the border fence maintenance board of …...adelaide road broken hill i am pleased to present the...

ANNUAL REPORT AND STATEMENT

THE BORDER FENCE MAINTENANCE BOARD OF NEW SOUTH WALES

AS REQUIRED BY THE PUBLIC FINANCE AND AUDIT ACT, 1983

AND ANNUAL REPORT (STATUTORY BODIES) ACT 1984

FOR THE YEAR ENDED- 31 DECEMBER 2017

BORDER FENCE MAINTENANCE BOARD (FOR THE WESTERN DIVISION OF NEW SOUTH WALES)

ABN: 14 286 958 340

Please address all communications to The Secretary PO Box 279 Broken Hill NSW 2880 Phone: (08) 8088 4 724 Fax : (08) 8088 2051

3 April 2018

The Hon. Paul Toole, MP Minister for Lands and Forestry, and Minister for Racing 52 Martin Place SYDNEY NSW 2000

Dear Minister,

ADELAIDE ROAD BROKEN HILL

I am pleased to present the Annual Report of the Border Fence Maintenance Board for the year ended 31 December 2017 for your information and presentation to Parliament.

This Report has been prepared in accordance with the Annual Reports (Statutory Bodies) Act 1984 and the Public Finance and Audit Act 1983.

Yours Sincerely

Andrew Bell Chairman Border Fence Maintenance Board

Charter

The NSW Border Fence Maintenance Board is established and administered in accordance with the provisions of the Border Fence Maintenance Act 1921.

The Border Fence Maintenance Act 1921 originally placed responsibility for the fence under the Western Lands Commission and an amending Act in 1957 established the Wild Dog Destruction Board and transferred responsibility to the Board. In 2017, the name of the Board was changed to the Border Fence Maintenance Board as it better reflects the function of the Board.

The Board's primary function is to erect, maintain and repair a dog proof fence along specified sections of the New South Wales borders with Queensland and South Australia, thereby excluding wild dogs from grazing lands of the Western Division of New South Wales.

The South Australian section of the border fence is erected on or near the western border of New South Wales and extends from the North West border of New South Wales (Cameron Corner) in a southerly direction for approximately 257 kms along the NSW/SA border.

The Queensland section of the border fence is erected approximately 15 metres north of the border of New South Wales and extends from the western border of NSW (Cameron Corner) for 349 kms east to a point 15kms from Hungerford.

The Border Fence Maintenance Act 1921 requires the Board to establish a fund and for the Board to use that fund for the purposes of maintaining the fence. The Board is also able to charge a levy in the form of wild dog rates on certain landholders in the Western Division . These rates must be paid into the fund .

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Current fence alignments

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MANAGEMENT AND STRUCTURE The Board

The Border Fence Maintenance Board comprises six Members , including the Chairperson, who in accordance with the provisions of the Border Fence Maintenance Act 1921 is the Western Lands Commissioner. The other five Members are all resident pastoral landholders of the Western Division of NSW. Appointment to the Board occurs on nomination by the Western Local Lands Services (three Members) and one each from the Western Division Council of New South Wales Farmers' Association and the Pastoralists' Association of West Darling.

Details of current Board Membership;

Mr Andrew Bell Western Lands Commissioner Chairman Department of Industry- Lands & Water 45 Wingewarra Street DUBBO NSW 2830

Mr Callum Robinson Western Division Council NSW Farmers' Association Level 25, 66 Goulbourn Street SYDNEY NSW 2000

Mr Neill Leigo Western Local Lands Services BROKEN HILL NSW 2880

Mr Ken Turner Pastoralists' Association of West Darling BROKEN HILL NSW 2880

Mr Nicolaas Bonselaar Western Local Lands Services BROKEN HILL NSW 2880

Mr Robert Wason Western Local Lands Services BROKEN HILL NSW 2880

Board Members and Operations Manager discussing proposed works on sand hills.

Current Staffing

The Board's administration is based in Broken Hill in an Office situated on the Adelaide Road, approximately 8kms from Broken Hill, where the Board Secretary, Ms Robyn Mann is employed to manage the administrative and accounting functions of the Board.

The Operation Manager, Mr Laurence Doidge is based at Smithville Depot located 240kms north of Broken Hill on the South Australian/New South Wales border fence. Laurence resigned from the position effective 8 December 2017.

Other Operational Staff comprise a Leading Hand based at Wompah, eight Maintenance Employees and two Plant Operators. The Maintenance Employees are located at various locations along the length of the fence and are accommodated in cottages provided by the Board.

Maintenance Employees are assigned a section of the fence to both monitor and maintain. The length of the section assigned to each individual varies between 60 - 100 kilometres. Fence inspections are undertaken by each Maintenance Employee twice weekly (Monday and Friday) to ensure the fence remains in a dog proof condition and has not been compromised. Maintenance of the fence is undertaken where required during each inspection and throughout the week.

Contact Officers

The Border Fence Maintenance Board's contact Officers are:

Secretary

Site Address

Postal Address

Telephone

Email

Miss Robyn Mann

Adelaide Road BROKEN HILL NSW 2880

PO Box 279, Broken Hill NSW 2880

08 8088 4724

wdboard@bigpond .com

Office hours are from 7:00am- 3:00pm Monday to Friday

Operations Manager

Telephone

Email

Properties

Operations Manager Border Fence Maintenance Board Smithville BROKEN HILL NSW 2880

08 8091 3582

sm ithvilleoutpost 1 @big pond . com

The Border Fence Maintenance Board owns and maintains houses along the Queensland and South Australian Fence. Maintenance Employees, Leading Hands, Plant Operators and the Operations Manager reside in cottages located at the following locations;

Queensland Border Fence

Wompah Gate, Toona Gate and Hamilton Gate

South Australian Fence

White Catch , Smithville and Broughams Gate

Chair's Report

The Board held five meetings during 2017 and conducted its annual inspection of the fence in September. The full length of the fence was able to be inspected which included recently completed works and ongoing contracted works occurring at that time being the clay capping of sand hills. The Board was also able to inspect various sites identified for major works, upgrades and replacement. Particular focus was placed on a proposal for extensive replacement of quite aged fencing in the Waverly Gate section. It was ultimately resolved at the November meeting of the Board that 20 kilometres of fence would be replaced in this section during 2018.

Fence maintenance staff remained able to conduct their twice weekly inspections of the fence throughout the year. They were not impeded in any way by flood waters as was the case in the previous year. There were a number of staff resignations, in particular Plant Operators, and contractors were engaged to supplement resources to ensure the fence remained viable. Contracted grader and loader works along the full length of the South Australia fence reinstated and remediated roads, flood-ways and removed vegetation and sand from the fence.

The Board's ongoing program of clay capping sand hills continued during the year with a focus on three separate localities. Five sand hills in each of the locations of Toona, White Catch and Broughams Gate (15 in total) were re-shaped and capped with clay and gravel base material to stabilise them. All of these sand hills were significant in size and created ongoing challenges for staff in terms of maintenance and continued to be a problem with sand accretion and erosion. As the number of sand hills capped incrementally increase, there is a corresponding and evident decline in the resources required to monitor and maintain the fence.

Before and after images of sand hill c/aying works.

The three kilometre section of fence through the Paroo channels immediately west of Hungerford has been scheduled for replacement for several years but flood waters have prevented the Board from undertaking these works. These works were completed during the year. This section of the fence is subject to a range of pressures including inundation for extended periods, debris captured by floods waters pressing against the fence and feral animals such as pigs. The fencing works, which were completed by contractors, have provided the Board with renewed confidence in the integrity of this section of the fence to withstand the natural elements and remain dog proof.

New fencing and flood gates erected through the Paroo channels.

Approximately seven kilometres of foot netting was replaced during the year using 600mm wide plastic coated chain wire trenched 300mm into the ground. Long stretches such as this can easily be trenched in with the blade of a grader, however, short sections are replaced by hand. Replacement of short sections of foot netting by staff is ongoing due to the sadie nature of the soils in some locations coupled with the quality of netting used in previous years.

Staff manually trenching in foot netting.

The climatic conditions during the year remained substantially dry with no major rain events, flooding or dust storms. As the seasonal conditions deteriorated, kangaroos and emu's congregating in large numbers placed increasing pressure on the fence. There were also a number of feral pigs residing in the Hamilton Gate area and this section required daily monitoring and repairs until the situation was controlled.

The Biosecurity Act 2015 commenced on 1 July 2017 and had the consequential effect of renaming the Wild Dog Destruction· Act 1921 as the Border Fence Maintenance Act 1921. The Act further renamed the Wild Dog Destruction Board as the Border Fence Maintenance Board and removed any obligations and authority of the Board to destroy or control wild dogs. These changes have . the effect of eliminating any landholder or public misunderstanding of the primary focus and responsibilities of the Board, being the maintenance of the border fence.

The NSW Government, through the Han Paul Toole MP, Minister for Lands, and Forestry and Minister for Racing responded positively to a representation made by the Western Lands Advisory Council to increase the annual funding provided to the Board. The Board, on behalf of all Western Division pastoralists is extremely grateful for the support shown by the NSW Government for the increase in funding.

In early December, the Board farewelled its Operations Manager, Mr Laurence Doidge. Laurence has held this position for three years and he and his wife Mia resided at the Board's Smithville Depot.

Andrew Bell Chair Person

Motor Vehicles and Plant

Two Suzuki light 4wd Four Argo Amphibious Vehicles One lsuzu 4wd 4 Ton Tray Top Truck One lsuzu 4wd 6 Ton Tray Top Truck One BT50 D-Max 4WD Single Cab Tray top Seven Toyota Hi-lux single cabs 4wd Tray Tops One Toyota Hi-Lux extra cab 4wd Tray Top One Mazda Bravo 4wd Tray Top Two Nissan Patrol4wd Tray Top One Volvo FM12 Tl Truck with Axle Tag Trailer Two Suzuki Quad Bikes One Polaris ATV Two Caterpillar IT28 Loaders Two Caterpillar 12H Motor Graders One Caterpillar 938G Wheel Loader

Board Members inspect all Board plant and machinery during the annual fence inspection.

Wild Dog Rates

Only the land in the Western Division of NSW is subject to payment of dog rates and only where the aggregation of the holding exceeds 1000 hectares. The Board sets the annual dog rate having regard to the annual budgeted cost of maintaining the fence less any contribution from the State Government. For 2017, the NSW Government paid an amount of $200,000 to the Border Fence Maintenance Board . Landholder rates were subsequently set at 4.9 cents per hectare.

The Department of Industry - Lands continues to issue wild dog rate notices and receipts subsequent monies following collection on behalf of the Border Fence Maintenance Board. The Department also maintains records relating to the collection of wild dog rates and, where necessary, initiates action to recover arrears.

INDEPENDENT AUDITOR'S REPORT

Border Fence Maintenance Board

To Members of the New South Wales Parliament

Opinion

I have audited the accompanying financial statements of the Border Fence Maintenance Board (the Board) , which comprise the Statement of Comprehensive Income for the year ended 31 December 2017 the Statement of Financial Position as at 31 December 2017, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, notes comprising a Statement of Significant Accounting Policies and other explanatory information.

In my opinion, the financial statements:

give a true and fair view of the financial position of the Board as at 31 December 2017, and of its financial performance and its cash flows for the year then ended in accordance with Australian Accounting Standards

are in accordance with section 41 B of the Public Finance and Audit Act 1983 (PF&A Act) and the Public Finance and Audit Regulation 2015

My opinion should be read in conjunction with the rest of this report.

Basis for Opinion

I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the standards are described in the 'Auditor's Responsibilities for the Audit of the Financial Statements' section of my report.

I am independent of the Board in accordance with the requirements of the:

Australian Auditing Standards

Accounting Professional and Ethical Standards Board's APES 110 'Code of Ethics for Professional Accountants' (APES 11 0).

I have fulfilled my other ethical responsibilities in accordance with APES 110.

Parliament promotes independence by ensuring the Auditor-General and the Audit Office of New South Wales are not compromised in their roles by:

providing that only Parliament, and not the executive government, can remove an Auditor -General

mandating the Auditor-General as auditor of public sector agencies

precluding the Auditor-General from providing non-audit services.

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

Level 15, 1 Margaret Street, Sydney NSW 2000 I GPO Box 12, Sydney NSW 2001 I t 02 9275 7101 I f 02 9275 7179 I e [email protected] . .gov.au I audit.nsw.gov.au

The Board's Responsibilities for the Financial Statements

The members of the Board are responsible for the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and the PF&A Act, and for such internal control as the members of the Board determine is necessary to enable the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the members of the Board are responsible for assessing the Board's ability to continue as a going concern , disclosing as applicable, matters related to going concern and using the going concern basis of accounting except where the Board will be dissolved by an Act of Parliament or otherwise cease operations.

Auditor's Responsibilities for the Audit of the Financial Statements

My objectives are to:

obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error

issue an Independent Auditor's Report including my opinion.

Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in accordance with Australian Auditing Standards will always detect material misstatements. Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions users take based on the financial statements.

A description of my responsibilit ies for the audit of the financial statements is located at the Auditing and Assurance Standards Board website at: WVII'N.auasb.aov.au/auditors responsibil ities/ar4.pdf. The description forms part of my auditor's report.

My opinion does not provide assurance:

that the Board carried out its activities effectively, efficiently and economically

about the security and controls over the electronic publication of the audited financial statements on any website where they may be presented

about any other information which may have been hyperlinked to/from the finan cial statements.

David Nolan Director, Financial Audit Services

6 April2018 SYDNEY

BORDER FENCE MAINTENANCE BOARD ABN 14 286 958 340

FINANCIAL STATEMENTS FOR THE YEAR ENDED

31 DECEMBER 2017


CONTENTS

Statement pursuant to the requirements of the Public Finance and Audit Act 1983

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

Page No

2

3

4

5

6-27


STATEMENT PURSUANT TO THE REQUIREMENTS OF THE PUBLIC FINANCE AND AUDIT ACT 1983 SECTION 41 C[1 B) & (1 C)

In accordance with a resolution of the Border Fence Maintenance Board we state that:

[ 1) the financial statements consisting of the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and notes to the financial statements thereon exhibit a true and fair view of the financial position and transactions of the Border Fence Maintenance Board for the year ended 31 December 2017;

[2) the financial statements have been prepared in accordance with the provision of the Public Finance and Audit Act 1983, Public Finance and Audit Regulation 2015 and the Treasurer 's Directions; and

[3) as at the date of signing this statement we are not aware of any circumstances which would render any particulars included in the financial statements to be misleading or inaccurate .

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:

Board Member

Date~ April 2018

Signed: ... ¢:~ Board Member

Date:3 April2018


STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2017

Note 2017 $

Revenue 4 1,778,967

Personnel services expense provided by NSW Department of Industry 5 (665,755]

Depreciation and amortisation expense 6 (288,260]

Operating expenses 7 ( 1 ,070,616]

(Deficit)/surplus for the year (245,664]

Other comprehensive income

Items unlikely to be reclassified to profit or loss:

Gain on revaluation of property, plant and equipment 15

other comprehensive income for the year

TOTAL COMPREHENSIVE INCOME FOR THE YEAR (245,664]

The accompanying notes form part of these financial statements.

2

2016 $

1,778,373

(709,623]

(272,608]

(950,392]

(154,250]

2,221,863

2,221,863

2,067,613


STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017

Note 2017 2016 $ $

ASSETS

Current Assets Cash and cash equivalents 8 647,418 2,025,403 Trade and other receivables 9 127,075 137,066 Inventories 10 402,048 416,153 Investments 1,286,487 Other assets 11 34,477 35,894

Total Current Assets 2,497,505 2,614,516

Non-Current Assets Property, plant and equipment 12 9,875,359 9,977,762

Total Non-Current Assets 9,875,359 9,977,762

TOTAL ASSETS 12,372,864 12,592,278

LIABILITIES

Current Liabilities Trade and other payables 13 138,610 119,419 Provisions 14 90,692 85,188

Total Current Liabilities 229,302 204,607

Non-Current Liabilities Provisions 14 10,169 8,614

Total Non-Current Liabilities 10,169 8,614

TOTAL LIABILITIES 239,471 213,221

NET ASSETS 12,133,393 12,379,057

EQUITY Reserves 15 7,662,402 7,662,402 Retained earnings 4,470,991 4,716,655

TOTAL EQUITY 12,133,393 12,379,057


3


STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2017

Retained Earnings Reserves

Note $ $

Balance at 1 January 2017 4,716,655 7,662,402

(Deficit)/surplus for the year (245,664)

Other comprehensive income Revaluation of property, plant and equipment 15

Total other comprehens ive income for the year

Total $

12,379,057

(245,6 64)

Total comprehensive income for the year (245,664) (245,664)

Balance at 31 December 2017 4,4 70,991 7,662,402 12,133,393

Balance at 1 January 2016 4,870,905 5,440,539 10,311,444

(Deficit)/surplus for the year (154,250) (154,250)

Other comprehensive income Revaluation of property, plant and equ ipm ent 2,221 ,863 2,221,863

Total other comprehen sive income for t he year 2,221 ,863 2,221,863

Total comprehensive income for the year (154,250) 2,22 1,863 2,067,6 13

Balance at 31 December 2016 4,716,655 7, 662,402 12,379,057

The accom panying notes fo rm part of these fina nc ial statements.

4


STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2017

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers Grant- NSW Department of Industry Interest received Payments to suppliers and employees

Note

Net cash flows from I !used in) operating activities 20

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of plant and equipment Purchase of property, plant and equipment Purchase of financial assets

Net cash flows from I !used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash flows from financing activities

Net increase/[decreasel in cash and cash equivalents Opening cash and cash equivalents

CLOSING CASH AND CASH EQUIVALENTS 8

2017 $

1,638,270 200,000 36,172

(1,786,447]

87,995

6,364 (185,857]

[1,286,487]

[1,465,980]

(1,377,985] 2,025,403

647,418


5

2016 $

1,614,253 200,000 40,213

(2,016,272]

[161,806]

56,091 [100,614]

[44,523]

[206,329] 2,231,732

2,025,403


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.1 Statement of Compliance

The financial statements are general purpose financial statements which have been prepared in accordance with the Public Finance and Audit Act 7983, the Public Finance and Audit Regulation 2015, Treasurer's Directions and applicable Australian Accounting Standards which include Australian Accounting Interpretations.

Proper accounts and records for all the Board's operations have been maintained as required under Section 41(1] of the Public Finance and Audit Act, 1983.

The Board is a not-for-profit statutory body constituted under the Border Fence Maintenance Act 7927. The Border Fence Maintenance Board is a continuation of, and the same entity as, the Wild Dog Destruction Board that was constituted under this Act before its amendment by the Biosecurity Act 2075.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in the financial statements containing relevant and reliable information about transactions, events and conditions.

The financial statements were authorised for issue by the Board on 3 April2018.

1.2 Basis of Preparation

The financial statements have been prepared on the basis of accrual accounting and historical costs and except where stated, do not take into account changing money values, or current valuations of non current assets. Costs are based on the fair values given in exchange for assets.

Judgements, key assun1ptions and estimations management has made are disclosed in the relevant notes to the financial statements.

All amounts are rounded to the nearest dollar and are expressed in Australian dollars.

The following is a summary of the material accounting policies adopted in the presentation of the financial statements. The accounting policies have been consistently applied unless otherwise stated.

1.3 I nco me Tax

As a Public Authority constituted under a State Act to assist the Government in the administration and management of the "Dog Fence", the Board is exempt from taxation under section 50-25 of the Income Tax Assessment Act 7997.

1.4 Financiallnstruments

Non-derivative financial instruments

Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through surplus or deficit, any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are measured as described below.

A financial instrument is recognised if the Board becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Board's contractual rights to the cash flows from the financial assets expire or if the Board transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular purchases and sales of

6



(Continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

1.4 Financial Instruments !Continued)

financial assets are accounted for at trade dates, that is, the date that the Board commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Board's obligations specified in the contract expire or are discharged or cancelled.

Cash and cash equivalents comprise cash balances, at call deposits and short term deposits with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Board's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

Investments are term deposits with an original maturity greater than three months.

Accounting for finance income and expense is discussed in note 1.5.

Other

Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.

Impairment of Financial Assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value. Impairment losses are recognised in the surplus/[ deficit) for the year.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in the surplus/[deficitl for the year. Any cumulative loss in respect of an available-for-sale financial asset recognised previously in equity is transferred to surplus or deficit.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost and available-forsale financial assets that are debt securities, the reversal is recognised in the surplus/[deficitl for the year. For available-for-sale financial assets that are equity securities, the reversal is made through the reserve.

1.5 Finance income and expenses

Finance income comprises interest income on funds invested. Interest. income is recognised as it accrues in surplus or deficit, using the effective interest method.

Finance expenses comprise bank charges on bank accounts and interest expense where applicable.

7



(Continued]

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued]

1.6 Trade and Other Receivables

Trade receivables and other receivables are recorded at amounts due less any provision for doubtful debts.

An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified.

1.7 Inventories

Inventories are held for distribution and are measured at cost, adjusted for any loss of service potential.

Inventories acquired at no cost, or for nominal consideration are valued at the current replacement cost at the date of acquisition.

The cost of inventories is measured using the first in first out principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred to bring them to their existing location and conditions.

1.8 Property, Plant and Equipment

The dog fence has been included in the statement of financial position at $7,489,800 being the Aspect Property Consultant's valuation of 31 December 2016. The valuation was performed by Registered Valuers. The valuation was made on a written down replacement cost basis for this asset, which is considered non-specialised in nature.

The significant assumptions applied in estimating the written down replacement cost of the dog fence were:

• Utilised section of the dog fence is 584 kilometres in length; • Cost of new fencing has been estimated at $27,000 per kilometre, based on $15,000 for

materials and $12,000 for labour; • Estimated total life of 40 years, with an estimated remaining useful life of 19 years.

The Board's buildings and leasehold improvements were revalued on the basis of an independent valuation by Aspect Property Consultants on 31 December 2016. The valuation was based on a "written down replacement cost" basis for assets greater than $5,000.

The Board"s heavy equipment and motor vehicles are recorded at fair value.

For further details on the fair value measurement refer to Note 23.

Maintenance

Outgoings in respect of buildings will be treated as maintenance expenditure in the year in which they are incurred unless the outgoings are greater than $5,000, in which case they will be capitalised.

All expenditure in respect of the fence is to be treated as maintenance expenditure for the year in which it is incurred. The fence is not depreciated, as the loss in service potential is not normally in excess of that which maintenance can restore.

8



(Continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued)

1.8 Property, Plant and Equipment [Continued)

Depreciation

The Board made an assessment of useful life of its property, plant and equipment during the year. The Board accepted the useful life provided by the valuers in relation to buildings and leasehold improvements . The useful life of heavy machinery and motor vehicles remained consistent from the pnor year.

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

Class of Property, Plant and Equipment

Dog fence Buildings Heavy machinery Leasehold improvements Plant, equipment, motor vehicles

Depreciation Rate

0% 2.5% - 10% 7.5% to 10% 2.5%- 10% 10% to 20%

The Board's capitalisation policy is to capitalise assets greater than $5,000.

Impairment

The carrying amount of the Board's assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is est imated. · An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable. amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use.

Value in use in respect of not-for-profit entities is represented by the depreciated replacement cost when the future economic benefits of the asset are not primarily dependent on the asset's ability to generate net cash inflows [i.e. property, plant and equipment].

1.9 Trade and Other Payables

Trade payables and other accounts payable are recognised when the Board becomes obliged to make future payments resulting from the purchase of goods and services.

1.1 0 Provisions

Provision is made for the Board's liability for employee entitlements arising from personnel services rendered by employees to reporting date. Personnel services provision expected to be settled within one year have been measured at their nominal va lue. Other personnel services provision expected to be settled later than one year have been measured at the present va lue of the estimated future cash outflows to be made for those entitlements.

Contributions are made by the Board to employee superannuation funds and are charged as expenses when incurred.

1.11 Leases

Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern in which the economic benefits from the leased asset are consumed.

9



(Continued!


1.12 Revenue

Revenue is recognised by the Board when it is probable that the economic benefits associated with the transaction will flow to the Board. Revenue is measured at the fair value of consideration or contributions received or receivable.

1.13 Goods and Services Tax [GSTI

Revenue, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the assets or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the Australian Taxation Office are classified as operating cash flows.

Commitment and contingencies are disclosed inclusive of GST recoverable from, or payable to, the Australian Taxation Office.

1.14 Insurance

The Boa1-d holds insul-ance policies for fire, motor vehicles, workers' compensati.on, public risk, personal accident of Board members, and household in respect of all buildings.

1.15 Comparative Figures

Where required by accounting standards comparative figures have been adjusted to conform with changes in presentation for the current financial year.

1.16 Fair Value Measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the market participants at the measurement date; and assumes that the transaction will take place either: in the principle market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that the market participants would use when pricing the asset or liability, assuming they act in their best economic interest. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of inputs used in making the measurements. Classifications are reviewed each reporting date and transfers between levels are determined based on a reassessment of the lowest level input that is significant to the fair value measurement.

10



(Continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

1.16 Fair Value Measurement [Continued)

For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.

Fair value measurement hierarchy

The Board is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Board can access at measurement date; Level2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is significant to fair value and therefore which category the asset or liability is placed in can be subjective.

The fair value of assets and liabilities classified as Level 3 is determined by the use of valuation models. These include discounted cash flow analysis or the use of observable inputs that require significant adjustments based on unobservable inputs.

1.17 New Australian Accounting Standards and Interpretations Issued but Not Effective

The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods, some of which are relevant to the Board. The Board has decided not to early adopt any of the new and amended pronouncements. The Board's assessment of the new and amended pronouncements that are relevant to the Board but applicable in future reporting periods is set out below:

• AASB 9: Financial Instruments and associated Amending Standards (applicable for annual reporting periods commencing on or after 1 January 2018).

This Standard will be applied retrospectively and includes revised requirements for the classification and measurement of financial instruments and revised recognition and derecognition requirements for financial instruments.

The key changes made to the Standard that may affect the Board on initial application include certain simplifications to the classification of financial assets and the irrevocable election to recognise gains and losses on investments in equity instruments that are not held for trading in other comprehensive income.

The change in Standard is not expected to materially impact the Board's financial reporting .

., AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods commencing on or after 1 January 2019].

When effective, this Standard will replace the current accounting requirements applicable to revenue with a single principles-based model. Except for a limited number of exceptions, including leases, the new revenue model in AASB 15 will apply to all contracts with customers as well as non-monetary exchanges between entities in the same line of husinPss to facilitate sales to customers and potential customers.

11



(Continued]


1.17 New Australian Accounting Standards and Interpretations Issued but Not Effective [Continued]

The core principle of the Standard is that the Board will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Board expects to be entitled in exchange for the goods or services. To achieve this objective, AASB 15 provides the following five step process:

Identify the contract[s) with the customer; Identify the performance obligations in the contract; Determine the transaction price; Allocate the transaction price to the performance obligations in the contract(s); and Recognise revenue when (or as) the performance obligations are satisfied.

This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue.

Although the Board anticipates that the adoption of AASB 15 may have an impact on the Board's financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact.

• AASB 1058: Income for Not-for-Profit Entities [applicable for annual reporting periods from January 2019).

This Standard clarifies and simplifies the income recognition requirements that apply to not-forprofit entities in conjunction with AASB 15 Revenue from Contracts with Customers.

The Standard establishes the principles for not-for-profit entities that apply to:

a) Transactions where the consideration to acquire the asset is significantly less than fair value principally to enable a not-for-profit entity to further its objectives; and

b) The receipts of volunteer services.

The Standard is not expected to materially impact the Board's financial r-eporting.

• AASB 16- Leases (applicable for annual reporting periods from 1../anuary 2079/.

This Standard will impact all entities with lease arrangements. Lessee entities will be required to recognise assets and liabilities arising from all leases in the statement of financial position, with the exception of leases of 12 months or less and leases of small assets. Interest expense and amortisation charges will be recognised in the statement of comprehensive income.

The Board anticipates this Standard will have minimal impact on the Board, as there is currently one lease in place for the rent of the premises.

12



(Continued]

2. RATES

In the year a rate of 4.90 cents per hectare [4.70 cents per hectare in 2016] was levied on land holdings in excess of 1,000 hectares in the Western Division [other than land within a municipality, town or village]. The rates levied on landholders in 2017 amounting to $1,470,865 [2016- $1,412,108].

3. GRANT FROM DEPARTMENT OF TRADE AND INVESTMENT, REGIONAL INFRASTRUCTURE AND SERVICES

The NSW Department of Industry provided a $200,000 [2016 - $200,000] subsidy through Consolidated Fund to the Board for assistance with its infrastructure program. This funding is totally free of any expenditure constraints or directives.

4. REVENUE Operating activities Rates income

5.

6.

Grant- NSW Department of Industry Gain on disposal of non-current assets Assistance from NSW Department of Industry Fees from Office of Environment and Heritage Interest received Other rebates and refunds Rental income

PERSONNEL SERVICES EXPENSE

Provided by NSW Department of Indus tty Salaries and wages Superannuation Employee leave entitlements Payroll ta x Workers compensation Other employee costs

DEPRECIATION AND AMORTISATION EXPENSE

Build ings Leasehold improvements amortisation Heavy machinery Motor vehicles

13

2017 $

1,481,479 200,000

6,364 37,812

8,000 37,643

5,774 1,895

1,778,967

499,099 50,295 62,037 32,914 11,551 9,859

665,755

89,617 13,230 93,194 92,219

288,260

2016 $

1,455,259 200,000 33,346 37,101

8,000 40,087

2,590 1,990

1,778,373

540,182 54,430 57,877 35,332

8,477 13,325

709,623

82,827 14,173 93,580 82,028

272,608



(Continued)

7. OPERATING EXPENSES

7.1 Auditor's Remuneration

Amounts received or due and receivable by the auditors for: -Auditing the accounts

The auditors received no other remuneration .

7.2 Consultancy

Amounts received or due and receivable by consultants

7.3 Other

Board member cost Fence materials Fence contractor and equipment hire Freight Fuel Gas and electricity Insurance Repa irs and maintenance Telephone and off ice expenses Service fee to NSW Department of Industry Valuation fees Other

Total Other Expenses

8. CASH AND CASH EQUIVALENTS

Cash at bank Cash on hand Term deposits

There is no restriction on the use of cash and cash equivalents by the Board. (2016- Nil)

14

2017 $

34,370

34,695

42,608 138,268 425,693

365 77,186 28,243 27,921

127,991 36,949 37,8 12

58,515

1,001,551

1,070,616

647,218 200

647,418

2016 $

38,777

33,000

29,084 114,457 308,990

1,017 76,996 32,285 29,786

168,850 25,708 37,101 12,000 42,341

878,615

950,392

763,909 200

1,261,294

2,025,403



(Continued)

2017 $

9. TRADE AND OTHER RECEIVABLES

Current Rates receivable Less: Provision for doubtful debts

Other receivables GST receivable

Breakdown of receivable are:

0- 2 years in arrears More than 2 years in arrears

97,707

97,707

1,886 27,482

127,075

99,874 27,201

127,075

2016 $

88,675

88,675

2,215 46,176

137,066

114,517 22,549

137,066

The Board considers all debts to be recoverable due to legislation allowing debts to be collected on sale of property, there is no provision for doubtful debts required.

2017 2016 $ $

10. INVENTORIES

Fencing material- at cost 364,029 384,478 Fuel- at cost 38,019 31,675

402,048 416,153

11. OTHER ASSETS

Prepayments 34,477 35,894

15



(Continued)

12. PROPERTY, PLANT AND EQUIPMENT

Dog fence- at fair value

Net carrying amount

Leasehold improvements -at fair value Less: accumulated depreciation

Net carrying amount

Buildings -at fair value Less: accumulated depreciation

Net carrying amount

Heavy machinery -at fair value Less: accumulated dep1·eciation

Net carrying amount

Motor vehicles -at fair value Less: accumulated depreciation

Net carrying amount

Total property, plant and equipment

Buildings are constructed on crown land .

16

2017 $

7,489,800

7,489,800

368,540 [1 3,230)

355,3 10

1,539,500 [89,617)

1,449,883

1,047,130 [782,037)

265,093

721,280 [406,007)

315,273

9,875,359

2016 $

7,489,800

7,489,800

358,700

358,700

1,539,500

1,539,500

972,757 [688,843)

283,914

641,636 [335, 788)

305,848

9,977,762



(Continued)

12. PROPERTY, PLANT AND EQUIPMENT [Continued)

Movement in Carrying Amounts for the year ending 31 December 2017

Balance at 1 January 2017 Additions Disposals Depreciation expense

. Balance at 31 December 2017

Balance at 1 January 2017 Additions Disposals Depreciation expense

Balance at 31 December 2017

Dog Fence

7,489,800

7,489,800

Heavy Machinery

283,914 74,373

[93, 194)

265,093

Leasehold Improvements

358,700 9,840

[13,230)

355,310

Motor Vehicles

305,848 101,644

[92,219)

315,273

Movement in Carrying Amounts for the year ending 31 December 2016

Buildings

1,539,500

[89,617)

1,449,883

Total

9,977,762 185,857

[288,260)

9,875,359

Dog Leasehold Buildings Fence Improvements

Balance at 1 January 2016 5,621,000 373,245 1,268,892 Revaluation increment 1,868,800 [372) 353,435 Additions Disposals Depreciation expense [14,173) [82,827)

Balance at 31 December 2016 7,489,800 358,700 1,539,500

Heavy Motor Total Machinery Vehicles

Balance at 1 January 2016 400,239 287,262 7,950,638 Revaluation increment 2,221,863 Additions 100,614 100,614 Disposals [22,745) [22,745) Depreciation expense [93,580) [82 ,028) [272,608)

Balance at 31 December 2016 283,914 305,848 9,977,762

17



(Continued)

2017 $

13. TRADE AND OTHER PAY ABLES

Current Trade creditors and other accruals PAYG payable Superannuation payable

116,739 21,871

138,610

2016 $

106,739 8,537 4,143

119,419

The average credit period on purchase of certain goods is 30 days. No interest is charged on the trade payables for the first 60 days from the date of the invoice .

The Board has financial risk management polici es in place to ensure that all payables are paid within the credit time frame .

14. PROVISIONS

Current Personnel services provision to NSW Departmen t

of Industry

Non-current Personnel services provision to NSW Department

of Industry

Aggregate employee and personnel services provision Personnel services- current Annual Leave Personnel services- current LSL Personnel services- non-current LSL

15. RESERVES

Asset revaluation reserve at the beginning of the financial year

Revaluation gains

Asset revaluation reserve at the end of the financial year

2017 $

90,692

10,169

42,299 48,393 10,169

100,861

7,662,402

7,662,402

2016 $

85,188

8,6 14

42,962 42,226

8,614

93,802

5,440,539 2,221,863

7,662,402

The asset reva luation reserve relates to the dog fence, leasehold improvements and buildings .

18



(Continued)

16. CONTINGENT ASSETS AND LIABILITIES

There were no contingent assets or liabilities in existence as at 31 December 2017 [2016- $Nil).

17. LEASE AND EXPENDITURE COMMITMENTS

Operating lease commitments

There is an operating lease commitment in existence at 31 December 2017 of $4,470 for the rent of the administrative premises [2016- $2,350)

Expenditure commitments

The Board has no expenditure commitments as at 31 December 2017 [2016- $Nil)

18. SERVICES PROVIDED BY NSW DEPARTMENT OF INDUSTRY

Services provided for the Board in 2017 primarily associated with the issuing of rate notices, debtor records maintenance and outstanding rate collection has been estimated by NSW Department of Industry to total $37,812 [$37, 101 in 2016).

19. RELATED PARTYTRANSACTIONS

Key Management Personnel

Any person having authority and responsibility for planning, directing and co ntrolling the activities of the Board, directly or indirectly, including any director of the Board, is considered key management personnel.

The totals of remuneration paid to key management personnel of the Board during the year are as follows :

2017 2016 $ $

Short term benefits 85,868 82,688 Post employment benefits 7,076 6,952

92,944 89,640

Transactions with Related Parties

Transa ctions with related parties are on normal terms and conditions no more favourable than those available to other parties unless otherwise stated .

19

20.

21.



[Continued)

CASH FLOW INFORMATION

Reconciliation of cash flows from operating activities with deficit from operations

[Deficit]/surplus for year

Depreciation [Profit]/loss on disposal of assets lncrease/[decrease] in provisions Decrease/[increase] in receivables Decrease/[increase] in inventories Decrease/(increase] in other assets lncrease/(decrease] in payables

Net cash flows from operating activities

FINANCIAL INSTRUMENTS

Overview

2017 $

[245,664]

288,260 [6,364] 7,059 9,991

14,105 1,417

19,191

87,995

2016 $

(154,250]

272,608 (33,346]

6,197 [32,393)

(259,035) 34,297

4,116

(161 ,806]

The Board's financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payables.

The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows:

FINANCIAL ASSETS Cash and cash equivalents Trade and other receivables [1] Investments

Total Financial Assets

FINANCIAL LIABILITIES Trade and other payables (2]

Total Financial Liabilities

2017 $

647,418 99,593

1,286,487

2,033,498

116,739

116,739

2016 $

2,025,403 90,890

2,116,293

110,882

110,882

1. Excludes statutory receivables and prepayments [not within the scope of MSB 7]. 2. Excludes statutory payables and unearned revenue [not within the scope of AASB 7].

20



(Continued)

21. FINANCIAL INSTRUMENTS [Continued)

Financial Risk Management Policies

The Board's overall risk management strategy seeks to assist the organisation in meeting its financial targets, whilst minimising potential adverse effects on financial performance. Risk management policies are approved and reviewed by the Board on a regular basis. These include credit risk policies and future cash flow requirements.

Specific Financial Risk Exposures and Management

The Board has exposure to the following risks from its use of its financial instruments which are interest rate risk, credit risk and liquidity risk.

This note presents information about the Board's exposure to each of the above risk, their objectives policies and process for measuring and managing risk and the management of capital.

21.1 Credit risk

Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss for the Board.

The Board does not have any material credit risk exposure as the major source of revenue is the receipt of grants and statutory collectable rates. Credit risk is further mitigated as all of the grants being received from state and federal governments are in accordance with funding agreements which ensure regular funding for a period.

Credit Risk Exposures

The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period is equivalent to the carrying value and classification of those financial assets (net of any provisions] as presented in the statement of financial position.

Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed at Note 9.

The Board has no significant concentration of credit risk exposure to any single counterparty or group of counterparties. Details with respect to credit risk of Trade and Other Receivables are provided in Note 9.

Credit risk related to balances with banks and other financial institutions is managed by the Board in accordance with approved Board investment policy.

21



(Continued)

21. FINANCIAL INSTRUMENTS [Continued]

21.2 Liquidity risk

Liquidity risk arises from the possibility that the Board might encounter difficulty in settling its debts or otherwise meeting its obligations in relation to financial liabilities. The Board manages this risk through the following mechanisms:

" preparing forward looking cash flow analysis in relation to its operational, investing and financing activities;

• maintaining a reputable credit profile;

" managing credit risk related to financial assets; • only investing surplus cash with major financial institutions; and • comparing the maturity profile of financial liabilities with the realisation profile of

financial assets.

The tables below reflect an undiscounted contractual maturity analysis for financial liabilities.

Floating Fixed Non- Total Weighted Interest Interest Interest $ Average

Rate Less than Bearing Effective $ 1 Year $ Interest Rate

$ % 2017 Financial assets Cash and investments 647,218 1,286,487 200 1,933,905 1.72 Receivables [1) 99,593 99,593 N/A

647,218 1,286,487 99,793 2,033,498

Financial liabilities Payables [2) 116,739 116,739 N/A

116,739 116,739

2016 Financial assets Cash and investments 763,909 1,261,294 200 2,025,403 2.92 Receivables [1) 90,890 90,890 N/A

763,909 1,261,294 91,090 2,116,293

Financial liabilities Payables [2] 110,882 110,882 N/A

110,882 110,882

1. Excludes statutory receivables and prepayments [not within the scope of AASB 7l. 2. Excludes statutory payables and unearned revenue [not within the scope of AASB 7l.

Cash flows realised from financial assets reflect management's expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates.

22



[Continued]

21. FINANCIAL INSTRUMENTS [Continued]

21.3 Interest Rate Risk

Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instrume'nts. The Board is also exposed to earnings volatility on floating rate instruments. Interest rate risk is managed with a mixture of fixed and floating rate debt. At 31 December 2017, the Board had no debt. (2016- $Nil]

The Board's exposure to interest rate risk is the risk that the fair value of future cashflows of a financial instrument will fluctuate as a result of changes in market interest rates.

The Board has performed a sensitivity analysis relating to its exposure to interest rate risk at reporting date. This sensitivity analysis demonstrates the effect on the current year results from a change in the risk.

At reporting date, it interest rates had been 1% higher or lower, the Board's result for the year and the equity at reporting date would have increased or decreased by $19,795 (20 16 - $21 ,284).

21.4 Net fair values

The net fair values of financial assets and liabilities approximate the carrying value. No financial assets or financial liabilities are readily traded on organised markets. The aggregate net fair values and carrying amounts of financial assets or financial liabilities are disclosed in the statement of financial position and in the notes to the financial statements.

21.5 Terms, conditions and accounting policies

Trade and Other Payab!es Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Board. Creditors are normally settled within normal trading terms and no interest is incurred on these accounts.

22. EVENTS OCCURRING AFTER THE BALANCE DATE

There were no matters or circumstances have arisen since the end of the financial year, that have significantly affected, or may significantly affect, the operations of the Board, the results of those operations, or the state of affairs of the Board in future financial years.

23



(Continued)

23. FAIR VALUE MEASUREMENT

The Board measures and recognises the following assets and liabilities at fair value on a recurring basis after initial recognition:

• Property, plant and equipment.

The Board does not subsequently measure any Liabilities at fair value on a r ecu r ring basis, or any assets or liabilities at fair value on a non-recurring basis.

a) Fair Value Hierarchy

AASB 13: Fair Value Measurement requires the disclosure of fair value information by Level of the fair value hierarchy, which categorises fair value measurements · into one of three possible levels based on the lowest Level that an input that is significant to the measurement can be categorised into as follows:

Level1

Measurements based on quoted prices [unadjusted) in active markets for identical assets or Liabilitie s that the entity can access at the measurement date.

Level2

Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indir-ectly.

Level3

Measurements based on unobservable inputs for the asset or liability.

The fair values of assets and Li ab ilities that are not traded in an active market are determined by using one or more valuation techniques. These valuation techniques maximi se , t o the extent possible, the use of observable market data . If all significant inputs required to measure fair value are observable, the asset or Liability is included in Level 2. If one or more significant inputs are not based on observable market data, the asset or liability is included in Level3 .

Valuation techniques

The Board selects a valuation technique that is appropriate in the circumstance s and for which sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured. The valuation techniques selected by the Board are consistent with one or more of the following valuation approaches.

Market approach: valuation techniques that use prices and other relevant information generated by market transactions for identical or similar assets or liabilities .

Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present va lue.

Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.

24



(Continued)

23. FAIR VALUE MEASUREMENT (Continued)

Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the Board gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data (such as publicly available information on actual transactions] and reflect the assumptions that buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for which market data is not available and therefore are developed using the best information available about such assumptions are considered unobservable.

The following tables provide the fair values of the Board's assets and liabilities measured and recognised on a recurring basis after initial recognition and their categorisation within the fair value hierarchy.

2017

Recurring fair value measurements Non-financial assets

Dog fence

Leasehold improvements

Buildings

Heavy machinery

Motor vehicles

Total non-financial assets recognised at fair value

2016

Recurring fair value measurements

Non-financial assets

Dog fence

Leasehold improvements

Buildings

Heavy machinery

Motor vehicles

Total non-financial assets recognised at fair value

Level 1

Note $

12

12

12

12

12

Level 1

Note $

12

12

12

12

12

Level2

$

7,489,800

355,310

1,449,883

265,093

315,273

9,875,359

Level2

$

7,489,800

358,700

1,539,500

283,914

305,848

9,977,762

Level3

$

Level3

$

Total

$

7,489,800

355,310

1,449,883

265,093

315,273

9,875,359

Total

$

7,489,800

358,700

1,539,500

283,914

305,848

9,977,762

There were no transfers between levels for assets measured at fair value on a recurring basis during the reporting period (2016: no transfers].

25



(Continued)

23. FAIR VALUE MEASUREMENT (Continued)

b) Valuation Techniques and Inputs Used to Measure Level2 Fair Values

Description Fair value at Valuation Technique[s) 31 December

2017

$ Non-financial assets

Dog fence 7,489,800 Cost approach- Valuation by Aspect Property Consultants

Leasehold 355,310 Cost approach- Valuation by improvements Aspect Property Consultants

Buildings 1,449,883 Cost approach- Valuation by Aspect Property Consultants

Heavy machinery 265,093 Market approach using recent observable market data for similar machinery; income approach using discounted cash flow methodology

Motor vehicles 315,273 Market approach using recent observable market data for similar vehicles; income approach using discounted cash flow methodology

9,875,359

Dog Fence

Inputs Used

Price of labour and fencing products, condition assessment

Construction costs, condition assessment

Construction costs, condition assessment

Price per machine; market borrowing rate

Price per vehicle; market borrowing rate

The Dog Fence was valued by Aspect Property Consultants in December 2016. Aspect Property Consultants is a professional independent valuation organisation which has no direct or indirect relationship with the Board, other than to undertake the valuation. The valuation was based on the written down replacement cost method.

Leasehold Improvements

The Leasehold Improvements were valued by Aspect Property Consultants in December 2016. Aspect Property Consultants is a professional independent valuation organisation which has no direct or indirect relationship with the Board, other than to undertake the valuation. The valuation was based on the written down replacement cost method.

Buildings

The Buildings were valued by Aspect Property Consultants in December 2016. Aspect Property Consultants is a professional independent valuation organisation which has no direct or indirect relationship with the Board, other than to undertake the valuation. The valuation was based on the written down replacement cost method.

26



!Continued)

23. FAIR VALUE MEASUREMENT !Continued)

Heavy Machinery and Motor Vehicles

The fair value of heavy machinery and motor vehicles is determined at least every five years based on valuations by an independent va luer. At the end of each intervening period, the directors review the independent valuation and, whe n appropriate, update the fair value measurement to reflect current market conditions using a range of valuation techniques, including recent observable market data and discounted cash flow methodologies.

There were no changes during the period in the valuation techniques used by the Board to determine Level 2 fair values .

End of audited financial statements

27

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