AWTA Ltd ANNUAL REVIEW 2011 - 2012
ANNUAL REVIEW 2011-2012
HISTORY & OBJECTIVES MISSION, VISION & VALUES COMPANY PROFILE CORPORATE GOVERNANCE HUMAN RESOURCES CHAIRMAN'S STATEMENT MANAGING DIRECTOR'S INTRODUCTION FINANCIAL SUMMARY AWTA RAW WOOL AWTA PRODUCT TESTING JINAO TESTING COMPANY AGRIFOOD TECHNOLOGY NZWTA LTD RESEARCH & DEVELOPMENT INFORMATION SERVICES DIRECTORS' REPORT FINANCIAL STATEMENTS NOTES TO FINANCIAL STATEMENTS DIRECTORS' DECLARATION INDEPENDENT AUDIT REPORT
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AWTA Ltd Annual Review 2011-2012 | CONTENTS
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HISTORY & OBJECTIVES
The Australian Wool Testing Authority was established in 1957 by the Commonwealth Government in response to requests from the Australian wool industry, and was created as a Statutory Authority reporting to the Minister for Primary Industry. The first meeting of the Authority was held on 12th December 1957. Following the formation of the Australian Wool Board in 1962, AWTA was established as a separate division within that organisation on 1st July 1963. AWTA retained the same status within the Australian Wool Corporation when it was formed by the amalgamation of the Australian Wool Board and the Australian Wool Commission on 1st January 1973. AWTA Ltd was established as a Company Limited by Guarantee on 14th May 1982 consequent to an Australian Government decision to transfer the functions of the statutory Australian Wool Testing Authority (AWTA) to the public sector. After almost 25 years of operations, the government and industry considered that there was no on-going requirement for AWTA to continue to have links with the government, particularly since it was controlled by the wool industry and funded by the commercial services it provided to the industry, not by the Government or any levies. In April 1982, the same wool industry interests that comprised AWTA as a statutory body formed a public company limited by guarantee, to acquire all assets and liabilities of the statutory body. AWTA Ltd commenced operations on 1st July 1982, when it took over all the previous functions of AWTA. The objectives for which the Company was established were and are still enshrined in its Memorandum. They include the following: 1. 2. 3. 4. 5. 6. 7. 8. 9. To promote sales of Australian wool by encouraging the growth and utilisation of objective measurement of wool, particularly by presale testing. To test wool and other fibres, whether natural or otherwise, and wool products and similar products made wholly or partly from other fibres. To provide an accurate and impartial testing service based upon internationally recognised testing standards as an aid to efficient wool marketing. To conduct wool, fibre and textile research and/or to carry out tests on other materials and products where such activities assist or promote the development of the pastoral, agricultural, manufacturing or industrial resources of Australia. To maximise the net income of the Australian wool industry by encouraging the optimum application of objective measurement of wool by wool growers, brokers, buyers and both local and overseas processors. To optimise wool industry productivity through research and the implementation of new systems and technology. To establish, equip and maintain laboratories, workshops and other places suitable for testing and research activities. To provide and encourage the provision of data processing services aimed at the more efficient marketing of wool. Generally to promote and foster the more efficient testing of wool as required by the wool and textile industry at a minimum cost.
10. To provide certificates and make reports in respect of test and research carried out by the Authority.
MISSION, VISION & VALUES
MISSION
To assist or promote the development of the pastoral, agricultural, manufacturing and industrial resources of Australia, in particular, by providing independent objective data and information services which will facilitate the efficient production, marketing and processing of wool, other fibres, textile products and related materials.
VISION
To maintain a national and international reputation for technical expertise, commercial independence and professional integrity by providing accurate, impartial and efficient sampling, testing and certification services to our customers.
VALUES
· · · · · · · · · To maintain technical excellence, by taking maximum advantage of emerging technologies and providing staff with the knowledge, skills and equipment to improve customer service and lower costs. To ensure commercial independence in all activities. To insist on professional integrity within the Company, by remaining impartial and avoiding conflicts of interest. To be alert and responsive, by monitoring and understanding the changing needs of clients. To ensure that a reliable business continuity plan is in place, to minimise disruption to the wool marketing process in the event of a disaster. To foster sound industrial relations, based on mutual respect and recognition of the common interests which are shared with all employees and managerial staff. To aspire to provide a safe and satisfying working environment, which encourages employee participation and is supported by appropriate training and development programs. To seek to meet all legal and moral obligations of a good corporate citizen. To adopt business strategies which transfer cost saving benefits arising from the Company's income tax exemption, so as to assist or promote the development of the relevant industrial resources of Australia.
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AWTA Ltd Annual Review 2011-2012 | HISTORY & OBJECTIVES
COMPANY PROFILE
MEMBERSHIP & BOARD COMPOSITION
AWTA Ltd is a Company Limited by Guarantee. As described in the Company's Articles of Association, each Member Guarantor is entitled to appoint a Director to the Board. Additionally, the Member Guarantors appoint two Independent Directors and may also appoint a Director having special scientific or technological qualifications. The Chief Executive is also a Director pursuant to Article 21(d). The following organisations or their nominees are the Member Guarantors constituting the Company: · Australian Council of Wool Exporters Inc (ACWE Inc) · Australian Wool Processors Council Inc (AWPC Inc) Wool Scourers & Carbonisers of Australia Group (WSCA Group) Wool Textile Manufacturers of Australia Group (WTMA Group) · · · · Australian Wool Innovation Ltd (AWI Ltd) Private Treaty Wool Merchants of Australia Inc (PTWMA Inc) The National Council of Wool Selling Brokers of Australia Inc (NCWSBA Inc) WoolProducers Australia
MANAGEMENT
The Board delegates responsibility for the operation and administration of the Company to the Managing Director who, together with the executive team, is accountable to the Board. AWTA Ltd is organised for management and reporting purposes into four operating divisions. Management responsible for those divisions must account for their performance within a framework of strategic plans, budgets, position descriptions, targets, standards and policies. The Strategy Committee, comprising senior management from Head Office and the four divisions, co-ordinates the management activity. Strategy Committee Members are: · · · · · · · · · · · Managing Director General Manager - Raw Wool Chief Financial Officer National Information Services Manager Divisional Manager - Product Testing General Counsel Chief Executive Officer - NZWTA Ltd Divisional Manager - Agrifood Technology Regional Manager - Western Australia Sampling Manager - Eastern Australia; and Business Development Manager.
Note: Australian Wool Processors Council Inc, being an amalgamation of two previously separate Member Guarantors, is entitled to appoint two Directors, one from each Group.
ORGANISATION & REPORTING STRUCTURE
DIRECTORS
Directors holding office at the date of this Report are: Chairman D.G. McGauchie AO Deputy Chairman G.W. Dickinson M.A. Jackson M.D. Avery G.M. Power P.D. Morgan D.B. Ritchie G.W. Turner D.A. Webster C.J. Wilcox (elected Independent Director) (AWTA Ltd Managing Director) (appointed by ACWE Inc) (nominee of WoolProducers Australia) (appointed by AWPC Inc from WTMA Group) (appointed by AWPC Inc from WSCA Group) (appointed by PTWMA Inc) (appointed by AWI Ltd) (appointed by NCWSBA Inc) (elected Independent Director)
Profiles on each of the Directors are provided in the Directors' Report (page 15).
COMPANY SECRETARY
The Company Secretary is Mr Charles Englander (General Counsel).
BOARD RESPONSIBILITIES
The Board is responsible for the overall corporate governance of the Company, including its strategic direction and financial objectives. It sets goals for management and monitors their attainment. The Board has specifically assumed responsibility for: · · · · · · · · · the approval of strategy and annual budgets; the provision of strategic direction and oversight of management; corporate governance; the selection and evaluation for succession planning of executive management; significant acquisitions and disposals of assets; significant expenditure decisions outside of the corporate budget; the remuneration of executive management; the approval of and monitoring of financial performance against corporate objectives and policies; and the integrity of risk management strategies and controls.
The delivery of the Company's strategic direction and goals as determined by the Board is delegated to management under the leadership of the Managing Director.
AWTA Ltd Annual Review 2011-2012 | COMPANY PROFILE
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REMUNERATION & APPOINTMENTS COMMITTEE
Current members of the Remuneration & Appointments Committee are: · · · Mr D.G. McGauchie AO (Committee Chairman) Mr G.W. Dickinson Mr D.A. Webster
ENVIRONMENT & SAFETY COMMITTEE
The Company has a policy to conduct its business activities so as, wherever practicable, to minimise any adverse impact of such activities on the community and the environment and to comply with applicable legislative requirements. The Environment & Safety Committee ensures that the Company's environment and occupational health and safety obligations are implemented and maintained. The Committee's key responsibilities are to: · · · · · · ensure that environmental management system requirements, including policies in relation to the Company's obligations with respect to environmental and health and safety issues are established, implemented and maintained; ensure compliance with all laws, regulations and regulatory obligations relating to environmental and safety matters by the Company; oversee the effective monitoring of the Company's operations in relation to environmental and occupational health and safety matters; keep the Board informed of the Company's activities in relation to its environmental and occupational health and safety obligations; ensure that the Company's environmental policy, objectives and targets are based on knowledge about the environmental impacts associated with its activities, products and services and any regulatory requirements; and review the environmental management system to ensure its continuing suitability.
The Managing Director attends the Committee meeting except when his own remuneration and employment conditions are being considered. The Committee is charged with: · · · setting policies and making recommendations on remuneration policies for the Company, including those governing the Directors, the Managing Director and senior management; reviewing candidates for vacant senior executive management positions and making specific appointment recommendations to the Board; and approving the recommendations of the Managing Director on the remuneration of all non-award personnel below senior officers.
Directors attendance at Committee meetings is reported in the Directors' Report. Non-executive Directors The Company's Memorandum of Association provides that, whilst its income cannot be transferred by way of dividend or bonus, it can be used for payment in good faith to any officer or servant of the Company (including Directors) for any services actually rendered to the Company. Non-executive Directors' fees are reviewed annually by the Member Guarantors having regard to performance, relevant comparative remuneration and independent advice. Non-executive Directors may receive a Sitting Fee for Committee participation and reimbursement of travel and accommodation expenses for attendance at Board and other official Company meetings. Executive Director & Senior Executives The Board determines the remuneration for the Chief Executive Officer (Managing Director), the Chief Financial Officer and the General Manager - Raw Wool, upon the recommendation of its Remuneration & Appointments Committee. Remuneration is decided following an annual review that considers performance, relevant comparative remuneration and independent advice. The Committee comprises Non-executive Directors only when it deals with the remuneration and employment conditions of the Managing Director.
Current members of this Committee are Mr G. W. Turner (Committee Chairman), Mr C.J. Wilcox, Mr M. A. Jackson and Mr C. Englander. Attendance at Committee meetings is reported in the Directors' Report.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE CHARTER
Whilst AWTA Ltd is not a listed company, where applicable to its structure, it follows the ASX's Corporate Governance Principles and Recommendations. The Board is responsible for the overall corporate governance of the Company, including its strategic direction, major policies and financial objectives. The Board has adopted a Charter that delineates its role and the role of individual Directors. The Corporate Governance Charter and Guide for Directors and Officers is publicly available on the Company's website.
AUDIT & FINANCE COMMITTEE
The role of the Audit & Finance Committee is to assist the Board to fulfil its corporate governance and oversight responsibilities. The principle objectives of this Committee are to: · · · · · · · · assist the Board in the discharge of its responsibilities relating to all financial matters; assess and advise the Company's Board on whether the annual financial report represents a true and fair view of the Company's financial position and complies with regulatory requirements; substantiate the existence, quality and valuation of the Company's assets; determine that management has implemented policies and procedures designed to ensure that the Company's risks are identified, assessed and appropriately addressed in a Risk Management Plan; ensure the operation of effective internal control policies and procedures; oversee the independence and appraise the quality of internal and external audits; maintain lines of communication between the Board, management and internal and external audit; and examine the accounting policies of the Company to determine appropriateness to general accepted practices.
CORPORATE CONDUCT & ETHICS
The Company recognises that it is vital to its continuing success that its staff maintain the highest possible reputation for technical expertise, commercial efficiency, impartiality, independence, equal opportunity and professional integrity. To ensure that they are aware of the ethical framework in which they are required to work, each staff employee is required to read and sign the Company's Corporate Conduct & Ethics Policy. This policy sets broad guidelines for conduct and reflects AWTA Ltd's corporate "conscience" by promoting the highest levels of behaviour.
APPOINTMENT OF AUDITORS
The Company's auditors are Pitcher Partners. The auditors' effectiveness, performance and independence is reviewed by the Audit & Finance Committee. The audit is conducted in accordance with the Corporations Act 2001 and the Australian Auditing Standards which require auditors to comply with relevant ethical requirements related to audit engagements and to plan and perform the audit so as to obtain reasonable assurance that the financial report is free from material misstatement. The auditors are obligated to comply with the independence requirements of the Corporations Act 2001. The auditors are required to form an opinion whether the financial report of Australian Wool Testing Authority Ltd and its controlling entity comply with the requirements of the Corporations Act 2001, the Regulations and the Australian Accounting Standards.
The Committee comprises one Independent Director and up to two other non-executive Directors. The Chairman, the Managing Director, the Chief Financial Officer and the external auditor attend meetings by invitation. The current members of the Committee are Mr G.W. Dickinson (Committee Chairman) and Mr D.B. Richie and Mr M.D. Avery. Attendance at Committee meetings is reported in the Directors' Report.
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AWTA Ltd Annual Review 2011-2012 | CORPORATE GOVERNANCE
RISK IDENTIFICATION AND MANAGEMENT
The Company continues to have in place a number of risk management controls including: · · · guidelines and limits for approval of capital expenditure and investments; an annual insurance review; defined senior management responsibilities for areas including equal opportunity, occupational health and safety, environmental compliance, legal liability, risk identification and reporting and financial controls; policies and procedures for the management of financial risk and investment operations, including exposure to foreign currencies and movements in interest rates; strategic planning process for the implementation of 3-year strategic plans; annual budgeting and monthly reporting systems enabling the monitoring of progress against performance targets and the evaluation of trends; Director's Declarations of Interests; and disaster recovery procedures for the key business units of the Company.
HUMAN RESOURCES
STAFF NUMBERS
AWTA Ltd's staff numbers vary in response to seasonal work-flow. Variations in work-flow are managed in part by the use of casual and to a lesser extent, part-time staff. AWTA Ltd's staff numbers peaked at 412 in November 2011.
Staff Training
As part of the Company's due diligence program, the Legal Department, supported by regional and divisional management regularly conduct training in anti-discrimination, bullying, sexual harassment, restrictive trade practices, equal opportunity, occupational health and safety, internet and email use, and affirmative action.
·
· ·
OCCUPATIONAL HEALTH & SAFETY
The Company's occupational health and safety obligation's are monitored by Executive Management, with day-to-day responsibility resting with regional management. Safety performance data consisting of lost time accidents, frequency rate and duration rate are calculated to AS/NZS 4801-2001 and reported monthly. The data is reviewed by management, the Environment & Safety Committee and the Board. During 2011/12, the Company experienced 9 lost time accidents (the same number as in the previous year), a lost time frequency rate of 17.8 (being the same rate as in previous year) and a lost time duration rate of 378.2 (up from 164.1 the previous year). Achieving a zero Lost Time Injury result is a goal of all responsible employers. Such a result can only be achieved by careful attention to systems of work, Risk Assessments, work organisation and a shared commitment by staff to safety and injury prevention. AWTA Ltd continues to work with staff to increase on-the-job awareness of safety and to maintain a culture of shared commitment to safety.
· ·
COMPANY POLICIES
In addition to the Company Policies previously referred to, the Company has and maintains a comprehensive range of policies and procedures including: · · · · · · · · · · · · · · Accounting; Payroll; Debtors; Assets; Purchasing; Occupational Health & Safety; Environmental Compliance; Restrictive Trade Practices & Consumer Law Compliance; Staff Recruitment, Training and Termination; Privacy; Anti-Harassment, Bullying and Discrimination; Records & Statistics; Equal Opportunity; and Improper Conduct Policy.
SERVICE AWARDS
It is noteworthy that a significant number of staff have been employed by AWTA Ltd for more than 20 years. Since the formation of the Statutory AWTA in 1957 to the completion of the year under review, 195 employees have reached 20 years service, 53 have achieved 30 years service and 5 have reached 40 years service. During 2011/12 the 30 year service roll increased by 3 and the 20 year service roll increased by 6.
Service Awards
30 Years Michael Larkin John Ball Rob Hallion
The Company's policies are regularly monitored and reviewed and aim to meet or exceed best practice with comparable organisations.
ENVIRONMENTAL IMPACTS
The group's operations are subject to particular and significant regulations under relevant legislation. Details of performance in relation to such regulations are set out below. (a) AWTA Ltd's Kensington, Victoria site is obligated to ensure that its waste water generated by the wool testing operations complies with the requirements of City West Water Ltd's Trade Waste Agreement. During the reporting period, trade waste was recorded as exceeding the Agreement's limits on three occasions involving daily flow, copper limit and total dissolved solids (the latter subsequently determined to be due to sampling irregularities, rather than Agreement exceedence). (b) The AWTA Ltd's Bibra Lake, Western Australian site discharges laboratory waste to sewer pursuant to an Industrial Waste Permit issued by the Water Corporation. During the reporting period all waste discharged to sewer complied with the Permit's stipulated limits. (c) AWTA Ltd's Agrifood Technology division located at Werribee, Victoria is required to ensure that its waste water generated through its testing activities complies with the requirements of City West Water's Trade Waste Agreement. During the reporting period, all laboratory effluent discharged to sewer complied with the stipulated limits of the Agreement. (d) AWTA Ltd's New Zealand site discharges laboratory waste to sewer pursuant to the Napier City Trade Waste By-law 2008. During the reporting period, laboratory waste discharged to sewer complied with the By-law's stipulated limits, with the exception of 2 instances occurring in February and April, 2012, when pH limits were exceeded.
(51st) (52nd) (53rd)
Laboratory Controller (Melbourne), commenced 10 August 1981 Maintenance Officer (Melbourne), commenced 31 August 1981 Sampling Manager (Fremantle), commenced 8 March 1982
20 Years Karen Ford Silvia Patterson Gaye Lehtinen Doreen Fernandez (190th) (191st) (192nd) (193rd) Testing Officer (Fremantle), commenced 19 August 1991 Testing Officer (Fremantle), commenced 19 August 1991 Testing Officer (Fremantle), commenced 19 August 1991 Divisional Manager - Agrifood Technology, commenced 16 September 1991 (formerly with AWB) Senior Analyst Quality Feed Laboratory, commenced 2 June 1986 (formerly with AWB) Analyst Food Safety Laboratory, commenced 27 July 1987 (formerly with AWB)
Nipa Small
(194th)
Karen Jackson
(195th)
AWTA Ltd Annual Review 2011-2012 | HUMAN RESOURCES
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CHAIRMAN'S STATEMENT
AWTA Ltd has recorded a net loss of $1.230 million for 2011/12, after taking up an impairment charge of $1.347 million to reflect the lower market value of its investment portfolio. The result excluding the impairment was a modest profit of $0.117 million. When AWTA Ltd was privatised in 1982, it was structured as a Company Limited by Guarantee with the objective of providing services to its clients at minimum cost, rather than maximising profit for distribution to shareholders. There is no doubt that over many years the Company has been successful in this regard, the fee for AWTA Ltd's primary service (presale raw wool testing) is lower in dollars per test. However, in the last decade, wool production in Australia has declined by almost half and AWTA Ltd's principal market has been shrinking. AWTA Ltd responded by focussing on innovation and cost control in its raw wool testing laboratories and by reducing corporate overheads. At the same time, the Board recognised that it was essential for the Company to broaden its revenue base beyond raw wool and textile testing into other services to agriculture so that fees continue to be contained as the volume of wool produced in Australia declines. Hence, approximately 7 years ago, AWTA Ltd adopted a strategy to expand into related testing markets where independent, high quality, high integrity testing is a necessary part of the value chain.
MR D.G. McGAUCHIE AO CHAIRMAN - AWTA Ltd
While this approach has been successful, with a modest profit (pre-impairment), the year under review did see financial performance deteriorate from the previous year. The principle reasons for this were: · · the amount of wool presented for testing decreased on the previous year. Higher wool prices in 2010/11 had encouraged growers to release wool held on farm to the market and this did not reoccur; and investment income decreased by approximately $0.8 million on the previous year compounding the impairment charge mentioned above.
AWTA Ltd, as a consolidated group, comprises 3 operating divisions in Australia (AWTA Raw Wool, AWTA Product Testing and Agrifood Technology), its wholly owned subsidiary NZWTA Ltd and its joint venture, JinAo Testing Co Ltd, which is managed through AWTA Product Testing. I am pleased to report that total operating revenue earned outside AWTA Raw Wool continues to grow and reached $11.571 million in 2011/12. It is noteworthy that this now represents over 32% of AWTA Ltd operating revenue. In comparison, a decade ago revenue from non-raw wool sources was less than $2 million and only 5% of operating income. Directors are also very pleased to note that AWTA Product Testing, Agrifood Technology and NZWTA are all producing an acceptable return on the capital that AWTA Ltd has invested in them. Total AWTA Raw Wool revenue decreased by 1.9% as the number of bales sampled fell by 2.9%. The AWI Wool Production Forecasting Committee has reported that the same amount of wool was grown in 2011/12 as the previous year. Hence, it is highly probable that the decrease in AWTA testing activity relates to wool shorn in previous seasons being released from on-farm storage in 2010/11 in response to high market prices at that time. It is positive to observe signs that wool production may have bottomed out after a long and steady period of decline. The AWI Wool Production forecasting Committee is also optimistic that wool production is turning the corner, predicting an increase of 1% for 2012/13. Improved productivity and other cost saving initiatives partially offset wages inflation resulting in operating expenditure for the Raw Wool Division being only 1.2% higher than last year. '000 Tonnes
700
Volume of Australian Wool Tested
600
500
400
300
200
100
AWTA Product Testing division continues to 0 evolve and react to changes in the demand for 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 local testing of various materials and products. Revenue increased by 9.3% and the mix of test types changed considerably, with increased testing activity in the building materials and automotive sectors more than offsetting textile testing which continues to fall reflecting the depressed retail conditions in Australia. JinAo Testing Co Ltd grew its revenue base steadily and significantly during 2011/12, to the point where it was profitable. The majority of JinAo testing was conducted for Australian customers importing Chinese products with a growing base of local processors of Australian wool looking to JinAo to provide specialist services. The operating performance of NZWTA has improved considerably in recent years. NZWTA operating revenue increased due to the maintenance of a high market share in wool testing and a full year of operation by the textile testing laboratory, purchased from AgResearch in December 2010 and incorporated into the Napier laboratory. NZWTA Ltd has again achieved a satisfactory financial result. AWTA Ltd purchased Agrifood Technology from AWB in February 2008 and 2011/12 is the fourth full year that it has operated under AWTA Ltd ownership. Agrifood Technology has now successfully established its independence within the deregulated wheat industry, securing a broad range of wheat industry clients. It has also significantly increased its activity in the processed and fresh food and the hay and fodder sectors, which now generate a significant proportion of Agrifood Technology's revenue, providing some insulation against the seasonal impacts inherent in the grain industry. During 2011/12, total operating income at Agrifood Technology increased by 2.7%. Global financial markets remained depressed during 2011/12, impacting on AWTA's non-operating revenue, through reduced investment income and precipitating the impairment I previously referred to. AWTA invests its funds in various asset classes in accordance with a balanced investment policy which is regularly reviewed by the Board. The strength of the Company's balance sheet allows it to take a long-term approach to investment and Directors accept that there is a risk of volatility and periods of short-term negative results under this policy. Mr Don Hamblin stepped down from the Board of AWTA Ltd at the end of November 2011, after 4 years service, to make way for the appointment of Mr Geoff Power. I would like to thank Don for his valued contributions as a Director and welcome Geoff to the Board.
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AWTA Ltd Annual Review 2011-2012 | CHAIRMAN'S STATEMENT
I would also like to thank Mr John Lewis who retired from AWTA Ltd in June. For the previous 7 years, John led the AWTA Product Testing Division with dedication and foresight that enabled it to not only survive, but thrive in a period where the industry environment was very difficult. Prior to joining the management of AWTA Ltd, John served as a non-executive director of the Company. I welcome Mr Craig Wales, the new Divisional Manager for AWTA Product Testing, to the executive team. I would also like to pay tribute to all the staff that have achieved 20 and 30 year service anniversaries during the past year and acknowledge their contribution to the Company. AWTA Ltd has a proud tradition of long service, a rare feat in most Australian companies. Finally I wish to express my personal thanks to the Chief Executive, Michael Jackson, all Directors and the Company's employees for their support, contribution and dedicated service during 2011/12.
D.G. McGAUCHIE AO
MANAGING DIRECTOR'S INTRODUCTION
The AWTA Ltd Group reported an overall loss of $1.230 million for 2011/12, which is made up of a profit before impairment of $0.117 million and a $1.347 million impairment of financial assets. This result is not as strong as 2010/11 due primarily to reduced contribution from AWTA Raw Wool and lower investment returns. It is pleasing to report that the operating performance of AWTA Product Testing, Agrifood Technology and NZWTA remains strong and each division has made a positive contribution during 2011/12. In his report, the Chairman comments on the need for AWTA Ltd to have a broad revenue base and there is no doubt that financial success in these operating divisions is instrumental in minimising raw wool fees. The Company remains financial stable and is well placed to continue to provide services that add value to the wool, textile, agricultural and manufacturing industries. Following is a summary of the financial performance during 2011/12 and a brief report on each operating division with in the AWTA Ltd Group. MR M.A. JACKSON MANAGING DIRECTOR
FINANCIAL SUMMARY
COMPARATIVE Profit & Loss Statement
2012 $'000s Revenue Revenue from services Revenue from investments Profit on sale of surplus sample material Consulting income Rental income Other income Total revenue Expenses Operating and administrative expenses Unrealised impairment of financial assets Realised losses on sale of investments Total expenses Net Profit/(Loss) 34,600 2,230 1,055 135 300 97 38,417
2011 $'000s 33,899 3,294 1,010 241 226 670 39,340
(37,531) (1,347) (769) (39,647) (1,230)
(36,763) (549) (907) (38,219) 1,121
AWTA Ltd Annual Review 2011-2012 | MANAGING DIRECTOR'S INTRODUCTION
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AWTA RAW WOOL
OVERVIEW
AWTA Raw Wool is the largest division within AWTA Ltd and is comprised of: · · · · Sampling Operations, Raw Wool Laboratories, Data Processing Operations; and Technical & Quality Control.
During 2011/12 AWTA Raw Wool operated two laboratories located in Melbourne (servicing clients in Victoria, New South Wales, Queensland, South Australia and Tasmania) and Perth (servicing clients in Western Australia).
CAPABILITIES
Each laboratory provides certified testing of Yield & Micron, Staple Length & Strength and Colour for raw wool. Certified testing of scoured wool is also conducted for a range of attributes including regain and grease content. In addition, AWTA Raw Wool offers non-certified report testing of raw wool, scoured & carbonised wool and speciality fibres such as Mohair, Alpaca and Cashmere. The number of bales core sampled for certified tests decreased by 2.9% during 2011/12 with 2.05 million bales sampled compared with 2.11 million bales during the previous season. Production increased in South Australia and Tasmania but declined in all other states, with Western Australia experiencing an 11% decline due to ongoing dry conditions. The number of sale lots tested for Yield & Micron results decreased by 1.9% to 369,106 lots during 2011/12 when compared with the previous season. The number of sale lots tested for Staple Length & Strength declined by 1.9 % to 231,960 lots over the same period. AWTA Raw Wool maintains a strong focus on the three key measures of performance: · · · Service AWTA Raw Wool is committed to providing timely testing service as required by its customers. Samples are taken at 32 locations throughout Australia and dispatched overnight to one of the AWTA Raw Wool laboratories. AWTA Ltd offers three levels of priority for service: Normal: Test Certificates are available within 5 days of a sample being taken. Fast 15% Normal 67% service delivery; improved efficiency/productivity; and sound technical performance.
Fast: 95% of test Certificates are available within 3 days, and the remainder the following day. Express: 95% of test Certificates are available the following morning, with the remainder the following day. Express 18%
Lots Sampled 2011/12 Qld NSW Vic Tas SA WA 0 30,000 60,000 Lots 90,000 120,000 150,000 Qld NSW Vic Tas SA WA
Bales Sampled 2011/12
0
200,000
400,000 Bales
600,000
800,000
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AWTA Ltd Annual Review 2011-2012 | AWTA RAW WOOL
Test Type Yield & Micron
Service Measure Average (days) % Total Tests within Service Target
Normal 3.0 99.2 3.7 96.5
Fast 1.9 97.8 2.2 96.6
Express 1.5 97.0 1.6 96.6
Length & Strength
Average (days) % Total Tests within Service Target
During the 2011/12 season service performance was, on average, well within the service time requirements. These times are all measured from the time of sampling, not when samples are received at a laboratory.
Efficiency The efficiency of AWTA Raw Wool departments is monitored by measuring departmental productivity. Any increase in productivity reduces overall labour costs. Labour forms the majority of the cost of testing wool. Sampling Productivity declined during 2011/12 due to the fragmentation of operations at wool coring locations. Testing Productivity, which reflects the efficiency of all laboratory operations, increased by 0.7% during 2011/12. This increase was largely due to improved work practices and workplace management. Technical Confidence in wool trading requires confidence in the accuracy and precision of the wool test results. AWTA Ltd Raw Wool laboratories have rigorous quality control procedures, calibration schedules and test monitoring processes in place to ensure a high level of accuracy and precision. Trial samples are exchanged between AWTA Raw Wool laboratories to ensure consistency. Blind trials are also conducted twice weekly with overseas laboratories with the results publicly reported at the annual International Wool Textile Organisation (IWTO) Conference. During 2011/12, all AWTA Laboratories reported ongoing stable and accurate performance to the IWTO Conference. External queries from clients also serve as an indicator of technical performance. During 2011/12, some 1,260 results (0.21% of all tests) were queried by customers. Of these, 327 were reissued, representing less than 0.06% of the 601,066 Yield & Micron and Staple Length & Strength tests conducted.
CHALLENGES
The major challenge for Raw Wool operations is maintaining high levels of service and efficiency in an environment where revenue growth has declined in recent years and costs continue to escalate.
INDUSTRY SUPPORT
The Company focuses its industry activities, both domestically and internationally, on promoting the use and understanding of objective measurement. This is to ensure Australian wool maintains its pre-eminent position in the world wool textile market. AWTA Ltd continues to participate in International Wool Textile Organisation (IWTO) meetings where key staff contribute to the development and understanding of wool testing standards and procedures. AWTA Ltd collates and publishes an extensive range of statistics and analytical reports which are provided free of charge to the wool industry. An example of this is the Key Test Data report - a monthly summary of the volume of wool tested and average results tested broken down by State and wool category. Other examples include a number of detailed micron split and Wool Statistical Area reports, which are crucial for the Australian Wool Production Forecasting Committee. This data, along with a range of other statistical reports, is available for download from the AWTA Ltd website. AWTA Ltd continues to provide the TOPMARK benchmarking service for wool processors free of charge. This service allows wool processors to compare their processing performance against the average of all other mills participating in the program. The objective of this program is to improve the efficiency of wool processors. The Company continues to support the Australian wool industry by sponsoring and providing testing assistance for major sheep shows, ram sales and research trials. Details of supported events are listed on the AWTA Ltd website to assist with the promotion of sponsored events. AWTA Ltd also hosts meetings with industry bodies and associations and is an active member of the Federation of Australian Wool Organisations (FAWO).
Changes in Lots Sampled (2011/12 cf 2010/11) Qld NSW Vic Tas SA WA Australia -10% -5% 0% Lots 5% 10% -10%
Changes in Bales Sampled (2011/12 cf 2010/11) Qld NSW Vic Tas SA WA Australia -5% 0% Bales 5% 10%
AWTA Ltd Annual Review 2011-2012 | AWTA RAW WOOL
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AWTA PRODUCT TESTING
Overview
The Product Testing division is an independent materials testing facility available to government instrumentalities, industry and the general public. It possesses a diverse array of specialised testing equipment operated by highly-competent technicians.
Capabilities
The division has internationally recognised competencies in flammability, textiles, automotive, weathering, physical, chemical and mechanical testing. Materials evaluation can be conducted against a broad range of industry-specific, Australian and international standards. NATA Accreditation encompasses the five prime areas of retroreflection, flammability, chemical, thermal and mechanical testing which, when combined, covers 34 secondary areas of testing competence.
Looking Forward
The division will become considerably more customer-focussed with improved communication systems and strive for reduced lead-times. The competency-base will be enhanced by cross-training and appropriate use of available personnel resources, which when coupled with the introduction of specialised equipment will improve all areas of our business. The division will continue to investigate diversification opportunities and expansion into niche areas with the express intention of increasing its revenue contribution. The division will actively promote itself by advertising in carefully selected mediums.
JINAO TESTING COMPANY
Overview
JinAo is a joint venture laboratory located in Nanjing, China and is a 50/50 venture between AWTA and JSIC Jiangsu, a division of China Inspection and Quarantine (CIQ).
Capabilities
JinAo mainly focuses on textile and environmental testing of products predominantly of Chinese origin. Whilst it has a relatively small laboratory, it has a diverse and growing client base particularly in the Australian importing community as testing can be done at source with the security of the AWTA name behind it. JinAo also provides services to assist Chinese early stage processors to effeciently process Australian wool.
Testing Company
Looking Forward
JinAo's challenge is to grow its revenue base and develop a solid and ongoing domestic client base. It will over time need to branch out into additional areas of testing and grow its expertise and diversity.
AGRIFOOD TECHNOLOGY
Overview
Agrifood Technology has continued to be one of Australia's major provider of physical and chemical testing to the grain, horticultural, food and feed industries.
Capabilities
Agrifood Technology is an independent, NATA ISO 17025 accredited and ISO 9001 certified testing facility that operates in a competitive environment, it is focussed on providing accurate results and rapid response times to meet the needs of our customers. Agrifood Technology in Victoria and Western Australia are well equipped to conduct comprehensive analysis on a diverse range of food and feed products including grain quality, milling, dough rheology, end-product assessment, nutritional labelling, allergen testing, pesticide residues, mycotoxins and microbiological analysis. The laboratories are well supported by a team of 24 technical staff and 6 administrative staff who are highly experienced and committed to the accurate and timely provision of results. A significant improvement has been made in operational efficiency through automatic data capture into LIMS from laboratory instrumentation. Further investment in technology in the Food Safety laboratory has resulted in an increase in residue testing on fresh produce for two major supermarket chains which is a significant accomplishment in a very competitive environment. Revenue from the Feedtest service acquired from the Victorian Department of Primary Industries has remained constant over the last twelve months. A working group has been formed to further enhance the calibration and offer more parameters to meet industry requirements.
Looking Forward
Expanding both Agrifood Technology's testing capabilities and client base will remain a priority over the next twelve months. The focus will be on marketing the testing services to targeted clients and industry sectors and improving brand awareness through advertising and increased presence at field days, seminars and conferences.
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AWTA Ltd Annual Review 2011-2012 | AWTA PRODUCT TESTING
NZWTA LTD
Overview
NZWTA Ltd is New Zealand's leading wool and textile testing organisation, providing a comprehensive service to the whole textile industry.
Capabilities
The wool laboratory provides IWTO certification for Yield, Fibre Diameter, Colour and Staple Length and Strength of greasy wool. A comprehensive service is also conducted on scoured wool, which still forms over 70% of New Zealand's wool exports. The 2011/12 season began with the wool market at its highest point in over 20 years. However, within twelve months the effects of global economic conditions had left crossbred wool prices barely above the historic lows of 2009. Testing volumes of greasy wool in 2011/12 decreased from the previous season. The latest testing figures more closely reflected annual wool production, as the spike in crossbred wool prices in 2010/11 had released a quantity of wool held in stock at the time. The national sheep population is estimated to have increased by 2.6% to 31.9m, although most of this increase is through trading stock held over because of good growing conditions. Sheep farming in New Zealand continues to be threatened by other profitable agricultural activities, particularly dairy. The textile testing business acquired from AgResearch completed its first full year in the Napier laboratory. The operation has expanded its customer base and has been successfully integrated into the overall business. The acquisition has provided the company with an important revenue stream and an excellent platform for further expansion in the future.
Looking Forward
Continuing uncertainty in world markets gives little confidence of any significant improvement in wool prices in 2012/13. While other agricultural commodity markets have also been affected, this will place more pressure on sheep farming enterprises in the future. NZWTA Ltd will continue to use its key competencies of quality, integrity and customer focus to grow its overall business. Expansion of services and customer base is a priority throughout new and traditional textile industries as local manufacturing resists the trend towards an import-based market.
RESEARCH & DEVELOPMENT
During 2011/12 the Research and Development department worked on both internal and external projects in partnership with other industry organisations. Funding partners included Australian Wool Innovation (AWI) and the Sheep CRC, while research partners included CSIRO, the University of NSW, Deakin University and the University of New England. The input of commercial entities, including Country Road, The Merino Company and a range of wool topmakers and spinners into research projects is also acknowledged. During 2011/12 key highlights included: · · · · · · · more robust measurement of residual ASH by NIR; new variance and precision estimates and range checks accepted by IWTO for Classed Grower sale lots; and improved sample preparation systems for Automated DMFT testing approved by IWTO. continuing a strong focus on improving safety of machinery; continue developing long-term projects for future increases in productivity; development and installation of upgrades and improvements to the buildings and services; and developing large scale upgrades to machinery to ensure longevity.
During 2011/12 the key manufacturing outcomes were:
INFORMATION SERVICES
The Information Services Division is located within the corporate Head Office. In its application development role the Division develops and maintains the custom software used in production support systems, for example within the wool testing laboratories. It also supports the application packages used in both business support and production support systems such as the enterprise HR3 Payroll and the LabWare Laboratory Information Management System used in Agrifood Technology. The Division is also responsible for the planning, deployment and support of the infrastructure required to support all operations across the enterprise. This infrastructure encompasses the wide area network, data centres and office systems across the country and all the hardware and software used within these installations.
AWTA Ltd Annual Review 2011-2012 | NZWTA LTD
11
DIRECTORS' REPORT
2011-2012 FINANCIAL STATEMENTS
AUSTRALIAN WOOL TESTING AUTHORITY LTD
AND CONTROLLED ENTITY ABN: 43 006 014 106
DIRECTORS' REPORT
The directors present their report, together with the financial statements of the group, being the company and its controlled entity, for the financial year ended 30 June 2012. This financial report has been prepared in accordance with Australian Accounting Standards.
Principal Activities and Significant Changes in Nature of Activities
The principal activities of the consolidated group during the financial year were raw wool, textiles, agricultural products and other materials testing, and computer services. There were no significant changes in the nature of the consolidated group's principal activities during the financial year. The Australian Wool Testing Authority Ltd (AWTA Ltd) is a Company Limited by Guarantee established to assist and promote the development of the pastoral, agricultural, manufacturing and industrial resources of Australia, in particular, by providing independent objective data and information services which will facilitate the efficient production, marketing and processing of wool, other fibres, textile products and related materials. Over the last 55 years, AWTA Ltd has built a highly successful business providing independent test information to its customers, primarily the wool industry in Australia. The Company has built and maintained a national and international reputation for technical expertise, commercial independence and professional integrity, while its corporate structure facilitates the minimisation of the fees that it charges for its services. During the last 2 decades wool production in Australia has fallen steadily and significantly, causing a consequent fall in testing volumes and AWTA Ltd revenue. The Company has responded to this situation with the objective of minimising fee increases for its raw wool clients by: reducing costs by improving labour productivity and significantly reducing management overheads; and · · diversification into related testing markets to improve profitability by growing revenue from non-wool sources.
Operating Results
The net loss of the group for the year, after taking up an impairment charge of $1.347 million, was $1.230 million (2011 net profit of $1.121 million).
Review of Operations
AWTA Ltd, as a consolidated group, comprises 3 operating divisions in Australia (AWTA Raw Wool, AWTA Product Testing and Agrifood Technology), its wholly owned subsidiary NZWTA Ltd and its joint venture, JinAo Testing Co Ltd, which is managed through AWTA Product Testing. The financial performance of each division is separately monitored, with the cash return as a percentage of capital invested being the key measure adopted by the Board. In addition, key performance measures relating to service and technical areas are routinely monitored by the Board. The reviews following summarise the operating performance of each section of the company.
AWTA Raw Wool
The operating environment in the Australian wool industry has deteriorated slightly in 2011/12 after a considerable improvement during 2010/11. Wool prices progressively deteriorated during 2011/12, giving up some of the gains made in the previous year. In addition, during 2010/11, increasing prices encouraged growers to release wool previously stored on-farm to the market, leading to an increase in testing volumes. In 2011/12, this was not repeated and, consequently, the volume of wool tested was lower than in 2010/11 leading to a decrease in AWTA Raw Wool revenue. Despite the recent fall in price, particularly for fine wool, there is continuing optimism that wool production will slowly recover with the AWI Wool Production Forecasting Committee predicting a slight increase of 1.4% in wool production for 2012/13. The majority of Raw Wool revenue comes from presale testing of greasy wool. The number of core tests conducted by AWTA Raw Wool decreased by 2.0% from last year. Staple length and strength testing activity also fell by a similar amount from the previous year with the proportion of core tests additionally measured for length and strength stable. Total revenue decreased by 1.9% from last year. Improved productivity and other cost saving initiatives partially offset inflation resulting in operating expenditure for the Raw Wool division being only 1.2% higher than 2010/11.
AWTA Product Testing
AWTA Product Testing division revenue increased by 9.3% from 2010/11 and the mix of test types changed considerably. Business from Australian textile manufacturers, which was once the division's largest customer group, continues to reduce as production moves off shore and as retail remains depressed. Revenue from this source is progressively being replaced by testing conducted on other products, particularly for the building materials, automotive and reflective goods industry sectors. Expenditure increased by 6.9% due to the greater workload than last year. As a consequence, operating contribution from AWTA Product Testing once again improved on the 2010/11 result. JinAo Testing Co Ltd grew its revenue base steadily in 2011/12 to the point where it was profitable. The majority of JinAo testing was conducted for Australian customers importing Chinese products with a growing base of local processors of Australian wool looking to JinAo for specialist services.
NZWTA Ltd
The operating performance of NZWTA has improved considerably in recent years. NZWTA operating revenue increased due to the maintenance of a high market share in wool testing and a full year of revenue from the textile testing operation that was added to its Napier laboratory in January 2011. NZWTA Ltd has again achieved a satisfactory financial result in an environment where wool production continues to decline.
Agrifood Technology
Agrifood Technology continued to diversify its revenue base in 2011/12. As revenue from grain testing is highly dependant on seasonal conditions and ongoing structural changes in the wheat export industry the Division has been actively extending its activities in the fresh and processed food sectors to counter this risk. This strategy has been successful, with total revenue growing by 2.7% despite a slight fall in the grain testing sector, the traditional customer base for Agrifood Technology. During 2011/12, the return on investment from Agrifood Technology remained healthy.
Non-operating Income
Income from investments was impacted by the ongoing deterioration in financial markets and, as a consequence, overall group revenue from sources other than testing services decreased by approximately 30%.
Unrealised Impairment Charges
In accordance with AASB 139 Financial Instruments: Recognition and Measurement, an impairment charge on available-for-sale investments of $1.347 million has been taken up in the financial statements. The strength of AWTA Ltd's balance sheet allows for a long-term approach to investment and Directors accept there is a risk of volatility and periods of short-term negative returns under the investment policy that it has adopted.
Financial Position
The net assets of the consolidated group have decreased by $1.4 million from 30 June 2011 to $71.5 million at the end of the financial year.
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AWTA Ltd Annual Review 2011-2012 | DIRECTORS' REPORT
INFORMATION ON THE DIRECTORS
Mr D.G. McGauchie AO
· · · · · · · Appointed as an independent director by the Members of AWTA Ltd on 29 October 1999 Appointed as Deputy Chairman on 25 January 2001 and as Chairman on 19 February 2005 Chairman of Remuneration & Appointments Committee Farmer and company director, having previously been active in national farming organisations Partner of C&E McGauchie Terrick West Chairman of Nufarm Ltd and Australian Agricultural Company Ltd Director of a number of listed and unlisted companies, including James Hardie Industries SE and Graincorp Ltd
Mr G.W. Dickinson
· · · · · · Appointed as an independent director by the Members of AWTA Ltd on 18 March 2005 Appointed as Deputy Chairman on 15 April 2005 Chairman of Audit & Finance Committee Member of Remuneration & Appointments Committee Chairman of Rubicon Systems Australia Ltd Director of Nareen Station Pty Ltd and Mutual Trust Pty Ltd
Mr M.A. Jackson
· · · · Managing Director of AWTA Ltd since 21 May 2001 Member of Environment & Safety Committee Director of New Zealand Wool Testing Authority Ltd and JinAo Testing Company Ltd Trustee of the Australian Wool Education Trust
Mr M.D. Avery
· Appointed as the nominee director for Australian Council of Wool Exporters Inc on 22 November 2007 Member of Audit & Finance Committee General Manager - Wool, Queensland Cotton
· ·
Mr G.M. Power
· · · · Appointed as the nominee director for WoolProducers Australia on 2 December 2011 President of WoolProducers Australia Director of Australian Wool Exchange Ltd and Sheep Industry Health and Welfare Pty Ltd Councillor of National Farmers Federation Members Council
Mr D.B. Ritchie
· Appointed as the nominee director for the Wool Scourers and Carbonisers of Australia Group of Australian Wool Processors Council Inc on 25 February 2011 Member of Audit & Finance Committee President of Australian Council of Wool Exporters & Processors Inc General Manager of Victoria Wool Processors
· · ·
Dr P.D. Morgan
· Appointed as the nominee director for the Wool Textile Manufacturers of Australia Group of Australian Wool Processors Council Inc on 16 October 2009 Executive Director of Australian Council of Wool Exporters & Processors Inc Executive Director of Private Treaty Wool Merchants of Australia Inc Director of International Fibre Centre Ltd Principal of Morgan Terrace Pty Ltd
Mr G.W. Turner
· Appointed as the nominee director for Private Treaty Wool Merchants of Australia Inc on 17 October 2008 President of Private Treaty Wool Merchants of Australia Inc Chairman of Australian Wool Industries Secretariat Inc Chairman of Environment & Safety Committee Managing Director of Reeashbro Pty Ltd Director of Wallace Investments Pty Ltd
· · · ·
· · · · ·
Mr D.A. Webster
· · · · · Appointed as the nominee director for Australian Wool Innovation Ltd on 25 November 2008 Director of Australian Wool Innovation Ltd Member of Remuneration & Appointments Committee Chairman of Brolga Minerals Pty Ltd Director of Pabula Pty Ltd, Nova Downs Pty Ltd, Athena Resources Ltd, Cobpen Co Investmments Pty Ltd and Organics for Rural Australia
Mr C.J. Wilcox
· Appointed as the nominee director for the National Council of Wool Selling Brokers of Australia Inc on 15 February 2008 Member of Environment & Safety Committee Executive Director of National Council of Wool Selling Brokers of Australia Inc Chairman of the International Wool Textile Organisation's Market Intelligence Committee Principal of Poimena Analysis and Trustee of Poimena Trust
· · · ·
In addition to the directors in office, the following director held office during the year: · Mr D. R. Hamblin (resigned 30 November 2011). Appointed as the nominee director for the WoolProducers Australia on 19 October 2007.
COMPANY SECRETARY
The following person held the position of Company Secretary at the end of the financial year: Mr Charles Englander -- Bachelor of Law, Master of Laws. Mr Englander has worked for AWTA Ltd for the past 28 years, performing legal and compliance roles. Mr Englander was appointed company secretary on 1 July 2002.
AWTA Ltd Annual Review 2011-2012 | INFORMATION ON THE DIRECTORS
15
Meetings of Directors
During the financial year, 7 meetings of directors and 7 committee meetings (including committees of directors) were held. Attendances by each director during the year were as follows: Directors' Meetings Number eligible D.G. McGauchie AO G.W. Dickinson M.A. Jackson M.D. Avery D.R. Hamblin P.D. Morgan G.M. Power D.B. Ritchie G.W. Turner D.A. Webster C.J. Wilcox 7 7 7 7 2 7 5 7 7 7 7 Number attended 7 7 7 7 2 7 5 7 7 6 7 1 1 3 3 3 3 3 3 3 3 3 3 Audit & Finance Committee Number eligible Number attended Remuneration & Appointments Committee Number eligible 1 1 Number attended 1 1 3 3 Environment & Safety Committee Number eligible Number attended
INDEMNIFYING OFFICERS OR AUDITOR
During or since the end of the financial year, the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as follows: · The Company has paid premiums to insure directors and officers against liabilities for costs and expenses incurred by them in defending legal proceedings arising from their conduct while acting in their capacity as directors and officers of the Company, other than conduct involving a wilful breach of duty in relation to the Company.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.
Auditor's Independence Declaration
The auditor's independence declaration for the year ended 30 June 2012 has been received and is appended to this report.
Member's Liability
The Company is incorporated under the Corporations Act 2001 and is a Company limited by guarantee. If the Company is wound up, the Memorandum of Association states that each member is required to contribute a maximum of $50 each towards meeting any outstanding obligations of the Company. At 30 June 2012, the amount that members of the company are liable to contribute if the company is wound up is $300 (2011: $300).
After Balance Date Events
In the opinion of the directors, there are no likely developments in the operations of the consolidated group known at the date of this report which have not been covered generally within the report. AUDITOR'S INDEPENDENCE DECLARATION To the directors of Australian Wool Testing Authority Ltd In relation to the independent audit for the year ended 30 June 2012, to the best of my knowledge and belief there have been: i. ii. No contraventions of the auditor independence requirements of the Corporations Act 2001; and No contraventions of any applicable code of professional conduct.
Likely Developments
The directors are not aware of any other future developments likely to have a significant effect on the operations of the consolidated group or on the expected results of those operations.
ASIC Class Order 98/100 Rounding of Amounts
The Company is an entity to which ASIC Class Order 98/100 applies and, accordingly, amounts in the financial statements and directors' report have been rounded to the nearest thousand dollars. This Report of the Directors is signed in accordance with a resolution of the Board of Directors and dated 17 August 2012 at Melbourne.
Stephen Schonberg, Partner Pitcher Partners D.G. McGAUCHIE AO CHAIRMAN M.A. JACKSON MANAGING DIRECTOR Melbourne
17 August 2012
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AWTA Ltd Annual Review 2011-2012 | DIRECTORS' REPORT
AUSTRALIAN WOOL TESTING AUTHORITY LTD
AND CONTROLLED ENTITY ABN: 43 006 014 106
FINANCIAL STATEMENTS INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2012
Note Consolidated Group 2012 2011 $000 $000 36,359 1,587 (24,717) (2,363) (2,345) (1,345) (1,118) (1,017) (738) (586) (551) (450) (289) (303) (371) (253) (150) (249) (83) (479) (1,347) 51 420 (769) 3 4 (1,106) (124) (1,230) 36,409 2,147 (23,814) (2,559) (2,376) (1,310) (1,016) (975) (635) (530) (473) (459) (335) (312) (280) (236) (228) (195) (188) (10) (701) (549) 145 639 (907) 1,252 (131) 1,121 Parent Entity 2012 2011 $000 $000 33,150 1,400 (22,887) (2,219) (2,259) (1,171) (1,028) (916) (564) (455) (490) (396) (262) (268) (359) (253) (136) (210) (69) (481) (1,347) 51 420 (769) (1,518) (1,518) 33,388 1,921 (22,079) (2,420) (2,320) (1,144) (920) (870) (480) (419) (412) (401) (313) (258) (276) (236) (206) (174) (175) (10) (641) (549) 145 639 (907) 883 883
Revenue Other income Employee benefits expense Depreciation & amortisation expense Repairs & maintenance expense Energy & utilities expense Materials & supplies expense Freight expense Travel expense Property, Rates & Taxes expense Software expense Communications expense Printing & stationery expense Insurance expense Subcontract testing expense Investment management expense Consulting fees Advertising & Sponsorship expense Audit fees Share of losses of joint ventures Other expenses Impairment charge on available-for-sale
