CEO’s Report

Simon Gleeson | Chief Executive Officer 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

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

CEO’S REPORT (CONTINUED)

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, 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.

I would like to take this opportunity to thank all our member volunteers who represent the various committees for the Society for your commitment, our sponsors and corporate partners and our key stakeholders for their support and assistance over the past year. I would also like to sincerely thank the team in the office for their ongoing dedication in what was a challenging year.

Simon Gleeson Chief Executive Officer

MEMBERSHIP

52 52

40 40 44 44

31 31 43 43 42 42 50 50

17 17 46 46 38 38 52

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, 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 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.

31 43

50 40 38

44 42 17

46 2016/2017 2017/2018 2018/2019 2019/2020 2020/2021 Member Resignations New Members

FEMALE INVENTORY

29,914 30,767 31,401 32,135

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 Angus McCormack Anna Hicks Bronwyn Betts Clint Gartrell Doug Miles* Jack Stewart-Moore Jeff Williams Ken McKenzie Roger Underwood Todd Heyman Will Haviland

* Term ended 6 August 2020 Meetings Eligible to Attend Meetings Attended 4 4

4 4 6 2 6 6 6 6 6 6 4 4 6 2 6 3 6 6 6 6

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. 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.

DIRECTORS’ REPORT (CONTINUED)

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.

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.

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:

Todd Heyman, President Dated: 5 July 2021

Roger Underwood, Vice-President Dated: 5 July 2021