THE EAST AFRICAN FUND INCORPORATED ABN FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017

Transcription

1 THE EAST AFRICAN FUND INCORPORATED ABN FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017 Armidale Office For Professional Advice Regarding Glen Innes Office Business and Taxation Management Self Managed Superannuation Funds Narrabri Office Audit & Advisory Services Tamworth Office Succession Planning Financial Planning Liability limited by a scheme approved under Professional Standards Legislation.

2 ABN Financial Report For the year ended 30 June 2017 Contents to the Financial Report Committees report... 1 Chairman s report... 1 Auditor s declaration of independence... 5 Statement of profit or loss and other comprehensive income... 6 Statement of financial position... 7 Statement of changes in funds... 8 Statement of cash flows... 9 Notes to and forming part of the financial statements Statement by members of the committee Chairman s Declaration Independent auditor s report

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4 Chairman s report It is a Monday night in April and the seven Rotary Clubs of Ballarat have gathered for a rare joint meeting. What brings over 250 people together tonight is the opportunity to hear Gemma Sisia tell her story a story of building a school in Africa on two and a half acres to educate some local kids. Many have already heard how that first building has now expanded into three campuses and educates over 1,800 students. What really grabs the audience s attention though on this chilly night is Winrose Mollel. A recent graduate, Winnie lost her mother at a young age but still managed to graduate from a government primary school with marks sufficient to gain entry to St Jude s. The work ethic of Winrose had to be seen to be believed; and here was her reward a trip to Australia and the chance to tell her story. But one learns to never think the story is as simple as Winnie s journey taking her from a Tanzanian farm plot to a Ballarat Rotary event. While in Australia, Winrose received confirmation that she had gained entry to Trinity College in Connecticut USA on a scholarship through the School s partnership with MasterCard. Arusha to Ballarat to Hartford Connecticut how amazing that these children of Tanzania are now circling the globe as full participants of the interconnected world! The inspiration and hard work of Gemma Sisia, the staff, students and graduates (like Winrose) of St Jude s is what gives me great pleasure to present my seventh report to members of The East African Fund (EAF). Engaging the Australian Community - with a slightly new name. There is always plenty to report when one is partnered with an undertaking such as The School of St Jude. Every year there is the continued growth and development of the 1,800 students at the School. There is the extraordinary growth of the Beyond St Jude s program. And, back here in Australia, we have even had a regulator write to us to tell us that EAF also needed to graduate. EAF was established by Gemma s father in 1998, some four years before the School first opened its doors and was registered under the auspices of the NSW Department of Fair Trading. They wrote to us last November that EAF is now too large to be registered as an incorporated association. We embarked on a process of establishing a new entity with an almost identical name and on July 17th The East African Fund Limited was born, taking over the mantle from The East African Fund Incorporated. The new entity takes on the identical vision and mission of the old. 2

5 Chairman s report In the ongoing quest to keep our supporters up-to-date on events at the School, Gemma and Winrose swung through both the East and West coasts of Australia in March and April. Notably, almost all of the public events had to put up the House Full signs. There was both new interest from people who had seen the School featured on 60 Minutes the previous October and ongoing interest from our loyal supporters of so many years standing. The School of St Jude In May I was fortunate to attend the third graduation ceremony at the School. This colourful joy-filled event should really be a must see for any sponsor who has the resources and wherewithal to visit Tanzania. The day ran like clockwork - in fact the ceremony even ended slightly early! The speeches were of the expected high quality however it was the African features that really entertained the 80 or so International guests. Only Tanzanians can include a goat and a cow in what is a very classy event! After two years of finding its way, the Beyond St Jude s program really took off this year with a record 116 graduates participating in the one year community service internship program. Incredibly those who are at government schools are teaching close to 23,000 students who would otherwise not have access to any form of instruction for those subjects. Winrose, mentioned above, is not the only graduate to travel far for her education. Four St Jude s graduates are now studying in the USA, seven in Uganda, as well as one each in Russia, Zimbabwe, Mauritius and Kenya the remainder are studying in Tanzania. Fundraising We have six board meetings a year and the financial update is always a gratifying part of the agenda as we hear that the supporter base continues to step up and fund the growth of the School. This support amounted to just over $7 million in 2017 up from $6.5m in As before, more than 97 cents in each dollar is available to fund the education of Tanzanian children thanks to the considerable efforts of the mostly volunteer team here in Australia. A surplus of funds these last two years has allowed us to establish the Future Fund to underpin the long-term sustainability of the School. Gemma is a resilient fundraiser with a long-term commitment to the School. When we admit Grade 1 students to the School we know the students have a 13-year school education ahead of them a journey we wholeheartedly believe changes lives. And our desire to influence the Tanzanian education system is unwavering as we strive for multi-generational transformation. 3

6 Chairman s report The funds invested in the Future Fund are there to underpin the long-term sustainability of the School and act as support for the growing aspirations that school management, the Tanzanian and Australian boards and you, the supporters, have for The School of St Jude. We treat our role in monitoring and evaluating the use of your funds seriously. The committee meets regularly and we are in almost daily contact with the School. Two of us are members of the Tanzanian-based school board and six members of the EAF Board passed through the school gates during the year. I thank our volunteers here in Australia for their passionate and persistent efforts to both promote the School and be stewards of your funds. In Conclusion On behalf of the East African Fund Committee, the Tanzanian-based school board, staff and students of The School of St Jude, I express our gratitude for your support over the last year. Just as our students mature as they progress through the year levels, I can attest that the School you are supporting is also maturing. However, maturity does not mean that we are standing still - there are a number of growth plans being developed which will be announced in Mark Cubit Chairman, East African Fund December

7 ABN Auditor s declaration of independence To the Members of The East African Fund Incorporated I declare that, to the best of my knowledge and belief, during the year ended 30 June 2017 there have been no contraventions of: (i) the auditor independence requirements of the Australian Charities and Not-forprofits Commission Act 2012; or (ii) the Charitable Fundraising Act 1991; or (iii) any applicable code of professional conduct in relation to the audit. Roberts & Morrow Chartered Accountants Michelle A Paull Partner Auditor Registration Number Beardy Street Armidale, NSW Dated: 12 December 2017 Armidale Glen Innes Narrabri Tamworth Liability limited by a scheme p: p: p: p: approved under professional standards legislation.

8 Financial report for the year ended 30 June 2017 Statement of profit or loss and other comprehensive income Note $ $ Revenue Revenues from Fundraising Activities 8 6,939,563 6,451,303 Distributions from available for sale investments 128,905 Other Income Interest received 79,847 54,536 Expenditure Project funding 8 (3,546,232) (3,780,289) Administration & marketing costs (140,791) (154,697) Net operating surplus for the year 3,461,292 2,570,853 Other comprehensive income Revaluation of available for sale investments 185,274 58,969 Other comprehensive income for the year 185,274 58,969 Total Comprehensive Income for the year 3,646,566 2,629,822 The Statement of profit or loss and other comprehensive income is to be read in conjunction with the attached notes. 6

9 Financial report for the year ended 30 June 2017 Statement of financial position Note $ $ Current Assets Cash and Cash Equivalents 4,169,828 6,436,567 Held to Maturity Investments - 1,022,888 Receivables 3 64,146 1,188 Total Current Assets 4,233,974 7,460,643 Non-current assets Available for sale investments 6,873,235 - Total non current assets 6,873,235 - Nets assets 11,107,209 7,460,643 Funds General Funds 4,169,828 7,122,374 Future Fund 6,752,107 - Reserves 185, ,269 Total Funds 11,107,209 7,460,643 The Statement of financial position is to be read in conjunction with the attached notes. 7

10 Financial report for the year ended 30 June 2017 Statement of changes in funds General Funds Future Fund Asset Revaluation Reserve Tertiary Scholarship Fund Advanced Scholarship Fund Total Funds $ $ $ $ $ Balance at 30 June ,613, ,859 65,208 4,830,821 Surplus attributable for the Year 2,629, ,629,822 Less: Transfer to St Jude s for start-up of Tertiary Program 151,859 - (151,859) - Less: Transfer to St Jude s 65, (65,208) - Balance at 30 June ,460, ,460,643 Surplus attributable for the Year 3,646, Less: Transfer to Future Fund (6,752,107) 6,752, Less: Transfer to Asset Revaluation Reserve (185,274) - 185, Balance at 30 June ,169,828 6,752, , ,107,209 Details of the purpose of each reserve and fund are indicated at Note 2(c) respectively. 8

11 Financial report for the year ended 30 June 2017 Statement of cash flows Note $ $ Cash Flows From Operating Activities Proceeds from Fundraising Activities 6,939,563 6,451,303 Interest received 79,847 54,536 Distributions received 65,287 - Project funding (3,545,572) (3,780,289) Administration & marketing costs (140,791) (154,916) Net cash generated by operating activities 4 3,398,334 2,570,634 Cash Flows from Investing Activities Proceeds from Assets Held to Maturity 1,022,888 - Proceeds to Investments (6,687,961) (22,888) Net cash used in investing activities (5,665,073) (22,888) Cash Flows Financing Activities - - Increase/(Decrease) in Cash Held (2,266,739) 2,547,746 Cash at the Beginning of Financial Year 6,436,567 3,888,821 Cash at the End of Financial Year 4,169,828 6,436,567 The Statement of cash flows is to be read in conjunction with the attached notes. 9

12 Financial report for the year ended 30 June 2017 Notes to and forming part of the financial statements 1. Association Information The financial report of The East African Fund Incorporated (the association ) for the year ended 30 June 2017 was authorised for issue in accordance with a resolution of the committee on 12 December The East African Fund Incorporated is a not-for-profit entity registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC). The entity is also a Tier 1 incorporated association as defined under s.42 of the Associations Incorporation Act The nature of the operations and principal activities of the association are described in the Committees Report. 2. Summary of significant accounting policies (a) Basis of preparation The East African Fund Incorporated, applies Australian Accounting Standards Reduced Disclosure Requirements as set out in AASB 1053: Application of Tiers of Australian Accounting Standards, AASB Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements. This financial report is a general purpose financial report prepared in accordance with Associations Incorporation Act 2009, Australian Charities and Not-for-profits Commission Act 2012 and Australian Accounting Standards - Reduced Disclosure Requirements, Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board. The association is a not-for-profit entity for financial reporting purposes under Australian Accounting Standards. 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 these financial statements are presented below and have been consistently applied unless stated otherwise. The financial report, except for the cash flow information, has been prepared on an accruals basis and is based on historic costs, modified, where applicable, by the measurement at fair value of selected non-current assets. The financial report is presented in Australian dollars, which is the company s functional and presentation currency. The amounts presented in the financial report have been rounded to the nearest dollar. 10

13 Financial report for the year ended 30 June 2017 Notes to and forming part of the financial statements a) Basis of Preparation continued This General Purpose Financial Report has been prepared to provide assurance on The East African Fund Incorporated s activities within Australia. It provides no assurance on the activities of its funded projects in East Africa. b) Income Tax and Deductible Gift Status The association is a charity registered with the Australian Charities and Not-for-profits Commission (ACNC). From 1 July 2014 The Eat African Fund has been listed under of Section (International Affairs) of the Income Tax Assessment Act 1997 as an international affairs recipient, making donations made to it from that date tax deductible. c) Revenue Donations Donations are recognised as revenue when The East African Fund gains control, economic benefits are probable and the amount of the donation can be reliably measured. The East African Fund establishes controls to ensure that donations are recorded in the financial records. Therefore, donations are recognised as revenue when they are recorded in the books and records. Reserves The Committee determined as at 30 June 2016 that the School of St Jude had appropriate controls in place to separately identify donations to the Scholarship Fund. The East African Fund will no longer separately identify these donations. During the 2016 year the balance of the Tertiary Scholarship fund was contributed to the start-up of the tertiary program. During the year ended 30 June 2017 the Association established a Future Fund to underpin the long term sustainability of the School of St Jude. A reserve in equity has been created at 30 June 2017 to maintain transparency around the use of these funds. Interest Interest is recognised on a cash basis receipts basis. d) Expenditure Project Costs In accordance with the objects of the Association, project costs relate to the funds transferred in any given year to support endorsed East African Projects. All projected costs are accounted for on an accruals basis 11

14 Financial report for the year ended 30 June 2017 Notes to and forming part of the financial statements Funded Projects School of St Jude The finance sub-committee of The East African Fund Incorporated monitors the financial operations of The School of St Jude extensively, including approval of annual budgets and capital expenditure, receipt and monitoring of monthly financial reports and receipt of annual accounts and audit report. Further, members of the sub-committee visit the school at least annually. Administration & Marketing Costs Administration & marketing Costs are those costs directly incurred in supporting the objects of the association and include project management carried out by central administration in Australia. Fundraising and appeal costs are accounted for on an accruals basis. g) Cash Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less. For the purposes of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above. h) Held to Maturity Investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments. It is the intention of the association to hold these assets to maturity. i) Available for-sale investments Available for-sale investments are non-derivative financial assets that comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. They are measured at fair value with any re-measurements other than impairment losses and foreign exchange gains and losses recognised in other comprehensive income. They are classified as non-current when they are not expected to be sold within twelve months after the end of the reporting period. j) Foreign Currency Transactions and Balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Exchange differences on the translation of monetary items are recognised in the profit and loss. h) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of GST. 12

15 Financial report for the year ended 30 June 2017 Notes to and forming part of the financial statements 3. Receivables $ $ GST receivable 528 1,118 Distributions due on available for sale 63,618 - investments 64,146 1, (a)reconciliation of Cash Flows from Operating Activities $ $ Surplus /(Deficit) from Ordinary Activities 3,646,566 2,629,822 Less non cash foreign currency translation - (58,969) Add market movement on assets held for sale 185,274 - Changes in Assets and Liabillities Accounts Receivable Increase (63,618) - GST Payable Increase/(Decrease) 660 (219) Net cash generated from operating activities 3,398,334 2,570, Commitment to School of St Jude The School of St Jude project is funded on a calendar year basis. At 30 June 2017 there was an unpaid commitment of USD 2.65 million in relation to the 2017 calendar year. 6. Subsequent Events The committee was approached by the Office of Fair Trading NSW to consider changing legal entity type to become a Company limited by Guarantee under the Corporations Act 2001 (Cwlth). On 17 July 2017 The East African Fund Limited was incorporated as a company limited by guarantee. During the year the operations of the Assciation will be transferred to the company. To the best of the committees knowledge and belief, there have been no other significant events since the end of the reporting period requiring disclosure in the financial report. 7. Related Parties As highlighted in Note 2(d) a number of committee s members visit the school regularly at their own cost. Mr Mark Cubit and Ms Gemma Sisia are members of The School of St Jude Ltd Board of Directors. 13

16 Financial report for the year ended 30 June 2017 Notes to and forming part of the financial statements 8. Information and Declarations to be Furnished Under the Charitable Fundraising Act 1991 Details of aggregate gross income and total expenses of fundraising activities Gross Fundraising Income $ $ Donations 6,939,563 6,451,303 Fundraising Expenses Project Expenditure (3,546,232) (3,780,289) Administration & marketing costs (140,791) (154,697) Total Fundraising Expenses (3,687,023) (3,934,986) Net Proceeds from Fundraising Activities 3,252,540 2,516, Fundraising Comparisons by Percentage % % Cost of fundraising to gross income from fundraising Surplus from fundraising to gross income from fundraising Cost of fundraising services to total expenditure Cost of fundraising services to total income received

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19 ABN Independent auditor s report To the members of The East African Fund Incorporated Opinion We have audited the accompanying financial report, of The East African Fund Incorporated (the association), which comprises the statement of financial position as at 30 June 2017, the statement of profit or loss and other comprehensive income, the statement of changes in equity and statement of cash flows for the year then ended, and notes comprising a summary of significant accounting policies, and the declaration by those charged with governance. In our opinion, the accompanying financial report presents fairly, in all material respects, the financial position of the association as at 30 June 2017 and of its financial performance and its cash flows for the year then ended in accordance with Australian Accounting Standards Reduced Disclosure Requirements. Further, the financial report has been prepared in accordance with Division 60 of the Australian Charities and Not-For-Profits Commission Act 2012 and the requirements set out in the Australian Charities and Not-For-Profits Commission Regulations 2013 and has been prepared in accordance with the Associations Incorporation Act NSW 2009 and the Associations Incorporations Regulations and the Charitable Fundraising Act (NSW) 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 association in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board s APES 110 Code of Ethics for Professional Accountants (the Code) and the auditor independence requirements of the Australian Charities and Not-For-Profits Commission Act 2012 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. Responsibilities of Management and Those Charged with Governance for the Financial Report Management is responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards Reduced Disclosure Requirements, in accordance with Division 60 of the Australian Charities and Not-For-Profits Commission Act 2012 and the requirements set out in the Australian Charities and Not-For-Profits Commission Regulations 2013 and have been prepared in accordance with the Associations Incorporations Act NSW 2009 and the Associations Incorporation Regulations, and for such internal control as management determines is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. Armidale Glen Innes Narrabri Tamworth Liability limited by a scheme p: p: p: p: approved under professional standards legislation.

20 In preparing the financial report, management is responsible for assessing the association 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 management either intends to liquidate the association or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the association s financial reporting process. 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. Our responsibilities As part of an audit in accordance with the Australian Auditing Standards, the auditor exercises professional judgement and maintains professional scepticism throughout the audit. The auditor also: Identifies and assesses the risks of material misstatement of the financial report, whether due to fraud or error, designs and performs audit procedures responsive to those risks, and obtains audit evidence that is sufficient and appropriate to provide a basis for the auditor s 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. Obtains 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 entity s internal control. Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by those charged with governance. Concludes on the appropriateness of those charged with governance s 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 entity s ability to continue as a going concern. If the auditor concludes that a material uncertainty exists, the auditor is required to draw attention in the auditor s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify the auditor s opinion. The auditor s conclusions are based on the audit evidence obtained up to the date of the auditor s report. However, future events or conditions may cause the entity to cease to continue as a going concern. 18

21 Evaluates the overall presentation, structure and content of the financial report, including the disclosures made by those charged with governance. The auditor communicates with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that the auditor identifies during the audit. Roberts & Morrow Chartered Accountants Michelle A Paull 137 Beardy Street Armidale Auditor Registration Number: Dated: 12 December