Droughtmaster Annual Report 2021

Annual Report

2021

Annual Report

2021

1 President’s Report 4 CEO’s Report 6 Directors’ Report 8 Directors’ Declaration 9 Registrar’s Report 10 Sales and Events Report 11 Marketing Report 16 Statement of Comprehensive Income 18 Statement of Financial Position 19 Movements in Equity 20 Notes to the Financial Statements 26 Auditor’s Report 28 Compilation Report

Droughtmaster Stud Breeders’ Society Limited ABN 19 010 129 683 For the year ended 31 March 2021

PRESIDENT’S REPORT

PRESIDENT’S REPORT Dear Members, FOLLOWING WHAT was a tumultuous year for many of us, the Board is pleased to present the Annual Report for the Droughtmaster Stud Breeders’ Society for the financial year ended 31 March 2021.

Up front, I would like to thank our Committees, volunteers and staff for their commitment to the Society over the reported period. Your dedication and hard work have enabled us to continue building on the momentum of our Strategic Plan - The Road Ahead, which focuses on future proofing the Society.

Around the uncertainty of COVID lockdowns and border closures, and not being sure what the future held, the Society stepped up and forged ahead to deliver the objectives of its Strategic Plan and offered members access and participation in all of the Society’s scheduled events.

Todd Heyman | President

Financial Result The profit for the Society including Net Income after Appropriations and Extraordinary Items was $6,707. A number of items of note include:

• Inventory fees - Leading into the 2020-

21 year, members may remember that no increase was applied to membership fees, inventory fees and the breed promotional levy on the basis that many members had experienced several successive drought affected seasons.

This measure was aimed at shifting some financial pressure, however minor, from members to the Society, and preserving female inventory through the drought. As such, some categories of income were lower in the reported year;

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PRESIDENT’S REPORT

PRESIDENT’S REPORT

medium businesses and not-for-profit organisations during the economic downturn associated with COVID-19;

• Employment expenses – the Board has

committed to a three-year Strategic Plan that aims to solidify our position as one of Australia’s most valuable cattle breeds and create a valued membership experience. The increase in employment expenses in the reported year reflects the Society’s commitment to delivering the priorities contained within the Plan;

• The Society committed a further $40,000 toward promoting the breed at Beef 2021; and

• The financial position allowed for a further write down of some Society merchandise.

• The BIN Steer research project – the

BIN Steer research project has provided the Society with invaluable research since 2013. It also reflects in and has contributed to the Society’s non-operating income and expenses over this period. In some previous years, the consignments of BIN Steers sold have made a significant positive contribution toward the Society’s financial position. The research project’s impact on the Society’s financial position in the reported year was negligible;

• The Society’s amended Terms and

Conditions for Society Sponsored Sales have mitigated the Animal Health risks that previously required the Society to make a $20,000 annual provision. Indeed, the Society has released $40,000 of this provision in the reported year;

• Legal expenses - Even though legal

expenses for the Society for the reported year were higher than expected at $27,547, it is worth reflecting on the significant decrease in expenditure in this category.

In each of the previous financial years, this expense category has exceeded $60,000;

• Meeting costs have decreased significantly on previous years;

• Government Cash Flow Boost – the

Society benefitted significantly from the Commonwealth Government’s cash flow boost to support small and

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The focus activities of the Society over the 2020-21 financial year included:

• A review of our brand strategy which resulted in a refresh of the brand along with the implementation of a new and modern website.

• Updated and improved communication and promotional mediums both internally and externally.

• Onboarding and negotiating

corporate partnerships with: – Newstead Brewing, – Ariat Australia, – Just Country Australia, – Australian Community Media and – Morgans Financial Services.

• Initiation and coordination of the production of a new promotional video (“Our Story”) which was launched in November 2020.

• Identifying key risks in the business

and putting mitigation strategies in place to protect the business which included new Terms and Conditions for Society Sponsored Sales.

• Coordinating the rollout of further

BREEDPLAN traits to the membership.

• Employing two new staff (Events and

Office Services Coordinator & Member Services and Office Coordinator)

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• Overseeing the running of all

toward promoting our Droughtmaster cattle as Australia’s natural wonder.

• Developing a White Paper to inform

As members may appreciate, the 202021 financial year was like no other, with many challenges. The Board would like to acknowledge the efforts of its Chief Executive Officer, staff and volunteers in its delivery of the above achievements.

Society Sponsored Sales.

members on the background of DNA testing and its current application within the beef industry.

• Managing operational plans and budgets to deliver on key initiatives and to drive growth of the Droughtmaster breed and memberships.

• Continuing to manage deliverables

during COVID-19 which required staff to work from home for an extended period of time (3 months).

As always, members are encouraged to contact their Zone or National Directors should there be anything they wish to raise with the Board.

The overall position of the Society detailed in the financial statements and this Annual Report should be interpreted by the membership as reflecting a shift in culture, activity and initiatives

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Todd Heyman, President on behalf of the Board of Directors

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CEO REPORT

CEO’S REPORT REFLECTING ON the past 12 months, we have continued to deliver against the Strategic Plan, “The Road Ahead” which was endorsed by the Board in November 2019.

Phase 1 (2020-2021) of the Strategic Plan has been about building a solid foundation with the focus on the following key areas:

• Membership retention and member benefits Corporate governance – refinement • of sub-committees and charters • Constitution review and update • Cultural reset – ‘productivity, unity & positivity’ Refresh of corporate identity and •

communications interface, including marketing and communications strategy Financial management - planning and strategy, 5 year corporate financial model Data capture and utilisation Establish sponsorships and partnerships Society sponsored sale reviews Engagement and alignment with industry stakeholders

• • • • • Simon Gleeson | Chief Executive Officer

We have certainly made inroads into delivering on these areas and some of the key highlights for the year included the new branding and website for the Society, onboarding of five new corporate partners, the release of the “Our Story” promotional video, implementation of terms and conditions for Sponsored Sales to protect the Society’s assets, implementation of Xero as our new accounting system, a white paper for DNA testing and the implementation of policies relating to the governance of the Society.

Despite these highlights, it has been a very challenging year with COVID-19 and staff changes. COVID-19 did result in the office having to work remotely for the best part of 3 months which was followed by our Registrar resigning in June 2020 and our Bookkeeper resigning just prior to financial close (March 2021). COVID-19’s impact on the Droughtmaster Society, in

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ANNUAL REPORT 2021

CEO REPORT

CEO’S REPORT particular the services required for the Droughtmaster Magazine and planning for Society Sponsored Sales and events was extremely difficult. Additionally, impacts of the drought on our members and their inventory levels along with fewer sales from the BIN Research Project have also contributed to the challenges.

On a positive note, new membership has been strong this year and analysing trends over the past 5 years it is pleasing to see the growth in new members trending upwards and membership resignations trending downwards. The chart below provides a snapshot over the past five years. With strong growth in new memberships and member resignations on the decline, we are confident that having a clear strategy and the investment the Society has made in marketing and promotion have contributed to these outcomes.

With female registrations being our core income stream, it is important that it continues to grow against our growing cost base. The decline in female inventory in 2020/21 could be explained by several factors including the financial impact of the drought on our members and uncertainty on the strategic direction of the Society.

Slowing the decline has been vital and continuing to look at new ways to grow the breed has been equally as important.

The chart below represents the past five years of female inventory. Please note,

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members are charged for their inventory in April of each year so as an example the 29,861 head in 2020/21 reflects the inventory charged in April 2020. Since that time, we have seen the rate of decline in female inventory slow down and we are now beginning to see it grow again but it will take some time to get to the levels required for the Society to better service our membership base. To grow our female inventory, we must continue to remind beef producers through targeted marketing campaigns of the benefits and the quality of this breed, particularly after coming off one of the worst droughts in history and now with a rebuild of the national herd (at an all-time low) - a result of both the recent drought and the devasting floods in North Queensland in February 2019.

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several factors including the financial impact of the drought on our members and uncertainty on the strategic direction of the Society. Slowing the decline has been vital and continuing to look at new ways to grow the breed has been equally as important. The chart below represents the past five years of female inventory. Please note, members are charged for their inventory in April of each year so as an example the 29,861 head in 2020/21 reflects the inventory charged in April 2020. Since that time, we have seen the rate of decline in female inventory slow down we are now beginning to see it grow again but it will take some time to get to the levels required for the Society to better service our membership base. To grow our female inventory, we must continue to remind beef producers through targeted marketing campaigns of the benefits and the quality of this breed, particularly Simon Gleeson after coming off one of the worst droughts in history and now with a rebuild of the national herd (at Chief Executive Officer an all-time low) - a result of both the recent drought and the devasting floods in North Queensland in February 2019.

FEMALE INVENTORY

MEMBERSHIP 52 52 40 40

44 44

50 50

43 43 42 42

31,401 30,767 29,914

17 17

2017/2018 2017/2018

32,135

46 46 38 38

31 31

2016/2017 2016/2017

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43 I would like to take this opportunity 46 to 44 40 42 38 thank all our member volunteers who 31 various committees for represent the the Society for your commitment, our 17 sponsors and corporate partners and our key stakeholders for their support and assistance over the past year.

I would 2016/2017 2017/2018 2018/2019 2019/2020 2020/2021 also like to sincerely thank the team in Member Resignations New Members the office for their ongoing dedication With female registrations being our core income stream, it is important that it continues to grow against our growing cost base. decline in female inventory in 2020/21 could be explained by in what was a The challenging year.

2018/2019 2018/2019

Member Resignations Member Resignations

2019/2020 2019/2020

2020/2021 2020/2021

2017/18

2018/19

2019/20

2020/21

New Members New Members

With female registrations being our core income stream, it is important that it continues to grow With female registrations being our core income stream, it is important that it continues to grow against our growing cost base. The decline in female inventory in 2020/21 could be explained by against our growing cost base. The decline in female inventory in 2020/21 could be explained by several factors including the financial impact of the drought on our members and uncertainty on the ANNUAL REPORT 2021 several factors including the financial impact of the drought on our members and uncertainty on the strategic direction of the Society. Slowing the decline has been vital and continuing to look at new strategic direction of the Society. Slowing the decline has been vital and continuing to look at new

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2016/17

29,861

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DIRECTORS’ REPORT

DIRECTORS’ REPORT Droughtmaster Stud Breeders’ Society Limited For the year ended 31 March 2021 Directors Report Your directors present their report on the company for the financial year ended 31 March 2021.

The names of the directors in the office at any time during, or since the end of the year is Name

Meetings Eligible to Attend

Meetings Attended

Angus McCormack

4

4

Anna Hicks

4

4

Bronwyn Betts

4

4

Clint Gartrell

6

6

Doug Miles*

2

2

Jack Stewart-Moore

6

6

Jeff Williams

6

3

Ken McKenzie

6

6

Roger Underwood

6

6

Todd Heyman

6

6

Will Haviland

6

6

* Term ended 6 August 2020

Principal Activities The principal activities of the company during the financial year were promoting and recording Droughtmaster breed of cattle.

No significant changes in the company’s state of affairs occurred during the financial year.

Operating Result The Net Income of the company after Non-Operating Income and Expenditure, Appropriations and Extraordinary Items and after providing for income tax amounted to $6,707.

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The result continues to be impacted by the drought from the past few years and the directors resolved to leave inventory fees unchanged with inventory also down on previous years. The Board has continued to make efforts to build up inventory numbers, promote the breed and the brand, improve operational efficiencies and mitigate risks to the Society around sponsored sales.

Extraordinary Items During the year, the Society was the recipient of the government’s Cash Flow Boost grant in the sum of $100,000. It was a difficult year operationally with staff having to work for 3 months remotely as a result of COVID restrictions.

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ANNUAL REPORT 2021

DIRECTORS’ REPORT

DIRECTORS’ REPORT After Balance Sheet Events During the year the Board resolved that it would enhance its participation at Beef Australia which took place in May 2021.

As a result, the Society invested in the event to host a large number of members and visitors, increase the profile and presence of the Society and ultimately to grow membership and inventory.

Future Developments Likely developments in the operations of the company and the expected results of those operations in future financial years have not been included in this report as the inclusion of such information is likely to result in unreasonable prejudice to the company.

Environmental Issues The company’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a state or territory.

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Proceedings on Behalf of Company No person has applied of leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

The Company was not party to any such proceedings during the year.

Directors Benefits During or since the financial year, no Director of the Company has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation of a Director or with a firm of which he is a member or with a company in which he has a substantial financial interest.

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

Dividends Paid or Recommended No dividends were paid during the year and no recommendation is made as to the dividends.

The directors do not recommend the payment of a dividend.

No options over interest in the company were granted during or since the end of the financial year and there were no options outstanding at the date of this report.

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Todd Heyman, President Dated: 5 July 2021

Roger Underwood, Vice-President Dated: 5 July 2021

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DIRECTORS’ DECLARATION

DIRECTORS’ DECLARATION Droughtmaster Stud Breeders’ Society Limited For the year ended 31 March 2021 Directors Declaration The directors have determined that the company is not a reporting entity and that this special purpose financial report should be prepared in accordance with the accounting policies outlined in Note 1 to the financial statements.

The directors of the company declare that: 1. The financial statements and notes, as set out on pages 1 to 19 are in accordance with the Corporations Act 2001 (a) comply with Australian Accounting Standards as described in Note 1 to the financial statements and the Corporations Regulations 2001 (b) give a true and fair view of the financial position as at 31 March 2021 and of its performance for the year ended on that date in accordance with the accounting policies described in Note 1 to the financial statements 2. In the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

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

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Todd Heyman, President

Roger Underwood, Vice-President

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ANNUAL REPORT 2021

REGISTRAR’S REPORT

REGISTRAR’S REPORT It sure has been an exciting year. On joining Droughtmaster Australia in July 2020 little did I realise the journey that I had embarked on as Registrar and Member Services. On a daily basis it can be very hectic but I enjoy speaking with members and helping resolve issues relating to their Droughtmaster herds.

During my 9 months as the Register and looking after Member Services I have been very fortunate to welcome so many new members to the Society, helping turn aspirations into reality. Attracting passionate people from a variety of backgrounds, ages and postcodes - bringing with them new ideas, fresh enthusiasm and rejuvenation that can only continue to spread the “Droughtie addiction”.

We have also recently seen next generation families reactivate studs that were previously closed. The older generation are in awe and mildly shocked at the admiration the younger generations have for their lifetime efforts and the passion these young ones have, not only bringing these studs back to life but growing and improving them. It is also refreshing to see the value placed on continuing the traditions of that stud prefix and stud number.

I would especially like to thank all the long-standing members who are so willing to lend a hand, provide words of encouragement and advice to these new members. It does not go unnoticed or unappreciated.

More and more schools are re-establishing their agricultural programs and the Droughtmaster is very often the breed of choice. The Society welcomes school memberships offering support to these programs in many ways. Once again, the support Droughtmaster members give these schools by the donation of straws or cattle and by providing advice and assistance is a credit to the generous nature of Droughtmaster members.

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These students are the future – buyers, breeders, members or consumers.

The herd book is rapidly recovering from the hit it took from the recent drought.

It is wonderful to receive requests for the reactivation of so many females and the subsequent registration of two and even three generations of their calves. It is so fortunate that the attributes of the Droughtmaster breed have meant that members have been able to hang onto their best breeders and the girls have repaid in kind by doing what they do best.

DNA – who would have thought that we all would become so competent in reading spreadsheets and interpreting scientific information. Droughtmaster members have overwhelmingly embraced DNA testing, with more and more members testing their whole calf drop. The volume we have witnessed in the office has significantly grown over the past 12 months. The Office continues to work closely with ABRI and the laboratories to streamline the whole DNA process with special focus on unifying results and reporting which will enable swift and timely entry into the herd book.

The aim is to have the process much more efficient over the next six to twelve months.

The new branding and associated marketing continue to really hit the mark. Over the year, I regularly fielded telephone and email enquiries about potential membership.

We have seen a lot of these enquires turn into new members. It has been amazing to experience the number of stories and experiences people have with Droughtmasters, whether talking to them on the phone or out and about at sales and events with my Droughtmaster shirt on. It is this fondness for “Australia’s natural wonder” that makes the future exciting.

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Leah Wall Registrar and Member Services

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SALES AND EVENTS REPORT

SALES AND EVENTS REPORT There were 20 standalone Droughtmaster auction sales held in 2020/21 along with three All Breeds sales which featured good sized Droughtmaster drafts. The total number of Droughtmasters sold through auction sales was up by 10%, the average up by 34%, strong clearance rates at 91% and the gross up by 47%.

As members are aware, the Droughtmaster Australia re-brand occurred during the year which was also rolled out across Society Sponsored Sales. It is important that our branding is consistent across the Society and Society Sponsored Sales to have uniformity across the breed which in turn will create greater exposure and brand awareness.

Rondel Whiskey who sold for $160,000 to 3-way stud syndicate Nindethana Droughtmasters, High Country Droughtmasters & Glenlands D Droughtmasters at the 2020 National Droughtmaster Bull Sale.

Record price at 2021 National Droughtmaster Female Sale: Vendor Brandon Russell, Locarno Droughtmasters, Dingo, buyer Rowan Smith, Smithy’s Droughtmasters, Warwick, and selling agent, Andrew Meara, Elders Stud Stock, with the $29,000 leading lady, Locarno Piper (S).

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The year saw some high-priced bulls with Rondel Whiskey topping the National bull sale at $160,000, Glenlands D Bakers Dozen topping the Glenlands Sale at $120,000. Other notable high-priced bulls include Locarno Odin selling for $100,000 and Glenlands J Black Jack also selling for $100,000. Locarno Piper was the highest priced female sold at the National Female Sale for $29,000, setting a new record for this sale.

The Gatton Futurity was one of the first shows on the calendar since the easing of COVID restrictions. A record of 49 exhibitors attended the show bringing 187 animals which is the second highest number of exhibits in the show’s history. There were 10 first time exhibitors attending the show, with included a large team from JJ Fitting service for numerous Central Zone members. Colonial Catering from Gatton catered the delicious meal for the Friday night meet and greet and overall the show was extremely successful.

Leigh Eleison Sales and Events Manager

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ANNUAL REPORT 2021

MARKETING REPORT

MARKETING REPORT WHAT AN exciting year it was in the marketing and promotions space, with changes to the masterbrand, a new website, the launch of ‘Our Story’, and a new social media platform “Droughtmaster Beef ”.

Supporting the Strategic Plan endorsed by the Board in November 2019, a key objective of “The Road Ahead” is to increase marketing and promotion to include the entire supply chain, and, a year down the track, we are well on the road to achieving this.

Rebrand Droughtmaster approached branding agency, Brother & Co, with the remit to revitalize the brand with a new strategy, positioning and identity. Brother & Co conducted extensive research including numerous interviews with Society members and relevant industry players, and the feedback played a key role in the creation of the new brand. Of significant importance was the requirement to balance the heritage of the breed with the need to contemporise the brand to ‘talk’ to the entire supply chain. A new colour palette was also established, and has seen the brand adopting the more natural colours of the breed’s environment.

The result has been an overwhelming success, with the new brand and tagline “Australia’s natural wonder” now a real stand out from other breeds.

We have since rolled out the new branding across all communications interfaces, including our e-news templates, social media platforms, marketing materials, and signage.

Our Story Launch A promotional video, “Our Story”, was produced in conjunction with the rebrand ANNUAL REPORT 2021

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and was officially released in November at a media launch, followed by a dinner involving Droughtmaster Board members, sponsors, and key industry guests. The video pays homage to the heritage of the breed, and it has since been another key tool in the marketing mix – beautifully depicting the attributes of breed that underpin its reputation as Australia’s natural wonder.

Droughtmaster Beef Facebook page Food providence holds a lot of value for consumers, where people are becoming more genuinely interested in where their food comes from. To this end, we have created a new Facebook page (Droughtmaster Beef), which aims to educate consumers on the benefits of not only Droughtmaster beef, but red meat in general, as well as promoting key topics in the red meat industry, such as the environment, animal welfare and nutrition. The Droughtmaster Beef page aims to create stories that give insight into the whole beef supply chain.

Website The new Droughtmaster website is a critical marketing tool for the Society, and, as a resource for both members and an information platform for users throughout the supply chain, we continue to focus on keeping it functional, aesthetically pleasing and relevant. The new website was launched with the new branding and with updated graphics, and I would like to take the opportunity to thank members Jenny Underwood and Sharon Harms for their contribution to the new image library.

Importantly we now use Google Analytics for our website which enables us to track and review the effectiveness of the website

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MARKETING REPORT

MARKETING REPORT Audience Overview

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Audience Overview Audience Overview

Audience Overview Audience Overview AUDIENCE OVERVIEW

Audience Overview

Audience Overview

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ANNUAL REPORT 2021

MARKETING REPORT

MARKETING REPORT

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Additional Marketing initiatives 2020 Online Sales Platforms:

Social Media:

The impact of travel restrictions under COVID saw a rapid uptake of online technology among both seedstock breeders, and in commercial cattle producers seeking to access genetics despite being unable to travel. Online platforms Auctions Plus, Elite Livestock Auctions and Stocklive saw increases of up to 70 percent in the number of sales in 2020. To this end, there are now more opportunities for our members

Social Media continues to be an integral part of the Droughtmaster Society’s marketing mix, providing a platform to grow the brand, engage with our audience, increase awareness and encourage interaction with the brand via the Droughtmaster website or other online platforms. We continue to see growth

to expand their marketing reach and gain access to a wider sales base. This also means that creating brand awareness is vital to be able to ‘stand out from the crowd’.

Droughtmaster Magazine: There were some challenges with sales and production of the Droughtmaster Magazine during 2020, however the magazine continues to be a crucial resource and marketing tool for members, and, as such, a greater focus has been on creating a wider scope of content and driving ad sales revenue.

Sponsorship: We welcomed a number of new corporate partners in 2020 – Ariat and Just Country Australia, Morgans Financial Services and Newstead Brewing Co. We continue to seek ways to leverage from these partnerships and create long term, meaningful relationships.

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across all social media channels. Like the website, we continue to review and monitor the effectiveness of our social media platforms – so we can understand who our audience is and therefore create content that resonates and then find more people like the ones in our current audience.

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Ali Bull Marketing & Events Executive

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MARKETING REPORT

MARKETING REPORT

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Social Media Insights Droughtmaster Australia

Followers 6,434 | Likes 6,026 21% increase since 2019/20

How do we compare?

LIKES

1. Herefords Australia

10.5k

2. Angus Australia

8.2k

3. Droughtmaster Australia

6K

4. Santa Gertrudis Australia

5.5K

5. Charolais Society of Australia

5.2K

6. Australian Brahman Breeders Association

4.9K

Facebook Droughtmaster Beef (established November 2020) Followers 818 | Likes 698

Instagram: droughtmaster_australia Likes 1,352 | 13% increase since 2019/20

LinkedIn: Droughtmaster Australia

Followers 69 | 750% increase since 2019/20

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droughtmaster.com.au

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ANNUAL REPORT 2021

FINANCIAL REPORT Droughtmaster Stud Breeders’ Society Limited ABN 19 010 129 683 For the year ended 31 March 2021

ANNUAL REPORT 2021

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FINANCIAL REPORT

STATEMENT OF COMPREHENSIVE INCOME Droughtmaster Stud Breeders’ Society Limited For the year ended 31 March 2021

Income

2020/21

2019/20

5,513

10,137

Inventory Fees

430,277

445,910

Membership Fees

125,866

128,888

Promotion Income - Levies

166,292

164,691

Promotion Income - Other

50,738

57,341

154,646

169,873

Other Income

3,745

–

Transfer Fees

27,083

25,558

Total Income

964,161

1,002,398

964,161

1,002,398

4,500

4,000

0

6,743

4,000

4,000

0

940

1,872

1,910

4,933

8,570

Data Processing Charges - ABRI

36,553

37,974

Depreciation

25,044

19,763

3,323

3,690

Clerical - Labour Hire

1,935

–

Employee Expenses

3,649

2,904

Interest Income

Sponsored Sales

Total Income

Less Operating Expenses Accountancy Fees Amortisation - Improvements Auditors Remuneration Bad Debts Written Off Bank Charges Computers

Electricity & Gas Employment Expenses

Fringe Benefits Tax Expense Provision - Annual Leave Provision - Long Service Leave

–

1,891

18,447

9,481

5,706

6,066

–

431

498

930

38,042

25,670

420,920

274,609

489,196

321,981

Staff Amenities Staff Training Superannuation Wages & Salaries Total Employment Expenses

The accompanying notes form part of these financial statements.

These statements should be read in conjunction with the attached compilation report.

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ANNUAL REPORT 2021

FINANCIAL REPORT

Operating Expenses (continued)

2020/21

2019/20

2,416

3,995

Insurance

10,075

10,524

Legal Fees

27,547

32,682

Meetings

32,077

65,568

Motor Vehicles

1,568

5,626

Permit and Licence Fees

2,593

2,112

Postage

7,352

7,594

General Expenses

Printing & Stationery

14,583

12,413

185,294

197,888

Rates

6,749

6,296

Repairs & Maintenance

6,826

6,419

Sponsored Sales Costs

156,469

169,873

10,894

10,728

7,560

8,116

15,000

14,609

Promotional Expenses

Tropical Breeds Research Telephones Write-Off Merchandise Stock Subscriptions

2,851

–

1,059,275

964,014

(95,114)

38,384

(87,795)

(235,658)

90,827

393,141

–

(19,474)

100,000

–

(1,211)

–

101,821

138,009

6,707

176,393

Legal Costs Incurred

–

27,457

Total Less Extraordinary Items

–

27,457

(40,000)

20,000

Total Less Operating Expenses

Operating Profit

Non-Operating Income and Expenses BIN Research Project - Expenses BIN Research Project - Net Amount Recovered Sale of Research Steers Flood Relief Govt Cash Flow Boost Loss on Disposal of Fixed Assets Total Non-Operating Income and Expenses

Net Income Before Appropriations and Extraordinary Items

Less Extraordinary Items

Less Appropriations Provision Animal Health Management Provision Beef Expo Expenses

40,000

–

–

20,000

6,707

128,936

Total Less Appropriations

Net Income After Appropriations and Extraordinary Items

The accompanying notes form part of these financial statements.

These statements should be read in conjunction with the attached compilation report.

ANNUAL REPORT 2021

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FINANCIAL REPORT

STATEMENT OF FINANCIAL POSITION Droughtmaster Stud Breeders’ Society Limited As at 31 March 2021 Assets

Notes

31 Mar 2021

31 Mar 2020

–

460

Bank - NAB #1680

60,994

22,946

Bank - NAB #7061

521,782

11,598

582,775

35,005

Rural Bank #301866489

–

100,000

Rural Bank #302094909

–

100,000

Rural Bank #302040324

–

150,000

Total Term Deposits

–

350,000

CURRENT ASSETS Cash and Cash Equivalents Cash on Hand

Total Cash and Cash Equivalents Term Deposits

Trade and Other Receivables

2

34,848

458,116

Merchandise Stock on Hand

3

12,276

14,609

Research BIN Project - Livestock on Hand

196,926

91,959

Total Current Assets

826,825

949,689

NON-CURRENT ASSETS Financial Assets

4

–

12,800

Plant, Property and Equipment

5

766,135

787,635

766,135

800,435

1,592,960

1,750,124

Total Non-Current Assets

Total Assets Liabilities Current Liabilities Trade Creditors, Accruals and Income Received in Advance

6

64,238

191,492

Provisions

7

64,858

22,121

129,096

213,613

146,061

225,415

146,061

225,415

275,157

439,028

1,317,803

1,311,096

Retained Earnings

1,317,803

1,311,096

Total Member’s Funds

1,317,803

1,311,096

Total Current Liabilities Non-Current Liabilities Provisions

7

Total Non-Current Liabilities

Total Liabilities Net Assets Members’ Funds

The accompanying notes form part of these financial statements.

These statements should be read in conjunction with the attached compilation report.

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ANNUAL REPORT 2021

FINANCIAL REPORT

MOVEMENTS IN EQUITY Droughtmaster Stud Breeders’ Society Limited For the year ended 31 March 2021

Equity

31 Mar 2021

31 Mar 2020

1,311,096

1,183,100

Profit for the Period

6,707

127,996

Total Increases

6,707

127,996

1,317,803

1,311,096

Opening Balance Increases

Total Equity

The accompanying notes form part of these financial statements.

These statements should be read in conjunction with the attached compilation report.

Photo: J Underwood

ANNUAL REPORT 2021

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NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS Droughtmaster Stud Breeders’ Society Limited For the year ended 31 March 2021 1. Summary of Significant Accounting Policies

AASB 1031: Materiality AASB 1048: Interpretation and Application of Standards

The financial report is a special purpose financial report prepared to satisfy the financial report preparation requirements of the Corporations Act 2001. The directors have determined that the company is not a reporting entity.

No other Accounting Standards, Accounting Interpretations or other authoritative pronouncements of the Australian Accounting Standards Board have been applied.

Droughtmaster Stud Breeders’ Society Limited is a company limited by guarantee, incorporated and domiciled in Australia.

Each member of the Company undertakes to contribute to the assets of the Company, an amount not exceeding twenty dollars($20) in the event of the same being wound up.

Basis of Preparation The financial report has been prepared in accordance with the requirements of the Corporations Act 2001 and the following applicable Australian Accounting Standards and Australian Accounting Interpretations: AASB 101: Presentation of Financial Statements AASB 107: Cash Flow Statements AASB 108: Accounting Policies, Changes in Accounting Estimates and Errors AASB 110: Events after the Balance Sheet Date AASB 116: Property, Plant and Equipment AASB 118: Revenue AASB 119: Employee Benefits AASB 137: Provisions, Contingent Liabilities and Contingent Assets AASB 139: Recognition and Measurement of Financial instruments

Reporting basis and conventions The financial report has been prepared on an accruals basis and is based on historic costs modified, where applicable, by the revaluation of selected non current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

The following is a summary of the material accounting policies adopted by the company in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

Accounting Policies Income Tax No provision for taxation is necessary because the Company is exempt from tax under Section 50-45 of Item 9.1(c) of the Income Tax Act of 1997.

Inventories Inventories are measured at the lower of cost and net realisable value. Cost of inventory is determined using the first-in-first-out basis and is net of any rebates and discounts received.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and

These notes should be read in conjunction with the attached compilation report.

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ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS

the costs necessary to make the sale. Net realisable value is estimated using the most reliable evidence available at the reporting date and inventory is written down through an obsolescence provision if necessary.

Property, Plant and Equipment Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment.

Land and buildings Land and buildings are measured using the cost model.

Plant and equipment Plant and equipment are measured using the cost model.

Depreciation Land and Buildings is depreciated on a straight line basis over the assets useful life to the Company, commencing when the asset is ready for use.

The depreciable amount of all other property, plant and equipment, except for freehold land is depreciated on a diminishing value method from the date that management determine that the asset is available for use.

Leased assets and leasehold improvements are amortised over the shorter of either the unexpired period of the lease or their estimated useful life.

The estimated useful lives used for each class of depreciable asset are shown below: Assets held under a finance lease and leasehold improvements are depreciated over the shorter of the term of the lease and the assets useful life.

Financial Instruments Financial instruments are recognised initially using trade date accounting i.e. on the

date that company becomes party to the contractual provisions of the instrument.

On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for instruments measured at fair value through profit or loss where transaction costs are expensed as incurred).

Loans and Receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers but also incorporate other types of contractual monetary assets.

After initial recognition these are measured at amortised cost using the effective interest method, less provision for impairment. Any change in their value is recognised in profit or loss.

The company’s trade and most other receivables fall into this category of financial instruments.

Significant receivables are considered for impairment on an individual asset basis when they are past due at the reporting date or when objective evidence is received that a specific counterparty will default.

The amount of the impairment is the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable.

In some circumstances, the company renegotiates repayment terms with customers which may lead to changes in the timing of the payments, the company does not necessarily consider the balance to be impaired, however assessment is made on a case-by-case basis.

These notes should be read in conjunction with the attached compilation report.

ANNUAL REPORT 2021

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NOTES TO THE FINANCIAL STATEMENTS

Available-for-sale financial assets

Where assets do not operate independently of other assets, the recoverable amount of the relevant cashgenerating unit (CGU) is estimated.

Available-for-sale financial assets are nonderivative financial assets that do not qualify for inclusion in any of the other categories of financial assets or which have been designated in this category.

The company’s available-for-sale financial assets include listed securities.

The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value in use.

Value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit.

All available for sale financial assets are measured at fair value, with subsequent changes in value recognised in other comprehensive income.

Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss.

Gains and losses arising from financial instruments classified as availablefor-sale are only recognised in profit or loss when they are sold or when the investment is impaired.

Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment loss, except for goodwill.

In the case of impairment or sale, any gain or loss previously recognised in equity is transferred to the profit or loss.

Financial Assets

Subsequent recoveries of amounts previously written off are credited against other expenses in profit or loss.

Financial assets are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist.

Subsequent to initial recognition these instruments are measured as set out below.

Recognition

A significant or prolonged decline in value of an available-for-sale asset below its cost is objective evidence of impairment, in this case, the cumulative loss that has been recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment. Any subsequent increase in the value of the asset is taken directly to other comprehensive income.

Available for sale financial assets All investments are classified as available for sale financial assets. Available for sale financial assets are reflected at fair value unless the fair value cannot be reliably measured. Unrealised gains and losses arising from changes in fair value are taken directly to equity.

Impairment of Non Financial Assets

Fair Value

At the end of each reporting period, the company determines whether there is an evidence of an impairment indicator for non financial assets.

Where this indicator exists the recoverable amount of the asset is estimated.

Fair value is determined based on current bid prices for all quoted investments.

Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

These notes should be read in conjunction with the attached compilation report.

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ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS

Employee Benefits Provision is made for the company’s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled.

Employee benefits expected to be settled more than one year after the end of the reporting period have been measured at the present value of the estimated future cash outflows to be made for those benefits.

In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Cash flows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows. Changes in the measurement of the liability are recognised in profit or loss.

economic benefits will result and that outflow can be reliably measured.

Cash and Cash Equivalents Cash and cash equivalents comprises cash on hand, demand deposits and short term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

Revenue and Other Income Revenue is recognised when the amount of the revenue can be measured reliably, it is probable that economic benefits associated with the transaction will flow to the company and specific criteria relating to the type of revenue as noted below has been satisfied.

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

Employee benefits are presented as current liabilities in the statement of financial position if the company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date regardless of the classification of the liability for measurement purposes under AASB 119.

Sale of Goods

Share Capital

Interest revenue is recognised using the effective interest rate method.

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of ordinary shares and share options which vest immediately are recognised as a deduction from equity, net of any tax effects.

Provisions Provisions are recognised when the company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of

Revenue is recognised on transfer of goods to the customer as this is deemed to be the point in time when risks and rewards are transferred and there is no longer any ownership or effective control over the goods.

Interest Revenue

Rendering of Services Revenue in relation to rendering of services is recognised depends on whether the outcome of the services can be measured reliably. If this is the case, then the stage of completion of the services is used to determine the appropriate level of revenue to be recognised in the period.

If the outcome cannot be measured reliably measured then revenue is recognised to the extent of expenses recognised that are recoverable.

These notes should be read in conjunction with the attached compilation report.

ANNUAL REPORT 2021

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NOTES TO THE FINANCIAL STATEMENTS

Other Income

Cash flows in the statement of cash flows are included on a gross basis and the GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Other income is recognised on an accruals basis when the company is entitled to it.

Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Comparative Amounts Comparatives are consistent with prior years unless otherwise stated.

Receivables and payables are stated inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables in the statement of financial position.

Where a change in comparatives has also affected the opening retained earnings previously presented in a comparative period, an opening statement of financial position at the earliest date of the comparative period has been presented.

2. Trade and Other Receivables Trade Receivables

2020/21

2019/20

31,561

454,829

10,000

10,000

(6,713)

(6,713)

34,848

458,116

34,848

458,116

Trade Debtors Research Grant Research Grant Less Expended Total Trade Receivables

Total Trade and Other Receivables

3. Stock On Hand (Merchandise) Changes to the branding of Society and its’ promotional activities is likely to result in the realisable value of the inventory of merchandise being below the cost. The Board has elected to write off the value of the remaining stock that was on hand prior to the Society’s rebranding.

4. Financial Assets Financial Assets

2020/21

2019/20

–

12,800

–

12,800

Shares in Listed Company

Total Financial Assets

The NAB securities investment was disposed of during the year as a result of a compulsory redemption exercised by the National Australia Bank.

These notes should be read in conjunction with the attached compilation report.

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ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS

5. Plant and Equipment, Motor Vehicles Plant and Equipment, Motor Vehicles

2020/21

2019/20

Building & Land at Cost

806,547

806,547

Building & Land Less: Accum Amortisation

(84,546)

(77,803)

Motor Vehicle

–

50,968

Motor Vehicle Less: Accum Depreciation

–

(30,790)

24,822

21,772

(20,476)

(15,358)

99,638

88,158

(78,588)

(78,839)

42,500

42,500

(39,832)

(38,230)

28,465

25,465

(12,395)

(6,756)

766,135

787,635

2020/21

2019/20

Office Equipment Office Equipment Less: Accum Depreciation Plant and Equipment Plant and Equipment Less: Accum Depreciation Software Software Less: Accum Depreciation Website Development Website Development Less: Accum Depreciation

Total Plant and Equipment, Motor Vehicles

6. Trade and Other Payables Trade and Other Payables Accrued Expenses

6,600

129,705

39,958

32,485

(29)

15,399

13,490

13,903

4,218

–

64,237

191,492

2020/21

2019/20

Provision Animal Health

20,000

60,000

Provision Beef Aust Expo

62,605

60,000

Provision Holiday Pay

40,568

22,121

Provision Long Service Leave

29,965

24,259

Provision Market Development

42,453

67,453

Provision Sales Development Fund

15,328

13,702

210,919

247,536

Trade Payables GST Payable Income Received in Advance Visa Card

Total Trade and Other Payables

7. Provisions Provisions (Current and Non Current Liabilities)

Total Provisions

As noted in the directors report the Provision for Animal Health was reduced as a result of improvements made by the Society in the management of Sponsored Sales and these funds were applied to an increase in the Provision for the Beef Expo which was held in April 2021.

These notes should be read in conjunction with the attached compilation report.

ANNUAL REPORT 2021

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AUDITOR’S REPORT

AUDITOR’S REPORT Droughtmaster Stud Breeders’ Society Limited For the year ended 31 March 2021 Report on the Financial Report

Note 1, are appropriate to meet the needs of the members. I conducted my audit in accordance with Australian Auditing Standards. These Auditing Standards require that I comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

I have audited the accompanying financial report of Droughtmaster Stud Breeders’ Society Limited which comprises the statement of financial position as at 31 March 2021 and the statement of comprehensive income for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration.

Directors Responsibility for the Financial Report The directors of the company are responsible for the preparation and fair presentation of the financial report and have determined that the accounting policies described in Note 1 to the financial statements, which form part of the financial report, are appropriate to meet the requirements of the Corporations Act 2001 and are appropriate to meet the needs of the members.

The directors’ responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility My responsibility is to express an opinion on the financial report based on my audit.

No opinion is expressed as to whether the accounting policies used, as described in

26

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 judgment, 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 entity’s preparation and fair presentation of the financial report 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 entity’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.

The financial report has been prepared for distribution to members for the purpose of fulfilling the directors’ financial reporting under the Corporations Act 2001. I disclaim any assumption of responsibility for any reliance on this report or on the financial report to which it relates to any person other than the members, or for any purpose other than that for which it was prepared.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

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ANNUAL REPORT 2021

AUDITOR’S REPORT

Independence

accordance with the accounting

In conducting my audit, I have complied with the independence requirements of the Corporations Act 2001. I confirm that the independence declaration required by the Corporations Act 2001, provided to the directors of Droughtmaster Stud Breeders’ Society Limited would be in the same terms if provided to the directors as at the date of this auditor’s report.

policies described in Note 1; and (b) complying with Australian Accounting Standards to the extent described in Note 1 and complying with the Corporations Regulations 2001.

Auditor’s signature:

Auditor’s Opinion In my opinion the financial report of Droughtmaster Stud Breeders’ Society Limited is in accordance with the Corporations Act 2001, including:

Name of Auditor:

Ian Mortley

Lead Auditor

(WLW Group Pty Ltd)

Auditor’s address:

40 James Street

(a) giving a true and fair view of the company’s financial position as at 31 March 2021 and of its performance for the year ended on that date in

Burleigh Heads

QLD 4220

Dated:

5 July 2021

ANNUAL REPORT 2021

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COMPILATION REPORT

COMPILATION REPORT Droughtmaster Stud Breeders’ Society Limited For the year ended 31 March 2021

Our Responsibility

We have compiled the accompanying special purpose financial statements of Droughtmaster Stud Breeders’ Society Limited, which comprise the asset and liabilities statement as at 31 March 2021, income and expenditure statement , the statement of cash flows, a summary of significant accounting policies and other explanatory notes. The specific purpose for which the special purpose financial statements have been prepared is set out in Note 1.

On the basis of information provided by the partners we have compiled the accompanying special purpose financial statements in accordance with the basis of accounting as described in Note 1 to the financial statements and APES 315 Compilation of Financial Information.

We have applied our expertise in accounting and financial reporting to compile these financial statements in accordance with the basis of accounting described in Note 1 to the financial statements.

We have complied with the relevant ethical requirements of APES 110 Code of Ethics for Professional Accountants.

The Responsibility of the Committee Member’s The committee of Droughtmaster Stud Breeders’ Society Limited are solely responsible for the information contained in the special purpose financial statements, the reliability, accuracy and completeness of the information and for the determination that the basis of accounting used is appropriate to meet their needs and for the purpose that financial statements were prepared.

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Ian Watson WLW Group Pty Ltd Dated: 5 July 2021

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ANNUAL REPORT 2021

Droughtmaster Stud Breeders’ Society Limited ABN 19 010 129 683 For the year ended 31 March 2021

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