2019 Rīpoata ā-tau Report Annual
1 AgResearch G36 Driving prosperity by transforming agriculture Ānga taurikura whakamua mā te whakaumu ahuwhenua Contents
About us 02 Chair and Chief Executive’s review 04 Our strategy 08 Our strategic direction 10 Our Science Plan 12 Our research 16 Protected, enhanced and sustained natural resources 18 Prosperous land-based enterprises 22 Added-value foods and bio-based products that meet consumer needs 26 Our people, stakeholders and partnerships 32 Our people 34 Celebrating our people 38 Science New Zealand awards 40 Rewarding excellence within AgResearch 42 Our international connections 44 Our subsidiaries and joint ventures 46 National Science Challenges 48 Outreach 52 Corporate governance 56 Our Board 58 Statutory reporting – Board 62 Our Executive Leadership Team 64 Statutory reporting – Company 66 Performance indicators 68 Key performance indicators 70 Financials 74 Financial performance indicators 76 Consolidated statement of comprehensive income 77 Consolidated statement of financial position 78 Consolidated statement of changes in equity 79 Consolidated statement of cash flows 80 Statement of accounting policies 81 Notes to and forming part of the consolidated financial statements 90 Auditor’s report 110 Directory 112 About us 742 Science projects Ko wai mātou 295 Commercial reports 722 AgResearch staff 332 International collaborations
$116.3m Science net revenue
Scopus-index papers 1.29 published per scientist
Grasslands – Palmerston North Ballantrae – Manawatu Gorge About us
02 03 About us
Chair and Chief Executive’s review Ngā arotakenga o te Heamana me te Tumuaki Whakahaere
Our role as the Crown Research Institute (CRI) within the pastoral agriculture sector sees us working closely with sector partners to drive national and regional prosperity by transforming agriculture in New Zealand.
We are a key contributor to the diversification At AgResearch we have decided to embrace this of New Zealand’s primary industries and its challenge and exploit the opportunities afforded changing land use. us by refocusing and refreshing our Science Plan to bring it into line with the imminent changes. Three distinct trends are already starting to challenge the value we as a nation derive from We believe AgResearch, a world-renowned our primary industries: leader in land-based and food systems research, is uniquely placed to act as a thought leader and • Awareness is growing about the climate a bellwether for change. change implications of greenhouse gas emissions produced from intensive livestock We have an embedded culture of embracing farming; change and a history of adopting and adapting • The impact of alternatives to pastoral- technology to suit New Zealand’s agricultural produced meat and dairy products is needs, whether it be through animal genomics increasing and now clearly evident; and or by promoting farm systems for the • Consumers are changing in both their betterment of the environment. views and preferences in relation to meat consumption and their understanding of The challenges are considerable. But we are where food comes from, including how it excited to be partnering with key stakeholders and is produced. leading technology providers to do the science of today that will enable the pastoral sector to The position our farmers hold in the fabric transition to a more adaptive and sustainable of society, their social licence to operate, and the “bioeconomy” of tomorrow. markets they participate in are all changing at a rate never witnessed before largely due to the This year we started an 18-month research
Chair and Chief Executive’s review Chair and Chief Executive’s influence of the global digital revolution. programme we believe will help harness digital
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technology and transform New Zealand’s the Institute of Environmental Science and agricultural systems. Under the New Zealand Research (ESR) and Manaaki Whenua – Landcare Bioeconomy in the Digital Age (NZBIDA) Research, we won the Supreme Award for Best research programme, funded by the Ministry of Exhibit at the event. Business, Innovation and Employment (MBIE), we are exploring new “proof-of-concept” ways Stakeholder engagement continued to be a of harnessing the power that today’s data-rich major area of focus throughout the year. To world offers, on behalf of the farming sector. enhance our commitment to Te Ao Māori and Mātauranga Māori, we increased our Māori Our AgResearch Science Prize recognises agribusiness capability by adding resource outstanding achievement in research quality. to enhance our strategic partnerships across This year’s winners, Federico Tomasetto and Māoridom and develop Māori agribusiness Stephen Goldson, collaborated on a paper that research priority areas and strategic research described the potential impact of agricultural direction. This will enable AgResearch to monocultures on biodiversity as observed improve our understanding of, integration through the relatively rapid failure of biocontrol with and delivery of, Mātauranga Māori. agents. The Science Prize selection panel said that this paper highlights a previously unknown We continue to invest in our people across the relationship between ecological and evolutionary organisation. AgResearch launched our new processes in biological control that will have employee experience programme, Our Voice. potentially wide-ranging implications and impact. An annual engagement survey will now form just one aspect of our wider employee experience The AgResearch Impact Prize recognises the activities. The Our Voice programme will include achievement of outstanding scientific output new twice-yearly Pulse Surveys, and surveys that contributes to sector impact. The MBIE that specifically target the experiences that our funded “Boosting exports of the emerging people have during their time with AgResearch, New Zealand dairy sheep industry” was a including post-recruitment and on-boarding, deserving winner of the 2019 Impact Prize. exit and any significant change programme. The transdisciplinary science team, led by Linda Samuelsson, made a tangible contribution to As an outcome of our continued commitment industry growth in line with the objective of to ensure the safety and wellbeing of our growing the value of New Zealand’s exports. people, this year saw a marked improvement Moreover, their contribution across the in our health and safety performance across value chain – from on-farm productivity and the board. By focusing on our critical risks environmental impact through to consumer- and promoting a worker-centric culture, we focused product attribute verification – was experienced a significant shift in our lag and clearly evident. lead indicators this year with 47% fewer injuries requiring medical treatment, 57% fewer near AgResearch continued its engagement with misses, and 20% more uncontrolled hazards Government on climate change research. Our reported. Additionally, the improvements in scientists were involved in the development of our health and safety, and injury management an important discovery to help lower methane performance were recognised by the Accident emissions from animals. The findings have Compensation Corporation, with AgResearch just been published online in the respected regaining tertiary-level Partnership Programme International Society for Microbial Ecology accreditation in 2018. Journal. The science break-through received widespread media coverage. Our significant infrastructure programmes continue to make solid progress. The Joint Food National Fieldays held at Mystery Creek always Science Facility in Palmerston North remains on provides AgResearch with an important track for completion in the first quarter of 2020. opportunity to showcase our science to Work continues behind the scenes on ensuring stakeholders, the wider agriculture sector, a seamless transition for our employees to their and general public. This year’s event was a new building and new ways of working. major success for AgResearch and our fellow CRI collaborators. In partnership with Scion, Chair and Chief Executive’s review Chair and Chief Executive’s
05 06 Chair and Chief Executive’s review revenue andrevenue improved cost management. by an in increase offset separately owned, be Facility, will now which AgResearch Jointly-owned Lincolnin in University our the investment impairment isbudget primarily dueto $8.8m the loss of $3.1m.budgeted variance The to the June at 30 as 2019. This is FY19 than higher the is $4.8m tax loss before net and the budgeted $157.3m was revenue than higher is which $6.8m financialFor last year, the AgResearch’s gross financial new in year. the in organisational our wider change programme key milestones reaching about details further to announcingapproval more forward and look a Single Stage Business Ministerial for Case are timewe of close to writing, the At completing collaborators. andproviders private sector education jointly used by tertiary be that can our for build staff facilities independently town. in We the innovation plan to precinct research to and an developing education, Lincoln University, share who our commitment toconditional purchase land agreement from into AgResearch entered a co-location, partner and talent science for avibrantbeing attractor campus each on relies four-campus model thisour national Because and regional needs. and balance to our deliver on strategy model of our four-campus criticality the have reaffirmed (SAP) Panel Board and Advisory the our Science that been has outcome of review this strategic Plan. important Science An ouron refreshed to required and deliver facilities partnerships the months reviewing over on recent energies its AgResearch Board focused has The production. of future food to the facilities transform modern In Lincoln, AgResearch plans to in invest year.moving next early in readiness operation for systems IT effective and compliance and management, efficient issues like and safety, important health is through working Instituteand staff) Riddet (made up of AgResearch, Massey University interim committee management operating The AgResearch Chair, Dr Paul Reynolds QSO
the year ahead. the to contribute to Zealand’s New in prosperity to continuingmanagement forward team look for. Board and The arethat we respected excellence that science await and deliver the national the and internationaltackle challenges year AgResearch. We for are to uniquely placed In successful another summary, been has it AgResearch Board. addition to awelcome the have been and energy Waikato-Tainui. leadership, expertise Her legal of people representing the tribal authority the of arm Te executive the Whakakitenga oWaikato, year. Rukumoana of is Te chairperson Arataura, beginning financial at the of the Schaafhausen Rukumoana welcomed BoardOur of Directors contribution. valued their Frank panel,for the from retired O’Mara, who like to thank Brian Keating, German and Bruce of Wellington. University Weat Victoria would and Emily Parker, Professor Biology in Chemical OrganisationAgriculture United Nations; of the Columbia; Henning and Food Steinfield the from Systemsand of Food British University at the panel: Rickey Yada, Faculty of of Land Dean the the 2018, joined members In new October three us deliver our core purpose. that will transfer help of technology knowledge and programmes the scientific and direction, advice research on priorities provides strategic panel AgResearch Board. of The the direction at the established scientists and overseas-based panel made up Zealand of New independent is SAP at governance an The level. stability of organisationThe enjoyed aperiod has project. capital Precinct is Lincoln dueto delay of the the reserves increasein cash The reserves. cash higher income dueto than interest higher budget this year.costs In have addition, we delivered relocation and joint facility our restructuring in have main been The areas of cost reduction AgResearch Chief Executive, Dr TomRichardson
07 Chair and Chief Executive’s review
Our strategy Tā mātou rautaki Our strategic direction Tā mātou aronga rautaki
Over the past year AgResearch has continued to refresh its strategic position. We have refined our overarching strategy and developed the next tier of detail around our Strategic Initiatives in our refreshed Science Plan, a process that included extensive engagement with both internal and external stakeholders.
This vision is supported by a focus on the two broad areas of aspiration; developing the world’s smartest and most sustainable land use systems and developing the most sought- after, high value food and bio-based products. Applied consistently to these aspirations are the twin lenses of consumer focus and a systems based, integrated approach to science seeking to bring the best possible teams together to tackle both issues and opportunities, leveraging both the breadth of AgResearch capability and an extensive and developing network of external collaborators.
The breadth of AgResearch science capability, spanning the agricultural value chain, continues to underpin the organisation’s differentiated value proposition whilst ensuring a focused approach to delivering the stated impact of increasing the value of New Zealand’s exports. All the while enhancing our environment and optimising land use outcomes.
The AgResearch strategy is well aligned to government priorities and will support accelerating the shift from volume to value agricultural production, enabling the transition to a productive, sustainable and low emissions economy, and directly support
Our strategic direction thriving sustainable regions.
10 Aramoana AgResearch’s vision remains unchanged — to drive New Zealand’s prosperity by transforming agriculture.
Driving prosperity by transforming agriculture
Our consumer-centred, system-based science drives the world’s... Our Strategic Initiatives
Smartest, Most F Financial Strength most sought-after sustainable food and land use bio-based R Revitalised Science Plan systems products O One AgResearch
N New Ways of Working Our tohu represents how Our integrated research Transforming through AgResearch reaches for the stars capability is embedded with our T while staying firmly grounded. commitment to Te Ao Māori. Technology
Increasing the value of New Zealand’s exports while enhancing Our Impact our environment and optimising land use
Five critical strategic initiatives have been O One AgResearch – Investing in an aligned identified to underpin, direct and facilitate our organisational culture that is innovative, organisational performance: energised, vibrant and collaborative. – Financial sustainability New Ways of Working – Implementing the F Financial Strength N allowing reinvestment into science four-campus model, including new facilities, capability and capacity over time. and developing research, innovation and education centres facilitating collaboration. Revitalised Science Plan – Creating R This means investing in people and enduring value via integrated and focused processes to support the transformation areas of research that capitalise on process. emerging opportunities from rapid changes in food and farming technology, science, T Transforming through Technology – consumer drivers and environmental Embracing technology to change the way constraints. we deliver science and to improve enabling
systems and processes to enhance impact. Our strategic direction
11 12 Our Science Plan Tā mātou mahere pūtaiao Plan Science Our activities across the science and science support space. space. support science and science the across activities to our organisation’s strategic and operational thinking and The AgResearch Science Plan aims to the be cornerstone to i) operationalise plan, ii) the direct measures quantitative and process-oriented of This aseries process introduced intensity of area. focus each and mapsheat to relative show importance the indicators and key performance metrics, impact and define toinvolved workshop over aweek organisation.wider We to get invited our people In June 2019, to out the AgResearch reached into Overarching Principles. three originallyand developed outcomes the named defined further were From Objectives the here, customers. and choosy transformative technologies world, awealthier abumpier ride, a hungrier world, and were: national prosperity. These sectoral our and, therefore, systems production and environmental sustainability of our food economic driving future the macro-trends Plan to SAP. the five identified then SAP The 2018 Science In October draft the introduced we stakeholders. external and internal following consultation with refinements several through Plan AgResearch Science been has The
with the final Plan. Science the with financial year along confirming next in the these to WeOverarching forward Principles. look to align our date with are developed being “Challenge Targets” level a2030 delivery with a result of refining Plan, ourAs Science national- • • • • • Plan Science include: the for drivers Critical AgResearch to stakeholders. value and future of current demonstrate to communicatea robust framework and and iv) provide structure delivery science of our core iii) elements the define priorities, decision-making investment science on Creating aculture of innovation excellence. science; and of our and impact deployment Accelerating capacity; innovation support Maximising value of the our and science AgResearch; differentiate that synergies particular Identifying success; that define targets Providing and science innovation specific resources enhanced and sustained natural Protected, goals Plan: strategic Science in inherent the the summarise following Overarching Principles The contributing to positive impacts. tools; on scientific focus andof the new availability innovationagricultural the system; in the actors of and existing new diversity the across national, global, scales; regional and local and challenges opportunities of the complexity value chain’ the approach, acknowledges which of a‘whole Plan AgResearch Science reflects The Principles Overarching
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13 Our Science Plan 14 Our Science Plan D. C. B. A. Objectives. of each for these developed have been metrics quantitative impact Plan. Specific to required deliver the areas of activity the guide Objectives Science highlySeven interconnected Objectives Science Our
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15 Our Science Plan 16 AgResearch Our researchOur Tā mātou rangahau 17 AgResearch 18 Protected, enhanced and sustained natural resources resource boundaries at the global and local scale. Our land use must operate within natural sustained naturalresources Protected, enhancedand Turuturu Measuring and modelling nitrate losses and urine patch size effects. and edge post-ruminal aminounderstanding acid flows previous on FRNL focused two SSIF projects changes of nitrogen. augments This work of asimulation dynamic the modelling for tool of development FRNLA key output the been has Research. Landcare Research and Manaaki Arable for – Whenua Research, Lincoln University, Foundation the Zealand, New +Lamb Plant and Food Beef those and of resources DairyNZ, with expertise It levels. combined AgResearch’s production maintaining while by 20% and/or boosting sector leaching losses across primary the Leaching” (FRNL), to that aimed nitrate reduce Nitrate programme, “Forages Reduced for In 2013, MBIE asix-year funded research harm. ecological is an and environmental causes pollutant (nitrogen of nitrate) form in the inwater fresh nitrate-nitrogen micro-organisms. Leached and used by plants be can it soilfrom before nitrate drains when occurs process, occurring soil. Ninfor the Nitrate leaching, anaturally abundant most nitrateprimarily mineral –the as take up nitrogen plants Agricultural growth. Nitrogen (N) is an essential plant for nutrient outcomes beyond the term of its contract. contract. of its term the beyond outcomes of overall programme successful delivery the and willcontributed, continue to contribute, to and in tools this produced have SSIF project 2019,September research and outputs the FRNL wider The programme is to due in end and, eventually,level, level. farm also whole the individualthe paddock the urine patch level, are available calculating for nitrogen loss at APSIM for and developed havemodels been FRNL wider crop the programme, new five previous and from years, from generated data Using thisto SSIF impact research project. pathways and effective platform an excellent This international collaboration provided has of Queensland. University Queensland and the Research Organisation (CSIRO), State of the and Industrial Commonwealth Scientific include foundation members APSIM. Other maintenance and commercialisation of 2007, AI is responsible development, the for APSIM Initiative (AI) in 2015. in Established formally joining years before several for the of APSIM involved development in the actively AgResearch was management interactions. a range of animal, plant, soil, climate and info) contains asuite that simulate of modules internationally, (APSIM; tool the www.apsim. used in Australasia and Extensively A B 19 Protected, enhanced and sustained natural resources 20 Protected, enhanced and sustained natural resources species, as of July as 2019.species, across than including more 75 taonga 20 species, samples in-house processing over 400,000 of GBS application, benefits the demonstrated commercial companies, this programme has CRIs, research organisations, universities and in other collaboration our with Through work research and commercial cost. at alow purposes tools to routine enable usestatistical of GBS for and bioinformatics laboratory, developed has economy”, in a biological and security production by MBIE, for Programme funded “Genomics Enabling Technologies gold-rated three-time The SNP chips. userequire the of pre-developed not and does GBS complexity genome reduces studied, to genome be of the a small fraction and allow for into genome divide fragments the that using Through years. recent enzymes (GBS) increasingly popular in become has genotyping-by-sequencing low-depth method, and cost-effective more afaster expensive. As panels, SNP or SNP chips. These chips are single-nucleotide-polymorphism (SNP) genotype Traditional use the genomic on analyses of rely improving of species. endangered rates survival for efforts genetics also used to be support can same technology The production. livestock and sustainability in crop and productivity gains and inanimals plants improving for accelerate genetic can inAdvances genomics economy biological a in security and production for Genomics inbreeding. and assist to managed breeding minimise relationships to assess fitness population of genomic studies enables system genotyping parrot, endangered low-cost critically flightless native a kākāpō, populations, the such as Similarly, Zealand New many for important exists. sequence genome of the knowledge discoveries prior no where SNP to industries for make genome-wide manner. This makes easier it a cost-effective range of awide applications for in sets data marker genetic possible high-density to develop samples. It made it has number of biological tochange ability rapidly analyse in the alarge astep research represents as programmes, well of GBS implementation inThe commercial, as clover. white and ryegrass species, forage the benefitted and lab protocolsDNA sample has collection of enhancements adjustment), and further (i.e. Kinshipmethod using GBS Depth with through novel statistical genomic selection, of optimised aGBS for development system the In particular through genomic selection. tools available, inhibiting improvement genetic are limited there which for genomic products basis the that form of export high-value species ZealandNew many has important economically diseases by 50%. and pests damage the reduce by caused targeted could commercialised by programme partners, once that, prototypes biopesticide three least at aim to programme was develop ofThe the Zealand. New commercialisation in and uptake of biopesticides linkages underpinningnew development, and Zespri), programme established has the Research, Grasslanz Arable for Technology Ltd Foundation UPL Ltd, (Agrimm Biostart, Ltd, partners industry with ourThrough close work and Centre Lincoln University. BioProtection AgResearch, Plant Research, &Food between (NGB)Biopesticides” is acollaboration Generation Research Programme “Next Zealand.New Funded by MBIE, an Endeavour available are currently in biopesticides few Very environment and human health. and threat less pose to the residual effects no or have little biopesticides substances, use.agricultural Made naturally from occurring are available for pesticides and fewer fewer molecules, cost of novel chemical development resistance high and the ofincidence pesticide to increasing the Due concern. and safety health amajor have environmental, and food become However, residues in soil, air, pesticide water in role intensification. agricultural important have an played pesticides chemical Synthetic biopesticides generation Next NGB team, Aureo by the developed for kiwifruit bio-bactericide new A sectors. and arable horticultural pastoral, the commercialisation for toon partners and use in passed have been prototypes Five biopesticide organisations. ranging national from to multinational partners with commercialunder agreements programme of are evaluation at various stages microorganisms within the identified biopesticidal prototype three A further alimited claim. label with ACVM from registration Kiwivax™ obtained has glasshouse from results on trials, Based plants. resistanceoccurring mechanisms within infected naturally by boosting vines symptoms in kiwifruit Kiwivax™. Psa-V This reduce can root drench programme combating for disease is kiwifruit during this developed biopesticide A second produced. will planted be of kiwifruit hectares 13,000 the to of treat alarge percentage product sufficient For 2019 hours. within 72 the out sold season, product of the limited-volume release first The of solution to management the alocal offers agent to market in November2018, biocontrol the Zealand. in New (ACVM) registration Launched Compound Medicine and Veterinary Agricultural Pseudomonas syringae Pseudomonas ® Gold, has completed its full full its completed has Gold, pv. actinidiae (Psa-V). 21 Protected, enhanced and sustained natural resources Prosperous land-based enterprises
New Zealand’s regions still depend on primary production to deliver inclusive and equitable wellbeing that flows on to national benefit. Prosperous land-based enterprises
22 Niho Taniwha for better performance better for nutrition animal life early Targeting role in lamb survival. A triplet-bearing-ewe inrole lamb Atriplet-bearing-ewe survival. plays acrucial nutrition and neonatal Pregnancy major industry. challenge the for compared 82.6% single for with lambs) are a lambs (59.3% of multiple-born rates triplets for to1990 127% in 2017. However, survival lower in lambing increasing 100% from percentages increasinglyhave common, become with multiple lamb births decades, two In past the proposition of nutrition. investing in early-life value lifetime the base for evidence a strong have interactions built feed-microbiome-animal investigations into partners, and industry University,Hohenheim Wageningen University Davis, UC Agropecuarias, Investigaciones de and international Instituto from researchers In involving collaborative work AgResearch life interventions. through early particularly efficiency, production to and animal improve reduce strategies wastage of novel resources and development feed pasture use of local through efficient more performance animal programme aims to enhance whole-of-life Nutritional and MicrobialLife Strategies”. This Systemsin Pastoral through Targeted Early of Ruminants “Improving Performance Productive is funding platform Production SSIF Agri-food To the under this aprogramme funded end, animal feed. alow-cost as pasture use of efficient the on depends industry livestock Zealand’s of advantage New competitive The
posed by the slaughter by calves. the ofposed bobby threat to Zealand’sthe New market reputation minimising veal/beef for calves production, to use surplus opportunities contribute to new may also These efficiency. production dairy-beef to increase strategies with farmers provides beef ANZCOwith Foods, Foods and FirstLight inquality. partnership This research, conducted compromising and yield meat or growth lifetime without have demonstrated alsobeef been grass-fed toStrategies achieve whole-of-life maintaining traits. and quality carcass meat other marbling (a desirable eating trait) quality while changes in with associated were interventions nutritional pre-weaning Furthermore, impact. time to slaughter and reducingenvironmental reducing thereby life accelerate growth, can seven months of acalf’s first in the strategies that nutritional programme demonstrated has This production. are beef for reared industry dairy in the born calves of the yearEach around 30% winter feeds. options using for of practical cost-effective delivery ofoutcomes this research will contribute to interactions, and stakeholder farmer Through and growth. survival lamb multiple-born to influence supplements nutrient alsohas potential specific for the shown crop. It afodder fed in weight ewes lamb birth condition to and normal maintain body ewe protein for of balanced intake diets importance trial in the this programme demonstrated has 23 Prosperous land-based enterprises 24 Prosperous land-based enterprises Adding value to forage funding platform, the “Forage Value” the funding platform, Production Funded SSIF the under Agri-food persistence traits. content and energy metabolisable yield, matter seasonal their value on dry of based cultivars value and economic evaluates performance the FVI by AgResearch. The developed (FVI) Index Research using Association Forage Value the and Zealand New Plant with DairyNZ Breeders Toolan online Cultivar built by was Selector system, and farm region their for cultivars suitable ryegrass most the select to objectively across country. To the feed farmers dairy help are used animal for characteristics varying with Zealand in grass pasture New and cultivars common is most choice of the Ryegrass profitability. and resilience resources,optimise achieving greater feed life of and pasture the prolong can farmers climate and soil, system, farm to right the and cultivar matchingBy plant species right the and performance. improve production pasture Investing can in renewal pasture system. production Zealand agrass-fed on operate in farms New and deer of dairy, sheep, beef majority and the exports, reliant primary on grassland. Zealand’s New is economy heavily half –13.2 About –is million hectares hectares. ZealandNew atotal million has land area of 26.8 environmental and economic benefits. will have which application rates, both fertiliser in phosphate potentially allow areduction findingscompanion will These clover plants. of and growth promote the uptake by 30% soilfor phosphate phosphorus increase can ability competitive reduced its but plant growth, and on dense less root hairs not impact do shorter with that ryegrass findings indicated Other urine patches. indeposited livestock potential amount tothe of the nitrogen reduce thicker leaves and with developed been has clover hybrid angermplasm from interspecific discovered programme. Novelbeen by the have pasture of grazed environmental impacts lower with associated A number of plant traits requirements. and regulatory mitigation strategy according catchment the for cultivars to their suitable most the to select will allow farmers ranking FVI inan the environmental benefit Including and strategies. directions breeding thisfrom programme mapping for future Zealand,in will New use who knowledge companies all from seed representatives It comprises FVI. of the development practical Technical Working Group is responsible the for expansion. Forage future Value The its as well as of FVI underpinning development the knowledge fundamental programme the investigates Otago University and Lincoln University University, Otago and in collaboration with research isThe conducted targets. and profitability productivity 10-year to industry’s achieve the Partnership Growth “Passion2Profit” the Primary supports it DEEResearch’s 2015 Strategy, Science –2020 Zealand New (DINZ).Industry with Aligned AgResearch and Deer between partnership via DEEResearch ajoint Limited, venture industry deer the from co-funding long-term significantThis programme secured has knowledge. and improving system farm gains accelerating offor genetic rates in deer underpinningthe and science technology programme investigates profitability” industry deer for targets “Hitting the funding platform, Production Funded SSIF the under Agri-food and increasing environmental regulations. consumersdemand from production ethical for growing parasites from challenges and stress, face farmers as important more have become objectives and breeding characteristics genetic other selection, breed for key criteria the as remain traits yield antler and velvet growth While traits. performance progress in on-farm made significant has breeding genetic Deer alternativefrom land uses. returns and strong fluctuations price commodity to due decade almost halvedpast over the Zealand in New numbers have deer farmed venison. deer However, world’sof the traded internationally and supplies than more 50% Zealand New farming dominates deer profitability industry Hitting deer for targets
as alandas use. farming viabilityof in deer confidence the farmer by minimisingprofitability losses and growing will outcomes contribute to improvingThese and resilience across industry. the productivity contribute to increasing gains of genetic rates in will which outcomes, breeding specific base for building and welfare, evidence health astrong with thisOverall, programme genetics integrates to parasitism. that are resistant deer for potential tothe breed will give into industry incorporation DEERSelect recent programme. Its by the investigated by animals,are trait ingested latest the was parasites when triggered measures antibodies antigen (CarLA), larval which Carbohydrate indices. economic and providing values and breeding estimated of animals merit evaluates genetic by calculating (trait) records and and performance pedigree DEEResearchfrom database stores The Limited. support by AgResearch with developed was recordinga national deer database, DEERSelect, animals superior breeding, for select objectively To and commercial farmers breeders stud help resistance to host parasiteparticular infection. in traits, difficult-to-measure for selection improving ofvalues, genetic accuracy the to breeding inform future routine genotyping programmea comprehensive with phenotyping DINZ from and Pāmu. It integrates support with 25 Prosperous land-based enterprises 26 Added-value foods and bio-based products that meet consumer needs generated economicbenefits. generated value-based systems where producers share in the Transform volume-based production systems into needs consumer bio-based productsthatmeet Added-value foodsand Ngā Tāngata
Food provenance and assurance assurance and provenance Food of bacteria in various parts of the supply of chain. the in variousof parts bacteria investigating transmission the paths and survival by challenges industry these confronts Provenance“Food and Assurance” programme the funding platform, and Services Product Funded SSIF the under Premium Agri-foods, andthrough marketing. to packaging, transport and animaland processing welfare, practices farming from This applies tosystems. everything visibility and assurances within our food end-to-end for is an now There urgent need and integrity. brand and product reputation, at risk put which our market products, challenge is counterfeit life.shelf Afurther product and reduces wastage increases which resistantmore to and heat various disinfectants, have and industries meat become dairy in the bacteria Spore-forming worldwide. concern and public health safety agrowing food become producing shiga pathogens, such as toxin-bacterial solve. food-borne For can science example, that challenges only faces However, sector the systems. production food around and sustainable ethical requirements consumers’standards, and to meet increasing safety high exceptionally food with food to our on ability high-quality produce depends economy. success future sector The of the Zealand New the underpin exports Agricultural (STEC) bacteria, have bacteria, (STEC) coli Escherichia postdoctoral positions this under programme. postdoctoral through collaborative PhD and is developed being which industry, of the growth future the for critical Omics) (Micro-Food is technologies phenotypic use. in genomic advanced Capability and others China, United European States, the the Union and surveillance granting for tool market access that WGS and is mainattribution. the regulatory and source to investigate microbial ecology arrays and phenotypic methods metagenomic (WGS), sequencing genome whole such as ofadoption data-intensive safety, tools in food and is rapid emergence the industry food Zealand New challenge the for future Another imaging to dairy. of applying hyperspectral users potential in the of multiple industry interest attracted has research output The determined. in to this operate area been has and freedom powders, of dairy integrity the authenticating for adopted be can non-invasive system that a programme demonstrated has The industry. dairy sheep the to extended companies, this been has dairy work of sheep to co-operation Thanks the farms. dairy in bacteria spore-forming made in identifying environment. Similarly, progress been has good seven major farm the serogroups dairy in the of prevalence the about known was little very to prior this programme STEC, for key reservoir While young calves have been identi young haveWhile calves been fi ed as a a as ed 27 Added-value foods and bio-based products that meet consumer needs 28 Added-value foods and bio-based products that meet consumer needs Unlocking value from the whole carcass compositional and functional properties of meat of meat compositional properties and functional the and exploiting that understanding Major Zealand New recognise processors meat and markets. production overseas and insights and needs into local stakeholders’ It incorporates of components. carcass composition the on programme focuses Value Carcass” “Unlocking Whole the from the funding platform, and Services Product Funded SSIF the under Premium Agri-foods, applications found. sophisticated could be and more used efficiently more could be and co-products parts lesser increase if the value Carcass would cuts. tender more that yield to techniques isolatedeveloping muscles in ways deliver 45%but of value. carcass Research is comprise carcass the 23% only of weight carcass middle of the taken from cuts tender most The meat. and of aged trait fresh a desirable quality are to pinned prices Current meat tenderness, industry. the for is akey challenge sustainable growth long-term earning $7.2 Achieving revenue. billion in export in to 120 customers countries, different exported and slaughtered, were processed and cattle March 2019, approximately 26 million sheep earner. In year to the exporter second-largest is Zealand’s New industry meat red The prepare and enjoy meat. consumers’ to ways select, demand new for abattoir initiatives and accommodating between professionals service to loop and food close the butchers chefs, research. It local is with working in that advancing might participate thisretailers and teams reaching to out when manufacturers draw AgResearch’s on customer-facing support programme team continues The future. to the to anticipate consumed will meat be how in designed have concepts been novel food meat, of in nutritional trends re-purposing and the solution companies’ food targeting By interests manufacturing. business their that are willing to to food extend Zealand New for processors meat opportunities 4% offers rate, which compound annual growth volumes are trade growing at food processed requiringor minimal preparation time. Global meals such as ready-to-eat formats, friendly in consumer- delivered or foods in processed surpasscan familiar is it uses used when table value of the meat carcass, the from Downstream of animal resources. implications maximising for utilisation and value business-as-usual with abattoir practices, beyond opportunities reveals additional product this programme of work The market. modern the in exports their towill differentiate them enable the industry faces, as noted above, noted and as enable faces, industry the to guidelines challenges address the practice and on-farm knowledge of data, collection a with industry emerging the provided Industry”, has Sheep ZealandNew Dairy Emerging of the Exports “Boosting titled 2014. early from by MBIE, Research funded milking up 15% ewes, approximately 30,000 has industry Currently, dairy sheep the growth. milk supply and industry restricting entering this from market, farmers deterred has farm on and productivity performance Similarly, lack of in robust data the animal capability. processing to due inadequate range of viable products milk of limited sheep and the benefits health the for lackevidence of back by scientific the held consumer demand and acceptance been has of However, industry. dairy growth sheep the the for is asignificant market opportunity growing consumer foods demand healthier for and vitamins essential to human The health. oflevels proteins, lipids, and minerals some than that of goat and cow higher milk, with milk nutritional value of sheep isThe higher supplyingmarket, 1% milk of production. world asmall niche serves industry dairy sheep The industry sheep dairy Zealand New Boosting of the exports emerging
from 120–130Lfrom to 200–215L ewe. per season, lactation per by 25–70% increased has and milk fallen has production lamb mortality have that confirmed farmers protocols, partner animal and lamb-rearing nutrition better Through levels. andoutcomes milk production solutions improving for lamb-rearing health, ewe tailored during this programme developed has research conducted In addition, on-farm options. treatment through ultra-heat as life shelf of liquid milk, the such sheep extending of processing for development methods the programme in been has the breakthrough recent most The health. intestinal on and bone effect milk, unique of including sheep its properties anumber of health have characterised Human in this nutritional studies programme systems. farm dairy sheep environmentally friendly and by profitable underpinned products to milk create sheep high-value export industry basis scientific builthas acredible the for partners, and industry of Otago University Callaghan Innovation, Institute, Ferrier the the AgResearch, inindustry. collaboration with toit into transform amature export high-value
29 Added-value foods and bio-based products that meet consumer needs 30 Added-value foods and bio-based products that meet consumer needs and products fibre to novel value chains Transition mapping of Ngāti Porou food Pūnaha Hihiko: Vision Capability Mātauranga novel value chains”, by MBIE’s funded was Te to and products fibre of Porou Ngāti food “Transition project, mapping follow-on The agribusiness value chains. cultural provenance of Māori and value-add is tool used being at the huiThe to explore mātauranga” “Fill or your basket of knowledge”. te kete responsive “Whaowhia called tool Runanganui a culturally Porou o Ngāti developed of businesses by Temembers owned During 2017 and 2018, AgResearch and communities in Aotearoa. toto and iwi initiate social and cultural benefits Zealand, in New iwi designed second-largest the Porou, Ngāti aclose collaboration with forged Zealand New in the economy. AgResearch has role agribusinessesMāori play an important • • • • project: in the Holding (NPGHL) Ltd exemplars used as were of business Porou within Ngāti Group units Porou, Ngāti anumber with In partnership the principles. agribusinessesMāori co-innovation on based transition mapsdeveloped real-world for Building previous on research, this project Fund Investment Strategic Science in 2018/19. Fund and AgResearch’s Agribusiness Māori production and export. and export. production and log –forestry PorouNgāti Forestry and production; wool Pakihiroa Farms (PFL) Ltd and meat –red Porou production; Ngāti Miere –honey processing; and Porou –fishery Ltd Ngāti Seafoods
These business units executed transition businessThese executed units supply chain. primary productsbeingincludedin Air NewZealand’s chain opportunitiesresultedinsomeofNgātiPorou’s This relationshipwasthenstrengthened,andnewvalue • • • • maps to: a potential value chain. discussions within entities other with and transparent honest open, Underpin and to value chain partners; to offering broaden their arrangements and business existing new Leverage and threats; response to rapidly evolving opportunities in value existing chainsparticipation in and/or of level their Modify extend value chains;new into Move of products some their
supply chains cultural values. in its line with of improvements its mapping and plan further NPGHLenabled to gain in confidence transition successful transitions risk” “low These have Zealand’s in Air New included being supply chain. (e.g., smoked fish and mānukaproducts honey) inresulted of Porou’s some Ngāti primary that value chain up new opportunities opened It This relationship strengthened. then was deal. offset acarbon and contract Cape East the arelationshipestablished to tourism expand on In particular, Porou Zealand Ngāti and Air New 31 Added-value foods and bio-based products that meet consumer needs 32 AgResearch me ngā Rangapū Ō mātou kaimahi, te Hunga whaipānga partnerships stakeholders people, Our
and and
33 AgResearch 34 Our people To tātou iwi people Our innovative, energised,vibrantandcollaborative. OneAgResearch meansanalignedculturethatis To ourpeople,includingpartnersandstakeholders, Our focushasbeenonbuildingOneAgResearch. us to identify the capability required to required ensure capability the us to identify helps planning robust workforce Our framework workplace. andpositive, values-based engaged a constructive, and that uphold behaviours growing skills on that focuses the development and programmes cultural development leadership through targeted capability to enhance leadership their our people support acrossmindset” organisation. the We We to are a“growth fostering committed –regardlessdeliver significant of role. impact to sustainable environment our thatstaff enables disciplines. We in and asafe, healthy operate in are own their specialists who staff and support science includes team people Our of around 700 future. of challenges the position the us to meet and will our organisation’s expertise collective do, will strengthen they at what best are the who people the and retain This culture will attract
customer relationships.customer innovative amore to engender approach to approach to and mindsets challenge current potential. We have adesign thinking adopted and leadership talent emerging and to identify continuethat we science to right deliver the organisation’s initiatives. strategic that are to aligned projects of strategic a set pillars, have of we each these Under established 4. 3. 2. 1. consists of four pillars: Strategy People Our Our Strategy People
People Information People Change Management Employment and Industrial Relations Talent and Leadership checking in with our people three times ayear. times three our in people with checking transitioning an from annual to survey (previously Engagement) Programme by We have improved our Employee Experience another. one and support acknowledge we how to respond issues we at AgResearch, how and another one with determining interact we how values continueOur adriving to force be for culture values-based Building an engaged, to nurture will our help people in this strategy initiativesand harassment The workplace. in the bias and defining our zero bullying tolerance for raisingstrategies, awareness of unconscious opportunity that will equal employment include and Inclusionare aDiversity developing strategy safe environment. We working psychologically toinclusivity and are we delivering a committed We and promote diversity and celebrate Inclusion and Diversity 100 Employee engagement profile Gender 60 80 40 20 Female Male 0 June 2016 June June 2017 June 48 52 July 2017 July 61 47 53 June 2019 June June 2018 June July 2018 July 65 48 52 45 July 2019 July 55
68 factor to our improved in this results factor area. contributing isapproach, believe, aprimary we organisation. This collaborative and consultative in achieved aresearch be can of engagement Working high how Group levels to understand We have an Employee Experience established do. we in everything Māori and to employees embrace Mātauranga science hardworking to number of Māori increasethe Additionally, internationalwelcome talent. are we and Zealand,New and continue we to attract We are Immigration an employer with accredited our organisation, and stakeholders. customers and of uniqueness appreciate and the diversity response rate. our increasing on focus to We continue survey. the to responded 2019, employees our of In July 77% years. three last the over year each rate significant astatistically at increased has engagement Employee Ethnicity profile Ethnicity Australia, 1 Australia, Africa, 1 North America, 2 America, North South America, 2 America, South NZ Māori, 3% 3% NZ Māori, United Kingdom, 4 Kingdom, United NZ European, 61 NZ European, Other Other Un nown, 6 Asia, 11 Asia, European, 9 European, 35 Our people 36 Our people • • are to: change objectives The environmentworking coming in the year. to asuccessful facilitate transition to new the arobust change programme havewe developed JFSF, to new the preparation our for relocation teachingworking, and research environment. In will provide amodern North Palmerston in Facility Joint Science Food (JFSF) The buildings new for Preparing through our people. achieved will Hou be behave. Ara He we how environmentworking also but in our culture and changes are not in only required our physical organisation. To vision, Hou achieve our Ara He and measure this across will we support the of our what NWOW and how will be aspects all define to clearly developed been has WaysNew of Working (NWOW) Framework, our of ways “new working”. our Hou, Ara He We have organisational astrong on focus He Ara Hou (New Ways of Working) management across AgResearch. and change approachcapability to supporting We will continue to building on focus our • • • • are: support to change are engaged we programmes fully The management at AgResearch. and comprehensive approach to change is to provide intended aconsistentmethodology, Prosci on Management based Framework, proficiently.more AgResearch Change The andembrace, adopt use change quickly and to our people and encourage and we support cultureOur is of transformational one change successfully change Driving and Food HQ;and Food JFSF of the and cultural objectives strategic to to follow realise need and students and staff protocolsprinciples that leaders, NWOW and embed guidingDevelop Institute; of AgResearch, Massey and Riddet University desired culture the JFSF the for that supports andShape collaborative astrong culture (Waka)implementation Management Software Project AgResearch Lincoln FacilityNew FacilityJoint Science Food WaysNew of Working
• • use Te work. in our Māori day-to-day Reo to days and encouraging ourInduction people Week), into our pōwhiri incorporating Corporate and Te oTe Wiki Language (Māori Māori Reo language and Matariki culture celebrating include Informal to approaches Māori embedding lessons. Māori Marae Noho and along te with reo workshops, in Vision initiatives, Mātauranga panels and way of doing things”. are participating They Treaty of Māori Waitangi and –“the Tikanga provide to the gain about an understanding we in arange ofengaged formal opportunities our culture. Additionally, are actively our people of into fabric concepts the Māori Mātauranga integration of the toWhatu rōpū support We Kāhui Tikanga have the established projects. scientific and important mutuallyon beneficial iwi collaborate with we as closely of our work We in all embrace Māori Mātauranga aspects capability cultural our Building this programme. year, of phase first the will we implement In coming Framework. Hou the Ara He the with builds Values Our on Framework and is aligned Leadership Person entire culture. the on Whole and have effect talk” aripple the “walk authentic, are empathetic, They and competence. character relationships, profits, results, value people, They are total on successful impact. based Leaders Person AgResearch culture. Whole aOne akey to enabler as embed identified that been has projects is strategic of the one programme Leadership Person Whole The impact. with work their to and inspire to build trust deliver people their organisation to self-awareness increasetheir and across our leaders all of levels the supporting continued area of We focus. to are committed is a Enhancing leadership effectiveness purpose with Leading organisations. partner from alongsideworking colleagues and environments, in open facilities, NWOW new in required the that will be the for andPrepare students employees environments; and work new of the view Create apositive and future-focused
Years provide our people managers with asingle managers with point provide our people will platform new The and Payroll system. Human Resources Information System (HRIS) a that includes information platform people We have to design begun anew and implement information Technology people driving 12 15 Employment type Average tenure 0 3 6 9 June 2016 12.55 June 2017 12.67 June 2018 12.31 Part time, 22 time, Part Full 78 time, June 2019 who willdrivethesuccessofourorganisation. Our Values representtheattributesthatareinnatetothose 11.49 integrity and access for our people data. and access our for people integrity of andprocesses accuracy, deliveragreater level automate and streamline people-related information, of access all for people-related increasing our response rate. response our increasing on focus is acontinued there and survey the to responded 2019, employees our of In July 77% years. three last the over year each engagement employee in increase significant astatistically been has There Age profile Age turnover Employee 10 No. employees 0 2 4 6 8 200 100 150 50 June 2016 June 0 6.14 20 1 20 56 – June 2017 June 29 8.03 30 155 – 39 40 188 June 2018 June – 49 7.97 50 191 – 59 60 June 2019 June 98 – 7.28 69 70 8 37 Our people 38 Celebrating our people Whakanui iōmātou kaimahi people our Celebrating and will serve for a maximum of three years. amaximum for of three and will serve Fund by the Council recommended being after Te Royal by appointed the was Society Apārangi Julie Panel. Assessment Physiology Molecular 2019 the on serve Marsden Fund Cellular and to team, appointed and Health Nutrition was Julie Food Dalziel, the from Senior Scientist Julie Dalziel within New Zealand’swithin New industries. primary of professionals rural and capacity operating Institute, is purpose whose to capability build the profession to rural contribution the and to the This Management. recognises his outstanding Zealand Industry New Institute of Primary Research aFellow of Farm, the became Manager Hale,Tim Operations at Ruakura Hale Tim New Zealand.New bovis of Mycoplasma eradication the advice and recommendations to support SSAG Advisor John Roche. Dr Science provides Group (SSAG) Chief ministry’s chaired by the bovis Mycoplasma Industries’ Primary for to join Ministry the Systems and Environment team, invited was James Turner, Farm in aSeniorthe Scientist Turner James Strategic Science Advisory Advisory Strategic Science in John Caradus
John Caradus, the Chief Executive of our subsidiary Grasslanz Technology Ltd, received Life Membership of the New Zealand Grassland Association. The aim of the association is to enhance pastoral agriculture through providing a forum for communication of science, technology and knowledge.
Geoff Asher
Geoff Asher, a Senior Scientist with the Farm Systems team, and based at Invermay, received the Deer Industry Award at the industry’s 2019 conference. Geoff is a leading deer production scientist and has been involved in deer research for over 40 years – almost all of his career. He co-ordinates the “Hitting Targets” programme of deer research carried out by AgResearch for DEEResearch and is the lead researcher for several of its component studies.
David Hume and the AgResearch Endophyte team
David Hume, acting Science Impact Leader, and the Plant-Fungal Interactions team won the AGMARDT Technology Transfer Award for their development of the ryegrass endophyte strain AR37 and the transfer of this technology to New Zealand’s pastoral industry. AR37 has made a significant positive impact on the industry since its commercial release in 2007.
Barbara Barratt
Barbara Barratt, a Principal Scientist with the Biocontrol and Biosecurity team, was the recipient of a New Zealand Plant Protection Medal awarded by the New Zealand Plant Protection Society to honour those who have made exceptional contributions to plant protection. Barbara pioneered international strategic research into the biosafety of introduced
biological control agents for insect pests. our people Celebrating
39 40 Science New Zealand awards Ngā Tohu Putaiao oAotearoa awards Zealand New Science Ngā Tāngata Agricultural and Horticultural Science. Science. and Horticultural Agricultural Zealand New of the Institute made afellow of Zealand recently New was he science, agricultural and mentor. For his to contribution career collaborator and atrusted sector pastoral the for is He leader athought proceedings. and chapters conference book journal papers, over 150 with species, forage on peer-reviewed of aprolific author publications Jim been has and function. root form for clovers, and ryegrasses especially screening plants, for and application of methods development the been has research achievements recent of Jim’s benefit Akey demonstrated pastures. sustainable for cultivars of forage development underpinning of roots the and physiology including morphology the plant species, of pasture of ecophysiology research the on For leading at 45 the edge Jim years, been has AwardIndividual Achievement Lifetime Crush Jim
analysis and distributional their properties. microbial partitioning, sequence genome discovery, gene on focus aparticular with populationslivestock using linear models mixed analysis and statistical programmes, breeding of genomicincorporating information into livestock specialisesShe in analysing and practically and deer. sheep, for programmes cattle Group and is involved genomics in livestock Animal ofSuzanne the Science is part Researcher Award Career Early Rowe Suzanne Dinner in November 2018. November in Dinner Zealand National Awards New received their awards at the Science who winners the Congratulations to
members: Departed Kaminsky. Rachel and Crouzet Laureen (middle Biswas, right), Leahy Ambarish Sinead Soni, Priya Schofield, Linley Sang, right), Carrie Reilly, Ronimus Ron (far Kerri Pacheco, David Moon, Christina McCarthy, Allison Kirk, Michelle (middle left), Janssen H. Peter Heathcott, Rosemary Carbone, Vince left), (far Attwood Graeme Aplin, Jacinda Andrews, Catherine 2019: 1July of as members team Current against climate fight the change. Zealand leadership of New the in demonstrating of globalresearch programmes, development emanating in the this critical from team been has research area. in The the aglobal leader as reputation journals, cementing its high-quality in papers and published many peer-reviewed ground-breaking research team conducted has Rumen Microbiology the For than more adecade, Team Award Rumen Microbiology Eric Altermann and Yang Li. 41 Science New Zealand awards 42 Rewarding excellence within AgResearch Whakanui ingā huhuatanga pai oAgResearch AgResearch within excellence Rewarding these awards has presented been annually since 2012. technology transfer and sector practice change. Each of Impact Prize recognises significant sector impact through achievement for high-quality, relevant research, while the outstanding recognises Prize Science AgResearch The Intensified agriculture favors evolved Intensified evolved agriculture favors 2019 Science Prize Winner healthy ecosystems. ecosystems. healthy to maintenance the of importance of critical be can compelling that biodiversity evidence provides This work of agents. biocontrol rapid failure relatively through the observed as – biodiversity on monocultures agricultural of potential impact the This describes paper implicationspotentially and impact. wide-ranging control inprocesses that will biological have and evolutionary ecological relationship between team highlighted apreviously who unknown This year’s to awarded Prize the Science was of Sciences Academy National ofthe Proceedings the resistance control. to Published biological in , 2017.
M. Reale and S. D. RealeM. and S. Wratten. collaborators/authors Tylianakis, M. J. right) AgResearch and from external (below Tomasetto Goldson Stephen left), (below Congratulations to paper’s Federico the authors: high value to international audiences. is paper such, the of extremely adaptation. As nature rapid evolutionary of could what be causativeexplain the phenotypic/genotypic inter-species and tocomplex interactions to study provides an opportunity exciting 14 –consistentlyfail –after generations host begins to intervention biocontrol particular success that the of this observation The consents from regional from councils.consents have they legal for applied when stakeholders for helpful particularly Thisand been has data. load concentration nutrient with provided the industry has effluent farm sheep dairy on data Our milks. other from milk sheep how on is data scientific different by providinginformation is industry helping the source of essential aminoa better acids. This than cow milk proteins milk and that sheep is milksheep proteins are readily more digested that researchOur (in shown has model) arat of our stakeholders).two (for season per milk by 25–30% increased yield and that have lamb mortality reduced practices individually lamb-rearing implemented tailored have stakeholders three Our research outputs. and and rapid strong adoption uptakethe of to communication,science led has which ongoing excellent that includes industry with aconsistent,takes collaborative approach It also verification. attribute product focused through toenvironmental consumer- impact and productivity value chain on-farm from This transdisciplinary across team the works grow and prosper. Zealand’sNew so produce, can that it systems qualities and advantages particular establish the industry sheep dairy the programme helped has Science Sheep Dairy by the Research conducted industry. sheep dairy Zealand New emerging of the exports Boosting 2019 Impact Prize Winner
Selbie and RossSelbie Monaghan. Diana right),McCoard (below Natalie Bartlett, Young, David Stevens middle), (below Sue Wayne Broadhurst, Marita left), DayLi (below Congratulations to Linda Samuelsson (above), future. abright with industry leadership to an emerging exciting and industry and continues to provide significant thought team Science provided, has Sheep Dairy The compliance and in international markets. environmental environmental for footprint lower their to demonstrate industry sheep dairy wider and the this from Data farmers trial enables sheep. dairy nitrogen leaching trial grazed under in a demonstrated also has systems been sheep of nitrogen dairy footprint A lower 43 Rewarding excellence within AgResearch Our international connections Ō mātou hononga ā-tāwāhi
AgResearch partners with organisations around the world to carry out a wide range of research programmes. These span the breadth of AgResearch’s scientific capability and reinforce the success of global relationships.
AgResearch has international Over the week, the organisations shared lessons organisation-to-organisation and challenges around human resources; formal collaborations with: international strategies and revenue; and research strategy, structure and support. • Commonwealth Scientific and Industrial Research Organisation (CSIRO) – Australia Cecile de Klein, Principal Scientist, Genevieve • Teagasc – Ireland Thornley, Contestable Funding Manager, and Laura Vandemoortele, Project Specialist, • Scottish Rural College (SRUC) – Scotland represented AgResearch at the meeting • University of California, Davis – United following consultation with the relevant parts of States of America the organisation to confirm the content of the • Chinese Academy of Agricultural Sciences workshop. (CASS) – China • Instituto Nacional de Investigación Following the workshop, each organisation took Agropecuaria (INIA) – Uruguay the lessons and opportunities learnt to improve process and strategies both individually and • Institute of Agrifood Research and collectively through the partnership. Technology (IRTA) – Spain • Colombian Agricultural Research Institute Adding value for PhD students (AGROSAVIA) – Colombia AgResearch is part of a collaboration with Learning and sharing best operational Teagasc and the Scottish Rural College, co- practices between global research locating PhD students across the organisations. organisations The students see real value in working between two countries, including being exposed to a AgResearch has a strategic partnership with wider network, sharing research developments three of the world’s pastoral food system first hand and benefiting from the exposure to research organisations: Teagasc (Ireland), INIA different organisational cultures and processes. (Uruguay) and IRTA (Spain). In June, members of each organisation met in Spain to take the opportunity to focus on our strategic and operational working environment and to share and learn about the practices used within each organisation. Our international connections
44 61 332 55 30 40 Countries Collaborations Collaborations Collaborations Collaborations and regions with USA with China with Australia
10+ collaborations 6–10 collaborations 2–5 collaborations
We collaborate with:
Algeria, Argentina, Australia, Austria, Belgium, Nigeria, Norway, Papua New Guinea, Peru, Brazil, Canada, Chile, China, Colombia, Costa Philippines, Poland, Russia, Samoa, Saudi Rica, Cote d’Ivoire, Denmark, Ecuador, Eritrea, Arabia, Singapore, Solomon Islands, South Ethiopia, Fiji, Finland, France, Germany, Hong Korea, Spain, Sri Lanka, Sweden, Switzerland, Kong, Hungary, India, Indonesia, Iran, Ireland, Syria, Taiwan, Thailand, Tunisia, Turkey, United Israel, Italy, Japan, Kenya, Malaysia, Maldives, Arab Emirates, United Kingdom, United States
Mexico, Mongolia, Morocco, Netherlands, of America, Uruguay Our international connections
45 46 Our subsidiaries and joint ventures Ā mātou turuki me ngā kaupapa pakihi ngātahi ventures joint and subsidiaries Our operating for 15 for operating used to years and been has company been has which FARMAX, software advisors.their AgResearch owns agricultural and decision-making by farmers that support AgResearch is of digital tools also adeveloper innovative plant and microbial new products. investors and research organisations to develop of an international with network and works companies alliances seed established with It has ryegrass. for of endophytes Epichloë and Lincoln, Grasslanz is aleading source North in Palmerston and microbiology. Based by plant biotechnology offered opportunities new and explores technologies forage GrasslanzTechnology Ltd. innovative delivers subsidiary Grasslands is wholly-owned a number of joint example ventures. One subsidiary companies owned wholly and are including vehicles employed of different of this process anumber part As property. continues to commercialise intellectual scientific of our partners, support the AgResearch, with of research breadth conducted. and the strategy both unison and have influenced in and goals developed haveinterests been meaning old, are in decades many cases AgResearch’s relationships stakeholders with science remainsrelevantandhasimpact. in boththepublicandprivatesectorstoensureour relationships withcollaboratorsandstakeholders databases andcollections),wehaveforgedenduring and developcapability(people,facilities,equipment, New Zealand’s currentandfutureneedstoretain As aCRIwithobligationstobestrategicguardianof • • • • ventures are: our joint Among of impact. delivery and the venture relationships innovation both to support anumber of joint AgResearch entered has close andThrough enduring collaborations, ofoutcomes various managerial options. and economic production the to determine operations analyse, monitor farm and review and advisors their tois used by farmers ZealandNew and internationally. software The businesses farm in valueadd to over 5,000 demonstration). be addressedthroughlocalresearch and wanting dairychallengesintheregionto response toSouthlandandOtagofarmers The SouthernDairyHub(establishedin based animalproductionsystems); and proprietary foragetechnologiesforpasture- Grasslands Innovation Ltd(developing sustainable bio-basedworld); BioPolymer NetworkLtd(leadingtheway toa outcomes andbetterfarmprofitability); on farms, delivering betterenvironmental farmers andgrowers toimprove nutrient use Overseer (NewZealandthatenables software
47 Our subsidiaries and joint ventures 48 National Science Challenges National Science Challenges Science National research. agricultural-based in expertise offering Challenges, the of number AgResearch is proudly involved in a Zealand. New facing opportunities the biggest science-based issues and disciplines and institutions to tackle can work collaboratively across country’s top scientists so they established to bring the together National Challenges Science were and the whenua (land). whenua and the (people) tangata relationshipreciprocal between of our landvitality) and water, the and to nurture maurito and increasethe (life force, restore things. We have an intergenerational duty interrelationship of all living and non-living and interconnectedness the – acknowledging and Water of Land Our isMāori) heart at the (Te view Ao world Māori resources.water The of our land and and economic development sustainable in role the management active playing of Māori a more is importance the and Water driver in Land Our A fundamental sustainable? landscapein is the and most this profitable most land uses other what Ichange can to and where If thisprofitable? is then footprint too much, still my environmental andI reduce be still footprint such as: can How much and industry producers from questions to difficult the answer trying and Water Land Our those same taonga. is producing –while value from ecosystems –our land, and water associated of our country taonga fundamental most the aims to preserve and Water Land Our National Challenge Science universities. Zealand’s country’s of the CRIs, majority and the including 16has all New research partners, and Water Land Our by MBIE is funded and Water, of 11 one National Challenges. Science and AgResearch is Land to Our proud host Preserving thefundamentaltreasuresofourcountry Toitū teWhenua, AND OUR LAND Toiora teWai WA TER
Otago, Lincoln Agritech, Cawthron Institute Cawthron Lincoln Agritech, Otago, University, Lincoln University, Waikato University, of University ResearchFood (PFR), Scion; of Massey Auckland, University of Water Research and Atmospheric (NIWA); Plant and Manaaki Research; –Landcare National Whenua Institute and (GNS); Nuclear Science CRIsAll Geological -ESR, partners Collaboration 26/1/2016 Challenge launched generations. future maintaining and improving our land for and quality water while and productivity To production sector enhance primary Objective
Science PlanScience objectives. Water, align closely to that most our revised our to goals SSIF the and of Land Our activities In have addition, we of some aligned projects. and Water,Land are and our leading researchers leadership within Our thought to science the Turner and David Houlbrooke are contributing Richard James McDowell, AgResearch staff and Water Land Our progress the mission. to rapidly of research consists of six projects to June 2024. and Water’s wave Land Our next of $69.3 million July years from five 2019 the for government maximum funding allowance at the of instalment second of its considered worthy was financial revised strategy that year its was andA highlight Water Land Our for last in the and communities of interest. stakeholders partners, haveresearchers with shared work their where and presentations workshops reports, journals, in scientific andpapers numerous delivering 43 underway, are currently published or completed have either been research projects Water 30 progress. Over made good has and Land Our years of operation, three After AgResearch Host 49 National Science Challenges 50 National Science Challenges of native biodiversity in andof agroecosystems” native biodiversity “Enhancing function ecological the project the haveAgResearch also scientists to contributed pathogens. these to research fighting on accelerate the expertise McRae, ateam diverse are with with working Maureen O’Callaghanscientists, and Kathryn Our rust. spread of kauri dieback and myrtle team Leadership toScience looking combat the Heritage Biological of the AgResearch is part Helping NewZealanders protectourpreciousenvironment for Technologicalfor Innovation National Science Science in the project spearhead Manufacturing approach to Additive the a novel, design-led team taking project of the AgResearch is part Tackling high-tech challengestogrowoureconomy Industries, Department of Conservation Department Industries, of Waikato, of Wellington, Primary for University Ministry Victoria University of Otago, University of Canterbury, University Auckland, of Technology, Lincoln University, Massey University, of University GNS, AgResearch, ESR, NIWA, University PFR, Auckland Scion, partners Collaboration 29/8/2014 Challenge launched and enhance our resiliencebiosecurity to organisms. harmful To and manage Zealand’s New protect biodiversity, improve our Objective Waikato, of Wellington, University Lincoln Agritech Victoria of University of Otago, University of Canterbury, University Lincoln University, Massey University, of Auckland, University AgResearch, GNS, of Technology, University Auckland Scion, partners Collaboration 16/9/2015 Challenge launched economic for growth. sciences engineering To Zealand of New to enhance capacity use the physical and Objective that New Zealanders arethat New of. proud aresilientand restoring and thriving ecosystem environments; natural urban and production Zealand’s New protecting heritage; biological Zealanders to New valueempowering our goalsthe of this include Challenge, which is asignificant contributorBiosecurity to Border SSIFOur into investment Better of challenge. phase funding the for next the are involved in scoping groups helping design the project takes biopolymers that originate biopolymers takes project the Zealand New other CRIsfrom and universities, and designers engineers alongside scientists, working AgResearch staff Challenge. With Landcare Research Landcare Manaaki – Whenua Host Callaghan Innovation Host products exported. exported. products to greater value the derive from will need sector gains Instead, the alone. productivity by achieved cannot be China.especially of This growth level across markets Asia and export expanding food to the come from will need Much of this growth (currently 30%). under to 40% product domestic to gross to overall grow of the ratio exports Zealand New aims merchandise exports. volumelargest and value Zealand’s of New the generates sector and beverage food The area. Roy, priority health gut leads the AgResearch, via Principal Investigator Nicole feeding. and complementary immune function, health, research metabolic areas: health, gut This Challenge is around focused four priority PFRwith and universities. several NationalNutrition Challenge, together Science High-Value in the AgResearch is akey partner withprovenhealthbenefits New Zealand foods and biopolymers well how limits equipment current the As into final products. components multi-material with make can we parts complex using By requirements. 3D printing, product combinations of materials to appropriate enable engineering on focuses project The products. or parts manufactured applicationsuitable for in 3D printing of materialsprotein, engineered and creates new Zealand,in New lignin, such as cellulose and HIGH-VALUE NUTRITION Whai Painga Ko NgāKai
AgResearch, PFR, Massey University, of Otago University partners Collaboration 1/4/2014 Challenge launched economic growth. to drive To validated benefits with health foods high-value develop Objective our refreshed Science Plan Science goals.our refreshed Challenge vision, and that also aligns strongly to of the in working support SSIFaligned activities and Evelyne Maes. In have addition, we Barnett Fraser, Wayne Young, Hodgkinson, Ali Matt to this Challenge, including Nicole Roy, Karl are contributing range ofwide AgResearch staff A projects. contestable our on three industry Zealand New the food with closely working year’sA highlight been has last of work the away of as driving economic growth. benefits validated with health foods high-value develop asimple has andtherefore mission: clear to and wellbeing. High-Valuehealth Nutrition and their foods consumers perceive between relationship the from comes strategies add enduring and value- most strongest of the One that have promising looked lab. in the combinations test to further opportunities more combinations of proteins. will provide This work 3D and to 4D printing techniques trial different innovative adapting currently are Harland, Duane and including Scott Sonya AgResearch scientists, and natural fibres. biopolymers using 3D printing products of new produce to design concepts investigating different is project the aligned, be can fibres other University of Auckland University Host 51 National Science Challenges 52 AgResearchOutreach Toro atu Outreach stakeholder attention. stakeholder and media strong attracted research projects of our profiling stand Our day two event. four- the attended people In total, 129,000 cultivating value. 2019 the that embodied Alley” Fieldays theme, a“Science created side walkway other of the across Industries the Primary for Ministry with over 1,059(judged sites). joint approach The Fieldays Supreme Site the award with honours Agribusiness top Site as Indoor well as Best the Research, awarded ESR was and Scion, Landcare CRIs, other with Manaaki stand – Whenua NationalAt Fieldays in 2019, our combined Creek Mystery at Fieldays National public-facing events. stakeholder-specific gatheringsandmeetings,tolarge ranging frommainstreammediaandsocialmedia,to To sharethestoriesofourresearch,weusechannels a 77% increaseina 77% year-on-year. reach users, reachingevent over 48,000 We had continuous social during media the Zealand’s and midday bulletins. Morning Report gaining ahigh Radio profile on New project, Evaporative Ionisation Mass Spectrometer also Rapid the on media Scientist, spoke with Ross, Alastair Senior commercial stakeholders. commercial several from generated interest concept since has The headlines in Greece. television hit the stories programme, and the includingconcept, TVNZ’s on apiece Breakfast Hyperfarm the on multiple interviews completed Leader, Impact Science Laurenson, Acting Seth
New Zealand’sNew communities. rural and resilience of importance the on reflected Damien Honourable O’Connor,of Agriculture, speaker, guest the and co-editor. Then Minister Margaret AgResearch senior Brown, scientist from book of highlights heard the the members and leading community scientists leaders, sector makers, agriculture audience of policy The community members. rural and national and international universities, PwC CRIs, other from colleagues collaboration with of 10 years’ by AgResearch in of research led comprised , abook Strong of Heartland release the to celebrate held In an was event April, Celebrating included a feature on 1 News, a radio interview aradio interview afeature 1News, on included 17 across Zealand. pieces media New These and in featured received well was story The range of animals, and potentially humans. to improve in and abroader nutrition digestion supplement adietary used as could be wool from ZealandNew by showing that proteins derived in industry sheep the research to helps support to improve The cats health. their of domestic to diets the added proteins be can wool from showing that by AgResearch scientists of astudy In 2018, August to findings media released we Wool protein fornutrition pet Leader, Impact Science spoke David as Everett, and changing trends. AgResearch products innovative new and global disruptive factors, Zealand New how must adapt to national and leaders of industry perspectives the from production of future food the explored event “AgResearchThe Future full-day Feeders” and technology. of agriculture, food intersection the at sit that events complementary Zealand New Nation. aFood as It includes and showcases Week celebrates AgriFood in March year, each North in Palmerston Held “AgResearchevent Future Feeders”. Week, this timeAgriFood sponsoring aheadline againAgResearch involved was Zealand in New New Zealand AgriFood Week Heartland Strong
Farmers Weekly. NZ and Newshub Stuff, such Herald, media as coverage by other ZB and written Newstalk on labour market experts. of consumer innovators insights, global food and leading at the edge researchers products, food of award-winning and founders entrepreneurs of adynamic panel of speakers includingpart Penny Payne, Robyn Dynes, Bill Kaye-Blake. Robyn Dynes, Penny Payne, Mckay, L-R) Alec (Bottom Vibart; Ronaldo Watson, Gerry Small, Brown, Mike Mackay, John Margaret Rendell, Bruce Strong Heartland of editors and authors The ; (Top L-R); (Top 53 Outreach 54 AgResearchOutreach • viable sample sizes research. the for audiences using to obtain sponsored posts andFacebook, Instagram Twitter, targeted we Through of topics. research into avariety channels to assist to conduct our scientists This year, our use broadened of we social media Using social media for research programme – programme Age Digital inthe Bioeconomy Zealand New ofthe Farms”, part “Connected into A study 5,754 5,754 9,059 9,059 followers LinkedIn
reached 21,835reached users • • • diet – diet oftheir as part insects eating consider would Zealanders New not or whether into A look 18,359 users –reached cattle training” “toilet towards sentiment ofpublic examination An required responses the exceeded and 2,101 –reached mood and users meat red eating between relationship ofthe analysis An 2,830 2,830 reached 51,201 users 51,201reached users followers Faceboook Twitter followers 55 Outreach 56 AgResearch Te kāwanatanga ā-rangatōpū governance Corporate 57 AgResearch 58 Our Board Tō mātou poari Board Our Honours, 2018.Honours, Queen’s in Order the Birthday Service Paul made Companion was Queen’s of the Challenge. Science and Interim and Water Chair Land Our of the a Trustee Community Trust Eastland of the of Manaaki Research, –Landcare Whenua Chair is He of also Otago. University Deputy the from holding aPhD in Biochemistry Paul abackground research, has in scientific and Forestry. of Agriculture Ministry at the (Policy) General Director Deputy was 2002–2008, from Adviser and then, Policy Chief as 2002) of Research, and Technology (1998– Science until 2015. Ministry at the to worked Prior that he Environment the for 2008 Ministry from the of Executive Chief as PaulDr served Reynolds Chair PaulDr Reynolds, QSO
Plateau region. and Central of Plenty Bay in the focused are farming interests His Ltd. Holdings of Dairy director and and is apartner years 30 for industry involved in the been has Colin Armer Director Armer Colin
Directors. Instituteof the of Member a Chartered of Global Women and amember as well as in NZ (Inc)Directors Instituteof the of Council National ofis the amember and leadership. She resources human transformation, business in abackground with director independent Jackie is Lloyd an Director Lloyd Jackie
Tainui. of Waikato- people the representing authority Waikato, tribal the Te Whakakitenga o of arm executive of Te the Arataura, is chairperson the in July 2018. She AgResearch Board the joined Schaafhausen Rukumoana iwi, of her member an influential and A lawyer, director Director Schaafhausen Rukumoana to promote excellence and accountability. and excellence promote to are complementary teams that work together Governance and leadership at AgResearch
agricultural research. research. agricultural grain marketing and consulting, industry food management, in farm experience has Water Flagship. Peter & Land in the Director CSIRO aResearch as Australia’s for worked to this Peter role, Previous Meteorology. Australia’s Bureau of at Agriculture General Manager, Stone Peter Dr is Director Stone Peter Dr
Australia. Germany and USA, Zealand,in New based roles executive inworking senior included which industry, global dairy in the a 24-year career in 2017, Kim enjoyed in governancecareer pursuing afull-time Nelson. Before Port ValueQuotable and boards the on of serves currently She director.independent an experienced Kim Wallace is Director Chair and -Audit Risk WallaceKim
59 Our Board
Our Board (continued)
The Board promotes the highest standards clearly set out those matters on which only of corporate governance practice and ethical the Board can make decisions. These include conduct by all Directors and employees of dividend payments, solvency certificates, AgResearch Limited and its subsidiaries. raising new capital, major borrowings, approval of the annual financial statements, appointment The Board endorses the overall principles of directors to subsidiaries and associates, major embodied in the New Zealand Institute of capital expenditure and acquisitions. Directors’ “Code of Practice for Directors”. It has only independent Directors on the Board, Each year, the Company produces a Statement of whose skills and experience bring balance and Corporate Intent (SCI) and an operating budget, diversity to decision-making. which are reviewed and approved by the Board. Monthly management accounts are Role of the Board prepared and these are reviewed by the Board throughout the year to monitor management’s The Board is responsible to shareholders performance against the budget and the for charting the direction of the Company by: Statement of Corporate Intent. setting objectives, strategy and key policies; and monitoring management’s running of the Independent professional advice business to ensure it is aligned with the direction set. With the prior approval of the Chair, each Director has the right to seek independent The Board delegates the conduct of the legal and other professional advice at the day-to-day affairs of the Company to the Company’s expense concerning any aspect of Chief Executive. The Board is responsible the Company’s operations or undertakings to for the appointment, from time to time, of help them fulfil their duties and responsibilities the Chief Executive and annually reviews as a Director. their performance. Director education The workings of the Board and its code of conduct are governed by the Companies Act The Board had a budget of $15,000 to assist 1993, AgResearch’s constitution, the Crown Directors with the financial costs of attending Research Institutes Act 1992, the Crown Entities courses and conferences on governance matters. Act 2004, the annual Statement of Corporate Directors who attend report back at Board Intent and the Board’s manual. This manual sets meetings on matters learnt that would improve out all the functions and operating procedures the governance of the Company. The Chair of the Board. The policies approved by the Board authorises expenditure from this budget. Our Board
60
Board membership Board and standing 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 Acting Chair (appointed Chair 2 September certain aspects of corporate governance 2019) and five other Directors. Directors are – the Audit and Risk Committee and the generally appointed for a three-year term and Remuneration Committee. may be reappointed for further terms. The Board and each committee are empowered Rukumoana Schaafhausen was appointed to the to seek any information they require from Board on 1 July 2018. She joined Colin Armer, employees in pursuing their duties and to obtain Jackie Lloyd, Peter Stone, Kim Wallace and Paul independent legal or other professional advice. Reynolds, who was appointed to Acting Board Chair from his previous Director role.
Board meetings Audit and Risk Remuneration Board of Directors attended Committee Committee
Paul Reynolds 10 2 4
Colin Armer 10 4
Jackie Lloyd 8 4
Rukumoana Schaafhausen 8 2
Peter Stone 7 3
Kim Wallace 10 4
Number of meetings held 10 4 4 Our Board
61 62 Statutory reporting – Board AgResearch InterestListFY19 appropriately recordedwithintheinterestregister, whichisupdatedregularly. companies withwhomnotransactionshave occurredduringtheyear. These interestshave been Interests donotincludetrusteeships, directorshipsorshareholdingsinprivate trustsandsmall “Director” and“Trustee” ChairandDeputyroleswhererelevant. columnsalsoidentify Directors’ interestsdisclosedduringtheyearto30June2019aresetoutintablebelow. The dealings byDirectorswiththeCompany. information thatwouldnototherwisehave beenavailable tothem. There werenoshare The BoardreceivednonoticesduringtheyearfromDirectorsrequestinguseofC Directors’ interests Dividends aspects undertheCrown Research Institutes Act 1992fortheyearended30June2019. The Directorsarepleasedtoreportthat AgResearch Limitedmetitsobligationsinallmaterial To ourshareholdersandstakeholders For theyearended30June2019 –Board Statutory reporting No dividendsweredeclaredduringtheyearto30June2019. REYNOLDS, Paul LLOYD, Jackie ARMER, Colin
Director of • • • • • • • • • • • • • • • • • • Prime SPVLimited Fund Limited Eastland Development Blinc Innovation Limited Limited Sir Peter Blake Charity Limited Enviro-Mark Solutions Limited Landcare Research Tongarewa Zealand Te Papa Museum ofNew companies Naylor Love andgroup Limited Kiwi GroupHoldings Chair) andsubsidiary Limited (Deputy New Zealand Post Calf Co Ltd Investments Limited Pure Pasture Limited Pasture Conference Armer GroupLimited Limited Icena Investments Hirata DairiesLimited Limited Dacca Investments and itssubsidiaries Dairy HoldingsLimited Limited Armer Farms (NI) Officer of • • • • • Trustee of Trust Peter Blake The Sir Trust Community Eastland The (Chair) Wellington) Experience (trading as Trust Museums Wellington Foundation Lion Trust Conferences Pasture Shareholder of • • • • • • • • • • • • • • • Limited Activate Tairawhiti Prime SPVLimited Limited Development Fund Eastland Limited Eastland Group Investments Limited Pure Pasture Silver Fern Farms Ravensdown Ballance Fonterra Armer GroupLimited Calf Co Ltd Hirata DairiesLimited Limited Dacca Investments and itssubsidiaries Dairy HoldingsLimited Limited Armer Farms (NI) ompany including membershipofBoardCommittees, duringtheyearwereasfollows: Remuneration andotherbenefitspaidorduepayable toDirectorsforservicesasaDirector, Directors’ remuneration 2018) (appointed 1July Rukumoana SCHAAFHAUSEN, Peter STONE, Jeff Grant(Chair) Kim Wallace Dr Peter Stone Rukumoana Schaafhausen Jackie Lloyd Colin Armer Dr Paul Reynolds (Chair) Directors Andrew Macfarlane Tania Simpson Robert JohnHay(Chair) Grasslanz Technology Limited WALLACE, Kim Director of • • • • • • • • • • • • • • • • Limited Miro Trading GP Limited Miro-Tupu Ake Limited Te Whaa A Tamihana Limited Inc Schaafhausen Limited Waikato-Tainui Koiora Hautupua GPLimited Limited Investments GP Te Waharoa Limited Octagon Enterprises Limited Hocken Enterprises Limited Dorothea Stone Limited Rockies Trustee Queensland) (University ofSouthern in Agriculture for Engineering National Centre Kim Wallace Limited Investments Limited Seahorse Beach Port NelsonLimited Limited Quotable Value Officer of • Tainui) (Waikato- Society Incorporated o Waikato Whakakitenga of Te the Executive Te Arataura, Trustee of • • Trust The Prines Foundation Tindall 42,060 37,056 37,056 37,056 37,056 72,000 20,004 2019 - - - Shareholder of • • • • • • • • • • Zealand Limited Euroflex New Limited Octagon Enterprises Limited Hocken Enterprises Limited Dorothea Stone Limited Rockies Trustee Argo Nufarm Limited Kim Wallace Limited Investments Limited Seahorse Beach Limited Inc Schaafhausen 39,975 37,056 37,056 37,056 72,000 17,525 18,333 37,056 37,056 2018 - 63 Statutory reporting – Board Our Executive Leadership Team Tō mātou Tumuaki Whakahaere
Dr Tom Richardson Natasha Barnett Jo Brady Chief Executive Health, Safety and Communications and Environment Director Marketing Director Dr Tom Richardson has held executive roles in New Zealand and Australian science for the Natasha Barnett has Jo Brady brings past 20 years. Prior to joining AgResearch, he extensive experience significant experience was a scientist and then Chief Executive at Scion. in high-risk, safety- in executive critical industries leadership, developing He is regularly called to serve on advisory including the and implementing boards, external review panels and international primary industry and integrated marketing science and trade delegations, including the agricultural sectors, and communications NZ-US Joint Commission on Science and aviation, healthcare strategies, as well Technology Co-operation and the NZ-EU and Government, as as implementing Joint Commission on Science and Technology well as other corporate transformational Co-operation. Current industry, science and sectors. change. education governance roles include Farmax Ltd; Grasslanz Technology Ltd; Overseer Ltd; Science New Zealand; South Island Dairying Development Centre (SIDDC); Riddet Institute; and Waiariki Bay of Plenty Polytechnic. Our Executive Leadership Team Leadership Our Executive
64 Stuart Hall Lee Gardiner Chris Koroheke Tony Hickmott Partnerships and People and Culture Kaiurungi Ahuwhenua Finance and Business Programmes Director Director Māori Performance Director
Stuart Hall’s key areas Lee Gardiner has Chris Koroheke’s Tony Hickmott was of experience include significant experience role on the Executive most recently the sales and marketing in human resources Leadership Team is Chief Financial Officer execution, leadership management across to strengthen the at Capital & Coast and strategy a diverse range of relationships across District Health Board development. He has sectors including the burgeoning Māori in Wellington. He extensive experience agriculture, tourism agribusiness sector. brings with him a in a number of and aboriginal His background wealth of experience executive sales and education. is in developing in finance, audit and commercial roles. relationships across risk and government organisations and iwi. funding models as well as finance team leadership.
Dr Trevor Greg Rossiter John O’Dea Stuthridge Technology and Digital Infrastructure Research Director Services Director Director
Dr Trevor Stuthridge Greg Rossiter is John O’Dea has brings extensive an experienced IT extensive experience international executive professional with an in the property and and governance extensive background construction sectors experience in leading cross- including the long- science, innovation functional teams to term planning and and technology deliver major change re-development commercialisation projects. of Lyttelton Port organisations. He has following the 2010/11 served as director earthquakes. on 10 boards and strategic advisor for 12 industry/academic research consortia. Our Executive Leadership Team Leadership Our Executive
65 66 Statutory reporting – Company Communications &Marketing andFinance&BusinessPerformance (56)andSubsidiaries(6). Remuneration was receivedbyScience(138),ChiefExecutive’s Office,Infrastructure, severance andexitpayments. Remuneration includedperformanceawards, superannuationbenefits, vehiclebenefits, and annum, asshown inthetablebelow. During theyearended30June2019,200staffreceivedremunerationoforex Remuneration greaterthan$100,000 For theyearended30June2019 –CompanyStatutory reporting Total $700,000 to$709,999 $390,000 to$399,999 $370,000 to$379,999 $340,000 to$349,999 $280,000 to$289,999 $250,000 to$259,999 $240,000 to$249,999 $220,000 to$229,999 $210,000 to$219,999 $200,000 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 ceeding $100,000per 200 13 14 31 34 35 38 1 1 1 1 1 2 1 2 4 3 3 1 7 7 Office ofthe Auditor-Generalandundersection21oftheCrown ResearchInstitutes Act1992. Paul BrydenofDeloitte Limited istheappointedauditorofCompany undercontractfromthe Auditor permissible bylaw. The Company alsohasDirectorsandOfficersinsurance. During theyear, theCompany indemnifiedDirectorsandcertainemployeestothefullestextent Directors andemployeesindemnityinsurance Donations paidduringtheyearended30June2019were$2,000. Donations termination oftheiremploymentwiththeGroup. During theyear, theGroupmadefollowing paymentstoformeremployeesinrespectof Termination payments Number ofemployees Total amountpaid $691,481 11 67 Statutory reporting – Company 68 AgResearch Ngā whāinga paearu mahi indicators Performance 69 AgResearch 70 Key performance indicators as at30June2019 indicators Key performance
Research Stakeholders People strategy (SCI). identified inour and Outcomes to Impacts and contribute meet sectorneeds solutions that Development Research and relationships. players andtheir and emerging including key of thesector, understanding Comprehensive workforce. high-performing Innovative and Strategic goal stakeholders. strategy withkey Co-owned our strategy. needs anddeliver future stakeholder meet currentand capabilities thatwill portfolio and has theresearch Ensure AgResearch understanding. recognition ofthat and thesector’s of thesector understanding Grow our increased. Staff engagement Objective safe workplace. We willallhave a strategic goals. AgResearch stakeholder and closer alignmentof revenue through Grow commercial Sciences Roadmap. from the2017 Animal recommendations Implement the better. strategy asgoodor contribution totheir understanding/ AgResearch’s stakeholders rate >90% ofsurveyed result by3% previous staffsurvey Index (EI)fromthe Increase Engagement indicators for FY19 for indicators Key performance accidents. No seriousharm per year. causing losttime<30 Injuries (MTI)andMTI Total Medical Treatment revenue. organisation-driven of international Deliver $2.48million revenue. commercial science of stakeholder-driven Deliver $32.4million investment. in significantnew fund that,resulting and mechanismsto the environment enhancement of agricultural profitability, challenges around New Zealand’s critical is neededtomeet the newsciencethat stakeholders toidentify industry andwider with Government, key Successful engagement re-prioritised intootherareas. removed fromthisareaofresearchand Team, andresultedinSSIFfundingbeing was ratifiedby the Executive Leadership for theareaofgene-editinginlivestock recommendation toreviewinternalfunding applications. Inaddition,the initiatives forpotentialfunding developed anumberofcross-team The Animal ScienceRoadmap 2017 better. contribution totheirstrategyasgoodor rated AgResearch’s understanding/ In 2018,83%ofsurveyedstakeholders was 68.0,upfrom65.0in2018. In July2019,ourStaffEngagementIndex Result forFY19 incidents. We didnothave any “seriousharm” was 16,down from34lastyear. number ofMTIandcausinglosttime From 1July2018to30June2019,thetotal revenue. We achieved$4.7mofinternational commercial sciencerevenue We achieved$51.1mofstakeholder-driven 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 Objective strategy. and delivertoour stakeholder needs outputs thatmeet and Development reliable Research high-quality, Deliver relevant, for purpose. infrastructure isfit AgResearch Science Plan. Implement AgResearch 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 FY19 for indicators Key performance for FY19. milestones andbudgets to agreedprogramme and campuses/hubs Footprint Programme Develop Future performance indicators. challenge targets, impactmeasureandkey Initiatives, includingthedevelopmentof of AgResearch’s fivecurrentStrategic of ourSciencePlanisunderway asone disciplinary projects. The revitalisation of workingtodeliverintegrated,trans- applications andtoestablishnewways and focusareasforcontestablefunding to informchangesinSSIFinvestments during FY19andwas used,forexample, The SciencePlanwas fullyimplemented compared toabudgetof($3.1m). Our NetProfitBefore Tax of($4.8m) with abudgetof($2.2m). Our OperatingProfitis($7.0m),compared and tooltorealisethebenefits. embedding theuseofbothframework has beenclosed. We arenow in aphaseof out toallScienceteamsandtheproject technology solutionhave now beenrolled framework andtheassociated Waka Our IdeatoImpactprojectmanagement Result forFY19 published perscientist. 1.29 Scopus-indexed paperswere to openlate2019. progressing toagreedmilestonesanddue The GrasslandGreenhousesare milestones andduetoopenearly2020. Massey Universityisprogressingtoagreed The JointFood ScienceFacility locatedat 71 Key performance indicators 72 Key performance indicators outcomes isoutcomes Target measured. AgResearch’s figures from[brackets] in are 2018–23 SCI. financial whichprogressagainst indicators operating SCIto the achieve operating AgResearch’s 2018–23 non- following the Intent of identified Corporate Statement As at30June2019 indicators(continued) Key performance AgResearch-specific AgResearch-specific indicatorsengagement end-user of and science relevance Core operating indicators G.5 G.4 G.3 G.2 G.1 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 ID ID Financial indicator Science quality knowledge transfer Technology and collaboration Research engagement External stakeholder End-user collaboration Indicator Indicator f) e) d) c) b) a) interaction plan. Consistent implementationofagreedscienceservice/ rating Contribution tostakeholder strategy–“Good”or“Better” Revenue perFTE,basedonaverage FTEsover theyear. Familiarity withourcapability–“Very Familiar” rating (Data forthisindicatorisreportedcalendaryears.) publications ineachjournal. during theyear, weightedbythenumberof AgResearch assessed bySCImago,inwhich AgResearch staffpublished two-year citationsperdocumentforscientificjournals Impact ofscientificpublications. The average value of Dealing withus–“Preferenceto Work” rating Commercial reportsperscientistFTE. satisfaction rating Satisfaction withourservice–“Very Good”or“Better” “Better” satisfactionrating Stakeholder relationshipmeasure–“Very good”or (Data forthisindicatorisreportedcalendaryears.) New Zealand andinternationalauthors. authors, c)internationalauthorsord)acombinationof with a)only AgResearch authors, b)otherNewZealand Publications withcollaborators. Percentage ofpublications plans Consistent implementationofagreedstakeholder services sources. Revenue perfull-timeequivalent (FTE)fromcommercial Definition Definition Māori revenue International revenue; Intellectual propertyrevenue; Commercial sciencerevenue; Total sciencerevenue; Total revenue; f) $0.3m[$0.3m] f) e) $4.7m[$4.1m] d) $12.0m[$9.8m] c) $51.1m[$54.3m] b) $124.7m[$107.5m] a) $157.3m[$145.4m] Achieved [Achieved] 83% [>90%] $239.54k [$225.76k] 32% [>40%] 2.9 [2.7] 68% [>60%] 1.29 [1.0] 64% [>70%] 58% [>60%] (d) 22%[21%] (c) 33%[26%] (b) 34%[39%] (a) 11%[14%] Achieved [Achieved] $85.4k [$84.3k] Measure [target] Measure [target] AgResearch-specific AgResearch-specific financialperformance AgResearch-specific workforce indicators AgResearch-specific workforce operatingAgResearch-specific indicators Visionto of delivery Mātauranga 4.1 3.2 3.1 2.1 ID ID ID Financial target Indicator Health andsafety Staff engagement Māori Collaboration with Indicator Indicator Operating Profitbudgetachieved. Definition No notifiableinjuriesand<2events. Increase EngagementIndex(EI)by5points. co-developing fundingproposalswithstakeholders. Cultivate collaborationtosupportMāoriagribusinessby Definition Definition 0 [<2] 68 [70] 5 [6] Measure [target] Measure [target] [Achieved] Not Achieved Measure [target] 73 Key performance indicators 74 AgResearch Pūrongo pūtea Pūrongo Financials 75 AgResearch Financial performance indicators For the year ended 30 June 2019
Actual 2019 Budget 2019 Actual 2018 Cash flow • Net cash flow from operating activities $k 14,142 (4,868) 10,570 • Net cash flow from investing activities $k (12,280) (19,452) (23,329) • Net cash flow from financing activities $k - (200) - • Total net cash flow $k 1,862 (24,520) (12,759) • Effect of exchange rate changes $k 8 - 32 • Cash at the beginning of the year $k 46,316 46,316 59,043 • Cash at the end of the year $k 48,186 21,796 46,316
Operating Margin % 8.9% 0.5% 3.0% Operating Margin per FTE $k 21.2 1.0 7.0 Revenue Growth % 7.9% 4.4% (1.7%) Quick Ratio 2.7 0.9 2.8 Interest Coverage 870 1,000 151 Operating Margin Volatility % 43.9% 28.5% 38.9% Forecasting Risk % 1.1% n/a 1.2% Adjusted Return on Equity % (4.7%) (1.5%) (0.3%) Capital Renewal 1.2 4.3 2.4 Equity Ratio % 79.9% 75.4% 81.9%
Indicator definitions:
Adjusted Return on Equity: Surplus after tax (excluding fair value movements net of associated tax impact) ÷ Average shareholder’s funds excluding asset revaluation reserve, expressed as a percentage.
All other indicators are based on the Treasury prescribed calculations which may differ from normal accounting calculations for that indicator. Financial performance indicators
76 Consolidated statement of comprehensive income For the year ended 30 June 2019
in thousands of New Zealand dollars Note Actual 2019 Budget 2019 Actual 2018
Revenue Ministry of Business, Innovation and Employment • Strategic science funding 43,889 43,889 38,889 • Our Land and Water National Science Challenge 6,424 6,623 6,623 • Other 22,495 24,083 21,766 Commercial 62,199 55,979 57,155 Farm produce 4,956 6,480 4,632 Other revenue 1 17,348 13,492 16,716 Total operating revenue 157,311 150,546 145,781
Operating expenditure 2 (153,792) (152,835) (148,017) Other gains/(losses) 3 (7,081) - 1,147 Finance costs (16) - (28) Share of deficit of associates 4 (1,266) 800 (719) Surplus/(deficit) before tax (4,844) (3,089) (1,836) Tax expense/(benefit) 5 2,164 (865) (831) Net surplus/(deficit) after tax for the year (7,008) (2,224) (1,005)
Other comprehensive income Items that will not be reclassified subsequently to surplus or deficit: Revaluation of properties 7 - - 19,431 - - 19,431 Items that may be reclassified subsequently to surplus or deficit: Changes in fair value of financial assets - - (280) - - (280) Income tax relating to components of other 5 - - (5,231) comprehensive income Other comprehensive income for the year net of tax - - 13,920
Total comprehensive income for the year net of tax (7,008) (2,224) 12,915
Net surplus/(deficit) is attributable to: Equity holders of the parent (7,008) (2,224) (1,005)
Total comprehensive income is attributable to: Equity holders of the parent (7,008) (2,224) 12,915
The statement of accounting policies and the accompanying notes form an integral part of these financial statements. Consolidated financial statements Consolidated
77 Consolidated statement of financial position As at 30 June 2019
in thousands of New Zealand dollars Note Actual 2019 Budget 2019 Actual 2018
Current assets Cash and cash equivalents 48,186 21,796 46,316 Trade and other receivables 8 31,798 45,768 33,613 Prepayments 2,021 1,889 2,067 Biological assets - livestock 10 4,190 5,087 4,611 Inventory 1,027 1,095 1,059 Derivative financial instruments 5 - 58 Property held for sale - 763 763 Current tax 5 - (2,112) 677 Total current assets 87,227 74,286 89,164
Non-current assets Investments in associates and joint ventures 4 6,068 5,607 15,370 Other investments 12 2,241 2,460 3,667 Property, plant and equipment 7 204,963 201,995 193,852 Biological assets - forestry 11 1,157 727 965 Other non-current receivables 13 - 4,629 4,536 Goodwill 14 907 - 1,043 Intangible assets 1,745 2,097 988 Total non-current assets 217,081 217,515 220,421
Total assets 304,308 291,801 309,585
Less: Current liabilities Trade and other payables 9 39,721 32,217 37,454 Derivative financial instruments - - - Finance leases – current - - - Provisions 15 5,406 4,745 6,314 Current tax 5 718 - - Other current liabilities 9 936 33 Total current liabilities 45,854 37,898 43,801
Non-current liabilities Deferred tax 5 16,368 15,061 15,905 Other non-current liabilities 16 766 596 826 Provisions - non-current 15 35 34 34 Total non-current liabilities 17,169 15,691 16,765
Total liabilities 63,023 53,589 60,566
Net assets 241,285 238,212 249,019
Equity Share capital 6 47,268 47,268 47,268 Revaluation reserves 6 93,111 97,974 102,880 Retained earnings 100,906 92,970 98,871 Total equity 241,285 238,212 249,019
The statement of accounting policies and the accompanying notes form an integral part of these financial statements. Consolidated financial statements Consolidated
Dr Paul Reynolds Kim Wallace Chair Director 78 11 September 2019 11 September 2019 Consolidated statement of changes in equity For the year ended 30 June 2019
Revaluation reserves, property, Share plant and Retained Total in thousands of New Zealand dollars Note capital equipment Investments earnings equity
Balance at 1 July 2017 47,268 88,204 870 99,762 236,104
Deficit after tax for the year - - - (1,005) (1,005) Revaluation of properties 7 - 19,431 - - 19,431 Changes in fair value of investments 5 - - (280) - (280) Transfer of revaluation reserve on sold assets 6 - (114) - 114 - Income tax relating to components of other 5 - (5,310) 79 - (5,231) comprehensive income Total comprehensive income - 14,007 (201) (891) 12,915
Balance at 30 June 2018 47,268 102,211 669 98,871 249,019
Effect of adoption of new accounting standards - - - (726) (726) (IFRS15) FVTPL election on adoption of NZ IFRS 9 - - (669) 669 - Balance at 30 June 2018 (restated) 47,268 102,211 - 98,814 248,293
Deficit after tax for the year - - - (7,008) (7,008) Revaluation of properties 7 - - - - - Changes in fair value of investments 5 - - - - - Transfer of revaluation reserve on sold assets 6 - (9,100) - 9,100 - Income tax relating to components of other 5 - - - - - comprehensive income Total comprehensive income - (9,100) - 2,092 (7,008)
Balance at 30 June 2019 47,268 93,111 - 100,906 241,285
The statement of accounting policies and the accompanying notes form an integral part of these financial statements. Consolidated financial statements Consolidated
79 Consolidated statement of cash flows For the year ended 30 June 2019
in thousands of New Zealand dollars Note Actual 2019 Budget 2019 Actual 2018
Cash received from operating activities Receipts from customers 161,082 161,136 140,541 Interest received 1,227 1,025 2,253 Dividends received 5 - 155 Total cash received from operating activities 162,314 162,161 142,949
Cash disbursed on operating activities Payments to employees 67,664 68,561 64,230 Payments to suppliers 79,374 97,523 65,177 Restructuring 812 574 1,048 Income tax paid 306 363 1,895 Interest paid 16 8 29 Total cash disbursed on operating activities 148,172 167,029 132,379
Net cash flow from operating activities 18 14,142 (4,868) 10,570
Cash received from investing activities Disposal of property, plant and equipment and 19,404 14,915 135 biological assets Disposal of investments and intangible assets 626 14,014 102 Total cash received from investing activities 20,030 28,929 237
Cash disbursed on investing activities Payment for acquisition of subsidiary net of - - 807 cash acquired Investment in property, plant and equipment and 30,289 40,949 16,563 biological assets Purchase of other investments and intangible assets 1,096 6,457 5,221 Partner contribution to research consortiums 925 975 975 Total cash disbursed on investing activities 32,310 48,381 23,566
Net cash flow from investing activities (12,280) (19,452) (23,329)
Cash received from financing activities Term loan drawdown - - - Total cash received from financing activities - - -
Cash disbursed on financing activities Term loan repayments - 200 - Total cash disbursed on financing activities - 200 -
Net cash flow from financing activities - (200) -
Total net cash flow 1,862 (24,520) (12,759) Cash at beginning of year 46,316 46,316 59,043 Effect of exchange rate changes on the balance of 8 - 32
Consolidated financial statements Consolidated cash held in foreign currencies Cash at end of year 48,186 21,796 46,316
80 The statement of accounting policies and the accompanying notes form an integral part of these financial statements. Statement of accounting policies For the year ended 30 June 2019
Reporting entity Finance Leases under IAS 17. The standard includes two The consolidated Financial Statements of AgResearch recognition exemptions for lessees – leases of ’low- Limited and its subsidiaries, associates and joint value’ assets and short-term leases (i.e. leases with a arrangement interests (collectively, the Group) for the lease term of 12 months or less). At the commencement year ended 30 June 2019 were authorised for issue by the date of a lease, a lessee will recognise a liability to make Directors on 11 September 2019. AgResearch Limited lease payments (i.e. the lease liability) and an asset (the Company or Parent) is a limited liability company representing the right to use the underlying asset during incorporated in New Zealand. the lease term (i.e. the right-of-use asset). Lessees will be required to separately recognise the interest expense Operating as a Crown Research Institute, its principal on the lease liability and the depreciation expense on the activity is research and development in the pastoral right-of-use asset. sector of New Zealand. The Financial Statements have been prepared in accordance with the requirements of Lessees will also be required to remeasure the lease the Companies Act 1993, the Financial Reporting Act liability upon the occurrence of certain events (e.g. 2013, the Crown Research Institutes Act 1992 and the a change in the lease term, a change in future lease Public Finance Act 1989. Information on related party payments resulting from a change in an index or rate used relationships of the Group is provided in note 22. to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease Basis of preparation liability as an adjustment to the right-of-use asset. The Financial Statements have been prepared in Lessor accounting under IFRS 16 is substantially accordance with Generally Accepted Accounting Practice unchanged from today’s accounting under IAS 17. in New Zealand (NZ GAAP). They comply with the New Lessors will continue to classify all leases using the Zealand Equivalents to International Financial Reporting same classification principle as in IAS 17 and distinguish Standards (NZ IFRS) and other applicable financial between two types of leases: operating and finance leases. reporting standards as appropriate for tier 1 profit- orientated entities. IFRS 16, which is effective for annual periods beginning
on or after 1 January 2019, requires lessees and lessors The Financial Statements have been prepared on to make more extensive disclosures than under IAS 17. the basis of historical cost, except for the revaluation of biological assets, certain non-current assets and An impact assessment of the adoption of IFRS 16 has yet financial instruments. Cost is based on the fair value of to be completed, however, it is expected to be material the consideration given in exchange for assets. to the Group. Accounting policies are selected and applied in a manner which ensures that the resulting financial information Critical accounting estimates and judgements satisfies the concepts of relevance and reliability, so that The preparation of Financial Statements conforming with the substance of the underlying transactions or other NZ IFRS requires the use of certain critical accounting events is reported. estimates. It also requires the Directors to exercise judgement in the process of applying the Group’s The Consolidated Financial Statements are presented in accounting policies. The areas involving a higher degree New Zealand dollars (NZD), which is the presentation of judgement or complexity, or where assumptions and currency of the Group unless otherwise indicated. estimates are significant to the Financial Statements, are disclosed in the relevant accounting policy or note.
Standards issued but not yet effective The estimates and associated assumptions are based The new and amended standards and interpretations on historical experience and various other factors that that are issued, but not yet effective, up to the date are believed to be reasonable under the circumstances. of issuance of the Group’s Financial Statements are Actual results may differ from these estimates. disclosed below. The Group intends to adopt these when they become effective. The estimates and underlying assumptions are reviewed • NZ IFRS 16 ‘Leases’ (Issue in January 2016 and on an ongoing basis. Revisions to accounting estimates effective for accounting periods beginning on or after are recognised in the periods affected by the revision. 1 January 2019) Information about significant areas of estimation NZ IFRS 16 Leases replaces the guidance in NZ IAS uncertainty and critical judgements in applying 17 and sets out the principles for the recognition, accounting policies, that have the most significant measurement, presentation and disclosure of leases and effect on the amounts recognised in the financial requires lessees to account for all leases under a single statements, are:
on-balance sheet model similar to the Accounting for Statement of accounting policies
81 82 Statement of accounting policies value of future cash flows where no active market exists. market 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 parties. the by (IP) contributed property intellectual 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 Project. Precinct Lincoln new to the inrelation inProgress Work to Capital transferred been have that costs of abalance estimated have Management construction). and design detailed design, concept scoping, and feasibility (i.e. project the of stage the on based are Campus Grasslands Group’s the at works other and Campus University’s Massey on situated Centre Science Food Joint 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 Other relevant factors apply. factors relevant Other and expected; than worse be, will or is, an asset of performance economic the reporting, From internal 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 asset; the 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 consortia. the for research science undertaking Its and funding; of provision The activities; Board inthe participation Its appropriate assessment of the level of control. of level the of assessment appropriate an on based contracts these on aprincipal as acts it that determined has Group The contract). of delivery the managing and parties third of selection the coordinating (i.e. services hosting provides Group the contracts, these Under Group. the by autonomy and consideration full receiving party third the with behalf, customer’s the on work, the to perform party athird requires that customers its with contracts into enters occasionally Group The consideration agent versus Principal contract. the to complete cost contract expected total to the relative incurred cost the of basis the on revenue recognises Group The customer. to the service of transfer the and incurred) hours cost (i.e. Group’s effort the between relationship is adirect there because services research the of progress inmeasuring method best is the method input the that determined Group The time. over service to contracting inrelation revenue NZ IFRS 15.35(c)recognise Group the and satisfies Therefore to completion. prior contract the terminated customer the if to date performed work the to transfer able be not would Group the because correlated, highly are milestones individual the In addition, milestone. an individual from benefit not could acustomer that indicates basis astand-alone on milestones individual the to sell able be not would Group the that fact The distinct. being of capable not were contract each within milestones the that determined Group The customer. the and Group the between performed work negotiated the of part are and future the IP in related and findings to report promise a are services research The customers. for Group the by is managed that project of part or project an entire for either are that services research provides Group The acontract in obligations performance Identifying customers: with contracts from revenue of timing and amount the of determination the affect significantly that judgements following the applied Group The customers with contracts from Revenue 7. note 2and innote appear made Impairments rates at the end of the reporting period. reporting the of end the at rates market exchange using or forward institution banking the by provided rate to market mark using the determined are contracts) exchange forward and derivatives over example, (for market inan active traded not are that Instruments Fair Value Financial of The cost. amortised at held are Liabilities Financial price. bid current is the 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 inactive traded Instruments Fair Value Financial of The purposes. disclosure and measurement recognition, for estimated be must Liabilities Financial and Assets Fair Value Financial of The Fair estimates value ‑ the ‑ counter counter Financial Statements. these for as policies accounting same using the prepared been has budget The budget. Expenditure Capital and Position Financial of Statement 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 Instruments. Fair Value Financial of reported the affect could factors to these relating assumptions in Changes volatility. and risk credit risk, liquidity as such inputs of considerations include Judgements values. fair inestablishing is required judgement of adegree markets, observable from rate to market mark the to take possible is not it where instruments For extensive disclosures. disclosures. extensive requires standard the addition, In a contract. fulfilling to related directly costs the and acontract obtaining of costs incremental the for accounting the specifies also standard The customers. their with to contracts model the of step each applying when circumstances and facts relevant the all consideration into taking judgement, to exercise IFRS 15 entities requires to acustomer. services or goods transferring for inexchange entitled to be expects entity an which to consideration the reflects that an amount at recognised be revenue that requires and customers with contracts from arising revenue for account to model afive-step IFRS 15 establishes customers. with contracts from arising revenue to all exceptions, limited with applies, it and Interpretations related and 18 IAS Revenue IFRS 15 supersedes customers with contracts 15 from IFRS Revenue effective. yet not are but issued, been have that amendments or interpretations standards, any adopted early not has Group The Group. the of Statements Financial Consolidated the on impact have an not 2018,do but 1 January from effective apply interpretations and amendments other Several described below. are standards accounting new these of adoption the of result as a changes the of effect and nature The time. IFRS 15 first the IFRS applied 9for and Group The interpretations and standards amended and New information. relevant more and reliable more provides otherwise or interpretation or astandard by required is change the if only changed are policies Accounting disclosures Changes in accounting policies and Equity holdersoftheparent Attributable to: Profit fortheyear Income taxexpense Operating profit Operating Revenue with customers Revenue fromcontracts in thousandsofNewZealand dollars follows: IFRS 2018 at 1 adopting July as as of 15 was effect The Interpretations. 18 related IAS and under reported to be continues and restated not was information comparative the Therefore, earnings. retained of balance opening to the adjustment an as application initial of date the at is recognised IFRS applying 15 of initially effect cumulative The 2018. 1July at as contracts to all standard the to apply elected Group The date. this at completed not are that to contracts only or application initial of date the at contracts to all either applied be can standard the method, this 2018. 1July of Under application initial of date the with adoption of method retrospective IFRS 15 modified adopted using the Group The 30 June2019 Consolidated statementofprofitorlossfortheyearended adopted: IFRS 15 had been not been have would amounts the what shows column 15 second the and IFRS under prepared amounts shows column first The flows. cash financing and investing Group’s operating, the or (OCI) income comprehensive other on impact IFRS of 15 amaterial have 15. not adoption did The IFRS of adoption 2019 June the of 30 aresult as ended year the for at and as is affected item line Statement Financial each which by amounts the are below out Set Total Equity Retained earnings Total adjustmentonequity Total Liabilities Contract liabilities(non-current) in thousandsofNewZealand dollars Liabilities Amounts preparedunder 157,311 IFRS 15 85,084 (7,008) (7,008) (7,008) 3,519 2,164 157,162 Increase/(Decrease) (7,115) IAS18 (7,115) (7,115) 84,935 3,370 2,122 (Decrease) Increase/ (726) (726) 726 726 107 107 107 149 149 149 42 83 Statement of accounting policies 84 Statement of accounting policies Total equityandliabilities Total liabilities Contract liabilities Liabilities Total equity Retained earnings Equity in thousandsofNewZealand dollars the Group’s Financial Assets: Assets: Group’s Financial the of classification inthe changes the are following 39. The IAS under value fair at held previously Assets Financial all value fair at measuring continued Group The Group. the on impact asignificant have not IFRSof 9did requirements measurement and classification The assets. the of recognition initial the at as circumstances and facts the on based made was interest and principal of comprised solely are instruments debt on flows cash contractual whether of assessment The 2018. 1July before derecognised not were that assets financial to those retrospectively applied then and 2018, 1July application, initial of date the of as made was Model Group’s Business the of assessment The outstanding. amount principal the on interest’ and principal of payments ‘solely represent flows cash contractual instruments’ the whether and assets; the managing for Model Group’s Business the criteria: two on based is classification The OCI. through value fair or cost, amortised loss, or profit through value fair at measured subsequently are instruments IFRS 9, debt Under measurement and Classification below: described are adjustments these of nature The Flows. Cash of Statement or Position Financial of Statement Income, Comprehensive of Group’s Statement the on impact material have a not did 9 IFRS adopting of effect The 39. IAS under reported to be continues which information, comparative the restated not has Group 2018.1 July The of date application an initial with IFRS 9retrospectively, applied has Group the prospectively, applied Group the which accounting, hedge of exception the With accounting. hedge and impairment; measurement; and classification instruments: financial for accounting the of aspects three all together bringing 2018, 1January after or on beginning periods annual for Measurement and Recognition Instruments: 39 Financial IAS replaces Instruments IFRS 9Financial Instruments 9Financial IFRS position asat30June2019 Consolidated statementoffinancial Amounts preparedunder 304,308 241,285 100,906 IFRS 15 63,023 14,482 304,838 241,178 100,799 IAS18 63,660 15,119 (Decrease) Increase/ (637) (637) (530) 107 107 impairment allowance. SeeDiscussiononimpairmentbelow. * The changeincarryingamountisaresultofadditional instruments Quoted debt investments equity Non-listed investments Listed equity Available forsale receivables* Trade Loans andreceivables IAS 39measurementcategory in thousandsofNewZealand dollars As at30June2019 had the following required or elected reclassifications: elected or required following the had Group IFRS of 9, the adoption the upon In summary, Liabilities. Financial Group’s the for measurement and in classification changes no are There loss. or profit through value fair at as Liabilities Financial any designated not has Group The • • • through profit or loss. loss. or profit through value fair at Assets Financial as measured and classified now are Assets Financial AFS as classified previously investments equity Listed periods. in prior investments these for loss or inprofit recognised losses impairment no were There future. foreseeable the for investments these to hold intends it as category this under investments equity non-listed its irrevocably to classify elected Group The loss. and profit through value fair at assets financial as measured and classified now are assets financial AFS as classified previously companies innon-listed investments Equity cost. amortised at Instruments Debt as measured and classified now are These interest. and principal of payments solely representing flows cash rise to give and flows cash contractual to collect held are receivables and loans as classified previously assets financial non-current other and Trade receivables 31,798 1,807 434 - through profit Fair value IFRS 9measurementcategory or loss 1,807 2,241 434 - - Amortised 31,798 31,798 cost - - - Fair value through OCI - - - - - impairment allowance. SeeDiscussiononimpairmentbelow. * The changeincarryingamount isaresultofadditional instruments Quoted debt investments equity Non-listed investments Listed equity Available forsale receivables* Trade Loans andreceivables IAS 39measurementcategory in thousandsofNewZealand dollars As at30June2018 A. below. out set are policies accounting significant remaining The note. corresponding the in disclosed applicable) (where are Statements Financial the of presentation and preparation the in used policies accounting significant The Significant accountingpolicies Statements. Financial Consolidated Group’s the on impact any have not does Interpretation This consideration. advance of receipt or payment each for transactions the of date the determine must entity the then inadvance, receipts or payments multiple are If there consideration. advance the from arising Liability Non-Monetary or Asset Non-Monetary the recognises initially an entity which on date is the transaction the of date the consideration, to advance relating Liability Non-Monetary or Asset aNon-Monetary of derecognition the it) of on (or part income or expense asset, related the of recognition initial to on use rate exchange spot the determining in that, clarifies Interpretation The Considerations Advance and Transactions Currency Foreign 22 Interpretation IFRIC assets. contract loss and or profit through value fair at held not instruments debt all for ECLs for an allowance to recognise Group the IFRS 9requires (ECL) loss approach. credit expected a forward-looking with approach loss 39’s incurred IAS replacing by Assets Financial for losses impairment for Group’s accounting the changed fundamentally IFRS of 9has adoption The Impairment subsidiaries as at 30 June 2019. Control is achieved 2019. June 30 is at achieved as Control subsidiaries its and Company the of Statements Financial the comprise Statements Financial Consolidated The consolidation of Basis 33,613 2,742 925 - through profit Fair value IFRS 9measurementcategory
or loss 3,667 2,742 925 - - Amortised 33,613 33,613 cost - - - Fair value through OCI - - - - - Financial Statements. Consolidated the of presentation and preparation inthe employed are policies accounting Consistent consolidation. on infull eliminated are Group the of members between transactions to relating flows cash and expenses income, equity, liabilities, and assets intragroup All policies. Group’s accounting the with line into policies accounting their to bring Subsidiaries of Statements Financial to the made are adjustments necessary, When Company. 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 Group the when date the until control gains Group the date the from Loss and Profit inthe included are year the during of disposed or acquired aSubsidiary of expenses and income Specifically, Subsidiary. the of control loses Group the when ceases and Subsidiary the over control obtains Group the when begins aSubsidiary of Consolidation including: power, it give to sufficient are inan investee rights Group’s voting 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 Group 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 • • • Group: the if, only and if, an investee controls Group the Specifically, investee. the over power its through returns those to affect ability the has and investee the with involvement its from returns to variable rights, has or is exposed, Group the when • • • • Has the ability to use its power to affect its 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 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, Group the that indicate that circumstances and facts additional Any and arrangements; contractual other from arising Rights parties; other or holders vote other Group, the by held rights voting Potential holders; vote other the of holdings of dispersion size and to the relative rights voting of Group’s holding size the of The 85 Statement of accounting policies 86 Statement of accounting policies B. D. C.
items, or has reclassified items. reclassified has or items, of restatement aretrospective makes retrospectively, policy an accounting applied has Group the when period, comparative earliest the of beginning the at as is presented Position Financial of Statement a addition, In is impracticable. reclassification the unless reclassified are amounts comparative changed, is items of classification or presentation the When Comparatives • • for: except arise, they which in period the Loss in and Profit the in recognised are differences Exchange retranslated. not are currency inaforeign cost historical of in terms 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 Financial Statements. Group’s the for currency presentation the and Group the of currency functional is the in NZD, which 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 risks; and risks; currency foreign certain to hedge inorder into entered transactions on differences Exchange borrowings; currency foreign on costs to interest an adjustment as regarded are they when assets those of cost inthe included are which use, productive future for construction under assets to relate that differences Exchange E. • instruments. these of maturities short-term to the due largely amounts carrying their approximate liabilities current other and overdrafts bank payables, trade receivables, trade deposits, short-term and cash of values fair the that assessed management The values. fair of approximations reasonable are that amounts carrying with those than other Instruments, Group’s Financial the of values fair and amounts carrying the of class, by acomparison, 23 innote out Set Fair values 12 months. next in generally transactions, underlying the of exposure currency foreign with consistent periods for into entered are and hedges flow cash as designated not are contracts forward exchange foreign The exposures. transaction its of some to manage contracts forward exchange foreign and borrowings currency-denominated foreign uses Group The Instruments Hedging as Designated not Derivatives 23. inNote explained are risk to manage applied is it how and strategy Group’s management risk The risk. liquidity and risk market risk, credit are instruments using derivative managed risks primary The operations. business ongoing its to relating risks to certain is exposed Group The derivatives and activities Hedging market. active inan quotations price to published reference by determined are shares equity these of values Fair shares. equity inlisted investments include loss or profit through value fair at assets Financial innature. strategic to be investments these considers Group the as loss and profit through value fair at designated irrevocably were investments These companies. inthese 9%) and 2% (between interests controlling non- holds Group The companies. non-listed of shares inequity investments include loss and profit through value fair at designated instruments Equity purchases. and sales expected for risk currency foreign of level the to reduce intended nevertheless, are, but relationships, inhedge designated not are that contracts forward exchange foreign those of value fair in change positive the reflect notDerivatives designated as hedging instruments Financial assets profit or loss on disposal of the net investment. net the of disposal on loss or profit in recognised and reserve translation currency foreign inthe recognised are which and operation, inaforeign investment net the of part form which to occur, likely nor planned is neither settlement which for operation to aforeign payable or from receivable items monetary on differences Exchange
investment have been impacted. been 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 OCI, 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 cost amortised at held assets Financial market. inan active quoted not are that payments determinable or fixed with assets financial derivative non- are cost amortised at held assets Financial cost amortised at held assets Financial default risk. counterparty to derivative attributable adjustment valuation acredit of is net positions asset derivative other of value 2019, June 30 at marked-to-market the As risk. non-performance Group’s own the and risk counterparty both eliminating thereby collateralised, cash fully are contracts derivative Some commodity. underlying the of curves rate forward and curves rate interest currencies, respective the between spreads basis currency currencies, respective the of curves yield rates, forward and spot exchange foreign counterparties, of quality credit the including inputs various incorporate models The calculations. value using present models swap and pricing forward include techniques valuation applied frequently most The inputs. observable market of use the employ which techniques, using valuation valued are contracts forward exchange Foreign ratings. credit grade investment with institutions financial principally counterparties, various with Instruments Financial Derivative into enters Group The instruments. debt quoted and investments equity Group’s listed the for market is an active There investments. equity non-listed these for value fair of estimate inmanagement’s used are and assessed reasonably be can range the within estimates various the of probabilities The itself. entity the by provided rates the or market unlisted the on rates quoted using the estimated been have investments equity non-listed the of values fair The receivables. these of losses estimated the for account into taken are allowances evaluation, this on Based project. financed the of characteristics risk the and customer the of creditworthiness individual factors, risk country specific rates, interest as such parameters on based Group the by evaluated are borrowings receivables/ variable-rate and fixed-rate Long-term values: fair the to estimate used were assumptions and methods following The F. G.
realistic chance of recovery. of chance realistic no is there when off written are Trade Receivables instrument. financial respective the of recognition initial since risk incredit changes to reflect date reporting each at is updated losses credit expected of amount The receivables. trade (‘ECL’) losses credit on expected for allowance loss a recognises Group the receivables, trade as such cost, at amortised held assets financial certain For • • • include: could impairment of evidence objective receivables, lease finance and notes redeemable including Assets, Financial other all For impairment. of evidence objective to be is considered cost its below security the of value fair inthe decline prolonged or asignificant shares, unlisted For point-of-sale costs at the point of 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 afirst on determined cost, of lower the at valued are Inventories Inventories finance lease obligation. lease finance a as Position Financial of Statement Consolidated inthe 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 inprofit included are payments lease Operating lessee as Group term. lease the over instalments inequal loss or inprofit 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 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 87 Statement of accounting policies 88 Statement of accounting policies H. lives (not exceeding 5years). (not exceeding lives useful estimated their over amortised are assets as recognised costs development software Computer overheads. relevant of portion an appropriate and costs employee development software the include 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 that costs development software Computer 7years. 5and 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 Internally-generated • • • • demonstrated:been have conditions following the of all unless incurred period inthe is expensed expenditure Development only. asset the of phase development inthe incurred expenditure represents 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 programmes software computer maintaining with associated Costs basis). line astraight on 5years 3and (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 are licences and trademarks patents, property, intellectual as such Assets Intangible Purchased assets intangible Purchased assets Intangible and to use or sell the intangible asset. intangible the sell to or use and development the complete to resources other and financial technical, adequate of availability The development; and 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 impairment loss is treated as a revaluation increase. arevaluation as is treated loss impairment the case inwhich amount, arevalued at is carried asset relevant the unless immediately, Loss and Profit inthe is recognised loss an impairment of Areversal 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 a at is carried asset relevant the unless immediately, Loss and Profit inthe is recognised loss impairment in An use. 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 subsequently reversed. 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 life 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 non-financial of Impairment J. L. K. 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 to the Group’s contributions The benefits. future for liability contribution financial or legal no has Group the and Crown the by generated are Future benefits Plan. Superannuation Benefit Defined Crown the of part a are that employees of number asmall are There plan contribution Defined payable. or paid rates the at measured and is taken leave the when recognised are leave sick non-accumulating for Liabilities liabilities. non-current as recorded are and date reporting to up employees by provided services of respect in 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 investments and any other non-current assets. 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 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 which payables, and receivables of exception the with basis exclusive aGST on prepared are Statements Financial The Tax (GST) Services and Goods
N. M. Group. the of structure debt and equity inthe changes to relating activities those are activities Financing activities Financing interpretations applicable to the 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 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, 4-year the of end the At maximum. specified to up a 4years of aperiod for costs claim its all for is liable Group the Programme, Partnership the Under Programme. Partnership (ACC) Corporation Compensation Accident the of is part Group The contracts Insurance 89 Statement of accounting policies Notes to and forming part of the consolidated financial statements For the year ended 30 June 2019
1 Revenue
Revenue recognition
Ministry of Business, Innovation and Employment (MBIE) Revenue received from New Zealand’s Strategic Science Investment Fund (SSIF) and other MBIE funding is considered to be a grant for research purposes and is accounted for under NZIAS 20, Accounting for Government Grants and Disclosure of Government Assistance.
Our Land and Water National Science Challenge Revenue received in respect of “Our Land and Water” National Science Challenge funding is accounted for as research revenue and bought to account as services are provided, based upon the proportion of completion of the contract at the end of the reporting period. The stage of completion is the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs.
The Our Land and Water National Science Challenge contract is considered to be a Principal relationship for revenue recognition due to: • The requirement for the AgResearch Board to appoint the OLW Board and oversee its operation • The involvement of the AgResearch Board and Management in the planning and Directorate of this contract • The accountability relationship that the AgResearch Board has with MBIE (the customer) over the operations and outcomes of this contract.
Commercial revenue The Group derives revenue from the provision of research services to a range of Agriculture based customers in New Zealand. These contracts are typically determined to have one single performance obligation which are integrated and are fulfilled over time.
The transaction price is normally fixed at the start of the project. The nature of commercial contracts can sometimes lead to variations in the job scope which is known as contract modification. It is also normal practice for contracts to include bonus and penalty elements based on timely construction or other performance criteria known as variable consideration. An estimate of variable consideration is included in the transaction price to the extent that it is highly probable that a significant reversal of revenue will not occur when any uncertainty is subsequently resolved.
Under the terms of the written contracts, the Group is contractually restricted from redirecting research outcomes to another customer and has an enforceable right to payment for work done. Therefore NZ IFRS 15.35(c) is satisfied and the Group recognise revenue in relation to contracting service over time.
Contract assets are initially recognised at fair value. They are subsequently adjusted for credit impairment loss. The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
The Group becomes entitled to invoice customers for research services based on achieving a series of performance-related milestones. The Group will previously have recognised a contract asset for any work performed. Any amount previously recognised as a contract asset is reclassified to trade receivables at the point at which it is invoiced to the customer. If the milestone payment exceeds the revenue recognised to date under the cost-to-cost method then the Group recognises a contract liability for the difference. There is not considered to be a significant financing component in commercial contracts with customers as the period between the recognition of revenue under the cost-to-cost method and the milestone payment is always less than one year.
Farm produce Revenue from the sale of goods is recognised when the Group has transferred to the buyer the control of the goods.
Other revenue - royalties Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement and usage volumes provided by licensees.
Other revenue - dividend and interest revenue Dividend revenue from investments is recognised in the financial period in which the right to receive payment is established. Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.
in thousands of New Zealand dollars 2019 2018 Other revenue Interest 1,247 2,118 Dividends 4 156 Royalties 11,970 11,034 Rent 4,127 3,408
Notes to financial statements 17,348 16,716
90 2 Operating expenditure in thousands of New Zealand dollars Note 2019 2018 Employee related Salary and wages 66,138 63,986 Defined contribution plans 1,741 1,677
Operational Amortisation and impairment of intangible assets 14 620 348 Depreciation 7 9,571 9,301 Operating lease expenses 3,201 2,919 Other operating expenses 25,383 24,637 Science 3rd party sub-contracts 21,490 21,193 Site and property expenses 5,882 6,797 Supplies 16,874 14,116
Financial and administration Auditor's remuneration - for services as auditor* 278 269 Bad debts 14 1 Change in provision for doubtful debts (103) 91 Directors' fees 282 333 Donations 2 2 Financial and legal expenses 2,427 2,340
Impairments and write downs/(write backs) Impairment of investments - - Impairment/(write back) of financial assets 12 - - Impairment of property, plant and equipment 7 (8) 7 153,792 148,017 * The audit fee includes Office of the Auditor-General overhead contribution of $21,300 (30 June 2018: $20,900).
3 Other gains/(losses) in thousands of New Zealand dollars Note 2019 2018 Net gain/(loss) from foreign currency exchange (30) 23 Net gain/(loss) on sale of property, plant and equipment 2,430 93 Net gain/(loss) on sale of investments (805) - Change in fair value of derivative financial instruments (53) 126 Change in fair value of forestry 11 192 238 Change in fair value of livestock 10 22 398 Impairment of LUAGRJF Limited Partnership* (8,837) 269 (7,081) 1,147 *Both AgResearch and Lincoln University agreed not to proceed with construction and as such the LUAGRJF investment was impaired as at 30 June 2019 for $8,815k (2018:Nil).
4 Investments in associates and joint ventures
An Associate is an entity over which the Group has the capacity to exercise significant influence through participation in the financial and operating policy decisions of the investee, but does not control or have joint control over those policies. Notes to financial statements
91 92 Notes to financial statements Overseer Limited Blinc Innovation Limited Encoate HoldingsLimited Consortia] Limited) Consortium (heldvia AgResearch [PPGR Pastoral GreenhouseGasResearch Biopolymer NetworkLimited DEEResearch Limited Limited Velvet Antler Research NewZealand Clone InternationalPtyLimited* Associate companies Associate to theGroup. are recognisedintheGroup’s Consolidated FinancialStatementsonlytotheextentofinterestsin Associate thatarenotrelated When aGroupentitytransactswithan Associate oftheGroup,profitsandlossesresultingfromtransactionswithassociate income relatingtothatreductioninownership interestistaken totheProfitandLoss. assets orliabilities. Where itdoes, theproportionofgainorlossthathadpreviouslybeenrecognisedinothercomprehensive recognised gainsorlosses. Itdoes soifthatgainorlosswouldbereclassifiedtotheProfitandLossondisposalofrelated When theGroupreducesitsownership interestinan previously Associate butcontinuestousetheEquitymethod,itmayreclassify (as areclassificationadjustment)whentheEquitymethodisdiscontinued. to profitorlossonthedisposalofrelatedassetsliabilities, theGroupreclassifies gainorlossfromequitytoprofit liabilities. Therefore, ifagainorlosspreviouslyrecognisedinothercomprehensiveincomebythat Associate wouldbereclassified in relationtothat Associate on the samebasisaswouldberequiredifthat Associate haddirectlydisposedoftherelatedassetsor disposal oftheassociate.Inaddition,Groupaccountsforallamountspreviouslyrecognisedinothercomprehensiveincome interest andany proceedsfromdisposingofapartinterestintheassociateisincluded determinationofthegainorlosson between thecarryingamountof Associate atthedateEquitymethodwas discontinued,andthefairvalue ofany retained a financialasset,theGroupmeasuresretainedinterestatfairvalue atthatdateinaccordancewithNZIAS39. The difference investment isclassifiedasheldforsale. WhentheGroupretainsaninterestinformer Associate andtheretainedinterestis The GroupdiscontinuestheuseofEquitymethodfromdateaninvestment ceasestobean Associate, orwhenthe Group andinvestee iseliminated. Associates. InassessingtheGroup’s shareofearnings Associates, theGroup’s shareofany unrealisedsurplusesbetweenthe the reservesareincreasedbyGroup’s shareofthepost-acquisitionretainedsurplusandotherreserves are recogniseddirectlyagainstthecarryingvalue oftheinvestment. IntheStatementofFinancialPosition theinvestment and Group recognisesitsshareofotherpost-acquisitionmovements inreserveswithinequity. Dividendsreceivedfromassociates share ofan Associate’s profitorlossisadjustedtoaligntheaccountingpoliciesofinvestee withthatoftheGroup. The The Grouprecognisesitsshareofan Associate’s postacquisitionnetprofitorlossfortheyearinitsProfitandLoss. TheGroup’s reassessment, isrecognisedintheProfitandLossperiodwhichinvestment isacquired. Any excess oftheGroup’s shareofthenetfairvalue oftheidentifiableassetsandliabilities over thecostofinvestment, after Goodwill maybeimpaired,any impairmentisrecognisedimmediatelyintheProfitandLossnotsubsequentlyreversed. investment. The Goodwillisassessedannuallyforimpairmentaspartoftheinvestment. Whenever thereisanindicationthatthe of theidentifiableassetsandliabilitiesinvestee isrecognisedasGoodwill,whichincludedwithinthecarryingamountof On acquisitionoftheinvestment inan Associate, any excess ofthecostinvestment over theGroup’s shareofthenetfairvalue An investment inanassociateisaccountedforusingtheEquitymethodfromdateonwhichinvestee becomesan Associate. constructive obligationsormadepaymentsonbehalfoftheassociate. recognising itsshareoffurtherlosses. Additional lossesarerecognised onlytotheextentthatGrouphasincurredlegalor associate. When theGroup’s shareoflossesanassociateexceeds theGroup’s interestinthatassociate,theGroup discontinues torecognisetheGroup’sat costandadjustedthereafter shareoftheprofitorlossandothercomprehensiveincome Under theEquitymethod,aninvestment inanassociateisinitiallyrecognisedtheconsolidatedStatementofFinancialPosition investment, oraportionthereof, isclassifiedasheldforsale,inwhichcaseitaccountedaccordancewithNZIFRS5. The GroupFinancialStatementsincorporatetheGroup’s interestsinassociatesusingtheEquitymethod,except whenthe 4 Investments in associates and joint ventures (continued) 30 September 31 December Balance date 30 June 30 June 30 June 30 June 30 June 30 June and voting power heldby and votingpower % ofownershipInterest 2019 50 20 50 22 33 50 50 - the group 2018 50 20 50 22 33 50 50 25 Overseer modeltoendusers Operating entitysetuptosub-licensethe sector inNewZealand andinternationally opportunities togrow asustainableagri- Deliver agri-sectorresearchandeducation probiotics stabilisationtechnologies To researchanddevelopbacteria any resultingintellectual property gases producedbyruminantsandexploit To undertake researchintogreenhouse performance, bio-basedproducts Research anddevelopment high- (except deervelvet) farming andprocessingfordeerproducts Research anddevelopment relevant todeer intellectual property research andcommercialisingthe Managing investments invelvetantler Cloning high-value horses, cattleandsheep Principal Activity
andjointventures Summarised financialinformationforassociates All associatesareprivate entitiesandthereisnoquotedmarket priceavailable fortheinvestments. There are no restrictions on the ability of any associate to pay dividends, repay loans or otherwise transfer funds to the investor company. All associatesareincorporatedinNewZealand except forCloneInternationalPtyLimited,whichwas incorporatedin Australia. ** The LUAGRJF investment was impairedasat30June2019,seenote3. * CloneInternationalwas deregisteredinJune2019. A debtowing fromCloneInternational($2.7k)was writtenoffintheyear. SDH GPLimited Southern DairyHubLimitedPartnership LUAGRJF GPLimited LUAGRJF LimitedPartnership**
Associate companies Associate Group intendstosettleitscurrenttax assetsandliabilitiesonanettaxbasis. Deferred taxassetsandliabilitiesareoffset whentheyrelatetotheincometaxes leviedbythesametaxationauthorityand and liabilities. follow fromthemannerinwhichGroup expects,atthereportingdate,torecoverorsettlecarryingamount ofitsassets enacted byreportingdate. The measurementofdeferredtaxliabilitiesandassetsreflectstheconsequences thatwould liabilities givingrisetothemarerealisedorsettled,basedontaxrates(and taxlaws)thathavebeenenactedorsubstantively Deferred taxassetsandliabilitiesaremeasuredattheratesthatexpected toapplytheperiod(s)whenassetsand foreseeable future. taxable profitsagainstwhichtoutilisethebenefitsofthetemporarydifferencesandtheyareexpectedreversein differences associatedwiththeseinterestsareonlyrecognisedtotheextentthatitisprobabletherewillbesufficient the temporarydifferenceswillnotreverseinforeseeablefuture.Deferredtaxassetsarisingfromdeductible and jointventuresexcept wheretheGroupis able tocontrolthereversaloftemporarydifferencesanditisprobablethat Deferred taxliabilitiesarerecognisedfortaxabletemporarydifferencesarisingoninvestments insubsidiaries,associates recognised inrelationtotaxabletemporarydifferencesarisingfromGoodwill. business combination)whichaffectsneithertaxableincomenoraccountingprofit. Furthermore, adeferredtaxliabilityisnot temporary differencesgivingrisetothemarisefromtheinitialrecognitionofassetsandliabilities(otherthanasaresult ofa or unusedtaxoffsets(forexample,losses)canbeutilised.However, deferredtaxassetsandliabilitiesarenotrecognisedifthe the extentthatitisprobablesufficienttaxableamountswillbeavailableagainstwhichdeductibletemporarydifferences In principle,deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferences.Deferredassetsrecognisedto corresponding taxbaseofthoseitems. arising fromdifferencesbetweenthecarryingamountofassetsandliabilitiesinFinancialStatementsand Deferred Tax isaccountedforusingtheComprehensive BalanceSheetLiabilitymethodinrespectoftemporarydifferences Deferred tax date. Currenttaxforcurrentandpriorperiodsisrecognisedasaliability(orasset)totheextentthatitunpaidrefundable). tax lossfortheperiod.Itiscalculatedusingratesandlawsthathavebeenenactedorsubstantivelybyreporting Current taxiscalculatedbyreferencetotheamountofincometaxes payableorrecoverableinrespectofthetaxableprofit Current tax Taxation 5 investments Aggregate carryingamountoftheGroupandCompany’s interestintheassociate Share oftotalcomprehensiveincome Share ofprofit/(loss)fromcontinuingoperations in thousandsofNewZealand dollars * Pastoral GenomicsGreenhouseGasResearch Aggregate carryingamountoftheGroupandCompany’s interestinthejointventures* 4 Investments in associates and joint ventures (continued)
Balance date 30 June 30 June 31 May 31 May and voting power heldby and votingpower % ofownershipInterest 2019 37.5 37.5 38.7 38.7 the group 2018 37.5 37.5 38.7 38.7 General Partner industry goodactivities Promotion anddevelopmentofdairy General Partner with LincolnUniversity manage ajointfacilitiesbuildingtogether Operating entitysetuptodevelop,own and Principal Activity (1,266) (1,266) 6,068 5,609 2019 459 15,370 14,756 (719) (719) 2018 614 93 Notes to financial statements 94 Notes to financial statements Effect ofexpensesthatarenotdeductible Foreign surplus/(deficit)notrecognisedfortax Effect ofrevenuethatisexempt fromtax Income taxexpensecalculatedat28%(2018:28%) Income tax expense/(benefit) recognisedinprofitorloss Income taxexpense/(benefit) Effect ofimpairment(reversals)/lossesthatarenot(assessable)/deductible Loss fromcontinuingoperations reconciledtotheaccountingprofitasfollows: The totalchargefortheyearcanbe Total taxexpense/(benefit) Current taxexpense Tax comprises: expense in thousandsofNewZealand dollars Group anditisprobablethatthetemporarydifferencewillnotreverseinfuture. in jointventureoperationsarerecognised,except wherethetimingofreversaltemporarydifferenceiscontrolledby Foreign deferredtaxassetsthatresultfromoperatinglossesin respectofsubsidiaries, associates, jointventureentitiesorinterests deferred taxexpenseorincome. Exchange differencesondeferredforeigntaxliabilitiesorassetsrecognisedintheProfitandLossforperiodareclassifiedas Foreign taxliabilitiesandassets • • Current anddeferredtaxisrecognisedasanexpenseorincomeintheProfitLoss,except when: Current anddeferredtaxfortheperiod Taxation5 (continued) Tax refundreceivable Current taxassets Current taxassetsandliabilities in thousandsofNewZealand dollars Revaluations offinancialassets Property revaluations Arising onincomeandexpensestaken directlytoequity: Deferred tax Income taxrecogniseddirectlyinothercomprehensiveincome in thousandsofNewZealand dollars prior years Adjustments recognisedinthecurrentyearrelationtocurrentanddeferredtaxof Non assessablecapital(gain)/loss Associates' resultsreportednetoftax Adjustments recognisedinrelationtothedeferredtaxofprioryears Deferred taxexpenserelatingtotheoriginationandreversaloftemporarydifferences Adjustments recognisedinrelationtothecurrenttaxofprioryears Benefit ofcurrentyeartaxlosses Total deferredtaxrecogniseddirectlyinothercomprehensiveincome Net currenttax(liability)/asset Income taxpayable Current taxliabilities goodwill orexcess. It arisesfromtheinitialaccountingforabusinesscombination,inwhichcaseitistaken intoaccountinthedeterminationof It relatestoitemsrecognisedinequity, inwhichcasethedeferredtaxorcurrentisalsorecogniseddirectlyequity; (1,356) (4,844) 1,039 1,332 (646) (171) 2,164 2,046 2,993 2,164 (718) 2019 2019 2019 118 634 369 718 7 9 ------(1,836) (5,310) (5,231) (400) (514) (831) (831) (831) (589) (453) 2018 2018 2018 (90) 128 211 714 677 716 27 18 79 39 2 - - - Tax losses Unused taxlossesandcredits Provisions Financial assets Intangible assets Property, plant&equipment Biological assets Temporary differences 2018 Tax losses Unused taxlossesandcredits Provisions Financial assets Intangible assets Property, plant&equipment Biological assets Temporary differences 2019 Deferred taxassets/(liabilities)arisefromthefollowing: in thousandsofNewZealand dollars 5 Taxation5 (continued) During 2019 Winchmore Farm was sold,generatingareductionintheassetrevaluation reserveof$9.1m. impairment lossorgainonthisrevaluation isrecognisedintheProfitandLoss. An assetisrevalued tothelower ofitscarryingamountorfairvalue lesscosts tosell,whenitisclassifiedas available forsale. Any retained earnings. the portionofassetrevaluation reserverelatingtothatassetandisthereforeeffectivelyrealised,transferreddirectly The assetrevaluation reservearisesontherevaluation ofland,landimprovements andbuildings. Where revalued assetsaresold, Reserves Capital consistsof47,268,000fullypaidordinary sharesof$1.00each(2018:47,268,000fullypaidordinaryshares). Share Equity 6 capital Financial assets Revaluation ofproperties 2018 Financial assets Revaluation ofproperties 2019 of other comprehensive income Income tax effects relating to each component in thousandsofNewZealand dollars
(11,240) (11,262) (13,194) (17,665) (15,905) (15,905) Opening Opening balance 1,467 1,224 1,630 1,014 (338) (421) (261) (623) 22 - Charged to surplus (167) (202) (545) (184) (463) (463) (22) (12) 589 611 143 839 232 (2) 46 - Before tax Charged toother comprehensive amount 19,151 19,431 (280) - - - (5,231) (5,231) (5,310) income 79 ------expense (5,231) (5,310) Acquisitions disposals Tax 79 - - - (23) (23) (43) 20 ------tax amount (15,905) (15,905) (17,665) (16,368) (16,368) (18,210) balance Closing 13,920 14,121 Net of 1,618 1,060 1,630 1,014 (261) (623) (201) (807) (29) - - - - - 95 Notes to financial statements 96 Notes to financial statements Balance atendofyear Accumulated depreciation Cost orvaluation Balance atendofyear Depreciation Reclassified as ‘Assets HeldforSale’ Impairments Revaluation Disposals Additions Balance atbeginningofyear 2019 in thousandsofNewZealand dollars • • • • • The following estimatedusefullivesareusedinthecalculationofdepreciation: 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 assetsareclassifiedaslevel2inthefair value hierarchy. Capital workinprogressisrecordedatcost. All otherassetsarerecordedatcostlessaccumulateddepreciationandimpairment. extent thatitexceeds thebalance,ifany, heldintheassetrevaluation reserverelatingtoapreviousrevaluation ofthatasset. carrying amountontherevaluation ofland,landimprovements andbuildingsischargedasanexpenseinProfitLosstothe and Loss, inwhichcasetheincreaseiscreditedtoProfitandLossextentofdecreasepreviouslycharged. Adecreasein reserve, except totheextentthatitreversesarevaluation decrease forthesameassetpreviouslyrecognisedasanexpenseinProfit Any revaluation increasearisingontherevaluation ofland,landimprovements andbuildingsisaccumulatedintheassetrevaluation the carryingvalue ofland,landimprovements andbuildingsis notmateriallydifferentfromtheirfair values. values arerecognisedinthefinancialstatementsofGroupandreviewedatendeachreportingperiodtoensurethat are revalued atleastevery3yearsorwhenevertherehasbeenanindicatorofasignificantmovement inthefair value. Thefair subsequent accumulateddepreciationandaccumulatedimpairmentlosses. Land,landimprovements andbuildings valuation preparedbyexternalvaluation experts(usingeithermarket value oroptimiseddepreciatedreplacementcost),lessany Land, landimprovements andbuildingsaremeasuredatfairvalue. Fair value isdeterminedonthebasisofanindependent Fair valuemeasurement • • • • • • The Grouphasthefollowing classesofproperty, plantandequipment: plant7 Property, and equipment • • • Plant andEquipment Vehicles 3-10years Leasehold Improvements 3-40years Buildings (includingfarms)5-80years Land Improvements 5-50years Capital workinprogress Plant andequipment Vehicles Leasehold improvements Buildings –campus/farms Land andlandimprovements –campus/farms Other PlantandEquipment3-15years Computer Hardware 3-5years Dairy PlantandEquipment5-25years improvements Land &land (10,387)
(1,138) 68,904 68,904 70,042 78,172 1,859 (740) - - - Buildings (7,895) (3,766) 78,963 78,963 86,858 82,978 (706) 457 - - - improvements Leasehold (513) (20) 197 710 197 217 - - - - - equipment (83,756) 104,773 (5,001) (1,065) Plant & 21,017 21,017 17,811 9,264 8 - - Vehicles (472) (44) 116 588 116 127 33 - - - - Progress Work in 35,766 35,766 35,766 21,219 14,547 Capital ------(93,774) (12,158) 204,963 298,737 204,963 193,852 (9,571) 32,832 Total 8 - - A totalwritedown ofassets$8k(2018:$1,301k)was reflected Balance atendofyear Accumulated depreciation Cost orvaluation Balance atendofyear Depreciation Reclassified as ‘Assets HeldforSale’ Impairments Revaluation Disposals Additions Balance atbeginningofyear 2018 in thousandsofNewZealand dollars measured onahistoricalcostbasis, theircarryingamountwouldhave beenasfollows: Had theGroup’s landandbuildings (otherthanlandandbuildingsclassifiedasheldforsaleorincludedinadisposalgroup)been Impairment reversalthroughprofitandloss plant7 Property, and equipment (continued) Land andlandimprovements in thousandsofNewZealand dollars Impairment throughprofitandloss in thousandsofNewZealand dollars Increases throughtheassetrevaluation reserve in thousandsofNewZealand dollars Through theassetrevaluation reserve,beingareversalofprioryearrevaluations. in thousandsofNewZealand dollars Buildings Decreases throughtheassetrevaluation reserve,beingareversalofprioryearrevaluations. A netrevaluation increaseofassets$0(2018:$19,431k)consisted Through theProfitandLoss Account for obsolescenceandsurpluscapacity. based onanestimateofthecurrentgross replacementcostofanassetlessallowances for physical deterioration,and optimisation site improvements suchasroadsandfenceswellbuildings. Optimiseddepreciatedreplacementcostisamethod ofvaluation Assets thathave aspecialiseduseforthe Grouphave beenvalued atoptimiseddepreciatedreplacementcost. These assetsinclude • • • where thereisanactivemarket forthesameorasimilarasset,value isdeterminedbyoneormoreofthefollowing: The Group’s landandbuildingshave beenvalued usingeithermarket value or optimiseddepreciatedreplacementcost.For assets Limited undertherequirementsofNZIAS16Property, PlantandEquipment. The Group’s land and buildings were revalued in the prior period. These valuations were performed by independent valuers Darroch subsequent depreciationandimpairments. The Group’s landandbuildingsarestatedattheirrevalued amounts, beingthe fairvalue atthedateofrevaluation, lessany Fair valuemeasurementoftheGroup’s landandbuildings A netimpairmentdecreaseofassets$8k(2018:$7k)consisted Cost approach. Income; and Direct comparison; improvements Land &land 78,172 78,172 78,611 76,531 2,945 (439) (708) (763) 166 1 - Buildings (4,283) (3,727) 82,978 82,978 87,261 16,486 69,788 439 (8) - - improvements Leasehold (499) (20) 217 716 217 237 - - - - - equipment (80,615) (4,802) Plant & 17,811 17,811 98,426 17,681 4,952 (20) - - - Vehicles (443) (44) 22,512 46,435 127 570 127 82 89 2019 2019 2019 2019 - - - - (8) (8) 8 8 - - - - - Progress Work in 14,547 14,547 14,547 11,425 Capital 3,122 ------(86,279) 193,852 280,131 193,852 167,448 (9,301) 19,431 17,064 21,004 20,352 46,664 19,431 1,301 (380) (921) (763) 2018 2018 2018 2018 Total (20) 373 380 921 (7) (7) 97 Notes to financial statements 98 Notes to financial statements Expected creditloss Estimated totalgrosscarryingamountatdefault Expected creditlossrate 2019 relation toeachdebtororgeneraleconomic conditionsoftheindustryinwhichdebtorsoperate. observable datathatmaymateriallyimpacttheGroup’s futurecreditrisk. This otherobservable dataincludesspecificfactorsin An expectedcreditlossrateisdetermined basedonthehistoriccreditlossratesforGroup,adjusted forothercurrent receivables withsharedcreditriskcharacteristics. Groupingsarebased oncustomer, tradingtermsandaging. a lifetimeexpectedlossallowance foralltradereceivables. The Groupdetermineslifetimeexpectedcredit lossesforgroupsoftrade The Groupmeasurestheprovision forexpectedcreditlosses(‘ECL’) usingthesimplified approachtomeasuringECL,whichuses Balance atendofyear 2 to3months Past due 1 to2months Current 2019 in thousandsofNewZealand dollars Trade receivables in thousandsofNewZealand dollars 8 Trade and receivables other Receivables written-offduringtheyear Additional provisions made(reversedduringthe year) Balance atbeginningofyear Movement intheprovisionfordoubtfuldebts in thousandsofNewZealand dollars in thousandsofNewZealand dollars Over 3months Receivables fromassociates 1 to2months Current 2018 Total tradereceivables Total Receivables Receivables fromotherrelatedparties 2 to3months Past due Net Receivables Less provision fordoubtfuldebts Group doesnotholdany collateralover thesebalances. The aginganalysis oftradereceivables is asfollows: past duebutnotimpaired. These relatetoanumberofindependentcustomersforwhomthereisnorecenthistorydefaults. The Terms oftradevary accordingtoindividualcustomercontracts. As at30June2019,tradereceivables of$719k(2018:$1,665k)were There werenorelatedpartypastduereceivables at30June2019.(2018:Nil). The fairvalue oftradeandotherreceivables isapproximately equaltotheircarryingvalue. Total tradereceivables Over 3months Current 30,087 0.01% 2 <30 days 0.12% 999 1 30-60 days 0.69% 30,260 30,897 32,675 29,625 30,354 28,410 194 1,215 1,778 1,439 Gross 190 729 539 637 339 1 61-90 days Doubtful debts 1.07% 125 1 30,354 31,808 31,798 1,346 (113) (113) (113) 2019 (10) (10) (10) 108 10 >91 days ------1.33% (103) 2019 403 113 10 - 5 31,808 32,675 30,260 33,726 30,897 33,613 32,562 29,625 30,344 28,410 1,215 1,665 1,326 2018 2018 Total 113 190 719 529 100 951 113 637 339 Net 10 91 22 - and managementstrategies. forces. The Grouphasprocessesinplaceaimedatmonitoringandmitigatingthoserisks, includingpestanddiseasemonitoring The Groupisexposedtofinancialrisks relatingtothedamagelivestockfromclimaticchanges, diseasesand othernatural Financial riskmanagementstrategies into accounttheage,breed,type,conditionandlocationoftheanimals. Livestock was valued byPGG Wrightson Limited byreferencetomarket evidenceofrecenttransactionsforsimilarlivestock,taking valuationmethod Livestock Quantity oflivestockatendyear Quantity oflivestockatendyear Balance atendofyear Balance atendofyear Changes infairvalue lessestimatedpoint-of-salecosts Changes infairvalue lessestimatedpoint-of-salecosts Net increaseduetobirths, growth anddeaths Net increaseduetobirths, growth anddeaths Decreases duetosales Decreases duetosales Increases duetoacquisitions Increases duetoacquisitions Balance atbeginningofyear Reconciliation ofchangesinthecarryingvalue 2019 Accrued salariesandwages Income inadvance Goods andservicestax(GST) in thousandsofNewZealand dollars interest method. This representstheirfairvalue 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 Trade and payables other Balance atbeginningofyear Reconciliation ofchangesinthecarryingvalue 2018 in thousandsofNewZealand dollars recognised throughtheProfitandLoss. allowance ismadeforareductioninthevalue ofcertainlivestockheldforresearchtrials. Changesinthevaluation oflivestockare Livestock arevalued attheirfairvalue lessestimatedpoint-of-salecostsbyreferencetothemostrelevant activemarket. An 10 Biological -livestock assets The Grouphasfinancialriskmanagementpoliciesinplacetoensurethatallpayables arepaidwithinthecredittimeframe. Financial riskmanagementstrategies interest ischargedontradepayables. The fairvalue ofpayables isapproximately equaltotheircarryingvalue asallamountsareexpectedtobesettledwithin90days. No Total Payables Payables toassociates Trade payables
(1,125) Sheep 1,367 8,883 8,121 1,188 1,188 1,139 (916) 149 161 777 554 378 250 Beef Cattle (1,112) (1,049) 1,413 1,194 1,194 1,482 (101) 964 862 382 429 392 433 6 Dairy Cattle 1,416 1,071 1,553 1,553 1,203 (408) (309) (57) 967 257 286 167 235 42 14,482 39,721 23,318 1,221 1,019 (326) (231) 2019 Deer 695 (76) 545 676 263 163 676 663 96 81 5 8 - 11,618 37,454 23,689 (2,505) (2,971) 1,527 4,190 1,708 4,611 4,611 1,313 4,487 2018 Total 620 398 820 918 22 - 99 Notes to financial statements 100 Notes to financial statements liability isnotrecognisedonthebalancesheetastherenocurrentintentionofchanginglandusesubjecttoETS. In theeventthatforestareasareharvested,adeforestationliabilityequivalent tothedecreaseincarbonwillbeincurred. This Land valueandcontingency risks ofadeclineintimberprices. not expecttimberpricestodeclinesignificantlyintheforeseeablefuture.Ithasthereforetaken any measurestomanagethe The Groupisexposedtofinancialrisks arisingfromchangesintimberprices. TheGroupisalong-termforestryinvestor anddoes Financial riskmanagementstrategies remaining unitsarecarriedattheiroriginalcostof$4.15perunit. During the2019financialyear, 31,142ETS unitsweredisposedof(2018:Nil)aspartapreviouslandsaletransaction. All Emissions units • • • • Additional inputstothevalue arrivedatare: • • • occurred forsimilartreecrops, value isbasedonthosetransactions. Where therehave beennosuchtransactions, value isbasedon: The methodologyusedis“stand-based”inlinewithforestrymanagementpracticesandharvesting. Where transactionshave Forestry was valued by Alan Bell& Associates asat30June2019. The value offorestryat30June2019was $1,157k(2018:$965k). Forestry valuations Area (ha)offorestatendyear Balance atendofyear Changes infairvalue lessestimatedpoint-of-salecosts in thousandsofNewZealand dollars The GrouphasradiatapinetreecropsatBallantrae,Invermay and Woolford. Compensation unitsarerecognisedbasedontheirmarket value onthedatereceived. land ischangedfromforestrytosomeotherpurpose),adeforestationliabilitywillarise. Forestry landissubjecttotheprovisions oftheNewZealand Emissions Trading Scheme(ETS). Shouldthelandbedeforested(the Emissions TradingScheme an applicablediscountrate.Changesinthevaluation offorestsareaccountedforthroughprofitorloss. Forests arerecordedattheirfairvalue lesspoint-of-salecostsonanannualbasisusinganticipatedharvestingtimingandyield 11 Biological -forestry assets • • • Valuation ofotherinvestments shares weredisposedof. During theyear$145kofFonterra sharesweresold. As partofthe Winchmore Farm sale,$458kof Ashburton Lyndhurst irrigation Total Other investments BioPacific Ventures Fonterra Co-operative GroupLimited in thousandsofNewZealand dollars investments 12 Other Decreases duetoharvestingandsaleofforestry Balance atbeginningofyear Reconciliation ofchangesinthecarryingvalue rolling average pricespublishedbytheMinistryforPrimaryIndustries. Current market pricesandlong-termtrendsinlogprices. Logpricesusedarebasedoncurrentmarket pricesand12-quarter An assumed3%compoundingrateonstandardcosts(2018:3%);and An 8.5%realdiscountrateonpre-taxcashflows (2018:9%); Anticipated harvesttimingandyield; For intermediatecrops, amixtureoftheabove. For youngcrops, standardinvestment costs;and For maturecrops, estimatesoffuturecostsandreturns; prices setbytheindividualentitiesasappropriate. All otherinvestments arevalued usingthequoted market priceon theNZXlistedmarket, NZXunlistedmarket ortheshare Fonterra sharesarevalued usingthequoted market price ontheNZXmarket. revaluations undertaken bythefundmanager. Investments heldthroughtheBioPacific Ventures investment fundarecarried atfair value, less any impairmentarisingfrom 1,157 2,241 1,776 2019 2019 116 192 455 965 10 - 3,667 2,717 2018 2018 110 965 238 940 727 10 - All provisions except forlong-termemployeeentitlementsareexpectedtobepaidwithinthefollowing financialyear. be measuredreliably. receivable isrecognisedasanassetifitvirtuallycertainthatreimbursement willbereceivedandtheamountofreceivable can When someoralloftheeconomicbenefitsrequiredtosettleaprovision areexpectedtoberecovered fromathirdparty, the is material,theexpectedexpendituresarediscountedtotheirpresentvalue using pre-taxdiscountrates. All provisions arerecordedatthebestestimate oftheexpenditurerequiredtosettleobligationatbalancedate. Where theeffect Provisions arenotrecognisedforfutureoperating losses. • • • Provisions arerecognisedwhen: 15 Provisions Total Farmax Limitedwas incorporatedasa100%subsidiaryinJune2018.In2019goodwillonacquisitionwas impairedby$136k. Closing Balance Present valueofnon-currentreceivable Non currentdebtorinrespectofsharessold Impairment Goodwill on Acquisition Present valueofnon-currentreceivable Other Less discounttonetpresentvalue consideration forPropertyBwas receivedinMay2019. Under thesaleandpurchaseagreement,partiesagreedtodefersettlementofPropertyBuntilMay2019. The cash and paymentfor, thoseassetsalsooccurredduringthatyear. Flock Housesite. With theexception ofoneparcelland(andassociatedimprovements) -referredtoasPropertyBdeliveryof, During 2014,theCompany enteredintoanagreementforthesaleofland,buildingsandotherproperty, plantandequipmentatits receivables 13 non-current Other in thousandsofNewZealand dollars During theyear, theimpairmentofotherinvestments inprior years werereversedasfollows: Impairment ofotherinvestments (continued) investments 12 Other Opening Balance in thousandsofNewZealand dollars The movement ofgoodwillfor2019isshown below: 14 Goodwill Amount receivable underSale&Purchase Agreement in thousandsofNewZealand dollars BioPacific Ventures Fund The amounthasbeenreliablyestimated. It ismorelikely thannotthatanoutflow ofresourceswillberequiredtosettletheobligation;and The Grouphasapresentlegalorconstructiveobligationasresultofpastevents; 1,043 (136) 2019 2019 2019 907 ------4,536 1,043 4,529 1,043 4,700 (171) 2018 2018 2018 7 - - - - - 101 Notes to financial statements 102 Notes to financial statements Total provisions Non-current liabilities Current liabilities Represented by: Balance atendofyear Provisions reversedduringtheyear Provisions usedduringtheyear Provisions madeduringtheyear Balance atbeginningofyear 2019 Provisions reversedduringtheyear Non-current liabilities Current liabilities Represented by: Balance atendofyear Provisions usedduringtheyear Provisions madeduringtheyear Balance atbeginningofyear 2018 • • • • • The Groupmanagesitsexposurearisingfromtheprogrammebypromotingasafeandhealthy workingenvironment by: Objectives formanagingrisks isolated eventtoanindividualemployee. The Groupisnotexposedtoany significantconcentrationsofinsuranceriskaswork-related injuriesaregenerally theresultofan assumptions willnothave amaterialimpactontheFinancialStatements. The movement inthevalue oftheliabilityisnotmaterialforGroup’s FinancialStatements. Therefore, any changesin at 31January2019. inflation ratesare Treasury-issued futureratesasat31January2019. 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 dateclaiminflation hasbeentaken as50%ofmovements inthe For theclaimyearended2019Grouphaschosenastoplosslimitof175%riskwhichmeansthatwillonlycarry determine theoutstandingliabilityasat30June2019. the valuer attestedsatisfactionastothenature,sufficiencyandaccuracyofdata. Thedataat30June2018hasbeenusedto An independentactuarialvaluer (AON NewZealand) hascalculatedtheGroup’s liabilityasat30June2018,aresult of this, Liability valuation ACC partnershipprogramme Employee entitlementsrepresentsannualleave, alternativedays leave, sickleave, longservice leave andperformancepay. Employee entitlements Group andincludesterminationbenefits. The restructuringprovision representsthedirectcostsofrestructuringwhichisnotassociatedwithongoingactivities Restructuring provision contamination atitsGrasslandscampus. The amountprovided in2019asanonerouscontractrelatestocostsexpectedbeincurredremediatingasbestos are recognisedasaprovision totheextentthatpresentobligationexceeds theeconomic benefits estimatedtobereceived. the unavoidable costsofmeetingtheGroup’s obligationunderthecontract.Presentobligationsarisingonerouscontracts A provision foranonerouscontractisrecognisedwheretheeconomicbenefitsexpectedtobederivedfromaarelessthan Onerous contracts Total provisions in thousandsofNewZealand dollars 15 Provisions (continued) workplacehazards andimplementationofappropriatesafetyprocedures.Identifying Recording riskareasandimplementingmitigatingactions; and andmonitoringworkplaceinjuriesnear missestoidentify Actively managingworkplaceinjuriesto ensureemployeesreturntoworkassoonpractical; Induction trainingonhealthandsafety; Implementing andmonitoringhealthsafetypolicies; Restructuring (1,048) 1,563 (692) (103) 115 115 115 228 577 577 577 165 577 2 - - entitlements Employee (2,688) (5,840) 4,795 4,795 4,795 2,777 4,678 4,678 4,678 5,898 4,700 4,678 (80) 28 - - (164) (146) (206) (136) ACC 304 269 304 351 263 229 263 333 272 263 35 34 Onerous contract (603) 227 227 227 830 830 830 830 830 ------(7,094) (3,526) 5,441 5,406 5,441 3,356 6,348 6,314 6,348 8,624 5,137 6,348 (319) (737) Total 35 34 in thousandsofNewZealand dollars revenue receivable intheyearendingJune2020. to payup$200,000intheeventthatagreedrevenuetargetsFarmax Limitedaremet. The amountpayable isbasedupon As partofthepurchaseagreementforacquisitionthe50%shareholdinginFarmax Limited, AgResearch Limitedhasagreed Deferred sharepurchasesettlement the lease(includingrenewal periods). has paidanupfrontlumpsumaskey moneyinrelationtothelease. The key moneyisbeingrecognisedasincomeover thetermof In 2015, AgResearch Limitedsoldabuildingandenteredintosub-leaseofthelandonwhichislocated. The lessee Key money liabilities non-current 16 Other recognised onacquisitionplustheirshareofpost-acquisitionsurpluses. The interestsofany non-controllingShareholdersarestatedinproportionofthefairvalues oftheidentifiableassetsandliabilities control commencedoruntilthedatethatceased. The resultsofany subsidiariesthatbecome,orceasetobe,partoftheGroupduringyear areconsolidatedfromthedatethat Subsidiaries areentitiescontrolledbytheGroup. 17 Investments in subsidiaries Deferred Shareacquisitioncosts Key moneyreferabletoleaseincurrentperiod Key moneyreceivedinadvance All subsidiarycompaniesareincorporatedinNewZealand. Grasslanz Technology Limited. All othersubsidiarycompaniesaredirectsubsidiariesof AgResearch Limited. Grasslanz Technology LimitedisadirectsubsidiaryofCelentis Limited. AgResearch (USA)Limitedisadirectsubsidiaryof Farmax Limited Phytagro NewZealand Limited Covita Limited AgResearch (PPGRConsortia) Limited AgResearch (Pastoral GenomicsConsortia) Limited
Celentis Limited Subsidiary companies Grasslanz Technology Limited AgResearch (USA)Limited
Balance date 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June voting power heldbytheGroup voting power % ofownershipinterestand 2019 100 100 100 100 100 100 100 100 2018 100 100 100 100 100 100 100 100 of farmmanagementsoftware Development anddistribution Holding company Holding company Holding company Holding company management intheUSA Cultivar developmentand management Cultivar developmentand Holding company Principal activity 2019 (60) 766 200 566 626 2018 (59) 826 200 626 685 103 Notes to financial statements 104 Notes to financial statements Net cash flow from operating activities Net cashflowfromoperating in thousandsofNewZealand dollars 18 Reconciliation of surplus with cash tax net flowfrom operating after activities All significantoperatingleasecommitments relatetolandandbuildings. Total leases non-cancellableoperating Payable laterthan5years Payable laterthan1yearandnotlonger5years Payable nolaterthan1year leasepayables Non-cancellable operating in thousandsofNewZealand dollars Operating20 arrangements lease Margot Forde GermplasmCentre Asset outlined below: Directors believethereisnopracticalbasisuponwhichtoreliablymeasurethevalue ofthiscollection.Detailsthecollectionare The natureofthisheritageasset,anditssignificancetothescienceGroupundertakes, make itnecessarytodiscloseit. The geographical, scientificand/orenvironmental attributes. TheGrouphasidentifiedaGermplasmcollectionasheritageasset. Heritage assetsarethosethatheldforthedurationoftheirphysical livesbecauseof theiruniquecultural,historical, 19 assets Heritage Net (gain)/lossonsaleofinvestments andintangibleassets Increase/(decrease) inproperty, plant&equipment,intangibleassetsinvestment accruals Net (gain)/lossonsaleofproperty, plantandequipment Items classifiedasinvesting activities Increase/(decrease) inpayables Increase/(decrease) inprovisions (Increase)/decrease inpropertyheldforsale (Increase)/decrease inprepayments (Increase)/decrease inreceivables (Increase)/decrease inlivestock (Increase)/decrease ininventory Increase/(decrease) indeferredtaxation Change incurrenttaxation Movements inworkingcapital Other non-cashitems Change infairvalue ofderivative financialinstruments Net (gain)/lossfromforeigncurrencyexchange Investment impairment/write-down Asset impairment/writedown Change infairvalue oflivestock Change infairvalue offorestry Share ofdeficitassociates Intangible assetsamortisationandimpairment Depreciation Non-cash items tax Surplus after
grasses andlegumes New Zealand’s nationalgenebankofgrassland plantsand Australia’s genebank forperennial Description (2,429) (7,008) (2,544) (1,729) 14,142 7,530 3,819 2,751 2,151 1,286 9,571 (908) (972) (192) 2,237 1,785 1,395 8,837 2019 2019 (83) 960 463 829 620 763 (8) 46 32 - (3,948) (2,138) (6,541) (1,005) 10,570 10,223 1,573 4,665 5,649 3,001 9,619 1,211 9,301 (718) (126) (332) (269) (398) (238) 2018 2018 (93) 274 114 719 348 95 23 7 - the jointarrangementandretentionofownership rightstopre-existingIPcontributedbytheparties. a jointoperationbyvirtueofthecontractualarrangements, theparties’rightsto theeconomicinputsandoutputsof whichspecify AgResearch Limited.GrasslandsInnovation LimitedisincorporatedinNewZealand. GrasslandsInnovation Limitedisconsidered The 30%interestinGrasslandsInnovation LimitedisheldviaGrasslanz Technology Limited, awholly-owned subsidiaryof Grasslands Innovation Limited in thousandsofNewZealand dollars Refer tonote2wheretheoperatingleaseexpenseforyearisdisclosed. normal provisions forperiodic rentreviewstomarket rates. Building leasesareforatleast10yearsorhave rightsofrenewal thatare,inaggregate,foratleastperiod. All leaseshave using thelandprimarilyforagriculturalpurposesand/orresearchanddevelopmentpurposes. Limited. The leasehasarestrictioninrespectoftherighttooccupyperpetuity, whichonlycontinuesif AgResearch Limitedis The landleasewith Tainui GroupHoldingsLimitedisinperpetuitybutwithrightsofrenewal thatareexecutable by AgResearch Operating20 arrangements lease (continued) Trading transactionswithrelatedparties party transactionsisdetailedbelow. enterprises andgovernment departments, whicharecarriedoutonacommercialandarm’s lengthbasis. A summaryofotherrelated The ultimateshareholderoftheGroupisCrown. The Groupundertakes many transactionswithotherCrown entities, state-owned parties Transactions22 related with Details oftheGroup’s material jointoperationsattheendofyearareasfollows: joint operation. transacts withitsjointlycontrolledentities, unrealisedprofitsandlossesareeliminatedtotheextentofGroup’s interestinthe are incorporatedintotheGroupfinancialstatementsonalinebybasisusingproportionatemethod. Where theGroup project andshareinany resultingoutput. The Group’s share oftheassets, liabilities, revenuesandexpensesofjointoperations undertake aspecificbusinessprojectandinwhichthejointpartiesareseverallyliablerespect ofcostsandliabilitiesthe Joint operationsarejointarrangementsbetweentheGroupandanotherpartyinwhichthereiscontractualagreementto 21 Joint operation investments property attheexpiryofleaseperiod. operating leaseshave normalprovisions forperiodicrentreviewstomarket rates. Nolesseeshave anoptiontopurchasethe 1 monthand11years, withoneleasehaving anoptiontoextendforafurtherfiveterms, eachof5years. With oneexception, Operating leasereceivables relatetolandandbuildingsowned andleasedby AgResearch Limited. The leasetermsarebetween Total leases non-cancellableoperating Receivable laterthan5years Receivable laterthan1yearandnotlonger5years Receivable nolaterthan1year leasereceivables Non-cancellable operating in thousandsofNewZealand dollars Joint operations Associates andjointventures Subsidiaries Transactions between AgResearch andrelatedparties: Research, development andotherservices Entities ofwhichkey managementpersonnelareassociated * Transactions betweenthe Groupandrelatedparties: Balance date
30 June voting power heldbytheGroup voting power % ofownershipinterestand 2019 30 9,176 3,877 5,445 2019 393 Saleofservices 2018 30 8,310 4,016 6,536 2018 To identify, developandexploit product 346 cultivars andotherforagetechnologies opportunities inproprietaryforage 1,346 1,061 1,584 2019 108 8,118 4,504 3,200 2019 414 Principal Activity Duefrom 10,286 1,989 5,741 2,556 1,950 2,827 2018 2018 951 100 105 Notes to financial statements 106 Notes to financial statements The compensationoftheDirectorsandExecutives, beingthekey managementpersonneloftheGroup,comprised: Key Details ofthepercentageinterestsheldinrelatedpartiesaredisclosednotes4and17toFinancialStatements. Equity interestinrelatedparties management *** Transactions inprioryearclassedasLincolnUniversitynow classedasLUAGRJF ** Key managementpersonnelarenolongerassociatedwiththeseentities. personnel compensation Total TB Free NewZealand Limited** NZ Post Museum ofNewZealand Macfarlane RuralBusinessLimited** LUAGRJF LimitedPartnership*** Lincoln University Landcare Research NewZealand Ltd Grasslanz Technology Ltd Grasslands Innovation Limited Farmax Ltd Enviro-Mark SolutionsLimited Deer IndustryNewZealand** Blinc Innovation Limited Biopolymer NetworkLimited ANZCO Foods Limited** in thousandsofNewZealand dollars 22 Transactions with related parties (continued) parties Transactions22 related with Salaries andothershort-termemployeebenefits in thousandsofNewZealand dollars in thousandsofNewZealand dollars Subsidiaries Transactions between AgResearch andrelatedparties: Research, developmentandotherservices Entities ofwhichkey managementpersonnelareassociated* Transactions betweentheGroupandrelatedparties: Associates andjointventures * Trading transactionswithentitiesofwhichkey managementpersonnelareassociatedinclude: NZ IAS24. No transactionswithotherNewZealand Government-owned entitiesareconsideredrelatedpartytransactionsintermsof accounts. The weightedaverage interestratewas 3.18%(2018:3.39%). During theyear AgResearch Limitedmadeinterestpaymentsof$122k(2018:$109k)toitssubsidiariesonintercompany current related parties. or received.Noexpensehasbeenrecognisedintheperiodforbaddoubtfuldebtsrespectofamountsowed by The amountsoutstandingareunsecured,onnormaltradetermsandwillbesettledincash.Noguaranteeshave beengiven 5,445 3,866 2019 777 393 264 134 11 Sale ofservices ------5,442 4,213 2019 Purchaseofservices 574 1,861 4,009 6,536 2018 119 413 89 36 7 2 ------Purchase ofservices 5,442 3,040 1,740 2019 108 133 216 6,300 3,296 98 88 19 2018 176 ------6,300 2,135 2,247 1,538 2018 138 203 37 2 ------2019 128 53 5 Due from(dueto) 1,456 1,016 3,082 2019 2019 305 108 (4) (8) (5) 44 ------Dueto
2,655 1,914 2,581
2018 2018 2018 455 154 172 88 32 12 25 ------shortfalls. As at30June2019,therewereno fundsdrawn against thefacility(2018:$Nil). flows from itsoperatingactivitiestomake timelypayments. Itdoes, however, facilityof$1mtocover any maintainan overdraft Liquidity RiskrepresentstheGroup’s abilitytomeetitsfinancialobligationsontime.Generally, theGroupgeneratessufficientcash Liquidity risk not material. The Grouphasnoborrowings andistherefore notexposedtointerestrateriskotherthaninrelationitsinvestments, whichare Interest raterisk There hasbeennochangeduringtheyeartoGroup’s exposuretocurrencyrisks orthemannerinwhichitmeasuresrisks. The Groupusesforeigncurrencyforward exchange contracts, withintheabove treasurypolicylimits, tomanagetheseexposures. anticipated exposureis(toamaximumof12months). manage theriskonagroup-widebasis. Underthe Treasury Policy thepurchasedcover isupto100%dependingonhow faroutthe For thosecurrencyexposureslesscertainintheirtimingandextent,suchasfuturesalespurchases, itistheGroup’s policyto Cash flowrisk estimated thata10%increaseintheNewZealand dollarwouldreduceprofitandequityby$141k(2018:$179k). It isestimatedthata10%decreaseintheNewZealand dollarwouldincreaseprofitandequityby$172k(2018:$219k).Itis of forward foreignexchange contracts. Currency riskinrespectoftheGroup’s transactionsismanagedinaccordancewiththeGroup’s treasurypolicyandincludestheuse ruling atbalancedate. transaction, oratratesapproximating them. Assets andliabilities areconverted toNewZealand dollarsattheratesofexchange Revenues andexpensesinforeigncurrencyaretranslatedtoNewZealand dollarsattheexchange ratesineffectatthetimeof Currency risk Market AgResearch hasnotchangeditsoverall strategyregardingthemanagementofriskfrom2018. risk credit ratingagencies. derivative financialinstrumentsislimitedbecausethecounterpartiesarebanks withhighcreditratingsassignedbyinternational AgResearch doesnothave any significant creditriskexposuretoany singlecounterparty. Thecreditriskonliquidfundsand maximum exposureto AgResearch ofany creditrisk. The carryingamountoffinancialassetsrecordedinthestatements, netofany allowances forlosses, representsthe delegation ofauthoritymanual. limits aregrantedinaccordancewiththeinternalcreditpolicyandauthorisedviaappropriatepersonnelasdefinedbyGroup’s credit qualityofthecustomer, takingintoaccounttheirfinancialposition,pastexperienceandotherrelevant factors. Individualrisk evaluation isperformedonthefinancialconditionoftradereceivables. Creditassessmentsareundertaken todeterminethe Trade receivables consistofalargenumbercustomers, spreadacrossdiversesectorsandgeographicalareas. On-goingcredit value ofeachfinancialassetintheStatementFinancial Position. The Grouphasnosignificantconcentrationsofcreditrisk. Themaximumexposuretocreditriskisrepresentedbythecarrying • • • Credit riskismanagedthroughthetreasurypolicy, which: and accountsreceivable. The financialinstrumentsthatpotentiallysubjecttheGrouptocreditriskarecash,short-termdeposits, forward rateagreements Credit risk The Grouphasatreasurypolicythatitappliestoactivelymanagetheserisks (referbelow). • • • The Grouphasexposuretothefollowing risks fromitsuseoffinancialinstruments: Financial policies whererelevant. financial instruments, receivables andtradecreditors. Theparticularrecognitionmethodsadoptedaredisclosedintheaccounting risk Financial instrumentscarriedintheStatementofPosition includecashandequivalents, investments, derivative instruments Financial 23 management
Sets parameterswithinwhichshort-terminvestments mustbemade. Restricts thecounterpartiesthatmaybeusedto A Graderegisteredbanks andtheNewZealand Government; and Places restrictionsonthelevelofinvestment withany onecounterparty; Liquidity risk Market risk Credit risk
107 Notes to financial statements 108 Notes to financial statements Listed equityinvestments * Non-listed equityinvestments * Derivative financialinstruments Other non current receivables receivables current non Other Trade and other receivables receivables other and Trade Cash andcashequivalents Financial assets 2018 Derivative financial instruments Trade and other payables payables other and Trade Financial liabilities Listed equityinvestments * Non-listed equityinvestments * Derivative financialinstruments Other non current receivables receivables current non Other Trade and other receivables receivables other and Trade Cash andcashequivalents Financial assets 2019 Foreign currencycontractsareshown atfairvalue. Derivative financialinstruments values ofunlistedassociates. Investments, except for“other investments” whicharevalued atfairvalue, arecarriedatcost.Itisnotpracticaltoestimatethefair Investments The carryingamountsoffinancialassetsandliabilitiesrecordedatcostinthestatementsapproximate theirfair value. Cash andcashequivalents,tradereceivables,otherreceivablespayables Fair value Finance leasesliability in thousandsofNewZealand dollars Fair valueoffinancialassetsandliabilities Derivative financialinstruments Trade andotherpayables 2018 Finance leasesliability Trade andotherpayables 2019 in thousandsofNewZealand dollars Maturity analysis-financialliabilities measures therisks. There hasbeennochangeduringtheyeartoGroup’s exposuretoliquidityrisks orthemannerinwhichitmanagesand • • • • Liquidity riskismanaged: instruments Financial 23 Derivative financialinstruments Through regularoversight bythe Audit &RiskCommittee. Through monthlyreviewbyseniormanagement;and Through compliancewiththetreasurypolicy, whichsetsaliquiditybufferforunforeseencashflows; By monitoringcashflow forecasts(bothoperationalandanticipatednon-recurringitems)aligninginvestment decisionswiththese;
(continued) Note 12 12 13 12 12 13 8 9 8 receivables 79,984 84,465 33,613 46,316 31,798 48,186 On demand 4,536 Loans and ------through profit ------Fair value Less than1year and loss 2,246 3,725 2,742 1,807 925 434 58 5 ------25,239 25,836 25,836 25,239 amortised cost liabilities at - - - - Financial Between 1year 25,239 25,239 and 5years ------Carrying amount 25,239 82,230 88,190 33,613 46,316 25,239 31,798 48,186 ------2,742 4,536 1,807 - - 925 434 58 5 - - Fair value 25,239 82,230 88,190 25,239 33,613 46,316 25,239 31,798 48,186 25,836 25,836 25,239 2,742 4,536 1,807 Total 925 434 58 5 ------
Westpac alsoprovides abusinesscardfacilitytothegrouptotalling $836kandapayrollletterofcreditfacilitytotalling$250k. been acceptedbytheinsurer. The quantumoftheclaimisstilltobedetermined. Currently thereisaclaimwiththeCompany’s insurerinrespectofdamageasaresulttheCanterbury earthquakes, whichhas Contingent assets There arenoknown significantcontingentliabilitiesorpendinglitigation. Litigation andothercontingentliabilities AgResearch hascommittedtoinvesting afurther$595k(US$400k)inZeakal viaPhytagro New Zealand. has currentcontractcommitmentsof$271k. LUAGRJF isnolongergoingahead;workhasbegunonanewLincoln AgResearch Precinct,whichisintheearlydesignphaseand JFSF constructioncommenced 28February 2018andisdueforcompletioninMarch2020,currentapproved budget$45.35m. Glasshouse dueforcompletionby18 August 2019,currentapproved budgetof$7.95m. Other commitments Total capitalcommitments in thousandsofNewZealand dollars commitments and Contingencies 24 Farmax Ltd AgResearch Ltd in thousandsofNewZealand dollars facilitiesinplacefrom WestpacGroup overdraft investments of$475k(2018:$939k)aspernote12. The levelclassificationdeterminedisbasedonthefair value withintheseinvestments. * Equityinvestments consistofFonterra shares$1,776k(2018:$2,717),BioPacific Ventures Fund $10k(2018:$10k)andother instruments Financial 23 There arenosignificanteventspostbalancedate. 26 Significant balance events dateafter There have beennomaterialchangesintheGroup’s managementofcapitalduringtheyear. The Group’s policiesinrespectofcapitalmanagementandallocationarereviewedregularlybytheBoard Directors. The Groupisnotsubjecttoany externallyimposedcapitalrequirements. research forthebenefitofNew Zealand. The Crown Research Institutes Act 1992requires AgResearch Limitedtomaintainitsfinancialviabilityinorderundertake • • • • The Group’s capitalisitsequity, whichismadeupof: management Capital 25 Lincoln University AgResearch JointFacility Funding commitmentstoresearchconsortiums Asset purchasescommittedtoandcontractedforatbalancedate Capital commitments Retained earnings. Available-for-sale assetrevaluation reserve;and Asset revaluation reserve; Share capital;
(continued) 1,000 200 15,495 13,070 2,425 2019 Interest Rate - 32,653 26,893 7.85% 5.85% 4,710 1,050 2018 109 Notes to financial statements 110 Auditor’s report Auditor’s report Auditor’s using the staff andresources of relating tothe financial statements We have audited the financial statements of Opinion Our auditwas completed position The Auditor INAN IA STATE ENTS T E READERS O TO REPORT AUDITOR’S INDEPENDENT 110 We We carried outour auditin accordance with the Auditor our for Basis The basis consolidated statementof cash flows for the year ended on that Board Standards and the policiesotherand explanatory information to the For thebu they could reasonably expected be to influence the decisionsreaders of taken on the basis ofthese financial statements. amountsd of or General’s Auditing Standards will always detecta material misstatement when it exists.Misstatements are differences or omis Reasonableassurance is misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Our objectives are to obtain reasonable assurance about whether the financial statements,as awhole,are free from material The Board ofDirectors is responsible onbehalfofthe haveWe fulfilled our responsibilities in accordance with the Auditor Responsibilities of the of Responsibilities believe We In our opinionIn Responsibilities of the of Responsibilities of responsibilitiesThe Directors’ Board alternative butto alternative concern and using the going concern basis of accounting, unless the Board of Directors to continue as a going co In preparing the financial statements, thatare free from material misstatement, whether due to fraud or error. comply with generally accepted accounting practice Newin Zealand The Board ofDirectors is responsible forsuch internal control itdetermines as necessary is to enable itto prepare
. Group
Our responsibilities under t
as atas comply with generally accepted accounting practice Newin Zealandin accordance with International Financial Reporting Standards. o o present fairly,present for dgetinformation reported the in financial statements,our procedures were limited tochecking thatthe information agreed
- th Generalis the auditor of ’s statementofcorporate intent
our opinion is explained below. In addition, we outline the responsibilities of the Board of Directors and our responsibiliti , atthe audit evidence we have obtained is sufficientand appropriate to provide basis a for our auditopinion. 30 June 20 June 30
opinion the the isclosures and can arise from fraud or error.Misstatements are considered material if,individually or in the aggregate,
do so. its financialits performance and cash fl financialits position as at financial statements the Group:of International Standards on Auditing (New Zealand)
in all all in
on BoardDirectors of a 19, the
a high level ofassurance, but itis nota guarantee that an auditcarried out accordancein with the Auditor uditor AGRESEAR I ITED ncern.The Board of Directors is also responsible for disclosing, as applicable,matters related to going
11 material respects:material
September Deloitte Limited,
OR T E EAR ENDED UNE UNE ENDED EAR T E OR
consolidated statementof comprehensive income, consolidated statementof changes in equity and , for the audit of the audit of financialfor the statements
we comment on other information, other on comment we hose standards
AgResearch t he Board ofDirectors responsibleis on behalf of the arise from the Crown
. 2019
30 June 201930 June .
for the financialstatements the Group
.This is the date atwhich our opinionis expressed. to carry out the audit of the financial statements of the the of statements financial of the audit the out carry to
Limited are further described in the Responsibilities ofthe auditor section ofour report.
ows for the year then ended; -General’s Auditing Standards,which incorporate the AND AND
Group on pages and ; and Group (the Group). Group). (the Group Research Institutes Act1992. GROUP’S
for preparing financial statements thatare fairly presented and 77 77 -General’s Auditing Standards.
and .
issued by the New Zealand Auditing and Assurance Stand to to the notes to the financial statements thatinclude accounting
we
109,
independence. our explain
that comprise the The Auditor The
and
ha s
- General has appointedme,
Group to cease operations,realisticorhas no
consolidated statementoffinancial
for assessing the the assessing for G roup
New Zealand equivalents to
on his Professional and Ethical
financial statements statements financial
behalf. behalf. Group Paul Bryden,
and ’s ability sions sions ards ards that that es
-
Our significant auditfindings, including any significantdeficiencies in internal control We communicate with the Board ofDirectors regarding,among othermatters, the planned scope and timing ofthe audit and to The Board ofDirectors is responsible for the other information.The other information comprises the information included on Information Other As pa As We 111 professional sceptic which incorporate the independence requirements of areWe independen Independence information,we are required to report that fact. have nothingWe to reportin this regard. ot whetherthe otherinformation materially is inconsistentwith the financial statements or ourknowledge obtained the in audit connectio In assurance conclusionthereon. Our opinion on the financial statements does notcover the other information and we donotexpress any form ofaudit opinion Christchurch On behalfof theAuditor Limited Deloitte for Partner BrydenPaul Other than the audit, we have no relationship with Practitioners Practitioners Auditor’s report Auditor’s
herwise appears to be materially misstated.If, based on our work,we conclude thatthere is a material misstatement of this 76,
did not evaluate the security controls and over the electronic publication ofthe financial statements.
responsibilities
rtofan audit in accordance with the Auditor but
We obtainWe sufficientappropriate audit and performance oftheand Groupre audit. We the Group to express an opinion on the consolidated financial statements. are responsibleWe for the direction, supervision ofour auditor’s report.However, future events or conditions may cause the disclosures are inadeq are required to draw attention in our auditor’s report to the related disclosures in the financial statements or,if such presentation. whether the financial statements represent the underlying transactions and events in a manner that achieves fair We evaluate the overall presen significant doub based on the auditevidence obtained, whethera material uncertainty exists related to events or conditions that may cast We conclude onthe appropriateness ofthe of use the going concern basis ofaccounting by the Board ofDirectors and, disclosures made by the the evaluate We in thein circumstances but notfor thepurpose ofexpressing an opinion on the effectiveness of obtainWe an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate internal control. resulting from error,as fraud may involve collusion,forgery, intentional omissions, misrepresentations,o provide basis a for our opinion.The of risk notdetecting material a misstatementresulting from fraud is higher than for on and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficie identifyWe and assess the risks ofmaterial misstatementof the financial statements,whether due tofraud or error,design
does notinclude the financial statements, and our auditor’s reportthereon. n with our auditof the financial statements, our responsibility is to read the other information.In doing so,we consider ,New Zealand by issued
arise ism throughoutthe audit.Also: t of the the t of
the the -General
t on thet on
from PublicAct Audit 2001 the appropriateness of accounting policies used and New Auditing Zealand and Assurance Standards
Group
uate,to modify ouropinion. Our conclusions are based onthe auditevidence obtained up to the date
Group
BoardDirectors of in accordance with ’s ability to continue as a going concern. If we conclude that a material uncertainty exists,we tation, structure and contentofthe financial statements,including the disclosures and
evidence regarding the financial statements of the entities or business activities within , -General’s Auditing Standards,we exercise professional judgementand maintain
or interests in main solely responsible for our auditopinion. .
Professional and Ethical Standard 1 (Revised): (Revised): Ethical 1 Standard Professional and the independence requirements of the Auditor .
,
the Group. the the reasonableness of accounting estimates and related
Board.
thatwe identify during our audit.
Group
to cease to continue as agoing concern.
-General
CodeEthicsfor of Assurance the the
Group ’s Auditing’s Standards nt andnt appropriate to ’s internalcontrol.
r the override of override r the pages other , or or , or or
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111 Auditor’s report 112 Directory Tohutohu Directory Performance Director Finance andBusiness Tony Hickmott Programmes Director Partnerships and Stuart Hall People andCultureDirector Lee Gardiner (Joined May2019) Marketing Director Communications and Jo Brady Environment Director Health, Safetyand Natasha Barnett (Joined May2019) Research Director Dr TrevorStuthridge Chief Executive Dr TomRichardson Leadership TeamExecutive (Until December2018) Marketing Director Communications and Monique Devereux (Until February 2019) Research Director Greg Murison (Joined January2019) Services Director Technology andDigital Greg Rossiter (Joined September2018) Infrastructure Director John O’Dea Kaiurungi Ahuwhenua Māori Chris Koroheke ANZ Limited Westpac BankingCorporation Bankers Auditor-General Deloitte onbehalfofthe Auditors Information (Until 30September2019) Director Dr Peter Stone (Appointed 1July2018) Director Rukumoana Schaafhausen Director Jackie Lloyd Director Colin Armer Chair – Audit andRisk Kim Wallace 2 September2019) (Appointed Chair Chair Dr Paul Reynolds QSO Board ofDirectors J008377_ADVERT_SNZ_Advert2019_FINAL_BW_outlines.indd 1 113 AgResearch 21/08/19 9:43 AM 114 AgResearch www.agresearch.co.nz 3809 3489 T +64 9053 Mosgiel 50034 Bag Private 9092 Mosgiel 176 Alley Puddle Centre Invermay Agricultural 6351T +64 8600 Hopkirk 6356 8019T +64 Grasslands 4442 North Palmerston 11008 Bag Private 4410 North Palmerston Tennent Drive Institute Research and Hopkirk Centre Research Grasslands 2836 7856 T +64 3240 Hamilton 3123 Bag Private Hamilton 3214 10 Road Bisley Centre Research Ruakura 3321T +64 8800 8140 Christchurch 4749 Bag Private 7674Lincoln 1365 Road Springs Lincoln Centre Research and Office Corporate 224 NZBN: 038 966 9429 Limited AgResearch