Special Purpose Financial Report For the Financial Year Ended 30 June 2015

Transcription

1 Special Purpose Financial Report For the Financial Year Ended 30 June 2015 C O N T E N T S Directors Report 2 Statement of Comprehensive Income 3 Statement of Financial Position 4 Statement of Cash Flows 5 Statement of Changes in Accumulated Funds 6 Notes to the Financial Report 7 Statement by the Directors 17 Independent Auditor s Report 18

2 DIRECTORS REPORT The Directors present the financial report of Foodbank of Western Australia (Inc) for the year ended 30 June DIRECTORS The names of the Directors throughout the year and up to the date of this report are: Peter Mansell (Chair) Ian Rakich (Deputy Chair) Janet Curran Trevor Nisbett (Resigned 30 January 2015) Justin Little Kathy Cilkos John Carlson Doug Paling (Resigned 9 July 2014) Paul Smithall (Appointed on 26 February 2015) Adam Quinlan (Appointed on 27 August 2014) (Resigned on 19 September 2014) Directors have been in office since the start of the financial year to the date of this report, unless otherwise stated. PRINCIPAL ACTIVITIES The principal activity of the Association during the year was providing food to charitable agencies in Western Australia. No significant change in the nature of these activities occurred during the year. RESULTS The surplus from ordinary activities for the year amounted to $8,017,351 (2014: surplus of $3,728,780). Signed in accordance with a resolution of the Directors. Peter Mansell Chairman of Directors Dated 29 September 2015 Page 2 of 19

3 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME INCOME Notes Service Fees 2,904,390 2,612,452 Interest Received 119, ,318 Sponsorship & Donations 1,438,332 1,317,828 Grant Income 1(a) 1,790,540 1,937,892 Fundraising 1(a) 8,322,894 3,238,839 Other Revenue 254, ,457 TOTAL INCOME 14,830,121 9,778,786 EXPENDITURE Cost of Sales 764, ,085 Administration 568, ,806 Depreciation 402, ,353 Hire Purchase Charges 20,050 13,178 Specific Projects - HFFA 1(i) 1,985,137 2,121,968 Salary and Wages 2,244,690 2,037,859 Other Expenses 827, ,757 TOTAL EXPENDITURE 6,812,770 6,050,006 Operating Surplus 2 8,017,351 3,728,780 Other Comprehensive Income Other Comprehensive Income - - Total Comprehensive Income for the year attributable to the members of the Association 8,017,351 3,728,780 The accompanying notes form part of this Statement of Profit or Loss and Other Comprehensive Income Page 3 of 19

4 ASSETS Current Assets FOODBANK OF WESTERN AUSTRALIA (INC) STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015 Notes Cash 3 6,474,701 4,923,267 Trade and other receivables 4 602, ,209 Inventories 113,487 20,962 Held to maturity investments 6-3,500,000 Other assets 7 127, ,687 Assets classified as held for sale 8-1,317,954 TOTAL CURRENT ASSETS 7,318,190 10,505,079 Non-Current Assets Other assets 7 3,756,566 3,875,253 Property, plant and equipment 9 14,205,229 4,802,828 TOTAL NON-CURRENT ASSETS 17,961,795 8,678,081 TOTAL ASSETS 25,279,985 19,183,160 LIABILITIES Current Liabilities Trade and other payables ,659 1,213,376 Provision for employee entitlements 216, ,760 Hire purchase liability 135, ,504 Income received in advance 11 5,234,321 6,293,080 TOTAL CURRENT LIABILITIES 5,894,452 7,818,720 Non-Current Liabilities Provision for employee entitlements 51,974 48,232 TOTAL NON-CURRENT LIABILITIES 51,974 48,232 TOTAL LIABILITIES 5,946,426 7,866,952 NET ASSETS 19,333,559 11,316,208 Accumulated Funds Retained Surplus 19,333,559 11,316,208 TOTAL ACCUMULATED FUNDS 19,333,559 11,316,208 The accompanying notes form part of this Statement of Financial Position Page 4 of 19

5 STATEMENT OF CASH FLOWS` Notes CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and donors 6,387,336 6,269,792 Payments to suppliers and employees (6,253,828) (5,894,842) Interest received 119, ,141 Net Cash Provided By Operating Activities 5 253, ,091 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and equipment (10,606,147) (3,074,003) Receipt of sponsorship funds 8,424,232 4,637,237 Proceeds from withdrawal of Investment 3,500,000 - Net Cash Used In Investing Activities 1,318,085 1,563,234 ` CASH FLOWS FROM FINANCING ACTIVITIES Repayments for hire purchase agreements (20,050) (26,168) Net Cash Provided By Financing Activities (20,050) (26,168) Net Increase / (Decrease) in Cash and Cash Equivalents 1,551,434 2,290,157 Cash and Cash Equivalents at the Beginning of the Year 4,923,267 2,633,110 Cash and Cash Equivalents at the End of the Year 3 6,474,701 4,923,267 The accompanying notes form part of this Statement of Cash Flows Page 5 of 19

6 STATEMENT OF CHANGES IN ACCUMULATED FUNDS Notes Total $ Balance at 1 July ,587,428 Operating surplus for the year 3,728,780 Other comprehensive income for the year - Total comprehensive income for the year 11,316,208 Balance at 30 June ,316,208 Balance at 1 July ,316,208 Operating surplus for the year 2 8,017,351 Other comprehensive income for the year - Total comprehensive income 19,333,559 Balance at 30 June ,333,559 The accompanying notes form part of this Statement of Changes in Equity Page 6 of 19

7 1. Statement of significant accounting policies This financial report is a special purpose financial report prepared in order to satisfy the financial reporting requirements of the Australian Charities and Not-for-profit Commissions Act 2012 and the Associations Incorporations Act (WA) The Directors have determined that the Association is not a reporting entity. The financial report was authorised for issue by the Board of Directors on 29 September The financial report, except for the cash flow information, has been prepared on an accruals basis and are based on historic costs and do not take into account changing money values, except where specifically stated, current valuations of non-current assets. The following significant accounting policies that have been adopted in the preparation of the report is as follows: Accounting Policies a. Revenue Grant revenue Grant revenue is recognised in the statement of profit or loss and other comprehensive income when the associated expenditure is incurred. Grant revenue received in advance is recognised in the statement of financial position as income received in advance. If conditions are attached to the grant which must be satisfied before the Association is eligible to receive the contribution, the recognition of the grant as revenue will be deferred until those conditions are satisfied. Grant revenue received is in relation to the Healthy Food for All ( HFFA ) program. Donations Donations are recognised as revenue when received, except donations and sponsorship specifically for Property Plant and Equipment. Interest revenue Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial asset. Service fee Service fee revenue is from handling fees of goods recognised upon the delivery of the goods to the customers. Fundraising revenue Fundraising revenue received is in relation to the Capital Infrastructure Development Project recognised in the Statement Of Comprehensive Income when expenditure is incurred. All revenue is stated net of the amount of goods and services tax (GST). Page 7 of 19

8 b. Property, Plant and Equipment (continued) The carrying amount of property, plant and equipment is reviewed annually by management to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Property, plant or 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 All fixed assets except land are depreciated on the straight line basis over their estimated useful lives as follows: Class of Fixed Asset Depreciation Rate Buildings (Prime Cost) 2.50% Leasehold Improvements 10% Plant & Equipment 20% - 33% Furniture & Fittings 10% Motor Vehicles 6.67% - 20% The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An assets carrying amount is written down immediately to its recoverable amount if the asset s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are recognised immediately in profit or loss. c. Provision for employee entitlements Provision has been made in the financial statements for benefits accruing to employees in relation to annual leave, long service leave and workers compensation. 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 the present value of the estimated future cash outflows to be made by Foodbank of Western Australia (Inc) for those benefits. Other long term employee benefits The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the liability. The liability is measured as the present value of expected future payments to be made in respect of the services provided by employees up to the reporting date using projected unit credit method. Consideration is given to expect future wage and salary levels, experience of employee departures and periods of service. In determining the liability, consideration is given to employee wage increases and the probability that the employee may not satisfy vesting requirements. Page 8 of 19

9 Provision for employee entitlements (continued) Defined contribution superannuation expense Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred. d. Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. e. 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 gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the taxation authority is classified as operating cash flows. f. Income Tax The Association is a registered Not-For-Profit Association and is not liable for income tax. An exemption has been obtained from the Australian Tax Office. g. Trade and Other Payables Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Association during the reporting period which remain unpaid. The balance is recognised as a current liability with the amount being normally paid within 30 days of recognition of the liability. h. Held to maturity investments Held-to-maturity investments are non derivative financial assets with fixed or determinable payments and fixed maturities that the Association has the positive intention and ability to hold to maturity. Held -to-maturity financial assets are included in non-current assets, except for those with maturities less than 12 months from the end of the reporting period which are classified as current assets. Page 9 of 19

10 j. Assets Held for Sale FOODBANK OF WESTERN AUSTRALIA (INC) Assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale. Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Group s accounting policies. Thereafter, generally the assets, or disposal group, are measured at the lower of their carrying amount and fair value less cost to sell. Impairment losses on initial classification as held for sale and subsequent gains or losses on re-measurement are recognised in the profit and loss. Gains are not recognised in excess of any cumulative impairment loss. k. Current and non-current classification Assets and liabilities are presented in the statement of financial position based on current and non-current classification. An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is classified as current when: it is either expected to be settled in normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current. Page 10 of 19

11 l. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. Estimation of useful lives of assets The Association determines the estimated useful lives and related depreciation and charges for its property, plant and equipment. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or nonstrategic assets that have been abandoned or sold will be written off or written down. Impairment of non-financial assets other than goodwill and other indefinite life intangible assets The Association assesses impairment of non-financial assets at each reporting date by evaluating conditions specific to the Association and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions. Employee benefits provision As discussed in note 1, the liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account. Page 11 of 19

12 m. New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by Foodbank of Western Australia (Inc) for the annual reporting period ended 30 June Foodbank of Western Australia (Inc) has not yet assessed the impact of these new or amended Accounting Standards and Interpretations. Page 12 of 19

13 2. Operating Surplus Operating Surplus/(Loss) - Core Business (425,434) 98,623 Interest Income - Funds held for Infrastructure Development Project 119, ,318 Capitalised Infrastructure Development Income Recognised 8,322,894 3,238,839 8,017,351 3,728, Cash and Cash Equivalents For the purposes of the statement of cash flows, cash includes cash on hand and in banks and deposits at call. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows: Cash Float 4,250 4,050 Cash at bank - Cheque Account 60, ,125 Cash at Bank - Business Saver 4,335,941 1,749,367 Cash Management Account 55,229 55,149 Cash at Bank - Other Accounts 18,576 2,576 Term Deposits * 2,000,000 3,000,000 6,474,701 4,923,267 * Term deposits held for less or equal to 3 months for scheduled payments on the Infrastructure Development Project. 4. Trade and other receivables Trade Receivables 153, ,107 Other Receivables 4, ,106 Grant Revenue - Receivables 444, , , ,209 Page 13 of 19

14 5. Reconciliation of net cash from operating activities to Operating Surplus 2015 $ 2014 $ Operating Surplus 8,017,351 3,728,780 Non-cash flows in profit from ordinary activities: Depreciation 402, ,353 Prepaid Expense Amortised (118,687) (118,687) Capitalised Expenditure recognised as Income (7,004,939) (3,238,839) Change to operating assets and liabilities: (Increase) / decrease in trade and other receivables 21, ,244 (Increase) / decrease in inventories (92,525) (14,979) (Increase) / decrease in other assets (8,695) 116,402 Increase / (decrease) in trade and other payables (804,167) 302,521 Increase / (decrease) in current provisions 40,114 (14,207) Increase / (decrease) in provision for non-current provisions 3,743 3,014 Increase / (decrease) in income received in advance (203,285) (408,511) Cash Flows Provided By Operating Activities 253, , Held to Maturity Investments Term Deposits* *The amount relates to term deposits with maturity dates greater than 3 months but less than 12 months. - 3,500,000-3,500, Other Assets Current 127, ,687 Non-Current 3,756,566 3,875,253 3,883,947 3,993,940 The Association entered into a lease agreement with the Westralia Airports Corporation Pty. Limited on 29 June The agreement is for a 36 year lease with an option of extending to further 49 years. An upfront payment of $4,275,000 was paid. The amount of $118,687 per annum is transferred from non-current to current asset then expensed on monthly basis. Page 14 of 19

15 7. Other Assets (cont.) Prepaid Lease 118, ,687 Prepaid Insurance 8, Assets Classified as Held for Sale 127, ,687 On 31 March 2014, Foodbank of Western Australia Inc. entered a Selling Agency Agreement to place the property held at 63 Division Street, Welshpool WA for sale on the market. As a result, the underlying assets, being the land and building, were reclassified as a current asset valued at $1,317,954 being the lower of its carrying amount and fair value less costs to sell. On 5 November 2014 Foodbank of Western Australia Inc. sold the property for $2,820,000 resulting in a gain of $1,502,046. In accordance with provisions contained in Deed of Variation of Trust (11 February 2015) between Foodbank WA Inc. and Lotteries Commission the proceeds on the sale of Division Street were to be used in the development of the Perth Airport Warehouse Complex and accordingly were transferred to Income received in advance. 9. Property, plant and equipment Land and buildings at cost (1) 12,952,513 3,673,520 Less: accumulated depreciation (181,058) - 12,771,455 3,673,520 Plant, equipment & fixtures, at cost 1,070, ,037 Less: accumulated depreciation (461,003) (690,405) 609, ,632 Motor vehicles, at cost 1,122,933 1,181,595 Less: accumulated depreciation (305,551) (364,477) 817, ,118 Leasehold Improvements, at cost 9,894 11,183 Less: accumulated depreciation (3,479) (3,625) 6,415 7,558 TOTAL PROPERTY, PLANT AND EQUIPMENT 14,205,229 4,802,828 (1) The Lotteries Commission of Western Australia as Trustee of the Building at 23 Abbott Road Perth Airport hold a share of 7,939,795 units out of 13,192,051 units of the Current Market Value of the Building valued as at the date of transfer or sale as determined by a licenced Valuer. Page 15 of 19

16 10. Trade and other payables Trade payables 142, ,727 GST payable 119,870 - Other Payables 44, , ,659 1,213, Income received in advance Building Development Project 4,578,180 5,840,145 Other programs 656, , Contingent liabilities The Association had no contingent liabilities as at 30 June 2015 and 30 June Commitments 5,234,321 6,293,000 The Association had no commitments for expenditure as at 30 June 2015 and 30 June Events after the reporting period No matter or circumstance has arisen since 30 June 2015 that has significantly affected, or may significantly affect the Association's operations, the results of those operations, or the Association's state of affairs in future financial years. Page 16 of 19

17 DIRECTORS STATEMENT 30 JUNE 2015 The Directors have determined that the Association is not a reporting entity and that this special purpose financial report should be prepared in accordance with the accounting policies outlined in Note 1 to the financial statements. The attached special purpose financial report have been prepared for the purpose of complying with the Associations Incorporation Act 1987 and Division 60 of the Australian Charities and Not-for-profits Commission Act In the opinion of the Directors, the financial report: Presents true and fair view of the financial position of Foodbank of Western Australia Inc as at 30 June 2015 and its performance for the year ended that date; and At the date of this statement, there are reasonable grounds to believe that Foodbank of Western Australia Inc will be able to pay its debts as and when they fall due. This statement is made in accordance with a resolution of the Directors and is signed for and on behalf of the Directors by: Peter Mansell Chairman Signed on 29 September 2015 Page 17 of 19

18 INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF FOODBANK OF WESTERN AUSTRALIA (INC) Report on the Financial Report We have audited the accompanying financial report, being a special purpose financial report, of Foodbank of Western Australia (Inc) (the Association) which comprises the Statement of Financial Position as at 30 June 2015 and the Statement of Comprehensive Income, Statement of Changes in Accumulated Funds and Statement of Cash Flows for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the Statement by the Board. Responsibility for the Financial Report The Board of the Association is responsible for the preparation and fair presentation of the financial report and has determined that the basis of preparation described in Note 1 is appropriate to meet the requirements of the Australian Charities and Not-for-profits Commission Act 2012 ( ACNC Act ), the Associations Incorporation Act (WA) 1987 and the needs of its members. The Board s responsibility also includes such internal control as the Board determines is necessary to enable the preparation of a financial report that is free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we 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 judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, 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 includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the committee, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of Australian professional ethical pronouncements. Crowe Horwath Perth is a member of Crowe Horwath International, a Swiss verein. Each member of Crowe Horwath is a separate and independent legal entity. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees.

19 Auditor s Opinion In our opinion, the financial report of Foodbank of Western Australian (Inc) is prepared in accordance with Division 60 of the Australian Charities and Not-for-profits Commission Act 2012 and the Associations Incorporation Act (WA) 1987, including: (a) giving a true and fair view of the Association s financial position as at 30 June 2015 and of its financial performance and cash flows for the year ended on that date; and (b) complying with Australian Accounting Standards to the extent described in Note 1, and Division 60 of the Australian Charities and Not-for-profits Commission Regulation Basis of Accounting Without further modifying our opinion, we draw attention to Note 1 to the financial report, which describes the basis of accounting. The financial report has been prepared for the purpose of fulfilling the Association s financial reporting responsibilities under the Associations Incorporation Act (WA) 1987 and the Australian Charities and Not-for-profits Commission Act As a result, the financial report may not be suitable for another purpose. Crowe Horwath Perth Cyrus Patell Partner Signed at Perth, 29 September 2015