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Wool Stocktake : AWI Annual Report 2016-17
AWI’S MISSION AWI’s mission is to make strategically targeted investments to: 1. enhance the profitability, international competitiveness and sustainability of the Australian wool industry 2. increase demand and market access for Australian wool. CONTENTS UP FRONT 2 4 5 6 8 9 About AWI Highlights of 2016/17 Financial summary AWI Board of Directors Chairman’s report CEO’s report OPERATIONAL REPORTS 10 22 34 40 48 52 Marketing Sheep Production Woolgrower Services Processing Innovation & Education Extension Business Services Good business FINANCIAL REPORT 60 63 65 66 67 68 69 87 88 Directors’ report Auditor’s independence declaration Consolidated statement of comprehensive income Consolidated balance sheet Consolidated statement of changes in equity Consolidated statement of cash flows Notes to the consolidated financial statements Directors’ declaration Independent auditor’s report APPENDICES 90 92 Report on compliance with the SFA Project list 2016/17 ABOUT AWI WHAT AWI DOES Established in 2001, AWI is a not-for-profit company owned by more than 23,000 wool levy payers who have registered as AWI shareholders. The company invests along the global supply chain for Australian wool – from woolgrowers through to retailers. AWI’s vision is for it to be a highly valued contributor to a vibrant, profitable and sustainable Australian wool industry. AWI’s goal is to increase the profitability, and support the sustainability of the Australian wool industry through strategically targeted investments in research, development and marketing designed to optimise return on investment. In working towards this goal AWI always strives to deliver an appropriate return on woolgrowers’ and Government’s investment of levies. AWI invests in Research, Development, Extension and skills training from farm to fashion; Marketing; and Global Business Services. AWI is not a peak industry body, does not create or execute industry policy, and is not an advocate on issues outside its core functions. HOW AWI IS FUNDED AWI investments are funded through a wool levy paid by woolgrowers (currently two per cent of the sale price received for their shorn greasy wool) and a matching contribution from the Australian Government for eligible R&D activities, capped at 0.5 per cent of the gross national value of wool production. The sale of Woolmark licences is a further source of income for AWI. Woolgrowers vote every three years on the percentage of wool proceeds they would like to invest in industry research, development and marketing activities. In WoolPoll 2015, woolgrowers voted in favour of a two per cent levy. The next WoolPoll vote is in 2018. An agreement exists between AWI and the Australian Government, called the Statutory Funding Agreement, which defines the conditions under which AWI may invest levy and Government- matched funds. BUSINESS MODEL In both WoolPoll 2012 and Wool Poll 2015, wool levy payers voted to continue the wool levy at two per cent for the three-year periods 2013/14–2015/16 and 2016/17–2018/19 respectively. The current allocation of funds is as follows: RESEARCH & DEVELOPMENT 40% MARKETING 60% HOW AWI HAS EVOLVED On 1 January 2001, Australian Wool Services (AWS) replaced the Australian Wool Research and Promotion Organisation (AWRAP), which had been operating since 1993. AWS was established with two subsidiaries: AWI and The Woolmark Company Pty Ltd. On 30 April 2002 AWI separated from AWS to become a fully independent public company limited by shares. In October 2007, AWI acquired The Woolmark Company Pty Ltd from AWS. Most notably, AWI became the owner of the Woolmark brand – the world’s best-known textile fibre brand. 2 UP FRONT
AWI Annual Report 2015-16