Statement of profit or loss and other comprehensive income
for the financial year ended 30 June 2017
2017 |
2016 |
||
Notes |
$'000 |
$'000 |
|
REVENUE |
|||
Government funding |
|||
Operating - Commonwealth funded |
614,837 |
619,535 |
|
Operating - State funded |
44,238 |
49,445 |
|
Capital - Commonwealth and state funded |
52,376 |
55,006 |
|
Total government funding |
711,451 |
723,986 |
|
Sale of goods |
27,912 |
26,031 |
|
Rendering of services |
16,177 |
15,413 |
|
Donations, bequests and sponsorships |
4 |
87,331 |
89,495 |
Investment revenue |
5 |
11,285 |
11,125 |
Non-government grant |
5,230 |
4,299 |
|
Other revenue |
12,168 |
23,683 |
|
Total revenue |
871,554 |
894,032 |
|
EXPENDITURE |
|||
Employee expenditure |
7 |
(453,459) |
(447,666) |
Operating expenditure |
7 |
(245,450) |
(241,798) |
Cost of services, sale of goods and consumables |
7 |
(108,162) |
(109,040) |
Depreciation and amortisation |
(53,416) |
(55,771) |
|
Interest and debt servicing costs |
(5,341) |
(6,552) |
|
Net loss on assets |
6 |
(5,323) |
(12,585) |
Total expenditure |
(871,151) |
(873,412) |
|
NET SURPLUS FOR THE YEAR |
403 |
20,620 |
|
OTHER COMPREHENSIVE INCOME |
|||
Items that will not be reclassified subsequently to profit or loss |
|||
Actuarial gain/(loss) on retirement benefit obligations |
17 |
2,701 |
(1,281) |
Items that may be reclassified subsequently to profit or loss |
|||
Net gain/(loss) arising on investment revaluation |
18 |
4,904 |
(2,246) |
Other comprehensive income/(deficit) for the year |
7,605 |
(3,527) |
|
TOTAL COMPREHENSIVE SURPLUS FOR THE YEAR |
8,008 |
17,093 |
|
The accompanying notes on pages 66 to 101 form part of these financial statements. For divisional reporting refer to Note 3. |
Statement of financial position
as at 30 June 2017
2017 |
2016 |
||
Notes |
$'000 |
$'000 |
|
ASSETS |
|||
Current assets |
|||
Cash and cash equivalents |
21(a) |
199,584 |
230,693 |
Trade and other receivables |
8 |
21,527 |
23,781 |
Inventories |
9 |
19,659 |
24,271 |
Other financial assets |
10 |
135,931 |
110,341 |
Prepayments |
11,441 |
7,571 |
|
Assets classified as held for sale |
11(b) |
3,029 |
- |
Total current assets |
391,171 |
396,657 |
|
Non-current assets |
|||
Property, plant and equipment |
11(a), 11(b) |
365,950 |
375,810 |
Intangible assets |
12 |
44,298 |
47,758 |
Total non-current assets |
410,248 |
423,568 |
|
TOTAL ASSETS |
801,419 |
820,225 |
|
LIABILITIES |
|||
Current liabilities |
|||
Trade and other payables |
13 |
52,393 |
47,449 |
Borrowings |
14 |
14,648 |
10,786 |
Provisions |
15 |
81,157 |
72,316 |
Other liabilities |
16 |
98,414 |
124,171 |
Total current liabilities |
246,612 |
254,722 |
|
Non-current liabilities |
|||
Borrowings |
14 |
35,094 |
49,741 |
Provisions |
15 |
16,105 |
17,813 |
Defined benefit superannuation plans |
17 |
748 |
3,346 |
Other liabilities |
16 |
4,534 |
4,285 |
Total non-current liabilities |
56,481 |
75,185 |
|
TOTAL LIABILITIES |
303,093 |
329,907 |
|
NET ASSETS |
498,326 |
490,318 |
|
EQUITY |
|||
Reserves |
18 |
135,852 |
120,836 |
Specific purpose funds |
19 |
36,530 |
40,056 |
Accumulated funds |
20 |
325,944 |
329,426 |
TOTAL EQUITY |
498,326 |
490,318 |
|
The accompanying notes on pages 66 to 101 form part of these financial statements. For divisional reporting refer to Note 3. |
Statement of changes in equity
for the financial year ended 30 June 2017
Accumulated funds |
Specific |
Investment revaluation reserve |
Special reserve |
Capital reserve |
Total |
||
YEAR ENDED 30 JUNE 2016 |
Notes |
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
$'000 |
Balance as at 1 July 2015 |
310,065 |
51,958 |
1,983 |
58,696 |
50,523 |
473,225 |
|
Net surplus for the year |
20 |
20,620 |
- |
- |
- |
- |
20,620 |
Other comprehensive (deficit) for the year |
18, 20 |
(1,281) |
- |
(2,246) |
- |
- |
(3,527) |
Transfers to / (from) specific purpose funds |
19 |
11,902 |
(11,902) |
- |
- |
- |
- |
Transfers to / (from) other reserves |
18 |
(11,880) |
- |
- |
6,816 |
5,064 |
- |
Balance as at 30 June 2016 |
329,426 |
40,056 |
(263) |
65,512 |
55,587 |
490,318 |
|
YEAR ENDED 30 JUNE 2017 |
|||||||
Net surplus for the year |
20 |
403 |
- |
- |
- |
- |
403 |
Other comprehensive surplus for the year |
18, 20 |
2,701 |
- |
4,904 |
- |
- |
7,605 |
Transfers to / (from) specific purpose funds |
19 |
3,526 |
(3,526) |
- |
- |
- |
- |
Transfers to / (from) other reserves |
18 |
(10,112) |
- |
- |
7,438 |
2,674 |
- |
Balance as at 30 June 2017 |
325,944 |
36,530 |
4,641 |
72,950 |
58,261 |
498,326 |
|
The accompanying notes on pages 66 to 101 form part of these financial statements. For divisional reporting refer to Note 3. |
Statement of cash flows
for the financial year ended 30 June 2017
2017 |
2016 |
||
Notes |
$'000 |
$'000 |
|
Cash flows from operating activities |
|||
Receipts from donors, government and other sources |
924,317 |
948,046 |
|
Payments to suppliers and employees |
(881,054) |
(840,752) |
|
Interest and other costs of finance paid |
(5,341) |
(6,552) |
|
Net cash provided by operating activities |
21(b) |
37,922 |
100,742 |
Cash flows from investing activities |
|||
Payments for property, plant and equipment and intangibles |
(48,582) |
(62,021) |
|
Proceeds from disposal of property, plant and equipment |
844 |
450 |
|
Net payments for purchase of investment securities |
(20,946) |
(39,453) |
|
Dividends received |
2,069 |
1,780 |
|
Interest received |
8,405 |
8,629 |
|
Net cash used in investing activities |
(58,210) |
(90,615) |
|
Cash flows from financing activities |
|||
Proceeds from borrowings |
- |
1,500 |
|
Repayment of borrowings |
(10,786) |
(18,292) |
|
Net cash used in financing activities |
(10,786) |
(16,792) |
|
NET DECREASE IN CASH AND CASH EQUIVALENTS |
(31,074) |
(6,665) |
|
Cash and cash equivalents at the beginning of the financial year |
230,693 |
237,354 |
|
Effects of exchange rate changes on the balance of cash held in foreign currencies |
(35) |
4 |
|
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR |
21(a) |
199,584 |
230,693 |
The accompanying notes on pages 66 to 101 form part of these financial statements. For divisional reporting refer to Note 3. |
Notes to the financial statements
for the financial year ended 30 June 2017
NOTE 1. PRINCIPAL ACTIVITIES AND REGISTERED OFFICE IN AUSTRALIA
Australian Red Cross Society (‘Society’) undertakes a wide range of humanitarian activities to reduce vulnerability and improve lives in Australia and overseas.
Australian Red Cross Society is an organisation incorporated by Royal Charter and is a member of the International Federation of Red Cross and Red Crescent Societies. Australian Red Cross Society operates as two key operating divisions: Humanitarian Services, which provides relief in times of crisis and care for people experiencing vulnerability in Australia and around the world; and the Australian Red Cross Blood Service (Blood Service), providing quality blood products, tissues and related services for the benefit of the community.
Australian Red Cross Society is domiciled in Australia and its registered office and principal place of business is:
Australian Red Cross Society
155 Pelham Street
CARLTON VIC 3053
Tel: (03) 9345 1800
ABN 501 69 561 394
The Humanitarian Services’ head office is at 155 Pelham Street, Carlton, Victoria and it operates from more than 395 sites, including retail stores and and offices in capital cities of all states and territories in Australia. The delivery of humanitarian services is funded principally through government grants, public donations (in particular regular monthly giving and bequests from generous Australians) and approved corporate/private donors. A network of 17,486 members support fundraising and advocacy efforts, while almost 20,000 volunteers assist us to deliver services to those most in need.
Melbourne, Victoria and it operates in all states and territories in Australia. The Blood Service operates four major blood processing centres, two major inventory and distribution hubs, plus approximately 100 fixed and mobile blood donor centres in metropolitan and regional areas across Australia. The Blood Service is funded for this activity by the Commonwealth, State and Territory Governments under a Deed of Agreement (Deed) which is administered by the National Blood Authority (NBA). In the event that the Blood Service ceases to perform services under the Deed, the Deed-funded net assets of the Blood Service would be transferred to the NBA for no consideration. The financial statements of the Australian
Red Cross Society, inclusive of the Australian Red Cross Blood Service, have been prepared on the basis of the continuation of operations under the Deed. As the Blood Service carries on its work as a seperate operating division of the Society, any cessation of services under the Deed is not anticipated to adversely impact the operations of the remainder of the Society.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards and Interpretations, and complies with other requirements of the law and the Australian Charities and Not-for-profit Commission Act 2012.
Accounting Standards include Australian equivalents to International Financial Reporting Standards (A-IFRS). Compliance with A-IFRS ensures that the financial statements and notes of the Society comply with International Financial Reporting Standards (IFRS), except for the requirements applicable to not-for-profit organisations. The financial report of Australian Red Cross Society for the year ended 30 June 2017 was authorised for issue in accordance with a resolution of the Board on 28th October 2017.
For the purpose of the financial report the entity is considered to be a not-for-profit entity.
ACFID Compliance
Australian Red Cross is a signatory to the Australian Council for International Aid and Development (ACFID) Code of Conduct and is committed to full adherence to its requirements. The Code aims to improve international development outcomes and increase stakeholder trust by enhancing the transparency and accountability of signatory organisations. The financial statements have been prepared in accordance with the requirements set out in the ACFID Code of Conduct and should be read in conjunction with the Financial Statements and accompanying notes. For further information on the code, please refer to www.acfid.asn.au
2.1 Application of new and revised Accounting Standards
Amendments to Australian Accounting Standards Board and interpretations that are mandatorily effective for the current year
In the current year, the Society has applied the following amendments to the AASB issued by the Australian Accounting Standards Board (AASB) that are mandatorily effective for an accounting period that begins on or after 1 July 2016, and therefore relevant for the current year end.
AASB 2014-4 ‘Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation’
AASB 2015-1 ‘Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012-2014 Cycle’
AASB 2015-2 ‘Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101’ The application of the above amendments has not had a material impact on the disclosures or amounts recognised in the financial statements.
2.2 Standards and interpretations issued not yet effective
At the date of authorisation of the financial statements, a number of standards and interpretations were in issue but not yet effective. These are listed below.
Standard/interpretation |
Effective for annual |
Expected to be initially applied in the financial year ending |
AASB 9 ‘Financial Instruments’ and the relevant amending standards |
1 Jan 18 |
30 Jun 19 |
AASB 15 ‘Revenue from Contracts with Customers’, AASB 2014-5 ‘Amendments to Australian Accounting Standards arising from AASB 15’, AASB 2015-8 ‘Amendments to Australian Accounting Standards – Effective date of AASB 15’, and AASB 2016-3 'Amendments to Australian Accounting Standards – Clarifications to AASB 15', AASB 2016-7 'Amendments to Australian Accounting Standards – Deferral of AASB 15 for Not-for-Profit Entities' and AASB 2016-8 'Amendments to Australian Accounting Standards – Australian Implementation Guidance for Not-for-Profit Entities' |
1 Jan 19 |
30 Jun 19 |
AASB 2016-7 'Amendments to Australian Accounting Standards – Deferral of AASB 15 for Not-for-Profit Entities' and AASB 2016-8 'Amendments to Australian Accounting Standards – Australian Implementation Guidance for Not-for-Profit Entities' |
1 Jan 19 |
30 Jun 19 |
AASB 16 ‘Leases’ |
1 Jan 19 |
30 Jun 20 |
AASB 1058 'Income of Not-for-Profit Entities', AASB 2016-7 'Amendments to Australian Accounting Standards – Deferral of AASB 15 for Not-for-Profit Entities' and AASB 2016-8 'Amendments to Australian Accounting Standards – Australian Implementation Guidance for Not-for-Profit Entities' |
1 Jan 19 |
30 Jun 19 |
AASB 2016-2 ‘Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107’ |
1 Jan 17 |
30 Jun 18 |
AASB 2017-2 Amendments to Australian Accounting Standards – Further Annual Improvements 2014-2016 Cycle |
1 Jan 17 |
30 Jun 18 |
The Directors have considered the above pending standards and anticipate that the adoption of the new revenue and leasing standards may have a material impact on measurements and disclosure within the financial statements. Other pending standards are being considered, and while some further impacts are expected, they are unlikely to be material.
AASB 15 Revenue from Contracts with Customers and AASB 1058 Income of Not-for-Profit (NFP) Entities
The AASB has issued new income recognition requirements for NFP entities via: AASB 1058 Income of NFP entities, AASB 2016-8 NFP specific guidance in AASB 15 and AASB 2016-7 deferral of AASB 15. The new standards will be effective for the Society beginning 1 July 2019 and the Society currently anticipate early adoption of the standards effective 1 July 2018.
AASB 1058 shifts the focus from the current reciprocal/non-reciprocal basis to basis of assessment that considers the enforceability of a contract and the specificity of performance obligations.
The core principle of the new income recognition requirements under AASB 1058 is that where there is an ‘enforceable’ contract with a customer with ‘sufficiently specific’ performance obligations, income would be recognised when (or as) the performance obligations are satisfied under AASB 15. Should the transaction fall outside of the scope of AASB 15, then income would be recognised immediately under AASB 1058. It is anticipated the main revenue stream impacted will be grant income.
Further, upon AASB 16 Leases becoming effective there will also be a change in how peppercorn leases will be recognised and recorded whereby the benefit (i.e. fair value of the right to use the asset) of the full lease term is to be recognised.
NFP entities have a choice of applying the new standards retrospectively or to use a modified transition approach (with no restatement of comparatives). The Society anticipate adopting the modified transitional approach where transactional adjustments are to be recognised in retained earnings at the date of implementation of the standard without adjustment comparatives.
2.3 Basis of preparation
The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected financial assets and liabilities, including derivatives, for which the fair value basis of accounting has been applied. Historical cost is based on the fair values of the consideration given in exchange for assets.
Fair value is 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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Society takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for leasing transactions that are within the scope of AASB 117.
In addition, for financial reporting purposes fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable; and the significance of the inputs to the fair value measurement in its entirety. These are described as follows:
- Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at measurement date;
- Level 2: Inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices); and
- Level 3: Inputs are unobservable inputs for the asset or liability.
The Society’s financial statements are prepared by combining the financial statements of Humanitarian Services and Blood Service. Consistent accounting policies are employed in the preparation of and presentation of the financial statements across the divisions. The financial statements include the information and results of both divisions.
There is a change in the presentation of the financial statements as compared to the previous year. The introduction of note 3 ‘Divisional Reporting’, presents the Society’s results and financial position split by Humanitarian Services and Blood Service (divisions). All other notes are shown at an aggregated level except for note 29 ‘Key Management Personnel’. Following a review of the financial statements, change in presentation was implemented to provide more relevant and simpler presentation to the users of the financial statements.
In preparing the financial statements, all balances and transactions between Humanitarian Services and the Blood Service, as well as unrealised profits arising within the entity, are eliminated in full.
The following significant accounting policies have been adopted in the preparation and presentation of the financial report:
(a) Foreign currency
The functional and presentation currency of Australian Red Cross Society is Australian dollars ($AUD).
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at reporting date. All foreign currency differences in the financial report are taken to profit or loss,
Derivative financial instruments
Derivatives are initially recorded at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event, the timing and recognition in other comprehensive income depends on the nature of the hedge relationship.
(b) Income tax
The Society, being a humanitarian organisation, is exempt from income tax under subsection 50-5 of the Income Tax Assessment Act 1997. The entity is also registered as a deductible gift recipient for tax.
(c) 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 taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified within operating cash flows.
(d) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Society and the revenue can be reliably measured.
Training services
Revenue is recognised when the training services have been provided to participants and the fee is receivable.
Grants
Government grants are received by the entity in return for past or future compliance with certain conditions relating to the operating activities of the entity. Government grants also include income where there are no conditions specifically relating to the operating activities of the entity other than the requirement to operate in certain regions or industry sectors.
Grant income is recognised in accordance with AASB 1004 ‘Contributions’ when: the entity obtains control or the right to receive the contribution; the amount of the contribution can be measured reliably; and it is probable that the future economic benefits comprising the contribution will flow to the entity.
The expenditure to which the grant relates is expensed as incurred and may not correlate to the timing of grant receipts.
Output-based funding
The Blood Service recognises income for the delivery of products to approved health providers on an accrual basis, representing the right to receive contributions from the NBA. Under the Output Based Funding Principles, the Blood Service can apply to retain up to $5.000 million of any surplus for the purpose outlined in the Principles. If the annual surplus is more than $5.000 million in any year then the surplus funding over that amount will be returned to the NBA unless otherwise agreed between the Blood Service and the NBA. Any excess funds to be returned are recorded as a liability within revenue in advance.
Capital funding
The arrangement with the Blood Service and the NBA provides for capital funding comprising 10% of the funding for the Main Operating Programme for the financial year. Capital funding from government grants are recognised as revenue when the Blood Service obtains control of the contribution, or the right to receive the contribution, and it is probable that the economic benefits of the contribution will flow to the Blood Service. Capital funding received in one year may be carried forward and expended in future years.
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and it can be measured reliably. Risks and rewards are considered passed to the buyer at the time of delivery of the goods to the customer.
Interest
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset. Interest accruing on funds held for a special purpose within international projects is transferred to the Special Purpose Fund within equity after first being recorded in profit or loss.
Dividends
Dividend revenue is recognised when the shareholder’s right to receive payment has been established, provided it is probable that the economic benefits will flow to the Society and the amount of income can be measured reliably.
Rental income
Rental income received from properties owned by the Society is accounted for on a straight-line basis over the lease term. Contingent rental income is recognised as income in the periods in which it is earned.
Donations, bequests and sponsorships
The Society receives part of its income from donations, either as cash or in-kind. Amounts donated can be recognised as revenue only when the Society gains control, economic benefits are probable and the amounts can be measured reliably.
The Society establishes controls to ensure that donations are recorded in the financial records, however at times it is impractical to maintain effective controls over the collection of such revenue prior to its initial entry into the financial records. Therefore, donations are recognised as revenue when they are recorded in the books and records of the Society. Donations received for specific purposes are transferred to a separate fund within equity after being first recorded in profit or loss.
Bequests are recognised at the fair value of the benefit received when receipt of the amount is certain. Where required, bequests are recognised in accordance with the express terms of the Will.
Sponsorship agreements entitle the sponsor to something of value in return for their support. Revenue is recognised when the Society gains control, economic benefits are probable and the amounts can be reliably measured.
(e) Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents include cash on-hand; deposits held at call with financial institutions; and 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. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.
(f) Non-derivative financial instruments
Financial instruments are initially measured when the related contractual rights or obligations exist, with cost including acquisition and related transaction costs on the trade date. Subsequent to initial recognition these instruments are measured as set out below:
Financial assets
Financial assets are recognised and derecognised on trade date where purchase or sale of a financial asset is under contract, the terms of which require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured at fair value.
Subsequent to initial recognition, financial assets are classified into the following categories depending on the nature and the purpose of the financial asset as determined at the time of initial recognition.
(i) Held-to-maturity investments These investments have fixed maturities, and it is the Society’s intention to hold these investments to maturity. This category includes government bonds and fixed-interest securities. Any held-to-maturity investments held by the Society are stated at amortised cost using the effective interest method less impairment, with revenue recognised on an effective-yield basis.
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or where appropriate, a shorter period.
(ii) Available for sale financial assets Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from the changes in fair value are recognised in other comprehensive income and accumulated in the investment revaluation reserve, except for impairment losses which are recognised in profit or loss.
Loans and other receivables
Loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest income is recognised by applying the effective interest rate.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arms-length transactions and reference to similar instruments.
Impairment
At each reporting date, the Society assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial assets, a prolonged or significant decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in profit or loss. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
The carrying amount of financial assets including uncollectible trade receivables is reduced by the impairment loss through the use of an allowance account. Subsequent recoveries of amounts previously written-off are credited against the allowance account. Changes in the allowance account are recognised in profit or loss.
When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to the profit or loss in the period.
With the exception of available-for-sale equity instruments, if in a subsequent period the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
In respect of available-for-sale equity instruments, any subsequent increase in fair value after an impairment loss is recognised directly in other comprehensive income and accumulated under the heading of investments revaluation reserve.
Derecognition of financial assets
Financial assets are recognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Society neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Society recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Society retains substantially all the risks and rewards of ownership of a transferred financial asset, the Society continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount, the sum of the consideration received and receivable, and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity, is recognised in profit or loss.
On derecognition of a financial asset other than in its entirety (e.g. when the Society retains an option to repurchase part of a transferred asset or retains a residual interest that does not result in the retention of substantially all the risks and rewards of ownership and the Society retains control), the Society allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer.
The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in the profit or loss.
A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts.
Financial liabilities Non-derivative financial liabilities, including loans and borrowings, are recognised at amortised cost, comprising original debt less principal payments and amortisation.
(g) Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Where inventories are held for distribution or are to be consumed by the Society in providing services or aid at no or nominal charge, they are valued at the lower of cost and replacement cost.
Retail inventory
Retail inventory is valued at cost. No value is assigned to donated goods based on the lower of cost and net realisable value principle.
Blood inventory
Inventories held for distribution display the following three essential characteristics:
(i) There must be future economic benefits;
(ii) The entity must have control over the future economic benefits; and
(iii) The transaction giving rise to the entity’s control over future economic benefit must have occurred.
The Blood Service provides products and services in accordance with the Deed with the NBA. In the discharge of this agreement, the Blood Service is responsible for a range of activities, including collection, testing, processing, inventory management and distribution of blood and blood products. In this context, the Blood Service recognises certain categories of blood and blood products as current assets, to be measured at the lower of cost and current replacement cost. Cost comprises direct materials, direct labour and overheads of the division incurred in the collection, processing and testing of blood.
The Blood Service distributes in Australia the supply of fractionated plasma products manufactured in Australia and imported finished product. Plasma-derived products are manufactured in Australia by the fractionator, CSL Limited (‘CSL’). In relation to blood products held for distribution, the Blood Service does not recognise plasma supplied to CSL for fractionation, fractionated product held at CSL and fractionated product at the Blood Service held for distribution. This is due to the retention of control and risk over these specific products by parties other than the Blood Service and the absence of future economic benefit under output-based funding arrangements.
Inventory at year end includes:
(i) all fresh blood products and plasma for fractionation (not yet supplied to CSL) held at the Blood Service or at a Blood Service storage facility; and
(ii) all work in progress held at the Blood Service.
Consumable inventory has been valued at weighted average cost. Fresh product volumes are physically counted and valued as individual units. The value of work in progress is calculated using the average daily quantity supplied during the June period. All blood products are valued at direct costs plus operating overheads.
(h) Trade receivables
Trade receivables, which generally have 30-day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts.
An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written-off as incurred. The carrying value less impairment of trade receivables are assumed to approximate fair value due to their short-term nature.
(i) Non-current assets held for sale
Non-current assets classified as assets held for sale are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition. The sale of the asset is expected to be completed within one year from the date of classification.
(j) Property, plant and equipment
Property, plant and equipment are recorded at historical cost, less any subsequent accumulated depreciation and any impairment in value. Cost includes expenditure that is directly attributable to the item. Grant funded assets are depreciated in accordance with the terms of funding agreement.
The initial cost of the asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This relates to leasehold improvements and the restoration obligations to restore the property to its original condition. These costs are included in leasehold improvements with a corresponding provision for site restoration.
Depreciation is provided on property, plant and equipment including leasehold buildings but excluding freehold land. Depreciation is calculated on a straight-line basis so as to write-off the net cost of each asset (including leasehold buildings but excluding freehold land) over the shorter of its expected useful life or period of the lease, to its estimated residual value. The estimated useful life, residual values and depreciation method are reviewed at the end of each annual reporting period.
The following estimated useful lives are used in the calculation of depreciation:
Humanitarian Services |
Blood Service | |||
Years |
% |
Years |
% | |
Freehold buildings and renovations |
5 - 40 |
2.5 - 20 |
40 |
2.5 |
Leasehold improvements | Shorter of lease period or useful life | Shorter of lease period or useful life | ||
Shop fit-outs | Shorter of lease period or useful life |
- |
- | |
Plant and equipment: |
||||
- Motor vehicles |
5 |
20 |
4 - 10 |
10 - 25 |
- Computer equipment |
3 |
33.33 |
4 |
25 |
- Plant, furniture, fittings and equipment |
5 |
20 | 5 - 20 | 5 - 20 |
The gain or loss on disposal of fixed assets is determined as the difference between the carrying amount of the asset at the time of disposal and the proceeds of the disposal, and is included in profit or loss in the year of disposal.
The useful life and residual value of property, plant and equipment are reviewed annually. Judgement is applied in determining the useful lives of property, plant and equipment. Any reassessment of useful life and residual value in a particular year will affect depreciation expense (either increasing or decreasing) from the date of reassessment through to the end of the reassessed useful life for both the current and future years.
(k) Intangibles
Intangible assets with finite lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives and is recognised in profit or loss. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Subsequent expenditure is capitalised only when it increases the future economic benefits for the specific assets.
The following estimated useful lives are used in the calculation of amortisation:
Humanitarian Services |
Blood Service |
|||
Years |
% |
Years |
% |
|
Intangibles |
5 - 40 |
2.5 - 20 |
40 |
2.5 |
(l) Borrowings
All borrowing costs directly attributable to the acquisition, construction or production of qualifying assets (which are assets that necessarily take a substantial period of time to get ready for their intended use or sale) are initially recognised at cost against the borrowing.
All borrowings are initially recorded at cost, being the fair value of the consideration received net of issue costs associated with the borrowing. After initial recognition, borrowings are subsequently measured at amortised cost using effective interest rate method. Amortised cost is calculated by taking into account any issue cost and discount premium on settlement.
Gains and losses are recognised in the profit or loss when the liabilities are derecognised, as well as through the amortisation process.
(m) Payables
These amounts represent liabilities for goods and services provided to the Society prior to the end of the financial year which are unpaid. The amounts are unsecured and are generally due for settlement within 30 days of recognition.
The carrying value of trade payables is assumed to approximate their fair value due to their short-term nature.
(n) Impairment
At each reporting date, the Society reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from the other assets, the Society estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. The future economic benefits of the Society’s assets are not primarily dependent on their ability to generate net cash inflows. The value in use is determined as the depreciated replacement cost of the asset, rather than by using discounted future cash flows. Depreciated replacement cost is defined as the current replacement cost of an asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset. The current replacement cost of an asset is its cost measured by reference to the lowest cost at which the gross future economic benefits of that asset could currently be obtained in the normal course of business.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit and loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amounts of the asset (cash-generating unit) in prior years. A reversal is recognised immediately as profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
(o) Finance costs
Finance costs are recognised as an expense when incurred.
(p) Leases
Finance leases
Finance leases transfer to the Society substantially all the risks and benefits incidental to ownership of the leased item and are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other short-term and long-term payables. Each lease payment is allocated between the liability and the finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.
Operating leases
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as the lease income.
Operating lease payments are recognised as an expense in the profit or loss on a straight-line basis over the lease term.
Lease incentives
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefits of incentives are recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
(q) Employee benefits
A liability is recognised 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.
Liabilities recognised in respect of short-term employee benefits are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. The liability for annual leave and long-service leave is recognised under provision for employee benefits. All other short-term benefit obligations are presented as payables.
Liabilities recognised in respect of long-term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Society in respect of services provided by employees up to the reporting date. Expected future payments are discounted using corporate bond yields. Consideration is given to future wage and salary levels, experience of employee departures and periods of service.
Superannuation
The Society contributes to various staff retirement funds, both defined benefit and accumulation schemes, to provide members with benefits on death or retirement. The defined benefit funds operated by the Society are the Local Government Superannuation Scheme (“LGSS”) in New South Wales, Australian Red Cross Staff Superannuation Plan and the Australian Red Cross Queensland Staff Retirement Fund.
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.
Defined benefit costs are categorised as follows:
(i) Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
(ii) Net interest expense or income; and
(iii) Remeasurement.
Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Society recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees, according to a detailed formal plan without the possibility of withdrawal, or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after statement of financial position date are discounted to present value and classified as non-current.
(r) Provisions
Provisions are recognised when the Society has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the reporting date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Provisions include an amount relating to the site restoration requirements on leased properties.
(s) Judgements and estimates
In the application of the Society’s accounting policies, management are required to make judgements, estimates and assumptions about carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period; or in the period of the revision and future periods, if the revision affects both current and future periods.
Long-service leave and annual leave
Management judgement is applied in determining the following key assumptions used in the calculation of long-service leave at reporting date:
(i) future increases in salaries, wages and on costs;
(ii) experience of employee departures and period of service; and
(ii) flow of anticipated leave.
Allowance for doubtful debts
Management’s judgement is applied in determining the allowance for doubtful debts. If the estimated recoverable amount of the debt is less than the amount of revenue recognised, the difference is recognised in the allowance for doubtful debts.
Provision for site restoration
The provision for the costs of site restoration represents the present value of the best estimate of the future sacrifice of economic benefits that will be required to remove leasehold improvements from leasehold properties. The estimate has been made on the basis of historical restoration costs, a review of leases and future rentals. The unexpired terms of the leases range from one to 40 years.
Property, plant and equipment & intangibles
Useful lives and residual value of property, plant and equipment & intangibles are reviewed annually. Judgement is applied in determining the useful lives of property, plant and equipment. Any reassessment of useful lives and residual value in a particular year will affect depreciation and amortisation expense (either increasing or decreasing) from the date of reassessment through to the end of the reassessed useful life for both the current and future years.
(t) Comparative amounts
Certain comparative amounts in the financial statements have been reclassified or re-represented to conform to changes in presentation in the current financial year.
Operating divisions
The Australian Red Cross Society comprises the following operating divisions as defined in Note 1 to this report:
Australian Red Cross
Humanitarian Services
(Humanitarian Services)
Australian Red Cross Blood Service
(Blood Service)
The accounting policies of the reportable divisions are the same as the group’s accounting policies described in Note 2. Division surplus represents the surplus earned by each division. There is no allocation of central administration costs.
Interdivision transactions include rent paid by the Blood Service operating division to the Humanitarian Services operating divsion. Accumulated funds balances for both Humanitarian Services and Blood Service includes eliminations of interdivision transactions amounting to $5.835 million.
Divisional statement of profit or loss and other comprehensive income
2017 |
2016 |
|||||
Humanitarian Services |
Blood |
Society |
Humanitarian Services |
Blood Service |
Society |
|
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
$'000 |
|
Revenue |
||||||
Government funding |
||||||
Operating - Commonwealth funded |
104,810 |
510,027 |
614,837 |
127,022 |
492,513 |
619,535 |
Operating - State funded |
21,467 |
22,771 |
44,238 |
27,883 |
21,562 |
49,445 |
Capital - Commonwealth and state funded |
- |
52,376 |
52,376 |
- |
55,006 |
55,006 |
Total government funding |
126,277 |
585,174 |
711,451 |
154,905 |
569,081 |
723,986 |
Sale of goods |
27,912 |
- |
27,912 |
26,031 |
- |
26,031 |
Rendering of services |
16,177 |
- |
16,177 |
15,413 |
- |
15,413 |
Donations, bequests and sponsorships |
87,331 |
- |
87,331 |
89,495 |
- |
89,495 |
Investment revenue |
3,253 |
8,032 |
11,285 |
3,384 |
7,741 |
11,125 |
Non-government grant |
5,230 |
- |
5,230 |
4,299 |
- |
4,299 |
Other revenue |
- |
12,168 |
12,168 |
- |
23,683 |
23,683 |
Total revenue |
266,180 |
605,374 |
871,554 |
293,527 |
600,505 |
894,032 |
Expenditure |
||||||
Employee expenditure |
(153,988) |
(299,471) |
(453,459) |
(155,002) |
(292,664) |
(447,666) |
Operating expenditure |
(106,968) |
(138,482) |
(245,450) |
(124,393) |
(117,405) |
(241,798) |
Cost of services, sale of goods and consumables |
(5,911) |
(102,251) |
(108,162) |
(6,561) |
(102,479) |
(109,040) |
Depreciation and amortisation |
(8,010) |
(45,406) |
(53,416) |
(9,530) |
(46,241) |
(55,771) |
Interest and debt servicing costs |
(888) |
(4,453) |
(5,341) |
(1,263) |
(5,289) |
(6,552) |
Net loss on assets |
(33) |
(5,290) |
(5,323) |
(759) |
(11,826) |
(12,585) |
Total expenditure |
(275,798) |
(595,353) |
(871,151) |
(297,508) |
(575,904) |
(873,412) |
NET SURPLUS/(DEFICIT) FOR THE YEAR |
(9,618) |
10,021 |
403 |
(3,981) |
24,601 |
20,620 |
OTHER COMPREHENSIVE INCOME |
||||||
Items that will not be reclassified subsequently to profit or loss |
||||||
Actuarial gain/(loss) on retirement benefit obligations |
- |
2,701 |
2,701 |
- |
(1,281) |
(1,281) |
Items that may be reclassified subsequently to profit or loss |
||||||
Net gain/(loss) arising on investment revaluation |
1,458 |
3,446 |
4,904 |
(1,008) |
(1,238) |
(2,246) |
Other comprehensive income/(deficit) for the year |
1,458 |
6,147 |
7,605 |
(1,008) |
(2,519) |
(3,527) |
TOTAL COMPREHENSIVE SURPLUS/(DEFICIT) FOR THE YEAR |
(8,160) |
16,168 |
8,008 |
(4,989) |
22,082 |
17,093 |
Divisional Statement Of Financial Position
2017 |
2016 |
|||||
Humanitarian Services |
Blood |
Society |
Humanitarian Services |
Blood Service |
Society |
|
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
$'000 |
|
ASSETS |
||||||
Current assets |
||||||
Cash and cash equivalents |
39,501 |
160,083 |
199,584 |
36,955 |
193,738 |
230,693 |
Trade and other receivables¹ |
17,160 |
4,367 |
21,527 |
16,392 |
7,389 |
23,781 |
Inventories |
1,198 |
18,461 |
19,659 |
1,405 |
22,866 |
24,271 |
Other financial assets |
45,561 |
90,370 |
135,931 |
39,681 |
70,660 |
110,341 |
Prepayments |
2,559 |
8,882 |
11,441 |
2,465 |
5,106 |
7,571 |
Assets classified as held for sale |
3,029 |
- |
3,029 |
- |
- |
- |
Total current assets |
109,008 |
282,163 |
391,171 |
96,898 |
299,759 |
396,657 |
Non-current assets |
||||||
Property, plant and equipment |
61,152 |
304,798 |
365,950 |
67,371 |
308,439 |
375,810 |
Intangible assets |
16,551 |
27,747 |
44,298 |
17,687 |
30,071 |
47,758 |
Total non-current assets |
77,703 |
332,545 |
410,248 |
85,058 |
338,510 |
423,568 |
TOTAL ASSETS |
186,711 |
614,708 |
801,419 |
181,956 |
638,269 |
820,225 |
LIABILITIES |
||||||
Current liabilities |
||||||
Trade and other payables² |
17,584 |
34,809 |
52,393 |
13,854 |
33,595 |
47,449 |
Borrowings |
- |
14,648 |
14,648 |
- |
10,786 |
10,786 |
Provisions |
21,124 |
60,033 |
81,157 |
15,735 |
56,581 |
72,316 |
Other liabilities |
2,718 |
95,696 |
98,414 |
3,912 |
120,259 |
124,171 |
Total current liabilities |
41,426 |
205,186 |
246,612 |
33,501 |
221,221 |
254,722 |
Non-current liabilities |
||||||
Borrowings |
- |
35,094 |
35,094 |
- |
49,741 |
49,741 |
Provisions |
3,739 |
12,366 |
16,105 |
4,519 |
13,294 |
17,813 |
Defined benefit superannuation plans |
- |
748 |
748 |
65 |
3,281 |
3,346 |
Other liabilities |
- |
4,534 |
4,534 |
- |
4,285 |
4,285 |
Total non-current liabilities |
3,739 |
52,742 |
56,481 |
4,584 |
70,601 |
75,185 |
TOTAL LIABILITIES |
45,165 |
257,928 |
303,093 |
38,085 |
291,822 |
329,907 |
NET ASSETS |
141,546 |
356,780 |
498,326 |
143,871 |
346,447 |
490,318 |
EQUITY |
||||||
Reserves |
2,771 |
133,081 |
135,852 |
1,313 |
119,523 |
120,836 |
Specific purpose funds |
36,530 |
- |
36,530 |
40,056 |
- |
40,056 |
Accumulated funds |
102,245 |
223,699 |
325,944 |
102,502 |
226,924 |
329,426 |
TOTAL EQUITY |
141,546 |
356,780 |
498,326 |
143,871 |
346,447 |
490,318 |
¹ FY17 Trade and other receivables is offset by nil (2016: $0.080 million) intra-division transaction elimination. ² FY17 Trade and other payables is offset by nil (2016: $0.091 million) intra-division transaction elimination. |
Divisional statement of changes in equity
Humanitarian Services |
Blood Service |
Total |
|||||||
Accumulated funds |
Specific funds |
Investment revaluation reserve |
Accumulated funds |
Special reserve |
Capital reserve |
Investment revaluation reserve |
|||
Notes |
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
$'000 |
$'000 |
$'000 |
|
YEAR ENDED 30 JUNE 2016 |
|||||||||
Balance as at |
94,581 |
51,958 |
2,321 |
215,484 |
58,696 |
50,523 |
(338) |
473,225 |
|
Net surplus/(deficit) for the year |
20 |
(3,981) |
- |
- |
24,601 |
- |
- |
- |
20,620 |
Other comprehensive (deficit) for the year |
18,20 |
- |
- |
(1,008) |
(1,281) |
- |
- |
(1,238) |
(3,527) |
Transfers to / (from) specific purpose funds |
19 |
11,902 |
(11,902) |
- |
- |
- |
- |
- |
- |
Transfers to / (from) other reserves |
18 |
- |
- |
- |
(11,880) |
6,816 |
5,064 |
- |
- |
Balance as at |
102,502 |
40,056 |
1,313 |
226,924 |
65,512 |
55,587 |
(1,576) |
490,318 |
|
YEAR ENDED 30 JUNE 2017 |
|||||||||
Net surplus/(deficit) for the year |
20 |
(9,618) |
- |
- |
10,021 |
- |
- |
- |
403 |
Other comprehensive surplus for the year |
18,20 |
- |
- |
1,458 |
2,701 |
- |
- |
3,446 |
7,605 |
Transfers to / (from) specific purpose funds |
19 |
3,526 |
(3,526) |
- |
- |
- |
- |
- |
- |
Transfers to / (from) other reserves |
18 |
- |
- |
- |
(10,112) |
7,438 |
2,674 |
- |
- |
Elimination of interdivision transactions |
5,835 |
- |
- |
(5,835) |
- |
- |
- |
- |
|
Balance as at |
102,245 |
36,530 |
2,771 |
223,699 |
72,950 |
58,261 |
1,870 |
498,326 |
Divisional statement of cash flows
2017 |
2016 |
||||||
Humanitarian Services |
Blood |
Total |
Humanitarian Services |
Blood Service |
Total |
||
Notes |
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
$'000 |
|
Cash flows from operating activities |
|||||||
Receipts from donors, government and other sources |
267,240 |
657,077 |
924,317 |
296,005 |
652,041 |
948,046 |
|
Payments to suppliers and employees |
(258,529) |
(622,525) |
(881,054) |
(289,400) |
(551,352) |
(840,752) |
|
Interest and other costs of finance paid |
(888) |
(4,453) |
(5,341) |
(1,263) |
(5,289) |
(6,552) |
|
Net cash provided by operating activities |
21(b) |
7,823 |
30,099 |
37,922 |
5,342 |
95,400 |
100,742 |
Cash flows from investing activities |
|||||||
Payments for property, plant and equipment and intangibles |
(4,446) |
(44,136) |
(48,582) |
(2,284) |
(59,737) |
(62,021) |
|
Proceeds from disposal of property, plant and equipment |
636 |
208 |
844 |
159 |
291 |
450 |
|
Net payments for purchase of investment securities |
(3,909) |
(17,037) |
(20,946) |
(575) |
(38,878) |
(39,453) |
|
Dividends received |
1,195 |
874 |
2,069 |
737 |
1,043 |
1,780 |
|
Interest received |
1,247 |
7,158 |
8,405 |
1,931 |
6,698 |
8,629 |
|
Net cash used in investing activities |
(5,277) |
(52,933) |
(58,210) |
(32) |
(90,583) |
(90,615) |
|
Cash flows from financing activities |
|||||||
Proceeds from borrowings |
- |
- |
- |
1,500 |
- |
1,500 |
|
Repayment of borrowings |
- |
(10,786) |
(10,786) |
(8,346) |
(9,946) |
(18,292) |
|
Net cash used in financing activities |
- |
(10,786) |
(10,786) |
(6,846) |
(9,946) |
(16,792) |
|
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS |
2,546 |
(33,620) |
(31,074) |
(1,536) |
(5,129) |
(6,665) |
|
Cash and cash equivalents at the beginning of the financial year |
36,955 |
193,738 |
230,693 |
38,491 |
198,863 |
237,354 |
|
Effects of exchange rate changes on the balance of cash held in foreign currencies |
- |
(35) |
(35) |
- |
4 |
4 |
|
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR |
21(a) |
39,501 |
160,083 |
199,584 |
36,955 |
193,738 |
230,693 |
Note 4 DONATIONS, BEQUESTS AND SPONSORSHIPS |
2017 |
2016 |
$'000 |
$'000 |
|
Donations and sponsorships |
66,199 |
62,772 |
Appeals - international |
||
Cyclone Pam (Vanuatu) Appeal |
38 |
59 |
Ebola Outbreak Appeal |
1 |
4 |
Nepal Earthquake Appeal |
80 |
839 |
Syria Crisis Appeal |
1,083 |
1,455 |
Tropical Cyclone Winston (Fiji) Appeal |
44 |
4,546 |
Typhoon Haiyan (Philippines) Appeal |
14 |
99 |
East Africa Food Crisis Appeal |
1,261 |
- |
Bequests |
12,571 |
12,594 |
Membership fee and fundraising |
2,208 |
2,546 |
Raffle tickets |
3,832 |
4,581 |
Total donations, bequests and sponsorships |
87,331 |
89,495 |
Note 5 INVESTMENT REVENUE |
||
Interest revenue - bank deposits |
7,654 |
7,463 |
Interest revenue - Available-for-sale investments |
751 |
1,166 |
Dividends from other entities and imputation credit |
2,487 |
2,036 |
Other income |
393 |
460 |
Total investment revenue |
11,285 |
11,125 |
Note 6 GAINS AND (LOSSES) |
||
(Losses) / gains on disposal of property, plant and equipment |
(1,132) |
67 |
Write off of intangible projects |
(618) |
(1,192) |
Impairment of property, plant and equipment |
(2,741) |
(11,440) |
Impairment losses of intangibles |
(667) |
- |
Gains on disposal of investments |
464 |
488 |
Impairment of available-for-sale financial assets¹ |
(574) |
(462) |
Foreign exchange losses |
(55) |
(46) |
Total (losses) and gains |
(5,323) |
(12,585) |
¹ Where an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to the profit or loss in the period. |
||
Note 7 EXPENDITURE |
2017 |
2016 |
$'000 |
$'000 |
|
Employee expenditure |
||
Wages and salaries |
410,622 |
407,331 |
Post employment benefits |
||
Defined benefit plans |
168 |
367 |
Defined contribution plans |
36,901 |
36,640 |
Termination benefits |
5,768 |
3,328 |
Total employee expenditure |
453,459 |
447,666 |
Depreciation of property, plant and equipment and amortisation of intangibles |
||
Depreciation of property, plant and equipment |
41,827 |
48,178 |
Amortisation of intangible |
11,589 |
7,593 |
Total depreciation of property, plant and equipment and amortisation of Intangibles |
53,416 |
55,771 |
Interest and debt servicing costs |
5,341 |
6,552 |
Total Interest and Debt Servicing Costs |
5,341 |
6,552 |
Operating expenditure |
||
Decrease / (increase) in inventory |
5,129 |
(3,360) |
Impairment of trade receivables |
23 |
(28) |
Operating lease rental expenditure - minimum lease payments |
39,919 |
40,040 |
Other expenditure |
||
Partner and call centre expense |
15,752 |
17,633 |
Buildings and facilities expense |
7,071 |
7,200 |
Client support costs |
11,791 |
12,757 |
Travel and accommodation |
6,069 |
5,644 |
Contribution to other partner societies |
12,129 |
14,836 |
Advertising and promotional activities |
8,286 |
9,438 |
Other operational costs |
30,497 |
41,699 |
Overheads |
106,342 |
93,612 |
Workers compensation costs |
2,442 |
2,327 |
Total operating expenditure |
245,450 |
241,798 |
Cost of services, sale of goods and consumables |
||
Cost of sales |
3,819 |
3,012 |
Cost of rendering training services |
2,092 |
3,549 |
Consumables |
102,251 |
102,479 |
Total cost of services, sale of goods and consumables |
108,162 |
109,040 |
Note 8 TRADE AND OTHER RECEIVABLES |
||
Trade receivables |
9,457 |
11,154 |
Allowance for doubtful debts |
(154) |
(213) |
Total trade receivables |
9,303 |
10,941 |
Other receivables |
11,243 |
12,835 |
Goods and services tax receivable |
981 |
5 |
Total trade and other receivables |
21,527 |
23,781 |
Trade receivables are non-interest bearing and are generally on 30 day terms. Where debts are assessed to be non-recoverable, these are written off. |
||
Note 8 TRADE AND OTHER RECEIVABLES (Continued) |
2017 |
2016 |
$'000 |
$'000 |
|
Ageing of past due but not impaired trade receivables |
||
30-60 days |
262 |
69 |
60-90 days |
22 |
52 |
90-120 days |
28 |
38 |
120+ days |
11 |
134 |
Total past due but not impaired trade receivables |
323 |
293 |
Movement in the allowance for doubtful debts |
||
Opening balance 1 July |
213 |
299 |
Impairment (losses recognised)/written back on receivables |
23 |
(28) |
Amounts written off as uncollectible |
(82) |
(58) |
Closing balance 30 June |
154 |
213 |
Ageing of impaired trade receivables |
||
0-30 days |
28 |
48 |
30-60 days |
8 |
4 |
60-90 days |
30 |
15 |
90-120 days |
16 |
23 |
120+ days |
51 |
123 |
Total impaired trade receivables |
133 |
213 |
Note 9 INVENTORIES |
||
Consumables inventory |
7,226 |
6,796 |
Finished goods |
11,453 |
16,519 |
Work in progress |
980 |
956 |
Total inventories |
19,659 |
24,271 |
Note 10 OTHER FINANCIAL ASSETS |
2017 |
2016 |
$'000 |
$'000 |
|
Current |
||
Available-for-sale financial assets |
||
Shares |
43,429 |
35,054 |
Managed funds |
||
Listed managed funds |
1,342 |
626 |
Unlisted managed funds |
9,989 |
9,975 |
Bonds |
||
Listed bonds |
11,787 |
12,325 |
Unlisted bonds |
60,324 |
43,838 |
Total available-for-sale financial assets |
126,871 |
101,818 |
Held-to-maturity investment |
||
Term deposits |
9,060 |
8,523 |
Total current other financial assets |
135,931 |
110,341 |
Fair value measurements recognised in the statement of financial position |
||
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into levels 1 to 3 based on the degree to which the fair value is observable. • Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). • Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). |
Level 1 |
Level 2 |
Level 3 |
Total |
|
$’000 |
$’000 |
$’000 |
$'000 |
|
YEAR ENDED 30 JUNE 2017 |
||||
Available-for-sale financial assets |
||||
Bonds |
11,787 |
60,324 |
- |
72,111 |
Shares |
43,429 |
- |
- |
43,429 |
Managed funds |
1,342 |
9,989 |
- |
11,331 |
Held-to-maturity investment |
||||
Term deposits |
9,060 |
- |
- |
9,060 |
Total current other financial assets |
65,618 |
70,313 |
- |
135,931 |
YEAR ENDED 30 JUNE 2016 |
||||
Available-for-sale financial assets |
||||
Bonds |
12,325 |
43,838 |
- |
56,163 |
Shares |
35,054 |
- |
- |
35,054 |
Managed funds |
626 |
9,975 |
- |
10,601 |
Held-to-maturity investment |
||||
Term deposits |
8,523 |
- |
- |
8,523 |
Total current other financial assets |
56,528 |
53,813 |
- |
110,341 |
There were no transfers between levels during the period. |
Note 11(a) PROPERTY, PLANT AND EQUIPMENT |
Land, buildings and renovations |
Shop |
Plant and equipment |
Work in progress |
Total |
$’000 |
$’000 |
$’000 |
$’000 |
$'000 |
|
YEAR ENDED 30 JUNE 2017 |
|||||
Gross carrying amount |
|||||
- Balance as at 30 June 2016 |
349,984 |
5,420 |
276,196 |
36,519 |
668,119 |
- Balance as at 30 June 2017 |
347,077 |
4,501 |
271,832 |
54,899 |
678,309 |
Accumulated depreciation |
|||||
- Balance as at 30 June 2016 |
(114,953) |
(4,837) |
(172,519) |
- |
(292,309) |
- Balance as at 30 June 2017 |
(126,718) |
(3,995) |
(181,646) |
- |
(312,359) |
Net book value as at 30 June 2016 |
235,031 |
583 |
103,677 |
36,519 |
375,810 |
Net book value as at 30 June 2017 |
220,359 |
506 |
90,186 |
54,899 |
365,950 |
Note 11(b) PROPERTY, PLANT AND EQUIPMENT |
|||||
YEAR ENDED 30 JUNE 2016 |
|||||
Gross carrying amount |
|||||
Balance as at 1 July 2015 |
332,564 |
5,692 |
268,279 |
34,640 |
641,175 |
Classification transfer |
16 |
- |
(16) |
- |
- |
Transfer to intangible |
- |
- |
- |
(655) |
(655) |
Additions |
674 |
1 |
374 |
47,252 |
48,301 |
Disposals |
(1,417) |
(400) |
(7,445) |
- |
(9,262) |
Transfers to / (from) work in progress |
18,147 |
127 |
15,004 |
(33,278) |
- |
Impairment loss of property, plant and equipment |
- |
- |
- |
(11,440) |
(11,440) |
Balance as at 30 June 2016 |
349,984 |
5,420 |
276,196 |
36,519 |
668,119 |
Accumulated depreciation |
|||||
Balance as at 1 July 2015 |
(98,491) |
(4,466) |
(149,605) |
- |
(252,562) |
Classification transfer |
(16) |
- |
16 |
- |
- |
Depreciation |
(17,635) |
(722) |
(29,821) |
- |
(48,178) |
Disposals |
1,189 |
351 |
6,891 |
- |
8,431 |
Balance as at 30 June 2016 |
(114,953) |
(4,837) |
(172,519) |
- |
(292,309) |
Net book value as at 30 June 2016 |
235,031 |
583 |
103,677 |
36,519 |
375,810 |
YEAR ENDED 30 JUNE 2017 |
|||||
Gross carrying amount |
|||||
Balance as at 1 July 2016 |
349,984 |
5,420 |
276,196 |
36,519 |
668,119 |
Transfer to asset held for sale¹ |
(5,010) |
- |
- |
- |
(5,010) |
Classification transfer ² |
- |
- |
460 |
76 |
536 |
Additions |
740 |
- |
- |
38,496 |
39,236 |
Disposals |
(3,844) |
(1,350) |
(16,637) |
- |
(21,831) |
Transfers to / (from) work in progress |
5,207 |
431 |
12,187 |
(17,825) |
- |
Impairment loss of property, plant and equipment |
- |
- |
(374) |
(2,367) |
(2,741) |
Balance as at 30 June 2017 |
347,077 |
4,501 |
271,832 |
54,899 |
678,309 |
Note 11(b) PROPERTY, PLANT AND EQUIPMENT (Continued) |
Land, buildings and renovations |
Shop |
Plant and equipment |
Work in progress |
Total |
$’000 |
$’000 |
$’000 |
$’000 |
$'000 |
|
Accumulated depreciation |
|||||
Balance as at 1 July 2016 |
(114,953) |
(4,837) |
(172,519) |
- |
(292,309) |
Transfer to asset held for sale¹ |
1,982 |
- |
- |
- |
1,982 |
Depreciation expense |
(17,034) |
(313) |
(24,480) |
- |
(41,827) |
Disposals |
3,287 |
1,155 |
15,353 |
- |
19,795 |
Balance as at 30 June 2017 |
(126,718) |
(3,995) |
(181,646) |
- |
(312,359) |
Net book value as at 30 June 2017 |
220,359 |
506 |
90,186 |
54,899 |
365,950 |
¹ In 2017, assets classified as held for sale ($3.028 million) include properties in Larrakeyah (Northern Territory) and Hobart (Tasmania). ² In 2017 $0.536 million in assets were reclassified to computer equipment from software (intangibles). Refer to note 12. |
Note 12 INTANGIBLE ASSETS (Continued) |
Software |
Work in |
Total |
$’000 |
$’000 |
$'000 |
|
YEAR ENDED 30 JUNE 2016 |
|||
Gross carrying amount |
|||
Balance as at 1 July 2015 |
63,654 |
8,490 |
72,144 |
Transfer from property, plant and equipment |
- |
655 |
655 |
Additions to work in progress |
- |
14,329 |
14,329 |
Disposals / Write Off |
(7) |
(1,129) |
(1,136) |
Transfers to / (from) work in progress |
10,049 |
(10,049) |
- |
Balance as at 30 June 2016 |
73,696 |
12,296 |
85,992 |
Accumulated amortisation |
|||
Balance as at 1 July 2015 |
(30,645) |
- |
(30,645) |
Amortisation expense |
(7,593) |
- |
(7,593) |
Disposals |
4 |
- |
4 |
Balance as at 30 June 2016 |
(38,234) |
- |
(38,234) |
Net book value as at 30 June 2016 |
35,462 |
12,296 |
47,758 |
YEAR ENDED 30 JUNE 2017 |
|||
Gross carrying amount |
|||
Balance as at 1 July 2016 |
73,696 |
12,296 |
85,992 |
Transfer to property, plant and equipment |
(460) |
(76) |
(536) |
Additions to work in progress |
- |
9,950 |
9,950 |
Disposals / write off |
- |
(618) |
(618) |
Transfers to / (from) work in progress |
9,842 |
(9,842) |
- |
Impairment losses recognised in profit or loss |
- |
(667) |
(667) |
Balance as at 30 June 2017 |
83,078 |
11,043 |
94,121 |
Accumulated amortisation |
|||
Balance as at 1 July 2016 |
(38,234) |
- |
(38,234) |
Transfer to property, plant and equipment |
- |
- |
- |
Amortisation expense |
(11,589) |
- |
(11,589) |
Disposals |
- |
- |
- |
Balance as at 30 June 2017 |
(49,823) |
- |
(49,823) |
Net book value as at 30 June 2017 |
33,255 |
11,043 |
44,298 |
Note 13 TRADE AND OTHER PAYABLES |
2017 |
2016 |
|
Notes |
$'000 |
$'000 |
|
Current |
|||
Trade payables |
35,420 |
32,271 |
|
Accruals and other payables |
16,973 |
13,627 |
|
Goods and services tax payable |
- |
1,551 |
|
Total trade and other payables |
52,393 |
47,449 |
|
Trade payables are non interest bearing and are normally settled on 30 day terms. Other payables are non interest bearing and have an average term of 30 days. The continuous monitoring of cash flow ensures payables are paid within the credit timeframe. |
|||
Note 14 BORROWINGS |
|||
Current - secured |
|||
Bank loans |
5,380 |
4,943 |
|
Finance lease liabilities |
23 |
9,268 |
5,843 |
Non-current - secured |
|||
Bank loans |
16,860 |
22,239 |
|
Finance lease liabilities |
23 |
18,234 |
27,502 |
Total borrowings |
49,742 |
60,527 |
|
Disclosed in the financial statements as: |
|||
Current borrowings |
14,648 |
10,786 |
|
Non-current borrowings |
35,094 |
49,741 |
|
Total borrowings |
49,742 |
60,527 |
|
Financing facilities |
|||
Unsecured bank overdraft facility: |
|||
amount used |
- |
- |
|
amount unused |
16,000 |
18,000 |
|
Total |
16,000 |
18,000 |
|
Secured bank loan facility: |
|||
amount used |
- |
27,182 |
|
Total |
- |
27,182 |
|
Unsecured cash advance facility: |
|||
amount used |
- |
- |
|
amount unused |
4,000 |
25,000 |
|
Total |
4,000 |
25,000 |
|
Secured leasing facility: |
|||
amount used |
23 |
27,502 |
33,345 |
Total |
27,502 |
33,345 |
|
Credit card facility: |
|||
amount used |
938 |
645 |
|
amount unused |
1,712 |
2,005 |
|
Total credit card facility |
2,650 |
2,650 |
|
The Society is not in default of the financing facilities. |
|||
Note 15 PROVISIONS |
|||
Current |
|||
Employee benefits |
77,272 |
69,349 |
|
Site restoration |
3,885 |
2,967 |
|
Non-current |
|||
Employee benefits |
10,362 |
10,703 |
|
Site restoration |
5,743 |
7,110 |
|
Total provisions |
97,262 |
90,129 |
|
Disclosed in the financial statements as: |
|||
Current provisions |
81,157 |
72,316 |
|
Non-current provisions |
16,105 |
17,813 |
|
Total provisions |
97,262 |
90,129 |
|
The employee benefits provision contains provisions for long service leave, rostered days off and other employee entitlements. |
|||
Movements in employee benefits provisions |
|||
Opening balance 1 July |
80,052 |
77,137 |
|
Provision recognised during the year |
7,582 |
2,915 |
|
Closing balance 30 June |
87,634 |
80,052 |
|
Movements in site restoration |
|||
Opening balance 1 July |
10,076 |
9,773 |
|
Provision (utilised) / recognised during the year |
(448) |
303 |
|
Closing balance 30 June |
9,628 |
10,076 |
|
Note 16 OTHER LIABILITIES |
|||
Current |
|||
Lease incentive |
1,523 |
1,462 |
|
Government funding refundable¹ |
22,277 |
42,016 |
|
Revenue in advance² |
74,614 |
80,693 |
|
Non-current |
|||
Lease incentive |
4,534 |
4,285 |
|
Total other liabilities |
102,948 |
128,456 |
|
Disclosed in the financial statements as: |
|||
Current other liabilities |
98,414 |
124,171 |
|
Non-current other liabilities |
4,534 |
4,285 |
|
Total other liabilities |
102,948 |
128,456 |
|
¹ Government funding refundable relates to the expected return of funds to the NBA for surpluses in the reported period. ²Revenue in advance includes:(i) Output funding net cash relates to the working capital advance received by the Blood Service operating division from the NBA upon commencement of the Output Based Funding Model from 1 July 2011, less June 2017 revenue not received until July 2017(ii) Funds received relating to reciprocal grants of $10.854 million |
|||
Note 17 DEFINED BENEFIT SUPERANNUATION PLANS |
|||
Local Government Super (NSW): Local Government Super provides defined benefits whereby components of the final benefit are derived from a multiple of member salary and years of membership. Members receive lump sum or pension benefits on retirement, death, disablement and withdrawal. The defined benefits scheme was closed to new members effective from 15 December 1992. The Local Government Superannuation Scheme was established on 1 July 1997 to specifically cater for the superannuation requirements of Local Government employees. LGSS Pty Ltd (ABN 68078003497) (AFSL 383558) is the Trustee of the Local Government Superannuation Scheme (known as Local Government Super). Local Government Super is a resident regulated superannuation scheme within the meaning of the Superannuation Industry (Supervision) Act 1993. Australian Red Cross Queensland Staff Retirement Fund (QLD): The fund, offering both defined benefit and a defined contribution plans, is a final average (3years) lump sum benefit arrangement providing benefits on death, disability, resignation and retirement. The defined benefit section provides benefits based on the length of service and final average salary. The defined contribution section receives fixed contributions and the employer's legal or constructive obligation is limited to these contributions. The fund commenced on 15 June 2006 as a successor fund transfer from the Australian Red Cross Qld Staff Superannuation Plan. This fund is a sub-fund of the AMP Superannuation Savings Trust which was established under a Trust Deed dated 1 July 1998. The Trustee is AMP Superannuation Limited. The plans in Australia typically expose the Australian Red Cross to actuarial risks such as; investment risk, interest rate risk, longevity risk and salary risk: |
|||
Investment Risk |
The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high quality corporate bond yields; if the return on plan asset is below this rate, it will create a plan deficit. Currently the plan has a relatively balanced investment in equity securities, debt instruments and real estate. Due to the long-term nature of the plan liabilities, the board of the pension fund considers it appropriate that a reasonable portion of the plan assets should be invested in equity securities and in real estate to leverage the return generated by the fund. |
||
Interest Risk |
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan's debt investments. |
||
Longevity Risk |
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of the plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability. |
||
Salary Risk |
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability. |
||
The risk relating to benefits to be paid to the dependants of plan members (widow and orphan benefits) is re-insured by an external insurance company. No other post-retirement benefits are provided to these employees. The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation was carried out at 30 June 2017 by Mr Jeff Humphries , Principal, CHR Consulting Pty Ltd for Australian Red Cross Queensland Staff Retirement Fund (QLD) - Mr Richard Boyfield, Partner, Representative of Mercer Consulting (Australia) Pty Ltd for Local Government Super (NSW). The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method. |
|||
Note 17 DEFINED BENEFIT SUPERANNUATION PLANS (Continued) |
2017 |
2016 |
|
Notes |
% |
% |
|
Principal actuarial assumptions: |
|||
Discount rate |
4.00% |
3.30% |
|
Expected rate of salary increases |
3.00% |
3.00% |
|
Anticipated rate of return on plan assets |
6.38% |
6.40% |
|
2017 |
2016 |
||
$'000 |
$'000 |
||
Amounts recognised in the statement of profit or loss and other comprehensive income: |
|||
Current service cost |
68 |
305 |
|
Net interest cost |
100 |
62 |
|
Components of defined benefit costs recognised in profit or loss |
168 |
367 |
|
Remeasurement on the net defined benefit liability: |
|||
Return on plan assets (excluding amounts included in net interest expense) |
(1,093) |
476 |
|
Actuarial gains arising from changes in demographic assumption |
- |
(4) |
|
Actuarial (gains) and losses arising from changes in financial assumption |
(1,253) |
1,334 |
|
Actuarial gains arising from experience adjustments |
(355) |
(525) |
|
Components of defined benefit gain recognised in other comprehensive income |
(2,701) |
1,281 |
|
Contributions by plan participants (employer and members) in profit or loss |
- |
- |
|
Total defined benefits (gain) / costs |
(2,533) |
1,648 |
|
The current service cost and the net interest expense for the year are included in staff expenditure in the Statement of Profit or Loss and Other Comprehensive Income. The remeasurement of the net defined benefit liability is included in Other Comprehensive Income. |
|||
Amounts recognised in the statement of financial position: |
|||
Present value of funded obligations (a) |
17 (a) |
19,753 |
21,820 |
Fair value of plan assets (b) |
17 (b) |
(19,005) |
(18,474) |
Net liability arising from defined benefit plan obligation |
748 |
3,346 |
|
(a) Reconciliation of movement in the present value of the defined benefit obligations in the current year were as follows: |
|||
Balance at beginning of the year |
21,820 |
21,104 |
|
Current service cost |
848 |
932 |
|
Interest on obligation |
677 |
858 |
|
Remeasurement (gains) / losses |
- |
- |
|
Actuarial gains arising from changes in demographic assumptions |
- |
(4) |
|
Actuarial losses and (gains) arising from changes in financial assumptions |
(1,253) |
1,334 |
|
Actuarial gains arising from experience adjustments |
(355) |
(525) |
|
Benefits paid (including expenses and taxes) |
(1,863) |
(1,879) |
|
Other |
(121) |
- |
|
Balance at end of the year |
19,753 |
21,820 |
(b) Reconciliation of movements in the fair value of the plan assets in the current year were as follows: |
|||
Balance at beginning of the year |
18,474 |
19,406 |
|
Interest income |
577 |
796 |
|
Remeasurement (gains) / losses |
|||
Return on plan asset (excluding amounts included in net interest expense) |
1,158 |
(476) |
|
Contributions by the employer |
726 |
587 |
|
Contributions from plan participants |
54 |
40 |
|
Benefits paid (including expenses and taxes) |
(1,863) |
(1,879) |
|
Other |
(121) |
- |
|
Balance at end of the year |
19,005 |
18,474 |
|
The fair value of the plan assets at the end of the reporting period for each category, are as follows: |
|||
Australian equities |
4,637 |
4,794 |
|
International equities |
4,827 |
4,683 |
|
Property |
1,996 |
1,672 |
|
Australian fixed interest |
1,501 |
2,374 |
|
International fixed interest |
342 |
775 |
|
Cash |
1,805 |
2,402 |
|
Other |
3,897 |
1,774 |
|
Balance at end of the year |
19,005 |
18,474 |
|
2017 |
2016 |
||
% |
% |
||
Other disclosures: |
|||
The percentage contribution of each majority category of total plan assets comprises: |
|||
Australian equities |
24.4% |
23.7% |
|
International equities |
25.4% |
24.8% |
|
Property |
10.5% |
10.4% |
|
Australian fixed interest |
7.9% |
7.9% |
|
International fixed interest |
1.8% |
1.4% |
|
Cash |
9.5% |
12.6% |
|
Other |
20.5% |
19.2% |
|
100.0% |
100.0% |
||
The sensitivity analysis above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the statement of financial position. Sensitivity analysis for actuarial assumptions Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity analysis below has been determined based on reasonably possible changes of the respective assumptions occuring at the end of the reporting period, while holding all other assumptions constant. - If the discount rate is 50 basis points higher/(lower), the defined benefit obligation would (decrease)/increase by $0.653 million (2016: $0.801 million). - If the expected salary growth increases/(decreases) by 50 basis points, the defined benefit obligation would increase/(decrease) by $0.259 million (2016: $0.460 million). There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years other then the change in the bond rate used to calculate the employee liability obligations. Asset-Liability matching study There were no asset-liability matching strategies adopted by the funds during the period. Effects on future cash flows Local Government Super's funding arrangements are assessed at least every three years following the release of the triennial actuarial review. Following completion of the last review as at 30 June 2015, the Blood Service operating division had sufficient assets to cover its liabilities, and no adjustments to funding have occurred. The Society reviews its funding positions annually with funding arrangements adjusted as appropriate. Members of the Australian Red Cross Queensland Staff Retirement Fund contribute at the rate of 5% of salary. The residual contribution (including back service payments) is paid by the Society. The funding requirements are based on the local actuarial measurement framework. In this framework the discount rate is set on the expected return on the Fund's assets. The Society carries the investment volatility risk and may be required to make additional contributions from time to time if assets do not cover members' vested benefits. The average duration of the benefit obligation for the funds at 30 June 2017 is 8.92 years (2016: 8.95 years). This number can be analysed as follows: • active members: 9.53 years (2016: 9.59 years); • retired members: 8.78 years (2016: 9.14 years). The Society expects to make a contribution of $0.551 million to the defined benefit plans during the next financial year. |
|||
2017 |
2016 |
||
$'000 |
$'000 |
||
Historic summary |
|||
Defined benefit plan obligations |
19,753 |
21,820 |
|
Plan assets |
(19,005) |
(18,474) |
|
Deficit |
748 |
3,346 |
|
Actual return on assets |
1,158 |
(476) |
|
Cumulative amount recognised in the other comprehensive income |
|||
Cumulative amount of actuarial losses |
2,519 |
5,220 |
|
Expected contributions and funding arrangements |
|||
Expected employer contributions at 30 June |
551 |
553 |
Note 18 RESERVES |
Investment revaluation reserve (i) |
Special reserve (ii) |
Capital reserve (iii) |
Total |
$’000 |
$'000 |
$’000 |
$'000 |
|
Year ended 30 June 2016 |
||||
Balance as at 1 July 2015 |
1,983 |
58,696 |
50,523 |
111,202 |
Net loss arising on revaluation |
(2,246) |
- |
- |
(2,246) |
Transfers to reserves from accumulated funds |
- |
6,816 |
5,064 |
11,880 |
Balance as at 30 June 2016 |
(263) |
65,512 |
55,587 |
120,836 |
Year ended 30 June 2017 |
||||
Balance as at 1 July 2016 |
(263) |
65,512 |
55,587 |
120,836 |
Net gains arising on revaluation |
4,904 |
- |
- |
4,904 |
Transfers to reserves from accumulated funds |
- |
7,438 |
2,674 |
10,112 |
Balance as at 30 June 2017 |
4,641 |
72,950 |
58,261 |
135,852 |
(i) Investment revaluation reserve comprises the cumulative net change in the fair value of available-for-sale investments until the investment is derecognised net of any permanent impairment identified and reserved to the profit or loss. (ii) The Society’s special reserve records retained surplus over which the Society has restricted use. (iii) The Society’s Capital Reserve records capital surplus less capital expenditure relating to various capital funded programs or funds received for the purpose of future capital expenditure. |
Note 19 SPECIFIC PURPOSE FUNDS |
Domestic appeals |
International projects |
Domestic |
Strategic Initiatives |
Total |
$’000 |
$'000 |
$’000 |
$’000 |
$'000 |
|
Year ended 30 June 2016 |
|||||
Balance as at 1 July 2015 |
586 |
32,913 |
18,459 |
- |
51,958 |
Transfers to accumulated funds |
(586) |
(3,694) |
(7,622) |
- |
(11,902) |
Balance as at 30 June 2016 |
- |
29,219 |
10,837 |
- |
40,056 |
Year ended 30 June 2017 |
- |
||||
Balance as at 1 July 2016 |
- |
29,219 |
10,837 |
- |
40,056 |
Transfers from/(to) accumulated funds |
- |
(6,014) |
(1,182) |
3,670 |
(3,526) |
Balance as at 30 June 2017 |
- |
23,205 |
9,655 |
3,670 |
36,530 |
Specific purpose funds are unspent tied funds carried forward for the purpose of spending on specific activities or programs in the future. |
Note 20 ACCUMULATED FUNDS |
2017 |
2016 |
|
Notes |
$'000 |
$'000 |
|
Balance at beginning of financial year |
329,426 |
310,065 |
|
Surplus for the financial year |
403 |
20,620 |
|
Actuarial gain / (loss) on defined benefit superannuation plans |
17 |
2,701 |
(1,281) |
Transfers from specific purpose funds |
18, 19 |
3,526 |
11,902 |
Transfers to other reserves |
18 |
(10,112) |
(11,880) |
Balance at end of financial year |
325,944 |
329,426 |
|
Note 21 CASH AND CASH EQUIVALENTS |
|||
21(a) Reconciliation of cash and cash equivalents |
|||
Cash |
32,125 |
32,302 |
|
Term deposits |
167,459 |
198,391 |
|
Net cash and cash equivalents |
199,584 |
230,693 |
|
21(b) Reconciliation of surplus / (deficit) for the year to cash flows from operating activities |
|||
Net surplus / (deficit) |
403 |
20,620 |
|
Depreciation and amortisation of non-current assets |
7 |
53,416 |
55,771 |
Impairment of property, plant and equipment & intangibles |
6 |
3,408 |
11,440 |
Impairment of available-for-sale financial assets |
6 |
574 |
462 |
Net foreign currency (gains) |
6 |
55 |
46 |
Gain on disposal of investments |
6 |
(464) |
(488) |
Loss on disposal of property, plant and equipment and intangibles |
6 |
1,750 |
1,125 |
Investment interest recognised in profit or loss |
(8,405) |
(8,629) |
|
Dividends recognised in profit or loss |
(2,487) |
(2,036) |
|
Changes in assets and liabilities : |
|||
Decrease in trade and other receivables |
2,254 |
2,835 |
|
(Increase) / decrease in inventory |
4,612 |
(4,433) |
|
Decrease / (increase) in prepayments |
(3,870) |
2,502 |
|
Increase / (decrease) in trade, other payables and other liabilities |
5,017 |
502 |
|
(Decrease) / increase in prepaid government funds |
(24,424) |
14,398 |
|
Increase / (decrease) in revenue in advance |
(1,153) |
3,042 |
|
Increase in provisions |
7,133 |
3,218 |
|
Components of defined benefit recognised in profit or loss |
103 |
367 |
|
Net cash provided by operating activities |
37,922 |
100,742 |
|
Note 22 COMMITMENTS |
|||
Capital commitments |
|||
Capital commitments contracted for at reporting balance date but not provided for in the financial statements are payable as follows: |
|||
Not longer than 1 year |
14,729 |
9,411 |
|
TOTAL COMMITMENTS |
14,729 |
9,411 |
|
The majority of the Society's commitments include premises related activities with the balance committed to other business initiatives. |
Note 23 LEASES |
Minimum future lease payments |
Present value of minimum future lease payments |
||
2017 |
2016 |
2017 |
2016 |
|
$’000 |
$'000 |
$’000 |
$'000 |
|
Finance lease liabilities |
||||
Not later than 1 year |
11,139 |
8,168 |
9,268 |
5,843 |
Later than 1 year and not later than 5 years |
20,430 |
29,535 |
18,234 |
25,504 |
Later than 5 years |
- |
2,035 |
- |
1,998 |
Minimum future lease payments |
31,569 |
39,738 |
27,502 |
33,345 |
Less future finance charges |
(4,067) |
(6,393) |
- |
- |
Total lease liabilities |
27,502 |
33,345 |
27,502 |
33,345 |
Included in financial statements as : |
||||
Current borrowings |
- |
9,268 |
5,843 |
|
Non-current borrowings |
- |
18,234 |
27,502 |
|
Present value of minimum lease payments |
- |
27,502 |
33,345 |
|
The Society leases various equipment and fit-outs with a carrying value of $27.501 million (2016: $33.345 million) under finance leases expiring within 3 to 10 years. Under the terms of the leases, the Society has the option to acquire the leased assets on expiry of the leases. The Society's obligations under finance leases are secured by the lessor's title to the leased assets. |
||||
2017 |
2016 |
|||
$'000 |
$'000 |
|||
Non-cancellable operating lease commitments |
||||
Not longer than 1 year |
32,091 |
33,071 |
||
Longer than 1 year and not longer than 5 years |
84,250 |
91,128 |
||
Longer than 5 years |
79,716 |
99,704 |
||
196,057 |
223,903 |
|||
The Society leases various premises used as offices, retail stores, blood collection centres, processing and testing centres, and warehouses under non-cancellable leases expiring within 2 to 20-years. |
||||
Note 24 CONTINGENT ASSETS AND LIABILITIES |
||||
24.1 Contingent Assets There are no contingent assets or events identified which would be expected to have a material impact on the financial statements in the future. 24.2 Contingent Liabilities There is a potential for claims to arise from viral / bacterial infections or blood-borne disease which are currently unidentified, or in circumstances where there are no test or screening procedures available to test for a virus / bacteria / disease state. In the event that commercial insurance does not cover financial exposure arising as a result of transmission of blood-borne disease occurring subsequent to 1 July 2000, a national managed fund has been established with claims covered at the discretion of the NBA. The Society is entitled to seek, and the NBA may at its discretion grant, indemnities in respect of potential liabilities arising from litigation in relation to pre July 2000 transfusion-transmitted diseases. The Society has bank guarantees in place in relation to certain property leases. The value of these guarantees at 30 June 2017 was $0.226 million (2016: $0.190 million). The Board is satisfied the guarantees will not be called upon and therefore no liability has been recorded in the statement of financial position. There are no other contingent liabilities or events identified which would be expected to have a material impact on the financial statements in the future. |
Note 25 FINANCIAL INSTRUMENTS |
2017 |
2016 |
|
Notes |
$'000 |
$'000 |
|
(a) Categories of financial instruments |
|||
Financial assets |
|||
Cash and cash equivalents |
21(a) |
199,584 |
230,693 |
Trade and other receivables |
8 |
21,527 |
23,781 |
Prepayment |
11,441 |
7,571 |
|
Available-for-sale financial assets |
10 |
126,871 |
101,818 |
Held-to-maturity investment |
10 |
9,060 |
8,523 |
Financial liabilities |
|||
Trade and other payables |
13 |
52,393 |
47,449 |
Deferred revenue |
16 |
96,891 |
122,709 |
Lease incentives |
16 |
6,057 |
5,747 |
Interest bearing loans and borrowings |
14 |
49,742 |
60,527 |
The Society's Board considers the above carrying amounts of financial assets and financial liabilities to approximate their fair values. |
(b) Financial risk management objectives and policies
The Society’s financial instruments consist mainly of:
- deposits with banks;
- investments in equities, managed funds, bonds, debentures and other fixed interest securities;
- accounts receivable and payable, which arise directly from the Society’s operations;
- derivatives, being forward foreign currency contracts, to manage currency risks.
It is, and has been throughout the financial year, the Society’s policy that no trading in derivative financial instruments shall be undertaken. Similarly, it is not the Society’s policy to trade in investments (i.e. to speculate and engage in short-term profit taking). All investments are held to generate income to further the Society’s causes and as such are classified as ‘available-for-sale’ or ‘held-to maturity’. Sales do occur however with selected investments which are described in the financial statements as ‘available-for-sale’, when the Society is advised to adjust its portfolio in relation to risk exposure and diversification as advised by its investment portfolio managers.
(c) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: market interest rates (interest rate risk), foreign currency risk and market prices (price risk).
(c)(i) Foreign currency risk management
The Society is exposed to fluctuations in foreign currencies arising from purchase of goods and supply of aid in currencies other than the Society’s functional currency ($AUD).
The carrying amount of the Society's foreign currency denominated monetary assets and monetary liabilities at the reporting date is as follows: |
||||
2017 |
2016 |
|||
Foreign currency |
AUD equivalent |
Foreign currency |
AUD equivalent |
|
$’000 |
$’000 |
$’000 |
$’000 |
|
Assets |
||||
Cash |
||||
USD |
1,413 |
1,803 |
152 |
199 |
Euro |
239 |
357 |
- |
- |
1,652 |
2,160 |
152 |
199 |
Foreign currency sensitivity analysis
The Society is mainly exposed to movements in exchange rates relating to US dollars and Euro. The following table details the Society’s sensitivity to a 10% increase and decrease in the Australian Dollar against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. A positive number indicates an increase in profit or loss and other equity where the Australian Dollar strengthens against the respective currency. For a weakening of the Australian Dollar against the respective currency there would be an equal and opposite impact on the profit and other equity, and the balances below would be negative.
2017 |
2016 |
||
$'000 |
$'000 |
||
Profit or loss |
|||
USD |
180 |
20 |
|
Euro |
36 |
- |
|
(c)(ii) Interest rate risk management The Society is exposed to market interest rate fluctuations on its fixed and variable interest securities, as well as interest bearing borrowings. The Society accepts the risk as normal in relation to fixed interest financial assets, as they are held to generate investment income on unused funds. Interest rate sensitivity analysis The following table summarises how the Society's surplus or deficit and equity would have been affected by changes in interest rates at reporting date. |
Carrying amount |
- 50 basis points Surplus / (deficit) |
- 50 basis points Equity |
+ 100 basis points Surplus / (deficit) |
+ 100 basis points Equity |
|
$’000 |
$’000 |
$’000 |
$’000 |
$'000 |
|
Financial assets |
|||||
Cash and cash equivalents |
199,584 |
(997) |
(997) |
1,995 |
1,995 |
Available-for-sale financial assets |
126,871 |
(634) |
(634) |
1,269 |
1,269 |
Held-to-maturity investment |
9,060 |
(45) |
(45) |
91 |
91 |
Financial liabilities |
|||||
Bank loans - fixed interest rate |
22,240 |
- |
- |
- |
- |
Finance leases |
27,501 |
- |
- |
- |
- |
Total increase / (decrease) |
385,256 |
(1,676) |
(1,676) |
3,355 |
3,355 |
Sensitivity analysis does not apply to Bank loans with fixed Interest Rate. |
|||||
(c)(iii) Price risk Equity price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices, whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. (d) Equity price sensitivity The sensitivity analysis below has been determined based on the exposure to equity price risks at year end. If the equity prices of available-for-sale Australian equities had been 5% higher or lower:
The Society’s sensitivity to equity prices has not changed significantly from the prior year. |
(e) Credit risk management
The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements.
Credit risk for derivative financial instruments arises from the potential failure by counter parties to the contract to meet their obligations.
The Society does not have any material credit risk exposures to any single receivable or group of receivables under financial instruments. The Society’s largest receivable is from the Federal Department of Immigration and Border Protection (DIBP) which constitutes receipts in accordance with agreed terms.
(f) Liquidity risk management
The Society manages liquidity risk by monitoring forecast cash flows and ensuring that adequate liquid funds or unutilised borrowing facilities are maintained.
The following table details the Society’s remaining contractual maturity for its non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Society can be requested to pay. The table includes both interest and principal cash flows.
Non-derivative financial liabilities |
Weighted average effective interest rate |
Less than |
1 - 3 months |
3 months |
1 to 5 years |
5 + years |
Total |
% |
$’000 |
$’000 |
$’000 |
$’000 |
$'000 |
$'000 |
|
Year ended 30 June 2017 |
|||||||
Non-interest bearing |
- |
124,978 |
22,568 |
1,547 |
3,869 |
2,380 |
155,342 |
Finance lease liability |
7.62% |
506 |
1,023 |
7,738 |
18,234 |
- |
27,501 |
Bank loan liability |
8.63% |
429 |
862 |
4,089 |
16,860 |
- |
22,240 |
125,913 |
24,453 |
13,374 |
38,963 |
2,380 |
205,083 |
||
Year ended 30 June 2016 |
|||||||
Non-interest bearing |
- |
125,025 |
42,165 |
1,903 |
4,240 |
2,571 |
175,905 |
Finance lease liability |
7.60% |
470 |
950 |
4,423 |
25,504 |
1,998 |
33,345 |
Bank loan liability |
8.63% |
386 |
806 |
3,751 |
22,239 |
- |
27,182 |
125,881 |
43,921 |
10,077 |
51,983 |
4,569 |
236,432 |
||
The following table details the Society's expected maturity for its non-derivative financial assets. The table below has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where the Society anticipates that the cash flow will occur in a different period. |
|||||||
Non-derivative financial assets |
|||||||
Year ended 30 June 2017 |
|||||||
Non-interest bearing |
- |
127,224 |
- |
- |
- |
- |
127,224 |
Fixed interest rate instruments |
2.64% |
- |
150,000 |
10,693 |
41,765 |
27,713 |
230,171 |
Variable interest rate instruments |
1.54% |
11,088 |
- |
- |
- |
- |
11,088 |
138,312 |
150,000 |
10,693 |
41,765 |
27,713 |
368,483 |
||
Year ended 30 June 2016 |
|||||||
Non-interest bearing |
- |
298,962 |
- |
- |
- |
- |
298,962 |
Fixed interest rate instruments |
3.12% |
- |
56,163 |
3,000 |
5,523 |
- |
64,686 |
Variable interest rate instruments |
1.85% |
8,738 |
- |
- |
- |
- |
8,738 |
307,700 |
56,163 |
3,000 |
5,523 |
- |
372,386 |
Note 26 EVENTS AFTER THE REPORTING PERIOD
There have been no material events after the reporting period.
Note 27 ECONOMIC DEPENDENCY
A significant portion of revenue is received by way of recurrent and capital grants from Commonwealth, State and Territory governments. The current Deed between the NBA and the Society relates to the period 1 July 2016 to 30 June 2025.
Note 28 KEY MANAGEMENT PERSONNEL
The members of the Australian Red Cross Society Board provide their service on a voluntary basis and receive no payment other than reimbursement for reasonable travel and other expenses incurred in connection with their roles. The Blood Service Board comprises executive and non-executive members who are remunerated. Members of the Society Board who also serve as a member of the Blood Service Board or a Blood Service committee are remunerated by the Blood Service.
Details of remuneration of Board Members and Executive Team are outlined in the following table. The following includes payments for short-term employee benefits, post-employement benefits, long-term employee benefits and termination benefits:
Short-term employee benefits |
Post employment benefits |
Long-term |
Termination benefits |
Total |
|
Salaries and fees |
Superannuation contributions |
Long |
|||
$ |
$ |
$ |
$ |
$ |
|
SOCIETY |
|||||
Year ended 30 June 2017 |
|||||
HUMANITARIAN SERVICES |
2,071,110 |
160,585 |
112,518 |
418,387 |
2,762,600 |
BLOOD SERVICE |
3,896,000 |
357,000 |
110,000 |
175,000 |
4,538,000 |
Total compensation |
5,967,110 |
517,585 |
222,518 |
593,387 |
7,300,600 |
Year ended 30 June 2016 |
|||||
HUMANITARIAN SERVICES |
4,024,763 |
304,344 |
90,452 |
437,956 |
4,857,515 |
BLOOD SERVICE |
3,806,000 |
275,000 |
(58,000) |
- |
4,023,000 |
Total compensation |
7,830,763 |
579,344 |
32,452 |
437,956 |
8,880,515 |
* In January 2016, there was a change in the leadership structure of Humanitarian Services. Under the new leadership structure, only the Executive Team was included in key management personnel. |
|||||
For the purposes of the above table, remuneration includes salaries and wages, paid annual leave and paid sick leave, non-monetary benefits (such as medical care, housing, cars and free or subsidised goods or services). Also included in remuneration is an amount relating to long-term employee benefits which have accrued, but not paid, to the employees during the period such as long-service leave. |
Board members |
|
SOCIETY |
BLOOD SERVICE OPERATING DIVISION |
Mr Michael Legge AM (President) |
Mr James Birch AM (Chair) |
Mr Ross Pinney (Deputy President) |
Ms Shelly Park (Chief Executive) |
Ms Jan West AM (Chair of Audit and Risk Committee) |
Mr Nigel Ampherlaw |
Ms Dianne Buckles |
Professor Christopher Baggoley AO (from October 2016) |
Mr Charles Burkitt |
Ms Hannah Crawford (Chair of Audit and Risk Committee) |
Mr John D Dorrian |
Ms Jenni Mack |
The Hon Dr David Hamill AM (to November 2016) |
Associate Professor Larry McNicol |
Ms Lyndal Herbert |
Mr Ross Pinney |
Ms Anne Macarthur OAM |
Professor John Zalcberg OAM |
Mr John Pinney AM |
Ms Fiona Balfour (from May 2017) |
Ms Margaret Piper AM |
|
Ms Pearl Li |
|
Ms Sue Vardon AO |
|
Mr Sam Wong AM (to October 2016) |
|
Ms Wendy Prowse (from October 2016) |
|
Mr Sam Hardjono |
|
Mr James Birch AM |
|
Mr Ian Hamm (from April 2017) |
HUMANITARIAN SERVICES OPERATING DIVISION |
BLOOD SERVICE OPERATING DIVISION |
Executive Team |
Executive Directors |
Ms Judy Slatyer - Chief Executive Officer |
Ms Shelly Park - Chief Executive Officer |
Mr Cameron Power - Chief Financial Officer |
Mr John Brown - Executive Director, Finance |
Ms Jennifer Gibb - Director, Marketing, Fundraising and Communications (to November 2016) |
Ms Jacqui Caulfield - Executive Director, Manufacturing (to July 2016) |
Ms Caroline Sheehan - Acting Director, Engagement & Support (from December 2016 to June 2017) |
Mr Greg Wilkie - Executive Director, Manufacturing (from October 2016) |
Ms Belinda Dimovski - Director, Engagement & Support (from June 2017) |
Ms Frances Guyett - Executive Director, Innovation and Commercial Strategy |
Ms Kerry McGrath - Director, Community Programs |
Mr Philip Nesci - Executive Director, Information and Communications Technology |
Mr Noel Clement - Director, Migration, Emergencies & Movement Relations |
Ms Anne Heyes - Executive Director, People and Culture (to April 2017) |
Mr Chris Steinfort - Director, Human Resources (to December 2016) |
Ms Cath Gillard - Executive Director, People and Culture (from April 2017) |
Ms Elaine Montegriffo - Director, People & Organisational Effectiveness (from November 2016) |
Mr Peter McDonald - Executive Director, Business Improvement |
Mr Peter Walton - Director, International Programs |
Dr Joanne Pink - Executive Director, Clinical Services and Research |
Mr Chris Wheatley - Director, Strategy and Performance |
Ms Janine Wilson - Executive Director, Donor Services |
Ms Penny Harrison - Director, Volunteering (from November 2016) |
Ms Marion Hemphill - General Counsel and Head of Government Relations |
Note 29 AUDITORS' REMUNERATION |
2017 |
2016 |
|
$ |
$ |
||
Auditor of Australian Red Cross |
|||
Audit of financial report |
354,500 |
344,000 |
|
Audit of acquittals in relation to specific purpose grants |
93,630 |
117,740 |
|
Other non audit services¹ |
148,000 |
92,000 |
|
Total Auditor's remuneration |
596,130 |
553,740 |
|
¹Other non-audit services relate to consulting fees for the Blood Service operating division Supplier Management framework. |
Note 30 RELATED PARTY DISCLOSURES
(a) Board members
The Board Members are disclosed in note 28.
(b) Wholly-owned group
In states and territories where the Blood Service operating division is located on Humanitarian Services operating division premises, there are contractual arrangements for the sub-lease of premises between the respective operating units for the sharing of facilities and outgoings. The effect of the above transactions has been eliminated in full in the Society balances.
During the reporting period,net payments of $1.044 million (2016: $1.053 million) transacted between the Blood Service operating division and Humanitarian Services operating division. The transactions largely relate to the Blood Service operating division’s occupancy of premises owned by Humanitarian Services operating division, whereby there are contractual arrangements for the sub-lease of these facilities by the Blood Service. As at 30 June 2017, an aggregate of $0.772 million (2016: $1.502 million) of commitments for minimum lease payments in relation to non-cancellable operating leases are payable to the Society over a 5-year period.
Australian Red Cross is a signatory to the Australian Council for International Aid and Development (ACFID) Code of Coduct and is committed to full adherence to its requirements. The Code aims to improve international development outcomes and increase stakeholder trust by enhancing the transparency and accountability of signatory organisations.
The financial statements have been prepared in accordance with the requirements set out in the ACFID Code of Conduct and should be read in conjunction with the Financial Statements and accompanying notes. Please refer to the ACFID website www.acfid.asn.au for more details.
Income Statement
for the financial year ended 30 June 2017
Humanitarian services |
Society |
Humanitarian services |
Society |
|
2017 |
2017 |
2016 |
2016 |
|
$’000 |
$'000 |
$’000 |
$'000 |
|
REVENUE |
||||
Donations and gifts¹ |
74,760 |
74,760 |
76,901 |
76,901 |
Legacies and bequests |
12,571 |
12,571 |
12,594 |
12,594 |
Grants |
||||
• Department of Foreign Affairs and Trade |
11,883 |
11,883 |
24,358 |
24,358 |
• other Australian |
115,197 |
700,371 |
129,062 |
698,143 |
• other overseas |
4,427 |
4,427 |
5,784 |
5,784 |
Investment income |
3,253 |
11,285 |
3,384 |
11,125 |
Other income |
10,073 |
22,241 |
9,197 |
32,880 |
Retail and commercial activities |
34,016 |
34,016 |
32,247 |
32,247 |
Total revenue |
266,180 |
871,554 |
293,527 |
894,032 |
EXPENDITURE |
||||
International aid and development programs expenditure |
||||
• funds to international programs |
(26,676) |
(26,676) |
(41,728) |
(41,728) |
• program support costs |
(4,700) |
(4,700) |
(3,428) |
(3,428) |
• community education² |
(1,604) |
(1,604) |
(1,561) |
(1,561) |
Domestic programs |
||||
• Blood service |
- |
(595,353) |
- |
(575,904) |
• Migration support |
(45,417) |
(45,417) |
(51,413) |
(51,413) |
• Social inclusion |
(38,993) |
(38,993) |
(38,929) |
(38,929) |
• Community based programs |
(36,069) |
(36,069) |
(37,296) |
(37,296) |
• Disaster and emergency services |
(10,979) |
(10,979) |
(10,186) |
(10,186) |
• Aboriginal & Torres Straight Islander programs |
(7,073) |
(7,073) |
(7,700) |
(7,700) |
• emergency appeals |
(98) |
(98) |
(349) |
(349) |
• other |
(5,214) |
(5,214) |
(4,867) |
(4,867) |
Fundraising costs³ |
||||
• public, government, multilateral and private |
(23,882) |
(23,882) |
(24,204) |
(24,204) |
Retail and commercial activities |
(35,144) |
(35,144) |
(37,122) |
(37,122) |
Accountability and administration |
(39,949) |
(39,949) |
(38,725) |
(38,725) |
Total expenditure |
(275,798) |
(871,151) |
(297,508) |
(873,412) |
(Deficiency)/Excess of revenue over expenditure from continuing operations |
(9,618) |
403 |
(3,981) |
20,620 |
1 During the financial year nil (2016:nil) was recorded as non-monetary donations and gifts. In addition to those goods which are capable of reliable measurement, the organisation has received donated goods for sale in its retail outlets as well as volunteer hours in providing community services. Significant contributions are also received by way of gifts in kind as pro bono support from corporate partners and volunteers. These goods and services are of a nature for which fair value cannot be reasonably determined and have not been recorded in this income statement. There has been no non monetary expenditure included in the income statement. 2 Expenditure incurred for International Humanitarian Law is included in Community education as per ACFID guidelines 3 Fundraising costs include both International and Domestic programs. There are no separately recorded costs incurred for Government, multilateral and private fundraising costs. During the financial year there were no transactions (2016:nil) in the International Political or Religious Adherence Promotion program category. Board Members' declarationThe Board Members declare that: (a) in the Board’s opinion, there are reasonable grounds to believe that the Society will be able to pay its debts as and when they become due and payable; (b) in the Board’s opinion, the attached financial statements and notes thereto are in accordance with the Australian Charities and Not-for-profits Commission Act 2012, including compliance with Australian Accounting Standards and giving a true and fair view of the financial position and performance of the Society and the ACFID financial statements comply with the ACFID Code of Conduct; and (c) the Board has been given signed declarations by the Chief Executive Officer and the Chief Financial Officer regarding the integrity of the financial statements and that the Society’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects. Signed in accordance with a resolution of the Board. On behalf of the Board Michael Legge AM President of the Society Canberra 28 October 2017 |