Adventist Development and Relief Agency Australia Trust. Financial Statements

Transcription

1 Adventist Development and Relief Agency Australia Trust Financial Statements

2 CONTENTS Financial Statements Statement of Profit or Loss and Other Comprehensive Income 1 Statement of Financial Position 2 Statement of Changes in Equity 3 Statement of Cash Flows 4 5 Responsible Persons' Declaration 23 Independent Auditor's Report 24 Page

3 Statement of Profit or Loss and Other Comprehensive Income Note REVENUE Donations and gifts Monetary 6 7,518,055 6,326,700 Non-monetary - International 1,786, ,163 Non-monetary - national 5,271,730 2,532,317 Bequests and Legacies 1,905,366 2,067,867 Grants DFAT 3,594,653 6,077,632 Other Australian 374, ,028 Appropriations received 7 108, ,015 Other income 193, ,718 Surplus arising from Open Heart International acquisition 21 88,601 - Investment Income 378, ,630 TOTAL REVENUE 21,219,245 18,362,070 EXPENDITURE International Aid and Development Program Expenditure International projects Funds to overseas projects (7,174,498) (9,166,817) Projects support costs (1,369,193) (1,155,441) Development education (514,841) (385,944) Fundraising costs Public (555,891) (554,553) Government, multilateral and private (34,000) (73,870) Accountability and Administration (852,594) (817,985) Depreciation, amortisation and impairment loss (95,680) (25,718) Non-Monetary Expenditure (1,786,175) (331,163) Total International Aid and Development Program Expenditure (12,382,872) (12,511,491) Domestic Programs Expenditure (7,845,456) (5,272,440) TOTAL EXPENDITURE (20,228,328) (17,783,931) Surplus / (deficit) before income tax 990, ,139 Income tax expense - - Net surplus / (deficit) 990, ,139 Other comprehensive income - - Total comprehensive income for the year 990, ,139 The financial statements should be read in conjunction with the accompanying notes. 1

4 Statement of Financial Position As at 30 June Note ASSETS Current assets Cash and cash equivalents 10 16,590,444 15,697,465 Trade and other receivables , ,972 Inventories ,864 6,956 Financial assets 13 43,184 22,941 Other current assets , ,917 Total current assets 17,252,541 16,079,251 Non-current assets Financial assets 13 46, ,678 Property, plant and equipment ,784 42,946 Intangible assets , ,049 Total non-current assets 846, ,673 TOTAL ASSETS 18,099,286 16,695,924 LIABILITIES Current liabilities Trade and other payables , ,289 Short-term provisions , ,330 Total current liabilities 1,228, ,619 Non-current liabilities Long-term provisions , ,906 Total non-current liabilities 144, ,906 TOTAL LIABILITIES 1,372, ,525 NET ASSETS 16,726,316 15,735,399 EQUITY Special project reserves 19 6,775,428 6,473,923 Funds available for future use 20 9,950,888 9,261,476 TOTAL EQUITY 16,726,316 15,735,399 The financial statements should be read in conjunction with the accompanying notes. 2

5 Statement of Changes in Equity Funds available for future use International disaster relief reserve Australian disaster relief reserve Fixed asset replacement reserve Funds reserved for projects Balance at 1 July 9,261, , ,488 44,325 5,404,806 15,735,399 Total comprehensive income for the year 990, ,917 Transfers to and from reserve (301,505) 52,092 (34,943) - 284,356 - Balance at 30 June 9,950, , ,545 44,325 5,689,162 16,726,316 Total Balance at 1 July 8,105, , ,381 44,325 5,776,408 15,157,260 Total comprehensive income for the year 578, ,139 Transfers to and from reserves 578,201 (92,706) (113,893) - (371,602) - Balance at 30 June 9,261, , ,488 44,325 5,404,806 15,735,399 The financial statements should be read in conjunction with the accompanying notes. 3

6 Statement of Cash Flows Note Cash from operating activities: Receipts from customers & others 20,503,793 18,765,592 Payments to suppliers and employees (20,576,678) (18,275,191) Interest received 378, ,630 Net cash (used in) provided by operating activities 305, ,031 Cash flows from investing activities: Proceeds from sale of plant and equipment 750 1,600 Payments for plant and equipment (131,994) (19,347) Receipts from OHI acquisition 913,157 - Acquisition of other non current assets (269,648) (208,691) Proceeds from financial assets 75,140 61,696 Net cash provided by (used in) investing activities 587,405 (164,742) Net cash increase (decreases) in cash and cash equivalents 892, ,289 Cash and cash equivalents at beginning of year 15,697,465 14,959,176 Cash and cash equivalents at end of year 10(b) 16,590,444 15,697,465 The financial statements should be read in conjunction with the accompanying notes. 4

7 1 Scope of activities The, a purpose driven trust, reflects the interest of the Australian Union Conference of the Seventh-day Adventist Church in the activities of Adventist Development and Relief Agency Australia Limited (the company) which is responsible for the operational activities as delegated by the Executive Committee of the Australian Union Conference. (ADRA) is a Christian, humanitarian agency that creates opportunities, empowers people and shares hope. In partnership with governments, organisations, communities, families and individuals, ADRA inspires those in need to access resources to help themselves realise a better quality of life. ADRA works with people regardless of any ethnic, political, racial or religious association to relieve human suffering. ADRA Australia engages in sustainable community development projects and disaster relief in Australia and abroad. Nationally, ADRA Australia has a range of community development and welfare projects, such as: Community centres Op-shops Indigenous community development Youth-in-crisis intervention Street ministries Disaster relief Within the regions of the South Pacific, Asia and Africa, ADRA Australia s work focuses on the key development sectors of: Food security Water and sanitation Health (including HIV and AIDS) Education Economic development (microfinance, small enterprise development) Disaster relief ADRA is one of Australia s major non-government organisations (NGOs) fully accredited with the Department of Foreign Affairs and Trade (DFAT), and is signatory to the Australian Council for International Development (ACFID) Code of Conduct. ADRA Australia is part of the ADRA network, the worldwide humanitarian arm of the Seventh-day Adventist Church, and is officially recognised in over 125 countries. ADRA has been granted General Consultative Status by the United Nations. On 26 of August, the Trust acquired the assets and operations, and assumed the liabilities of Open Heart International for incorporation into it operational activities. The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards - Reduced Disclosure Requirement. The is a not-for-profit entity established and domiciled in Australia. The trustee company is Adventist Development and Relief Agency Australia Limited. The financial statements for the year ended 30 June were approved and authorised for issue by the Board of Responsible Entities on 8 November. The financial report is presented in Australian currency. 5

8 1 Scope of activities continued The Australian Council for International Development (ACFID) Code of Conduct is complied within the presentation of the Statement of Profit or Loss and Other Comprehensive Income and the Statement of Financial Position. 2 Change in Accounting Policy Changes in accounting estimates During the current reporting period, there was no change to the accounting estimates from previous reporting periods. New and revised standards that are effective for these financial statements A number of new and revised standards became effective for the first time to annual periods beginning on or after 1 July. Information on the more significant standard(s) is presented below. AASB Amendments to Australian Accounting Standards Equity Method in Separate Financial Statements The amendments introduce the equity method of accounting as one of the options to account for an entity s investments in subsidiaries, joint ventures and associates in the entity s separate financial statements. AASB is applicable to annual reporting periods beginning on or after 1 January. The adoption of these amendments has not had a material impact on the Trust. AASB Amendments to Australian Accounting Standards Disclosure Initiative: Amendments to AASB 101 The Standard makes amendments to AASB 101 Presentation of Financial Statements arising from the IASB s Disclosure Initiative project. The amendments: clarify the materiality requirements in AASB 101, including an emphasis on the potentially detrimental effect of obscuring useful information with immaterial information clarify that AASB 101 s specified line items in the statement(s) of profit or loss and other comprehensive income and the statement of financial position can be disaggregated add requirements for how an entity should present subtotals in the statement(s) of profit and loss and other comprehensive income and the statement of financial position clarify that entities have flexibility as to the order in which they present the notes, but also emphasise that understandability and comparability should be considered by an entity when deciding that order remove potentially unhelpful guidance in AASB 101 for identifying a significant accounting policy AASB is applicable to annual reporting periods beginning on or after 1 January. 6

9 2 Change in Accounting Policy continued New and revised standards that are effective for these financial statements continued The adoption of these amendments has not had a material impact on the Trust. 3 Accounting policies (a) Overall considerations Australian Accounting Standards set out accounting principles that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. The following is a summary of the material accounting policies adopted by the entity in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated. The financial report has been prepared using the measurement bases specified by Australian Accounting Standards for each type of asset, liability, income and expense. The measurement bases are more fully described in the accounting policies below. (b) Business combinations Business combinations are accounted for using the acquisition method. The acquisition method involves recognising at acquisition date the identifiable assets acquired and the liabilities assumed in the acquiree. The identifiable assets acquired and the liabilities assumed are measured at their acquisition date fair values. The acquisition date under this method is the date that the acquiring entity obtains control over the acquired entity. Acquisition-related costs are expensed as incurred, and included in administrative expenses. Any consideration which forms part of the combination is recognised at fair value at the acquisition date within equity. Any subsequent changes in the value of the consideration liability are measured through statement of profit or loss and other comprehensive income. (c) Going Concern The financial report has been prepared on the going concern basis. (d) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. 7

10 3 Accounting policies continued (e) Financial instruments Recognition, initial measurement and derecognition Financial assets and financial liabilities are recognised when the Trust becomes a party to the contractual provisions of the financial instrument, and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss, which are initially measured at fair value. Subsequent measurement of financial assets and financial liabilities are described below. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires (f) Inventories Except as stated below inventories are measured at the lower of cost and net realisable value. Costs are assigned on a first-in first-out basis. Inventories held for distribution are measured at cost adjusted for loss of service potential. (g) Plant and equipment Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses. The carrying amount of property, plant and equipment is reviewed annually to ensure it is not in excess of the recoverable amount from these assets. Items of Plant and Equipment are generally not capitalised unless their values exceed 1,000 per item or 1,000 per sub-class. Depreciation The depreciable amount of all fixed assets including capitalised leased assets is depreciated on a straight-line basis over their useful lives to the Trust/trustee company commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Plant and Equipment 5% - 50% The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. 8

11 3 Accounting policies continued (h) Intangible assets Software Software has a finite life and is accounted for using the cost model whereby costs are amortised on a stright-line basis over its estimated useful life of 3 years. (i) Impairment of assets At each reporting date, the Trust reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and depreciated replacement cost, is compared to the asset's carrying value. Any excess of the asset's carrying value over its recoverable amount is expensed to the statement of profit or loss and other comprehensive income. Where the future economic benefits of the asset are not primarily dependent upon the asset's ability to generate net cash inflows and when the entity would, if deprived of the asset, replace its remaining future economic benefits, value in use is depreciated replacement cost of an asset. (j) Provisions Provisions are recognised when the entity has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. (k) Employee benefits Provision is made for the company's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Those cashflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows. Personal leave Some employees have a non-vesting entitlement to personal leave. Included in the provision for employee entitlements is the Trust's liability for accumulated entitlement to such leave expected to be taken within the next year. (l) Gifts in kind - volunteers The work of ADRA is supported by a large number of volunteers each year. Without their help, ADRA could not operate as effectively as it does. 9

12 3 Accounting policies continued (l) Gifts in kind - volunteers continued During the year ended 30 June, 337,401 volunteer hours were provided (:158,623) at a commercial value of 6,770,522 (:2,844,674). (m) Revenue The Trust receives a principal part of its funds from grants and donations. Non-reciprocal donations and grants are recognised on receipt as revenue in the accounting records. Donations and grants of a reciprocal nature or with special conditions attaching thereto are recorded as a special project reserves under unexpended project funds. Any unspent funds are available for use in future years, for only these specific purposes. In common with many charitable organisations, it is not practicable to establish accounting controls over all sources of donations and fundraising income prior to them being recorded in the accounting records. The primary fundraising activity is the ADRA Appeal. This is conducted with the assistance of many offices, staff and volunteers. Revenue from the sale of goods is recognised upon the delivery of goods to customers. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. Revenue from the rendering of services is recognised upon the delivery of the service to the customers. Revenue from donations is recognised upon receipt. All revenue is stated net of the amount of goods and services tax (GST). (n) Goods and services tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. (o) Additional disclosure requirements of Charitable Fundraising Act 1991 No. 69 The financial report does not comply with the additional disclosure requirements of the Charitable Fundraising Act 1991 No. 69 as religious organisations and their affiliated organisations are exempt under section 7 of that Act. 10

13 3 Accounting policies continued (p) Foreign currency transactions and balances Transaction 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 yearend exchange rate. Non monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined. Exchange differences arising on the translation of monetary items are recognised in the Statement of Profit or Loss and Other Comprehensive Income, except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the Statement of Profit or Loss and Other Comprehensive Income. (q) Critical accounting estimates and judgments The trust evaluates estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and based on current trends and economic data, obtained both externally and within the company. No critical accounting estimates and judgments have a material impact other than the consideration of impairment of receivables and non-current assets. No impairment is considered necessary given the nature of the assets and the nature of the trust. In-kind donations Volunteers service for the International projects are valued based on guidelines received from the Department of Foreign Affairs and Trade. Volunteers service for the National projects are valued using the published National Minimum Wages rates. Economic dependence ADRA Australia Trust is dependent on two sources of revenue - donations from the general public and grants from DFAT. At the date of this report the board of directors have no reason to believe that the public and DFAT will not continue to support the Trust. 11

14 4 Tax Adventist Development and Relief Agency Australia Limited, a Public Benevolent Institution, is endorsed to access the following tax concessions: Tax concession From GST Concession 1 July 2005 FBT Exemption 1 July 2005 Income Tax Exemption 11 June 2004 The company operates the following Deductible Gift Recipient Funds: Name From ADRA Australia National Fund 1 Oct 2004 ADRA Australia Overseas Aid Fund 1 Oct Related party transactions There are no related parties other than directors and employees. No advances were made to directors. All advances provided to employees and directors are made on the understanding that they will be repaid through regular payroll deductions. Outstanding balances resulting from such transactions are disclosed in Notes 11 and 17. Employees remunerated under the South Pacific Division Wage Schedule are entitled, after completing a required period of employment, to advance funds from the entity towards the purchase of a home. All funds advanced attract an interest rate as set by the South Pacific Division of the Seventh-day Adventist Church. Outstanding employee loans receivable are reflected in Note 11. Employees are also entitled to make use of salary packaging to maximise the benefits allowed. Any outstanding amounts that have been sacrificed but not yet utilised are reflected in Note 11 as employee salary sacrifice accounts. Any other outstanding funds owed to the entity by the employees are disclosed in Note 11 as employee personal accounts receivable. 6 Donations ADRA Australia - national fund Monetary donations 436, ,819 ADRA Australia - overseas aid fund Monetary donations 7,081,687 5,778,881 7,518,055 6,326,700 12

15 7 Appropriations received Appropriations from SDA Church 108, ,015 8 Other information relevant to operating activities Depreciation, amortisation and impairment loss 95,680 25,718 Remuneration of auditor Auditing or reviewing the financial report 39,000 39,000 9 Key management personnel compensation Primary Total Salary, fees & commissions Super-annuation contribution Total compensation 466,928 51, ,628 Total compensation 477,946 49, , Cash and cash equivalents Note Cash on hand Cash at bank 1,142, ,385 Cash Management Facility call deposits 10(a) 15,448,044 15,043,780 16,590,444 15,697,465 13

16 10 Cash and cash equivalents continued (a) Cash Management Facility In order to ensure that denominational funds in hand are always fully utilised, the South Pacific Division of the Seventh-day Adventist Church has established Division CCMF Limited to provide facilities for their pooling. Funds deposited in the Cash Management Facility operated by that company are unsecured but are available at call. Distributions, paid quarterly to participating denominational entities, are disclosed together with other appropriations received by the Trust. The effective distribution rate on these deposits was 2.25%( :2.5%). (b) Reconciliation of cash Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the balance sheet as follows: Cash and cash equivalents 16,590,444 15,697,465 16,590,444 15,697, Trade and other receivables Current Employees 1, Accrued income - 36,741 Other receivables 276, , , ,972 14

17 11 Trade and other receivables continued Advances made to ADRA partner offices are non-interest bearing. It is understood that similar loans could be made from other ADRA offices internationally with similar terms. The advances have not been discounted to net present value as the discount factor would be equivalent to the interest rate which may be available to the ADRA partner offices from other sources. Provision for impairment of receivables Current trade and term receivables are generally on 30-day terms. Non-current trade and term receivables are assessed for recoverability based on the underlying terms of the contract. A provision for impairment is recognised when there is objective evidence that an individual trade or term receivable is impaired. These amounts have been included in the other expenses item. For the current financial year there are no receivables that are considered to be impaired. It is expected these all receivables will be received when due. Credit risk - trade and other receivables ADRA has no significant concentration of credit risk with respect to any single counterparty or group of counterparties other than those receivables specifically provided for and mentioned within Note 11. The main source of credit risk to ADRA is considered to relate to the class of assets described as trade and other receivables. The following table details ADRA s trade and other receivables exposed to credit risk (prior to collateral and other credit enhancements) and impairment provided for thereon. Amounts are considered as past due when the debt has not been settled within the terms and conditions agreed between ADRA and the customer or counterparty to the transaction. Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided for where there are specific circumstances indicating that the debt may not be fully repaid to the Trust. The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be of high credit quality. Gross amount Past due and impaired Within initial terms Trade and term receivables 278, ,599 Non-current receivables Total 278, ,599 Trade and term receivables 203, ,972 Total 203, ,972 15

18 11 Trade and other receivables continued Aged analysis The ageing analysis of receivables is as follows: 0-30 days 213,916 87, days 22,863 36, days 33, days 8,578 79, , , Inventories At Cost Marketing merchandise 146,864 6, Financial assets Current Retro paid deposit 43,184 22,941 Total current assets 43,184 22,941 Note Non-current Retro paid deposit 13(a) 46, ,678 46, ,678 (a) Retro paid deposit This represents funds deposited with the Cash Management Facility which has been invested in a term deposit relative to Retro Paid Bank Guarantee Security for workers compensation. 16

19 14 Other assets Current Prepayments 65,223 27,224 Fleet vehicles loan balances 128, , , , Property plant and equipment Land and Buildings used by the Trust are owned by Australasian Conference Association Limited on behalf of the Australian Union Conference of the Seventh-day Adventist Church. That company, at the request of the Australian Union Conference, has permitted the trustee company to use the property for an agreed fee in conjunction with the activities of the Trust. Plant and equipment At cost 291, ,646 Less accumulated depreciation (164,051) (132,700) Total plant and equipment 127,784 42,946 Movements in carrying amounts Plant and Equipment Balance at 1 July 175, ,646 Additions 131, ,994 Disposals Total (15,805) (15,805) Balance at 30 June 291, ,835 Depreciation and impairment losses Balance at 1 July (132,700) (132,700) Depreciation expense (46,406) (46,406) Disposals 15,055 15,055 Balance at 30 June (164,051) (164,051) Carrying amount 127, ,784 17

20 16 Intangible assets Intellectual property used by the Trust is owned by Australasian Conference Association Limited on behalf of the Australian Union Conference of the Seventh-day Adventist Church. That company, at the request of the Australian Union Conference, has permitted the trustee company to use the property in conjunction with the activities of the Trust. While intellectual property contained in intangible assets is owned by Australasian Conference Association Limited, intangible assets such as business/trading names and computer software are held in the name of Adventist Development and Relief Agency Australia Limited. Computer software, internally generated At cost 721, ,049 Accumulated amortisation and impairment (49,274) - Total intangibles 672, , Trade and other payables Current Unsecured liabilities Employees 16,142 7,513 Other payables 463, ,988 Accrued employee entitlements 7,475 3,115 Accrued expenses 169,565 55, , , Provisions Current Employee benefits 571, , , ,330 18

21 18 Provisions continued Non-current Employee benefits 144, , , ,906 Movements in carrying amounts Employee entitlements Balance at 1 July 566, ,236 Provisions made during the year 208, ,207 Provisions used during the year (58,617) (58,617) Balance at 30 June 715, ,826 Total Non-current 144, ,488 Current 571, ,338 Total 715, ,826 Provision for employee entitlements A provision has been recognised for employee entitlements relating to annual and long service leave for employees. In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based upon historical data. The measurement and recognition criteria for employee benefits has been included in note Reserves (a) Fixed asset replacement reserve The fixed asset replacement reserve records funds to be used for the future purchase of plant and equipment. (b) International disaster relief reserve The international disaster relief reserve records funds set aside for use in the funding of support in the event of disasters that occur outside of Australia. (c) Australian disaster relief reserve The Australian disaster relief reserve records funds set aside for use in the funding of support in the event of disasters that occur within Australia. 19

22 19 Reserves continued (d) Program support reserve (e) The program support reserve records funds held for allocation towards future projects related to development. Funds reserved for projects The funds allocated to projects reserve records funds set aside towards future specified projects related to development. 20 Funds available for future use The concept of ownership is not appropriate as all dispositions received by the trustee company are to be applied to the charitable purposes set out in its constitution, namely the direct relief of poverty, sickness, suffering, distress, misfortune, destitution or helplessness. The property and income held belongs to the company as trustee of the purpose trust set out in the constitution. Hence all such dispositions received have been recorded as revenue regardless of intended use whether stipulated by the donor or not. Consequently equity has been classified as retained earnings rather than as contributed equity and is termed Funds available for future use. Capital management When managing capital, management's objective is to ensure the Trust continues as a going concern. Management also aims to maintain a cost structure that ensures the lowest cost of capital available to the Trust. Management also monitors working capital and liquidity in accordance with the recommendations as outlined in the South Pacific Division Working Policy FIN Working Capital. When the available working capital is less than 100% of the recommendation and/or the liquid assets on hand are inadequate to cover current liabilities and allocated funds, the Trust will make provision for covering such deficiencies in ensuing years in accordance with South Pacific Division Working Policy FIN Financial Control. The Trust has no other externally imposed capital management requirements. There were no changes in the Trust's approach to capital management during the year. 20

23 21 Acquisition of Open Heart International On 26 August, the Adventist Development and Relief Agency (ADRA) acquired 100% of the equity of Open Heart International (OHI), a business unit of the Adventist Healthcare Limited, based in Wahroonga, New South. The acquisition was made to enhance ADRA's charitable work in its overseas healthcare sector. OHI provides programming that complements this strategic objective. Fair value of consideration transferred Amount settled in cash 1 Recongnised amounts of identifiable net assets Property, plant and equipment 53,902 Total non-current assets 53,902 Inventories 34,699 Cash and cash equivalent 913,157 Total current assets 947,856 Provisions (77,932) Other liabilities (835,224) Total non-current liabilities (913,157) Identifiable net assets 88,601 Consideration transferred settled in cash 1 Cash and cash equivalent acquired 913,157 Net cash inflow on acquisition 913,156 Consideraion transferred The acquisition of Open Heart International was settled in cash for Contingent liabilities Contingent liabilities exist relative to any future claims which may be made against the trustee company arising from trusteeship dealings. At the end of the period there was an amount of 534,371 (: 1,409,310) unexpended DFAT funding that may have to be returned to DFAT if not applied to the approved project. 23 Post-reporting date events No adjusting or significant non-adjusting events have occurred between the reporting date and the date of authorisation. 24 Company details The registered office of the trustee company is: 146 Fox Valley Road 21

24 24 Company details continued Wahroonga NSW

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26 Level 17, 383 Kent Street Sydney NSW 2000 Correspondence to: Locked Bag Q800 QVB Post Office Sydney NSW 1230 T F E info.nsw@au.gt.com W Independent Auditor s Report to the Trustees of Adventist Development and Relief Agency Australia Trust Report on the audit of the financial report Opinion We have audited the financial report of (the Entity), which comprises the statement of financial position as at 30 June, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and comprising notes to the financial statements, including a summary of significant accounting policies and the responsible persons of the trustee company declaration. In our opinion, the accompanying financial report of Adventist Development and Relief Agency Australia Trust: a b presents fairly, in all material respects, the entity s financial position as at 30 June and of its performance and cash flows for the year then ended; and complies with Australian Accounting Standards - Reduced Disclosure Requirements, the Australian Charities and Not-for-Profits Commission Act 2012 and Section C2.2 of the ACFID Code of Conduct. 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 Trust 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) 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 audit opinion. Grant Thornton Audit Pty Ltd ACN a subsidiary or related entity of Grant Thornton Australia Ltd ABN Grant Thornton refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another s acts or omissions. In the Australian context only, the use of the term Grant Thornton may refer to Grant Thornton Australia Limited ABN and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. 24

27 Information Other than the Financial Report and Auditor's Report Thereon The Directors of the trustee company are responsible for the other information. The other information comprises the information included in the Entity s annual report for the year ended 30 June, but does not include the financial report and our auditor s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. Responsibility of the Trustees for the Financial Report The Directors of the Trustee Company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards- Reduced Disclosure Requirements, the Australian Charities and Not-for-Profits Commission Act 2012 and Section C2.2 of the ACFID Code of Conduct. This responsibility includes such internal controls as these Directors determine are necessary to enable the preparation of the financial report to be free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Trust 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 Entity or to cease operations, or has no realistic alternative but to do so. The Directors of the Trustee Company are responsible for overseeing the Trusts 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 the 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 this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: This description forms part of our auditor s report. Grant Thornton Audit Pty Ltd Chartered Accountants A G Rigele Partner - Audit & Assurance Sydney, 8 November 25