AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED
ACN 100 902 921
A COMPANY LIMITED BY GUARANTEE
FINANCIAL REPORT
For the year ended 31 December 2004
AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED
ACN 100 902 921
CONTENTS PAGE
CONTENTS PAGE
DIRECTORS’ REPORT 1 - 5
INDEPENDENT AUDIT REPORT 6
DIRECTORS’ DECLARATION 7
STATEMENT OF FINANCIAL PERFORMANCE 8
STATEMENT OF FINANCIAL POSITION 9
STATEMENT OF CASH FLOWS 10
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 11 - 15
AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED
ACN 100 902 921
DIRECTORS’ REPORT
Your directors present their report on the company for the year ended 31 December 2004.
The directors have been in office since the start of the financial year to the date of this report unless otherwise stated. The names of the directors are:-
Michael Alfred Chaney, AO Gerald Edward Fitzgerald, AC, QC Elaine Henry, OAM Professor Fiona Juliet Stanley, AC Sir Gustav Nossal, AC, CBE Peter Edward Mason, AM Paul John Kelly (appointed 5 January 2004) Dr Jeffrey Allan Harmer (appointed 6 December 2004)
The net profit of the company for the financial year after provision for income tax was:-
Year Ended 31 December 2004
Operating profit/(loss) after income tax ($66,738)
The company is a company limited by guarantee. The company has a financial year ending 31 December. The company was incorporated in Australia on 13 June 2002.
The company was established for the charitable purpose of facilitating, co-ordinating and supporting the development of knowledge through scientific research and the effective use of that knowledge which is or may prove to be, of value to Australia by enhancing the well being and the life chances of children and young people.
No significant change in the nature of these activities occurred during the year.
No matters or circumstances have arisen since the end of the financial year which significantly effect the operations of the company, the results of those operations or the state of affairs of the company in future financial years.
Likely developments in the operations of the company and the expected results of those operations in future financial years have not been included in this report.
The company’s operations are not regulated by any environmental regulation under a law of the Commonwealth or of a State or Territory.
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AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED
ACN 100 902 921
DIRECTORS’ REPORT (Continued)
Information on Directors
Mr Michael Alfred Chaney, AO Michael Chaney is Managing Director of Wesfarmers, a major diversified Australian public company headquartered in Perth. The group employs around 29,000 people across Australia and New Zealand. Mr Chaney is also a director of BHP Billiton Limited, National Australia Bank Limited and Gresham Partners Holdings Limited. Mr Chaney is a member of the Business Council of Australia and the Council of the National Gallery of Australia and a Director of the Centre for Independent Studies. Mr Chaney has a Bachelor of Science and a Master of Business Administration from the University of Western Australia. Mr Chaney completed the Advance Management Program at Harvard University Business School in 1992 and has also been awarded an Honorary Doctorate of Laws from the University of Western Australia.
Mr Gerald Edward Fitzgerald, AC, QC Former NSW Appeal Court Judge Tony Fitzgerald has a distinguished career in the law. Mr Fitzgerald also served as a Judge on the Federal Court of Australia and Supreme Court of Australian Capital Territory, and was the inaugural President of the Queensland Court of Appeal. Mr Fitzgerald’s name is synonymous with the inquiry into official corruption in Queensland that he chaired from 1987 – 1989. Mr Fitzgerald also chaired inquiries into the conservation, management and use of Fraser Island and the Great Sandy Region, and conducted the Cape York Justice Study in 2001. Mr Fitzgerald chairs the Law and Justice Foundation of NSW and is a Professional Fellow at the University of Melbourne Law School. Mr Fitzgerald is currently engaged as a mediator and arbitrator in Sydney and Brisbane in the areas of commercial, employment, insurance, media, property and public law.
Ms Elaine Henry, OAM Elaine Henry is Chief Executive Officer of The Smith Family. Prior to this appointment she was Executive Director of the NSW Cancer Council for 12 years from 1985-1997. In May 2000 Ms Henry was awarded the Cancer Council’s Inaugural Award for Professional Excellence in Service Delivery. She was a non-executive Director of AXA Trustees from 1998 – 2001. Ms Henry has served on a wealth of committees at the state, national and international levels and currently Chairs the Commonwealth’s Stronger Families & Communities Partnership, is a Member of the Welfare Reform Consultative Forum and the Prime Minister’s Community Business Partnership. She is on the board of the Australian Research Alliance for Children and Youth, is a member of The Alcoa Research Centre for Stronger Communities Board, Curtin University of Technology, the Children and Education Research Centre Advisory Board, University of Newcastle, the Vice Chancellor’s Advisory Board, University of Wollongong and is a Trustee of the National Breast Cancer Foundation. She is also Chair of the Interim Board of the Not for Profit Council of Australia. In February 2000 Ms Henry was selected as one of 50 Australian women to be profiled in the 2000 Businesswomen’s Hall of Fame and in August 2001 was named one of 30 Australian Financial Review BOSS True Leaders.
Professor Fiona Juliet Stanley, AC Professor Fiona Stanley is the founding Director of the Telethon Institute for Child Health Research in Perth. The multi-disciplinary Institute, established in 1990, researches prevention of major childhood illnesses and disabilities. Professor Stanley is on the editorial board of three international journals, is a member of the Prime Minister’s Science, Engineering and Innovation Council and the Western Australian Premier’s Science Council. Professor Stanley’s main areas of research are analytical studies investigating the causes and prevention of birth defects and major neurological disorders particularly the cerebral palsies; the causes of lifelong consequences of low birth weight and other pre and postnatal problems; patterns of maternal and child health in Aboriginal and Caucasian populations; strategies to enhance health and wellbeing in populations. Professor Stanley was named Australian of the Year in 2003. 2
AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED
ACN 100 902 921
DIRECTORS’ REPORT (Continued)
Information on Directors (continued)
Sir Gustav Nossal, AC, CBE Sir Gustav Nossal is an eminent scientist who is world renowned for his ground-breaking research into immunology. He initially worked as a researcher and then Director of the Walter and Eliza Hall Institute of Medical Research over a 30 year period from 1965 to 1996 and was Professor of Medical Biology at the University of Melbourne. Sir Gustav has chaired numerous national and international committees relating to science and health including the International Union of Immunological Societies, the World Health Organisation’s Vaccines and Biologicals Program, the Strategic Advisory Council of the Bill and Melinda Gates Children’s Vaccine Program, the Australian Academy of Science, and the Victorian Health Promotion Foundation. He is the former Deputy Chairman of the Council for Aboriginal Reconciliation and is currently Chairman of The Felton Bequests Committee, Chairman of the Advisory Council of The Global Foundation and a Principal of Foursight Associates Pty Ltd. Sir Gustav has received numerous honours for his work from countries around the world. He was Australian of the Year in 2000.
Mr Peter Edward Mason, AM Peter Mason has more than 30 years experience in investment banking in Australia and overseas. He is currently Chairman of the JP Morgan Chase Bank Group in Australia, a director of the Mayne Group Limited and a director of AMP Limited. He spent 15 years with the Schroders group where he was Chairman and Chief Executive of Schroders Australia Limited and Group Managing Director with responsibility for Schroders investment banking businesses in the Asia Pacific region. As a former director of the Lloyds Banking group, he was responsible for the group’s investment banking businesses in Australia and the United Kingdom. Mr Mason is a former director of a number of public companies and educational and charitable institutions, including 12 years as Deputy Chairman of the Children’s Hospital in Sydney and eight years as Chairman of the Children’s Hospital Fund. He is a member of the Council of the University of New South Wales and Chairman of the Council’s Finance Committee.
Mr Paul John Kelly Paul Kelly is currently Editor-at-Large for the Australian newspaper having previously held the positions of National Affairs Editor (1985-91) and Editor-in-Chief (1991-96). He has worked as a political correspondent and newspaper and television commentator over the past 30 years reporting on five Australian Governments and international affairs in America, Europe and Asia. Mr Kelly is the author of a number of successful books on Australian politics and the Australian way of life and wrote and presented a television documentary ‘100 Years – The Australian Story’ which was screened by the ABC in 2001 to mark the Centenary of Federation. He is a former member of the Australia- Indonesia Institute Board, a former director of the Victor Chang Cardiac Research Institute, and is currently Adjunct Professor of Journalism at the University of Queensland and a participant in the Australia-America Leadership Dialogue. In 2002, he was a visiting fellow at the Kennedy School of Government and a visiting lecturer at the Weatherhead Centre for International Affairs at Harvard University.
Dr Jeffrey Allan Harmer Dr Jeffrey Harmer is currently Secretary of the Department of Family and Community Services. Dr Harmer began his career in the Federal Public Service in early 1978 following 5 years as a doctoral scholar and tutor at the University of NSW.
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AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED
ACN 100 902 921
DIRECTORS’ REPORT (Continued)
Information on Directors (continued)
Dr Jeffrey Harmer (continued) After a range of policy analysis and advising positions in the Departments of Housing, Social Security and Finance, Dr Harmer was promoted into the Senior Executive Service in early 1985. Since then he has occupied a range of executive positions across a range of Commonwealth Departments spending some seven years at the senior executive level in the Department of Community Services and Health. In 1994 he was promoted to the Deputy Secretary position in the Department of Housing and Regional Development and in 1996 he was recruited to the position of Deputy Secretary of the Department of Social Security. He was appointed Managing Director of the Health Insurance Commission in April 1998. In March 2003 Dr Harmer was appointed Secretary of the Department of Education, Science and Training. He was appointed Secretary of the Department of Family and Community Services in October 2004. Dr Harmer has a keen interest in management, leadership and organisational change and development.
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AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED
ACN 100 902 921
DIRECTORS’ REPORT (Continued)
During the year to 31 December 2004, a total of five (5) Directors meetings were held which were attended by each director holding office as follows:-
Number of Meetings Meetings Attended
Mr Michael Alfred Chaney, AO 5 5 Mr Gerald Edward Fitzgerald, AC, QC 5 4 Ms Elaine Henry, OAM 5 5 Professor Fiona Juliet Stanley 5 5 Sir Gustav Nossal, AC, CBE 5 4 Mr Peter Mason, AM 5 4 Mr Paul Kelly 5 4 Dr Jeff Harmer - -
The company is a company limited by guarantee and the liability of members is limited to an amount not exceeding $1. Accordingly no dividends were paid or options over shares granted.
The directors do not receive any remuneration or other benefits as the positions are honorary in nature.
No indemnities have been given or insurance premiums paid during or since the end of the financial year for any person who is or has been an officer or auditor of the company.
No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.
The company was not a party to any such proceedings during the year.
Signed in accordance with a resolution of directors at Perth on 24 March 2005
______Michael Alfred Chaney
Director
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6 AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED
ACN 100 902 921
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of Australian Research Alliance for Children and Youth Limited, we state that:
1. the financial statements and notes, as set out on pages 8 to 15, are in accordance with the Corporations Act 2001:
(a) comply with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) give a true and fair view of the financial position as at 31 December 2004 and of the performance for the year ended on that date of the company;
2. in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of directors at Perth on 24 March 2005
______Michael Alfred Chaney
Director
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AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED
STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 DECEMBER 2004
Notes 2004 2003 $ $
Revenues from ordinary activities 3 1,134,796 1,019,151
Employee benefits expense (332,894) (221,370)
Consultants expense (309,909) (126,399)
Travel expense (84,373) (49,863)
Communications expense (62,405) (23,835)
Premises outgoings expense (23,145) (13,164)
Information technology expense (13,076) (6,668)
Insurance expense (8,594) (4,393)
Depreciation expense (2,362) (932)
Other expenses from ordinary activities 4 (364,776) (26,117)
Profit (Loss) from ordinary activities (66,738) 546,410
Net Profit/(Loss) attributable to members of Australian Research Alliance for Children and Youth Limited (66,738) 546,410
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AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2004
Notes 2004 2003 $ $ CURRENT ASSETS
Cash assets 575,814 562,664 Receivables 5 16,712 30,064 Other 6 57,492 9,488
TOTAL CURRENT ASSETS 650,018 602,216
NON CURRENT ASSETS
Property, plant and equipment 7 13,436 12,718
TOTAL NON CURRENT ASSETS 13,436 12,718
TOTAL ASSETS 663,454 614,934
CURRENT LIABILITIES
Payables 8 170,201 38,561 Provisions 9 13,581 29,963
TOTAL CURRENT LIABILITIES 183,782 68,524
NET ASSETS 479,672 546,410
EQUITY
Retained profits 10 479,672 546,410
TOTAL EQUITY 479,672 546,410
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AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2004
Notes 2004 2003 $ $
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from funders, gifts and other 1,084,796 1,019,151 income Payments to suppliers and employees (1,068,566) (442,837) Net cash provided by operating activities 12(a) 16,230 576,314
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for property, plant & equipment (3,080) (13,650) Net cash used in investing activities (3,080) (13,650)
Net increase in cash held 13,150 562,664 Cash at 1 January 2004 562,664 - Cash at 31 December 2004 12(b) 575,814 562,664
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AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED NOTES TO AND FORMING PART OF THE ACCOUNTS
1. CORPORATE INFORMATION
The company is established for the charitable purpose of facilitating, co-ordinating and supporting the development of knowledge through scientific research and the effective use of that knowledge which is or may prove to be of value to Australia by enhancing the well being and the life chances of children and young people.
The company is a company limited by guarantee and the liability of members is limited to an amount not exceeding $1. The directors may impose an annual subscription on any class of membership from time to time and the member within a class which is subject to an annual subscription is liable to pay the subscription.
2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Comparatives
Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures.
Basis of Accounting
The financial report is a general purpose financial report which has been prepared in accordance with the requirements of the Corporations Act 2001, including applicable Accounting Standards. Other mandatory professional reporting requirements (Urgent Issues Group Consensus Views) have also been complied with.
The financial report has been prepared in accordance with the historical cost convention.
The following is a summary of the material accounting policies adopted by the company in the preparation of the financial report.
Plant & Equipment
Depreciation is provided on all fixed assets on a straight line basis. The depreciation rate used for plant and equipment is 7.5% - 33% pa.
Income Tax
Under Section 50-5 of the Income Tax Assessment Act 1997, the income of the company is exempt from income tax.
Employee Benefits
Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits expected to be settled within one year have been measured at the amount expected to be paid when the liability is settled plus related on-costs. Other employee benefits payable later than one year have been measured at the present value of the estimated future outflows to be made for those benefits. 2004 2003 $ $
3. REVENUE FROM ORDINARY ACTIVITIES
Receipts from funders 838,545 647,131 Receipts from gifts and other income 296,251 372,020 Total revenues from ordinary activities 1,134,796 1,019,151
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AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED NOTES TO AND FORMING PART OF THE ACCOUNTS (Cont’d)
2004 2003 $ $
4. PROFIT/LOSS FROM ORDINARY ACTIVITIES
Profit/(Loss) from ordinary activities before income tax has been determined after:
Other expenses from ordinary activities - Services expense 296,127 15,000 - Recruitment expense 55,394 - - General expense 13,255 11,117 364,776 26,117
5. RECEIVABLES
Other debtors 1,167 17,018 GST refundable 15,545 13,046 16,712 30,064
6. OTHER CURRENT ASSETS
Prepaid insurance 7,492 9,488 Accrued Income 50,000 - 57,492 9,488
7. PROPERTY, PLANT AND EQUIPMENT
At cost 16,730 13,650 Less accumulated depreciation (3,294) (932) 13,436 12,718
Movements in carrying amounts: Plant and equipment Balance at beginning of year 12,718 - Additions 3,080 13,650 Depreciation expense (2,362) (932) Carrying amount at the end of year 13,436 12,718
8. PAYABLES
Trade creditors 35,511 30,217 ABN withholding tax payable - 264 PAYG tax payable 5,724 6,474 Accrued expenses 128,966 1,606 170,201 38,561
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AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED NOTES TO AND FORMING PART OF THE ACCOUNTS (Cont’d)
2004 2003 $ $
9. PROVISIONS
Employee entitlements 13,581 29,963
Number of employees at year end 4 7
10. EQUITY
Retained profits at the beginning of the financial year 546,410 - Net Profit/(Loss) for the year (66,738) 546,410 Retained profits at the end of financial year 479,672 546,410
11. CAPITAL AND LEASING COMMITMENTS
Operating lease commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements
Payable - not later than one year 4,219 4,219 - later than one year but not later than five years 5,089 9,308 9,308 13,527
12. STATEMENT OF CASH FLOWS
(a) Reconciliation of the net profit/(loss) to the net cash
Profit/(Loss) from ordinary activities (66,738) 546,410 Non cash flows in profit/(loss) from ordinary activities
Depreciation 2,362 932
Changes in assets and liabilities Decrease/(Increase) in receivables 13,352 (30,064) Increase in other assets (48,004) (9,488) Increase in payables 131,640 38,561 Decrease/(Increase) in provisions (16,382) 29,963 NET CASH FLOW FROM OPERATING ACTIVITIES 16,230 576,314
(b) Reconciliation of cash balances:
Cash balance comprises: Cash at bank 575,814 562,664 Cash balance as per statement of cash flows 575,814 562,664
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AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED NOTES TO AND FORMING PART OF THE ACCOUNTS (Cont’d)
13. FINANCIAL INSTRUMENTS
(a) Interest rate risk
The company’s exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities, both recognised and unrecognised at the reporting date, are as follows:-
Amount Exposed to Amount Not Exposed to Floating Interest Rate Floating Interest Rate 2004 2003 2004 2003 $ $ $ $
Financial assets Cash 575,814 - - 562,664 Receivables and other assets - - 56,712 30,064 Total financial assets 575,814 - 56,712 592,728
Financial liabilities Trade and sundry creditors - - 170,201 38,561 Total financial liabilities - - 170,201 38,561
The effective interest rate was in the range of 0.01% to 5.24%.
(b) Credit risk
The maximum exposure to credit risk at balance date to recognised financial assets is the carrying amount, as disclosed in the statement of financial position and notes to the financial statements.
(c) Net fair values
The net fair value of financial assets and financial liabilities approximates their carrying value.
14. SEGMENT REPORTING
Australian Research Alliance for Children and Youth Limited operates within Australia for the charitable purpose of facilitating, co-ordinating and supporting the development of knowledge through scientific research and the effective use of that knowledge, which is or may prove to be, of value to Australia by enhancing the wellbeing and life chances of children and young people.
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AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED NOTES TO AND FORMING PART OF THE ACCOUNTS (Cont’d)
15. RELATED PARTY TRANSACTIONS
The following were directors of the company during the period:
Mr Michael Alfred Chaney, AO Mr Gerald Edward Fitzgerald, AC, QC Ms Elaine Henry, OAM Prof Fiona Juliet Stanley, AC Sir Gustav Nossal, AC , CBE Mr Peter Mason, AM Mr Paul Kelly Dr Jeffrey Harmer (appointed 6 December 2004)
The Directors do not receive any remuneration or other benefits as the positions are honorary in nature.
During the year, payments of $166,028 were made for the provision of chief executive officer services by the Telethon Institute for Child Health Research, an organisation at which Prof Fiona Stanley is a director.
16. EVENTS SUBSEQUENT TO BALANCE DATE
There have been no material post balance date events or transactions which could affect the financial position or performance of the company.
17. IMPACT OF ADOPTING AASB EQUIVALENTS TO IASB STANDARDS
Australian Research Alliance for Children and Youth Limited (ARACY) has commenced transitioning its accounting policies and financial reporting from current Australian Standards to Australian equivalents of International Financial Reporting Standards (IFRS). The company will be allocating internal resources to perform diagnostics and conduct impact assessments to isolate key areas that will be impacted by the transition to IFRS. As ARACY has a 31 December year end, priority has been given to considering the preparation of an opening balance sheet in accordance with AASB equivalents to IFRS as at 1 January 2004. This will form the basis of accounting for Australian equivalents of IFRS in the future, and is required when ARACY prepares its first fully IFRS compliant financial report for the year ending 31 December 2005.
At this point we have not identified any key areas where accounting policies will significantly change and have an impact on the financial report of ARACY.
18. COMPANY DETAILS
The registered office and principal place of business of the company is:
Level 13, Dumas House 2 Havelock Street West Perth WA 6005
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