shares purchased was based on a VWAP of $4.268 and for Jonathon this was based on a VWAP of $4.247. The VWAP for both was calculated on the relevant dates they commenced in their roles in November 2018 through to 29 June 2019. The shares were sourced on‑market and are being held in escrow until 15 December 2022.

B. RIGHTS AWARDED, VESTED AND LAPSED DURING THE YEAR

The table below discloses the number of rights granted, vested or lapsed during the year. Rights do not carry any voting or dividend rights and can only be exercised once the vesting conditions have been met, until their expiry date.

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NO. OF VALUE OF NO. RIGHTS
RIGHTS FAIR VALUE RIGHTS NO. RIGHTS LAPSED /
AWARDED PER RIGHT GRANTED VESTED FORFEITED
DURING THE AT GRANT DURING THE DURING THE DURING THE
YEAR AWARD DATE DATE ($) VESTING DATE YEAR ($000) YEAR YEAR
Jim Leighton FY21 – 4 Dec 2018 [1] 3.06 30 Jun 2021 – – (436,053)
– 6 Dec 2018 [1,2] 3.29 30 Jun 2021 – – (49,915)
– 17 Apr 2020 [1] 2.57 25 Jun 2022 – – (547,452)
180,377 15 Sep 2020 [3] 3.33 1 Jul 2021 600 – –
Jonathan Gray FY21 – 4 Nov 2017 [1] 2.80 30 Jun 2020 – 22,914 –
– 6 Dec 2018 [1,2] 3.21 30 Jun 2020 – 2,618 –
– 5 Nov 2018 [1] 3.06 30 Jun 2021 – – (95,513)
– 6 Dec 2018 [1,2] 3.29 30 Jun 2021 – – (9,407)
15,275 15 Sep 2020 [3] 3.33 1 Jul 2021 51 – –
114,260 10 Jun 2021 [4] 2.69 1 Jul 2023 307 – –
Gary Mallett FY21 128,368 10 Jun 2021 [4] 2.69 1 Jul 2023 345 – –
13,384 15 Sep 2020 [3] 3.33 1 Jul 2021 45 – –
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• (1) The fair value of the LTI offer at grant date was determined using an adjusted form of the Black Scholes Model. Fair value on performance rights is a weighted average of rights values under the EPS and TSR portion of the awards.

• (2) These rights relate to the top up grants to Executive KMP as a result of the capital return carried out. These were approved at the EGM on 6 December 2018, and vest progressively the end of FY19 to the end of FY21 in line with the underlying grants that were topped up

• (3) Deferred rights were granted on 15 September 2020 subsequent to the calculation of the volume weighted average price of Ingham’s shares traded on the ASX, 10 days after 21 August 2020. The fair value of the deferred rights is calculated as the market price of Ingham’s shares traded on the ASX on grant date of the deferred rights.

• (4) The fair value of the LTI offer at grant date was determined using an adjusted form of the Black Scholes Model. Fair value on performance rights is a weighted average of rights values under the ROIC and TSR portion of the awards.

82 INGHAM’S ANNUAL REPORT 2021

DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT – AUDITED ( CONTINUED )

9 Statutory and share‑based reporting (continued)

C. OPTIONS AND PERFORMANCE RIGHTS HOLDINGS OF DIRECTORS AND KMP

						OPTIONS OUTSTANDING	OPTIONS OUTSTANDING
						AS AT 26 JUNE 2021
	BALANCE 30 JUNE 2020	GRANTED AS REMUNERATION	OPTIONS / RIGHTS EXERCISED	NET CHANGE OTHER1	BALANCE 26 JUNE 2021	EXERCISABLE	NOT EXERCISABLE
Jim Leighton	1,260,645	180,377	–	(1,033,420)	407,602	–	–
Jonathan Gray	466,416	129,535	–	(130,452)	465,499	–	200,000
Gary Mallett	133,579	141,752	–	–	275,331	–	–
Total	1,860,640	451,664	–	(1,163,872)	1,148,432	–	200,000

(1) Represents shares vested during the period and forfeited rights

D. SHAREHOLDINGS OF DIRECTORS AND KMP

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BALANCE
26 JUNE 2021
(INCLUSIVE OF
BALANCE GRANTED AS ON EXERCISE OF NET CHANGE BALANCE VESTED TREASURY
27 JUNE 2020 REMUNERATION RIGHTS / OPTIONS OTHER 26 JUNE 2021 SHARES)
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Non‑Executive Directors
Peter Bush	158,730	–	–	50,000	208,730	208,730
Rob Gordon	15,772	–	–	–	15,772	15,772
Michael Ihlein	–	–	–	45,455	45,455	45,455
Jackie McArthur	19,126	–	–	5,824	24,950	24,950
Helen Nash	29,370	–	–	–	29,370	29,370
Linda Bardo Nicholls AO	32,947	–	–	9,101	42,048	42,048
Chief Executive Officer
Andrew Reeves	7,800	–	–	5,000	12,800	12,800
Jim Leighton	–	–	–	–	–	–
Senior Executives
Gary Mallett	–	–	–	–	–	–
Jonathan Gray	166,325	25,532	–	(25,532)	166,325	366,325
Total	430,070	25,532	–	89,848	545,450	745,450

Signed in accordance with a resolution of the directors made pursuant to s298(2) of the Corporations Act 2001 .

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Peter Bush Chairman Sydney 20 August 2021

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Michael Ihlein Non‑Executive Director

OPTIMISING FOR THE FUTURE 83

LEAD AUDITOR’S INDEPENDENCE DECLARATION

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To the Directors of Inghams Group Limited

I declare that, to the best of my knowledge and belief, in relation to the audit of Inghams Group Limited for the financial year ended 26 June 2021 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 Cleary Partner Sydney 20 August 2021

KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms 59 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.

84 INGHAM’S ANNUAL REPORT 2021

CONSOLIDATED INCOME STATEMENT

For the year ended 26 June 2021

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52 WEEKS 52 WEEKS
ENDED ENDED
26 JUNE 2021 27 JUNE 2020
NOTES $000 $000
Revenue 3 2,668,800 2,555,300
Other income / (loss) 4(a) (100) 500
Expenses
Cost of sales (2,182,000) (2,121,900)
Distribution (164,100) (157,400)
Administration and selling (144,400) (152,400)
Operating profit 178,200 124,100
Finance income and costs
Finance income 400 800
Finance costs (66,000) (69,100)
Net finance costs 4(c) (65,600) (68,300)
Share of net profit of associate 24 400 300
Profit before income tax 113,000 56,100
Income tax expense 5(a) (29,700) (16,000)
Profit for the year attributable to: Owners of Inghams Group Limited 83,300 40,100
Basic EPS (cents per share) 27 22.43 10.79
Diluted EPS (cents per share) 27 22.35 10.77
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The above consolidated income statement should be read in conjunction with the accompanying notes.

OPTIMISING FOR THE FUTURE 85

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 26 June 2021

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52 WEEKS 52 WEEKS
ENDED ENDED
26 JUNE 2021 27 JUNE 2020
NOTES $000 $000
Profit for the year 83,300 40,100
Other comprehensive income
Items that have been reclassified to profit or loss
Changes in the fair value of cash flow hedges 4,600 6,600
Tax on changes in fair value of cash flow hedges (1,300) (2,000)
Total items that have subsequently been reclassified to profit or loss 3,300 4,600
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations 19(a) (500) (3,000)
Changes in the fair value of cash flow hedges 19(a) 2,200 (9,000)
Tax on changes in fair value of cash flow hedges 19(a) (700) 2,700
Total items that may subsequently be reclassified to profit or loss 1,000 (9,300)
Items that will not be reclassified to profit or loss
Revaluation of land and buildings reclassified to assets held for sale (2,200) (1,200)
Tax on revaluation of land and buildings 700 300
Total items that will not be reclassified to profit or loss (1,500) (900)
Total comprehensive income for the year, attributable to:
Owners of Inghams Group Limited 86,100 34,500
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The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

86 INGHAM’S ANNUAL REPORT 2021

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 26 June 2021

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26 JUNE 2021 27 JUNE 2020
NOTES $000 $000
ASSETS
Current assets
Cash and cash equivalents 6 158,100 134,200
Trade and other receivables 7 222,700 202,600
Biological assets 8 121,800 120,700
Inventories 9 196,100 217,000
Assets classified as held for sale 10 3,700 12,300
Current tax receivable – 3,700
Total current assets 702,400 690,500
Non‑current assets
Property, plant and equipment 11 457,900 450,300
Investments accounted for using the equity method 24 2,100 1,900
Receivables – 300
Right‑of‑use assets 12 1,374,900 1,429,200
Deferred tax asset 5(c) 7,700 –
Total non‑current assets 1,842,600 1,881,700
Total assets 2,545,000 2,572,200
LIABILITIES
Current liabilities
Trade and other payables 13 396,600 402,900
Current tax liability 27,800 –
Provisions 15 92,900 79,600
Derivative financial instruments 16 1,500 4,000
Lease liabilities 184,200 185,200
Total current liabilities 703,000 671,700
Non‑current liabilities
Trade and other payables 13 4,000 3,500
Borrowings 14 398,300 448,900
Provisions 15 26,200 23,900
Derivative financial instruments 16 1,800 3,600
Deferred tax liabilities 5(c) – 4,400
Lease liabilities 1,248,100 1,287,100
Total non‑current liabilities 1,678,400 1,771,400
Total liabilities 2,381,400 2,443,100
Net assets 163,600 129,100
Equity
Contributed equity 17(a) 108,100 109,200
Reserves 19(a) 30,800 25,700
Retained earnings / (accumulated losses) 24,700 (5,800)
Total equity 163,600 129,100
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The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

OPTIMISING FOR THE FUTURE 87

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 26 June 2021

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ATTRIBUTABLE TO OWNERS OF INGHAMS GROUP LIMITED
RETAINED
EARNINGS / ASSET
CONTRIBUTED (ACCUMULATED REVALUATION OTHER
EQUITY LOSSES) RESERVE RESERVES TOTAL EQUITY
NOTES $000 $000 $000 $000 $000
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Balance at 29 June 2019		109,100	20,300	11,400	23,700	164,500
Profit for the year		–	40,100	–	–	40,100
Other comprehensive income	19(a)	–	–	(900)	(4,700)	(5,600)
Total comprehensive income		–	40,100	(900)	(4,700)	34,500
Transactions with owners
of the Company
Dividends provided for or paid	18	100	(66,200)	–	–	(66,100)
Share based payment expense	19(a)	–	–	–	(400)	(400)
Settlement of share plan		–	–	–	(3,400)	(3,400)
		100	(66,200)	–	(3,800)	(69,900)
Balance at 27 June 2020		109,200	(5,800)	10,500	15,200	129,100
Balance at 27 June 2020		109,200	(5,800)	10,500	15,200	129,100
Profit for the year		–	83,300	–	–	83,300
Other comprehensive income	19(a)	–	–	(1,500)	4,300	2,800
Total comprehensive income		–	83,300	(1,500)	4,300	86,100
Transactions with owners
of the Company
Dividends provided for or paid	18	–	(52,800)	–	–	(52,800)
Settlement of share plan		(1,700)	–	–	–	(1,700)
Share based payment expense	19(a)	–	–	–	2,900	2,900
Transfer of shares for settlement of
share plan		600	–	–	(600)	–
		(1,100)	(52,800)	–	2,300	(51,600)
Balance at 26 June 2021		108,100	24,700	9,000	21,800	163,600

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

88 INGHAM’S ANNUAL REPORT 2021

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 26 June 2021

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52 WEEKS 52 WEEKS
ENDED ENDED
26 JUNE 2021 27 JUNE 2020
NOTES $000 $000
Cash flows from operating activities
Receipts from customers (inclusive of GST) 2,662,200 2,547,200
Payments to suppliers and employees (inclusive of GST) (2,211,800) (2,157,400)
450,400 389,800
Interest received 400 800
Income taxes paid (10,900) (46,100)
Net cash provided by operating activities 21 439,900 344,500
Cash flows from investing activities
Capital expenditure (66,300) (86,700)
Proceeds from sale of assets held for sale 10,700 9,500
Dividends received from investments 200 200
Net cash used in investing activities (55,400) (77,000)
Cash flows from financing activities
Settlement of share plan (1,700) (3,400)
Proceeds from borrowings – 50,000
Repayment of borrowings (50,000) –
Dividends paid (52,800) (66,100)
Lease payments – principal (192,300) (177,700)
Lease payments – interest (50,800) (54,800)
Interest and finance charges paid (12,900) (14,900)
Net cash used in financing activities (360,500) (266,900)
Net increase in cash and cash equivalents 24,000 600
Cash and cash equivalents at the beginning of the financial year 134,200 134,500
Effects of exchange rate changes on cash and cash equivalents (100) (900)
Cash and cash equivalents at end of year 6 158,100 134,200
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The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

OPTIMISING FOR THE FUTURE 89

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 CORPORATE INFORMATION

The financial statements of Inghams Group Limited and its subsidiaries (collectively, the Group) for the 52 weeks ended 26 June 2021 (comparative period was 52 weeks ended 27 June 2020) were authorised for issue in accordance with a resolution of the directors on 20 August 2021. Inghams Group Limited (the Company) is a for‑profit company limited by shares incorporated in Australia.

The registered office and principal place of business of Inghams Group Limited is:

Level 4 1 Julius Avenue North Ryde NSW 2113 Australia

The principal activities of the Group during the year consisted of the production and sale of chicken and turkey products across its vertically integrated free‑range, value enhanced, primary processed, further processed and by‑product categories. Additionally, stockfeed is produced primarily for internal use but also for the poultry, pig and dairy industries.

(II) CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed below.

• Fair value determination of freehold land and buildings – note 11;

• The determination of workers’ compensation provision – note 15;

• Fair value of options granted under the long‑term incentive scheme, as determined at grant date – note 20;

• Carrying value of assets – notes 11 & 12;

• Inventory obsolescence provision – note 9; and

• IFRIC 23 – uncertain tax provisions – note 5.

Further details of the nature of these assumptions and conditions may be found in the relevant notes to these financial statements.

(III) ADOPTION OF ACCOUNTING STANDARDS

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

The Group has adopted new and revised Standards and Interpretations issued by the AASB that are relevant to operations and effective for the current reporting period.

The following amended Standards and Interpretations are not yet effective and have not had a material impact on the Group in the current period:

• COVID‑19‑Related Rent Concessions (Amendment to AASB 16)

(a) Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB).

These financial statements are prepared on a going concern basis despite the group being in a current net liability position of $0.6M. The Group continues to have positive profit after tax, positive net assets, positive operating cashflow, significant cash on hand and undrawn committed debt facilities. In addition, the bank facility debt is non‑current, bank covenants have been met and there has not been a requirement for additional capital raisings to support liquidity. The business is categorised as an essential service and continues to operate during COVID‑19 restrictions.

(I) HISTORICAL COST CONVENTION

• Interest Rate Benchmark Reform – Phase 2 (Amendments to AASB 9, AASB 139, AASB 7, AASB 4 and AASB 16)

• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to AASB 137)

• Annual Improvements to IFRS Standards 2018‑2020

• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to AASB 16)

• Reference to the Conceptual Framework (Amendments to AASB 3)

• Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to AASB 10 and AASB 128)

• Classification of Liabilities as Current or Non‑current (Amendments to AASB 101)

• AASB 17 Insurance Contracts and amendments to AASB 17 Insurance Contracts

The financial statements have been prepared on a historical cost basis, except for the following:

• Financial assets and liabilities (including derivative instruments) and certain classes of property, plant and equipment – measured at fair value.

• Assets held for sale – measured at the lower of cost (including revaluation adjustments where applicable), or fair value less cost of disposal.

90 INGHAM’S ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED )

(b) Principles of consolidation

(I) SUBSIDIARIES

The consolidated financial statements incorporate the financial statements of the Group and its subsidiaries and the results of all subsidiaries for the year ended 26 June 2021.

Subsidiaries are all 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.

When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related non‑controlling interest and other components of equity. 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 acquisition method of accounting is used to account for business combinations by the Group.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.

(II) JOINT VENTURES

The Group’s interests in equity‑accounted investees comprise interests in a joint venture. Interests in the joint venture are accounted for using the equity method. They are initially recognised at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and Other Comprehensive Income of equity‑accounted investees, until the date on which significant influence or joint control ceases.

(c) Foreign currency translation

(I) FUNCTIONAL AND PRESENTATION CURRENCY

Items included in the consolidated financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which it operates (‘the functional currency’). The consolidated financial statements are presented in Australian dollars, which is Inghams Group Limited’s functional and presentation currency.

(II) TRANSACTION AND BALANCES

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation, at period end exchange rates, of monetary assets and liabilities denominated in foreign currencies, are recognised in consolidated income statement, except when they are deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.

(III) GROUP COMPANIES

The results and financial position of foreign operations of the Group (none of which have the currency of a hyperinflationary economy), that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• Assets and liabilities for the statement of financial position are translated at the closing rate at balance date;

• Income and expenses for each income statement and statement of comprehensive income are translated at average exchange rates; and

• All resulting exchange differences are recognised in other comprehensive income.

(d) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.

SALE OF GOODS

A sale is recorded when goods have been dispatched to a customer pursuant to a sales order and control of the goods has passed to the carrier or customer.

(e) Income tax

(I) INCOME TAX TREATMENT

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company’s subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

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(e) Income tax (continued)

Deferred tax liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in the consolidated income statement, except to the extent that it relates to items recognised in other comprehensive income. In this case, the tax is also recognised in other comprehensive income.

(h) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for impairment. Trade receivables are generally collected within 30 days of invoice date.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful receivables is calculated using an expected credit losses provision matrix. The provision matrix is based on the Group’s historical observed default rates, adjusted for forward looking estimates. The historical observed default rates are updated to reflect current and forecast credit conditions on each reporting date. Provisions for specific receivables are recognised in addition to the general provision originating from the expected credit losses matrix.

The amount of the provision is recognised in the consolidated income statement within selling expenses.

(I) BIOLOGICAL ASSETS

(II) TAX CONSOLIDATION LEGISLATION

Inghams Group Limited, the ultimate Australian controlling entity, and its subsidiaries, have implemented the tax consolidation legislation.

Inghams Group Limited and its subsidiaries in the tax consolidated Group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated Group continues to be a stand‑alone taxpayer in its own right. In addition to its own current and deferred tax amounts, Inghams Group Limited, the ultimate Australian controlling entity, also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from subsidiaries in the tax consolidated Group.

Assets or liabilities arising under tax funding arrangements within the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the Group. Under the tax funding arrangement the members of the tax consolidated Group compensate Inghams Group Limited for any current tax payable assumed and are compensated by Inghams Group Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Inghams Group Limited.

(f) Impairment of assets

Assets are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash generating units). Non‑financial assets that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

(g) Cash and cash equivalents

Biological assets are recognised at cost less accumulated depreciation. The fair value of biological assets cannot be reliably measured, as quoted market prices are not available and it is difficult to estimate the fair value based on the eventual sales price. Depreciation of breeder chickens occurs on an egg‑laying basis with the depreciation representing a portion of the egg cost and subsequently the day‑old broiler cost.

Biological assets are reclassified as inventory once processed.

(j) Inventories

Poultry, feed and other classes of inventories are stated at the lower of cost and net realisable value. Cost comprises all overheads except selling, distribution, general administration and interest. Net realisable value is the estimated selling price in the ordinary course of business less the estimate costs of completion and the costs necessary to make the sale.

(k) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(I) FINANCIAL ASSETS

INITIAL RECOGNITION AND MEASUREMENT

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short‑term and highly liquid investments with maturities of three months or less from inception date, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

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(k) Financial instruments (continued)

CLASSIFICATION AND SUBSEQUENT MEASUREMENT

On initial recognition, a financial asset is classified as measured at:

• Amortised cost;

• FVOCI – debt investment;

• FVOCI – equity investment; and

• FVTPL.

Financial assets at fair value through profit or loss

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This category generally applies to all derivative financial assets. For more information on derivative financial instruments, refer to note 16.

amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.

The Group’s financial liabilities include trade and other payables, borrowings and derivative financial instruments.

DERECOGNITION

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

Loans and receivables

(III) OFFSETTING OF FINANCIAL INSTRUMENTS

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

• It is held within a business model whose objective is to hold assets to collect contractual cashflows; and

• Its contractual terms give rise on specified dates to cashflows that are solely payments of principal and interest on the principal amount outstanding.

This category generally applies to trade and other receivables. For more information on receivables, refer to note 7.

DERECOGNITION

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Group’s consolidated statement of financial position) when:

• The rights to receive cash flows from the asset have expired; or

• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass‑through’ arrangement; and either

• (a) the Group has transferred substantially all the risks and rewards of the asset; or

• (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

(II) FINANCIAL LIABILITIES

INITIAL RECOGNITION AND MEASUREMENT

Financial liabilities are classified as measured at amortised cost, FVTPL or as derivatives designated as hedging instruments in an effective hedge, as appropriate. A financial liability is classified as at FVTPL if it is classified as held for trading, it is a derivative or it is designated as such as initial recognition.

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

(l) Derivatives and hedging activities

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either:

• Hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges); or

• Hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash flow hedges).

The Group documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.

The fair values of various derivative financial instruments used for hedging purposes are disclosed in note 16. Movements in the hedging reserve in shareholders’ equity are shown in note 19(a). The full fair value of a hedging derivative is classified as a non‑current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.

Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense are recognised in profit or loss. Other financial liabilities are subsequently measured at

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(l) Derivatives and hedging activities (continued)

(I) FAIR VALUE HEDGES

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the comprehensive income statement, together with any changes in the fair value of the hedge asset or liability that are attributable to the hedged risk. The gain or loss relating to the effective portion of interest rate swaps and hedging fixed rate borrowings is recognised in the comprehensive income statement within finance costs, together with changes in the fair value of the hedged fixed rate borrowings attributable to interest rate risk. The gain or loss relating to the ineffective portion is recognised in the comprehensive income statement within other income or other expenses. If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to the consolidated income statement over the period to maturity using a recalculated effective interest rate.

(II) CASH FLOW HEDGES

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognised immediately in the comprehensive income statement within other income or other expense.

Amounts accumulated in equity are reclassified to the comprehensive income statement in the periods when the hedged item affects profit or loss. The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognised in profit or loss within ‘finance costs’. The gain or loss relating to the effective portion of forward foreign exchange contracts hedging export sales is recognised in profit or loss within ‘sales’. However, when the forecast transaction that is hedged results in the recognition of a non‑financial asset, the gains and losses previously deferred in equity are reclassified from equity and included in the initial measurement of the cost of the asset. The deferred amounts are ultimately recognised in profit or loss as cost of goods sold in the case of inventory, or as depreciation or impairment in the case of fixed assets.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss.

The Group may also enter into derivative contracts in order to hedge the translation of results of its New Zealand business. As this result is an uncertain amount at the date the derivative is entered into, it is not eligible for designation as a hedging instrument under Australian Accounting Standards, and as such any applicable contracts are measured at fair value through profit or loss, with gains or losses being recognised in profit or loss in the period incurred.

(m) Property, plant and equipment

Freehold land and buildings are shown at fair value based on formal periodic valuations (with sufficient regularity to ensure materially accurate valuations reflected) by external independent valuers, less subsequent depreciation for buildings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

All other property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

Land is not depreciated. Depreciation on other assets is calculated using the straight‑line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives as follows:

lives as follows:
Freehold land and buildings and leasehold buildings	3 – 50 years
Plant and equipment	1 – 20 years
Leased plant and equipment	5 – 15 years

The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period.

As asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. When revalued assets are sold, it is Group policy to transfer any amounts included in other reserves in respect of those assets to retained earnings.

(n) Leases

Leases are recognised as a right‑of‑use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right‑of‑use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight‑line basis.

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(n) Leases (continued)

(I) LEASE LIABILITY

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

• Fixed payments (including in‑substance fixed payments), less any lease incentives receivable;

• Amounts expected to be payable by the lessee under residual value guarantees;

• The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and

• Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

(II) RIGHT‑OF‑USE ASSET

Right‑of‑use assets are measured at cost comprising the following:

• The amount of the initial measurement of lease liability;

• Any lease payments made at or before the commencement date less any lease incentives received;

• Any initial direct costs; and

• Restoration costs.

(III) DEPRECIATION EXPENSE

Depreciation is calculated on a straight‑lined basis on the right‑of‑use asset over the term of each lease. In line with Group’s policy of classifying expenses by function, depreciation is included within the elements of Operating Profit as appropriate.

(IV) EXTENSION AND TERMINATION OPTIONS

Land and building lease agreements are typically entered for fixed periods of 5 to 10 years, with some leases for periods of 30 years. Extension and termination options are included in a number of these leases across the Group.

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).

Management’s assessment is that lease options cannot be reasonably certain and are therefore excluded in the calculation of the lease liability.

Contract Growers have a set expiry date after which the lease continues indefinitely until either party gives 12 months’ notice to terminate. As Ingham’s continues to review the company’s strategic objectives, Chicken Contract Growers will move to more

performance‑based agreements in the future. Turkey Contract Growers have had fixed term agreements renewed for another 2 years, after which a move to a more performance‑based agreement will be revisited.

The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the Group.

(V) PRACTICAL EXPEDIENTS APPLIED

The Group has used the following practical expedients permitted by the standard:

• The use of a single discount rate to a portfolio of leases with reasonably similar characteristics;

• The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease; and

• Payments associated with short‑term leases and leases of low‑value assets are recognised on a straight‑line basis as an expense in the income statement. Short‑term leases are leases with a lease term of 12 months or less. Low‑value assets comprise IT equipment and small items of office equipment where the total individual lease payments are less than A$10,000.

(VI) LEASES EXEMPT FROM RECOGNITION UNDER AASB 16 LEASES

All short‑term leases (less than 12 months), low value or performance based leases are not recognised under AASB 16 Leases. These leases continue to be recognised in the Profit & Loss as an operating lease expense.

(o) Assets classified as held for sale

Assets classified as held for sale are stated at the lower of their carrying amount and fair value less costs to sell if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. An impairment loss is recognised for any initial or subsequent write‑down of the asset to fair value less costs to sell. Assets are not depreciated or amortised while they are classified as held for sale.

(p) Investments

Investments in subsidiaries and joint venture entities are accounted for at cost. Dividends received from subsidiaries and joint venture entities are recognised in the parent entity’s profit rather than being deducted from the carrying amount of these investments.

(q) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial period which are unpaid. The amounts are unsecured and are usually paid within 45 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

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(r) Interest‑bearing liabilities

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the consolidated statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non‑cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

Borrowing costs incurred for the construction of any qualifying assets are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed as incurred.

(s) Provisions

Provisions for make good obligations are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of each reporting period. The discount rate used to determine the present value is a pre‑tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Workers’ compensation provisions are determined by actuarial assessment every financial period. The provision represents the expected liability of the entity in relation to each state’s self‑insurance licence.

(t) Employee benefits

(II) OTHER LONG‑TERM EMPLOYEE BENEFIT OBLIGATIONS

The liabilities for long service leave and annual leave which is not expected to be settled wholly within 12 months after the end of the reporting period in which the employees render the related service is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. 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 end of the reporting period on corporate bonds with terms and currencies that match, as closely as possible, the estimated future cash outflows.

The obligations are presented as current liabilities in the consolidated statement of financial position if the entity does not have an unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected to occur.

(III) SHARE‑BASED PAYMENTS

Share‑based compensation benefits are provided to executives and select key management under Long‑Term Incentive Plans.

The fair value of shares granted under Long‑Term Incentive Plans are recognised as an employee benefits expense with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to the shares. The total amount to be expensed is determined by reference to the fair value of the shares granted, which includes any market performance conditions and the impact of any non‑vesting conditions but excludes the impact of any service and non‑market performance vesting condition.

Non‑market vesting conditions are included in assumptions about the number of shares that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of shares that are expected to vest based on the non‑market vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. Where such adjustments result in a reversal of previous expenses these are recognised as a credit to profit and loss in the period that it is assessed that certain vesting conditions will not be met.

(IV) SHORT‑TERM INCENTIVE SCHEME

The Group recognises a certain liability and expense for bonuses based on a formula that takes into consideration financial and non‑financial outcomes of the Group.

(I) SHORT‑TERM OBLIGATIONS

Liabilities for wages and salaries, including non‑monetary benefits and annual leave expected to be settled wholly within 12 months after the end of the reporting period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual leave is presented as provision for employee benefits. All other short‑term employee benefit obligations are presented as payables.

(u) Contributed equity

Ordinary shares are classified as equity.

(v) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.

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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED )

(w) Good and services tax (GST)

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position.

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

(x) Rounding of amounts

The amounts contained in the financial report have been rounded to the nearest hundred thousand dollars (where rounding is applicable) where noted ($000), or in certain cases, the nearest dollar, under the option available to the Company under ASIC Corporations (Rounding in Financial / Directors’ Reports) Instrument 2016 / 191 . The Company is an entity to which this legislative instrument applies.

(y) Parent entity

The financial information for the parent entity, Inghams Group Limited, has been prepared on the same basis as the consolidated financial statements.

3 SEGMENT INFORMATION

Description of segments

Ingham’s operations are all conducted in the poultry industry in Australia and New Zealand.

The Group has identified its operating segments based on the internal reports that are reviewed and used by the CEO/MD and the senior leadership team (the chief operating decision maker) in assessing performance and in determining the allocation of resources. The Group’s operations in Australia and New Zealand are each treated as individual operating segments. The CEO/MD and the senior leadership team monitor the operating results of business units separately, for the purpose of making decisions about resource allocation and performance assessment.

Segment performance is evaluated based on earnings before interest, tax, depreciation and amortisation (EBITDA). Inter‑segment pricing is determined on an arm’s length basis and inter segment revenue is generated from a royalty charge for the services provided by the Australian operation.

One customer generated revenue in excess of 10% of Group revenue (2020: One).

Allocations of assets and liabilities are not separately identified in internal reporting so are not disclosed in this note.

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AUSTRALIA NEW ZEALAND CONSOLIDATED
2021 2021 2021
$000 $000 $000
Poultry 2,134,400 329,700 2,464,100
Feed 140,800 63,900 204,700
Total revenue from contracts with customers 2,275,200 393,600 2,668,800
Other income / (loss) 200 (300) (100)
Inter segment revenue / (expense) 9,500 (9,500) –
2,284,900 383,800 2,668,700
Adjusted operating expenses [] (1,913,500) (311,700) (2,225,200)
Share of net profit of associate 400 – 400
EBITDA 371,800 72,100 443,900
Depreciation and amortisation (265,300)
EBIT 178,600
Net finance costs (65,600)
Profit before tax 113,000
----- End of picture text -----*

• Operating expenses include cost of sales, distribution, selling and administration, excluding depreciation and amortisation.

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3 SEGMENT INFORMATION ( CONTINUED )

Description of segments (continued)

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AUSTRALIA NEW ZEALAND CONSOLIDATED
2021 2021 2021
$000 $000 $000
Total capital expenditure 55,900 12,900 68,800
Total property, plant and equipment 387,200 70,700 457,900
Total impairment losses (trade receivables and inventory) 7,400 (500) 6,900
AUSTRALIA NEW ZEALAND CONSOLIDATED
2020 2020 2020
$000 $000 $000
Poultry 2,018,400 313,700 2,332,100
Feed 151,700 71,500 223,200
Total revenue from contracts with customers 2,170,100 385,200 2,555,300
Other income / (loss) 500 – 500
Inter segment revenue / (expense) 15,500 (15,500) –
2,186,100 369,700 2,555,800
Adjusted operating expenses [] (1,858,600) (309,700) (2,168,300)
Share of net profit of associate 300 – 300
EBITDA 327,800 60,000 387,800
Depreciation and amortisation (263,400)
EBIT 124,400
Net finance costs (68,300)
Profit before tax 56,100
Adjusted operating expenses include cost of sales, distribution, selling and administration, excluding depreciation and amortisation.
AUSTRALIA NEW ZEALAND CONSOLIDATED
2020 2020 2020
$000 $000 $000
Total capital expenditure 92,200 3,500 95,700
Total property, plant and equipment 383,800 66,500 450,300
Total impairment losses (trade receivables and inventory) 19,000 2,000 21,000
Total impairment losses (non‑current assets) [] 20,300 – 20,300
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• Relates to the impairment of Cleveland, Wacol and other properties.

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4 OTHER INCOME AND EXPENSES

(a) Other income and expenses

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----- Start of picture text -----

2021 2020
$000 $000
Net (loss) / gain on disposal of assets held for sale (500) 400
Rent and other income 400 100
Other items (100) 500
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(b) Expenses

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|||||
|---|---|---|---|
|Employee benefits expense|
|Employee benefits expense|561,800|565,000|
|Defined super contributions|42,400|42,200|
|Share‑based payment (benefit) / expense|2,900|(400)|
|Employee benefits expense|607,100|606,800|
|Impairment losses|
|Trade receivables|400|400|
|Inventories|6,500|20,600|
|Impairment losses (non‑current assets)|[1]|–|20,300|
|Impairment losses|6,900|41,300|

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(1) Relates to the impairment of Cleveland, Wacol and other properties.

Impairment losses on trade receivables, includes amounts written off and amounts provided for, both are recognised within administration and selling expenses. Impairment losses on inventories includes the amounts written off and amounts provided for, both are recognised within cost of sales.

(c) Finance income and costs

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||||
|---|---|---|
|Lease financing interest expense|50,800|54,800|
|Interest and borrowing costs|14,600|13,700|
|Amortisation of borrowing costs|600|600|
|Interest income|(400)|(800)|
|Finance income and costs|65,600|68,300|

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OPTIMISING FOR THE FUTURE 99

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

5 INCOME TAX EXPENSE

(a) Income tax expense

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2021 2020
$000 $000
Current tax 45,500 22,000
Deferred tax (13,700) (5,600)
Adjustments for current tax of prior periods (2,100) (400)
Income tax expense 29,700 16,000
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Included within the Group’s current tax provision and adjustments for prior tax periods in note 5(a), is management’s estimation of potential amounts to finalise an uncertain tax matter under IFRIC 23. The uncertain tax treatment relates to the interpretation of how applicable tax legislation and recent interpretations apply to the Group’s past arrangements. Due to the uncertainty involved, there is a possibility that the outcome of the tax review is different from the amount currently recognised. Management has estimated the amount based on reasonably possible outcomes of current tax liabilities. The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. Also included is a R&D tax credit for $8.5M relating to prior tax periods.

(b) Numerical reconciliation of income tax expense to prima facie tax payable

(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit from continuing operations before income tax expense	113,000	56,100
Tax at the Australian tax rate of 30% (2020 – 30%)	33,900	16,900
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Non‑deductible expenses	(700)	(300)
R&D tax offset	(700)	(600)
Revaluation of inventory tax base in associate	(100)	(100)
	32,400	15,900
Net tax differential and legislative adjustment of overseas operations	–	900
Difference in overseas tax rates	(600)	(400)
Adjustments for current tax of prior periods	(2,100)	(400)
Income tax expense	29,700	16,000

100 INGHAM’S ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

5 INCOME TAX EXPENSE ( CONTINUED )

(c) Deferred taxes

The movements in deferred tax balances for the Group are shown in the tables below:

	OPENING BALANCE $000	CHARGED TO INCOME $000	CHARGED TO EQUITY $000	CLOSING BALANCE $000
2021 Doubtful debts Employee benefits Inventories Other accruals Property, plant and equipment AASB 16 – Leases Provisions Cash flow hedges IPO related expenditure	700 23,100 (42,500) 3,000 (5,700) 10,000 3,200 2,300 1,500	(100) 2,200 1,100 3,200 (200) 10,300 (1,600) 300 (1,500)	– – – – – – – (1,600) –	600 25,300 (41,400) 6,200 (5,900) 20,300 1,600 1,000 –
Net deferred tax (liabilities) / assets	(4,400)	13,700	(1,600)	7,700
2020
Doubtful debts	600	100	–	700
Employee benefits	22,300	800	–	23,100
Inventories	(38,100)	(4,400)	–	(42,500)
Other accruals	1,400	1,600	–	3,000
Property, plant and equipment	(8,300)	2,900	(300)	(5,700)
Provisions	6,500	(3,300)	–	3,200
AASB 16 – Leases	–	10,000	–	10,000
Cash flow hedges	2,200	(600)	700	2,300
IPO related expenditure	3,000	(1,500)	–	1,500
Net deferred tax (liabilities) / assets	(10,400)	5,600	400	(4,400)

(d) IFRIC 23

As at June 2021, the Group has an uncertain tax matter relating to the technical interpretation and application of legislation which remains unclear. As a result, the Group has assessed and recognised a provision in accordance with IFRIC 23 as a weighted average provision, based on the probability of a range of outcomes using the expected value approach.

OPTIMISING FOR THE FUTURE 101

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

6 CASH AND CASH EQUIVALENTS

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2021 2020
$000 $000
Cash at bank and on hand 157,700 133,800
Short‑term deposits 400 400
Cash and cash equivalents 158,100 134,200
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Short‑term deposits are presented as cash equivalents as they have a maturity of less than three months.

7 TRADE AND OTHER RECEIVABLES

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2021 2020
$000 $000
Trade receivables 215,100 196,900
Provision for doubtful debts (2,000) (2,300)
Net trade receivables 213,100 194,600
Other receivables 6,100 4,200
Prepayments 3,500 3,800
Trade and other receivables 222,700 202,600
Movement in the provision for doubtful debts:
At start of period (2,300) (2,300)
Impairment expense recognised during the year (400) (400)
Receivables written off during the year as uncollectable 700 400
Balance at end of period (2,000) (2,300)
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Due to the short‑term nature of current receivables, their carrying amount is assumed to approximate their fair value.

The Group has considered the collectability and recoverability of trade receivables. A provision for doubtful debts is calculated using an expected credit losses provision matrix. The provision matrix is based on the Group’s historical observed default rates, adjusted for forward looking estimates. The historical observed default rates are updated to reflect current and forecast credit conditions on each reporting date. Provisions for specific receivables are recognised in addition to the general provision originating from the expected credit losses matrix.

The current uncertainties surrounding the COVID‑19 environment presents challenges forecasting expected future credit losses. Ingham’s continues to execute a variety of different credit management strategies to mitigate credit risk and collect cash.

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2021 2020
$000 $000
Current 208,900 181,700
1 to 30 3,500 5,400
31 to 60 600 2,600
61 to 90 100 1,500
90+ – 3,400
Impaired (provision for doubtful debts) 2,000 2,300
Trade receivables 215,100 196,900
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102 INGHAM’S ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

8 BIOLOGICAL ASSETS

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2021 2020
$000 $000
Breeder 37,500 39,500
Broiler 71,700 68,700
Eggs 12,600 12,500
Biological assets 121,800 120,700
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All movements in the value of biological asset classes are due to purchases and consumption in the ordinary course of business.

The Group is exposed to a number of risks relating to its biological assets:

(I) REGULATORY AND ENVIRONMENTAL RISK

The Group is subject to laws and regulations in the countries in which it operates. The Group has established environmental policies and procedures aimed at compliance with local environmental and other laws.

(II) CLIMATE AND OTHER RISKS

The Group’s biological assets are exposed to the risk of damage from climatic changes, diseases and other natural forces. The Group has extensive processes in place aimed at monitoring and mitigating those risks, including regular health inspections. The Group is also insured against natural disasters.

9 INVENTORIES

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2021 2020
$000 $000
Processed Poultry 116,200 146,200
Feed 55,600 47,300
Other 34,900 38,300
Inventories (gross) 206,700 231,800
Inventory obsolescence provision (10,600) (14,800)
Inventories 196,100 217,000
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Inventory is assessed for excess or slow‑moving stock, stock sold below net realisable selling price and other indicators of obsolescence in calculating inventory obsolescence provision. Other inventories include medication, packaging and consumables.

10 ASSETS CLASSIFIED AS HELD FOR SALE

	2021 $000	2020 $000
Assets classified as held for sale	3,700	12,300

The carrying amount of assets classified as held for sale in 2021 represents land and building assets currently marketed for sale in Bungonia NSW with an expected settlement date of 10 September 2021. The carrying amount of assets classified as held for sale in 2020 represents land and building assets previously marked for sale in Hamilton, NZ, which was settled on 26 March 2021.

OPTIMISING FOR THE FUTURE 103

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

11 PROPERTY, PLANT AND EQUIPMENT

	FREEHOLD LAND $000	FREEHOLD BUILDINGS $000	LEASEHOLD BUILDINGS $000	PLANT AND EQUIPMENT $000	CAPITAL WORK IN PROGRESS $000	TOTAL $000
2021 Cost Opening balance Additions Transfers Assets held for sale Disposals / Impairment Exchange differences	27,300 – – (1,300) – –	24,600 – – (2,200) – –	12,100 2,500 – – – –	590,100 – 75,800 (300) (1,400) 4,600	64,900 66,300 (75,800) – – –	719,000 68,800 – (3,800) (1,400) 4,600
Closing balance	26,000	22,400	14,600	668,800	55,400	787,200
Accumulated Depreciation Opening balance Depreciation charge Assets held for sale Disposals Exchange differences	– – – – –	(1,800) (700) 100 – (100)	(3,200) (2,400) – – –	(263,700) (53,200) – 400 (4,700)	– – – – –	(268,700) (56,300) 100 400 (4,800)
Closing balance	–	(2,500)	(5,600)	(321,200)	–	(329,300)
Net book value	26,000	19,900	9,000	347,600	55,400	457,900
2020
Cost
Opening balance	30,100	27,100	12,100	544,000	33,400	646,700
Additions	–	–	–	–	95,700	95,700
Transfers	–	2,700	–	61,300	(64,000)	–
Assets held for sale	(2,500)	(2,900)	–	(5,300)	–	(10,700)
Disposals	–	(2,100)	–	(4,000)	–	(6,100)
Exchange differences	(300)	(200)	–	(5,900)	(200)	(6,600)
Closing balance	27,300	24,600	12,100	590,100	64,900	719,000
Accumulated Depreciation
Opening balance	–	(900)	(2,400)	(225,000)	–	(228,300)
Depreciation charge	–	(1,100)	(800)	(52,900)	–	(54,800)
Disposals	–	200	–	9,400	–	9,600
Exchange differences	–	–	–	4,800	–	4,800
Closing balance	–	(1,800)	(3,200)	(263,700)	–	(268,700)
Net book value	27,300	22,800	8,900	326,400	64,900	450,300

The valuation basis of freehold land and buildings is fair value being the amounts for which the assets could be exchanged between willing parties in an arm’s length transaction, based on current prices in an active market for similar properties in the same location and condition. In the intervening years, management will assess the reasonableness of the carrying value of Land and Buildings and make any necessary adjustments to carrying values for identified impairments.

104 INGHAM’S ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

12 RIGHT‑OF‑USE ASSETS

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LAND AND CONTRACT EQUIPMENT AND
BUILDING GROWERS MOTOR VEHICLE TOTAL
$000 $000 $000 $000
2021
Balance at 27 June 2020 814,600 601,600 13,000 1,429,200
Additions – 9,200 – 9,200
Re‑measurements [(1)] 80,300 39,100 1,800 121,200
Depreciation (67,500) (133,900) (7,500) (208,900)
Modification [(2)] 25,000 – – 25,000
Net foreign currency movement (400) (400) – (800)
Balance at 26 June 2021 852,000 515,600 7,300 1,374,900
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(1) Re‑measurements during the year include change in lease term assumptions, CPI increases, term extension from options exercised and additional lease space taken up under existing contractual terms.

(2) Modifications during the year are due to contract renewals, variations in price and extensions of contracts across Australia and New Zealand.

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LAND AND CONTRACT EQUIPMENT AND
BUILDING GROWERS MOTOR VEHICLE TOTAL
$000 $000 $000 $000
2020
Balance at 30 June 2019 878,700 792,200 19,100 1,690,000
Additions – 34,900 4,300 39,200
Re‑measurements [] 16,900 (97,000) – (80,100)
Depreciation (69,400) (128,700) (10,400) (208,500)
Impairment charge (10,700) – – (10,700)
Modification (1,000) – – (1,000)
Net foreign currency movement 100 200 – 300
Balance at 27 June 2020 814,600 601,600 13,000 1,429,200
CPI increases to underlying lease payments during FY20. Lease terms on contract growers have been set to contract expiry as the strategic objective is that the Contract Growers will move to
performance‑based agreements. The prior assumption included a one‑year extension for all Contract Growers.
2021 2020
$000 $000
Variable lease payments not included in the measurement of lease liabilities 96,800 89,000
Expenses relating to low value leases 4,000 1,200
Total 100,800 90,200
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The total cashflow payments related to leases in FY21 was $343,900,000 (FY20: $322,700,000).

OPTIMISING FOR THE FUTURE 105

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

13 TRADE AND OTHER PAYABLES

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2021 2020
CURRENT NON‑CURRENT TOTAL CURRENT NON‑CURRENT TOTAL
$000 $000 $000 $000 $000 $000
Trade payables 256,200 4,000 260,200 257,600 3,500 261,100
Inventory procurement trade payable 110,000 – 110,000 121,700 – 121,700
Other payables 30,400 – 30,400 23,600 – 23,600
Trade and other payables 396,600 4,000 400,600 402,900 3,500 406,400
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The Group has an inventory procurement trade payable with a third‑party financial institution, which is interest bearing. Trade bills of exchange are paid by the financial institution direct to the supplier and the Group settles the payable on extended payment terms. The amount utilised and recorded within trade and other payables at 26 June 2021 was $110.0M (27 June 2020: $121.7M).

14 BORROWINGS

(a) Interest bearing loans

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CARRYING AMOUNT PRINCIPAL AMOUNT DRAWN
2021 2020 2021 2020
$000 $000 $000 $000 INTEREST RATE MATURITY
Unsecured liabilities
Tranche A 199,200 199,500 200,000 200,000 Floating rate [(a)] November 2023 [(b)]
Tranche B 199,100 199,400 200,000 200,000 Floating rate [(a)] November 2024 [(c)]
Tranche C – 50,000 – 50,000 Floating rate [(a)] November 2023 [(b)]
Borrowings 398,300 448,900 400,000 450,000
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(a) Floating rates are at Bank Bill Swap Rate plus a predetermined margin. The Group has entered into hedging of the floating interest rate, as further described in note 23. The Group has an additional undrawn facility under Tranche C of $138.0M.

(b) Term expiry has changed from November 2021 to November 2023.

(c) Term expiry has changed from November 2022 to November 2024.

(b) Fair value

For external borrowings, the fair values are not materially different to their carrying amounts, since the interest payable on the borrowings is either close to current market rates or the borrowings are of a short‑term nature. The Group has entered into interest rate swaps in relation to the interest payable.

15 PROVISIONS

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2021 2020
CURRENT NON‑CURRENT TOTAL CURRENT NON‑CURRENT TOTAL
$000 $000 $000 $000 $000 $000
Workers’ compensation 10,300 16,600 26,900 7,600 16,700 24,300
Employee benefits 77,500 6,600 84,100 71,900 6,200 78,100
Make good 1,000 3,000 4,000 – 1,000 1,000
Restructuring – – – 100 – 100
Other provisions 4,100 – 4,100 – – –
Provisions 92,900 26,200 119,100 79,600 23,900 103,500
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106 INGHAM’S ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

15 PROVISIONS ( CONTINUED )

(a) Employee benefits

NZ HOLIDAYS ACT

Certain recent court decisions, not involving Ingham’s, regarding the correct application of various employee entitlements in New Zealand have an impact on Ingham’s. The Group has assessed and estimated the financial impact and recognised a provision in the financial statements as at 26 June 2021.

Ingham’s is committed to ensuring its people are paid in accordance with their employment arrangements and the law and continues to monitor its practices, systems and processes.

(b) Workers compensation

Workers compensation provisions are determined by actuarial assessment by Mr William Szuch Bsc, BA, MBA, FIA, FIAA Principal of WSA Financial Consulting Pty Limited and Mr Bruce Harris, BEng(Hons) FIAA Consultant of AM actuaries, considering the liability for reported claims still outstanding, settled claims that may be reopened in the future, claims incurred but not reported as at balance date and a provision for future expenses, adjustments for claims cost escalation and investment earnings on the claims provision.

(c) Make good provision

The Group is required to restore certain leased premises to their original condition at the end of the respective lease terms. A provision has been recognised for the present value of the estimated expenditure required to remove leasehold improvements.

(d) Restructuring provision

Provisions for restructuring are recognised when a detailed formal plan has been approved and either commenced or a valid expectation has been raised to those persons affected. The provision is based on expenditure to be incurred which is directly caused by the restructuring and does not include costs associated with ongoing activities. The adequacy of the provision is reviewed regularly and adjusted if required. Revisions in the estimated amount of a restructuring provision are reported in the period in which the revision in the estimate occurs.

(e) Movements

Movements in each class of provision during the financial year, other than employee benefits, are set out below:

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WORKERS MAKE GOOD ONEROUS
COMPENSATION PROVISIONS PROVISION RESTRUCTURING OTHER TOTAL
$000 $000 $000 $000 $000 $000
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Balance at 29 June 2019	23,200	2,000	4,400	2,800	1,600	34,000
Reclassified under AASB 16	–	–	(4,400)	–	(1,600)	(6,000)
Balance at 29 June 2019	23,200	2,000	–	2,800	–	28,000
Charged to profit or loss	12,200	1,300	–	3,600	–	17,100
Amounts used during the period	(11,100)	(2,300)	–	(6,300)	–	(19,700)
Balance at 27 June 2020	24,300	1,000	–	100	–	25,400
Balance at 27 June 2020	24,300	1,000	–	100	–	25,400
Charged to profit or loss	13,200	3,100	–	–	4,100	20,400
Amounts used during the period	(10,600)	(100)	–	(100)	–	(10,800)
Balance at 26 June 2021	26,900	4,000	–	–	4,100	35,000

OPTIMISING FOR THE FUTURE 107

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

16 DERIVATIVE FINANCIAL INSTRUMENTS

The Group has the following derivative financial instruments:

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2021 2020
CURRENT NON‑CURRENT TOTAL CURRENT NON‑CURRENT TOTAL
$000 $000 $000 $000 $000 $000
Interest rate swap contracts
‑ Cash flow hedges (liability) (2,000) (1,800) (3,800) (4,000) (3,600) (7,600)
‑ Cash flow hedges (asset) 500 – 500 – – –
Derivative financial instruments (1,500) (1,800) (3,300) (4,000) (3,600) (7,600)
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CLASSIFICATION OF DERIVATIVES

Derivatives are classified as held for trading and accounted for at fair value through profit or loss unless they are designated as hedges. They are presented as current assets or liabilities if they are expected to be settled within 12 months after the end of the reporting period.

The Group’s accounting policy for its cash flow hedges is set out in note 2(l). For hedged forecast transactions that result in the recognition of a non‑financial asset, the Group has elected to include related hedging gains and losses in the initial measurement of the cost of the asset.

17 CONTRIBUTED EQUITY

(a) Share capital

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2021 2020 2021 2020
SHARES SHARES $000 $000
Ordinary shares issued 371,679,601 371,679,601 108,100 109,200
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(b) Movements in ordinary shares

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SHARES $000
Balance at 29 June 2019 371,679,601 109,100
Amounts paid for shares under escrow – 100
Balance at 27 June 2020 371,679,601 109,200
Balance at 27 June 2020 371,679,601 109,200
Amounts paid for treasury shares – (1,100)
Balance at 26 June 2021 371,679,601 108,100
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108 INGHAM’S ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

17 CONTRIBUTED EQUITY ( CONTINUED )

(c) Ordinary shares

Ordinary shares entitle the holder to participate in dividends and to share the proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Ordinary shares have no par value and the company does not have a limited amount of authorised capital.

(d) Treasury shares

Treasury shares outstanding of 503,361 shares (FY20: 200,000) are shares in Inghams Group Limited that are held in trust by Ingham 2 Pty Limited, a subsidiary, and Pacific Life Custodians Pty Limited for the purpose of issuing shares under the employee share scheme. Information relating to the Ingham’s Long‑Term Incentive Plan, including details of shares issued, exercised and lapsed during the financial period and outstanding at the end of the reporting period, is set out in note 20.

18 DIVIDENDS

(a) Ordinary shares

	2021 $000	2020 $000
Dividends paid	52,800	66,200

The directors propose that a final dividend of 9.0 cents per ordinary share be declared on 20 August 2021, and be paid on 6 October 2021. The proposed FY21 final dividend will be fully franked for Australian tax purposes. The financial effect of this dividend has not been brought to account in these consolidated financial statements and will be recognised in subsequent financial reports.

(b) Franking credits

	2021 $000	2020 $000
Amount of Australian franking credits available for subsequent periods to the shareholders
of Inghams Group Limited	19,500	34,100

The ability to utilise the franking credits is dependent upon the ability to declare dividends in the future included in the above line. Franking credits of $16.3M (2020: $16.3M) are only available to be used under very limited and specific circumstances.

OPTIMISING FOR THE FUTURE 109

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

19 RESERVES

(a) Other reserves

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2021 2020
$000 $000
Asset revaluation reserve 9,000 10,500
Foreign currency translation reserve 10,500 11,000
Cash flow hedge reserve (1,500) (6,300)
Share‑based payments reserve 12,800 10,500
Other reserves 30,800 25,700
Movements:
Asset revaluation reserve
Balance at beginning of financial period 10,500 11,400
Revaluation of land and buildings reclassified to assets held for sale (2,200) (1,200)
Deferred tax 700 300
Balance at end of the financial year 9,000 10,500
Foreign currency translation reserve
Balance at beginning of financial period 11,000 14,000
Currency translation differences arising during the period (500) (3,000)
Balance at end of the financial year 10,500 11,000
Cash flow hedge reserve
Balance at beginning of financial period (6,300) (4,600)
Balance reclassified to profit and loss in period 3,300 4,600
Revaluation – gross 2,200 (9,000)
Deferred tax (700) 2,700
Balance at end of the financial year (1,500) (6,300)
Share‑based payments reserve
Balance at beginning of financial period 10,500 14,300
Share based payment expense 2,900 (400)
Settlement of share plan (600) (3,400)
Balance at end of the financial year 12,800 10,500
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(b) Nature and purpose of other reserves

(I) ASSET REVALUATION RESERVE

The asset revaluation reserve is used to record increments and decrements on the revaluation of non‑current assets, as described in note 11. The balance of the reserve may be used to satisfy the distribution of bonus shares to shareholders and is only available for the payment of cash dividends in limited circumstances as permitted by law. Upon sale of the asset, the balance relating to that asset is transferred to retained earnings.

(II) FOREIGN CURRENCY TRANSLATION

Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income as described in note 2(c) and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed of.

110 INGHAM’S ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

19 RESERVES ( CONTINUED )

(b) Nature and purpose of other reserves (continued)

(III) CASH FLOW HEDGES

The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised in other comprehensive income, as described in note 2(l). Amounts are reclassified to profit or loss when the associated hedged transaction affects profit or loss.

(IV) SHARE‑BASED PAYMENTS

The share‑based payments reserve is used to recognise the grant date fair value of shares issued to employees but not vested.

20 SHARE‑BASED PAYMENTS

Ingham’s Employees Share Plan

Executive KMP and senior executives are invited annually to participate in a three‑year Long‑Term Incentive Plan (LTIP), awarded in share rights with these share rights being performance based and only vest if minimum performance hurdles are met. The share rights do not attract voting rights or entitle the holder to receive dividends.

In addition, Executive KMP and certain senior executives have a portion of any actual Short‑Term Incentive Plan (STIP) award deferred into share rights, that are required to be held for a period of 12 months before vesting into shares. No performance conditions exist for these share rights to vest, they are time‑based vesting on the completion of the service period.

A KMP of the Group was granted an interest‑free loan in September 2018 to subscribe to shares of Inghams Group Limited. This loan is non‑recourse other than to the shares held by that employee, and the proceeds of the loan must be used to buy shares. The arrangement has been accounted for as share options. These options entitle the holder to receive dividends on ordinary shares of the Company, and these dividends are required to be used to repay the loans attached. Shares under this scheme are held in trust for employees by a subsidiary, Ingham 2 Pty Limited. This interest free non‑recourse loan to purchase shares in Ingham’s under a legacy arrangement has a balance owing as at 26 June 2021 of A$23,600, with this loan being repaid from dividends from the ordinary shares held. It is expected that this loan will be fully repaid within FY22. There are no other loans to KMP, and no loan arrangements will be offered in the future. No options were issued during the year or were held by employees at the end of FY21.

Share rights outstanding at the end of the year have the following expiry dates:

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2021 2020
EXERCISE NUMBER OF EXERCISE NUMBER OF
GRANT DATE EXPIRY DATE PRICE RIGHTS / OPTIONS PRICE RIGHTS / OPTIONS
10 June 2021 1 July 2023 – 1,097,339 – –
15 September 2020 1 July 2021 – 299,654 – –
17 April 2020 25 June 2022 – 1,448,756 – 1,996,208
02 April 2020 31 December 2022 [(1)] – 14,410 – –
01 September 2020 31 July 2023 [(1)] – 15,031 – –
06 December 2018 30 June 2021 – 34,860 – 80,095
06 December 2018 30 June 2020 – – – 11,260
04 December 2018 30 June 2021 – 506,862 – 506,862
05 November 2018 30 June 2021 – 354,001 – 306,459
07 November 2017 30 June 2020 – – – 157,779
22 December 2015 21 December 2020 [(2)] $1.40 200,000 $1.40 200,000
Share‑based payments 3,970,913 3,258,663
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(1) Retention Share Rights awarded on service‑based vesting only to key senior managers. The number of rights was calculated by dividing the face value of their award by $3.326, being the volume weighted average share price (VWAP) of Ingham’s shares traded on the ASX in the 10 days after 21 August 2020.

(2) The options for 200,000 shares relate to a KMP interest‑free loan in September 2018. Based on expected dividend payouts, the option was expected to expire in December 2020 but a balance of A$23,600 remaining outstanding as of 26 June 2021. The options will continue to remain outstanding and is expected to vest in FY22 upon final dividend settlements.

OPTIMISING FOR THE FUTURE 111

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

20 SHARE‑BASED PAYMENTS ( CONTINUED )

STI OFFER

The STIP provides the Executive KMP and other senior members of the management team a cash or cash / equity incentive where specific outcomes have been achieved in the financial year. STIP payments are calculated as a percentage of total TFR, as per contractual arrangements and conditional on achieving performance objectives against key financial measures (underlying pre AASB 16 EBITDA and Core Poultry Sales Volume Growth) and two vital non‑financial measures (people and food safety).

STI restricted shares were measured based on the Board approved fixed dollar outcome for the financial year. The number of rights was calculated by dividing the face value of their award by $3.326, being the volume weighted average price (VWAP) of Ingham’s shares traded on the ASX in the 10 days after 21 August 2020.

LONG‑TERM INCENTIVE PLANS

FY21‑FY23 LTIP OFFER

The FY21‑FY23 LTIP was approved at the 2020 AGM, with the below table clearly outlining the key terms of the Offer:

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TERM DESCRIPTION
Eligibility to participate Offers may be made at the Board’s discretion to employees of the Inghams Group or any other person the Board
in LTIP Offer determines to be eligible to receive a grant under the Plan.
The FY21‑23 LTIP Offer has been made to the following current KMP:
• Jonathan Gray (CEO, NZ), (70% of TFR at Maximum)
• Gary Mallett (CFO), (70% of TFR at Maximum)
The former and newly appointed CEO/MDs were both deemed ineligible for an FY21‑FY23 LTIP award.
Please see Jim Leighton’s termination arrangements on page 80 and Andrew Reeves’ service agreement
on page 79 for more information.
Offers under the Plan The LTIP Offer is a grant of performance rights.
Grant of Rights A Right entitles the participant to acquire a share for nil consideration at the end of the performance period,
subject to meeting specific performance conditions. The Board retains the discretion to make a cash payment
to participants on vesting of the Rights in lieu of an allocation of shares.
Quantum of Rights The aggregate face value at maximum of the LTIP Offer to all participants (Executive KMP and Senior Management)
is $3.65 million.
The final number of Rights awarded to each participant was calculated by dividing the face value of their LTIP
award by $3.326, being the volume weighted average price (VWAP) of Ingham’s shares traded on the ASX in
the 10 days after 21 August 2020. (i.e. the announcement of Ingham’s FY20 annual results.)
Performance Period 3 years, from the beginning of FY21 to the end of FY23.
Performance conditions Relative TSR (50% of Award)
For this component, the Company’s relative TSR will be compared to a comparator group comprising the ASX 200
(excluding companies classified as financial, mining and resources) and vest according to the following schedule:
COMPANY’S RELATIVE TSR RANK IN THE
COMPARATOR GROUP OVER PERFORMANCE PERIOD % OF RIGHTS THAT VEST
Less than 50th percentile Nil
At 50th percentile (threshold) 50%
Between 50th and 75th percentile Straight line pro rata Vesting between 50% and 100%
At 75th percentile or above 100%
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112 INGHAM’S ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

20 SHARE‑BASED PAYMENTS ( CONTINUED )

Return on invested capital (50% of award)

For this component, the Company’s Underlying Return on Invested Capital pre AASB 16 (“ROIC”) will be calculated as the equivalent of the pre AASB 16 net operating profit after tax, divided by average invested capital. ROIC for each of the three years forming the performance period will be averaged to provide an overall outcome.

The level of vesting of this component will be determined according to the following schedule:

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COMPANY’S ROIC OUTCOME % OF RIGHTS THAT VEST
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	Less than Threshold target Nil At Threshold target 50% Between Threshold and Maximum target Straight line pro rata Vesting between 50% and 100% At Maximum target 100%
Voting and dividend entitlements	Performance rights granted under the LTIP do not carry dividend or voting rights prior to vesting. Shares allocated upon vesting of performance rights carry the same dividend and voting rights as other Ingham’s shares.
Re‑testing	Performance will not be re‑tested if the performance conditions are not satisfied at the end of the performance period. Any Rights that remain unvested at the end of the performance period will lapse immediately.
Restrictions on dealing	The Executive KMP must not sell, transfer, encumber, hedge or otherwise deal with performance rights. The Executive KMP will be free to deal with the shares allocated on vesting of the performance rights, subject to the requirements of Ingham’s Securities Dealing Policy at that time.
Change of control	Under the Plan rules and the terms of the LTIP awards, the Board may determine in its absolute discretion that some or all of the Executive KMP’s performance rights will vest on a likely change of control.
Clawback	Under the Plan rules and the terms of the LTIP awards, the Board has clawback powers which it may exercise if, among other things: • The Executive KMP has acted fraudulently or dishonestly; • Has engaged in gross misconduct, brought Ingham’s, the Inghams Group or any Ingham’s group company into disrepute or breached their obligations to the Inghams Group; • Ingham’s is required by or entitled under law or Ingham’s policy to reclaim remuneration from the Executive KMP; • There is a material misstatement or omission in the accounts of an Inghams Group company; or • The Executive KMP’s entitlements vest or may vest as a result of the fraud, dishonesty or breach of obligations of any other person and the Board is of the opinion that the performance rights would not have otherwise vested.
Cessation of employment	If the participant ceases employment for cause or due to their resignation, unless the Board determines otherwise, any unvested Rights will automatically lapse. The Board has the discretion to designate a “good leaver”, whereby Rights will not automatically lapse. In all other circumstances, the Rights will be pro‑rated (based on the proportion of the performance period that has elapsed) and remain on foot and subject to the original performance conditions, unless the Board exercises a discretion to treat them otherwise.

The fair value of the LTI offer at grant date was determined using an adjusted form of the Black Scholes Model. The weighted average grant date fair value of rights granted in the year was $2.69.

The model inputs for performance rights granted during the year ended included:

(a) Exercise price $Nil (2020: $Nil)

• (b) Share price at grant date $3.71 (2020: $3.39)

• (c) Expected price volatility 33% (2020: 24‑28%)

• (d) Expected dividend yield 4.3% (2020: 4.8%)

• (e) Risk‑free interest rate 0.014% (2020: 0.23%)

OPTIMISING FOR THE FUTURE 113

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

20 SHARE‑BASED PAYMENTS ( CONTINUED )

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2021 2020
NUMBER OF NUMBER OF
GRANT DATE EXPIRY DATE RIGHTS RIGHTS
10 June 2021 1 July 2023 1,097,339 –
17 April 2020 25 June 2022 1,448,756 1,996,208
6 December 2018 30 June 2020 – 11,260
6 December 2018 30 June 2021 34,860 80,095
4 December 2018 30 June 2021 506,862 506,862
5 November 2018 30 June 2021 354,001 306,459
7 November 2017 30 June 2020 – 157,779
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21 CASH FLOW INFORMATION

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2021 2020
$000 $000
Reconciliation of profit after income tax
Profit after tax for the period 83,300 40,100
Depreciation 265,300 263,400
Finance costs 66,000 69,100
Share Based Payment Expense 2,900 (400)
Share of Profit – Associate (400) –
Impairment of assets – 20,300
Net loss or (gain) on sales of assets 500 (400)
Change in operating assets and liabilities
(Increase) / decrease in trade and other receivables (20,100) (9,400)
(Increase) / decrease in biological assets (1,100) 3,500
(Increase) / decrease in inventories 20,900 (54,000)
Increase / (decrease) in trade and other payables (6,400) 43,000
Increase / (decrease) in provision for income taxes payable 31,500 (25,200)
Increase / (decrease) in deferred tax asset / liabilities (13,800) (5,900)
Increase / (decrease) in other provisions 11,300 200
(Increase) / decrease in financial assets and liabilities at fair value through profit or loss – 200
Net cash provided by operating activities 439,900 344,500
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114 INGHAM’S ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

22 RELATED PARTY DISCLOSURES GROUP STRUCTURE

(a) Parent entity

The ultimate parent entity of the group is Inghams Group Limited.

(b) Subsidiaries

The consolidated financial statements include the financial statements of Inghams Group Limited and its subsidiaries as follows:

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EQUITY HOLDING
COUNTRY OF 2021 2020
NAME OF ENTITY INCORPORATION % %
Ingham Holdings II Pty Limited [(a),(c)] Australia 100 100
Ingham Holdings III Pty Limited [(a) (c)] Australia 100 100
Adams Bidco Pty Limited [(a),(c)] Australia 100 100
Ingham Enterprises Pty Limited [(a),(c)] Australia 100 100
Inghams Enterprises Pty Limited [(a),(c)] Australia 100 100
The Free Ranger (formerly Ingham Finco Pty Limited) [(b)] Australia 100 100
Ingham 2 Pty Limited [(b)] Australia 100 100
Agnidla Pty Limited [(b),(c)] Australia 100 100
Aleko Pty Limited [(b),(c)] Australia 100 100
Inghams Enterprises (NZ) Pty Limited [(a),(c)] Australia 100 100
Inghams Property Management Pty Limited [(b),(c)] Australia 100 100
Ovoid Insurance Limited Bermuda 100 100
Ovoid Insurance Pty Limited [(b)] Australia 100 100
Inadam Pty Limited [(b),(c)] Australia 100 100
Inghams (NZ) No 2 Limited New Zealand 100 100
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(a) These subsidiaries have been granted relief from the necessity to prepare financial reports under the option available to the Company under ASIC Corporations (Wholly Owned Companies) Instrument 2016 / 785.

(b) These subsidiaries are not audited as they are small proprietary companies which are not required to prepare audited financial statements under ASIC Corporations (Audit Relief) Instrument 2016 / 784.

(c) These subsidiaries, along with Inghams Group Limited, form the Deed of Cross Guarantee Group described further from Note 30.

(c) Key management personnel compensation

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2021 2020
$000 $000
Short‑term employee benefits 5,208 3,894
Other long‑term employee benefits 419 183
Share based payments 409 1,319
Termination payments 1,125 –
Key management personnel compensation 7,161 5,396
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Information regarding individual directors’ and executives’ compensation and some equity instruments disclosures as permitted by Corporations Regulations 2M.3.03 and 2M.6.04 is provided in the Remuneration Report section of the Directors’ Report.

No director has entered into a material contract with the Group since the end of the previous financial year and there were no material contracts involving directors’ interests existing at year end.

OPTIMISING FOR THE FUTURE 115

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

22 RELATED PARTY DISCLOSURES ( CONTINUED )

(d) Transactions with other related parties

The following transactions occurred with related parties:

Jonathan Gray received a NZ$350,000 non‑interest bearing loan in September 2018 in conjunction with his urgent relocation to New Zealand to take up the New Zealand CEO role at a critical time. Jonathan Gray fully repaid to Ingham’s the NZ$350,000 relocation loan on 7 October 2020.

Jonathan Gray received an interest free non‑recourse loan to purchase shares in Ingham’s under a legacy arrangement with a balance owing as at 26 June 2021 of A$23,600, with this loan being repaid from dividends from the ordinary shares held. It is expected that this loan will be fully repaid within FY22.

There are no other loans to KMP and no loan arrangements will be offered in the future.

23 FINANCIAL RISK MANAGEMENT

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and commodity price risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.

Risk management is carried out by a central treasury department. Treasury identifies, evaluates and hedges financial risks in close co‑operation with the Group’s operating units. Treasury provides overall risk management, covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non‑derivative financial instruments in accordance with the Group’s facilities agreement and company policies.

The Group uses derivative financial instruments such as foreign exchange contracts and interest rate swaps to hedge certain risk exposures. Derivatives are exclusively used for economic hedging purposes and not as trading or speculative instruments. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks, and aging analysis for credit risk.

FAIR VALUE HIERARCHY

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

Fair value inputs are summarised as follows:

• Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available‑for‑sale securities) is based on quoted market prices at the end of the reporting period.

• Level 2: The fair value of financial instruments that are not traded in an active market (for example, over‑the‑counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

• Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Fair value inputs are summarised as follows:

	FAIR VALUE
	HIERARCHY	NOTE	VALUATION TECHNIQUE
Derivatives	Level 2	16	Calculated as the present value of estimated future cash flows using a
			market‑based yield curve sourced from available market data quoted
			for all major interest rates.
Property, Plant & Equipment	Level 3	11	Based on current prices in an active market for similar properties
			in the same location and condition.

Property, plant and equipment is valued using independent valuers who use recent land and property sales adjusted for characteristics of the asset(s) being valued such as location and use.

Fair value hierarchy is re‑assessed annually for any change in circumstance that may suggest a revised level be assigned to a type of balance measured at fair value.

116 INGHAM’S ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

23 FINANCIAL RISK MANAGEMENT ( CONTINUED )

(a) Market risk

(I) FOREIGN EXCHANGE RISK

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures.

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.

Management has a policy requiring Group companies to manage their foreign exchange risk against their functional currency. The Group companies are required to hedge their foreign exchange risk exposure arising from future commercial transactions and recognised assets and liabilities using forward contracts. Additionally, the Group will look to manage the translation exposure to foreign denominated profits through the use of derivatives such as forward contracts.

(II) FOREIGN EXCHANGE SENSITIVITY

The Group has some exposure to exchange rate risk as it purchases some of the supplies in foreign currencies and has a subsidiary with a New Zealand dollar (NZD) functional currency. The exposure to other currencies is collectively immaterial and as such the Group’s foreign currency exposure is material in respect of NZD.

	IMPACT ON OTHER	IMPACT ON OTHER
	IMPACT ON POST TAX PROFITS COMPONENTS OF EQUITY
	2021 $000 2020 $000 2021 $000	2020 $000
+100 bp variability in exchange rate	100 700 1,400	1,400
‑100 bp variability in exchange rate	(100) (700) (1,400)	(1,400)

(III) CASH FLOW AND FAIR VALUE INTEREST RATE RISK

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 if the borrowings are carried at fair value. Group policy is to maintain at least 50% of its term borrowings at fixed rate using interest rate swaps to achieve this. During the year ended 26 June 2021, the Group’s borrowings at variable rate were denominated in Australian Dollars.

The Group’s borrowings and receivables are carried at amortised cost. They are therefore not subject to interest rate risk as defined in AASB 7.

The Group manages its cash flow interest rate risk by using floating‑to‑fixed interest rate swaps. Under these swaps, the Group agrees with other parties to exchange, at specified intervals, the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts.

As at the end of the reporting period, the Group had the following interest rate swap contracts outstanding:

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NOTIONAL PRINCIPAL AMOUNT INTEREST RATE
2021 2020 2021 2020
$000 $000 $000 $000
Interest rate swap 200,000 200,000 2.0% to 3.0% 3.0% to 4.0%
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The contracts require settlement of net interest receivable or payable every month. The settlement dates align with the dates on which interest is payable on the underlying debt.

OPTIMISING FOR THE FUTURE 117

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

23 FINANCIAL RISK MANAGEMENT ( CONTINUED )

(a) Market risk (continued)

SENSITIVITY

Profit or loss is sensitive to higher / lower interest income from cash and cash equivalents as a result of change in interest rates. Other components of equity change as a result of an increase / decrease in the fair value of the cash flow hedges of borrowings.

		IMPACT ON OTHER	IMPACT ON OTHER
	IMPACT ON POST TAX PROFITS	COMPONENTS OF EQUITY
	2021 $000 2020 $000	2021 $000		2020 $000
+100 bp variability in exchange rate	(2,100) (1,400)	3,800		2,500
‑100 bp variability in exchange rate	2,100 2,000	(3,900)	(2,500)

(IV) COMMODITY PRICE

The Group’s exposure to commodity price risk arises from commercial transactions required for the operations of the business, however exposure is not considered significant. To manage its commodity price risk the Group enters into forward contracts to purchase grain. This is performed through monitoring movements in price. As these are forward contracts for items to be used in the ordinary course of business, no derivative asset or liability is recognised at year end, and as such a 10% movement in commodity prices at year end would not impact reported profit for the year ended 26 June 2021.

(b) Credit risk

Credit risk arises from cash and cash equivalents, in the money derivative financial instruments, deposits with banks and financial institutions and the risk of a financial loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

The Group has a credit policy which provides guidelines for the management of credit risk. The guideline provides for the manner in which the credit risk of customers is assessed and the use of credit ratings and other information in order to set appropriate account limits. Customers that do not meet minimum credit criteria are required to pay up front. Customers who fail to meet their account terms are reviewed for continuing credit worthiness.

The maximum exposure to credit risk at the reporting date is the carrying amount of the accounts receivable. For some trade receivables the Group may obtain security in the form of credit insurance. Revenues from five key customers accounted for 55% to 65% of revenue for the year ended 26 June 2021 (2020: 55% to 65%) relating to both operating segments.

Individual receivables which are known to be uncollectable are written off by reducing the carrying amount directly. The Group considers receivables to be in default when the following indicators are present:

• Significant financial difficulties of the debtor; and

• Probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in payments.

Receivables for which an impairment provision was recognised are written off against the provision when there is no reasonable expectation of recovering additional cash.

Impairment losses are recognised in profit or loss within other expenses. Subsequent recoveries of amounts previously written off are credited against other expenses.

118 INGHAM’S ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

23 FINANCIAL RISK MANAGEMENT ( CONTINUED )

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due.

Management monitors rolling forecasts of the Group’s liquidity reserve (comprising the Group’s undrawn re‑drawable term cash advance facility below) and cash and cash equivalents on the basis of expected cash flows. In addition, the Group’s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios.

The Group had access to the following undrawn borrowing facilities at the end of the reporting period:

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2021 2020
$000 $000 $000 $000
DRAWN AVAILABLE DRAWN AVAILABLE
Floating rate
Expiring beyond one year 400,000 138,000 450,000 88,000
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The following liquidity risk disclosures reflect all contractually fixed repayments and interest resulting from recognised financial liabilities and derivatives as of 26 June 2021. The timing of cash flows for liabilities is based on the contractual terms of the underlying contract.

2021 Trade payables Inventory procurement trade payables Other payables Derivative financial liabilities Interest bearing liabilities Lease liabilities	CARRYING VALUE $000 260,200 110,000 30,400 3,300 398,300 1,432,300	CONTRACTUAL CASH FLOWS $000 260,200 110,000 30,400 3,300 400,000 1,839,500	LESS THAN 1 YEAR $000 256,200 110,000 30,400 1,500 – 234,000	1 YEAR TO 5 YEARS $000 4,000 – – 1,800 400,000 756,200	MORE THAN 5 YEARS $000 – – – – – 849,300
	2,234,500	2,643,400	632,100	1,162,000	849,300
2020
Trade payables	261,100	261,100	257,600	3,500	–
Inventory procurement trade payables	121,700	121,700	121,700	–	–
Other payables	23,600	23,600	23,600	–	–
Derivative financial liabilities	7,600	7,600	4,000	3,600	–
Interest bearing liabilities	448,900	450,000	–	450,000	–
Lease liabilities	1,472,300	1,872,500	231,800	813,900	826,800
	2,335,200	2,736,500	638,700	1,271,000	826,800

OPTIMISING FOR THE FUTURE 119

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

24 INTEREST IN JOINT ARRANGEMENTS

A subsidiary has a 50% interest in the joint venture entity, AFB International Pty Limited, the principal activity of which is the supply of high quality and performance palatability products under Bioproducts BioFlavor brand name to the pet food industry in Australia, New Zealand and the Pacific Rim. Information relating to the joint venture entity, presented in accordance with the accounting policy described in note 2(b), is set out below.

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OWNERSHIP INTEREST CARRYING VALUE OF INVESTMENT
2021 2020 2021 2020
% % $000 $000
AFB International Pty Limited
Pet food manufacture 50 50 2,100 1,900
Movement in investment in joint arrangements:
Opening balance 1,900 1,800
Add: share of net profit of joint venture 400 300
Less: dividend received from joint venture (200) (200)
Closing balance 2,100 1,900
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During the year the Group sold goods and services to AFB International Pty Limited to the value of $4,796,329 (2020: $4,822,429). At balance date the amount owed from AFB International Pty Limited to the Group is $323,459 (2020: $346,584). Outstanding balances are unsecured and on normal commercial terms and conditions.

25 CONTINGENT LIABILITIES

Workers Compensation

State WorkCover authorities also require guarantees against workers’ compensation self‑insurance liabilities. The guarantee is based on independent actuarial advice of the outstanding liability. Workers’ compensation guarantees held at each reporting date do not equal the liability at these dates due to the timing of issuing the guarantees.

The probability of having to make a payment under these guarantees is considered remote.

No provision has been made in the consolidated financial statements in respect of these contingencies, however provisions for self‑insured risks, which includes liabilities relating to workers’ compensation claims, have been recognised in the Consolidated Statement of Financial Position at the reporting date.

Workplace incidents

SafeWork NSW and SA are currently investigating two workplace incidents that occurred at Tahmoor and Bolivar. As at reporting date, Ingham’s has not received an indication that SafeWork intends to charge Ingham’s with any offence.

26 COMMITMENTS

Capital commitments

Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:

	2021 $000	2020 $000
Property, plant and equipment	12,400	15,900

120 INGHAM’S ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

27 EARNINGS PER SHARE

Basic EPS is calculated by dividing profit for the year attributable to ordinary equity holders of the Parent by the weighted average number of ordinary shares outstanding during the year.

Diluted EPS is calculated by dividing the profit attributable to ordinary equity holders of the Parent (after adjusting for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

The following table reflects the income and share data used in the basic and diluted EPS computations:

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2021 2020
$000 $000
Earnings
Profit attributable to ordinary equity holders for calculating basic and diluted EPS calculations 83,300 40,100
NUMBER OF SHARES
Number of ordinary shares ‘000 ‘000
Weighted average number of ordinary shares used in the calculation of basic EPS 371,400 371,500
Dilutive effect of share options 1,300 800
Weighted average number of ordinary shares for diluted EPS 372,700 372,300
Basic EPS (cents per share) 22.43 10.79
Diluted EPS (cents per share) 22.35 10.77
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28 REMUNERATION OF AUDITORS

During the period the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non‑related audit firm.

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2021 2020
$000 $000
Amounts received or due and receivable by KPMG for:
Audit and review of financial statements 807 753
Other services [] 35 130
Other assurance services 8 8
Taxation services – 21
Total amount paid or payable to auditors 850 912
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• FY21 and FY20 includes benchmarking data for short‑term and long‑term incentive plans for executive remuneration.

OPTIMISING FOR THE FUTURE 121

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

29 PARENT ENTITY FINANCIAL INFORMATION

Summary financial information

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2021 2020
$000 $000
Current assets – 3,600
Non‑current assets 472,200 469,500
Total assets 472,200 473,100
Current liabilities 25,400 4,600
Non‑current liabilities 400,100 452,500
Total liabilities 425,500 457,100
Net assets / (liabilities) 46,700 16,000
Equity
Contributed equity 108,100 109,200
Accumulated profit / (losses) (67,100) (92,900)
Cash flow hedge reserve (1,800) (5,300)
Share‑based payments reserve 7,500 5,000
46,700 16,000
Profit for the year 78,600 86,800
Total comprehensive income 78,600 86,800
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The parent entity continues to be a going concern despite the net current liability, as the Group has a Deed of Cross Guarantee in place, along with undrawn funding lines.

The parent entity does not have any commitments or contingent liabilities as at 26 June 2021.

122 INGHAM’S ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

30 DEED OF CROSS GUARANTEE

Inghams Group Limited and all of the subsidiaries shown as (c) in note 22 are parties to a deed of cross guarantee dated 22 May 2017, under which each company guarantees the debts of the others. By entering into the deed, the wholly owned entities have been relieved from the requirement to prepare a financial report and directors’ report under ASIC Corporations (Wholly Owned Companies) Instrument 2016 / 285 issued by the Australian Securities and Investments Commission.

The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company will only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up.

(a) Consolidated income statement, consolidated statement of comprehensive income and summary of movements in consolidated retained earnings

The companies shown as (c) in note 22 represent a ‘closed group’ for the purposes of the Instrument, and as there are no other parties to the deed of cross guarantee that are controlled by Inghams Group Limited, they also represent the ‘extended closed group’.

Set out below is a condensed consolidated income statement, consolidated statement of comprehensive income and a summary of movements in consolidated retained earnings for the period ended 26 June 2021 of the closed group.

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2021 2020
$000 $000
CONSOLIDATED INCOME STATEMENT
Revenue from continuing operations
Revenue 2,668,800 2,555,800
Expenses
Expenses from ordinary activities (2,555,800) (2,499,700)
Profit before income tax 113,000 56,100
Income tax expense (29,700) (16,000)
Profit for the year 83,300 40,100
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Profit for the year 83,300 40,100
Total comprehensive income for the year 86,100 34,500
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

30 DEED OF CROSS GUARANTEE ( CONTINUED )

(b) Consolidated balance sheet

Set out below is a consolidated balance sheet of the closed group.

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2021 2020
$000 $000
Cash and cash equivalents 153,300 129,800
Trade and other receivables 222,700 202,600
Biological assets 121,800 120,700
Inventories 196,100 217,000
Assets classified as held for sale 3,700 12,300
Current tax receivable – 3,700
Total current assets 697,600 686,100
Property, plant and equipment 457,900 450,300
Equity accounted investments 2,100 1,900
Receivables – 300
Right‑of‑use assets 1,371,300 1,429,200
Deferred tax assets 7,700 –
Total non‑current assets 1,839,000 1,881,700
Total assets 2,536,600 2,567,800
Trade and other payables 396,100 402,300
Provisions 92,900 79,600
Derivative financial instruments 1,500 4,000
Related party payables 10,100 10,300
Lease liabilities 183,900 185,200
Current tax payable 27,800 –
Total current liabilities 712,300 681,400
Borrowings 398,300 448,900
Provisions 26,200 23,900
Derivative financial instruments 1,800 3,600
Deferred tax liabilities – 4,400
Lease liabilities 1,244,800 1,287,100
Total non‑current liabilities 1,671,100 1,767,900
Total liabilities 2,383,400 2,449,300
Net assets 153,200 118,500
Equity
Contributed equity (103,400) (104,500)
Other reserves (30,300) (24,900)
Retained earnings (19,500) 10,900
Total equity (153,200) (118,500)
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31 EVENTS AFTER THE REPORTING PERIOD

Subsequent to the year end a dividend of 9.0 cents per share has been declared on 20 August 2021 totalling $33.4M. The financial effect of this dividend has not been brought to account in these consolidated financial statements and will be recognised in subsequent financial reports.

124 INGHAM’S ANNUAL REPORT 2021

DIRECTORS’ DECLARATION

1. In the opinion of the directors:

2. (a) the consolidated financial statements and notes set out on pages 85 to 124 are in accordance with the Corporations Act 2001, including:

   • (i) giving a true and fair view of the Group’s financial position as at 26 June 2021 and of its performance for the financial year ended on that date, and

   • (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.

3. (b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2(a); and

4. (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.

5. There are reasonable grounds to believe the Company and the Group entities identified in note 30 will be able to meet any obligations or liabilities to which they are or may 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 / 285.

6. 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 26 June 2021.

7. The directors draw attention to note 2(a) to consolidated financial statements, which includes a statement of compliance with International Financial Reporting Standards.

This declaration is made in accordance with a resolution of the directors.

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Peter Bush Chairman Sydney

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Michael Ihlein Non‑Executive Director

20 August 2021

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INDEPENDENT AUDITOR’S REPORT

Independent Auditor’s Report

To the shareholders of Inghams Group Limited

Report on the audit of the Financial Report

Opinion

We have audited the Financial Report of The Financial Report comprises: Inghams Group Limited (the Company).

• Consolidated statement of financial position as at 26 In our opinion, the accompanying June 2021; Financial Report of the Company is in accordance with the Corporations Act • Consolidated income statement, Consolidated 2001 , including: statement of comprehensive income, Consolidated

• Consolidated income statement, Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended;

• giving a true and fair view of the Group's financial position as at 26 June 2021 and of its financial performance for the year ended on that date; and

• Notes including a summary of significant accounting policies; and

• Directors' Declaration.

• complying with Australian Accounting Standards and the Corporations Regulations 2001 .

• The Group consists of the Company and the entities it controlled at the year end or from time to time during the financial year.

• The Year is the 52 week period ended on 26 June 2021.

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 the Code.

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 106 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.

126 INGHAM’S ANNUAL REPORT 2021

INDEPENDENT AUDITOR’S REPORT CONTINUED

Key Audit Matters

• The Key Audit Matters we identified Key Audit Matters are those matters that, in our are: professional judgement, were of most significance in our • Accounting for rebates and trade audit of the Financial Report of the current period. allowances These matters were addressed in the context of our audit of

• • Accounting for AASB 16 Leases the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matter

Accounting for rebates and trade allowances – (sales revenue, which is net of trade allowances and rebates, amounts to $2,668.8million)

Accounting for rebates and trade allowances – (sales revenue, which is net of trade allowances and rebates, amounts to $2,668.8million)	Accounting for rebates and trade allowances – (sales revenue, which is net of trade allowances and rebates, amounts to $2,668.8million)
Refer to Notes 2(d) and 3 to the Financial Report
The key audit matter	How the matter was addressed in our audit
The Group’s policy is revenue is recognised at the fair value of the consideration received or receivable and is net of returns, trade allowances, rebates and amounts collected on behalf of third parties. The accounting for trade allowances and rebates is a key audit matter due to the: • Significance of trade allowances and rebates to the financial report; • Number of categories of customers including retail, quick service restaurants and foodservice, which attract different trade allowances and rebate terms. This requires our evaluation to be performed across these categories; • Variety of customer-specific contractual arrangements for trade allowances and rebates, increasing the audit effort to address these specific conditions; and • Differing settlement terms for customers which leads to complexity in checking the accruals at balance date across the portfolio. The rebate accrual at balance date is based on sales activity and relevant rebate and trade allowance rates/conditions of customers, for the time period since the last payment date to balance date.	Our procedures included: • Considering the appropriateness of the Group’s accounting policies regarding revenue recognition, trade allowances and rebates against the requirement of the Australian Accounting Standards; • Testing the Group’s key controls over management’s approval, monitoring, and calculation of trade allowances and rebates; • Checking a sample, by customer category, of rebates and trade allowances to signed customer contractual terms; • Comparing the amount of the trade allowances and rebates by customer category as a percentage of gross revenue to the prior year, adjusted for customer approved changes to specific trading and settlement terms; • Calculating an expected rebate accrual by customer based on specific customer trading and settlement terms and comparing this to the Group’s recognised balance date rebate accrual for a sample of significant customers by customer category; • Assessing, on a sample basis, the accuracy of prior year rebate accrual estimates to inform our evaluation of the Group’s current balance date accruals; • Comparing a sample of rebate claims or correspondence received since balance date to accruals recognised at year end, for evaluation of the accrual existence and quantum; and

107

OPTIMISING FOR THE FUTURE 127

INDEPENDENT AUDITOR’S REPORT CONTINUED

	• Assessingthe disclosures in the financial report using our understanding obtained from our testing and against the requirements of the accounting standard.
Accounting for AASB 16 Leases – (right of use assets, lease liabilities, interest and amortisation amount to $1,374.9 million and $1,432.3 million respectively)
Refer to Notes 2(n), 12 and 23 to the Financial Report
The key audit matter	How the matter was addressed in our audit
AASB 16 Leases (“AASB 16”) is complex with specific lease-features driving different accounting outcomes, increasing the need for interpretation and judgement. AASB 16 leases is a key audit matter due to the: • Significance of the right of use assets and lease liabilities to the financial report. • Number of leases the Group has, including the individual nature of the lease agreements used to estimate the lease liability and right-of-use asset. A focus for us was the accuracy of multiple and varied inputs which may drive different accounting outcomes, including key dates, fixed and variable rent payments, renewal options and incentives. • Migration of the lease accounting from the Group developed AASB 16 lease calculation models, to a software solution, increasing the risk of error from incomplete or inaccurate migration of data. The most significant areas of judgement we focussed on was in assessing the Group’s: • Renewal options contained within leases. Assessing the Group’s determination of whether it is reasonably certain renewal options will be exercised impacts the measurement of the lease, therefore is critical to the accuracy of the accounting. • Grower contractual arrangements and the features of the underlying grower contracts against the definition of a lease under the accounting standards.	Our procedures included: • Considering the appropriateness of the Group’s accounting policies against the requirements of the accounting standard and our understanding of the business and industry practice. • Obtaining an understanding of the Group’s processes used to calculate the lease liability, right-of-use asset, depreciation, and interest expense. • Reading a sample of contracts, including the grower contracts. We compared the relevant features of the underlying contracts to the definition of a lease in the accounting standards to assess the accounting treatment recognised by the Group. We compared the Group’s inputs in the AASB 16 lease calculation models, such as, key dates, fixed and variable rent payments, renewal options and incentives, for consistency to the relevant terms of a sample of underlying signed lease agreements. • Evaluating the Group’s assessment of lease renewal options based on the Group’s strategic direction and inquiries with operational management. • Independently developing a series of point estimates for the incremental borrowing rates applied to the leases using the corporate yield curve, adjusted by risk factors specific to the Group, the industry it operates in, and each lease term. We compared it to the incremental borrowing rates used by the Group. • Checking the leases in the Group lease models for inclusion in the Group’s software solution. For a sample of leases from the Group lease models, comparing the lease inputs, right of use assets and lease liability to the software solution. • Assessing the disclosures in the financial report using our understanding obtained from our testing and against the requirements of the accounting standard.

108

128 INGHAM’S ANNUAL REPORT 2021

INDEPENDENT AUDITOR’S REPORT CONTINUED

• Incremental borrowing rates determined by the Group. These are meant to reflect the Group’s entity specific credit risk and vary based on each lease term. We involved our senior audit team members in assessing these areas.

Other Information Other Information is financial and non-financial information in Inghams Group Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor's Report. The Directors are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: • preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; • implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and • assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objective is: • to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and • to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. 109

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129

INDEPENDENT AUDITOR’S REPORT CONTINUED

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/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report.

Report on the Remuneration Report

Opinion

Directors’ responsibilities

In our opinion, the Remuneration The Directors of the Company are responsible for the Report of Inghams Group Limited for preparation and presentation of the Remuneration Report in the year ended 26 June 2021, accordance with Section 300A of the Corporations Act 2001 . complies with Section 300A of the Our responsibilities Corporations Act 2001 .

We have audited the Remuneration Report included in pages 58 to 83 of the Directors’ report for the year ended 26 June 2021.

Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards .

KPMG

Julie Cleary

Partner

Sydney

20 August 2021

110

130 INGHAM’S ANNUAL REPORT 2021

SHAREHOLDER INFORMATION

Shareholder Information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below:

TWENTY LARGEST REGISTERED SHAREHOLDERS (AS AT 20 AUGUST 2021)

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% ISSUED
RANK NAME 20‑AUG‑21 CAPITAL
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1	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	123,792,071	33.3%
2	J P MORGAN NOMINEES AUSTRALIA PTY LIMITED	77,803,568	20.9%
3	CITICORP NOMINEES PTY LIMITED	42,233,974	11.4%
4	NATIONAL NOMINEES LIMITED	16,055,823	4.3%
5	BNP PARIBAS NOMS PTY LTD	9,173,915	2.5%
6	BNP PARIBAS NOMINEES PTY LTD	8,478,819	2.3%
7	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	3,677,794	1.0%
8	WOODROSS NOMINEES PTY LTD	2,876,965	0.8%
9	DYNAMIC SUPPLIES INVESTMENTS PTY LTD	1,500,000	0.4%
9	MASFEN SECURITIES LIMITED	1,500,000	0.4%
11	AMP LIFE LIMITED	1,406,791	0.4%
12	BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD	1,195,775	0.3%
13	BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM	938,836	0.3%
14	CITICORP NOMINEES PTY LIMITED	934,294	0.3%
15	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2	872,221	0.2%
16	NETWEALTH INVESTMENTS LIMITED	639,098	0.2%
17	INVIA CUSTODIAN PTY LIMITED	626,000	0.2%
18	MS ROBYN LEE HIND + MR ROBERT EDWARD HIND + MRS RUTH ETHEL HIND	605,552	0.2%
19	BNP PARIBAS NOMINEES PTY LTD	421,157	0.1%
20	PACIFIC CUSTODIANS PTY LIMITED	395,756	0.1%

DISTRIBUTION OF HOLDINGS (AS AT 20 AUGUST 2021)

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NUMBER OF NUMBER OF % OF ISSUED
RANGE HOLDERS SHARES CAPITAL
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100,001 and Over	71	303,791,227	81.7
10,001 to 100,000	1,576	36,324,847	9.8
5,001 to 10,000	2,113	15,815,256	4.3
1,001 to 5,000	5,191	14,007,903	3.8
1 to 1,000	3,191	1,740,368	0.5
Total	12,142	371,679,601	100.0

There are 135 shareholders holding less than a marketable parcel of shares (as at 20 August 2021).

OPTIMISING FOR THE FUTURE 131

SHAREHOLDER INFORMATION CONTINUED

SUBSTANTIAL SHAREHOLDERS (AS DISCLOSED IN SUBSTANTIAL HOLDER NOTICES GIVEN TO THE COMPANY AS AT 20 AUGUST 2021)

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NUMBER OF % OF ISSUED
SHAREHOLDER SHARES CAPITAL
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AustralianSuper	36,364,469	9.8
Mondrian Investment Partners Ltd.	28,838,996	7.8
Franklin Resources, Inc.	26,584,733	7.2
Yarra Capital Management	22,228,340	6.0
Aware Super	19,914,428	5.4

ESCROW SHARES

As at 20 August 2021, the shares subject to escrow arrangements are:

NUMBER	OF SHARES ESCROW END DATE EARLY RELEASE DATE AND CONDITIONS (IF APPLICABLE)
108,016	September 2021 Nil
118,195	December 2022 Nil

UNQUOTED SECURITIES

As at 20 August 2021, the total number of rights outstanding equalled 3,970,913 remained over unissued shares of Inghams Group Limited, as described in the Directors’ Report on page 44. All unissued shares which are the subject of these performance rights are ordinary shares in the Company or will be converted into ordinary shares immediately after exercise of the relevant performance right.

SHARES AND VOTING RIGHTS

All 371,679,601 issued shares in the Company are ordinary shares, held by 12,142 shareholders. Voting rights for ordinary shares are:

• on a show of hands, one vote for each shareholder; and

• on a poll, one vote for each fully paid ordinary share.

There is no current on‑market buy‑back.

132 INGHAM’S ANNUAL REPORT 2021

CoRpoRAte DIReCtoRY

DIReCtoRS

Peter Bush Rob Gordon Michael Ihlein Jackie McArthur Helen Nash Linda Bardo Nicholls AO Andrew Reeves

CoMpAnY SeCRetARY

David Matthews

ReGISteReD oFFICe

Level 4, 1 Julius Avenue North Ryde NSW 2113 Australia

Tel: 02 9826 4444 Website: www.inghams.com.au

AuDItoRS

KPMG Level 38, Tower Three, International Towers Sydney 300 Barangaroo Avenue Sydney NSW 2000

SHARe ReGIStRY

Computershare Investor Services Pty Ltd GPO Box 2975 Melbourne VIC 3001

Tel: 1300 850 505 +61 3 9415 4000 Email: Web.Queries@computershare.com.au Website: www.computershare.com.au

AuStRAlIAn SeCuRItIeS eXCHAnGe

ASX code: ING

www.colliercreative.com.au #INH0025

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