AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED

Transcription

1 ACN A COMPANY LIMITED BY GUARANTEE FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2013

2 FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2013 CONTENTS PAGE CONTENTS PAGE DIRECTORS REPORT 2-8 STATEMENT OF FINANCIAL POSITION 9 STATEMENT OF COMPREHENSIVE INCOME 10 STATEMENT OF CHANGES IN EQUITY 11 STATEMENT OF CASH FLOWS 12 NOTES TO THE FINANCIAL STATEMENTS DIRECTORS DECLARATION 25 INDEPENDENT AUDITOR S REPORT AUDITOR S INDEPENDENCE DECLARATION 29 1

3 DIRECTORS REPORT FOR THE YEAR ENDED 31 DECEMBER 2013 Your Directors present their report on the entity for the year ended 31 December DIRECTORS The Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. The names of the Directors are: Ms Elaine Henry OAM Professor Rob Moodie AM Mr Tim Goodwin Dr Norman Swan Ms Lisa Paul AO PSM Dr Gervase Chaney Ms Sarah Murdoch (appointed 9 April 2013) Dr Lance Emerson (appointed 1 May 2013) Ms Arlene Tansey (appointed 3 September 2013) Information on Directors Ms Elaine Henry OAM - BSc (Hons 1), DLitt (h.c.) Elaine Henry has been the Chair of ARACY since 2011, having served on the Board since its inception in Elaine also Chairs the National Breast Cancer Foundation and is a Director of Financial Literacy Australia; a Member of the Australian Statistics Advisory Council; a Governor of the Committee for the Economic Development of Australia; and, a Member of the Advisory Boards of the Global Foundation, the Australian School of Business (UNSW), and the Centre for Social Impact (UNSW). Elaine was awarded first-class honours in Science at the Oxford Brookes University in the UK before returning to Australia. She was the Executive Director of the Cancer Council (NSW) from and during that time was awarded a Medal in the Order of Australia (OAM) for her work in cancer control in 1994 which was also recognised with an honorary Doctorate of Letters from UNSW in In 1998, as CEO of The Smith Family, she led a comprehensive transformation of the organisation focusing it on the power of education to change the lives of disadvantaged children, families and communities across Australia. As part of a social movement, she was a founding member of Social Ventures Australia, inaugural chair of Nonprofit Australia Ltd and Director of the Australian Social Innovation Exchange. Throughout her career, Elaine has served on a wealth of committees and boards at the state, national and international levels, including as chair of the Australian Government s Stronger Families and Communities Partnership, which had a major role in the development of the Communities for Children initiative, and as a member of the former Prime Minister s Community Business Partnership. Elaine s leadership skills have been recognised by many awards including the Lifetime Achievement Award from Research Australia in Professor Rob Moodie AM MBBS, MPH, F(FPHM)RACP, FRACGP, FAIM Rob Moodie is Professor of Public Health at the Melbourne School of Population and Global Health at the University of Melbourne. Between 1998 and 2007 he was the CEO of VicHealth. He chaired the National Preventative Health Task Force from He was the inaugural Director of Country Programs at the joint United Nations Program on HIV/AIDS (UNAIDS) from and he chairs the Technical Panel to the Bill and Melinda Gates Foundation s HIV prevention program in India from He has worked for the Save the Children Fund, Médicins Sans Frontières, Central Australian Aboriginal Congress Inc. (CAAC), the Burnet Institute, and the World Health Organization. 2

4 DIRECTORS REPORT FOR THE YEAR ENDED 31 DECEMBER 2013 Information on Directors (continued) Mr Tim Goodwin LL.M, BA and Law (Hons) Tim Goodwin is a member of the Yuin nation, an Aboriginal nation that occupies the southeast coast of NSW. Tim is currently a lawyer with Allens in Melbourne. He graduated with bachelor degrees in Arts and Law (with Honours) from the Australian National University in 2007 and with a Master of Laws from Harvard Law School in Tim was the Associate to The Hon Justice AM North of the Federal Court of Australia from 2008 to 2009 and to the Hon Justice M Bromberg of the Federal Court of Australia from 2009 to Tim serves on the editorial board of the Australian Indigenous Law Review. From 2008 to 2010, he was a member of the Steering Committee for the establishment of a National Indigenous Representative Body. This work resulted in the creation of the National Congress of Australia s First Peoples. Tim is currently a trustee of the Reichstein Foundation and a board member of the Centre for Australian Progress. Dr Norman Swan MBChB, FRCP, MD (Hons) Causa, DCH Host of the Health Report, on the Australian Broadcasting Corporation s Radio National, and Tonic on ABC News24, Dr Norman Swan was one of the first medically qualified journalists in Australia. He was born in Scotland, graduated in medicine from the University of Aberdeen and later obtained his postgraduate qualifications in paediatrics. Norman also edits his own newsletter, The Choice Health Reader, which is published in partnership with CHOICE, Australia s leading consumer advocacy organisation. On television, Dr Swan has hosted ABC Television s science program, Quantum, and been a guest reporter on Catalyst and Four Corners. He hosted Health Dimensions on ABC Television, and created, wrote and narrated a four-part series on disease and civilisation, Invisible Enemies, made for Channel 4 (UK) and SBS Television. He also co-wrote and narrated The Opposite Sex, a four-part series for ABC Television. Norman Swan has been the Australian correspondent for the Journal of the American Medical Association and the British Medical Journal and consults for the World Health Organization in Geneva. He is also Executive Chairman of Tonic Direct, a direct to patient health channel promoting evidence based care. Ms Lisa Paul AO, PSM, FAIM, FIPAA, BA (Hons) Lisa Paul AO PSM is Secretary of the Australian federal government Department of Education. Prior to this, Lisa was Secretary of the Department of Education, Employment and Workplace Relations from 2007 to 2013 and Secretary of the Department of Education, Science and Training from 2004 to In 2011, Lisa was made an Officer of the Order of Australia for distinguished service to public sector leadership in key policy and program implementation and received the Australia Chartered Accountants Federal Government Leader of the Year award. In 2003, she was awarded a Public Service Medal for leading the Australian Government's domestic response to the Bali bombings. Along with her role at ARACY, she is currently a non-executive Director of the Australian National Institute of Public Policy, the Advisory Council of the Australian National University Crawford School of Public Policy, the Advisory Board to the Strategic Centre for Leadership Learning and Development, Social Ventures Australia and the National Security College Advisory Board. She is a National Fellow of the Institute of Public Administration Australia, a fellow of the Australian Council for Educational Leaders, a fellow of the Australian Institute of Management, an ANU Public Policy Fellow and is a member of Chief Executive Women. 3

5 DIRECTORS REPORT FOR THE YEAR ENDED 31 DECEMBER 2013 Information on Directors (continued) Dr Gervase Chaney - MBBS, FRACP Gervase Chaney is a general paediatrician and Chairman of the Paediatric Medicine Clinical Care Unit at Princess Margaret Hospital for Children part of the Child and Adolescent Health Service (CAHS) in Western Australia. He is also one of the Clinical Leads (Medical) of the New Children s Hospital Project and is on the Governing Council of CAHS. He is a Clinical Senior Lecturer, School of Paediatrics and Child Health, University of WA and an Adjunct Senior Lecturer, School of Medicine, University of Notre Dame WA. He was President of the Paediatrics and Child Health Division of the Royal Australasian College of Physicians (RACP) and was on the Board of the RACP from He was Director of Clinical Planning and Reform for CAHS from and was Co-Lead of the Child and Youth Health Network for WA Health from He is on the Board of Kidsafe WA. Ms Sarah Murdoch - GAICD Sarah Murdoch is Deputy Chair and International Ambassador of The Australian Ballet, Board Member and Ambassador of the Murdoch Childrens Research Institute and Patron of the National Breast Cancer Foundation. Sarah is also Chair of the National Breast Cancer Foundation s Women s Advisory Network, which aims to fast-track research via Register4; a national online register with over 30,000 members. Sarah has worked in the not-for-profit sector for over 16 years and has received various awards including the Celebrity Advocacy Award by Research Australia which recognises influence in advocacy, fundraising or awareness building in the areas of health and medical research, which was awarded in recognition of her work with the National Breast Cancer Foundation. Dr Lance Emerson PhD, MSc (PHC), BSc Dr Lance Emerson has headed up ARACY since Originally trained as a geneticist, Lance has worked in Public Health and primary health care for most of his career. He has worked in senior government positions at both the state and federal level, as a private consultant, and as an executive of a national member-based health organisation. He is a member of many federal government working groups and committees. His passion is in systems reform and prevention, and in using evidence to inform policy and practice to improve the wellbeing of children and young people. Lance is a well-respected child and youth advocate and sought-after keynote speaker. Ms Arlene Tansey - FAICD, JD, MBA, BBA Arlene Tansey has over 25 years experience as a senior executive in business and financial services and extensive experience as a company director. Ms Tansey is currently a non-executive director of Adelaide Brighton Limited, Lend Lease Investment Management and Primary Health Care. She is also a member of the Serco Asia Pacific Advisory Board, a senior advisor to Pierce & Pierce Capital, a director of Hunter Phillip Japan and a member of the committee of The Boston, Melbourne, Oxford, Vancouver Conversazione on Culture and Society. Arlene Tansey is originally from New York. She has lived and worked in the United States, South America, and Europe. Ms Tansey has lived in Australia for the past 19 years and is an Australian citizen. 4

6 DIRECTORS REPORT FOR THE YEAR ENDED 31 DECEMBER 2013 OPERATING AND FINANCIAL REVIEW The net surplus of the entity for the financial year was: Year Ended 31 December 2013 Year Ended 31 December 2012 Operating surplus/(deficit) 189,255 (78,944) Principal Activity The entity is a company limited by guarantee. The entity has a financial year ending 31 December. The entity was incorporated in Australia on 13 June The entity was established for the charitable purpose of facilitating, co-ordinating and supporting the development of knowledge through scientific research and the effective use of that knowledge which is or may prove to be, of value to Australia by enhancing the well being and the life chances of children and young people. Objectives To improve the wellbeing of children and young people in the longer term, by advancing collaboration and evidence-based action. Strategy for Achieving Objectives During 2013, ARACY has focused on developing Stage 2 of the Nest Federal initiative. A grant was received from Bupa to enable the Nest Action Agenda to be developed. This document provides a guiding framework for the development of evidence-based, preventive and sustainable approaches to improved child and youth wellbeing across Australia. The Action Agenda was successfully launched at Parliament House in November In addition to the Nest, ARACY has continued to implement projects such as right@home and the Common Approach (CAARS). The common approach is being implemented in South Australia, Tasmania and the ACT with interest from other states expected to be actioned in Other projects which have commenced in 2013 include Wrap, which is a follow-on from right@home, and is a project designed to reach the most disadvantaged of Australian children and families. ARACY has continued to grow its member base and now has over 3000 members, many of whom are actively participating in the State and Territory convenor and network events. Several of the members attended the annual conference Infant and Early Childhood Social and Emotional Wellbeing, which was held in October The conference attracted over 450 delegates and included national and international speakers. 5

7 DIRECTORS REPORT FOR THE YEAR ENDED 31 DECEMBER 2013 Performance Measurement The success of ARACY in achieving its key performance indicators (KPI) is measured in an annual survey of members. For 2013 the KPI s included, but were not limited to: Growth of the membership base Member satisfaction Number of events held; and Qualitative feedback on the events held during 2013 The annual survey indicated a positive direction for all of the above indicators demonstrating that the areas of focus by ARACY are serving its members. Also included in the survey were questions about the communications between ARACY and its members with results indicating that members were very pleased with the content and production of the weekly ebulletin and monthly newsletters, and were actively engaged in the website. Significant Changes in the State of Affairs No significant change in the nature of these activities occurred during the year. Significant Events after the reporting period No significant changes occurred during the year. Likely Developments and Expected Results No foreseeable developments in the next 12 months. Environmental Regulation and Performance The entity s operations are not regulated by any environmental regulation under a law of the Commonwealth or of a State or Territory. 6

8 DIRECTORS REPORT FOR THE YEAR ENDED 31 DECEMBER 2013 DIRECTORS MEETINGS During the year ended 31 December 2013, a total of four (4) Directors meetings were held which were attended by each Director holding office as follows: Number of Meetings Attended Ms Elaine Henry OAM 4 (1 via teleconference) Professor Rob Moodie AM 4 Mr Tim Goodwin 4 (1 via teleconference) Dr Norman Swan 4 (1 via teleconference) Ms Lisa Paul AO PSM 3 (1 via teleconference) Dr Gervase Chaney 4 (1 via teleconference) Ms Sarah Murdoch 3 Dr Lance Emerson 4 Ms Arlene Tansey 1 Ms Sarah Murdoch was appointed in April Dr Lance Emerson was appointed in May Ms Arlene Tansey was appointed in September LIABILITY OF MEMBERS AND DIVIDENDS The entity is a company limited by guarantee and the liability of members is limited to an amount not exceeding 1. Accordingly no dividends were paid or options over shares granted. REMUNERATION REPORT The Directors do not receive any remuneration or other benefits as the positions are honorary in nature. 7

9 DIRECTORS REPORT FOR THE YEAR ENDED 31 DECEMBER 2013 INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS Premiums of 4,985 have been paid for an Associations Liability Insurance policy, which includes cover for Professional Indemnity Insurance, Directors and Officers Insurance and Employment Practices cover. No person has applied for leave of Court to bring proceedings on behalf of the entity or intervene in any proceedings to which the entity is a party for the purpose of taking responsibility on behalf of the entity for all or part of those proceedings. The entity was not a party to any such proceedings during the year. NON-AUDIT SERVICES The entity s auditor, Ernst & Young, provided no non-audit services during the year ended 31 December SINGLE ENTITY The company is a single entity and has no subsidiaries. AUDITORS INDEPENDENCE The Directors received a declaration from the auditor of the Australian Research Alliance for Children and Youth Limited. (Refer to page 29) Signed in accordance with a resolution of Directors Elaine Henry Director Date: 25 February

10 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013 ASSETS Current Assets Notes Cash and cash equivalents 3 2,399,237 4,809,217 Trade and other receivables 4 135, ,118 Long-term deposits 5 3,622,550 - Prepayments 6 12, ,635 Total Current Assets 6,170,058 5,597,970 Non-current Assets Property, plant and equipment 7 42,173 12,414 Total Non-current Assets 42,173 12,414 Total Assets 6,212,231 5,610,384 LIABILITIES Current Liabilities Trade and other payables Government grants ,366 4,106, ,198 3,822,908 Employee benefit liabilities ,835 91,537 Total Current Liabilities 4,778,425 4,362,643 Non-current Liabilities Employee benefit liabilities 10 4,567 7,757 Total Non-current Liabilities 4,567 7,757 Total Liabilities 4,782,992 4,370,400 NET ASSETS 1,429,239 1,239,984 MEMBER S FUNDS Retained earnings 11 1,429,239 1,239,984 Total Member s funds 1,429,239 1,239,984 9

11 STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2013 CONTINUING OPERATIONS Notes Revenue 12 5,300,278 3,039,043 Employee benefits expense (1,446,072) (1,706,016) Consultants expense (1,645,122) (791,099) Research projects expense (1,144,000) - Travel expense (144,936) (209,850) Communications expense (38,722) (43,167) Premises outgoings expense (85,457) (68,518) Information technology expense (63,064) (110,778) Insurance expense (15,065) (14,444) Depreciation expense (14,371) (18,979) Professional fees expense (21,398) (24,739) Recruitment expense (21,309) (7,021) General expense (471,507) (123,376) Net surplus/(deficit) from continuing operations 189,255 (78,944) Other Comprehensive Income - - Net surplus/(deficit) attributable to members of Australian Research Alliance for Children and Youth Limited 189,255 (78,944) 10

12 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2013 Notes Retained earnings Total At 1 January ,318,928 1,318,928 Deficit for the year (78,944) (78,944) At 31 December ,239,984 1,239,984 At 1 January ,239,984 1,239,984 Surplus for the year 189, ,255 At 31 December ,429,239 1,429,239 11

13 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2013 Notes CASH FLOWS FROM OPERATING ACTIVITIES Receipts from grants and gifts 5,339,180 7,897,576 Receipts from conferences and events 486,978 - Interest received 208,562 65,281 Payments to suppliers and employees (4,778,020) (4,084,456) Net cash flow from operating activities 14 (a) 1,256,700 3,878,401 CASH FLOWS USED IN INVESTING ACTIVITIES Investment in long-term deposits (3,622,550) - Payment for property, plant and equipment (44,130) - Net cash flow used in investing activities (3,666,680) - Net (decrease)/increase in cash and cash equivalents (2,409,980) 3,878,401 Cash and cash equivalents at 1 January 4,809, ,816 Cash and cash equivalents at 31 December 14 (b) 2,399,237 4,809,217 12

14 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER CORPORATE INFORMATION The financial report of the Australian Research Alliance for Children and Youth Limited for the year ended 31 December 2013 was authorised for issue in accordance with the resolution of Directors dated 25 February The entity is a company limited by guarantee and the liability of members is limited to an amount not exceeding 1. The Directors may impose an annual subscription on any class of membership from time to time and the member within a class which is subject to an annual subscription is liable to pay the subscription. The entity is a not for profit entity for financial reporting purposes. The entity is established for the charitable purpose of facilitating, co-ordinating and supporting the development of knowledge through scientific research and the effective use of that knowledge which is or may prove to be of value to Australia by enhancing the well being and the life chances of children and young people. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation The financial report is a general purpose financial report which has been prepared in accordance with the requirements of the Corporations Act 2001, including applicable Australian Accounting Standards. Other mandatory professional reporting requirements and relevant Accounting Interpretations have also been complied with. The financial report has been prepared on a historical cost basis. The financial report has been presented in Australian dollars. The financial report has been prepared on the going concern basis. Statement of Compliance The financial report complies with Australian Accounting Standards, which include Australian Equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS). 13

15 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013 Revenue Recognition Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Government Grants Contributions received or receivable are recognised immediately as revenue when: (a) the entity obtains control of the contribution or the right to receive the contribution; (b) it is probable that the economic benefits comprising the contribution will flow to the entity; and (c) the amount of the contribution can be measured reliably. If conditions are attached to the grant which must be satisfied before ARACY is eligible to receive the contribution, the recognition of the grant as revenue is deferred until those conditions are satisfied. When grant revenue is received whereby the entity incurs an obligation to deliver economic value directly back to the contributor/transferor, this is considered a reciprocal transaction and the grant revenue is recognised in the state of financial position as a liability until the service has been delivered to the contributor/transferor, otherwise the grant is recognised as income on receipt. Gifts and Other Gifts are recognised on receipt. Interest Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Cash and cash equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short term deposits with an original maturity 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. Trade and other receivables Trade receivables, which generally have 30-day terms, are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method, less an allowance for any uncollectible amounts. Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identified. An allowance for doubtful debts is made when there is objective evidence that the entity will not be able to collect the debts. 14

16 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013 Long-term deposits Long-term deposits in the balance sheet comprise term deposits with an original maturity of more than three months, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Income Tax Under Section 50-5 of the Income Tax Assessment Act 1997, the income of the entity is exempt from income tax. Other taxes Revenues, expenses and assets are recognised net of the amount of GST except: when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and receivables and payables, which are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet. Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. Property, Plant and Equipment Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation. All other repairs and maintenance costs are recognised as expenses when incurred. Depreciation is calculated on a straight line basis over the estimated useful life of the asset. The depreciation rates used for plant and equipment range between 20% and 33% pa. All asset residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end. 15

17 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013 Property, Plant and Equipment (continued) Impairment The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset s ability to generate future cash flows, and the asset would be replaced if the entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost. Trade and other payables Trade payables and other payables are carried at amortised cost. They represent liabilities for goods and services provided to the entity prior to the end of the financial year that are unpaid and arise when the entity becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition. Employee leave benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled within 12 months of the reporting date are recognised in employee benefit liabilities in respect of employees services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable. Liabilities for long service leave for which an entitlement to take leave will arise beyond 12 months of the balance date are shown at the present value of the expected future payments to be made in respect of employees services, based on the projected unit credit method. In calculating the liabilities, consideration is given to expected future wage and salary levels, experience of employee departures and periods of service, as well as estimated average discount rates applicable to adjust gross values calculated to net present values. The amounts calculated are treated as non-current liabilities and included in employee benefit liabilities. Leases The determination of whether an arrangement is or contains a lease is based in the substance of the arrangement and required an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. 16

18 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER CASH AND CASH EQUIVALENTS Cash at bank and in hand 1,626,159 98,500 Short-term deposits 773,078 4,710,717 2,399,237 4,809,217 Cash at bank earns interest at floating rates based on daily bank deposit rates. The carrying amounts of cash and cash equivalents represent fair value. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the entity, and earn interest at the respective short-term deposit rates. 4. TRADE AND OTHER RECEIVABLES Trade receivables 57,250 87,297 Other debtors 3,143 3,821 Accrued income receivable FBT refundable GST refundable 28,487 2,210 44,744 34, , ,118 Trade receivables are non-interest bearing and as at 31 December 2013 are all current. 5. LONG-TERM DEPOSITS Long-term deposits 3,600,000 - Bond - premises 22,550-3,622, PREPAYMENTS Prepaid project expenses 2, ,021 Prepaid insurance 9,722 8,614 12, , PROPERTY, PLANT AND EQUIPMENT At cost 82,001 37,871 Less accumulated depreciation (39,828) (25,457) 42,173 12,414 Movements in carrying amounts: Plant and equipment Balance at the beginning of financial year 12,414 31,393 Additions 44,130 - Depreciation expense (14,371) (18,979) Carrying amount at the end of financial year 42,173 12,414 17

19 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER TRADE AND OTHER PAYABLES Trade payables 52,713 34,835 Employee entitlements - 94 PAYG tax payable 21,654 23,042 FBT payable - 1,554 GST payable - 298,666 Accrued expenses 478,999 90, , , GOVERNMENT GRANTS At 1 January Received during the year Released to the income statement 3,822,908 2,550,411 2,267,095-5,587,142 1,764,234 At 31 December 4,106,224 3,822, EMPLOYEE BENEFIT LIABILITY Current Annual leave 82,602 69,349 Long service leave 36,233 22, ,835 91,537 Non-current Long service leave 4,567 7,757 4,567 7, MEMBER S FUNDS Retained earnings at the beginning of financial year 1,239,984 1,318,928 Net surplus/(deficit) for the year 189,255 (78,944) Retained earnings at the end of financial year 1,429,239 1,239, REVENUE Receipts from government grants 3,521,055 1,764,234 Receipts from gifts and other grants 1,127,954 1,209,528 Receipts from conferences and events 442,707 - Bank interest 208,562 65,281 Total revenues 5,300,278 3,039,042 18

20 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER COMMITMENTS AND CONTINGENCIES Operating lease commitments Non-cancellable operating lease contracted for but not capitalised in the financial statements for a multifunction photocopier Payable - not later than one year 8,881 8,881 - later than one year but not later than five years 21,463 30,345 30,344 39,226 Operating Lease of Office space at 9 Torrens Street, Braddon ACT, expiring March 2016 Payable - not later than one year 84, later than one year but not later than five years 110, , STATEMENT OF CASH FLOWS (a) Reconciliation of the net surplus/(deficit) to the net cash flow Surplus/(deficit) from ordinary activities 189,255 (78,944) Non cash adjustment to reconcile surplus/(deficit) to cash flows; Depreciation 14,371 18,979 Loss on disposal of plant and equipment - - Changes in assets and liabilities; (Increase)/decrease in trade and other receivables (10,716) 564,573 Decrease/(increase) in prepayments 651,198 (630,628) Increase in trade and other payables 105, ,032 Increase in government grants 283,316 3,822,908 Increase/(decrease) in employee benefit liabilities 24,108 (4,519) NET CASH FLOW FROM OPERATING ACTIVITIES 1,256,700 3,878,401 (b) Reconciliation of cash balances: Cash balance comprises: Cash and cash equivalents 2,399,237 4,809,217 Cash balance as per statement of cash flows 2,399,237 4,809,217 19

21 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The entity's principal financial instruments comprise cash and cash equivalents, long-term deposits, trade debtors and trade creditors. The main purpose of these financial instruments is to create income for the entity in order to fund future growth. The main risks arising from the entity's financial instruments are interest rate risk, credit risk and liquidity risk. The entity uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rates. Ageing analyses are undertaken to manage credit risk and liquidity risk is monitored through cash flow forecasts. The Board reviews and agrees policies for managing each of these risks as summarised below: Risk Exposures and Responses Interest rate risk The entity's exposure to market interest rates relate primarily to cash at bank. At balance date, the entity had the following financial assets exposed to Australian variable interest rate risk: Amount Exposed to Floating Interest Rate Amount Not Exposed to Floating Interest Rate Financial assets Cash and cash equivalents 2,399,238 4,809, Trade and other , ,118 receivables Long-term deposits 3,622, Total financial assets 6,021,788 4,809, , ,118 Weighted average effective interest rates %pa Financial liabilities Trade and other payables 553, ,198 Government grants 4,106,224 3,822,908 Employee benefit liabilities 118,835 91,537 Total financial liabilities 4,778,425 4,362,643 20

22 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013 The following sensitivity analysis is based on the interest rate risk exposures in existence at the balance sheet date: At 31 December 2013, if interest rates had moved, as illustrated in the table below, with all other variables held constant, net surplus from operations and equity would have been affected as follows: Judgement of reasonably possible movements Net Surplus/(deficit) Higher/(Lower) Equity Higher/(Lower) % (100 basis points) 60,218 48,092 60,218 48, % (100 basis points) (60,218 (48,092) (60,218) (48,092) The movements in net surplus from operations and equity are due to higher/lower interest income from variable rate on cash balances. The sensitivity is higher in 2013 than in 2012 because of an increase in average cash balances during Price risk The entity does not have a material exposure to price risk. Credit risk Credit risk arises from the financial assets of the entity, which comprise cash and cash equivalents, trade debtors and long-term deposits. The entity's exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. The carrying amounts of the entity s financial assets are the same as their net fair value. Exposure at balance date is presented in the following table: Financial Assets 2013 At 31 December 2012 Cash in bank (note 3) 2,399,237 4,809,217 Trade and other receivables 135, ,118 (note 4) Long-term deposits (note 5) 3,622,550-6,157,621 4,934,335 The entity does not hold any credit derivatives to offset its credit exposure. The entity trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it the entity's policy to securitise its trade and other receivables. In addition, trade and other receivable balances are monitored on an ongoing basis with the result that the entity's exposure to bad debts is not significant. 21

23 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013 Liquidity risk The entity's objective is to maintain a balance between continuity of funding and flexibility. The entity s financial liabilities comprise trade and other payables and current employee benefit liabilities totaling 672,201 (2012: 539,735). Maturity analysis of financial assets and liability based on management's expectation The risk implied from the values shown in the table below, reflects a balanced view of cash inflows and outflows. Trade and other payables originate from the ongoing operations. The assets are considered in the entity s overall liquidity risk. To monitor existing financial assets and liabilities as well as to enable an effective controlling of future risks, the entity has established comprehensive risk reporting covering its business that reflects expectations of the management of expected settlement of financial assets and liabilities. Year ended 31 December 2013 < 6 Months Total Cash and cash equivalents (note 3) 2,399,237 2,399,237 Trade and other receivables (note 4) 135, ,834 Long-term deposits (note 5) 3,622,550 3,622,550 Total financial assets 6,157,621 6,157,621 Trade and other payables (note 8) 553, ,366 Employee benefit liabilities (note 10) 118, ,835 Total financial liabilities 672, ,201 Net maturity 5,485,420 5,485,420 Year ended 31 December 2012 < 6 Months Total Cash 4,809,217 4,809,217 Trade and other receivables 125, ,118 Total financial assets 4,934,335 4,934,335 Trade and other payables 448, ,198 Employee benefit liabilities 91,537 91,537 Total financial liabilities 539, ,735 Net maturity 4,394,600 4,394,600 22

24 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER DIRECTOR AND EXECUTIVE DISCLOSURES Details of Key Management Personnel The following were Directors of the company during the period: Ms Elaine Henry OAM Professor Rob Moodie AM Mr Tim Goodwin Dr Norman Swan Ms Lisa Paul AO PSM Dr Gervase Chaney Dr Lance Emerson Ms Sarah Murdoch Ms Arlene Tansey The following were senior staff during the period; Dr Lance Emerson, CEO Mr Chris Brown, Corporate Services Manager (to 3 May 2013) Ms Angela Southwell, Projects Manager Dr Lara Bishop, Senior Research Manager Ms Jane Brooks, Chief Operating Officer (appointed 29 April 2013) Compensation of Key Management Personnel Senior staff received a total of 578,449 over the period (2012: 460,599) Short-term employee benefits 564, ,599 Termination benefits 13,510 - Total compensation 578, ,599 No interests are held by Key Management Personnel. 23

25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER EVENTS AFTER THE REPORTING PERIOD There were no significant events after balance sheet date. 18. AUDITOR REMUNERATION The auditor of the Australian Research Alliance for Children and Youth Limited is Ernst & Young Amounts received or due and receivable by Ernst & Young (Australia) for: An audit of the financial report of the entity 17,098 18,025 Audit services for grant acquittal audits - 5,253 Compliance audit ,098 23, ENTITY DETAILS The registered office and principal place of business of the entity is: 9 TORRENS STREET BRADDON ACT

26 DIRECTORS DECLARATION FOR THE YEAR ENDED 31 DECEMBER 2013 In accordance with a resolution of the Directors of Australian Research Alliance for Children and Youth Limited, I state that: 1. In the opinion of the Directors: (a) The financial statements and notes, of the entity, are in accordance with the Corporations Act 2001; including: (i) (ii) Giving a true and fair view of the entity s financial position as at 31 December 2013 and of the performance for the year ended on that date of the entity; and Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; (b) There are reasonable grounds to believe that the entity will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of Directors Elaine Henry Director Date: 25 February

27 Ernst & Young 121 Marcus Clarke Street Canberra ACT 2600 Australia GPO Box 281 Canberra ACT 2601 Tel: Fax: ey.com/au Independent auditor's report to the members of Australian Research Alliance for Children and Youth Limited Report on the financial report We have audited the accompanying financial report of Australian Research Alliance for Children and Youth Limited ( the company ), which comprises the statement of financial position as at 31 December 2013, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration. Directors' responsibility 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 Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. 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. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about 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 controls relevant to the entity's preparation of the financial report that gives a true and fair view 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 controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, 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. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

28 2 Independence In conducting our audit we have complied with the independence requirements of the Corporations Act We have given to the directors of the company a written Auditor s Independence Declaration, a copy of which is included in the directors report. Opinion In our opinion: a. the financial report of Australian Research Alliance for Children and Youth Limited is in accordance with the Corporations Act 2001, including: i giving a true and fair view of the company's financial position as at 31 December 2013 and of its performance for the year ended on that date; and ii complying with Australian Accounting Standards and the Corporations Regulations 2001; and b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 2. Report on the requirements of the WA Charitable Collections Act (1946) and the WA Charitable Collections Regulations (1947) We have audited the financial report as required by the WA Charitable Collections Act (1946). Our procedures included obtaining an understanding of the internal control structure for fundraising appeal activities and examination, on a test basis, of evidence supporting compliance with the accounting and associated record keeping requirements for fundraising appeal activities pursuant to the WA Charitable Collections Act (1946) and the WA Charitable Collections Regulations (1947). Because of the inherent limitations of any assurance engagement, it is possible that fraud, error or noncompliance may occur and not be detected. An audit is not designed to detect all instances of noncompliance with the requirements described in the above-mentioned Act and Regulations as an audit is not performed continuously throughout the period and the audit procedures performed in respect of compliance with these requirements are undertaken on a test basis. The audit opinion expressed in this report has been formed on the above basis. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

29 3 Opinion In our opinion: a) the financial report of Australian Research Alliance for Children and Youth Limited has been properly drawn up and associated records have been properly kept during the financial year ended 31 December 2013, in all material respects, in accordance with: i the WA Charitable Collections Act (1946); and ii the WA Charitable Collections Regulations (1947). Ernst & Young James Palmer Partner Canberra 25 February 2014 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

30 Ernst & Young 121 Marcus Clarke Street Canberra ACT 2600 Australia GPO Box 281 Canberra ACT 2601 Tel: Fax: ey.com/au Auditor s Independence Declaration to the Directors of Australian Research Alliance for Children and Youth Limited In relation to our audit of the financial report of Australian Research Alliance for Children and Youth Limited for the financial year ended 31 December 2013, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct. Ernst & Young James Palmer Partner 25 February 2014 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation