FINANCIAL OVERVIEW Tony Marks Executive Manager Corporate and Member Services AHA’s operating result was a surplus of $1.8 million in 2016-17 against a budgeted deficit of $0.26 million. This better-than-budget outcome has resulted equally from additional income of $1 million over budget and expenditure being $1.1 million less than budget. The operating surplus is reflected in increased cash holdings and increases in industry levy Member reserves and core reserves. 1 Total income was $15.5 million, exceeding the AOP budget of $14.5 million by $1 million, predominantly as a result of several key factors. Firstly, the recognition of the carrying value of Livestock Biosecurity Network (LBN) net assets of $0.45 million for the 51% shareholding adopted by AHA. Secondly, due to the recognition of $0.33 million income for long-completed projects previously held as unearned revenue. Thirdly, $0.22 million for a range of additional revenues for gate signs, training resources, AHA facilities hire for events and subscriptions and grants for private veterinarian access to training and accreditation. Levy income overall was in line with budget at $6.9 million, although individual Members’ results varied with grass-fed cattle, dairy and goat industry levies declining and sheep and wool industry levies improving. EADRA levies received for laying and meat chicken producers were slightly better than budget at $0.47 million, as the levy for laying chicken producers continued for a short period after the entire amount of the Commonwealth’s underwriting of the 2012-13 avian influenza outbreaks had been collected. Interest income of $0.34 million was better than budget of $0.3 million due to the invoicing of, and payment by Members early in the year and tight management of cash and investment accounts. “AHA’s financial position has been strengthened by the operating result...” 2 Total expenditure was $13.7 million, being $1.1 million below budget. A number of projects have deferred deliverable milestones or delivered efficiencies throughout the year, including sheep production conditions ($0.4 million) where the Research & Development (R&D) component of the project was not undertaken by agreement; Transmissable Spongiform Encephalopathy Freedom Assurance Program (TSEFAP) ($0.4 million) where surveillance costs are not passed on in full by two jurisdictions; Biosecurity Research Development & Extension (RD&E) ($0.3 million), where a new strategy is to be developed prior to implementation; and National EAD training ($0.1 million) as a result of a lack of staff training resources. There were six projects which did not commence for various reasons, increasing the under-budget outcome ($0.3 million). Offsetting this was some expenditure incurred for the ten additional projects that were not in the AOP or budget ($0.4 million). AHA’s financial position has been strengthened by the operating result with the balance sheet showing equity at $16.4 million, up from $14.6 million in 2015-16. This total AHA equity balance is attributable to two distinct sources – ‘core’ operating surpluses since AHA’s inception of $5.7 million and industry levies that have exceeded industry expenditure by $10.7 million. The individual levy reserves are maintained according to industry advice to AHA. AHA’s total assets of $25.1 million is comprised of $19.3 million in cash and investments. This balance 10 ANNUAL REPORT 2016-17
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