CO-OPERATIVE FEDERATION OF VICTORIA LTD FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2003 CO-OPERATIVE FEDERATION OF VICTORIA LTD DIRECTORS' REPORT To the members, Your Directors submit their report, together with the audited accounts of the Federation for the year ended 30 June 2003. DIRECTORS The Directors in office during the year and up to the date of this report are: John Niel BLACK David Graham DINNING Peter Kenneth JAMIESON (resigned November 2002) David Henry GRIFFITHS (resigned October 2002) John Sylvester LUCKMAN Valerie Therese OGIER (resigned November 2002) Christopher Dave GREENWOOD (resigned February 2003) Anthony Francis O'SHEA PRINCIPAL ACTIVITIES The principal activities of the Federation in the course of the financial year were: • Maintaining relations with the Registry ofCo-operatives • Establishment & maintenance ofAustralian Co-operative portal <www.australia.coop> • Promoting the Co-operative option • Publishing the Victorian Co-operative News; online and/or in printedform • Providing and developing services for use by members • Conducting seminars and workshops • Participating in meetings of the Co-operatives Council of Australia • Fostering co-operation between Co-operatives. OPERATING RESULTS FOR THE YEAR The net amount of the deficit of the Federation for the financial year after provision for income tax was $1,185. ENVIRONMENTAL REGULATION The Co-operative's activities are not regulated by any significant environmental regulation under a law of the Commonwealth or of a State or Territory. DIVIDENDS The Directors recommend that no amount should be paid by way of dividend. No amount has been paid or declared by way of dividend since the end of the previous financial year. L 2 REVIEW OF OPERATIONS The Federation concluded the financial year with an operating deficit of $1,185 after provision for income tax compared to a surplus of $8,856 the previous year. Grant Income decreased by $22,316. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There have been no significant changes in the state of affairs of the Federation over the year. AFTER BALANCE DATE EVENTS There has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors, to affect substantially the results of the Federation'S operations for the next succeeding financial year. INFORMATION ON DIRECTORS Anthony Francis O'Shea Chainnan 2003 Committee Member, Avoca District Co-operative Ltd Treasurer, Avoca Community Resource Centre 25 years experience as Co-operative Director Manager Appointed Director in 2002 John Niel Black Past Chainnan 30 years experience as Co-operative Director Appointed Director in 1998 Peter Kenneth Jamieson Executive Officer and Director North East Telecommunications Co-Operative Ltd Appointed Director in 2001 Resigned November 2002 David Henry Griffiths Secretary of Co-operative Energy Ltd Past Chainnan Co-op Federation of Victoria Appointed Director in 1995 Resigned October 2002 John Sylvester Luckman Chainnan YCW Co-op Delegate to Co-op Federation of Victoria since 1995 Appointed Director in 1997 Valerie Therese Ogier Chainnan Co-operative Purchasing Services Ltd since June 1994 Appointed Director in 1996 Resigned November 2002 Christopher Dave Greenwood Independent Director Editor of National Co-op Update Appointed Director in 200 I Resigned February 2003 David Graham Dinning Independent Director 30 years as a Director and Manger and full-time professional at various levels of the Credit Co-operative movement in Australia and overseas. Appointed Director in February 2003 3 Six board meetings were held during the 2002/2003 year. The attendances at board meetings were: D. Griffiths attended 6 out of 7 meetings D. Dinning attended 3 out of3 meetings N. Black attended 5 out of 6 meetings 1. Luckman attended 5 out of 6 meetings V. Ogier attended 0 out of2 meetings P. Jamieson attended 0 out of2 meetings A. O'Shea attended 5 out of5 meetings C. Greenwood attended 3 out of 6 meetings DIRECTORS AND EXECUTIVE OFFICERS EMOLUMENTS Directors are not paid any fees for services as a director. The Federation has a policy of reimbursing directors for travel expenses to board meetings. Since the end of the previous financial year, no Director of the Federation has received or become entitled to receive a benefit, by reason of a contract made by the Federation with the Director or with a firm of which he/she is a member or with a company in which he/she has a substantial financial interest. No director has an interest in a contract which the directors are entitled to a benefit which confers a right to call for or deliver shares in, or debentures of or interest in a registered scheme made available by the Federation or a related body corporate. INDEMNIFYING OFFICERS OR AUDITORS The Federation has paid a premium to insure directors and officers against liability for costs and expense incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of a director or officer of the Federation, other than conduct involving wilful breach of duty in relation to the Federation. The Federation has not given or entered into an agreement to indemnify any person who is or has been an officer or auditor ofthe Federation in relation to defending legal proceedings. This report is made in accordance with a resolution of the Board and is signed for and on behalf of the Directors. Signed on the f6LJay of January 2004 . ~~~~ ........... ............ Directo(- Nicl Black th \ rI ........ ~ ~ ...... . Director - Tony O'Shca 4 CO-OPERATIVE FEDERATION OF VICTORIA LTD OPERATING STATEMENT YEAR ENDED 30 JUNE 2003 2003 2002 Notes $ $ INCOME Grant Income 2 21,498 43,814 Seminar Fees 1,104 1,624 Interest Received 100 30 Membership Subscriptions 26,505 30,055 Publication Sales 1,505 4,076 Sundry Income 275 460 Annual Dinner 60 750 Workshops 5,118 Monash University 700 51,747 85,927 EXPENSES Annual Meeting 120 1,992 Auditors Remuneration 3 3,400 3,245 Banking Charges 91 144 Chairman's Expenses 1,394 1,718 Depreciation 82 363 Executive Officers Remuneration 4 19,036 Grant Expenditure 28,240 27,560 Honorariums 10 7,400 3,974 Insurance 3,311 2,596 Meeting Expenses 680 729 Seminar Expenses 2,281 Software Expenses 320 Postage 1,789 2,526 Printing, Publishing & Stationery 2,403 5,109 Sundry Expenses 727 754 Superannuation 1,400 Telephone, Fax & Internet 1,243 3,130 Training Reimbursement 950 Travel Reimbursements 118 Website Expenses 250 Workshops 660 54,509 75,226 OPERATING SURPLUS/(DEFICIT) (2,762) 10,701 The accompanying notes form part of the accounts. 5 CO-OPERATIVE FEDERATION OF VICTORIA LTD PROFIT AND LOSS ACCOUNT YEAR ENDED 30 JUNE 2003 Notes 2003 2002 $ $ Operating Surplus/(Deficit) before Income Tax (2,762) 10,701 Income Tax (Expense )lBenefit Attributable to Operating Deficit 5 1,577 (1,845) Operating Surplus/(Deficit) After Income Tax (1,185) 8,856 Retained Surplus at the beginning of the Financial Year 17,297 8,441 Retained Surplus at the end of the Financial Year 16,112 17,297 The accompanying notes form part of the accounts . ..... .......-~---.~ --~-.~.~ 6 CO-OPERATIVE FEDERATION OF VICTORIA LTD BALANCE SHEET AS AT 30 JUNE 2003 Notes 2003 2002 $ $ CURRENT ASSETS Cash at Bank 24,716 22,916 Stock of Publications 3,478 7,802 Sundry Debtors 1,610 600 Total Current Assets 29,804 31 18 NON-CURRENT ASSETS Investments -Community Enterprise Network (at cost) 10 10 CPS Ltd (at cost) 10 10 Office Furniture and Equipment (at WDV) 6 412 494 Future Income Tax Benefit 5 231 579 Total Non-Current Assets 663 1,093 TOTAL ASSETS 30,467 32,411 CURRENT LIABILITIES Sundry Creditors 1,078 3,364 Grant Income Not Yet Expended 11,621 8,119 Provision for Income Tax 1,925 Total Liabilities 12,699 13,408 NET ASSETS 17,768 19,003 SHAREHOLDERS EQUITY Share Capital 7 600 650 Forfeited Share Reserve 8 740 740 Statutory Reserve 316 316 Retained Surplus 16,112 17,297 Total Shareholders Equity 17,768 19,003 The accompanying notes form part ofthe accounts. 7 CO-OPERATIVE FEDERATION OF VICTORIA LTD STATEMENT OF CASHFLOWS YEAR ENDED 30 JUNE 2003 2003 2002 Notes $ $ Inflows Inflows (Outflows) (Outflows) CASH FLOWS FROM OPERATING ACTIVITIES Cash Receipts from operating activities 50,737 57,399 Cash Payments from operating activities (48,987) (86,194) Interest Received 100 90 Net Cash Provided (Used) by Operating Activities 9(b) 1,850 CASH FLOWS FROM INVESTING ACTIVITIES Payment for property, plant & equipment (857) Net Cash Provided/(Used) by Investing Activities (857) CASH FLOWS FROM FINANCING ACTIVITIES Redemption of share capital (50) (50) Share capital received 20 Net Cash Provided by Financing Activities (50) (30) Net increase/(decrease) in cash held 1,800 (29,592) Cash at the beginning of the financial year 22,916 52,508 Cash at the end of the financial year 9(a) 24,716 22,916 The accompanying notes form part of the accounts. 8 CO-OPERATIVE FEDERATION OF VICTORIA LTD NOTES TO AND FORMING PART OF THE ACCOUNTS YEAR ENDED 30 JUNE 2003 1. Statement of Accounting Policies a) Basis of Accounting The Co-operative Federation of Victoria Ltd is not a reporting entity because in the Directors' opinion there are unlikely to exist users who are unable to command the preparation of reports tailored so as to satisfY specifically all their information needs, and these accounts are therefore a "Special Purpose Financial Report" that has been prepared solely to meet the Co­ operatives Act 1996 requirements to prepare accounts. The accounts have been prepared in accordance with the applicable Accounting Standards and other mandatory professional reporting requirements and the requirements of the Co­ operatives Act 1996 with the exception that Accounting Standards AASB 1026 (Statement of Cash Flows) has not been adopted. The accounts have been prepared under the historical cost convention and, therefore, do not take into account changing money values or, except where stated, the current value of monetary assets. The accounting policies adopted are consistent with those applied in the previous year. b) Plant and Equipment Plant and equipment are included at cost. All assets are depreciated over their useful lives by the straight line method. c) Income Tax The Co-operative Federation of Victoria Ltd adopts the liability method of tax-effect accounting whereby the income tax expense shown in the profit and loss account is based on the operating profit before income tax adjusted for any permanent differences. Timing differences which arise due to the different accounting periods in which items of revenue and expenses are included in the determination of operating profit before income tax and taxable income, are brought to account as either a provision for deferred income tax or an asset described as future income tax benefit at the rate of income tax applicable to the period in which the benefit will be received or the liability will become payable. Future income tax benefits relating to timing differences are not brought to account unless realisation of the asset is assured beyond reasonable doubt. d) Stock Valuations The Co-operative Federation of Victoria Ltd decided to revalue their stock at a more realisable value in 2003. This explains the decrease in the closing stock balance as at 30 June 2003. 9 CO-OPERATIVE FEDERATION OF VICTORIA LTD NOTES TO AND FORMING PART OF THE ACCOUNTS YEAR ENDED 30 JUNE 2003 2003 2002 $ $ 2. Grant Income (i) Office of Fair Trading Unearned Income Brought Forward 8,119 15,413 Received during year 25,000 14,000 less: Unexpended at 30 June (11,621) (8,119) 21 21,294 Oi) Department ofNatural Resources Unearned Income Brought Forward 22,520 Received during year less: Unexpended at 30 June 22,520 Total Grant Income 21 43,814 3. Auditors' Remuneration Charging as Expense Auditors' remuneration (i) auditing of accounts -current year 770 770 (ii) other services 2,475 3,400 3,245 4. Executive Officers Remuneration Comprised: Salary 17,183 Travel Reimbursement I