annual report 2014 bif constitution requires the current chair of mura badul-gal to hold an...

Annual Report

2014

Badu Island Foundation Ltd

2

Contents

Chairman’s Address

Chief Executives Report Page 3

Directors and Executive Profile Page 4,5

Organisational Structure Page 5

Business Operations Page 6—11

Directors Report Page 12,13

Financial Statements Pages 14-24

Independent Auditors Report Page 25

Company Contacts Page 26

Chairman’s Address

I would like to take a little

time to explain about the

company “Badu Island

Foundation Ltd” so mem-

bers or community in

general can have a better

understanding. Badu

Island Foundation is a Not for Profit organisa-

tion, meaning profits are not given to directors,

employees or shareholders. All surplus monies

are spent on improvements and creating other

businesses or business opportunities with our

main obligation to provide the services needed

by our community; for example, managing the

postal agency being the latest undertaking.

Because of “not for profit” status the price mar-

gins set by the company are at a level so the

company is able to cover the cost of its bills and

unforseen maintenance or other circumstances.

For three years running now, BIF has full control

of all the divested enterprises and as first envis-

aged, it will take at least 5 years to see the

“fruits” of our effort as the company continues

to spend money on the improvements to these

businesses.

This year another enterprise has been divested

from Torres Strait Island Regional Council, the

Community Postal Agency. Financially, it is

however seen as a community service obliga-

tion whilst supported by our other enterprises.

This year again has been a challenging year but

much improved one from last year’s perform-

ance and things continue to look promising into

next year. Whilst spending on the improvements

the company continues to look at opportunities

offshore to strengthen economic development in

the community.

The major focus has again been on the Quarry

being the backbone of the company. The company

has been blessed with the engagement of Padrino

Crushing as our crusher is now irreparable to meet

the Department of Natural Resources and Mines

safety standards. This engagement has been a

major boost for the company.

The land tenure issues, being the land in trust, will

always be an influencing factor in the growth of

the company. To overcome this factor BIF may

have to look beyond Badu and invest in mainland

Australia so it can fuel the economy here in our

community.

The economic climate is on the improve in the

Torres Strait and we look forward to improved

company performance again next week.

I thank the CEO Peter Gadsby and all his staff, our

business advisor Mr Gordon Longland, Auditor

Peter McGrath and all the board Directors; Mr Peo

Ahmat Chair Mura Badulgal Corporation RNTBC,

Ms Wariba Seriat, Mr Troy Laza and Mr James

Yorkston who have made time available for the

very important board meetings.

Ngai nithamuniyah gar balbami ah iudi kaimel ma-

baka lumaik mina ngalpunika ah ngalpun kazika

ina ngalpa ngadhapalimin ngalpun rangadh wara

AGM-aka.

Koeyma Esso

Manuel Nomoa

Badu Island Foundation Ltd Annual Report 2014

3

Welcome to another

reporting year of the com-

pany’s operations.

Although reporting a loss

of $89,849, this is a much

improved result over last

year. Despite recording a

small increase in our turnover, expenses were

contained leading to the improved position. De-

preciation accounted for was $192,179. The de-

tailed financial statements appear in the second

part of this Annual Report.

This years report also contains a summary of each

business enterprise with segmented comparative

financial data including the administration cost of

running the company. We trust this additional

information will be well received by members.

The year has again proved difficult, especially to

providing cash flow for capital works as the com-

pany has been unsuccessful in obtaining any fur-

ther grant funding or loan funding for capital pro-

jects. The only carry over project subject to grant

funding is the design and costing of the proposed

Tama Mudh Motel extension.

During November 2013 the company ceased

trading operations at Badu Nursery and Land-

scaping resulting in the redundancy of one staff

member and alternative position within the com-

pany for the other. BIF accepted the divestment

of the Nursery in June 2011 from the Torres Strait

Island Regional Council in an endeavour to se-

cure jobs for those employees. Unfortunately, our

strategy of expanding the business to include

landscaping services did not become economi-

cally viable.

There is promise for the year ahead and although

further investment is required at our quarry

crusher the partnership with Padrino Pty Ltd to

provide crushing services and management ex-

pertise has provided a boost and with quarry

product being stocked piled, an expectant sales

growth is anticipated.

In conclusion, I would like to acknowledge the

invaluable assistance from your Chairman and

Business Manager, Manuel Nomoa, his fellow

directors, managers and all staff for their contri-

bution.

Peter Gadsby, ceo


Chief Executive Officers Report

Sunrise Badu Island Port Facility

4


...about Badu Island Foundation

Directors and Executive Profile

Manual Nomoa, 50 Chairman

Chairman since incorporation 29th January 2008, former Badu

Island Councillor. Mr Nomoa was also appointed as Business

Manager for the company in November 2011 to overseer the

running of our current businesses and develop new business

opportunities. Manuel is also holds a directorship with Mura

Badulgal (TSI) Corporation RNTBC as its honorary treasurer.

Peo Ahmat, 47, Chair Mura Badulgal (Torres Strait Islander)

Corporation RNTBC

The BIF constitution requires the current chair of Mura Badul-

gal to hold an automatic seat on the Board. A Memorandum of

Understanding between the two entities has BIF concentrating

on commercial activities and Mura Badulgal the social, land,

cultural and Native Title interests of Traditional Owners.

Troy Laza, 36, Honorary Treasurer

Troy was first appointed a director on 23rd September 2010.

After 4 years as senior ranger for Badu, Troy is a Ranger Super-

visor where his role now is supervision and implementation of

projects for Merian gesep a gur keparem le rangers, rangers

Murray Island group.

Wariba Seriat, 32 Non Executive Director

Wariba was first elected to the board on 16th November 2011.

Wariba is manager “Strait Start” child early learning centre, lo-

cated at the Tagai Badu campus.

James Yorkston, 50 Vice chairman

James was first elected to the board at the 2012 AGM and ais a

director Mura Badulgal (TSI) Corporation RNTBC board.

James is a plumber contracted to Torres Strait Island Regional

Council.

5

Organisation Structure


Chief Executive Officer

Peter Gadsby

Quarry

Quarry SSE

Glen Jacobs

Quarry Hand

John wosomo

Tama Mudh Motel

Motel Supervisor

Eddie Nona

Caltex Badu Service Station

Serv ice Station Manager

David Nona

Badu Hotel

Hotel Manager

Shelita Nona

Duty Manager

Daniel Nona

Casual Staff

Bar/Cleaning

Agencies

Freight/General Hand

Stephen Buia

Post Office

Christine Yorkston

Business Manager

Manuel NomoaAdministration

Admin Assistant

Christine Yorkston

Trainee Bookkeeper

Danielle Morseu

...about Badu Island Foundation

Directors and Executive Profile continued

Peter Gadsby, 61 Chief Executive Officer from April 2010

Prior to coming to Badu, Peter worked extensively for local gov-

ernments in remote indigenous councils and rural shires in

North West and Far North Queensland. As a small business

owner in the hotel industry and with twenty years experience in

the trustee industry, Peter brings to the organisation a compila-

tion of skills to guide BIF through these early years of the com-

pany.

Head Office:

Room 6 Badu Business Centre

199 Nona Street, PO Box 198 BADU ISLAND QLD 4875

6


BBBB usiness Operations Review—Badu Hotel

2014

$

Sales 907,934

Other Income 64,384

972,318

Cost of Goods Sold

Opening stock 87,440

Purchases 466,141

Freight 55,426

542,497

Gross Profit 429,821

Expenses

Depreciation 26,086

Repairs & maintenance 17,576

Employee costs 188,551

Other 22,426

289,486

Net Profit 140,335

Less closing stocks (66,510)

Insurance 8,766

Rates & service charges 11,410

Community events, donations 1,932

Electricity 12,739

Shelita Nona

Badu Hotel Manager

2013

$

868,758

64,173

932,931

14,336

631,491

86,018

(87,440)

644,405

288,526

18,307

5,946

202,404

29,234

281,009

7,517

13,048

3,920

-

8,150

Year under review ...

Hotel trade increased over last year

by $40,000 and with improved pur-

chasing and stock freight costs has

made for a much improved gross

profit. Overhead and other expenses

have been contained leading to a

much better net profit compared to

last year and more in tune for a busi-

ness with this size turnover.

Major events at the hotel have been a

very popular darts competition and

karaoke. The hotel also experiences a

busy period during the Island of Ori-

gin. The ATM facility supports the

community with access to cash.

Hotel Manager, Shelita Nona is sup-

ported by Daniel Nona (Duty Man-

ager) cleaning staff and regular bar

service staff. The year ahead ...

Plans are afoot to develop and extend bar ser-

vice to include display and mixing of spirit

drinks. A section of the bar will be utilised for

this purpose by providing a display of the drinks

available and an area to mix drinks for patrons.

A glass washer will be installed to enable spirit

and wine drinks to be delivered in appropriate

glassware.

The hotel would also like to introduce keg beer

for patrons, however, there will be a significant

cost to do this. Further improvements to the

venue to encourage functions and patron enjoy-

ment will be to provide a commercial kitchen for

the preparation and supply of food.

Plans have been drawn to utilise the “dart room”

adjacent to the bar as a kitchen, but again, the

project will be dependent on having the finances

to do so.

7

2014

$

Sales 745,589

Grant Funding forward -

745,589

Cost of Goods Sold


Purchases 442,989

Freight 152,560

Less closing stocks (61,424)

580,242


Expenses




Other 13,057

102,821

Net Profit (Loss) 62,527

Other Income -

Insurance 2,457

Community events, donations -

Electricity 3,490

Depreciation 15,831

David Nona

Service Station

Manager


BBBB usiness Operations Review—Badu Caltex Service Station

2013

$

772,627

-

19,090

791,717

41,109

515,050

171,347

(46,117)

681,389

110,328

17,309

24,570

69,763

13,575

132,088

(21,760)

2,991

980

-

2,900


Down slightly, the sales and activity

for the service station were consistent

to last year. Price of landing fuel on

Badu was reflected at the pump, and

fuel prices remained relatively high.

A change of supplier for gas supplies

(Sea Swift Pty Ltd/Elgas) resulted in a

$20 saving per cylinder to the cus-

tomer. Cylinder rentals will decline

as the new supplier is not currently

charging rent, however, rental is still

being paid for existing Origin cylin-

ders on Badu.

Service Station Manager, David

(Doids) Nona is supported by Daniel

Nona and Anton Nona when time off

is required.

The year ahead ...

David plans to have a wider range of retail stock

available in the servo shop, to compliment the

usual oils and automotive supplies. David will

have a range of fishing and diving supplies, spe-

cial orders are also welcomed from customers.

Management is also seeking a better freight

price for fuel and any benefits in this regard will

be passed on at the pump price for customers.

Our existing fuel supply contract with Caltex

requires we purchase our fuel from Caltex, how-

ever, we hope to take advantage of competitive

shipping rates for freight of fuel to narrow the

gap between mainland and island prices for

fuel.

The service station canopy replacement is the

next major project at the servo, and the profit

surplus from the service station will be ear-

marked for this project.

8


2014

$

Sales 629,890

Grant Funding forward -

629,890

Cost of Goods Sold


Purchases/Blasting 37,036

Freight 82,444

Less closing stock (289,631)

189,730


Expenses

Electricity 4,238


Employee costs & contractors 160,244

Other 87,418

328,062

Net Profit 112,098

Other Income -

Insurance 12,502

Depreciation 45,632

Community events, donations -


BBBB usiness Operations Review—Badu Quarry

2013

$

494,226

-

282,000

776,226

82,280

214,989

173,742

(359,881)

111,130

665,096

55,417

90,408

234,416

183,299

573,322

91,774

3,872

1,960

-

3,950


BIF welcomed the partnership ar-

rangement with Padrino Pty Ltd as a

crushing contractor. The experience

and equipment provided by Norm,

Halina and Glen Jacobs has enabled

BIF to take the next step in developing

the quarry enterprise.

Without this partnership, BIF would

not have been able to tender and win

the supply of the recent 6,640 tonne

road base to Moa Island.

Revenue from this project and a pick

up in sales in the last months of the

financial year enabled the quarry to

record a reasonable result, although

below expectations for the full year.

BIF relies heavily on the quarry to

subsidise BIF administration expenses

and provide a source of capital for

future economic development.

The year ahead ...

The main goals for the year ahead are:-

• Repairs to the crusher

• Stockpile material for sale

• Meet target sales

The Mines Inspector require a number of repairs

to be made to our jaw crusher, including a sub-

stantial upgrade of the electrical installation

and replacement of corroded steelwork. These

safety matters will be addressed with an ex-

pected cost of up to $100,000.

Padrino will continue to deploy there impact

crusher and screen on Badu and with other

equipment, including our jaw crusher to crush

larger rocks, with a plan to stockpile for future

sales, hoping this will give us a marketing edge.

BIF is looking at expanded sales, especially with

bulk on barge supplies which it has been able to

do with Moa road base supply. Opportunities are an-

ticipated for further road base, armour rock and ongo-

ing bagged premix supplies for projects like housing

construction which is a mainstay of quarry sales. Local

housing construction will also have a major input on

quarry sales once the program commences for Badu.

Glen Jacobs

SSE (Manager)

9


Eddie Nona

Manager

BBBB usiness Operations Review—Tama Mudh Motel

2013

$

108,245

2,619

110,864

-

13,239

3,579

980

8,400

9,620

47,456

13,365

96,639

14,225

2014

$

Sales 119,618

Grant Funding forward 7,563

127,181

Expenses

Community events, donations 491

Depreciation 13,078

Electricity 3,838

Insurance 5,795




Other 6,750

88,607

Net Profit 38,574


Motel occupancy rates remain strong

during midweek days and for a small

complex, completed a successful year

trading wise.

Renovations to motel room ensuites

has been completed and the kitchen

has had a refit to modernise its facili-

ties. The year ahead ...

Planning is well underway with a proposed expansion of the complex. Management is currently working

with Kleinhardt consultant, Mr Jim Bitomsky to prepare a business plan for the additional 20 motel rooms

and conference facility to assist us in seeking funding for the project. Final design and costs indicate this

multi million dollar project will provide a huge boost to the Badu economy and foster many additional jobs

for housekeeping and restaurant staff.

The design plan below shows the extension to the current five (5) room motel.

10


BBBB usiness Operations Review—Agencies

Badu Community Postal

Agency

2014

$

Sales 796

Commission 3,467

4,263

Cost of Goods Sold

Purchases 1,520

Gross Profit 2,743

Expenses

Electricity 286

Repairs & Maintenance 1,032

Employee Costs 3,939

Other 415

5,672

Net Profit (Loss) (2,929)

2013

$

0

0

0

0

0

Badu Freight Agency 2014

$

Sales 2,792

Commission 54,548

57,340

Less Expenses

Depreciation 1,722

Employee Costs 22,507

Other 6,618

30,847

Net Profit (Loss) 26,493

2013

$

11,123

51,901

63,024

1,849

17,410

4,733

23,992

39,032

The company took over the community postal agency from Torres Strait Island Regional Council in April

2014. Australia Post has provided a scanner for receipt of parcel mail, a service not normally available for a

CPA but acknowledged due to the high volume of parcel post coming to Badu.

Post Office Supervisor, Christine Yorkston will provide a greater range of postal and stationary goods for

sale as we expand the shop, as well, mail boxes will be repaired to cater for mail collection outside of busi-

ness hours.

Freight Services with Stephen Buia at the helm recently relocated its operations to the “Dogai” a warehouse

facility at the barge loading ramp.

Badu Freight Agency

now operating from the “Dogai” shed

Badu Community Post Agency

commenced services April 2014

11


Badu Business Centre 2014

$

Rents 30,189

Miscellaneous Income 1,662

31,851

Less Expenses

Depreciation 49,619

Repairs & Maintenance 11,578

Employee/Contractors 925

Other 14,800

95,381


Electricity 7,292

Insurance 11,167

Courtyard - Badu Business Centre

Badu CPA - located room 2

Badu Business Centre

BBBB usiness Operations Review—Property Management and Admini-

stration

2013

$

33,275

0

33,275

34,475

21,571

4,508

16,661

77,215

(43,940)

Administration 2014

$

Miscellaneous Income 22,680

Grant Funding forward (6,864)

15,816

Less Expenses

Depreciation 9,562

Telephone/data 11,380


Other 26,791

264,263


Audit 11,500

Community events, donations 14,442

2013

$

16,552

16,364

32,916

12,000

6,900

9,760

173,009

239,347

(206,431)

4,965

32,713

The Company’s principal office is located in Rooms 4 & 6 at the Business Centre and accommodates office

administration staff, chief executive officer and business manager. The PBC support officer shares office

space in room 6. The table below show the administration staffing costs and other overhead expenses for

the Company.

The Badu Business Centre is centrally located in the town-

ship with council offices, community hall and the nearby

supermarket. Long established tenancies include the De-

partment of Immigration and Border Protection, Queen-

sland Health, Indigenous Knowledge Centre (Library) Tikies

Design & Cafe, Community Postal Agency and the company’s

own head office.

Room 6

BIF Office

12


Your directors present their report on the company for the financial year ended 30 June 2014.

General Information Directors

The names of the directors in office at any time during, or since the end of, the year are:

Manual Nomoa (Appointed: 29th January 2008)

Peo Ahmat (Reappointed: 24th February 2011)

Troy Paiwan Laza (Appointed: 23rd September 2010)

Wariba Danagai Seriat (Appointed:16th November 2011)

James Karim Yorkston (Appointed: 30th November 2012)

Principal Activities

The principle activities of Badu Island Foundation Ltd during the financial year were the operation of the following listed business and activities to raise funds for the benefit and welfare for the Community of Badu Island:

Badu Island Hotel

Badu Quarry

Badu Caltex Service Station

Tama Mudh Motel

Badu Nursery & Landscaping (ceased operations November 2013)

Community Postal and Freight Agency

Management of commercial premises known as the Badu Business Centre.

Business Review

Distribution of Profits

No distributions were paid or declared during the financial year.

Operating Results

The company reported a Net Loss after providing for income tax amounting to $89,849.

Review of Operations

A review of the operations of the company during the financial year and the results of those operations show the company continued to engage in its various trading activities, the results of which are disclosed in the attached financial statements.

Directors Report

30 June 2014

FFFF inancial Statements

13


Other Items

Auditors’ Independence Declaration

A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out at page 3.

Significant Changes in State of Affairs

The only significant change in the nature of the company’s activities that occurred during the financial year was that the Company closed its nursery and landscaping business and accepted the community postal agency from Australia Post following its divestment from Torres Strait Island Regional Council.

Significant Event

Except as noted above there was no significant event effecting the Company operations.

Environmental Issues

The company’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth of a State or Territory.

Indemnifying Officers

During or since the end of the financial year the company has entered into an agreement to Indemnify Directors and Officers and has agreed to pay insurance premiums thereon.

Options

No options over issued shares or interest in the company were granted during or since the end of the financial year and there were no options outstanding at the date of this report. Signed in accordance with a resolution of the Board of Directors:

Dated:10 August 2014

Badu Island Foundation Ltd

ACN129 423 310

Directors Report

30 June 2014

14

CASH FLOW STATEMENT

FOR THE YEAR ENDED 30 JUNE 2014

Note 2014 2013

$ $

Cash Flows from Operating Activities

Receipts From Customers 2,586,075 2,765,817

Dividends Received - -

Interest Received 2,431 3,803

Payments to Suppliers and Employees (2,566,717) (3,318,030)

Interest Paid - -

Net Cash Provided by / (Used in) Operating Activities: 21 21,789 548,410

Cash Flows From Investing Activities

Proceeds from Sale of Property, Plant & Equipment - -

Acquisitions of Property, Plant & Equipment (32,758) (26,167)

Net Cash Provided by (Used In) Investing Activities: (32,758) (26,167)

Cash Flows from Financing Activities

Loan Proceeds - -

Loan Repaid - -

Net Cash Provided by Financing Activities - -

Net Increase (decrease) in Cash: (10,969) (574,577)

Cash at Beginning of Year 181,702 756,279

Cash at End of Year 9 170,733 181,702


STATEMENT OF FINANCIAL PERFORMANCE


Note 2014 2013

$ $

Revenue 2 2,463,419 2,410,728

Cost of sales 3 1,345,100 1,480,779

Gross Profit 1,118,319 929,948

Other revenues 4 216,360 417,975

Total income 1,334,679 1,347,924

Administration expenses 5 (443,513) (658,818)

Depreciation expense 6 (192,179) (183,054)

Employee Costs 7 (762,678) (693,529)

Other Expenses 8 (26,158) (32,093)

Profit (loss) before income tax expense (89,849) (219,570)

Income tax expense - -

Profit from operations (89,849) (219,570)

15


STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2014

Note 2014 2013

$ $

CURRENT ASSETS

Cash assets 9 170,733 181,702

Receivables 10 240,081 148,808

Stock on Hand 11 412,205 505,448

TOTAL CURRENT ASSETS 823,019 835,957

NON-CURRENT ASSETS

Property Plant & Equipment 12 3,865,326 4,110,238

TOTAL NON-CURRENT ASSETS 3,865,326 4,110,238

TOTAL ASSETS 4,688,344 4,946,195

CURRENT LIABILITIES

Trade and other payables 13 340,781 417,865

Interest Bearing Liabilities - -

TOTAL CURRENT LIABILITIES 340,781 417,865

NON-CURRENT LIABILITIES

Trade and other payables 14 17,861 23,287

TOTAL NON-CURRENT LIABILITIES 17,861 23,287

TOTAL LIABILITIES 358,642 441,153

NET ASSETS 4,329,702 4,505,042

EQUITY

Issued capital 16 - -

Asset Revaluation Reserve 17 4,146,716 4,232,207

Retained Earnings 18 182,986 272,835

TOTAL EQUITY 4,329,702 4,505,042

16


STATEMENT OF CHANGES IN EQUITY


Issued Capital

Ordinary

Asset

Retained Revaluation

2012-2013 year Note Earnings Reserve Total

$ $ $ $

Balance at 1 July 2012 - 492,405 4,232,207

4,724,612

Profit attributable to members - (219,570) -

(219,570)

Transfers to and from

reserves

- Asset Revaluation Reserve 18

- - - -

Sub-total - 272,835 4,232,207

4,505,042

Dividends paid or provided for

- - - -

Balance at 30 June 2013

- 272,835 4,232,207 4,505,042

2013-2014 year

Balance at 1 July 2013 272,835 4,232,207

4,505,042

Profit (Loss) attributable to members

- (89,849) -

(89,849)


retained earnings - -


reserves

- Asset Revaluation Reserve 18

- - (89,491) (89,491)

Sub-total - 182,986 4,146,716

4,329,702

Dividends paid or provided for

- - - -

Balance at 30 June 2014

- 182,986 4,146,716 4,329,702

17


NOTES TO THE FINANCIAL STATEMENTS


Note 1 - Statement of Significant Accounting Policies

The significant policies that have been adopted in the preparation of this financial report are:

a) Basis of Preparation

The Company is not a reporting entity because there are no users dependent on general purpose

financial reports.

This is a special purpose financial report that has been prepared by Badu Island Foundation Ltd for the

sole purpose of satisfying the requirements of the directors and members.

As such, the financial report may not comply with all International Financial Reporting Standards

The financial report has been prepared in accordance with the requirements of the following

Australian Accounting Standards:

AASB 1031 Materiality

AASB 101 Presentation of Financial Statements

AASB 107 Cash Flow Statements

AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors

AASB 110 Events after the Balance Sheet Date

AASB 1048 Interpretation and Application of Standards

The accounting policies adopted are considered appropriate to meet the needs of the members.

The financial report has been prepared on an accruals basis and the basis of historical cost except for the

revaluation of certain non-current assets.

The financial report is for the entity Badu Island Foundation Ltd as an individual entity. The Badu Island

Foundation Ltd is a company limited by guarantee, incorporated and domiciled in Australia.

The following specific accounting policies, which are consistent with the previous period

unless otherwise stated, have been adopted in the preparation of this report:

b) Property Plant & Equipment

The company has adopted AASB116 for Property Plant & Equipment in the

preparation of the financial statements for the year ended 30 June 2013.

c) Income Tax

The company is, by virtue of Section 50-25 5.1 (Income Tax Assessment Act 1997)

exempt from the liability to pay company income tax.

d) Property, Plant and Equipment

Property, Plant and Equipment are brought to account at cost or Director's value, less where

applicable, any accumulated depreciation or 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 those assets. The expected net cash flows have not been discounted to present values in

determining recoverable amount.

18


e) Leases

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor,

are charged as expenses in the periods in which they are incurred.

f) Revenue Recognition

Sales revenue is recognised when control has passed to the buyer.

g) Cash

For the statement of cash flows, cash includes cash on hand net of bank overdrafts.

h) Investments

Valuation of investments is determined by multiplying the number of shares held by the market price

of each share at balance date. Increments or decrements are included in the revenue statement.

Note 1 - Statement of Significant Accounting Policies continued

Acquisitions of assets

Acquisitions of assets are initially recorded at cost. Cost is determined as the fair value of the assets given as consideration plus costs incidental to the acquisition, including freight in, architect's fees and engineer-ing design fees and all other establishment costs.

Valuation

All buildings and improvements and major plant were valued as at 30 June 2012 by Asset Advance, Mr Neil Teves AAPI, Certified Practising Valuer qld Registration No. 382.

Other plant and equipment is at the Directors' valuation or measured at cost.

Non-current physical assets measured at fair value are re-valued where required so that the carrying amount of each class of asset does not materially differ from its fair value at the reporting date.

Any revaluation increment or decrement arising on the revaluation of an asset has been credited to the asset revaluation reserve.

Depreciation

Land is not depreciated as it has an unlimited useful life. Depreciation on other property, plant and equipment is calculated so as to write-off the net cost or re-valued amount of each depreciable asset, less its estimated residual value, progressively over its estimated useful life to the company.

Assets are depreciated from the date of acquisition or, in respect of internally constructed assets, from the time an asset is completed and ready for use.

The depreciable amounts of all fixed assets including buildings but excluding freehold land, are

depreciated on a diminishing value basis or prime cost basis over their estimated useful lives

commencing from the time the asset is held ready for use.

Ranges of useful lives of each separate class of asset are disclosed in Note 12.

between the carrying amount of the asset at the time of the disposal and the proceeds of disposal and

is included in the operating profit of the Company in the year of disposal.

The gain or loss on disposal of all fixed assets including re-valued assets is determined as the difference

19


Note 1 - Statement of Significant Accounting Policies (Continued)

i) Goods and Services Tax

Goods and services tax is not included in revenue and expenses but is included in receivables, payables, and

receipts and payments to customers.

j) Impairment of Assets

At each reporting date, the entity 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 the income statement.

k)

Provision is made for the company's liability for employee benefits arising from services rendered by

employees to balance date. Provisions were recognised for both Long Service and Annual Leave.

Employee Benefits

2014 2013

$ $

Note 2 - Revenue

Sales 2,463,419 2,410,728

2,463,419 2,410,728

Note 3 - Cost of sales

Opening Stock 505,448 144,827

Purchases 960,908 1,403,455

Freight 290,949 437,945

Closing Stock (412,205) (505,448)

1,345,100 1,480,779

Note 4 - Other Revenues

Grant Funding 57,123 374,873

Interest 2,431 3,802

Miscellaneous Income 54,451 39,300

Rents 30,189 -

213,360 417,975

Commissions 72,166 -

Note 5 - Administration Expenses

Accounting Fees 1,500 1,000

Audit Fees 10,000 11,000

Auspice Payments 7,980 36,114

Advertising 1,227 1,227

Bad Debts 16,273 (7,126)

Bank Charges 5,439 5,229

Computer Expenses 8,722 1,458

Consultancy 34,823 107,776

Electricity and Gas 34,089 43,024

Freight (Non-Stock) 12,098 49,294

Insurance 49,983 31,589

Internet and Web 215 1,706

Landscaping & Gardens 4,224 3,978

Community Events/Donations 27,451 4,965

Legal Fees 5,242 -

20


Note 5 - Administration Expenses (Continued) 2014 2013

$ $

Motor Vehicle Expenses 68,299 86,599

Mura Badulgal Office Expenses (13,413) -

Plant Hire - 35,657

Printing and Office Supplies 3,660 6,154

Rates & Service Charges 43,280 30,150

Registrations & Licenses 11,324 10,979

Repairs and Maintenance - Buildings 7,656 38,481

Repairs and Maintenance - Plant and Equipment 37,123 107,799

Royalties 6,832 -

Telephone and Fax 19,424 18,348

Travel - Contractors,Grant Expenses 21,093 13,937

Water Usage - 17,288

443,513 656,627

Note 6 - Depreciation Expense

Buildings 131,891 122,425

Motor Vehicles 22,025 25,482

Plant and Equipment 36,251 32,934

Furniture and Fittings 2,012 2,213

192,179 183,054

Note 7 - Employee Costs

Fringe Benefits Tax 2,770 -

Staff Training & Uniforms - 1,735

Superannuation/Workcover 73,282 55,557

Wages and Salaries 681,591 636,237

762,678 700,685

Note 8 - Other Expenses

Other Expenses 26,158 27,128

26,158 27,128

Note 9 - Cash Assets

Cash at Bank - Cheque Account 42,437 60,077

Cash at Bank - Investment Account 44,593 5,461

Cash at Bank - Grants Account 21,168 42,736

Cash Float 4,800 4,600

ATM Safe Float 5,625 67,087

Cashcard ATM 52,110 1,740

170,733 181,702

Note 10 - Receivables

Deposits Paid 2,000 2,000

Trade Debtors 260,014 154,468

Less Provision for Bad Debts (21,933) (5,660)

240,081 148,808

Staff Travel 5,035 7,156

Note 11 - Stock on Hand

Stocks on Hand - at Cost

Hotel 60,464 87,440

Quarry 289,631 359,881

Service Station 55,840 46,117

Nursery - 1,470

Power Cards 6,270 10,540

412,205 505,488

21

Note 12 - Property, Plant and Equipment

(a) Year Ended 30 June 2014

Buildings and Improvements

Motor Vehicles

Plant and Equipment

Furniture and Fittings

Total

Basis of measurement

Revaluation & Cost

Revaluation Revaluation & Cost

Revaluation & Cost

Asset Values 2014 2014 2014 2014 2014

Balance at beginning of financial year 5,409,420 155,184 286,148 15,720 5,866,472

Additions at Cost - 12,727 20,031 - 32,758

Write - offs (85,491) - - - (85,491)

Balance at end of financial year 5,323,929 167,911 330,851 17,215 5,839,906

Accumulated Depreciation

Balance at beginning of financial year 1,671,945 53,255 50,046 7,156 1,782402

Depreciation provided in period 131,891 22,025 36,251 2,012 192,179

Disposals - - - - -


Total Written down value at period end 3,520,093 92,631 244,554 8,047 3,865,326

The Company has used the following rates of depreciation to measure the useful life of fixed assets

Buildings & Improvements Range 2% - 10% Prime cost method

Motor Vehicles 20% Deminishing value method

Plant & Equipment Range 10% - 33.3% Deminishing value method

Furnitues & Fittings 20% Deminishing value method

Items under $1000 are fully expensed in the year of purchase.

(b) Year Ended 30 June 2013

Buildings and Improvements

Motor Vehicles

Plant and Equipment

Furniture and Fittings

Total

Basis of measurement

Revaluation Revaluation Revaluation & Cost

Revaluation

Asset Values 2013 2013 2013 2013 2013


Additions at Cost - - 24,672 1,495 26167

Disposals - - - - -

Revaluation by Directors - - - - -


Accumulated Depreciation


Depreciation provided in period 122,425 25,482 32,934 2,213 183,054

Disposals - - - - -

Balance at end of financial year 1,671,945 53,255 50,046 7,156 1,782402

Total Written down value at period end 3,737,476 101,929 269,774 10,059 4,110,238


22


Notes to Financial Statements (Continued) 2014 2013

$ $

Note 13 - Current Liabilities: Trade and other payables

Trade Creditors 208,298 298,265

Visa Corporate Card 1,958 2,889

Goods and Services Tax Payable 13,001 (4,034)

Employee Wages 2,595 1,085

PAYG Withholding 11,768 13,096

Provision for Annual Leave 31,332 21,385

Unspent Grant Funding 21,169 71,428

Accrued Charges 50,660 13,750

340,781 417,865

Note 14 - Non-Current Liabilities: Trade and other payables

Provision for Long Service Leave 17,861 23,287

17,861 23,287

Note 15 - Contingent Liabilities

There are no known contingent liabilities of a significant nature

at balance date.

Note 16 - Issued Capital

No Issued Capital as the Company is Limited by guarantee.

Note 17 - Asset Revaluation Reserve

Opening Asset Revaluation Reserve 4,232,207 4,232,207

Increments - -

Decrements (85,491) -

Closing Asset Revaluation Reserve 4,146,716 4,232,207

Note 18 - Retained Earnings

Opening Retained Earnings 272,835 492,405

Increments (Decrements) - -

Net profit (loss) attributable to members of the company (89,849) (219,570)

Closing Retained Earnings 182,986 272,835

Note 19 - Commitments

Except tied grant funding, there are no known commitments of a

significant nature at balance date.

Note 20 - Auditors' Remuneration

Amounts received or due and receivable by auditors for

Auditing Services 10,000 11,000

Other Services 1,500 1,000

Total 11,500 12,000

23

Badu Island Foundation Ltd Annual Report 2014 2014 2013

$ $

Note 22 - Directors' Remuneration

Income paid or payable or otherwise made available in respect of the financial year to each director of

the Badu Island Foundation Ltd directly or indirectly from the entity or any related entity.

Manual Nomoa - -

Peo Ahmat - -

Wariba Seriat - -

Troy Stow - -

James Yorkston - -

- -

Note 23 - Financial Instruments

(a) Terms, conditions and accounting policies.

The company's accounting policies, including the terms and conditions of each class of financial

asset, financial liability and equity instrument, both recognised and unrecognised at the balance

date, are as follows:

Trade Receivables and Payables - Carried at nominal amounts due less any provision for doubtful

debts.

Credit sales/purchases are on 30 day terms.

(b) Interest rate risk.

The company is not exposed to interest rate risks as at balance date

(c) Net fair values.

No exposure to risk as at balance date.

(d) Credit risk exposures.

The company has no exposure to credit risk at balance date in relation to each class of

recognised financial asset. The carrying amount of those assets is at historical cost.

Both assets and liabilities are stated at actual value.

Notes to Financial Statements continued

Note 21 - Reconciliation of Cash Flow from Operating Activities with Operating Profit after Income Tax

Operating Profit (89,849) (219,570)

Non Cash Flows in Operating Profit :

Depreciation of Property, Plant and Equipment 192,179 183,054

Loss on Sale of Non-Current Assets - -

Change in market Value of Investments - -

Changes in Assets and Liabilities

Decrease (Increase) in Trade Debtors (91,273) 59,083

Decrease (Increase) in Other Receivables - -

(Increase) / decrease in Accrued Income - -

(Increase) / decrease in Stock on Hand 93,243 (306,621)

Increase (Decrease) in Unearned Revenue - -

Increase (Decrease) In Inputs Tax Liability 17,034 (51,133)

Increase (Decrease) in Payables (104,065) (134,640)

Increase (Decrease) in Provision - Other 4,520 (23,583)

Net Cash Provided by / (used in) Operating Activities 21,789 (548,410)

24

Notes to Financial Statements continued


Note 24 - Events after the Balance Sheet Date

There are no material adjusting events after the balance sheet date.

Note 25 - Company Details

The Registered Office of the Company is:-

c/- Bottoms English Lawyers

Cairns QLD 4870

The principal place of business of the company is:

Badu Business Centre, RM 6

Badu Island QLD 4875

The principal activities of the company are to run the various enterprises on

Badu Island for the benefit and welfare of the community of Badu Island.

These enterprises include the Badu Island Hotel, Badu Quarry, Badu Caltex

Service Station, Tama Mudh Motel a Freight and Community Postal Agency.

The company also manages the rental portfolio of the Badu Business Centre.

Auditor’s Independence Declaration

As Auditor of Badu Island Foundation Ltd for the year ended 30 June 2014, I declare that to the best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

b) no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of the Badu Island Foundation Ltd and during the period covering my appoint-ment.

Dated 11th August 2014

Peter F. McGrath FNTAA

Company Auditor

25

Independence

I am independent of the company, and have complied with the independence requirements of the Corpora-tions Act 2001. In addition to my audit of the financial report, I was engaged to undertake the services dis-closed in the notes to the financial statements. The provision of these services has not impaired our independ-ence.

Auditor’s Opinion In my opinion, the financial report of Badu Island Foundation Ltd is in accordance with the Corporations Act 2001, including:

(a) giving a true and fair view of the company’s financial position as at 30 June 2014 and of its perform-ance for the year ended on that date in accordance with the accounting policies described in Note 1; and

(b) complying with Accounting Standards in Australia to the extent described in Note 1 and complying with the Corporations Regulation 2001.

Dated 11th August 2014

Peter F. McGrath FNTAA,

Company Auditor

Registration No 6112

I have audited the accompanying financial report, being a special purpose financial report, of Badu Island

Foundation Ltd for the year ended 30 June 2014. The financial report comprises the statement of financial

performance, statement of financial position as at 30 June 2014, statement of changes in equity, cash flow

statement, summary of significant accounting policies and other explanatory notes and the directors’ declara-

tion for the year then ended

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial report

and have determined that the accounting policies described in Note 1 to the financial statements which form

part of the financial report are appropriate to meet the financial reporting requirements of the Corporations

Act 2001 and are appropriate to meet the needs of the members. The directors’ responsibility also includes:

designing, implementing and maintaining internal control relevant to the preparation and fair presentation of

the financial report that is free from material misstatement, whether due to fraud or error; selecting and ap-

plying appropriate accounting policies; and making accounting estimates that are reasonable in the circum-

stances.

Auditor's Responsibility

My responsibility is to express an opinion on the financial report based on our audit. No opinion is expressed as to whether the accounting policies used, as described in Note 1, are appropriate to meet the needs of the members. I have conducted my audit in accordance with Auditing standards in Australia. Those standards require that I comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance 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 as-sessments, 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 in-cludes evaluating the appropriateness of accounting policies used and the reasonableness of accounting esti-mates made by the directors, as well as evaluating the overall presentation of the financial report.

The financial report has been prepared for distribution to members for the purpose of fulfilling the directors’ financial reporting responsibilities under the Corporations Act 2001. I disclaim any assumption of responsibil-ity for any reliance on this report or on the financial report to which it relates to any person other than the members, or for any purpose other than that for which it was prepared.

Independent Audit Report on the Financial Report to Members of Badu Island Foundation Ltd

26

Badu Island Foundation Ltd Head Office: Room 6,199 Nona Street (PO Box 198) Badu Island Qld. 4875

Ph 07 4069 4778 Fax 07 4069 4530 Mob 0487 297 030 Email (Admin) [email protected] (Accounts) [email protected]

Tama Mudh Motel Ph/Fax - 07 4069 4900 Mob - 0418 778 910

Badu Quarry Ph/Fax -07 4069 4770 Mob - 0419 565 747

Badu Freight Agency Ph -07 4203 0988 Mob - 0488 007 228

Badu Caltex Service Station Ph - 07 4069 4344 Fax - 07 4069 1888

Badu Hotel Ph/Fax - 07 4069 4753 On FB—Badu Hotel

Badu Postal Agency Ph - 07 4203 0985

Web: www.baduif.com.au

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