2017 Annual Report A report on financial year ending 30 June 2017

Directors' Report

The Directors have pleasure in submitting the financial report of Perth Region NRM Inc. for the financial year ended 30 June 2017.

Board of Management
The names of Board members throughout the year and at the date of this report are:
Marguerite Anklesaria (Appointed 27 October 2016)
Pasquale Cesare
Bruce Hegge
Darrell Jones
David Lucido (Appointed 27 October 2016)
Lisa Potter (ceased by constitutional  requirement 27 October 2016)
Mariyon Slany
Stephen Vanstan

Principal Activities
The principal activities of the Association during the year were to provide coordination of natural resource management in the Perth region.

Significant Changes
No significant change in the nature of these activities occurred during the year.

Operating Result
The surplus for the year amounted to $56,219 (2016 deficit $48,654).

Signed in accordance with a resolution of the Board of Directors
Mariyon Slany
Chairperson

Darrell Jones
Finance Committee Chairperson

Statement of Financial Position

Statement of Financial Position as at 30 June 2017

  Notes

2017

 

2016

   

$

 

$

ASSETS        
 
Current assets      
Cash and Equivalents

5

2,108,335

2,277,317

 GST Refundable  

10,052

 Accounts Receivable

6

49,732

28,007

 

2,168,119

2,305,324

Non-current assets  
Property, Plant and Equipment

2

12,887

54,625

 

12,887

54,625

Total Assets  

2,181,006

 

2,359,949

     
LIABILITIES        
 
Current liabilities        
Borrowings

4

892

Accounts Payable  

74,873

73,186

Payroll Liabilities  

168,912

170,426

GST Payable  

14,839

Funding received in advance

3

188,142

415,206

   

432,819

 

673,657

Non-current liabilities      
Provision for Long Service Leave

24,446

18,770

 

24,446

 

18,770

 
Total Liabilities  

457,265

692,427

       
Net Assets  

1,723,741

 

1,667,522

     
EQUITY        
 
Retained Surplus  

1,723,741

1,667,522

Total Equity  

1,723,741

 

1,667,522

 

Statement of Change in Equity

Statement of Change in Equity for the year ended 30 June 2017

   

2017

 

2016

   

$

 

$

 

EQUITY

       
 
Equity at the Start of the Year  

1,667,522

1,716,176

Total surplus / (deficit)  

56,219

(48,654)

Equity at the end of the Year  

1,723,741

 

1,667,522

Cash Flow Statement

Cash Flow Statement for the year ended 30 June 2017

  Notes

2017

 

2016

   

$

 

$

CASH FLOW FROM OPERATING ACTIVITIES        
 
Cash Receipts from Customers   2,193,326   2,836,171
Cash Paid to Suppliers and Employees   (2,427,422)   (3,403,219)
Net Cash (used in) / from Operating Activities 5 (234,096)   (567,048)
 
CASH FLOW FROM INVESTING ACTIVITIES        
 
Purchase of Property or Equipment   (2,253) (7,760)
Proceeds from Sale of Property or Equipment   8,800 15,791
Interest Received   57,674 69,705
Net Cash from Investing Activities 5 64,221   77,736
     
CASH FLOW FROM FINANCING ACTIVITIES        
 
Payment of Finance Liabilities     (85,624)
Net Cash used in Financing Activities     (85,624)
         
Net Increase / (Decrease) in Cash and Cash        
Equivalents   (169,875)   (574,936)
Cash and Cash Equivalents at Beginning of Period 2,277,317 2,852,254
Cash and Cash Equivalents at End of Period 5 2,107,442   2,277,317

Income Statement

Income Statement for the year ended 30 June 2017

  Notes

2017

 

2016

   

$

 

$

REVENUE        
Grants and Contributions

2,417,450

 

2,614,097

Other Revenues:      
Interest Received

52,972

 

70,982

Other income

58,443

 

40,839

Total Income  

2,528,865

 

2,725,918

EXPENSES        
 
Project Expenses

905,702

1,124,040

Employment Costs

1,241,694

1,308,179

Accounting and Audit Expense

12,648

11,400

Advertising & Marketing

38,284

58,752

Bank Fees

202

326

Board and Committee Costs

8,185

8,895

Communication and IT Costs

77,955

64,807

Consulting fee

20,489

11,651

Depreciation

35,191

36,050

Industry Service Fees

18,000

12,000

Insurances

9,273

11,781

Motor Vehicle Expenses

28,700

24,596

Office Supplies

8,822

13,749

Postage Freight and Delivery

808

992

Promotions

11,230

25,950

Rent & Electricity

31,799

32,492

Repairs & Maintenance

449

102

Subscriptions and Publications

3,974

6,430

Training and Development

7,353

5,551

Travel Expenses

11,888

16,831

Total Expenses  

2,472,646

 

2,774,572

Net Surplus / (Deficit)  

56,219

 

(48,654)

 

Notes to the Financial Statements

The financial report covers Perth Region NRM Inc. as an individual entity (‘Association’). Perth Region NRM Inc. is an Association incorporated in Western Australia under the Incorporated Associations Act 2015. The principal activities of the Association are to provide co-ordination of natural resource management in the Perth region.

Note 1: Summary of Significant Accounting Policies

  1. a) Basis of Preparation

This financial report is a special purpose financial report prepared for distribution to the Members of the Association and for internal management reporting purposes to fulfill the Board of Management’s (“Board”) financial reporting requirements under the Australian Charities and Not-for-Profits Commission Act 2012 and the Associations Constitution. The Board has determined that the Association is not a reporting entity.

The accounting policies used in the preparation of the financial statements, are consistent with the financial reporting requirements of the Australian Charities and Not-for-Profits Commission Act 2012 and the Associations Constitution and with prior years, and are, in the opinion of the Board appropriate to meet the needs of the members.

The financial report has been prepared on an accruals basis and is based on historic costs and does not take into account changing money values or, except where specifically stated, current valuations of non-current assets.

The requirements of Australian Accounting Standards and other professional reporting requirements do not have mandatory applicability to Perth Region NRM Inc. because it is not a reporting entity. The Board has, however, prepared the financial statements in accordance with the recognition, measurement and classification requirement of Australian Accounting Standards and the disclosure requirements of Accounting Standards AASB 101 Presentation of Financial Statements, AASB 107 Statement of Cash Flows, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, AASB 1031 Materiality, AASB 1048 Interpretation & Application of Standards and AASB 1054 Australian Additional Disclosures.

The financial statements have been prepared on a going concern basis. The financial statements are presented in Australian Dollars.  Values are rounded to the nearest whole dollar.

The following material accounting policies have been adopted in the preparation of this special purpose financial report.

  1. b) Income

Revenue recognition is as follows:

Grants, donations, gifts and other non-reciprocal contributions

Revenue is measured at the fair value of contributions received or receivable. Income arising from the contribution of an asset to the Association is recognised when all of the following conditions are met:

  • The Association obtains control of the contribution or the right to receive the contribution
  • It is probable that the economic benefits comprising the contribution will flow to the entity, and
  • The amount of the contribution can be measured reliably

Interest

Revenue is recognised as the interest accrues.

Notes to the Financial Report continued

  1. c) Financial Instruments

In addition to cash and cash equivalents, the Association has two categories of financial instrument:

  • Receivables; and
  • Financial liabilities measured at amortised cost

These have been disaggregated into the following classes:

Financial Assets

  • Cash and cash equivalents
  • Receivables and prepayments

Financial Liabilities

  • Payables
  • Borrowings

Initial recognition and measurement of financial instruments is at fair value which normally equates to the transaction cost or the face value. Subsequent measurement is at amortised cost using the effective interest method.

The fair value of short-term receivables and payables is the transaction cost or the face value because there is no interest rate applicable and subsequent measurement is not required as the effect of discounting is not material.

  1. d) Income Tax

The Association is a non-profit organisation and thus exempted from income tax by virtue of section 50(5) of the Income Tax Assessment Act 1997, as amended.

  1. e) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net 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 expense. Receivables and payables in the Statement of Financial Position are shown inclusive of GST.

  1. f) Property, Plant and Equipment (Note 2)

In accordance with the Constitution, Net assets (after all other costs are paid) are to be passed over to a like organisation on winding up and in the case of leasehold improvements; these will be abandoned when Perth Region NRM Inc. vacates the premises.

Property, Plant and Equipment are recognised as Non-current assets in the Statement of Financial Position.

All Property, Plant and Equipment having a limited useful life are systematically depreciated over their estimated useful lives in a manner that reflects the consumption of their future economic benefits.

Depreciation on assets is calculated using the straight line method, using rates which are reviewed annually. Estimated useful lives for each class of depreciable asset are:

Furniture and fittings                  4 years

Motor Vehicles                          4 years

 

Notes to the Financial Report continued

  1. g) Provisions

Provisions are liabilities of uncertain timing or amount and are recognised where there is a present legal or constructive obligation as a result of a past event and when the outflow of resources embodying economic benefits is probable and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at the end of each reporting period.

Provisions – employee benefits

Annual leave and long service leave

The liability for annual and long service leave that is expected to be settled within 12 months after the end of the reporting period is recognised and measured at the undiscounted amounts expected to be paid when the liabilities are settled.

Long service leave expected to be settled more than 12 months after the reporting period is measured at the present value of amounts expected to be paid when the liabilities are settled. Leave liabilities are in respect of services provided by employees up to the end of the reporting period. When assessing expected future payments, consideration is given to expected future wage and salary levels including non-salary components such as employer superannuation contributions.

 

  1. h) Trade and Other Payables

Trade and other payables are carried at amortised cost and due to their short-term nature they are not discounted.

They represent liabilities for goods and services provided to the Association prior to the end of the financial year that are unpaid and arise when the Association 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.

Note 2: Property, Plant and Equipment

COST

ACCUMULATED DEPRECIATION

CARRYING AMOUNT

$

$

$

2017
At cost:
Furniture and Equipment

58,879

(46,733)

12,146

Vehicles

126,613

(125,872)

741

185,492

(172,606)

12,887

2016
At cost:
Furniture and Equipment

56,626

(34,023) 22,603
Vehicles

144,021

(111,999)

32,022

200,647 (146,022)

54,625

 

 Note 3: Funding received in advance

 

2017

2016

 

$

$

Balance at the beginning of the year

415,206

337,807

Add: funding received during the year

2,243,058

2,775,554

Less: reclassified to other current liabilities

(37,500)

Less: prior year funding not used returned to funding body

(16,903)

Less: funding received in advance transferred to income statement

(2,470,122)

(2,643,752)

Balance at the end of the year carried forward

188,142

415,206

 

Note 4: Borrowings

Borrowings comprise:

2017

2016

 

$

$

Unsecured Bank Credit Cards

892

Total Borrowings

892

 

A ten thousand dollar bank credit card facility with variable interest rates was opened in July 2016.  The current weighted average interest rate is 17.74% purchases, 19.24% cash advances.

 

Note 5: Cash Flow Statement

Reconciliation of cash flows from operating activities to net deficit

 

2017

2016

 

$

$

Net Surplus / (Deficit)

56,219

(48,654)

Add: Adjustment for Depreciation

43,629

49,022

Less: Adjustment for Gain on disposal

(8,437)

(12,972)

Less: Adjustment for Investment income

(52,972)

(70,982)

38,439

(83,586)

Movements in working capital
Change in receivables

(26,428)

(9,584)

Change in income in advance

(227,064)

77,399

Change in other liabilities

(20,730)

(31,833)

Change in payables

1,687

(519,443)

Cash (used in) / from operations

(234,096)

(567,048)

 

Property Plant and Equipment

During the period cash payments were made to purchase property, plant and equipment with an aggregate cost of $2,253 (2016 $7,760) and $8,800 (2016 $15,791) cash was received for the sale of property, plant and equipment with an aggregate cost of $ 17,407 (2016 $13,531).

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances with banks, investments in money market instruments net of outstanding borrowings.  Cash and cash equivalents included in the statement of cash flows comprise the following amounts in the statement of financial position:

 

2017

2016

 

$

$

Cash on hand and balances with banks

268,335

77,317

Investments in money market instruments

1,840,000

2,200,000

2,108,335

2,277,317

Borrowings

(892)

Total Cash and cash equivalents

2,107,442

2,277,317

 

Note 6: Accounts Receivable

Accounts receivable comprises:

2017

2016

 

$

$

Trade customers

7,931

5,913

Accrued interest on money market deposits

4,959

9,661

Prepayments

36,842

12,433

Total Accounts Receivable

49,732

28,007

 

Note 7: Lease Commitments

 

Operating Leases

2017

2016

 

$

$

Payable – minimum lease payments:
Not later than 12 months

43,942

29,320

Between 12 months and five years

61,469

Total Operating Lease Commitments

105,411

29,320

 

The Association has an operating lease from the Western Australian Farmers Federation (Inc) (the lessor) for office space.  The lease term expires 12 July 2019.  Options to renew are one further term of two years and one further term of one year, commencing on the day after the last day of the initial term, subject to the lessor retaining a leasehold interest in the Premises on and after 30 June 2022.

The Association has an operating lease from MacQuarie Equipment Rentals Pty Ltd for a multifunction copier.  The lease ends 21 September 2020.

 

Note 8: Commitments for expenditure

 

 

2017

2016

 

$

$

Commitments for the acquisition of Furniture and Equipment

26,688

 

Officers’ Assertion Statement

The Board has determined that the Association is not a reporting entity and that this special purpose financial report should be prepared in accordance with the accounting policies outlined in Note 1 of the financial statements.

In the opinion of the Board the financial report:

  1. Is in accordance with Division 60 of the Australian Charities and Not-for-profits Commission Act 2012, including:
  2. a) Giving a true and fair view of its financial position as at 30 June 2017 and of its performance for the financial year ended on that date: and
  3. b) Complying with Australian Accounting Standards and the Australian Charities and Not-for-profits Commission Regulation 2013, and
  4. At the date of this statement, there are reasonable grounds to believe that Perth Region NRM Inc. will be able to pay its debts as and when they fall due

This statement is made in accordance with a resolution of the Board and is signed for and on behalf of the Board by:

Mariyon Slany
Chairperson

Darrell Jones
Finance Committee Chairperson

Auditor's Report