FINANCIAL REPORT 2017

Transcription

1 Cootharinga North Queensland Ability First! Cootharinga North Queensland Ability First! FINANCIAL REPORT COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 1

2 COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE Cootharinga North Queensland is an entity incorporated under the Corporations Act 2001 and is an entity limited by guarantee. The Registered Office and Principal Place of Business is: 20 Keane St Currajong Townsville Qld 4812 There were 423 employees at 30 June. COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 2

3 DIRECTORS REPORT Your Directors present the following report for the financial year ended 30 June. Directors The details of the Directors of Cootharinga North Queensland in office at the date of this report; including name, qualifications, experience and special responsibilities, are shown below. There were 6 Directors meetings held during the year. Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Information on Directors Rob Grant Director Qualifications Attendee - HBS - Governing for NFP Excellence. Experience Ad Agency - Media Director Since Meetings of Directors Directors Board of Directors Executive Committee Services Committee Customer Service & Community Development Committee Finance & Business Capability Committee People Property & Transport Committee Rob Grant 6 of 6 1 of 1 4 of 4 4 of 4 7 of 8 4 of 4 Colin Harkness 4 of 6 1 of 1 3 of 4 Ian Featherstone 5 of 6 1 of 1 1 of 2 6 of 8 4 of 4 Anna Nicholls 4 of 6 0 of 1 4 of 4 Renee Bennett 6 of 6 2 of 4 Jim Young 1 of 4 3 of 4 4 of 5 Kevin Byrne 5 of 6 2 of 4 Wayde Chiesa 4 of 6 3 of 4 5 of 8 DIRECTORS REPORT Colin Harkness Qualifications Experience Ian Featherstone Qualifications Experience Anna Nicholls Qualifications Experience Director Solicitor of Supreme Court QLD 40yrs+, now retired. Self Employed Land Developer. Director GAICD;Senior Assoc. Bankers Institute of Australia. Finance Manager - now retired. Director Bachelor of OT, Graduate Dip OHS, OT driu Ax, OT Aust, SIA, Human Factors & Ergonomic SOA. OT/Managing Director Own business since Proceedings on Behalf of the Company No person has applied for leave of court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings. The company was not a party to any such proceedings during the year. Company Secretary The following person held the position of Company Secretary at the end of the financial year: Mr Brad Walsh Bachelor of Commerce, Certified Practicing Accountant. Mr Walsh has worked for Cootharinga North Queensland for the past 22 years. Mr Walsh was appointed Company Secretary on 6 October Renee Bennett Director Qualifications Bach of Law, Solicitor of Supreme Crt Qld and High Crt Aust. Experience Lawyer - Since Jim Young Director (resigned April ) Qualifications Motor Dealer for 25 years. Retired in Experience Company Director, Managing Commercial property since Interests of Directors in Contracts with the Company There were no material contracts involving Directors interests at the end of the financial year or, if not then subsisting, entered into since the end of the previous financial year. Principal Activities The principal activities of the company have been providing services to people living with disability, and their families. There has been no significant change in the nature of these activities during the year. Kevin Byrne Qualifications Experience Wayde Chiesa Qualifications Experience Director M.A (Bus/Admin), AICD Member, PNGICD. Involved in Senior Management positions in the emerging LNG sector in PNG. Currently serves on a number of company boards. Principal - Kevin Byrne and Associates. Director Bachelor of Commerce, Chartered Accountant Principal Affari Consulting Short and Long Term Objectives of the Entity The long term objectives for the organisation are guided strongly by our organisational Constitution. These are supported by our long term Vision Statement which reads Building a better world with people of all abilities. Short term objectives are articulated in the document entitled Strategic Directions to The Strategic Directions that applied for this reporting period were: (1) Support and Services (2) Equipment Solutions (3) Empowerment (4) Accessible Housing (5) Business Support (6) Business Strategy COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 3

4 Directors Report continued Measurement of Performance The organisation closely monitors its performance against the agreed Strategic Directions. This occurs through aligning all reports of General Managers and The CEO to the agreed Strategic Directions. All reports are presented to the members of the Executive Leadership team and the Board of Directors and Board Subcommittees. Key final measures and indicators in relation to financial matters are in place and they are regularly monitored by the General Manager Finance and IT, in association with the Board Finance and Resources Subcommittee. Environmental Issues The organisation s operations are not regulated by any significant environmental regulation under a law of the commonwealth or of a state or territory. Result for the Year The loss of the company for the financial year ended 30th June, was 60,482. Dividends The company is a non profit organisation and the payment of dividends is prohibited. Review of Operations and Results of Operations Cootharinga North Queensland s overall financial result for the year ended 30 June was a deficit of 60,482. This represents a 1,557,813 increase in deficit from the year ended 30 June, including one off capital funding and investment revaluations. For the regular operations (operations excluding one off capital funding, a capital donation and investment revaluations) of the company the result was an operating deficit of 2,085,960. The main factors contributing to this result were as follows: Income Total operating income has increased by 1,435,045 mainly as a result of the following: The implementation of the National Disability Insurance Scheme in North Queensland (NDIS) resulted in an increase in NDIS Income of 9,780,541, comprising of 9,328,401 for Services and 452,140 for Specialist Disability Accommodation Funding. Government funding income decreased by 8,237,006 as a result of customers transitioning to NDIS and reduced capital funding. Department of Communities, Child Safety and Disability Services (DS) funding decreases of 7,583,564 relating to funded services including Supported Accommodation, Individual Support, Community Access, Parent Connect and School Leavers Services; Once off capital funding decreased by 653,442. Capital funding was received from the Queensland Government, for the construction of Hooper Street and Callaghan Street; Commonwealth Continuity of Support Funding Programme Increased 145,201; Fee For Service income has decreased by 410,127; Fundraising income including Bequests has increased by 924,048; Investment property rental income has increased by 24,995; Service charges have decreased by 30,398; Investments related income has decreased by 770,794. Expenses Total expenses have increased by 2,992,859 mainly as a result of the following: The operating costs increases relate to employee remuneration expenses; new services costings relating to the increases in services funding being the transition into NDIS and transition out of DS funding noted above; increase in overheads to work in the NDIS business environment; Cootharinga over-delivering support to customers compared to their NDIS Plans; and general inflationary cost increases. Balance Sheet The transition into NDIS has resulted in a significant movement in balance sheet items: Cash and Cash equivalents decrease of 1,321,223 Current Other Financial Assets (Held to Maturity Financial Assets) decrease of 3,847,319 Current Trade and Other Receivables increase of 2,050,741 Non-Current Furniture Equipment and Plant increase of 1,549,833 The transition into the NDIS business environment has required a significant investment in ICT and Business Systems Capabilities and additional Business Centres which resulted in an increase in Non-Current Furniture Equipment and Plant. The transition to NDIS has changed the funding environment from funding received in advance to payment in arrears for services delivered. All of these factors have contributed to the reduction in Cash and Financial Assets and increase in receivables and Furniture Equipment and Plant. A review of operations and the results of those operations for the financial year are set out in the President s Report. Significant After Balance Date Events No matter or circumstance has arisen since the end of the financial year that has significantly affected or may significantly affect the operations of the company, the results of those operations or the state of affairs of the company in subsequent financial years. Likely Future Developments and Expected Results Major developments which may affect the operations of the company in subsequent financial years are referred to in the President s Report. Indemnification The organisation has arranged liability cover for the protection of the Association. The limit of indemnity being a combined single limit. Directors Benefits Neither since the financial year nor during the financial year has a Director received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of remuneration paid or payable to Directors as disclosed in Note 15 to the financial statements) by reason of a contract made with the Director, a firm of which the Director was a member, or an entity in which the Director has a substantial financial interest, by the company or an entity that the company controlled, or a body corporate that was related to the company when the contract was made or when the Director received or became DIRECTORS REPORT COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 4

5 Directors Report continued entitled to receive the benefit, except for those disclosed in Note 17. Non-audit Services There were no amounts paid to or are payable for non-audit services provided by the auditors: Auditor s Independence Declaration The auditor s independence declaration under section 307C is contained on page 5 of this report. Signed in accordance with a resolution of the Board of Directors.... Director Rob Grant (President)... Director Ian Featherstone (Treasurer) Dated at Townsville this 6th day of October. COOTHARINGA NORTH QUEENSLAND ACN AUDITOR S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 As lead engagement auditor for the audit of Cootharinga North Queensland for the year ended 30 June, I declare that, to the best of my knowledge and belief, there have been: i. no contraventions of the independence requirements of the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. Jessups Accountants and Business Advisors... Rodger. Dunstan Director Dated this 6th day of October, 19 Stanley Street Townsville QLD 4810 DIRECTOR S REPORT / AUDITOR S DECLARATION COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 5

6 Revenues from Continuing Operations Notes Revenues from service activities 18,400,191 17,672,450 Other Revenues from continuing operations 4,015,024 3,307,721 Total Revenue from Continuing Operations 2 22,415,215 20,980,171 Expenses from Continuing Operations STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE Supported Accommodation Service expenses 8,671,463 10,091,512 Support Service expenses 3,133,151 2,649,326 Allied Health Service expenses 902, ,273 COMPREHENSIVE INCOME Equipment Solutions Service expenses 450, ,368 Respite Service expenses 1,973,487 2,637,176 Other Services expenses 1,248, ,158 Other expenses from continuing operations 6,096,443 1,963,305 Total Expenses from Continuing Operations 3 22,475,698 19,482,840 Profit (loss) from Continuing Operations Before Income Tax Expense (Income Tax Revenue) (60,482) 1,497,331 Income Tax Revenue (Income Tax Expense) Relating to Continuing Operations 1(j) Profit (loss) from Continuing Operations After Income Tax Expense (Income Tax Revenue) (60,482) 1,497,331 Other Comprehensive Income Net Value Gain/(Loss) on Available-For-Sale Financial Assets 7,236 (152,007 Income relating to the 2015 financial year and prior financial years ,701 Total Other Comprehensive Income 7, ,694 Total Comprehensive Income (53,246) 1,977,025 Profit (loss) Attributable to Members of the Entity (60,482) 1,497,331 Total Comprehensive Income Attributable to Members of the Entity (53,246) 1,977,025 The above Statement of Comprehensive Income is to be read in conjunction with the attached notes. COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 6

7 STATEMENT OF RECOGNISED INCOME AND EXPENDITURE FOR THE FINANCIAL YEAR ENDED 30 JUNE Notes Retained Earnings (Accumulated Losses) Available- For-Sale Financial Assets Balance at 30 June ,623, ,151 12,312,643 Gains (losses) from measuring available-for-sale financial assets to fair value: Recognised during period --- (152,007) (152,007) Removed and recognised in profit/loss Retained Earnings Adjustment , ,701 Profit (loss) attributable to members 1,497, ,497,331 Balance at 30 June 13,752, ,144 14,289,668 Gains (losses) from measuring available-for-sale financial assets to fair value: 19 Recognised during period --- 7,236 7,236 Profit (loss) attributable to members (60,482) --- (60,482) Balance at 30 June 13,692, ,379 14,236,422 The above Statement of Recognised Income and Expenditure is to be read in conjunction with the attached notes. Total RECOGNISED INCOME AND EXPENDITURE COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 7

8 Current Assets BALANCE SHEET AS AT 30 JUNE Notes Cash and cash equivalents 4 995,566 2,316,789 Trade and other receivables 5 2,485, ,534 Other financial assets 6 973,704 4,821,023 Total Current Assets 4,454,545 7,572,346 BALANCE SHEET Non-Current Assets Other financial assets 7 2,148,436 1,914,497 Property, plant and equipment 8 13,165,371 10,353,526 Other 69,375 92,500 Total Non-Current Assets 15,383,182 12,360,523 Total Assets 19,837,727 19,932,869 Current Liabilities Trade and other payables 9 2,233,640 2,062,553 Other financial liabilities Short term provisions 11 1,736,324 1,972,302 Total Current Liabilities 3,969,964 4,034,855 Non-Current Liabilities Long term provisions , ,347 Other financial liabilities 10 1,500,000 1,500,000 Total Non-Current Liabilities 1,631,341 1,608,347 Total Liabilities 5,601,306 5,643,202 Net Assets 14,236,422 14,289,668 Equity Retained earnings 13,692,043 13,752,525 Available-for-sale financial assets reserve 544, ,144 Total Equity 14,236,422 14,289,668 The above Balance Sheet is to be read in conjunction with the attached notes. COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 8

9 Cash flows from operating activities: CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE Notes Government Funding 10,611,566 19,513,311 NDIS Income 8,820, Fundraising 433, ,886 Interest Received 156, ,914 Interest Paid (77,223) (75,140) Dividends Received 130, ,307 Donations, Legacies & Bequests Received 990, Other Receipts 56,907 1,632,841 Payments to Suppliers and Employees (22,793,659) (20,355,061) Net cash provided by/(used in) Operating activities 2 (1,672,506) 1,444,058 CASH FLOW STATEMENT Cash flows from investing activities: Return of Capital on Units in Unit Trust ,250 Proceeds from: Disposal of Property, Plant and Equipment 3,588 49,871 Payments for: Property Plant and equipment (3,386,169) (2,123,609) Shares (43,407) (40,590) Interest Bearing Deposits 3,808,100 2,301,000 Net cash provided by/(used in) investing activities 382, ,922 Cash flows from financing activities: Repayment of Funds Lent 23, Proceeds from Borrowings ,022 Repayment of Borrowings (53,954) (52,588) Net cash provided by/(used in) financing activities (30,829) 436,434 Net increase (decrease) in cash held (1,321,223) 2,081,414 Cash at the beginning of the year 1 2,316, ,375 Cash at the end of the year 1 995,566 2,316,789 The above Cash Flow Statement is to be read in conjunction with the attached notes. COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 9

10 NOTES TO THE CASH FLOW STATEMENT 1. Reconciliation of Cash For the purposes of the statement of cash flows, cash includes cash on hand and in banks and investments in money market instruments with terms of less than 90 days, net of outstanding bank overdrafts. Cash at the end of the year as shown in the statement of cash flows is reconciled to the related items in the balance sheet as follows: Cash at Bank and on hand 995,566 2,316,789 Bank Overdraft 2. Reconciliation of Net Cash provided by/(used in) Operating Activities to Operating Profit/(Loss): ,566 2,316,789 Net Profit/(Loss) after Tax (60,482) 1,497,331 Depreciation 587, ,380 Fixed Asset Register Reconciliation Adjustment Expense 5,000 17,139 Bad Debts Expense --- 7,901 Gain on Disposal of Shares (147,459) (17,581) Gain on Disposal of Fixed Assets (2,850) (3,223) Accrued Interest Income 39,220 27,075 Reinvestment of interest in Interest Bearing Deposits --- (687) Changes in Assets and Liabilities: (Increase)/Decrease in Trade Debtors (604,833) (115,702) (Increase)/Decrease in other Debtors (1,465,981) (155,779) (Increase)/Decrease in Prepaid Expenses 28,791 (1,782) Increase/(Decrease) in Accounts Payable 19, ,668 Increase/(Decrease) in other Creditors (128,329) 3,712 Increase/(Decrease) in Employee Entitlements 364, ,702 Increase/(Decrease) in Accruals (306,626) (634,096) Net Cash provided by/(used in) Operating Activities (1,672,506) 1,444,058 NOTES TO THE CASH FLOW STATEMENT COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 10

11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1) STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The financial report is for Cootharinga North Queensland as an individual entity, incorporated and domiciled in Australia. Cootharinga North Queensland is a company limited by guarantee. Basis of Preparation These general purpose financial statements have been prepared in accordance with the Australian Charities and Notfor-profits Commission Act 2012 and Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board. The company is a not-for-profit entity for financial reporting purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise. The financial statements, except for the cash flow information, have been prepared on an accrual basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The financial report of Cootharinga North Queensland complies with all International Financial Reporting Standards (IFRS) and interpretations adopted by the International Accounting Standards Board. Currency The financial report is presented in Australian dollars and rounded to the nearest dollar. Authorisation of Financial Report The financial report was authorised for issue on 6th October by the directors. Accounting Policies The principal accounting policies adopted by Cootharinga North Queensland are stated in order to assist in the general understanding of the financial report. The accounting policies have been consistently applied, unless otherwise stated. a) Revenue Revenue from the sale of goods is recognised upon the delivery of goods to customers. Grant revenue is recognised in profit or loss when the entity obtains control of the grant and it is probable that the economic benefits gained from the grant will flow to the entity and the amount of the grant can be measured reliably. If conditions are attached to the grant which must be satisfied before the entity is eligible to receive the contribution, the recognition of the grant as revenue will be deferred until those conditions are satisfied. When grant revenue is received whereby the entity incurs an obligation to deliver economic value directly back to the contributor, this is considered a reciprocal transaction and the grant revenue is recognised in the statement of financial position as a liability until the service has been delivered to the contributor; otherwise the grant is recognised as income on receipt. Donations and Bequests Income are recognised as revenue when received or when the control of the right to receive payment is established, whichever occurs first. Interest revenue is recognised on an accrual basis. Dividend revenue is recognised when the right to receive a dividend has been established. All revenue is stated net of the amount of goods and services tax (GST). b) Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value as indicated, less, where applicable, accumulated depreciation and any impairment losses. Freehold land is stated at cost. Buildings are stated at cost. Furniture, equipment and plant are stated at cost. Plant and equipment are measured on the cost basis and are therefore carried at cost less accumulated depreciation and any accumulated impairment losses. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance are recognised as expenses in profit or loss in the financial period in which they are incurred. Freehold land and buildings, property, plant and equipment that have been contributed at no cost, or for nominal cost are valued at the fair value of the asset at the date it is acquired. On disposal of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognised as a gain or loss. Buildings are depreciated over 50 years (ie at a rate of 2%) using the straight line method. Motor Vehicles are depreciated at the rate of 22.5% per annum using the reducing-balance method. Computer equipment is depreciated at the rate of 40% per annum using the reducing-balance method. Other items of property, plant and equipment are depreciated at the rate of 15% per annum using the reducing-balance method. The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the recoverable amount from these assets. The carrying amounts of non-current assets do not exceed the net amounts that are expected to be recovered through the cash inflows and outflows arising from the continued use and subsequent disposal of the assets. The expected net cash flows included in determining the recoverable amounts have not been discounted to their present values. c) Financial Instruments Initial recognition and measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either purchase or sell the asset (ie trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs except where the instrument is classified at fair value through profit or loss, in which case transaction costs are recognised as expenses in profit or loss immediately. Classification and Subsequent Measurement Financial instruments are subsequently measured at fair value, amortised cost using the effective interest method, or cost. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. NOTES TO THE FINANCIAL STATEMENTS COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 11

12 Notes to the Financial Statements for the Year ended 30 June continued Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method. The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying amount with a consequential recognition of an income or expense item in profit or loss. (i) Financial assets at fair value through profit or loss Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose of shortterm profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying amount included in profit or loss. (ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised. (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the company s intention to hold these investments to maturity. They are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised. (iv) Available-for-sale financial assets Available-for-sale investments are non-derivative financial assets that are either not capable of being classified into other categories of financial assets due to their nature or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. They are subsequently measured at fair value with any remeasurements other than impairment losses and foreign exchange gains and losses recognised in other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss. Available-for-sale financial assets are classified as non-current assets when they are not expected to be sold within 12 months after the end of the reporting period. All other available-forsale financial assets are classified as current assets. (v) Financial liabilities Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is derecognised. Impairment At the end of each reporting period, the company assesses whether there is objective evidence that a financial asset has been impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of the occurrence of one or more events (a loss event ), which has an impact on the estimated future cash flows of the financial asset(s). In the case of available-for-sale financial assets, a significant or prolonged decline in the market value of the instrument is considered a loss event. Impairment losses are recognised in profit or loss immediately. Also, any cumulative decline in fair value previously recognised in other comprehensive income is reclassified into profit or loss at this point. In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors, or a group of debtors, are experiencing significant financial difficulty, default or delinquency in interest or principal payments; indications that they will enter into bankruptcy or other financial reorganisation; and changes in arrears or economic conditions that correlate with defaults. For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used to reduce the carrying amount of financial assets impaired by credit losses. After having taken all possible measures of recovery, if management establishes that the carrying amount cannot be recovered by any means, at that point the writtenoff amounts are charged to the allowance account or the carrying amount of impaired financial assets is reduced directly if no impairment amount was previously recognised in the allowance account. When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated, the company recognises the impairment for such financial assets by taking into account the original terms as if the terms have not been renegotiated so that the loss events that have occurred are duly considered. Derecognition Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability, which is extinguished or transferred to another party, and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss. lmpairment of Assets At the end of each reporting period, the entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset s fair value less costs of disposal and value in use, is compared to the asset s carrying amount. Any excess of the asset s carrying amount over its recoverable amount is recognised in profit or loss. Where the future economic benefits of the asset are not primarily dependent upon the asset s ability to generate net cash inflows and when the entity would, if deprived of the asset, replace its remaining future economic benefits, value in use is determined as the depreciated replacement cost of an asset. Where it is not possible to estimate the recoverable amount of an individual asset, the entity estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where an impairment loss on a revalued individual asset is identified, this is recognised against the revaluation surplus NOTES TO THE FINANCIAL STATEMENTS CONT. COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 12

13 Notes to the Financial Statements for the Year ended 30 June continued in respect of the same class of asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that class of asset d) Employee Provisions Short-term employee provisions Provision is made for the company s obligation for shortterm employee benefits. Short-term employee benefits are benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service, including wages, salaries and sick leave. Shortterm employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled. Other long-term employee provisions Provision is made for employees long service leave and annual leave entitlements not expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service. Other long-term employee benefits are measured at the present value of the expected future payments to be made to employees. Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee departures, and are discounted at rates determined by reference to market yields at the end of the reporting period on government bonds that have maturity dates that approximate the terms of the obligations. Upon the remeasurement of obligations for other long-term employee benefits, the net change in the obligation is recognised in profit or loss as part of employee provisions expense. The company s obligations for long-term employee benefits are presented as non-current employee provisions in its statement of financial position, except where the company does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period, in which case the obligations are presented as current employee provisions. e) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at-call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. f) Goods and Services Tax (GST) Revenues, 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 asset or as part of an item of expense. Receivables and payables in the Balance Sheet are shown inclusive of GST. Cash flows are presented in the Cash Flow Statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. g) Unexpended Grants The entity receives grant monies to fund projects either for contracted periods of time or for specific projects irrespective of the period of time required to complete those projects. It is the policy of the entity to treat grants monies as unexpended grants in the balance sheet where the entity is contractually obliged to provide the services in a subsequent financial period to when the grant is received or in the case of specific project grants where the project has not been completed. h) Subsidies and Grants Commonwealth and Queensland government grants, (including non- monetary grants at fair value) are not recognised until there is reasonable assurance that all conditions will be complied with and the grants will be received. The entity qualifies for both Commonwealth & Queensland Government operating and capital works subsidies and grants. Operating subsidies and grants are brought to account on the accrual basis to match expenses with the related income. Where there are conditions attached to operating subsidies and grants relating to the use of those funds for specific purposes, it is recognised in the balance sheet as an unearned income liability until such conditions are met or services provided. Capital works subsidies and grants are accounted for when received. i) Income Tax No provision for income tax has been raised as the entity is a registered charity and as such is exempt from income tax under Division 50 of the Income Tax Assessment Act j) Provisions Provisions are recognised when the entity has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. k) Comparative Figures Where required by Accounting Standards comparative figures have been adjusted to conform with changes in presentation for the current financial year. l) Accounts Payable and Other Payables Accounts payable and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the company during the reporting period which remain unpaid. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. m) Critical Accounting Estimates and Judgments The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company. Key judgements (i) Available-for-sale investments The company maintains a portfolio of securities with a carrying amount of 2,148,436 at the end of the reporting period. Should share values decline to a level which is in excess of 30% below cost or should prices remain at levels below cost for a period in excess of 12 months, the directors have determined that such investments will be considered impaired in the future. (ii) Employee benefits For the purpose of measurement, AASB 119 : Employee Benefits defines obligations for short-term employee benefits as obligations expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service. The company expects most employees will take their annual leave entitlements within 24 months of the reporting period in which they were earned, but this will not have a material impact on the amounts recognised in respect of obligations for employees leave entitlements. n) Operating Cycle An operating cycle of 12 months has been used as the basis for identifying current assets and current liabilities in the Balance Sheet. o) Accounts Receivable and Other Debtors Accounts receivable and other debtors include amounts due from members as well as amounts receivable from customers for goods sold in the ordinary course of business. Receivables NOTES TO THE FINANCIAL STATEMENTS CONT. COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 13

14 Notes to the Financial Statements for the Year ended 30 June continued expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets. Accounts receivable are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. p) Current Bank Loans, Bank Overdrafts Current bank loans and bank overdrafts, represented the principal amounts outstanding at balance date plus, where applicable, any accrued interest. q) New Accounting Standards for Application in Future Periods. The AASB has issued a number of new and amended Accounting Standards that have mandatory application dates for future reporting periods, some of which are relevant to the company. The directors have decided not to early adopt any of the new and amended pronouncements. Their assessment of the pronouncements that are relevant to the company but applicable in future reporting periods is set out below: - AASB 1058 : Income of Not-for-Profit Entities (applicable to annual reporting periods beginning on or after 1 January 2019). This Standard is applicable to transactions that do not arise from enforceable contracts with customers involving performance obligations. The significant accounting requirements of AASB 1058 are as follows: - Income arising from an excess of the initial carrying amount of an asset over the related contributions by owners, increases in liabilities, decreases in assets and revenue should be immediately recognised in profit or loss. For this purpose, the assets, liabilities and revenue are to be measured in accordance with other applicable Standards. - Liabilities should be recognised for the excess of the initial carrying amount of a financial asset (received in a transfer to enable the entity to acquire or construct a recognisable non-financial asset that is to be controlled by the entity) over any related amounts recognised in accordance with the applicable Standards. The liabilities must be amortised to profit or loss as income when the entity satisfies its obligations under the transfer. An entity may elect to recognise volunteer services or a class of volunteer services as an accounting policy choice if the fair value of those services can be measured reliably, whether or not the services would have been purchased if they had not been donated. Recognised volunteer services should be measured at fair value and any excess over the related amounts (such as contributions by owners or revenue) immediately recognised as income in profit or loss. The transitional provisions of this Standard permit an entity to either: restate the contracts that existed in each prior period presented in accordance with AASB 108 (subject to certain practical expedients); or recognise the cumulative effect of retrospective application to incomplete contracts on the date of initial application. For this purpose, a completed contract is a contract or transaction for which the entity has recognised all of the income in accordance with AASB 1004 : Contributions. Although the directors anticipate that the adoption of AASB 1058 may have an impact on the company s financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact. - AASB -4 : Amendments to Australian Accounting Standards Recoverable Amount of Non-Cash-Generating Specialised Assets of Not-for-Profit Entities (applicable to annual reporting periods beginning on or after 1 January ). This Standard amends AASB 136 : Impairment of Assets to remove references to depreciated replacement cost as a measure of value in use for not-for-profit entities; and clarify that AASB 136 does not apply to non-cash-generating specialised assets that are regularly revalued to fair value under the revaluation model in AASB 116 and AASB 138 : Intangible Assets, but applies to such assets accounted for under the cost model in those Standards. AASB -4 is not expected to have a significant impact on the company s financial statements. NOTES TO THE FINANCIAL STATEMENTS CONT. COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 14

15 Notes to the Financial Statements for the Year ended 30 June continued 2) REVENUE Operating Revenue: Dividends 131, ,114 Financial Assets Fair Value and Impairment Gains 13, ,700 Fundraising 1,212, ,386 Sales 907,921 1,320,023 Government Funding - Services 8,485,084 15,885,607 Government Funding Capital Housing Projects 860,819 1,514,261 Other Government Funding and Allowances 96, ,804 NDIA Income 9,331,098 2,697 NDIA SDA Income 452, Transport 207, ,408 Rent 250, ,048 Sundry 198, ,688 Interest Received 117, ,526 Legacies Gain on Disposal of Non-Current Assets 2,850 3,223 Gain on Disposal on Sale of Shares 147, ,687 Total Revenue 22,415,215 20,980,171 NOTES TO THE FINANCIAL STATEMENTS CONT. 3) PROFIT (LOSS) FROM ORDINARY ACTIVITIES a) Expenses Included in expenses are the following items: Depreciation of Property, Plant and Equipment 587, ,712 Employee Benefits Expense 16,417,189 13,634, 856 Loss on Disposal of Non-Current Investments (Shares) ,106 b) Significant Revenue The following significant revenue items are relevant in explaining the financial performance. Government Funding Capital Housing Projects 860,819 1,514,261 4) CASH AND CASH EQUIVALENTS CURRENT Cash at Bank 990,724 2,312,426 Cash on hand 4,842 4, ,566 2,316,789 COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 15

16 Notes to the Financial Statements for the Year ended 30 June continued 5) TRADE AND OTHER RECEIVABLES CURRENT Total Current Receivables 2,485, ,034 Less Provision for Impairment of receivables - note 5 (i) (500) (500) Trade and Other Receivables 2,485, ,534 (i) Provision for Impairment of Receivables Current trade receivables are generally on 30 day terms. These receivables are assessed for recoverability and a provision for impairment is recognised when there is objective evidence that an individual trade receivable is impaired. These amounts have been included in other expense items. Movement in the provision for impairment of receivables is as follows: Opening Balance Charge for the year Amounts written off Closing Balance Current trade receivables Balance at 30 June Current trade receivables Balance at 30 June There are no balances within trade receivables that contain assets that are not impaired and are post due. It is expected that these balances will be received in the foreseeable future. (ii) Aging of Trade and Other Receivables 0 30 days 942, , days 379,249 35, days 435,193 12,572 Over 90 days 728, ,028 Total 2,485, ,034 The trade receivables disclosed above include amounts that are past due at the end of the reporting period but against which the company has not recognised an allowance for doubtful receivables because there is no significant change in credit quality and the amounts are considered recoverable. The company does not hold any collateral or other credit enhancements over these balances. In determining the recoverability of a trade receivable the company considers any change in the credit quality from the date credit was initially granted up to the end of the reporting period. 6) OTHER FINANCIAL ASSETS CURRENT The following financial assets are held as investments: Financial assets at fair value through Profit and Loss Held to maturity investments 973,704 4,821,023 Total 973,704 4,821,023 Held to maturity investments At beginning of the year 4,821,023 7,190,101 Additions 11,740,000 16,678,100 Disposals (Sale/Redemption) (15,548,100) (19,020,102) Accrued/Reinvested Interest (39,220) (27,075) Carrying amount at end of year 973,704 4,821,023 NOTES TO THE FINANCIAL STATEMENTS CONT. COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 16

17 Notes to the Financial Statements for the Year ended 30 June continued 6) OTHER FINANCIAL ASSETS CURRENT cont.. Comprising of: Term Deposits 973,704 4,821,023 Interest Bearing Term Deposits maturing within 12 months with an effective interest rate(s) of 2.6% ( 3.3%). 7) OTHER FINANCIAL ASSETS (NON-CURRENT) Available-for-sale financial instruments Shares in listed corporations, at fair value 2,148,436 1,914,497 2,148,436 1,914,497 There are no fixed returns or fixed maturity dates attached to these investments. 8) PROPERTY, PLANT AND EQUIPMENT Land and Buildings 11,020,683 9,935,654 Less accumulated depreciation (1,501,408) (1,294,447) Land and Buildings Work in Progress 1,342, ,504 10,861,543 9,212,711 Furniture, Equipment and Plant 4,333,284 3,340,504 Less accumulated depreciation (2,530,047) (2,199,689) Furniture, Equipment and Plant Work in Progress 500, ,303,828 1,140,815 TOTAL PROPERTY, PLANT AND EQUIPMENT 13,165,371 10,353,526 Movements in Carrying Amounts Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: NOTES TO THE FINANCIAL STATEMENTS CONT. Land and Buildings: Beginning of the year 9,212,711 7,754,082 Additions 1,085,029 2,077,137 Disposals --- (19,176) Transfers Work in Progress 770,764 (446,086) Depreciation (206,962) (153,246) Carrying amount at end of year 10,861,543 9,212,711 COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 17

18 Notes to the Financial Statements for the Year ended 30 June continued 8) PROPERTY, PLANT AND EQUIPMENT cont. Furniture, Equipment and Plant: Beginning of the year 1,140,815 1,046,529 Additions 1,549, ,817 Disposals (555,796) (107,065) Transfers Work in Progress 500, Depreciation (331,615) (207,466) Carrying amount at end of year 2,303,828 1,140,815 Total Carrying Amounts at end of year 13,165,371 10,353,526 9) TRADE AND OTHER PAYABLES Trade Accounts Payable 527, ,824 Unexpended Grants/ Unearned Income/ Future Committed Expenditure 779, ,075 Goods and Services Tax (GST) Collected 8, ,592 Employee Benefits 918, ,063 Trade Accounts Payable 2,233,640 2,062,553 The carrying amounts of accounts payable approximate net fair values. All accounts payable are unsecured. (i) Aging of Trade and Other Payables 0 30 days 1,483,902 1,706, days 32,892 1, days 32,669 4,305 Over 90 days 684, ,287 Total 2,233,640 2,062,553 NOTES TO THE FINANCIAL STATEMENTS CONT. 10) OTHER FINANCIAL LIABILITIES Non-Current Secured Borrowings Bank Loan Property Construction 1,500,00 1,500,00 The bank loan is secured by a first registered mortgage over the residential real properties situated at Lot 576 Mallorca Circuit, Lot 566 Mallorca Circuit, Burdell, Qld 4818 and Lot 5626 Kinnardy St, Burdell, Qld The carrying amounts of borrowings approximate net fair values: Net fair values have been determined by current quoted market prices for financial instruments traded in an organised market, adjusted for transaction costs necessary to settle liabilities. Bank Overdraft: Interest % (: 0%) Bank Loans: Kinnardy St: Interest 4.62% (: 5.01%) Mallorca Crt: Interest 4.55% (: 5.52%) COOTHARINGA NORTH QUEENSLAND FINANCIAL REPORT 18