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 ($0.26 million). This better-than-budget outcome has resulted equally from additional income of $1.0 million over budget and expenditure being $1.1 million less than budget. 1 Total income was $15.5 million, exceeding the AOP budget of $14.5 million by $1.0 million, predominantly as a result of several key factors. Firstly, the recognition of the carrying value of Livestock Biosecurity Network Pty Ltd (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 and subscriptions for private vets access to training and accreditation. Levy income overall was in line with budget at $6.9 million. EADRA levies received for laying and meat chicken producers were slightly better than budget at $0.47 million. 2 Total expenditure was $13.7 million, being $1.1 million below budget. A number of projects have deferred deliverable milestones throughout the year, or did not commence, offset to a small degree by work commenced on new projects. 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 6 “AHA’s financial position has been strengthened by the operating result...” 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 is invested across a minimum of two ‘AAA’ rated banks and products with an appropriate spread of maturity dates to meet AHA’s planned and unplanned requirements. AHA’s liabilities of $3.5 million includes GST and accounts payable of $1.3 million and accruals of $2.2 million. The substantial amount of accrued expenses relates to the sample collection and laboratory costs for NAMP and TSEFAP where work undertaken for the disease cycles in the financial year isn’t finalised until several months after the end of the cycle. Provisions for annual and long service leave and salary related payables amounts to $0.37 million. Unearned revenue of $4.8 million represents the balance of cash received by AHA, primarily from government Members, for which project milestones have not yet been delivered, and therefore not yet recognised as revenue in the income statement. 3 Core subscriptions increased for the first time in six years in 2016-17, by 6% upon the recommendation of Members at the November 2015 Members Forum, at which it was highlighted the importance of properly resourcing AHA’s core programs. ANNUAL REPORT SUMMARY 2016-17
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