Children First Foundation - Microsoft...Children First Foundation is a not-for-profit unlisted public company limited by guarantee, incorporated and domiciled in Australia. The financial

Children First Foundation

ACN 088 112 261

Financial Report for the year ended

30 June 2019

Children First Foundation – ACN 088 112 261 Financial Report for the year ended 30 June 2019

CHILDREN FIRST FOUNDATION FINANCIAL REPORT

FOR THE YEAR ENDED 30 JUNE 2019

Contents Page Number Directors' report 1 Auditor’s independence declaration 4 Auditors' report 5 Directors’ declaration 7 Statement of profit or loss and other comprehensive income 8 Statement of financial position 9 Statement of changes in equity 10 Statement of cash flows 11 Notes to the financial statements 12 General Information The financial statements cover Children First Foundation as an individual entity. The financial statements are presented in Australian dollars, which is Children First Foundation’s functional and presentation currency. Children First Foundation is a not-for-profit unlisted public company limited by guarantee, incorporated and domiciled in Australia. The financial statements were authorised for issue, in accordance with a resolution of directors, on the date of signing this report. The directors have the power to amend and reissue the financial statements.

Page 1


CHILDREN FIRST FOUNDATION DIRECTORS’ REPORT


The Directors present their report together with the financial report of Children First Foundation (“the Foundation”) for the financial year ended 30 June 2019, and the auditor’s report thereon. DIRECTORS The Directors of the Foundation at any time during the financial year and the number of meetings attended and eligible to attend are:

Name (Service period is full year unless otherwise stated)

No. of meetings attended

No. of meetings held*

Roger I. Langley (Chairman) 9 10 Don Maloney 10 10 Peter D. Gilbert 10 10 Sarah Fraser (resigned 11/02/2019) 2 6 Jeff Hudson 9 10 Sue English 9 10

*Held: reflects the number of meetings held during the time the director held office during the year. DIRECTORS’ SPECIAL RESPONSIBILITIES, QUALIFICATIONS AND EXPERIENCE Roger Langley Chairman (Appointed 1 July 2014); Deputy Chairman (to 30 June 2014) Qualifications Ass Dip Retail Management Experience Former Owner/Managing Director Network Recruitment Services Pty Ltd for

over 20 years, consulting to major corporates on business process improvements, recruitment and selection of key individuals and teams. Roger, now retired consults with small businesses on business improvement and holds voluntary positions on several boards. Director since 10/03/2003

Peter Gilbert Honorary Treasurer and Director Qualifications Dip. Comm., Dip Acct. (Ind. Acct.) FCPA Experience Founding Director in 1974 of PDG & Associates – retired December 2012.

Member of Rotary for 35 years and Past District Governor of Rotary District 9790. Director since 12/09/2005

Jeff Hudson Director Qualifications Cert IV Financial Planning. Justice of the Peace NSW Experience Commenced work in the life insurance industry in 1970. Practising financial

planner from 1981 until retirement in 2013. Member of Kiwanis International Sydney Club since 1985 including positions of Past President and Past Lieutenant Governor Division 2, District of Australia. Active in humanitarian work in the Philippines. Director since 17/07/2014

Page 2


CHILDREN FIRST FOUNDATION DIRECTORS’ REPORT


DIRECTORS’ SPECIAL RESPONSIBILITIES, QUALIFICATIONS AND EXPERIENCE (Continued)

Don Maloney Deputy Chairman and Director Qualifications BA and LLB (Hons) degree from the University of Melbourne. Australian

legal practitioner. Experience Partner of law firm, Ashurst (formerly Blake Dawson) for 23 years. Don is

currently the Chief Legal Counsel at Property Exchange Ltd (PEXA). His other current appointments include Company Secretary, The Production Company (Australia) Limited. Director since 14/10/2013

Sarah Fraser Director and Honorary Secretary Qualifications BA, LLB and LLM degrees from the University of Western Australia. Experience Former practitioner in the areas of family law and child welfare issues,

commencing 1994. Director since 21/11/2016

Sue English Director Qualifications Experience

DipRANZCOG FRACGP. Sue is a practising General Practitioner in Bayside Melbourne with special Interest in paediatric and adolescent health. Sue is a founding member of International Women’s Forum Australian Chapter and a member of the Victorian State Committee. She also works as an international humanitarian in Timor Leste.

Director since 17/7/2017

PRINCIPAL ACTIVITIES The Foundation’s principal activity during the year was its Miracle sMiles program. This program provides corrective or restorative surgery for disadvantaged children from developing countries, and provides 24/7 care and treatment at the Foundation’s Retreat in Kilmore. OBJECTIVES The Foundation’s vision is: “We picture a world where every child can access excellent medical care wherever they live”. Our mission is: “Children First Foundation facilitates life-changing surgery in Australia for disadvantaged children from developing countries”. STRATEGY FOR ACHIEVING THE OBJECTIVES The Foundation’s strategy for achieving these objectives is to carry out fundraising activities and to maintain and expand the Foundation’s relationships with the surgeons, hospitals, medical agencies and referring bodies, who can assist the Foundation with its humanitarian work. PERFORMANCE MEASURES The Foundation measures the success of its programs by reference to the outcome for the children it cares for, the expansion of its relationships with hospitals and surgeons, and the increase in the sponsors and donors supporting its work. During the period 1 July 2018 to 30 June 2019, the Foundation, under their Miracle Smiles Program, treated 23 children from developing countries, facilitating surgery which they were unable have in their own country.

AUDITOR’S INDEPENDENCE DECLARATION UNDER SUBDIVISION 60-C SECTION 60-40 OF AUSTRALIAN CHARITIES AND NOT-FOR-PROFITS COMMISSION ACT 2012 To: the directors of Children First Foundation

I declare that, to the best of my knowledge and belief, during the year ended 30 June 2019 there have been:

(i) no contraventions of the auditor independence requirements as set out in the Australian Charities and Not-for-profits Commission Act 2012 in relation to the audit; and

(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

DFK Kidsons Partnership

Robert Wernli 31 October 2019 Partner Melbourne

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHILDREN FIRST FOUNDATION Opinion We have audited the financial report of Children First Foundation which comprises the statement of financial position as at 30 June 2019, 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 notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, the accompanying financial report of Children First Foundation, is in accordance with Division 60 of the Australia Charities and Not for Profits Commission Act 2012, including:

(a) gives a true and fair view of the financial position of the Foundation as at 30 June 2019, and of its financial performance and its cash flows for the year then ended; and

(b) complying with Australian Accounting Standards – Reduced Disclosure Requirements and Division 60 of the Australia Charities and Not for Profits Commission Regulation 2013.

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 Foundation 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 opinion. Responsibilities of Management and Those Charged with Governance for the Financial Report The directors of the Foundation are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards – Reduced Disclosure Requirements, and the Australian Charities and Not for Profits Commission Act 2012 and for such internal control as management determines is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In preparing the financial report, management is responsible for assessing the Foundation'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 Foundation or to cease operations, or has no realistic alternative but to do so. The directors are responsible for overseeing the Foundation’s financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

MONTH 2015 Page 2

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and

perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate

in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity's internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related

disclosures made by management. • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit

evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Entity to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the

financial report represents the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

DFK Kidsons Partnership

Robert Wernli Melbourne Partner 31 October 2019

Page 8


CHILDREN FIRST FOUNDATION STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME


NOTE 2019 2018 $ $Income Donations 1,884,656 1,081,376Dividend income 61,123 31,630Event income 242,639 230,756Fundraising income 23,367 40,561Interest income 13,082 12,016Other income 30,731 26,691Net fair value gains/(losses) on financial assets 44,235 −Total income 2,299,833 1,423,030 Expenses Administration expenses 80,107 91,223Advertising & promotions 12,698 15,870Audit and legal fees 7,276 12,507Depreciation and amortisation 76,925 70,421Employee benefits costs 835,554 753,237Event direct costs 132,305 129,260IT expenses 8,987 17,873Household expenses 27,341 29,300Medical expenses 133,452 49,003Motor vehicle expenses 13,040 12,778Property expenses 70,538 40,323Travelling expenses 42,049 32,860Total expenses 1,440,272 1,254,655 Net operating surplus for the year 859,561 168,375 Other comprehensive income Revaluation of investments 10 − 23,331Total other comprehensive income − 23,331 Comprehensive result for the year attributable to the members of Children First Foundation

859,561 191,706

The accompanying notes form part of these financial statements.

Page 9


CHILDREN FIRST FOUNDATION STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2019

NOTE 2019 2018 $ $CURRENT ASSETS

Cash and cash equivalents 3 578,592 553,457Trade and other receivables 4 23,514 27,916Prepayments 37,139 29,295Investments 5 1,647,885 998,842 TOTAL CURRENT ASSETS

2,287,130 1,609,510

NON CURRENT ASSETS

Property, plant & equipment 6 4,374,527 4,171,492Intangible assets 7 369 539 TOTAL NON CURRENT ASSETS

4,374,896 4,172,031

TOTAL ASSETS

6,662,026 5,781,541

CURRENT LIABILITIES

Trade and other payables 8 83,023 70,713Provisions 9 75,090 69,387 TOTAL CURRENT LIABILITIES

158,113 140,100

NON CURRENT LIABILITIES

Provisions 9 4,059 1,148 TOTAL NON CURRENT LIABILITIES 4,059 1,148 TOTAL LIABILITIES

162,172 141,248

NET ASSETS

6,499,854 5,640,293

EQUITY

Retained earnings 3,734,757 2,797,954Reserves 10 2,765,097 2,842,339 TOTAL EQUITY

6,499,854 5,640,293


Page 10


CHILDREN FIRST FOUNDATION STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2019

Retained Earnings

$Reserves

$

TotalEquity

$Equity as at 1 July 2018 2,797,954 2,842,339 5,640,293Net operating surplus for the year 859,561 − 859,561Change in accounting policy – AASB 9 77,242 (77,242) −Other comprehensive income − − −Equity as at 30 June 2019 3,734,757 2,765,097 6,499,854 Equity as at 1 July 2017 2,629,579 2,819,008 5,448,587Net operating surplus for the year 168,375 − 168,375

Other comprehensive income:

Revaluation of investments − 23,331 23,331

Total other comprehensive income − 23,331 23,331

Equity as at 30 June 2018 2,797,954 2,842,339 5,640,293


Page 11


CHILDREN FIRST FOUNDATION STATEMENT OF CASH FLOWS


NOTE 2019 2018 $ $CASH FLOWS FROM OPERATING ACTIVITIES Receipts from donations and other activities 2,302,287 1,432,640Interest received 13,082 12,016Net GST received from Australian Tax Office 35,159 38,102Payments to suppliers and employees (1,396,560) (1,279,001)

Net cash generated from operating activities

953,968

203,757

CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment (279,790) (271,543)Payments for investments (649,043) (402,576) Net cash used in investing activities

(928,833)

(674,119)

Net increase/(decrease) in cash and cash equivalents held 25,135 (470,362) Cash and cash equivalents at the beginning of the year 553,457 1,023,819

Cash and cash equivalents at the end of the year 3

578,592

553,457


Page 12


CHILDREN FIRST FOUNDATION NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. Basis of preparation The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards – Reduced Disclosure Requirements including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Australian Charities and Not-for-profits Commission Act 2012. The financial statements do not comply with International Financial Reporting Standards (IFRS). The financial report, except for the cash flow information, has been prepared on an accruals basis and is based on historical costs and does not take into account changing money values or, except where stated, current valuations of non-current assets. The financial statements have been prepared on a going concern basis. All amounts in the financial statements have been rounded to the nearest one dollar. Critical accounting estimates The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2. Accounting Policies

(a) Revenue Recognition Revenue is recognised when it is probable that the economic benefit will flow to the Foundation and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. Donations Donations are recognised at the time they are received. The Foundation receives a significant amount of in-kind contributions in the form of voluntary labour and donated goods and services. It is not practical to record and measure reliably these contributions received and the associated equal expenditure at fair value. These transactions are not recognised in the financial statements. Interest Income Interest income is recognised as it accrues. Dividend/Distribution Income Dividend and distribution income is recognised on the date of payment. Fundraising Fundraising income is recognised as income when proceeds from the fundraising event are received.

Page 13




SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (b) Taxation The Foundation has received an income tax exemption under Division 50 of the Income Tax Assessment Act 1997. (c) Current and non-current classification Assets and liabilities are presented in the statement of financial position based on current and non-current classification. An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the company's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is classified as current when: it is either expected to be settled in the company's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current. (d) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. (e) Employee benefits Wages and salaries and annual leave Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12 months of the reporting date are recognised in current liabilities in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Long service leave The liability for long service leave is recognised in current and non-current liabilities, depending on the unconditional right to defer settlement of the liability for at least 12 months after the reporting date. The liability is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Page 14




1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (f) Property, Plant and Equipment Cost and Valuation Initial recognition All items of property, plant and equipment are initially measured at cost, less where applicable, any accumulated depreciation unless otherwise stated. Subsequent measurement Land and Buildings are subsequently measured at fair value less accumulated depreciation and impairment. Where assets are revalued, the revaluation increments are credited directly to the asset revaluation reserve, except to the extent that a revaluation decrement occurs and there is no previous revaluation increment in the asset revaluation reserve for that class of assets to be offset against. In this case, the revaluation decrement is recognised as a loss on revaluation in the income statement for the period in which the revaluation decrement occurred. Further details for determination of fair value are disclosed in Note 2 and Note 6. All other items of property, plant and equipment are subsequently measured at cost less accumulated depreciation and impairment. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Foundation.

Depreciation All property, plant and equipment with finite useful lives are depreciated.

Depreciation represents the allocation of the asset’s value, less any estimated residual, over its estimated useful life. Depreciation commences from the time the asset is in the location and condition ready for use as intended by the Foundation.

The depreciation rates and useful lives used for each class of depreciable assets are as follows:

Class of Asset Depreciation Rates Depreciation basis Buildings & Property Improvements 2% Straight Line Plant & Equipment 15% Straight Line Office Equipment 20% Straight Line Furniture & Fittings 10% Straight Line Motor Vehicles 22.5% Diminishing Value

The residual value, the useful life and depreciation method applied to an asset are reassessed at the reporting date.

Page 15




1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (g) Intangible assets

Intangible assets represent identifiable non-monetary assets without physical substance such as computer software and development costs. Intangible assets are initially recognised at cost. Subsequently, intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the Foundation.

Amortisation represents the allocation of the non-monetary asset’s value, less any estimated residual value, over its estimated useful life. Amortisation commences from the time the asset is in the location and condition ready for use as intended by the Foundation.

The amortisation rates and useful lives used for each class of amortised asset are as follows:

Class of Asset Depreciation Rates Depreciation basis Software 20% Straight Line

(h) Financial Instruments Financial instruments arise out of contractual agreements that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. From 1 July 2018, the Foundation applies AASB 9 and classifies all of its financial assets based on the business model for managing the assets and the asset’s contractual terms. The standard introduced new classification and measurement models for financial assets. Financial Assets under AASB 9 Financial assets are measured at amortised costs if both of the following criteria are met and the assets are not designated as fair value through net result:

• the assets are held to collect the contractual cash flows, and • the assets’ contractual terms give rise to cash flows that are solely payments of principal

and interests. These assets are initially recognised at fair value plus any directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method less any impairment. The following assets are recognised in this category:

• cash and cash equivalents; • trade and other receivables; and • term deposits.

Financial assets at fair value through net result represents equity instruments that are held for trading as well as derivative instruments and are classified as fair value through net result. In addition other financial assets are required to be measured at fair value through net result unless they are measured at amortised cost or fair value through other comprehensive income. These financial assets includes the Foundation’s managed investments and any listed investments.

Page 16




1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (h) Financial Instruments (continued) Financial Assets previously under AASB 139 Receivables and cash represent cash and cash equivalents, and trade and other receivables. These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method, less any impairment. For the purposes of the cash flow statement, cash includes cash on hand and in banks. Cash on hand, in banks and short-term deposits with a maturity of less than 3 months, which are stated at nominal values. Held to maturity financial assets represent term deposits with a maturity greater than 3 months. These are initially recognised at fair value plus any directly attributable transaction costs. Term deposits are recognised on the trade date and derecognised on the maturity date of the investment. Available-for-sale financial assets represent listed investments. These are initially recognised at fair value. Subsequent to initial recognition, they are measured at fair value with gains and losses arising from changes in fair value recognised directly in equity until the investment is disposed of. On disposal the cumulative gain or loss previously recognised in equity is transferred to profit or loss for the period.

Financial Liabilities Financial liabilities at amortised cost relate to trade and other payables which are initially recognised on the date they are originated. They are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial instruments are measured at amortised cost. Trade and other payables are recognised for amounts to be paid in the future for goods or services received as at balance date, whether or not invoices have been received. Accounts payable are unsecured, not subject to interest charges and are normally settled within 60 days of invoice receipt. The accounting for financial liabilities under AASB 9 remains the same as it was under AASB 139. (i) Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). 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 are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet. Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities, which are recoverable from, or payable to, the ATO are classified as operating cash flows.

Page 17



FOR THE YEAR ENDED 30 JUNE 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (j) Comparative figures Where necessary, comparative information has been reclassified to achieve consistency with current financial year disclosures. (k) Fair value measurement When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principle market; or in the absence of a principal market, in the most advantageous market. Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Items measured on a fair value basis are reviewed at each reporting date to ensure that the carrying value does not materially differ from the asset’s fair value at that date. Where necessary, the carry value is adjusted to reflect the fair value.

(l) New, revised or amending Accounting Standards and Interpretations adopted

The Foundation has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Foundation for the financial year ended 30 June 2019. The Foundation has assessed the impact of these new or amended Accounting Standards and Interpretations and they are not expected to have a material impact on the entity.

Page 18



FOR THE YEAR ENDED 30 JUNE 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(l) New, revised or amending Accounting Standards and Interpretations adopted (continued)

Standard / Interpretation

Summary Applicable for annual period beginning on

Impact on Entity’s Financial Statement

AASB 15 Revenue from Contracts with Customers

The core principle of AASB15 requires an entity to recognise revenue when the entity satisfies a performance obligation by transferring a promised good or service to a customer.

1 Jan 2019 The Foundation has reviewed the revenue streams and determined that there is no material impact on the financial statements under the current treatment. This will continue to be monitored and assessed.

AASB 1058 Income of Not-for-Profit Entities

AASB 1058 supplements AASB 15 and provide criteria to be applied by not-for-profit entities in establishing the timing of recognising income for government grants and other types of contributions previously contained within AASB 1004 Contributions.

1 Jan 2019 Revenue such as grants and donations which fall under the scope of AASB1004 will remain unchanged under AASB 1058 as the revenue recognition treatment is to recognise revenue upon receipt of the funds and it has been assessed that this standard will have no impact on Foundation’s financial statements.

In addition to those Accounting Standards listed above, the AASB has also released a number of other Accounting Standards and Australian Interpretations. The application of these Accounting Standards and Australian Interpretations are also not expected to have any significant impact on the entity’s financial statements. Consequently, they have not been specifically identified above.

Page 19



FOR THE YEAR ENDED 30 JUNE 2019 NOTE 2. CRITICAL ACOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Estimation of useful lives of assets The Foundation determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down. Employee benefits provision As discussed in note 1, the liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account. Fair value measurement hierarchy The Foundation is required to classify all assets and liabilities, measured at fair value, using a three-level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:

- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

- Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is significant to fair value and therefore which category the asset or liability is placed in can be subjective.

Page 20



FOR THE YEAR ENDED 30 JUNE 2019 2019

$ 2018

$3. CASH AND CASH EQUIVALENTS

Current Cash on hand 927 1,118Cash at bank 577,665 552,339

578,592 553,457 4. TRADE AND OTHER RECEIVABLES

Current GST Receivable 1,831 7,816Other Receivables 21,683 20,100 23,514 27,916

5. INVESTMENTS

Book value disclosure Term deposits (maturity greater than 3 months) 70,228 402,576Managed investments 1,577,657 -Listed investments - 596,266 1,647,885 998,842

6. PROPERTY, PLANT & EQUIPMENT

(i) Book value disclosures Land Land – at directors valuation 30 June 2017(i) 1,995,000 1,995,000 1,995,000 1,995,000 Buildings & Improvements

Buildings – at directors valuation 30 June 2017(i) 1,855,000 1,855,000Building improvements – at cost 470,940 233,921Accumulated depreciation (83,308) (38,700) 2,242,632 2,050,221Total Land & Buildings 4,237,632 4,045,221

(i) Land and buildings were revalued by the Directors to fair value as at 30 June 2017. As at 30 June 2017, the valuations were in accordance with market valuations received from Licensed Estate Agents; Barry Plant and Nelson Alexander. Plant and equipment At cost 227,817 219,775Accumulated depreciation (175,995) (162,689) 51,822 57,086

Page 21



FOR THE YEAR ENDED 30 JUNE 2019 6. PROPERTY, PLANT & EQUIPMENT (continued) 2019

$ 2018

$ Motor Vehicles At cost 196,032 162,859Accumulated depreciation (128,644) (117,788) 67,388 45,071 Office Equipment At cost 92,485 90,930Accumulated depreciation (76,527) (68,887) 15,958 22,043 Furniture & Fittings At cost 41,503 41,503Accumulated depreciation (39,776) (39,432) 1,727 2,071

Total Property, Plant & Equipment 4,374,527 4,171,492 Fair value determination Land and buildings Land and buildings are valued using the market based direct comparison method. Under this valuation method, the assets are compared to recent comparable sales or sales of comparable assets which are considered to have nominal or no added improvement value. Independent valuations were performed by Licenced Estate Agents to determine the fair value using the market based direct comparison method. Valuation of the assets was determined by analysing comparable sales and allowing for share, size, topography, location and other relevant factors specific to the asset being valued. From the sales analysed, an appropriate rate per square metre has been applied to the subject asset. The effective date of the valuations are 30 June 2017. To the extent that land and buildings do not contain significant, unobservable adjustments, these assets are classified as Level 2 under the market based direct comparison approach.

(ii) Reconciliation of carrying amounts

Movement in the carrying amounts are as follows:

Land

Buildings & Improvements

Plant and Equipment

Motor Vehicles

Office Equipment

Furniture &

Fittings Total $ $ $ $ $ $ $Opening balance 1 July 2018 1,995,000 2,050,221 57,086 45,071 22,043 2,071 4,171,492 Additions − 237,019 8,043 33,173 1,555 − 279,790 Depreciation – (44,608) (13,307) (10,856) (7,640) (344) (76,755) Closing balance 30 June 2019 1,995,000 2,242,632 51,822 67,388 15,958 1,727 4,374,527

Page 22




2019 $

2018$

7. INTANGIBLE ASSETS Non-current Software 12,250 12,250 Accumulated amortisation (11,881) (11,711) 369 539

Movement in the carrying amounts are as follows: Software Total $ $ Opening balance 1 July 2018 539 539Amortisation (170) (170)Closing balance 30 June 2019 369 369

8. TRADE AND OTHER PAYABLES

Current Trade creditors and accruals 64,571 41,001Superannuation and PAYG payable 9,047 28,955Other payables 9,405 757 83,023 70,713

9. PROVISIONS Current Annual leave 62,067 26,819 Long service leave 13,023 21,430 Total Current Provisions 75,090 69,387 Non-Current Long Service Leave 4,059 1,148 Total Non-Current Provisions 4,059 1,148

Page 23




10. RESERVES 2019 $

2018$

Asset Revaluation Reserve Balance at the beginning of the financial year 2,765,097 2,765,097Movement in the reserve during the year − −Balance at the end of the financial year 2,765,097 2,765,097 Fair Value Reserve Balance at the beginning of the financial year 77,242 53,911Movement in the reserve during the year − 23,331Change in accounting policy – AASB 9 (77,242) −Balance at the end of the financial year − 77,242 Total Reserves 2,765,097 2,842,339

The reserves represent the cumulative net increase in the fair value of land, buildings, property improvements and investments held by Children First Foundation until the asset is derecognised.

11. CONTINGENT LIABILITIES AND CONTINGENT ASSETS The Foundation had no contingent liabilities or assets as at 30 June 2019 (2018: Nil).

12. COMMITMENTS The Foundation had no commitments for expenditure as at 30 June 2019 (2018: Nil)

13. EVENTS AFTER THE REPORTING PERIOD

No matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may significantly affect the Foundation's operations, the results of those operations, or the Foundation's state of affairs in future financial years.

Page 24




14. RELATED PARTY Related parties of the foundation include all key management personnel (KMP) and their close family members and personal business interests (controlled entities, joint ventures and entities they have significant influence over). KMP of the foundation include the Board of Directors and those employees who have authority and responsibility for planning, directing and controlling the activities of the Foundation.

2019 $

2018$

Key management personnel remuneration Compensation provided to KMPs comprises employee benefits in all forms of consideration paid, payable or provided in exchange for services rendered, and is disclosed in total below:

Aggregate compensation 148,689 153,316

Related party transactions No Director has entered into a material contract with the Foundation during the current or previous financial year. The Board of Directors have not received any compensation for their services as directors.

15. CHANGE IN ACCOUNTING POLICIES

The Foundation has elected to apply the limited exemption in AASB 9 paragraph 7.2.15 relating to transition for classification and measurement and impairment, and accordingly has not restated comparative periods in the year of initial application. As a result:

• any adjustments to carrying amounts of financial assets or liabilities are recognised at beginning of the current reporting period with difference recognised in opening retained earnings; and

• financial assets and provision for impairment have not been reclassified and/or restated in the comparative period.

Changes to classification and measurement On initial application of AASB 9 on 1 July 2018, the Foundation’s management has assessed for all financial assets based on the Foundation's business models for managing the assets. The following are the changes in the classification of the Foundation’s financial assets:

(i) Listed investments previously classified as available-for-sale under AASB 139 are now reclassified as fair value through profit or loss under AASB 9. As a result of the change in classification, the related fair value of $77,242 was transferred from reserves to retained earnings on 1 July 2018.

(ii) Term deposits previously classified as held to maturity under AASB 139 are now reclassified as financial assts at amortised cost under AASB 9. There was no difference between the previous carrying amount and the revised carrying amount at 1 July 2018 to be recognised in opening retained earnings.

Page 25




15. CHANGES IN ACCOUNTING POLICY (continued)

(iii) Trade and other receivables previously classified as receivables and cash under

AASB 139 are now reclassified as financial assets at amortised cost under AASB 9. There was no difference between the previous carrying amount and the revised carrying amount at 1 July 2018 to be recognised in opening retained earnings.

The accounting for financial liabilities remains the same as it was under AASB 139.

The Foundation's accounting policies for financial assets are set out in note 1. The following table summarises the required and elected reclassification upon adoption of AASB 9. The main effects resulting from the reclassification are as follows:

As at 30 June 2018 Notes

AASB 139Measurement

Categories

Amortised

cost Fair value

through Profitor Loss

AASB 139 Measurement Categories $ $ $Available for Sale

Listed investments 15 (i) 596,266 596,266Held to Maturity

Term deposits 15(ii) 402,576 402,576 Receivables and cash

Trade and other receivables 15(iii) 27,916 27,916 As at 1 July 2018 1,026,758 430,492 596,266

16. FOUNDATION DETAILS The registered office and principal place of business of the Foundation is: 15-19 Gracie Street North Melbourne VIC 3051

Documents

Children First Foundation - Microsoft...Children First Foundation is a not-for-profit unlisted public company limited by guarantee, incorporated and domiciled in Australia. The financial