Maharishi Foundation Australia Limited
A.B.N. 21 615 281 546
ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2019 MAHARISHI FOUNDATION AUSTRALIA LIMITED A.B.N. 21 615 281 546
CONTENTS PAGE NO.
Directors’ Report 2
Lead Auditor’s Independence Declaration 8
Independent Auditor’s Report 9
Directors’ Declaration 11
Statement of Profit or Loss and Other Comprehensive Income 12
Statement of Financial Position 13
Statement of Changes in Equity 14
Statement of Cash Flows 15
Notes to the Financial Statements 16
Page… 1 MAHARISHI FOUNDATION AUSTRALIA LIMITED A.B.N. 21 615 281 546
DIRECTORS’ REPORT
The directors of Maharishi Foundation Australia Ltd (MFA) submit their report and the financial statements for the year ended 31 December 2019, together with the auditor’s report thereon.
CORPORATE INFORMATION
Company Details
Maharishi Foundation Australia Limited is a public company limited by guarantee.
The company was incorporated on 11th October 2016 and has its registered office at 190 Greenhill Road, Parkside SA 5061.
Auditors
LDAssurance Chartered Accountants Level 6 250 Collins Street Melbourne Vic 3000
Bankers
Westpac Banking Corporation Sydney Branch Office 341 George Street Sydney NSW 2000
DIRECTORS
The names and details of Directors of the Company in office during the period are:
James Rogers Badgett Jr, Board Chair: Director for three years; appointed to the Board and elected to MBA (Crummer Graduate Chair of the Board on 14th May 2017; International Trustee (Raja), Global School of Business, Rollins Country of World Peace; Trustee, Maharishi University of Management, USA; College), PhD in Supreme President, Raj Resorts Inc, USA. Political Science (Maharishi Raja Rogers Badgett attended 4 of the 4 director’s meetings held during the year. University of World Peace, Switzerland)
Dr. Timothy Carr, MBBS Chief Executive Officer: Director for four years; appointed Board Chairman in (Syd) October 2016, retired as Chair and appointed as CEO on 14th May 2017; Invincible Australia Director of Health; President, Maharishi AyurVeda Association of Australia. Director of Maharishi School Ltd. Dr. Carr attended all of the 4 director’s meetings held in the year.
Dr. Lawrence Clarke, B Ag Director for four years; appointed to the Board in October 2016; Director of Ec (UNE), Dip Health Maharishi School Ltd; Co-Director of Maharishi Invincibility Centre, Melbourne; (MAV), Dip Training & Director of Maharishi Ayur-Veda Products Pty Ltd; Director of Advanced Assessment, DDA, DSCI Programs Maharishi Vedic College. Dr. Clarke attended all of the 4 director’s meetings held during the year.
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DIRECTORS’ REPORT (Continued)
Mr. Peter Fenwick, BA Director for three years, appointed to the Board on 14th May 2017; Invincible Hons, Dip Ed (Adel), Australia Regional Director for SA & NT; Convenor, Lake George Management Certificate 4 in Real Estate Committee; Australian Ambassador for the Brahmananda Saraswati Trust; Practice Director of Maharishi School Ltd; Managing Director, Fenwick Real Estate Pty Ltd. Mr Fenwick attended 4 of the 4 directors meetings held in the year.
Dr. Bevan Morris, BA, MA Director for three years; appointed to the Board on 14th May 2017; Prime (Cambridge), MSCI, DSCI Minister, Global Country of World Peace; President Emeritus of Maharishi University of Management USA; International President of Maharishi University of Management; One of the most eminent Australian and international scholars and administrators in the field of Maharishi’s Vedic Science, and Consciousness- Based Education. Dr. Morris attended 3 of the 4 director’s meetings held during the year.
PRINCIPAL ACTIVITIES
The principal activities of the company during the course of the financial year remained unchanged. The activities consisted of promoting, supporting the teaching and propagation of Maharishi’s Vedic Science and Technology of Consciousness which includes the Transcendental Meditation program® and TM-Sidhi™ programs.
RESULTS The net amount of profit / (loss) of the company for the financial year was $1,360,555. In 2018 Profit was $314,400
DIVIDENDS Under clause 4.6 of the constitution, the company is not empowered to pay dividends.
REVIEW OF OPERATIONS
Teaching activity by the Certified teachers of the Transcendental Meditation program and the other programs of Maharishi’s Vedic Science and Technologies of Consciousness (teachers) throughout Australia has been sustained at a high level throughout 2019 and this has continued into the first quarter of 2020. The sale of the company’s property in the Blue Mountains resulted in a significant capital gain and this combined with the high level of teaching during the year has resulted in a substantial improvement in the financial result for the company in 2019 Consequently cash reserves and the balance sheet of the company have significantly improved. The Global Marketing Group’s marketing of the companies programs has continued to be successful and this has improved the finances of the Teachers and Centres . The Board acknowledges and congratulates the teachers throughout Australia for their success in delivering the educational programs, which enrich the lives of so many people and the community as a whole.
Subsequent Events:
In accordance with best contemporary practice for educational institutions, Maharishi Foundation Australia Ltd has committed to join the National Redress Scheme. This is a government initiative in response to recommendations made by the Royal Commission into Institutional Responses to Child Sexual Abuse and provides acknowledgement and support for survivors of child sexual abuse.
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DIRECTORS’ REPORT (Continued)
Maharishi School Ltd will also participate in the scheme. Because activities related to the Transcendental Meditation technique along with those related to the Maharishi School were both conducted under the umbrella of Maharishi’s Global Administration through Natural Law Ltd (MGANL Ltd - now known as Maharishi School Ltd) prior to 1 January 2017, MFA agreed to sign a deed of indemnity with Maharishi School Ltd to indemnify it against all liabilities for any potential allegation for past misconduct that may have occurred prior to 1 January 2017.
Since the end of the financial year, the outbreak of COVID-19 has occurred, and from the end of March 2020 all MFA teaching activity ceased. This is expected to have a significant impact on the business operations and cash flows of the teachers and MFA in the 2020 financial year. Due to the uncertainty as to how long the shutdown of teaching will last, the extent of this impact cannot yet be completely determined. However, teachers are able to apply for the Job Keeper payments and with its strong balance sheet and cash position MFA is well positioned to negotiate the shutdown period.
Teaching activities The Company continued to support teaching activities during the year, together with the development and expansion of new educational programs and initiatives, and the management of existing properties in accordance with its constitution. It has continued to promote the core programs of Maharishi’s Vedic Science and Technology of Consciousness and to provide financial and administrative services to the teachers who deliver the courses, including:
• The Transcendental Meditation® program (Developing Self-Management Skills for Maximum Personal Effectiveness) (MVAH 001) • Residence Courses and World Peace Assemblies (MVAH 010, MVAH151) • The Science of Creative Intelligence Course (MVAH 100) • Advanced Techniques of Transcendental Meditation (MVAH 003) • TM-Sidhi™ program (Citizens Invincibility Courses) (MVAH 150) • Maharishi Ayur-Veda® and Maharishi Vedic Approach to Health™ consultations • Maharishi Jyotish™ Courses (MVAH 301) and consultations (MVAH 300) • Maharishi Yagya™ programs • Maharishi Vedic Vibration Technology™ (MVAH 400) • Maharishi Sthapatya Veda™, Maharishi Vastu Architecture™ and Fortune Creating Homes™ • Maharishi Light Technology with Gems™ • Maharishi Aromatherapy™ and VedAroma™ • Maharishi Vedic University Short Courses (MVAH 340,MVAH 350, MVAH 320, etc) • Maharishi Vedic College Courses, including the Diploma of Health (Maharishi Ayur-Veda Health Education Consulting) and the course electives (MVAH 500, MVAH 501, etc) • Other Maharishi Invincibility Centre courses, programs and activities
In terms of revenue generation, the Transcendental Meditation program, the TM-Sidhi program, Advanced Techniques of Transcendental Meditation, Total Knowledge Courses, and World Peace Assemblies, produced the most significant revenue. In addition, $10,204 of donations was received. Total revenue of $3,337,945 was recorded.
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DIRECTORS’ REPORT (Continued)
Delivery of Services The Certified Teachers of the Transcendental Meditation program and the other programs of Maharishi’s Vedic Science and Technologies of Consciousness are trained and certified by Maharishi Vedic University Courses and Consultations (MVU-CC) and are authorised by MVU-CC to deliver its educational programs. MFA provides promotion and financial administration services for Certified Teachers of the Transcendental Meditation program and the other programs of Maharishi’s Vedic Science and Technologies of Consciousness and the Maharishi Vedic Centres and Maharishi Invincibility Centres.
Governor Council Meetings Throughout the year, Governor Council (and sub committee) meetings of teachers throughout Australia, were held to review and decide on matters concerning teaching, marketing and administration. These online meeting occurred fortnightly for most of the year and were constructive, productive and informative and helped to integrate teaching activities around Australia.
Maharishi Invincibility Centres and Maharishi Vedic Centres During 2019 Maharishi Invincibility Centres and Maharishi Vedic Centres [MICs and MVCs] operated in Sydney, Melbourne, Adelaide, Brisbane and Perth. In addition teaching occurred in Canberra, South Coast of NSW, Dubbo and Western NSW Newcastle, Wollongong, Toowoomba, Byron Bay, Hastings, Mornington, Ringwood, Vermont, Toorak, Geelong, Albury, Sunbury, Hobart, Launceston, Darwin, Gold Coast, Maleny and Hackham West
World Peace Assemblies and Meditators Residence Courses In January 2019 an Invincible Australia Assembly was held at Ingleside in Sydney with participants from all States of Australia. The purpose of these assemblies is to increase coherence in the collective consciousness of the Nation through large group practice of the Transcendental Meditation and TM- Sidhi program including Yogic Flying. The effectiveness of this technology of consciousness has been scientifically verified to improve the quality of life in all major indices and create Invincibility for the Nation, as documented in over 40 research studies. Similar courses are also offered from time to time around Australia by local Maharishi Invincibility Centres.
Advanced Techniques of the Transcendental Meditation technique and the TM-Sidhis Course During January 2019 and in December 2019 Vedic Experts from India visited Australia, and provided instruction in Advanced Techniques of the Transcendental Meditation technique and the TM-Sidhs program. Also during the year, an Australian Certified teacher of Advanced Techniques of the Transcendental Meditation technique provided instruction in Queensland, New South Wales, Victoria and South Australia.
Maharishi Vedic Research Institute http://www.MaharishiVedicResearch.com The Maharishi Vedic Research Institute (ACN 601 910 141) conducts conferences and publishes the Journal of Maharishi Vedic Research Institute which includes papers and research on the impact of Maharishi Vedic Science and Technology in the fields of health, education, architecture, therapeutic jurisprudence and social change by researchers from within Australia and abroad, including Dr Tony Nader, the author of Human Physiology the Expression of Veda and the Vedic Literature.
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DIRECTORS’ REPORT (Continued)
Maharishi AyurVeda® Association of Australia The Maharishi AyurVeda Association of Australia (formerly known as the Maharishi Vedic Health Practitioners Association of Australia) is a group of health professionals dedicated to the prevention of disease and the promotion of optimal health through Maharishi AyurVeda. Maharishi AyurVeda offers a comprehensive mind/body approach to health care based on the timeless wisdom of Ayurveda restored in its completeness by Maharishi Mahesh Yogi. MAAA comprises doctors trained in Maharishi AyurVeda and graduates from the Diploma of Health (Maharishi AyurVeda Health Education Consulting) who provide health education consultations and seminars.
Promotions and websites There are now MIC/MVC websites for Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra and Tasmania, and the National TM.org.au site. These sites and various associated strategies, employed around new media, have contributed to growth in all locations. A national website and marketing plan developed by the Global Marketing Group in conjunction with the Australian Governors has significantly increased activity.
Maharishi School, www.maharishischool.vic.edu.au Maharishi School ABN 30 001 342 301 is an independent primary school located in Melbourne which provides Consciousness-Based Education to unfold the full potential of its students and to realise the highest ideals of education. It continues to be one of the Company’s primary objectives to establish Maharishi Schools and Colleges for high school and tertiary students. This is augmented by initiatives to provide Consciousness-Based Education programs in existing schools and colleges.
Activities for Ladies and joint marketing agreement with GMDO Global Mother Divine Organisation – Australia Ltd, ABN 91 133 636 889, (GMDO) is a non-profit, educational organisation dedicated to the delivery of courses and activities of Maharishi’s Vedic Science and Technology of Consciousness specifically for ladies and girls throughout Australia. Lady Governors have the option to direct their teaching revenue and associated data through GMDO. Maharishi Foundation Australia Ltd and GMDO Ltd have a joint contract with the Global Marketing Group for the provision of marketing services for both organisations.
Maharishi Ayur-Veda Products Proprietary Limited www.maproducts.com.au Maharishi Ayur-Veda Products Pty Ltd., a separate legal entity (ABN 31 076 196 248), specialises in supplying the wholesale and retail market, including meditators and MFA Centres, with Maharishi Ayur-Vedic health food products, books and materials.
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DIRECTORS’ REPORT (Continued)
Maharishi Vedic College Maharishi Vedic College continued to provide modules and electives of the Diploma of Health through the Maharishi Vedic Centres in 2019. Maharishi Vedic College Lake George Campus which is situated on a 520 ha freehold property on the foreshore of Lake George in South Australia offers residential Consciousness-Based educational programs for mature aged students to develop higher states of consciousness for the individual and to increase coherence in collective consciousness of the nation through the study and practical technologies of Maharishi Vedic Science. These educational activities are conducted under the direction of Maharishi Vedic University, The Netherlands and continued throughout 2019 with the additional attendance of a small number of casual overseas students. The facility at Lake George is also the operational base, staff accommodation precinct and registered office of Maharishi Vedic Organic Agriculture Australia Ltd (ABN 50 131 940 442). which continued to manage and maintain the land and buildings on behalf of Maharishi Foundation Australia Ltd.
Blue Mountains Property, Katoomba New South Wales During 2019 Maharishi Foundation Australia Ltd sold its freehold property of 305.6 ha overlooking the Megalong Valley near Katoomba in the Blue Mountains, west of Sydney.
Change in Office Bearers There was no change in office bearers during the 2019 financial year.
ROUNDING OF AMOUNTS Amounts in the Directors’ report and the financial report have been rounded off to the nearest dollar.
INDEMNIFICATION OF OFFICERS AND AUDITORS During or since the financial year the company has not indemnified or made a relevant agreement to indemnify an officer or auditor of the company or of any related body corporate against a liability incurred as such an officer or auditor. In addition, the company has not paid, or agreed to pay, a premium in respect of a contract insuring against a liability incurred by an officer or auditor.
DIRECTORS’ BENEFITS Neither during nor since the period ended, has any director of the company received or become entitled to receive a benefit because of a contract that the director or a firm of which the director is a member or an entity in which the director has a substantial financial interest made with the company or an entity that the company controlled, or a body corporate that was related to the company, when the contract was made or when the director received or became entitled to receive the benefit other than remuneration included in Note 20 to the accounts.
Signed in accordance with a resolution of the directors. On behalf of the Directors
Dated 29th of April 2020 at Melbourne, Victoria
Page… 7 LDAssurance CHARTERED ACCOUNTANTS LDAssurance Pty Ltd Level 6, 250 Collins Street Melbourne Victoria 3000 TELEPHONE +61 3 9988 2090 www.ldassurance.com.au ACN 146 147 202
LEAD AUDITOR’S INDEPENDENCE DECLARATION UNDER SUBDIVISION 60-C OF THE AUSTRALIAN CHARITIES AND NOT-FOR-PROFIT COMMISSION ACT 2012
To the Directors of Maharishi Foundation Australia Limited:
I declare that, to the best of my knowledge and belief, in relation to the audit for the year ended 31 December 2019 there have been:
(i) no contraventions of the auditor independence requirements as set out in the Australian Charities and Not-For-Profit Commission Act 2012 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
LDAssurance Chartered Accountants
Stephen O’Kane Partner
Dated this 30th day of April 2020 250 Collins Street, Melbourne.
Page… 8 Liability limited by a scheme approved under Professional Standards Legislation. LDAssurance CHARTERED ACCOUNTANTS LDAssurance Pty Ltd Level 6, 250 Collins Street Melbourne Victoria 3000 TELEPHONE +61 3 9988 2090 www.ldassurance.com.au ACN 146 147 202
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MAHARISHI FOUNDATION AUSTRALIA LIMITED
Report on the Audit of the Financial Report
Qualified Opinion
We have audited the accompanying financial report of Maharishi Foundation Australia Limited (‘the Company’), which comprises the statement of financial position as at 31 December 2019, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors’ declaration of the Company.
In our opinion, except for the effects of the matter described in the Basis of Qualified Opinion section of our report, the accompanying financial report of Maharishi Foundation Australia Limited is in accordance with Division 60 of the Australian Charities and Not-For-Profit Commission Act 2012, including: (a) giving a true and fair view of the Company’s financial position as at 31 December 2019 and of its performance for the year ended on that date; and (b) complying with Australian Accounting Standards – Reduced Disclosure Requirements and Division 60 of the Australian Charities and Not-For-Profit Commission Regulation 2013.
Basis of Qualified Opinion
Cash receipts are a significant source of revenue for the Company. The Company has determined that it is impracticable to establish controls over the collection of cash receipts prior to their entry into the financial records of the Company. Accordingly, as the evidence available to us regarding revenue was not sufficient, and our audit procedures with respect to cash receipts had to be restricted to the amounts recorded in the financial statements. We were therefore unable to determine whether any adjustments might have been necessary in respect of amounts disclosed in the statement of profit and loss and other comprehensive income, the statement of financial position, statement of changes in equity and statement of cash flows.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described as in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Company in accordance with Division 60 of the Australian Charities and Not-for-profits Commission Act 2012 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (‘the Code’) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Responsibility of the Directors for the Financial Report
The Directors are responsible for the preparation of the financial report that gives a true and fair view and have determined that the basis of preparation described in Note 1 to the financial report is appropriate to meet the requirements of the Australian Accounting Standards and Division 60 of the Australian Charities and Not-for- profits Commission Act 2012. The Directors’ responsibility also includes such internal control as it determines is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
Page… 9 Liability limited by a scheme approved under Professional Standards Legislation. LDAssurance CHARTERED ACCOUNTANTS
Responsibility of the Directors for the Financial Report (continued)
In preparing the financial report, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for overseeing the Company’s financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors. • Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
LDAssurance Chartered Accountants
Stephen O’Kane Partner Dated this 30th day of April 2020 250 Collins Street, Melbourne.
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DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 31 DECEMBER 2019
The Directors of Maharishi Foundation Australia Limited declare that in their opinion:
a) The attached financial statements and notes thereto comply with Australian Accounting Standards – Reduced Disclosure Requirements
b) The attached financial statements and notes thereto give a true and fair view of the financial position and performance of the company
c) The attached financial statements and notes satisfy the requirements of the Australian Charities and Not-For-Profit Commission Act 2012 and the Australian Charities and Not-For-Profit Commission Regulation 2013.
d) There are reasonable grounds to believe the company will be able to pay its debts as and when they become due and payable
Signed in accordance with a resolution of the directors made pursuant to Section 60.15 of the Australian Charities and Not-For-Profit Commission Regulation 2013.
On behalf of the directors:
Dated: 29 April 2020 Melbourne, Victoria
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STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019
Note 2019 2018 $ $
Revenue 3 3,337,945 2,166,273
Expenses: Course expenses 1,146,755 1,229,205 Teacher and consultation expenses 690,831 568,404 Depreciation and amortisation expenses 100,363 18,396 Other expenses from ordinary activities 39,441 35,868
Total expenses 4 1,977,390 1,851,873
Net profit / (loss) 1,360,555 314,400
Revaluation reserve movement (375,000) -
Total comprehensive result after reserve movement 985,555 314,400
This statement should be read in conjunction with the notes to the financial statements.
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STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019
Note 2019 2018 $ $ Current assets Cash assets 22(a) 3,394,658 907,825 Receivables 5 92,208 85,130 Inventory 6 7,227 7,231 Other assets 7 21,390 13,880 Total current assets 3,515,483 1,014,066
Non-current assets Financial assets 8 1,280 1,280 Right-of-use assets 9 48,378 - Property, plant & equipment 10 2,529,725 4,049,889 Total non-current assets 2,579,383 4,051,169
Total assets 6,094,866 5,065,235
Current liabilities Payables 11 128,690 109,710 Fees in advance 12 56,021 84,602 Lease liabilities 13 53,677 - Total current liabilities 238,388 194,312
Non-current liabilities Payables 11 - - Total non-current liabilities - -
Total liabilities 238,388 194,312
Net assets 5,856,478 4,870,923
Equity Reserves 15 2,346,504 3,537,697 Retained surplus 14 3,509,974 1,333,226 Total Equity 5,856,478 4,870,923
This statement should be read in conjunction with the notes to the financial statements.
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STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2019
Note 2019 2018 $ $ Reserves Balance at beginning of the year 3,537,697 3,537,697 Transfer to retained surplus (816,193) - Revaluation reserve movement (375,000) - Balance at the end of the year 2,346,504 3,537,697
Retained surplus Balance at beginning of the year 1,333,226 1,018,826 Transfer from reserves 816,193 - Profit / (loss) for the year 1,360,555 314,400 Balance at the end of the year 3,509,974 1,333,226
Total Equity Reserves 15 2,346,504 3,537,697 Retained surplus 14 3,509,974 1,333,226 Total Equity 5,856,478 4,870,923
This statement should be read in conjunction with the notes to the financial statements.
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STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2019
Note 2019 2018 $ $ Cash flows from operating activities Receipts from customers 2,250,951 2,368,570 Payments to suppliers (1,934,286) (1,832,451) Interest received 3,911 1,391 Net GST paid (141,118) (144,263)
Net cash (used in) / provided by operating activities 22(b) 179,458 393,247
Cash flows from investing activities Proceeds of sale of property 2,403,340 - Payments for property, plant & equipment (14,302) (13,396)
Net cash provided by / (used in) investing activities 2,389,038 (13,396)
Cash flows from financing activities Payments for leases (81,663) -
Net cash used in financing activities (81,663) -
Net increase / (decrease) in cash held 2,486,833 379,851 Cash at the beginning of the financial year 907,825 527,974
Cash at the end of the financial year 22(a) 3,394,658 907,825
This statement should be read in conjunction with the notes to the financial statements.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards – Reduced Disclosure Requirements and the Australian Charities and Not-For-Profit Commission Act 2012.
The financial report has been prepared on the basis of historical costs and does not take into account changing money values or, except where stated, current valuations of non-current assets. The accounting policies have been consistently applied, unless stated otherwise.
(b) Taxation
No income tax is payable by the company as it has been granted tax exempt status under Section 50 of the Income Tax Assessment Act 1997.
(c) Revenue
Revenue is recognised when the amount of the revenue can be measured reliably, it is probable that economic benefits associated with the transaction will flow to the Company and specific criteria relating to the type of revenue as noted below, has been satisfied.
Conference Revenue Conference revenue has been recorded at the time of receipt and no accrual has been applied as the majority of events occurred in the current year. In the previous year conference revenue was apportioned over the period that the conference related to the WPA Sydney Conference ran from the 27th of December 2018 to the 15th of January 2019.
Course Revenue Course revenue is recognised upon a receipt basis for the period they relate to.
Donations The Company, in common with most organisations dependent upon contributions, is unable to establish control over voluntary donations prior to their initial entry into the accounting records, therefore they are recorded on the basis of cash received.
Interest Revenue
Interest is recognised using the effective interest method and recorded upon receipt.
(d) Property, plant and equipment
All depreciable assets having limited useful lives are systematically depreciated over their useful life to the company to reflect the consumption of the service potential embodied in those assets.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Property, plant and equipment (continued)
Depreciation Depreciation is calculated using the prime cost method except for plant and equipment where depreciation is calculated on a reducing balance basis to write off the net cost or revalued amount of each item of property, plant and equipment other than land. The depreciation rates used for each class of asset are as follows:
Class Rate Plant & Equipment 5 - 30% Buildings 2%
Depreciation rates are consistent with the previous year.
Revaluation Where a non-current asset is revalued to its current fair value, revaluation increments are credited directly to the asset revaluation reserve. To the extent that a revaluation decrement reverses a revaluation increment previously credited to, and still included in the balance of the asset revaluation reserve, the decrement is debited directly to that reserve. Otherwise the decrement is recognised as an expense in the operating statement.
Directors’ valuations are generally made by comparisons to the properties council rates notice or independent estate agent’s advice.
Non-current assets are written down to recoverable amounts where the carrying value of any non- current asset exceeds recoverable amount. In determining the recoverable amount of non-current assets, the expected net cash flows have not been discounted to their present value.
Acquisitions The cost method of accounting is used for all acquisitions of assets. Cost is determined as the fair value of the assets given as consideration plus costs incidental to their acquisition. A capitalisation threshold level of $500 has been applied to the recognition of assets. Assets that are below the threshold level are treated as expenditure in the year of purchase.
The cost of assets constructed including site developments, include the cost of materials and direct labour. Directly attributed overheads and other incidental costs are also capitalised to the asset.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(e) Inventories
Inventories, being finished goods, are valued at the lower of cost or net realisable value.
(f) Payables
Trade payables and other accounts payables are recognised when the company becomes obliged to make future payments resulting from the purchase of goods and services.
(g) Goods and Services Tax (GST)
A Goods and Services Taxation system (GST) was introduced from 1 July 2000. Maharishi Foundation Australia pays GST on the majority of its purchases and claims a refund from the Taxation office on a quarterly basis. Some product sales are GST free but other services attract GST. Revenue and expense is stated net of the amount of GST. Cash flows are included in the statement of cash flows on a net basis. GST components of cash flows are classified as operating cash flows.
(h) Leases
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
(i) Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset
Right-of-use assets are amortised on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter.
Page… 18 MAHARISHI FOUNDATION AUSTRALIA LIMITED A.B.N. 21 615 281 546
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
2. SEGMENT REPORTING
The company operates within the teaching industry, effecting the propagation of knowledge of the principles of the Science of Creative Intelligence, Maharishi Vedic Science and its practical aspect, the Maharishi Transcendental Meditation® Program. The company operates in the geographical area of Australia.
Business segments The entity is organised into divisions by product and service activity, based on the entity’s management reporting system.
It is not practical to present information on the basis of business segments.
Geographical segments It is not practical to present information on the basis of geographic segments.
The entity is managed on a national basis and operates in five main geographical areas:
• New South Wales and Australian Capital Territory • Queensland Victoria and Tasmania • Northern Territory • South Australia • Western Australia
Page… 19 MAHARISHI FOUNDATION AUSTRALIA LIMITED A.B.N. 21 615 281 546
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
2019 2018 3. REVENUE $ $
Revenue – Operating activities Sales revenue: Course revenue 2,007,454 2,046,343 Accommodation, catering, functions & rentals 29,310 33,330 Product sales 14,351 14,165
Revenue – Non operating activities Interest 3,911 1,391 Donations 10,204 26,253 Gain on sale of property, plant & equipment 1,248,588 - Donated assets 12,945 - Sundry revenue 11,182 44,791 Total revenue 3,337,945 2,166,273
4. EXPENSES Course expenses 1,159,688 1,058,698 Services & physical building 120,320 200,678 Accommodation, catering & functions 536 1,637 Product & literature expenses 21,466 32,324 Administration, finance & legal 174,436 156,172 Lease interest expense 4,258 - Marketing and promotion 357,581 300,455 Doubtful debt (14,384) 33,280 Donations given 38,825 33,647 Depreciation and amortisation of: Buildings 10,605 10,821 Plant and equipment 7,054 7,575 Right-of-use assets 82,704 - Travel 13,685 13,998 Other 616 2,588 Total expenses 1,977,390 1,851,873
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
2019 2018 $ $ 5. RECEIVABLES Course debtors 111,104 118,410 Provision for doubtful debts (18,896) (33,280) 92,208 85,130
6. INVENTORY Books, CDs and products 7,227 7,231 7,227 7,231
7. OTHER ASSETS Deposits 9,800 7,650 Prepayments 11,590 6,230 21,390 13,880
8. FINANCIAL ASSETS Shares in other entities - unlisted 1,280 1,280 1,280 1,280
9. RIGHT-OF-USE ASSETS At cost 131,082 - Accumulated amortisation (82,704) - 48,378 -
Page… 21 MAHARISHI FOUNDATION AUSTRALIA LIMITED A.B.N. 21 615 281 546
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
2019 2018 $ $ 10. PROPERTY, PLANT & EQUIPMENT
Freehold Land: At directors’ valuation dated 1/1/2017 1,910,000 3,395,000 1,910,000 3,395,000
Buildings: At directors’ valuation dated 1/1/2017 600,000 600,000 Accumulated depreciation (80,368) (69,763) 519,632 530,237
Plant & Equipment: At cost 182,100 171,477 Accumulated depreciation (100,166) (102,087) 81,934 69,390
Land Improvements At cost 18,159 55,262 Accumulated depreciation - - 18,159 55,262
2,529,725 4,049,889
Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current period are set out below.
2019 Land Building Plant & Land Total $ $ Equip’t Improv $ $ $ Opening balance 3,395,000 530,237 69,390 55,262 4,049,889 Additions - - 27,247 - 27,247 Depreciation - (10,605) (7,054) - (17,659) Disposal and Loss on disposal (1,485,000) - (7,649) (37,103) (1,529,752) Closing balance 1,910,000 519,632 81,934 18,159 2,529,725
2018 Land Building Plant & Land Total $ $ Equip’t Improv $ $ $ Opening balance 3,395,000 541,058 63,569 55,262 4,054,889 Additions - - 13,396 - 13,396 Depreciation - (10,821) (7,575) - (18,396) Loss on disposal - - - - - Closing balance 3,395,000 530,237 69,390 55,262 4,049,889
Page… 22 MAHARISHI FOUNDATION AUSTRALIA LIMITED A.B.N. 21 615 281 546
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
2019 2018 $ $ 11. PAYABLES Creditors 84,059 62,478 Net GST 44,631 47,232 128,690 109,710
12. FEES IN ADVANCE Fees in advance 56,021 84,602 56,021 84,602
13. LEASE LIABILITY Current 53,677 - Non-Current - - 53,677 -
14. RETAINED SURPLUS
Balance at beginning of financial year 1,333,226 1,018,826 Transfer from Capital profits reserve 816,193 - Net profit / (loss) 1,360,555 314,400 Balance at end of financial year 3,509,974 1,333,226
Page… 23 MAHARISHI FOUNDATION AUSTRALIA LIMITED A.B.N. 21 615 281 546
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
2019 2018 15. RESERVES $ $ (a) Reserves comprise of:
Capital profits reserve Balance at beginning of financial year 816,193 816,193 Transfer to retained surplus (816,193) - Balance at end of financial year - 816,193
Asset revaluation reserve Balance at beginning of financial year 2,721,504 2,721,504 Revaluation decrease (375,000) - Balance at end of financial year 2,346,504 2,721,504
Total Reserves 2,346,504 3,537,697
(b) Nature and purpose of reserves
Capital profits reserve The capital profits reserve was used to accumulate realised capital profits. However as the reserve is not set aside for a specific purpose it has been transferred to retained surplus.
Asset revaluation reserve The asset revaluation reserve is used to record increments and decrements on the revaluation of land and buildings.
16. COMMITMENTS FOR EXPENDITURE
Commitments under finance leases: Not later than 1 year - 32,740 Later than 1 year but not later than 5 years - - - 32,740
17. REMUNERATION OF AUDITOR Audit of the financial report 9,000 9,000
18. LIABILITY OF MEMBERS
The liability of members is limited to a maximum of $2 each. The number of members and certified teachers as at 31 December 2019 is 60.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
19. RELATED PARTY TRANSACTIONS a) Details in relation to remuneration and benefits of directors are disclosed in note 21 to the financial statements. b) Transactions with Maharishi School Ltd: Maharishi School Ltd has directors in common with the company. The company has paid $3,001 (2018 - $4,242) to Maharishi School Ltd as fees for the use of premises, licences, secretarial, telephone and postage services The company has received $10,270 (2018 - $3,507) from Maharishi School Ltd as fees for Transcendental Meditation services. These transactions are on normal commercial terms and conditions
20. CONTINGENT ASSETS AND LIABILITIES
In the 2001 and 2007 financial years the company received donations from associated overseas entities of $542,085 and $1,725,000. The donations carry a restricted purpose for the purchase of land and buildings in Lake George and Parkside, South Australia. In the event that the properties are disposed, these donations must be refunded to the overseas entity on the settlement date.
In 2017 a bequest to Maharishi Foundation Australia Ltd, formerly Maharishi's Global Administration Through Natural Law Limited, of $30,000 was received to be used, wherever possible, for the benefit of Australian Aid for Cambodia Fund in connection with Maharishi Vedic University.
21. DIRECTORS’ REMUNERATION The Directors of Maharishi Foundation Limited during the year were: Dr Bevan Morris Dr Lawrence Clarke Raja Rogers Badgett Dr Tim Carr Mr Peter Fenwick
2019 2018 $ $ Income / reimbursements received, or due and receivable by directors of the company. 20,042 12,779
Page… 25 MAHARISHI FOUNDATION AUSTRALIA LIMITED A.B.N. 21 615 281 546
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
22. NOTES TO THE STATEMENT OF CASH FLOWS
For the purposes of the statement of cash flows, cash includes cash on hand and at banks net of bank overdrafts. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows: 2019 2018 a) Reconciliation of cash $ $
Cash 3,394,658 907,825
b) Reconciliation of cash flows from operations:
Net profit / (loss) for the year 1,360,555 314,400
Non-cash flows in profit / (loss): Depreciation and amortisation 100,363 18,396 Gain on sale of property, plant & equipment (1,248,588) - Donated assets (12,945) - Lease interest charges 4,258 -
Changes in assets and liabilities: (Increase) / decrease in prepayments and deposits (7,510) (6,395) (Increase)/ decrease in receivables (7,078) (46,699) (Increase) / decrease in inventory 4 (421) Increase / (decrease) in creditors 18,980 29,364 Increase / (decrease) in fees in advance (28,581) 84,602 Net cash provided by / (used) in operating activities 179,458 393,247
23. EVENTS AFTER BALANCE DATE
Since the end of the financial year, the outbreak of COVID-19 has occurred, and this is expected to have an impact on the business operations and cashflows of the entity in the current financial year. This is expected to have a significant impact on the business operations and cash flows of the teachers and MFA in the 2020 financial year, as teaching temporarily ceased in March 2020.
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