FULL FINANCIAL REPORT 2015/16 - Grain Trade Australia GTA/GTA... · FULL FINANCIAL REPORT 2015/16 ... Independent Audit Report 27. Grain Trade Australia Ltd ... Former GAFTA Council

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Grain Trade Australia LtdABN 70 979 095 411

Financial Statements

For the Year Ended 30 June 2016

Grain Trade Australia Ltd

ABN 70 979 095 411

ContentsFor the Year Ended 30 June 2016

Page

Financial Statements

Directors' Report 1Auditors Independence Declaration under Section 307C of the Corporations Act 2001 7Statement of Profit or Loss and Other Comprehensive Income 8Statement of Financial Position 9Statement of Changes in Equity 10Statement of Cash Flows 11Notes to the Financial Statements 12Directors' Declaration 26Independent Audit Report 27


ABN 70 979 095 411

Directors' ReportFor the Year Ended 30 June 2016

The directors present their report on Grain Trade Australia Ltd for the financial year ended 30 June 2016.

1. General information

Information on directors

The names of each person who has been a director during the year and to the date of this report are:

Peter Reading

Qualifications B.Sc. (Hons) Agricultural Science, University of Sydney

Experience Currently Independent Director of Batlow Apples Co Op.Director of Botanical Resources of Australia. Former Executive Chairman, Canola Breeders, Managing Director ofGRDC and Grain Pool WA

Category nomination Special Qualifications - Board appointment

Special responsibilities GTA Board ChairmanChair - Governance Committee Member - Audit, Finance & Remuneration Committee

Geoffrey E Farnsworth

Qualifications Bachelor of Law, Bachelor of Arts

Experience Partner - Holding Redlich

Category nomination Special Qualifications - Board appointment

Special responsibilities Chair - Dispute Resolution Service CommitteeMember - Membership & Governance CommitteesLegal Counsel to Grain Trade Australia Ltd

Andrew Goyder

Experience Managing Director - Grain Link WA, established 1999.GTA Approved ArbitratorPreviously involved in Seed Industry and Export Canola with SGBAustralia and Grain Pool WA as regional manager - southern WA.Previously held positions on the boards of NACMA WA, CBH andGIWA.

Category nomination Ordinary Level C

Special responsibilities Member - Membership & AGIC Committees

Allan N Johns Resigned 27 October 2015

Malcolm Finlayson

Qualifications Bachelor of Business Studies, MBA, CPA, MAICD

Experience Director - Finesse Solutions Pty Ltd, Plant Health Australia Ltd andWheat Quality Australia Ltd. Former director of Pentag Nidera Pty Ltd , director and CFO - JosscoGroup & CFO - DR Johnston Group

Category nomination Ordinary Level B

Special responsibilities Chair - Audit, Finance & Remuneration CommitteeMember - AGIC Committee

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1. General information continued

Information on directors continued

Patrick O’Shannassy

Qualifications B. Appl Science (Agriculture), Grad.Dip. Applied Finance &Investment

Experience Trading Manager - Bunge Agribusiness Aust P/LPreviously held roles with AWB - export pools, global markets andgrower services; Noble Australia, NZX and NAB - trading, sales andmanagement.Formerly a director of AGEA and member of Commodity MarketsCouncil (USA).

Category nomination Ordinary Level B

Special responsibilities Chair - Standards CommitteeMember - Membership & AGIC Committees

B. Agricultural Economics (Honours)

Rebecca Reardon Qualifications Experience Joint manager – DW & RG Reardon Farming.

GTA Approved ArbitratorFormerly held trading and management roles with GrainCorp, Jossco,ABB Grain/Viterra and Special One Grain.Holds position on the Executive Council NSW Farmers Associationand is deputy chair of their Grains Committee.

Category nomination Special Qualifications – Board Appointment

Special responsibilities Member - Commerce, Governance & Dispute Resolution Committees

John Warda

Qualifications MAICD

Experience Director - Global Supply Chain, Emerald Grain.Formerly held senior management and executive roles in operationsand logistics with ABB Grain/Viterra, Joe White Maltings.

Category nomination Ordinary Level A

Special responsibilities Chair – Transport, Storage & Ports Committee

Michael Wood

Qualifications Diploma - Applied Science (Agriculture)

Experience Managing Director, Rural Logic (Australia)Active member of the Australian Grains Industry for over 20 years.Founding Manager in 1990 of Stockfeed Company James & Son(Australia) - established successful operations in Victoria, Tasmania,South Australia and Argentina. Other grain industry roles - ABB Victorian State Manager (5 yrs) andGrains Manager for International Malting Company (2005/2006). Former President of Grains Industry Association of Victoria (2012-2015). Active committee member of GIAV since 2006.

Category nomination Merchant Association

Special responsibilities Chair - Membership CommitteeMember - Governance Committee

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Information on directors continued

Guy H Allen

Qualifications Bachelor of Science in Agriculture (University of Illinois) LicensedFutures Broker (ASFL)

Experience Principal - Advance Trading Australasia. Grain Manager - LouisDreyfus, US & China. Consultant to development of NACMA TradeRules & Dispute Resolution Service. Current GTA Arbitrator.

Category nomination Merchant Association

Special responsibilities Chair - Commerce CommitteeMember - Dispute Resolution Committee

Robert Imray

Qualifications Bachelors Degree in Business, Graduate Diploma in Accounting andMasters Degree in Business (International Business)

Experience Managing Director - Farmarco Australia, 25 years experience incommodities, both physical & derivative markets, four years with TheSugar Board - Domestic Marketing and Treasury

Category nomination

Special responsibilities

Merchant Association

Chair – GM Grain & Seed Industry Consultative Committee Member – Audit, Finance & Remuneration Committee

Jason Craig Appointed 27 October 2015

Qualifications B. Commerce (Banking & Finance), Post Graduate Diploma ASIA(Treasury Stream)

Experience General Manager (Marketing & Trading) – CBH Group, 20 yearsexperience. Commenced career with Grain Pool (now part of CBHGroup) in WA, including 4 years in Indonesia as President Director ofPT Eastern Pearl Flour Mills. Former GAFTA Council Member andcontinues to act as a Director for a number of CBH subsidiaries.

Category nomination Ordinary Level A

Special responsibilities Chair – Trade & Market Access Committee

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

Principal activities

The principal activities of Grain Trade Australia Ltd during the financial year were focused on the provision of servicesand products to ‘facilitate trade”. These are referred to as “core activities” and include.

- development, review and publication of grain trading standards for the Australian grain industry

- development, review and publication of contracts and trade rules

- conduct of a Dispute Resolution Service

- conduct of a training and development program

- actively engaging in trade and market access activities

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Principal activities continued

Supporting activities include:

Industry support services – services where GTA is able to add value to a GTA members business by engaging inactivities such as advocacy to government and related commercial organisations on issues that have broad industryagreement.

Industry support products acting as conference organiser for the Australian Grains Industry Conference.

No significant changes in the nature of the Company's activities occurred during the financial year.

Short and long term objectives of the Company

Grain Trade Australia ("GTA") is the focal point for the commercial grains industry within Australia. GTA facilitatestrade and works to provide an efficient, equitable and open trading environment by providing leadership, advocacy andcommercial services to the Australian grain value chain.

This vision maps out a direction for GTA and is aligned to the needs of a $10 billion grains industry. Inrecent times, GTA has focussed on trade facilitation. The strategic objectives also detail additional servicesand products that are required by industry and government that demonstrate an industry that iscommercially self-reliant and which can regulate its activities.

The Company's strategy for achieving objectives

GTA will continually review the products & services that allow “trade facilitation” to ensure they reflect the commercialgrain trading environment. This will occur via input from the GTA Technical Committees, members and the broadergrains industry. The review process will be public, transparent and open to all.

GTA will engage in the provision of services that support the core GTA activities of “trade facilitation.”

GTA will only provide industry support services where there is widespread member support. Industry support serviceswill not advantage or disadvantage the commercial positions of any one industry sector over another.

GTA will engage in the provision of products that support the core GTA activities of “trade facilitation.” Industry supportproducts will be offered by GTA to members at a fair market rate that encourages participation at the same time asreturning a reasonable return on funds invested by GTA.

GTA’s profile is recognised as an industry communicator by Government, media, financial institutions, other industryorganisations and members. The industry is seen as transparent, collaborative and supportive of entrepreneurship.GTA will via various communication mediums disseminate its commercial resources and other material related to“facilitation of trade” to members and non members. This also relates to international sectors of the grain industry.

GTA has made an undertaking to the Australian grain industry to provide services and products to enable “tradefacilitation”. This can only occur if the services and products are subject to constant review to ensure they reflectactual trade requirements. The review process must follow due process.

How the principal activities assisted in achieving the Company's objectives

The core and supporting activities are all directly aligned to the short and long term objectives via the deliberations ofthe GTA Technical Committees which comprise industry specialists who ensure that the outcomes of the Committeeare an accurate reflection of the commercial activities that occur across the Australian grain industry.

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The Company's method of measuring its performance, including any key performance indicators used by the

Company

Critical performance indicators include:

Total membership and membership by industry sector, geographical location and size

Financial outcomes.

Key performance indicators include:

Harmonised trading products and services – so that trading risks are lowered, capital is attracted, and

transparency is enhanced

Suite of tools to enable trade to occur efficiently and seamlessly – low cost transactions are critical to maintain

global value chain competitiveness

Training and development program that enhances the skills of industry participants – other industries and

countries are competing for skilled human resources; GTA must deliver programs to encourage and promote

skills improvement

Knowledge sharing – communicating the grain industry and GTA vision is critical to garnering the support

required for growth

Funds and Resources for GTA to deliver the outcomes – this growth in industry services and communication

cannot be met without a step change and sustained increase in GTA funding and revenue streams

Partnerships/linkages with industry stakeholders, Government and agencies, and international counterparts –

members alone cannot fund the entire service load. Partnering will be an important component of success.

Members guarantee

Grain Trade Australia Ltd is a company limited by guarantee. In the event of, and for the purpose of winding up of thecompany, the amount capable of being called up from each members and any person or association who ceased to bea member in the year prior to the winding up is limited to $ 100 for each member, subject to the provisions of theCompany's constitution.

At 30 June 2016 the collective liability of members was $ 27,700 (2015: $ 26,900).

2. Other items

Future developments and results

Likely developments in the operations of the Company and the expected results of those operations in future financialyears have not been included in this report as the inclusion of such information is likely to result in unreasonableprejudice to the Company.

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Statement of Profit or Loss and Other Comprehensive IncomeFor the Year Ended 30 June 2016

Note

2016

$

2015

$

Revenue 4 2,024,746 1,920,126

Employee benefits expense (706,723) (705,292)

Diploma of grain management - (58,886)

Depreciation and amortisation expense (10,586) (11,701)

Direct expenses - Conference (651,789) (607,692)

Direct expenses - Training & Development Program (176,146) (97,024)

Direct expenses - Arbitration (10,050) (18,152)

Direct expenses - Publications (7,117) (5,285)

Rental lease costs (65,000) (48,741)

Consultancy fees (31,355) (56,620)

Legal expenses (13,989) (9,907)

Printing and stationery (24,324) (25,982)

Travel and accommodation (136,086) (133,544)

Special projects (75,648) (109,352)

Website development (28,795) (3,801)

WQA expenses (5,069) (4,923)

Other expenses (105,775) (147,087)

Deficit before income tax (23,706) (123,863)

Income tax expense 2(b) - -

Deficit for the year (23,706) (123,863)

Other comprehensive income for the year - -

Total comprehensive income for the year (23,706) (123,863)

The accompanying notes form part of these financial statements.8


ABN 70 979 095 411

Statement of Financial PositionAs At 30 June 2016

Note

2016

$

2015

$

ASSETS

CURRENT ASSETS

Cash and cash equivalents 5 393,385 440,381

Trade and other receivables 6 218,675 223,949

Other financial assets 7 629,800 529,800

Other assets 8 386,178 274,255

TOTAL CURRENT ASSETS 1,628,038 1,468,385

NON-CURRENT ASSETS

Property, plant and equipment 9 17,473 26,310

TOTAL NON-CURRENT ASSETS 17,473 26,310

TOTAL ASSETS 1,645,511 1,494,695

LIABILITIES

CURRENT LIABILITIES

Trade and other payables 10 194,002 124,737

Provisions 12 17,425 37,883

Income in advance 11 602,358 468,371

TOTAL CURRENT LIABILITIES 813,785 630,991

NON-CURRENT LIABILITIES

Provisions 12 11,398 19,670

TOTAL NON-CURRENT LIABILITIES 11,398 19,670

TOTAL LIABILITIES 825,183 650,661

NET ASSETS 820,328 844,034

EQUITY

Retained earnings 820,328 844,034

TOTAL EQUITY 820,328 844,034



ABN 70 979 095 411

Statement of Changes in EquityFor the Year Ended 30 June 2016

2016

RetainedEarnings

$

Total

$

Balance at 1 July 2015 844,034 844,034


Balance at 30 June 2016 820,328 820,328

2015

RetainedEarnings

$

Total

$

Balance at 1 July 2014 967,897 967,897


Balance at 30 June 2015 844,034 844,034



ABN 70 979 095 411

Statement of Cash FlowsFor the Year Ended 30 June 2016

Note

2016

$

2015

$

CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers 2,350,626 2,017,061

Payments to suppliers and employees (2,316,299) (2,230,767)

Interest received 20,620 21,386

Net cash provided by/(used in) operating activities 19 54,947 (192,320)

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from disposal of property, plant andequipment 528 -

Purchase of property, plant and equipment (2,471) (10,432)

Additions to held to maturity investments (100,000) (199,250)

Net cash used in investing activities (101,943) (209,682)

Net decrease in cash and cash equivalents held (46,996) (402,002)

Cash and cash equivalents at beginning of year 440,381 842,383

Cash and cash equivalents at end of financial year 5 393,385 440,381



ABN 70 979 095 411

Notes to the Financial StatementsFor the Year Ended 30 June 2016

The financial report covers Grain Trade Australia Ltd as an individual entity. Grain Trade Australia Ltd is a not-for-profitCompany limited by guarantee, incorporated and domiciled in Australia.

The financial report was authorised for issue by the Directors on............................................. .

1 Basis of preparation

Grain Trade Australia Ltd applies Australian Accounting Standards – Reduced Disclosure Requirements as set out inAASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010-2: Amendments to AustralianAccounting Standards arising from Reduced Disclosure Requirements.

The financial statements are general purpose financial statements that have been prepared in accordance with theAustralian Accounting Standards - Reduced Disclosure Requirements of the Australian Accounting Standards Boardand the Corporations Act 2001. The Company is a not-for-profit entity for financial reporting purposes under AustralianAccounting Standards.

The financial statements, except for the cash flow information, have been prepared on an accruals basis and arebased on historical costs, modified, where applicable, by the measurement at fair value of selected noncurrent assets,financial assets and financial liabilities. The amounts presented in the financial statements have been rounded to thenearest dollar.

2 Summary of significant accounting policies

(a) Principles for consolidation

50% interest in Wheat Quality Australia Ltd (WQA), a company limited by guarantee has been considered as astrategic investment, with the intention of maintaining a long term operating relationship. Equity method ofaccounting under AASB 128, proportionate consolidation or the equity method under AASB 131 has beenconsidered as inappropriate due to the not-for-profit nature of WQA operations. Therefore the interest in WQAhas been recorded at fair value under AASB 139 (See Note 20).

(b) Income tax

No provision for income tax has been raised as the Company is exempt from income tax under Division 50 ofthe Income Tax Assessment Act 1997.

(c) Revenue and other income

Revenue is recognised when the amount of the revenue can be measured reliably, it is probable that economicbenefits associated with the transaction will flow to the Company and specific criteria relating to the type ofrevenue as noted below, has been satisfied.

Revenue is measured at the fair value of the consideration received or receivable and is presented net ofreturns, discounts and rebates.

Non-reciprocal grant revenue is recognised in profit or loss when the entity obtains control of the grant and it isprobable that the economic benefits gained from the grant will flow to the entity and the amount of the grant canbe measured reliably.

If conditions are attached to the grant which must be satisfied before the entity is eligible to receive thecontribution, the recognition of the grant as revenue will be deferred until those conditions are satisfied.

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2 Summary of significant accounting policies continued

(c) Revenue and other income continued

When grant revenue is received whereby the entity incurs an obligation to deliver economic value directly backto the contributor, this is considered a reciprocal transaction and the grant revenue is recognised in thestatement of financial position as a liability until the service has been delivered to the contributor; otherwise thegrant is recognised as income on receipt.

Revenue from arbitration is recognised upon completion and issuing of the award. The non refundableadministration fee is recognised as revenue at the time of receipt.

Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.

Interest revenue is recognised using the effective interest method.

All revenue is stated net of the amount of goods and services tax (GST).

(d) Trade and other payables

Trade and other payables represent the liability outstanding at the end of the reporting period for goods andservices received by the Company during the reporting period which remain unpaid. The balance is recognisedas a current liability with the amounts normally paid within 30 days of recognition of the liability.

(e) Goods and services tax (GST)

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), exceptwhere the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payable are stated inclusive of GST.

The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payablesin the statement of financial position.

Cash flows in the statement of cash flows are included on a gross basis and the GST component of cash flowsarising from investing and financing activities which is recoverable from, or payable to, the taxation authority isclassified as operating cash flows.

(f) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which arereadily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

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(g) Impairment of assets

At the end of each reporting period, the Company reviews the carrying values of its tangible and intangibleassets to determine whether there is any indication that those assets have been impaired. If such an indicationexists, the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell andvalue in use, is compared to the asset's carrying value. Any excess of the asset's carrying value over itsrecoverable amount is expensed to the statement of profit or loss and comprehensive income.

Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates therecoverable amount of the cash-generating unit to which the asset belongs.

Where the future economic benefits of the asset are not primarily dependent upon the asset's ability togenerate net cash inflows and when the Company would, if deprived of the asset, replace its remaining futureeconomic benefits, value in use is determined as the depreciated replacement cost of an asset.

(h) Property, plant and equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, anyaccumulated depreciation and impairment losses.

Plant and equipment

Plant and equipment are measured on the cost basis less depreciation and impairment losses. Cost includesexpenditure that is directly attributable to the asset.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess ofthe recoverable amount from these assets. The recoverable amount is assessed on the basis of the expectednet cash flows that will be received from the asset's employment and subsequent disposal. The expected netcash flows have been discounted to their present values in determining recoverable amounts.

Depreciation

The depreciable amount of all fixed assets including capitalised leased assets, is depreciated on a straight-linebasis over the asset's useful life to the Company 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 theestimated useful lives of the improvements.

The depreciation rates used for each class of depreciable asset are shown below:

Fixed asset class Depreciation rate

Office Equipment 20%

Leasehold improvements 33.3%

The assets' residual values, depreciation methods and useful lives are reviewed, and adjusted if appropriate, atthe end of each reporting period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amountis greater than its estimated recoverable amount.

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(i) Financial instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractualprovisions of the instrument. For financial assets, this is the equivalent to the date that the Company commitsitself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transactions costs, except where the instrument isclassified 'at fair value through profit or loss' in which case transaction costs are expensed to profit or lossimmediately.

Classification and subsequent measurement

Financial instruments are subsequently measured at either fair value, amortised cost using the effective interestrate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liabilitysettled, between knowledgeable, willing parties in arm's length transaction. Where available, quoted prices inan active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as:

(a) the amount at which the financial asset or financial liability is measured at initial recognition;

(b) less principal repayments;

(c) plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and

(d) less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant periodand 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 reliablypredicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset orfinancial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carryingvalue with a consequential recognition of an income or expense in profit or loss.

The classification of financial instruments depends on the purpose for which the investments were acquired.Management determines the classification of its investments at initial recognition and at the end of eachreporting period for held-to-maturity assets.

The Company does not designate any interests in subsidiaries, associates or joint venture entities as beingsubject to the requirements of accounting standards specifically applicable to financial instruments.

Financial assets are divided into the following categories which are described in detail below:

(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 purposeof short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to

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(i) Financial instruments continued

Classification and subsequent measurement continuedavoid an accounting mismatch or to enable performance evaluation where a group of financial assets ismanaged by key management personnel on a fair value basis in accordance with a documented riskmanagement or investment strategy. Such assets are subsequently measured at fair value with changes incarrying value being included in profit or loss.

The Company did not hold any financial assets at fair value through profit or loss either in the current orcomparative financial years.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are notquoted in an active market. Gains or losses are recognised in profit or loss through the amortisation processand when the financial asset is derecognised.

Loans and receivables are included in current assets, except for those which are not expected to mature within12 months after the end of the reporting period.

The Company's trade and other receivables fall into this category of financial instruments.

(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed ordeterminable 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 theamortisation process and when the financial asset is derecognised.

Held-to-maturity investments are included in noncurrent assets, except for those which are expected to berealised within 12 months after the end of the reporting period, which will be classified as current assets.

If during the period the Company sold or reclassified more than an insignificant amount of the held-to-maturityinvestments before maturity, the entire held-to-maturity investments category would be tainted and reclassifiedas available-for-sale.

(iv) Available-for-sale financial investments

Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classifiedinto 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 ordeterminable payments.

Available-for-sale financial assets are included in non-current assets, except for those which are expected to berealised within 12 months after the end of the reporting period.

The Company did not have any available-for-sale investments either in the current or comparative financialyears.

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(i) Financial instruments continued

Classification and subsequent measurement continued

(v) Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortisedcost. Gains or losses are recognised in profit or loss through the amortisation process and when the financialliability is derecognised. Fees payable on the establishment of loan facilities are recognised as transactioncosts of the loan.

Impairment

Objective evidence that a financial asset is impaired includes default by a debtor or evidence that the debtor islikely to enter bankruptcy. At the end of each reporting period, the Company assess whether there is objectiveevidence that a financial asset has been impaired through the occurrence of a loss event. In the case ofavailable-for-sale financial instruments, a significant or prolonged decline in the value of the instrument isconsidered to indicate that an impairment has arisen.

Where a subsequent event causes the amount of the impairment loss to decrease (e.g. payment received), thereduction in the allowance account (provision for impairment of receivables) is taken through profit and loss.

Impairment losses are recognised through an allowance account for loans and receivables in the statement ofprofit or loss and comprehensive income.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset istransferred to another party whereby the entity no longer has any significant continuing involvement in the risksand benefits associated with the asset. Financial liabilities are derecognised where the related obligations areeither discharged, cancelled or expired. The difference between the carrying value of the financial liabilityextinguished or transferred to another party and the fair value of consideration paid, including the transfer ofnon-cash assets or liabilities assumed, is recognised in profit or loss.

(j) Employee benefits

Short-term employee benefits

Provision is made for the Company's obligation for short-term employee benefits. Short-term employee benefitsare benefits (other than termination benefits) that are expected to be settled wholly within 12 months after theend of the annual reporting period in which the employees render the related service, including wages, salariesand sick leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paidwhen the obligation is settled.

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(j) Employee benefits continued

Short-term employee benefits continued

Other long-term employee benefits

The Company classifies employees' long service leave and annual leave entitlements as other long-termemployee benefits as they are not expected to be settled wholly within 12 months after the end of the annualreporting period in which the employees render the related service. Provision is made for the company'sobligation for other long-term employee benefits, which are measured at the present value of the expectedfuture payments to be made to employees. Expected future payments incorporate anticipated future wage andsalary levels, durations of service and employee departures, and are discounted at rates determined byreference to market yields at the end of the reporting period on government bonds that have maturity dates thatapproximate the terms of the obligations. Upon the re-measurement of obligations for other long-term employeebenefits, the net change in the obligation is recognised in profit or loss classified under employee benefitsexpense.

The Company's obligations for long-term employee benefits are presented as non-current liabilities in itsstatement of financial position, except where the company does not have an unconditional right to defersettlement for at least 12 months after the end of the reporting period, in which case the obligations arepresented as current liabilities.

(k) Leases

Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor,are charged as expenses on a straight-line basis over the life of the lease term.

(l) New accounting standards for application in future periods

Accounting Standards issued by the AASB that are not yet mandatorily applicable to the Company, togetherwith an assessment of the potential impact of such pronouncements on the Company when adopted in futureperiods, are discussed below:

AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods beginning on

or after 1 January 2018, as deferred by AASB 2015-8: Amendments to Australian Accounting Standards

– Effective Date of AASB 15).

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

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

identify the contract(s) with a customer;

identify the performance obligations in the contract(s);

determine the transaction price;

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(l) New accounting standards for application in future periods continued

allocate the transaction price to the performance obligations in the contract(s); and

recognise revenue when (or as) the performance obligations are satisfied.

Although the directors anticipate that the adoption of AASB 15 may have an impact on the Company’sfinancial statements, it is impracticable at this stage to provide a reasonable estimate of such impact.

AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019)

When effective, this Standard will replace the current accounting requirements applicable to leases inAASB 117: Leases and related Interpretations. AASB 16 introduces a single lessee accounting modelthat eliminates the requirement for leases to be classified as operating or finance leases.

The main changes introduced by the new Standard include:

recognition of right-to-use asset and liability for all leases (excluding short-term leases with less

than 12 months of tenure and leases relating to low-value assets);

depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in

profit or loss and unwinding of the liability in principal and interest components;

variable lease payments that depend on an index or a rate are included in the initial

measurement of the lease liability using the index or rate at the commencement date;

by applying a practical expedient, a lessee is permitted to elect not to separate non-lease

components and instead account for all components as a lease; and

additional disclosure requirements.

The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard tocomparatives in line with AASB 108 or recognise the cumulative effect of retrospective application as anadjustment to opening equity on the date of initial application.

Although the directors anticipate that the adoption of AASB 16 will impact the Company’s financialstatements, it is impracticable at this stage to provide a reasonable estimate of such impact.

3 Critical accounting estimates and judgments

The directors evaluate estimates and judgments incorporated into the financial statements based on historicalknowledge and best available current information. Estimates assume a reasonable expectation of future events andare based on current trends and economic data, obtained both externally and within the Company.

Key judgements - Provision for impairment of receivables

The value of the provision for impairment of receivables is estimated by considering the ageing of receivables,communication with the debtors and prior history. Included in trade and other receivables at the end of the year is anamount of $48,495 of receivables outstanding for more than 90 days. The directors believe that these amounts arerecoverable in full.

19


ABN 70 979 095 411


4 Revenue and other income

2016

$

2015

$

- Arbitration 18,300 44,909

- Conference - Australia 714,058 683,208

- Conference - Asia 87,380 93,915

- Member subscriptions 872,518 814,609

- Professional development program 255,151 193,007

- Interest received 19,270 24,770

- Publication sales 4,218 6,036

- Other revenue 53,851 59,672

Total Revenue 2,024,746 1,920,126

5 Cash and cash equivalents

2016

$

2015

$

Cash on hand 500 500

Bank balances 392,885 439,881

393,385 440,381

6 Trade and other receivables

2016

$

2015

$

CURRENT

Trade receivables 218,675 223,949

Provision for impairment - -

218,675 223,949

7 Other financial assets

2016

$

2015

$

CURRENT

Held-to-maturity investments - Term deposits 629,800 529,800

A term deposit amounting to $29,800 included under other financial assets is held by the bank as a security for theperformance by the Company under its office premises lease.

20


ABN 70 979 095 411


8 Other assets

2016

$

2015

$

CURRENT

Prepayments 383,974 270,701

Accrued interest 2,034 3,384

Other 170 170

386,178 274,255

9 Property, plant and equipment

PLANT AND EQUIPMENT

Office equipment

At cost 38,165 39,654

Accumulated depreciation (27,152) (21,892)

Total office equipment 11,013 17,762

Leasehold improvements

At cost 10,433 10,433

Accumulated depreciation (3,973) (1,885)

Total leasehold improvements 6,460 8,548

Total property, plant and equipment 17,473 26,310

(a) Movements in Carrying Amounts

Movement in the carrying amounts for each class of property, plant and equipment between the beginning andthe end of the current financial year:

OfficeEquipment

$

LeaseholdImprovement

s

$

Total

$

Balance at the beginning of year 17,762 8,548 26,310

Additions 2,471 - 2,471

Disposals - written down value (722) - (722)

Depreciation expense (8,498) (2,088) (10,586)

Balance at the end of the year 11,013 6,460 17,473

21


ABN 70 979 095 411


10 Trade and other payables

2016

$

2015

$

CURRENT

Trade payables 53,277 49,004

Accrued expense 103,113 37,580

GST payable 18,422 9,988

FBT payable 11,986 13,202

Sundry payables 7,204 14,963

194,002 124,737

11 Income in advance

2016

$

2015

$

PASE grants 88,586 -

Conference registrations 466,150 417,099

Arbitration 40,772 36,272

Other 6,850 15,000

602,358 468,371

12 Provisions

2016

$

2015

$

Current liabilities

Provision for annual leave 17,425 37,883

Non-current liabilities

Provision for long service leave 11,398 19,670

13 Leasing commitments

Operating leases

2016

$

2015

$

Minimum lease payments under non-cancellable operating leases:

- not later than one year 65,000 65,000

- between one year and five years 152,925 285,525

217,925 350,525

The lease is a non-cancellable operating lease for office premises commencing on 15 August 2014, with a term of 5years. Lease payments are increased on an annual basis to reflect market rentals.

22


ABN 70 979 095 411


14 Financial risk management

The Company's financial instruments consist mainly of deposits with banks, short-term investments, and accountsreceivable and payable.

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

2016

$

2015

$

Financial Assets

Cash and cash equivalents 393,385 440,381

Held-to-maturity investments 629,800 529,800

Loans and receivables 218,675 223,949

Total financial assets 1,241,860 1,194,130

Financial Liabilities

Trade and other payables 194,002 124,737

Total financial liabilities 194,002 124,737

15 Members' guarantee

The Company is incorporated under the Corporations Act 2001 and is a Company limited by guarantee. If theCompany is wound up, the constitution states that each member is required to contribute a maximum of $ 100 eachtowards meeting any outstandings and obligations of the Company. At 30 June 2016 the number of members was 277(2015: 269).

16 Auditors' remuneration

2016

$

2015

$

Remuneration of the auditor of the Company for:

- auditing the financial statements 15,000 15,000

- taxation services 2,200 -

Total 17,200 15,000

17 Key management personnel disclosures

Any person(s) having authority and responsibility for planning, directing and controlling the activities of the company,directly or indirectly, including any director (whether executive or otherwise) of that company, are considered keymanagement personnel.

The total remuneration paid to key management personnel of the Company during the year represents short-termemployee benefits of $ 362,946 (2015: $ 299,733) and post employment benefits of $31,531 (2015: $28,474).

23


ABN 70 979 095 411


18 Related parties transactions

(a) Mr. Geoff Farnsworth, a director of the company is also a partner in the firm of Holding Redlich. Holding Redlichhas provided legal services to the Company on normal commercial terms and conditions. During the year legal feesamounting to $45,359 was paid to Holding Redlich (2015: $54,375).

(b) During the year the Company received sponsorship fees of $4,000 from Holding Redlich (2015: $6,000).

(c) Mr. Malcolm Finlayson, a director of the Company is also a director of Finesse Solutions Pty Ltd. During the yearFinesse Solutions Pty Ltd provided training and consulting services to the value of $4,675 (2015: $3,100). During theyear the Company received membership fees of $1,136 (2015: $850) from Finesse Solutions Pty Ltd.

(d) Mr. Andrew Goyder, a director of the Company is also a director in the firm of GrainLink WA Pty Ltd. During theyear presenter fees amounting to $1,400 was paid to GrainLink WA Pty Ltd (2015: $1,400).

(e) Mr. Geoff Honey, a CEO of the company, whose spouse is a director in the firm of Cox Inall Communications.During the year Cox Inall Communications have provided general communication services to the value of $8,908(2015: $23,004).

(f) During the year the Company paid a remuneration of $40,000 (2015: $40,000) to Mr. Peter Reading for theresponsibilities as chairman of the Board.

19 Cash flow information

Reconciliation of net income to net cash provided by operating activities:

2016

$

2015

$


Cash flows excluded from deficit attributable to operatingactivities

Non-cash flows in deficit:

- depreciation 10,586 11,701

- net loss on disposal of property, plant and equipment 194 152

Changes in assets and liabilities:

- (increase)/decrease in trade and other receivables 5,274 (32,267)

- (increase)/decrease in other assets (111,923) (58,397)

- increase/(decrease) in deferred income 133,987 25,843

- increase/(decrease) in trade and other payables 69,265 (34,122)

- increase/(decrease) in provisions (28,730) 18,633

Cash flows from operations 54,947 (192,320)

24


ABN 70 979 095 411


20 Interest in Wheat Quality Australia Ltd

The company is one of the two members of Wheat Quality Australia Ltd (WQA), a not-for-profit company limited byguarantee. WQA's objects include providing a strategic and operational framework to enable a wheat varietyclassification for the common classes of Australian wheat and their quality attributes and ensuring that the qualityattributes of Australian wheat are quantified and recognised by growers, handlers, marketers and end users.According to the constitution of WQA, it must apply its income solely towards promoting its objects and no part of thatcompany's income may be paid or transferred directly or indirectly by way of dividends or otherwise to members. As aresult the company has not recognised any profit or share of net assets of WQA in these financial statements and theinterest is recorded at $NIL as at 30 June 2016 ($NIL as at 30 June 2015).

The directors of the Company have considered AASB 10, 11 and 12 and have come to the conclusion that theCompany does not control WQA and therefore no consolidation is required.

If WQA is wound up each member of the company has undertaken to contribute to the assets of that company up toan amount not exceeding $10 for payment of debts and liabilities of that company including the costs of the windingup. As at 30 June 2016 WQA did not have any contingent liabilities.

21 Company details

The registered office of the company is:


Level 7, 12 O'Connell Street

SYDNEY NSW 2000

25


ABN 70 979 095 411

Independent Audit Report to the Members of Grain Trade Australia Ltd

Report on the Financial Report

We have audited the accompanying financial report of Grain Trade Australia Ltd, which comprises the statement of financialposition as at 30 June 2016, the statement of profit or loss and other comprehensive income, statement of changes inequity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policiesand other explanatory information, and the directors' declaration.

Directors' Responsibility for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view inaccordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001 andfor such internal control as the directors determine is necessary to enable the preparation of the financial report that gives atrue 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 accordancewith Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating toaudit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report isfree 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 materialmisstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considersinternal control relevant to the Company’s preparation of the financial report that gives a true and fair view in order to designaudit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overallpresentation of the financial report.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirmthat the independence declaration required by the Corporations Act 2001, which has been given to the directors of GrainTrade Australia Ltd, would be in the same terms if given to the directors as at the time of this auditor’s report.

27

Grain Trade Australia LtdPostal: PO Box R1829 Royal Exchange NSW 1225 AustraliaStreet: Level 7, 12 O’Connell St, Sydney NSW 2000 Phone: +61 2 9235 2155 | Fax: +61 2 9235 0194

www.graintrade.org.au

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Documents

FULL FINANCIAL REPORT 2015/16 - Grain Trade Australia GTA/GTA... · FULL FINANCIAL REPORT 2015/16 ... Independent Audit Report 27. Grain Trade Australia Ltd ... Former GAFTA Council