PRAHRAN MISSION ABN: FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

Transcription

1 PRAHRAN MISSION ABN: FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE

2 CONTENTS Financial Statements Statement of Comprehensive Income 1 Statement of Financial Position 2 Statement of Changes in Equity 3 Statement of Cash Flows 4 5 Responsible Entities' Declaration 19 Independent Audit Report 20 Page

3 Statement of Comprehensive Income Revenue 2 15,560,376 14,652,280 Other income 2 6,905 70,726 Employee benefits expense (10,173,590) (8,965,625) Depreciation and amortisation expense (607,178) (567,947) Program operation costs 3 (2,279,159) (2,320,720) Repairs and maintenance (538,486) (440,432) Contribution 18 (500,000) (235,000) Other expenses (416,810) (370,031) Note (14,515,223) (12,899,755) Surplus for the year 1,052,058 1,823,251 Other comprehensive income/(loss) Items that will be reclassified to profit or loss when specific conditions are met: Net gain/(loss) on revaluation of financial assets (59,447) 155,604 Other comprehensive income for the year/(loss) (59,447) 155,604 Total comprehensive income for the year 992,611 1,978,855 The accompanying notes form part of these financial statements. 1

4 Statement of Financial Position As at 30 June ASSETS CURRENT ASSETS Cash and cash equivalents 5 402, ,297 Trade and other receivables 6 315, ,568 Inventories 7 26,426 20,997 Other financial assets 8 6,006,677 5,154,968 Other assets 9 29,301 85,739 TOTAL CURRENT ASSETS 6,780,160 6,086,569 NON-CURRENT ASSETS Financial assets 8 3,583,712 3,343,161 Property, plant and equipment 10 11,985,618 12,350,597 TOTAL NON-CURRENT ASSETS TOTAL ASSETS Note 15,569,330 15,693,758 22,349,490 21,780,327 LIABILITIES CURRENT LIABILITIES Trade and other payables 11 1,132,341 1,174,710 Employee benefits , ,681 Other liabilities , ,895 TOTAL CURRENT LIABILITIES 2,482,162 2,908,286 NON-CURRENT LIABILITIES Employee benefits 12 88,216 85,540 TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS 88,216 85,540 2,570,378 2,993,826 19,779,112 18,786,501 EQUITY Retained surplus 17,150,220 16,098,162 Reserves 2,628,892 2,688,339 TOTAL EQUITY 19,779,112 18,786,501 The accompanying notes form part of these financial statements. 2

5 Statement of Changes in Equity Retained Surplus Asset Revaluation Surplus Financial Assets Reserve Balance at 1 July 16,098,162 2,700,365 (12,026) 18,786,501 Surplus for the year 1,052, ,052,058 Other comprehensive income - - (59,447) (59,447) Balance at 30 June 17,150,220 2,700,365 (71,473) 19,779,112 Total Retained Surplus Asset Revaluation Surplus Financial Assets Reserve Balance at 1 July ,274,911 2,700,365 (167,630) 16,807,646 Surplus for the year 1,823, ,823,251 Other comprehensive income , ,604 Balance at 30 June 16,098,162 2,700,365 (12,026) 18,786,501 Total The accompanying notes form part of these financial statements. 3

6 Statement of Cash Flows Note Cash from operating activities: Receipts from government, fees, donations and other revenue 15,858,589 15,932,113 Payments to suppliers and employees (15,011,889) (13,009,199) Interest received 11,294 11,312 Net cash provided by operating activities ,994 2,934,226 Cash flows from investing activities: Proceeds from sale of plant and equipment 40,752 76,326 Purchase of property, plant and equipment (276,046) (823,012) Purchase of investments (805,873) (2,003,200) Net cash used in investing activities (1,041,167) (2,749,886) Net increase in cash held (183,173) 184,340 Cash at beginning of financial year 585, ,957 Cash at end of financial year 5 402, ,297 The accompanying notes form part of these financial statements. 4

7 1 Summary of Significant Accounting Policies (a) General information The financial report covers Prahran Mission (the Mission) as an individual entity. The Mission, which is domiciled in Australia, is an agency of the Uniting Church in Australia and is not separately incorporated. The following is a summary of the material accounting policies adopted by the Mission in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated. (b) Basis of preparation The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Australian Charities and Notfor-profits Commission Act Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated. The financial report has been prepared on an accruals basis and is based on historical costs modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. (c) Comparatives When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. (d) Inventories Inventories are measured at cost adjusted when applicable for loss of service potential. Inventories received at no or nominal cost are initially recognised at current replacement cost at date of acquisition. (e) Property, plant and equipment Each class of property, plant and equipment is carried at cost as indicated less, where applicable, any accumulated depreciation and impairment losses. Property Freehold land and buildings are shown at cost. The carrying value is reviewed periodically to ensure the carrying value does not exceed the depreciated replacement cost. 5

8 1 Summary of Significant Accounting Policies continued (e) Property, plant and equipment continued Property continued Plant and equipment Plant and equipment are measured on the cost basis less depreciation. Depreciation The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated on a straight-line basis over the asset's useful life to the Mission commencing from the time the asset is held ready for use. Leasehold properties are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The estimated useful lives used for each class of depreciable assets are: Class of Fixed Asset Useful Life Buildings Furniture, Fixtures and Fittings Motor Vehicles Leasehold properties up to 40 years up to 5 years up to 5 years up to 30 years The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. (f) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks and other shortterm highly liquid investments with original maturities of three months or less. (g) Employee benefits Provision is made for the Mission's liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected 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 have been measured at present value of the estimated future cash outflows to be made for those benefits. These cash flows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows. (h) Income taxes The Mission is an income tax exempt charitable entity under Subdivision 50-B of the Income Tax Assessment Act

9 1 Summary of Significant Accounting Policies continued (i) Revenue Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods. Grant revenue is recognised in the income statement when it is controlled. When there are conditions attached to the grant revenue relating to the use of those grants for specific purposes it is recognised in the statement of financial position as a liability until such conditions are met. Interest revenue and distribution income from investments is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. Donations and bequests are recognised as revenue when received unless they are designated for a specific purpose, in which case they are carried forward as deferred income. Revenue from the rendering of services is recognised upon the delivery of the service to the customer. All revenue is stated net of the amount of goods and services tax (GST). (j) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. (k) Financial instruments Initial recognition and measurement Financial assets and financial liabilities are recognised when the Mission becomes a party to the contractual provisions to the instrument. For financial assets, this is the equivalent to the date that the Mission commits itself 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 is classified 'at fair value through profit or loss', in which case transaction costs are expensed to profit or loss immediately. Classification and subsequent measurement Financial instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation 7

10 1 Summary of Significant Accounting Policies continued (k) Financial instruments continued techniques are adopted. Amortised cost is calculated as: (a) (b) (c) (d) the amount at which the financial asset or financial liability is measured at initial recognition; less principal repayments; 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 less any reduction for impairment. The effective interest method is used to allocate interest income or interest expense over the relevant period and 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 reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss. The Mission does not designate any interest as being subject to the requirements of accounting standards specifically applicable to financial instruments. (i) Financial assets at fair value through profit or loss Financial assets are classified at fair value through profit or loss when they are either held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss. (ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period. (All other loans and receivables are classified as non-current assets.) (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Mission's intention to hold these investments to maturity. They are subsequently measured at amortised cost. 8

11 1 Summary of Significant Accounting Policies continued (k) Financial instruments continued Held-to-maturity investments are included in non-current assets, except for those which are expected to mature within 12 months are the end of the reporting period. (All other investments are classified as current assets.) If during the period the Mission sold or reclassified more than an insignificant amount of the held-tomaturity investments before maturity, the entire held-to-maturity investments category would be tainted and reclassified as available-for-sale. (iv) Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into 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 or determinable payments. Available-for-sale financial assets are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period. (All other financial assets are classified as current assets) (v) Financial liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method. Held-to-maturity investments These investments have fixed maturities, and it is the Mission's intention to hold these investments to maturity. Any held-to-maturity investments held by the Mission are stated at amortised cost using the effective interest rate method. Available-for-sale financial assets Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity. Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine fair value for all unlisted securities, including recent arm's length transactions, reference to similar instruments and option pricing models. 9

12 1 Summary of Significant Accounting Policies continued (l) Impairment of assets Assets are tested for recoverability whenever events of changes in circumstances indicate that its carrying value may not be fully recoverable. The Mission monitors the recoverability of assets, based on factors such as current market value, future asset utilisation, business climate and future undiscounted cash flows expected to result from the use of the related assets. The Mission's policy is to record an impairment loss in the period when it is determined that the carrying amount of the asset may not be recoverable. The impairment loss is calculated as the amount by which the carrying amount of the asset exceeds the undiscounted estimate of future cash flows from the asset. To 30 June, no impairment losses have been recorded. (m) Critical accounting estimates and judgments The Board evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and based on current trends and economic data, obtained both externally and within the Mission. (n) Economic dependence Prahran Mission is dependent on the Department of Health and Human Services for a significant proportion of its revenue used to operate the Mission. At the date of this report the Board has no reason to believe the Department of Health and Human Services will not continue to support Prahran Mission. (o) Significant events In June, the Uniting Church in Australia Synod of Victoria and Tasmania Standing Committee passed a resolution that the Uniting Care Agencies (including Prahran Mission), governed by independent boards, would come together under a single governance structure. It is intended that the governance restructure will become effective in the later part of the year and will be effected by the amalgamation of the Uniting Care Agencies to form one new entity with a single governance structure. The new entity will be responsible for the provision of the community services of the Uniting Church Synod of Victoria and Tasmania. All existing services of the Uniting Care Agencies will continue under this new governance structure. (p) Adoption of new and revised accounting standards During the current year, the Mission adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory. The adoption of these Standards has not had a significant impact on the recognition, measurement and disclosure of transactions. (q) New accounting standards for application in future periods The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods. The Mission has decided against early adoption of these Standards, but does not expect the adoption of these standards to have any significant impact on the reported position or performance of the Mission. 10

13 2 Revenue and Other Income Revenue - sale of goods 1,595,292 1,420,225 - provision of services 213, ,778 - interest income 357, ,587 - Uniting Church contributions 64,189 80,829 - operating grants 11,525,392 10,440,303 - donations 1,100,840 1,093,973 - bequests 366, ,671 - other revenue 337, ,914 Total Revenue 15,560,376 14,652,280 Other Income - net gain on disposal of plant and equipment 6,905 70,726 3 Program Operation Costs - cartage 14,797 8,894 - consultants 432, ,518 - client related costs and purchases 670, ,699 - food supplies 384, ,526 - materials 3,358 5,258 - motor vehicle expenses 160, ,791 - office and administration 500, ,909 - travel 7,782 6,049 - utilities 78,549 72,115 - audit and accounting fees 20,500 20,280 - other 5,611 8,681 Total program operations costs 2,279,159 2,320,720 4 Other Expenses Other expenses include the following specific expense: - rental expense on operating leases 193, ,608 5 Cash and Cash Equivalents Cash on hand 8,100 6,450 Cash at bank 394, ,847 Total cash and cash equivalents 402, ,297 11

14 6 Trade and Other Receivables Note CURRENT Trade receivables 284, ,537 Provision for impairment (10,000) (10,000) Net trade receivables 274, ,537 Other receivables 40,707 38,031 Total trade and other receivables 315, ,568 Current trade receivables are generally on 30 day terms. It is expected that these balances will be received when due. The balances do not contain any assets that are not impaired and are past due. 7 Inventories CURRENT At Cost Finished goods 26,426 20,997 8 Other Financial Assets Designated at Fair Value Uniting Church growth portfolio - non-current 3,583,712 3,343,161 Available-for-sale financial assets comprise of investments in UCA growth portfolio. There are no fixed returns or fixed maturity date attached to these investments. Available for sale financial assets 3,583,712 3,343,161 Held-to-maturity financial assets 8(a) 6,006,677 5,154,968 9,590,389 8,498,129 (a) Held-to-maturity Investments Comprise: UCA Cash Portfolio Education fund 93,317 90,576 UCA Cash Portfolio Voices Vic Future Fund 600,049 - UCA Cash Portfolio 5,313,311 5,064,392 UCA Cash Portfolio - Current 6,006,677 5,154,968 9 Other Assets CURRENT Prepayments 29,301 85,739 12

15 10 Property, Plant and Equipment LAND AND BUILDINGS Freehold land at cost 211 Chapel St Prahran 2,350,000 2,350, Malvern Rd Prahran 1,000,000 1,000,000 Total freehold land 3,350,000 3,350,000 Buildings and improvements at cost 211 Chapel St Prahran 8,258,884 8,234, Malvern Rd Prahran 350, ,000 Accumulated depreciation (1,584,287) (1,364,990) Total buildings 7,024,597 7,219,614 Total land and buildings 10,374,597 10,569,614 PLANT AND EQUIPMENT Leasehold properties At cost 1,053,210 1,064,214 Accumulated depreciation (344,690) (316,113) Total leasehold properties 708, ,101 Furniture, fixture and fittings At cost 1,834,109 1,772,211 Accumulated depreciation (1,348,767) (1,214,887) Total furniture, fixture and fittings 485, ,324 Motor vehicles At cost 865, ,855 Accumulated depreciation (448,616) (377,297) Total motor vehicles 417, ,558 Total plant and equipment 1,611,021 1,780,983 Total property, plant and equipment 11,985,618 12,350,597 Leasehold properties include buildings in Glen Waverley and Blackburn South on land leased from Monash City Council and the Uniting Church respectively. 13

16 10 Property, Plant and Equipment continued (a) Movement in carrying amounts Movement in the carrying amount for each class of property, plant and equipment between the beginning and the end of the current financial year Freehold Land Buildings and Improvements Leasehold Properties Furniture, Fixtures and Fittings Motor Vehicles Current Year Balance at the beginning of year 3,350,000 7,219, , , ,558 12,350,597 Additions - 24,280 3, ,431 90, ,046 Disposals - written down value (33,847) - (33,847) Depreciation expense - (219,297) (43,346) (195,566) (148,969) (607,178) Carrying amount at the end of year Total 3,350,000 7,024, , , ,159 11,985,618 Prior Year Balance at the beginning of year 3,350,000 7,416, , , ,907 12,101,132 Additions - 18, , , , ,012 Disposals - written down value (5,600) (5,600) Depreciation expense - (214,682) (30,127) (189,935) (133,203) (567,947) Carrying amount at the end of year 3,350,000 7,219, , , ,558 12,350,597 (b) Beneficial use The land and buildings recorded on the statement of financial position of the Mission are registered in the name of The Uniting Church in Australia Property Trust (Victoria). The Mission has beneficial use of the properties for the purpose of running the Mission's programs but at the same time, the Mission is responsible for any renovations and maintenance. 11 Trade and Other Payables CURRENT Unsecured liabilities Trade payables 379, ,005 Sundry payables and accrued expenses 752, ,705 Total trade and other payables 1,132,341 1,174,710 14

17 12 Employee Benefits Current liabilities Provision for long service leave 273, ,628 Provision for annual leave 661, ,053 Total current employee Benefits 935, ,681 Non-current liabilities Provision for long service leave 88,216 85,540 Total current employee Benefits 88,216 85, Other Liabilities Unexpended grants Specific purpose donations, trusts and others 414, ,895 Unexpended grants relate to amounts for a specific purpose and are recognised in revenue when the related expenses are incurred. 14 Capital Management The Board manages cash to ensure that adequate cash flows are generated to fund the operations of the Mission. Management procedures include estimation of cash flows and future cash requirements. 15 Reserves (a) Asset revaluation reserve The asset revaluation reserve was used to record increments and decrements in the value of noncurrent assets. The reserve reflects historical revisions to the carrying value of land and buildings. (b) Financial assets reserve The financial assets reserve records revaluations of available for sale financial assets. 16 Operating Lease Commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements Payable - minimum lease payments - not later than 12 months 49,877 79,472 - between 12 months and 5 years 108, , , ,830 Operating lease commitments consist of the leases on offices. 15

18 17 Cash Flow Information Reconciliation of result for the year to cash flows from operating activities Surplus for the year 1,052,058 1,823,251 Non-cash flows in surplus Depreciation 607, ,947 Net gain on disposal of property, plant and equipment (6,905) (70,726) Reinvested interest and distribution revenue (345,834) (333,275) Changes in assets and liabilities (Increase)/decrease in trade and term receivables (76,064) 57,048 (Increase)/decrease in prepayments 56,438 (41,737) (Increase)/decrease in inventories (5,429) (8,455) Increase/(decrease) in trade payables and accruals (42,369) 373,950 Increase/(decrease) in unexpended grants (404,105) 488,440 Increase/(decrease) in employee benefits 23,026 77,783 Cash flows from operations 857,994 2,934, Related Party Transactions During the year the Mission paid for insurance to Uniting Church of Australia 34,431 (: 50,004) and incurred a Synod levy of 71,309 (: 76,324). Prahran Mission received from the Uniting Church of Australia contributions of 92,483 (: 73,990). The amounts invested with UCA Cash Portfolio and UCA Growth Portfolio are disclosed in Note 8. No remuneration or other benefits were received by members of the Board of Governance with the exception of salary paid to employees who served on the Board in their capacity as an employee of the Mission. The Mission contributed 500,000 (: 235,000) to St KIlda Parish Mission towards the capital works at 101 Carlisle Street, St Kilda. 19 Financial Instruments Prahran Mission's financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable. A finance committee consisting of Board members meet on a regular basis to analyse financial risk exposure and to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts. The main risks the Mission is exposed to through its financial instruments are interest rate risk, liquidity risk and credit risk. 16

19 19 Financial Instruments continued (a) Interest rate risk Exposure to interest rate risk arises on financial assets and financial liabilities recognised at reporting date whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. At 30 June Prahran Mission does not believe it is exposed to any material interest rate risk. (b) Credit risk The maximum exposure to credit risk by class of recognised financial assets at balance date, excluding the value of any collateral or other security held, is equivalent to the carrying value and classification of those financial assets (net of any provisions) as presented in the statement of financial position. Prahran Mission has no significant concentration of credit risk. (c) Liquidity risk - financial liability The table below reflects an undiscounted contractual maturity analysis for financial liabilities. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates and does not reflect management's expectations that banking facilities will be rolled forward. The amounts disclosed in the table are the undiscounted contracted cash flows and therefore the balances in the table may not equal the balances in the statement of financial position due to the effect of discounting. Financial liability maturity analysis - Non-derivative Within 1 Year Total Financial liabilities due for payment Trade and other payables (excluding statutory payables) 881, , , ,792 Total contractual outflows 881, , , ,792 The timing of expected outflows is not expected to be materially different from contracted cash flows. 20 Key Management Personnel Compensation Short-term Benefits Postemployment Benefit Total Total compensation 771,553 66, ,650 Total compensation 694,284 64, ,300 17

20 21 Members of the Board of Governance Mr P Prasser Mr D Airey Dr C Harvey Mr R Kent Dr. N Abbott Ms A Brebner Ms I Daya Mr J McMorrow Mr Q Pawson 22 Events after the Reporting Date No events or circumstances have arisen since the end of the year that significantly affected or may affect the operations of the Mission. 23 Mission Details Registered office The registered office of the Mission is: Prahran Mission 211 Chapel St Prahran VIC 3181 The principal activity of the Mission is the direct relief of poverty and hardship and the provision of support services to people with severe and long term mental illness and subsequent psychiatric disabilities. 18

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