ANNUAL REPORT

Transcription

1 ANNUAL REPORT

2 CONTENTS Chairman s review 2 Global context 3 CEO s review 4 Program 1 Designer Forages 6 Program 2 Animal Improvement 10 Education and training 14 Communications and industry engagement 18 Summary of performance and impact 20 Corporate management 22 Governance 25 Statutory financial accounts Publications 44 Glossary and abbreviations 50 ESSENTIAL PARTICIPANTS SUPPORTING PARTICIPANTS PROJECT PARTNERS

3 is creating a positive future for Australian dairy farmers and companies that supply products and services to the dairy industry through transformational innovations. REALISED BENEFITS Australian dairy farmers are now using genomics extensively: 58 of the 100 most elite bulls in Australia are young genomic sires (bulls assessed with genomics) 22% of semen sold during was from young genomic sires 83% of elite bulls now have genomic information included in the assessment of their merit 92% of semen sold in Australia is from the Holstein and Jersey breeds, both of which have genomic breeding values (ABV(g)s). Sources: NHIA Annual Semen Survey , internal analysis of ADHIS August 2013 ABVs. Innovations in the CRC s forages program are now in use to breed improved cultivars. Benefits will be measured upon commercial release. PROJECTED BENEFITS An increase in the productive value of dairy farms through pastures with better feed quality, yield and persistence Double the rate of genetic gain in Australian dairy herds, through more reliable genomic breeding values, and a better balance between fertility, production and feed conversion efficiency Technological innovations efficiently translated to direct value for dairy farmers, through partnerships with commercial organisations The ongoing capacity for further bioscience innovations through the support and training of new scientists, from forging global science linkages, and from the rapid adoption of new technology as it becomes available. A formal assessment calculated $323 million of projected benefits from improved pastures and cattle (benefits accumulated through to ). However, many technologies will only be partially used by farmers at this time, and substantial additional benefits are likely in future years (e.g. benefits will more than double over the subsequent five years). DELIVERING INNOVATION TO A MAJOR AUSTRALIAN INDUSTRY Dairy contributes $13 billion to Australia s GDP Australia has 6700 dairy farm businesses Dairy provides jobs for more than 140,000 Australians on farms, in factories and in service industries. 1

4 CHAIRMAN S REVIEW On behalf of Dairy Futures Cooperative Research Centre s Board of Directors, I am pleased to report the CRC has received a very positive Major Performance Review by the Commonwealth and has entered the second half of its life in a sound financial position. The CRC s Board and management have defined a clear strategic vision to put world-leading bioscience to work on Australian dairy farms and in commercial pasture and animal breeding programs. Notwithstanding immediate challenges, Australian dairy farmers have shown great willingness to embrace this vision. This year has been particularly volatile, with dairy farmers facing low milk prices and significant increases in operating costs. Australian milk production fell by 3% during the year compared with , and by as much as 6% in some regions. It is gratifying that, despite the challenging times, most farmers continue to see the CRC s research as relevant to their business, and continue to support our research. Participation in the CRC continues to represent a broad cross-section of dairy industry organisations. We are well aware it is the strength of our industry partnerships that will allow us to deliver the benefits to farmers and we continue to work closely with our commercial partners to fine-tune the scope and scale of our research to match industry needs. Our participants active contribution will become even more important in the final years of the CRC as we increase our focus on the utilisation of research. Strong partnerships are also important to support bioscience research beyond the term of this CRC. During the year we expanded our global reach across our research programs. Important developments have included a joint research project with leading international dairy improvement company CRV for accelerated dairy cattle genomics, and a new agreement for the CRC to join 14 international organisations in the Global Dry Matter Intake initiative to develop genomic breeding values for feed intake. Our forages program comprises a broad spectrum of activities based on our genomics platform, ranging from new genetic tools to select elite plants through to new ways to measure pasture performance. While all of these will bring industry benefits, the Board considers our work in genetically modified (GM) pasture to offer the greatest economic benefit to dairy farmers if social licence to operate is sustained. Our most advanced lines of ryegrass have progressed well during the year (details are provided on page 8 of this report). We are keenly aware of the global context for our research, and international trends are promising. Use of GM plants is growing in a diverse range of economies throughout the world, as illustrated on the page opposite in Europe, for example, millions of people are consuming meat, milk and eggs every day from animals fed on GM feed. During the year, the CRC comprehensively reviewed its projected impact in preparation for the Commonwealth s performance review. The Board remains confident the CRC will deliver the projected value of more than $320 million to Australian dairy farmers by the original timeline of However, the CRC s true impact will be realised over a longer timeframe, and the Board expects the CRC s impact to reach more than $800 million by The CRC s record of achievement and its vision are due in large part to outstanding work by the CEO, Dr David Nation and the Chief Scientist, Professor German Spangenberg, ably supported by program leaders, the executive team and head office staff. I would also like to thank my fellow Board members for their contributions and insight. In closing, I would like to thank the CRC s key partners, Dairy Australia and the Department of Environment and Primary Industries Victoria, for their continuing support as we work towards a legacy of science-based innovations that will have a lasting impact on the dairy industry and Australia. DR MIKE GINNIVAN CHAIRMAN 2

5 GLOBAL CONTEXT A major trend within both CRC programs Designer Forages and Animal Improvement is the expansion of global collaboration and a greater emphasis on the application of new innovations in global food consumption. This page illustrates these trends by profiling the CRC s international linkages with both commercial and research collaborators, and illustrates the scale of current use of genetically modified (GM) technology in the food supply chain. DAIRY FUTURES CRC S INTERNATIONAL LINKAGES FINLAND UK IRELAND BELGIUM FRANCE DENMARK NETHERLANDS GERMANY SWITZERLAND ITALY CANADA USA CHINA BRAZIL ARGENTINA NEW ZEALAND GLOBAL TRENDS IN FOOD CONSUMPTION USE OF GM GM crops have been part of the supply chain for nearly 20 years and are contributing to economic growth, food security and overcoming nutritional deficiencies. A few recent observations about food consumption are: Supermarkets across Europe, North America, South America and parts of Asia routinely stock meat, milk and egg products where the animals have Examples include: GM rice and consumed GM feed. bananas with increased iron content Recent media analyses suggest that 70 80% of grocery items in US supermarkets contain GM ingredients. The three major staple foods (rice, wheat and corn) all have extensive GM programs either in commercial use or the final stages of testing. There are significant humanitarian projects to overcome malnutrition through GM fortification of staple foods. to combat anaemia, and rice with increased beta-carotene to alleviate vitamin A deficiency and blindness. Comprehensive reviews by food safety regulators have confirmed the safety of GM technology in the food supply chain. The food safety regulator in Australia (FSANZ) has now approved more than 55 GM food products as being safe for consumption and has also set standards for labelling foods containing GM. 3

6 CEO S REVIEW The year has been pivotal in setting up the CRC s lasting legacy of innovation using bioscience. We have consolidated efforts and clarified directions across research programs, realised benefits in terms of the widespread industry adoption of genomics, and developed a plan to sustain a cooperative research effort after the end of the current Commonwealth Agreement. This year marked the CRC s midpoint, prompting considerable activity to analyse and review performance. A wide cross-section of CRC staff and external consultants contributed to a review of the CRC s Impact Tool. That process confirmed that the CRC is likely to achieve its projected impact over the next 10 years, and substantially exceed that impact over a longer time frame. The CRC now has a transition plan, which will be continually updated to reflect the desire to sustain a cooperative research effort and to confirm arrangements that persist after the end of the current Commonwealth Agreement. It is clear there is ongoing potential to keep innovating in dairy bioscience and many participants have an appetite to continue investment. A formal review of the CRC s performance took place in May The independent review panel recognised a wide range of CRC activities that deserved commendation, including cutting-edge new science, an excellent education program and strong relationships with industry. The review made eight recommendations, which the CRC s Board have considered. Further detail on how the CRC will implement the recommendations is provided in the Corporate Management section of this report. Both the CRC s Designer Forages and Animal Improvement research programs are performing strongly. We have now built a core set of projects within each program that integrate different innovations into a larger commercial or industrial outcome while retaining and managing other high-value projects. This has been done in a manner that continues to stimulate crossover of skills and ideas between the forages and animals programs. The major goal of the Designer Forages program is to concurrently deliver four streams of new innovations that partner and are now in pre-commercial testing. Ongoing studies into the genetic modification of pasture plants have produced high-value breeding lines. A superior high-energy ryegrass has now entered a contained breeding program and white clover plants have been produced with multiple improved traits. Bioscience: the ability to measure biological variation at an industrial scale and with remarkable precision, relying on massive computing power to create practical applications. substantially increase the quality of new pasture varieties. The first stream is the improved selection of advanced plants through both genomic tests and a range of high-throughput and low-cost performance records. The second stream is the use of multiple new endophytes with novel roles in plant performance. The third stream is the use of elite transgenic events to create an immediate increase in both nutritive value and yield. The fourth stream is to maximise hybrid vigour in ryegrass by exploiting the genetic basis for its self-incompatible nature in breeding. As the program builds towards this major goal it continues to produce commercial plant breeding innovations. The test to map the genetic difference of ryegrass cultivars has been refined, reducing the test cost by 80%. Ryegrass and tall fescue endophytes that have passed all laboratory test phases have been delivered to a commercial There was an organisational change due to the withdrawal of PGG Wrightson from the Designer Grasses breeding projects. PGG Wrightson has made a long-standing contribution to these projects, and the CRC appreciates their efforts to allow the grass breeding program to continue as a CRC activity. The Animal Improvement program completed the delivery of animal genomic technology and made further advances through the year. Examples include the first use of genomics for the Jersey breed during August 2012 and ongoing improvement in the way pedigree information is used to complement information from DNA markers. Joint efforts with industry partners more than doubled young sire testing during The rapid impact of genomic technology was recognised with a CRC Association Award for Excellence in Innovation in

7 s work programs address a fundamental business imperative for dairy farmers: making a profit from the biology of growing grass and producing milk. An ongoing focus on selecting more fertile cows led to the launch of a new method to calculate fertility breeding values during April This is one of many instances of Dairy Futures CRC researchers working with the Australian Dairy Herd Improvement Scheme (ADHIS) to improve the genetic evaluation of Australian dairy cattle. Current research activity in the Animal Improvement program is designed to continue three areas of existing strength and to converge technologies to generate additional impacts. The largest research activity involves developing a second generation of genomic technology that utilises information from the entire DNA sequence (whereas current technology is based on limited markers distributed across the DNA sequence). Additional activities include use of stem cell and advanced reproductive technology to accelerate genetic gain, and the expansion of current activities related to cows feed intake and efficiency to select cows with reduced methane emissions and more tolerant of heat stress. Education and training remains a high priority. Although the CRC has already recruited enough students to satisfy the Commonwealth Agreement, recruitment is continuing. An active program of professional development opportunities and industry mentoring is equipping our students to deliver bioscience with a clear understanding of commercialisation challenges and dairy farmer needs. It is very pleasing that the quality of our education and training program was recognised as best practice by the performance review and shortlisted for the CRC Association Award for Excellence in Innovation. s work programs address a fundamental business imperative for dairy farmers: making a profit from the biology of growing grass and producing milk. We have maintained a singular purpose to generate high-value innovations to address that imperative. Our relocation during the year to the new AgriBio, Centre for AgriBioscience is allowing us to showcase the scale of effort being undertaken. I would like to acknowledge the growing list of people who actively contribute to the success of the CRC: the executive team, the staff that span across all participants and project partners, the rapidly expanding group of global collaborators, and the students and their mentors who play such a vital role. Nearly all projects are now in a position to demonstrate their success and this has created an energetic and buoyant work environment that supports management in delivering short-term value from innovations while establishing our innovation legacy. DR DAVID NATION CHIEF EXECUTIVE OFFICER 5

8 PROGRAM 1 DESIGNER FORAGES The year marks a significant shift in progress for the CRC s Designer Forages program. Having built a comprehensive understanding of the genetic and nutritional differences of pasture plants, researchers are now applying the knowledge to create outcomes for Australian dairy farmers. The CRC s research is leading towards an entirely new breeding scheme for pasture plants and will deliver a more nutritious, productive and resilient forage base. PROGRAM LEADERS Prof. John Forster Program 1 Research Leader Prof. German Spangenberg Chief Scientist, Program 1 Utilisation Leader ACHIEVEMENTS Delivered multiple tranches of new endophytes to commercial partners Actively selected elite plants based on nutritive quality, with a major emphasis on plants with a higher energy content Implemented a new breeding scheme design for field testing elite Italian and perennial ryegrass plants selected using genomics Narrowed the list of genes likely to be responsible for self-incompatibility in ryegrass Identified the two highestperforming transgenic lines of ryegrass plants, confirmed they meet all required technical specifications and commenced breeding activities Commenced a pilot study with commercial partners to select elite plants within a cultivar Developed economic models to evaluate new innovations for both ryegrass and white clover Completed a draft DNA sequence that contains all the genes that constitute a ryegrass plant Characterised entire DNA sequences for approximately 70 endophyte strains. 6

9 BETTER PASTURES THROUGH GENOMIC SELECTION The CRC has now demonstrated that genomic selection in ryegrass breeding could accelerate genetic progress to as much as three times the current rate, and scientists have developed the tools to realise the gains. Researchers have selected and bred elite Italian and perennial ryegrass plants to create a unique and elite plant nursery. Evaluation of 16,300 plants over eight months showed that some plants compared equally or better than the original cultivars their breeding parents in terms of yield, performance and quality. This has provided confidence that elite plants can be identified to rapidly enhance quality traits in breeding programs. Building on this work, the CRC has developed a breeding scheme to achieve single-trait improvement in a cultivar, without eroding other traits, in around half the time required by conventional breeding. The CRC is actively working with commercial partners to align these science outputs with commercialscale plant breeding practices. Researchers have now completed a draft DNA sequence containing all the genes that constitute a ryegrass plant and have examined the expression of these genes in 19 parts of the plant. The scale and novelty of this work mean the CRC now has a critical new source of information for selecting plants with improvements for traits such as yield, persistence and tolerance of a range of environmental stresses. In parallel, the research team has also refined new methods for measuring key aspects of nutritive quality to increase the speed and reduce the cost of testing. In other achievements, the advanced cultivar catalogue developed last year has been refined into a version that reduces testing costs by 80%. Research into self-incompatibility in ryegrass has continued, and researchers have narrowed the field of candidate genes believed to be responsible for this trait. Testing will continue with the aim of isolating the genes responsible for self-incompatibility to create novel hybrid cultivars, potentially more than doubling genetic gain compared with conventional breeding. u LEFT: Ryegrass plants in a glasshouse study RIGHT: Dissection of a ryegrass plant into roots, pseudo-stems and leaves 7

10 DESIGNER GRASSES AND LEGUMES DESIGNER ENDOPHYTE GRASS ASSOCIATIONS Pairing plants with the most compatible endophytes is an essential part of commercial pasture grass breeding programs. During the CRC delivered three tranches of new endophytes for commercial testing (making a total of four tranches since the project started). These endophytes have been successfully inoculated into both perennial ryegrass and tall fescue. Testing has confirmed they retain their animal-safe and pest-deterrent properties without negatively affecting the growth of the host plant. Researchers have now characterised entire DNA sequences of approximately 70 endophyte strains. Collectively, these strains represent all the diversity observed for perennial ryegrass and tall fescue. This work contributes to a detailed understanding of sources of genetic variance in pasture grass endophytes. The CRC is using genetic modification techniques to increase the energy content in perennial ryegrass that grazing animals can utilise. The modification brings together two fructan genes with a ryegrass light switch (a gene promoter that responds to sunlight) so the plant produces more fructan in the leaf blade the part of the plant primarily grazed by cattle. After many rounds of selection and subsequent testing of thousands of plants in glasshouses and in the field, researchers have identified two elite lines that deliver an increase in metabolisable energy of megajoules per kilogram compared with the plants from which they were derived. Glasshouse trials comparing 2000 seedlings from the elite events have confirmed the high-energy trait remains stable in subsequent generations. The CRC has estimated the value of the high-energy trait in two contrasting dairy systems. Based on this modelling, the high-energy ryegrass trait has the potential to increase on-farm profitability by at least $200 per hectare per annum. Research into key pasture legumes has continued. The CRC has combined virus resistance, aluminium tolerance and herbage yield enhancement into a single source and inserted the genes into an elite white clover cultivar using new techniques. These plants are currently undergoing glasshouse testing. Research to refine the application of this approach to lucerne (alfalfa) has continued. student Samira Rahimi-Ashtiani and researcher Dr Stephen Panter 8

11 PROJECT MANAGERS Prof. John Mason DEPI Victoria and La Trobe University Dr Noel Cogan DEPI Victoria Dr Kathryn Guthridge DEPI Victoria Mr Pieter Badenhorst DEPI Victoria Prof. Kevin Smith University of Melbourne Assoc. Prof. Joe Jacobs DEPI Victoria AUSTRALIAN RESEARCH PARTNERS Department of Environment and Primary Industries Victoria, Biosciences Research Division Department of Environment and Primary Industries Victoria, Future Farming Systems Research La Trobe University University of Melbourne COMMERCIAL / INDUSTRY PARTNERS Dairy Australia Ltd New Zealand Agriseeds Ltd Royal Barenbrug Group Heritage Seeds Pty Ltd PGG Wrightson Genomics Ltd INTERNATIONAL COLLABORATORS Embrapa, Brazil Lanzhou University, China National Southern University, Argentina University of Buenos Aires, Argentina University of Sao Paulo, Brazil 9

12 PROGRAM 2 ANIMAL IMPROVEMENT The CRC s Animal Improvement program has now provided the Australian dairy industry with a complete pipeline of innovation. Genomic technologies are benefiting farmers today, bold and novel research projects are underway, and global partnerships are keeping Australia at the forefront of international developments. The CRC s researchers are delivering powerful genomic selection tools into the hands of dairy farmers. Working closely with industry partners in Australia and overseas, researchers are developing a deep understanding of entire genome sequences, with the goal of pinpointing the real sources of genetic variation for traits critical to industry profitability. PROGRAM LEADERS ACHIEVEMENTS Developed genomic breeding values (ABV(g)s) for Jerseys, which were released in August 2012, with similar reliabilities to those of Holsteins Commenced a joint research project with leading international cattle improvement organisation CRV, which aims to increase the reliability of genomic breeding values by at least 10% by 2015 Developed a better model for calculating the fertility Australian Breeding Value (ABV) with higher reliabilities, which was incorporated into the April 2013 ABV release Initiated a cooperative industry effort to enable more fertility data from dairy farms to be incorporated into fertility breeding values Developed provisional genomic breeding values for residual feed intake. Assoc. Prof. Ben Hayes Program 2 Research Leader Dr Mick Blake Program 2 Utilisation Leader Prof. Ben Cocks Deputy Chief Scientist 10

13 BREEDING WITH GENOMICS The CRC s work to double the rate of genetic gain in Australian dairy herds has progressed from delivery of genomic technology to widespread industry adoption. The introduction of genomics has transformed the breeding conversation, created an entirely new market segment for young bulls assessed with genomics and led to the development of new products and services. In a recent survey by Dairy Australia, 59% of famers said they are aware of genomic breeding values and 49% have used genomic semen. As a result of the CRC s Jer-nomics project, genomic breeding values for the Jersey breed were released for the first time in August A cooperative effort led by Jersey Australia identified 63 Jersey herds across Australia to supply genotypes for the reference set and CRC researchers genotyped 4202 cows. The new Jersey ABV(g) has an average reliability of 61% for production, making it comparable to Holstein ABV(g)s (average 63% reliability for production). The CRC s 1000 Bull Genomes project has extended its international reach with the addition of six new partners during the year. The project aims to map the entire DNA sequence of key dairy ancestors and use these sequences to impute genotypes in other bulls to improve the reliability of genomic breeding values. The database now contains complete sequences for 433 key ancestor bulls provided by 14 international partners. As part of the project, and together with partners, 31 million points of interest within the DNA sequence have been identified, including one that causes embryonic death in Holsteins. During the year, the CRC started a new joint research project with leading international cattle improvement organisation CRV. The project will draw on findings from the 1000 Bull Genomes project. By sharing data and enlarging the reference population, the collaboration aims to increase the reliability of genomic breeding values by at least 10% by u PROJECT MANAGERS Dr Jennie Pryce DEPI Victoria Prof. Paul Verma Monash University Prof. Mike Holland CSIRO and University of Queensland Dr Coralie Reich DEPI Victoria Dr Mekonnen Haile-Mariam DEPI Victoria Dr Amanda Chamberlain DEPI Victoria 11

14 IMPROVING FERTILITY IMPROVING FEED EFFICIENCY The CRC s research into dairy cattle fertility reached an important milestone with the release of an improved fertility ABV in April Previously, the ABV for fertility only measured limited fertility-related indicators; primarily calving interval and days from calving to first service. The research aim was to develop a broader model that incorporates more indicators and more accurately reflects the complexities of the fertility trait. The new multi-trait model has added lactation length, mating data and pregnancy data to the existing indicators. The resulting fertility ABV has increased in reliability by 6 8% for Holsteins and Jerseys, and up to 13.5% for some other breeds. The reliability increase means more bulls now meet the minimum standard for publication of their genetic merit. For example, 59 of the top 100 bulls in April 2013 had a publishable researchers Dr Brett Mason and Dr Coralie Reich fertility record, compared with only 32 before implementation of the technology. Complementing this work, the CRC is spearheading an industry-wide effort to improve the flow of fertility-related data from dairy farms to ADHIS. The CRC s fertility project aims to overcome barriers preventing fertility data being transferred from farms to data processing centres and then incorporated into bull breeding values. Working with project partners ADHIS and Warrnambool Veterinary Clinic, the CRC launched this work by bringing together farmers, ADHIS, data processing companies, veterinarians and leading dairy software providers at a workshop in April Work so far has demonstrated it is practical to unblock the data pipeline. Combined, the new fertility model and the extra fertility data could increase the pregnancy rate of cows (known as the six-week in-calf rate) by 10%. The project team continues to observe considerable differences in how much cattle eat and how intake compares with milk production. These observations are difficult and expensive to measure on commercial farms, so are limited to research herds. The CRC has now developed the ability to select for residual feed intake (the difference between an animal s actual and predicted dry matter intake). To achieve this, researchers studied 2000 growing heifers (together with Livestock Improvement Corporation in New Zealand) and 108 cows to confirm that feed efficiency persists as a cow matures: the animals that are most feed-efficient as calves and as first-lactation cows are also more feed-efficient in later lactations. A second validation experiment of 79 cows has confirmed the genomic prediction equation the CRC developed for growing heifers can be used to predict feed efficiency in lactating cows. Additional research with the University of Melbourne has provided valuable insights into the physiological differences between cows classed as either efficient or inefficient, including a link between feed efficiency and stress responsiveness. In a further development, the CRC became part of an international consortium that has assembled a very large reference population for predicting genomic breeding values for feed intake (the Global Dry Matter Intake initiative). An added benefit of selecting for feed efficiency is that more efficient cows emit less methane. By studying 32 cows over several lactations, the CRC has demonstrated a relationship between feed efficiency and methane. Work into both feed conversion efficiency and methane emissions will continue as a result of the CRC being awarded a three-year Climate 12

15 Gabriel Turlea, DEPI scientific computing specialist, at the bioinformatics and advanced scientific computing cluster at AgriBio Readiness grant by the Department of Agriculture, Fisheries and Forestry (DAFF), together with investment by Dairy Australia. This work will also develop a breeding value for heat stress tolerance. TOWARDS FEMALE-ONLY BIRTHS Monash University continues to use stem cell technology to identify new methods to select sperm. This includes significant progress in understanding the process of cells differentiating into sperm cells and the creation of new methods to direct the development of stem cells into embryos that are female. This work continues to be ground-breaking and has the potential to change the breeding method of cattle in the medium to longer term. During the year the research being carried out by CSIRO and the University of Queensland completed a detailed analysis of the surface proteins of X and Y sperm. However, a project review concluded that, while the research was of a high quality, none of the differences were large enough to lead to a viable sex selection technology, and the project has been discontinued. AUSTRALIAN RESEARCH PARTNERS Department of Environment and Primary Industries Victoria, Biosciences Research Division Department of Environment and Primary Industries Victoria, Future Farming Systems Research La Trobe University Monash University University of Melbourne University of Queensland CSIRO COMMERCIAL / INDUSTRY PARTNERS Dairy Australia Ltd ADHIS Pty Ltd CRV Genetics Australia Co-operative Ltd Holstein Australia Jersey Australia Geoffrey Gardiner Dairy Foundation Ltd INTERNATIONAL COLLABORATORS Aarhus University, Denmark Christian Albrechts, Germany CRV, Netherlands DairyCo, UK Frisona, Spain INRA, France Iowa State University, USA Irish Cattle Breeding Federation, Ireland Livestock Improvement Corporation, New Zealand MTT Agrifood Research, Finland Qualitas AG Swiss, Switzerland Scottish Agricultural College, UK SRUC Edinburgh, UK Technische Universitat Munchen, Germany Teagasc, Ireland Universita degli Studi di Milano, Italy University of Alberta, Canada USDA, USA Wageningen UR, Netherlands Wisconsin University, USA 13

16 EDUCATION AND TRAINING continues to support post-graduate researchers through its industry mentoring and professional development programs, and to support national agriculture education objectives through its secondary schools program. The quality of the education program was commended in the Commonwealth performance review, and the industry mentoring program was shortlisted in the 2013 CRC Association Award for Excellence in Innovation. The education program [is] of excellent quality and is an example of best practice for CRCs. Major Performance Review Report for, May TRAINING TOMORROW S RESEARCHERS The CRC is currently training 20 post-graduate students and will exceed the objective of producing at least 30 PhD-trained researchers over the life of the program. To date, 10 CRC students have successfully completed their PhD and most graduates continue in scientific research. During two new students enrolled with Program 1 and two with Program 2 through La Trobe University and the University of Melbourne, and one candidate discontinued. Two post-graduate students from Wageningen University in the Netherlands and one Masters student from Universidad Nacional Autonoma de Mexico spent several months at AgriBio working with the Program 2 research team. With funding support from, seven students travelled to international conferences and workshops and many made the most of the opportunity to visit research facilities and commercial businesses while overseas. Students presented abstracts and posters at conferences including Quantitative Genetics (Edinburgh, UK), the Symposium on Molecular Breeding of Forage and Turf (Utah, USA), the International Symposium on Fungal Endophytes of Grasses (Lanzhou, China) and Belinda Griffiths, Greenhouse Gases and Animal Education & Industry Agriculture (Dublin, Ireland). Engagement Manager 14

17 STUDENT AWARDS Claire Lewis: Rural Finance Ian Morton Memorial Scholarship Cameron Ludemann: AW Howard Memorial Trust Travel Scholarship and Melbourne Abroad Travelling Scholarship Elizabeth Ross: LIMS Miller Travelling Fellowship GLOBAL LEARNING My PhD uses farm system models to assess the economic and greenhouse gas implications of changes in pasture traits. Recently I travelled to Europe where I attended the Greenhouse Gases and Animal Agriculture conference in Dublin: a must attend event attracting many eminent scientists. We were treated to a wide range of research concerning methods for mitigating animal greenhouse gas emissions across many different farm systems. I also visited the UK to talk to researchers and key dairy industry people in Edinburgh, Birmingham and Aberystwyth. The trip was well worthwhile in terms of gaining feedback on my PhD and building contacts for after I finish my thesis. Cameron Ludemann Student ABOVE: Luke Pembleton ABOVE LEFT: Cameron Ludemann In October 2012 I spent a month working with NZ Agriseeds in Christchurch, where I was able to see and work in the different parts of their breeding program, from crossing and phenotypic screening of plant lines, through to seed production steps, and then also marketing and agronomy trials. I was also able to meet with farmers and other industry researchers during my visit. The trip gave me a really good insight into commercial plant breeding and has allowed me to ensure my research is developed with the commercial partner and dairy industry in mind. Luke Pembleton Student Pieter Badenhorst: Finalist, 2013 Victorian Young Achiever Awards Pieter Badenhorst, Cameron Ludemann: Best Overall Presentation, Forum 2012 Christy Vander Jagt: Best Impact Presentation, Forum 2012 Samira Rahimi-Ashtiani: Best Science Presentation, Dairy Futures CRC Forum INDUSTRY MENTORING The CRC s industry mentoring program, which pairs research students with an experienced industry mentor, has grown during the year, adding six new mentoring partnerships. In February 2013, the cohort of 21 students who commenced mentoring in 2012 attended a workshop with their mentors where they reviewed the successes and challenges of a full 12 months of mentoring partnerships. Most plan to continue their partnerships. Students also engaged with the dairy industry through the CRC s Finance Essentials for Early Career Researchers workshop, presentations at dairy workshops and conferences and farm visits. u 15

18 SUPPORTING SECONDARY SCHOOLS The CRC s program for secondary schools, Get into Genes, has now reached 20,000 students across Australia since it started in Get into Genes is the only education program for school students in Australia with a dedicated focus on the agricultural applications of biotechnology. During , Get into Genes extended its focus from secondary science and senior biology to include agriculture and horticulture studies. The CRC conducted outreach activities for students in Gippsland and western Victoria, and hosted professional development workshops for teachers. Teacher and student feedback attributes the success of Get into Genes to its strong links with the school curriculum, integration of the latest examples of Australian agribioscience with fun, hands-on activities in a university setting, and bright, enthusiastic PhD student demonstrators. Get into Genes enjoyed strong support during the year from funding partners the Australian Centre for Plant Functional Genomics and La Trobe University, with additional support provided by the University of Melbourne, School of Botany and the ARC Centre of Excellence for Plant Cell Walls. During , Get into Genes Victoria reached: 1778 students 147 teachers 49 schools RIGHT: Secondary school students taking part in Get into Genes FAR RIGHT: Dairy Futures CRC student Majid Khansefid with his industry mentor Peter Thurn from Genetics Australia 16

19 CURRENT POST-GRADUATE STUDENTS: PROGRAM 1 Haleh Aghili: Functional genomics of self-incompatibility in perennial ryegrass (Lolium perenne L.) Pieter Badenhorst: Molecular breeding strategies for transgenic Lolium grasses Antony Crowther: Metabolome of grass-endophyte symbiota Piyumi Ekanayake: Molecular genetic analysis of fescue-derived fungal endophytes Inoka Hettiarachchi: Reporter endophytes and studies of host colonisation and symbiotum development Claire Lewis: Analysing the potential value of novel white clover for Australian dairy farm systems CURRENT POST-GRADUATE STUDENTS: PROGRAM 2 Mary Abdelsayed: Quantitative genetics and genomic selection of extended lactation traits in Australian dairy cattle Hassan Aliloo: Exploiting non-additive genetic effects for fertility Frances Bowley: Pleiotrophy and genotype by environment interactions affecting dairy cattle fertility in Australia Lesley Gray: Using biological pathway and genome sequence information to map variants affecting milk production in dairy cattle Majid Khansefid: Genomic selection for residual feed intake Zibei Lin: Computational simulation studies of genomic selection on perennial ryegrass Cameron Ludemann: Modelling the impact of GM forage innovations for the Australian dairy industry Luke Pembleton: Advanced phenomics and genomics-assisted breeding of perennial (Lolium perenne L.) and Italian (Lolium multiflorum Lam.) ryegrass Samira Rahimi-Ashtiani: Biosynthesis of proanthocyanidins in white clover: single cell omics for designing pathway re-programming. Ross Koufariotis: Using functional information in genomic selection based on full genome sequence data Luis F Malaver-Ortega: Bovine pluripotent stem cells: Strategies for generation and differentiation towards germ cells Catriona Millen: Fine mapping QTL for milk production traits in dairy cattle Elizabeth Ross: Investigating the bovine microbiome using massively parallel sequencing Ting Ting Wang: Computationally efficient genomic predictions with full genome sequence data. PHDS AWARDED Andrea Giordano: Functional genomics of lignin biosynthesis in Paspalum dilatatum Melanie Hand: Genome evolution, genetic diversity and molecular breeding of tall fescue (Festuca arundinacea Schreb.) Christy Vander Jagt: Comparative analysis of marsupial and eutherian genomes to identify genes critical in milk production. SOME DESTINATIONS OF CRC PHD GRADUATES Universidade Federal de Viçosa, Brazil (molecular plant breeding) CSIRO Plant Industry, Adelaide (plant reproduction research) Department of Environment and Primary Industries, Victoria (Designer Forages program). 17

20 COMMUNICATIONS AND INDUSTRY ENGAGEMENT During the year the CRC has continued a focused program of communication and industry engagement. Activities are designed to strengthen industry links and encourage technology adoption, and are conducted principally through our partner organisations who have well-established business relationships with dairy farmers. A representative survey of dairy farmers from all regions of Australia undertaken by Dairy Australia showed that dairy farmer awareness of the CRC has grown to 62%, and 85% of farmers who are familiar with the CRC s research believe it will positively impact their farming business. Jen Bladon-Clark Communications Manager DAIRY FARMERS: TRANSFORMING THE BREEDING DIALOGUE In accordance with stakeholder research, the CRC and partners communicate with dairy farmers primarily via the web and face-to-face engagement. The website ( is updated regularly with research developments and announcements. During the year new videos were added to the multimedia gallery on the CRC s website covering the reliability of genomic breeding values, the use of genomics in breeding programs, and sex selection. Visits to the website increased by approximately 50% over the year. Face-to-face dialogue between researchers and farmers took place during the year via tours of the AgriBio, Ellinbank and Hamilton research facilities and at industry workshops. 18

21 INDUSTRY ENGAGEMENT: CREATING PATHWAYS TO COMMERCIALISATION The CRC has continued to actively engage with industry via direct collaboration in research and participation in industry events. Research project teams report to participants via steering committee meetings and other closed groups to align research activities with commercialisation pathways. The CRC s researchers and students participated in approximately 20 industry workshops and conferences in Australia and New Zealand during the year, and the CRC sponsored Systems Biology Workshops for more than 150 delegates and presenters, hosted by the Department of Environment and Primary Industries Victoria. The CRC s research staff and managers contributed to industry working groups including the Dairy Moving Forward reproduction steering group, the Cows Network, the Royal Agriculture Society of Victoria s Agrifood Advisory Group, the Department of Environment and Primary Industries Victoria s mentoring taskforce and the Rebuilding Agriculture Workforce. INDUSTRY FERTILITY COLLABORATION In April 2013 the CRC hosted the Boosting The Fertility Data Chain workshop, bringing together farmers, ADHIS, data processors, veterinarians and other industry participants to discuss ways to improve the flow of fertility data from farms to ADHIS. The workshop formed part of the CRC s work to improve dairy cattle fertility (see page 12). As part of this effort, Department of Environment and Primary Industries Victoria project officers and researchers and ADHIS extension staff delivered workshops on Developing Your Herd s Genetics to more than 100 farmers in Kilarney, Numurkah, Cohuna, Maffra and The Gurdies. DAIRY FUTURES CRC FORUM The 2012 Forum What s Our Impact? took place in November More than 100 people attended, including CRC participants, researchers and students, to share knowledge about the research programs and their impacts. Forum attendees also helped review the Impact Tool as part of the CRC s preparation for its Commonwealth Performance Review. Guest speakers included Dairy Australia s Managing Director Mr Ian Halliday and Gippsland dairy farmer Mr Graeme Nicoll. Feedback after the Forum reflected researchers desire to deepen their understanding of industry challenges and opportunities so they can maximise the impacts of their research. RELOCATION TO AGRIBIO During the year the CRC relocated to the new $288 million AgriBio, Centre for AgriBioscience in Bundoora, Victoria Australia s premier agribioscience research facility, which accommodates more than 400 DEPI and La Trobe University staff. The relocation positions the CRC s head office in close proximity with researchers and provides opportunities to showcase research through facility tours. Approximately 250 people attended the official opening of the facility by The Hon. Dr Denis Napthine, Premier of Victoria in April This facility is one of a kind in Australia and easily ranks among the world s best agricultural bioscience research facilities. Dr Denis Napthine, Premier of Victoria (April 2013) Since the official opening the CRC has hosted tours of AgriBio for more than 100 service providers and farmers, including many young farmers, from groups including the Goulburn Dairy Business Network, World Jersey Cattle Bureau and Mount Gambier discussion group. Representatives from Australian Dairy Farmers, Regional Development Programs and CRC commercial partners have visited the facility. researcher Dr Jennie Pryce at the Boosting The Fertility Data Chain workshop researcher Assoc. Prof. Ben Hayes at the 2012 Forum AgriBio, Centre for AgriBioscience 19

22 SUMMARY OF PERFORMANCE AND IMPACTS PERFORMANCE REVIEW A formal review of the CRC s performance took place during May The purpose of the review was to assess the CRC s performance to date and provide recommendations to assist the CRC to maximise the benefits to end-users and Australia. The review panel concluded that the Dairy Futures CRC is well run and managed, is at the cutting edge of science globally and is delivering real benefits for the dairy industry. The CRC is characterised by strong and strategically focussed leadership and management and a shared unity of purpose by the participants. The collaborative nature of the industry is a strength which underpins the success of the CRC...The research undertaken by the CRC is world class, highly relevant to end-users and meets the needs of the dairy industry. The review panel s recommendations and the CRC s proposed action to implement those recommendations are outlined below. PERFORMANCE REVIEW RECOMMENDATION Develop a mechanism for obtaining an independent assessment on the quality of the research in the CRC. Consider the establishment of a sub-committee whose responsibility is to manage the transition process. The transition plan specifically give consideration to a formal process to continue the well-established research / industry collaboration which currently exists. The transition plan should address issues such as the continuation of students and commercialisation activities. Consider holding an annual forum at which all researchers have an opportunity to present their science. Seriously consider mechanisms to continue to recruit and fund PhD students over the next three years. Consider implementing undergraduate vacation studentships and recruiting honours students. Consider a support program appropriate to the needs of the post-doctoral fellows. PROPOSED ACTION The Board will use existing mechanisms to obtain external opinions as required and will enlarge its network of people capable of providing independent assessments. The entire Board should focus on transition planning as a critical aspect of governance. Transition planning is now a standing agenda item for each Board meeting. A formal process is warranted and will be organised. The next version of the transition plan will expand the existing description of transition activities for education, commercialisation and management of intellectual property. A forum will be held during Autumn 2014 and then annually. Recruitment of students will continue over the next three years and will be in excess of the required number of students (30). There are currently six student vacancies that will be filled over the next six months. Honours students are currently being recruited for select projects and are genuine prospects for recruitment. A support program for post-doctoral fellows will be expanded. 20

23 PROJECTED IMPACT The CRC s work is progressing according to expectations and the CRC is on track to deliver the value described in the Commonwealth Agreement across both pasture and animal improvements. There have been clear early indicators of success in the Animal Improvements program. The Designer Forages program now has a range of innovations at advanced stages of development and there is growing anticipation of implementing multiple new innovations in new pasture varieties. Some project areas, such as sex selection, have faced technical challenges and were reviewed in Each of these projects has clear criteria to determine whether to progress or discontinue activities. One of the sex selection projects has now concluded in accordance with these criteria. A review of the Impact Tool considered progress in each project, revised the likelihood of success and updated economic projections. Many projects now have significantly greater likelihood of success, although there is also a need in some projects to extend the timelines for impact to reflect the tasks required to commercialise new innovations. This re-assessment demonstrated that impact will occur in a similar magnitude to the original modelling ($320 million), with substantial additional benefits likely to accumulate in subsequent years as there is greater uptake of new innovations. SMALL-TO-MEDIUM ENTERPRISE ENGAGEMENT The Australian dairy industry is made up of approximately 6700 small-to-medium enterprises (SMEs) and many of its service providers are also SMEs. The CRC strategy involves both direct contact, and indirect engagement via participants. One focus of direct engagement with dairy farmers has been the CRC s work to develop genomic breeding values for Jerseys, which were published in August Farmers contributed tail hair samples from 63 Jersey herds across Australia for genotyping, and results were shared with each participant in a manner that supports the early use of genomic products. During the year, the CRC also commenced a project to better engage farmers in sharing fertility data with ADHIS so the data can be incorporated into bull breeding values. The major participants that support indirect engagement with SMEs include Dairy Australia, ADHIS (which provides information about genetic improvement to all dairy farmers), Murray Goulburn (which has around 2500 dairy farmer shareholders), Fonterra (which has more than 1500 farmer suppliers), and Genetics Australia (which has more than 5000 farmer members). COLLABORATION Global collaboration has expanded during The CRC entered into a new agreement for accelerated dairy cattle genomics with leading international dairy improvement company CRV. The CRC also joined with 14 other international organisations in the Global Dry Matter Intake initiative to develop genomic breeding values for feed intake. The CRC has continued to collaborate with breed societies Holstein Australia and Jersey Australia in research projects to deliver genomic products for their breeds. As a result, genomic breeding values are now available through ADHIS for both Holsteins and Jerseys. Collaboration continued with major pasture seed companies, where a range of innovations is being assessed in a pre-commercial phase or are now in commercial use. Every project has a research participant and an end-user participant actively involved in the oversight of the project. Projects have been established on the basis of relevance to end-users, and end-user involvement regularly adds value in terms of project design, access to the latest plant varieties and animal genetics, and expertise in marketing and technical support of innovations. RISKS AND IMPEDIMENTS The CRC has a risk management framework, under which the Board and management actively manage risk and regularly review all CRC activities. The overall risk profile of the CRC is low, given the strong commitment from participants, the technical progress achieved and the stable workforce. Risks that have been identified and are being actively managed are: The cash and in-kind contribution risk, which is mitigated through significant additional contributions to date and an increase in project participants Technical risk, which is mitigated through the management of a diversified portfolio of projects. Additionally, the CRC has recognised the need to introduce key stop/go points for projects in order to manage research and commercial direction Market risk, which is mitigated through regular, consistent and detailed communication to end-users and other key stakeholders. The Board and committees continue to monitor the market risk for adoption of GM pastures. Large-scale increases in food consumption and a reputable process for regulating GM technology are likely to reduce market risk. END-USER ENVIRONMENT The recent environment has been difficult for dairy farmers, with a sharp fall in export milk prices, high input costs and a high Australian dollar. National milk production declined by 3% from the previous year ( ) to yield 9.2 billion litres. However, the market has turned around quickly, with international milk prices increasing by more than 40% (in $USD terms) between January and June 2013, a reduction in the value of the Australian dollar, and favourable winter conditions. Recent events continue the trend towards greater volatility of the business environment, and further stimulate farmers appetite for the adoption of innovations that can reduce the impact of economic volatility. ACTIVITIES OUTSIDE OF THE COMMONWEALTH FUNDING AGREEMENT None. 21

24 CORPORATE MANAGEMENT MANAGEMENT TEAM The Chief Executive Officer (CEO), Dr David Nation, is responsible for ensuring the proper management and administration of. He is accountable for implementing strategic direction set by the Governing Board and has full authority of the Board to carry out his role as defined in the Constitution and as outlined in the Delegated Authority Policy. During the year, support to the CEO in managing the day-to-day operations was provided by the Chief Operating Officer (Colin Daws), Education and Industry Engagement Manager (Belinda Griffiths), Communications Manager (Jen Bladon-Clark), Executive Assistant (Nora Veljanovski), and Administrative Assistant (Amanda Lovell). Participants also provided a range of professional services. The Get into Genes program was delivered by the Get into Genes Acting Manager (Anjali Sahasrabudhe) in conjunction with La Trobe University, the Australian Centre for Plant Functional Genomics and the University of Melbourne. The CEO is further supported by the Executive Management Group, which meets bi-monthly and considers issues relating to the science quality and strategic input, the annual budget, research project management, risk management and intellectual property (IP) management. Colin Daws Chief Operating Officer THE EXECUTIVE MANAGEMENT GROUP NAME ORGANISATION Dr David Nation Mr Colin Daws Ms Belinda Griffiths Ms Jen Bladon-Clark Prof. German Spangenberg Dairy Futures Ltd Dairy Futures Ltd Dairy Futures Ltd Dairy Futures Ltd DEPI Victoria CRC POSITION/ ROLE Chief Executive Officer Chief Operating Officer Education and Industry Engagement Manager Communications Manager Chief Scientist and Program 1 Utilisation Leader TIME COMMITTED 100% 100% 100% 60% 30% Prof. Ben Cocks DEPI Victoria Deputy Chief Scientist Prof. John Forster Assoc. Prof. Ben Hayes DEPI Victoria Program 1 Manager DEPI Victoria Program 2 Manager Dr Mick Blake* Dairy Australia Program 2 Utilisation Leader 50% 70% 60% 50% * Dr Mick Blake finished in his position on 31 May 2013 and was replaced in July

25 PARTICIPANTS ORGANISATION ROLE IN CRC ABN ORGANISATION TYPE Department of Environment and Primary Industries Victoria Essential State Government Dairy Australia Ltd Essential Industry (SME) La Trobe University Essential University Australian Dairy Herd Improvement Scheme Other Industry (SME) Genetics Australia Cooperative Ltd Other Private Sector (SME) Heritage Seeds Pty Ltd Other Private Sector (SME) Holstein Australia Other Industry (SME) Jersey Australia Other Industry (SME) Murray Goulburn Co-operative Ltd Other Private Sector Fonterra Co-Operative Group Ltd Other Private Sector (International) New Zealand Agriseeds Ltd Other Private Sector (International) Royal Barenbrug Group Other Private Sector (International) PGG Wrightson Genomics Ltd Other Private Sector (International) Monash University Other University University of Melbourne Other University University of Sydney Other University CRV Project Partner Private Sector (International) Geoffrey Gardiner Dairy Foundation Project Partner Industry (SME) CSIRO Project Partner Australian Government University of Queensland Project Partner University During the year CRV joined as a project participant and the University of Sydney retired as a supporting participant. All participants maintained strong contributions to the CRC. CASH CONTRIBUTIONS FOR SOURCE ACTUAL AGREEMENT DIFFERENCE Participants $3,404,680 $2,555,000 $849,680 Other income $124,156 - $124,156 CRC program funding $4,780,000 $4,780,000 - Additional activities Total cash $8,308,836 $7,335,000 $973,836 IN-KIND CONTRIBUTIONS FOR CATEGORY ACTUAL AGREEMENT DIFFERENCE Program leader (FTEs) Key researcher (FTEs) Researcher (FTEs) Support staff (FTEs) Non-staff in-kind $6,862,075 $5,757,000 $1,105,075 FINANCIAL MANAGEMENT Two sets of financial information are prepared to describe CRC activities. Contributions to the CRC are recorded on a cash basis and presented in tables in this section. The accounts of Dairy Futures Ltd, the company responsible for managing the CRC, are recorded on an accrual basis and the audited company accounts are presented in the Statutory Financial Accounts commencing on page 27. For the period, contributions of both cash and total in-kind exceeded amounts specified in the Commonwealth Agreement. This excess is a combination of additional contributions from a number of the participants. u Total in-kind $12,664,440 $12,057,000 $607,440 23

26 INTELLECTUAL PROPERTY MANAGEMENT After 3.5 years of operation, the position as at 30 June 2013 is that the CRC has received significant contributions for CRC activities. This is a reflection of the high quality of research and commitment of participants. Capital expenditure The Board of has adopted a policy to minimise cash expenditure on capital items wherever possible and utilise assets provided by the research providers. No material capital purchases were made for CRC activities during Financial position The CRC maintains a healthy financial position and is carrying forward unearned grant income in order to ensure milestones in the Commonwealth Funding Agreement are met throughout the life of the CRC. Dairy Futures Ltd is income tax exempt, which reduces the risk of future liabilities. Projected contributions There are no known issues likely to impact on the CRC meeting its goals and objectives at 30 June There was a significant change in with the termination of projects that were co-funded by PGG Wrightson, but this is not expected to have a material impact due to increases from other participants. aims to derive maximum benefit from research outcomes through effective intellectual property (IP) management, protection and exploitation. The CRC s Audit and Risk Management Committee and Board oversees IP management. Formal arrangements for the management of IP are described in a range of agreements, including the participants agreement, supporting participants agreements, project agreements and an IP trust deed. Project IP is owned in accordance with the relevant project agreement. The general principle applied is that each project participant will have a beneficial interest in project IP in proportion to their contribution to the project. Similarly, the CRC will have a proportional interest based on its contribution to the project. The IP management includes invention reporting, project IP and background IP evaluation, IP portfolio management and the appropriate use of IP protection strategies. The Chief Operating Officer manages the IP portfolio. An IP register including project IP and background IP is maintained in the head office. How IP arrangements will ensure maximum benefits will accrue to end-users All project and participants agreements refer to the principle of maximising the national economic benefit from investment. This principle drives the selection of projects and the prioritisation of effort within projects. Licensing and royalty arrangements are negotiated to maximise the adoption of technology in Australia. This includes preferential access (including first access) and simplified licensing arrangements for use of technology in Australia. IP management strategies and their alignment with National Principles The CRC s IP management strategies are in line with the National Principles of IP management for publicly-funded research. The CRC and participating research providers have policies in place for ownership, protection and exploitation of IP. These policies address identification and reporting of IP, laboratory records and data management, confidentiality, publication, assessment of IP, management of IP and IP agreements. Confidentiality agreements are required for any discussions with third parties involving sensitive information. Management also ensures researcher IP agreements are adequate and effective in the assignment of IP to. 24

27 GOVERNANCE is an unincorporated joint venture with three Essential Participants (Dairy Australia, the Department of Environment and Primary Industries Victoria and La Trobe University) and a broad range of Supporting Participants. Dairy Futures Ltd (DFL), a public company limited by guarantee, has been established to manage and govern the CRC and ensure the activities are at all times carried out in accordance with the Commonwealth Funding Agreement. DFL holds this role exclusively in that there is only one governing entity for this CRC and the one governing board (being the board of DFL itself). As a not-for-profit organisation, DFL has income tax exemption. The Governing Board has adopted the Governance Principles as drafted by the Australian Stock Exchange and amended in the CRC guidelines. 1 BOARD STRUCTURE AND RESPONSIBILITIES The Dairy Futures Ltd Board of Directors comprises a non-executive Chairman and five non-executive members and the CEO. The majority of non-executive directors and the Chairman are independent of any participant. The Board meets formally six times per year. Directors are selected for the skill sets they contribute to the CRC. A majority of directors have had some experience in or exposure to the dairy industry. Collectively, the Directors bring the following skills and experience to the Board: governance and strategic analysis skills financial control skills risk and audit skills experience in agricultural biotechnology activities experience in utilisation of science, particularly agricultural science, by dairy farmers and associated service providers experience in leading / managing medium to large innovation businesses experience in commercialisation and valuation of IP experience in education and training in the areas of science and utilisation experience in liaising with Commonwealth Government agencies. Under the company s Constitution it is a requirement that at every Annual General Meeting two Directors must retire from office either voluntarily or by rotation. Those retiring by rotation are the Directors that have been the longest in office. During the year the Board Selection Committee, comprising key industry personnel, met to consider Gary Cornelius and Stephen Coats who had tendered their resignations and offered themselves for re-election. At the Annual General Meeting held on 26 November 2012 the members resolved to elect both Gary Cornelius and Stephen Coats to the office of non-executive director. The Board has an Audit and Risk Management Committee and an Industry Liaison Committee. Each committee has an advisory role and comprises non-executive directors. The Board of Directors and its two committees each operate via a Charter. The primary functions of the Board are to: formulate strategy monitor and assess performance provide direction to the CEO ensure compliance with the myriad of contracts and agreements review and monitor risk and financial management review stakeholder relations. Among its other responsibilities, the Board approves the CRC s annual budgets, oversees and approves the allocation of research project funds, and determines whether intellectual property protection is to be pursued for the outcomes of the activities. The Board undertakes an internal analysis of performance on an annual basis. 1 Refer to for the guidelines 25

28 The Board (L R): Dr Bruce Kefford PSM, Ms Kathryn Adams, Mr Stephen Coats, Dr Julian Caples, Mr Gary Cornelius, Dr Michael Ginnivan (Chairman), Dr David Nation (CEO), Mr Colin Daws (Company Secretary). 26

29 STATUTORY FINANCIAL ACCOUNTS Directors report 28 Directors declaration 31 Auditor s independence declaration 32 Statement of financial position 33 Statement of profit or loss and other comprehensive income 34 Statement of cash flows 35 Statement of changes in equity 35 Notes to the financial statements 36 Independent auditor s report 43 27

30 DIRECTORS REPORT The Directors of Dairy Futures Ltd present their report, together with the financial statements, of the Company for the year ended 30 June DIRECTORS The name of each person who has been a director of the Company at any time during or since the end of the year is listed below, with the period for which the person was a director and their qualifications, experience and special responsibilities. COMPANY SECRETARY Mr Colin Daws is the Company Secretary. PRINCIPAL ACTIVITY The Company s principal activity during the current year has been the promotion and management of research into and development of Australia s dairy industry. OPERATING RESULTS The operating surplus of the Company for the year ended 30 June 2013 after providing for income tax was nil (2012: nil). NAMES COMMENCEMENT QUALIFICATIONS EXPERIENCE Dr Michael Ginnivan 17/12/2009 B.Agr.Sc. PhD, MAICD Experienced agribusiness executive who has held senior management roles with international and Australian companies Mr Gary Cornelius 17/12/2009 B.Ec. (Hons.), FCT, FAICD Dip Mr Stephen Coats 11/2/2010 B.Agr.Sc. (Hons.), M.Agr.Sc. Grad. Dip. Business (Agriculture) Dr Bruce Kefford PSM 17/12/2009 B.Sc. (Hons.), PhD (Microbiology), Grad. Management (AGSM), MAICD, FIPAA Senior adviser in corporate strategy, financial valuations, mergers and acquisitions Senior executive with expertise in technology transfer in private and public sector operations for the dairy industry Senior executive with extensive experience in public sector research, specifically in the agriculture and food sectors SPECIAL RESPONSIBILITIES Chairman Chair, Audit and Risk Management Committee Chair, Industry Liaison Committee Ms Kathryn Adams 11/2/2010 B.Sc.Agr. (Hons), LLM, M.Bus. M.Env.Stud, Grad. Dip. Leg, Pract, Prof. Cert. Arbitration, FAICD Agricultural scientist and lawyer with extensive knowledge of agricultural research through involvement with R&D corporations and rural-based CRCs Dr Julian Caples 11/2/2010 M.B., B.S. (Monash University), FAFOEM (RACP), MAICD Dr David Nation 16/3/2010 B.Sc.Agr. (Hons.), PhD (Waikato, NZ), Grad. Cert. Bus. Mgmt. Corporate adviser specialising in risk management, sustainability, public relations and government affairs Experienced manager in dairy research and agribusiness operations Executive Director (CEO) 28

31 REVIEW OF OPERATIONS INDEMNIFICATION OF OFFICER OR AUDITOR During the year the Company focused on the following key areas of operations: Investment in research activities to deliver designer forages Investment in research activities to deliver animal improvement. SHORT-TERM AND LONG-TERM OBJECTIVES OF THE COMPANY The Dairy Futures Ltd is registered under the Commonwealth s CRC Program and is a 6.5 year, $128 million investment that is expected to deliver more than $320 million in value to the dairy industry through improved pastures and dairy cattle. The major objective is to support a return to a 2% p.a. total factor productivity gain. Secondary challenges include the need to maximise the value of on-farm transformation through the entire value chain. These key objectives will be achieved through new approaches to selective breeding of both pasture and cattle. Outcomes in pastures, dairy cattle and dairy production systems will be delivered in two integrated research programs. Program 1 Designer Forages Program 2 Animal Improvement. The short-term objectives will be the identification of genetic traits both in pasture and animals. The long-term focus will be on the development of germplasm for pasture, the development of breeding values for the Australian dairy industry and a reduction in methane production. PERFORMANCE MONITORING AND MEASUREMENT The company has a CEO supported by a head office team and executive management group that manages and monitors the activities of the two research programs. Each program has a Research Manager and Utilisation Manager whose responsibility is the management of the research projects and the uptake of the outcomes by industry. Each project has well-defined milestones contracted and reported against on a regular basis. The main tool in measuring performance is the Impact Tool a spreadsheet designed to measure key inputs, activities, outputs, usages and impacts of both research programs. AFTER BALANCE DATE EVENT No material matters or circumstances have arisen since the end of the financial year that significantly affected or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years. LIKELY DEVELOPMENTS At the date of signing this report there were no unforeseen developments or other future developments in the operations of the entity that have not been included in this report that would prejudice its ability to operate at its current level of performance or require disclosure. ENVIRONMENTAL ISSUES The Company s operations are not regulated by any significant environmental regulations under a law of the Commonwealth or of a State or Territory and accordingly no environmental disclosure is required. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There have been no significant changes in the state of affairs of the Company during the year. The Company has, during or since the end of the financial year, paid premiums in respect of an insurance contract to indemnify officers, excluding the auditors, against liabilities that may arise from their position as officers of the Company. Officers indemnified include the Company Secretary, all directors and all executive officers participating in the management of the Company. Further disclosure required under section 300(9) of the Corporations Act 2001 is prohibited under the terms of the contract. PROCEEDINGS ON BEHALF OF THE 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. DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS The Company s activities expose it to changes in interest rates. It is also exposed to credit, liquidity and cash-flow risks from its operations. Management monitors the Company s response to changes in interest rates and cash-flow risks from its operations, and reports to the Board on bi-monthly basis. FUTURE DEVELOPMENTS At the date of signing this report there are no unforeseen developments or other future developments in the operations of the Company that have not been included in this report that would prejudice its ability to operate at its current level of performance or require disclosure. u 29

32 DIRECTORS MEETINGS The number of meetings of the Company s Board of Directors and each Committee held during the year ended 30 June 2013 and the number of meetings attended by each Director were: DIRECTORS AND OFFICERS DIRECTORS MEETINGS AUDIT COMMITTEE ILC COMMITTEE researcher Dr Tuan Ngoc Le CORPORATE STRUCTURE Dairy Futures Ltd is an incorporated company limited by guarantee and domiciled in Australia. Dairy Futures Ltd has a Board of seven (7) directors who act on behalf of all the Company members to ensure the activities outlined in Schedule 1 of the Commonwealth Agreement and the Company s strategic plan are achieved. The Board has two committees: Audit and Risk Management Industry Liaison. Charters exist for each of these committees. EMPLOYEES, DIRECTORS AND OFFICERS As at 30 June 2013, Dairy Futures Ltd executive team comprised: Chief Executive Officer Chief Scientific Officer Deputy to the Chief Scientific Officer Program 1 Research Manager Program 1 Utilisation Manager Program 2 Research Manager Program 2 Utilisation Manager Chief Operating Officer Education and Industry Engagement Manager Communications Manager. CONTRIBUTIONS ON WINDING UP In the event of the Company being wound up, ordinary members are required to contribute a maximum of $10 each. The total amount members of the company are liable to contribute if the Company is wound up is $20, based on two (2) current ordinary members. AUDITOR INDEPENDENCE DECLARATION A copy of the auditor s independence declaration as required under section 307C of the Corporations Act 2001 is attached to this report. Signed in accordance with a resolution of the Directors, pursuant to section 298(2) (a) of the Corporations Act Dr Michael Ginnivan Director Meetings attended Meetings entitled to attend 23 October 2013 Melbourne DAIRY FUTURES LTD ABN Meetings attended Meetings entitled to attend Meetings attended Mr Gary Cornelius Director Meetings entitled to attend Dr Michael Ginnivan Mr Gary Cornelius Dr Bruce Kefford PSM Mr Stephen Coats Ms Kathryn Adams Dr Julian Caples Dr David Nation Mr Colin Daws

33 DIRECTORS DECLARATION In the opinion of the Directors: 1. The accompanying financial statements and notes are in accordance with the Corporations Act 2001, including: (a) Comply with Accounting Standards and the Corporations Regulations 2001; and (b) Give a true and fair view of the financial position as at 30 June 2013 and performance of the Company for the year ended on that date. 2. At the date of this declaration 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 pursuant to s.295 (5) of the Corporations Act Signed on behalf of the Directors by: Dr Michael Ginnivan Director Mr Gary Cornelius Director 23 October 2013 Melbourne 31

34 32 AUDITOR S INDEPENDENCE DECLARATION

35 DAIRY FUTURES LTD STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2013 NOTE ASSETS Current assets Cash and cash equivalents 4,629,465 4,218,678 Trade receivables 3 786, ,930 Other assets 4 572, ,956 Total current assets 5,988,489 5,226,564 Non-current assets Property, plant and equipment 5 10,737 15,742 Total non-current assets 10,737 15,742 Total assets 5,999,226 5,242,306 LIABILITIES Current liabilities Trade and other payables 6 3,166,859 1,911,780 Provisions 7 40,979 28,277 Cash contributions received in advance 8 2,778,130 3,294,203 Total current liabilities 5,985,968 5,234,260 Non-current liabilities Provisions 7 13,258 8,046 Total non-current liabilities 13,258 8,046 Total liabilities 5,999,226 5,242,306 Net assets - - EQUITY Share capital Retained earnings - - Total equity - - The Statement of Financial Position is to be read in conjunction with the accompanying notes. 33

36 DAIRY FUTURES LTD STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2013 REVENUE NOTE Revenue 9 8,960,090 9,032,305 Other income 9 193, ,682 Total revenue 9,153,344 9,203,987 EXPENSES Research and development program expenditure 7,775,781 7,918,548 Centre salaries and on-costs 856, ,222 General and administrative expenses , ,217 Total expenses 9,153,344 9,203,987 Profit before income tax expense - - Income tax expense 2(e) - - Profit after tax - - Other comprehensive income - - Total comprehensive income for the year - - The Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the accompanying notes. 34

37 DAIRY FUTURES LTD STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2013 CASH FLOWS FROM OPERATING ACTIVITIES NOTE CRC grants received from the Commonwealth 4,780,000 4,780,000 Participants contributions received 3,404,680 5,412,729 Other income ,992 Payments to suppliers and employees (7,917,541) (7,843,575) Interest received 146, ,393 Net cash provided by operating activities ,734 2,613,539 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (3,947) (8,508) Net cash used in investing activities (3,947) (8,508) Net increase in cash and cash equivalents 410,787 2,605,031 Cash and cash equivalents at beginning of the ear 4,218,678 1,613,647 Cash and cash equivalents at end of the year 4,629,465 4,218,678 The Statement of Cash Flows is to be read in conjunction with the accompanying notes. DAIRY FUTURES LTD STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2013 ISSUED CAPITAL RETAINED EARNINGS NET PROFIT FOR THE YEAR Balance at 30 June NET PROFIT FOR THE YEAR Balance at 30 June TOTAL The Statement of Changes in Equity is to be read in conjunction with the accompanying notes. 35

38 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE INTRODUCTION The financial report covers Dairy Futures Ltd ( Company ) as an individual company. Dairy Futures Ltd is an unlisted public company limited by guarantee, incorporated and domiciled in Australia. The Company was incorporated on 17 December The principal operations and activities of the company are the promotion and management of research into and development of Australia s dairy industry. The financial report is presented in Australian dollars and amounts are rounded to the nearest dollar. The financial report was authorised for issue by the Board of Directors of the Company at a directors meeting on the date shown on the Declaration by the Board of Directors attached to the Financial Statements. (a) Basis of preparation The financial report is a general purpose financial report that has been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations and complies with other requirements of the law as appropriate for not-for-profit entities. The financial report has been prepared on an accrual basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied. The financial statements have been prepared on a going concern basis, which assumes the realisation of assets and the extinguishment of liabilities in the normal course of business and at the amounts stated in the financial report. The following significant accounting policies have been adopted in the preparation and presentation of the financial report. These policies have been consistently applied and are consistent with those of the previous years, unless otherwise stated. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (b) Significant judgements and key assumptions Judgements made in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements concern depreciation rates. No significant judgements have been made in applying accounting policies that have a significant effect on the amounts recognised in the financial statements. No key assumptions have been made concerning the future and there are no other key sources of estimation uncertainty at the balance date the Directors consider have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. (c) Cash and cash equivalents Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. (d) Revenue recognition rendering of services When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the percentage of the services performed. Interest revenue Interest revenue is recognised using the effective interest method. It includes the amortisation of any discount or premium. Cash contributions from participants Cash contributions received from participants in the current financial year, which are on account of future costs to be incurred by the Company, are treated as liabilities until the associated costs are incurred. Government grants Government grants, (including nonmonetary grants at fair value) are not recognised until there is reasonable assurance that all conditions will be complied with and the grants will be received. Grants are recognised in the Statement of Profit or Loss and Other Comprehensive Income over the years necessary to match them with the related costs, which they are intended to compensate, on a systematic basis. Grants related to assets are presented in the Statement of Financial Position by setting up the grant as deferred income. 36

39 Other revenue Other revenue is required when it is received or when the right to receive payment is established. (e) Income tax The Company is exempt from income tax and therefore no provision for tax is made in these financial statements. (f) Trade and other receivables Trade accounts and notes receivable and other receivables represent the principal amounts due at balance date plus accrued interest and less, where applicable, any unearned income and allowances for doubtful accounts. (g) Trade and other payables Trade and other payables are recognised when the Company becomes obliged to make future payments resulting from the purchase of goods and services. The amounts are unsecured and paid within 30 days of recognition. (h) Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Repairs and maintenance costs are recognised in the Statement of Profit or Loss and Other Comprehensive Income as incurred. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows: Plant and equipment over 3.33 years Furniture, fixtures and fittings over 3.33 years The assets residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end. (i) Goods and services tax Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST) except: Where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense, or For receivables and payables which are recognised inclusive of GST, the net amount of GST recoverable from, or payable to the taxation authority is included as part of receivables or payables in the Statement of Financial Position. Receivables and payables are stated with the amount of GST included. Cash flows are included in the Statement of Cash Flows on a gross basis. The GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, is classified as an operating cash flow. (j) Provisions Provisions are recognised when the economic entity has a present obligation (legal, equitable or constructive) as a result of present or past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the discounted present value of those cash flows. As that discount is unwound it gives rise to interest expense in the Statement of Profit or Loss and Other Comprehensive Income. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably. (k) Employee benefits Wages and salaries and annual leave Provision is made in respect of wages and salaries, annual leave and other employee benefits when it is possible that settlement will be required and they are capable of being measured reliably. The provision for employee benefits relates to liabilities for wages and salaries and annual leave expected to be settled within 12 months of the reporting date are recognised in respect of employees service up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Long service leave The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. u 37

40 NOTES TO THE FINANCIAL STATEMENTS CONTINUED Superannuation The amount charged to the Statement of Profit or Loss and Other Comprehensive Income in respect of superannuation represents the contributions made by the Company to the employees nominated superannuation funds. (l) Research and development expenditure Research and development expenditure is recognised as an expense in the year in which incurred. Intangible assets arising from development activities are recognised when resources are available to complete the assets and future economic benefits from use or sale of the assets is probable. (m) Contingent liabilities A contingent loss is recognised as an expense and a liability if it is probable future events will confirm that, after taking into account any related probable recovery, an asset has been impaired or a liability incurred and, a reasonable estimate of the amount of the resulting loss can be made. (n) Going concern The financial report has been prepared in accordance with generally accepted accounting principles, which are based on the Company continuing as a going concern. The Directors confirm the going concern principle is appropriate. (o) Comparatives Comparatives have been reclassified so as to be consistent with the figures presented in the current year. (p) New and revised accounting standards and interpretations All the new and revised accounting standards and interpretations issued by the Australian Accounting Standards Board ( AASB ) that are relevant to its operations and effective for the annual reporting period beginning on 1 July 2012 have been adopted by the Company in accordance with accounting policy described in note 1. New accounting standards and interpretations Australian accounting standards and interpretations that have recently been issued or amended but are not yet mandatory have not been early adopted by the Company for the annual reporting period ended 30 June The Company has decided not to early adopt. The Directors do not believe the new and revised standards issued by the AASB that are not yet effective will have any material impact on the financial statements. The Company s assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Company, are set out below: AASB 1053 Application of Tiers of Australian Accounting Standards This standard is applicable to annual reporting periods on or after 1 July This standard established a differential financial reporting framework consisting of two tiers of reporting requirements for preparing general purpose financial statements, being Tier 1 Australian Accounting Standards and Tier 2 Australian Accounting Standards Reduced Disclosure Requirements. Although it qualifies as a Tier 2, the Company has no immediate plan to adopt these amendments for reduced disclosures. 3. TRADE RECEIVABLES CURRENT Trade receivables 786, ,930 At 30 June 2013, the ageing analysis of trade receivables is as follows: TOTAL CURRENT 0-30 DAYS DAYS DAYS , ,688-91,500 66, , , Less: allowance for impairment of receivables , ,930 Past due but not impaired Receivables with balances past due but without provision for impairment of receivables amount to $158,000 as at 30 June 2013 (2012: nil). 38

41 4. OTHER ASSETS Other debtors 565, ,200 Pre-payments 6,787 36, PROPERTY, PLANT AND EQUIPMENT 572, , TRADE AND OTHER PAYABLES Other payables 1,429, ,328 Deferred income 1,737,059 1,672, PROVISIONS 3,166,859 1,911, Plant and equipment at cost at cost 23,319 19,054 CURRENT EMPLOYEE BENEFITS Accumulated depreciation (12,582) (7,232) Net carrying amount 10,737 11,822 Furniture, fixtures and fittings at cost - 6,482 Accumulated depreciation - (2,562) Net carrying amount - 3,920 10,737 15,742 Reconciliation of the carrying amounts of each class at the start and end of the current financial period: YEAR ENDED 30 JUNE 2013 At 1 July 2012 net of accumulated depreciation PLANT AND EQUIPMENT FURNITURE, FIXTURES AND FITTINGS 11,822 3,920 Additions 6,174 - Disposals (859) (2,460) Provision for annual leave 40,979 28,277 NON-CURRENT EMPLOYEE BENEFITS Provision for long service leave 13,258 8,046 54,237 36, CASH CONTRIBUTIONS RECEIVED IN ADVANCE Government grants 4,780,000 4,480,735 Participants contributions - 70,000 Total expense apportionment (2,001,870) (1,256,532) Cash contributions received in advance 2,778,130 3,294,203 As discussed in note 9, cash contributions from government and Participants on account of future costs to be incurred by the Company are treated as liabilities, until the associated costs are incurred. u Depreciation charge for the year (6,400) (1,460) At 30 June 2013 net of accumulated depreciation 10,737-39

42 NOTES TO THE FINANCIAL STATEMENTS CONTINUED 9. REVENUE (a) Government and Participants contributions MEMBERS CONTRIBUTIONS Contributions received as in-kind from the members under the Commonwealth Agreement are not recognised in the accounts. Cash and in-kind contributions made by members during the year were: Beginning accrued contributions Gross Commonwealth government grants Gross Participants cash contributions Less: cash contributions received that had not been spent at balance date (refer note 2(d)) Add: cash contributions from prior year realised during the period 4,780,000 4,780,000 3,664,016 4,551,570 - (299,265) 516,073-8,960,090 9,032,305 (b) Other income Interest 146, ,464 Miscellaneous income 46,489 12, EXPENSES (a) General and administrative 193, , Consultant fees 88, ,958 Legal expenses 49, ,373 Other 383, , , ,217 (b) Superannuation expenses Superannuation 51,336 63,776 51,336 63, CASH NON-STAFF IN-KIND TOTAL FTE* Members 1,134,878 5,198, Non-members 2,393,958 1,663, TOTAL 3,528,836 6,862, Members 2,700,000 4,028, Non-members 2,712,729 1,584, TOTAL 5,412,729 5,612, * Full time equivalent 12. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO PROFIT FOR THE YEAR Profit from operating activities after income tax Non-cash items: Depreciation 7,860 6,756 Loss on disposal 1,092 - Movement in assets: Trade and other receivables (285,758) 703,842 Prepayments other assets (65,380) 105,076 Movement in liabilities: Cash contributions received in advance / realised during the period (516,073) 574,888 Trade and other payables 1,255,079 1,214,087 Provisions 17,914 8,890 Net cash from operating activities 414,734 2,613,539 40

43 Cash and cash equivalents consist of cash on hand and balance with the NAB. Cash and equivalents included in the Statement of Cash Flows comprise the following balance sheet amounts: 13. SHARE CAPITAL Dairy Futures Ltd is an Australian Company Limited by Guarantee. The liability of its members is limited by the Constitution to the respective amounts that the members undertake to contribute in the event of it being wound up i.e. $20 (2 members x $10 per member). 14. COMMITMENT AND CONTINGENT LIABILITIES The Company has no commitment and contingent liabilities as at 30 June 2013 (2012: nil). 15. FINANCIAL INSTRUMENTS (a) Financial risk management objectives and policies The Company s principal financial instruments comprise receivables, payables and cash. These activities expose the Company to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity risk. Surplus funds will be invested in a variable high-interest-earning account with an approved bank. Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk, liquidity risk is monitored through general business budgets and forecasts. The Company has implemented and maintained a well-defined risk management process and a number of operational Key Performance Indicators and provides the Board and Management with an assessment of performance against agreed objectives. (b) Market risk There has been no change to the Company s exposure to market risks or the manner in which it manages and measures the risk from the previous year. (i) Interest rate risk on cash deposits The Company s exposure to market interest rates relates primarily to the Company s interest earning accounts. Sensitivity analysis Surplus funds are invested in interestearning accounts. The amounts are not significant. There is no material impact on profit or net assets at balance date from any interest rate exposure. (ii) Foreign currency risk The Company does not have material exposure to fluctuations in foreign currencies. (iii) Liquidity risk The Company manages liquidity risk by matching cash flow and maturity profiles of financial assets and liabilities. Financing arrangements The Company does not have access to any borrowing facilities at the reporting date. Maturities of financial liabilities The table below analyses the Company s net and gross settled derivative financial INTEREST RATE TERM 2013 Financial assets: 6 MONTHS instruments into relevant maturity groupings based on the remaining year of the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. (iv) Credit risk Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures to outstanding receivables, net of any allowance for doubtful debts, as disclosed in the Statement of Financial Position and notes to the financial report. The Company trades only with recognised, credit-worthy third parties, and as such collateral is not requested nor is it the Company s policy to securitise its trade and other receivables. All sales are on cash basis as such there no credit risk on the trade receivables. It is the Company s policy to consider the creditworthiness of all customers who wish to trade on credit terms. In addition, receivable balances are monitored on an ongoing basis with the result that the Company s exposure u 6 12 MONTHS TOTAL Cash and cash equivalents 4,579,465-4,579,465 Trade and other receivables 786, ,688 5,366,153-5,366,153 Financial liabilities: Trade and other payables 1,737,329-1,737,329 Net maturity 3,628,824-3,628, Financial assets: Cash and cash equivalents 4,218,678-4,218,678 Trade and other receivables 500, ,930 4,719,608-4,719,608 Financial liabilities: Trade and other payables 1,911,781-1,911,781 Net maturity 2,807,827-2,807,827 41

44 NOTES TO THE FINANCIAL STATEMENTS CONTINUED to bad debts is not significant. There are no significant concentrations of credit risk. (v) Price risk The Company is not exposed to any material commodity price risk. (c) Net fair values The carrying amount of financial assets and financial liabilities recorded in the financial statements approximates their net fair values. The net fair values of financial assets and financial liabilities are determined as follows: The net fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices; and the net fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow theory. 16. AUDITOR S REMUNERATION 17. RELATED PARTY TRANSACTIONS The names of all Directors who have held office during the financial year are: Dr Michael Ginnivan Mr Gary Cornelius Dr Bruce Kefford PSM Mr Stephen Coats Ms Kathryn Adams Dr Julian Caples Dr David Nation Total of all remuneration received and receivable in connection with: (a) Audit of the annual financial report and assurance services 17,000 14,800 (b) Other services relating to accounting, taxation and other consulting services 1,680 1,200 18,680 16,000 Fees paid to directors are included in key management personnel in note 18. OTHER RELATED PARTY TRANSACTIONS Payables: 18. KEY MANAGEMENT PERSONNEL Key Management Personnel comprise Directors and other persons having authority and responsibility for planning, directing and controlling the activities of Dairy Futures Ltd during the year. The amounts paid or payable to Key Management Personnel employed by Dairy Futures Ltd are as follows: 19. SUBSEQUENT EVENTS No matters or circumstances have arisen since the end of the financial year that significantly affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years. 20. COMPANY DETAILS The registered office and principal place of business of the Company is: AgriBio, Centre for AgriBioscience 5 Ring Road, La Trobe University Bundoora VIC Participants 5,964,717 5,515,932 Receivables: 5,964,717 5,515,932 Participants 6,365,430 7,696,658 Directors and executives: 6,365,430 7,696, Short-term employee benefits 467, ,282 Post-employment benefits 51,798 85,575 Termination benefits - 32,308 Total key management personnel 518, ,165 compensation 42

45 INDEPENDENT AUDITOR S REPORT 43

46 PUBLICATIONS PUBLISHED ARTICLES IN PEER REVIEWED JOURNALS Bath C, Morrison M, Ross EM, Hayes BJ, Cocks BG (2013) The symbiotic rumen microbiome and cattle performance: a brief review. Animal Production Science. Broendum RF, Su G, Lund MS, Bowman PJ, Goddard ME, Hayes BJ (2012) Genome position specific priors for genomic prediction. BMC Genomics. 10(13):543. Byrne K, Leahy T, McCulloch R, Colgrave ML, Holland MK (2012) Comprehensive mapping of the bull sperm surface proteome. Proteomics. 12(23-24): Druet T, Macleod IM, Hayes BJ (2013) Toward genomic prediction from wholegenome sequence data: impact of sequencing design on genotype imputation and accuracy of predictions. Heredity. Forster JW, Panter S, Mouradov A, Mason J, Spangenberg GC (2013) Transgenic technologies for enhanced molecular breeding of white clover (Trifolium repens L.). Crop and Pasture Science. 64: Haile-Mariam M, Bowman PJ, Pryce JE (2013) Genetic analyses of fertility and predictor traits in Holstein herds with low and high mean calving intervals and in Jersey herds. Journal of Dairy Science. 96(1): Haile-Mariam M, Nieuwhof GJ, Beard KT, Konstatinov KV, Hayes BJ (2013) Comparison of heritabilities of dairy traits in Australian Holstein-Friesian cattle from genomic and pedigree data and implications for genomic evaluations. Journal of Animal Breeding and Genetics. 130(1): Hand ML, Spangenberg GC, Forster JW, Cogan NOI (2013) Plastome sequence determination and comparative analysis for members of the Lolium-Festuca grass species complex. G3: Genes-Genomes- Genetics. 3: Hayes BJ, Lewin HA, Goddard ME (2013) The future of livestock breeding: genomic selection for efficiency, reduced emissions intensity, and adaptation. Trends in Genetics. 29(4):

47 Hayes BJ, Cogan NOI, Pembleton LW, Goddard ME, Wang J, Spangenberg GC, Forster JW (2013) Prospects for genomic selection in forage plant species. Plant Breeding. 132: Heffernan C, Liu J, Sumer H, Malaver- Ortega LF, Verma R, Carvalho E, Verma PJ (2013) Induction of pluripotency. Advances in Experimental Medicine and Biology. 786:5 25. Lin Z, Macleod I, Pryce JE (2013) Short communication: estimation of genetic parameters for residual feed intake and feeding behavior traits in dairy heifers. Journal of Dairy Science. 96(4): Malaver-Ortega LF, Sumer H, Liu J, Verma PJ (2012) The state of the art for pluripotent stem cells derivation in domestic ungulates. Theriogenology. 78(8): Pal R, Rao M, Vemuri MC, Verma P, Dinnyes A (2012) Advances in induced pluripotent stem cell technologies. Stem Cells International. Pashaiasl M, Khodadadi K, Richings NM, Holland MK, Verma PJ (2013) Cryopreservation and long-term maintenance of bovine embryo-derived cell lines. Reproduction, Fertility and Development. 2013;25(4): Pembleton LW, Cogan NOI, Forster JW (2013) StAMPP: an R package for calculation of genetic differentiation and structure of mixed-ploidy level populations. Molecular Ecology Resources. 13(5): Pembleton LW, Wang J, Cogan NOI, Pryce JE, Ye G, Bandaranayake C, Hand ML, Baillie RC, Drayton MC, Lawless K, Erb S, Dobrowolski MP, Sawbridge TI, Spangenberg GC, Smith KF, Forster JW (2013) Candidate gene-based association genetics analysis of herbage quality traits in perennial ryegrass (Lolium perenne L.). Crop and Pasture Science. 64: Raven LA, Cocks BG, Pryce JE, Cottrell JJ, Hayes BJ (2013) Genes of the RNASE5 pathway contain SNP associated with milk production traits in dairy cattle. Genetics Selection Evolution. 45:25. Ross EM, Moate PJ, Marett L, Cocks BG, Hayes BJ (2013) Investigating the effect of two methane-mitigating diets on the rumen microbiome using massively parallel sequencing. Journal of Dairy Science. Shinozuka H, Cogan NOI, Spangenberg GC, Forster JW (2012) Quantitative trait locus (QTL) meta-analysis and comparative genomics for candidate gene prediction in perennial ryegrass (Lolium perenne L.). BMC Genetics. 13:101. Tian P, Le T-N, Smith KF, Forster JW, Guthridge KM, Spangenberg GC (2013) Stability and viability of novel perennial ryegrass host Neotyphodium endophyte associations. Crop and Pasture Science. 64: Wray NR, Yang J, Hayes BJ, Price AL, Goddard ME, Visscher PM (2103) Pitfalls of predicting complex traits from SNPs. Nature Reviews Genetics. 14(7): Young S, Goddard ME, Pryce JE, Deng G (2013) Kernel methods and haplotypes used in selection of sparse DNA markers for protein yield in dairy cattle. Mathematical Biosciences. 243(1): ACCEPTED ARTICLES (NOT YET PUBLISHED) IN PEER REVIEWED JOURNALS Bell M, Eckhardt R, Pryce JE (in press) The effect of improving cow productivity, fertility, and longevity on net income and greenhouse gas emissions from Australian dairy systems. Journal of Dairy Science. Pryce JE, Wales WJ, De Haas Y, Veerkamp RF, Hayes BJ (in press) Genomic selection for feed efficiency in dairy cattle. Animal. Ross EM, Moate PJ, Marett LC, Cocks BG, Hayes BJ (in press) Metagenomic Predictions: from microbiome to complex health and environmental phenotypes in humans and cattle. PLOS One. Tian P, Le T-N, Ludlow EJ, Smith KF, Forster JW, Guthridge KM, Spangenberg GC (accepted subject to minor revision) Characterisation of novel perennial ryegrass host Neotyphodium endophyte associations. Crop and Pasture Science. Wang J, Pembleton LW, Baillie RC, Drayton MC, Hand ML, Bain M, Sawbridge TI, Spangenberg GC, Forster JW, Cogan NOI (accepted subject to minor revision) Development and implementation of a multiplexed SNP genotyping tool for differentiation of ryegrass species and cultivars. Molecular Breeding. PAPERS IN REFEREED CONFERENCE PROCEEDINGS Abeynayake SW, Panter S, Chapman R, Webster T, Rochfort S, Mouradov A, Spangenberg G (2012) Biosynthesis of proanthocyanidins in white clover flowers: cross talk within the flavonoid pathway. Proceedings of the Australasian Dairy Science Symposium 2012, Melbourne, Australia. p.73. Abeynayake SW, Panter S, Mouradov A, Spangenberg G (2012) A highresolution method for the localization of pronathocyanidins in plant tissues. Proceedings of the Australasian Dairy Science Symposium 2012, Melbourne, Australia. p.64. Cogan NOI, Shinozuka H, Sawbridge TI, Spangenberg GC, Forster JW (2012) Development of a transcriptomeatlas for perennial ryegrass (Lolium perenne L.). Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.76. u 45

48 PUBLICATIONS CONTINUED Cogan NOI, Shinozuka H, Sawbridge TI, Spangenberg GC, Forster JW (2012) Whole genome sequencing of perennial ryegrass (Lolium perenne L.) supports exome assembly for gene and SNP catalogue development. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.77. Cogan NOI, Hand ML, Drayton MC, Baillie RC, Forster JW (2012) Accelerated genomics in allotetraploid white clover (Trifolium repens L.) based on highthroughput sequencing. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.81. Cogan NOI, Pembleton LW, Hayes B, Daetwyler H, Wang J, Spangenberg G, Forster JW (2013) Genomic selection of forage grasses. Australian Grasslands Association Perennial Grasses in Pasture Production Systems Symposium, Australian National University, Canberra, Australia. p.17. Crowther A, Rochfort S, Kaur J, Maher A, Le T, Forster J, Spangenberg G (2013) LCMS profiling of endophyte metabolism in planta and in vitro. Proceedings of the 24th Biennial Australian and New Zealand Society for Mass Spectrometry (ANZSMS24), Trinity College, Parkville, Australia. Davidson SE, Sawbridge TI, Rabinovich M, Kaur J, Forster JW, Guthridge KM, Spangenberg GC (2012) Pangenome analysis of perennial ryegrass endophytes. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.63. Davidson SE, Sawbridge TI, Rabinovich M, Kaur J, Forster JW, Guthridge KM, Spangenberg GC (2012) Pan-genome analysis of perennial ryegrass endophytes. Proceedings of the 8th International Symposium on Fungal Endophytes of Grasses, Lanzhou, China. P302. De Lucas JA, Forster JW, Smith KF, Spangenberg GC (2012) Assessment of gene flow in white clover (Trifolium repens L.) under field conditions in Australia using phenotypic and genetic markers. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.74. Ekanayake PN, Hand ML, Spangenberg GC, Forster JW, Guthridge KM (2012) Genetic diversity and host specificity of fungal endophyte taxa in fescue pasture grasses. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.84. Ekanayake PN, Sawbridge TI, Guthridge KM, Forster JW, Spangenberg GC (2012) Systems biology of alkaloid biosynthesis in fungal endophytes of tall fescue (Lolium arundinaceum Schreb.). Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.62. Ekanayake PN, Sawbridge TI, Guthridge KM, Forster JW, Spangenberg GC (2012) Systems biology of alkaloid biosynthesis in fungal endophytes of tall fescue (Lolium arundinaceum Schreb.). Proceedings of the 8th International Symposium on Fungal Endophytes of Grasses, Lanzhou, China. P304. Elkins A, Rochfort S, Tian P, Kaur J, Le T, Forster J, Spangenberg G (2013) Metabolic profiling of endophyte-tall fescue associations: response to drought assessed by LCMS and DIMS. Proceedings of the 24th Biennial Australian and New Zealand Society for Mass Spectrometry (ANZSMS24), Trinity College, Parkville, Australia. Giordano A, Cogan NOI, Kaur S, Mouradov A, Panter S, Mason J, Spangenberg G (2012) Lignin biosynthesis in Paspalum dilatatum: isolation and characterization 46

49 of cinnamoyl CoA reductase. Proceedings of the Australasian Dairy Science Symposium 2012, Melbourne, Australia. p.71. Giordano A, Cogan NOI, Kaur S, Mouradov A, Panter S, Mason J, Spangenberg G (2012) Gene discovery and molecular marker development based on highthroughput transcriptome sequencing in Paspalum dilatatum Poir. Proceedings of the Australasian Dairy Science Symposium 2012, Melbourne, Australia. p.72. Hand ML, Cogan NOI, Forster JW (2012) Genome-wide SNP identification in multiple morphotypes of allohexaploid tall fescue (Festuca arundinacea Schreb.). Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.79. Hand ML, Cogan NOI, Forster JW (2012) Molecular characterisation and analysis of genetic diversity within a globally distributed collection of tall fescue (Festuca arundinacea Schreb.). Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.82. Hand ML, Shinozuka H, Cogan NOI, Forster JW (2012) Comparative genomic analysis of five diploid grasses from the Festuca- Lolium species complex. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.80. Hayes B, Cogan NOI, Pembleton LW, Goddard ME, Spangenberg GC, Forster JW (2013) Prospects for genomic selection in forage plant species. Plant and Animal Genome XXI, San Diego, California. W278. Kaur J, Ekanayake PN, Forster JW, Guthridge KM, Spangenberg GC (2012) Analysis of compatibility and stability in designer endophyte grass associations between tall fescue and Neotyphodium coenophialum. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.59. Kaur J, Ekanayake PN, Rabinovich M, Ludlow EJ, Tian P, Rochfort SJ, Guthridge KM, Forster JW, Spangenberg GC (2012) Analysis of compatibility and stability in designer endophyte grass associations between perennial ryegrass and Neotyphodium species. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.60. Kaur J, Ekanayake PN, Rabinovich M, Ludlow EJ, Tian P, Rochfort SJ, Guthridge KM, Forster JW, Spangenberg GC (2012) Analysis of compatibility and stability in designer endophyte grass associations between perennial ryegrass and Neotyphodium species. Proceedings of the 8th International Symposium on Fungal Endophytes of Grasses, Lanzhou, China. P306. Le T-N, Latipbayeva G, Rochfort SJ, Guthridge KM, Forster JW, Spangenberg GC (2012) Antifungal activities of ryegrass and fescue endophytes. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.75. Le T-N, Ludlow EJ, Davidson SE, Sawbridge TI, Guthridge KM, Forster JW, Spangenberg GC (2012) De novo generation of genetic diversity in Neotyphodium grass fungal endophytes based on colchicine treatment. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.90. Le T-N, Ludlow EJ, Davidson SE, Sawbridge TI, Guthridge KM, Forster JW, Spangenberg GC (2012) De novo generation of genetic diversity in Neotyphodium grass fungal endophytes based on colchicine treatment. Proceedings of the 8th International Symposium on Fungal Endophytes of Grasses, Lanzhou, China. P307. Le T-N, Ludlow EJ, Davidson SE, Sawbridge TI, Guthridge KM, Forster JW, Spangenberg GC (2012) De novo generation of genetic diversity in Neotyphodium grass fungal endophytes based on X-ray mutagenesis. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.89. Le T-N, Ludlow EJ, Davidson SE, Sawbridge TI, Guthridge KM, Forster JW, Spangenberg GC (2012) De novo generation of genetic diversity in Neotyphodium grass fungal endophytes based on X-ray mutagenesis. Proceedings of the 8th International Symposium on Fungal Endophytes of Grasses, Lanzhou, China. P308. u researcher Dr Jatinder Kaur 47

50 PUBLICATIONS CONTINUED Le T-N, Latipbayeva G, Rochfort SJ, Guthridge KM, Forster JW, Spangenberg GC (2012) Antifungal activities of ryegrass and fescue endophytes. Proceedings of the 8th International Symposium on Fungal Endophytes of Grasses, Lanzhou, China. P214. Panter SN, Chu PG, Ludlow E, de Lucas Arbiza A, Rochfort S, Mouradov A, Smith KF, Spangenberg GC (2012) Molecular breeding of transgenic white clover (Trifolium repens L.) with field resistance to alfalfa mosaic virus through the expression of its coat protein gene. Proceedings of the Australasian Dairy Science Symposium 2012, Melbourne, Australia. p.66. Louie GV, Bowman ME, Tu Y, Mouradov A, Spangenberg GC, Noel JP (2012) Structure-function analysis of caffeic acid O-methyltransferase from perennial ryegrass (Lolium perenne L.). Proceedings of the Australasian Dairy Science Symposium 2012, Melbourne, Australia. p.70. Pembleton LW, Cogan NOI, Wang J, Forster JW (2012) Computational tools for genomics-assisted forage plant breeding. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.58. Pembleton LW, Cogan NOI, Wang J, Forster JW (2012) High-throughput automated low-cost quantification of individual water soluble carbohydrates and protein in grass forage. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.78. Pembleton LW, Cogan NOI, Wang J, Forster JW (2013) Advanced phenomics and genomics-assisted breeding of ryegrass. Australian Grasslands Association Perennial Grasses in Pasture Production Systems Symposium, Australian National University, Canberra, Australia. p.18. Rahimi-Ashtiani S, Sahab S, Panter S, Shang Y, Mason JG, Spangenberg GC (2012) Biosynthesis of proanthocyanidins in white clover: single cell omics for designing pathway re-programming. Proceedings of the Australasian Dairy Science Symposium 2012, Melbourne, Australia. p.85. Rochfort SJ, Tian P, Ekanayake PN, Kaur J, Forster JW, Guthridge KM, Spangenberg GC (2012) Metabolic profiling of novel Neotyphodium endophytes in tall fescue (Festuca arundinacea Schreb.). Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.61. Rochfort SJ, Tian P, Ekanayake PN, Kaur J, Forster JW, Guthridge KM, Spangenberg GC (2012) Metabolic profiling of novel Neotyphodium endophytes in tall fescue (Festuca arundinacea Schreb.). Proceedings of the 8th International Symposium on Fungal Endophytes of Grasses, Lanzhou, China. P303. Rossello FJ, Cogan NOI, Mason J, Spangenberg GC (2012) Characterisation of a nodule enhanced malate dehydrogenase gene from white clover (Trifolium repens L.). Proceedings of the Australasian Dairy Science Symposium 2012, Melbourne, Australia. p.69. Rossello FJ, Cogan NOI, Mason J, Spangenberg GC (2012) Characterisation of a phosphate transporter gene from white clover (Trifolium repens L.). Proceedings Australasian Dairy Science Symposium 2012, Melbourne, Australia. p

51 Schultz L, Gomes-Cardoso P, Rochfort SJ, Forster JW, Guthridge KM, Spangenberg GC (2012) Novel endophyte discovery and characterisation in Brachiaria species. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.87. Schultz L, Sawbridge TI, Gomes- Cardoso P, Forster JW, Guthridge KM, Spangenberg GC (2012) Pan-genome of Brachiaria endophytes. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.88. Shinozuka H, Ran Y, Sawbridge TI, Cogan NOI, Spangenberg GC, Forster JW (2012) Systems biology analysis of gametophytic self-incompatibility in perennial ryegrass. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.56. Spangenberg GC (2012) Systems biology of grass-endophyte symbiota. Proceedings of the 8th International Symposium on Fungal Endophytes of Grasses, Lanzhou, China. [Invited keynote lecture]. Suseno N, Cogan NOI, Kaur S, Mouradov A, Panter S, Mason JG, Spangenberg GC (2012) Gene discovery and molecular marker development based on highthroughput transcriptome sequencing in Brachiaria brizantha (Hochst ex. A. Rich) Proceedings of the Australasian Dairy Science Symposium 2012, Melbourne, Australia. p.67. Tian P, Kaur J, Guthridge KM, Rochfort SJ, Forster JW, Spangenberg GC (2012) Metabolome analysis of symbiota established with novel Neotyphodium endophytes in a diverse panel of isogenic perennial ryegrass host genotypes. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.86. Wang J, Cogan NOI, Pembleton LW, Forster JW (2012) Differentiation of perennial and Italian ryegrasses at both species and cultivar specific levels using multiplexed SNP markers. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.83. Wang J, Cogan NOI, Pickett D, Elton R, Pembleton LW, Forster JW (2012) Phenotypic assessment of yield and nutritive values of Italian ryegrass (Lolium multiflorum) from a spacedplant field trial. Proceedings of the Fifth Australasian Dairy Science Symposium, Melbourne, Australia. p.57. BOOK CHAPTERS AND BOOKS Forster JW, Cogan NOI, Abberton MT (in press) White clover (Trifolium repens L.): biology, agronomy, genetics, genomics and molecular breeding. In: Encyclopaedia of Plant Genomics (Ed. C Kole). Goh PA, Verma PJ (in press). Generation of induced pluripotent stem cells from mouse adipose tissue Mouse Genetics: Methods and Protocols. In: Methods in Molecular Biology. (Ed. RS Singh) (Humana Press NY). Hayes B (2013) Overview of Statistical Methods for Genome-Wide Association Studies (GWAS). In: Methods in Molecular Biology. (Eds. C Gondro, B Hayes, J Van Der Werf) (Humana Press NY). Jain K, Verma PJ, Liu J (in press). Isolation and handling of mouse embryonic fibroblasts Mouse Genetics: Methods and Protocols. In: Methods in Molecular Biology. (Ed. RS Singh) (Humana Press NY). Malaver-Ortega LF, Taheri A, Sumer H (in press). Inducing pluripotency in cattle Cell reprogramming, induced pluripotency and nuclear transfer. In: Methods in Molecular Biology. (Eds. S Huseyin, PJ Verma) (Humana Press NY). Sumer H, Verma PJ (in press) ES-Somatic cell fusion and post-fusion enucleation Nuclear reprogramming. In: Methods in Molecular Biology. (Eds. N Beaujean, H Jammes, A Jouneau) (Humana Press NY). Taheri A, Malaver-Ortega LF, Sumer H (in press). Genome modification of pluripotent cells by using transcription activator-like effector nucleases (TALENs) Cell reprogramming, induced pluripotency and nuclear transfer. In: Methods in Molecular Biology (Eds. S Huseyin, PJ Verma) (Humana Press NY). THESES Giordano, AM (2013) Functional genomics of lignin biosynthesis in Paspalum dilatatum. PhD thesis, La Trobe University, Melbourne. Hand ML (2012) Genome evolution, genetic diversity and molecular breeding of tall fescue (Festuca arundinacea Schreb.). PhD thesis, La Trobe University, Melbourne. Vander Jagt CJ (2013) Comparative analysis of marsupial and eutherian genomes to identify genes critical in milk production. PhD thesis, University of Melbourne, Melbourne. 49

52 GLOSSARY AND ABBREVIATIONS GLOSSARY Australian Breeding Value An estimate of the genetic merit of dairy cows and bulls, based on 30 years of performance records collected in Australia. Biomass A measure of the yield of pasture. This can be measured either by visual scoring or cut-and-weighing methods. Biotechnology (also bioscience technology) the use of biological systems living things to make or change products. It includes both traditional biotechnology, such as baking bread, brewing beer and making cheese, and modern biotechnology (also called gene technology) that includes the discovery of genes (genomics), understanding gene functions and interactions (functional genomics), use of DNA markers and genetic modification, which includes controlling gene activity, modifying genes and transferring genes. Calving interval The average interval between two consecutive calvings (measured in days). When an animal has a longer calving interval compared with her herd mates, it suggests she is less fertile. Cultivar A commercially-bred (cultivated) variety of pasture that is distinct from all other varieties. Days from calving to first service The interval between calving and first recorded mating date. This is an indicator of whether the cow is cycling again. Days to first mating The number of days from calving to the first mating record. Digestibility A measure of how easily a grass is digested and absorbed by an animal. DNA-based marker A known variation in the DNA sequence that is associated with key features of an animal or plant. 50

53 ABBREVIATIONS DNA sequence The order of nucleotides (units) of DNA. Dry matter The material remaining in a biological (fodder or pasture) sample after the water content has been removed. Endophyte A naturally-occurring fungus that lives in a symbiotic (win win) relationship with a host plant, such as ryegrass, obtaining nutrients from it and in return providing protection from insect pests and from overgrazing by animals. Fructan The main storage form of sugars in grass plants. Gene A segment of DNA that carries the instructions for a heritable trait. Gene expression The process by which heritable information from a gene is made into a functional gene product, such as protein. Gene technology The modern application of biotechnology and includes the discovery of genes (genomics), understanding gene functions and interactions (functional genomics), use of DNA markers and genetic modification, which includes controlling gene activity, modifying genes and transferring genes. Genome The entire genetic make-up, or all the genes, of an organism. For animals and plants this information is encoded in the DNA sequence. Genomic breeding value Breeding values for young cows or bulls that do not have milking daughters, based on genomic and pedigree data alone. Genomics The large-scale use of DNA information to estimate the genetic merit of cattle or plants. This includes knowledge of differences in DNA sequences of individual cattle or plant cultivars and associating these differences with actual performance. Genotype Noun: The genetic make-up of an individual. Verb: The process of taking a tissue sample (e.g. tail hair from an animal or leaf from a plant) and extracting then analysing the DNA for important markers. Germplasm Living tissue from which new plants can be grown (e.g. a seed or leaf). Germplasm contains the information for a cultivar s genetic make-up. Metabolisable energy The energy available in feed that can be used by livestock. It is made up of the energy that can be digested by the animal, less energy lost through urine and the production of methane. Phenotype The observable traits or characteristics of an organism. Proteins Large organic compounds made of amino acids. They are essential parts of organisms and participate in every cellular process. Self-incompatibility The phenomenon through which some flowering plants, such as perennial ryegrass, are unable to successfully reproduce by self-pollination. Stem cell An unprogrammed cell that has the potential to develop into a specialised cell, such as muscle cells, nerve cells etc. ABV Australian Breeding Value ADHIS Australian Dairy Herd Improvement Scheme CRC Cooperative Research Centre DNA Deoxyribonucleic acid (the key component in the storage of genetic information) DEPI Department of Environment and Primary Industries GM Genetically modified / genetic modification IP Intellectual property PhD Doctor of Philosophy SME Small-to-medium sized enterprise 51

54 PUBLISHED BY DAIRY FUTURES CRC. The information published in this document is for the general interest of readers. All material is published with due care and attention and in good faith, but no responsibility can be accepted for omissions, typographical or printing errors or situation changes that may have taken place after publication All rights reserved. Most of the photography in this report was taken by Alison Griffiths. Image of udder on cover by Ross Easterbrook, courtesy Genetics Australia. Image of Dr Mick Blake on p.10 and images of Holsteins on pp.11 and 13 courtesy Dairy Australia. Image of Jerseys on p.11 courtesy Paul and Lisa Mumford, Gippsland, Victoria. Image of AgriBio on p.19 courtesy Department of Environment and Primary Industries Victoria. 52

55 This publication is printed using vegetable based inks. The stock is manufactured using sustainable forestry practices and is elemental chlorine free. The mill has ISO environmental management systems certification. s Annual Report is printed in Australia under ISO Environmental Certifications. 53

56 AgriBio, Centre for AgriBioscience 5 Ring Road, La Trobe University Bundoora Victoria 3083 Tel: Fax: