Port Phillip s dolphins share their home with 5 million people

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3 Port Phillip s dolphins share their home with 5 million people Dolphin Research Institute Ltd 2018 Annual Report and Audited Accounts CONTENTS Directors Statement 4 Financial Overview 9 Auditors Independence Declaration 11 Statement of Comprehensive Income 12 Statement of Financial Position 13 Statement of Change of Equity 14 Statement of Cash Flows 15 Notes to the Financial Statements 16 Directors Declaration 26 Independent Auditor Report 27

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11 AUDITOR S INDEPENDENCE DECLARATION UNDER SECTION OF THE AUSTRALIAN CHARITIES AND NOT-FOR-PROFITS COMMISSION ACT 2012 TO THE DIRECTORS OF DOLPHIN RESEARCH INSTITUTE LIMITED I declare that, to the best of my knowledge and belief, during the year ended 30 June 2017 there have been: i. no contraventions of the auditor independence requirements as set out in division 60 of the Australian Charities and Not-for-profits Commission Act 2012 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. Flinders Partners Group Gregory J Waterland - Chartered Accountant Date Level 1, 405 Nepean Highway Frankston Vic 3199 Page 11 of 28

12 DOLPHIN RESEARCH INSTITUTE INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2018 Note Revenue Employee benefits expense 3 (316867) (318044) Depreciation and amortisation expense 3 (8053) (7327) Research Costs (9624) (9607) Fuel, light and power expense (1006) (1744) Rental expense 3 (37932) (36754) Training expense (1591) (100) Audit, legal and consultancy expense 13 (4500) (4500) Administration expense (32072) (29520) Education program Costs (44790) (32898) Fundraising expense (5245) (17031) Profit (loss) before income tax (100417) Income tax expense - - Profit (loss) for the year (100417) Profit (loss) attributable to members of the entity (100417) The accompanying notes form part of these financial statements. Page 12 of 28

13 DOLPHIN RESEARCH INSTITUTE STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018 Note ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Borrowings Provisions Other TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Borrowings Provisions TOTAL NON-CURRENT LIABILITIES - - TOTAL LIABILITIES NET ASSETS EQUITY Retained earnings Reserves TOTAL EQUITY Page 13 of 28

14 DOLPHIN RESEARCH INSTITUTE The accompanying notes form part of these financial statements. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2018 Note Retained Earnings Financial Assets Reserve Revaluation Surplus Total Balance at 1 July Total comprehensive income for the year Profit attributable to members Balance at 30 June Balance at 1 July Total comprehensive income for the year Profit (loss) attributable to members (100417) - (100417) Balance at 30 June Page 14 of 28

15 DOLPHIN RESEARCH INSTITUTE STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2018 Note CASH FLOWS FROM OPERATING ACTIVITIES Receipts from members and supporters Payments to suppliers and employees (434924) (416183) Interest received Interest paid (29) Net cash generated from operating activities (153841) CASH FLOWS FROM INVESTING ACTIVITIES Payment for property, plant and equipment (235) (19504) Proceeds from sale of vehicle Net cash generated by/(used in) investing activities (235) (19049) CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in borrowings - (80) Net cash generated by/(used in) financing activities - (80) Net increase in cash held (154076) Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year The accompanying notes form part of these financial statements. Reconciliation of Net Cash provided by / used in operating Activities Operating surplus (loss) Depreciation (100417) Loss (profit) on disposal of equipment - (455) Changes in assets and liabilities (Increase) decrease in trade and other debtors (30011) (increase)decrease in merchandise 1119 (3524) Increase(decrease) in trade creditors and accruals (10121) Increase(decrease) in other creditors (59082) Increase(decrease) in employee entitlements 1950 (11892) Increase(decrease) in sundry provisions Net Cash provided by (used in) operating activities (153841) Page 15 of 28

16 DOLPHIN RESEARCH INSTITUTE The accompanying notes form part of these financial statements. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation Dolphin Research Institute (DRI) is a company limited by Guarantee, incorporated and domiciled in Australia. The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards Reduced Disclosure Requirements of the Australian Accounting Standards Board and the Corporations Act The company is a not-forprofit entity for financial reporting purposes under Australian Accounting Standards. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise. The financial statements, except for the cash flow information, have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest dollar. Accounting Policies a. Revenue Grant revenue is recognised in the statement of comprehensive income when the entity obtains control of the grant and it is probable that the economic benefits gained from the grant will flow to the entity and the amount of the grant can be measured reliably. If conditions are attached to the grant which must be satisfied before DRI is eligible to receive the contribution, the recognition of the grant as revenue will be deferred until those conditions are satisfied. Where the grant relates only to the ongoing programs of the Institute the grant is recognised as income on receipt. When grant revenue is received whereby the entity incurs an obligation to deliver economic value directly back to the contributor, this is considered a reciprocal transaction and the grant revenue is recognised in the statement of financial position as a liability until the service has been delivered to the contributor, otherwise the grant is recognised as income on receipt. Dolphin Research Institute Limited may receive non-reciprocal contributions of services from various parties for zero or a nominal value. These contributions are not recognised in the statement of financial position. Such items are acknowledged if applicable in the notes to the accounts. Donations and bequests are recognised as revenue when received. Interest revenue is recognised using the effective interest method, which for floating rate financial assets is the rate inherent in the instrument. Revenue from the rendering of a service is recognised upon the delivery of the service to the customers. All revenue is stated net of the amount of goods and services tax (GST). b. Merchandise stocks Inventories are measured at the lower of cost and current replacement cost. Inventories held for distribution are measured at cost adjusted, when applicable, for any loss of service potential. c. Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value as indicated, less, where applicable, accumulated depreciation and any impairment losses. Page 16 of 28

17 DOLPHIN RESEARCH INSTITUTE NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Plant and equipment Plant and equipment are measured on the cost basis unless otherwise stated and are therefore carried at cost less accumulated depreciation and any accumulated impairment losses. In the event the carrying amount of plant and equipment is greater than its estimated recoverable amount, the carrying amount is written down immediately to its estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. Plant and equipment that have been contributed at no cost, or for nominal cost, are valued and recognised at the fair value of the asset at the date it is acquired. Depreciation The depreciable amount of all fixed assets, is depreciated on a straight line basis over the asset s useful life to the entity commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Research and Office equipment Software Depreciation Rate 10 40% 20-40% The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings. d. Leases Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset (but not the legal ownership) are transferred to the entity, are classified as finance leases. Dolphin Research institute currently has no finance leases. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses on a straight-line basis over the lease term. e. Impairment of Assets At the end of each reporting period, the entity assesses whether there is any indication that an asset may be impaired. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset s fair value less costs to sell and value in use, to the asset s carrying amount. Any excess of the asset s carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (eg in accordance with the revaluation model in AASB 116). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard. Where it is not possible to estimate the recoverable amount of an individual asset, the entity estimates the recoverable amount of the cash-generating unit to which the asset belongs. f. Employee Benefits Provision is made for the company s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that represent current liabilities and liable to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year are measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may not satisfy vesting requirements. g. Cash and Cash Equivalents Page 17 of 28

18 DOLPHIN RESEARCH INSTITUTE NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and cash equivalents include cash on hand, deposits held at call with banks, other shortterm highly liquid investments with original maturities of three months or less, and bank overdrafts. h. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position. Cash flows are presented on a net basis. The GST components of cash flows arising from all activities which are recoverable from, or payable to, the ATO are presented as an increase or decrease in trade or other creditors. i. Income Tax No provision for income tax has been raised as the entity is exempt from income tax under Div 50 of the Income Tax Assessment Act j. Provisions Provisions are recognised when the entity has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions recognised represent the best estimate of the amounts required to settle the obligation at the end of the reporting period. k. Comparative Figures Where required by Accounting Standards or other circumstances comparative figures have been adjusted to conform to changes in presentation for the current financial year. Where this has occurred mention has been made in the relevant note. l. Trade and Other Payables Trade and other payables represent the liabilities for goods and services received by the company during the reporting period that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. m. Critical Accounting Estimates and Judgments The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company. n. Economic Dependence Dolphin Research Institute is not dependent on any one source for the majority of revenue used to operate the business. Revenue is received from various philanthropic sources, Government Grants and the Institute s own fund raising activities and programs. At the date of this report the Board of Directors has no reason to believe that this situation will not continue. Page 18 of 28

19 DOLPHIN RESEARCH INSTITUTE NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 NOTE 2: REVENUE AND OTHER INCOME Revenue Revenue from (non-reciprocal) government grants and other Gifts: federal government grants state government grants - - other organisations Other revenue: Educational Programs Fundraising Other Income Gain on disposal of property, plant and equipment interest received Unrelated Parties Total Revenue NOTE 3: EXPENSE ITEMS Significant Expenses Employee benefits expense: - Salaries contributions to defined contribution superannuation funds Movement in Leave provisions (11892) Depreciation and amortisation: Research Equipment Furniture and equipment Software Total depreciation and amortisation Bad and doubtful debts: trade and other receivables - - Rental expense on operating leases Page 19 of 28

20 DOLPHIN RESEARCH INSTITUTE NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 NOTE 4: CASH AND CASH EQUIVALENTS CURRENT Cash at bank Cash on hand NOTE 5: TRADE AND OTHER RECEIVABLES Note CURRENT Trade receivables Provision for impairment 5a - - Total current trade and other receivables a. Provision for Impairment of Receivables Movement in the provision for impairment of receivables is as follows: $ Provision for impairment as at 30 June 2016 Charge for year - Written off - Provision for impairment as at 30 June Charge for year - Written off - Provision for impairment as at 30 June The directors consider that all trade receivables disclosed in the financial statements at 30 June 2018 will be received by the Institute. NOTE 6: INVENTORIES CURRENT At cost: Merchandise Page 20 of 28

21 DOLPHIN RESEARCH INSTITUTE NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 NOTE 4: CASH AND CASH EQUIVALENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 NOTE 7: OTHER ASSETS CURRENT Prepayments NOTE 8: PROPERTY, PLANT AND EQUIPMENT PLANT AND EQUIPMENT Office equipment and Furniture: At cost Less accumulated depreciation (31532) (30526) Research Equipment: At Directors Valuation At Cost Less Accumulated depreciation (62627) (55703) Software: At Cost Less Accumulated depreciation (2376) (2252) Total property, plant and equipment Movements in Carrying Amounts Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: 2017 Office Equipment Research Equipment Software Total Balance at the beginning of the year Additions at cost Page 21 of 28

22 DOLPHIN RESEARCH INSTITUTE NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 NOTE 7: OTHER ASSETS Additions at fair value Disposals Depreciation expense (1005) (6924) (124) (8053) Carrying amount at the end of the year NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017 NOTE 8: PROPERTY, PLANT AND EQUIPMENT Asset Revaluations Research equipment held by the institute on 30 June 2006 was revalued by the directors at that date. The valuation was based on the director s assessment of fair value at that time. No subsequent revaluations have been made of any assets held by the Institute. NOTE 9: TRADE AND OTHER PAYABLES Note CURRENT Trade payables GST liabilities Other current payables NOTE 10: BORROWINGS Note CURRENT Employee Loans - - NON-CURRENT Lease liabilities - - Total borrowings Leased liabilities are secured by the underlying leased assets. Page 22 of 28

23 NOTE 11: PROVISIONS DOLPHIN RESEARCH INSTITUTE Employee Benefits Rent Increase Opening balance at 1 July Movement in provisions Balance at 30 June Analysis of total provisions Current Non-current Provision for Long-term Employee Benefits A provision has been recognised for employee entitlements relating to long service leave. For ease of calculation, entitlements have been calculated based on time due at 30 June 2018 by the employee s most recent pay rate. The probability of long service leave being taken is based on historical data. The measurement and recognition criteria relating to employee benefits have been included in Note 1 to these financial statements. Long service leave is currently provided for all employees with 7 years or more service with the Institute. NOTE 12: OTHER LIABILITIES Income in Advance: Income in advance Represents Grant and education contract income received for which no service has been provided at financial year end. The income will be recognised as the service is provided in accordance with the accounting policy as set out in Note 1(a). Page 23 of 28

24 NOTE 13: AUDITORS REMUNERATION DOLPHIN RESEARCH INSTITUTE Remuneration of the auditor of the company for: Auditing the financial report Other services NOTE 14: LEASING COMMITMENTS Operating Lease Commitments Non-cancellable operating leases contracted for but not recognised in the financial statements Payable minimum lease payments: not later than 12 months later than 12 months but not later than two years later than two years but not later than five years later than five years The property lease commitments are non-cancellable operating leases contracted for but not capitalised in the financial statements. The property lease has a three-year term with set 4% per annum increases. The amounts disclosed do not include rentals in respect of options under the lease for further terms that have not been exercised at the date of the report. NOTE 15: CONTINGENT LIABILITIES AND CONTINGENT ASSETS Estimates of the potential financial effect of contingent liabilities that may become payable: Claims: - - NOTE 16: EVENTS AFTER THE REPORTING PERIOD The directors are not aware of any significant events since the end of the reporting period that would have a significant effect requiring adjustment of the financial statements as at 30 June Page 24 of 28

25 NOTE 17: OTHER RELATED PARTY TRANSACTIONS DOLPHIN RESEARCH INSTITUTE During the year the executive director and or staff may advance various amounts to the company to meet expenses. Where applicable these amounts are disclosed as borrowings and reimbursed as cash flow allows. NOTE 18: FINANCIAL RISK MANAGEMENT The company s financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable, accounts payable, and leases. The company s policies with respect to these items are those adopted by business in Australia generally. Liquidity risk is managed by monitoring cash flows and ensuring that the company has adequate reserves to meet expenses as and when they fall due. The carrying amounts for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows: Note Financial assets Cash and cash equivalents Loans and receivables Total financial assets Financial liabilities Financial liabilities at amortised cost: trade and other payables Borrowings Total financial liabilities NOTE 19: RESERVES Revaluation Surplus The revaluation surplus records the revaluations of non-current assets. Page 25 of 28

26 DOLPHIN RESEARCH INSTITUTE DIRECTORS DECLARATION In accordance with a resolution of the directors of Dolphin Research Institute, the directors of the entity declare that: 1. The financial statements and notes, as set out on pages 12 to 25 in accordance with the Corporations Act 2001 and: a. comply with Australian Accounting Standards; and b. give a true and fair view of the financial position as at 30 June 2018 and of the performance for the year ended on that date of the entity. 2. In the directors opinion there are reasonable grounds to believe that the entity will be able to pay its debts as and when they become due and payable. Page 26 of 28

27 DOLPHIN RESEARCH INSTITUTE Independent Auditor s Report Report on the Audit of the Financial Report Opinion We have audited the financial report of Dolphin Research Institute (the company), which comprises the statement of financial position as at 30 June 2018, the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors declaration. In our opinion the accompanying financial report of Dolphin Research Institute is in accordance with division 60 of the Australian Charities and Not-for-profits Commission Act 2012, including: (i) giving a true and fair view of the company's financial position as at 30 June 2018 and of its financial performance for the year then ended; and (ii) complying with Australian Accounting Standards and division 60 of the Australian Charities and Not-for-profits Commission Regulation Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the company in accordance with the ethical requirements of the accounting profession and Ethical Standards Board s APES 110 Code of Ethics for Professional Accountants (the code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Information Other than the Financial Report and Auditor s Report Thereon The directors are responsible for the other information. The other information comprises the information included in the company s annual report for the year ended 30 June 2018, but does not include the financial report and our auditor s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors 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 in accordance with Australian Accounting Standards and the Australian Charities and Not-for-profits Commission Act 2012 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. Auditor s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Page 27 of 28

28 DOLPHIN RESEARCH INSTITUTE - Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit 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 company s internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the company to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the company audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Signed on : Gregory J Waterland, Chartered Accountant Flinders Partners Group level 1, 405 Nepean Highway Frankston Vic 3199 Page 28 of 28