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financial performance

Financial Report 2015

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Statement of Comprehensive Income

For the financial year ended 31 December 2015


Notes

2015 $

2014 $

Revenue from ordinary activities

4

4,086,702

4,957,927

Finance income

5

64,608

130,465

Program expenses

(3,030,431)

(3,702,828)

Enterprise expenses

(113,750)

-

Event expenses

(380,206)

(554,083)

Marketing and sponsorship expenses

(852,782)

(840,063)

Administration expenses

(436,895)

(384,936)

Depreciation expense

(108,969)

(144,693)

Deficit for the year

(771,723)

(538,211)

Total comprehensive loss for the year

(771,723)

(538,211)


The above statement of comprehensive income should be read in conjunction with the accompanying notes.


Statement of Financial Position

At 31 December 2015


Notes

2015 $

2014 $

Current assets

Cash and cash equivalents

16(a)

2,026,719

2,997,101

Trade receivables

8

8,165,241

172,026

Other receivables

9

86,917

211,678

Total current assets

2,278,877

3,380,805

Non-current assets

Plant and equipment

10

483,956

575,527

Total non-current assets

483,956

575,527

TOTAL ASSETS

2,762,833

3,956,332

Current liabilities

Trade and other payables

11

97,420

186,540

Provisions

12

110,805

106,051

Deferred income

13

827,934

686,529

Total current liabilities

1,036,159

979,120

Non-current liabilities

Provisions

12

69,007

97,822

Deferred income

13

400,000

850,000

Total non-current liabilities

469,007

947,822

TOTAL LIABILITIES

1,505,166

1,926,942

NET ASSETS

1,257,667

2,029,390

Accumulated funds

14

653,287

925,010

Reserves

15

604,380

1,104,380

EQUITY

1,257,667

2,029,390


The above statement of comprehensive income should be read in conjunction with the accompanying notes.


Statement of Changes in Equity

For the financial year ended 31 December 2015


Accumulated Funds $

RDF Programs Reserve $

RDF Project and Building Reserve $

The Dreams Future Fund $

Total $

Balance at 31 December 2013

1,229,182

168,366

84,612

1,085,441

2,567,601

Deficit for the year before transfer to reserves

(538,211)

-

-

-

(538,211)

Transfer from/(to) reserves

234,039

(168,366)

(84,612)

18,939

-

Balance at 31 December 2014

925,010

-

-

1,104,380

2,029,390

Deficit for the year before transfer to reserves

(771 ,723)

-

-

-

(771,723)

Transfer from/(to) reserves

500,000

-

-

(500,000)

-

Balance at 31 December 2015

653,287

-

-

604,380

1,257,667


The above statement of comprehensive income should be read in conjunction with the accompanying notes.


Statement of Cash Flows

For the financial year ended 31 December 2015


Notes

2015 $

2014 $

Cash flows from operating activities

Receipts from the course of operations

3,918,637

3,803,833

Interest/other income received

64,608

130,465

Payments to suppliers and employees

(4,936,229)

(5,494,268)

Net cash (used in)/ from operating activities

16(b)

(952,984)

(1,559,970)

Cash flows from investing activities

Payments for plant and equipment

(17,398)

(12,446)

Net cash used in investing activities

(17,398)

(12,446)

Net (Decrease) in cash and cash equivalents

(970,382)

(1,572,416)

Cash and cash equivalents at the beginning of the financial year

2,997,101

4,569,517

Cash and cash equivalents at the end of the financial year

16(a)

2,026,719

2,997,101


The above statement of comprehensive income should be read in conjunction with the accompanying notes.


Notes to the Financial Statements

For the financial year ended 31 December 2015

Note 1 Reporting entity

The Reach Foundation (the “Company”) is a registered not-for-profit with the Australian Charities and Not-for-Profits commission (ACNC) and limited by guarantee incorporated and domiciled in Australia. Its registered office and principal place of business is 152-156 Wellington Street, Collingwood, VIC 3066. The Company is primarily involved in running interactive workshops, weekends away and large scale events for young people.

Note 2 Basis of preparation

(a) Statement of compliance

The Company has adopted AASB 1053 Application of Tiers of Australian Accounting Standards and the Australian Charities and Not-for-Profits Commission Regulation 2013 (ACNC) and AASB 2010-2 Amendments to Australian Standards arising from Reduced Disclosure Requirements to prepare Tier 2 general purpose financial statements.

The financial statements were authorised for issue by the Board of Directors on 28th April 2016.

(b) Basis of measurement

The financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. Unless otherwise indicated, all amounts are presented in Australian dollars.

(c) Use of estimates and judgments

In the application of the Company’s accounting policies, which are described below, the directors are required to make judgments, estimates and assumptions about reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

Note 3 Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements:

(a) Income tax

Reach is exempt from taxation under Subdivision 50-B of the Income Tax Assessment Act 1997.

(b) Revenue recognition

Operating revenue includes program income, sponsorship income, events income, foundations and trust grants, government grants and donations, including donations received for capital projects. Amounts disclosed as revenue are net of taxes paid.

Donations are brought to account on a cash received basis. All other revenue and expense items are accounted for on an accrual basis based on the timing of associated programs.

(c) Finance income and finance costs

Finance income comprises interest income on funds invested and changes in fair value of financial assets through profit and loss. Interest income is recognised as it accrues in profit and loss, using the effective interest method.

Finance expenses comprise bank charges.

(d) Receivables

All trade debtors are recognised at the amounts receivable as they are due for settlement.

(e) Financial assets

Financial assets held for trading purposes are classified as current assets and are stated at fair value, with any resultant gain or loss recognised in the statement of comprehensive income.

(f) Plant and equipment

Plant and equipment is measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the assets. Where an item of plant or equipment is acquired for no or nominal consideration, the fair value of the asset at acquisition date is deemed as its cost.

At each reporting date, the directors review a number of factors affecting plant and equipment, including their carrying values, to determine if these assets, grouped into cash-generating units, may be impaired. If an impairment indicator exists, the recoverable amount of the asset, being the higher of the asset’s ‘fair value less costs to sell’ and ‘value in use’, is compared to the carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed in the statement of comprehensive income as an impairment expense.

As the future economic benefits of Reach’s assets are not primarily dependent on their ability to generate net cash inflows, and if deprived of the asset, Reach would replace the asset’s remaining future economic benefits, ‘value in use’ is determined as the depreciated replacement cost of the asset, rather than by using discounted future cash flows.

Depreciation

The depreciable amounts of all plant and equipment are depreciated on a diminishing value basis over their estimated useful lives. Depreciation commences from the time the asset is available 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 annual depreciation rates (diminishing value method) used for each class of depreciable assets are:

Leasehold improvements 13% - 26%

Plant and equipment 24% - 53%

Motor vehicles 30%

The assets’ residual values and useful lives are reviewed at each reporting date and adjusted if appropriate.

The gain or loss on disposal of all plant and equipment is determined as the difference between the carrying amount of the asset at the time of disposal and the proceeds of disposal, and is recognised in the statement of comprehensive income in the year of disposal.

(g) Employee entitlements

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably.

Provisions made in respect of employee benefits expected to be settled wholly within 12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Provisions made in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the Company in respect of services provided by employees up to reporting date.

Contributions are made by Reach to an employee superannuation fund and are recognised as expenses when incurred.

(h) Cash and cash equivalents

Cash includes deposits at call with financial institutions and other highly liquid investments with short periods to maturity which is readily convertible to cash on hand and are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts.

(i) Long-term grants

Long-term grants are recognised initially as deferred income at fair value when there is reasonable assurance that they will be received and that the Company will comply with the conditions associated with the grant (typically upon receipt of the grant) and are then recognised in profit or loss on a systematic basis as the services are delivered.

Grants that compensate the Company for expenses incurred are recognised in profit or loss as revenue on a systematic basis in the same periods in which the expenses are recognised.

0) New accounting standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning on or after 1 January 2015 and have not been applied in preparing these financial statements.

None of these are expected to have a significant effect on the financial statements of the Company.

Note 4 Revenue from ordinary activities


2015 $

2014 $

Fundraising and fee revenue

General donations - individual giving

174,402

119,440

Corporate sponsorship & donations

1,717,560

2,009,295

Trusts and donations

399,999

314,664

Enterprises income

160,613

-

Government grants (i)

515,921

1,205,795

Program fees

439,050

356,540

Events

679,157

947,193

4,086,702

4,952,927

Other Operating Revenue

Revenue from the Dreams Foundation

-

5,000

Total Revenue from ordinary activities

4,086,702

4,957,927


(i) To support government objectives by delivering outcomes to young people. Conditions for each government contract have been fulfilled.

Note 5 Finance Income


2015 $

2014 $

Interest

64,608

130,465


Note 6 Employee Expense


2015 $

2014 $

Employee Expense

3,356,128

3,853,746


Note 7 Remuneration of auditors


2015 $

2014 $

Remuneration of the auditors for:

Audit of the financial report (i)

8,000

8,000


(i) The audit was undertaken by KPMG at a reduced fee as part of KPMG’s honorary work policy.

Note 8 Trade receivables


2015 $

2014 $

Trade receivables (i)

165,241

177,486

Provision for Doubtful Debts

-

(5,460)

Net Trade Receivables

165,241

172,026


(i) Predominantly represents the lag between commitments of financial support (sponsorships etc.) and payment.

Note 9 Other receivables


2015 $

2014 $

Prepayments

37,475

20,900

Vouchers

516

1,066

Bonds and security deposits

9,079

16,120

Accrued Income

39,847

173,592

Total other receivables

86,917

211,678


Note 10 Plant and equipment


2015 $

2014 $

Leasehold improvements

Leasehold improvements

403,275

397,400

Leasehold improvements - (including OF renovation)

1,216,026

1,216,026

Accumulated depreciation

(1,215,573)

(1,142,646)

Net:

403,728

470,780

Plant and equipment

Plant and equipment - at cost

617,223

605,700

Accumulated depreciation

(542,434)

(508,723)

Net:

74,789

96,977

Motor vehicles

Motor vehicles - at cost

27,873

27,873

Accumulated depreciation

(22,434)

(20,103)

Net:

5,439

7,770

Total plant and equipment:

483,956

575,527



(a) Movement in carrying amounts Movement in the carrying amounts for each class of plant and equipment between the beginning and the end of the financial period:

1 January 2014 - 31 December 2014

Leasehold improvements $

Plant & equipment $

Motor vehicles $

Total $

Balance at the beginning of the year

552,191

144,479

11,104

707,774

Additions

5,085

7,361

-

12,446

Depreciation expense

(86,496)

(54,863)

(3,334)

(144,693)

Balance at the end of the year

470,780

96,977

7,770

575,527


1 January 2015 - 31 December 2015

Leasehold improvements $

Plant & equipment $

Motor vehicles $

Total $

Balance at the beginning of the year

470,780

96,977

7,770

575,527

Additions

5,875

11,523

0

17,398

Depreciation expense

(72,927)

(33,711)

(2,331)

(108,969)

Balance at the end of the year

403,728

74,789

5,439

483,956


Note 11 Trade and other payables


2015 $

2014 $

Trade payables

53,704

113,570

Accrued expenses

8,000

34,600

PAYG tax payable

35,716

38,370

Total trade and other payables

97,420

186,540


Note 12 Provisions


2015 $

2014 $

Current Provisions

Employee entitlements

110,805

106,051

Non-Current Provisions

Employee entitlements

69,007

97,822


Note 13 Deferred income


2015 $

2014 $

Current

Government grants

45,994

32,959

Corporates, trusts and foundations

781,940

652,242

Other

-

1,328

Total current

827,934

686,529

Non-current

Corporates, trusts and foundations

400,000

850,000

Total non-current

400,000

850,000

Total deferred income

1,227,934

1,536,529


Note 14 Accumulated funds


2015 $

2014 $

Accumulated funds at the beginning of the financial year

925,010

1,229,182

Deficit for the year

(771,723)

(538,211)

Transfers from reserves

500,000

234,039

Accumulated funds at the end of the financial year

653,287

925,010


Note 15 Reserves


2015 $

2014 $

The Dreams Future Fund (Endowment Fund)

1,104,380

1,104,380

Transfers to accumulated funds (i)

(500,000)

-

Total Reserves

604,380

1,104,380


(i) This $500,000 reverses the initial transfer from accumulated funds to the Dreams Future Fund.

Note 16 Cash and cash equivalents

(a) Reconciliation of cash and cash equivalents For the purposes of the statement of cash flows, cash and cash equivalents includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the year as shown in the statement of cash flows can be reconciled to the related items in the statement of financial position as follows:


2015 $

2014 $

Cheque account

122,022

30,769

Cash management account/ term deposits

1,903,697

2,965,332

Petty cash

1,000

1,000

Total cash and cash equivalents

2,026,719

2,997,101


A portion of cash balances as at 31 December 2015 is earmarked for prepaid sponsorship/grants for programs - $1,227,934


(b) Reconciliation of surplus to n et cash flows from operating activities


2015 $

2014 $

Deficit for the year

(771,723)

(538,211)

Depreciation expense

108,969

144,693

Changes in net assets and liabilities

Decrease in trade receivables

6,785

89,569

Decrease/(lncrease) in other receivables

124,760

(81,125)

(Decrease)/lncrease in trade and other payables

(89,119)

25,487

(Decrease) in prepaid income

(308,596)

(1,152,696)

(Decrease) in provisions

(24,060)

(47,687)

Net cash (used in) from operating activities

(952,984)

(1,559,970)


Note 17 Operating lease commitments

Future operating lease rentals of premises (Reach NSW office - Sydney) are payable as follows:


2015 $

2014 $

Less than one year

(121,275)

(115,500)

Between one and five years

-

(120,408)

Total

(121,175)

(235,908)

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