Mcclelland Sculpture Park+Gallery Annual Report 2018-19 CONTENTS OUR MISSION, VISION and VALUES 2

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McClelland Sculpture Park+Gallery Annual Report 2018-19 CONTENTS OUR MISSION, VISION AND VALUES 2

CHAIRMAN’S REPORT 4

DIRECTOR’S REPORT 6

TREASURER’S REPORT 7

ARTISTIC PROGRAM 8

EDUCATION PROGRAM 12

PHILANTHROPY & SPONSORSHIP 14

STAFF & BOARD OF TRUSTEES 17

AUDITED ACCOUNTS 18

Cover image: McClelland Sculpture Park+Gallery. Photo Mark Chew. OUR MISSION

To promote public understanding, education and the experience of sculpture and contemporary artistic practice in an Australian bushland environment.

OUR VISION

To be an internationally recognised open air art institution that celebrates the value of creative practice through its connection to the natural environment.

WHAT WE VALUE

• Artistic rigour in all projects and learning programs; • Respect for Australia’s First Nations People, their country and waters; • Space and time for contemplation beyond our everyday life; • The opportunity to promote and embed positive experiences and access for all people, irrespective of age, mobility and ethnicity, and through valuing our cultural difference; • Ethical innovation that promotes considered and high quality experiences across our four central tenets: culture, education, environment and community; • Financial success that continues to see McClelland flourish in a prudent and sustainable way, reflecting McClelland’s significant place as a large cultural asset of great value in Australian art history.

WHAT WE OFFER

A unique, discovery based experience of iconic Australian sculpture in an open air environment within a safe and welcoming setting for all people.

Opposite: Phil Price, Tree of life 2012, McClelland Southern Way Commission 2012.

2 3 CHAIRMAN’S REPORT

In this fast moving, material world, the services and offering of McClelland Gallery and Sculpture Park have never been so important. In the words of former Premier Dick Hamer in 1972: “What is the profit, they say, in steadily expanding and improving man’s supply of material things, if the things of the spirit are dimmed, and the very environment in which we live threatened?”

McClelland stands, surrounded by the urban sprawl that is greater Melbourne, as a beautiful, peaceful natural place, providing valued experiences that enhance and expand on matters of the spirit. McClelland is a place for reflection, that celebrates creativity and innovation, and promotes art and education, for people of all ages from all places, to come and enjoy.

We have had wonderful year and have welcomed over 175,000 visitors to the park and the gallery. Our exhibition program, listed in the Director’s report, has been outstanding and brilliantly curated to much acclaim.

We are thrilled to announce that Baillieu Myer AC and Lyn Williams AM have become Patrons of McClelland. They have each been enormous supporters throughout the life of McClelland. We also welcomed Colin Simpson, Foundation Principal of Richmond High School to the board, with his strong background in art and education.

We are particularly grateful to our hardworking staff and volunteers for another successful year, and are sorry to lose our esteemed Education Officer, Imogen Good after 9 years of outstanding service, including supervising the building of new Education Pavilion. We were also very saddened to lose our long term Weekend Manager Joan Crowther and greatly miss her warm and welcoming smile.

The highlight of the year is no doubt the marvellous opening of the Sarah & Baillieu Myer Education Pavilion and Graham Terrace. This exceptional facility opens a whole new chapter for educational programs at McClelland, and a wonderful function space for hire. The opening was a memorable event attended by a collection of loyal long-term supporters, artists, local dignitaries and members of the local community. Rupert Myer AO and Michelle Graham spoke with great eloquence and poignancy on behalf of their families, as did Martin Carlson OAM, Chairman of The Hugh D.T. Williamson Foundation.

Image: Solid Light: Josef Stanislaw Ostoja-Kotkowski exhibition installation view. Photo Christian Capurro. 4 On behalf of the Board, I would like to thank Lisa Byrne, our Director, for a very busy and productive year and congratulate her on all she has achieved, with the support of our small, highly competent team across the gallery, sculpture park and cafe at McClelland. Special thanks to Trish Delves, our volunteer who operates our lovely gift shop, for her amazing contribution to the operations at McClelland.

Thanks also to the involvement and commitment of each member of our very collaborative board who have worked hard to oversee the activities of McClelland as well as refine and consolidate the organisation’s mission and vision. The Board has engaged KPMG to prepare a sustainable business model for the organisation for the future, which will form the basis of a new strategic plan to be prepared in 2020.

Expanding the membership and the McClelland Circle, and providing four special experiences to Circle members has been a priority this year. We thank and welcome all new members and encourage all supporters to consider Circle Membership. McClelland relies on our generous donors to be able to open our doors and beautiful bush grounds, and provide high quality art exhibitions, educational and recreational services to the public, and we particularly thank all those who have generously donated throughout the year.

McClelland is a prized cultural asset to the Frankston City municipality and the people of Victoria. As our Minister for Creative Industries Michael Foley recently recognised: “Our creative industries bring significant social, cultural and economic benefits to Victoria. They’re at the heart of our identity, our prized liveability and our appeal to visitors.”

We very much look forward to your visits throughout the coming year!

Susie Hamson, Chairman

Image: The Sarah & Baillieu Myer Education Pavilion opening, McClelland Sculpture Park+Gallery. Photo Andy Drewitt. 5 DIRECTOR’S REPORT

2018-2019 at McClelland was a triumphant year across all that McClelland did to promote public understanding, education and the experience of sculpture and contemporary artistic practice in an Australian bushland environment, in striving to be an internationally recognised open air art institution that celebrates the value of creative practice through its connection to the natural environment.

With the notable completion of the long aspired for Sarah & Baillieu Myer Education Pavilion in February 2019, designed by Kerstin Thompson Architects and fully funded by Sarah & Baillieu Myer together with the Yulgilbar Foundation, The Sidney Myer Foundation, Aidan Graham Family Trust, the Calvert Jones Foundation and The Hugh D.T. Williamson Foundation, this new pavilion will provide much needed indoor space for teaching and learning, as well as provide a significant after-hours event venue in the outer South East, attracting greater and new audiences to McClelland into the future.

The exhibition program included a range of solo and group exhibitions that reflect McClelland’s commitment to the promotion and understanding of contemporary and modern spatial practice. McClelland continues to be a free cultural asset for its visitors. Our program in 2018-19 included the exhibition Atlas of Memory: (re)visualising Gordon Ford’s natural Australian garden, with researcher Annette Warner, Black Paintings by Sanné Mestrom, Splash: Contemporary Watercolour Acquisitive Award, and Solid Light, the first major showing of Josef Stanislaw Ostoja Kotkowski in Australia with Pia van Gelder’s fabulous new work Psychic Synth. Our program received numerous reviews in both general and scholarly journals, blogs and the press.

Our education programs for schools in the park were once again booked out over the warmer spring and summer months. Public programs were reactivated with the opening of the pavilion and a whole new suite of annual programming has commenced bringing new audiences to McClelland and importantly the appreciation and understanding of art, sculpture and our unique sculpture offer here at McClelland.

McClelland’s significant sculpture commissioning partnership with Plenary Group realised the development of a new permanent major outdoor sculpture, as part of the Western Roads Upgrade Project, for the Major Projects Department of the Victorian State Government. This will be completed in mid-2020. Our corporate partners grew in 2018-19 to include several increased commitments and new partnerships. We are delighted to see what these new relationships will bring to us into the future.

My sincere thanks to the Board of Trustees, Patrons, and all the staff at McClelland for their ongoing enthusiasm and energy, and to all our supporters, especially artists with whom we had the great privilege to work over the last financial year.

Lisa Byrne, Director

Image: Fiona McMonagle, The park at the end of my road 2016, watercolour animated video. Collection of McClelland. Splash Contemporary Watercolour Award 2018 Highly Commended. 6 TREASURER’S REPORT

While we continue to see challenging financial times, 2019 delivered a year of steady improvement for the McClelland Group. The key focus of Trustees and management has been to build our financial sustainability over the long term. The opening of the Sarah & Baillieu Myer Education Pavilion was another step forward, expanding McClelland’s capacity to enhance its educational programmes to the community as well as increase our revenue generating capacity through the use of the new centre as a unique function centre. In addition, 2019 saw the upgrade of our financial reporting software which has enabled improved management and monitoring of our financial resources, better performance reporting as well as improved financial controls and decision making.

McClelland runs a very tight ship with respect to staffing and day to day operations. Despite careful budgeting and management the financial performance for the year shows a modest loss, reflecting the cost pressures of rising energy and operating costs, as well as the continued challenge around maintaining financial support. Cost control remains very tight and is carefully monitored, and pleasingly the café is generating a modest profit and the exhibition programme is seeing record numbers of visitors to the gallery and our sculpture parklands.

The key to improved financial success is ongoing support from the philanthropic sector, public donation as well as government funding and the wonderful donor and public support is much appreciated. However, like most organisations in the arts sector, operational funding remains a key challenge and focus for McClelland to ensure we continue our arts programmes for the community and remain the home of sculpture in Australia. The Trustees and management team are working hard to maintain and build the funding support across all sectors to ensure McClelland remains at the forefront of arts institutions in Victoria and maintains its unique place as Australia’s premier outdoor Sculpture Park and Gallery.

Mike Kendall, Treasurer

Image: Stephen Killick, The Big Coin 1986, silver, paper, tin, acrylic, oil paint, 50.0 x 60.0 cm. Collection of McClelland. Donated by Bruce Parncutt AO through the Australian Government’s Cultural Gifts Program.

7 ARTISTIC PROGRAM

Sanné Mestrom: Black Paintings Atlas of Memory: (re)visualising Gordon Ford’s natural Australian garden 29 July - 11 November 2018

Splash: McClelland Contemporary Watercolour Award 25 November 2018 – 17 March 2019

Solid Light: Josef Stanislaw Ostoja-Kotkowski / Pia Van Gelder: Psychic Synth II 1 April – 14 July 2019

McClelland’s exhibition program has focused on cross-cultural engagement and migration histories, new media, critically investigating our relationship with the environment, and supporting contemporary arts practice.

Annette Warner presented her current research into the iconic practice of Victorian landscape designer Gordon Ford, creating a unique deep mapping of Ford’s practice. The Atlas of Memory (re)visualised Ford’s natural Australian garden as a collection of archives gathered over the last five years. The resulting exhibition was an arrangement of historical material gleaned from Ford’s collection with additional content from collaborators and friends drawing upon techniques from the fine arts, fieldwork and landscape practice.

Complementing this exhibition was a series of Sanné Mestrom’s Black Paintings, made from undyed unspun wool mounted on steel frames and derived from a series of minimal abstract paintings by the American painter Frank Stella from the 1960s. Mestrom’s series celebrates the rough texture and comforting qualities of wool and the associated notions of weaving as a feminine craft. Stella’s canvases were re-posed by Mestrom as endearing sculptural objects and installations, complemented by a series of gouache paintings.

Image: Solid Light: Josef Stanislaw Ostoja-Kotkowski exhibition installation view. Photo Christian Capurro.

8 The inaugural $30,000 Splash: McClelland Contemporary Watercolour Award was established with funds from the Fornari Bequest to showcase Australian watercolour artists. The acquisitive triennial award is granted for an outstanding original art work in the medium of watercolour, and aims to promote artistic excellence and to support contemporary artists while expanding McClelland’s high quality collection for the benefit of the local community and Mornington Peninsula region. Artists included were: Lee Bethel, Kate Beynon, Jacquie Blight, James Boissett, Mitchel Brannan, Leah Bullen, Chris Casali, Michelle Cawthorn, Carla Cescon, Glen Clarke, Greg Creek, Du Chonggang, Anne Edmonds, Belinda Fox, Rosi Griffin, David Hurwitz, Dee Jackson, GG Jolliffe, Sonja Karl, Dominika Keller, Waratah Lahy, Duncan Lannan, Tania Mason, Maxine Leigh McKee, Fiona McMonagle, Jennifer Mills, Claudia Nicholson, Hubert Pareroultja, John Pastoriza-Piñol, Jan Pittman, Rebeccah Power, Annette Raff, Annika Romeyn, Steve Salo, Sangeeta Sandrasegar, Andrew Seward, Nicola Smith, Tang Ying, Ebony Truscott, Michelle Ussher, Elke Varga.

Jennifer Mills was awarded the $30,000 award for her work, In the echo chamber (WARNING NUEAO, Brendan 1976-78) 2018, judged by Linda Michael, independent curator and editor. Fiona McMonagle’s animated video work, The park at the end of my road 2016, was selected for the $10,000 highly commended work, judged by Samantha Comte, Curator, The Ian Potter Museum of Art, University of Melbourne.

The exhibition Solid Light: Josef Stanislaw Ostoja-Kotkowski was popular with all ages and received excellent reviews and attendance. The catalogue, generously supported by the Gordon Darling Foundation, has sold well and generated much interest among other curators, artists and institutions. This was the first monograph on Ostoja-Kotkowski’s work and the first major exhibition of his ground-breaking sculptural practice.

COMMISSIONS

The 2018 Southern Way McClelland Commission, Love Flower by John Meade with Emily Karanikolopoulos, began fabrication and is scheduled for installation on Cranbourne Rd in October 2019. This will replace Gregor Kregar’s Reflective Lullaby, affectionately known as the ‘chrome gnome’. The Western Roads Upgrade Commission was managed by McClelland in partnership with Plenary, along with further bids for public art infrastructure projects. This major commission sought applications from artists with a strong connection to Melbourne’s Western suburbs, and will be a major statement in contemporary Australian sculpture. These initiatives consolidate McClelland’s key involvement in public art in Australia, already evidenced by our collection of Centre 5 artists such as Inge King and Lenton Parr.

Above left: Solid Light: Josef Stanislaw Ostoja-Kotkowski exhibition catalogue cover. Above right: John Meade and Emily Karanikolopoulos’s Love Flower in fabrication at Shapeshift’s Indonesian factory. 9 COLLECTION

2018-19 saw the acquisition of a number of key works for the McClelland collection, including an exquisite bronze Pear by George Baldessin, a stunning suite of Benjamin Armstrong linocut prints, a series of sculptures made with natural materials by Lisa Waup, and a body of nineteen tapestries by Sanné Mestrom:

Adrian PAGE Four Columns; natural forms and Revelation 2008 Donated by Irene Barberis through the Australian Government’s Cultural Gifts Program

Inge KING Awakening (Maquette II) late 1980s Donated by Irene Sutton through the Australian Government’s Cultural Gifts Program

Sanné MESTROM Black paintings 2014-2018 (21 works total) 2 works purchased through the Elisabeth Murdoch Sculpture Fund 19 donated by the artist through the Australian Government’s Cultural Gifts Program

Norma REDPATH Paessaggio Caryatide (Maquette) 1980 Purchased through the Elisabeth Murdoch Sculpture Fund

Benjamin ARMSTRONG Invisible Stories: Meditations on Port Essington 2018 (11 works) Purchased through the Fornari bequest

Stephen KILLICK The big coin 1986 Donated by Bruce Parncutt AO through the Australian Government’s Cultural Gifts Program

Simeon NELSON French Curve no 4 1998 Donated by Bruce Parncutt AO through the Australian Government’s Cultural Gifts Program

Lisa WAUP Ancestors 2018 (series of four works) Purchased through the Elisabeth Murdoch Sculpture Fund

Image: Sanné Mestrom, Black painting III 2014 (detail), unspun undyed woollen tapestry, steel, 200 x 250 cm. Courtesy the artist and Sullivan+Strumpf, Sydney. Photo Christian Capurro. 10 Yvonne KENDALL About artichokes and other hearts 2005 Donated by Michael Buxton through the Australian Government’s Cultural Gifts Program

Robert JACKS Untitled (violin) 1996 Gift of Julienne Jacks

Fiona McMONAGLE The park at the end of my road 2016 Splash McClelland Contemporary Watercolour Award 2018 Highly Commended

Jennifer MILLS In the echo chamber (WARNING NUEAO, Brendan 1976-78) 2018 Splash McClelland Contemporary Watercolour Award 2018

Updating of the catalogue database continues to make our collection more accessible and documentation more thorough. A second curatorial intern from Melbourne University’s Masters program, Trish Butcher, has been assisting with this process. A number of McClelland’s works were loaned to important exhibitions, including Patricia Piccinini & Joy Hester: Through love at TarraWarra Museum of Art, and Melbourne Modern: European art & design at RMIT since 1945 at RMIT Gallery.

McClelland’s storage areas were consolidated, and outdoor works currently on long-term loan have been identified, with a view to returning these to their owners to allow more space in the park for upcoming commissions and acquisitions. Major conservation work was completed on Peter Corlett’s Tarax Play Sculpture 1969, which entailed repainting in consultation with the artist and the National Gallery of Victoria.

LOANS

A number of works from McClelland’s collection were loaned for major exhibitions at other institutions, expanding the accessibility and reach of the collection. These include: George BALDESSIN, 1 pear (single large bronze pear) 2009 - Baldessin / Whiteley: Parallel Visions, National Gallery of Victoria, 31 August 2018 – 28 January 2019; Janet LAURENCE, Forensic sublime (Crimes against the landscape series: Styx Forest) 2008 - Janet Laurence: After Nature, Museum of Contemporary Art Australia, 1 March – 10 June 2019; Patricia PICCININI, Doubting Thomas 2008 - Patricia Piccinini and Joy Hester: Through love, TarraWarra Museum of Art, 24 November 2018 to 11 March 2019; Vincas JOMANTAS, Landing Object II 1971; Teisutis ZIKARAS, Mother and child c. 1960; Teisutis ZIKARAS, The Bride 1965 (cast 2008); Sanné MESTROM, Black painting IV 2018; Sanné MESTROM, Black painting V 2018 - Melbourne Modern: European art and design at RMIT since 1945, RMIT Gallery, 20 June – 17 August 2019.

Image left: Adrian Page, Four Columns; natural forms and revelation 2008. Collection of McClelland. Donated by Irene Barberis through the Australian Government’s Cultural Gifts Program, 2019. Photo Christian Capurro. Image right: Jennifer Mills, In the echo chamber (WARNING NUEAO, Brendan 1976-78) 2018. Collection of McClelland. Splash McClelland Contemporary Watercolour Award 2018. Image courtesy the artist. 11 EDUCATION PROGRAM

Early Years Programming Kindergartens and early learning centre groups greatly enjoy visiting McClelland. Tours for this age group respond to the sculptures in the park with activities incorporating movement and stories. Students gain language and communication skills by sharing ideas about art and the way in which art is made, while their time in the park helps in the development of spatial and mathematical skills.

Primary Schools Primary school students are invited to identify and interpret visual cues, share their thoughts, and use these discussions as a group to construct meaning and develop the idea that art is a visual language for reading and interpretation. Workshops further develop these skills by encouraging students to tell a story or share an idea through their visual art. Primary school workshops often generate responses in the students to ideas relating to our humanity, climate change and world conflict.

Secondary Schools As students advance through their secondary education and their studies become more specific, visits to McClelland intentionally focus on interpreting and finding meaning in art, developing specific art terminology as well as learning about the materials and processes used by artists. At McClelland we run specific programs for VCE studio art students. As part of their assessment, students are expected to write in detail about the way in which galleries operate, best practices for storing and caring for art works, the role of various gallery staff members, and exhibition development, design and layout.

McClelland supports a number of schools by presenting awards and speaking at annual art shows, presentations and events. This engagement helps solidify the importance of art to the wider school community and supports emerging artists in schools in the development of their creative potential.

In 2018-19, 2831 students and 750 teachers, carers and parents booked in to visit McClelland. Other school groups visit without notification.

Image: School Holiday Prgram 2019.

12 Yarrabah School Archi-Loom project with The Slow Art Collective Over seven weeks during term 2 of 2019, McClelland worked with the Yarrabah School and the Slow Art Collective artists Chaco Kato and Dylan Martorell on the creation of two Archi-Loom installations. Yarrabah is a Specialist School that caters for students with intellectual, physical and/or multiple disabilities. Yarrabah’s purpose is to maximise student potential by providing an individualised safe learning environment that promotes active learning, encourages adventure, independence and self-esteem. This project was made possible thanks to Creative Victoria’s Creative Learning Partnerships.

School Holiday Programs Our school holiday programs include enjoyable studio-based workshops with children, where we focus on learning practical art making skills related to current exhibitions or sculptures in the park. Our family sculpture making workshops continue to be popular over summer. These workshops encourage families to work together to create sculptures from discarded objects and are run free of charge to enable greater participation.

Over the summer school holiday period, we again partnered with the National Gallery of Victoria to run the NGV Kids on Tour program. These programs are held outdoors, and are very well received by the local community, as large numbers of children and families participate. To coincide with the Splash exhibition over summer, we also held two very successful watercolour workshops. In autumn we ran our first workshop with 100 Story Building using the sculpture park as the inspiration for creating narratives and story writing.

Nature Play Week Nature Play week is a statewide initiative held during April to encourage families and children to enjoy the outdoors. This year children were able to explore organic sculptural and architectural forms and space by creating huts inspired by the Aboriginal mia-mia with sticks, fallen branches, bark and rocks, and discover patterns and textures in nature using the French frottage technique, taking rubbings from trees and leaves in the park to create a collage.

Image: Yarrabah School Archi-Loom project with The Slow Art Collective.

13 PHILANTHROPY & SPONSORSHIP

Throughout 2018-19, McClelland’s generous partners, sponsors, donors and supporters have enabled us to provide a high level of service to our visitors across all aspects of our operations.

We gratefully acknowledge the support of:

Creative Victoria Frankston City Council The Balnaves Foundation The Gordon Darling Foundation Crown Resorts and The Packer Family Foundation The Elisabeth Murdoch Sculpture Fund The Fornari Bequest Plenary Group International Art Services Haymes Paint Elgee Park Vineyard Mornington Peninsula Brewery

We are also indebted to the dedicated volunteers who support us in all our daily operations, the gallery guides and colleagues from the arts industry who have willingly Opposite: Annette Warner, Atlas participated in our public programs and supported our of Memory: (re)visualising Gordon exhibitions. Ford’s natural Australian garden, installation views. Photo Christian Capurro.

Image: Ken Unsworth, Annulus 2007. Collection of McClelland. Commissioned by the Elisabeth Murdoch Sculpture Foundation in memory of Ann Miller (1938-2005). Image Mark Chew.

14 Image: Annette Warner, Atlas of Memory: (re)visualising Gordon Ford’s natural Australian garden, installation views. Photo Christian Capurro.

15 16

16 STAFF BOARD OF TRUSTEES

LISA BYRNE: DIRECTOR SUSIE HAMSON: CHAIRMAN

IAN CAIL: FACILITIES & GROUNDS MANAGER CAMILLA GRAVES: DEPUTY CHAIRMAN

ANTHONY CHRISTIE: HEAD CHEF MICHAEL KENDALL: TREASURER

IMOGEN GOOD: EDUCATION & SPECIAL JOHN CALVERT-JONES AM PROJECTS MANAGER (UNTIL 16 JUNE 2019) STEPHEN CHARLES AO, QC

CAROLYN HANSEN: CARETAKER JONATHAN CLEMENTS

AARON HAZELTON: ASSISTANT CHEF JULIE KANTOR (UNTIL APRIL 2019) LISA ROET SAMANTHA HULL: APPRENTICE/ 1ST YR CHEF COLIN SIMPSON RACHEL ISAAC:WEEKEND FRONT OF HOUSE OFFICER JOHN YOUNG

SIMON LAWRIE: THE BALNAVES CURATOR OF AUSTRALIAN SCULPTURE

SHIREEN LONGLEY: PAYROLL & HR COORDINATOR

DEREK LYALL: MCCLELLAND CAFÉ MANAGER

SUSIE RAVEN: CURATOR OF PROGRAMS

ESTHER RAWORTH: FRONT OF HOUSE COORDINATOR

Opposite: Norma Redpath, Paesaggio Cariatide 1980, bronze maquette, 19.6 x 32.5 x 5.4 cm. Collection of McClelland. Image courtesy Charles Nodrum Gallery. 17

McCLELLAND SCULPTURE LTD ACN 082 448 262

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2019

McCLELLAND SCULPTURE LTD ACN 082 448 262

DIRECTORS’ REPORT

The Directors of McClelland Sculpture Ltd submit herewith the financial report of the Company for the year ended 30 June 2019.

Directors

The names of the Directors in office during the year and to the date of this report are:

Susie Hamson (Chairman) Mike Kendall Camilla Graves (Deputy Chairman) Lisa Byrne

All Directors were in office for the full year unless stated.

Principal Activities

The principal activity of the Company during the financial year was operating the McClelland Sculpture Park & Gallery.

No significant changes in the nature of the Company’s activity occurred during the financial year.

Operating Results

The net profit before Donations to Estate of A.M. McClelland amounted to $850,789 (2018: net loss $2,523).

The net loss after Donations to Estate of A.M. McClelland amounted to $41,233 (2018: net loss $570,705).

Review of Operations

During the year, the Directors of McClelland Sculpture Ltd resolved to donate significant Art and Sculpture Collection items to the Estate of A.M. McClelland, totalling $892,022 (2018: $568,182). The Estate of A.M. McClelland is the owner of the McClelland Group Art and Sculpture Collection.

The Company’s donation of $892,022 (2018: $568,182), to the Estate of A.M. McClelland, was the main contributor to the significant net operating loss. Also, contributing to the Company’s net operating loss this year was the finalisation of the Company’s restructure and transformation programme.

Other than the matters described above, it is the opinion of the Directors that the results of the Company’s operations during the year were not substantially affected by any other item, transaction or event of a material and unusual nature.

Dividends Paid or Recommended

No dividends can be paid, as there is no share capital.

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McCLELLAND SCULPTURE LTD ACN 082 448 262

DIRECTORS’ REPORT

Significant Changes in State of Affairs

No significant change in the state of affairs of the Company occurred during the financial year.

Events after the Reporting Period

No matters or circumstances have arisen since the end of the financial year, which significantly affected or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in financial years subsequent to the financial year ended 30 June 2019.

Likely Developments

No information is included on the likely developments in the operations of the Company and the expected results of those operations as it is the opinion of the Directors of the Company that this information would prejudice the interests of the Company if included in this report.

Meetings of Directors

During the financial year, four meetings of Directors were held. Attendances by each director during the year were as follows:

Meetings Number of Meetings Attended held whilst a Director Susie Hamson 4 4 Mike Kendall 4 4 Camilla Graves 4 4 Lisa Byrne 4 4

Members’ Guarantee

The Company is a Company limited by guarantee. If the Company is wound up, the constitution states that each member is required to contribute a maximum of $50 each towards meeting any outstanding obligations of the Company. At 30 June 2019, the total amount that members of the Company are liable to contribute if the Company is wound up is $200 (2018: $200).

Page 3 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

DIRECTORS’ REPORT

Directors or Auditor Indemnification

The Company has not, during or since the financial year in respect of any person who is or has been an officer or auditor of the Company or a related body corporate;

• Indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer, including costs and expenses in successfully defending legal proceedings; or

• Has paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an officer for the costs and expenses to defend legal proceedings.

With the exception of the following matters:

During the financial year, the Company has paid premiums to insure each of the Directors against liabilities for cost and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director of the Company, other than conduct involving a wilful breach of duty in relation to the Company. The amount of the premium is not disclosed as it is confidential.

Directors’ Benefits

No director has received or become entitled to receive, during or since the end of the financial year, a benefit because of a contract made by the Company, controlled entity or a related body corporate with a director, a firm of which a director is a member or a Company in which a director has a substantial financial interest. This statement excludes a benefit included in the aggregate amount of emoluments received or due and receivable by Directors shown in the Company’s financial statements, or the fixed salary of a full-time employee of the Company, controlled entity or related body corporate.

Auditor’s Declaration

A copy of the auditor’s independence declaration as required under section 60-40 of the Australian Charities and Not for Profits Commission Act 2012 can be found on the page following this report.

Signed in accordance with a resolution of the Board of Directors:

Director ………………………… Director ………………………… Camilla Graves Mike Kendall

Dated this 9th day of September 2019

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Shepard Webster & O’Neill Audit Pty Ltd Certified Practising Accountant, Authorised Audit Company ABN: 89 154 680 190

AUDITOR’S INDEPENDENCE DECLARATION

To McClelland Sculpture Ltd,

In accordance with the requirements of section 60-40 of the Australian Charities and Not for Profits Commission Act 2012, as lead auditor for the audit of McClelland Sculpture Ltd for the year ended 30 June 2019, we declare that, to the best of our knowledge and belief, there have been:

i) No contraventions of the auditor independence requirements of the Australian Charities and Not for Profits Commission Act 2012 in relation to the audit, and;

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

Dated at Frankston on the 9th of September 2019

SHEPARD WEBSTER & O’NEILL AUDIT PTY LTD Certified Practising Accountant Authorised Audit Company No 415478 31 Beach Street Frankston 3199, PO Box 309 Frankston Victoria 3199 Telephone (03) 9781 2633 – Fax (03) 9781 3073 Email – [email protected]

DAVID A SZEPFALUSY DIRECTOR

Level 1 / 31 Beach Street, Frankston Victoria 3199 Liability limited by a P.O. Box 309, Frankston Victoria 3199 22 scheme approved Shepard Webster & T: (03) 9781 2633 F: (03) 9781 3073 O’Neill Audit Pty Ltd under Professional E: [email protected] W: www.shepard.com.au is a CPA Practice Standards Legislation

Page 5 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 30 JUNE 2019

Notes 2019 2018 $$

CONTINUING OPERATIONS

INCOME Revenue (Contract Fees / Grants) 293,363 375,500 Shop Income 60,623 66,446 Café Income 747,912 644,602 Donations & Fundraising 1,508,878 603,286 Investment Income 22,848 38,713 Profit / (Loss) on the Disposal of Investments (Net) 16,389 ( 5,443 ) Other Income 95,305 67,299 TOTAL INCOME 2 2,745,318 1,790,403

EXPENSES Shop Expenses 36,234 34,301 Café Expenses 748,639 664,094 Gallery Activities 201,928 178,431 Buildings & Sculpture Park Development 8,345 16,226 Education Programs 7,711 3,633 Exhibition Expenses 107,974 82,155 Admin Expenses 741,711 783,377 Marketing & Publicity & Fundraising 41,987 30,709 Donations to Estate of A.M. McClelland 892,022 568,182 TOTAL EXPENSES 2,786,551 2,361,108

NET OPERATING PROFIT / (LOSS) ( 41,233 ) ( 570,705 )

23 The Accompanying Notes Form Part Of These Financial Statements

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McCLELLAND SCULPTURE LTD ACN 082 448 262

STATEMENT OF OTHER COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR ENDED 30 JUNE 2019

Notes 2019 2018 $$

NET OPERATING PROFIT / (LOSS) ( 41,233 ) ( 570,705 )

OTHER COMPREHENSIVE INCOME

Items that will not be reclassified subsequently to profit or loss: - -

Items that may be reclassified subsequently to profit or loss: Movement in Unrealised Gain / (Loss) on Investments ( 30,566 ) ( 2,892 )

TOTAL COMPREHENSIVE LOSS ( 71,799 ) ( 573,597 )

24 The Accompanying Notes Form Part Of These Financial Statements

Page 7 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019

Notes 2019 2018 $$

CURRENT ASSETS Cash and Cash Equivalents 3 983,883 1,501,544 Trade and Other Receivables 430,580 95,083 Other Assets 4 26,309 34,034 TOTAL CURRENT ASSETS 1,440,772 1,630,661

NON CURRENT ASSETS Investments 260,256 593,474 Property, Plant and Equipment 5 - 111,518 Sculptures Collection (at Valuation) 6 168,000 - TOTAL NON CURRENT ASSETS 428,256 704,992

TOTAL ASSETS 1,869,028 2,335,653

CURRENT LIABILITIES Trade and Other Payables 7 656,364 1,041,448 Short Term Employee Entitlements 8 85,446 95,188 TOTAL CURRENT LIABILITIES 741,810 1,136,636

NON CURRENT LIABILITIES Long Term Employee Entitlements 8 - - TOTAL NON CURRENT LIABILITIES - -

TOTAL LIABILITIES 741,810 1,136,636

NET ASSETS 1,127,218 1,199,017

EQUITY Retained Earnings 1,141,351 1,182,584 Financial Asset Reserve 9 ( 14,133 ) 16,433

TOTAL EQUITY 1,127,218 1,199,017

The Accompanying Notes Form Part Of These Financial Statements 25

Page 8 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

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

Notes 2019 2018 $$

EQUITY

Retained Earnings

Opening Balance 1,182,584 1,753,289

Operating Profit / (Loss) from Continuing Operations ( 41,233 ) ( 570,705 )

Closing Balance 1,141,351 1,182,584

Financial Asset Reserve

Opening Balance 16,433 19,325

Movement in Unrealised Gain / (Loss) on Investments ( 30,566 ) ( 2,892 )

Closing Balance ( 14,133 ) 16,433

TOTAL EQUITY 1,127,218 1,199,017

26 The Accompanying Notes Form Part Of These Financial Statements

Page 9 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2019

Notes 2019 2018 $$

CASH FLOWS FROM OPERATING ACTIVITIES Cash Receipts from Customers and Donors 2,649,873 1,994,423 Interest Received 8,729 7,706 Cash Payments to Suppliers and Employees ( 2,530,411 ) ( 1,552,754 ) NET CASH PROVIDED BY / (USED IN) 10 OPERATING ACTIVITIES 128,191 449,375

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from the Sale of Investments 302,652 44,043 Payments for Property, Plant and Equipment ( 780,504 ) ( 111,518 ) Payments for Sculptures Collection ( 168,000 ) ( 93,182 ) NET CASH PROVIDED BY / (USED IN) INVESTING ACTIVITIES ( 645,852 ) ( 160,657 )

NET (DECREASE) / INCREASE IN CASH HELD ( 517,661 ) 288,718

CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 1,501,544 1,212,826

CASH AND CASH EQUIVALENTS AT END 10 OF FINANCIAL YEAR 983,883 1,501,544

27 The Accompanying Notes Form Part Of These Financial Statements

Page 10 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Directors have prepared the financial statements on the basis that the Company is a non- reporting entity because there are no users who are dependent on its general-purpose financial statements. These financial statements are therefore special purpose financial statements that have been prepared in order to meet the requirements of the Australian Charities and Not for Profits Commission Act 2012. The Company is a not-for-profit entity for financial reporting purposes under Australian Accounting Standards.

Basis for Preparation

The financial statements have been prepared in accordance with the mandatory Australian Accounting Standards applicable to entities reporting under the Australian Charities and Not for Profits Commission Act 2012 and the significant accounting policies disclosed below, which the Directors have determined are appropriate to meet the needs of members. Such accounting policies are consistent with those of previous periods unless stated otherwise.

The report has been prepared in using the following applicable Australian Accounting Standards:

AASB 101: Presentation of Financial Statements; AASB 107: Statement of Cash Flows; AASB 108: Accounting Policies, Changes in Accounting Estimates and Errors; AASB 1048: Interpretation of Standards; AASB 1054: Australian Additional Disclosures.

No other applicable Accounting Standards, Australian Accounting Interpretations or other authoritative pronouncements of the Australian Accounting Standards Board have been applied.

Reporting Basis and Conventions

The financial statements, except for the cash flow information, have been prepared on an accruals basis and are based on historical costs unless otherwise stated in the notes. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise. The amounts presented in the financial statements have been rounded to the nearest dollar.

Revenue and other income

Grant revenue

Grant revenue is recognised in the statement of profit or loss and other comprehensive income / (loss) when the Company obtains control of the grant and it is probable that the economic benefits gained from the grant will flow to the Company and the amount of the grant can be measured reliably.

Page 11 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue and other income (Continued)

Grant revenue (Continued)

If conditions are attached to the grant which must be satisfied before it is eligible to receive the contribution, the recognition of the grant as revenue will be deferred until those conditions are satisfied.

When grant revenue is received whereby the Company incurs an obligation to deliver economic value directly back to the contributor, this is considered a reciprocal transaction and the grant revenue is recognised in the statement of financial position as a liability until the service has been delivered to the contributor, otherwise the grant is recognised as income on receipt.

Donations and bequests

Donations are recognised as revenue when the intention of the donation has been expensed. The donation is recognised as a liability until the “intent” is delivered. Bequests are recognised as revenue when received.

Interest revenue

Interest revenue is recognised as it accrues using the effective interest rate method, which for floating rate financial assets is the rate inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been established

Contract Services revenue

Revenue from services rendered is recognised in profit or loss upon the delivery of service to the customers.

All revenue is stated net of the amount of goods and services tax (GST).

Income Tax

No provision for income tax has been raised as the Company is exempt from income tax under Div 50 of the Income Tax Assessment Act 1997.

Inventories

Inventories are measured at the lower of cost and current replacement cost.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at-call with banks and other short- term highly liquid investments with original maturities of three months or less. 29

Page 12 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Trade and Other Receivables

Trade and other receivables include amounts due from donors and any outstanding grant receipts. Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets.

Trade and Other Payables

Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Company during the reporting period, which remain unpaid. The balance is recognised as a current liability with the amount being normally paid within 30 days of recognition of the liability.

Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities, which are recoverable from, or payable to, the ATO, are presented as operating cash flows included in receipts from customers or payments to suppliers.

Employee Entitlements

Short-term employee benefits

Provision is made for the Company’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service, including wages, salaries and sick leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled.

The Company’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as a part of accounts payable and other payables in the statement of financial position.

Contributions are made by the Company to an employee superannuation fund and are charged as expenses when incurred.

Page 13 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Property, Plant and Equipment

Property, plant and equipment are brought to account at cost or at independent or Directors’ valuation, less, where applicable, any accumulated depreciation or amortisation and any impairment in value. The carrying amount of property, plant and equipment is reviewed annually by Directors’ to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows, which will be received from the assets employment and subsequent disposal. The expected net cash flows have not been discounted to their present values in determining recoverable amounts.

The carrying values of plant and equipment are also reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any impairment exists, the assets are written down to their recoverable amount and the loss recognised in the income statement. The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, are depreciated over their useful lives commencing from the time the assets held ready for use.

Sculptures Collection – At Valuation

Sculptures are recognised at cost when purchased. Sculptures that have been contributed at no cost, or for nominal cost, are initially recognised and measured at the fair value of the Sculpture at the date it is acquired.

Sculptures are revalued based on periodic, but at least triennial, valuations by an external independent valuer.

In periods when the Sculptures are not subject to an independent valuation, the Directors’ conduct Directors’ valuations to ensure the carrying amount for the Sculptures is not materially different to the fair value.

Increases in the carrying amount arising on revaluation of Sculptures are recognised in other comprehensive income and accumulated in the revaluation surplus in equity. Revaluation decreases that offset previous increases of the same class of assets shall be recognised in other comprehensive income under the heading of revaluation surplus. All other decreases are recognised in profit or loss.

Page 14 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Investments

Investments are held at market value and are classified as non-current assets. Any unrealised gains and losses for the investments are recognised as other comprehensive income / (loss). Realised gains and losses are then reversed from other comprehensive income / (loss) and recorded in the statement of comprehensive income / (loss) in the period in which they occur.

Comparative Figures

Where required by Accounting Standards, comparative figures have been adjusted to conform with changes in presentation for the current financial year.

Page 15 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

2019 2018 $$

NOTE 2 - OPERATING PROFIT / (LOSS) (a) Operating Profit / (Loss) before Income Tax has been determined after: Audit Fees 12,500 10,940 Provision for Annual Leave 1,739 ( 3,978 ) Provision for Long Service Leave ( 11,481 ) 11,782 (b) Operating Revenue Included in Operating Profit / (Loss) are the following items of Operating Revenue: Contract Services 112,045 210,000 Grants - Creative Victoria 115,500 115,500 - Frankston City Council 50,000 50,000 - Gordon Darling 10,818 - - Specific 5,000 - Rent 26,608 26,871 Memberships/Friends 36,848 15,936 Interest Received 8,729 7,706 Shop and Café Income 808,535 711,048 Donations & Fundraising 1,508,878 603,286 Investment Income 22,848 38,713 Profit on Sale Investments - - Loss on Sale investments 16,389 ( 5,443 ) Other Income 23,120 16,786 2,745,318 1,790,403 NOTE 3 - CASH AND CASH EQUIVALENTS Cash at Bank 983,033 1,500,694 Petty Cash & Other Cash Floats 850 850 983,883 1,501,544 NOTE 4 - OTHER ASSETS Current Stock in Trade - at cost 21,340 23,694 Franking Credit Refunds 4,969 10,340 26,309 34,034

Page 16 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

2019 2018 $$

NOTE 5 - SCULPTURES COLLECTION (AT VALUATION) Sculptures Collection (at Valuation) 168,000 - 168,000 - NOTE 6 - PROPERTY, PLANT AND EQUIPMENT Plant and Equipment 57,032 57,032 Less Accumulated Depreciation ( 57,032 ) ( 57,032 ) Education Pavilion - 111,518 Less Accumulated Depreciation - - - 111,518 NOTE 7 - TRADE AND OTHER PAYABLES Current Income in Advance 522,933 959,023 Trade Creditors and Accruals 133,431 82,425 656,364 1,041,448

NOTE 8 - EMPLOYEE ENTITLEMENTS Short Term Annual Leave 58,119 56,380 Long Service Leave 27,327 38,808 85,446 95,188 Long Term Long Service Leave - - - - NOTE 9 - FINANCIAL ASSET RESERVE

The Financial Assets Reserve records the unrealised gains and losses on Investments. Financial Assets Reserve Opening Balance 16,433 19,325 Movement in Unrealised Gain / (Loss) on Investments ( 30,566 ) ( 2,892 ) ( 14,133 ) 16,433

Page 17 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

2019 2018 $$

NOTE 10 - NOTES TO THE STATEMENT OF CASH FLOWS

Reconciliation of Cash For the purposes of this Statement of Cash Flows, cash includes cash on hand and at call deposits with banks of financial institutions, net of bank overdrafts and investments in money market instruments maturing within less than three months. 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:

Cash at Bank, Petty Cash and other Cash Floats 983,883 1,501,544 Reconciliation of Net Cash provided by Operating Activities to Operating Profit / (Loss) after Income Tax Operating Profit / (Loss) after Income Tax ( 41,233 ) ( 570,705 ) Non Cash Flows in Operating Profit / (Loss): Donation of Sculptures 892,022 568,182 Changes in Assets & Liabilities: (Increase)/Decrease in Other Assets 7,725 17,215 (Increase)/Decrease in Trade and Other Receivables ( 335,497 ) 49,663 Increase/(Decrease) in Employee Entitlements ( 9,742 ) 7,805 Increase/(Decrease) in Trade and Other Payables ( 385,084 ) 377,215 Net Cash Provided by Operating Activities 128,191 449,375

NOTE 11 - RELATED PARTY TRANSACTIONS

Directors The names of Directors who have held office during the financial year are set out in the Directors Report.

There were no transactions during the year that resulted in income received or due and receivable by Directors from the Company. The Directors were not remunerated during the year.

NOTE 12 - CONTINGENT LIABILITIES No contingent liabilities exist as at 30 June 2019, or at 30 June 2018.

Page 18 of 23

McCLELLAND SCULPTURE LTD ACN 082 448 262

DIRECTORS’ DECLARATION

In accordance with a resolution of the Directors of McClelland Sculpture Ltd, the Directors declare that:

1. The financial statements and notes, as set out on pages 1 to 18, are in accordance with the Australian Charities and Not for Profits Commission Act 2012 and:

a. comply with the Australian Accounting Standards applicable to the Company, the ACNC Regulations 2012 and any other mandatory professional reporting requirements; and

b. give a true and fair view of the financial position of the Company as at 30 June 2019 and its performance for the year ended on that date in accordance with the accounting policies described in Note 1 to the financial statements.

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.

This declaration is made in accordance with a resolution of the Board of Directors.

Director ………………………… Director ………………………… Camilla Graves Mike Kendall

Dated this 9th day of September 2019

Page 19 of 23

Shepard Webster & O’Neill Audit Pty Ltd Certified Practising Accountant, Authorised Audit Company ABN: 89 154 680 190

McCLELLAND SCULPTURE LTD INDEPENDENT AUDIT REPORT ACN 082 448 262

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of McClelland Sculpture Ltd, which comprises the Statement of Financial Position as at 30 June 2019, the Statement of Profit or Loss, Statement of Other Comprehensive Income / (Loss), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the Directors’ declaration.

In our opinion, the accompanying financial report gives a true and fair view of the financial position of McClelland Sculpture Ltd as at 30 June 2019 and of its financial performance for the year then ended in accordance with the accounting policies described in Note 1 to the financial statements and the requirements Division 60 of the Australian Charities and Not-for-profits Commission Regulation 2013.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Company in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110: Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter – Basis of Accounting

We draw attention to Note 1 to the financial report, which describes the basis of accounting. The financial report has been prepared for the purpose of fulfilling the Directors’ financial reporting responsibilities under the Australian Charities and Not-for-profits Commission Act 2012. As a result, the financial report may not be suitable for another purpose. Our opinion is not modified in respect of this matter.

Level 1 / 31 Beach Street, Frankston Victoria 3199 Liability limited by a P.O. Box 309, Frankston Victoria 3199 scheme approved Shepard Webster & T: (03) 9781 2633 F: (03) 9781 3073 37 O’Neill Audit Pty Ltd under Professional E: [email protected] W: www.shepard.com.au is a CPA Practice Standards Legislation

Page 20 of 23

Shepard Webster & O’Neill Audit Pty Ltd Certified Practising Accountant, Authorised Audit Company ABN: 89 154 680 190

McCLELLAND SCULPTURE LTD INDEPENDENT AUDIT REPORT (CONTINUED) ACN 082 448 262

Information Other than the Financial Report and Auditor’s Report Thereon

The Directors of the Company are responsible for the other information. The other information comprises the information included in the Company’s annual report for the year ended 30 June 2019, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The Directors of the Company 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 Charities and Not-for- profits Commission Act 2012 and for such internal control as the Directors determine 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.

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 intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

The Directors of the Company 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 the 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 this financial report.

Level 1 / 31 Beach Street, Frankston Victoria 3199 Liability limited by a P.O. Box 309, Frankston Victoria 3199 scheme approved Shepard Webster & T: (03) 9781 2633 F: (03) 9781 3073 38 O’Neill Audit Pty Ltd under Professional E: [email protected] W: www.shepard.com.au is a CPA Practice Standards Legislation

Page 21 of 23

Shepard Webster & O’Neill Audit Pty Ltd Certified Practising Accountant, Authorised Audit Company ABN: 89 154 680 190

McCLELLAND SCULPTURE LTD INDEPENDENT AUDIT REPORT (CONTINUED) ACN 082 448 262

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the 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.

Level 1 / 31 Beach Street, Frankston Victoria 3199 Liability limited by a P.O. Box 309, Frankston Victoria 3199 scheme approved Shepard Webster & T: (03) 9781 2633 F: (03) 9781 3073 O’Neill Audit Pty Ltd under39 Professional E: [email protected] W: www.shepard.com.au is a CPA Practice Standards Legislation

Page 22 of 23

Shepard Webster & O’Neill Audit Pty Ltd Certified Practising Accountant, Authorised Audit Company ABN: 89 154 680 190

McCLELLAND SCULPTURE LTD INDEPENDENT AUDIT REPORT (CONTINUED) ACN 082 448 262

Dated at Frankston on the 9th of September 2019

DAVID A SZEPFALUSY DIRECTOR

Level 1 / 31 Beach Street, Frankston Victoria 3199 Liability limited by a P.O. Box 309, Frankston Victoria 3199 scheme approved Shepard Webster & T: (03) 9781 2633 F: (03) 9781 3073 40 O’Neill Audit Pty Ltd under Professional E: [email protected] W: www.shepard.com.au is a CPA Practice Standards Legislation

Page 23 of 23

THE ESTATE OF ANNIE MAY McCLELLAND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2019

41 THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

TRUSTEES REPORT

The Trustees have pleasure in submitting their report and the financial statements of the Trust for the year ended 30 June 2019.

Trustees The Trustees in office during the year and to the date of this report are:

Susie Hamson (Chair) John Calvert-Jones Julie Kantor Lisa Roet Stephen Charles Mike Kendall (Treasurer) Camilla Graves (Deputy Chair) Jonathan Clements John Young Colin Simpson

Principal Activities The principal activity of the Trust is that of providing funding from investments to operate an Art Gallery and Cultural Hall, and holding Property and Collection assets utilised by the Art Gallery and Cultural Hall.

Operating Results The trading surplus of the Trust before Donations from McClelland Sculpture Ltd amounted to $592,034 (2018: trading deficit $58,630).

The trading surplus of the Trust after Donations from McClelland Sculpture Ltd amounted to $1,484,056 (2018: trading surplus $509,552).

Review of Operations During the year, the Trust received a significant donation of Art and Sculpture Collection items from McClelland Sculpture Ltd, totalling $892,022 (2018: $568,182). The Estate of A.M. McClelland is the owner of the McClelland Group Art and Sculpture Collection.

Other than the matters described above, it is the opinion of the Trustees that the results of the Trust’s operations during the year were not substantially affected by any other item, transaction or event of a material and unusual nature.

Trustees Benefits No Trustee of the Trust has received or become entitled to receive a benefit by reason of a contract made by the Trust or a related corporation with a Trustee or with a firm of which he or she is a member, or with a company in which he or she has a substantial financial interest.

Likely Developments The likely developments in the operation of the Trust and the expected results of those operations in financial years subsequent to the year ended 30 June 2019 are a continuation of those activities set out above.

Auditor’s Declaration A copy of the auditor’s independence declaration as required under section 60-40 of the Australian Charities and Not for Profits Commission Act 2012 can be found on the page following this report.

Signed in accordance with a resolution of the Trustees.

Trustee ………………………… Trustee ………………………… Camilla Graves Mike Kendall

Dated this 9th day of September 2019

Page 2 of 21

Shepard Webster & O’Neill Audit Pty Ltd Certified Practising Accountant, Authorised Audit Company ABN: 89 154 680 190

AUDITOR’S INDEPENDENCE DECLARATION

To The Estate of Annie May McClelland,

In accordance with the requirements of section 60-40 of the Australian Charities and Not for Profits Commission Act 2012, as lead auditor for the audit of The Estate of Annie May McClelland for the year ended 30 June 2019, we declare that, to the best of our knowledge and belief, there have been:

i) No contraventions of the auditor independence requirements of the Australian Charities and Not for Profits Commission Act 2012 in relation to the audit, and;

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

Dated at Frankston on the 9th of September 2019

DAVID A SZEPFALUSY DIRECTOR

Level 1 / 31 Beach Street, Frankston Victoria 3199 Liability limited by a P.O. Box 309, Frankston Victoria 3199 scheme approved Shepard Webster & T: (03) 9781 2633 F: (03) 9781 3073 O’Neill Audit Pty Ltd under Professional E: [email protected] W: www.shepard.com.au is a CPA Practice Standards Legislation

Page 3 of 2143

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

TRUSTEES DECLARATION

In accordance with a resolution of the Trustees of The Estate of Annie May McClelland, the Trustees declare that:

1. The financial statements and notes are in accordance with the Australian Charities and Not for Profits Commission Act 2012 and:

a. comply with the Australian Accounting Standards applicable to the Trust, the ACNC Regulations 2012 and any other mandatory professional reporting requirements; and

b. give a true and fair view of the financial position of the Trust as at 30 June 2019 and its performance for the year ended on that date in accordance with the accounting policies described in Note 1 to the financial statements.

2. In the Trustees opinion, there are reasonable grounds to believe that the Trust will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Trustees.

Trustee ………………………… Trustee ………………………… Camilla Graves Mike Kendall

Dated this 9th day of September 2019

Page 4 of 21 44

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 30 JUNE 2019

Notes 2019 2018 $$ CONTINUING OPERATIONS

INCOME Bequests and Bequest Investment Income 342,639 49,988 Donations from McClelland Sculpture Ltd 892,022 568,182 Grants Received 100,000 100,000 Dividends and Trust Distributions 98,809 128,156 Interest 11,164 6,208 Imputation Credits Refundable 37,213 50,859 Donations - Monetary - 10,000 Profit on the Disposal of Investments 334,107 44,054 Other Income 12,724 20,694 TOTAL INCOME 1,828,678 978,141

EXPENDITURE Accountancy Fees 5,200 7,650 Air Conditioning Expenses 6,250 25,000 Buildings & Grounds Maintenance 3,149 4,363 Conservation and Valuation Expenses 11,436 4,095 Contract Fee 112,045 210,000 Depreciation 147,126 143,104 Fire & Security Monitoring 1,432 9,217 Insurance 45,746 57,923 Investment Management Fees & Brokerage 9,229 5,531 Freight, Storage, Installation & Signage of 1,275 1,612 Permanent Collection Sundry Expenses 1,734 94 TOTAL EXPENDITURE 344,622 468,589

NET TRADING SURPLUS/(DEFICIT) 1,484,056 509,552

The Accompanying Notes Form Part Of These Financial Statements Page 5 of 21 45

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2019

Notes 2019 2018 $$

NET TRADING SURPLUS/(DEFICIT) 1,484,056 509,552

OTHER COMPREHENSIVE INCOME

Items that will not be reclassified subsequently to profit or loss: - -

Items that may be reclassified subsequently to profit or loss: Unrealised Gain / (Loss) on Investments ( 386,548 ) 9,789

TOTAL COMPREHENSIVE INCOME 1,097,508 519,341

The Accompanying Notes Form Part Of These Financial Statements

Page 6 of 21 46

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019

Notes 2019 2018 $$

CURRENT ASSETS Cash and Cash Equivalents 570,658 564,766 Other Assets 2 118,994 52,105 TOTAL CURRENT ASSETS 689,652 616,871

NON CURRENT ASSETS Investments 2,094,087 1,968,861 Property, Plant and Equipment 3 10,973,935 10,209,132 Collection (at Valuation) 27,639,109 27,201,811 TOTAL NON CURRENT ASSETS 40,707,131 39,379,804

TOTAL ASSETS 41,396,783 39,996,675

CURRENT LIABILITIES Trade and Other Payables 386,911 84,311 TOTAL CURRENT LIABILITIES 386,911 84,311

TOTAL LIABILITIES 386,911 84,311

NET ASSETS 41,009,872 39,912,364

EQUITY Accumulated Funds 20,845,511 19,361,455 Land & Buildings Revaluation Reserve 4 4,705,199 4,705,199 Collection Revaluation Reserve 5 15,448,515 15,448,515 Financial Asset Revaluation Reserve 6 10,647 397,195

TOTAL EQUITY 41,009,872 39,912,364

The Accompanying Notes Form Part Of These Financial Statements

Page 7 of 21

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

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

Notes 2019 2018 $$

CHANGES IN ACCUMULATED FUNDS Opening Balance 19,361,455 18,851,903 Surplus / (Deficit) 1,484,056 509,552 Ending Balance 20,845,511 19,361,455

CHANGES IN THE LAND & BUILDINGS REVALUATION RESERVE Opening Balance 4,705,199 4,705,199 Increase / (Decrease) in Land & Buildings Valuation - - Ending Balance 4,705,199 4,705,199

CHANGES IN THE COLLECTION REVALUATION RESERVE Opening Balance 15,448,515 15,448,515 Increase / (Decrease) in Collection Valuation - - Ending Balance 15,448,515 15,448,515

CHANGES IN THE FINANCIAL ASSET REVALUATION RESERVE Opening Balance 397,195 544,090 Unrealised Gain / (Loss) on Investments ( 386,548 ) ( 146,895 ) Ending Balance 10,647 397,195

TOTAL EQUITY 41,009,872 39,912,364

The Accompanying Notes Form Part Of These Financial Statements

Page 8 of 21

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2019

Notes 2019 2018 $$

CASH FLOWS FROM OPERATING ACTIVITIES Cash Receipts from Customers and Donors 431,689 423,292 Interest Received 11,164 6,208 Cash Payments to Suppliers and Employees ( 127,014 ) ( 390,861 ) NET CASH PROVIDED BY/(USED IN) 7 OPERATING ACTIVITIES 315,839 38,639

CASH FLOWS FROM INVESTING ACTIVITIES Net Proceeds from the Sale / Purchase of Investments ( 177,667 ) 348,632 Payments for Property, Plant and Equipment ( 19,907 ) ( 60,868 ) Payments for Collection ( 112,373 ) - NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES ( 309,947 ) 287,764

NET INCREASE/(DECREASE) IN CASH HELD 5,892 326,403

CASH AT BEGINNING OF FINANCIAL YEAR 564,766 238,363

CASH AT END OF FINANCIAL YEAR 7 570,658 564,766

The Accompanying Notes Form Part Of These Financial Statements

Page 9 of 21

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Trustees have prepared the financial statements on the basis that the Trust is a non-reporting entity because there are no users who are dependent on its general-purpose financial statements. These financial statements are therefore special purpose financial statements that have been prepared in order to meet the requirements of the Australian Charities and Not for Profits Commission Act 2012. The Trust is a not-for-profit entity for financial reporting purposes under Australian Accounting Standards.

Basis for Preparation

The financial statements have been prepared in accordance with the mandatory Australian Accounting Standards applicable to entities reporting under the Australian Charities and Not for Profits Commission Act 2012 and the significant accounting policies disclosed below, which the Trustees have determined are appropriate to meet the needs of members. Such accounting policies are consistent with those of previous periods unless stated otherwise.

The report has been prepared in using the following applicable Australian Accounting Standards:

No other applicable Accounting Standards, Australian Accounting Interpretations or other authoritative pronouncements of the Australian Accounting Standards Board have been applied.

Reporting Basis and Conventions

(a) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at-call with banks and other short- term highly liquid investments with original maturities of three months or less.

Page 10 of 21 50

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(b) Property, Plant and Equipment

Property, plant and equipment are brought to account at cost or at independent or Trustee’s valuation, less, where applicable, any accumulated depreciation or amortisation and any impairment in value. The carrying amount of property, plant and equipment is reviewed annually by Trustee’s to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows, which will be received from the assets employment and subsequent disposal. The expected net cash flows have not been discounted to their present values in determining recoverable amounts.

Depreciation

The depreciable amount of all property, plant and equipment is depreciated on a straight-line basis over the asset’s useful life commencing from the time the asset is held ready for use.

The depreciation rates used for each class of depreciable assets are

Class of Fixed Asset Depreciation Rate

Buildings Improvements 10% Furniture and Fixtures 15% Plant and Equipment 15%

The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each annual reporting period.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount.

These gains and losses are included in the statement of profit or loss and other comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred back and recognised through other comprehensive income.

Page 11 of 21 51

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Artwork and sculptures are recognised at cost when purchased. Artwork and sculptures that have been contributed at no cost, or for nominal cost, are initially recognised and measured at the fair value at the date it is acquired.

Artwork and sculptures are revalued based on periodic, but at least triennial, valuations by an external independent valuer.

In periods when the artwork and sculptures are not subject to an independent valuation, the Trustees’ conduct Trustees’ valuations to ensure the carrying amount for the artwork and sculptures is not materially different to the fair value.

Increases in the carrying amount arising on revaluation of artwork and sculptures are recognised in other comprehensive income and accumulated in the revaluation surplus in equity. Revaluation decreases that offset previous increases of the same class of assets shall be recognised in other comprehensive income under the heading of revaluation surplus. All other decreases are recognised in profit or loss.

(d) Investments

(e) Trade and Other Receivables

(f) Trade and Other Payables

Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Trust during the reporting period, which remain unpaid. The balance is recognised as a current liability with the amount being normally paid within 30 days of recognition of the liability.

Page 12 of 21 52

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(g) Income Tax

The Trust has been exempted from the payment of income tax.

(h) Contracts For Capital Expenditure

The Trust had not committed to any capital expenditure at balance date, nor the prior balance date.

(i) Fees to Trustee

The Trust has not yet drawn and not accounted for as a liability, any fees to the Trustees of the Trust.

(j) Comparative Figures

Where required by Accounting Standards, comparative figures have been adjusted to conform with changes in presentation for the current financial year.

Page 13 of 21

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

2019 2018 $$

NOTE 2 - OTHER ASSETS

Franking Credit Refunds 88,000 50,847 Trade Debtors 15,293 - GST Clearing 15,701 1,258 Total Other Assets 118,994 52,105

NOTE 3 - PROPERTY, PLANT AND EQUIPMENT

Land (at Valuation) 9,200,000 9,200,000 Total 9,200,000 9,200,000

Buildings (at Valuation) 1,100,000 1,100,000 Less Accumulated Depreciation - Buildings ( 330,000) ( 220,000) Buildings Improvements (at Cost) 936,944 46,869 Less Accumulated Depreciation - Buildings Improvements ( 9,538) ( 4,850) Total 1,697,406 922,019

Furniture and Fixtures (at Cost) 183,532 161,679 Less Accumulated Depreciation - Furniture & Fittings ( 107,003) ( 74,566) Total 76,529 87,113

Total Property, Plant and Equipment 10,973,935 10,209,132

Page 14 of 21

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 3: PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Movement in the carrying amount of Property, Plant and Equipment: Buildings and Furniture and Land Buildings Total Fixtures Improvements $$$$

Carrying Amount at 1 July 2017 9,200,000 1,013,565 77,803 10,291,368

Additions at Cost - 22,216 38,652 60,868 Depreciation Expense - ( 113,762 ) ( 29,342 ) ( 143,104 ) Carrying Amount at 30 June 2018 9,200,000 922,019 87,113 10,209,132

Additions at Cost - 890,075 21,854 911,929 Depreciation Expense - ( 114,688 ) ( 32,438 ) ( 147,126 ) Carrying Amount at 30 June 2019 9,200,000 1,697,406 76,529 10,973,935

Page 15 of 21

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

2019 2018 $$

NOTE 4 - LAND & BUILDINGS REVALUATION RESERVE

Opening Balance 4,705,199 4,705,199 Movement in Revaluation Reserve - - Closing Balance 4,705,199 4,705,199

A revaluation of the Trust 's Land and Buildings took place in 2016 by Charter Keck Cramer. The Trustees adopted this valuation resulting in a revaluation increment of $4,705,199, which has been taken up in the financial statements as an increase in the Land & Buildings Revaluation Reserve. The movements in valuation were recorded through Other Comprehensive Income and allocated against this reserve.

NOTE 5 - COLLECTION REVALUATION RESERVE

Opening Balance 15,448,515 15,448,515 Movement in Revaluation Reserve - - Closing Balance 15,448,515 15,448,515

A revaluation of the Trust 's Collection took place in 2016 financial year by an independent valuer. The Trustees adopted this valuation resulting in a revaluation increment of $15,448,515, which has been taken up in the financial statements as an increase in the Collection Revaluation Reserve. The movements in valuation were recorded through Other Comprehensive Income and allocated against this reserve.

NOTE 6 - FINANCIAL ASSET RESERVE

Opening Balance 397,195 544,090 Unrealised Gain on Investments ( 386,548 ) ( 146,895 ) Closing Balance 10,647 397,195

The Financial Assets Reserve records the unrealised gains and losses on Investments.

Page 16 of 21 56

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

2019 2018 $$

NOTE 7 - NOTES TO THE STATEMENT OF CASH FLOWS

Cash at Bank, Petty Cash and other Cash Floats 570,658 564,766

Reconciliation of Net Cash provided by Operating Activities to Operating Profit / (Loss) after Income Tax

Operating Profit / (Loss) after Income Tax 1,484,056 509,552

Non Cash Flows in Operating Profit / (Loss): Profit on the Disposal of Investments ( 334,107 ) ( 39,946 ) Depreciation 147,126 143,104 Donations from Cultural Gifts Program ( 324,925 ) ( 29,999 ) Donations from McClelland Sculpture Ltd ( 892,022 ) ( 568,182 )

Changes in Assets & Liabilities: (Increase)/Decrease in Other Assets ( 66,889 ) 15,335 Increase/(Decrease) in Trade and Other Payables 302,600 18,775 Increase/(Decrease) in Grants in Advance - ( 10,000 ) Net Cash Provided by Operating Activities 315,839 38,639

Page 17 of 21 57

Shepard Webster & O’Neill Audit Pty Ltd Certified Practising Accountant, Authorised Audit Company ABN: 89 154 680 190

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL) INDEPENDENT AUDIT REPORT

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of The Estate of Annie May McClelland, which comprises the Statement of Financial Position as at 30 June 2019, the Statement of Profit or Loss, Statement of Other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the Trustees’ Report.

In our opinion, the accompanying financial report gives a true and fair view of the financial position of The Estate of Annie May McClelland as at 30 June 2019 and of its financial performance for the year then ended in accordance with the accounting policies described in Note 1 to the financial statements and the requirements Division 60 of the Australian Charities and Not-for-profits Commission Regulation 2013.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Trust in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110: Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter – Basis of Accounting

We draw attention to Note 1 to the financial report, which describes the basis of accounting. The financial report has been prepared for the purpose of fulfilling the Trustees’ financial reporting responsibilities under the Australian Charities and Not-for-profits Commission Act 2012. As a result, the financial report may not be suitable for another purpose. Our opinion is not modified in respect of this matter.

Level 1 / 31 Beach Street, Frankston Victoria 3199 Liability limited by a P.O. Box 309, Frankston Victoria 3199 scheme approved Shepard Webster & T: (03) 9781 2633 F: (03) 9781 3073 O’Neill Audit Pty Ltd under Professional E: [email protected] W: www.shepard.com.au is a CPA Practice Standards Legislation

58 Page 18 of 21

Shepard Webster & O’Neill Audit Pty Ltd Certified Practising Accountant, Authorised Audit Company ABN: 89 154 680 190

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL) INDEPENDENT AUDIT REPORT

Information Other than the Financial Report and Auditor’s Report Thereon

The Trustees of the Trust are responsible for the other information. The other information comprises the information included in the Trust’s annual report for the year ended 30 June 2019, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Trustees for the Financial Report

The Trustees of the Trust 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 Charities and Not-for-profits Commission Act 2012 and for such internal control as the Trustees determine 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.

In preparing the financial report, the Trustees are responsible for assessing the Trust’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 Trustees either intend to liquidate the Trust or to cease operations, or have no realistic alternative but to do so.

The Trustees of the Trust are responsible for overseeing the Trust’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Report

Level 1 / 31 Beach Street, Frankston Victoria 3199 Liability limited by a P.O. Box 309, Frankston Victoria 3199 scheme approved Shepard Webster & T: (03) 9781 2633 F: (03) 9781 3073 O’Neill Audit Pty Ltd under Professional E: [email protected] W: www.shepard.com.au is a CPA Practice Standards Legislation

Page 19 of 21 59

Shepard Webster & O’Neill Audit Pty Ltd Certified Practising Accountant, Authorised Audit Company ABN: 89 154 680 190

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL) INDEPENDENT AUDIT REPORT

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Trustees.

• Conclude on the appropriateness of the Trustees’ 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 Trust’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 Trust to cease to continue as a going concern.

We communicate with the Trustees 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.

Level 1 / 31 Beach Street, Frankston Victoria 3199 Liability limited by a P.O. Box 309, Frankston Victoria 3199 scheme approved Shepard Webster & T: (03) 9781 2633 F: (03) 9781 3073 O’Neill Audit Pty Ltd under Professional E: [email protected] W: www.shepard.com.au is a CPA Practice Standards Legislation

Page 20 of 21 60

Shepard Webster & O’Neill Audit Pty Ltd Certified Practising Accountant, Authorised Audit Company ABN: 89 154 680 190

THE ESTATE OF ANNIE MAY McCLELLAND (HARRY McCLELLAND ART GALLERY & CULTURAL HALL) INDEPENDENT AUDIT REPORT

Dated at Frankston on the 9th of September 2019

DAVID A SZEPFALUSY DIRECTOR

Level 1 / 31 Beach Street, Frankston Victoria 3199 Liability limited by a P.O. Box 309, Frankston Victoria 3199 scheme approved Shepard Webster & T: (03) 9781 2633 F: (03) 9781 3073 O’Neill Audit Pty Ltd under Professional E: [email protected] W: www.shepard.com.au is a CPA Practice Standards Legislation

Page 21 of 2161 Back cover: Pia Van Gelder, Psychic Synth II 2019, installation view, McClelland. Photo Christian Capurro.