ANNUAL REPORT 3453657 - · PDF fileList of Abbreviations ... (ASEL), the Fremantle pre ......

Australian Livestock Export Corporation Limited

ANNUAL REPORT 2012-13

Table of Contents

About LiveCorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Chairman’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Planning Roadmap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2012-13 Performance Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Strategic Objective 1 - Animal Welfare . . . . . . . . . . . . . . . . . . . . . . . .10

Strategic Objective 2 - Supply Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Strategic Objective 3 - Market Access . . . . . . . . . . . . . . . . . . . . . . . .14

Strategic Objective 4 - Communications . . . . . . . . . . . . . . . . . . . . . 15

Strategic Objective 5 - Corporate Governance . . . . . . . . . . .16

Research, Development and Extension . . . . . . . . . . . . . . . . . . . . . . . . .18

Supply Chain Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Dairy Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

Services and Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Compliance Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

Membership Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Financial Annual Report

Directors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Auditor’s Independence Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Statement of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . .34

Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Statement of Changes in Equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

Directors’ Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48

Audit Compliance Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Livestock Export by Destination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51

List of Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

CONTENTS

1

ABOUT LIVECORP

The Australian Livestock Export Corporation Limited

(LiveCorp) is a not-for-profit industry body owned and

funded through contributions by livestock exporters.

It is primarily funded by statutory levies on exports of

beef cadle, sheep and goats. A voluntary levy is also

received for dairy cadle exports.

The current levy rates are:

Beef cadle - $0.009523 per kg

Sheep - 60 cents / head

Goats - 50 cents / head

Dairy cadle - $3 per head (voluntary)

Through its investment of these levies, LiveCorp

provides research, development and extension (RD&E),

marketing, training and communications services to the

Australian livestock export industry, working closely with

stakeholders to continuously improve industry operations.

LiveCorp’s Mission

LiveCorp’s mission is to enhance the productivity,

sustainability and competitiveness of Australia’s

livestock export industry by undertaking RD&E,

providing technical services/support and monitoring

and reporting on programs and issues that facilitate:

Continuous improvement in livestock management,

health and welfare throughout the supply chain;

Improved market access and market development

for Australian livestock exporters; and

Improved efficiency and productivity in the livestock

export industry’s supply chain capability and

performance.

LiveCorp’s Strategic Objectives

To deliver against its mission, LiveCorp has five key

strategic objectives. These strategic objectives align

with the Red Meat Industry Strategic Plan (RMISP) and

the Australian Livestock Exporters’ Council (ALEC)

Strategic Plan and aim to increase opportunities to

partner with Meat and Livestock Australia (MLA)

through the Livestock Export Program (LEP).

The five strategic objectives are:

Improve animal health and welfare

outcomes throughout the supply chain

Improve supply chain efficiency

and regulatory performance

Enhance market access conditions

for existing and new markets

Enhance communication providing

information and services on program

progress and issues to industry

and government

Improve corporate operations governance,

planning, evaluation and review to ensure

efficient and effective investment

2

Aler nine years of service to the LiveCorp board and

the livestock export industry, I am pleased to report

on its annual achievements for the final time. It is with

significant pride that I am able to report that LiveCorp

has delivered well above the expectations of its 2012 –

2013 Annual Operating Plan (AOP) to meet the needs of

its members.

As per previous years, LiveCorp maintained its strong

investment through the Livestock Export Program

(LEP) with Meat and Livestock Australia (MLA). This

continues to be the largest allocation of LiveCorp

resources through which RD&E and in-market services

in support of LiveCorp’s strategic objectives are

delivered. MLA is the major partner in the LEP and as

my time with LiveCorp closes I would like to take this

opportunity to thank MLA for its strong partnership

and unerring support. The LEP remains a true example

of collaboration to deliver beder benefits for producers

and exporters.

The achievements of the LEP were significant as it

continued to support the adoption and roll-out of the

Exporter Supply Chain Assurance System (ESCAS)

to encompass every market for Australian feeder/

slaughter livestock. Its expansion included markets

such as Israel, Japan, Jordan, Oman, Philippines, United

Arab Emirates, Vietnam, Mauritius and Russia: as well as

the dominant goat markets of Malaysia and Singapore.

The LEP in-market managers for Indonesia, the Middle

East and North Africa (MENA) and South-East Asia (SEA)

delivered key animal welfare programs in line with the

LiveCorp/LEP AOP to facilitate ESCAS adoption and

ongoing improvements in its performance.

The three major streams of activities were the

in-market gap analyses, risk analyses and animal

welfare training which formed the basis of a simple and

effective improvement cycle. Gap analyses informed

and prepared supply chains to meet ESCAS standards;

risk analyses identify and address risks or exposures

in operational ESCAS supply chains (and allowing for

improvements over and above the normative ESCAS

standards); and ongoing training to equip individuals

with new knowledge and lifelong skills in animal welfare

and animal handling to exceed ESCAS requirements.

I note in particular the achievement of the LEP

in-market managers and their consultants in

delivering best practice animal welfare, animal

husbandry and handling training to more than 3000

supply chain participants and stakeholders since the

implementation of ESCAS.

This contribution to the pursuit of global animal welfare

improvements is generational and I commend them for

their work on the ground driving these global changes.

The LEP in-market managers also deserve

commendation for their outstanding work in managing

critical incidents that have occurred. The rejection of a

consignment in Bahrain and the subsequent needless

and devastating slaughter of livestock in Pakistan was

a major incident that affected many within the industry.

LEP in-market managers were also critical in responding

to ESCAS breaches in Malaysia and Indonesia, as well

as evidence of animal cruelty in Egypt. This support

involved helping exporters and importers to identify

where systems had failed and to take immediate

corrective action and training to resolve them.

Domestically, a key focus for the LEP and LiveCorp was

engaging with the Australian Government in a wide range

of processes in considering the implementation of the

Farmer Review recommendations and other regulatory

assessments. These included the reviews of the

Australian Standards for the Export of Livestock (ASEL),

the Fremantle pre-inspection procedures, Marine Order

43, the Mark IV Restraint Box and the consignment risk

management processes.

In 2013-14 the LEP will continue to address these reviews

while also targeting opportunities to improve the

efficiency of the regulations governing the trade. In both

ESCAS and ASEL there are significant opportunities for

improvements. It will be vital that all proposed changes

are able to be justified by rigorous evidence and good

science. They also need to support animal welfare

improvements as well as the productivity, profitability

and sustainability of the trade.

The LEP RD&E Program continued to deliver enabling

science to underpin LiveCorp and LEP programs and

to increase the knowledge base and understanding

of challenges facing the industry. Services range

from training DVDs, development of a salmonella

vaccine, practical experiments to better understand

inanition, as well as the preparatory work on Quality

Assurance for both ESCAS and ASEL. It is from

this platform of science that LiveCorp and the LEP

are able to identify the changes that will carry the

industry forward and continue to improve its success

and performance in the future.

It also proved to be a challenging year for market access,

with established markets changing the conditions of

access and ESCAS introducing a new complexity to

gaining access in new markets.

CHAIRMAN’S REPORT

3

In the past, the industry would initially have faced

questions about Australia’s animal health status and

basis for certification, but these discussions are now

saddled with the added complexity of explaining and

gaining acceptance of the Australian regulation.

With drought and declining terms of trade in 2012-13,

the need to open markets became a significant

driver of LiveCorp’s activities. The difficulties in

building understanding and acceptance of ESCAS

and then negotiating health conditions, presented

a significant barrier. However, I remain positive that

industry can work with the Australian Government to

overcome these difficulties and open significant new

opportunities in 2013-14.

From a corporate governance perspective, the LiveCorp

Board remained commided to implementing operational

efficiencies in order to deliver the widest possible

range of services within its limited (declining) financial

resources. In order to achieve further cost savings and

efficiencies as outlined in 2011-2012, LiveCorp delivered

on its commitment to reduce the size of the Board. The

management team also continued to embed a culture

of cuding costs and creating operational savings to

maximise program allocations. These efficiencies

delivered a further 8% decline in operational expenses

and an equivalent increase in program expenditure during

the reporting period. I commend the management team

on their tireless work and dedication in achieving this

outcome under extreme external pressures, while dealing

with a decline in overall exports and levy revenue.

During my time as Chairman I have been moved by the

people I have met and the changes that both individuals

and the industry have embraced to ensure future

viability. I would like to thank them and emphasise that

the success of the trade is built around strong and deep

relationships across all parties within the supply chain.

These relationships are the true measures of success

and underpin trust, assurance and stability.

In conclusion, I offer my prediction that within a decade,

we will look back to 2011-13 as the start of the most

significant improvements to animal welfare experienced

globally; instigated through the commitment of the

Australian live animal export industry and support of

the Australian Government . We will also see the changes

driven by the live export industry and its importers

under ESCAS for what they are – the single biggest

impact on net global animal welfare improvements ever

achieved. I wish the Australian live animal industry every

success for the future.

Dr. Raoul Nieper A.M.

Chairman

4

PLANNING ROADMAP

Red Meat Industry Memorandum of Understanding (MoU)

The Australian Livestock Exporters’ Council (ALEC) and the Australian Livestock Export Corporation (LiveCorp)

are signatories to the MoU. The Red Meat Advisory Council (RMAC) is the custodian of the MoU.

Meat Industry Strategic Plan

Guaranteeing vital food for the nation and the world – the Meat Industry Strategic

Plan (2010–15) for the Australian red meat industry from which whole-of-industry

strategic imperatives were identified and from which the individual sectors and their

sector companies are able to focus their own strategic and operational plans.

RMAC is the custodian of the Meat Industry Strategic Plan.

Livestock Export Industry Five Year

Strategic Plan 2010–14

This plan is set in the context of the MoU and

the Meat Industry Strategic Plan. ALEC is the

custodian of the Livestock Export Industry

Strategic Plan.

Australian Livestock Export Corporation

(LiveCorp) Strategic Plan 2011–14

This plan is set in the context of the MoU, the

Meat Industry Strategic Plan, the Livestock

Export Industry Strategic Plan, the Statutory

Funding Agreement (SFA) and identified

Government priorities. The LiveCorp Board is the

custodian of the LiveCorp Strategic Plan.

Australian Livestock Exporters’ Council

Strategic Plan

This plan is set in the context of the MoU and the

Meat Industry Strategic Plan. The ALEC Board is

the custodian of the ALEC Strategic Plan.

The Statutory Funding Agreement (SFA)

The SFA between LiveCorp and the Australian

Government recognises LiveCorp as the

marketing and research body for the livestock

export industry.

Government priorities

LiveCorp must align to and deliver upon these

priorities principally, but not exclusively, where

matching Australian Government funding is

provided, including:

National and Rural Research and Development

Priorities.

The development of the National R,D&E

framework.

Program evaluation and measurement.

Program cost allocation principles.

Reporting.

Livestock Export Program (LEP)

In conjunction with MLA and through the

LEP, LiveCorp is involved with a wide range

of livestock export industry programs and

initiatives that are delivered through the

LiveCorp and MLA Annual Operating Plans.

6

Volumes and Values

Export volumes in 2012-13 recorded a

further decline for caQle, sheep and goats

volumes year-on-year. The decline in

caQle volumes to both Indonesia and the

Middle East and North Africa (MENA) are

a result of a number of factors including

historically low export quotas, disruptions

associated with the voluntary suspension

of trade to various key markets and strong

competition from other exporting nations.

CaQle

In 2012-13, 633,703 cadle worth $589 million were

exported live from Australia, representing a 7 percent drop

in numbers and a 10 percent drop in value year-on-year.

In addition to reduced import quotas to Indonesia over the

reporting period (down from 286,000 in 2012 to 271,328

in 2013), the failed wet season and dry conditions across

northern Australia resulted in a rapid turn-off of cadle.

Market limitations such as import quotas and the

continued establishment of ESCAS, have restricted

exporters’ ability to place livestock in export markets,

compounding the hardship faced by producers with

declining farm gate returns.

However, other markets within South East Asia such as

Malaysia, Philippines and Vietnam have shown promising

signs of being valuable market outlets for heavier cadle.

The LEP will continue to develop programs to support

this growth.

INDUSTRY OVERVIEW

Export Volume

Export Value

● Ca$le 23%

● Sheep 75%

● Goats 2%

● Ca$le 74%

● Sheep 25%

● Goats 1%

0

200,000

400,000

600,000

800,000

1,000,000

Global TradeOtherMENAMalaysiaIndonesia

Ca,le Exports by Destination

● 2010-11 ● 2011-12 ● 2012-13

2012-13(2,753,463 head)

2012-13($797 million)

7

Sheep

Nearly 2.1 million sheep worth $201 million were exported

live in 2012-13, representing a 20 percent fall in volume

and a 42 percent decline in value compared to 2011-12.

Whilst ESCAS has played a role in suppressing sheep

exports (as importing countries work through the details

and reporting obligations), the voluntary suspension of

exports to Bahrain has been a major contributing factor

to the decline. Whilst the reestablishment of the trade

to Bahrain remains a priority, shipping logistics have also

been disrupted and Gulf markets prefer to receive small

but regular consignments.

Much of Australia was experiencing very dry conditions

throughout the year, which meant that by summer, many

producers were lel with lidle choice but to sell lambs

that may have otherwise been held for a longer period

or further breeding. The large number of lambs reaching

the market at the same time resulted in lamb prices

falling sharply from mid-2012 to early 2013.

Market opportunities in Turkey, Iran and Saudi Arabia

represent significant prospects for increasing export

volumes in the short to medium term. Sheep exports to

Bahrain fell 84 percent year-on-year from 386,941 to

62,250 head, while Kuwait has declined 23 percent from

901,486 to 693,265 head and Turkey reporting a decline

of 57 percent from 292,598 to 125,067 head.

Two markets, however, have increased their imports in

2012-13: Qatar imports have increased 29 percent from

456,436 to 588,078 head, while a one off consignment

was reported to Saudi Arabia of 69,000 head.

Goats

In 2012-13 goat exports decreased 14 percent to 62,075

(subject to revision). The total value of these exports was

$7.2 million which is a decline of 26% on the 2011-12 earnings.

Malaysia was again the primary market for live goats,

followed by Singapore and Brunei. Goat exporters

report strong demand fundamentals as a result of low

domestic goat numbers within the South East Asian

region (Thailand and Myanmar).

Goat Exports by DestinationSheep Exports by Destination

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Global TradeOtherMalaysia0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Global TradeOtherQatarKuwaitJordan

● 2010-11 ● 2011-12 ● 2012-13● 2010-11 ● 2011-12 ● 2012-13

“Exporters’ inability to place

livestock in export markets

has compounded the hardship

faced by producers.”

8

How LiveCorp delivers against its

Strategic Objectives

LiveCorp invests levy funds into key program areas

to deliver against the strategic objectives set in the

LiveCorp Strategic Plan 2013-15 and 2012-13 AOP.

Each year LiveCorp and MLA, in close consultation with

exporters and the relevant peak councils, prepare and

finalise the LEP AOP to ensure that LEP activities align

with each organisation’s strategic objectives.

Within the LEP, activities are delivered through three

core programs:

In-market supply chain efficiency, animal health/

welfare and market access programs

There are three in-market programs that deliver animal

health and welfare services, technical and market access

support overseas. They are Indonesia, South-East Asia

and the Middle East and North Africa (MENA).

The Indonesia program is delivered through the

MLA Jakarta office which is jointly funded through

MLA meat and livestock export programs. The office

is headed by a Regional Manager, with the LEP animal

welfare program overseen by the Indonesia Animal

Welfare Manager.

The MENA Livestock Services Manager is located in

Dubai, while the South East Asia Livestock Services

Manager is based in Sydney.

MLA is the primary contributor to the LEP

in-country programs.

Industry Capability Program

The Industry Capability Program is responsible for

domestic supply chain activities, including working with

government and industry to provide advice and support

on regulatory maders and operational issues.

It also works closely with the Australian Government to

pursue market access protocol developments, including

through the coordination of the industry/government

Protocol Commidee.

RD&E Program

Outputs from the LEP RD&E program deliver directly

against LiveCorp’s Strategic Objectives (1-3), as well as

enabling and supporting other LEP/LiveCorp programs

to deliver against these objectives.

Through the joint investment in the RD&E program,

LiveCorp and MLA achieve efficiencies by using the

existing MLA research framework and systems.

The RD&E program coordinates the management

and completion of a range of projects targeted at

industry priorities.

The priorities for the RD&E program are set in the LEP

Strategic Plan and focus on projects that will address

key areas of risk or hazard across the program areas

(animal health and welfare, supply chain efficiency and

regulatory performance and market access).

RD&E projects are assessed and prioritised through

the Livestock Export Research and Development

Advisory Commidee (LERDAC), which is composed

of representatives from LiveCorp, MLA research and

development (R&D), the LEP, the Cadle Council of

Australia (CCA), the Sheepmeat Council of Australia

(SCA), LiveShip, and ALEC. An independent technical

advisor also provides specialist advice to LERDAC on

projects and research proposals.

In addition to the LEP, LiveCorp also invests in the

provision of the following services and programs in

support of its strategic objectives:

Communications

LiveCorp’s communications activities focus on the

effective transfer of information to and between

exporters and key industry stakeholders, including

government. LiveCorp provided this through the

website and other mechanisms such as the industry

circular. The LEP also has its own communications

program through which LiveCorp conducts most of its

communications activities.

Communications with the media and the public are primarily

through the industry’s representative body, ALEC.

LiveCorp Services and Innovation Program

LiveCorp’s Services and Innovation Program supports

industry to increase its capacity to meet and exceed

existing standards, regulation and reporting obligations.

It achieves this by providing training in livestock handling

and compliance requirements to on-board stockpersons.

The Services and Innovations Program also provides

services to assist in the development of improved

information management systems to enhance

communication and create regulatory efficiencies.

2012-13 PERFORMANCE HIGHLIGHTS

9

Corporate Governance

LiveCorp’s corporate governance activities support the efficient and effective management of levy revenue and its

operations. The program ranges from day to day operations and activities in delivering LiveCorp and LEP programs,

administrative obligations under the SFA, ASIC requirements, the Board and associated commidees, and oversight of

management accounts and general industry obligations (AGM etc).

How LiveCorp Invested 2012-13 Levies

Expenditure

● Corporate Operations 33%

● Services & Innovations 2%

● Exporter Programs 29%

● MLA LEP 36%

Expenditure($3.275 million)

● Market Access 5%

● Supply Chain 6%

● Animal Welfare 35%

● Communications 3%

● R&D 51%

MLA LEP Program Expenditure

LiveCorp LEP Contribution($1.180 million)

● Statutory Levies 83%

● Dairy Levies 4%

● Investment Income 5%

● Grant Funds 4%

● Other Income 4%

Revenue Streams

Revenue($3.632 million)

10

Strategic Objective 1: Improve

animal health and welfare outcomes

throughout the supply chain

In line with LiveCorp’s Strategic Plan, animal welfare

continued to be a priority in 2012-13, with approximately

20 percent of expenditure allocated to this objective.

Additional animal welfare expenditure also flowed

through the programs delivered under Strategic

Objective 2 - Supply Chain Efficiency and Regulatory

Performance.

The following performance highlights summarise the

animal health and welfare activities of the LEP in-

market programs. Further information on the animal

health and welfare related activities undertaken by the

RD&E, Industry Capability and LiveCorp Services and

Innovation programs are summarised later in this report.

Training

A focus for the in-market programs in 2012-13 was the

delivery of animal health and welfare training to support

exporters and importers achieve ongoing improvements

and compliance with the Exporter Supply Chain

Assurance System (ESCAS).

These training programs continued to promote ESCAS

requirements, OIE guidelines and the adoption of

Standard Operating Procedures (SOPs).

Animal health and welfare training provided across the

in-market programs included:

MENA

Formal and informal (eg. on the job) training was delivered

to 1,100 participants in the MENA region in 2012-13.

Indonesia:

Training was delivered to 809 participants in Indonesia

in 2012-13, taking the total number of participants

trained since September 2011 to over 3000.

South East Asia

Training was provided to 850 participants across the

South East Asian region.

The delivery of this training by the LEP reflects a

significant investment by Australian producers and

exporters to support operators of supply chains in

Australia’s export markets to improve their

knowledge, awareness and skills in animal welfare.

In 2012-13, the RD&E program undertook the

development of standardised training programs for

cadle and sheep focused on delivering uniform training

against SOPs along the supply chain.

The project developed SOPs and training support

materials across the supply chain that reflected the

ESCAS animal welfare checklists.

The relevant modules were:

Port

Transport

Feedlot

Lairage

Slaughter with stunning

Slaughter without stunning

Animal handling

(universal across all supply chain components)

The standardised training programs were piloted in

Indonesia for cadle in October 2012 and in the United

Arab Emirates (UAE) for sheep in February 2013.

Participants included LEP consultants, importers,

exporter representatives and abadoir managers.

The feedback from these sessions allowed the

refinement of the training programs which will be

rolled out further in 2013-14.

These standardised training programs will help align

training across the LEP and support importers and

importing country governments to conduct their own

animal welfare training. Importantly, this program

involves a ‘train the trainer’ module that is critical in

leveraging the industry’s efforts by embedding animal

welfare training capability within foreign countries

receiving Australian livestock.

Gap and risk analysis

On 1 January 2013, all markets for Australian livestock

exports for slaughter or feedloding purposes came

under ESCAS. In the implementation and extension of

ESCAS, it has continued to be a key role for in-market

programs to support exporters to:

Identify areas where new supply chains may need

improvements to ensure compliance with ESCAS

requirements (gap analyses); and

Identify hazards that may develop in existing

operational supply chains, to allow prompt

resolution (risk analyses).

ANIMAL HEALTH AND WELFARE

11

These services were provided throughout 2012-13 at

the request of exporters in each region and included:

MENA

More than 60 gap or risk assessment reports were

completed and provided to exporters. Gap analyses

were undertaken in Algeria, Russia, Turkey, Qatar, Iran,

Israel, and Lebanon. Risk assessments were completed

for supply chains in Oman, Kuwait, Qatar, Israel, Egypt,

Jordan, and UAE. Considerable time and effort was

also spent in developing standardised templates for

these reports to assist with exporter confidence and

confidentiality in reporting.

Indonesia

LEP Indonesia continued to roll-out its risk assessment

and internal monitoring program, with 97 initial risk

assessments completed and an increased adoption

of the supply chain monitoring system. These risk

assessments have provided recommendations to

reduce risks in supply chains, and the strong uptake of

these recommendations was identified.

South East Asia

In the first few months of 2012-13, the LEP focused on

assisting exporters and importers with gap analysis,

training and technical advice to supply chains in

Malaysia, the Philippines and Japan for the introduction

of ESCAS in September 2012. Assistance was also

provided to Brunei and Mauritius, where ESCAS applied

from January 2013. Gap analysis, training and technical

advice was also provided to goat and sheep supply chains

in Malaysia during the year.

Industry Collaborative

Animal Welfare Program

A new LEP initiative in 2012-13 was the introduction of

the Industry Collaborative Welfare Program (ICWP).

This program provided livestock exporters with funding

from the LEP (primarily through MLA) for the placement

of locally engaged animal welfare or supply chain officers

within markets.

The program provided a capped limit of $75,000 per

exporter per region with a maximum of two regions per

exporter. The ICWP program expenditure in 2012-13 was

$309,639 with personnel engaged in the Middle East,

Indonesia and other Asia.

Technical support during festival periods

The LEP in-market programs also provided additional

technical support for key festival periods and included

key activities for:

Ramadan – Indonesia

Eid al Adha – MENA

Korban – SEA

Eid al Adha 2012

The objective for Eid 2012 was to work with Australian exporters, and their supply chain partners, to build on

Eid 2011 initiatives and to deliver improved and more effective systems that meet ESCAS requirements and the

expectations of Australian and overseas stakeholders. At the same time, the focus shiled to providing greater

assistance in the months leading up to Eid to help build livestock handling systems and management structures.

This increased compliance capacity facilitated a relatively smooth transition of ownership and responsibility of

ESCAS to the exporter and importer through the peak Eid period.

The 2012 LEP Eid program was successful with no reported ESCAS non compliances in those markets and

supply chains that requested LEP support and technical advice. In total 17 resources were stationed across

facilities within Kuwait and Qatar and these included a LiveCorp Director, CEO, LEP staff and consultants

along with exporter representatives. The key success factors included: restricting livestock sales to strategic

facilities; not allowing livestock to leave the facility; working with facility management to develop a customer

and livestock management plan; minimising customer / livestock contact; communication plans and strategies

targeting customers.

12

Farmer Review

In 2011, the Farmer Review recommended that a comprehensive review of ASEL be undertaken.

The LEP prepared a comprehensive submission that was prepared in consultation with exporters, ALEC, ALEC’s

state chapters, LiveShip, LiveAir, CCA, SCA and the Goat Industry Council of Australia.

The LEP submission provided comments which noted:

The growth of the current regulatory framework has occurred incrementally over several years, leading to

an increasingly complex web of regulation of differing jurisdictions, purposes and hierarchy. The complexity

of these regulatory arrangements has led to duplication and confusion in their application, increasing the

enforcement and compliance costs for industry and government.

The current structure of ASEL is not in line with best practice regulation. The use of mandatory and

prescriptive standards to ensure operational elements are met has several shortcomings. These include a

focus on operations rather than outcomes; higher enforcement costs; restrictions on innovation; a lack of

flexibility in enforcement/compliance; increased risks of perverse outcomes; difficulty in keeping standards

current; and inconsistent or differing interpretations of ambiguities.

The LEP submission also provided input against the specific items identified in the Terms of Reference for

the ASEL review relating to the export of sheep from southern ports and provided detailed suggestions for

refinements to the existing ASEL clauses.

In addition to its submission to the ASEL review, the LEP also simultaneously provided submissions to the

Fremantle review and the review of the Livestock Export Standards Advisory Group.

These submissions were accompanied by relevant RD&E reports and during the entire review process, the

following relevant new reports were also provided to support the steering commidee and government:

Refining Stocking Densities, 2013

Review of ASEL scoping study – Export of sheep to the Middle East from Southern ports, April 2013

Review of sheep pre-embarkation inspection processes, 2012

Other highlights

Meat quality and welfare seminar series - MENA

During May 2013, the LEP delivered 11 meat quality and

food safety seminars in the Middle East region

(Jordan, Israel, Kuwait, Qatar, Oman, Abu Dhabi and Dubai).

The seminars were delivered by staff and consultants

from the LEP and the Australian Government

Agricultural Counsellor for the Middle East. The focus

of the events was on the Australian meat production

supply chain and general factors that influence meat

quality. A particular emphasis was also placed on the

links between good animal welfare and low stress animal

handling and improved meat quality. Adendees at the

seminars included Government authorities,industry

bodies and interested importers. The seminars provided

an excellent opportunity to reinforce relationships (both

for Government and the LEP) with importing country

Government representatives.

Technical advice – MENA / Indonesia / South East Asia

In addition to the technical advice on ESCAS

implementation, LEP consultants provided on-the-ground

technical advice throughout all the export regions.

Advice included activities such as ESCAS

implementation, infrastructure design and installation,

training and facility improvements , preparation

and planning for key festivals (Eid al Adha / Korban /

Ramadan), meat hygiene seminars, butcher training,

stunning and slaughter training, as well as general animal

welfare advice.

In the South East Asia region, 122 days of technical

advice was also provided. This included technical advice

on the operation of pneumatic stunners in the Philippines

and Malaysia.

ANIMAL HEALTH AND WELFARE

13

Strategic Objective 2:

Improve supply chain efficiency

and regulatory performance

Supply chain efficiency and improved

regulatory performance have been key

focuses for the LEP over 2012-13.

With the continued operation of ESCAS

across all feeder and slaughter markets,

it is vital for the long term productivity

of the trade that ongoing efficiencies

can be identified to reduce regulatory

costs, while maintaining high animal

welfare standards.

In 2012-13, industry and government continued to

utilise the Industry Government Implementation Group

(IGIG) and its sub-commidees to collaborate in the

development, review and refinement of regulation.

Key activities in relation to ESCAS were LiveCorp and

the LEP’s involvement in IGIG sub-commidees on:

ESCAS performance auditing arrangements

The Australian Chief Veterinary Officer’s review

of the Mark IV box

The review of the ESCAS/OIE animal welfare checklist

The LEP also provided feedback to government on a

range of operational issues and materials, including

various Export Advisory Notices.

Additional IGIG sub-commidees were also formed to

consider issues relating to contingency planning and

risk management, scabby mouth and the government’s

breeding livestock policy. LiveCorp and the LEP were

active members of all meetings and provided extensive

feedback and support. The Industry Capability Program

within the LEP also played a key role in LiveCorp and

the LEP’s contribution to the implementation of the

recommendations of the Farmer Review.

To pursue the implementation of these

recommendations, the Australian Government

established a number of reviews which the LEP

made submissions and contributions to, including:

The review of the Australian Standards

for the Export of Livestock (ASEL).

The review of the pre-export inspection

arrangements at the Fremantle Port.

The review of the animal welfare assurances

around breeding livestock.

The Australian Maritime Safety Authority

review of Marine Order 43.

The LEP provided a comprehensive submission to

the review of ASEL and the pre-export inspection

arrangements in Fremantle, highlighting relevant RD&E

and areas where LiveCorp and its members believed

improvements could be made.

Although, the Research and Development Corporations

(RDCs) were not members of the review process, the

LEP provided continual support to the Department of

Agriculture Fisheries and Forestry (DAFF) and ALEC

representative on the Commidee to ensure that relevant

RD&E was available and to provide technical advice

on request. For example, the LEP coordinated the lead

researcher in developing the livestock export industry

heat stress risk management tool to present to the ASEL

Steering Commidee.

The LEP was also a member of the Australian Maritime

Safety Authority Livestock Advisory Commidee and

provided market access advice and support to other

parties, such as state and territory governments on

request.

The RD&E program also delivered a range of projects

in support of the reviews, including releasing reports

aimed at supporting the government’s processes.

These reports included a CSIRO research project

to validate the current ASEL stocking densities by

conducting onboard measurements of animal welfare

indicators and a report which detailed and assessed the

pros and cons of the Fremantle, Adelaide and Portland

pre-export inspection systems.

The Industry Capability Program and the RD&E Program

also coordinate significant research projects aiming to

identify significant mechanisms to reduce the costs of

regulation on the industry.

These included projects considering potential

opportunities to develop quality assurance systems

for ESCAS and ASEL and developing a contingency

risk management manual.

SUPPLY CHAIN

14

MARKET ACCESS


Enhance market access conditions

for existing and new markets

2012-13 was a volatile year for Australia’s

livestock export industry with market

access conditions changing for a variety

of key markets, including Indonesia,

Bahrain and Egypt.

The LEP in-market Livestock Services

Managers for the different regions

faced many challenges and issues over

the financial year particularly prior to

December 2012, where the industry was

forced to deal with an unforeseen number

of market access issues. These responses

required considerable commitment of

LEP resources.

In addition, the LEP made regular visits

to key markets to engage with importers,

government representatives as well as

Australian Government representatives

and trade officials in support of market

access improvements.

Consequently , the market access priorities expanded

with industry and the LEP focused on three key areas:

Re-establishing key markets where access

issues had occurred

Maintaining and improving existing market

access conditions

Identifying and opening new markets

In 2012-13, the industry continued to use the long

established Livestock Export Industry Protocol

Commidee as the mechanism for providing advice on

technical market access issues and identifying and

prioritising market access priorities. The LEPs Industry

Capability Program provides secretariat support to the

Protocol Commidee.

The Protocol Commidee is composed of members from

separate areas within DAFF, LiveCorp, MLA, SCA, ALEC,

CCA and ALEC nominated exporter representatives

from different industry sectors.

The Protocol Commidee met twice in 2012-13, in

Fremantle and Canberra. The meetings were well

adended by exporters, industry and government and

provided opportunities to discuss priority issues.

In addition to the formal meetings, the Protocol

Commidee received multiple requests for advice and

opportunities for input on a range of technical issues, as

well as protocol developments through correspondence.

In 2012-13, market access issues considered by the

Protocol Commidee with LiveCorp/LEP support were:

Advice on the Solomon Islands feeder cadle health

protocol - which was finalised and agreed to in 2012-13;

Consideration of more than 14 protocols for different

species and markets;

Contributions to the development of consistent

certifiable wording for health conditions;

The development of an industry position on HGP

freedom processes;

Advice on the livestock export industry’s Bovine

Johne’s Disease position

Scabby mouth management

LiveCorp also provided technical support to an industry

delegation to Indonesia under the dairy program and

presented to a number of delegations visiting Australia.

In light of various market disruptions, there was

also increased adention on the effectiveness of the

Memorandums of Understanding (MOUs) between

Australia and overseas markets. To support the

Australian Government’s preparation of a MOU policy,

the LEP, through the Industry Capability Program,

prepared a comprehensive submission encompassing the

joint positions of MLA, LiveCorp, ALEC, CCA and SCA.

LiveCorp also continued its involvement and investment

in the National Arbovirus Monitoring Program

(NAMP) throughout the year. The NAMP monitors the

distribution of economically important arboviruses (i.e.

insect-borne viruses) of livestock and their vectors in

Australia. These viruses include bluetongue, Akabane

and bovine ephemeral fever (BEF). NAMP is jointly

funded by its primary beneficiaries, including the cadle,

sheep and goat industries, livestock exporters, and the

state, territory and Australian governments.

15


Enhance communication

LiveCorp’s communications program focused on:

Providing technical advice to support the livestock export

industry’s representative body – ALEC, to respond to media

inquiries and critical incidents (Bahrain / Pakistan / Egypt /

Malaysia / Kuwait) and general issues (economic value/

benefits of the trade etc).

LiveCorp also made available an additional $117,500

for ALEC to undertake social media workshops and

an industry communications strategy.

Regular communications and coordinating teleconferences

with members and relevant stakeholders to facilitate the

sharing of industry information and discussion.

Redeveloping the LiveCorp website to improve access

to information, resources and RD&E.

COMMUNICATION

Website Update

During 2012-13, a highlight for the

Services and Innovation Program was the

redevelopment of the LiveCorp website

to enhance communication with and the

extension of RD&E to stakeholders and

the broader community.

The layout and content of the website

was designed to enhance communication

and the provision of information and

resources to industry. In addition, a review

of LiveCorp’s information management

was completed to enhance administration

and dissemination of information and

resources to industry and government.

16


Enhance corporate governance

LiveCorp Corporate Efficiency Plan

In 2012 as a result of the dramatic decrease in levy funds

the LiveCorp board, following consultation with industry,

commided to develop and implement a plan to reduce

overheads through improved efficiencies.

Several key components were developed and delivered,

including the relocation of LiveCorp’s office to co-locate

with MLA and the realignment of staffing to program and

strategic objectives.

LiveCorp also commided to reducing its Directors from

seven to five through the reform of the Constitution.

Following consultation with members, the LiveCorp

Board proposed Constitutional amendments to achieve

this reduction.

On 12 June 2013, LiveCorp members unanimously voted in

support of amendments to LiveCorp’s Constitution at a

General Meeting held in Brisbane.

The approved amendments reduce the LiveCorp Board

from seven to five Directors, nominate skills required

of the Exporter Directors, require the Chair to be

independent and appoint the Chair of ALEC as an

Ex Officio Director.

The LiveCorp Board subsequently commenced

processes to implement the changes by the 2013 AGM.

A requisition was also received on 12 June 2013, in

accordance with the Constitution, requesting that an

election be held for the two Exporter Director positions.

The results of the election will be declared in 2013-14.

The approval of the refined Constitution finalises the

implementation of LiveCorp’s corporate efficiency plan,

which commenced in 2012 and has seen a reduction in

overheads from 29 percent of revenue in 2012-13 to

27 percent in 2013-14 (forecast) which equates to a

20 percent reduction in overheads from 2012-13 to 2013-14.

Strategic Plan

Aler the development and introduction of ESCAS in late

2011, the LiveCorp Board agreed that it was appropriate

to review the Strategic Plan to identify any refinements

that were required to reflect the changed operating

environment for the industry.

Detailed consultation with exporters then took place and

LiveCorp developed a plan that beder reflects the post-

ESCAS regulatory and operational environment. Lastly,

following consultation with the Minister for Agriculture,

Fisheries and Forestry the Strategic Plan was finalised

and placed on the LiveCorp website.

Performance Review

In accordance with the Statutory Funding Agreement

with DAFF and the LiveCorp Strategic Plan, a review

of the performance of LiveCorp has been commenced.

The Minister for Agriculture, Fisheries and Forestry

reviewed and approved the terms of reference.

The Performance Review must be completed no later

than 31 December 2013.

Annual Operating Plan

The AOP for 2013-14 was completed and provided to the

Minister for Agriculture, Fisheries and Forestry on 21

June 2013. The AOP is a confidential document that is

used for allocating yearly funding against the programs

and strategic objectives outlined in the Strategic Plan.

Annual General Meeting

The 2012 AGM was held in Fremantle in coordination with

the Western Australia Livestock Exporters Association

in November.

CORPORATE GOVERNANCE

“LiveCorp commiQed to

develop and implement

a plan to reduce

overheads through

improved efficiencies”

18

Other program outcomes:

RD&E program

The LEP RD&E program focuses on three

key strategies that form the basis of

LiveCorp’s 2013-2015 Strategic Plan:

Animal health and welfare

Supply chain efficiency and

regulatory performance

Market access and trade

development

The largest area of investment for the

RD&E program for 2012-13 was animal

health and welfare. Through RD&E it is

important for the industry to continually

develop projects to monitor outcomes

and improve animal health and welfare

through the whole supply chain.

Reflecting the role of regulation in the livestock export

industry and its potential impact on productivity, there

has also been an increased focus for the LEP RD&E

Program in supporting exporters to meet ESCAS

requirements through the development and piloting of

numerous training and resource materials (translated

into various languages), as well as the development of a

possible QA framework.

A summary of some of the key projects that have

commenced and/or were completed in the last year are

outlined below:

Animal health and welfare

Development of live export training programs

(Standard training modules)

Outcome developed:

In-market practical modular training materials for

animal welfare officers, trainers and stockpersons

handling Australian livestock based upon the

ESCAS animal welfare checklist.

Standard Operating Procedures

(developed in an earlier project).

Instructional DVDs for each of the supply chain elements

to correspond with the training modules and SOPs.

The resources developed are being translated into

various languages, including Arabic, Bahasa, Turkish,

Russian and Mandarin.

Managing sheep and caQle on board livestock ships

This project developed and produced instructional DVDs

on the management and handling of Australian cadle and

sheep on-board livestock vessels. The DVDs have now

been distributed to ship owners, exporters and other

relevant stakeholders.

Backgrounding and feedlot strategies to

address inanition in sheep

This project has electronically tracked and monitored

the feeding and drinking paderns of approximately

9,000 sheep in five periods, from September 2011 to

June 2012. The project will assist in the development of

strategies to improve adaption to the pelletised feed.

This project will be ongoing in 2013-14.

Livestock Air Transport Safety Assessment

(LATSA) solware

This project upgraded the LATSA solware. Empirical

data is currently being collected during consignments of

livestock by air which will be used to further validate the

predictions made by the solware.

Measuring heat load and management strategies

It consists of two projects that will gather data on heat

load in sheep exported to the Middle East. Data will be

collected on vessels, in feedlots and in climate controlled

laboratory situations. A key component of the project

will be the development of strategies and designs for

managing the risks of heat load.

DAM aQenuated Salmonella vaccine

This project will construct virulence adenuated

derivates of Salmonella dam vaccines that improve

vaccine safety, without compromising efficacy.

Additional adenuating mutations have been introduced

into the modified live Salmonella DAM vaccine to

reduce the risk of reversion to virulence and to assist in

regulatory approval to bring the vaccines into Australia

for further large animal research.

RESEARCH, DEVELOPMENT & EXTENSION

19

Regulatory approval to bring the vaccines into Australia

for vaccine research requires rigorous studies that

demonstrate a high level of vaccine safety and efficacy

with minimal toxicity. Achievement of these criteria

comprises the overall goal of the funded Salmonella

vaccine study: to develop a modified live Salmonella

vaccine that is safe, well-tolerated, and confers robust

cross-protection in vaccinated animals.

Antibiotic medication, in-water and in-feed treatment

of infectious ovine keratoconjunctivitis (IOK) in pre-

export feedlots

The project concluded that IOK is a treatable disease,

although the specific treatments vary depending upon

the severity of the condition. The project identified

recommended treatments and suggested that eye

inspections were particularly important in summer

months when IOK is more prevalent. Early identification

and treatment of the disease is beneficial in ensuring a

successful outcome in its management.

Refining stocking densities

This research project was undertaken to address the

knowledge gap that existed regarding the effects of

stocking density on the welfare outcomes of cadle and

sheep during sea transport. Two sheep voyages to the

Middle East and one cadle voyage to Indonesia were

conducted where three stocking density treatments

were investigated (ASEL, ASEL – 10% and ASEL + 10%

or the allometric allowance (0.027 x liveweight0.66),

whichever was greater).

It was concluded that the ASEL space allowances for the

stock classes investigated are appropriate on animal

welfare grounds.

Developing data collection systems for caQle

This project aims to produce valid and credible

descriptions of causes of death in long haul cadle

exported from Australia and to develop systems that

can be implemented by industry to describe causes of

death on an ongoing basis.

Review of sheep pre-embarkation inspection

procedures

The objective of this study was to conduct a review of

sheep inspection procedures during the pre-export

preparation phases that occur between the vendor

property and port for live sheep exported from South

Australia, Victoria and Western Australia. The study

compared the observed practices to the current ASEL

guidelines and standards. The report identifies the most

effective method of inspection (and rejection) of animals

in a manner that has the least potential adverse effect on

animal welfare.

Monitoring and evaluation of the HotStuff model

The purpose of this project was to collate and assess

relevant retrospective on-board data sets in order

to establish, implement, monitor and evaluate a data

collection to validate HotStuff predictions. This project

will be ongoing in 2013-14.

20

Supply Chain Efficiency

Dairy – A guide to dairy herd management

In October 2011 ’A guide to dairy herd management‘ was

developed as a best practice manual to assist in nutrition,

reproductive management, milk harvesting, heat stress

and general principals of dairy farm management. The

manual was translated into Mandarin, Russian, Urdu,

Bahasa and Turkish and will be distributed into the

respective markets that source Australian Dairy Cadle.

ASEL review scoping study

This project provided detailed information to support

industry’s input into the Australian Government’s ASEL

review. This included the published milestone report

detailing current research and knowledge relating to the

export of sheep to the Middle East from southern ports.

The primary output of this project will be to assess and

develop recommendations on best practice regulatory

reforms to ASEL, including an assessment of the R&D

underpinning the specific conditions in ASEL.

Data scoping study

This project is developing a discussion document

summarising the current understanding of methods used

by industry operators for collecting, storing, analysing

and using data related to animal health and performance

during export. The document will summarise a range

of related issues and present brief descriptions of

opportunities for improvements associated with

systems built to take advantage of advances in hardware

and solware. There is the potential for this project to

guide future developments in the routine monitoring

systems of animal health and performance.

Contingency planning review

This project is reviewing the risks and contingency

options that are available to the livestock export

industry during shipment. The project will develop a

contingency manual that will aid exporters in developing

individual consignment risk management plans.


ESCAS risk management and quality assurance

program development

This project is considering the feasibility and potential

structure/requirements of a risk management and

quality assurance program to complement (not

duplicate) ESCAS. This project will review existing

risk management and quality assurance systems

being used within the industry.


Market access and trade

development

China market access scoping study

This project will gather information on the technical

market access, trade and regulatory issues that are

relevant to exporting feeder / slaughter cadle to China.

The project will produce a scoping document that will

allow industry to develop a strategy for working with

parties in Australia and China to establish a beneficial

trade.

Intellectual property and the

commercialisation of RD&E

This project is to ensure intellectual property and its

ownership are decided and clearly defined at the time

of project set-up. This is managed by the LEP on behalf

of stakeholders. A plan for commercialisation and

extension of key outcomes of projects is determined to

ensure that deliverables are disseminated.

“There has also been

an increased focus for

the LEP RD&E through

the development and

piloting of numerous

training and resource

materials translated

into various languages.”

21

LiveCorp Services and Innovation

Documenting and reporting day to day

activities of the export supply chain are

a critical component in delivering against

the detailed regulations governing

the livestock export trade. LiveCorp’s

Services and Innovation Program

supports industry to increase its capacity

to meet and exceed existing standards,

regulation and reporting obligations.

It achieves this by providing training in livestock

handling and compliance requirements to on-board

stockpersons. The Services and Innovations program

also provides services to assist in the development of

improved information management systems to enhance

communication and create regulatory efficiencies.

In 2012-13, the Services and Innovation Program

supported the continuous improvement and

understanding of livestock management, health

and welfare through the delivery of an on-board

stockpersons’ training course with 22 participants.

LiveCorp also conducted an internal review of the

course and developed Terms of Reference for the

LiveCorp Services Review RD&E project to enhance

the delivery and resources associated with the

training of stockpersons, stevedores and other

supply chain participants.

The Services and Innovation Program also developed a

range of forms, templates and declarations to streamline

DAFF assessment and approval processes. For example,

the standard ESCAS application template delivered by

the Services and Innovation Program is estimated to

have generated a 30 percent saving in DAFF assessment

time, directly reducing exporter costs.

LiveCorp continues to consult with exporters and

seek feedback on services and innovation actions and

requirements. Activities undertaken during the year

include providing secretariat services to the breeding

livestock commidee, participating in the Protocol

Commidee, assisting with the development of the annual

operating plan and the planning and coordination of the

LiveCorp AGM and industry conference.

SERVICES AND INNOVATION

Livecorp training

services review

LiveCorp has been responsible

for providing training and

accreditation to stockpersons

servicing the livestock export

industry for more than 14 years

and has trained more than 400

people under its Stockperson

Accreditation Program.

The training program that is

in place has been continually

refined through ongoing

reviews and evaluations

and LiveCorp’s trainers are

highly experienced educators

commiQed to animal welfare.

LiveCorp firmly believes that this training

program has, and continues to meet the

needs of industry and government by

ensuring that the stockpersons responsible

for the care of livestock on-board vessels

have the necessary skills and training to

ensure animal welfare and regulatory

requirements are met.

As part of LiveCorp’s continual review

process, the LEP has commenced a

substantial RD&E project to review LiveCorp’s

existing training services and accreditation

process (for stockpersons, stevedores

and Saudi vaccinators) to identify possible

enhancements to the delivery methods/

formats, effectiveness and cost efficiency.

This RD&E project also demonstrates

that LiveCorp has addressed the

recommendations of the Farmer Review

that industry considers enhanced training

and mentoring programs for stockpersons

(Recommendation 5).

22

Dairy Industry Program

LiveCorp receives a voluntary levy of $3 per head

of dairy cadle exported. In 2012-13, the levy income

received was $133,324.

In 2012-13, LiveCorp initiated a regular teleconference

with dairy exporters to guide levy investment,

encourage contributions and report on relevant

investments within LEP and LiveCorp programs.

Key activities in 2012-13 include:

The continued roll-out of the Dairy Herd Management

Manual. The manual was translated into Bahasa,

Mandarin, Russian, Turkish and Urdu and distributed to

exporters and stakeholders.

Key market access activities were delivered by the

Industry Capability Program and included contributing

and liaising between industry and DAFF in relation to the

negotiation of health conditions for the Customs Union.

Other market priorities included supporting capability

improvements in the export of dairy cadle to Indonesia

and support for a technical industry delegation.

Coordination and contribution of industry advice on the

Australian Government’s breeding livestock policy.

The policy was published 30 April 2013 and

implementation is a key role for LiveCorp’s dairy

program moving forward. The Services and Innovations

Program also developed documents to support

the implementation process, including a standard

declaration form to address the policy’s due diligence

requirements.

RD&E continued to be delivered through the LEP, with

LiveCorp, MLA and Dairy Australia partnering on a dairy

cadle export stocktake project. The LEP also continued

or commenced research into premature lactation and

pink eye, respectively.

Regular teleconferences to review industry work

priorities and form industry positions on trade and

policy related issues associated with the dairy or

breeder export trade.

LiveCorp acknowledges that the voluntary levy

contributions are a reflection of the value and

commitment the exporters make and see in the

dairy export trade.

DAIRY PROGRAM

23

The Livestock Export Program (LEP)

LiveCorp partners with MLA in the LEP to deliver

animal welfare improvements in Australia and overseas

markets funded by Australian producers, exporters and

the Australian Government.

The LEP is widely recognised by LiveCorp members

as the most efficient mechanism for the delivery of

in-market services and RD&E in support of LiveCorp’s

strategic objectives.

In 2012-13, LiveCorp invested $1,180,000 – 36% of its

expenditure – in the LEP. This investment was in line with

LiveCorp’s 2013-15 Strategic Plan and 2012-13 Annual

Operating Plan (AOP).

The 2012-13 commitment to the LEP reflected a 163%

increase on 2011-12, during which LiveCorp had to

reduce its funding as a result of declining livestock

exports and levy revenue. The decline was a result of a

range of market factors across both sheep and cadle,

including the implementation of the Export Supply

Chain Assurance System (ESCAS); voluntary suspension

of various markets and import quota restrictions to

Indonesia. The increased commitment to the LEP

in 2012-13 allowed LiveCorp to match MLA’s funding

contribution to the LEP RD&E Program.

LiveCorp ensures good management and investment

of its contribution to the LEP through close

communications, collaborative planning processes and

leadership (the LiveCorp CEO and the MLA Livestock

Exports Manager co-manage the LEP).

MLA continues to be the majority partner in the LEP,

particularly in relation to in-market services. LiveCorp is

very appreciative of MLA’s ongoing commitment to the

livestock export industry and its strong partnership with

exporters and producers.

Collaboration – Other

In 2012-13, LiveCorp continued to identify opportunities

for further RD&E collaborations with Research and

Development Corporations (RDCs) through the LEP.

A key example was a joint collaboration with Dairy

Australia on a dairy heifer trade scoping study through

the LEP RD&E program. LiveCorp also maintained its

commitment towards priority cross-sectoral RD&E

strategies under the Primary Industries Ministerial

Council RD&E Framework, particularly where issues

aligned with industry priorities and budget availability.

In 2012-13, LiveCorp’s cross-sectoral RD&E

involvement included:

Continuing its membership on the Animal Welfare

RD&E Strategy Steering Commidee.

Agreeing to support Animal Health Australia

in the development of the Animal Biosecurity

RD&E Strategy.

A strong and active involvement in the Council of Rural

Research and Development Corporations (CRR&DC),

of which the LiveCorp Chairman is a member.

Unfortunately, due to the need to prioritise funds

towards delivery of industry priorities, particularly

animal welfare, LiveCorp was unable to maintain its

financial involvement in the Climate Change Research

Strategy for Primary Industries in 2012-13. However,

LiveCorp remains an interested stakeholder and valued

the outputs it received during its involvement.

COLLABORATION

“The LEP is widely

recognised by LiveCorp

members as the most

efficient mechanism for

the delivery of in-market

services and RD&E in

support of LiveCorp’s

strategic objectives.”

24

Compliance Report

LiveCorp’s current statutory Funding Agreement (SFA)

commenced on 1 July 2010 and is now in operation.

In accordance with schedule 2 of the Agreement,

the Board wishes to advise:

The Annual Report provides disclosure of the actions

and outcomes of the company in relation to the key

performance indicators included in the Strategic and

Operating Plans. Specific reports include:

a) The Operations reports included elsewhere in this

report provide information on performance against

goals outlined under the strategic and operating plans.

b) The Research and Development (R&D) report

includes:

The extent to which our R&D activities contribute

to the Commonwealth’s priorities for expenditure

on R&D projects and the achievement of public

benefits;

Collaboration with industry and other research

organisations;

Commercialisation of Research and Development;

Intellectual property creations; and

Agreements entered into relating to Research and

Development.

c) At the Annual General Meeting held in Perth on 13

November 2012 there were no changes to the Board

of LiveCorp or material changes to the Membership

of LiveCorp.

d) LiveCorp did not form any subsidiary companies

during the year. It did however continue to operate

the Livestock Export Program (LEP) in conjunction

with Meat and Livestock Australia.

e) The Advisory Services Agreement was renegotiated

with the Australian LivestockExporters’ Council.

f) A General Meeting was held in Brisbane on 12 June

2013 where the Members of LiveCorp voted in

support of Constitution amendments. The approved

amendments gave effect to a reduction in the size

of the Board. This changed Board structure will

commence post the 2013 AGM.

g) During the year the following reports and plans were

presented to the Federal Minister for Agriculture,

Fisheries and Forestry and the Department:

The compliance certificate in respect to LiveCorp

meeting the requirements of the SFA for the year

ended 30 June 2012, as per clause 17.4, was signed

by the Chairman on 29 October 2012 and forwarded

to the Department;

325 copies of the Annual report, as per clause 12.2,

were forwarded the Department on 29 October

2012; and

The half yearly financial reports, which included

statements of financial position clause 12.5(b) and

statements of financial performance clause 12.5(a)

were provided to the Department on 20 January 2013.

COMPLIANCE REPORT

Exporter Members and Associate

MembersAAA Livestock Services Pty Ltd

Agricon Services (Aust) Pty Ltd

Atlas Exports Pty Ltd

Austock Rural Pty Ltd

Australian Livestock Exports Pty Ltd

Australian Rural Exports (AUSTREX) Pty Ltd

Capricorn Pastoral (Davies Lander Pty Ltd)

Central Pacific Livestock Pty Ltd

Chevredor / L and R Bere-Streeter

Dairy Livestock Exports

DW Moyle, Basin Exports Pty Ltd

Elders International Australia Ltd

Emanuel Exports Pty Ltd

EMS Rural Exports Pty Ltd

Flinders International Pty Ltd

Global Livestock Corporation (Aus) Pty Ltd

Global Livestock Marketing Pty Ltd

Grant Agri (Australia) Pty Ltd

Halleen Australasian Livestock Traders Pty Ltd

Hedley John Exporters Pty Ltd

Hunter Livestock Export Services

HXA Pty Ltd

Independent Livestock Services

International Livestock Export Pty Ltd

Landmark Global Exports Pty Ltd

Landmark Operations Limited

Lembiru Livestock Pty Ltd

Livestock Australian Exports Pty Ltd

Livestock Shipping Services Pty Ltd

Mariah Hill Alpaca and Exports

North Australian Cadle Co Pty Ltd

Oceanic Cadle Stations Aust Pty Ltd

P&D Exports Pty Ltd

Samex Australian Meat Co Pty Ltd

South East Asian Livestock Services

Stockair Pty Ltd

Success Pastoral Co

Sugarbag (QLD) Pty Ltd

Surburton Livestock Export Pty Ltd

Total Livestock Genetics

Viscount Agricultural Developments Pty Ltd

Wellard Rural Exports Pty Ltd

Associate MembersExpo-Trade Pty Ltd

Hassad Australia Operations Company Pty Ltd

Pfizer Animal Health Australia

Rural Export and Trading (WA) Pty Ltd

Tintinabulla Pty Ltd

Industry MembersAustralian Livestock Exporters’ Council

New South Wales Livestock Exporters Association

Northern Territory Livestock Exporters Association

Queensland Livestock Exporters Association

South East Australian Livestock Exporters Association

Western Australian Livestock Exporters Association

MEMBERSHIP

27

Your directors present their report on LiveCorp for the year ended 30 June 2013.

Directors

The following persons were directors of LiveCorp during the whole of the financial year

and up to the date of this report:

Dr Raoul Nieper A.M.

Chairman

Qualifications

B.VSc (Hons), Grad. Dip. Bus. Admin, FAICD, FAIM

Experience

Dr Nieper has considerable experience in board positions. Dr Nieper was previously Chairman of Animal Health

Australia and formerly Director General of Queensland DPI. He is a veterinarian who has extensive experience at the

interface between government and industry. Dr Nieper has a demonstrated commitment to animal welfare issues and a

sound understanding of the live export industry.

Special Responsibilities

Dr Nieper is the Chairman of the Governance & Remuneration Commidee.

David Galvin

Non-Executive Director

Qualifications

Masters Degree in International Development Studies, Bachelor of Arts

Experience

Mr Galvin comes from an extensive rural background in the Northern Territory and overseas. He studied at the

University of Queensland, Deakin University and in the United States. He is the former CEO of Indigenous Land

Corporation (ILC), a position that he held for nearly 12 years before standing down in 2012. The ILC is a major beef

producer and has considerable pastoral holdings and pastoral enterprise agreements on the Indigenous held land

across Northern Australia to Tasmania. Mr Galvin was a Director of Voyages Indigenous Tourism Australia Pty Ltd and

currently a Director of Tubarao Investments Pty Ltd a property investment company.


Mr Galvin is a member of the Finance, Audit & Risk Commidee.

David Jarvie


Qualifications

B.VSc (Hons)

Experience

Mr Jarvie is a Veterinarian with 38 years experience in livestock export, meat and stockfeed manufacturing industries,

initially with Metro Meat Ltd as Live-export Manager and Divisional Manager for a regional abadoir in Geraldton,

and later as supervising export veterinarian with AQIS in Victoria. He is currently Group Veterinarian with Wellard Rural

Exports and General Manager Feeds and Animal Production. Mr Jarvie is a member of Biosecurity Council of Western

Australia and a member of management Commidee of Biosecurity Industry Funding Schemes for Cadle in Western

Australia.


Mr Jarvie is a member of the Finance, Audit & Risk Commidee.

DIRECTORS’ REPORT

28

David Uebergang


Experience

Mr Uebergang has had a life-long career in the agribusiness sector. He has over 40 years senior management

experience in the Elders Group of Companies at national and international levels. He has spent the last 20 years as

Livestock Export Manager for Elders International Australia Limited. Presently he consults to the Livestock Export

sector on new and developing markets.


Mr Uebergang is a member of the Governance & Remuneration Commidee.

Malcolm Foster


Qualifications

Bachelor of Technology in Mechanical Engineering, Graduate Diploma in Business Administration, FAICD.

Experience

Mr Foster has been associated with the meat and livestock industry for over 35 years. During this time he has managed

feedlots and meat processing plants in South Australia, New South Wales and Queensland. He has been associated with

the production, processing and the marketing of Australian grainfed beef in Asia, particularly Japan, for over 20 years.

In 2009, he retired from the position of Managing Director of Rangers Valley Cadle Station, a position he held for nearly

18 years. He was a director of the Australian Lot Feeders Association for 20 years and served as its President twice.

He is currently Chairman of the National Feedlot Accreditation Scheme and the President of the Australian Registered

Cadle Breeders Association.


Mr Foster is a member of the Governance & Remuneration Commidee.

Terry Enright


Experience

Mr Enright is a primary producer in the south of Western Australia and as well as operating a successful farming

operation with sheep, beef, cadle and grain, he has played a leading role in the administration of agricultural research

in the Grains industry. He chaired the Grains Research and Development Corporation for five years to 2007 and chaired

the Council of Rural Research Corporations for four years.

Mr Enright was chairman of the Albany Port Authority for ten years and has experience in development of Government

policy and port planning, having served as Chairman of the WA Port and Marine Authorities Association for three

years. He has experience in Government and stakeholder relations, industry strategic planning and animal production.

He retains a number of industry positions including Director of the Crawford Fund associated with international

agricultural research in the developing world.


Mr Enright is the Chairman of the Finance, Audit & Risk Commidee.

DIRECTORS’ REPORT

29

Peter Kane


Qualifications

B.Comm

Experience

Mr Kane retired in 2009 aler nearly 20 years with Austrade. During that time he was Senior Trade Commissioner at

five overseas posts – Seoul, Toronto, New Delhi, Milan and Kuala Lumpur. Mr Kane also held a number of management

positions in Australia.

In the late 1980’s Peter was Dalgety Australia’s European Manager, based in Hamburg. He has been Chairman of ALEC

since 2010.

Sam Brown

Chief Executive Officer

Qualifications

B Ag Sc (University of Melbourne)

Leadership Excellence Program in Department of Agriculture, Fisheries and Forestry

Experience

Mr Brown joined LiveCorp in October 2008 as the Industry Capability Manager of the joint Livestock Export Program.

He brought with him over six years of experience from within the Australian Government Department of Agriculture,

Fisheries and Forestry, where he held various roles across a broad range of agricultural industries.

These roles provided Mr Brown broad exposure to both federal and state legislative development and policy cycles

across a wide range of sectors, including grain, horticulture, meat, wool, dairy, AUSVET plan, and the Australian

Quarantine and Inspection Service.

30

Objectives and Strategies

LiveCorp’s objective is to enhance the livestock export industry’s sustainability and competitiveness by providing

support to Australia’s livestock exporters through marketing and R&D services along the livestock export industry

supply chain.

LiveCorp’s short and long term strategies are as follows:

Ongoing improvement in animal welfare outcomes.

Improve industry efficiencies, capabilities and livestock performance through the supply chain.

Through education and communication, build Government and community acceptance of the industry and increase

stakeholder awareness and satisfaction.

Assist and facilitate market access conditions and strengthen demand for Australian livestock.

Deliver member and stakeholder confidence and value through strong governance, planning, evaluation and review.

Comply with the Statutory Funding Agreement (“SFA”), which provides the major revenue source for the company.

These strategies are underpinned by R&D.

Principal Activities

The principal activities during the financial year were as follows.

1. Livestock Export Program (LEP) in conjunction with Meat and Livestock Australia (MLA).

This includes funding and management of agreed joint venture activities covering:

Trade Support & Market Access.

Animal Welfare programs in market.

Communications – Incident management & market intelligence

Research and Development.

2. Other Corporate Functions

Corporate Communications and Relationship Management – with industry, government and other stakeholder

groups.

Corporate Management – Further development of LiveCorp’s membership, funding and administrative

arrangements.

Application of corporate governance and compliance with the statutory funding agreement.

3. Issues Management

The focus of industry resources on issues of critical importance to the future of the livestock export trade, in

consultation with the industry peak policy body, the Australian Livestock Exporters’ Council (“ALEC”).

Operating Result

The profit of LiveCorp for the financial year amounted to $356,839 (2012: Profit of $502,321).

DIRECTORS’ REPORT

31

Performance Measures

The strategic plan for 2012-2015 has been completed.

LiveCorp’s performance against its strategic and operating plans takes into account:

a) The performance of LiveCorp in meeting its obligations under the SFA.

b) The implementation of annual operating plans and strategic plans and the effectiveness of LiveCorp in meeting the

targets and budgets set out in those plans; and

c) The delivery of benefits to the industry foreshadowed in those plans.

KPI’s have been developed to monitor performance against the strategic themes. In addition over the planning period,

LiveCorp will increase its information and data collection activities to further bolster its monitoring and measurement

of progress against individual projects and programs.

LiveCorp’s overall performance takes into account the delivery of the below:

a) The performance of LiveCorp in meeting its obligations under the SFA – reviewed twice annually by the

Department of Agriculture, Fisheries and Forestry, including in 2013, and at both times LiveCorp was found to

have complied with the SFA. A formal survey of 2012-13 AOP performance is currently underway.

b) The development and implementation of annual operating plans (AOP) – measured by adherence to budget and

stakeholder survey. Stakeholder feedback in 2012-13 showed a level of strong satisfaction, rating the provision of

services as adding value to their business.

c) The maintenance of strategic plans – measured by stakeholder and government signoff. The 2013 – 2015 strategic

plan was completed with Minister signoff in early 2013, this plan replaces the 2010 – 2014 strategic plan.

d) Independent performance reviews of delivery of benefits to the industry foreshadowed in the above plans.

LiveCorp is constantly measuring and improving the organisation’s performance. The key measures include regularly

surveys of stakeholder satisfaction and an external performance reviews that are undertaken every three years.

These outcomes are communicated to the members and stakeholders on an annual basis.

Meetings of Directors

Directors Directors’ Meetings CommiQee Meetings

Finance, Audit & Risk Governance &

Remuneration

Number eligible to adend

Number adended


Number adended


Number adended

Raoul (Roly) Nieper 5 5 - - 2 2

David Uebergang 5 4 - - 2 2

David Jarvie 5 5 3 3 - -

David Galvin 5 4 3 3 - -

Terry Enright 5 5 3 3 - -

Malcolm Foster 5 5 - - 2 2

Peter Kane 5 5 - - - -

32

Significant Staff Changes

On 23 February 2013, Sam Brown was promoted from Acting Chief Executive Officer to Chief Executive Officer.

Members’ Guarantee

Australian Livestock Export Corporation Limited is a company limited by guarantee. If LiveCorp is wound up,

the constitution states that each member is required to contribute a maximum of $100 towards any outstanding

obligations of LiveCorp. At 30 June 2013 the number of members was 42 (2012: 41) and the maximum amount which

could be contributed is $4,200 (2012: $4,100).

Auditor’s Independence Declaration

A copy of the Auditor’s independence declaration, as required under section 307C of the Corporations Act 2001,

is set out on page 33.

Signed in accordance with a resolution of the Board of Directors:

Dr. Raoul Nieper A.M. Terry Enright

Director Director

Dated this 20th day of August 2013

DIRECTORS’ REPORT

33

AUDITOR’S INDEPENDENCE DECLARATION

AUSTRALIAN LIVESTOCK EXPORT CORPORATION LIMITED

ABN 88 082 408 740

AUDITOR’S INDEPENDENCE DECLARATION

To the Directors of Australian Livestock Export Corporation Limited

As lead auditor for the audit of the financial report of Australian Livestock Export Corporation Limited for the year

ended 30 June 2013, I declare that to the best of my knowledge and belief there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) any applicable code of professional conduct in relation to the audit.

D K Swindells

Partner

20 August 2013

Sydney

HLB Mann Judd (NSW Partnership) ABN 34 482 821 289

Level 19 207 Kent Street Sydney NSW 2000 Australia l Telephone +61 (0)2 9020 4010 l Fax +61 (0)2 9020 4190

Email: [email protected] l Website: www.hlb.com.au

Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd l NSW Partnership l is a member of International. A world-wide network of independent accounting firms and business advisers

34

Note 2013

$

2012

$

Revenues from continuing operations 2 3,632,027 3,477,667

Direct costs (59,147) (80,508)

3,572,880 3,397,159

Consultancy expense (583,396) (554,056)

Depreciation and amortisation expense (11,070) (52,685)

Director & staff related expenses (912,875) (1,129,361)

Joint program expenses 3 (1,180,000) (448,910)

Occupancy expense (53,872) (224,420)

Travel costs (158,104) (265,936)

Other expenses from ordinary activities (316,724) (219,470)

Profit (loss) before income tax 356,839 502,321

Income tax expense 1(b) - -

Profit (loss) 356,839 502,321

Other comprehensive income - -

Total comprehensive income 356,839 502,321

The above statement of profit or loss and other comprehensive income should be read in conjunction with the

accompanying notes.

STATEMENT OF COMPREHENSIVE INCOMEFor the year ended 30 June 2013

35

As at 30 June 2013

BALANCE SHEET

Note 2013

$

2012

$

Current Assets

Cash and cash equivalents 5 719,187 578,870

Trade and other receivables 6 716,280 641,391

Other current assets 7 38,135 30,668

Total Current Assets 1,473,602 1,250,929

Non-Current Assets

Financial assets 8 1,704,357 1,355,061

Property, plant and equipment 9 19,117 23,579

Other non-current assets 7 58,760 58,760

Total Non-Current Assets 1,782,234 1,437,400

Total Assets 3,255,836 2,688,329

Current Liabilities

Trade and other payables 10 719,228 516,365

Employee entitlements 11 47,599 30,746

Make-good provision 35,000 -

Total Current Liabilities 801,827 547,111

Non-Current Liabilities

Employee entitlements 11 - 9,048

Make-good provision - 35,000

Total Non-Current Liabilities - 44,048

Total Liabilities 801,827 591,159

Net Assets 2,454,009 2,097,170

Equity

Retained earnings 2,454,009 2,097,170

Total Equity 2,454,009 2,097,170

The above balance sheet should be read in conjunction with the accompanying notes.

36

For the year ended 30 June 2013

STATEMENT OF CHANGES IN EQUITY

Retained Earnings

$

Balance at 30 June 2011 1,594,849

Total comprehensive income 502,321

Balance at 30 June 2012 2,097,170

Total comprehensive income 356,839

Balance at 30 June 2013 2,454,009

The above statement of changes in equity should be read in conjunction with the accompanying notes.

37


STATEMENT OF CASH FLOWS

Note 2013

$

2012

$

Cash Flows from Operating Activities

Receipts from customers 3,291,189 3,778,207

Payments to suppliers and employees (2,891,539) (4,315,896)

Dividends received 63,651 56,640

Interest received 34,447 40,122

Net cash provided by (used in) operating activities 13(a) 497,748 (440,927)

Cash Flows from Investing Activities

Purchase of property plant & equipment (8,135) (14,362)

Proceeds from sale of investments (349,296) 576,435

Net cash provided by (used in) investing activities (357,431) 562,073

Repayment of borrowings

Net increase in cash held 140,317 121,146

Cash and cash equivalents at the beginning of the year 578,870 457,724

Cash and cash equivalents at the end of the year 5 719,187 578,870

The above statement of cash flows should be read in conjunction with the accompanying notes.

38


NOTES TO THE FINANCIAL STATEMENTS

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the material accounting policies adopted in the preparation of the financial report.

The accounting policies have been consistently applied, unless otherwise stated.

a) Basis of Preparation

The financial report is a general purpose financial report that has been prepared in accordance with the Australian

Accounting Standards, Australian Accounting Interpretations and the Corporations Act 2001. Australian Livestock

Export Corporation Limited is a company limited by guarantee.

Reporting Basis and Conventions

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation

of selected financial assets for which the fair value basis of accounting has been applied.

Compliance with IFRS

The financial report of LiveCorp complies with Australian equivalents to International Financial Reporting Standards

(“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

b) Income Tax

LiveCorp is exempt from income tax under section 50-40 item 8.2 of the Income Tax Assessment Act 1997.

c) Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation

and impairment losses.

The carrying amount of property, plant and equipment is reviewed annually by directors to ensure that it is not in

excess of the recoverable amount of these assets. The recoverable amount is assessed on the basis of the expected

net cash flows that will be received from the assets’ employment and subsequent disposal. The expected net cash

flows have been discounted to their present values in determining recoverable amounts.

Office Equipment is depreciated on a straight line basis. Leasehold improvements are depreciated on a straight line

basis over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

Computer Equipment and Plant and Equipment is depreciated on a diminishing value basis.

The depreciation rates used for each class of depreciable asset are:

Class of Fixed Asset Depreciation Rate

Leasehold Improvements 20%

Office Equipment 20%

Computer Equipment 37.5%

Plant & Equipment 25%

39

d) Financial Instruments

Recognition

Financial assets at fair value through profit or loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so

designated by management. Realised and unrealised gains and losses arising from changes in the fair value of these

assets are included in profit or loss in the period in which they arise.

Held-to-maturity investments

These investments have fixed maturities, and it is LiveCorp’s intention to hold these investments to maturity.

Held-to-maturity investments are stated at amortised cost using the effective interest rate method.

Available-for-sale financial assets

Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-sale

financial assets are recognised at fair value. Unrealised gains and losses arising from changes in fair value are taken

directly to equity.

Fair value

The company has complied with Accounting Standard AASB7 Financial Instruments: Disclosures which requires

disclosure of fair value measurements by level of the following fair value measurements hierarchy:

(i) Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1),

(ii) Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly

(as prices) or indirectly (derived from prices) (Level 2), and

(iii) Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).

Fair value for all financial assets at fair value through profit or loss is determined as follows:

(i) Listed fixed interest securities: at published bid prices ie Level 1.

(ii) Investments in unlisted managed funds: at exit prices published by fund managers ie Level 2.

(iii) Cash and term deposits: at cost

(iv) Other fixed interest securities: at exit prices published by fund managers ie Level 2.

Fair value for all financial assets at fair value through profit or loss is determined as follows:

(i) Listed fixed interest securities: at published bid prices ie Level 1.

(ii) Investments in unlisted managed funds: at exit prices published by fund managers ie Level 2.

(iii) Cash and term deposits: at cost

(iv) Other fixed interest securities: at exit prices published by fund managers ie Level 2.

e) Impairment of Assets

At each reporting date, LiveCorp reviews the carrying values of its assets to determine whether there is any indication

that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher

of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the

asset’s carrying value over its recoverable amount is expensed to profit or loss.

40

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

f) Research and development

Expenditure on research is recognised as an expense when incurred.

g) Employee Benefits

Provision is made for LiveCorp’s liability for employee benefits arising from services rendered by employees to balance

date. Employee benefits that are expected to be sedled within one year have been measured at the amounts expected

to be paid when the liability is sedled, plus related on-costs. Employee benefits payable later than one year have been

measured at the present value of the estimated future cash outflows to be made for those benefits.

Provision for Long-term Employee Benefits

A provision has been recognised for employee benefits relating to long service leave for employees. In calculating the

present value of future cash flows in respect of long service leave, the probability of long service leave being taken is

based upon historical data.

h) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid

investments with original maturities of three months or less, and bank overdrals. Bank overdrals are shown within

short-term borrowings in current liabilities on the balance sheet.

i) Revenue

Revenue from the collection of levies is recognised upon the export of livestock.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Dividend revenue is recognised when it is received.

All revenue is stated net of the amount of goods and services tax.

j) Goods and Services Tax (“GST”)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred

is not recoverable from the Australian Tax Office. In these circumstances, the GST is recognised as part of the cost of

acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown

inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and

financing activities, which are disclosed as operating cash flows.

k) Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in

presentation for the current financial year.

l) Trade receivables

Trade receivables are recognised at the amount invoiced and are generally due for sedlement within 30 days.

m) Trade & other payables

These amounts represent liabilities for goods and services provided to the company prior to the end of the financial

year which are unpaid. The amounts are unsecured and usually paid within 30 days of recognition.



41

Note 2013

$

2012

$

2. REVENUE

Revenue

Statutory levies 2(a) 3,002,490 3,365,686

Dividends received 63,651 56,640

Interest received 34,447 40,122

Other revenue 2(b) 531,439 15,219

Total Revenue 3,632,027 3,477,667

a) Statutory Levies

Marketing Levies 2,508,829 2,793,535

R &D Levies 493,661 572,151

3,002,490 3,365,686

Levy income remained suppressed in 2013 due to historically low levels of import permits in Indonesia, the loss of

Bahrain and reduced export activity in Saudi Arabia, Turkey and Egypt.

b) Other revenue:

Voluntary Dairy Levies 133,324 95,796

Revaluation of Investments 95,481 (98,676)

Other income 302,634 18,099

531,439 15,219

3. JOINT PROGRAM EXPENSES

Expenses

Live Export Program

Market Access 62,400 23,022

Trade Development 72,000 -

Animal Welfare 416,800 -

Communications 28,800 -

Industry Capability - -

Research & Development 600,000 425,888

1,180,000 448,910

4. AUDITORS’ REMUNERATION

Remuneration of HLB Mann Judd (NSW Partnership)

for auditing the financial report 21,750 20,000

42



2013

$

2012

$

5. CASH AND CASH EQUIVALENTS

Cash at Bank 719,187 578,870

6. TRADE AND OTHER RECEIVABLES

Current

Trade receivables 358,319 115,579

Other receivables 357,961 525,812

716,280 641,391

7. OTHER ASSETS

Current

Prepayments 38,135 30,668

Non-Current

Rental guarantee deposit 58,760 58,760

8. FINANCIAL ASSETS

At fair value through profit or loss:

Listed fixed interest securities 379,948 212,738

Unlisted managed funds 1,054,359 839,800

Cash unlisted fixed interest securities and term deposits 270,050 302,523

1,704,357 1,355,061

43

2013

$

2012

$

9. PROPERTY, PLANT AND EQUIPMENT

Office and computer equipment

At cost 87,470 87,100

Accumulated depreciation (69,277) (65,000)

18,193 22,100

Plant and equipment

At cost 9,462 9,462

Accumulated depreciation (8,538) (7,983)

924 1,479

Leasehold improvements

At cost - 90,218

Accumulated depreciation - (90,218)

- -

Total plant and equipment 19,117 23,579

Furniture and

FiQings

$

Plant and

Equipment

$

Leasehold

Improvements

$

Total

$

Movements in Carrying Amounts

Movement in the carrying amounts for each

class of property, plant and equipment:

Balance at 1 July 2011 41,499 2,366 18,037 61,902

Additions 14,362 - - 14,362

Disposals - - - -

Depreciation expense (33,761) (887) (18,037) (52,685)

Balance at 30 June 2012 22,100 1,479 - 23,579

Additions 8,135 - - 8,135

Disposals (1,527) - - (1,527)

Depreciation expense (10,515) (555) - (11,070)

Carrying amount at 30 June 2013 18,193 924 - 19,117

44

2013

$

2012

$

10. TRADE AND OTHER PAYABLES

Current

Unsecured Liabilities

Payables and accrued expenses 664,912 255,161

Other liabilities 33,538 119,893

Termination of lease 20,778 114,280

Lease incentive in advance - 27,031

719,228 516,365

11. EMPLOYEE ENTITLEMENTS

Current

Annual leave 47,599 30,746

Non-Current

Long service leave - 9,048



45

2013

$

2012

$

12. CAPITAL AND LEASING COMMITMENTS

a) Operating Lease Commitments

Minimum lease payments, payable:

- Within 12 months 26,388 47,256

- Later than 12 months but not later than five years 37,135 17,567

63,523 64,823

Operating Lease

Commitments include a sub-lease of premises.

The sub-lease has no fixed term.

The commitment disclosed is for the period of the lessor’s lease for the premises.

b) Other Commitments

Service agreement – ALEC

- Within 12 months 231,250 231,250

Publication

- Within 12 months - -

- Later than 12 months but not later than five years - -

231,250 231,250

c) Research & Development Expenditure Commitments

Payable:

- Within 12 months 600,000 600,000

- Later than 12 months but not later than five years - -

600,000 600,000

46



2013

$

2012

$

13. CASH FLOW INFORMATION

a) Reconciliation of Cash Flows from Operations with

x Profit aler Income Tax

Profit aler income tax 356,839 502,321

Profit on Reserve - -

Depreciation 11,070 52,685

(Increase)/decrease in trade debtors (74,889) 90,305

(Increase)/decrease in other assets (7,467) 14,947

Increase/(decrease) in trade creditors 202,863 (1,074,933)

Increase/(decrease) in provisions 7,805 (26,252)

Loss on disposal of property, plant and equipment 1,527 -

Cash flows from Operations 497,748 (440,927)

b) Credit Standby Facilities

LiveCorp has a facility within investments held to enable a cash recall as required within 3 working days.

14. CAPITAL MANAGEMENT

LiveCorp’s capital is its retained earnings. The capital is managed by the Board, which acts to ensure that LiveCorp has

sufficient capital to fund its progress, program commitments and debts as they fall due.

15. COMPANY DETAILS

The registered office and principal place of business of LiveCorp are at:

Australian Livestock Export Corporation Limited

Level 4, 165 Walker Street

North Sydney NSW 2060

47

DIRECTORS’ DECLARATION

In the directors’ opinion:

1. The financial statements and notes, as set out on pages 34 to 46, are in accordance with the Corporations Act 2001,

including:

a) complying with Accounting Standards and the Corporations Regulations 2001; and

b) a true and fair view of the company’s financial position as at 30 June 2013 and of it’s performance for the

period ended on that date; and

2. There are reasonable grounds to believe that the company will be able to pay its debts as and when they become

due and payable.

The notes to the financial statements include a statement of compliance with International Financial Reporting Standards.

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

Dr. Raoul Nieper A.M.

Director

Terry Enright

Director

Dated this 20th day of August 2013

48

INDEPENDENT AUDITOR’S REPORT


ABN 88 082 408 740

AUDITOR’S INDEPENDENCE REPORT

To the members of Australian Livestock Export Corporation:

We have audited the accompanying financial report of Australian Livestock Export Corporation (“the company”),

which comprises the statement of financial position as at 30 June 2013, the statement of profit or loss and other

comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended,

notes comprising a summary of significant accounting policies and other explanatory information, and the directors’

declaration for the company.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in

accordance with Australian Accounting Standards – Reduced Disclosure Requirements and the Corporations Act 2001

and for such internal control as the directors determine is necessary to enable the preparation of the financial report

that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in

accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical

requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about

whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material

misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the company’s preparation of the financial report that gives a true and fair view

in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an

opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating

the overall presentation of the financial report.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.






49


ABN 88 082 408 740

AUDITOR’S INDEPENDENCE REPORT (continued)

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

We confirm that the independence declaration required by the Corporations Act 2001, given to the directors of

Australian Livestock Export Corporation on 20 August 2013, would be in the same terms if provided to the

directors as at the time of this auditor’s report.

Auditor’s Opinion

In our opinion, the financial report of Australian Livestock Export Corporation is in accordance with the

Corporations Act 2001, including:

a) giving a true and fair view of the company’s financial position as at 30 June 2013 and of its performance

for the year ended on that date; and

b) complying with Australian Accounting Standards – Reduced Disclosure Requirements and the

Corporations Regulations 2001.

HLB MANN JUDD

Chartered Accountants

D K Swindells

Partner

Sydney

20 August 2013






50

AUDIT COMPLIANCE REPORT


ABN 88 082 408 740

AUDIT COMPLIANCE REPORT

To the members of Australian Livestock Export Corporation Limited

Scope

This audit opinion is a supplement to the audit opinion issued on pages 48 and 49.

We have conducted a compliance audit in relation to the year ended 30 June 2013 for the purposes of the Funding

Agreement (“the Agreement”) commencing 1 July 2011 between the Commonwealth of Australia (“the Commonwealth”)

and Australian Livestock Export Corporation Limited (“LiveCorp”) and acknowledge that our report will be relied upon

by the Commonwealth.

Our audit was conducted to enable us to express an opinion to the Members of LiveCorp and to the Commonwealth.

We disclaim any assumption of responsibility for any reliance on this report to anyone other than the Members of

LiveCorp and to the Commonwealth.

Our audit has been conducted in accordance with Australian Auditing Standards. Our procedures included examination,

on a test basis, of evidence as to whether LiveCorp has complied with its obligations under Clauses 7 and 8 of the

Agreement during the year, and included a review of the efficiency of the accounting systems, processes and controls

contemplated by Clause 7.

The audit opinion expressed in this report has been formed on the above basis.

Auditor’s Opinion

In our opinion, Australian Livestock Export Corporation Limited has complied with its obligations under

Clauses 7 and 8 of the Agreement during the year ended 30 June 2013.

HLB MANN JUDD

Chartered Accountants

Sydney

20 August 2013






51

LIVESTOCK EXPORTS BY DESTINATION 2012-13

COUNTRY VOLUME MARKET %

CaQle Sheep Goat CaQle Sheep Goat

Argentina 8

Bahrain 62,250 3.0

Brunei 6,193 985 1.0 1.6

China 59,235 127 9.3

Egypt 15,300 2.4

Indonesia 271,328 28 42.8 0.0

Israel 67,224 74,088 10.6 3.6

Japan 11,178 1.8

Jordan 9,000 343,894 1.4 16.7

Kazakhstan 2,213 0.3

Kuwait 693,265 33.7

Libya 6,900 1.1

Malaysia 38,548 24,371 57,446 6.1 1.2 92.5

Mauritius 5,461 0.9

New Zealand 3 9 20

Norfolk Island 1 5

Oman 35,368 1.7

Pakistan 8,327 1.3

Philippines 36,978 877 5.8

Qatar 2,768 588,078 0.4 28.6

Russian Federation 36,328 5.7

Saudi Arabia 3,550 69,000 0.6 3.4

Singapore 3,778 3,152 0.2 5.1

Sri Lanka 1,502 0.2

Thailand 8

Turkey 35,609 125,067 5.6 6.1

UAE 111 37,500 373 1.8 0.6

Uruguay 27 4 45 0.1

USA 9 21

Vietnam 15,903 2.5

Total 633,703 2,057,685 62,075

TOTAL BY REGION VOLUME MARKET %

Asia 168,043 29,153 61,583 26.51 1.42 99.20

Indonesia 271,328 - 28 42.82 - 0.05

Middle East 140,462 2,028,510 373 22.17 98.58 0.60

Other 53,870 22 91 8.50 - 0.15

633,703 2,057,685 62,075

52

AGM Annual General Meeting

ALEC Australian Livestock Exporters’ Council

AOP Annual Operating Plan

ASEL Australian Standard for the Export of Livestock

CCA Cadle Council of Australia

CRR&DC Council of Rural Research & Development Corporations

DAFF Department of Agriculture Fisheries and Forestry

ESCAS Exporter Supply Chain Assurance System

ICWP Industry Collaborative Welfare Program

IGIG Industry Government Implementation Group

IOK Infectious Ovine Keratoconjunctivitis

LiveCorp Australian Livestock Export Corporation Limited

LATSA Livestock Air Transport Safety Assessment

LEP Livestock Export Program

LEIPC Livestock Export Industry Protocol Commidee

LERDAC Livestock Export Research and Development Advisory Commidee

MENA Middle East and North Africa

MISP Meat Industry Strategic Plan

MLA Meat and Livestock Australia

MOU Memorandum of Understanding

NAMP National Arbovirus Monitoring Program

OIE World Organisation for Animal Health

R&D Research and Development

RD&E Research, Development and Extension

RDC Research and Development Corporation

RMAC Red Meat Advisory Council

SEA South-East Asia

SCA Sheepmeat Council of Australia

SFA Statutory Funding Agreement

SOP Standard Operating Procedures

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