AEGIC AR 2014 15BINTRODUCTION 3 ANNUAL REPORT 2014 2015 Australian Export Grains Innovation Centre CONTENTS Our values and story 4 Chairman’s report 6 2014–2015 …

INTRODUCTION 1 ANNUAL REPORT 2014–2015

Australian Export Grains Innovation CentreAustralian Export Grains Innovation Centre

Australian Export Grains Innovation Centre2015 ANNUAL REPORT

Australian Export Grains Innovation Centre

Enhancing the international competitiveness of Australian grain through science, technology and innovation.

オーストラリア輸出穀物イノベーションセンター

科学、技術と革新を通じて、オーストラリア産輸出穀物の国際競争力を高めています

Pusat Inovasi Biji-Bijian Ekspor AustraliaMeningkatkan daya saing biji-bijian Australia di tingkat internasional melalui ilmu pengetahuan, teknologi dan inovasi.


All contents copyright © AEGIC. All rights reserved.

The related bodies corporate, directors and employees of AEGIC accept no liability whatsoever for any injury, loss, claim, damage, incidental or consequential damage, arising out of, or in any way connected with, the use of any information, or any, error, omission or defect in the information contained in this publication. Whilst every care has been taken in the preparation of this publication AEGIC accepts no liability for the accuracy of the information supplied.

Trung tâm Cäi cách XuÃt cäng NgÛ cÓc cûa Úc Gia tæng tính cånh tranh trên trÜ©ng quÓc t‰ các loåi håt ngÛ cÓc cûa Úc nh© khoa h†c, kÏ thuÆt và canh tân

호주 곡류 수출 혁신 센터 과학, 기술 및 혁신을 통해 호주곡류의 국제적 경쟁력을 고양

Australian Export Grains Innovation CentreEnhancing the international competitiveness of Australian grain through science, technology and innovation.

澳大利亚谷物出口创新中心

通过科学和创新技术提高澳大利亚谷物的国际竞争力。



3

CONTENTS

Our values and story 4

Chairman’s report 6

2014–2015 highlights 12

Market and competitor intelligence 14

Innovation 16

Extension 18

Collaboration 20

AEGIC Board 22

Organisational chart 24

Financials at a glance 26

Financial statements 27

AEGIC resource projects for 2015–2016 40

4ANNUAL REPORT 2014–2015 4ANNUAL REPORT 2014–2015

AEGIC VALUES

AEGIC VISION

AEGIC MISSION

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Integrity and respect

Leadership

Innovation

Collaboration

Excellence


To enhance the international competitiveness of Australian grain through science, technology and innovation.

Enhance the value capture by export grain producers through national leadership and coordination in research directed at export grain quality, functionality, processing innovation and market and supply chain analysis.

ANNUAL REPORT 2014–2015


2014–2015


OUR VALUES AND STORY 5 ANNUAL REPORT 2014–2015

The Australian Export Grains Innovation Centre (AEGIC) was formed in 2012 to provide national research leadership and strong international linkages to export markets. AEGIC is a vibrant hub of science, technology and innovation focussed on increasing the competitiveness of the Australian grains industry through improved productivity and product value in export markets.

AEGIC supports the trade and use of Australian grains around the world through cutting-edge grain quality and processing technology and market research innovation. AEGIC works with key stakeholders across the supply chain ranging from Australian grain producers, plant breeders, marketers and traders to millers, processors and consumers in export markets.

Grain is one of Australia’s most valuable exports, delivering more than $5 billion in export income to the Australian economy each year. Wheat is Australia’s largest export grain followed by barley, canola and pulses. These crops are the focus of AEGIC’s work in the grains sector.

Australia is the fourth largest wheat exporter in the world, contributing 15 per cent of total world trade and sending grain to more than 40 countries each year, particularly Asia and the Middle East. AEGIC’s headquarters are based in Perth, Western Australia, the largest grain exporting state. AEGIC is a national body with confirmed partnerships including the Queensland Alliance for Agriculture and Food Innovation, and the Department of Economic Development, Jobs, Transport and Resources, Victoria.

AEGIC provides value to the industry by:

• Providing global market intelligence to the Australian grain industry on emerging market trends; functionality requirements and opportunities.

• Using accumulated market intelligence to carry out targeted grain quality and processing research, development and extension to continue to meet our international customers’ requirements.

AEGIC’s members are the Grains Research and Development Corporation (GRDC) and the WA State Government, through the Department of Agriculture and Food, Western Australia (DAFWA).

OUR STORY

Rob Delane, Keith Perritt, Terry Redman and Robert Sewell at the Launch of AEGIC during 2012

AEGIC is an initiative of the Western Australian State Government and Australia’s Grains Research and Development Corporation

Department ofAgriculture and Food



6ANNUAL REPORT 2014–2015

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CHAIRMAN’S REPORT Terry Enright

During the first half of 2015, AEGIC’s Members — the Grains Research and Development Corporation (GRDC) and the Department of Agriculture and Food, Western Australia (DAFWA) — reaffirmed their support for AEGIC extending funding arrangements until 2020.

This extended commitment to AEGIC by our Members until 2020 has provided the opportunity to plan further ahead and focus AEGIC’s efforts.

The decision came after a review process carried out by a panel of three independent individuals with knowledge and experience across the grains supply chain. The review included carefully examining AEGIC’s activities and operating plans; and interviewing industry stakeholders, ranging from traders and marketers to researchers and breeders. This process also involved measuring AEGIC’s value with international customers of grain.

It is immensely pleasing that following this thorough assessment of AEGIC’s value proposition, AEGIC’s role was endorsed by our Members and the greater grains sector. Specifically this affirmed role is to carry out:

• Independent technical support and a point-of-contact for international grain customers and processors;

• Grain quality and functionality research, development and extension and capacity building initiatives;

• Independent reporting of medium and long-term global demands for Australian grain.

Industry consensus

An important part of the industry consultation was for representatives of the sector to come together and agree on what industry players are best placed to provide what services to support our export grains industry. This was facilitated by the Australian Grains Industry Discussion Group (AGIDG).

“In my view our industry cannot

function to its potential unless all

members of the value chain work

together”



The main objective of the discussion was to ensure Australia is providing the customer support services expected by our international markets.

AEGIC’s role in this was identified in the points above. These endeavours will complement the trade in the marketing and selling of Australian grain, and the other parts of the puzzle, including market access, trade negotiations, classification and biosecurity.

In my view our industry cannot function to its potential unless all members of the value chain work together to share knowledge and findings, discuss strategy and most importantly further the mutual objective of enhancing the value of Australia’s export grain.

In having these discussions I feel the sector is well on track to making such collaboration happen.

Communicating with industry

A significant focus of AEGIC’s operation this year has been increasing our engagement with stakeholders. AEGIC’s stakeholders are many and diverse. Domestic stakeholders span the research sector, trade and marketers, agribusiness, government and policy developers and of course Australian grain growers.

Internationally AEGIC works with government agencies, grain procurers, processors — such as millers and brewers, as well as research bodies.

To ensure we are communicating regularly with the industry and in an effective manner AEGIC developed a comprehensive stakeholder management plan. The plan outlines AEGIC’s value proposition for each group and the mechanisms for connecting in regards to this.

Importantly the approach expresses a commitment to monitor the success of engagement with industry and to swiftly act to improve it when we are found lacking.



CHAIRMAN’S REPORT 7

Our Member’s review into AEGIC’s operations provided a fantastic opportunity to work with our stakeholders to determine consensus on where AEGIC should focus its efforts.

Collaborations

From its establishment a priority has been forming partnerships across AEGIC’s key priority areas — grain quality and processing research and development and market intelligence gathering and reporting.

During 2014–2015 AEGIC made more progress on this front (see Figure 1).

AEGIC and GrainGrowers are now preparing the 2015 Wheat Quality and Variety Report which will be the second joint report.

AEGIC has also confirmed partnerships with the Queensland Alliance for Agriculture and Food Innovation; Department of Economic Development, Jobs, Transport and Resources, Victoria; CSIRO, Curtin University; Murdoch University and the Birchip Cropping Group.

Internationally AEGIC is working with baking technology development company, BakeTran, laboratory analysis equipment manufacturer Perten, flour millers and flour mill representatives in Japan, Indonesia, the Philippines as well as a number of global breweries.

A focus on customer service

As the global grain market place increases in its dynamism, customer service will become a point of differentiation.

Identifying which customer services can increase the value proposition of our grain is vital, and significant guidance on this can be gleaned from looking at services provided by the United States and Canada. Both countries invest considerably in equipping customers with the information they need to make smart buying decisions, such as crop quality and production data.

“As the global grain market place increases in its dynamism, customer service will become a point of differentiation”

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Figure 1 AEGIC formal collaborations 2014-2015

Figure 2 Strategy development to maximise Australia’s competitiveness in grain exports

Strategy development

Grower value

Market analysis and trends

Understanding grain use and functionality

Competitor analysis

Technical support is also highly valued by our customers, i.e. demonstrating the capability of Australian grain in laboratories, bakeries and breweries.

AEGIC is working on better understanding the offerings of our competitors with the aim of increasing our competitive position (see Figure 2).





Capacity building

Scientific

Increasing Australia’s scientific capacity in grain quality was identified as part of AEGIC’s role in the National Grains Research, Development and Extension strategy.

It is also essential to foster innovation at a scientific level to ensure our grains meet international end-use purposes.

Trade-focussed

AEGIC also invests in building an understanding of Australian grain production and grain quality across the industry. During 2015 AEGIC collaborated with Austrade to provide webinars to Business Development Managers (BDM) posted in Australia’s established and emerging international markets. These webinars focussed on up-skilling BDMs in their knowledge of Australian grain production and its end uses.

New challenges

Australian grain is renowned across the world for its superior quality and functionality, and for the clean, green, ‘safe’ environment in which it is grown.

However countries in the Black Sea region have again started to export large quantities of grains and are challenging our share in established markets.

Currently the Black Sea and Europe combined account for 45% of world wheat trade, with considerable emphasis in the Ukraine and Russia on expanding grains exports. Black Sea production is increasing and is competitive with Australian wheat in some markets.

Supply chain pressure is also becoming more pronounced. Reports indicate it is, at times, cheaper to move grain from Odessa in the Ukraine to Indonesia than from Geelong to Indonesia.

AEGIC recognises this trend. During 2014-2015 a highlight for AEGIC was a week-long workshop held in Perth for representatives from two of Indonesia’s largest flour mills.

The objective was to demonstrate the performance of Australian wheat in Indonesian baking processes and to connect the millers with AEGIC wheat quality technical experts.

The week included visits to Kwinana port and also to a family grain growing operation in the Western Australian wheatbelt.

I am pleased industry has given us a mandate to continue to conduct more of these initiatives with our international customers.


AEGIC’s in-progress study looking at Black Sea grain production, and specifically the region’s supply chain, will provide a valuable insight into this emerging competitive source of grain.

New opportunities

However with challenges there are also opportunities. Wheat consumption across Asia is rising at a level that Australian production cannot possibly meet.

Rather than viewing this as a barrier, we should seize this demand as an opportunity to capitalise on Australia’s reputation as a provider of food-grade, safe grain which is perfect for high-end, high-value products.

At the Australian Grains Industry Conference in Melbourne during August, United States market analyst Emily French declared India as the next big frontier for Australian wheat, with wheat consumption in the sub-continent increasing.

Another potential new market to explore is Myanmar. As democracy takes shape in this country, trade will naturally evolve, and Australia is well placed to be at the centre of this evolution. During July, AEGIC’s markets team visited Myanmar to better understand the emerging nation’s demand for grain and its end-use.

Making the connection

There is no doubt that improving connections between international customers and our sector — including grain growers — is part of good customer service.

Consumers are becoming increasingly close to production points as a result of the digital age. There is also increased emphasis on food safety. Having this connection can increase a consumer’s comfort in a product and therefore increase its value.

“Australian grain is renowned across the world for its superior quality and functionality however competitors are challenging our share in established markets”

3GRAIN QUALITY COURSES FOR AUSTRALIAN RECEIVAL POINT OPERATORS

1TECHNICAL EXTENSION WORKSHOP IN AEGIC LABORATORIES

3IN-MARKET TECHNICAL EXTENSION WORKSHOPS AND SEMINARS






AEGIC’s overarching key performance indicators (KPIs) for 2012–2017Progress at June 2015

Establishment of a portfolio of innovative export grain quality-focussed research programs with outputs and key performance indicators

Establishment of at least four grain quality and functionality technical transfer workshops and seminars p.a. for Australian export grain customers

Partnerships established with national and international R&D organisations on programs relating to grain quality, functionality and processing technology

Ongoing national leadership of Australian export grain industry good functions in a deregulated environment

National leadership in the provision of independent, efficient export grains quality testing and analytical services

Export grains strategic plans established for Australia’s existing and emerging export grain markets

The development of a team of grain quality, functionality and market experts delivering technical information to and ascertaining requirements from Australian grains international customers

Export grains quality and functionality related research priorities identified for wheat and barley

100%

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100%

Our team

AEGIC’s team of nationally renowned experts has continued to grow during 2014–2015 (see Figure 3) to meet the demands of our projects (see Figure 4).

During 2014–2015 AEGIC bolstered its internal scientific capacity with the direct employment of six grain quality technical officers and three specific technical appointments with expertise spanning wheat and oats.

AEGIC continues to work on formalising Human Resources (HR) protocols, staff development, flexible work practices and wellbeing as key factors to productivity and retention.

The Board

I’d like to take this opportunity to thank my fellow Directors — Matt Macfarlane, Stephen Marshall and Bruce Lee — for their commitment to AEGIC. Their contribution is certainly significantly responsible for the good stead AEGIC finds itself in today.

Similarly, I acknowledge David Fienberg, AEGIC’s Chief Executive Officer until his resignation in November 2015, for steering AEGIC through the review period while maintaining a focus on productivity.

Our Members

Lastly I acknowledge the continued support of GRDC and DAFWA, through their respective leaders GRDC Chair Richard

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Figure 3 AEGIC staff Figure 4 AEGIC projects

Clark, GRDC Managing Director John Harvey, DAFWA Director General Rob Delane and DAFWA Grain Industries Executive Director Mark Sweetingham.

Terry Enright CHAIRMAN, AEGIC




HIGHLIGHTS

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July 2014In July AEGIC developed a four week program and hosted a visiting noodle expert from Japan. Mr Kazuhisa Kirizawa was from Nippon Flour Milling Company, representing the Japanese Flour Milling Association (JFMA). Through the management of the JFMA program AEGIC supports classification of new noodle varieties.

July 2014AEGIC released a report on the Saudi Arabian market which outlined the impact of recent changes for Australia’s grain exports and the future of Australia and Saudi Arabia’s grain trade relationship.

August 2014Canola to EU workshop — industry stakeholders planned how to tackle the European Union’s greenhouse gas emissions barriers for Canola.

August 2014AEGIC’s August yield forecast predicted the seasonal forecast finish was 1.71 t/ha, which matched the preliminary ABARES final estimates.

September 2014AEGIC commenced a technical interaction with the Chinese Academy for the State Administration of Grain (ASAG) on Chinese wheat gluten requirements and end-use research.

October 2014AEGIC commenced a partnership with Curtin University and the Seamild Food Group, one of China’s leading oat food producers, under the Australia China Agriculture Cooperation Agreement (ACACA) for a one-year project to understand functionality requirements of oats for Asian-style food products such as noodles.

November 2014In collaboration with BakeTran, AEGIC ran a workshop with two of Indonesia’s largest flour mills, Bogasari and Eastern Pearl to demonstrate versatility of Australian wheat for South-East Asian baking purposes.

November 2014For the second year in a row AEGIC hosted a series of three-day capacity building workshops for receival point operators. The workshops outlined the quality parameters pertaining to wheat, barley, oats and canola and how they impact the end-product whether it be noodles, bread, beer or oil.

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ABARES final estimate

July 2014



2014–2015December 2014Rie Sadohara from Sanwa Shurui visited AEGIC on a technical exchange program to investigate whether existing malt quality testing equipment could be utilised in small scale assessment of Shochu production, a niche market for Australian barley.

December 2014AEGIC Chief Economist Professor Ross Kingwell presented at the International Grains Forum in Jeddah, Saudi Arabia where local officials shared their interest in knowing what volumes of wheat might be available from Australia in 2015 and beyond.

January 2015AEGIC research revealed that between 1982 and 2012 more than half Australia’s wheat growing regions had improved their Water Use Efficiency (WUE) by at least 50 per cent despite declining growing season rainfall.

February 2015AEGIC conducted a series of video conferences in partnership with Austrade targeting business development managers in all the key grain importing countries. The presentations included profiles of the Australian grains industry as well as the functionality of Australian wheat. AEGIC subsequently have received requests from DFAT and the Victorian government to undertake similar presentations.

March 2015AEGIC hosted the Australia Precinct at the 2015 Global Grain Asia conference held in Singapore. Global Grain Asia is the leading grains and oilseeds event in the world’s largest destination market, South East Asia.

March 2015At AEGIC’s invitation, Mr Ricardo Pinca, Executive Director of the Philippine Association of Flour Millers (PAFMIL), highlighted opportunities and pathways for Australian wheat sales to the Philippines which included public presentations in Perth and Melbourne.

April 2015AEGIC published the 2014 Australian Wheat Quality Report in partnership with GrainGrowers which provided a guide to the quality of the 2014 wheat harvest for buyers and users of Australian wheat.

May 2015AEGIC released the report The puck stops here! Canada challenges Australia’s grain supply chains.

June 2015

HIGHLIGHTS 13



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EUROPEDuring August 2014 AEGIC hosted a GRDC-sponsored national workshop on meeting European Union (EU) emission reporting requirements for export of canola. As a result, a national research collaboration was formed involving CSIRO, AEGIC, the Australian Oilseed Federation, Curtin University, Meo Solutions and LCA Solutions Pty Ltd. This collaboration will generate emission data required by the EU that will allow Australian exports of canola to the EU to continue after 2016.

BLACK SEA REGIONAEGIC is examining the competitiveness of the Black Sea Region during 2015–2016.

MIDDLE EASTDuring August 2014, AEGIC produced a Global Grain Report: Saudi Arabia — A changing landscape for Australian Grain Exports. The report looked at the current and likely future trends in Saudi Arabia which will influence Australia’s grain trade to the Kingdom. In addition AEGIC produced a set of Global Grain factsheets looking at other Middle Eastern markets for Australian grain.

AEGIC published a series of Global Grain factsheets on the status and opportunities of key Middle East and North Africa (MENA) markets. These markets included Iran, Iraq, Nigeria, Sudan, Kuwait and Egypt and are published on AEGIC’s website aegic.org.au

MARKET AND COMPETITOR INTELLIGENCE

$1,003 million*CANOLA

$124 million CANOLA

27 mmt**WHEAT

$1,510 million WHEAT

3 mmtBARLEY

$505 million BARLEY

* Value of Australian exports — 4-year average 2011–2014. Source: Australian Bureau of Statistics**Competitor export volumes — AEGIC calculations based on ITC/Trademap data

KEY

Target marketsTarget competitors



CHINAExports of Australian oats to China have increased approximately fivefold in the past few years. In November 2014, AEGIC began a collaboration with Curtin University and Chinese food manufacturer Seamild Food Group (Seamild) to:• Understand China’s requirements for oat quality and

functionality and;

• Conduct technical research to establish Australia as China’s preferred supplier of quality milling oats.

The collaboration began with a week-long technical exchange in Perth during November 2014 and was completed in 2015.

As part of a research collaboration with the Academy State Administration of Grain (ASAG), AEGIC commenced a technical interaction with ASAG staff visiting Australia to present information on Chinese wheat gluten requirements and to conduct joint end use research with AEGIC staff.

AEGIC initiated a visit of a major noodle manufacturing company to Australia and demonstrated the functionality and value of Australian wheat for noodles.

AEGIC developed strategic in market relationships with Australian and Chinese government agencies.

NORTH ASIA (JAPAN, KOREA, TAIWAN)• The Japanese and Korean soft noodle markets import about 1.6mmt of

Australian noodle wheat per annum. These have been long term, stable markets for Australian growers. However, the longer term future of this industry is clouded by the decreasing financial incentives for growers of noodle wheat varieties, relative to recently-bred hard wheats. AEGIC, in association with the Grains Industry Association of WA (GIWA), has produced a comprehensive report on the challenges facing the Australian noodle wheat industry, including all facets such as the agronomic challenges, buying structure, value chain and economic analysis. The report was released during August 2015.

• AEGIC undertook its first technical seminar in Taiwan in partnership with AGT and Austrade.

• AEGIC, in association with the Grains Industry of WA, began a comprehensive report on the challenges facing the Australian noodle wheat industry, including all facets such as the agronomic challenges, buying structure, value chain and economic analysis.

CANADADuring May 2015 AEGIC released a report The puck stops here! — Canada challenges Australia’s grain supply chains which compared and contrasted Australia’s grain supply chain with that of Canada’s and outlined the opportunities for increasing the efficiency of Australia’s grain freight system. Canada is Australia’s main competitor in the export of wheat and malting barley.

9 mmtCANOLA

$916 millionWHEAT

21.5 mmtWHEAT

$262 million BARLEY

138 mmtBARLEY

$2 million OATS

1.8 mmtOATS

$227 million CANOLA

$365 million WHEAT

$680 million BARLEY

$1.5 million OATS

SOUTH EAST ASIA• AEGIC used multiple consumer research tools

and associated analytical capacity which continues to be applied to collection and analysis of grain functionality data in Singapore, Malaysia, Indonesia and Philippines.

• AEGIC continued to develop relationships with major flour mills and food manufacturers in South East Asia allowing pathways for a GRDC project on collecting objective market intelligence on the Indonesian and South-East Asian wheat markets.

• Cemented relationship with Filipino Chinese Bakery Association (FCBA) allowing access to in market training and education facilities.

• Work has commenced on the prospects for Australian wheat into the emerging market of Myanmar.

$2,621 million WHEAT

$1.3 million OATS

MARKET AND COMPETITOR INTELLIGENCE 15



INNOVATION

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AEGIC uses intelligence gathered on market requirements to guide research and development efforts toward the greatest benefit to the Australian grains industry.

Wheat research and innovation

As part of the research and innovation projects, a partnership with French company Chopin Technologies resulted in specialist equipment being made available. The MixoLab and Solvent Retention Capacity (SRC) tests are now being used in noodle, baking and oat-related research to study the mixing behaviour of proteins, pasting characteristics and retrogradation of starch as well as indicative end product performance.

Australian wheat for Asian baking

As part of the Australian Wheat for Asian Baking (AWAB) project AEGIC hosted a week long workshop on baking principles using Australian wheat and quality control points from mixing to moulding to baking with the two largest flour mills from Indonesia. Technical extension and innovation in bread processing will lead to greater understanding by customers on how to use Australian wheat in premium baking grists.

Barley malting quality research

AEGIC is determined to improve malting barley qualities and to minimise processing quality issues for improvements of the processing performance, value and competitiveness of Australian malting barley varieties. As part of AEGIC’s Malting Barley Quality Australia program, research was conducted to increase malt extract and improve malting barley variety attributes.

During 2014–2015, AEGIC:

• Began to establish a resource database for the key malting quality traits, particularly malting quality, grain yield, disease resistance and other QTL, molecular markers, genomic sequences and transcriptomes.

• Identified new beta-amylase genes in order to develop and deliver new molecular markers for breeding programs.

• Established the metabolic pathway of S-methyl-methionine and identified key genes for dimethyl sulphide (DMS) formation, which creates undesirable odour.

LEFT: Gas chromatography is used in the AEGIC Grain Laboratory to analyse levels of dimethyl sulphide, an undesirable flavour component in malted barley and beer.

ABOVE: Geoffroy D’Humieres, Arnaud Dubat and Jenny Ng demonstrate equipment from Chopin Technologies (France) which is being commissioned and trialled in AEGIC laboratory.



Pilot Malting Australia

Pilot Malting Australia (PMA) is a joint initiative of the AEGIC and Edith Cowan University (ECU). It has been established to help improve market access and value/supply chain outcomes for the Australian malting barley industry.

During 2014–2015 PMA, with support from AEGIC, made substantial progress in the GRDC-funded Commercial Validation Project (WCA00003). The aim of this project is to evaluate the relationship between the 100kg pilot malting plant and commercial malting plants operating within Australia.

Noteworthy achievements during the year were:

• Evidence presented to the project participants that PMA can closely mimic the commercial process and could potentially be used as an adjunct to the barley variety accreditation process. This work will continue through 2015.

• PMA assisted the CSIRO ultra-low gluten project by malting batches of ULG barley to provide CSIRO with an understanding of its malting characteristics using a commercial malting program.

• The PMA facility was introduced to Chinese malting and brewing companies through the GRDC funded AEGIC Market Intelligence Project (AEG00006).

Increasing the value and competitiveness of Australian export oats

During 2015 AEGIC’s Grain Quality and Processing Technology Innovation program expanded to include oat grain quality research.

The Asian-style oat foods are a new and growing end-use for Australian oats. This project will investigate these new products and identify the preferred oat quality and functionality for their use. A secondary objective of this project is to build technical capacity for the Australian oat industry in oat chemistry and end-product functionality, to help ensure that our industry remains in the key export markets.

Freshly malted barley being removed from the unimalter at Pilot Malting Australia. Photo: Jon Luff

Dr Qisen Zhang loads polymerase chain reaction (PCR) products to Agarose gel for genotyping work.

“Innovative baking processes being developed at AEGIC will create demand for Australian wheat in Asia into the future”STANLEY CAUVAIN, BAKETRAN (UK)

PMA


INNOVATION 17



EXTENSION

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AEGIC is committed to providing maximum value for the Australian grains industry through the effective extension of research outputs. Throughout 2014–2015, AEGIC worked tirelessly to disseminate the results of its research to the appropriate audience.

At various points of each research project, AEGIC engaged with growers, industry, export customers and government to communicate research outcomes and provide concrete benefits to the Australian grains industry.

Reports

During 2014–2015 AEGIC disseminated information through the following reports:

• Saudi Arabia: A changing landscape for Australian Wheat

• The puck stop here: Canada challenges Australia’s grain supply chains

• National Wheat Quality Report (In collaboration with GGL)

• Global Grain Series factsheets including for Iraq, Egypt, Iran, Kuwait and Nigeria

• Australian Grain Notes — barley, canola, oats, pulses

• Crop Prospects Reports• ENSO Summary • Predicted shire wheat yield maps• Soil moisture maps• Water use (production) efficiency maps.

Events

AEGIC experts were asked to present at many industry events to share the findings of AEGIC research. AEGIC also sponsored several events to support industry collaboration and the generic promotion of Australian grain. During 2014–2015 AEGIC was involved in:

• Global Grains Asia• Australasian Grain Science Association

(AGSA) Conference• Australian Barley Technical Symposium• International Gluten Workshop• American Association of Cereal

Chemists International • 2015 GRDC Crop Updates • GRDC National R&D Forum • Australian Agricultural and Resource

Economics Society’s annual conference• 2015 Australian Agribusiness Outlook

Conference.

Professor Ross Kingwell discusses agricultural economics with researcher Dr Morteza Chalak from the University of Western Australia

Dr David Stephens shares AEGIC’s crop yield ranking maps, seasonal forecasts and latest research findings on climate change with farmers in Cleve at the 2014 Eyre Peninsula Field Days.

32REPORTS, PUBLICATIONS AND MAPS

35PRESENTATIONS AT INDUSTRY EVENTS AND WEBINARS



EXTENSION 19 ANNUAL REPORT 2014–2015

Technical extension

International customers

During 2014–2015 AEGIC provided technical extension to international customers through in-market visits to China, Indonesia, Japan, Korea, Malaysia, Myanmar, the Philippines and Singapore. In China, Japan and Korea these visits included the hosting of technical workshops for millers and processors of Australian wheat. Feedback from the workshops demonstrated customers view technical information communicated by AEGIC as high-value to their buying decisions.

Flour millers in target markets

Technical extension and innovation in bread processing is developing a greater understanding by customers on how to use Australian wheat in premium baking grists.

Further technical extension was provided to Indonesia’s two major flour millers,

Bogasari and Eastern Pearl, with a week-long workshop held at AEGIC’s Perth headquarters to demonstrate the performance of Australian wheat in Indonesian baking processes. Feedback from the workshop revealed participants gained a better understanding of the baking potential of Australian milling wheat.

Australian trade representatives

During early 2015 AEGIC hosted a series of webinars for Austrade Business Development Managers based in Australia on established and emerging grain markets. These webinars were focussed on upskilling Austrade BDMs in their knowledge of Australia’s grain production and exports; end-users and the factors determining functionality and demand for Australian grain. The webinars were subsequently also provided to State Government representatives for the same purpose.

A jointly organised Austrade/AEGIC wheat quality seminar with Dr Steve Jeffries, CEO of AGT (Australia’s largest wheat breeding company) attended by 90% of the Taiwanese flour milling industry.

Roslyn Jettner during a technical exchange with Chinese oat breeders.

5HOSTED TECHNICAL EXCHANGE VISITS

Governments in target markets

AEGIC began implementation of an MOU signed with Academy State Administration of Grain (ASAG) on research collaboration, commenced technical interaction with ASAG staff visiting Australia in September 2015 to present information on Chinese wheat gluten requirements and to conduct joint end use research with AEGIC staff.

7IN-MARKET TECHNICAL EXCHANGE VISITS



ogin

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COLLABORATIONDuring 2014–2015, AEGIC made significant progress on its objective to bolster national grain quality technical capacity and to reduce overlap and market gaps in lab and technical services.

AEGIC also engaged with international partners in several world-class research projects.

WESTERN AUSTRALIAPerth• Curtin University

— Supported students completing their studies in Food Science and Technology.

— Supervision of PhD and Masters students in the Food Science and Nutrition stream.

• CBH Group— Grain quality training.

• Grains Industry Association of WA (GIWA) — Noodle wheat report.

— Technical support through wheat, barley and oats councils.

• Intergrain• DAFWA

— AEGIC is continuing to collaborate with DAFWA, the Canadian Grains Commission Agriculture and Agrifood Canada in the Australia–Canada Collaborative Barley Research Project.

• Edith Cowan University (ECU) — Pilot Malting Australia.

EUROPE• BakeTran, UK• Chopin Technologies, France • Perten Technologies, Sweden • Meo Solutions, Germany

— An emission reporting study that will allow Australian exports of canola to the EU to continue after 2016.

AMERICAS• Climate Prediction Centre, USA

— Collaboration with climate scientists in the monitoring of El Niño Southern Oscillation (ENSO).

• Agriculture and Agri-food Canada — Crop modelling and ENSO forecasting.

• American Society of Brewing Chemists (ASBC) — The AEGIC barley laboratory is a participant of the ASBC methods subcommittee. During the second half of 2015 the laboratories will be participating in a ring-test to evaluate a standardised methodology for lipoxygenase (LOX) testing in malted barley.

ASIA• Philippines Flour Millers Association

(PFMA)• Seamild, China• Filipino-Chinese Bakery Association• Academy State Administration of

Grain (ASAG), China

• Bogasari Flour Mill, Indonesia — Australian Wheat for Asian baking project.

• Eastern Pearl Flour Mill, Indonesia— Australian Wheat for Asian baking project.

• Japanese Flour Millers Association— Classification of new noodle varieties.

STATEINTERNATIONAL

• Murdoch University — Grain chemistry capacity building program.

• University of Western Australia (UWA) — Barley genomics.

Narrogin• Narrogin Agricultural College

— Capacity building.

• Grain Growers Ltd. (GGL)— Wheat quality report, GRDC project on market intelligence, consumer research tools, GRDC project Benchmarking Australian Wheat Quality.

• Wheat Quality Australia (WQA) — Wheat Classification Council membership.

NATIONAL• Federal Department of Agriculture

— Pilot Voluntary Wheat Stocks Reporting Scheme.

• Grain Research and Development Corporation (GRDC)— Four direct projects for research outcomes and providing investment guidance.



VICTORIAMelbourne• Department of Economic

Development, Jobs, Transport and Resources Victoria (DEDJTR) — During 2014 AEGIC renewed a collaboration with the Department of Economic Development, Jobs, Transport and Resources Victoria (formerly the Department of Environment and Primary Industries) to collaborate in the areas of international pulse markets (i.e. North Africa and Middle East), farm profit driving economic analysis, and monitoring droughts and crop prospects.

Birchip• Birchip Cropping Group (BCG)

— Recently, AEGIC analysed the national Birchip Cropping Group (BCG) Yield Prophet data set from paddocks across Australia and was able to update district sowing date calculations in the STIN model. Preliminary analysis suggests that mid-season nitrogen data may be able to assist regional and national yield forecasts.

QUEENSLANDBrisbane• Queensland Alliance for Agriculture

and Food Innovation (QAAFI) (University of Queensland)— During 2014 AEGIC established a research partnership with the Queensland Alliance for Agriculture and Food Innovation (QAAFI) to collaborate on a variety of different issues impacting on export grains, including the future role of Australian Prime Hard (APH) wheat.

— Increasing competitiveness of Australian export oats project.

NEW SOUTH WALESSydney• Department of Primary Industries,

New South Wales — AEGIC provides information related to extreme event forecasts.

• Australian Oilseed Federation (AOF) — GRDC project Theme 1 intel, and an emission reporting study that will allow Australian exports of canola to the EU to continue after 2016.

• Australian Trade Commission — Capacity building for business development officers.

• University of Sydney — Capacity building

Wagga Wagga• Charles Sturt University

— GRDC project on market intelligence

• Australian Oilseed Federation (AOF) — GRDC project on market intelligence, and an emission reporting study that will allow Australian exports of canola to the EU to continue after 2016.

• Australian Trade Commission — Capacity building for business development officers.

SOUTH AUSTRALIA• Primary Industries Research

South Australia (PIRSA)— Collaboration with PIRSA improved AEGIC’s model for developing crop forecasting maps by increasing the accuracy of sowing date data.

• University of South Australia — to develop consumer research tools and capacity.

Grain-producing areas

• National Oat Breeding Program (NOB) — Collaborator on oat project.

• Commonwealth Scientific and Industrial Research Organisation (CSIRO) — Emission reporting study that will allow Australian exports of canola to the EU to continue after 2016.

COLLABORATION 21



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AEGIC BOARD

Terence Enright HON DR.SC(AGRIC); GAICD

Chair, Appointed 1 April 2014

Terry is a Western Australian grains and livestock producer. As a former Chairman of the Grains Research and Development Corporation (GRDC) he has overseen a reorganisation of Australia’s wheat-breeding efforts, strengthening its national and commercial focus. He is an Independent Director of the Australian Livestock Export Corporation (Livecorp), immediate former Director of Grain Producers Australia, Chair of the Western Australian Crawford Fund Committee and a Member of the Board of Directors. Terry has served in a number of Agriculture-related positions including as a Commissioner of the Export Wheat Commission, a Member of the standing committee on national research priorities and Member of the panel to conduct an independent review of the Australian Centre for International Agricultural Research.

Stephen Marshall B.SC (HONS); M.APP.SC; GAICD

Director, Appointed 24 October 2012 GRDC nominated Director

Steve has an extensive background in food science and technology management. He has held chief managerial positions in a number of food manufacturing businesses and served on the board of a variety of Australian agriculture-related Government and non-government research bodies.

Matthew Macfarlane B.COM; GAICD

Director, Appointed 24 October 2012 WAAA nominated Director

Matt is a Co-founder and Investment Director at Yuuwa Capital, a Perth based $40m early stage venture capital fund launched in 2009. Matt has been both an investor and an entrepreneur in early stage tech startups and has actively participated in the startup ecosystem in Perth for over 10 years. Matt works hands-on with startup companies to assist in building teams, accelerating growth, achieving milestones and securing additional financing. He has been invited to judge at a number of prestigious awards including the WA Innovator of the Year Awards; multiple Startup Weekends; the inaugural Unearthed Hackathon; Curtin’s Commercial Innovation Awards; OzApps and the AIMWA WestBusiness Pinnacle Awards. He has also acted as a mentor for the Founder’s Institute (Perth Chapter) since inception; the RAC SeedSpark corporate accelerator and the Amcom Upstart accelerator. Matt currently is also a director at Kanopy Pty Ltd and with investee companies: iCetana, Agworld and Dealised.



Bruce Lee BAGSC; M.SCAG; DR.SC.AGR

Director, Appointed 24 October 2012

Bruce, an agricultural chemist has a track record of success in research and commercialisation in both the public and private sectors for periods of 12 and 17 years respectively.

He has extensive management experience in large, multidisciplinary, multicultural teams that are geographically spread, including Syngenta, Novartis and Ciba-Geigy. He also spent 10 years at the CSIRO leading the development and commercialisation of programs directed to high value grains (quality attributes) and novel oilseeds. He has led mergers and acquisitions, public and private partnerships and served on numerous boards.

Bruce is currently the CEO of Genective, a joint venture aimed at the development and commercialisation of genetically modified corn traits.

His leadership in food and agribusiness was recognised with the Rabobank Leadership Award in 2010.

Emma Walczak LLB, BCOMS(ICT)

Company Secretary and General Counsel, Appointed January 2015

Emma is a commercial lawyer and company secretary with more than eight years’ experience in providing advice with respect to Corporations Act/ASX Listing Rule compliance, capital raisings, acquisitions, takeovers and disposals, and general commercial and contractual matters. Emma worked in commercial law firms during her early career before starting Trinitas Legal, her own commercial law and company secretary practice where she advises clients in the resources and grain industries. Emma has been the company secretary of AEGIC since 15 January 2015.

AEGIC BOARD 23



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ORGANISATIONAL CHART

National Barley Grain Classification

Services – Pilot Malting Australia

Barley Malting Quality Industry

Engagement Biochemist

Barley Malting Quality Innovation

Biochemist

Oat Quality Chemist

Oat Quality Research Officer

Grain Research Scientist

Grain Quality Research Officer



Program Leader — Middle East, China

Program Leader — South East Asia,

China

Program Leader — Japan, Korea and

China

Strategic Market Intelligence

Analyst

Barley Technical Markets Manager

Malting Barley Quality Australia

Grain Protein Chemistry Capacity Building Program

National Oats Quality Research

and Innovation

Wheat Quality Technical Markets

Manager

Chief Executive Officer

Strategic Market Intelligence

Requirements and Opportunities Manager/General

Manager

Grain Quality and Processing Technologies




Economics and Business Analysis

Manager

Communications Officer

Stakeholder Liaison Officer

Strategy and Planning Advisor

Communications and Information

Services Manager

Economic Analyst

Crop Forecasting Analyst

Programmer

Economic Analyst — Supply Chain

Supply Dynamics Manager

HR ManagerExecutive Assistant

IT Database Programmer

Accounts Administrator

Administration Assistant

Barley Quality Laboratory

Manager

Wheat Quality Laboratory

Manager

National Grain Quality

Laboratory

Executive Assistant to the CEO

Chief Financial Officer

ORGANISATIONAL CHART 25

KEY

Executive Management TeamStaff

Grain Quality Technical Officers

x 11


26AUSTRALIAN EXPORT GRAINS INNOVATION CENTRE LTD (LIMITED BY GUARANTEE)ABN 37 160 912 032

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FINANCIALS AT A GLANCE

$ (0

00)

2012–2013 2013–2014 2014–2015

2500

2000

1500

1000

500

0

Project and laboratory income

Interest and other

$ (0

00)

2012–2013 2013–2014 2014–2015

18,000

16,000

14,000

12,000

10,000

8000

6000

4000

2000

0

Figure 6 AEGIC Non-member Annual Income ($000)

Figure 7 AEGIC Net assets ($000)

$ (0

00)

2012–2013 2013–2014 2014–2015

7000

6000

5000

4000

3000

2000

1000

0

Employee benefits Project expenses Consultancy Travel Premises Directors fees Other expenses

Figure 5 AEGIC Annual expenses ($000)



AUSTRALIAN EXPORT GRAINS INNOVATION CENTRE LTD (LIMITED BY GUARANTEE)ABN 37 160 912 032

FINANCIAL STATEMENTS 27 ANNUAL REPORT 2014–2015FINANCIAL STATEMENTS 27

Statement of profit or loss and other comprehensive income 28

Statement of financial position 29

Statement of changes in equity 30

Cash flow statement 31

Notes to the financial statements 32

Directors’ declaration 38

Auditors’ declaration of independence 39

FINANCIAL STATEMENTS




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Statement of profit or loss and other comprehensive incomeFor year ended 30 June 2015

Note2015

$2014

$

Revenue

Member contributions 2 10,710,000 9,890,000

Other revenue 3 2,256,605 1,321,177

Total revenue 12,966,605 11,211,177

Expenses

Accountancy expenses 1,279 5,471

Audit fees 5 15,000 24,067

Legal fees 10,600 15,030

Consultancy 410,272 471,885

Directors’ fees 191,998 224,500

Other Director expenses 72,591 39,951

Premises 117,920 94,104

Employee benefits expenses 4,182,762 4,002,570

Depreciation 52,721 23,305

Project expenses 597,910 843,901

Travel 379,525 221,987

Other expenses 944,928 377,032

Total expenses for the period 4 6,977,506 6,343,803

Current year surplus before income tax 5,989,099 4,867,374

Income tax expense 1(c) – –

Net current year surplus 5,989,099 4,867,374

Other comprehensive income for the year – –

Surplus member contributions transferred to equity 12 5,989,099 4,867,374




FINANCIAL STATEMENTS 29

Statement of financial positionAs at 30 June 2015

Note2015

$2014

$

Assets

Current assets

Cash and cash equivalents 6 15,041,299 11,255,682

Trade and other receivables 7 2,953,587 207,838

Total current assets 17,994,886 11,463,520

Non-current assets

Property, plant and equipment 8 168,129 106,535

Total non-current assets 168,129 106,535

Total assets 18,163,015 11,570,055

Liabilities

Current assets

Trade and other payables 9 968,252 413,856

Financial facility 10 15,788 35,540

Provisions 11 138,519 69,302

Total current liabilities 1,122,559 518,698

Total liabilities 1,122,559 518,698

Net assets 17,040,456 11,051,357

Equity

Retained member surplus contributions 12 17,040,456 11,051,357

Total equity 17,040,456 11,051,357



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Statement of changes in equityFor year ended 30 June 2015

$

Comprehensive income

Balance at 1 July 2013 6,183,983

Surplus for the year attributable to members of the entity 4,867,374

Total comprehensive income attributable to members of the entity 4,867,374

Balance at 30 June 2014 11,051,357

Surplus for the year attributable to members of the entity 5,989,099

Total comprehensive income attributable to members of the entity 5,989,099

Balance at 30 June 2015 17,040,456





Cash flow statementFor year ended 30 June 2015

Note2015

$2014

$

Cash flows from operating activities

Member contributions (in cash) 8,151,000 8,349,000

Payments to suppliers and employees (5,577,875) (5,344,508)

Proceeds from operations 943,017 1,050,275

Net cash provided by operating activities 3,516,142 4,054,767

Cash flows from investing activities

Interest received 396,623 313,774

Payments for property, plant and equipment (127,148) (129,840)

Net cash provided by investing activities 269,475 183,934

Net increase in cash held

Cash at beginning of financial period 11,255,682 7,016,981

Cash at end of financial period 6 15,041,299 11,255,682

Net increase in cash held 3,785,617 4,238,701



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Notes to the financial statementsFor year ended 30 June 2015

1 Statement of Significant Accounting Policies

This financial report is a special purpose financial report prepared in order to meet the needs of Members and which has been prepared specifically for distribution to Members in accordance with the Company’s Constitution.

The Directors have determined that the Company is not a reporting entity.

The financial report has been prepared in accordance with the Corporations Act 2001 and the disclosure requirements of Australian Accounting Standards:

AASB 101: Presentation of Financial Statements;

AASB 107: Statement of Cash Flows;

AASB 108: Accounting Policies, Changes in Accounting Estimates and Errors;

AASB 1031: Materiality;

AASB 1048: Interpretation of Standards; and

AASB 1054: Australian Additional Disclosures.

The financial report is prepared on an accruals basis and is based on historical costs and does not take into account changing money values except where specifically stated.

The following material accounting policies have been adopted and it is intended, in the absence of fundamental change, that the policies be applied consistently in subsequent reporting periods.

(a) Reporting Period

The financial statements are for the reporting period 1 July 2014 to 30 June 2015.

(b) Comparative figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

(c) Income Tax and Payroll Tax

No provision for income tax has been raised as the Company has received a private ruling from the Australian Taxation Office, valid until 30 June 2016, confirming that AEGIC is exempt from income tax under section Item 1.3 of section 50-5 of the Income Tax Assessment Act 1997.

The Company has also received a ruling from WA State Revenue that AEGIC is exempt from state payroll tax.

(d) Going Concern

This report has been prepared on a going concern basis. Unless there is an earlier significant material adverse event, the Board does not expect there to be a need to change this policy prior to the 2015–2016 financial year.

(e) Revenue Recognition

Revenue for services rendered is recognised and accrued during the period it is derived and shown in the accounts net of Goods and Services Tax (GST). Interest income is accrued and recognised during the period it is derived using the effective interest method. Revenue from contractual arrangements is recognised and accrued in accordance with the terms of the contract. Member contributions received as per the Members’ Agreement are accounted for as revenue in the financial year in which they are received. Surplus contributions can be utilised for future undertakings and new research, development and extension (R,D&E) programs commenced by AEGIC. This does not operate to prevent agreed contributions being deferred or continued from year to year within new programs.

(f) Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value as indicated, less, where applicable, accumulated depreciation and any impairment losses.

(g) Depreciation

The depreciation rates applied to each class of depreciable assets are the rates of depreciation allowed by the Australian Taxation Office as a deductible expense for a taxable company. These rates have been adopted on a straight line basis (computers three years, plant and equipment 10 years, software two years).

(h) Premises

The Company has access to office and other premises under a non-assignable License to Occupy granted to AEGIC in accordance with the Members’ Agreement for the term of the Agreement. The license fee is fully expensed as incurred. The license can be terminated by AEGIC on six months’ notice. As such no liability has been raised for the unexpired term of the license.





(i) Employee Entitlements

Statutory superannuation contributions are made by the Company to a complying fund of the employee’s choice. If no choice is made the Company contributes the statutory superannuation contribution amount into a superannuation investment account in the employee’s name with a complying industry superannuation fund.

Provision is made for the Company’s liability to the reporting date for employee entitlements arising from services rendered by employees.

The Company complies with the Long Service Leave Act 1958 (WA) for its long service leave policy and expense will be brought to account when the employee reaches ten years of continuous service or a proportionate entitlement on termination after seven years.

(j) Accounts Payable and Other Payables

Accounts payables and other payables are recognised when the Company becomes obliged to make future payments resulting from the purchase of goods and services.

(k) Economic Dependency

AEGIC is dependent on its Members for the majority of its revenue used to operate the business. At the date of this report the Board of Directors has no reason to believe the Members will not continue to support AEGIC.

(l) Directors Remuneration

The number of Directors whose remuneration as Directors fell within the following bands for 2014–2015 are:

2015 2014

Nil–$40,000 3 5

$40,001–$80,000 1 1

As required by the Members’ Agreement the Company, through Deeds of Indemnity, Insurance and Access has indemnified all Directors for any liabilities incurred as a Director, other than liabilities to the Company or a related body corporate, or liabilities arising out of conduct involving lack of good faith. A Directors’ and Officers’ insurance policy is maintained.



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2 Member Contributions

(a) Summary of member contributions

3 Other Revenue

(b) Statement of member contributions including DAFWA actual in-kind contributions

2015$

2014$

GRDC (cash) 5,150,000 5,000,000

DAFWA (cash) 3,260,000 2,590,000

DAFWA (in kind) 2,300,000 2,300,000

Total members contributions 10,710,000 9,890,000

2015$

2014$

Project income 1,144,914 –

Laboratory services 690,235 789,757

Rental income 11,335 16,360

Interest 393,479 326,727

Other sundry income 11,175 188,333

Recoupments 3,213 –

Employee contributions 2,254 –

Total other income 2,256,605 1,321,177

2012$

2013$

2014$

2015$

Total$

GRDC (cash) 470,000 5,180,000 5,000,000 5,150,000 15,800,000

DAFWA (cash) 700,000 1,250,000 2,590,000 3,260,000 7,800,000

DAFWA (in kind) 711,960 2,048,333 2,453,895 1,796,426 7,010,614

Total 1,881,960 8,478,333 10,043,895 10,206,426 30,610,614

DAFWA contribution variance to carry forward 158,040 51,667 (153,895) 503,574 559,386

Cumulative total 158,040 209,707 55,812 559,386 559,386





7 Trade and Other Receivables

2015$

2014$

Petty cash 214 500

ANZ business account 11,139 553,277

ANZ interest bearing account 11,043,607 10,698,687

CBA cheque account 1,010,000 –

CBA online saver account 2,974,000 –

Foreign cash 2,339 313

ANZ debit card – 1,956

Load & go card – 949

Total cash and cash equivalents 15,041,299 11,255,682

2015$

2014$

Current

Trade and other receivables 2,826,427 173,039

Prepayments 113,534 34,799

Other assets (i) 13,626 –

Total trade and other receivables 2,953,587 207,838

(i) Other assets include work in progress not yet invoiced

4 Expenses

There has been a considerable increase in expenses in 2014–2015 due to the ramping up of projects as defined in the Five-Year Business Plan.

5 Auditors’ Remuneration

Auditor’s remuneration for auditing the 2014–2015 financial statements was $15,000 which has been accrued in respect of 2014–2015. The auditor’s fee for the year ended 30 June 2014 was not brought to account in that period and was paid in the year ended 30 June 2015. The auditors did not receive any other benefits or provide any other services.

6 Cash and Cash Equivalents

Reconciliation of cash

Cash at the end of the financial period as shown in the cash flow statement is reconciled to the related items in the Statement of Financial Position as follows:



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8 Property, Plant and Equipment

10 Financial Facility

11 Provisions

9 Trade and Other Payables

2015$

2014$

Plant and equipment — at cost 244,156 129,840

Less provision for depreciation (76,027) (23,305)

Total property, plant and equipment 168,129 106,535

2015$

2014$

Current Liabilities

Credit card facility 15,788 35,540

Total financial facility liabilities 15,788 35,540

2015$

2014$

Current

Provision for annual leave 138,519 69,302

Total provisions 138,519 69,302

2015$

2014$

Current

Trade creditors 104,430 33,065

Goods and services tax payable 580,361 7,241

PAYG payable 92,999 43,952

Accrued expenses 29,603 329,598

Unearned income 160,859 –

Total trade and other payables 968,252 413,856





12 Equity

Clause 2.2 of the Company’s Constitution states “If the Company is wound up each Member of the Company undertakes to contribute to the assets of the Company up to an amount not exceeding $10.00 per Member for payment of the debts and liabilities of the Company including the costs of the winding up. This undertaking continues for 1 year after a Member ceases to be a Member of the Company.” The Company is holding a signed Guarantee of payment from each member as evidence of their obligation in the event of the Company being wound up amounting to $20.

The surplus in relation to unspent contributions received from members in a given year can be utilised from year to year within new programs and is not distributable among members.

13 Events after the Balance Sheet Date

There are no other significant events which the Board of Directors are aware of that have occurred subsequent to the period ended 30 June 2015 until the date of signing this financial report.

14 Contingent Liabilities and Commitments

As at 30 June 2015, the Company does not have any contingent liabilities or commitments.

15 Company Details

Australian Export Grains Innovation Centre Limited3 Baron-Hay CourtSouth Perth 6151Western Australia.



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Directors’ declaration

The Australian Export Grains Innovation Centre Ltd (AEGIC) is a Company limited by guarantee, incorporated and domiciled in Australia with the ABN 37 160 912 032.

The Directors have determined that the Company is not a reporting entity and that this special purpose financial report should be prepared in accordance with the accounting policies outlined in Note 1 to the financial statements.

The Directors of the Company declare that:

The financial statements and notes, as set out on pages 11 to 21 present fairly the Company’s financial position as at 30 June 2015 and its performance for the year ended on that date in accordance with the accounting policies described in Note 1 to the financial statements; and

In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

Terence Enright Matthew Macfarlane CHAIRMAN DIRECTOR

Signed on this day 24 of August 2015







AEGIC has 37 projects in the 2015–2016 year. Most of AEGIC’s projects are multi-year research projects which are continuing, however seven are new this year and four are directly funded by the the Grains Research and Development Corporation (GRDC).

AEGIC research projects 2015-2016

• Independent market information and analysis

Appropriate and effective competitive response requires credible and timely information from both destination markets and competing origins. These activities will ensure that AEGIC’s efforts are well directed and can be fed back to both industry bodies and growers themselves.

• Market intelligence for Theme 1 (GRDC Project)

In order to deliver highest value to growers and the industry, GRDC (and AEGIC) must understand the requirements and dynamics of current domestic and export grain markets for feed and food grains.

• Opportunities for Australian wheat in China

AEGIC is increasing its knowledge of the quality and functionality of the end use of Chinese wheats. Chinese research and wheat buyers understand the available classes of Australian wheat and suitability for different applications increasing export opportunities for higher quality Australian wheat to China.

• Value of barley characteristics for the China market

Value capture by producers is enhanced through improving market signals; rapid market adoption of new varieties, identifying the most important characteristics sought by the market for the differentiation of Australian barley and to support the varietal accreditation program and direction for GRDC national research priorities in export barley quality to meet market requirements.

• Creating export opportunities and value for Australian milling oats in the China market

Value capture by oat growers will be enhanced through increased demand (and hence price competition) in China and Asia for Australian oats through improved understanding of market and their quality requirements and technical extension to market on use and value of Australian food grade oats.

• Market requirements and opportunities — South East Asia (wheat and baking)

Value capture by Australian wheat growers will be enhanced by improved access to premium-paying wheat market segments and increased competitiveness against high priced wheats from North America and cheaper, filler wheats, from the Black Sea region and India.

• Market requirements and opportunities — Philippines

Philippines flour mills and end users will be better informed of the value of Australian wheat resulting in increased demand for the grains industry.

• Market requirements and opportunities for export grains in MENA

Investigate requirements and opportunities for Australian export grains in MENA to provide recommendations to the Australian export grains industry and prioritise AEGIC research, through the use of a competitor analysis of the Black Sea, and a MENA action plan by June 2016. Education and technical research will then be targeted to deliver highest value to growers and other stakeholders.

STRATEGIC MARKET INTELLIGENCE, REQUIREMENTS AND OPPORTUNITIES (SMIRO)



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Australian Wheat for Asian baking

PROJECT 1• Identifying new bread making models by measuring

dough rheology and defining dough development

Positive growth forecasts for higher value baked goods consumption in many SEA countries provides an opportunity for Australian wheat growers to capture greater market share in the SEA baking sector, increasing the demand for Australian wheat for baking.

PROJECT 2• Balanced vs unbalanced dough properties — In market

assessment of acceptability of Australian wheat with ‘unbalanced’ dough properties

Providing quantitative information for Australian wheat classification to understand our market’s acceptance of unbalanced dough properties.

PROJECT 3• Understanding the interactions and impact of different

ingredients on dough mixing and end product quality for bread

Benefits to the grains sector include national coordination, improved collaboration and greater effectiveness and efficiency in the Australian wheat industry. This project will focus on the delivery of market outcomes from research on the use of Australian wheat for the baked bread segment in South East Asia.

• Evaluating the quality of competitor varieties in Australian wheat export markets (GRDC project)

Potential to increase market value of Australian wheat through the following: identification of high value markets where it has an advantage; gathering information and data to support Australian wheat when competing with other sources; and providing evidence based advice for the shaping of Australian wheat classes and for the improvement of Australian wheat varieties.

• Strengthening Australia’s export grain relationship with Japan and Korea

This project will work to maintain two highly valued markets with consistent import requirements and a willingness to pay a premium for Australian wheat. This project will open up new hard wheat opportunities, supporting growers of AH, APW and Durum.

NATIONAL WHEAT QUALITY RESEARCH AND INNOVATION (NWQRI)

• Baking and noodle making quality — MixoLab and the Auto Solvent Retention Capacity SRC tests

Benefits to the grains sector include national coordination; improved collaboration; greater effectiveness and efficiency for the testing of new wheat varieties and predicted end product quality.

• Ramen Noodles – Australian Hard (APH and AH) varieties

Benefits to the grains sector include national coordination, improved collaboration and greater effectiveness and efficiency by the Australian wheat industry in delivery of market outcomes from research on the use of Australian wheat for Ramen noodles in Japan.

• Cracker wheat — possibilities of using downgraded noodle wheat or new noodle lines/varieties to produce high quality cracker biscuits for export markets

New market opportunities could exist for up to 50,000 tonnes of noodle wheat which is typically downgraded and often price discounted by as much as $20 per tonne. May provide increased opportunity to review and refine existing wheat classes improving market stability or increased demand. This will reduce the risk to growers of noodle wheat.

• Grain Protein Professor (Murdoch University)

The initiative will increase Australia’s grain-protein scientific capacity and capability and provide the vital link between research and industry to ensure Australia’s export grains remain the product of choice for our existing and emerging export markets.

RESEARCH PROJECTS 2015–2016 41 ANNUAL REPORT 2014–2015





MALTING AND BARLEY QUALITY AUSTRALIA (MBQA)

• Malting/brewing technology

Ensure that Australian malt and malting barley continues to attract a premium and remains the preferred option in international markets.

• Pilot Malting Australia — Innovative Technology Package

Shorter time to market for new varieties and better export market opportunities for those varieties delivering returns directly to growers.

• Malting quality innovation (new breeding traits)

Reduced risk of malting barley variety downgrades or discounts, and improved grower return through premium malting quality varieties.

NATIONAL OAT QUALITY RESEARCH AND INNOVATION

• Increasing value and competitiveness of Australian Export Oats

The Asian style oat foods are a new and growing end-use for Australian oats. This project will investigate these new products and identify the preferred oat quality and functionality for their use. A secondary objective of this project is to build technical capacity for the Australian oat industry in oat chemistry and end-product functionality, to help ensure that our industry remains in the key export markets.

ECONOMICS AND BUSINESS ANALYSIS

• Supply chain and value capture opportunities and mechanisms

Annually provided economic assessments of the supply chains of Australia’s grain export competitors led to greater (or less loss of) market share due to organisational change and industry supply chain investments in Australia, influenced by AEGIC’s reports and actions.

RESE

ARC

H P

ROJE

CTS

2015

-20

16

SUPPLY DYNAMICS

• Historical analysis of crop performance

Governments now require more rigorous assessments of the value of research, development and extension. The AEGIC STIN model measures crop water use efficiency, yield variability and crop yield trends temporally and spatially across the Australian grainbelt and are unique measures of where productivity is increasing and pressures on the supply chain will occur in coming years.

• Operational crop surveillance and yield forecasting for the Australian Supply Chain

Grower profitability and supply chain efficiencies depend on the ability to accurately respond to developing seasonal conditions. For farmers, colour maps of soil moisture and yield rankings assist in their management and marketing decisions, while accurate crop production estimates within the supply chain using advanced models integrating satellite imagery, water balance, extreme temperatures and management variables will directly lower supply chain costs for growers. Ultimately, the optimal allocation of resources would translate directly into enhanced grower profitability, pre- and post-gate.

• Accurate integration of new climate forecasting technologies into yield forecasting for Australian grains and the supply chain

The integration of new seasonal forecasting technologies into regional crop yield potentials translates moisture and climate signals directly into relevant information that growers and the supply chain can respond to. A parallel AEGIC opportunistic drought warning system and long-lead ENSO prediction scheme (of El Niño and La Niña events) will forewarn growers of periods where there is a high likelihood of extreme climate events and enable better risk mitigation strategies on a long-lead basis. Longer term assessments of the impact of climate change on regional production will also be invaluable for future planning of storage and transport needs.

Wat

er u

se e

ffici

ency

(%

)

Water use efficiency forAustralia 1980–2014

70

60

50

40

30

20

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

*

* 2014 uses preliminary data

W

W

W

E

E

E

EE

NE

NE

AustraliaEastern AustraliaWestern AustraliaEl Niño droughtWetNon-El Niño drought

W

E

NE

Australian grainbelt and are unique measures of where productivity is increasing and pressures on the supply chain will occur in

Operational crop surveillance and yield forecasting for

Australian grainbelt and are unique measures of where productivity


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Documents

AEGIC AR 2014 15BINTRODUCTION 3 ANNUAL REPORT 2014 2015 Australian Export Grains Innovation Centre CONTENTS Our values and story 4 Chairman’s report 6 2014–2015 …