2006–07 Financial Report

Annual Financial Report 2006–2007

Protecting land, water and wildlife

Annual Financial Report 2006–20072006–2007 © 20072007 Bush Heritage Australia | 1 Vision: By 2025 Bush Heritage Australia will protect one per cent of Australia (more than 7 million hectares) and in so doing, conserve signiﬁcant areas of land and water that are of the greatest importance for protecting the nation’s biodiversity.

Board of Directors 4

Chief Executive Ofﬁcer 5

Patron 5

Ambassador 5

President’s report 6

Achievements for 2006–2007 7

Directors’ report 8

Concise ﬁnancial report 13

Independent audit report 19

Bush Heritage Australia is a national, independent, non-proﬁt organisation. It is committed to protecting Australia’s animals and plants and their habitats. It acquires – by purchase, gift or bequest – land and water that is of outstanding importance for protecting Australia’s biodiversity and ecological systems. Bush Heritage also builds partnerships with other organisations and individuals to support conservation management of land that is in private ownership. Funds are raised by tax-deductible donations from the public and funding organisations.

Front cover: Fields of wildﬂowers after rain, Ethabuka Reserve, Qld. PHOTO: WAYNE LAWLER/ECOPIX Pictured clockwise from far left: Towering trunks, Liffey River Reserve, Tas. Unfurling fern frond, Liffey River Reserve, Tas. Dome Rock, Boolcoomatta Reserve, SA. Water droplet in fern frond, Liffey River Reserve, Tas. Echidna, Liffey River Reserve, Tas. PHOTO: WAYNE LAWLER/ECOPIX

President: Phillip Toyne LLB, DipEd Director, EcoFutures Ltd Phillip is one of Australia’s leading environmentalists. He was the Executive Director of the Australian Conservation Foundation where he helped to establish the National Landcare Program. Phillip was a visiting Fellow at the Australian National University before becoming Deputy Secretary in the Commonwealth Department of Environment. Earlier he worked as a lawyer for Aboriginal groups in central Australia. EcoFutures is a company working on sustainability initiatives with business and governments. Phillip is also a director of ITC Limited, CVC Sustainable Investments Ltd, Agri Energy Limited, the Australasian Carbon Exchange Pty Ltd and the Rein Foundation. Phillip has been President of Bush Heritage since 2000. Vice-President: Dr Steve Morton BSc(Hons), PhD Group Executive, CSIRO Sustainable Energy and Environment Steve is one of Australia’s most respected ecologists. He has 23 years’ experience with CSIRO as a research scientist in tropical northern Australia, arid central Australia and the southern temperate zone, and has worked to integrate biodiversity conservation and land use for grazing and agriculture. Steve joined the Bush Heritage Board in 2003.

Treasurer: Mara Bún BA CEO, Green Cross Australia Mara is the founding CEO of the new Australian office of Mikhail Gorbachev’s international environmental and humanitarian organisation Green Cross, which operates in over twenty countries. Since she moved to Australia in 1990 Mara has been Director of Business Development with CSIRO, Manager of Policy and Public Affairs with the Australian Consumers’ Association (Choice magazine), Finance Director of Greenpeace, and Senior Research Analyst with Macquarie Bank. After graduating in economics she spent five years with Morgan Stanley and Co. as a financial analyst, then worked in a World Bank earthquake reconstruction project in Nepal before moving to Sydney. She currently serves on several other boards. Mara joined the Bush Heritage Board in 1998.

Guy Fitzhardinge BAgEcon, MAppSci Managing Director, Thring Pastoral Company Guy is currently a member of the Commonwealth Threatened Species Scientiﬁc Committee and Chairman of Monjebup Reserve. PHOTO: JIRI LOCHMAN/LOCHMAN TRANSPARENCIES the CRC for Beef Genetic Technologies. He has previously been a director

4 | Annual Financial Report 2006–2007 © 2007 Bush Heritage Australia of Meat & Livestock Australia and the Meat Research Corporation, Vice-President of the Australian Rangelands Society, an advisor to CSIRO Wool and Textiles Division, the wool industry and WWF, and a ministerial appointee to the NSW Biodiversity Advisory Committee. He currently manages three properties and a large cattle herd in central NSW. Guy joined the Bush Heritage Board in 2003.

Hutch Ranck BSEcon Managing Director of DuPont Australia/New Zealand Hutch is also Group Managing Director of Dupont ASEAN. He represents the Business Council of Australia on the Prime Minister’s Science, Engineering and Innovation Council and is a member of the Business Roundtable on Sustainable Development. Hutch joined the Bush Heritage Board in 2006. David Rickards BSc, BEng, MBA Chief Executive Ofﬁcer Executive Director and Global Head of Research at Macquarie Bank Doug Humann BA(Hons)Geog, DipEd David heads up the extensive and Before coming to Bush Heritage, Doug highly rated equities research group at spent eight years as Director of the Macquarie Bank, coordinating a team Victorian National Parks Association, based throughout Australia, Asia, New Victoria’s largest member-based nature Zealand and the United Kingdom. Before conservation organisation. He is a joining Macquarie, David was responsible for establishing member of the World Commission a risk management company BARRA International in on Protected Areas and has advised Australia and worked as a consulting structural engineer with several governments on private protected areas. He won Maunsell. David is an authority on the equities market, with the Wild Environmentalist of the Year award in 1997 and particular expertise in strategic analysis. David joined the was a ﬁnalist in the CEO of the Year awards in 2005. Bush Heritage Board in 2006. Doug was appointed CEO of Bush Heritage in 1997.

Keith Tufﬂey BEc, LLM Managing Director, Goldman Sachs Patron Keith is a Managing Director with Bob Brown Founder, and Australian Greens Senator Goldman Sachs, now based in London. for Tasmania. He joined Goldman Sachs in 2002 and for four years was the head of the Investment Banking Division and a Ambassador member of the Board in Australia, until Tim Fischer AC Chairman, Tourism Australia his relocation to London. Keith has over 15 years’ investment banking experience advising and ﬁnancing corporations across a wide range of industries. He is also a Director of the Great Barrier Reef Foundation and a Governor of WWF- Australia. Keith joined the Bush Heritage Board in 2006.

Alexis Wright Author Alexis is a member of the Waanyi people of the southern highlands in the Gulf of Carpentaria. Alexis has worked extensively as a professional manager, educator, Indigenous researcher and administrator in government and Aboriginal agencies across four states and territories. She is an award-winning author of ﬁction, non-ﬁction, reports and short stories and has recently From top: Fat-tailed dunnart, found at Eurardy Reserve, WA. received the Miles Franklin Literary Award for her book Sugar glider, Scottsdale Reserve, NSW. PHOTOS: JIRI LOCHMAN/ Carpentaria. Alexis joined the Bush Heritage Board in 2006. LOCHMAN TRANSPARENCIES

Annual Financial Report 2006–2007 © 2007 Bush Heritage Australia | 5 President’s Report our management actions on the ground have improved the health of vegetation communities and populations of animals For the first time, this year we present our concise financial and plants on the reserves. report and a separate Annual Conservation Report This year both Vice-President Louise Gilfedder and Treasurer 2006–2007. As our vision and activities grow, the stories Mara Bún retired after each serving the Board ably for three of our conservation work become richer, more complex and full terms. Mara was Treasurer from 2002 until her retirement more numerous. They warrant greater exposure through in September this year, and Louise Gilfedder served as our annual reporting process and therefore our supporters Vice-President from 2001 until she finished her third will have the choice of either or both reports. Annual term in February. We thank them for their vision, insightful Conservation Report 2006–2007 captures our scientific contributions and the vigorous debate which helped fuel the achievements and the ecological and human stories from strong growth that Bush Heritage experienced over that time. both our reserves and our work with our partners. After the notable success of her book Carpentaria, which This concise financial report provides an overview of our won, amongst other awards, the 2007 Miles Franklin activities and financial position as at 30 June 2007 and Literary Award, Alexis Wright has resigned from the Board fulfills the statutory requirements for financial reporting. to concentrate on her writing. However, she is keen to Bush Heritage aims to provide a detailed disclosure of its maintain an on-going role in building Bush Heritage’s financial position, and thus there is also a full Financial relationships with Indigenous people. We thank her for Report 2006–2007 available upon request. We have again her invaluable contribution. completed the year with a healthy surplus. Bush Heritage has again been supported by many We have had a very successful year with five reserves being Australians, whether through their donations or their added to Bush Heritage’s portfolio: two in Western Australia, contributions as volunteers, expert advisors, pro bono two in New South Wales and one in Victoria. Perhaps the contributors, partners, grant makers or members. We thank greatest innovation has been in our Beyond the Boundaries all these people, for without their involvement we would not program where we are building partnerships with Indigenous have achieved what we have. people, members of the pastoral sector, other conservation organisations and government agencies to take conservation We look forward to another exciting, productive year working activities beyond our own boundaries and into the community. for the protection of Australia’s outstanding landscapes and The new Kosciuszko to Coast landscape recovery initiative in unique biodiversity. New South Wales is a good example. Great progress has also been made in understanding the ecology of our reserves. The implementation of our Ecological Outcomes Monitoring program on many of the reserves has begun a new era of ecological discovery, analysis and reporting. The results of the monitoring work at Carnarvon Station Reserve in central Queensland, which document the return of mammals, birds, reptiles and invertebrates to the bluegrass grasslands, show the value Phillip Toyne of this work. We will soon be able to tell our supporters how President

Spider hangs suspended in its web, Liffey River Reserve, Tas. PHOTO: WAYNE LAWLER/ECOPIX

6 | Annual Financial Report 2006–2007 © 2007 Bush Heritage Australia Bush Heritage reserves are Achievements for 2006–2007 now protecting: Land acquisition ■ 676 982 hectares of Australia’s conservation lands in ■ Peniup Creek Reserve, WA This 2409 ha reserve 28 reserves in six states. (Yourka Reserve in far-north in Western Australia was purchased jointly with Queensland, purchased in September 2007, is not Greening Australia (WA) in April 2006. It is a key included in these figures) acquisition for Gondwana Link, the collaborative ■ over 232 vegetation communities. (This information project that is reconstructing a continuous corridor of is derived from analysis of the National Vegetation protected habitats between the Stirling Range and Information System [NVIS] IV classes across all the Fitzgerald River national parks. This acquisition was reserves where NVIS coverage is available. Where made possible by gifts from The Thomas Foundation it is not, the information has been supplemented by and a number of individuals. Queensland Eco-region Data (Fan Palm Reserve, Qld) ■ Nardoo Hills Reserve 3, Vic This 216 ha reserve and specific surveys (Coalmine Creek, Drys Bluff and in north-central Victoria was purchased in June 2006. Liffey River reserves, Tas) It is the third contiguous property to be acquired in the ■ examples of at least 76 vegetation communities listed in Nardoo Hills and was purchased with support from state and/or federal acts, agreements or publications as the R E Ross Trust and Perpetual Foundation. critically endangered, endangered, vulnerable, of concern, ■ Scottsdale Reserve, NSW The purchase in November poorly reserved or unreserved 2006 of this 1328 ha property south of Canberra was ■ over 2700 plant species. (This information has been made possible by the Vincent Fairfax Family Foundation, compiled from flora surveys, with new information added the Australian Government’s National Reserve System in August 2007. Many more plant species that have not programme and gifts in celebration of the lives of yet been identified will occur on the reserves) Dr Peter Barrer and Helen Lilian Manning Rickards. ■ at least 250 plant species that are listed in state and ■ ‘Nameless’ Sylvan Reserve, NSW This 67 ha property federal acts, agreements or publications as critically was gifted to Bush Heritage in March 2007. It lies in endangered, endangered, vulnerable or of concern the Shoalhaven River catchment and contains one of ■ at least 530 species of birds or other vertebrate animals. the few remnants of endangered Illawarra subtropical (This information has been compiled from fauna surveys, rainforest. It also protects species from warm temperate and was last updated in August 2007) rainforests and has the vibrant Irwins Creek flowing ■ at least 194 species of birds or other vertebrate animals through it. that are listed in state and/or federal acts, agreements ■ Monjebup Reserve, WA The boundary realignment or publications as critically endangered, endangered, of this property was completed and the sale finalised. vulnerable or near threatened. The Monjebup Reserve is one of the last remaining Additional lands are under Bush Heritage management at untouched areas of bush in the Gondwana Link corridor Ethabuka and Cravens Peak reserves where responsibility in south-west Western Australia. extends beyond title boundaries to the nearest fence lines, The continuing search for and investigation of new properties and at Charles Darwin Reserve where adjacent lands goes on across Australia. Another property in Queensland is are under a management agreement with neighbours. under negotiation. continued overleaf

From left: Curry ﬂower Lysinema ciliatum, Yarrabee Wesfarmers Reserve. PHOTO: JIRI LOCHMAN/LOCHMAN TRANSPARENCIES Moth sports geometric patterns, Liffey River Reserve, Tas. PHOTO: WAYNE LAWLER/ECOPIX

Annual Financial Report 2006–2007 © 2007 Bush Heritage Australia | 7 Management and monitoring Director’s Report ■ Monitoring of landscape health and bird and animal Your directors present their report on Australian Bush populations is now a major focus for Bush Heritage Heritage Fund (trading as Bush Heritage Australia) for the ecologists and reserve managers on most reserves. year ended 30 June 2007. Results of this work for the last financial year will be published in Annual Conservation Report 2006–2007 Directors (available December 2007) and in the Ecological The names of directors in office during the year are shown Outcomes Monitoring report, Restoring land and water: below. Directors have been in office for the entire period South-west Western Australia. unless otherwise stated. ■ Management is underway at all Bush Heritage reserves. ■ Phillip Toyne (President), Director, EcoFutures Pty Ltd Actions undertaken on the ground included pest plant ■ Dr Steve Morton (Vice-President), Group Chair of and animal control and monitoring, erosion control, seed Environment & Natural Resources, CSIRO collection and revegetation work, fire management and ■ Mara Bún (Treasurer), CEO, Green Cross Australia fuel-reduction burning. Bush Heritage has continued to ■ monitor the effectiveness of these management actions Guy Fitzhardinge, Managing Director, using flora and fauna surveys, mapping and ongoing Thring Pastoral Company data collection. ■ Louise Gilfedder, Senior Conservation Scientist, DPIWE, ■ Repairs and improvements to infrastructure, including to Tasmania (retired 26 Feb 2007) buildings, fences, vehicle and walking tracks, and signage, ■ Janice Carpenter, Principal, Ethical Investment Services have been undertaken at most reserves. (retired 11 Nov 2006) ■ Libby Smith, Principal, Motive Market Research Fundraising Pty Ltd (retired 12 Sept 2006) ■ Nearly $11 million ($10.949M) was raised in donations ■ Brian Whelan, Proprietor, Advanced National Services and bequests, up 27.2 per cent on the previous year. (retired 11 Nov 2006) ■ Over $1.2 million ($1.262M) was contributed in grants ■ Alexis Wright, Author (appointed 12 Sept 2006) from governments, trusts and foundations. ■ Hutch Ranck, Managing Director, DuPont Australia/ ■ The number of supporters increased by 12.5 per cent New Zealand (appointed 11 Nov 2006) on the previous year. Over 17 600 people have now ■ David Rickards, Executive Director and Global Head financially supported Bush Heritage. of Research, Macquarie Bank (appointed 11 Nov 2006) ■ The number of ‘Friends of the Bush’, who gave by ■ Keith Tuffley, Managing Director, Goldman Sachs automatic deduction, grew by 6.3 per cent net on the International, London (appointed 11 Nov 2006). previous year. The income they provided increased by The composition of the Bush Heritage Board changed 16 per cent. significantly during the year, in line with the organisation’s ■ The number of supporters who have confirmed gifts in strategic plan and growth ambitions. their wills increased by 29 per cent on the previous year. A number of long-term directors retired at the Annual Community involvement General Meeting in November 2006, after making significant contributions to the organisation’s success. New directors ■ Three hundred and thirty-nine people volunteered through were appointed to augment the skills and experience the Conservation Partnerships Program at Bush Heritage required of the Board in its role of directing the organisation’s reserves and at our Conservation Support Centre in strong growth. Melbourne. They contributed more than $684 285 towards reserve management and administration costs. Nature of operations and principal activities ■ The Conservation Partnerships Program includes the The principal activities of Bush Heritage involve raising funds Volunteer Ranger and Working Bee programs. These to support conservation actions on existing reserves, to were established to assist reserve managers with general purchase additional land of high conservation value, and to reserve management activities. A total of 86 people work with neighbours and other landowners and assist them participated as volunteer rangers, with most staying in the conservation management of their lands. There have between two and four weeks on the reserves. Between been no significant changes in the nature of these activities July 2006 and June 2007, 79 people joined working during the year. bees for periods ranging from two days to three weeks. The Conservation Partnerships Program has operated on Safety report eleven reserves. The safety of our staff, contractors and volunteers is an area ■ Thirteen guided field trips provided supporters and local of specific focus for Bush Heritage management. During the communities with the opportunity to explore eight of the year we again experienced no major safety incidents, due Bush Heritage reserves. Staff explained the conservation largely to the sound safety skills of our on-ground staff. Work significance of the reserves and the management work continues on enhancing our safety practices and expanding required to protect them. safety awareness in all areas of our operations.

8 | Annual Financial Report 2006–2007 © 2007 Bush Heritage Australia Review and results of operations The year saw significant growth in our programs aimed at increasing the involvement of Indigenous people on our The 2006/07 financial year was one of substantial growth reserves, and also those programs that help Indigenous in line with our strategic plan. Our donation income was communities to acquire and manage land for conservation. similar to that of the previous year, which was by far the We are also making good progress in establishing most successful in the organisation’s history. A significant relationships with owners of large tracts of land, whereby difference in the results from the two years is that the we can assist in the management of their land to protect its donation income received in the current year came primarily biodiversity and other conservation values. from our donors, reflecting the successful development of our major gifts fundraising campaign and continued growth in the Another key focus of our activities was on building our number of regular donors. capacity and systems to support the growth specified in our strategic plan. This included a major review of and The significant volume of donations received during 2006/07 enhancements to our people-management practices, building allowed us to continue acquiring land of high conservation our fundraising capacity and further developing our risk value. During the year we added five new properties to management and governance processes. our portfolio: Overall, 76 per cent of expenditure was directed towards ■ Scottsdale in New South Wales and a third block at land acquisition and conservation management, as shown our Nardoo Hills reserves in Victoria. Both these new in Figure 2. properties are located in our South East Grassy Box Woodlands anchor region �� ■ Monjebup and Peniup Creek reserves in Western �� Australia’s South West Botanical Province anchor region. �� They contribute to our Gondwana Link program which aims to reconnect native habitats between two large �� national parks, in an area recognised as one of the ��

world’s biodiversity hotspots �� ■ ‘Nameless’ Sylvan Reserve in New South Wales was gifted to Bush Heritage. It protects an area of Illawarra Figure 2 Distribution of expenditure 2006–07 sub-tropical rainforest. Total expenditure for the year 2006/07 was $9 905 154 These acquisitions put our total land-holdings at over Our fundraising strategy consists of four major programs 676 000 hectares (1.67 million acres). (See Figure 1.) (see Figure 3 overleaf) through which we raise funds for the acquisition of land of high conservation value and our �� on-going conservation operations. The components of this �� model are: �� 1. our regular donors, who either give by automatic bank or �� credit card deductions through our Friends of the Bush �� program, or in response to quarterly newsletters and

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�� periodic appeals. This source of funding provides the �� critical foundation on which all of our operations rest. � �� 2. our Major Gifts program, which includes large gifts �� received from individuals and private philanthropic trusts, both national and international. Some of these gifts have �� been matched by a foundation via a grant established to Figure 1 Trend in land holdings support conservation of Australia’s biodiversity, further increasing their value. This Major Gifts program will be a In addition to these acquisitions, our main conservation continued point of focus over the coming years. activities were focused on developing ecological 3. our Bequest program, through which our supporters management plans for all recent land acquisitions, developing nominate Bush Heritage as a beneﬁciary in their wills. data systems to help identify land for potential acquisition in The number of bequestors continued to grow strongly our anchor regions, and implementing a monitoring program during the year. Income received from estates is highly to assess the ecological outcomes being achieved as a result variable over time and in annual value. A relatively small of our land management activities. Establishing the reserves amount was received during 2006/07, however several that have been recently acquired was largely completed, with large estates were in the ﬁnal stages of been settled as each property’s infrastructure being adapted to support our the year ended. conservation activities. 4. government grants, that are primarily aimed at land As well as directly purchasing land, Bush Heritage aims to acquisition and supplement the funds donated by assist in the conservation management of land owned by our supporters. Grant income is highly variable, and others by entering into partnerships with property owners. dependant on the availability of funds within the

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�� Figure 4 Endowment funds

As a not-for-proﬁt entity, Bush Heritage aims to achieve a �� small operating surplus each year while ensuring that all received funds are invested in conservation outcomes. This involves balancing the allocation of funds between current- year conservation actions, new land purchases, and long-term �� investments to support future operations. The net result of the year’s activities was a ‘cash’ operating surplus, after all operating and capital expenditure, of $1.7m, �� on an income base of $13.1m. The accompanying Financial Statements provide a detailed breakdown of these results.

�� Risk management �� Bush Heritage takes a proactive approach to risk management. The Board is responsible for ensuring that �� risks, and also opportunities, are identified on a timely basis Figure 3 Donation income and that Bush Heritage’s objectives and activities are aligned with the identified risks and opportunities. In accordance with government programs and our acquisition activity. While Bush Heritage policy, an inventory of risks is reviewed and 2006/07 achieved a relatively low volume of grants, updated at each Board Meeting. several large grants were approved in June for planned land acquisitions. Significant changes in state of affairs Our strategic plan sets out our aims to continue growing The continued growth in donation funding has resulted in a the amount of land we acquire and manage for the long significant increase in our level of activity. Larger fundraising term as well as that to be managed through partnership campaigns and larger areas of land under management agreements. Consequently the expenses incurred in have required additional staffing support and upgrading of managing these lands will continue to grow. The costs vary internal systems. During the year our activities have focused for each reserve, depending on the reserve’s size and the on consolidating these changes and upgrading internal conservation actions required to repair any environmental infrastructure to position Bush Heritage for the next phase damage. Such actions include the removal of feral plants and of growth. animals, protection of soils, or restoration of water regimes. As part of our strategic planning, the directors However, the general pattern is that the highest expenses are re-evaluated their roles and the Board’s composition incurred in the first few years of ownership, with a reduction and took steps to recruit additional directors with skills in subsequent years as the local ecosystems move towards and experience to complement the Board’s existing being self-sustaining. capabilities. Further appointments are being considered The fundraising target for each new property includes, in to ensure the organisation’s growth is well governed. addition to the acquisition costs, funds sufficient to operate Additional appointments were also made to the management the reserve for at least three years. These funds are invested team to oversee management of the organisation’s in an ethical investment portfolio managed by the Board’s on-ground operations. Finance & Audit Committee. In the event of financial difficulties, these funds will allow the continued operation of Significant events after the balance date all existing reserves while the situation is rectified. On 19th September 2007 we reached settlement on Yourka As shown in Figure 4, we made further investments during Station in northern Queensland, supported by a large gift the year to provide endowment funds for recently acquired from a long-term supporter, donations from our support base, reserves. The strong share market conditions during the year and a government grant under the Australian Government’s resulted in a significant increase in investment income. Maintaining Australia’s Biodiversity Hotspots Programme.

10 | Annual Financial Report 2006–2007 © 2007 Bush Heritage Australia In October, Alexis Wright resigned as a director. In the near future, a further large land acquisition is being Recent share market volatility has had no significant adverse planned for the first half of 2007/08, with several other impact on our investment portfolio. potential acquisitions in the planning stages. Our budget for 2007/08 forecasts a small operating surplus on an income Likely developments and expected results base greater than that of 2006/07. During the 2006/07 year, Bush Heritage’s strategic plan Environmental regulation and performance was significantly revised, in order to build on the successes Bush Heritage’s operations are subject to significant achieved over the past few years. We have set ambitious environmental regulation under the law of the Commonwealth growth targets, setting a goal for the year 2025 to protect and states. Given the mission of Bush Heritage, abiding by one per cent of Australia (7 million hectares), with more and indeed helping to strengthen these laws is considered a specific goals through to 2011. Our ‘Anchors in the high priority. Landscape’ strategy and supporting systems are being used to identify areas of high conservation value for potential Directors’ interests and benefits acquisition and to establish partnerships with existing All members of the Board of Directors serve in an honorary landowners in order to protect the land’s biodiversity. We aim capacity. They are appointed through the Constitution by to continue strengthening our relationships with Indigenous members of the Australian Bush Heritage Fund and are communities, and in August 2007 we appointed our first themselves members. Bush Heritage is a company limited by Indigenous trainee who will help with the management of guarantee and no director holds any interest, but each as a Carnarvon Station Reserve. We are collaborating with other member is liable to the extent of their undertaking under conservation groups in two long-term landscape-scale the Constitution. conservation projects, Gondwana Link in south-west Western Indemnification and insurance of directors Australia and Kosciuszko to Coast in southern New South and officers Wales. Both projects aim to reconnect large areas of habitat Bush Heritage’s constitution provides that every director, of high conservation value by acquiring and rehabilitating land auditor, secretary and other officer shall be indemnified out or by creating partnerships with landowners and supporting of the assets of the company against any liability incurred by conservation management of their land. them in defending any proceedings, whether civil or Funding this planned growth is quite a challenge, however criminal in which judgement is given in their favour, or our recent track record shows that we have developed the in which they are acquitted, or in connection with any capacity to successfully conduct major fundraising programs. application under the Corporations Act in which relief is We aim to continue building this capacity and accordingly granted to them by the Court in respect of any negligence, will continue to invest in fundraising skills and systems. We default, breach of duty or breach of trust. Bush Heritage will also continue investing in the management skills and provides liability insurance for directors, but disclosure of governance structures required to manage this growth and the nature of the liability and the amount of the premium is guide our strategies. prohibited by the insurance contract.

Everlastings emerge through the sand, Ethabuka Reserve, Qld. PHOTO: WAYNE LAWLER/ECOPIX

Directors’ Conservation Finance & Audit Nominations Fundraising Communications Meetings Committee Committee Committee Committee Committee Number of meetings held: 7 3 6 2 2 3 Number of meetings attended: Phillip Toyne 7 / 7 — — 2 / 2 — 2 / 3 Steve Morton 7 / 7 3 / 3 — — — — Mara Bún 6 / 7 — 6 / 6 2 / 2 2 / 2 — Guy Fitzhardinge 6 / 7 3 / 3 — 2 / 2 — 3 / 3 Louise Gilfedder 4 / 6 2 / 3 — — — — Janice Carpenter 2 / 2 — 3 / 3 — — — Libby Smith 0 / 1 — — — — — Brian Whelan 2 / 2 — — — — 3 / 3 Alexis Wright 5 / 6 2 / 3 — — — — Keith Tufﬂey 5 / 5 — — — 2 / 2 — Hutch Ranck 5 / 5 — 1 / 1 — — — David Rickards 5 / 5 — 4 / 4 — 2 / 2 — Doug Humann (Company Secretary) 5 / 5 3 / 3 5 / 5 — — —

The Conservation Committee advises the Board on conservation issues and the relative priority of potential land acquisitions. The Finance & Audit Committee advises the Board on budget and ﬁnancial management matters. The Nominations Committee reviews the Board composition and oversees recruitment of new directors. The Fundraising Committee monitors the fundraising strategy and opportunities. The Communications Committee monitors the execution of the communication strategy. Signed in accordance with the resolution of the Board of Directors:

Phillip Toyne, President. 28 September, 2007

12 | Annual Financial Report 2006–2007 © 2007 Bush Heritage Australia Australian Bush Heritage Fund Income statement Concise financial report for the year for the year ended 30 June 2007 ended 30 June 2007 2007 2006 Notes $’000 $’000 The concise financial report is an extract from the full REVENUE Financial Report 2006–07 for the year ended 30 June 2007. Contributions The financial statements and specific disclosures included Donations and gifts in the concise financial report have been derived from the Large project gifts 7 196 4 769 full Financial Report 2006–07. The concise financial report Continuing community support 3 685 3 388 cannot be expected to provide as full an understanding of the Total donations and gifts 10 881 8 157 financial performance, financial position and financing and Grants 2(a) 1 213 3 968 investing activities of Australian Bush Heritage Fund (Bush Bequests 68 454 Heritage) as the full Financial Report 2006–07. Further Total contributions 12 162 12 579 financial information can be obtained from the full Financial Interest and investment income 624 279 Report 2006–07 which is available from Bush Heritage, free Reserve income 2(b) 155 149 of charge, upon request. Other income 2(c) 204 321 Total revenue 13 145 13 328

EXPENSES Conservation management activities 3(a) 4 404 3 028 Fundraising and development activities 3(b) 1 761 1 277 Administrative expenses 3(c) 576 512

Total expenses 6 741 4 817 Surplus before tax 6 404 8 511 Income tax — — Net surplus 6 404 8 511

The above income statement should be read in conjunction with the accompanying notes.

Discussion and analysis – income statement Trends in revenue Regular donations from our supporter base (see ‘Continuing community support’ above) have continued the growth experienced in recent years. Our major gifts program (see ‘Large project gifts’ above) produced results that were significantly higher than in the previous year, while government grants, which are variable by nature, were less than in the previous year, when there were several major property acquisitions. Investment income increased due to the strong performance in equity markets together with an increase in the overall value of funds in the investment portfolio. Total revenue was similar to that of the previous year, which far exceeded that of any year in the organisation’s history. Sales revenue There is no sales revenue recognised and included in revenue. Effects of significant economic or other events There were no significant impacts on performance resulting from external events. Main influences on cost of operations Bush Heritage’s cost base continues to grow as we acquire more land to protect biodiversity. Several strategies are used to ensure that we do not outstrip our ability to support our land reserves, including the use of an investment portfolio to provide endowment funds, and careful budgeting of anticipated fundraising income and reserve management expenses. Total operating expenses increased from the previous year, due to a higher level of activity on existing reserves, reflecting the establishment phase of the large reserves purchased in the previous year. Dividends Bush Heritage is a company limited by guarantee and does not have issued share capital. As such, Bush Heritage does not pay dividends.

2007 2006 Accumulated Notes $’000 $’000 surpluses Reserves ASSETS 2007 2006 2007 2006 Notes $’000 $’000 $’000 $’000 Current assets Balance at the start 19 006 11 979 2 047 — Cash and cash equivalents 4 904 3 214 of the period Trade and other receivables 289 231 Net valuation gains taken — — — 417 Total current assets 5 193 3 445 to equity 1 July Non-current assets Net valuation gains taken — — 494 251 Available-for-sale investments 4 6 543 4 342 to equity during the period Property, plant and equipment 16 877 13 772 Transfers to net gains on disposal — — — (105) of available-for-sale investments Intangibles – computer software 42 43 Transfers from/(to) reserves 725 (1 484) (725) 1 484 Total non-current assets 23 462 18 157 Surplus for the period 6 404 8 511 — — TOTAL ASSETS 28 655 21 602 Balance at the end of the period 26 135 19 006 1 816 2 047 LIABILITIES The above statement of changes in equity should be read in conjunction with the accompanying notes. Current liabilities Trade and other payables 470 349 Provisions 174 161 Discussion and analysis – changes in equity Total current liabilities 644 510 Changes in the composition of the components of equity Non-current liabilities As discussed in the ‘Changes in the composition of assets’, net Provisions 60 39 movements in the market value of the available-for-sale investment Total non-current liabilities 60 39 portfolio are recognised in equity via the Net Unrealised Gains TOTAL LIABILITIES 704 549 Reserve. Due to favourable market conditions there has been a net increase in the unrealised investment gains reserve of NET ASSETS 27 951 21 053 $0.494 million at 30 June 2007. EQUITY During the ﬁnancial year, $0.725 million was transferred from Accumulated surpluses 26 135 19 006 Accumulated Surpluses to equity reserves (refer Note 1(a) Reserves 1 816 2047 ‘Signiﬁcant accounting policies’ for details on the purpose of the TOTAL EQUITY 27 951 21 053 equity reserves).

The above balance sheet should be read in conjunction with the accompanying notes. The net surplus from operating activities for the ﬁnancial year amounted to $6.404 million.

Discussion and analysis – balance sheet Changes in the composition of assets Total assets increased by $7.053 million due to the acquisition of new reserves (Peniup Creek WA, Monjebup WA, Scottsdale NSW, Nardoo Hills 3 Vic, ‘Nameless’ Sylvan NSW), capitalisation of donated land, purchase of associated plant and equipment, and additional endowment investments reflected in the value of the available-for-sale investments. The carrying value of the available-for-sale investment portfolio is the market value of the investments as at 30 June 2007. The net movement in the available-for-sale investment portfolio includes the Net Unrealised Gains Reserve, which now stands at $1.057 million. Bush Heritage has also received funding for specific future operational activities and land acquisitions, totalling $0.759 million, and this amount is included in equity reserves. Relationship between debt and equity Bush Heritage does not have any borrowings. Total equity increased significantly this financial year and now stands at $27.951 million.

2007 2006 30 June 2007 $’000 $’000 Note 1 Basis of preparation Cash flows from operating activities Receipts from contributions and other sources 11 913 10 278 This concise financial report has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Interest and dividends received 624 316 Accounting Standard AASB 1039 ‘Concise Financial Reports’, Payment to suppliers and employees (6 235) (4 321) with the exception that no Segment reporting is provided, as Net cash from operating activities 6 302 6 273 Bush Heritage operates in only one business segment and one Cash flows from investing activities geographic segment. The concise financial report has been prepared on the historical cost basis, except for available-for-sale Proceeds from the sale of — 587 available-for-sale investments investments, which have been measured at fair value. The concise Purchases of available-for-sale investments (1 707) (1 325) financial report is presented in Australian dollars and all values are Proceeds from the sale of land — 65 rounded to the nearest thousand dollars ($’000) unless otherwise stated, using the option available to Bush Heritage under ASIC Purchases of land (2 318) (3 965) Class Order 98/100. Bush Heritage is an entity to which the class Proceeds from the sale of buildings & infrastructure 41 16 and plant & equipment order applies. Purchases of buildings & infrastructure, (628) (1 520) plant & equipment and software Note 1(a) Significant accounting policies The accounting policies adopted are consistent with the Net cash from investing activities (4 612) (6 142) requirements of Australian Accounting Standards and Australian equivalents to International Financial Reporting Standards (AIFRS). Net increase in cash and cash equivalents 1 690 131 Revenues received for specific future land acquisitions are Cash and cash equivalents at beginning of period 3 214 3 083 transferred to the Pending Land Acquisition Reserve from Cash and cash equivalents at end of period 4 904 3 214 Accumulated Surpluses until the land has been acquired. The above cash flow statement should be read in conjunction with the Revenues received for future specific operational activities are accompanying notes. transferred to the Pending Land Management Reserve from Accumulated Surpluses until the specific operational activities have Discussion and analysis – cash flows been undertaken. Changes in cash flows from operations Net cash in-flows The Net Unrealised Gains Reserve is the net movements in the from operating activities were similar to those of the previous available-for-sale investment portfolio arising from the ongoing year. Cash in-flows benefited from increased gifts and donations revaluations of the investment portfolio to market values. to enable the purchase of additional reserves during the financial The accounting policies adopted are contained in detail in Note 2 of year. As a consequence of the growth in the number of reserves the full Financial Report 2006–07. and conservation activities undertaken, there has also been a corresponding increase in the expenditure incurred in maintaining Note 2 Revenue our operations. Note 2(a) Grants Financing of investing activities Capital expenditure during the Grants were received from the following sources: financial year was focused on the acquisition of additional reserves 2007 2006 together with the provision of infrastructure, plant and equipment $’000 $’000 to new and existing reserves. This expenditure was financed mainly from donation income. During the financial year, available-for-sale Department of Environment and Water Resources 741 3 734 investments increased by $1.707 million, adding to the existing Land and Water Australia 181 — portfolio of endowment funds set aside to assist with our future Department of Environment and Conservation NSW 100 — operations. A net cash in-flow of $1.690 million during the financial Indigenous Land Corporation 50 49 year resulted in a closing cash position of $4.904 million. Others 141 185 Servicing and repayment of borrowings Bush Heritage does not Total grants 1 213 3 968 currently hold any borrowings. Note 2(b) Reserve income 2007 2006 $’000 $’000 Revenue from the rendering of services Service fees (i) 112 91 Field trips (ii) 5 26 Agistment/cropping (iii) 36 24 Others 2 8 Total reserve income 155 149

Annual Financial Report 2006–2007 © 2007 Bush Heritage Australia | 15 (i) Service fees include fees received as part of the Reedy Creek Note 3 Expenses Reserve management services agreement, under which Bush Note 3(a) Conservation management Heritage receives a fee to offset the costs of managing the Conservation management expenses include the following reserve and the adjoining common lands in the Sunrise at 1770 key items: Coastal Residential Project, Agnes Water, Qld. Reserve management expenses (ii) Field trips are operated on a cost-recovery basis. These trips Covers all expenses associated with operating Bush Heritage’s are not viewed as an income-generating business. They are 28 reserves (2006: 23 reserves), including staff costs, associated operated to help our supporters see first hand the results of ownership costs such as rates and taxes, expenses associated with their donations and to learn about conservation management operating each reserve’s infrastructure, and expenses associated issues and options. with conservation actions such as fire management, feral animal (iii) Fees are received for agistment and cropping on the freehold control, weed control, revegetation, monitoring and surveying. portion of Eurardy Reserve. This area was cleared and cropped Conservation Programs Unit expenses by the previous owner and Bush Heritage is continuing with Covers expenses associated with policy and planning of this approach while management plans and revegetation conservation actions, ecological research, preparing management options are being prepared. plans for reserves, organising volunteer support, organising field trips to reserves, education, and building and managing relations Note 2(c) Other income with other land-owners. 2007 2006 Beyond the Boundaries expenses $’000 $’000 Covers expenses associated with the Beyond the Boundaries Pro bono support (i) 187 201 program, which aims to develop partnerships for managing the Net gains on disposal of available-for-sale — 105 conservation values on neighbouring properties and properties investments (ii) owned by other major land-holders. Membership (iii) 1 1 Land search expenses Other 16 14 Covers expenses associated with investigating potential new Total other income 204 321 reserve acquisitions. (i) Pro bono support Note 3(b) Fundraising and development During the financial year, Bush Heritage was the grateful Covers all expenses associated with generating income from recipient of pro bono support from the following companies. donations. Costs include salaries, database administration and office This nominal allocation to revenue has an offsetting costs associated with development activities, such as the part- expense item. cost of newsletters, contacting existing supporters and developing 2007 2006 potential new supporters. $’000 $’000 Allens Arthur Robinson (legal support) 187 193 Note 3(c) Administration Finlaysons (legal support, South Australia) — 8 Administration expenses include the following key items: Total pro bono support 187 201 Board expenses Covers all expenses associated with the Board of Directors, Bush Heritage also benefited from 3406 days (2006: 1495 primarily covering face-to-face and telephone-based meetings. days) of volunteer support. The estimated value of this All directors provide their time on a pro bono basis. contribution is $684 000 (2006: $275 000), however this Administration estimate is not included in the accounts. Covers activities concerned with the governance and day-to-day (ii) Net gains on disposal of available-for-sale investments administration of Bush Heritage. This revenue item represents the cumulative gains or losses Note 4 Available-for-sale investments from the mark-to-market adjustments made to the investment 2007 2006 each month and which are recognised in the Net Unrealised $’000 $’000 Gains Reserve up until the disposal of the investment. Managed funds 3 000 2 063 (iii) Membership Property trusts 1 370 895 Bush Heritage is a non-profit-making, public company limited Bonds 472 472 by guarantee. Members are nominated and determined in accordance with the Constitution. If the company is wound Variable interest 417 414 up, the Constitution states that each member is required to Stewardship Fund No.2 1 284 498 contribute a maximum of $10 towards meeting any outstanding Total available-for-sale investments 6 543 4 342 obligations of the company. Bush Heritage is listed on the (a) Bush Heritage manages an investment portfolio to raise Commonwealth Government’s Register of Environmental income to assist with reserve management costs. The Organisations, certifying it as a Deductible Gift Recipient, which fundraising campaign for each new acquisition of land aims to authorises Bush Heritage to issue tax-deductible receipts for raise funds in addition to the purchase price and set-up costs, donations of over $2. A requirement of organisations listed on this register is that they maintain a minimum of 50 members. to create an endowment to help cover future management Members can elect to pay their membership fees up to three costs. These funds are invested in a portfolio under pro bono years in advance. Year One fees are recognised as revenue, advice from a qualified financial planner, using Bush Heritage’s while fees for years Two and Three are recognised as current ethical investment criteria. and non-current liabilities respectively. As at 30 June 2007 the (b) Included in the investments is a new segregated stewardship number of members was 65 (2006: 60). endowment fund.

16 | Annual Financial Report 2006–2007 © 2007 Bush Heritage Australia Note 5 Subsequent events ■ make final decisions with respect to property acquisition or disposal On 19 September 2007, Bush Heritage acquired Yourka Station in Queensland with assistance from the Australian Government’s ■ prepare and approve policy statements Maintaining Australia’s Biodiversity Hotspots Programme, a large ■ determine strategic and long-term objectives. gift from a long-term donor and donations from our supporter base The Board is supported by the following committees, with in response to our Spring newsletter. membership consisting primarily of directors, with support from Ms Alexis Wright resigned as a director of Bush Heritage in specialist advisers: October 2007. ■ Nominations Committee Recent share market volatility has had no significant adverse impact ■ Conservation Committee on our investment portfolio. ■ Fundraising Committee Note 6 State government fundraising legislation requirements ■ Communications Committee As a national organisation, Bush Heritage conducts fundraising ■ Finance & Audit Committee operations in all states. Several state governments have specific ■ Gift Fund Committee. licensing and reporting requirements aimed at informing and The Board’s limitation policy for the Chief Executive Officer provides protecting the interest of donors. Bush Heritage holds the that: following licences: ■ the Board of Directors will provide clear directions of what is Australian Capital Territory Charitable Collections Act 2003, required of the Chief Executive Officer through identification of Licence No. 36 key performance indicators New South Wales Charitable Fundraising Act 1991, Fundraising Authority CFN 17412 ■ in the fulfilment of the Chief Executive Officer’s duties and Queensland Collection Act 1966, Certificate of responsibilities, the Chief Executive Officer will use his/her Sanction No. 4954 discretion so as to achieve the necessary outcomes in a Tasmania Collections for Charities Act 2001, professional, ethical, responsible and legal manner. Approval 21/03/05 The process of evaluation of the Chief Executive Officer is ongoing, Victoria Fundraising Appeals Act 1998, and a session on key performance indicators is held with the Approval 1/04/05 President six-monthly. The Board or its delegate conducts an South Australia Application pending annual performance review of the Chief Executive Officer. The There are no specific fundraising licensing requirements in Western remuneration and terms and conditions for the Chief Executive Australia or the Northern Territory. Officer are reviewed and approved by the Board after seeking professional advice. The Chief Executive Officer reviews and The complete declaration under the Charitable Fundraising Act approves remuneration and conditions for other staff in the context 1991 (NSW) is available in Note 20 in the full Financial Report of agreed parameters established by the Board, and annual 2006–07. performance reviews occur for all staff. Note 7 Corporate governance Communication of the Company’s affairs to members, supporters and the public is widely undertaken. There is direct communication All members of the Board of Directors serve in an honorary through newsletters and the provision of the Annual Report to capacity. They are appointed through the Constitution by the members. The Annual Report and full financial disclosure, together members of Bush Heritage and are themselves members. Directors with key policies and the Company’s Constitution, are available on do not receive remuneration for their role. However, out-of- the internet at www.bushheritage.org.au pocket expenses may be paid for travel, accommodation and communications to enable them to fulfil their duties. Directors and The Company Secretary is Mr Doug Humann, the Chief Executive senior staff have formal duties under company law and are kept Officer. The Company Secretary, with support from legal advisors, appraised of these, using professional advice when necessary. There advises the Board on the appropriate procedures for the conduct are conflict-of-interest provisions in the Constitution and in company of meetings and the affairs of the Company as required by the law, applicable to the directors, together with an internal protocol. Constitution and company law. The Company’s Constitution governs the regulations of meetings and proceedings of the Board of Directors, together with the procedures for appointment and replacement of directors. The Board regularly reviews the skills and experiences necessary for its activities and currently considers it appropriate that there is the following mix: business management; ecological and scientific; financial; legal; marketing; Indigenous and rural property. In addition to those matters required by the Constitution and company law, the Board’s principle roles are to: ■ approve the annual budget and audit ■ receive and review regular and comprehensive financial and investment reports ■ oversee and direct the Chief Executive Officer ■ ensure risk-management analysis has been undertaken ■ provide strategic financial advice and support to management

In accordance with a resolution of the directors of the Australian Bush Heritage Fund, I state that: 1 in the opinion of the directors: (a) the ﬁnancial statements and notes of the company are in accordance with Corporations Act 2001 including: (i) giving a true and fair view of the Australian Bush Heritage Fund’s ﬁnancial position as at 30 June 2007; and (ii) complying with Accounting Standards and Corporations Regulations 2001; and (b) there are reasonable grounds to believe that the Australian Bush Heritage Fund will be able to pay its debts as and when they become due and payable. On behalf of the Board of Directors

Phillip Toyne President Melbourne, 28 September 2007

Old gidyea on cliff edge at Pulchera Waterhole, Ethabuka Reserve, Qld. PHOTO: WAYNE LAWLER/ECOPIX

The accompanying concise fi nancial report of Australian Bush Heritage Fund comprises the balance sheet as at 30 June 2007, the income statement, statement of changes in equity and cash fl ow statement for the year then ended and related notes, derived from the audited fi nancial report of Australian Bush Heritage Fund for the year ended 30 June 2007. The concise fi nancial report also includes discussion and analysis and the directors’ declaration. The concise fi nancial report does not contain all the disclosures required by the Australian Accounting Standards.

Directors’ Responsibility for the Concise Financial Report The Directors are responsible for the preparation and presentation of the concise ﬁ nancial report in accordance with Accounting Standard AASB 1039 Concise Financial Reports, and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation of the concise ﬁ nancial report; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility Our responsibility is to express an opinion on the concise fi nancial report based on our audit procedures. We have conducted an independent audit, in accordance with Australian Auditing Standards, of the fi nancial report of Australian Bush Heritage Fund for the year ended 30 June 2007. Our audit report on the fi nancial report for the year was signed on 28 September 2007 and was not subject to any modifi cation. The Australian Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the fi nancial report for the year is free from material misstatement. Our procedures in respect of the concise fi nancial report included testing that the information in the concise fi nancial report is derived from, and is consistent with, the fi nancial report for the year, and examination on a test basis, of evidence supporting the amounts, discussion and analysis, and other disclosures which were not directly derived from the fi nancial report for the year. These procedures have been undertaken to form an opinion whether, in all material respects, the concise fi nancial report complies with Accounting Standard AASB 1039 Concise Financial Reports and whether the discussion and analysis complies with the requirements laid down in AASB 1039 Concise Financial Reports. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s Opinion In our opinion, the concise ﬁ nancial report, including the discussion and analysis and the directors’ declaration of Australian Bush Heritage Fund for the year ended 30 June 2007 complies with Accounting Standard AASB 1039 Concise Financial Reports.

Ernst & Young

Kester Brown Partner

Melbourne Liability limited by a scheme approved under 28 September 2007 Professional Standards Legislation.

Annual Financial Report 2006–2007 © 2007 Bush Heritage Australia | 19 Australian Bush Heritage Fund (trading as Bush Heritage Australia) ABN 78 053 639 115 Registered ofﬁ ce: Level 5, 395 Collins Street, Melbourne VIC 3000 Postal address: PO Box 329, Flinders Lane, Melbourne VIC 8009 Phone: (03) 8610 9100 or 1300 NATURE (1300 628 873) Fax: (03) 8610 9199 Email: [email protected] Website: www.bushheritage.org.au

Artwork and production: Geoffrey Williams + Associates Pty Ltd. 20 | Annual Financial Report 2006–20072006–2007 © 20072007 Bush Heritage AustralPrintedia on combination 55% recycled and 45% plantation ﬁ bre using vegetable-based inks.