AGFORCE QUEENSLAND INDUSTRIAL UNION OF EMPLOYERS AgForce Queensland Level 2, 110 Mary Street, Brisbane, Qld, 4000 PO Box 13186,North Bank Plaza, cnr Ann and George Sts Brisbane Qld 4003 Ph: (07) 3236 3100 Fax: (07) 3236 3077 Email: agforce@agforceqld.org.au Web: www.agforceqld.org.au
Report from the Treasurer Dear Member It is my pleasure to enclose the annual financial report for AgForce Queensland Industrial Union of Employers and its subsidiaries for the financial year ended 30 June 2014. The financial reports continue to reflect the strong position of the organisation. Stability of membership is critical to the success of the organisation, providing the foundation from which the organisation can grow. AgForce Queensland membership declined in the 2013-2014 year to 4,644 members, however our membership revenues remain relatively stable comparative to the change in numbers. Our members are critical to the organisation, and while ongoing changes in the industry will bring about changes to our member numbers, we will work to ensure the stability of our membership is the cornerstone of the organisation into the future. During the financial year, an independent review was commissioned by the AgForce Council. This will take place on the next financial year and provide for options for the future for consideration by the members and Council. Value for members is critical for us as part of our continued engagement strategy and we hope all members look to take advantage of the corporate partner opportunities and member benefits we seek out for them. A significant impact on the revenues, and corresponding expenses, continuing from previous years is the reduction in project activity. AgForce Projects continued to provide service delivery in areas of significance for not only members but industry wide and include but are not limited to Coal Seam Gas Landholder Initiative, Wild Dogs and Best Management Practices. This year saw the sale of the former head office in Brisbane at 183 North Quay following the relocation of the offices to the new premises at 110 Mary Street. The sale of this property realised a significant gain-on-sale which provided for investment in other areas of operations during the financial year. We have continued to negotiate with our corporate partners and our commercial returns for the 2014 financial year have been favourable as organisations see the value of engaging in our organisation and with our membership. It has been a challenging and enjoyable year in my second term as Treasurer, I have enjoyed embracing the challenges of the period 2013-2014 and the opportunity to support AgForce Queensland. I look forward to continuing to work with the team in the achievement of long term goals and strategies for building the capacity of the organisation. I would like to take this opportunity to thank members for their continued support, Christine Rolfe Treasurer 10 September 2014 2 25
Note Consolidated Group Parent Entity 2014 2013 2014 2013 $ $ $ $ Statements of Comprehensive Income for the year ended 30 June 2014 Revenue 4(a) 7,000,322 7,631,758 5,919,025 6,176,081 Other income 4(b) 887,809 61,983 867,818 - Revenue and other income 7,888,131 7,693,741 6,786,843 6,176,081 Advertising 313,987 309,585 307,394 289,108 Bank fees and charges 26,223 21,033 25,779 20,196 Computer expenses 115,350 111,928 76,021 60,701 Conference expenses 115,504 111,617 72,972 113,917 Depreciation and amortisation expense 392,855 271,889 361,088 191,336 Employee benefits expense 4,713,069 4,488,885 4,027,200 3,550,176 Grain harvest management scheme expenses 49,249 15,004 49,249 15,004 Meeting expenses 240,917 227,664 240,917 227,664 Motor vehicle expenses 133,122 104,536 118,062 89,321 Postage, printing and stationery 118,371 128,551 74,617 74,718 Property outgoings 183,763 396,845 182,610 358,105 Purchase of merchandise 120,591 174,745 - - Memberships and subscriptions 416,789 414,973 416,790 414,973 Telephone 127,590 157,473 122,789 137,147 Travel 271,506 266,076 199,765 180,615 Other expenses 354,012 511,942 333,495 462,651 Expenditure 4(c) 7,692,898 7,712,746 6,608,748 6,185,632 Profit /(loss) before income tax 195,233 (19,005) 178,095 (9,551) Income tax expense 5 - - - - Profit/(loss) for the year 195,233 (19,005) 178,095 (9,551) Other comprehensive income Items that will be reclassified to profit or loss: Changes in fair value of financial assets at fair value through other comprehensive income 14 86,355 149,490 86,355 149,490 Other comprehensive income for the year, net of tax 86,355 149,490 86,355 149,490 Total comprehensive income for the year 281,588 130,485 264,450 139,939 The statements of comprehensive income should be read in conjunction with the attached notes. Page 1
Statements of Financial Position as at 30 June 2014 Assets Current assets Note Consolidated Group Parent Entity 2014 2013 2014 2013 $ $ $ $ Cash and cash equivalents 6 1,081,244 3,201,903 842,605 2,183,171 Trade and other receivables 7 838,129 474,145 720,096 596,669 Held-to-maturity investments 8 900,118 152,262 855,000 105,000 Other current assets 9 42,065 73,389 42,065 63,174 Total current assets 2,861,556 3,901,699 2,459,766 2,948,014 Non-current assets Available-for-sale financial assets 8 2,886,358 1,648,846 2,886,358 1,648,846 Other financial assets 8 - - 123 123 Property, plant and equipment 10 5,551,683 6,282,284 5,501,197 6,203,780 Total non-current assets 8,438,041 7,931,130 8,387,678 7,852,749 Total assets 11,299,597 11,832,829 10,847,444 10,800,763 Liabilities Current liabilities Trade and other payables 11 485,380 509,185 421,729 457,609 Provisions 12 239,992 259,414 199,951 223,610 Other current liabilities 13 1,996,832 2,785,995 1,577,521 1,745,881 Total current liabilities 2,722,204 3,554,594 2,199,201 2,427,100 Non-current liabilities Trade and other payables 11 9,352 16,466 9,352 16,466 Provisions 12 71,518 46,834 47,078 29,834 Total non-current liabilities 80,870 63,300 56,430 46,300 Total liabilities 2,803,074 3,617,894 2,255,631 2,473,400 Net assets 8,496,523 8,214,935 8,591,813 8,327,363 Equity Reserves 14 488,864 402,509 488,864 402,509 Retained earnings 8,007,659 7,812,426 8,102,949 7,924,854 Total equity 8,496,523 8,214,935 8,591,813 8,327,363 The statements of financial position should be read in conjunction with the attached notes. Page 2
Statements of Changes in Equity for the year ended 30 June 2014 Consolidated Group Reserves Retained Earnings Total $ $ $ Balance at 1 July 2012 253,019 7,831,431 8,084,450 Profit for the year - (19,005) (19,005) Other comprehensive income Changes in fair value of available-for-sale financial assets 149,490-149,490 Total Comprehensive income for the year 149,490 (19,005) 130,485 Balance at 30 June 2013 402,509 7,812,426 8,214,935 Profit for the year - 195,233 195,233 Other comprehensive income Changes in fair value of available-for-sale financial assets 86,355-86,355 Total Comprehensive income for the year 86,355 195,233 281,588 Balance at 30 June 2014 488,864 8,007,659 8,496,523 Parent Entity Balance at 1 July 2012 253,019 7,934,405 8,187,424 Profit for the year - (9,551) (9,551) Other comprehensive income Changes in fair value of available-for-sale financial assets 149,490-149,490 Total Comprehensive income for the year 149,490 (9,551) 139,939 Balance at 30 June 2013 402,509 7,924,854 8,327,363 Loss for the year - 178,095 178,095 Other comprehensive income Changes in fair value of available-for-sale financial assets 86,355-86,355 Total Comprehensive income for the year 86,355 178,095 264,450 Balance at 30 June 2014 488,864 8,102,949 8,591,813 The statements of changes in equity should be read in conjunction with the attached notes. Page 3
Statements of Cash Flows for the year ended 30 June 2014 Note Consolidated Group Parent Entity 2014 2013 2014 2013 $ $ $ $ Cash flows from operating activities Receipts from customers 6,426,185 6,809,053 6,483,625 6,482,419 Payments to suppliers and employees (8,057,303) (8,038,119) (7,291,306) (6,491,557) Interest received 150,824 226,397 127,079 173,700 Dividends received 48,225 43,212 48,225 43,212 Net cash inflow/(outflow) from operating activities (1,432,069) (959,457) (632,337) 207,774 Cash flows from investing activities Proceeds from sale of property, plant and equipment 1,522,370 91,952 1,501,490 25,863 Purchase of property, plant and equipment (312,309) (2,886,856) (308,560) (2,886,856) Payments for term deposits (900,118) (152,262) (855,000) (105,000) Redemption of term deposits 152,626 664,212 105,000 105,000 Purchase of financial assets at fair value through other comprehensive income (1,151,159) (310,600) (1,151,159) (310,600) Net cash outflow from investing activities (688,590) (2,593,554) (708,229) (3,171,593) Cash flows from financing activities - - - - Net increase/(decrease) in cash held (2,120,659) (3,553,011) (1,340,566) (2,963,819) Cash and cash equivalents at the beginning of the year 3,201,903 6,754,914 2,183,171 5,146,990 Cash and cash equivalents at the end of the year 6 1,081,244 3,201,903 842,605 2,183,171 The statements of cash flows should be read in conjunction with the attached notes. Page 4
Notes to and forming part of the financial statements 1. Corporate Information The financial statements comprise the consolidated group of AgForce Queensland Industrial Union of Employers as an individual parent entity and AgForce Queensland Industrial Union of Employers and controlled entities as a consolidated group. AgForce Queensland Industrial Union of Employers is an association registered under the Industrial Relations Act, formed and domiciled in Australia. 2. Basis of preparation The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards Reduced Disclosure Requirements and Interpretations issued by the Australian Accounting Standards Board and the Industrial Relations Act. AgForce Queensland is a notfor-profit entity for the purpose of preparing the financial statements. a) New and amended standards not yet adopted A number of new standards, amendments and interpretations are effective for annual periods beginning from 1 July 2014 and these have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the financial statements in future periods. b) New and amended standards adopted by the group None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1 July 2013 affected any of the amounts recognised in the current period or any prior period and are not likely to affect future periods. c) Historical cost convention The financial statements have been prepared on the basis of historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied. d) Use of estimates and judgements The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in the following notes: Note 12 provisions 3. Significant accounting policies The accounting policies below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by group entities. Certain comparative amounts have been reclassified to conform with the current year s presentation. a) Basis of consolidation The consolidated financial statements incorporate the assets and liabilities of all controlled entities of AgForce Queensland Industrial Union of Employers as at 30 June 2014 and the results of all controlled entities for the year then ended. AgForce Queensland Industrial Union of Employers are referred to in this financial report as the group or the consolidated entity. A controlled entity is any entity AgForce Queensland Industrial Union of Employers has the power to control the financial and operating policies of so as to obtain benefits from its activities. A list of controlled entities is contained in Note 16 to the financial statements. All controlled entities have a June financial year end. All inter-company balances and transactions between entities in the consolidated group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity. 25 Page 5
3. Significant accounting policies (continued) a) Basis of consolidation (continued) Where controlled entities have entered or left the consolidated group during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased. Investments in controlled entities are accounted for at cost in the financial statements of AgForce Queensland Industrial Union of Employers. b) Revenue recognition Revenue is recognised when the entity is legally entitled to the income and the amount can be quantified with reasonable accuracy. Revenues are recognised net of the amounts of goods and services tax (GST) payable to the Australian Taxation Office. Membership levies Membership levies are recognised over the applicable membership period. Government funding The groups project activity is supported by grants received from the federal, state and local governments. Grants received on the condition that specified services are delivered, or conditions are fulfilled, are considered reciprocal. Such grants are initially recognised as a liability and revenue is recognised as services are performed or conditions fulfilled. Revenue from non-reciprocal grants is recognised when received. Sales of goods and services Revenue from sales of goods is recognised when the control of goods passes to the customer. Revenue from the rendering of a service is recognised upon the delivery of the service to customers/members. Brokerage commission Commissions are recognised on the effective commencement or renewal dates of the related policies and when the consolidated group is not required to render any further service. Revenue from Investment portfolio The revenue from the investment portfolio comprises interest and dividends. Dividend income is recognised in the income statement at ex-dividend date and all other income is recognised on an accruals basis. Donations Donations are recognised when received. Asset sales The gain or loss on disposal of all non-current assets and available-for-sale financial assets is determined as the difference between the carrying amount of the asset at the time of the disposal and the net proceeds on disposal. c) 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. Bank overdrafts are shown within short-term borrowings in current liabilities in the statement of financial position. d) Trade and other receivables Trade receivables, which comprise amounts due from sales of merchandise and from services provided to members and customers, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. Normal terms of settlement vary from 7 to 90 days. The notional amount of the receivable is deemed to reflect fair value. They are presented as current assets unless collection is not expected for more than 12 months after the reporting date. An allowance for doubtful debts is made when there is objective evidence that the company will not be able to collect the debts. Bad debts are written off when identified. Page 6
3. Significant accounting policies (continued) e) Property, plant and equipment Bases of measurement of carrying amount Property, plant and equipment are measured on the cost basis less accumulated depreciation and impairment losses. The carrying amount of property, plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. An asset s carrying amount is written down immediately to its recoverable amount if the asset s carrying amount is greater than its estimated recoverable amount. 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 consolidated group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. Depreciation Land is not depreciable. The depreciable amount of all fixed assets and capitalised leased assets is depreciated diminishing value basis over their useful lives to the consolidated group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Buildings 2.5% Depreciation Rate Plant and equipment 18.75% 40% Leased plant and equipment 25% 60% The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of the reporting period. Derecognition and disposal Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the profit or loss. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings. f) Investments and other financial assets All investments and other financial assets are initially stated at cost, being the fair value of consideration given plus acquisition costs. Purchases and sales of investments are recognised on trade date which is the date on which the Group commits to purchase or sell the asset. Accounting policies for each category of investments and other financial assets subsequent to initial recognition are set out below. (i) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group has the positive intention and ability to hold-to-maturity and are measured at amortised cost subsequent to initial recognition using the effective interest method. If the Group were to sell other than an insignificant amount of held-to-maturity investments, the whole category is then reclassified as available-for-sale. Page 7
3. Significant accounting policies (continued) f) Investments and other financial assets (continued) (ii) Available-for-sale financial assets Available-for-sale financial assets comprise investments in listed and unlisted entities and any nonderivatives that are not classified as any other category of financial assets, and are classified as noncurrent assets (unless management intends to dispose of the investment within 12 months of the end of the reporting period). After initial recognition, these investments are measured at fair value with gains or losses recognised in other comprehensive income (available-for-sale investments reserve). Where there is a significant or prolonged decline in the fair value of an available-for-sale financial asset (which constitutes objective evidence of impairment) the full amount including any amount previously charged to other comprehensive income is recognised in profit or loss. Purchases and sales of available-for-sale financial assets are recognised on settlement date with any change in fair value between trade date and settlement date being recognised in other comprehensive income. On sale, the amount held in availablefor-sale reserves associated with that asset is recognised in profit or loss as a reclassification adjustment. Interest on corporate bonds classified as available-for-sale is calculated using the effective interest rate method and is recognised in finance income in profit or loss. Reversals of impairment losses on equity instruments classified as available-for-sale cannot be reversed through profit or loss. Reversals of impairment losses on debt instruments classified as available-for-sale can be reversed through profit or loss where the reversal relates to an increase in the fair value of the debt instrument occurring after the impairment loss was recognised in profit or loss. The fair value of quoted investments are determined by reference to Securities Exchange quoted market bid prices at the close of business at the end of the reporting period. For investments where there is no quoted market price, fair value is determined by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of the investment. (iii) Investment in Subsidiaries Investments in subsidiaries are accounted for in the consolidated financial statements as described in note 1(a) and in the parent entity financial statements at cost in accordance with the cost alternative permitted in separate financial statements under AASB 127 Consolidated and Separate Financial Statements. g) Trade and other payables These amounts represent liabilities for goods and services provided to the consolidated group prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. h) Provisions Provisions are recognised when the consolidated group 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. i) Employee benefits Employee benefits comprise wages and salaries, annual, non-accumulating sick and long service leave, and contributions to superannuation plans. Liabilities for wages and salaries expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees services up to the reporting date. Liabilities for annual leave in respect of employees services up to the reporting date which are expected to be settled within 12 months of the reporting date are recognised in the provision for annual leave. Both liabilities are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for nonaccumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable. Page 8
3. Significant accounting policies (continued) i) Employee benefits (continued) The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to anticipated future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting date, regardless of when actual settlement is expected to occur. j) Leased assets and liabilities Operating leases Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. Finance leases Finance leases, which transfer to the company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as an expense in profit or loss. The fair value of the leases is estimated as the present value of future cash flows, discounted at market interest rates. The carrying value of the leases is considered a reasonable reflection of fair value. Capitalised leased assets are depreciated over the estimated useful life of the asset. k) Taxation Income Tax AgForce Queensland Industrial Union of Employers Management annually assess the entity as being exempt from income tax under section 50-40 of the Income Tax Assessment Act 1997 as the entity is established for the purpose of promoting the development of Australian agricultural resources. Controlled entities The charge for current income tax expense is based on the profit for the year adjusted for any nonassessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the end of the reporting period. Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in the other comprehensive income or directly in equity, respectively. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the Page 9
3. Significant accounting policies (continued) k) Taxation (continued) consolidated group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. 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 which case it is recognised as part of the cost of acquisition of an asset or as part of an item of expense. Receivables and payables are recognised inclusive of GST. The net amount of GST recoverable from or payable to the Australian Taxation Office is included as part of receivables or payables. Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from or payable to the Australian Taxation Office is classified as operating cash flows. l) Impairment of assets At each reporting date, the consolidated group reviews the carrying values 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 to sell and value in use, is compared to the asset s carrying value. Any excess of the asset s carrying value over its recoverable amount is expensed to profit or loss. Impairment testing is performed annually for goodwill and intangible assets with indefinite lives. Where it is not possible to estimate the recoverable amount of an individual asset, the consolidated group estimates the recoverable amount of the cash-generating unit to which the asset belongs. The consolidated group assesses impairment at each reporting date by evaluating conditions specific to the consolidated group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates. Page 10
4. Revenue, other income and expenses Consolidated Group Parent Entity 2014 2013 2014 2013 $ $ $ $ The net profit for the year has been determined after including the following items a. Revenue Membership levies 1,805,544 1,886,839 1,805,544 1,886,839 Commissions 966,026 936,903 966,026 936,903 Merchandise sales 138,363 203,480 - - Total revenue 2,909,933 3,027,222 2,771,570 2,823,742 Interest 150,824 226,397 127,079 173,700 Dividends 48,225 43,212 48,225 43,212 Rent Controlled entities - - 67,229 38,691 Other 430,572 528,252 430,572 528,252 Grain harvest management scheme 174,810 213,300 174,810 213,300 Administration fees 80,341 73,409 212,049 243,555 AgForward program funding 1,281,925 1,618,643 - - Training fees 153,980 132,796 153,980 136,846 Conference fees 29,622 31,045 30,398 31,045 Distributions received 36,298 85,961 36,298 85,961 Sponsorship and grants 1,652,265 1,585,759 1,815,470 1,791,850 Other 51,527 65,762 51,345 65,927 4,090,389 4,604,536 3,147,455 3,352,339 Total revenue 7,000,322 7,631,758 5,919,025 6,176,081 b. Other income Net gain on disposal of property, plant and equipment 887,809 61,983 867,818 - Total other income 887,809 61,983 867,818 - Page 11
4. Revenue, other income and expenses (continued) Consolidated Group Parent Entity 2014 2013 2014 2013 $ $ $ $ The net profit for the year has been determined after including the following items c. Expenses Cost of sales 120,591 174,745 - - Depreciation - Buildings 161,510 49,918 161,510 49,918 - Plant & Equipment 231,345 221,971 199,578 141,418 Rental expense operating lease 33,124 185,001 31,971 107,569 Commissions paid - - - - Insurance expense 48,359 47,574 46,321 32,065 Utilities 86,228 41,905 86,228 39,563 Defined contribution superannuation expense 266,171 268,274 219,859 196,705 Net loss on disposal of property, plant and equipment - 28,057-28,057 5. Income tax expense a. The components of tax expense comprise: Current tax - - - - Deferred tax - - - - - - - - Page 12
5. Income tax expense (continued) Note Consolidated Group Parent Entity 2014 2013 2014 2013 $ $ $ $ b. Prima facie tax on profit/(loss) before income tax is reconciled to the income tax as follows: Prima facie tax payable on profit/(loss) income tax at 30% (2011: 30%) 58,570 (5,701) 53,429 (2,865) Tax exempt net income (53,429) 2,865 (53,429) 2,865 Non allowable items 3,005 (8,209) - - Underprovision for change to prior year application of tax losses Tax losses carried forward for which no deferred tax asset has been recognised 9,550 - - - (17,696) 11,045 - - Income tax expense - - - - c. Tax Losses Unused tax losses for which no deferred tax asset has been recognised 70,703 129,691 - - Potential tax benefit @ 30% 21,211 38,907 - - 6. Cash and cash equivalents Cash at bank and in hand 850,311 2,192,365 842,605 2,183,171 Restricted cash held (short term deposit) AgForward funding (a) 230,933 1,009,538 - - 1,081,244 3,201,903 842,605 2,183,171 a) AgForward Services Pty Ltd, a wholly owned controlled entity of the Parent Entity has entered into program agreements with the Queensland Government to undertake and deliver various extension education and information delivery programs to primary producers in Queensland. To 30 June 2014, AgForward has met all contracted milestones. In accordance with the terms of the program agreement, AgForward is restricted to utilise this funding for the delivery of the extension activities. Page 13
7. Trade and other receivables Note Consolidated Group Parent Entity 2014 2013 2014 2013 $ $ $ $ Trade receivables 254,823 31,350 - - Other receivables Subsidiaries - - 48,453 59,453 Other 583,306 442,795 671,643 537,216 838,129 474,145 720,096 596,669 Other receivables includes commissions of $267,761 (2013: $313,829), grants $164,513 (2013: $93,786) sponsorships $55,500 (2013: $27,775) and Rent $58,575 (2013: NIL). 8. Other Financial assets Current other financial assets Held-to-maturity investments Term deposits 3(f) 900,118 152,262 855,000 105,000 Non-current financial assets Available-for-sale financial assets 3(f) Unlisted Investments at fair value Units in NFF House (a) 243,696 239,659 243,696 239,659 Listed Investments at fair value Shares in other entities (b) 1,654,803 898,587 1,654,803 898,587 Subordinated Notes 987,859 510,600 987,859 510,600 Total available-for-sale financial assets 2,886,358 1,648,846 2,886,358 1,648,846 Other financial assets Investments in subsidiaries 3(f) - - 123 123 a) The parent entity holds 86 units (representing approximately 5%) of the units in NFF House Trust which owns the NFF House property in Canberra. These units are held at fair value based on the net assets of the Trust. These assets are substantially represented by the NFF House property which is measured at fair value based on an independent valuation. b) Investments in equity instruments and substantiated notes are classified as at fair value through other comprehensive income. Fair value is based on quoted market prices at the end of the reporting period. 9. Other current assets Prepayments 42,065 73,388 42,065 63,174 42,065 73,388 42,065 63,174 Page 14
Consolidated Group Parent Entity 2014 2013 2014 2013 $ $ $ $ 10. Property, Plant and Equipment Freehold land at cost 2,099,704 2,099,704 2,099,704 2,099,704 Buildings At cost 3,082,511 3,870,641 3,082,511 3,870,641 Accumulated depreciation (518,754) (581,649) (518,754) (581,649) 2,563,757 3,288,992 2,563,757 3,288,992 Plant and equipment At cost 1,595,467 1,550,233 1,250,150 1,163,614 Accumulated depreciation (707,245) (656,645) (412,414) (348,530) 888,222 893,588 837,736 815,084 Total property, plant and equipment 5,551,683 6,282,284 5,501,197 6,203,780 Movements in carrying amounts Movement in the carrying amounts for each class of plant and equipment between the beginning and the end of the current financial year Consolidated group: Land Buildings Plant and Equipment Total $ $ $ $ Balance at 1 July 2013 2,099,704 3,288,992 893,588 6,282,284 Additions - 33,018 279,291 312,309 Disposals - (596,743) (53,312) (650,055) Depreciation expense - (161,510) (231,345) (392,855) Carrying amount at 30 June 2014 2,099,704 2,563,757 888,222 5,551,683 Parent Entity: Balance at 1 July 2013 2,099,704 3,288,992 815,084 6,203,780 Additions 33,018 275,542 308,560 Disposals - (596,743) (53,312) (650,055) Depreciation expense - (161,510) (199,578) (361,088) Carrying amount at 30 June 2014 2,099,704 2,563,757 837,736 5,501,197 Page 15
11. Trade and other payables Note Consolidated Group Parent Entity 2014 2013 2014 2013 $ $ $ $ Current Trade payables and accrued expenses 473,210 500,594 409,559 449,018 Supplier contracts 12,170 8,591 12,170 8,591 Trade payables and accrued expenses 485,380 509,185 421,729 457,609 Non Current Supplier contracts 9,352 16,466 9,352 16,466 AgForce Queensland entered into a supplier agreement for the supply of telecommunication equipment. A loyalty bonus was attached to this agreement which must be repaid on a pro-rated basis if supply is changed to alternate providers at any time during a 36 month period from June 2013. 12. Provisions Current Employee benefits 3(h) 239,992 259,414 199,951 223,610 Non Current Employee benefits 3(h) 71,518 46,834 47,078 29,834 311,510 306,248 247,029 253,444 13. Other liabilities Current Rent received in advance 1,270 8,533 1,270 8,533 Other income received in advance 755,712 861,718 755,712 861,718 Membership levies received in advance 820,539 813,793 820,539 813,793 AgForward funding received in advance 6(a) 419,311 1,040,114 - - Native title funds - 15,150-15,150 Conference income received in advance - 46,687-46,687 1,996,832 2,785,995 1,577,521 1,745,881 Page 16
14. Reserves Consolidated Group Parent Entity 2014 2013 2014 2013 $ $ $ $ Available-for-sale reserve 226,860 140,505 226,860 140,505 General reserve 112,004 112,004 112,004 112,004 Industrial and landholders reserve 150,000 150,000 150,000 150,000 Movements Available-for-sale reserve 488,864 402,509 488,864 402,509 Balance at the beginning of the financial year 140,505 (8,985) 140,505 (8,985) Changes in fair value of available-for-sale financial assets 86,355 149,490 86,355 149,490 Balance at the end of the financial year 226,860 140,505 226,860 140,505 There were no movements in either the general reserve or industrial and landholders reserve in 2013 and 2014. Asset revaluation reserve This reserve records the movement in the fair value of financial assets at fair value through other comprehensive income. General reserve This reserve has been established to set aside funds for other future costs. Industrial and landholders reserve This reserve has been established to set aside funds for future costs relating to industrial law and land disputes. 15. Capital and leasing commitments Operating lease commitments The parent entity and subsidiaries has previously entered into commercial leases of land and buildings and office equipment. These leases had an average life of three to five years with no renewal option included in the contracts. These leases are due to end in July 2014. Future minimum rentals payable under non-cancellable operating leases as at the reporting date are: Within one year - 15,180-15,180 After one year but no more than five years - - - - Total commitments under operating leases - 15,180-15,180 Page 17
16. Related parties and related party transactions a. Controlled entities Parent Entity Country of Incorporation Percentage Owned (%) 2014 2013 AgForce Queensland Industrial Union of Employers Australia - - Subsidiaries of AgForce Queensland Industrial Union of Employers: AgForce Enterprises Pty Ltd Australia 100% 100% AgForward Services Pty Ltd Australia 100% 100% AgForce Developments Pty Ltd Australia 100% 100% United Graziers Association Pty Ltd Australia 100% 100% The Cattleman s Union of Australia Pty Ltd Australia 100% 100% Queensland Graingrowers Association Pty Ltd Australia 100% 100% Consolidated Group Parent Entity 2014 2013 2014 2013 b. Related party transactions $ $ $ $ Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated Rent paid to the parent entity by AgForward Services Pty Ltd - - 67,229 38,691 Management fee payments to the parent entity by AgForward Services Pty Ltd - - 163,205 206,091 Project recovery charges to the parent by AgForward Services Pty Ltd - - 98,583 189,461 Project recovery charges to the parent by AgForce Enterprises - - 11,504 17,800 Membership levies paid by key management personnel 10,834 13,120 10,834 13,120 Page 18
Consolidated Group Parent Entity 2014 2013 2014 2013 $ $ $ $ c. Key management personnel compensation Key management personnel compensation 596,723 709,078 596,723 709,078 17. Events after the balance sheet date Since the end of the financial year, there have been no material post balance date events which could affect the statements of comprehensive income or the statements of financial position. Page 19
ACCOUNTING OFFICER S CERTIFICATE I, C Rolfe, being the Officer responsible for keeping the accounting records of AgForce Queensland Industrial Union of Employers ( AgForce ), declare that: 1. As at 30 June 2014 the number of financial members of AgForce was 4,644 (2013: 4,955). There were no non-financial members recorded as at 30 June 2014 (2013: NIL). 2. The attached financial report gives a true and fair view of the financial affairs of AgForce for the year ended 30 June 2014. 3. A record has been kept of all moneys paid by, or collected from, members of AgForce and all moneys so paid or collected have been credited to the bank account to which those moneys are to be credited, in accordance with the rules of AgForce. 4. Before expenditure was incurred by AgForce it was approved under the rules of AgForce. 5. There were no payments made from special funds for purposes other than those for which the funds were operated. 6. All loans or other financial benefits, if any, granted to AgForce employees and officers were authorised in accordance with the rules of AgForce. 7. A register of members of AgForce was kept under the Industrial Relations Act. Signature: Treasurer Date: 10 September 2014 Page 20
MANAGEMENT COMMITTEE CERTIFICATE The members of the Management Committee of AgForce Queensland Industrial Union of Employers ( AgForce ), declare that: 1. The attached financial report and notes: (a) give a true and fair view of the financial affairs of AgForce for the year ended 30 June 2014; (b) have been prepared in accordance with the Industrial Relations Act. 2. In the opinion of the members of the Management Committee, AgForce was solvent during the year ended 30 June 2014. Furthermore, there are reasonable grounds to believe that AgForce will be able to pay its debts as and when they become due and payable. 3. The Management Committee meetings were held during the year ended 30 June 2014 under the rules of AgForce. 4. To the knowledge of the members of the Management Committee, there have been no instances where records of AgForce or other documents, or copies of them, have not been furnished to, or made available to, members in accordance with the requirements of the Industrial Relations Act, the Industrial Organisations Regulation, or the rules of AgForce. 5. The prior year audit report and accounts were presented at the last Annual General Meeting and have been given to members as required. This declaration is made in accordance with a resolution of the Management Committee. General President Treasurer Date: 10 September 2014 Page 21
Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia INDEPENDENT AUDITOR S REPORT To the members of AgForce Queensland Industrial Union of Employers Report on the Financial Report We have audited the accompanying financial report of AgForce Queensland Industrial Union of Employers (the parent entity) and AgForce Queensland Industrial Union of Employers and its controlled entities, which comprises the statements of financial position as at 30 June 2014, the statements of comprehensive income, the statements of changes in equity and the statements of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, the Accounting Officer s certificate and the Management Committee s certificate of the consolidated entity comprising the company and the entities it controlled at the year s end or from time to time during the financial year. Management Committee s Responsibility for the Financial Report The Management Committee are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards Reduced Disclosure Requirements and the Industrial Relations Act, and for such internal control as the Management Committee determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Management Committee, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
Independence In conducting our audit, we have complied with the independence requirements of the Australian professional accounting bodies. Opinion In our opinion the financial report of AgForce Queensland Industrial Union of Employers is in accordance with the Industrial Relations Act, including: (a) giving a true and fair view of the parent entity s and the consolidated entity s financial position as at 30 June 2014 and of its performance for the year ended on that date; and (b) complying with Australian Accounting Standards Reduced Disclosure Requirements; and (c) the parent entity kept satisfactory accounting records for the financial year, including records of the sources and nature of the parent entity s income and the nature and reasons for the parent entity s expenditure; and (d) the parent s financial disclosure statement and mid-year disclosure statement for the year were prepared in accordance with the Industrial Relations Act; and (e) the parent entity has the policies it is required to have under section 553A(1); and (f) all information and explanations required from the parent entity s officers or employees was given. BDO Audit Pty Ltd P A Gallagher Director Brisbane, 10 September 2014 BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.