G36
Annual Report 2018
Driving prosperity by transforming agriculture
About us 02 AgResearch tohu 04 Chair and Chief Executive’s review 08 Celebrating our people 12 Our story 18 Our Science Plan 21 Our expertise 22 Our research 24 Our people 42 Internal research awards 46 Our highlights 48 Our international connections 50 Outreach 52 Collaboration with other Crown Research Institutes 54 Key performance indicators 58 Performance indicators 60 Financial performance indicators 64 Consolidated financial statements 65 Statement of accounting policies 69 Notes to financial statements 76 Auditor’s report 98 Statutory reporting 100 Corporate governance 104 Directory 106 About us
Agriculture is one of New Zealand’s largest export income earners, and AgResearch plays a key role in delivering new knowledge and technologies to support the sector.
Facilitating the smallest rural project to the Land use and management are studied in largest overseas research project, we produce relation to environmental impacts and climate science and technology projects for the benefit change. Improving dairy, beef, lamb and deer of the agricultural sector and New Zealand. production systems is addressed by innovative research on soil and water management, while We collaborate with research providers and reducing negative impacts on the quality of soil, end-users around the world, and together we water, atmosphere and ecosystems. develop biosecurity, land, soil and freshwater management systems, methods of climate Our biocontrol and biosecurity work is on the change adaption and mitigation, and sustainable management of pests and weeds agricultural by-products for the textile, food for the benefit of New Zealand’s pastoral sector and beverages sector. and associated environments.
Our understanding of plant and endophyte Research includes the development of new technologies, such as metabolomics and biopesticides and technologies, and we play a epigenetics, leads the supply chain and role in making sure our national borders are supports the development of a new generation well protected.
About us of livestock and plant-derived products.
02 03 About us 04 AgResearch tohu tohu AgResearch left some openspaces.left These mā(white, the future. Within thedesign Piri Cowie has ancestors asaway ofmoving forward into past andlearningfromthework ofour This designisareminderoflookingtoour Ngāi Tahu whānuirockart. and He Tangata, ahumanfigureinspiredby of ourinterconnectionwiththeenvironment; symbolic of Te Ao ourEarthandspeaking components: Te Ao, anink-painted circle this contemporarytohuismadeupoftwo Created byNgāi Tahu designerPiriCowie, our purposeusingotherchannels. depiction ofthismessage,toenableusspeak This yearwecommissionedthecreationofavisual our corporatewhakataukī,ātamātai,mātaiwhetū. AgResearch’s aspirationsarehighlightedthrough
never beseparated. The twotohuof Te Ao andHe Tangata must of theworldwitharmsextending outwards. In thisdesignthefigurealways sitson top seeking newmātauranga–knowledge. of reachingout,pushingboundariesand extending outofthecircle. This tohuspeaks circle isimportantasthearmsandlegsare The placementofthefigurewithin (spirit) ormauri(energy)ofaperson. art drawings andmaybereadasthewairua seenwithinrockclear areas)areoften
Being in pursuit of far horizons while firmly grounded firmly while horizons offar inpursuit Being Āta mātai, mātai whetū mātai mātai, Āta 05 AgResearch tohu 06 AgResearch tohu designs thatrepresentthediversityof AgResearch. Our coretohuissupportedbyadditional (land) andpeople. here referencesthecoloursofwhenua whānui rockart. The colourpaletteoffered These figuresareinspiredbyourNgāi Tahu and wellbeing. It issymbolic ofkaitiakitanga(guardianship) innovation andlegacyof ourancestors. us. We arepartofthecontinuumcreativity, many ancestorsthathave beenherebefore The tohuNgā Tāngata acknowledges the Ngā Tāngata and Te Waipounamu. many moutere (islands)within Aotearoa, The designreferencesthewhenua (land)and symbolise aleader, strongoratororteacher. usedtorepresents mythology andisoften taniko pattern Niho Taniwha, apatternthat This tohuisinspiredbythetukutukuand Niho Taniwha
colours ofouroceans. The colourpaletteofferedherereferencesthe people togetherandseekingnewhorizons. It isatohuthatspeaks ofjourneying, bringing who voyaged acrossvast oceans. and strategicplanningofourMāoriancestors It isanacknowledgement tothefearlessness This tohu Aramoana speaks ofoceancurrents. Aramoana importance andsignificance of water. This tohuissymbolic ofthehigh Turuturu – raindrops. tukutuku designsofRoimata Toroa and This tohu Turuturu isinspiredbythe Turuturu
07 AgResearch tohu Chair and Chief Executive’s review
AgResearch continues to play a vital role in driving national and regional prosperity by transforming agriculture in New Zealand. Our scientists are leaders in innovative science, research and thought leadership across our work programmes of forage science, animal science, environmental and farming systems science, and food and bio-based products.
Our role as the lead Crown Research Institute Change Committee as it grapples with the future (CRI) within the pastoral agriculture sector sees make-up of the Emissions Trading Scheme and us working closely with our sector partners to how agriculture fits into that picture. deliver innovation into their operations and with government officials across a range of AgResearch had another year of significant interconnected activities that link to core science advancements guided by our new policy initiatives. Science Plan (see page 21), our Science Advisory Panel and increasingly underpinned by our In the latter category are the Ministry of national and international collaborations. Business, Innovation and Employment (MBIE) review of national farm systems We developed our new Science Plan in and environment investment, the Biological consultation with our stakeholders to ensure Emissions Reference Group, the Prime our research is focused on delivering the Minister’s Chief Science Advisor’s report on thought-leadership and innovation to drive Overseer and Greenhouse Gas accounting, prosperity by transforming agriculture. It reflects and the Productivity Commission. Also, the a whole-of-value-chain, customer-centred work we do in the area of climate change approach that acknowledges the challenges and mitigation and adaptation fed into the opportunities across global, national, regional
Chair and Chief Executive’s review Chair and Chief Executive’s discussions held by the Interim Climate and local scales.
08 A highlight of our work this year was the improve farmer decisions around farm nutrient success of the AgResearch-led global scientific use and exploring how digital technologies can project on rumen microbiomes which resulted deliver targeted advice to end-users (see page 37). in the generation of a reference catalogue of over 500 rumen microbial genomes. Prior to To further improve the flow of science (ours this, just 15 rumen microbial genomes were and other’s) into useful tools, this year we available to the scientific community. The project acquired full ownership in Farmax, whose represents a major scientific advancement software is used by farmers and their advisors and means that the data can be translated into to analyse, monitor and review farm operations useful interventions, including identifying targets to determine the production and economic for vaccines and inhibitors to reduce livestock outcomes of various managerial options. methane emissions and improve productivity. The data has been made publicly available and Our commitment to being customer centric will be a globally significant resource. saw us contribute to the launch of Ballance’s Mitigator, a support tool underpinned by our At the other end of our research breadth, science to aid landowners in their operational we published preliminary findings of a milk planning in order to farm more sustainably composition study that identifies potential without losing focus on productivity and benefits for young women with lactose profits. Similarly, our relationship and mahi intolerance. The study was the first in the with Te Tumu Paeroa continues to develop world to compare people’s immediate digestive around an integrated kaupapa for Te Tumu response to conventional and A2 protein milks. Paeroa’s Poutama Framework and AgResearch’s We have also progressed our investment toward AgInform technology. This collaborative model creating new platforms to leverage ‘Digital will help decision-makers of Māori free-hold Agriculture’ for the betterment of farming land to identify pathways for taking back direct systems and surrounding environments. and active management of their whenua within These include real-time animal tracking to ecological boundaries and cultural values.
Jeff Grant — Chair, AgResearch Chair and Chief Executive’s review Chair and Chief Executive’s
09 10 Chair and Chief Executive’s review cash reserves of $46m available to our fund of $46m reserves cash financialOur position remains with strong of $1m. tax loss an operating after reported year’s funding changes have meant that has we previous the that from challenges resulted financialresult circumstances, the in the control this While measures. is apleasing cost and prudent growth revenue science improvedthis commercial year been has Contributing to our financialbudget. success financialAgResearch ends the year of ahead campus to location. anew haveroles relocated also year, close of the continues. the At over 70 across all our four people campuses with work roll programmes the on, construction these As University. Lincoln with build facility major the for enabling early the works completed in late 2019,and completed will be have we and University, is HQ Massey at advanced Food well on our Facility Science Food with Construction programmes. in our major construction This year also has significant seen advancements Tom Richardson—ChiefExecutive, AgResearch Chair, AgResearch Jeff Grant management are suited well to succeed. Board in,our and to science both operate to environment build for anew seeks it as are AgResearch for challenges some there While team ongoing their for commitment. Boardthanked and the senior management Board across arange since of roles 2011, and TaniaDirector the Simpson, served who of contribution retiring the acknowledged Zealand. of New also He agriculture sector solutions innovation andseek new the for range of disciplines science that continue to over awide staff of the and dedication effort tremendous the noted leaving, Jeff Before will deliver. navigatesit changes Brexit the as in London ZealandNew industry meat Juneat 30 2018 the akey for with role our board as Grant departed Chairman Jeff isend $249m. position at year- plans.investment equity Our campus programme redevelopment and other Chief Executive, AgResearch Chief Tom Richardson We developed our new Science Plan in consultation with our stakeholders to ensure our research is focused on delivering the thought-leadership and innovation to drive prosperity by transforming agriculture.
Aramoana 12 Celebrating our people People successes successes People people our Celebrating team at Grasslands was the recipient of two team at Grasslands of two recipient the was Singh Plant-fungalJaspreet the from Interactions Jaspreet Singh informs and underpins policy both within within both informs and underpins policy (especiallyfreshwater phosphorus). His work management of contaminant loss land from to and in relation impact to quantification, the leadership international and national exemplary publications) and well-cited thanmore 400 hishighlights ground-breaking research (and nomination Royal summary The Society’s scholarship. and research in that international recognises true distinction Zealand, of New an honour Royalthe Society aFellow as of at Lincoln University, elected was Water National Challenge, and Science Professor and Land Our the for Scientist AgResearch, Chief Principal at Rich McDowell, Scientist Rich McDowell
Award at the Plant Science Central conference.Award Plant Central at Science the also Bill was Kain the Jaspreet awarded Science of Concordia& Functional Genomics University. Palindromic Repeat) Structural for Centre at the CRISPR (Clustered Interspaced Regularly Short called novel approach modification to genetic a months studying MBIE, two spent Jaspreet through run award annual an Award, Study II Elizabeth Technician’s Queen winner of the As in and learn Canada. to study opportunity significant awards, providing him the with Management –and overseas. Freshwater on Statement National Policy Regional Council Zealand’s and limits New guidelines, ZealandNew –through industry Japan in March in aweek-long to take part Proteins and Biomaterials team, to travelled the Evelyne with aSenior Maes, Scientist Evelyne Maes of eachindividual. are theresultsofcombinedeffort The achievementsofanorganisation appointed toappointed MBIE’s Board, is which Science was Wedderburn Liz ResearchAssistant Director Liz Wedderburn
Conference inConference 2018. Proteomics Award Lorne at the Career Early alsoEvelyne International was the awarded laureates distinguished and other scientists. Nobel with discussions interdisciplinary in countries/areasfrom to region in engage the and young selected researchers students doctoral for give opportunities HOPE meetings region. and Africa Asia-Pacific infuture the and optimism and science technology a bright for signifies promise young the for scientists held “HOPE” title Promotion The of the for Science. organised JapanHOPE by the meeting Society diverse teams. proven record in track in working and with and and processes her research methods of knowledge in her science, achievements ranging issues into account, significant her to ability take wide- her perspective, strategic is appointment Her agreat recognition of her Science Challenges. National funding This the for includes activities. and related research, and science technology decisions to funding appropriated allocate for responsible making for independent 13 Celebrating our people 14 Celebrating our people appointed to Interimappointed the Climate Change Clarkwas Harry Research Director Centre Zealand Greenhouse New Gas Agricultural Harry Clarkand Andy Reisinger Sciences) Royal for the Society. and President (Biological Life Vice as elected GroupForage Tony Science Leader Conner was Tony Conner Ngā Tāngata CCC to through follow on. recommendations to on passed will the be 2035. Interim Committee’s The advice and by generation electricity renewable 100% ICCCThe will also consider transition the to in late 2019. Act, Zerothe Carbon under is established Commission full the until agriculture into Emissions the Trading Scheme ICCC ofrole the of to will investigate be entry Climate Change Commission (CCC) and amajor permanent more ofto establishment the the precursor ICCC the as The established been has Reisinger to ICCC appointed the Secretariat. Andy (ICCC) Director Committee and Deputy
merit of livestock, particularly sheep, and in particularly of livestock, merit many initiatives at improving aimed genetic the John amajor McEwan force behind been has John McEwan –ScienceNewZealand IndividualLifetime Achievement Award and provision that underpin stocks of services and natural value the capital quantify describe, to aconcise framework and elegant developed Dominati scholar, Estelle post-doctoral and Rutherford an AgResearch PhD student As Estelle Dominati–ScienceNewZealand EarlyCareer Researcher Award promoting aims the society. of the unselfish and her to dedication and software, contributions to environmental modelling insightful and rigorous outstanding, her (IEMSS). Society award recognised The Software and Modelling Environmental International the Biennial the by with Medal team, presented was Val Snow, our Modelling with aSenior Scientist Val Snow in the field).in the close to average than more paper ten times the (i.e. of cited 10.23 impact citation field-weighted and a numbers by citation of papers percentile 2017,by September 99th in it the puts which 4.17)] in citations Scopus 200 had received Economics 1858-1868 69: Factor (Impact For Dominati al. (2010) et example, [Ecological journalsscience leading and is as edge. regarded published in international research Her been has research. current her resource management process is of focus the to create natural aculturally based framework services to natural ecosystem the capital linking environment. The of Māori Mātauranga Zealand’sNew and natural industries primary Production (NZSAP).Production of Animal Zealand New the Society with Membership Life John also an Honorary received aquaculture species. of clover white and avariety usefor in ryegrass, and genomic evaluationgenotyping technology anew to develop Currently, of aproject is he part publications. 280 internationally and published has than more his nationally both amongst and colleagues international is highly consortia, respected in several person globally. alead been has He Zealand, in New Australia species and other
15 Celebrating our people 16 Celebrating our people Team awards people our Celebrating has few adverse effects on animal on health. effects adverse few has but bythan standard endophytes those delivered and plant advantages persistence protection insect better with AR37 provides ryegrass Awards. National Teamthe Zealand New Award Science at the won success they Their recognised when was AR37 of the endophyte. development in the teams science involved across were different from A significant number of our people AR37 team–ScienceNewZealand Team Award involved trial across farms Zealand. New and impacts environmental reducing while profits P21 farm The at lifting aimed programme was stage. Zealand in New world andscientists the on awards success the These of celebrate Waikato in late 2017. Kudos Hamiltonthe Awards Excellence Science Award Science at the Agricultural the awarded AgResearch/DairyNZThe Pastoral21 team was AgResearch/DairyNZ Pastoral21 team Horticultural Science. Horticultural Zealand New by the and Institute of Agricultural Award in Agriculture/Horticulture Achievement 2017 the awarded Wrightson Significant PGG Wilson)Gerard, Eden Tina and Derrick was Colin Ferguson,Barratt, Pip Diane Barton, Goldson, Craig Phillips, Mark McNeill, Barbara team (comprising Hardwick, Stephen Scott AgResearch Clover Root Weevil The Biocontrol Clover Root Weevil Talent is the multiplier. The more energy and attention you invest in it, the greater the yield.
Niho Taniwha Our story
There has been no time in recent decades in which the role of research will prove more critical than now.
AgResearch must use its considerable scientific and agribusinesses and provides the capacity capability to realise opportunities and counter to understand complex, interconnected the challenges that threaten New Zealand’s agricultural issues. economy and regional prosperity. Our food research and development creates the Our two focus areas of research are in creating knowledge and tools to develop high-value foods smart, sustainable farming systems, and the and ingredients from pastoral-based industries, most sought-after food and bio products. tailored to market and consumer preferences for These are intrinsically linked – without the right quality, human health and wellbeing. systems we cannot help create quality agri-based products, and we know that the consumer also The evolution of consumers’ preference and new wants to be sure that their choice of product technologies are creating new opportunities for comes without an environmental cost. New Zealand. We are seeing leading businesses investing much more aggressively in areas like Our capabilities are vast, from seeds to pest animal welfare, novel farm systems, technologies control, high-value foods and farming systems. that greatly enhance environmental sustainability Now, more than ever, systems thinking is and new food products. an integral part of our research and development approach. At AgResearch, we have evolved our focus to ensure our research is supporting and enabling Our agricultural systems research focuses on those preferences, and therefore the economic
Our story creating more profitable and sustainable farms success of New Zealand’s exporters.
18 most sustainable sustainable most farming systems farming smartest and and smartest by transforming agriculture Partner to the innovationPartner identify that is and use needed, the collective expertise tocollective expertise create value for New Zealand. Driving prosperity prosperity Driving Increasing the value of New Zealand’s exports, while enhancing our environment and regional regional and environment our enhancing while Our Value Proposition centred sciencedrives prosperity by optimising land use. Our consumer– the world’s... Impact
bio products bio and food after most sought- most
19 Our story 20 Our Science Plan Our Science Plan
Our Science Plan has been overhauled this year with an aim of breaking down the siloed approach within research, to providing an outcomes and objectives-focused framework. This exists to help prioritise and integrate all science undertaken by AgResearch.
A I Optimise diverse production systems within Enable the adoption landscapes to deliver of new technologies sustainable economic, and systems social, cultural and environmental outcomes
H B Support resilient Adapt to and mitigate against communities the effects of climate change while enhancing biosecurity
Protected, Agile, resilient enhanced and adaptive social and sustained and biological natural resources systems C G Profitable Added-value foods and sustainable and bio-based Enable vibrant Māori Maximise value from land-based products that meet agribusiness through whole of resource, from enterprises consumer needs unlocking the unique production to consumption characteristics, mātauranga E a m g and values of Māori be n d ita that confer new de k d itia opportunities wit ka hin principles of F D Discover and validate food and bio-based product Develop forages attributes, particularly in the and animals with the areas of consumer health E attributes that meet the and wellbeing effects, that requirements of diverse underpin new premium Create safe food and production systems products bio-based products with and value webs optimised nutritional and sensory attributes, while capturing value through provenance aligned with Our Science Plan consumer centric value webs
21 22 Our expertise Our expertise Our of ourresearchcanbelinked. and ourfocusonintegratedsystemsmeansallaspects Our capabilityspanstheagriculturalvaluechain, smartest and most sustainable farming systems • • • • • • • Water quality Smarter farming systems farming Smarter change Climate Kaitiakitanga farm systems change practice and Adoption agriculture Digital science Environmental and and Environment Farm Systems • • • • Endophyte technology Endophyte Plant security and Biocontrol Soil Forage Science Forage biology breeding • • • • • • and adaptation and mitigation gas Greenhouse Reproduction behaviour and welfare Animal Animal Animal Genomics AnimalScience nutrition health
most sought-after and food bio products • • • • • Food science Food wellbeing Food nutrition and human attributes Validation product of Material science Material science Textiles based Products based Food and Bio- 23 Our expertise Our research Across the chain from soil to palate
The following stories highlight the impact our consumer-centred science has on the world’s smartest and most sustainable farming systems.
smartest and Our consumer– most sustainable centred science drives farming systems the world’s... Our research
24 Nematodes –hardy and harmful were then taken to if at any regular see then intervals were of 36 months.Samples temperature aperiod for separately in cupboards stored was at room and an anativefrom organic forest orchard collaboration, saw soil collected Biosecurity Border Better via study,Our the funded rate. and survival growth reducingtheir plants, that attack species plant-parasiticthe (PPNs), nematodes are ones, harmful The impacts. and detrimental hardy and have can beneficial both extremely small organisms. be worm-like can very They are crops and Nematodes pasture. important cross and potentially of yields reduce borders they before nematodes, creatures, called these to discussions the to detect best how about findings of this also The AgResearch study add countries. passenger between travel and trade by posed threats insights into biosecurity the conditions, giving in new dry years stored three at for least to ability survive the shown have plants creaturesTiny in soil that attack
unwanted incursions from beyond the border.unwanted incursions the beyond from of PPNs prevent and, therefore, of detection bioassaybased –to enhance probability the around –based amolecular-nematodes plant-parasitic for test of ageneric development the for pertinent may be it biosecurity, then of In context plant. the asuitable host with until paired continuewhich undetected to be may contain sterile, unwanted nematodes, looks reinforces it riskas it the that soil, when even this find, around result world, is the an important For plant. quarantinea suitable host officials up end near if they will survive heat, extreme sun from or usedor machinery, and protected footwear sea on freight, in soil, is which carried This conditions, means right that PPNs given the at 13 toable offspring produce months. 36 and months, also after even of ryegrass roots to able were successfully invadenematodes the that lesion findings suggest The plant hosts. to able were infect they could, whether if they soil the and, from recovered could be nematodes I A B 25 Our research 26 Our research endophytes occur naturally in some grasses, naturally occur in grasses, some endophytes improving Epichloë farms. on animal growth and consequently of a range of pests, impact the It proved akey to success inryegrass. reducing use for in in 2006 and released scientists AR37, discovered was which by AgResearch endophyte is original the on based work The Zealand. of New benefit options crops in the for those other endophyte Epichloë the with working from gained and understanding substantial the knowledge to extend opportunity an of economic significance. presents That and diseases in manycontrol crops of pests options as the for are gaining importance say researchers Our that microbial endophytes wheat. such as crops, arange for of important have benefits that can species programme to endophyte other learning the ofapply this successful long-term is to Nowdollars. researchers there for scope Zealandsave New billions the economy of to by AgResearch scientists harnessed been Fungi that live have within grasses already Advancing our work with endophytes endophytes in grasses to deliver new in to grasses deliver new endophytes
the New Zealand New the economy. year to every $200m contribute about strains alone endophyte New those pests. to control and costs lossespasture to pests animal for costs and reduced health, reduced productivity, farm increased include These billions inundoubtedly the of dollars over time. are Zealand. in benefits of New pastures The components are critical now that they benefit strains ofcommercialised such endophyte in and this work Our area identified has health. livestock also while of pastures, improving productivity strains improve that can the endophyte selecting 35 on last over the been years has in this leader area focus world of research. The like scientists those at AgResearch, a attracted that have It is opportunities these effects. health minimising while grasses, the on any negative feeding from pests insect deterring such as benefits of offer to grass introduced varieties endophytes selected to harmful livestock, be can of endophyte Zealand types some While farms. New on livestock those usedsuch to as feed
I E A D at the economic impact of some of the more more of of some the economic impact at the $1.658bthan the looked study Our estimate. is likely higher much to sector be agricultural to the weeds cost of the limitations, true the not considered. always Given all of these were usecontrol, the such of as herbicides, of substantial weed costs The production. loss the of on largely has been focus The research into impacts. their of subject the –that have weeds been forestry 187 and land arable some weeds weeds, pasture –10 species of the weed few coversonly the In of estimate $1.658b end. addition, the lower so this at may estimate the be still guesswork, contained or outdated sometimes were numbers and the approaches, used differing previously done costs research weed on The acostestimate of $1.658b ayear. all material existing and now can reviewed we Agribusiness and Economics Research Unit, University’s Lincoln from economists and scientists Scion with In partnership suggest. than would previous research is economy agricultural likely higher far to be to Zealand’s cost of New weeds true The againstThe fight weeds ahead of the game. ofahead the of research at keeping aimed us benefits the and in quantifying weeds, to ways tackle effective to cost- developing is important costs these land. about Knowing more productive on costs to comes it economic their information when of ashortage been always has and there world, invasion in the plant by introduced species of levels Zealand highest New of the one has years. 20 next towere spread across entire range over the its $592m year milk in per lost solids if revenue it industry dairy cost the would alone this weed indicates that pastures in dairy weed Buttercup This dynamic approach to Giant applied the products. agricultural and changes in consumer for extent prices possible of spread, rates maximum geographic range Zealand, in New taking account of that have realisedweeds not yet potential their of approach potential estimating for costs the Californian We thistle. adynamic also developed and grass bristle yellow broom, gorse, such as species weed andwidespread destructive I A D 27 Our research 28 Our research greenhouse gas, nitrous gas, greenhouse will oxide, occur. nitrate leaching emissions and lower of another and less consequently ryegrass, the on feeding animals by environment the into excreted nitrogen less will be Modelling also predicts emissions) gas greenhouse livestock. from single largest (the contributor to Zealand’s New In up produces to addition, it 23% methane less and resistant more to to be drought. growth animal better for to able energy more store be to than conventional faster ryegrass, to 50% inshown AgResearch’s to laboratories grow up been has (HME) ryegrass energy metabolisable high modified genetically the partners, industry and Government funding the from With changer agriculture. for that could grass prove generation agame in AgResearch’s of anew- development this year reached was milestone important An using GM technology options feed new Exploring
plants compete with each other. each with compete plants situation in apasture-like where characteristics to growth assess the opportunity first the be this will spaced field, in out the plants and as in glasshouses studied inpreviously pots been has growth the While rates. growth increased to markers that lead and the plant growth trial full will photosynthesis, measure the The Zealand.New in had it greenhouses in as the acting However, transplanted the did we see ryegrass findings have merit. its limited statistical months, two only trial lasted preliminary the As year totrial last confirm conditions suitable. were asuccessful growing preliminary This followed tested. field organisms modified be can genetically where United States, of the mid-west inprogressed the now has HME of the ryegrass Development
G I A D B C saw lower emissions compared with the ryegrass emissionssaw lower ryegrass compared the with also Lucerne compared perennial ryegrass. with 39–74%were plantainplanted, was where less in autumn and winter, nitrous emissions oxide A significant that finding was this from study resulting human from influence. major contributor emissions to gas greenhouse nitrous emissions oxide and globally are a by animals, grazing main are the source of soils, urine deposited Agricultural and the in Waikato. farm at adairy seasons plantain –over and different lucerne white clover, of – forage perennial ryegrass, types nitrous soilsgas, from oxide, containing different compare emissions greenhouse potent of the Research this Centre, to out research set Zealand Greenhouse New Gas Agricultural have discovered. funding the from With emissions, gas greenhouse our scientists afarm’s could lower help pastures in grazed Using like an plantain alternative plant type Feed options to mitigate climate change climate change mitigate to options Feed options open. They provide strong scientific provide scientific strong They options open. Zealand’slike to New keep this are important crops, trials modified of genetically release Zealand New approvedWhile not has yet the trials. feeding those years will our us help application for with two approvals. next over information get the we The regulatory will we need which for years, in two Animal trials feeding are to planned take place four weeks. to three back every plants bygrazing cutting summer and autumn, and will we simulate is consistent growth if across increased the will allow us trial timeframe toThe determine
different seasons. different conditions across by different the is impacted emissions the which and this how are reduced, process to by the examine work to further do way of reducingemissions. However, need we one couldplantain be pastures into grazed thisWhat research tells us is that incorporating nitrousthe emissions. oxide inhibitorsnitrification into soil the that reduce biological may that plantainthem be releases may involved; be of one factors other So tested. to applied clover)white all was plant of types the and (from animalssame ryegrass urine type fed animals’ urine. However, the in this study latest in the amount of the nitrogenreduce excreted havePrevious studies plantain shown can further. explored to be thatsomething needs is which ryegrass, than higher the actually were found emissions plantain the and lucerne from plantain.than In the for shown summer, we in winter and autumn, smaller but reductions gas emissions. gas and greenhouse to manage nitrogen run-off providing while farmers for atool hectare, per $900 as much by as revenues farm could boost tomodelling date HME showing the ryegrass Future significant, could with be advantages arewe approaching ryegrass. the this with work minimising and managing is risks –which how caution, with to proceed need the about talked potential offer”. on advantages the Iton also unwise be “it would to turn our backs stated RoyalThe Commission Modification Genetic on makers later can draw on. risks or that policy- any on evidence benefits A
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The following stories highlight the impact our consumer-centred science has on the world’s most sought-after food and bio products.
Our consumer– most sought- centred science drives after food and the world’s... bio products Our research
32 just meat just than more – options carcass Whole industry – which is a critical ability in this ability is –which time of acritical industry team, and innovative their for thought-leadership within this capability programme the highlights This wide-ranging products. food to authenticate non-invasive techniques and new and spoilers, key for pathogens systems detection spectral farms, dairy on of STECs and vectors reservoirs critical for points identification new created has chain, in this our work programme production of the end other the At cultural preferences. arange of with working when industry the for around spoilage and context provided levels, knowledge research new Our provided has sanitisers used in aprocessing plant. chain, of levels microbial and the resistance to contamination value along the that exist toprior slaughter, sources the of microbial way in animals the specifically are stunned of animal welfare, toable aspects touch on team means this programme been has AgResearch within the of capability breadth The carcass. awhole from uses andwider benefits enabling to explore our funded, scientists been In this programme arange of research has their preferences. to that are tailored products meat high-quality growing and desire their Asian safe, for markets ever- take that can of advantage the technologies and knowledge new develop if we opportunity to placed realiseWe this better will be Zealand New value the farmer. for added get to opportunity give the platform dairy the from that comes beef amount of commodity large and meat the supply of high-quality consistent a maintaining of challenges the Also, and authentication. traceability product on focus and increased production, change food on of climate effects safety, the and food shelf-life microbial impact loading and product practices including challenges, future on-farm how the This programme will continue to address value to chain market. farm from whole at the to look need we Zealand exports, meat New for and opportunities drivers at the looking consumption.raised before and treated, When was user demands now to ‘food’ their how know end- customer-centric the where production, G F E
33 Our research 34 Our research Fibres in our waterways waterways our Fibres in to the marine environment than synthetic fibres fibres to marine environment the than synthetic in risk sea less water, far presents and therefore greater atprotein rate a far down –breaks fibre anatural –being wool availabledata suggests say limited the volumes scientists Our increase. potentially creating issuesseafood, health as marine up lifeby and the end in can our smaller ocean, ingested the microfibres be can In often. less that are cleaned products other and bedding like carpets, interior textiles from isMore evidence also microfibres for required into drain, the and ultimately to ocean outfalls. water the and come travel loose can with fibres materials tiny in the washing machines, where clothing from and other quantities –particularly to 5mm in size) oceans are entering the in large water.the Studies indicate that microfibres (up materials in break down different how studying to consumers AgResearch keep is help informed marine on life and seafood, oceans and effects of our pollution about grows global concern As research is important for this for discussion.research is important environment, and the on having good-quality and potential their impacts products about towardsand governments transparency more by industry growing around movement world the is a There of like goods clothing and carpet. performance of the and retailers manufacturers buy, inform they as what well about as choices make information they as objective public with aimand is rate. The at what to provide the to consider materials these how break down able were scientists the which after period, This initial place took over a90-day study alternatives. synthetic conditions, the compared samples from with in salt-water controlled biodegrade carpets clothing and woollen both samples from how that tests Institute, in Scion, an experiment Crown Research another with working be To and nylon. like polyester will we that, test F I
on a vibrating surface to make avibratingon surface sure dried they dried and then processing. were fibres The to washing is sheep’s exposed wool its life as later in that develops the curvature new the than rather in during development, fibre programmed curvature natural the measure to accurately scientists the enabled That individual had prepared. to fibres be base of the from snippets seven hundred 0.5cm over which from sheep ofwinter merino coats the from locks research used full-length The to applied could human be wool hair.merino by using learned same, sowas what the the of all hair and are growth essentially structure chemistry, The analysiseasy cell structure. of its humanbecause hair is too coarse to enable chosen was This wool wool. sheep merino research using with answer found the curly, fine, company, cosmetics Corporation may have Japan’s with in conjunction scientists, Our Kao $85b haircare market. world’s the on have impact an undoubtable many, puzzled has would answer unlocking the to makes what secret hair straight or the curly As Hair-raising findings Hair-raising of novel products. haircarethe market and design potentially the for opportunities new will open development this finding will also to apply human hair. The is essentially allsame, and as hair the chemistry cell is, length, along with cell type important This how curl. shows of the outside the on side hair of the follicle to cells more produce than byone on cellsrather dividing often more cell types, different of the arrangement by the produced was This curl curl. meant that the the of outside the on cells located were orthocortical cells inside longer the the lined while curl, of the paracortical that shorter team reported The inside and outside. counting and measuring cells the of the both on of months involving time-consuming, was work This painstaking curl’sreveal the cell structure. to examined to able be then was fibre Each staining it. before snippet, of wool each curvature the team measured andfibre the then usedforceps to was accurately position each force tip of of the fine developing. Electrostatic naturally, curves kinksor any new without F I E
35 Our research Our research Pan sector
The following stories highlight the impact our consumer-centred science has on the world’s smartest and most sustainable farming systems, and most sought-after food and bio products.
smartest and Our consumer– most sought- most sustainable centred science drives after food and farming systems the world’s... bio products Our research
36 Digital agriculture Digital Island asanexample,wearetestingthelevel nutrient useefficiency. Also, usingRakaia management decisionstoimprove farm tracking canassistthefarmerinproactive to testthehypothesis thatreal-timeanimal of nutrienttransfersaroundthefarm. We aim that thegrazinganimalsaremainconduit of urinedeposition,basedontheassumption movements andrelatethesetotimeplace Tokanui Farm, wehave startedtotrackanimal information andadvicetoend-users. At our support ourscienceanddeliveryof to understandhow technologiescanboth number of‘usecases’(‘learningbydoing’) In thefirstyearwehave establisheda to timeandspace. technologies, andgainefficiencieswithrespect systems, underpindigital anddisruptive provide outputsthatwillinformfuturefarming funding platformthroughwhichwelookto research fitswithinour Agri-Food Production the farm-gaterightalongvalue chain. The clients achievetheirgoals;andextendsbeyond the digitalisationofagriculturetohelpour understanding how AgResearch canbestdrive This researchprogrammeisthereforeabout solutions tothishighlycomplexchallenge. that ‘digitalisation ofagriculture’canoffernew analytics areconverging toofferthepossibility the developmentofartificialintelligenceand storage, theincreasingcomputingpower, and reducing costoftelecommunicationsanddata increasing miniaturisationoftechnologies, the in ourarmouryarestartingtoappear:the in findingadoptablesolutions. Newtools climate, wemustconsider AgResearch’s role a planetwithscarceresourcesandchanging of producingmorefood,sustainablyon As theworldconsidersongoingchallenge drive solutions. faces requireinterdisciplinaryteamsto complex problemsthatNewZealand project planning. This iscriticalbecause different groupsduringbrainstormingand Suite tofacilitateinteractionsbetween We have alsoestablishedaCollaboration management andfoodqualityeffects. food scientiststoexplorelinks betweenon-farm farm systems scientistsareworkingwithdairy much togetherinthepast.For example,on- between sciencegroupsthathave notworked research programmethatfosterslinks We have establishedaninterdisciplinary than outward. The impactstodatearemoreinward-facing new knowledge andbetteradvice. collect moredatathatcanbeusedtobuild intelligence todeliveradviceand,inreturn, a prototype‘product’incorporatingartificial groups ofend-users. The nextstageistobuild tailored weedcontroladvicetodifferent process todeviseastrategyforproviding AgPest), wehave appliedadesignthinking Again usingausecaseapproach(inthis in research)toend-users. knowledge fromyearsofinvestment deliver advice(i.e.usingourexistingscience explore how digitaltechnologiescanhelpus digital technologies, wehave alsostartedto focus onacombinationofnewscienceand investment. While thetwoexamplesabove would givethefarmerbestreturnfortheir asked whatscaleofsoilmoisturemonitoring management. Putmoresimply, wehave of ‘granularity’ requiredtooptimiseirrigation I 37 Our research 38 Our research Better Border Biosecurity Biosecurity Border Better strongly supported by DairyNZ, which is closely is which by DairyNZ, closely supported strongly is Riskmany Pest project Assessment areas. The in work of its AgResearch is impact seeing the programme, Given of reach this the wide-ranging world. the Zealandapplication in New and across and tools that will haveknowledge wide research, provider of biosecurity world-leading (B3) up a to set programme. be B3 been has Biosecurity Border Better of the member Research Institutes, AgResearch is akey Crown other from researchers with Along and mitigate them. detect risk to of incursions, technologies and develop minimising on to work enabling scientists its the strategy, Zealand’s New 2025 with Biosecurity is that AgResearch aligns through this platform It sustainable for production. livestock systems farm decision-centric and biosecurity genomics, biome providing of farm an platform integrated agoal has of Platform Production Agri-Food The
important trade partner and potential source partner trade important focusing China on been has an as project Plants however, Sentinel of the safety and part Zealand’s New not just support border does programme in this work Our broad biosecurity begun. recently Zealand,New in this and work area has spread in of estimating for pest rates proposed also has been Amethod species. forage hazards of additional to biosecurity extended Zealand distributions. is This being now work clover and estimating for potential their New hazards to and ryegrass/ weed rankingfor insect both We and results methods on have agreed many plants. forage other hazards to ryegrass/clover along with pasture evaluation potential of spread of the and impact ajoint includes This work stakeholders. other willapproach prove hope that we useful to are acomprehensive developing risk analysis Together work. in organisations the the engaged H
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B of future exotic organisms.of exotic future This work were correct. correct. were framework premises the that the underlying ofmeasurement resilience. Findings suggested the for of resilience, and aframework to test specifically, to perceptions their hear about resilience; rural about communities with to was talk workshops of purpose these The Te Kuiti, Taumarunui, Huntly and Dannevirke. small Island: communities rural across North the in workshops Research Programme conducted Communities Rural 2018 in Resilient Early the futures. own approach to envisioning and creating their in taking proactive amore farmers support aim to Its was alternative futures. to explore modelling systems social and science farm innovation tools and that processes integrate and tested year research programme developed Rural Futures.AgResearch, called This seven- of anout by earlier research programme led developed has Communities Rural Resilient and services. ecosystem indicators resilience communities, rural in youth have farming entrepreneurship, included Māori and cultural Topics outcomes. project within the balancing economic, environmental, social farming conditions Zealand, in New while to investigate adapting to changing the social in and physical the researchers sciences together brings Communities Rural Resilient Communities Rural Resilient this programme to date is collaboration the of outcomes impactful most other of the One China from routes acrossPacific. South the modern more the as well as routes trade ancient along that is growth to work looking develop the and Road Initiative Belt of the – China, part as Zealand New and between and opportunities challenges of to biosecurity contributed areview
across small other Zealand New towns. are occur, consistent they patterns and whether to these investigate why research is needed resiliencethe of our small towns. Further improveaccurately measure, and hopefully track this topic, can so we understand us to better for It is important is and multi-faceted. complex tell us results that community resilience These required. when upon in drawn communities, their be can which described they social capital to due strong the be This may and cultural resilience highest. the as of allresilience resilience lowest to types, be Nevertheless, they rated their economic and median income. like growth population socialover-estimated and economic statistics, Interestingly, community consistently members statistics. official on towntheir performed We also asked communities to how estimate judgements. experts’ acommunity’swith ratings); own were nor community resilience (as did not match they measures of not good were statistics official of byfor more another. Findings also showed may compensated be type of less one other: each for substitutable appear somewhat to be ‘overall’ also resilience resilience. types These make institutional), up types these and together (economic, social, cultural, environmental and areof is,That different there types resilience biosecurity awareness and support. biosecurity makes it to difference measuringwill the be our social team science out, rolled being now kit that With and intermediate schools. primary for kit education abiosecurity toScience, develop House of trust, an education with partner Tauranga community. saw This our team work in the awareness and support biosecurity Initiative, measures and improves which of Tauranga Port the Excellence with Biosecurity H A
39 Our research 40 Our research want ownership ofproductfromthepaddock farmers, ourpartnershave identifiedthatthey marketing. Notunlike many NewZealand beyond productionintoprocessing and extend theirbusinessoperationsandinterests development projectsthatwillhelpthem AgResearch toco-developresearch and our Māoriagribusinesspartnersareasking use andvalue chain.Increasingnumbers of (R&D) needs:decision-making, resource to underpintheirresearchanddevelopment three key Māoriagribusinessresearch themes values-based supplychains, wehave formed developing newindigenousfibreandmeat Māori partnerswhoareintheearlystagesof As AgResearch watches andlearnsalongside building opportunityforNewZealand atlarge. business asusual,whileatthesametime aims tomove Māoriagribusinessesbeyond novel, uniquely Aotearoa businessethosthat Whanaungatanga andManaakitanga. This isa Whakapapa, Rangatiratanga,Kaitiakitanga, (namely a‘shared-principlesvalue chain’) of consumer) thatisbasedonsharedprinciples – asupplychain(includingthefarmand businesses towards somethingdifferent values andownership structurespropelMāori are distinctivebecausetheirwhakapapa, At AgResearch, werecognisethatourpartners agribusiness Māori AgResearch’s workinthissector. for allofNewZealand, whichisanatural fitfor healthier, moresustainableandbetter future calibre ofdiverseresearchaimed atcreatinga Mātauranga Capability Fund thehigh reflect The projectsfundedthroughthe Vision mātauranga –exploringindigenousknowledge. – improving healthandsocialwellbeing; environmental sustainability;hauora/oranga indigenous innovation; taiao–achieving the Government’s Vision MātaurangaPolicy: investment, whichsupportsthefour themesof Hihiko: Vision MātaurangaCapability Fund To supportthiswork,weapplyfor Te Pūnaha connection withtheMāoriagribusinesssector. look forward togrowing ourpartnershipsand This isanexciting areaofdevelopmentandwe the ‘Māoristory’fromtheirproduct. land andwaters, andtoleveragethevalue of and evenrestoresthehealthmaurioftheir keeping withculturalvalues, andthatmaintains and engagewiththewhenuainaway thatisin agribusinesses aretheiraimstoproducefood value isrecognisingthatuniquetoMāori the wealth.Butwhereweat AgResearch add supply chain,therebyspreadingtheriskand and toincreasethetransparencywithin their nationalandinternationalcustomers to theplate,have adirectrelationshipwith H I A C extend theirbusinessoperations. development projectsthatwillhelpthem AgResearch toco-developresearchand Our Māoriagribusinesspartnersareasking Aramoana 41 Our research Our people
At AgResearch, our people are our most important asset. Without our people, there is no science and without our science there is no innovation.
Our team of around 700 people includes At AgResearch, we care deeply about the scientists, technicians, farm and support staff concepts of Mātauranga Māori in our work who are all specialists in their own areas of work. and we collaborate closely with iwi on a variety AgResearch views its role as providing a safe and of exciting and meaningful science projects. healthy environment for our people, where talent is attracted, developed, nurtured, retained We promote, celebrate and enjoy the diversity and promoted. found within our own organisation and among our customers and external stakeholders. Our Talent Development Programme provides a In FY19 we will be developing an Equal robust framework for our high-potential people. Employment Opportunities Policy that links Our Succession Planning Programme aims to to our values and that supports our ensure that we have a pipeline of ‘match ready’ commitment to organisational diversity. talent that is being developed, and prepared for, better and brighter opportunities.
Gender profile Ethnicity profile
Australia, 1% North America, 2% Africa, 1% NZ Māori, 2% South America, 2% Male 50% 8% 7% 8% United Kingdom, 4% Other / Unknown, 6%
Female 50% 52% 53% 52% European, 9%
June 2015 June 2017 June 2016 June 2018 Asia, 10%
NZ European, 63% Our people
42 and and (Innovation), Mātai Āta Mahitahi We value Whakarangatira year. per teams andscience times non-science three nominations coming and winners across from ValuesOur Award multiple programme with We through the recognise our people AgResearch. across of our common purpose delivery the to support work and strategic practices processes, people anddo are continually into integrated all of our we everything values Our underpin stakeholders. and our of our people engagement strong the organisational culture on and positively impact of our aspect values are acritical These goalsstrategic and aspirations. in toand order our our deliver on customers, other, each with interact and we how become, want to we are, we who who define They organisation 12 past over the months. in 2017,people into our embedded have been by our developed were which values, Our Our values performance in this area. performance improved our support will that programmes specialist and to deliver plans develop and We appointed a culture and engagement 59% from to Index 61%.Engagement showing an results increasein the our with to annual the Employee survey, Engagement In 2017, 73.4% responded of our workforce and culture accountability Leadership, this ambition. to support is designed Strategy employer and our People AgResearch to is agood being committed us along this on with journey. bring our people isit key to our organisational success that we and in Lincolnfacilities North and Palmerston joint new of two construction the change with asignificant embarked on has programme of AgResearch inand adaptability our people. resilience and encourage and we support cultureOur is of transformational one change partnership and collaboration agility, change engagement, Leadership, Āta (Thought Leadership). (Thought (Collaboration), (Quality), Whetu Mātai Mātai (Professionalism), (Customer Focus)
them, is a key strategic goal is of akeythem, strategic our organisation. use are up,facilities set and our how people of collaborationgreater level through our how a andenvironments to encourage and support spacesexisting to maximise fit-for-purpose work ouron of ways ‘new working’. Using and our new have we organisationalfacilities, astrong focus to joint In our new preparation our for relocation VisionMāori, Marae. and Mātauranga Noho Treaty of the understanding of Waitangi, te reo improved includes that programme development a robustMāori Mātauranga We of are our people. delivering competency We have building on focus astrong cultural the pathway.navigate career own their they as senior of more their peers knowledge and experience of the benefit to the derive staff junior more for uptake, providing opportunities good seen has a mentoring programme, which We received. well have been has also established leaders to isprogramme, which all open people deliver. that they results and the The leaders and toconfidence improve of our impact the leadership leadership capability, to strengthen is to broaden and deepen keyOur objective heavily in our High Potential Talent Programme. We invested have also facilitators. external and of in-house and is by ablend delivered leading self, and leading leading leaders others programme that is on based development leadership ProgrammeLeadership and aphased initiatives, Team including an Executive and in FY18 key several leadership launched we We our have Framework Leadership refined tool. measurement new a employee with engagement more frequently investigating measure can will we our we how be and transparent.is In coming honest the year leadership and ensuring that our communication improving in and confidence senior trust conveying sense astrong of common purpose, areasContinued of organisational are focus on Employeeengagement June June 58% 2015 June June 59% 2016 June June 59% 2017 June June 61% 2018 43 Our people 44 Our people 10 It is our goal to make of employment this period and improved. continues refined to be our us employee’s and with this journey process Onboarding is time in recognised acritical as this coming inmanagers the to support year. ‘unconscious to bias’ hiring workshops delivering and processes will be and selection prejudiceinadvertent from our recruitment We will continue hard to work to remove any Immigrationwith Zealand. New our organisation and are an employer accredited of Weprocess. cultural diversity the celebrate toprocedures ensure afair and transparent and policies and selection recruitment strong internal with promotion into vacancies open We continue to promote and demonstrate and induction selection Recruitment, managed consistently cadence. good and with is to ensure intended framework that change is the Prosci the on methodology, Based organisation. within the executed –will be scale change small how –both determine and large change management framework, which will AgResearch is process of in designing the a our partners. with this in practice, will work how to us help to model understand operating co-designed of anew development and the guidelines equipment and consumables shared resource and management data protocols, intelligence, paper such as online aspects many includes different work This preparatory Employee turnover 0 2 6 8 June 2015 June 7.09% June 2016 June 6.1 % June 2017 June 8.03% June 2018 June 7.97% can improve our employee experience. employee our improve can us for AgResearch how to about learn opportunity This is interview. acritical exit face-to-face or and/process to an include survey online exit We have exit revised our employee recently evolves. objectives science of our direction strategic the as descriptors these will to science endeavour refresh with to work In course due descriptors. we career science promotions, science for is which to aligned our Wepromoted. process have defined aclearly and are encouraged reports and direct their conversations managersdevelopment between and cultural goals.our strategic Ongoing to designed support programme that been has a comprehensive learning and development aspirations.career In turn, AgResearch offers organisation’s employee’s and the own strategy goals and that align development the with objectives set reports, direct their with process that managers, in consultationreview of our annual part as performance It is expected and exit promotion Employee development, implementation. automated areas will inprocesses be by its these (HRIS) this year. that many It is of our hoped Humanof anew Resource Information System introduction by the supported willprocesses be and Induction selection recruitment, Our useful, welcomingas can. and we engaging as Employee age profile No. employees 200 100 150 50 0 15-20 1 20-29 39 30-39 126 0- 9 173 50-59 175 60-69 93 70 Average tenure Harassment and bullying prevention AgResearch is dedicated to a harassment- and bullying-free work environment, as demonstrated 15 12.75 12.55 12.67 12.31 in our Code of Conduct and the relevant provisions of our employment agreements. We 12 have a strong Employee Assistance Programme 9 culture across all campuses, with both internal and external representatives, available to offer Years 6 support and escalation advice.
3 Our value of Professionalism outlines the 0 expected behaviours in this area at all times. June 2015 June 2016 June 2017 June 2018 In the coming year we will be looking at additional resources and development that we can deliver to support a greater level of awareness of the prevention for workplace harassment and bullying.
Flexibility and work design Safe and healthy environment AgResearch prides itself on the flexible working Our vision is to be “a safer AgResearch arrangements it offers to its employees to together”. Health and safety is still an all- promote good work–life balance and wellness. organisation priority with an expectation that Of our total workforce, 21% are on part-time all employees go home safely every day. We or variable hours with working arrangements deliver numerous initiatives that support this appropriate to their specific needs and ambition both from a compliance perspective requirements. Technology resources, including and to support the general wellbeing of our phones, tablets and Skype for Business people. We offer generous sick leave provisions, capability, are provided to allow for greater income protection and life insurance cover employee mobility. This will continue to be an and we work closely with our managers to important focus as we relocate and transition ensure that our people take their annual leave our workforce to different campuses as part of entitlements to allow time for rest and recovery. the new joint facility programme. AgResearch also offers generous entitlements, over and We have taken the opportunity this year to above legal requirements, in particular for sick complete an external audit of work-related stress leave and parental leave. along with reviewing our own internal wellbeing practices. We will continue to execute the key Remuneration, recognition and conditions actions recommended in the audit and review, AgResearch has a remuneration policy that is over the coming year. fair and consistent and that takes into account market relativity, internal relativity, ability to pay Our future focus and performance. This policy ensures that all individuals and groups have equal employment • Joint facilities at Massey and opportunities and fair terms and conditions. Lincoln Universities We partner with managers to ensure moderation • Our new ways of working of both performance and remuneration levels. • HRIS implementation We benchmark our salary medians against the • Leadership development general market sector and also offer annual • Change management excellence performance bonuses to recognise exceptional • Campus vitality initiatives individual contributions. • Process efficiency and improvement • Talent pipelining for critical roles We are in the process of undertaking a and key people strategic remuneration review in consultation • Employee diversity and wellbeing with our union, which we hope to complete by the end of 2018. Our people
45 46 Internal research awards Internal research awards research Internal a by-product of the fermentation and a and a fermentation of the a by-product methane, form which methanogens, are the group microbes of rumen important Another understood. well are and not roles their studied poorly toout be dominant The microbialspecies. groups turn is same. variation There and by caused diet host are largely the around globe microbes the rumen and wild), major the groupsdomesticated of and ruminant (both of diets species a variety across that, demonstrated This globalstudy productivity. ruminant are microbes essential for These digested. be could not that otherwise grasses such as feed from energy allowing animal the to extract rumen, in by the microbes isFeed fermented of animalsforegut ruminants. as known is modified rumen the Greenhouse The Gases. Global Research Alliance Agricultural on the for support of its part as Government Zealand New by the funded rumen, in the microbial of the diversity aglobal survey that led This year’s team by the won Prize Science was 2015. Reports, in: Scientific Published range. geographical awide across found is microbiome acore but host, and diet with varies composition community Rumen microbial Science Prizewinner an exceptional groupofnominations. awarding theprizes,wewereverypleasedtoreceive of outstandingscientificoutputs.Inthissixthyear and anImpactPrizetorecognisetheachievement recognise outstandingachievementinresearchquality In 2012, AgResearch establishedtheSciencePrizeto
environmental impact of livestock. of impact environmental toward contribution reducingthe made adirect emission issue It therefore has at aglobal scale. of solutions to methane development the provides an encouraging insight the for by this publication generated knowledge The are microbes everywhere. methane-producing will same have the global application because in place one developed mitigation: atechnology This finding abig has implication methane for and diet. regardless species ruminants, of host found in were all species major methanogen same found the study The gas. greenhouse Wayne Young andGlobalRumenCensus Collaborators members notinphoto:GemmaHenderson, SivaGanesh, Peter Janssen, Arjan Jonker, and Faith Palevich. Team profitability. Grasslands for pastoralfarmersseekingtooptimise With firstseedsalesin2014,Grasslands since 2004. Margot Forde Forage GermplasmCentre cultivar usingexotic germplasmfromthe breeding programmethatdevelopedthenew Grasslands Innovation Ltdhasfundedthe a commercialpartnership. cultivar developedby AgResearch aspartof Ngā Tāngata Grasslands Impact Prize Grasslands under grazingthanotherredclover cultivars, With higher growth ratesandpersistence sheep andbeefproductionsystems. its useinseedmixes fordairy, deer, andmixed Relish’s improved grazingtoleranceincreased use inlambfinishingsystems, Grasslands production. While theinitialfocuswas onits change improvements inpersistenceand Relish isamajor advancement, following step to continuegrow, especiallyinseedmixes. Grasslands ® ® ® Relish redclovercultivar. Relish provides anewoption Relish isanewredclover ® Relish useisexpected ®
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Derek Woodfield Ivan Baird,Zane Webber, Allister Moorheadand (AgResearch). Team Jahufer, membersnotinphoto:Zulfi John Ford (PGG Wrightson Seeds)andBrentBarrett 47 Internal research awards 48 Our highlights therefore wider New Zealand. New wider therefore to immense benefit for the agricultural sector and scientific successes in the lab and on-farm, translates our communication. Ultimately impactful and growth levels and staff training and development, to revenue areas of the organisation, from scientific publication various across measured is success AgResearch’s Niho Taniwha highlights Our 448 626 249 Total FTE’s* papers papers Scopus-indexed published $229.6k Revenue per FTE* per Revenue 1.32 submitted reports Client per scientistper published Papers *FTEs = Full-time equivalent staff equivalent =Full-time *FTEs the organisationthe across delivered training of hours 6,706 2,414 7,664 followers Facebook followers Linkedin campuses across all delivered workshops training 134 4,697 31 Media releases Media followers Twitter 49 Our highlights 50 Our international connections 51 57 30 connections connections international Our with Australia with Collaborations USAwith Collaborations Countries Iran, Ireland, Israel, Italy, Japan, Kenya, Malaysia, Mexico, Mexico, Malaysia, Kenya, Japan, Italy, Israel, Ireland, Iran, Indonesia, India, Hungary, Kong, Hong Germany, France, Finland, Ethiopia, Eritrea, England, Ecuador, Denmark, d’Ivoire, Cote Rica, Costa Colombia, China, Chile, Canada, Brazil, Belgium, Austria, Australia, Argentina, Algeria, order: in alphabetical with, collaborate we Countries the successthe of globalrelationships. AgResearch’scapability reinforceand scientific span of breadth These the programmes. range of awide research out to carry world the organisations with around AgResearch partners 30 266 with China with Collaborations Collaborations United States of America, Uruguay, Wales of America, States United Tunisia, Emirates, Arab Turkey,Taiwan, Thailand, United Syria, Switzerland, Sweden, Lanka, Sri Spain, Singapore, Scotland, Arabia, Saudi Russia, Poland, Philippines, Peru, Norway, Nigeria, Netherlands, Morocco, Mongolia,
C S U A T N N A I A T T D E E A D S B R A Z I L R U S S I A C H I N A A U S T R A L I A C S U A T N N A I A T T D E E A D S B R A Z I L 6 –10 collaborations 10 +collaborations 1 collaboration 2 –5collaborations R U S S I A C H I N A A U S T R A L I A 51 Our international connections 52 Outreach Telling the AgResearch story Outreach AgResearch’s research revealed? has tuning are to what they learn in specifically listening they Are watching or by chance, or are us. engaging with they why on depending Each audience approach requires a different have since asignificant use. seen increase in its channel and we thisand relaunched important This can. and we year useful as redesigned we to makemeaning appealing as is it it important and media our stakeholders, the public, the websiteOur is an used as information hub by is presence critical. web and easy-to-read In digital having age, the an intuitive, informative public-facing events. stakeholder-specific gatheringsandmeetings,tolarge ranging frommainstreammediaandsocialmedia,to To sharethestoriesofourresearch,weusechannels
AgResearch story. AgResearch way toplanning share best the the are to all questions considerThese when are expert? learning the they know from they do is audience and hearingWho how the from, is aware of exactly who they represent. they who is aware of exactly to ensure to out our people rolled audience their progressively wardrobe been has branded Our professional organisation. representing the when to look and research their too, so is it important walking ambassador all for of our colleagues of AgResearch means a being part Being is positive. always alike and teachers response students from continuedfor innovation is and the vital, needs it talent science that the agriculture has available in agriculture and Ensuring science. in to opportunities order highlight career the across Waikato the at an annual Day, Science University, Year hosted we 13 from students LIC and Waikato DairyNZ, with In partnership ourinformation science. about to share opportunity agood and presents to Waikato the sector agricultural aweek, for of a significant those involved in percentage the brings Creek NationalThe Fieldays at Mystery farm systems. farm to to genetics fertility from discuss everything and to and farmers, breeders with connect to researchers ourand world-leading allowed our Invermay Campus agreat example, was at Day held Breeders’ The share our expertise. take timeare we to of successful the because of ourSome key relationships stakeholders with
social media accounts. media social through our viewers almost 5,000 reached Minister’s Prime the baby. This video cute hat Te Neve for a woollen Gayford, Ardern Aroha to create scientists ofand our one super-crafty manager,Lincoln farm technicians our textiles our with This year itself. science worked we the of acreative takes turn outside often capability Raising AgResearch’s awareness about scientific Monde. and Le Press Ferrari Agency BBC, AgResearch ABC, featuring the on with overseas, those Zealand broader audiences in New and in reaching This continued growth year seen has funding opportunities. new and seek stakeholders key way to influence is it alsotaxes; an effective communities AgResearch through their that fund and communitieswithin science rural to broader regular debate the and discussionsbeyond had Using channels media is way to agood reach
53 Outreach 54 Collaboration with other Crown Research Institutes Crown Research Institutes other with Collaboration leadership. Some of the most significant most leadership. of research the Some and thought broad application ofthe knowledge from research of benefits the end-user and the funding are constraints eased, peers, their from learn –researchers ensures benefits bodies wide and industry agencies other Collaboration with both internallyandexternally. organisational values,andthatvalueisdemonstrated AgResearch definescollaborationasoneofitssix loss from soil. from loss to shown nitrate reduce been and recently has cows’ on urine Plantain also adilution has effect to shown nitrogen reduce in urine. had been It intensively has farms. plantain, which studied and crops dairy, for and beef and arable, sheep through research into species diverse pasture is at reducingnitrate aimed leaching This project Forage forreduced nitrateleaching we have highlighted just a few. a just have highlighted we Zealand. New for had invaluable Here, impacts have that developments innovative many exciting, across arange of disciplines, and have to led stretch partnerships Research Institutes. These relationships Crown other the are with hold we
and long-term research.and long-term that into took account medium- activities short-, science strategic for approach aframework was outcome ofapproach. this The collaborative anational to develop together working expertise diverse range of the research successful with highly as regarded were These workshops. CRIs other inthose from facilitated to take part joined AgResearch scientists developed, being response was rust myrtle the As Myrtle rustresponse decision-making. environmental social, economic and cultural outcomes of environmental, the enhancing through impact findings will have potential to the make areal this completion collaborative its project’s At resource success. for management are required governance Zealand in New and factors what so far, studies six case at environmental looking to applied been has framework The framework. SES using the decision-making environmental is investigating study This AgResearch-led framework EcologicalSystemsSocial (SES) Innovative NZ UHT Foods Hybrid project. of This the collaboration isingredients. part cereal, or plant and vegetable, incorporates that UHT product hybrid with Asian markets Miraka, are we at to ways looking target Together commercial with milk processor development Hybrid UHTproduct forms. in other work at to ways will continue alliance’s look the stage commercial its progressed goals final Its well. sector. inception has Since it its production resource Zealand’s streams New for primary tofocus, maximise returns secondary from a applied strong sciencewith and commercial Innovation at arange of research and looked has This collaboration also Callaghan includes alliance Bioresource processing
55 Collaboration with other Crown Research Institutes 56 Collaboration with other Crown Research Institutes urgently needed. urgently needed. of control so are alternative methods by 2028, out usefor phased will against grub be grass registered $1.6b. insecticide key synthetic The cause can years it losses at pasture valued in bad damagingeconomically pests; pasture isGrass Zealand’s grub of New one most and manuka grub grass beetle. pests pasture Zealand New endemic of the against larvae control dual that shows agent new activity haveprogramme, isolated scientists an exciting Biopesticide Next-Generation of the part As grass grub anewcontrolagentfor Identifying Cd uptake in values are crops. protecting standards, interim and if soil current trigger uptake, if crops are compliant food with affect factors what to determine and potatoes wheat to measure Cd uptake in undertaken been has Zealand, of New Association Fertiliser and the Lincoln University along with This joint project, quality, food environment. soil and the health on that potential has effects adverse fertilisers Cadmium within (Cd) is metal atoxic heavy agricultural systems Assessing cadmiumuptake inour polyester and nylon. and nylon. polyester like fibres marine environment than synthetic risk less far to the presents and therefore greater at rate in afar down sea water,breaks anatural –being protein wool – fibre suggests say limited available the data scientists Our issues volumes of as microfibres increase. potentiallyour creating seafood, human health marine up life by and the end in can ingested In smaller ocean, the microfibres be can Fibres inourwater overall of estimate $1.658b ayear. aconservative sectors). reached review That land and arable forestry (for pastoral, the to Zealand’s of New weeds costs the productive available the published researchreviewed on Economics Research Together Unit. partners the Lincolnfrom University’s Agribusiness and also involvedThis partnership economists The costofweeds
keep consumersinformed. materials breakdowninthewatertohelp seafood, AgResearch isstudying howdifferent our oceansandeffectsonmarinelife As globalconcerngrowsaboutpollutionof Turuturu 57 AgResearch Key performance indicators for 2017/18, at a glance
Key performance Strategic goal Objective indicators for FY18 Result for FY18
Innovative and Staff engagement Increase Engagement In July 2018, our Staff Engagement Index high-performing increased. Index from the previous was 65.0, up from 61.0 in 2017. workforce. staff survey result by 3%.
We will all have a Total Medical Treatment From 1 July 2017 to 30 June 2018, the total
People safe workplace. Injuries (MTI) and MTI number of MTI and MTI causing lost time causing lost time <60 was 34, down from 38 last year. per year.
No serious harm We did not have any ‘serious harm’ accidents. incidents.
Comprehensive Grow our >90% of surveyed In 2017, 83% of surveyed stakeholders understanding understanding stakeholders rate rated AgResearch’s understanding/ of the sector, of the sector AgResearch’s contribution to their strategy as good or including key and the sector’s understanding/ better. At the time of publication, 2018 and emerging recognition of that contribution to their results are not available. players and their understanding. strategy as good or relationships. better.
Co-owned Grow commercial Successful engagement After analysis of both the quantitative strategy with key revenue through with Government, key and qualitative data (key themes) in the stakeholders. closer alignment of industry and wider 2017 Stakeholder Satisfaction survey, a stakeholder and stakeholders to identify revised and comprehensive Stakeholder AgResearch the new science that Engagement Plan (SEP) was developed strategic goals. is needed to meet and implemented in the 2018 year. The New Zealand’s critical SEP was developed to meet several key challenges around Stakeholder needs; agricultural profitability, • Greater understanding of the breadth enhancement of of AgResearch capability the environment • A greater need for co-design around and mechanisms to key R&D activities fund that, resulting • Increased consistency in general
Stakeholders in significant new engagement investment. • Increased involvement of senior management in direct stakeholder engagement The SEP implementation was based upon a revised platform for Customer segmentation, with the various segments (4 in total) receiving tailored Engagement Plans.
Deliver $32.4m of We achieved $34.3m of stakeholder-driven stakeholder-driven commercial science revenue. commercial science revenue. We achieved $3.3m of international revenue. Deliver $2.48m of international organisation-driven revenue.
R&D solutions that Ensure AgResearch Implement the A number of operational meet sector needs has the research recommendations recommendations were developed with and contribute portfolio, and from the 2017 Animal the aim of increasing staff engagement to Impacts capabilities that will Sciences Roadmap. and operational efficiency; these have and Outcomes meet current and been introduced during FY18. A major identified in our future stakeholder recommendation was to conduct a
Research strategy Statement needs and deliver review of our internally-funded Livestock of Corporate Intent. our strategy. Gene-editing programme. This has been completed, and has resulted in a significant change in direction for FY19. Key performance indicators Key
58 Financial Enabling systems Research Strategic goal strategic goals. achievement of to enable performance financial Sustainable strategy. enable deliveryon systems that processes and Robust business relevant science. High-quality, aligned tostrategy. Infrastructure targets. Achieve financial processes. of business efficiency effectiveness and Improve the to ourstrategy. needs anddeliver meet stakeholder R&D outputsthat high-quality, reliable Deliver relevant, Objective for purpose. infrastructure isfit AgResearch Science Plan. AgResearch’s 2016 Implement budget achieved. Net ProfitBefore Tax achieved. Operating Profitbudget realisation. commence benefit working) toplanand Management way of Impact (ournewProject Implement Ideato scientist. papers publishedper > 1.0Scopus-indexed indicators for FY18 for indicators Key performance and budgetsforFY18. programme milestones developments toagreed and LincolnHub Footprint programme Develop Future implemented fromFY19. meet thechangesinoursectorthatwillbe we have developedanewSciencePlanto would bedeliveredthisyear. Inaddition, milestones whereweconsiderimpacts We have implementedkey SciencePlan Science Plan. emphasis ondeliverytothe AgResearch refreshed onanannualbasis, withparticular The Animal ScienceRoadmap willnow be better thanourbudgetedlossof$11.4m. Our NetLossBefore Tax of$1.8mwas a budgetedlossof$6.8m. Our OperatingLossis$0.4mcomparedto review isunderway. for implementation. A benefit realisation of teams(Phases2,3&4)areontrack teams andPhase1teams. The remainder Impact’) hasbeenrolledouttoourpilot Management approach(known as‘Ideato Our end-to-endintegratedProject published perscientist. 1.32 Scopus-indexed paperswere Result forFY18 contract isawarded in August 2018. contract negotiationsarecompleteandthe timelines willbeconfirmedoncethe schedule. Construction completion This hasimpactedontheprogramme budget andwas deemednotacceptable. Involvement contractor’s tenderexceeded Only contract,astheEarlyContractor we have requestedtendersforaBuild Joint Facility projectiswithinbudget, While theLincolnUniversity AgResearch agreed milestones. Greenhouses projectsareprogressingto The Food ScienceFacility andGrasslands 59 Key performance indicators 60 Performance indicators outcomes isoutcomes Target measured. AgResearch’s figures from[brackets] in are 2017–22 SCI. whichprogressagainstnon-financial indicators operating SCIto the achieve operating AgResearch’s 2017–22 Intent of (SCI) Corporate Statement following the identified As at30June2018 indicators Performance Core Operating Indicators AgResearch-specific AgResearch-specific Indicators of End-user Engagement and Science Relevance G.5 G.4 G.3 G.2 G.1 1.2 1.1 ID ID Financial indicator Science quality knowledge transfer Technology & stakeholders Revenue from collaboration Research stakeholders Confidence of End-user collaboration Indicator Indicator Revenue perFTE,basedonaverage FTEsover theyear. (Data forthisindicatorisreportedcalendaryears.) publications ineachjournal.) during theyear, weightedbythenumberof AgResearch assessed bySCImago,inwhich AgResearch staffpublished two-year citationsperdocumentforscientificjournals Impact ofscientificpublications. (The average value of Commercial reportsperscientistFTE. from stakeholders withcentralGovernment. revenue fromcentralGovernment; includesco-investment Revenue comingdirectlyfromstakeholders. Excludes (Data forthisindicatorisreportedcalendaryears.) international authors.) (c) internationalauthorsor(d)acombinationofNZand with (a)only AgResearch authors, (b)otherNZauthors, Publications withcollaborators. (Percentage ofpublications conducted byMBIE.) (Reported bythe biennial2018CRIstakeholder survey with AgResearch. partnership stakeholders who weresatisfiedwiththeircollaborationor ability tosetresearchpriorities, and(b)thepercentageof end-users thathave ahighlevelofconfidenceintheCRI’s (a) Percentage ofrelevant fundingpartnersandother Revenue perFTEfromcommercialsources. Definition Definition $229.6k [$215k] 2.9 [2.7] 1.26 [1.0] $36.0m [$39.1m] (d) 24%[21%] (c) 31%[28%] (b) 34%[39%] (a) 11%[20%] (b) 71%[85%] (a) 65%[75%] $83.1k [$85.9k] Measure [target] Measure [target] AgResearch-specific Operating AgResearch-specific Indicators of Knowledge and Technology Transfer AgResearch-specific Operating AgResearch-specific VisionIndicatorsto Delivery of Mātauranga 2.4 2.3 3.2 2.2 3.1 2.1 ID ID Adoption Licensing deals stakeholders Revenue fromMāori Stakeholder reports with Māori Effective relationships Collection requests Indicator Indicator conducted byMBIE.) (Reported bythebiennial2018CRIstakeholder survey knowledge and/ortechnologyfrom AgResearch. Percentage ofrelevant end-userswhohave adopted annum. services) withNewZealand andinternationalpartnersper property (IP)(includingtechnologies, productsand licensing orotherdealsof AgResearch-derived intellectual (a) Total revenue,(b)numberand(c)percentageof stakeholders. Revenue (direct andleveraged)fromMāoriagribusiness Number ofclientreportssubmittedby AgResearch staff. available asatdateofpublication). survey outofthesixthatwereinvited.2018resultsarenot (*2017 results.FiveMāoriagribusinessesrespondedtothe relationship survey. collaboration andpartneringintheannualcustomer who rate AgResearch as‘good’ orbetterforeffective Percentage ofMāoriagribusinesspartnersandend-users AgResearch’s publiclyavailable collections. Number ofrequestsandenquiriesforaccessto Definition Definition past threeyears. AgResearch inthe or technologyfrom adopted knowledge stakeholders had 88% [95%]of other deals. 0 [6]licensingand (b) (c)…andexecuted royalty revenue. of $11.0m[$9.8m] group receivedatotal (a)The AgResearch $279k [$0.32m] 440 [270] 80%* [80%] its collection. [2,500] samplesfrom Centre issued1,792 Forage Germplasm The MargotForde Measure [target] Measure [target] 61 Performance indicators 62 Performance indicators As at30June2018 indicators(continued) Performance AgResearch-specific Operating AgResearch-specific Indicators of Research Collaborations and Linkages 4.3 4.2 4.1 ID Lincoln Hub) (formerly known as Blinc Innovation collaboration – Research collaboration Research International linkages Indicator Innovation and(b)othermeasuresunderdevelopment. (a) Additive AgResearch revenuereferabletoBlinc databases.) New Zealandpatent,plantvarietyrightandtrademark during thefinancialyearinIntellectualPropertyOffice Items (c)and(d)countIPthatwasrecordedas“accepted” (Data foritems(a)and(b)isreportedcalendaryears. research institutionsperannum. of IPoutputswithotherNewZealand orinternational reviewed publications;and(c)number(d)percentage (a) Numberand(b)percentageofjointscientificpeer- (Data forthisindicatorisreportedcalendaryears.) papers co-authoredwithaninternationalauthor. (a) Numberand(b)percentageofpeer-reviewedscientific Definition reported onseparately. benefits thatwillbe around potential been developed (b) Measureshave (a) $413k[$0.35m] outputs. of AgResearch’s 0IP (d) This was 0%[10%] the financialyear. organisations during outputs withother produced 0[1]IP (c) AgResearch publications. all AgResearch 89% [85%]of (b) This was institutions. international research with otherNZor papers co-authored Scopus-indexed published 249[250] (a) AgResearch calendar year. AgResearch duringthe papers publishedby of allScopus-indexed comprised 55%[50%] collaborators with international In 2017,papers calendar year. author inthe2017 least oneinternational co-authored withat indexed papers 154 [140]Scopus- AgResearch published Measure [target] 63 Performance indicators 64 Financial performance indicators For theyearended30June2018 indicators Financial performance Cash flow Operating Margin% Interest Coverage Quick Ratio Revenue Growth % Operating MarginperFTE$k that indicator. All otherindicatorsarebasedonthe Treasury-prescribed calculationswhichmaydifferfromnormalaccountingfor funds excluding assetrevaluation reserve,expressedasapercentage. tax(excludingAdjusted Returnfairvalue onEquity:Surplusafter movements netofassociatedtaximpact)÷ Average shareholder’s Indicator definitions: Equity Ratio% Capital Renewal Adjusted Return onEquity% Forecasting Risk% Operating Margin Volatility % • • • • • • • Net cashflow fromfinancingactivities$k Net cashflow frominvesting activities$k Net cashflow fromoperatingactivities$k Cash attheendofyear$k Cash atthebeginningofyear$k Effect ofexchange ratechanges$k Total netcashflow $k Actual 2018 (23,329) (12,759) 10,570 46,316 59,043 (1.7%) (0.3%) 81.9% 38.9% 3.0% 1.2% 151 2.8 7.0 2.4 32 - Budget 2018 (46,247) (42,474) (2.1%) (0.3%) (6.1%) 49,537 85.1% 38.6% 3,773 7,063 (0.6) 999 n/a 2.0 4.3 - - Actual 2017 (18,115) 20,080 59,043 57,087 83.7% 34.5% 1,965 2,528 0.6% 8.7% 3.6% 0.3% 20.4 3.7 1.8 (9) - in thousandsofNewZealand dollars For theyearended30June2018 income Consolidated statementofcomprehensive Ministry ofBusiness, Innovation andEmployment Revenue Other revenue Farm produce Commercial Operating expenditure Total revenue operating Other gains/(losses) Share ofdeficitassociates Finance costs Tax expense/(benefit) before tax Surplus/(deficit) Revaluation ofproperties or deficit: Items thatwillnotbereclassifiedsubsequentlytosurplus Other comprehensiveincome taxfortheyear Net surplus/(deficit)after Changes in fair value of available-for-sale financial assets or deficit: Items thatmaybereclassifiedsubsequentlytosurplus comprehensive income Income taxrelatingtocomponentsofother The statementofaccountingpoliciesandtheaccompanying notesformanintegralpartofthesefinancialstatements. Equity holdersoftheparent Total comprehensiveincomeisattributableto: Equity holdersoftheparent Net surplus/(deficit)isattributableto: Total comprehensiveincomefortheyearnetoftax Other comprehensiveincomefortheyearnetoftax • • • Other Our Land& Water NationalScienceChallenge Strategic sciencefunding Note 1 2 3 4 5 7 5 5 Actual 2018 (148,017) 145,781 (1,836) (1,005) (1,005) (5,231) 57,155 21,766 38,889 16,716 19,431 12,915 12,915 13,920 4,632 6,623 1,147 (719) (831) (280) (28) Budget 2018 (151,842) (11,395) 141,247 (8,438) (2,957) 56,027 19,487 38,889 13,932 6,289 6,623 8,499 8,438 8,499 (800) 61 61 - - - - Actual 2017 (142,546) 148,266 59,506 21,874 38,889 16,116 5,386 6,495 1,117 6,155 4,648 1,507 4,134 8,732 4,648 8,732 4,084 (677) (317) 267 (5) 65 Consolidated financial statements 66 Consolidated financial statements 23 August 2018 23 August Acting Chair Dr Paul Reynolds in thousandsofNewZealand dollars As at30June2018 position Consolidated statementoffinancial Trade andotherreceivables Cash andcashequivalents Current assets Biological assets-livestock Prepayments Property heldforsale Derivative financialinstruments Inventory Current tax Investments inassociatesandjointventures Non-current assets Total currentassets Other investments Property, plantandequipment Biological assets-forestry Other non-currentreceivables Goodwill Intangible assets Trade andotherpayables Current liabilities Less: Total assets Total non-currentassets Derivative financialinstruments Provisions Finance leases–current Current tax Other currentliabilities Deferred tax Non-current liabilities Total currentliabilities Other non-currentliabilities Provisions -non-current Share capital Equity Net assets Total liabilities Total non-currentliabilities Revaluation reserves Retained earnings The statementofaccountingpoliciesand theaccompanying notesformanintegralpartofthesefinancialstatements. Total equity 23 August 2018 23 August Director Kim Wallace Note 10 12 11 13 16 14 15 14 8 5 4 7 9 5 5 6 6
Actual 2018 193,852 249,019 102,880 249,019 309,585 220,421 46,316 33,613 89,164 15,905 16,765 47,268 98,871 15,370 37,454 43,801 60,566 2,067 1,059 4,611 3,667 4,536 1,043 6,314 763 677 965 988 826 58 33 34 - - - Budget 2018 217,738 271,980 232,551 229,869 229,869 22,468 39,429 21,413 26,836 14,596 42,111 15,275 47,268 96,081 86,520 7,063 2,561 3,800 2,688 5,607 3,409 4,528 4,946 849 727 542 477 631 48 ------Actual 2017 167,447 282,593 186,018 236,104 236,104 59,043 29,665 96,575 27,835 34,530 11,240 46,489 11,959 47,268 89,074 99,762 2,162 1,173 4,487 5,607 7,052 4,341 5,103 1,461 727 844 685 45 67 60 34 4 - - - The statementofaccountingpoliciesandtheaccompanying notesformanintegralpartofthese financialstatements. Balance at30June2018 Total comprehensiveincome comprehensive income Income taxrelatingtocomponentsofother Transfer ofrevaluation reserveonsoldassets Changes in fair value of available-for-sale financial assets Revaluation ofproperties Deficit after taxfortheyear Deficit after Balance at30June2017 Total comprehensiveincome comprehensive income Income taxrelatingtocomponentsofother Transfer ofrevaluation reserveonsoldassets Changes in fair value of available-for-sale financial assets Revaluation ofproperties Surplus after taxfortheyear Surplus after Balance at1July2016 in thousandsofNewZealand dollars For theyearended30June2018 Consolidated statementofchangesinequity Note 5 6 5 7 5 6 5 7 47,268 47,268 47,268 capital Share ------Revaluation equipment plant and reserves, property, 102,211 (5,310) 14,007 19,431 88,204 84,314 3,890 4,134 (114) (244) - - - - - Available- for-sale assets (280) (201) (73) 669 870 189 267 681 (5) 79 - - - - - Retained earnings (1,005) 98,871 99,762 95,109 4,653 4,648 (891) 114 5 ------249,019 236,104 227,372 (5,231) (1,005) 12,915 19,431 equity 8,732 4,134 4,648 (317) (280) Total 267 - - 67 Consolidated financial statements 68 Consolidated financial statements in thousandsofNewZealand dollars For theyearended30June2018 Consolidated statementofcashflows Dividends received Interest received Receipts fromcustomers activities Cash receivedfromoperating Interest paid Income taxpaid Restructuring Payments tosuppliers Payments toemployees activities Cash disbursedonoperating Total activities cashreceivedfromoperating Net cash flow from operating activities Net cashflowfromoperating Total activities cashdisbursedonoperating biological assets Disposal ofproperty, plant&equipmentand Cash receivedfrominvesting activities Disposal ofinvestments andintangibleassets Total cashreceivedfrominvesting activities cash acquired Payment foracquisitionofsubsidiarynet Cash disbursedoninvesting activities cash heldinforeigncurrencies Effect ofexchange ratechangesonthebalanceof ofyear Cash atbeginning Total netcashflow Partner contributiontoresearchconsortiums The statementofaccountingpoliciesandtheaccompanying notesformanintegralpartofthesefinancialstatements. Cash atendofyear Net cashflowfrominvesting activities Total cashdisbursedoninvesting activities Purchase ofotherinvestments andintangibleassets biological assets Investment inproperty, plant&equipmentand Note 18 16 Actual 2018 (12,759) (23,329) 140,541 142,949 132,379 65,177 64,230 10,570 59,043 46,316 23,566 16,563 2,253 1,895 1,048 5,221 155 135 102 237 975 807 29 32 Budget 2018 (42,474) (46,247) 144,807 145,620 141,847 75,107 65,178 49,537 46,247 45,207 1,562 3,773 7,063 813 975 65 ------Actual 2017 (18,115) 153,949 156,202 136,122 72,319 62,793 20,080 57,087 59,043 19,543 2,089 1,188 1,428 1,965 8,723 9,844 164 248 757 240 976 (9) 5 - arrangement interests comprise the Group. the comprise interests arrangement joint and associates subsidiaries, Company, its 1989. The Act Finance Public 1992 the and Act Institutes Research 2013, Crown Act the Reporting 1993, Financial the Act Companies the of requirements the with in accordance prepared been have statements financial The Zealand. New of sector pastoral inthe development and research is activity principal its Institute, Research aCrown as Operating Zealand. inNew incorporated company liability is alimited Company) (the Limited AgResearch entity Reporting For theyearended30June2018 Statement ofaccountingpolicies • • • • 2018: 30 June at as effective yet not but issued were that interpretations and standards following the adopt to early not chosen has Group The 2017. June 30 ended year the for presented information 2018 June comparative 30 the and ended year the for statements financial the inpreparing applied been have follows as out set policies accounting The is reported. events other or transactions underlying the of substance the that so reliability, and relevance of concepts the satisfies information financial resulting the ensures that inamanner applied and selected are policies Accounting assets. for inexchange given consideration the of value fair the on based is Cost instruments. financial and assets non-current certain assets, biological of revaluation the for except cost, historical of basis the on prepared been have statements financial The preparation of Basis 2018. August 23 on Directors the by issue for authorised were statements financial The profit-orientated entities. TIER1 for as appropriate standards reporting financial applicable other (NZ and IFRS) Standards Reporting Financial to International Equivalents Zealand New the with comply They (NZ GAAP). Zealand in New Practice Accounting Accepted Generally with accordance in prepared been have statements financial The Statement of compliance • • • • periods beginning on or after 1 January 2018) 1January after or on beginning periods accounting for (effective Consideration’ Advance and Transactions Currency ‘Foreign NZ IFRIC 22 2018) January 1 after or on beginning periods accounting for (effective Property’ Investment of ‘Transfers 40 NZ IAS 2018) below 1 January -refer after or on beginning periods accounting for (effective Customers’ with Contracts NZ IFRS 15 from ‘Revenue 2018) below -refer 1January after or on beginning periods accounting for (effective Instruments’ NZ IFRS 9‘Financial
The Group will apply NZ 2019. IFRS 16 1July apply from will Group The value. low of leases and leases term short for exemption is an optional There contracts. lease most for asset of use right a and payments lease future reflecting liability a lease to recognise 17 alessee requires and inNZ IAS guidance the replaces NZ 16 IFRS Leases NZ IFRS 15. under is expected change No supplied. being services or goods the of control takes purchaser the when recognised are produce agricultural of Sales NZ IFRS 15. under is expected change No estimates. usage licensees’ upon is based recognition revenue Royalty minimal. be to is expected revenue Group’s recognised the on this of impact the but deferred, being recognition in revenue resulting contract the of completion on recognised revenue see will that contracts of is number asmall There adoption. standards the from is expected change little and apply will IFRS principles 15’s time over recognition contracts, of majority the For period. reporting the of end the at contract the of completion of stage to the reference by time over recognised is currently revenue research Commercial NZ of IFRS 15. adoption on proposed is change No assistance. Government of Disclosure and Grants Government for Accounting 20 NZ IAS under for is accounted accordingly and purposes research for aGrant to be Fund is considered (SSIF) Investment Science Strategic Zealand’s New from received Revenue is expected. change material no that are indications and revenue of recognition its on standard new the of impact the of assessment its is finalising Group The approach. retrospective 20181 July modified using the NZ IFRS 15 adopt will Group from The to acustomer. transfers service or agood of control when recognised is revenue that principle the upon is based and revenue of measurement and recognition the addresses Customers with Contracts NZ 15 from IFRS Revenue standard. the of implementation the of aresult as expected are changes significant no and provisioning debt and activities Group’s hedging the of an assessment conducted has 2018. 1July Management NZ IFRS 9from adopt will Group The accounting. hedge and assets financial of impairment liabilities, financial and assets financial of de-recognition and measurement classification, addresses the Instruments NZ 9Financial IFRS • • • • beginning on or after 1 January 2018). 1January after or on beginning periods accounting for (effective Treatments’ Tax Income over ‘Uncertainty NZ IFRIC 23 2019) 1January after or on beginning periods accounting for (effective NZ IFRS 16 ‘Leases’
69 Statement of accounting policies 70 Statement of accounting policies joint facility. Under the shareholders’ agreement for for agreement shareholders’ the Under facility. joint the manage and to own formed an entity Partnership, inLUAGRJF Limited ashareholding into converted be will Facility Joint AgResearch University Lincoln the of development building the with associated Costs and construction). design detailed design, concept scoping, and feasibility (i.e. project the of stage the on based are Campus Group’s Grasslands the at works other and Campus University’s Massey on situated Facility Science Food the of building to the relating costs of capitalisation The FFP. with associated projects to development relation in year the during incurred been have Various costs costs (FFP) related Programme Footprint Future are: statements, financial the in recognised amounts the on effect significant most the have that policies, accounting inapplying judgements critical and uncertainty estimation of areas significant about Information revision. the by affected periods inthe recognised are estimates to accounting Revisions basis. an ongoing on reviewed are assumptions underlying and estimates The estimates. these from differ may results Actual circumstances. the under reasonable to be believed are that factors other various and experience historical on based are assumptions associated and estimates The note. or policy accounting relevant inthe disclosed are statements, financial the to significant are estimates and assumptions where or complexity, or judgement of degree ahigher involving areas The policies. accounting Group’s the applying of process inthe judgement to exercise Directors the requires also It estimates. accounting critical certain of use the NZ IFRS requires with conforming statements financial of preparation The judgements and estimates accounting Critical Group. the on impact to amaterial have expected be would that and effective yet not are that standards other no are There originally own. The assets and liabilities of Farmax Farmax of liabilities and assets The own. originally not did it that Limited Farmax of shares issued the all acquired Limited 2018 June AgResearch 29th the On Acquisition of subsidiary the parties. by IP contributed to pre-existing rights ownership of retention and arrangement joint the of outputs and inputs economic to the rights parties’ the specify that arrangements contractual the of virtue by operation ajoint is considered Limited Innovation Grasslands Joint operation • • • of: virtue by Consortium the over influence significant has it as Group the of an associate as treated is Consortium Research Gas Greenhouse Pastoral influence Significant 38.7%. be will Group’s shareholding the Partnership, Limited the its undertaking science research for the consortia. consortia. the for research science undertaking its and funding; of provision the activities; Board inthe participation its
• • considered: Directors the judgement, their In making contracts. of completion of percentage the of inrespect judgement their exercised have Directors the recognised, to be revenue service the In determining Revenue recognition 7). note (refer method. cost replacement depreciated optimised using the valued been have these and basis amarket on revalued be cannot assets Some Standards. Valuation to International conform valuations The properties. similar for transactions recent of evidence to market reference by valuers, independent Limited, Darroch 2018 June 30 at by revalued were Buildings’ and Land ‘Campus classes equipment and plant property, The revaluation buildings and land Campus 7. note 2and innote appear made Impairments market exists. active no where flows cash future of value present net the on is inuse based value The inuse. value or to sell costs less value fair of higher is the amount recoverable the exists, impairment of an indication Where • • • • • • • that: indications are there whether to is given consideration In particular, impairment. of indications for assets other and investments review year, Directors each the date balance Before assets of Impairment loss. or profit associates of ashare as for accounted been has acquisition to prior profit Group’s Farmax’s of share The an associate. as for accounted was Farmax to this Prior 2018 June 16). 30 at note (refer statements financial these into consolidated been have Limited the probability that economic benefits associated associated benefits economic that probability the reliably; measured be could revenue contract total whether other relevant factors. and expected; than worse be, will or is, an asset of performance economic the reporting, internal from an asset; of life useful the reassessing and date, expected previously the before an asset of to dispose plans belongs, asset an to which operation the restructure or discontinue to plans idle, becoming asset the include changes These used. to be is expected or is used an asset inwhich, manner or to which, extent the impacts which future, near inthe place to take expected are or period, the during place taken have Group the on effect adverse an with changes significant the asset; of damage physical or obsolescence been has there materially; amount recoverable asset’s the decrease and inuse value an asset’s incalculating used rate discount the to affect likely are increases those and period, the during increased have investments on return of rates market other or rates interest market is dedicated; asset the to which market in the environment legal or economic market, technological, inthe future, near inthe place take will or period, the during place taken have changes significant declined; significantly has asset the of value market the
Accounting policies are changed only if the change is is change the if only changed are policies Accounting Changes in accounting policies financialstatements. these for as policies accounting same using the prepared been has budget The budget. expenditure capital and sheet balance income, comprehensive of statement is the of approval Board the that noting Board, the by approved those are figures budget The figures Budget values. fair their approximate to assumed are payables and receivables trade of adjustments credit estimated less value nominal The period. reporting the of end the at rates market exchange using forward determined is contracts exchange forward of value fair The instruments. financial remaining the for value fair determine to used are flows, cash discounted estimated as such techniques, Other date. balance each at existing conditions market on based are that assumptions makes and methods of avariety uses Group The techniques. using valuation is determined derivatives) over example, (for market inan active traded not are that instruments financial of value fair The price. ask current is the liabilities financial for price market quoted appropriate The price. bid current the is Group the by held assets financial for used price market quoted The period. reporting the of end the at prices market quoted on is based markets active in traded instruments financial of value fair The purposes. disclosure and measurement recognition, for estimated be must liabilities financial and assets financial of value fair The estimates Fair value is appropriate. year current inthe sale”, for otherwise, or “held as assets of classification the and considered been have standard the in outlined criteria the that satisfied are Directors the assets, Group’s non-current the of review Following 5). IFRS (NZ standard accounting Sale for Held Assets Current Non- the inapplying judgement their exercised have Directors the sale, for held as classified groups) to be (and disposal assets non-current the In determining sale for held assets Non-current inadvance. receivable/revenue uninvoiced an appropriate of recognition the with conjunction in is appropriate, year current inthe recognised revenue the that satisfied are Directors the end, year at inprogress Group’s contracts the of review Following • • estimates. prior with compared be could incurred costs actual the that so reliably measured and identified clearly be could contract to the attributable costs the whether and measured; reliably be could date balance at completion contract of stage the and contract the to complete costs the whether Group; the to flow will contract the with ‑ the ‑ counter counter
the period. the during policies inaccounting changes no were There information. relevant more and reliable more provides otherwise or interpretation or astandard by required A. below. out set are policies accounting significant remaining The note. corresponding inthe disclosed applicable) (where are statements financial the of presentation and preparation the in used policies accounting significant The Significant accountingpolicies Group’s accounting policies. Group’s accounting the with line into policies accounting their to bring of subsidiaries statements financial to the made are adjustments necessary, Company. When the of owners to the is attributed subsidiaries of income Company. Total the of comprehensive owners to the attributed are income comprehensive other of component each loss and or Profit subsidiary. the to control ceases Company the when date the until control gains Company the date the from Loss and Profit inthe included are year the during of disposed or acquired subsidiary a of expenses and income Specifically, subsidiary. the of control loses Company the when ceases and subsidiary the over control obtains Company the when begins a subsidiary of Consolidation • • • • power,including: it give to sufficient are investee inan rights voting Company’s the not or whether inassessing circumstances and facts relevant all consider Directors The unilaterally. investee the of activities relevant the to direct ability practical the it give to sufficient are rights voting the when investee the over power has it an investee, of rights voting the of amajority than less has Company the When above. listed control of elements three the of more or to one changes are there that indicate circumstances and facts if an investee controls Group the not or whether reassess Directors The • • • Company: the when is achieved Control subsidiaries. its and Company the by controlled entities and Company) (the Limited AgResearch comprise statements financial consolidated The consolidation of Basis shareholders’ meetings. shareholders’ previous at patterns voting including made, to be need decisions that time the at activities relevant the to direct ability current the have, not does or has, Company the that indicate that circumstances and facts additional any and arrangements; contractual other from arising rights parties; other or holders vote other Company, the by held rights voting potential holders; vote other the of holdings of dispersion size and to the relative rights voting of holding Company’s size the of the returns. its to affect power to its use ability the has and investee; the with involvement its from returns to variable rights, has or is exposed, investee; the over power has
71 Statement of accounting policies 72 Statement of accounting policies D. C. B.
financialstatements. consolidated the of presentation and preparation inthe employed are policies accounting Consistent full on consolidation. in eliminated are Group the of members between transactions to relating flows cash and expenses income, equity, liabilities, and assets intragroup All except for: arise, they which in period the Loss in and Profit the in recognised are differences Exchange retranslated. not are currency inaforeign cost historical of interms measured are that items Non-monetary determined. was value fair the when date the at prevailing rates the at currency functional to the retranslated are currencies inforeign denominated are that value fair at carried items Non-monetary period. reporting the of end the at prevailing rate the at currency functional to the retranslated are currencies foreign in denominated items monetary date, balance each At transactions. the of dates the at prevailing exchange of rates the at recorded are currencies) (foreign currency functional entity’s the than other incurrencies transactions entities, individual the of statements financial the In preparing statements. Group’s financial the for currency presentation the and Group the of currency functional is the which (NZ$), dollars Zealand inNew expressed are entity group each of position financial and results the statements, Group’s financial the of purpose the For currency). functional (its operates entity the inwhich environment economic primary the of currency inthe presented are entity Group each of statements financial individual The Foreign currency is received. it year the Loss in and 2011July Profit inthe is recognised and 1 from commenced Crown the from funding) core (previously funding science Sustainable received. is it period inthe basis asystematic on loss or profit inthe income as is recognised funding to this relating grant Government The funding. the awards that agreement contractual the under defined as activities research undertake should Group the that is condition primary The Group. the of activities operating to the relating conditions certain with compliance future or past for inreturn Group to the resources of transfers of form inthe Government the by provided assistance are grants Government grants Government items. reclassified has it when or items, of restatement retrospective a makes retrospectively, policy an accounting applied has Group the when period, comparative earliest the of beginning the at as presented is Position Financial of aStatement addition, In is impracticable. reclassification the unless reclassified are amounts comparative is changed, items of classification or presentation the When Comparatives E. • • • interest rate method less impairment, with revenue revenue with impairment, less method rate interest effective using the cost amortised at recorded are maturity until or term long the for held being of intention the with purchased instruments Financial investments maturity to Held asset. financial the on earned interest or dividend any incorporates recognised loss or gain net The arise. they which in period the Loss in and Profit inthe included are value fair inthe changes from arising losses and Gains value. fair at initially recognised are Loss and Profit the through value fair at assets Financial instrument. hedging as a effective and designated not are they if trading for held as categorised are Derivatives management. by designated so if or term short the in selling of purpose the for principally acquired if category this in classified is asset A financial • • sub-categories: two has category This loss and profit the through value fair at assets Financial recognition. initial of time the at determined is and assets financial the of purpose and nature the on depends classification The • • • • categories: specified following the into classified are assets financial Other value. fair at measured initially are Loss”, and which Profit the through value “at fair as classified assets financial those for except costs, transaction plus value, fair at measured initially are Investments concerned. market the by established timeframe the within investment the of delivery require terms whose acontract is under investment an of sale or purchase the where date trade on derecognised and recognised are Investments Financial assets net investment. net the of disposal on loss or inprofit recognised and reserve translation currency foreign in the recognised are which and operation, in aforeign investment net the of part form to occur, which likely nor planned is neither settlement which for operation to aforeign payable or from receivable items monetary on differences exchange and risks; currency foreign certain to hedge inorder into entered transactions on differences exchange borrowings; currency foreign on costs interest to an adjustment as regarded are they when assets those of cost inthe included are which use, productive future for construction under assets to relate which differences exchange Profit and Loss at inception. at inception. Loss and Profit the through value fair at designated those and trading; for held assets financial receivables. and loans and assets; financial ‘available-for-sale’ investments; to maturity held Loss; and Profit the through value fair at assets financial
impairment. of evidence objective to be is considered cost its below security the of value fair the in decline prolonged or a significant as available-for-sale, classified shares unlisted For been impacted. have investment the of flows cash future estimated the assets, financial the of recognition initial the after occurred that events more or one of aresult as that, evidence is objective there where impaired are assets Financial period. reporting each of end the at impairment of indicators for assessed are loss, or profit through value fair at for accounted those than other assets, Financial assets financial of Impairment rate. interest effective the applying by is recognised income Interest impairment. less method interest effective using the cost amortised at stated are receivables and Loans market. inan active quoted not are that payments determinable or fixed with assets financial non-derivative are receivables and Loans Loans and receivables realised. until recognised not are loss revaluation recognised apreviously of areversal not are that gains Revaluation arise. they as investments individual on losses revaluation recognises Group The guidelines. valuation Capital Venture and Equity Private International using the Fund Manager the by valued individually are investments Portfolio investments Portfolio period. the for loss or inprofit is included reserve revaluation available-for-sale inthe recognised previously loss or gain cumulative the is impaired, or of is disposed investment the Where Loss. and Profit the loss in or profit to the directly recognised are which assets, monetary on losses and gains exchange foreign and method interest effective using the calculated interest losses, impairment of exception the with reserve, revaluation for-sale available- the in accumulated Loss and and Profit the in income” comprehensive “other within recognised are value infair changes from arising losses Gains or impairment. less value fair at stated are and available-for-sale being as classified are Group the by held shares Certain categories. other the of in any classified not or category inthis designated either are that non-derivatives are assets financial Available-for-sale assets financial Available-for-sale asset. financial the of amount carrying net to the period, ashorter appropriate, where or, asset financial the of life expected the through receipts cash future estimated discounts exactly that rate the is rate interest effective The period. relevant the over income interest allocating of and asset afinancial of cost amortised the calculating of method is a method interest effective The basis. yield an effective on recognised recognised in profit or loss. or inprofit recognised are value fair inthe changes and instrument the of quality credit the reflects value fair their as impairment for assessed not loss are or profit through value fair at for accounted assets Financial value fair at carried Assets reserve. available-for-sale inthe accumulated and income comprehensive inother is recognised loss to an impairment subsequent value infair increase Any loss. or profit through reversed not loss are or profit though recognised previously losses impairment instruments, equity available-for-sale of In respect recognised. been not impairment the had been have would cost amortised the what exceed not does is reversed impairment the date the at investment the of amount carrying the that extent the Loss to and Profit the through reversed is loss impairment recognised previously the recognised, was impairment the after occurring to an event objectively related be can decrease the and decreases loss impairment the of amount the period, inasubsequent if instruments, equity available-for-sale of exception the With Loss. and Profit inthe recognised are account allowance the of amount carrying the in Changes account. allowance the against credited are off written previously amounts of recoveries Subsequent Loss. and Profit the through off written is it uncollectible, is considered receivable trade a When account. an allowance of use the through is reduced amount carrying the where receivables, trade of exception the with assets, financial all for directly loss impairment the by reduced is asset financial the of amount carrying The rate. effective original asset’s financial the at discounted flows, cash future estimated of value present the and amount carrying asset’s the between difference is the impairment the of amount the cost, at amortised carried assets financial For with default on receivables. national economic or local conditions that correlate in changes observable as well as days, 60 of period credit average the past portfolio inthe payments delayed of number inthe an increase payments, collecting of experience Group’s past the include could receivables of aportfolio for impairment of evidence Objective basis. acollective on impairment for assessed are individually impaired to be not as trade receivables, assets that are assessed such assets, financial of categories certain For • • • include: could impairment of evidence objective receivables, lease finance and as available-for-sale classified notes redeemable including assets, financial other all For bankruptcy or financial re-organisation. financial or bankruptcy enter will borrower the that probable becoming it or payments; principal or ininterest delinquency or default or counterparty; or theissuer of difficulty financial significant 73 Statement of accounting policies 74 Statement of accounting policies F. H. G.
• • • demonstrated:been have conditions following the of all unless incurred period inthe is expensed expenditure Development only. asset the of phase expenditurerepresents incurred in the development asset intangible generated an internally of cost The incurred. period inthe is expensed expenditure research research and development expenditure Internally generated intangible assets – incurred. as an expense as recognised are programs software computer maintaining with associated basis). line Costs straight on a years five and three (between lives useful estimated their over amortised are costs These software. specific to the use bring and to acquire incurred costs the of basis the on capitalised are licences software computer Acquired period. reporting annual each of end the at is reviewed method amortisation and life useful estimated 15 5and The years. between varies which lives, useful estimated their over is charged Amortisation losses. impairment accumulated and amortisation accumulated less cost at recorded patents, trademarks andproperty, licences are intellectual as such assets intangible Purchased assets intangible Purchased assets Intangible obligation. lease finance a as position financial of statement consolidated the in is included lessor to the liability corresponding The payments. lease minimum the of value present or, the at lower, if lease the of inception the at value fair their at Group the of assets as recognised initially are leases finance under held Assets term. lease the over instalments inequal loss or in profit included are payments lease Operating lessee as Group term. lease the over instalments inequal loss or in profit included are receipts lease Operating asGroup lessor leases. operating as classified are leases other All lessee. to the ownership of rewards and risks the all substantially transfer lease the of terms the whenever leases finance as classified are Leases assets Leased harvest. of point the at costs point-of-sale estimated less value fair at is measured produce agricultural harvested of cost The value. realisable net and basis, out’ first in, a‘first on determined cost, of lower the at valued are Inventories Inventories attributable to the intangible asset during its its during asset intangible to the attributable expenditure the reliably to measure ability the benefits; economic future generate will created asset the how it; sell or use and asset intangible the to complete intention the
I. Loss in the period in which the transaction occurs. transaction the inwhich period inthe Loss and Profit inthe recognised are assets intangible of disposal from arising losses and gains Realised assets intangible of Disposal asset. of class a for not asset, intangible each for are Revaluations losses. impairment accumulated any less value fair being amount, arevalued at is recorded asset the impairment, of is an indication there Whenever impairment. for annually least at tested are but amortised, not are lives useful indefinite with Assets intangibleOther assets years). five (not exceeding lives useful estimated their over amortised are assets as recognised costs development software Computer overheads. relevant of portion an appropriate and include development the software employee costs costs Direct assets. intangible as recognised are year, one beyond costs exceeding benefits economic generate probably will that and Group, the by controlled products software unique and identifiable of production the with associated directly are development that costs Computer software years. seven and five between are periods future These accrue. to expected are benefits which from periods future over basis line astraight on amortised are above criteria recognition asset the satisfy that assets intangible generated Internally • immediately, unless the relevant asset is carried at a a at is carried asset relevant the unless immediately, Loss and Profit inthe is recognised loss impairment An inuse. value and to sell cost less value fair asset’s an of higher is the amount recoverable The amount. recoverable to its unit) is reduced (cash-generating asset the of amount carrying the amount, carrying its than less to be unit) is estimated generating (or cash- an asset of amount recoverable If the reversed. subsequently is not goodwill of impairment An impaired. be may asset the that is an indication there whenever and annually impairment for tested are use for available yet not assets intangible and lives useful indefinite with assets intangible Goodwill, belongs. asset the to which unit cash-generating the of amount recoverable the estimates Group the assets, other from independent are that flows cash generate not does asset the any). (if loss Where impairment the of extent the to determine order in is estimated assets the of amount recoverable the exists, indication such If any loss. impairment an suffered have assets those that indication is any there whether to determine depreciation or to amortisation subject are that assets intangible and tangible its of amounts carrying the reviews Group the date, reporting each At assets of Impairment intangible asset. intangible the sell to or use and development the to complete resources other and financial technical, adequate of availability the development; anddevelopment;
L. K. J. contributions as part of payroll costs. payroll of part as contributions employee with inline scheme KiwiSaver to the percentage aspecified is to contribute Group the of obligation only The scheme. KiwiSaver the to join elect can Group the of employees All incurred. when expensed are Plan the to Group’s The contributions benefits. future for liability contribution financial or legal no has Group the and Crown the by generated are benefits Plan.Future Superannuation Benefit Defined Crown the of apart are employees of number A small plan contribution Defined payable. or paid rates the at increase. a revaluation as is treated reversal loss impairment the case which in amount, arevalued at is carried asset relevant the unless Loss immediately, and Profit in the is recognised loss an impairment of A reversal years. unit) inprior (cash-generating asset the for recognised been loss impairment no had determined been have would that amount carrying the exceed not does amount carrying increased the that extent to the only but amount, recoverable its of estimate revised to the unit) is increased (cash-generating asset the of amount carrying the reverses, subsequently loss an impairment Where decrease. revaluation as a treated is first loss impairment the case inwhich amount, revalued cash. into convertible readily investments liquid highly other and deposits demand inbanks, cash hand, on cash include equivalents cash and Cash equivalents cash and Cash flows cash of Statement GST. include that payables and receivables of exception the with basis exclusive on a GST- prepared are statements financial The (GST) tax services and Goods measured and is taken leave the when recognised are leave sick non-accumulating for Liabilities liabilities. current non- as recorded are and date toup reporting employees by provided services of in respect Group the by made be to outflows cash future estimated the of value present the at measured 12 are within months settled to be expected not are that benefits employee for Provision liabilities. current as recorded are and date reporting the at as rates remuneration using the values nominal their at 12 measured are within months settled be to expected benefits employee for Provision reliably. measured being of capable are they and made be will settlement that probable is it where leave sick and leave/gratuities retirement leave, annual salaries, and wages of in respect employees to accruing benefits for is made Provision benefits Employee
N. M. Group. the of structure debt and equity inthe changes to relating activities those are activities Financing activities Financing assets. non-current other any and investments non-current and current of disposal and acquisition to the relating activities those are activities Investing Investing activities activities. financing or investing not are that events other and transactions all include activities Operating activities Operating had an impact on these financial statements. financial these on an impact had interpretations and standards amended and new the of None Group. to the applicable interpretations and standards amended and new mandatory all adopted has Group the year current In the period current the in effective interpretations and Standards 31 2018. January at as rates future risk-free Treasury-issued using the discounted are payments future Expected injuries. and claims employee of experience and levels salary and wage future to expected is given Consideration techniques. using actuarial date reporting toup the claims and injuries employee the of inrespect made to be payments future expected of value present the as measured ACC and provision inthe recognised is Programme ACC Partnership the for liability The to ACC. back passes point that from claims ongoing for liability the and claims, residual of value to ACC the apremium for pays Group the period, year four the of end the At maximum. a specified to up years four of aperiod for costs claim its all for is liable Group the Programme, Partnership the Under Programme. Partnership (ACC) Corporation’s Compensation Accident the of is part Group The contracts Insurance 75 Statement of accounting policies 76 Notes to financial statements Interest Other revenue in thousandsofNewZealand dollars Interest revenueisrecognisedonatimeproportionatebasisthattakes intoaccounttheeffectiveyieldonfinancialasset. Dividend revenuefrominvestments isrecognisedinthefinancialperiodwhichrightto receivepaymentisestablished. Dividend andinterestrevenue provided bylicensees. Royalty revenueisrecognisedon anaccrualbasisinaccordancewiththesubstanceofrelevant agreementandusagevolumes Royalties estimated totalcontractcosts. reporting period. The stageofcompletion istheproportionthatcontractcostsincurredforworkperformedtodatebear Revenue fromacontracttoprovide servicesisrecognisedbyreferencetothestageofcompletioncontractatend ofthe Rendering ofservices ownership ofthegoods. Revenue fromthesaleofgoodsisrecognisedwhenGrouphastransferredtobuyersignificantrisks andrewards of Sale ofgoods total contractcosts. period. The stageofcompletionistheproportionthatcontractcostsincurredforworkperformedtodatebearestimated bought toaccountasservicesareprovided, basedupontheproportionofcompletioncontractatendreporting Revenue receivedinrespectof“OurLandand Water” nationalsciencechallengefundingisaccountedforasresearchrevenueand National ScienceChallengefunding and isaccountedforunderNZIAS20, Accounting forGovernment GrantsandDisclosureofGovernment Assistance. Revenue receivedforNewZealand’s StrategicScienceInvestment Fund (SSIF)isconsideredtobeagrantforresearchpurposes Government grants Revenue Recognition 1. For theyearended30June2018 financial statements Notes toandformingpartoftheconsolidated in thousandsofNewZealand dollars 2. Royalties Dividends Rent Salary andwages Employee related Defined contributionplans Depreciation Amortisation ofintangibleassets Operational Operating leaseexpenses Other operatingexpenses Science 3rdpartysub-contracts Site andpropertyexpenses Supplies Revenue Operating expenditure Operating Note 7 11,034 16,716 63,986 24,637 21,193 14,116 2,118 3,408 1,677 9,301 2,919 6,797 2018 2018 156 348 10,461 16,116 61,465 21,550 23,365 12,543 2,312 3,179 1,638 9,595 3,025 5,806 2017 2017 164 360 in thousandsofNewZealand dollars 2. the goodwillmaybeimpaired,any impairmentisrecognised immediatelyintheProfitandLossisnotsubsequentlyreversed. of theinvestment. The goodwillisassessedannuallyforimpairmentaspartoftheinvestment. Whenever thereisanindicationthat value oftheidentifiableassetsandliabilitiesinvestee isrecognised asgoodwill,whichisincludedwithinthecarryingamount On acquisitionoftheinvestment inanassociate,any excess ofthecostinvestment over theGroup’s shareofthenetfair An investment in anassociateisaccountedforusingtheequitymethodfromdateonwhichinvestee becomesanassociate. constructive obligationsormadepaymentsonbehalfoftheassociate. recognising itsshareoffurtherlosses. Additional lossesarerecognisedonlytotheextentthatGrouphasincurredlegalor associate. When theGroup’s shareoflossesanassociateexceeds theGroup’s interestinthatassociate,theGroupdiscontinues torecognisetheGroup’sat costandadjustedthereafter shareoftheprofitorlossandothercomprehensiveincome Under theequitymethod,aninvestment inanassociateisinitiallyrecognisedtheconsolidatedStatementofFinancialPosition investment, ora portionthereof, isclassified asheldforsale,inwhichcaseitisaccountedaccordancewithNZIFRS5. The GroupfinancialstatementsincorporatetheGroup’s interestsinassociatesusingtheequitymethod,except whenthe financial andoperatingpolicydecisionsoftheinvestee, butdoesnotcontrolorhave jointcontrol over thosepolicies. An associateisanentityover whichtheGroup hasthecapacitytoexercise significantinfluencethroughparticipationinthe 4. in thousandsofNewZealand dollars 3. Change infairvalue offorestry Net gain/(loss)onsaleofinvestments Net gain/(loss)onsaleofproperty, plantandequipment Change inprovision fordoubtfuldebts Bad debts Auditor’s remuneration-forservicesasauditor Change infairvalue ofderivative financialinstruments Net gain/(loss)fromforeigncurrencyexchange Financial andlegalexpenses Impairment ofinvestments Impairments andwritedowns/(writebacks) Donations Directors’ fees Change infairvalue oflivestock Impairment/(write back)ofavailable-for-sale financialassets Change infairvalue offinancialassetsdesignatedatfair value Impairment ofETS units Impairment ofproperty, plantandequipment Operating expenditure (continued) expenditure Operating Investments andjointventures inassociates Other gains/(losses) Note Note 11 10 12 11 8 7 148,017 2,340 1,147 2018 2018 269 126 333 238 269 398 93 23 91 1 2 7 - - - - 142,546 2,550 1,117 (371) (251) 2017 2017 (26) (18) 165 370 266 275 324 103 221 618 31 59 - - 77 Notes to financial statements 78 Notes to financial statements Farmax Limited* [PPGR Consortia] Limited Consortium heldvia AgResearch Pastoral GreenhouseGasResearch Biopolymer NetworkLimited DEEResearch Limited Limited Velvet Antler Research NewZealand Clone InternationalPtyLimited companies Associate Encoate HoldingsLimited Partnership Southern DairyHubLimited LUAGRJF GPLimited LUAGRJF LimitedPartnership** Overseer Limited Lincoln HubLimited) Blinc Innovation Limited(formerly All oftheabove associates are accountedforintheseconsolidated financialstatementsusingtheequity method. Partnership was $9.682m. to investments inassociates(refernote12). At 30June2018thetotalspendassociated withtheinvestment intheLimited ** As aresultoftheformationLUAGRJF Limited Partnership, theGrouphasreclassified$3.031mfromother investments been reclassifiedasasubsidiary(see notes 16and17). * On29June2018, AgResearch Limitedacquiredthe50%shareholdingitdidnotalready own inFarmax LimitedandFarmax has SDH GPLimited to theGroup. are recognisedintheGroup’s consolidated financialstatementsonlytotheextentofinterestsinassociatethatarenotrelated When aGroupentitytransactswithanassociateoftheGroup,profitsandlossesresultingfromtransactionsssociate income relatingtothatreductioninownership interestistaken totheProfitandLoss. assets orliabilities. Where itdoes, theproportionofgainorlossthathadpreviouslybeenrecognisedinothercomprehensive recognised gainsorlosses. ItdoessoifthatgainorlosswouldbereclassifiedtotheProfitandLossondisposalofrelated previously When theGroupreducesitsownership interestinanassociatebutcontinuestousetheequitymethod,itmayreclassify (as areclassificationadjustment)whentheequitymethodisdiscontinued. to profitorlossonthedisposalofrelatedassetsliabilities, theGroupreclassifiesgainorlossfromequitytoprofit liabilities. Therefore, ifagainorlosspreviouslyrecognisedin other comprehensiveincomebythatassociatewouldbereclassified in relationtothatassociateonthesamebasisaswouldberequiredifhaddirectlydisposedofrelatedassetsor disposal oftheassociate.Inaddition,Groupaccountsforallamountspreviouslyrecognisedinothercomprehensiveincome interest andany proceedsfromdisposingofapartinterestintheassociateisincludeddeterminationgainorlosson between thecarryingamountofassociateatdateequitymethodwas discontinued,andthefairvalue ofany retained financial asset,theGroupmeasuresretainedinterestatfairvalue atthatdateinaccordancewithNZIAS39. The difference investment isclassifiedasheldforsale. WhentheGroupretains aninterestintheformerassociateandretainedisa The Groupdiscontinuestheuseofequitymethodfromdateaninvestment ceasestobeanassociate,orwhenthe Group andinvestee iseliminated. associates. InassessingtheGroup’s shareofearningsassociates, theGroup’s shareofany unrealisedsurplusesbetweenthe reserves areincreasedbytheGroup’s shareofthepost-acquisitionretainedsurplusandotherreserves recognised directlyagainstthecarryingvalue oftheinvestment. IntheStatementofFinancialPosition, theinvestment andthe recognises itsshareofotherpost-acquisitionmovements inreserveswithinequity. Dividendsreceivedfromassociatesare share ofanassociate’s profitorlossisadjustedtoaligntheaccountingpoliciesofinvestee withthatoftheGroup. TheGroup The Grouprecognisesitsshareofanassociate’s postacquisitionnetprofitorlossfortheyearinitsProfitandLoss. TheGroup’s reassessment,isrecognisedintheProfitandLossperiodwhichinvestment isacquired. after Any excess oftheGroup’s shareofthenetfairvalue oftheidentifiableassetsandliabilities over thecostofinvestment, 4. Investments andjointventures(continued) inassociates 30 September 31 December 31 December 31 December Balance date 30 June 30 June 30 June 30 June 30 June 30 June 30 June 31 May 31 May % ofownershipinterest and voting power held and votingpower 2018 38.7 38.7 37.5 37.5 22 33 50 50 25 20 50 50 - by theGroup 2017 37.5 37.5 21 33 50 50 25 50 20 50 50 - - intellectual property produced byruminantsandexploitany resulting To undertake researchintogreenhousegases bio-based products Research anddevelopmentofhigh-performance (except deervelvet) farming andprocessingfordeerproducts Research anddevelopmentrelevant todeer and commercialisingtheintellectualproperty Managing investments invelvetantlerresearch Cloning highvalue horses, cattleandsheep Principal activity management software Development anddistributionoffarm in NewZealand andinternationally opportunities togrow asustainableagri-sector Deliver agri-sectorresearchandeducation stabilisation technologies To researchanddevelopbacteriaprobiotics General partner Lincoln University manage ajointfacilitiesbuildingtogetherwith Operating entitysetuptodevelop,own and Overseer modeltoend-users Operating entitysetuptosub-licensethe General partner good activities Promotion anddevelopmentofdairyindustry Group anditisprobablethatthetemporary differencewillnotreverseinthefuture. in jointventureoperationsarerecognised, except wherethetimingofreversal the temporarydifferenceiscontrolledby Foreign deferredtaxassets thatresultfromoperatinglossesinrespectofsubsidiaries, associates, jointventureentitiesorinterests deferred taxexpenseorincome. Exchange differencesondeferredforeigntaxliabilities orassetsrecognisedintheProfitandLossforperiodareclassifiedas Foreign taxliabilitiesandassets • • Current anddeferredtaxisrecognisedasanexpenseorincomeintheProfitLoss, except when: Current anddeferredtaxfortheperiod Group intendstosettleitscurrenttaxassetsandliabilitiesonanetbasis. Deferred taxassetsandliabilitiesareoffsetwhentheyrelatetotheincometaxes leviedbythesametaxation authorityandthe liabilities. from themannerinwhichGroupexpects, atthereportingdate,torecover orsettlethecarryingamountofitsassetsand enacted byreportingdate. The measurement ofdeferredtaxliabilitiesandassetsreflectstheconsequencesthatwouldfollow liabilities givingrisetothemarerealisedorsettled,basedontaxrates(andlaws) thathave beenenactedorsubstantively Deferred taxassetsandliabilitiesaremeasuredattheratesthatexpectedtoapplyperiod(s)when utilise thebenefitsoftemporarydifferencesandtheyareexpectedtoreverseinforeseeablefuture. with theseinterestsareonlyrecognisedtotheextentthatitisprobabletherewillbesufficienttaxableprofitsagainstwhich differences willnotreverseintheforeseeablefuture.Deferredtaxassetsarisingfromdeductibletemporaryassociated ventures except wheretheGroupisabletocontrolreversaloftemporarydifferencesanditprobablethat Deferred taxliabilitiesarerecognisedfortaxabletemporarydifferencesarisingoninvestments insubsidiaries, associatesand joint relation totaxabletemporarydifferencesarisingfromgoodwill. combination) thataffectsneithertaxableincomenoraccountingprofit. Furthermore, adeferredtaxliabilityisnotrecognisedin differences givingrisetothemarisefromtheinitialrecognitionofassetsandliabilities(otherthanasaresultbusiness tax offsets(forexample,losses)canbeutilised.However, deferredtaxassetsandliabilitiesare notrecognisedifthetemporary extent thatitisprobablesufficienttaxableamountswillbeavailable againstwhichdeductibletemporarydifferencesorunused In principle,deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferences. Deferred taxassetsarerecognisedtothe those items. from differencesbetweenthecarryingamountofassetsandliabilitiesinfinancialstatementscorrespondingtaxbase Deferred taxisaccountedforusingthecomprehensivebalancesheetliabilitymethodinrespectoftemporarydifferencesarising Deferred tax Current taxforcurrentandpriorperiodsisrecognisedasaliability(orasset)totheextentthatitunpaidrefundable). loss fortheperiod.Itiscalculatedusingtaxratesandlaws thathave beenenactedorsubstantivelybyreportingdate. Current taxiscalculatedbyreferencetotheamountofincometaxes payable orrecoverable in respectofthetaxableprofitortax Current tax 5. in thousandsofNewZealand dollars andjointventures Summarised financialinformationforassociates All associatesareprivate entitiesandthereisnoquotedmarket priceavailable fortheinvestments. are norestrictionsontheabilityofany associatetopaydividends, repayloansorotherwisetransferfundstotheinvestor company. All associatesareincorporatedinNewZealand except forCloneInternationalPtyLimited,whichisincorporatedin Australia. There 4. Share ofprofit/(loss)fromcontinuingoperations income Share oftotalcomprehensive associate investments Aggregate carryingamountoftheGroupandCompany’s interestinthe ventures Aggregate carryingamountoftheGroupandCompany’s interestinthejoint goodwill orexcess. it arisesfromtheinitialaccountingforabusinesscombination,inwhichcase itistaken intoaccountinthedeterminationof it relatestoitemsrecognisedinequity, inwhich casethedeferredtaxorcurrentisalsorecogniseddirectlyinequity; Taxation Investments andjointventures(continued) inassociates 14,756 15,370 (719) (719) 2018 614 5,026 5,607 (677) (677) 2017 581 79 Notes to financial statements 80 Notes to financial statements Net currenttax(liability)/asset Income taxpayable Current taxliabilities/assets Benefit ofcurrentyeartaxlosses Tax refundreceivable Current taxassets Current taxassetsandliabilities in thousandsofNewZealand dollars Total deferredtaxrecogniseddirectlyinothercomprehensiveincome Revaluations ofavailable-for-sale financialassets Property revaluations Arising onincomeandexpensestaken directlytoequity: Deferred tax Income taxrecogniseddirectlyinothercomprehensiveincome in thousandsofNewZealand dollars recognisedinprofitorloss Income taxexpense/(benefit) tax ofprioryears Adjustments recognisedinthecurrentyearrelationtoanddeferred Non-assessable capital(gain)/loss Associates’ resultsreportednetoftax Effect ofimpairment(reversals)/lossesthatarenot(assessable)/deductible Effect ofexpensesthatarenotdeductible Foreign surplus/(deficit)notrecognisedfortax Total taxexpense/(benefit) Deferred taxexpenserelatingtotheoriginationandreversaloftemporarydifferences Adjustments recognisedinrelationtothecurrenttaxofprioryears Effect ofrevenuethatisexempt fromtax Income taxexpense/benefitcalculatedat28%(2017:28%) Surplus/(deficit) fromcontinuingoperations reconciledtotheaccounting profitasfollows: The totalchargefortheyearcanbe in thousandsofNewZealand dollars Current taxexpense Tax comprises: expense in thousandsofNewZealand dollars 5. Taxation (continued) (5,231) (5,310) (1,836) (831) (831) (831) (589) (453) (400) (514) 2018 2018 2018 2018 (90) 677 716 714 128 211 39 79 27 18 2 - - (1,461) 1,751 1,507 1,577 1,507 2,039 1,723 6,155 (317) (244) (930) 2017 2017 2017 2017 (73) (95) (55) (70) (23) (79) 290 290 398 30 76 - Available-for-sale financialassets in thousandsofNewZealand dollars Revaluation ofproperties 2017 Available-for-sale financialassets Revaluation ofproperties 2018 ofothercomprehensiveincome Income taxeffectsrelatingtoeachcomponent Tax losses Unused taxlossesandcredits Provisions Available-for-sale financialassets Intangible assets Property, plant&equipment Biological assets Temporary differences 2017 Tax losses Unused taxlossesandcredits Provisions Available-for-sale financialassets Intangible assets Property, plant&equipment in thousandsofNewZealand dollars 5. Biological assets Temporary differences 2018 Deferred taxassets/(liabilities)arisefromthefollowing: Taxation (continued) (11,853) (12,193) (14,243) (13,194) (11,240) (11,262) Opening Opening balance 1,591 1,129 1,467 1,224 (265) (405) (338) (421) 340 22 Charged to surplus 1,248 1,293 (318) (124) (167) (202) (16) (22) 930 589 611 143 839 (2) 95 - Before taxamount Charged toother comprehensive (5,310) (5,231) (5,231) income 19,151 19,431 4,401 4,134 (317) (280) (317) (244) (73) 267 79 ------Acquisitions/ Tax expense Disposals (5,310) (5,231) (317) (244) (73) (43) (23) (23) 79 20 ------Net oftax (11,240) (11,262) (13,194) (15,905) (15,905) (17,665) amount balance Closing 13,920 14,121 1,630 1,014 4,084 3,890 1,467 1,224 (338) (421) (201) (261) (623) 194 22 - 81 Notes to financial statements 82 Notes to financial statements • • • • • The following estimatedusefullivesareusedin thecalculationofdepreciation: directly toretainedearnings. the attributablerevaluation surplusremainingintheassetrevaluation reserve,netofany relateddeferredtaxes, istransferred Depreciation onrevalued buildingsischargedtotheProfitandLoss. Onthesubsequentsaleorretirementofarevalued property, annual reportingperiod. using thestraightlinemethod. The estimatedusefullives, residualvalues anddepreciationmethodarereviewedattheendofeach useful lives. Leaseholdimprovements aredepreciatedover theperiodofleaseorestimatedusefullife,whicheverisshorter, capital workinprogress, atdepreciation ratescalculatedtoallocatetheassets’costorotherrevalued amountover theirestimated Depreciation isprovided foronastraightlinebasisalltangibleproperty, plantandequipment, otherthanfreeholdlandand Capital workinprogressisrecordedatcost. All otherassetsarerecordedatcostlessaccumulateddepreciationandimpairment. of thatasset. and Losstotheextentthatitexceeds thebalance,ifany, heldintheassetrevaluation reserverelatingtoapreviousrevaluation A decreaseincarryingamountontherevaluation ofland,landimprovements andbuildingsischargedasanexpensein Profit expense in Profit and Loss, in which case the increase is credited to Profit and Loss to the extent of the decrease previously charged. revaluation reserve,except totheextentthatitreversesarevaluation decreaseforthesameassetpreviouslyrecognisedasan Any revaluation increasearising ontherevaluation ofland,landimprovements andbuildings isaccumulatedintheasset hierarchy isincludedinnote26. value ofland,landimprovements andbuildingsisnotmateriallydifferentfromtheirfair values. Informationaboutthefair value recognised inthefinancialstatementsofGroupandarereviewedatendeachreportingperiodtoensurethatcarrying are revalued atleasteverythreeyearsorwhenevertherehasbeenasignificantmovement inthefair value. Thefair values are subsequent accumulateddepreciationandimpairmentlosses. Land,landimprovements andbuildings valuation preparedbyexternalvaluation experts(usingeithermarket value oroptimiseddepreciatedreplacementcost),lessany Land, landimprovements andbuildingsaremeasuredatfairvalue. Fair value isdeterminedonthebasisofanindependent Fair valuemeasurement • • • • • • • • • The Grouphasthefollowing classesofproperty, plantandequipment: 7. Any impairmentlossorgainonthisrevaluation isrecognisedintheProfitandLoss. An assetisrevalued tothelower ofitscarryingamountorfair value lesscoststosell,whenitisclassifiedasheldforsale. retained earnings. the portionofassetrevaluation reserverelatingtothatasset,andwhichisthereforeeffectivelyrealised,transferreddirectly The assetrevaluation reservearisesontherevaluation ofland,landimprovements andbuildings. Where revalued assetsaresold, Reserves Capital consistsof47,268,000fullypaidordinaryshares$1.00each(2017:shares). Share capital 6. • • • Plant andequipment Vehicles 3–10years Leasehold improvements 3–40years Buildings (includingfarms)5–80years Land improvements 5–50years Capital Work inProgress Plant andEquipment Vehicles Leasehold Improvements Buildings –Farm Buildings –Campus Land Improvements Land –Farm Land –Campus Property, plantandequipment Equity Other plantandequipment3–15years Computer hardware 3–5years Dairy plantandequipment5–25years Impairment reversalthroughprofitand loss Impairment throughprofitandloss in thousandsofNewZealand dollars A netimpairmentdecreaseofassets$7k(2017:$59k)consistedof: revaluations reserve, beingareversalofprioryear Decreases throughtheassetrevaluation reserve Increases throughtheassetrevaluation in thousandsofNewZealand dollars A netrevaluation increaseofassets$19,431k(2017:$4,134)consistedof: Through theprofitandlossaccount reversal ofprioryearrevaluations Through theassetrevaluation reserve,beinga in thousandsofNewZealand dollars A totalwrite-down ofassets$1,301k(2017:$733k)was reflected: Balance atendofyear Accumulated depreciation Cost orvaluation Balance atendofyear Depreciation Reclassified as ‘Assets HeldforSale’ Impairments Revaluations Disposals Additions Balance atbeginningofyear 2017 in thousandsofNewZealand dollars Balance atendofyear Accumulated depreciation Cost orvaluation Balance atendofyear Depreciation Reclassified as ‘Assets HeldforSale’ Impairments Revaluation Disposals Additions Balance atbeginningofyear 2018 in thousandsofNewZealand dollars 7. Property, plantandequipment(continued) Improvements Land & (1,072) 80,545 80,545 76,688 77,760 76,688 73,438 80,984 76,688 3,699 2,945 2,382 (716) (439) (708) (763) (46) 313 1 - - - Buildings (10,390) (3,707) (4,283) (3,727) 92,614 92,614 72,511 82,901 72,511 72,380 96,897 16,486 72,511 3,461 7,352 (45) (13) 435 (8) - - - Improvements Leasehold (479) (499) (20) (20) 237 716 237 247 217 716 217 237 10 ------Equipment (76,031) (80,615) 100,964 (5,076) (4,802) Plant & 20,349 20,349 17,922 93,953 17,922 16,719 17,922 6,337 7,249 (58) (20) ------Vehicles 19,431 20,352 1,301 (470) (443) (380) (921) 2018 2018 2018 (76) (44) 373 380 921 559 160 127 570 127 (7) 89 89 82 89 5 ------(88,442) (86,279) 193,852 280,131 193,852 167,447 255,889 167,447 167,447 162,944 (9,595) (9,301) 19,431 17,065 10,126 4,134 4,802 4,134 (668) (763) 2017 2017 2017 Total (59) (65) (45) (59) (58) (20) 733 668 (7) 65 6 83 Notes to financial statements 84 Notes to financial statements in thousandsofNewZealand dollars 8. in thousandsofNewZealand dollars measured onahistoricalcostbasis, itscarryingamountwouldhave beenasfollows: Had theGroup's landandbuildings(otherthanclassifiedasheldforsaleorincludedinadisposalgroup)been 7. of defaults. The Groupdoesnotholdany collateralover thesebalances. The aginganalysis oftradereceivables isasfollows: $3,646k) werepastduebutnotimpaired. These relatetoanumberofindependentcustomersforwhomthereisnorecenthistory basis. The onlyreceivables impairedareprovided forwithindoubtfuldebts. As at30June2018,tradereceivables of$1,665k(2017: Terms oftradevary accordingtoindividualcustomercontracts. Trade receivables areassessed forimpairmentonanindividual There werenorelatedpartypastduereceivables at30June2018.(2017:$36k). The fairvalue oftradeandotherreceivables isapproximately equaltotheircarryingvalue. Net receivables Less provision fordoubtfuldebts Total receivables Receivables fromotherrelated parties Receivables fromassociates Trade receivables for obsolescenceandsurpluscapacity. based onanestimateofthecurrentgrossreplacementcostassetlessallowances forphysical deterioration,andoptimisation site improvements suchasroadsandfenceswellbuildings. Optimiseddepreciatedreplacementcostisamethodofvaluation Assets thathave aspecialisedusefortheGrouphave beenvalued atoptimiseddepreciatedreplacementcost. These assetsinclude • • • where thereisanactivemarket forthesameorasimilarasset,value isdeterminedbyoneormoreofthefollowing: Campus landandbuildingshave beenvalued usingeithermarket value oroptimiseddepreciatedreplacementcost.For assets Darroch LimitedundertherequirementsofNZIAS16Property, PlantandEquipment. Campus landandbuildingshave beenrevalued inthecurrent period. These valuations wereperformedbyindependentvaluers subsequent depreciationandimpairments. The Group’s landandbuildingsarestatedattheirrevalued amounts, beingthefairvalue atthedateofrevaluation, lessany Fair valuemeasurementoftheGroup’s landandbuildings Buildings Land andlandimprovements costapproach. income;and directcomparison; Trade andother receivables Property, plantandequipment(continued) 33,613 33,726 32,675 46,664 21,004 2018 2018 113 100 951 29,665 29,687 26,661 48,274 21,368 2,894 2017 2017 132 22 1 to2months Current 2018 2 to3months Past due in thousandsofNewZealand dollars 8. Trade payables in thousandsofNewZealand dollars interest method. This represents theirfairvalue giventheshort-termnatureofliability. from the purchase of goods and services. Trade and other payables are subsequently measured at amortised cost using the effective Trade payables andotheraccountspayable arerecognisedwhentheGroupbecomesobligedtomake futurepaymentsresulting 9. 2 to3months Past due 1 to2months Current 2017 Total tradereceivables Over 3months Goods andservicestax(GST) Balance atendofyear Receivables written-offduring the year Income inadvance Additional provisions made/reversedduringtheyear Balance atbeginningofyear Movement intheprovisionfordoubtfuldebts in thousandsofNewZealand dollars Total tradereceivables Over 3months Total payables Accrued salariesandwages The Grouphasfinancialriskmanagementpoliciesinplacetoensurethatallpayables arepaidwithinthecredittimeframe. Financial riskmanagementstrategies No interestischargedontradepayables. The fairvalue of payables isapproximately equaltotheircarryingvalue asallamountsareexpectedtobesettledwithin90days. Trade andotherreceivables(continued) Trade andother payables 32,675 30,260 30,897 22,993 21,473 26,661 1,520 1,778 1,439 3,668 3,135 Gross 637 339 533 Doubtful 23,689 11,618 37,454 1,527 Debts (113) (113) (113) 2018 2018 (22) (22) (22) 113 620 91 22 ------32,562 30,260 30,897 22,993 21,473 17,195 26,639 27,835 1,520 1,665 1,326 3,646 3,113 9,226 (370) 2017 2017 637 339 533 393 761 653 Net 22 - 85 Notes to financial statements 86 Notes to financial statements and managementstrategies. forces. The Grouphasprocessesinplaceaimedatmonitoringandmitigatingthoserisks, includingpestanddiseasemonitoring The Groupisexposedtofinancialrisks relatingtothedamagelivestockfromclimaticchanges, diseasesandothernatural Financial riskmanagementstrategies into accounttheage,breed,type,conditionandlocationofanimals. Livestock was valued byPGG Wrightson Limitedbyreferencetomarket evidenceofrecenttransactionsforsimilarlivestock,taking valuationmethod Livestock Quantity oflivestockatendyear Balance atendofyear Changes infairvalue lessestimatedpoint-of-salecosts Net increaseduetobirths, growth anddeaths Decreases duetosales Increases duetoacquisitions Balance atbeginningofyear Reconciliation ofchangesinthecarryingvalue 2017 Quantity oflivestockatendyear Balance atendofyear Changes infairvalue lessestimatedpoint-of-salecosts Net increaseduetobirths, growth anddeaths Decreases duetosales Increases duetoacquisitions Balance atbeginningofyear Reconciliation ofchangesinthecarryingvalue 2018 in thousandsofNewZealand dollars recognised throughtheProfitandLoss. allowance ismadeforareductioninthevalue ofcertainlivestockheldforresearchtrials. Changesinthevaluation oflivestockare Livestock arevalued attheirfairvalue lessestimatedpoint-of-salecostsbyreferencetothemostrelevant activemarket. An 10. Area (ha)offorestatendyear Balance atendofyear Changes infairvalue lessestimatedpoint-of-salecosts Decreases duetoharvestingandsaleof forestry Balance atbeginningofyear Reconciliation of changesinthecarryingvalue in thousandsofNewZealand dollars The GrouphasradiatapinetreecropsatBallantrae,Invermay and Woolford. Compensation unitsarerecognisedbasedontheirmarket value onthedatereceived. land ischangedfromforestrytosomeotherpurpose),adeforestationliability willarise. Forestry landissubjecttotheprovisions oftheNewZealand Emissions Trading Scheme(ETS). Shouldthelandbedeforested(the Emissions Trading Scheme an applicablediscountrate.Changesinthevaluation offorestsareaccountedforthroughprofitorloss. Forests arerecordedattheirfairvalue lesspoint-of-salecostsonanannualbasisusinganticipatedharvestingtimingandyield 11. Biological assets–livestock Biological assets–forestry (1,058) Sheep 1,188 8,887 1,139 8,121 1,139 (916) 218 627 417 935 161 554 250 (1,049) 1,194 1,571 1,482 cattle 1,413 1,482 (877) (101) Beef 194 366 888 911 429 433 (1,315) 1,553 1,038 1,203 cattle 1,413 1,071 1,203 Dairy (309) 334 696 257 167 235 75 2018 110 965 238 727 1,169 1,019 (148) (231) - Deer 663 131 194 458 676 163 663 28 81 - (3,398) (2,505) 1,041 (417) 4,611 1,313 4,487 4,487 1,521 2,029 3,717 2017 Total 110 727 103 618 398 918 This liabilityisnotrecognisedonthebalancesheetastherenocurrentintentionofchanginglandusesubjecttoETS. In theeventthatforestareasareharvested,adeforestationliabilityequivalent tothedecrease incarbonwillbeincurred. Land valueandcontingency risks ofadeclineintimberprices. not expecttimberpricestodeclinesignificantlyintheforeseeablefuture.Ithasthereforetaken any measurestomanagethe The Groupisexposedtofinancialrisks arisingfromchangesintimberprices. TheGroupisalong-termforestryinvestor anddoes Financial riskmanagementstrategies hand arecarriedattheiroriginalcostbeing$4.15perunit. the priceatwhichGrouphasanobligationtosellunitsattachedapreviouslandsaletransaction. All remainingunitson No ETS unitswereacquiredordisposedofduringtheyear(2017:Nil).During201731,142revalued to$3.14,match Emissions units Details ofthefairvalue hierarchy areincludedinnote26. • • • • Additional inputstothevalue arrivedatare: • • • based on: occurred forsimilartreecrops, value isbasedonthosetransactions. Where therehave beennosuchtransactions, value is The methodologyusedis‘stand-based’inlinewithforestrymanagementpracticesandharvesting. Where transactionshave During 2017,theGroupdisposedofits50%shareaforestryjointoperationwith Tainui GroupHoldings. Forestry was valued by Alan Bell& Associates asat30June2018. The value offorestryat30June2018was $965k(2017:$727k). Forestry valuations 11. Fonterra Co-operative GroupLimited in thousandsofNewZealand dollars 12. Lincoln University AgResearch JointFacility BioPacific Ventures Total Other investments BioPacific Ventures Fund in thousandsofNewZealand dollars During theyear, theimpairmentofotherinvestments inprioryearswas reversed asfollows: Impairment ofotherinvestments other investment. In 2017,asthejointfacilitypartnershiphadnotbeenformallyestablished, costsincurredto30June2017wereheldasan been reclassifiedasaninvestment inanassociate. AgResearch Limitedhasa38.7%shareinthe Partnership. Following theformationofLUAGRJF LimitedPartnership, theinvestment intheLincolnUniversity AgResearch JointFacility has Transfers categories between • • • • • Valuation ofotherinvestments Total Other rolling average pricespublishedbytheMinistryforPrimaryIndustries. current market pricesandlong-termtrendsinlogprices. Logpricesusedarebasedoncurrentmarket pricesand12-quarter an assumed3%compoundingrateonstandardcosts;and a 9%realdiscountrateonpre-taxcashflows; anticipated harvesttimingandyield; for intermediatecrops, amixtureoftheabove. for youngcrops, standardinvestment costs;and for maturecrops, estimatesoffuturecostsandreturns; Other investments areunlistedequitiesorco-operativeswhoseshareprices aresetbytheindividualentities. Silver Fern Farms sharesarevalued usingthequotedmarket priceontheNZXunlistedmarket. Livestock Improvement sharesarevalued usingthequotedmarket priceonthe NZAXmarket. Fonterra sharesarevalued usingthequotedmarket priceontheNZXmarket. revaluations undertaken bythe Fund manager. Investments heldthroughtheBioPacific Ventures investment fundarecarriedatcost,lessany impairmentarisingfrom Biological assets–forestry(continued) Other investments 2,717 3,667 2018 2018 940 10 - - - - 3,003 1,008 3,031 7,052 (249) (251) 2017 2017 (2) 10 87 Notes to financial statements 88 Notes to financial statements Total provisions Non-current liabilities Current liabilities Represented by: Balance atendofyear Provisions reversedduringtheyear Provisions usedduringtheyear Provisions madeduringtheyear in thousandsofNewZealand dollars All provisions except forlong-termemployeeentitlementsareexpectedtobepaidwithinthefollowing financialyear. be measuredreliably. receivable isrecognisedasanassetifitvirtuallycertainthatreimbursementwillbereceivedandtheamountofreceivable can When someoralloftheeconomicbenefitsrequiredtosettleaprovision areexpectedtoberecovered fromathirdparty, the is material,theexpectedexpendituresarediscountedtotheirpresentvalue usingpre-taxdiscount rates. All provisions arerecordedatthebestestimateofexpenditurerequiredtosettleobligationbalancedate. Where theeffect Provisions arenotrecognisedforfutureoperatinglosses. • theamounthasbeenreliablyestimated. • itismorelikely thannotthatanoutflow ofresourceswillberequiredtosettletheobligation;and • theGrouphasapresentlegalorconstructiveobligationasresultofpastevents; Provisions arerecognisedwhen: 14. Amount receivable undersale&purchaseagreement in thousandsofNewZealand dollars recognised infutureperiodsis: of deferral. The interestincomerecognisedintheyearended30June2018is$188k(2017:$188k). The interestincometobe Under NZIAS18Revenue, thediscountwillbetaken totheProfitandLossrecognisedasinterestincome over theperiod discount rateapplied. 2014, being4.55%. There hasbeennomaterialchangeduringtheperiodtounderlyingassumptionsusedincalculating The purchasepriceofPropertyBhasbeendiscountedtonetpresentvalue usingthetreasurydiscountrateapplicableat30June the amountdue. minimise theriskoflosstoCompany throughdefaultbythepurchaser, titletothepropertywillberetaineduntilsettlementof to apeppercornrentandhasfullrightsto,obligationsfor, theeconomicbenefitsandliabilitiesflowing fromuseoftheland. To Under thetermsofsaleandpurchaseagreementpurchaserhasacquiredpossessionpropertythroughaleasesubject receivable representsthepresentvalue ofthesalepricePropertyB,assetoutbelow: Under thesaleandpurchaseagreement,partieshave agreedtodefersettlementofPropertyBuntilMay2019. The non-current and paymentfor, thoseassetsalsooccurredduringthatyear. Flock Housesite. With theexception ofoneparcelland(andassociatedimprovements) -referredtoasPropertyBdeliveryof, During 2014,theCompany enteredintoanagreementforthesaleofland,buildingsandotherproperty, plantandequipmentatits 13. Balance atbeginningofyear 2018 Present valueofnon-currentreceivable Present valueofnon-currentreceivable Less discounttonetpresentvalue Beyond 1year In thefirstyear in thousandsofNewZealand dollars Non-current debtorinrespectofsharessold Provisions Other non-currentreceivables Restructuring (1,048) 1,563 (103) 577 577 577 165 - Entitlements Employee (5,840) 4,678 4,678 4,678 5,898 4,700 (80) - (136) (206) ACC 263 229 263 333 272 34 4,700 4,536 4,529 (171) Onerous Contract 2018 2018 171 7 7 830 830 830 830 - - - - (7,094) 6,348 6,314 6,348 8,624 5,137 4,700 4,341 4,341 (359) (319) 2017 2017 Total 171 188 34 - • • • • • The Groupmanagesitsexposurearisingfromtheprogrammebypromotingasafeandhealthy workingenvironment by: Objectives formanagingrisks isolated eventtoanindividualemployee. The Groupisnotexposedtoany significantconcentrationsofinsuranceriskaswork-related injuriesaregenerallytheresultofan material impactonthefinancialstatements. The value oftheliabilityisnotmaterialforGroup’s financialstatements. Therefore,any changesinassumptionswillnothave a at 31January2018. inflation ratesare Treasury-issued futureratesasat31January2018. Thediscountratesare Treasury-issued risk-free futureratesas Consumer PriceIndex(CPI)and50%ofthemovements inthe Average Weekly Earnings(AWE) Index.Post-valuation dateclaim the totalcostofclaimsuptoalimit$159k.Pre-valuation dateclaiminflationhasbeentaken as50%ofmovements inthe For theclaimyearended2018Grouphaschosenastoplosslimitof175%risk,whichmeansthatwillonlycarry attested satisfactionastothenature,sufficiencyandaccuracyofdatauseddetermineoutstandingliability. An independentactuarialvaluer (AON NewZealand) hascalculatedtheGroup’s liabilityasat30June2018. The valuer has Liability valuation ACC partnershipprogramme Employee entitlementsrepresentannualleave, alternativedays leave, sickleave, long-service leave andperformancepay. Employee entitlements Group andincludesterminationbenefits. The restructuringprovision representsthedirectcostsofrestructuringthatisnotassociatedwithongoingactivities Restructuring provision contamination attheGrasslandsCampus. The amountprovided in2018asanOnerousContract relatestocostsexpectedbeincurredinremediatingasbestos are recognisedasaprovision totheextentthatpresentobligationexceeds theeconomicbenefitsestimatedtobereceived. the unavoidable costsofmeetingtheGroup’s obligationunderthecontract.Presentobligationsarisingonerouscontracts A provision foranonerouscontractisrecognisedwheretheeconomicbenefitsexpectedtobederivedfromaarelessthan Onerous contracts Total provisions Non-current liabilities Current liabilities Represented by: Balance atendofyear Provisions reversedduringtheyear Provisions usedduringtheyear Provisions madeduringtheyear Balance atbeginningofyear 2017 in thousandsofNewZealand dollars 14. revenue receivable intheyearendingJune2020. to payup$200,000intheeventthat agreedrevenuetargetsinFarmax Limitedaremet. The amountpayable isbasedupon As partofthepurchaseagreementfor the acquisitionof50%shareholdinginFarmax Limited, AgResearch Limitedhasagreed Deferred sharepurchasesettlement the lease(includingrenewal periods). has paidanupfrontlumpsumaskey moneyinrelationtothelease. The key moneyisbeingrecognisedasincomeover thetermof In 2015, AgResearch Limitedsoldabuildingand enteredintoasub-leaseofthelandonwhichbuildingislocated. The lessee Key money 15. identification ofworkplacehazardsandimplementationappropriatesafetyprocedures. riskareasandimplementingmitigatingactions; recording andmonitoringworkplaceinjuriesnearmissestoidentify actively managingworkplaceinjuriestoensureemployeesreturnworkassoon aspracticable; induction trainingonhealthandsafety; implementing andmonitoringhealthsafetypolicies; Provisions (continued) Other non-currentliabilities Restructuring (108) (503) 165 165 165 355 421 - Entitlements Employee (5,785) 4,700 4,666 4,700 5,818 4,841 (174) 34 (234) (198) ACC 272 272 272 411 293 - Onerous Contract ------(6,486) 5,137 5,103 5,137 6,584 5,555 (516) Total 34 89 Notes to financial statements 90 Notes to financial statements purchase transactiontookplaceattheendoffinancialyear,purchase managementareoftheopinionthatnoimpairmenttestingisrequired. value isexpectedtoberealisedthroughtheuseofGroup’s sciencepipelineintheproductofferingsof Farmax Limited. Asthe as individuallytheyarenotofamagnitudethatwouldsignificantlyimpacttheGroup’s financial statements. Asnotedabove future interest of$446k.Nofairvalue calculationoftheseparatelyidentifiableintangibleassets Farmax Limitedhasbeenperformed Goodwill hasbeencalculatedatthefairvalue ofconsiderationtransferred$850kandthefair value ofthepreviouslyheldequity Goodwill Net identifiableassetsacquired Deferred taxliabilities Employee benefitobligations Payables Receivables Intangible asset(software) Plant andequipment Cash overdraft The assetsandliabilitiesrecognisedasaresultoftheacquisitionarefollows: Fair value ofpreviouslyheldequityinterest Contingent consideration(note15) Cash paid Purchase consideration: in thousandsofNewZealand dollars are asfollows: invalue of Details ofthepurchaseconsideration,netassetsacquiredanduplift AgResearch’s originalshareholding The acquisitionisexpectedtostrengthenthesciencepipelineintoFarmax productsforthebenefitofusers. On 29June2018 AgResearch Limitedacquiredthe50%shareholdingithadnotpreviouslyowned inFarmax Limited. 16. Deferred shareacquisitioncosts Key moneyreferabletoleaseincurrentperiod Key moneyreceivedinadvance in thousandsofNewZealand dollars 15. recognised onacquisitionplustheirshareofpost-acquisitionsurpluses. The interestsofany non-controllingshareholdersarestatedinproportionofthefairvalues oftheidentifiable assetsandliabilities during theyearareconsolidatedfromdatethatcontrolcommencedoruntil thedatethatcontrolceased. Subsidiaries areentitiescontrolledbytheGroup. The resultsofany subsidiariesthatbecome,orceasetobe,partoftheGroup 17. Subsidiary companies AgResearch (PPGRConsortia) Limited Consortia) Limited AgResearch (Pastoral Genomics Celentis Limited Grasslanz Technology Limited AgResearch (USA)Limited Business combination Other non-currentliabilities(continued) Investments insubsidiaries Balance date 30 June 30 June 30 June 30 June 30 June % ofownershipinterestandvoting power heldbytheGroup power 2018 100 100 100 100 100 2017 100 100 100 100 100 management intheUSA Cultivar developmentand management Cultivar developmentand Principal activity Holding company Holding company Holding company 1,296 1,043 1,296 (166) (157) 2018 2018 (23) (76) (59) 253 156 507 446 200 650 826 200 626 685 12 2017 (59) 685 685 744 - Net (gain)/lossonsaleofinvestments andintangible assets Increase/(decrease) inprovisions Net cash flow from operating activities Net cashflowfromoperating Increase/(decrease) inproperty, plant&equipment,intangibleassetsinvestment accruals Increase/(decrease) inpayables (Increase)/decrease inpropertyheldforsale (Increase)/decrease inprepayments (Increase)/decrease inreceivables Net (gain)/lossonsaleofproperty, plantandequipment Items classifiedasinvesting activities (Increase)/decrease inlivestock (Increase)/decrease ininventory Increase/(decrease) indeferredtaxation Change incurrenttaxation Movements inworkingcapital Other non-cashitems Change infairvalue ofderivative financialinstruments Net (gain)/lossfromforeigncurrencyexchange 17. Investment impairment/write-down Asset impairment/write-down Change infairvalue oflivestock Depreciation Non-cash items tax Surplus after in thousandsofNewZealand dollars 18. Change infairvalue offorestry Share ofdeficitassociates Intangible assetsamortisationandimpairment Farmax Limited Phytagro NewZealand Limited Consortium) Limited AgResearch (Johne’s DiseaseResearch Subsidiary companies All subsidiarycompaniesareincorporatedinNewZealand. treated asasubsidiaryeffectivefrom29June(seenotes4and16). On 29June2018, AgResearch Limitedacquiredthe50%ofsharesinFarmax Limitedthatitdidnotalreadyown. Farmax hasbeen Companies Officeregister. AgResearch (Johne’s DiseaseResearch Consortium) Limitedwas woundupon8March2018andremoved fromNewZealand Grasslanz Technology Limited. All othersubsidiarycompaniesaredirectsubsidiariesof AgResearch Limited. Grasslanz Technology LimitedisadirectsubsidiaryofCelentis Limited. AgResearch (USA)Limited isadirectsubsidiaryof Covita Limited Investments insubsidiaries(continued) Reconciliation of surplus after tax with net cash flow from operating activities taxwithnetcashflow fromoperating Reconciliation ofsurplusafter Balance date 30 June 30 June 30 June 30 June % ofownershipinterestandvoting power heldbytheGroup power 2018 100 100 100 - 2017 100 100 100 - Principal activity Holding company Holding company farm managementsoftware Development anddistributionof Holding company (6,541) (3,948) (2,138) (1,005) 10,570 1,211 4,665 9,301 (718) (332) (126) (269) (398) (238) 9,619 2018 (93) 274 114 719 348 95 23 7 - 20,080 3,059 2,051 2,187 4,648 9,595 (418) (770) (165) (324) (240) (928) (103) 2017 (18) (45) 399 677 391 26 59 (1) - - - 91 Notes to financial statements 92 Notes to financial statements Payable nolaterthan1year leaseobligations Non-cancellable operating in thousandsofNewZealand dollars 20. Margot Forde Forage GermplasmCentre Asset Details ofthecollectionareoutlinedbelow: The Directorsbelievethereisnopracticalbasisuponwhichtoreliablymeasurethevalue ofthiscollection. The natureofthisheritageasset,anditssignificancetothescienceGroupundertakes, make itnecessarytodiscloseit. geographical, scientificand/orenvironmental attributes. TheGrouphasidentifiedagermplasmcollectionasheritageasset. Heritage assetsarethosethatheldforthedurationoftheirphysical livesbecauseoftheiruniquecultural,historical, 19. Payable laterthan1yearandnotlonger5years Payable laterthan5years Total leases non-cancellableoperating Receivable nolaterthan1year leasereceivables Non-cancellable operating in thousandsofNewZealand dollars Refer tonote2wheretheoperatingleaseexpenseforyearisdisclosed. normal provisions forperiodicrentreviewstomarket rates. Building leasesareforatleast10yearsorhave rightsofrenewal whichare,inaggregate,for at leastthatperiod. All leaseshave using thelandprimarilyforagriculturalpurposesand/orresearchanddevelopmentpurposes. Limited. The leasehasarestriction inrespectoftherighttooccupyperpetuity, whichonlycontinuesif AgResearch Limitedis The landleasewith Tainui GroupHoldingsLimitedisinperpetuitybutwithrightsofrenewal thatareexecutable by AgResearch All significantoperatingleasecommitmentsrelatetolandandbuildings. Receivable laterthan1yearand notlongerthan5years Receivable laterthan5years Total leases non-cancellableoperating property attheexpiryofleaseperiod. operating leaseshave normalprovisions forperiodicrentreviewstomarket rates. Nolessees have anoptiontopurchasethe 1 monthand11years, withone leasehaving anoptiontoextendforafurtherfiveterms, eachof5years. With oneexception, Operating leasereceivables relatetolandandbuildingsowned andleasedby AgResearch Limited. The leasetermsarebetween Operating leasearrangements Operating Heritage assets Australia’s genebankforperennialgrassesandlegumes New Zealand’s nationalgenebankofgrasslandplantsand Description 10,223 10,286 3,001 5,649 1,573 2,556 5,741 1,989 2018 2018 11,594 10,801 2,733 7,615 1,246 2,720 6,209 1,872 2017 2017 * Trading transactionswithentitiesofwhichkey managementpersonnelareassociated include: accounts. The weighted average interestratewas 3.39%(2017:3.22%). During theyear AgResearch Limitedmadeinterestpaymentsof$109k(2017:$85k)to itssubsidiariesonintercompany current related parties. or received.Noexpensehasbeenrecognisedintheperiodforbaddoubtful debtsinrespectoftheamountsowed by The amountsoutstandingareunsecured,onnormaltradetermsandwillbesettledincash.Noguaranteeshave beengiven Entities withwhichkey managementpersonnelareassociated* Transactions betweentheGroupandrelatedparties: Associates Subsidiaries Transactions between AgResearch andrelatedparties: Research, development andotherservices in thousandsofNewZealand dollars Entities withwhichkey managementpersonnelareassociated* Transactions betweentheGroupandrelatedparties: Jointly controlledentities Associates Trading transactionswithrelated parties transactions aresummarisedbelow. owned enterprisesandgovernment departments, whicharecarriedoutonacommercialandarmslengthbasis. Otherrelatedparty The ultimateshareholderoftheGroupisCrown. The Groupundertakes many transactionswithotherCrown entities, state- 22. Subsidiaries Transactions between AgResearch andrelatedparties: Research, developmentandotherservices Details oftheGroup’s materialjointoperationsattheendofyearareasfollows: the jointoperation. transacts withitsjointlycontrolledentities, unrealisedprofitsandlossesareeliminatedtotheextentofGroup’s interestin are incorporatedintotheGroupfinancialstatementsonalinebybasisusingproportionatemethod. Where theGroup project andshareinany resultingoutput. The Group’s shareoftheassets, liabilities, revenuesandexpensesofjointoperations undertake aspecificbusinessprojectandinwhichthejointpartiesareseverallyliablerespectofcostsliabilities Joint operationsarejointarrangementsbetweentheGroupandanotherpartyinwhichthereisacontractualagreementto 21. in thousandsofNewZealand dollars the jointarrangementandretentionofownership rightstopre-existingIPcontributedbytheparties. theparties’rightstoeconomicinputsandoutputsof a jointoperationbyvirtueofthecontractualarrangementswhichspecify AgResearch Limited.GrasslandsInnovation LimitedisincorporatedinNewZealand. GrasslandsInnovation Limitedisconsidered The 30%interestinGrasslandsInnovation Limitedisheldvia Grasslanz Technology Limited,awhollyowned subsidiaryof Grasslands Innovation Limited Transactions withrelatedparties Joint operation investmentsJoint operation Balance date 30 June % ofownershipinterestandvoting power heldbytheGroup power 2018 30 Purchaseofservices Saleofservices 6,300 3,296 6,537 8,310 4,016 2018 2018 176 346 2017 30 Principal activity other foragetechnologies proprietary foragecultivars and product opportunitiesin To identify, developandexploit 10,402 9,061 1,173 8,108 3,797 2017 2017 116 339 2,827 1,950 2018 2018 172 100 951 25 Duefrom - Dueto 2,738 2,894 1,036 2017 2017 246 132 23 - 93 Notes to financial statements 94 Notes to financial statements in thousandsofNewZealand dollars The compensationoftheDirectorsandExecutives, beingthe key managementpersonneloftheGroup,comprised: Key compensation managementpersonnel Details ofthepercentageinterestsheldinrelatedpartiesaredisclosednotes4and17. Equity interestinrelatedparties ** Key managementpersonnelarenolongerassociatedwiththeseentities. Salaries andothershort-termemployeebenefits Total TBFree NewZealand Limited Tainui GroupHoldingsLimited** Silver Fern Farms Limited** Overseer Limited Nufarm (NZ)Limited Macfarlane RuralBusinessLimited** LUAGRJF LimitedPartnership Lincoln University (formerly LincolnHubLimited) Blinc Innovation Limited Landcare Research NewZealand Limited Grasslanz Technology Limited Foundation for Arable Research** Farmax Deer IndustryNewZealand CSIRO** Ballance Agri-Nutrients Limited** Ballance Agri-Nutrients ANZCO Foods Limited** 22. value ofeachfinancialassetinthestatement position. The Grouphasnosignificantconcentrations ofcreditrisk. Themaximum exposuretocreditriskisrepresentedbythecarrying • • • Credit riskismanagedthroughthetreasurypolicy, which: and accountsreceivable. The financialinstrumentswhichpotentiallysubjecttheGrouptocreditriskarecash,short-termdeposits, forward rateagreements Credit risk The Grouphasatreasurypolicywhichitappliestoactivelymanagetheserisks (referbelow). • • • The Grouphasexposuretothefollowing risks fromitsuseoffinancialinstruments: Financial riskmanagement policies whererelevant. financial instruments, receivables andtradecreditors. Theparticularrecognitionmethodsadoptedaredisclosedintheaccounting Financial instrumentscarriedinthestatementoffinancialpositionincludecashandequivalents, investments, derivative 23. in thousandsofNewZealand dollars sets parameterswithinwhichshort-terminvestments mustbemade. restricts thecounterpartiesthatmaybeusedto A Graderegisteredbanks andtheNewZealand Government; and places restrictionsonthelevelofinvestment withany onecounterparty; liquidity risk. market risk;and credit risk; Transactions withrelatedparties(continued) Financial instruments 6,537 1,861 4,009 2018 119 413 Saleofservices 36 89 1 7 2 ------
8,108 1,293 3,797 2017 532 533 835 383 486 116 63 20 34 9 7 - - - - Purchaseofservices 6,300 2,247 1,538 2,135 2018 203 138 37 2 ------9,061 6,144 2,251 2017 200 116 159 17 21 35 14 91
8 5 - - - - - Duefrom(dueto) 2,654 2,581 1,913 2018 2018 455 154 32 12 88 ------2,492 2,275 1,013 2017 2017 (34) 230 373 357 393 19 35 82 18 6 - - - - -
- Maturity analysis–financialliabilities measures therisks. There hasbeennochangeduringtheyeartoGroup’s exposuretoliquidityrisks orthemannerinwhichitmanagesand • • • • Liquidity riskismanaged: shortfalls. As at30June2018therewerenofundsdrawn againstthefacility(2017:$Nil). flows fromitsoperatingactivitiestomake timelypayments. Itdoes, however, facilityof$1mtocover any maintainan overdraft Liquidity riskrepresentstheGroup’s abilitytomeetitsfinancialobligationsontime.Generally, theGroupgeneratessufficientcash Liquidity risk not material. The Grouphasnoborrowings andisthereforenotexposedtointerestrateriskotherthaninrelationitsinvestments, whichare Interest raterisk There hasbeennochangeduringtheyeartoGroup’s exposuretocurrencyrisks orthemannerinwhichitmeasuresrisks. The Groupusesforeigncurrencyforward exchange contracts, withintheabove treasurypolicylimits, tomanagetheseexposures. anticipated exposureis(toamaximumof12months). manage theriskonagroup-widebasis. Underthetreasurypolicy, thepurchasedcover isupto95%dependingonhow faroutthe For thosecurrencyexposureslesscertainintheirtimingandextent, suchasfuturesalesandpurchases, itistheGroup’s policyto Cash flowhedges estimated thata10%increaseintheNewZealand dollarwouldreduceprofitandequityby$179k(2017:$335k). It isestimatedthata10%decreaseintheNewZealand dollarwouldincreaseprofitandequityby$219k(2017:$409k).Itis of forward foreignexchange contracts. Currency riskinrespectoftheGroup’s transactionsismanagedinaccordancewiththeGroup’s treasurypolicyandincludestheuse ruling atbalancedate. transaction, oratratesapproximating them. Assets andliabilitiesareconverted toNewZealand dollarsattheratesofexchange Revenues andexpensesinforeigncurrencyaretranslatedtoNewZealand dollarsattheexchange ratesineffectatthetimeof Currency risk Market risk 23. in thousandsofNewZealand dollars Trade andotherpayables 2018 Trade andotherpayables 2017 Derivative financialinstruments Finance leasesliability Foreign currencycontracts areshown atfairvalue. Derivative financialinstruments values ofunlisted associates. Investments, except for‘other investments’ which arevalued atfairvalue, are carried atcost.Itisnotpracticaltoestimatethefair Investments The carryingamountsoffinancialassetsandliabilitiesrecordedatcostinthestatementsapproximate theirfair value. Cash andcashequivalents,tradereceivables,otherreceivablespayables Fair value through regularoversight bythe Audit &RiskCommittee. through monthlyreviewbyseniormanagement;and through compliancewiththetreasurypolicy, whichsetsaliquiditybufferforunforeseencashflows; with these; by monitoringcashflow forecasts(bothoperationalandanticipatednon-recurringitems)aligninginvestment decisions Financial instruments(continued) On demand ------Less than1year 18,609 18,680 25,836 25,836 67 4 Between 1year and 5years ------18,609 18,680 25,836 25,836 Total 67 4 95 Notes to financial statements 96 Notes to financial statements Derivative financialinstruments Trade and other payables payables other and Trade Financial liabilities Other investments Other Other non-current receivables non-current Other Trade and other receivables receivables other and Trade Trade and other payables payables other and Trade Financial liabilities Derivative financialinstruments receivables non-current Other receivables other and Trade Other investments Other Cash andcashequivalents Financial assets 2018 accepted bytheinsurer. The quantumoftheclaimisstilltobedetermined. Currently thereisaclaimwiththeCompany’s insurerinrespectofdamage asaresultoftheCanterbury earthquake whichhasbeen Contingent assets is dependentupontheassessmentfindings. Thereforenoliabilityhasbeenrecognisedasat30June2018. There aresomestructuralworks requiredattheLincolnCampus. The financial effectcannotbereliablyestimatedatthisstageand Litigation andothercontingentliabilities been appointed,thecontributionswillbecirca$30minadditiontoalready contractedcommitments. As at30June2018,aconditionalagreementhasbeenenteredintoinrelation totheFood ScienceFacility. A lead contractor has Other commitments Total capitalcommitments Lincoln University AgResearch JointFacility Funding commitmentstoresearchconsortiums Asset purchasescommittedtoandcontractedforatbalancedate Capital commitments in thousandsofNewZealand dollars 24. Cash andcashequivalents Financial assets 2017 in thousandsofNewZealand dollars Fair valueoffinancialassetsandliabilities 23. Contingencies andcommitments Financial instruments(continued) Note 13 12 12 13 9 9 8 8 receivables 84,465 33,613 46,316 93,049 29,665 59,043 4,536 Loans 4,341 and ------Available- for-sale 3,667 4,021 4,021 3,725 67 67 58 ------liabilities at amortised Financial 18,609 18,609 25,836 25,836 cost ------Carrying amount 18,676 18,609 97,070 29,665 59,043 33,613 46,316 32,653 26,893 88,190 25,836 25,836 4,021 4,341 4,536 3,667 4,710 1,050 2018 67 58 Fair value 18,676 18,609 97,070 29,665 59,043 33,613 46,316 13,778 88,190 25,836 25,836 4,021 4,341 4,536 3,667 4,972 1,975 6,831 2017 67 58 There have beennomaterialchangesintheGroup’s managementofcapitalduringtheyear. The Group’s policiesinrespectofcapitalmanagementandallocationarereviewedregularlybytheBoardDirectors. The Groupisnotsubjecttoany externallyimposedcapitalrequirements. research forthebenefitofNew Zealand. The Crown Research Institutes Act 1992requires AgResearch Limited tomaintainitsfinancialviabilityinorderundertake • • • • The Group’s capitalisitsequity, whichismadeupof: 25. in thousandsofNewZealand dollars not basedonobservable market data(unobservable inputs). Level 3–fairvalue measurementsarethosederivedfromvaluation techniquesthatincludeinputsfortheassetorliabilityare observable fortheassetorliability, eitherdirectly(i.e.asprices)orindirectlyderivedfromprices);and Level 2–fairvalue measurementsarethosederivedfrominputsotherthanquotedpricesincludedwithin Level1thatare or liabilities; Level 1–fairvalue measurementsarethosederivedfromquotedprices(unadjusted)inactivemarkets foridenticalassets Levels 1to3basedonthedegreewhichfairvalue isobservable: The following tableprovides ananalysis ofitemsthataremeasuredsubsequenttoinitialrecognitionatfairvalue, groupedinto 26. Other investments* Available-for-sale financialassets 2018 Livestock Non-financial assets Forestry Land andlandimprovements Buildings Forestry Livestock Non-financial assets Other investments* Available-for-sale financialassets 2017 Derivative financialinstruments Financial assetsdesignatedatfairvalue Land andlandimprovements Buildings investments. investments of$939k(2017:$1,008k) aspernote12. The levelclassificationdetermined isbasedonthefair value withinthese * Otherinvestments consistofFonterra shares$2,717k(2017:$3,003k),BioPacific Ventures Fund $10k(2017:10k)andother The changingofoneormoreinputswould notchangesignificantlythefairvalue oftheLevel3investments. There werenotransfersbetweenany levelsduringthe year. Derivative financial instruments Financial liabilitiesdesignatedatfairvalue retained earnings. available-for-sale assetrevaluation reserve;and asset revaluation reserve; share capital; Capital management Fair value measurements recognised in the statement of financial position Fair value measurementsrecognisedinthestatementoffinancial Note 12 10 11 11 10 12 7 7 7 7 Level 1 2,762 2,762 3,042 3,042 ------179,688 155,382 Level 2 80,545 92,614 76,688 72,511 4,611 4,487 (67) (67) 895 965 727 969 58 Level 3 10 10 10 10 ------182,460 158,434 80,545 92,614 76,688 72,511 3,667 4,611 4,487 4,021 Total (67) (67) 965 727 58 97 Notes to financial statements 98 Auditor’s report We did not evaluate the security and controls over the electronic publication the of publication electronic the over and controls security the not did evaluate We intent. corporate of thestatement to Group’s agreed bu the For statements. in theaggregate, they could reasonably be expected to influencethe decisions of readerstaken on the basis of thesefinanci d or amounts of omissions Auditor Reasonable assurance is our opinion. includes that report an issue and auditor’s to error, due toor fraud whether misstatement, Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole, are free from material R Th to do but so. alternative realistic has or to cease operations, has of Board Directors the unless accounting, of thebasis andconcern using going concern going ability to continue as a going concern. The B The going concern. a as continue to ability In preparing the financial statements, the Board of Directors is responsible on behalf theof Group for assessing the Group’s the opinion, our In information. and other explanatory policies accounting and position as at 30 June 2018, the consolidated statement of comprehensive income, consolidated statement of changes in equity of statements the financial audited have We O Auditor The UNE ENDED EAR T E OR STATE ENTS INAN IA s TheBoard of Directorsis responsible for such internal control asit determinesisnecessary to enable it to preparefinanci comply with generally accepted accounting practice in New Zealand. The Board of Directors is responsible on behalf of the Group for prepari R D Webelieve tha We haveWe fulfilledresponsibilities our accordancein withthe Auditor our report. report. our Standa Ethical Standardsand the International Standards on Auditing (New Zealand) issued by theNew Zealand Auditing and Assurance A RESEAR O READERS T E TO REPORT AUDITOR’S INDEPENDENT the Auditor with accordance in audit out carried our We information,tostatements,theand financial comment we independence. other relating our explain we on responsibilities The basis for our opinion is explained below. In addition, we outline the responsibilities of thetheBoardexplainedaddition, basisforis Directorsopinion of Thebelow. we outline of our and responsibilities In on Group the of statements financial the of audit the out carry to Limited, Deloitte of resources and staff the using Bryden, Our audit was completed on completed was audit Our Auditor’s report Auditor’s
tatementsthat are free from material misstatement, whether dueto fraud or error. e Board of Directors’ responsibilities consolidated statement of cash flows for the year ended on that date and the notes to the financial statements that include statements financial the notes to the and date that on ended the year for flows cash of statement consolidated rds Board. Our responsibilities under those standards are further described in the Responsibilities of the auditor section of theofsection auditor in are the those further standards described Responsibilities under rds Board. Our responsibilities
- General’s Auditing Standards will always detect a material misstatement when it exists. Misstatementsare differences or
o o present fairly, I comply with generally accepted accounting practicein NewZealand in accordance withZealand New equivalentsto Standards. Reporting Financial nternational
dget information reported in the financial statements, our procedures were limited to checking that the information information the that checking to limited were procedures our statements, financial the in reported information dget
- Generalisthe auditor of AgResearch
t the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. a audit to our basis for provide appropriate and is sufficient have obtained we evidence audit t the its financial position as at as position financial its its financial performance and cash flows for the year then ended; and then the ended; for year and flows cash performance financial its financial statements of theof Group: statements financial
in in a high level of assurance, but it is not a guarantee that an audit carried out in accordance with the with in accordance out audit an that carried a it but not guarantee is assurance, of level high a all material respects: material all isclosures and can arise from fraud or error. Misstatements are considered material if, individually or
23 August
I ITED 2018 arise from theCrown Research InstitutesAct 1992. . This is the date at which our opinion is expressed. isopinionis the our which .This at date 30 June 2018 June 30 oard of Directors is also Directorsoardis of responsible disclosing,forapplicable,as matterstorelated the Group Group the
AND AND
Limited
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on pages on ; and - General’s Auditing Standards, which incorporate theProfessional and and and ’S
Group (the Group). The Auditor
64 -
General’sAuditing Standards.
to to ng financial statements that are fairly presented and that presented fairly are that statements ng financial 97 , that comprise the consolidated statement of financial financial of statement consolidated the comprise , that
financial statements.
- General has appointed me, Paul
his behalf. behalf. his
our our no no al al al al
O O A D P Bryden Paul the audit, than ther Ethics forAssurancePractitioners of Code Auditing e are independent of the Group inaccordance withthe independence re uirementsof the Auditor Gener I misstatement ofthis otherinformation, wearere uired toreportthatfact. eha enothing toreportin this regard. the audit,or otherwiseappears to bematerially misstated.If, based on our wor , we concludethat there a ismaterial we considerwhether the other informationismateriallyinconsistentthe with financial statements or our nowledgeobtainedin In connectionour withaudit of the financial statements, our to readtheother information.isresponsibilityIn doingso, thereon. or assuranceconclusion ur the opinion not co er informationand on the does we statements other financialdo any form not express of auditopinion Also the audit. throughout scepticism professional maintain the with Auditor an in accordance of As part audit to on pages Board of Directors he is responsible for the he other information. other information comprises the information included O I Act . Audit Public from the arise responsibilities ur audit.duringwe identify that internal inany significantcontrol our and deficienciesincluding findings, audit significant audit the of scope and timing the planned matters, the among other DirectorscommunicateBoard of regarding,with e Auditor’s report Auditor’s
related disclosuresmade by the accounting of appropriateness the e aluate e control. internal Group’s the of effectiveness the on opinion an expressing of the purpose not for but circumstances in the appropriate co internal of understanding an obtain e control. internal theof or o erride misrepresentations, omissions, intentional asforgery, from may in ol e for error, than fraud collusion, resulting one higher appropriateto pro ide a basis for our opinion. he ris of not detecti design and perform audit procedures responsi e to those ris s, and obtain audit e idence that is sufficient and e identify and assessthe ris s of material super isionand performanceGroupthe ofaudit. e remainsolely responsibleauditfor our opinion. the on consolid to express opinion an Group the within e obtain sufficient appropriate audit e idence regarding the financial statements of the entities or business acti ities presentation. whether the financial statements represent the un and the disclosures including and statements, the content of financial structure the presentation, e o erall e aluate concern. going the to However, of report. date fut our auditor’s if such disclosuresare inade uate, to modify our opinion. conclusions ur are based on theaudit e idence obtained up exists, we are re uired to drawatten uncertainty material a that conclude we If concern. going a as continue to ability the on Group’s doubt significant cast audit e the on based and, the Directors Board of by accounting of basis the use of concern going the of the appropriateness on conclude e Standards, the independenceincorporatewhich re uirementsof ProfessionalStandard and thical e ised
N N and
we ha e no relationship with, or interests in, the Group. the in, interests or with, relationshipha e no we to ,
idence obtained, whether a material uncertainty exists related to e ents or conditions that maythat conditions or to e ents related exists uncertainty material a whether obtained, idence but does not include the statements, and financialour auditor’s report thereon.
Board ofDirectors issued bythe ew ealand Auditing andAssuranceStandardsBoard. tion in our auditor’s report to the related disclosures in the financial statements or, statements financial the in disclosures related the to report auditor’s our in tion ntrol rele ant to the audit in order to design audit procedures that are that inaudit procedures audit to order the design ntrol to rele ant misstatement the of financial statements, whether dueto fraud or error, General’s Auditing Standards, we exercise professional judgement and ure e ents or conditions may the e ents ure cause conditions as toor to cease Group a continue . policies used and the reasonableness of accounting estimatesand
derlying transactions and e ents in a manner that achie es fair ated financial statements. e are responsible for the direction, ng a material misstatement resulting from fraud is
al’s 99 Auditor’s report 100 Statutory reporting within theinterestregister, whichisupdatedregularly. transactions have occurred duringtheyear. These interestshave beenappropriatelyrecorded directorships orshareholdingsinprivate trustsandsmallcompanieswithwhomno below. Interestsaredirectorshipsunlessotherwisestatedanddonotincludetrusteeships, Directors’ interestsdisclosedduringtheyearto30June2018aresetoutintable dealings byDirectorswiththeCompany. information thatwouldnototherwisehave beenavailable tothem. There werenoshare The BoardreceivednonoticesduringtheyearfromDirectorsrequestinguseofC Directors’ interests Dividends aspects undertheCrown Research Institutes Act 1992fortheyearended30June2018. The Directorsarepleasedtoreportthat AgResearch Limitedmetitsobligationsinallmaterial To ourshareholdersandstakeholders For theyearended30June2018 Statutory reporting No dividendsweredeclaredduringtheyearto30June2018. AgResearch InterestListFY18 ARMER, Colin 2018) (retired 30June GRANT, Jeff
Director of • • • • • • • • • • • • • • • • • • • Limited Pasture Conference Armer GroupLimited Limited Icena Investments Armer Farms Limited Statemill Farm Limited Hirata DairiesLimited CalfCo Limited Limited Dacca Investments and itssubsidiaries Dairy HoldingsLimited subsidiaries Limited andits Armer Farms (NI) Technology Southern Instituteof OSPRI NewZealand NAIT Mt LintonStation Development Authority Milford Sound Wanaka Ltd Lakeland Adventures Finance Now Ltd D&G Holdings Copper ValleyHoldings Officer of Trustee of • • Trust Tower Hill joint venture) University and Lincoln (Massey Pfx Trust Shareholder of • • • • • • • • • • • • • • • • • Ravensdown Ballance Products Westland Milk Fonterra Armer GroupLimited Limited Icena Investments Armer Farms Limited Statemill Farm Limited Hirata DairiesLimited CalfCo Limited Limited Dacca Investments subsidiaries Limited andits Dairy Holdings subsidiaries Limited andits Armer Farms (NI) Tower Hill Trust Wanaka Ltd Lakeland Adventures D&G Holdings Holdings Copper Valley ompany November 2017) the Board29 (resigned from Andrew MACFARLANE, LLOYD, Jackie (continued) GRANT, Jeff Paul REYNOLDS, Director of • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Ltd Windwhistle Pastoral W HCollins &Co Ltd (Ashburton) Ltd Riverbank Farm Pencarrow Farm Ltd Ltd on Victoria Nor’west Ngāi Tahu Farming Limited Midway Moorhouse Business Ltd Macfarlane Rural M.R.B. Trustees Ltd Limited Lincoln Hospitality Kintore Farm Ltd & subsidiaries Fernside HoldingsLtd Ltd &subsidiaries Edgewater Resort Hotel Company Ltd Dumbarton Land (Chair) Deer IndustryNZ Deebury Pastoral Ltd Ltd Creighton Properties (ANZCO Beef) ANZCO Foods Ltd Ltd 500 Victoria Ltd 201 +218Moorhouse Naylor Love Limited (DeputyChair) New Zealand Post T W MoneyLtd Operations Ltd TW FinancialServices Services Ltd The Warehouse Financial Limited Predator-free 2050 TBfree Ltd SBS Bank Services &CEO’s Group Southland Shared Ltd Enviro-Mark Solutions Challenge, Chair National Science Our Landand Water Landcare Research Ltd Officer of • (Councillor) University Lincoln Trustee of • • • • (Chair) Wellington) as Experience Trust (trading Museums Wellington Foundation Lion (Chair) Blake Trust The SirPeter Trust (Chair) Community The Eastland Shareholder of • • • • • • • • • • • • • • • • • Ltd Pastoral Windwhistle trustee) Waingaro DairyLtd(as Limited (astrustee) Stock WaterSpaxton Rural BankHouseLtd (Ashburton) Ltd Riverbank Farm Moorhouse Ltd Power Centre Pencarrow Farm Ltd Ltd Nor’ weston Victoria Business Ltd Macfarlane Rural M.R.B Trustees Ltd Developments Ltd Lignotech Kintore Farm Ltd Hotel Ltd Edgewater Resort Deebury Pastoral Ltd Company Ltd. FarmingAshcroft As a Trustee of Ltd 764 Colombo Street 218 MoorhouseLtd 101 Statutory reporting 102 Statutory reporting including membershipofBoardCommittees, duringtheyearwereasfollows: Remuneration andotherbenefitspaidorduepayable toDirectorsforservicesasaDirector, Directors’ remuneration Robert JohnHay(Chair) Grasslanz Technology Limited Michelle Alexander Sam Robinson (Chair) Kim Wallace Dr Peter Stone Tania Simpson Dr Paul Reynolds Andrew Macfarlane Jackie Lloyd Colin Armer Jeff Grant(Chair) Directors 2018) (retired 30June SIMPSON, Tania STONE, Peter WALLACE, Kim 2018) (appointed 1July Rukumoana SCHAAFHAUSEN,
Director of • • • • • • • • • • • • • • Ngāi Tahu Tourism Tainui GroupHoldings Zealand Reserve BankofNew Oceania GroupLtd Kōwhai Consulting Ltd Global Women Science Challenge Deep SouthNational Queensland) (University ofSouthern in Agriculture for Engineering National Centre Kim WallaceLimited Investments Limited Seahorse Beach Port NelsonLimited Quotable ValueLimited Partnership (Chair) Miro Limited Incorporated (Chair) Te Kauhanganui Waikato-Tainui Officer of • • • Group Ltd Oceania Ltd Consulting Kōwhai Meteorology Bureau of Australian Trustee of • • • • Trust National Waitangi Trust Maniapoto Irirangi o Te Reo Trust Ruki Whānau Simpson-Te Kōwhai Trust 18,333 39,975 37,056 37,056 37,056 17,525 37,056 37,056 72,000 2018 - - Shareholder of • • • • • • • Oceania GroupLtd Mighty RiverPower Ltd Kōwhai Consulting Ltd Argo Nufarm Kim WallaceLimited Investments Limited Seahorse Beach 15,000 41,497 70,774 36,405 36,405 36,405 36,405 44,807 2017 - - - Business Performance (55)andSubsidiaries (6). Communications &Marketing andFinance& Chief Executive’s Office,SharedServices, Remuneration was receivedbyScience(142), severance andexitpayments. superannuation benefits, vehiclebenefits, Remuneration includedperformanceawards, per annum,asshown intableonright. received remunerationoforexceeding $100,000 During theyearended30June2018,203staff Remuneration greaterthan$100,000 Office ofthe Auditor-Generalandundersection21ofthe Crown ResearchInstitutes Act1992. Paul BrydenofDeloitteLimitedistheappointedauditor oftheCompany undercontractfromthe Auditor permissible bylaw. The Company alsohasDirectorsandOfficersinsurance. During theyear, theCompany indemnifiedDirectorsandcertainemployeestothefullestextent Directors andemployeesindemnityinsurance Donations paidduringtheyearended30June2018were$2k. Donations termination oftheiremploymentwiththeGroup. During theyear, theGroupmadefollowing paymentstoformeremployeesinrespectof Termination payments Number ofemployees Total amountpaid Total $640,000 to$649,999 $500,000 to$509,999 $330,000 to$339,999 $270,000 to$279,999 $260,000 to$269,999 $240,000 to$249,999 $230,000 to$239,999 $220,000 to$229,999 $210,000 to$219,999 $201,000 to$209,999 $190,000 to$199,999 $180,000 to$189,999 $170,000 to$179,999 $160,000 to$169,999 $150,000 to$159,999 $140,000 to$149,999 $130,000 to$139,999 $120,000 to$129,999 $110,000 to$119,999 $100,000 to$109,999 Group $1,048,328 203 21 10 10 15 24 33 42 39 1 1 1 1 1 1 1 1 3 5 7 3 4 103 Statutory reporting Corporate governance
The Board promotes the highest standards of corporate governance practice and ethical conduct by all Directors and employees of AgResearch Limited and its subsidiaries.
The Board endorses the overall principles raising new capital, major borrowings, approval embodied in the New Zealand Institute of of the annual financial statements, appointment Directors’ “Code of Practice for Directors”. of directors to subsidiaries and associates, major It has only independent directors on the Board, capital expenditure and acquisitions. whose skills and experience bring balance and diversity to decision making. Each year, the Company produces a Statement of Corporate Intent and an operating budget, Role of the Board which are reviewed and approved by the Board. Monthly management accounts are The Board is responsible to shareholders prepared and these are reviewed by the Board for charting the direction of the Company by: throughout the year to monitor management’s setting objectives, strategy and key policies; performance against the budget and the andmonitoring management’s running of the Statement of Corporate Intent. business to ensure it is aligned with the direction set. Independent professional advice
The Board delegates the conduct of the With the prior approval of the Chair, each day-to-day affairs of the Company to the Director has the right to seek independent Chief Executive. The Board is responsible legal and other professional advice at the for the appointment, from time to time, of Company’s expense concerning any aspect of the Chief Executive and annually reviews the Company’s operations or undertakings to their performance. assist in fulfilling their duties and responsibilities as directors. The workings of the Board and its code of conduct are governed by the Companies Act Director education 1993, AgResearch’s constitution, the Crown Research Institutes Act 1992, the Crown Entities The Board had a budget of $15,000 to assist Act 2004, the annual Statement of Corporate Directors with the financial costs of attending Intent and the Board’s manual. This manual sets courses and conferences on governance matters. out all the functions and operating procedures Directors who attend report back at Board of the Board. The policies approved by the Board meetings on matters learnt that would improve clearly set out those matters on which only the governance of the Company. The Chair the Board can make decisions. These include authorises expenditure from this budget. dividend payments, solvency certificates, Corporate governance Corporate
104 Board membership Directors’ & Board Committee meetings
The constitution currently sets the size of the The table below sets out the Board and Board at a minimum of two Directors and a Committee meetings attended by Directors maximum of nine Directors. during the financial year. The Board has established two standing committees to The Board in the financial year consisted of the guide and assist the Board with overseeing Chair and seven other Directors. Directors are certain aspects of corporate governance generally appointed for a three-year term and – the Audit and Risk Committee and the may be reappointed for further terms. Remuneration Committee.
Colin Armer, Jackie Lloyd and Kim Wallace were The Board and each Committee are empowered appointed to the Board on 1 July 2017. Andrew to seek any information it requires from Macfarlane resigned from the Board on 29 employees in pursuing their duties and to obtain November 2017. Jeff Grant and Tania Simpson independent legal or other professional advice. retired from the Board on 30 June 2018.
Board meetings Audit & Risk Remuneration Board of Directors attended Committee Committee
Jeff Grant 10 2 4
Andrew Macfarlane 4 2
Paul Reynolds 10 3
Tania Simpson 9 4
Peter Stone 10 4
Jackie Lloyd 9 4
Colin Armer 10 3
Kim Wallace 10 4
Number of meetings held 10 4 4 Corporate governance Corporate
105 106 Directory Directory (Until March2018) – HealthandSafety National Manager Andy Anderson (Until April 2018) Shared ServicesDirector Andrew McSweeney (Joined May2018) Safety andEnvironment National Manager–Health, Natasha Barnett Kaiurungi Ahuwhenua Chris Koroheke (Joined October2017) Performance Director Finance andBusiness Tony Hickmott (Joined August 2017) Programmes Director Partnerships and Stuart Hall People andCultureDirector Lee Gardiner Marketing Director Communications and Monique Devereux Research Director Greg Murison Chief Executive Dr Tom Richardson Executive Team (appointed 1July2018) Director Rukumoana Schaafhausen Director Dr Peter Stone (Retired 30June2018) Director Tania Simpson Director Dr Paul Reynolds (Until November 2017) Director Andrew Macfarlane Director Jackie Lloyd Director Colin Armer Chair – Audit andRisk Kim Wallace (Retired 30June2018) Chair Jeff Grant Board ofDirectors Westpac BankingCorporation Bankers Auditor-General Deloitte onbehalfofthe Auditors Information 3,500 50 6,000 40 SMART AND SITES SCIENCE NATIONALLY PASSIONATE ACROSS PROJECTS SIGNIFICANT PEOPLE NEW ZEALAND EACH YEAR DATABASES AND COLLECTIONS Science working for New Zealand
AgResearch is proud to be a Crown Research Institute. The CRIs are using science to create a more prosperous, sustainable and innovative New Zealand. www.sciencenewzealand.org AgResearch Limited NZBN: 9429 038 966 224
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